Our government is permanently on bended knees.

Today is the fifth anniversary of the Mumbai attacks, also known as 26/11. Since then it has been clearly proven that the attacks were carried out by Pakistani terrorists, trained and abetted by the Pakistani intelligence agency, the ISI. The US had its 9/11 in 2001. Every year since then the names of the victims are read aloud at the site. The US attacked Al Qaeda in Afghanistan forcing Bin Laden to flee from his hideout in the caves at Tora Bora but there was to be no escape. On 2 May, 2011 US Navy Seals attacked his house in the garrison town of Abbottabad in Pakistan, killed him and dumped his body into the sea. Since 2005 the US has been assassinating those it sees as its enemies, hiding in Pakistan, by firing missiles from drones. The latest was the chief of the Tehrik-i-Taliban, Hekimullah Mehsud who was taken out on the first of this month.
Contrast the furious US response to the killing of its citizens to the loving embrace of Pakistan by this Congress led government. Hardly had the funeral pyres cooled down than our most revered Prime Minister was signing an agreement with Pakistan on 16 July, 2009 confessing to Indian involvement in the separatist movement in Baluchistan. Pakistani Foreign Minister, Shah Mahmood Qureshi, would not have been surprised because he had expected India to negotiate for peace on " bended knees ". Seems that the government has decided to wipe this atrocity from our memory because there is not one word on the attack in today's Times of India, the newspaper which led a campaign of subjugation called " Aman ki Asha " or " desire for peace ". We run a Samjhauta ( which means " understanding " ) Express between Delhi and Lahore allowing Pakistanis free access to our country. Pakistani singers and actors earn vast sums working in Bollywood films although our films are restricted in Pakistan. Musharraf was treated as a VIP when he visited India last year with his wife. He is a war criminal responsible for the unprovoked attack on Kargil, accused of treason in his own country. Is it any wonder that Pakistani Prime Minister, Nawaz Sharif wants visa free travel between India and Pakistan? A nation of 1.2 billion people allowing a country of mad dogs to keep killing our citizens. Why?

Are we going to become a country of homeless people?

Housing prices increased in 12 cities in the second quarter of this financial year. Kolkata rose by the highest margin of 5.3%. Although prices in Delhi declined by 4.5% in this quarter they have risen by 6.7% year on year. If property prices in cities have touched zenith people with money, especially black, will look elsewhere
to invest and they are now buying up rural land. Guarav Jain, a real estate consultant says that the average buyer of rural land " is someone who is over 40, kids educated, has a house and is wondering what to do with surplus cash." In Vadicherla village in Andhra price of land was Rs 20,000 an acre 10 years ago. In 2003 it was Rs 25,000 an acre, by 2006-07 it had risen to Rs 200,000 an acre, to Rs 300,000 in 2010 and to Rs 1.2 million in 2012. The curious thing is that Vadicherla is a village of some 700 families, around 100 km from the nearest town, Warangal and 15 km from the Vijayawada-Hyderabad highway. The price of land in Ramavarapadu, a village near Vijayawada, shot up from Rs 700,000 an acre to Rs 70 million and in Mardi, which is 15 km from Solapur in Maharashtra the price has jumped from Rs 20,000 to Rs 1 million an acre in 10 years. Such prices are bound to make fundamental changes to villages in India. Farming is hard and dependent on fickle weather changes, so farmers are tempted to sell out by these mouthwatering prices and work as day laborers instead. The disappearance of agricultural land will lead to decreasing produce which, with an ever increasing population, can only mean disaster in the near future. When children of farmers see some of their friends driving around in cars they put pressure on their own parents to sell out and enjoy a life of luxury. This is fine while the money lasts but once it finishes they will find no work unless they are educated and will take to crime. This has already happened in Delhi. Shortage of land and surplus funds, along with the NREGA, has led to severe inflation which has led to a 40% drop in savings among urban middle class. " Poor households are unable to maintain the consumption at current prices while middle income families find their purchasing power erode fast, thus having far less surplus money," said DS Rawat, General Secretary of Assocham. Soon we will not be able to afford food or shelter. 

Is it real or just smoke?

