Rupee, Dollar and the Politics of Blame, copntinupous decline and no accountability

A closer look at how the Indian rupee performed under UPA and NDA governments — and why global forces, not just domestic politics, shaped its long-term decline.

Fact News Service

Chandigarh, December 17: The value of the Indian rupee against the US dollar has long been a subject of political debate and public concern. Every time the rupee weakens, familiar questions arise: Who is responsible? Is it poor governance, global pressure, or an unavoidable economic reality? The comparison becomes sharper when viewed across political regimes — particularly between the UPA government (2004–2014) and the NDA government (2014–2025).

While the rupee’s steady decline appears dramatic in headline numbers, the real story lies beneath the surface. Exchange rates do not move in isolation; they reflect deeper structural forces, global financial cycles, and long-term economic choices. Let us examines how the dollar–rupee equation evolved under both governments, and what those movements truly reveal about India’s economy.

The Big Picture

Between 2004 and 2014, during the UPA government, the rupee moved from around ₹45 per dollar to about ₹61. From 2014 to 2025, under the NDA government, it declined further to roughly ₹90 or more per dollar. At first glance, this suggests that the rupee weakened far more under the NDA. However, currency movements must be viewed in context — not just political timelines.

Across both periods, the rupee followed a long-term depreciation trend that has existed for decades. This trend reflects fundamental economic factors such as inflation differences between India and the US, persistent trade deficits, and the global dominance of the US dollar.

UPA Period (2004–2014): Controlled Weakening with Sudden Shocks

During much of the UPA era, India experienced strong economic growth, rising foreign investment, and expanding global trade. These factors helped support the rupee, particularly in the mid-2000s.

However, two major global shocks defined this period:

The 2008 global financial crisis, which led foreign investors to pull capital out of emerging markets

The 2013 taper tantrum, when signals of tighter US monetary policy triggered sharp rupee depreciation

Despite these shocks, the rupee’s decline was relatively gradual for most of the decade. The Reserve Bank of India actively intervened to limit excessive volatility, prioritising stability rather than defending a fixed exchange rate.

NDA Years (2014 to present): Continuous Decline, Minimal Accountability

Under the NDA, the rupee’s depreciation has been persistent and structural, not limited to crisis moments. Even during years of low oil prices and stable global growth, the rupee failed to strengthen meaningfully. Instead of addressing concerns, the government’s response evolved into:

Downplaying the fall by focusing on “relative performance”

Shifting blame entirely to global factors

Redefining depreciation as harmless or even desirable

This narrative shift is critical. A government that once attacked the UPA for a ₹1 fall in the rupee now governs amid historic lows — without the same scrutiny or urgency.

Policy Choices That Hurt the Rupee

Several NDA-era decisions worsened pressure on the currency:

Weak Trade Strategy

Despite slogans like Make in India, imports have grown faster than exports. Dependence on oil, electronics, and defence imports continues, keeping dollar demand high.

Unpredictable Policy Environment

Sudden policy shocks — from demonetisation to abrupt regulatory changes — damaged investor confidence and increased risk perception.

Fiscal and Revenue Stress

Large off-budget borrowings and reduced transparency weakened confidence in India’s macroeconomic discipline, indirectly affecting the currency.

Silence Over Structural Reform

Instead of addressing inflation, productivity, and export competitiveness at scale, the focus shifted to optics and messaging.

The RBI as a Firefighter, Not a Partner

The RBI has spent billions of dollars intervening to prevent disorderly depreciation, effectively shielding the government from political fallout. But intervention cannot reverse long-term weakness caused by policy inertia.

The result is a managed decline — not stability.

Conclusion: From Criticism to Complacency

The rupee’s fall under the NDA cannot be dismissed as destiny. While global forces matter, governance choices determine resilience. The contrast is telling: a government that once weaponised currency depreciation in opposition has normalised it in power.

From ₹45 to ₹61 under UPA was treated as failure.
From ₹61 to ₹90 under NDA is presented as inevitability.