All about borrowing.

"The Reserve Bank of India (RBI) is aware of near-term risks to the Indian economy," HT. But, "The Indian economy and the financial system, in contrast, remain robust and resilient supported by strong growth, healthy balance sheets of financial and non-financial firms, sizeable buffers and prudent policy reforms," said RBI Governor Sanjay Malhotra. "Bad loans are at a multi-decade low," but credit growth at non-banking financial companies (NBFC) was higher than "that of banks in all segments except in agriculture and allied activities." NBFCs borrow from commercial banks (72.9% last September) and are "not as closely regulated as banks" so defaults at NBFCs could have a knock-on effect on banks. Mint. But what about the government's bank, the RBI? This year's Budget will show how much dividend the government expects from the RBI. The 2025 Budget Estimate was Rs 2.34 trillion from the RBI and public sector banks. CNBC. In the event, the RBI transferred a record Rs 2.68 trillion (newsonair.gov.in), helping to keep the fiscal deficit under control. The RBI transferred Rs 874.16 billion in FY23 and more than doubled it to Rs 2.11 trillion in FY24. Already, "India's fiscal deficit for April to November, or the first eight months of this fiscal year, was at Rs 9.76 trillion, equivalent to 62.3% of annual estimates, widening from the previous year's 52.5%. The government aims to narrow the fiscal gap to 4.4% of GDP in this financial year from 4.8% a year earlier." ET. Monetization of the fiscal deficit "occurs when the government finances itself by issuing non-interest-bearing liabilities: that is, either currency in circulation of central banks reserves, if the central bank can avoid paying interest on those reserves." some.yale.edu. Income Tax rebate was increased from Rs 25,000 to Rs 60,000 this year and, in addition, the standard deduction for salaried workers has been increased to Rs 75,000. Bajaj Finserve. Also, the goods and services tax (GST) rates have been simplified and rates reduced on a range of items. cleartax.in. "India's goods and services tax (GST) collections reached Rs 1.75 trillion ($19.45 billion) in December, up 6.1% from the same month last year, the government said." ET. It may be up year-on-year but it is much lower than Rs 2.10 trillion in April 2024 and Rs 2.36 trillion in April 2025. Tata Nexarc. This may partly be because the consumer price inflation (CPI) inflation collapsed to just 0.7% in November after 0.3% in October. rateinflation.com. "India's household debt rose to 41.3% of GDP at the end of March 2025," "up from a five-year average of 38.3%". Borrowing for consumption is 55.3% of total household borrowing from financial institutions as of September 2025. ET. Naturally, "India's manufacturing sector expansion slowed to its weakest in two years in December as demand softened and firms curbed production...hiring has slowed to a near standstill." Reuters. Less consumption means less GST and a fall in hiring means less income tax. So, how much will the RBI pay the government? An indication in the dreaded Budget.      

Can't afford another diamond.