At a press conference this morning US Secretary of State, John Kerry announced an agreement with Iran at Geneva. Under this Iran has agreed to halt all uranium enrichment beyond 5%, give up its stockpile of uranium enriched to 20% and stop further work on the nuclear reactor at Arak which would have given it an alternative fuel, plutonium for nuclear weapons. Iran also agreed to " intrusive monitoring " by the IAEA of its nuclear facilities and may repair existing centrifuges but not install new ones. Iran will be allowed to sell 1 million barrels of oil per day but will receive only $4.2 billion every month from sales, the rest of $15 billion will go into international restricted accounts. The language was surprisingly harsh. " If Iran fails to meet its commitments we will revoke the relief." " Sanctions affecting crude oil sales will continue to impose pressure on Iran's government." The agreement is for 6 months and it is on Iran to prove that it is complying with its promises, if not sanctions will be reimposed. " The concessions Iran has committed to make as part of this first step will also provide us with increased transparency and intrusive monitoring of its nuclear program." So, is this the most humiliating defeat for Iran since Darius III was defeated by Alexander in the Battle of Issus in 333 BC. Iranian Foreign Minister, Mohammad Javad Zarif appeared surprisingly cheerful given what Kerry had just told everyone. It maybe because Iran got the most important concession of all. Although there is no specific mention of it Iran has achieved what it has been demanding all along and that is the right to enrich uranium for peaceful purposes, even if it is only up to 5%. Having achieved what it set out to do Iran can afford to cooperate with every demand that the western countries make and gradually get the sanctions lifted, knowing that once they are completely gone it will be very difficult to impose them again. Iran has the infrastructure and the knowledge and can afford to wait for a year or two to get nuclear weapons, which is what it wants. So Kerry's posturings were to reassure Israel and Saudi Arabia, which has threatened to obtain nuclear weapons from Pakistan, and Republicans back home. Israel has already called the agreement an early Christmas present for Iran. So, is all this merely smoke or will it really stop Iran?

Is it worth sacrificing the country?

The government has announced that due to prolific monsoon rains this year the area being planted for wheat has more than doubled to 1.519 million hectares compared to 646 thousand hectares last year and so we may expect a record crop of 94.88 million tonnes early next year. Sugar cane is being planted on 81,000 hectares compared to 45,000 hectares last year. But is this a good thing? We do not possess enough storage space for so much wheat so a lot will lie out in the open to be eaten by vermin or just rot away. Exporting wheat could bring in desperately needed foreign exchange but we are not told whether it will be profitable after the government has bought wheat from farmers at the Minimum Support Price and added the cost of transport. Sugar mills in UP, the second largest producer of sugar in India, are refusing to begin crushing sugar cane because they cannot afford to buy cane at the present rates. Last year the UP government forced them to buy cane at Rs 280 per quintal but, due to depressed price of sugar, millers made a loss of Rs 16.5 billion. Millers say that they cannot pay more than Rs 225 per quintal because they still owe Rs 24 billion to farmers while farmers are demanding Rs 350 per quintal because of increased input costs. Political parties being gangs of thugs the first response of any government is with threats of violence, which is what UP has done. If much higher areas of land are given over to wheat and sugar cane because farmers are being guaranteed higher prices then there will be less land for planting vegetables, which maybe why food inflation is at over 16%. Food inflation is out of control because wages of casual labor in rural areas have shot up because the MNREGA scheme has set a floor rate for wages by paying Rs 215 per day for 100 days a year, for doing nothing. But surely it must be a good thing for such poor people to have more money? Not if they have to pay even more for milk, vegetables and eggs and not if the fiscal deficit is in danger of causing a credit rating downgrade to junk status. To fudge the books the Congress has decided to rollover $15 billion of expenses to next year's budget to meet its target of 4.8% of GDP. Each political gang is doing whatever it thinks will win it a few more seats at next year's elections. But is it worth sacrificing the country for it?

The most entertaining elections ever.

For educated middle class Indians elections are boring. The same ugly corrupt faces competing to promise free handouts to the poor at taxpayer expense and then trying to buy votes by distributing cash, saris or pouches of alcohol. All parties are more or less same, you just try to choose the one you think is the least villainous of the lot. If you vote at all. This time it is different. Two mavericks, who are probably the only 2 politicians in India without billions in black money, are creating all sorts of problems for the other gangs. One is Mamata Banerjee in Bengal. When she withdrew support from the government last year the Congress thought that she will self destruct in her state because of her eccentric and authoritarian behavior but she won a resounding victory in the gram panchayat elections in July, trouncing the Congress and the CPM. It appears that she has been cleaning up the rotten administration in the state, totally corrupted by the 30 year rule of the CPM, so that the cost of business is one of the lowest in Bengal today. It maybe the reason why David Cameron chose to visit Bengal his way to Sri Lanka a week ago. The other is Narendra Modi of Gujarat who is the Prime Ministerial candidate for the BJP and is promising clean government which is anathema for civil servants and other politicians. How are they supposed to make tons of black money so that their families are secure for generations if this fellow carries out his threat of reducing corruption? Is the man completely loopy? The excitement is drawing in foreigners. When Goldman Sachs raised India to marketweight in expectation of Modi's victory the Congress went ballistic. Our most revered Commerce Minister, Anand Sharma called it " most inappropriate and objectionable ", to which Jim Rogers, Chairman of Roger Holding said," What Indian politicians are saying if you criticize is that you can't comment if you are an outsider. That is one of the problems for India, and this is why India has been a disaster for so long." " The best-run Indian state has not done as well as the worst-run Chinese state since 1980," he said. " So, I am saying, throw all the existing politicians out and find a new set from wherever or however and start again." Howls of anguish, blatant lies and foul abuse: this has to be most exciting elections ever.

