Don't have, can't spend.

"The near 900 bps fall in (interest) rates between 1996 and 2003 marked a historic break from high interest rates of the past," and "This led to an across-the-board rise to corporate bottom lines and consequently of stock prices." This was the great Rate Bull from 2003 to 2008, wrote Adil Rustomjee. We now have a bull market due to the Systematic Investment Plan (SIP) in mutual funds. "With much of the economy locked down, 2020 is the worst year in independent India's economic history - and yet the market rises 12%." There is a disconnect between the SIP Bull and the real economy. A note - titled 1 year, $90 bn and 0% Return Later from Kotak Securities - deflates much of the hype over stock market buoyancy by pointing to low corporate earnings growth and near-zero investment returns over the past 12 months." The government perpetuates this myth because it gains from Securities Transaction Tax (STT), capital gains and taxes on dividends. "For example, the 2025-26 Union Budget projects a 131% growth in STT collections over the actual receipts in 2023-24," wrote Rajrishi Singhal. "Annual GDP growth was 9.7%, 7.6% and 9.2% in 2020-21, 2021-22 and 2023-24 and it fell to just 6.5% in 2024-25." India needs to grow at 7.5%-8% to become a developed economy and that needs private investment. But, "While the government raising its share of the capex has helped, what is still missing in the act is a sustained rise in private investment," wrote Roshan Kishore and Abhishek Jha. "Budgeted capital expenditure (capex) of the Centre rose to over 3% of GDP in 2025-26 from 1.7% a decade ago." However, "A significant portion of it has been in the form of financial transfers by way of equity infusions and loans to public sector enterprises (PSEs), state governments and other institutions." This capex is not investment in new infrastructure but is used to plug revenue shortfall, wrote Shruti Gupta. Financial Services Secretary M Nagaraju said that "corporates are better placed for investments, pointing out that they are 'enjoying strongest balance sheets' and added that financial sector should also support them." ET. "The country's much-awaited GST 2.0 reform officially kicked in on September 22, collapsing multiple tax slabs into simpler structure and handing what Finance Minister Nirmala Sitharman has described as a Rs 2-trillion boost to consumers pockets. ET. However, people need disposable cash to be able to spend. "Nearly 70% of people buying iPhones in India choose to pay via EMI. Also, a recent study found that 93% of salaried Indians earning less than Rs 50,000 a month are relying on credit cards to support their everyday expenses, with credit and EMIs no longer optional extras, they are lifelines." FE. Indian businesses are known to be unethical. According to a Reddit post, a was offered a salary of Rs 400,000 per annum "but required him to sign a bond stating that if he left the organization within three years, he would be liable to pay a staggering Rs 1 million as compensation." ET. Living on debt and investing in shares. The Sword of Damocles (Britannica). Not one, but two.

Wrong and racist.

