Tax the poor to help the poor, a difficult balance.

Like any company sets targets on sales people the government sets targets on the tax department to arm-twist as much money as it can out of hapless citizens. Unfortunately, vast majority of citizens are too poor to pay income tax so last year there was a shortfall of Rs 300-350 billion in revenue collection, which upset the Revenue Secretary. Unless we pay up the humongous pay rises of civil servants, as recommended by the Seventh Pay Commission, will raise fiscal deficit, which will give the opposition a chance to criticise the government. Not good. So our income tax fellows came to an arrangement with the State Bank of India, which has assets in excess of Rs 20 trillion, which paid Rs 100 billion on 30 March, 2016. On 1 April, the first day of the new financial year, the tax department refunded Rs 95 billion to SBI. In total tax fellows refunded Rs 250 billion in the first week of April. Two tax officers were transferred for this sleight of hand, causing resentment among tax fellows. The Indian Revenue Service Officers Association has passed a resolution accusing the revenue department of going beyond its mandate. They have a point. The tax department paid back Rs 1.22 trillion in 21 million refunds last year. Why? Because the government collects excess of taxes to meet its expenses, in what is known as TDS, or tax deduction at source. Last year indirect taxes, which comprise taxes on goods and services, raised Rs 7.12 trillion out of a total of Rs 14.54 trillion. This means that direct taxes, comprising of income tax, corporate tax, wealth and capital gains taxes raised Rs 7.42 trillion. About 4% of Indians file income tax returns and only about 1% actually pay taxes. In 2001, direct taxes contributed 36.31% of total taxes, rising to 37.7% in 2013, while in the US the share of direct taxes was 75.8% of the total. Rates of indirect taxes were raised in 2012 as well as the number of services that were to be taxed and this government has increased rates from 12.5% to 15%. Despite this, or maybe because of higher rates, the share of indirect taxes has fallen and the share of direct taxes has increased to 51% of total taxes. Various governments have tried to unify all indirect taxes under a Goods and Services Tax regime but this has been opposed by states who see a loss of powers to raise revenue. High rates of indirect taxes are seen as regressive because even those who are too poor to pay income tax are compelled to pay taxes on goods and services. Many countries already operate some form of GST but India is more complicated than most countries because we have a plethora of political parties who compete to win elections by promising ever increasing handouts, 'to help the poor'. Which means they are hungry for more taxes. If there is a cap on GST it may impose discipline on politicians. We live in hope.

If we can't build sewers, how will we build towers?

After 2 years of drought the monsoons are back. All Indians should be delighted as the rains clean the air of pollution, the land turns green with new grass and reservoirs fill up, so that there will be no need to transport drinking water by trains. Sadly, there can be no joy for us, because our government rules us instead of serving us. Couple of days back people were stuck in traffic for up to 6 hours in Gurgaon after a rain shower. India is a tropical country and cloudbursts are not uncommon so drains should be built to cope with heavy rains. How difficult is it to build proper drains? Between 1859 and 1868 Joseph Bazalgette built 82 miles of sewers in London at a cost of 4.2 million pounds. If that is bad, then Paris built its first sewer in 1370 and even has its own museum for sewers. Which means that building an effective sewer system should be child's play, right? All we have to do is copy what others have done. If we have any doubts just invite foreigners to build it for us. Of course, they will charge but they will complete the project on time, the sewers will last for at least 100 years and by ensuring smooth flow of traffic will save a fortune in wasted petrol and productivity. But this will not happen. Why? Because the project will take a few years and so will not help in winning the next election, and there is a lot of money to be made from illegal construction which block water outflow. Anyway, the monsoon lasts for a couple of months only, there may not be a cloudburst and people forget quickly, so who cares if people, especially women, are stuck for hours with no bathroom in sight or if thousands die, as happened in Kedarnath in 2013. There should be no lack of knowledge. The government has spent Rs 2.5 billion of taxpayer money on training civil servants in foreign lands. To learn what? We should have the right to examine these fellows on what they have learnt, apart from enjoying themselves that is. It is not wholly their fault. Politicians want civil servants to be grateful and suppliant and not get uppity. They do not want someone with an independent opinion, like Reserve Bank Governor, Raghuram Rajan who said that the economic growth was like that of a "one-eyed king in the land of the blind", when politicians were bragging about 7.56% of growth of the economy. Recently, former Governor, Subbarao has written a book detailing how Congress fellows put him under enormous pressure to reduce interest rates even though inflation was soaring. Now this government forced Rajan to resign by its nasty behavior because he has not reduced rates by as much as politicians demanded. They never learn do they? Congress fellows were bragging in Davos about growth rates of over 9% before the economy sank. Rajan is not a civil servant so he refuses to toe the line. Politicians and civil servants, waterlogged streets and sinking economy.

They have power, just show them how.

Activist called Bezwada Wilson has been awarded the Ramon Magsaysay Award along with a singer, TM Krishna. Bezwada Wilson has been working to eradicate manual scavenging, which is cleaning faeces from homes and railways. Seems that some homes still continue to use a commode system for evacuating bladder and bowel which are then cleaned by these scavengers. It is disgusting and degrading work and must be eliminated but, as with any other human activity, it is not so simple. Firstly, those who are doing this work have to be found new avenues of earning a living otherwise they will starve and secondly, those who are still using this system need to upgrade their toilet facilities. Which means connecting them to sewers or building septic tanks. Sewers can only be built by municipalities or state governments and miles of sewers to connect every village will be enormously expensive and the sewage thus collected has to be disposed of in a safe manner. Individual septic tanks are cheaper but even so households may not be able or willing to bear the necessary cost and there is a danger of contaminating the water table. Unfortunately, the best intentions in India become a reason for bashing Hindus. Apparently it is the fault of upper castes and they should be punished for it. No one is forcing these people to do this work and they should just stop doing it, forcing people to upgrade their bathrooms or go out to the fields. Dalits are not powerless as they have shown in Gujarat by refusing to remove carcasses of dead cows, after some were assaulted. Faeces is undigested food and every creature that eats, animals, birds, fish and insects, has to get rid of that waste so that it is able to eat again. Even unconscious patients, who are not eating by mouth, pass faeces, consisting of dead bacteria, which reside in the gut. In foreign countries, nurses, who are well paid and respected, clean patients and are not considered to be slaves. Women who work as scavengers are probably illiterate, so will not be able to work as nurses, but could be trained as nursing assistants, to clean patients, do dressings and chaperone male doctors, when nurses are busy. Trouble is that they will have to leave their villages and go to towns where hospitals are located. That is where Mr Wilson should be paying attention. Meanwhile, taxis and autorickshaws went on strike for 3 days against app-based taxis, such as Uber and Ola. As usual Chief Minister Kejriwal was quick to blame the BJP for instigating the strike. But, auto drivers are all fervent supporters of Kejriwal and helped him win the election. One short shower brings Delhi to a standstill because drains have not been cleaned and roads are broken. Is that the fault of the BJP? We seem to have an infinite capacity to avoid the truth. Maybe that is why we are so poor.

