Our billionaires are richer than those of China. So there.

"Gautam Adani & family earned Rs 1,002 crore (Rs 10.02 billion) a day in the last one year to quadruple their wealth to Rs 5,05,900 crore (Rs 5.059 trillion) from Rs 1,40,200 crore (Rs 1.402 trillion) a year-ago. That made them the second wealthiest family in India and helped Adani, 59, topple China's bottled water producer Zhong Shanshan as Asia's second richest, the IIFL Wealth Hurun India Rich List, 2021 showed," Economic Times (ET). His brother "Vinod Adani family's fortunes stood at Rs 1,31,600 crore (Rs 1.316 trillion), up 21.2 percent." "In comparison, India's richest family of Mukesh Ambani Rs 169 crore (Rs 1.69 billion) a day during the year, and their fortunes rose 9 percent to Rs 7,18,000 crore (Rs 7.18 trillion)." These two families are from Gujarat which benefited from "Funds directly transferred by the Union government to various implementing agencies in Gujarat saw a 350% rise since 2015, Indian Express has reported, citing a report filed by the Comptroller and Auditor General of India," The Wire. "This direct transfer to Gujarat's implementing agencies continued till 2019-20, seeing a 350% rise from Rs 2,542 crore (Rs 25.42 billion) in 2015-16 to Rs 11,659 crore (Rs 116.59 billion) in 2019-20. The CAG report says funds of Rs 837 crore (Rs 8.37 billion) were given by the Union government to private sector companies in 2019-20." The Union government started raising excise duty on fuel in 2015. "As on July 1, 2021, central excise duty on petrol is Rs 32.90 per litre inclusive of cess, whereas on July 1, 2015 it was Rs 17.46 per litre inclusive of cess," News 18. The excise duty on petrol has increased by 88% from 2015 to 2021. "Excise duty on diesel has gone up by a humongous 209 percent during the same period, as it is Rs 31.80 per litre including cess as on July 1, 2021, while it was Rs 10.26 per litre including cess, as on July 1, 2015." "Petrol and diesel rates were hiked again on Friday (today), taking fuel prices across the country to a new record high," Free Press. "The government on Thursday hiked by 62 percent the price of natural gas that is used to produce eletricity, make fertilisers and turned into CNG to use as fuel in automobiles and cooking gas for household kitchens," ET. "The increase in gas price is likely to result in a 10-11 percent rise in CNG and piped cooking gas rates in cities such as Delhi and Mumbai, industry sources said." "Indian stock investors have reaped huge rewards from the massive rally in stocks seen from the lows of March 2020, but some of the business families have eclipsed them all, by growing their wealth three-four fold in a year, " ET. "Zerodha's Nithin Kamath and his family have seen their fortunes rise 51 percent to Rs 25,600 crore (Rs 256 billion) in the last one year, a period that saw a record number of retail investors opening trading accounts to plunge into equity investments," ET. Other stockbrokers have also become rupee billionaires. Meanwhile, "In the context of an increase in average heights worldwide, there was, alarmingly, a decline in the average height of adult men and women in India in the decade from 2005-06 to 2015-16 after a significant increase from 1998-99. Women in the poorest sections showed the steepest decline as did tribal women," Fastme. "It is very likely that it reflects not only food insecurity but an overall problem with socio-economic development, or rather a failure to correct historical marginalisation compounded by an actual deterioration in development status brought about by economic factors as well as perhaps newer social marginalisations," said Dr Vandana Prasad of Public Health Resource Network. "According to a World Bank 2019 report, India has the second highest number of stunted children in South Asia (at 38%), after Afghanistan (41%). Wasting is highest in India at 21% followed by Sri Lanka at 15% and Bangladesh at 14%, the report said," The Wire. This was before the pandemic. Since the pandemic started we have beaten China in the number of richest billionaires. Yah boo.           

All about moments - Lehman, Evergrande or Minsky.

"On Friday, The Wall Street Journal reported, citing 'people familiar with the matter', that Evergrande had failed to make its coupon payment on a US-dollar bond," wrote Prof V Anantha Nageswaran. "There is a mixture of hope and opinion that Evergrande would not turn out to be China's 'Lehman moment' for the simple reason that China can simply order its banks to start lending to the real-estate company and all would be well." The sudden bankruptcy of Lehman Brothers on September 15, 2008 in the US led to the subprime crisis and nearly led to a global financial meltdown, wikipedia. "Evergrande is one of China's largest real estate developers," CNN. "Evergrande made its name in residential property -- it boasts that it 'owns more than 1300 projects in more than 280 cities' across China -- but its interests extend far beyond that. Outside housing, the group has invested in electric vehicles, sports and theme parks." "The group has gained infamy for becoming China's most indebted developer, with more than $300 billion worth of liabilities." "China's suppliers wait a long time to get paid by their customers," which is why, "companies increasingly have turned to supply chain financing; instead of waiting to get paid , firms go to a third party that hands over cash sooner", wrote Anjani Trivedi. "But the moment repayment becomes an issue, credit tightens. Cracks quickly appear up and down the supply chain." "Evergrande leaned on vendors and other parts of the supply chain: apartment buyers and customers. It even roped in its employees, who were told to invest in the company's wealth products." "Lehman was a top tier investment bank that went from good to bad during the 2007 subprime mortgage crisis. On the other hand, Evergrande, a well-known presence in Hong Kong's capital markets for years, has always been bad," wrote Shuli Ren. "For almost a decade, calling Evergrande out, questioning the asset quality of its unsold properties and asking if its auditors were asleep." How, and why, did it get away with its shady business? Because, Evergrande founder Hui Ka Yan " was 'woke' in Communist Party terms". "A party member for more than 35 years, the 62-year-old Hui was already speaking of 'common prosperity' in 2018. In 2020, with $465 million in donations, Hui ranked as China's most charitable person for the fourth year in a row." Since 2008, "China has led the debt binge. Private debt held by households and corporations has risen by nearly 100 percentage points to 280%," wrote Ruchir Sharma. "Like its more advanced rivals from the US to Japan, China has created a financial system that is in constant need of government support and stimulus. Policymakers keep economic growth going at any cost, and repeatedly back down from tightening policy at the slightest hint of economic or financial trouble." China President Xi Jinping is in a tight spot. If he "were to depart from the past, by purging debts and letting defaults spike, it could trigger a nervous breakdown in the world's financial system." Could China's loss be India's gain as investors look for safer markets? "Indian technology startups, which are mopping up record inflows of venture capital this year, will gain further as global capital moves away from Chinese tech companies that are weathering a regulatory onslaught, according to multiple founders and investors," Economic Times (ET). "So far this year, the country has already seen 25 new unicorns -- startups valued over $1 billion -- and nearly $20.76 billion has been raised across 583 deals as of August 20, according to data provided by industry tracker Venture Intelligence." So, is India going to take China's place in world trade? Ain't going to happen, said Swaminathan Aiyar. "India has a problem of its political constraints. It is not a low wage country. It is not a country with cheap land." "We are not going to become an export-oriented power house the way China is or the way Vietnam is right now." We won't gain, but if China has a Lehman moment leading to a global "nervous breakdown" will that cause a Minsky Moment in India? So many moments.           

Well behaved? No, well cowed.

