We need infrastructure for people, not for the corrupt.

"When done well, infrastructure investment can revive flagging economies and pay for itself, by galvanizing  private-sector activity and fostering economic growth. But when done poorly, public infrastructure spending can lead to corruption and waste," writes Paolo Mauro, an Assistant Director in the African Department at the International Monetary Fund. We are suffering the effects of such corruption in India. Non-performing assets, or bad loans, in public sector banks have risen by 56% in 2016 and by 135% in the last 2 years, which hinders the ability of these banks to lend for fresh projects. "Bad loans are the result of the government ordering banks to support big, growth-promoting, but risky infrastructure projects during India's boom years -- and then politically connected companies procuring bridge loans when those projects turned sour," writes Mihir Sharma for Bloomberg.  Gross NPAs of banks have reached a colossal Rs 6.15 trillion from Rs 2.62 trillion  in 2 years. At least 5 state banks have gross NPAs over 15%. "People who earn $200 per year spend only 1% of their income on transportation, compared to 18% for people earning $20,000," writes Mauro. "In the next two decades, the number of people earning $6,000-$20,000 will increase by more than one billion, and many of them will purchase their first car. Meanwhile, the number of people with annual incomes of $20,000 and above will increase by almost 800 million, and many of them will begin to fly for leisure." India desperately needs to build quality infrastructure and for that we need private investment. Trouble is that Indians do not trust the private sector. A survey in 2015 showed that 80% of Indians believe that businesses in India are corrupt. Instead of helping businesses to improve quality of service to consumers and encouraging innovation the government passed a Corporate Social Responsibility Act which forces companies to spend 2% of their profits on social welfare. Building infrastructure costs a lot of money, so it is no use building 8 airports at a cost of $50 million which no one is prepared to use. One problem is that politicians are hungry to tax everything out of existence so Delhi Airport costs Air India 230% more than Dubai. Trucks burn up $21.3 billion worth of fuel every year queuing up at toll plazas which extort money every 20 km or so. The private sector maybe poor but corporate governance at government companies is even worse. Maharashtra spent Rs 700 billion on irrigation projects but has little to show for it. Has anyone gone to prison? No. Instead the government is busy diluting the Prevention Of Corruption Act. As Mauro said infrastructure is vital but a great source of corruption. Especially in India.

What we can learn from Africa and Latin America.

Countries in Africa and Latin America are growing but not as they should because of certain  deficiencies, wrote Professor Noah Smith. Why? In Latin America industries have become very good at what they do but they are not moving up the value chain because trade is restricted by overvalued currencies, while in Africa productivity in industry is not improving as it should. So Latin American countries should try to export more, possibly by weakening their currencies, while African countries have to get more foreign expertise in their industries. Latin America has a relatively low population and a high standard of living. It has huge natural resources but the economy actually contracted in 2016. Brazil had to increase its interest rate to over 14% to control rising inflation, but has been able to reduce it to 12.25%. Inflation had spiked to 10.36% but has cooled to 5.35%. A weak currency will increase prices and make inflation worse. Difficult. Africa is a huge continent with 54 countries, with a total population of 1.2 billion, less than that of India, but it is growing fast and is estimated to double by 2050. A growing population means more jobs have to be created, which means more spending on infrastructure, but that has to be balanced against the immediate need to provide food, healthcare and education. So what about India? We are tiny in area, compared to these two continents, with double the population of the whole of Latin America. Our economy has been growing at over 7% but there are problems, apart from the problems with demonetisation, which are predicted to be temporary. Our main problems are the massive population, crumbling infrastructure and corruption. Add to that extremely toxic neighbors, China and Pakistan, who want to destroy India, and the problems seem insurmountable. The population can be made to shrink by paying subsidies contingent on not having children. Subsidies should be restricted to women and children and men should have to work on infrastructure projects to be paid. Corruption is a mountain weighing us down. Critics are quick to condemn Indians as being genetically corrupt. Are we? The Libor scandal was orchestrated by some of the biggest names in international banking. Volkswagen, a German car maker, was caught cheating on emissions of its diesel engines. The biggest danger of blaming all Indians is that it protects the real source of corruption, which is our politicians and civil servants. Political parties run almost exclusively on black money. There are over 1,900 parties in India and over 400 have never fought an election. The main parties are the main beneficiaries of cash money. That is why high denomination notes were banned suddenly. Punish the whole nation to protect the real crooks.

A man in a raincoat should not flash at another.

In the opinion of the former Prime Minister Manmohan Singh, who has a DPhil in economics from Oxford, demonetisation of high denomination notes in India was an act of "organised loot and legalised plunder". In response the current Prime Minister Narendra Modi taunted Singh saying the he "is the only person who knows the art of bathing in a bathroom with a raincoat on". He was referring to Singh never taking responsibility for the numerous scams that occurred when he was prime minister. Politicians are never punished for the crimes they commit. Why? Because they cover for each other. About 2 weeks back Kim Jong-nam, half brother of North Korean President, Kim Jong Un, was assassinated inside an airport in Malaysia. Within a couple of days the authorities arrested the first suspect and within a week they had found that the cause of death was the nerve agent VX. VX is a deadly poison, banned by the United Nations as a weapon of mass destruction, and possessed by a few governments only. Yet Malaysian scientists were able to discover it within days.Contrast that with the murder of Sunanda Pushkar in Delhi where the cause of death has not been established. A forensic report concluded that she had been poisoned but her viscera had to be sent to the FBI in the US to find the cause. If the viscera had been washed before being sent nothing would be found. The forensic pathologist alleged that he had been pressured to report the death as natural. Pushkar died in January 2014 and a new government by the BJP came to power in May. One would have hoped that they would expose all the crimes committed under the Congress, but not a single criminal has gone to prison. Instead a medical board has concluded that the cause of Pushkar's death is 'inconclusive'. Which means it has been successfully covered up by two governments of two different parties. First Vijay Mallya flew unhindered out of Delhi airport with 7 heavy bags, now we understand that arms dealer Sanjay Bhandari has also taken refuge in London. His tale is even more thrilling, in that he stayed in India long enough to transfer his assets to Dubai, out of reach of our courts, and then escaped without a passport. Murders not solved, crooks escaping with all their loot and what does Modi do? He punishes the whole nation by banning Rs 1,000 and Rs 500 notes. Powers of tax officials have also been increased so that they do not have to disclose any reason to search anyone's home. Campaigning in Uttarakhand recently Modi warned the Congress that they should behave because he has dossiers on them. If he has evidence of crime it is his constitutional duty to bring the criminals to justice. Instead he is threatening blackmail. Clearly there is more than one man wearing raincoats inside that bathroom. Wonderful.

