Increased spending on fuel will not create jobs.

"While it is true that the economy has been hit hard by the pandemic, the situation is not unique to the country, " Diva Jain. Our fiscal deficit was high at 9.5% in 2020-21 and is pegged at 6.8% of GDP for the current financial year, Economic Times. But this is because of increased government spending to stimulate the economy. Our debt/GDP ratio is higher than in other emerging economies and higher borrowing will add to it, Business Insider. Retail inflation is higher in India than in other Asian countries and, "In 2022, consumer prices will grow at a rate that is around two-and-a-half times more than the rest of Asia's average," Udit Misra. Fuel prices are very high because of taxes. Labour force participation rate, which is the number of people looking for work, was 43% before Covid, while it was 76% in China and 69% in Indonesia. It has dropped to around 40%, unemployment has climbed and close to 22 million jobs have been extinguished by the pandemic. "Unless India's gross domestic product (GDP) posts a surprisingly robust revival, we risk running into a spell of stagflation -- a painful combination of economic stagnancy and high inflation," wrote an editorial in the Mint. "Support for a wobbly economy should not leave us with a wobbly rupee," so the Centre must reduce taxes on fuel. The government is unlikely to cut taxes on fuel said Chief Economic Adviser (CEA) to the Government of India (GOI) because, "If you look at the last 6-7 years, anywhere between 35-60% of contribution to retail inflation comes from food inflation. Weightage  of petrol and diesel in CPI (Consumer Price Index) is less than 3% while weightage of food is about 50%." CPI is calculated in relation to prices in a base year, which is 2012, so if prices were as high last year as they are this year, CPI will show no inflation, moneycontrol. However, prices of fuel are being increased by small increments relentlessly. "After two days of stagnant prices, the rate of petrol has been increased by 31 to 39 paise. On the other hand, diesel prices have been taken up 15-21 paise so far," News18. Prof Krishnamurthy Subramanian has a PhD in Economics, wikipedia, so he knows that petrol and diesel are like blood that carries oxygen and nutrients in our bodies. Rising fuel costs means higher transport costs, and vegetables, being perishable, are mostly transported by trucks to the nearest markets. India transported 8.225 billion passengers and 980 million tonnes of cargo by road annually, as of 2015, and 8.09 billion passengers and 1.20 billion tonnes of freight by rail annually as of 2020, wikipedia. So Prof Subramanian must be dissimulating when he claims that fuel costs will have no bearing on inflation. "If you look into the data, the significant increase in fuel prices is now crowding out expenses on health and also on other items on people's grocery and utility lists in such a manner that their demand has actually significantly weakened," said economist Dr SK Ghosh. "Earlier they were trying to balance fuel and grocery, but now they are spending mostly on fuel, cutting down expenses on grocery." Because demand for other goods has fallen prices are not rising as fast as they should. "All said and done, inflation is far less a worry right now than growth, which remains subdued," Financial Express. "By provisional estimates for 2020-21, private final consumption expenditure declined by Rs 7.4 trillion compared to 2019-20. Second. in the latest consumer confidence survey published before the RBI monetary policy meeting in June, household expectations on the general economic condition, their incomes, employment prospects and spending intentions on non-essential items had deteriorated markedly from the previous survey," Prof V Anantha Nageswaran. "It is time for the government to draw a line under the reliance on indirect taxes, especially fuel taxes, to shore up its fiscal situation." They maybe building a large reserve in case the economy falls further. Trouble is, it maybe too late.  

Surely the RBI has a duty to be patriotic?

