Gang of friends.

On 29 October, the Reserve Bank of India (RBI) revealed "it had shipped 102 tonnes of gold from the Bank of England's vaults in London to secure locations in India." "Since September 2022, RBI has quietly brought back 214 tonnes of gold, driven by the need to safeguard holdings amid growing geopolitical uncertainties." Of the 855 tonnes of gold reserves, 510.5 tonnes are now stored in India. ET. At least, this will save a lot of foreign exchange. It costs 50 pounds per year to store 1 kg gold bar in London. Gold Investments. The US has a habit of imposing sanctions on nations, which is supported by its friends. "Since Russia's invasion of Ukraine in February 2022, the US, UK and EU, along with countries including Australia, Canada and Japan, have imposed 16,500 sanctions on Russia." "Foreign currency reserves worth $350bn - about half its total reserves - were frozen." BBC. Russia is not the only nation to have its funds plundered by this gang of rapacious countries. Iran has lost $100 to $120 billion worth of assets (wikipedia) and land-locked Afghanistan (google.co.in) has lost a total of at least $9 billion (wikipedia). The BRICS nations discussed a parallel system, called BRICS Pay, to bypass the dollar and the SWIFT cross-border payment system, at their summit at Kazan in Russia during 22-24 October. wikipedia. Russian President Vladimir Putin calls it the "BRICS Bridge", and "Controversially, it may borrow concepts from a different project called mBridge, part-run by a bastion of the Western-led order, the Swiss-based Bank for International Settlements (BIS)." The Economist. "Project mBridge continues its development and has reached a minimum viable product (MVP) stage, while broadening its international reach. The project aims to explore a multi-central bank digital currency (CBDC) platform shared among participating central banks and commercial banks." BIS. In July 2023, "The RBI has permitted 20 banks operating in the country to open 92 Special Rupee Vostro Accounts (SVRAs) of partner banks from 22 countries as part of efforts to promote bilateral trade in local currencies, the government said." ET. We don't know how successful it has been. Probably, not at all. Because, "If the underlying flows of capital and trade between two countries are unbalanced, which they usually are, they will have to accumulate assets or liabilities in each other's currencies, which may be unappealing." The other problem is that the economies of BRICS nations are small, except for China with a nominal GDP of $18 trillion (worldometer), whereas the nominal GDP of the US was $27 trillion in 2023 (World Bank) and that of the Euro area was $15.5 trillion in 2023 (World Bank), giving a combined GDP power of about $43 trillion. If the US and the Euro countries, along with the other members of the gang of plundering nations, refuse to trade with BRICS Pay, it will soon collapse. However, India has no quarrel with the US. "India is a strategic partner with whom it engages in a full and frank dialogue the United States said" in July 2024. NDTV. So why are we so anxious to find an alternative to the US dollar? Last month, Canada's Foreign Minister Melanie Joly said "everything is on the table", hinting "at the possibility of imposing sanctions against India following a diplomatic fallout over the killing of pro-Khalistani leader Hardeep Singh Nijjar." Surely, we are not scared of Canada with a nominal GDP of just $2.2 trillion (worldometer) and a defence force consisting of just 68,000 active personnel (wikipedia)? Canada has friends. Can India count on China? Happy Diwali to everyone in the world.      

Demand for premium.

"The United States (US), France and Armenia have emerged as the top three destinations for Indian defence exports, with Armenia in particular being the biggest client of 'finished' Indian weapons and equipment like 155mm artillery guns and the Akash air defence missile and Pinaka multi-launch rocket systems, The Times of India reported." India's defence exports were worth Rs 210.83 billion ($2.63 billion) in 2-23-24. BS. Armenia was routed by Azerbaijan in a short war in September 2023, ceding control of Nagorno-Karabakh in a matter of days. wikipedia. Azerbaijan obtained a lot of its weapons from Turkey. Reuters. India's merchandise exports rose slightly to $34.58 billion in September from $34.41 billion a year ago. However, exports have been declining every month from $38.13 billion in May. Trade deficit was lower at $20.78 billion. Mint. India is largely dependent on China. "India's exports to China in 2023-24 stood at USD 16.65 billion, while imports aggregated at USD 101.75 billion, leaving a trade deficit of over USD 85 billion." ET. "Formal job creation under the Employees' State Insurance Corporation (ESIC) went up by 6.8% in August to 2.07 million compared to 1.94 million in August 2023." ET. "India's formal job market witnessed a decline in August with all three social security schemes recording a fall in new subscribers, data released by the Ministry of Statistics and Programme Implementation (MoSPI) showed." ET. More jobs, or less? Never mind. The Reserve Bank of India (RBI) "has stuck to its forecast that India's economy will expand 7.2% in the year ending March 2025 despite recent evidence showing activity is starting to taper off. The RBI's outlook is far more optimistic than the 6.5%-7% growth projected by Prime Minister Narendra Modi's government." HT. "In the 1950s, manufacturing was about 10% of India's economy. Since 2010, it has averaged about 17.7%." "The share of manufacturing has never reached even 20%." "The key reason is this: As incomes rise, our consumption patterns tend to shift towards services." "As demand for services increases, the local production of services must also rise, since these cannot be imported, unlike manufactured goods," wrote Prof Vidya Mahambare. "India's attempts at boosting its manufacturing sector by capitalizing on the US-China trade war have fallen short, according to a new study." "Between 2017 and 2023, India's total share in US imports rose by 0.6 percentage points to 2.7%," while Vietnam's share rose by 1.7 points to 3.7%. Taiwan increased its share by 1% and South Korea by 0.7%. ET. Quarterly earnings calls of several consumer goods companies "indicated short-term pressure on sales of essentials and mass-priced products in India, even as demand remained strong for premium and discretionary products." ET. Passenger cars in the premium category have a waiting period of up to 96 weeks, while in the volume segment some models are attracting discounts of up to Rs 450.000." ET. Mr Modi wants Indians to buy local this festival season. MC. But, it's all Chinese. Missiles are local. Are they available?

Trudeau not important.

