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Opinion National Interest PoV 50-Word Edit

ThePrint On Camera Videos In Pictures

Society & Culture Around Town Book Excerpts Vigyapanti The Dating Story

More Judiciary Education YourTurn Work With Us Campus Voice

3 things Indians should know about PM Modi’s austerity appeal

By encouraging citizens to work from home or carpool, PM Narendra Modi is not idealising the pandemic. He is urging Indians to undertake actions that policy cannot swiftly achieve.

In a recent speech in Hyderabad, Prime Minister Narendra Modi urged Indians to work from home, delay gold purchases, and refrain from unnecessary international travel. Some have perceived the recommendations as merely symbolic, while others have deemed them impractical. However, a closer examination of the underlying data reveals a strategic communication regarding the gravity of India’s current economic situation.

The catalyst for this appeal is the disruption of the Strait of Hormuz, a critical maritime passage between Iran and Oman through which nearly 20 per cent of the world’s oil supply is transported. The disruption has driven the price of Brent crude oil to exceed $107 per barrel this week, which previously peaked above $126 last month. Brent crude serves as the global benchmark for oil pricing, influencing the cost of commodities ranging from gasoline to plastics worldwide. While many nations experience a surge in Brent prices as a significant inconvenience, for India, it exposes a fundamental economic vulnerability.

India imports approximately 88 per cent of its crude oil, with 40 to 50 per cent historically passing through the Strait of Hormuz. It is estimated that every $10 per barrel increase in Brent prices expands India’s current account deficit by approximately 0.3-0.5 per cent of GDP, adding billions to the annual import expenditure. The current account deficit, which represents the difference between a country’s earnings from and........

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