Will Donald Trump surrender to Sun Tzu?

Professor Keyu Jin, from the London School of Economics, believes that if it comes to a trade war, it is probable that China will win over the US. "A trade war would undoubtedly hurt both sides. But there is reason to believe that the US has more to lose," she writes. How exactly? China had a trade surplus of $336.2 billion with the US in 2015. So, if China is earning more then logic dictates that it has more to lose. The US will apparently lose millions jobs. "If China switched from Boeing to Airbus, for example, the US would lose some 179,000 jobs." Maybe. But Airbus is not sitting around waiting for Chinese orders. China will have to wait a lot longer for the planes to be delivered and, with choice restricted to just one supplier, will probably have to pay a lot more. "Soybean-producing regions could lose some 10% of local jobs if China halted imports." There is nothing to stop farmers switching to other crops. China will disrupt supply chains and inflation will rise in the US prompting the Federal Reserve to increase interest rates. That is definitely possible, but a strong dollar will make commodities cheaper for the US, keeping a lid on prices, while hurting China. The US will definitely suffer but it is a democracy where the Congress will not allow the president to take extreme measures, while China is an uncivilized nation where the Communist Party is supreme and ruthlessly puts down any dissent. Not only does the party crack down on any dissent, it also tortures human rights lawyers who defend protesters. Artist Ai Weiwei's lawyer has been sentenced to 12 years in prison. People suspect the charges are trumped up. While the whole world wants to migrate to the US, China is feared and hated by almost every country that has relations with it. Except Pakistan, North Korea and Zimbabwe, which has adopted the renminbi for use inside the country. Pregnant Chinese women flock to the US to deliver their babies, to get them automatic US citizenship. Would any American woman, or any woman from any other nation. want to give birth in China? China's piracy on the South China Sea on the basis of a fictitious Nine-Dash Line was declared illegal by an international tribunal in 2016. In response the state media in China labeled the US and Japan as 'eunuchs' and 'paper tigers'. That's how civilized they are. Even the friendly aid provided to other countries is a weapon to force them to accept Chinese diktats. Perhaps Prof Jin is trying to scare Donald Trump from imposing tariffs on Chinese imports into the US, using Sun Tzu's teaching,"The supreme art of war is to subdue the enemy without fighting." Ah, so.

Why stop us from using our ADH4?

Alcohol is a drug toxic to virtually every system in our bodies. So why do we drink alcohol? One reason maybe that alcohol is so easy to make. Opium, cannabis and cocaine come from special plants but alcohol is made by fermenting sugar which is ubiquitous in nature. But the real reason is that Mother Nature has given us the power to drink alcohol in moderation by giving us a special gene which makes an enzyme called Alcohol Dehydrogenase, or ADH4, to metabolise alcohol in our bodies. Some scientists think that this gene appeared 9,000 years ago but Matthew Carrigan and Steven Benner analysed genes of 19 modern primates to conclude that the enzyme appeared 50 million years ago, wrote Sarah CP Williams. Scientists speculate that the need for this enzyme arose when climate change turned forests into grasslands and ancient hominids started foraging on the ground instead of living solely in trees. Getting drunk on the ground would make them easy prey so this gene developed to digest alcohol in over-ripe fruits which had fallen to the ground, writes Richa Malhotra. Ancient ADH4 was useful to digest geraniol from geranium plants, as well as cinnamyl, coniferyl and anisyl alcohols from cinnamon, conifer and anise plants. Other primates also have this enzyme which gives them a tolerance for alcohol. Humans started brewing beer thousands of years ago. Seems that the culture of brewing beer arose in different countries independently. It was used as payment in ancient times, writes Professor Linda Raley. There are records of beer in Africa, both North and South America, Europe and in China and Japan in Asia. But not in India. Why not? In 1620, Pilgrims were forced to land at Plymouth Rock because their beer supplies were running low. and so began the US of A. Brewing beer changed the nature of yeast from that of the wild variety, genetic analysis has found. Many different beers are available in other countries but the choice is restricted in India. Why? Because of politicians. They have seen this as a means of extorting taxes from citizens, by labeling it as a sin. However, taxes are useful only if you win elections so some politicians promise to ban alcohol if elected. Which is what Nitish Kumar did in Bihar. Unfortunately for him, it backfired badly because his party, the JD(U) won 71 seats in 2015, compared to 115 in 2010, while Lalu Prasad's RJD increased its share of seats from 22 in 2010 to 80 in 2015. If taxes on beer are reduced drastically people will drink beer instead of spirits which have 6 times the alcohol content and cause more damage. Instead politicians behave like thugs and force people to travel elsewhere to have a party. No wonder we are way down on the Happiness Index. Get rid of politicians. Drink to that. Cheers.

Which is worse, crony capitalism or crony socialism?

Writing for Bloomberg, Matthew A Winkler compares the economies of neighbors, Malaysia and Indonesia. Both have problems with their people. In Indonesia the Chinese Christian governor of Jakarta is facing allegations of blasphemy, while in Malaysia loans at low interest rates to native Malays maybe creating a debt bubble. With 30 million people Malaysia always enjoyed an economic advantage over Indonesia with 250 million people. No longer. Prime Minister Najib Razak faces charges of stealing $681 from the 1Malaysia Investment Fund, or 1MDB, of the government. This was "just a portion of the more than $3 billion that was stolen from 1MDB and laundered through American financial institutions in violation of US law," said the then Attorney General, Loretta Lynch. "Unfortunately and tragically, a number of corrupt officials treated this public trust as a personal bank account." As a result global investors are shifting business from Malaysia to Indonesia. Indonesian rupiah has strengthened 26% against the Malaysian ringgit since 2014, the Indonesian economy has expanded 0.71% faster than Malaysia since 2014, the Jakarta stock exchange has gained 287% in the last 10 years, compared to 95% of Malaysia and Indonesian government bonds have given a return of 100% since 2010, compared to 30% in Malaysian bonds. If Malaysia is an example of how crony capitalism harms the economy, what about crony socialism? Nobody knows how bad the economy of Venezuela is because the government has stopped publishing figures. "The central bank stopped publishing inflation data in December 2015, and gross domestic product hasn't been updated in more than a year. The finance ministry's last report on federal fiscal accounts was in 2013," wrote Mac Margolis. "The government doesn't even pretend not to hide the homicide rate, and the poverty rate is anyone's guess." As people starve the security forces shoot to kill on government orders. That makes President Nicolas Maduro a criminal who is hanging on to power by killing protesters, substituting judges with his cronies and arresting opposition politicians. Only when the army refuses to shoot citizens will he face justice, as happened to Ceausescu of Romania in 1989. Romania used to be a communist country and the old communist party is in power in its new avatar as the Social Democratic Party, or PSD. It tried to pass a law to legitimize corruption but was soon facing angry protests by tens of thousands of protesters. News of protests in Romania has been completely blacked out in India. Not one newspaper or television channel has reported it. Why? India is a land of scams so politicians do not like protests. India is a socialist country with lots of social schemes to win elections, and lots of very rich business people who are best friends with politicians. We are blessed with both crony capitalism and socialism. So lucky.