"President Biden took a swipe at the American press while sitting down in the Oval Office with Indian Prime Minister Narendra Modi," Fox News. "I think what we're going to do is to bring in the press," Biden began on Friday as they sat down. "The Indian press is much better behaved than the American press." "I think, with your permission, you could not answer questions because they won't ask questions on point." "Biden's snarky comment on Friday was the latest spat with the White House Press Corps and reporters," Mail Online. "Just a couple of days ago, Biden was criticised for not taking questions during Tuesday's meeting with British Prime Minister Boris Johnson; something Johnson did." Shows that politicians do not like to be questioned on their power. Unfortunately for Biden, he is restricted by the US Bill of Rights while Modi has no restrictions whatsoever. "On September 25, 1789, the First Congress of the United States proposed 12 amendments to the Constitution," National Archives. "Ten of the proposed 12 amendments were ratified by three-fourths of the state legislatures on December 17, 1791. The ratified article (Article 3-12) constitute the first 10 amendments of the Constitution, or the US Bill of Rights."  The very first Amendment states that "Congress shall make no law....abridging the freedom of speech, or of the press; or the right of the people peaceably to assemble, and to petition the government for a redress of grievances." "India ranks 142nd in the world in press freedom, according to Reporters Without Borders. Russia is 150th (US is 44)," said Chick Ross, an investigative reporter at the Washington Free Beacon. White House press Secretary Jen Psaki defended Biden, Times of India (TOI). "I don't think it was meant to be a hard cut at the members of the media  -- people he has taken questions from today and on Friday as well," she said. The media in India, on the other hand, has been labeled 'Godi media' which means 'media sitting on lap' or 'lapdog media', wikpedia. Here, "At least 17 people have been arrested by the Delhi Police over posters criticising Prime Minister Narendra Modi's handling of the coronavirus pandemic," NDTV. The posters asked in Hindi "Modiji (respectful) why have you sent vaccines meant for our children to other countries?" No criticism, no abuse, not a single derogatory word. "Tax authorities in India raided several offices of one of the world's biggest selling newspapers," CNN. Dainik Bhaskar was raided because, "The paper shocked India with its reporting of dead bodies in the river Ganges during the brutal second wave of the Covid-19 pandemic this spring. It criticized authorities for under-reporting Covid-19 deaths and challenged state officials and the government of Prime Minister Narendra Modi over their handling of the crisis." In February, "Police in Uttar Pradesh's Varanasi had booked Google CEO Sundar Pichai and 17 others ....over a video that allegedly defamed Prime Minister Narendra Modi but later removed the tech giant officials' names from the FIR, police officials said," TOI. Also in February,"Indian police have arrested a 22-year-old activist linked to Swedish climate change campaigner Greta Thunberg and charged her with sedition, saying she created and shared an online document to support the ongoing monthslong farmer's protests," Reuters. The US guarantees right of protest, in India a young woman is brutally treated just for supporting a protest online. In March, Pratap Bhanu Mehta resigned from his professor's post at Ashoka University because, "My public writing in support of a politics that tries to honour constitutional values of freedom and equal respect for all citizens is perceived to carry risks for the university." Prof Arvind Subramanian also resigned in support. The world does not see India as a democracy anymore, BBC, which is what Biden was referring to. Recently, the Income Tax Department conducted "surveys" on offices of NewsClick and Newslaundry and seized documents and phones of employees, The Wire. Cow protection is a fundamental right of Hindus, said Allahabad High Court, TOI. Right. But who will protect Hindus?      

High tax receipts mean enough money. So, why borrow?

Two papers were published by Reserve Bank of India (RBI) staffers in September. The first paper shows that bank credit offtake posted a compound annual growth rate (CAGR) of 16.8% from 2007-08 to 2013-14, but fell to 8.3% between 2014-15 and 2020-21, while industrial credit growth plummeted from a CAGR of 19.6% to 1.6%, wrote Rajrishi Singhal. Industries could have received funding from foreign direct investment (FDI) or by borrowing overseas. "India has attracted highest ever total FDI inflow of US$81.72 billion during the financial year (FY) 2020-21and it is 10% higher as compared to the last financial year 2019-20 (US$74.39 billion). FDI equity inflow grew by 19% in the FY 2020-21 (US$59.64 billion) compared to the previous year FY 2019-20 (US$49.98 billion)," Ministry of Commerce and Industry. Normally, investment into equity and bonds is called foreign portfolio investment (FPI) while FDI stands for investment into productive assets, Investopedia. By this definition, actual FDI in 2020-21 was just over $22 billion. World Bank data show the gross capital formation in India slipped from 41.9% of gross domestic product (GDP) in 2007 to 28.4% in 2020, tradingeconomics. Gross capital formation refers to spending on electricity and capital goods, such as equipment, tools and transportation assets, Investopedia. The second paper by RI staffers says that there is a "sharp fall in new private-sector projects being taken up each year and a sharper fall in the number of projects getting completed each year". So, will the private sector buy into the National Monetisation Pipeline (NMP), which plans to raise Rs 6 trillion over the next 5 years by allowing private companies to manage public sector assets on payment of a large sum of money up front, NITI Aayog? The government intends to invest in infrastructure. "Buoyant tax receipts (34.2% of 2021-22 budget estimates) have raised hopes, but tepid capital expenditure figures (23.2%) dampened spirits." Buoyant tax receipts in a stagnant economy may be the culprit. "Given that government tax revenues are doing far better than expected of budgeted in the first quarter of the current fiscal year 2020-21, some people may put two and two together and argue that private-sector distress (high fuel taxes) is the cause of relatively robust public sector finances," wrote Prof V Anantha Nageswaran. It is. Consumers expect high inflation and "India's private final consumption expenditure (PFCE) declined by six percent in nominal terms to Rs 115.7 trillion in 2020-21 from Rs 123.1 trillion in 2019-20.  Consumption expenditure growth has been slowing through the last decade," wrote Manasi Swamy. "Household incomes data available from CMIE's (Centre for Monitoring Indian Economy) Consumer Pyramids Household Survey (CPHS) indicate that compared to a year ago, nominal household incomes shrank by 29.4 percent in the first quarter of 2019-20, by 11.6 percent in the second quarter and by 8.2 percent in the third quarter. The cumulative income in nominal aggregate household income was 16.3 percent." Nevertheless, Nageswaran wants industry in invest in new projects which will create "a virtuous cycle of supply and demand". At least it will help the government to win elections. Will NMP be a roaring success? "The government's failure to sell any of the 109 railway passenger routes in auctioned in August is a shameful fiasco," wrote Swaminathan SA Aiyar. Leasing out assets for the private sector to run means the government retains control which would be a temptation for politicians and civil servants to interfere. "The idea of monetising assets through operational leases is much more difficult to execute than privatization, where the government exits a state-run business by selling out to a private party and is no longer involved," wrote Vivek Kaul. Government wants to sell to private sector, private sector wants to sell to people but people have no money. Now what?    

The last bastion to fall.

