It's budget time in India and everyone has a ask of the Indian Finance Minister P. Chidambaram. I have decided to join the crowd with my ask, albeit last minute..
Let the Indian Rupee Go.. Take steps now to make INR fully convertible in a time bound fashion (say 3 years).
Indian rupee is now mature enough to take the vagaries of currency fluctuation on its own and doesn't need any governmental protection. Indian foreign exchange reserves have come a long way since 1992 and the country now has over USD 140 billion, enough for 12 - 14 months imports. How much of reserves is enough? At some point, these reserves will become a burden in itself and that day may not be far off.
So, Mr. Chidambaram, Let the rupee go.. I will be watching for it in your budget today....