And they'll come tumbling down.

Between 1981 and 1989, 7 buildings were constructed at Campa Cola Society in Worli, Mumbai. Builders were given permission to construct 5 floors but, as is usual in Mumbai where the construction industry is controlled by the building mafia, extra floors were constructed and sold off to unsuspecting buyers. One building has 20 floors and another has 17. During the 80s it would have taken years to construct that many floors so it is inconceivable that local politicians, state government and municipal officials were unaware of what was going on. Clearly massive bribes must have changed hands. In 2002 the Brihanmumbai Municipal Corporation suddenly woke up to the illegal constructions and in 2005 concluded that all flats above the fifth floor were illegal. Demolition notices were issued against 83 flats. People living in these flats must have been devastated and, quite naturally, filed cases for relief. A highly corrupt country like India generates vast amounts of black money. The government reckons it is 10% of GDP but like all government figures it is highly suspect. It could well be anywhere between equal to the GDP or double of it. It is dangerous to keep mountains of cash at home so this money is invested in properties. Properties in Mumbai are more expensive than in Manhattan so it is not a joke to be told that your flat will be demolished. None of these people could possibly buy an apartment in Mumbai at present rates and will become homeless. Now the Supreme Court has ruled that 103 flats will be demolished and has asked all residents to vacate by 31 May 2014. The reason why criminals flourish in India is because justice is selective. The Court did not order the builders and municipal officers to be arrested and made to pay these residents to buy new flats so the villains get to enjoy their loot while innocents suffer. And what about Delhi where the Supreme Court is situated? A visit to Vasant Kunj, Lajpat Nagar or Kishangarh will reveal that owners of buildings have added illegal floors without permission and without strengthening the foundations of the buildings. Earthquakes are rare in Mumbai but very common in Delhi. On 12 November 4 quakes struck Delhi after midnight when most people would have been in bed. Will the Court order demolitions in Delhi or wait for nature to do it?

Can we bank on our banks.

Speaking at Bancon, the annual bankers' conference in Mumbai, RBI Executive Director, B Mahapatra said," Till March 2011, things were manageable. We had around Rs 1.1 lakh crore ( trillion ) in recast loans, but now if you see, things are quite out of control. It has gone up to Rs 2.7 lakh crore. This is only CDR ( Corporate Debt Restructuring ) and if you put both ( CDR and bilateral restructuring cases between banks and companies ) together, maybe it might exceed Rs 3.25 lakh crore." This is scary stuff. Banks, especially those controlled by the government, are sitting on a mountain of bad loans and restructuring is one way of not showing the loans as losses on their books. Banks have had to increase provisions for these loans in case they do go bad, which has seen a fall in profits of public sector banks. Central Bank reported a loss of Rs 15.09 billion in the September quarter followed by Untied Bank of India with a loss of Rs 4.89 billion. Net profit of Corporation Bank has dropped by 96% from Rs 4.06 billion to just Rs 155 million while that of State Bank of Mysore dropped by 79.3% from Rs 1.45 billion to Rs 300 million. A lot of these loans maybe wilful fraud with the connivance of bank officers who are bribed to disburse large loans for commercial projects and the money is then diverted for personal use or for other dubious projects. The casual manner in which banks lend money was beautifully illustrated recently in Noida where a builder sold apartments to multiple buyers by arranging bank loans for them. The banks are now forcing these people to continue to repay their loans for properties they do not possess. A Deputy Governor of the RBI, KC Chakrabarty said that banks had written off Rs 1 trillion of bad loans in the last 13 years. He exposed a subterfuge called a " technical write-off " wherein a bank takes a hit on its profits by writing off a loan but continues efforts to recover it in courts or other forums. " We must move away from restructuring, there should not be any category called restructuring. The moment it is restructured, it should be declared as NPA, there should not be any technical write off..." he said. Public sector banks are owned by the government which means that they are controlled by politicians and run by civil servants. A bigger bunch of villains you will not see.

Cannot be rich without exploitation.

