Medical practice in India is diseased.

The Maharashtra State  Consumer Disputes Redressal Commission has held one Dr Vasant Kumar Jog guilty of quackery for administrating anesthesia to a woman undergoing a Caesarian section operation 10 years ago. The patient died of complications related to anesthesia. TOI, 30 April. Dr Jog is apparently a physician by trade and does not have a degree in anesthesia and hence is not qualified to practice this branch of medicine. The court found both him and the gynecologist guilty of negligence and awarded Rs 660,000 as compensation to the family. And rightly so. Every doctor has a sacred trust of duty towards his or her patient and should never endanger anyone's life for greed of money. The court relied on an expert committee which defined a quack as a " person who does not have knowledge of a particular system of medicine but practices in that system, and is a mere pretender of a medical knowledge or skill - in effect, a charlatan ". Very correct so far. Sadly, as in everything in India, the law is selective and and based on wilful ignorance. The great majority of doctors in India are quacks. That is because there is no law as to who can call himself a doctor. Thus millions of people with dodgy degrees in Ayurveda, Homeopathy, Physiotherapy or Unani are practicing merrily as doctors. Our judges and freeloading journalists get very excited when someone dies of complications related to surgery but do not realise that quacks are killing thousands of people everyday because they do not have the knowledge to diagnose medical conditions and prescribe wrong drugs. Since there is no restriction on chemists to check the degrees of the prescriber before dispensing medicines millions of patients are taking wrong or unnecessary medicines, all of which may have powerful side effects. One of the commonest crimes is to prescribe powerful antibiotics for ordinary common colds or flu which has given rise to bacteria which are resistant to nearly all available antibiotics. The New Delhi Metallo-beta-lactamase 1 is one such example. Tuberculosis has evolved from being multi- drug resistance to extreme drug resistance because quacks do not know that dosages have to change according to the body weight of the patient and prescribe fixed dose combinations which are appropriate for patients weighing less than 50 kilos. In August, 2011 Prof DK Gupta, Vice Chancellor of Chhatrapati Shahuji Maharaj University in Lucknow wrote to the Medical Council of India asking that about 50 students who had repeatedly failed their exams be awarded a degree. These students had gained admission through reservation because they belonged to SC or ST category and could not manage to attain 50% marks required for passing. Since more than 50% of seats are reserved only very few doctors are really capable. No wonder politicians rush abroad if sick.

Coal instead of gold.

India spends 45% of its total import bill on oil and gold imports, $169 billion was spent on importing foreign oil in the last fiscal. Hence the fall in the international prices of gold and oil led to great rejoicing among politicians and friends that Core Inflation rate will fall which will enable them to scream at the Reserve Bank for a cut in interest rates. Sadly JP Morgan ( India ) does not think so. Livemint, 23 April. JP Morgan reckons that any savings will be more than equaled by increased spending in other areas. 1. Iron ore production is down because of legal and environmental reasons. Illegal mining was costing the country billions of dollars every year and the Supreme Court has shut down all such mines. Some Indian companies raise false allegations of environmental damage against rivals to harm their interests. India is already having to import steel scrap and may have to import iron ore. 2. Persistent weakness in commodity prices means a slowdown in the global economy which may reduce our exports. 3. India may have to import fertiliser because of problems with production of natural gas. 4. We will have to import coal because coal mines were allocated to family and friends and have yet to produce any coal. India has 286 billion tonnes of coal and 41 million tonnes of lignite, the fifth largest reserves in the world. Yet power plants are not producing power at full capacity because of a shortage of coal. TOI, 29 April. Between 1993 and 2008, 195 coal blocks were awarded, of which 160 were awarded between 2004 and 2008 by this Congress led government, and only 30 are operational. These 195 blocks have reserves of 44 billion tonnes and we will consume just 770 million tonnes in 2013-14, of which 600 million tonnes will be produced domestically and 165 million tonnes will have to be imported. Coal India is a government owned monolith which like every government institution is totally incompetent. Private companies which were allocated coal blocks were just sitting on them hoping to sell out at a higher price. One company given a captive coal block for a steel plant did not own any steel plant. Even after 13 years it was still trying to buy one. Companies had no intention of producing power or steel but wanted to sell the coal in the open market at a profit of 800-8000%. China is a prime example of crony capitalism where local politicians and business fellows have combined to grab land from peasants and construct huge factories supplying the world. This has made it the second richest country in the world. Cuba is poor but its socialist government provides free education and health care better than that of the US. We are cursed in that the Congress loots taxpayer money for fraudulent socialist schemes while indulging in the vilest form of crony capitalism to loot our resources. Coal or gold, they fill their pockets.

Chicanery at home and abroad.

A panel appointed by Pascal Lamy, Chief of the WTO has published its recommendations incorporating many changes, including investment, currencies and climate change. TOI, 26 April. However, in a sly effort to help western countries continue their unfair superiority in international trade it suggests that poor and developing countries should be given flexibility depending on need and that too for a fixed period. Fearing that it will be treated the same as a developed country India has immediately rejected the report saying," It is not WTO's report. It is WTO Director General's report. We will oppose the proposals." Started in 2001 the Doha round has been stuck since the meeting in Cancun in Mexico in 2003 broke up in acrimony with poorer countries accusing the rich ones of subterfuge and bad faith. After World War II western countries took control of every international institution and imposed their will on South America, Africa and Asia in an effort to keep us subjugated. The IMF, the World Bank, the UN Security Council are all controlled by whites. China has a seat at the Security Council but does not count because it is an uncivilised and barbaric bandit country which tramples its own citizens while trying to divert them by military jingoism against its neighbors. Western countries, especially the US, supported pet dictators, like Mobutu Sese Seko, who allowed them to loot the mineral wealth of their countries. At the Uruguay round of trade talks under GATT developing countries were bullied into signing a pernicious treaty which allowed them to export commodities but not manufactured products, devastating their industries, especially in Africa. Now developing countries have realised that no treaty is much better than a bad one and are refusing to be browbeaten. Meanwhile trade between developing countries has risen by 3 times, from just 8% in 1990 to 24% of global trade in 2011. This is projected to rise to 34% by 2020. Trade between the rich north and the poor south has grown from 33% in 1990 to 38% in 2011 while trade between developed countries, with each other, has shrunk from 56% to 36%. The rich countries are getting increasingly worried and would like to lock in an unequal treaty which would allow them to maintain their exploitation of developing countries well into the future. Meanwhile NGOs are helping High Net-worth Individuals with their charitable donations. TOI, 27 April. India has one NGO for every 400 people. Why does a country which has a $1.9 trillion economy, is growing in excess of 5% and boasts of bring a BRICS member need so many NGOs? This being India there is an urgent need to study how many are controlled by politicians and whether the so called charity by HNIs is just an underhand way of bribing the villains. With so much chicanery life is so exciting.

Will the sky fall?

In recent weeks a paper entitled " Growth in a Time of Debt ", written in 2010 by Professors Carmen M Reinhart and Kenneth S Rogoff, has been producing a lot of debate. In this paper Reinhart and Rogoff analyse data to show that when debt / GDP ratio of any country crosses 90% the economy begins to contract. Livemint 25 April. When the ratio is 0-30% GDP grows at 4.1%, between 30 and 60% the growth rate is 2.8%, between 60 and 90% it is 2.8% but above 90% the GDP grows at -0.1%. This is a serious and highly academic paper but it has caused a lot of heat because the Republicans have used it to argue for a sharp reduction in deficit in the US budget by severe cuts in government expenditure in Social Security and Medicaid, which provide a safety net for the poor. In recent weeks a paper by the Political Economy Research Institute at Massachusetts University  identified " coding errors, selective exclusion of available data, unconventional weighting of summary statistics " in the paper by Reinhart and Rogoff. They have studied the data and conclude that although GDP falls with rising debt levels, 90% is not a cutoff level at which it begins to contract. Their figures show that at a debt / GDP ratio of 0 to 30% growth is at 4.2%, between 30 and 60% growth is 3.1%, between 60 an 90% it is 3.2% and at above 90% it falls to 2.2%. Thus they show that growth in the GDP slows down with increasing debt but gradually and not as predicted by R&R. With the publication of the second paper a storm has broken out between economists who suggest that large deficits lead to inflation, high interest rates and falling investment, leading to lower growth. They suggest cuts in government spending, removal of all subsidies and lower taxes to encourage investment. This is the policy being followed in the UK and Europe but instead of growth Europe is in recession and the UK grew by 0.3% in the last quarter, thus avoiding a highly embarrassing triple-dip recession. Savage cuts in public sector spending has reduced investment, increasing unemployment which has reduced tax collections and poverty levels have increased as governments have laid off workers and cut benefits. The result has been an increase in levels of debt and enormous public anger. The other group of economists taunts the first group as " deficit scolds " saying that in a time of recession governments should increase spending which will increase investment and reduce unemployment, leading to increased tax collections which, in turn, will reduce deficits. They point to the US where the Federal Reserve is buying up bonds worth $80 billion every month but inflation and borrowing costs have stayed near 0%. Sadly, we Indians do not know what is happening here because our economists repeat what politicians tell them. We will know only when the sky falls on us.