"At a time when he has launched hostilities against India, Canadian PM Justin Trudeau is facing trouble in his own backyard, with 24 MPs of his Liberal Party rebelling against him and asking him to step down by October 28 or face consequences." TOI. Attacks on Trudeau and Canada have been relentless in the Indian media. So much so that "The Canadian government is closely monitoring social media activities of Indian journalists and media in connection with alleged foreign interference." "The report highlights that narratives posted by 'godi media' described Trudeau and Canadian institutions as 'enablers or terrorism' and accused them of 'falling into the laps of Khalistani extremists." ET. 'Godi media' was coined by veteran Indian journalist Ravish Kumar, meaning 'media sitting on lap' or 'lapdog media'. wikipedia. Attacks on Trudeau are nothing new. In 2018, when Trudeau visited India with his wife and children, they were not received at the airport by Prime Minister Narendra Modi nor by any member of his cabinet, but by a minister of state. ET. No man will forget being insulted in front of his family. Apparently, during his trip someone invited Jaspal Atwal, who was convicted of attempted murder in Canada in 1987, for dinner. But, Atwal was already in India. Why was he not arrested if he was deemed a terrorist? Trudeau was again treated badly during his visit to Delhi in 2023 for the G20 summit. India Today. Questions: 1. What is being achieved by abusing Trudeau and, 2. Will the person replacing Trudeau agree to extradite anyone that India demands? US prosecutors have named former Indian intelligence officer Vikash Yadav of being behind a failed plot to assassinate US citizen Gurpatwant Singh Pannun. "According to a US indictment, which has not been made public yet, investigators claimed to have uncovered direct links between the accused in the Pannun case and Nijjar murder." India Today. Canada blames Indian agents for the murder of Canadian citizen Hardeep Singh Nijjar in British Columbia on 18 June 2023. wikipedia. That is the reason for the attacks on Trudeau. Last month, "Canada offered New Delhi de-escalation options as well as evidence of the involvement of Indian officials in violence targeting pro-Khalistan elements in the country, according to media reports." HT. Is that a victory for India? Now that Canada has provided evidence it will get more support from its friends. "Canada's partners in the Five Eyes Intelligence alliance - the US, the UK and Australia - have backed Ottawa's investigation...and called on New Delhi to cooperate in the probe," HT. Trudeau does not have to face a general election till October 2025 (wikipedia) so he can continue to demand his pound of flesh. The government can ignore Trudeau but it is likely to have a devastating effect on Indian youth seeking to migrate to Canada as students. "As per various study abroad platforms, there's expected to be a 40-60% drop in the number of Indian students opting for Canada for studies over the next 12-15 months." FE. Sikhs prefer Canada because of the support from the sizable Sikh community there and "Factors like improved job opportunities and better prospects for employment." ET. Sikh youth stuck in India in poverty and without job prospects could become angry. Better to keep Khalistanis far away in Canada than breed them here. Trudeau may not be important but Canada has friends. Diplomacy is influencing others through "dialogue, negotiation and other measures, short of war or violence". Britannica. Violence didn't work. Try diplomacy.

Better to be students than donkeys.

 "There is another new disease among children - that of going abroad. The child enthusiastically wants to go abroad, sees a new dream, but there is no assessment of which institution or country he is going to," said Vice President Jagdeep Dhankar. Why do 78% of wealthy Indian parents risk their retirement savings to help their children go abroad? ABP. "We run nine schools, with a total of about 2,700 students. About 20% of our students do not achieve foundational literacy and numeracy (FLN) by grade 3, and 6% not even by grade 5. Earlier, 40% of our students were not achieving FLN by grade 3, we had to work hard to bring it down to 20%, and we seem to be stuck there," wrote CEO of Azim Premji Foundation Anurag Behar. And yet, "Simply put, our schools are better resourced and supported than most schools in India, other than the elite ones that make up 1-2% of the total." Even in the elite schools students are being sabotaged by 'grade inflation'. "Simply put, grade inflation involves awarding higher grades than students really deserve through artificially heightened schemes." After schools had been closed for two years due to Covid, and "despite the evident learning gaps," "CBSE classes 10 and 12 boards in 2021 showed a pass percentage of 99.04% and 99.37% respectively, and those scoring above 95% jumped to 38% in class 10 and 81% in class 12," wrote John J Kennedy. "Grade inflation in India is a consequence of competition between Boards." "Colleges select students based on their marks in Board exams" and Boards compete in awarding higher marks to their students to give them a chance of getting a seat in college, wrote Sridhar Rajagopalan. According to the Economic Survey of 2023-24 "51.25% of India's graduates are deemed employable." According to the Periodic Labor Force Survey (PLFS), "youth unemployment (15 to 29 years) has declined from 17.8% in 2017-18 to 10% in 2022-23," while according to the Centre for Monitoring Indian Economy (CMIE), "the unemployment rate for youth aged 20-24 soared to an alarming 44.49% in early 2024," and 29.1% of graduates are unemployed compared to 3.4% for those without formal education, according to the International Labor Organization and Institute for Human Development. India Today. Even the coveted IITs are not immune. IIT Bombay "has managed to place just 75% of its students through the campus recruitment process this year." The lowest package fell from Rs 600,000 to Rs 400,000, wrote SS Mantha & Ashok Thakur. Mr Dhankar cannot understand that children rushing abroad without "assessment of which institute or country" is an investment for the future. The vast majority pray they do not have to return to India and will do anything to stay abroad. That's why thousands of Indian students queued outside Tandoori Flame restaurant in Canada to work as waiters or service staff. HT. Those who cannot pretend to be students, pay $30,000-$50,000 to people smugglers and risk their lives across dangerous routes to get to a foreign country. In 2022-23, 96,917 entered the US illegally, up from 8,027 in 2018-19. CNN. They are called 'donkeys' (wikipedia). Politicians have access to taxpayer money. That's why they don't understand.  

A matter of zeros.

"There has been a cumulative 74.2% decline in income disparity coverage for those earning up to Rs 500,000 annually between fiscal years 2013-14 and 2022-23 said a State Bank of India (SBI) report." "A comparison of disparity in income during AY15 (FY14)  and AY24 (FY23) shows that there is a clear rightward shift in the income distribution curve, signifying people in lower income brackets are increasing their income to converge towards their share in population, it said." ET. 2014 was when Mr Narendra Modi first came to power as the Bharatiya Janata Party (BJP) won a majority in the Lok Sabha with 282 seats out of a total of 543 seats. wikipedia. And, SBI is a public sector bank under government control. wikipedia. Inequality in a nation is measured by the Gini coefficient. "The coefficient of the Gini index ranges from  0 (or 0%) to 1 (or 100%), with 0 representing perfect equality and 1 representing perfect inequality." Investopedia. "Nationally the value of this index was 0.30 in 1993-94, 0.35 in 2004-05, 0.36 in 2011-12. While hundreds of millions experienced the joy of exiting extreme poverty during those years, hardly any of them were even aware that inequality had risen at the same time," wrote Prof Arvind Panagariya. A villager in India "hardly cares if Mukesh Ambani adds another five billion to his wealth in a given year. But if her neighbor's wealth rises sharply while she struggles, she has sleepless nights." Prof Panagariya carefully stops at 2012, well before this government grabbed power. In January 2024, "SBI Research has calculated that Gini coefficient has declined from 0.472 during Assessment Year 2024-15 to 0.402 for AY 2022-23. pib.gov.in. So, inequality has become much worse during this government's tenure. The Household Consumption Expenditure Survey (HCES) report released recently shows that, "56% of Indians reported eating three meals a day while 43% just had two." HT. Starting 1 January 2024, the central government is to provide free food grains to 813.5 million for five years. pib.gov.in. With the total population of India at 1,455 million (worldometer), this means that 55.9% of our population need free food grains to survive. The Hurun India Rich List 2024 revealed that India has added one (dollar) billionaire every five days throughout 2023 and the total number of (dollar) billionaires has reached 334, six times more than 13 years ago. BS. One billion is 1 followed by nine zeros - 1,000,000,000. Byju's. In the Indian system 1 billion means 100 crores. Byju's. Only a minuscule number of villagers in India will be able to comprehend what one crore rupees means, let alone 100 crore dollars, but even a totally illiterate villager is acutely aware of the difference in living standards between her social level and the rich. Inequality is worse any way you slice it. The poor realise it. No matter what SBI calculates.

