There seems to be some kind of "inertia" within the government in taking political decisions on economic reforms, a top Infosys official said today.
"I think there is a some kind of inertia within the government in taking a political decision ... Of pushing through reforms ... That is impacting sentiments towards the country and impacting the inflows," company's Chief Financial Officer V Balakrishnan said.
Asked which way the rupee -- the worst performer among Asian currencies in 2011 -- would move going forward, he said given India's sustained huge trade deficit over a long period of time, "rupee has more chance of depreciating than appreciating".
According to him, the rupee would move in a band of 50-55 against the US dollar in the next few months (short-term), "but if you take a long-term view, it will only depreciate further".
In the short-term, the rupee would appreciate because of various factors, including the government decision to increase the level of investment in the debt market and steps in the derivatives market.
However, he said given India's sustained trade deficit over a long period of time, high oil price and the fact that emerging markets are seen as risk in a volatile global economic environment, inflows would come down.
"India is slowing down. We are talking about 7% [GDP] growth [for 2011-12] when the potential to grow is 12 to 13%," Balakrishnan added.
