Will technology help us escape their clutches?

"Finance Minister Nirmala Sitharaman on Friday said banks cannot refuse credit to MSMEs under the emergency credit facility and any refusal should be reported." The minister also said the Finance Ministry is working with the Reserve Bank of India on the extension of loan moratorium or a restructuring scheme for the hospitality industry." But, already, "A Reserve Bank of India (RBI) stress test on banks indicates that gross non performing asset (GNPA) ratio of all banks may increase from 8.5% in March 2020 to 12.5% by March 2021 due to the sharp slowdown in the economy as a result of the lockdown imposed to fight the Covid19 pandemic." The RBI releases its report on stress tests for banks twice a year, in June and December, wrote Vivek Kaul. In March 2015, the RBI forecast NPAs would reach Rs 4.5 trillion under 'severe stress' scenario "when all hell breaks loose, with growth collapsing and interest rates shooting up". "By March 2018, the total NPAs stood at Rs 10.36 trillion." Former Chief Economic Adviser Arvind Subramanian worte, "We know in our bones that the amount of stressed assets is always and everywhere at least 20-25% more than what people believe and what RBI claims." "India is witnessing the return of a worrying trend for greater tolerance for loose lending and provisioning practices, which risks putting it on the same path that took Japan to the 'lost decade' in the 1990s, former central banker Viral Acharya said," wrote Anirban Nag. We should be so lucky. In 1980, Japan had a GDP of over $1 trillion, while India's GDP was less than one-fifth that of Japan at $189.5 billion. The gap between the two nations has narrowed due to Japan's lost decade when it fell into a liquidity trap, but Japan's GDP is still at least 2.5 times that of ours, with a fraction of the population. Japan's GDP per capita was $40,365 in 2019, compared to our per capita GDP at $2169. Bad loans of our banks was first pointed out by Ashish Gupta. "Ashish Gupta is surprised that not a single Indian billionaire sued him in the last decade. In his 2012 'House of Debt' report for Credit Suisse Group AG gave investors an early warning about the dangerous levels of the delinquent borrowing by many of India's top business groups." Former Governor of RBI Prof Raghuram Rajan suspects that "A lot of damage wreaked on the corporate sector by the lockdown will be uncovered", meaning "many firms may default on paying back their loans". "The RBI has been diluting some of the toughest measures prescribed for financial stability and its surplus liquidity policy has weakened inflation-targeting and shifted the goalpost, former deputy governor Viral Acharya has said." The government must put more capital into public sector (PSU) banks. "The problem with recapitalisation of PSU banks is the lack of fiscal discipline," said Prof Acharya. "You want to own, but your don't want them to be a burden on the exchequer. These are incompatible." Instead the government wants to pass a Financial Resolution and Deposit Insurance (FRDI) Bill which insure a paltry Rs 500,000 of people's deposits if a bank collapses. "There has been a growing interest in  cryptocurrencies since Bitcoin captured the imagination of people," wrote Karan Bhasin. Naturally, the RBI banned them but the Supreme Court overturned the ban. People hate repression. Technology will help.     

In Gold we trust.

The Indian government wants citizens to declare any gold they possess. "Under the proposition made to Prime Minister Modi, the government plans to ask people with unaccounted holdings of the metal to declare it to tax authorities and pay levies, penalty,  the people said, asking not to be identified citing rules on speaking to the media." "Modi unveiled three state-backed plans in 2015 to try to tap the world's largest private gold stash of about 25,000 tons held by households and institutions to trim physical demand, and reduce imports by providing people with alternative avenues of investment." Most people were uninterested. They are doing this because direct tax collections fell short of revised estimate by Rs 1.42 trillion in the last financial year, ended 31 March. "The Goods and Services Tax (GST) collection and consumption of diesel -- the two weathervanes of economic health -- fell by 56% and 42% in the first two months of the current financial year compared to the same period a year ago due to nationwide lockdown." Since India does not produce gold the metal is imported from abroad. There is an import duty of 10%, plus GST of 3% on gold. There is a tax of 5% on making gold jewellery. Anything on which we pay tax cannot be illegal. However, high rates of tax encourage smuggling. Smugglers can train themselves to hide 800 grams of gold, worth Rs 3.1 million, in their rectums. Indians do not buy gold bullion. The vast majority buy gold jewellery from registered shops and cannot be held responsible if jewellers are using smuggled gold. Though unemployment level has come down from initial highs, loss of earnings due to the coronovirus pandemic has forced Indian families to rush to borrow money against their gold ornaments to take advantage of the soaring price of gold recently. Heavy handed slashing of interest rate by the Reserve Bank (RBI) has led to negative real interest rate, meaning savers are getting less interest than the loss of value of the rupee through inflation. "The growth shock to India's economy from the Covid-19 pandemic will trigger more weakness in the rupee, dragging it down toward an unprecedented 80-per dollar level," wrote Subhadip Sircar. A weaker rupee will reduce its buying power thus making our savings useless. People are now gambling in stocks to get higher returns. "Retail investor turnover in the first quarter of the current fiscal has shot up 78% from the year-ago period to Rs 33,731 crore (Rs 337.31 billion) in the cash segment. The number of demat accounts have also jumped by 2.9 million in January this year till May," wrote Clifford Alvares. This is not the time to invest in stocks, wrote Mohit Satyanand, but to invest in safe options. But the government has taken away all safe options. Perhaps the government wants to take over all the gold from Hindu temples offered by devotees. Quo vadis Hindutva? This is why Indians cling to gold. Because they have no trust.

Just pay them their dues.