We need medicines for people not for elections.

Seems that the growth in the pharmaceutical sector has been slowing down. TOI, 23 April. Usually this sector is recession-proof because you must take medicines if you fall ill but apparently, with the slowdown in the economy, this sector has also been slowing down. Growth was 5.3% in November, 4.3% in December, jumped to 10.8% in January, then dropped to 7.9% in February and further to 5.6% in March. That is surprising because the winter season, from the middle of December to the middle of March is the healthiest time of the year in India. Chronic illnesses, such as diabetes, remain constant but blood pressure and heart problems tend to worsen in winter. However, with the onset of summer asthma, viral infections and especially abdominal infections rise dramatically increasing medical costs for households. Thus the spike in January is somewhat surprising. The real reason maybe that people, especially the poor, have less disposable income because they are spending a lot more on food and other household products because of consumer price inflation at over 10%. We are told that this is because of supply side constraints but India has been having bumper crops for the last 2 years so it is difficult to see how supplies can be increased any further. Any responsible government would devote all its energy to controlling inflation but everyone in the government has been howling about reducing interest rates because that will improve growth. Maybe, but how will it improve supplies of food? Would the inflation not get much worse because of increasing demand? The clue might be in a report by Karvy Stock Broking which says that the recent crash in the price of gold may lead to a fall in prices of properties in India. They reason that as gold prices fall it will become more affordable allowing more people will invest in this metal. TOI, 22 April. Using data from Hong Kong and India the report shows that there is a correlation of 0.81, which means 81%, between the prices of gold and real estate. " Now the recent correction ( of about 17-20% ) offers an opportunity for investors to switch from real estate to gold. The most impacted markets could be the ones which have high investor concentration, that is NCR ( including Gurgaon ) and Mumbai," said the analysts. Real estate is where the real black money is and politicians and civil servants have the most black money. They therefore stand to lose the most if there is a correction in property prices. By reducing interest rates they want to shift the cost of the falling growth rate away from borrowers to savers. Hopefully this will protect banks and encourage people to spend more on products that need loans, such as cars. The whole idea is to somehow postpone the  day of reckoning till after the elections. After that, who cares.

Why don't they watch their backsides?

The Boston Marathon bombing was carried out by the Tsarnaev brothers, Tamerlan and Dzokhar on 13 April. It took the police 3 days to release CCTV pictures of the brothers walking away from the bomb scene. They had enough time to take a train to New York, take an Aeroflot flight to any city in Russia and disappear into the badlands of Chechnya or Dagestan where they would have found a lot of help to hide. Why were they still hanging around in Boston? The most logical thing would have been to plan their escape before planning their attack because they must have known that getting caught in the US would invite the death penalty. Last month Saradha Group, running a chit fund in Bengal, collapsed with loss of around Rs 200 billion. The Chairman of the group, Sudipto Sen fled by car. Yesterday he was arrested, with 2 other executives of the same company, from a hotel in Sonmarg in Kashmir. He was easily traced because he was still using his own cell phone and a utility vehicle with Bengal registration was parked outside the hotel. Surely we are entitled to expect a man who has built up a fortune of Rs 200 billion to have basic intelligence and some common sense. With that amount of money he could have bought a house anywhere in India under a false name, changed his appearance with plastic surgery and lived a comfortable life, secure in the knowledge that our clueless brutal police would never be able to find him. Surely, the first act should have been to ditch his cell phone and pay a bribe to get another one? There have been fears that using a cell phone exposes the brain to minute doses of irradiation which may lead to cancer, but studies have shown no such danger. However, it maybe possible that cell phones are reducing our intelligence. The All India Association of Chit Funds estimates the total money invested with registered chit funds at Rs 300 billion but unregistered chit funds handle Rs 30 trillion. Livemint, 24 April. The total amount of money in bank deposits in 2011-12 was Rs 15 trillion, so the chit fund industry is at least twice as big. One reason maybe that these funds offer higher returns than banks which attracts the poorer segments of society but the main reason is that they do not demand photo identity documents under the Know Your Customer rules, thus providing an avenue for investing black money. Some have suggested that rural people have trouble accessing banks. That is not true as banks have lent Rs 5.6 trillion for agriculture related activities because banks are forced to target 40% of their lending to " priority sectors " as designated by the government. Total loans under the Kisan Credit Card scheme, which lends at 7% interest to farmers to buy luxuries and enjoy parties, is Rs 2 trillion. Perhaps the more intelligent crooks have become politicians. They always watch their backsides.

Economics by committee is killing us.

With the economy in the doldrums one way to increase sales is to give something free with every purchase. Buy one shirt and get another one free or buy a ketchup and get a chili sauce free and so on. So when we got the our most revered Prime Minister we were so happy because we thought that we got a World Famous Economist and an Honest Man for free, 3 for the price of one, as it were. Sadly, the economy is in free fall, corruption is at an all time high, the police have become a brutal occupying force and women and children are being raped to death. Prices of petrol, diesel, cooking gas and electricity were increased. New taxes were levied on restaurants, hair dressers and properties. Even hospitals and distributors of newspapers have to pay service tax. So a man reading a newspaper while dying of cancer in a hospital is having to pay 2 sets of service taxes. This was hailed by our freeloading journalists as " big bang reforms " and we were told that the deficit can come down to below 5%, the Current Account Deficit can be controlled and that the economy can grow at 8 or 9% or whatever, if the western economies start to grow, if commodity prices were to fall and if there is a good monsoon bringing down food prices. Surely. If I had wings I could fly. What no one is asking is why matters are at such a desperate state after 9 years of the World Famous Economist at the helm. Why does he need a host of economic advisers, which must be costing an awful lot, and what advice are they giving him? We all know about the great sage, Mr Montek Singh Ahluwalia, Deputy Chairman of the Planning Commission who issues prophecies from time to time which are so abstruse as to be completely incomprehensible. Then there is the Chief Economic Adviser, Raghuram Rajan a  professor in the US, like his predecessor, Mr Kaushik Basu. As also Mr C Rangarajan, Chairman of Prime Minister's Economic Advisory Council who has said that there is no need for big bang reforms as in the 1990s. Some new remedy called " incremental changes " will suffice. TOI, 22 April. He said that beneficial effects from the action taken to speed up project clearance will visible in the current fiscal.  Wow. " I believe the Indian economy has bottomed out," said he. He believes but is not sure. The Japanese bank, Nomura says that the CAD will fall to 4.3% in 2013, which is still too high, because our gold import bill will fall by $8 billion and our oil bill by $9 billion. ET, 22 April. Wholesale Price Index will fall to 5.6% year-on-year in 2013 which is 1.6% below current forecast and the Consumer Price Index to 9.2% which is 0.6% below current forecast. Interest rate will be reduced by 75 basis points instead of the expected 25. A classic case of treatment by committee in which the patient usually dies.

Ignorance leads to optimism.

Repeated surveys show that Indians are one of the most optimistic people. When the cost of living has doubled in the last 3 years, investment has almost come to a halt, few jobs are being created, prices of fuel, electricity and travel are being increased daily in a desperate effort to control the deficit and the standard of living is dropping why should we be so optimistic? It maybe because of our belief in karma,  because we have such little expectations from our politicians that a small piece of good news is a joyful surprise and because we receive such contradictory information that we do not know what to believe. Seems that investors have been withdrawing money out of mutual funds and Unit Linked Income Products or ULIPs. This has forced institutional investors to dump Rs 1 trillion worth of stocks in the last 15 months till the end of March, Rs 700 billion worth in 2012-13. This is the highest in any year. Livemint 22 April. But instead of collapsing the stock market is booming, it is above 19000 today. The reason is that Foreign Institutional Investors have poured in $25 billion, about Rs 1.3 trillion, into our market. If people are getting out of shares where is the money going? After all, Rs 1 trillion is too much to be stuffed into pillows and mattresses. Must be going into fixed deposits in banks to lock in a high interest rate before rates fall, right? No. According to SBI Chairman, Pratip Chaudhuri," The biggest challenge for the banking system is to fend off competition from non-banks such as mutual funds, debt funds, liquid mutual funds and tax-free bond funds, who are all having an unfair advantage." Livemint 17 April. So on the one hand we are told that people are getting out of mutual funds while the SBI Chairman says that mutual funds are robbing banks of investment. RBI figures show that average deposit growth was 13.8% last year, just 11% in December, while it was 27.4% in 2008. One reason why people are saving less is because of falling interest rates. The SBI has reduced its 6 months savings rate by 125 basis points to 6.5%, which is almost half of the Consumer Price Index, while in China it has gone down by 50 basis points to 2.8%, which is above its CPI at 1.9%. Why is China able to control its inflation while we cannot? Because the CPI for farm workers was 12.64% in March and 12.72% in February. For rural laborers it was 12.62% in March and 12.52% in February. This is because the Congress started the NREGA scheme which pays rural poor for 100 days every year for fictitious work It started at Rs 100 per day but has already reached Rs 214 per day because it is linked to inflation. So rural people get higher handouts because of inflation, which raises labor costs, leading to higher food inflation, which leads to higher handouts. We are optimistic because no one explains anything to us.

