Governments not for the people.

To win in the elections in November Republicans are resorting to any kind of dirty tactic that they can get away with. States with Republican governments have passed laws to stop early voting because that helps black voters who vote for Democrats and will vote for Obama anyway. Indeed polls show that Romney attracts 0% of black votes. Republicans are also insisting on photo ID cards such as driving licenses which would rule out the poor, the traditional base for Democrats. A vigilante group calling itself True The Vote descends on polling station, ostensibly to check fraud voters, but in reality to bully voters who are likely to vote for Democrats, such as young people, many of whom leave without voting. In March 2012 James Jett, a Clay County clerk in Florida alleged that Republican Congressman Cliff Stearns paid him $25,000 to withdraw from the primary in his favor. Stearns was hoping to draw votes away from his real opponent, State Legislator Steve Oelrich. In one of her shows Rachel Maddow of MSNBC reported that the FBI is talking to one Justin Lamar Sternad who was third in the race for a Democrat primary to chose the candidate against Republican Congressman Dan Rivera. Rivera financed Sternad with $64,000 to upset his real opponent Joe Garcia. If politicians resort to immoral means and intimidation to win elections surely it is not to serve the people. At the very least it is totally undemocratic and therefore undermines their own legitimacy. However, Republicans are not the only ones who are sympathetic to the rich. On 12 December 2009 Obama declared," I did not run for office to be helping a bunch of fat cat bankers on Wall Street." But on 14 December in a meeting with the same bankers he said," My administration is the only thing between you and pitchforks." He did nothing to punish bankers, reduce risky trades or control excessive bonuses. Both Greek and Spanish governments are passing ever increasing austerity budgets, without any regard for the suffering of the people, just to survive within the Euro. Greece is suffering its third year of contraction and has youth unemployment of 50%. The suffering is so acute that mothers have been known to leave their children at orphanages where they will be fed. All this pain would have made sense if there was any hope for the future but every expert says that they will be locked in a cycle of very poor growth, low earning, leading to low tax collection, poor social services and severe poverty for decades. So why are the governments punishing their people? They say that leaving the Euro will lead to collapse of their currencies, hyper inflation and loss of markets. But it maybe because they want to cover up the responsibility of politicians of previous governments who are responsible for the debacle. There is a disconnect between governments and the people they are elected to serve. They have become businesses of exploitation.

Will telecom survive?

Telecom has been the one success story in the past decade. The first round of licenses were given away cheaply to a multitude of companies resulting in fierce competition so that charges were among the cheapest in the world, benefiting subscribers. Today there are 900 million subscribers and even manual laborers carry cell phones. But since the Congress led government came into power in 2004 there have been relentless attacks on the telecom sector. Coalition partner DMK was given the telecom ministry and indulged in rampant corruption in the distribution of 2G licenses, all of which have been cancelled by the Supreme Court. 3G licenses were auctioned off to the highest bidders netting Rs 1 trillion for the government which was promptly wasted on social schemes instead of reducing the fiscal deficit. Our most revered Telecom Minister, Kapil Sibal said," 3G has not delivered because they paid such huge prices for the spectrum and there is no liquidity in the market for them to invest in the infrastructure and the devices to deliver 3G, for which 2G was successful and 3G was not successful." To provide a seamless service companies have resorted to sharing spectrum, in that, a subscriber moving to another circle is switched onto the company which has license for that circle. The revenue is probably shared. The government has now come out with an order forbidding such sharing probably because it wants companies to pay for licenses for every circle. This is not just immoral but plain wrong because companies have every right to share resources. Recently the Australian airlines, Qantas signed a 10 year route sharing deal with Emirates and will shift its regional hub from Singapore to Dubai. Even in telecom you can phone someone who subscribes to a different company and the companies share the price of the call. In an interview with TOI on 27 September, CEO of Vodafone India said," India was by far the biggest market in terms of size and potential but South Africa proved to be financially more profitable." And again,"....we made an investment of Rs 500 billion ( including Rs 116 billion on 3G spectrum acquisition ) in this period, of which the government got Rs 450 billion. Shareholders got nothing." He says," The problem is that people are broke, the industry has a debt of an estimated Rs 2 trillion. So at the moment your balance sheet is stretched and you cannot service your debt. But that reality has not landed with the government, which is a pity." Indeed the government is planning to take advantage of the crime committed by it coalition partner by auctioning off the cancelled 2G licenses. The base price has been set at Rs 140 billion. Companies will be forced to raise call charges hugely impacting the poor. For the first time the number of subscribers has dropped by 20 million. Like leeches politicians are sucking the blood out of people. Unlike leeches their greed is insatiable.

Don't increase their bribe-price.

In 2008 the Congress led government increased salaries of useless civil servants by 80%. However, civil servants also get a handout called Dearness Allowance which was 68% of basic salary. This was increased to 75% and has now been increased to 80% of salary which means that these pampered crooks have seen a 140% increase in their salaries. This has hit the middle class in 2 ways. Firstly, the central government alone employs over 34 million, including public sector companies and the Railways. State governments and municipal corporations employ countless more. This huge rise in expenditure has been met with a savage rise in taxes on everything which has hit the middle class really hard. The second effect of this rise in salaries is that the bribe-price has suddenly rocketed. If a man earns Rs 10,000 per month he will demand Rs 100,000 in bribes. he will be scared and reluctant to demand any more. However, if the same man is paid Rs 100,000 a month he will demand Rs 100 million in bribes because of increased confidence in his own worth. About 15 years back the Delhi government allowed people to convert their dwellings from leasehold to freehold. It was purely voluntary. Those of us who took advantage of the offer at that time had to pay a fee of Rs 60,000 and submit a form with proof of possession of the apartment. The form was in English but was such gibberish that no one could understand what anything meant. At that time a property dealer would charge Rs 5000 to fill and submit the form, of which Rs 2,500 was for inside. After the Commonwealth Games, where a rumored Rs 200 billion was enjoyed by politicians and officials, conversion to freehold has been made compulsory to raise funds for the Congress government of Delhi. The fee has been doubled but now the same property dealer is charging Rs 30,000 of which Rs 15,000 is for inside. A 600% increase in bribe-price. Previously, to obtain a passport in Delhi you filled in a form and stood in a queue for hours to pay the fee and submit your form. Touts would charge Rs 200 to help you submit your form quicker. Today you have to fill a form and submit it online following which you will be allowed to book an appointment to submit your paper form. This is when the fun starts. You have to log in at exactly 6 PM at which time you will be shown available slots on one day only. However, if you click on a slot which is clearly shown as available you will be told that it has been taken and you will not be given a second chance. You will have to log in again by which time all the slots are booked and you will be told to log in the next day. It has been designed to be so frustrating that people have no choice but to ask an agent to book an appointment for them. The agent will charge Rs 1000 of which Rs 500 is for inside, a 5 fold increase in bribe-price. Salaries for waiters always take into account what they will earn from tips. Similarly salaries for civil servant must take bribes into account. Their price must never be increased.

Will they come?

The Congress controlled, freeloading press were hyperventilating over the recent so called reforms announced by our most revered Prime Minister. Fawning articles were already calculating the amount of foreign investments that will flood in. The government decided that foreign retailers, such as Walmart and Tesco, will be allowed majority ownership at 51% in multibrand retail and 100% in single brand retail. Walmart already has a partnership with Bharti Enterprises which runs wholesale cash and carry stores in many states. The new policy will allow it to open stores for the ordinary housewife for her daily shopping. However, there are several problems. 1. Every party, except Congress, has said that they will not allow such stores to open in their states. This leaves just 9 states where such stores can open. However, even here there may be protests by local shopkeepers who will be afraid of losing business. Will the Congress claim that all such protests are being organised by the dreaded " Foreign hand " and slap sedition charges against the protesters, as they have done to protesters against the Kudankulum nuclear power plant in Tamil Nadu? 2. Foreign retailers typically have huge stores over 100,000 sq feet. Land prices in India have risen over 1000% since 2002. Apartments of 5000 sq feet are being sold for Rs 25 crores or about $5 million in Gurgaon, some 15 km from Delhi. At these prices one could buy a nice apartment in New York. So where will they get land to build their stores? It is impossible to drive around any major city. Roads are jammed and there are toll booths everywhere. Will people want to spend 2 hours driving to and from one of these stores? 3. Foreign retailers are required to invest at least $100 million of which $50 million has to be spent on back end infrastructure. What is not clear is whether they will be allowed to count the spending on buying land for the stores and spending on electricity generators in that $50 million. 4. Retailers will have to source about 30% from local small scale industries. It is hard to imagine our friendly neighborhood cobbler stitching on a Gucci label on a handbag that he has just stitched together. Already Adidas, Benetton and Levis have announced that they will be reducing the number of stores in India. 5. Transporting goods between states is a nightmare because of something called octroi. All trucks have to stop at the border and pay taxes, which in some states like UP, can be very high. It is like paying customs duty except that rates can be exorbitant because it is dependent on state governments. 6. In July this year farmers in Britain protested when large supermarket chains decided to pay 2p less per liter of milk. What if the retailers force farmers to accept less for their produce or decide to import from abroad if prices in India are too high? Policies should be for the good of the country and not for the cynical reason of winning elections. Sadly politicians are our worst enemies.

