If the US is concerned why are we so casual?

Although the official inflation rate in the US was 0.7% last year Americans put it at a much higher level, some as high as 10%. Why? Because the official rate is based on aggregates of different groups of goods and services, while individuals use particular product in each group whose price might have risen much more. Also prices vary in different areas, so household experiences differ. While the Federal Reserve in the US is very sensitive to inflation the authorities in India are casually indifferent. Yesterday a report from the State Bank of India suggested that the RBI should target 5% as the lowest rate for retail inflation. One reason why present Governor of the Reserve Bank, Raghuram Rajan was treated so shabbily, that he was forced to resign, is that he is seen as an 'inflation hawk'. Just a couple of days back he said that you cannot have " low inflation and lower interest rates ". Why this diametric opposite views on inflation and interest rate? Because they help the largest borrower, which is the government. If the bond yields fall the government pays less to service its debts and inflation erodes the value of the past debts. Thus when the Congress was running large fiscal deficits the debt to GDP ratio was falling because of high inflation. Citibank calculated that the debt to GDP ratio fell from 90% in 2003-04 to 68.5% in 2013-14. Low interest rate helps the rich to borrow cheap, because they can provide collateral, and buy up assets which makes them richer. Thus, very low interest rates after the crisis in 2008 has made rich people richer, so that 1% of people now hold $78.8 trillion, which is 47% of the total global wealth. The total value of real estate has reached $217 trillion, which is 2.7 times the world GDP. The middle class loses because savings earn less interest and the poor lose because high prices decrease their standard of living. Thus high inflation is a tax on the middle class and the poor and low interest rates help to transfer wealth from the middle class to the rich. Lower interest rates force people into physical assets, such as gold and real estate, to protect against inflation, while financial savings rate falls. The Bank of International Settlements warned that low interest rates lead to misallocation of capital because of easy borrowing. That has happened in India where business fellows have borrowed vast amounts, which they are unable to repay, so that banks are sitting on around Rs 6 trillion of bad loans. Like in the US, the inflation expectation of Indian households is far higher than the actual rate of retail inflation which was 5.76% in May. That is why Rajan said," We are abandoning the ways of the past that benefited the few at the expense of the many." That is why the few are furious and Rajan has to go. Scum.

This scarcity is not a management problem.

As Indians it is shaming to read that India has the largest number of poor people in the world. The reason people are poor is because they are not employed in productive, well paid jobs. There are fewer jobs because investment has fallen, people have lost jobs because exports have fallen 17 months in a row and there is an enormous deficit of skilled job seekers, so that companies are having to re-employ retired staff. So, how many people are unemployed? " There are 13 million people in the workforce, available for work, who are at present unemployed, 30% of them women. In addition, there are around 52 million people, 65% of them women, in 'disguised unemployment', such low-productivity work that withdrawing them would make little difference to to the level of output. Then there another 52 million, all women, who are not in the labour force but would be available for work if there were adequate opportunities for productive employment. Thus there are 117 million people, 78% of them women, who need to be absorbed into new and more productive jobs," writes a professor. The GDP will expand by 27% if women constitute half the workforce, said Christine Lagarde. The solution is simple: create more productive jobs for women and soon India will be a rich country. It may not be that simple. In Japan the number of women in the workforce has increased to 70.1% but the economy is still stagnating. Because women took jobs that men lost so the number of working men declined. Ominously, a report says that there will be fewer productive jobs by 2022 so that half a billion people will be stuck in agriculture, there fortunes dependent on the fickle monsoon. To create more jobs we need to increase our manufacturing but there are many hurdles, such as lack of skills, insufficient investment, difficulty of doing business, rigidity in labour laws and inadequate social security systems. Apparently, all our problems can be solved by '5S' solutions. What are they? " First, understand the System. Then project plausible Scenarios of the future states of the system. Thereafter, Steer Synergistic Solutions," writes a former member of the now defunct Planning Commission. What will this do? " The system model focuses on the interactions among forces. By focusing on the interactions, it anticipates fixes that can backfire, which conventional mangement systems approaches that pursue solutions in silos are often blind to." Quite, crystal clear. Why such alphabetical gymnastics? Because the author is trying desperately to be politically correct. He is avoiding the only solution that will surely work and that is: Reduce the population. If you cannot increase one side of the equation reduce the other side. It will balance.

If the roots of the economy are rotten, how will you make it grow?

After weeks of insults the Governor of the Reserve Bank, Raghuram Rajan announced on 18 June that he will not be seeking a second term when this one ends on 4 September, 2016. If Rajan is not really an Indian at heart and is seeking to wreck the economy, as Subramaniam Swamy alleges, he would have announced his decision of Monday morning and watched in glee as the stock market tanked and the rupee plummeted in value. Instead he announced his decision on Saturday, when markets were closed, giving the government plenty of time to use depositors money as it forced the SBI to act on foreign exchange, to keep the rupee steady, and to use life insurance money as it forced the LIC to buy shares being offloaded by foreign investors. In panic the government hastily announced new rules for Foreign Direct Investment which will apprently bring in a flood of dollars and create millions of jobs. We remember the FDI in multi-brand retail by the Congress, that was supposed to be a 'game changer'. We are to allow 100% foreign control of airlines, which means bye-bye Air India, and 74% control in existing pharmaceutical firms, which will enable the giants from the US and Europe to buy up our companies and put up prices. Wonderful. The other charge against Rajan is that he is a Congress agent, because he was appointed by the Congress and has kept interest rate unnecessarily high, thereby preventing new investment. The fear was that he was a Congress Trojan horse, who will choke off economic growth, so that the BJP loses the general election in 2019 and the Congress can form a coalition government with Rajan as the default Prime Minister, much as Manmohan Singh was from 2004-2014, while the real power will rest with Sonia Gandhi. In which case perhaps Mr Modi will remember the old advice," Keep your friends close and your enemies closer." As long Rajan was the Governor of the RBI he was forced to follow some decorum but as a professor in the US he can say or write anything he wants. And the Americans will listen. Who really benefits from Rajan's departure? Banks, which are hiding Rs 13 trillion of bad loans, and steel, real estate and infrastructure companies which have huge loans that they do not wish to repay. Israel had a problem with huge companies, owned by certain families, which controlled a vast range of businesses and had power to influence policy. As Governor of Bank of Israel, Stanley Fischer took on one such powerful business group, and won. Because the Prime Minister, Netanyahu supported him. Rajan lost to the crooks. Mr Modi is fond of reciting Sanskrit verses. We are not as learned as him but would like to remind him of one line which says," Swadeshe pujyate raja, vidvan sarvatra pujyate." Which means, a king is respected only in his own country, while a scholar is respected everywhere. Beware of chamchas.