Has Hillary Clinton won already?

The Democratic convention is coming to an end. Tonight Hillary Clinton will accept her nomination as candidate for the presidential election in November and they will all go home for the campaigning to begin in earnest. From the speeches it seems that her victory is assured. Even right wing media channels, like Fox News, gives Clinton 201 solid electoral college votes plus 26 which are leaning Democrat, for a total of 227, while Donald Trump has 154 solid votes plus 37 which are leaning Republican, for a total of 191. So, Trump needs 79 more electoral college votes to get to the magic figure of 270 while Clinton needs just 43. Under the electoral college rules a candidate who wins a state by even one popular vote takes all the electoral college votes which makes elections almost impossible to predict. Eulogizing Hillary Clinton, Michelle Obama said," I want a president who will teach our children that everyone in this country matters, a president who truly believes that our Founders put forth all those years ago...." Even if she is a " Hildebeest " Michelle? In his speech today, Barack Obama said," I can say with confidence there has never been a man or a woman, not me, not Bill, more qualified than Hillary Clinton to serve as the President of the United States of America." But she is still second choice, because your party rejected her in 2008. Why are the Obamas campaigning so hard for Clinton, despite deep mutual dislike? Because Obama has no legacy without Clinton. Trump got 13.4 million votes in the primaries, Clinton got 15.9 million and Bernie Sanders got 12.2 million. Clinton has raised 10 times more money than Trump, so she should be a certainty. But doubts still linger. It is not sure that supporters of Bernie Sanders will vote for Clinton after Debbie Wasserman Shultz, the Democratic National Committee chairwoman had to resign after leaked emails revealed how the party had conspired against Bernie Sanders to make sure Clinton won the nomination. Seems that Russia was behind the leaked emails. As Senator and then as Secretary of State Clinton used abusive language against Putin so he hates her. The armed coup in Ukraine was clearly engineered by the west to look like those in Arab countries, known as Arab Spring, and has effectively divided the country in two. Obamacare is in difficulties as insurance companies are running into losses and 8 years after he pomised to close it Guantanamo still remains open. For us in India Obama has been an unmitigated disaster because of his open support for Pakistan and he would have presented Pakistan with another 8 F-16 fighter jets if the Congress had not stopped it. He still has another 6 months to reward his friends for giving him Osama bin Laden in 2011 to win re-election in 2012. For us another 4 years of an Obama clone will be a continuing disaster. Let us hope that fortune favors us. 

Why continue with remedies that don't work?

In the last few days we have seen an outpouring of articles lauding the reforms of 1991. Now, Prabhat Patnaik, a Professor Emeritus at JNU in Delhi has written an angry, if incoherent, article criticising those reforms. He says that the reforms did not produce a 'retreat of the state' in favor of 'the market' but a change in the nature of the state." This means that instead of a state that apparently stands above all classes even while promoting capitalist development, and that protects traditional petty producers, including the peasantry and the workers, against encroachment from capital.....the 'reform regime' creates a state that becomes exclusively concerned with the interests of the globalised capital, and the domestic corporate-financial oligarchy aligned with it," he writes. So what is his solution? Increased taxes on the wealthy, price support for crops, easy creadit to farmers, quality education and health care. All these have been tried before under 'garibi hatao' campaign, which led to the crisis which led to the reforms of 1991, but even after 69 years of socialism India has the largest number of poor people in the world. He has special anger against the middle-class which has " emerged as a votary of the 'development' paradigm of the 'reform regime' and thrown its weight behind the corporate-financial oligarchy whose share of wealth and income has increased phenomenally under this regime." It is true that the number of rich people in India has grown but that is true for the rest of the world as well. A pathetic 3.2% of people in India are considered to be middle-class, of which 2.6% are in the lower middle, with an income of $10-20 per day, and 0.6% are upper middle, with an income of $20-50 per day. Anyone with an income of $20 per day, that is $7,300 per year, would be considered very poor in any western country and is lower than 'dibao', that is minimum income, in China. What is puzzling is what the professor is demanding. Does he want his favourite peasants and workers to stay as the proletariat or does he want them to climb up the social ladder? As the poor climb out of poverty they will inevitably become middle-class. The number of people who go from poverty to billionaire can be counted on the fingers of one hand, which is why they make such good stories. For the rest, it takes 2-3 generations of education and very hard work to make it to the upper middle-class category. The professor wants job creation but creating jobs needs investments, investments need capital and capital always looks for profits. That is the nature of the beast. The future is with robots, which are capital intensive but do not create jobs for humans. There is only one solution and that is to reduce the number of humans. There is still time but not much. Professors should devote their time to find out how best to achieve that. 

Why can't we get rid of 1991?

It is 25 years since 1991. Obviously, so what? In 1991 India nearly went bankrupt and was close to defaulting on its debts. This was a crisis in balance of payments which is a balance of exports, imports and investments. As a result of the crisis the Reserve Bank had to sell 67 tons of our gold reserves to secure $2.2 billion in loans from the IMF to steady the ship of state. From the flood of articles in news media 1991 is being celebrated as 1947, the year we became independent from the brutal British rule. The credit really goes to Narasimha Rao who was the Prime Minister at the time although the Congress has airbrushed him out of history because of the contrast with the Nehru-Gandhi dynasty, which was responsible for the mess we were in. Instead the Congress conspired to give all the credit to Dr Manmohan Singh because of his unquestioning devotion to The Family, but we know that Singh could not have been responsible for the reforms 25 years ago because of the way he presided over a near repeat of 1991 in his 10 years as Prime Minister. Unlike Narasimha Rao, he chose to hang on to his kursi, or chair, rather than go for reforms, to improve the eonomy. Politicians do not have the courage to take on the pit bulls of socialism who keep snapping at their heels to increase handouts to the poor, leading to inflation, which hurts the poor the most. The result of slow creeping reforms is that jobs are not being created. In 2012, 23.53 million men were employed in the organized sector, where wages and benefits are much higher, compared to 23.61 million in 1997. The number of women in the organized sector has increased. Total number of employment in the organized sector has increased marginally from 26.73 million in 1991 to 29.58 million in 2012. The share of manufacturing was 16.4% of GDP in 1989-90 but, despite muscular efforts by the government, it was lower at 16.2% in 2015-16. The combined fiscal deficit of state and center was higher in 2014-15 than in 1995-96 while tax-GDP ratio was slightly lower than in 1991-92, despite rising incomes. One reason why the tax base is not increasing is that most of the employment has been in the unorganized sector where all payments are in cash. Craftsmen earn more than engineers. Government is spending more on salaries and social schemes than on infrastructure. Job creation is weak because manufacturing is stagnant which was supposed to boom with the dismantling of the license/permit raj. It has not happened because most of the growth has been in real estate because of the phenomenal rise in property prices, which probably accounts for the increase in earnings of artisans. The real estate market is comatose, partly because properties are too expensive, partly because the circle rates have been increased too high, demanding a higher share of the price in white money, and partly because of the crackdown on black money. So the hysterical demands for lower interest rates. But that will only increase inflatinflation. Shades of 1991 still haunting us.