Bias on safety.

"CareEdge has assigned a long-term foreign currency rating of BBB+ to India, two notches higher than what's provided by other global rating agencies," wrote Rajani Sinha. S&P assigned a rating of BBB- with a positive outlook while Moody's rates India at Baa3 with a stable outlook. Trading Economics. Fitch retained its BBB- rating on 29 August with a stable outlook. BT. All the agencies rate India at the lowest investment grade, just above junk. India is a large economy with a GDP at current prices (nominal) at $3.55 trillion in 2023 (World Bank) and is expected to grow at 7% in the fiscal year 2025 and at 6.5% in FY26, according to the International Monetary Fund (IMF). The RBI projects a growth rate of 7.2% in FY25. BT. "Investment as a proportion of GDP" "is relatively high at about 33%, compared with 20-29% for similarly-rated peers." However, per capita income is low at $7,600 on the basis of purchasing power parity (PPP) compared to $18,218 for Thailand, $12,945 for Indonesia and $9,274 for the Philippines. Government debt of the Centre and states is high at 80% of GDP which means that interest on debt gobbles up 25% of revenue. India's foreign exchange reserves are high at number four in the world. wikipedia. Although, "India's foreign exchange reserves saw a decline for the third consecutive week, dipping by $2.16 billion to $688.26 billion as of 18 October, according to the RBI." ET. Government officials and politicians are unhappy with foreign rating agencies. "There are serious issues with the biased methodologies used by global rating agencies. One major issue is that around 20% of the weightage in the sovereign rating is driven by subjective indicators of governance, political stability and so on," said Sanjeev Sanyal, member of the Prime Minister's Economic Advisory Council. Forbes. These concerns may be trivial for our rulers but they govern how citizens look at future prospects and their spending habits. "India's economic pulse has slowed just as the festive season approaches." "Manufacturing has dropped, GST collections have lost steam and domestic car sales continue to skid." India Today. The Reserve Bank of India's consumer confidence survey in September 2024 showed "Current Situation Index (CSI) improved by 0.8 points to 94.7 though it remained below the threshold level of 100." "Household's median perception of current inflation index declined by 10 basis points (bps) to 8.1%." The Hindu. Inflation expectations for 3 months ahead has reduced 20 bps, from 9.4% to 9.2%, and for 1 year ahead has fallen 10 bps, from 10.1% to 10%." IIFL Securities. The household perception of current inflation was 8.1% during the RBI survey in August when the actual consumer price index (CPI) inflation rate was 3.65%. It rose to 5.49%, the highest since December 2023. Mint. The RBI projected the average inflation rate at 4.5% for fiscal 2024-25.ET. India's gold imports tripled to 140 tons in August as the government lowered the customs duty to 6% from 15%. Gold imports in 2024 could range between 750 and 850 tons, said Sachin Jain, regional CEO for India at the World Gold Council. Gold is seen as an excellent hedge against inflation and negative real interest rates. Loyalty and patriotism may earn brownie points  (dictionary.com) with our rulers for CareEdge, but if Indians are investing in gold, why should foreigners invest in India? Foreign agencies ensure they get their money back. Like we do.

Lying flat in garbage time.

"India and China have agreed on patrolling arrangements to de-escalate tensions along a disputed Himalayan border which has seen deadly hand-to-hand clashes in recent years, India's top diplomat has said." "Mr Misri, however, did not give any details about the disengagement process and whether it would cover all points of conflict along the disputed border." BBC. In June 2020, 20 Indian soldiers were killed in a sudden attack by Chinese barbarians armed with clubs with nails and other weapons at the border at Galwan Valley in Ladakh. BBC. "Prime Minister Shri Narendra Modi met with Mr Xi Jinping, President of the People's Republic of China, on the sidelines of the 16th BRICS summit at Kazan (Russia) on 23 October 2024." mea.gov.in. Why the thaw? It's not as if the Chinese have suddenly become civilized and given up on their delusional desire of conquering the whole world. "The big question is whether Xi needs support from Modi to initiate measures that would weaken the US-led economic sanctions regime on China." "In his BRICS speech Modi made it clear that he was in favor of an alternative payments system covering countries in the grouping. That must have sounded like music to Xi's ears." ET. It would be suicidal for India to accept the Chinese yuan for trading, to reduce dependence on the US dollar. To keep his people subdued Xi has to revive the economy and create jobs. "China's sputtering economy has prompted a dire, new shorthand online for pessimism about the prospects for any turnaround for jobs, incomes and opportunity: 'the garbage time of history'." "It follows another buzzword China's censors have targeted as a threat to stability since it broke into the mainstream three years ago: 'lying flat,' a call to a slacker life of limited ambition and quiet protest." Reuters. While Mr Modi and Xi are keen to find an alternative to the dollar, Chinese citizens are finding ways to convert their savings to the dollar. "Chinese residents have been illicitly moving billions of dollars out of the country," even though "The country imposes strict capital controls that caps individual purchases of foreign exchange at $50,000 a year." In the 12 months through June 2017 around $228 billion leaked out illicitly. $370 billion leaked out in the 12 months through September 2022 and more than $200 billion in the four quarters through June 2024. Mint. Even presumed friends are unable to tolerate Chinese presence. Last week, "China's consulate in Myanmar's Mandalay city was attacked with an explosive device, local media said." ET. While no one was injured or killed in that attack, on 7 October, "Two Chinese nationals have been killed and at least 10 people injured in a suspected suicide attack near Karachi airport in Pakistan." BBC. China wants help to break the shackles. We must make every effort to reduce our dependence on imports from China (ET) before trying to find an alternative to the dollar. Tighten the noose. Verily. 

Penalized for right policies.

"Andhra Pradesh CM N Chandrababu Naidu called on people in southern states to have more children, citing concerns about an ageing population." ET. "The state government is thinking of bringing a law that would make only those with more than two children eligible to contest local body elections," he said. "Govt may provide more benefits to families with more children." "Tamil Nadu Chief Minister MK Stalin has encouraged the state's residents to consider having more children following a similar suggestion by Mr Naidu." ET. Quoting an old Tamil saying which suggests "people should have 16 different types of wealth", he asked, "Why shouldn't we aim for 16 children?" "In 1971, the country's total fertility rate (TFR) was at 5.2. That is on average, 100 women had 520 children during their child-bearing years. By 1991 this had come down to 3.6." "Between March 1991 and March 2011, the country grew at 6.2% per year. In the two decades before March 1991, the country had grown at 4.3%," wrote Vivek Kaul. "TFR has fallen significantly below the threshold of 2.1 - considered the replacement level value at which the population maintains itself - in states such as Tamil Nadu (1.76), Andhra Pradesh ((1.68) and Kerala (1.79), but is still much higher in states such as Bihar (2.98) and Uttar Pradesh (2.35), according to the National Family and Health Survey (NHFS)." "TFR, both across countries and Indian states, has a strong correlation with per capita incomes, and falls with rising incomes," wrote Roshan Kishore & Abhishek Jha. Lower fertility rate creates wealth. However, it may not be just an ageing population that is bothering Messrs Naidu and Stalin. Perhaps, Mr Stalin "was alluding to the delimitation exercise due in 2026 where states like Tamil Nadu and Kerala that have done well to control their population are likely to lose their clout in terms of representation in Parliament compared to their more populous northern brethren." "The southern states are united in their opposition to the exercise being carried out purely based on population." "Whatever be the decision, states like Tamil Nadu, Kerala, Telangana, Andhra Pradesh, and to a lesser extent Karnataka, are seeing fertility rates declining rapidly," wrote Sumanth Raman. At present Uttar Pradesh has 80 seats in the Lok Sabah and Bihar has 40, higher than any of the southern states. eci.gov.in. If the total number of seats in the Lok Sabha stays the same at 543, then the southern states will lose 23-25 seats, while the five most populous states _ UP, Bihar, Maharashtra, Rajasthan and MP - will gain 33-35 seats. If the total strength of the Lok Sabha is increased to 790 seats, the southern states will gain just 23 seats while the five large states will gain 150 seats. TOI. The southern states lose anyway. Colonialism by the Hindiwallahs. Worrying.        

