Back to gold?

"US Treasury Secretary Janet Yellen has said that economic sanctions imposed on Russia and other countries by the United States put the dollar's dominance at risk as targeted nations seek out an alternative." "But the dollar is used as a global currency for reasons that are not easy for other countries to find an alternative with the same properties," she added. "The dollar's standing as a reserve currency of choice saw a steep decline in 2022 even though its strength in international trade remains unchallenged, according to Eurizon SLJ Asset Management." BI. "As the name suggests, dedollarisation is a term that refers to the process wherein countries tend to reduce their reliance on the US dollar as a reserve currency, medium of exchange, and also a unit of account." India Times. "Central banks are buying more tonnes of gold now than at any time since data began in 1950 and currently account for a record 33% of monthly demand for gold," wrote Ruchir Sharma. "By one measure, the dollar share of central bank reserves is down to 47% from 73% two decades ago, with nearly a third of that decline coming since the start of 2022." Why now? Because, "Astonishingly, 30% of all countries now face sanctions from the US, the EU, Japan and the UK - up from 10% in the early 1990s." "Nations cutting deals to trade without the dollar now include old US allies such as the Philippines and Thailand." Clearly, no nation likes to be bullied and imposition of sanctions by the US if it is disobeyed is humiliating and insulting. But, what is the alternative? "Central banks bought 400 metric tonnes of gold in the September quarter," wrote David Fickling. "There is one obvious factor in common between the declared buyers however: All are from nations facing problems." Turkey added 95.5 tonnes as its lira plunged 52%, Egypt bought 44.8 tonnes as its pound fell by 20% and India bought 40.5 tonnes as the rupee fell by 8.7%. "In a world where you can trust no one, it makes sense to bullet-proof yourself with metal." So are central banks contemplating returning to the gold standard? "The gold standard is a monetary system where a currency or paper money has a value directly linked to gold." Investopedia. "The appeal of a gold standard is that it arrests control of the issuance of money out of the hands of imperfect human beings," "and a society can follow a simple rule to avoid the evils of inflation." But, inflation reduces the value of debt and so helps those with mortgages or car loans, and helps the government to reduce its debt. NPR. When power is in the hands of 'imperfect human beings' they will not want to be restricted by a gold standard. Especially before an election. The dollar is probably safe. 

His master's choice.

"Shaktikanta Das is the twenty-fifth and current governor of the RBI (Reserve Bank of India). He is a retired IAS (Indian Administrative Service) officer of the Tamil Nadu cadre, although he is originally from Odisha. Das studied history at St. Stephen's College at the University of Delhi." The Print. After serving in the Ministry of Finance and at many international organisations he was appointed as governor of RBI after retirement. "Das' lack of formal education in economics has proven to be a gift that allows him to make unconventional choices with great success." That is to say that an experienced economist would have been incapable of making such decisions. In 2015, "India's Chief Economic Advisor Arvind Subramanian...said he had flunked his IAS entrance test and did not do very well in his academic career initially." NDTV. Proof that IAS officers are superior. The IAS is a continuation of the Indian Civil Service (ICS) and, as such, is a relic of the British Raj. "Becoming an IAS officer is seen as a ticket to power, money and status." ET. But the service is seen as "cumbersome, slow, inefficient, and often venal" because of "constant political interference and lack of specialisation and expertise. These factors are responsible for the widespread perception of a corrupt and inefficient bureaucracy." But an asset as the governor of the RBI. RBI's mandate is to ensure that the consumer price index (CPI) inflation remains at 4% with a margin of 2% on either side. ET. But, it seems to have done everything except that. In fact, since October 2019, CPI inflation has been higher than 4% every single month and has been consistently higher than 5.5% since December 2021. rate-inflation.com. "The conventional explanation is that the retail inflation was primarily driven by high food prices and high oil prices," wrote Vivek Kaul. Since food and oil prices are driven by supplies, and supplies cannot be increased by monetary policy, the RBI kept its interest rate at 4% for 24 months from May 2020 to May 2022. NDTV. Core inflation is what "remains after excluding the food and light group, and petrol, diesel and other fuels for vehicles." "In every month since June 2020, the core inflation has been higher than 5%. In every month since October 2021, the core inflation has been higher than 5.5%. In September, it hit 6.5%." "Compared with the Budget's estimated 10.5% nominal growth projection for 2023-24, RBI expects the year to end with 11.7% growth," wrote Rajrishi Singhal. Yet the RBI paused its rate hikes and kept its policy rate unchanged at 6.5% in its April meeting. DH. Karnataka state elections are next month and "The leadership of India's three leading chambers of commerce...lobbied to stay RBI's hand from raising rates." As a result "63% of Indian consumers are tightening expenditure on non-essential goods and services" while "the luxury goods market is witnessing high sales, with India's rich splurging on cars, homes, watches etc." ET. Helping the politicians and the rich. Just obeying instructions. That's why he was chosen.   

Just a joke.

"Speaking at the media channel conclave on Wednesday (26 April), Prime Minister Modi shared with the audience a joke about how a professor spotted a spelling mistake while reading a suicide note by his daughter and wondered how she had got a spelling wrong despite his efforts for so many years." TN. Hilarious indeed! Good to have a sense of humor. Because, "The National Crime Records Bureau (NCRB) released data on suicidal deaths in India in August 2022 and the figures were startling. A total of 1,64,033 suicides were reported in the country in 2021 which is an increase of 7.2% in comparison to the previous year in terms of total numbers." Indian Journal of Psychiatry. Of these, 1,05,242, or 64.2% had an income of less than Rs 100,000, or just about $1,220, in the whole year. But, "Seventy-five years after it attained freedom at midnight, India now has an economy larger than that of its erstwhile colonial master (UK)." TOI. The State Bank of India (SBI) reported that India's GDP is now $3.894 trillion which is 3.5% of the world. These people did not understand how rich they were. Hilarious. "According to NCRB Data, in 2020, 12,526 students died by suicide, while in 2021, the number rose to 13,089." TOI. Reasons for suicides are not mentioned in the report, "However, it says 864 out of 10,732 youngsters under the age of 18 years took their lives due to 'failure in examination'." Death of a child is always excruciatingly painful for any parent, but a serious illness like cancer can be attributed to an act of God. The grief of suicide of an otherwise physically healthy child must be inconsolable. But, could have failed because of spelling mistakes. Hilarious. There are many reasons for suicides, including depression, history of a chronic painful illness and financial problems. CDC. Depression is particularly insidious because it cannot be seen, cannot be diagnosed by blood tests or imaging and often there seems to be no reason for the person to be depressed. "Depression is a mood disorder that causes a persistent feeling of sadness and loss of interest." Mayo Clinic. "More than just a bout of the blues, depression isn't a weakness and you can't simply 'snap out' of it." "Most people with depression feel better with medication, psychotherapy or both." Only now are researchers beginning to understand the structural changes in the brain and in neurotransmitters associated with depression. Harvard. Trouble is that there is a suspicion that antidepressant drugs can cause an increase in suicidal thoughts although clinical studies have failed to prove such association. Drug Watch. Bollywood actress Deepika Padukone very bravely discussed how she has suffered from depression and even "felt suicidal at times". NDTV. Someone so beautiful, successful and rich. And yet. So, "The game of life is hard to play, I'm gonna lose it anyway....Suicide is painless, It brings on many changes, And I can take or leave it, If I please." May be painless, but it is final. Hilarious! 

