An annual circus. Will it be any different?

 Today is the annual Indian circus, known as 'The Budget', presented with great fanfare in a red box by the Finance Minister every year in the tradition of Britain where the Chancellor of Exchequer carries his speech in a red box. The Budget is prepared by Indian Administrative Service (IAS) officers with a 'halwa' (Indian semolina pudding) ceremony. The IAS is a continuation of the British Indian Civil Service (ICS), which ruled India with an iron hand but with complete integrity and loyalty to the Crown, and with the same power but without the integrity or loyalty to the people of India. Every year, CEOs of companies in various sectors go begging for sops, such as tax relief, protection against foreign competition by increasing tariffs, concessions on exports and other handouts.  CEOs, economists and citizens differ in what they would like from the budget, wrote Malini Goyal and SN Sharma, but "there is near-alignment on what the three sections are worried about most -- jobs". "For creating employment  and livelihoods, a stable tax regime is strongly desired," wrote Director General of the Confederation of Indian Industry (CII) Chandrajit Banerjee. "Keeping in view the fiscal constraints, CII has not suggested any significant deductions or exemptions in direct taxation, and therefore, its tax recommendations are focused mainly on clarity in law, simplification of procedures and reduction of litigation to facilitate business transactions which would make doing business easier for industry." Corporate taxes were suddenly reduced in September 2019, well after the budget, presumably because economic growth was in a steep dive and the government was desperate to revive private investment. "According to the Organisation for Economic Cooperation and Development (OECD), out of the 94 tax jurisdictions studied in 2017, India had the highest statutory corporate income tax rate of 48.3%, including tax on distributed dividends," wrote Ashish Khetan. India will lose Rs 1.45 trillion in tax collections because of the tax cut and it would have benefited the economy much more if the government had spent it on building infrastructure than on giving more money to industrialists, wrote Khetan. "CII has suggested the lowest of 'nil' slab for inputs on raw materials, a top slab of 5-7.5% for final products, and 2.5-5% for intermediate goods. This will help Indian industry integrate with global value chains and turn its goods and services competitive in world markets." "An inverted duty structure is said to exist when the duty rate for the overall finished good is lower than that of its component parts, thereby rendering such a product's final manufacture in the country uncompetitive," wrote C Veeramani and Anwesha Basu. "World export of network products amounted to $5.6 trillion in 2018, of which India's share was a paltry 0.5% ($27 billion) compared to China's 17.5% ($981 billion)." Not just bad taxes on Indians. "Retro tax is a bad idea but stiffing Cairn Energy on an arbitration settlement only makes it worse," wrote Bloomberg. Not much point tinkering with taxes when the government is bleeding the economy through exorbitant taxes on fuel. "India's ranking on the Corruption Perception Index -- 2020 slipped from 80 to 86 even as its score decreased only by one point from 40 to 41 in 2019." Confusing taxes enable rent seeking by politicians and civil servants and high rates are essential because subsidy bill keeps rising to win elections. We will watch the circus. Sadly, the clowns will not make us laugh.             

A survey is an examination of the past. What about the future?

India's annual Economic Survey was presented to Parliament yesterday, in preparation for the Budget which will be presented tomorrow. "The central theme of the Survey is that this is the time for the government to increase expenditure on investment in a big way," wrote an editorial in the Economic Times. "So long as he growth rate exceeds the rate of interest, government debt would continue to fall as a proportion of GDP, that is, debt would be sustainable." The Survey advises the government to be counter-cyclical, meaning that it should spend more even though tax collections will be depressed because of the economic slowdown. This will, it is hoped, create jobs and encourage the private sector to invest, thus creating a virtuous cycle of increasing investment creating more jobs which will increase demand and lead to further addition to capacity. Yield on benchmark 10-year government bonds was 5.95% on 29 January. This is because the Reserve Bank (RBI) has been resorting to all kinds of financial trickery to keep yields down. The RBI refused to sell bonds at bids, it considered too high, on at least 4 occasions last year. It bought long term bonds while selling short term ones, in Operation Twist. And it conducted Long Term Repo Operations (LTRO) in which banks borrowed money from it in exchange for longer term government securities. The RBI has kept interest rate at 4% for months even though consumer price inflation (CPI) has been consistently much higher, the lowest being 4.59% in December 2020, which has devastated savers, especially retired people who depend on bank interest for survival. The government has said that it intends to borrow at least Rs 12 trillion instead of Rs 7.8 trillion envisaged in the budget last year. The government earned Rs 11 trillion till 2018 from excess excise duties on petroleum products. It earned over Rs 3.65 trillion in 2018-19. Even with the decrease in consumption of fuel due to the lockdown the government is to make an Rs 1.4 trillion in this financial year from fuel taxes. In addition, the government forced the RBI to handover Rs 1.76 trillion from its reserves in September 2019. Where have these eye-watering sums of money gone? Will the Finance Minister give us a detailed account in tomorrow's budget? The government borrows vast sums stealthily by getting public sector undertakings to borrow from the public by selling bonds which it does not show in its accounts. GDP growth rate for the financial year 2019-20 (FY20) has been revised down from 4.2% to 4% though the growth rate of FY19 has been raise from 6.1% to 6.5%. Since prices of fuels are not under goods and services tax (GST) higher fuel prices will feed into prices of all goods and services, warned the Economic Times. What happens to inflation if the government increases consumer demand through higher spending? We live in interesting times.           

We may think we are Atmanirbhar, but the world still matters.

