Army and cricket do not go together, Imran will find.

Former Pakistan cricketer Imran Khan's party won 115 out of 270 seats in parliament in elections held in Pakistan last month, not an absolute majority, but enough to form a government as the party with the largest number of seats. His victory has been contested by every other party as flawed, because of interference by the army. "He (Khan) is the army's man. He is expected to do what the Pakistani army tells him to do," said former Indian High Commissioner to Pakistan G Parthasarathy. "They will continue with the proxy war. They will continue to create disturbances in Jammu and Kashmir. I do not think there will be any improvement in the relationship between the two countries," said former Army Chief D Kapoor. Meanwhile, a high court judge in Pakistan claimed that judges are controlled by the Inter-Services Intelligence (ISI). "Today, the judiciary and media have come in the control of "Bandookwala" (army). Judiciary is not independent. Even the media is getting directions from the military. The media is not speaking the truth because it is under pressure and has its interest." For the first time people are blaming the army openly in Pakistan. "No one used to blame ISI directly," said ZH Satti. "Not even the prime minister. But the army is losing popularity all over Pakistan, not only in Punjab." The reason for open criticism of the army maybe the economy. Pakistan desperately needs to raise $20 billion, including $12 billion from the International Monetary Fund, to meet its obligations. Pakistan has foreign exchange reserves of only around $9 billion. Its only friend China advanced a loan of $1 billion to tide over the crisis. This is dangerous for India as Pakistan is becoming a colony of China which wants to extend its hegemony all over the world. Yet, it was all so different when Imran Khan was Pakistan's cricket captain some 40 years back, wrote S Dhume. "At the time, Pakistanis drove better cars than Indians. Rumour had it that there stores sold real ketchup, not the tasteless pumpkin mush that we made do with in India." "In the 1950s and 1960s Pakistan enjoyed robust economic growth and Western accolades" and "South Korean experts would visit Islamabad to learn about development". What we must learn from Pakistan is that "in the journey of a country one or two good decades mean very little". On the one hand, the world should engage with a civilian government, on the other, that will legitimize an election doctored by the military, wrote M Sharma. It is our bad luck to have such terrible neighbors. We have stopped playing cricket with them. May they live in interesting times.

What if its much more than what we are told.

Most people are content to leave inflation, output gap and monetary policy in the hands of experts, wrote M Chakravarty. But, "In the seventies, one school of thought believed that inflation was a consequence of class conflict, or at least conflict between different sections of society for a share of the economic pie." Inflation is a result of various sections of society claiming a share of the economic pie, said James Tobin. "The major economic groups are claiming pieces of pie that together exceed the whole pie. Inflation is the way that their claims, so far as they are expressed in nominal terms, are temporarily reconciled." Tobin recommended a tax on short term international financial transactions to be used for redistribution to the poor. Unfortunately, politicians tend to twist these suggestions for their own purposes. India has a Securities Transaction Tax on sales of shares and mutual funds within Indian markets. During the Congress government from 2009 to 2014 "the competing claims of various sections of the population were all accommodated by the government in a please-all policy. The result was a steep rise in prices." Though crude oil prices were high, "neither fiscal nor monetary policies were tightened in response, nor were subsidies pruned. On the contrary, the government stepped up expenditure, but lacked the guts to tax the rich to pay for the extra spending." Is inflation good or bad? Rising prices mean a falling value of the currency and since the rich have more wealth they would lose more, while the poor gain through higher wages. But food and beverages have the highest weight in India's consumer price index, or CPI, and the poor spend a greater proportion of their earnings on food. That maybe why the Congress lost so heavily in 2014. Retail inflation increased to 5% in June but core inflation, which discounts food and fuel, grew by 6.4%. The rupee has depreciated against the dollar this year and may fall to 71 against the greenback. The rupee was equal to the dollar in 1947 and has fallen to 71 in 71 years of independence, which is a devaluation of around 6% per year. During this period the average inflation in the US has been in excess of 4%, so in exchange terms our inflation has been in excess of 10% per year, much, much higher than we are told. This is important because manufacturing constitutes a mere 17% of GDP and so we have to import virtually everything we use. Which means a the weaker the rupee the higher the prices we pay. We have to import 80% of our oil needs even though with 7517 km of coastline we have explored less than 25% of sedimentary basins. Inflation maybe class conflict. Politicians are the winners.

Poor mothers, why bring them into it?

The exchange rate of the Iranian rial against the dollar plummeted to 100,000 yesterday. "The unofficial rate stood at 102,000 by midday, according to  Bonbast, one of the most reliable sites for tracking the Iranian currency." "The rial has lost half its value against the dollar in just four months, having broken through the 50,000-mark for the first time in March." "The Iranian government attempted to fix the rate at 42,000 in April and threatened to crack down on black market traders." But, this did not stop the currency from falling, as even banks refused to exchange dollars at the official rate. This is because the US pulled out of the nuclear deal in May. "The US is set to impose its full range of sanctions in two stages on August 6 and November 4, forcing many foreign firms to cut off business with Iran." When the currency falls imports become more expensive. The Central Bank of Iran put the Consumer Price Index at 10.2% in the twelve months ending July 22. However, Prof Steve Hanke of Johns Hopkins calculates that the annual rate of inflation at 151%. "Averages never indicate the facts. And what year is the base year is also an important criterion," said Prof M Gholi Yusefi at Allameh Tabataba'i University. "However, I think Hanke's statistics are more accurate, because most of the goods in Iran are imported from abroad and are therefore influenced by the exchange rate. Exchange rate affects even non-commercial goods such as taxi fares. Therefore, the exchange rate index is more accurate to assess the inflation rate." Prof M Pazouki at the same university was enraged. "No intelligent economist considers the inflation rate in Iran at 150%, as the main needs of Iranian households have not increased in recent months. So, I think this talk is more of a psychological warfare carried out by the enemies of Iran." But, Iran is also using psychology. President Hasaan Rouhani promised that Iranians will unite against aggression and "will certainly defeat America". "Don't play with the lion's tail, this will only lead to regret. The Americans must understand well that peace with Iran is the mother of all peace, and war with Iran is the mother of all wars." Supreme Leader Ali Khamenei promised to block all oil shipments through the Strait of Hormuz if Iran's exports are blocked. Saddam Hussein also promised "the mother of all battles". Unfortunately for him this mother resulted in his death. While all this is going on Israel and Saudi Arabia are quietly becoming friends and both have a hatred for Iran. Israel actually managed to steal Iran's nuclear secret from a warehouse in the outskirts of its capital Tehran. A "mother of all wars", with the US, Israel and Saudi Arabia against Iran and its proxy militia, such as Hezbollah, with possible help from Hamas and the Muslim Brotherhood, looks increasingly likely. What happens to the price of oil if that happens?

India is used to travelling on the "dirt road".