In May, Finance Minister Nirmala Sitharaman presented an economic stimulus package worth Rs 20 trillion in five instalments. The first item in the package was, "Collateral free loans of Rs 3 lakh crores (Rs 3 trillion)  for MSMEs-- a move that'll enable 45 lakh (4.5 million) units to restart work and and save jobs." MSME stands for Micro, investment of up to Rs 10 million and turnover up to of Rs 50 million, Small, investment of up to Rs 100 million and turnover of Rs 500 billion, and Medium Enterprises, investment of up to Rs 500 billion and turnover of Rs 2.5 billion. According to this definition 99% of businesses in India are now in MSME category "enabling them to access various sops such as concessional finance, though the main benefit of excise duty relief has been lost ever since the GST regime was implemented". The annual report by the MSME ministry says that the entire non-agricultural informal sector consists of 63.4 million units "contributing 29% of gross domestic product (GDP)", wrote Prof R Nagaraj and Vikash Vaibhav, but "there were 1.6 million registered enterprises, employing on average six workers" so that "only a small creamy layer of MSMEs garnered most of the benefits". In a meeting with Sitharaman banks pointed out that many small businesses were not applying for these loans because they could not pay stamp duties levied by states, wrote Shayan Ghosh. "A fear of closing down is palpable. India has over 60 million MSMEs and some estimates suggest that 10-15% of them could wind up during the year," wrote Gautam Das. "The Indian Express recently reported that banks had sanctioned 43% of the targeted Rs 3 trillion" under Emergency Credit Line Guarantee Scheme (ECLGS) as on 23 July, but a study by the International Finance Corporation in 2018 showed that "of the overall MSME debt of $1.1 trillion, 84% is financed from informal sources". An analysis of 961 MSMEs showed that only 3 micro, 25 small and 48 medium enterprises managed to secure a new loan, whereas 63 out of 347 large companies were given new loans. While the government collects taxes even before companies can earn a profit, government owned companies are extreme laggards when it comes to paying their suppliers, wrote Tanya Thomas. "Business owners said if governments pay the dues on completed work, much of this working capital pressure can be eased." Comparing with the period after demonetization in 2016, "it is likely that economic growth over the next few months would get over-stated", wrote Pranjul Bhandari. This is because "India only gauges the informal sector once every five years through survey, and then revises past GDP growth data" so the government extrapolates growth data from the formal sector to the informal sector. When there are no data, jumla wins every time. Brilliant strategy.     

A transfer of funds from depositors to robbers.

Though Prime Minister Narendra Modi is confident that India will definitely get its growth back, "Global forecasting firm, Oxford Economics on Tuesday said it expects India's GDP growth to lose momentum from late third quarter (October-December) of the current fiscal as the push from initial reopening fades. It further said India fares the worst in its Asia recovery scorecard, implying that the country will likely take the longest among major economies to converge to its pre-coronavirus growth level." The government is considering a direct monetization of its borrowing by the Reserve Bank (RBI). "Now Viral Acharya, a former deputy governor of the Reserve Bank of India and fierce advocate of RBI autonomy, has described monetizing deficits as a 'deeply flawed' approach and reminded us of the inflation outbreaks and external sector instability brought on by doing so in the past," wrote an editorial in the Mint. As for the threats of inflation and a fall in the rupee, "the danger of price spikes is arguably too low for it to deter public spending and cash giveaways at this point" and, if the rupee falls, the RBI "has sterilization tools at its disposal". The RBI "was under 'intense pressure' to open up 'liquidity and credit taps' to prop up the economy, and its crackdown against non-performing borrowers was being 'stayed'" said Acharya. The RBI "has been diluting some of the toughest measures prescribed for financial stability and its surplus liquidity has weakened inflation-targeting and shifted the goal post," said Acharya. Former Finance Secretary Subhash Garg dismissed Acharya's suggestion that Governor Urjit Patel quit "because of attempts to undermine the institution's autonomy", because Patel did not say so in his own book. However, he says that a circular issued by the RBI "seeking to tighten the Insolvency and Bankruptcy Code (IBC) was the cause for differences between the two sides". "The February 12, 2018 circular prescribed a one-size-fits-all approach that did not consider the specific nature of of particular sectors such as power, Garg said." Firstly, the government did not include any exemptions in the law and, secondly, this is a clear example between men of integrity, resigning their posts rather than allow misuse of funds, and civil servants, so willing to break the law. With compliant stooges in place, the IBC "which became one of the major tools for creditors to recover from the debtor has been suspended for one year". An RBI stress test for banks revealed that bad loans on their books will climb from 8.5% at present to 12.5%, wrote Aparna Iyer. "Their worst nightmare is this ratio climbing up to 14.7% under extreme duress due to the pandemic." The virus is not responsible for bad loans, the moratorium is. "Future policy on loan moratoriums remains a key issue for the Indian economy and the banking sector," said Christopher Wood. So what happens if a bank collapses from bad loans? Law abiding depositors will get only a lousy Rs 500,000 of their money back. The robbers are smiling.     

Can a fig leaf hide the GDP?

"India will see a sharp V-shaped recovery in the third and fourth quarter of the current fiscal, but FY21 GDP growth would ultimately be in negative territory as the coronavirus lodkdown led to serious demand and supply dislocations, 15th Finance Commission Chairman NK Singh said on Monday." What he probably means is that, though the shape of recovery will resemble the letter 'V', the upstroke will be much smaller than the downstroke. Trouble is, no one can tell because the new method of calculating our gross domestic product (GDP) is not understood. Calculation of GDP is updated at regular intervals by changing the base year to account for changing patterns of production and growth of the economy, but the new calculations have completely changed growth rates of the last two decades. "The GDP series suggests that India's economic boom in the 2005-11 period continued at a nearly identical pace in the 2012-18 period at just above 7%. Almost all other indicators of economic activity suggested otherwise," wrote Pramit Bhattacharya and Nikita Kwatra. Bank credit growth fell from 15% per year in the period before 2011 to 4% in the period after, projects under implementation slowed down, "wage bill of factories declined sharply" and "The latest National Sample Survey (NSS) consumption report shows rural consumption actually declined at an annual pace of 1.5% in the post-2011 phase. The ministry buried the consumption report, citing dissonance with GDP growth figures." Two independent members of the National Statistical Commission resigned because the government suppressed their report on employment. All government figures are suspect. "Economists, including State Bank of India's Soumya Kanti Ghosh, aren't buying the Statistics Department's methodology for calculating consumer price inflation numbers for April and May, which take into account prices of services that became immaterial during the lockdown that began March 25," wrote Anirban Nag. Most services, except healthcare, were closed. Even types of goods purchased by households changed, wrote Suneera Tandon and Shuchi Bansal. Sales of cleaning items, such as sanitizers and household disinfectants, increased. Sales of dishwashers jumped because domestic maids were not allowed in. "Only 14.3% of households in India own a washing machine. Penetration of refrigerators in the country stands at 34.1%." Where the government leads businesses follow. Despite an order by the Securities and Exchange Board of India (SEBI) an analysis of "the response of 50 companies that constitute the Nifty50 stock index" by the Mint showed that "most have had only sketchy information to reveal as part of their last quarter reports for 2019-20, the last such on public record". No wonder, "Credit rating agencies have approached financial market regulators for withdrawing ratings to more than 10,000 companies that are refusing to share information." The government may be concealing community spread of the coronavirus and even pressuring doctors to write different causes on death certificates but how long will it conceal a bankrupt economy? The king may have dressed in a suit worth Rs 1 million but the economy is broke. The fig leaf is about to fall off.  

