It is everyone for himself or herself and the devil take the hindmost.

The Deutsche Bank predicts that the rupee will settle at 58 to the dollar after predicting that it will fall to 70 to the dollar only one week back. HT, 27 August. How can they say that when inflation is racing out of control, there is a humongous property price bubble, government expenditure is set to zoom because of irresponsible social spending, just to win elections and energy prices will rise, reducing consumer spending still further. However, it makes business sense for the bank to be irrational. If it can talk the rupee up it will get more euros when it repatriates its profits from India which will make its parent's balance sheet in Germany look healthier. Public sector banks want lower interest rates because they are sitting on vast piles of bad loans or Non Performing Assets. State Bank of India, the largest public sector bank has seen its bad assets rise to Rs 608.91 billion from Rs 471.56 billion a year ago. Profits fell 13.6% in the April-June quarter. After setting money aside NPAs are Rs 299.70 billion, the worst for 35 quarters. Livemint, 12 August.The bank cannot provide more money to cover its bad loans because then its profits will fall even more and it will not be able to pay any dividends. The government being the largest shareholder of the bank is hungry for money to waste and will not allow that. If interest rates fall then the bank can ask companies to restructure their loans at a lower rate and wipe them off its books. Companies want lower rates for much the same reasons although it seems stupid that they are not worried about the soaring inflation which is suppressing demand and reducing sales growth. Indian companies are not really interested in manufacturing. It is just too difficult. Land prices are too high, there is a severe dearth of skilled labor and there are too many restrictive laws requiring greasing of too many palms. If you want to buy a fridge, an air conditioner or a mobile phone you will not find even one retailer selling Indian products in your neighborhood. It will be LG or Samsung or Apple. Why bother when you can multiply your money by a factor of 10 in 3 years by buying up some land and building flats on them. That is where the black money is. What about politicians? Surely being elected representatives of the people they should tell the truth. Trouble is that their sole interest is in getting reelected because that gives them the chance to loot. It is everyone for himself or herself and no one for India. How sad is that?

Rubbish talk should be taxed.

After the passage of the Food Security Bill the Sensex plunged by 590 point and the rupee fell by 1.88 to 66.19 to the dollar. In an attempt to apply balm on the looming disaster our most revered Finance Minster asked the country to be patient and said," We will contain fiscal deficit at 4.8% of GDP and the current account deficit at $70 billion this year." Livemint, 28 August. Er, but how? You are the man who started the NREGA scheme, forgave farmers' loans and increased civil service salaries by 80% to win the elections in 2009. There is no way to get that money back. This time round you have started the Backwards Areas Grant scheme at Rs 750 billion, a fake reward scheme for young people who have undergone vocational training for 1 month, supposedly to cost Rs 10 billion and a scheme to supply tablet computers again to young people, which is supposed to cost Rs 80 billion. These are your estimates so we can be sure that all these schemes will end up costing the nation 10 times as much. Now the mother of irresponsible spending, The Food Security Bill has been passed and is supposed to cost Rs 250 billion but only Rs 100 billion have been budgeted for it. Experts say that it is going to cost Rs 1.8 trillion, the same amount that was lost in the fraudulent allocation of coal mines. Where is the rest going to come from? So, you have come up with a 10 point plan which is - reduce the fiscal deficit by controlling expenditure, rein in CAD, add to the country's foreign exchange reserves, revive investment cycle, expedite the capital expenditure plans of state owned companies, capitalize state-owned banks, leverage the good monsoon, encourage manufacturing, boost exports and resolve land and environment issues. Pious words, indeed. You cannot control expenditure because you dare not go against your chief and manufacturing cannot improve when demand is depressed by uncontrolled inflation and there is no electricity. TOI, 28 August. Electricity is becoming unaffordable because we are not producing coal. Thermal coal import rose 52.5% to 12.2 million tonnes in June compared to 7.88 million tonnes last year. Import for this fiscal could be a record 165 million tonnes compared to 137.56 million tonnes last fiscal. Livemint 26 August. Sadly, there is no tax on rubbish talk.

The poor deserve to be respected.

One can understand that a foreigner would have no qualms wasting trillions of rupees to buy votes to remain in power and a bunch of sycophantic creepy-crawlies will obey orders while prone on the ground but why did the opposition surrender to this act of economic treason by not combining to defeat the Food Security Bill? One reason is that no politician would like to be painted as a heartless enemy of poor malnourished children and the other is the view that the poor are hopeless failures who deserve nothing better than 5 kg of rice or wheat every month. The problem starts with the angry debate on how a poor person is defined. Is it a person earning Rs 35 a day or 50 or 100. Surely, 66 years after independence we should aim higher, much higher. We could define a person as poor if he or she has just one of everything. One flat with one room, one car, one air conditioner, one fridge, one TV and one mobile. If the person has 2 of anything then that person would not be classed as poor. However, for the Congress a fridge, a car and an AC are all luxury items to be taxed beyond the reach of everyone so that they can then treat everyone as beggars. Then there are others who try to put a fake economic gloss on the treachery. Their argument is that since the poor spend a large part of their earnings on food giving them cheap food will free up some money to spend on other goods and thus expand the economy from the bottom up. " A well-nourished and well-educated workforce would be more productive and have higher morale, the best guarantee to sustain higher economic growth." Livemint, 27 August. The poor are not fools but their economic calculations are different to others because they have no assets and their income is short term. An adult, especially a laborer, will need more than 10 kg of grains a month but a child will need less. The adults can then feed themselves better or sell the excess for cash. So the poor will produce more children to boost their handouts. This keeps them imprisoned in poverty. It is like keeping a tiger in a zoo. He is well fed and comfortable but is an object of pity. The poor should be paid to have no children. That will release them from poverty and make them respectable rather than beggars who should be pitied. Trouble is you cannot win elections by respecting the voters. Can you?

Are the bandits falling out?

Our most revered Finance Minister is not happy. The rupee is falling like a stone. Inflation, already near 10%, will soar. The stock market dives down like a swallow and then jerks upwards as though pulled up by its hair by the LIC. Credit rating agencies are maintaining the BBB- rating for now which means that their jaundiced eyes are fixed on India. Even the pet journalists on the most servile newspapers are beginning to criticise. It was not meant to be like that. He was the Finance Minister during the first term of the Congress led government which distributed money like confetti. That enabled the second term in 2009. The Congress should have been coasting towards another victory in 2014 in 12 luxury helicopters from Augusta-Westland, instead it is being blamed for the collapse of the economy. The country does not matter but the chief will blame him if the Congress is wiped out next year. So, being a good lawyer that he is, he has begun to muddy the waters. " There are not just external factors, there are also domestic factors," he said." One of the domestic factors is that we allowed fiscal deficit to be breached and we allowed current account deficit to swell because of certain decisions we took during the period 2009 to 2011." ET, 28 August. Not so. You did the damage by wasting vast sums of money with the NREGA program, by forgiving all loans taken by farmers and by increasing salaries of useless civil servants by 80%, instead of spending money on building infrastructure. In 2007 the rupee was 39.33 to the dollar, oil $64 a barrel and inflation was at 4.74%. That was the time when the interest rate should have been raised to bring inflation down to 2% and stop the property price bubble from expanding, buy dollars to bring down the rupee to 45 to the dollar and build up large foreign exchange reserves and adjust taxes to equalise the prices of diesel and petrol. Instead trillions of rupees were looted in the 2G scam, the CWG scam, the coal mines allocation scam and others. Former Telecom Minister, Arun Shourie said," I personally took all the relevant papers and showed them to the PM in the Rajya Sabha gallery after journalists working to unearth the scam sought my opinion." HT, 27 August.
Taking orders from a foreigner to ruin the country is shameful. No point blaming others.

