The illness is the same but the treatment diametrically opposite.

After the near collapse of the global economy in 2008 central banks in the west have had to grapple with similar problems. Recession, a collapse in house prices, rising unemployment and high debt levels in some countries. However, the response of governments have been diametrically opposite. While the US chose to stimulate the economy with the Federal Reserve buying bonds worth $85 billion every month to increase money supply Europe and Britain have chosen austerity by cutting government spending, reducing salaries and pensions of civil servants and cutting government jobs. One would think that government policies would be dictated by economic logic so how can opposites be right? Asian countries are widely different. While China is growing at around 8% but has a huge property price bubble Japan has been suffering deflation for over a decade. Prices fell 0.4% in April, the 6th straight month of decline. Prime Minister Shinzo Abe won elections by promising a huge stimulus which will continue until Japan has an inflation of 2%. Bank of Japan Governor, Haruhiko Kuroda has promised to inject $1.4 trillion into the economy in less than 2 years. One result of loose money has been a fall in the value of the Yen which has fallen to 101 to the dollar from 76 to the dollar last year. This has helped Japanese exports by making them cheaper compared to those of other countries leading to a danger of tit-for-tat devaluation of currencies leading to a currency war. Switzerland, New Zealand and Japan are openly intervening in foreign exchange markets. Livemint, 29 May. Central banks around the world have cut interest rates around 515 times since 2007. With interest rates at near zero levels and commodity prices low because of falling growth funds have poured money into stocks which have been rising all over the world. At some point banks will have to start tightening monetary policy again. But easy money is addictive. Stock markets all over the world fell sharply on 23 May when Fed Chairman, Ben Bernanke told lawmakers that the stimulus will be stopped once the Fed was sure of the economic recovery. One thing all these countries have in common is very low inflation which allows central banks to ease monetary policy without fear. Not so in India. Here the CPI was 9.39% in April from 10.2% in March. Even so the RBI is cutting interest rates because of political pressure. Property prices are sky high, growth is falling, government spending is out of control because of wasteful social programs to win elections and industrial production is falling because of falling demand. Does anyone know what he is doing?

How many Lehman Brothers do we have?

It was the collapse of Lehman Brothers in the US that taught us a new lexicon of words - toxic assets, credit default swaps, subprime mortgages, all to describe different types of bad loans. Indians were smug at that time because our banks are strictly controlled and not allowed to play with weird financial instruments. Trouble is that the strict rules are for private and foreign banks but not for public sector banks which are much larger and majority owned by the government which means that politicians can force banks to lend vast sums for political reasons, without adequate safeguards. Today the Congress is not so powerful as to organise loan melas, as it did in the past, where bundles of notes, raided from PSU banks, were distributed to the poor. Today the robbery is disguised as " inclusive growth " and given fancy names such as NREGA scheme and Backward Regions Grant designed to distribute money to win elections. The largest PSU bank in India, the State Bank of India has reported that its Non Performing and restructured assets have gone up from Rs 28.38 billion in December 2012 to Rs 86.69 billion on 31 March 2013 which is 7.73% of total advances. This apparently means that NPAs which have not been provided for account for more than half of the net worth of SBI. Livemint, 27 May. Which is equivalent to writing down its value by half. In the case of many PSU banks the NPAs without provision are more than the total net worth of the bank. A Parliamentary Standing Committee reported that more than Rs 830 billion worth of corporate loans had turned bad in the last year and a half. Between March 2011 and December 2012 NPAs increased by 190%. Also it is not specific companies in trouble but entire sectors. Real estate, power, infrastructure and steel account for 85% of NPAs. We know why. While Congress fellows were swanking around in Davos drunk with false hubris they allowed a huge bubble to build up in properties leading to uncontrolled increase in black money and skyrocketing inflation. Coal mines were distributed to friends and relatives who waited to offload them at a higher price so now we are having to buy from abroad. Roads and airports projects were awarded at a premium leading to losses and very high tolls and airport taxes. In a classical Catch 22 situation unless these sectors improve the economy cannot grow and unless growth in the economy picks up these sectors cannot grow. Of course, PSU banks can always be recapitalised by printing money, but that will cause the rupee to fall. Which is happening even now. The US had only one Lehman. We are so lucky.

Crying wolf one more time.

The propaganda channel, BBC reported yesterday that the embargo on arms supply, imposed by the EU, on rebels fighting against Bashar al-Assad's forces in Syria has been lifted. The truth is that the embargo was due to end on 31 May and, though other countries wanted it to continue, it was not renewed because of opposition by Britain and France, since the EU works by consensus and requires all member countries to agree. British Foreign Secretary, William Hague was cock-a-hoop saying that this sent " a clear message to the Assad regime that it has to negotiate seriously, and that all options remain on the table if it refuses to do so." Of course, it will. The Assad regime will offer peace negotiations with the rebels, a new constitution and democratic elections provided they lay down their arms and he remains the president. Last year all western news channels were predicting a swift rebel victory within weeks and there were reports that his wife, Asma and his 3 children had already taken refuge in Russia. One year and 80,000 deaths later the talk has changed. Iran has always been an ally, supplying arms. The question was whether the Revolutionary Guard were merely advising the regime or actively helping in the fighting. Now the Hezbollah has openly joined the fighting for the town of Qusayr which will allow government forces in Damascus to link up with its strongholds on the coast. 141 Hezbollah fighters have been killed, 79 in the last 10 days. Hezbollah is an offshoot of Iran and its arms supply comes through Syria so a Sunni victory will seriously weaken it. Britain and France will be taking a big chance if they supply arms to the rebels. The strongest faction is the Jabhat al-Nusra, whose chief has said that it owes allegiance to the Al Qaeda leader, Ayman al-Zawahiri. In 2011 Cameron and Sarkozy obtained a UN Security Council resolution allowing active protection of civilians in Libya from the forces of Gaddafi. They manipulated that resolution to use NATO planes to bomb Gaddafi's forces, killing 30,000 people, and attacked his convoy, resulting in his capture and execution. Russia and China have not forgotten that blatant deception and have vetoed every resolution on Syria. Following the lapse of the arms embargo Russia said immediately that it will supply latest generation S-300 long range missile defence systems to protect against NATO bombing. The irony is that Bashar trained as an ophthalmic surgeon in Britain and Asma was born and educated there. Two deeply unpopular politicians, Cameron and Hollande want to resurrect their careers by killing Syrians. Everybody sees through their lies.

Can we hang on or is a fall inevitable?

Even today the World Famous Economist has assured us that the Indian economy will grow at 8% again. But why does he keep on talking in platitudes, why does he not give us a lecture with detailed figures showing expected revenue growth, inflation, deficits, the effect of the global economy, expected commodity price pressures and how our trade will shape up in the medium to long term? Because he cannot. Either he has no knowledge or because he just bends over and obeys orders to waste vast sums of money on suicidal social schemes just to cling on to his chair. So we must decide best as we can. In 2012 Foreign Direct Investment, which is stable long term investment, fell 7% to just $29.3 billion. In China FDI fell by 10% but was 5 times as much at $111.6 billion. Capital investment rose just 2.5% in the last financial year, it rose 14% 2 years earlier. msn.com, 17 May. Car sales fell 7% last fiscal and General Motors expects it to fall 2-3% this year. The economy grew by 5% last year and is expected to grow by 5.7% this year but already there are doubts about this. Some experts reckon that growth maybe just 4.8% . That is in spite of the huge stimulus of black money spending that will be unleashed by elections in Delhi, Rajasthan and Madhya Pradesh this year and Chattisgarh in January 2014. General elections must be held by May of next year and the chattering classes are busy speculating whether the Congress will hang on till the last moment praying for some miracle rescue of the economy or they will cut and run expecting to be trounced in the states. There are some dribbles of good news. M&A has brought in $9.8 billion this year, with Unilever spending $5.4 billion to raise its stake in its subsidiary, Hindustan Unilever. The Wholesale Price Index fell to 4.89% in April and the Consumer Price Index to 9.39%. That is about it. People showed their complete mistrust of our Great Leader and his band of bandits by buying 256.5 tonnes of gold between January and March this year and the expectation is that we will import 1,450 tonnes of gold this year compared to 950 tonnes last year. Livemint, 13 May. We hear that petrol prices will go up by Rs 4 per liter although oil is at $94 dollars a barrel with Brent at $102 today. This is because the rupee has fallen to 55.93 against the dollar, increasing prices of imports, and is expected to fall even more. The rupee is hanging on because Foreign Institutional Investors have poured $14.5 billion or Rs 790 billion into India this year. Remittances from NRIs was $69 billion last year, the highest in the world. We are just clinging on. But for how long? 

Are we becoming naked apes.

