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Examine the impact of various economic factors on the rupee’s value. Highlights the importance of a stable and adequately valued rupee for a country’s economic growth and stability.

Topic: Indian Economy and issues relating to planning, mobilization, of resources, growth, development and employment.

5. Examine the impact of various economic factors on the rupee’s value. Highlights the importance of a stable and adequately valued rupee for a country’s economic growth and stability. (250 words)

Difficulty level: Tough

Reference: Indian Express

Why the question:

The article titled “The Fundamental Value of the Rupee” explores the factors influencing the value of the Indian rupee in the global market and the significance of maintaining its fundamental value.

Key Demand of the question:

To write about the implications of various economic factors and importance of stable rupee.

Directive word: 

Examine – When asked to ‘Examine’, we must investigate the topic (content words) in detail, inspect it, investigate it and establish the key facts and issues related to the topic in question. While doing so we should explain why these facts and issues are important and their implications.

Structure of the answer:

Introduction: 

Begin by giving context.

Body:

In the first part, write about the factors affecting the value of rupee – inflation, interest rates, fiscal policies, and global economic trends. Next, write about the policy measures needed to ensure the fundamental value of the rupee.

Next, Implications of an adequately valued rupee – boost to exports and import substitution, Attraction of foreign investment and reduced inflationary pressures etc.

Conclusion:

Conclude by summarising.