Writing in the New York Times, Nobel Prize winning economist, Paul Krugman says that the US economy will remain depressed for a long time to come. He quotes Larry Summers,former Treasury Secretary under Bill Clinton, who thinks that the US will be in " secular stagnation ", which is a persistently depressed state where full employment can only be produced by creating bubbles, which will be temporary. Krugman says that the US economy was growing in the 60s and 70s because the population was growing due to the baby boomer generation but now the population is stagnant. Another cause is the trade deficit which has been growing since the 80s. He has been a vocal supporter of the Fed Chairman Ben Bernanke's attempts to stimulate growth by keeping short term interest rate at 0% and injecting $85 billion dollars every month by buying treasuries and mortgage related securities. Some economists would go further. They recommend negative interest rates where people will be charged for keeping money in banks or holding on to cash. This will result in the dollar to fall in value and, while this may reduce the trade deficit by making exports cheaper and imports more expensive, it will surely result in tit-for-tat devaluation of currencies across the world and the end of the dollar as a reserve currency as central banks dump US treasuries. The Republicans have a simple solution to improve the economy. Cut taxes for the rich and make up the shortfall in revenues by cutting food stamps for the desperately poor. If the rich have more money, they say, they will invest in new businesses which will create jobs which, in turn, will draw people out of poverty into gainful employment. But will it? A rich man may choose to spend the extra money in buying a luxury yacht made in Germany, a painting by a dead artist or a factory in China. How will that create employment in the US? Major US companies prefer to hold money abroad rather than paying tax in the US. That is why the middle class is shrinking as good jobs disappear, to be replaced by jobs paying less than menial wages as bosses take home millions in bonuses. The real reason is that rich countries became rich by exploiting poor countries by buying up raw materials cheaply and selling manufactured goods at exorbitant rates. Now that poorer countries are refusing to be exploited the rich Americans are exploiting the poor ones. That is the dirty secret.

Good bye to Tendulkar.

The superlatives poured in. Slimy politicians were seen in the stands on the second day of the test match on Saturday when he came into bat at 38 not out overnight. Everyone wanted to be there when he scored his last century, but it was not to be. On 74 he tried to steer a slow off break from Narsingh Deonarine and was caught off the outside edge by Darren Sammy standing at first slip. As he walked off Sunil Gavaskar, sitting in the commentator's box, was effusive," Sachin Ramesh Tendulkar, thank you, thank you, thank you." Figures and trivia will keep statisticians earning their pocket money for sometime to come. Age 40 years, played 200 test matches, hit 51 centuries, scored a total of 15,921 at an average of 53.79 and even took 46 wickets at an average of 54.17. He hit 69 sixes and 2058 fours and ran 7275 runs for a total of 1,46,351 kms. He played on 59 different grounds and batted for 688 hours and 21 minutes. We may say that Tendulkar was one of the greatest batsmen of all time but would it have been possible if Sunil Gavaskar had not shown the way? In the fifties and sixties we had no one we could depend on to open the innings against the likes of Hall, Gilchrist, Trueman, Tyson and Davidson. In his very first series in the West Indies Gavaskar scored a total of 774 runs at an average of 154.80 and India won the series 1-0, the first ever series win on foreign soil. But his greatest innings was probably at the Oval in London in 1979 when India was set 438 to win in the last innings of the match. He scored 221, as masterful a display of patience, concentration and strokes as you will see in a lifetime. If the English captain, Mike Brearley had not deliberately wasted time by changing the field after every ball we could have won. For the first time India had an opener we could depend on. There were no helmets in those days so he batted against the most fearsome fast bowlers in the world in a floppy panama hat with the ball whizzing around his neck and head. Tendulkar brought us pleasure but it was Gavaskar who gave courage to Indian cricket. Another great champion is also on the verge of bowing out as Vishwanathan Anand is 2 games down with 6 games left to survive the challenge of Magnus Carlsen. Great people bow out but filthy politicians go on for ever. The tragedy of India.

We will not be fooled forever.

Our most revered Finance Minister has been shooting off his mouth again. On 15 November, at Bancon 2013, which is a banking conference in Mumbai, he said," Monetary policy has no impact on food prices.
The only way we can contain food inflation is to augment supplies, but supplies are not entirely elastic." What is that supposed to mean? If a bumper kharif crop after the best monsoon for over 20 years is not enough to increase supplies what will? Obviously he is never going to admit the truth which is that the government is entirely responsible for the rise in prices of food. The Minimum Support Price paid to farmers for grains sets a high base price irrespective of supplies and MNREGA has caused rural wage inflation which feeds into prices of produce. High grain prices increase the cost of feeding animals which means the prices of milk, eggs and chicken keep rising. To win in 2009 the Congress forgave all loans to farmers. Faced with high NPAs in state controlled banks it cannot repeat the same bribe this time so maybe this is another way of providing a bonus to farmers. Our Agriculture Minister, who is a friend of the Congress, has said that rising prices are good for farmers.  " Supplies won't increase dramatically in a short period of time. For supplies to rise we need great investment, great production, better distribution and better logistics. So, we have a challenge," the FM said. Which begs the question: What the hell were you and your cronies in government doing for the last 10 years? The government has stockpiled over 75 million tonnes of grains when the mandate is for 28 million tonnes. Thus the government is guilty of hoarding grains, causing prices to rise. This is a criminal offence. Why was salt selling at Rs 150 per kg in the eastern states just a couple of days ago? The lies do not end there. Heads of Central Public Sector Enterprises were summoned to the Finance Ministry den at North Block in Delhi and ordered to pay higher dividends so that the fiscal deficit does not shoot up. Oil companies ONGC and Indian oil and the gas provider GAIL were there as they are sitting on large cash piles. We were told that these companies were making huge losses because of subsidies so fuel prices were raised, feeding into electricity bills and airlines losses. Lies cannot fool us all the time.

