Can't be bashful and all powerful at the same time.

 "Wrapping up his two-day visit to West Bengal, Union Home Minister Amit Shah reiterated his government's commitment to implement the contentious Citizenship Amendment Act (CAA)." "West Bengal goes to poll in the next six months." The CAA aims to give citizenship to non-Muslim illegal immigrants who have fled religious persecution in Afghanistan, Pakistan and Bangladesh. The passage of the Act led to widespread protests all over India, which were brutally suppressed by the police, as usual. "After the systematic targeting of religious minorities, increase in lynching cases, the partisan attitude of the police during communal riots, the use of religious symbols in public discourse and the raising of slogans, 'Jai Shri Ram' and 'Allah-o-Akbar', in Parliament, we have now, for the first time, added a religious test to the procedure of granting citizenship," wrote Faizan Mustafa. "But if Hindus really feel threatened from Muslims and Christians, we must address their concern and not shy away from discussing the possibility of a Hindu Rashtra, Minorities, too, are now fed up with this facade of secularism, with all state institutions tilting toward one religion. Perhaps some kind of Hindu Rashtra can help us bring peace and save the country from the path of self-destruction." "In 1981, Muslims were about 94.96 percent of Kashmir while in 2011, the community's population stands at 96.41 percent," wrote Suhas Ambale. On the other hand, "The proportion of Muslims in the Jammu region has increased substantially from 30.7 percent in 2001 to 33.5 percent in 2011". The Census in 1961 revealed the proportion of Muslims in Jammu and Kashmir at 68.31%, with Hindus at 28.45%, while the 2011 Census showed that the Muslim population is still at 68.31% of total population with Hindus at 28.43%, wrote Zeeshan Shaikh. "Liberty, equality and fraternity have been the watchwords of democracy, since the French Revolution. In India, fraternity has been trampled into the mud by rioters and lynch mobs, Equality has been given a formal farewell with the Citizenship Amendment Act that diminishes the quality of Muslim citizenship. If anyone thought that liberty could not survive on its own, they should suppress the urge to cry wolf," wrote TK Arun. "I think this regime is the ripening of things which have been happening for 40 years," said Arun Shourie. "It is progressive decay over time of all institutions, starting with Parliament, the legislatures, judiciary and the media." Mrs Indira Gandhi had a sense of shame, but "That is missing in the rulers of today." CAA is just a diversion. Power is total.            

What if governments are more responsible?

 "The euro zone's economic recovery stalled last month as a second wave of coronavirus cases and restrictions imposed to try and contain it whacked activity in the bloc's service industry, pointing to a double-dip recession." reported Reuters. "Alongside their peers, Germany and France  -- the 19-country bloc's two biggest economies -- have imposed tough lockdown measures." "On paper the European economy is snapping back smartly from the pandemic, growing more in the third quarter than it ever had, "wrote Jack Ewing. "Instead of returning to a semblance of normalcy, governments in the European Union, America's largest trading partner, are straining to find ways to support furloughed and unemployed workers, and to keep restaurants and other businesses from going bankrupt." There are other prices to pay. In Britain, "Up to 50,000 cancer cases have gone undiagnosed during the pandemic," a charity reported. "A further 33,000 cancer sufferers are facing delays in starting treatment because of the pandemic, the report said." After an outbreak of Ebola in Sierra Leone, Liberia and Guinea "people began avoiding healthcare at all costs". "The number of pregnant women seeking help with childbirth was down 80%, vaccination rates plummeted and there were 40% fewer admissions of children with malaria." "While the lockdown approach managed to 'flatten' the curve of new infections, and deaths, in some major Western countries, it failed to exterminate the virus, creating the possibility of a second wave rising from the residue of the first," wrote Prof Vivek Dahejia. It had a devastating effect on economies. "Among major countries, at least democracies, India's situation seems worst of all. Having locked down hard when cases were low, India has reaped a double whirlwind of high infection and mortality rates and of an economy in free fall, having been crippled by its draconian lockdown." Lockdowns are useless, wrote SS Bhalla. "With lockdowns cases were expected to reach their terminal level, perhaps, 10 times higher at 8.8 million? Today, cases are 40 times, and deaths 24 times higher. This has happened during the most intense period of lockdowns and controls around the world. These are not statistics about even partial success; rather indicators of massive failure." "Asia Pacific is set to recover from its worst recession in living memory, the International Monetary Fund (IMF) says. Growth forecasts for the region have been downgraded again, this time from -1.6% to -2.2% this year." So, what are people dying of? The virus or governments?           

Bond traders are easy. What about the economy?

 "The Indian economy is poised to reach pre-pandemic levels by the end of this year based on the trends observed so far, barring the incidence of a second wave that may be triggered by the fatigue with social distancing, the finance ministry said in its monthly economic report for October." A 10% rise in goods and services tax (GST) collection in October, incorporation of 85.283 companies compared to 71,164 in October 2019 and 109% of Long Period Average rainfall give cause for optimism. However, the pre-pandemic growth in GDP was a very feeble 3.1%, lowest in 40 quarters. After hitting a high of 8.3% in 2016-17, the economy grew by 7% in 2017-18, 6.1% in 2018-19, and 4.2% in 2019-20. Worse, nominal gdp growth, which is the basis of tax collection, fell from the budget estimate of 12-12.5% to a revised estimate of 7.2%. Although any growth, even at the anemic pre-pandemic level is welcome, it's not going to be easy. "India has scaled back expenditure, including on productive assets that aid economic growth, as the government is confronted with the risk of its budget deficit blowing out," wrote Vrishti Beniyal. The central government has already decided to increase fiscal deficit by 53%, from Rs 7.8 trillion, estimated in the budget, to Rs 12 trillion. The states had estimated a consolidated deficit of 2.8% of GDP for 2020-21 but this is now expected to rise to at least 4.6% of state GDP. "The pandemic-induced growth contraction and additional spending to support the needy amounting to a little over 2 percent of the economy are likely to push the combined fiscal deficit to 13 percent of GDP this fiscal -- nearly double of the last year, according to a report." Government debt is expected to increase from under 70% to over 80% of GDP, to Rs 75.6 trillion. Higher debt load means higher interest payments so the Reserve Bank (RBI) has been trying to bully the bond market by refusing to accept bids at higher yields for its bond auctions on at least 4 occasions in the last 2 months. "The devolvement at four consecutive auctions led bond traders to conclude that RBI does not want the 10-year bond yield (or interest rate) to cross 6%," wrote Aparna Iyer. The lower the price at which the bonds are sold, the higher will be the yield. Normally, yields on short term papers are lower because risks are easier to anticipate than on longer term bonds. This is the yield curve. The RBI wants to flatten this curve by forcing down yields on 10-year bonds. But, "The spread between the operating rate, which is the reverse repo rate, and the 10-year government security yield is 250 basis points. The spread between 3-year government security and 10-year is 120 basis points," wrote Murthy Nagarajan. Because retail inflation was 7.34% in September due to rising food prices, the exorbitant taxes on fuel are yet to feed through, and even core inflation, which strips out food and fuel prices, is high at 5%. A few limbs of the economy are growing. But, will that spread to the rest?  