We love fudge.

"As India's Pradhan Mantri Mudra Yojana (PMMY) completed eight years on 8 April," "Data as on 24 March 2023 puts the scheme's cumulative disbursed amount at Rs 22.65 trillion," wrote Soumya Kanti Ghosh, group chief economic advisor, State Bank of India, which is a government bank. "The Centre's data possibly also includes loans given in normal course of business that are being classified under PMMY, a howindialives.com analysis suggests." Mint. "The Reserve Bank of India (RBI) data shows that banks lent between Rs 1.19 trillion and Rs 1.76 trillion a year in under Rs 10 lakh (Rs 1 million) loans from 2017-18 and 2021-22. The split between PMMY and non-PMMY loans is not stated. Even in 2013-14, before PMMY, banks gave about Rs 1 trillion in new loans below Rs 10 lakhs." Is this a case of deliberate double counting, in which the same figure may be counted more than once in the final tally? Economics Discussion. "MUDRA is short for Micro Units Development Refinance Agency Ltd, which provides refinancing to institutions, which further use it to provide loans under PMMY to borrowers who might not be otherwise eligible. Between 2015-16 and 2021-22, MUDRA provided total refinance of Rs 53,050 crore (Rs 530.50 billion) - a fraction of the Rs 23.2 trillions of loans cited under PMMY." Reminds us about the maths in calculating the GDP back series in 2018, which showed that the economy has performed better under the current government than under the previous Congress-led UPA government. HT. MUDRA provides 3 types of loans: Shishu: for loans up to Rs 50,000, Kishore: Rs 50-500,000 and Tarun: Rs 500,000-1 million. MUDRA has benefited all social groups including Scheduled Castes/Tribes (SC/ST), Other Backward Classes (OBC), women and minorities, wrote Ghosh. But, only 9% of Tarun, the largest, loans went to women and just 4% of Tarun loans went to SC/ST. "India's current government has a somewhat difficult relationship with data. Various surveys and calculations, from the national income accounts to household consumption patterns and jobs data, have been cancelled or reviewed," wrote Mihir Sharma. The government is silent about the vitally important national census which was due in 2021. There was "A 58 million increase in jobs between calendar year 2019 and calendar year 2022. Jobs for women increased by 28 million or by 25%...jobs for men increased by 30 million...or 8.4%," exulted eminent economist Surjit S Bhalla & Tirthatanmoy Das. The same figures were analysed by Prof Radhicka who finds that a lot of the so-called employment includes subsidiary status (SS) workers, which means low-paid work for 30 days or more in the preceding 365 days, or unpaid own account workers (OAW) and unpaid family helpers (UFH). It's all hot fudge. We love it. Victory assured.

The whole century.

"China's economy got off to a flying start this year, starting to rebound from Covid lockdowns while helping to boost global growth. ET. "Gross domestic product expanded 4.5% last quarter from a year earlier, beating economists' expectations." "The International Monetary Fund said that China will be the biggest contributor to global output in the next five years, even as India has overtaken it as the world's most populous nation." As a result of strong growth, "A big splurge in spending in China after Beijing lifted COVID-19 lockdowns will help cushion quarterly results of the world's biggest companies, investors say," even as, "In the United States, where major banks have reported first-quarter results, earnings for S&P 500 companies are seen falling 4.7% in the quarter," and "Europe is headed for a recession too, the data shows, with a drop in earnings of 5.4% expected in the second quarter." Reuters. "American companies in China are increasingly pessimistic about the relationship between Washington and Beijing as geopolitical tensions escalate, even as they have a more favorable view of the nation's economic recovery, according to a new survey." ET. But, surely, India with its huge population can replace China as the market for the world? So, why worry? "It is not just this decade but the entire 21st century belongs to India, said Union Minister for Commerce and Industry Piyush Goyal while interacting with the faculty and the students of Stanford Graduate School of Business in San Francisco." NDTV. McKinsey & Co CEO Bob Sternfels said that "it will not just be India's decade, but India's century with all key components in place." Making a fast start, Chief Economic Advisor V Anantha Nageswaran said that "the growth forecast of 7% is 'very realistic' and there is nothing to suggest that it was not achievable." CNBC. We are up and running. As long as we don't stumble. And, "No country is likely to challenge India in size for centuries. What had long been 'the world's largest democracy' is now simply 'the world's largest' everything." DH. However, "India has one of the world's lowest rates of formal employment for women: about 1 in 5. China's is almost double the rate." "Western countries are now rushing to embrace India as an alternative to China. But the obstacles that have kept India from following the same program over the past 30 years remain in place: ineffective governance, insufficient infrastructure, scanty spending on primary education and health, and laws constraining the use of land and labor." "For more than half a century since Mao Zedong's calamitous Cultural Revolution, well-educated leaders have mapped China's trajectory to modernization," wrote Pankaj Mishra. But, "Facts and data in India often appear fudged: political expediency seems to have blocked even a routine national census that would shed light on India's population," and "the regime displays Mao-style, arbitrary decision making, illustrated pointedly by India's devastating policy of demonetization." And, just like Mao, no criticism is tolerated. DH. Safer to keep repeating "India's century". After all, the 'long run' is only 34 years.  

We may have invented it.

"At the beginning of 2023, the state of Sinaloa endured hours of violence as Mexican authorities hunted down and captured Ovidio Guzman, the son of the famous drug trafficker Joaquin 'El Chapo' Guzman. "Blockades, shootings and citizens locked in their homes," "Wresting back control, even momentarily, comes at a high cost (29 people died in this operation, including military personnel and alleged criminals)." "Part of this violence is the product of criminal governance," "There are areas in Latin America where criminals have taken charge of maintaining public services, building infrastructure and even dispensing justice." In India, "The chances of winning for a candidate with declared criminal cases in the Lok Sabha 2019 is 15.5 percent whereas for a candidate with a clean background, it is 4.7 percent." India Today. "Out of the 539 winners analysed in the Lok Sabha 2019, 233 MPs declared criminal cases against themselves." An increase of 44% over 2009. "The number of criminal cases pending in subordinate courts against sitting and former lawmakers rose from 4,110 in December 2018 to 4,984 in December 2021, a report presented to the Supreme Court revealed." The Print. "Uttar Pradesh topped the list with 1,339 cases still pending for final disposal." "About 31 percent of sitting Rajya Sabha MPs have declared criminal cases against themselves while the average assets of the Upper House members are Rs 79.54 crore (Rs 795.4 million), according to a report released by ADR-National Election Watch." Some MPs have been accused of more than one crime, the highest being 204 criminal charges against Adv. Dean Kuriakose of the Congress, followed by 52 charges against Soyam Bapu Rao of the BJP. One India. Political scientist Milan Vaishnav has studied why political parties choose criminals as candidates and why people vote for them. BBC. Criminals have the money and muscle power necessary to win elections and people vote for them because "the government is failing to carry out its functions - delivering services, dispensing justice or providing security - in an impartial manner." Wrestlers in India are protesting against Brij Bhushan Sharan Singh, 6 times MP for the BJP and President of the Wrestling Federation of India (WFI), for sexual harassment. The Telegraph. While he has not been arrested or charged, woman wrestler Vinesh Phogat "claimed that the Delhi Police has leaked names of the victims to Brij Bhushan, who is using Haryana Wrestling Association secretary general Rakesh and Coach Mahavir Prasad Bishnoi to threaten families of women wrestlers, who have filed complaints against the WFI chief." The police have not even filed a first information report (FIR) which shows that the police have officially taken cognizance of the complaint. The Supreme Court has had to issue a notice to Delhi Police and to the government of Delhi. HT. Rape is small potatoes. Brij Bhushan Sharan Singh actually boasts of having committed murder. The Wire. We don't have to go to Latin America to see criminal governance. We may have invented it.  