"The Reserve Bank of India (RBI) on Monday said retail investors can open an account with the central bank in few easy steps online to start trading in government bonds," Business Standard (BS). And "retail investors can also bid for bonds in primary auctions just as large institutions do". Why? Is the RBI trying to increase wealth of citizens of India? The answer is an emphatic "No". In its last meeting in June, the RBI kept the interest rate fixed at 4% and also affirmed its intention of continuing its accommodative stance for as long as necessary, Business Today. This when retail inflation came in at 6.26% in June, a shade lower than 6.3% in May, BS. The RBI is therefore inflicting severe financial repression on the people. "Financial repression is a term that describes measures by which governments channel funds from the private sector to themselves as a form of debt reduction," Investopedia. In other words, the RBI is helping to transfer funds from ordinary savers to the government. "Throughout history, the Union government has deployed three levers to control RBI The first is the colonial-era RBI Act, which provides sweeping powers to the government of India (GOI)," wrote Bhattacharya, Bhatia and Devulapalli. "The second lever of control lies in the choice of governors and deputy governors to run RBI." The present governor of the RBI Shaktikanta Das is a retired IAS officer of the GOI, wikipedia. "The third lever of government control lies in the composition and staffing of RBI's central board." The Board of the RBI is loaded with government officers, rbi.org.in, and "S Gurumurthy and Satish Marathe were associated with affiliates of the ruling Bharatiya Janata Party (BJP) for long years". The government borrowed Rs 12.8 trillion in 2020-21 and is set to borrow Rs 12.05 trillion this year, Economic Times (ET). The RBI has been engaged in all sorts of financial contortions to keep borrowing costs lower which will lower the interest burden for the government. The RBI has been buying long term debt and selling short term ones through Open Market Operations (OMO), known as 'Operation Twist', Hindustan Times (HT). By reducing the quantity of long term bonds the RBI drives up prices which reduces yields. Since coupon rates on bonds are fixed, if the price of bonds go up then effective yields fall lower, The Balance. The RBI purchased Rs 1 trillion of government bonds under the Government Securities Acquisition Programme (G-SAP) in its determination to keep yields below 6%, The Indian Express (TIE). This is quantitative easing in other words. Naturally, bond traders are not happy with yields below the level of inflation so the RBI has been cancelling bond auctions rather than pay a higher yield, ET. Last week, the RBI was forced to sell Rs 140 billion worth of 10-year bonds at 6.10%, which is still lower than yields in the secondary market, HT. This is why the RBI has decided to sell directly to retail investors, most of whom will not understand the machinations of the RBI and may think that their money is safe. If large numbers of people bid for bonds the price will jump and effective yields will plummet. Secondly, the government will claw a large chunk away through income tax and cess, iciciprulife. So returns will be a pathetic 4% or less. Prices of bonds are volatile, although less than those of stocks, so the investor could suffer capital loss if forced to sell when prices are down, dummies.com. There is no capital loss in fixed deposits in banks. Since 2000, average annual inflation in the US has been much less than 3%, The Balance. Whereas, it has averaged around 7% in India, inflation.eu. Since the buying power of the rupee is weakening constantly compared to the dollar the exchange rate of the rupee has fallen since Independence, compareremit. Therefore, the price that retail investors pay today will be worth much less in 10 years. The RBI is conspiring to defraud the people. Surely it should be patriotic? 

"Tyranny of the elected" is no democracy.