Penal laws are never outdated.

 The Emergency during Indira Gandhi's government "was a tragedy in modern India's history" during which the government passed the Foreign Contributions (Regulations) Act or FCRA. Instead of being abolished it "was amended last month and has become more draconian", wrote Gurcharan Das. One amendment "forbids the transfer of a foreign donation to another organisation". The reason maybe that the largest foreign donations are received by Christian evangelical groups which, the government suspects, use the money to convert Hindus to Christians. "Earlier this year, a Chennai-based NGO Caruna Bal Vikas was booked by the CBI (Central Bureau of Investigation). The FIR (First Information Report) claims that the NGO was getting huge finances from abroad to convert people to Christianity," wrote Dilip Mandal. "India's Home Ministry has canceled four Christian organizations' licenses to receive foreign donations without specifying any reason for the move," reported Union of Catholic Asian News. Last month, "Six non-profits and trusts and nine places, including the property of former Delhi Minority Commission chief Zafarul-Islam Khan have been raided by the National Investigation Agency (NIA) in a terror funding case." "A second provision has put a cap of 20% on overhead expenses," wrote Das. "Those NGOs who run research institutions, schools, hospitals and shelters out of foreign funds will now have to prove that most of their employee expenses are non-administrative." Another law, passed by the previous Congress-led government, and being enforced by this one is the General Anti Avoidance Rule (GAAR). In September, an international arbitration tribunal in the Hague ruled that a retrospective tax demand of $2 billion on Vodafone was "in breach of an investment treaty agreement between India and the Netherlands" and awarded costs of $5.47 million against India. "Jaitley as the Finance Minister of Modi-1.0 government on several occasions had stated that the BJP government will not raise any new demand using the retrospective tax legislation and will honor arbitration awards in cases companies had challenged tax demands raised by the previous regime using the controversial retrospective tax legislation." Other laws are also continuing from Emergency. "Under UAPA (Unlawful Activities Prevention Act) and NSA (National Security Act), bail can be denied almost indefinitely. In many cases, the state is not even under any obligation to present a credible case to the court nor frame charges in a time bound manner," wrote Pankaj Butalia. This is nothing however. Indians can be arrested indefinitely under Section 124A of the Indian Penal Code (IPC) enacted by the British in 1870. When the government is not bound by any rule it becomes a police state. No one dare protest.    

Wouldn't it be better if the whole country is competitive?

 "India's factory activity expanded at its fastest pace in over a decade in October as demand and output continue to recover strongly from coronavirus related disruptions, but firms cut more jobs, a private survey showed." "The Nikkei Manufacturing Purchasing Managers' Index INPMI=ECI, compiled by IHS Markit, rose to 58.9 in October from September's 56.8." "But firms cut staff for the seventh month in a row, a streak not witnessed since the survey began in 2005, signaling a quick recovery in the consumer-driven economy may be a distant possibility." A survey conducted by the National Council for Applied Economic Research (NCAER) showed that "Business Confidence Index (BCI) rose to 65.5 in the second quarter after recording a massive drop to 46.4 in the first quarter of the ongoing fiscal". "India's unemployment rate rose in October to 6.98% from 6.67% in September, according to data released by the Centre for Monitoring Indian Economy (CMIE)." "Rural unemployment climbed to 6.9% in October against 5.86% in September," while "urban unemployment was down from 8.45% in September to 7.15% in October". As per the Department of Agriculture, "The government has pegged a record production of foodgrains at 144.52 million tonnes in the ongoing Kharif season". If manufacturing production, business confidence and harvest of cereals is going up why is employment falling? Strange. "When I speak to industry, they clearly say there is a lot of reset in industry from the point of view of running businesses with less than more -- less capital, manpower, effort and certain inputs. Industry is realising competitiveness is a strong message," said Finance Minister Nirmala Sitharaman. It means companies are not thinking of increasing capacity, new investment or employing more people. "Half of all work tasks will be handled by machines by 2025 in a shift likely to worsen inequality, a World Economic Forum report has forecast." "The pandemic has pushed many slum families into persistent poverty," wrote Prof A Krishna and E Rains. "Having exhausted their savings, piled on debt at ever-higher interest rates, and mortgaged or sold their meager assets, slum families are finding it hard to cope." Instead of providing relief to citizens the government is thinking of increasing taxes on fuel which will increase cost of personal transport and all goods transported by road. Petrol prices are around $2 per gallon in the US, which works out to around Rs 48 per liter whereas prices are over Rs 80 per liter in India already. If the country is not competitive, companies have to be. Which means fewer jobs.         

When you have a willing stooge.

