It is a happy coincidence that Udayakumar, the designer of a globally identifiable symbol for the Indian Rupee, comes from ‘Dravidian’ Tamil Nadu. His choice of a Devanagiri script base for the symbol is a reflection of the mood and attitude of contemporary Tamil youth, who have no hate lost for anything ‘North Indian’ or ‘Aryan’ – unlike their preceding generation.
Yet, the Indian Rupee symbol will remain symbolic, and no more. Though Indian economy has gained global presence and acceptance in the post-reforms era, and India also escaped much of the downfall that accompanied the global recession of the past years, that has not automatically translated into a strengthening rupee, to begin with. Worse still, after gaining substantial strength against the US dollar – which still remains the dominant monetary tool in the employ of the global community – and the euro, the alternate that the continent may have devised even if only for a limited purpose of internal transactions, the Rupee tumbled to the traditional, post-reforms, post-devaluation position. Or, it was allowed to return where it had belonged.
For a currency symbol to gain wide acceptance, it has to be in constant use in the global market. Apart from Governments, central banks and monetary exchanges the world over, the common man on the streets of a few countries should come to use the symbol and the currency that it represents and that it backs. The dollar took the first route through Brentonwood while the euro deployed the latter, owing mainly to historic circumstances. The rupee has not acquired that status, as yet. Unless that happens, the new symbol will remain nothing more than that – unable to transform the computer and mobile phone key-boards nearer home and unsure of its presence and role as a currency on the global platform.
Indians working overseas, particularly outside the western hemisphere, transfer funds to India on a monthly basis. Those in the US and Europe too do so in bulk at periodic intervals, though not as much as they can but as much as they want to. They all need to use either the US dollar, euro or pound-sterling as the exchange medium if they have to send money back home, unless they are earned in the countries where those currencies are in currency.
Neighbourhood nationals travelling to India on trade and travel, education and employment, healthcare and recreation all have to buy Indian rupee. This is true of Indian nationals travelling to neighbourhood countries or even those in the Gulf and elswhere, where they have business. They still need to use an exchange medium such as dollar or euro. Countries where tourists or businessmen from specific foreign destinations flock for specific reasons, their own currencies have local validity in the exchange market.
Against this, the Indian rupee is non-existent as for as official and not-so-official channels in forex business outside of the country. For undertaking less than a hour air-travel to or from India, South Asian nationals lose their hard-earned money in the forex counter twice – one, on departure and the other on arrival at their destination. The less said about the Gulf-Indian’s plight, the better. In all these countries, unlike the West, more Indians are engaged as labourers with a low-pay. It is so with neighbourhood nationals visiting or working in India. It is here India and the Indian rupee can begin, but begin it has to if the new symbol has to add value to itself and the nation.
SAARC as a regional mechanism has often talked about a common regional currency. The East Asian economic crisis dampened the thoughts in the Nineties. Today, the euro crisis should serve notice on SAARC for not risking the course without further examination. It is possible that the proposal may not take off in the near future. If nothing else, given the high sensitivities in the Indian neighbourhood, a level-playing economic and monetary field among South Asian nations may be a political requirement before SAARC could consider anything close to a common currency.
The alternative would be for India and neighbourhood nations to accept each other’s currency at the local forex markets. If it sounds complicated and impractical in a globalised economy and forex environment, central banks in South Asian countries could devise a regional mechanism for State-run bank branches to operate counters for direct exchange from one currency to another currency. Here again, inter-currency valuation could prove to be a tricky affair for starters, and politically sensitive otherwise.
For any forex programme in which the Indian rupee has to becomes recognisable and identifiable by the symbol, the Indian rupee has to acquire the muscle which is substantiated by the robust nature of the nation’s economy, but that alone would not be enough. The Indian rupee has to become a stand-alone economic entity, like the dollar. If related to the poor performance of the American economy over the past years, the dollar should have tumbled. It did not. Like the dollar, yen, euro and the rest, the Indian rupee has to become a habit. The symbol would gain currency once, and only after the currency itself had gained global/regional currency.
It all would entail an element of India having to take on the US dollar, not in monetary or exchange terms but in political terms. If India were unable to break into the global monetary market and has to start off at a low-profile regional start-up, it necessarily has to cut out the dollar as the exchange medium. That is saying a lot in terms of the power of the Indian rupee to upset the dollar-reference in the exchange market in all nations where Indians work and the Indian rupee has relevance as a transferable commodity back home.
Unless India has that kind of a political will that would entail New Delhi having to take hard political decisions, now or later, there is no meaning in devising a symbol for the Indian rupee, with the sole aim of marketing it world-wide and making it recognisable for that very purpose. You cannot put the cart before the horse. Having put it now, even if symbolically though not yet officially, New Delhi may need to consider ways to take the horse to where it should belong, if it together with the cart, it has to be a driving force.
(The author is a Senior Fellow at Observer Research Foundation)
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