Can we create wealth without improving?

A report by the World Health Organisation says that more than half the doctors in India in 2001 did not have any medical degree. The WHO underestimates the problem. All those with degrees in Ayurved, Unani and Homeopathy actually practise Allopathic medicine, when their training is completely different. The Deputy Chairman of the Planning Commission, thankfully dissolved, noted that doctors do not need to have a MBBS degree, while presenting the report to the then Prime Minister, Manmohan Singh. Will anyone without a proper degree be allowed to practise law or accountancy? If not, why are politicians so contented with uneducated doctors? Because politicians and civil servants have given themselves the right to go abroad for medical treatment, entirely financed by the taxpayer. With 'attendant'. Who are the people availing of services by quacks? Poor people. A lot of these people are not fully literate and so do not know abbreviations for proper degrees. They are impressed by a jumble of alphabets after the quack's name, which are just fake. It is not difficult to get rid of quacks. First, publish a list of accepted degrees and make it a cheating offence to fool people with fake degrees. Second, if any patient dies after treatment from a quack he will be deemed guilty of murder. Only very few people will have the guts to become quacks. Why don't they do it? Because then poor people will have to visit proper doctors, who will naturally charge more, which may lose votes. Why are poor people so ill-informed? Because government schools are dark pits of ignorance, where more importance is paid to midday meals. Private schools teach better but are expensive. Annual cost for one child at a Delhi school was around Rs 1,30,000 last year. This is not the most expensive school in Delhi. Education is essential because good jobs are not being created. Most jobs are created in manufacturing but this sector is not growing and there is little new investment. The reason is that companies have taken on too much debt which they are unable to repay. Banks will not lend unless the old loans are paid back. The weak global economy means that exports have been falling for 18 months in a row although exports have risen in June, for the first time in 19 months. Education is vital to get good jobs in the knowledge economy. In this situation of enormous demand for jobs how is an employer to know which candidate is better. That is why marks in examination is so important. To get marks students learn from cheat sheets called kunjis or 'Pass Books'. The solution is not to stop all examinations in schools because then teachers have no incentive to teach and because parents cannot gauge a childs weakness and what extra help she may need. So-called intellectuals in India see 'meritocracy' as elitist and want to bring standards down. That is why they want to get rid of exams. Better to spread ignorance.

If you want to laugh read our news.

Uttar Pradesh will hold elections to the state assemby next year, so abuse between politicians is getting exceedingly crude everyday. What fun! First, a BJP politician, Dayashankar Singh said that Ms Mayawati, Chief of BSP, is worse than a prostitute, for selling election tickets to highest bidders. This naturally caused a huge outcry and Mr Singh was promptly expelled from the party. Rightly so. He will slink back in quietly after all furore has died down. Mr Singh should be censured for disparaging prostitutes who are as much citizens of this country as he is. The BSP has filed a FIR with the police for the abuse. It should have finished here. But this being India party supporters have to prove their absolute devotion to leaders in expectation of a share of the spoils should they manage to win the elections. So BSP workers staged protests and abused Singh's mother, wife and 12 year old daughter in filthy language. Instead of showing her outrage at this abuse of women Ms Mayawati, who just the day before had waxed eloquent about sexism, justified her party goons by saying that this will teach a lesson to Singh. Now Singh's wife has filed a FIR against Mayawati and members of her party. Ms Mayawati is worshipped with garlands of notes by her supporters. While threatening hapless women with violence politicians are very conscious of their own security. One member of parliament filmed his passage from the main gate to inside the building and posted it on Facebook, apparently showing positions of security personnel. At first he tried to brazen it out but has now tendered a written apology to the Speaker. Sadly for him, another MP, who was suspended from the same party last year, has complained that he reeks of alcohol, so that she cannot breathe. India is the only country in the world where state governments love alcohol, because of the revenue it brings, but politicians pretend to hate it because it brings votes from women. Politicians probably get their supplies tax-free from duty free shops or from friendly foreign embassies, but they tax alcohol by several hundred per cent to finance their luxurious lives. A Free Trade Agreement with the European Union cannot be concluded because of the EU demand for lower taxes on wines and spirits. All this time Indian companies were using Britain to get access to the huge EU market but after Brexit the government will need to help our companies. While Delhi is knee deep in water after a short drizzle, giving mosquitoes ample space to breed and spread viruses, Chief Minister Kejriwal is in Gujarat inciting police to revolt against the government. Those living outside India must find it hilarious reading about our politicians but for us who live here life is almost hellish. Helpless, so we laugh.

It will surely be better than a Hollywood movie.

The Republican convention ended with Donald Trump as the accepted candidate for the party, although some within the party are against him. Ted Cruz, who was the last one to accept defeat, after losing the Indiana primary, was booed loudly by delegates when he refused to endorse Trump at the convention. That was an attempt at sabotaging Trump and makes him a sore loser. He has tried to justify it by saying that Trump had insulted his wife and his father. If so, he has every right to be offended, but he could have stayed away, like the Bush family and Kasich did. We think that the biggest traitors are in India, as we saw when fellows, who were elected as members of the BJP, actively undermined the party during Bihar elections. They did not have the decency to resign their seats in parliament, with all the perks that come with them, which makes them paticularly repugnant. Americans are no different, are they? Trump gave a long, somewhat rambling speech during which he blamed the present administration for increasing crimes, attacks on police, terrorism and uncontrolled immigration. Like all political speeches, it was mixture of facts, half-truths and false assertions. For the present Trump has pulled nearly equal with Hillary Clinton but this will change next week when the Democrat convention starts. Attacks will be fierce. Trump has never held public office so the attacks will be personal. He will be called a sexist, a racist, a xenophobe, a liar, a crook and any other name that they can think of. People have heard all that before. The debates between Trump and Clinton will be interesting. Trump will really have to work hard to get his facts right. We do not know if Melania Trump's speech was deliberately sabotaged to make it look like plagiarism so Trump has to select his advisers very carefully. Clinton's experience with public office is both an asset and a millstone because she is open to allegations of incompetence, at best, and being deceitful, at worst. The challenge of Bernie Sanders has seriously shaken her confidence so that she is having to depend on Obama to support her campaign. Not so long ago Bill Clinton, husband of Hillary, was know to despise Obama. "  I hate that man Obama more than any man I've ever met, more than any man who ever lived," said Bill Clinton. While Michelle Obama called Hillary a "Hidebeest". She refused to invite the Clintons to dinner and wanted Joe Biden to run for president. Spiteful people, aren't they? Now Obama desperately needs Hillary Clinton to protect his tatty legacy. His only achievement the Affordable Care Act, or Obamacare, is sinking and will surely by dismantled if Trump wins.  He dissuaded Biden from running and is using all his influence to make sure that Trump does not win. He can bring all African-Americans to vote for Clinton. Whatever happens it will be interesting. Better than going to a movie.

