Smaller trough, so many snouts.

India suffered a balance of payments crisis in 1991, when foreign exchange reserves fell to $1.2 billion in January, which was sufficient for 3 weeks of imports, and had to mortgage 67 tons of gold to borrow money from the Bank of England and the Union Bank of Switzerland, wikipedia. This led to economic reforms under the then Prime Minister Narasimha Rao and a dismantling of the licence/permit Raj, wikipedia. However, annual growth rate did not differ much from the 1980s. "India moved to a higher growth trajectory only after the year 2000," wrote Niranjan Rajadhyaksha. Maybe, but, "Independent India had a severe balance of payments crisis almost once every decade: 1957, 1966, 1981, 1990. There has been no comparable crisis over the past 30 years, despite a scare in 2013." After hitting a record high of $608.081 billion, India's foreign exchange reserves fell by $4.148 billion to $603.933 billion in the week ending 18 June, Times of India (TOI). This should help India to defend the rupee if and when the US Federal Reserve starts tightening monetary policy, "but analysts and traders warn a slowing economy and an expanding fiscal deficit still make it particularly vulnerable to capital flight", Business Today. "India has reached the end of the road of the gains made from the 1991 moment," wrote Yamini Aiyar. Because, "Corruption scandals under the United Progressive Alliance regime, the twin balance sheet problem, the consolidation of capitalist oligarchies and increased opacity in electoral  finances under the current government are illustrations of this entrenched cronyism, notwithstanding reforms such as the Insolvency and Bankruptcy Code," Hindustan Times (HT). Foreign currency reserves have increased because "Our imports of goods in 2020-21 fell to $392.2 billion from $474.2 billion in 2019-20," wrote Vivek Kaul, but our exports and inward remittances did not fall as much, Mint. Also, "India has emerged as the biggest recipient of foreign portfolio investments this fiscal with net inflows worth Rs 2.6 lakh crore (Rs 2.6 trillion), driven by ample liquidity in global markets and hopes of faster economic recovery, according to experts," The New Indian Express. "India's record more than $600 billion of foreign exchange reserves might not be good enough, as it falls short on some measures including import cover and liability outflows, according to new research from the central banks," wrote Anirban Nag. "The pile is the world's fifth-biggest after China, Japan, Switzerland and Russia, and is enough to cover 15 months of imports. That's less than the 39 months' cover offered by Switzerland's reserves, 22 by Japan's, 20 by Russia's and 16 months by China's pile, according to the RBI researchers. Besides, India's net international position -- which is assets over liabilities -- is a minus 129% of gross domestic product. The minus figure denotes that liabilities owed to foreigners are more than assets," Economic Times (ET). In 2019-20, India's GDP was Rs 146 trillion, fell to Rs 135 trillion in 2020-21 and is expected to grow to Rs 146 trillion in 2021-22 if the growth rate is 8.3%, wrote Udit Misra. So, India would have lost full two years of growth. Even if growth jumps to 10.1%, GDP will reach only Rs 149 trillion. Inflation, both retail and wholesale, is going up, bank credit to commercial sector is plummeting because of low consumer demand and the government is spending less," The Indian Express (TIE). The Covid crisis has driven the government back to the sleight of hands of the 1980s, which resulted in the balance of payments crisis in 1991. The RBI transferred Rs 991.22 billion to the government as dividend for the 9 months to 31 March, which is second only to that of Turkey, TOI.  "The government is set to see a dividend windfall thanks to its holdings in public sector undertakings," HT. "It's not just politicians linked to the ruling BJP who have been made independent Directors of Public Sector Undertakings. When it comes to patronage from the ruling establishment, officialdom isn't far behind," TIE. So many snouts in the trough. The trough is getting smaller. Another crash?

It is all due to the premorbidity.

Finance Minister Nirmala Sitharaman announced new measures to stimulate the economy. "Rs 1.1 lakh crore (Rs 1.1 trillion) loan guarantee scheme for Covid affected sectors", including Rs 500 billion for the heath sector. Rs 1.5 trillion for Emergency Credit Line Guarantee Scheme, loans to micro finance institutions, loans to tourism sector, free visas to 500,000 people and subsidies for fertilizers, job creation, free food grains for the poor, public health and exports, Economic Times (ET). "Estimating the additional burden on the 2021-22 budget from three direct stimuli in the package at Rs 1,18,390 crore (Rs 1.184 trillion) or 0.5% of GDP for the fiscal year, EY said this was of limited magnitude. If the guarantee schemes and the announcements that had already been made earlier are excluded, the step up in the fiscal outgo within FY22 could be just Rs 60,000 crore (Rs 600 billion), Icra noted," The Financial Express. "Industry leaders and economists said the new loan guarantees, amounting to $35 billion, may provide some temporary relief but would not be sufficient to boost economic growth," ET. The word 'stimulus' has completely different meanings in India and the US. In the US, President Joe Biden signed a $1.9 trillion relief package which will give direct cash payments of up to $1,400 to most Americans, CNBC. In 2020, the US government spent $2 trillion in March to give cash payments of $1,200 for individuals and $500 added for every child, as well as grants to various sectors, CNBC, and another $900 billion in December which provided $600 to individuals, CNN. In India, Prime Minister Narendra Modi announced a grand package of Rs 20 trillion to stimulate the economy in May last year, Hindustan Times (HT). This was announced in 5 tranches over 5 days by Sitharaman. "Dubbed Atmanirbhar Bharat Abhiyan, this Covid relief package puts bold reforms at the heart of Modi's stated plan to make India self-reliant so that any other crisis that may emerge in future could be efficiently tackled," ET. However, calculations of hours of drama played out over 5 days showed that fiscal spending would be Rs 1.50 trillion which was 0.75% of the GDP, ET. "A large part of the rest of the package is actually loans provided by banks, many of them without collateral, leveraging $105 billion of liquidity provided by the central bank, government officials said," ET. The Reserve Bank (RBI) has maintained a negative real interest for the last one year and has resorted to quantitative easing under the guise of Government Securities Acquisition Programme (G-SAP) to flood the economy with liquidity, The Indian Express. The Monetary Policy Committee (MPC) of the RBI kept the policy rate unchanged at 4% and Governor Shaktikanta Das announced that the central bank would purchase (government) bonds worth Rs 1.20 lakh crore (Rs 1.20 trillion) under GSAP 2.0 from July to September," ET. Cheap loans have been utilised by companies to reduce their debts. "An analysis of the top 15 sectors, representing more than 1,000 publicly traded firms, by research arm of State Bank of india (SBI), showed companies reduced debt of more than Rs 1.7 trillion in FY21," Mint. Meanwhile, "India's debt soared to 58.8% of the gross domestic product in the fiscal year ended March from 51.6% a year ago as the economic contraction forced the government to borrow a record amount to meet revenue shortfall, finance ministry data showed, prompting experts to raise concerns over debt sustainability in the medium term," HT. Why so? "India's GDP -- at a high of 7-8% when Mr Modi took office -- had fallen to its lowest in a decade -- 3.1% -- by the fourth quarter of 2019-20," BBC. Just as people with premorbid conditions were more likely to die of the coronavirus, so the premorbid Indian economy is gasping due to the virus. All down to the government and RBI.

