Should we drink a toast to our GDP growth rate of 8.2%?

India's GDP grew by 8.2% in the first quarter of this financial year, 1 March-30 June. The growth is calculated by comparing with prices in the same period last year and shows a jump in agriculture, manufacturing and construction. Mining and services did not grow despite a jump in taxes on services, which increased from 12.36% in 2014 to over 15-18% in this year's budget. Since GDP is calculated by adding taxes, but subtracting subsidies, it would be expected to rise if taxes go up. Both private consumption demand and demand for investment rose but revenue deficit has crossed full year target in 4 months. Experts were optimistic about the economy going forward but cautioned against the inflationary effects of a weaker rupee. That would encourage the Reserve Bank, RBI, to increase the cost of borrowing which will impact new investment. Several experts warned of dangers to our economy. Higher trade deficit, which increased to $63 billion between April and July compared to $51.5 billion last year,, with high price of crude oil is a worry, said R Gopalan. S Bhattacharya is worried about the government's inability to contain both fiscal and current account deficits while J Bhagwati thinks that the rupee is overvalued by 25%. If the rupee falls by another 25% it will go to 90 to the dollar which will cause prices of imports, especially oil, to jump and play havoc with government finances. To finance its excessive spending the government has increased customs duty on over 400 imports in the last 2 years. This government has reverted back to 'import substitution' policies which "threatens to return us from the turnpike on which we have been travelling all these years on to the dirt road," wrote Prof A Panagariya, who used to be CEO of Niti Aayog. To add to our problems the US has complained to the WTO about subsidies provided to Indian exports. The US need not worry. Our exporters are not getting their subsidies because of delays in refund of input tax credit which are charged upfront under GST rules. The weak rupee "reflects an economy that is consuming more than it produces. It reflects an uncompetitive economy for it makes more sense to import than to buy domestically produced goods or that domestic production of some goods does not happen, or it is a combination of all these," wrote VA Nageswaran. In the absence of reliable jobs data, the number of people applying for low salaried vacancies point to jobless growth, wrote Nag and Beniwal. When 3,700 with PhD degrees apply for jobs as peons it shows the lack of job opportunities and, sadly, how worthless our degrees are. Time for a Patiala peg? Not yet perhaps.

An attempted robbery that failed.

Out of a total of Rs 15.4 trillion worth of high value banknotes (Rs 1,000 and Rs 500), which were suddenly withdrawn on 8 November 2016, known as demonetization, Rs 15.3 trillion worth have been returned, the Reserve Bank of India, RBI, announced yesterday. Only Rs 107.20 billion remain outstanding. The RBI has spent a total of Rs 128.77 billion of taxpayers money to print new Rs 2,000 and Rs 500, which could have been used for more productive purposes. Poor people paid a heavy price as 1.5 million jobs were lost, especially in the unorganized sector. Demonetization was supposed to get rid of black money, decrease corruption and eliminate counterfeit currency. "Counterfeit notes detected in SBNs (specified bank notes) decreased by 59.7 and 59.6 per cent in denominations of Rs 500 and Rs 1,000, respectively," said the RBI. "Compared to the previous year, there was an increase of 35 per cent in counterfeit notes detected in the denomination of Rs 100, while there was a noticeable increase of 154.3 per cent in counterfeit notes detected in the denomination of Rs 50." Rs 2,000 notes showed a spike of 2,710% compared to last year, while the number of Rs 500 fake notes jumped by 4,871%.  "Demonetization failed in every objective that was expected from it, wrote V Padmanabhan. Total amount of cash is back to previous levels at Rs 19.37 trillion but cash to GDP ratio is down from 12.2% of GDP in 2011-12 to 8% in 2017-18. Digital transactions have increased but they were increasing even before demonetization. Tax to GDP ratio has increased from a low of 10% in 2014-15 to 11.6% in 2017-18. We are not told if this increase is because of eye-watering increase in salaries of millions of civil servants due to the 7th Pay Commission. Minimum salary of government employees maybe increased to Rs 26,000 per month which will take the lowest ranked employee above income tax threshold which is Rs 250,000 per year, or Rs 21,000 per month. Household financial savings as a percentage of gross national disposable income (GNDI) rose from 9.1% in 2016-17 to 11.1% in 2017-18, the highest in at least the last seven years," wrote M Chakravarty. "That's the good news. The bad news is that a major part of this increase was in currency." "The negative impact of demonetization was felt across all the segments of economy, especially agriculture and industry," wrote R Singhal. Reserve Bank Governor Urjit Patel had to face a lot of criticism because of the slow replacement of recalled banknotes but there is now a "growing respect" for him, wrote an editorial in the Mint. Modi scored a huge victory in UP assembly election last year because of demonetization but will the opposition make it count in general elections next year we shall see. It is a crime to try to rob the nation.

What if Trump is right on the economy?

"Having gained more than 8% in value since the start of the year, the US dollar is nearing highs not seen in more than a decade, and market indicators point to even more appreciation in the coming months," wrote Prof BJ Cohen. The rise in the value of the dollar is because of increasing interest rates by the Federal Reserve to head off inflation. This is similar to what happened under Ronald Reagan and George W Bush, the dollar appreciating 60% under Reagan, between 1981 and 1985. The Federal Reserve increased its Funds rate to 1.75-2% in June this year, but under Reagan (1981 to 1989) the Funds rate varied from highs of 20% in 1981 to a low of 5.66% in August 1986 before rising to 9.75% in December 1988. The infamous Greenspan put, which saw exceptionally low interest rates, led to the subprime crisis. The Funds rate was effectively at 0% from December 2008 to December 2015, during Obama years. The Tax Cuts and Jobs Act by Donald Trump has decreased income tax rates for individual taxpayers, increased standard deductions and reduced corporate tax rate from 35% to 21%. According to the Congressional Budget Office this will add another $1.891 trillion of debt over the next 10 years to the $9.8 trillion forecast at present, to the existing national debt of $20 trillion. The problem is, "a strengthening dollar increases the price of exports abroad and lowers domestic cost of imports, thus discouraging the former and encouraging the latter." Trump has increased tariffs on a range of imports which will "put upward pressure on the domestic inflation rate, which could force the Fed to raise interest rates even faster than planned. That, in turn, would produce still more dollar appreciation and even bigger trade deficits, as happened under Reagan and Bush." A strong dollar will make exports more expensive but a hefty 14% cut in corporate tax rate means that companies can pass on benefits to customers. Higher tariffs could make imports costlier and feed into inflation but this will be offset by the strong dollar. Maybe that is why markets seem to be unconcerned, despite the S&P 500 and the Nasdaq setting record closes on 4 successive days of trading. Average inflation rate crept up above the Fed target rate of 2% since last year. "The Fed is not only raising rates but is also reducing the size of its balance sheet. The withdrawal of policy accommodation is perhaps the biggest risk for the stock market," wrote an editorial in the Mint. Low interest rates encourage reckless borrowing to fund dubious investments that lead to asset price bubbles. It is good that the Fed is tightening gradually giving time for markets to adjust. Personal dislike of Donald Trump does not mean that his policies are bad. Even for a professor.

