Is the snake willing to play as they want?

"The Taliban took control of Afghanistan after the government collapsed on Sunday. President Ashraf Ghani fled the country and conceded that the terrorists had won the 20-year war," NDTV. "Just last week, US intelligence analysts had predicted it would likely take several more weeks before Afghanistan's civilian government in Kabul fell to Taliban fighters. In reality, it only took a few short days," CNN. Shows how amateurish US armed forces, intelligence and analysts are. "Although Afghan security forces were well funded and well equipped, they put up little resistance as Taliban militants seized much of the country following the withdrawal of US troops in early July." "The US left Afghanistan's Bagram Airfield after nearly 20 years by shutting off the electricity and slipping away in the middle of the night without notifying the base's new Afghan commander, who discovered Americans' departure more than two hours after they left, Afghan military officials said," AP. The Americans have apparently been training Afghan forces for over 20 years and they slink away in the middle of the night under cover of darkness. If your teachers run away with their tails between their legs it is not likely to fill Afghan forces with confidence, is it? Looters knew of the craven flight of the Americans before Afghan armed forces and within hours, "Outside the base gates, scrap dealers and vendors were photographed hawking items left behind by the departing Americans, including basketballs, bicycles and helmets, electric fans, noise-canceling headphones -- even laundry detergent," nypost.com. "Analysts and US lawmakers -- both Republicans and Democrat -- have been comparing the so-called fall of Saigon with the Taliban takeover of Kabul," BBC. Images of Americans fleeing in panic from the roof of the US Embassy in Saigon in 1975 are being compared to images from Kabul, the difference being that the numbers in Kabul are much smaller. "As the US races to evacuate diplomats via helicopters from its embassy in Kabul amid the Taliban's rapid advance, President Joe Biden's insistence during a July press conference that this would not happen has resurfaced on social media," Newsweek. It is not entirely Biden's fault, however. Osama bin Laden was killed by US forces in the Pakistani garrison town of Abbottabad in 2011, wikipedia, which helped then President barack Obama win his re-election in 2012. Joe Biden was his Vice-President. Pakistan's Prime Minister Imran Khan admitted that "Pakistan's spy agency Inter Services Intelligence (ISI) provided the United States with leads that helped them find and kill Al-Qaeda leader Osama bin Laden", Scroll.in. As a reward Obama supplied Pakistan with F16 fighter jets, heavy bombs and advanced missiles, firstpost.com. Biden is being pilloried for his handling of Afghanistan, justly so, but the Taliban is sponsored, trained and armed by Pakistan, News18, and no one knows whether Pakistani army units are directly involved or not. Afghanistan has Iran to the west, Pakistan to the south and east, China in the northeast and Tajikistan, Uzbekistan and Turkmenistan to the north. Taliban are hardline Sunnis, BBC, while Iran is Shia. China seems likely to recognise a Taliban government because, according to certain analysts, Afghanistan has over $1 trillion worth of minerals, including 60 million tons of copper, 2.2 billion tons of iron ore, 1.4 million tons of rare earth elements such as lanthanum, cerium and neodymium, and lodes of aluminium, gold, silver, zinc, mercury and lithium", nbcnews.com. "A series of photos published last month by Chinese state media of Foreign Minister Wang Yi standing shoulder to shoulder with visiting Taliban officials decked out in traditional tunic and turban raised eyebrows on the county's social media," Reuters. The Pakistan army must be ecstatic that Afghanistan is now controlled by its proxy, so it can now concentrate on attacking India. Iran has a 25-year trade deal with China, so it might be hoping to bypass US blockade of its ships by trading directly with China over land, wikipedia. All of them want to play with a friendly snake. No one knows what the snake will do. 

Does the RBI have control of our financial markets?

"Rallying for the second straight session, the 30-share Sensex jumped 593.31 points or 1.08% to its new all-time high of 55437.29. It touched an intra-day record of 55,487.79," Hindustan Times (HT). "Similarly, the broader NSE Nifty breached the 16,500 level advancing 164.70 points or 1.01% to its fresh closing peak of 16,529.10. It surged to a record of 16,543.60 during the day." By 1 August, equity investors had added Rs 31 trillion to their wealth in the first 4 months of the current financial year, CNBCTV18. "Retail investors and mutual funds are driving the ongoing bull rally, analysts said," The Indian Express (TIE). "Retail investors are buying stocks without any serious consideration for value. Now, we don't know when and how this rally will end. But we know it will end....and when it does, the new retail investors who have flocked to the market recently will be hit hard," said VK Vijayakumar. A Demat, or dematerialised account, is used to hold, buy and sell shares electronically, Angel Broking. Physical shares have been dematerialised to electronic form and are held in depositories. Brokerages have added an average of 1.3 million new demat accounts every month since April last year, taking the total number of retail investors to 69.7 as of May of this year, outlookindia.com. "India's largest mutual fund asset manager, SBI Mutual Fund, has waved the red flag on the country's stock market," Economic Times (ET). Fund manager, Dinesh Balachandran said, "Primary market activity is flashing warning signs. Such level of activity is normally associated with euphoria (in the market)." And "the internet sentiment index tracked by the mutual fund is also flashing warnings of extreme excitement among retail investors". This is due to global central banks, wrote Ajay Bodke. "TINA or there is no alternative to stocks with bond yields being so low. This is in no small measure due to 'financial repression towards savers' unleashed by global central banks through injection of tens of trillions of dollars of bond-buying programs (Quantitative Easing) that has led to 'manipulation of interest rates' fueling unprecedented speculative fervour in financial risk-assets like equities. FOMO or fear of missing out on another rise in stocks. And BTD, or buy the dip as a firm belief has taken hold that the torrent of monetary and fiscal deluge inundating the financial markets will continue unabated despite clear signs of build-up of debilitating inflationary pressures." But, global central banks do not have direct influence on the Indian economy, the Reserve Bank of India (RBI) has total control on money supply and interest rates in India. "Indian retail inflation eased in July after holding above 6% for two months in a row," as "Consumer prices rose 5.59% in July from the same month last year, lower than June's 6.26% annual inflation rate," ET. Despite the high inflation rate, the RBI "kept the repo rate unchanged for the seventh time in a row at 4 percent and maintained its 'accommodative stance', which means a bias towards lowering rates further, indiatoday.in, even while it raised its prediction for the consumer price index (CPI) inflation to 5.7% in this financial year from 5.1% that it had predicted earlier, CNBCTV18. While average CPI inflation was below 2% in the US, in 2020, usinflationcalculator, and was 0.5% in the European Union in 2020, World Bank, it was 6.9% in July last year in India, up from 6.2% in June 2020, Times of India (TOI). Since inflation compounds year-on-year, prices in India are soaring far above the rest of the world. Not content with keeping interest rates below the level of retail inflation, thereby punishing savers, the RBI is aping other central banks by resorting to quantitative easing, cutely named G-SAP or government securities acquisition program. On top of all this, the RBI is buying dollars from the market to keep the rupee from appreciating, so that our foreign exchange reserves have reached a record $621.464 billion, Business Standard. Excessive supply of rupees should make the currency weaker but it is appreciating because of foreign investments of Rs 511.21 billion in our stock markets in 2021, moneycontrol. The RBI cannot raise rates without collapsing the stock markets and causing bankruptcy for millions of first time investors. It has handed over control of our financial markets to foreign investors. We wait like sacrificial lambs.                   