 "Two reports released independently of each other last week" reveal problems "which if unaddressed will not only risk reversing the gains achieved in poverty alleviation, but also fundamentally skew the dynamics of inequality -- which in turn risks overturning prevailing social equilibrium with potentially catastrophic consequences", wrote Anil Padmanabhan. "One, only a little under one-third of India's schoolchildren are accessing education online", and two, "the vexing issue of gender inequality". "How do the rich survive in a country that is vastly poor?" asked Manu Joseph. Because, he reasons, "the poor seem to hate each other as much or even more than they do the upper classes". As stock markets have soared in most countries the number of billionaires have gone up. It is no different in India, as the share market made a V-shaped recovery from 25,900 levels in March to 40159 today. The explanation given is that markets are pricing in a strong recovery and higher profits for our companies in the near future. "The market capitalization of all listed companies in India hit a record Rs 161 trillion ($2.11 trillion) on Thursday, as the rebound in several macro indicators and earnings optimism fired up stocks," wrote Sultana and Sonavane. "A surge in global liquidity, balance sheet expansion by central banks and stimulus measures by governments have contributed to the overall rally in India equities for the past few months," said Prasanna Pathak." But, whereas the US is considering another stimulus taking the total to 30% of GDP and Japan has already provided stimulus worth 40% of GDP, India, by contrast, has provided just 2% fiscal stimulus, wrote AS Aiyar. Because, "Most likely, the PMO (Prime Minister's Office) fears that a fiscal spending spree will send inflation soaring to 9%, the level at which voters have historically rebelled against the ruling party." The Reserve Bank (RBI), on the other hand, has been most active. It has been using all means to force the bond market to reduce yields on 10-year bonds to below 6%, wrote Aparna Iyer. Yields are down to 5.88% in the secondary market. It has also infused enormous liquidity. "The liquidity surplus is in excess of Rs 5 trillion" due to bond buying and  by buying dollars by the RBI which increases an equivalent amount of rupees into the system. "Millions of households are staring at negative returns from their savings with inflation peaking at more than 7% in September," wrote Shayan Ghosh. This is severe financial repression on the hapless people of India. Slashing returns from savings along with using high inflation to reduce government debt by a subservient RBI is a violent assault on the people. We are used to it. Still hurts.          

If the future is starved.

 "The digital pivot in India's schooling system risks pushing it into deeper inequality, seven months after schools shut down across the country to tackle the pandemic. A majority of children without access to internet has been thrown into distress -- a handful to the point of self-harm, as several reports in this newspaper attest -- by an exclusionary method of learning," wrote an editorial in The Indian Express. A telephone survey of over 60,000 children in rural India by the Annual Status of Education Report (ASER) found that, "Only about one-third of the surveyed children had access to online learning; only about 11 percent had access to live online classes." "The coronavirus pandemic is forcing India's children out of school and into farms and factories to work, worsening a child labor problem that was already one of the most dire in the world," wrote Shwetha Sunil. "A 2018 study by DHL International GmBH estimated that more than 56 million children were out of school in India -- more than double the combined number across Bangladesh, Indonesia, Malaysia, Philippines, Thailand and Vietnam." Profs Kingdon and Panagariya wrote that although "the National Education Policy (NEP) 2020 has outlined a new road map to overhaul India's education system", "The heart of the problem in school education, however, is the extremely poor delivery of outcomes by public school teachers." "Unsurprisingly, even parents with limited means are progressively moving their children out of public schools to low-fee budget private schools." To camouflage poor teaching Board exams have been made so easy that this year colleges in Delhi were demanding 100% marks in the chosen subject for admission. "While such political gimmickry may generate a feel-good factor and confer some short-term electoral advantage, it brazenly treats the school examination system as a political football," wrote Kingdon. All children need nutrition, healthcare, education, shelter and, above all, security to thrive.    When schools were shut down because of the lockdown in March, "Millions of children were deprived of the midday meal they used to receive at school and many people lost their jobs," wrote Jessie Yeung. Child traffickers took advantage. "Between April and September, 1,127 children suspected of being trafficked were rescued across India and 86 alleged traffickers were arrested, according Bachpan Bachao Andolan. The government is required by law to provide food at token prices to those Below Poverty Line, but, more than 100 million people are apparently being left out, according to Prof Jean Dreze. Healthcare is almost non-existent. "Afghanistan and India set aside the same share for health in their budgets, 4%, just above a quarter of the recommended spending and one-third of the second poorest country in the world, Burundi, did." Children are the future. Hungry children means a starving future.

India experimented with half MMT. Didn't work.

 "The idea that a government that can freely print and spend its own currency shouldn't deny anyone a job is gaining currency in our pandemic-ravaged world," wrote Andy Mukherjee. This is known as Modern Monetary Theory (MMT) which postulates that "any government spending can be paid for by creation of money, with the purpose of taxes being to limit inflation, by controlling the money supply". The only limit to government spending is the availability of "real resources, like workers, construction supplies etc", and when money supply exceeds available resources it will result in inflation. Taxes will not be used to finance government spending but only to drain excessive cash out of the system in case of inflation. "Monetisation of (fiscal) deficit was in practice in India, whereby the central bank automatically monetised government deficit through the issuance of ad hoc treasury bills," wrote Deepthi Mary Mathew. According to the FRBM Act of 2003, the Reserve Bank (RBI) "was completely barred from subscribing to the primary issuances of the government from April 1, 2006". The Act could have been precipitated by double digit consumer price inflation (CPI) between 1990 and 2000. "Emerging markets have reasons to be wary of MMT." "For instance, New Delhi is finding it tough to explain to people, why, with India's economy expected to shrink in real terms this year, it's hesitant to boldly expand its budget deficit." "Experts across the ideological divide thus agree on the need for India to create jobs and output growth. Without these, high government deficit or even credit growth could lead to inflation and currency instability," wrote Prof Anant Narayan. Do fictitious job creation schemes like MGNREGA increase productivity or national wealth? Problem is that no government in India will dare to eliminate income tax which is seen as a means to reduce inequality. 'The maximum marginal tax rate that an individual taxpayer has to pay in India is 42.744 percent. This includes a basic tax rate of 30 percent plus Surcharge of 37 percent plus education cess of 4 percent." Retail inflation soared to an 8-month high of 7.34% in September. In its last Monetary Policy Committee (MPC) meeting, the RBI kept interest rate at 4%, which means that the real interest rate is close to minus 4%, according to Prof Raghuram Rajan. High taxes with loss of value of savings is hitting the middle class out of existence. "Half of all work tasks will be handled by machines by 2025 in a shift likely worsen inequality, a World Economic Forum has forecast." How can any government hand out cash to half its workforce? Cash will become confetti.      