"The economic survey tabled on Friday sees a robust growth of 11% for the fiscal year beginning on April 1 on the back of the nationwide vaccination and a rebound in consumer demand. The survey predicts a contraction of 7.7% in this financial year. The survey advises increased spending by the government without fear of credit rating agencies which rate India at just above junk status. "Never in the history of sovereign credit ratings has the fifth largest economy in the world been rated as the lowest rung of the investment grade (BBB-/Baa3)," wrote Chief Economic Adviser KV Subramanian. According to the Reserve Bank (RBI) gross non-performing assets (GNPA) of commercial banks may rise to 13.5% by September 2021, and "If the macroeconomic environment worsens into a severe stress scenario, the GNPA ratio may escalate to 14.8 percent". The GNPA ratio of public sector banks (PSB) may rise to 16.2% by September. Unless the government recapitalises PSBs they cannot lend, despite negative real interest rate which is depleting returns from savings. Lots of spending to boost the economy will not be easy, wrote Andy Mukherjee. "For one thing, the pandemic has upset business-as-usual calculations of how much to spend, on what, and how to finance it. For another, an impatience to make up for lost time has to be weighed against a shrinking of policy space in emerging markets: A reprise of the 2013 global taper tantrum could compound the country's considerable domestic challenges." In August 2013, the rupee registered "its biggest single day loss of 256 paise to close at a new historic low of 68.80 against the US dollar", when the then Chair of the US Federal Reserve Ben Bernanke hinted at a reduction of bond buying by the Fed. To guard against a flight of dollars the RBI has built up reserves of $585.334 billion but buying dollars releases a flood of rupees into the market which has pushed the Sensex to stratospheric levels. Foreign investors have poured a lot of money into Indian stocks and they will lose a lot of money in conversion if the rupee tanks against the dollar. India cannot beat China with 'jugaad', which means getting by with limited resources, and so must invest in R&D. But the government has been increasing tariffs on imports to protect domestic industries, thus discouraging spending on R&D. No country can grow 8-10% without opening up of the market, said Prof Arvind Panagariya. Finally, the survey advises a reduction in regulation. Sadly, "the system as whole is geared to, and, more importantly, strongly disposed to holding back and throttling India because its operating philosophy is distrust and cynicism," wrote Prof VA Nageswaran. A survey is meant to provide a true picture. Only then can it suggest correct policy. Else, it becomes a commercial.            

Why pick fights which we cannot win?

In December 2020, Cairn Energy announced that it has won an arbitration case against the Indian government at the Hague. By a unanimous decision, "The Permanent Court of Arbitration at The Hague on Wednesday not only invalidated India's $2.74-billion 2015 tax claim on Cairn Energy, but also ordered it to return up to $1.4 billion in funds withheld, interests and costs to the firm." Earlier, Vodafone Group Plc announced that "it had won an international arbitration case against the Indian government, ending one of the most high-profile disputes in the country involving a $2 billion tax claim". "India has challenged the Vodafone arbitration award in Singapore on December 21," Reuters reported citing a government official. The government's view is that taxation is a sovereign right and, therefore, can ignore the judgement. In which case India should have stated clearly that it does not recognise the arbitration tribunal at the Hague, just as it does not recognise the International Criminal Court which is also situated at The Hague. Vodafone still has business in India but Cairn does not. Hence, it can take tough action against India. "As India is a signatory to the New York Convention, the award can be enforced against Indian assets in numerous jurisdictions around the world for which the necessary preparations have been put in place," Cairn said. "It suffered this damage simply because it transferred ownership of its Indian oil field in 2006 to Cairn India Ltd, to prepare for the local unit's initial public offering. At the time, no tax was demanded. Years later, when Cairn disputed the sudden $4.3 billion levy, New Delhi expropriated its shares in Vedanta Ltd (into which Cairn had merged its Rajasthan oil field), helped itself to the dividends and dumped the stock." On 22 January, I warned that US firms can and do attach properties belonging to other countries. "Just like US oil firm ConocoPhillips grabbed Venezuelan assets overseas to enforce an arbitration award, Indian bank accounts, airplanes and other foreign properties can be seized to collect USD 1.4 billion awarded to UK's Cairn Energy against Indian retro tax, according to a letter seen by PTI." What a humiliation to be compared to Venezuela where people are starving and which is recognised as a failed state. Or, maybe not. "Cairn CEO Simon Thompson in the January 22 letter to the Indian High Commissioner in London, with copies marked to Prime Minister's Office, Finance Minister Nirmala Sitharaman and External Affairs Minister S Jaishankar, the arbitration award is 'final and binding' and 'the Government of India has an obligation to comply with its terms." US e-commerce giant Amazon has won an arbitration award against Indian retail company Future Group which signed a takeover agreement with another Indian giant Reliance. Apparently, the government is thinking of changing rules against foreign e-commerce companies Amazon and Walmart to protect small retail stores. Not the first time. The government changed e-commerce rules in December 2018 after Walmart paid tax of Rs 74.39 billion in September 2018 arising out of its acquisition of Flipkart. Apparently, Amazon's deal with Future Group violates India's Foreign Exchange Management Act 1999 (FEMA) and the Enforcement Directorate (ED) is now looking into it. Indian politicians and civil servants are accustomed to doing whatever they like to citizens but Amazon CEO Jeff Bazos also owns the Washington Post which supported Joe Biden in the recent presidential election. Perhaps, our great leaders should take a deep breath. Why take on unnecessary fights?
        

Not inequality of wealth, it is inequality of poverty.

"Recent high frequency indicators suggest that the recovery is getting stronger in its traction and soon the winter of our discontent will be made glorious summer," the Reserve Bank (RBI) wrote in its January bulletin quoting William Shakespeare. Growth will be consumption driven provided there is no further increase in coronavirus infection rate. "While Covid pandemic and lockdowns that came with it disrupted a lot of lives and even business, it may just have a silver lining. Indians ended up saving additional $200 billion during this time, a UBS report said." "Given the nature of savings (granular and broad based), we believe beneficiaries could be across consumption (discretionary and staples, autos) and financials (opportunities for retail lending)." "A 1% economic growth results in nearly 2% growth in income tax revenues," wrote former chief commissioner of income tax Hardayal Singh. Possibly because economic growth is not uniform and tends to benefit those earning higher incomes. "This is the finding of an analysis of income tax and gross domestic product (GDP) data of Indian states from 2012 to 2018," and economic growth also improves the Ease of Doing Business (EDB) rankings of states. This means, "One, states that focus on growth are quickly rewarded through higher tax revenues. Two, the tax department should not focus on negative things -- penalties, prosecution, surveys and other coercive methods to raise revenue." "India's top 100 billionaires have seen their fortunes increase by Rs 12,97,822 crore (Rs 12.98 trillion) since March last year when the Covid-19 pandemic hit the country and this amount is enough to give 13.8 crore (138 million) poorest Indians a cheque for Rs 94,045 each." The latest India supplement of the Oxfam report 'The Inequality Virus' said it would take an unskilled worker 10,000 years to make what businessman Mukesh Ambani made in an hour during the pandemic and three years to make what he made in a second." Lucas Chancel and Thomas Piketty "show the sharp rise of income, particularly of the top 1%", which they term "billionaire raj", wrote Christophe Jaffrelot & Kalayarasan A. "They present an overall U-shaped curve of inequality in the last 70 years -- declining inequality from 1950s to 1980s followed by a sharp rise thereafter. Also, they contest the hypothesis about the rise of a middle class in India. In their analysis, it is the top 10% who benefited the most as compared to the middle 40%." A massive gush of liquidity by central banks, including the RBI, all over the world has resulted in soaring asset prices, wrote an editorial in the Mint. "Wage compression by Indian companies, done to shore up profits, has widened the divide between the few who live off returns and the many who subsist on salaries." "However, imposing a wealth tax, as Piketty fans would like, is unlikely to work." "Over 5.95 crore (59.5 million) income tax returns (ITRs) for the fiscal year ended March 31, 2020 (2019-20) were filed by January 10, the Income Tax Department said." This is out of a total population of 1,300 million and includes businesses. The vast majority, 44.8 million, of individuals filed income less than Rs 5 million in the year. "India's per capita annual income in 2019-20 was Rs 1,26,968 according to provisional  estimates published on January 7." The Longitudinal Ageing Study in India (LASI) by the Ministry of Health and Family Welfare (MoHFW) puts the annual per capita income of the top 20% of households at less than Rs 100,000 and the bottom 20% of households at Rs 25,825 per year per capita. Just a handful is rich. For the rest, it is a question of who is poorer. Inequality of poverty.         