Why history repeats itself.

The Iraq war, which started in March 2003 and ended up costing $3 trillion and anything up to 500,000 Iraqi lives, was a confidence trick played by a man called Rafid Ahmed Alwan al-Janabi who proudly confessed to his lies last year. TOI, 2 April 2012. " My main purpose was to topple the tyrant in Iraq because the longer this dictator remains in power, the more Iraqi people will suffer from the regime's oppression," he said. The Iraqi defector, code named " Curveball ", said " Yes " with a smile when he was asked " We went to war in Iraq on a lie. And that lie was your lie," on a BBC2 program called Modern Spies. A chemical engineer, al-Janabi sought political asylum in Germany in 1999 and claimed to have overseen the building of a mobile biological laboratory. Lawrence Wilkerson, Chief of Staff to the former Secretary of State, Gen Colin Powell admitted that al-Janabi's drawings of the biological weapons lab was " sexed up " by his staff. " I brought the White House team in to do the graphics," he said, adding that the " Intelligence was being worked to fit around the policy." Thus a fictional lab, convincingly disproved by the Chief of the UN Monitoring, Verification and Inspection Commission, Hans Blix, was used to kill so many innocent Iraqis. Trouble is that Saddam Hussein was from the minority Sunni community in Iraq whereas the present Prime Minster is from the majority Shias. Hence the Iraqis are not complaining of the indiscriminate slaughter of civilians and the use of depleted Uranium, which is causing, and will cause for hundreds of years, vast numbers of cancer and congenital defects in babies. Exactly the opposite obtains in Syria where the minority Alawites are in power over the majority Sunnis. The alleged chemical weapons attack last week in a suburb of Damascus is being used by the UK and France to push the US for an attack on Bashar al-Assad. Even a chronic ditherer like Barack Obama is being persuaded to go along. However Syria is not Iraq. " We once again decisively urge ( the US ) no to repeat the mistakes of the past and not to allow actions that go against international law," said the Russian Foreign Ministry while Iran warned of " severe consequences " if the US crosses Syria's red line, in a reference to Obama's red line. msn.com, 26 August. Iraq is near civil war, Afghanistan is lost while Libya remains divided. Have they learnt? No. Hence, history will repeat itself.

We always lose.

As we have been saying for months the government of India is cheating us of our wealth. Even though the Consumer Price Index which governs what we pay for essential goods and services has been increasing at an average of 10% since 2009 the government has forced the Reserve Bank to keep interest rates low. We were told that this was really to help all those who took loans to buy houses and cars and to encourage borrowing by industries for investment which would create jobs and improve the growth of the economy. What these fellows were actually doing was to keep bond yields low so as to pay less interest on the money that the government borrows so as to buy 12 luxury helicopters from AugustaWestland, owned by Finmeccanica of Italy, and for fully paid luxury trips for ministers to attend the World Economic Forum conference at the expensive Swiss resort of Davos. So the government was transferring wealth from people, who have worked hard and controlled their spending to save money, to reckless borrowers who are using our money for private gain. Uncontrolled inflation led to the recent collapse of the rupee, as we had predicted, and now this generosity is being extended to Non Resident Indians to entice them to send more dollars to India, in a desperate effort to stem the rout. Banks in India are offering higher interest rates on Non Resident External term deposits compared to residents. TOI, 26 August. Banks are offering 9 to 9.5% on long term NRE deposits with duration of up to 5 to 10 years compared to residents who are offered a maximum of 8.75%. Not just rupee deposits but even Foreign Currency Non-Resident accounts are offering rates 300 to 400 basis points higher than Libor rates which means that NRIs can borrow at around 1% in Europe, UK or the US and get 5% interest on foreign exchange, paid in the same foreign currency. They are mortgaging our future. Of course, where politicians lead others will follow. Seems that onion traders made Rs 1.5 billion in a couple of months by restricting supplies of onions. TOI, 25 August. They bought onions at Rs 1,500 per quintal between June and July and then kept them in stores. On 12 August the price reached Rs 4,300 per quintal and Rs 4,500 the next day. Indians are the biggest losers.

Amnesia is not dangerous.

Everyone who grew up watching cartoons will know that amnesia is easily cured by bashing the sufferer on the head with a frying pan. So we will not be worried about extreme amnesia suffered by eminent industrialist, Mr Anil Ambani and his wife Tina who were appearing before a CBI court in connection with the 2G telecom scam where licenses were allegedly granted out of turn for vast bribes. We must remember that News International chief, Mr Rupert Murdoch suffered a similar bout of absolute amnesia in July 2011 when appearing in front of a British Parliamentary committee in connection with the phone hacking scandal at News of The World which he owned at the time. However, Mr Murdoch has made a miraculous recovery and is now divorcing his wife Wendy Deng who is famous for landing a sweet right hook on a protester who smeared Mr Murdoch with a custard pie during the hearings. Custard pie on the face in cartoons are always great fun. When asked Mr Ambani said," I am not aware of any company called Swan Telecom." Livemint, 23 August. He also denied any knowledge of about half a dozen companies even when he was shown his signatures authorising transfer of Rs 1.23 billion in between these companies. " It is wrong to suggest that I have knowledge about AAA Consultancy Services (P) Ltd, ADAE Ventures (P) Ltd, Parrot Consultants (P) Ltd, Tiger Traders (P) Ltd, Zebra Consultants (P) Ltd, Swan Telecom (P) Ltd and Swan Consultants (P) Ltd, based on documents shown to me today in the court. It is wrong to suggest that all decisions regarding these companies, as shown to me in court today, were in my knowledge," he said. Fascinating. The ultra rich truly live on a different planet altogether. While we remember with pain every time we have to buy onions at Rs 80 a kg Mr Ambani cannot remember signing away more than a billion rupees. " It is wrong to suggest that I am not disclosing the true facts to this court in order to save the accused from legal punishment," he insisted. Perish the thought, but it will be very useful to the accused none the less. Next day his wife, Tina was similarly afflicted by amnesia. When shown her signatures on various documents she said that if all this was minuted " I must have so acted." Conjugal amnesia. How romantic!

Strange goings on.