What to do with Iran?

Mr Obama's speech to the UN General Assembly was the usual blah blah about America being for democracy, peace and human rights, never mind the genocides in Japan, Korea Vietnam, Afghanistan and Iraq. Never mind also the use of nuclear bombs, the only country to have done so, napalm, dioxin and depleted uranium which caused not just massive loss of life but cancer and deformed babies for generations. However the most interesting part was what he had to say about Iran. He condemned Iran for supporting Bashar al Assad of Syria, violating the human rights of its own people, for supporting terrorism and for its continued effort to build a nuclear warhead. Iran has always denied that it is interested building a nuke but there is no doubt that it is going full speed in its attempt. Israel is rightly alarmed at the prospect of an Iran with nuclear weapons since it already has missiles capable of reaching Israel. The Sunni Arabs are equally alarmed at the prospect, especially since most of them are situated just across the Persian Gulf from Iran. Israeli Prime Minister, Binyamin Netanyahu has been calling for a red line on Iran beyond which the US will join Israel in bombing Iran. Israel knows that it cannot do the job alone. It has to fly over either Saudi Arabia or Iraq to get to Iran which means it will need refuelling. Iraq is controlled by Shiites who will surely try to shoot down Israeli planes. Although the Saudi King is supposed to have compared Iran to a dangerous snake whose head should be cut off he cannot overtly support an Israeli attack on Iran because his people will revolt. Israel has been attacking Iranian nuclear facilities with computer viruses. The Stuxnet worm was detected in June 2010. It caused the uranium centrifuges to spin out of control. The Flame virus, found in May 2012 was a sophisticated malware which cause massive loss of data. The AC/DC virus in July 2012 shut down Iranian computers and made them play Thunderstruck by a group called AC/DC. No doubt the US has been party to these virus attacks. However, Obama cannot be tied down to a red line. This would cause an escalation of tensions until war became inevitable. The US knows it cannot just go and bomb the nuclear sites. First it has to take out the Iranian air force, its anti aircraft missiles and other missiles which can be used on US ships in the Gulf. The Fordow facility near Qom is partly burrowed into a mountain while the one in Natanz in 8 meters underground protected by a 2.5 meter thick concrete wall which is protected by another concrete wall. According to experts these sites cannot be fully destroyed and will be functional within 2 years. The only thing that will completely wipe out these sites is a small nuke. So, is Israel trying to push the US down that route? Is this why the US is so reluctant? What happens if a computer virus results in an explosion with loss of life and nuclear contamination? Brace for oil at$200 a barrel.

The Foreign Hand.

It is said that Mrs Indira Gandhi used to blame a " Foreign Hand " for anything that went wrong in India during her time as Prime Minister. It seems that the Hand did not disappear with her death but has been lurking unseen all this time to strike against her grandson, Mr Rahul Gandhi. One Mr Kishore Samrite filed a case in front of the Allahabad High Court in 2011 alleging Mr Gandhi was involved in the abduction and rape of one Sukanya Devi in Amethi on 6 December 2006. The High Court asked the Criminal Bureau of Investigation to take on the case, dismissed the allegations and imposed a fine of Rs 5 million on Mr Samrite. Mr Samrite filed a review petition in the Supreme Court which stayed the order of the High Court. Yesterday the CBI told the Supreme Court that a " Foreign Hand " was involved in the case. Damn thing keeps turning up when you least expect it. Just when we are about to let foreign hands take control of our airlines and the retail business. The CBI says that the woman named Sukanya Devi never existed. " She is non-existent, her address is fictitious and there is no record whatsoever with the UP government or local bodies." Hang on. Sukanya means " beautiful girl " and is a very common name in India and surely we cannot trust government record keeping. The CBI claims to have found the owners of the websites located abroad within 25 days and asked them for details of IP addresses but were told to " come through proper legal channel " which means they were told to push off. And to think that the same CBI registered a case against Quattrochhi in 1990 and could find nothing against him till 2011 when they asked the Supreme Court to drop his case. Now that was a real Foreign Hand. Mind you the boys rushed around all over the world from Kuala Lumpur to Buenos Aires to the millionaire playground of St Kitts blowing Rs 1 billion in the process. Hope they enjoyed themselves. The clinching evidence apparently came from the accuser himself. " During questioning, Samrite said the litigation was funded. He has given the CBI details of who has funded the litigation. The investigating officer recovered chits about money deposited by him from the funders. The money was used to pay lawyers," the CBI said. Pity the CBI could not find anything against the pedophile Rathore who escaped after a paltry 6 months in jail. We have to remember that Mr Rahul Gandhi is from The Family and the heir apparent for the Prime Minister's chair after the pretender has been pensioned off. And you do not take on anyone from The Family or you will have the entire Congress after you. The BJP may bleat that CBI stands for the Congress Bureau of Investigation but they dared not touch Bofors or Union Carbide when they were in power for 6 years. So was there a conspiracy against Mr Rahul Gandhi? If so who was behind it? Who does the Foreign Hand belong to? Is there a body connected to it? How boring it would be without conspiracies.

Withholding tax withholds growth.

It is astonishing how ignorant we Indians really are about how we are robbed of our money in the form of taxes in ways which are kept hidden from us. One is called TDS or, Tax Deduction at Source which forces employers to deduct income tax from employees before paying them and depositing the money with the government. Banks are required to deduct taxes on interest accrued on fixed deposits before paying out. The other is called withholding tax which forces a person buying a property to deduct tax from the price and deposit it with tax authorities or else he will not be allowed to register the property in his name. One such law required companies borrowing money in foreign countries to withhold 20% tax on the interest paid. Say a company borrowed $100 million at 5% interest from a US bank the company would need to pay $5 million in interest every year. Under the law the company was required to withhold 20% ( just reduced to 5% ) of this amount or $1 million and pay it to the government. Naturally the US bank lending the money would not want to be paid less than what was due so it would raise the interest rate to 6% so that it received the full interest even after payment of tax in India. This naturally raised borrowing cost of companies which, in turn, would be passed on to Indian consumers who would end up paying more for their purchases. In effect it was a disguised tax on Indians. In every country companies are allowed tax relief on interest on loans but not here. The government's argument is that the US bank is making profits out of business conducted in India so it is liable to pay tax. That is totally untrue. The transaction with the bank is taking place in the US and the interest earned would be taxed in that country. The bank has nothing to do with what the company is doing and, in fact, would demand to be paid even if the company was making a loss. In May 2007 Vodafone, a British company, bought Hutch, an Indian telecom company, for $11.1 billion from Hutchison Whampoa based in Hong Kong. The deal was conducted in the Cayman Islands by the Dutch subsidiary of Vodafone. Our government demanded $2.5 billion from Vodafone as withholding tax and the matter ended up in the Supreme Court. In January of this year the Supreme Court opined that Vodafone was not liable for any tax as the entire transaction was outside the jurisdiction of the Indian government. Politicians being thugs they passed a law to retroactively review every transaction going back to 1960 and tax where they feel like. Naturally all foreign investments dried up and the rupee dived further. So they freed up interest paid on Non Resident deposits to attract dollars from Indians living abroad. Banks are paying 9.25% on 2 year fixed deposits, which is tax free. So NRIs can borrow in the US at 1% and earn 9.25% without paying any tax. A stupid solution to a bad law. Taxes are a violent robbery of the people.

Are we so stupid?

Our most revered Prime Minister has been very voluble lately in making excuses about raising the price of diesel by 14% which will naturally raise prices of all basic commodities. Already CPI is at 10.03% and food inflation is over 20%. " I promise you that I will do everything necessary to put our country back on the path of high and inclusive growth," he said. The country has every right to ask what the hell you were doing since 2004 when you took over a strong economy and have ruined it since then. The perfect time to adjust the price of fuel would have been in 2007 when the inflation rate was 5%, oil was $64.20 a barrel and the rupee was just 39.33 to the dollar. That would have been the perfect time to raise the price of diesel and lower the price of petrol by cutting taxes so that both would cost the same and there would be no adulteration of petrol with diesel. But that was the time when you were busy collecting tax money so that you could bribe the electorate in 2008 to win the general election in 2009. You raised the salaries of useless civil servants by 80%, recruited 700,000 teachers for government schools who do not attend classes, forgave all loans of farmers and started the MNREGA scheme wasting many trillions of taxpayer money. Today your government is bankrupt, inflation is out of control, oil is at $100 a barrel and the rupee is 54.47 to the dollar and you talk about doing everything necessary. " The time has come to take hard decisions," the Prime Minister added. Hard for whom? Certainly not for criminal politicians who have made tens of billions of rupees from the countless scams that you have willfully ignored, who travel on foreign junkets with sons in law and rush of to the US for treatment by white super-Brahmins while planning to promote lower caste people in government jobs. It is shocking that you claim that the crisis is nearly as bad as in 1991 when you are the architect of the present crisis and you want to use that as an excuse. You say that money does not grow on trees. Really? Why is the Congress in Gujarat promising to give land and money for building houses to poor people to get votes for the assembly elections? Whose money are they going to use? How dare they use taxpayer money as bribes to win an election? But there is nothing you can say, can you? Because you have done much worse in 2008 and are planning another fiscal crime even now. You have increased taxes on everything which has added to inflation and hampered growth. You badly need money because you are planning to pass a Food Security bill before elections in 2014 which will add another Rs 1 trillion to expenses. Suddenly we learn that there is a withholding tax of 20% on foreign borrowing which is being reduced to 5%. No wonder industrialists have been begging for a reduction in interest rates. Who in the world taxes a loan? In civilised nations companies get tax deductions on interest on loans. That is why their businesses prosper. You ask us to trust you. Do you really think that we are so stupid? Sadly most Indians are.

