• Dr. Anup Kumar Srivastava

In every democracy, governments are judged not merely by the speeches they deliver, but by the economic realities citizens experience. Inflation does not disappear because it is denied in press conferences. Currency depreciation cannot be hidden behind slogans. Unemployment figures do not improve through televised optimism. Eventually, every political narrative collides with economic arithmetic.

India today stands at precisely such a moment.

The common citizen is facing a convergence of pressures: soaring fuel prices, a weakening rupee, widening current account stress, stagnant real incomes, and rising uncertainty in the global economy. Yet, instead of structural policy correction, the response of the present government often appears centered around perception management, emotional messaging, and appeals for “cooperation” from citizens. The burden of adjustment is subtly transferred from institutions to individuals.

While political communication is an essential aspect of governance, communication cannot substitute governance itself. A nation of 1.4 billion people cannot be administered solely through narratives, symbolism, and event management. Economic crises demand institutional seriousness, policy consistency, and long-term structural vision.

The Fuel Price Spiral and the Politics of Revenue

One of the clearest indicators of policy failure is the persistently high fuel prices faced by Indian consumers over the past several years. Governments often defend rising fuel costs by citing global crude oil prices or geopolitical tensions. While international markets undoubtedly influence domestic pricing, the larger issue lies in the state’s excessive dependence on fuel taxation as a revenue-generating mechanism.

Excise duties and indirect taxes on petrol and diesel became convenient fiscal instruments. Instead of broadening the productive tax base through manufacturing growth, employment generation, and higher incomes, the easier route was chosen: taxing consumption.

A useful historical comparison may be drawn with the policy responses adopted during the tenure of former Prime Minister Manmohan Singh, particularly during periods of global crude oil volatility between 2008 and 2013. Despite severe international pressures triggered by the global financial crisis and rising energy prices, the government at the time attempted to cushion domestic consumers through calibrated subsidies, phased pricing reforms, and expansion of social protection mechanisms rather than transferring the entire burden directly onto households. Critics rightly debated the fiscal sustainability of some subsidy measures; however, the broader policy orientation acknowledged that uncontrolled fuel inflation carries cascading consequences for transportation, food supply chains, agriculture, and small-scale enterprise activity. The objective was not merely macroeconomic stabilization on paper, but preservation of purchasing power among vulnerable and middle-income populations.

Equally important was the simultaneous emphasis on long-term energy diversification. During that period, India accelerated investments in renewable energy discussions, civil nuclear cooperation, and energy security partnerships aimed at gradually reducing excessive dependence on imported fossil fuels. While those initiatives were still evolving, they reflected recognition that energy vulnerability is not only an economic issue but also a strategic and developmental concern.

In contrast, contemporary policy responses often appear more revenue-centric than reform-centric. Excessive dependence on indirect fuel taxation may temporarily strengthen fiscal collections, yet it weakens household consumption and deepens inflationary pressures across sectors. Sustainable economic governance requires balancing fiscal discipline with social resilience.

This approach has multiple consequences.

First, fuel inflation affects every sector simultaneously. Transportation costs rise, logistics become expensive, food prices increase, and production chains face pressure. The poor and middle class suffer disproportionately because energy expenditure forms a larger share of their household budgets.

Second, high fuel prices suppress consumption demand. When households spend more on essentials, discretionary spending declines. Small businesses, retail markets, and local economic ecosystems weaken gradually.

Third, such a taxation strategy reflects short-term fiscal thinking rather than developmental economics. A government unable to generate sustainable growth often turns toward indirect taxation because it is politically easier and administratively efficient.

Ironically, despite collecting record tax revenues through fuel, citizens continue facing underfunded public infrastructure, rising education costs, and healthcare burdens. The state extracts more but delivers proportionately less.

The Weakening Rupee: A Symptom, Not an Event

The depreciation of the Indian rupee is frequently described as a global phenomenon driven by a strong dollar. While that explanation is partially valid, it conceals deeper structural vulnerabilities within the Indian economy.

Currencies weaken not only because of external factors but also because of investor confidence, productivity growth, export competitiveness, and macroeconomic credibility. A resilient economy absorbs global shocks better than a fragile one.

India’s dependence on imports—particularly energy imports—creates persistent pressure on the rupee. At the same time, export growth remains inconsistent and heavily concentrated in limited sectors. Manufacturing ambitions continue to be discussed more enthusiastically than implemented effectively.

Programs such as ‘Make in India’ generated significant political branding but produced mixed structural outcomes. Manufacturing’s contribution to GDP has not transformed at the pace promised. Employment-intensive industrialization remains inadequate. Supply chain competitiveness still lags behind several Asian economies.

As a result, India imports aggressively while struggling to export at equivalent scale. This imbalance widens the current account deficit and places pressure on foreign exchange reserves and the rupee.

A weakening currency further increases imported inflation. Crude oil becomes costlier, electronic imports rise in price, industrial inputs become expensive, and inflationary pressures spread across the economy.