High decibels to cover low delivery.

"India's economy is shrugging off global trade wars, relying on domestic consumption to stay on course to becoming the fastest-growing major economy this year," wrote A Nag. Demand for bank loans, manufactured goods and services have "remained solid". According to Reserve Bank of India, RBI, figures personal loans accounted for 96% of non-food bank credit in the last financial year. "This is not surprising given the recent trend in bank credit where corporates have nearly stopped taking loans and retail credit is now the only major segment that is growing for banks," said D Sinha. A study showed that Indians are buying more consumer durables, with 66% of households now owning a television, over 50% owning a refrigerator and 26.4% owning a washing machine. However, domestic real estate sector is still depressed, and most of the demand is in properties which are ready to move into. No wonder capacity utilization has risen to over 75%. Higher capacity utilization is good for the economy because companies would be expected to increase capacity by setting up new projects which will create more jobs. But if companies are not borrowing it means that new capacity is not being created and this will lead to increase in prices as supplies lag behind demand growth. Exports grew by 14.3% in July but our trade deficit in June was $16.61 billion, which was the highest in 61 months. Being reliant on domestic consumption means that as the economy grows it sucks in imports at a higher rate, so that we imported $44.3 billion worth of goods in June. This will increase current account deficit which may reach 2.8% this financial year, according to a report by the State Bank of India. This is being blamed on the high price of oil but it is our our non-oil, non-gold trade deficit that has increased from $0.40 billion in 2013-14 to $53.30 billion in 2017-18, showing how uncompetitive our industry has become, wrote M Chakravarty. "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," wrote CEO of Niti Aayog A Kant. We must boost our exports if we are to keep growing. GDP figures for the June quarter are yet to be announced but we must discount a favorable base effect because of low growth in the same quarter last year, wrote Chakravarty. GDP growth is now calculated on base prices in 2011-12. Calculating back, based on the new series, the National Statistical Commission found that the economy grew by 10.23% in 2007-08 and by 10.78% in 2010-11, during the previous Congress-led government. This led to crowing by the Congress and the report was quickly withdrawn by this government. Data on farmer suicides, on employment and on poverty line have also not been released by this government, wrote Prof Himanshu. GDP growth alone is irrelevant unless it increases jobs and the standard of living. It is about who can make the most noise. Confuse people with decibels.

The emerging difficulties for emerging markets.

Since the subprime crisis vast sums of money have flowed into emerging markets because of excess liquidity in developed economies, wrote S Das. "The problem is that investors have piled into familiar carry trades, either directly or via funds. They've purchased high-yielding emerging-market securities and then, as returns have fallen, resorted to more adventurous strategies to boost income. Japanese retail investors, for example, are exposed to funds known as double-deckers, which purchase high-yield debt, then swap the income flows from the bond into a currency with high interest rates." Investors will lose heavily if the bonds default or if the currencies weaken. Many of these countries have lax reporting norms so risk calculation is difficult and, in the past, "Government intervention, such as the imposition of capital controls prevented redemptions and the repatriation of funds." Federal Reserve Chairman Jerome Powell said that the Fed will raise interest rates carefully to keep inflation under control. "The two risks faced by the Federal Open Market Committee are moving too fast and shortening the expansion, or moving too slowly and allowing for overheating and financial excesses, he said." On the other hand, President of St Louis Federal Reserve Bank James Bullard warned that even one further rate hike could set off a recession. "The thing is, we would be deliberately inverting the yield curve, because we think our models are right and we think the market's wrong." The US is the only economy that will grow this year as the rise in US interest rate and strengthening of the dollar, along with a trade war between the US and China will dampen global growth. "Once that pain in emerging markets gets particularly acute, that naturally will spread back to the US and change things in terms of how the Fed needs to manage domestic monetary policy," said M Nash. Pessimism about the global economy is shown in waning enthusiasm about further rises in the price of oil among oil investors. "When you start to look at the different economies across the globe -- Europe, Asia, the emerging markets are definitely starting to hit some headwinds," said M Watkins. Low oil prices is good news for India but slowing global growth is not. The price of oil will remain at $70 a barrel, as at present, because sanctions on Iran will provide support to prices. Last year, $80 billion of capital left Saudi Arabia and this year $65 billion, or 8.4% of GDP, will flow out, because of patchy reforms and brutal suppression of citizens. The expected IPO of Saudi Aramco has been canceled and advisers disbanded, because the company valuation was unrealistically high. The Saudi oil minister denied that the IPO has been canceled. Emerging markets will not emerge in the near future. Pity.

What if opposing views are equally moral?

"The benefits of winning an election have become so large that political parties will stoop to new lows to clinch a victory. And, as with corporations, they can do so with the help of data on electoral preferences and behaviour, and with new strategies to target key constituencies," wrote Prof K Basu. "If a 'bad' party is willing to foment hate and racism to bolster its chances of winning, what is a 'good' party to do? If it sticks to its principles, it could end up ceding victory to the 'bad' party, which will do even more harm once it is in office. A 'good' party may thus try to forestall that outcome by taking a step down the moral ladder, precipitating a race to the bottom." "Our brains need to create a shared sense of self, 'an imagined community', as the political scientist Benjamin Anderson put it, on whose behalf collective decisions are made," wrote Prof R Hausmann. "It is the role of politics to create, sustain and reshape this shared sense of self, of us (and hence of them)." Thus, "Venezuelan President Nicolas Maduro cannot stop inflation, because the narrative of economic welfare in which he is trapped prevents him from justifying the decisions needed to stabilize prices." "Policies must fit within the prevailing narrative framework, while the great task of politics is to shape the narrative of tomorrow." Trouble is those who benefit from the present narrative will resist change, with violence if necessary. Those who benefit from the policy of reservation in higher education and government jobs in India will resist any change, even if it is blatantly unfair to other disadvantaged sections of society. For decades Congress governments in Assam allowed unhindered migration of Muslims from Bangladesh into Assam, turning many districts into Muslim areas. The present government has updated the National Register of Citizens in Assam, which the Congress avoided doing since 1950, which has created enormous anger. This is denounced as 'nationalism' by those who see nothing wrong in India being taken over by illegal immigrants. To want to protect our nation is denounced as nationalism in India, while Senator John McCain, who died yesterday, is celebrated as a patriot. It is no wonder that the US is the strongest nation in the world, while India is weak. Perhaps, Prof Basu is wrong to blame present politicians for "such lows during peacetime". Today's policies are a direct result of policies of previous governments. Thus, Prime Minister Modi has to distribute more handouts if he is to standout for the vast millions who feel they are entitled to social schemes. Prof Basu advises citizens to vote "in their self-interest within the restraints of a moral code", but his morality may be opposite to one who has become a minority in his own home state. Secularism will collide with patriotism. Both are moral.

