Tradeoff between INR and Indian stock index

There is tradeoff happening between INR (Indian Rupee) and Indian stock index Nifty50 since last year.

✒️There is tradeoff happening between INR (Indian Rupee) and Indian stock index Nifty50 since last year. INR has depreciated by 10.7% against USD on YoY basis as against only 6.5% decline in Nifty 50. Ideally it should be more or less equal but then someone will argue that inflation is still around 4.5% and growth still continues to record around 7.5%.
 
✒️Let me clarify my arguments against this inflation and growth growing in tandem. Real inflation should have been more than 7% instead of projected 5% if higher energy prices and overall increase in logistics and manufacturing costs are passed onto the consumers and taken into account. But government is keeping energy costs suppressed by giving higher subsidies which is reflected in increasing fiscal deficit and sharp depreciation of INR.
 
✒️In fact, I believe that government is managing Consumer price index (CPI) to report lower than actual inflation by changing the items and components included in CPI calculation. This is giving RBI (Reserve Bank of India) the reason to keep interest rates lower and as such stock index remains range bound instead of sharp decline.
 
✒️Another manipulation being undertaken is the management of stock index by removing laggard and real economy companies from the index and replacing them with the new age IT and financial technology companies which provides artificial higher bottom to Nifty50 and prevents it from sharp correction.
 
So even if India’s nominal GDP growth rate (Real GDP growth rate+ inflation) continues to show 12% with higher Real GDP growth rate and lower inflation but in actual it is reverse with lower GDP growth rate and higher inflation. This is the main reason for INR depreciation as all the manipulation would be reflected in the currency exchange rate of a country.