If there is equality can you have leadership?

For 70 years after World War II political liberalism became the established norm for the world, especially in western countries. Social services for the disadvantaged, feminism, rights for homosexuals and minority rights were written into constitutions. The Soviet Union broke up, with domino effect on Czechoslovakia and Yugoslavia, and globalisation, under the supervision of the World Trade Organization, was supposed to bring wealth to every citizen of the world. Now the picture is completely changed, creating enormous rage among liberal intellectuals. " Every major power is struggling with economic, social, and political churning," writes a professor. " The global economic outlook is made more uncertain by the retreat of free trade." And," The major powers are also expecting the rise of clacking, madcap conservatives - religious fundamentalists, racists, hypernationalists, cultists, homophobes, anti-abortionists and misogynists." Anyone who is not a liberal, in other words. There is apparently a 1 in 5, or a 20%, chance of a fringe candidate grabbing power in a major western country. Although confident that common sense will prevail and people will deposit their faith in the far superior intellect of liberals the present situation is alarming. But when people vote in large numbers for Donald Trump they are labeled as " racist, sexist, xenophobic " and a " confederacy of dunces ". Not much respect for democracy there. Young people are angry as they see " social injustice on an unprecedented scale, massive inequities, and a loss of trust in elites - define our political moment, and rightly so ". For the first time since 1880 more adults are living with their parents than are living with a spouse or partner. This is because salaries have not kept pace with the rise in real estate prices, as the rich buy up more assests by borrowing at virtually no interest. The question is: Whose fault is it? If liberals have been running the rich countries then they should take responsibility for today's mess. If people lose jobs because China is dumping steel on world markets then it is reasonable to blame globalization for their misfortune. They vote for those who talk about protecting domestic industries behind high tariffs and tearing up trade deals. A study started in Britain in 1946 shows how the children of today have much less chance of climbing up the social ladder than just after the war. Economists have studied how to balance efficiency and welfare, but they do not formulate policy. Donald Trump is a racist because he proposes to restrict entry of Muslims into the US but Obama is a humanitarian even though he has killed thousands of innocent civilians, all Muslims, using drones. If everyone is equal there cannot be one leader. There in lies the problem with equality.

Bricks in the wall maybe, but not to be used as brickbats.

Here we go again. Another committee of so-called experts to suggest changes to school education. Our poor children have become guinea pigs for experiments, not for their benefit, but for small-minded political reasons. So what does this learned board recommend? It suggests a " futuristic curriculum ". What does that mean? Does it mean teaching computer programing, robotics or the basis of space travel? At the same time the committee recommends reducing " curriculum load " and encouraging " self learning ". How are children supposed to teach themselves 'futuristic' stuff? Majority of our children go to government schools where teachers are of poor standard, are used for supervising elections to municipalities, assemblies and parliament, and for ensuring midday meals are cooked properly, or face prison if any child suffers food poisoning. The learned committee recognises that learning in mother-tongue is the best but then goes on to propose that all children must learn Hindi, English and Sanskrit. Why Hindi? What about children in Assam, Gujarat or Tamil Nadu? India has 22 official languages, each with rich literature, music and culture. Granted Hindi has the largest number of speakers, because of the highest fertility rates in Hindi speaking states, and is widely understood, because of the popularity of Bollywood movies, but children with different mother-tongues will be at a natural disadvantage if forced to study in Hindi. " While the mother tongue can continue to be the medium of instruction, the study of Hindi is desirable to bring all Indians together as citizens of a single nation," says the report. This is clearly a political statement, to be condemned without hesitation. Tamil Nadu will not tolerate imposition of either Hindi or Sanskrit. They believe that Tamil is an older language than Sanskrit. Lastly, they recommend that students should be allowed to take Class XII Board exams from the internet, on demand. With millions of children how will anyone supervise candidates to prevent cheating? The main debate is about whether children should be failed or allowed to progress even if they have learnt less than their peers. What is most amazing is that all these concerned people do not seem to understand that each child has different capabilities and so some will need more attention than others, which is not possible when numbers are overwhelming. Clearly, the system needs to improve, but not by dumbing it down, which will hold back the brilliant students. After all 400 years ago Shakespeare went to an elite Grammar school. Finally, showing the prejudice and politics in our education system, a principal writes that children fail because " We are a caste-based hierarchical society ". Now he tells us. So, get rid of Hindus and the problem is solved. So easy.

We Indians have nothing to hide.

According to a Supreme Court lawyer an employee of Essar Group, an industrial conglomerate, has revealed that the company was tapping phones of several ministers and businessmen between 2001 and 2006. The whistleblower has since denied any links with the lawyer, who says that he has proof of being hired by him. We are used to all this in India. Politicians say something, withdraw it the next day and blame the press for quoting him out of context the day after. Albasit Khan, the alleged whistleblower, has accused the lawyer, Suren Uppal, of " sensing an opportunity to extract money from many corporate bigwigs, you created and concocted this story ". Uppal says that " Essar has won over Albasit Khan ". With money or threats or both? Do these revelations have any importance at all? In India, no. We had the drama of the Radia tapes which implicated politicians, top business fellows and journalists, who are household names. What happened? Nothing. Case closed. Essar apparently has a laid down policy of identifying VIPs, who will be helpful to the company, and providing them with 'hospitality', paying their medical bills and offering employment to their relatives. A survey showed that 66% of businesses believe that some form of bribery is acceptable. Hence, 80% of Indians believe that businesses are corrupt. An even larger number will agree that politicians and civil servants are corrupt. So, nothing happens. Bofors, 2G, Commonwealth Games, coal mines allocation, AgustaWestland, the list of scams is unending. Has anyone big gone to prison yet? No. Only the ordinary folks of Campa Cola compound lost their homes. The Mitrokhin archives reveal how the Soviets paid bribes to ministers in Indira Gandhi's government and maybe to her as well. This kind of revelation is usually followed by the same drama everytime. Opponents scream Congress is corrupt while Congress retorts that so are the others. Then all politicians agree that they are innocent until proven guilty. Which never happens because our munificient judges continue cases forever by which time many of the actors are dead and the nation has forgotten what happened in the distant past. A dispute regarding a property has taken 36 years to resolve. As for bugging phones, it is no big deal. The US National Security Agency can, and probably does, bug our politicians and civil servants at will. Since they store their black money in western banks they are open books to foreign powers anyway. Chinese hackers copy all our government's data at will. Google and Facebook know more about us than we know about ourselves. Maybe that is why the Father of the Nation went about in a loin cloth: A naked man has nothing to hide. Neither, it seems, does a naked nation.