A pretense of shyness.

The shyness of Catherine, Duchess of Cambridge, aka Kate Middleton, wife of Prince William who is the eldest son of Charles who is the eldest son of the Queen, is baffling. She is a celebrity, famous for doing nothing. Not particularly beautiful, a comely lass would describe her. We do not know her educational qualifications or if she has any work experience. Her curriculum vitae would probably have just one line - Married a Prince. She clearly relishes her status as a celebrity as her frequent changes of clothes would seem to suggest. On a recent trip to the far east she used 18 outfits in 9 days at a cost of 13000 pounds. Unfortunately her trip was marred by publication of her topless pictures in a French magazine, Closer. The pictures were taken with a long distance lens while she was sunbathing on the patio of a French chateau owned by Viscount Linley, son of Margaret, the Queen's sister. The couple were apparently incensed by such a sneaky invasion of their privacy and filed a case in a French court. The court fined the magazine 2500 Euros and ordered Closer to turnover the original photos to the couple. This naturally made the photos famous all over the world and they were printed over 26 pages by the Italian magazine Chi and then on the front page of the Greek newspaper Eleftheros Typos. The Swedish magazine, Se og Hor has already printed them and its sister magazine in Denmark is planning to do the same. It is hard to imagine that the couple did not know that suppressing topless photos of a celebrity is impossible in today's voyeuristic world. Today's cameras do not have films that can be destroyed by destroying the negatives. The pictures would be on a memory card and would have been instantly downloaded onto a computer hard drive so that any number of copies can be made in the future. In 1971, when there were no computers or digital cameras, a paparazzo, Settinio Garritana heard that Jacqueline Kennedy, then married to Aristotle Onassis after the assassination of President Kennedy, used to sunbathe nude on a beach of Skorpios island, a private island owned by Onassis. He dressed as a gardener, rowed out to the island and hid in the undergrowth and took fully naked pictures of Jackie O, as she was known then. Today no one can even imagine how famous she was as First Lady, when her marriage was described as Camelot, and the sympathy for her becoming a widow at such a young age. Every editor refused to publish her naked pictures until they appeared in a 1972 edition of Italy's Playmen and then in a girlie magazine, Hustler in 1975. Prince William is said to be determined that his wife will not be hounded by paparazzos as his mother, Princess Diana was. If so he should ask his wife to do some meaningful job and dress in ordinary clothes unless she is attending an official function. If you are famous for being famous you will be hounded. Especially if your behavior generates gossip.

Everlasting growth.

Like everlasting life everlasting growth is an illusion. Unfortunately, politicians and business leaders seem incapable of understanding this. Or maybe they do not want to. China has been growing at over 10% for 2 decades but is now beginning to slow down although a growth rate of 7.5% is still enormous. China's growth was due to a one party state which could enforce a one child policy and grab land at will to set up factories, housing and infrastructure projects. Vast numbers of women could join the workforce, because they were not hampered by having to bear many children, which kept labor costs down and China could grow at 10% with an average inflation rate of 4.27% from 1994-2012. Inflation reached 6.5% in July last year but the government acted quickly to bring it down to 1.8% today. In 2008 the government reacted to the global slowdown by stimulating the economy but this resulted in a property price bubble and a rise of inflation. The Chinese see high growth as a means of dragging people out of poverty but are afraid of inflation which hurts the poor. So they are trying to stimulate the economy cautiously. They have brought down the interest rate twice already and have announced an investment of $150 billion in infrastructure projects. The Chinese GDP is at $12 trillion and a 7% growth means $840 billion but still they are not satisfied. The larger the economy grows the more will be its effect on world commodity prices which will rise, resulting in increased costs. Workers are demanding higher wages as they see industrialists getting richer. In 2010 there was a spate of suicides at Foxconn, which makes the IPad among other things, forcing the company to increase wages and overtime payments. This will gradually raise labor costs and as the population becomes older so the reduced numbers of workers will mean still higher salaries. At some point growth rates will have to slow to 2-3% as in developed countries. Indian politicians are incapable of learning because their sole effort is to win elections because with power comes the ability to loot. Instead of concentrating on keeping inflation down by reducing expenditure and gradually reducing subsidies, while spending on infrastructure, they have been throwing money on social schemes apparently to help the poor. Now they are unable to control deficit or inflation, which hurts the poor the most. Fiscal deficit will be 6% this year, much higher than 5.1% forecast in the budget. WPI has gone up in July to 7.5% and CPI is 10.03%. The stupid Private Public Partnership results in increased costs and high taxes, to reduce deficit, results in high prices. People do not drive because of frequent tolls on highways, avoid flying because of rising ticket prices and now the number of telephone users is falling. To make profits companies will be forced to increase prices even further resulting in still fewer consumers. Reduce population, reduce taxes and reduce expense. It is easy. Sadly we have a World Famous Economist in charge who has a growth fetish. And there is no way to get rid of him till 2014.

Politics of the Apes.

Politicians are increasingly behaving like apes, sitting on either side of the aisle making faces at each other. In the US Republicans refused to pass any bill proposed by President Obama including raising the debt ceiling and the jobs bill. Their calculation was to block any improvement in the economy and then blame the suffering of the people on Obama, hoping to gain electoral advantage. As cynical a betrayal of their duty to voters as we are likely to see. In Britain a Conservative led cabinet of " posh boys " under Prime Minister, David Cameron is stubbornly pursuing an austerity budget by cutting benefits to the needy, privatising the NHS and raising taxes resulting in a contraction of the economy. Seems that they are following the mantra of TINA ( There Is No Alternative ) which was the teaching of Margaret Thatcher, a cult figure in the Tory Party. In India the Parliament is a cacophony of some 38 parties, most of which we never knew existed and have one or 2 seats out of total of 242. The Indian National Congress is the largest party with 206 seats followed by the BJP with 114 seats. After elections in 2009 the Congress formed an alliance of 10 parties of which Trinamul Congress has 19, DMK 18, NCP 9 RLD 5 and the J & K National Conference has 3. The Congress had a comfortable majority with other smaller parties. Now Trinamul says it will walk out of the government because Mamata Bannerjee is against the latest rise in the price of diesel and allowing foreign retailers to open stores in India. While Bannerjee is known to be flighty, and could do with some therapy, she is not known to be personally corrupt, which cannot be said of the leaders of other parties. She has done nothing for Bengal since her election last year and maybe calculating that early general elections will be to her advantage before support for her party erodes altogether. Or this maybe her last throw of the dice to force Congress to forgive debts of up to Rs 300 billion. She has threatened to withdraw support previously only to reverse her decision, to be ridiculed by Congress MPs. After the fiasco of the election of President, Congress MP, Adhir Choudhury said," Now Didi is crying after her loss of face as also after losing the political battle. And the Left Front is laughing." Now the Congress has to depend on the support of SP led by Mr Mulayam Singh Yadav, which has 23 seats, or BSP led by Ms Mayawati which has 21 seats. Of these two, Ms Mayawati would be reluctant to have an early general election because of her party's recent thrashing in UP assembly polls. However, we, the citizens are not privy to the machinations going on behind closed doors. We know that some parties have made hundreds of billions of rupees from all the scams which have been discovered so there could well be sharing of the booty. What is certain is that anything the politicians do will be in their self interest and not in the interest of the people. Humans ruled by apes. Sad.

Right, even if proven wrong.

