It's all about how secure you and your money are.

India's credit rating is at the lowest investment grade. "The debate so far has largely been focused on a narrow set of rating drivers, such as India's low external debt, high growth rate, fiscal deficit and some irrelevant factors like the size of India's economy," wrote Deep Mukherjee. A sudden downgrade is unlikely. "While a sovereign rating has limitations, it is informative for investors in the country." "A study suggests that when an IG (investment grade) sovereign gets downgraded to junk, the yields of its foreign currency treasury bills tend to rise significantly. The study estimates a 138 basis points spike." In the World Bank's Ease of Doing Business (EoDB) rankings, "In 2014, India was ranked 142nd. It jumped to the 63rd position among 190 countries in May 2019." However, according to McKinsey, "Indian companies still face obstacles ranging from delayed payments for public procurement to tedious and slow processes for obtaining permits". India's external debt was $558.5 billion at the end of March 2020 which is well within our foreign currency reserve at $590.185 billion on 22 January. "The government on Monday pegged the fiscal deficit for the year 2020-21 at 9.5 percent of gross domestic product (GDP)." It is predicted to be 6.8% in the next financial year, 2020-21. "The taboo on fiscal deficit has been broken too with the government abandoning the old 3% fiscal target of the FRBM (Fiscal Responsibility and Budget Management Act), opting for much higher deficits all the way to 2025," exulted SA Aiyar. "The budget replaces fudging with honesty by coming clean on subsidies." Not fully, it seems. "The budget has pegged fiscal deficit at 9.5 percent for FY21 (fiscal year) and 6.8 percent for FY22 excluding the off-budget borrowings of Rs 1.3 lakh crore (Rs 1.3 trillion) and Rs 30,000 crore (Rs 300 billion), respectively. But if we included these numbers, the deficit numbers would rise by 70 basis points to 10.2 percent for FY21 and 6.9 percent of GDP for FY22," according to a SBI Research report. Old habits. And there is nothing to stop off-budget borrowings which are forced borrowings of public sector units not shown as government expenditure. "Nomura India is all praise for the Union Budget 2021. But economists at the foreign brokerage believe rating agencies could perceive it negatively, and that there is a chance of a rating downgrade by Fitch." Then there is the sovereign disregard for contracts and the itch to extract as much tax as possible, even by changing laws retrospectively. Cairn Energy won an arbitration award against the government of India at The Hague after Vodafone has repeatedly done so. "A three-member tribunal at the Permanent Court of Arbitration in The Hague cited statements by Prime Minister Narendra Modi and other ministers pledging not to use retrospective taxation to overturn a Rs 10,247 crore tax demand on British oil and gas company Cairn Energy PLC." "India's ranking on the Corruption Perception Index - 2020 slipped from 80 to 86 even as its score decreased only by one point to 40 from 41 in 2019." Also, "India slipped two places to 53rd position in the 2020 Democracy Index's global ranking, according to The Economist Intelligence Unit..." Who would want to invest in a country which can grab your money through unreasonable taxes and has not respect for rules? That is credit rating.       

Too many people, too little land, no money.

"The story of China's ghost towns is pretty well known," wrote Vivek Kaul. "Building of real estate leads to a lot of economic activity, Every apartment requires cement, bricks, sand, steel, pipes etc. It also requires people to take home loans." India has unoccupied housing estimated at 10 million in 2015. A lot of units are unsold because builders are unable to reduce cost. Only 42,800 homes priced at less than Rs 10 million were sold in Mumbai in the last one year. "Imagine the potential if homes could be sold in Indian cities in the range of Rs 500,000-2 million." That is not possible because the price of land is very high in India and even in smaller cities range from Rs 2,000 to 3,000 per sq foot. The Delhi Development Authority (DDA), a public sector organization, builds and sells apartments in Delhi. Its recent offering of flats for Middle Income Group (MIG) are 1,200-1,300 sq feet at a cost of Rs 12 million while the High Income Group (HIG) flats are 1,500-1,700 sq feet and cost Rs 20 million. Those for the Lower Income Group (LIG) are built on plinth area of 33-48 sq meters (355-515 sq feet) and cost between Rs 1.8-2.5 million. Actual size of flats will be smaller than plinth area. The average size of families in India was 4.3 in 2016. Poorer families will tend to cram more members into a flat to save on paying rent. "It was smaller than even the store room I have in my rented flat in Rohini. Since it was impossible to fit my bed or any of my furniture in that pigeonhole, I decided to return the flat to DDA," said a disappointed buyer. The smallest apartments in the US are over 700 sq feet in area. "More than 50% people in India live in their own houses, while almost 30% live on rent and 13% in the parents' house, revealed the latest RICS-Knight Frank report. "India's per capita average income in 2019-20 was Rs 1,26,968, according to provisional estimates published on January 7," reported the Hindustan Times. According to the Longitudinal Ageing Study in India (LASI), " The bottom 20% of households earn just Rs 25,825 per year per capita." With that kind of income they will be lucky to buy enough food to survive, let alone an apartment. "A new study tracking around 2,800 informal workers during the pandemic found more than two thirds of those employed in February 2020 had lost work during the lockdown and six months later nearly 20% remained unemployed -- indicating that while jobs were regained, employment is below pre-Covid levels." A survey in Mumbai found "47 percent respondents said they had to dip into their savings to pay for household expenses, 66 percent said they had difficulty affording house rent". About 10% of the Budget goes on subsidies. Can't buy houses on handouts. Even pigeonholes.         

Don't know when you might need someone.

