Modi Asked Citizens to Help the Rupee. But Did the Government Do Enough?
When economic pressure starts building, governments usually have two choices: take hard policy decisions or shift the burden onto citizens through “advice.” india seems to have chosen the second route.
people were told not to buy gold. Told to avoid unnecessary foreign trips. Told to consume less oil. Encouraged to work from home to save fuel and reduce imports. All of these may sound reasonable on paper. But here’s the uncomfortable question: how much of this was actually enforceable, measurable, or capable of moving the economy in a meaningful way without structural policy action?
Because while citizens were being asked to adjust their personal behavior, the government avoided one area that was fully within its direct control — capital market taxation and investor confidence.
At a time when Foreign Institutional Investors were pulling money out aggressively, and pressure on the rupee was rising, one of the fastest ways to restore sentiment could have been a serious rethink of market taxes. Reduce Securities Transaction Tax aggressively. Cut the Short-Term capital Gains tax significantly. Even consider restoring Long-Term capital Gains tax relief to earlier levels to make indian equities globally competitive again.
Markets react to incentives, not speeches.
Global investors compare post-tax returns across countries within minutes. When liquidity dries up and capital starts exiting, sentiment becomes everything. Higher friction, unpredictable taxation, and weaker incentives only accelerate outflows. That directly impacts currency stability, valuations, and domestic confidence.
The larger frustration people feel is this: citizens were repeatedly asked to make sacrifices in areas they barely control at scale, while the government hesitated on reforms that it could implement overnight through policy notification.
That’s why many investors no longer see this as just an economic slowdown.
They see it as a crisis of seriousness.