Are Indians born to be suckers?

Indians love physical assets, like real estate and gold. Those who have the money buy properties in the belief that with a population of 1.30 billion, and growing, and economic growth increasing disposable incomes for a growing number of people, demand for real estate can only keep on increasing. Therefore, prices will keep on increasing into the distant future. However, you cannot buy Rs 15,000 worth of property so those who have less money to invest buy gold. Rs 15,000 will get you 5 grams of gold. The reason for the love of physical assets is that deep down Indians do not trust the government to control inflation and they have been hurt repeatedly by high inflation with low interest rates which have eroded their wealth. So far half the value of any real estate deal was paid in cash, or black money, and with a succession of scams creating untold trillions of black money property prices were zooming. In 2013, Chief of ITC bought a house in Delhi, built on 800 sq yards, for Rs 850 million, in white money, which works out to about $1,500 per sq foot. Similar to prices in New York. What is he getting for this astronomical price? Only 55% of homes in Delhi are connected to a sewer network, the rest drain straight into the Yamuna River. Our drinking water comes from the Yamuna. The cycle of life. Politicians have mixed feelings about the real estate market in India. They love it because their black money is invested in real estate and the higher the prices the more the tax collections. On the other hand the state loses taxes on black money and criminals gain enormous power, so politicians have fixed 'circle rates' which are taken as the minimum value for any property. Circle rates have gone so high that sales of real estate have stalled so Gurgaon recently reduced circle rates by 15% to energize the market. When prices were booming people would pay for apartments before building work had started and builders would start many projects at the same time and use the money to complete old ones. A kind of ponzi scheme. With sales stagnant builders cannot complete promised projects and people are suffering. Instead of creating wealth real estate is causing financial stress and, if a price correction is severe, will suffer huge losses. Politicians and our business fellows do not want people to invest in physical assets and force down interest rate to give negative returns from bank deposits. They want people to invest in shares. This enables business fellows to borrow from banks by pledging their shares, so that effectively they are running companies without holding any stake in them. They are then at liberty to plunder the company without losing a penny. Sadly, the high price of gold and real estate has forced ordinary investors into stocks which are in bubble territory. In India there are 2 suckers born every minute.

The BJP does not want to become the Congress.

The government has accepted a retail inflation rate of 4% (+/- 2%) as its target for the next 5 years. This despite some fierce criticism of the Governor of the Reserve Bank, Raghuram Rajan by elements within the BJP. In India all wealthy people, and their friends in politics, are constantly arguing for low interest rates and since they control the media their views always make the headlines. Their logic is persuasive. Low interest rate will make it cheaper to borrow money, which will enable them to invest more in setting up industries, which will create more jobs and boost the economy. Trouble is that it is no point producing goods if there is no demand and demand can increase only if people have money left over after essential expenses, like food, education and healthcare. The debate is about whether policy rate should be guided by retail prices or wholesale prices. In western countries a rise in price caused by an improvement in quality is not counted as inflationary. This is called 'hedonic' rise in price. True, but prices of cars, cell phones or HD televisions are not counted in a family's expenses basket anyway. Indians spend an average of 30% on food as compared to a minuscule 6.5% in the US, manual laborers spend a far higher proportion of their income on food. If the cost of food goes up there will be less to spend on other expenses. The government can control the price of food by keeping a close eye on food production and importing those likely to be in short supply. That produces a clash with farmers, an important vote bank, who want higher prices for greater profits. Farmers suffer huge losses if there is a glut. Also the government must keep within its spending target to keep fiscal deficit in control. The RBI has brought down policy rate from 8% to 6.5%, which has resulted in a fall of 100 basis points in corporate bond yields, and growth has climbed to 7.95% but the clamor for still lower rates has not gone away. So why have politicians agreed with the RBI? Perhaps, the government is aware that the Goods and Services Tax, which will unify all central and state indirect taxes, will increase prices initially and there will be a loss of jobs as the informal sector is dragged into the tax net, which it has been evading till date. With competition disappearing the big boys will be able to jack up prices hurting consumers even more. Retail inflation has already breached 6% and will rise further as vegetable supplies start to fall. The GST will come into effect sometime next year and the full effect will be felt in 2018. With general elections in 2019 the BJP will be acutely aware of the collapse of the Congress in 2014 because it chose to ignore high retail inflation. Seems that the 'invisible hand' of Adam Smith works on politicians as well. Just as well.

Would every Indian run to the US, if given the chance?

We in India pride ourselves on being the largest democracy in the world. The US is the richest, most powerful democracy. Both countries celebrate independence from the British, the US on the 4th of July while we are celebrating today as Independence Day. The US became independent in 1776, went through a civil war from 1861-1865 and fought on the victorious side in the 2 World Wars. We became independent in 1947, the humiliation of the 1962 war still burns deep and we are still begging Pakistan for peace talks despite repeatedly winning wars against it and suffering repeated terrorist attacks on our citizens. The US is almost as safe as any country can be, with Canada to the north, Mexico to the south, the Atlantic to the east and the Pacific Ocean to the west. India is about as unsafe as any country can be, with Blagladesh and Myanmar to the east, China to the north and Pakistan to the west. Sri Lanka to the south should have been comfortable but our politicians have managed to create tensions by their interference. The US followed a capitalist system from the beginning, with private enterprise, based on enormous natural resources and incredible innovation. Initially. a lot of the wealth was built on free slave labor. We followed a socialist system from the beginning and despite the breakup of the Soviet Union in 1991 and the example of enormous wealth creation by Japan, Singapore, Taiwan and South Korea we did not change. The reason was the rise of dynasties, led by the Nehru-Gandhi family, which controlled political parties and whose sole aim was to grab and hold on to power, at whatever cost to the nation. So, poverty has been glorified, so that the vote bank maybe bribed with handouts, and the people have been sliced into tiny segments, which maybe excited by blaming caste, promising reservation and accusations of 'majoritarianism'. Any suggestion of punishing Pakistan immediately draws abuse for 'nationalism', while glorifying the nation is happily celebrated in the US, as has been shown by their athletes at the Rio Olympics. The US even has a patriot act. The US has the longest railroads and the largest number of billionaires in the world. The rich were called robber barons in the past and silicon sultans today. Yes they are ruthless businessmen who have created monopolies but in 1924 Henry Ford had brought down the price of a car from $825 to $260, making sure that everyone could afford a car, and doubled the minimum wage of his workers to $5 a day, creating a new middle class. Today, Google, Facebook, and Twitter are free and Skype allows you to talk for free across the world. There are problems in the US. There is growing inequality since the banking crisis of 2008, which led to Occupy Wall Street and there are regular riots as blacks are being shot by the police. Every Indian, including the commies, will immediately emigrate to the US, if given the chance. Maybe we will improve.