Statistical member without statistics.

After a gap of two decades, India has been unanimously elected to the United Nations Statistical Commission, wrote Ashish Kumar & Rama Kamaraju. "The membership is for a term of four years, beginning from January 2024." Two Indians - PC Mahalanobis chaired the Commission for its 8th and 9th sessions held in 1954 and 1956 while VR Rao chaired the 19th session in 1976. "India's four-year membership tenure at the Commission comes at an opportune time. We should seize this opportunity to represent the global south in setting statistical standards and help with their implementation." But, what about our standards? "India's current government has a somewhat difficult relationship with data. Various surveys and calculations, from the national income accounts to household consumption patterns and jobs data, have been cancelled or reviewed," wrote Mihir Sharma. In 2019, two members of the National Statistical Commission (NSC), PC Mohanan and J Meenakshi, resigned because the government suppressed their jobs report. NDTV. The report was leaked to the press anyway. The population census was supposed to be held in 2021, 10 years after the one in 2011, but it was postponed because it was "set to be even more politically explosive. In diverse India, the census provides the last word on the relative sizes of various groups. And those numbers don't just determine their voting power, but also the distribution of welfare and public services." Our calculation of consumer price (CPI) inflation is based on weak data, wrote Pramit Bhattacharya.  There is no producer price index (PPI) "which tracks the price pressures faced by firms when they buy inputs". The Reserve Bank's (RBI) inflation expectation is based on a small sample of 6,000 respondents across 18 cities, thus ignoring the much larger rural population. CPI is based on the National Sample Survey (NSS) consumer expenditure survey in 2011-12 which gives too much weightage to food. Could this be deliberate? In 2021, the pandemic impacted supply chains leading to inflation. The Sidney Morning Herald. Central banks were in a dilemma because increasing interest rates would not increase supplies while they could be blamed for doing nothing. Eventually, the US Federal Reserve raised rates nine times. The last hike was of 25 basis points on 22 March 2023. NBC. The RBI kept interest at 4% for 24 months from May 2020 to May 2022 because inflation was caused by higher food prices. NDTV. In March CPI inflation fell to a 16-month low of 5.66% because of softening food prices. ET. In its April meeting of the Monetary Policy Committee (MPC), the RBI promptly decided to stop any further rise in interest rate, DH, citing the fall in CPI, even though it predicts strong GDP growth rate of 6.4% and inflation at 5.2% in 2023-24 which is higher than its mandate of 4%. NDTV. So, ignore inflation blaming high food prices, but keep interest rate low when food prices are low. A case of having your food and eating it too.

Kong Yiji vs Winnie the Pooh.

In China, "In mid-March, a Communist Youth League and CCTV joint social post targeting a self-deprecating 'Kong Yiji' meme by young netizens who joked their academic degrees made them 'unemployable', is making the country's restive youth furious. A month later, with the censors having miserably failed to prevent the meme going viral, the skittish party-state now fears millions of unemployed youth might get swamped by a subversive social movement." "Kong Yiji, a Chinese short story first serialized in a Beijing news weekly in 1919," "is a disillusioned scholar who is constantly ridiculed and often beaten up (for stealing books) at a tavern he regularly visits." "Taiwanese are rushing to buy patches being worn by their air force pilots that depict a Formosan black bear punching Winnie the Pooh - representing China's President Xi Jinping - as a defiant symbol of the island's resistance to Chinese war games." Reuters. In 2017, "The blocking of Winnie the Pooh might seem like a bizarre move by the Chinese authorities but it is part of a struggle to restrict clever bloggers from getting around their country's censorship. When is a set of wrist watches not just a set of wrist watches? When is a river crab not just a river crab? Inside the Great Firewall of China of course." BBC. In 2018, "China banned 'N' as part of a widespread censorship clampdown that occurred after word got out...that presidential limits might be dropped, allowing Chinese President Xi Jinping possibly to stay in power indefinitely." CNN. "In addition to banning use of the letter 'N' online, words such as 'immortality' and 'ascend the throne' were also deemed inappropriate to use on the internet." China can censor the internet inside its own borders but not in other countries. It can only react with fury. "Western media reports on China's population being overtaken by India deliberately ignores China's development, using the topic to 'bad mouth' it and advocate decoupling, state broadcaster CCTV said." Reuters. Decoupling was forced on the world by China's aggressive 'zero Covid policy' which enforced total shutdown of major cities creating enormous supply chain disruptions and resulting in shortages of manufactured goods and inflation. HT. Also, Western countries have reluctantly woken up to China's cyber espionage and hacking by the People's Liberation Army (PLA) unit 61398 based in Shanghai. Reuters. On 18 April 2023, the FBI "arrested two men on charges that they helped establish a secret police station in New York on behalf of the Chinese government, and about three dozen officers with China's national police force were charged with using social media to harass dissidents inside the United States, authorities said." FP. Apparently, there are 102 such 'overseas police stations' in 53 nations around the world. Perhaps it is a good thing that the Chinese population is dropping. Make it easier to spy on them.

Eat ghee, even if you have to borrow to do so.