India levied tariffs on imports from the US in retaliation for US tariffs on steel and aluminium exports from India to the US. Although this was forced on us the worry is that, "Internally, bureaucratic forces have regrouped to return India to import substitution," wrote Prof A Panagariya, who was Vice Chairman of Niti Aayog for two years. "Despite repeated assertions that 'Make in India' is about making for the world, in reality, it is the 'Make in India for Indians' view that is winning." In fact, customs duties were increased in this year's budget, much before Donald Trump got into the act. The reforms in 1991 were to end "import licensing on all products other than consumer goods", followed by "complete dismantling of import licensing regime in 2001 and a decline in the average industrial tariff from 113% in 1990-91 to 12% in 2007-08". The results were impressive. "Between 2003-04 and 2011-12, India's GDP grew 8.2% annually leading to a massive fall in poverty", "imports of goods and services expanded from $85 billion in 2002 to $642 billion in 2011-12", while exports and remittances expanded "from $92 billion to $518 billion over the same period". "Sadly, our current turn to import substitution threatens to return us from the turnpike on which we have been travelling all these years on to the dirt road." This is a frantic attempt to increase jobs before next year's general elections. Indian manufacturers have nearly lost the smartphone market to Chinese and Korean companies. While Samsung is to set up a new factory in Noida to make 120 million units in the next few years, the share of Micromax dropped from 16% of the market in the last quarter of 2016 to 5% in the last quarter of 2017. Indian manufacturers have thrown in the towel and are looking for cheap Chinese products which they can rebrand and sell in India. Indian leaders believe that they can force people to do what they want, wrote Prof S Rajagopalan. Jawaharlal Nehru tried central planning, Indira Gandhi nationalized banks and then proclaimed the Emergency to enforce her beliefs, and Prime Minister Modi has "the flawed belief that directing people in a way that is inconsistent with their preferences and plans leads to superior results". The Right to Education Act resulted in falling standards as small private schools shut down and teachers had no incentive to teach because children could not be failed. Fees for middle-class children have shy-rocketed to compensate for 25% of seats reserved for children from poor families. Have they learnt? Modi is to force private hospitals to provide treatment at much lower costs to over 500 million poor people. Middle class people will be unable to afford healthcare as hospitals increase charges to compensate. You can't win elections without pleasing the vote bank. Even if we go back to the "dirt road". 

'Vicious' is the only way they know.

"For the last quarter-century, growth in China has been remarkably stable," wrote N Smith. Growth has never dropped below 6% officially, and there has definitely never been a recession. The US and other developed economies have gone through numerous recessions. There are 3 theories to tackle a recession. Fiscal stimulus, or increased government spending, monetary policies, which are lower interest rates and quantitative easing if necessary, or doing nothing. China used fiscal and monetary policies for short duration, but "In addition to spending more, China also directed banks to lend lots more money. The World Bank estimated that increased bank credit represented 40% of China's stimulus. Much of the lending was done by China's four large state-owned banks. The money went to infrastructure, real estate and all kinds of corporate projects, many of which were carried our by the country's state-owned enterprises." But if banks are owned by the state then lending by banks becomes part of government spending or fiscal policy. The difference probably is that the government has to borrow from the market by selling bonds whereas banks are using money deposited by savers. The Chinese have the highest rate of savings in the world, at 46%. So, instead of social security, China is creating employment for its people by lending money from government banks to government companies to create infrastructure. That must be a much more productive use of money? A study showed that "more than half of China's infrastructure investment has destroyed economic value". There are "hundreds of deserted cities across China where construction has ground to a halt", wrote S Chao. Enter Donald Trump. A senior Chinese government official predicted that hundreds of its companies may go bankrupt due to tariffs imposed by Donald Trump. "It's hard to predict how this trade war will develop and to what extent," said Du Wanhua. "But one thing is sure: if the US imposes tariffs on Chinese imports following an order $60 billion, $200 billion, or even $500 billion, many Chinese companies will go bankrupt." In an indication of government thinking Premier Li Keqiang said recently that "fiscal policy should be more active". The International Monetary Fund warned that "a reversion to credit-driven stimulus would further increase vulnerabilities that could eventually lead to an abrupt adjustment". China's total debt has risen from 141% of GDP in 2008 to 256% by mid-2017. While household and governments debts are manageable, corporate debt is 163% of GDP. China retaliated to US tariffs by imposing tariffs on soya bean imports from the US to specifically hurt farmers who support Trump. "They are being vicious in what will be their failed attempt. We were being nice -- until now!" said Trump. China is never nice to India so a collapse of its economy will make things more equal. We live in hope.

Difficult to change when you are so old.

Resolution professionals, or RPs, "are appointed by courts to revive or wind down delinquent companies" in India, "to clean up the $210 billion of stressed debt choking its financial system", wrote B Shrivastava. "But they face treacherous terrain: Obstructionist owners, worker protests and even the rare kidnapping." "India has a bad-loan ratio that's second only to Italy among major economies, and its central bank expects the problem to worsen." That is where RPs come in. "There are a lot of expectations from everyone," said A Chhawchharia. "The RP is essentially parachuting into the middle of a mess and has to fix it all in 270 days at most." The Insolvency and Bankruptcy code protects the rights of secured financial creditors, read banks, but not operational creditors, who are unpaid vendors, wrote Prof R Prasad and YB Mathur. In the recent case of Bhushan Steel the National Corporate Law Tribunal (NCLT) rejected a claim of Rs 9.62 billion by engineering and construction company L&T. That is because the law was designed to protect banks, mainly those owned by the government. Just as the Obama administration worked to protect bankers, while millions of people lost their homes to foreclosure by the same banks. Non Performing Assets, or NPAs, in Indian banks have reached Rs 10.17 trillion . Banks wrote off Rs 2.25 trillion in the 5 years to March 2016. Banks are posting losses because of having to account for bad loans. As long as this lasts they are reluctant to lend. The Prime Minister claimed in Parliament that the previous Congress government looted banks by what he called "telephone banking". "The story of NPA began in 2008. Before the 2009 elections, Congress felt that there was a year to go so it opted to empty as many banks as possible. Once they got into this habit, the underground loot stretched from 2009 2014." Indeed. This government is forgiving loans to farmers exactly as the Congress did in 2008. But, whereas the total bill was around Rs 700 billion in 2008, it is expected to cost Rs 2.7 trillion this time round. The total of farm loan waivers and Mudra loans could exceed Rs 5 trillion, wrote V Kaul. NPAs in affordable housing loans, another scheme of Modi, have jumped to 4.1% from 3.3% a year ago. The problem with hot air is that there is no result. No politician or civil servant, who committed these crimes, has been arrested but a lot of bank officials, including retired ones, are being randomly arrested by investigating agencies. Public sector banks are never going to be rid of bad loans because of political interference and lack of accountability, wrote Prof N Kaushal. We know. That is why the government was forced to withdraw the Financial Resolution and Deposit Insurance (FRDI) bill which guaranteed just Rs 100,000 to depositors in case a bank went bust. India is old. So our governments don't change.

