A bit of this, a bit of that and a bit meaningless.

The Union Budget day, the most terrifying day of the year, passed yesterday and thankfully we have not been saddled with huge tax hikes. What a relief! Now we can wipe our sweat and relax till next year, when the circus returns once more. There are some good things in the budget and some idiotic. What is the point in spending Rs 1 billion in reviving 160 airports if the excise duty on jet fuel is raised from 8% to 14%, which will make flying too expensive for a majority of people? With salaries of useless govt employees jumping due to the Seventh Pay Commission it is sensible to try to reduce the number of employees. Provided, of course, the govt knows how many employees it has. The biometric identity card will be made mandatory for all citizens so govt employees should be paid according to their Aadhar number, which will immediately banish ghost employees. A 0.5% cess has been added to Service Tax which will take it to 14.5% but it does not matter because a tax rate of 18-20% has been proposed in the Goods and Services Tax Bill. The budget hopes that the GST bill will be passed. Really? The nominal GDP growth has come down because of lower inflation which has increased the debt to GDP ratio from 57% to 67% in 3 years. With yields on bonds rising the interest outgo will be higher. Wholesale prices have been falling for 15 months in a row which means less collections from excise duties and VAT, which are levied on ad velorem basis. If GST becomes law the govt will not be able to increase taxes at whim with sly additions of cess, which are taxes on taxes, so its wish maybe pious, but false. Increasing rural infrastructure is vital and the proposal to create an e-market, which will reduce the stranglehold of middlemen on agricultural products, is absolutely brilliant. However, the increase in duty on latex to 20% will increase the price of condoms. Absolutely stupid, seeing that India is suffering from a population curse and condom use needs to be encouraged. Levying a cess of 2.5% on diesel cars is completely senseless. It would be much better to increase excise duty on diesel while lowering it on petrol so that both cost the same, as in the US, where petrol is slightly cheaper than diesel. Since diesel cars cost a lot more car owners will shift to petrol engines while diesel prices will not rise much because of very low crude price at present. Keeping diesel price low to keep inflation in check is stupid. Finally, the intention behind spending Rs 18 billion on increasing skills of young people is good but where are the jobs. Banks cannot lend because of huge bad loans and business fellows cannot repay loans because they have diverted the money into real estate and cannot reduce prices to sell properties because they have bought land at humongous prices. It will be a hard slog. But at least get rid of the idiotic bits.

When names and affidavits are not real are we in a nightmare?

Lies, rioting, tampering with evidence, abject sycophancy, Indian politicians will dive into any putrid cesspit for personal gain. P Chidambaram, who was Minister of Finance and Home in the previous Congress government, personally doctored a file, used for an affidavit in the Supreme Court, to delete any connection between Ishrat Jahan and the LeT, a terrorist organisation based in Pakistan. That surely makes him guilty of perjury, contempt of court, tampering with evidence and treason, for assisting terrorists. Recently, students in JNU have been shouting anti-Indian slogans for the hanging of Afzal Guru, implicated in the attack on our parliament in 2001. To murky waters further Chidambaram said that " one can hold an honest opinion that the (Afzal Guru's) hanging was not correctly decided." Really? Guru was hanged in 2013 when the Congress was in power and, being a lawyer, surely he should have voiced his doubts then. Why is he so slimy? Because unless you lick boots of party leaders you will not be appointed minister, which is when you rake in the moolah, or president, which puts you above the law for life. So overwhelming is the greed for power that they will incite riots, resulting in deaths, rapes and destruction of property worth billions of rupees as happened in Haryana recently. After the shooting of Indira Gandhi Sajjan Kumar was heard exhorting people to kill Sikhs saying," Indira Gandhi is our mother and these people have killed her." Not a single politician has been punished for those killings. Because leaders offer protection to workers political parties are a magnet for all kinds of assorted thugs and scum, as is the case in Bengal. Doctors in Bihar are demanding guns after Mr Bihar, Nitish Kumar won the assembly election by linking arms with 'goonda raj'. In Tamil Nadu the Chief Minister, Jayalalitha is revered as a goddess by her followers who will do anything to show their admiration for her, including having her image tattooed on their arms, sticking her photos on aid relief for flood victims, pouring milk over her poster and even crucifying themselves. But while Trinamul is restricted to Bengal and AIADMK to Tamil Nadu the Congress is a national party which naturally came into power at the time of independence. Members of Congress feel that they are entitled to be in power permanently, and see the BJP as a usurper, even though they were overwhelmingly rejected by voters. There are doubts that the Gandhi name is not genuine but adopted for convenience. Modi is determined to root out corruption which is why the hatred is visceral. Let us hope he succeeds.

Should we not be trying to make everyone richer?

The Communist Party of China is proud that there are more dollar billionaires in Beijing than in New York but India is so proud of its poor that the Economic Survey recommends increasing handouts, to be paid for by increasing taxes on the middle class, so that everybody is poor. We read scary reports, such as that by the charity Oxfam, which says that the richest 62 people have as much wealth as the poorest 3.6 billion and the top 1% own more wealth than the rest 99%. In 2011 the Occupy Wall Street movement was born out of anger at this inequality. Bernie Sanders, who is campaigning to be the Democratic candidate in this year's presidential election in the US, wants to increase top rate of federal income tax to 54% but a professor, who has written a book 'Superbosses', says that the wealthy create more wealth for shareholders and employees than for themselves. We are told that world commodity prices are falling because of a slowdown in China, hurting economies of Brazil, Australia and Saudi Arabia. But China is still growing at around 7% which is one of the fastest in the world but that is slower than over 10%, and it is increasing poverty in the rest of the world. US consumer spending is in excess of $11 trillion a quarter, more than 5 times our annual GDP. Imagine what would happen if it were to slow. So what makes people wealthy? Billionaires are more likely to have attended elite schools and universities. Studies show that wealthy parents raise wealthy kids, even if they are adopted. However, the Right to Education Act has been a disaster because the Congress stopped all exams in schools, because children of illiterate parents will not be able to compete with classmates. Now 18 states have decided to bring back exams and detain students who fail. A study in the UK found that middle class parents use their knowledge and networking to help their children to earn more than more talented children from poorer families. It is wrong that an accident of birth should tarnish a child for life, say some. Others feel that it should be a duty of all parents to help their children to achieve the highest they can. Are we not proud that people of Indian origin are the richest ethnic group in the US? But maybe we are looking at the wrong end. The adverse effects of poverty are like a disease. If mothers are malnourished during pregnancy then those children are more prone to metabolic diseases and early deaths. Children from poor families have brains which are 6% smaller. Even as we are told that pollution is killing people in Delhi, studies show that people living in cities are wealthier and live longer than those living in rural areas. Why then is poverty glorified by the self-styled liberal, socialist intelligentsia in India? They must be gaining something.