The piggy bank protects against foreigners.

"Consumer and services sectors including banking, financial services and insurance (BFSI), fast moving consumer goods (FMCG), information technology (IT) and pharmaceuticals have dominated initial trends in the June quarter results season." "Analysts expect a revival in the second half of the fiscal." "The IHS Markit Services PMI in June rose to 33.7 from 12.6 in May, indicating a pick-up from the previous month, although any reading below 50 on this survey based index shows contraction." "The services sector accounts for about 55% of the gross value added growth, two-thirds of total foreign direct investment inflows into India and about 38% of India's exports." Airlines are to lay off staff in an effort to reduce losses. "Indian banks may need to raise $20-50 billion capital in the next two years as bad loans and credit costs rise due to the Covid-19 induced slowdown in the economy, brokerages and ratings agencies believe." "A fiscal stimulus is essentially a scenario where the government cuts taxes or increases spending in trying to revive the economy," wrote Vivek Kaul. "In the process. consumer demand and economic growth can be revived. Without consumer demand, who do businesses produce for?" Where will all the money come from when the government is predicting a rise in borrowing to Rs 12 trillion this fiscal? Simple, wrote Christophe Jaffrelot, just use India's foreign exchange reserves which have reached a record $517.637 billion. "The recent forex reserves surge was a result of two things. A spike in foreign institutional investments and savings in India's import bill.""Economists have theorised that holding high forex reserves are unnecessary. In fact not using them for mega-projects (like financing infrastructure projects) are lost opportunities..." That is not possible, wrote Ravi Saraogi. "A big fallacy of this proposal is that it ignores the fact that against every dollar of forex reserves shown by RBI (Reserve Bank of India) on the asset side, an equivalent rupee amount has already been created on the liability side. This is because whenever RBI acquires foreign currency, it pays for it using the Indian rupee." Buying dollars creates more rupees in the system and the RBI can also print more currency. Former governor of RBI Prof Raghuram Rajan cautioned against financing government borrowing by the RBI buying government bonds. Former central banker Prof Viral Acharya also cautioned against the RBI "monetizing the government's budget deficit, citing risks to inflation and external sector stability". reported Bloomberg. "Data from the central bank show India's external debt rose to $558.5 billion as of March 2020 from $474 billion five years ago." All the more reason not to break the piggy bank. But, the temptation!   

Will it increase GDP, or MSP?

"The Indian economy is set for a strong revival on the back of agriculture and allied sectors that are boosting the rural sector, finance minister Nirmala Sitharaman said." "Activities related to the rural economy, including tractor sales, agricultural tool sales and logistics relate to the food sector among others were 'all up and about', she said." But, "Can a high growth in agriculture boost demand?" asked Roshan Kishore. The government calculates real growth in output by adjusting against inflation, whereas purchasing power, which drives demand, depends on nominal growth at current prices. The two do not vary in tandem, and prices of fruits and vegetables are much more volatile than those of cereals. "Indian farmers have planted 79.9 million hectares with summer crops so far, according to the Ministry of Agriculture & Farmers' Welfare, up 18.3% from last year as robust monsoon rains spurred sowing in the world's leading producer of farm goods," reported Reuters. "A bumper crop this year might create a glut in agricultural markets," wrote Kishore, which will lead to a fall in prices. Worth noting that farmers have increased acreage for rice, corn, pulses and soybeans all of which are covered by the government's minimum support price (MSP) policy which guarantees a floor against a sharp fall in prices. Vegetables are not covered by MSP and so planting is dependent on last year's sales and profits, which is why farmers have reduced output of potatoes and tomatoes, leading to a rise in retail prices. Will the government have the money to buy all that extra production? The government is to spend an extra Rs 1.49 trillion providing free foodgrains to poor people rendered unemployed by the coronavirus pandemic. This will add to debts of the Food Corporation of India which are already at Rs 3.3 trillion and are not counted in the government's fiscal deficit, which, together with extra borrowing by states, is expected to be at least 12% of our gross domestic product (GDP) this financial year. Free food releases money which is then spent buying other necessities, thus boosting demand. If the government does not buy all the extra production at MSP rates we could see a rash of farmers' suicides and it may prove difficult to conceal true numbers, as it has been doing since 2015. In an effort to increase revenue, center and state governments have increased taxes on petrol and diesel exponentially which have added to costs of running tractors and pumps, all of which use diesel. Increase in cost of diesel and a lack of farm labor have led to increased mechanisation of planting this year. If this becomes a permanent feature there will be a huge surplus of unemployed farm labor. And more subsidies. Good monsoon will surely increase agricultural output. Whether that supports economic growth or leads to an increase in fiscal deficit and farmer suicides remains to be seen. When you are up the creek without a paddle you must seek any port in a storm. Is this a poisoned chalice, and will we sink or swim? A trillion dollar question.

The temptation of phone banking.

"The Reserve Bank of India (RBI) announced an extension of the moratorium on term loan EMIs by another three months i.e. till August 31, 2020 in a press conference dated May 22, 2020." A moratorium is not a loan waiver, so the outstanding amount will not increase just by the total of the missed instalments but by a lot more because of interest on interest. It is hard to understand how a moratorium helps borrowers or the economy. If someone is unable to pay because she has lost her job she is unlikely to be able to afford a higher loan at the end of six months, especially since the prospects of new employment look bleak as the economy is projected to contract by anything from 4.5%, according to the IMF, to 7.5% according to the Bank of America Securities, to 10%, according to former finance secretary Subhash Garg. Naturally, a lot of people and businesses will not be able service their debts come September, leading the RBI warn that "gross non-performing asset (GNPA) ratio of all banks may increase from 8.5% in March 2020 to 12.5% by March 2021 due to the sharp slowdown in the economy". This is based on the 'best case scenario' of a 4.4% contraction of GDP, "gross fiscal deficit of 10.9% and consumer price inflation (CPI) of 4.1%". "India's five largest state-run banks collectively have at least Rs 7.9 trillion of loans under moratorium, including loans that were stressed even before the coronavirus outbreak, regulatory filings show." "if one-twentieth of the loans under a moratorium as of 31 August are defaulted on, the overall quantum of bad loans in the Indian banking system would be close to Rs 12 trillion," wrote Vivek Kaul. A default of one-fifth loans under moratorium would result in bad loans of Rs 20 trillion. How did we get here? "The dominant owner pre-2014 didn't question risk controls in government banks even as it received significant dividends," wrote former RBI Governor Urjit Patel. That is a severe indictment of the Congress-led government which ruled India from 2004-2014, and so controlled public sector banks. "The banks themselves applied little risk analysis in sifting good from bad assets; they kept lending without much (or the requisite) due diligence", probably because of political pressure. "Furthermore, some large borrowers, allegedly, may have taken equity out of the business", which means, they diverted funds for personal use. "India's lenders and their shareholders are playing a dangerous game of hide an seek," reported Bloomberg. "Financial firms need to raise a record amount of capital, something they would like to do before the central bank's Covid-19 moratorium on repayment ends next month and they have to disclose a big jump in bad loans. So they have an incentive to pretend that their borrowers have become miraculously stress-free." The moratorium was ordered by the RBI on instructions of the government. Probably over the phone. Hard to resist.

