General Knowledge - Indian Economy - Discussion

Only IT companies will get benefit by devaluation, whereas other sectors will not, so how come it is profitable for a country?

As we are top importers of petrol and gold.

Devaluation makes exports cheaper and imports costlier. It means the export value of a product decreases but it is good for economy because exports increases. So we would be even more beneficial if the export value remain constant rather than depreciating.

Devaluation is nothing but reducing in the value of current money this is taken to discourage imports and increase exports. For ex devaluation gives two sides benefits it helps to make profit and discourage imports for ex if the value of rupee is 50 after devaluation it decrease to 45 then to purchase the goods we need spend more money because the value of money is more in other country so it tries to reduce its imports to have control on the outflow of the domestic money.

I am not in agreement with above mentioned example @Pankaj. Here we are talking about devaluation means we can take live example of rupee depreciation.

So for example suppose if month before we sold any goods for rupee 55 means we received one dollar against this however after depreciation of Indian rupee if we sell the same and get 1 dollar again(today 1$ =62 rupee) we are making profit of rupee 7. Answer b is right hope I am clear to all.

Central government has devaluation of Indian currency in 1948, 1966 and 1991 The main reason is to increase export of goods.

Suppose you export a good in 500 rupees a month before and suppose cost of export be constant, then if the price was 50 against a dollar and if devaluation occurs and price reduced to 40 against 1 dollar than than you export same good in 400 rupees against same amount in dollar.

Devaluation means price of rupees reduced it must help when export increase. This means that other countries will purchase more and more commodity and this will automatically tend to increase in economy.

Devaluation means price of rupees reduced in comparison of other currency it is beneficial when export increased.

By devaluation we can sell our product at lower prices as comparetive to other countries but supose if the prices of exports don't remain constant and they rise then there is no profit of doing devaluation because your product is still of a high cost due to prices not remain constant.

For example. If value of rupee is devaluated against dollar, then in the angle of american importers the price of goods will be increased. Right? I m not sure about my view. Some one help me out. How comes price of export remains constant?