An advertisement for a business correspondent in South Asia in the New York Times said, "Mr Modi is advocating a self-sufficient, muscular nationalism centred on the country's Hindu majority." "The government's growing efforts to police online speech and media discourse have raised difficult questions about balancing issues of security and privacy with free speech," wrote an indignant Shashi Shekhar. He thinks that the NYT has an "inherently prejudicial view of India". Perhaps, Shekhar should talk to Indian citizens who are not Bhakts. Like Disha Ravi, for instance, who was arrested from her home in Bengaluru by Delhi Police for sharing a toolkit by the Swedish activist Greta Thunberg, BBC. "Of the 78 ministers in the Cabinet, 42 percent have declared criminal cases against them with four having cases related to attempt to murder, according to a report by poll rights group ADR," Economic Times (ET). "When Narendra Modi uttered the famous slogan 'Na Khaunga, Na Khane Doonga' (neither will I indulge in corruption, nor allow anyone else to indulge in it), the nation was thrilled," wrote NKA Ballal. "Very conveniently (Arun) Jaitley started a dubious opaque system of Corporate Bonds which ensured that Corporates secretly donate and not declare it too." Clearly, there is some confusion between honesty and morality. The glib excuse for appointing suspected murderers is that they are 'innocent until proven guilty'. But then, so is journalist Siddique Kappan who has been in prison in UP since 5 October because he was on his way to Hathras to report a case of gang-rape and murder of a Dalit girl, The Week. The same UP Police has been denying that the young woman repeatedly mentioned on video that she had been beaten because she had resisted "zabardasti", which is the Urdu word for 'rape', BBC. The police forcibly cremated the body in the middle of the night after forming a chain to keep family members and journalists away, BBC. The arrest and inhuman treatment in prison of 84 year old Stan Swamy, with Parkinson's Disease has certainly made India famous all over the world, CNN. "The United Nations says it is deeply disturbed by the death in pre-trial detention of Father Stan Swamy, an 84-year-old Indian rights activist and Jesuit priest," reported Al Jazeera. "What led to Swamy's death is the normalised routinised evil of bureaucracy documented by Hannah Arendt and terrifying in its banality -- of cogs in a machinery encompassing the police, prisons and courts that never strayed from their carceral imperative enough to see the patent injustice of Swamy's incarceration. It is also the evil of leaders old and new, of a collapsed system that asks critics to keep the faith. The evil, unfortunately, is enacted in our name," wrote lawyer Nitika Khaitan. The evil is being committed under the Unlawful Activities Prevention Act (UAPA) which allows the police to keep anyone in prison for any length of time without having to prove guilt. That charges under UAPA are bogus is proved by, "Less than 2% of the people arrested under UAPA across the country in five years till 2019 were convicted, according to data compiled by the National Crime Bureau (NCRB)," ET. It should bother Shekhar that Indian citizens are wasting precious years of their lives and even dying after being imprisoned on false charges, Live Law. "Indeed, a 2% conviction rate shows how, in an overwhelming number of cases, it is the process that is the punishment," wrote lawyer Gautam Bhatia. "Clearly, it is time for the western media to introspect and course correct when it comes to factually accurate reporting and unbiased editorials about other countries, especially diverse and pluralistic democracies such as India," fulminates Shekhar. Just holding elections is "no guarantee against tyranny of the elected" and their should be space for both "reasoned and unreasonable" public discourse, said Chief Justice of India NV Ramana, Times of India. The foreign media will respect the Indian government only when it starts respecting Indian citizens. They have the same contempt for other autocratic states, like Turkey, Nicaragua or Russia. Which also hold regular elections.      

Where is the alternative?

"The vast majority of India's urban middle class appears to have abandoned the opportunities of citizenship. They are willing to sacrifice liberty, even dignity, for some mercy from the mai-baap sarkar (paternal government)," wrote Sagarika Ghose. "India's timid middle class is in sharp contrast with other countries." "Actually we Indians have been lulled into taking democracy for granted with successive good-old-boy prime ministers from PV Narasimha Rao to AB Vajpayee to Manmohan Singh running broad tolerant-minded administrations." India's middle class is actually poor. Per capita income for financial year 2020-21 in Bangladesh was $2,227, whereas India's per capita income reached $1,947.417, The New Indian Express. According to economists Sandhya Krishnan and Neeraj Hatekar India has 600 million middle class, with the lower middle living on $2-$4 per person per day and an upper middle living on $6-$10 per person per day, BBC.  Prof Anirudh Krishna "reckons that if you set the lower income threshold at $10 per person a day, then less than 2% actually have that status". "Indians, across religions, are not just believers but also conservative in their attitude towards religion," according to a survey by the Pew Research Centre, Hindustan Times (HT). "The Indian nation suffered a partition on religious lines at birth, yet adopted a secular form of state." Hindus have felt left out by the "good-old-boy prime ministers". Hajj pilgrimage to Mecca by Muslims used to be subsidised by the Indian state, wikipedia. The Delhi government pays a salary of Rs 18,000 to imams in Delhi's mosques and Rs 16,000 per month to helpers, Zee News, which prompted Union Minister Giriraj Singh to demand the same payment for Hindu priests, News18. In 2017, Bengal Chief Minister Mamata Banerjee appointed Bengal Urban Development Minister Firhad Hakim the chairman of Tarakeshwar Development Board, News18. Tarakeshwar is a 288-year old Shiva temple revered by Hindus. "The BJP's political victory has come on the back of a massive consolidation of Hindu votes, and almost negligible representation of Muslims in the ruling party's support base or elected representatives. The Opposition, having realised the gravity of the political challenge, has tried many tricks to counter the BJP. The most common among them has been what is often described as the 'soft-Hindutva' approach," HT. "The spread of the BJP as an all India party has certainly affected the Hindu perceptions across the country. As a result, the BJP's version of Hindutva seems to be emerging as the dominant expression of Hindu nationalism," The Print. Yet, while using Hindus to win elections the BJP has done nothing to stop the loot of Hindu temples by politicians. "While state governments control over 4 lakh (400,000) out of  an estimated 9 lakh temples across the country, there is no such control over Muslim and Christian religious bodies. In this backdrop, there are demands to amend 'Hindu Religious and Charitable Endowments (HRCE) Act 1951', which allows the state governments to take over temples and maintain complete control over them and their properties," Sunday Guardian. Hindus have been sliced according to caste. "With 27 ministers from OBC (other backward classses) castes, 12 from Scheduled Castes subgroupings, and eight from the Scheduled Tribes community, the majority in Modi's government now comes from traditionally marginalised groups," HT. "Take the Northeast. It says something about India's dismal past record that Kiren Rijiju has become the first leader from a state as sensitive as Arunachal Pradesh to enter the Union Cabinet. It speaks as poorly that no native of Tripura had ever been a part of the Union council of ministers, till Pratima Bhowmik joined as minister of state last week." "A passive middle class -- when citizens fail fellow citizens -- poses dangers for us all," thinks Ghose. The middle class is passive because it sees no alternative. Opposition politicians have to own up to past mistakes and give people honest alternatives to fight for. Just criticising is useless. 