Good thing they are going abroad.

"There is another new disease among children - that of going abroad. The child enthusiastically wants to go abroad, sees a new dream, but there is no assessment of which institution or country he is going to," said Vice President Jagdeep Dhankar. "Citing estimates that around 1.3 million Indian students will have gone abroad for studies in 2024, he said this trend has cost India approximately USD 6 billion in foreign exchange." HT. The VP has possibly forgotten that "India received USD 120 billion in remittances in 2023, which is almost twice of USD 66 billion received by Mexico during the same period, the World Bank said in a report." TIE. If the government used this $120 billion to improve standards of our education, perhaps parents would not spend the $6 billion, a vast sum in India, to send their children abroad. Foreigners know. In Karnal district of Haryana, houses stand empty as, "There are no jobs here so young educated locals who dream of a better life are paying thousands of dollars to flee the fastest growing major economy for the United States." "In four years, the number of Indian citizens illegally entering the US has surged dramatically - from 8,027 in the 2018 to 2019 fiscal year to 96,917 during 2022 to 2023 period, government data showed." CNN. Despite Canada being a "safe haven" for criminals and terrorists wanted by the Indian government (TOI), "For Indian students aspiring to make Canada their permanent home, the Study Permit to PR pathway offers a seamless transition." "With Canada aiming to welcome 485K new Permanent Residents (PR) in 2024 and 500k in 2025, the country presents promising opportunities for international students looking to transition to PR status," advises FE. "Germany plans to raise the number of skilled labor visas granted to Indian workers to 90,000 annually, up from the current limit of 20,000." BS. Something to celebrate because, "The average gross monthly salary for Indian employees in full-time positions in Germany is approximately 5,400 euros, which amounts to around Rs 4,92,000 - 41% higher than the national median wage." The standard of education in India is dire as, "Estimates show that about 51.25% of the youth is deemed employable. In other words, about one in two are not yet readily employable, straight out of college." according to the Economic Survey. Why? "The Covid-19 pandemic forced most education to move online. This was disastrous for various reasons as far as learning was concerned." Now, instead of reading textbooks students are "opting for YouTube videos put out by amateurs". "The students feel comfortable with the format of short videos, which they think , gives them the essence of the topic," wrote Shobhit Mahajan. Good thing they are going abroad and sending money to India. Twenty times as much.  

Net value added of workers.

"The number of individuals declaring over Rs 10 million as taxable income has surged, increasing fivefold from 44,078 in assessment year (AY) 2013-14 to nearly 230,000 in AY 2023-24." "During this period, the number of individual tax returns filed grew over 2.2 times from 33 million to 75 million, according to the latest data from the tax department." ET. That is reflected in, "India's billionaire count crossed the triple century mark," as "This year's Hurun Rich List includes 1,539 individuals with a net worth of Rs 1 billion or more - an increase of 220 from last year, and with 272 new entrants." TOI. These are the fortunate few. "Earnings of workers have grown by 5.4% since 2018-19, which has barely kept pace with consumer price inflation." The average monthly salary of the privileged salaried class was a modest 21,103 per month in the fourth quarter of 2023-24, but "it was still better than the Rs 433 earned per day by a casual laborer and Rs 13,900 (per month) by a self-employed worker." The Annual Survey of Industries shows that "the share of labor in the net value added (NVA) in the organized factory sector has been slipping." "The flip side of a lower share of labor income in NVA is a higher share of profits," wrote Niranjan Rajadhyaksha. Higher tax collections mean more money for our rulers to enjoy more junkets. Meanwhile, "Private banks continue to see a rise in stress in small-ticket advances including microfinance, credit cards and personal loans in the second quarter of the fiscal year." "Axis Bank's gross slippages jumped 36% year-on-year to Rs 44.43 billion, led by unsecured loans." "Kotak Mahindra Bank, too, saw slippages worth Rs 18.75 billion at the end of the September quarter, up...42% year-on-year." Mint. Household debt has increased from "30% of GDP in March 2015 to 38% in March 2023 and to around 40.1% currently." "A household faced with an increasing burden of interest payments, and no additional sources of income (or increases to income), will be forced to cut back on expenditure. If this happens on a large enough scale, companies will see weak consumption reflected in their revenue and profits, and ultimately in their willingness to invest in new capacities." Mint. Falling household spending will mean stagnant goods and services tax (GST) collection and fewer jobs will mean fewer people paying income tax. "The economic backdrop of Japan in the late 1980s appears broadly closer to the current Indian context," wrote V Thiagarajan. "Back then, the Japanese economy boomed, driven by exuberance in the equity markets and skyrocketing real estate prices." "Domestic investors continued to leverage through borrowings and poured money into what was then emerging as the world's biggest equity pool." "By design or by default, Indian policymakers appear to have taken a leaf out of the Japanese experience." Must be by default. Because who will tell Dear Leader?  

Choice between degrowth and disinflation.