Cannot deny 3 billion years of evolution.

Yesterday there were processions in France for and against homosexuals being legally allowed to marry. Both houses of the French parliament have already passed a bill allowing such marriages to go ahead. The British Prime Minister also supports such a law but a significant section of the Conservative Party is against it. In the US the Supreme Court is considering the appeal of a woman who has been asked to pay a large amount of tax on inheriting the property of her lesbian lover, far higher than a heterosexual woman would have to pay on inheriting her husband's property. Homosexuals have portrayed their unions as based on love and have accused opponents of being motivated by blind hatred, usually based on religious fanaticism. After all, God is said to have destroyed the city of Sodom with fire and brimstone. However, homosexuality is nothing to do with love, it is to do with sex. You love your brother but you do not have sex with him. When we examine it we find that homosexuality between women is completely different to that between men. Sex has to have some form of penetration otherwise even kissing could be called an act of sex. Women have vaginas which are elastic tubes designed to take an erect male organ. Even the angle of a vagina corresponds to that of a male organ. Thus there can be no penetration between 2 women. There can be oral stimulation or they can use implements shaped like the male organ. Therefore, female homosexuality hardly exists and whether cohabiting for a period of time can be constituted as marriage is for politicians and judges to decide. Men, on the other hand, can definitely penetrate but between 2 men there is no receptacle. The human rectum is loaded with bacteria and some, like E coli, Klebsiella and anaerobes, can be deadly. In most cases of septicaemia, which has a high fatality rate, the bacteria growing in the blood stream have come from the patients own gut. Would any man smear his private parts with human feces? If not, why would any man put his organ into the rectum of another human being, male or female? While urinary tract infection is very common is adult women it is almost absent in adult men, unless it is sexually transmitted. The reason is that women's fecal and urinary outlets are close together while they are far apart in men. However, anyone inserting his organ into a rectum has a high chance of contracting UTI. The anal sphincter is a circular muscle designed to hold feces inside until a person can get to a toilet. It is not designed to be penetrated by a stiff object, hence the receiver will develop a patulous sphincter and will suffer from fecal incontinence, which is  abnormal. Thus female homosexuality almost does not exist while male homosexuality is grossly abnormal. It is nothing to do with religion or morality but to do with how the human body has developed through 3 billion years of evolution. The debate must be based on reason and not on lies.

We invite our external enemies and create internal ones.

Three days back the High Court in Pakistan ordered the arrest of former dictator Pervez Musharraf. Musharraf who was present in court at the time ran with his tail between his legs and tried to hide in his farm. The police arrested him there and brought him like a common criminal to a magistrate's court where he was remanded in custody. His farm will be converted into a sub-jail and he will be under house arrest. This is the villain who organised an unprovoked attack on Kargil in May 1999 which resulted in the deaths of 527 Indian soldiers with another 1363 wounded. Having lost the war he organised a coup in October 1999 to prevent his own dismissal and subsequently made himself the president of Pakistan. In December 1999 an Indian Airlines plane was hijacked and flown to Kandahar in Afghanistan which was occupied by the Taliban at the time. The hijack must have been arranged by the ISI to avenge the loss in Kargil. In 2001 terrorists assisted by Pakistan attacked our parliament in which several police officers died. Yet in November last year the Hindustan Times invited this loser to a Leadership Summit. The Indian embassy in Dubai issued a visa to Musharraf and his wife, Sebha on condition that they reported to a police station. The Pakistani ambassador protested to our government and, instead of telling the swine to get lost, the government treated Musharraf like an honored guest. Any other country would have issued an international arrest warrant for his arrest as a war criminal but our the Congress keeps on debasing the nation. Every time our soldiers have won against Pakistan through great sacrifice the Congress returned all territory without any precondition. The Congress has persistently denied proper equipment to our armed forces even after getting thrashed by China in 1962.  The result is that India is humiliated by everyone of its neighbors. China is building 3 dams on the Brahmaputra to divert all its water to the north. A few days ago the cockroach eaters infiltrated 10 km inside Ladakh. Millions of Bangladeshis have taken over large tracts of Assam and Bengal and Sri Lanka keeps killing our fishermen. Here a 5 year old girl was raped for 5 days, starved for 2 days, various foreign objects inserted inside her and left for dead. A 5 year old, for God's sake! A 25 year old man was arrested from his village. In the name of " inclusive growth " a huge underclass is given cheap food, money, land and jobs which breeds a sense of entitlement but without any sense of citizenship or duty towards the nation. No economy can support hundreds of millions of people who pay no tax, depend on handouts and keep on breeding because that increases the amount of freebies. Every entitlement must be tied to no children or one child at the maximum. The only way to get rid of poverty is to get rid of the poor. Or else we are doomed.

One crutch is not enough.

Seems that the government, civil servants and business fellows all wait with bated breath for news of the Wholesale Price Index. Nothing else matters in a country with a billion people. WPI fell from 6.84% in February to 5.96% in March and immediately a great hallelujah went up. The Sensex jumped a thousand points as a cacophony of pundits, egged on by freeloading journalists, started speculating on whether the Reserve Bank will reduce interest rates by 25 or 50 basis points. No one stopped to notice that the WPI in January has been revised up from 6.62% to 7.31%. Whether this is mere incompetence or a deliberate act, to force the RBI to reduce interest rates, we do not know. So, the March figure could well have been under-stated. However, no one cares for accurate figures because once the rates are down it is a done deal. IIP which is an index of industrial production was up 0.6% in February and 2.4% in January compared to last year but the IIP has fallen for 6 of the 11 months of the financial year declared so far. Naturally, if industrial production falls demand for iron, cement and other materials measured by Core Inflation will fall as well. This came in at 3.5%. For the ordinary citizen all these figures are useless. Only the Consumer Price Index matters because this measures how the costs of daily living are rising. The CPI has dropped from 10.91% in February to 10.39% in March. Small comfort because prices of daily use are still soaring. The slight fall maybe due to the winter harvest coming to the markets but as summer approaches prices of vegetables and fruits will start to rise again. Then all eyes will be towards the heavens praying that the monsoon is kind this year. Parts of Maharashtra and Gujarat are experiencing such severe drought that there is not enough drinking water. That the fall in the WPI and the Core Inflation is due to a slowing economy is supported by a fall in truck rentals which fell by 1.5-3% in March. Truck rentals are down 8% in 2013 which means that fleet owners are unable to pass on the rise in the cost of diesel. Banks are apprehensive about this sector adding to their Non Performing Assets. Banks have lent Rs 600 billion to commercial vehicles which is 1.5% of overall loan exposure of banks. Livemint, 12 April. In a slowing economy with falling demand prices should fall so why is the CPI stubbornly above 10%? The reason is the humongous property price bubble. Every business fellow, whether making underwear, pots and pans or jharoos has moved into construction because that is where you can multiply your money 5 times within 3 years. They have borrowed vast sums to buy land. Everyone is terrified that if property prices collapse the entire edifice will come tumbling down, hence the obsession with WPI. Trouble is that the CPI cannot be controlled unless property prices come down. In a legless economy one crutch is certainly not enough.

Beware what you wish for, it may come true.

