I have written about Why Narendra Modi Keeps Winning Elections In India. Seemingly, he has no weaknesses. He is hugely popular with the Indian electorate. The so-called failure of Narendra Modi – Demonetisation is not a failure to the voting public. Then, what is it that will ever hurt him? What could lead to his downfall? It is the Interest Rate Cut.
The corrupt and self-indulgent Indian Politicians will never get this. The self-serving Indian Media will never highlight this. The Indian Liberals will never realize this from their ivory towers. There is a slight murmur, among the people who vote Modi, which can generate into a simmering discontent. It is the Interest Rate Cut.
Decision-makers in the Narendra Modi Government are clever politicians, which he is himself. However, when it comes to Indian Economy, he is surrounded by people like Nirmala Sitharaman, Shaktikanta Das, K Subramanian. It is the case of the blind leading the blind. For them, there is only one weapon to stimulate the Indian Economy without any evidence to support their actions. It is the Interest Rate Cut. And, it is precisely this obsession, which can lead to his downfall.
The Middle Class
I hope Narendra Modi remembers who votes for him. People who create NPAs, who are cheered on as wealth creators, the self-styled economists, are not the people who come out to vote for him. It is the people who save their earnings who come out to vote for him. It the Indian Middle Class.
These people who manage their lives from monthly earnings and save for the future of their families are hurt the most with interest rate cut. Their monthly budget and future financial planning go for a toss. They are clueless about what is the value of their money. How much they need to save more?
This is one class for whom nobody is going to speak and write. They toiled all their lives to live in peace in their old age. Now, what do they get in return? All their earnings not having enough returns for them to lead a dignified life.
Needless to say, these are Narendra Modi voters.
Jan Dhan Account Holders
Narendra Modi got Jan Dhan bank accounts opened. What will these people do with it? There is no incentive to save. There is no benefit in keeping the money in the account.
When there is no finance, what use is financial inclusion? Again, these are Narendra Modi voters.
Indians pay for their education and health
India is a defunct socialist state. Barring the AIIMS for health and few IITs/IIMs for education, Indian State has devolved its duties to the private sector for service delivery of health and education.
Indian State does not know to deliver the basic aspects of social security to the general public. We have accepted and lived with these failures. We save for these costs. Now, unfortunately, with the interest rate cut, we have to save even more.
If this single-minded fixation with interest rate cut continues, we have to save much more. Bloody, there is nothing much to earn, earnings are not rising. But, the costs are rising. Indian State does not pay a rupee. How do we provide for ourselves?
This Government is hell-bent on reducing the value of my money. I need to work even more days, even more months, even more years to save some money for my family. And it is me and my family, who votes for Narendra Modi.
I suppose the Indian electorate can live with the current interest regime, they can absorb one more. If there are any more interest rate cuts, Narendra Modi is going to have it. He is hurting his voters, where it hurts the most.