Recency bias means that events from now on will decide.

"Prime Minister Narendra Modi and BJP will not fight the election on the basis of economic achievements in the last four years, though there have been some interesting landmarks," opined PV Rao Jr. India's economy has grown to fifth spot in the world at $2.6 trillion, the economy is growing at over 7%, important reforms like the Goods and Services Tax and the Bankruptcy and Insolvency Code have changed the way of doing business in India and has started at least 18 welfare schemes since elections in 2014. So why should Modi be shy of trumpeting his achievements from the ramparts? Because, economic growth "has not positively impacted people across the social spectrum and across the country. The 7.3% average growth rate is in realistic terms minimal and not optimal. It is not enough to generate jobs and profits and lead to further investments. What has sustained the economy in these four years is public expenditure. Private investment has been a laggard." Average economic growth rates over 5 years do not matter as much as growth just before elections because of 'recency bias', wrote S Chakrabarti. Agriculture, construction and manufacturing, which affect most people, show sharp recovery, according to M Bhusnurmath. The economy grew between 7.5% and 7.9% in the first quarter of this financial year, partly due to base effect because of a sharp slowdown in the first quarter of last fiscal, and partly due to growth in agriculture and manufacturing. "Five years ago, Team Modi succeeded with great aplomb in nailing the Singh government with simple but lethal social-media memes around anemic growth, high gasoline prices, a weak rupee and a string of corruption scandals," wrote A Mukherjee. "Now, the Congress Party wants to return the compliment in next year's election by using the same narrative of expensive gasoline, a wilting currency and alleged improprieties in the purchase of Rafale fighter aircraft from France's Dassault Aviation SA." The new GDP series based on 2011-12 showed that the economy grew at an average of over 8% during the 10 years of Congress led UPA government. The average growth may have been higher under the Congress but it completely mismanaged the economy in its second term which is what people remembered in 2014. "But, what we saw when we formed the government left us shocked! The state of the economy was much worse than expected," said Modi about 2014. In 2017, Modi had a 99% chance of winning re-election in 2019, said Ruchir Sharma. "However, the odds have shifted dramatically. Now it is a 50:50 election and a lot is going to come down to alliances again." Old slogans will not suffice and Modi needs a fresh narrative for 2019, thinks S Chakrabarti. A week being a long time in politics there is plenty of time for the opposition to muck it up.

Now that they know the problems, let the people decide

By Friday, 29 March 2019, Britain will leave the European Union, following which there will be a transition period till 31 December 2020. So, we are into the endgame. "This isn't an ordinary endgame though: All major pieces are still on the board and pretty much the full range of potential outcomes -- from no deal to no Brexit, an everything in between -- remain live possibilities," wrote T Raphael. In a speech in March, Prime Minister Theresa May warned of different outcomes to negotiations with Europe, saying that she wanted to avoid a "hard Brexit". "Europe can drive a hard bargain, because a 'hard Brexit' with no supporting agreements would hurt the UK far more than the EU." But, more importantly because, "Europe also has no interest in helping Britain make a success of Brexit, because it wants to discourage other defectors." Last month May called her cabinet to Chequers, the official country residence of the prime minister, and hammered out a blueprint for the British position. The plan suggests a "combined customs territory" which will allow Britain to collect taxes for goods going into Europe. Scotland and Northern Ireland voted heavily in favor of staying within the EU and Northern Ireland wants an open border with the Republic of Ireland, which is not only a part of the EU but of the Eurozone as well. European Commission's Chief Negotiator Michel Barnier promptly ruled out May's customs compromise. "A customs union, which would help to reduce friction at the border, would come with our common commercial policy for goods," he said. Meaning EU rules, and not British, will apply to any customs union. Hardline Conservatives prefer a no-deal Brexit rather than the Chequers plan. "We would be out of Europe yet still run by Europe," wrote Jacob Rees-Mogg. May traveled to the Czech Republic and to Austria to sell her idea of free movement of goods, but not of people, but failed to convince them. She then cut short her holiday to talk to President Macron of France but he does not support Brexit either. The British government has released a series of papers advising citizens and industry on steps to mitigate the effects of a no-deal Brexit. These warn that British citizens living abroad may lose their bank accounts in Britain, medicines becoming more expensive and higher charges on credit cards. "What makes this particularly devilish is that the old Leave versus Remain division has effectively become a deal or no-deal division," wrote Raphael. The EU is unlikely to help Britain reach a favorable compromise because anti-EU sentiments are growing in other, more important countries. Now that the government has explained what a hard Brexit may mean it should give the people another chance to vote on it. That would be the democratic way.

When is the right time to panic?

R Malik compared India with Indonesia where both prime ministers, Narendra Modi and Joko Widodo were elected in 2014 and will face re-election in 2019. Both are emerging economies but India has a much bigger population and a GDP of $2.6 trillion compared to Indonesia's $1.01 trillion, so that GDP per capita in Indonesia is $3,876 while India is $1,983. The Indian economy has been growing at over 7% while growth in Indonesia has been just over 5%, but India has a much higher general government debt of 69% of GDP and fiscal deficit at 6.5% of GDP compared to Indonesia's 29.6% government debt and deficit at 2.5% of GDP. Central banks in both nations raised interest rates this year, Indonesia by 100 basis points to 5.25% to defend its currency, while the RBI raised our rate by 50 basis points to 6.5% to keep retail inflation in check. Interest rates have been dropping in the rich world since 2007, Japan and Europe went to negative rates in 2016, while rates were increasing in emerging markets from 2010 to 2016, wrote N Arora. Interest rate in India reached a high of 8% in January 2014, dropped to a low of 6% in August 2017, and has gone up since June of this year. The problem is that the price of oil has risen and the dollar has strengthened against the rupee which means that we have to pay much more for fuel in India. After selling Indian shares in the first half of the year, Foreign Institutional Investors have been buying Indian stocks in July and August. Banks are still handicapped by bad loans and the government cannot increase spending any further without pushing fiscal deficit higher, so it will be reluctant to do much till elections next year. "In the long run, exchange rate changes reflect inflation differentials," wrote VA Nageswaran. "Therefore, to fret over rupee weakness is a mistake. It is right to fret about India's rising non-oil, non-gold imports," "it reflects an uncompetitive economy for it makes more sense to import than to buy domestically produced goods or that domestic production of some goods does not happen, or it is a combination of all these." "The essence of this-time-is-different syndrome is simple. It is rooted in the firmly held belief that financial crises are things that happen to other people in other countries at other times; crises don't happen to us, here and now. We are doing things better, we are smarter, we have learnt from our past mistakes. The rules of valuation no longer apply," wrote Carmen Reinhart and Kenneth Rogoff. It is not just a correction but a run on the rupee, wrote A Barua. The RBI should sell dollar bonds to non-resident Indians to increase reserves and shore up our currency. Not so, wrote G Rangan and G Nayak. That will send the wrong signal that we are panicking. The rupee is overvalued and India needs to let the rupee down gently to boost exports and raise interest rate to keep a check on inflation, wrote SZ Chinoy. What happens elsewhere is unpredictable. That is the challenge.