"I don't want to exaggerate, but there are a few disturbing developments in the India Army that are matters of concern," wrote Karan Thapar. The first was "an aarti being played at a ceremonial parade at the Artillery Regimental Centre, while soldiers clapped along behind a box with OM painted on it". Till today, all religions have been treated equally in the Indian Armed Forces. The second was a tweet from the Srinagar-based Chinar Corps which extended "heartiest birthday greetings" to the prime minister and also said, "True leadership is not about a Title or Designation. It is all about Impact, Influence and Inspiration." The armed forces have been apolitical so far. "It is customary for a nation to have an army but extremely rare for a political party to have one. China's People's Liberation Army (PLA) is an exception, as it owes its allegiance to the Communist Party of China," wrote Maj Gen (Retd) Prof GG Dwivedi. On 30 December 2014, President Xi Jinping said, "PLA remains the Party's army, and must maintain absolute loyalty to political masters." Will the Indian Armed Forces become the Bharatiya Janata Party's (BJP's) army? The third was, "On December 4, the CDS (Chief of Defence Staff of the Indian Armed Forces, wikipedia), General Bipin Rawat, chose to visit a college run by the Goraknath Math, in company of Yogi Adityanath, rather than attend Navy Day in Delhi, where he ought to have been. This is what General Panag wrote: 'General Rawat's...presence at an institution run by a religious/political organisation and paying obeisance at a religious place in (the) company of the Mahant, who is also a controversial political leader, does not augur well for the military and the nation." The government intends to change the present system of promotion of senior officers of the armed forces from seniority to one of merit. Who will decide merit? Politicians in power. "But this must be weighed against two drawbacks: (a) the selectee would consider himself beholden to the politico-bureaucratic establishment, undermining his own credibility within the service; and (b) high-level military decisions may be skewed to please politicians," wrote Retd Chief of the Indian Navy Arun Prakash. Not just the army. The Rashtriya Swayamsevak Sangh (RSS) mouthpiece Panchjanya recently accused "Indian IT giant Infosys of destabilising the Indian economy to help 'Naxals, Leftists and tukde tukde gang'," because of problems in its software for the new e-filing income tax portal, The Wire. Former director of Infosys, Mohandas Pai said that "those at Infosys and other IT firms are technologists and not deep domain experts on matters related to tax". Economic Times (ET). However, "the IT major could have roped in CAs from ICAI to test the portal's efficacy from the end user point of view". To add to the paranoia of the Hindutva fanatics, a group of people based in the US organised a conference titled "Dismantling Global Hindutva". To 'Dismantle' means to 'take apart', which could be taken to mean minute examination, or to mean destruction. "The conference is held during a time when a Hindu supremacist regime is in power in India, and so this conference will also throw light on what Hindutva does when it has captured power by closely scrutinising both its official policies, and its unofficial policies like creating impunity for Hindutva violence and setting up a massive propaganda machinery," the anonymous organisers were quoted as saying. "Some of the prospective speakers have been trolled and even subjected to rape and death threats," The Wire. Prof Apoorvanand and Gauhar Raza wrote that "bullying by the Akhil Bharatiya Vidyarthi Parishad (ABVP) and the local police must not be treated lightly". ABVP is the student wing of the BJP. "From Kerala to Haryana, there are numerous stories of disrupted and aborted seminars, film screenings and classrooms and censoring of syllabi, either directly by the ABVP or at their behest by authorities." We already have Islamic State. Will we have a Hindutva State as well?         

What happens next time?

"A Chinese technology executive held in Canada on US fraud charges has left the country after a deal with prosecutors, following years of diplomatic tensions over her fate. Meng Wanzhou, chief financial officer of Huawei, was detained on fraud charges in December 2018 at the request of the US," BBC. As part of the deal, "Two Canadians detained by China for nearly three years have been released, Canadian Prime Minister Justin Trudeau announced Friday night," CNN. "Michael Kovrig and Michael Spavor were picked up in December 2018 shortly after Vancouver police arrested Huawei Technologies Co Ltd (HWT.UL) Chief Financial Officer Meng Wanzhou on a US warrant," Reuters. "Meng was confined to her expensive Vancouver home at night and monitored 24/7 by private security that she paid for as part of her bail agreement. Referred to by Chinese state media as 'Princess of Huawei', she was required to wear an electronic ankle bracelet to monitor her movements, which became fodder for the tabloids when it hung above her designer shoes," Reuters. While Meng was living in luxury in Canada and was represented by a battery of lawyers, life was brutal for Kovrig and Spavor. "Following their detention in December 2018, the men were transferred to detention facilities where they were interrogated for up to eight hours a day. The lights in their cells are reportedly left on 24 hours a day, and they have been denied access to consular officials and their lawyers," wikipedia. "The swiftness of the apparent deal also stands as a warning to leaders in other countries that the Chinese government can be boldly transactional with foreign nationals, said Donald C Clark, a law professor specialising in China at George Washington University Law School," New York Times. "They're not even making a pretense of a pretense that this was anything but a straight hostage situation," he said of the two Canadians, who stood trial on spying charges.  "In her 'Ingraham Angle' monologue...., host Laura Ingraham explained how the financial entanglements between Biden and Heinz-Kerry families and China help explain why the United States continues to defer to their biggest global rival on many fronts; economic, humanitarian and coronavirus-related," Fox News. Not just China, Biden has messed up everywhere. "When French officials erupted in anger last week after being left out of a US-led security pact with Australia and the UK, much of Washington was caught off guard -- including President Joe Biden, according to people familiar with his reaction," reported ardent supporter of Biden, CNN. "The debacle is the latest in a series of foreign policy crises that have erupted over the past several weeks for Biden, ones that both foreign diplomats and US officials have said were completely avoidable." "US and foreign officials say that they have been bewildered and appalled by the Biden administration's two recent, major diplomatic failures -- first in the execution of its withdrawal from Afghanistan and then by enraging its oldest ally, France, by keeping the country in the dark about the submarine deal, known as AUKUS." "Multiple lawmakers angrily stormed out a classified briefing with members of the Biden administration on Afghanistan", as "The Republican and Democratic lawmakers grew frustrated after the State Department, Pentagon, Department of Homeland Security, and office of the Director of National Security officials failed to answer their basic questions during the briefing for members of the House Foreign Affairs Committee, the sources told CNN." Naturally, "A group of House Republicans has filed articles of impeachment against Joe Biden," Fox News. Taiwan is to spend $8.69 billion in the next five years on upgrading its defence against a "severe threat" from China, Economic Times. With a weak, confused president in the White House China may decide this is the ideal time to invade Taiwan. What happens then? Capitulate or retaliate?   

What festival season? What celebrations?

"Indians are slowly making their way back to the office and witnessing a consumption revival in the country with spending intent shifting towards more discretionary items, according to a report by global consultancy and advisory firm Deloitte," Economic Times (ET). "Consumers are seen actively spending 12 percent on alcohol, 36 percent cable TV, 36 percent clothing/footwear, 33 percent electronics, 25 percent furnishings and 22 percent on restaurants," the report which is based on a survey said. "The festive season broadly refers to the months from September to January where festivals are celebrated in different parts of the country and this often becomes an occasion to make high-cost purchases. For certain categories like consumer electronics, up to 40% of annual sales can come from these few months and retailers load up on discounts and financing offers to lure in customers," Tamanna Inamdar. This year there will be fewer discounts as prices of smartphones and laptops have increased by 10-20%. Maruti Suzuki has increased prices of its cars three times this year already. "Consumers across India are not likely to return to pre-pandemic purchasing habits and routines anytime soon, as 2021has solidified the new way of doing things in professional environments and home lifestyles, says a new report," by "Euromonitor International," ET. "Resumption of business activity had registered a decline in September, said Nomura as its India Business Resumption Index dropped to 100.6 in the week ended September 19 from 101.4 in the week before," ET. To spend money people have to earn it first. Millions of delivery jobs are being created by e-commerce company Flipkart and food delivery company Zomato, but "These so-called jobs do not provide health insurance, nor pay for overtime, let alone allow you to take sick leave," wrote Ajit Ranade. "Since India has a large population below or near the poverty line, their vulnerability to an income shock (such as caused by illness in the family) is very high." "The fact is that most people want a stable job with a salary at the end of the month." 40% of farmers would give up farming if stable jobs were available. "More than 90% farmers during July 2018-June 2019 reported being engaged in crop cultivation, and for a majority of them, real incomes from it declined 1.3% per annum. This decline was experienced not by any particular class, but by all farmers from those with small marginal to medium and large farms," wrote Prof Himanshu. "Events after 2018-19 suggest that the situation would certainly have worsened on account of a rise in input costs driven by energy and fertilizer prices." Perhaps, exports will be the engine for economic growth. "August was the fifth straight month when India's goods exports exceeded $30 billion," wrote Arjun Srinivas. "In four of these five months in 2021, the change over the corresponding month of 2019 (the year preceding the pandemic) has exceeded 25%." Problem is that "Primary commodities -- essentially, goods available from cultivating raw materials without a manufacturing process -- are behind the current boost." Petroleum products have gained from a rise in oil prices, and, "Some of the other commodities that have registered the biggest increases over 2019 -- both in value and volume terms -- are ores, metals, cotton and sugar." In India, "Between inflation and unemployment, the two economic indicators conjoined theoretically by the Phillips curve, it is inflation that wields political power," wrote Mahesh Vyas. "In a country of over a billion adults, there are less than 80 million salaried jobs." Of the remaining 920 million,"More than half opt to not seek any work. The remaining are self-employed as farmers, daily wage labourers and entrepreneurs of all kinds." "In 2016-17, only 42.8 percent of the working age population was employed. This fell to 41.7 percent in 2017-18 and further to 40.2 percent in 2018-19, and then to 39.5 percent in 2019-20." Then came the virus. How will people celebrate festivals if they are not earning? Buy with what?   