"Prime Minister Narendra Modi on Sunday launched a scathing attack on 'international conspirators' who were out to discredit India -- without directly taking the names of Swedish environmental activist Greta Thunberg who shared a 'toolkit' in support  of the ongoing farm protests and other global celebrities backing the agitation -- and said the country will 'respond to these conspiracies with all its might." "Some documents have come up revealing that some foreign powers are planning to attack India's identity associated with tea." India is not associated with successfully launching satellites into space, nor with building our own nuclear power plants, nor as a vibrant civilisation with 22 official languages, but with tea which is said to have originated in China and the word 'chai' is believed to be of Chinese origin. So, when the PM says that India is associated with tea does that make us a colony of China? Who are the "international conspirators" out to destroy India? Greta Thunberg is a Swedish girl who turned 18 years of age on 3 January 2021, and was diagnosed with Asperger syndrome, obsessive-compulsive disorder (OCD) and selective mutism at the age of 11 years. She campaigns on climate change which she believes, rightly so, will leave a desert world for her generation. Rihanna is a pop singer, actress and business woman born in Barbados and living in the US. A child and a luvvie. Hardly terrifying international conspirators for a nation which boasts of having developed hypersonic, air-breathing, scramjet missiles. Apparently, Greta has a sinister toolkit. Any man would think a toolkit is something that you keep in the glove compartment of your car in case of a puncture. Not that toolkit. "A toolkit is a collection of authoritative and adaptable resources for front-line staff that enable them to learn about an issue and identify approaches for addressing them." Just a harmless teaching device, and not an explosive IED, that has created such panic in our government. The reason is that Delhi Police is of the opinion that the infamous toolkit is the work of one Mo Dhaliwal who is a Canadian businessman and is an avowed Khalistani. If India can seek extradition of Vijay Mallya and Nirav Modi from the UK surely we can ask Canada to restrain separatists. Because, instead of explaining our sensitivities regarding Khalistanis, India insulted and humiliated Canada Prime Minister Justin Trudeau when he visited India in February 2018 with wife and children. This was noted all over the world and Trudeau's former principal secretary Gerald Butts accused Modi of "screwing" the Canadian Prime Minister. "You see there was a reason the foreign ministry reacted reacted to the statements that some celebrities gave out, for whatever reason, on matters they didn't know very much," said External Affairs Minister S Jaishankar. If they are ignorant just ignore their foolishness. The reason is that Modi has completely controlled the cowed Indian media but cannot ask anything of Canada which is a member of the G7 group of nations.  India is falling in the Democracy Index according to The Economist Intelligence Unit. A far cry from 'Howdy Modi'.

Why support a disaster on us because you are safe?

Loans from banks account for 60% of credit to the corporate sector but, "In 2018, domestic credit to the private sector by banks as a proportion of GDP was just 50% in India. In comparison the proportion was 158% in China, 141% in South Korea, 112% in Thailand, 81% in Chile, 66% in South Africa and 61% in Brazil," wrote Prof Arvind Panagariya and Rajeev Mantri. In 2019, 195 companies owed Rs 13 trillion to various lenders. Market capitalisation of well known companies, such as Vodafone, Tata Motors, Tata Power and Adani Power were below the levels of their debt. Member of Parliament Subramanian Swamy has alleged that the Adani group owes Rs 4.5 trillion to banks to which the group replied that it has never had any non-performing asset. "Today, corporate houses, some of which have substantial investible capital, constitute the largest untapped domestic source of new investment in banking," they write. If companies are sitting on excess money they can invest in new capacity or form venture capital funds to lend to business directly in exchange of shareholding. Non-banking finance companies (NBFCs) are barred from accepting demand deposits from the public. It seems ominous that companies have limited liability while people are insured for only Rs 500,000 on their deposits to banks, which is less than nothing. The European Union covers deposits up to 100,000 euros, which amounts to Rs 8.7 million at today's exchange rate, while the US, where Prof Panagariya lives, covers deposits of up to $250,000, which amounts to about Rs 18 million at today's exchange rate. "Simply put, it is prudent to keep the class of big borrowers (big companies) apart from the class of lenders (banks). Past examples of such mingling -- such as Japan's Keiretsu and Korea's Chaebol -- came unstuck during the 1998 crisis with disastrous consequences for the broader economy," wrote Udit Misra. Do large companies in the US or Europe own high street banks? If not, why is the professor wishing this danger on us? If one professor supports malicious intentions of the government, two others, Profs Raghuram Rajan and Viral Acharya, describe it as a "bombshell". "Interestingly, the IWG (Internal Working Group set up by the Reserve Bank) reports in its appendix that all the experts it consulted except one 'were of the opinion that large corporate/industrial houses should no be allowed to promote a bank'. Yet it recommends change." India's largest company Reliance was fined Rs 700 million for insider trading of Reliance Petroleum shares in 2007. Kishor Biyani of the Future Group has appealed against a fine for insider trading in 2015. Billionaire investor Rakesh Jhunjhunwala has filed a consent appeal for an insider trading charge in 2016. Michael Milken was sentenced to 10 years in prison, reduced to two years, for insider trading in the US. In India, just a few rupees in fine. "Even if one accepts that regulation will not be wholly successful in controlling excesses, this cost must be weighed against benefits, which are by no means trivial," wrote Panagariya. We Indians, especially pensioners, will be reduced to penury after saving for a lifetime of hard work. While he sits protected in the US. Shameful.    

What can Pichai, Zuckerberg or Biden do to us in India?

President of France Emmanuel Macron, Chancellor of Germany Angela Merkel and Secretary General of the United Nations Antonio Guiterres wrote that the world needs to unite for sustainable development to tackle climate change, reduce inequality and bring the coronavirus pandemic under control. "The rise of new technologies has been a great asset for progress and inclusion," they write. "Moreover, the considerable power of new technologies can be misused to limit the rights and freedoms of citizens, to spread hatred, or to commit serious crimes." Human beings have adapted every invention, from the wheel to build chariots to the telegraph to communicate with front line troops, towards waging war. The history of conflicts in Europe stretches back thousands of years. "I know that men are won over less by the written word than the spoken word, that every great movement on this earth owes its growth to great orators and not to great writers," Adolf Hitler, Mein Kampf, 1925. Hitler would not have been able to control the narrative the way he did if an open internet had given a voice to all citizens of Germany. "We need to build on existing initiatives toward effectively regulating the internet in order to create a safe, free, and open digital environment," write the three. That is precisely what China does through its infamous Great Firewall. "When they came for Myanmar's leaders, they cut off the internet," reported ABC news. "But plunging the country into cyber darkness has precedent in Myanmar and it comes straight out of the authoritarian playbook. Countries from Russia to Ethiopia, Iran to India have all recently shut down the internet in varying degrees." Myanmar, Iran, Ethiopia, we are in benevolent company. "Prepare for the next Great War: Big Tech versus the Nation-State," wrote Jaspreet Bindra. "The specific implementation of encryption technology that has worried governments the world over is the signal protocol (E2EE) , which guarantees that even intermediaries who provide these services will not be able to decrypt these messages in transit," wrote Anand Venkatanarayanan. India tried to stop WhatsApp from using E2EE. "In 2010, Google published a blog post, detailing how Chinese state backed hackers, attacked Gmail to spy on Chinese human rights advocates via a backdoor, installed by Google at the behest of the US government in Gmail to comply with search warrants on users." Corruption and crime are easy excuses for dictators, like Xi Jinping, to enhance their power by locking up anyone who opposes their views. Jack the Ripper existed long before the internet was even dreamed of. The Indian government wants people to believe its own version of events and uses technology to monitor what citizens are doing, even using the pandemic as an excuse. Sundar Pichai, Mark Zuckerberg or Joe Biden can do nothing to a citizen of India in India. The state, on the other hand, has a monopoly on violence and it uses its powers to the fullest extent to crush any challenge to its activities. The internet has set people free. Politicians and civil servants hate it. Wish we could do 'jouhatsu' in India.        