"Data shows that India's nominal gross domestic product (GDP) has reached $4.18 trillion, placing it in the fourth spot behind the United States, China and Germany." The International Monetary Fund's (IMF) "projections for 2026 put India's economy at $4.51 trillion, compared with Japan's $4.46 trillion." The government projects a GDP of $7.3 trillion by 2030. NDTV. Since India produces in rupees, the exchange rate against the dollar will have an effect on GDP ranking. The rupee depreciated 5% in 2025, from 85.65 on 1 January to 90 against one dollar on 3 December, despite the Reserve Bank's (RBI) efforts, and was Asia's worst performing currency. FE. India really needs to grow faster because, "Per capita GDP - the real deal - is estimated at $2,818 for 2025-26 and puts India among the 50 poorest countries," wrote Pragya Srivastava & Payal Srivastava. While overall youth unemployment is at 3.2%, unemployment among graduates is at 13% and among postgraduates at 12.4%. "Only 1% of households control around 60% of total wealth in India," and "the super rich in India, estimated to be around 3 million households hold $2.7 trillion in liquid financial wealth, reported Business Standard." Saurabh Mukherjea and Nandita Rajhansa have coined the term "octopus class" for around 200,000 families across India, "in small towns as well as big cities, or nearly 1 million people, who control nearly 80% of India's wealth." ET. "The rupee finished the year at 89.87, marking an annual 4.72% decline, its worst showing since 2022, when it dropped nearly 10%." India's balance of payments slipped into a roughly $22 billion deficit between April and November. This is despite the dollar index dropping 9.5% which supported most Asian currencies. Reuters. The RBI had a greater tolerance for the rupee depreciation in 2025 and foreign portfolio investors (FPI) sold Rs 1.58 trillion worth of Indian shares, wrote Subhana Shaikh. Net Foreign Direct Investment (FDI), which are thought to be long term investments, dropped to just $0.96 billion in FY25. Net FDI was $10.9 billion in FY 24 and $43.9 billion in FY21. The Federal. Remittances by Indians working abroad jumped 14% to $135.46 billion in 2024-25. newsonair. gov.in. The US is to impose a 1% tax on remittances by foreign workers from 1 January 2026. In 2023-24, Indians repatriated nearly $33 billion from the US. FE. "One of the Indian economy's most urgent needs in 2026 is a win-win trade agreement with the US, without which the cumulative impact of high tariffs could begin to weigh heavily on growth, jobs and competitiveness." ET.  The most expensive gift received by President Joe Biden's family in 2023 was when "first lady Jill Biden was presented with a 7.5 carat diamond worth $20,000 (roughly Rs 1.7 million) by Prime Minister Narendra Modi." The Wire. Betting on a Biden victory in the 2024 election was a blunder. Akin to placing all your money on a three-legged horse in the Kentucky Derby. Buying another diamond will drop the rupee even further. Better to rabbit on about the GDP. 

Chinese and Bangladeshi.

 India enters 2026 with a strategy "rooted in openness without deep alignment, engagement without dependency and pragmatism without abandoning long-term goals." India has continued to purchase Russian oil "despite the imposition of tariffs by the US and other external pressures." ET. "Russian crude continues to flow into India," although, according to commodity market analytics firm Kpler, it was down to 1.2 million barrels per day (bpd) in December, from 1.84 bpd in November. TNIE. "Perhaps the most nuanced element of India's new global playbook is its cautious warming towards China." Perhaps there is no other option. The US Department of Defense's 2025 assessment is that "China is not building its armed forces for dramatic battlefield victories alone. It is building them to impose control." "India has already been living under this strategy since 2020." "Beijing treats territorial claims, including those against India, as 'core interests' tied to regime legitimacy. That framing leaves little space for compromise." SNG. We retaliated by poking the Dragon in the backside. "The recently released teaser of Salman Khan's war drama Battle of Galwan has triggered a strong reaction from China." The Global Times said it is "over-the-top" and "distorts facts".  NDTV. On 5 May 2020, savage Chinese troops launched a barbaric surprise attack on Indian soldiers at Galwan Valley in Ladakh, armed with clubs with protruding nails, murdering 20 Indian soldiers. wikipedia. After denying any casualty, China eventually admitted the loss of four of its soldiers, but a report claimed that the actual number was 42 Chinese killed. NDTV. On 9 December, 24-year-old MBA student from Tripura Anjel Chakma was stabbed to death in Dehradun in Uttarakhand for objecting to racial abuse. "We are not Chinese...We are Indians. What certificate should we show to prove that," were his last words. TOI. According to Dehradun Police, abusing Chakma as a Chinese was "in jest" and "not a racial attack". NDTV. Really? Why then was he killed for insisting he is Indian? Next door, in UP, the government filed an application in court to withdraw charges against 10 Bisada villagers for lynching Mohammad Akhlaq in September 2015 on suspicion of possessing beef. The judge rejected the appeal. TOI. Is the UP government saying that nobody killed Akhlaq and his wounds were self-inflicted? On 17 December, a 31-year-old migrant worker from Chhattisgarh was brutally beaten to death on suspicion of being a Bangladeshi. In a grotesque paradox, this man's name was Ramnarayan Baghel. NDTV. "In many parts of India, Hindus often invoke the popular god Ram's name as a greeting. But in recent years, Hindu lynch mobs have turned Ram's name into a murder cry," wrote Geeta Pandey for the BBC. Ram and Narayan are both manifestations of Lord Vishnu. You can't get more Hindu than that. Hindus worship God in many forms. wikipedia. But Hindus have never fought, or even argued, as to whose god is greater. Our religion is being perverted to win elections. That is criminal. But the greater crime is the silence of the educated middle and upper classes who are making excuses for this corrupt immoral regime. A divided society is weak. China is grinning.  