"Indian economy has been showing signs of transition to a low-inflation regime since the second half of 2022-23 financial year, even as global factors played a big role in the movement of inflation to a high regime from the second half of 2020-21 till the first half of 2022-23, a paper released by the RBI has said." TOI. As if to say that, while we are so good, the whole world is against us. So silly. If we are going to trade with the world it will have an effect on our prices. Especially as, last November, "The World Trade Organisation (WTO) has projected that the global trade growth will rise by 3.5% in 2022 but only 1% in 2023. India's share in the global merchandise trade is 1.8% and in global services, it is 4%, and there is a lot of potential to increase this." With such a minuscule share of global trade it is only natural that prices in India will be influenced by global factors and not the other way round. Hence the RBI should do its job and not make silly excuses. "Inflation in India is expected to come down to 6.8 percent in the current fiscal year ending March 31, to 5 percent the next fiscal, and then drop further to 4 percent in 2024, the International Monetary Fund said." HT. "Ashima Goyal, a member of the Reserve Bank of India's Monetary Policy Committee, said inflation could fall faster to 4% if there are no supply side shocks. Mint. "Bloomberg data shows that core inflation eased slightly to an 18-month low of 5.95% year-on-year in March," wrote Rupali Sarkar. "The decline in core inflation is driven by a significant moderation in prices across discretionary spending components like clothing and footwear, household goods and services, and recreation and personal care items." So, the slowing in the rise of prices is because of falling demand as the poor and middle classes are being forced to cut spending because of high prices. The rich are immune, which is exacerbating inequality. Sale of Sports Utility Vehicles (SUVs) "accounted for more than half of nearly 4 million cars sold in 2022-23," while "sale of entry level affordable cars slumped to just 252,000 units, which is 57% lower from the peak of 583,000 units recorded in 2016-17." DH. "Earlier this month, the RBI projected growth at 6.5% in FY24 while the IMF put it at 5.9%." ET. A poll of 20 economists by ET had suggested that India's economy likely posted a resilient 6% growth in FY24." Credit card spending in the financial year 2022-23 was Rs 14 trillion which is 47.2% higher than Rs 9.71 trillion in the previous year. ET. "The study shows 63% of the spend is online spending," said Aparna Ramchandra. "If I can stick out my neck and say, this is a very,very scary direction that we are heading." The amount of personal debt rises as relative poverty grows. "I was born poor, but I don't want to die poor. I wanted to provide a better life for my children, which is why we came to Sudan," said Prabhu S from Karnataka's Hakki Pikki tribe, who is among several Indian nationals stuck in violence-hit Sudan." TIE. Poverty is an inability to buy goods and services. High prices increase that inability. People borrow to spend. 'Rinam kritva ghritam pibet', which means 'enjoy life, even if you have to borrow'.  

We are not like that.

Right on cue, "Former Jammu and Kashmir Governor Satya Pal Malik has been summoned by the Central Bureau of Investigation (CBI) for questioning on April 28 as a witness in a case of alleged corruption by Reliance General Insurance." NDTV. "Mr Malik had cancelled a contract by the company owned by industrialist Anil Ambani, in 2018 when he was Governor of Jammu and Kashmir." He had also "alleged corruption in giving the contract for civil work at Kiru hydroelectric power project." What has galvanised the CBI into action after 5 years? Is it because, "Indian Prime Minister Narendra Modi hid key facts from the public about the Pulwama terror attack that killed dozens of paramilitary troops in India-held Jammu and Kashmir (J&K) in February 2019?" as Malik said in an interview with Karan Thapar last week. Dawn. On 14 February 2019, a massive car bomb driven by a suicide bomber killed 40 members of the Central Reserve Police Force (CRPF) at Pulwama in J&K. wikipedia. On 26 February, Indian Air Force planes bombed an alleged terrorist training camp at Balakot in Pakistan, wikipedia, which was used by Modi to win an absolute majority in the Lok Sabha in the general election in April-May 2019, wikipedia. Whether the bombing actually killed anyone, or even, whether there was any terrorist camp there at all, has been disputed. Malik said that the CRPF had asked for aircraft to ferry the soldiers but this was denied and when he told Modi about it he was told to keep quiet. The Wire. Families of the dead want to know the truth. They have the right to know if their sons died because of callous indifference. But then, Indian lives are cheap. "An Indian court has acquitted 68 people accused for the murder of 11 Muslims in the 2002 Gujarat riots." BBC. "Of 86 accused, 17 died and one was discharged since the hearing first began in 2009." Meanwhile, Congress leader Rahul Gandhi has been sentenced to 2 years in prison for defamation of the prime minister by a court in Gujarat. India Today. "Three men accused in the 2020 Hathras gang-rape-murder case, which sparked protests across the country, were acquitted by a court in Uttar Pradesh ( also ruled by the BJP)...while the main suspect was convicted of culpable homicide not amounting to murder, officials said." NDTV. Meanwhile, "Two months after the Income Tax (I-T) Department conducted 'survey operations' in a tax evasion case, the Enforcement Directorate (ED) has registered a case against newscaster BBC India for foreign exchange violations." DH. This is in retaliation to a documentary on Modi by the BBC which was broadcast in the UK. Strangely, ED has been completely inactive on Mr Gautam Adani who was accused by the Financial Times of investments through a number of offshore shell companies controlled by members of his family. The Wire. This gives suspicion of 'round tripping'. The Financial Times stood by its article and refused to take it down. We Hindus are not rapists and murderers. But, the world may be thinking so. 

MNCs and students.

Apple opened its second store in New Delhi days after opening its first in Mumbai on 18 April 2023. CNBC. "IPhone maker Apple is likely to double the employment base at its contract manufacturers in India to around 2 lakh soon, according to government sources. As per the sources, Apple CEO Tim Cook has sought government support to widen its component supplier base in India." TOI. 'Government support' would mean some sort of tax concession. "UK-based coffee and sandwich chain Pret a Manger is set to become the latest high-profile Western brand to launch an outlet in India. The firm will open its first shop in India's financial hub Mumbai on Friday (today)." BBC. Foreign companies starting up in India is good news but, to put it in context, "Between 2014 and November 2021, up to 2,783 foreign companies left India, commerce and industry minister Piyush Goyal told parliament. These include Metro AG, Holcim, Ford, Royal Bank of Scotland, Citibank, Harley-Davidson, among others." qz.com. These are famous names and would have employed tens of thousands of people. "Over the past few years, foreign businesses exiting India have outnumbered those entering it. Since 2018, the number of such companies has constantly risen, with the total coming up to 559," while "Up to 469 entered the country during this period, with 2022 seeing an all-time low." qz.com. "In India, for example, MNCs have exited due to arbitrary tax regime, accumulated losses, over capacity, land acquisition issues and lack of expected growth due to market anomalies. In the case of some companies, the decision to leave India was attributed to multi-nation strategy to get out of non-profitable operations and focus on easier markets." BT. And, where there is desperation there is bound to be exploitation. "Business is booming in India's $117 billion education industry and new colleges are popping up at breakneck speed. Yet thousands of young Indians are finding themselves graduating with limited or no skills," so that, "Desperate to get ahead, some of these young people are paying for two of three degrees in the hopes of finally landing a job." ET. Sadly, two or three useless certificates are as worthless as one. Faced with a bleak future some seek luck abroad. Here too sharks await. In march, "Over 700 Indians in Canada face deportation after their college entrance offer letters, on which they entered the country on a study visa three to four years ago, were discovered to be false, according to reports." India Times. "At least five Australian universities have placed bans or restrictions on students from some Indian states, amidst a surge of fraudulent applications from South Asia seeking to work - not study - in this country, according to a media report." ET. Punjab, Haryana, Uttar Pradesh, Rajasthan and Gujarat are among 8 states named. "As many as 1.49 lakh (149,000) Indians were detained while trying to unlawfully enter the US between February 2019 and March 2023, according to the US Customs and Border Protection data." The Wire. In recent months, several families from Gujarat have died while trying to cross illegally into the US. DW. "The US Census Bureau estimates that around 587,000 undocumented migrants from India currently live in the US." It's a good thing they do not give us a bill for the cost of detection and deportation of illegal Indians. Could run into billions of dollars. 