If everything is paid for by the taxpayer what do they know?

The Economic Survey has published the usual socialist mishmash, saying that Rs 1 trillion could be saved if subsidies given to the rich are withdrawn. We are being constantly harangued to pay the market price for gas cylinders, that at least 23% of voters should be paying income tax, instead of 4% as at present, and companies must spend 2% of net profits on Corporate Social Responsibility but do you ever hear a peep about social responsibility of politicians and civil servants and withdrawing some of the subsidies they get? So who are the rich? Those who travel by planes or air-conditioned trains and those who buy gold have been labeled as rich. It does not specify how many grams of gold. Who is responsible for writing this tosh? The Chief Economic Adviser, Arvind Subramanian, who has a D Phil in Economics from Oxford. Another DPhil from Oxford, Manmohan Singh completely ruined the economy while clinging on to his seat for 10 long years. Fiscal and Current Account Deficits climbed, retail inflation went above 10%, growth plummeted and our credit rating was within a hairbreadth of being downgraded to junk status. So what is the truth? Ten years after spending Rs 4.38 billion, 15 regional airports are yet to see one passenger. Obviously the vast majority cannot afford to fly. So what is the answer? Reduce taxes on air tickets so that they are cheaper. But then those who avail of the cheaper tickets will immediately fall into the rich bracket and you will have the socialists howling for reducing subsidies. So idiotic. Why do people buy gold? Because high retail inflation means that the rupee buys less everyday. There are only 3 ways of hedging against inflation: 1. Change rupees into a basket of currencies, including the dollar, the Swiss franc and the yen, but that will not be allowed by the RBI because if everybody does that the rupee will drop to 100 to the dollar. That will cause cost of imports, especially of oil, to soar and the economy will collapse. 2. Buy real estate. That is impossible for 99% of Indians because the cost of land has sky-rocketed so that the average cost of apartments in Manhattan in New York was a record $1,645 per sq yard, which comes to about Rs 1 million per sq yard, exactly the same as property prices in so-called posh areas of Delhi. Low cost housing is of little use because they will be too small for Indian families and too far from the place of work, increasing commuting costs. Ironically, anyone who has inherited a property has an asset worth millions but may be earning too little to pay income tax. 3. Buy gold. The rich may buy gold bars but for the poor it is ideal hedge against inflation. You can buy 5-10 grams and keep it in a bank locker in case of an emergency. If politicians and civil servants, with huge salaries, pensions and freebies, came out of their air-conditioned palaces they might learn about the real economy. But why should they? 

We know already, why bore us with details?

The annual circus, the Budget, is to be held on 29 February so every self-appointed pundit is giving his opinion on what the Finance Minister should do. But we, the people, already know what it will contain, don't we? Taxes will be raised on services, alcohol and cigarettes, for the hallowed purpose of helping the poor, more cess, which are taxes on taxes, will be added to fund social schemes and more handouts for the rural poor will be announced. It would be a bore except that prices will rise and we will be left poorer at the end. If the revenue raised from taxes is insufficient the government borrows from the market by selling bonds through the Reserve Bank. This adds to the fiscal deficit and the debt to GDP ratio. High fiscal deficit results in high inflation, which hurts the poor, so the FM wants to reduce it to 3.5% of GDP. That will not be easy because 2 failed monsoons have resulted in a fall in rural demand, rise in retail inflation from 3.69% in July to 5.69% in January, and a fall in investment. Our total debt is Rs 65 trillion, which means that the government has to borrow to pay interest on previous debt. So, we are already in a debt trap, which will increase by another few trillions because of the Seventh Pay Commission for civil servants and the One Rank One Pension for the armed forces. If the GDP is growing fast tax collections also increase but although the real GDP grew 7.6% this year, up from 5.1% in 2012, growth of the nominal GDP, which is real GDP plus inflation, has fallen from 13.1% in 2012 to 8.1% this year. That is because the present governor of the RBI has succeeded in bringing down retail inflation from 11.17% in 2012 to 5.69% today. Fall in nominal GDP has raised the debt to GDP ratio from 57% to 67% in 3 years. There are some who want the government to stimulate growth by increasing spending, by ignoring rising deficit. This is precisely what the Congress did, for which we are suffering till today. The government can increase spending only by borrowing more from the market but this is becoming difficult. At a recent auction of treasury bills the RBI rejected all bids because they were demanding yields at 8.63-8.88%, compared to 8.3-8.55% at previous auctions. Ten year bond yields rose from 7.77% to 7.82%. In September the RBI reduced interest rate by a hefty 50 basis points to 6.75% so that banks will charge less when they lend to customers or businesses. But why should banks bother to get less interest at higher risk when they can earn higher interest from sovereign bonds, which are totally risk free? Foreign investors are selling out on Indian bonds because they fear a rating downgrade. No wonder households are less optimistic about the future. Whoever gains, we will be worse off. Just a big yawn.

Who is a greater danger for ordinary people, like us?

On 2 December, 2015 Syed Rizwan Farook and his wife Tashfeen Malik, of Pakistani origin, shot 14 people to death and injured another 22 at a party in San Bernadino in California. The FBI found an iPhone, belonging to Farook, but has been unable to access its data. Normally, they would go on trying passwords until one worked but an encryption software automatically wipes the phone's memory after 10 failed attempts. The FBI wanted Apple to write a backdoor to the phone which will disable this function so that they can access its contents. Apple refused, the FBI went to court and the judge ordered Apple to create such a backdoor. So far Apple has been holding out. The government says that it is asking for Apple to open just one phone whereas Apple says that once the software is created anyone using any Apple product will become vulnerable to hackers. Not much point in having freedom of speech if you cannot speak in confidence, is it? Victims are filing a separate case against Apple because they want to know why this happened. How will it help them if they find that the shooters were religious fanatics or that they hated Americans or that it was revenge for relatives killed in US drone attacks? We understand that they are emotionally upset but this is illogical. What did they learn from the shooting of 20 little children at Sandy Hook Elementary School? Despite repeated shootings a majority of Americans oppose gun controls but because this has been called a 'terrorist incident' they are getting all emotional. Perhaps they should ask the government why it is bent on selling 8 F-16 jets to Pakistan despite this episode. Alright to kill Indians as long as they stay away from the US of A, what? There is only one reason where unlocking the phone might help and that is if there are names or other data which might lead them to a terror cell. The FBI has been trying to link this attack to a terror plot to kill US soldiers in Afghanistan, in 2012. Apple fears that sales of its devices may fall of people are afraid that their personal information maybe hacked and other governments are sure to demand the same assistance from Apple in future, if it gives in to the FBI. For us, who are not Americans, this is deeply disturbing. The US has been spying on leaders of other countries, including those friendly to the US. In an act of air piracy the plane carrying Evo Morales, the President of Bolivia was almost hijacked by European governments, obeying instructions from Washington. Do we want our personal information to be freely available to the Americans so that they can 'rendition' anyone they feel can provide some information on 'waterboarding'? For that matter do we want our government to know our information when the Congress passed the infamous section 66A, which allowed the police to arrest anyone criticising the government, especially since the government has our biometric details on Aadhar cards? We can fight terrorists, we have no defense against governments. They are a greater danger.