Wealth is merely economic health.

"The finance minister's Budget speech mentioned handsome allocations -- a Rs 2.24 trillion health booster shot, implying a 137% increase in the outlay. This amounts to slightly more than 1.5% of the Gross Domestic Product (GDP)," wrote Prof Amir Ullah Khan and Saleema Razvi. However, this government relies a lot on 'jumla', so this is no exception. Last year's stimulus plan announced by Prime Minister Narendra Modi with great fanfare also turned out to be jumla because it amounted to only 1% of GDP, and not 10% as promised. The Rs 2.24 trillion "outlay includes Rs 60,030 crore (Rs 600.30 billion) for drinking water and another Rs 36,022 crore (Rs 360.22 billion) as a new grant, proposed by the Finance Commission, for water and sanitation." "Further, removing the special one-time Rs 35,000 crore meant for covid-19 vaccination, we are left with Rs 92,794 crore (Rs 927.94 billion) -- a marginal hike over last year's sum." Although clean drinking water, sanitation and vaccine are all very important for health, millions of Indians are pushed into poverty by a severe illness every year because of out of pocket expenses and loss of earnings. "About 75 million above 60 in India suffer from some chronic disease, shows the first part (2017-18) of the world's largest study on the aged -- the Longitudinal Ageing Study in India (LASI) -- released by the health ministry." And, since 78% of the elderly do not receive any pension, having to buy expensive medicines regularly causes financial stress. At least physical illness is mostly visible but mental illness is largely neglected. A Lancet study in 2017 showed that 197.3 million people had mental disorders in India, including 45.7 million with depressive disorders and 45.7 million with anxiety disorders. "India reported an average 381 deaths by suicide daily in 2019, totalling 1,39,123 fatalities over the year, according to the National Crime Records Bureau (NCRB) data." "Despite growing incidence and prevalence of mental disorders....currently only 30 million Indians have access to mental health facility. Some studies indicate that only 10 percent of Indians with mental health problems receive evidence based treatments," wrote Mala Kapur Shankardass. A study suggests that 74% of Indians are suffering from stress and 88% are suffering from anxiety due to the coronavirus pandemic. There can be no health without good and balanced nutrition, especially in children. Shamefully, "India is home to 46.6 million stunted children, a third of world's total as per Global Nutrition Report 2018. About half of under-5 child mortality in India is attributable to undernutrition," wrote Abhishek Singh. The fifth National Family Health Survey (NHFS5) released by the ministry of health and family welfare showed that "The share of children who were stunted (low height for their age) increased in 13 states, while the share of children who had low weight for their height increased in 12 states. Experts have calculated that "In India, the benefits ranged for anywhere between $45 and $139 for each dollar spent towards reducing child stunting," wrote Udit Misra. About 85-90% of government expenditure goes to revenue expenditure, which does not create any assets, and about one fourth goes on paying interest on government debt. Poor health of people leads to poor health of the economy. Thus, India remains poor.

We are not so different, after all, are we?

"All mobile operators, international gateways and internet service providers received February 3 directives from the Myanmar Ministry of Transport and Communications (MoTC) to temporarily block social media service Facebook," reported Myanmar Times. "Facebook banned 20 Myanmar military individuals and organisations in 2018, including Senior General Min Aung Hlaing and the military's Myawaddy television network." Surprisingly, Facebook has been available in Myanmar despite banning Gen Hlaing who, as commander-in-chief, has become the ruler following a military coup. India has "the strongest and the most vibrant democracy in the world", said Prime Minister Narendra Modi. So censorship cannot happen in India. Or, can it? Not just Facebook, "India has suspended mobile internet services in three areas around the capital, Delhi, where farmers are staging hunger strike in protest at new agricultural laws," reported BBC. "The government has directed Twitter to comply with its order to remove contents/accounts related to farmer genocide hashtags, and warned that the microblogging platform may face 'penal action' for non-compliance of its order, according to sources." Twitter and Facebook are American companies and have freedom of action in the US but they better obey in India or else their Indian employees maybe arrested under UAPA and NSA laws and denied bail indefinitely. "A four-to-five-feet wide concrete wall - built by Delhi Police - now runs across the Delhi-Chandigarh national highway, cutting off the protesters of Samyukata Kisan Morcha from the capital. Behind this wall are five layers of barricades in a zone of about 1.5 km, denying the farmers access to dozen mobile toilet vans and Delhi Jal Board water tankers." Layers of barricades against Indian citizens but nothing to stop terrorists from entering India from Pakistan, it seems. Who knows how many tunnels there are. Terrorists could be driving across. To stop farmers from forming a procession of tractors on Republic Day, 26 January, the Uttar Pradesh (UP) government "ordered supply officers in all districts to stop selling diesel to farmers", wrote Shruti Rajagopalan. Socialist policies allow governments to control rights of citizens to speech, to property and to services. However, Editor-in-Chief of Republic TV Arnab Goswami had complete freedom of information about India's attack on Balakot 3 days before it happened, according to a leaked recording of a telephone conversation. Naturally, Pakistan Prime Minister Imran Khan accused Modi of attacking Pakistan in February to win election in May 2019. Which he did. Modi projects strong leadership and delivery of subsidies is key to Modi's popularity, wrote Verma and Barthwal. "Mrs (former PM Indira) Gandhi had many redeeming qualities, for instance, a sense of shame... That is missing in the rulers of today," said BJP leader Arun Shourie. Modi cannot be defeated by criticism. The only way is to show people that he is no different to other politicians. For India, it's not like frying pan to fire. More like, one dump to another.         

First the effusive plaudits. Then the doubts.