Who will want to pay if there are no returns?

Too few people in India pay income tax, writes Ajit Ranade. "This year's Economic Survey has a telling graph, a picture that speaks a thousand words. It shows that in Norway, for every 100 voters, there are 100 taxpayers. In India for every 100 voters, we have seven taxpayers. It is as if the voters form the government, and taxpayers help fund it," he fumes. Exactly. That is how our political masters want it. Without a massive 'vote bank' of extreme poverty politicians cannot promise handouts to win elections. India is exactly the opposite of Norway, where the government provides social services for every citizen, regardless of their wealth, whereas in India taxpayers get nothing from the government. In Scandinavian countries, "The fundamental principle is universalism, i.e. in general every individual has the right to help in times of need, irrespective of factors such as income or assets." Education, healthcare and old age pensions are universal in Norway but in India the subsidies are targeted. This divides the nation into payers and recipients. The bulk of taxpayers are salaried individuals whose taxes are deducted directly from their salaries. They feel aggrieved at being forced to pay taxes while those who are self employed are evading income tax by not declaring their earnings. Salaried people are guaranteed certain protections by law. They get paid casual, annual, medical and maternity leave, while the self employed earn nothing if they do not work. Employees get a lump sum amount, called gratuity, from their employers when they retire. Employers are required to match employee contribution to the provident fund scheme which provides for retirement. The self employed have to pay for everything. The richest 1% own 58% of the entire wealth of the country, which means that the vast majority of Indians earn too little to fall in the tax bracket. About one third are laborers who earn daily wages, while 42% of chief wage earners are self employed, and of these over 90% do not earn enough to pay income tax. The income tax threshold in India is set at Rs 250,000 per annum. This is 2.5 times the annual average income of Indians, which is Rs 100,000. According to the National Sample Survey Organisation the richest 20% of Indians have an average annual income of Rs 95,000. So how to increase the tax base? Praveen Chakravarty suggests reducing the threshold to Rs 150,000 per annum, which will bring another 11 million people into the tax net. Perhaps Chakravarty has forgotten the high cost of living and high inflation rate in India. Tax collection could multiply if Indians became richer. But that is too difficult. It is much easier to declare war on boogeymen tax evaders by demonetising high denomination bank notes and then promise more handouts to the poor. Our politicians should stop continuing British practices, and become Indians. They will find solutions.

If you define dangers logically, solutions will follow.

Manas Chakravarty analyses a report published by the US National Intelligence Council, which tries to predict what the world will look like 5 years and 20 years from now. The report is pessimistic. "Global economic growth will slow, making life difficult for governments, who will come under increased pressure to deliver jobs and welfare," he writes. "Governance will become more difficult. Real wages have been stagnant in the West, and this will lead to increased populism and dissatisfaction with globalization." "Geopolitical risks will rise, as ambitious new powers such as China and Russia seek to expand their presence. Non-traditional forms of warfare, such as terrorism, will gain prominence. Environment stress will increase." The US can do nothing about it. India will suffer terrorism from Pakistan, lack of jobs and increasing pollution. However, on the positive side stock markets all over the world are booming. Jim O'Neill lists 6 reasons for being optimistic. Unemployment in the US is down, manufacturing, although a small component of the GDP, is up, inventories are down, indicating high demand, Chinese retail sales are up, South Korean trade is recovering and a survey from Germany indicates recovery for Europe. The International Monetary Fund predicts an 'explosive path' for Greece. The government debt is at 180% of GDP, will fall slowly to 160% by 2030, and then jump to 275% of GDP by 2060. The problem seems to be an inability to change with changing circumstances. The recent murder of Kim Jong Nam, half brother of the North Korean dictator, Kim Jong Un, is a typical example. The attack took place in Malaysia, but the government there seems paralysed. Why? North Korea is a failed state, surviving on Chinese handouts. If US agencies can accuse Vladimir Putin of being behind the hacking of Democratic Party emails then Malaysia should be able to determine if Kim Jong Un ordered the assassination and put out an international arrest warrant for him. What are they afraid of? China? China is the most dangerous country in the world today. It threatens all its neighbors, claims all of the South China Sea and supports rogue nations, like North Korea and Pakistan. The US has a huge weapon it is reluctant to use. China gains over $400 billion in trade from the US. Donald Trump should follow through with his promise of levying 45% tax on Chinese goods into the US. Will China make it difficult? Initially yes, but a low growth rate will make it impossible to service its huge debt and it will come crawling back. For India the choices are easy. Reduce population by linking handouts to not having children and build a fence along the border with Pakistan and lay mines so that nothing comes through. The world needs statesmen, we have knaves.

Doing nothing will not reduce inequality.

"US President Donald Trump is about to make a policy mistake," writes Professor Kaushik Basu. Trump wants to increase taxes on imports of foreign goods, restrict inflow of foreign workers, by restricting immigration, and reduce outsourcing. This will hurt countries in Latin America, Africa and Asia, but, "This is not the way to help the US working class today," he writes. The main problem is robotics and Artificial Intelligence. "From 1948-94, employment in the manufacturing sector fell by 50%, but production rose by 190%." Manufacturing based on robots and AI cost a lot to set up but running costs are very low because robots do not have salaries or medical bills, can work 24/7, without breaking labor laws, and produce perfect results every time, removing waste. That being the case US companies should be manufacturing as cheaply in the US as they do in China. So why the outcry against Trump? Because global elites have gained from the present system, writes Anantha Nageswaran. "That is, the problem is not so much that the 'global citizens' really had a trans-national and global agenda but that it was a fig leaf for for personal and narrow group aggrandizement," he writes. "Globalization of tax evasion -- elites relocate not just their production but their identities to where they are taxed the least -- is a major problem." So it is all for black money. Not much different from India, is it? Professor Dani Rodrik makes the case that a 'global citizen' has no responsibility or accountability and, hence, does not mean anything. "While some forms of targeted protection may be able to play a role in supporting US workers, neo-protectionism is not the answer," writes Basu. "And it would not just be ineffective, it would do substantial harm." How do you know? Professor Barry Eichengreen wrote that economic models are good at explaining complex problems but polices must be based on facts, not theories. Professor Noah Smith found that most of economic teaching in Econ 101 is probably wrong. Increasing minimum wage does not result in reduction of workforce in the short term and welfare payments do not increase laziness in society. Even the theories of the great Milton Friedman do not stand up fully when examined against research data. Rodrik makes the common sense suggestion that one economic model cannot fit every country. Climate, culture, political integrity and where in the world a country is situated will determine its economic growth. "Moreover, real wages have been stagnant for decades; the real median income is the same today as it was in 1998," writes Basu. The income of the poorest 20% has decreased from 1973 to 2014, while the income of the richest 5% has doubled. Surely, every reason to try something new? 