Why do politicians hate outsiders, such as Trump and Modi?

CNN is projecting that Donald Trump has won a massive victory in Nevada, with 42% of votes, Marco Rubio coming a distant second with 25% and Ted Cruz trailing in third place with 21.9%,  ahead of super Tuesday on 1 March, so that he carries the momentum to winning the Republican party nomination for the presidential election in November. So, who is The Donald, as he likes to call himself? He is a billionaire who built his fortune from real estate, has been married 3 times, has promised to build a wall to stop illegal immigration from Mexico, says that he will temporarily ban Muslims from entering the US, says that he has not been bought by special interests like other politicians because he is funding his own campaign and says that he will make the US great again. Naturally, liberals, who always talk down to us from the summit of Mount Olympus, say that he " is an ill-informed, inexperienced, bigoted, sexist xenophobe. And he's not a conservative at heart, just a pandering opportunist." So, what about the people who vote for him? Well they are a " Confederacy of dunces " said one newspaper, another saw New Hampshire voters as "...racist sexist xenophobic " and a third felt that the media had been soft on him and not focused on " months of bigoted comments and pathological dishonesty ". Although completely different there are similarities between Trump and our Prime Minister, Narendra Modi. Modi is not a billionaire but, like Trump, is feared because he cannot be bought. Trump is paying for his own campaign and Modi has no children, so no need to amass a fortune for them by any means possible. Trump is accused of creating an atmosphere of paranoia while Modi is reviled as spreading Hindu terrorism through an army of saffron chaddis. Trump promises to " Make America Great Again " while Modi is derided for promising " acche din ", which means " good times ", even as political opponents have disrupted 2 sessions the Rajya Sabha completely so that the economy is not allowed to grow and Modi can be blamed for persisting poverty. The media in the US abuses Trump in vile language in an effort to promote his opponents whereas the media in India is creating social tensions, even rioting, by manufactured stories about minorities and dalits. Trump has promised to build a wall to stop illegal immigration from Mexico while Modi is trying to stop immigration from Bangladesh which is being encouraged by the Congress, to increase its 'vote bank'. Americans are angry because of lack of jobs, immigration, because it is becoming weak and because people despise politicians who have brought Congress to a standstill out of petty self interest. Sound familiar?

Can there be a lower than low caste?

A survey of 1,491 salaried or self-employed people in 11 cities in India shows that half of them are not satisfied about the state of our nation. Compared to 2014, 41% think that the economy will improve next year as opposed to 38% who think that it will get worse. Worries about jobs, corruption and rising prices are common. Another survey showed that 70% of people in Delhi believe that there has been no reduction in corruption under the AAP government. For the first time 58% are worried about the rising population, a rapidly multiplying cancer that is destroying our nation. First it was the Patels in Gujarat who demanded to be classified as low caste. Then it was the turn of the Kapus in Andhra and within the last week there have been violent clashes in the outskirts of Delhi, resulting in 19 deaths, as Jats have been demanding that they be classified as low caste. Why are prosperous farming communities looking to be classed as low caste? Because digital knowledge is changing the world at blinding pace where those who know English and are skilled in computers will earn vast amounts while artificial intelligence and robotics take away traditional jobs in industry. The Land Acquisition Act of 2013 has made it almost impossible for farmers to get out of farming. Reserved seats in higher education will provide a paper certificate which will then lead to a government job, which is permanent, where no one is sacked for incompetence and provides a guaranteed salary with a fat pension on retirement. Worth fighting for. A socialist state provides education to everyone equally. Not so in India. Data from the International Monetary Fund compares India with Ghana, Kenya, Mali, Myanmar, Nepal and Rwanda, whose economies are a fraction of that of ours. On education India spends 3.90% of GDP compared to 8.10% by Ghana. On healthcare we spend 1.30% of GDP while Rwanda spends 6.50%. Why so dismal? Because central government revenue is 20.10% of GDP while Mali raises 22% of GDP in revenues. This leads to high indirect taxes which raise prices, hitting the poor. To get votes politicians resort to large numbers of social schemes so government expenditure is 27.10% of GDP, leading to 7% shortfall in revenues, compared to spending. Naturally, government debt is 63.9% of GDP, which means high interest payments. Low oil prices have reduced subsidy on kerosene by half while increasing excise collection on oil. Weak growth in China has reduced commodity prices, which is good, but dumping of goods by China is hitting our industries. Exports have been falling for 14 months and if interest rate rises in the US the rupee may fall, increasing inflation. There is only one solution. Reduce demand by reducing population. Else, expect everyone to ask for lower caste status.

It will be great but can we bear the pain?

China is our main enemy so if its economy sinks then very good for us. Trouble is that when a Titanic sinks there are a lot of casualties and we will not be immune. As its economy has slowed China is left with a huge overcapacity in steel production, which it is dumping on world markets. Arcelor-Mittal has announced a loss of $7.9 billion for 2015. Tata Steel reported a loss of Rs 21.27 billion in the last quarter, compared to a profit of Rs 1.57 billion during the same period last year. Net sales fell 16%, partly due to increased import of Chinese steel into India and partly due to reduced exports because of dumping of Chinese steel on world markets. In an effort to boost growth the Chinese government decided to increase spending and boost bank lending. But, will it work? Trouble is that China is a command economy and its leaders are used to controlling every aspect of people's lives. The only way to boost growth is by devaluing its currency which will make exports more competitive compared to that of other countries. The yuan was devalued by 3% in August last year and again in January but this led to a collapse in its stock markets. You can have a command economy but you cannot have a command market. The fall in the value of the yuan has led to an outflow of over $1 trillion from the country, known as Smurfing, as the rich try to protect their wealth. The Peoples' Bank wants to let the currency finds its own level against other currencies because China is keen to join the Special Drawing Rights of the IMF, which consist of the dollar, the pound, the euro and the yen, at present. The IMF will hesitate to include the yuan into the SDRs if China institutes currency controls. It could devalue the currency by 25% in one fell swoop and then let find its own level. This would increase exports and investors would buy the yuan because it will be undervalued. But Chinese companies hold $1 trillion of foreign currency debt which will be difficult to service and repay. Just as the fall in the price of crude oil has restricted Saudi Arabia's capacity to fund terrorist organisations all over the world so the fall in foreign currency reserves may restrict China's capacity to buy support for its government's aggressive policies in its neighborhood. One expert thinks that China has no choice but to continue to devalue its currency, thereby exporting its deflation to the rest of the world. Central banks have been reducing interest rates to negative in an effort to reduce the value of their currencies which will increase exports and stimulate growth, but it is not working. Very low interest rates help the rich to buy more assets, leading to asset price bubbles and increasing inequality. The rupee is also falling but the RBI cannot let it fall too much because retail inflation is already high. China's fall is welcome but it will be very painful for us. Too painful?