The best way to ask for our money is to be polite.

While we support the Prime Minister in his efforts to reform the economy and his efforts to change the sclerotic mindset of glorifying poverty and we understand that India cannot become rich without top-class infrastructure, which cannot be done without lots of money, we cannot agree with his assessment that vast numbers of Indians are cheating on taxes. In a speech to tax officials he asked them to increase the number of taxpayers from 54 million to 100 million while being taxpayer friendly. That is like asking dentists to be gentle while pulling teeth. How is it the fault of tax officials when the government itself sees citizens as serfs to be punished unless they obey orders, however unreasonable they maybe. An article on 14 June warned us that advance tax for individuals had been advanced from 30 September to 15 June and anyone failing to comply would have to pay interest at 1% per month. Even China does not treat citizens with such brutal lack of respect. How can we be paying less tax when the Income Tax department had to refund Rs 1.22 trillion in excess collections? Since most refunds are in thousands of rupees imagine the number of officers being paid to do this useless job. If tax officers are urged to look for more taxpayers they are tempted to browbeat people. Hasan Ali Khan, a businessman in Pune, was asked to pay Rs 1.66 trillion in taxes, which was reduced to just Rs 30 million by the Income Tax Appellate Tribunal. The extent of wrong tax demands can be measured from the Rs 7 trillion in disputed taxes that the government will probably have to write off. Rich people have an army of lawyers and accountants to look for loopholes while we, the people, are helpless. If the government really wants to increase the tax base then it should help us to pay only what is legitimate income tax. For that everyone should have just one account number, preferably in a public sector bank. If a person wants to open another account in another bank or in a different city the permanent account number will be incorporated in the new account so that all information is automatically transmitted to the original bank. It will save a lot of bother by eliminating Know Your Customer formalities. Tax officers will be posted in each of these holding banks and will collect only the amount that is payable. They will also advise people on how to minimise taxes legally so that we do not have to pay accountants. The government may charge 1-2% of tax paid as fees for advice. This adversarial system was designed by the British. Our government should be trying to serve our interests. Only if it respects us.

Will a big shock help the world economy?

The European Central Bank is going to buy corporate bonds including those of Volkswagen AG, which cheated on its emissions tests and is facing billions of dollars in fines, and Telecom Italia, which Moody's and S&P regard as junk borrower. The ECB has been buying $90 billion of government bonds every month and analysts think that there are fewer bonds left to buy. Buying bonds by the central bank pushed yields down to 0.02% on German 10 year bonds. Recently, yields turned negative as fears of Brexit have grown. Compare that with a yield of 7.517% on benchmark 10 year bonds issued by the Government of India. The ECB cut interest rates to negative in 2014 and increased that to -0.40% in March of this year. The ECB wants European governments to increase spending to stimulate growth and increase prices but Germany is adamant in its refusal. In fact Germany is doing just the opposite by imposing severe austerity on countries whose economies are in recession, such as Greece. It is not just that German debts were written off by the Allied nations, it also gains because the common currency means that its goods are priced the same in 19 countries that have adopted the Euro and the weak Euro helps its exports so that it posted a record current account surplus of 30.4 billion Euros ($34.6 billion) in March, up from 21.1 billion Euros in February. The US feels that Germany is getting an unfair advantage from a weak Euro. The Bank of Japan also seems to be running out of government bonds to buy back in its program of quantitative easing and had introduced negative interest rates in January of this year. Japan's nominal GDP has been stuck at 500 trillion yen for about 25 years, which means it is stagnating but not contracting, as Brazil or Greece. Everything the government and central bank have tried has failed but it remains third richest country in the world, after the US and China. Of course, Japan is a small country with a homogeneous population, which is rapidly growing old because of very low birth rate, but a shrinking population means that per capita GDP is actually rising. When crisis hit Japan it was already a wealthy nation, whereas countries like China are caught in a middle income trap, the global economy was expanding, while now growth is anemic, and Japan was able to weaken the yen to increase exports, but now other countries are competing in weakening their currencies. The Federal Reserve in the US again kept rates on hold yesterday. Central banks cannot formulate policies, only governments can. But governments are constituted by politicians who are paralysed by the fear of losing elections. Experts keep on complaining but no one is listening. Perhaps a jolt, like the Brexit, will galvanise them. We'll see.

Which side do we take in this debate?

On 23 June Britain votes on whether to stay in the European Union in a referendum, which has been labeled Brexit. The Prime Minister, David Cameron is in the Remain camp. He says that the economy will suffer if Britain leaves the EU while the Leave side says that the only way to stop immigration is to get out. With 8 days to go the Leave side has a 7-point lead in opinion polls. So, who are the protagonists? " For the  EU are the prime minister and the leader of the opposition, the governor of the bank of England, the Confederation of British Industry and the Trade Union Congress, the World Bank and the IMF, along with Barak Obama and other international leaders. On the opposite side are those the New Statesman describes as the 'Brexit Odd Squad," writes Mark Tully. So, who are these odd fellows? " ....Boris Johnson, Donald Trump, Putin and Nigel Farage. Farage is the leader of the extreme-right UK Independence Party." You can almost smell rotten eggs. " It is trumpery that is attracting the 'Out' support. Like Trump, the Brexit campaigners are concentrating heavily on immigration, saying Britain must regain control of her borders by ending free movement of of EU citizens." If all these people are so odious why are so many ordinary people supporting them? Because they feel betrayed by the establishment controlled by the elite. " Whether it is dealing with Greece or with Brexit or Donald Trump, elites are batting for their interests and doing so brazenly. The IMF is very much part of that. For them, Trump is an outsider who owes them nothing and hence needs to be stopped. Similarly, Brexit may or may not be good for the Brits. They do not care about it. They know that it is disruptive to their interests and hence must be stopped," writes a consultant. " The only tool of persuasion that they have is scare tactics. That is what they deploy under the circumstances. Their contempt for the intelligence of the public is ill-concealed." The trouble is that the rich and powerful live in expensive houses where they have no contact with immigrants, whereas the poor believe that they are losing out on their entitlements because of immigrants. Cameron faced angry voters at EU debates. The incomprehension of the elite is expressed in strong language. " Democracy may be the preferred form of government, but it is not guaranteed to produce only tolerant and liberal outcomes.....Xenophobia, bigotry and sub-national and ethnic sentiment are never far from the surface when adversity strikes," is an angry response. Or maybe it is just fear of poverty and anger at exclusion. Remember the French Revolution? The shooting in Florida cannot be appeased by oil from the Middle-East. Labeling the justified anger as xenophobia only widens the gap between the elite and the poor. Whose side do we take?