Dollars are also. foreign.

"India's economy needs to grow at a nominal rate of 14% at current exchange rates over the next 10 years to hit the $10 trillion milestone," Economic Times (ET). Nominal GDP growth maybe due to increase in production of goods and services or due to rise in market prices, global economy.com. The real GDP growth rate corrects for inflation by using a deflator calculated according prices in a base year, Investopedia. The nominal GDP growth rate was 19.9% in 2010-11 but after correcting for high inflation the real GDP growth rate was 8.5%. The nominal GDP growth hovered between 10 and 11% from 2014-2019 and then fell to just 7.8% in 2019-20 before the coronavirus hit India. All it needs is to simplify the goods and services tax (GST), reform power sector and land laws, better governance and higher investment in high value industries, ET. "Economic recovery is evident in all sectors," said Saurabh Mukherjee. "If you look at a sector like IT services, even a large company like Cognizant is saying that it is becoming impossible to get the number of programmers and software engineers they need. So we are living through the strongest demand environment in many sectors that I have seen in 20 years. History shows us this is when sector leaders pull away." "The benchmark Sensex crossed the 55,000 mark and hit a record high on sustained buying support by retail investors and mutual funds in intra-day trading on Friday," The Indian Express (TIE). Retail inflation fell to 5.6% in July and the IHS Markit Purchasing Managers' Index (PMI) jumped to 55.3. "The sharp improvement in key economic indicators like GST collection, auto sales volume despite supply disruption, and other high frequency indicators like e-way bills in July indicate sustainable rebound in corporate earnings in subsequent quarters." "The country's foreign exchange reserves increased by USD 889 million to a lifetime high of $621.464 billion in the week ended August 6, 2021, RBI data showed on Friday," Business Standard. If the economy, markets and foreign investments are booming why has "Commerce and Industry Minister Piyush Goyal on Saturday suggested that Indian companies could make early stage investment in home-grown startups to help retain Indian talent and ideas within the country, while also getting themselves higher upside when valuations increase," Times of India (TOI). Goyal picked on the Tata Group in particular and his "comments caught public attention and stoked a debate on social media after the Hindu newspaper reported on Saturday the government had asked the CII (Confederation of Indian Industry) to block videos with Goyal's comments," Reuters.  "Goyal also repeatedly criticized Amazon (AMZN.O) and Walmart's (WMT.N) Flipkart for allegedly bypassing foreign investment rules for e-commerce. This week, he also invoked the 'Quit India' movement in Parliament as he welcomed a court order that allowed an anti-trust probe of the two companies to continue." Foreigners will only invest if they make profits in India. If the government does not want foreign money why doesn't it just ban it?  Goyal's comments invited scathing comments on social media, HW. "The Flipkart purchase was Walmart's most expensive. Soon after the deal, Reliance announced its own ambitious e-com plan for linking small independent stores with a telecom network that now has 420 million subscribers. Reliance is also India's largest operator of physical stores," wrote Andy Mukherjee. "But then, consumers and small shopkeepers are just convenient excuses. Behind the smokescreen of shielding their interests, India is slowly creating a protectionist economy that will benefit a select group of firms." Non-resident Indians residing in the 5-eyes countries, US, Canada, UK, Australia and New Zealand are doing much better because of help by governments of these countries than are people in India, wrote Ajay Sharma. Bullying and begging cannot create economic growth. How can you have a $10 trillion economy if you don't want dollars? After all, dollars are foreign. 

75th anniversary of Independence. But are we free?

"Recalling how the industry used to face 'hardships' in securing permissions and 'harassment from bureaucrats' 50 years ago, chairman of the city-based vaccine maker Serum Institute of India (SII), Dr Cyrus Poonawala on Friday hailed the Modi government saying that red tapism and licence raj have come down under its rule. He also said that in the past, he had to 'fall at the feet' of bureaucrats and drug controllers in order to get permissions, and added that the situation has changed now, which resulted in quick launch of SII's COVID-19 vaccine - Covishield," News18. The ban on exports of the vaccine by the government was a "very bad move" and put the company in a "difficult situation", he said. "It is a very bad move the Modi government. My son asked me not to open my mouth," News18. Son Adar Poonawala escaped to London in May because he was being threatened. "Threats is an understatement. The level of expectation and aggression is really unprecedented. It's overwhelming. Everyone feels they should get the vaccine. They can't understand why anyone should get it before them," he said, Business Today (BT). "BJP leader Ram Iqbal Singh on Thursday claimed the state (UP) government is being 'run by bureaucrats', while party workers who work at the ground level 'face lathis' and 'no heed' is given to public representatives," Indian Express (TIE). "The corruption at the grass roots level by officers has become the norm and they are extracting money from the public, and there is no one to listen to the people," Singh said. "A PhD student from Uttar Pradesh has walked over 180 km from Saharanpur to Delhi in a bid to clear his name of 'terror taint'," The Print. Praveen Kumar's name was apparently found in a list of Hindus who were converted to Islam. He said he is a nationalist and said, "I experienced this (injustice), which is why I am saying we cannot become a superpower until we weed out this poison of hatred among the people." The UP Police tried to stop his walk to Delhi. "A police team from Saharanpur had tracked my phone's GPS location," Kumar said. "They found me and, at first, tried to make me give up on my march. They were quite persuasive. When I didn't listen, they started pressuring me. They would have detained me and forced me to go back." But he managed to give them the slip, Times of India (TOI). "The withdrawal of Dr Hari Singh Gour University in Sagar, Madhya Pradesh, from an international seminar on 'Cultural and Linguistic Hurdles in the Achievement of Scientific Temper' due to bullying by the Akhil Bharatiya Vidyarthi Parishad (ABVP) and the local police must not be treated lightly," wrote Prof Apoorvanand and Gauhar Raza. The ABVP is the student arm of the Rashtriya Swayamsevak Sangh (RSS) and claim to have 3 million members, wikipedia. The RSS is a Hindu organisation, formed to unite and protect Hindus from attacks and conversion by other religions, and is the support base of the Bharatiya Janata Party (BJP) which forms the government in India, wikipedia. "Defame, delegitimise and disrupt. This is how the ABVP and its fraternal organisations work in destroying the academic culture in India," wrote Apoorvanand. "Disruption comes with after or with delegitimisation. Seminars, film screenings, theatre performances are vandalised and disrupted. The ABVP seldom engages in arguments." Universities are relevant only after completion of school education. But schools have been shut since March 2020 due to the coronavirus epidemic even though the All India Parents Association demand their opening, TOI. "Only the children of the privileged have had any semblance of education in these past 16 months, through a combination of online classes, personal tutoring and family support," wrote Anurag Behar. For the poor children, "Most of them have forgotten a lot of what they knew when schools shut, and have also been deprived of the school's mid-day meal since then, which for many would have been the day's most nutritious meal." Many children have been pushed into labor to augment family income. And we don't know if there will be a third wave because the numbers of infections and deaths in the second wave have been hidden, wrote Mihir Sharma, Economic Times. Licence Raj has been displaced by Violence Raj. Tomorrow is the 75th anniversary of Independence. But, are we free?      