Strong for one, is weak for the other.

"Trump believes that China and the European Union, among others, are manipulating their currencies to gain a competitive advantage over the US," wrote an editorial in the Mint. "The yuan has depreciated by over 5% since the beginning of June and some people may be tempted to believe that China is doing this to undo the damage being done by Trump's tariffs." But, the strength of the dollar is because of "rate hikes and normalization of the Fed balance sheet" and "Fiscal stimulus at this stage of the business cycle -- when the economy is growing at a healthy pace, inflation is picking up and the unemployment rate is low". Who cares? Trouble is that this is affecting the rupee. "The Indian rupee is at an all-time low and has fallen over 8% since the beginning of the year." This is bad news because imports account for 80% of our oil needs. Rising oil prices coupled with a weaker rupee will increase fuel prices and lead to inflation. The fall in the rupee is caused by a reversal in carry trades, selling by exporters and unhedged foreign currency debt. "Carry trade essentially involves borrowing in a currency where interest rates are low to invest in currencies where interest rates are high," wrote A Narayan. Inclusion in global bond indices will reduce volatility in the rupee. What should be the ideal exchange rate of the rupee? "A few weeks back, the vice-chairman of Niti Aayog, Rajiv Kumar, told reporters that the Indian rupee was overvalued by 5-7%," wrote Prof R Chinchwadkar. However, "Since the current value of the trade-weighted REER index is around 115, we see several experts claiming that the rupee is 15% overvalued." REER, or the real effective exchange rate, values the rupee against a basket of currencies whose weights are based on trade with those nations. The base was set at 100 in 2004-05. On the other hand, "A further adjustment for the hierarchy bias suggests that the rupee is undervalued by more than 10%." So the rupee has fallen against the dollar but we are not sure whether it is weak or strong. What about policies? We need to maintain "external" and "internal" balance, wrote SZ Chinoy. "To achieve 'internal balance' is to keep domestic activity and economic potential and inflation close to target. To achieve 'external balance' is to ensure any current account deficit (CAD) is sustainable, given the hard budget of external financing that emerging markets often come up against." "The recent run of data confirms both internal and external balances are coming under pressure." Chinoy recommends real depreciation of rupee,which will raise prices, with expenditure control to control inflation. With 8 months to go for election impossible to control expenditure. Back to square one. 

Its good for the Chinese, but not for us. Why?

"New York: The currency war has arrived," wrote K Greifeld. According to the Bank of International Settlements (BIS) the daily foreign currency transactions total a whopping $5 trillion per day. However, the global settlement bank CLS puts the figure at $3 trillion per day. The Chinese yuan fell to 6.80 to the dollar which earned a warning from President Donald Trump about currency manipulation and keeping interest rate too low. "There's no question that the weakening of currency creates an unfair advantage for them," said Treasury Secretary Steven Mnuchin. "We are going to carefully review whether they have manipulated the currency." A lower exchange rate helps exports by making goods and services cheaper, giving an advantage against a stronger currency. The Indian rupee has also been falling this year. Urjit Patel, Governor of the Reserve Bank, warned against a rapid correction of monetary policy by the Federal Reserve in the US. After the subprime crisis in 2008 the Federal Reserve resorted to buying US government bonds, known as quantitative easing, to inject around $4.5 trillion worth of liquidity into the system to bring down interest rates and the dollar. Since last year the Fed has been selling bonds to reduce its balance sheet and also increasing interest rates. Patel is worried about a "double whammy" of reducing balance sheet with increased US government borrowing to fund its tax cuts. "The upheaval stems from the coincidence of two significant events: the Fed's long-awaited moves to trim its balance sheet and a substantial increase in issuing US Treasuries to pay for tax cuts," he wrote. "Dollar funding has evaporated, notably from sovereign debt markets. Emerging markets have witnessed a sharp reversal of foreign capital flows over the past six weeks, often exceeding $5 billion a week. As a result, emerging market bonds and currencies have fallen in value." Why is China deliberately depreciating its currency to gain an advantage in trade while the governor of India's central bank is worried about the fall in our currency? Because China exported over $2 trillion worth of goods and services in 2016, India exported a meager $274.65 billion in 2016-17. We import parts to produce goods for exports so when the rupee falls our cost of production goes up, wrote N Kwatra. "Between 2012 and 2018, India's share of US imports rose marginally from 6.5% to 7.5% while those of Vietnam rose from 7% to around 12%...... During the same period, the rupee fell around 30% against the dollar while the Vietnamese dong depreciated by just 10%." Why? Because, "the real effective exchange rate (REER) has risen for India gradually since 2000 and accelerated post 2013 even as rupee depreciated against the dollar in nominal terms." The rupee has been getting stronger against other currencies which is why we cannot compete against other countries. A strong rupee is used to control inflation. But, that is another story. 

The advantages of being poor.

"A growing body of research says the rich tend to display distinct behaviour that can be mostly characterised as mean," wrote Dr U Shashikant. ""In a world where income inequalities are only rising, and where amassing money is an avowed objective pursued without a tinge of regret, it might make sense to pause and ask if we are turning out to be rich and somewhat soulless." Does it mean that the poor will refuse to be rich if given the choice? Studies show that poor people spend a larger share of their income on buying lottery tickets because they feel it gives them equal opportunity to become instantly rich, even if that is close to zero. In India, Kerala has the largest number of people buying lottery tickets. Kerala is also the state with the highest literacy ratio at 94%. Has anyone ever given away his lottery prize? A lot of people are unable to deal with their sudden wealth and end up as poor as before by going on a spending spree. Everyone loves money. "There is this old sociological nugget that goes as follows: in the everyday presentation of self, the higher one rises socially, the fewer friends one has," wrote Prof D Gupta. He gives examples of how poor people risked their lives in saving others. That does not mean that all rich are cowards. It might mean that people tend to live in neighborhoods with their economic equals, which means that rich and poor live far apart. The rich are lonely because many see them as a source of easy money. Hence the old saying, "Lend your money and lose your friend." The danger of eulogizing the poor was illustrated in another article by Prof Gupta, in which he wrote that thousands of upper caste people with graduate and higher degrees applied for posts of 'safai karmachari', or 'sweepers', in UP. He presented it as equality enforced by job opportunities. But it is just the opposite. If people with PhD and masters degrees are having to work as sweepers it means a lack of suitable job opportunities for the qualified, loss of respect for education and enormous economic loss for the nation as we waste knowledge and talent. "The lack of empathy and compassion in the rich as compared to the poor is also well documented." The US leads in education and research because of generous endowments by the rich. Bill Gates and Warren Buffet, two of the world's richest men, are determined to give away major parts of their wealth to society. Recently 12 boys and their soccer coach were trapped in a cave in Thailand for 9 days. They were rescued so smoothly because they were poor, wrote Prof D Gupta. Had they been rich their parents would have exerted enormous pressure on authorities and each parent would have demanded that their child be rescued first. That certainly applies to India and especially to our politicians, who are the representatives of the poor. So, should we all try to be poor?