Power cannot be turned on and off.

"There may be the odd visionary bureaucrat or politician who figures out that what India needs is their getting out of the way. But, the system as whole is geared to, and, more importantly, strongly disposed to holding back and throttling India because its operating philosophy is distrust and cynicism," wrote Prof V Anantha Nageswaran. Th most egregious example of this "distrust and cynicism" was the sudden demonetization of high value banknotes with 4 hours notice on 8 November 2016, which sought to characterize every Indian as a tax evader. Since the poor, especially daily wage earners, deal mainly in cash they suffered the most. When not much 'black money' was found the story was changed to one of advantages of a cashless society. The volume of currency in circulation has increased from 16.4 trillion in 2016 to Rs 27.7 trillion, according to the Reserve Bank of India. "The operating principle in view is that the government does not trust citizens to do the right thing, forcing citizens to reciprocate that faith with their own creativity. Some give up. Some emigrate. Some co-opt the system. Many struggle throughout their live to deal with the government machinery." This gives total power to politicians and civil servants as a cowed people struggling to survive remain subservient to authorities. "There are macro studies by Francis Fukuyama which show that the countries that have high levels of trust, grow better," said Prof Kaushik Basu. "India is going through an erosion of trust in recent times. I just hope we have the sense to come together." "India has the highest bribery rate in Asia and the most number of people who use personal connections to access public services, according to a new report by corruption watchdog Transparency International." "It mens that entrepreneurial skills have to be applied to the task of acquiring political power first, in some form, so that this can be leveraged to venture into business." When a 19 year old Dalit woman was gang-raped, the police tried to hush it up by delaying filing charges, conveying her to Safdarjung Hospital, instead of to AIIMS where she had been referred, and forcibly burning the body in the middle of the night without permission of the grieving family. A journalist on his way to meet the family of the victim was arrested and is being denied access to lawyer or to his family. "What makes a powerful government so insecure that it must build a wall of policemen to barricade from public view -- and cut off access to -- a village in which a tramatised Dalit family grieves the death of a 19-year-old daughter brutalised by upper caste men?" asked an editorial in The Indian Express. In recent months 68 year old Gautam Navlakha was denied spectacles and 83 year old Jesuit priest Father Stan Swamy, who suffers from tremors of hands due to Parkinson's disease, was denied drinking straws, in prison, reported BBC. Neither of the men has been convicted of any crime in a court of law and so must be presumed to be innocent until proven guilty. Not in India. The worst example of unlimited power of the state was the forcible imposition of the biometric identity card Aadhaar, which has photographs, prints of all 10 fingers and iris scans. It was started as a means to identify those in need of financial help from the state. It was made compulsory for bank accounts and now is mandatory for filing income tax returns, wrote Usha Ramanathan, making it a perfect tool for surveillance. Andy Mukherjee is heartbroken because he cannot see any progress in India. We have stopped hoping long ago.        

What's the point of transfusing own blood into the economy?

 The services sector "contributed 55.39% to India's Gross Value Added (GVA) at current prices in FY20," says India Brand Equity Foundation (IBEF). Services sector's GVA grew at a CAGR (compound annual growth rate) of 1.45% to US$1,064.8 billion in FY20 from US$1,005 billion in FY16. According to RBI data, in August 2020, services exports stood at Rs 122,768.07 crore (US$16.44 billion), while imports stood at Rs 71,662.62 crore (US$9.60 billion)." Since services contribute a major part of the economy, "The biggest drag on the economy today is the fear of infection, so people are reluctant to resume service activities like travel, going to shops, entertainment, pilgrimages, and dozens of other things," wrote SA Aiyar. "No amount of fiscal stimulus will revive the economy until fear is cured and service activities resume. To diminish fear, the top priority of the budget must be to vaccinate as many as possible as quickly as possible." "Vaccination should be free". Congress politician Praveen Chakravarty agrees that "the economy will benefit enormously if most Indians are vaccinated", but he wants to increase the securities transaction tax (STT) by 0.1%, or 10 basis points, "on the value of all buy and sell transactions in shares and derivatives in the stock market". Trouble with a tax is that it tends to become permanent, as politicians feel that people are used to paying it, and it tends to creep up over the years. "In the 15 years since STT was introduced in March 2005, rates have been increased four times. But there has been no consequent reduction in stock market activity," wrote Chakravarty. Exactly. "The economy will recover in 2021 and we expect GDP growth to rise by 13.6%," wrote Jahangir Aziz. Despite such a high rate of growth "the level of GDP will still be 4-5% below its pre-pandemic path at end-March 2022. This is akin to losing $200 billion for two straight years." And most of this income loss has fallen on households and on small and medium enterprises (SME). Jahangir advises increased government spending on income support and on healthcare and not be worried about increased fiscal deficit. But, what is the point of spending more if the government squeezes it out of people by indiscriminate increase in taxes? The Ministry of Road Transport and Highways (MoRTH) proposed a 'Green Tax' or pollution tax of 10-25% on transport vehicles older than 8 years at the time of renewal of fitness certificate. Rising transport costs will surely result in increasing prices of goods we buy. "With the post-tax return on fixed deposits plummeting to 4%, way below consumer inflation, more and more investors are driven towards equities, notwithstanding the risks," wrote an editorial in the Economic Times. "The story is playing out in a market that has run ahead of fundamentals: the Sensex is trading 31-32 times its earnings against an average price-to-earnings multiple of 20 in the last two decades." "Millions of young Indians are dabbling in stocks for the first time as they remain stuck at home, with many of them trying their hands at trading shares to boost income amid pay cuts and job losses," wrote Nasrin Sultana. "There is a disconnect between booming markets and economic activity, Reserve Bank Governor Shaktikanta Das said on Monday, warning that the stretched valuations of financial assets pose a risk to financial stability." You can either administer a blood transfusion to the economy or bleed it to death. Can't do both.   