What to do?

"India is poised to overtake China as the world's most populous nation, with almost 3 million more people than its neighbor by the middle of this year, data released...by the United Nations showed." "India's population by mid-year is estimated at 1.4286 billion, against 1.4257 billion for China - 2.9 million fewer," while "The United States is a distant third, with an estimated population of 340 million as of the end of June, the data showed." "People under the age of 25 account for more than 40% of India's population." Pew Research. Which means that "roughly one-in-five people globally who are under the age of 25 live in India. Looking at India's age distribution another way, the country's median age is 28. By comparison, the median age is 38 in the United States and 39 in China." "No country is likely to challenge India in size for centuries," ET. "The physical needs of nearly a billion and a half people are imposing a terrible strain on India's environment. But as the country lifts itself from deepest poverty, it is no longer subject to famines of old." "The country needs about 9 million new jobs every year just to keep pace." "India has one of the world's lowest rates of formal employment for women: about 1 in 5. China's is almost double that rate, higher than the United States' and the world average." "Bloomberg Economics says India needs to advance on four broad fronts - urbanization, infrastructure, up-skilling and broadening its labor force, and boosting manufacture to fully cash in on its demographic dividend and reshape the global economy in the process." ET. "India's population could start declining in 2047 and fall to 1 billion people by 2100, according to UN estimates." "India needs both manufacturing and services," wrote Somnath Mukherjee. "China, the largest factory of the world, with a manufacturing output of $5 trillion, employs around 83 million workers in manufacturing." While, "half of its workers are employed in services." Services create more jobs than manufacturing but, unfortunately, most services are not tradable. A barber or a chef in India cannot earn foreign exchange. India needs manufacturing to manage our current account deficit (CAD) which "has been a perpetual policy constraint for the country since independence". To employ people they need to have education and skills. "Yet thousands of young Indians are finding themselves graduating with limited or no skills," so that, "Desperate to get ahead, some of these young people are paying for two or three degrees in the hopes of finally landing a job." In a country which gave Sundar Pichai of Alphabet Inc. and Satya Nadella of Microsoft Corp., half the graduates are unemployable. In search of jobs, "India is in throes of a massive move to its cities - the second largest rural to urban migration in human history." BBC. Even those with skills are feeling pain as the global economic growth slows down from 3.4% in 2022 to 2.8% in 2023 and then to 3.0% in 2024, with growth in advanced economies slowing from 2.7% in 2022 to 1.3% in 2023. IMF. As a result, "A funding squeeze at Indian startups that has already led to layoffs and delayed stock listings is set to worsen as investors reckon with stretched valuations and faltering consumption growth, likely laying the ground for industry consolidation." Reuters. 'Consolidation' is a soothing word for job losses. Young people spend years appearing repeatedly in exams to somehow land a government job - the most secure, the most highly paid and with the most perks. ET. The largest population. Perhaps, a mixed blessing. 

A phone with an 'i'.

"Apple opened its first store in Mumbai, India. Located at the Jio World Drive mall in the Bandra Kurla Complex area, the store is the first of the two outlets Apple to open in India. Apple CEO Tim Cook was at the store to officially welcome the customers as the doors opened at 11 am. TOI. "Tech giant Apple has clocked in nearly $6 billion in sales in India in the year through March 2023, according to a Bloomberg report.This, compared with a revenue of USD 4.1 billion in the year to March 2022, translates to a revenue jump of about 50 percent." TN. "Apple has assembled more than USD 7 billion worth of iPhones in India in the last fiscal year, the report said." "Apple has very little market share in India," which is dominated by brands such as Samsung and Xiaomi. CNBC. According to Neil Shah, partner at Counterpoint Research, "Smartphones priced above $400 now account for 10% of total volumes of handsets shipped versus 4% before the pandemic." But they account for 35% of market revenue. "Apple shipped about 6.5 million iPhones in India in 2022, compared to around 50 million each year in both the US and China, according to Counterpoint Research." Why the euphoria? "ET in June 2016 had reported that Apple had no intentions to open its stores in India if the Central government didn't exempt it from sourcing materials locally." "In August 2019, India finally amended the rules for single-brand licence holders to include exports and contract manufacturing to be counted in the mandatory 30% local sourcing norm over a period of five years." Apple's change of heart may have been precipitated more by China's zero Covid policy which disrupted global supply chains over two years. In May 2022, "China's lockdowns to contain Covid have snarled operations at the world's largest port in Shanghai and stalled activity in major cities, affecting the supply chains of businesses from Tesla Inc to Apple Inc." ET. In November 2022, "Protests have erupted at the world's biggest iPhone factory in the Chinese city of Zhengzhou, according to footage circulated widely online." BBC. "Footage shared on a livestreaming site showed workers shouting: 'Defend out rights! Defend our rights!'." "Foxconn, a Taiwanese firm, is Apple's main subcontractor and its Zhengzhou plant assembles more iPhones than anywhere else in the world." Also, the rich people of India have become much richer in recent years because of a policy of negative real interest rates (The Hindu) which transferred wealth from savers to borrowers. "The pandemic has left a clear split running down the middle of India's consumer demand." ET. A survey by PwC found that "63% of Indian consumers are tightening expenditure on non-essential goods and services, while 74% of the Indian respondents said they were worried about their personal financial situation." That still leaves an awful lot of people who can throw over Rs 70,000 (ET), on a phone. A virus doesn't distinguish between rich and poor. Policies do.

De-dollarization, but not the RMB.