"The International Monetary Fund warned that wars, trade tensions, high debt and low growth threaten to prolong a lackluster economic era and leave nations without the resources to reduce poverty and confront climate change. Higher consumer prices globally, conflict in the Middle East and Europe, and 'far from good enough' medium-term growth prospects are reasons to be cautious despite an expected economic soft- landing, Managing Director Kristalina Georgieva." ET. National leaders want the gross domestic product (GDP) to go on increasing, "But recently, an alternative term has begun taking root in popular culture and policy: 'degrowth'." Professor of Philosophy at the University of Tokyo, Kohei Saito has written a book Slow Down: The Degrowth Manifesto. "The idea, he noted, applies mostly to the Global North, where production and consumption have come to exceed basic needs in ways that harm the environment." ET. No degrowth for India. "The Reserve Bank of India's rate-setting panel continues to expect the Indian Economy to grow at 7.2% in FY25." ET. That would make India the fastest growing major economy but, in 2018, "The Working Group tasked to develop a road map towards achieving a 5 trillion dollar economy by 2025 has prepared its report and it is being circulated to the stakeholders for further suggestions." pib.gov.in. So, full steam ahead. "The ECB cut its key deposit rate by a quarter-point to 3.25% and noted the process of taming prices should be complete 'in the course of next year'." "The move follows a slump in inflation to below 2% for the first time since 2021." ET. In the UK, "The Office for National Statistics said consumer prices rose 1.7% in September, down from 2.2% the previous month," "But price pressures were lower across the board, even in the services sector, which has worried policymakers as it accounts for around 80% of the British economy." AP. "For the sixth consecutive month, the US annual inflation rate fell, from 2.5% in August to 2.4% in September 2024," but "the annual core consumer price inflation rate in the United States, which excludes items such as food and energy, edged higher to 3.3% in September...ahead of the market expectations that it would stay at 3.2%." FE. "Interest rate cut at this stage will be premature and very very risky," said RBI Governor Shaktikanta Das. "India's growth story remains intact. Growth is resilient." ET. "Deglobalisation, rearmament, de-dollarisation, aging demographics, climate change and the energy transition will continue to put upward pressure on inflation over the coming years," said Sokoloff. Gold "has risen nearly 30%. It is telling us, says the veteran analyst, that four decades of disinflation are over and bonds are in a long-term secular bear market. Inflation is not dead, just resting." Reuters. Economic growth will increase consumption and lead to higher inflation. Without growth there will be little money for efforts to reduce climate change. The only way may be to reduce the number of people on the planet. Quickly.    

Melodi in jeopardy.

Regarding the expulsion of Canadian diplomats, "A very strong step taken by the Indian government. It showed the whole world that don't mess with India, otherwise India would come out to be very, very strong. India will give it bad, and you will face the consequences," said a supposed defence expert Shiwalee Deshpande to ANI. Asian News International (ANI) is allegedly a strong supporter of the present Modi administration. wikipedia. "The Canadian govt has been monitoring individual journalists and media and has compiled and submitted a dossier of social media posts by them." "The report focuses on accounts on X, Facebook and YouTube that belong to what it describes as 'godi media'." TOI. The label 'Godi media' meaning 'media sitting on the lap' or 'lapdog media' was coined by veteran Indian journalist Ravish Kumar. wikipedia. "After the Royal Canadian Mounted Police claimed a few days ago that the Lawrence Bishnoi gang active in Canada was linked to Indian government agents," India has named Sandeep Singh Sidhu, an official of Canadian Border Service Agency (CBSA) as a fugitive terrorist that India wants to be extradited to India. ET. While reacting fiercely to Canada's allegations of killing Hardeep Singh Nijjar, India has adopted a commendably devious tactic to neutralize the US case against former Indian government official Vikash Yadav in an attempted assassination plot against US citizen Gurpatwant Singh Pannun (justice.gov).  Within three weeks of Yadav being named in the US indictment in November 2023, "On December 18, 2023, the Delhi Police Special Cell arrested Yadav after an FIR was filed against him by a Rohini resident, accusing him of extortion and kidnapping and linking him to gangster Lawrence Bishnoi, the Indian Express report notes. "The filing of this Delhi Police case implies that any US extradition request for Vikash Yadav would likely be put on hold pending the final outcome of this case, including disposal of all appeals - a process which could take years." The Wire. The Indian justice system is renowned as 'tarikh pe tarikh' meaning 'date after date', where cases take decades to be resolved. legalserviceindia. Yadav served in the Central Reserve Police Force (CRPF) as assistant commandant and was then employed by India's intelligence service the Research and Analysis Wing (RAW). News18. That he would rob anyone of a gold chain, some rings and some cash is laughable. "Canada's partners in Five Eyes intelligence alliance - the US, the UK and Australia - have backed Ottawa's investigation about an alleged link between the Indian government and the killing of pro-Khalistan separatist Hardeep Singh Nijjar and called on New Delhi to cooperate in the probe." HT. India may not have much to lose with total trade with Canada amounting to a paltry $8 billion in 2023. (cgitoronto.gov.in. But Canada is a member of the G7 and invitations to the high table could disappear. No more 'Melodi' selfies (ET). Hugging Putin (HT) is not as exciting. Is it?

GRAP based on AQI by EWS.

 "A thick layer of fog engulfed the national capital on Saturday (today) as the overall Air Quality Index (AQI) dropped to 251, categorised as 'Poor' by the Central Pollution Control Board. As the India Gate and surrounding area recorded 'Poor' AQI, the air quality in other areas of the national capital including Anand Vihar dropped to 334, categorised as 'Very Poor'." News18. Unfortunately, not unexpectedly, "The early warning system (EWS) for air quality in Delhi has made incorrect predictions on four of the last six days till Friday (yesterday) amid plummeting Air Quality Index in the city." "Since its launch in October 2018 to provide air quality warnings up to 10 days in advance, the EWS had a worrying track record leaving citizens uninformed about when precautions need to be taken." ABP. Wrong or not, "Delhi's Chief Minister Atishi Marlena announced on October 15 that 99 teams will inspect private and government construction sites in Delhi to ensure compliance with dust mitigating measures, as GRAP Stage 1 has been implemented along with other related measures." HT. "The Graded Response Action Plan (GRAP) is a framework designed to combat air pollution in the Delhi-NCR (National Capital Region) region." The Commission for Air Quality Management (CAQM) implements GRAP in four stages according to the severity of the AQI. BS. At every stage the emphasis seems to be on motor vehicles which targets the middle class while sparing the poor vote bank (wikipedia) and hordes of politicians, civil servants and diplomats who whizz around in their luxury cars. India emits 5.2 million tonnes of PM2.5 annually, of which 82% comes from biomass burning and industrial activities and only 7% of PM2.5 is from vehicular emissions. Biomass is used by the poor for cooking and for heating in winter, wrote Chandra Bhushan. Other measures for reducing vehicular pollution are blending ethanol in fuel and electric vehicles. Ethanol's carbon footprint at 0.295 kg CO2 equivalent per liter is less than that of fossil fuels but not zero. "Most alarming is the water footprint (WF) of ethanol: 1,344 liters per liter of ethanol produced," and "diverting agricultural land for biofuel production poses significant risks to food security," wrote Aditya Sinha. "Barring July-August, food inflation has hovered in a range of 8-9% since November 2023," and cereal inflation has averaged 11% in the last two years," wrote Prof Himanshu. High food prices mostly hurt the poor. Batteries of electric cars need electricity for charging and "In the Indian case, in 2010-11, 65% of the country's generation capacity depended on fossil fuels. In 2020-21, this was down to 61.4%." 53% of electricity came from coal in 2020-21 and generation from sun and wind "amounts to a little over one-fifth of our overall capacity, against 8% in 2024-15," wrote Vivek Kaul. Meanwhile, "in Chhattisgarh's biodiversity rich Hasdeo Aranya, the state government informed the National Green Tribunal that more than 98,000 trees were cut for coal mining in Parsa East Kete Basan coal field since 2012." ET. Just like EWS policies are decided by the uninformed. We are left to grapple with GRAP. 

Students, not very poor.