If you are not prepared to be hit don't enter the ring.

"Women are not cut out for the dirty game of politics," writes Shobhaa De. Why? "Women are up against multiple prejudices. The day they step into politics they become marked individuals," she writes. "Soon they become quasi-men themselves. They clone the worst traits of alpha male behaviour and in the bargain are neither here nor there." This is a very common mistake. As in crime, power has no gender. India can boast of many very efficient female killers. In India, politics and crime are intimately mixed, 34% of the present parliament having charges of heinous crimes, including murder, kidnapping and armed robbery, against them. To be successful in politics in India you choose a leader to follow with absolute humility, being prepared to stick the knife in when the opportunity arises. This was demonstrated by O Panneerselvam recently in Tamil Nadu. He prostrated himself in front of Ms Jayalalithaa when she was alive but led a rebellion against Sasikala. He lost, for now, but could still create problems in the future. Ms De rails against abuse faced by women which, she thinks, is unfair. Perhaps, she is not aware of the massive volume of abuse and the sheer vitriol directed towards Donald Trump from all over the world everyday. To understand men Ms De should watch the fight between Muhammad Ali and George Foreman, in which Ali gets beaten up but knocks Foreman out to win. To win a battle use whatever weapon you have. Helen Gurley Brown wrote 'Sex and the Single Girl' in 1965, in which she advises women to use sex to win against men. "Why can't a woman be more like a man? You can! You can!" she said. There is only one person at the top so be prepared to face defeat. Elections to assemblies of Goa, Punjab, Uttarakhand and UP are going on at present and the Prime Minister, Narendra Modi has been campaigning vigorously but a defeat in Punjab or UP is not going to dent his popularity, writes Aakar Patel. "He retains his great charisma and with it his popularity among a much, much broader swathe of the population than votes for his party," he writes. Every action of Modi is to draw attention on to himself and belittle his opponents, wrote G Sampath. He is an expert at convincing people that he is fighting for them and his enemies are their enemies as well. Professor Steve Coll wrote that Modi and Trump are egotists who speak directly to their supporters, who are prepared to forgive their faults and blunders, even if they suffer immense hardships as a result. In ancient times women used bizarre, often dangerous methods to enhance their beauty. Now they object at having to spend so much time in looking attractive. Perhaps, they should stop comparing with men and use men's strength against them. Men have already shown them how.

The US needs Russia, cannot tackle China alone.

Lisa Dickey has been visiting Russia for over 30 years and has written about what she found during 3 visits, 10 years apart, in 1995, in 2005 and in 2015. At her first visit in 1995, four years after the disintegration of the Soviet Union in 1991, she found the country in a terrible state. The economy was in depression, the inflation rate was over 200% and the GDP was down 30%. The new Russian ruble introduced in January 1992 at 125 to the dollar, by December 1993 had fallen to 1,247 to the dollar. It fell to 5,960 to the dollar by 1998 and in August of that year Russia was forced to default on its debt of $40 billion. After World War II the US embarked on a plan to rebuild Europe, including Germany, at a cost of $12 billion to the US, famously known as the Marshall Plan. In the case of Russia, an ally during the war, as opposed to Germany, the US chose to mock the drunken antics of Boris Yeltsin and advised shock therapy which wiped out the savings of ordinary Russians and imposed severe hardship. When Yeltsin died in 2007 the Times magazine wrote that "in the US, Boris Yeltsin will be more fondly remembered as the man who turned the menacing Russian bear of Cold War fear-mongering into a warm and cuddly creature, supine, pitiable and willing to perform in exchange for scraps". Such contempt led to the rise of Vladimir Putin. When she visited in 1995 Dickey found Russians admiring the US but when she visited next in 2005 Russia had changed. High oil prices had improved the economy so that people had a much better lifestyle. The Russian economy was hit again in 2014 when western countries imposed sanctions on Russia. But this time Russia did not take it lying down. Instead it imposed its own sanctions on the European Union, causing losses of $100 billion Euros, and on US politicians. The collapse in the price of oil in 2008 and again in 2015 hurt the economy badly. It has hardened to $53 per barrel recently. However, Putin had a popularity rating of 82% in July 2016. People blamed the West instead. Probably with justification. The war in Ukraine, following an armed coup against an elected president, engineered by the West, has resulted in a de facto division of the country, with Russia recognizing rebel enclaves as independent republics. The same happened to Abkhazia and South Ossetia, which have become independent of Georgia. All calculations changed when Russia joined the war in Syria, decisively turning the advantage towards the regime of Bashar al-Assad. The new president of the US, Donald Trump is right to call for better relations with Moscow and Putin, as opposed to the slimy trickery of Obama. China and its allies, Pakistan and North Korea, are the biggest dangers to world peace and the US will need Russian support if there is a stand-off with China. Just as vilifying Russia was a mistake vilifying Trump is an equal mistake. Respect the bear, it may cuddle again.

The market is optimistic, must know something we don't.