Will AI destroy itself without humans?

"Warnings about the risks posed by artificial intelligence (AI) seem to be everywhere. From Elon Musk to Henry Kissinger, people are sounding the alarm that super-smart computers could wipe us out, like in the film 'The Terminator'," wrote C Crider. Prof Stephen Hawking was not sure if we could be "destroyed by it". "It brings dangers , like powerful autonomous weapons, or new ways for the few to oppress the many. It could bring great disruption to our economy." Elon Musk goes even further. He wants a public body "that has insight and then oversight to confirm that everyone is developing AI safely" "I think the danger of AI is much greater than the danger of nuclear warheads by a lot and nobody would suggest that we allow anyone to build nuclear warheads if they want. That would be insane." Experts have made a list of risks that could be posed by AI. "These warnings matter, but they gloss over a more urgent problem: weaponised AI is already here. As you watch this, powerful interests -- from corporations to State agencies, like the military and police -- are using AI to monitor people, assess them, and to make decisions about their lives." The US uses data-driven targeting to kill its enemies with drones. "The US doesn't have deep human intelligence sources in Yemen, so it relies heavily on massive sweeps of signal data. AI processes this data -- and throws up red flags in a targeting algorithm." These strikes are called "signature strikes" and they "make up the majority of drone strikes". "Meanwhile, civilian airstrike deaths have become more numerous under US President Donald Trump -- more than 6,000 last year in Iraq and Syria alone." "Facial recognition, which the police are currently testing in cities such as London, has been wrong as much as 98% of the time." Prof T Cowen feels that we tend to fear technology because we do not understand it and so feel out of control. "We think we can protect our lives against many kinds of risks, perhaps irrationally to some extent, but how do you protect being assassinated by a small, poison-equipped drone." That is why we also fear driverless cars. The problem is that human beings are designed to be irrational, wrote O Goldhill, and that helps in making decisions. Superiority is being defined in terms of intelligence only, but "Being human is not about superintelligence and super capacity. It is about living with others and learning to live within our limitations," wrote S Sarukkai. That is the real danger. AI is an algorithm and an algorithm must be based on logic. An armed autonomous robot will see humans as illogical, therefore inferior, and try to eliminate us. Since robots can have no sense of pleasure or pain eliminating humans will mean AI will have no reason to exist. So, will it self destruct?

Is it collateral damage or inner weakness?

"The currency war has arrived," wrote K Greifeld. "So say some of the best and brightest in the $5.1 trillion-per-day foreign exchange market. US President Donald Trump on Friday accused China and the European Union of 'manipulating their currencies and interest rates lower'." if the Chinese yuan is devalued there is a risk of contagion so that, "Risk assets and oil prices would likely tumble as worries about growth arise, hitting currencies of commodities-exporting countries particularly hard -- namely the Russian ruble, Colombian peso and Malaysian ringgit -- before taking down the rest of Asia." In a warning to China, Treasury Secretary Steven Mnuchin said, "There's no question that the weakening of the currency creates an unfair advantage for them. We are going to carefully review whether they have manipulated the currency." The US Federal Reserve has been raising interest rate slowly since 2015 and anticipates raising it twice more this year. The unemployment rate is around 3.8% and core inflation rose to 1.8%. Core inflation is expected to rise to 2% this year. Higher interest rate tends to support the currency, in this case the dollar, so that it hardens slightly or maintains its current strength, wrote YiLi Chien. Normally yields on long term bonds are higher than on short term bonds because of greater risks involved in holding long term. This is called the 'yield curve' and is said to predict a recession when it starts to invert. The yield curve in the US has flattened which would seem to indicate that it is going to invert but new research showed that relation between yields on 3-month to 18-month bonds are better predictors than the traditional difference in yields of 2-year and 10-year bonds. The Indian rupee has dropped 8% this year already and is predicted to drop even further. Just 4 years back the rupee fell to 51 against the dollar and people were speculating whether it would fall to 58 against the dollar. Now, it will definitely fall to 70 to the dollar and no one knows how much further it will go. Our trade deficit is widening, the current account deficit is expected to rise to 2.5%, oil prices are going up and the Fed is increasing rates, are some of our macro vulnerabilities going forward, wrote D Sinha. While a weaker currency is good for Chinese exports things are not so straightforward for India. Unlike China, Taiwan and South Korea, India isn't part of big supply chains globally. The rupee continues to be overvalued on a real effective exchange rate despite the slide, and there was no question about being nervous about the depreciation, said R Kumar vice chairman of Niti Aayog. Should have asked his political bosses before commenting. A weaker rupee increases prices of imports, especially oil, leads to inflation and forces the Reserve Bank to raise interest rate, wrote A Iyer. We are not part of the currency war but may suffer the greatest. The currency reflects the economy.

Why can't we export when South Korea does?

In 1997, the Asian financial crisis was precipitated by a devaluation of Thailand's currency the baht. "India was spared the horror of the crisis, thanks to control on free movement of capital," wrote Shah and Angre. Since then Asian countries have built up huge foreign exchange reserves to shield their currencies in the event of a sudden sellout by investors. The growth of the Bombay Stock Exchange has been second only to that of Indonesia. The second storm to hit Asia was the subprime crisis of 2008. Again India was relatively spared. However, Asia still remains vulnerable to external shocks, wrote W Pesek. "Yet Asia is still too reliant on exports for growth, too vulnerable to US Federal Reserve tightening, too defenceless to rising oil prices and too exposed to exogenous shocks like Trump's tariffs." If India was spared in both the crises because of our paltry exports, why did the CEO of Niti Aayog, the government think tank which replaced the Planning Commission, A Kant write "Export or perish"? "India's economy cannot survive without exports. In 2017-18, exports of goods and services contributed about 12% of India's GDP. In contrast, exports made up over 42% of South Korea's GDP." South Korean President Moon Jae-in visited India recently in an attempt to boost trade ties between the two nations. "There isn't much room to expand Seoul's already well-developed relations with China, Japan and the US," wrote B Chellaney. "Moon is targeting economies with the greatest growth potential: several Asean economies and India are projected to grow at annual rates more than double that of South Korea in the coming years." "The fact is that South Korea went from poverty to wealth in almost one generation." "South Korea has a high trade-to-GDP ratio, a good indicator of how vulnerable any country is to the dips and dives of the global economy." That probably is the problem. Just as South Korea sees a huge market of 1.3 billion people Indian companies see no reason to fight for exports when they have a huge market right here at home. But faced with foreign competition Indian manufacturing has fallen from 16.41% of GDP in 1989-90 to 16.2% in 2015-16, which leads to a merchandise trade deficit of 8-9% of GDP, wrote A Ranade. Non-oil, non-gold imports are causing a huge rise in our trade deficits, wrote M Chakravarty. Indians are buying electronic imports from abroad because they are cheaper and affordable. Since our companies are not spending on research Indians resort to 'jugaad' to solve local problems. "India's oldest hack may be its biggest obstacle on the road to world power," wrote D Nelson. Kant may want to increase exports but first we have to produce what people want. That needs quality. Not jugaad.