Employing cleaners to clean the system.

Lack of jobs and poverty are a great leveler, writes Prof Dipankar Gupta. In UP upper castes have been applying for posts of 'safai karmacharis', which means 'cleaners'. Actually, they have to sweep streets, clean drains and even climb into sewers, if they get blocked. Not something any upper caste would ever dream of doing, certainly not talking about. Any man doing such a job would have no hope of ever getting a bride from his own caste. Not just upper caste, graduates and some with PhDs have also applied for these posts. For 114 jobs of 'safai karmacharis' 19,000 applicants were graduates. Earlier we read about 2.3 million applications for 368 posts of peons. Whereas fertility rates in other states are falling below replacement levels UP was second only to Bihar in fertility rates in 2011, according to the Census Commission of India. 75,000, or 21%, of our beggars have completed Class 12. Prof Gupta thinks that upper castes working as cleaners, mixing with Scheduled Castes at work, living with Scheduled Caste neighbors in accommodation provided by the government and children playing together as they grow up will gradually eliminate caste barriers. Eventually, marriage between castes will become common place. Will it? People are applying for these jobs because they have to survive. Government jobs are permanent, meaning you cannot be sacked till retirement, pay a handsome salary of Rs 15,000 per month, have health benefits and pay a pension till death. Some people will hire a person to do their job at a lower salary, but without the other benefits, while they take on a second, more respectable, job. Already valmikis, who are Scheduled Caste, have demanded 100% reservation for these jobs for their people. So, we can expect some friction. Everyday 68,922 people reach the age of 25 years in India, that is 2.1 million per month. So what to do? The glib answer is to create loads of respectable jobs that pay living wages but the world is staring at a future where robots or artificial intelligence will take over vast numbers of jobs currently being done by humans. The only solution to the current crisis is to actively discourage the birth of children, but politicians are dependent on their castes for votes. The government is trying to provide skills to young people and giving them cheap loans to encourage them to start their own businesses. Why is it that Indians excel in the US but cannot innovate here at home? The quality of education in India is very poor and even that is not available to vast sections of children. It is shocking that only 31% of the richest section of society in urban India attend college. Why attend college if you have to apply for the post of 'safai karmachari'? No wonder our best brains leave.

Free of corruption? Don't be silly.

Last year India improved its position on the index of corruption, published by Transparency International, from 85 to 76. Our politicians are adept at passing strict laws, punishing people with severe punishment for minor offences, but corruption refuses to go away. The government is keen to implement the Goods and Services Tax to eliminate tax dodging by small businesses. Will it work? We hope so but already some are voicing doubts about how effective it will be. Why are our laws unable to clean up the system? Because politicians are at the root of all corruption in the country. India has not won even one medal at the Olympics and, except Saina Nehwal in badminton, there is not much hope of getting any medal at all. That has not stopped our Minister of Sports from throwing his weight around at Rio. The International Olympic Committee is independent of any government so what is the minister doing there? For that matter why do we even have a minister for sports? Under directions of the Supreme Court the Board of Cricket for Control in India, or BCCI, has to revamp itself completely within 6 months by getting rid of all politicians and civil servants. The same order should be applicable to all the sports bodies in India, including our Olympic Associations. Sports bodies should be controlled by sports persons and athletes, with help from professional managers and lawyers. They can raise finance from sponsorships and television deals. Naturally, they will be governed by common law, like any other professional body. As if India has not been humiliated enough by one goon another Sports Minister, this time from Haryana, is about to travel to Rio, along with his lackeys and flunkeys. Of course, our hon'ble minister will never look but contestants for Miss BumBum have been seen hunting for Pokemon in Brazil in their underwear. What fun. Winning an election is a ticket to complete freedom to do whatever a politician wishes. People see politicians breaking the law with impunity and so think that they can do the same. Corruption can be reduced as Kakha Bendukidze did, when he took Georgia 124th to 50th rank on the Transparency International index. There is no rule book for eliminating corruption but unless we go after politicians it can never be done. Rod Blagojevich, once the Governor of Illinois, is serving a 14 year jail term for trying to sell the Senate seat vacated by Obama when he got elected president. We must remember that in the US prison means prison and not a joke where you can get married on furlough, while serving a sentence for murder. Politicians have the power. So corruption is here to stay.

Isn't it cheating if you pay yourself more than you deserve?

An article on the rising salaries of CEOs in India says that this is a "healthy trend". " Regardless of what the critics say, rising salaries at the top almost always lead to an equivalent downward percolation, besides enforcing stringent performance goals," he writes. " If you were making Rs 20 crore a year, chances are you would work pretty hard to protect that package." That is not the experience in western countries. In 1965 a CEO would earn 20 times the average earnings of workers in the company. In 1978 they earned 30 times more, between 1990 and 2000 the difference jumped to over 300 times. CEOs get ludicrous salaries, not because they deserve to, or because they have magical abilities to increase profits of the companies they head, but because they appoint the board which decides on their compensation. " Firstly, CEO salaries are on a tear even though corporate profits haven't kept pace," he writes." Which is why Tata Motors is paying top dollar salary to its new CEO and managing director Gunter Butschek in an effort to lift the company out of its poor run over last so many years." Isn't it amazing. CEO salaries rise if they make profits and rise even more if they are making losses. Heads I win, tales you lose. Trouble is CEOs are not punished if they cause huge losses to the company and to shareholders. Daimler's acquisition of Chrysler was a disaster and the company had to sell it off at a huge loss. Nine years back Tata spent $12 billion buying Corus Steel in the UK. Now they are desperate to give the company away for free but can find no buyers because steel prices have fallen and no one wants to take on the pension liabilities. Unlimited salaries increase greed, leading to criminal behavior. The recent Volkswagen scandal, where it was found that the company was faking its emission results, is one example. GlaxoSmithKline paid $3 billion in fines for healthcare fraud. P&G was fined in Belgium for price fixing. Barclays, along with other banks, was fined for fixing London Interbank Offered Rate, or Libor, which is the international interest rate for banks to borrow from each other. " If you ain't cheating, you ain't trying," said one trader. It maybe a good thing if a CEO earns more than owners of the company because they get paid dividend as other shareholders. Apparently if a CEO is sacked the company's share price will drop which reduces market capitalisation. If share prices are high despite low profits then that is a bubble and will cause problems for the economy at some point. High private sector salaries result in knock-on effects on public sector salaries, which results in wasteful expenditure of government revenues. Undeserved compensation is immoral and borders on corruption. No one should be paid more than they deserve.