Regardless of all the negative factors in the economy the Indian stock market is booming, writes Manas Chakravarty. Economic growth is going to be weaker than before, prices of commodities, including oil, are rising, banks are struggling with huge bad loans, credit growth is weak, banks don't have capital to lend and so need a large amount of money for recapitalization, investment demand is down, the US could become more protectionist, the informal sector, which employs over 90% of workers, has been hit hard by demonetisation, and the Goods and Services Tax will create a lot of uncertainties in the economy, especially in the unorganized sector. But the markets remain buoyant because of its faith in Prime Minister Modi, that even the prospect of a rise in interest rate cannot dampen. Between 1 April 2014, when Modi was elected, and 10 February 2017 the MSCI index for India has risen 10.3% in dollar terms, whereas China has risen 6.9%, Philippines by 0.2%, Thailand by 1.2%, while Indonesia has fallen by 8%. Only the US has grown faster. The premium for the future one year price-earnings multiple for MSCI is 19.56% for India, compared to 13% for MSCI Asia ex-Japan. So how great is our economy? Even before the banning of Rs 1,000 and Rs 500 notes, Gross Fixed Capital Formation was negative for 3 quarters, industrial activity was negative in 8 out of 14 months and private investment is down. Exports have risen for 5 consecutive months. Total exports from April-January was $221 billion, total for the financial year is expected to be $270 billion, while imports were $307.3 billion. China exported a total of $2.15 trillion in 2015. Demonetisation was imposed for 2 reasons, one to catch people who were not paying income taxes, and so were hiding vast amounts in high currency notes, and two, to get rid of counterfeit currency, printed by Pakistan to destabilise our economy. The government replaced the old notes with new notes of Rs 2,000, which were said to be difficult to copy. Now fake Rs 2,000 notes have been found which are much better than before so that they are almost impossible to distinguish from the real ones. The direct tax department has refunded a total of Rs 1.42 trillion for the last financial year. They issued refunds to 16.2 million people, 92% of which were below Rs 50,000 each. In 2012-13 only 12.5 million people declared taxable income, so even if that figure has increased the vast majority of Indians do not earn enough to pay tax. It means that the government collects excess tax in advance and then pays huge salaries to an army of officers to refund the excess. It is good that the stock market is optimistic.

Why share in the global monetary non-system?

Professor Dani Rodrik of Harvard is not a blind admirer of globalization and free trade. Although he was born outside the US, holds dual nationality and travels all over the world, he feels that a citizen has to be part of a polity or a commonwealth. "Countries have such polities; the world does not," he writes. "Real citizenship entails interacting and deliberating with other citizens in a shared political community. It means holding decision makers to account and participating in politics to shape the policy outcomes," he says. "Global citizens do not have similar rights or responsibilities. No one is is accountable to them and there is no one to whom they must justify themselves." Which means they can and do make a lot of noise without caring for consequences. However, politicians do not get elected by the world, but by citizens of their own country and will enact policies that the people want, which will get them elected. Another Harvard professor, Ricardo Hausmann says that all politicians lie to get elected but when they act on their lies they cause real damage. Donald Trump got elected by promising to renegotiate Nafta but this trade deal may have created 333,000 jobs in the US. Free trade agreements are not as good as they are made out to be, writes Rodrik. Small countries have no bargaining power while governments of rich countries are influenced by lobbyists of powerful industries. This was evident after the financial crisis of 2008 when central banks lowered interest rates to near zero and bought bonds, known as quantitative easing, to increase lending and weaken their currencies. The previous Governor of the Reserve Bank, Raghuram Rajan repeatedly complained about this competitive devaluation by rich countries which resulted in a flood of money into emerging market economies, making their currencies overvalued and putting their them in danger of sudden fall if the current reversed. This happened to the rupee in September 2013 , when Federal Reserve Chairman, Ben Bernanke talked of tapering off quantitative easing, known as 'taper tantrum'. What has globalization achieved? Just 8 billionaires hold as much wealth as the poorer half of the entire world population, that is 3.6 billion people. The difference in earnings between white and black in the US has reached a level not seen in 1950. While condemning central banks for their "global monetary non-system", why do people criticize Donald Trump for wanting to ring fence the US economy? Jochen Bittner wrote that citizens of the US and Europe are angry because of the unfair system. Advising the poor to eat cake is very unwise. 

Something stinks, we dare not say what.

Two days back the Supreme Court convicted VK Sasikala, friend and confidante of former Chief Minister of Tamil Nadu, Jayalalithaa, in the DA case, as it is known in the media. DA usually means Dearness Allowance, which is a handout given to government officials in addition to their huge salaries, so that they turn up for work, and which keeps rising inexorably every month. However, here it means Disproportionate Assets, a term used to describe loot, bribes and extortion earned by politicians and civil servants, as a result of their power. The story goes back to 1996 when Subramaniam Swamy filed a case against Jayalalithaa that she had amassed a fortune of Rs 666.5 million as Chief Minister of Tamil Nadu, from 1991-1996. On 7 December, 1996 Jayalalithaa was arrested, and then the circus began, as is usual in India. By August 2000, the prosecution had examined 250 witnesses, but still had 10 more left. In May 2001 Jayalalithaa became chief minister again but in September she was forced to resign. No problem. Her conviction was set aside and she became chief minister again on 21 February, 2002. The case was transferred to Karnataka by the Supreme Court in 2003, because a fair trial was not possible in Tamil Nadu. Did the Supreme Court punish judges in Tamil Nadu? No. BV Acharya appointed Special Public Prosecutor on 19 February, 2005, resigned on 12 August 2012. If he had problems with the case why did he drag on for 7 years? One Bhavani Singh was appointed in his stead but after a few months the Karnataka government removed him. The Supreme Court reinstated him in September 2013. On 14 March, 2014 a Special Court fined Singh one day's wages for dragging his feet and on 27 September 2014 the court convicted Jayalalithaa and 3 accomplices, but on 11 May 2015 Karnataka High Court acquitted all. On 5 December 2016 Jayalalithaa died. At last, after 21 years of circus we get a verdict. The Supreme Court said that the Karnataka High Court got its math wrong. Why? If the judges of the high court were so spectacularly wrong what action will be taken against them? In a belated show of strength the Supreme Court has asked Sasikala to go to jail immediately. Will she stay in jail? Politicians never stay in jail, whatever their crime. Lalu Prasad Yadav was convicted of theft and sentenced to 5 years in prison. He is out on indefinite bail since 2013. Dragging cases on for decades is the worst form of injustice. What are the judges going to do about it? Who gains from this blatant abuse of the law? Lawyers. Senior lawyers, who defend these criminals, charge Rs 500,000 to Rs 1.5 million per hearing. Every postponement means money. Appear for a few minutes, ask for postponement, judge agrees without asking why he is not prepared, pocket millions and go home. Are we wrong if we get a bad smell?

Banks have lots of money, but no one wants to borrow.