Retail investors looking beyond the virus.

Earnings estimates of China, Korea and Taiwan are higher, while Latin America is lower. "In India's case there is an improvement in earnings revision breadth, it is more in the middle of the pack," said Jonathan Garner of Morgan Stanley. "We could see Sensex at around 40,000 again if all goes well..." The Sensex is the index of the Bombay Stock Exchange (BSE) and is trading above 37,800, down around 250 points from yesterday's close. Although foreign investors and domestic high net worth investors (HNI) have been buying equity, "Retail turnover has increased to about 57% of the average cash volumes on the exchanges in the first quarter FY21 (April-June), according to brokerage firm Motilal Oswal Financial Services," wrote Clifford Alvares. "A sharp fall in deposit rates due to aggressive rate cuts by banks in response to the Reserve Bank of India's (RBI) reduction in the benchmark rates coupled with a rise in consumer prices have pulled real interest rates into negative territory, disincentivising savings." With savings in banks losing money, "Retail investor turnover in the first quarter of the current fiscal has shot up 78% from the year-ago period to Rs 33,731 crore (Rs 337.31 billion) in the cash segment,." "Retail investors tend to participate in a big way in small- and mid-cap segments." "Online brokers report a surge in new trading accounts, and 3 million new demat accounts have been opened since February," wrote Mohit Satyanand. "The problem is compounded by a huge disconnect between the Indian household's cheerful opinion on the nation's finances, and a glum view of its own." Two economists, Pronab Sen and Shankar Acharya, predict an economic contraction of 10-12%, but over 50% of households expect a quick recovery even though "67% of respondents say they are cutting back on their spending, and 58% say their income has been negatively impacted by covid". "For the average investor, this is the time to shelter in the safety of bank deposits and government bonds." "The 2020s decade is likely to present us a succession of risks -- some known but most unknown -- like every other decade," wrote Rajrishi Singhal. "Here's a list of some financial and economic risks that arose during the last 10 years: High inflation, 13 successive interest rate increases by the Reserve Bank of India (RBI) under governor D Subbarao, a loan glut, rising non-performing assets, liquidity-led asset-price inflation, a natural resources scam followed by court intervention and then by policy paralysis, the demonetization shock, premature introduction of the goods and services tax, a collapse in demand, a financial sector crisis, and a government RBI public spat." South Korea grew 8.97% between 1960-2000 because of a 72.5% rise of labor-intensive exports, according to Prof Arvind Panagariya, wrote Vivek Kaul. "Education was given the highest priority." "An important reform in 1965 raised deposit interest rates to encourage savings. This change plus rising incomes contributed to increased savings." In India, the system makes almost all children attend schools but a large proportion do not learn basics and there is enormous pressure on the RBI to cut interest rates. Just the opposite to Korea. So, Korea is rich, we are poor.     

4% of gold reserves is fake. And what else.

"Nearly 50 years after then US President Richard Nixon ordered the aircraft carrier USS Enterprise into the Bay of Bengal to threaten India in the face of its imminent victory over Pakistan in the 1971 war, Washington has sent the nuclear-powered supercarrier USS Nimitz to the same waters in a show of solidarity with New Delhi amid tensions both countries face with China," wrote Chidanand Rajghatta. "The USS Nimitz and the USS Ronald Reagan were deployed to the South China Sea twice this month" and, "Separately, the US strike group led by the Ronald Reagan was carrying out drills with naval forces from Japan and Australia in the Philippines Sea..." Nixon pivoted towards China on the advice of his National Security Adviser Henry Kissinger, who has been exposed as a war criminal and a mass murderer. "We are about midway through the period that China has set for itself to rise to a position of greatness -- beginning in 1978 -- for which it is increasingly employing coercion," wrote Lt Gen Syed Ata Hasnain. "Yet, China's long-term strategic vision is not something that the international strategic community is adept at assessing." There is talk of a new Cold War but, "Experts see important historical differences." China's strength derives from its expanding economy so that is where attacks should be concentrated. "Beijing has made martyrs of its banks and insurers, asking them to lend to the needy, forgo profits and support the animal spirits of its trillion-dollar capital markets," wrote Anjani Trivedi and Shuli Ren. "China's Lehman moment, when isolated events cross the line into systemic effects, is just lurking round the corner." Not so, wrote Yuwa Hedrick-Wong. "With the nominal interest rate in China at around 7% and its economy growing close to 10%, the economy overall is able to service its debts comfortably." The regulator is not so optimistic. "Chinese banks should brace for a big jump in bad loans due to coronavirus-induced economic pain, the financial regulator said on Saturday, noting a deterioration of asset quality at some small and mid-sized financial institutions were accelerating." "The 83 tons of purportedly pure gold stored in creditors' coffers by Kingold as of June, backing the 16 billion yuan of loans, would be equivalent to 22 percent of China's annual gold production and 4.2 percent of the state gold reserve as of 2019," reported Zero Hedge. "In short, more than 4 percent of China's official gold reserves maybe fake." Last week regulators seized control of Chinese conglomerate Tomorrow Holdings Co and, "On Friday, the China Banking and Insurance Commission cited business violations in its takeover of Tianan Property Insurance Co of China, Huaxia Life Insurance Co, Tianan Life Insurance Co and Yi'an P&C Insurance Co, as well as New Times Trust Co and New China Trust Co." Not much trust in trust companies, it seems. Last week "US President Donald Trump followed through on a threat to revoke the United States' special relationship with Hong Kong, which in the past exempted the city from certain tariffs, among other privileges". China's foreign minister Wang Yi made a plea to get relations with Washington back on track to a forum on China-US relations on July 9. Trouble is, Mighty Uncle Xi cannot be seen to be soft. Just keep gnawing at the foundations. It will crash.