The CBI says that 257 files relating to the coal mines allocation scam, known as Coalgate, are missing. HT, 22 August. The government has agreed that some files are indeed missing but said that only 7 files are " being searched " ( sic ). Sadly for the government the Comptroller and Auditor General has poked a spoke in the works by announcing that it has copies of all the files. " It is our practice to retain copies of all key documents pertaining to an audit report. These are the documents crucial to the report," said the CAG. Livemint, 23 August. It was the previous CAG, Vinod Rai which set a cat among the pigeons by exposing the dirt on allocations of coal mines and calculating the loss to the nation of Rs 1.8 trillion. This upset our most revered Finance Minster who said in an interview," I think the former CAG did grave damage to the system. He exceeded his jurisdiction and his mandate. We are importing 160 million tonnes of coal when we should be exporting coal. We have coal reserves for over 200 years." ET, 31 July. He did not explain why only 2 blocks out of 160 captive blocks, allocated between 2004 and 2008, have started production. Meanwhile, a senior officer of the US Air Force, General Herbert " Hawk " Carlisle, Commander of the US Air Force assets in the Pacific, claimed that the US intends to build a base in Trivandrum in India as part of its plan to surround China through its " pivot to Asia " policy. This was instantly denied by the government of India. " India is not going to allow any foreign country to establish any military base on its soil," said Defense Ministry sources. ET, 22 August. Why not? If Sri Lanka and Pakistan have already allowed China to build bases in their countries to encircle India in a " string of pearls " then why do we not take this opportunity to shore up our defense, especially when the cockroach-eaters keep coming across our borders at will. Of course, any military presence will have to be under strict control and linked to complete stoppage of any military assistance to Pakistan. It would not only give food for thought to the cockroach-eaters but bring in huge amounts of dollars and create thousands of local jobs in support services. It could also provide us with precious knowledge about advanced systems. But of course it would not win any elections.

A forked tongue is no support.

In mid July the Reserve Bank increased the Marginal Standing Facility rate to 10.25% from 8.25% if any bank borrowed in excess of Rs 750 billion from the RBI. This was to tighten liquidity in banks to restrict them from buying dollars and so putting downward pressure on the rupee. The RBI also announced mopping up money by selling bonds and through Open Market Operations. Livemint, 16 July. All these measures were taken to support the rupee at a time when it was 60 to the dollar. Immediately treacherous politicians rushed out proclaiming to media channels that these measures were temporary and would be reversed very soon giving the impression that the government had no respect for the RBI and was ready to undermine its efforts. Then on 13 August the Chairman of the RBI, Duvvuri Subbarao himself said that " perhaps " the Cash Reserve Ratio and the Statutory Liquidity Ratio need to come down. ET, 13 August. These are funds that banks are mandated to set aside in case of sudden unforeseen demand for cash. What Mr Subbarao was saying was that he wanted to increase liquidity in banks. Sure enough early this week the RBI announced that it would infuse Rs 80 billion worth of liquidity by buying government bonds through OMO. Livemint, 21 August. This was apparently to shore up bond prices and bring down yields and thus reduce the interest the government has to pay on its borrowings. The question is why is the RBI squirming like a fish on a hook and why is it trying to help the government instead of doing what is good for the nation? Then on 14 August the RBI announced controls on currency transactions. So far Indians were allowed to take $200,000 dollars abroad for investment, study or buying properties but from now on they will be allowed only Rs 75,000 and will not be allowed to buy properties abroad. RBI note, 14 August. Of, course with the rupee down to 65 to the dollar very few, except billionaires, can afford to buy dollars. The RBI also reduced the amount companies could invest abroad from 400% of net worth to 100% of net worth. These were signs of pure panic and markets reacted by selling the rupee. Guess what? Our most revered Finance Minister is at it again. He denied that the RBI or the government wants currency control. Seems that they have no idea that markets do not trust those with forked tongues. You can lie to the aam aadmi but not to everyone.

Where to with the Arab spring?

Seems that 1300 people, mostly civilians, have been killed in a Damascus suburb by some sort of chemical attack, possibly a nerve agent like sarin. Western media have immediately blamed the regime of Bashar al-Assad but they cannot explain why the regime would want to use chemical weapons when a UN team is in Syria to investigate past attacks, albeit with a very restricted mandate. On the other hand it is entirely possible that some rebel group, maybe linked to Al Qaeda, such as the Jabhat al-Nusra, is responsible. Ever since the fall of al-Qusayr to the Hezbollah in April the regime has been making progress as they have been able to link Damascus to their western strongholds in Tartus and Latakia. The rebels, on the other hand, have become fragmented and are fighting with each other and also have access to chemical weapons captured from government bases which have fallen to them. The British Prime Minister, David Cameron, always eager to prove that he is as macho as Margaret Thatcher was, is itching to bomb government forces in Syria, as they did in Libya, but cannot get any UN Security Council resolution in their favor as the Russians and the Chinese block any such move. Barack Obama is not keen to get involved in any offensive that would involve US military personnel and possibly result in casualties. Obama prefers to perform his murders through remote control by using drones to kill innocent children and label them as al-Qaeda fighters. Obama is also confused about what to do with longtime US ally, Egypt which has seen at least 1000 people, mostly of the Muslim Brotherhood, killed in recent weeks after an army coup. A gasbag who can mesmerise people with his oratory does not want to use the word " coup " because that will result in automatic suspension of all aid to the Egyptian army. Israel would be most unhappy if the US did that because the Muslim Brotherhood were natural allies of Hamas in the Gaza strip and would have supplied them with arms with which to fight the Israelis. Meanwhile, Tunisia, the source of the Arab spring, has seen the assassination of 2 opposition leaders, Mohamed Brahmi in July and Chokri Belaid in February. US Ambassador, Christopher Stevens was killed in Benghazi in Libya on 9/11 last year. The Arab spring has become an Arab sewer. Anyone interfering is only going to get his hands dirty.

Just do the right thing.

" India won't face a repeat of that situation ( as in 1991 ) as it has enough reserves for about seven months of imports, compared with 15 days back then," said our most revered Prime Minister. Livemint, 19 August.  Maybe, but we do not have Mr Narasimha Rao, a patriot and not a cringing sycophant, leading us out of this mess. So, as citizens, we may fear that we are far in greater danger today than we were back then. In all this babble about growth, forex reserves, bond yields and so on not one person is talking about the real disease, which is inflation. Inflation is at the basis everything that is wrong with the economy and unless that is controlled there is no hope of stabilsing the rupee and getting the economy to grow again. During the First World War the German Parliament decided to finance the war through borrowing. The Mark fell from 4.2 to 8.91 to the dollar. In the first half of 1921 the Mark fell to 60 to the dollar and Germany suffered a period of hyperinflation till 1924. The Germans have never forgotten that experience and that is why they enforced unrelenting austerity on Greece, Ireland and Spain when they racked up debts they could not repay. After a few years of extreme pain these economies have bottomed out and will start to grow again. The inflation rate in the Euro zone was 1.60% in July and 1.2% in May and interest rate is 0.5%. The average inflation from 1991 to 2013 has been 2.25%. In the US inflation rate was 1.96% in July and 10 year bond yields were at 2.83%. In contrast in India the Consumer Price Index was 9.64% in July and the Wholesale Price Index rose to 5.79% July from 4.86% in June. Instead of using every means to control inflation the talk is about the " comfort zone " for the RBI which is a WPI of 5%. Yields on the benchmark 10 year bonds have soared to 9% which increases the cost of government borrowing. In contrast Japan suffered a period of deflation, which means prices were going down. The Japanese Yen rose to 78 to the dollar and exports began to suffer. Since Mr Shinzo Abe became Prime Minster the central bank in Japan has started a bond buying program similar to the one in the US. The aim was to infuse as much liquidity into the system as to generate inflation to about 2%. The Yen has dropped to near 100 to the dollar and exports are booming. You don't have to be a World Famous Economist to see what is in front of your eyes. You have to be a man.