No game of thrones in India.

 "As the Thai queen's yellow Rolls Royce slowly made its way past a few dozen protesters calling for the resignation of the prime minister in the early evening of 14 October, the unthinkable happened. Even though they were hemmed in by security forces, several raised the three finger salute, which has been adopted by student protesters from the film The Hunger Games in demonstration after demonstration in Bangkok since August. Many shouted 'Our Taxes' as Queen Suthida's motorcade went by," wrote Rahul Jacob. The three finger salute "first emerged in 2014 to signal defiance against a military regime which seized power in a coup, suspending democracy and curtailing free expression". Protests have been led by college and school students. "Some students also wore white ribbons to show their support for protesters, who seek (Prime Minister) Prayuth's departure, a new constitution and an end to the harassment of activists. Some students have also called for a reforms to the monarchy, once a taboo subject." A report in the Financial Times "estimated that the Thai king was one of the wealthiest monarchs in the world with a net worth in excess of $40 billion". Thai activists have a way of disappearing. "As the respected political scientist Chris Baker recently observed, Thai dissidents are sometimes found 'weighed down by concrete in the Mekong river' even while in exile in Cambodia and Laos." Previous Prime Minister Thaksin Shinawatra was ousted in an army coup in 2006 and lives in self-imposed exile in Dubai. Thaksin's youngest sister Yingluck was elected prime minister in 2011 but also had to flee overseas after she was charged with corruption. "King Vajiralongkorn is an anomaly; he is an Asian strongman, but akin to an absentee landlord. He spends most of the year in Germany in picturesque Bavaria," with a "harem of 20 concubines who had taken over an entire hotel in Bavaria". "The king is alleged to possess 38 aircraft, including 4 Boeings and three Airbuses." But the army overplayed its hand. "Despite gaining huge support among Bangkok's young, Future Forward Party, led by a handsome 41-year-old Thai tycoon, Thanathorn Juangroongruankit, was disbanded in February after a constitutional court ruled the party and the founder were guilty of technicalities." In Thailand the army and the monarchy protect each other. In Pakistan there is no monarchy so the army uses India as the bogyman to frighten people. "In Pakistan's latest episode of Game of Thrones, India remains the favorite bogey and whipping boy for all sides," wrote Sushant Sareen. India's throne is solid. It's the one playing game with us.      

The bigger the pot, the more there is to go around.

 "The business of mobile phone assembly is a rare Make-in-India success story. India had two mobile manufacturing units in 2014. By 2019, there were over 200. The number of mobile handsets produced shot up from 60 to 290 million in the same period; the value of handsets produced jumped 10 times to $390 billion," Impressive. But, "China exported phones worth over $100 billion in 2019; Vietnam over $35 billion. India exported less than $3 billion in 2018-19." Export is a must as India itself is a small market. "Our per capita income is about $2000 as compared to China's $10,000 or Korea's $32,000," said Hari Om Rai of Lava. "Macroeconomists and politicians in general have invested too much in the idea of GDP growth without considering its quality," wrote R Jagannathan. "The fact is that growth does not significantly improve underlying economic strength, as it can be driven by any factor of production, and post-2000, it has been driven mostly by automation." The government gets "no pats on the back for the long-term investments made in improving social indicators -- toilets, electricity connections, pucca homes, financial inclusion, and piped water for all households". "GDP is an important measurement for economists and investors because it is a representation of economic production and growth." "The government's ambitious Swachh Bharat Mission has resulted in annual benefits to the tune of more than Rs 53,000 (727 US dollars) per household in rural India, including through reduced diarrhea incidence and from sanitation access time savings, according to an international study." "Slum residents have been hit hard by the pandemic, arguably harder than people in similar circumstances in rural areas. Having exhausted their savings, piled on debt at ever-higher interest rates, and mortgaged or sold their meager assets, slum families find it hard to cope," wrote Prof A Krishna and Emily Rains. In Mumbai, "An army of women and men, from domestic workers to store-clerks, staff of small manufacturing and service units to delivery staff and drivers, has been without their fixed income for seven months. Their salaries were too meager for a savings cushion which is now frayed, if not gone." How to help the millions of poor without growing the economy? Finance Minister Nirmala Sitharaman recently said that India has to shed its "socialist baggage" from Nehru's days. India has a plethora of social schemes to help the poor, so what does the minister want to shed? And, why? Because, fiscal deficit in the first half of the financial year has reached Rs 9.1 trillion, when it was projected to be below Rs 8 trillion in this year's budget. To help pay for the poor the government needs money. And that can only come from growth. Distribution of poverty does not help the poor.    

What to do when the problem is so powerful?