Why so shy of MMT?

"India should give up the fear of inflation and monetize its deficit," wrote Nageswaran and Thiruvadanthai (N&T). Monetizing the fiscal deficit means the Reserve Bank (RBI) financing government borrowing by buying government bonds directly. Put simply, it means the RBI printing notes to buy government bonds. "Monetisation of deficit was in practice in India till 1997, whereby the central bank automatically monetised government deficit through the issuance of ad hoc treasury bills," wrote Deepthi M Mathew. Ad hoc bills were phased out after 1997 and the Fiscal Responsibility and Budget Management (FRBM) Act forbids the RBI from purchasing primary issues of government bonds. This is different from quantitative easing wherein the central bank buys treasuries from the secondary market and pays interest on it. This increases liquidity in banks and pushes interest rates down, thus making it easier to borrow. The RBI has been buying treasuries and bonds from the secondary market already. "Long before 'MMT' was coined, one of us had argued that since the 1980s, India has effectively adopted the MMT framework with Indian characteristics," wrote (N&T). Modern Monetary Theory (MMT) postulates that the government should finance its spending by printing currency, not by selling bonds, and taxes should be used only to contain inflation. "Unemployment is the result of a government spending too little while collecting taxes, according to MMT." There is no danger of inflation, say N&T, because, "Today, oil is about a third of its peak in July 2008, food prices domestically and globally are subdued, and India's monsoon seems normal." The price of crude oil maybe less than half that in 2011, but the retail price of fuel is higher than in 2008. Historically, the retail price of diesel has been lower than that of petrol to lower the cost of transport of essential goods but that difference has shrunk, and diesel is more expensive than petrol in Delhi for the first time ever. Taxes contribute around 70% of the cost of fuel. The consumer price index (CPI) rose to 6.09% in June from 5.84% in May but food inflation came down to 7.87% in June from 9.2% in May. Vegetable prices, especially those of potato and tomato, have risen in the past month, while the "pass-through effects of the Rs 11-12/liter increase in diesel prices since last month still to be felt". This inflation number includes services which have stopped functioning due to the lockdown and so is not reliable, wrote Anirban Nag. Inflation could rise to 12% and the rupee could fall 16% against the dollar if the government tries to stimulate the economy with more money, said Rabobank. The government forced the RBI to hand over Rs 1.76 trillion from its reserves last year and it has installed a retired civil servant as governor to be compliant, so why is it not asking the RBI to send a truckload of banknotes to North Block? Because only the government knows the true state of our economy. We are not told for our own good because ignorance is bliss. So caring.   

They maybe of Indian origin, but we must be nice to them.

"IBM has committed to increase investments in India, Arvind Krishna CEO of IBM, informed Prime Minister Narendra Modi over a video conference call on Monday." "IBM has a large India presence with over 100,000 employees working for its global operations as well as local market. In fiscal year 2019, IBM reported revenues of $3.8 billion in the country." Indian companies are discarding Chinese  companies which creates opportunities for those from other countries. "India electrical equipment and electronics industry has begun mass cancellation of orders on Chinese companies in the last few days and are scouting for newer destinations for raw material sourcing." Airtel signed a deal with Nokia for $1 billion to prepare for 5G service. The Indian economy contracted by 5% in 1979, wrote Bhattacharya and Kwatra. "India saw an unprecedented growth surge for more than three decades since that historic contraction." "For perspective, between 1980 and 2010, India's per capita income went up more than three times to Rs 86,560 (at 2019-20 prices). The Indian economy will contract by 4.5% this year, said the IMF. We will need strong growth to create millions of new jobs. " The lockdown due to the coronavirus and the resulting flight of migrant labor "have bolstered the case for more automation in India factories -- a significant change as Indian business has always preferred cheap labor to expensive machines," wrote Gautam Das. "On the software side, IBM cited a three to four times increase in the number of requests from mid to large companies to automate processes." We need new investments. "New project announcements in India plunged to a 16-year low in the just-ended June quarter, latest data from project tracking database of the Centre for Monitoring Indian Economy (CMIE) shows," wrote Surbhi Bhatia. Companies will need to borrow money from banks to start new projects. The Reserve Bank (RBI) initially allowed borrowers to delay repaying their loans by 3 months, and then extended it for a further 3 months to the end of August, which means borrowers will now have to pay for the previous 6 months together with accumulated interest. "If one-twentieth of the loans which are likely to be under moratorium as of 31 August are defaulted on, the overall quantum of bad loans in the Indian banking system would be close to Rs 12 trillion. If one-fifth of them default once the moratorium is lifted, the quantum of bad loans would touch a dizzying Rs 20 trillion, more than double the current level," wrote Vivek Kaul. Most bad loans resulted from excessive borrowing before the financial crisis of 2008, which Prof Raghuram Rajan tried to clean up during his tenure as governor of the RBI, The present administration did not allow him to complete his mission. So, no money for Indian companies. Will US companies with CEOs of Indian origin rescue us? Only if we are nice to them.      

Are we going to change? Or carry on as before?