Why can we not do the right things?

Venezuela has the largest proven oil reserves in the world. The economy is in such dire straits that there are food riots where people are looting food shops. The currency has collapsed to 1050 to the dollar in the black market while the official rate is 9.95 to the dollar. President Nicolas Maduro blames the opposition for hoarding food and the US for conspiring to topple his government. Since Venezuela imports all consumer products, including food, the collapse in the currency has caused inflation to rise to 524%. The opposition has collected millions of signatures calling for a referendum on Maduro but he is refusing. He has filed a case against a referendum in the Supreme Court where he is sure to win because he replaced 12 judges with his stooges when his party lost the elections for Congress. Although India has never suffered such a crisis, probably because we do not have oil, we should not forget the famine in the 60s, when we were rescued by the US, and the Emergency when Indira Gandhi appointed AN Ray as Chief Justice, superseding 3 judges more senior to him. Hugo Chavez resorted to fixed prices, which pushed goods into the black market, and resorted to subsidies, which took away the incentive for production. One day's minimum wage will buy 227 grams of beef, or 12 eggs, or 1,000 litres of petrol, or 5,100 kWh of electricity, enough to light up a small town. Instead of economic reforms Chavez proceeded to nationalise everything, from farms to supermarkets, banks, telecom, manufacturing companies and supermarkets. Production fell off while corruption boomed. The result is what we see today. This is not a fairy tale or something that happened in the past, like the Cultural Revolution in China. China seems to have learnt a lesson from the ravages of that period but people in India seem have learnt nothing from our history. A former professor writes that there is a crisis in agriculture, a crisis in manufacturing and a crisis in infrastructure. So what are his solutions to all the problems we face? " The role of the government, and the importance of public action, cannot be stressed enough. Without it, growth cannot be sustained, let alone be transformed into development that improves the well-being of the people," he writes. " ...the history of capitalism suggests that success at economic development is observed mostly in countries where governments and markets complement each other and adapt to one another..." The professor forgets that socialism was written into our constitution by Indira Gandhi, the government controls a lot of industries, and we have a plethora of social schemes to distribute handouts to the poor. The mystery is that why he did not write such an article during the 10 years of Congress raj when the economy was being trashed. The knowledge is already there. Just look.

A thousand cuts, one embrace at a time.

There can be no doubt that China is our biggest, most dangerous and most powerful enemy. It is doing everything in its power to stop India making any progress. Not just India, China is a threat to all its neighbors, including Vietnam, Japan, Taiwan and Philippines. Outgoing President of Philippines, Benigno Aquino twice compared the Chinese government to that of Nazi Germany. China's friends are Pakistan, the biggest state sponsor of terrorism in the world, whose business is controlled by its rapacious army, North Korea, a brutal dictatorship, ruled by a fat despot, and Zimbabwe, another brutal dictatorship, ruled by a geriatric despot. It is not surprising that China is blocking India's entry into the Nuclear Suppliers Group which was apparently formed after India's first nuclear weapon test in 1974. Three countries, the US, Russia and China, with the largest arsenal of nuclear weapons are members along with tiny countries like, Finland, Denmark and Iceland, which have none. This group was designed to stop countries from acquiring fissile material to build bombs but has not been able to stop Pakistan and North Korea from making their own atom bombs, with Iran on the threshold of making one. Prime Minister Modi is keen on renewable and nuclear energy which will allow us to meet our enormous hunger for electricity, while meeting our obligations under the climate change agreement. Out of the top 10 producers of uranium Uzbekistan, Namibia and Niger are not members of this group and so could meet our requirements of uranium but Modi wants an assured supply. India has just become a member of the Missile Technology Control Regime and also wants to become member of the Wassenaar Arrangement, which was set up to control dual-use technology for conventional arms and Australia Group, which was set up to control the production of chemical and biological weapons. Modi has obtained the support of the US, Mexico and Switzerland but China and Turkey are adamant in their opposition. China's military strength is underpinned by its economy, which is the second largest in the world after the US. We are no match for it in any department so we have to resort to 'death by a thousand cuts', just like China's stooge, Pakistan is trying to do to India. As China's economy slows down stress inside will grow. The Communist Party is terrified of losing control if large numbers of workers lose their jobs. So it tries to stimulate growth through more investment, fueled by debt, which has seen corporate debt balloon to 145% of the GDP. At the same time bubbles are building up which will burst at some point. We should increase pressure by building business with Vietnam, Japan and Taiwan. If Donald Trump wins in November that will increase the pressure further. If China implodes it will be a day to celebrate. We hope.

Does social media make us more stupid?

For us, of a certain age, the entire social media seems extremely stupid. Why would you post your second marriage on Facebook where it maybe discovered by your wife? Human beings are born inside walls, we grow up surrounded by walls, at home, in school and at work, and most people, except Hindus, are buried in caskets after death. Why then do we expose ourselves naked, sometimes literally, on social media? Are all human beings either exhibitionists or voyeurs? Weird behavior attracts weird people. Trolls are those who write threatening, hateful or abusive messages, protected by the anonymity of social media. Why is there so much anger? It maybe because people feel that no one listens to them. A study in Britain found that 55% of journalists saw themselves as Leftists, while only 18% are to the Right. In the US 4 times as many journalists are Democrats as there are Republicans. In India it seems that over 90% of journalists are Leftist, anti-BJP, minority-loving fanatics, completely intolerant of any other opinion. Sonia Gandhi can abuse Modi, calling him 'maut ka saudagar', which means 'one who deals in death', but a cartoon of Rahul Gandhi, showing him hiding from Modi, is removed. It is this lack of power or control that infuriates people. Messages on social media have to be brief. You cannot write an essay on the pros and cons of any issue whereas a few choice words of abuse immediately convey the anger. There is no excuse for threatening rape or violence but if you believe in freedom of expression you have to allow others to have their say. It seems that political correctness has become so extreme that it has become an intellectual prison. We have every right to dislike someone, and try to avoid that person, but even that dislike is being described as 'microaggression'. The tendency of liberals to label people as racist, sexist or nationalist is also abuse. If we say that feminism is a form of sexism we will be immediately labeled as misogynist. When suffragettes started agitating for the right to vote all politicians were men so it was men who voted to change constitutions to allow women to vote. Racism is bad but is tribalism in Africa not a form of racism? There seems to be a movement to make everyone uniform, regardless of gender, intellectual capability or cultural differences. Communism was an experiment in making everyone economically and socially equal. It failed spectacularly. People are different. Politics must include everyone and respect difference of opinion without being politically correct. Perhaps, people just need to have acknowledgement that their grievances have been respectfully considered. In the UK the Prime Minister is facing abuse on migration. In India, we will be in prison if we raise our voices against politicians. Hence the abuse on social media.