How do you modify hopes and fears?

The retail inflation rate in India has fallen from highs of over 12% in 2010 to 5.77% in June of this year, but 'inflation expectations' of ordinary people still remain high. Reserve Bank Governor, Raghuram Rajan has referred to inflation expectations in each of his policy statements and did so again in his last statement, last Tuesday, before he steps down. He kept base rate steady at 6.5%. This maybe one of the reasons why he has been treated so shabbily by politicians. What does it matter what people think when figures show that inflation is under control? It does matter. If people expect prices to rise at higher rate than interest paid by banks, as was happening under Congress rule, they will try to hedge by buying physical assets, like real estate or gold. How does the RBI know what people expect? They ask 5,000 people what their expectations are, of which 30% are housewives, 20% are self-employed and 15% are other employees. The RBI does not explain how they choose their sample, what questions they ask or how informed the people are. The survey is carried out every quarter so there maybe information bias, in that people will be influenced by current changes in prices, rather than over one year. Also, few people can make sense of year-on-year or the difference between GDP or Gross Value Added. Rajan has brought down inflation expectation from over 14% in 2013 to around 9% today but it was lower in December 2014. It maybe because interest rate was 8% in 2014, giving us a real interest rate of around 2%, while it is around 1% at present. Economists at IMF suggest that the fall in inflation in India is not so much because of the fall in the international price of crude, because that was not passed on to customers, but because of a fall in inflation expectations and lower minimum support prices for agricultural products. So Rajan has been partly right. But it is not just the stupid people, as politicians complain. 10 year bond yield in India is at 7.11% showing that markets do expect inflation to remain sticky. Yields on over $13 trillion worth of government bonds in the world have turned negative. Even after Brexit, yields on short term bonds in the UK turned negative. Not only in India, people in the US also estimate inflation to be much higher than it actually is. Politicians may sneer at us as ill-informed but economists are also unable to suggest remedies to the present lack of global growth. The sheer volume of data maybe causing a 'recency bias' in their analyses. Economists are studying human behavior to understand what advertising agencies have known for a long time. Perhaps, they have not understood the most important fact, which is that an economy is not just numbers, but is about people. And expectations are based on hopes and fears. You cannot quantify that. 

No one seems to care that machines are brainless. Why?

After the hanging chads farce of 2000, when George W Bush stole the presidential election from Al Gore, with a great deal of help from his brother, Jeb Bush, who was Governor of Florida at the time, there is great glee that the Bushes have been humiliated this time. If Bush was ditched by the people, as an establishment candidate and the third member of the same family to stand for president, then it is not surprising that Hillary Clinton is also profoundly disliked by voters. In fact, Hillary Clinton only managed to defeat Bernie Sanders in the primaries because of dirty tricks by the Democratic Party machine and Convention Chair, Debbie Wasserman Schultz was forced to step down. Now Sanders is trying to defeat Schultz in her primary in Florida. And we thought that our lot are the most corrupt in the world. So, if the Democrats rigged the primaries in favor of Clinton can they, will they, dare to tinker with the actual elections in November. After all, they are still smarting from the loss in 2000, with some justification, and a Democrat, Barack Obama is in the White House, and he desperately needs Clinton, to protect his tatty legacy, just as Clinton needs his soaring rhetoric to mesmerise the people. Andrew Appel, a Professor at Princeton, shows how easy it will be to hack into the voting machines. The manufacturers threatened Appel with lawsuits but he carried on his work quietly. Having invested millions of dollars on the machines governments in states started a process of giving printed receipts to voters. Now some states are going back to paper ballots, but the voter registration lists can still be hacked. That brings us to the most frightening thought of all, there is enormous enthusiasm for cars, trucks, trains, and maybe even aircraft without human control. What if any one of them is hacked and used for bad deeds, as happened in France last month. In India, where the majority of people are illiterate, there is an enormous faith in computers, encouraged by politicians, as some sort of divine intervention, which is completely infallible. We have hand held electronic devices, on which you press a button against the person you support. Very easy. Tell people not to come, or else, and then goons vote instead of the people. We are being seduced with the advantages of digital banking and how that will cut out all black money. Guess what? Ross Clark in the UK thinks that cashless society will give too much power to the banks to increase charges on customers. In India, our fear is that the government will be able to monitor every movement that everyone makes. We will be puppets in the hands of politicians, civil servants and police. Terrifying thought. India will probably return empty-handed from the Olympics. Why? The malign influence of politicians and civil servants. Simple. Implement Lodha Committee recommendations for all sports. The good thing is, everyone dies in the end.  

You cannot be smart if your ideas are from comic books.

It is amazing that the US has some of the top universities in the world, the largest number of Nobel Prize winners and a surfeit of well funded think-tanks and yet seems to have no clue as to the world outside its borders. Even those with PhDs from Ivy League universities have a black and white view of the world, in which the US is always good and anyone who disagrees is bad. Whether it is because they have grown up reading comics about cowboys and injuns, GI Joe and the gooks, Davy Crockett and Santa Ana we do not know, but education and travel should broaden minds and generate a greater understanding of other points of view. Christopher Smart, a senior fellow at the Kennedy School of Government at Harvard, no less, writes that Putin is wrong to support Donald Trump in his bid to become the next president of the US, by encouraging Russians to hack into Hillary Clinton's campaign servers. " Russian leaders also have a long history of agitation and propaganda, or 'agitprop' as their Soviet predecessors called the overt and covert campaigns to shape public opinion in foreign countries," he writes. Quite forgetting an unprovoked US war on Vietnam, Laos and Cambodia, support for mujahideen in Afghanistan, which led to the rise of the Taliban, which gave birth to Al Qaeda and Islamic State, and the disastrous regime change in Iraq and Libya. " To be sure, Russia's interests also include political dominance over its neighbours, which is what drove the ham-handed intervention in Crimea..." writes Smart. Perhaps, he should read about US support for dictators in South America which is why left-wing governments in Nicaragua, Bolivia, Venezuela and Brazil still have a jaundiced view of the US. As for Crimea, Russia only intervened after the extreme right wing government in Kiev, backed by the US and EU, started bombing its own citizens in the east of the country. Ukraine has turned into Europe's 'supermarket' for illegal weapons from where smugglers have to cross any border into Poland, Hungary, Czech Republic or Slovakia, all part of the Schengen area, and they can walk into Austria, Italy or Germany. Smart thinks that Trump's economic proposals may cause chaos in international markets, which may not benefit Russia. Russia's economy is suffering because of financial sanctions imposed by the Obama government over which Putin has no control. If there is chaos Russia maybe able to trade independently with individual countries. Putin has every reason to disrupt Hillary Clinton's campaign, if he can,because of her abusive language in the past. Calling him "ruthless, cynical and utterly unprincipled" is utterly stupid when the US is friends with Pakistan, a center of terrorism, is a key ally of Turkey, which is a member of NATO, and sucks up to China, which is at war with all its neighbors. If Putin is smiling, it maybe because he is lucky or because he knows what he is doing, having gone to school in the KGB. 