"The monetary policy committee (MPC) of the Reserve Bank of India (RBI) decided to leave the policy rate unchanged in its meeting last week," wrote V Anantha Nageswaran. Not just that, the MPC changed its bias from accommodation, which means it would be inclined to cut rates, to neutral, which means it could go either way. Naturally, there was huge disappointment, especially after retail inflation came in at 3.17% in January, lowest for 5 years. This is mainly due to a fall of 15.62% in vegetable prices and a 6.62% fall in the prices of pulses. Prices of all other food products went up. Soon after wholesale inflation came in at 5.25%, highest for 2.5 years, due to higher prices of fuel and manufactured goods. Last year wholesale inflation was negative while retail inflation was high, this year it is the opposite. It is probably impossible to control inflation in India. Why? Because wages increase by an average of 10% every year, which adds to manufacturing costs, and rents go up by 10% every year, which add to household expenses and result in demands for higher wages. The Supreme Court had suggested a 10% increase every 3 years but no one is listening. All politicians and business fellows passionately believe that low interest rates stimulate economic growth, regardless of inflation, consumer demand or financial savings. There was great jubilation when the new Governor of RBI cut rate to 6.25% in October last year, the lowest since 2014. So why did the MPC hold back this time? As a result of demonetisation. "Thanks to the flood of deposits that had come into the banking system, banks had already dropped their lending rates on loans and mortgages. Hence, regardless of what the central bank did, financial conditions had eased already. So, a rate cut by the MPC would have been a mere formality. Why waste a bullet when the shot has already been fired by the commercial banks?" wrote Nageswaran. Inflation expectations have also fallen in India. A RBI survey showed that people put the rate of retail inflation at 6.5%, double the actual rate, and the expected annual rate at 8.3%. Just a year earlier people put inflation rate at 16%. The Goods and Services Tax will be implemented from July this year. That will add to prices of goods produced by the informal sector, leading to the shutdown of many units, with a jump in unemployment. Economic reforms instituted in 1991 were supposed to boost manufacturing but the share of the sector in our GDP fell from 16.41% in 1989-90 to 16.2% in 2015-16. Demand for electricity fell in the last financial year and demand for fuel oil has fallen to lowest level in 13 years. If output has fallen prices could rise later. That is why the RBI decided to wait. It does not know.

How many forms of financial repression?

The Statutory Liquidity Ratio, or SLR, in which banks have to hold 20.5% of Net Demand and Time Liabilities, or NDTL, is a form of financial repression, writes Russell A Green, formerly a US Treasury atache to India. SLR is a portion of total deposits by customers that banks are required to hold in gold or government securities. To make up for shortfall in revenue the government needs to borrow from the market, which it does by selling bonds, through the Reserve Bank. This year's budget projects total borrowing at Rs 3.48 trillion. Banks buy these bonds as part of their SLR obligations. When interest rate falls, as it has done, from 8% in January 2014 to 6.25% today, prices of bonds go up. Which means that banks in India are sitting on huge capital gains. "Indian banks are sitting on a gold mine. They hold ridiculous amounts of government bonds, and three years of falling rates have increased the value of these bonds by about 10%," writes Green. How much money is that? "If my assumptions are correct, banks are sitting on as much as Rs 2.3 trillion in unrecognized capital gains," calculates Green. In December, the Reserve Bank warned that Gross Non-Performing Assets, or GNPA, as bad loans are called, will rise from 9.1% in September 2016 to 9.8% in March 2017 to 10.1% in March 2018. GNPAs of public sector banks could rise to 12.9% by March 2018. "Credit rating agency Fitch determined they would need Rs 6 trillion from 2017-19." If banks sold these bonds and realised their capital gains they could clean up their books and could increase lending for productive investments. "Despite its name, the SLR has almost no prudential rationale. It represents financial repression, ensuring captive market to lend to the government," writes Green. That means the government is forcing banks to buy its bonds at higher prices with the money we have deposited in banks. Why? Because of wasteful government expenditure. Capital expenditure, which is productive spending on infrastructure, was 40% of the budget in 1970s, 30% in 1990s, and has dropped to just 12% now. By contrast wasteful Revenue expenditure, which is made up of salaries, handouts and interest payments on government debt, has increased to 88% of total spending. Rs 2.61 billion has been set aside for ministers' pay and travel costs.  Another financial repression encouraged by the government is mis-selling of life insurance policies. Rs 5.1 trillion of life insurance premiums are invested in central government securities and another Rs 10 trillion in state government papers. People lost over Rs 600 billion in 2012-13 in lapsed policies. Forcing the RBI to maintain low real interest rates is a recurring form of financial repression. Our fellows are expert at repression. Good we don't know.

It was predicted, but can he deliver?

In an attempt to poke both the US and Japan in the eye, during Prime Minister Shinzo Abe's visit to the US, North Korea test fired an intermediate range missile into the Sea of Japan. The missile used solid fuel and was deliberately fired high so that it dropped short of neighboring countries. Japan and the US issued ritual condemnation of the missile launch but both know that there is little they can do to stop North Korea continuing with its nuclear and ballistic missile programs. Eventually it will develop an intercontinental missile capable of reaching the east coast of the US, across the Pacific Ocean. Pakistan has reacted angrily after the US refused a visa to the deputy chairman of its senate for links with terrorists. Hafiz Saeed may have been labeled a terrorist by the United Nations but he is roaming around freely within Pakistan. Both North Korea and Pakistan are failed states but are able to survive for one reason only, and that is support by China. Sanctions imposed by the West are meaningless because North Korea shares a long border with China, with open trade between the two countries. China not only supports Pakistan but also protects its terrorists at the United Nations Security Council. Having hinted that he would bargain on the 'One China Policy', Donald Trump backed down in a phone call to the Chinese President, Xi Jinping. We have to wait to see if he imposes 45% tariff on import of all Chinese goods, as he promised during his campaign. There is ferocious opposition to Trump within the US. Business leaders have denounced his order to suspend all visits to the US by citizens of 7 countries for 3 months, in order to reduce chances of terrorist attacks. The rise of Donald Trump was predicted in a 1998 book by a philosopher named Richard Rorty, who died in 2007. "Members of labor unions, and unorganized unskilled workers, will sooner or later realize that their government is not even trying to prevent wages from sinking or to prevent jobs from being exported. Around the same time, they will realize that suburban white-collar workers -- themselves desperately afraid of being downsized -- are not going to let themselves be taxed to provide social benefits for anyone else," he wrote. "At that point something will crack. The nonsuburban electorate will decide that the system has failed and start looking for a strongman to vote for -- someone willing to assure them that once he is elected, the smug bureaucrats, tricky lawyers, overpaid bond salesmen, and postmodernist professors will no longer be calling the shots." By electing Trump the US has rejected neoliberal policies of free market, globalization and open borders. The cacophony against him is being orchestrated by people who benefited from shifting jobs to China and importing cheap goods into the US. They do not want taxes on Chinese goods, let Americans suffer. Is Trump strong enough to take them on? We shall see.

Trump predicted breakup of the EU. Will it happen?