What if we do not want to serve our masters?

Former Governor of the Reserve Bank, D Subbarao, has written a book saying that the then Finance Minister, Chidambaram tried to force him to reduce interest rate when inflation was already running very high. When Subbarao refused to comply the Congress government retaliated by refusing to extend contracts of 2 deputy governors of the RBI. Recently, former minister in the same Congress government, Jairam Ramesh had this to say," So, this controversy, which now Dr Subbarao has also entered, it is most unnecessary.....because the Finance Minister has to weigh so many considerations, whereas the Governor of Reserve Bank of India can afford to be single-minded in his approach. Prime Ministers cannot, Finance Ministers cannot. So, I think Dr Subbarao has done grave injustice to his political masters." Firstly, politicians are not our masters, although they have given themselves all the powers to suppress us, and keep devising new tricks, like Aadhar cards and cashless society, to take away whatever little freedom we have left. Secondly, all ministers should be single-minded in their efforts to improve the economy, reduce poverty and make the nation stronger, and not follow orders blindly to hang on to their posts. Ramesh is, or was, an economist and the former Prime Minister, Manmohan Singh boasts of a D.Phil in economics from Oxford, no less. The present government is no different, having forced Raghuram Rajan to resign by treating him with great disrespect, because he is not reducing interest rate, when retail inflation is rising. A politician in India would never resign regardless of insults or humiliation. Rajan has cut policy rate by 150 basis points, from 8% to 6.5%, while retail inflation has risen to 5.77%, after dropping below 4%, and the Asian Development Bank is predicitng a rate of 5.8% next year. Politicians argue that inflation is caused by food, which is a supply side problem and not of demand, and inflation has come down because of lower oil prices, and not because of the high interest rate by the RBI. What they are hiding is what inflation rate they are willing to inflict on us. Rajan was aiming for a rate of 4%, plus/minus 2%, setting the upper limit at 6%, whereas politicians want a rate of 5% which sets the upper limit at 7%. The Finance Minister cannot understand why people should expect high interest on their savings when inflation is running so high. That is because politicians get everything free on taxpayer money, including companion, while taxpayers get nothing in return for the taxes they pay. Low rates of interest encourage the rich to borrow heavily from banks. 8,167 people have defaulted on Rs 767 billion loans to banks. When you are masters you feel entitled. 

Innocent freshness or polished platitudes, what is preferable?

It seems to be a custom in the US for a candidate's wife to give a speech extolling her husband who is running for office. We should have the same in India, it will make boring elections so much more enjoyable, to watch each lady trying to prove her extreme devotion to her husband. Couple of days back it was Melania Trump's turn to speak at the Republican Convention about her husband Donald. Now this is a lady who was born in Slovenia, worked in Milan and came to the US in 1996. During her speech she repeated a paragraph straight out of Michelle Obama's speech to the Democratic Convention in 2008. Michelle Obama is a lawyer, born and educated in the US and her husband is the champion gasbag of the world, so she wrote her own speech, but we are not sure of Melania Trump's knowledge of English. She apparently said that she wrote her own speech but whether she meant that she wrote every word or just suggested the ideas is not clear. A speechwriter has now accepted responsibility for the plagiarism but whether she did it on purpose we do not know. It is unimaginable that a professional speechwriter will not know that in today's world, where everyone is armed with Google, her action will be detected within minutes, as it was, causing acute embarassment to Melania. Donald Trump is a highly divisive figure, but so is Obama. The US has not been so racially divided since the Rodney King riots of 1992. It was eye-opening to see the sheer delight in the liberal media at this innocent lady's discomfiture. These people are usually highly sympathetic to terrorists, who they see as misunderstood children, to be hugged with sweet words of comfort. But these same people were enjoying repeating that bit of video over and over again with such mean spite that it was painful to watch. Being liberal obviously does not mean being generous, understanding or sympathetic. On another note, Sam Allardyce, also known as 'Big Sam', is to be appointed as the new manager of England following the resignation of Roy Hodgson, after the humiliating defeat by Iceland in France, in Euro 2016. He is the same man who was sacked as manager of Blackburn Rovers by the Venkys, the chicken magnates, after they bought the club in 2010. Blackburn were relegated that season and have not been able to get back to the Premier League. That is a loss of almost 200 million pounds per season. Obviously, running a football club is not the same as selling chicken. The Democrat Convention is next week and we will see a highly synchronised event and we will see Hillary Clinton, another lawyer, giving a flawless speech, with the same platitudes in high flowing language. How stale, same old, same old.

It seems like something we have seen before.