Seems that employers in the west are suspicious of appointing anyone who does not have a Facebook page. TOI, 26 May. Apparently, mass murderers like Anders Breivik of Norway and Aurora theatre killer James Holmes did not have any Facebook account. It is as if not exposing your private being for anyone to read means that you have something to hide. But, apart from language, an opposable thumb and an upright posture, the need for privacy is what distinguishes us from animals. We spend our entire lives surrounded by walls, windows which can be closed and doors which can be locked to enclose a space which no one may share without invitation. We are born inside walls, usually in a hospital, live in a house or apartment surrounded by walls and and have an address which is unique so that our post can reach us from anywhere in the world. Even inside our enclosed space we have divisions. The bathroom is for personal use, the bedroom maybe shared with wife or husband and children while the drawing room is for guests who have been allowed in. If anyone enters without permission we would call the police. Yet, more and more people are exposing themselves to public scrutiny without any inhibition. There are interviews on TV where people describe the most intimate details of their lives without embarrassment. Kiss and tell books seek to make money from sordid details of sexual affairs. Deliberate wardrobe malfunctions in an age of digital cameras expose body parts for anyone to salivate over. Shyness, reserve and dignity have become forgotten  words. Perhaps it is a reaction to increased scrutiny by government agencies and marketing companies. In western countries there are CCTV cameras everywhere, their legitimacy supported by criminal or terrorist attacks. Pictures of the Tsarnaev brothers who carried out the bombings at the Boston marathon were seen all over the world and police in Paris had pictures of the man who stabbed a soldier in the metro station almost immediately. Stores have CCTV cameras to prevent shoplifting. We have become so used to being spied on that we go about our business like monkeys in a zoo. Government agencies have powers to monitor our phone calls and internet activities in the name of security. Banks cooperate to exchange borrowing behavior of customers so that all our transactions maybe easily traced. Internet companies such as Google and, yes, Facebook build up profiles of every user which they sell to marketing companies for targeted sales. It is as if like animals we are living and performing our most intimate functions for anyone to see. Perhaps we will regress to apes.

Terrorism has its uses.

Terrorist acts, with indiscriminate killing and maiming of innocent civilians going about their daily lives, fill us with fear, helplessness and rage. There maybe some justification in targeting politicians or security forces but what reason can there be for killing little children going to school? Surely the government would be equally angry and would use every means to make sure that citizens are protected at all times? They do, but they also use the opportunity to increase checks and controls on their own citizens. Thus, there was the Patriot Act in the US, secret trials in the UK and physical assaults on air passengers, including naked x-rays. But, it is in India where politicians really enjoy usefulness of terror attacks. There is no increase in community policing, no effective CCTV cameras and no fencing of our borders. Since Israel erected it security fence there have been almost no terror attacks on its territory. The Demilitarised Zone that separates the North from South Korea has prevented a land war for over half a century. But we do not build any such fence. Just yesterday an army Brigadier and 2 soldiers were injured when Pakistani troops entered our space and fired on them. A few months back Pakistanis entered Indian territory, killed Indian soldiers, beheaded 2 of them and carried their heads away. So how does our government respond to repeated killings of Indians? Firstly, by increasing protection of politicians. Every 2 paisa politician gets a chauffeur driven car with flashing lights and siren to bulldoze a right of way from other road users. Commandos armed with automatic weapons provide Z+ security cover. There are 7315 policemen providing cover for 416 VIPs in Delhi with 968 posted at Rashtrapati Bhavan. For taxpayers there is one policeman for every 500 which is why there is a rape everyday and one car is stolen every minute. As for those called VVIPs, all roads will be blocked when they are around. Patients have died because they could not reach hospitals. Even better a terrorist attack provides the excuse to pass ever more laws to control us. Know Your Customer rules force us to provide photos, photo identity and proof of address for any banking but, as a recent sting by Cobrapost showed, bank officials were keen to launder black money from politicians. Our phones or internet maybe intercepted any time without our knowledge or permission. The recent spot fixing scandal was apparently discovered because police were monitoring phone calls of cricketers looking for terrorists. Which Indian cricketer is a terrorist? Terrorism is provides the excuse. Our politicians take full advantage.

Conspiracies are such fun.

Various police forces in India are running around like fox terriers with the scent of a hot vixen in their nostrils to try and implicate as many people as possible for the spot fixing scandal in the Indian Premier League. The IPL is a very short version of the game called T20 in which each side gets to bowl just 20 overs. The teams are owned by various franchises who bid for players and hence have a mix of players from several countries. Although the basic rules are the same as in test cricket in that there are 11 players in each team, 2 batsmen at the crease and 2 umpires it has other rules, along with cheerleaders from the US, making it completely different. The IPL was started by Mr Lalit Modi in 2008 and was an instant success, raking in billions of dollars. This caused a lot of burning among politicians and civil servants who see it as their birthright to control every activity in India so that they can fill their pockets and leave behind enough for the next 10 generations. So in 2009 the IPL was denied security to hold matches because of general elections even though Indians would much prefer to watch exciting IPL matches rather than vote to elect one criminal political gang over another. Mr Modi took the IPL to South Africa and made it an enormous success there so he was hounded out in 2010 and took shelter in the UK. In April, 3 players playing for the Rajasthan Royals were arrested by the Delhi police for spot fixing wherein a player, usually a bowler, signals what kind of ball he is going to bowl. This has been prearranged with bookies who have taken bets knowing what is going to happen and thus make lots of money. Players get a cut. The question is why would anyone bet on Sreesanth, who regularly gives away lots of runs anyway, and 2 others who are unknown. The police case is built on the fact that Sreesanth had a towel tucked in his waistband. With Delhi sweltering at 46'C is it any surprise if a bowler needs a towel to wipe his hand to prevent the ball slipping out? Tennis players regularly have towels tucked in their waistbands, so are all tennis players guilty of spot fixing? Several bookies have also been arrested. Yesterday the Delhi police application to hold 3 bookies for 5 more days was refused by the Chief Metropolitan Magistrate who said," It has become very clear that the same ( application ) has been drafted in a very cryptic manner. Instead of disclosing the facts, it ( police ) is hiding information from the court. It is not clear what the agency has been doing with the accused ( Dole and Bhatia ) for the past five days." Delhi Police has been under great pressure for a succession of rapes in the capital. Of course, one has nothing to do with the other. A conspiracy is so much more interesting than silly spot fixing. Isn't it?

Indians are forced to be poor.

The government has allowed airlines in India to " unbundle " services which means that they will now be able to charge for each item of service. This was done apparently to bring down the cost of flying by allowing airlines to offer a cheap basic fare and then add a charge for each item of service so that passengers can decide how much they want to spend. We are told that this is the model followed in Europe and the US and is very popular with passengers. But this is India, where businesses make fortunes by gouging customers, in cahoots with politicians who pass laws to make it possible. The much derided Ryan Air will fly you from Stansted Airport in London to Madrid in Spain, a distance of 1263 km, for 31 pounds, to Turin in Italy, a distance of 958 km, for 29 pounds which is around Rs 2400 and to Porto in Portugal, a distance of 1586 km for 31 pounds which is around Rs 2500. Of course it charges for everything, including baggage, blankets, any aids for a baby and food. Last year it wanted to charge 1 pound to go to the toilet but had to drop the idea after it led to an outcry. Air Asia is charging around Rs 10,500 for a return trip from Bangalore to Kuala Lumpur in Malaysia, a distance of 2871 km. Compare it to India where the cheapest ticket from Vadodara in Gujarat to Delhi, a distance of 1028 km will start from around Rs 5,000. For this price you can carry a handbag and 20 kg of baggage and will only get water for free. From now on you will have to pay for every kilo of baggage, Rs 400 for a window seat and Rs 250 for an aisle seat, a charge for checking in at the counter instead of online and will not get a refund if you are unable to travel for whatever reason. Last year Mr Naresh Goyal, Chairman of Jet Airways said that air tickets in India are 300% more expensive than in China. Why so? Because of taxes. In addition to the base fare there is a fuel charge because tax on fuel may go up to 35% whereas other countries levy only 4% taxes. Then there is a service fee, a transaction charge, a service tax, a user development tax and airport tax. All these together can amount to more than Rs 2500, same as what Ryan Air charges to fly you a distance of 1586 km from London to Portugal. And these charges will never go away, they may increase with time. Why do politicians want to make it impossible for citizens to fly? Because they need money to buy 5 luxury planes for Rs 9 billion and 12 luxury helicopters for Rs 37 billion for their own use. Also prohibitive fares force people to travel by train where the government has increased taxes recently. High taxes keep the aam aadmi in place so that they are so grateful for NREGA and Food Security Bill that they will vote for you. Enforced poverty.

Is it another flimflam?