"India is poised to be the third largest global economy by 2030, but its rising population presents mounting challenges in basic service coverage, S&P Global Ratings said." ET. According to the latest "Poverty, Prosperity and Planet 2024" report from the World Bank, "While the number of Indians living in extreme poverty has significantly decreased from 431 million in 1990 to 129 million in 2024," "progress has slowed considerably since 2020, mainly due to the Covid pandemic, which pushed millions back into poverty," and "The disparity between the rich and poor has widened." ET. In November 2023, "The Cabinet led by Prime Minister has decided that the Central government will provide free food grains to about 81.35 crore (813.5 million) beneficiaries under the Pradhan Mantri Garib Kalyan Anna Yojana (PMGKAY) for a period of five years with effect from 1st January 2024." pib,gov.in. Such welfare schemes provide a safety net against hunger and allow the poor to spend their meager earnings on other essentials. Economists feared that the rural employment scheme, the MGNREGA (wikipedia), would drive up wages and stoke inflation. But, "The researchers found that the payment reform raised household earnings of MGNREGS beneficiaries, boosted local demand, and drove up market wages and non-farm employment without causing inflation." "The direct impact of MGNREGS on household earnings was only 14%; 86% of the increase came from higher private sector wages and employment," wrote Pramit Bhattacharya. However, India will not become a high-income nation through welfare programs. For that we need real jobs with respectable wages. "Nearly 40,000 Indians have submitted applications in just two weeks for 1,000 spots under Australia's new visa program," as "The new Working Holiday Maker visa program allows Indians aged 18 to 30 to live, study and work in Australia for up to 12 months." Mint. All the applicants are hoping to somehow stay in Australia permanently even if employed in menial jobs. The reason is, in India, the number of self-employed workers has risen from 52.2% in 2017-18 to 58.4% in 2023-24, 73.5% of women in rural areas and 43.2% in urban areas are self-employed. People become self-employed when they can't get any other jobs and "They cannot afford to remain unemployed. This is reflected in the fact that most self-employed workers in India fall into the category of own-account workers, who run enterprises without hiring any workers. At the same time, around one-fifth (19.4%) of the self-employed workers in India are helpers in household enterprises working without wages," wrote Amit Kumar, Kriti Sharma & Puja Pal. Menial jobs in Western countries more attractive than helping to sell pakodas in India (wikipedia). "More than 90% of students do not wish to come back to India. say estimates." ET. It's an escape route. No one escapes to return.  

Professionals are booking profits.

The benchmark stock market index, the BSE Sensex hit an all time high of 85,836.12 on 26 September 2024, since when it has dropped to 81,501.36 yesterday. Trading Economics. "Foreign funds withdrew more than $7 billion from Indian equities in the month through Oct 14, according to data compiled by Bloomberg." "A fierce rotation to China following a barrage of stimulus measures sucked money out of other Asian markers. Purchases of nearly $7.2 billion by local investors in the same period helped offset the losses in India, but the sentiment is turning." ET. "Brokerages predict that companies in the benchmark NSE Nifty50 index will either report flat or low single digits profit gains for the quarter ended September." "The MSCI India gauge is trading at a valuation of almost 24 times its 12-month earnings, versus a five-year average of about 21." ET. "In just four years, retail assets under management (AUM) in mutual funds have more than tripled, crossing Rs 17 trillion." Others have benefited. "Over the past 15 months, Indian promoters have sold over Rs 1.17 trillion in equity" and "private equity funds have exited positions worth Rs 1.15 trillion during this period." In 2024, Whirlpool sold a 24% stake in its Indian subsidiary for $468 million, British American Tobacco sold a 3.5% stake in ITC for Rs 174 billion and Tencent sold a 2.1% stake in PB Fintech for Rs 16.68 billion, wrote Amit Goel. It's not just the secondary markets, even Initial Public Offerings (IPO) are oversubscribed many times over. "The IPO of e-commerce SaaS (software as a service) platform Unicommerce was oversubscribed a whopping 168 times, while that of co-working space provider Awfis saw over-subscription of over 100 times," wrote Abhishek Mukherjee. "Resourceful Automobile, a small bike dealership based in Delhi, has stunned the market by attracting bids worth Rs 48 billion for its modest Rs 120 million IPO. The dealership, which operates two Yamaha showrooms under the name 'Sawhney Automobiles' has just eight employees." TOI. The Reserve Bank of India's latest State of the Economy report points out that "India accounted for the highest number of IPOs globally (27% by volume) in [the first half of] 2024." "So why is there such huge demand for IPOs? The large sums of money chasing IPOs tells us that these investors do not see other viable investment opportunities available to them. On the other hand, it can also be argued that the huge returns delivered by stocks since March 2020 have made other investment avenues unattractive to investors besotted with equities," wrote Vivek Kaul. "As of June 2024, the total value of stocks held by Indian households, both directly and indirectly, stood at Rs 134 trillion, equivalent to 44% of India's gross domestic product (GDP). At the end of 2019, this was Rs 42 trillion or 21% of GDP." Individuals are also trading in futures and options (F&O) "which derive their value from stock prices and indices made up of stocks". Individuals trading in F&O have lost a total of Rs 610 billion, wrote Kaul. Professionals are selling while amateurs are buying. How long will it last?

Best to stop digging.

"Canada expelled six Indian diplomats including the high commissioner on Monday (14 Oct), linking them to the murder of a Sikh separatist leader and alleging a broader effort to target Indian dissidents in Canada." Reuters. "After 'expelling' Indian diplomats, Canada said it had asked Indian govt to waive diplomatic immunity for its officials and it served notices of expulsion only after India didn't agree." TOI. This must have acted as a red rag to a bull (Collins) because India immediately retaliated by expelling six Canadian diplomats and "They have been asked to leave India by or before 11.59 PM on Saturday, October 19, 2024." "The government of India strongly rejects these preposterous imputations and ascribes them to the political agenda of the Trudeau Government that is centered around vote bank politics." ET. Strong words but there could be some truth in it because Canada is to hold its next general election on or before 20 October 2025. wikipedia. We Indians are the proud inventors of 'vote bank politics' as, "The term 'vote bank' was coined by the Indian sociologist MN Srinivas (Kalyan Chandra)," so we should know. Trudeau claimed that he had "a concise dialogue" with Prime Minister Narendra Modi at the ASEAN summit in Laos but the Indian government said "there was no substantive discussion" and won't be till Canada eliminates "anti-India Khalistani activities" on Canadian soil. ET. Canada has almost nothing to lose because its trade is mainly with the US, China, Mexico and Europe (Britannica) whereas, a video shows "thousands of students (mostly Indian) standing in a queue outside Tandoori Flame restaurant to apply for posts of waiter and servant, sparking concerns among international students planning to move to Canada for further studies or employment opportunities," (ET). These so-called international students aspire to menial jobs. Even as India responds aggressively to Canada's allegations of targeting Canadian citizens, it is painfully silent when "Gurpatwant Singh Pannun, general counsel of Sikhs for Justice (SFJ) and designated a terrorist by India, has once again called for the disintegration of India." ET. In further provocation, Pannun "has through his attorneys filed a civil lawsuit in a US federal district court against the Indian government, national security adviser Ajit Doval, and others, seeking damages for the alleged attempt to assassinate him on US soil last year." TOI. "An Indian enquiry committee is set to visit the United States...to investigate the involvement of an Indian government official in a foiled plot to assassinate a US national," (ET), even as it has told the US that the official labeled CC1 no longer works for the government and has been arrested (HT). Problem is that there have been at least 20 assassinations in Pakistan, including Sikhs, many of which have been blamed on the Research & Analysis Wing (RAW) of the Indian government. Also Mr Modi is on record as saying "yeh naya Bharat hai, ghar me ghus ke marenge" (this is new India, we will kill them in their own homes). TOI. Canada has hinted at sanctions against India with foreign minister Melanie Joly saying "everything is on the table". India Today. India is placating the US while dismissing Canada, but the 'Five Eyes' alliance  (wikipedia) will have all the facts. Perhaps it is best to stop digging when in a hole (wikipedia). Even a small hole.    