If we don't have the guts, at least we can hide.

So, India's Home Minister, Rajnath Singh received a hostile reception in Pakistan. Even Indian journalists accompanying Singh received barbaric treatment. Not surprising at all. Our government is well aware Pakistan has a state policy of trying to bleed India through a thousand cuts. In January Pak army was identified by Afghan police in the attack on the Indian consulate at Mazar-e-Sharif. Most Pak army officers support Jihadi terrorist attacks against India, according to an former Pak ambassador. The Pak government has a well rehearsed set of excuses with which to condone every murderous attack on India. Everyone knows all this, so that is not a surprise. What is astonishing is why India, a larger and much richer country, which has won every war against Pakistan, always surrenders meekly and gives up its gains, won through the blood of our soldiers. Fighting with antiquated weapons we were on the verge of a decisive victory in 1966 when Lal Bahadur Shastri stopped the fighting and then gave up all the territory at the Tashkent conference. Shastri died a mysterious death which has not been solved till today. If he was killed, as his wife believed, then the questions are 1. Who killed him, 2. Why and 3. If he was killed who signed the agreement? In 1971, 93,000 Pakistani soldiers surrendered to India. Indira Gandhi returned them without anything in return. All she had to do was to ask them to surrender to the Bangladeshis, who would have slaughtered each one of them, and Pakistan would have given us anything we asked for. One would have thought that an attack on the parliament in 2001, the center of our government, would invite a strong response from India but nothing. Atal Behari Vajpayee sent 100,000 troops to the border with Pakistan and brought them back after 6 months at enormous cost to the state and enormous inconvenience to our soldiers. The attack on Mumbai in 2008, in which 164 people were killed and over 300 injured, was followed by the sharam at Sharm el-Sheikh, when Manmohan Singh went on bended knees to talk peace. The present prime minister swore a bullet for a bullet when he was elected in 2014 and indeed our forces responded ferociously to unprovoked firing from across the border, taking Pak by surprise. Obama came running to India in January 2015 after which we have gone back to permanent 'peace talks', no matter how many Indians are killed by the scum. It is inexplicable why Pakistan is able to kill others, including US soldiers, and no action is ever taken. At last the US Congress has woken up to the danger of Pakistan as a terrorist state. We should take advantage of this. Declare Pakistan a terrorist state and shut off all relations. Build a wall along the border, lay land mines, so that even a rat cannot cross, and shoot at anything that moves. As China builds the Gwadar corridor in Pakistan, which is a massive land grab by the Punjabis, we may expect armed resistance from locals. Pakistan will implode, let China enjoy the results. 

You can never have too much money, can you?

There is silent war going on in India between the government and the middle class. The rich have accountants to advise them on how to avoid paying taxes and lawyers to file endless appeals to delay any judgement against them. The poor are dependent on subsidies to survive the constantly rising prices. The middle class has no escape. A system, called Tax Deduction at Source, or TDS, collects tax from any income, salary or interest on bank accounts, even before we receive the money. We have to claim refunds when we file our returns at the end of the financial year. If you do not know the complex rules you lose your money. Refund claims worth Rs 1.23 trillion are still lying with the government because the tax department is scrutinising the claims. This after tax fellows have paid out Rs 1.22 trillion already. Why are refunds held up? Because the government sets revenue targets on tax officers in the annual budget which forces them to resort to force, intimidation and sleight of hand to meet the targets. So what do we get for being terrorised to pay excessive taxes? Thousands of people die because of broken the roads every year. Roads are dug up by one government agency, say the water department, to lay pipes, repaired with poor materials and then promptly dug up by another department in an unceasing cycle so that contractors earn a fortune, part of which is shared with the departments which do the digging, as bribes. Money is needed to pay for the shocking rise in salaries and perks of civil servants who have been trained in all the ways to repress people. Some 8,167 people owe over Rs 767 billion to banks. They had borrowed money from friendly bank officials, probably under the impression that this was a gift which need not be repaid. Some bad loans are because of the weakness of the economy after the global crisis in 2008. Steel industry alone owes Rs 3 trillion to banks partly due to a fall in exports and partly due to dumping of steel by China which has produced 30% more than it can use. Because of high taxes and rising prices 47% of Indians are unable save for their retirement. Since we do not get any pension or healthcare for all the taxes we pay old age is a terrifying time of hunger and suffering. It is not surprising that India is one of the worst countries in the world for old people. However, not everyone is suffering. We know that civil servants are doing very well but politicians are doing even better. 34% of state ministers have serious criminal charges against them and 76% are multi-millionaires. Getting elected is financially very fattening it seems. That's the way the money goes and... 

Being blunt may win, flipflop will definitely lose.

Why is Donald Trump trying to commit hara-kiri? A man who has seen 6 companies go into bankruptcies and yet, according to Forbes, is worth $4.5 billion cannot be totally illogical. Yet he keeps making outrageous claims, only to withdraw them a few days later. According to some polls Hillary Clinton's lead has jumped to 15 points which probably means a clean sweep of all 50 states. This was the best chance for the Republicans to win back the White House after the disastrous 8 years of Barack Obama but Trump seems to be doing everything possible to ensure that he loses. When he joined the primaries nobody gave him a chance but he ended up with the highest number of votes any Republican candidate has ever received. He was clear on what he was going to do. He was going to build a wall along the border with Mexico, to stop illegal immigration, which would be paid for by Mexico, he would tear up NAFTA and other such trade deals, which transferred US manufacturing jobs overseas, he would levy over 40% tax on Chinese imports, because China manipulates its currency by keeping it undervalued, he would ask Europeans to pay for NATO, make it difficult for Muslims to migrate into the US and better relations with Russia. The media, mostly liberal, went hysterical, branding him racist, xenophobe, sexist, and anything else they could think of and could not understand why the people loved him. So they branded voters as dumb, racists and even pigs. Trump stuck to his positions and kept on repeating them, but now his campaign seems to be becoming increasingly incoherent. First, Melania Trump's speech at the convention seemed to be deliberately sabotaged. Someone had lifted 2 paragraphs verbatim from Michelle Obama's convention speech in 2008. Then, the Democrats produced Khizr Khan, a Pakistani immigrant, whose son, Humayun had died in Iraq trying to stop a suicide bomber. Trump attacked his wife as being a silent Muslim woman, which produced an explosion of abuse. All he had to do was say that one Pakistani did save American lives but hundreds of Americans have been murdered by Pakistanis in Afghanistan and in the US. The US paid $400 million to Iran for the release of 4 hostages in January. The money was paid in cash and in different currencies, packed in wooden boxes, instead of black plastic bags, exactly as ransom is paid for kidnapping. Obama denied that this was ransom. But then, Obama lied about Benghazi, about Libya about Bin Laden and so on. After ferocious criticism Trump withdrew his claim of having seen a video of the payment being made only for a video to emerge on YouTube showing exactly such a transfer. Not much time left. Trump must make sure of what he says and stick to it. Unless he is a stooge for the Democrats working for a Clinton victory. We hope.