Betrayal can be economic.

Just a couple of months back pundits are arguing about whether the Indian economy would grow by 7.13% or 6.97% but there was no doubt that it would continue to grow because " the fundamentals " were strong. Now the chatter is about whether the rupee is going to fall to 65 or 67 or all the way to 70 to the dollar. While we acknowledge their deep knowledge of economics do they not see what is happening in other countries? The rupee is falling because the Congress has been spending vast sums of money on social schemes to buy votes, on the one hand, and stealing enormous amounts of money, on the other, instead of spending anything on infrastructure. We are having to buy coal from abroad when we are sitting on 250 billion tonnes of coal because mines were awarded to family and friends. A Parliamentary Committee report said that out of 160 captive coal blocks awarded between 2004 and 2008 only 2 have started production. After the CAG report found a notional loss of Rs 1.70 trillion in allocations of coal blocks the CBI was entrusted with investigating, what has come to be known as, the Coalgate scam. The CBI now says that important files have gone missing especially 5 crucial files related to allotment of coal blocks between 2006 and 2009. TOI, 18 August. This is nothing new in India. In the case of Adarsh scam there was a fire in the Matralaya in Mumbai. To protect the rupee the RBI has banned buying of property in any foreign country which has brought great joy because people will be forced to buy properties in India instead of buying abroad. Mint,17 August. So, even in the midst of an economic crisis these fellows are trying to protect their black money. Aren't they wonderful? However, there is nothing the RBI can do to stop the rupee from falling to 80 to the dollar. When the Federal Reserve in the US started its bond buying program Chairman, Ben Bernanke said that he will continue for as long as it takes but every time the RBI brings in a new measure to support the rupee these fellows scream that it is temporary. The whole world knows that the government is not serious about protecting the economy and its sole interest is in somehow patching things up so that it can waste more money on buying votes. They are planning to distribute tablet computers to high school students throughout India. Cost Rs 80 billion. HT, 19 August. This is purely economic betrayal.

Are we truly independent.

Only 4 days have passed since the 66th Independence Day was celebrated with the usual outpouring of outright lies and empty promises by politicians. So the question that we, the citizens are entitled to ask is," Are we truly independent?" Pakistani army thugs and terrorists ( is their any difference? ) come across our borders at will and kill our soldiers but we do not respond because the US orders us to keep talking. Chinese army roaches put up tents inside our territory, build dams across rivers and are occupying our land in Kashmir but our Foreign Minister goes to China with his hand outstretched in bonhomie. Ah, so. On 15 August the US government reported that the number of Americans applying for unemployment benefit dropped to 320,000 last week, the lowest level since October 2007 which was 2 months before the start of the recession. Inflation is down to 1.96% and the housing market is picking up. The Dow Jones index dropped 226 points to 15,112, that is 1.5% on the good news because it portends a tapering of the bond buying program by the Federal Reserve, also known as QE3. US Markets expect an increase in interest rates perhaps next year so the yield on 10 year bonds rose to 2.83%. If that was a little tremor in the US the Indian market experienced a huge tsunami. The Sensex plunged by 769 points or 4% and 10 year bond yields rose to 8.91% when markets opened on 16 August. The influence of the US was not just in the easy money that was coming from the Fed. The rupee fell to 62 against the dollar and the reason for the fall is that the RBI had announced measures to support the rupee after it fell below 61 to the dollar. The RBI reduced the amount Indians can remit abroad from $200,000 to $75,000 and even that cannot be used for buying properties outside India. Livemint, 15 August. Companies cannot invest more than 100% of their net worth in foreign countries as opposed to 400% of net worth earlier. This scared the bejesus out of investors, especially foreign ones so more money flowed out which caused the rupee to fall further. This means oils, both petroleum and palm, will become more expensive. Which means transport costs will increase adding to inflation and cooking oil, soaps and detergents will jump in value. Seems that Uncle Sam's boot is on us.

Fancy names for robbery.

The most revered Dear Leaders of India have been banging on about how central banks of other countries have stopped concentrating solely on monetary policy to control inflation and have taken on responsibility to stimulate growth and increase employment. They have the US Federal Reserve and the European Union in mind where interest rates are close to zero. They want the Reserve Bank to lower interest rates which, in their opinion, will encourage borrowing for the buying of properties and cars and thus stimulate growth in the economy. This is not only false but a cowardly denial of responsibility. The RBI does not formulate policy nor does it waste vast quantities of public money in dishonest social schemes to bribe the " vote bank " to win elections. Politicians do. The NREGA scheme, which pays Rs 215 to the rural poor for 100 days a year for fictitious work, forgiving all loans to farmers and increasing salaries of useless civil servants by 80% was used to win elections in 2009. For the elections in 2014 the Congress has already started the Backward Areas scheme at a cost of Rs 750 billion, the Food Security Bill at a cost of Rs 2.5 trillion was passed by ordinance and is now being debated in parliament and now the Congress has announced a new wheeze to rob taxpayer money. It has the very dubious moniker of National Skill Certification and Monetary Reward Scheme. HT, 17 August. The length of the name is probably to give it some sort of respectability and hide the intention behind it. But it is a good old fashioned subsidy designed to bribe young people who have been ditching the Congress in droves. It promises to pay a reward to anyone who undergoes a training program for 30 days or more. For training in manufacturing courses the reward will be Rs 10,000 to Rs 15,000. For shop floor job training it will range from Rs 1,000 to Rs 1,500 and for other courses it will be Rs 7,500 to Rs 10,000. " It is a sort of subsidy for people who are able to get proper skills," said Montek Singh Ahluwalia, Deputy Chairman of the Planning Commission. The cost Rs 10 billion. " I want to assure that there will be no shortage of funds if more youth gets skills for employment in the industry," said the Finance Minister. This is the man who promises to reduce fiscal deficit. Pray what skills can you learn in 30 days. Why not give tax relief to industries who give job training? But then the money cannot be robbed.

A parasitic government.

The monotonous drone by our most revered Prime Minister, designed to beat us into submission out of sheer boredom on 15 August, was full of the usual bromides. " We need to strengthen those traditions of our country which teach us to promote tolerance and respect for thought processes different from ours," he preached. TOI, 16 August. What thought processes are those? Those that make Pakistani soldiers cross into Indian territory to kill 5 soldiers or those of the Congress which seek to excuse the killings? Those of Saeed Hafiz who masterminded the Mumbai attacks and promises more attacks against India while the Congress goes on bended knees to beg for peace with Pakistan? Speaking about the economy he said, " We are trying our best to remedy the situation." Livemint, 16 August. How? His government has raised the customs duty on gold from 2% to 10% in steps in an effort to reduce the import of gold. This is a dastardly attempt at stopping people from saving money. First his government allows retail inflation to grow at 10% making it impossible for us to survive, then he forces the Reserve Bank to lower interest rates to protect Congress cronies with black money, which reduces our savings and reduces pensioners to penury, and when people turn to gold to protect their money losing value, he increases the duty on gold, silver and platinum. This is cruel, mean and stupid. Gold imports more than doubled in the April to June quarter of 2013. TOI, 16 August. Gold shipments increased to 338 metric in the 3 months compared to 153 tonnes last year. Total demand rose 71% to 310 tonnes, with demand for bars and coins increasing to 122 tonnes from 56.5 tonnes and sales of jewelry increasing 51% to 188 tonnes. Full year demand is seen at between 900-1000 tonnes. However, imports may drop to 150 tonnes in the second half of the year because of higher taxes and new Reserve Bank restrictions linking import to reexport but smuggling is likely to increase which will not bring taxes. In Delhi hotel occupancy rates are down by 50% and luxury tax collections have fallen from Rs 910 million last year to Rs 880 million to 31 July, 2013. This is because of a plethora of new taxes on gyms, spas and banquet halls forcing foreigners to go to cheaper destinations like Bangkok. Parasites can suck only so much blood before the host dies.