The government has been desperately hoping for a fall in foreign exchange drain due to gold imports. Its prayers have been answered. Gold prices have fallen more than 20% from $1750 an ounce to $1360 which means that there will be less pressure on our import bill, perhaps decreasing our Current Account Deficit. The relief in the government is palpable but, sadly, as always, there is a sting in the tale. Several stings perhaps. The fall in the value of gold means that the value of our gold reserves have also fallen. The Reserve bank holds 557.75 tonnes of gold which was valued at $34.08 billion in September 2011 but has now dropped to $24.17 billion. This means our foreign exchange reserves have also dropped from $293 billion to $283 billion. Which also means that we must bring down our CAD, either by increasing exports or by increasing Foreign Direct Investments. Our exports fell by 1.76% in the last financial year to $300.6 billion which increased the trade deficit to $190.91. The government has decided to extend the Export Promotion Capital Goods Scheme, which allows exporters to import capital goods without tax, beyond 31 March and has extended it to all sectors. They have also decided to decrease the minimum area required for a Special Economic Zone to half of what is required at present because it is very difficult to acquire land for such zones. The reason that foreign investors are sceptical is because the government keeps changing rules all the time rather like a monkey climbing a greased pole. When we have 5 year plans devised by the Planning Commission, presided over by the great sage, Mr Montek Singh Ahluwalia, why can we not have stable tax and commercial rules that just roll over from year to year so that everyone knows exactly what to expect. Trouble is that the Congress multiplied wasteful expenditure by many times, first to win the elections in 2009 by starting the NREGA scheme, which pays the rural poor for doing nothing, increasing civil service salaries by 80% and by forgiving all loans to farmers, and then to cling on to power by bribing various political gangs by inventing 53 ministries, all working at cross purposes and looting the exchequer, as the multitude of scams have shown. The US, a $15 trillion economy, has just 15 Secretaries, equivalent to our cabinet ministers, and another 7 of cabinet rank, making 22 in all. Having increased expenditure, which increased the fiscal deficit to over 5%, leading to a danger of a credit downgrade, the Congress is desperate to increase revenues, which means punishing taxes on every service that they can imagine. This has led to double digit inflation, reducing consumer spending and reducing growth. Falling commodity prices means that the global economy is slowing down which will decrease exports. To decrease unemployment the US is tightening H1B visas which will hit our greatest exports in IT. The nation should be above self interest. Not for this lot.

Why can we not imitate?

Japan and Korea grew into rich countries by manufacturing cheaper versions of products, such as cars and TVs, based on imitation of those produced by western companies before setting up their own R&D. Sadly, we seem incapable of doing even that. Ria Chabbra, a 14 year old middle-school student living near Dallas, heard her parents arguing about the benefits of organic food and decided to investigate for a science project. She found that organic produce contain higher levels of Vitamin C so she wanted to know if they were good for health. Through the internet she found that fruit flies have short lives and are used for such research so she e-mailed several professors who worked with fruit flies. To her surprise Johannes Bauer, an assistant professor at the Southern Methodist University in Dallas, responded. " We are very interested in fly health, and her project was a perfect match for what we were doing," said Dr. Bauer. New York Times, 18
April. Her research titled " Organically Grown Food Provides Health Benefits to Drosophila melanogaster " tracked the effects of organic and conventionally grown foods on the health of fruit flies. She found that flies fed on organic bananas and potatoes did better by every measure, including fertility, stress resistance and longevity than those fed on conventional foods. Her project was among 30 finalists in the prestigious 2011 Broadcom Masters national science competition. Dr Bauer said that although he would not normally agree to work with a middle-school student he found that Ria performed at the level of a college senior or graduate student. " The seriousness with which she approached this was just stunning," he said. He encouraged her to publish her work and it has been accepted by a science journal with Dr Bauer and Santharam Kolli, a research assistant, as co-authors. A simple e-mail led to this girl's paper but would any Indian professor or any official respond to a mail from a school student or spend time helping her? We know what the answer is. Here people are puffed up with a false sense of their superiority and helping anyone is considered to be a waste of time. Such research would be impossible also because standards in schools are falling fast because this government has abandoned all examinations in schools and students are promoted without anyone knowing the level of their knowledge. This was done to hide the abysmal quality of teaching in government schools whose teachers are paid double those in private schools. After the Boston bombing we see investigators in space suits, covered from head to toe with masks and gloves so as not to pollute the crime scene or contaminate any evidence. Here we do not know who killed Aarushi 5 years after she was murdered because the police spoiled all evidence with their clumsiness. Even monkeys can imitate but we cannot. Hence, we remain poor and weak. So sad.

Poor economy is good reason to travel abroad.

Our most revered Finance Minister is off to the US and Canada for one whole week to drum up some coppers for India. Earlier he went to South East Asia and Europe. We hope the weather is good and he has an enjoyable time with good food and company. Apparently he wants to get $20 billion worth of investment from the US and Canada. Trouble is US business fellows look for profits before investing. And they can be pretty blunt. Maurice Taylor, CEO of a tire company, Titan International pulled out of talks to take over a Goodyear plant in France. In a letter to the French Minister for Productive Recovery, Arnaud Montebourg, who is a Socialist, Mr Taylor wrote," The French employees get high salaries but only work three hours. They have an hour for their breaks and their lunches, chat for three hours, and work for three hours. I said this in front of French union representatives. They said that's the way it is in France." Indian workers work hard but last July workers at Maruti's Manesar plant rioted killing one manager and setting fire to expensive machines. That is because our labor laws are antiquated making it impossible to fire anyone and trade unions are controlled by political parties, which create problems for point scoring, so most companies rely on contract workers who are poorly paid and have no rights. However, our FM is not looking for productive investment but for loans to somehow fill the large Trade and Current Account Deficits and prop up the sagging rupee till the elections. 1. He wants to raise the cap on foreign investment in rupee denominated government debt by $5 billion which means that if the rupee falls the debt will increase. 2. He wants to reduce tax on such investments, which means foreign funds will happily make huge profits on sovereign debt. 3. He wants to make it easier for Indian firms to borrow abroad because interest rates are near zero in the US, UK, Japan and Europe. Indian firms happily raised money between 2006-2008 on Foreign Currency Convertible Bonds which could be converted to shares in the companies on maturity. However, the government managed to strangle growth, bringing down profits in these companies, so no one wanted to convert the bonds into shares. Falling growth meant the rupee fell increasing the load on these companies. Last year 56 companies had a total debt of $5 billion of which only 5 were in a position to pay back. 4. He wants to increase the cap on foreign investment in sensitive sectors such as defence, telecoms and media, finance and trade. Officials think this will raise $3-5 billion. All this is hot money and can flow out any time. " But we do not have really too much of choice than relying on portfolio inflows," said Jyotinder Kaur, an economist at HDFC Bank. Wonder if he has a son in law who has a sister. Like the other fellow.

Is there a good terrorist?

Early today 2 bombs went of among spectators, about 100 yards from the finishing line at the Boston Marathon in the US. It was an improvised device filled with ball bearings which killed 3 and injured more than 140 people. Lots of people lost their feet and legs. President Obama was quick off the block, calling it a terrorist attack. In September 2012 the administration thought the attack on the consulate in Benghazi in Libya, which killed ambassador Christopher Stevens, along with 3 other Americans, was a reaction to the film " the Innocence of Muslims " until they found that it was a pre-planned terrorist attack. This angered the Republicans so much that they did not allow Susan Rice to become Secretary of State. While this attack occupied all news channels little attention was paid to bombs that went off in Baghdad, Kirkuk and Nassriyah in Iraq yesterday killing 20 and injuring 195 people, a result of the American invasion of Iraq, which killed half a million people. The greatest puzzle is why this is classed as a terrorist attack and not the one on 14 December 2012 when Adam Lanza shot his mother, Nancy at home and then went to Sandy Hook Elementary School in Newtown, Connecticut and shot to death 20 children, all between the ages of 5 and 10 years, and 6 adult members of the staff. Or the one on 20 July 2012 when James Egan Holmes shot to death 12 and injured 58 people watching the movie " The Dark Knight Rises " at Century movie theater in Aurora, Colorado. Adam Lanza had 2 handguns, a 10 mm Glock and a 9 mm Sig Sauer with plenty of ammunition. He also had a shotgun in his car. Each of the children who died had at least 11 bullets in his or her body. Yet even today US lawmakers are unable to agree on background checks for people wanting to buy guns. In 2010, there were 11,078 homicides and 19,392 suicides related to firearms making guns the biggest killer of American citizens. After the Newtown tragedy Mr Wayne Lapierre, Executive Vice President of the National Rifle Association said that the only way to stop a bad guy with a gun is a good guy with a gun. So will Mr Lapierre say now that the only way to stop a bad guy with a bomb is a good guy with a bomb? No. Because the second amendment in the US constitution makes it legal to carry guns and because it seems not so bad if Americans kill Americans. However, this bomb blast will be seen as the work of the " other " which is what sets it apart and makes it so horrifying. In the subconscious of every American is the knowledge that the US is the biggest genocidal country in the world. Hundreds are being killed in Pakistan, Afghanistan, Yemen and in Africa by drones operated from thousands of miles away in the US. The US insists it kills " suspected terrorists ", locals say they were innocent people. That is what makes this bombing so terrifying. What if the sons, brothers or fathers of those dead come looking for revenge?

Taxes are loved by socialists and corrupt politicians.

