The warning did not arrive with panic buttons or emergency decrees. It came softly, wrapped in the language of sacrifice, patriotism, and restraint.“Use less fuel. Work from home when possible. Avoid unnecessary foreign travel. Postpone buying gold for a year.”When Prime Minister Narendra Modi addressed the nation with this extraordinary appeal, it immediately triggered alarm across political and economic circles. Governments do not ask citizens to cut consumption unless they know turbulence is already approaching.
The Timing of Modi’s Appeal
Behind the carefully calibrated words lay something far more unsettling: the possibility that India’s economic crisis had begun long before missiles flew across West Asia – and that the war merely exposed vulnerabilities the Modi government had spent years concealing beneath aggressive publicity and nationalist messaging.The timing of Modi’s appeal raised immediate suspicion. The message came only after the latest round of assembly elections and at a moment when India’s economic indicators were already flashing danger.
The rupee collapsed to a historic low of 95.7375 against the US dollar. Wholesale inflation surged to 8.3 percent. Foreign investors accelerated withdrawals from Indian markets. Crude oil prices spiked sharply after the US-Israel confrontation with Iran pushed West Asia toward a wider conflict.
Then came the statement that punctured the government’s carefully managed calm.Union petroleum minister Hardeep Singh Puri attempted to reassure the public by insisting there was ‘no shortage of fuel’ and ‘no issue with supply management’. But moments later, he inadvertently revealed the scale of the crisis.“If you look at the fact that my oil companies are losing, what, Rs 1,000 crore every day… in that context, how long can you keep it like this?” Puri admitted.That single sentence changed the national conversation.Suddenly Modi’s appeal no longer sounded precautionary. It sounded like preparation for economic pain the government knew it could no longer postpone.
Roots of the Crisis Far Deeper?
The Modi government has tried to frame the current distress as the unavoidable consequence of geopolitical instability in West Asia. But many economists, opposition leaders, and former bureaucrats argue that the roots of the crisis are far deeper, and overwhelmingly domestic.
Former Finance Secretary Subhash Chandra Garg delivered one of the sharpest indictments.“The government wants to blame the Iran war,” Garg said bluntly, “but the roots of this crisis are domestic. India’s economic vulnerabilities were created by flawed policy choices over many years.”His assessment cut through the official narrative with unusual clarity.
For nearly a decade, the Modi government projected the image of a fast-rising economic superpower powered by mega infrastructure projects, stock market gains, digitalisation campaigns, and relentless self-promotion. But beneath that image, structural weaknesses steadily deepened.
The informal economy weakened dramatically. MSMEs collapsed in large numbers. Employment generation slowed sharply. Rural consumption stagnated. Household savings eroded. Inequality widened to levels unseen in decades.Now, with external pressures intensifying, those unresolved weaknesses are surfacing all at once.The immediate trigger is energy insecurity as India imports 85 percent of energy.
Precarious Energy Position
India’s energy position has become precarious due to growing uncertainty over Russian oil imports. A key US sanctions waiver allowing India to continue purchasing discounted Russian crude was due to expire on May 16, with indications Washington may refuse an extension.If that happens, India risks losing access to one of its cheapest energy lifelines at precisely the worst possible moment.
At the same time, reports suggest India has already declined certain Russian LNG shipments because of fear of secondary American sanctions. Meanwhile, Washington continues exerting pressure on New Delhi during ongoing trade negotiations, including through Section 301 investigations into India’s trade practices.The result is a dangerous squeeze: rising oil prices, a weakening rupee, inflationary pressure, and shrinking policy space.But critics argue the real question is not why India is vulnerable today.
The real question is why India entered this global crisis so economically fragile in the first place.The answer, they argue, lies in a series of policy decisions that steadily hollowed out the country’s economic foundations while concentrating wealth and political power at the top.No two decisions symbolise this more than demonetisation and GST.
In November 2016, Modi abruptly withdrew 86% percent of India’s currency from circulation overnight. The government presented demonetisation as a historic strike against black money and corruption. In reality, it paralysed India’s vast cash-dependent informal economy.
Small traders, transporters, daily wage workers, labourers, farmers, artisans, and small manufacturers suffered devastating disruptions. Businesses shut down. Supply chains collapsed. Rural markets froze. Millions lost livelihoods.
Before the economy could recover, the government launched the Goods and Services Tax in 2017.GST was promoted as a transformational reform. But for India’s already weakened small and medium enterprises, its rollout became another shock. Complex filing systems, multiple tax slabs, delayed refunds, compliance burdens, and technical breakdowns pushed thousands of smaller businesses into distress.
Massive Publicity Campaigns
Together, demonetisation and GST inflicted deep damage on precisely those sectors that generated the largest share of employment in India.Yet instead of acknowledging the damage, the government doubled down on image management.Massive publicity campaigns portrayed India as an unstoppable economic success story while unemployment rose steadily, especially among educated youth.Today, those contradictions are becoming impossible to hide.