May not be what it seems.

"J&K's (Jammu and Kashmir) residents may not have been completely accepting of the loss of full statehood along with Article 370, but they too know changing times call for changing resolutions," wrote Shashi Shekhar, after his visit to the valley in March where he found "that people were fed up with violence, and the young felt that this was crippling their chances at a normal life". Article 370 allowed the state "its own constitution, a separate flag and freedom to make laws" and also to "bar Indians from outside the state from purchasing property or settling there", BBC. Article 35A "defined a permanent resident as someone who was a state subject on May 14, 1954, or who has been a resident of the state for 10 years", and, hence, stopped Indians from outside J&K from acquiring property or applying for jobs with the state government, Economic Times (ET). Both Articles 370 and 35A were revoked in August 2019, all political leaders in Kashmir were arrested and telecom and internet services were cut off, (ET). A curfew was imposed on all of Kashmir and citizens prevented from traveling or meeting, wikipedia. The coronavirus outbreak resulted in a lockdown just as schools and colleges were opening up, India Today. Last week Prime Minister Narendra Modi held a meeting with politicians of all parties from J&K where he proposed new elections after delimitation, which means creating new constituencies for the assembly, NDTV. Why? "On the face of it, the external environment -- in which Pakistan might be in the driving seat in Kabul through the proxy of the Taliban before the end of this year, the situation on the Line of Actual Control where the Chinese have adamantly stayed put, the spectre of a two-front war, therefore the need to strengthen the Line of Control and begin a dialogue with Pakistan, as well as remove Kashmir from the agenda of US Congressional hearings -- does present a compelling package of national security reasons for the sudden decision to engage these political parties after two years of saying they don't matter," wrote Nirupama Subramanian. "The Union government's 'historic' decision to bifurcate Jammu and Kashmir and Ladakh as two separate territories have bolstered national security and led to a major reduction in terrorist activities, Defence Minister Rajnath Singh said on Monday," ET. "In a significant development having far-reaching ramifications in respect of strategic alignments in South Asia, both India and Pakistan have agreed to 'mutually beneficial and sustainable peace' along the borders from the midnight of February 24/25 2021," ET. In April, President Joe Biden announced complete withdrawal of all US troops from Afghanistan, starting May 1 and ending by September 11, NBC News. "The Taliban are advancing at lightning speed across Afghanistan as US troops withdraw. They now control a third of the country, are fighting for the control of 42 percent more -- and may even be slowing their advance on purpose," NBC. "India's August 2019 move in Kashmir is stuck in Pakistan's throat. It can neither swallow it nor spit it out. Pakistan's current Kashmir debate is about finding a way out," wrote C Raja Mohan. Maybe not. Pakistan has been stuck on the grey list of the Financial Action Task Force since 2008 because of hosting terrorist groups on its territory and has suffered a loss of $38 billion to its economy in all that time, "according to a research paper published by the Islamabad-based independent think-tank, Tabadlab", ET. Now it has secured its northwest border as the Taliban has become respectable with both the US and India negotiating directly with the terrorist group, Prof Harsh V Pant and Kriti M Shah. India has had to shift 50,000 troops to its border with China so that we have 200,000 troops on that border, ET. "Two explosives laden drones crashed into the IAF station at Jammu airport in the early hours of Sunday, ET. A Special Police Officer (SPO), his wife and daughter were gunned down at 11 PM inside their home two days back, ET. India is facing two enemies. Peace in Kashmir is imperative. Modi needs help of Kashmir politicians.   

Mr Chatur is very chatur to have escaped.

"India's offensive cyber capability is 'Pakistan-focused' and 'regionally effective', and not tuned towards China, says a new report by International Institute for Strategic Studies (IISS), an influential think tank that has done a qualitative assessment of cyber power in 15 countries," The Indian Express (TIE). If it is not directed at China which is occupying 43,000 sq km of Indian territory, India Today, then it cannot be classified as "regionally effective". "In the second tier, with world-leading strengths in 'some' categories are: Australia, Canada, China, Israel, Russia and the United Kingdom." Of these, Australia, Canada and the UK have no regional enemies in close proximity and yet have capable cyber attack capabilities. While we are so deferential towards China, "Chinese cybercriminals are targeting the Indian power sector, according to a report by a US based cybersecurity company, Recorded Future," Business Insider. "10 distinct Indian power sector organisations, including 4 of the 5 Regional Load Despatch Centres (RLDC) ... have been identified as targets in a concerted campaign against India's critical infrastructure," said the report. Chidambaranar and Mumbai ports were also identified as target." Of course, no one can hack into Indian infrastructure without knowledge and encouragement of the Chinese government because the 'Great Firewall' controls what Chinese citizens can see or write on the internet, wikipedia. The hacking was a warning by China that India is there for the taking. China being our biggest threat why not devote most of our cyber capabilities against it? Because most of India's cyber strength is directed against Indian citizens. "Twitter's interim resident grievance officer for India, who was appointed earlier this month, has stepped down," Times of India (TOI). "Dharmender Chatur was recently appointed as the interim resident grievance officer for India by the microblogging platform under the new digital rules that came into force." 'Chatur' is Hindi for 'clever', and Mr Chatur has justified his name by escaping from this poisoned chalice because he could get into big trouble with certain police forces in India through no fault of his own. "The Karnataka High Court has granted interim relief to Twitter MD Manish Maheshwari and it has directed the Ghaziabad Police not to take any coercive steps against him," Zee News. "In the FIR (first information report), the Police had said, 'There is no communal angle to the incident in Loni where a man was thrashed and his beard was chopped off. The Wire, Rana Ayyub, Mohammad Zubair, Dr Shama Mohammed, Saba Naqvi, Maskoor Usmani, Salman Nizami -- without checking the fact, started giving communal colour to the incident on Twitter and suddenly they started spreading messages to disrupt the peace and bring differences between religious communities'." We can understand a man being beaten over some dispute but it is hard to think of any obvious reason for chopping off a man's beard. "India reported the highest number of recorded internet shutdowns last year, at 109 out of a total of 155 globally. This is the third consecutive year India has topped the global charts on this score, a new report by digital rights and privacy organisation Access Now has found," Business Standard. "Special Rapporteurs from the United Nations have written to India noting that the government's new IT Rules go against international human rights norms in their current form. India's response contends that such concerns are 'misplaced' and that the country's democratic structure remains unaffected by the Rules," The Wire. "Activist Rona Wilson's computer was compromised for over 22 months before the Pune Police raided his home in New Delhi and arrested him as co-accused in Bhima Koregaon violence, claimed the Massachusetts-based digital forensics firm Arsenal Digital," The Tribune. Whatever the government may say foreigners see India as "partially free", "flawed democracy" or "electoral autocracy", BBC. Will Prime Minister Narendra Modi continue to get hugs as before? Mr Chatur is not waiting to find out. 

Can the RBI afford to wait for the sands of time running out?