"The next 10 years is going to be India's 'golden moment' in key sectors like technology, pharmaceutical, e-commerce and manufacturing, said a top venture capitalist from Silicon Valley, pointing at the USD 20 billion foreign direct investment in the country amidst the coronavirus outbreak."  "He noted that the current President Donald Trump-led administration's anti-China sentiment is also helping India bag big investment." "Conflict between China and India has made it urgently necessary for the US to deepen its economic integration with the latter country, through increased trade and investment," wrote Noah Smith. "In addition to making both countries money and aligning the interests of the two nations even further, making India a richer, more advanced and more powerful country would strengthen it as bulwark against Chinese domination of Asia." "For years the United States and its allies have tried to persuade India to become a closer military and economic partner in confronting China's ambitions, painting it as a chance for the world's largest democracy to counterbalance the world's largest autocracy," wrote Maria Abi Habib. One big obstacle is that India harbors a thriving fifth column of communists who side with China against their own nation. We signed a nuclear accord with the US in 2005, but the then government was dependent for its majority in the Lok Sabha on the Communist Party (CPM) which was adamant in its opposition to the deal. For decades the communists have openly declared their allegiance to China, even when India is under attack from that barbaric nation. Chinese spies help to provide weapons to the extreme communist group, known as Naxals, who are waging an armed conflict against the state. Although this government has an absolute majority in parliament, India is still suspicious about foreign investment and places restrictions on foreign investors. Prime Minister Narendra Modi has reverted to a policy of import substitution under the moniker of 'atmanirbharta', which means 'self reliance'. "The overall experience so far has been that industries shielded from global competition by high tariff walls -- or even non-tariff barriers -- have little incentive to keep costs down and quality high, as companies based in India have a large captive market within the country," wrote an editorial in the Mint. "Just before the 1991-economic reforms, the highest tariff rate was 355%, the simple average of tariffs for 113% and the average weighted by imports was 87%. India's share of global trade fell from 2% at the time of independence to 0.5% in 1990," wrote Kelkar, Mashelkar and Rajadhyaksha. To help US businesses understand our tariff structure, US Embassies wrote, "Given this large disparity between bound and applied rates, US exporters face tremendous uncertainty because India has considerable flexibility to change tariff rates at any time." The US is confused. China just takes what it wants. Will we befriend the US? Or carry on as before? 

A simple equation no one seems to understand.

"The government has identified at least seven Chinese companies in India with alleged direct or indirect links with People's Liberation Army (PLA) along with Chinese venture capital investments in India including 'big names' where the benefits of civilian innovation are suspected to be used for China's defense sector." Of course, they are. Why has it taken so long to recognize the Trojan Horse approach? "India must also, as China has done, build up financial reserves through creation of industrial powerhouse companies," wrote Govind Sankaranarayanan. But, India has apparently sought a balance "between being a mid-level economic power while also a disorganised democracy. However, in a world where the metric of power is largely Gross Domestic Product (GDP) per capita, such a nation will need to accept a position of lesser influence." One Indian economic powerhouse is Reliance Industries which has seen foreign investors buy stakes worth over Rs 1.15 trillion in recent weeks. Adding another Rs 531 billion from a rights issue, Reliance has become free of net debt. Using its telecom arm Jio, Reliance is moving into online retail business to take on Amazon and Walmart. Reliance Jio has entered into a deal with Microsoft "to help businesses in India adopt technologies, such as data analytics, artificial intelligence, cognitive services, blockchain, internet of things and edge computing". One company is not enough for a nation of 1.3 billion people. The good thing is that, "India had the biggest reduction in the number of multidimensionally poor people during the 2005-15 period, a new UN report has said." Sadly, "India may see millions pushed into extreme poverty on account of the Covid-19 pandemic, according to a World Bank analysis." "India's poor have got poorer, the rich have not got richer, and the middle class has seen opportunities shrink, jobs disappear, and incomes get depleted," wrote Prashant Jha. "Its children have been forced to adapt to a new education system, where going to school itself is an elusive prospect. Its young adults are graduating, but with nowhere to go." The pandemic has given more power to the government which brought the country to a halt with a notice of just 4 hours. "What happened subsequently turned out to be a double shock. India's economy is spiralling down and the pandemic is spiralling up," wrote Prof Kaushik Basu. "Democracy with Indian characteristics comes with a dash of authoritarianism," wrote Manoj Joshi. "Political corruption, extra-judicial killings, tax harassment, have been around for a long time. But under the current government the situation seems to be in free fall." Trouble is, the rewards of being elected and being a minister are so high that they will do anything to please the leader. "Ms Gandhi imposed the Emergency with a sledgehammer. But dictatorships can also creep in slowly, silently and insidiously, without any formal announcement," wrote Coomi Kapoor. "Everyone who succumbs to authority is no less guilty." Poor people are dependent on subsidies controlled by the government. Ergo, increasing poverty increases power. It's a simple equation. 

Hopefully, we won't become a basket case.

"PM Narendra Modi"s key economic advisers have proposed an investment-led stimulus by the government to help revive the economy. The proposed massive spending on infrastructure, along with an upgrade of urban facilities, is expected to create durable assets and jobs, and generate demand for cement and steel." They advise the prime minister to ignore fiscal deficit this year to get the economy growing again. Starting with Moody's which expects our economy to contract by 3.1% this calendar year, the IMF projecting a contraction of 4.5% this financial year, India Ratings and Research predicting a shrinkage of 5.3% this fiscal, to former finance secretary Subhash Garg opting for a round number of 10%, there seems to be a consensus that India will experience a deep recession, which is economic contraction for 2 successive quarters, in 2020-21. A report from India Ratings says that fiscal deficit will shoot up to 7.6% this financial year, and to a total of 12.1% with the addition of 4.5% deficit of states. Economic contraction means less revenue from taxes so where will the money come from? The Reserve Bank (RBI) will have to resort to deficit monetization, which means printing notes to finance government spending, wrote Vrishti Beniwal and Andy Mukherjee. The government will need to borrow at least Rs 12 trillion till 31 March. With nowhere to lend banks have already loaded up with government bonds to the tune of Rs 41.4 trillion. The RBI is cautious because in the 1980s, routine deficit monetization led to double digit inflation. What about now? "Inflation as measured by the wholesale price index (WPI) contracted 1.81% in June." Inflation of food articles was 2.04% but prices of fuel and power fell by 13.60%. Prices of manufactured products, which have a weightage of 64.97%, in WPI increased by 0.08%, not enough to make up the steep fall in prices of fuel and power, which have a weightage of just 14.91%. "Inflation, as measured by the consumer price index (CPI), was 6.09% in June, up from 5.84% in March, the last official headline inflation number released by the government , even as food inflation cooled to a nine-month low of 7.87% in June from 9.2% in May." Food and beverages comprise over 45% of CPI. Why did the retail price of food rise by 7.87% when wholesale prices rose by just 2.04%? Transport is a large cost of food and the retail cost of fuel has increased because of soaring taxes, while fuel prices have fallen in other Asian countries. The Indian basket of crude was below $20 per barrel till April, compared to over $80 per barrel following the subprime crisis in 2008. It has been mostly below $60 since 2015. Real interest rates are negative which means savings are losing value. The RBI is buying dollars which increases the volume of rupees in the market, which puts downward pressure on interest rate and increases money supply. Will the government throw caution to the winds as advisers suggest and will the RBI print sacks-full of notes to finance spending? The rupee may tank and inflation shoot up. Better to bury head in sand and hope.