Do the poor realise how lucky they are?

An article on the Goods and Services Taxes Bill, written by 2 authors, makes a case for the upper limit to be written into the constitution, so that the limit may not be raised according to the whim of the government of the day. The Congress has made it one of three demands before it will support the bill in the Rajya Sabha, where it has a majority, within 15 minutes. Which is a bit rich because it was the Congress which increased the number of services which are taxed, by coming out with a negative list in 2012, which means that every service not mentioned on the list is taxed, including rent and fees for in-hospital treatment. The government is resisting being tied down to an upper limit because politicians want to be able to increase handouts to win elections. It is very difficult to increase direct taxes, which is paid by around 3% of people, so the government depends on indirect taxes, comprised of excise, customs duty, VAT, service tax and so on. " Taxes are collected in two categories - direct taxes (tax on income and wealth) and indirect taxes ( tax on products and services)," write the authors. " Direct taxes typically impact the wealthy elite and the earning middle class. Indirect taxes are by standard convention, regressive in nature and their marginal impact is much greater on the poor than the rich. India collects twice as much in indirect taxes than direct taxes. India's direct-indirect tax ratio is 35:65. This is sharp contrast to most OECD nations where this ratio is either equal or higher i.e. more biased towards direct taxes. In other words, India's tax structure is sharply skewed towards placing a greater relative burden on the poor." India's tax to GDP ratio went from 6% in 1950 to 17% in 1990 but has stayed at the same level from 1990 to 2014 when per capita GDP increased 5 fold. It maybe because most of the increase was in the services sector which now contributes 52% to the GDP but is mainly is construction, hospitality and retail sectors where wages are low. Indirect taxes hurt the poor by increasing the cost of goods and services, making them too expensive so that the poor have to settle for a lesser quality of life. Total tax on a new car in Delhi ranges from 25-48%. Taxes on air fares constitute 50% of the price of the ticket. The tax component remains the same even when an airline reduces ticket prices so poor people cannot afford to fly. Politicians do not feel the pain because they get most services free, at taxpayer expense. The authors argue that indirect taxes increase inequality so there is a case for a fixed upper limit to impose some discipline on politicians. Everyone fighting for the poor. Do they realise how lucky they are?

Easy to spend borrowed money.

Ever since the present government came in it has been battling Non Performing Assets, or NPAs, which is the jargon for bad loans in banks, left behind by the Congress. Companies were unable to service their loans because of falling growth in the economy, which reduced profits, and because huge loans were dished out to friends of politicians, as a part of crony capitalism. Publicly traded banks have added Rs 1 trillion in bad loans. Aggregate net profits of 39 listed banks have dropped from Rs 168 billion to Rs 3 billion and 24 public sector banks have reported aggregate net loss of Rs 109 billion in the December quarter, compared to last year. A few days back the Supreme Court, in response to a Public Interest Litigation, asked the Reserve Bank to provide a list of every company which has defaulted on loans greater than Rs 5 billion, in a sealed envelope. The Governor of the RBI has said publicly that ostentatious celebration of birthdays is shameful while defaulting on bank loans. In 2013, Pramod Mittal spent 60 million Euros, or Rs 5.05 billion, on his daughter's wedding in Barcelona while his company owed billions of rupees to banks in India. The RBI resists disclosing names of defaulters, maybe because it fears that investors will dump their stocks and, since a lot of these companies have borrowed against their shares, banks will be left with lots of worthless paper. Seems that the Supreme Court is not buying that argument and thinks that banks are owned by the public, in the form of shareholders or depositors, so there should be greater transparency. However, it is not clear how this knowledge will help because the crooks are protected under present laws. Under limited liability laws their own losses are limited to their shares which are worthless anyway and the value of the factory and land owned by the company are a fraction of the amount owed to the bank. While ordinary people have to provide collateral to get loans bankers bend over to provide billions in loans to the wealthy without any personal guarantees. An incensed restaurant owner in Paris has put up a sign saying that dogs will be allowed into his restaurant but bankers will have to pay 70,000 Euros to enter, after having been repeatedly refused loans to open a second branch. Politicians force public sector banks to lend to the agricultural sector as part of vote-bank politics. While total loans to the agricultural sector has risen to Rs 7.5 trillion its share of the GDP has fallen to 13.94%. Bankers do not understand cost effectiveness of projects and then there is outright cheating, known as 'suitcase banking'. There is too much stink. The RBI is trying to contain it.

How to increase poverty by decreasing it.

Venezuela has just increased the price of premium grade petrol for the first time in 20 years, from $0.01 (Rs 0.68) to $0.60 (Rs 41), a jump of 6000%. Why? Because with falling oil prices the government has no money for imports. According to the central bank inflation rate last year was 180.9% and the economy contracted by 5.7%. Some say that inflation rate could reach as high as 720% this year. There is a shortage of everything. People are forced to queue overnight to buy food. People roam around with bags of cash in the hope of something to buy. Policemen with loaded pistols restrict the number of people who can enter shops. The government blames hoarding by members of the opposition for the shortages. The official conversion rate is 6.35 Venezuelan Bolivar for 1 US dollar, but in the black market the rate is over 1000 Bolivars to one dollar. The number of people living in poverty has soared to over 70% and the number in extreme poverty to over 45%. The official murder rate has risen to 62 per 100,000 population but many probably go unreported. The government restricts the media from reporting the bad news. Yet, it was so different just 3 years back when Hugo Chavez died in March 2013 after 14 years in power. GDP per capita had increased from $4,105 to $10,810. Consequently, extreme poverty had decreased from 23.4% to 8.5%. Oil revenue had increased from $14.4 to $60 billion but inflation rate was high at 31.6% and murder rate was at 45.1 per 100,000. Unemployment had dropped from 14.9% to 7.6% and infant mortality from 20 to 13 per 1,000 live births. How did Chavez accomplish such a miracle? By vigorous pursuit of socialist policies including food, education, housing and healthcare subsidies for the poor, paid for by sale of oil. Some policies, such as communal banks and workers' cooperatives, were frankly communist. Oil and food industries were nationalised and foreigners blamed for every ill. With key industries and social schemes in the hands of cronies corruption boomed. Oil, a national asset, was sold cheaply to neighboring countries in an effort to build a socialist rampart against the capitalist US. Chavez timed his death to perfection. During his life oil stayed at over $100 a barrel but since September 2014 it has dropped sharply until it is around $32 per barrel today. Along with the collapse in the price oil output has dropped from 3.3 million barrels per day to 2.7 million barrels, leading to a fiscal deficit of 24% this year. The tragedy is that Venezuela has the largest oil reserves in the world with a population of just 29 million, barely more than that of Mumbai. Why is all this important? Because India has innumerable social schemes for the poor with falling industrial output and rising retail inflation. Those who are howling for a rise in spending and fiscal deficit would do well to talk to a few Venezuelans.