"In five of the six auctions for 10-year government bonds this quarter, the debt papers which were offered remained unsold," Times of India (TOI). The government borrows money from the market by selling bonds, Investopedia, to finance spending in excess of its revenues from taxes and seigniorage, Investopedia. Instead of printing notes to finance its deficit the government borrows from the market through the Reserve Bank of India (RBI) which invites bids for bonds and sells to the highest bidder. If bids are less than the cut-off price set by the RBI it may choose to withdraw the bonds offer, when the auction is said to devolve to the underwriters, Economic Times (ET). "In only one of the six auctions, the government opted for a green shoe option and mopped up nearly Rs 2900 crore (Rs 29 billion) extra, in addition to the planned Rs 14,000 crore (Rs 140 billion) announced by the RBI, the data from the central bank showed." In the green shoe option the underwriters could have received higher commission or extra bonds to make up for lack of demand, Investopedia. "Of the five auctions, each of Rs 14,000-crore, three were cancelled and two partially devolved on the bond houses." "The low interest among bond dealers for 10-year bonds, usually the most liquid among gilts across tenures, indicate that in future the government may have to pay higher rates to mobilise funds from the market." Finance Minister Nirmala Sitharaman predicted that the government would need to borrow Rs 12 trillion in 2021-22, in this year's budget, presented in February, The Print. Which is why the RBI is tying itself in knots to keep yields below 6% so as to keep a lid on government interest payments in the future. Yields of 10-year bonds are at 6.028%, investing.com. For some reason, the RBI Governor Shaktikanta Das believes that market repression due to forcibly suppressed yields are a "public good". "We look forward to cooperative solutions for the borrowing programme for the second half of the year," he warned in October last year, Aparna Iyer. "Bond investors were not pleased because they believe that amid rising inflation and economic uncertainty, the government should pay higher," Mint. High inflation means that the purchasing power of the rupee is going down, which means in 10 years the value of money invested in bonds would be much lower than today, so dealers want a higher interest rate to compensate for the loss in value. Comparing with the dollar gives a picture of how the rupee has been devaluing. In 2007-08, one dollar bought about Rs 40, wikipedia. Since 2008, the US has averaged inflation at around 2% in the 13 years to 2021, Inflation Data, while inflation averaged at around 7-8% in India in the 13 years from 2008 to 2021, inflation.eu. At 7% average inflation the rupee should be trading at 76 to the dollar today, and at 8% average rate of inflation the exchange rate should be 86 rupees to one dollar. The exchange rate of the dollar is just a tad over Rs 74 today, xe.com. The positives for the rupee are the foreign exchange reserves in excess of $600 billion, TOI, and huge investments into our stock markets by foreign portfolio investors (FPI), pib.gov.in, while the negatives are high inflation in India and the RBI's loose monetary policy of increasing liquidity and low interest rates to help the government. "Taking all these factors into account, one can foresee the rupee moving in the range of Rs 74-75 to the dollar, unless there's a shock of some sort, though none looks likely at present," wrote Madan Sabnavis. That "unlikely" shock would be a rise in interest rate in the US where some members of the Federal Reserve foresee interest rate hikes next year to calm inflation, CNBC.  "Higher rates in the US could hit Indian stocks badly, weaken the rupee and raise the landed price of crude oil," wrote Shettigar and Misra. The RBI can repress Indians but the Fed is much more powerful. It has its head stuck firmly in the sand. What will it do when the sand runs out?   

Why Modi has no need to worry.

The Bharatiya Janata Party (BJP) of Prime Minister Narendra Modi is accusing the Aam Aadmi Party (AAP) government of Chief Minister Arvind Kejriwal of Delhi of "gross errors" and "exaggeration" in its demand for oxygen "during the peak of the second wave of the Covid-19 pandemic", India Today. A court appointed Task Force on Oxygen Audit submitted an interim report in which it detailed how hospitals miscalculated demand, data from some small hospitals are missing and the difference in the calculation of requirement of oxygen for non-ICU beds between the Central and Delhi governments. The AAP trounced the BJP in assembly elections in Delhi in February 2020, winning 62 out of 70 seats, wikipedia, which would have been particularly disappointing for the BJP after it won an absolute majority with 303 out of 545 seats in the Lok Sabha election of 2019, wikipedia. Assembly elections must be held by December 2022 in Modi's home state of Gujarat, wikipedia, and Kejriwal has promised that AAP will contest in all 182 seats for the Gujarat Assembly next year, Hindustan Times (HT).  Dilip D'Souza analysed "this week's miracle that's been all over the news: the day, Monday 21 June, when India vaccinated well over 8 million people, actually, closer to 9 million", Mint. "Data, however, suggests that the record 8.6 million vaccinations was enabled by a slowdown in vaccinations in some Bharatiya Janata Party-ruled states in the run up to Monday," Quartz India. Madhya Pradesh delivered just 692 doses the previous day. "While 338,847 vaccine doses were delivered on June 16, the next four days showed a steeply declining trend: 124,226 doses on June 17, 14,862 doses on June18, 22,006 doses on June 19 and just 692 doses of the vaccine on June 20." "On 22 June, India's vaccination count dropped to 5.9 million," D'Souza. "Hoard on Sunday, vaccinate on Monday, and go back to limping on Tuesday. That is the secret behind the world 'record' of vaccinations on a 'single day', tweeted P Chidambaram (Congress)," The Indian Express. Even with all the shenanigans it was not a record. "On June 21, when India's vaccine numbers reached a record- high of 8.6 million, China administered 20.80 COVID-19 vaccine doses -- more than twice as much as India's count, data from our World in Data showed," Fact Check. Perhaps, this highly embarrassing stunt was in the making for sometime. "A Union health ministry letter to all states and UTs (Union Territories) warning that data on vaccine stocks and temperature at all levels of vaccine storage is 'owned' by the ministry and should not be shared without its consent is being termed 'a gag order' by public health activists," Times of India (TOI). In January, Union Health Minister Harsh Vardhan claimed, "We received success to an extent in our fight against COVID-19, in one year," Zeenews. "To further speed this up, our scientists developed two indigenous vaccines" which "have been presented before the country like 'Sanjeevani' (life saving plant in the Ramayana) for us". Soaring number of cases, people begging for hospital beds and people dying for lack of oxygen was reported by the BBC in April. As India begged for help, after claiming victory, "Planeloads of ventilators, oxygen supplies and antiviral drugs began arriving last week, with photos showing massive parcels being unloaded at New Delhi airport. There's just one problem: for many days much of the cargo sat in airport hangars as hospitals on the ground pleaded for more provisions," CNN. "While hospitals plead for life-saving oxygen and Covid-19 patients die in their thousands, India's Prime Minister Narendra Modi is pushing ahead with a $1.8 billion parliamentary revamp  -- including a new home for the country's leader," CNN. Suppression of news, brazenly false claims, threats, and shameless stunts come within the politics of death, to win elections. The Western media has been dismissed as biased but it is not, The Print. Modi has total control. Bhakts are drinking cow urine and cleaning themselves with cow dung to prevent Covid, Reuters. Who needs oxygen?     