Research has shown that people do not change their views if presented with both sides of an argument. In fact their views become even more entrenched because they adopt any argument supporting their beliefs while rejecting those against. In the US, Mitt Romney has had to do some explaining for comments he made at a fund raiser in Boca Raton in May when he said," There are 47% of the people who will vote for the president no matter what. These are people who pay no tax." Which is not true because the vast majority of Americans pay federal taxes, including income tax and payroll tax for Social Security and Medicare, and state, local and sales taxes. But Republican voters are convinced that paying tax to the government goes to an army of useless bums who do nothing except sit around for handouts while Democrats are convinced that Republicans are a party of heartless rich people who want to enjoy all the facilities that the US has to offer while paying no taxes. It is only worse where religion is concerned. Fanatics believe that only their religion is the only true word of God which gives them the right to kill anyone who criticises them while reserving the right to abuse others. A trailer of a film called the Innocence of Muslims on Youtube has resulted in riots in Muslim countries. US embassies have been attacked and the US Ambassador to Libya, Christopher Stevens and 3 embassy staff were killed in Benghazi. The trailer was about 14 minutes long, extremely badly made and very offensive. Direction, acting and sound recording were poor. Whether there was any truth in it we do not know but, even if there was, it was wildly exaggerated. The people in the middle east do not understand why the film is not banned by the US government and the maker arrested because they have no concept of free speech in their countries. Freedom of speech is the First Amendment in the US constitution and cannot be touched by anyone. Governments in these countries want an international law making it a crime to insult Islam or their Prophet. But what about Muslims insulting other religions? In an article in the New York Times Thomas Freedman has given translations of some of the things said by prominent people in Muslim countries. Hasan Rahimpur Ajghadi of the Iranian Supreme Council for Cultural Revolution said that Christianity is " a reeking corpse on which you have to constantly pour eau de cologne and perfume, and wash it in order to keep it clean." The Muslim Brotherhood web page says that Jews are " the descendants of Apes and Pigs." We must remember that pigs are forbidden for Jews just as they are for Muslims. Egyptian cleric Mazen al-Sirsawi said," If Allah had not created the Shiites as human beings they would have been donkeys." If you routinely address others as Zionist pigs, infidels or kafirs then you should not object if they use names for you. But of course everyone is convinced that only he is right. And therein lies the problem.

Genetically modified or genetic murder.

While voting in the presidential elections on 6 November Californians will also be voting on Proposition 37 to decide on " Mandatory Labeling of Genetically Engineered Food Initiative ".For the first time one state in the US is asking its citizens whether they want to know what they are eating. Support for the measure is at 65% with 20% opposed. Naturally firms which manufacture these Frankenfoods, as they are known in Europe, led by Monsanto, are spending heavily on advertising against the initiative. They claim that these foods are safe because people have already been eating them without ill effects, which is absolutely false. People are eating a mixture of organically produced foods and genetically modified ones without knowing which is which. To really know if they are safe they should be tested like drugs in that one group of, say, 10,000 volunteers will eat only genetic foods while another will eat only organic ones. The study will be ongoing so that results maybe studied every 5 years to see if there are any differences in types of diseases between the 2 groups. In India Bt cotton is said to have improved yields because of resistance to boll worm. Bt derives from Bacillus thuringiensis, a bacteria found commonly living in the soil. It produces crystalline insecticidal proteins and its spores have been used as pesticide since 1920s. A gene from this bacteria was incorporated into cotton DNA so that the plant produced those proteins making it resistant to boll worm. So far so good. We do not eat cotton and if vegetables are washed before eating then the bacteria is washed away. However the Bt gene has also been incorporated into potato, corn and into aubergines, known as Bt brinjal in India. This is a different matter altogether because now the toxins produced by Bt cannot be washed away and will be ingested with the vegetable. People in India eat a lot of vegetables and half the population is vegetarian anyway. We have no way of knowing what effect these toxins will have on the human body if ingested over a long period of time. Will they cause cancer, infertility or birth defects, for example? Legionella is also ubiquitous in soil and stagnant water. Normally it is harmless but when inhaled from air conditioning ducts, especially in those with low immunity, it causes pneumonia which is frequently fatal. These genetically modified crops have another problem. They incorporate a " terminator " gene which makes them incapable of producing seeds so that farmers have to buy seeds every year. So if one crop is destroyed by drought or floods, as frequently happens in India, farmers incur heavy losses. This gene was discovered by the US Defense department and passed on to Monsanto. If we switch to genetically modified foods supplied by these foreign firms they will be in control of our food production and in theory could control our government. The name Frankenfoods is well deserved. They are lethal for us.

The reforms mirage.

The Congress supporting press has gone delirious over the " big bang " reforms announced by the Congress controlled government last week. The World Famous Economist is a " courageous reformer " who has unleashed a " political masterstroke ", we are told. So what are the reforms that have caused such cacophony? The price of diesel has been increased by Rs 5. However, at Rs 50/lit it is still cheaper than in the US where it is around Rs 60/lit. This will add 1% to inflation but was necessary and should have been done in 2007-8 when the rupee was strong. But with elections in 2009 it was shelved. To be really effective petrol price should be reduced by the same extent, by reducing taxes on petrol, as the rise in diesel. The attempt should be to approximate the prices of both so that there is no temptation to adulterate petrol with diesel or to buy cars with diesel engines. The second measure is that 51% FDI in multi-brand retail will be permitted. This will allow companies like Walmart and Tesco to open branches in India. The idea is that these giant companies with enormous cash reserves will invest in infrastructure such as cold stores, cutting down on food waste, and benefit farmers by sourcing produce directly from them and cutting out middlemen. In reality they are likely to be cautious because it takes years to set up the supply chain and elections are due in 2014 which might see a change of government. At present only the states with Congress governments will want to implement this measure so we will see how successful they are. In single-brand retail the government allows 100% ownership and has dropped its insistence on sourcing at least 30% of products locally from Small Scale Industries. The wording has been changed to " preferably from MSMEs ", but who is to decide how much is preferable. Naturally foreign companies are suspicious. Swedish home furnishings maker IKEA, which wants to set up 25 stores at a cost of 1.5 billion Euros or Rs 105 billion, has said," We are positive to the development and remain hopeful that we will soon be able to set up our first store in the country, subject to 100% approval of our application to the Government of India." That is diplomatic for," We do not trust you at all after what you did with GAAR so we want cast iron guarantees that you will not change the rules after you have trapped us into investing all that amount of money." The third measure is to allow foreign investment in our airlines. This is perhaps the most stupid. Who will want to invest in businesses making colossal losses with no hope of becoming profitable because the major share of ticket price goes to the government in taxes? The IATA has already said," Allowing foreign direct investment by global airlines is not a panacea. The critical problems of a high cost environment, insufficient infrastructure and crippling taxes must also be addressed...." The press is acting as Congress agent for the election in Gujarat. 2014 is still very far. Plenty of time for the mirage to disappear.

Rent-seeking.

Rent-seeking is described as obtaining wealth without creating any wealth. This can be illegal as in refusing to perform a service without payment of bribes which is what the civil service in India does everyday. Or it can be giving away natural resources without conditions to friends or relatives who then sell them for windfall profits. This occurred in the granting of 2G licenses in telecom and giving away coal mines to people with absolutely no experience of mining, for example gutka makers and media persons. This behavior leads to some people becoming extremely wealthy without creating any wealth for the country and leads to waste and inflation. But the most common, perhaps the oldest and insidious form of rent-seeking is perfectly legal and is practiced in every country in the world. It is of course seeking rent for land or a dwelling. Human beings need shelter from the elements and to protect our possessions from thieves. Everyone therefore needs to live in a dwelling with a roof, 4 walls and doors which can be locked. However, with land prices reaching astronomical levels it is not possible for most people to buy their own dwellings. People are therefore forced to rent some form of shelter depending on their earning power. In the west residences are bought and sold in a transparent manner so that the actual price paid is on record. That is because stamp duty is very low, generally 1%, and there is no capital gains tax on selling an apartment or house which is the main residence of the seller. In India stamp duty ranges from 6-12% depending on which state you live in and capital gains tax varies from 10-20% depending on how long you have used your residence. Long term capital gains maybe saved if you invest all the money in another property within 3 years. With property prices in tens of millions tax incurred can be very heavy so people pay half of any price in cash, also called black money, so that they pay tax only on the amount paid by cheque. Property brokers charge 2% from both buyers and sellers which is always paid in cash. The entire earnings of property dealers are in black and the only avenue of investing so much cash is in property. Because most people have no access to black money the property market is driven mainly by speculators, money launderers, politicians and civil servants. The prices therefore keep rocketing upwards beyond the reach of 90% of people. These are forced to live in rented accommodation. There is no law as to what facilities the landlord has to provide and how much he can charge. Anyone lucky to own a property rents out a portion for the highest rent possible and increases this by 10% every year. If half of your salary goes in paying rent it is impossible to save enough to buy your own home. This is therefore the primary cause for poverty. So why don't the politicians bring down taxes and drive down property prices? Then where will they invest their black money? Rent-seeking is why they entered politics in the first place.

Double talk.