Beware when crocodiles smile.

Dancing in the streets, shouting from rooftops and politicians exchanging sweets. Why? Because the Goods and Services Tax Bill, also known as GST, has been passed. This will combine indirect taxes levied by the central and state governments, such as excise, VAT, sales tax, luxury tax, entertainment tax, cesses and surcharges. We are told that a combined tax will reduce the overall tax rate for consumers so we, the people, will gain. If so, why are politicians so happy? We have to remember that politicians in India have only one aim in life and that is to get elected any which way, so that they can live in lavish bungalows provided by the government and draw magnificent perks, that will make a US Senator drool. To get elected they have to promise handouts to their vote bank, ranging from laptops to gold. Of course, if one party promises laptops you have to promise even more to lure voters, so the BJP promised laptops, color TVs and scooters in the Bihar election. And lost, heavily. All these handouts have to be paid for. We are being lulled by the lure of lower taxes on goods, although services will become more expensive, but politicians are celebrating because they think that GST will increase tax collections by ensnaring small businesses, which are avoiding taxes at present. Left wing economists are sceptical because they think that poor people may suffer. Alcohol, fuel, real estate, civil work, construction for factory and electricity are not covered by this act. Regional parties like to supply free electricity to farmers and the poor, resulting in accumulated debts of Rs 4.37 trillion for power distributors and losses of Rs 600 billion every year. The central government has started a scheme whereby states will issue bonds to borrow money from the market to pay off the debts. On the other hand taxes are very high on alcohol, fuel, factories and real estate already so scope for increase maybe limited. Some states charge a professional tax on every business and tolls on roads, taxes on taxis and road tax on vehicles maybe increased at will because they do not affect the poor. At present a company providing services in different states has to file consolidated returns 4 times a year but under GST such a company will have to file returns in each state, and presumably the center, every month. Each company will need an army of accountants. Small mom and pop enterprises have no hope of complying with such complicated regulations and will fall victim to predatory tax fellows. A lot of small businesses may have to shut down, decreasing competition and allowing big companies to increase prices at will. When crocodiles smile we should be wary.

Is it good for the people to be altruistic?

An economist, Siddharth Pai is puzzled by the relative lack of enthusiasm among venture capitalists to fund start-up companies run by women. In Silicon Valley, only 1% of start-up firms receive help from venture capital  and of that 1%, Asians comprise 12%, females 8% and blacks just 1%. Start-ups by women are "likely to be 15% more profitable on average, but are 40% less likely to be funded". Why? Economic theories were based on the premise that human beings always make rational choices and therefore the market is the most efficient way of allocating capital. No longer. Research shows that individuals tend to overreact to bad news, known as 'availability heuristic', which is why they tend to lose money on the markets. Thus, if there is a disagreement between 2 men ending in abusive language you just shrug and move on, but any abuse of a woman is likely to be extremely expensive, as Chelsea Football Club found out. What the article does not clarify is whether most venture capitalists are men, which would explain their caution, in dealing with women. There is enormous research into human behavior. A beautiful article by Charles Assisi explains how Paris makes a succession of wrong decisions when he chooses to abduct Helen, leading to his death and the destruction of Troy. Unfortunately, all the models to make correct decisions are not available to us when we are faced with a tricky situation which requires an instant decision. We are conditioned by our past experiences and social upbringing so a given set of facts maybe construed in an exactly opposite manner by 2 groups of people. This sort of opposing behavior can apparently be explained by Bayes' theorem. Economists may just be understanding human behavior but politicians have understood it long ago. Every living thing, including human beings, is governed by self interest. For instance a male praying mantis offers himself as food to the female to make sure that his genes are passed on and yet worker bees, which are female, do not reproduce but spend their lives tending to the queen. Human beings are motivated by self interest and yet we see heroic acts of altruism everyday. Is altruism also a selfish act? Indian politicians understand this instinctively. Every action they take is to increase their own power and pelf but presented as an act of altruism for the people. Taxes are disguised as subsidies to the poor but are actually handouts to win elections. Thus the poor pay taxes on goods and services to get handouts. Reservations are to help the downtrodden but a downtrodden cannot get admission to a college because primary education is dismal. GST is being presented as lower taxes but will increase taxes on mobile bills and electricity which the poor use. The mighty can be altruistic on our sacrifice.

The US election maybe decided in Europe.

Donald Trump's biggest problem is that he is not a lawyer, like Obama, Hillary Clinton or Khizr Khan, whose son Humayun died stopping a suicide vehicle in Iraq. Khizr Khan, a Pakistani who moved to the US in 1980, was used as a hitman at the Democratic Party convention. He accused Trump of not sacrificing anything for his country. But neither have Obama or Clinton. He also accused Trump of not having read the constitution. None of us have read the constitutions of our countries, but that does not make us any less patriotic. Khizr Khan obviously has, because he is an immigration lawyer, who must be looking for loopholes to bring in as many Pakistanis into the US as he can. Trump responded aggressively as he usually does, which has landed him in controversy. The liberal media has gone for his jugular while attacking Patricia Smith who lost her son in Benghazi. While the death of US Ambassador, Christopher Stevens, and the 4 Americans who died with him in Benghazi, was the fault of Obama and Clinton, who was Secretary of State at the time, Trump is absolutely not responsible for the death of Humayun Khan. True, one Pakistani saved American lives, but how many Pakistanis have taken American lives? But, apart from right wing TV hosts, everyone is vilifying Trump. Why so much vitriol? Because Democrats, and liberals who back them, are not really sure of a Clinton victory. The problem is that a Clinton victory will effectively be a third term for Obama. Obama desperately needs Clinton to win to protect his legacy because Trump is likely reverse most of the executive actions he is taking at present. In 2008, Clinton had her own opinions and policies but, having served for 4 years under Obama, has been successfully branded as untrustworthy by the Republicans for her evasive answers on the tragedy in Benghazi and deleting 30,000 emails on her personal server. Some claim that the National Security Agency has those emails and WikiLeaks is threatening to expose many of those emails to prove that she is dishonest. Liberals shudder at the thought of Donald Trump as president because he has no knowledge of politics and foreign affairs and his direct speech is seen as rude. But that seems to be exactly what the people want. Obama promised change by his speech of "yes, we can" and his soaring rhetoric created enormous enthusiasm among the people that he will deliver. Now they are disillusioned and want change, which is what Trump is promising. Normally blue states, like Ohio, have suddenly become uncertain. But maybe the election will not be decided by what politicians or the media say in the US, but in the airports or railway stations of Europe where another suicide attack will suddenly make Donald Trump sound very reasonable. We in India hope so. 