Control your own karma, don't beg.

"High consumer and wholesale price inflation numbers amid low/no growth have made matters interminably worse for the Indian economy. Note: We are now in a red alert zone on stagflation," wrote Prof Deepanshu Mohan. As the economy opens up from regional lockdowns, households and firms will buy what they need regardless of supply constraints, which will result in higher prices. Mohan recommends, "On the fiscal front, what is required at this point is the provision of greater direct income support through unconditional cash transfers to households, giving them the means to spend." But, that will just stimulate independent spending which will push prices even higher as per Mohan's analysis. "The government should not be deterred by a worsening fiscal deficit in the short run as the additional growth that it generates may make debt consolidation easier when things normalise," agreed Abhishek Anand and Lekha Chakraborty. "The RBI has reduced the benchmark repo rate by115 basis points since 2020. With headline as well as core inflation inching up in recent months, the RBI may not be in a position to further cut the policy rate." What the economists do not explain is, what is the point in increasing subsidies to people when the government is directly sucking money out of people's pockets by consistently increasing the price of petrol and diesel to new record levels everyday? goodreturns.in. This is because of soaring taxes on fuel. "Over the past five years, the central government's excise duty collection from petrol rose 167 percent from Rs 27,279 crore (Rs 272.79 billion) in 2014-15 to Rs 78,230 crore in 2019-20. This has further increased to Rs 89,575 crore (Rs 895.75 billion) during the April to January period of 2020-21, owing to the rise in taxes last year. A similar hike was seen in diesel, with excise collection almost tripling to Rs 1,23, 266 crore (Rs 1.233 trillion) in 2019-20 from Rs 42,881 crore in 2014-15. For the April to January period of 2020-21, this has further increased to Rs 2,04,906 crore (Rs 2.049 trillion)," moneycontrol. com. So, not only are we forced to pay exorbitant prices to fill own vehicles, we have to pay higher prices for everything because of rising transport costs. "Union petroleum minister Dharmendra Pradhan on Thursday asked oil producers' cartel -- Organisation of the Petroleum Exporting Countries (OPEC) -- for restoring output to bring down international crude oil prices to a reasonable band, adding that their strategy of production squeeze is stoking inflation and restricting economic recovery of energy importers such as India," Hindustan Times (HT). How our government can ask other nations to sacrifice their earnings so that it can tax the bejesus out of its own citizens would be amusing if it was not so mystifying. India's imports of oil from the Middle East fell to 52.7% of its total imports in May, from 67.9% in April, HT. Fair play to us. That's how the market operates. On 21 June, the price of petrol in the US varied from $2.726 per US gallon on the Gulf Coast to $3.764 on the West Coast, eia. This gives an average of about $3.5 per US gallon which works out to about Rs 70 per liter. The consumer price index in the US jumped to 5% year-on-year in May, US Bureau of labor Statistics. "The US dollar held near multi-month highs on Friday as investors warily awaited US inflation data," Reuters. "The blue-chip Dow and the S&P 500 were set for their worst day in a month after Bullard, president of the St Louis Federal Reserve, said he was among the seven officials who saw rate increases beginning next year to contain inflation," Economic Times (ET). "Higher rates in the US could hit Indian stocks badly, weaken the rupee and raise landed price of crude oil. This  could result in inflationary pressure," Jagadish Shettigar & Pooja Misra. Will India ask the US Federal Reserve not to increase policy rates because it will cause our economy to tank? "Two emerging-market icons are watching prices jump and steering very different courses: Brazil is cracking down, while India prefers to wait and hope the phenomenon flames out on its own," wrote Daniel Moss. "Karma is in our hands," said Lord Krishna in the Gita. Begging is not karma. 

Unemployment and poverty are no dividends.

"Modern capitalism, as we know it, has developed in relatively less densely populated regions of Western Europe and North America (with the exception of Japan). It is no wonder that low population was seen as a virtue for economic growth," wrote Roshan Kishore. "By 2100, which is as far as UN population projections go to, India's population will be 1.45 billion after having peaked at 1.65 billion in 2059." "According to the government's population projections, 53.6% of India's population in 2021 is under the age of 29. More than a quarter of India's population is 14 years or younger." This is supposed to be the mythical 'demographic dividend', that everyone keeps blathering on about, where you have a young population of workers who will increase productivity and collection of taxes. "Demographic dividends are occurrences in a country that enjoys accelerated economic growth that stems from the decline in fertility and mortality rates," Investopedia. In fact, that has been proven by China's one child policy which prevented 250-400 million births, released women into the workforce and resulted in higher GDP per capita. "With better GDP growth has come better nutrition, rising levels of education, longer life expectancies, and higher living standards for the vast majority of Chinese people," The Conversation. China's nominal GDP is expected to reach $16.64 trillion in 2021, wikipedia, but GDP per capita was around $11,000 in 2020, CNBC. On the other hand, "Japan's population shrank by a record 420,000 people last year, government estimates show," as "The total fell for a 12th straight year, shattering the previous record of 329,000 set just a year earlier," Nikkei Asia. And yet the GDP per capita was over $40,000 in 2019 with an upward trend, The World bank. Bangladesh reported per capita income of $2,227 in the financial year 2020-21, while India's per capita income was a pathetic $1,947.417, new india express. It is not enough to have loads of people in working age if the labor force participation rate has dropped from 54.813 in 2009 to 49.166 in 2020, CEIC data. "The labour force participation rate (LFPR) is defined as the section of working population in the age group of 16-64 in the economy currently employed or seeking employment. People who are still undergoing studies, housewives and persons above the age of 64 are not reckoned in the labour force," Economic Times, (ET). The LFPR for women has dropped precipitously from near 32% in 2005 to around 21% in 2019, while that of Bangladesh is a healthy 36%, The World Bank. No wonder people of Bangladesh are getting wealthier. "The 2018 Periodic Labour Force Survey (PLFS) shows that rural females who have studied up to primary are least unemployed (at 0.6 percent) followed by their urban female counterparts at 1.6 percent," Business Today. Unemployment for rural postgraduate-educated women is at 36.8% while for rural graduate women is at 32.7%. "Among male rural youth as well, the percentage of unemployed steadily climbs from 3.1, 9.5, 18.1 and 13.3 for primary, high school, graduate and postgraduate students respectively. Among urban youth, the numbers are a bit higher but show a similar trend." A huge and growing population needs to live, so they occupy public land and build unsafe buildings, one on top of the other, Hindustan Times (HT), which are then made legal by politicians before elections. Now the Delhi Development Authority (DDA) proposes to give ownership rights to illegal constructions on the flood plains of the Yamuna River, Times of India (TOI), possibly creating a human and an environmental disaster in the future. Experts, on the other hand, have urged the DDA "to ensure that no construction, even to the extent of building cycleways, is carried out in the active floodplain", TOI. A growing number of people with no jobs have to eat so Prime Minister Narendra Modi claimed to have initiated a "new model of reforms" which means allowing states to borrow more money so as to dish out subsidies. The states are being forced to borrow because the Centre has not paid Rs 74,398 crore (Rs 743.98 billion) GST Compensation for 2020-21, according to West Bengal Finance Minister Amit Mitra, The Financial Express. Pm Modi is truly a jumla master, The Print.   