The unbridgeable distance.

"Nine years ago, vicious sectarian riots broke out between Bodos and Muslims in the Kokrajhar district of Assam. The disturbances left nearly 80 people dead and nearly four lakh (400,000) people fled their homes and took shelter in makeshift camps," wrote Swapan Dasgupta, Rajya Sabha MP for the BJP, Prime Minister Narendra Modi's party. "Curiously, the riots left the 'national media' in the country unmoved," whereas, there has been "fulsome coverage of the farmers' agitation on the outskirts of Delhi". Dasgupta's thesis is that riots in Assam were ignored because they were far away from the national capital and journalists are too lazy to go that far. Maybe not. Life is cheap in India because there are too many people competing for limited resources. India has 1350 million people crammed into 3.3 million sq km, giving a population density of 409 per sq km. China has 1400 million people in 9.6 million sq km, giving it a population density of 145 people per sq km, less than half that of India. Dasgupta talks about students in Bengal protesting against appointment of unqualified individuals as their teachers, but that is against the University Grants Commission (UGC), hardly of national significance. Even the thousands of families with little children walking hundreds of miles back to their home villages had no effect on Modi's popularity ratings which apparently "is a thing of pride for all Indians", according to President of BJP JP Nadda. The protests by farmers is directly against the Central government which forced the bills through without discussion in parliament. Not just that. In the Rajya Sabha, "MPs demanded division. This was voiced at 1.09pm on Rajya Sabha TV. But it never reached the public ear because footage was doctored to such an extent that it was muted," wrote KTS Tulsi and Tanessa Puri. This was pure skullduggery. Farmers know that. "The modus operandi is to introduce momentous laws without advance consultations with stakeholders and opposition parties; enact them in both Houses in one to three days without referral to parliamentary committees; enforce them with the heavy hand of the state; conflate India with the ruling BJP and Modi, creating a personality cult in the process; delegitimise protesters as anti-national agitators, apologists for terrorists, Naxalites, and/or in the pocket of foreign paymasters; and be wilfully blind to the potential foreign policy implications of the actions until the damage has been done," wrote Prof Ramesh Thakur. "Habituated to adulation from adoring crowds, Modi doesn't do humility and apologies." Students protesting in Jawaharlal University (JNU) were viciously beaten up without any BJP member objecting to the barbarity. India seems to be leaning towards monopoly in certain sectors, seen to be benefiting billionaires Mukesh Ambani and Gautam Adani, wrote VK Vijayakumar. "That the Adanis and Ambanis come form Gujarat, the PM's home state, only serves to bolster the impression that proximity to power confers an undue advantage," wrote Rajdeep Sardesai. "On the ground in Punjab, Reliance Jio (Ambani) telecom towers have been vandalised while Adani products are being boycotted." Modi is stuck. If he gives in to the farmers his "prestige suffers a body blow" and the longer the protests drag on there will be a gradual erosion of his authority, wrote Prof Mohsin Khan. It is not physical distance but the distance between Modi, as an exalted leader, far above a cringing, submissive people, that is the problem.  Dasgupta is subservient to his political master, but surely he has some responsibility to his fellow citizens? Maybe, he is afraid.          

Our glorious past beckons.

"The middle class is often viewed as being squeezed between the wealthy, who own a disproportionately large share of the nation's assets, and the poor who can fall back on government aid," wrote Sanket Mohapatra. But they have not suffered from the coronavirus-induced lockdown, he suggests. The biggest disappointment for the middle class is that it does not receive any services for the taxes it pays. The National Health Service in Britain provides free medical care to every patient. Denmark has very high taxes but provides a wide range of services which means a very high standard of living for citizens. The aspirational middle class gets government benefits and the affluent middle class may have seen a rise in wealth with the stock market index the Sensex soaring to over 50,000 on 21 January, although it closed lower the next day on profit taking. The middle middle class has not seen a drop in earnings but the gig economy is a threat to its existence, says Mohapatra. This ignores the fact that the number of white collar professionals has dropped from 18.8 million during May-August 2019 to 18.1 million during January to April 2020 and then to a shocking 12.2 million during May to August 2020. This year is the 30th anniversary of the balance of payments crisis of 1991 when India had to transfer 47 tons of its gold reserves to the Bank of England and 20 tons to the Union Bank of Switzerland as collateral to borrow foreign currency to pay for imports. Before 1991, India suffered from 'Licence Raj' which "refers to the control that the government had over business in India. "Government bureaucrats decided what businesses could produce and how much they could produce," wrote Vivek Kaul. Ambassador and Premier Padmini cars do not exist now. "In 1980, India had around 2.5 million landline phones, all concentrated in cities. By October 2020, mobile phone connections had touched 1.15 billion." "The number of passenger cars sold in 1991-92 was around 150,000 units. In FY2020, 1.7 million units were sold." To put it in perspective, China sold 25.3 million cars in 2020, down 1.9% from 2019. In 1991, most Indians could access only government-owned Doordarshan (DD) channel on TV, those living in cities could also access DD Metro. The crisis in 1991 forced the government of Prime Minister PV Narasimha Rao to institute economic reforms which led to the per capita national income increasing from Rs 29,686 to Rs 109,000 in 2019-20. Unfortunately, "The Modi government brought back industrial policy, usually associated with the licence-permit raj of the 1960s and 70s," wrote Rahul Jacob. "Most observers believe the principal opposition today to 1990s-styled liberalization is spearheaded by ministers within the Modi government rather than industry, which in many ways makes this reversal much more potent -- and permanent." "For starters, import substitution industrialisation (ISI), which entails progressive replacement of imports by domestic production, was precisely the strategy we had pursued until 1991," wrote Arvind Panagariya. "In Asia, most countries that have achieved industrialization have used a version of the same policy," wrote Diva Jain. "The only way for the Indian economy to break out of this middling rate of growth is to look outward for export-based growth drivers." Perhaps, the government wants to take us to our glorious past. All the way back.          

Should India ignore post-Brexit Britain?