"In his comeback appearance on US television, Jimmy Kimmel...went on to make clear he would refuse to be cowed by his critics, chiefly Donald Trump." "In fact, being at the center of a storm about free speech seems to have hardened his resolve." BBC. Diametrically opposite and in an extraordinarily inexplicable judgement, "Karnataka HC dismissed...a petition from Elon Musk's X Corp against content takedowns, ruling that American free speech standards can't be transplanted into Indian constitutional thought and no global platform can evade the nation's laws." TOI. One of the posts cited by X Corp was, "Written in 2023, the short message from an account with a few hundred followers described a senior politician as 'useless'." Business and Human Rights. "A petitioner who seeks sanctuary under its (Indian Constitution) canopy must be a citizen of the nation, failing which its protective embrace can't be invoked," the judge said. This is so shockingly wrong and egregiously racist that all citizens of India should hang their heads in shame. In March 2025, an Israeli woman was gang-raped and an American man was pushed into a lake in Karnataka, probably intending to kill him. BBC. Are we to understand that, since all laws emanate from the Constitution, and these victims were foreigners, they have no right to expect justice in India? Article 14 of the Constitution states, "The State shall not deny to any person equality before the law or equal protection of the laws within the territory of India." It says "any person", not any citizen. Secondly, if X Corp has no rights because it is a foreign company, why would any foreigner want to invest in India? Thirdly, X Corp carries opinions of Indian citizens. Article 19 states, "All citizens shall have the right to freedom of speech and expression (indiacode.nic.in)," although the State has been allowed to restrict any speech that harms the security of the State, to maintain public order, decency or morality, or "in relation of contempt of court, defamation or incitement to an offence." Calling a politician "useless" does not violate any of these conditions. Moreover, a politician is merely elected representative "who is then expected to follow the will of the people." Britannica. They are most definitely not our masters. The Constitution explicitly states that "All laws in force in the territory of India immediately before the commencement of this Constitution" shall be void. However, Section 124A was introduced into the Indian Penal Code by Thomas Macaulay to punish disaffection against the British monarch. blog.ipleaders.in. This odious law is still in effect and "disaffection towards the Government established by law" carries life in prison. epw.in. The government uses its majority to bulldoze malicious laws through Parliament. Three new criminal laws and a Telecom bill were passed when the Speaker of the Lok Sabha suspended 100 opposition MPs and 46 opposition MPs were suspended from the Rajya Sabha. The Wire. Surely, the Parliament lacked the requisite quorum? A tyrannical government and a pliant judiciary makes India a fascist state. That's why techies go to temple for their American Dream. Is India a nightmare?     

Tax or spend.

"As India's weight in the MSCI Emerging Market Index has increased over time from ~7% to ~20%," foreign investment in Indian equity should be 20%. But, "On a cumulative basis, EM equities saw USD 1,380 billion in total flows since 2007. Indian equities over the same period, saw USD 168 billion in net flows, ~12% of total EM flows." "Global investors are thus missing out on India's growth story which is reflected in Indian public equities," wrote Arvind Chari. On the other hand, "Disconnect of the market from the real economy seems to be increasing with time, and this is paradoxical." "Despite a GDP collapse of 24% for Q2 2020, and a near 8% contraction for 2020-21," "the market consistently traded at over 30x forward earnings (at one point, it even touched 40x) with dividend yields that consistently went below 1%." "As a result, cycles are becoming tenuous to the point where the market is in danger of losing its traditional role as a barometer for the economy." ET. If markets are unrealistically high, foreign investors could be booking profits, which would explain their net investment at 12%. Following Covid, the fiscal deficit was brought down from 9.2% of the gross domestic product (GDP) in 2020-21 to 4.77% in 2024-25, revenue expenditure was cut from 15.5% of GDP to 10.9%, revenue deficit fell from 7.3% to 1.71% while capital expenditure rose from 2.15% to 3.18% in the same period. But now the government is providing a demand stimulus by increasing the tax free income to Rs 1.2 million and cutting GST rates. They hope that increased consumption will compensate for lower tax rates but it may be difficult to contain the fiscal deficit, wrote AK Bhattacharya. But will tax cuts really stimulate economic growth? "The 1997-98 'Dream Budget' stimulated investment and growth. Tax buoyancy grew stronger during the 1997-2002 period after the budget." But, "The 2008-09 tax cut worsened the fiscal deficit without a lasting boost to growth." And, "The 2019 corporate tax cut has not stimulated private corporate investment," wrote Deepa Vasudevan. "Indian Prime Minister Narendra Modi in a public address...asked citizens to stop using foreign-made products and instead use local ones." Reuters. "In its short life so far, GST has emerged as a big avenue for graft payments. The government has promised to cut compliance costs. But without a decisive end to unnecessary red tape, misclassification, fraud, and corruption may continue unabated," wrote Andy Mukherjee. "Worse, the non-economic institutions that must support economic growth - the police-legal system, bureaucracy and judiciary - remain completely unreformed. They cannot, even if they want to, deliver quality law and order and justice in quick time to citizens and businesses," wrote R Jagannathan. Law and order could catch the real offenders. That could be extremely embarrassing. Much easier to speechify to a committed audience. Foreign investors are wise to restrain themselves. Even 12% is generous.        