Control inflation and decrease taxes. It's easy.

Industrial production fell 2.2% in June and is down 1.1% in the April to June quarter. The index was down 2.8% in May and not 1.6% as was reported earlier. Livemint, 13 August. Compared to July of last year car sales are down 7%, commercial vehicles sales are down 15%, 3 wheelers sales are down 6%, motorcycles sales are down 2% and utility vehicles sales are down 17.53%. Car sales have fallen 9 months in a row. Utility vehicles was the only segment which was growing on the back of lower price of diesel as compared to petrol, higher disposable income and higher farm output but sales are falling because diesel price is being raised every month to bring it into parity with petrol. Taxes on UVs were raised from 27% to 30% in the last budget on vehicles with engine capacity exceeding 1,500 cc, length exceeding 4000 mm and having a ground clearance of 170 mm or more. The Consumer Price Index fell from 9.87% in June to 9.64% in July but is still very high. The Wholesale Price Index has increased to 5.79% in July from 4.86% in June. The rupee is still below 60 to the dollar and will fall further because of uncontrolled inflation which will increase the rate of inflation even more. So what is the answer of the government to a collapsing economy? The customs duty on gold has been increased from 8 to 10%, on platinum from 8 to 10% and on silver from 6 to 10%. This is to discourage people from buying gold ornaments which will hopefully reduce the Current Account Deficit and raise Rs 48.30 billion in extra revenues. They are also deciding on increasing taxes on imports of " non-essential "  goods. Seems that this Congress government has just one response to every economic problem and that is to raise taxes. They seem incapable of understanding that high taxes add to prices and depress consumer demand. If demand is low companies will cut production, instead of adding to capacity, fewer jobs will be created and demand will fall further. The Congress is absolutely determined not to take the one step that will solve all our problems and that is to increase interest rates, not by insignificant amounts but by 500 basis point to 12%. This will bring down inflation and encourage people to save more in banks instead of buying gold and thus bring down the CAD. Banks will have more money to lend and companies will start to invest once demand picks up. Why are they so against doing the right thing? Mystery.

A recipe for disaster.

The net debt of top 6 steel producers is already at Rs 1,525.57 billion and is set to rise higher due to the falling value of the rupee. Livemint, 2 August. Tata Steel's debt is set to rise to Rs 632 billion in 2014 and the reason is that 62% of Tata Steel and 40% of Jindal Steel's debt is in foreign currency and so will increase as the rupee falls. Tata bought the Anglo-Dutch company, Corus Steel in 2006 and therefore has the technology to manufacture high end steel for exports. The global economy maybe down but defense and properties are still booming and, with huge reserves of iron ore and coal in India, Tata should be having an advantage over competitors in other countries. Trouble is that mines are presented to to relatives and friends who either export the produce illegally or just sit on them, hoping to sell out if prices rise. The Indian School of Business in collaboration with a leading business school in Brazil, Fundacao Dom Cabral has published a list of Indian companies which are the most " internationalized ". Livemint, 6 August. ONGC Videsh, the government owned oil company is at the top with 77% of its business as Transnational. Its total assets are Rs 255 billion of which Rs 252 billion are abroad and its total revenues are Rs 227 billion of which Rs 221 are from abroad. This is not surprising as India has very little oil and it is probably heartening that a state owned company has so much enterprise. Trouble is that the next 14 companies on the list are all private companies which earn a significant,if not a larger, share of revenues from abroad. Number 2 on the list is Tata Steel with 63% of business Transnational. Its total assets are Rs 1,258 billion of which Rs 757 billion are in foreign countries and it has revenues of Rs 1,329 billion of which Rs 977 billion are from abroad.  Number 7 is Hindalco, an aluminium company 55% of whose business is Transnational. Its total assets are Rs 885 billion of which Rs 466 are abroad and its revenues are Rs 808 billion of which Rs 618 is from abroad. Reason? Exorbitant taxes. The government is thinking of reducing taxes on electronic goods in duty free shops in our airports. Taxes including VAT, octroi and local taxes add 25% to electronic goods and 23% to mobile phones. HT, 10 August. Why were they called duty free in the first place? Huge taxes to finance massive spending leading to massive deficits, rising prices and a falling rupee. A recipe for disaster.

Political party or mafia gang?

Why is the Congress so keen to get parliament to pass the Food Security Bill, which is considered dangerous for the economy by most economists because it will add another Rs 2.5 trillion to government expenditure, increase fiscal deficit, increase inflation and will not improve malnutrition because it is designed to dish out cereals at throwaway prices but does not provide proteins, vitamins or essential minerals and so will do nothing for childhood anemia, stunting or intellectual growth. The Congress reasons that the masses that make up its " vote bank " are poor,hungry and illiterate enough to be treated like animals where you throw them some food and expect them to wag their tails and vote for the Congress in extreme gratitude. And the reason that the Congress is desperate enough to sacrifice the future of the country is because the son-in-law of the chief, Ms Sonia Gandhi has been accused of being a land shark. TOI, 12 July. In his reply to an inquiry commission set up by the Haryana government, Haryana IAS officer, Ashok Khemka has alleged that Mr Robert Vadra's firm was involved in " forgery, falsification and sham transactions ". Vadra's company, Skylight Hospitality bought 3.53 acres of land in Shikohpur in 2008 from Onkareshwar Properties for Rs 75 million and then got permission to build a colony from the town and country department within 18 days. At that time Skylight's total capital was just Rs 100,000 and had only 2 shareholders, who were Mr Vadra and his mother Maureen. The land and the permission were then transferred to DLF for Rs 580 million, making a profit of Rs 426.1 million. Mr Khemka further alleges that the cheque for Rs 75 million, drawn on Corporation Bank was fictitious and that the entire transaction was a sham. " This funding from DLF group was used to clear dues of Rs 79.5 million, ie Rs 75 million towards cost of land plus Rs 450,000 towards stamp duty," says Mr Khemka. In other words Mr Vadra showed a fictitious transaction to get permission to build a colony on agricultural land from the Congress government of Haryana and sold it to DLF for profit without acquiring the land himself. Mr Khemka reckons that Haryana could have lost Rs 3.5 trillion in stamp duty from bogus land deals in the last 8 years. The reaction of the Congress to these charges? They abused Mr Khemka, calling him a BJP stooge. This is how the mafia works.

Every figure in the negative.