If one man is important, what about an entire race?

One week back President Joe Biden of the US met President Vladimir Putin of Russia in Geneva for their first face-to-face talks, Reuters. Biden claims to have lectured Putin about human rights, about Ukraine and warned him about "devastating consequences" if Alexei Navalny died in prison. Biden has to appear tough because there are lingering questions about his election victory with former President Donald Trump claiming massive voter fraud, Newsweek. "More than a dozen Republican House members, led by former White House doctor Ronny Jackson, asked President Biden Thursday to undergo a cognitive test and release the results 'so the American people know the full mental and intellectual health of their President'," New York Post. Biden is protected by his aides. White House press secretary Jen Psaki "told CNN's David Axelrod that the communications shop frowns on Biden's willingness to engage with reporters who shout questions during Biden's public appearances," USA Today. Biden warned Putin about cyberattacks on critical infrastructure. "I gave them a list, if I'm not mistaken -- I don't have it front of me -- 16 specific entities; 16 defined as critical infrastructure under US policy, from the energy sector to our water systems," "The implicit red line was surprising," wrote Prof Meghan L O'Sullivan. Because "President Barack Obama's red line for Syria was a foreign affairs fiasco, with the administration talking about punitive strikes in 2012, only to back down once it was found there was no support in Congress for military action," Mint. "The United States is preparing fresh sanctions against Russia over the near-fatal poisoning of Kremlin critic Alexei Navalny, a top White House adviser warned," The Moscow Times. That is just one person, while China is trying to exterminate the entire Uyghur population in Xinjiang region. "China's persecution of the Uyghurs -- a mostly ethnic Muslim minority that Beijing paints as a separatist and terrorist threat -- is now well established," Vox. If the death of one man invites sanctions against Russia, by that logic the US should cut off all relations with China, but US multinationals like Apple are, not just bending over, but crawling to the Chinese Communist Party to continue business with China. Already in 2021 US imports from China amounted to $151 billion worth while exports amounted to a paltry $46.6 billion worth, and in 2020, US imports from China was a whopping $435 billion worth while exports were about half at $124.5 billion, The United States Census Bureau. Also, if we are talking about killing of civilians, there have been 247 incidents of mass shootings in the US in 2021, with 283 fatalities and 1,005 people injured, wikipedia. The numbers have risen steadily every month. Biden was sworn in on 20 January. What about China's cyber activities. Chinese hackers are not small time crooks, like DarkSide gang which hacked the Colonial Pipeline in the US in April for a ransom of $4.4 million, most of which was recovered by the US Justice Department anyway. The Chinese government has set up hacking operations like the PLA 61398 unit on Datong Road in Shanghai's Pudong District which is engaged in hacking into "blue chip companies in important industries such as aerospace, satellite and telecommunications, and information technology", CNN. By stealing US technology, China can advance its own weapon systems, become more powerful than the US and dominate the world. After a G7 statement on human rights in China, a Chinese spokesman said, "Stop slandering China, stop interfering in China's internal affairs, and stop harming China's interests," BBC. In other words, "We will do what we like, even if we wipe out an entire race. We don't care what anyone says." So, has Biden got the appetite to take on the real villains or is he going to concentrate on photo-ops. If Jen Psaki allows, that is. 

Don't blame the world when you are fanning flames.

Central government employees are to get Dearness Allowance (DA), which is a hedge against rising prices, from January 2020 to June 2021, as per the 7th Pay Commission. It will be calculated as 4% of basic salary from January to June 2020, 3% from June to December 2020, and 4% from January to June 2021. Thus, except for the 6 months between June and December 2020 they get 4%, which means that they are going to receive a total of 7% in the financial year 1 April 2020-31 March 2021 as compensation for inflation. Why so much? "In 2020, the average CPI inflation was 6.63%," wrote Joydeep Sen, And "The RBI is projecting inflation at 5% or a little north of 5% till September," Mint. According to inflation.eu, the average CPI inflation was at 5.58% in 2020, and is at 4.62% in 2021.  It is impossible to understand this enormous handout to the overpaid burden on the Indian taxpayer when we are paying around 60% taxes on petrol and diesel, The Print. "Retail inflation accelerated to a six-month high of 6.3 percent in May, breaching the upper tolerance limit of the inflation target set by the Reserve Bank of India's monetary policy committee," Business Standard. "Wholesale price inflation climbed to 12.94% compared to -3.37% in May 2020 due to base effect," Economic Times (ET). Core inflation, which strips out volatile food and fuel prices, jumped by 10% in May compared to 8.3% in April 2021, NDTV. In 2007-08, one US dollar bought 40 Indian rupees, wikipedia. Today $1 will buy Rs 74, Xe. The reason why the rupee has fallen nearly 90% against the US dollar is because of inflation which erodes the buying power of the rupee. The highest average inflation in the US since 2007 was in 2008 when it rose to 3.85%, followed by 3.16% in 2011, following which it has stayed well below 3%, Inflation data.com. It was 1.24% in 2020 and 1.81% in 2019. However, "US consumer prices spiked last month, with the inflation rate accelerating to 5 percent for the 12 months ending May," and core consumer price index rose 3.8 percent over the last year," Times of India (TOI). "Consumer prices paid by city dwellers in the US rose more than 7% last month and more than 9% in April on an annualized basis. If this keeps up for the rest of then year, it will be the highest inflation rate America has experienced since the 1980s," wrote Allison Schrager. At its latest meeting the US Federal Reserve forecast two interest rate hikes in 2023 but left the rate at zero lower bound for now and will continue buying $120 billion worth of bonds every month, CNBC. The bond market is not worried. "Yields fell over the previous week and remain low by historical levels, even after rising on the back of Jay Powell's speech on Wednesday," Mint. The reason for low yields is the enormous bond buying by the government, which increases bond prices and lowers yields, as well as reduced bond sales by the Fed, creating scarcity. But bond yields are poor at predicting inflation. "In the last 70 years, bond yields rarely rose ahead of inflation, going up only after inflation takes hold." According to the Fed, the UK economy will regain its pre-pandemic level by the final quarter of 2021, Italy will grow at 5% this year, China's economy will be steady, and "Real estate prices are flashing the kind of bubble warnings that haven't been seen since the run up to the 2008 financial crisis, according to Bloomberg Economics," TOI. In India, bond yields are hovering at around 6%, Investing.com because the RBI is playing the Fed's game of buying government bonds to suppress yields in its Government Securities Acquisition Programme (G-SAP), which is an alias for quantitative easing. Trouble is that the US government can print dollars but not the RBI. India's trade deficit was $6.28 billion as imports rose 73%, Business Standard. Import prices are unlikely to fall as shipping costs are likely to remain high in the medium term. If the RBI continues to fan inflation the rupee could fall precipitously which would cause even higher prices. Hope they don't blame the world when they are fanning flames. They are responsible.

Can India take on China without a strong economy?