Does Iran have the time it needs?

"Under a 25-year pact, China will invest $400 billion in Iran's petroleum sector as well as its core infrastructure -- banking, telecom, ports, airports, high speed railways, metro and free trade zones," wrote former Indian Ambassador Navtej Sarna. Bandar-e-Jask is a port on the Gulf of Oman with free access to the Indian Ocean, thus avoiding the narrow point of the Strait of Hormuz between the Persian Gulf and the Gulf of Oman, which is the main point of exit for most of Iran's exports, including oil. Iran has not forgotten operation Praying Mantis in 1988 when US warships struck Iranian targets in retaliation for laying mines in the Persian Gulf, damaging a US frigate. "The Jask terminal will have an export capacity of 1 million bpd with an initial 20 million barrels of crude storage capacity." Iran is probably calculating that once Jask is operational it can create obstructions for its arch enemy Saudi Arabia, while the Chinese naval base at Jask will protect it from US attacks. The Supreme Leader supports China while some hardliners, led by former president Ahmadinajad, are against it because of China's repression of Uyghur Muslims. However, recent mysterious explosions in Iran show that it is vulnerable to other forms of attacks. "The first enigmatic hit happened on June 26 at a known liquid fuel production center that makes ballistic missiles in Khojir, near Parchin, southeast of the capital." On 30 June, 19 people died in an explosion at a medical center in Tehran and then, "Two days later, on July 2 the notorious Natanz uranium enrichment plant -- which became active in 2018 as Iran's principal place to develop centrifuges required to produce uranium and other nuclear weapons were in-development -- was struck by a mammoth blast, as confirmed by the Atomic Energy Organization of Iran (AEOI)." Mysterious attacks continue. "At least seven boats have caught fire at a shipyard in the port of Bushehr in southern Iran, state media reported." A group calling itself Homeland Cheetahs have claimed responsibility. "The group said it was composed of dissidents within Iran's military and security forces and that they had been behind numerous attacks that the Iranian authorities have so far concealed from the public." Iran threatened to retaliate against any country that carries out cyber attacks against its nuclear sites, reported Reuters. A Kuwaiti newspaper Al-Jareeda reported that two explosions were caused by cyber attacks by Israel in retaliation for Iran's attempt to hack into Israel's water infrastructure to release chlorine into its water supply. The same newspaper said that Israeli stealth fighter jets bombed Iran's missile storage facility at Parchin. The Obama White House denied threatening to shoot down Israeli jets trying to bomb Iran. President Trump is no Obama. Iran's main problem maybe its currency, the rial, which is trading at 215,500 to the US dollar in the black market against its official exchange rate of 42,000 rials to the dollar, showing that its people have lost all confidence in the economy, and indirectly in the government. If the Iranian regime falls it will be huge. China's fall will be spectacular. Worth waiting for.

The lady doth protest too much. Definitely.

Recalling reforms undertaken by former Prime Minister (PM) Narasimha Rao in 1991, Finance Minister (FM) Nirmala Sitharaman blamed the Congress for not continuing with them. "Several observers called 2004-14 as India's lost decade," she wrote. Indeed. A glance at the growth rate of India's gross domestic product (GDP) shows that India was growing in excess of 7% during most of those years except in 2008 when it fell to 3.08% because of the subprime crisis. Prime Minister Narendra Modi came to power in 2014 when our GDP grew by 7.04%, rising to 8.0% in 2015 and 8.26% in 2016 and then fell off sharply even though there was no global crisis during that period. The difference in growth rate between the Congress period and the Modi years becomes even more stark if we see the price of crude oil which started climbing from 2004, when the Congress came to power, and was above $70 per barrel from 2010 to 2014, when Modi came to power, following which it fell rapidly and has stayed subdued since. Modi raked in a bonanza of nearly Rs 12 trillion by raising taxes on fuel from 2014 to 2019. On top of that Modi forced the Reserve Bank (RBI) to transfer Rs 1.76 trillion from its reserves last year. We have not been told what happened to all that money but the emptiness of government coffers is emphatically shown by the exorbitant rise in taxes on fuel, "making retail prices among the highest in Asia and almost double that in neighboring Pakistan" and "are adding another headwind to an economy facing the biggest contraction in four decades". In 2014, Modi spoke to banks about addressing non-performing assets (NPAs), but 6 years later public sector banks (PSBs) may need to raise $20-50 billion capital to be able to lend. In September, well before the coronavirus crisis, the FM herself asked PSBs to lend freely to small businesses and homebuyers. This is known as 'loan mela' which translates to 'a fair for loans', first conceived in the 1980s by the Congress. Although the goods and services tax (GST) was first proposed in 1999, it was implemented in 2007 under Modi. However, multiple illogical rates have made the GST difficult to comply with and "relatively high rates have made both industry and services less competitive, especially in comparison with their international peers." wrote Ajit Ranade. "To remove any perception of harassment, tax assessment and scrutiny were made faceless," wrote Sitharaman. Aggressive tax demands can easily be made online by tax officials because of unrealistic targets set on them. Finally, in 2009 consumer price inflation was in double digits, but the RBI was reducing interest rates, leading to large negative real interest rate and a defeat for Congress. Retail inflation rose to 6.09% in June despite a drop in demand but the RBI, which has been slashing interest rates already, is expected to reduce rates even further. Other similarities with the Congress are: waiver of bank loans to farmers, import substitution and enormous fiscal deficits. In eulogizing Modi and trashing Congress, "The lady doth protest too much, methinks."

Not easy, either for them or for us.