Ordinary citizens may not follow currency markets closely, but they experience the consequences daily through rising prices and declining purchasing power. It is also important to remember that earlier administrations confronted global economic turbulence under considerably adverse international circumstances. During the aftermath of the 2008 global financial crisis, the Indian economy faced capital outflows, inflationary pressures, and slowing global demand. Yet policy discourse during that period remained centered around institutional coordination between the Reserve Bank of India, fiscal authorities, export promotion mechanisms, and social welfare protections.

Under Manmohan Singh, economic management was often criticized for caution and gradualism, but that gradualism also reflected a preference for institutional consultation over abrupt economic experimentation. Infrastructure expansion, banking sector support, rural demand stimulation, and energy sector reforms were pursued simultaneously to preserve macroeconomic confidence. The present challenge is not merely currency depreciation itself, but the absence of sufficiently deep structural correction accompanying political messaging. Strong economies are not sustained through perception management alone; they require export competitiveness, technological modernization, industrial employment growth, and stable policy signaling.

The Current Account Deficit and Structural Fragility

The current account deficit (CAD) is not merely an academic economic indicator. It reflects whether a country earns enough from exports and external inflows to finance its imports and obligations. A recurring weakness in India’s economic architecture has been excessive dependence on imported energy resources. Previous governments, including that led by Manmohan Singh, recognized this vulnerability and increasingly explored diversification strategies involving renewable energy expansion, civil nuclear agreements, and international energy partnerships. Although implementation remained uneven, the strategic direction acknowledged that long-term economic sovereignty requires reduced dependence on volatile fossil fuel markets. Today, that lesson remains equally relevant. A durable solution to external imbalance cannot emerge solely from temporary fiscal measures or political messaging. It requires sustained investment in green energy infrastructure, public transportation systems, domestic manufacturing competitiveness, and scientific innovation capable of reducing structural import dependence over time. India’s widening CAD indicates a structural imbalance between domestic production capacity and external dependence.

Several issues contribute to this fragility: • Heavy dependence on imported energy • Limited export diversification • Weak manufacturing competitiveness • Slow technological upgrading • High logistics costs • Regulatory unpredictability • Insufficient labor-intensive industrial growth

Instead of aggressively addressing these structural issues, policymaking often prioritizes headline announcements, symbolic projects, and political optics. Mega-events, branding exercises, and centralized publicity campaigns create temporary excitement but do not necessarily improve industrial productivity or export efficiency. Economic development requires institutional depth, not just political visibility.

The danger of persistent external imbalances is that they reduce policy flexibility. Governments become increasingly vulnerable to global shocks, foreign capital movements, and commodity volatility. Economic sovereignty weakens when domestic fundamentals remain fragile.

Centralization of Power and Policy Distortion

Another major concern is the excessive centralization of decision-making. Modern economies require decentralized institutional strength. States, local governments, independent regulatory bodies, universities, research institutions, and financial agencies must function with autonomy and expertise.

However, policymaking in recent years has increasingly appeared concentrated around political centralization and executive image management. Major decisions often emerge abruptly, with limited consultation or institutional debate.

Examples such as demonetization revealed the risks of centralized economic experimentation. Presented as a transformative anti-corruption measure, demonetization caused immense disruption to informal sectors, small businesses, labor markets, and rural economies. Yet, the long-term gains remained questionable relative to the economic costs incurred.

Similarly, sudden policy shifts create uncertainty for investors and businesses. Economic growth thrives on predictability, institutional trust, and regulatory stability—not administrative shock therapy.

When governance becomes personality-centric rather than institution-centric, policymaking risks prioritizing political spectacle over economic rationality.

Unemployment and the Crisis of Aspirations

Perhaps the most serious long-term policy failure lies in employment generation. India possesses one of the world’s youngest populations. This demographic advantage could have become the foundation of rapid economic expansion. Instead, inadequate job creation threatens to convert demographic opportunity into social frustration.

The employment crisis is not merely about unemployment statistics. It is about underemployment, declining job quality, informalization of labor, and mismatch between education and market requirements.

Millions of educated young people compete for limited government jobs because private sector opportunities remain uncertain or poorly paid. Competitive examinations witness enormous participation because secure employment has become scarce.

At the same time, policy discourse often shifts towards nationalism, symbolism, or identity conflicts rather than sustained economic dialogue on industrial employment strategy. No economy can maintain long-term social stability when aspirations rise faster than opportunities.

Young citizens do not seek slogans; they seek dignified livelihoods.

Media Narratives and Manufactured Consent

A functioning democracy depends on informed public debate. Yet increasingly, economic criticism is dismissed as negativity, anti-nationalism, or political hostility. Sections of the media often amplify official narratives while minimizing economic distress faced by ordinary citizens. Prime-time discourse frequently focuses more on symbolic controversies than structural economic analysis.

As a result, serious economic questions receive inadequate attention: • Why are real wages stagnating? • Why is youth unemployment persistent? • Why are small businesses struggling? • Why is private investment uneven? • Why does inflation continue hurting households? • Why is economic inequality widening? Public discourse becomes emotionally polarized while economic accountability weakens. Democracy suffers when questioning policy failures becomes politically inconvenient.

(The author is freelance writer and trainer, brings rich insights into the intersection of finance and economics through his research & writing with a strong background in business studies & corporate analysis.)