How will the controlled RBI deal with the uncontrolled US Fed?

"India's retail price for petrol is currently among the highest in the world in terms of US dollars per litre," wrote Shayan Ghosh & Kalpana Pathak. Price of petrol in the capital Delhi is Rs 101.19 on 24 September, Economic Times (ET), which converts to about $1.50 per litre. The average price of petrol in the US was about $3.50 per US gallon, eia. Since one US gallon amounts to 3.78541 litres, the average cost of petrol per litre in the US is below $1. Care Ratings "believes that a comparison with the price of a staple item such as milk is more appropriate. This comparison shows that in India, the ratio of petrol price to milk ($ per litre for both) is the highest in the world -- 1.91." "The sharp rise in the prices of fuels used for transportation feed onto core inflation through transportation services prices," said Shashanka Bhide, member of the Monetary Policy Committee (MPC) of the Reserve Bank of India (RBI). In March, "The government.... asked the Reserve Bank to maintain retail inflation at 4 percent with a margin of 2 percent on either side for another five year period ending March 2026," ET. Despite the mandate, in its August meeting the RBI "kept the repo rate unchanged for the seventh time at 4 percent, citing the need to support the ongoing growth recovery amid continued uncertainty and global financial market volatility," Hindustan Times (HT). Retail inflation came down to 5.3% in August from 5.9% in July, Business Standard (BS). The Consumer Price Index (CPI) grew by 5.4% in the US in June 2021, compared to 6.26% in India, HT. To account for disruptions due to the pandemic in 2020, a comparison between June 2019 and June 2021 shows that CPI inflation increased by 6.07% in the US compared to 12.88% in India. Services contribute 58.58% of the CPI basket in the US while food and beverages, basic necessities, constitute 45.86% of the Indian basket, showing the difference in wealth between the two nations. Much of the inflation in the US is due to base effect because the CPI grew by just 0.65% in June 2020, compared to 3.18% in June 2019. "Federal Reserve Chair Jerome Powell said the US central bank could begin scaling back asset purchases in November and complete the process by mid-2022, after officials revealed a growing inclination to raise interest rates next year," ET. However, "The Federal Open Market Committee (FOMC) decided to maintain the target range for its benchmark policy rate at zero to 0.25%, and continue purchases of Treasuries and mortgage-backed securities at a pace of $120 billion per month. The vote was unanimous." Rising prices mean a decreasing buying power for the rupee against the dollar and at some point the exchange rate must adjust. The rupee is trading at 73.68 to one dollar, xe. If the rupee falls against the dollar, the price of fuel is likely to jump sharply, and retail inflation will rise in tandem, unless the government cuts taxes to compensate for the rise. The strength of the rupee is due to a flood of dollars into Indian markets raising stock market indices to record territory, Times of India (TOI). "After reaching a record high in the previous week, the country's foreign exchange reserves declined by USD 1.34 billion to USD 641.113 billion in the week ended September 10, 2021, according to RBI data, BS. This brings us to Robert Mundell who was awarded the Nobel Prize for showing that "policymakers can choose any two, but not all three, macroeconomic objectives -- foreign capital mobility, fixed exchange rates and inflation management", wrote Amol Agrawal. "RBI managed this trinity by increasing liquidity via multiple programmes, keeping bond yields low. This was at the cost of almost ignoring the inflation target." Why is the RBI ignoring a direct mandate from the government to control inflation? Because, Article 58 gives the government powers to direct the RBI to do so and it has the power to appoint its own stooges to the board of the RBI, wrote Pramit Bhattacharya et al. All very cozy. The only problem is what the US Fed will do. And the Fed is not controlled.            

Those who are wanted can't be found, those that are found are not wanted.

"In 2018-19, only 65 out of 100 young adults (aged 20-29 years) with a college degree who were looking for work found jobs. In contrast, among young adults with less than a degree-level education, 90 out of 100 who were keen to work found it, according to our estimates based on the Periodic Labour Survey data," wrote Prof Vidya Mahambare & Soumya Dhanraj. They found that people with higher degrees earned more than those with lower levels of education. However, the higher level of unemployment among educated youth maybe because of poor quality of education. "The skills report 2019 suggests that only 47% of youth in India with a college education are employable." Other benefits include, "Education tends to improve decision-making on crucial life options." "In India, while the effects of the pandemic on the educational sector have been severe, especially for municipal and under-resourced schools, we must acknowledge that our system was failing the majority of children even before covid," wrote Anu Aga, Vijay Kelkar & Raghunath Mashelkar. "Over 50 million of our primary school children were not attaining foundational literacy and numeracy (MHRD). More than 46% if students in grade 8 could not read and understand short text; 62% could not use basic math to solve daily life problems (NEP, 2020) and only 26% of students who started school actually made it to college." " A study by Azim Premji University on online education in government schools in five states has shown that the mode of learning has been ineffective," Economic Times (ET). "Besides, more than 60% children were unable to access online education tools because of a lack of or inadequate number of smartphones and difficulty in using apps." Some teachers have found ways to overcome Covid lockdowns. "In a small tribal village on the eastern tip of India, an enterprising teacher has turned walls into blackboards and roads into classrooms, trying to close the gap in learning brought on by prolonged school shutdowns in the country," Indian Express (TIE). "Deep Narayan Nayak, 34, a teacher in the tribal village of Joba Attpara in Paschim Bardhaman district of the eastern state of West Bengal, has painted blackboards on the walls of houses and taught children on the streets for the past year." "Except for the Primary level of education, all other levels are far from attaining a 100% enrolment ratio." The data show that "28% of students dropped out while moving from secondary (Grades 9 and 10) to higher secondary level and 8% between elementary and secondary level." The latest Annual Status of Education Report (ASER) showed, "After a year-and-a-half of Covid-enforced school closures come findings that confirm the worst fears: reading and numeracy skills among children have taken a big hit, especially among students in primary classes," (TIE). "Another serious issue for the parents and children was the discontinuation of of the midday meal in government schools. This meal served as an incentive for children from under privileged backgrounds to attend school, and also ensured that they ate a nutritious meal," The Wire. "From Wall Street, the view of technology-assisted learning in India looks very different. As China cracks down on private education, India is witnessing a surge of interest, with an estimated $4 billion flowing into the industry over the last 18 months. Byju's, a startup valued at $16.5 billion, is in early discussions about an initial public offer," Business Standard. According to a report by RedSeer, 1.8 million Indian students will be studying abroad by 2024 at a cost of $75-85 billion," ET. Studying abroad is a route to employment and permanent residence in the host country. In the US, 800,000 people, of whom 60% were Indians, were waiting for a green card which allows permanent residence, ET. Meanwhile, the IT industry in India is unable to find enough trained people to fill its vacancies, ET. Fewer jobs for the educated, fewer educated for jobs. Those who can, escape.  

Other central banks are thinking of tightening. The RBI isn't.