The Reserve Bank of India has announced that it is going to sell inflation linked bonds for the public, starting this year. TOI, 22 May. On the surface it sounds an awfully good idea. At present we keep money in fixed deposits in banks which pay up to 9% interest depending on the duration of the contract. But our money is losing value because the Consumer Price Index was 9.39% in April, down from 10.2% in March. To hedge against inflation people buy gold, even though the price of gold has dropped from $1900 a troy ounce to $1385 today,  thus increasing our trade deficit. The Trade Deficit was $17.8 billion in April compared to $10.3 billion in March and $14 billion last year which is bad because it adds to our Current Account Deficit and could lead to a downgrade in our credit rating. So, sovereign bonds which guarantee our money will retain its value give us a totally safe opportunity for investment. The trouble is that the RBI is going to pay interest on the Wholesale Price Index which was just 4.89% in April although it could be revised as the WPI in February was revised from 6.84% to 7.28%. The bonds will mature in 10 years and the calculation of interest is hellishly difficult. The coupon or interest rate will remain fixed during the lifetime of the bonds and will be decided by auction. The expert view is that it will be 2%. The principal will be calculated according to the WPI and interest paid on that. So if the WPI is declared at 7% then the principal will be raised by 7% and interest at 2% will be calculated on it. So if Rs 1000 is invested in the bonds its value will become 1070 and interest will be Rs 214. The question is what happens to the principal once interest is paid out. Presumably it will remain at Rs 1000 until the next time interest is paid again. Which would mean that the RBI would paying simple interest whereas inflation compounds every year. For example, if something costs Rs 1000 and the inflation rate is 10% its cost will go up to Rs 1100. Next year the rise in price will be 10% of Rs 1100 and not Rs 1000. Assuming an inflation rate of 10% every year the price will rise to Rs 1331 after 3 years and not Rs 1300. Traders are betting that inflation will continue to fall in the longer term. Bond yields on 8.15% 2022 bonds have dropped to 7.40% from 7.74% a fortnight ago. Traders maybe betting on low commodity prices because of slow growth in the world as well as in India. So not only is the RBI paying a ludicrously low rate of interest but it will pay simple interest instead of compounding it and foresees paying even less in the future. Sounds like a flimflam. Is it possible that the RBI is fooling the people?

Safe buildings save lives.

The tornado that struck Moore in Oklahoma, USA 2 days back killed 24 people including 9 children, 7 of them in Plaza Towers Elementary School. The tornado packed wind speeds of 200 miles per hour, was 1.3 miles wide and continued for 45 minutes leaving a 20 mile swathe of destruction. This city of 55,000 people lies in, what is known as, tornado alley because of the frequency of these weather events. On 3 May, 1999 a tornado with wind speeds of 318 miles per hour or 512 km per hour, the fastest ever recorded on earth, hit the city killing 36 people. There were tornadoes in 1998, 1999, 2003 and 2010. After the latest tornado the city looks completely flattened with wooden boards sticking out like matchsticks. Survivors talked about doors and windows being blown out and being showered with shards of glass. That is the most amazing thing. If this city is known for such violent storms why are the homes built with wood and not with cement and concrete. Wooden houses would probably be cheaper and quicker to build and, wood being non conductor of heat, would be cheaper to air condition. But if they keep getting flattened on a regular basis then surely new homes should be made of stronger materials with wire glass windows to resist shattering. Americans are known for their ingenuity and innovations so there must be some reason why they keep building houses with wood and why insurance companies, who have to pay out billions of dollars in compensation, do not insist on more durable construction. It really is a puzzle. Japan has earthquakes everyday and has designed its buildings to resist tremors. In 2011 a 9 magnitude quake struck 70 km off the coast of Sendai sending a tsunami wave 40 meters high. No one died of the earthquake but the tsunami killed more than 5,000 people. News videos showed the violent shaking of buildings but no one was panicking. Supermarket employees were trying to stop bottles and cans falling off shelves rather than run outside to save their lives. If the Japanese can build tall buildings which can resist severe quakes surely the Americans should be able to build stronger buildings to resist tornadoes, at least public buildings such as schools and hospitals. The 2001 earthquake in Gujarat was of 7 magnitude and killed 20,000 people, injured another 167,000 and destroyed 400,000 homes. The biggest killer in India is corruption. Delhi, which is in a grade 4 earthquake zone, is full of unsafe buildings. Owners have added extra floors without proper foundation, to get more rent. Municipal officials have been bribed. Only God can save us from disaster.

The Congress is always teflon coated.

Big news! The newly elected Congress Chief Minister of Karnataka has selected 28 Members of Assembly, who are not known to be " tainted ", for his cabinet. TOI, 19 May. This will come as a shock to all Indians who are used to seeing the most notorious criminals completely whitewashed on joining the Congress. The CBI runs around all over the world but can find nothing in the Bofors case, eye witnesses develop complete amnesia in Sajjan Kumar's case, Lokyuktas or governors never order criminal charges in the Adarsh case in Maharashtra or the Commonwealth Games case in Delhi and even if caught red handed by sheer bad luck the courts repeatedly give bail for decades in Sukhram's case. It is completely different where the BJP is concerned. Narendra Modi is being hounded in Gujarat and the victory in Karnataka was achieved by causing a split in the BJP by the Lokyukta bringing charges against the BJP Chief Minister, Yeddyurappa which have not held up in court. Forced to resign as chief minister Mr Yeddyurappa left the BJP and formed his own party, called the Karnataka Janata Paksha, hoping to get around 43 seats in the assembly and hold the balance of power in a coalition government. In the event the BJP lost heavily because its vote was split and Mr Yeddyurappa ended up with just 6 seats, making him very weak. Whether he will now crawl back to the BJP we shall see. The Congress had no such qualms selecting Mr Virbhadra Singh, accused of lots of corruption, as candidate for chief minister for the Himachal Pradesh elections and won easily. So we are liable to get shocked to see the Congress acting shy. However, this sudden unexpected attempt at cleanliness has caused some members to feel slighted. Not because they were hoping to increase their bank balances by billions of rupees, not at all, but because they were hoping to serve the people of Karnataka by becoming ministers. In Yadgir, Congress workers ransacked party offices and set fire to windows because Mr Maalaka  Reddy was overlooked. In Mandya and Ramanagara they held dharnas, which are very noisy protest meetings, in support of DK Shivakumar and a supporter of Mr Tanveer Sait tried to set himself on fire in Mysore. We will never suggest that these people are aggrieved because they were looking forward to getting a share of the contents of large black bags that are routinely presented to ministers by businessmen looking to get inflated contracts, large tracts of land or mining licenses. It is surely because they are all disappointed at not being able to serve the people. You have to admire the Congress.

Choking on food.

After the near famine of the sixties India has always maintained buffer stocks of food grains so that we never have to face such a situation again. Normally 21-31 million tonnes of grains are stored as buffer stocks of which 5 million tonnes are for emergencies. But on the first of this month the government held 77.5 million tonnes of food stocks. Stocks reached a record high of 82.4 million tonnes on 1 June 2012 so stocks could peak at 88-90 million tonnes this June. Livemint, 15 May. The Food Corporation collected a record 40 million tonnes of rice in a year of inadequate monsoons showing government intentions. Our stretchable storage capacity is 50-60 million tonnes so millions of tonnes of grain are left out in the open to be eaten by rodents or deteriorate in quality and have to be sold as animal feed. India exported more rice than Thailand last year at huge losses because international grain prices are low. The cost of food to the economy, which is a sum of support prices, additional procurement charges, storage and distribution costs, has doubled in the last 6 years to Rs 1900 per quintal for wheat and Rs 2400 per quintal for rice in 2012-13 and any effort to increase procurement will increase subsidy costs sharply. When the government is desperate to keep fiscal deficit at 5% why is it wasting tens of billions of rupees in stockpiling excess food when we do not have the requisite storage capacity and a lot will go to waste? This is because it is part of the election strategy of the Congress. The Congress hopes to pass the Food Security Bill which will provide wheat at Rs 2 per kg, rice at Rs 3 per kg and other grains at Re 1 per kg to 75% of the rural and 50% of the urban population which will amount to some 800 million people. Once the bill is passed the Congress will release all this food for distribution earning enormous gratitude from the poor. Excess supply will quickly bring down prices and control food price inflation for which the Congress will claim credit while not revealing that it caused the inflation in the first place by hoarding food grains. Food grain for the Public Distribution System plus open market sales was 56.4 million tonnes in 2011-12 and 47.2 million tonnes until December of 2012. Assuming 50 million tonnes for PDS plus 10 million tonnes for open market sales and 5 million tonnes for emergencies estimated requirement is 65 million tonnes. So there will be a surplus of 20-25 million tonnes. The budget for food subsidy has been kept at Rs 9 trillion and any excess procurement will sharply increase costs. Is the Congress ready to sacrifice the nation just to win elections? The answer, sadly, is yes. 

How much are we losing to foreigners?