The price of Amendments.

" 'Jimmy Kimmel Live!' will return to ABC...ending a nearly weeklong of standoff over the late-night talk show," but "Sinclair and Nexstar Media Group, which together own about one in five ABC affiliates nationwide, both said they would continue preempting Kimmel's show in a controversy which has gone beyond late-night talk shows into questions of free speech and the First Amendment." CNN. Earlier his show was pulled off the air indefinitely after his comments on the murder of Charlie Kirk. In his monologue, "Kimmel said that the 'Maga gang' was 'desperately trying to characterise this kid who murdered Charlie Kirk as anything other than one of them' and trying to 'score political points from it'." BBC. On 11 September, Charlie Kirk, a conservative activist and a friend of President Donald Trump, was shot dead at a college event in Utah. NDTV. If Kimmel really wanted to exercise his First Amendment right to free speech, he would have talked about the outdated Second Amendment which guarantees "the right of the people to keep and bear Arms" for a "well regulated Militia". constitution.congress.gov. Instead, by accusing Maga, Kimmel made it a political statement. The US is the most powerful country in the world with a powerful military (US News) and has no need for any militia. The US is the only country in the world which allows individuals to claim ownership of mineral wealth in private land. In the 19th century, "the federal government passed homestead and development acts to encourage settlement in the West. These acts, along with the General Mining Law of 1872, allowed for federal public domain lands, and the natural resources within them, to pass to private ownership." Natural Resources Revenue Data. These laws must have been designed to grab land from the native Indian tribes living in the area and a well-armed Militia was necessary to protect the land-grabbers from attempts by Indians to take their land back. Unfortunately, today's Americans are paying the price of past sins. "Between January and August 2024, an estimated 30.1 k (30,100) people died from gun-related injuries. This is 5% fewer people than had died during the same point in 2023." USA Facts. Even children are not safe. "There have been 47 school shootings in the United States this year, as of September 10." "The incidents left 19 people dead and at least 77 other victims injured." CNN. The US even has fashionable pink guns for girls and women. pinkgun.com. And, there are many models of 'Youth Guns' to teach children how to shoot. Impact Guns. The First Amendment gives Americans the right to shoot their mouths off and the Second Amendment the right to get shot. Isn't that barbaric? But, Indians dream of living in the US and die trying to get there ET. What does it say about us?

Hyphenated with all the 'stans'.