Can't be Great and so diffident at the same time.

"Self doubts, shame, and remorse are coursing through Washington after US troops stealthily bolted from Bagram airbase in Afghanistan in the dead of night last week without even informing local Afghan commanders," wrote Chidanand Rajghatta. US troops pulled out of Iraq in 2011, leading to political instability and the rise of ISIS, Britannica. Left to the ravages of the Taliban, "Gun-toting Afghan women are marching in the streets and sharing pictures in a show of defiance against the Taliban, which is rapidly gaining control over a significant portion of the war-torn nation," Independent. Kurdish women have been fighting alongside men against ISIS in Syria, The Week. "The all-female branch of the YPG comprises at least 10,000 women in the age group of 18-25 year old," and "Kurdish women have been in the forefront during many of the political and military struggles in the Kurdish-dominated regions of Syria and Iraq." Just like the US, the Soviet Union was also defeated in Afghanistan despite the deaths of 1 million civilians and 90,000 Mujahideen fighters, The Atlantic. The Soviets could not take the deaths of 14,500 of their own soldiers and the costs of invasion. Similarly, Israel cannot win against the Hezbollah which has positioned 150,000 rockets and missiles in inhabited areas, schools and hospitals. "To the Israelis, the build-up is an intolerable threat  -- but also one it can only remove with huge loss of life and capital, which it has thus far been unprepared to commit," Business Insider. The problem is today's democratic nations cannot resort to indiscriminate slaughter as used to be the norm in the past. In the siege of Chittorgarh in 1567, Akbar slaughtered 30,000 of its inhabitants and all the Rajputs who walked out of the fort, Rajras. Julius Caesar killed or enslaved more than a million Gauls, National Geographic. Of course, the Chinese would probably come first in exterminating people. The conquests of Genghis Khan resulted in the deaths of an estimated 40 million people, history.com. "Censuses from the Middle Ages show that the population of China plummeted by tens of millions during the Khan's lifetime, and scholars estimate that he may have killed a full three-fourths of modern-day Iran's population during his war with the Khwarezmid Empire. All told, the Mongols' attacks may have reduced the entire world population by as much as 11 percent." "Colonisation of the Americas at the end of the 15th Century killed so many people, it disturbed earth's climate," BBC. "It's a cooling period often referred to in the history books as the 'Little Ice Age' -- a time when winters in Europe would see the Thames in London regularly freeze over." Today, only China is capable of wholesale massacre of an entire people. A report by a US-based think-tank claims that China is killing Uyghurs, "causing serious bodily harm, inflicting damage that can severely affect one's life, imposing child control measure on the group and finally, transferring children of the group to another", The Print. "The state (China) regularly subjects minority women to pregnancy checks, and forces intrauterine devices, sterilization and even abortion on hundreds of thousands, the interviews and data show," AP. "In the most callous tradition of realpolitik the liberal establishment has simply abandoned Afghanistan to the ministrations of some of the world's most notorious actors," wrote an angry Rahul Shivshankar. "For amongst the abominable who are primed to jump into the vacuum as soon as the Americans up sticks are the Taliban." "Both Beijing and Islamabad fancy a stake in Afghanistan for the strategic depth it affords against its neighbours, in particular local hegemon India." "What was the point of all the destruction, killing and misery they brought us? I wish they had never come," regretted Malek Mir. Julius Caesar, Genghis Khan and Akbar would have destroyed Taliban's support, which is Pakistan. That's why they are known as Great. The US is seen as a loser and a wimp.  

