The downfall of the Indian rupee’s woes, for the first time, hit an all-time low with respect to the US dollar. And so, severe questions of India’s economic well-being arise with it. Its decline in terms of the dollar has further intensified with worse performances from this Asian currency end. The crisis has highlighted the claims by Prime Minister Narendra Modi in his pre-election speeches. When he sternly condemned the government regarding the rupee weakening.
Let us now examine the currency crisis that has occurred and remember some of Modi’s key remarks, which seem even more relevant today.
Rupee’s Woes The Present Crisis: Rupee Reaches All-Time Low
On Thursday, the Indian rupee hit a new all-time low of 85.27 against the US dollar as it depreciated for the third session running. The rupee opened weak at 85.23, touching the lowest-ever level of 85.28 during intraday trading. This was its biggest fall from earlier in the week when it had dipped to 85.15, continuing a downward trend. This drop is concerning not only for the currency’s value but also for the country’s overall economic outlook.
The rupee’s slide has raised concerns among economists as a weakening currency can increase import costs and fuel inflation, thus affecting economic stability. In recent years, there has been a general concurrence that the Indian rupee is the weakest currency in Asia. This is what has brought forth various criticisms and reflections on the previous statements made by Narendra Modi before he became the PM.
Rupee’s Woes: Criticisms made by Narendra Modi before the PM position
In the years preceding his tenure as Prime Minister, Modi was vocal about the government’s handling of the economy, especially the falling rupee. Here are six quotes from Modi that show his concerns and accusations about the falling value of the rupee:
1. ‘Under this government, the rupee kept falling.’
During a rally in Hubli, Karnataka, on February 28, 2014, Modi criticized the then-central government for allowing the rupee to weaken. He compared the value of the rupee under Atal Bihari Vajpayee’s government (at 40-45 per dollar) with its decline under the Congress-led government. Modi argued that under the Congress government, the rupee fell to alarming levels (62, 65, and 70) due to the increasing imports and decreasing exports. His criticism was against the government for failing to balance the foreign trade of the country.
2. ‘Rupee is in hospital, admitted to ICU’
In 2013, Modi famously declared that the rupee was in the ICU, making a direct comparison with the state of the country’s economy. He pointed to the rising prices of fuel, including petrol, gas, and diesel, as a sign of the government’s failure to manage inflation. Modi’s rhetoric suggested that the government had lost control of the situation and was incapable of fixing the ailing currency.
3. ‘Once the rupee keeps falling, world powers take advantage.’
According to Modi, the international community will take advantage of India’s weak rupee. When the rupee continued falling, according to him. The situation would be exploited to suit the interests of the powerful nations. The government would not take serious measures to prevent the falling of the rupee while concentrating efforts on saving their political situation.
4. ‘Competition between government and rupee, whose value is falling faster.’
At present, he expressed grave anxiety that the center appears to compete against the rupee to ascertain whose values are going down further. He states, for example, that at the time when India achieved Independence, the rupee held its value of 1 per dollar. Comparing these with the price value rupees at the time when his time was held under prime-minister Atal Bihari Vajpayee were between 42-44 whereas Modi stated, as now it is depreciated day by day at this critical point.
5. ‘Rupee losing strength because those sitting in Delhi are busy in corruption.’
On July 14, 2013, Modi directly targeted the ruling government for weakening the rupee. Modi said the rupee is losing its strength because the people in Delhi are engaged in corruption. Modi was hinting at the fact that the Delhi leadership was too busy looking after their interests rather than focusing on the economic problem that was unfolding.
The Way Forward: Is There Hope for the Rupee?
The current crisis calls for urgent intervention to restore confidence in the rupee. While the Modi government’s focus on the economy through various reforms and initiatives like “Make in India” and “Digital India” has been praised, critics argue that the weak currency is an indication of underlying structural issues in the economy. Analysts believe that measures to control inflation, improve exports, and stabilize foreign exchange reserves can strengthen the rupee.
FAQs
1. Why is the Indian Rupee’s Woesdeclining?
The rupee is declining because of several reasons, including high import costs, high inflation, and fewer exports. The factors affecting the Indian rupee on the global level are that the US dollar has a strong stand.
2. What was Narendra Modi talking about rupee when he was in Opposition?
Before becoming prime minister, he criticized the government. At that time for the improper management of the economy and, most importantly, the falling rupee. He also utilized phrases such as “the rupee is in ICU” to emphasize how critical the situation was becoming.
3. How is an economy affected by Rupee’s Woes?
A falling rupee can increase the cost of imports, thereby increasing inflation. It can also make foreign debt costlier and reduce investor confidence, which may slow down economic growth.
4. What are the solutions to strengthen the rupee?
To strengthen the rupee, India needs to focus on improving exports. Reducing its trade deficit, and maintaining robust foreign exchange reserves. Inflation control and strategic foreign investments can also play a role.
5. What steps has the Modi government taken to handle the weakness of the rupee?
Since his assumption of office, the Modi government has implemented some economic reforms like the GST and manufacturing boosting initiatives. The issues of global inflation and trade imbalances continue to influence the rupee’s value.
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