"Inequality is discussed at two levels: income and wealth," wrote Prof V Anantha Nageswaran. "Gini coefficient (wikipedia), the usual measure of income inequality in the developed world, is far less skewed once fiscal transfers are taken into consideration. Yes, fiscal policy is doing its job." Fiscal transfers are cash payments to people, who lost their jobs due to the pandemic, by governments, as in the US, pgdpf.org. In March 2021, US lawmakers "gave final approval to a new $14 billion payroll assistance package to US airlines as part of a COVID-19 relief bill," which means that "Congress has awarded US airlines $54 billion for payroll costs since March 2020", Reuters. This was done to protect jobs in airlines. "The real issue is wealth inequality, and the quantitative easing (QE) policies of central banks have a key role in fomenting and perpetuating it," Nageswaran. "Quantitative Easing (QE) is a form of unconventional monetary policy in which a central bank purchases longer-term securities from the open market in order to increase the money supply and encourage lending and investment," Investopedia. In its July meeting, the US Federal Reserve held its Funds Rate to near zero, CNBC. "As expected, the Federal Open Market Committee concluded its two-day meeting by keeping interest rates in a target range between zero and 0.25%." "Central banks have seemed to assume that any adverse shock justifies another round of bond buying. QE has become a universal remedy for almost any macroeconomic setback," wrote former Governor of the Bank of England Mervyn King, who oversaw the creation of the housing bubble in 2008, because of extremely low interest rates (wikipedia), and the bailout of banks that followed the financial collapse. "Today, policymakers are struggling to explain how or even whether QE will be unwound. They're rightly concerned about triggering a sharp market reaction to signals that asset purchases will be tapered," King. "Apparently, the plan now is to reduce QE before interest rates are raised." "Investors are fixated this week on the Federal Reserve's policy meeting as the US central bank approaches the final quarter of the year, when it is expected to begin paring back its unprecedented level of bond purchases as the first step towards normalizing monetary policy," Reuters. Investors are keen to know how fast the Fed intends to stop its asset purchases and its prediction for when it will start raising its Funds rate. "A bond market tantrum that drives up yields can be a fearsome prospect for central banks but the US Federal Reserve might just welcome a sell-off that lifts Treasury yields towards levels that better reflect the robust state of the economy," Reuters. The Federal Funds rate is the rate at which commercial banks lend their excess reserves to other banks overnight, Investopedia. The Funds rate influences the rate of interest banks charge their customers which affects the entire economy," The Balance. The Reserve Bank of India (RBI) sets the repo rate at which it lends to commercial banks and thus regulates money supply, Economic Times. After one of the strictest lockdowns last year the government announced a stimulus package, apparently worth Rs 20 trillion, but the actual spending of the government amounted to Rs 3.10 trillion which was just 1.55% of GDP, Indian Express. Finance Minister Nrimala Sitharaman announced a mini stimulus in July this year but "The direct stimulus in the package adds up to 0.5% of the gross domestic product (GDP)," wrote Puja Mehra. While developed economies helped their citizens with cash subsidies the Indian government has been collecting trillions of rupees through higher taxes on fuel, Business Standard. By keeping real interest rates at negative the RBI is deliberately taking money away from people (india,com), while the government does the same through taxes. Easy to blame rich countries. The real culprits are right here.   

It's not Lehman, but it could be a lingchi moment.

"From the way metal prices have moved in recent weeks, it looks like the wheels are falling off China's property market," and "Add to that the travails of China Evergrande group, the property developer that's at risk of defaulting on some $300 billion of liabilities, and it makes up a bearish picture for ferrous metals," wrote David Fickling. "In the best of times, ferrous metal consumption tends to decline once an economy moves from its resource-intensive industrial development stage toward a more affluent service economy." "The contract sales of properties sold by Evergrande have been coming down over the last three months, with sales falling from $10.75 billion in June to $5.71 billion in August," wrote Vivek Kaul. $1 equals 6.46 Chinese Yuan, Xe. In 1996, only 29% of Chinese lived in urban areas, by 2018 it was 60%. "Operating on scale, by 2004, Evergrande had become one of the ten largest Chinese real estate developers in a market that had more than 24,000 players." "Evergrande's rise happened primarily because of what E-House calls the Evergrande model of 'three highs and one low' (high debt, high leverage, high turnover and low cost)." Real estate contributes 29% of China's gross domestic product (GDP). Thomas Orik wrote, "For mom-and-pop investors, real estate was the only show in town. Bank deposits, with their below inflation returns, looked unattractive. The roller coaster stock market, lurching between, huge gains and massive losses, was too volatile to act as a store of value." "In fact, Guo Shuqing, head of the China Banking and Insurance Regulatory Commission, had warned in March that if home prices fall, people might suffer losses, leading them to default on their home loans and this would create economic chaos." US markets fell yesterday. "The S&P 500 fell 1.7% to 4,357.73, posting its worst daily performance since May 12," CNBC. "The Dow Jones Industrial average lost 614.41 points, or 1.8%, to 33,970.47 for its biggest one day drop since July 19. The tech-heavy Nasdaq Composite dropped 2.2% to 14,713.90." "Asian stock markets were down on Tuesday (today) amid concerns around Chinese property group Evergrande and the impact on China's financial system. Japan's benchmark Nikkei 225 index was almost 2% lower, while the Hang Seng in Hong Kong dipped by 0.3%," BBC. "That followed similar falls in Europe, with Germany's Dax index losing 2.3%, and the Cac 40 in France down 1.7%." "The offshore yuan wallowed near an almost one-month low on Tuesday while the safe-haven dollar and yen stood tall as investors sought shelter from a potential China Evergrande default," Reuters. Added to economic pressures, China's neighborhood has suddenly become more uncertain. China has been intruding into Indian territory and taking over slice after slice leading to a fierce hand-to-hand fight at Galwan Valley in June 2020, leading to the death of 20 Indian soldiers, wikipedia. "The UK, US and Australia have announced a historic security pact in the Asia-Pacific, in what's seen as an effort to counter China. It will let Australia build nuclear-powered submarines for the first time, using technology provided by the US," BBC. "Tensions between China and Australia have taken a $4 billion toll on the important trading partnership," but "While trade between China and Australia fell by about 5.4 billion Australian dollars ($4 billion)," "that loss had been mostly made up by a 4.4 billion Australian dollar ($3.27 billion) increase with the rest of the world", said Australian Treasurer Josh Feidenberg, CNN. "Taiwan proposed....extra defense spending of T$240 billion ($8.69 billion) over the next five years, including on new missiles," Reuters. Then, there is Afghanistan which shares a 80 km border with Xinjiang province in China. "The US hastily withdrawing its troops....has already had a serious negative impact on the situation in Afghanistan," China's Foreign Minister Wang Yi told US Secretary of State Anthony Blinken, Hindustan Times. Default by Evergrande will not be China's Lehman moment, wikipedia, but it could turn out to be a part of 'lingchi' which means 'death by a thousand cuts', wikipedia. After all, the Chinese invented it.  

Thapar should know they are secular.