The sun could be the solution to droughts in India.

The Sun is a ball of hydrogen which has been around for about 4.6 billion years and is the source of life on earth. Surya Namaskar, or homage to the Sun, has been practiced in India for thousands of years. India has pressing reasons to harness the energy of the sun. We have 400 million people without reliable electricity supply, we have to reduce our energy bill, because we have to import most of our oil and gas, and reliance on fossil fuels is driving pollution to dangerous levels in many areas. The government is determined to increase production of solar power from 6.7 GW, or gigawatts, at present to 100 GW by 2022. The technology is still evolving and it will cost an estimated $140-160 billion, but it will also stimulate innovation and create new business opportunities. " We will see a rise of storage technologies, automation systems and a widespread industry as distributed rooftop solar projects take off. It will lead to the creation of a new ecosystem and support a vendor market for chemicals, glass and other materials used in solar manufacturing," said Santosh Kamath, of KPMG in India. As the world contemplates the arrival of peak oil and the terrifying prospect of irreversible global warming enormous amount of research is going on into how to harness the energy of the sun. There is research into bio-solar cells where bacteria are used to produce electricity, electricity from photosynthesis, electricity from light, floating houses, floating solar panels to override the scarcity of land, transmitting solar power without wires from space, power from energy harvesting trees, assured power by tracking the sun, boosting solar power by light sensitive nanoparticles and  concentrated photovoltaic cells. Sadly none of this research is taking place in India. India needs to manufacture solar panels and photovoltaic cells locally, which will save $42 billion and create 50,000 direct jobs and 125,000 indirect jobs by 2030. In January President Hollande of France laid the foundation stone of the International Solar Alliance, an alliance of 122 countries situated between the 2 Tropics, in Gurgaon in India. The government wants India to be at the center of global research on solar energy. With its vast population crammed into a small amount of space land acquisition is the biggest problem. Rajasthan has plenty of open land with sunlight throughout the year but Andhra, Telengana and Tamil Nadu are also building solar farms. If solar panels are built on the roof of every house we could generate a lot of electricity. In cities like Mumbai or Delhi most people live in flats so who pays to install the panels and who benefits from the electricity produced. The biggest problem with solar energy is that it is erratic, depending on the weather, so electricity suppliers are having to work on how to manage sudden surges or fading of power. We suffered from drought for 2 consecutive years. If we could produce unlimited cheap electricity from the sun we could desalinate sea water for all our needs. Homage to the sun will be truly deserved.

When desperation becomes a masterstroke.

666 is the number of the Beast according to the Book of Revelations. We, Indians do not have any such number but 6.6.66 was a very significant day for us because on that day the rupee was devalued by 57%, from Rs 4.76 to Rs 7.50 against the dollar. Since then it has been on a downward course until today when it has reached about Rs 67 to the dollar. As the rupee loses value it loses its buying power, so imports become more expensive, which means we have to spend more on our shopping. In 2013, India imported 144.3 million tons of crude oil, the cost of which will keep increasing as the rupee becomes weaker. The increasing price of crude is passed on to customers, which increases transport costs and hence the cost of goods. That leads to inflation. Since independence we have been running retail inflation at above 5% with drops into deflation in 1968 and 1975. Constantly increasing prices means that the buying power of the rupee is getting eroded, which is manifested in its exchange value against the dollar. On 28 August 2013, it fell to 69, creating absolute panic in markets and among politicians. If all this information is available to all surely our politicians should be using every effort to bring retail inflation down to low levels which will help the poor by keeping prices low? The problem is that price rises can be controlled either by reducing demand or by increasing supply. To increase supply means a huge increase in manufacture, which will need massive investments in infrastructure, such as electricity, roads and ports. Unfortunately, building infrastructure costs a lot of money and the benefits are obtained after many years, much before the term of the government ends. Politicians in India have understood that elections are won by distributing handouts to the poor and not by making the nation stronger. So, they spend government revenues on handouts, without increasing output, which leads to an explosion in prices, the rupee falls, which is when panic sets in and expenditure is severely cut to reduce fiscal deficit and interest rate is raised to control inflation. Having dropped to 4.83% in March retail inflation jumped to 5.39% in April and is expected to be higher in May. In his latest policy statement the Reserve Bank Governor held interest rate at 6.5% because of uncertainty about the inflation level. " We will have to figure out ways to attain 5% target set for Jan 2017," he said. Bond yields are also predicting a high inflation level. Why do we not learn from the past? Because a lot of people are dependent on sycophancy to politicians for their status. Some find the devaluation of the rupee by Indira Gandhi a "masterstroke". No matter that inflation rose from 5.8% to 6.7%. Depends on whether you are looking up, or down, isn't it?

Ambition is fantastic, even if the goal is very far.