Animal Spirits depend on the type of animal.

"Indian entrepreneurship is booming again. Led not by old-money entrepreneurs, but new money," wrote R Jagannathan. "This optimism -- that India's decade of private investment drought is finally ending -- is what is reflected in the stock markets, which are hitting new highs. Initial public offerings (IPOs) are being snapped up. Zomato, a loss-making food delivery company, managed a market valuation of around Rs 1,00,000 crore (Rs 1 trillion) on listing last month." Following its listing Zomato said "its consolidated net loss widened to Rs 356 crore (Rs 3.56 billion) for the quarter ending June 30, 2021. Zomato, which is backed by China's Ant Group, reported net loss of Rs 99.8 crore (Rs 998 million) in the year-ago period," Business Standard. "The food delivery tussle has reached the Competition Commission of India (CCI) after the National Restaurant Association of India (NRAI) said that they have filed a complaint against food delivery aggregators Zomato and Swiggy," timesnownews.com. "The association added that their filing includes details of 'anti-competitive practices' adopted by Swiggy and Zomato that are negatively impacting and threatening their survival," because they are "forcing restaurants to give discounts to maintain appropriate listing". Zomato is making huge losses despite forcing restaurants to make losses, not an inspiring business model, is it? The dot-com bubble reached its peak in 2000 when the Nasdaq Composite index rose 400%, only for the bubble to burst in October 2002, when it fell 78%, giving up all its gains, wikipedia. Economist Robert J Shiller coined the expression "Irrational Exuberance" and "The current market conditions, marked by a sharp increase in the asset prices in the equity markets without being impacted by stringent lockdowns, are challenging the notions of irrational exuberance once again," wrote Naveen Kukarni. Using Shiller's suggestion of Cyclically Adjusted Price Earnings (CAPE) ratio, markets in India are trading at 1x standard deviation above the mean because "Earnings growth has improved significantly as product prices have moved up on account of supply-side constraints and the resulting inflation." If earnings growth is because of rising prices and not higher productivity then the CAPE ratio for India must also be abnormal. "Companies that go public not only reward their founders with a pot of gold, but also give other investors a chance to participate in their growth story," wrote Ajit Ranade. "Still, there are only 25 million unique investors in equity, as against more than 700 million bank account holders. The potential for wealth creation through stock ownership, either directly or indirectly through mutual funds or pension products, is immense. Yet, it seems that many startups would rather list overseas and not in India. About two dozen founders and private equity investors approached the Prime Minister, no less, to allow them to list abroad, even though these are home-grown and domiciled companies." Maybe, because dividends are clubbed with income and taxed at the highest tax rates in India, Economic Times (ET), while in Singapore there is no tax on dividends from a Singapore company, Hawksford tax services. But, why does a company need government permission to list abroad? US company Walmart bought Flipkart for $11 billion in 2016 on which it paid a tax of Rs 74.39 billion, ET, following which the government has been repeatedly changing rules of e-commerce for foreign companies, Hindustan Times (HT). A few days back, "The Enforcement Directorate (ED) has issued a show cause notice of about Rs 10,600 crore (Rs 106 billion) to e-commerce major Flipkart and its promoters for alleged violation of the foreign exchange law," Indian Express. In these stories of gains and losses, the BJP's income jumped 50% in 2019-20 to Rs 36.23 billion, Rs 25.55 billion coming by way of shadowy Electoral Bonds, TOI. Does that count as "Animal Spirits"?    

Can't win unless the main center is neutralised.

"With the US military gone," from Afghanistan, "The Taliban are reported to have gained control of more than half the country," wrote Sandipan Deb. "The Taliban, or 'students' in the Pashto language, emerged in the early 1990s in northern Pakistan following the withdrawal of Soviet troops from Afghanistan," BBC. "Pakistan has repeatedly denied that it was the architect of the Taliban enterprise" but, "As the situation in Afghanistan deteriorates with an increase in offensives by the Taliban, Pakistan and its Army continue to provide a safe haven to the insurgent groups and its affiliates," ANI. "The Afghan government has repeatedly accused Pakistan of supporting the Taliban and preventing the Afghan forces from carrying out military operations against them," NDTV. "Whatever the US may claim, the Taliban and their supporters see the American withdrawal as their triumph over the world's most powerful country," wrote Deb. "They will want a dominant role in any transitional government and then go for a final bloody purge." Former Taliban leader Mullah Omar died in a Pakistan hospital in 2013, BBC, but Pakistani authorities did not release the news for over two years. "What Pakistan doesn't discuss openly is this central tension: Pakistan has long treated the Afghan Taliban as friends -- preferring them to Pashtun nationalists (which it viewed as threatening, fearing they would mobilize Pashtuns on the Pakistani side of the border as well) and to the current Afghan government (which it sees as friendly with India) -- while the Afghan Taliban's friend and ideological twin, the TTP (Tehrik-e-Taliban Pakistan), has posed an existential threat to Pakistan and killed tens of thousands of Pakistanis," wrote Madiha Afzal. "For Washington, part of the reason it lost the war against the Taliban is because the Taliban found support in Pakistan, including sanctuary for the Haqqani network and the Quetta shura." Pakistan Prime Minister Imran Khan said in an interview with Fox News that "Pakistan's spy agency Inter Services Intelligence (ISI) provided the United States with leads that helped them find and kill Al-Qaeda leader Osama bin Laden", Scroll.in. Which means, the ISI had been sheltering bin Laden till then. Unless the US tackles the main sponsor of terrorists, Pakistan, it will continue to lose wars. "Most Americans rightly believe that the US military is the best and most formidable in the world. If that is correct, why, since the end of World War II, has the United States lost every war it started and failed every time it used force without just cause?" wrote Observer. "Fortunately, the United States prevailed in the Cold War and the threat of nuclear annihilation. George HW Bush was masterful in the first Gulf War in 1991 and managing the collapse of the Soviet Union." The problem for the Pakistan Army is that it controls the main businesses, and therefore the wealth, of Pakistan. If it loses power it will surely lose all its privileges, as has happened to army officers in Turkey after they allowed Recep Tayyip Erdogan to seize power, dw.com. "Pakistan's military establishment represents the largest conglomerate of business entities in the country, reveals a United Nations Development Programme report called 'The three Ps of inequality: Power, People and Policy'. The report said that Pakistan's military enjoyed Rs 257 billion in privileges in 2017-18 and it is the country's biggest real estate developer and manager, with wide-ranging involvement in the construction of public projects," Samaa. If the US wants to tame the Taliban it must hit Pakistan's army in its softest spot, which is its illicit money making activities. Pakistan was outflanked in 2019 when India revoked Articles 370 and 35(A) which granted special status to Kashmir, Economic Times. However, back channel diplomacy produced a ceasefire on the Line of Control, wrote C Raja Mohan. Or, maybe Pakistan is waiting to get control of Afghanistan before unleashing terrorists on India. It is using drones to drop weapons and drugs into India, ndtv. Defeating the Taliban is easy. Just neutralise Pakistan.            

