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Redefining Barter System for Sustainable Economic Development: Prospects & Challenges

  • Unique Paper ID: 172347
  • Volume: 2
  • Issue: 12
  • PageNo: 469-477
  • Abstract:
  • The recent fall in the rupee was mainly due to conditions in the euro zone, plunging stock markets, falling foreign investment inflows, rising fiscal deficit and untamable inflation and strengthening of the dollar. As India runs a large current account deficit, it needs a constant inflow of dollars, which is not there. High oil prices inflated the import bill and resulted in further widening of the current account deficit, which accelerated the rupee fall. Just by closing some petrol bunks, India cannot control the oil imports. There should be a solution to this problem that will lead to sustainable economic growth of the country. Before governments and currencies, trade was done through the barter system- the exchange of goods. Introduction of currencies enabled a common denominator by which goods could be more easily valued, thus currencies became the medium of exchange. The US Dollar is currently the world reserve currency. But as countries across the world find it difficult to accommodate certain US demands and are barred from using its financial system, they have to find out a medium of exchange- be it their respective national currencies or commodities (barter trade). Essentially what this does is that it takes the US Dollar away from being the sole medium of international exchange and instead, two countries can trade on one national currency and the nation receiving the currency can use the same for purchasing goods from the other country. If practiced in India, this would enhance the rupee value and bring it back to its original position. And even though the India-Iran deal may just be a small step, it also gives us a peek into the future- a future where countries can engage in free trade without its interests being held hostage by the demands of any country. India is grappling with a current account deficit (CAD) exerting tremendous pressure on the rupee. Controlling imports and reducing the trade balance is one of the key strategies for reining in the CAD. The present paper highlights on the prospects of indigenous trade system i.e, barter system for sustainable economic growth of our country.
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Cite This Article

  • ISSN: 2349-6002
  • Volume: 2
  • Issue: 12
  • PageNo: 469-477

Redefining Barter System for Sustainable Economic Development: Prospects & Challenges

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Impact Factor
8.01 (Year 2024)
UGC Approved
Journal no 47859

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