On 27 July 2012 the Financial Times published an article by a former trader who said that the London Interbank Offered Rate or Libor was being fixed by by banks since 1991. Libor is controlled by the British Bankers Association and sets the rates of interest on student loans, mortgages, derivatives and other financial products. Libor underpins $350 trillion of derivatives trades. Banks are supposed to report the actual rates they are paying or expected to pay when trading but either increased or decreased these rates to show higher amounts of profits than they were making. In Britain Chairman of Barclays Bank,Marcus Agius resigned, followed very reluctantly a day later by Bob Diamond, the CEO. Diamond later appeared in front of a parliamentary committee claiming complete ignorance of the scam. Why is it that CEO's take credit for profits and are rewarded with huge bonuses in tens of millions of dollars but claim to know nothing when things go wrong? Why is there no punishment for them and no one goes to jail? When Indian companies borrow money in dollars from banks abroad they promise to pay interest at a certain level higher than Libor. If the interest rate is fixed at 200 basis point above Libor and if Libor is reported at 2% then they will have to pay interest at 4%. However, if Libor rates were being manipulated it is entirely possible that our companies are paying at much higher rates which means India maybe losing billions of dollars in false payments. Is our government interested? No. The Congress is busy using the CBI and other investigative agencies to target the BJP, which it sees as its main opponents at the next elections, while kowtowing to the Prime Minister of China, a nation of uncivilised, barbaric cockroach eaters. Last week European anti-trust authorities raided the offices of 3 oil companies in Europe as well as the offices of Platts which compiles prices for energy markets. The Commission said it had concerns that the companies " may have colluded in reporting distorted prices ". " Even small distortions of assessed prices may have a huge impact on the prices of crude oil, refined products and biofuels purchases and sales, potentially harming final consumers," the Commission said. Since India imports more than $160 billion worth of oil every year even a slight distortion could mean billions of dollars of excess payments increasing our Current Account Deficit. Our credit rating depends partly on CAD and if India is downgraded the cost of borrowing will immediately rise impacting profits of our companies. However, the Congress has always been supine when it comes to our security. We beg for peace with Pakistan even when they send terrorists to kill our citizens and stop buying Iranian oil on US demands even when the US keeps supplying weapons to Pakistan. We are always losing to foreigners.

When begging does not work.

Oh dear. After all that begging the S&P has not only refused to raise India's credit rating from BBB- but has warned that there is a one in three chance of a downgrade to junk status in the next 12 months. The statement warned that a downgrade could happen if it perceived any reversal of initiatives or worsening outlook on the external sector. " Such a conclusion could come from anaemic investment growth, reversal on diesel or other subsidy measures, or inability to increase electricity supply to meet increasing demands. Similarly, if India's general government fiscal or current account deficits worsen contrary to our expectations, we may lower ratings," the statement said. Predictably government fellows have dismissed the statement as unfair. The Chief Economic Adviser, Raghuram Rajan said," International institutional investors, who have invested $17 billion into India so far this year, do seem to have a different point of view." Economic Affairs Secretary, Arvind Mayaram said," I think we are on the right track and the reform process will continue and therefore I don't think there is anything to be worried about." Typical government talk. We are in charge so you fools can relax. Trouble is that there is a pile of data to be worried about. Growth may improve a little at the end of this year as politicians pour out their black money for the coming elections but with retail inflation still high demand is going to be limited. New project announcements are down 92% from its peak in March 2009 and down 75% from a year ago. Livemint 7 April. Manufacturing is down 87% so how are jobs going to be created? With general elections next year the Congress will resort to its usual tricks of bribing voters with massive social schemes. The Backward Regions Grant will add Rs 450 billion in over 2 years. The Food Security Bill, which the Congress thinks is key for a third victory, will cost Rs 6.82 trillion or $120 billion over the first 3 years according to the Commission of Agricultural Costs and Prices which is a part of the Ministry of Agriculture. That means Rs 2.27 trillion or $42 billion this year. The only way the fiscal deficit can be kept within any limit is if the government uses scarce resources for useless social spending rather than on infrastructure. There will be a 9% shortage of power at peak demand which will shave 1.2% from GDP. As for the Current Account Deficit it was second only to the US at $93 billion and can only be reduced by increasing exports. Our trade deficit was $17.8 billion in April compared to $14 billion last year. To keep CAD within limits and support the rupee the government has encouraged hot money from abroad by increasing limits of investment in government and corporate bonds. A 2 year Non Resident fixed deposit pays interest at 9% while it is being cut for domestic savers. With a World Famous Economist in charge even begging is not working. What an irony!

He thought he could but can he?

Obama became president of the US on an explosion of oratory promising everyone " Yes we can ". He managed to win his reelection last year but his second term is already mired in such controversy that he is in danger of becoming a lame duck in the first 6 months. He promised to close the prison on Guantanamo Bay but failed. He promised to ban torture but more than 100 prisoners on hunger strike are being brutally force fed by US army doctors through tubes inserted forcefully through the nose. British doctors who boycott Israeli physicians for ill treatment of Palestinians are absolutely silent on US physicians routinely cooperating in torture. He has carried out more extra judicial killings by the illegal use of drones than anyone. Drones are used on suspicion of militants hiding in a building or travelling by car killing scores of innocent people. The US regularly claims that everyone killed was a terrorist even when locals show bodies of dead children. Worse, these attacks are carried out without declaring war and so can be deemed to be terrorist attacks on the countries concerned. Obama authorised the killing of Anwar al-Awlaki, a Yemeni and US citizen, by  a drone attack in Yemen on 30 September 2011. Awlaki's 16 year old son, Abdulrahman, a US citizen born in Denver, was killed by a drone attack 2 weeks later. It is true that Awlaki was preaching war against the US and could have inspired Nidal Malik Hasan to shoot 13 people dead in Fort Hood army base on 5 November 2009 but that is no excuse for Obama to play prosecutor, jury and judge by authorising extra judicial killings. While suffering from a God complex where foreigners are concerned his administration has been paranoid in its fear of criticism. After the attack on the consulate in Benghazi on 11 September 2012 in which Ambassador Christopher Stevens and 3 other Americans were killed the impression conveyed was that this was in retaliation for an internet movie " The Innocence of Muslims " which ridiculed the prophet. Whether this was due to panic for not being able to protect the ambassador we do not know. His paranoia is also shown in the administration's indictment of 6 current and former officials under the Espionage Act of 1917 which had been used only 3 times before. The Justice department is investigating David Sanger's book on the Stuxnet worm developed jointly by the US and Israelis to attack Iranian nuclear works. New York Times, 15 May. This week it was revealed that the phone records of 100 reporters and editors at Associated Press, a respected news organisation, have been accessed by the Justice department for the leak of a Yemeni plot which was foiled a year ago. This in a country where freedom of speech is the First Amendment and by a man who taught law at Harvard. He may proclaim " Yes we can " but we are entitled to ask " Can he?"

The glitter of gold.

When the international price of gold fell precipitously there was an enormous sigh of relief across government circles. The feeling was that this will reduce the cost of gold imports because of the lower price and because those who bought gold at high prices will have suffered significant erosion of value and so it will lose its luster as an investment which is proof against inflation. Falling volume of gold imports along with a slide in its value would reduce the Current Account Deficit and reduce the danger of a cut in the credit rating. Alas these pious hopes have been cruelly dashed. Gold imports rose 138% from a year earlier to $7.5 billion in April. Between January and March this year India imported 256.5 tonnes compared to 202.1 tonnes last year. The trade deficit in April was $17.8 billion in April compared to $14 billion last year and $10.3 billion in March. Seems that instead of being depressed at the fall in the price of gold people have seen it as a buying opportunity and happily increased purchase. " We expect gold imports to rise to 1,450 tonnes from an estimated 950 tonnes in 2012 -13, thus nullifying the fall in prices," said Indranil Pan, Chief Economist at Kotak Mahindra Bank Ltd. Livemint, 13 May. As is its wont the Congress reacted with fury and has made it almost impossible for people, which it sees as its enemy, to buy gold. Tax was increased from 2% to 6%, banks were told not to sell gold coins, import of bullion has been restricted and buying of jewellery now requires more proofs of identity and income than buying arms. The Congress never learns. This has been tried before and led to extensive smuggling and the rise of Haji Mastan. In an angry article one Sundeep Khanna writes that the Indian love for the yellow metal is " an obsession that is as primitive as it is wasteful ". Livemint, 16 May. Since gold is scarce mining companies are destroying rain forests and pristine wilderness to find it. The concentration of gold being very poor one ounce of gold creates 30 tonnes of rubble. Hence, just one bracelet could create 40,000 tonnes of earth. To recover gold from ore companies use cyanide and mercury which are highly toxic to the environment. Mr Khanna thinks Indians should be subjected to intense education because " It's an excrement that needs to be ejected ". What scholars do not understand is that people buy gold because they have absolutely no faith in the government. Because a property in Delhi sells for Rs 850 million while a 7 bedroom property with 7 full and one half bathrooms set in 2 acres of land in New York is being advertised for $5.5 million which equal to Rs 300 million. Because CPI is at 10% but the government is forcing the RBI to reduce interest rates thus stealing from savers to protect borrowers. A correction has to happen. Either property prices will fall by 80% or the rupee will. People are just protecting themselves. It is called survival. 

