It's the economy, stupid

With high interest rates, and a low risk of depreciation, portfolio inflows have risen sharply, leading to the appreciation of the rupee

The Modi government started with much fanfare and high expectations in 2014 after unseating a corruption-ridden United Progressive Alliance (UPA) government, which had overseen high inflation and rapidly declining growth. But some three years later the engine has gone off the rails.

The economy recovered a bit in its first two years, as the Modi government benefited from a huge terms of trade windfall from declining oil prices. GDP growth, which was at six per cent in Q3 2014-15, peaked at 9.1 per cent in Q4 2015-16. The government basked in the global adulation of declining inflation and being touted