When the Egyptian revolution took place in January, 2011 commentators were hoping that Egypt will transform into a secular democracy like Turkey. At that time we argued that there was a greater possibility of Egypt turning into another Pakistan because, like the Pakistani army, the army in Egypt controls a large chunk of business in the country. If the army staged a coup the Muslim Brotherhood will resort to terrorist attacks like the Taliban in Pakistan. We also predicted tha Erdogan will slowly turn Turkey into an Islamist state. About 4 days back there was apparently a coup in Turkey. Seems that two F-16 fighter jets locked onto President Erdogan's plane, as it was flying to Istanbul from Marmaris, but did not fire. Also apparently there was an attaack on his palace in Marmaris (how many palaces does this guy have?) minutes after he had left. Seems that the entire coup attempt had been designed to fail, doesn't it? For a coup to be successful the plotters should seize the media and be able to convince people of their imminent victory, which brings support from fence-sitters in defence forces. Erdogan was able to contact a private television station from his iPhone to demonstrate that he was still free. This is the excuse that allows Erdogan to purge over 50,000 people, consisting of army personnel, police, judges, civil servants and teachers. Iran also purged the armed forces after the revolution in 1979 but had to release many from prison when the war with Iraq broke out in 1980. Previously, Erdogan got many army officers arrested on charges of plotting a coup in 2003 but all the officers were released in 2012 when all the evidence against them was proved to be forged. This time 243 people have been killed to make it look more solid. This failed attempt gives total power to Erdogan which has been his ambition all along. Like all thugs Erdogan is drunk with his power and thinks he is invincible. The NATO is a big source of his strength because it is committed to protecting Turkey in case of an attack by another force. That is what Erdogan tried to engineer when Turkish planes shot down a Russian jet returning from a bombing mission in Syria. Erdogan wanted to stop Russians from bombing ISIS oil trucks because he was making vast sums of money from oil smuggling. In February the NATO warned Erdogan that it will not participate in a war with Russia. Like all dictators Erdogan, and wife, spend the nation's wealth on personal enrichment and luxuries. So, what happens now? No doubt Erdogan will consolidate his power and his ecstatic supporters will beat up anyone they do not like. He can convert schools to madrassas like Zia-ul-Haq did in Pakistan but at some point he will realise that once you let the Islamist genie out of the bottle you cannot put it back in. Will Obama have the spine throw Turkey out of NATO, which is the only action which will bring some sense to this thug? So far Obama has no evidence of a spine. We wait.

If you do not protect income how are you protecting people?

Donald Trump has promised a 35% tax on cars and parts produced by Ford in Mexico and a 45% tax on imports from China, inviting criticism from economists. So, is protectionism necessarily a bad thing asks Professor Eichengreen from the US. If the US imposes taxes on imports from other countries they will retaliate by imposing taxes on US goods and global trade will suffer as investment collapses. Apparently, the Great Depression was exacerbated by the Smoot-Hawley Tariff in 1930. But that reasoning may not apply to the present slowdown in global growth. " When the economy is in a liquidity trap - when demand is deficient, prices are stagnant or falling and interest rates approach zero - normal macroeconomic logic goes out the window," writes the professor. If President Trump imposes taxes on goods from China and President Xi retaliates by imposing taxes on goods from the US trade should fall and both countries should suffer. " But when deflation looms, upward pressure on prices is just what the doctor ordered. Higher prices encourage firms to raise production and households to increase their spending. They also reduce the burden of debts. And because inflation is still too low, owing to depressed macroeconomic conditions, there is no need for the Fed to raise interest rates and offset any inflationary effects of the increase in spending." Free trade is not necessarily good for developing countries. China and Vietnam developed by imposing business subsidies, domestic-content requirements, investment regulations and import barriers, while Mexico has languished by relying on free trade alone. Japan, South Korea, Taiwan and China had phenomenal export-led growth when import tariffs in the US and Europe were higher than they are today. Free trade deals may not be necessary. People in rich countries see free trade as the cause of rising unemployment and falling living standards. This is what binds Donald Trump and Brexit. People, who were solid Democrats in Pittsburgh, are going to vote for Trump. Why? " We've lost people here," said Del Signore." Why did we lose people? Because we lost the coal, the coal mining jobs. We lost the steel mill jobs. We lost the railroad jobs. Because they went overseas, or somewhere else, and we've suffered. It's a shame. But that's what happened. We're the Rust Belt." Why is there a liquidity trap when central banks in the US, Europe and Japan have poured trillions of dollars into their economies by buying up bonds, also known as Quantitative Easing? At the same time interest rates are close to zero in the US and negative in the Eurozone and 4 other countries. Nations protect their borders, what is wrong in protecting their economies? Only if they can stand up against business lobbies. Need guts.

The irony of democracy.

In today's world 'democracy' is the biggest irony perpetrated on 'we, the people'. East Germany was known as the German Democratic Republic, which was a communist dictatorship, kept in power by the dreaded secret police, the Stasi. Robert Mugabe has been elected continously since 1980 which surely makes him the most democratic leader in the world today. He is great friends with Kim Jon-un, despite the difference in age. Mugabe won a landslide victory in general elections in 2013, showing that he still has support in the country. Western countries instigate 'regime change' in countries ruled by dictators but will resist any change of a democratic government unless through legitimate elections. South Africa could protect the people of Zimbabwe from economic collapse by asking Mugabe to step down but will not do so because he has been elected democratically. President Obama condemned a military coup in Honduras in 2009, precipitated by the president trying to cling on to power by amending the constitution. " It would be a terrible precedent if we start moving backwards into the era in which we are seeing military coups as a means of political transition, rather than democratic elections," said Obama. Recently, Hillary Clinton, who is the Democrat Party candidate for president in November's election, said that although it was a coup in Honduras it was not a military coup. Back in 2002, when the military imprisoned Hugo Chavez of Venezuela the Bush adminstration refused to call it a coup. It is another matter that the socialist policies of Chavez have reduced Venezuela's economy to near collapse so that its citizens are crossing into Colombia to buy food and medicines. An armed coup by extreme right Svoboda and Right Sector groups, supported by the west, forced the elected president, Viktor Yanukovych to flee the country but instead of levying sanctions on the unelected government in Kiev western countries applied sanctions on Russia which supported the democratically elected government of Ukraine. Couple of days back there was a badly organized army coup in Turkey. Obama was quick to condemn the coup and support the 'democratically elected' government of Recep Tayyip Erdogan, never mind that he is an Islamist thug, who supports terrorist groups in Syria and broke a peace deal with the Kurds, the only group fighting ISIS on the ground, to win elections last year. Turkey is apparently holding 1,500 US soldiers inside Incirlik Air Base as hostage to force the US to extradite Erdogan's enemy, Fethulah Gulen, who is in exile in Pennsylvania. Ironically, Erdogan defeated the coup attempt by calling for democracy over social media. Thugs, liars, assorted low lifes, are all accepted as long they have won elections. Only we, the people are the mugs. That is the irony.

Should we not have an expert to manage our money?