Whatever happens, we get screwed.

"India wants to get on the electric vehicle  bandwagon, and is introducing China-style policies to pursue its green ambitions. But there's a wrinkle: its age-old, protectionist instincts, which have kept out international auto companies for decades," wrote Anjani Trivedi. "Tesla Inc is likely to set up a factory in India if successful with imported vehicles, Chief Executive Elon Musk said on Twitter, after the company wrote to Indian ministries seeking big reductions in import duties on electric vehicles, according to two sources with knowledge of the matter," Business Today (BT). "Other luxury automakers in India have also lobbied the government in the past to lower taxes on imported cars but have had little success due to opposition from rivals with domestic operations." The government responded. "And it is not what Tesla would have hoped. The government has ruled out any reduction in import duties as of now in what could be a blow for the US-based electric vehicle manufacturer," Hindustan Times (HT). "Tesla's sales in China started to comprise a big portion of revenue as early as 2017, before it began production there. While that was partly thanks to relatively low import tax rates of 25% at the time, it also reflected Beijing's desire to create a market for EVs. The government's stance helped electric cars get traction, boosting the entire supply chain and tipping off a self-fulfilling cycle of hype," wrote Trivedi. "Now Tesla is exporting cars from its Shanghai factory to Europe." India is going the other way. "Our businesses collectively deal with 1,536 Acts, 69,233 compliances and 6,618 filings," wrote Prof VA Nageswaran and Sanjay Anandaram. The private securities services industry "employs 9 million people, the second most after agriculture, with a compound annual growth rate of 20%" and is regulated by the Private Security Agencies Regulation Act (PSARA) 2005 which mandates that anyone wanting to start such an agency will have to furnish, "Two copies of a form to be filled and signed in five places by each company director, along with photograph, an affidavit with two signatures, two thumb impressions, self-attested copies of the company director's PAN (permanent account number for paying income tax) and Aadhaar cards, and passport copies (for address and ID proof), a letter to the police station, and letters from two fellow citizens in testimony to the director's good conduct." "Indirect taxes (excise, customs and goods and services tax) are like direct taxes on production," wrote Nageswaran. "Indirect taxes keep the cost of production up, thus reducing the growth of incomes accruing to factors of production. In the process, tax collection through direct taxes also suffers." "GST (goods and services tax) will fix the imbalance in India's trade system. GST will end tax terrorism and Inspector Raj. I will call GST Good and Simple Tax," said Prime Minister Narendra Modi, Economic Times (ET). Palanivel Thyaga Rajan and Praveen Chakravarty disagreed and blamed the Union government. "First, it has re-constructed the composition of taxation away from the fair and progressive channel of direct taxation towards inherently regressive and unfair channel of indirect taxes. To make matters worse, the Union has shifted a large proportion of taxation (roughly 18 percent of its overall revenues) to cesses, a special form of taxes that remain outside the GST pool and hence do not have to be shared with the states." Extortion can backfire. The government's insistence on telecom companies paying their AGR dues in full (moneycontrol), resulted in "Kumar Managalam Birla stepped down as chairman of Vodafone Idea Ltd, while also reportedly offering the groups stake in the firm to the government for free," wrote Mobis Philipose which means the government may have to write off Rs 1.8 trillion of debt owed by the company. "Already, telecom services have become increasingly unaffordable for the country's poor." Politicians try toe screw companies and each other. We get screwed by everyone..   

How to open taps if tank is empty?

"India was expected to grow in double digits in 2021-22," wrote Vivek Kaul. "However, most double-digit economic growth forecasts for the current financial year have been cut to single digits." In June, the World Bank "slashed India's GDP forecast to 8.3% for FY22, the fiscal year starting April 2021, as against its earlier estimate of 10.1 percent", Business Standard (BS). The Economic Survey, presented in January before the annual Budget, predicted a V-shaped recovery with the GDP growing at 11%, Economic Times (ET). A few days back the Reserve Bank (RBI) retained its "real GDP growth projection at 9.5 percent in 2021-22, BS, and raised its forecast for average consumer price (CPI) inflation to 5.7% from 5.1% projected earlier, CNBC. All these predictions are of real GDP growth which is calculated after adjusting for inflation compared to a base year (Investopedia), which is 2011-12 at present but maybe changed to 2021-22, ET. The RBI's Annual Report for FY21 showed that, "After the decline in the wake of the Global Financial Crisis, the Indian economy started its recovery in March 2013 -- more than a year before the present government took charge," wrote Udit Misra. "But more importantly, this recovery turned into a secular deceleration of growth since the third quarter (October to December) of 2016-17" and "the GDP growth rate steadily fell from over 8% in FY17 to about 4% in FY 20, just before Covid-19 hit the country". India's investment to GDP ratio was 26% in 2000-01, jumped to 34.3% in 2011-12, and fell to "an almost two-decade low of 27.1% in 2020-21", wrote Kaul. Exports jumped from 13% of GDP in 2000-01 to 25.4% in 2013-14, and then fell to 18.7% in 2020-21. Private consumption as a share of the economy increased from 56.2% in 2011-12 to 60.5% in 2019-20 but has fallen to 58.6% of GDP in 2020-21. Investment depends on private consumption, which depends on income growth, which, in turn, depends on increased investment. "This has become like a chicken-and-egg story which has proven difficult to break." "Consumer sentiment in India stayed put near record low in July, weighed down by lower income and higher cost of living," according to survey by the RBI, ET. "The current situation index was at 48.6 in July from 48.5 in May showed the RBI's consumer confidence survey that covered 5,384 households across 13 cities. A score below 100 suggests a pessimistic view  in terms of economic conditions, while anything above that denotes the opposite." Between its June and August meetings, the Monetary Policy Committee (MPC) of the RBI reduced growth projections for the second, third and fourth quarter without giving any reason for doing so, "But this is most likely because of demand-side damage," wrote Roshan Kishore. The MPC has raised its expectation for inflation, so are these precursors of a period of stagflation in India? fears Kishore. The bond market is sceptical, wrote Madan Sabnavis. "The 10-year bond has seen an increase in yield from 6.20 to 6.24% which shows the continuation in scepticism which has been witnessed also in successive auctions on Friday when paper goes unsubscribed or devolves on the PDs. Interestingly, the auction of 6.10% 2031 paper was not subscribed." Finance Minister Nirmala Sitharaman "is the first economist in charge in the North Block after Manmohan Singh," wrote Puja Mehra. "The uncertainty about consumer behaviour continues to keep private sector investment plans on hold. Captains of industry want the government spending taps opened." "The finance minister's response came last month." But, "None of her 'Atmanirbhar' packages so far will do much to address the key challenge that will define Narendra Modi's prime ministership in the long run: the jobs crisis." All these contortions mean only one thing -- the government has no money. Or it is holding on to cash to bribe voters, like farm loan waiver, just before assembly elections next year, especially in UP, wikipedia. Just like before the general election in 2019, Deccan Chronicle. By that time it maybe too late.