India is surviving on black money.

We have been banging on about the excessive levels of taxation in India extracted by force by a vigilante tax department supported by a hostile government, keen to extend its survival by bribing voters with taxpayer money. This has naturally resulted in a jump in litigation as hapless citizens look to courts for protection, as explained by one Guatam Nayak in an article. Tax fellows have been set a target of growing collections by 20% which is impossible when the economy is growing by 5%. The threat of cessation of investments by foreign companies led to the dilution of the General Anti Avoidance Rules, which sought to collect taxes on transactions going back to 1965. But citizens do not have the option of saving money in a less parasitic environment. Encouraged by politicians tax fellows seek to ensnare people by dubious interpretation of tax laws and since 50% of the demand has to be deposited before appeal is heard an honest taxpayer ends up being unlawfully victimised. The system is based on extraction of money by force and is known as Tax Deduction at Source. Thus, banks are required to deduct 10% tax at the time of paying interest on deposits even if the total tax paid by an individual far exceeds her annual tax liability. The person then has to file returns to claim a refund which may take over a year. It is an adversarial system practised with a ferocity that would have made the British proud. If direct taxes are severe indirect taxes are much worse because they are levied in stages which keeps them hidden. A person travelling from Delhi to Toronto has to pay a total of $183.03 in taxes. Austria charges $34.60 in security and service taxes at Vienna airport, Germany charges $36.70 at Frankfurt and Canada charges $51.70 on security, sales tax and improvement fee at Toronto. Delhi is the highest at $60.03 under Passenger Service Charge, Passenger Service Fee and India Development Fee. Taxes on domestic flights are equally onerous but are hidden under incomprehensible codes. This is why an American is able to fly 1.8 times every year while an Indian is able to fly on average once in every 10 years. Since people are unable to fly our airlines rack up huge losses. Not content with destroying the economy our most revered Finance Minister has warned suspected service tax evaders of severe reprisals. That is why no one knows how much black money is floating around.

The grassy knoll definitely exists.

In an article titled " The love for conspiracy theories " one Sandipan Deb ridicules the tendency for human beings to look for conspiracies where none exist. He lists the AIDS epidemic, the shooting of President Kennedy, the death of Subhash Chandra Bose and 9/11 attacks where people have not believed the official explanations and concocted wild theories to explain the events. The official explanation for AIDS is that it emerged in Africa when the Simian Immunodeficiency Virus mutated to infect humans who handled blood of monkeys while eating them as bushmeat. But why now and why in Africa? SIV must have existed for centuries but has not infected humans thus far and Chinese are known to eat raw monkey brain without getting infected. The index case was a homosexual man in California. As for Kennedy, Marina Oswald, the wife of Lee Harvey, has broken her silence to claim that her husband was innocent of the crime. People who claimed that Princess Diana was murdered were ridiculed until recently when a man referred to as Soldier N has claimed that the SAS in Britain arranged the accident by blinding the driver of the car, Henri Paul by shining a laser in his eyes. The soldier's wife, Mrs N has been warned by the SAS that she could be killed. Knowing how snobbish the British aristocracy is, is it at all conceivable that they would have been pleased with the mother of the future king married to a Muslim Egyptian? Can anyone imagine Diana attending Prince Williams marriage and coronation in a burqa? The death of Syama Prasad Mukherjee, the founder of the Bharatiya Jana Sangh, in custody is suspicious enough but the sudden death of Lal Bahadur Shastri on the night he signed the Tashkent agreement, reversing all the gains that the Indian armed forces had made against Pakistan, is surely too much of a coincidence. Was there an autopsy? If not, why not? It is true that people, not just in India, but in every country in the world have developed an almost total distrust in politicians and it maybe satisfying to claim inside knowledge of an event but the recent disclosure of how the NSA in the US and the GCHQ in Britain have been bugging countries and world leaders leads to a feeling of us against them. We are told that if we have nothing to hide then why worry so we can ask if they do not intend anything nasty why spy on us. Whether Mr Deb likes it or not the " grassy knoll " does exist.

The last straw.