 

Depending on Trumpism.

Swaminathan Aiyar predicts "a sharp setback for Trumpism" in 2026. In contrast, India "performed brilliantly in the first two quarters of this fiscal year, averaging 8% growth. Inflation is 0.7% and CAD is likely to be a comfortable 1.4% of GDP." "Google, Amazon and Microsoft have announced plans to invest a total of $67.5 billion in new GCCs. Much of this will be invested in New data centers." "Between 2010 and 2025, India filed over 86,000 AI related patents," and "Machine learning dominates the AI patent landscape, while generative AI now accounts for 28% of India's patents, compared to just 6% globally." However, AI patent grant ratio is at a low 0.37% and private sector R&D investment "remains below 0.64% of GDP". AIM. "Microsoft has committed $17.5 billion to AI-related projects in India, while Amazon plans to invest $35 billion over the next five years to scale up AI-powered operations nationwide. Google has pledged $15 billion to develop data centers," and "Meta is setting up a large facility close to Google's proposed site." MC. Data centers need vast amounts of water. "Large data centers can consume up to 5 million gallons per day, equivalent to the water use of a town populated by 10,000 to 50,000 people." eesi.org. In 1951, "Every citizen had more than 5,200 cubic meters of water available annually." That has collapsed to less than 1,500 cubic meters. "By 2050, it is projected to shrink further to around 1,200 cubic meters, dangerously close to the mark that will make the country a water-scarce nation." India Today. "Excessive groundwater extraction in India, over 25% of the world's total, has thrown the planet off balance, literally shifting it from its axis, says a new study." Any worse, and this could lead to severe food and water shortage worldwide. News18. Global beverage giants "like Diageo, Carlsberg and Heineken have to maintain factories in Rajasthan," which has among the highest groundwater extraction in India. "The challenges for the brewers in Rajasthan mirror a wider crisis across India, which holds 17% of the world's population but just 4% of its fresh water." Reuters. "India has nearly doubled the amount of rice it exported over the past decade, with shipments crossing 20 million metric tons in the latest fiscal year." "In the rice-basket states of Haryana and Punjab, groundwater was reachable at around 30 feet a decade ago," "But drainage has accelerated in the last five years and borewells must now go between 80 and 200 feet, according to farmers." Reuters. India's cities are sinking by 4 mm a year putting 1.9 million people and more than 13 million buildings in danger. One of the reasons is groundwater extraction. TOI. If AI companies crash, Trumpism may suffer. In which case, they will have little reason to invest in more centers in India. Investment will drop. But, water will be saved.         

Precautions for 2026.