Similar to 2008, but with added lockdowns.

The Indian economy is improving "as confirmed by high frequency indicators such as goods and services tax (GST) e-way bills, vehicle registrations, electricity demand, rail freight and petrol consumption", wrote Aditi Nayar. However, PMI for both manufacturing and services contracted in June. "The Nikkei Purchasing Managers' Index (PMI) compiled by IHS Markit, declined to an 11-month low of 48.1 in June from May's 50.8, moving below the 50-level separating growth from contraction," Economic Times (ET). IHS Markit's Services PMI "plunged to 41.2 last month from an already depressed 46.4 in May", the lowest level since July 2020, ET. "Indian states' weaknesses outweigh their strengths as they battle the pandemic and they need financial support from the Centre, which is already dealing with drastically reduced revenue, according to S&P Global Ratings," ET. If the Centre increases share of taxes it pays to the states "it may embolden states to accelerate capital expenditure; this would be growth supportive", wrote Nayar. Or, the "cesses levied on petrol and diesel could be reduced by Rs 4.5 litre each", which would be revenue neutral and reduce consumer inflation by 10 basis points. The government could see that public sector enterprises (PSE) clear pending dues of micro, small and medium enterprises (MSME) which will immediately improve their cash flow and allow them to continue paying their employees. Instead the Finance Minister Nirmala Sitharaman announced a Rs 1.1 trillion loan guarantee scheme for sectors including health and Rs 4.5 trillion Emergency Credit Line Guarantee Scheme (ELGS) for MSMEs, ET. "Based on consolidated data for FY2019-20 (data for the recent fiscal year is still not fully available) , registered MSMEs were awaiting dues that amounted to a mammoth Rs 15 trillion," wrote Gautam Das. Instead of paying legitimate dues the government wants them to borrow money on which they will have to pay interest. There are three challenges facing the Bharatiya Janata Party (BJP) of Prime Minister Narendra Modi before the general election in 2024, wrote Roshan Kishore. 1. The rich are becoming richer because of the relentless rise of the stock market with price/earnings (PE) ratio at 32. "The market capitalisation of the BSE S&P index has increased by 2.6 times between the quarter ending March 2014 and March 2021," while nominal GDP has increased 1.9 times. 2. Growth in private sector earnings has been weak which makes people unhappy. "In a potential boost to consumption ahead of the festival season, the Union government's employees and pensioners will likely see their emoluments rise effective July 1, thanks to a likely big hike in dearness allowance (DA) and dearness relief (DR). The move is seen to enhance their monthly pay by Rs 3,000 to Rs 30,000, depending on the pay scales," Financial Express. 3. India's consumer price inflation (CPI) jumped to 6.3% in May from 4.23% in April, ET. "What is perhaps an even bigger threat is the possibility of a wage-price spiral. As prices rise, nominal wages will have to increase, especially for those who spend most of their income on essentials." There is a danger of increasing bad loans in public sector banks (PSBs), wrote Mythili Bhusnurmath. "If the post-2008 period saw banks increase lending to the infrastructure sector at the behest of the then FM P Chidambaram, we now see PSBs being exhorted to lend to the MSMEs sector by finance minister Nirmala Sitharaman." "The transition from low- and medium-risk MSME borrowers to the high risk segment, is 'noteworthy' and implications of business disruptions following the resurgence of the pandemic could be 'significant'," says a report by the RBI (Reserve Bank). "Read that as RBI gobbledegook for impending disaster, given that for much of the period in question, the Supreme Court had imposed a standstill on asset classification." After 2008 there was no lockdown. Now no one knows.          

More people to carry out the same ideas. How will that help?