Is oppression as simple as playing soccer?

If you draw a rectangle on a field, erect goalposts at each end, choose two teams in red and blue shirts and give them a ball they will compete to score goals, even risking injuries, wrote Prof K Basu. Onlookers will take sides and will take time out to watch the game. "Life is full of such created targets, and this has implications for how societies or economies function. Worryingly, electoral politics is often like this too. Democrats or Republicans, or Tory or Labor, after some time, it becomes like ordinary people supporting Liverpool or Chelsea." Are sports and politics similar? In amateur sports the prize is  thrill of beating, as in running or soccer, or subduing, as in wrestling or boxing, another. Every game is a battle. Even an unhurried, quiet game like chess was invented to resemble war. In India, where chess was invented, we have a king, a minister, an elephant, a horse, a camel and foot soldiers, called 'pyada'. The game ends when one king is captured. Men have been fighting each other since neolithic times and sports may have been invented as a substitute for actual battle. Men were playing with a rubber ball, and sometimes with human heads, 3,500 years ago in central America. Apparently, every civilization, Chinese, Egyptian, Greek or Mayan, invented its own ball to play with. If these are examples of "created targets" or just a human desire for entertainment we do not know. After all, human beings spend a lot of money to be scared witless by horror movies. "For politicians, corporations, and powerful organizations, this human faculty of created targets is an opportunity." "Nothing appears more surprising to those who consider human affairs with a philosophical eye, than the easiness with which many are garnered by the few; and the implicit submission, with which men resign their own sentiments and passions to those of their rulers," wrote David Hume. Does that explain why people informed on their own families in the Soviet Union, or the many reasons why people betrayed others in former East Germany? Both the Soviet Union and East Germany do not exist any more, proving perhaps that such tactics are self-defeating. Social norms of behavior control our actions. "In the Indian context, this is true of punctuality norms, certain kinds of group discrimination, and even phenomena like child labor." "Year after year, our Independence Day only seems to mark freedom from colonial oppressors. But the Indian state is free to oppress and expropriate -- by either ignoring private disorder or imposing public oppression, or most often, both," wrote Prof S Rajagopalan. The strong will always oppress the weak. Simple.

How many whammies will we face?

"Commentators who claim that the precipitous fall in the rupee is the cliched 'blessing in disguise' are missing a number of profoundly critical points," wrote A Barua. For one thing, this is not the 'calibrated depreciation' that would give exports a nudge. Instead, it is a 'run' on the rupee riding on capital flight that needs to be addressed squarely. It is true that other currencies are depreciating as well but we are beating them by a mile." The Turkish lira which traded at 3.5 to the dollar in 2017, when Donald Trump was sworn in, was trading at 6.0853 yesterday. Turkey was downgraded to three notches below investment grade by Moody's and four notches below investment grade by S&P. "By making the currency more difficult to trade and limiting the ability of both domestic and overseas banks to hedge their currency exposure, the decline in the currency could well regain its pace in the coming days, after last week's late rebound," said M Hewson, chief market analyst at CMC Markets UK. Why is the rupee falling? "The weakest currencies have been the ones with the most external hard currency borrowing (Turkey), political turmoil (Brazil and Turkey) and/or the highest current account deficits (Paksitan, 5.7% of gross domestic product). A stubbornly high oil price has added pressure on currencies like the Indian rupee and the yuan," wrote N Ramachandran. Emerging markets are facing a double whammy from the US Federal Reserve, said Reserve Bank Governor Urjit Patel. "Given the rapid rise in the size of the U.S. deficit, the Fed must respond by slowing plans to shrink its balance sheet," wrote Patel. " If it does not, Treasuries will absorb such a large share of dollar liquidity that a crisis in the rest of the dollar bond market is inevitable." Actually it is a triple whammy. The Federal Reserve is raising its Funds Rate, the Fed is gradually selling bonds it acquired during its quantitative easing program and will also have to borrow more to fund increasing fiscal deficit due to tax cuts. Higher interest rate along with tightening dollar liquidity is making the dollar strong which is bad for emerging markets. Why? "In 2017-18 our import bill for goods exceeded exports by $ 160 billion and is likely to be about $190 billion this year. Depreciation makes imports dearer and exports cheaper." So, that should be good. "However reams of studies have shown that a weaker rupee does not by itself boost the volume of exports." India's economy grew by double digits twice during the Congress led UPA government, wrote AR Mishra. How did they achieve this miracle? "Some economists and political scientists suggest that corruption is a lubricant for faster growth," wrote A Maira. There was certainly a lot of that during the previous government. Raising interest rate in India is not enough. The Reserve Bank should raise foreign exchange by issuing dollar bonds to Non-Resident Indians, thinks Barua. But, that will add to foreign currency debt. We have to increase exports any way we can, wrote A Kant. But first, we must deal with our whammies?

'Sampo' generation maybe the solution to earth's problems.