Why we have tears in our eyes.

"Nearly seven decades ago, an erudite statesman from Gujarat came up with a distinctive idea of creating a politically neutral and independent civil service. This 'steel frame', as he rightly put it, would form a permanent executive to deliver fair and just administration to the newly independent country," wrote SS Dhillon, a retired IAS officer. The "erudite statesman from Gujarat" was Sardar Vallabhai Patel who continued with officers of the Indian Civil Service, ICS, despite being labeled a "kept service" and an "expensive luxury" by Jawaharlal Nehru and the officers being accused of "clinging to their superiors and bullying their inferiors". For those who are young, 'kept' meant a 'mistress' or 'whore' in those days, as in 'a kept woman'. Apparently it was Lloyd George, then Prime Minister of Britain, who referred to the ICS as Britain's steel frame in India. Dhillon should hardly be proud of that description. As politicians have become corrupt and criminals have become politicians so the IAS has become a partner in all the corruptions in this country. "Seven decades hence, another leader from Gujarat is making a half-baked attempt to 'reform' the civil service. A 'bold experiment' is being carried out in the form of lateral entry at joint secretary-level in the government of India," wrote Dhillon scornfully. He is talking about Prime Minister Modi and direct appointment from outside the IAS. In response, SA Aiyer asks, "Why just 10 posts for lateral entry into the bureaucracy? Why not 500?" He names several non-IAS people who were employed directly to high posts and were highly successful but the IAS has reacted so venomously that the government backed down. Bureaucrats are promoted on seniority and not on merit. One told Aiyer "Merit is a matter of opinion, seniority is a matter of fact." "The Indian bureaucracy may think it is the cat's whiskers but its actual performance has been pathetic. The public believes that the civil service is neither civil not delivers service." The IAS has changed from a steel frame to a "steel cage", wrote Chattopadhyay and Johnson because a lack of specialization makes them poor administrators in this age of fast changing technology. The IAS is a "powerful magnet for competent, capable, and proficient graduates from various fields and diverse fields" who "must undergo an application process that makes getting into Harvard look like a walk in the park". Hence, those who "make it to the IAS are exceptionally intelligent individuals", thinks Dhillon. Delusions of grandeur. "You want us to leave India. We would leave very soon but one thing you must remember that you would not be able to maintain those vaulting standards of fairness, honesty, efficaciousness and diligence in administration which we have maintained because of the conspicuous role of the ICS, and other services despite difficulties of governing and numerous odds faced by us. Time would come when many of you would remember us with tears in your eyes and nobody to console you," said Sir Evans Jenkins ICS, in 1947. Hear, hear. Absolutely.

Are we living in the same country?

Giving examples of how the police serve criminal dons in India, senior journalist S Shekhar wrote, "Mafia dons cannot become messiahs." Then he holds common people responsible for the rise of criminals in India, writing, "We may not have given birth to these Frankensteins, but people like you and I are the ones who nurtured them." How? Because these criminals are seen as "Robin Hoods by the common people". "Present-day mafia bosses don the garb of social workers along with that of politicians. Having instilled fear in the people, to win sympathy, they run ambulances, decide doctors' fees and help poor girls in the community get married. They assign men to save people from suffering natural disasters." "That is why, when people even like us sing the praises of criminals, why blame politicians." Because, these people are providing services which the state, which means politicians and civil servants, are not. This has been researched by political scientist Milan Vaishnav who found that political parties choose criminals as candidates because they have money and goons to win elections and people vote for them because they cannot get services from the government. In Godfather, the undertaker comes to him for justice because the police refuse to punish the young men who beat up his daughter. Over 34% of Members of Parliament elected in 2014 have charges of serious crimes against them. And even if the police bother to file criminal charges judges allow cases to drag on for so long that the accused are then considered too old to go to prison, allowing the wealthy to evade justice by endless appeals to various courts. Last year the Supreme Court apologized to a woman who had died waiting for a verdict in her case. The woman won her case but it was of no use to her. Honor killings and lynchings are common in India. The government blames WhatsApp for carrying false messages
which lead to violence and wants them to be filtered out. The Prime Minister accused the Congress of being a Muslim Party The Congress accused him of spreading "poison of hatred and division" by saying things which are "concocted and lies". They also accused Modi of a "sick mentality" and a "peddler of untruths". In June the Congress called Modi "cruel Aurangzeb" in retaliation for being reminded of the Emergency under Indira Gandhi. The problem is not with WhatsApp but because the state is weak, wrote an editorial in the Mint. "For the state to maintain a monopoly on violence, the political elite must show the will to make it happen." The state is quick to kill people when it wants, with no hesitation or regret. "So, I urge you not to blame the government for every incident and instead introspect and look around you," wrote Shekhar. Wonder who is spreading fake news, WhatsApp or journalists like Shekhar.

Ups and downs of a seesaw economy.

"The Indian economy seems to be in the midst of strong growth rebound," wrote an editorial in the Mint. The Nikkei Purchasing Managers' Index for June was the highest since October 2016, showing strong expansion of the private sector. "Production of passenger cars, commercial vehicles, consumer durables, steel, cement -- which are proxies for overall economic activity -- show strong momentum. Rail as well as air traffic numbers have also been good." The bad news is that "Core inflation in June was 6.4%" and "the increase in bank credit is led by consumer rather than business borrowing". The Consumer Price Index, CPI rose to 5% in June while the Index of Industrial Production fell to a seven-month low of 3.2%. The good news is that oil prices fell after inventories in the US came in stronger than expected and the base effect could have a salutary effect on retail inflation in July. The Wholesale Price Index rose by 5.77% in June, the highest in four and a half years. The US Treasury Secretary Steve Mnuchin indicated that some countries could take a longer time to reduce purchase of Iranian oil which is good news for India because the price of oil fell on the news and India has invested in Chabahar Port to facilitate trade with central Asian countries, bypassing Pakistan. Business confidence was lower in India in June than in the world, including BRIC nations. E-commerce accounted for only 1.5% of the overall retail market in India is 2017 but is expected to grow to 5.7% by 2022. A study in the US showed that online inflation was 3% lower than CPI inflation rate for the period 2014-17. But, companies cannot continue to sell at below cost price forever, so at some point e-retail companies have to increase prices to make profits or they will go out of business. State governments are having to borrow larger amounts to service their past debts. States are expected to raise Rs 1.38 trillion from the market in the June-September quarter of this year. This is in addition to increased borrowing by the Center because of increased fiscal deficit. Yields on 10-year benchmark bonds have risen by 46 basis points this year after rising by 81 basis points last year. Headwinds, such as rising oil prices, a slowdown in the construction sector, which is a source of earning of the rural poor, and huge bad loans in banks, restricting their capacity to lend, do not matter because "The strengthened foundations of the economy will become more evident as it continues to accelerate," wrote Kumar and Pai. Economic advisers from abroad have been sent packing and protectionist policies are in favor. This, after the Prime Minister's stirring defense of globalization at Davos in January. Various sectors of our economy are inversely related -- one part has to fall for another one to rise.