Well done Jolie.

Foreign news providers are buzzing after Angelina Jolie wrote an article in the New York Times to announce that she had both her breasts removed earlier this year to prevent cancer. Her partner, Brad Pitt was present throughout. She says that she took this drastic step because she is determined to stay alive for her children. The only response to this news is " wow ". Jolie is an actress renowned for  her beauty and for her to risk such a mutilating operation must have taken exceptional courage. Mastectomy is a very old procedure and the incision is made under the breast so it cannot be seen even when the woman is not wearing anything. The breast tissue would have been replaced by a prosthesis of similar size so no one will be able to make out any difference in her appearance. Whether there is any psychological effect only time will tell. A lot will depend on how people in the west react to her new reality and whether her career stays the same or starts to wane. Western people are obsessed with breasts and anyone watching the Oscars will have noticed how much attention is paid to the cleavage of female celebrities. Paparazzi follow famous women day and night hoping to capture one instance of " wardrobe malfunction " which they can then sell for high prices. On 1 February 2004 during the Superbowl halftime show Justine Timberlake exposed one of Janet Jackson's breasts causing a huge furore in the US. Jackson had to apologise for her indiscretion. To get their pictures in papers women wear dresses as revealing as possible so the occasional accident is possible, the commonest is a glimpse of the areola surrounding the nipple, called a " nipple slip ". We can imagine the interest of all photographers to Angelina Jolie's breasts from now on. Having been in the limelight for so long she is well equipped to handle all that attention but she will have to get used to being in the center of controversy. Her mother she was close to died of ovarian cancer at the age of 56 years. Angelina Jolie carries a mutation on the BRCA 1 gene which gave her an 87% chance of breast cancer and a 50% chance of ovarian cancer. The higher possibility of cancer of the breast and the relative ease of operation caused her to have both of them removed and thus reduce that probability to near 0%. Whether she decides to get her ovaries removed as well remains to be seen. Apart from cosmetic significance removal of breast has no systemic effect but removal of ovaries will precipitate menopause immediately with increased risk of heart disease and osteoporosis in future. Trouble is women with cancer but without the dangerous mutation still insist on removal of the normal breast when a simple lump removal is enough. This not only causes unnecessary trauma but hugely increases costs. How many women in India maybe carrying dangerous mutations but are completely unaware? How long will we remain third world?

Too much greed reduces profits.

Reliance Communications or R-Com announced a profit of Rs 3.03 billion for the 3 months of this year ending on 31 March. This was 188% higher than the previous quarter on other income although 8.7% lower compared to the same period last year. Livemint, 11 May. For the whole of last financial year ending on 31 March its revenue rose 4.4% to Rs 205.61 billion and its net profit by a whopping 27.5% to Rs 6.72 billion. In spite of massive profits R-Com increased tariffs in October from 1.2 to 1.5 paise and again this month by 20-30% on all " commitment plans " used by its customers. " Operational performance was broadly in line with estimates but average revenue per minute at 43.9 paise is lower than our expectation of 44.6 paise," said Shobhit Khare, VP Research at brokerage Motilal Oswal Securities Ltd. What is that supposed to mean? Revenue per minute depends on the rate per minute charged by the company so it should be constant. It maybe that customers of R-Com are using its services for plain vanilla voice calls and not for value added services or for expensive 3G services. The rapacious government has increased taxes on every service which means that less money goes to the service provider, even though the customer is still spending the same amount, and exorbitant license fees add to costs of companies. Also retail inflation at 10% reduces spending power. Increasing tariff charges will surely result in people cutting down on the volume of usage. This is shown in the minutes growth of R-Com which is only 2.3% compared to Bharti at 5% and Idea at 8.5%. A statement by the company said that increasing charges were aimed at bringing greater revenue per minute and profitability. But already the company has reported massive profits so how much more does it want and why should its customers have to suffer to increase bonuses for executives and dividends for shareholders? However, it would be wrong to pick on R-Com because management training teaches how to screw as much money as possible from customers rather than trying to woo them with efficient, courteous and flawless service. The number of telephone connections in India have fallen from 79.6 per 100 people to 72.9. This is said to be because many 2G licenses were cancelled by the Supreme Court and operators are choosing to operate in high revenue areas because of high license fees. The average revenue per user has fallen to Rs 98 for GSM services and to Rs 80 for CDMA. In 2006 it was Rs 366 per GSM user and Rs 256 for CDMA. They say it is because charges are so low. But is it? The number of minutes of usage for GSM has dropped from 505 minutes in 2008 to 359 in 2012 and for CDMA it has dropped from 550 minutes in 2006 to 230 minutes. Greed maybe good but too much greed has the reverse effect.

We can buy up Washington DC.

Mr YC Deveshwar, Chairman of ITC, which has a turnover of $7 billion, has just bought a house in Shanti Niketan in Delhi for Rs 85 crores or Rs 850 million. Contrary to the normal practice of paying half the price in cash or black money Mr Deveshwar has paid the entire sum by cheque. Which means that the cost of registering the house and the stamp duty will be calculated on Rs 850 million, adding substantially to the overall cost. His annual property tax will also be calculated on this prices and will be huge. The house has 2 storeys and is built on 800 square yards with a small garden, which works out to Rs 10,62,000 per square yard. Shanti Niketan is supposed to be a posh part of south Delhi but it is congested and the streets are narrow, making car parking very difficult. We do not know how many rooms the house has but from the size of the plot we can guess that it will have around 7-8 bedrooms with attached bathrooms, a drawing room, maybe a study and a kitchen. The sale of this house means that every property in the area will now be valued at the same rate and will have consequent knock on effect on all properties in Delhi. The Delhi government will not miss this chance of squeezing more taxes from the sale of properties and will hike the circle rate, which is a minimum value set by the government on which tax will be collected even if the sale price is less. Rents will also rise and, since only a handful or people can afford to buy houses in Delhi, they will have to pay a greater share of their salaries as rent, increasing poverty. Delhi is to Mumbai what Washington DC is to New York. A 5 bedroom house, built in 1880, with 3 full bathrooms and one partial bathroom on New Jersey Avenue, Capitol Hill, which is where the US Congress is located, is being advertised for $1,299,000 which works out to around Rs 8 crore or Rs 80 million at today's exchange rate, which is one tenth that of Delhi. How can the price of property in Delhi be ten times that in the US when the GDP of the US is $15 trillion while ours is a mere $1.9 trillion. One reason given is the massive population of India in need of housing but if the Food Security Bill is to provide cheap food for 800 million people that leaves 120 million who are thought to be able to buy their own food. The HDFC Bank says that home prices are more affordable now than in 1994-95. At that time it required 22 times annual salary to buy a home whereas now only 4.7 times the annual salary is needed. TOI, 13 May. So who are these rich people? If only 5% of Indians have so much money that makes 60 million people, which is more than the entire population of Britain. So the government has been forcing the RBI to reduce interest rates to help just 5% of people. Why? Because politicians have their black money in property. Maybe these Indians should buy up all the properties in Washington DC and we will end up controlling the US.

We are the best.

A couple of days ago 2 ministers at the center were forced to resign to provide a fig leaf to the Congress in the run up to next year's general elections. One of them had altered a CBI report to the Supreme Court regarding granting of coal mining licenses while the Prime Minister was in charge of the Coal ministry and the other, who sacrificed a goat to prevent being sacked, because his relatives were selling high level government posts for vast sums of money. Not just politicians, every business in India is crooked. It is only a matter of degree, the respected ones being more subtle. Telecom companies charge pre-paid customers much higher than post-paid ones. In every business you have to provide goods or services before billing your customers but pre-paid customers pay up front for calls they are going to make in the future. The company collects hundreds of billions of rupees from millions of customers before providing any service, which is like getting a huge bank loan interest free. Common sense would suggest that telecom companies would value such customers but instead they are charged at a much higher rate per minute of usage. The reason is that companies can falsely elevate the usage of post-paid customers thus inflating their bills. After all, no one keeps a record of every call with a stop watch. Wireless internet service providers cheat customers with periods of validity. You pay for so many GBs of download but this must be used within a limited period of time. If you do not renew by the given date you lose all the GBs remaining in your account. A web based company has used a series of stings to expose how officers in our banks help in laundering money. Every bank was most keen to help fictitious politicians turn black money into white. While banks enforce the " Know Your Customer " rules strictly if we want to open accounts with a few thousand rupees Madhu Koda was apparently able to keep Rs 50 billion of black money in bank accounts. A chit fund company, Saradha which was very close to Trinamul Congress politicians in Bengal has collapsed. It had raised between Rs 15-40 billion by operating a classical ponzi scheme. It had some 3 hundred thousand agents who were given commissions of 15-40% for collecting money from poorer households by promising returns of 15-50%. At least one person has been murdered and 8 have committed suicide so far. Then there is a reverse ponzi scheme in which a person claims to have raised hundreds of billions of rupees from millions of fictitious customers. Actually he has been given vast sums of black money by politicians. He has invested this money in legitimate businesses, such as hotels, shopping malls and residential housing making huge profits. Ponzi schemes are common but no country knows how to run a reverse ponzi. Truly, we are the best.