The plaudits rained down on Finance Minister Nirmala Sitharaman. Ajit Ranade accused rating agencies of bias "because India has always got a raw deal when it comes to its own sovereign rating". "A full chapter in the Economic Survey was devoted to rebutting, if not debunking, the models of international rating  agencies." Why the attack on rating agencies before the budget? A case of 'getting your retaliation in first', perhaps. "For now, though, the country is a winner, and kudos to the finance minister for a spectacular budget." "Arguably, for the first time ever, an Indian government has chosen to go fully clean on Internal and Extra Budgetary Resources, refrained from engaging in the gimmickry of borrowing from its own enterprises (issuing special bonds to them), and under-promised on revenue with every likelihood of over-delivering on the estimated budget deficit of 6.8% for 2021-22," wrote Prof VA Nageswaran. They are telling the truth because they can blame the coronavirus for making a mess of the economy since 2016 and the preemptive attack on rating agencies is to play a victim of bias. "Finance minister Sitharaman has pulled off a good budget in an extremely tough situation," appreciated Niranjan Rajadhyaksha. However, everything depends on whether the government is actually able "to deliver on the big capital spending push" and "to credibly stick to the fiscal stabilization path that has been laid out". The Budget "marks a bold break from the past", wrote an editorial in the Mint. "Not only is it big on what was once considered leftish profligacy, it brushes aside a stiff fiscal law." In a speech. Sitharaman announced government policy of moving away from the "socialist baggage" of the past, but "the Modi government has been practising socialism more than the preceding Congress-led governments, which only professed it loudly and eloquently", wrote P Venkateshwar Rao Jr. Modi has started innumerable social schemes and announced Rs 6,000 to farmers to win the 2019 election. ""The budget has pinned its hopes on supply-side economics, while the econommy is facing a demand-side crisis," wrote Roshan Kishore. Spending on the rural employment scheme MGNREGS will fall from Rs 1.15 trillion in 2020-21 to Rs 730 billion in 2021-22, spending on Pradhan Mantri Awas Yojana will fall from Rs 405 billion to Rs 275 billion and PM-KISAN will fall from Rs 750 billion to Rs 650 billion. "The expenditure budgeted for 2021-22 is less than 1% higher than the revised estimates for the current year. It is in this sense that there is no immediate stimulus in this budget despite the  developments wih respect to health and infrastructure," wrote Prof Pulapre Balakrishnan. "While the share of health spending is expected to see a small decline, the same for education is expected to drop sharply in fiscal 2022 compared to the past few years," wrote the Mint. Despite not doing anything, economists at Nomura "believe rating agencies could perceive it negatively, and that there is a chance of a rating downgrade by Fitch". So while economists in India applaud responsible spending, rating agencies see potential profligacy. They must know something is going to hit the fan. That's why the attack on agencies before the Budget. Blame the furriners. May work.      

The nation celebrated a no-action budget.

India's annual Budget was presented to parliament by Finance Minister Nirmala Sitharaman and both stock market indices rocketed, the Sensex by 2,315 points or 5% and the Nifty by 646 points or 4.74%. The Budget made no changes to personal or corporate taxes but raised customs duty on a range of articles, including certain auto parts, mobile phone components and solar panels. "In her third budget and the Modi government's eighth, Sitharaman proposed a vehicle scrappage policy, Rs 20,000 crore (Rs 200 billion) recapitalisation of public sector banks, divestment of some state owned lenders and sale of some non-strategic PSUs (public sector units) with a view to bolstering an economy that plunged into its deepest recorded slump amid the pandemic outbreak." The Budget has abandoned the fiscal deficit target of 3%, raised this year's deficit "to a shocking 9.5% rather than the widely predicted 7%", proposed a bad bank to take non-performing assets (NPAs) off books of banks and increased health spending, appreciated SA Aiyar. Banks had gross NPAs of Rs 8.99 trillion in 2019-20 and a moratorium was allowed on loan repayments since March 2020 which means that Rs 200 billion for recapitalisation is wholly inadequate. The amount of bad loans will be revealed only after the moratorium ends, which will coincide with the end of suspension of the Bankruptcy and Insolvency Code till 31 March. "There is a big push for roads and railways in this budget." "Higher allocation in healthcare and for clean drinking water have been made possible with expected reduction in the subsidy bill for 2021-22." "Gross tax receipts are pegged at Rs 22.2 lakh crore (Rs 22.2 trillion), a jump of 16.7%." Cynically, "With an eye on the upcoming state Assembly polls in Kerala, Assam and West Bengal, Finance Minister Nirmala Sitharaman Monday allocated special funds for the road and highway development projects in the three states during her budget speech," reported The Indian Express. "The Indian economy is likely to grow by 11% in 2021-22, the V-shaped recovery having been made possible by its strategy of Covid management that focused on protection of life at the expense of a short-term impact on livelihoods, the Economic Survey of 2020-21 argued." "The 11.5% growth projected by the International Monetary Fund (IMF) for India in fiscal 2022 will largely be mechanical, as the economy normalises from an estimated 8% contraction in the ongoing fiscal year, IMF chief economist Gita Gopinath said on Thursday. "Gopinath suggested that India continue its direct cash support to the poor in 2021, including the employment guarantee scheme, while prioritising public infrastructure spending." "The government has missed its total spending targets in the past two years, or even scaled them down, and has failed to meet goals for some of its flagship development programs, a review of its budget documents show," reported Bloomberg. So was the exuberance of the stock markets irrational? "The budget should be lauded not only for what it does, but also for what it doesn't do: (1) resists the impulse to offer tax concessions; (2) resists the temptation to impose a Covid cess of rate hikes," wrote Bibek Debroy, Chairman of the Prime Minister's Economic Council. "Eventually, budgets will lose their hype, without yearly tax variations." In short, a nothing budget is good for the nation. Hallelujah.       

An annual circus. Will it be any different?

 Today is the annual Indian circus, known as 'The Budget', presented with great fanfare in a red box by the Finance Minister every year in the tradition of Britain where the Chancellor of Exchequer carries his speech in a red box. The Budget is prepared by Indian Administrative Service (IAS) officers with a 'halwa' (Indian semolina pudding) ceremony. The IAS is a continuation of the British Indian Civil Service (ICS), which ruled India with an iron hand but with complete integrity and loyalty to the Crown, and with the same power but without the integrity or loyalty to the people of India. Every year, CEOs of companies in various sectors go begging for sops, such as tax relief, protection against foreign competition by increasing tariffs, concessions on exports and other handouts.  CEOs, economists and citizens differ in what they would like from the budget, wrote Malini Goyal and SN Sharma, but "there is near-alignment on what the three sections are worried about most -- jobs". "For creating employment  and livelihoods, a stable tax regime is strongly desired," wrote Director General of the Confederation of Indian Industry (CII) Chandrajit Banerjee. "Keeping in view the fiscal constraints, CII has not suggested any significant deductions or exemptions in direct taxation, and therefore, its tax recommendations are focused mainly on clarity in law, simplification of procedures and reduction of litigation to facilitate business transactions which would make doing business easier for industry." Corporate taxes were suddenly reduced in September 2019, well after the budget, presumably because economic growth was in a steep dive and the government was desperate to revive private investment. "According to the Organisation for Economic Cooperation and Development (OECD), out of the 94 tax jurisdictions studied in 2017, India had the highest statutory corporate income tax rate of 48.3%, including tax on distributed dividends," wrote Ashish Khetan. India will lose Rs 1.45 trillion in tax collections because of the tax cut and it would have benefited the economy much more if the government had spent it on building infrastructure than on giving more money to industrialists, wrote Khetan. "CII has suggested the lowest of 'nil' slab for inputs on raw materials, a top slab of 5-7.5% for final products, and 2.5-5% for intermediate goods. This will help Indian industry integrate with global value chains and turn its goods and services competitive in world markets." "An inverted duty structure is said to exist when the duty rate for the overall finished good is lower than that of its component parts, thereby rendering such a product's final manufacture in the country uncompetitive," wrote C Veeramani and Anwesha Basu. "World export of network products amounted to $5.6 trillion in 2018, of which India's share was a paltry 0.5% ($27 billion) compared to China's 17.5% ($981 billion)." Not just bad taxes on Indians. "Retro tax is a bad idea but stiffing Cairn Energy on an arbitration settlement only makes it worse," wrote Bloomberg. Not much point tinkering with taxes when the government is bleeding the economy through exorbitant taxes on fuel. "India's ranking on the Corruption Perception Index -- 2020 slipped from 80 to 86 even as its score decreased only by one point from 40 to 41 in 2019." Confusing taxes enable rent seeking by politicians and civil servants and high rates are essential because subsidy bill keeps rising to win elections. We will watch the circus. Sadly, the clowns will not make us laugh.             