How could Israelis roam around Iran?

On 31 January, "The Mossad agents moving in on a warehouse in a drab commercial district of Teheran, Iran, knew exactly how much time they had to disable the alarms, break through two doors, cut through dozens of giant safes and get out of the city with a half-ton of secret materials: 6 hours and 29 minutes," wrote Sanger and Bergman. There were 32 safes but they left many untouched "going first for the ones containing the black binders, which contained the most critical designs. When time was up, they fled for the border, hauling 50,000 pages and 163 compact discs of memos, videos and plans." In April, Israeli Prime Minister Benjamin Netanyahu made some of the material public, after briefing Donald Trump privately beforehand, claiming that Iran had lied about its nuclear program. The International Atomic Agency responded that none of the material was new and that there were "no credible indications of activities in Iran relevant to the development of a nuclear explosive device after 2009". European governments dismissed Netanyahu's claims altogether, saying that it was old news and it was proof that the nuclear deal was necessary because the deal had got rid of 97% of Iran's nuclear material. How long would it take Iran to manufacture a nuclear weapon? Less than one year if they go full speed, say some experts. In 2015, Iran announced discovery of new uranium reserves. It said that two-thirds of the country has been explored and the rest will be covered in another 4 years. "The Obama administration granted citizenship to 2,500 Iranians, including family members of government officials, while negotiating the Iran nuclear deal, a senior cleric and member of parliament has claimed." It set off a competition between officials to see whose children could get to the US. Following signing of the nuclear deal former President of Iran Ahmadinejad wrote to Obama to return $2 billion of Iran's money frozen by the US Supreme Court. Prime Minister Angela Merkel of Germany vowed to defend the nuclear deal against unilateral sanctions by the US and the European Union passed a law to protect European companies from US punishment. Despite such assurance companies are leaving Iran for fear of losing US business. For India, this is bad news. On the one hand, there are a large number of Indians working in Gulf countries, which are against Iran, and on the other, India has a stake in Chabahar port in Iran which will allow us to bypass Pakistan to trade with central Asia. All because Israelis were operating around Tehran for 2 years.

Wealth is not so easy to squander, it seems.

It is common belief across the world that wealth survives in a family for only 3 generations. But, is it true? "Some $30 trillion in the US will reportedly be passed from the baby-boom generation to their heirs over the next 30 years, and recent changes in the tax code make passing along inherited wealth all the more easy," was an article in Bloomberg View. A study by JB Wahl in Wisconsin shows that although succeeding generations gradually lose their wealth until they become like ordinary citizens it takes much longer than 3 generations. According to Wahl, "Imagine that the wealthiest family at any given point in time has 100% more money than the average family. According to this sample, it would take 13 generations -- approximately four centuries -- for this hypothetical wealthy family to return to having a mere 10% more than the average household." Everyone knows that inequality in the United States has risen in recent decades," wrote RV Reeves. Better education, marrying of equals, better parenting, geographical segregation and 'hoarding' of opportunities, by using social networks to help children, are some of the ways that the wealthy manage to help their children to stay ahead of the rest. A study in the UK found that middle-class parents create a glass floor under their children, helping them to earn more than more talented children from poor families. "High attaining children from less advantaged family backgrounds are less able to, or at least less successful, at converting this early high potential into later labour market success," the study found. India maybe a poor country with a per capita GDP of around $2,000 per year, but "India has a billionaire problem," wrote J Crabtree. "From 2004 to 2014 India enjoyed the fastest economic expansion in its history, averaging growth of more than eight per cent a year." "Today India boasts 119 billionaires, more than any other country except China and the US." "Over this period India's tycoon class -- the 'Bollygarchs' as some call them borrowed huge sums from state-backed banks and invested it -- with gleeful abandon -- in one of the largest deployments of private capital since America built its railroad network more than a century and a half earlier." Education is creating huge gaps in earnings as the country progresses in technology, graduate earning "3.3 times the worker with basic schooling". Educational levels of parents make a big difference in how much their children earn, creating a 'glass floor' to support them. Tax and redistribution supports the poor in rich countries but does nothing to eliminate inequality. It should be easier in India. Reduce population and GDP per capita will increase automatically as there will be fewer people to divide the wealth. But, politicians love the poor. Therein lies the problem.

What do they gain by silly predictions?

"News broke that India's GDP is the world's sixth largest, crossing that of France, the world Cup finalist," wrote S Chakrabarti. However, we must "acknowledge that India's $2.6 trillion economy houses 1.2 billion people, while a mere 67 million French produce a GDP of $2.58 trillion". "India's current annual per capita income in exchange rate terms is a shade under $2,000, and around $7,200 in PPP terms. Under both calculations, India is ranked between 140 and 155 globally." "Only when the average annual income of a citizen, in exchange rate terms, is comfortably above $4,500, is a country classified as middle-income. High income countries are those where average annual income is above $12,500." GDP, or the gross domestic product is flawed at best, but is a magical indicator, wrote L Bershidsky. M Feldstein argued that improvement in quality is not measured unless there is an increase in price. For instance, improvement in healthcare, wherein a patient is discharged earlier than last year is not measured so GDP underestimates growth. J Stiglitz, on the other hand, argued that GDP overestimates growth because it includes government spending which maybe "inefficient or even counterproductive". Despite the debate, "As much as GDP calculation isn't an exact science, the results usually make sense." After the economic crisis of 1991, when India had to pledge 67 tons of gold to the UK and Switzerland to survive we have not suffered a recession for near 27 years, while the US suffered a recession in 1990-91, in 2001 due to the dot-com crisis and the subprime crisis in 2008-09. A recession is when the real GDP declines for 6 months, which is two quarters, or more. India's growth rate soared to 7.7% in the last quarter of 2017-18, ending 31 March, and is predicted to be around 7.4% in this financial year. Despite "several significant headwinds"  the economy is growing strongly and this is going to continue in the long term as the economy adjusts to current changes, such as GST, wrote Kumar and Pai of Niti Aayog. "The strengthened foundations of the economy will become more evident as it continues to accelerate. As will greater sustainability of the drivers, renewing the virtuous cycle of domestic and foreign investment in the world's fastest-growing large economy." But, where they see a "virtuous cycle" of non-stop growth C Kalbag sees rising bond yields, a sell-out by foreign investors and rising fiscal deficit. Citi predicts that India will be the world's largest economy by 2050 if it grows continuously at 8%, or the second largest if it grows at 7.5-7.7%. That is 32 years of continuous growth. No harm in impossible predictions. After all, "in the long run we are all dead."

