India’s currency is again trading below 60 rupees (Rs.) to the U.S. dollar—a levelwidely considered a significant “psychological benchmark.”On June 26, the rupee hit an all-time low of Rs. 60.76 to the dollar. As a result of intervention by the Reserve Bank of India, positive investor reaction to thegovernment’s announcement that it will double natural gas prices as of April 2014,and Unilever’s decision to buy up all outstanding shares in its Indian subsidiary, therupee rose in value late last week. But India’s currency has resumed its slide thisweek, again breaking through the 60 rupees to dollar benchmark.Since April, the value of the rupee has depreciated by more than 10 percent.India’s Congress Party-led United Progressive Alliance (UPA) government hasresponded to this slide by putting on a brave face. It insists that India’s economicfundamental are strong and has pledged to quickly bring forward further “economicreforms”—a euphemism for social spending cuts and further concessions andincentives for investors and speculators.Behind the scenes, however, there are increasing fears within ruling class circles thatthe rupee’s plummet could cascade into a current account crisis. In May, acommentator in the
, noting that India’s current account deﬁcit isnow the highest it has been since 1991, said that if Indian Prime Minister ManmohanSingh “left oﬃce tomorrow, he might be remembered less for his response to thecrisis of 1991 than causing the crisis of 2013.”In a revealing comment that underscores the government’s dependence on andsubservience to foreign capital, Finance Minister P. Chidambaram declared lastmonth, “ I could not agree more with Fitch when it said more reforms are needed.”Fitch refers to the Fitch Credit Rating Agency. Along with other global credit ratingagencies, it has been placing relentless pressure on India over the past two years todramatically accelerate measures to reduce the government’s burgeoning budgetdeﬁcit at the expense of working people and to remove all remaining barriers toforeign investment. Fitch, Moody’s and the other rating agencies have repeatedlythreatened to downgrade India’s sovereign credit rating, which currently stands atone notch above junk bond status. Investors, meanwhile, have voted with theirdollars. In the 2012-13 ﬁscal year, which ended March 31, Foreign Direct Investment(FDI) was off 38 percent from 2011-12.In recent weeks Chidambaram has declared the government is committed toincreasing the prices of domestically produced natural gas and coal and to liftingcaps on FDI in the pharmacy, telecom, media and military manufacturing sectors.Since coming to power in 2004, the UPA has aggressively pursued a rightwing pro-market and pro-foreign investor agenda, slashing taxes for big business and pressingforward with Public Sector Unit disinvestment. At the same time, it has sharplyincreased the burdens on workers and the rural poor by repeatedly hiking the priceof petrol, diesel and cooking gas. Last September, facing what it thought was animminent threat of a credit rating downgrade, the Congress-led UPA introduced apackage of “big bang reforms,” including opening up the multibrand retail sector toforeign giants like Wal-Mart and Carrefour.