Karan Thapar is distressed by UP Chief Minister Yogi Adityanath's "constant taunting of Muslims". "I can hear echoes of Germany in the 1930s, South Africa in the 1960s and Uganda in the 1970s." Kristallnacht or the 'Night of the Broken Glass' was a pogrom against Jews on 9-10 November 1938 in Nazi Germany. This was followed by extermination of Jews, homosexuals and Roma and others considered to be impure, holocaust. Ironically, the ancestry of Roma people has been traced to northwestern India, DNA. South Africa practised Apartheid, meaning 'apartness' in Afrikaans, which involved segregation of people according to color, with whites as the dominant group, history.com. On segregation, MK Gandhi said in a speech in South Africa on 26 September 1896 that whites wanted to "degrade us to the level of the raw Kaffir (blacks) whose occupation is hunting, and whose sole ambition is to collect a certain number of cattle to buy a wife with and then, pass his life in indolence and nakedness...", HT. Gandhi is called a 'Mahatma' along with a major league baseball executive and a social reformer from Maharashtra, The New India Express. Uganda in the 1970s was when Idi Amin Dada became president and expelled all people of Indian origin who held British passports, wikipedia. Idi Amin had limited education, entered the British Army as an assistant cook, was powerfully built with a big chest, was Uganda's light heavyweight boxing champion and became president through a military coup. In a recent speech Adityanath asked, "Were you getting this ration before 2017? Because back then those saying 'abba jaan' used to digest the ration -- earlier those saying 'abba jaan used to loot jobs meant for the poor'," wrote Thapar. On 7 September 2014, Adityanath claimed, "In places where there is 10-20% minority population, stray communal incidents take place. Where there are 20.30% of them, serious communal riots take place and where they are more than 35%, there is no place for non-Muslims." "So, what does the Bharatiya Janata Party (BJP) president's and PM's silence amount to?" Thapar should know that this government is strictly secular in its repression of the people and its rhetoric against Muslims is to lull Hindus into accepting atrocities committed on them. "India's Enforcement Directorate, a government agency that fights financial crime, searched Harsh Mander's premises on Thursday," BBC. "A writer, researcher and social activist by profession, Mr Mander has been a staunch critic of Prime Minister Narendra Modi's Hindu Nationalist government." You don't have to criticise the Supreme Leader, just helping poor migrants to get home is sufficient crime because it showed up the ineptitude of the government. "Searches by the Income-Tax department at the premises belonging to actor Sonu Sood led to widespread criticism by leaders in political parties like AAP in Delhi and Shiv Sena in Maharashtra," TimesNow. "Bollywood actor Sonu Sood and his associates were involved in Rs 20 crore (Rs 200 million) tax evasion and violation of Foreign Currency Regulation Act (FCRA) while raising funds from abroad, the Income Tax (I-T) department said," Hindustan Times (HT). Unproven allegations. What is his crime? Sood helped "thousands of migrant workers, stranded by Covid-19 lockdown in Mumbai, return home", BBC. "A caravan of misery is winding its way down India's highways as the exodus of migrant workers from it Covid-scarred cities and industrial townships head for home on foot, battered bikes, crammed into backs of trucks any which way they can. All along the 800km, Pune-to-Bhopal stretch of the Mumbai-Agra NH, thousands upon thousands of migrant workers, children in arms, stumbling along, are stretched out in unending lines," Times of India. Sonu Sood was awarded with the SDG Special Humanitarian Action Award by the United Nations Development Porgramme (UNDP), "for helping thousands of migrant workers reach home during lockdown", Zee News. How dare he show up cruel indifference? Red rag to a bull.    

Will the bull jump over the moon?

"India is now the world's sixth largest stock market, overtaking France for the first time in market capitalization, with the benchmark Sensex rising over 23% this year," News on Air. "India's market capitalization stood at $3.4055 trillion on Tuesday, September 14, 2021, compared to $3.4023 trillion in France, according to Bloomberg data. India recorded the biggest gain in market cap this year, registering more than $873.4 billion or a rise of 35 percent from $2.52 trillion on 31 December 2020. Since March 2020, India added nearly $2.08 trillion market cap or a 159 percent gain. In 2020, it added a market cap of $373 billion, or a gain of 17.4 percent from $2.14 trillion." Astronomical numbers. It is amazing because on 25 March 2020, India went into one of the strictest lockdowns in the world," Hindustan Times (HT). "The first set of curbs remained in place till April 14 and was extended four times, each time with gradual relaxations." In the first quarter (April to June) of the financial year 2020-21, India's GDP contracted by 23.9%, DD News. "India's gross domestic product (GDP) for the second quarter ended September 30 contracted by 7.5%, government data showed," Times of India (TOI). Over the financial year 2020-21, India's GDP contracted by 7.3%, wrote Udit Misra. "After the decline in the wake of the Global Financial Crisis, the Indian economy started its recovery in March 2013 -- more than a year before the present government took charge," but "the growth rate steadily fell from over 8% in FY17 (1 April 2016-31 March 2017) to about 4% in FY20, just before Covid-19 hit the country." So, the more the Indian economy slid downwards, the more was the rise in the stock market. "Reliance Securities head strategist believed that Sensex may cross 60,000 by the year-end," News18. This was on 25 August when, "The Sensex hit its fresh all-time high of 56,198.13 while the Nifty made a fresh peak of of 16,712.45 in intraday trade." "However, considering strong earnings outlook and possible recovery in credit growth and improvement in asset quality of bank, Sensex crossing 60,000 cannot the ruled out," said Binod Modi. No need to wait for the end of the year. The Sensex closed at 59015.89 on 17 September, Economic Times (ET). "While the Sensex touched a lifetime high of 59,737, Nifty reached new peak of 17,792 during the day," Business Today. May sound ridiculous, but by this logic the Sensex will reach infinity if economic growth sinks to zero. However, India is not alone. "According to the Bank of America Merrill Lynch's September Survey, global fund managers have turned bearish on the global economy. Expectations of global growth are now at a net of 13%, the lowest since April 2020. Also, this is a significant decline from a 91% peak in March this year," wrote Harsha Jethmalani. But "despite sluggish earnings growth and weak fundamentals, global equity market capitalization has shot up 75% to $119 trillion from the lows of March 2020, showed analysis by Motilal Oswal Financial Services Ltd." "Last year markets were driven by savings on the cost side, but now the enthusiasm is more of a demand pull," wrote Jimeet Modi. "Across industries, be it auto where supply is curbed due to the semiconductor shortage or real estate which is experiencing a significant offtake in inventories due to robust bookings, demand may turn out to be a big aid to margins. Whether pent-up or no pent-up, demand is demand, and the macros are playing a big role in driving enquiries." Surely if supplies are constrained, any demand will lead to a rise in prices and inflation? "The MSCI India index beat the MSCI World gauge of developed nations by more than six percentage points last month the biggest gap since 2018," wrote Akshay Chinchalkar and Nupur Acharya. "A tide of foreign inflows and domestic liquidity has helped fuel a a 132% surge in Indian stocks from their March 2020 pandemic lows." No wonder, a survey by ET showed that "Respondents felt India is stronger in (Prime Minister) Modi's leadership, and they feel more secure." English toddlers sing that the cow jumped over the moon. In India, it's the bull.     

Blamed Pakistan, but punished France.

"The Biden administration will review US ties with Pakistan in light of Islamabad's support for Taliban terrorists while professing to help Washington in Afghanistan, the country's top diplomat told the Congress," wrote Chidanand Rajghatta. "Amid considerable disquiet among lawmakers and the US commentariat over Pakistan's duplicity in Afghanistan", US "lawmakers demanded more severe action against Islamabad for its subversive role, including ending its status as a major non-Nato ally (MNNA) that opened up a military and financial aid spigot that cost US taxpayers billions of dollars." With 14 of the top 15 universities in the world, usnews.com, it is astonishing that the US establishment has been so stupid for decades even when American soldiers were dying in Afghanistan because of Pakistan. Given that the American government is so stupid, it is worrying that 590,021 foreign students, of which 207,460 are Indians, are studying in universities in the US, Times of India (TOI). "Pakistan's army Inter-Services Intelligence (ISI) has backed the Taliban since the group's origin in the mid-1990s," brookings.edu. "Mullah Omar, the founder of the Taliban, was trained by the ISI during the war against the Soviets in the 1980s." "After the American invasion of Afghanistan, Omar went into exile in Pakistan along with most of his lieutenants. With the ISI's help, they rebuilt the infrastructure in the borderlands and gradually stepped up attacks on the NATO and Afghan forces. Pakistani aid went far beyond sanctuary and safe haven for the leadership and cadres and their families -- it included training, arms, experts, and help in fundraising, especially among the Gulf states." In fact, despite Pakistan's open duplicity there are people like Robin Raphael who actively support both Pakistan and the Taliban, Swarajya. However, Raphael is almost acceptable compared to President Richard Nixon who hated Prime Minister Indira Gandhi and found Indian women revolting, India Today. His sidekick Henry Kissinger described Indians as "superb flatterers" and "scavengers". Nixon threatened India with the Seventh Fleet in the east, while Britain sent its fleet to the west of India, to stop India from attacking Pakistani forces in East Pakistan, which is now Bangladesh, Eurasian Times. The turmoil in the US is because 13 US soldiers were killed by suicide bombers in Kabul during President Joe Biden's chaotic withdrawal from Afghanistan to boast during this year's 9/11 events, AP. To divert attention away from the debacle, "Australia will build eight nuclear- powered submarines under an Indo-Pacific security partnership with the United States and Britain that analysts say will likely rile China, which denounced the creation of blocs intent on harming others," Reuters. This is an Anglo alliance which "scuppered a multibillion dollar deal" that France had signed with Australia. For the first time, "France has said it is recalling its ambassadors in the US and Australia for consultations, in protest against a security deal that also includes the UK," BBC. Meanwhile, "The US has removed its most advanced missile defense system and Patriot batteries from Saudi Arabia in recent weeks, even as the kingdom faced continued air attacks from Yemen's Houthi rebels, satellite photos show," The Tribune. This will probably leave Saudi Arabia open to missile and drone attacks by Iran, as happened in 2019, wikipedia. In an act of mutiny, "Top US General Mark Milley has defended himself after a book reported he had 'secret' phone calls with China amid concerns about then-President Donald Trump," BBC. "President Joe Biden on Wednesday threw his support behind the top US officer, Mark Milley," Reuters. "The White House abruptly cut the feed of President Biden's briefing on wildfires with federal and state officials," Fox. Shows that Biden is a weak, vindictive man not in charge of the government. Anti-American nations will try to take advantage. An all-out war seems inevitable.      