A survey is an examination of the past. What about the future?

India's annual Economic Survey was presented to Parliament yesterday, in preparation for the Budget which will be presented tomorrow. "The central theme of the Survey is that this is the time for the government to increase expenditure on investment in a big way," wrote an editorial in the Economic Times. "So long as he growth rate exceeds the rate of interest, government debt would continue to fall as a proportion of GDP, that is, debt would be sustainable." The Survey advises the government to be counter-cyclical, meaning that it should spend more even though tax collections will be depressed because of the economic slowdown. This will, it is hoped, create jobs and encourage the private sector to invest, thus creating a virtuous cycle of increasing investment creating more jobs which will increase demand and lead to further addition to capacity. Yield on benchmark 10-year government bonds was 5.95% on 29 January. This is because the Reserve Bank (RBI) has been resorting to all kinds of financial trickery to keep yields down. The RBI refused to sell bonds at bids, it considered too high, on at least 4 occasions last year. It bought long term bonds while selling short term ones, in Operation Twist. And it conducted Long Term Repo Operations (LTRO) in which banks borrowed money from it in exchange for longer term government securities. The RBI has kept interest rate at 4% for months even though consumer price inflation (CPI) has been consistently much higher, the lowest being 4.59% in December 2020, which has devastated savers, especially retired people who depend on bank interest for survival. The government has said that it intends to borrow at least Rs 12 trillion instead of Rs 7.8 trillion envisaged in the budget last year. The government earned Rs 11 trillion till 2018 from excess excise duties on petroleum products. It earned over Rs 3.65 trillion in 2018-19. Even with the decrease in consumption of fuel due to the lockdown the government is to make an Rs 1.4 trillion in this financial year from fuel taxes. In addition, the government forced the RBI to handover Rs 1.76 trillion from its reserves in September 2019. Where have these eye-watering sums of money gone? Will the Finance Minister give us a detailed account in tomorrow's budget? The government borrows vast sums stealthily by getting public sector undertakings to borrow from the public by selling bonds which it does not show in its accounts. GDP growth rate for the financial year 2019-20 (FY20) has been revised down from 4.2% to 4% though the growth rate of FY19 has been raise from 6.1% to 6.5%. Since prices of fuels are not under goods and services tax (GST) higher fuel prices will feed into prices of all goods and services, warned the Economic Times. What happens to inflation if the government increases consumer demand through higher spending? We live in interesting times.           

We may think we are Atmanirbhar, but the world still matters.

"The economic survey tabled on Friday sees a robust growth of 11% for the fiscal year beginning on April 1 on the back of the nationwide vaccination and a rebound in consumer demand. The survey predicts a contraction of 7.7% in this financial year. The survey advises increased spending by the government without fear of credit rating agencies which rate India at just above junk status. "Never in the history of sovereign credit ratings has the fifth largest economy in the world been rated as the lowest rung of the investment grade (BBB-/Baa3)," wrote Chief Economic Adviser KV Subramanian. According to the Reserve Bank (RBI) gross non-performing assets (GNPA) of commercial banks may rise to 13.5% by September 2021, and "If the macroeconomic environment worsens into a severe stress scenario, the GNPA ratio may escalate to 14.8 percent". The GNPA ratio of public sector banks (PSB) may rise to 16.2% by September. Unless the government recapitalises PSBs they cannot lend, despite negative real interest rate which is depleting returns from savings. Lots of spending to boost the economy will not be easy, wrote Andy Mukherjee. "For one thing, the pandemic has upset business-as-usual calculations of how much to spend, on what, and how to finance it. For another, an impatience to make up for lost time has to be weighed against a shrinking of policy space in emerging markets: A reprise of the 2013 global taper tantrum could compound the country's considerable domestic challenges." In August 2013, the rupee registered "its biggest single day loss of 256 paise to close at a new historic low of 68.80 against the US dollar", when the then Chair of the US Federal Reserve Ben Bernanke hinted at a reduction of bond buying by the Fed. To guard against a flight of dollars the RBI has built up reserves of $585.334 billion but buying dollars releases a flood of rupees into the market which has pushed the Sensex to stratospheric levels. Foreign investors have poured a lot of money into Indian stocks and they will lose a lot of money in conversion if the rupee tanks against the dollar. India cannot beat China with 'jugaad', which means getting by with limited resources, and so must invest in R&D. But the government has been increasing tariffs on imports to protect domestic industries, thus discouraging spending on R&D. No country can grow 8-10% without opening up of the market, said Prof Arvind Panagariya. Finally, the survey advises a reduction in regulation. Sadly, "the system as whole is geared to, and, more importantly, strongly disposed to holding back and throttling India because its operating philosophy is distrust and cynicism," wrote Prof VA Nageswaran. A survey is meant to provide a true picture. Only then can it suggest correct policy. Else, it becomes a commercial.            

Why pick fights which we cannot win?