"US Treasury Secretary Janet Yellen has said economic sanctions imposed against Russia and other countries by the United States put the dollar's dominance at risk as targeted nations seek out an alternative." News18. "Of course, it does create a desire on the part of China, of Russia, of Iran to find an alternative," she said. "But the dollar is used as a global currency for reasons that are not easy for other countries to find an alternative with the same properties." "In a Monday note, strategists Joana Freire and Stephen Jen calculated that the greenback accounted for about two-thirds of total global reserves in 2003, then 55% by 2021, and 47% last year." BI. This 8% drop in one year is because of "sanctions taken by the US and its allies against Moscow". The euro's share as a reserve currency jumped by 5% but, "China's yuan, meanwhile, continued to gain at its usual pace and didn't see a big spike as a global reserve currency last year. To be sure, no other currency is set up to challenge the dollar's dominance in international trade." 'In recent years, several countries and regions have embarked on the path towards dedollarisation, driven by a combination of geopolitical, economic, and strategic considerations." Notably China, Russia, Brazil and the European Union. India Times. "De-dollarization has begun as recent trade deals elevate rivals, but the greenback is likely to remain a global currency, according to economist, Peter C Earle." BI. "Earle's note comes as China has actively established agreements with countries such as Kazakhstan, Pakistan, Laos and Brazil to use the yuan for cross-border transactions, replacing the dollar." But the yuan will not replace the dollar because "The yuan is only allowed to trade in a 2% range against a midpoint," and "the Chinese authorities also decide on what capital can flow out of the country, this makes the yuan unreceptive to free market flows." In 2016, "Effective October 1, the IMF is adding the Chinese renminbi (RMB) to the basket of currencies that make up the Special Drawing Right, or SDR." International Monetary Fund. "The RMB joins the SDR basket in addition to the previously included four currencies - the US dollar, the euro, the Japanese yen, and the British pound." But, hopes that the yuan would become freely traded were dashed quite quickly by Chinese authorities. In 2022, "According to SWIFT, in October the dollar was the top currency used in global payments with a 42.1% market share, followed by the euro (34.4%), the British pound (7.85%), the Japanese yen (2.96%) and then the renminbi at 2.44% - its lowest point in a year." Forbes. "The recent driver of renminbi internationalization is the growing China-Russia economic relationship." The Chinese government is terrified of free international trade. In 2015, "The Chinese government has spent 1.5 trillion yuan ($236 billion) trying to prop the country's stock market, according to analysis by Goldman Sach's." CNN. "As long as there is capital control, there will be severe hindrance for the currency to be accepted by the international market," says Hui Feng. "There will be no global status for the currency." If China with a $17 trillion economy and foreign exchange reserves of $3.1332 trillion in February 2023, CEIC, does not dare to let the yuan trade freely, India should stop dreaming about trading in rupees. India will not accept the RMB and Pakistan won't accept the rupee. At least, officially. Status quo.             

Lamborghini and free food.

"In February, a penthouse in a Worli (Mumbai) luxury tower was sold to industrialist BK Goenka, chairman of Welspun Group, for Rs 240 crore (Rs 2.4 billion)." TOI. Within a month, "A triplex in an under- construction tower at Walkeshwar in south Mumbai was sold for Rs 3.69 billion." "Real estate experts say luxury housing - defined as houses priced over Rs 1.5 crore (Rs 15 million) - made up over 15% of the 63,710 units sold in the NCR (national capital region) last year." TOI. "Experts say the demand for luxury and ultra-luxury (priced over Rs 3.5 crore in the NCR) housing is likely to continue despite rising interest rates, primarily driven by the aspiration of home ownership." On the other hand,"With the pool of affordable homes shrinking rapidly, mid-segment buyers in metros like Hyderabad, Bengaluru, Pune and Chennai are pushed to the fringes. As houses in the Rs 50 lakh-60 lakh (Rs 5-6 million) bracket are at least 30-40 km away from  city centers, the middle class is left with two choices: commute for hours both ways or pay a fortune towards rent to stay in the city." TOI. "According to a recent Anarock report, the share of affordable housing across seven Indian cities dropped 20% during the first half of 2023." "Because big homes bring in big bucks, reputed builders are launching only mega ventures with a base price of around Rs 1.5 crore." "While the lower end of the market is eking out a living after the pandemic's economic shocks, the other end comprising upwardly-mobile Indians in the metros and bigger towns has been shopping as if there's no tomorrow." TOI. "The class divide has never been more pronounced in the market." "Lamborghini sports cars, which retail upwards of Rs 4 crore (Rs 40 million), are fully sold out for this year in India." "Unlike rural areas, almost half the workers in urban areas are regular workers who receive regular wages/salaries," wrote Prof Himanshu. "While wage earnings of casual workers in urban areas increased by 3.3% per annum between 2017-18 and 2020-21," "the earnings of a regular worker in the April-June quarter of 2021 were 3% lower than in the same quarter of 2018." "Essentially, a regular worker was earning 14% lower wages than a decade ago." Not just Lamborghinis, an IMF working paper by Bhalla, Bhasin and Virmani has shown that extreme poverty, based on the World Bank's extreme poverty line of consumption of $1.9 per day, has also disappeared to an insignificant 0.86% of the population, wrote Swaminathan SA Aiyar. Others differ on the level of abject poverty but, "all show that poverty has plummeted after the economic reforms of 1991 that helped accelerate GDP growth. Clearly fast growth is the best poverty alleviator." Poor people are no longer poor because of free food grains to over 800 million people. NDTV. Using spreadsheet simulations, "at India's current rate of growth (5.9%), we would achieve a $5 trillion economy by 2029-30, and a $10 trillion economy in the 'upper middle-income' bracket by 2041-42. But we would still be far from joining the high-income countries by mid-century, by when our demographic dividend would be exhausted," wrote Alok Sheel. In all this debate about economic growth in India, along with rising wealth of people, no one talks about inflation. While China's consumer inflation fell to below 1% in March despite opening of the economy, ET, we in India are happy that inflation rate fell to 5.66% in the same month. ET. Since India is never going to be a manufacturing giant like China, a growing economy will result in soaring prices as consumer demand rockets, which will increase the number of poor. Lamborghini and free food. Unlikely to change. 

The fig leaf could fall.

"The Central Bureau of Investigation (CBI) has summoned Delhi Chief Minister Arvind Kejriwal for questioning in the liquor policy case." India Today. In March, "The Enforcement Directorate...arrested former Delhi deputy chief minister Manish Sisodia on money laundering charges in excise policy case after questioning him inside Tihar jail." HT. "Two months after the Income Tax (I-T) Department conducted 'survey operations' in a tax evasion case, the Enforcement Directorate (ED) has registered a case against news broadcaster BBC for foreign exchange violations." DH. In February, "BBC offices in India have been searched as part of an investigation by income tax authorities. The searches in New Delhi and Mumbai come weeks after the broadcaster aired a documentary in the UK critical of Indian Prime Minister Narendra Modi." BBC. "The British government has strongly defended the BBC and its editorial freedom in Parliament after the Income-Tax Department's survey operations on the UK-headquartered media corporation's Mumbai and Delhi offices." NDTV. "Now data about FDI (foreign direct investment) remittance from India has revealed that almost 50 percent of the foreign funding for Gautam Adani's firms came from companies linked to his relatives. Between 2017 and 2022, the port to airport conglomerate received $5.7 billion in overseas investments, of which $2.6 billion came from entities connected to the Adani family." FPI. "The Financial Times has said that it will not be complying with the Adani Group's demand to take down an article" which originally reported the story, The Wire. "The Union finance ministry turns remarkably coy when it is time to go after a labyrinth of shell companies allegedly linked to Vinod Adani, elder brother of Gautam Adani, and housed in a variety of tax havens." The Telegraph. "The reason for this benevolence is as bizarre as it is shocking: the Modi government has claimed that 'an offshore shell company is not defined in the Acts administered by the ministry of finance'." "A Chinese company connected with the Adani Group is involved with building critical infrastructure in India." Adani Watch. "It operates from premises owned by Adani Enterprises, the flagship of Adani Group, but is owned by Chang Chien-Ting (also known as Morris Chang), son of Chang Chung-Ling, who has been director of many Adani companies over the years and is said to a business associate of the 'elusive' Vinod Adani." Meanwhile, Former Governor of Jammu & Kashmir Satya Pal Malik "revealed that the attack on the Central Reserve Police Force convoy in Pulwama (wikipedia) was the result of 'incompetence'," and that "the CRPF had asked for aircraft to transport its jawans but was refused by the Union Home Ministry." The Wire. "More importantly, he said all these lapses were raised by him directly when Modi called him from ouside Corbett Park shortly after the Pulwama attack. He said the prime minister told him to keep quiet about it and not tell anyone." The fig leaf could be blown away by more buffets. Is next year's election becoming fraught? Nemesis awaits.            