A British think-tank Chatham House has issued a new report on world affairs in which "it has termed India, Russia, Turkey and Saudi Arabia as the 'Difficult Four' for a post-Brexit UK". Although it says that "India's importance to the UK is inescapable", it also says that "the overt Hindu nationalism of the ruling Bharatiya Janata Party is weakening the rights of Muslims and other minority religious groups", "And the government's broader crackdown on human rights activists and civil society groups is no longer being actively challenged by the judiciary, leading to growing complaints about erosion of the rule of law, not only from domestic groups but also the UN and other democracy watchers." "Behind closed doors across North Atlantic and European Capitals, domestic concerns -- usually unspoken in public -- have been bubbling since 2014 about growing religious and other forms of intolerance and suppression of critique and dissent in in India's domestic space," explained The Indian Express. "UK Prime Minister Boris Johnson has invited PM Narendra Modi to participate in person for the G7 summit to be held in the Cornwall region from June 11-13." An honor to be invited to the group of seven before China, Russia or Brazil, but not at all complimentary to be clubbed by Chatham House with Saudi Arabia led by Crown Prince Mohammad Bin Salman, who has compiled a long list of criminal accusations. "The black marks against India echo with a well-worn Western liberal playbook, fraught with disappointment that India, despite being the world's largest democracy, is a weak liberal ally in the international political sphere," wrote Prof Kate Sullivan de Estrada. "Post-colonial, non-Western states, even increasingly powerful states such as India, still do not enjoy full political and economic independence in how they make decisions at home, nor in their efforts to shape the agendas of international institutions." There is no doubt that India is weak, as shown by how blatantly China keeps occupying Indian territory and is to cut off water supply to the northeast of India by building a dam on the Brahmaputra River. The dubious victory of Joe Biden in the recent presidential election has brought a liberal administration. Retired Gen lloyd Austin has been confirmed as Secretary of Defense who would like to operationalise India's "Major Defense Partner" status but will continue to build relationships with Pakistan's military because "Pakistan is an essential partner in any peace process in Afghanistan". To show who is in charge, Biden has signed 30 executive orders in his first three days, giving more powers to trade unions, a $15 minimum wage, stopping Trump's wall, allowing immigration from Muslim nations and allowing trans people to use bathrooms of their choice. "The idea of the Anglosphere has a long lineage in Britain's history," wrote C Raja Mohan. "Many in Delhi ask why India should have anything to do with the resurrection of an idea that is rooted in London's colonial past. But if Delhi looks to the future rather than the past, it could find Anglosphere an interesting framework to engage with." But will it win assembly election in Bengal? Where are the optics?        

Maybe sovereign at home but will it be immune from US courts?

"US-based electric vehicle maker Tesla has registered with the Registrar of Companies in India as Tesla Indian Motors and Energy Private Ltd." However, before we start getting excited, "It incorporated itself in Bengaluru on January 8 with an authorised capital of Rs 15 lakh (Rs 1.5 million) and a paid-up capital of Rs 1 lakh (Rs 100,000)." Just for show, so far. "For all the hype, Tesla's foray into India is far from a done deal." Because, the cheapest Tesla car, at Rs 5 million, will be beyond the reach of most Indians. At present, electric cars cost almost double their petrol engine-driven counterparts even though the government has reduced GST on electric vehicles from 12% to 5%. There is also a dearth of charging stations. CEO of Tesla Elon Musk has strong views which may not conform with those of our government which does not tolerate any difference of opinion. Musk transferred both Tesla and SpaceX from California to Texas because he disagreed with the government of California. He said that government is a "monopoly that cannot go bankrupt", that "regulations are immortal", and that the government should "just get out of the way". Already, Tesla will route its investment into India through the Netherlands which will give it "tax benefits related to capital gains and dividend payments, say experts". The Indian government does not respect laws of, or agreements signed with, other countries. "Earlier this week, it authorized Antrix Corp to ask the National Company Law Tribunal (NCLT) for the winding up of Devas, a private firm to which the commercial arm of state-run Indian Space Research Organisation (ISRO) owes $1.2 billion, awarded by an international arbitration court in 2015 for a broken contract and confirmed by a US federal court last October," wrote an editorial in the Mint. In December 2020, "The Permanent Court of Arbitration at the Hague... not only invalidated India's $2.74-billion 2015 tax claim on Cairn Energy, but also ordered it to return up to $1.4 billion in funds withheld, interest and costs to the firm." In September, the court in Hague ruled that $2 billion tax claim on Vodafone "as well as interest and penalties, were in breach of an investment treaty agreement between India and the Netherlands". "A three-member tribunal at the Permanent Court of Arbitration in The Hague cited statements by the Prime Minister Narendra Modi and other ministers pledging not to use retrospective taxation to overturn a Rs 10,247 crore tax demand on British oil and gas company Cairn Energy Plc." Promises are meant to be broken. "India has challenged in Singapore an international arbitration court's verdict against it over a $2 billion tax claim involving Vodafone Group Plc, a senior government official told Reuters." India is steadfast in its demand for taxes, fair or unfair, but it is reluctant to pay its dues. "Multinational telecom gear vendors have again urged state-run telco BSNL to clear dues and said that it is becoming challenging for them to continue supporting the telco's pan India wireless network." BSNL owes nearly Rs 10 billion to Nokia, over Rs 10 billion to ZTE and Rs 4.80 billion to Ericsson. An international arbitration tribunal's ruling cannot override laws of a sovereign government, said solicitor general Tushar Mehta. Maybe, but US courts have the power to enforce judgement by attaching property. Does the government want to take on the US courts?           

Do they think we sit on our brains?