"An increasing number of South Korean women are choosing not to marry, not to have children, and not to have relationships with men. With the lowest fertility rate in the world, the country's population will start shrinking unless something changes," said a BBC article. "Rather than be part of a family, I'd like to be independent and live alone and achieve my dreams," said Yun-hwa, a web comic artist. She thinks married women are slaves of men. This is called the Sampo Generation. "The word 'sampo' means to give up three things -- relationships, marriage and children." South Korea has a fertility rate of 1.2, which means children per woman, as have Singapore, Hong Kong and Moldova. About 1% of India's population is single. They are 28-42 years old, live in cities and earn more than Rs 50,000 per month. They are know as 'super consumers' because of their ability to buy expensive things. 15.6% of urban households consist of one or two people. Younger people live in smaller apartments, value experiences more than possessing material goods, do not like clutter and are concerned about the environment. Being somewhat minimalist, even if not fully so. In 2011, 35% of rural families had two wage earners compared to only 26% in urban areas, and of these 42% of rural families were double-income-no-kids, or DINKs, compared to 22% of urban families. Unfortunately, the number of such people is small, so the population of the world is still growing. Scientists have worked out mathematical models predicting an end to intelligent life on earth because of the damage being caused by human beings. Or there could be a massive war to end the 'long peace' after WWII. With today's weapons most of living organisms, including humans, could be wiped out. Rumor has it that North Korea has developed biological agents for a future war, which include plague, anthrax, viral hemorrhagic fevers and smallpox. Viral hemorrhagic fevers cause outbreaks regularly and, except for yellow fever, no vaccines exist for the others at present. A vaccine for Ebola virus has been developed but is as yet not available for general use and there are several Dengue vaccines but are indicated only for those who have already suffered an episode of Dengue. Smallpox was officially eradicated in 1979 so there is no immunity to the disease and vaccine production has stopped. "The quality of human life is, contrary to what many people think, actually quite appalling," said David Benatar, who is an "antinatalist", which means he believes that human beings should stop having children. It is hard not to believe this when we see children begging by the roadside. Even radiation is less dangerous than humans as Chernobyl shows. Perhaps the women of South Korea are showing us how to save the earth.

Indian tortoise much safer than Chinese hare.

Foreign Institutional Investors, FIIs, bought $207.92 million worth of Indian shares in July and $220.3 million worth in August, having sold $253 million worth till July. India has attracted the maximum from FIIs, followed by Thailand with $67.4 million and Malaysia with $5 million. They have sold $3 billion worth of Japanese stock and $10.5 billion worth in China. "India depends less on commodities and also has low external debt, as well as enough exporters to gain from rupee depreciation. So, it is a well balanced equity market," said S Sharma. India is much more steady, said Ruchir Sharma. "In emerging markets, the volatility in terms of economic growth, exchange rates tends to be much greater than India.This is a very steady-as-she-goes economy." In fact, Sharma is much more worried about the Chinese economy and the effect it will have on other emerging market countries than he is about Turkey. The crisis in Turkey is created by its president Recep Erdogan. "Of late his reckless economic policies -- including setting interest rates at artificially low levels, and driving up debt, deficits and inflation -- have only made matters worse." China does not import all its requirements like Turkey does, it does not have to borrow dollars to finance its imports and it does not suffer a trade deficit. What it has is enormous domestic debt and is susceptible to a flight of currency. China has not succeeded in making its currency, the renminbi, international. As the Federal Reserve in the US raises interest rates the dollar will strengthen. "Right now Chinese can earn earn the same interest rates in the United States for a lot less risk, so the motivation to flee is high, and will grow more intense as the Fed raises rates further." If China raises rates to attract FIIs its economy will slow down. Though Turkey has foreign debts of $467 billion it will not have as much effect on emerging market economies as a devaluation of the renminbi will have, agrees R Napier. "As we discovered in 1994, when China did its last major devaluation, that had punitive impacts on anybody competing with China. I believe that Chinese devaluation would be the worst among all these issues for the emerging markets." "But it seems to me that among all the emerging markets India, from an economic perspective, remains one of the most flexible." We export little compared to China, just $25.8 billion in July, after a 14.3% rise, but, apart from oil, our imports are not essential for living. The government increased customs duty on 400 imported items recently, so it is not worried about reaction from the people. A devaluation of the Chinese currency will be troublesome indeed. The hare seems to be in greater danger than the tortoise. Old story.

Spirituality cannot be bought.

"Along the river Beas in North India sits a sprawling spiritual commune that's somewhere between a traditional ashram and a Florida gated community," wrote A Alstedter. "It's home to 8,000 devotees of master: Gurinder Singh Dhillon. His group, the Radha Soami Satsang Beas, says it has more than 4 million followers worldwide. Many call him a God in human form. But in the secular world of money, Dhillon, 64, is a key character in one of the most dramatic collapses in the annals of Indian business: The unraveling of the financial and healthcare empire owned by the Singh brothers, Malvinder and Shivinder." "Over the years, the brothers' main holding company loaned Rs 2,500 crore to the Dhillon family property businesses largely controlled by them, according to documents and people familiar with the matter." The brothers sold their pharmaceutical company Ranbaxy to Daiichi of Japan in 2008 for Rs 150 billion. The brothers did not disclose that Ranbaxy was being investigated by the FDA in the US and ended up paying a fine of $500 million in 2013. A tribunal in Singapore upheld a charge of concealing information against the Singh brothers and awarded $550 million to Daiichi. The brothers filed a case in Delhi High Court against the Singapore tribunal but have now been told to pay up. Ranbaxy was built by their grandfather Bhai Mohan Singh and taken over by their father Parvinder. The brothers had sell their house in Lutyens Delhi to their uncle Analjit for Rs 1.85 billion. A private equity firm Siguler Guff & Co have a 6% stake in Religare Finvest Ltd. It has filed a case in Delhi High Court accusing the brothers of "diversion, siphoning and digression of assets" and charge that the Singhs "are engaged in systematically plundering" Finvest. Why are the brothers in such a mess? A property boom in 2010 presented an opportunity for instant wealth. "The Singhs' resources were marshaled to help the Dhillon family build a real-estate empire. Two companies, Prius Real Estate Pvt. Ltd and Lowe Infra and Wellness Pvt Ltd were set up by people close to the guru, and although partly hidden by layers of shell companies, the Dhillon family had ownership interests in both, people familiar with the matter say and filings show. Over the next two years, these firms together received about Rs 2,000 crore in zero-interest loans from the Singhs' private holding company or its subsidiaries..." At least the brothers were not castrated for buying property as another guru Ram Rahim Singh did to his followers. 'Guru' means 'teacher' and are meant to show the path to spiritual salvation. Sadly, some of them are charlatans. Although not a case of 'shirtsleeves to shirtsleeves in three generations' the story of Singh brothers has salutary lessons.

The danger of woolly headed dreamers.