For the first time in 2 years the HSBC Markit Services Purchasing Managers Index fell to 47.9 in July from 51.7 in June. Livemint, 5 August. New business shrank for the first time in 2 years and business optimism declined to 47.8 in July from 51.9 in June. Any figure below 50 shows contraction and above 50 shows growth. With retail inflation at 10% and every service being heavily taxed it is not surprising that people are refusing to spend. HSBC Manufacturing PMI fell to 50.1 in July from 50.3 in June. The sub-index for new orders fell to 49.5 in July from 49.7 in June due to a sharp slowdown in growth of export orders. Normally a depreciation of currency results in increase of exports by making goods cheaper. That is why China keeps its currency, the Renminbi weak against other currencies so that its goods remain cheap and it can continue to grow at 7.5% by exporting to the world. Sadly our businesses are unable to take advantage of a weaker rupee because of the abysmal state of our infrastructure, very high taxes and the additional expense of corruption. If businesses are not doing well it follows that they will be unable to repay their loans to banks. Gross Non Performing Assets of 40 listed banks rose by 36% to Rs 1.8 trillion from Rs 1.3 trillion a year ago. NPAs of Punjab National Bank rose by 4.84% from 3.34%, Union Bank by 3.5% from 2.98% and Bank of Baroda by 2.99% from 1.84%. NPAs of Bank of India rose from Rs 7.86 billion to Rs 12.16 billion. Livemint 2 August. " Deteriorating asset quality and earnings are likely to constrain the credit profiles of Indian banks over the next two years," said S&P credit analyst, Geeta Chugh. " We no longer expect the corporate sector to mildly recover in fiscal 2014, given slower-than-expected GDP growth, heightened currency volatility, and high interest rates," she said. Livemint, 7 August. S&P expects NPAs to increase to 3.9% of total loans in fiscal 2014 and to 4.4% in fiscal 2015, from 3.4% in fiscal 2013. S&P, being an international credit rating agency, has to be cautious in its analysis. The reality is that the Congress will do anything to try and win impending general elections because without power you cannot loot and because it is terrified that if it loses all its crimes could become public. It will sacrifice the economy to try and win.That is why there is a real chance of a recession.

You cannot square a circle.

There seems to be an expectant hush over economic news in India. Everyone, including politicians, share brokers and business tycoons are holding their collective breaths with fingers and toes crossed to see whether the new Governor of the Reserve Bank, Raghuram Rajan reduces interest rates when he takes over on 5 September. In the interim he will be working as Officer on Special Duty. The RBI has decided to sell Rs 220 billion worth of bonds every Monday to reduce liquidity and support the rupee which is around 61 to the dollar and in danger of sinking further. This shows that the RBI is determined not to raise interest rates which would control inflation, stimulate saving and support the rupee. But resorting to short term measures only sends the message that the RBI is not really serious about the economy and is working to support the Congress by reducing rates as soon as possible. Whether it can continue with its juggling without disaster remains to be seen. Apart from the Congress, reducing rates only helps the property market. According Magic Bricks PropIndex prices and supplies of properties in 11 cities have gone up. TOI, 10 August. In Mumbai builders are constructing apartments costing between Rs 150 million and Rs 1 billion, which is a little more than $16 million, at $300 a sq foot. Average price of a luxury apartment in Manhattan is $4.2 million. Builders are sure of selling off their stocks in 3-4 years. While the Chinese are complaining about prices with an inflation rate of just 2.7% year on year we are dying with inflation at 10%. Politicians could not care less. All they are interested in is to protect black money which will be needed to win the next elections, never mind if the country goes back to the stone age. To win they also need vast sums of money to bribe the " vote bank " but this will increase deficit and push the rupee down further. So an inter-ministerial panel has suggested higher taxes for import of non-essential goods, which they class as luxury items. This apparently will help to reduce the Current Account Deficit. The beauty of this scheme is that they will not be personally affected as they can take their families on shopping trips abroad on taxpayer money and return loaded with contraband without paying any duties as they are exempt from customs searches. It is impossible.

The world has moved on.

It is legacy time for Barack Obama. He withdrew troops from Iraq which is now close to civil war, a complete waste of trillions of dollars and hundreds of American lives. He is going to do the same in Afghanistan where the Taliban, supported by the ISI, is waiting to take over. The ISI was responsible for 9/11 yet the US is still supplying advanced weapons systems to Pakistan for permission to use drones to kill unarmed tribesmen and children in Waziristan. So, do Pakistanis love the US for all the money and support that is given to them regardless of all the crimes they commit. Er, no. Yesterday the US consulate in Lahore was shut down and, except for a few emergency staff, all others were transferred to Islamabad. Americans have been advised not to travel to Pakistan. This is because of some credible information of attacks on American facilities and citizens. The US is at pains to stress that this is not related to the closure of 21 diplomatic posts shut down since 4 August in the Muslim world right across from Libya to Mauritius in response to " intercepts " of conversations between the Al Qaeda chief, Ayman al-Zawahiri and the chief of Al Qaeda in the Arabian Peninsula, Nasser al-Wuhayshi, also known as Abu Basir. This threat could continue till the end of August. Cannot do much diplomacy if all your missions are shut, can you? The trial of Nidal Malik Hasan has started. He shot 13 soldiers to death and injured 29 others, at Fort Hood 5 November 2009. Instead of underwear bombs Al Qaeda could use the Second Amendment to great effect. In a fit of pique Obama has cancelled a one-is-to one meeting with Vladimir Putin in early September before the G20 economic summit for granting asylum to Edward Snowden. Meanwhile, new Secretary of State, John Kerry has arranged a meeting between Israel and Palestine. Two old friends, Saeb Erakat and Tzipi  Livni have turned up. During a previous summit arranged by Obama's Middle East envoy, George Mitchell in 2008 Livni told Erakat," In order to create your state you have to agree in advance with Israel - you have to choose not to have the right of choice afterwards. These are the basic pillars." Erakat complained to Mitchell," What good am I if I'm the joke of my wife, if I'm so weak." The world is no longer impressed with a gasbag. Maybe if he sucked up to China.

The poor taxpayer.

We already know of Air India racking up a debt of Rs 450 billion, now we are told that the public sector telecom giant, BSNL has accumulated losses of Rs 252.58 billion. The company says that it may make a profit of Rs 350 million by 31 March, 2018 if it gets a cash injection of Rs 150 billion from the government, which means taxpayer money. Mint, 7 August. In fiscal 2006 it had revenues of Rs 410 billion which have dropped to just Rs 263.96 billion in the last fiscal. Its problems, like all our problems as well as the problems of the country, are due to the government. In 2009 a committee had recommended that 30% of its shares should be sold to the public and the number of its employees reduced by 100,000 but the government took no action. The company is expected to make a loss of Rs 38.72 billion this year, Rs 41.07 billion next year, Rs 24.84 billion in 2015-16 and Rs 11.64 in 2016-17. The company seems to have been cheated in more ways. In 2010 it was forced to pay Rs 83.13 billion for 3G spectrum in 20 circles of which Rs 67.24 billion was for broadband wireless access in the 2.5 megahertz band, which it wants to surrender. Both MTNL, which serves Delhi and Mumbai, and BSNL which serves the rest of the country did not participate in the auction for spectrum in the 2.3 MHz band but were forced to pay at the discovered price and then were given spectrum in 2.5 MHz band, which is useless. Both companies now want their money back. An application filed under the Right To Information Act last year revealed that 6 serving MPs and 399 retired MPs - both dead and alive - owed Rs 70 million to MTNL. No action was taken against the cheats by MTNL to recover its dues. In its reply MTNL said," No parliamentarian is found for violation of any of the norms." TOI, 21 June, 2012. MPs are allowed 150,000 free telephone calls in one year so this excess was over and above that number. Yet no action was taken. MTNL covers only 2 cities while BSNL covers the rest of the country. Imagine trying to get unpaid dues from the thugs in UP, Bihar or Tamil Nadu ? Thousands of petty politicians must be enjoying free phone calls in every state. Add to that huge numbers of useless employees and it is no wonder that they are making losses. The taxpayer always suffers.