We have written about this many many times. Politicians in India, from every party, have one conviction, encased in concrete, which is low inflation stimulates economic growth. Apparently, high inflation does not matter in emerging economies so if growth can somehow be accelerated it will increase tax collection, which will allow politicians to buy votes with more handouts. We would like to ask one question," Would any prime minister appoint an economist or an accountant as the Attorney General?" If not, why is every Finance Minister a lawyer? Do we not have any competent economist, financier or accountant to do the job? It maybe that an expert will have his own opinion on the best course for the economy, maybe honorable and refuse to follow the same imbecile policies as politicians have been repeatedly asking for, making us suffer. It is no surprise that former Governor of the Reserve Bank, D Subbarao has published his autobiography in which he confirms what we have been writing for so long, and that is that Chidambaram tried to pressure him to reduce interest rate, when he did not want to. We would suggest that Chidambaram succeeded because retail inflation was out of control from 2008 to 2013 when Subbarao was the governor. The interest rate was 7% in 2008 but he brought it down sharply in 2009 to 4.25%, probably helping the Congress to win re-election. The average inflation rates were 8.32% in 2008, 10.83% iin 2009, 12.11% in 2010, 8.87% in 2011, 9.30% in 2012 and 10.92% in 2013, when Raghuram Rajan came in and increased rates to 8% and inflation fell to 6.37% in 2014. In August 2013, the rupee fell to 69 to the dollar, so that Rajan had to increase returns on NRI deposits in banks to attract $28 billion to stabilise the currency. Subbarao says that he held rates steady even under pressure from Chidambaram. " There is a price to pay, of course, for not falling in line. The government has several ways of showing its displeasure, and the way they chose to do so with me was by going against my recommendations in the reappointment of deputy governors in the bank," writes Subbarao. It is exemplified by the churlish manner in which the present government has dealt with the extension of Raghuram Rajan's contract. The Finance Minister asked recently why people should get a high interest on their term deposits in banks. He has no compunction about making us poorer through negative real interest rates, because everything is provided for him by the taxpayer. Politicians better watch out. Power is controlled by the Hindi states because they have the most members in the parliament. Hindi states get most of the money from the budget which is causing resentment in the South. High taxes and inflation affect everyone, so they see this as punishment. An economist as finance minister, is that too much to ask for?

We want a long-term solution because we care.

' The road to hell is paved with good intentions ' or ' hell is full of good wishes or desires '. There are lots of people with good intentions, who work hard to help others, but are they really doing any good? To question, or doubt, the efficacy of their work will invite instant scorn and accusations of being selfish and heartless. A long article tries to make a case for diversifying policies for the poor. " A staggering 75% of rural households have monthly income of less than Rs 5,000 and around 38% of rural households are landless and dependent on manual casual labour as their main source of income," says the article. As per the last census 833 million people live in rural areas, so 75% of that is a staggering 633 million people, that is more than half the population of the whole of the African continent, or 27 countries combined. " The figures show that the multiple social protection programmes implemented by successive governments, such as the Mahatma Gandhi National Rural Guarantee Act and National Rural Livelihoods Mission, have been unable to reach the extreme poor." So, stop these useless waste of money? Good heavens, no. Instead the authors recommend " a productive asset such as livestock or supplies for petty trade, technical skills training, savings support, temporary cash or in-kind support to tide over immediate consumption needs and regular mentoring and coaching over 18-24 months..." A long list at a huge cost. A lot of people will be required to identify such people, give them training, supervise the distribution of "temporary cash", mentoring and coaching and all these mentors and coaches will presumably get nice fat salaries. We get the picture. Apparently, " the ministry of rural development has recently incorporated this evidence into the design of a newly proposed scheme, tentatively named the Grameen Swarozgar Yojana." Of course, they have. Politicians have to win elections and 633 million make a huge vote bank. Besides it does not cost the politicians anything because they are throwing taxpayer money. Inflation is an ever-present danger in India, as the figures for June show. Increased fiscal spending by the government will raise inflation, current account deficit will rise and the rupee will fall, as happened in 2013. We are not immune to the suffering of the poor but we have a right to know why 6 decades of handouts have not reduced their misery. When is India going to become a wealthy nation so that unproductive handouts come to an end? We are moved by tear-jerker articles but would politely like to know why people who have no food nevertheless have so many children. What is the economic benefit? Do they get greater subsidies depending on the number of children or do they use them as collateral to borrow money from local lenders? Unless we have proper answers there can be no remedy. Sadly, there is too much money to be made from altruism so there is little interest in long-term solutions. Truth.

Will it be colonialism if we learn from the Brits?

Our politicians glibly justify ever rising taxes or another law restricting our liberties by pointing to western countries, guessing rightly that people will see such changes as beneficial because western countries are so wealthy. We hope that they have been watching the rapid smooth change in administration in Britain this week, especially since a lot of our laws, and the civil service, are a continuation of colonial British practices. This came about because in 2013 the former Prime Minister, David Cameron promised a referendum on continuing membership of the European Union, to unite the Conservative Party and to stop traditional Tory supporters from voting for the UK Independence Party, led by Nigel Farage, which wanted to exit the EU. Cameron's strategy was a great success in that he won an absolute majority in parliament, which meant that he was set for another 5 years as prime minister. However, he had promised a referendum, which was held on 23 June. Cameron campaigned strenuously for the Remain camp and was expected to win, but when the reult was declared the Leave camp had won. Here is where we want our polticians to pay particular attention to events as they unfolded after the result was declared. 1. David Cameron promptly resigned his post as Prime Minister, showing a sense of honor and pride. Our politicians cling on and on, as we grow tired of their ugly corrupt old faces tainting our televisions screens. Regardless of charges of serious crimes or scandalous behavior or after being booted out in elections they hang around completely shameless in their dishonor and may even beg their way into that dustbin of rejected politicians, the Rajya Sabha. 2. Five people stood for the leadership of the Conservative Party but within a week we have Theresa May as Prime Minister. As soon as her victory was confirmed Cameron met the Queen to resign his post and promptly moved out of 10 Downing Street, the official residence, with his family and May moved in. Unlike our lot who refuse to give up their official residences with excuses, whining and begging, their armor plated skins oblivious to the intense disgust of the people. 3. Theresa May has appointed her cabinet, consisting of 22 people. We have 78 ministers. Why? Just to please the toadies and bag-carriers at taxpayer expense? 4. Surprisingly, May has appointed Boris Johnson, who was expected to be the Prime Minister, before being stabbed in the back by his mate, Michael Gove, as Foreign Secretary. Perhaps a case of 'keep your enemies closer'. She has fired the powerful Notting Hill set but they will not go off to form a breakaway party, like our lot are prone to do. What do we do? A summary of events since 24 June should be shown to MPs when parliament meets at the start of the monsoon session. But will they learn? 

If there is no car people will take buses.