In December 2020, Cairn Energy announced that it has won an arbitration case against the Indian government at the Hague. By a unanimous decision, "The Permanent Court of Arbitration at The Hague on Wednesday not only invalidated India's $2.74-billion 2015 tax claim on Cairn Energy, but also ordered it to return up to $1.4 billion in funds withheld, interests and costs to the firm." Earlier, Vodafone Group Plc announced that "it had won an international arbitration case against the Indian government, ending one of the most high-profile disputes in the country involving a $2 billion tax claim". "India has challenged the Vodafone arbitration award in Singapore on December 21," Reuters reported citing a government official. The government's view is that taxation is a sovereign right and, therefore, can ignore the judgement. In which case India should have stated clearly that it does not recognise the arbitration tribunal at the Hague, just as it does not recognise the International Criminal Court which is also situated at The Hague. Vodafone still has business in India but Cairn does not. Hence, it can take tough action against India. "As India is a signatory to the New York Convention, the award can be enforced against Indian assets in numerous jurisdictions around the world for which the necessary preparations have been put in place," Cairn said. "It suffered this damage simply because it transferred ownership of its Indian oil field in 2006 to Cairn India Ltd, to prepare for the local unit's initial public offering. At the time, no tax was demanded. Years later, when Cairn disputed the sudden $4.3 billion levy, New Delhi expropriated its shares in Vedanta Ltd (into which Cairn had merged its Rajasthan oil field), helped itself to the dividends and dumped the stock." On 22 January, I warned that US firms can and do attach properties belonging to other countries. "Just like US oil firm ConocoPhillips grabbed Venezuelan assets overseas to enforce an arbitration award, Indian bank accounts, airplanes and other foreign properties can be seized to collect USD 1.4 billion awarded to UK's Cairn Energy against Indian retro tax, according to a letter seen by PTI." What a humiliation to be compared to Venezuela where people are starving and which is recognised as a failed state. Or, maybe not. "Cairn CEO Simon Thompson in the January 22 letter to the Indian High Commissioner in London, with copies marked to Prime Minister's Office, Finance Minister Nirmala Sitharaman and External Affairs Minister S Jaishankar, the arbitration award is 'final and binding' and 'the Government of India has an obligation to comply with its terms." US e-commerce giant Amazon has won an arbitration award against Indian retail company Future Group which signed a takeover agreement with another Indian giant Reliance. Apparently, the government is thinking of changing rules against foreign e-commerce companies Amazon and Walmart to protect small retail stores. Not the first time. The government changed e-commerce rules in December 2018 after Walmart paid tax of Rs 74.39 billion in September 2018 arising out of its acquisition of Flipkart. Apparently, Amazon's deal with Future Group violates India's Foreign Exchange Management Act 1999 (FEMA) and the Enforcement Directorate (ED) is now looking into it. Indian politicians and civil servants are accustomed to doing whatever they like to citizens but Amazon CEO Jeff Bazos also owns the Washington Post which supported Joe Biden in the recent presidential election. Perhaps, our great leaders should take a deep breath. Why take on unnecessary fights?
        

Not inequality of wealth, it is inequality of poverty.

"Recent high frequency indicators suggest that the recovery is getting stronger in its traction and soon the winter of our discontent will be made glorious summer," the Reserve Bank (RBI) wrote in its January bulletin quoting William Shakespeare. Growth will be consumption driven provided there is no further increase in coronavirus infection rate. "While Covid pandemic and lockdowns that came with it disrupted a lot of lives and even business, it may just have a silver lining. Indians ended up saving additional $200 billion during this time, a UBS report said." "Given the nature of savings (granular and broad based), we believe beneficiaries could be across consumption (discretionary and staples, autos) and financials (opportunities for retail lending)." "A 1% economic growth results in nearly 2% growth in income tax revenues," wrote former chief commissioner of income tax Hardayal Singh. Possibly because economic growth is not uniform and tends to benefit those earning higher incomes. "This is the finding of an analysis of income tax and gross domestic product (GDP) data of Indian states from 2012 to 2018," and economic growth also improves the Ease of Doing Business (EDB) rankings of states. This means, "One, states that focus on growth are quickly rewarded through higher tax revenues. Two, the tax department should not focus on negative things -- penalties, prosecution, surveys and other coercive methods to raise revenue." "India's top 100 billionaires have seen their fortunes increase by Rs 12,97,822 crore (Rs 12.98 trillion) since March last year when the Covid-19 pandemic hit the country and this amount is enough to give 13.8 crore (138 million) poorest Indians a cheque for Rs 94,045 each." The latest India supplement of the Oxfam report 'The Inequality Virus' said it would take an unskilled worker 10,000 years to make what businessman Mukesh Ambani made in an hour during the pandemic and three years to make what he made in a second." Lucas Chancel and Thomas Piketty "show the sharp rise of income, particularly of the top 1%", which they term "billionaire raj", wrote Christophe Jaffrelot & Kalayarasan A. "They present an overall U-shaped curve of inequality in the last 70 years -- declining inequality from 1950s to 1980s followed by a sharp rise thereafter. Also, they contest the hypothesis about the rise of a middle class in India. In their analysis, it is the top 10% who benefited the most as compared to the middle 40%." A massive gush of liquidity by central banks, including the RBI, all over the world has resulted in soaring asset prices, wrote an editorial in the Mint. "Wage compression by Indian companies, done to shore up profits, has widened the divide between the few who live off returns and the many who subsist on salaries." "However, imposing a wealth tax, as Piketty fans would like, is unlikely to work." "Over 5.95 crore (59.5 million) income tax returns (ITRs) for the fiscal year ended March 31, 2020 (2019-20) were filed by January 10, the Income Tax Department said." This is out of a total population of 1,300 million and includes businesses. The vast majority, 44.8 million, of individuals filed income less than Rs 5 million in the year. "India's per capita annual income in 2019-20 was Rs 1,26,968 according to provisional  estimates published on January 7." The Longitudinal Ageing Study in India (LASI) by the Ministry of Health and Family Welfare (MoHFW) puts the annual per capita income of the top 20% of households at less than Rs 100,000 and the bottom 20% of households at Rs 25,825 per year per capita. Just a handful is rich. For the rest, it is a question of who is poorer. Inequality of poverty.         

Power cannot be turned on and off.