If the US can do it, why not India?

Conversation on economic policy has changed completely in the US. "Neoliberalism, the Washington Consensus, market fundamentalism -- call it what you want -- has been replaced with something very different," celebrates Prof Dani Rodrik. "In macroeconomic policy, debt and inflation fears have given way to a preference for over-stimulating the economy and downplaying the risks to price stability." A study by 4 universities in the US presented a paper that posited that "When wages are rigid downwards -- they don't fall as easily as they rise", though it "may cause overall inflation to exceed the central bank's target, it could be desirable nonetheless." "The world is facing a dangerous bout of 'stagflation' as the economic recovery slows and prices rise, experts have warned," thisismoney.co.uk. "The slowdown poses a problem for central bankers, who are facing the dilemma of whether to withdraw economic support to tame inflation while running the risk of stunting the recovery." Because of scattered lockdowns due to Covid, in August, "Services were shut...at a terminal at Ningbo-Zhoushan port after a worker was infected with the Delta variant of Covid-19. Ningbo-Zhoushan in eastern China is the world's third-busiest cargo port," BBC. "The world's third-largest container carrier said it's capping spot rates for ocean freights for the next five months, yielding to pressure from some customers and regulators concerned that global trade disruptions have pushed the cost of shipping too high," Economic Times (ET). "The cost of shipping a 40-foot container from Shanghai to Los Angeles reached $11,569 in the past week, nearly eight times higher than pre-pandemic levels, according to the Drewry World Container Index." "Chips are set to remain in short supply for at least a year as demand for carmakers and other manufacturers remains robust, and ramping up production capacity takes time, said the head of Southeast Asia's Integrated Micro-Electronics Inc., Mint. "Still optimists insist that this is all temporary. Once Delta fades and benefits expire, workers will return to the labor market, production bottlenecks will be resolved, output growth will accelerate, and core inflation -- now running at 4% in the US -- will fall back toward the Fed's 2% target by next year," wrote Prof Nouriel Roubini. The problem is the Federal Reserve, which "Like most central banks, it has been lured into a 'debt trap' by the surge in private and public liabilities (as a share of GDP) in recent years," and "exiting QE too soon could cause bond, credit and stock markets to crash". "Nevertheless. there is a risk that changes in the US will be misunderstood in other countries and that policymakers elsewhere will blindly copy American remedies without paying attention to specificities of their own circumstances," Rodrik. The Reserve Bank of India (RBI) has no such problems. It kept "the repo rate unchanged for the seventh time in a row at 4 percent, citing the need to support the ongoing growth recovery amid continuing uncertainty and global financial market volatility", Hindustan Times (HT). "Retail inflation cooled to a four-month low of 5.3 percent in August from 5.59 percent in the previous month, led by subdued prices of food articles and a high base effects," Business Standard. The inflation target for RBI has been set at 4%, but can oscillate between 2% and 4%, ET. Last year in August, retail inflation grew at 6.69%, Indian Express. At that time, the RBI did not react because the wholesale price index (WPI) was low at 0.16%, New India Express. Now, however, "Wholesale prices quickened to 11.39% for August showing a trend that's in opposite direction of retail prices on the back of hardening of non-food articles, mineral oils," ET. India's stock market indices, the Sensex and Nifty, are trading at record highs, moneycontrol. This is increasing risks for the economy concluded new research by Bloomberg Intelligence and Bloomberg Economics, ET. If the US can do it so can we. Monkey see, monkey do.  

Whatever it is, it's not working.

"Leaders of the group of 20 (G20) nations are set to meet next month in Rome to finalize a landmark deal to overhaul the global tax landscape," wrote Puneet Kumar Arora. India is a member of the G20, which "collectively accounts for around 90 percent of gross world product (GWP), 75-80 percent of international trade, two-thirds of the world population and half the world's land area", wikipedia. "The deal also seeks to put in place a global minimum corporate tax rate of 15% to ensure that MNEs (multinational enterprises) pay at least that minimum, even when they operate in low-tax jurisdictions." "In its present form the deal only covers MNEs with a global annual turnover of 20 billion euros," and will mostly benefit US, Germany and France where large MNCs do most of their business. India will lose revenue under the deal because we collect higher taxes under our 'equalization levy'. India launched a 'Make in India' program in 2015 with a view to increase growth in manufacturing by 12-14% per year, create 100 million new jobs by 2022 and to increase share of manufacturing in India's GDP to 25% by 2022, wikipedia. "India's growth since liberalisation in 1991 has been largely powered by a comparatively small and high-skills services sector, which contributes about 54% to the country's GDP. In comparison, the share of manufacturing has remained stagnant at about 17%," scroll.in. In 2017, a study found that "The median gross hourly wage in the manufacturing sector....was  Rs 254.04, about 9% less than the median wage for the entire Indian economy taken together (Rs 279.7)." In terms of gross value added (GVA) the share of manufacturing in India's GDP plummeted to just 13% in 2020, World Bank. "Imports of telephones had risen from $3.2 billion in 2009 to $7.5 billion in 2014 and have fallen to $2.2 billion in 2020. Alongside, exports had fallen from $3.5 billion in 2009 to $0.6 billion in 2014 and risen to $3.0 billion in 2020," wrote Prof Arvind Panagariya & and Deepak Mishra. This should indicate that the Make in India initiative has been wildly successful except that tiny Vietnam, a country less than one-tenth of India's size, has reported that "From just $0.9 billion in 2009, its telephone exports rose to $21.5 billion in 2014 and to 31.2 billion in 2020. Its electronics goods exports stood at $ 122 billion in 2020 against India's $12.8 billion." "How has Vietnam achieved this success? Whereas Indian leaders routinely express regret at having signed free trade agreements (FTAs) even with countries accounting for a minuscule proportion of the country's trade, tiny Vietnam has boldly embraced such economic giants as China and the European Union in FTAs. It also has FTAs with every single Asian country of significance." The budget in 2020-21 saw import tariffs on electric appliances and kitchenware doubled to 20%, while tariffs on import of furniture went up from 20% to 25%. "This is called import substitution industrialisation (ISI), a trade policy that is all about substituting imports with domestic manufacturing," canarahsbclife.com. Domestic business tycoons love it because Indian consumers are prevented from buying higher quality goods at lower prices from abroad, and domestic companies can sell shoddy goods at higher prices. Crony capitalism rampant. "Commerce and Industry Minister Piyush Goyal has confirmed that India and the UK are moving towards an early harvest trade agreement, with a comprehensive free trade agreement (FTA) the next step," Economic Times (ET). To qualify as whisky in the UK, it has to mature for at least 3 years, but high temperatures result in high evaporation and costs of storage and logistics are very high in India. "The UK and EU have allowed the import of 'un-aged' Indian whisky, but it is known as 'Spirit Drink' or 'Indian Spirits' and cannot even be called Indian whisky," wrote Arpita Mukherjee. In retaliation India has banned imported liquor at Canteen Stores Department of the armed forces but allows it for paramilitary forces. "India's merchandise exports rose 45.8 percent in August at $33.28 billion" but imports rose by a whopping 51.72% to $47.09 billion, resulting in trade deficit of $8.2 billion, ET. Seems that import substitution is increasing imports.     