 "Chinese aggression has made it impossible for New Delhi to continue with its usual 'engagement where possible' refrain, because there are hardly any areas where engagement seems possible between the two Asian neighbors," wrote Prof Harsh V Pant. "But one aspect which remains unchanged is the Indian strategic establishment's aversion to the term alliance." "But to preclude the possibility altogether just because some confusing notion of 'strategic autonomy' hobbles our thinking is downright dangerous. If not idiotic." The Quadrilateral Security Dialogue, or the Quad, is a group comprised of the US, Japan, Australia and India which could act as a buffer against Chinese hegemony in Asia. "If Quad succeeds, it will signal the end of the post-Cold war era and the beginning of a new multipolar security architecture in Asia, and, gradually the world," wrote Indrani Bagchi. "The world's eyes are rightly on India, because whither goes India, will go the Quad, the Indo-Pacific and global rebalancing." "China is pumping in a huge amount of financial resources in Nepal, helping the landlocked country in laying new roads including connecting it to Chinese cities for transportation of petroleum and other essential products." "The power gap between China and India was large but it was shrinking. What has happened since 2007-08? That gap is no longer shrinking, it is actually expanding," wrote Shyam Saran. "In relation to China, a fundamental policy flaw over the last six decades-plus has been the make-believe frame of reference that the Indian political apex has chosen to inhabit," wrote C Uday Bhaskar. "The reality of China's intent in relation to India has tested the perspicacity of India's higher gene-pool to make an objective and effective assessment of the Xi gameplan and arrive at policy options that are viable and sustainable in the long run," "Actually the time has come for the two sides to settle their dispute, or, settle down on mutually acceptable LAC," wrote Manoj Joshi. "Xi bears the main responsibility here, having roiled the situation in the first place." The reason for the cowardly ambush of Indian soldiers at Galwan in Ladakh, resulting in the death of 20 soldiers, was that, "China wanted to teach India a lesson for the setback in Doklam and divert domestic attention from the shaking popularity of the CCP (Chinese Communist Party) and Xi Jinping," said Maj Gen M Vinaya Chandran in an interview. "In the current situation Xi is worried about what India will do and he is psychologically preparing the PLA (People's Liberation Army) and the Chinese public, to avoid a loss of face." "The pathology of global hegemony and dominance always reveals two underlying maladies: hubris and insecurity," wrote Prof V Anantha Nageswaran about China's aggression. "They seal the fate of empires and hegemons." Amen to that. 

Perhaps, men are no better off than women.

 "The Indian economy may contract or stagnate this fiscal but it will bounce back to be among the fastest growing in the world next year, Finance Minister Nirmala Sitharaman said." The minister is a woman. Can she promise a similar growth rate for women in India? "Women's share in new payroll additions fell below the 20% mark in August, part of a gradual decline in female participation in formal work over the past few months, according to government data. The latest monthly data showed a sharp decline from 2019-20 when women's participation in formal work was almost 23%." "According to data payroll collected from the Employees' Provident Fund Organisation (EPFO), 669,914 people joined the formal workforce in August, and only 133,872 of them, or just 19.98%, were females -- down marginally from 20.49% in July and 21.11% in  June." Shameful figures. While female labor force participation rate (LFPR) has increased to 36% in neighboring Bangladesh it has fallen to 20% in India, according to the World Bank. Hence, "The IMF sees India's per capita GDP (in dollar terms at current prices) falling to $1,877 in 2020 a decline of 10.3 percent. For Bangladesh, the corresponding figure is seen growing to $1,888, a rise of 4 percent." "While why this has happened remains a matter of debate, its implied loss was quantified by a McKinsey Global Institute report in 2018, which said that India would gain $770 billion in output by 2025 if women had the same opportunities to work as men," wrote an editorial in the Mint. Women have to do a lot of unpaid work, such as housework, looking after children, looking after old parents. In Australia women do 5 hrs, 11 minutes of unpaid work to 2 hrs, 11 minutes for men, while in India women do 5 hrs, 52 minutes of unpaid work to just 52 minutes for men. "According to Unicef, 650 million women alive today were married before they turned 18. India is home to 223 million or one in three of these child brides," wrote Prof Shruti Rajagopalan. "India has one of the highest levels of female feticide, where female fetuses are aborted through sex selection technology." Last month, a low caste (Dalit) woman was gang-raped and battered in Hathras in Uttar Pradesh (UP), and died after 2 weeks. "But neither of the young woman's two allegations of rape, made within hours of being attacked, were entered into police records," wrote Geeta Pandey. Dalit women in India are the most oppressed of all women in the world, wrote Soutik Biswas. "These women, who comprise about 16% of India's female population, face a 'triple burden' of gender bias, caste discrimination and economic deprivation." However, if women are being oppressed by a patriarchal society, then men in India should be ecstatic. Turns out, "For every 100 suicide deaths, 70.2 were male and 29.8 females, the NCRB, which collects data from police recorded cases, stated." Perhaps, life in India is generally miserable. And misery turns people into beasts. 

Seems to be a lack of funds throughout the system.

 "The Nomura India Business Resumption Index (NIBRI) hit another post-lockdown high of 83.5 for the week ended October 25, signalling a stronger recovery during the month compared to September." "The government's second stimulus aimed at boosting consumption has been touted as insufficient. Experts argue that the Center needs to expand its expenditure, so as to cushion demand in the economy, rather than focusing solely on supply," wrote Karan Bhasin. "The latest round of stimulus measures announced by the government will have minimal impact on growth and highlight India's limited budgetary firepower, which proved to be credit negative, according to global rating agency Moody's." Stimulus should be targeted towards the poor, wrote SA Aiyar. "Meanwhile, the government should greatly increase cash handouts to the masses through MNREGA and Jan Dhan Accounts. The poor are worst-hit and most likely to spend additional cash, boosting the economy. Richer folk are more cautious and less likely to spend." However, "Consumption, the pillar that normally accounts for over 60% of GDP, is majorly reliant on spending by middle class consumers, both urban and rural." "The past few months under the pandemic's shadow have made for a multiple whammy kind of situation for the Indian middle class." "The economy had already been weakened by years of mismanagement before this crisis struck." The GDP has been falling year on year to 4.4% last year. Why? "Investment shrank by almost 3% over the year. This is despite increase in government spending by 12% last year, more than twice the growth rate of private consumption". Social safety nets have normally been targeted at the rural poor, wrote Desai, Deshmukh and Pramanik. But "the lockdown has disproportionately affected urban workers, particularly wage workers who had few assets to begin with". Absent government spending, the Reserve Bank (RBI) has stepped into the breach. "The Reserve Bank has been more accommodative than many central banks in the world according to former RBI governor Raghuram Rajan. Rajan explained that given the surplus liquidity in the system the overnight reverse repo rate at which marginal cost of funds are priced is close to 3.25% and the inflation figure has reached 7% which implies a real interest rate being close to negative 4%." This means middle class is losing money on their savings. "The RBI on Thursday completed the first ever open market operation (OMO) purchase of state government bonds worth Rs 10,000 crore (Rs 100 billion) with two states -- Karnataka and Maharashtra -- accounting for half the amount." Is this the first instance of monetising the fiscal deficit? High spending last year has left nothing in government coffers, the middle class is losing jobs as well as savings and the poor had nothing to start with anyway. Can we call it holistic poverty?