"The much awaited-awaited Cabinet expansion turned out to be a much bigger recast than expected," Times of India (TOI). "The new nominees reflect an effort to increase the profile of OBCs (Other Backward Classes, wikipedia) in the council of ministers, with the number reaching 27 in a ministry of 78." Actually, the number of ministers is 79, with 30 of cabinet rank, 2 ministers of state with independent charge and 47 ministers of state, plus the Prime Minister, taking the total to 80, according to india.gov.in. The US cabinet consists of 24 members, including the Vice President, The White House. "The BJP's electoral needs in UP, where party appears to have made a conscious effort to supplement its Hindutva (Kamandal) plank by bringing in non-Yadav 'backwards' (Mandal), Gujarat, Karnataka and West Bengal appeared to have been a major consideration." There are elections to assemblies of 7 states in 2022, wikipedia, of which UP is the biggest with the largest number of seats in the Lok Sabha with 80 seats, Parliament of India. Election to West Bengal Assembly was held only a couple of months back, in which the Trinamool Congress (TMC) of Chief Minister Mamata Banerjee won with two-thirds majority and 48% of the votes cast, moneycontrol. The Centre has sent a team to investigate allegations of violence by TMC workers against members of the BJP after the results of the election were announced, Hindustan Times (HT). "Delhi media is abuzz with news that a possible third front, comprising non-BJP and non-Congress political parties, is forming up -- ostensibly to take on the Bharatiya Janata Party and Prime Minister Narendra Modi," The Print. That is why West Bengal has to be kept destabilised so that Mamata Banerjee cannot lead such a front to challenge Modi. "His government's image hit by a crisis of capacity and credibility during the second Covid wave, Prime Minister Narendra Modi Wednesday signalled a reset effecting the most sweeping change in his Council of Ministers since he took charge for the first time in 2014," The Indian Express (TIE). "Health Minister Harsh Vardhan's exit has a ready and convenient cover: the Government's thinly veiled acknowledgement of mismanaging the Covid crisis and an attempt to course-correct through a fresh set of hands." The new Minister of Health is Mansukh Mandaviya from Gujarat who also has the portfolio of Chemicals and Fertilizers, Economic Times. (ET). Obviously, even with predictions of a third wave of coronavirus infections in August, with a peak in September, moneycontrol, health is not important enough for an independent ministry. "In the state of Gujarat in western India, some believers have been going to cow shelters once a week to cover their bodies in cow dung and urine in the hope it will boost immunity against, or help them recover from, the coronavirus," Reuters. Logical to combine health with fertilizers. "But many in the ruling establishment are searching for reasons behind the exit of others: DV Sadananda Gowda, Ravi Shankar Prasad, Ramesh Pokhariyal Nishank, and Prakash Javadekar (all Cabinet Ministers) and Santosh Gangwar (MoS Independent Charge). More so, given the fact that all these ministers consistently -- and faithfully -- read the government's brief whether it was neem-coated urea (Gowda); hobbling Chinese electronics firms and taking Twitter to task for its alleged political bias (Prasad); National Education policy (Nishank); environmental clearances (Javadekar) or labour codes (Gangwar)." Modi's approval rating has apparently fallen after the second wave, according to a poll published by Morning Consult, The Wire. "A French court has permitted Cairn Energy to freeze several India-owned assets in Paris towards the settlement of the international arbitration order, the Financial Times reported," ET. Devas Multimedia is seeking to seize assets of Air India as compensation for its $1.2 billion claim on the Indian government. There is no money. Petrol is now selling at over Rs 100 per litre all over India, News18. Increasing the number of ministers will not help. No one will contradict Modi. Especially, with Mr Amit Shah being in charge of a new Ministry of Cooperation, TIE. The economy is hemorrhaging. A finger, or 79 fingers, in the dyke will not help. Only cost more.

1860: Beginning of freedom for US slaves and of slavery for Indians.