Same illness but very different remedies. How vexing.

A financial consultant, Anantha Nageswaran expresses disappointment with the International Monetary Fund. ' Monetary policy: Central banks should continue to use all available instruments to raise inflation, including negative interest rates, where appropriate, while carefully monitoring the potential impact on banks, pension funds and insurance companies as well as market functioning,' opined the IMF. Low interest rates reduce earnings of pension funds, cause asset price bubbles to form and encourage companies and people to borrow in excess, which they may not be able to repay when rates start to go up. The IMF is also advocating fiscal policies to stimulate growth, through increased spending by governments, which will add to government debt. " What the Fund's memo to G-20 tells us is that, when needed, official multilateral institutions pull back from warning the world of the dangers of asset bubbles that are massively divorced from the prevailing and persistent macroeconomic malaise," writes Nageswaran." Maybe their incentives and interests are not aligned with the recognition of dangers of the asset bubble." Why is the IMF blind to dangers of bubbles? Maybe because its own economists have changed their opinion, writes Prof Noah Smith. They found that "each dollar of stimulus spending produces much more than an additional dollar of economic output". Others have found "that government investment boosts the private sector rather than crowd it out". The IMF has realised that its previous policies aggravated and prolonged the pain of recession, as happened to South Korea in the 1990s. Denmark introduced negative interest rate in 2012, starting at -0.1% it has reached -0.65% today. Although banks are not yet charging retail investors for keeping money in banks they are charging companies. People who borrow from banks get interest which is taxable. Easy money has unleashed a construction boom, as property prices have gone up, but because foreigners are not allowed to buy properties in Denmark there is no sign of a bubble as yet. Strangely average retail inflation rate has actually decreased from 2.41% in 2012 to 0.22% in 2016, the opposite of what one would expect. Since the efforts of central banks and governments have failed to stimulate growth discussion is turning to 'helicopter money'. In June 18 members of the European Parliament wrote to the President of the European Central Bank to consider every option including "citizens' dividend, using 'helicopter money', and the buying of bonds from the European Investment Bank". Clearly what apply to rich nations with very low inflation rates do not apply to India with its humongous population and a high retail inflation rate of 5.8%. Yields on German government bonds are negative while yields on our bonds are at 7.16%. Although low growth is a common disease treatments are completely different. What to do?

Tax the poor to help the poor, a difficult balance.

Like any company sets targets on sales people the government sets targets on the tax department to arm-twist as much money as it can out of hapless citizens. Unfortunately, vast majority of citizens are too poor to pay income tax so last year there was a shortfall of Rs 300-350 billion in revenue collection, which upset the Revenue Secretary. Unless we pay up the humongous pay rises of civil servants, as recommended by the Seventh Pay Commission, will raise fiscal deficit, which will give the opposition a chance to criticise the government. Not good. So our income tax fellows came to an arrangement with the State Bank of India, which has assets in excess of Rs 20 trillion, which paid Rs 100 billion on 30 March, 2016. On 1 April, the first day of the new financial year, the tax department refunded Rs 95 billion to SBI. In total tax fellows refunded Rs 250 billion in the first week of April. Two tax officers were transferred for this sleight of hand, causing resentment among tax fellows. The Indian Revenue Service Officers Association has passed a resolution accusing the revenue department of going beyond its mandate. They have a point. The tax department paid back Rs 1.22 trillion in 21 million refunds last year. Why? Because the government collects excess of taxes to meet its expenses, in what is known as TDS, or tax deduction at source. Last year indirect taxes, which comprise taxes on goods and services, raised Rs 7.12 trillion out of a total of Rs 14.54 trillion. This means that direct taxes, comprising of income tax, corporate tax, wealth and capital gains taxes raised Rs 7.42 trillion. About 4% of Indians file income tax returns and only about 1% actually pay taxes. In 2001, direct taxes contributed 36.31% of total taxes, rising to 37.7% in 2013, while in the US the share of direct taxes was 75.8% of the total. Rates of indirect taxes were raised in 2012 as well as the number of services that were to be taxed and this government has increased rates from 12.5% to 15%. Despite this, or maybe because of higher rates, the share of indirect taxes has fallen and the share of direct taxes has increased to 51% of total taxes. Various governments have tried to unify all indirect taxes under a Goods and Services Tax regime but this has been opposed by states who see a loss of powers to raise revenue. High rates of indirect taxes are seen as regressive because even those who are too poor to pay income tax are compelled to pay taxes on goods and services. Many countries already operate some form of GST but India is more complicated than most countries because we have a plethora of political parties who compete to win elections by promising ever increasing handouts, 'to help the poor'. Which means they are hungry for more taxes. If there is a cap on GST it may impose discipline on politicians. We live in hope.

If we can't build sewers, how will we build towers?