How will it affect us?

 The United States presidential election will be held on 3 November, exactly one week from tomorrow. The entire 435 seats in the House of Representatives, which is the lower chamber in the US Congress, is up for election and opinion polls give a comfortable margin of victory to the Democrats. The upper chamber, the Senate, has a total of 100 seats of which 35 are up for election. At present Republicans hold 53 seats to 47 held by Democrats. Opinion polls project 49 seats for Democrats and 47 seats for Republicans with 4 seats up for grabs. If the Democrats can flip those 4 seats they will have a majority in both chambers of the Congress. The presidential election is decided by electoral college votes with each state assigned a number of votes according to population. California has the largest number of 55 electoral college votes followed by Texas with 38, New York State and Florida with 29 each and Illinois and Pennsylvania with 20 each. Democrat Joe Biden seems to have a solid lock on California, New York, Illinois and Pennsylvania. Whoever gets to 270 wins. According to predictions, 290 votes are definite for Biden, between 160-170 for President Donald Trump and the rest are undecided. Therefore, on 20 January 2021, we may expect a clean sweep of Democrat president, Senate and House of Representatives. However, Democrats cannot afford to lower the guard even with overwhelming predictions of victory, wrote Neeraj Kaushal. Even exit polls got the results completely wrong in 2016 when they gave Hillary Clinton a 75-99% chance of victory. On election day, polls were suggesting Clinton victory in key battleground states. However, "This time, pollsters have changed their sampling design to increase the representation of low-educated voters. But there is not much they can do about the undecided voters and non-responders." Republican and former Governor of Arkansas Mike Huckabee said that Trump supporters do not declare themselves for fear of being attacked. A man was shot dead just for wearing a MAGA (make American great again) hat. "From India's point of view, an important question in this election is how the Democrats will deal with China," wrote Seema Sirohi. India is not important for Democrats. Biden was vice-president to Barack Obama who was humiliated by China but still gave in to them. As things stand Biden will probably win. Bad luck for us.

Reform could so easily become deform.

 "The government is left with about 25,000 tonnes of onion stock in its buffer that will get exhausted in the first week of November, cooperative Nafed Managing Director Sanjeev Kumar Chadha said on Friday. Currently, Nafed is offloading onion buffer stock in the market to boost domestic availability and check onion prices which surpassed Rs 75 per kg in some parts of the country in the last few weeks." Also, "To contain prices, the Center on Friday imposed stock holding limit on retail and wholesale traders till December 31 to improve the domestic availability of the commodity and provide relief to consumers." At the same time, "State-owned FCI and state procurement agencies have bought 98.19 lakh (9.819 million) tonnes of paddy till Monday for Rs 18,540 crore (Rs 185.40 billion)." This was done at minimum support price (MSP)  which is at higher than market price, so rice farmers win and onion farmers lose. The government passed three farm bills to "provide greater choice and freedom to farmers to sell their produce and to buyers to buy and store, thereby creating competition in agricultural marketing". "It seems the government has one foot on the accelerator to liberalise agri markets and the other on the brake (ban on onion exports). All this dents its credibility." wrote Prof Ashok Gulati. "MSPs provide 'guaranteed prices' and 'assured market' to farmers, and save them from price fluctuations," wrote Misra and Iqbal. "But although MSPs are announced for around 23 crops, actual procurement happens for very few crops such as wheat and rice." The farm bills are meant to provide "freedom to the farmers from the 'villainous and exploitative' Agricultural Produce Marketing Committee (APMC) mandis", but "The middlemen are a source of information, inputs, and sometimes credit without collateral," wrote Prof Himanshu. Farmers realise that these bills give "freedom to private capital to purchase agricultural produce at cheaper prices", and will shift trade from "regulated APMC mandis to private markets without any commitment to investment in infrastructure and regulation from government". Prime Minister Narendra Modi's farm reforms "could turn out to be the most far-reaching. If they succeed, India could not only feed itself, but become a major food exporter," wrote Prakash and Parija. MSP protection for cereals means that, "Compared to an influential diet for promoting human and planetary health, the diets of average Indians are considered unhealthy -- comprising excess consumption of cereals, but not enough consumption of proteins, fruits and vegetables, said a new study." Cannot be a free market if the government keeps interfering. Stopping that itch would be the greatest reform.       

Can we direct the storm northwards?