Seems that Mrs Margaret Thatcher, whose funeral is day after tomorrow, has managed to avoid inheritance tax on her property. Daily Mirror, 13 April. The lease on the property at Chester Square, Belgravia in London is held by one Bakeland Company, based in the British Virgin Islands, and since a company does not die there is no liability for tax, although it is hard to understand why a lease, which is like a long-term rental, should attract inheritance tax at all. British law. The official address for Bakeland is a PO box in a small town in Liechtenstein and its origins were in St. Helier in Jersey, all well known tax havens. Bakeland took out the first lease in October 1991 for 700,000 pounds, which was to last till 25 December, 2030, and took out a second lease in March 2006 for 2,395,807 pounds, which is to last till 29 July, 2055. Curiously, the second lease states," The airspace above the building is excluded from the title." The present value of the property is 6 million pounds so, at 40%, the inheritance tax works out to 2.4 million pounds, a tidy sum in today's era of austerity. However, no criticism is due because conservatives believe in low taxes, especially for the wealthy. The reason why the British government is unable to collect taxes is because Britain has the largest number of tax havens in the world at Bermuda, British Virgin Islands, Jersey, Guernsey, Isle of Man and Turks and Caicos Islands. It is funny that the US, the world's biggest thug, has gone after banks in Switzerland and Luxembourg and has persecuted Non Resident Indians, living in the US, for having a few measly dollars in banks in India but says nothing to Britain, the largest money laundering country in the world. Perhaps this is what is meant by the " special relationship " that Britain likes to boast of. States in the US such as Alaska, Delaware, Florida, Nevada, Texas, South Dakota, United States Virgin Islands, Wyoming and Washington have incorporation laws similar to tax havens. Which probably explains how large companies and the rich are able to escape paying taxes in the US. The world's largest company, GE pays virtually no corporate tax and Mitt Romney declared paying tax at around 14%. Naturally, tax havens are seen as centers of money laundering by socialist countries like France and India which tax the hell out of their people. After Mr Francois Hollande, President of France promised to " eradicate tax havens in Europe and the world " one guest on BBC Global said that tax havens perform a very useful function of controlling corrupt politicians who will waste our hard earned money. If taxes are too high people will escape to tax havens, thus keeping a lid on high taxes. His message was that taxes should be low and tax laws simple with few or no loopholes. We are told that Indians have $2 trillion hidden in tax havens. Should we cheer such fellows?

Economics needs as much patriotism as the armed forces.

News comes that finance ministry officials are begging the credit rating agency, Fitch to increase India's rating from BBB- which is just one notch above junk status. They should be careful. Exactly one year ago officials were making the same case in front of S&P analyst, Tokohira Ogawa who listened politely while they told him about our economic growth prospects, efforts to improve revenue growth and efforts to contain the fiscal deficit. He gave no sign of what he was thinking but ended up cutting our credit rating. This time too they maybe emphasizing how they are trying to reduce our fiscal deficit by increasing prices of diesel and railway tickets, which goes by the name of " big bang reforms ", trying to increase revenue collection by extorting money through taxes on every goods and services and trying to control Current Account Deficit by facilitating a flow of hot money into shares and bonds. But trying is not the same as achieving. What if they fail, what if they stop trying because of the looming general elections or what if, God forbid, foreigners decide that more money can be made elsewhere and sell out on our shares and bonds bringing both markets crashing down along with the rupee? Besides why should anyone trust this Finance Minister who is personally responsible for the present mess because he started the NREGA program of paying the rural poor for doing nothing, leading to the food price inflation, increased salaries of useless civil servants by 80% leading to the fiscal deficit and forgave loans to farmers, encouraging them to take more loans for parties and buying consumer goods because they know they do not have to pay back? Our Current Account Deficit was 6.7% in the third quarter and Foreign Direct Investment fell to $27 billion in 2012 compared to $32 billion in 2011. The good news is that gold price has fallen from a high of $1900 a troy ounce to $1530 with signs of falling further. People will stop buying gold thus relieving some of the pressure on the CAD. The bad news is that the economy is slowing with car sales falling by 22.5% in March from 233,151 units in 2012 to 180,675 units this year. Less sales mean less tax collections, less investment by companies, less employment opportunities and slower growth. Consumer Price Index was 10.39% in March, down from 10.91% in February leading to a chorus for lowering interest rates by the usual imbeciles. Total external debt has risen from $345.5 billion to $376.3 billion at the end of December. It may not be much for a $1.9 trillion dollar economy but it is certainly much more than our foreign currency reserves at $295 billion. Non Performing Assets in our banking system has risen to 4.18% from 3.22% at the end of December. Economics also needs patriotism. Policies designed only to win elections result in calamity. We suffer.

We should learn from the Americans.

Cables, sent by US ambassadors in the 1970s and leaked recently by Wikileaks, are amazing in their detailed observation of a confusing country like India and their perspicacity. The US administration had more knowledge of the workings of our government and the relationships between various actors than the people, the press and maybe even our politicians. In his first meeting with Indira Gandhi Ambassador Daniel Patrick Moynihan told her that President Nixon wanted to explicitly " stress " that America would not " supply lethal weapons to any nation of the subcontinent ". In one cable he said that Indira Gandhi's response can be " completely unpredictable ". " In a word, we hope for a normal relationship with India as of one world power with another," he said. This shows that even though the government was completely bankrupt and begging for money there was still some respect for our country. Compare that to now when the US gave word to Pakistan not to use drones against Lashkar e Toiba camps in Pakistan Occupied Kashmir training terrorists to be sent into India. The US continues to supply Pakistan with fighter aircraft, night vision goggles and means of making smart bombs while forcing India to stop buying oil from Iran to protect Israel. Even after the attacks on Mumbai our most revered Prime Minister went on " bended knees " to Sharm al Shaikh to beg for peace with Pakistan, we allow their actors to work in Bollywood films making millions, we have started a Samjhauta Express to Lahore to help terrorists to come in comfort and we even started playing cricket with them. And what did we get in return. The mad dogs came across to kill and behead our soldiers. On a visit to Assam in 1974 Ambassador Moynihan was shocked at the levels of immigration from Bangladesh. " The overriding problem in Assam perhaps is the rising population pressure. The state has the highest demographic growth rate in India - 3.7% - reflecting rapid natural growth and continuing immigration from Bangladesh and Nepal. This has caused grave economic and ethic/political problems which can be expected to worsen," he wrote. Since then Assam has had periodic riots and trouble with the ULFA, brutally put down by the Congress while helping Bangladeshis with identity cards. The complete control of The Family was so evident. Indira Gandhi wanted to get rid of SS Ray, Chief Minister of Bengal because Sanjay Gandhi did not like him. A cable reported that the " prestige of Sanjay Gandhi has been placed on the line in this affair, and for Ray to remain in office indefinitely would be a serious loss of face for him ". The malign control of the family continues to this day. At least Indira Gandhi was Indian and saw her future entwined with this country. Today we are being ruled from abroad. Thanks to the Americans, we are finding out.

Flying around will increase air miles but not growth.

Our most revered Finance Minister has been flying around from hither to thither to rally the troops so that they are inspired to invest more in the economy, fueling a growth spurt just before the elections. He can almost smell the marigold garlands and taste the ghee in laddoos as he comes back in triumph to the Parliament. Never mind that his election in 2009 is still disputed but thanks to our sympathetic judges that has become irrelevant. Why is he flying around like a little birdie? Seems that new project announcements have fallen by a massive 92% compared to the peak seen in March 2009. They are down 75% compared to the last financial year to Rs 662 billion. The slowdown is across the board in all industries, with manufacturing down 87%.  It is down 24% compared to the March quarter last year. Livemint, 7 April. Bank loans, which are an indicator of investments, grew by 12.9% in the current fiscal when it was expected to grow by 15.5%. Not just new investments, old projects have stalled as well. 215 old projects, worth Rs 2.5 billion each, are not moving, making a total of Rs 7 trillion and 127 new projects worth a total of Rs 3.5 trillion are stalled. That makes a grand total of Rs 10.5 trillion worth of projects stuck in limbo. That is about 20% of bank loans exposure. Banks have lent just Rs 540 billion so far. Seems that money is not a problem although we are told that liquidity is so tight that banks are having to borrow Rs 1 trillion everyday from the Reserve Bank to continue working. Anyway the main reasons seem to be land acquisition, reliable coal and gas supplies and clearance from environment and forest ministries. " Corporate lending, that forms almost 65% of bank sector loans will lead the slowdown in FY 14 owing to drying up of capex ( capital expenditure ) pipeline and much lower infra ( infrastructure ) loans together with some moderation in WC ( working capital ) loans. Moreover, fresh loan approvals are down an estimated 60-70% year-on-year," said Bank of America and Merrill Lynch analysts Rajeev Verma and Veekash Gandhi. Oh dear. The World Famous Economist keeps assuring us about sizzling growth while these boys are talking about a slowdown this year. The remedies are so simple. Reduce the number of ministers from 53 to 15. The more the ministers the more the loot. Stop lying about " inclusive growth " which is grand larceny of taxpayer money to bribe the electorate. Instead of social programs spend money on roads, electricity, telecom and coal. Do not auction natural resources at the highest price. Instead auction profit sharing which will keep costs down. Finally raise interest rates to control inflation while lowering taxes to stimulate spending which will result in growth. Trouble is, they will have to admit that they are in a huge pile of dung. Perhaps better to collect air miles. Maybe useful after elections.

