New Delhi, May 13:
Prime Minister Narendra Modi has triggered fresh debate over the state of the Indian economy after urging citizens to postpone gold purchases and foreign travel, cut fuel consumption, and prefer domestic products. The appeal comes as rising crude oil prices, a weakening rupee, and inflationary pressures intensify concerns about India’s economic outlook.
The Prime Minister’s remarks rattled Dalal Street, with investors interpreting the message as a sign that the government is bracing for a prolonged economic strain. Over the last two trading sessions, the Sensex plunged nearly 3,000 points and the Nifty fell more than 800 points, wiping out over ₹16 lakh crore in investor wealth. Shares of consumer goods, travel, and jewellery companies were among the biggest losers.
The crisis has been aggravated by escalating tensions in West Asia, which pushed Brent crude above $100 a barrel. As India imports more than 85% of its crude oil needs, the surge threatens to inflate the import bill and widen the current account deficit. Analysts warn that retail fuel prices may soon be revised upward, adding further pressure on households and businesses.
The Indian rupee also hit a record low of 95.68 against the US dollar, making imports of gold, edible oils, and fertilizers significantly more expensive. India depends heavily on overseas supplies for these essential commodities, and the combined impact of a weaker currency and global price spikes is likely to push inflation higher in the coming months.
Economists say Modi’s conservation message may provide temporary relief by reducing demand for imports, but it also risks dampening consumer spending at a time when growth remains fragile. If crude prices stay elevated for an extended period, India’s GDP growth could slip below 6%, while higher inflation and possible interest rate hikes may further slow the economy.
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