Bridge to health is suicide.

"A global media investigation has revealed that Pegasus, a telephone hacking software invented in Israel and supposedly sold only to governments, has been used across the world to tap the phones of politicians, journalists, NGOs and others. In India, the 300 targets include Rahul Gandhi, two serving Union ministers and 40 journalists," wrote Swaminathan SA Aiyar. "But this is not just a game to subvert press freedom -- that is a tiny side-effect of a much bigger game. Snooping has become the very heart of national security, and covers almost everybody under sundry laws." Aiyar is trying to cover up for the government but spying on foreign governments is not at all same as surveillance of citizens to suppress any form of protest and opposition. Alan Turing's code breaking has been made into a movie. "Germany's Army, Air Force and Navy transmitted many thousands of coded messages each day during World War II," BBC. "Thanks to Turing and his codebreakers, much of this information ended up in allied hands -- sometimes within an hour or two of it being transmitted." This was perfectly justified during World War II in which a staggering 75-80 million are estimated to have died, wikipedia. Is the Indian government trying to emulate the East German secret police the Stasi, which was short for Ministerium fur Staatsicherheit, which stands for 'Ministry for State Security'? Britannica. "Within East Germany it sought to infiltrate every institution of society and every aspect of daily life, including even intimate personal and familial relationships." Combine Pegasus with Aadhaar, the greatest mass surveillance system anywhere in the world, forced on citizens of India, and you have total government control over our lives and activities. Former CIA official and whistleblower Edward Snowden "said that Aadhaar is creating a systemisation of public which is completely unrelated to the agenda of Aadhaar," indiatoday. Even as people were dying of the coronavirus the government was using the virus as an excuse to increase surveillance by trying to force citizens to download Arogya Setu app on our phones which would then be able to track everyone 24/7. 'Aarogya setu' means 'bridge to health'. "Strangely though, no one seems concerned about the fine print: the government can share your data with unspecified 'other agencies' for unspecified 'other purposes'," wrote Kalyani Menon Sen. "Terror has always been a trusty ally of the state." "It was the imaginary spectre of violent terrorists that led the public to support surveillance of human rights activists. The Aarogya Setu app too capitalises on our terror of an invisible and deadly enemy." The world thinks India has become an electoral autocracy, BBC, but the government dismisses it as "misleading, incorrect and misplaced", Times of India (TOI). "Uttar Pradesh  Chief Minister Yogi Adityanath on Friday said social media at present was like a 'belagaam ghora [unbridled horse]', and urged the workers and office-bearers of the BJP's IT and Social Media cell here to 'train and prepare' to rein it in," "The Indian Express (TIE). Manage the news through fake concern, manufactured dangers to society, threats and universal surveillance of citizens to hang on to power by any which way possible. "When Indian politicians retire, they don't," wrote TS George. "What makes Indian politics unique is its focus on the self. Every politician is convinced that it is his right to become a minister. Every minister believes that it is his right to remain a minister as long as he lives." Anything, no matter how nauseating, is acceptable. Even using the clean achievements of Indian athletes at the Tokyo Olympics to try and bury the rape and murder of a 9-year old girl in Delhi, Tavleen Singh. Because the Delhi Police is under the Ministry of Home Affairs of the Government of India, wikipedia. "In sum, privacy matters, but is just a tiny part of a massive problem of cybersecurity," wrote Aiyar. No, it absolutely is not. Spying on other governments is a kind of low grade warfare. Is the government waging a war on its own citizens? Is Aiyar defending fascism?   

Who will pop the bubble? Not the RBI.

"The Monetary Policy Committee (MPC) has decided to keep the repo rate steady and unchanged i.e. they are going to hold firm at 4 percent, Shaktikanta Das, Governor of Reserve Bank of India (RBI) stated," Economic Times (ET). This was done to help growth by keeping the cost of borrowing lower than the rate of retail inflation, which increased by 6.26% in June, The Indian Express (TIE). "MPC voted 5:1 in favor of maintaining accommodative stance to sustain growth and aid the recovery process." "Consumer sentiment in India stayed put near record low in July, weighed down by lower income and higher cost of living, according to a RBI survey," ET. "Households' median inflation perception for the current period remained elevated in double digits at 10.3%. Inflation expectation for three months rose by 50 basis points to 11.3%. Median inflation expectations for one-year ahead rose 60 basis points to 11.5%." The RBI raised its consumer price index (CPI) inflation forecast from 5.1% to 5.7% in financial year 2021-22, Business Today (BT). Thus, households' expectation is double that of RBI estimation. Das said, "CPI inflation is projected at 5.7% during 2021-22 -- this consists of 5.9% in Q2 (1 July-30 September), 5.3% in Q3 and 5.8% in Q4 of 2021-22 with risks broadly balanced. CPI inflation for the first quarter (1 April-30 June) of 2022-23 is projected at 5.1%." "Inflation is a decrease in the purchasing power of currency due to a rise in prices across the economy," Investopedia. "A predictable response to declining purchasing power is to buy now, rather than later. "Cash will only lose value, so it is better to get your shopping out of the way and stock up on things that probably won't lose value." Not when people are unsure of future income. "The sentiments on overall spending remained unchanged as higher spending on essential items were offset by a drop in non-essential expenditure with consumers expecting further contraction in discretionary expenditure in the year ahead," the RBI said. "In the last 15 months since the pandemic struck, consumer price index-based inflation has been above 6% in 10 months, 5-6% in two months and 4-5% in three months," so inflation is not really transitory as the RBI would have us believe, wrote a sceptical Madan Sabnavis. The RBI says growth will be 9.5% in 2021-22 so interest rate must be kept low to stimulate growth, but the chief economic adviser predicted growth rate at 11.5% in 2021 in the Economic Survey presented in January, Fortune India. So, why worry? The RBI has been buying government bonds, under its government securities acquisition programme (G-SAP), to inject more liquidity into banks in an effort to encourage lending. But instead of lending the money, banks are parking excess funds in the RBI's reverse repo window at 3.35% interest. This leads to financial losses for banks. "For example, RBI announced the purchase of the 5.63% 2026 paper which has a yield of 5.76%. Giving this up for reinvesting at 3.35% is puzzling." "Over the last two years, the bond market will have absorbed close to Rs 40 lakh crore (Rs 40 trillion) of gross bond supply if one takes into account both state and central government bonds. In comparison, RBI has so far announced around Rs 2 lakh crore of bond purchases. That means interest rates will not come down anytime soon," ET. That is the main problem. Almost everyone in authority in India has an almost religious belief in low interest rates, never mind inflation or the value of the rupee. Although "Das also unequivocally expressed the central bank's resolve to aid economic recovery", "the fine print of the MPC resolution does underline worrying trends, including a stagflation (low growth and high inflation) threat for the economy," wrote Roshan Kishore. Both bonds and stocks are in bubble territory, according to investor Jim Rogers. "The supply of debt is gigantic and inflation is coming," he said, and interest rates will have to go up. Indian markets are in the stratospheric levels, moneycontrol. If the bubble pops, the rupee will drop and inflation will zoom. The RBI does not want to pop the bubble. Perhaps, it's scared of the government. Better let foreigners do the popping. 