Why kick our dead soldiers?

Isn't it absolutely bemusing how a completely fabricated confrontation between the government and the opposition is created before each session of the parliament, with active support of a howling media, so that all work will be disrupted by slogan shouting opposition members and bills, vital for the economy and welfare of the people, like the GST bill, will remain in limbo. But this time it is totally incomprehensible. Students in various universities are raising slogan against the hanging of Afzal Guru, who was responsible for the attack on our parliament in 2001. When was he hanged? In February 2013. Who was in government then? The Congress. One Kanhaiya Kumar from JNU has been charged with sedition after calling for the 'barbaadi' or 'destruction' of India. Immediately 455 'academics' from US universities have condemned the arrest and called for freedom of speech. Amazing that they are not protesting about the death sentence on Dzhokhar Tsarnaev, blamed for the Boston Marathon bombing which killed 3 people. These stalwarts of free speech dd not call for the destruction of the US when Obama coolly murdered 16 year old Abdulrahman Awlaki and his 17 year old cousin with a drone strike. Of course, foreign loudmouths are nothing compared to Indian imbeciles who think that mindlessly repeating western propaganda makes them intellectual. Like this woman who writes," Kanhaiya Kumar's words are the kind that keep India meaningful. He voiced a productive patriotism, which insists on holding the Constitution to its promise for every last citizen." Perhaps, we could take her seriously if she had met the daughters left behind by Constable Kamlesh Kumari Yadav who died during the attack organised by the same Afzal Guru. Or the families of the 6 Delhi Police and 2 Parliament Security Service personnel, along with a gardener, who died in that attack, protecting the same scum who are sympathising with the JNU rabble today. Just one week back 10 soldiers were buried in an avalanche on Siachin Glacier, 9 died instantly while one died later in hospital. What were they doing in that God forsaken place? They were guarding our nation from attacks by Pakistan. In January there was an attack on an airbase in Pathankot, resulting in the death of 6 soldiers. Why did they sacrifice their lives in defending India? Because they loved their country, which surely makes them patriotic and nationalistic. What an insult to all these heroes when patriots are derided by those they were protecting and nationalism is a word of abuse. Journalists should be reporting the truth instead of repeating words of their political masters. No wonder anger boiled over in Patiala Court. Violence is unacceptable, whether physical or through lies.

How can you enforce an order against double immunity?

What a pickle! Justice CS Kernan of the Madras High Court has been transferred to Calcutta High Court by an order of the Supreme Court on 12 February. In response Justice Kernan has stayed the SC order and asked the Chief Justice of the Supreme Court to submit a written reply through his subordinates by 29 April, to explain himself. He said that he was being targeted because he is a dalit, which means 'oppressed', a term used to refer to lower castes among Hindus. " I will direct the Chennai Commissioner of Police to register cases against the two apex court judges under SC/ST (Prevention of Atrocities Act)" he said. " I am in no way subordinate to the Supreme Court. Mine is a separate constitutional office. How can the apex court interfere in my office that too without even hearing my version?" he asked. Justice Kernan's problems go back a few years when the then Chief Justice of the High Court complained that he had barged into his room and hurled a " volley of invectives " at him. This case pits the draconian Prevention of Atrocities Act (on dalits) against the absolute power of judges, who are answerable to no one. At present judges are appointed by a Collegium system, in which a panel of judges meet in secret to select who they want to appoint. The parliament passed a National Judicial Appointments Commission Act but the Supreme Court struck it down, which sets a self-appointed Supreme Court above the elected representatives of the people. Judges cannot be prosecuted for any crime but can only by removed from office by parliament, with at least two-thirds majority. In India Contempt of Court is the greatest crime as shown by the case of Subroto Roy who will be in jail indefinitely unless he provides a bail of Rs 100 billion. The Court told him " you are in jail by choice " while a convicted murderer, serving a life sentence, gets out on furlough, to get married. Furlough is normally granted to soldiers who risk their lives for the nation. Does it make our soldiers guilty of nationalism? However, like the judges dalits are also extremely powerful. There are serious charges of corruption against the former Chief Justice of the Supreme Court, KG Balakrishnan who steadfastly refuses to resign from his sinecure of Chairman of the National Human Rights Commission. No one dares to file charges against him. Dalit students who fail exams bring charges of bias against the faculty resulting in great harassment. The only way dalits can be truly empowered is by banning castes, like dowry and sex selection have been banned. That will open all temples to every Hindu and all controversies will disappear. Children being born today will grow up truly equal. Will anyone agree?

Could a sudden death decide the next president?