After 2 years of drought the monsoons are back. All Indians should be delighted as the rains clean the air of pollution, the land turns green with new grass and reservoirs fill up, so that there will be no need to transport drinking water by trains. Sadly, there can be no joy for us, because our government rules us instead of serving us. Couple of days back people were stuck in traffic for up to 6 hours in Gurgaon after a rain shower. India is a tropical country and cloudbursts are not uncommon so drains should be built to cope with heavy rains. How difficult is it to build proper drains? Between 1859 and 1868 Joseph Bazalgette built 82 miles of sewers in London at a cost of 4.2 million pounds. If that is bad, then Paris built its first sewer in 1370 and even has its own museum for sewers. Which means that building an effective sewer system should be child's play, right? All we have to do is copy what others have done. If we have any doubts just invite foreigners to build it for us. Of course, they will charge but they will complete the project on time, the sewers will last for at least 100 years and by ensuring smooth flow of traffic will save a fortune in wasted petrol and productivity. But this will not happen. Why? Because the project will take a few years and so will not help in winning the next election, and there is a lot of money to be made from illegal construction which block water outflow. Anyway, the monsoon lasts for a couple of months only, there may not be a cloudburst and people forget quickly, so who cares if people, especially women, are stuck for hours with no bathroom in sight or if thousands die, as happened in Kedarnath in 2013. There should be no lack of knowledge. The government has spent Rs 2.5 billion of taxpayer money on training civil servants in foreign lands. To learn what? We should have the right to examine these fellows on what they have learnt, apart from enjoying themselves that is. It is not wholly their fault. Politicians want civil servants to be grateful and suppliant and not get uppity. They do not want someone with an independent opinion, like Reserve Bank Governor, Raghuram Rajan who said that the economic growth was like that of a "one-eyed king in the land of the blind", when politicians were bragging about 7.56% of growth of the economy. Recently, former Governor, Subbarao has written a book detailing how Congress fellows put him under enormous pressure to reduce interest rates even though inflation was soaring. Now this government forced Rajan to resign by its nasty behavior because he has not reduced rates by as much as politicians demanded. They never learn do they? Congress fellows were bragging in Davos about growth rates of over 9% before the economy sank. Rajan is not a civil servant so he refuses to toe the line. Politicians and civil servants, waterlogged streets and sinking economy.

They have power, just show them how.

Activist called Bezwada Wilson has been awarded the Ramon Magsaysay Award along with a singer, TM Krishna. Bezwada Wilson has been working to eradicate manual scavenging, which is cleaning faeces from homes and railways. Seems that some homes still continue to use a commode system for evacuating bladder and bowel which are then cleaned by these scavengers. It is disgusting and degrading work and must be eliminated but, as with any other human activity, it is not so simple. Firstly, those who are doing this work have to be found new avenues of earning a living otherwise they will starve and secondly, those who are still using this system need to upgrade their toilet facilities. Which means connecting them to sewers or building septic tanks. Sewers can only be built by municipalities or state governments and miles of sewers to connect every village will be enormously expensive and the sewage thus collected has to be disposed of in a safe manner. Individual septic tanks are cheaper but even so households may not be able or willing to bear the necessary cost and there is a danger of contaminating the water table. Unfortunately, the best intentions in India become a reason for bashing Hindus. Apparently it is the fault of upper castes and they should be punished for it. No one is forcing these people to do this work and they should just stop doing it, forcing people to upgrade their bathrooms or go out to the fields. Dalits are not powerless as they have shown in Gujarat by refusing to remove carcasses of dead cows, after some were assaulted. Faeces is undigested food and every creature that eats, animals, birds, fish and insects, has to get rid of that waste so that it is able to eat again. Even unconscious patients, who are not eating by mouth, pass faeces, consisting of dead bacteria, which reside in the gut. In foreign countries, nurses, who are well paid and respected, clean patients and are not considered to be slaves. Women who work as scavengers are probably illiterate, so will not be able to work as nurses, but could be trained as nursing assistants, to clean patients, do dressings and chaperone male doctors, when nurses are busy. Trouble is that they will have to leave their villages and go to towns where hospitals are located. That is where Mr Wilson should be paying attention. Meanwhile, taxis and autorickshaws went on strike for 3 days against app-based taxis, such as Uber and Ola. As usual Chief Minister Kejriwal was quick to blame the BJP for instigating the strike. But, auto drivers are all fervent supporters of Kejriwal and helped him win the election. One short shower brings Delhi to a standstill because drains have not been cleaned and roads are broken. Is that the fault of the BJP? We seem to have an infinite capacity to avoid the truth. Maybe that is why we are so poor.

Has Hillary Clinton won already?

The Democratic convention is coming to an end. Tonight Hillary Clinton will accept her nomination as candidate for the presidential election in November and they will all go home for the campaigning to begin in earnest. From the speeches it seems that her victory is assured. Even right wing media channels, like Fox News, gives Clinton 201 solid electoral college votes plus 26 which are leaning Democrat, for a total of 227, while Donald Trump has 154 solid votes plus 37 which are leaning Republican, for a total of 191. So, Trump needs 79 more electoral college votes to get to the magic figure of 270 while Clinton needs just 43. Under the electoral college rules a candidate who wins a state by even one popular vote takes all the electoral college votes which makes elections almost impossible to predict. Eulogizing Hillary Clinton, Michelle Obama said," I want a president who will teach our children that everyone in this country matters, a president who truly believes that our Founders put forth all those years ago...." Even if she is a " Hildebeest " Michelle? In his speech today, Barack Obama said," I can say with confidence there has never been a man or a woman, not me, not Bill, more qualified than Hillary Clinton to serve as the President of the United States of America." But she is still second choice, because your party rejected her in 2008. Why are the Obamas campaigning so hard for Clinton, despite deep mutual dislike? Because Obama has no legacy without Clinton. Trump got 13.4 million votes in the primaries, Clinton got 15.9 million and Bernie Sanders got 12.2 million. Clinton has raised 10 times more money than Trump, so she should be a certainty. But doubts still linger. It is not sure that supporters of Bernie Sanders will vote for Clinton after Debbie Wasserman Shultz, the Democratic National Committee chairwoman had to resign after leaked emails revealed how the party had conspired against Bernie Sanders to make sure Clinton won the nomination. Seems that Russia was behind the leaked emails. As Senator and then as Secretary of State Clinton used abusive language against Putin so he hates her. The armed coup in Ukraine was clearly engineered by the west to look like those in Arab countries, known as Arab Spring, and has effectively divided the country in two. Obamacare is in difficulties as insurance companies are running into losses and 8 years after he pomised to close it Guantanamo still remains open. For us in India Obama has been an unmitigated disaster because of his open support for Pakistan and he would have presented Pakistan with another 8 F-16 fighter jets if the Congress had not stopped it. He still has another 6 months to reward his friends for giving him Osama bin Laden in 2011 to win re-election in 2012. For us another 4 years of an Obama clone will be a continuing disaster. Let us hope that fortune favors us. 

Why continue with remedies that don't work?