Different chains.

"India's foreign exchange reserves jumped to $584.76 billion for the week ended April 7, the highest in nine months, the Reserve Bank of India's (RBI) statistical supplement showed." Reuters. "That is an increase of $6.3 billion from the previous week." The rupee has strengthened to below 82 to the dollar, xe.com, which is a big jump from 83.02 to the dollar in October 2022. ET. "India's exports rose 6% to $447 bn in 2022-23 as against $422 bn in 2021-22," while, "the export of goods and services together scaled 'new heights' and has increased by $14 billion to $770 billion in 2022-23 as against $676 billion in 2021-22." BT. "The overall imports of goods and services have touched $892 billion and it reflects the country's economic activities are growing and that has supported exports." Naturally, "India's current account deficit, a key indicator of the balance of payment position, fell down to $18.2 billion or 2.2 percent of GDP in the December quarter of the current fiscal, according to the RBI data." BT. In January, "India is set to post a balance of payment deficit for the second straight year in the next fiscal, which would be the first such instance in two decades, Standard Chartered Bank said." Reuters. "India seeks to be more involved in world supply chains and serve as an alternative to China through output-incentive plans and the growth of its domestic consumer market, Finance Minister Nirmala Sitharaman said." "Production-linked incentive (PLI) schemes covering 13 manufacturing sectors including semiconductors 'are bringing global value chains to India', Sitharaman said." Vietnam was expected to replace China in supply chains, but it hasn't happened, wrote Anjani Trivedi. "For one, the world's factory floor isn't going to be elbowed aside any time soon. Chinese companies are effectively exporting their supply chains and facilities to Europe and Mexico in a bid to ride the nearshoring trend." India is dependent on imports from China. "As India looks to reduce its dependence on China for imports, a new study found that Chinese goods are not only critical across various sectors, but in some cases 'preferred' by India manufacturers," The Wire. " "Therefore, Chinese products were also boosting India's exports in key sectors, including inorganic chemicals, pharmaceuticals, iron and steel." "In most nations, the need for scale is obvious. Not so in India, which remains blinded by its huge domestic market," wrote Mihir Sharma. "Policymakers at the highest level are keen to debate geopolitical shifts and India's balancing role in the global order," but "When it comes to trade, decision-making is left to middle-level bureaucrats - or, worse, to chambers of commerce who have never seen a tariff they didn't want to double." German businesses are rethinking their excessive dependence on China and are looking at India, wrote Vijay Gokhale. "German industry recognises that great changes have occurred in India's economic landscape over the recent years in terms of both physical infrastructure and laws and regulations, but their experience with the local bureaucracy is still a matter of concern." So called, democratic India has more obstacles than communist China. China has the supply chains. India has chained people.   

The paradox of helping the poor.

"The US central bank has raised interest rates again, despite fears that the move could add to financial turmoil after a string of bank failures." BBC. This "rate rise is the ninth in a row by the Fed. It lifts its key interest rate to 4.75%-5% up from near zero a year ago - the highest level since 2007." "US consumer prices barely rose in March as the cost of gasoline declined, but stubbornly high rents kept underlying inflation pressures simmering, likely ensuring that the Federal Reserve will raise interest rates again next month." Reuters. Year-on-year consumer price (CPI) inflation increased by 5% in March compared to 6% in February. So now, both the CPI inflation rate and the interest rate are at the same level. On the other hand, "CPI-based retail inflation in India eased further to a 16-month low of 5.66 percent in March as food prices moderated on account of lower vegetable costs, offset in part by surging cereal prices. Inflation stood at 6.95 in March 2022." ET. Firstly, just because it was less terrible than last year is no cause for celebration and, secondly, this year's price rise is on top of last year's rise. This compounding of inflation means that prices soar even if the rate seems to be falling. In its April meeting, "The Reserve Bank of India's (RBI's) rate-setting panel, Monetary Policy Committee (MPC),...stopped its rate hike cycle by retaining the key lending rate at 6.5%." ET. At the same time the RBI forecast the average inflation rate at 5.2% for 2023-24, down from 5.3% in February. This means that, while the US Fed is still trying to achieve its target of 2% inflation rate, the RBI is happy with 5.2%. That is because the Fed is concerned that high inflation hurts the poor. "Drawing upon recent household survey data, we show that high inflation is disproportionately hurting low-income households, including Black and Hispanic households and renters. It is noteworthy that the survey results do not support the suggestion of Nobel Laureate Paul Krugman that low income families 'have actually been hurt less by inflation than families with higher incomes' because the wages of low-income families rose faster." dallasfed.org. The Dallas Fed has actually carried out a survey of how the poor are coping with rising prices. No such studies are done in India. Why? Because, over 800 million people are being supplied with free food grains under the National Food Security Act, at least till December 2023. NDTV. And, relatively low borrowing costs help the rich who are able to buy assets with cheap loans. "According to rating agency ICRA, home sales in the first half of the current financial year have shown a 49% increase year-on-year - this is the highest number of sales in the past 10 years, data show." FE. While the share of affordable housing dropped by 21%, sales of apartments priced at over Rs 15 million doubled in the first half of 2022. Sales of luxury cars have been rising in the March quarter. Verve Times. Passenger vehicle sales increased by 26.7% in 2022-23, but, while "SUVs accounted for more than half of the total passenger vehicle sales during the year," "The total number of small entry-level cars sales stood at around 252,000 units in FY 2022-23, which is less than half of 5,83,000 units sold in 2016-17." DH. Paul Krugman considers himself to be a modern liberal, equivalent to social democrat in Europe. wikipedia. India is a socialist country. wikipedia. Socialists want to help the poor. But socialism helps the rich. Paradox.

Who should be Caesar's wife?