In all the hysterical frenzy against Donald Trump Europe has slipped out of the news, yet the US is not where most of the problems are, the main problems are in Europe. The US economy is doing very well. In 2015, it had a GDP of about $18 trillion, GDP per capita is $55,868, economic growth rate was 2.4% of GDP, unemployment rate has dropped from 8.9% in 2011 to 5.3% in 2015, public debt was 106% of GDP, retail inflation was 0.7%, fiscal deficit -2.4% and current account deficit was -2.7%. It had a negative trade balance of -$759.3 billion, which is a huge number, but the US can print dollars to pay its bills. The US is protected by 2 oceans to its east and west and by friendly nations to the north and south. Europe is almost the opposite. The UK voted to leave the European Union in a referendum, known as Brexit. Prime Minister, Theresa May will trigger Article 50 in March, which will start negotiations for Britain to leave the EU in 2 years. The UK economy has not done too badly as the weak pound increased exports and tourism. The pound has recovered somewhat following the release of the latest trade figures. Some are predicting that the British economy will continue to grow this year although the direction of the economy will be known once talks start. France is to hold elections for president in March and April and so far there seems to be no clear winner in sight. So far opinion polls suggest that Marine LePen, who is against EU, will win the first round of voting. Francois Fillon is losing votes because of accusations that he employed his wife on a huge salary, paid by the state, when she did nothing. Emanuel Macron, who was expected to win the second round, is facing accusations of an extramarital affair. Whether the French will dismiss these allegations with their famous Gallic shrug remains to be seen. Angela Merkel could lose her reelection bid later on in the year because of her migrant policy. In a u-turn Merkel is proposing to pay migrants to return to their home countries. On the other hand Merkel has been very firm on restructuring Greek debt. The International Monetary Fund warned recently that Greece will not be able to repay its debt and will have to get out of the common currency, the Euro. According to the IMF Greece's debt is at 180% of GDP, will fall slowly to 160% of GDP by 2030 and then rise explosively to 275% of GDP. Unemployment in Greece is at 23%. Analysts are even betting on Italy having to leave the Euro, as public disenchantment grows. The Eurozone economy is doing well at present but the future is uncertain. Some countries, such as Hungary, are against allowing migrants to settle there. The Soviet Union fell suddenly. Will the EU do as well? 

Romania should take lessons from India.

Last month the government in Romania passed an ordinance at night to decriminalize cases of corruption of government officials in which the financial damage is less than $47,800. The government claimed it was to reduce overcrowding in jails. "We took a decision in the government and we are going to press ahead," said Prime Minister, Sorin Grindeneau, as tens of thousands of people came out in freezing cold to protest the decision. "The PSD won elections [in December] with a huge vote. The government's power is legitimate," said Liviu Dragnea, leader of the left wing Social Democrat Party, or PSD. The protests continued and a few days back Grindeneau vowed to withdraw the ordinance and send it to parliament for debate. Liviu Dragnea will benefit from the decree because he is banned from becoming prime minister, having been sentenced to 2 years in prison for vote rigging. Crooks become legitimate by winning an election, that is the biggest charm of democracy. By now people had lost faith in the government so protests continued. After its bluster the government withdrew the ordinance in a humiliating climb down. The Justice Minister has paid the price by having to resign. But the protesters are vowing to continue because they believe that the government will bring the  decree back quietly after sometime. Romania should have learnt from India. On 8 November, at 8 PM, the Prime Minister Narendra Modi banned all Rs 1,000 and Rs 500 notes. He couched it as a fight against black money, which suddenly turned every citizen into a crook, because everyone carried these notes, for daily shopping. He has turned himself into a crusader, fighting for the innocent poor against the crooked rich, promising more handouts, as all other parties have been doing since independence. The old 'divide and rule' of conquerors and handouts for the poor, practiced so effectively by the Congress for decades. Indira Gandhi coined the phrase 'garibi hatao' in 1971, which means 'banish poverty' which is being used by Modi in 2017. So successful has this been that India proudly hosts the largest number of poor people in the world, 15.2% of whom are undernourished, or starving. Strangely not one politician has been caught with black money, nor any of the fake political parties, formed to launder black money. If Modi really wants to get rid of corruption all he has to do is pass a law to finish all cases within 2 years and no bail for politicians. A 105 year old man was in jail, while former minister, Sukh Ram, caught red-handed with bribe money has been granted bail because he is 86 years old. Romanian politicians should take tuition from our lot. Proclaim every act, however sly, as for the poor and ask judges to drag cases on for years. That's the way to do it.

Has the general forgotten what his predecessor did?

Gen David H Pitraeus was not only a highly decorated 4 star general in the US army but is a scholar, having obtained a Master in Public Administration and a PhD in International Relations from Princeton University, and has traveled to many countries. The long period of peace and prosperity in the world since World War II is because the US "adopted a foreign policy that sought to protect and, where possible, promote freedom abroad, along with human rights and rule of law". The general forgets the long history of US support for dictators, some of them like Augusto Pinochet, Francois Duvalier and Ferdinand Marcos were very unsavory characters. The success of the international order was due to America. "The extent of that success can be seen when we compare the first half of the 20th century with the second half of that century -- a period that witnessed the longest stretch without a great-power war in centuries; the most dramatic expansion of human prosperity in history; and the spread of democracy to every inhabited continent on the planet," he writes. This period was also the most dangerous in history, a tense standoff between the US and the Soviet Union, known as the Cold War, where war was impossible because of the doctrine of 'mutually assured destruction, with nuclear weapons. Just as absence of argument is not love, so absence of war is not real peace. But the world is changing. New revisionist powers, like China, Iran and Russia have emerged. "In particular, we see several countries -- including China, Iran and Russia -- now working to establish a kind of sphere of influence over their respective near-abroads, which include areas of vital strategic importance to the US, and where we have allies and partners to whom we are bound by shared interests and values," he writes. Trouble is that these allies include Turkey, a member of Nato and ruled by an authoritarian Erdogan, Saudi Arabia, which has been financing Sunni terrorism and Pakistan, which is still the training ground for all terrorists in the world. However, the continuing hostility to Russia is surprising. The cold war against the erstwhile Soviet Union was because it was a communist country, but today's Russia is a democracy. Flawed maybe, but still a democracy, unlike China which is a communist dictatorship. Russia was an ally during World War II and paid the highest price in casualties, 11 million soldiers killed or missing and 7-20 million civilians killed. Yet after the collapse of the Soviet Union the US and Europe did not come to Russia's aid. Pitraeus has forgotten how Gen Douglas MacArthur actively protected Emperor Hirohito from war crimes trial. Japan is a firm friend of the US to this day. The Marshall plan rebuilt Europe, including Germany, which staunchly supports the US. Those people had vision. Today's leaders are small minded and vilify Putin instead of taking the blame for missing the opportunity of making Russia a firm friend. China is the biggest danger. The US needs Russia.

If India is one country why are some states lagging behind?