Pakistan has lost five wars with India, namely in prosperity, longevity, lowering of fertility rate, openness of economy and childhood mortality rate, wrote R Saran. Now that former cricketer Imran Khan is set to become prime minister India should help Pakistan become stronger. "For instance, Indian companies should be allowed and encouraged to hire from top Pakistan campuses, even for one or two years." "Aspiring cricketers in Pakistan will dream of playing in IPL if we unblocked their entry. A budding artist (actors, singers, comedians...) in that country will look forward to hitting the big stage in India, if we don't hum and haw over granting him a visa." How is that going to benefit India? "We should want average Pakistanis to see India as a source of good to them. They will then begin to resent whatever power comes between that 'good' and them -- whether that power is in Rawalpindi or Islamabad or Beijing -- or even Srinagar." Firstly, Imran Khan is a puppet of the army which got the Supreme Court to put Nawaz Sharif and his daughter Maryam in prison. But, even that was not enough so the Election Commission did not allow party representatives to be present during counting of ballots and delayed announcing results. Even as Gen Pervez Musharraf, then President of Pakistan, pretended to be on a peace mission to India in 2005, he had brought along members of ISI and Laskar-e-Taiba who later planned the attack on Mumbai in 2008. David Coleman Headley visited Mumbai 7 times, the majority of visits from Pakistan, to take videos of the city. Pakistanis know that their army, especially the ISI, supports terrorism against India but over 75% still trust the army. School textbooks teach hatred against Hindus and against India, reported the Pakistani newspaper Dawn. Saran does not seem to know that Pakistani actors have worked in Bollywood movies, and if we are stopping them now aren't there many reasons for that? Our soldiers are regularly paying with their lives to keep us secure from Pakistani attacks. They even dare to demand compensation for not playing cricket with them. Many Pakistani patients are being treated in India on humanitarian grounds but even here they abuse us for asking that their government should certify genuine patients. Former RAW chief Vikram Sood said that peace talks with Pakistan is futile because enmity with India is the only way for the army to retain control of its business interests. "It is now the largest corporate sector in Pakistan. It owns land, owns properties, runs fertiliser factories, runs bread factories, runs atta (wheat flour) factories...It also runs international logistics cell which supplies goons all over the country....(and) heroin." Pakistan is on the brink of bankruptcy and if it becomes a colony of China these same terrorists may turn against the army. Sadly, India is full of woolly headed dreamers who would love to continue with unending 'constructive dialogue', while Pakistan merrily continues to bleed us through a 'thousand cuts'. Blinkered Indians or Pakistani army, who is the bigger danger?

The effect of external on internal.

"The Indian economy seems to be in the midst of a strong growth rebound," wrote an editorial in the Mint last month. "Production of passenger cars, commercial vehicles, consumer durables, steel, cement, -- which are good proxies for overall economic activity -- show strong momentum." The concerns were a higher inflation, rising interest rates and private sector investment. Figures have changed this month. Wholesale Price Index has fallen to 5.09% in July from 5.77% in June, while retail inflation fell to 4.17% in June, the lowest in 9 months. This is good news because the pressure on the Reserve Bank to tighten monetary policy to keep retail inflation to its target level of 4%, set by the government in 2016, is reduced. Trouble is that the trade deficit "soared to a near five-year high of $18 billion". This is partly due to a rise in the price of crude and partly due to a 7-month high in gold import in July. The rupee has fallen to 70 against the US dollar. Higher prices of imports will reduce consumption, which is good, but a higher price of oil will add to transport costs of everything. The rupee has fallen 2000% since independence, wrote SC Agarwal. While the fall in early years can be ignored because there was hardly any infrastructure the fall after 2007 is perplexing. The rupee was trading at around 39 to the dollar but had fallen to 48.5 by 31 December 2018. This was at a time when the subprime crisis was unraveling in the US, Lehman Brothers collapsed in September 2008, and the Federal Reserve cut its Funds Rate to 0%. Since the crisis was in the US and its interest rate was at 0% one would expect the dollar to be weaker, instead the rupee fell, and has not stopped since. "Rupee is depreciating due to external factors. There is nothing at this stage to worry," said Economic Affairs Secretary SC Garg. The Reserve Bank has been selling dollars to soften the fall so that our foreign exchange reserves have fallen by over $23 billion since a record high in April. By reducing imports and increasing exports a weaker rupee should be a good thing, wrote R Kishore, but it means that India loses the beneficial effects of cheaper crude oil. The government said that we have nothing to worry because it is due to external factors, implying that there are no problems with the domestic economy, but the Indian government has no control over external factors, so what if these factors become worse? The Finance Minister is unable reduce enormous taxes on fuel because fiscal deficit will go out of control. The problem is that politicians think they can engineer the economy, wrote Prof S Rajagopalan. "While our prime minister has often disavowed socialism and criticizes the Congress' socialism on an almost daily basis, he is the most ambitious planner of them all." External plus internal, we have both.

Does independence mean freedom?

"As India celebrates the 71st anniversary of Independence, a blasphemous question is worth asking: are the people of India freer today than they were on August 14, 1947?" asked RS Kapoor. Elected politicians do not dare to question party leaders. "Is it possible for a Congress leader to challenge the supremacy of Sonia and Rahul Gandhi today? Or, for the matter, for a Bharatiya Janata Party leader to question the decisions, let alone the leadership, of Prime Minister Narendra Modi and BJP president Amit Shah?" The fact is that the Gandhi family is the glue that holds the Congress together. Without the family all leaders are equal and will fight for supremacy, resulting in a breakup of the party, as may happen to the DMK in Tamil Nadu after the death of Karunanidhi. Secondly, only the Gandhis have name recognition throughout India. P Chidambaram is recognized in Tamil Nadu, Digvijaya Singh in Madhya Pradesh and Yogi Adityanath in Uttar Pradesh. In the last municipal elections in Delhi the BJP replaced all its sitting councillors with new candidates to rid itself of allegations of corruption. Thus, all BJP politicians are terrified of Modi and Shah because they hold absolute power to destroy anyone's political career. "In a similar fashion, business tycoons have been tamed. Once upon a time there was an industrialist called Jamnalal Bajaj (1889-1942)", who "participated in, among others, the non-cooperation movement in 1921, the boycott of Simon Commission in 1929, the salt satyagraha in 1930, and the anti-war campaign in 1941". Freedom of expression and freedom of action are severely curtailed today. "In the name of helping the poor, wealth creators -- be they farmers, business magnates and entrepreneurs -- were tied up in red tape, shackled by a zillion controls and regulations, and often subjected to extortion by politicians and bureaucrats." It is the lack of quality education for a majority of people that is holding India back, wrote Prof D Kapur. "At the most elemental level, the lack of decent education for most Indians has meant that they have struggled to realise their potential as citizens in Indian society and weakened the most important ladder of social mobility." For Bill Gates, "the biggest disappointment when it comes to India is its education system". But, not just education, standards of services are very poor in India, wrote R Kher and P Gupta. "Anyone who has paid for services in India knows the pain of getting work out of service providers with no benchmarks for their work." The primary responsibility of the state must be the security of its citizens but it is failing miserably in that. So, are we less free than before independence? The British came from far away and allowed people to let out steam as long as they could plunder our wealth for their nation. The present lot are plundering our country for personal enrichment and power. They cannot allow any freedom. Happy Independence Day to all Indians.

Which strategy will win, tearing or blowing?