"A recent article in The Financial Times suggested that the second wave has exposed India as the weakest link in the Quad grouping of the US, Japan. Australia, and India, whose collective goal is to counter Chinese influence in the Indo-Pacific," wrote Prof Rohan Mukherjee. "Specifically the article argued that India's emergency export ban on vaccines has alienated neighbouring countries and undermined the Quad's effort to compete with China's vaccine diplomacy," Times of India (TOI). "The Quad's recent resurgence -- after and abortive start in 2007 -- has been driven by uneasiness about the rise of China and the security threat it poses to the international order," wrote SN Kutty and R Basrur. "Commentators iften cast it as an 'alliance' in the making, perhaps and 'Asian NATO'. It is not. Rather, the Quad is designed as a loose-knit network of like-minded partners aiming at a broader purpose," The Diplomat. "China's relations with each of the Quad members have become more tense during the pandemic," Council on Foreign Relations. "Yet, few policymakers in the Quad countries see an advantage in trying to contain Chinese influence militarily." In May, the Chinese Ambassador to Bangladesh, Li Jiming, warned Dhaka against closer relations with the Quad as part of Beijing's new aggressive foreign policy, C Raja Mohan. Shortage of vaccines or the lack of healthcare will not matter so much to India's image in the long run, wrote Mukherjee. What will matter is India's "broader ability to generate and project military power, and this is what counts when it comes to India's foreign relations and the Quad in particular". However, military power depends on the economy and that is where China is winning over India. "Every time Sri Lanka's president, Mahinda Rajapaksa, turned to his Chinese allies for loans and assistance with an ambitious port project, the answer was yes," New York Times. "Under heavy pressure and after months of negotiations with the Chinese, the government handed over the port and 15,000 acres of land around it for 99 year in December." This was in 2017. Sri Lanka realised the dangers of handing over its territory to China when, "Earlier last month, a cargo ship carrying chemicals caught fire off the coast of Sri Lanka -- leaving in its wake an environmental disaster that the island will likely have to live with for decades," BBC. The danger of Chinese ownership of the port became evident when the Chinese owners of the vessel would not let Sri Lankan divers from attending to the ship, Economic Times (ET). It is not just China that India has to tackle as in the sudden barbaric attack on Indian soldiers at Galwan Valley in Ladakh, one year back, BBC. An article in the Russian news agency TASS claimed that, along with 20 Indian soldiers, at least 45 Chinese soldiers were also killed, The Print. Having secured the port in Sri Lanka which China can use as a naval base, China confirmed its commitment to "Iron Brother" Pakistan in talks between the two foreign ministers in August 2020, Dawn. Journalist Rahul Pandita has written a book "The Lover Boy of Bhawalpur" in which he narrates how Indian forces tracked down masterminds of the attack on the Indian Parliament in 2001 by 5 heavily armed terrorists, wikipedia, and the Pulwama attack in which 40 Indian troops were killed in a suicide attack in 2019, wikipedia. In the case of Umar Farooq the police recovered two phones "an iPhone and a Samsung S-9 plus" but they thought the phones were too damaged to be of any use However, they were persuaded to send the phones to the Indian Computer Emergency Response Team (CERT-In who were able to recover 50 GB of data from the phones, TOI. In the case of the Parliament mastermind Rana Tahir Nadeem, also known as Ghazi Baba, one soldier died and at least 2 were injured when the terrorist was cornered in a room with no escape, TOI. India is surviving on the sacrifice of our soldiers. Their lives depend on intelligence and weapons, which depend on the economy, which is down due to the pandemic, Business Today. Because no one took it seriously. They don't care.

Why doesn't the RBI trust Indian companies?

"The Reserve Bank of India (RBI) is assessing the option of investing in top-rated foreign corporate bonds to generate higher yields," Moneycontrol. "If the plan is approved, it would be a change from the central bank's existing strategy, where it typically invests in gold and sovereign debt, Mint has reported." This is because, "According to the RBI, forex reserves increased by $6.8 billion in the week ended June 4 to $605 billion," Times of India (TOI). "The current level of forex reserves are enough to cover nearly 16 months of imports." "Foreign exchange reserves can include banknotes, deposits, bonds, treasury bills and other government securities," Investopedia. Foreign currencies are held mainly in dollars but can also be held in the British pound, the euro or the Japanese yen "to ensure that a central government agency has backup funds if their national currency rapidly devalues or becomes altogether insolvent". "US foreign exchange reserves totaled $129 billion, as of January 2020, compared to china's $3.1 trillion." India now has the fourth highest reserves of foreign currencies after China, Japan and Switzerland and just above Russia, wikipedia. So, what is the problem? "We may be the only large Asian country with a current account deficit, i.e., we import much more than we export, and still have large foreign exchange reserves," TOI. Foreign exchange comes into India through foreign portfolio investment (FPI) into shares and bonds, through foreign direct investment (FDI), totalling nearly $500 billion in the last decade, and through external commercial borrowings. "The total outstanding foreign loans are $560 billion, or about 93% of our foreign exchange reserves." The problems are: 1. Foreign currencies earn virtually no returns. "After concluding its first policy meeting of  2021, the Fed decided to maintain the target range for the federal funds rate at 0-0.25%," Business Standard. Which means, buying US Treasuries yield no interest. At the same time, US consumer price index (CPI) rose to 5% in May, CNBC, which means the dollar buys less than before, so the RBI is suffering a capital loss. 2. "On a 12-month rolling basis, Indian equities have seen $34.3 billion in net inflows from FPIs, almost $20 billion more than the net inflows seen by Brazil, the only other major emerging market of similar size to see net inflows in the same period," Economic Times (ET). This is despite, "The MSCI India index, a gauge of 86 stocks, is currently priced at 22 times one-year forward earnings, close to the peak seen on the eve of Global Financial Crisis and the burst of the 'Dot Com' bubble in 2000." An asset price bubble. 3. If FPIs suddenly decide to sell Indian securities it can cause enormous volatility in our markets and in the value of the rupee. 4. The RBI balance sheet is measured in rupees so whenever the rupee weakens against foreign currencies it is seen as a profit for the RBI and is passed on to the government. Recently, "the RBI approved a transfer of Rs 99,122 crore (Rs 991.22 billion) as surplus to the central government for the accounting period for nine months ended March 31, 2021, India Today. "On August 26, 2019, the RBI transferred its highest ever surplus of Rs 1.76 lakh crore (Rs 1.76 trillion) to the government, acting on the recommendations of a committee chaired by Bimal Jalan, former RBI governor, on capital transfer." As RBI buys dollars from the market it releases an equivalent amount of rupees which is fueling inflation. CPI rose to 6.3% in May while the wholesale price inflation (WPI) came is at a record 12.94%, Business World. This is despite a government mandate of maintaining inflation at 4% (+/- 2%), Business Standard, which means the RBI should be striving to bring down inflation by increasing interest rate. Inflation is a tax on our spending. We could be forgiven for thinking that it is punishing Indians to help the government because higher prices result in higher tax collections and a fall in the value of the rupee depreciates government debt. The US government bought toxic assets through its Troubled Asset Relief Program (TARP) during the subprime crisis, wikipedia, on which it made a profit of $30.7 billion, American Banker. Why doesn't the RBI buy bonds of Indian companies? Is it because it fears the rupee and the economy could collapse? It will be partly responsible.         