"President Donald Trump is taking yet another gamble on immigration," as "The overhaul, signed by the president,...escalates the price of entry to $100,000 per worker, to be paid by the company." "Trump also wants a revision of the prevailing wage rules to ensure that visa-holders get paid the same as Americans." "Nevertheless, Trump is correct" because "H-1B visas had been deliberately exploited," so that "American STEM graduates, led to believe their degrees would result in plentiful opportunities and well-paid jobs, are scrounging for work," wrote Patricia Lopez. The new fee "is expected to cast a shadow over remittance growth and partially impact earnings from the foreign exchange business for financial services providers, bankers and forex advisors said." ET. "Indians account for more than 70% of all H-1B visas." "Introduced as a travel restriction, it has the appearance of an economic sanction, an escalation of the punishment the US leader has meted out to a staunch ally in recent months." "First came a 50% duty on merchandise exports," but "By adding services to a trade war that Team Modi didn't see coming, Trump may have done more than shave off a few percentage points from outsourcing firms' margins," wrote Andy Mukherjee. It seems very personal, like the row with Canada. In 2018, then Prime Minister of Canada Justin Trudeau visited India with his wife and children but, "Miffed at the Canadian PM's support for 'Sikh separatists', Modi had refused to meet Trudeau until he made amends by meeting Punjab Chief Minsiter Amarinder Singh." Trudeau's former principal secretary Gerald Butts accused Mr Modi of "screwing" Trudeau during his trip to India in 2018. The Print. Mr Modi is fond of spouting 'Vasudhaiva Kutumbakam' which means 'the world is one family' but he should perhaps have remembered 'Atithi Devo Bhava' which means 'a guest is akin to god' (wikipedia). Insulting a politician is one thing, insulting his family is very personal. The Conservatives lost in the general election in April as Mark Carney led the Liberals to victory. BBC. The 51st G7 summit was to be held in Canada from 16 to 17 June 2025 (wikipedia) and till 02 June, for the first time in six years, Mr Modi had not been invited to the summit (HT). In an unrelated event, External Affairs Minister S Jaishankar held a phone conversation at the end of May with his Canadian counterpart Anita Anand, ostensibly"focused on deepening economic ties and advancing shared priorities". TOI. Priorities would be very different, won't they? Mr Modi "did get a last- minute invitation to join the G7, but not as a participant, only as an observer," wrote Jawhar Sircar. In a phone call on 17 June Trump told Mr Modi "how proud he was of ending the military escalation" between India and Pakistan to which Mr Modi replied that US involvement "had nothing to do with the recent ceasefire", according to the New York Times. ET. "India's unwavering opposition to third-party mediation on the Kashmir issue is the product of hard lessons drawn from history." TNIE. However, Operation Sindoor had nothing to do with Kashmir, but was retaliation for a terrorist attack on selected Hindus in Pahalgam. wikipedia. To prove his point, Trump appointed his close friend Sergio Gor as US Ambassador to India, as well as Special Envoy for South and Central Asian Affairs, thereby 'hyphenating' India with Pakistan and equating India with smaller nations in Central Asia. "In 2012, India strongly resisted the Obama administration's bid to appoint Richard Holbrooke as special envoy to South Asia." India Today. This time, there is only a sound of silence. So, what did Mr Modi actually say to Trump? Has he dumped India into irrelevance only to satisfy his ego? Now we are firmly hyphenated with Pakistan and all the other 'stans' in Central Asia (wikipedia). Well done.  

Bonds may be saying something.

"Prime Minister Narendra Modi yesterday hailed the next generation Goods and Services Tax (GST) reforms that will come into effect from 22 September 2025." "PM Modi said that with income up to Rs 1.2 million being tax exempt from this year, and the GST rate cuts effective from the first day of Navaratris, the common people and middle-class of the country will see a double bonanza." TOI. Mr Modi is known for his modification of facts. According to Congress leader Kapil Sibal, Mr Modi and his government "could only manufacture jumlas, statements and slogans." HT. A 'jumla' is an 'empty promise' (Mint). We also know that the state of Bihar is to hold elections to its assembly next month. wikipedia. Edelweiss CEO Radhika Gupta said that "while many professionals in urban India continue to describe themselves as middle class the actual income range for that group is much lower - between Rs 500,000 and Rs 800,000 annually." Only "about 100 million people earn the equivalent of $12,000-$14,000 (about Rs 1.056 million-Rs 1.232 million) annually." ET. Which means a very small fraction of the population will get the benefit of income tax exemption up to earnings of Rs 1.2 million, certainly not the middle class. GST started in July 2017 and annual collections were increasing slowly as more businesses came into the tax net. Collections started to soar from 2021-22 as retail inflation increased prices year-on-year (rateinflation.com) reaching a peak of Rs 2.37 trillion in April this year (Tata Nexarc). Since GST is a percentage of the final retail price and since inflation compounds year-on-year, perhaps it might have been wiser to reduce rates when prices were rising as that might have compensated for the fall in revenue. "Rising bond yields and depreciating currency." "Both reflect underlying market scepticism about the soundness of our macro fundamentals." "Reflecting this new reality, bond market yields have risen while the rupee has fallen a little over 3% this year." Mint. The Reserve Bank of India (RBI) cut its policy rate by 50 basis points (bps) in June to 5.5% (Mint) but the yield on the benchmark 10-year bond is at 6.503% this morning (Investing.com). "Worries over the impact of steep US tariffs on Indian exports have kept the rupee under pressure over recent weeks," while "Bond yields have jumped sharply recently, as concerns over demand-supply mismatch come to the fore, with investors facing mark-to-market losses on existing holdings." ET. What this is hinting at is that falling tax revenue, both direct and indirect, may increase government borrowing. An oversupply of bonds to finance a higher fiscal deficit will result in lower prices and higher yields. Hence Mr Modi's unscheduled lecture to spend more on local goods during the festival season. Will people do so? And do they have the money?        