"There may be the odd visionary bureaucrat or politician who figures out that what India needs is their getting out of the way. But, the system as whole is geared to, and, more importantly, strongly disposed to holding back and throttling India because its operating philosophy is distrust and cynicism," wrote Prof V Anantha Nageswaran. Th most egregious example of this "distrust and cynicism" was the sudden demonetization of high value banknotes with 4 hours notice on 8 November 2016, which sought to characterize every Indian as a tax evader. Since the poor, especially daily wage earners, deal mainly in cash they suffered the most. When not much 'black money' was found the story was changed to one of advantages of a cashless society. The volume of currency in circulation has increased from 16.4 trillion in 2016 to Rs 27.7 trillion, according to the Reserve Bank of India. "The operating principle in view is that the government does not trust citizens to do the right thing, forcing citizens to reciprocate that faith with their own creativity. Some give up. Some emigrate. Some co-opt the system. Many struggle throughout their live to deal with the government machinery." This gives total power to politicians and civil servants as a cowed people struggling to survive remain subservient to authorities. "There are macro studies by Francis Fukuyama which show that the countries that have high levels of trust, grow better," said Prof Kaushik Basu. "India is going through an erosion of trust in recent times. I just hope we have the sense to come together." "India has the highest bribery rate in Asia and the most number of people who use personal connections to access public services, according to a new report by corruption watchdog Transparency International." "It mens that entrepreneurial skills have to be applied to the task of acquiring political power first, in some form, so that this can be leveraged to venture into business." When a 19 year old Dalit woman was gang-raped, the police tried to hush it up by delaying filing charges, conveying her to Safdarjung Hospital, instead of to AIIMS where she had been referred, and forcibly burning the body in the middle of the night without permission of the grieving family. A journalist on his way to meet the family of the victim was arrested and is being denied access to lawyer or to his family. "What makes a powerful government so insecure that it must build a wall of policemen to barricade from public view -- and cut off access to -- a village in which a tramatised Dalit family grieves the death of a 19-year-old daughter brutalised by upper caste men?" asked an editorial in The Indian Express. In recent months 68 year old Gautam Navlakha was denied spectacles and 83 year old Jesuit priest Father Stan Swamy, who suffers from tremors of hands due to Parkinson's disease, was denied drinking straws, in prison, reported BBC. Neither of the men has been convicted of any crime in a court of law and so must be presumed to be innocent until proven guilty. Not in India. The worst example of unlimited power of the state was the forcible imposition of the biometric identity card Aadhaar, which has photographs, prints of all 10 fingers and iris scans. It was started as a means to identify those in need of financial help from the state. It was made compulsory for bank accounts and now is mandatory for filing income tax returns, wrote Usha Ramanathan, making it a perfect tool for surveillance. Andy Mukherjee is heartbroken because he cannot see any progress in India. We have stopped hoping long ago.        

What's the point of transfusing own blood into the economy?

 The services sector "contributed 55.39% to India's Gross Value Added (GVA) at current prices in FY20," says India Brand Equity Foundation (IBEF). Services sector's GVA grew at a CAGR (compound annual growth rate) of 1.45% to US$1,064.8 billion in FY20 from US$1,005 billion in FY16. According to RBI data, in August 2020, services exports stood at Rs 122,768.07 crore (US$16.44 billion), while imports stood at Rs 71,662.62 crore (US$9.60 billion)." Since services contribute a major part of the economy, "The biggest drag on the economy today is the fear of infection, so people are reluctant to resume service activities like travel, going to shops, entertainment, pilgrimages, and dozens of other things," wrote SA Aiyar. "No amount of fiscal stimulus will revive the economy until fear is cured and service activities resume. To diminish fear, the top priority of the budget must be to vaccinate as many as possible as quickly as possible." "Vaccination should be free". Congress politician Praveen Chakravarty agrees that "the economy will benefit enormously if most Indians are vaccinated", but he wants to increase the securities transaction tax (STT) by 0.1%, or 10 basis points, "on the value of all buy and sell transactions in shares and derivatives in the stock market". Trouble with a tax is that it tends to become permanent, as politicians feel that people are used to paying it, and it tends to creep up over the years. "In the 15 years since STT was introduced in March 2005, rates have been increased four times. But there has been no consequent reduction in stock market activity," wrote Chakravarty. Exactly. "The economy will recover in 2021 and we expect GDP growth to rise by 13.6%," wrote Jahangir Aziz. Despite such a high rate of growth "the level of GDP will still be 4-5% below its pre-pandemic path at end-March 2022. This is akin to losing $200 billion for two straight years." And most of this income loss has fallen on households and on small and medium enterprises (SME). Jahangir advises increased government spending on income support and on healthcare and not be worried about increased fiscal deficit. But, what is the point of spending more if the government squeezes it out of people by indiscriminate increase in taxes? The Ministry of Road Transport and Highways (MoRTH) proposed a 'Green Tax' or pollution tax of 10-25% on transport vehicles older than 8 years at the time of renewal of fitness certificate. Rising transport costs will surely result in increasing prices of goods we buy. "With the post-tax return on fixed deposits plummeting to 4%, way below consumer inflation, more and more investors are driven towards equities, notwithstanding the risks," wrote an editorial in the Economic Times. "The story is playing out in a market that has run ahead of fundamentals: the Sensex is trading 31-32 times its earnings against an average price-to-earnings multiple of 20 in the last two decades." "Millions of young Indians are dabbling in stocks for the first time as they remain stuck at home, with many of them trying their hands at trading shares to boost income amid pay cuts and job losses," wrote Nasrin Sultana. "There is a disconnect between booming markets and economic activity, Reserve Bank Governor Shaktikanta Das said on Monday, warning that the stretched valuations of financial assets pose a risk to financial stability." You can either administer a blood transfusion to the economy or bleed it to death. Can't do both.   

The unbridgeable distance.

"Nine years ago, vicious sectarian riots broke out between Bodos and Muslims in the Kokrajhar district of Assam. The disturbances left nearly 80 people dead and nearly four lakh (400,000) people fled their homes and took shelter in makeshift camps," wrote Swapan Dasgupta, Rajya Sabha MP for the BJP, Prime Minister Narendra Modi's party. "Curiously, the riots left the 'national media' in the country unmoved," whereas, there has been "fulsome coverage of the farmers' agitation on the outskirts of Delhi". Dasgupta's thesis is that riots in Assam were ignored because they were far away from the national capital and journalists are too lazy to go that far. Maybe not. Life is cheap in India because there are too many people competing for limited resources. India has 1350 million people crammed into 3.3 million sq km, giving a population density of 409 per sq km. China has 1400 million people in 9.6 million sq km, giving it a population density of 145 people per sq km, less than half that of India. Dasgupta talks about students in Bengal protesting against appointment of unqualified individuals as their teachers, but that is against the University Grants Commission (UGC), hardly of national significance. Even the thousands of families with little children walking hundreds of miles back to their home villages had no effect on Modi's popularity ratings which apparently "is a thing of pride for all Indians", according to President of BJP JP Nadda. The protests by farmers is directly against the Central government which forced the bills through without discussion in parliament. Not just that. In the Rajya Sabha, "MPs demanded division. This was voiced at 1.09pm on Rajya Sabha TV. But it never reached the public ear because footage was doctored to such an extent that it was muted," wrote KTS Tulsi and Tanessa Puri. This was pure skullduggery. Farmers know that. "The modus operandi is to introduce momentous laws without advance consultations with stakeholders and opposition parties; enact them in both Houses in one to three days without referral to parliamentary committees; enforce them with the heavy hand of the state; conflate India with the ruling BJP and Modi, creating a personality cult in the process; delegitimise protesters as anti-national agitators, apologists for terrorists, Naxalites, and/or in the pocket of foreign paymasters; and be wilfully blind to the potential foreign policy implications of the actions until the damage has been done," wrote Prof Ramesh Thakur. "Habituated to adulation from adoring crowds, Modi doesn't do humility and apologies." Students protesting in Jawaharlal University (JNU) were viciously beaten up without any BJP member objecting to the barbarity. India seems to be leaning towards monopoly in certain sectors, seen to be benefiting billionaires Mukesh Ambani and Gautam Adani, wrote VK Vijayakumar. "That the Adanis and Ambanis come form Gujarat, the PM's home state, only serves to bolster the impression that proximity to power confers an undue advantage," wrote Rajdeep Sardesai. "On the ground in Punjab, Reliance Jio (Ambani) telecom towers have been vandalised while Adani products are being boycotted." Modi is stuck. If he gives in to the farmers his "prestige suffers a body blow" and the longer the protests drag on there will be a gradual erosion of his authority, wrote Prof Mohsin Khan. It is not physical distance but the distance between Modi, as an exalted leader, far above a cringing, submissive people, that is the problem.  Dasgupta is subservient to his political master, but surely he has some responsibility to his fellow citizens? Maybe, he is afraid.          