Forewarned is to be forearmed. With 2026 just a few hours away we need reliable intelligence. Michel de Nostradame (December 1503-July 1566) "is best known for his book Les Propheties (published in 1555), a collection of 942 poetic quatrains allegedly predicting future events." wikipedia. He predicted, "Seven months great war, people dead through evil/ Rouen, Evreux the King will not fail." ET. Rouen is a city in northwestern France, in the prefecture of Normandy and the department of Seine-Maritime. wikipedia. The first Evreux were a family of counts "descended from an illegitimate son Richard 1, Duke of Normandy." wikipedia. So, all we have to do is to look for a rich and powerful man in Rouen, whose mother liked a bit of hanky-panky, and who does not resemble the father mentioned in his birth certificate. "The great swarm of bees will rise by the night ambush," clearly refers to drones. Which points to a rich bastard in Rouen who manufactures drones. Vangeliya Pandeva Gushterova, alias Baba Vanga, (3 October 1911-11 August 1996) was a Bulgarian mystic and healer (wikipedia) who predicted a great war and China taking over Taiwan. "Washington does not recognize or have diplomatic relations with the Republic of China (ROC) government in Taipei," and "This makes Taiwan a rare case where Washington has a security partnership with an entity with which it does not have diplomatic relations." brookings.edu. The US and China may decide to engage in a conflict and not a war, like Operation Sindoor in which Indian pilots were instructed not to target Pakistani military installations or aircraft which led to our aircraft being shot down (HT). Baba Vanga also predicted our first contact with alien life, which is already present on the planet, and that a large alien airship will enter earth's atmosphere. So, if you find little green men at your doorstep, do not be alarmed. They are already here. In human disguise. On 1 July 2025, Comet 3I/Atlas was discovered by a telescope in Rio Hurtado in Chile. It does not follow an orbital path around the sun and its hyperbolic trajectory means it has come from outside the solar system. NASA. This is the third interstellar object in our neighborhood after 1I/Oumuamua and 2I/Borisov, leading "Harvard's Avi Loeb to speculate whether it could be extraterrestrial technology." Interesting Engineering. It means ET is spying on us. The Chinese year of the Fire Horse starts on 17 February 2026 and it will be great for Tiger and Dog people, the Goat people will have peace and harmony but the Rat people should wear a goat amulet to "avoid impulsive, high-risk financial decisions." TOI. Valuable advice. Indian astrologers predict strong Mars movement, steady Saturn energy and Jupiter travels through Cancer and Leo. Notably, Aries "will consider getting married very carefully," (better to stay single), Gemini may have problems with neck, arms and sleep (needs new pillow), Virgo's romance may get passionate (contraception advised) and Scorpio may suffer acid reflux (keep antacids handy) TOI. Will 2026 be any better than 2025? Probably not, but now that we know we can arm ourselves with amulets and antacids. Happy New Year.  

Luxury of bottled water.

A few days ago, "The Supreme Court...declined to entertain a PIL (public interest litigation) seeking enforcement of global standards for packaged drinking water, terming it as a fit case of 'luxury litigation' in a country where a large populace lacks access to basic drinking water." TNIE. "People do not have drinking water; the quality of bottled water will come later on," said Chief Justice Surya Kant. "The attitude that just because most Indians are poor, we should not have high standards for human life explains why our roads are dangerous and why trains derail; our standards are low at almost every level." "The poor themselves have higher standards than India has for them. This is why so many of them reject government schools in most states, " and "Some poor and lower-middle-class families spend a considerable portion of their income on sending their kids to private schools," wrote Manu Joseph. Keeping people poor makes them dependent on the government for subsidies. "The population covered by social protection systems has increased from 22% in 2016 to 64.3% in 2025,..data released by statistical ministry showed. TOI. That allows the government to dictate to the people. Beggars, after all, can't be choosers. "For decades, the Indian state has communicated less as a facilitator and more as a scolder-in-chief. All-caps circulars that begin with 'WHEREAS' and end with 'penal consequences'." "Notices that seem designed not to inform, but to unnerve," wrote Partha Sinha. While Mr Joseph is right about using poverty for wretched services, he is mistaken about our demand for privacy when he writes "how a class of people who have no qualms about giving their biometric data to the US government for a mere visit tried to sabotage India's biometric identity project, Aadhaar." Firstly, there are millions of Indians who have never visited the US, and have no wish to, but they cannot avoid living in India. Secondly, only humans have a need for privacy, animals, birds and fish are happily naked  (pexels. com) and perform all biological functions in the open. Human beings are born within walls in hospitals, live their entire lives within walls in homes and travel enclosed in walls in cars, trains or planes (freepik.com). Even destitute refugees, fleeing the civil war in Sudan, have constructed flimsy hovels (istockphoto.com), which will provide little protection from the weather, but do provide privacy. Saying that Indians do not need privacy is saying that Indians are animals. Indeed, humans are animals, in the same group as primates - monkeys and apes. Australian Museum. The problem is that humans have the right to kill other animals, birds and fish. "Every year in the United States, approximately 9 billion 'broiler' chickens are killed for their flesh." (roosterhaus.org). That is 17,000 chickens killed every minute, 300 every second. There are recipes to cook even the deadly poisonous rattlesnake. Insidehook. Equating Indians with animals by denying them privacy is the very reason why potholes claimed 2161 lives in 2023 (TOI) and diarrhoea, which is primarily due to dirty water, kills aound 300,000 children every year (IJCM). Air pollution has made Delhi famous as the most polluted capital city in the world (CNN) but the Union government asserted in Parliament that "there is no conclusive evidence establishing a direct link between higher air pollution levels and lung disease (HT)." Poor people are vote bank (wikipedia). Privacy will provide better services. To all.         