Inviting foreign businesses to invest in India, Prime Minister Narendra Modi "flagged the dramatic improvement India has managed in the World Bank's ease-of-doing-business rankings," wrote Anil Padmanabhan. What Modi forgot to mention was that, "In the 2020 report, while India has an impressive overall rank of 63, its rank in setting up a new business is an abysmal 129 out of 190 countries!" "A subsidiary company of TeamLease, which maintains a database on government regulations, estimates that, at present, companies have to annually adhere to 69,233 compliances and 6,618 filings and intimations." Regulations are the basis of India's crony capitalism wherein it is more important to pay homage to politicians and civil servants than improve productivity or provide the best for customers. And the implicit threat of regulatory punishment is a great stimulus to raise election funding. "To take business reforms to states, the industry department has been ranking states starting 2016 on the basis of regulatory compliance requirements," wrote Asit Ranjan Misra and Jayshree P Upadhyay. "India has started trade talks with the European Union (EU) and is open to dialogue with the United Kingdom for a free trade agreement, commerce and industry minister Piyush Goyal said on Saturday." "India currently has no trade deal with the EU. Trade talks between the two regions stalled in 2013." The government has woken up to the importance of a trade deal with the EU after it signed a free trade deal (FTA) with Vietnam recently. Following trade tensions with the US, out of 56 companies shifting production out of China, "only 3 of these relocated to India while 26 went to Vietnam, 11 to Taiwan, and eight to Thailand", according to a study by Nomura Group. Clearly, foreigners are not convinced about how easy India is. The EU wants deep cuts in tariffs on cars and wines, but these are major sources of revenue for states which have been hit very hard by the lockdown due to the coronavirus. The government is to introduce new rules to force e-commerce companies to hand over data on users. "E-commerce companies will be required to make data available to the government within 72 hours, which could include information related to national security, taxation, and law and order, it said." Google is planning to invest $10 billion in India over the next 5-7 years. Google provides free service to customers and is to pay an 'equalization tax' on profits it makes from advertising revenue. Surely, the government should pay Google for the data it collects. Amazon is a platform for sale of goods and streaming videos of music and movies. Why do politicians and civil servants want to know what we are buying and what movies we watch? These companies collect data for targeted advertising but the government wants data for surveillance and control of citizens. Sinister.    

Surely, the bossman ordered the hit?

"India had not heard of Vikas Dubey till 10 days ago. Every important Uttar Pradesh (UP) politician had, as had every UP police official who served in Lucknow and Kanpur; so had every gang lord in UP -- but he remained unknown to most Indians," wrote Chanakya. All of India got to hear about Dubey when he and his men allegedly shot 8 policemen to death on 3 July at his house in Dikru village, near Kanpur in UP. One member of the gang, captured after the shooting told the police that Dubey received a phone call from the police station warning him of the coming raid. The day following the deaths the police razed Dubey's house to the ground. This was done without proving his guilt in court and without any legal justification. One week later, Dubey surrendered to the police outside a temple in Ujjain in Madhya Pradesh (MP). He was being brought back to Kanpur in a car which mysteriously overturned hurting some of the police, but not Dubey who snatched a gun and tried to escape. He was shot dead by the valiant UP Police. That is what they want us to believe. In the lead up to killing him the police eliminated 6 of his aides in, what is known as, 'encounters', a euphemism for 'execution'. That, at least some people do not believe the fairy tale version of events, as narrated by the UP Police, has been demonstrated by the number of Public Interest Litigation (PILs) filed in Supreme Court requesting a thorough investigation into the entire episode, supervised by the Court. Why did Dubey sign his own death warrant by killing 8 policemen when he has been living freely despite facing "a total of 61 criminal cases, including eight of murder involving the killing of at least 15 people". It is possible that he had been warned that the squad of 50 policemen were coming to kill him, possibly because the bossman, his highest protector wanted to get rid of him. Dubey's biggest problem was that local villagers despised him because he was "brazen, hot-headed and barbaric", wrote Radhika Ramaseshan. Unlike Veerappan who avoided the police for 36 years, despite blowing up 22 policemen sent to capture him, because he distributed part of his loot to the poor and is still revered by villagers in Erode and Salem in Tamil Nadu. Regarding Dubey's killing, "if responses on social media, and the general tea shop chatter in the towns and villages are any indicator, the encounter is being widely applauded," wrote Chanakya. Indians despise civil servants, vote for criminal politicians because only they can get civil servants to work and try not to go the police even if they are victims of crimes. But, the general support for Dubey's execution is a severe indictment of our judicial system which prolongs cases for decades and finally lets criminals off for old age, but will keep a person in prison for years on a charge of contempt of court in which it alone defines the crime and the punishment. The common man describes our system as 'tarikh pe tarikh', which means 'date after date'. Dubey could not be allowed his tarikh. He know too much.      

Better than being Chinese. But for how long?

"Protective body armor used by security forces to guard against stone pelting in the Kashmir Valley will now be used by paramilitary troops patrolling the Line of Actual Control (LAC) to fend off sharp-edged baton and stone attacks by Chinese forces," reported the Economic Times. Apparently, "the Center is preparing a detailed plan according to which each company of Indo-Tibetan Border Police (ITBP) will have 'full-body protectors' for at least 10% of its personnel. This, officials explained, can be used on a rotational basis by troops moving out on patrols". We are not told if from now on all ITBP personnel will be required to be of the same size, shape and morphology like the cloned stormtroopers in the Star Wars movies. The government's pious intentions maybe in response to a report by the Comptroller and Auditor General in February of this year, so cruelly emphasized by the brutal murder of 20 soldiers by Chinese thugs in Ladakh on 16 June. The report said that "there was a critical shortage of snow goggles ranging from 62% to 98%" and a "shortage of special rations compromised the calorie intake of soldiers by as much as 82%". The report was until 2018 and the army said things have improved. Why did 17 injured soldiers freeze to death? "It's the conventional domain of border security that governments of the past and present don't seem to appreciate. Special rations have seen cuts due to poor budgetary allocation -- the lowest one since 1962. I don't think the situation is likely to improve," wrote Lt Gen Syed Ata Hasnain (Retd). "We should not get the impression that Indian troops battling extreme winter conditions are not being provided for. They are but it is usually out of the reserves and emergency provisions like the Army Commander's special financial powers," wrote Deepender Singh Hooda, Former Army Commander, Northern Command. "Indian soldiers who died in close combat with Chinese troops last month were unarmed and surrounded by a larger force on a steep ridge, Indian government sources, two soldiers deployed in the area and families of the fallen men said," reported Reuters."Reuters spoke to relatives of 13 of the men who were killed, and in five cases they produced death certificates listing horrific injuries suffered during the six-hour night-time clash at 14,000 ft (4,267 meters) amid remote barren mountains." India maybe unable to protect its soldiers but at least the dead are treated with full military honors. The barbaric Chinese government does not even recognize its dead. After "a video emerged from China showing that the families of the Peoples' Liberation Army (PLA) personnel were outraged by the fact that unlike Indian soldiers, their martyrs had received no honor and no acknowledgement". Indians maybe disappointed by President Donald Trump's restrictions on immigrating to the US, but thank God we are not Chinese. At least for now.