General elections in India must be held by May of next year and Prime Minister Modi has been tearing into Congress. He tore into Congress during the recent no confidence motion in the Lok Sabha. In February he tore into Congress, holding it responsible for the non-performing assets in banks and also for promoting the interests of one family (Nehru-Gandhi family) over the interests of the nation. He tore into Congress in Karnataka in May, accusing it of blocking every avenue of development. "When the Lokyukta in the state is not safe, how can one expect the common people to be safe under the Congress government," he asked. Indeed. But, he forgot to mention that his government has not appointed a Lokpal in 4 years. In a display of shameless time wasting the Attorney General asked the Supreme Court to make it clear what details it wants so that he can file another affidavit. There was more tearing, this time in UP, when he promised to take on, "Those with vested political interests shed crocodile tears regarding welfare of Dalits, backwards and the poor while we are taking measures for their welfare." Not able to stitch up so much tearing Rahul Gandhi has been blowing a bugle for the coming polls. His call to arms forced Modi to sit. "However, when our workers stood up, Modiji was forced to sit in a sea-plane." He practiced blowing his bugle in March when he told a rally that jumla has resulted in the poor living in a 'Modi maya' of crony capitalism. Very profound. Is incumbency going to be an advantage in 2019 or a handicap for Modi? "In the 2014 election, the BJP captured 282 seats out of 428 seats it contested nationally (66%)," wrote M Vaishnav and M Lillehaugen. It won 216 seats out of a total of 273 (nearly 80%) in 8 states, "with just 31% (of votes), it earned 52% of parliamentary seats". "As many as 44% in May 2017 named Modi their preferred prime ministerial choice. One year later, that percentage had declined to 34% -- marginally lower than were it stood in 2014, at 36%." "In May 2017, 45% of respondents intended to vote for the BJP-led National Democratic Alliance (NDA) while just 26% sided with the Congress-led United Progressive Alliance (UPA)" but one year later "the NDA's share dropped to 37% while the UPA's share grew to 37%". "History suggests that incumbency tends to hurt ruling party politicians in India more than it helps," but Modi is an indefatigable campaigner, and the choice of candidates and caste will have a big influence. Also, the BJP has more than 4 times as much money as the Congress which will help to buy votes. It is between politicians and the vote bank, we the educated middle class do not matter. Still, it is amusing to watch.

How long will they tolerate freedamn in smilence?

Because of strict censorship laws a new kind of slang has developed in China, called 'Reci' which means 'hot words'. China always had a 'Great Firewall' but since Xi Jinping became president censorship has become much more sinister. "Before Xi Jinping we feared only that they would delete our posts. In the worst situation, they would delete (your account). But since Xi Jinping came to power this changed. They began to arrest people," said Qiao Mu, an academic. If the offending person is living abroad the police start harassing his family living in China. The law has been left deliberately vague to instill fear into people. "To be safe, a person must pull back in every respect, and moreover must become his or her own policeman," wrote P Link. It is not a surprise that Animal Farm by George Orwell is banned in China, but the children's cartoon Winnie the Pooh and the letter 'N' are also banned. So, people have started to combine words to create new meanings. Thus, 'antizen' combines 'ant' and 'citizen' to show helplessness. 'Innernet' denotes inner controls on the internet. 'Freedamn' mocks the lack of freedom, 'harmany' is harmful to many and 'smilence' shows the suffering in silence. Those who invent such words are called 'niubi' in admiration. Recently an essay by Prof Xu Zhangrun at Tsinghua University in Beijing criticised the Communist Party for ending the two term limit for Xi Jinping and warned of "The possibility of economic downturn intensifying". Would he dare to write such things openly if not assured of Xi Jinping's ouster? "Xi's name seemed to have disappeared for a while from the cover of People's Daily, replaced with articles about his deputy Li Keqiang," but "For now, Xi remains in full control of the government and party," wrote Lily Kuo. Party officials are blaming Xi Jinping's aide Wang Huning for "mishandling the propaganda and hyping up China too much". "In the trade war, the line of thinking in the propaganda has been that Trump is crazy," said an official. "In fact, what he is scared of is us getting strong." Trump is not the only one. Ask Japan, the Philippines or Vietnam. Naturally, China's state media resorted to abuse, as it usually does, saying that Trump "was starring in his own 'street-fighter style deceitful drama of extortion and intimidation'". That is very polite. It refrained from calling him "eunuchs" and "paper tiger". Chinese leaders think that they have a right to  to behave with "Chinese characteristics", but other countries, such as the US, are unwilling to accept blatant cheating in trade. Even the Belt and Road Initiative may cause problems if other nations are forced to default on their loans. Xi Jinping may yet have to join his old friend Bo Xilai. That would be great for a movie.

They are saying what Americans already believe.

Everyone knows about illegal immigrants from Central America entering the US, "But one of the fastest-growing groups of illegal immigrants come not from the barrios of South America or the slums of Africa, but mega sized cities in India -- 8,000 miles away from the tiny town of El Centro, California, where a handful of Indian nationals are entering the US everyday, officials say," said a news report on Fox News. "Agents said they arrest five to 10 Indian nationals a day, with most young men claiming asylum as victims of political or religious persecution." Which is patently rubbish because Sikhs and Gurdwaras are everywhere in India. They pay people smugglers to take them into the US. "Some of these organizations are charging Indian nationals up to $25,000 to get smuggled into the US," said El Centro Sector Chief G Chavez. Indians claim to be adults in Mexico, because minors are arrested, and claim to be juveniles in the US because minors are released. So they have been expertly coached. $25,000 is over Rs 1.7 million, not a small amount for 'persecuted people'. The truth is elsewhere. The Punjab government had no money to pay power subsidies, salaries and pensions, a total of Rs 61 billion, in April. In 2015, the Punjab government mortgaged jails and homes for widows to raise money. Punjab has a high rate of youth unemployment and with no prospects of getting jobs there is a very high level of drug addiction in the state. Jobs are not a problem only in Punjab, though the situation is particularly grim in that state. Marathas are agitating in Maharashtra for reservations in government jobs. Falling commodity prices across the world have resulted in lower crop prices in India. Those dependent on agriculture for livelihood are suffering. Jobs in the private sector need higher education and knowledge of technology which put them beyond the reach of rural people. Hence, there is an enormous demand for government jobs. But, 50% of government jobs are reserved for lower castes, described as Scheduled Castes (SC), Scheduled Tribes (ST) and Other Backward Classses (OBC), who will violently defend their advantage if challenged. The Prime Minister admitted that reservation is here to stay. "Even if reservation is given, there are no jobs. Jobs in banks have shrunk because of information technology. Government recruitment is frozen," said Union Minister Nitin Gadkari. Governments in states and the center are sitting on over 2.4 million vacancies, maybe because these jobs have become redundant because of technology or because governments are battling to reduce their deficits and do not want to increase their expenditure. Western countries have a stereotypical opinion of India and the illegal migrants are pandering to it. Can't stop Americans from being stupid. 