Welcome back.

"On Friday night, President Donald Trump signed a proclamation imposing a $100,000 fee on H-1B visas, a program widely used by global and Indian IT companies. By Saturday night, the White House clarified the fee will only apply to new visas, not renewals or existing holders, offering partial relief." "The move threatened not only individual careers but also India's $250-billion IT services industry, which relies on overseas deployment." ET. "Principal Secretary to the Prime Minister, Dr PK Mishra,..said under its Capacity Building Commission, the Centre had been encouraging Indians working abroad to return to the country." DH. "The Capacity Building Commission was consulted through the Gazette of India on 1st April 2021." "National Programme for Civil Services Capacity Building (NPCSCB) - Mission Karmayogi aims to create a competent civil service rooted in Indian ethos." cbc.gov.in. This means bowing to the ground and saying 'jo hukam' (will do as ordered) to the Dear Leader, no matter how harmful for the people. In 2016, a completely irrational whim, obeyed by a servile "Indian ethos", resulted in the unbearable pain of demonetisation of Rs 1000 and Rs 500 banknotes (BBC) for the poor and the middle class. The claim was that black money, money on which tax had been evaded, as well as counterfeit notes would be destroyed. But, 99% of the demonetized notes were returned to the banking system and only 573,891 fake notes out of a total of 24.02 billion notes, close to 0%, were detected. Thus demonetisation was an "epic failure", wrote Vivek Kaul. Sadly, no 'Karmayogi' protested against this brutal assault on the Indian people. On 24 March 2020, Mr Modi perpetrated a total lockdown on the nation with just 4 hours notice, when there were only 500 cases of Covid-19. epw.in. Suddenly thrown out of jobs, with no money to pay for food or rent, millions of migrant workers, and their little children, walked thousands of miles back to their villages (TOI) with no help from the so-called 'Karmayogis'. "India's export sector is being 'strangled by a bureaucratic system'," security analyst and Observer Research Foundation Sushant Sareen warned, after fresh complaints from exporters about excessive documentation requirements." Apparently, "shipping a single container requires generating 17 to 18 different documents." BT. "Indian billionaires are quitting the UK and US but none of them want to return to India, according to RPG Group Chairman Harsh Goenka." "Tehseen Poonawalla, venture capitalist and internet personality, believes it's to do with 'tax terrorism' and 'GST extortion' and, of course, bureaucracy." HT. Thousands of faculty positions in universities lie vacant. "According to data from July this year, 26% of the total 18,951 sanctioned faculty posts in 46 Central universities are vacant." "No wonder, that of the college-educated youth in the 24-29 age group, the unemployment rate is more than 30%." DH. "Forget Harvard, Oxford or Toronto. Thousands of Indian students are now packing their bags for Kyrgyzstan, Cambodia, Malta and even North Korea." Zee News. Those left behind try for the unbelievable rewards of civil services. "India is squandering its brightest minds chasing a dream with a 99.9% failure rate, economist Sanjeev Sanyal warned, sharply criticising the civil services obsession as a 'complete waste of human resource'." BT. 'Karma' means action and a 'yogi' is an ascetic who would do no harm through his karma. Our lot are the opposite. Why would the NRIs come back?