Death to our enemies.

Sixty five years after independence Pakistan is holding historic general elections. Historic because for the very first time a civilian government will pass on the baton to another civilian government without a period of army rule in between. Nawaz Sharif, who was deposed by Pervez Musharraf  in 1999 when he would not allow the latter's plane to land in Pakistan while returning from a visit to Sri Lanka, is supposed to be the fovourite because of his hold on Punjab. However, Sharif, who leads the PML(N) party, will probably not get a clear majority because former cricketer Imran Khan, who leads the Pakistan Tehreek-e-Insaf party and was once married to heiress Jemima Goldsmith, fell from a makeshift rickety lift while on an election rally and has fractured several vertebrae. It is thought that this will generate a lot of sympathy votes for Khan although the crafty old war horse Sharif immediately cancelled campaigning for one day projecting himself as a gallant opponent who does not take advantage of his adversary's misfortune. These 2 men are up against so called secular parties which are Muttahida Quami Movement ( Altaf ), Awami National Party and Pakistan Peoples Party of the present president, Asif Ali Zardari. However dubious the claim of being secular maybe, these 3 parties have been targeted by the Tehrik-e-Taliban who have killed over one hundred politicians so that these parties are having to campaign quietly. Even today, on the day of election, at least 10 people have been killed by bombs. The former Prime Minister of the PPP, Yousuf Raza Gilani's son Ali Haider was kidnapped at gun point. Both Khan and Sharif have said that they will make peace with the Taliban. Does it mean that they will allow the Taliban to try to take over Afghanistan when NATO troops withdraw next year and continue to kill minorities we do not know. However, it is unlikely that any new government will be able to control the ISI in its support of Lashkar-e-Toiba's attacks on India. A bunch of idiots in India are talking about peace with Pakistan and trade increasing from $3 billion to $30 billion but this is unlikely. We must build a fence to keep the mad dogs caged in Pakistan. Our other enemy, China is hugely powerful and extremely dangerous. China cannot be stopped militarily so we can only pray for mother nature's help. The Chinese habit of eating every living creature means that viruses can transfer from animals to humans. The SARS virus is said to have originated in civets. We now have the H7N9 virus, probably from ducks. Once a virus learns human to human transmission there could be an epidemic. Such an epidemic may kill millions worldwide but if half of China is wiped out causing its economy to collapse resulting in civil war Tibet will become free and the danger will disappear. Is it wrong to wish death to enemies?

The books will need to be balanced at some point.

In a frantic effort to win the next elections the Congress is piling on social schemes without explaining where the money is going to come from. On the one hand they promise to reduce expenditure to reduce fiscal and Current Account deficits while on the other they are promising free cell phones to everyone, a Backward Regions Grant Fund to target 1500 sub-districts and now the Food Security Bill. This along with direct money transfer based on Aadhar numbers will, they hope, carry them to 5 more years of power and untold wealth from corruption. The Backward Region Grants Fund will cost Rs 750 billion in the next 4 years, of which Rs 450 billion will be needed in the first two. The Food Security Bill will guarantee rice at Rs 3 per kg, wheat at Rs 2 per kg and other grains at Re 1 per kg. According to government figures the total cost for old and new commitments will be Rs 950 billion or $17.5 billion but the Commission for Agricultural Costs and Prices, which is part of the Ministry of Agriculture, estimates that it is likely to cost Rs 6.82 trillion or $120 billion. Wall Street Journal, 8 May. This money will be required over the first 3 years that the new commitments are implemented which means that the government will have to find Rs 2.27 trillion or about  $42 billion each year. The intention is to cover 75% of rural and 50% of urban people making a total of 800 million. On top of the expense of buying food grains massive investment will be required in infrastructure such as distribution, warehousing and transportation. Government borrowing was Rs 4.67 trillion and these 2 schemes will add another Rs 3 trillion so where will the money come from? No country in the world, not even the US and China combined, can distribute nearly free food to almost a billion people unless it is combined with a promise of fewer children so that the burden keeps reducing every succeeding year. While increasing wasteful expense wantonly in its insatiable desire to loot the Congress has to keep one eye on the deficit so as not to suffer another credit downgrade to junk status. So it has been killing the middle class with unbearable taxes on everything, increasing inflation and reducing consumer spending, thus severely hurting the goose laying golden eggs. This government has also passed a Right to Education Act which will cost Rs 25 billion this year. According to the budget RTE along with Sarva Siksha Abhiyan will cost Rs 272.58 billion this year but the true cost is likely to be Rs 400 billion. Livemint, 5 April. Quantitative Easing in the US and Japan along with near zero interest rates are causing a flood of foreign money into the Indian stock and bond markets supporting the rupee and our foreign exchange reserves. Elections in states this year and general elections next year will release a deluge of black money, stimulating the economy. But the books will need to be balanced at some point. What happens then?

The four worst crimes.

About 15 years back a couple living in a third floor flat in Vasant Kunj in Delhi decided to go out for dinner keeping a 17 year old maid in charge of their 2 daughters, a 9 year old and a one year old. This was their first outing since the baby had been born a year earlier. Unknown to them the maid had been befriended by a young man, around 21 years old. When the couple went out she let the man into the flat whereupon he strangled the maid and the 9 year old girl to death, leaving the little baby alive, took all the money and gold he could find and fled. The neighbors had heard the little girl screaming but no one had gone to investigate. The distraught father blamed all the neighbors for not saving his little daughter. It was so heartbreaking that the man living in the flat below developed very high blood pressure with such severe nose bleed that he needed blood transfusion. Today's cities have become so impersonal that you may live next door to someone for 20 years and yet be just nodding acquaintance. Also it is impossible to know if the sound of a girl screaming is real or coming from a TV program. This may explain why 3 kidnapped girls were imprisoned and raped in a house in Cleveland, Ohio in the US for over a decade without anyone suspecting anything. Michelle Knight, 21 years old was kidnapped in 2002, Amanda Berry, 16 years old in 2004 and Georgina DeJesus, 14 years old in 2004. Their captor, Ariel Costa has been arrested and charged with kidnapping and rape, which rank along with murder as the most bestial crimes. The kidnapped victim has to suffer years of terror, torture and helplessness while the family suffers the agony of not knowing whether their loved one is alive or dead. The kidnapper sees himself with the power of life or death over his victim, to be beaten or chained as he pleases or, as with the Somali pirates, bartered for large amounts of cash. Similarly a rapist enjoys his absolute power over his victim, as an object to satisfy his carnal desires and then be discarded without any feeling for her destroyed dignity as a human being. So depraved are these men that they can rape a 5 year old child, insert objects into her undeveloped private parts and leave her for dead, as happened in Delhi recently. The last in this list of crimes of incomprehensible cruelty is acid attack. On 17 January Sergei Filin, the artistic director of the Bolshoi Ballet in Moscow was walking home at night when a masked man threw sulphuric acid on his face, leaving him in extreme agony and damaging his eyes. Pavel Dmitrichenko, a dancer has confessed to the attack. He was angry because he thought that his girl friend was being neglected by Filin. Sadly, this is very common is India. If a woman refuses a man's advances he disfigures her for life by burning her face with acid. For her everyday becomes a nightmare. Murder, rape, kidnapping and acid attacks are the four most horrible crimes and must be punished without any pity. Hang them.

A dividend or a curse?

