Rs 70.08 at 71 ....External cause but internal memories die hard

NOTHING TO DO WITH RUPEE: A schoolboy dressed as Mahatma Gandhi cries during a play in Mumbai on Tuesday to celebrate Independence Day. (AP)

TT, New Delhi: India at 71. Rupee at 70.08 and back. On the eve of his last Independence Day speech from the Red Fort in the current term, Prime Minister Narendra Modi ran into a currency conundrum that he himself had mercilessly milked when he was running for the highest office.

The rupee crossed 70 against the dollar on Tuesday for the first time since Independence and touched 70.08 before closing at 69.90.

The Modi government blamed "external factors" - not without reason as friction between Turkey and the US has pushed up the value of the dollar and driven down the Turkish lira.

Such turmoil makes investors nervous, prompting a contagion of capital outflows from other emerging markets that run hefty current account deficits and rely on foreign capital. India's economic fundamentals give no cause for undue alarm but its widening trade deficit could mean that the gains from cheaper exports might be offset by costlier imports. 

Economic affairs secretary Subhash Chandra Garg said there was nothing to worry about as long as the depreciation was in line with other currencies.

But economic nuances do not make good politics. Almost every uncharitable swipe that chief minister Modi had taken at then Prime Minister Manmohan Singh when the rupee had crossed Rs 60 came back to haunt Prime Minister Modi on Tuesday. Modi's political opponents and some social media users mocked him with his own words.

Congress president Rahul Gandhi led the charge, reminding Modi how he used to blame the then UPA government for the fall in the value of the rupee. "The Indian rupee just gave the Supreme Leader, a vote of NO confidence, crashing to a historic low. Listen to the Supreme Leader's master class on economics in this video, where he explains why the rupee is tanking," Rahul tweeted.

The video attached to the tweet showed Modi, then Gujarat chief minister, explaining how the weakening rupee imperilled Indian business and hurt the economy. "Indian businessmen won't be able to survive in global trade because of the falling rupee. I say with seriousness that the fall is not because of economic reasons, it is because of your corrupt policies," Modi had said.

The Congress taunted him with another tweet. "Modiji finally managed to do something that we couldn't do in 70 years," the party tweeted, whipping the BJP with its oft-repeated taunt that the Congress had done nothing in 70 years.

Congress communications chief Randeep Surjewala said the Modi government's prestige and the rupee were falling at the same speed.

Among the first to set the ball rolling was the CPM's Sitaram Yechury who had tweeted on Monday when the rupee was within kissing distance of 70 to a dollar: " Pichhle sattar saal mein yeh kabhi nahi hua. Wah Modiji wah(This has never happened in the past 70 years. Well done, Mr Modi)."

The RJD's Manoj Jha recalled chief minister Modi wondering whether the falling rupee was racing to touch Singh's age and tweeted: "Can someone please tell us whose age has the rupee crossed?"

"The rupee has been sent to the Margdarshak Mandal," the Congress said in the afternoon, borrowing a quip that had gone viral on social media as the rupee breached 70.

Those who had echoed Modi pre-2014 were not spared either. Prominent among them was author Chetan Bhagat who had tweeted on June 19, 2013: "Rupee at 60. It is mayhem. Close to an economic crisis. But well, the government is silent."

Bhagat was active on Twitter on Tuesday but silent on the rupee.