Protecting hydrocarbons.

"Donald Trump's sanctions on Russian crude majors may have the effect of India's oil imports from Russia dropping to a four year low in January 2026." "While the 50% tariffs don't seem to have impacted India's imports of Russian crude, the sanctions on Rosneft and Lukoil announced in October have forced Indian refiners to look for alternative sources." TOI. "In H1 FY26 (April-September), India's crude imports from Russia declined 14% year-on-year to about $23.1 billion." But, "In October 2025, the US emerged as India's fourth-largest crude supplier, overtaking the UAE, with deliveries of about 647,000 bpd." FE. As one of the founders of the Non-Aligned Movement (Britannica), we Indians are experts at balancing the superpowers. As a result, "In the first 10 months of 2025, Russian spirits producers shipped approximately 520 tonnes of spirits, including vodka, gin, whiskey, and liqueurs, worth USD 900,000 to India, this is three times higher in weight and four times higher in monetary terms than the same period last year," wrote Vedomosti. The chemical formula of ethyl alcohol or ethanol, which is consumed for celebration, is C2H5OH. wikipedia. We have just substituted one hydrocarbon for another. We do not take orders from the US. Especially after a few. Speaking of shipping, "India will commission the third indigenous nuclear-powered submarine, INS Aridaman, soon, the Navy Chief said." INS Arihant was the first home-made nuclear submarine under the SSBN project. INS Arighat was the second. SSBN stands for 'ship submersible ballistic nuclear'. This Week. In July, "India and the United Kingdom have signed the Comprehensive Economic and Trade Agreement (CETA), a bilateral free trade agreement marking a major milestone in their long-standing partnership." pib. gov.in. Sadly, the import duty on Scotch will not come down soon. "While import duty will come down from 150% to 75%, it is unlikely to happen until at least the second half of 2035." TOI. To contain their disappointment Indians drank more than 440 million 9-liter cases, a commendable 7% rise in consumption of total beverage alcohol (TBA) during the January-June 2025 period. Within spirits whisky grew 7% to 130 million 9-liter cases, vodka grew 10%, rum 2% and gin 3%. ET. "India and the European Union (EU) reaffirmed their shared ambition to conclude negotiations on the much-awaited free trade by the end of this year." ET. "The EU wants India to lower import duties on cars, wine and spirits to boost trade." India Today. We can look forward to increasing supplies of famous brands and have the submarines to guard them. "All animals are strictly dry, They sinless live and swiftly die. But sinful, ginful, rum-soaked men, Survive for three score years and ten," wrote the late Khushwant Singh. With butter chicken. Bliss.