Services, not manufacturing.

"India-US Strategic Partnership Forum President and CEO Mukesh Aghi...emphasized that exports are going to be a major job creator for India as the country moves towards becoming a USD 5 trillion economy." "He said creating nearly 1.2 million jobs per month is going to be a challenge, highlighting the importance of job creation." ET. "The cumulative overall exports during April-August 2024 is estimated at USD 374.33 billion, as compared to USD 350.11 billion in April-August 2023, with an estimated growth of 5.35%." Merchandise exports grew 1.14%, from USD 176.67 billion to USD 178.68 billion. pib.gov.in. "India's industrial production dropped by 0.1% in August for the first time in two years, primarily due to lower output in the mining and power sectors, along with minimal growth in the manufacturing sector." The Index of Industrial Production (IIP) "was revised down to 4.7% for July, from an earlier estimate of 4.8%." "In the 1950s, manufacturing was about 10% of India's economy. Since 2010, it has averaged about 17.7%." "The share of manufacturing has never reached even 20%." From 2004-05 to 2021-22, Maharashtra, Gujarat, Tamil Nadu and Karnataka have contributed 48% of India's factory output. "For India's share of manufacturing to reach 25% of GDP, we need the sector to expand rapidly in other states such as UP, West Bengal and Haryana," wrote Prof Vidya Mahambare. "According to the IMF, India's real GDP growth rate is expected to outperform other emerging-market economies by about 67% in FY25." "On the other hand, India has a rising unemployment rate (9.2% in June 2024 vs 7% in May 2024), 50% of graduates are unfit to be hired, and the cost of education is increasing, while the monetary reward from the job market upon graduating is plummeting to multi-year lows," wrote Shahan Sud. "The trade imbalance between India and China has widened post-pandemic. In the first five months of FY25, India's exports were only 12.4% of imports from China, down from 15.4% in the same period last year." "As global companies seek to diversify away from China, India was expected to be a prime beneficiary, offering a growing economy of similar scale." "However, Southeast Asian nations have emerged as the main winners from China's declining appeal as a foreign investment destination," wrote Nandita Venkatesan. The good news is that, "In 2005, India accounted for around 1% of the world's goods exports. In 2023, it had risen, but was still less than 2%. Over the same period, India's share of the world services exports rose from 1.9% to around 4.6%. Goldman Sachs expects India's services exports to be around, $800 billion by 2030, up from $337 billion in 2023, amounting to 11% of India's GDP." Mint. The economy may reach $5 trillion but without jobs with good salaries Indians will remain poor. Jobs depend on education. But education does not buy votes. Catch 22. wikipedia.

Hunger for luxury.

"The Reserve Bank of India (RBI)-led Monetary Policy Committee (MPC)...retained repo rate, the key lending rate, at 6.5%, announced Governor Shaktikanta Das. The MPC also decided unanimously to change the 'withdrawal of accommodation' stance to 'neutral' to remain unambiguously focused on a durable alignment of inflation with the target." ET. The government asked the RBI "to maintain retail inflation at 4% with a margin of 2% on either side" till March 2026. ET. At its meeting, the RBI maintained its inflation forecast for 2024-25 at 4.5% while projecting a growth rate of 7.2% for the real Gross Domestic Product (GDP). "Nearly two years of elevated food inflation is leaving less in the lunch boxes of impoverished children, as government funded school meals suffer cutbacks because of rising prices of vegetables, fruits and pulses." ET. India has been ranked at 105 out of 127 countries in the Global Hunger Index 2024. "India is among 42 countries that fall within the 'serious' category, alongside Pakistan and Afghanistan." BS. The RBI cannot influence food production and hence cannot bring down food inflation but it is in charge of setting the cost of borrowing which controls consumer behavior. The nominal repo rate was at over 6% till December 2018, since when it fell sharply to 4% by June 2020, while the real repo rate fell from over 4% to minus 2% over the same period. Mr Shaktikanta Das was appointed for three years as the Governor of the RBI on 18 December 2018, which was extended by another three years in December 2021. wikipedia. "A nominal interest rate refers to the total of the real interest rate plus a projected rate of inflation." Investopedia. Thus, a negative real interest rate meant the RBI set its interest rate at below the rate of inflation. A low interest rate is supposed to benefit the economy by encouraging households to spend more on buying homes or on consumer durables like motor vehicles and helps to increase profits of banks which pay less interest to savers while charging relatively higher interest on loans. The cost of very low interest rate is that it transfers wealth from savers, usually retired people dependent on interest income from savings, to borrowers. It also results in asset price inflation as people rush to borrow at low cost to invest in real estate or equities. stlouisfed.org. "With a supply of affordable homes dwindling," "After growing 4.3% last year, national home prices in India are expected to rise 7.75% this year, an upgrade from the 6% predicted in May," and "Home prices are then expected to increase 6.0%-6.25% in the next two years." Reuters. Also, "Sales of super luxury cars in India are set to surpass previous records for the third consecutive year." BS. Not surprising that, "RBI Governor Shaktikanta Das received an A+ rating and was ranked the top central banker globally for the second consecutive year by US-based Global Finance Magazine." ET. Happy Dussehra. May the Universal Mother bless everyone with health, prosperity and peace.  

Appreciate the rupee.