 "A high-profile kidnapping of a police chief in Pakistan -- allegedly by official paramilitary troops -- has signaled deepening of the political turmoil in a country bracing for further opposition protests aimed at ousting Prime Minister Imran Khan." The paramilitary troops, known as Rangers raided the house of the inspector general of police in Southern Sindh province to force him to sign an arrest order for an opposition leader Safdar Awan. The Pakistan army has been abducting and killing nationals of Balochistan who oppose its exploitation of Baloch land. Responding to the stink this time, "Pakistan's Army Chief Gen Qamar Javed Bajwa has ordered a inquiry into the kidnapping of the Sindh police chief by paramilitary Rangers Force to compel him to sign orders that had led to the brief arrest of Mohammad Safdar Awan, the son-in-law of exiled prime minister Nawaz Sharif." Because, "addressing a mammoth opposition rally in Gujranwalla on October 16", Nawaz Sharif, speaking by video link from London where he has been hiding, "named the army chief Gen Qamar Bajwa and ISI chief Lt Gen Faiz Hameed and held them responsible for all the ills of the country, for stealing the mandate of the people and foisting an utterly incompetent Imran Khan on the hapless people of Pakistan. He went on to threaten that they will have to answer for their actions." Naturally, Indians were delighted and speculated about impending civil war in Pakistan, much of which was fake. "Four big opposition parties, the Pakistan Muslim League (Nawaz), Pakistan People's Party, the Jamiat Ulema-e-Islam (Fazlur), and the Pakhtunkhwa Milli Awami Party, and some smaller ones, including the Baloch National Party and the Pashtun Tahaffuz Movement, have come together to channelise public discontent at rising prices, power cuts, closure of businesses and other economic misery. Their alliance is called Pakistan Democratic Movement," explained Nirupama Subramanian. Gen Bajwa is indebted to Imran Khan for a three year extension in his post as army chief, which caused a lot of anger among other generals whose promotions were blocked, and so a fall of Imran will weaken Bajwa himself. "If mainstream parties continue to fade, Pakistani politics may well see a three-way tug-of-war between a middle-class populist, an aggressive military establishment and radical Islamists. That is in nobody's interest -- no even the Pakistan Army's," wrote Mihir Sharma. If Islamists take control of Pakistan's nuclear weapons, can India channel their anger towards China which is beating up Pakistan Army soldiers, and Chinese officials are brutally sterilising Muslim Uighur women to reduce their numbers? Get our enemies to fight against each other. Sun Tzu would approve. 

Perhaps, more hope than confidence.

 "The government on Thursday unveiled a new series for the consumer price index for industrial workers (CPI-IW), a measure of inflation used to calculate dearness allowance for government employees, wages for industrial workers and dearness relief for pensioners." "The new index assigns more weight to spending on services such as education, healthcare, housing, travel and transportation", while the weight assigned to food has been brought down from 46.2% to 39%. This is expected to lead to a rise in salaries and dearness allowance (DA) of government employees. At present government employees get DA at the rate of 17% of their basic salary to shield them against rising prices but their is no relief for private citizens as the Reserve Bank (RBI) kept interest rate at 4%, hammering their earnings from savings. "Consumer inflation in the country increased to 7.34 percent in September from 6.69% percent in the previous month" which was blamed on food inflation of 10.68%. "Millions of households are staring at negative returns from their savings", leading to an alarming situation for households that are already facing growing financial insecurity as a result of widespread disruptions caused by the pandemic", wrote Shayan Ghosh. "On Wednesday, the Union Cabinet cleared a Rs 3737-crore (Rs 37.37 billion) bonus for 30.6 lakh (3.06 million) central government employees." No wonder, "The consumer confidence index declined to 49.9 in September, as against 53.8 in July. However, the index has improved from 105.4 to 115.9 on a one-year ahead expectations basis, indicating a recovery in the consumer confidence level over the next twelve months." The present figure is a response to the dire state of the economy but the future should perhaps be called 'consumer hope' instead of 'consumer confidence', because no one is sure what is going to happen, but hope that the epidemic will be controlled, a vaccine will be protective and jobs and earnings will come back. "It is unlikely output will get back to pre-covid levels before the end of the next financial year. That is two lost years, and a permanent output loss of around Rs 350-400 crore (Rs 3.5-4 billion)," wrote Niranjan Rajdhyaksha. However, government stimulus has been more like that of western countries than emerging economies. Maybe, because this government cannot do any more than it is doing already. "The Modi government has been practicing socialism more than preceding Congress-led governments" and "has been hand-holding the economy, nudging, encouraging private sector players to do this, to do that, holding melas not just for investors but also for entrepreneurs, innovators", wrote P Venkateshwar Rao Jr. The result is that the private sector has been reluctant to invest. Government employees should be paid but taxpayers should not be punished with financial repression. It is better to be a government peon than an officer in a private company. Consumers may hope. They are likely to be disappointed.  

Chances of falling on his flat face.

 "Major European countries, including Italy and Sweden, are pushing back against China's attempts at controlling economies and gaining a strategic foothold in the continent." "Italy had been gradually shifting towards China after its previous government joined the BRI infrastructure project in March 2019." BRI is the Belt and Road Initiative, also called One Belt One Road or OBOR, which is a gigantic infrastructure project conjured up by President Xi Jinping, which aims to link China with over 70 countries. However, there are concerns that, as China's economic growth slows, this is mainly being used to create jobs for Chinese labor, dump excess production of steel and cement and to gain control of other nations by trapping them in debt that they cannot repay. Italy tried to show its love for Chinese by hugging them. "In an attempt to curb racism against Chinese and 'Asian looking' the Mayor of Florence in February launched 'hug a Chinese' campaign." This fear of being called racist paralyzed Italian authorities, resulting in a spread of the coronavirus with consequent large number of deaths. "Sweden has banned telecoms equipment from Huawei and Zte 000063.SZ in its 5G network, joining other European nations that have restricted the role of Chinese suppliers on security grounds." In an instant retaliation, "The Chinese foreign ministry warned Sweden that it should revoke its ban on Huawei Technologies to avoid hurting prospects for Swedish companies." A report by the Defense of Democracies says that "China now sees Germany, and with it the rest of Europe, as the key battleground in its path to global supremacy". "China is closing in on the US as the most powerful country influencing the Asia-Pacific, as America's handling of the Covid-19 pandemic tarnishes its reputation, a study showed." "China has taken a sudden turn towards 'gross aggression' against its neighbors, including India, and in the Indo-Pacific, a senior administration official said after the conclusion of the Quad ministerial in Tokyo, wherein the leaders vowed to coordinate in ensuring peace and stability of the strategically vital region." "The challenge for the Indo-Pacific is getting more acute by the day," wrote Prof Harsh V Pant. "But it is India that is the critical anchor in making the idea of Indo-Pacific a viable strategic geography." "No other country has done more than India in making the regional stakeholders believe that there is an alternative to just acquiescing to a China-led Asian order." "China's gross domestic product (GDP) rose 4.9% year-on-year last quarter", but "Too much has depended on state-driven industrial activity, credit-fuelled land sales, and a construction binge." The Chinese have accepted Xi as their emperor, but the rest of the world is refusing. The more force he uses the more will be the resistance. Every chance of falling flat on his face. We hope.        

