The Quietest Policy Success of the Modi Era: Not Growth, But Survival Planning
India recently crossed a major financial milestone. Its foreign exchange reserves went past $700 billion. This should have been big news, but it barely caused a ripple. There were no speeches, no celebrations, and no political chest-thumping. That silence itself tells an important story. India’s most important economic achievement today is not fast growth or global rankings, but something far more basic and far more valuable. It is preparedness.
For decades, India’s economic debate has been obsessed with growth numbers. Every government wanted to show higher GDP growth than the previous one. Growth is important, but India’s own history shows that growth alone does not protect an economy. In 2008, India was growing fast, yet global shocks still hurt. In 2013, growth existed on paper, but the rupee collapsed, inflation surged, and foreign investors fled. The lesson was simple but painful. Growth without safety buffers is fragile.
India has often governed its economy with hope. The hope that oil prices will stay low. The hope that global money will keep flowing in. The hope that the world will remain stable. These hopes failed again and again. In 1991, India had barely enough foreign currency to pay for a few weeks of imports. In 2013, India was grouped among the “fragile five” economies, exposed to global capital shocks. Each crisis forced emergency responses rather than planned ones.
What has changed in recent years is not just the size of reserves, but the thinking behind them. Forex reserves are no longer treated as a side effect of growth. They are treated as a strategic shield. The Reserve Bank of India has consciously built buffers to deal with currency volatility, oil price shocks, global interest rate changes, and geopolitical risks. The assumption now is not that the world will behave nicely, but that it may not.
Survival planning sounds dramatic, but in practice it is very practical. Large reserves allow India to pay for essential imports even during global disruptions. They help the RBI prevent sudden crashes in the rupee, which protects common people from sharp fuel and food price increases. They give policymakers the confidence to make decisions without panic. Most importantly, they reduce the risk of India ever having to knock on the IMF’s door under pressure.
This approach looks boring because it avoids drama. There are no visible benefits in daily life when a crisis does not happen. But that is exactly the point. Good financial policy works best when nothing goes wrong. Countries like Sri Lanka and Pakistan did not collapse overnight. They ignored warning signs, ran thin reserves, and assumed they could manage later. When shocks came, there was no cushion left.
Compared to previous governments, the difference is clear. Earlier phases either accumulated reserves by chance during good times or drained them during stress. Today’s approach assumes stress as normal. Reserves are built deliberately and kept untouched. This also requires political restraint. Using reserves for short-term spending or populist announcements would bring quick applause but long-term damage. Avoiding that temptation is itself a policy choice.
This mindset will matter even more in the future. The global economy is entering an era of uncertainty. Wars, trade disruptions, sanctions, and financial volatility are becoming common. Countries that plan only for good times will struggle. Countries that plan for bad times will survive with less damage.
India has not become immune to global shocks. No country is. But it has moved from hoping that reserves will be enough to making sure they are more than enough. That shift may not excite headlines, but it reflects a level of economic maturity India did not have before. Quietly, without noise, India has chosen stability over slogans. And in today’s world, that may be its smartest policy choice.