"In 1996, Michael Jackson played to a packed audience in Mumbai in what was to be his only performance in India," reports BBC. The then Shiv Sena government waived entertainment tax on the concert because $1 million was to be donated to a youth employment project run by the Shiv Sena. A consumer group challenged the waiver in court which froze the waiver and asked the government to "examine its merits". After 24 years, the present government led by Shiv Sena has reinstated the waiver and asked for the money to be deposited with the government because the youth project no longer exists. $1 million equals about Rs 73 million at today's exchange rate. This mocking story by BBC reflects our justice system. Why can't judges pronounce a judgement in 24 years? Recently the Supreme Court (SC) temporarily suspended the new farm laws and appointed a committee consisting of 4 experts to resolve the impasse between the government and farmers. Strangely, all 4 members appointed by the Court are strong supporters of the laws and the Court did not ask farmers to nominate their members to the committee. The day after it was set up Bhupinder Singh Mann resigned from the committee saying that he wanted to remain neutral.  The farmers promptly rejected the committee and refused to appear before it. Speaking in an unrelated case Chief Justice SA Bobde said, "There is lack of comprehension about the composition of a committee. This is not a situation where somebody alleges bias towards a person whose relative is a beneficiary." Indeed. And we sit on our brains. This was clearly to provide an escape for the government. "Although the court's move is a bit embarrassing for the Government because of its aggressive position during the deadlock, this is perhaps the best way to get out of the crisis," said a senior BJP leader. "Two key BJP leaders expressed hope that public sentiment would shift if the protesters did not accept the court's order." "India is the most centralised large economy in the world," wrote Prof Neelanjan Sircar. Wealth has concentrated in the hands of a few corporates during this government's tenure and has "weakened the political financing environment for opposition". The farmers are steadfast because they "understand that they have little opportunity to raise grievances through bargaining within the parliamentary or electoral system". "On the ground in Punjab, Reliance Jio telecom towers have been vandalised while Adani products are being boycotted," wrote Rajdeep Sardesai. "The SC simply refuses to hear constitutional challenges to far-reaching State actions, sometimes for years," wrote Gautam Bhatia. "By virtue of the electoral bonds scheme, thousands of crores of anonymous corporate donations have been funnelled to political parties (for structural reasons, a vast bulk of these donations go to the ruling party), setting up an entire system of opaque electoral funding." It is a sad state of affairs that citizens do not trust the government, the political system or the Supreme Court. How long before anarchy sets in.        

The stigma of inequality.

"The ongoing key reforms such as sops for manufacturing, easier labor laws, wooing FDI inflows and privatisation will help improve productivity and support long term-growth at 7.5-8 percent levels, which if played out well, can help India contribute 15 percent of global GDP growth by FY2026, says a report." It is not clear whether the report is talking about nominal or real GDP growth and "if played out well" depends on politics and on winning elections. Kawoosa, Jha and Sachdev put some numbers on what to expect 10 years from now. "According to the World Bank's projection, India will overtake China to become the most populous country in 2023, when its population  reaches1.42 billion." This is the last decade when "India's working-age group population is projected to increase from 55.8% this year to 58.8% by 2031", which is supposed to provide a 'demographic dividend', with increased productivity, increase in consumption and faster growth in GDP. Climate change could have a deleterious effect and delimitation of the Indian parliament could set off tensions between states with low and high fertility rates. While some are predicting growth rates of 7.5-8% others predict rate of growth at 4.5%, wrote Kawoosa et al. "Higher job losses among those below the age of 40 years has resulted in an ageing workforce, which is not favorable for a strong recovery of the Indian economy, according to the Centre for Monitoring Indian Economy (CMIE)." A weak growth means increasing poverty and inequality. "India's billionaires reported a rise in their combined net worth by more than a third during the first four months of the coronavirus-induced nationwide lockdown i.e. between April and July, defying the impact of the global economic fallout of the pandemic." Uma Shashikant details how her friend married into a nouveau riche family who waste vast quantities of food and buy gadgets that they do not use because they "lack respect for money". "The family began as simple salary earners. But the son associated himself with the powerful and politically well connected, and was soon dabbling in real estate, media, films, television, and such multiple enterprises that seem to be bringing more money than any of them know how to use, manage or protect." Previous Chief Economic Adviser Arvind Subramanian may bemoan "stigmatised capitalism" characterised by a complete mistrust of the private sector but you cannot blame people if politicians depend on crony capitalism to finance elections. "India's per capita income in 2019-20 was Rs 1,26,968, according to provisional estimates published on January 7," wrote Abhishek Jha. In 2017-18, annual per capita income in India was Rs 29,896 according to the Periodic Labor Force Survey (PLFS), Rs 44,901 according to the Longitudinal Ageing Study in India (LASI) and Rs 115,293 according to the National Accounts Statistics. These numbers show that the vast majority of Indians earn very little and after the lockdown "the bottom 10% of India's households lost 30 percentage points more of their income than the top 10%. Even individuals with secure, salaried jobs -- the cream of India's workforce -- saw their income decline by about 12% in 2020", wrote Lahoti, Jha and Basole. The real stigma is that of inequality. It is real.           
   

Whose patriotism is it?

Finance Minister Nirmala Sitharaman will present this year's budget to the parliament on 1 February. With the National Statistical Office (NSO) predicting a 7.7% contraction of the economy for 2020-21, "all eyes will be on the magnitude of fiscal stimulus the 2021-22 Budget will provide", wrote Roshan Kishore. Three numbers, which are tax buoyancy, share of direct and indirect taxes and share of total revenue given to states, need to be watched. "Overall tax buoyancy, measured as percentage change in gross total revenue divided by percentage change in GDP, has been falling continuously since 2016-17." While direct taxes are considered progressive, because the rich pay more, indirect taxes are regressive because the poor also are forced to pay equally. Even though consumption of petrol and diesel fell due to the lockdown, "Excise duty collection during April-November 2020, was at Rs 1,96,342 crore (Rs 1.96 trillion), up from Rs 1,32,899 crore mop-up during the same period in 2019, according to data from the Controller General of Accounts (CGA)." "The 14th Finance Commission set the share of states in central taxes at 42%." "States' share reached a peak of 36.6% in 2018-19 and has fallen sharply since," wrote Kishore. The Central government refused to pay compensation for shortfall in goods and services tax (GST) collection and asked them to borrow a total of Rs 2.35 trillion instead. "India is considering hiking import duties by 5% -10% on more than 50 items including smartphones, electronic components and appliances in the upcoming budget, three government sources privy to the discussions on Monday." This is being dressed up as support and protection to Indian industry under Prime Minister Narendra Modi's vision of 'Atmanirbhar Bharat' or 'self-reliant' India. "Tesla CEO Elon Musk kept his word of making debut in India in 2021 by setting up its first office in Bengaluru." As if on cue, the government intends to increase duties on furniture, hurting Swedish furniture maker Ikea which invested in India in 2018, and on electric cars which are what Tesla makes. The idea is to raise Rs 200-210 billion ($2.7-2.8 billion) in taxes. Musk, however, is a genius. "US automaker Tesla has chosen the tax-friendly jurisdiction of the Netherlands to route its India investment." "This corporate structure in India would offer Tesla tax benefits related to capital gains and dividend payments, say experts." The result will be that Indians will have to pay huge taxes to buy carbon-friendly electric cars, while the government loses out on taxes on the company because rates here are so high. Netherlands gains at the expense of Indians. "I would say keep the direct taxes stable, please do not change them. Please go easy on protectionism," advised Swaminathan Aiyar. In 2019, Sitharaman reduced corporate taxes from 30% to 22%, but increased the surcharge on individual income tax and dividends from shares were made taxable in the hands of the receiver, thus increasing tax liability. By increasing prices of imports the government is allowing Indian companies to increase prices on their products and the government will merrily suck up huge amounts in ad velorem GST. This Atmanirbhar Bharat is a great wheeze. Collect from import duties and from higher GST from citizens. All in the name of patriotism.   