Our most revered HRD Minister, Kapil Sibal, reputed to have defended Dawood Ibrahim, the feared smuggler and terrorist who is hiding in Pakistan, has attacked the Comptroller and Accountant General in an article titled " Can't Have Multiple Executives ". The subtitle reads " CAG policy prescriptions have triggered a constitutional crisis " Being a lawyer Mr Sibal is master of double talk so we have to forgive his colored rendition of facts. In its report CAG has pointed out that the Coal Ministry could have earned Rs 1.86 trillion by auctioning them instead of giving them away. At no time did it allege any wrongdoing or contemplate complaining to the police. Being the accountants for the people CAG fulfilled its function of valuing our resources. Very properly CAG presented its report to the Parliamentary Accounts Committee and it was the opposition that brought in the CBI to investigate. The CAG made a similar report on distribution of spectrum for 2G which was amply supported by the Supreme Court which cancelled all 126 licenses. It also brought the sordid Radia tapes into the open, which the government has quietly destroyed. Mr Sibal writes, " Whether or not a particular natural resource is to be auctioned is not for the CAG to decide." Absolutely. The CAG never asked for such powers. It merely adds figures based on market price of coal and how much windfall profit each company made. Why is it that most of those blocks are still not functioning and we are having to import coal? Perhaps Mr Sibal has forgotten that Arthur Andersen, one of the big five accounting firms in the world, surrendered its licenses over Enron or the role of PWG in not spotting Satyam being looted by Ramalinga Raju. We understand that natural resources maybe distributed cheaply to keep cost of electricity low so as to help people and industry but when licenses are sold on for huge profits then we have every right to question the method. But the main problem is the absolute loss of trust in politicians, especially the Congress. As early as 1948 there were questions about purchase of jeeps from England by Krishna Menon. Asked to look into improving governance Mr AD Gorwala, an eminent civil servant reported in 1951," One, quite a few of Nehru's ministers were corrupt and this was common knowledge. Two, even a highly responsible civil servant in an official report as early as 1951 maintained that government went out of its way to shield ministers." Then there was the Mundra scandal in 1956 with TT Krishnamachari as Finance Minister who resigned but was brought back by Nehru in 1964. Sukhram is still roaming around as is Sajjan Kumar. The Congress has been embroiled in corruption since 1947 and is seen as the most efficient crime syndicate in the world because of its control of the investigating agencies and the support of a freeloading press. For the first time someone is putting a number on the mind boggling amounts being looted. Long live the CAG.

Ban all citizens.

Politicians in India, especially of the Congress ilk, love to ban things. Perhaps it gives them a sense of power and reminds citizens to stay in their place. Books, from Lady Chatterley's Lover to Satanic Verses, have been banned because someone decided that people were so infantile that their minds maybe corrupted. Mostly without reading any of them, of course. Girls dancing in Chandni bars in Mumbai were banned to save them from lecherous males so many of them were forced into prostitution. Mumbai has recently banned all strikes with powers to imprison anyone daring to withdraw labor. The monsoon session of the Parliament was a washout with no work done. But perhaps that was a good thing. Portable ultrasound machines have been banned in Delhi to stop abortion of female fetuses. Sex discrimination is only possible at around 12 weeks of pregnancy when genitals are visible. Portable machines are required in very early pregnancy to exclude tubal pregnancy, which is a life threatening condition, or to localise the tiny fetus so that the uterus in not perforated. So women's lives are being risked to save unborn girls. But who cares? The Congress has tried to ban protests by killing protesters. Last year one woman died when she was severely beaten up by Delhi Police while she was asleep in the early hours of 4 June. She was protesting against corruption in government. Last Monday a protester was shot dead in Chennai while protesting against the Kudankulum nuclear power plant. Hundreds have been arrested and charged with sedition. Local villagers are afraid of a Fukushima type meltdown. Being illiterate they have probably not heard of Chernobyl or Three Mile Island. Sedition is a very handy law enacted by the British to keep pesky natives under control. The Congress is just as foreign. Serious attempts have been made to ban cartoons. School textbooks have already been cleansed and Aseem Trivedi was arrested in Mumbai for drawing a cartoon showing the Parliament as a water closet. Silly boy did not know that Parliament is the " light pillar of democracy ". Internet and social media would have been banned by now but were saved because of criticism by foreign diplomats. The enormous chorus of protest at home was irrelevant because only the middle class can afford computers so who cares? The half naked aam aadmi is the real " vote bank ". Finally, The Independent, Time Magazine and The Washington Post would have been banned for daring to criticise our most revered Prime Minister. Sadly these foreigners refused to be banned. The Independent asked," Manmohan Singh - India's Saviour or Sonia's poodle ." Time Magazine labeled him " The Underachiever " while The Washington Post thought that he is a " dithering, ineffectual bureaucrat presiding over a deeply corrupt government ". If they could our politicians would have banned all citizens. Just vote every 5 years and then shut your mouths. Parliament is " supreme ".

An occupying force.

Taxation is a form of oppression, exploitation and extortion legitimised by so called democracy. Some taxes are necessary to pay the salaries of armed forces, police and fire departments but most of our money is wasted on criminal politicians and thieving civil servants. In the US politicians, especially Republicans, are committed to low taxes but in India there is a conspiracy of silence among all politicians to tax the people into poverty. There is a deafening clamor for low interest rates which, according to an article in the New York Times, is an insidious form of taxation. Low interest rate helps the government most of all because it is the largest borrower. Our government borrows Rs 6 trillion a year and a 1% drop in interest rate means a saving of Rs 60 billion. However low interest rate means less interest on savings. In the US interest rate is 0.5% but inflation is 2.5% which means that savings lose 2% more in value than interest earned. In China the government forces banks to keep interest rate low so people invest in properties to get real returns, leading to a property bubble. In India property prices went up by over 1000% from 2002 to 2011 and have increased by 10% in the first quarter of this fiscal. Gold is hitting record levels everyday even as the cost has zoomed to Rs 32,328/10gm. Gold import costs $60 billion/year adding to the Current Account Deficit. So, the government is making us pay in lost savings what it saves in interest payments, which is a tax on savers. Recently the scoundrels have thought up a new wheeze to add to our burden. Politicians are contemplating a law to force men to pay their wives for housework. As Rupa Subramanya pointed out in wsj.com how do you calculate the value of housework. A woman who has stopped working to look after babies can point to a loss of salary but a woman who has never worked cannot point to any loss of income. Actually this is an absolute lie because men are being prevented from investing in their wives by our tax laws. For instance, a rich man, who is paying income tax at the highest rate, buys an apartment in his wife's name and rents it out. If the wife is allowed to show the rent as her income then the first Rs 190,000 will not attract any income tax after which the rate will be 10% up to Rs 500,000, 20% up to Rs 800,000 and 30% on income above that. This means that the man saves a lot of money on tax by shifting his savings to his wife. For the woman becoming a taxpayer will entitle her to bank loans for further investments and, in case the marriage breaks up, she does not have to go to court to beg for maintenance. But our tax laws will not allow that. Instead the rent will be clubbed with the man's income and taxed at 30%. So insatiable is the greed of these villains that they devise ever devious laws to squeeze money out of hapless citizens. So, to pretend sympathy for housewives is the most shameless hypocrisy imaginable. Ours is not a government for the people but a rapacious occupying force.

Foreign policy boomerang.

Yesterday an angry mob entered the US embassy in Cairo, tore down the US flag and burnt it. Another mob in Benghazi in Libya overwhelmed the guards of the US consulate and set fire to it, killing an American diplomat. They replaced the US flag with a black one with an Islamic message on it. Witnesses reported that the mob used AK47 guns and RPGs in their attack. This rage was triggered by a film made by an Israeli filmmaker, Sam Bacile in California called Innocence of Muslims. A trailer was uploaded onto Youtube, parts of which were translated into Arabic and circulated on the internet. Another film titled Islam - the Untold Story made by Tim Holland in Britain was withdrawn by Channel Four after death threats against the producer. The film had been shown once earlier. Judaism, Christianity and Islam claim to worship the same God, the God of Abraham. Strangely, these one-God fellows have been killing each other since the beginning and will continue to do so. Yet all of them are agreed that Hinduism is evil and Hindus should be exterminated for the good of their souls when we do not convert and hence have never killed anyone in the name of God. We do claim the right to self defense but even that is denied us in India. Secondly, the incidents prove what we have been saying for a long time. A revolution must always be brought about by the people themselves. Other nations must never interfere to bring about regime change. The Russians paid a heavy price in Afghanistan, the US left a mess in Iraq, which has made Iran stronger, and Libya is a fragmented country controlled by heavily armed militias. The guns and RPGs used to kill the American diplomat yesterday may well have been supplied by the US or NATO. In Egypt the fall of the Mubarak regime was engineered by Egyptians themselves, followed by peaceful elections and a stable government. So, even though the mob was angry in Cairo they were content with burning the US flag and no weapons were used. Finally, outside interference sharply increases the number of innocent victims of any revolution. About one thousand people died in Egypt while 30,000 were killed by NATO in Libya. In Syria more than 10,000 have already died and there is no sign of an end to the fighting. The Norwegian General, Robert Mood, who led the 400 strong UN monitoring mission in Syria till 2 months ago, said yesterday that foreign interference is helping to prolong the conflict. He said," Anyone feeding the violence ( in Syria ) with money or weapons should consider very carefully whether this brings us closer, or further away from less violence and more dialogue. The international community may actually prolong the terrible suffering for the Syrian people." Dr Shakeel Afridi, who helped kill Osama bin Laden, said 2 days back that the ISI told him," The Americans are our worst enemies, worse than the Indians." US foreign policy has repeatedly boomeranged on the Americans. Will they never learn?