The price of oil has fallen from $115 per barrel in 2014 to around $46 per barrel today. Cheaper petrol prices has meant that demand for oil has grown by 12.6% in the first 6 months of this year in India, compared to 2015. If oil companies were hoping that India will make up the slack in demand from the rest of the world they are going to be disappointed. Our demand for oil is never going to catch up to that of China. We need 544,000 barrels of oil per day while China needs 2.8 million barrels. Why so much difference? Because our growth in oil consumption is driven by rising use of motorcycles. Last year 16.5 million motorbikes were sold in India, up from 11.8 million in 2010-11, compared to 24.6 million in China but, and here is the massive difference, 25 million cars were sold in China last year, compared to a tiny 3 million in India. In fact, car sales have fallen from 300,000 per month in 2010 to 215,000 per month today. Why? Because average Indian salary is $1,440 per annum, compared to $9,000 per annum in China. Aslo because since independence our politicians have defined India as a poor country and have been against car ownership. More than 20% of workers walk to work and less than 15% use public transport. Around 2.7% use cars or jeeps and 3% use either autorickshaw or taxis. Of the 4 metro cities, only 2.93% use a car to go to work in Kolkata, it is 4.78% in Mumbai and 6.14% in Chennai. Delhi comes first where 10.79% drive a car to work. Why so few people own cars in India? Because cars are expensive, about 5 times the average annual salary, cars use more petrol, roads are narrow and politicians are always looking for ways to penalise car owners. Thus, Delhi Chief Minister forced restrictions on car usage even though it showed no improvement in pollution levels. He is threatening to bring it back again in winter, maybe to increase earnings of autorickshaws. Some suggest introducing congestion charges on cars, as is the case in London. Others are suggesting increasing parking charges to astronomical levels. So how will people travel? There is the metro, but most people need some transport to get to a metro station. Besides trains are already overcrowded during peak hours. The government proposes to buy 25 electric buses but Delhi needs 10,000 more buses to provide a proper service. In last 5 years the Delhi Transport Corporation lost Rs 50 billion so we can imagine how much more it will lose with more buses. Some countries have over 600 cars per 1000 people, while India was said to have just 32 cars per 1000 people in 2015. If politicians do not want cars why is the government looking to spend so much on building highways? While a German company is designing a flying car by 2018 we are going back to bullock carts. If we are not allowed to own car stop manufacturing them. 

A pressure cooker ready to explode.

As expected, an international tribunal at the Hague has ruled decisively against China on its claim on the entire South China Sea. China has drawn 9 dashes on the map of the South China Sea, the so-called 9-dash line, just off the coasts of other countries bordering the sea and says that all the area inside that line belongs to it. It has been building artificial islands on reefs within the sea and has stationed armed vessels on those islands. Other countries bordering the sea also have claims on its waters. The former president of the Philippines, which brought the case to the tribunal, compared China's actions to those of Nazi Germany. The Tribunal also found that Chinese fishermen have seriously destroyed coral reefs and depleted the sea of fish and endengered species, like sea turtles and giant clams. Also as expected, China, a nation of uncivilised barbarians, has reacted by threatening and snarling at its neighbors. What happens now? Nothing in the short term. China will presumably continue to tighten its grip on the Sea. In the long term it depends on the economy. A government economist said that its total debt is more than double its GDP, at $28 trillion by the middle of 2014. Companies have borrowed heavily from banks and since the government owns the banks any problem will quickly become systemic. Assets controlled by shadow banks amount to 80% of the GDP, which are now lending to commercial banks. Total US debt is over $19 trillion. Around $5 trillion worth of shipping passes through the sea every year so we shall see if China decides to levy taxes on ships passing through if there is a sudden deterioration of its finances. The IMF has warned China of the risk of its corporate debt. With global growth remaining tepid China cannot export its way out of the problem. The government is doing everything to stimulate the economy by focusing heavily on innovation. The government is encouraging the creation and manufacture of robots but like all its efforts this has also turned into an investment bubble. Its drive for innovation has turned into another property bubble. Innovation takes time and has to make allowances for failure. Local government officials cannot afford to fail so they must be showing investments in real estate as progress. The world is poised at a very interesting point. The UK has left the EU which could come under further economic strain. US jobs report predicts a rise in interest rate. China is not only depleting the South China Sea it is depleting other oceans as well. Those countries are poor and weak but may retaliate. How many wars is it going to fight? China harvests organs from innocent people accused of subversion and arrests anyone who protests. It is ready to explode and events far away may act as catalysts. We hope it is very soon.

Bonds have to be repaid, bank loans are for free.

Last month the Federal Reserve, in the US, published the result of a stress test on large banks. 31 out of 33 banks were cleared, 2 European banks failed. This exercise showed that the Fed is vigilant against a repeat of the Lehman Brothers fiasco in 2008 that almost resulted in a global financial meltdown. A similar exercise by the Reserve Bank in India showed that gross Non Performing Assets, as bad loans are called, have grown from 5.1% to 7.6%, and could rise to 9.3% by March 2017, even as high as 11% in public sector banks. Since 2010 the government has handed Rs 677 billion to public sector banks and has promised another Rs 700 billion to recapitalize them. The RBI does not identify the banks with the highest bad loans for fear of a run on the banks, which will create and emergency for the government because these banks are government owned. Not just banks. The Comptroller and Auditor General calculated that 157 public sector companies have cumulative loans of Rs 1.1 trillion and of these 64 companies have a net worth of zero. Whose money is being wasted on these useless companies? Taxpayer money, of course. Whereas the US government made handsome profits from the Troubled Asset Relief Program, when it loaned $700 billion to troubled banks the hapless Indian taxpayer is always a loser. Who gains from the government largesse? The obscenely rich fellows, known as poromoters, who have borrowed from the banks. These fellows do not have to provide any personal guarantee for the loans they take, which was the biggest mistake of Vijay Mallya, whose debt is minuscule compared to some others, and keep a low profile or are friendly with politicians. Promoters reduce their exposure to zero by borrowing against their shares. Distress sale of shares will see a collapse in their values and taking over a business with negative net worth will yield nothing. So, the crooks win and we are the losers. Recapitalizing banks and keeping sick public sector companies alive with taxpayer money just keeps the sore festering. What is the long term solution? Privatise. Public sector companies may not have any net worth but they have large tracts of extremely valuable land, which will yield vast sums of money, and by saving on bank losses the government can spend on infrastructure projects which will lead to jobs and growth. Restructuring will be opposed by vested interests who are making vast sums of money by milking the state. The other option is to ask promoters to borrow directly from the public by selling corporate bonds. Companies used sell bonds about 20 years back, paying interest on how they were rated by rating agencies. If a company defaults on bonds its share value will collapse and it will fail. Better to borrow from the taxpayer, which need not be refunded. Cute, what? 

Nothing succeeds like enjoyment.