Which is the true face?

"Reserve Bank of India (RBI) governor Shaktikanta Das has yet again said that equity valuations do not reflect reality and has even linked it to financial stability," wrote Aparna Iyer. "Analysts at Kotak Institutional Equities pointed out that the stress model relied heavily on past trend and the report offered little clarity on the extent of stress beyond the headline numbers." "The report has warned that bad loans on bank balance sheets may double by September 2021 to 13.5%." Rajya Sabha MP Subramanian Swamy tweeted, "Trapeze Artist Adani now owes Rs 4.5 lakh crores (Rs 4.5 trillion) as NPA (non-performing assets) to banks. Correct me if I am wrong. Yet his wealth is doubling every two years since 2016. Why can't he repay the banks? Maybe like with the six airports he might soon buy out all the banks he owes money." To that the Adani Group said that the allegations are not true and that "it maintains an impeccable record of not a single NPA in three decades of its existence". Former US Federal Reserve Chairman Alan Greenspan called it "irrational exuberance", meaning that asset prices did not reflect fundamentals of the economy. "While the economy is expected to contract this year, the stock market has rallied 80%. How's this possible?" asked Vivek Kaul. It could be because investors expect economic growth to roar back in 2021, or excellent corporate earnings growth despite the slowdown, but also because, "Since February 2020, the RBI has pumped in a massive amount of money into the financial system through various measures, some of which involve the printing of money." The RBI said that "it has drained Rs 2 trillion of liquidity from the system via the 14-day reverse repo auction as it begins the process of normalizing liquidity operations," wrote Gopika Gopakumar. "I believe that we will see a strong wave of growth as any country has to grow after being down 25% of GDP," said Prof Raghuram Rajan. India's GDP contracted by 23.9% in April-June quarter of 2020. "I also worry about the structural damage done and you know damage done to households, damage done to children who now have been taken out of school for a long time or who have not been able to keep up with their classes and we need to prepare for all that," said Rajan. "Looking at the Sensex, one thinks problems are over. No they are just starting." The economy needs structural reform which has to start with good governance, said Rajan. About the RBI he said, "We in India tend to be very, very two-faced about institutions. On the one hand, we want to improve the institutions and on the other hand, we resent any potential constraints they place on us." "American brokerage BofA Securities on Friday said the Indian economy continues to be 'weak', pointing to activity indicators tracked by it." Rural India is no better off. "Surprising as it seems, the average employment per household was 48.40 days in 2019-20 when the number of families that worked under the job scheme was 5.48 crore (54.8 million). In contrast, the employment per household has gone down to 44.38 days in 2020-21 when the number of families has  zoomed to 6.90 crore." This is under the government MGNREGA scheme to help the rural poor. So, is the economy strong as shown by the stock market, or weak as shown by the increasing number of poor needing help? Janus-faced economy.        

Its complex because they are not fools.

"GST (goods and services tax) is still a complicated tax regime with varying slabs, not easy to comprehend or comply with, and open to interpretation, harassment and avoidable litigation," wrote Captain GR Gopinath. "The GST council has fitted over 1300 goods and 500 services under four slabs of 5%, 12%, 18% and 28% under GST. This is aside the tax on gold that is kept at 3% and rough precious and semi-precious stones that are placed at a special rate of 0.25% under GST," explained Kotak Mahindra Bank. The system is complicated because it was intentionally designed to be so. There is a 10% customs duty on gold and a service tax of 1% for having to pay the duty, GST at 3% and VAT at 1.2% on the price of gold, customs duty and service tax , taking the total tax burden to 13.3% on pure gold, explained Aditya Birla Capital. On gold jewellery total tax works out to 24.85%. "India imports 800-900 tonnes of gold annually," wrote PB Jayakumar. "Various agencies estimate over 200-250 tonnes of gold is smuggled into India every year and that represents about one-fourth of the gold consumed in India." "According to Customs sources, the Customs and DRI seized 550 kg of smuggled gold in Kerala in 2019-20." The government can and does add taxes as it pleases under various pretexts. A tax on GST, varying from 3% to 204%, known in India as cess, is added on various products, depending on whether they are classified as 'luxury' or 'sinful' or both. No wonder, there are apparently 400,000 businesses which have been deemed to not having paid proper amount of GST, amounting to a total of Rs 9.3 trillion. The government introduced a 'Vivaad se Vishwas', meaning 'From Dispute to Trust' which promises not to persecute anyone who pays up whatever they demand. So far 45,855 have surrendered to the terror and paid a total of Rs 724.80 billion. Indian flatbreads, known as chapatis, are taxed at 5%, but when they are fried they are known as 'parotas. "A clever tax sleuth came up with the brilliant finding and slapped 18% GST, arguing that chapati and roti are flatbreads whereas parotas are layered breads and hence do not qualify for the lower tax slab," wrote Gopinath. Then there was the case of a GST raid on a poor 'kachoriwala' in Aligarh accused of hiding annual income of Rs 7 million. 'Kachoris' are fried savoury snacks. While the US government is to provide $17 billion to US airlines, in addition to the $25 billion they have already received, for coronavirus disruptions, jet fuel prices have been increased by 7.6% on 1 December, 6.3% on 16 December, 3.69% on 1 January and again by 3% on 16 January in India. Charges at Delhi Airport have also been increased making it more expensive to fly in or out. The outcome of exorbitant taxes is that most goods and services are out of reach of a vast majority of Indians who are grateful to receive handouts thrown at them if they are seen to be politically correct. Americans pay less tax so they are rich, we are taxed into poverty. Why is it so difficult to understand?                 

Is it a good idea to pour oil on fire of inflation?