In 2015, 1.1 million students will graduate and expect decent jobs with meaningful work and respectable salaries but the government has already admitted that its vaunted growth has been jobless. With growth falling where are the jobs going to come from? Scope of getting jobs abroad are also dismal with the global economy slowing down while cloud computing and increasing automation increase productivity without concomitant increase in job opportunities. Livemint, 26 April. Google is apparently planning to spend $10 million over 5 years to nurture 10,000 new businesses which maybe encouraging but the US is planning changes to its visa laws to force Indian software companies to employ natives rather than take Indians to work in the US. In India new project announcements have declined by a massive 92% from its peak in March 2009. It declined by 75% to Rs 662 billion in the last financial year in all industries. Livemint, 7 April. Manufacturing, which is most labor intensive, declined by 87%. This is partly because of a realisation on the part of the Congress that unlimited spending to bribe voters to win elections leads to increasing inflation, leading to lower consumer demand, falling growth rate and increasing fiscal and Current Account deficits which has already resulted in a cut in credit rating to BBB-,  which is one notch above junk status. Ever since the Congress grabbed power at the center wasteful government spending has been ballooning leading to ever increasing borrowing. Between 2001 and 2005 the government borrowed between a high of Rs 976 billion in 2002-2003 and Rs 542 billion in 2004-2005. In 2005-2006 it was Rs 1 trillion, in 2008-2009 it was Rs 2.1 trillion, in 2009-2010 it was Rs 3.65 trillion and in 2012-2013 it was Rs 4.67 trillion. This year it is expected to be Rs 4.84 trillion. Livemint, 6 May. The government has been borrowing at 7.8-10.01% which is high for sovereign debt. In Europe bond yields of 7% or above are considered to be untenable and forced countries such as Ireland and Greece to ask for bailouts. The Congress is now torn between a necessity to control spending to ward off a rating downgrade before general elections next year, which will lead to a rout, and the intense desire to spend vast sums to bribe voters with suicidal social schemes. Thus it has resorted to vicious bullying of the Reserve Bank to lower interest rates to lower its borrowing costs even though the Consumer Price Index is above 10% and is expected to come down only to 9.2% this year. Like poor people borrow at exorbitant rates of interest from money lenders the government is enticing Foreign Institutional Investors by reducing withholding tax from 20 to 5% and by paying Non Resident Indians 9% interest on NRE accounts. The only solution is population control. Or else the demographic dividend will turn out to be an enormous curse.

We need some explanation.

We can understand Saddam Hussein, Osama Bin Laden and Dick Chaney. We can even understand Bin Laden's youngest wife, Amal who " demanded sex 24 hours a day ". TOI, 21 April, 2012. The eldest wife, Khairiah was jealous of Amal who she accused of sticking to Bin Laden like a prostitute who wanted " sex throughout the day ". At least Bin Laden died a happy man. But how do we understand our lot? The Central Bureau of Investigation was asked by the Supreme Court to investigate the allocation of coal mines to friends and family, which according to the Comptroller and Auditor General, could have resulted in a loss of Rs 1.7 trillion. The CBI Director, Ranjit Sinha admitted to the Supreme Court that he showed the draft report to the Law Minister, Ashwani Kumar who made certain changes. " Besides a few changes were also done on the suggestion of the AG ( Attorney General ) and officials of the PMO ( Prime Minister's Office ) and the coal ministry," he said. TOI, 7 May. He, however, assured the court that the central theme of status reports was not changed nor was there any deletion of any evidence. So what were the changes? Were all these fellows correcting mistakes in grammar and punctuation? Naturally, Mr Sinha did not take any minutes of the meetings but was speaking from memory and the memories of his officers. Surely, someone is guilty of perjury and of trying to pervert the course of justice? Will these people be sent to prison? Alas, no chance of that. Politicians, especially of the Congress, and civil servants are immune from any punishment. No such inhibitions were noticed on the part of judges of the Delhi High Court who sentenced 2 journalists of the paper Mid Day, a cartoonist and the publisher to 4 months in prison for the crime of exposing the conflict of interest of the former Chief Justice, Sabharwal's judgements benefiting his sons. And then there is the Railway Minister, Pawan Kumar Bansal. Seems that his nephew, Vijay Singla was caught red handed by the CBI while accepting Rs 9 million from a Railway Officer, Mahesh Kumar to promote him to the Railway Board. The CBI officers were so confident of nabbing him that they took a note counting machine along with them. TOI, 6 May. In today's India Rs 9 million is loose change for politicians and their relatives who count their wealth in billions. The question is, if a man is willing to pay Rs 9 million for a promotion how much money was he assured of making once in position? Seems that he would have been responsible for expenditure of Rs 2.5 billion which is 35% of the Railway's total expenditure. Is it the reason why railways fares were constant while Trinamul held the ministry but started going up immediately the Congress took over? A peeved Congress fellow said that asking crooks to resign is a " disease ". Explanation please.

Man made poverty.

The HSBC Purchasing Managers Index is down to 51 in April from 52 in March which reflects a slowing growth in the economy. Livemint, 3 May. This is also reflected in the non-food credit growth which came in at a decadal low of 14% in the last financial year compared to RBI's projection rate of 16%. Credit to industry fell from 20% in the previous year to 15.7%. Agriculture sector grew at 8% compared to 13.3% the previous year. To increase industrial growth you need increase in demand but this cannot increase when the Consumer Price Index is growing at above 10%. The focus should be on controlling inflation to stimulate demand but the clamor has instead been on reducing interest rate which has been reduced by 125 basis points this year. This means that money saved in banks keeps losing value so people look for alternative source of savings which would protect against inflation. One avenue is property but property prices are so high that they are beyond the reach of anyone except the very rich. Also you cannot invest small amounts of money in property because you cannot buy one or two square yards of land. So people resorted to buying gold. In 2011 India imported 969 tonnes of gold while in 2012 it was 860 tonnes. The fall in gold imports was because of increase in the price of gold and the increase in the tax rate from 2% to 6%. The fall in savings led to decreased liquidity in banks which were unable to reduce deposit rates because they would lose more customers. And if they could not reduce deposit rates they could not reduce their lending rates either.So, when the RBI reduced rates by 100 basis points the banks reduced lending rates by a measly 25-30 basis points. Industrial production is totally dependent on electricity. With 286 billions tonnes of coal reserves we have the fifth largest coal reserves in the world but of the 195 coal blocks awarded for mining between 1993 and 2008 only 30 are producing coal. This year we will consume just 770 million tonnes of coal but of that we will have to import at least 165 million tonnes at higher prices. Naturally electricity charges have been increased many times adding to inflation. Coal production is controlled by the highly inefficient government company, Coal India which has been supplying rocks instead of coal. So bad is its quality that electricity company, NTPC, which is also a government concern, has full time employees to separate rocks from coal. Aggrieved, NTPC refused to pay the full amount for the coal it is supplied to which Coal India threatened to cut supplies. Coal India's excuse is that it supplies high quality coal but it cannot be held responsible for adulteration during transport. With summer heat increasing the demand for electricity there will be a 9% shortage of electricity which will reduce GDP by 1.2%. We could be a very rich country but we are being kept poor by the crooks. Nothing we can do.

Enlightenment leads to death.

In The Guardian Weekly of 22 March one Ed Vuillamy writes " What Kind Of Mess Do We Want In Syria?" By " we " he means western countries. He draws a parallel with the war in Bosnia when he spent " all those nights in trenches, forests and cellars and along treacherous mountain roads with the resistance fighters of betrayed Bosnia ". The war ended when the US bombed Serbian forces and its President, Milosevic was transferred to the Hague to the face International Criminal Court where he died before a verdict was reached. But is there real peace in Bosnia? Will the hundreds of UN troops stay there forever and, if not, what happens once they leave? He admits that Iraq is a mess but still advocates that there should be some sort of military intervention in Syria because " those who advocate doing nothing can never look the desperate or the dead in the eye ". Saddam may have killed tens of thousands but western countries killed hundreds of thousands in Iraq, not just in the 2 Gulf wars, but by blatant theft of Iraqi oil over a decade in the " Oil For Food Program ". Are Iraqis supposed to feel grateful for the slaughter of their children by the US, rather than by Saddam, and then dismissed as so much dross by being labelled " collateral damage "? What happens if Assad of Syria is bombed into oblivion as Gaddafi was? The Sunnis, encouraged by their victory, will surely help their brothers in Iraq where they are a minority. There is every chance of the war drawing in Jordan and Saudi Arabia on the one hand and Iran on the other. What makes western people feel so morally obliged to protect others by bombing them to hell? The answer is in the same paper in an article entitled " Westerners Don't Rule But Their Values Do " by Will Hutton in which he insists that the west may have lost its economic and political power but is still morally superior because others are now accepting its values of 19th century Enlightenment, with a capital " E ", which are " its commitment to justice, fulfilling work and the necessity to enfranchise every human " and homosexuality. From the Arab spring to microblogging in China everything is because of the spread of western Enlightenment. So, all of Asia was in darkness,we were living in trees until the white man brought guns and missionaries and syphilis.  This is the " white man's burden ". Try to bring Enlightenment, with a capital " E ", to unenlightened Asians and if they refuse to be enlightened shove it down their throats with 2 nuclear bombs on Japan, napalm on Korea, dioxin on Vietnam and depleted uranium on Iraq. Punish 10 million Indians to death, making Churchill a greater mass killer than Hitler, but, hey, they should be grateful for having been enlightened by being enslaved. Dangerous sanctimonious twaddle which gives the excuse to slaughter ever more. How many more will be enlightened to death by the west?

Poor fellows are so misunderstood.