In the US the people get to choose who their party's candidate is going to be for the presidential election, to be held in November. So, in effect they get to choose twice - first a candidate for each of the 2 parties and then the president out of the two. States hold primaries to decide who they want as their candidate and each primary is preceded by a debate. South Carolina is to hold its primary on 20 February for the Republicans and on 27 February for the Democrats. Two contenders, Chris Christie and Carly Fiorina dropped out of the Republican race after the New Hampshire primary, leaving 6 still standing. A majority of viewers thought that Marco Rubio won the debate in SC, With Donald Trump coming second and Ted Cruz third. The Republican establishment would prefer Rubio to be their candidate so they are frustrated that even though Trump was attacked hard during the debate his popularity remains undiminished. Trump is a clear favorite for the SC primary with polls projecting 35-42% of votes, with Ted Cruz coming second. Why are Trump and Cruz giving heebie jeebies to the Republican Party? Because they feel that if either of them goes on to become the candidate then Republicans will lose down-ballot races. Down-ballot races mean, elections for the entire 435 seats for the House of Representatives, 34 seats in the Senate and governors in 12 states. The liberal media is gloating that Jeb Bush, brother of the previous President, George W, is way down in the polls. They see George W as " arrogant, dishonest and not very bright ". " He was infuriating because his life was a string of undeserved wins, from college admissions to presidential elections," they say. As for Trump, they label him as " ill-informed, inexperienced, bigoted, sexist xenophobe ". Therein lies the problem. They seem to have an utter contempt for the voters, and, hence, for the democratic process. On the Democrat side Hillary Clinton got thumped by Bernie Sanders in New Hampshire after scraping through in Iowa on the toss of a coin. Her biggest problem is that she is tainted by the gasbag, Obama. She was the Secretary of State during his first term, which means that she cannot distance herself from the mess he has created all over the world, to win elections. But Obama could still have a great effect on the election if he so chooses. Antonin Scalia, a conservative judge of the Supreme Court died suddenly. The US Supreme Court has 9 judges, of whom Breyer, Ginsberg, Sotomayor and Kagan are seen as liberals, Alito, Thomas and Roberts are conservatives and Kennedy is in the middle. Obama can alter the balance by picking a liberal to replace Scalia . Republicans have sworn not to confirm anyone that Obama picks as replacement, which could set up a huge fight if Obama so chooses, forcing undecided voters to take sides. A sudden death to decide  the next president. Very interesting indeed.

'Idiot' tattooed on their foreheads.

A bunch of countries involved in the destruction of Syria agreed a 'cessation of hostilities', to start in one week, so that aid maybe delivered to suffering civilians. This gives one week to the various combatants to intensify the conflict to try and capture as much territory as they can to create a new reality on the ground. The deal does not call for cessation of attacks against ISIS or the Al Nusra front and so attacks will continue. Some see it as a licence for the Syrian government and Russia to continue with their attacks. Bashar Al-Assad has already said that he intends to reunite the whole of Syria, as long as it takes. This agreement was forced by the desperation in Europe over the refugee crisis. Initially European leaders tried to be high-minded and open their borders to migrants but this encouraged people from North Africa, Pakistan and Bangladesh to join the refugees in the hope of getting into Europe. Angela Merkel is deeply unpopular after taking in over one million migrants, with no sign of any easing of the flow. King Abdullah has warned that his country can take no more and if other countries do not help " the dam is going to burst ". Over a 100,000 are massed at the Syria-Turkish border. The complete confusion and bemusement of western governments maybe gauged from their decision to send NATO warships to patrol the Aegean Sea, ostensibly to stop people smugglers. If they see a boat full of migrants with little children what are they going to do? Fire on those boats and sink the lot? Smugglers will abandon ship if they spot a NATO warship which will have to save the migrants and end up as a rescue ship. In any case the vast majority of migrants are crossing the Aegean by inflatables. The smugglers are sitting in offices in Turkey, out of reach of NATO. Turkey is playing a very complex game. It has a promise of $3.4 billion in aid to stop the flow of migrants and easy travel for its own citizens into Europe. Germany already has near 3 million Turks. Will Germans be happier with a million more Turks, instead of Syrians? We wonder. Turkey has refused to let in more refugees unless it gets more money. " We do not have the word 'idiot' written on our foreheads," said President Erdogan of Turkey. No, but you can be too clever. Turkey has been shelling Kurdish militia north of Aleppo, near its border. Kurds are the only 'boots on the ground' fighting ISIS directly. The US has urged Turkey to stop the shelling. Turkey is unable to use planes over Syria as Russia has established a virtual no-fly zone by deploying S-400 missiles. Seeing their clever plans falling apart Saudi Arabia and Turkey have talked about sending in ground troops into Syria. Iran has laughed at the proposal. Turkey wants to drag NATO into a war with Russia, Saudis want to destroy Iran, Kurds want to establish an enclave in the north of Syria, Turkey hates the Kurds, Assad wants absolute power and Russia is warning of a new 'cold war'. Meanwhile the US is to supply F-16s to Pakistan. They were all born with 'idiot' tattooed on their foreheads.

Aren't we proud to have the most qualified beggars in the world?

Delhi Police have arrested a man who was cheating people with promises of getting their children admitted into medical schools. He was charging Rs 1.5 million to Rs 6 million with fake admission forms and letters of admission printed on forged letterheads. Why would people pay so much money as bribes to get admission for their children? It makes economic sense because admission into a private medical school could cost up to Rs 10 million as capitation fees, like donations, and then high tuition fees for over 4 years. More than half the seats in government medical schools are reserved for various categories under caste and for largesse by politicians and civil servants. Last year out of a total of 600 seats in Delhi 246 were in the general category, which means on pure merit, leaving 354 for those with lower marks in qualifying exams. 82 seats were reserved for largesse. With opportunities severely restricted by an accident of birth parents of children relying solely on merit resort to anything to get admission for higher studies. This imposes enormous pressure on teenagers, who are having to cope with the psychological challenges of growing from children to adults. Those who cannot bear it take their own lives. Last year a similar scam, known as the Vyapam scam, rocked the state of Madhya Pradesh. Apparently, 44 people, connected in some way with the scam were found dead, some under mysterious circumstances. It means that the majority of students in medical schools are sub-standard, the majority because of reservations and some because their parents have the money to buy seats. But this is not all. Anyone in India can write Dr in front of his name and a huge number of totally unqualified people do. Anyone with a degree, in physiotherapy, pharmacy, ayurved or chiropody can call himself a doctor and prescribe powerful drugs. Unscrupulous people with large amounts of black money have set up institutes offering degrees. There is no teaching, prompting 3 girls to commit suicide in Tamil Nadu recently. Since there is no teaching students know nothing and demand the right to cheat during exams. Naturally, since they have paid a lot of money for a piece of paper, not knowledge. No wonder politicians and civil servants have given themselves the right to go abroad for treatment, with taxpayer money. With companion. But, medicine is not alone. Over 80% of engineering graduates are unfit for employment, which means duffers. In Agra, 12,000 appeared for the B Ed exam, to qualify for teaching in schools, and 20,000 passed. But no need to despair. A full 78,000, that is 21%, of our country's beggars have passed Class 12. Perhaps we should consult a beggar next time we are ill.

It does not take much intelligence to stampede, does it?