Steven Spielberg may recognise today's' India.

"The government on Thursday moved to bury the ghost of retrospective taxation by seeking to amend the law, a move that is expected to end vexatious litigation with 17 companies, including Vodafone and Cairn, apart from addressing criticism about uncertainty of policy regime in the country," Times of India (TOI). "It, however, comes with the rider that the companies will have to withdraw all cases and not demand interest on the money being refunded." It is not clear if the government can lay down conditions when it has been forced into humble surrender after "A French court froze 20 residential properties worth 20 million euros ($24 million) belonging to the Indian government in Paris while upholding a petition filed by Cairn Energy seeking to force the Narendra Modi government to fork out $1.7 billion international arbitration award." The retrospective tax law was passed in 2012 by the previous Congress-led government of Prime Minister Manmohan Singh and "enabled the government to collect tax from earlier years even though they were not taxable at the time," ZeeNews. But why has it taken 7 years for this government to do the right thing? "While the NDA government, in opposition at that time, termed this use of power as 'tax terrorism', the issue has dragged for almost seven years," The Indian Express (TIE). The finance ministry has repeatedly "asserted India's 'sovereign right to taxation' cannot be questioned overseas". The problem is that politicians and bureaucrats in India consider themselves 'sovereign' over the people, like the Mughal and British kings, wikipedia. In the past the sultans and emperors used to indulge in 'shan-o-shaukat, which means 'pomp and show', (wikipedia), while today's sultans live in the exclusivity of Lutyens Delhi (newslaundry), quarantined away from the 'great unwashed', the voters and taxpayers of India. In June, Reuters reported, "Shareholders in Devas Multimedia have sued Air India in an effort to recover sums Devas won in arbitration awards against the Indian government and seize its flagship carriers foreign assets, according to a US District Court filing. The shareholders said Devas and its affiliates were owed more than $1.5 billion by the Indian government." Air India had cumulative losses of Rs 70,820 crore (Rs 780.20 billion) as of 31 March 2021, according to Minster of State for Civil Aviation VK Singh, CNBC. The government has put all of Air India up for sale including 100% of "the low-cost arm Air India Express and 50 percent of AISATS, which provides cargo and ground handling services at major Indian airports", Business Today (BT). Naturally, Tata Group is said to be thinking of an indemnity clause in the sale contract in case the Devas award was enforced, BT. So, "Is this a fresh start, the beginning of an open, predictable, and fair relationship betweenNew Delhi and global capital?" asked Andy Mukherjee. "It'll require a lot more evidence to answer the question in the affirmative." No chance. "The Enforcement Directorate (ED) has issued a show cause notice of about Rs 10,600 crore (Rs 106 billion) to e-commerce major Flipkart and its promoters for alleged violation of foreign exchange law, official sources said on Thursday." US retail giant Walmart bought Flipkart for $16 billion in 2018 on which it paid a tax of Rs 7,439 crore (Rs 74.39 billion), Economic Times (ET). The Reserve Bank (RBI) has told Mastercard not to issue any new cards as it has not complied with data localization rules, wrote Andy Mukherjee. "In April, the monetary authority imposed similar restrictions on American Express Co and Discover Financial Services' Diners Club cards." Foreigners need not despair. Indians are treated even worse. Tax authorities raided offices of the newspaper Dainik Bhaskar because it exposed how various governments in India were concealing the number of deaths due to the coronavirus second wave in April, CNN. If they can't get us on anything they can throw us in prison indefinitely under the Unlawful Activities Prevention Act (UAPA), Gautam Bhatia. As in the film Minority Report, starring Tom Cruise, where people are arrested because they may have been thinking of committing a crime, wikipedia. May seem surreal. Actually, it is very real.      

Relying on the base effect. But, will it work?

 "Inflation readings in the United States have shot up in recent months," wrote Prof Raghuram Rajan. "Yet, at the time of this writing, the yield on ten-year Treasury bonds is 1.24%, well below the ten-year breakeven inflation rate of 2.4%." "One common factor driving up both stock and bond prices (thus lowering bond yields) could be asset managers' search for yield, owing to conditions created by extremely accommodative monetary policies." Which is quantitative easing (QE) by the US Federal Reserve. QE is "large-scale purchases of financial assets, like government and corporate bonds and even stocks. This relatively simple decision triggers powerful outcomes: The amount of money circulating in an economy increases, which helps lower longer term interest rates. This lowers the cost of borrowing, which spurs economic growth," Forbes. However, QE may cause inflation, asset price bubbles and income inequality. In the UK, "public debt as a share of GDP, excluding public sector banks, was 2.218 trillion pounds or 99.7% of GDP in June, its highest since March 1961," Reuters. "However, debt servicing costs as a share of GDP remain low by historic standards", and the average maturity for the debt is 15 years. But, actually a lot of that debt is short term. "When the central bank hoovers up five-year government debt from the market in a monthly bond-buying programme, it finances those purchases by borrowing overnight reserves from commercial banks on which it pays interest (also termed 'interest on excess reserves')," wrote Rajan. This is how QE shortens government debt maturity, which is camouflaged when calculating the average by a few long-dated bonds. The US Federal debt or the total public debt is $28.13 trillion, Federal Reserve Bank of St Louis (FRED). Which means, it reached 127.65% of GDP in the first quarter of this year, FRED. "If government debt is around 125% of GDP, every percentage-point increase in interest rates translates into a 1.25 percentage-point increase in the annual fiscal deficit as a share of GDP. That is nothing to shrug at." India is a high-inflation economy. The consumer price index (CPI) rose by 6.26% in June, a shade lower than 6.30% in May, The Indian Express (TIE). Wholesale price index (WPI) rose by 12.07% in June, partly due to the base effect of -1.81% in June 2020, but also due to the enormous increase in the prices of petrol and diesel and of manufactured goods, TIE. In March, the government and the Reserve Bank (RBI) agreed to "retain the bank's (CPI) inflation target at 2%-6% for the next five years", Reuters. But, retail inflation is higher than the RBI's target. "The dominant narrative is as follows: High inflation is being driven by temporary factors which will fizzle out soon," wrote Pranjul Bhandari. Taking various drivers of inflation into account, "All said, we expect consumer price inflation to average an above target 5.4% year-on-year in 2021-22 with food inflation around 4% and core inflation close to 6%." While central banks in the US and Europe will not be in a hurry to raise rates "some others, including those of Brazil, Mexico, Russia and parts of Central and Eastern Europe have already started tightening." "Prices tend to exhibit downward rigidity in India, and reverse only partially when the economy unlocks," wrote Sonal Verma Aurodeep Nandi. "The cumulative build-up of cost pressures, including raw materials and logistics costs, is leading companies to pass more of the costs to consumers." More than 60% of the cost of petrol and diesel is due to increases in central and state taxes, News18. Even, cooking oils are not spared. Palm oil has a duty of 32.5% on imports, while "crude soybean and soyoil are taxed at 35%, DH. Since rise in prices is calculated in relation to the previous year's prices, it is possible they think that next year's increases will seem negligible compared to the huge increases of this year and they will be able to bluff their way to victory in next year's assembly elections, especially in UP (wikipedia). Are the people so stupid? Hope not.          