"Commerce Minister Piyush Goyal said yesterday it is time for the Indian rupee to appreciate on the back of inflows in debt and equity markets." ET. India's foreign exchange reserves "were at $704.89 billion in the week through Sept 27 in their biggest weekly increase since mid-July 2023, Reserve Bank of India (RBI) data showed. India is only the fourth economy in the world to cross $700 billion in reserves after China, Japan and Switzerland." "The increase was spurred by $7.8 billion in dollar purchases by the RBI and $4.8 billion in valuation gains." Reuters. This gives us the ability to finance our imports for 11.9 months but Brazil has 17.8 months and Russia has 25.7 months of cover. A stronger rupee will bring down the cost of imports and inflation and that could spur the RBI to reduce policy rate. India's consumer price index (CPI) inflation dropped to 3.65% in August from 6.83% in August 2023. MoSPI. In its August meeting, the Monetary Policy Committee (MPC) of the RBI decided to hold its policy rate at 6.5% for the ninth time in a row, in a 4:2 majority decision. ET. A lower interest rate will hopefully encourage companies to increase their investments on lower borrowing costs and so create more jobs. "Royalty payments by Indian subsidiaries of multinationals to their overseas parents increased nearly 42% in the past five years," as "An ET study of 10 companies - including Hindustan Unilever  (HUL), Nestle, Maruti Suzuki, Bosch, Colgate-Palmolive, Bata, Whirlpool and 3M India - showed that their cumulative payout to their parents crossed the Rs 80 billion mark in 2023-24, up from Rs 56 billion in 2018-19." "A 'Buy China, Sell India' trade is getting played out in emerging markets as FIIs have sold Indian stocks worth around Rs 307.18 billion in the first 3 days of October." ET. Presumably, the rupees are being converted to Chinese yuan. "Chinese bazooka to revive its markets and economy is winning the hearts of foreign investors," and "Announcing that it is taking a fiscal leap of faith on China as it is now or never for policymakers to deliver, CLSA said it is raising China to 5% overweight by cutting India overweight to 10% from 20%." "On Indian equities, it said there are three witches - oil price, new issuance (IPO boom) and retail investor appetite." ET. "In cash, DIIs (domestic institutional investors) purchased a provisional Rs 132.4512 billion against FII (foreign institutional investors) sales of a provisional Rs 82.9341 billion yesterday, according to BSE data." Mint. Thus, domestic investors are providing higher profits to foreign investors. All very good. But, a stronger rupee may hit our exports by making our goods and services more expensive. As it is, exports of merchandise fell from $451.07 billion in 2022-23 to $437.06 billion in 2023-24, but services exports rose from $325.33 billion to $339.62 billion over the same period. pib.gov.in. A more muscular rupee could lower exports which will mean fewer jobs in India. When over 3000 Indian students queue up for waiter jobs in Canada (TOI), we should not be so complacent. We have accumulated over $704 billion of forex. Does that show we appreciate the rupee? 

Why the 'respect' from Canada?

"Canada said that 'India's territorial integrity must be respected' in a statement which would be the first such after allegations by Canadian Prime Minister Justin Trudeau that India was behind the murder of Khalistani separatist terrorist Hardeep Singh Nijjar which soured New Delhi-Ottawa relations." "He made the statement while appearing before the foreign interference commission in Ottawa." News18. "On 18 June 2023, Nijjar was shot and killed in the parking lot of a Sikh temple (Gurdwara) in British Columbia." On 18 September, Trudeau alleged that Indian agencies could be behind the assassination. wikipedia. The commission heard allegations of extensive Chinese interference in elections in Canada. "In 2021, the government of India had 'intent to interfere and likely conducted clandestine activities' including using an Indian government agent in Canada, according to an unclassified summary written by the Canadian Security Intelligence Service (CSIS), reported CBC." ET. So, why the semblance of an olive branch? Trudeau can afford to be statesman-like because, firstly, Canada does not need India. Canada exports 76.9% to the US, 11.4% to China and then to the UK, Japan, France and Germany. 49.2% of imports are from the US, 23% from China, 5.5% from Mexico and then from the UK, Japan and Germany. Tourism is big business and most tourists come from the US, the UK, Japan, France and Germany. Britannica. India does not figure. Secondly, the Indian government may not need Canada for trade but a lot of Indians dream of getting to Canada somehow. "Just a few years ago, getting admitted to a college in Canada would create a smooth pathway to a work permit and then permanent residency." "That smooth path to the Canadian dream has been disrupted." ET. A video showing about 3,000 Indian students "standing in a queue outside Tandoori Flame restaurant to apply for the post of waiter and servant," has gone viral on social media. ET. "Everyone dreams of a better life, in terms of educational and economic opportunities, standard of living and infrastructural development. One of the ways, Indians think they can achieve all of this is by settling abroad and one country that is at the top of their list is Canada." India Today. It's easy to blame Canada, but the real reason is the enormous unemployment problem in India since the most stringent lockdown in India in March 2020 when there were only 500 cases of Covid (HT). Since then, manufacturing growth has been stagnant, poorly paid agricultural jobs have risen, self-employment, a sign of desperation, has risen to 58.4% of the workforce and unpaid family labor is also higher, wrote Prof Santosh Mehrotra. Finally, Trudeau is relaxed because big daddy US has now taken responsibility. "After Gurpatwant Singh Pannun, a Khalistani separatist, filed a civil lawsuit in US court alleging the Indian government of hatching a conspiracy to assassinate him, the District Court for the Southern District of New York issued a summons to the Indian government NDTV reported. The summons demands a response from the Indian government in 21 days." Mint. "Beware of Greeks bearing gifts," says the proverb. wikipedia. We should wonder about Trudeau's bonhomie.  

Lethal trade.

"China's sputtering economy has its worried leaders" "unveiled stimulus measures, offered rare cash handouts, held a surprise meeting to kickstart growth and tried to shake up an ailing property market with a raft of decisions - they did all of this in the last week." Two surveys show what people think. "The first ...found that people were growing pessimistic and disillusioned about their prospects. The second, is a record of protests, both physical and online, that noted a rise in incidents driven by economic grievances." BBC. Some people take drugs when depressed. But the Chinese sell fentanyl to kill Americans. According to US law, "Individual parcels of clothing, gadgets and other merchandise valued at up to $800 - one of the highest such limits in the world - now enter the country duty free and with minimal paperwork and inspections." One billion such parcels entered the US in 2023, 1.4 billion will do so in fiscal 2024 and narcos are smuggling fentanyl precursors from China in such packages. Just one courier "ferried about 7,000 kilos of fentanyl-making chemicals to an operative of the Sinaloa Cartel. That's 15,432 pounds sufficient to produce 5.3 billion pills - enough to kill every living soul in the United States several times over." Reuters. "Chinese chemical suppliers catering to the illicit drug trade conceal fentanyl-making ingredients known as precursors in small boxes that look like regular e-commerce packages. The idea is to hide these boxes in plain sight, making them disappear into the massive flow of cheap goods shipped legally from China to the US every day." Reuters. In China, "Public spaces are blanketed with CCTV cameras that record details like clothing, gender, age, and even ethnicity. Many of these cameras are powered by facial recognition technology to identify people on police blacklists, citizens' movements are monitored, dissidents are easily tracked and protests and strikes are stuffed out before they can gain momentum. qz.com. It's impossible, therefore, that the authorities are unaware of those smuggling fentanyl precursors into the US. The US cannot stop trade with China because "US consumers have benefited from lower prices," so that "increased trade with China boosted the annual purchasing power of the average US household by $1,500 between 2000 and 2007." President Donald Trump imposed billions of dollars of tariffs on Chinese goods while President Joe Biden has added to them by banning TikTok and imposing export controls on advanced technology to China. cfr.org. To evade US restrictions Chinese companies have moved production to Mexico which has a free trade agreement with the US. "Mexico surpassed China as the top exporter to the US in 2023." However, "The increase in Mexican exports to the US has been 'roughly matched by simultaneous and closely correlated growth in Mexican imports from China,' according to S&P Market Intelligence country risk analysts Jose Enrique Sevilla-Macip and John Raines. The US is imposing tariffs on goods from China. China is exporting fentanyl free of tariffs. Kill Americans and make money.