The President of the US speaks to the joint session of the Congress in his State of the Union address. Yesterday Indian Prime Minister, Narendra Modi stood at the same podium to address a joint session of both the House and the Senate, chaired by the Speaker of the House, Paul Ryan and Vice President Joe Biden. He started off by quoting Abraham Lincoln and then went on to applaud US sacrifice on D-Day by quoting words from the American National Anthem," I applaud....India applauds, the great sacrifices of the men and women from 'The Land of the Free and the Home of the Brave' in service of mankind." Then he started clapping, which was very unusual. This got him his first standing ovation. He then talked about the Indian Constitution saying," For my government, the Constitution is its real holy book." Which was perhaps a gentle dig at the Congress which had denied him a visa in 2005 because of riots in Gujarat in 2002. This in a country where Obama would never be allowed to run for president had he not converted to Christianity. Modi had a little dig at the Congress Party in India when he said," I am informed that the working of the US

Congress is harmonious. I am also told that you are well-known for your bipartisanship. Well you are not alone. Time and again, I have also witnessed a similar spirit in the Indian Parliament, especially in the Upper House. So, as you can see, we have many shared practices." The joke was well appreciated but must have stung back here. After all, Indian politicians are not known for their sense of humor. Although his pronunciation is not English as She is Spoke he spoke with confidence and not as a supplicant from a poor country with millions of poor people, which has sustained our socialist politicians for 68 years. He gave the Americans a clear list of what he wants to do. A roof over every head, skilling millions of youth, electricity in every home and 100 smart cities. The US is known for its American Dream where the 'pursuit of happiness' is written into its Declaration of Independence, so they appreciate ambition, even if it is difficult to achieve. He did not talk about the famine in 1965 which was relieved by the charity of the US government but he referred to Norman Borlaug and the Green Revolution, which has made India self sufficient in food. This was not a Prime Minister having to devalue the rupee by 57% when western countries stopped giving us alms after the war with Pakistan in 1965, or the one who had to sell 67 tonnes of our gold reserves in 1991. His reference to maritime security was an indirect reference to China while his naming of terrorist groups was an open reference to Pakistan. For someone who used to sell tea on trains it was bravura performance.

Follow the Musketeers: One for all and all for one.

Yesterday the Reserve Bank kept interest rate unchanged at 6.50%, which had been expected by experts. In India low interest rates, regardless of retail inflation, is seen as a panacea for all economic problems, from low growth to low private sector investment. However, there is a fierce debate outside India about the cost-benefit ratio of low interest rates. The former Governor of the Bank of England has written that low interest rates borrow growth from the future by increasing short term spending but the effect is short term and results in low growth in the long term. Markets are focused on short term gains at the cost of long term growth, so take greater debt to buy assets. The crisis in 2008 was created by the then Federal Reserve Chairman, Alan Greenspan who kept interest rates low for too long, resulting in a real estate bubble. The subprime crisis was the result of the bubble collapsing. Perhaps Greenspan was lulled by low inflation because of cheap imports from China, which kept its currency weak by buying dollars, building up foreign currency reserves of over $4 trillion. Greenspan now says that western countries are stuck in low growth because of low productivity. It may not be that human beings are genetically hunter-gatherers, who are only concerned about instant gratification. That is there but it maybe because of different cycles. Ordinary people think in terms of decades. For example, saving for retirement, for buying a house or for children's education. Politicians think in terms of electoral cycles, lasting 4-5 years, while employees of financial firms think in terms of financial quarters, to increase their bonuses. Politicians are the most powerful because they set policies, central banks and markets react to those policies. Germany has been implacable with Greece for incurring excessive debts. Greece is having to borrow to pay back its loans, while the severe recession, with unemployment at 25%, means that its revenues are not enough to pay back the loans, which will keep on growing. Germany, on the other hand, is benefiting from negative interest rates, so that the government and businesses are getting paid for borrowing. Low interest rates allow the wealthy to borrow cheap to buy more assets, so that they are getting richer. The total value of all the real estate in the world is $217 trillion which is 2.5 times the total GDP of the world at $80 trillion. Which means that for the first time since 1880 more young people in the US are living with their parents than independently. The OECD has criticised governments for depending on central banks for growth and getting permanently trapped into a low-growth trajectory. Trouble is that politicians have to win elections, which means they are trying to increase growth in their own countries at the expense of others. In a globalised world that is causing low growth for everyone. Tough.

The Swiss know about money, we need to learn.

One topic that is guaranteed to arouse extreme passion is whether poor people should be provided with monetary help. Leftist liberals firmly believe in distributing welfare to the poor and political parties win elections by promising handouts. A lady was extremely impressed with welfare schemes in Tamil Nadu where Amma canteens are spotlessly clean and serving ladies are polite. However, she has confused social service with outright handouts. Waiver of loans to farmers has been tried many times before, always with bad results. Banks are left with huge holes in their balance sheets, it usually helps the rich because poor farmers borrow from moneylenders and banks refuse future loans to farmers who are marked as defaulters. Giving free electricity will only add to the Rs 800 billion debt of the state power distributing company. Most state electricity companies are bankrupt because of handouts by state governments so the central government has instituted a restructuring plan, called Uday, which will allow these companies to become free of debt. Amma canteens, Amma salt or Amma bottled water, on the other hand, are available to everyone, regardless of income, as the lady found out, and although cheap are not completely free. They are a service to the entire society and hence objections to them are muted. A couple of days back 77% of people in Switzerland voted against a proposal to provide a basic income of 2,500 Swiss Francs, about $2560, to every adult, whether they work or not, and 625 Swiss Francs to every child below the age of 18 years, in a referendum. Those in favor said that it would guarantee a dignified life for everyone, especially since robots and artificial intelligence will reduce the number of jobs for humans. Those against said that it would cost too much, will encourage people not to work and will result in a flood of economic migrants. Finland is experimenting with a similar scheme, paying 550 Euros to 10,000 adults, to see if it works. Strangely, Milton Friedman, the guru of free- market economics, supported such an idea as being better than a lot of social schemes. Since being elected Mr Modi has converted all handouts to Direct Benefit Transfer, in which subsidies are paid directly into bank accounts of recipients. Banks were encouraged to open zero balance accounts for the poor and benefits are transferred directly into those accounts. The government has saved Rs 36.5 billion by cutting out waste and theft. As one leftist acknowledges, such schemes are only possible in capitalist countries that create wealth and not in socialist India which has the largest population of modern-day slaves. The largest handouts naturally go to politicians, as a Member of Parliament wrote. Now that Switzerland is clamping down on black money maybe we will learn from the Swiss.

Make in India, but only for 10 years.

