Editorial     

Published: August 31, 2025
Updated: August 31, 2025

I-Day vitiated by faltering economy

It is very disturbing that at a time when the country has completed 78 years after it gained freedom and we have commemorated our 79th Independence Day, India’s economy is in a shambles. The NDA government led by Narendra Modi seems so occupied with wrangling with political foes that burning economic problems have been relegated to the backburner. Even as the government boasts that India has replaced Japan and emerged as the fourth largest economy in the world, and will soon overtake Germany to become the third largest economy, there is no improvement in the well-being of a majority of the 120 crore denizens of the country.

While the president of the ruling NDA’s major constituent party, the BJP, praises the Prime Minister for lifting 25 crore Indians above the poverty line during the last 11 years of Mr Modi’s rule, the Prime Minister himself has said that his government is feeding 80 crore poor Indians by providing them rations to eat two meals every day free of charge. This leads one to ask whom to believe – the PM or the BJP chief.

On the one hand, the inflationary price spiral has made the lives of lower middleclass and low-income people miserable, while on the other hand growing unemployment has added to the woes of the masses. Unfortunately, the government does not seem to be able to control the inflationary price spiral.

Similarly, in the case of growing unemployment, the government’s economic policies seem to be worsening the problem. No one yet seems to know why the Prime Minister announced the demonetisation of high-value currency notes nearly a decade ago. In fact, this hastily announced measure led to the closure of several small and medium industrial establishments, throwing thousands of people out of jobs. Today, modern technologies like Artificial Intelligence are also playing a part in closing the door to job opportunities, while the country’s exports are in decline.

As if our domestic economic problems are not enough, US President Donald Trump’s tariff bomb of 50 per cent tariffs has given a rude jolt to the Indian economy, especially to exports of readymade garments and gems & jewellery. The government appears clueless on how to tackle the problems created by this tariff bomb. Meanwhile, it is intriguing that President Trump can soften the tariff measures on the US’s biggest rival, China, while not providing any relief to the country helmed by his ‘good friend’ Mr Modi.

This tariff blow will hit the Indian economy very hard as the severe dent in exports will lead to a sharp fall in foreign exchange earnings, slow down the wheels of India Inc and aggravate the unemployment problem.

Unfortunately, at this juncture, the government also has to contend with the political storm raised by the opposition’s high-decibel allegations of theft of votes during the last general elections and its further charge that the government is therefore illegitimate. How this political storm will resolve itself is anybody’s guess, but what is certain at this juncture is that the country’s economy is decelerating.