Everything is interconnected.

"Fiscal push is needed now, not later," wrote A Ranade. "India's quarterly GDP (gross domestic product) growth declined for the sixth consecutive quarter in the three months ended 30 June. Since the first quarter of last year, growth rates have been 9.2%, 7.9%, 7.5%, 7.0%, 6.1% and 5.7%." Why is the rate of growth falling? "Private investment spending (as evidenced by fixed capital formation) is growing barely at 1.6%. Exports have grown only about 1.2% last quarter. Consumer spending growth, normally a reliable and consistent driver, has dropped to 6.6% from 8.6% a year ago. Even government spending which grew at 20% last year has slowed down." So, what is to be done? Ranade recommends increased government spending and allowing fiscal deficit to rise beyond the target of 3.2%. That should be easy, just borrow from the market and spend. Sadly, others are watching. "The downside of of this fiscal policy is a possible threat to India's international rating." India's rating is just above junk status and Moody's has warned that government debt at 67.5% of GDP, although better than 84.7% in 2003, is still too high. The Prime Minister wants a BRICS credit rating agency as a counterbalance to western agencies, which will presumably be more sympathetic. Fortunately, other BRICS nations were unenthusiastic. Indian politicians believe that the national exchequer is personal property to do as they wish, and this Prime Minister suddenly withdrew all high value notes on 8 November last year, on a personal whim, so restraints by foreigners is a blessing for hapless Indian citizens. Our foreign exchange reserve is over $400 billion for the first time. Why? Because foreign investors have poured $20 billion into our stocks and bonds this year. If western agencies reduce us to junk they have a mandate to sell out, regardless of what any BRICS agency says. So what? So much forex has made the rupee stronger. The "Strong rupee is hurting Indian industry," wrote Ranade. A strong rupee makes exports too expensive and people prefer to buy cheap imports, thus hurting local manufacturing. So, it should help the economy if the rupee falls? True, but there is a little problem. Our cost of importing oil rose from Rs 4.16 trillion in 2015-16 to Rs 4.70 trillion in 2016-17. The government adds Rs 48 in taxes on every liter of petrol we buy at the pumps. Already the price of fuel is beginning to hurt and if the rupee falls the price will jump. The government will then have to either lower taxes, which will push the deficit too high, or allow fuel price to increase, which will cause food prices to shoot up. Definitely not the way to win elections.