Everybody knows that the economy is on life support, with the S&P threatening a credit downgrade to junk status but India seems to avoid a crisis like that in Iceland, Greece or Ireland whose economies went into severe recession when their banks nearly collapsed under bad loans. The state run banks in India are sagging under Non Performing Assets, as bad loans are called, but they are trusted by the people who know that the government will never allow these banks to fail by recapitalising them with borrowed money. The RBI raises money for government spending by selling bonds. Banks are required to invest 23% of their funds in these bonds which is known as the Statutory Liquidity Ratio. Since the credit rating is suspect, yields on these bonds have risen to 9%. In Europe countries had to be rescued when yields on their bonds rose to 7% but our government borrows money invested in term deposits by citizens in banks controlled by itself. However, this profligacy has consequences. Easy borrowing leads to wasteful expenditure, raises borrowing costs for everyone else, such as businesses, and leads to high fiscal deficit. To adjust for its high borrowing the government allows inflation to rise, which reduces its debt in real terms, but causes enormous suffering for the people which the politicians seek to mitigate through various subsidies in an attempt to get votes, thus making the deficit worse. Any government gets its revenues through taxes but in India only 35 million out of a total of 1,200 million people pay income tax, of which about 89% are in the lowest tax bracket. Agricultural income is completely tax free, which is why a large proportion of politicians list their professions as farmers. To augment its revenues the government has levied a cascade of indirect taxes on every product and service, thereby adding to inflation and reducing consumer demand. When taxes are extortionate people will find ways of avoiding taxes which leads to accumulation of black money. Some of the highest taxes are on properties so it is not surprising that more than half the price of any property is paid in cash, which is the reason why property prices do not fall as in other countries. So far India has averted a crisis like that in Argentina and East Asia but it is a matter of time. Maybe the tapering of QE3 in the US will be the straw that breaks the camels back. We have been lucky so far but will that last?  

We Indians hate the T word.

A sudden deluge of good news on the economy. Helped by a weak rupee exports jumped 13.5% in October while imports, which have become more expensive, dropped by 14.5%. Consequently, the trade deficit fell to $10.55 billion compared to $20.20 billion in the same month last year. " We are confident of meeting the official export target of $325 billion ( for the fiscal year ), and if the trend continues we may even hope for a higher number," said Commerce Secretary, SR Rao. We will not spoil the momentary glow by remembering that China exports the same amount every month. The trade deficit was $90.68 billion in the first 7 months of this financial year which is $22 billion less than $112 billion last year. Our most revered Finance Minister proudly proclaimed that the Current Account Deficit will be $60 billion, which is less than the estimated $70 billion and much less than last year's $88.2 billion, quite forgetting that he is solely responsible for the dire state of the economy in the first place. Increased taxes have effectively reduced gold imports by 80%, from $6.85 billion last year to $1.37 billion this October. Total gold and silver imports are down by 12.8%, from $28.10 billion to $24.50 billion. Industrial production has grown by 2% in September compared to 0.6% in August and exports of agricultural produce, textiles, leather , handicraft and engineering have all increased. Why then has the stock market index, the Sensex dropped by 1000 points in the last few days while the rupee is down from around 61 to the dollar to 63.72 this morning, despite RBI support. That is because the Consumer Price Inflation was 10.09% in October, up from 9.84% in September while food prices increased by 12.56% in October compared to 11.44% in September. The consequences of wild inflation are 1. people will curtail non-essential spending on travel, eating out and buying cars 2. the rupee will fall in value as it buys less, which, in turn, will increase prices further and 3. the RBI will keep interest rates high which increases the borrowing costs of government and industries, hitting growth. But the proverbial bull in the china shop are figures from the US. In October 204,000 jobs were created in the US while the economy grew faster than forecast at 2.8% in the third quarter. This may signal the end of the bond buying program or the dreaded " tapering ". We are so terrified of the T word.

A highway of corruption.

The Indian government cheats the people in numerous inventive ways. There is the alphabet soup of scams - 2G, Coalgate, CWG, Adarsh, mining and many that have not been discovered as yet. One of the biggest scams is to call a narrow, broken and dangerous track a " National Highway ", give it a number and charge toll on it. Not just once but every 30 or so kilometers. Some stretches on these roads have been widened and resurfaced but alternate with long segments of broken surface or where work is still going on. Most of these so called highways have just 4 lanes, have very poor signs and not one has facilities for emergencies such as break downs or accidents. Truck drivers blatantly drive the wrong way to save on diesel, villagers drive tractors overladen with produce, blocking both lanes, and cows meander across at will. Our ministers who frequently travel abroad on fictitious business on taxpayer money are either blind or choose not to see that ordinary roads in other countries are better than our National Highways. Why? Because road building is financed by the most corrupt method, called PPP or Public Private Partnership which is a partnership between politicians, civil servants and private companies to loot the public. The government asks for tenders to improve a particular stretch of road. Companies favored by the scoundrels are awarded contracts by quoting ridiculously low rates. Once contracts have been signed these companies then ask for the price to be revised upwards and start charging high rates of toll even as the work is going on, causing huge traffic jams. Once the scams became public private fellows have virtually stopped applying for projects. In 2012-13 the ministry could award just 1322 kms of road building projects as opposed to a target of 9500 kms. This year's target has been lowered from 7500 kms at the start of the year to a pathetic 2128 kms. To protect their hides the crooks blame each other resulting in Rs 170 billion worth of litigation. To resolve the mess the Congress is setting up a regulator. Will it help us, the citizens? No. The ministry will just ignore any advise from the regulator that does not facilitate bribes. Where the government is a thief then private fellows will join the party. The toll operator in Gurgaon is apparently cheating the government by under-reporting the numbers of cars passing through. If one thief cheats another does it balance the budget?