What do they say about statistics?

 "From 1936 to 1956, the US fertility rate rose from 1.8 to 3.2," wrote Prof Karl W Smith. This resulted in the 'baby boomer' generation, which is used to describe all those born between 1946 and 1964, Investopedia. "From the 1960s through the mid-1980s, net domestic investment by private businesses averaged 5.4% of gross domestic product each year. One dollar of every $20 spent in the US was directed toward expanding the size and scope of private enterprise," wrote Smith. "After the baby boom, there was a baby bust." Private investment fell because, "Without a growing supply of new workers, new private investment has a harder time generating consistent positive real returns." With lower returns from investment money goes into buying land. "In the formal economic models of this phenomenon -- known as secular stagnation -- land prices can theoretically go to infinity. In the real world, they are prone to bubbles." In China, "Bright, smart girls in my school days were told to postpone marriage and child-rearing," wrote Shuli Ren. "We contributed to the gross domestic product (GDP) of the People's Republic of China." "We held up our part of the sky [the 'half' that Mao famously said women do]." "But lately, being childless in the country has become the new sin to be atoned for. As Beijing starts its single-minded pursuit of its new three-child policy, independent Chinese women are being marginalized and pushed aside -- not just in terms of political polemic but in practical, economic terms." "From 4.82 children per woman in 1980, India's fertility rate has dropped to 2.2 in 2019," News18. "India's birth rate in 1980 was 36.16 per 1,000 people that dropped to 17.64 in 2019." China's fertility rate dropped to 1.69 and the birth rate dropped to 10.5 per 1,000 people in 2019. India's current population is 1.4 billion of which 64.9% are between the ages of 15 and 64, countrymeters. Which means the vast majority is in the working age group, as opposed to the US and China. Falling birth rates, which means fewer dependents, along with a large working population is supposed to result in higher economic growth and is known as the 'demographic dividend', Investopedia. Provided the economy can create meaningful jobs for them. The periodic labour force survey (PLFS) showed that unemployment in India dropped from 6.1% in 2017-18 to 5.8% in 2018-19 and further to 4.8% in 2019-20, and the labour force participation rate (LFPR), which is the number of people working or looking for work, rose from 36.9% to 37.5% and then to 40.1% in 2019-20, wrote Prof Tulsi Jayakumar. Looks excellent, but careful study revealed that "Eight states, including populous one like Uttar Pradesh, have more than 70% of people reporting themselves as self-employed, following current weekly status (CWS) approach. Among urban households, meanwhile, the proportion of casual labour increased." 9.1% of people in rural and 14.7% in urban areas did not earn any income from economic activities. "The weakening of economic activity force many to seek distress employment, resulting in a 43-million rise in total employment numbers in 2019-20 from the year earlier," wrote Prof Himanshu. "An increase in distress employment usually shows up in higher employment of women, children and the elderly, as households push the reserve labour force into the active labour market to maintain their real incomes." "The results are surprising because they correspond to a period when India's GDP growth decelerated sharply; it came down to 4.2% in 2019-20," wrote Udit Misra. The difference is because the National Statistical Office report is based on Usual Status but a true picture comes from the Current Weekly Status (CWS) followed by the Centre for Monitoring Indian Economy (CMIE). "Female labour force participation rate in India fell to 16.1% during the July-September 2020 quarter," Reuters. "Most employed women in India are in low-skilled work, such as farm and factory labour and domestic help, sectors that have been hit hard by the pandemic." The world knows how dire the situation in India is. Pity, they don't.      

Birla's gift is a masterstoke.

"The chairman of Vi, Kumar Mangalam Birla has written to the central government offering to hand over the stake he owns in the telco, if it would help save the company," The Indian Express (TIE). "Vi, formerly known as Vodafone Idea, is reeling under debt in excess of Rs 1.5 lakh crore (Rs 1.5 trillion). As of March 31 this year, the company owed nearly Rs 60,000 crore (Rs 600 billion) to the Department of Telecommunications (DoT) as adjusted gross revenue (AGR), Rs 96,270 crore (Rs 962.70 billion) in deferred spectrum obligations and another Rs 23,000 crore to banks and financial institutions." "If there is a lesson for businessmen in the collapse of telecom major Vodafone-Idea, it is that they should tread carefully because there is no certainty that regulation will remain fair for all players. As they make investments, they must, at all times, be prepared to accept changes in the rules that could be completely arbitrary and could even favour the competition," Financial Express. The problem hinges on the meaning of adjusted gross revenue (AGR) which telecom companies agreed to pay in addition to enormous licence fees and fees for spectrum. "According to the DoT, the calculations should incorporate all revenues earned by a telecom company -- including from non-telecom sources such as deposit interest and sale of assets," TIE. The dispute has been going on since 2005 and the companies have visited the Supreme Court on several occasions, TIE. And lost each time. "The Adjusted Gross Revenue (AGR) dues payable by telecom majors, including Vodafone Idea and Bharti Airtel, cannot be subject matter of any future litigation, the Supreme Court has said," Business Standard (BS) on 24 July, 2021. Nick Read, CEO of UK based Vodafone Group Plc has ruled out any further investment in the company, BS. Which means it is ready to let the company go bankrupt, with consequent loss of jobs. The DoT may pick over the carcass to salvage as much as it can from sale of assets of the group and banks will be left with a pile of bad debt. "Nationalization should rank high among the few viable options worthy of consideration, even though the state getting into the driver's seat of private enterprise has in the past created zombies on perpetual taxpayer support," wrote Andy Mukherjee. The two government owned telecom companies, BSNL and MTNL, are already making losses in billions of rupees, factly. Merging one loss-making company with another makes little sense. "In a research note this week, Deutsche Bank AG's telecom analyst Peter Milliken and associate Bei Cao laid out the stark choice facing what they describe as 'the most painful market we have come across to operate a telecom'." That is why Birla's offer of handing over his share of the company to the government becomes a classic 'poisoned chalice'. If the government declines it maybe blamed by the thousands of employees (wikipedia), and their families, who will lose their jobs. With Vodafone out of India, the retrospective tax demand of Rs 221 billion on Vodafone for the purchase of Hutchison Telecommunications will become null, Economic Times (ET). Not just that, Vodafone will be free to enforce an award of Rs 750 million against the Government of India for part of legal and arbitration costs, BS. Recently, the government confirmed "that a French court has ordered the freezing of certain Indian assets in Paris on a petition by Britain's Cairn Energy, which is seeking to recover $1.72 billion from New Delhi after winning an arbitration against retro tax," The Week. "It has identified $70 billion of Indian assets overseas for the potential seizure to collect the award." "Devas Multimedia Pvt Ltd has joined Cairn Energy Plc in its attempt to seize Air India Ltd's assets abroad," moneycontrol. Air India had a total debt of Rs Rs 383.66 billion in 2020-21, CNBC. The government is keen to sell Air India but buyers are asking for indemnity against seizure of assets, The Week. If the government takes over Vi it will have to pay itself for its own taxes and recompense the banks. A masterstroke by Birla.