The backlash against Modi’s austerity appeal spread rapidly across social media.“Who made money when crude prices were low?” one industry executive wrote on X. “The government and oil companies. They should absorb the losses now.”
The anger resonated because ordinary Indians remember what happened over the past several years. Even when global crude prices remained relatively moderate, petrol and diesel prices inside India stayed stubbornly high.The government repeatedly increased excise duties on fuel, turning petroleum taxation into one of its biggest revenue sources.Citizens paid inflated prices while government revenues surged.Now, as oil prices rise globally, the same citizens are once again being asked to sacrifice.
Opposition Voices on the Contradiction
Opposition parties seized on the contradiction immediately.Congress president Mallikarjun Kharge launched a blistering attack on the government’s austerity narrative.“You lecture the country on austerity and sacrifice while snatching dignity from India’s elderly, widows, and persons with disabilities,” Kharge said.
He pointed out that old-age pensions had remained stagnant for twelve years despite relentless inflation.“After a 45% erosion in purchasing power, the ₹200 pension is effectively worth about ₹110 today,” Kharge said. “But this shameless government spends nearly ₹1.5 crore every single day on advertisements and self-promotion.”
According to Kharge, the Modi government spent nearly ₹5,987 crore on publicity campaigns between 2014 and 2025.The criticism hit a sensitive nerve because it exposed a growing perception that austerity applies only to common citizens, not to the state itself.
While Indians are being asked to avoid travel, consume less fuel, and postpone purchases, the government continues spending heavily on image-building, mega-events, branding exercises, and political spectacle.
Senior Congress leader Randeep Singh Surjewala attacked another controversial aspect of Modi’s message: the appeal to postpone buying gold jewellery.Economists may view lower gold imports as necessary during a foreign exchange crisis. But Surjewala argued the government’s advice could devastate millions of livelihoods.“Gold jewellery is not just a luxury in India,” he said. “It is a culture, tradition, and financial security for millions of women.”
More than 3.5 crore people depend on the jewellery sector, including artisans, goldsmiths, traders, transporters, and small businesses. More than 90% of the sector consists of MSMEs.Surjewala called the government’s advisory “an undeclared lockdown” on the jewellery industry.He also highlighted another contradiction.“Why is the government buying gold reserves while asking ordinary Indians not to buy gold?” he asked.
The CPI(M) sharpened the political attack further by directly linking the crisis to the Modi government’s foreign policy alignment with Washington and Tel Aviv.“The Prime Minister’s statement itself proves that all is not well with the economy,” CPI(M) leader M. A. Baby declared.
According to the CPI(M), the government delayed acknowledging economic stress until after elections to avoid political fallout.“The austerity appeal is not preventive advice,” the party argued. “It is preparation for harder economic measures ahead.”
Distress Visible in Everyday Life
Outside political circles, however, the distress is already visible in everyday life.MSMEs continue shutting down. Rural demand remains weak. Inflation steadily erodes purchasing power. Educated unemployment remains alarmingly high. Household debt is rising while savings shrink.
Farmers’ organisations have added their own fury to the national mood.The Samyukta Kisan Morcha accused the government of abandoning agriculture while favouring large corporate interests.“Farmers are paying today’s prices for diesel, fertilisers, pesticides, and labour,” the organisation said, “but are being compensated using outdated cost calculations.”
The SKM claimed farmers lost nearly ₹27 lakh crore between 2014 and 2024 because the government failed to implement MSP based on the promised C2+50 percent formula.Then came the most devastating allegation.“Farmer and labourer suicides have risen from 77 deaths per day in 2014 to 173 deaths per day in 2024,” the organisation said.Whether or not the government disputes those numbers, the political and social reality is unmistakable: economic insecurity has deepened across vast sections of Indian society.
Economic Inequality Widens Dramatically
Meanwhile, inequality has widened dramatically.Corporate profits have surged. Billionaire wealth has expanded. But wage growth remains stagnant for millions. Consumption demand remains weak because too much wealth is concentrated in too few hands.
Economists have repeatedly warned that an economy cannot sustain high growth if ordinary citizens lack purchasing power.That warning is now becoming visible in real time.
The government continues insisting the situation is “under control.”“There is no shortage,” Puri keeps repeating.But governments do not usually urge citizens to reduce fuel consumption, avoid foreign travel, and postpone gold purchases unless they anticipate deeper turbulence ahead.That is why Modi’s message generated such widespread unease.
For millions of Indians already struggling with inflation, unemployment, stagnant incomes, and rising living costs, the Prime Minister’s appeal sounded less like patriotic advice and more like an admission.An admission that the economic storm gathering over India did not begin with the West Asia war.It began years earlier – through policy shocks, shrinking jobs, weakened small businesses, rising inequality, and an economic model built more on headlines and optics than broad-based resilience.
The war merely exposed what had long been hidden beneath the surface.And for many Indians, the greatest fear now is that the hardest days may still lie ahead.