It's not the concept, it's the practice.

"In a fascinating paper,....economist Nimish Adhia has shown that the 1991 economic reforms were preceded by a shift in popular narratives about capitalism in Hindi films," wrote an editorial in the Mint. "His content analysis of the most popular Hindi films since 1955 is startling. Businessmen who were once habitually depicted as villains, gradually began to be shown in a more positive light. Movies that celebrated wealth did well at the box office." The recent allegations of serious conflict of interest regarding the CEO of ICICI Bank, and of outright misappropriation of funds from  Fortis Healthcare group by its promoters, who took loans from other group companies to cover their tracks, and the Nirav Modi scam, have cast doubts on capitalism. "Arvind Subramanian has described the situation well -- India has moved from crony socialism to stigmatized capitalism." Although there is clear evidence that capitalism "is more successful than socialism in raising living standards" "There are popular demands for regulation when voters believe that wealth is created through corruption than competition". Capitalism is a concept, like Marxism. Its success or failure lies in how it is implemented by those who are in power. All countries have adopted three-fifths of Karl Marx's ideas, wrote Prof D Gupta. "Progressive income tax, national central banks, state run communication services, cultivating waste lands, right to work, eradicating town and country differences, providing free education, and, finally, banning child labour comprise the bulk of 'communist' policies advocated in the Manifesto." "Perhaps we democrats are more Marxist than Stalin's Russia, Mao's China, Ceausescu's Romania, or Hoxha's Albania." Prof S Rajagopalan explained why, if Marxism is so good that all democracies have adopted most of its ideas, it failed so miserably in Communist countries. Altruism maybe a biological necessity for survival of species but if you borrow on your credit card to help others and go bankrupt in the process you will not get any sympathy. India is not a fully capitalist country, though there are many successful private businesses, when the government controls over 200 companies, from engineering to banks to airlines. We are part socialist. Indians are taxed heavily to pay subsidies to the poor through many social schemes, which fulfill the basic tenet of communism, which is "from each according to his ability, to each according to his needs". In the Indian system the government is a much bigger bandit than robber barons. It is planning to loot the Life Insurance Corporation of India to save a failed bank, IDBI. Even worse, it looted Rs 1.5 trillion to fund another loss making enterprise, Indian Railways. We have to find another 'ism' for government loot.

The political truth of India.

"In Barddhaman town, a tea seller is going about his business, bantering with customers..." wrote N Sircar. When asked he said that everything is peaceful. "When pushed further, he responds nonchalantly, 'Of course there is violence here. Someone was just murdered 30 minutes from here.' 'The BJP (Bharatiya Janata Party) has offered to give every household in the panchayat a motorbike if they win it. But they have to win the panchayat here. That's not happening.'" A 'panchayat' is a village council in India, literally a 'group of five', which is supposed to channel government schemes to where they are required. Apparently West Bengal follows the 1973 Panchayat Act while the rest of India follows the 73rd amendment enacted in 1992. "The logic of the system implied that all citizens' access to party and state would be channeled through the panchayat -- effectively requiring total territorial control of West Bengal's villages for large scale policy implementation." Why kill for control of village councils? Because vast amounts of funds for development and for social schemes for the needy are channeled through panchayats which give enormous scope for diverting money to party coffers. Political violence has become ingrained in West Bengal since 1970, wrote A Roychowdhury. When the CPM came to power in the 1970s it distributed land and money to the village poor, most of which went to supporters of the party. This increased number of supporters of the party, and anger in those left out. Political violence has become a norm since then. "To me, panchayats are nothing but centres of empowerment, money, and privileges because most of the central government schemes are given directly to panchayats," said social scientist B Chakrabarty. "Given the fact that employment in rural areas is shrinking every day, so the panchayat is giving people money, privileges, and dignity, making it necessary for people to capture power in the panchayats in order to survive." "Politics of violence has become part of the Bengali psyche now." Political violence is not restricted to Bengal. In UP it has been famous as 'goonda raj', in that every party inducts violent criminals to fight criminals of other parties. Having encouraged criminals to become politicians you have to give similar powers to the police to control public anger. While criminals are used to fight criminals of other parties the police are used to beat up ordinary citizens protesting against government diktat. The BJP district secretary in Bengal asked Sircar, "Are you a good person?" And then said, "I can tell you are. I'm not. I'm a very bad person. Good people don't win elections." That includes all politicians.

Globalization seems similar to colonialism.

At the World Economic Forum in 2017 Xi Jinping talked about "growing material advances in science and technology" which have resulted in unprecedented development but, on the other hand, there are "frequent regional conflicts, global challenges like terrorism and refugees, as well as poverty, unemployment, and a widening income gap". Xi then asked, "What has gone wrong?" For people with bad intentions technology has made it easy to game the system and cheat others. China has been providing underhand subsidies to its companies, robbing intellectual property and creating barriers against foreign businesses for years, wrote C Block. A 36 page report from the White House Office of Trade and Manufacturing Policy lists the ways China cheats on trade. There are huge markets across Pakistan selling counterfeit western products made in China. "The best thing about these goods is that our middle-class people can now afford to live in style," said shopkeeper Noshad Sheikh. "(Shopkeepers selling these goods have) brought international brands within the reach of local customers who, otherwise, would see those brands only in movies and on television shows. Of course, I am talking about copies and not the original products." When you cheat others suffer. The Industrial Revolution in the 18th century was due to technology. But, "Some workers toiled 12-14 hours per day, yet inequality surged." "But Europe rose to the occasion," and enacted "new labour laws and regulations" which resulted in "economic development and human welfare". Prof Basu conveniently forgets colonialism by European countries, allowing them to rule over 80% of the world and loot its resources. Basu is annoyed about "political polarization, rising nationalism, and a toxic blame game", especially by Donald Trump. "What such behaviour fails to take into account is that globalization is, fundamentally, a natural phenomenon." If so, why is there so much anger against globalization, especially in the West. Perhaps because globalization creates inequality across nations. Thus trade deficit with China has cost 2 million job losses in the US. In the 18th century, inequality was within national borders and hence much easier to remedy with laws and redistribution. China is definitely stealing technology secrets by forcing foreign companies to hand over their research advances, wrote R Sharma. Globalization may have helped poorer countries initially but if some do not play fair then others will lose in the long run. Just as the British claim to have benefited India by conquering it so supporters of globalization see only positives. The strong will always oppress the weak. Goblalization is no different.

