Let the Rupee rise. With Indian Stock market at historical highs. The market capitalization of Indian companies is being used to buy valuable assets abroad for use by the large Indian MNCs. However Indian individual investors are still hobbled by the retrograde decisions of the government. The lack of overall liberalization and liberalization of enclaves(SEZs) created by ignoring property rights of land owners, and lack of modernization of city zoning laws and corrupt and non-transparent regulation of realty markets is causing all the fuzz money to raising the rents and land prices.

60-70% of India still lives in rural areas lacking access to sewerage and clean drinking water supply from municipalities. A large proportion of the urban poor also do not have access to municipal sewerage and water supply systems designed only for house owners causing riverine pollution. There is a lot that the government can do instead of wasting Rupees in buying and holding onto USD.

The government must let the individual investors move the currency both ways instead of creating an artificial one way flow of dollars into the economy and then despairing and hand wringing on the imbalance the flows are causing because its hurting exports. The indian individual investor doesn't crave for toys and consumer goods to use the dollars, it craves for the world class financial products not merely mutual funds that invest into overheated equity markets or the now largely in-accessible realty market. The small guys should have the freedom to rise from the bottom of the heap. The indian government has a propensity to favor big business over small guys, this can kill innovation by taxation and heavy-handed regulation.