The constitution belongs to us.

Aseem Trivedi was arrested in Mumbai on 9 September on a charge of sedition and has been remanded in custody. His crime? He drew cartoons against corruption. This in a country where our esteemed judges routinely give " anticipatory " bail to murderers and rapists. If they are rich or connected to politicians, that is. So, it is alright for criminal politicians and thieving civil servants to plunder trillions from the people but sedition, which means actions or speech inciting rebellion, if we protest. Yet cartoons are a staple for all newspapers. The Guardian a British newspaper, regularly publishes cartoons showing the Prime Minister,David Cameron with, what looks like, a condom over his head. When Tony Blair was in Number 10 cartoons showed George Bush as a chimpanzee holding Blair, the poodle, on a leash. Blair won 3 elections and Bush won 2 terms in the White House. That is because these people were not personally corrupt and would not tolerate any criminal act by anyone, no matter how rich or powerful. They had pride and self respect. On 10 October 1973, Spiro Agnew, then Vice President under Richard Nixon resigned on a charge of taking a bribe while he was Governor of the State of Maryland. He was fined $10,000 and put on probation for 3 years. So why do our lot behave like wild animals at the slightest criticism? The answer can be found with our friends, the Italians. On 2 May 1992 Judge Giovanni Falcone and his wife, Francesca Morvillo were blown up by a huge car bomb on the motorway near the town of Capaci in Italy. He was investigating the mafia gang, the Sacra Corona Unita. His successor Judge Paolo Borsellino was also killed by a car bomb in Palermo on 19 July 1992. On the 20th anniversary of the death of Falcone this year a bomb killed 16 year old Melissa Bassi outside the Francesca Laura Morvillo Falcone Fashion Institute in Brindisi. This was seen as a warning to police to keep away. In the US the First Amendment guarantees right to free speech to every citizen. During a Republican Convention in Dallas in 1984 Gregory Lee Johnson poured kerosene on an American flag and burnt it while shouting anti-American phrases. He was arrested and sentenced to one year in prison and fined $2000 by a Texas court. On appeal the US Supreme Court accepted Johnson's argument that this was a violation of his right to symbolic speech and reversed the judgement. Justice William J Brennan said,"... if there is a bedrock principle underlying the First Amendment, it is that government may not prohibit the expression of any idea simply because society finds the idea offensive or disagreeable." The US Congress passed a federal law barring flag burning but the Supreme court struck it down again. Honorable politicians accept free speech as the foundation of democracy while criminals hate it. Merely shouting that " Parliament is the light pillar of democracy " will not make it so.

Concerns over Chinese economy.

World markets are increasingly concerned over the dismal state of the Chinese economy. So is it in recession like the Eurozone or likely to contract by 0.7% like the UK or suffering double digit inflation with falling growth as in India perhaps? Not exactly. The Chinese economy is going to grow by a mere 7% this year. Growth in India is expected to fall to 6% or lower. China had a trade surplus of $26.7 billion in August compared to $25.1 billion in July. India had a trade deficit of around $18 billion from April to July. China's exports grew by 2.7% in August, India's exports were down 14.8% in July. China's industrial output grew 8.9% in August compared to 9.2% in July, which has caused a lot of tut tutting, while India's IIP contracted 1.8% in June. China's Consumer Price Index rose to 2% in August compared to 1.8% in July with food inflation at 3.4%, CPI in India is near 10% with food inflation at around 13%. The Chinese government intends to spend $157.6 billion over 4 years on infrastructure projects while in India politicians have been plundering billions of rupees from telecom, coal, airport and highway projects. Everywhere you look the differences are stark. Even Chinese statistics are up to date while ours are at least a couple of months late and then you are not sure whether they are correct. The spectacular growth in China was facilitated largely by the one child policy started in 1979. From 1979 to 2011 this resulted in 400 million fewer births. Less children meant that vast numbers of women were able to join the work force keeping wages down. Birth rate fell to 1.54 per woman in 2011 resulting in better health for women. Individual savings increased leading to economic growth. There were fewer slums, fewer epidemics, less pressure on farmland and less pressure on the environment. According to the Pew Research Center 76% of Chinese support the one child policy today. Although a communist country China did not embark on expensive social schemes to help the poor, which are useless and make the poor dependent on handouts, but relied on scorching growth to create millions of new jobs to drag the poor out of poverty while creating a surplus of $3 trillion. In India politicians have been throwing trillions of rupees on social schemes which are then plundered by criminal politicians and thieving civil servants creating a huge fiscal deficit and a Current Account Deficit of over 4%. The debt to GDP ratio in India is over 90%. To be sure China is not perfect. The gap between the rich and poor is enormous, the repressive regime has created a pressure cooker situation and corruption is rampant in the provinces. At least the central leaders are not seen to be corrupt. In India everyone right from the top to the lowly peon is on the take. However, China has one huge advantage over India. China does not have a World Class Economist genuflecting everyday while taking orders from a foreigner.

A catalogue of criminal waste.

The Comptroller and Accountant General, CAG has presented a list of Public Sector Companies which have wasted public money. The National Highways Authority of India wasted Rs 8.74 billion because of delays in completing highways linking major ports. TOI, 6 September. Air India wasted Rs 143 million on several counts which included not surrendering leased premises at Heathrow Airport which were lying unused for 9 years. In a 14 page letter written on 28 May 2006 to the then Cabinet Secretary, the former chief of Indian Airlines says," During the last one year, almost all board meetings of Air India, and even some board meetings of Airports Authority of India have become a farce." The letter alleges that new aircraft were ordered in a hurry and configuration of seats on aircraft were changed to suit a particular manufacturer. The Central Vigilance Commission is studying the letter to decide whether to recommend criminal investigation by the CBI. With respect to the development of Delhi Airport CAG has pointed out that the company, DIAL was allowed to levy a Development Fee on passengers in violation of its contract, thus making undue profits of Rs 34.15 billion. The same person was Minister of Civil Aviation when these events occurred. Hindustan Aeronautics Ltd made excess payments of Rs 430 million to its management in 2009-10 by adopting an " illogical " method of calculating its profits. Bharat Electronics Ltd failed to execute a project for billing and customer management for MTNL for 5 years which led to blocking of Rs 1.44 billion for over 4 years. Between 2006 and 2009 the government gave away blocks for mining coal to people with no experience in mining, such as gutka makers and media consultants, some of whom then sold their licenses making windfall profits. This is what occurred in granting telecom licenses under A Raja. Of 86 blocks supposed to produce coal by 2010-11 only 28, including 15 in the private sector, started production by March 2011. The Congress has defended itself by saying that state governments governed by opposition parties were against auctioning coal blocks. Meanwhile, we are having to import coal at high cost which has seen soaring electricity bills. In a written reply to the Rajya Sabha, Minister of State ( Independent Charge ) for Statistics and Programme Implementation, Srikant Kumar Jena said," As per .... the report for the month of May 2012, the cost overrun was Rs 524.45 billion for the combined delayed projects of power (28), railways (36), and road transport and highways (84) sectors." However, in Gujarat there has been no cost overrun due to delay in projects worth Rs 263.69 billion. Yet leaders of BJP do not want Narendra Modi to be candidate for Prime Minister just as they removed Gen Khanduri from the Chief Minister's post in Uttarakhand because he was too honest. Proves that all politicians are united in looting the country. We can only cry.

Why the US is so strong.

