First, let’s ask: is the Indian rupee (INR) really falling? To answer this, let’s compare it against various key currencies: the USD, EUR, Chinese Yuan Renmint (CNY), IMF’s Special Drawing Rights (IMF SDR) and, its classical political foe, the Pakistani rupee (PKR):
The answer is: yes, the INR is indeed sharply falling against all of the compared currencies. If we had compared it only against a single strong currency, one could’ve argued that it might have been that the other currency was raising faster. However, the INR is simultaneously falling against all of the five currencies. Hence, it is fair to conclude that something must be wrong with the situation specific to India.
So, what is media’s explanation of this freefall? All recent news basically blame it on COVID-19.
- Benjamin Parkin blames it on COVID-19.
- Karan Kashyap blames it on COVID-19.
- Vasanthi Vera blames it on COVID-19.
- “Press Trust of India” blames it on COVID-19.
- Surajit Dasgupta blames it on COVID-19.
We at A Zoom are not denying the impact of COVID-19 on the productivity of nations, specially due to their reliance on Chinese supplies.
However, we ask the question: Is COVID-19 the only factor that caused the Indian rupee to fall as the media implies? I.e. no other cause?
To answer that question, let’s analyze it logically: suppose that it is true that 100% of INR’s recent fall is only due to COVID-19. Then, it would necessarily imply that the following points must also be true:
- Point 1: Burning shops of tax-paying businesses, causing unrest in streets by burning places of worship, and beating, lynching and burning people alive, has no impact on economy. This is exactly what is intensely happening in India after the 24th of Feb, 2020 (the period where the INR’s value drops fastest), as reported by many news outlets.
- Point 2: India’s 83 billion USD dairy industry has no worth, hence beating innocents to death before hanging their dead bodies from a tree (for daring to farm cows for its milk and meat) won’t impact India’s economy.
It is sufficient to show that only one of the points above is false, in order to logically prove that the claim that INR’s freefall is only due to COVID-19. It is extremely easy to see why Point 1 and Point 2 are false. In fact, Point 2 is an oxymoron as it states that India’s dairy industry is worth a lot of money (83 billion USD).
Therefore, to answer the question: we have proven (by contradiction), that the claim that INR’s drop is only affected by COVID-19 is false.
In fact, one doesn’t need a PhD in economy to realize that riots and systematic crimes against owners of businesses that offer productive services (e.g. dairy products, vegetables, etc), will strongly harm economy as it becomes an extremely unsafe space for conducting healthy forms of trade.
In other words, the recent riots against peaceful protesters must be part of the explanation of the recent steep drop in INR’s value, for the following reasons:
- The Hindu riots intensified exactly in the same time period when the INR started its freefall.
- COVID-19’s effect was happening in previous months (at least since 22nd of January), and its negative effect on INR’s value was much slower. Why should we assume that COVID-19 suddenly increased its damaging effect against the INR when there is no evidence for it? E.g. there is no evidence that India faced any sudden exceptional shortage during that period. The only exceptions that were observed during the period after the 24th of Feb is the Hindu riots.
Therefore, concluding that the recent INR’s freefall is due to Hindu rioters is the simpler explanation than the mainstream narrative that is pushed by Indian economists. Following the simpler explanation is scientifically proven to be the path with less error, which makes the claim that the Hindu riots are worse to India’s economy than Coronavirus to be the most probable explanation.
Update: a more recently published article supports our conclusions that India’s economical slowdown is not due to COVID-19, but rather due to India’s economical incompetence.
Side note: we find it odd that every one of the reporters (Benjamin Parkin, Karan Kashyap, Vasanthi Vera, “Press Trust of India” and Surajit Dasgupta) failed to see the Hindu riots’ effect on India’s economy despite the many clues. We find this to be most likely deliberate and systematic, and suspect it to be due to the raise of nationalism in India (somehow all of the reporters above are Indians, and somehow none of them knew about the Hindus who burn shops owned by Muslims, and how it relates to their economy).