Indians feel that politicians and civil servants should resign if accused of corruption or other crimes while politicians and government officers feel that they are seriously misunderstood. After the bestial rape of a 5 year old girl in Delhi protesters demanded the resignation of the chief of police. He refused saying that he would resign if it would make the slightest difference. And he is right. No one becomes the chief of police by hard work, strength of character, efficiency, solving crime or protecting citizens against criminals by quickly apprehending them. Look what happened to Ashok Khemka who had the temerity to question land deals by a member of The Family. He been transferred to look after the archives. Serve him right if he gets allergies to mold. No you rise by foot licking politicians, senior officers and civil servants. You help them by covering up their criminal activities by getting rid of incriminating evidence and transferring any junior fellow who has delusions of performing his duty. You never know when you might need help yourself. One chief of police was freed from the charge of murdering a female journalist, another one got off with a derisory 6 months for pedophilia and a third has retired on full pension after helping his son to go on the run for 7 years while serving a prison sentence for the rape of a foreign woman. The chief of police in Delhi thinks it is unfair that he should be asked to resign for someone raping a child. How can he be held responsible for that? He does not understand that he should take responsibility for his officers not searching for the little girl when she was reported missing, for one of his officers offering a bribe to the father of the child to withdraw his complaint and another one slapping a woman protester in full view of the public. If the police are so callous that they do not care for the welfare of an innocent little child, if they want to avoid the investigation of a disgusting crime by offering a bribe and if they can brazenly assault a woman in public then they are of no use and as their chief he is responsible. But he is not alone. Our most revered Prime Minister has refused to to take any responsibility for the multitude of scams he has presided over. He just keeps bleating repeatedly that he is honest. He seems completely unaware that allowing people to loot the exchequer makes you an accessory even if you have not profited personally. The Law Minister refuses to resign for vetting an affidavit by the CBI to the Supreme Court and the Prime Minister backs him. So will the court punish anyone for tampering with evidence or contempt of court? No. After all judges need juicy sinecures after retirement such as becoming chairman of the National Human Rights Commission or the Press Council of India. All these people feel that they deserve their rewards and we are wrong to ask them to take responsibility for their actions. They feel seriously misunderstood. Poor fellows.

Multiple wrongs will never make a right.

The Reserve Bank succumbed to pressure and reduced interest rate by 25 basis points today, bringing the interest rate to 7.25%. So far this year the bank has reduced interest rates by 125 basis points under pressure from politicians, desperate to stimulate some growth in the economy which will increase revenue, help decrease the fiscal deficit, avert a credit rating downgrade and postpone the day of reckoning till after general elections which must be held by May next year. Ministers, including the World Famous Economist, keep promising that the economy will start to grow again in 2-3 years because of the reforms they are undertaking this year. What were they doing since 2004? Why were these reforms not instituted in the last 9 years? The best year would have been 2007 when the Wholesale Price Index was at 4.74%, the rupee was 39.33 to the dollar and oil was at $64.20 per barrel. That was when prices of diesel and cooking gas should have been freed, tax on petrol reduced so that its price was the same as diesel, the RBI should have bought billions of dollars from the market to bring down the rupee to around 45 to the dollar to help exports and increase our foreign exchange reserves, while keeping interest rate high to bring down inflation to under 2% and prevent the enormous property price bubble from forming. The high growth in the economy was due to very low interest rates in the US and Europe which allowed Indian companies to borrow cheaply abroad and Foreign Institutional Investors invested vast amounts into our stock market making the rupee strong which helped to keep the inflation at a falsely low level. Instead the imbeciles, puffed up by their own hubris, talked about how we were going to become bigger than China, argued about the size of the rising middle class in hundreds of millions and strutted around among billionaires at the World Economic Forum at Davos lecturing them about how they should be running their businesses. They thought that taxpayer money was theirs to spend and started hugely expensive social schemes to bribe voters to win elections in 2009. The result was ballooning fiscal and Current Account deficits, double digit inflation and falling growth. Now they are in a blue funk because they cannot control fiscal deficit without controlling expenditure, which is impossible unless they stop those social programs which would mean electoral wipe out. So they have increased prices of gas, electricity, fuel and train fares, increasing inflation, increased taxes on everything cutting purchasing power of consumers and forced RBI to reduce interest rates, thus stealing money from savers to protect borrowers, especially the property market which is bloated with black money. Will it work? No. A series of wrongs cannot make a right. But, as long as the fall comes after the elections they do not care. 

People are so naive.

As predicted Mr Sajjan Kumar was acquitted of any guilt in the killing of over 5,000 Sikhs following the shooting of Mrs Indira Gandhi in 1984. A man is reported to have flung a shoe at the judge. People are entitled to be angry at the lack of any justice for the massacre of so many innocents but surely no one should have expected anyone from Congress ever to be punished. Former Telecom Minister, Sukh Ram was caught red handed with Rs 36 million stuffed in bags and suitcases in 1996, has been convicted and sentenced to 3 years in prison but is he in jail yet? Note how quickly the CBI moved against the BJP in Gujarat after the riots of 2002 in an effort to neutralise Mr Modi so that he cannot be a challenge to Mr Rahul Gandhi for the post of Prime Minister. Last year the Comptroller and Auditor General of India submitted a report in which he stated that coal mines allocated to private companies between 2004 and 2006 resulted in windfall gains to the companies in excess of Rs 1 trillion. The Supreme Court asked the Central Bureau of Investigation to investigate the Coalgate scam. On 26 April 2013, the CBI Director submitted a report to the Supreme Court on the status of the investigation without telling the court that the report had been shown to the Law Minister, Ashwani Kumar. On 30 April the Director of the CBI, Ranjit Sinha admitted that changes had been made to the draft report but denied wrong doing. He maintained that the CBI is not an " autonomous organisation " but is a department of the government and as such the Law Minister was entitled to see the draft report. The Additional Solicitor General, Hiren Raval, who appeared for the CBI and assured the Supreme Court that the CBI was carrying out an independent investigation, has now resigned. He has written to the Attorney General, GE Vahanvati accusing him of trying to influence the probe. He says that he received a SMS from Mr Vahanvati on 5 March to reach the Law Minister's office with the draft report where both the CBI Director and Mr Vahanvati were present. Mr Raval thinks that he is being made a scapegoat. The CBI blamed Mr Raval for " overstepping " his brief and replaced him with senior advocate UU Lalit. The judges are said to be upset at this blatant interference by the government into what it assumed would be an independent investigation. The honorable judges are so innocent. Did they really think that the justice system in India is at all relevant? The Finance Minister, P Chidambaram's election on 16 May 2009 has been challenged by his opponent Mr Kannappan who claims that he received 3,34,348 votes but his votes were transferred to Mr Chidambaram who received 3,30,994 votes but won by 3,354 votes. The case is still ongoing while the next elections are due making it completely irrelevant. We are stupid to expect justice.

How to be a thief and police at the same time.

Show great feeling for the poor, talk about " inclusive growth ", start social schemes, loot the money, stash it abroad and stop any investigation if it starts to become uncomfortable. A few easy steps on how politicians are able to maintain their wealth and power. The MNREGA scheme was started to help the rural poor by dishing out taxpayer money for fictitious work. A study by the NGO, RLEK of SC/ST in Uttarakhand has shown that money is not reaching the intended people. " Bureaucrats in connivance with contractors and politicians are trying their best to sabotage the MNREGA programme in Uttarakhand. Rs 348.81 crores ( Rs 3.49 billion ) received by the state under the flagship scheme are being misappropriated," said Avadash Kaushal, Chairman of RLEK. ET, 20 April. Once looted the money has to be stashed somewhere. One avenue is to invest in properties, the reason why property prices have jumped 800% since 2002. The other is to transfer it to a numbered account abroad. After being alerted by France about deposits by Indians in the HSBC Bank in Geneva, Switzerland the then Finance Minister assured Parliament in January 2012 that the government would set up requisite institutions to root out the problem of black money. A Directorate of Criminal Investigation was set up inside the income tax department but after it started to probe industrialists, cabinet ministers and other politicians its investigation was taken away and distributed to units in different cities thus fragmenting the process and making it toothless. TOI, 30 April. The last raid carried out by the DCI was on 30 March, 2012 on United Stock Exchange and unearthed fictitious transactions worth Rs 4 billion for allegedly money laundering activities. Everything is so fictitious in India. Fictitious MNREGA money looted by fictitious politicians and civil servants, fictitious accounts in Geneva, fictitious assurance to the Parliament and fictitious investigations to hoodwink the public. Its a fairy tale. Apparently the probe is now being supervised by Finance Ministry officials, the most ideal fellows to supervise investigation of cabinet ministers. The government has denied that the initial probe had found any black MPs with black money. We sympathise with the government. Rs 3 billion is just loose change. Trillions have been looted from the telecom license scam, from the coal mine allotment scam, from the Commonwealth Games scam, from illegal mining of iron ore and a myriad other scams that we do not know about. All supervised by the Honest Man who may also be called the Ignorant Man because he continually denies any knowledge of anything, including the desperate state of the economy, but refuses to give up his chair. The Congress should open a university of misappropriation and investigation. Teach Harvard and MIT something useful.