Tax bullying never works.

Foreign Direct Investment in India fell by 39% to a paltry $19.1 billion between April and December 2012 compared to the previous year while the Current Account Deficit has grown to 6.7% of GDP in the third quarter. The desperate government is trying finance the deficit by increasing the limits on foreign investment in bonds and by increasing interest paid on bank deposits by Non Resident Indians. This is hot money and could flee any time but FDI is stable and long term and so much more beneficial. With labor costs jumping in China, increasing bullying by the Chinese government and the tension on the Korean peninsula we should have seen an increase but it has fallen precipitously. The reason is that our tax laws are hazy and confusing and that gives the country a bad reputation. On 30 March Shell India was asked to pay Rs 50 billion in taxes by our tax officers. Shell had sold its shares to its parent company for Rs 10 a share, which would be its face value, but the tax fellows say that the shares should have been sold at its market price of Rs 187 a share. Thus this was seen as " hidden income " and a tax demand followed. This is known as transfer pricing and at least 20 multinationals are facing tax demands for this alleged offence. ET, 11 April. Vodafone is facing at least 3 tax demands for transfer pricing in addition to the original demand of $2 billion which accrued when it did not deduct tax from the $11 billion it paid for the purchase of Hutch Essar from Hutchison Whampoa through a Cayman Islands branch. Vodafone won in the Supreme Court but the demand persists. Total demand on Vodafone could be as much as Rs 150 billion which is almost half of its turnover of Rs 320 billion in 2011-12. How is it that companies pay up quietly when demands are made in the US or Europe but cry foul whenever any demand is made in India? It could be because our taxes are too high or there are too many taxes with the center, states and municipalities all with begging bowls or they are too confusing with loopholes deliberately left in to help politicians and their friends avoid paying any tax while ordinary citizens are being squeezed dry. Yesterday the French President Francois Hollande said that he is going to " eradicate tax havens in Europe and the world " because he desperately needs money for his socialist agenda, just like the Congress does in India. However, it is unlikely that he will succeed. Even if all tax havens were to close what will he do about countries that openly charge low rates of corporate and individual taxes like Ireland and Singapore? Rich people and MNCs will just move to these countries to take advantage of much lower rates while France and India will still lose out. When countries compete for foreign investment the only way is to have low and simple tax rates. But then where will they get the money to bribe the electorate?

We need more leaks.

Criminal politicians and thieving civil servants exercise their malign power over us through secrecy. We do not know what deals are being struck behind closed doors, why we allow Pakistan to keep killing our citizens by sending terrorists into India or why Krittika Biswas was tortured in New York for cyber bullying while the Chinese scoundrel, who was actually responsible, was treated with fear. A lot of our weakness is because our politicians and civil servants are being blackmailed by mainly western governments who have paid them bribes but these days competition among news channels is shining a light on many crooked deals which would have remained unknown previously. That is why the present revelations of US cables by WikiLeaks, released by Hindu, during the long ago rule of Indira Gandhi are so satisfying. Seems that Mr Rajiv Gandhi was acting as " entrepreneur " for the Swedish firm Saab-Scania when it was trying to sell its Viggen fighter aircraft to India. The cable says," Swedish emboff has informed us that main Indian negotiator with Swedes on Viggen at New Delhi end has been Mrs Gandhi's oler ( sic ) son, Rajiv Gandhi. Latter's only association with aircraft industry ( to our knowledge ) has been as a pilot for Indian Airlines and this is first time we have heard his name as entrepreneur." At this time Mr Rajiv Gandhi was not interested in politics and it was widely assumed the Mr Sanjay Gandhi would become leader of the Congress after Mrs Indira Gandhi. So, apart from conflict of interest, Mr Rajiv Gandhi did not do anything wrong. In the event India chose to buy Sepecat Jaguar airplanes from Britain. So, no story there. What is interesting are the words - " Swedish emboff ( which would mean embassy official ) has informed us ". This shows that there is intense collaboration between western countries in intelligence gathering and they keep each other informed about anything they learn. This may explain why India has always lost the wars our soldiers won by sacrificing their lives. Why we gave away every inch of territory at Tashkent following which our then Prime Minister, Lal Bahadur Shastri mysteriously died. Why we refused refueling to Israeli planes who wanted to take out Pakistan's nuclear installations. Why hundreds of thousands of our soldiers sat around on the front lines for 6 months but did not fire a shot after the attack on our Parliament, costing hundreds of billions of rupees. Why our Prime Minister went on bended knees to Sharm al Sheikh to beg for peace with Pakistan after the Mumbai attacks. Why China is building 3 dams on the Brahmaputra in Tibet which will turn Assam into a desert. Why Sri Lanka keeps killing our fishermen while we wring our hands in anguish. Allowing the hijacked Indian Airlines plane to take off from Amritsar was pure cowardice. 64 years later we still not independent are we?

India desperately needs a Margaret Thatcher.

Even as right wing conservatives were mourning the death of Baroness Margaret Thatcher, Prime Minister of Britain from 1979 to 1990, from a stroke yesterday left wingers were celebrating with champagne and dancing on the streets. Such levels of adulation and hatred were because of her absolute conviction in her principles, in a free market and in individual freedom and her absolute refusal to compromise with those who disagreed with her. She became Prime Minister by defeating James Callaghan after a winter of discontent when strikes by public sector employees caused traffic disruptions and piles of rubbish on streets. Thatcher saw union power as a block to progress and took them on. She passed laws forcing unions to hold secret ballots before calling a strike. Eddie Shah took advantage of the new laws to force unions to compromise. Rupert Murdoch transferred his titles to Wapping breaking the back of Fleet Street print unions. Derek Robinson, dubbed " Red Robbo " by the press, was a shop steward at the Longbridge plant of British Leyland in Birmingham. He was sacked in 1979. Arthur Scargill, President of the Mining Union, organised a strike of miners but lost. Ken Livingstone, Leader of the Greater London Council, suddenly found himself without a job when the all the county councils were abolished in 1986 to cut costs and reduce taxes on people. Surely we should get rid of all municipal corporations in India which are the main sources of rampant corruption in the country. This will reduce one level of politicians and civil servants, save vast sums of money and reduce local taxes. Unfortunately, Thatcherism gave rise to New Labour and Tony Blair, a slimy war criminal, who deregulated the financial sector, privatised monopoly services like water and railways, leading to a huge rise in bills, and virtually destroyed the NHS. When Argentina invaded the Falklands in 1982 many, including the US, advised caution but she sent a task force and won. The victory was mainly due to American help who monitored the Argentinian navy and air force from satellites allowing the Brits to strike them at will. We do not know what she promised the US in return and whether this was what forced Tony Blair to join Bush's stupid attack on Iraq in 2003, leading to him being ridiculed as a poodle of George Bush. When Obama referred to the Falklands Islands by its Argentinian name of Las Malvinas recently the Brits were nearly having fits. The present Conservative Prime Minister, David Cameron's fervent desire to be like Thatcher made him bomb 30,000 Libyans to death when the UN resolution permitted the protection of civilians only. Even after the Mumbai attacks our leaders went on " bended knees " to beg Pakistan for peace and even resumed cricket matches. Whatever her faults, India desperately needs someone like Margaret Thatcher.

A lost generation.

This Congress led government has been dishing out rights to poor people. One such is the Right To Education which has done away with examinations so that children are promoted without anyone knowing the level of their knowledge. TOI, 6 April. The result has been dire. The latest Annual Status of Education Report 2012 by the NGO, Pratham says that there has been a sharp decline in the level of knowledge in children in the 3 years since the act came into effect. Fifth grade children who can read second grade text has fallen from 50.7% to 41.7%. Fifth grade children who can do a two digit subtraction by borrowing has fallen from 70.9% to 53.5%. This act was never about children or education but was born out of perverted socialism which seeks to force children out of private schools, by closing them down, into government schools run by partially educated and truant teachers. The act specifies all weather playground, well equipped library, separate toilets for boys and girls, fence around school, proper sports equipment, maximum student teacher ratio and minimum hours of instruction. Poor people are desperate to admit their children into private, English speaking schools to give them a better start in life but most such schools will now have to close. However, in a cynical piece of electioneering gimmick the Congress mandated that private fee paying schools, even those which did not receive any government assistance, will have to reserve 25% of seats for children of poor parents, thus adding an extra tax on the middle class. Our Fearless Leader even bragged that they have recruited another 700,000 teachers for government schools. So what kind of teachers has the Congress recruited to teach our hapless children? In the Central Teacher Eligibility Test, which is compulsory for aspirants, only 4,849 out of 796,000, that appeared in the exam, managed to pass one of Papers I and II. Paper I is for teaching children from class 1 to 5 and Paper 2 for those wishing to teach in classes 6 to 8. All the candidates had the Bachelor of Education degree. TOI, 3 January. Salaries of government school teachers were increased by 80% in 2008 to win elections in 2009 so that they now earn far more than teachers in private schools. Perhaps to hide this scandal the Congress is determined to shut down private schools. If basic education is so poor it is not surprising that companies are finding it tough to find entry level candidates. Pharma company Lupin has to spend Rs 25,000 on every recruit while IT company Heaware Technologies spends Rs 30,000 on each of its recruits. " While the absolute numbers look encouraging, industry-ready candidates with the required life skills and technical competence are very low," said Divakar Kaza, President Human Resources, Lupin. TOI, 8 January. But maybe the Congress has been very successful. They have managed to produce an entire generation of aam aadmi to remain khas.