"Summer of freedom" in the US could torch our economy.

"President Biden announced Friday that 300 million coronavirus shots have been administered in the United States in the last 150 days," yahoo!sports. "65% of American adults have received at least one shot, and 55% of adults are fully vaccinated." "We're heading into, God willing, the summer of joy, the summer of freedom," Biden said. So what? "The Federal Reserve on Wednesday began closing the door on its pandemic-driven monetary policy as officials projected an accelerated timetable for interest rate increases, opened talks on how to end crisis era bond buying, and said the 15-month old health emergency was no longer a core constraint on US commerce," Reuters. For now, the Fed will continue "its benchmark short-term interest rate near zero" and will continue to "buy $80 billion in Treasury securities and $40 billion in mortgage-backed securities each month to fuel recovery". However, 13 of its 18 policymakers see a "lift off" in borrowing costs in 2023 and "Seven of the officials see rates moving higher next year". "If the Fed changed its position in line with the progress in economic recovery and the inflation situation in the US, in India too there have been growing concerns on inflation," The Indian Express, (TIE). In the US, "The consumer price index (CPI), which represents a basket including food, energy, groceries, housing costs and sales across a spectrum of goods, rose 5% from a year earlier," CNBC. However, core inflation was just 3.5%. In India, wholesale price inflation (WPI) reached a record 12.94% in May, while CPI was at 6.30% in May, TIE, while core inflation, which strips out volatile food and fuel prices, grew by 10% in May "compared to 8.3 percent in April 2021", NDTV.  Bank of America predicts US economic growth at 7% in 2021 and 4.4% in 2022, Business Insider. "That exceeds the Federal Reserves median estimates of 6.2% and 3.4% growth n 2021 and 2022, respectively." Economists at Goldman Sachs raised their growth prediction for 2021 to 8%, Axios. India's GDP contracted by 7.3% in 2020-21, TIE. It contracted by 24.4% in the first quarter (April-June) and by 7.4% in the second, but rose by 0.5% in the third quarter and by 1.6% in the fourth (January-March 2021). Agriculture was the only sector that grew in 2020-21 while all other sectors contracted. "Almost two-thirds of India's 1.35 billion population live in small towns and villages in the countryside, and the rural economy accounts for about a third of the country's gross domestic product (GDP)," Economic Times (ET), but this year may not see any growth "with rural households saddled in debt, unable to make purchases to drive their farm output, or keep money circulating in their communities". "India's agriculture sector is showing signs of a sudden spike in stress,"wrote Prof Himanshu. "Some of this is already visible in the slowdown in sales of agricultural machinery and decline in fertilizer consumption," Mint. "The skyrocketing price of shipping goods across the globe may hit your pocketbook sooner than you think -- from that cup of coffee you get each morning to the toys you were thinking of buying your kids," ET. "Inflation is rising," wrote Jeff Sommer. "We aren't returning to the white-hot inflation rate of 1980, which reached 14.8%. But there is enough evidence to believe that a further upturn in inflation is coming. The question is how much inflation and for how long," ET. "Some central banks are already responding to taper talks. In April, Canada's central bank became the first among Group of Seven nations to withdraw its pandemic era stimulus and signalled rates could begin to rise in 2022," ET. "Two emerging-market icons are watching prices jump and steering very different courses: Brazil is cracking down, while India prefers to wait and hope the phenomenon flames out on its owns," NDTV. By that time the economy could be burnt, like the dead bodies all over India, BBC. The dead don't complain.        

Low borrowing costs lead to bonded labour.

"The total amount of money allocated towards food subsidy stood at Rs 5.25 trillion" in 2020-21, wrote Vivek Kaul. "The original allocation, made in February 2020 was...just Rs 1.16 trillion," Mint. This was a one time payment to wipe out debts of Food Corporation of India (FCI) which borrows money to buy agricultural produce at a Minimum Support Price, wikipedia, to protect farmers from fall in prices. The food grains bought by the FCI are then distributed through the Public Distribution System, or ration shops, at low prices to poor people. The government has to compensate the FCI for the difference in buying and selling prices and this it does by borrowing from the National Small Savings Fund (NSSF) comprised of schemes which pay a higher rate of interest, Financial Express, than fixed deposits in high street banks, ET Money. The government resorts to sleights of hand known as 'off-budget borrowings',The Indian Express (TIE), to keep borrowings from being counted in the fiscal deficit. "Off budget borrowings are loans that are taken not by the Centre directly, but by another public institution which borrows on direction of the central government." The NSSF schemes have to pay higher rates of interest to attract funds away from banks and investments "that are maturing in a given year are basically paid out of the fresh investments that come in during the course of that year". Sounds exactly like a Ponzi scheme. "A Ponzi scheme is an investment fund that pays existing investors from funds collected from new investors," Investor.gov. However, there is no risk of the NSSF collapsing, like the schemes run by Bernie Madoff, Investopedia, because the government can always print more money. By clearing off all debt to the NSSF the government does not need to borrow from it anymore and so can reduce the rate of interest it pays on these schemes. "The idea being that once interest rates on small savings schemes went down, banks would be able to cut interest rates on fixed deposits further, which, in turn, would allow them to cut interest rates on their loans." So, rich people would be able to borrow for cheap while poor people would face a savage cut in returns on their meagre savings. In India "public spending on healthcare is among the lowest in the world", so that, "Even before the pandemic struck, India's out-of-pocket expenses on healthcare were among the highest in the world accounting for 60% of total health expenditure," Economic Times (ET). "Loans taken to meet out-of-pocket expenses on health can be more damaging than other household debt because the illness 'limits one's ability to work, leading to depletion of household savings and unanticipated economic shocks', said Sushil Kumar Sinha, an economist with India Ratings and Research." Low interest on loans charged by banks helps only rich people because the poor cannot borrow from banks to pay for medical expenses and so have to borrow from moneylenders at exorbitant rates of interest, and abuse, The News Minute (TNM). Local moneylenders are usually thugs who will not hesitate to resort to extreme violence to force borrowers to repay their loans, The Week. Thousands end up as bonded labour, essentially slavery, where they have to work all day everyday without pay, TNM. Industrialist Gautam Adani and family are said to be worth $60.7 billion, Forbes, but in January BJP MP Subramaniam Swamy tweeted, "Trapeze Artist Adani now owes Rs 4.5 lakh crores (Rs 4.5 trillion) as NPA (non-performing assets) to banks." "Yet his wealth is doubling every two years since 2016. Why can't he repay the banks." Expressing concerns over widening inequality in India, former RBI Governor D Subbarao said liquidity in the domestic market and foreign fund flows are leading to soaring of prices of stocks and other assets, Business World. Money is finite. If the rich become richer, the poor will become poorer. Just a matter of percentages.  

Bleeding patients has been abandoned since the days of Robin Hood.