Only patriots can be good economists.

Politicians in India seem unable or unwilling to understand that the rupee is inversely related to inflation. One fellow said that central banks should not focus solely on inflation but on growth and employment as well, not saying what scores of ministers, costing tens of billions of rupees, were there for. Investment guru and publisher of the Gloom, Boom and Doom, Marc Faber said," They should appoint me to be the chairman of the RBI. If I were the decision maker at the Reserve Bank of India, I would tighten monetary conditions and see to it that the currency stabilizes and there is no inflation. I will also see to it that the fiscal deficit is eliminated. Of course with all these measures the stock market will thank me; I will guarantee you." Mint, 5 August. Therein lies the problem. Politicians are not interested in the economy. On the one hand they are complete sycophants, willing to commit any crime to get noticed by the leader, and on the other they want to hang on to their seats in parliament, no matter how much damage they do to the country. Thus, they have forced the RBI to keep interest rates artificially low, increased taxes to insane levels, reducing growth, and made it almost impossible to import gold, leading to increased smuggling and lower tax collections. Now there is discussion of selling " proxy or quasi sovereign bonds " to foreign investors, such as pension funds, to raise dollars. These bonds will offer up to 9% interest when interest on bank deposits in the US is zero percent. So, while the RBI has cut interest rates to 7.25% in India, which has forced banks to cut interest paid to domestic savers, the government is willing to give money away to foreigners. Foreigners and Non-resident Indians will be able to borrow in the US at 1-2% and get a mind blowing 9% on their money. When these bonds mature in 5 years time a future government will have to find a massive amount of dollars to pay off our debt, again causing stress to our Current Account Deficit. This is economic treason. Some economists are more optimistic, saying that the fall in the value of the rupee will increase exports by making them cheaper. Will it? If you want to buy a fridge or and AC in India you will find dealers selling LG or Samsung in every neighborhood. Will you find an Indian brand? If they are not selling in India what are they going to sell abroad? Like defense economics is for patriots only. Not for traitors.

Onions and houses.

Onion prices have risen by 45% in the the last one week, from Rs 38 per kg to Rs 55 per kg. HT, 5 August. And the price is likely to rise further. " Supply in the domestic market is low due to rain destroying the harvest in Maharashtra and exports to other countries," said Anil Malhotra of the Agricultural Produce Marketing Committee. Hang on. Weren't the politicians and the freeloading press promising us cheap food as the monsoons have been very good this year? Yet prices of all food items including, vegetables, even seasonal ones, milk and meat are rising. With oil at $105 a barrel and the rupee dropping to yet record lows the cost of diesel is set to rise further adding to prices. Reasons for rising prices of food are not hard to find. The government sets a Minimum Support Price for cereals, such as wheat and rice, which keeps the price high even when there is a bumper crop and farmers grow ever more cereals in the knowledge that the government is going to buy their produce. Why grow fruits and vegetables, which are perishable items, when you can safely grow wheat, secure in the knowledge that the government is going to bail you out. The other reason is that the price of properties in Delhi have risen by 60% in the 2 years between 2011 to 2013, higher than prices in 43 other countries. The next is Sao Paolo in Brazil which has risen by 43%, followed by Hong and Kong at 33%. TOI, 5 August. But Delhi is second to Jaipur where property prices have risen by 67%, Pune is third at 49%, followed by Chennai at 42%, Bhopal at 38%, Mumbai at 27%, Faridabad at 25%, Bengaluru at 24%, Lucknow at 17% and Ahmedabad at 16%. We have to remember that this is on an extremely high base because prices had already increased by 800% by 2011. This phenomenal rise in prices has led to an explosion in construction of domestic properties which has sucked in vast numbers of rural labor, increasing wages and adding to prices of food. Land prices have risen to shocking levels and farmers have happily sold out, reducing the area of arable land. The taxi stand near the domestic airport in Delhi has around 800 taxi drivers, of whom about 45 are millionaires who come for duty in their own cars. They still drive taxis because they are not educated. Thus the growth in the economy has been based on one-time windfall gains and black money. Only in India would onion prices rise on properties. Incredible India.

You cannot be a chamcha and a man at the same time.

We are constantly being told by politicians and tame economists that all our problems are due to high interest rates and it is the Reserve Bank which is holding up growth by refusing to lower interest rates by large chunks. In fact, all the present problems of uncontrolled inflation, a sinking rupee and falling investment is because the RBI did not raise rates fast enough and high enough to really have any effect on inflation. At all times the RBI seemed to be trying to please the Congress by keeping rates too low while praying for some divine miracle to lower inflation. Interest rates were down to 4.75% in April 2009 in a blatant attempt to influence elections in May in favor of the Congress. It worked and the Congress increased its seats in parliament. But at the cost of the country. Uncontrolled inflation has resulted in the rupee falling to below 60 to the dollar and the RBI has been forced to tighten short term lending rates in an effort to reduce money supply and the rupee falling further. The Governor, Subbarao said," Rates will come down in the future, but not till such ( time ) as currency volatility is there. " Livemint, 31 July. He said that the RBI is unable to reduce rates as the country is " currently caught in a classic impossible trinity trilemma," and forced to " forfeit some monetary policy discretion to address external sector concerns." Trilemma refers to managing free capital movement, a stable exchange rate and an independent monetary policy. What he is saying is that he is not free to decide monetary policy and that the rupee could fall further if the Federal Reserve decides to taper its bond buying program. He said that he cannot say how temporary the monetary tightening is going to be because " we were not in a position to tell how temporary it is. It is state contingent and data dependent." That is patently not true. All the data was pointing to a rising inflation but he held on, trying to please the Congress until forced to take action. There have been civil servants, such as TN Seshan and Vinod Rai, who stood up to politicians and have gone into history books but Mr Subbarao will be remembered by the people as a Congress lackey while the Congress is so displeased with him that they have refused to renew his contract. Thus he has pleased neither. A lesson for all civil servants - you can either be a chamcha or you can be a man. You cannot be both.

A game of beggars.