" Inclusive growth " is the shortest road to bankruptcy.

A massive robbery of taxpayer money is underway. It is called Kisan Credit Card. This allows farmers to borrow money at 7%, the government adding 2%, which is called " subvention " ( where the hell do they find these words? ). This nefarious scheme was set up in 1998-99 by Mr Yashwant Sinha of the BJP to provide assistance to farmers in case of crop failures or other emergencies. The idea was to help farmers in crisis to prevent them falling into the clutches of rural moneylenders. Public sector banks are required to lend 40% to priority sectors, of which agriculture is the biggest since 70% of population are engaged in it and so it makes the largest " vote bank ". Credit worthiness is not an issue and banks do not insist on repayment. Farmers maybe illiterate but they are not stupid. They are using this money to buy luxury items and for parties. Livemint, 04 April. " The interest subvention has distorted everything in this segment," said a banker who refused to be named. " The true purpose of this instrument was to make cheap credit available to the poor farmer. But many farmers draw such loans deliberately for consumption purposes. Banks, too, need to lend to this class of borrowers to meet priority lending targets." Total outstanding loans to KCC exceed Rs 2 trillion. However, the Chairman of a large PSU bank said," We increase credit limit only when the farmer repays fully. There are no major concerns." What he meant was that new loans are issued to enable farmers to pay off the old ones in a process called " evergreening ". In the 2 years to March 2012, the number of cards grew by 28% and loans by 76% which means that most loans went to previous card holders. Gross Non Performing Assets at Indian banks is Rs 1.75 trillion, up 43.1% from Rs 1.25 trillion a year ago but exposure to the agriculture and allied sectors is Rs 5.6 trillion as of January 2013 compared to Rs 4.3 trillion in January 2011. A bad monsoon could escalate bad loans from farmers and make the NPA situation much worse. This colossal waste of taxpayer money is covered up as " inclusive growth " and is feeding into the government's debts. The fiscal deficit is expected to be 5.2% in the last fiscal and the Current Account Deficit was 6.7% in the December quarter. Only Panama, Ukraine, Turkey and Kenya are worse. China has a surplus of 2.5%, Hongkong 5%, Malaysia 5%, Philippines with more than 12 typhoons a year has a surplus of 2.8%, Singapore a massive 16.2% and Taiwan 8.7%. Indonesia has a CAD of 2.3%, Brazil 2.2% and Mexico 0.4%. ET, 04 April. As one official remarked when S&P reduced India's credit rating to BBB- last year," We made a presentation arguing India's growth prospects, tax-GDP-ratio, efforts to fix the fiscal deficit are quite genuine and deserve better ratings than countries like Tunisia." At least we will never reach the level of North Korea. Something to celebrate?

Are we breaking our own rules?

To great rejoicing the Supreme Court denied drug giant Novartis its claim of patent protection for Imatinib which is effective against Chronic Myeloid Leukemia, a disease with a very dismal prognosis. Under our Patents Act of 2005 new drugs are to be protected for 20 years but prolonging patent protection by making small incremental changes, a process called " evergreening ", is not allowed. Novartis was marketing a crystalline form of Imatinib under the name " Glivec " at a cost of Rs 120,000 per month while a generic version is being sold in India for Rs 8-12,000. The Supreme Court did not agree that the crystalline form was a novelty or showed a significant increase in efficacy and hence disallowed the patent protection claimed by Novartis. This is being seen as a victory for poor people everywhere and a blow to the unreasonable greed of big pharma. But is it? In an interview with TOI, 5 April Ranjit Shahani, MD of Novartis in India said that this verdict will mean that there will be no R&D in pharmaceuticals in India in future. "... all R&D investments in any case have moved to China with seven global companies having invested billions of dollars after the patent law was promulgated in India. These are Novartis, Roche, Sanofi, Pfizer, GSK, Astra Zeneca and Eli Lilly. Not a single investment came to India - that speaks loudly about the innovation ecosystem we have here," he said. He also said that Novartis was giving away Glivec for free in 95% of cases and in the other 5% " on a generous co-pay programme ". Surely if 95% of patients were getting the drug free how is it a victory if they have to pay Rs 12,000 for the generic version? In fact, the original patent for Imatinib was granted in the US on 28 May, 1996 and is set to expire on 4 January 2015. The patent on the crystalline form is set to expire on 23 May 2019. If our laws grant protection for 20 years even the original version is protected so it is difficult to understand how the argument of " evergreening " is justified. This so called victory will encourage other companies to break patent protection at will. Already Merck is suing Glenmark for selling Sitagliptin, a new anti diabetic drug, at 30% discount to its price. Sitagliptin, sold by Merck under the name " Januvia ", was approved by the FDA in the US on 17 October 2006 and so is well within its protected period. Trouble is that pharma companies have acquired a very bad reputation because of misdemeanors in the past. On 3 July, 2012 the New York Times reported that Glaxo had pleaded guilty to criminal charges in the US for suppressing adverse effects of its drugs and had been fined $3 billion. It was peanuts because Glaxo had already made $10.4 billion from Avandia, $11 billion from Paxil and $5.9 billion from Wellbutrin. Why have laws if we do not respect them?

Thank God for rare exceptions.

Apart from a rare exception all our civil servants are thieves engaged in looting the nation in cahoots with criminal politicians. That is why an honest civil servant, an extremely rare exception, is so very precious for us. Mr Ashok Khemka, an IAS officer was the Inspector General of Land Registration in Haryana when he found that the rules for village land use had been altered and land transferred to Mr Robert Vadra, son in law of Mrs Sonia Gandhi. Naturally, this raised a lot of stink last year and Mr Khemka received many death threats. The Congress government of Mr Bhupinder Singh Hooda reacted swiftly by transferring him to Haryana Seeds Development Corporation as Managing Director, keeping their fingers crossed. Sadly for them it did not work. Mr Khemka has alleged that the Haryana government gave a subsidy of Rs 600 million for the use of a fungicide, Raxil for the treatment of Karnal Bunt Disease when it was not registered for that disease. Its maker, Bayer Crop Science had not obtained registration in the last 3 years. Unable to keep a good man down the Haryana government has transferred him to Haryana Archives as Secretary. ET, 05 April. This is the 44th time Mr Khemka has been transferred. Wonder if the Congress has really thought this out carefully because with the archives at his disposal and plenty of time on his hands he could discover no end of worms in the past. Meanwhile the Election Commission has asked for political parties to report all donations given to political parties every year. Presently only donations in excess of Rs 20,000 has to be reported but the EC wants this limit removed. The Law Ministry has said that the the demand has been referred to the Law Commission which is working on electoral reforms but the EC is not buying that argument saying that it can be done under existing rules. We have to remember that elections in India are a massive exercise in money laundering where all candidates use millions in black money to bribe voters. This naturally gives criminals an advantage which is why there are more than 160 MPs in the present Parliament accused of serious crimes including murder, rape, kidnapping, armed robbery and so on. Meanwhile the Comptroller and Auditor general has discovered that the Punjab government has hidden Rs 31.94 billion, raised through taxes, into various state bodies to avoid scrutiny. The CAG says that tax money should all go to a consolidated fund and such diversion is " unconstitutional ". The CAG has found that ambulances at government hospitals in Delhi were being used for transporting medicines, doctors and even dead bodies. The Delhi Jal Board has lost Rs 39.50 billion due to short billing and there is no result from Rs 6 billion spent on augmenting supplies. Among rotten criminals a few rare gems. Thank God for that.

Entitlements lead to crime.

