Is India facing an economic crisis? | Economist Ajit Ranade interview

Added: 2026-05-26

[00:00:00]I want to start with uh asking you, Dr. Ranbey, are we facing an economic crisis and how is that likely to unfold in the coming [music] weeks?

[00:00:09]What has been India's story is that all our deficit on the trade account is more than offset by what comes in the capital account.

[00:00:19]Now, that story is uh is fraying or is is is you know, is weakening in the last 3-4 [music] years. It's not It's not recent. It's not just this year. Last 4 3-4 years, we are seeing steadily that the net foreign investment that's coming into India is uh steady steadily declining and it's close to zero now, by the way.

[00:00:38]So, despite these macro signals being okay, if the rupee is rapidly sliding down, something more serious is going on. You can't expect people to cut down on their LPG, you know, cooking gas and uh their transportation to go to office, you know, whatever vehicle you use, when in fact they are seeing that there is no cutback if they don't see any cutback on >> [music] >> uh public you know, public officials, for example, foreign travel or ostentatious, you know, other display of [music] that there is no cutback there or the luxury consumption of the of the richer segments.

[00:01:15]So, it's like trying to make an balance uh how to spread this pain. Eventually, of course, it all comes to the taxpayers. I mean, when we say government is is bearing in subsidy burden, eventually indirectly it's it's it's actually taxpayers. If the crisis in Iran were to be resolved, uh you know, say in the next month or in the next couple of months, but uh how long will the recovery take for you know, India? And what should the government be focusing on, especially [music] to, you know, safeguard the interests of its weakest citizens?