Stock markets are falling all over the world, wiping billions off market capitalization of companies. Central banks have been pouring money into banks, hoping to restart growth by forcing them to lend. When that did not work they cut interest rates to negative, which has made investors suspicious that they are hiding bad news. Analysts are trying to make sense of markets collapsing all round the world. It is China, or maybe the middle east, or the refugees pouring into Europe, or North Korea, or the falling price of crude, predicting a fall in global growth, or maybe it is the banks. Bankers have fiercely resisted any reforms of their practice of playing with depositors' money, so as to increase their profits and consequently their bonuses. Deutsche Bank has declared an eye-watering loss of 5.3 billion pounds leading to a sharp sell-off in banking stocks. They have been playing with Credit Default Swaps which started the rout in 2008. So jittery are the markets that oil price jumped 12.3% yesterday in the hope of a cut in output by the OPEC. Investors are dumping stocks and taking refuge in the safety of sovereign bonds which is driving yields into negative. Why do investors get surprised by the unexpected? It is because we have an imperfect understanding of the world around us which suffices as long things are normal but can find no explanation when they become different. However, one man has been consistently warning about the dangers of asset price bubbles due to the enormous liquidity central banks were pouring into the system. " However, Quantitative Easing and low interest rates do not generate new sources of growth, but simply borrow growth from the future, along with the costs that come with it - misallocation of credit, asset price bubbles and inequality, to name only a few," he wrote on 24 November. "....financial markets, far from disciplining errant policymakers as free-market ideologues would have us believe, merely allowed itself to be inebriated by the exuberance and hubris of central bankers," on 15 December. In other words, dodgy deals. " Investors are confused. They have no right to be. They ought to be concerned. But they are not," on 29 December. And after markets started falling he wrote on 2 February," Corporate executives have engaged in financial engineering to boost stock prices so that their compensation rises. Stock prices have become untethered from fundamentals. Bubbles have to burst and they do so of their own accord." Has India done any better? Pundits were prodding us to invest in shares, predicting a level of 30,000 for the Sensex. Today they are talking of sinking to 15,000. Pundits should read before lecturing us. But then they would not be pundits,would they?

Imprison 11% to get votes from the rest. Very cost effective.

Like a recurring nightmare car rationing, known as the odd-even scheme, will again be imposed on us by the Chief Minister from 15 April, for 15 days. The complete lack of any logic in putting us under house arrest for over seven days, when we will not be able to drive for fear of fines of Rs 2000, is mind boggling. If it is to reduce pollution it should be permanent. What is the point in inconveniencing us for 15 days when the experiment in January did not decrease pollution at all. Apparently surveys conducted by Delhi government has shown that 78% of people want the scheme back, which is being touted as overwhelming support. Is it? Only 10.79% of people in Delhi drive to work in a car, jeep or van. Which means: 1. That 89% of people do not own cars and 2. At least 89% should have supported the scheme. As for 92% saying that they will not buy a second car it merely means that some people either cannot afford to run a second car, or that they use an alternative means of transport, such as a motorbike, which is not banned. However, politicians, especially those with fascist tendencies, are not restricted by facts. Such form of car rationing has been tried in other cities with varied success. It failed miserably in Mexico city and Bogota, both poor countries like India. It succeeded in Paris because it was for only one day and Paris has about one-tenth the number of cars as Delhi. It worked in Beijing because the people are terrified of the government, like we are of this fascist one, because only 20% of vehicles are restricted because and the government gave cash incentives to the people. But if it was so successful why did the Chinese government issue a red alert in December, advising people to avoid outdoor activities? Pollution is blamed for respiratory illnesses in Delhi. If so how do they explain rising incidence of asthma in the US, especially among children? Surely, pollution maybe one factor but allergy is also a very big factor. Alarmed by the rising incidence of allergic and autoimmune diseases enormous research has been carried out in the west and one hypothesis has blamed excessive cleanliness for these conditions. What do studies in India show? Pollution is not being caused by cars and trucks but by brick kilns around Delhi, by wood smoke and by power plants. The study also suggests that Delhi may actually have half the number of cars than thought because registration numbers are not scrapped when cars are trashed.  But fascists are not bothered with facts. The Chief Minister is no fool. He is prepared to torture 11% of the population that own cars to get brownie points from the remaining 89%, which may translate to votes. Surely, journalists should be campaigning against this barbaric imposition? They only recycle the what western people say, as when the wife of a New York Times journalist was crying her eyes out because her son was getting asthma in Delhi. Aw! Let us hope that her son does not get shot in the great US of A, or worse, carry a gun to school, as is common there. Western contempt and a fascist chief minister. Great.

What has the US has that we don't? Dollars.

The government is worried about Indian exports which have been falling for 13 months. In December exports fell by 14.75% to $22.3 billion while imports fell by 3.9% to $33.9 billion, giving a trade deficit of $11.7 billion. Since anything we buy from other countries have to be paid for in dollars it means that we have to earn in dollars from other countries, through exports. The shortfall is made up by remittances sent by people of Indian origin living overseas and by money invested in India by Foreign Institutional Investors, or FIIs. FIIs invested a total of $89.5 billion in 2014-15, of which $57.2 billion was in debt and $32.3 billion was in shares. FII investment is welcome but dangerous because it can flee suddenly, causing a collapse in the value of the currency, as it did in the East Asian crisis of 1998. " The two major reasons behind declining exports are - falling crude prices and the Indian rupee, which has not depreciated as much as other currencies have. This has made exports from India less competitive," said an Additional Secretary at the Commerce Ministry." A fundamental magic fix to the falling exports is to devalue your currency, which traditionally economies have done in the past, Japan did it, China is doing it, Korea has done it." Exactly. So why is the RBI not allowing the rupee to depreciate like all other countries, including the EU? Because all these countries have very low inflation rates, while our retail inflation is at 5.61%. If the rupee falls prices of imports, especially fuel, will jump and add to inflation. If inflation goes up the RBI will have to increase interest rate, instead of reducing it as other countries have done, and this will hurt the construction industry, which provides employment to 35 million people and is the third highest in Asia in terms of spending. Politicians and civil servants have most of their black money in real estate so they do not want prices to fall. Apart from commodities, such as iron ore, textiles and gems and jewellery India exports automobiles, capital goods and pharmaceuticals. Instead of concentrating on the US and Europe we should be trading with Africa which is straight across the Indian Ocean and, round the tip of South Africa, straight across the Atlantic with South America. Perhaps the most important requirement for robust exports is to maintain the highest quality at the lowest possible price. That needs very hard work and low taxes. The government cannot lower taxes because it has to finance hundreds of handouts and still keep the fiscal deficit under control. India has 1.3 billion people so our manufacturers have a huge market to sell whatever shoddy products they make, proudly named as 'jugaad'. 40% of all generic drugs sold in the US have been made in India yet the FDA in the US has to write warning letters to our companies to maintain standards. The US had a trade deficit of $531.5 billion in 2015. But the US can print dollars and we cannot. Therein lies the difference.

Wealth is not income, so one can be wealthy without paying income tax.