It was fascinating to watch the party conventions in the US in the last one week though it was not possible to listen to most of the speakers because of the time difference. As is usual, Obama was nominated unchallenged as courtesy to a president in office but Mitt Romney had to battle against several challengers to get the nomination for the Republican Party. The Republican strategy is to make the forthcoming presidential elections in November a referendum on Obama's record over the last 4 years and all their speeches were about the lack of economic recovery and the stubbornly high unemployment. Their speeches were deliberately bland, lacking any details as to how they intend to improve the situation. Almost every speaker seemed to have a grandfather who was a miner and parents who worked 2 jobs to give them a good education proving that America is a land of opportunities. The Democrat strategy was to emphasise that this is not about just one man but an election between 2 men with diametrically opposing views on how to reduce the gigantic deficit and create jobs at the same time. The Republicans believe in small government, reducing federal government expenditure, except in defense, and in cutting taxes to stimulate business thus creating jobs. The Democrats believe that this will cut Medicare, Medicaid and social support for the poor while making the rich richer. The best speech by far was that of Bill Clinton. He was charming, amusing, sarcastic and supported his arguments with facts and figures. He said," Since 1961, for 52 years now, the Republicans have held the White House 28 years, and the Democrats 24. In these 52 years, our economy has produced 66 million private-sector jobs. So what's the job score? Republicans: 24 million and Democrats: 42 million. Because poverty, discrimination and ignorance restrict growth." " And in the last 29 months, our economy has produced 4.5 million private-sector jobs." " During this period, more than 500,000 manufacturing jobs have been created under President Obama." He treats his audience with respect and does not trash his opponents. He uses figures to prove his point that Obama's record is better than that of previous Republican presidents and that electing Romney will destroy Medicare and Medicaid, hurting the poor and the old. This is because the US has a large middle class which demands respect. The contrast with India could not be greater. We have some 900 million poor of which 600 million have no toilets. They have been deliberately kept illiterate so that they can be easily bought with handouts. One politician promises free electricity, another promises color TVs and a third color TV plus one goat. State electricity companies have a combined debt of Rs 3 trillion. It would be fine if they were giving with their own money but no, they are blatantly bribing the electorate with taxpayer money. The largest embezzlement in history. The US will recover, we will not.

We were right after all.

Confirmation at last! For months we have been saying that there is an enormous property bubble, financed by speculators with cheap loans, which is why the government is desperate for the RBI to lower interest rates and prevent a collapse of the bubble with resultant hit on banks. Today's TOI carries the story of how diamond exporters obtained loans for the export of the same set of diamonds many times and diverted most of the money into real estate. Since the loans were ostensibly for export they were 5.5-6% cheaper than would otherwise have been the case. Around Rs 300 billion was misused. Now that the property market is frozen they are unable to pay back the loans and banks are unwilling to lend to other diamond merchants. Sanjay Kothari, Vice Chairman, Gems and Jewellery Export Promotion Council said," The export of $28 billion worth of polished diamonds and the import of $20 billion worth of polished diamonds in 2010-11 was the classic example of round-tripping. India is a diamond exporter and there is no need for importing polished diamonds. This shows how the " black sheep " have played the trick to misuse the bank finance." It was not just diamond merchants but every business tycoon, whether in consumer goods or in finance, became property developers, greedy to get a piece of the action as prices zoomed by more than 1000% between 2002 and 2011. Anand Shah, RBI Deputy Governor said to Economic Times," NPA ( bad loans ) levels have become higher than they were a while back. So there is definitely a stress in the system. The amount of restructured assets has gone up." Banks restructure by giving more loans to repay old ones so that they do not have to show them on their balance sheets. In the US, UK, Ireland and Spain property prices collapsed in 2008 but in India they kept on rising. While share markets around the world are beginning to recover the market in India made a V shaped recovery and is above 17000 today. Immoral politicians have decided to sacrifice common people to save their business friends, who finance their elections, and their own black money. To snare the ordinary public into buying shares the Securities Transaction Tax has been reduced, the only tax to be reduced when all other taxes have gone up. Up to Rs 50,000 of money invested in shares can be reduced from taxable income and the Securities and Exchange Board of India is looking to make companies guarantee for 6 months a portion of the money they raise in Initial Public Offerings from retail investors. Since a lot of IPOs are rigged investors have lost their savings when prices plunged once the stocks were listed. This is an effort to lock in small investors who, being ignorant of market trends, will be hammered when the market collapses. Politicians are also pressuring the RBI to reduce interest rates to support the property market. Trouble is that 2014 is too far away and unless the boil is lanced there cannot be any growth. We were right but we will suffer. The criminal buffoons will be unaffected.

We need a first amendment.

An independent commission was set up to investigate the disaster at the Fukushima Daiichi nuclear power plant by a tsunami last year. In the introduction the chairman, Kiyoshi Kurokawa, a professor emeritus at Tokyo University says," What must be admitted - very painfully - is that this was a disaster ' Made in Japan.' It's fundamental causes are to be found in the ingrained conventions of Japanese culture; our reflexive obedience; our reluctance to question authority; our devotion to ' sticking with the programme '; our groupism; and our insularity. Had other Japanese been in the shoes of those who bear responsibility for this accident, the result may well have been the same." These words could apply exactly to us Indians, especially to our politicians and civil servants. While the Japanese are motivated by their Samurai code of the Bushido, Indians are motivated by nothing more than self interest. This toxic " reflexive obedience " and " reluctance to question authority " is at the basis of all the cases of corruption that we see today. Those in authority are so accustomed to having their orders obeyed unquestioned that they are unable to tolerate any criticism, however justified, and will react violently if pushed. This explains the government's aggressive reaction to calls by the civil society for an ombudsman to investigate accusations of corruption against politicians and civil servants and the violent attack on sleeping people by Delhi Police on 4 June 2011 in which one woman was so badly injured she later died. Unfortunately for the brutes globalisation has meant that foreign companies have invested heavily in India and have lost vast sums of money due to corruption. Foreigners are now casting a jaundiced eye on our administration and their verdict is not favorable. An article in the Washington Post had this to say about our most esteemed Prime Minister," But the image of a scrupulously honorable, humble and intellectual technocrat has slowly given way to a completely different one: a dithering ,ineffectual bureaucrat presiding over a deeply corrupt government." As expected the reflex reaction of the Congress Party has been to snarl and threaten the paper with unspecified revenge. The Prime Minister's Office has labelled the article " unethical " and " unprofessional ". It never ceases to amaze that these people are so ignorant about freedom of speech in western countries when they are forever wasting taxpayer money on foreign junkets. Have they never heard of Fox News, Glen Beck or Rush Limbaugh? The First Amendment of the US constitution says," Congress shall make no law ...... abridging freedom of speech, or of the press, or the right of the people peaceably to assemble, and to petition the government for a redress of grievances." If an Indian dares he will certainly get beaten up, and maybe even killed, but you cannot shut up foreigners. If you want to strut around on the world stage you must ensure that your underwear is clean.

Figures beg to differ.

The HSBC Purchasing Managers Index is down to 52.8 in August from 52.9 in July. This was blamed on major power cuts in August. Morgan Stanley has reduced its forecast of GDP growth to 5.3% for the current financial year from an earlier forecast of 5.8% and is warning that it could slip to 4.3% in the next fiscal year. The RBI is predicting that inflation may be 7% instead of its earlier forecast of 6.5% this year. The government blames the inflation on a weak monsoon this year which is a complete lie because inflation has been at 10% for 2 years and the monsoon, which was weak in late July and early August, has strengthened and covered the entire country. The second lie is to blame the RBI for high interest rates which, according to the government, is responsible for falling investment and slowing growth. Unfortunately for the liars figures tell a completely different story. Bank loans to buy cars has soared by 20% to more than Rs 1 trillion for the first time ever. No inhibiting effect of interest rates there. Home loans have grown at 14.8% and the total is now at Rs 4.14 trillion. However, loans for consumer durables, such as fridges and washing machines, have fallen by 29.4% to Rs 69.3 billion. One reason for this could be that people are waiting for the festive season in late October to buy new products because this is considered an auspicious time. What is puzzling is that household savings are down to 7.8% of GDP from 9.3% last year and 12.2% in 2010. Surely people should be tempted to lock in their money in long term fixed deposits to take advantage of high interest rates and delay spending on cars to when interest rates come down. The reason why people are saving less is because increased spending on basic essentials, such as food and fuel, makes it difficult to save. Ever rising prices may also be the reason why people are spending money on buying cars and gold because they are fearful of prices rising even further. The pathetic state of citizens is reflected in Bluefin Consumer Confidence Index which has fallen to a miserable 39.6% in August from 41.1 in July. Below 50 shows negative while anything higher is positive. That reflects the extreme stress on the Indian customer. The answer is obvious - maintain a high interest rate to reduce inflation and encourage savings, which will increase liquidity and allow banks to lend to businesses, and reduce taxes which will instantly reduce prices, stimulate consumer demand and stimulate growth rate. However, the government is led by the Congress which is locked in a tax and spend Socialist mindset of the 60s. This gives politicians a sense of power and the opportunity to plunder the exchequer, examples of which are in the news everyday. The most important reason probably is that the government is bankrupt and has no options left. Even foreigners have noticed that the World Famous Economist says nothing. That is because he knows nothing and it's better to keep silent and just occupy his chair. A craven, lying traitor.

Too much to cover up.