A particularly sickening story from the UK shows the depraving effects of entitlements. 56 year old Michael Philpott  lived with his 31 year old wife, Mairead, their 6 children, his 28 year mistress, Lisa Willis and her 5 children, of which 4 were sired by Michael himself. They lived in a house on Victory Road in Derby, rent free, provided by the local council. Philpott is known to have fathered 6 other children with 3 other women. He never worked and lived on various allowances paid by the government such as unemployment benefit and child support. He drew an astonishing 60,000 pounds a year in benefits when the average salary in the UK is just 26,500 pounds a year. Mairead and Lisa used to earn up to 14,000 pounds working in houses which went straight into his account. He smoked, drank, smoked grass, had 2 wide screen TVs and had converted one room to take a full size snooker table while the children slept in 3 rooms upstairs. He became so confident about his abilities to live on welfare that he appeared on Reality TV shows where he defended his lifestyle saying that he was a responsible person who loved his children. Last year his mistress Lisa Willis left him along with her 5 children. Crucially she took away 1000 pounds per month in benefits with her. He tried to make her come back and when she refused he started custody proceedings against her to get back the children. The children were his meal ticket and benefits financed his life of luxury without ever doing any work. To increase his chances of being awarded custody of the children he hatched an evil plot with his best friend, 46 year old Paul Mosley who used to join him in drinking and sex. He would set fire to his house making it look as if Lisa Willis did it and would rescue his children, becoming a hero himself. He even set up a ladder against the house to reach the windows of the rooms where the children slept upstairs. During the early hours of 11 May 2012 he and his wife poured petrol at the foot of the stairs, passed the can to Paul Mosley outside and set fire to the petrol. Unfortunately the fire quickly spread to the whole house incinerating the 6 sleeping children. The whole town was consumed with grief at this enormous tragedy and people raised money for the funerals of the children. Philpott told them that if any money was left over they should hand it over to him in Argos vouchers. He even wanted to auction the teddy bears left outside the charred house as tokens of grief. Today he was sentenced to life in prison, minimum 15 years, Maireed and Mosley are to serve 17 years each. This is a horrific example of the depravity that free entitlements generate in a man. This may explain the rapes and killings in India where poor people are given money, free food and medical care for nothing. They are robbed of any feeling of responsibility or citizenship. They grow up with a sense of rights but no duties. Thus when they want a woman they rape her. Worse is yet to come.

The Indian fiscal cliff.

Car sales fell again in March as they have been doing in the last year. Hyundai Motor sales declined 13.86% from 39,122 to 33,858, Tata Motors fell 66.62% from 36,984 to 12,347, General Motors fell 14.94% from 10,588 to 9006, Honda Cars fell 8.82% from 11,016 to 10,044 and Ford India fell 41.61% from 9,028 to 5,271. TOI, 2 April. Renault India jumped 8 fold from 1,005 to 8,232. These are such pathetic numbers that it is a wonder that these foreign companies still see fit to waste their time in India. High taxes and scorching inflation have left little money in people's pockets while sky high salaries at car companies mean that they have to keep raising prices, which will reduce sales still further. In some companies workers are earning between Rs 50-100,000 per month, astonishing salaries equivalent to mid level managers in banks and other businesses. Production in 8 core sector industries fell 2.5% in February, the first time in the last financial year. Natural gas fell 20%, Coal 8%, Electricity generation 4.1% and Crude Oil by 4%. Without energy our manufacturing cannot grow and without that our deficits will continue to grow as we import more from abroad. Taxes do not just rob money from the people, which they do, but they rob people of something even more valuable, which is time. To pay any tax you have to apply for a PAN or Permanent Account Number. To pay sales tax or VAT you need a TIN or Tax Identification Number, to pay Service Tax you need a Service Tax Number and to pay any tax deducted at source you need a TAN or Tax Account Deduction Number. To get these numbers you have to find the right government offices, face huge amounts of time wasting and rude behavior. But you cannot pay taxes unless you prove who you are by providing photographs and address proofs to prove that you are not a terrorist while Musharraf, who was responsible for the Kargil attack, was an honored guest in India in November. So naturally you will take advice from a tax consultant. Not so simple. There is Service Tax on tax consultation which will be passed on to you so you end up paying tax to pay tax. Is it any wonder that foreign companies are reluctant to do business here? Domestic air traffic fell by 3.57% in the first 2 months of this year, from 10.395 million last year to 10.023 million this year. The reason given is that number of flights declined because Kingfisher failed. Lies. Why has Spice Jet reduced ticket prices to attract passengers if its flights are full? The only remedy is to increase interest rates to control inflation while cutting taxes to stimulate demand. Sadly our most revered Finance Minister said yesterday," But government is always pro growth and government will always argue for lower interest rates." Desperate to somehow prevent a collapse of the economy before general elections. After that, the country may fall off the cliff. Into an abyss. Who cares?

Political discourse in India.

The sixth edition of the IPL, a private version of twenty:20 cricket, starts today. It normally generates lots of excitement but this year our politicians have decided to entertain the people. For free, which is generous of them. Mr Mulayam Singh Yadav, MP and Chief of the SP, tried to york the Congress first up by saying that the Congress " are so clever and such cheats that people believe them all the time ". Mind you, he immediately made amends with a gentle full toss by saying that he had no intention of withdrawing support from the present government and thus precipitating general elections. Mr Beni Prasad Verma replied by trying to hit him for a six. Who he? He is supposed to be the Union Minister for Steel. He said that there will be a " funeral procession " of SP candidates in the next Lok Sabha elections, predicting that they will win only 4 seats. Worse he tried a reverse sweep by saying," I said yesterday that SP will win 4 seats; it is my analysis. They have betrayed the people, in particular, the minorities." That had to be a very red rag to the bull because SP will sell the majority for the votes of the minority. The SP tried to trip Mr Verma while he was running by demanding his removal from his chair as minister as he had lost his " mental balance ". Not easy. We know that Indian politicians are fixed to their chairs with super glue and will plumb any depths to stay there. Besides " mental balance " has never been requirement to be an Indian politician. Mr Akhilesh Yadav, Chief Minister of UP and son of Mr Mulayam, tried a googly saying," Parties which struggled to get 5000-10,000 votes in assembly polls in most of the constituencies will be able to win not more than 4-5 seats out of 80 in Lok Sabha elections." To take him on the full Mr Verma danced out of his crease by saying," Mulayam has cheated Muslims...He did not do anything to save Babri Masjid." Before Mr Verma had time to recover Mr Ram Gopal Yadav had a go at the stumps by saying," Beni Prasad is my elder and had been in our party for quite a long time. I can understand his frustration because his son lost twice before our candidates. When he contested from Ayodhya, he managed to get just 400 votes." TOI, 31 March. The SP then tried bodyline when Mr Shivpal Yadav said," You all know and you have also read that Beni Prasad smokes a lot...These days he is smoking a lot...he mixes something in the tobacco. He should undergo treatment. You have read also that he is into smuggling of opium. He mixes charas in his cigarettes. He is doing both these things. So his mind maybe affected." This was on 1 April so it could be an attempt at fooling us or it could be opium for the masses. Other teams such as the BSP and BJP are watching from the sidelines hoping for a tie so that they can get ahead. Entertaining, but we prefer the cheerleaders.

Foreign finances as bad as domestic.

Foreign Direct Investment fell to a paltry $27 billion in 2012 compared to $32 billion in 2011. This is investment in business and manufacturing and as such is relatively stable and long term. China had FDI of $111.62 billion in 2012, more than 4 times as much. Foreign Institutional Investment, which is hot money invested in shares and bonds, was $25.6 billion in 2012, an increase 700% over 2011 when there was a marginal outflow. This is because western central banks are pumping excess money into their banks to encourage lending to businesses and for mortgages by buying up bonds, known as Quantitative Easing. Once US and European businesses start to expand again and the housing markets pick up this money could suddenly flow out bringing down the stock markets and the rupee.  Livemint 31 March. " Assuming India has a trade gap of $60 billion, at least $30-35 billion should be funded by foreign direct investment to bridge the deficit," said A Prasanna of ICICI Primary Dealership. Investment Income Outflow, which is interest and dividend payments on foreign liabilities, increased to $17.8 billion between April to December 2012. Short term credit rose 74% from $92 billion to $160 billion and total external debt is $376.3 billion. The government may feel that there is no threat with foreign currency reserves of $295 billion, equivalent to 6 months' imports, but things could become decidedly sticky if fund flows reverse suddenly or if speculators start to sell off the rupee. Thus the government is funding its foreign spending, most of it due to the purchase of oil and gold, from short term investments. This situation is very similar to what is happening in the domestic sector where public sector banks are financing long term lending in infrastructure and mortgages from short term deposits. While foreigners are pouring money into our share markets domestic mutual funds and insurance companies withdrew a record Rs 690.58 billion from stocks. Investors have been pulling money out of stocks for 9 straight months which is the longest in the last 5 years. They have pulled out a total of Rs 153.55 billion. In desperation the government has started the Rajiv Gandhi Equity Savings Scheme which seeks to ensnare naive first time investors in Indian shares. This gives tax relief on Rs 50,000 invested in shares for those who have never invested in shares and have income up to Rs 1 million a year. This type of investors are mainly to be found in small towns and villages so Asset Management Companies are swarming in such areas offering up to 6% commissions to trap as many people as they can. " The commissions paid by some fund houses are indeed very high. It is a mad rat race," said Nilesh Sathe, CEO of LIC Nomura Mutual Fund Asset Management Co. It is like a high wire act without a safety net. Scary.