The only thing that India has in abundance, more than any other country in the world, is its population of 1.3 billion, with 65% below the age of 35 years. The only way our country will grow rich and powerful is if we are able to create jobs for all these young people and so Prime Minister Modi has stressed on 'Make in India' from his first day in office. After all, if we can put American satellites in space there is no reason why we should buy planes from them. But there are storm clouds ahead. In 2011 Germany announced Industry 4.0, which has been adopted by the rest of the world, with China aiming to get there by 2025. What is it? Industry 1.0 was mechanisation of production using steam, 2.0 was mass production using electricity, 3.0 used " simple " digitisation and 4.0 is going to be based on complex digitisation. What does it mean for labor? There will be jobs for unskilled labor at the bottom, presumably low paying, and highly skilled, high paid, jobs at the top, with nothing in between. There is already concern over 'hollowing out of the middle class'. India has about 10 years in which to make use of its demographic advantage before we are hit with massive changes in technology of production. Optimists say that technology will result in a dramatic increase in productivity and improve the way we live and work. How will that happen? Energy technologies will lower oil prices and renewable energy will be cheap. Biotechnologies in genetics and stem cells will improve health. Information technology will create an 'Internet of Things'. Manufacturing technologies will make products cheap through robotics and 3D printing. Financial technologies will make life easy through online banking and shopping. Defence technologies will reduce human casualties by using drones. The problem for economists is that they are unable to measure any growth in productivity despite such marvels in technology. So what gives? Productivity is measured as output per unit of input, which is taken to mean output per worker or output per hour. When productivity rises prices come down and the standard of living goes up. Some people say that most of the gains in productivity from improving technology have already been made, and watching movies on high speed internet is of little consequence, while others say that it takes time to change over from one means of production to another so the gains will be in the future. The nature of work itself has evolved from agriculture to manufacturing to services. India seems to have gone from agriculture, which employs around 22% of people, to services, without developing our manufacturing sector. The trouble is that a lot of today's services are free, so it is impossible to measure productivity. If there are no jobs how will people buy homes, gadgets and consumer items? Perhaps just migrate to other planets. 

The choice of parents is the lottery of life.

Bihar is in the news again. Last year it was famous for electing Mr Nitish Kumar as Chief Minister, in alliance with 'Jungle Raj', by defeating the 'Hindu nationalist' BJP. This year Bihar is famous all over the world because the topper in arts in Class XII Board exams said that political science is all about cooking, poor girl, while the topper in science could not answer a simple chemistry question. No wonder Bihar voted for 'Jungle Raj'. Yet vigilance was much stricter this year. Pass percentage for Class X students dropped from 75 to 46% and over 800,000 students failed. Education in India is not about learning but about getting a paper which will somehow get them a government job so that they are guaranteed a salary for life. In UP, 2.3 million applied for 368 jobs of peons, 25,000 were graduates and 255 had PhD degrees. 75,000 beggars, or 21% in India have passed high school, some even have college degrees. 'Jungle Raj' may be good at winning elections but scares away businesses. Who would want to work in a state where kidnapping is the most lucrative profession? School students are ignorant because their teachers are also from the same system, having managed to obtain pieces of paper by escaping detection. In Agra, in UP, 12,800 students appeared for the Bachelor of Education examination and 20,000 passed. Having a piece of paper improves chances of finding grooms for girls and increases the amount of dowry a man may demand. With no jobs to go around, convicted murderers, serving long jail terms, have become much wanted in the marriage market in Bihar. Access to education is similar for all sections of society in primary schools but the proportion of the poor children falls steadily as you go higher up. However, a lot of these arguments are based on rights of the poor rather than on how to improve learning. Here, middle class children have a great advantage because their parents are educated and so they learn a lot at home. Just talking to children increases their vocabulary, their understanding of situations and comfort with numbers. Also, middle class parents are likely to know more than one language, especially English, without which higher education and getting good jobs becomes impossible. " If your child learns English it's as if he or she has inherited 100 acres of land," said a Dalit scholar. Efforts to increase knowledge by force is futile as the US learnt from its 'No Child Left Behind' Act. Regardless, the Congress passed the Right to Education Act to provide more equality in education. That increased the cost of school education for the middle class and resulted in worse outcomes for the poorer children. How do you give equal parenting to every child. That is the real difficulty.

Is there no way back for the Congress? Depends.

It is now accepted that Rahul Gandhi will become the President of the Congress Party, the only question is when. There is no doubt or debate about this. Punjab Congress Chief, Captain Amarinder Singh said," Sonia Gandhi is a brilliant leader. I have said that she has been working (as Congress President) for the last 20 years. If she feels that the time has come to give it to a new generation, then she should pass it on and we will fully support Rahul (to take over)." Why this attitude of craven servility? Historian Ramachandra Guha believes that the reasons why the Congress cannot think beyond the Gandhi family are that they have always been in charge, they hold the party together, they control party finances and the rest of the members of the party are like servants of the family. It is true that the Gandhi name is recognized throughout India whereas other leaders within the Congress are known in their own states. The main problem is that, unlike the BSP or the Communists, the Congress has no specific ideology to hold it together and there is every chance of it falling apart, as different leaders fight to wear the crown. The Gandhi family is seen as the problem for the Congress but it is the only solution available to keep the party's election prospects alive. The problem Rahul Gandhi has is that he has been brought up in a cocoon of luxury and security so that he has no idea of how India, or indeed the rest of the world, lives. In that way his life is probably similar to that of Sanjay Gandhi, who is blamed for the Emergency and the decline of the Congress, even though Rahul appears to be a much nicer man. We do not know whether speeches and phrases, like " suit, boot ki sarkar ",  are written for him to recite by heart but how can he connect with people if he has no idea of how people live. Sonia Gandhi started life in an ordinary family in Italy and so probably has some memory about a life without scores of servants. Also both mother and son are assured of winning their seats from Rae Bareli and Amethi respectively, while Karti Chidambaram, son of the last Finance Minister, P Chidambaram, lost his deposit from the former Congress stronghold of Sivaganga. Some draw comparisons with the BJP losses in 2004 and 2009 to find a way back for the Congress, because the difference in the share of votes is only about 2%. In the absence of an ideology the Congress can win only by promising handouts but regional parties are on to that flimflam and promise even more, in a game of electoral poker. Scaring minorities about Hinduism unites Hindus against the Congress and there again regional satraps are more vocal. There is no Congress without the Gandhis, but it cannot win elections with them in charge. Like Tantalus, isn't it?

A curious race of unpopularity.