When things are going so well, shouldn't the RBI worry?

"A retail inflation level of above 6% has already begun to worry markets but is yet to show a visible concern from the Reserve Bank of India (RBI)," wrote Aparna Iyer. That is because the formal economy has done well but, "Economic shocks have hit the informal sector disproportionately due to the low or the lack of financial buffer." "The key driver of the increase in headline retail inflation is government taxes on fuel, and the rest is largely imported inflation due to a sharp rise in global commodity prices." With high unemployment workers are in no position to bargain for higher wages so the RBI is not worried about retail inflation transforming into wage inflation. "India's jobless rate fell to the lowest level in four months in July," as "The unemployment rate dropped to 6.95% last month from 9.17% the previous month, according to the latest data from private research firm Centre for Monitoring Indian Economy (CMIE)," Times of India (TOI). "From groceries to refrigerators, smartphones and cars, sales of essential goods and discretionary products bounced back sharply last month, with several manufacturers reporting their best-ever July numbers this year," Economic Times (ET). "Sales of most categories increased 20 to 50% from a year earlier." "Women professionals, especially those in the IT sector, may never have had it so good, with diversity hiring being the highlight of the season. Not only is there a scramble to bring talent on board -- with emphasis on immediate joining -- a significant number of hires are women, with companies offering them up to 70% jump over their last drawn package," ET. "India's merchandise export in July 2021 rose to $35.17 billion, higher by 47.91 percent on a year-on-year basis, preliminary official data showed on Monday," Zee Business. "Exports during April-July 2021 were $130.56 billion, up by 73.86 percent over the same period of 2020 ($75.10 billion)." "India's services exports increased 24.1 percent month-on-month to USD 19.72 billion in June 2021, the RBI said on Monday," ET. "India Inc's capex (capital expenditure, investopedia) cycle peaked in 2011, and since then, it has been a decade-long wait for its revival," wrote Aruna Giri. This could be changing. There has been "An outlay of $15 billion by top steel companies," "$5 billion by leading cement companies", "Over $15 billion commitments in new projects by oil & gas companies", "$10 billion investments in the power and coal", and $5 billion outlay in the non-ferrous sector". "Factory activity in the country bounced back in July as demand surged both at home and abroad, prompting companies to create new jobs for the first time since the onset of the pandemic", as "The Manufacturing Purchasing Managers' Index (PMI), compiled by IHS Markit, jumped to 55.3 last month from 48.1 in June," NDTV. "The output of eight core sectors grew 8.9 percent in June, mainly due to a low base effect and uptick in production of natural gas, steel, coal and electricity, official data showed," Business Standard. "The government collected Rs 1,16,393 crore (Rs 1.16 trillion) GST revenue for the month of July after it dropped below the Rs 1 lakh crore mark in June," ET. With marked increases in so many indicators, such as exports, sale of consumer goods, PMI, employment, new investments and GST collection, why is the RBI unworried about inflation. "Across the world, supply versus demand mismatches are fuelling inflationary pressure, In such circumstances, contrary to the popular notion of high-quality stocks taking a beating, history shows that such companies have outperformed the broader market even more strongly (when CPI inflation exceeds 6%) on revenue growth, profit margins and shareholder returns," wrote Saurabh Mukherjea. "Equity investors have witnessed a wealth addition of more than Rs 31 lakh crore (Rs 31 trillion) in the first four months of the current fiscal, helped by an overall bullish sentiment in the market," ET. Inflation, or rising prices, means the rupee is buying less everyday. We know the rupee has weakened against the dollar from 3.3 in 1947 to around 74 today, 75 years after independence, Thomas Cook. A real fall will make imports expensive and add real zest to inflation. As long as the RBI is ready to take the blame. Fall on its sword. 

Nobody is safe until we all are.

"How do democracies die?" asked Prof John Keane. "Democide is usually a slow-motion and messy process." Democracy can end suddenly in a military coup d'etat as happened in Egypt (2013), Thailand (2014) and Myanmar and Tunisia (2021). "Less obvious is the way democracies are destroyed by social emergencies." When people are victimised and humiliated, "The powerless and the privileged join hands to wish for a messiah who promises to defend the poor, protect the rich, drive out the demons of corruption and disorder and purify the 'soul' of the people." "When this happens, demagoguery comes into season." "A thoroughly 21st century type of top down rule called despotism triumphs." "Might this be how democracy dies in India?" "The law in India has been weaponised by the state as the most effective tool of persecution of all those who dissent," wrote NC Asthana. "Far from being the most important 'service arm' of the state, the role of the law enforcement agencies, whether the state police, CBI, NIA, ED or NCB, etc., has been reduced essentially to the proverbial knock at the door of citizens, whisking them away, or implicating them in false cases that would see them running to the courts for years on end with their lives and livelihoods destroyed in the process." "The most effective method of subjugating the people in general and dissidents, in particular, is to hit them where it hurts the most -- deny them justice." This is nothing new. Politicians and civil servants have exercised unchallenged power over citizens without any accountability which culminated in the Emergency, imposed on the nation from 1975 to 1977, wikipedia, which, in turn, led to Morarji Desai being elected the first non-Congress prime minister of India from 1977 to 1979, wikipedia. Desai seemed to suggest that he was a "sanyasi who was suffering for the nation", wrote Vir Sanghvi. "What none of us realized was that the sanyasi had gathered up every secret file that he could get his hands on at the PMO (Prime Minister's Office) before they booted him out." He asked Arun Gandhi to wrote a book on his time as prime minister which would show how, "A decent, honourable Gandhian called Morarji goes to Delhi to do his duty as prime minister. He is thwarted in this desire by such demons as Charan Singh and Indira Gandhi," and yet he had stolen "a treasure trove of confidential communications, government files and secret letters." It is incidental that, "Shri Morarji Desai was born on February 29, 1896 in Bhadeli village, now in the Bulsar district of Gujarat," PM India. Paranoia is acute in this government. The Prime Minister "made two speeches in Parliament and in both he held forth against 'professional protesters' and said that the 'pure' protest of the farmers was being polluted by the appearance of this kind of 'parasite'. In his Rajya Sabha he sneered at what he described as a new kind of FDI. He said this acronym now means 'Foreign Destructive Ideology'," wrote Tavleen Singh. "Paranoia involves intense anxious of fearful feelings and thoughts often related to persecution, threat or conspiracy. Paranoia occurs in many mental disorders, but is most often present in psychotic disorders," Mental Health America. Since it is irrational, the reaction is to lash out at anyone who dares to disagree. People have family and friends and as anger grows so the degree of oppression must grow with it until it becomes uncontrolled, egregious brutality. Umberto Eco has written about "the intellectual-moral climate engendered by fascism in particular," and "though fascism has shown up in several different shapes and forms in different countries at different points in time", "we can still talk in terms of a common archetype of fascism", wrote Anjan Basu. "The bogey of the intruder, the 'other', is as potent a weapon in the hand of the Indian state today as it was in Hitler's," The Wire. Since paranoia is irrational nobody is safe. It's all or nothing.