"The rising trend in commodity prices calls for greater efficiency in inflation management, and makes an achieved real growth more important than ever, so that the additional liquidity created to support growth does not end up merely raising the prices of a static supply of goods and services. Ironically, the spurt in global commodity prices comes just when inflation finally seems to be coming down in India, consumer price increase now being 4.59%," wrote an editorial in the Economic Times.  Inflation in India is down because "overall food inflation has come down sharply from more than 9% in November to 3.4% in December, cereal inflation is now less than 1% on an year-on-year basis" and vegetable inflation in December was at -10%, wrote Prof Himanshu. "World food prices rose for a sixth month running in November, hitting almost a six-year high with the index posting its biggest monthly increase since July 2012," the Food and Agriculture Organization (FAO) said. Global inflation is about to pick up soon and strongly, wrote Richard Cookson and, "As has been the case for many years, global inflation has 'Made in Asia' stamped all over it." Retail inflation in India fell to 4.59% in December 2020 from 6.93% in November. Petrol and diesel prices have been rising to record levels almost on a daily basis and as transport costs rise so will prices of all goods. "According to data released by the Reserve Bank of India (RBI), currency in circulation grew by Rs 5,01,405 crore (Rs 5.01405 trillion) between January 1, 2019 and January 1, 2020." "Currency in circulation in 2020 grew by 13.2% to Rs 27.7 lakh crore as on Jan 1, 2021, from March 31, a year ago, according to recent data released by Reserve Bank of India," reported Bloomberg Quint. The Federal Reserve in the US has been pouring money into markets and this excess liquidity, along with a weaker dollar will cause inflation in the US. "The ECB's (European Central Bank) survey of professional forecasters in the final quarter of last year assigned more than 70% probability that inflation remains at or below the ECB's near 2% target over the next 5 years -- even though it also ascribed only a 3% chance of deflation persisting over that timeline," reported Reuters. "But many in financial markets remain convinced that rising global inflation will yet be a legacy of this crisis -- even if it largely relies on the United States for evidence and is the flipside of overwhelmingly bearish views on the US dollar." No wonder foreign investors are avoiding Indian bonds. Foreign investors hold $475 billion of Chinese bonds, $138 billion in Korea bonds, $55 billion in Malaysian bonds and just $41 billion in Indian bonds, wrote Aparna Iyer. They sold $13.7 billion of Indian paper in 2020 even as they bought Rs 1.4 trillion of Indian shares. They probably expect inflation to rise further with consequent increase in bond yields. The fire of inflation may just be simmering. Why is the government pouring oil on it? 

The odor is distinctly suspicious.

"India's Supreme Court has put one hold three contentious farm laws that have sparked weeks of protest," reported BBC. "The farmer groups have repeatedly said that they will settle for nothing less than a repeal of the laws, and the government has ruled out any rollback." "At least four farmers have killed themselves, and several others have died from ailments and the harsh winter cold." "Mr Modi has built a reputation for tough talking and playing hardball with his critics and his party is widely believed to have its ears to the ground," wrote Soutik Biswas. "The protests have originated in Punjab, the relatively prosperous farming heartland of India." Not so, said Dr Varinder Sharma. "Farmer's income registered a downward trend in the '80s which continues till today." Also, "Punjab's farmers have raised loans of more than Rs 30,000 crore (Rs 300 billion) to meet the expenses after they failed to maintain the requisite income level and failed to repay the loans." In 2017, farmers from Tamil Nadu protested in Delhi for 107 days after severe drought destroyed their crops but Modi ignored them. The protests are "about a lack of trust in the government and an assertive articulation of of federalism," said Prof Pratap Bhanu Mehta. "The Supreme Court on Tuesday constituted a 4 member committee for the purpose of holding talks between the Central Government and the farmers to resolve the protests over the three contentious farm laws. A notable feature of the composition is that all four members have expressed open views in support of the implementation of the farm laws." "Even as the Government called on all sides to 'honour' the Supreme Court's ruling on the agricultural laws, there was palpable sense of relief within the establishment and the BJP, which were desperate to end the stalemate without being seen as 'anti-farmer'." In fact, there is great pleasure as farmers may lose public support if they carry on with their protest. "The court's order putting on hold the farm bills is terrible constitutional precedent, bereft of judgement. It has an odour of cynicism behind it," wrote an angry Mehta. Perhaps to guard against contempt of court Mehta does not blame it directly. "The court is, perhaps unintentionally but damagingly, seeking to break the momentum of a social movement." "Over the past few years, the SC has shown a marked lack of urgency and, in fact, distressing inattention to cases that have involved important constitutional questions and lined up at its door," wrote an editorial in The Indian Express. "Now, its alacrity in taking into its own hands the ongoing impasse between government and farmers on the three farm laws, and its enthusiasm in playing arbiter, therefore, raises questions." In short, it doesn't pass the smell test. 

They took our rights one by one. What's the use now?

"Explaining the concept of minimum government and maximum governance, "Prime Minister Narendra Modi said, 'Earlier my Cabinet note would take six months to reach the entire Cabinet. But now it takes only 15 days. This is what minimum government and maximum governance is'." Just as minimum government, signifying reform, is good for the economy, "That same policy must guide India's social policy framework", wrote an editorial in the Mint. But, "Witness the surfeit of laws and policies we have seen that invade our private space, baring a tendency towards a maximalist state all too keen to impose itself on our personal lives. The most invasive of these relate to marriage, as seen in decrees issued by Uttar Pradesh (UP), Uttarakhand and Madhya Pradesh (MP) that go under the oxymoronic rubric 'love jihad' laws." "The turn at which the country stands today, the role of you bureaucrats is of minimum government, maximum governance. You have to ensure how to reduce your interference and also ensure empowerment of common people," Modi told probationers for the Indian Administration Service (IAS). "There is no criterion by which marital motive can be judged, but even if there were, freedom of faith and conscience constitutes a fundamental right granted to everyone by India's Constitution." Indeed, but The Qu'ran (2.221)  states, "And do not marry Polytheist women (Hindus are polytheist) until they believe (meaning convert to Islam). And a believing a slave woman is better than a Polytheist women, even though she might please you." Which means a marriage between a Muslim man and a Hindu woman is void unless she converts. This is direct pressure. "Oh ye who believe! Take not the Jews and Christians as your friends and protectors; they are but friends and protectors to each other," Qu'ran (5.51). "I did not hear him (the Prophet Muhammad) permit untruth in anything people say except for three things: war, settling disagreements, and a man talking with his wife or she with him," (Sacred Hadith, Muslim). So, a Muslim man may lie to his wife or to the woman he intends to marry. "Enslaving the families of the kuffar (unbelievers) and taking their women as concubines is a firmly established aspect of he Shariah (Islamic law) that if anyone were to deny or mock, he would be denying or mocking the verses of the Qur'an and the narrations of the Prophet," the Islamic State said to justify rape of Yezidi women. There was no such outrage when the government forced everyone to become a number supported by prints of all 10 fingers and iris scans in Aadhaar. New laws permit locking up in prison indefinitely without having to establish guilt. "Then they came for me -- and there was no one left to speak for me." No use fulminating now.