New Delhi: The rupee witnessed one of its steepest declines and Indian shares fell sharply on Monday (May 11), the morning after Prime Minister Narendra Modi asked Indians to adopt wide-ranging and severe austerity measures. While Modi claimed the steps would be in national interest due to the crisis caused by the conflict in West Asia, the rupee took a tumble, ending at a record low of 95.31 to the dollar.There is concern the rupee may breach the Rs 100 to a dollar mark, Finacial Express reports, a risk arising from the rising price of crude.The prime minister’s stated goal of saving foreign exchange reserves, which he said were squeezed by the war between the United States and Israel against Iran, backfired as crude soared above USD 100 a barrel on Iran and the United States failing to agree to a proposal to end the war.Brent crude crossed the psychologically significant USD 100 mark and was trading around USD 103.8-104.5 per barrel on Monday, up roughly 2.6%, Reuters reported.Markets also responded negatively to the third-biggest oil importer promoting pandemic-era restrictions such as work from home and putting off foreign travel and gold purchases for a year. Especially severe cuts were proposed to farmers, who were told they should try slashing fertiliser use by up to half the usual requirement.Nifty responded by falling 1.49%, while the BSE Sensex shed 1.7% and the rupee tanked 82 paise against the dollar. The day’s trading recorded the steepest single-day fall for both the Nifty 50 and the Sensex since March 30, reported NDTV Profit, which also said investor wealth declined by about Rs 6.4 lakh crore on Monday.Among the biggest losers in Monday’s selloff were ABB India, which fell 8.77%, Titan, down over 6%, InterGlobe Aviation (IndiGo), which declined 5%. It was followed by GMR Airports’ share price, down 3.25%, and SpiceJet shares, declining 2%, Mint reported. State Bank of India slipped a significant 4.14%.After the PM’s appeal to avoid gold purchases, shares of jewellery companies (including Titan) fell sharply as the remarks triggered a selloff.Government response after Modi’s speechOn May 11, the Union government sought to reassure the public that there was no immediate shortage of essential supplies. Chairing the fifth meeting of the Informal Group of Ministers (iGoM) on West Asia, Defence Minister Rajnath Singh wrote on X that India currently has 60 days of crude oil and natural gas stocks and 45 days of LPG reserves.In a press note, the iGoM said that foreign exchange reserves stand at a “comfortable” USD 703 billion. The government said fuel supplies and fertiliser availability remain adequate and urged people not to panic or rush to retail outlets. It framed the proposals of the prime minister as a “conservation” drive rather than austerity. It said the aim was to create long-term capacity if the US-Israel-Iran conflict persists, without specifying a timeline.The iGoM in progress on May 11, chaired by Union Minister of Defence Rajnath Singh and attended by other top ministers and bureaucrats. Photo: PIB.The government also said oil marketing companies have absorbed losses of nearly Rs 1,000 crore a day, with under-recoveries running to around Rs 2 lakh crore in the first quarter of 2026, saying these were to shield consumers from the impact of rising crude prices.The statement further highlighted the Union Cabinet’s May 5 approval of Emergency Credit Line Guarantee Scheme 5.0, aimed at providing an additional credit flow of Rs 2.55 lakh crore (target) with 100% credit guarantee coverage for MSMEs and 90% coverage for non-MSMEs and the airline sector, which said in late April that it is in distress and sought government cash and policy support to survive.It also referred to relief measures in public procurement contracts, including a finance ministry circular allowing force majeure-related deadline extensions of 2-4 months from February 28, 2026.The iGoM note emphasised the sale and procurement of fertilisers in particular, highlighting there was no shortage. This is an item that the prime minister had proposed the most drastic self-imposed cuts by farmers.Domestic production and import of fertilisers after the crisisProduct1 Mar 2026–10 May 20261 Mar 2025–10 May 2025Urea46.2854.98DAP6.205.56NPKs15.5722.03SSP8.739.44Total76.7892.01Figures in lakh tonnes.(Note: The government’s table appears to contain only domestic production figures, not combined import-plus-production figures, as the press release states.)Demand management or capacity building?The measures announced by the prime minister and backed by the iGoM note – reducing fuel consumption, discouraging gold purchases and foreign travel, cutting fertiliser usage, promoting public transport and conserving forex – are fundamentally demand-management and import-compression measures.As The Wire reported, such measures cannot be termed as economic management steps, even during a crisis. They are unrelated to building strategic reserves, expanding new and renewable sources of energy, improving logistics or investing in energy efficiency. While the proposed steps may reduce immediate pressure on imports and currency, they do not build future capacity. As a result, the prime minister himself, his party and government have been criticised for not adhering to any of the restrictions being proposed.In this context, the prime minister and Union government have also drawn the ire of opposition parties, with the allegation that the crisis is a result of mismanagement, not just the war.Karnataka Chief Minister Siddaramaiah launched among the sharpest attack on Modi, accusing him of hypocrisy and policy failure. In a statement he shared on X, Siddaramaiah wrote that the prime minister was “ignoring the elephant lying dead on his own plate, while searching for a dead fly on someone else’s plate”. He said the prime minister was blaming others while failing to address the consequences of his own government’s policies.He also questioned the “development” model of the government when it had to make appeals asking people to avoid gold purchases, reduce fuel consumption and cut fertiliser use.This report was updated at 2:23 pm on Tuesday, May 12, 2026.