In this Tuesday, May 29, 2012 photo, an Indian woman carries paddy in a basket at village Digaru Mukh, near Gauhati, India. India plans to export up to 7 million tons of rice this year and a similar amount in the next fiscal year, according to government figures. (AP Photo/Anupam Nath)
After a storm-tossed six months for the economy, India's authorities are trying to get things back on an even keel. On June 25 the Reserve Bank of India announced measures to try to stabilize the rupee. It has lost a fifth of its value against the dollar in the past year, reflecting global woes but also a slowdown in India and a drying up of capital inflows. Its decline is widely seen in India as a bad thing, stoking inflation and hurting firms with foreign-currency debt.
India has long shied away from letting fickle foreigners buy government bonds, but the Reserve Bank last week loosened the rules to tempt sovereign-wealth funds and other long-term investors. It also slightly eased restrictions on Indian manufacturing and infrastructure firms seeking funds abroad.
Ikea, the Swedish furniture chain, boosted morale by saying it would invest up to $1.9 billion in India. Coca-Cola followed suit with the announcement of an additional $3 billion in investment, taking the total earmarked for India by 2020 to $5 billion. A ratings agency proved oddly helpful, too: on June 25 Moody's signaled that it would not follow Standard & Poor's and Fitch, which have warned of a possible downgrade of India to junk status.
The impact of all this? Not much. The rupee is still near record lows. Yet there is a feeling that a bleak picture may be improving slightly, mainly thanks to a government reshuffle. Pranab Mukherjee, the finance minister, left his position on June 26 to contest the largely ceremonial post of the presidency. Responsibility for the Finance Ministry, for a time at least, has passed to Manmohan Singh, the 79-year-old prime minister.
At the end of his career, the hope is that Singh makes a stand and rams through budget cuts and vital changes on tax and foreign investment. "It could make a difference," says an official. "He has a lot of credibility. It is an area that is close to his heart and his reputation will be much more on the line."
His party, Congress, which leads the ruling coalition and is run by Sonia Gandhi, its hereditary chief, is lukewarm about making tough decisions. But there are signs that it may have successfully wooed one or two smaller parties outside its present coalition, which may help it push tricky changes through parliament.
The promise of a push on reforms has been made -- and broken -- consistently by the government for years. With a busy electoral timetable up to general elections in 2014, it may be harder to fulfill than ever.
Still, others, stepping back from the hurly-burly, can see a silver lining in India's great wobble, particularly the fall in the currency. T.C.A. Ranganathan, the chairman of Exim Bank of India, which finances trade, reckons that a weaker rupee will help spur a long-awaited boom in manufacturing.
Perhaps, in time, that may prove more important than today's firefighting.