The weakness of being strong.

Yesterday Trump doubled tariffs on aluminium and steel imports from Turkey. The Turkish lira slumped by 20%. Turkish President Erdogan asked his followers "to exchange their dollars, euros and gold for Turkish lira" but how many follow his call remains to be seen. Turkey is holding US pastor Andrew Brunson under house arrest, accusing him of links with the Kurdish Workers Party and the Gulenist movement, both classified as terrorist organisations by the Turkish government. Earlier this month the US levied sanctions against Turkish Minister of Justice A Gul and Minister of Interior S Soylu. As a member of NATO Turkey should be an ally of the US, but relations have soured because the US refuses to extradite Fethullah Gulen, a preacher with a large following, who lives in the US. Erdogan initially won power with Gulen's help but blamed Gulen for conspiring against him when caught in a corruption scandal. Then came the staged coup in 2016 which Erdogan used for purging and imprisoning thousands of suspected Gulen supporters. Gulen has strenuously denied any part in the coup attempt. Erdogan has been demanding extradition of Gulen from the US but has to prove his case in a US court. That would take time and a lot of expense and may not be successful, so he decided to arrest the pastor and use him for exchange. The US does not give in to a hostage situation easily, hence the tariffs. Erdogan has been winning elections by generating growth by borrowing abroad and is facing refinancing of $230 billion this year. Inflation is in excess of 15%, yields on 10-year bonds is at 18% and Erdogan is totally against raising interest rate, "Because my belief is: interest rates are the mother and father of all evil." Erdogan can bully anyone at home but finance is international and he will soon learn that he cannot stop US Federal Reserve from raising rates which will hammer the lira even further. Meanwhile, Turkey's neighbor Iran revealed that it rejected 8 requests for meetings by US President Donald Trump. The Iranian rial fell lower than 100,000 to the dollar as Trump announced renewal of sanctions on Iran. Sanctions on Iran resumed a few days ago. Why did Iran refuse Trump's invitations to meet? Because moderates did not want to admit that they made a bad deal and the hardliners were against any deal all along. The ruble and the Russian stock market fell as Trump levied further sanctions on Russia in response to a staged Novichok attack on a Russian traitor skulking in the UK. A weak man can become strong but a strongman can never appear weak. Trump has humbled a lot of strongmen. He better watch out.

How do they manage without a refrigerator?

The International Monetary Fund has released its forecast for the Indian economy for this and the next financial years, wrote M Chakravarty. The GDP will grow 7.3% this year and by 7.5% the next, gross investment will grow by 32.2% this year and merchandise exports will jump by 13.2%. Money supply will increase, as will consumer inflation to 5.2%, and current account deficit will rise to 2.6% of GDP this year. Risks will come from higher oil prices and tightening of monetary policies in richer countries. Crude prices have been softening over the last four weeks because of increased output from Russia, Saudi Arabia, Kuwait and UAE, wrote N Damani. Increased output from Kazakhstan and Libya, with lower demand from China, has resulted in a glut which is having an effect on prices. The European Union is encouraging European companies not only to continue to do business with Iran but to increase business, said foreign policy chief Frederica Mogherini. Whether companies will be brave enough to risk US sanctions and how Iran reacts if its oil exports are completely cut off will have a huge effect on the price of crude and the Indian economy. Ominously, legendary investor Warren Buffett is sitting on a pile of cash because he thinks the market is overpriced. Indian markets are also zooming ever higher with no fear of a correction. Much of the growth has been due to massive government spending on infrastructure, "average road construction a day has been just under 20 km", wrote Seetharaman and Sharma. "In this context, there are big hopes for Bharatmala Pariyajana, an initiative to build 35,000 km of roads by 2022. Linked to Bharatmala is a flagship port modernisation initiative, Sagarmala, under which Rs 2.4 lakh crore (Rs 2.4 trillion) worth of projects have been awarded since 2015." We need to grow fast because the latest National Family Health Survey (NFHS) shows that the "penetration of refrigerators has roughly doubled over the past decade to reach 30% in 2015-16", wrote Kundu and Bhattacharya. That is a pathetic statistic in a country where temperatures are above 30 Celsius for 8 months in the year. Not possessing a refrigerator means waste of money due to rotting of food and, more importantly, waste of time because food must be cooked before every meal, which prevents women from working. To make matters worse the government is to increase import tariffs on refrigerators, washing machines and televisions probably because indirect tax collections through the Goods and Services Tax have been short by Rs 400 billion. Just 9 months left for elections. Is there enough time?

Only the winners are free.

In praise of globalization Prof Lawrence Summers wrote, "This has been more successful than could reasonably have been hoped. We have not seen a war between leading powers. Global living standards have risen faster than at any point in history. A material progress has coincided with even more rapid progress in combating hunger, empowering women, promoting literacy and extending life." But, there is "a growing suspicion on the part of electorates that globalization is an elite project that primarily benefits elites". "Somehow branches for financial institutions in foreign countries seem to be a higher priority than protections for displaced workers. And protection for intellectual property of global corporations is a more focal concern than preventing unfair competition from foreign companies that escape regulation." Those who lost their jobs because of free trade were not adequately compensated, and voted for Donald Trump in anger, wrote E Alden. Having levied 25% tariffs on $34 billion worth of Chinese goods Trump has announced 25% tariffs on another $16 billion. In retaliation China has imposed tit-for-tat tariffs on US goods, especially soybeans, to specifically hurt farmers who voted for Trump. This infuriated Trump who called the tariffs "vicious". "Completely free trade is unlikely because countries have vastly different economies in different stages of development, different degrees of domestic economic and political freedoms and separate currencies," wrote AG Shilling. If trade is completely free, weak countries will accumulate trade deficits, "Their currencies would collapse as foreign investors and locals flee and deplete foreign exchange reserves. It cost China $1 trillion to accommodate a capital flight in 2014." Collapse of asset price bubbles led to a flight of capital from East Asian countries in 1997, leading to a 70% devaluation of their currencies and restructuring of their economies by the IMF. Before that, in 1992, George Soros made one billion pounds by betting against the Bank of England, making him a legend in the history of financial wizadry. How economies differ was clearly demonstrated last week when the Reserve Bank of India and the Bank of England raised borrowing rates by 25 basis points, the Federal Reserve in the US kept its funds rate on hold while the Bank of Japan confessed that it has failed to reach its target of 2% inflation despite negative interest rate, wrote VA Nageswaran. Countries possess different quantities of natural resources. Oil producing nations want the highest price for oil, while consuming nations like India would like a very low price. Perfectly free trade may not be possible or even desirable. If trade is free of exploitation of the weak by the strong, as during colonialism, the results will be equitable for everybody. Resistance to trade may dissipate.