Something called a Tendulkar Committee ( Suresh as opposed to Sachin ) has calculated that the line dividing the ordinary poor from the abject poor is an earning of Rs 33 per day. This has generated extremely heated arguments since last year. While TV anchors have been screaming about how impossible it is for any human being to survive on a meager income of Rs 33 a day, in an attempt to increase ratings, self appointed pundits have argued gravely on how how a family of 5 with each member earning Rs 33 per day amounts to a combined earning of Rs 4950 a month, which is what lots of low-paid people survive on anyway. Now the Planning Commission has claimed that the ratio of poverty has fallen from 37% of the population in 2004-05 to 22% in 2011-12, which is a reduction of 138 million in the number of poor people. Again a fierce debate has broken out on what constitutes a poverty level and whether the figures are totally fairy tale, to make the Congress look good. To add spice to the arguments one politician has claimed that it is possible to get a full meal for Rs 12 in Mumbai while another one, not to be beaten, has claimed that one can obtain a meal in Delhi for Rs 5. This was calculated to be a red rag to the bull sending all TV anchors into a frothing frenzy. Teams of journalists, who normally write ignorant articles sitting in their air-conditioned offices, went out to investigate the minimum amount of money to buy the cheapest meal from a dhaba or a roadside vendor. So called economists have written articles based on calculations of the minimum wage earned by laborers. TOI, 4 August. What is amazing is the cheerful acceptance of poverty as a fact of life. There is no sense of shame that 66 years after independence, of which the Congress or its stooges were in power for 58 years, people are arguing about what constitutes abject poverty and if people are above some arbitrary line determined by a committee then everything is fine and the Congress is entitled to another glorious victory in elections. Congress politicians are quick to point at the US or Europe when increasing taxes so why do they not look at these countries to find the lowest level of poverty. In western countries your maid will come in her own car an will have central heating in her home. But without legions of naked poor politicians cannot justify looting taxpayer money for social schemes to bribe the poor. Hence the game of beggars. Keep people poor by giving them handouts and do not allow them to become rich by spending on infrastructure. Parasites.

You cannot fight the shameless.

India is now firmly in the grip of criminals who believe that no one should interfere with their criminal activities. An IAS officer, Durga Sakthi Nagpal has been suspended in UP by the UP government because she dared to take on the sand mafia. She even had the temerity to impound more than 40 vehicles being used for illegal quarrying of sand. Seems that a senior politician of the ruling party in UP paid Rs 51,000 to local villagers to build an illegal wall on government land. When Ms Nagpal had the wall demolished he lied to the Chief Minister that she had stopped the construction of a mosque and got her suspended. Villagers deny that they had any intention of building a mosque at that site. He was caught on camera boasting about his deeds but now denies everything, being a criminal coward. Now the Central Civil and Administrative Services Association have filed a petition against the blatant victimisation of an officer trying to carry out her duties. If politicians claim the right to earn vast fortunes from criminal activities others will naturally want the same privilege. The LPG ( domestic gas ) Dealers Federation has complained to the Oil Ministry about oil companies enforcing their code of conduct. They are furious that their employees have to weigh cylinders of gas at the point of delivery to customers because this " can attract problems like back injury, slipped disc, shoulder injury, resulting in paralysis or serious injury leaving him permanently bed ridden or physically handicapped." Such concern for their employees brings tears to your eyes does it not? However, they show their true colors when they claim that it should not be regarded as a " critical irregularity " if they sell more than 50 " unaccounted " cylinders. Which means selling in black. Indeed, they say that it is a " humanitarian " act and want the limit increased to 300 cylinders. Where, except in India, would an organisation officially ask for the right to sell cylinders of gas in black? The reason is that supply of domestic gas is controlled by the government and is apparently subsidised. Each family is allowed 9 cylinders every year at Rs 400 per cylinder after which the price rises to Rs 950. Since there is no price discovery we do not know what the true price of gas is. When there is a total lack of shame there is no control. We are helpless.

Should there be a mandate to hide corruption?

In an interview to the TOI on 31 July our most revered Finance Minister was asked whether the tax department is " highly confrontational ". " It is exaggerated. Are they not confrontational with the OECD countries? Every country is worried about base erosion and profit shifting," he said. Er, it is absolutely not the same. Sure, in OECD countries everyone has to pay taxes. Including politicians. And that is the point. In India rates are too high and, as the Minister himself admitted, only 35 million out of a population of 1,200 million pay income tax. And receive no service in return. The money is looted by evil politicians and civil servants for self, family and for bribing the " vote bank " to win elections. That is why the economy is going to collapse. A simple vegetarian meal at a roadside restaurant at a cost of Rs 400 attracts tax of Rs 66 which is works out to 16.5%. If that is the tax on food one can imagine the rates on essential goods such as fridges, cars and air conditioners. We hear that taxes on " luxury goods " will be increased. Why should white people live in luxury and Indians live like beggars? When asked if the previous Comptroller and Auditor General had caused pessimism in the economy he said," To a considerable extent. The former CAG did great damage to the system. He exceeded his jurisdiction and he exceeded his mandate. We are importing coal we should be exporting. We have coal reserves for over 200 years," was the reply. But we are also having to import iron ore which we were exporting not so long ago. Surely a Finance Minister, especially one who is desperate to reduce fiscal and Current Account deficits and is piling on extortionate taxes on hapless citizens, should be delighted to find out how trillions of rupees have been looted so that he can increase revenues. A Parliamentary Committee on coal and steel, not the CAG, said that all coal blocks allocated since 1993 were illegal. Out of 195 coal blocks allocated for captive mining since 1993, with reserves of 44.23 billion tonnes, only 30 blocks have started production. Out of 160 captive blocks allocated during 2004-2008, when he was also the Minister of Finance, only 2 have started production. Would he accuse his colleagues in parliament of exceeding their " jurisdiction " and " mandate ". No one should have a mandate to keep silent on corruption. Strange that a man in charge of finance of the nation should think so.

Nail the lies.

During presidential elections in the US last year various organisations kept a strict vigil on the veracity of what politicians were saying. Fact Check at Washington Post awarded 3 Pinocchios to one candidate for making a completely wrong statement. PolitiFact called it a " pants on fire " lie. In India politicians, especially ministers, are able to get away with whoppers without any challenge from journalists or experts. Our most revered Finance Minister said recently," All over the world, the thinking has changed. The mandate of the central bank must not only be price stability. The mandate of central banks must be seen as larger mandate which includes price stability, growth and maximizing employment." Livemint, 30 July. That is a real whopper. It is not the duty of the central bank to create jobs. That is the job of ministers who create policies and are responsible for government spending. It is true that the Federal Reserve is injecting $85 billion into the market every month by buying treasuries and mortgage backed securities but that is only because inflation rate in the US is below 2% and not running at over 10%, as in India. In fact, the Fed is acutely conscious of the possibility of inflation and the Chairman, Ben Bernanke said that the Fed would begin to wind down the stimulus as soon as it was sure of recovery or if unemployment came down to 6.5%. That caused Foreign Investors to sell off $3.5 billion of Indian debt which caused the rupee to fall below 60 to the dollar. The European Central Bank is helping countries like Spain by buying Spanish bonds so as to keep yields below 7%. Yields on the benchmark 10 year government bonds in India are already over 8% and on treasuries at over 11%. In Japan the central bank is trying to get inflation up to 2%. Whereas the US has 15 cabinet posts and 7 of cabinet rank, making 22 in all we have 53 ministries, each with its air conditioned offices, countless civil servants and security guards. No central bank can control prices while parasitic politicians loot hundreds of billions of taxpayer money through scores of scams and spend trillions of rupees to win elections. The looted money is either sent broad or invested in properties and taxes have been increased to extortionate levels to keep the fiscal deficit under control. This has caused inflation to soar but the RBI is not allowed to increase interest rates to control it. Sadly our journalists and experts are scared to nail the lie. Criminal liars.