Banker Uday Kotak has come out with an intriguing comment as an outbreak of violent civil unrest in neighbouring Sri Lanka forced a regime change in the island nation with the resignation of its Prime Minister, Mahinda Rajapaksa, on Monday.
“The Russia Ukraine war goes on and the going gets tough. True test of nations is now. Strength of institutions like the judiciary, regulators, police, government, Parliament will matter. Doing what is right and not populist is crucial. A ‘burning Lanka’ tells all what not to do!” Kotak Mahindra Bank CEO Uday Kotak said in a tweet on Tuesday.
Couched in generic terms, there was no explicit indication that this was a rare bit of advice to the Modi government from one of its most ardent supporters.
The Modi government has been battling a crisis on several fronts: inflation has shot through the roof and is expected to cross 7.5 per cent — an 18-month high — when the government statisticians come out with the numbers for April on Thursday. Rising food and fuel prices, surging commodity prices, a severe disruption in supply chains, and acute electricity shortages have only exacerbated what is turning out to be a summer of discontent.
Just over a week ago, Kotak had summed up the situation succinctly in a tweet: “The wolf of inflation has firmly arrived. Future is here. Future is now.”
The rupee has been badly roiled and ranks among the worst performing Asian currencies this year.
On Monday, it sank to a historic low of 77.53. Although it clawed back its losses on Tuesday, currency experts expect it to dip to as low as 79 by the end of June.
More intriguing is Kotak’s comment on the need to strengthen the institutions — the judiciary, Parliament, regulators and police. Critics have slammed the Modi government for throttling institutions and their independence — and Kotak’s cautionary words could serve to ignite a torrent of vitriol from them in the days ahead.
On Tuesday evening, lawyer and activist Prashant Bhushan tweeted images of newspaper headlines from Lanka about calls for halal boycott and ban on burqas, attacks on Christians and Muslims, and the presidential election deepening religious divisions. “Can you see the similarity between what the rulers of Sri Lanka did over the last few years and what the rulers in India are doing here today? Will the consequences in India be similar to what is happening in Sri Lanka today?” Bhushan wrote.
The Sri Lankan situation is dire as it has tumbled into its worst economic crisis with available foreign exchange reserves plunging to just $50 billion — and its foreign debt is well over $51 billion. India, on the other hand, has handsome reserves of $600 billion and can still weather the outflow of dollars amid a deepening crisis in the world economy.
