Falling value of Rupee and the silence of once vocal Bollywood celebrities.
Let's look back what Bollywood celebrities and Narendra Modi said about dollar - rupee value before 2014.
The rupee value against dollar continues to fall quite steeply and the Union Government is under constant criticism from the Opposition for failing to arrest the fall of rupee. The rupee had fallen by almost 10% from the start of the calendar year and by nearly 30% ever since Narendra Modi had come to power. In the 2014 election manifesto, the BJP had promised that the issue of falling value of the rupee would be addressed if BJP is elected to power. Its exact words from the 2014 election manifesto are as given below:
“The Congress party has not only lowered the dignity of the Government, but also the dignity of India. This is what is driving recent adversities like the falling rupee and countries riding roughshod over us. The BJP will work for restoring the trust and credibility of the Government.”
“In recent years, the Indian Rupee has seen a free fall like never before. This is basically the result of policy and decision paralysis of the UPA Government. Decisions are simply not taken. And if they are taken, they turn into scandals. All this has destroyed the reputation of our economy. To reverse this process, the first thing, which is required, is to restore confidence in the integrity of the decision-making and sanctity of our decisions.”
The falling value of rupee against dollar, which was given big importance in the 2014 election manifesto of the BJP, did not feature at all in its 2019 election manifesto. Number of times the word ‘rupee’ appeared in BJP’s 2019 election manifesto comes to a grand total of “ZERO”. The value of dollar in rupees was hovering around the Rs.70 mark which is significantly higher than the day Narendra Modi was sworn in Rs.58.43. The inability to arrest the falling value of rupee with the power in hand might have caused an embarrassment in the BJP camp which led them to avoid any mention of rupee in their 2019 election manifesto. The ‘embarrassment’ will be more pronounced if we consider Narendra Modi’s tantrums about the dollar before BJP was elected to power. On 4th July 2013, Narendra Modi’s twitter handle was updated with a tweet, “Rupee is not losing strength because its size has changed. It is because those sitting in Delhi are busy in corruption: Modi ji.”
Since the rupee has fallen by almost 30% since Modi had come to power in Delhi, Narendra Modi has not clarified if the same analogy can be used now too. Below are some highlights of Modi’s tweet frenzy regarding dollar before being elected to power.
More than Narendra Modi, Hindi Cinema (Bollywood) celebrities were enthusiastic in their criticism of the then UPA-II government led by the Congress party for the value of rupee against dollar. Some noted Hindi Cinema celebrities such as Amitabh Bachchan, Anupam Kher, Vivek Ranjan Agnihotri, Juhi Chawla, Shilpa Shetty Kundra, Sudhir Chaudhary have tweeted on Rupee-Dollar value before 2014 elections and made several jokes about it but have gone quiet ever since.
Similarly, almost all celebrities who very vocal before May 2014, have become silent or have been silenced since then. Writer Chetan Bhagat tweeted, “Rupee at 60. It is mayhem. Close to an economic crisis. But well, the government is silent.” Hindu spiritual leader and the founder of the ‘Art of Living Foundation’ Sri Sri Ravi Shankar had tweeted, “It is refreshing to know that the rupee will get stronger at Rs.40/- per dollar if Modi comes to power.” Modi has been in power for over 8 years now and the current value of 1 dollar is Rs.82.32 as I write this article.
Narendra Modi is known for his rhetorical oratory but when it comes to responding to specific issues which are complex in nature; his responses have been lackluster at best. Modi’s response to a criticism about demonetization was, “Worlds’ economists don’t know parameters to assess it. What India did will be a case study for economists worldwide.”
The de facto Head of the country’s has never held a single press conference in his almost 9-year rule and that fact is not likely to change even by the end of his second term. However, the country’s Finance Minister Nirmala Sitharaman does attend press conferences but her response to falling rupee was even more outlandish. Nirmala Sitharaman argued that the rupee has not collapsed but it’s finding its own natural course. But the dwindling Forex Reserves contradict the Finance Minister’s statement as the Forex Reserves which once stood close to $640 billion are used to ensure rupee’s value to do crash. Currently, the Forex reserves stand at around $540 billion. Almost $100 billion dollars of forex reserves has been lost in just 1 year, most of which had been sold to ensure the rupee value does not crash. There is nothing natural or organic about this act of selling dollars in the market by the Government as claimed by the Finance Minister.
The fall in rupee or rather the rise of dollar has been due to a combination of reasons both economic and political. The ongoing war in Ukraine and the rise of Federal Funds rates by the US and the market reaction to these two events are the major contributors for a strong dollar in addition to the trade deficit incurred by imports being more than exports. The Federal Reserve is expected to further increase from the current 3.08% to around 4% to 5% in the coming months which would further lead to more demand for dollars in the market and subsequently weakening the rupee. The Indian Government has not put out a road map yet for handling the value of rupee against dollar and other foreign currencies which would help set the expectation for the market and the citizens on rupee’s value. Narendra Modi was once very passionate about rupee’s value, but that passion is nowhere to be seen ever since he took office. The usual rhetoric from Narendra Modi or his radio program ‘Mann ki Baat’ has not addressed India’s falling value or the difficulties Indian Economy is facing due to the geo-political reasons.