Our glorious past beckons.

"The middle class is often viewed as being squeezed between the wealthy, who own a disproportionately large share of the nation's assets, and the poor who can fall back on government aid," wrote Sanket Mohapatra. But they have not suffered from the coronavirus-induced lockdown, he suggests. The biggest disappointment for the middle class is that it does not receive any services for the taxes it pays. The National Health Service in Britain provides free medical care to every patient. Denmark has very high taxes but provides a wide range of services which means a very high standard of living for citizens. The aspirational middle class gets government benefits and the affluent middle class may have seen a rise in wealth with the stock market index the Sensex soaring to over 50,000 on 21 January, although it closed lower the next day on profit taking. The middle middle class has not seen a drop in earnings but the gig economy is a threat to its existence, says Mohapatra. This ignores the fact that the number of white collar professionals has dropped from 18.8 million during May-August 2019 to 18.1 million during January to April 2020 and then to a shocking 12.2 million during May to August 2020. This year is the 30th anniversary of the balance of payments crisis of 1991 when India had to transfer 47 tons of its gold reserves to the Bank of England and 20 tons to the Union Bank of Switzerland as collateral to borrow foreign currency to pay for imports. Before 1991, India suffered from 'Licence Raj' which "refers to the control that the government had over business in India. "Government bureaucrats decided what businesses could produce and how much they could produce," wrote Vivek Kaul. Ambassador and Premier Padmini cars do not exist now. "In 1980, India had around 2.5 million landline phones, all concentrated in cities. By October 2020, mobile phone connections had touched 1.15 billion." "The number of passenger cars sold in 1991-92 was around 150,000 units. In FY2020, 1.7 million units were sold." To put it in perspective, China sold 25.3 million cars in 2020, down 1.9% from 2019. In 1991, most Indians could access only government-owned Doordarshan (DD) channel on TV, those living in cities could also access DD Metro. The crisis in 1991 forced the government of Prime Minister PV Narasimha Rao to institute economic reforms which led to the per capita national income increasing from Rs 29,686 to Rs 109,000 in 2019-20. Unfortunately, "The Modi government brought back industrial policy, usually associated with the licence-permit raj of the 1960s and 70s," wrote Rahul Jacob. "Most observers believe the principal opposition today to 1990s-styled liberalization is spearheaded by ministers within the Modi government rather than industry, which in many ways makes this reversal much more potent -- and permanent." "For starters, import substitution industrialisation (ISI), which entails progressive replacement of imports by domestic production, was precisely the strategy we had pursued until 1991," wrote Arvind Panagariya. "In Asia, most countries that have achieved industrialization have used a version of the same policy," wrote Diva Jain. "The only way for the Indian economy to break out of this middling rate of growth is to look outward for export-based growth drivers." Perhaps, the government wants to take us to our glorious past. All the way back.          

Should India ignore post-Brexit Britain?

A British think-tank Chatham House has issued a new report on world affairs in which "it has termed India, Russia, Turkey and Saudi Arabia as the 'Difficult Four' for a post-Brexit UK". Although it says that "India's importance to the UK is inescapable", it also says that "the overt Hindu nationalism of the ruling Bharatiya Janata Party is weakening the rights of Muslims and other minority religious groups", "And the government's broader crackdown on human rights activists and civil society groups is no longer being actively challenged by the judiciary, leading to growing complaints about erosion of the rule of law, not only from domestic groups but also the UN and other democracy watchers." "Behind closed doors across North Atlantic and European Capitals, domestic concerns -- usually unspoken in public -- have been bubbling since 2014 about growing religious and other forms of intolerance and suppression of critique and dissent in in India's domestic space," explained The Indian Express. "UK Prime Minister Boris Johnson has invited PM Narendra Modi to participate in person for the G7 summit to be held in the Cornwall region from June 11-13." An honor to be invited to the group of seven before China, Russia or Brazil, but not at all complimentary to be clubbed by Chatham House with Saudi Arabia led by Crown Prince Mohammad Bin Salman, who has compiled a long list of criminal accusations. "The black marks against India echo with a well-worn Western liberal playbook, fraught with disappointment that India, despite being the world's largest democracy, is a weak liberal ally in the international political sphere," wrote Prof Kate Sullivan de Estrada. "Post-colonial, non-Western states, even increasingly powerful states such as India, still do not enjoy full political and economic independence in how they make decisions at home, nor in their efforts to shape the agendas of international institutions." There is no doubt that India is weak, as shown by how blatantly China keeps occupying Indian territory and is to cut off water supply to the northeast of India by building a dam on the Brahmaputra River. The dubious victory of Joe Biden in the recent presidential election has brought a liberal administration. Retired Gen lloyd Austin has been confirmed as Secretary of Defense who would like to operationalise India's "Major Defense Partner" status but will continue to build relationships with Pakistan's military because "Pakistan is an essential partner in any peace process in Afghanistan". To show who is in charge, Biden has signed 30 executive orders in his first three days, giving more powers to trade unions, a $15 minimum wage, stopping Trump's wall, allowing immigration from Muslim nations and allowing trans people to use bathrooms of their choice. "The idea of the Anglosphere has a long lineage in Britain's history," wrote C Raja Mohan. "Many in Delhi ask why India should have anything to do with the resurrection of an idea that is rooted in London's colonial past. But if Delhi looks to the future rather than the past, it could find Anglosphere an interesting framework to engage with." But will it win assembly election in Bengal? Where are the optics?