In the last few days we have seen an outpouring of articles lauding the reforms of 1991. Now, Prabhat Patnaik, a Professor Emeritus at JNU in Delhi has written an angry, if incoherent, article criticising those reforms. He says that the reforms did not produce a 'retreat of the state' in favor of 'the market' but a change in the nature of the state." This means that instead of a state that apparently stands above all classes even while promoting capitalist development, and that protects traditional petty producers, including the peasantry and the workers, against encroachment from capital.....the 'reform regime' creates a state that becomes exclusively concerned with the interests of the globalised capital, and the domestic corporate-financial oligarchy aligned with it," he writes. So what is his solution? Increased taxes on the wealthy, price support for crops, easy creadit to farmers, quality education and health care. All these have been tried before under 'garibi hatao' campaign, which led to the crisis which led to the reforms of 1991, but even after 69 years of socialism India has the largest number of poor people in the world. He has special anger against the middle-class which has " emerged as a votary of the 'development' paradigm of the 'reform regime' and thrown its weight behind the corporate-financial oligarchy whose share of wealth and income has increased phenomenally under this regime." It is true that the number of rich people in India has grown but that is true for the rest of the world as well. A pathetic 3.2% of people in India are considered to be middle-class, of which 2.6% are in the lower middle, with an income of $10-20 per day, and 0.6% are upper middle, with an income of $20-50 per day. Anyone with an income of $20 per day, that is $7,300 per year, would be considered very poor in any western country and is lower than 'dibao', that is minimum income, in China. What is puzzling is what the professor is demanding. Does he want his favourite peasants and workers to stay as the proletariat or does he want them to climb up the social ladder? As the poor climb out of poverty they will inevitably become middle-class. The number of people who go from poverty to billionaire can be counted on the fingers of one hand, which is why they make such good stories. For the rest, it takes 2-3 generations of education and very hard work to make it to the upper middle-class category. The professor wants job creation but creating jobs needs investments, investments need capital and capital always looks for profits. That is the nature of the beast. The future is with robots, which are capital intensive but do not create jobs for humans. There is only one solution and that is to reduce the number of humans. There is still time but not much. Professors should devote their time to find out how best to achieve that. 

Why can't we get rid of 1991?

It is 25 years since 1991. Obviously, so what? In 1991 India nearly went bankrupt and was close to defaulting on its debts. This was a crisis in balance of payments which is a balance of exports, imports and investments. As a result of the crisis the Reserve Bank had to sell 67 tons of our gold reserves to secure $2.2 billion in loans from the IMF to steady the ship of state. From the flood of articles in news media 1991 is being celebrated as 1947, the year we became independent from the brutal British rule. The credit really goes to Narasimha Rao who was the Prime Minister at the time although the Congress has airbrushed him out of history because of the contrast with the Nehru-Gandhi dynasty, which was responsible for the mess we were in. Instead the Congress conspired to give all the credit to Dr Manmohan Singh because of his unquestioning devotion to The Family, but we know that Singh could not have been responsible for the reforms 25 years ago because of the way he presided over a near repeat of 1991 in his 10 years as Prime Minister. Unlike Narasimha Rao, he chose to hang on to his kursi, or chair, rather than go for reforms, to improve the eonomy. Politicians do not have the courage to take on the pit bulls of socialism who keep snapping at their heels to increase handouts to the poor, leading to inflation, which hurts the poor the most. The result of slow creeping reforms is that jobs are not being created. In 2012, 23.53 million men were employed in the organized sector, where wages and benefits are much higher, compared to 23.61 million in 1997. The number of women in the organized sector has increased. Total number of employment in the organized sector has increased marginally from 26.73 million in 1991 to 29.58 million in 2012. The share of manufacturing was 16.4% of GDP in 1989-90 but, despite muscular efforts by the government, it was lower at 16.2% in 2015-16. The combined fiscal deficit of state and center was higher in 2014-15 than in 1995-96 while tax-GDP ratio was slightly lower than in 1991-92, despite rising incomes. One reason why the tax base is not increasing is that most of the employment has been in the unorganized sector where all payments are in cash. Craftsmen earn more than engineers. Government is spending more on salaries and social schemes than on infrastructure. Job creation is weak because manufacturing is stagnant which was supposed to boom with the dismantling of the license/permit raj. It has not happened because most of the growth has been in real estate because of the phenomenal rise in property prices, which probably accounts for the increase in earnings of artisans. The real estate market is comatose, partly because properties are too expensive, partly because the circle rates have been increased too high, demanding a higher share of the price in white money, and partly because of the crackdown on black money. So the hysterical demands for lower interest rates. But that will only increase inflatinflation. Shades of 1991 still haunting us.

Can we create wealth without improving?

A report by the World Health Organisation says that more than half the doctors in India in 2001 did not have any medical degree. The WHO underestimates the problem. All those with degrees in Ayurved, Unani and Homeopathy actually practise Allopathic medicine, when their training is completely different. The Deputy Chairman of the Planning Commission, thankfully dissolved, noted that doctors do not need to have a MBBS degree, while presenting the report to the then Prime Minister, Manmohan Singh. Will anyone without a proper degree be allowed to practise law or accountancy? If not, why are politicians so contented with uneducated doctors? Because politicians and civil servants have given themselves the right to go abroad for medical treatment, entirely financed by the taxpayer. With 'attendant'. Who are the people availing of services by quacks? Poor people. A lot of these people are not fully literate and so do not know abbreviations for proper degrees. They are impressed by a jumble of alphabets after the quack's name, which are just fake. It is not difficult to get rid of quacks. First, publish a list of accepted degrees and make it a cheating offence to fool people with fake degrees. Second, if any patient dies after treatment from a quack he will be deemed guilty of murder. Only very few people will have the guts to become quacks. Why don't they do it? Because then poor people will have to visit proper doctors, who will naturally charge more, which may lose votes. Why are poor people so ill-informed? Because government schools are dark pits of ignorance, where more importance is paid to midday meals. Private schools teach better but are expensive. Annual cost for one child at a Delhi school was around Rs 1,30,000 last year. This is not the most expensive school in Delhi. Education is essential because good jobs are not being created. Most jobs are created in manufacturing but this sector is not growing and there is little new investment. The reason is that companies have taken on too much debt which they are unable to repay. Banks will not lend unless the old loans are paid back. The weak global economy means that exports have been falling for 18 months in a row although exports have risen in June, for the first time in 19 months. Education is vital to get good jobs in the knowledge economy. In this situation of enormous demand for jobs how is an employer to know which candidate is better. That is why marks in examination is so important. To get marks students learn from cheat sheets called kunjis or 'Pass Books'. The solution is not to stop all examinations in schools because then teachers have no incentive to teach and because parents cannot gauge a childs weakness and what extra help she may need. So-called intellectuals in India see 'meritocracy' as elitist and want to bring standards down. That is why they want to get rid of exams. Better to spread ignorance.