Seems that oil companies have a combined debt of Rs 1.4 trillion, up from Rs 1.1 trillion in January this year. Last financial year they paid Rs 105 billion in interest compared to Rs 51 billion the year before. How have they reached such a sorry state? Apparently they are losing Rs 19.26/lit on diesel and Rs 4.85/lit on petrol which, we are told, is due to subsidies on these products. In the US diesel is selling at an average of around $4.2 per gallon which is equivalent to about 3.8 liters. If we take one dollar equal to Rs 55 then the price of diesel works out to about Rs 60/lit in the US, including tax at 13%. Diesel is selling in India at Rs 46/lit which would be Rs 14 cheaper than in the US. However petrol is slightly cheaper than diesel in the US and costs around Rs 59/lit whereas it is over Rs 70 in India. So how are oil companies losing money on petrol? It is because the government is taxing petrol heavily while preventing oil companies from realising their costs. Why would anyone be so stupid? Because raising the price of diesel will instantly feed into inflation which is already running at near 10%. As opposed to inflation due to stealing money on various social schemes, which is disguised as helping the poor and is invisible, this would be blamed directly on the government and would be suicidal in coming elections. Last week Aviation Turbine Fuel was increased by 7.6% adding another Rs 500 to air fares. Already fares have risen 50% since last year, due to totally unjustified taxes, depressing passenger traffic by 10%. Further rise will suppress this even further. Kingfisher is already dead and losses of Air India will mount. Air India has a debt of Rs 400 billion which is being passed onto the taxpayer. The debt to GDP ratio is already over 90% and can only rise further. In an interview Jim Rogers of Rogers Holdings had this to say about India," India has inflation due to its own reasons, not because of international factors like high oil prices." He also says," India for some reason gets better press in the reality. I still have not figured out the Indian press." ET, 3 September. Therein lies the real problem. A docile freeloading press reluctant to speak the truth and expose the crimes of the criminal politicians and the thieving civil servants. In view of such terrible economic problems threatening survival you would think that politicians would be spending all their time in finding solutions. Not so. The Cabinet has decided that people classified as low caste will be promoted even if ineligible. If they are really so concerned for the lower castes should the politicians not set an example of their convictions by seeking out reservation quota doctors when they are ill? Surely that would be the only honorable thing to do. But even now one politician is in the US for " check up ". Fortunately the cover up is being shredded by foreigners to give us a glimpse of the stinking rot underneath. How to get rid of the lot?

Growth supports bonuses.

A poll by the Confederation of Indian Industries of CEOs of Indian companies shows that 44% of them expect growth of the economy to be below 6% and 44% expect it to be between 6 and 6.5% this year. A majority 52% expect growth to remain between 6 and 6.5% in the next financial year 2013-2014 and 56% expect inflation to remain between 7 and 8%. These are gloomy numbers. Already hiring in information technology companies, the main export of India, is down. However, these captains of industry are not depressed by the gloomy figures. More than half the CEOs of the 30 companies that comprise the Sensex have been rewarded by hefty pay rises by their boards. After all prices of single malt have gone up because of the weak rupee and dinners at 5 star restaurants have jumped because of inflation. It costs money to keep your chin up. Super rich people like Azim Premji of Wipro, SD Shibulal of Infosys, Sunil Mittal of Bharti Airtel, Mukesh Ambani of Reliance Industries and Kumar Mangalam Birla of Hindalco will not receive any extra lolly. TOI, 3 September. They, of course, own vast numbers of shares of their companies and will receive dividends but even that maybe be less if profits have fallen. Poor fellows, wonder how they get by. No wonder they keep on talking about increasing the growth rate of the economy by reducing interest rates without any thought about inflation. After all, only the common people suffer due to inflation while growth benefits the rich. Meanwhile exports were down by 14.8% to $22.4 billion in July, the steepest fall in 3 years, while imports were down by 7.61% to $37.9 billion. From April to July exports were down 5.06% to $97.6 billion while imports were down by 6.47% to $153.2 billion. If these great people can buy and run businesses abroad why don't they produce more in India and export more so that the country becomes richer, more people have jobs stimulating growth and the Current Account Deficit goes down. The reasons sadly are many. First and most important are the criminal politicians and thieving civil servants who will not allow any business without bribes. Coalition " adharma " has meant 47 ministries with as many sticky hands to fill. So coal mines or power plants cannot start because they are unable to get the plethora of clearances necessary and Delhi Airport is the most expensive in the world. Secondly, why try to export when there are so many people in India. Foreigners will demand top quality while Indians can be fobbed off with third grade stuff. If even 20% of Indians can afford your product that is 240 million which is more than the combined population of France, Germany and Netherlands. Thirdly, why try to produce anything with all the hassles in acquiring land, getting permits and arranging expensive debts when you can multiply your money 10 times by building and selling apartments made possible by the property price bubble. The solution is to cut government expenditure, bring down inflation and collapse the property price bubble. No one has the guts to do that.

Masters or employees.

Politicians and civil servants in UP have looted $14.5 billion or Rs 806.49 billion worth of food, destined for the poor, in the past decade. ET, 30 August. A World Bank report says that more than 80% of food was stolen in 2005 and that 10% rots before distribution. The government spent $13 billion last year buying and storing food. In UP the minister for food is charged with murder, kidnapping, armed robbery and electoral fraud. The state police ran 5 investigations in 7 years with, wait for it, 0 convictions. How can a criminal stand for elections and then become a minister? To become a minister he has to be a member of the victorious party and would have contributed significantly to its victory so as to be eligible for such a reward. In India we do not have primaries, as they do in the US, to pick eligible candidates nor do we have local committees who vet all aspirants who put their names forward to stand for a particular seat as in the UK. Candidates are picked by the leader of the party or " high command " as they are known. Did he commit his crimes in such secrecy that no one knew about them? That is impossible. One may be able to hide one crime from everyone but someone with such a colorful past will be well known to the police and the local populace. The state police forces are poorly paid and highly corrupt and are easily threatened into inactivity. The local people will be so afraid of the criminal that no one will be willing to stand as witness. In remote areas people maybe dependent on the criminal to get essential services such as electricity connections or for protection against other criminals and thus maybe obliged to him. Much like Marlon Brando in the movie Godfather. The criminal may also be a Robin Hood type helping poor people in times of stress. But his power will be absolute and anyone opposing or informing on him will be executed. As they say in Bihar," Make him 6 inches shorter." Which means behead him. Such dastardly criminals may not be in prison but everyone knows about them. So, it follows that a political party will pick him precisely because he is such a dastardly criminal. He will have vast amounts of black money to finance the party and his victory will be assured as no one will dare stand against him. Thus every party in India is actually a political gang. Small wonder that 21% of adults and 50% of children are malnourished. Apparently about 900 million Indians eat less than the minimum recommended by the government. Why waste vast amounts of taxpayer money on welfare programs that do not work? To keep the people poor and because most of it can be stolen. In the Republican Party convention actor Clint Eastwood said," We own this country. Politicians are our employees." In India politicians have made themselves into VIPs and VVIPs while we are meant to serve them. After all how can they be khas if we are not the aam aadmi.

Need ideas not committees.

Having made a complete mess of the economy the Congress led government has latched onto just one solution - reduction of interest rates. This is a craven and shameful attempt by the politicians to blame the RBI for the stinking mess that they have produced. The Governor of the RBI, D Subbarao is not buying this argument. In his testimony to the Finance Committee of the Parliament he said," The government's statement before the committee saying that the growth moderation has been because of RBI's monetary tightening implying it is entirely because of RBI's monetary tightening...I do not agree with that." The RBI is right to be concerned about inflation. The WPI for July was 6.7% so the CPI is near 10%. Inflation rate in the US in July was 1.4% while in the Euro area it was 2.4%. Historically the average rate of inflation in the Euro area was 2.3% from 1991-2012. The average inflation for the US from 1914-2012 was 3.4%. We should not forget that World War I started in 1914, the great Depression started in 1929 and World War II started in 1939. So there must have been extreme stresses during these periods but still the administration in the US managed to keep inflation rates down to manageable levels. In India the average rate of inflation from 1969-2012 has been 8.0%. Is it any wonder that India remains a poor country with hundreds of millions struggling to survive on less than one dollar a day? So why is the Congress, which is always beating its collective breast for the aam aadmi, so focused on growth while ignoring inflation which kills the poor? Because without growth there will be no foreign investment which means no dollars leading to increasing Current Account Deficit, falling rupee and a cut in credit rating to junk status. Not something you can brag about before the general elections in 2014. Also falling growth means lower tax collections which means less money to bribe the naked and hungry aam aadmi who are dying due to inflation created by the Congress. Private Equity investment was $1.2 billion in the first half of this year, which is less than 10% raised for emerging economies, compared to $2.45 billion last year. Investment by domestic companies has also dropped. " Envisaged total fixed investment by large firms in new projects, which were sanctioned financial assistance during FY12, dropped by a whopping 46% to about Rs 2.1 trillion from Rs 3.9 trillion a year ago," said a report by the RBI. That is not surprising because large firms are sitting on huge loans which they are unable to service. This means that banks have vast amounts of bad loans which they are hiding by restructuring them. The only way out is to reduce taxes by drastically reducing expenditure. This the criminal politicians are unwilling or unable to do. So what are they doing, apart from blaming the RBI that is? Our most revered Finance Minster has formed a committed to look into retroactive taxes and a tribunal to devise a roadmap. Wonderful. A Patiala peg all round.