What if the middle class disappears?

 Pratik Parija wrote about a woman called Nafisa who, along with her husband, "struggled to make even 1 rupee a day from their tailoring business after India went into a Covid-19 lockdown in March". Her 4-month old child died of starvation because she could not produce enough breast milk. "It is an especially cruel tragedy because it happened in a country which boasts about having the world's largest food aid program. Government warehouses brim with more than 70 million metric tons of grain, or almost 15% of global stockpiles, and the nation's wheat and rice harvests have surged to records." "State-owned FCI and state procurement agencies have bought 98.19 lakh (9.819 million) tonnes of paddy till Monday for Rs 18,540 crore (Rs 185.40 billion)." A telephone survey by the National Council of Applied Economic Research (NCAER) showed that employment of men was affected more than that of women, those who were self-employed suffered less, urban areas suffered more than rural areas and "individuals at the bottom of the income pyramid have been affected by job losses far more than the individuals at the top of the income pyramid and this difference is striking in cities", wrote Desai, Deshmukh and Pramanik. "India ranked 94 among 107 countries in the Global Hunger Index (GHI) 2020 and continues to be in the 'serious hunger' category, though it has made some progress, particularly since the enactment of National Food Security Act." However, this hunger cannot blamed entirely on coronavirus induced lockdown. "After a collapse in rural incomes and a de-growth in casual wages -- heightened by the ban on high value currency notes in end 2016 -- a recent National Statistical Office (NSO) survey report leaked by Business Standard showed a significant 9% drop in rural consumption, including on staples, between 2011-12 and 2017-18," wrote Sayantan Bera in December 2019. "The last time a fall in consumption was recorded was half a century ago in the early 1970s." The Indian Human Development Survey of 42,556 households found "22% poverty rate in households with children and 8% poverty rate in households without children", wrote Sana Ali. "Among the urban middle classes, it is no longer unusual to find families stopping at one child, even when this child is a girl," wrote Profs Basu and Desai in a paper in July 2012. India needs to grow the middle-class if it is to become a rich nation. "Consumption, the pillar that normally accounts for over 60% of India's GDP, is majorly reliant on spending by middle class consumers, both urban and rural." Every government in India has seen middle class taxpayers as cash cows to be squeezed into oblivion. With vanishing fertility the middle class may disappear leaving only the poor. Hunger can only grow.  

Didn't work last time. How will it work this time?

 "While India had for some time prided itself on being the world's 'fastest growing economy', it has since fallen far from that pedestal. And the decline began much before Covid hit," "Thus, presenting the 2018-19 Budget, Arun Jaitley announced that he was making a 'calibrated departure' from the policy of the previous two decades of cutting tariffs by enhancing some of them. Since then India has been raising import duties on more and more tariff lines as the philosophy of 'import substitution' -- tried and failed in post-independence years leading up to the 1991 liberalization when India began to integrate with global markets -- made a comeback." Import substitution is part of Prime Minister Narendra Modi's vision of 'Atmanirbhar Bharat', which means 'self-reliant India'.  During a speech on 13 May, "Modi used the word, 'Atmanirbhar' at least 19 times and 'Atmanirbharta' seven times. From 1951, India adopted a policy of Five Year Plans for its economy and, "With each passing plan-period, the country adopted more and more restrictive controls on imports such as higher import duties, massive license-permit raj on who could import what, how much and for what reason," wrote Udit Misra. This led to black marketing of imports, promoted inefficient domestic industries and sale of import quota at higher price. Consumers got shoddy goods at high prices. "Till about 1990, India and China had roughly the same annual Gross Domestic Product (GDP)." China's exports grew from about 1% of global exports in 1980 to 13% in 2018, while India's exports declined from 2.2% of global trade to 1.7% in 2018. "Between 1991 and 2014, average tariffs declined from 125 percent to 13 percent. However, since 2014, there have been tariff increases in 3,200 out of 5,300 product categories, affecting about $300 billion or 70 percent of total imports," wrote Subramanian and Chatterjee. The largest increases have been since 2018 based on the perception that India's growth since 1991 was not related to exports, especially manufacturing exports. Not true. India's overall exports grew by an average of 13.4% annually between 1995 and 2018, manufacturing exports grew by an average of 12.1% annually. "Bangladesh is doing well because it's following the path of previous Asian tigers," wrote Andy Mukherjee. "India, however, has gone the other way, choosing not to produce the things that could absorb its working age population of 1 billion into factory jobs." For economic recovery following the Covid crisis "in India's current circumstances, India does not have the luxury of abandoning export orientation" because "India's market is too small to sustain any serious import substitution strategy or even as a way of offering investors the domestic market as bait and incentivising them to export." Meanwhile, people are cutting their expenditure because of a fear of high prices and job losses. The government thinks that there can be no balance of payments crisis as in 1991 because we have over $551 billion in foreign currency reserves. But foreign exchange markets reached $6.6 trillion per day in April 2019. That's an awfully huge ocean.