While states in the US are remarkably similar in earnings for citizens there is enormous divergence in earnings of people in different states in India, write Praveen Chakravarty and Vivek Dahejia. They took the 12 largest states in India which together account for 85% of India's population and 80% of the country's GDP and compared per capita incomes over the last 3 decades. They found that rich states have raced ahead while poorer states have stagnated. "The average Tamilian today earns four times more than the average Bihari. Just tree decades ago, the average person in the then richest state, Maharashtra, earned less than twice the average person in the then poorest large state Bihar. In another decade from now, it is likely that the per capita income of the richest state will be more than four times the per capita income of the poorest state" they write. What explains this disparity between citizens of rich and poor states in India? According to economic theory people will migrate from poor areas to rich ones in hope of higher incomes. It maybe difficult for a Hindi speaking Bihari to move to Tamil Nadu, because of language problem, but the Economic Survey 2016-17 shows that migration between states is robust. Investment should be attracted to poor areas where land and labor are cheap but lack of trained manpower would be a steep hurdle. The pictures of cheating in exams in Bihar were a serious setback. A 17 year old girl who came first in her group was found to know nothing. How was it her fault if her father paid examiners to mark her papers? Bihar has the highest fertility rate, highest maternal mortality rate and the lowest literacy rate in the country. UP is not far behind. Naturally, rates of serious crimes, such as murder and rape, is among the highest in Bihar. Who will want to invest in a state where employees, or their families, could be kidnapped for ransom? Conviction rate for serious crimes is 77.8% in Kerala,while it is a miserable 10% in Bihar. West Bengal is not far behind with 11%. Historian Ramachandra Guha wrote that attitudes among people in UP, compared to those in Bangalore, were different because the state is negligent in providing essential services. Thus, the 3 most lucrative industries in Kanpur are producing bottled water, providing security guards and installing generator sets, all being services which should be provided by the state. The divergence in per capita incomes between states really took off in 1992 after the economy was liberalized. Before that investment was driven by the government which sought to equalize all states but after liberalization private enterprise boomed and they went where they could find trained manpower and had a big market. So what happens when the Goods and Services Tax equalizes indirect taxes across all states of India? Will the richer states race away much faster? We shall see in a few years. 

Should we not be treating the real disease?

Namita Bhandare writes about the debate between abolitionists and activists in how to tackle the problem of prostitution. She starts with the story of an American woman, Dee Clarke, who is "three-quarters black and one quarter Native American". Clarke was trafficked at the age of 12 years. "They beat the crap out of me. Then they showed me how to turn tricks. How to make men feel great. How to wear make-up. I was 12. Hell, I didn't even have a full growth of pubic hair," said Clarke, speaking at the Last Girl First Congress in New Delhi. Terrible heartbreaking story. Prostitution is not illegal in India but pimping and soliciting are. Some women are forced into this trade by poverty, some are trafficked. Thousands of women from other countries are trafficked into India. Perhaps, a growing economy means that more Indians can afford to indulge their fetishes. How do you stop it? In 1999, Sweden passed a law that passed the responsibility on to men who pay for sex. Norway, Iceland and Canada have followed suit. New Zealand and the Netherlands have decriminalized sex work, while states in the US are trying to educate young men against paying for sex. But, transferring the blame on to men means that women are not responsible for their actions. Feminism is based on sexual freedom for women, which means women able to have sex for pleasure with any partner of their choice. Women have claimed that the right to abortion is an extension of their right over their own bodies. In Britain 'dogging' is practiced openly. Pornography, in which women are paid for having sex in front of a camera is legal almost everywhere in the world. Watching pornography is legal in India, but producing it is not. Even the most ardent feminist would probably accept presents from male friends. So, what if a woman demands money for the use of her body? "Yes, for some women there is no choice," says Bishakha Datta, executive director, Point of View,"But what we're seeing in India is that for many women -- daily wage construction workers for instance -- selling sex is a rational economic choice." "There are thousands of women seeking to enhance their income through sex work," said Meena Seshu, general secretary of Sangram, a Sangli based NGO. "The activists see voluntary sex work as potentially empowering; it could place women at the head of their households," writes Bhandare."The abolitionists say everyone in the trade is a victim of patriarchal exploitation." We should pay attention to Dee Clarke who was actually trafficked. "If you grow up in extreme poverty, you get exploited. You do not have a choice," she says."Even if you're not trafficked, there is no conscious choice ever." Poverty is a cancer that eats into society. Sadly, it is also a trillion dollar business. 

The good old days are always in the past.

Salman A Soz writes that having staked his reputation on demonetization of high value notes, Prime Minister Modi has become a prisoner of 'sunk cost fallacy'. "Individuals become victims of the sunk cost fallacy when they persist with a task to which resources have been committed even after evidence emerges that the task is unlikely to be successfully completed," he writes. Soz has worked with the World Bank and so must know his economics, but he is a spokesman for the Congress and so will probably see everything that Modi does with a jaundiced eye. Most of the cash in circulation is back in banks and it will take many years to extract taxes on dubious deposits. "Worse, evidence emerged of an economic slowdown and job losses in the informal sector. The poor appear to be worst hit," he writes. True. "After casting demonetisation as a 'war' against the 'corrupt' he asked people to make sacrifices in the national interest. The government's methods became increasingly coercive and desperate." 74 notifications issued over 50 days, to frighten and coerce people, was a sign of the government's desperation. Abhinav Rajput and Prawesh Lama set out to see if Modi has delivered on his campaign promise of "achhe din", which means 'good days'. They find that retail inflation has fallen, millions of people have opened bank accounts and many economic reforms have been cleared. On the negative side only 1,35,000 jobs were created in 2015, when we need to create over 10 million jobs every year, and farmers are suffering as prices have crashed because there were no notes to buy their produce, this when farmers were hoping for some decent earnings after 2 years of drought. Ritesh Jain writes how farmers are suffering in Karnataka and Chinese smartphone handsets have captured 46% of the Indian market, from local manufacturers. Milind Murugkar wrote about the silent suffering of farmers in Maharashtra In addition to distress in agriculture demonetisation may sound the death knell for many units in the informal sector which function on cash, resulting in massive job losses. Rohit Prasad employs game theory to suggest that Modi is looking for absolute power, his success will depend on the level of Nash Equilibrium acceptable to the people. Srinath Raghavan insists that demonetization is a form of central planning, which was so thoroughly discredited by Ludwig von Mises and Friedrich von Hayek. Modi is claiming to have purified India from the evils of corrupution, like Xi Jinping is doing in China. However, it is not all bad. Writing for Bloomberg, Narae Kim finds that Modi has more than doubled the number of toilets and improved maternal and child health substantially. Days are never good when you are living through them, they are always the good old days.