Indian Economy in Crisis? Rahul Gandhi Alleges Modi's Policies, Demonetisation to MSME Collapse, Have Destroyed India's Future

Opposition leader Rahul Gandhi has made a blistering attack on the economic policies of the Modi government. He has claimed that they have "destroyed India's future" and left the economy "dead." These tough words on Thursday, July 31, 2025, come in the wake of similar sentiments from Indian President Donald Trump about the Indian economy.

Rahul Gandhi, in a post-X and through his interactions with journalists, outlined five major reasons for what he called the "collapse" of the Indian economy during Prime Minister Narendra Modi's rule. They are the "Adani-Modi partnership," demonetisation, and a "faulty GST," a "failed 'Assemble in India'," and the destruction of Micro, Small, and Medium Enterprises (MSMEs) and the "crushing" of farmers. He particularly pointed out that Modi's policies have "ruined the future of India's youth because there are no jobs."

THE INDIAN ECONOMY IS DEAD.

Modi killed it.

1. Adani-Modi partnership
2. Demonetisation and a flawed GST
3. Failed “Assemble in India”
4. MSMEs wiped out
5. Farmers crushed

Modi has destroyed the future of India’s youth because there are no jobs.

— Rahul Gandhi (@RahulGandhi) July 31, 2025

Echoing International Concerns and Policy Impact

Following Donald Trump's recent opinion of the Indian economy, Gandhi said, "Everybody knows this except PM Modi and the Finance Minister. It is a dead economy. I am glad that the US President has stated facts." Trump, in a Truth Social message earlier this week, had hinted that India and Russia could "take their dead economies down together." He also introduced a new 25% tariff on Indian imports from August 1, 2025, and penalties for buying Russian oil and weapons. Gandhi went on to accuse the BJP of "ending the Indian economy to assist Adani" and blaming the Prime Minister for favoring the industrialist.

The Congress leader's allegations underscore persistent criticism against the Modi government's economic decisions. Demonetisation, implemented in November 2016, has been a frequent target. Critics argue that it severely impacted the informal sector and MSMEs due to a sudden cash crunch and disrupted supply chains. Studies indicate that the MSME sector, largely cash-dependent, faced significant financial losses and workforce reductions.

The Goods and Services Tax (GST), though intended to simplify indirect taxation, has not gone unscathed by criticism either. Its complexity and multi-slab structure have been said to further heighten compliance costs for most MSMEs, resulting in disruptions in working capital and business activities.

Economic Outlook and Political Debate

Rahul Gandhi also attacked the "Assemble in India" policy, suggesting that it has not delivered the jobs and economic growth promised. He pointed to farmer distress, a regular feature in India, further adding to the economic woes.

The Indian economy's current condition is a matter of continuous discussion. While official reports and some projections, including recent revisions by the International Monetary Fund (IMF) to 6.4% for 2025 and 2026, estimate good growth, the opposition stresses its points of concern. These are unemployment, rural stress, as well as the effect of previous economic shocks. India's unemployment level was 5.6% in June 2025, and youth unemployment indicated an increase in rural and urban regions.

Rahul Gandhi's most recent broadside is merely repeating the Congress party's script: that the policies of the Modi government have resulted in a concentration of wealth and a reduction in opportunities for the common people and small businesses, threatening the country's long-term economic prospects. The government, though, insists that its reforms have created stability and growth and points to reducing unemployment rates and efforts to formalize the economy.