Why do we Indians suffer from inferiority complex.

We Indians are known for our lack of humor but what is worse is that we have no pride in ourselves. We do not know if it is because we despise our politicians, because we are ashamed of how filthy our country is, because our education system does not stimulate our minds or because we hate ourselves for resorting to corruption in our struggle to survive against a hostile state. Our space research organisation, ISRO is attempting to send a probe, called Mangalyaan to Mars at a cost of Rs 4.5 billion. The carping against it has been as vicious as it has been ignorant. There are those who say that such a lot of money would be better spent on giving stuff to the poor. Is it such a lot of money anyway? The distance of Mars from earth  varies from 401 million km to a mere 54 million km, the average being 225 million km. In September, 2014 when it is supposed to reach Mars it will probably have traveled around 92 million km. If we consider that Jet Airways lost Rs 9.99 billion in the 3 months to 30th September flying on earth which has a diameter of just 12,742 km then the cost of the project seems almost negligible. Then there are those who say that we are wasting time and money on duplicating what others have already done. By that logic all of education is a colossal waste of time and money. How many generations of children have learnt the same tables in maths, the same alphabets and the same nursery rhymes? First, the US may share its data or photos sent back by the Curiosity Rover but is unlikely to share the technical details of the mission which must have cost billions of dollars. They will see if the knowledge can be used by their defence industries or can be commercially exploited. After all, the " terminator technology " employed in genetically modified foods was invented by the US defence department and passed on to Monsanto. Former ISRO Chief and Planning Commission member, K Kasturirangan said," We cannot overlook this aspect in a modern competitive world where everybody is zealously guarding his or her own capabilities and trying to create either a commercial advantage out of that or be militarily stronger by having that kind of extra capability." If this mission is a success we could perhaps earn vast sums by teaching others how to get to Mars so cheaply. Think of how many poor could be helped with that kind of money? 

Creative accounting will not protect against junk status.

Prof Nouriel Roubini is known as " Dr Doom " for his prediction of the collapse of the housing bubble in the US, also known as the sub-prime crisis, and the deep recession it would cause. He says that the loose monetary policies adopted by central banks to resume growth and reduce unemployment are already forming bubbles in various countries. Stock markets have recovered more than 100% since the lows of 2009 and high-yield junk bonds are back. Real estate prices are rising in Switzerland, Sweden and Canada as well as in China, Hong Kong and Brazil. This is because excess money supply is forcing funds to invest in risky stock markets of emerging economies to increase returns while zero interest rates are tempting people to buy ever more expensive properties, expecting prices to rise even higher . In India the Sensex scaled record highs of 21,321 before profit taking brought it down to 20,666 and property prices have risen 1000% since 2002. Low interest rates and black money is preventing a correction in property prices which is resulting in double digit retail inflation. Leading into next year's general elections the government is locked into a high spending mode but is committed to cutting the fiscal deficit at the same time. The only option was to increase revenues which led to savage rise in taxes on every kind of goods and services. The double whammy of taxes and inflation led to a fall in consumption leading to a fall in revenue growth. Government expenditure in the first half of the current financial year was Rs 8.09 trillion against a full-year target of Rs 16.65 trillion but revenue receipts have been only Rs 3.89 trillion compared to a target of Rs 10.56 trillion. To stimulate growth the government needs to invest in useful spending, such as infrastructure, but is committed to totally useless social spending to bribe the " vote bank ". The Food Security Bill has increased subsidy by 10% while the fertiliser ministry has asked for an increase of 50% in subsidy. To keep the fiscal deficit within control the government will " rollover " $15 billion deficit to next year's budget. " Whatever we need to do, we will do. But the fiscal deficit target will be met," said one Finance Ministry official. India's accounting method " never gives you the real picture of your finances," said Devendra Kumar Pant, Chief Economist at India Ratings and Research. Creative accounting, isn't that what Ramalinga Raju is accused of?

The CBI itself is illegal, say judges.