Our Finance Minister said yesterday," Recent reports have indicated that there is a sizable dip in Indian holdings outside the country." He meant black money. Hallelujah. The Finance Minister has also promised that no questions will be asked of those who voluntarily declare black money and pay tax on that. That indeed is generous of him. But what about politicians? Of the 19 new ministers sworn into government 7 have serious criminal charges against them, such as attempted murder, communal rioting, bribery and possession of deadly weapons. The standard response of politicians is that these charges are politically motivated, made by opponents to gain electoral advantage. Why not pass a law that any politician making charges, proven to be false on investigation, will have to pay heavy penalties? Because charges against politcians can never be proven, because they control the police, so those making charges will always be penalised, which they will decry as politically motivated. Of the 78 ministers in the cabinet 24 have declared serious criminal charges against themselves. Why do we need a huge mob of 78 in India, which is a $2 trillion economy, while the US, which is a $16 trillion economy, has a Vice President, 15 cabinet secretaries and 7 other posts of cabinet rank, making 23 in all? Apart from occupying huge bungalows in Lutyens Delhi, having brainstorming sessions in 5 star hotels and going on frequent foreign tours, to make India great again, what exactly do these people do? How do they pass their time? It must be very hard to create endless enjoyment at taxpayer expense. What sacrifice. If all these people fail to improve the economy then the Congress, which has ruled India in 55 out of 68 years since independence, is waiting in the wings to take over. We are waiting with breathless anticipation to know whether Ms Priyanka Gandhi, daughter of Congress President, Sonia Gandhi, sister of Congress Vice President, Rahul Gandhi, and wife of the famous magician, Robert Vadra, who is reputed to make millions out of nothing, will be joining the fray. The Family has a tried and tested method of winning elections - dole out subsidies. Subsidies have amounted to 9.2% of GDP, that is Rs 6.90 trillion, when The Family was in power, compared to 5.3% of GDP, which was Rs 1.83 trillion, when others formed the government. Naturally, expense grew by 9.1% during The Family rule, compared to 5.6% when it was not in power. That increased government debt, led to inflation and increased poverty. " All political lives end in failure," David Cameron is reputed to have said after losing  the Brexit vote. Indian politicians never fail. Because they are here to enjoy. So they never go.

If cows are fed pizzas will we pay less tax?

Assaults on the middle class in India is relentless. Kerala imposed a 14.5% on pizzas and burgers. What is the reasoning? A study showed that there are more fat students in private schools compared to government ones in Kerala, middle class children go to private schools, middle class people tend to eat in restaurants, and junk food has been blamed for obesity in western countries. Ergo put a tax on junk food, pretending to protect the health of children and the government earns an extra Rs 100 million. After all, politicians have to travel to cooler climes in Europe or the US, for study, and civil servants have to be paid humongous increases in salaries as prescribed by the Seventh Pay Commission, to rule us. Never mind that studies show a higher incidence of obesity in poorer people in western countries and sugar has been blamed the most so that Britain has levied a tax on sugar. Sugar is as addictive as drugs, as Mexico has discovered, where consumption of sugary drinks are rising again after a 10% tax was imposed 2 years ago. The Kerala government has not bothered to study whether better vaccination against childhood illnesses or lack of exercise, because of middle class obsession with marks, is responsible for overweight children. Just bash the people, they cannot do anything for the next 5 years anyway. Haryana government has proposed taxes on marriages, cinemas and even foodgrains to pay for looking after cows. Why? Once cows are old and stop producing milk the owners let them out on the streets. These people should pay, as well as those who strongly believe in not eating beef. This tax will only allow the western media to mock Hindus. Then there is the constant assault on cars, because cars are owned by the middle class while the poor drive mopeds. The automobile industry constitutes 10% of GDP, generates $145 billion and employs 25 million people. There was the odd-even assault in Delhi when people were being fined Rs 2,000 if they drove on the wrong days by mistake although repeated studies showed no benefit. It did increase earnings of auto-rickshaw drivers, who are ardent supporters of the chief minister. Speed-breakers outside schools definitely increase pollution, but they are not being removed. The government has suddenly woken up to the noise pollution caused by honking and is thinking of imposing heavy penalties. Why do people honk? Because there is no policeman to control traffic, people drive wrong and potholes cause accidents. People on two-wheelers do not look where they are going, while zigzagging though traffic. Car drivers are always blamed for any accident so they honk to warn dangerous drivers. A newspaper has decided to join the bandwagon without any analysis. Not a word on banning loud speakers which produce much more noise and are of no use. Potholes kill over 11,000 people every year. Repairing roads and traffic control cost money, fines and taxes result in greater enjoyment. Journalists probably get a share. Bharat Mata ki jai.

Is it all because of mobile phones?

In 1991, a taxi driver, Rodney King III was severely beaten up with batons by 4 Los Angeles Police officers. In 1992, all 4 officers were found not guilty of charges of using excessive force, which resulted in riots in Los Angeles for days, 55 people were killed in the riots, 2000 were injured. Eventually 2 officers were found guilty of violating civil rights and 2 were acquitted. Even that would not have happened if the beating had not been recorded on video by an onlooker from a balcony. Today everyone has cell phones with built in cameras so police brutality is being revealed regularly. In Baton Rouge a shopkeeper who filmed the killing of his friend, Alton Sterling, hid his phone from the police because he thought they would destroy evidence. He was questioned for hours by the police, first in a police car and then at the police station till 3AM. Why? Were they trying to frighten him into changing his story? In another killing the girl friend of Phillando Castile started broadcasting live on Facebook immediately after the shooting. She was handcuffed, separated from her daughter and not given food or water. We in India have not forgotten the near torture of Krittika Biswas, a teenager, by New York Police, without bothering for any proof, the vicious assault on a grandfather, out for a stroll, or the sexual assault on Devyani Khobragade, who was set up by a racist woman at the US Embassy in New Delhi. Police are human and liable to make mistakes, like anybody else, but their inhuman treatment of witnesses and their total immunity from any punishment make people angry. This anger exploded in Dallas yesterday when an army veteran shot dead 5 police officers, 7 others were wounded. The shooter was later killed by a robot controlled bomb. Sounds like official terrorism, does it not? The deadly attack on police was rightly condemned by politicians, including Obama. We do not know if this is the beginning of a racial war but more such killings are bound to happen as the US is awash with guns. The National Rifle Association actually has the audacity to rate politicians on their support for guns, like credit rating agencies rate businesses. Bernie Sanders has a D- rating. The NRA recommends that," The only way to stop a bad guy with a gun is with a good guy with a gun." So, why did the good guys with guns die in Dallas? A black professor writes of the fear, anger and hopelessness of blacks while a white former Congressman threatens blacks with vengeance," This is now war. Watch out Obama. Watch out black lives matter punks. Real America is coming after you." So which America is real? A white policeman with a gun or a black person with a mobile phone? The result can only be tears.