Prime Minister Narendra Modi has expressed his wish to see a "Congress-mukt Bharat", which means, 'an India free of the Congress Party'. ANI. With that in view, Congress leader Rahul Gandhi is being targeted with a raft of court cases by various people who have suddenly discovered that they have been defamed by Mr Gandhi. India must hold a general election by May 2024. wikipedia. "Indian opposition leader Rahul Gandhi has been sentenced to two years in prison in a criminal defamation case. The Congress MP was convicted by the court in Gujarat state for 2019 comments about Prime Minister Narendra Modi's surname at an election rally." BBC. Immediately, "Mr Gandhi was disqualified as a Lok Sabha MP following his conviction in the criminal defamation case over his 'Modi surname' remark." TOI. But, "Rahul Gandhi...sought to link his disqualification from the Lok Sabha as a fallout of his questions on the Adani Group's functioning and political 'patronage' for the infrastructure conglomerate while vowing to carry on with his 'fight to defend the democratic process' - even at the cost of 'life-long disqualification' from Parliament or 'imprisonment'. On BJP's demand for an apology, he once again threw his favorite line: 'My name is not Savarkar. I am Gandhi. I won't apologise'." ET. Now, Savarkar's grandson, Satyaki Savarkar has filed a defamation case against Rahul Gandhi. India Today. Vinayak Damodar Savarkar was a politician who joined the Hindu Mahasabha and promoted Hindutva (Hinduness). He was sentenced to life in prison by the British and was imprisoned in the Cellular Jail at Andaman and Nicobar Islands. wikipedia. "In the end may I remind your honour to be so good as to go through the petition for clemency, and to sanction it for being forwarded to the Indian Government?" Savarkar wrote in his petition. Counterview. 'Clemency' means 'an act or deed showing mercy or leniency'. dictionary.com. "Therefore if the government in their manifold beneficence and mercy release me, I for one cannot but be the staunchest advocate of constitutional progress and loyalty to the English government which is the foremost condition of that progress." 'Beneficence' means 'the doing of good; active goodness or kindness; charity'. dictionary,com. "Whether you believe it or not, I am sincere in expressing my earnest intention of treading the constitutional path and trying my humble best to render the hands of the British dominion a bond of love and respect and mutual help." 'Dominion' means 'sovereignty'. Promising "love' and "mutual help" means promising allegiance to the British rule. Meanwhile, The Supreme Court ruled that the PM Cares fund does not need any audit by the Comptroller and Auditor General of India (CAG) because it was collected through voluntary donation by the public. HT. Surely it needs an audit because precisely it is public money? On 31 March, "The Gujarat high court...ruled that the Prime Minister's office need not furnish the degree and post-graduate degree certificate of Prime Minister Narendra Modi." HT. One would have thought that the prime minister would be pure as 'Caesar's wife'. But, it seems to apply only to others.        

The smell test of demand.

In China, "The March consumer price index (CPI) - the main gauge of inflation - came in at 0.7%, down from the one percent seen a month earlier, according to the country's National Bureau of Statistics (NBS)." ET. "The producer price index (PPI), which measures the cost of goods leaving factories, shrank for the sixth consecutive month, with prices falling 2.5% - indicating lower margins for business." "The cost of fuel for transport fell 6.4 percent." On the other hand, "India's retail inflation declined marginally to 6.44 percent in February as against 6.52 percent in January, data released by the Ministry of Statistics and Programme Implementation said." "India's wholesale price index (WPI)-based inflation (similar to PPI in China) eased to 3.85 percent in February on an annual basis from 4.73 percent in January, stated provisional data from Commerce Ministry." ET. So input prices are falling in China while they are still rising in India on top of last year when WPI inflation was rising at over 10%. in.investing.com. The cost of fuel for transport fell 6.4% in China, while the price of diesel, used by all trucks in India, is Rs 89.62 per liter in Delhi and higher in Chennai, Kolkata and Mumbai. ET. Excise duty on one liter of diesel charged by the central government is Rs 15.8, and VAT charged by the state government in Delhi is Rs 13.07, for a total of Rs 28.87. mycar-helpline.com. Excise duty must have increased because, "Indian refiners continue to lap up Russian crude at a discount to other oil grades. Since the Russia-Ukraine conflict began in February 2022, Russia's share of India's imports has risen from less than 1% to 34%." TN. China has yet to see a strong rebound in consumer spending, according to major companies. CNBC. "The greater than expected softness in the consumer price index 'casts doubt on the strength of domestic demand recovery in the household sector'," Zhiwei Zhang, president, Pinpoint Asset Management, said." In India," Consumer demand is expected to stay low over the coming quarters, as inflation continues to rise, creating a further slowdown phase for the startups in the country, states a new report by market research firm Redseer Strategy Consultants." ET. "Core inflation has remained over 6 percent for 17 straight months, a sticky concerns for policymakers." ET. As a result, "As per PWC's Global Consumer Insights Pulse Survey, 63 percent of consumers have changed their non-essential spending habits in the face of the current economic climate, with 20 percent stopping all their non-essential spending." So China is experiencing disinflation because of low demand but prices continue to rise merrily in India despite lower purchasing power of a much poorer population. Doesn't pass the smell test, does it? Fishy. Very.   

A small percent is still large.

In January 2023, "Chief Economic Advisor V Anantha Nageswaran said...that the Indian economy will be USD 3 trillion by the end of 2022-23 fiscal and is expected to be USD 7 trillion in the next seven years." ET. Now the Deutsche Bank has echoed this optimism. "India is on track to becoming a $7 trillion economy by 2030 powered by the triple engines of rapid financialisation, clean energy transition and digital revolution, according to a report by Deutsche Bank." BI. In addition there is the loan scheme for starting a business, PMMY. "As India's Pradhan Mantri Mudra Yojana (PMMY) completed eight years on 8 April," "Data as on 24 March 2023 puts the scheme's cumulative disburse amount at Rs 22.65 trillion," wrote Soumya Kanti Ghosh. The loans are labeled as: "Shishu (for loans up to Rs 50,000), Kishore (Rs 50,001- Rs 500,000) and Tarun (Rs 500,001 - Rs 1 million)." The share of Shishu loans is the highest." "Overall, the PMMY has achieved its objectives of equitable and fair distribution of benefits during its ninth year of operation by fostering self employment across social groups." At today's prices Rs 50,000 can only start a business frying pakoras as the Prime Minister advised in 2018. Ghosh praises the scheme for the near Rs 23 trillion distributed to various disadvantaged groups, but is curiously silent on how many such businesses are still operating, how much they are earning and what amount of loans have been repaid. "In an interview with the Financial Times newspaper recently, the chief executive of Japan's Daikin, the world's largest maker of air conditioners, Masanori Togawa, said that India 'would turn into a market as giant as China in the future, as the middle-class and wealthy are growing exponentially'." Mint. In 2015, taking the US as a benchmark, $13,700 was taken as a cutoff defining the middle-class, which converted to Rs 900,000 or slightly less than a salary of Rs 40,000 for two years. "On this criteria, the number of middle-class adults in India was estimated at 24 million - just around 3% of the population." The median wealth, the mid-point of the poorest to the richest, was $3,457 in 2021, but the average wealth per adult was $14,804. "Thus a 'middle class' person in India is not really middle class in that sense - they are pretty much in the top 10%, if not 5% of the Indian wealth distribution." The Periodic Labor Force Survey (PLFS) 2019-20 showed that people earning Rs 25,000 per month are in the top 10% of the population. TOI. However, the current population of India is in excess of 1400 million, worldometer, and 5% of that would be 70 million, which is higher than the entire population of the UK, at around 69 million, worldometer. And, not everyone is rich or middle-class in the UK. So, even though 95% of Indians are poor in wealth, Mr Togawa can still sell his air conditioners to around 70 million Indians. Not bad, is it?