Why PM Modi's save-fuel, work-from-home appeal is not an ‘austerity’ drive

PRime government minister Modi late urged citizens and institutions to keep up fire, espouse work-from-home mode where feasible, and reduce avoidable foreign-exchange outflows — an appeal that has since then been widely reported as PM calling for “austerity”.While austerity refers to difficult economic conditions created by government policies aimed at cutting public spending, PM Modi's appeal on Sunday at public event in Hyderabad did not convey that Centre is cutting capital expenditure, welfare spending, or subsidies.Government sources said describing PM Modi's recent public appeal for conservation and efficient spending as "austerity measures" is incorrect, arguing that the characterisation is economically misleading.Why use of ‘austerity’ incorrectThey clarified that the administration is not pursuing austerity policies in the conventional economic sense. Officials emphasised that the phrase carries implications that do not align with the Centre's current economic strategy.“Multiple media platforms have described PM Modi's recent appeal to conserve fuel, adopt work-from-home where possible, and reduce avoidable foreign-exchange outflows as 'austerity measures.” "That phrase is misleading as government is not implementing austerity measures which has negative economic connotations," they said.According to the clarification, austerity typically refers to policies involving cuts in public expenditure, fiscal tightening, and reductions in welfare commitments - none of which, the government says, are being undertaken at present."Austerity usually suggests budget cuts, reduced government spending, lower subsidies, and fiscal tightening."The government maintained that ongoing expenditure priorities remain unchanged, particularly in infrastructure and welfare sectors. "Modi government is not cutting capital expenditure, welfare spending, or subsidies," the sources said.They further said the PM Modi's message should instead be viewed as an appeal for prudent and strategic consumption amid global economic uncertainties and energy concerns.“PM Modi's appeal is not about spending less. It is about spending more wisely by reducing fuel consumption, avoidable dependence on imported goods and foreign-currency-intensive services.”PM's appeal came amid global economic disruptions due to many factors, primarily the West Asia conflict sparked by US-Israeli strikes on Iran and latter's retaliation that resulted in a full-scale war which has kept Strait of Hormuz — a key waterway through which a fifth of world's energy requirements travel — virtually shut.