June 01, 2026

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BRACE FOR THE WORST

Prime Minister Narendra Modi's invocation of the COVID years at a public meeting in Secunderabad on May 10 was not empty remembrance of tough times. It was a warning. During the pandemic, Indians had made their peace with work-from-home arrangements, online meetings and curtailed consumption. Now, Modi suggested, we may need to revert to some of those habits--not because of a virus, but because of an economic storm gathering over India. The trigger lies thousands of miles away--in West Asia. The widening conflict, involving the US, Israel and Iran, has disrupted energy markets, pushed up crude prices, hit remittances from the Gulf and exposed vulnerabilities in India's external finances. For a government that has just emerged victorious in three out of five assembly elections, the timing of Modi's message was significant. The prime minister was preparing citizens for hardship ahead and urging them to voluntarily adopt austerity. He advocated not buying gold for a year, cutting foreign travel and destination weddings, working from home wherever possible, reducing fertiliser and edible oil use, using public transport and carpooling, and opting for swadeshi goods. "During the corona period, we adopted work from home, online meetings, video conferences and developed many such systems," Modi said. "Today, the need of the hour is that we restart those practices." Behind the appeal lies the worrying rise in India's current account deficit (CAD)--the gap between foreign currency inflows and outflows--primarily on account of the sharp rise in energy costs. Brent crude prices have climbed to around $110 (Rs 10,500) a barrel from $70 (Rs 6,700) before the US-Israel strikes on Iran in February, over 60 per cent higher than last July. India's oil refiners were estimated to be losing roughly Rs 1,000 crore a day before fuel price hikes were announced. As a result, the trade

A CRISIS OF IDENTITY

By the time results from five state elections began pouring in on May 4, the Congress had been left smaller, more southern and more Muslim in its political profile than at any point in its history. The verdicts sharpened a fear long haunting the Congress: that its national footprint is steadily narrowing even as the Bharatiya Janata Party (BJP) argues that the Grand Old Party no longer speaks for a broad cross-section of India. In Assam, the Congress was reduced to 19 MLAs, its worst-ever tally, while its projected`face', Gaurav Gogoi, lost from Jorhat. In West Bengal, where it had drawn a blank in 2021, it returned with just two seats. In Tamil Nadu, the party fell from 18 MLAs to five. Its rapid post-poll shift from the old ally Dravida Munnetra Kazhagam (DMK) to Vijay's Tamilaga Vettri Kazhagam (TVK)--sealed by party leader Rahul Gandhi's presence at the swearing-in--looked less like strategic agility than an admission that the original alliance call had failed. In Puducherry, too, the Congress-DMK alliance could not prevent the National Democratic Alliance's second successive victory.