"The surprise spike in retail inflation is expected to make it harder for the central bank to prioritize growth, putting its interest rate setting committee in a wait and watch mode at its next meeting on 4-6 August," Mint. "Rising prices of edible oils and protein rich items pushed the retail inflation to a six-month high of 6.3 percent in May," Businessworld, while "Wholesale price inflation climbed to 12.94% in May" "on the back of rise in prices of crude petroleum, mineral oils viz. petrol, diesel, naphtha, furnace oil" and rose by 10.8% for manufactured items, Economic Times (ET). "The Reserve Bank of India (RBI) is unlikely to react yet to multi-month high retail prices as economic recovery remains its prime focus", ET, "however, the RBI is likely to stick with the US Fed's playbook on opting to pin this spurt on transient cost-push pressures and stay focused on the negative output gap," said Radhika Rao, economist at DBS Bank. India is definitely not the US. In May last year, the US Senate unanimously passed a bill worth $2 trillion (about Rs 146 trillion) to "Give one-time direct payments of up to $1,200 for individuals and $2,400 for couples, with $500 added for every child", CNBC. In December, the US Congress passed another stimulus bill worth $900 billion to provide cash in the hands of the people, U.S.News. In March 2021, "President Joe Biden signed the $1.9 trillion coronavirus relief package" to provide "direct payments of up to $1,400 to most Americans", CNBC. That is a total economic stimulus of $4.8 trillion (around Rs 350 trillion) in one year, for a population of about 333 million (33.3 crore) while India's total gross domestic product (GDP) was $2.9 trillion in 2019, World Bank, for a population of 1.4 billion people, Worldometer, before the coronavirus collapse. While the US government, both Republican and Democrats, are putting money directly into people's pockets, our government and RBI are doing their utmost to bleed as much out of us as possible. The RBI has been using every trick in the book to lower interest rate while blithely tolerating high inflation, thus transferring money from savers to the government, ET. In the midst of worldwide disruption in trade the RBI magically earned Rs 991,22 in nine months to 31 March 2021, which it transferred to the government as dividend, moneycontrol. Not content with keeping interest rate at low level the RBI is resorting to buying government bonds worth Rs 1.2 trillion from the secondary market, which is same as quantitative easing, to increase liquidity and drive down interest rate, ET. In reality, inflation has been suppressed by a strong rupee, reducing the cost of imports, due to an influx of dollars into our share market. "In the year-to-date period, foreign portfolio investors have bought local stocks worth a net of over $2.1 billion, which is ten times the inflow seen by South Korea in the same period and seven times that seen by Indonesia, according to data compiled by brokerage firm CLSA Asia-Pacific Markets," ET. The RBI has been buying dollars from the market so that our foreign exchange reserves reached $605 billion on 4 June, Times of India (TOI). "Every $1 billion that the RBI purchases results in around Rs 7,300 crore (Rs 73 billion) of rupee funds being released." Though prices are going up the answer is not to increase interest rate but to increase supplies, wrote Soumya Kanti Ghosh, TOI. But, how? "Global food import costs are expected to rise 12% in 2021 to a record due to surging commodity prices and robust demand during the Covid-19 crisis, the United Nations agency said," ET. Though India grows most of its food it spends $8.5-$10 billion a year on importing vegetable oils, ET, and "We may be underestimating just how much the shipping crisis will raise prices of consumer goods, a leading economist says," Business Insider. On top of that the government has increased taxes on petrol by over 307% and on diesel by 377%, which is increasing transport costs in the country. Robin Hood was bled to death by his aunt, Historic UK. Bleeding therapy has been abandoned since medieval times. So why are the government and RBI still doing it. To kill us?

Are we enduring an Emergency by stealth?

"Almost exactly 46 years ago, on 12 June 1975, Justice Jagmohanlal Sinha of Allahabad High Court" "found then prime minister Indira Gandhi guilty of misuse of government machinery during her election campaign in 1971. Sinha cancelled her election and barred her from contesting any election for six years," wrote Sandipan Deb. On 25 June, "minutes before the clock struck midnight, a compliant president Fakhruddin Ali Ahmed signed the proclamation of Emergency", Mint, which lasted 21 months until 21st March 1977, Economic Times (ET). "And all this because rule of law had completely been eliminated by the Supreme Court ruling in the ADM Jabalpur case (April 1976), which overruled the view of nine high courts that the legality of detaining order passed by the governments could still be examined", wrote Justice Rajinder Sachar, "But to our shame the Supreme Court by a majority of four judges against one honourable exception (Khanna J) laid down a proposition of law which forever will remain a hallmark of shame". Though Article 352 was amended in 1978 by the Morarji Desai government to allow the President to proclaim Emergency only if "security of India or of any part of the territory thereof is threatened, whether by war or external aggression or armed rebellion", The Week, can it be introduced by stealth? On 5 June, the Supreme Court quashed sedition charges against veteran journalist Vinod Dua "for making statements against the Narendra Modi government's handling of the Covid-19 pandemic", The Print. Tanushree Pandey was witness to how the UP Police forcibly burnt the body of a 19-year old victim of  gang-rape in the middle of the night after locking the family inside their house on threat of violence. "As I left taking with me wails of a mother who wanted to see her daughter one last time, a father who couldn't save his child and a brother who may never believe the system again," wrote Pandey. Instead, to muddy waters, UP Police filed a nearly 5,000 page chargesheet against journalist Siddique Kappan and seven others, "charging them with sedition and conspiring to incite caste violence, among others, following the Hathras gang-rape and murder", The Indian Express (TIE). In the World Press Freedom Index 2021 India was ranked at 142 out of 180 countries, below Nepal at 106 and Sri Lanka at 127 but higher than China, Pakistan and Bangladesh. "India's status as a free country has changed to 'partly free', according to an annual report on global political rights and liberties," BBC. New laws have been passed. "Under UAPA (Unlawful Activities Prevention Act) and NSA (National Security Act), bail can be denied almost indefinitely. In many cases, the state is not even under any obligation to present a credible case to the court nor present charges in a time bound manner," wrote Pankaj Butalia. "All governments since 1950 have liberally used illiberal laws to stifle dissent," wrote Manoj Joshi. "The real punishment is not the arrest; it is the case which drags on; first there is a chargesheet, then a supplementary one, then adjournments and so on," Times of India (TOI). Why doesn't the Supreme Court mandate time bound judgement? Three features -- "judicial evasion, judicial deference, and judicial inconsistency -- have become staples of the system over the last few years. The effect of each one has been to benefit the State," wrote Gautam Bhatia. Chief Justice Gogoi's "tenure remained mired in controversies ranging from allegations of sexual harassment against him" and "CJ Bobde's tenure was marked by a reluctance to hear cases affecting people's life, liberty," wrote Justice Rekha Sharma. At least, "Mrs Gandhi was a strong personality relentlessly pursuing India's national interest with single-mindedness and finesse," wrote Henry Kissinger who hated her. What will be the judgement when future generations see the palace built at a time when hundreds of thousands were dying of coronavirus? They will not be restricted by sedition.