 "Narendra Modi")
Prime Minister Narendra Modi on Saturday ruled out devaluing the rupee at the expense of India's trade partners, taking a dig at China which has often devalued the yuan to deal with global economic turmoil.
"We have never tried to gain in trade at the expense of our partners. We do not follow 'beggar thy neighbour' macroeconomic policies. We have never undervalued our exchange rate (in this manner)," said Modi, addressing a conference on Advancing Asia, co-hosted by the International Monetary Fund (IMF) and India.
China has been devaluing yuan to gain export competitiveness in the times of global weakness. China's central bank had devalued the yuan by 0.51 per cent to 6.56 per cent against the dollar last month, the lowest since March 2011.
Meanwhile, IMF MD Christine Lagarde said Beijing should improve credit allocation to rebalance the economy away from debt-fuelled investment.
Zhongxia Jin, executive director for China at IMF, said, "In my observation, China has the ability to devalue yuan completely… But I don't expect very dramatic depreciation of the yuan."
Last year, the Washington-based multilateral agency had included renminbi into the special drawing rights (SDR) basket.
In Beijing, Zhou Xiaochuan, Governor of the People's Bank of China (PBOC), said the new growth target of 6.5-7 per cent can be attained by improving domestic demand, consumption and innovation without resorting to special measures like devaluation of currency.
Modi said India adds to world and Asian demand by running current account deficits. "We are therefore good Asian and good global economic citizens, and a source of demand to our trading partners."
Although Asia has slowed down, it is still growing at a rate three times greater than that of the advanced countries. "It is, therefore, the ray of hope for global economic recovery," Modi added.
Before India made its currency freely convertible for trading (not for investment purposes) in 1993-94, it had devalued the rupee by 18-19 per cent in 1991 due to the balance of payments crisis.
Emphasising on the need for continuous reforms of global institutions, Modi said the IMF impending quota reforms will give more say to countries like India.
On Friday, Finance Minister Arun Jaitley moved the Supplementary Demand for Grants in the Parliament seeking a grant of Rs 69,575.47 crore towards the subscription to IMF for an increase in the quota.
On Saturday, Shaktikanta Das, economic affairs secretary, explained at a separate function that this would not affect the Centre's fiscal deficit since it was planned earlier.
On the domestic economy, Modi said India was a haven of macroeconomic stability and a beacon of hope, dynamism and opportunity amid global problems and has dispelled the myth that democracy and rapid economic growth cannot go together. Listing achievements in macroeconomic stability, he said there has been a durable reduction in inflation, steady fiscal consolidation, a comfortable balance of payments position and build-up of foreign exchange reserves.
Modi also reassured investors that his government remained committed to keeping price growth under control after pledging to double farmer incomes in a budget presentation last month. The focus on rural areas that are home to 70 percent of India's population comes as Modi faces several key state elections that could affect his economic agenda.