If it is common, isn't it for the populace?

In January of 2018, taxi drivers in Goa went on strike against plans to introduce ride-hailing services, such as Uber and Ola, in the state, wrote Prasanna Karthik. After 2 days the government of then Chief Minister Manohar Parrikar gave in to the taxi drivers despite having widespread public support for the move. Because taxi drivers could influence election results in 4 of the 40 seats in Goa assembly. Populism prevents reforms in a democracy but there is no need for populism in China because "performance is evaluated by higher ups". "Countries went the communist route and failed. Countries went the capitalist route and are now busy self-destructing with their addiction to free money. But there exists a third route. Use capitalism to create prosperity and then switch to socialism to share the spoils," wrote Prof VA Nageswaran. "President Xi Jinping has called for China to achieve 'common prosperity', seeking to narrow a yawning wealth gap that threatens the country's economic ascent and the legitimacy of Communist Party rule," Indian Express (TIE). "Chinese leaders have pledged to use taxation and other redistribution levers to expand the proportion of middle-income citizens, boost incomes of the poor, 'rationally adjust excessive incomes', and ban illegal incomes." China's phenomenal growth came from rampant intellectual property theft and growth may slow down drastically as "The US Justice Department is aggressively forging ahead with a clampdown on Chinese economic espionage" voanews. In July, "The US Department of Commerce added 23 Chinese entities to its blacklist", of which it "accused 14 of direct involvement in human right abuses in Xinjiang, five of 'directly supporting' the Chinese military's 'modernization programs', and four of violating previous US sanctions by doing business with blacklisted companies," Quartz. "The Chinese ambassador to Britain has been banned from attending an event in the British parliament because Beijing imposed sanctions on lawmakers who highlighted alleged human rights abuses in Xinjiang," Reuters. "English is almost synonymous with China's reform and opening-up policies, which transformed an impoverished and hermetic nation into the world's second biggest economy," TIE. Now China is restricting the teaching of English in schools. "Many call the phenomenon 'reversing gears', or China's Great Leap Backward, an allusion to the disastrous industrialization campaign of the late 1950s, which resulted in the worst man-made famine in human history." "As the academic year gets underway, students from primary schools through colleges and universities are immersed in lessons from 'Grandpa Xi'," Economic Times (ET). "Many China experts believe that Xi is laying the groundwork for a bid to remain in office indefinitely." Like Mao Zedong. On the other hand, "Populist leaders aren't those who address the needs of the numerical majority" as shown by "A handful of farmers who don't represent the country's farming community have forced the government to defer the implementation of farm reforms, which benefit every citizen in general and other farmers in particular," Karthik. Not true. The new farm laws, which Karthik is so enamoured with, will abolish state wholesale markets, known as Agriculture Produce Market Committee (APMC) or 'mandis', Josh, where farmers are guaranteed a Minimum Support Price (MSP) on 23 crops, wikipedia, though the government buys mainly wheat and rice at MSP. In Bihar, "which abolished state regulated mandis back in 2006" "Farmers cannot bargain" and are so poor that they migrate to Punjab, which still has mandis, to work as agricultural laborers, wrote Sayantan Bera. President Ronald Reagan deregulated farms in the US, resulting in, "The US farmer's share of the retail price has declined from 50% in the 1950s to less than 15% today," wrote Bedabrata Pain. China has thoughts of Grandpa Xi, while we in India are invited to sit the Gau Vigyan exam by the Rashtriya Kamdhenu Aayog, pib.gov.in. Who can generate more "common prosperity': Xi or cows?

How can anyone blame 'The Messiah'?

 In 2018, Vivan Marwaha started researching, "How do young Indians in the country's small towns and cities view their place in India's future?" Hindustan Times (HT). "Economic anxiety, due to the lack of stable, well-paying private sector jobs, is the biggest roadblock for the success of not just Indian millennials but the future of the entire country." "And during my research, I met countless young Indians who had devoted years of their lives to studying for the Union Public Services Commission exams, state-level services, or running from pillar to post trying to find any employment in the government, simply because it is stable." "They see problems in the world around them and have some ideas on how to fix them, but they don't see a political environment that will allow these ideas to become reality. The dirty nature of politics, with its backroom dealing and dynastic tendencies, not only discourages qualified people from running for office, but also leaves millions dejected with a system they have come to accept as status quo," The Wire. The Covid epidemic has increased their stress. "The findings are part of Deloitte's Millennial and Gen Z Survey 2021 for India. It states that stress and anxiety levels among Indian millennials (49 percent) is higher than the global average, and that Indian Gen Zs feel as anxious and stressed as their global average," Indian Express (TIE). "Concerns for welfare of their family, job/career prospects, and long-term financial future are the primary causes of stress for both the groups." "Technology is an intrinsic part of the lives of Gen Z (anyone born between 1995 and 2012) and according to a 2019 Bloomberg report, Gen Z made up for 32% of the global population. India's Gen Z population currently stands at 472 million and as per a report, on average, an Indian Gen Z spends eight hours per day online," Fortune India. Curiously, "Voting data show that Indian millennials are the most supportive voters of the Bharatiya Janata Party (BJP) and Prime Minister Narendra Modi." Modi "has an approval rating of 70 percent, which is the highest among 13 global leaders polled in the survey conducted by The Morning Consult." HT. "The devastation caused by the second wave claimed millions of lives and caused widespread suffering and anguish," Bharat Express. "Yet many urban internet users do not want to blame their state or the Union government for the devastating tragedy that unfolded before their eyes, according to data from the latest round of the YouGov-TBEN-CPR Millennial Survey." Support for the BJP has remained unchanged. No surprise that, "The BJP's income in 2019-20, and election year, jumped almost 50% to Rs 3,623 crore (Rs 36.23 billion) from Rs 2,410 crore (Rs 24.10 billion) in 2018-19, while its total expenditure rose by 64% to Rs 1,651 crore from Rs 1,005 crore over the same period." Times of India (TOI). Rs 2,555 crore came from electoral bonds, which are anonymous gifts from unknown individuals, TIE. Therefore, extremely shady. On the other hand, "The 'Mood of the Nation' survey done by the India Today magazine has found that Prime Minister Narendra Modi, who until last year was the first choice as next prime minister for 66% of the country, has seen a slip to 24%," TheWire. How truthful our news agencies are depends on how brave they are and on their confidence in withstanding an onslaught from various government agencies on completely fictitious charges. "Tax authorities in India raided several offices of one of the world's biggest-selling newspapers," CNN. The newspaper, Dainik Bhaskar, "shocked India with its reporting of dead bodies in the river Ganges during the brutal second wave of the Covid-19 pandemic this spring." Income Tax officers recently 'surveyed' office of Newsclick and Newslaundry and took away documents and phones of staff, DNA. Modi's birthday will be celebrated over 3 weeks, during which140 million bags and 50 million postcards will be distributed thanking him for helping the poor, wrote Tavleen Singh. Videos will show him as "Messiah of the poor". It's not enough that they are poor. They have to be humiliated as well.