Speaker of the House, Paul Ryan has endorsed Donald Trump for president, even if it is lukewarm according to journalists. If the election is between Trump and Hillary Clinton the winner will depend on who is disliked more. 42% of voters will vote for Trump while 52% will vote against him and 44% of voters will vote for Hillary while 54% will vote against her. Both candidates generate more negative views than Vladimir Putin. However, that maybe because a president has direct effect on the lives of the people for at least 4 years whereas Putin is a remote threat. Bernie Sanders is seen in a much more positive light than both the front runners. And therein lies the problem for Hillary. While Trump is now the presumed candidate for the Republicans and can begin campaigning in earnest, without wasting money on primaries, Hillary is still unable to get rid of Sanders. She is not even sure if she is going to win California, even though California always votes Democrat and the popular Governor, Jerry Brown has come out in support. Sanders is a puzzle. He has always been an independent but he tended to vote with the Democrats to give them a majority, when needed. He decided to campaign to be the Democratic candidate for president only in 2015. At first it was all very polite and it was assumed that he will drop out quickly because most of the super-delegates had already committed to Hillary, but that has not happened. Sanders is determined to go the distance as if to make sure that Hillary cannot be elected. He has become less polite as the campaign has progressed. At times it seems that he has a personal grudge against Hillary. Why? Sanders is a Jew whose father came from Poland. Many of his relatives left in Poland lost their lives in concentration camps. Monica Lewinsky was also a Jew. Lewinsky was used by the Republicans as a pawn against the then President, Bill Clinton, but the Democrats ganged up against her. Hillary called her a " narcissistic loony toon " in a private conversation, blaming Lewinsky for her affair with her husband. Obama is seen by many as anti Israel and is despised by Israel Prime Minister, Benjamin Natanyahu. The nuclear deal with Iran is seen in Tel Aviv as capitulation to hardline Islamist state, which seeks complete destruction of Israel. Some people are absolutely convinced that the Obama administration has been actively working against Israel. Hillary Clinton was Secretary of State during Obama's first term and hence is tarred by his disastrous foreign policy. Whether all this has any bearing on why Sanders is so determined to play spoilsport is unknown. Also whether he will stand as independent as Ralph Nader did to defeat Al Gore against George Bush is not known. What is known is that out of the two unpopular candidates Hillary Clinton seems more insecure.

An elephant can run fast, once it gets going.

There is much happiness at the news that the Indian economy grew by 7.9% in the last quarter of the last financial year, ending 31 March. An analysis covering a period of 24 quarters found that 309 firms in the BSE 500 had an increase in net profits of 21.87%. That is very good news not just for the companies but for banks as well because they can hope that some of their bad loans will be paid back. With civil servants getting a bonanza of a 23.5% rise in their salaries and a prediction of a good monsoon this year consumer demand is expected to increase. All of which is very good news but in India there is always one limiting factor, and that is inflation. Growth in agriculture, forestry and fishing increased marginally to 1.2% from previous estimate of 1.1%, this despite a punishing drought over 2 years because of El Nino. However, manufacturing growth was 9.3% against an estimate of 9.5% and Index of Industrial Production rose by only 2%. This means that if consumer demand were to rise significantly prices will rise faster because of supply side constraints. After falling for 17 months the Wholesale Price Index turned positive in April, growing by 0.3%. The price of oil has risen to over $50 a barrel from below $30 in February, which enabled the government to keep the fiscal deficit at 3.9% by increasing taxes on fuel. We imported 202.1 million tonnes of crude oil last year at a cost of $64.4 billion, so any rise in the cost of crude will increase cost of transport and add to inflation. The good news for us is that Iran is planning to increase production of oil substantially after lifting of economic sanctions, which will put a lid on the price of crude. Another very good news is that the fertility rate in India is falling although the population will continue to grow because we are living longer. This is hugely welcome because already there is a crisis in providing jobs for the 12 million young people who join the jobs market every year. Wherever there is enormous demand there will be crooks to take advantage of the vulnerable. Private educational institutions have exploded all over the country to provide useless pieces of paper at the cost of millions of rupees to desperate students. Only 7% of graduates with MBA degrees are fit to be employed. The rest can only hope of getting less than Rs 10,000 per month, if they get any job at all. So bad is the shortage of skills that companies are re-employing retired people to get their work done. Vast numbers of people with poor education and low paying jobs results in very high inequality in income, which results in a high incidence of violent crimes. The government is giving loans to those who want to set up their own business, starting from Rs 50,000 to Rs 1 million, depending on the size of the business. If states reform labor laws growth will accelerate. India is mocked as a slow lumbering elephant. We may yet become an elephant on steroids.

Lessons are only for foreigners, we can do nothing.

A corporate consultant has written an article about the Ranbaxy-Daiichi deal, being very careful in his choice of words because India has a law against 'criminal defamation', to protect the powerful, and their friends. In 2008, Daiichi Sankyo bought Ranbaxy, an Indian pharmaceutical firm, for $4.6 billion, of which the promoters pocketed $2.4 billion for their 34.82% stake in the firm. Soon after the money was paid the FDA in the US banned drugs produced in 2 of its plants because of safety concerns. In 2013, Daiichi paid $500 million in fines to US authorities and pleaded guilty to charges of fraud and producing fake data to get fast approvals for its generic drugs. Recently Daiichi was awarded $400 million in compensation against the previous promoters for concealing bad practices in its plants. Exhausted by all the problems Daiichi sold the company to another Indian company, Sun Pharma for $3.2 billion in 2014. Ranbaxy was not the only one accused of bad practice. Many top Indian companies have been pulled up by the FDA in the US after inspection of their plants. In 2014, Germany banned drugs made in the Dewas plant of Ranbaxy. The reputation is so bad that the FDA has alleged that employees at drug companies regularly deleted bad quality control results and substituted fake results instead. Are the Americans being paranoid or racist, by nit-picking on Indian companies? In 2014, 13 women died of rat poison, mixed in antibiotics, in Chhattisgarh. So what are the lessons to be learnt from the Ranbaxy deal? The author recommends 6 points. The most important is," Trust but verify ". We would add that foreigners should start by asking Indian consumers which companies they trust. The real estate sector was seen as completely corrupt and controlled by organized crime. The government has passed a real estate law to make the sector transparent, so as to root out black money and collect more taxes. Citizens will benefit as a side effect. Some companies do have good reputation but managers have been trained never to accept any mistake and never to apologize, which means that they go on arguing that anything that goes wrong is the customers own fault, so that the company does not have to spend any money in solving the complaint. At least 80% of Indians believe that businesses are corrupt and 66% of businesses believe that bribery is acceptable. When you pay bribes up front you have to cut corners to make profits, which is why people do not trust businesses. Why are companies so crooked in India? Because the government controlled companies set the standard. We, the people, are the suckers. That is why a defamation law is so popular. In certain sections.