In April of this year Mr Ranjit Sinha, Director of the Central Bureau of Investigation admitted in the Supreme Court that it is merely an arm of the government. He was being coy. What he meant was that the CBI is an arm of the government because it is the extortion arm of the Congress which happens to control the present government. This gives the Congress so much power that even when the BJP was in power for 6 years it did not dare to resolve the Bofors case even though there is clear proof that Quattrocchi had taken bribes. Nor did the BJP dare to get justice for the victims of Mr Sajjan Kumar who is alleged to have incited a mob to kill Sikhs after the shooting of Indira Gandhi in 1984. Seems that its uselessness has caught up with the CBI. Couple of days back a 2 judge bench of the Guwahati High Court opined that the CBI is not a police force in legal terms and does not have the power to either investigate or arrest suspects. The CBI was born on 1 April, 1963 by the Ministry of Home Affairs under the Delhi Special Police Establishment Act 1946. The court also said that the DSPE Act applied only to Union Territories, such as Chandigarh and Pudicherry and presumably also to Delhi. This means that all the crooks implicated in the numerous scams under the aegis of the Congress, such as the 2G scam, the Coalgate scam, which were being investigated by the CBI, are claiming immunity with joyous smiles. " This apart, it is the state legislature, which is entitled to constitute a ' police force ' for the purpose of conducting ' investigation ' into crime," the judges said. What the judges probably mean is that forces such as the Central Reserve Police, Border Security Force or the Indo Tibetan Border Police are actually paramilitary forces under the central government but any police force charged with investigating crime and arresting citizens is to be constituted by the respective state government. There is thus no concept of a Federal Bureau of Investigation as in the United States. If the CBI was constituted under the DSPE Act then its role should be limited to Delhi and in areas under the jurisdiction of the central government. No doubt this judgement will be challenged in the Supreme Court by the Congress, especially since its power to harass opponents will be severely weakened without the CBI. Down boy.

How do you shut up foreigners?

We know that the Congress would like to ban free speech and thinks that any Indian indulging in free speech is guilty of sedition but how can you ban these pesky foreigners, especially when you are begging for their precious dollars to rescue an economy that is near bankruptcy because of your treacherous policies. The credit rating agency, S&P has maintained India's rating at BBB-/A3 for now but thinks that there is chance of a downgrade to junk status after the general elections in May. Clearly S&P does not want to be seen as interfering with elections by downgrading our credit rating now but has issued a clear warning," We have noted a marked slowdown in India's real growth. This complicates the government's debt dynamics and ability to implement reform." What it means is that with growth slowing down tax collections will not be able to meet the social schemes Congress started to bribe voters and hence a future government will not have the money to lower taxes to stimulate demand or spend on improving our stone-age infrastructure without which we will remain poor. " The next government, regardless of composition, will face several challenges," says the S&P report. This means that the next government will not be able to reduce the fiscal deficit or inflation, which will cause the rupee to fall and lead to a credit downgrade. The Congress has not reacted to the S&P report nor to Jim Rogers, Chairman of Roger Holdings when he said in an interview," I am not very optimistic about India. It is a wonderful country but has not been managed very well for decades." However, the Congress has reacted ferociously to a report from Goldman Sachs which mentions the word the Congress is fiercely allergic to. The word is " Modi ". In a report titled " Modi-fying our view: raise India to Marketweight " Goldman Sachs says that since BJP is seen as market friendly and Modi is predicted to become the next Prime Minister it is raising India's stock market to buy. Our most revered Commerce and Industry Minister, Anand Sharma said," I think banks such as Goldman Sachs should stay focused only on doing what they claim to specialise in." Er, but that is exactly what Goldman Sachs is doing. It is advising its investors. If only the Congress could accuse the bank of sedition and lock it up. Dang.

Self interest only serves a few people.

To win elections in 2009 the Congress resorted to bribing its " vote bank " through various cunning schemes, dressed up as economic stimulus to mitigate the negative effects of the sub-prime crisis on the economy. Sadly, bribery is a crime whether practised by an individual or by the government. Thus the Sixth Pay Commission, which increased salaries of useless civil servants by 80%, was supposed to increase sales of companies by increasing demand. However, it also increased the bribe price of these fellows and helped to increase fiscal deficit to 4.8%. The MNREGA scheme was supposed to increase rural purchasing power but resulted in a rural wage inflation leading to food inflation at 18%, causing even more hardship for the poor, and the waiver of loans to farmers has caused bank NPAs to rise. For the elections in 2014 the Congress is banking on the Food Security Bill which will provide rice at Rs 3 a kg and wheat at Rs 2 a kg to 75% of rural and 50% of urban population. The hype is that by spending less on food the poor will have more money to spend on other essentials thus helping the poor will lead to increased growth of the economy. To make this a success the government has built up stocks of food grains more than double of what is required. India does not have enough capacity to store so much grain so, a lot of it is lying out in the open, being eaten by vermin or rotting in the rain. Since the government pays a Minimum Support Price, which his higher than the market price, farmers will naturally divert land to growing grains rather than vegetables which have very short shelf lives. As everyone knows the price of vegetables has risen to unaffordable levels. Not just that it seems that such massive subsidies on food may fall foul of the WTO. The Doha round of trade talks have been stalled since 2001, mainly because rich countries are asking poorer countries to open their markets while providing hundreds of billions of dollars worth of subsidies to their farmers. India was one of a group of countries standing up to bullying by the rich countries but by passing the Food Security Bill India will now be in a defensive position. Western countries could challenge the law at the WTO and obtain permission to levy extra taxes on our exports. Imagine what that would do to our meager exports.