Is there going to be repeat?

The Indian economy was near collapse in 2014, said Prime Minister Narendra Modi. "We all knew that the economy was in the doldrums but since were not in government, we naturally did not have the complete details of the state of the economy. But, what we saw when we formed the government left us shocked! The state of the economy was much worse than expected. Things were terrible. Even the budget figures were terrible," he said in an interview recently. Why has he not filed criminal cases against the perpetrators. The country is spending billions of rupees trying to extradite Vijay Mallya from the UK, who is accused of pocketing Rs 90 billion, but politicians who misused trillions of rupees of taxpayer money are still strutting around New Delhi. Maybe because he could face the same charges if he should lose next year's general elections. Economic indicators on the 4 years of Modi government seem pretty good, with growth at 7.4%, shares at near record levels, foreign exchange reserves at over $400 billion, retail inflation at comfortable level and rising foreign investment. That being the case, why is the rupee the worst performing currency among emerging market economies? A falling rupee may help exports but there is a risk of inflation and more money fleeing from India, wrote A Iyer. A growing economy is not creating as many jobs as expected, wrote R Mazumdar. This government has been choking information under the Right to Information Act. Civil servants are delaying information or simply refusing to supply any. People are gradually giving up trying to get any information out of the government. The government has not been appointing commissioners to the Central Information Commission so this body will gradually cease to function. The Lieutenant Governor of Delhi, appointed by the Central government, has been blocking the functioning of the elected government in Delhi, because it is formed by the Aam Aadmi Party. The Supreme Court said that the Governor must function according to the advice of the elected government. Civil servants have been withholding information on vital services, such as education, health and delivery of rations to the poor, wrote A Marlena. Foreign policy has been reduced to serial hugging. After nice words with Donald Trump, the US has gone back to supporting Pakistan, the 2+2 dialogue has been postponed and India may incur sanctions if it buys Iranian oil or the Russian S400 missile defense system, wrote S Haider. Neighboring countries are using China to give a bloody nose to India. If oil becomes more expensive, as some are predicting, or if the rupee falls even lower, we could be worse off than in 2014. When you point a finger at another.... 

Best to look into a mirror.

India was the most dangerous country in the world, according to Thomson Reuters poll, ahead of Afghanistan, Syria, Somalia and Saudi Arabia. The poll was conducted among 548 unnamed so-called experts, 41 of whom were Indian. Women's groups have rejected the findings of the poll while some women agree with it. Naturally, the government has rejected the report, and the Minister for Women and Child Development, Maneka Gandhi, herself a woman expressed outrage. "The results, and the sensationalist reporting surrounding them, show how dangerous it is to make absolutist statements based solely on on the results of a poorly-designed and inherently biased perception poll," wrote Urmila Pullay. India was deemed the most dangerous under cultural traditions. "The specific question asked of experts under this heading is: 'In your view, what is the most dangerous country in the world for women in terms of cultural, tribal and religious traditions or customary practices? This includes acid attacks, female genital mutilation, child marriage; forced marriage, stoning, physical abuse or mutilation as a form of punishment/retribution and female infanticide.'" "Each of these words has different connotations. Cultural traditions are different from tribal ones and those are different from religious ones. Acid attacks that have been clubbed with these are not 'cultural traditions'." "The per capita figures for rape for 2010 (nothing more recent is available on the net) are: India - 1.8 (per 1,00,000 population); Germany - 9.4; the UK - 17; Norway - 19.2; US - 27.4; Sweden (yes the most advanced society on earth) - 63.5," wrote A Dhillon. A new law just passed in Sweden says that keeping quiet is not assent. "If a person wants to engage in sexual activities with someone who remains inactive or gives ambiguous signals, he or she will therefore have to find out if the other person is willing," says the law. Does it mean that one has to take an affidavit of consent before sex? Huge income for lawyers, after all they drafted the law. "While the British press has been bemoaning rape in India for several years now, the Rape Crisis Centre says that, ' Approximately, 85,000 women and 12,000 men are raped in England and Wales alone every year; that's 11 rapes (of adults alone) every hour.'" Sexual violence has reduced in India in the past decade even as reporting has increased, wrote P Bhattacharya. Even a low rate results in a huge absolute number because of the humongous population. Families which ran away with cots from Rahul Gandhi's 'khaat sabha' live in hovels with no proper doors. Poverty leads to insecurity. And yet, rich nations have a higher rate of rape. So, what's the solution?

The problem is easy to solve, but not easy to let go.

"The big jump in minimum support prices (MSPs) for kharif crops announced by the Modi government is its biggest economic blunder," wrote SA Aiyer. "It gives a fixed margin of 50% over their input cost and imputed labour cost, ignoring demand, supply and international competitiveness. This makes no economic sense for any activity, let alone farming." This shows that economists have no sense. This is not being done for the benefit of farmers, the economy or the country, this is being done to persuade farmers to vote for the BJP, the Prime Minister's party, at next year's general election. This will increase inflation by increasing food prices, forcing the Reserve Bank to increase interest rates, and harm farmers by cutting down exports. "India's farm sector restrictions and subsidies end up distorting incentives. This has led to insufficient use of modern technology, low volatile agricultural productivity growth, excessive ground water withdrawal, poor soil fertility and declining agro-biodiversity. In the end government interventions end up sustaining, not reducing, rural poverty," wrote S Sabhlok. Farmer's leaders have been arguing for freedom for farmers, to allow them to compete at home and abroad and the infrastructure to make it easy for them to market their produce. Procuring certain crops at increased prices leads to water-guzzling crops in areas with deficient rainfall. This is leading to depletion of groundwater all over India. Free electricity in some states is leading to excessive pumping of groundwater leading to increasing drought. Over 200,000 people die every year due to shortage of clean drinking water and this is set to get worse. Pattern of crops must be changed and investment in irrigation will reduce the need for groundwater. Milk prices have fallen by 20-30% in several states with surplus production of milk and 70% of those earning livelihood from milk are women. Export is not an option because global prices of skimmed milk have fallen. The government bans import of milk and milk products, including confectionery, from China. Apparently because Chinese milk is contaminated with melamine. But, if we have so much milk why should there be any need to import anything? Farmers are agitating because their income has fallen compared to the rest of India, wrote Prof A Gulati. There is a crisis in agriculture, wrote an editorial in the Mint. Everyone agrees about that and on what needs to be done. But no one has worked out how this will lead to votes. Farmers are suffering from democracy.