Our liberal, socialist, secular brigade takes every chance to loudly condemn inequality in India. The top 10% holds 370 times the wealth of the poorest 10%. The top 1% holds 53% of the total wealth of the nation, the top 10% owns 76.3% and, conversely, the bottom 90% owns less than 25% of the country's wealth. We all agree that the figures are shameful. But, how do we improve the situation? India has been following socialist policies of reservations in education and government jobs and handouts under various schemes for 67 years and yet inequality is increasing. Inequality took off in 2000 and increased in a straight line under Congress rule till 2008 when the global economic crisis forced the government to stop throwing money around like confetti. Thomas Piketty is right when he says that too few people in India pay income tax. If 10% of people hold 73% of the country's wealth then 10% of 1.30 billion, that is 130 million people, should be paying income tax. But, in actuality only about 3% file income tax returns. There will certainly be some tax evasion but a lot of the blather is just mindless repetition. Most of the so called wealth of the top 10% is most certainly in real estate. The price of any 2 bedroom apartment in Delhi will not be less than Rs 10 million but the person living in it may have inherited it from his father and makes a living from a small grocery shop. So he is a millionaire, paying municipal taxes, but does not earn enough to pay income tax. Farmers are exempt from paying income tax, no matter how rich they are, and get free electricity in many states. This has not only made supply companies bankrupt and saddled state governments with trillions of rupees in debt but it is disastrous for the environment, as farmers deplete ground water by excessive use of water pumps. A study in the US suggests that inequality in that country may not be as severe as people think. People only look at income disparity when lifetime earnings are more important. For example, a retired person with a small income from savings is richer than a newly qualified graduate from IIT, with a student loan, but over the long term there is no comparison. Government schemes, such as MGNREGA, Right to Education and Right to Food, should also part of the calculation. Sadly the self-styled intellectuals in India just repeat what foreigners say and do not research what is actually the situation here. Meanwhile, the government is carrying on with myriad social schemes which may result in increasing fiscal deficit. As the government borrows more from the market bond yields will rise which will put a floor under interest paid by companies. After all, if banks can earn over 8% from sovereign bonds, which are totally safe, they will charge a hefty premium when lending to companies. Will the socialists stop their shrieks? Not a chance.

Is the world headed towards Monopoly money?

The abnormal is becoming the new normal for the global economy, writes a professor. Growth rate is falling because of high debt, which have to be paid, called deleveraging, before new investment can begin. Central banks are distributing money through unconventional means, such as negative deposit rates, quantitative easing, zero interest rate policy and unsterilized forex intervention. But none of that is working because banks are hoarding cash. All this loose money should result in the fall in the value of currencies and cause inflation. Instead, commodity prices have fallen and there is fear of deflation. Currencies are mere pieces of paper, since Richard Nixon abandoned the gold standard in 1971. The Rs 1000 note says that the Reserve Bank promises to pay Rs 1000, but does not say in what form. The value of currencies are their exchange rates against each other and thus prone to manipulation by central banks. It is possible therefore that this paper edifice may collapse in synchrony, resulting in hyperinflation across the world, leading to global famine. Because of high unemployment workers are unable to negotiate for higher wages. If wages are stagnant or falling how are people paying so much for watching Premier League football in England? Even the great 'vampire squid from hell' of financial companies, Goldman Sachs admits that it may have to take another look at how capitalism works. Profit margins of companies are high by historical standards. This is attributed to mergers and acquisitions, share buy backs and the use of new technology to cut costs by reducing the workforce. High margins should encourage new companies in the same market segment which would increase competition and reduce profits. So, if margins remain high something very abnormal is going on. So much loose money has created a boom in asset prices. The total value of developed real estate in the world has reached $217 trillion, which is 2.7 times the global GDP and is 60% of mainstream global assets, 21% being in North America. $162 trillion is in residential properties owned by 2.5 billion households. In comparison the total value of all the gold ever mined on earth is a mere $6 trillion. The other asset class that has benefited from free money are shares. Stock prices rose to dizzying heights even as central bank monetary policies indicated poor prospects for growth. Stock prices have taken a hammering since the beginning of the year, which is being blamed on a 25 basis points rise in interest rate in the US. So what are central banks going to do to stimulate growth? It seems that it is going to be more of the same. What is the RBI going to do? What can it do? Our retail inflation is already at 5.61% so a weak rupee will only increase it. Instead of reducing rates the RBI may have to increase it. Expect loud howls of anguish.

In a democracy wishing is of no value.

The Director General of the Confederation of Indian Industry presents a wishlist for this year's budget. The Congress could easily put an end to this annual circus by passing the Goods and Services Tax bill which will fix rates of indirect taxes and assist companies to invest in new projects, knowing what their future liabilities will be. This will set an upper limit on expenditure, helping to keep fiscal deficit under control. Politicians do not like their powers on spending to be curtailed. How else will they throw wads of currency in handouts to win votes? One easy and quick way to reduce expenditure is to use Aadhar numbers to pay salaries of central and state government and municipal employees, to cut out fraud in the form of 'ghost employees', and stop blatant theft of taxpayer money, as in laborers being paid Rs 450,000 per month by the Food Corporation of India. So what do our industrialists wish for? Increase consumer confidence by increased public spending. Consumer confidence can only increase if the burden of taxes is reduced and the spectre of inflation disappears. If prices continue to rise the purchasing power of the rupee will fall and so it will keep depreciating against the dollar. Taking the movement of currencies over the last 40 years an investment banker has calculated that anyone starting a job today will see a 5,000% drop in the value of the rupee so that it will cost Rs 150,000 just to fill a car with petrol. He recommends investing in gold to hedge against inflation and that is precisely what Indians are doing, with a jump in gold imports of 179% in December. The balance sheets of public sector banks need to be cleaned so that they can start lending again. All bad loans maybe transferred to a National Asset Management Company, a 'bad bank', which will be empowered to sell off assets of willful defaulters to pay off creditors. Some members of CII will be most upset if this actually comes to pass. Public-Private Partnership has been proven to be useless, as companies delay projects, constantly ask for higher toll and taxes and do not carry out proper maintenance. Low cost housing is a fantasy with land prices in Delhi and Mumbai the same as in Manhattan in New York. Poor people generally have larger families so a tiny flat will be inadequate and, if the project is far away to keep costs down, commuting costs will be prohibitive. There is much celebration of the demographic dividend in India. An aging population in Japan means that there are fewer young people paying taxes to provide old age care. But exactly the same is happening in India, only upside down. Less than 3% of Indians pay income tax and these people have very few children, whereas the poor have many children who are kept alive with massive subsidies. Perhaps, it will be better to wish on a shooting star.