"Jailed Indian tribal rights activist Stan Swamy has died of cardiac arrest in Mumbai city. He was 84," BBC. "Swamy, the oldest person to be accused of terrorism in India was arrested in October 2020. He was among 16 renowned activists, academics and lawyers, who were charged under a draconian anti-terror law." The charges date back to 1 January 2018, when violence broke out at Bhima-Koregaon as Dalits were celebrating the 200th anniversary of victory against Marathas, Business Standard. The violence was  apparently precipitated by incendiary speeches at an event Elgaar Parishad held on 31 December to commemorate the event. "It was organised by a coalition of 260 non-profit organisations at Pune's Shaniwarwada Fort, and had approximately 35,000 people in attendance, wikipedia. The BBC reported how Stan Swamy, who suffered from Parkinson's Disease, was not allowed drinking straws and a sipper to help him drink water, 68-year old Gautam Navlakha was denied a new pair of spectacles after his old ones were stolen, and pregnant student Safoora Zargar spent 74 days in Delhi's Tihar Jail where she was not allowed to keep her shoes, toothpaste, soap and shampoo. The irony is that the BBC is confused that Indian citizens are being tortured under the law of sedition which was enacted by the British in 1860 to subjugate Indians, Library of the US Congress. In greater irony, Abraham Lincoln was elected US President in 1860 which resulted in the start of the Civil War in 1861, which in turn led to freedom of black slaves, History.com. "A new report from a US-based digital forensics company has said a hacker planted 22 'incriminating' files in activist Rona Wilson's computer, days after violence in the Maharashtra town of Bhima-Koregaon in January 2018," Scroll.in. "The files were never created, opened or used by anyone who directly handled Wilson's computer, but the hacker used a software to plant them, said the new report from Arsenal Consulting." A new report finds co-accused Surendra Gadling's computer was also hacked. "In its June 21 report, the US-based consultant said, 'Arsenal has connected the same attacker to a significant malware infrastructure which was deployed over a course of approximately four years to not only attack and compromise Gadling's computer for 20 months, but to attack his co-defendants ... and defendants in other high-profile Indian cases as well'," Times of India (TOI). "The ministry of information and broadcasting (I&B) has invited public comments on the draft Cinematography (Amendment) Bill 2021," which gives the Centre absolute powers to pass any order on a pending film, even after it has been passed by censors, wrote Radhika Roy & Surbhi Karwa. "What will happen if it becomes law is this: Unsure of what is safe for release, every film will be self-censored; many things that make a film delightful may go, all risky topics will vanish," wrote Manu Joseph. "Any further strangulation could kill commercial cinema. India should not take its film industry for granted." "The proposed amendments to the Consumer Protection (E-Commerce) Rules 2020, have proved controversial, with new statements of concern coming in everyday. However, one issue that has garnered less attention is how it would expand the government's powers to access data of consumers, raising fears regarding expanded surveillance intruding into consumer data and the right to privacy," wrote Namrata Maheshwari & RJ Singh Chima. "Prime Minister Narendra Modi is in the list of 37 heads of state or government that the global body Reporters Without Borders (RSF) has identified as 'predators of press freedom'," The Wire. Ominously for us, a new Ministry of Cooperation has been created under the Ministry of Home Affairs which is supposed to be for law and order, NDTV. Apparently, this new ministry will form cooperatives, but what if someone refuses to cooperate with a cooperative? Hope there is no department of kneecapping in the new ministry. Just to help people cooperate. Like Stan Swamy.        

The warnings are there. It's up to us now.

The Global Economic Prospects (GEP) report by the World Bank sees advanced economies recovering to pre-pandemic levels this year while recovery in emerging markets and developing economies (EMDEs) will be uneven, wrote Prof Kaushik Basu. "The problem with India is not its economic fundamentals, which are strong, but the poor management of its economy and the pandemic" and there will be 143-163 million newly poor people, half of whom will be in South Asia, mainly in India. The World Bank warns against inflation. "Inflation usually declines during recessions. But, of the global recessions of the last half-century,  the drop in inflation during this pandemic-induced downturn has been the most muted." Inflation has risen faster since May this year. Debt ratios were much lower in the recession of the 1970s while central banks were worried about deflation after the debt crisis of 2007-08, wrote Prof Nouriel Roubini. This time, "Debt ratios are much higher than in the 1970s, and a mix of loose economic policies and negative supply shocks threaten to fuel inflation rather than deflation, setting the stage for the mother of all stagflationary debt crises over the next few years." In September 2006, Roubini "laid out a bleak sequence of events: homeowners defaulting on mortgages, trillions of dollars of mortgage-backed securities unraveling worldwide and the global financial system shuddering to a halt," wrote Stephen Mihm. No one believed him and he was known as 'Dr Doom' and 'permabear'. "In the year that followed, subprime lenders began entering bankruptcy, hedge funds began going under and the stock market plunged. There was declining employment, a deteriorating dollar, ever increasing evidence of a huge housing bust and a growing air of panic in financial markets as the credit crisis deepened," The New York Times Magazine. He is predicting a 'U' or 'L' shaped recovery this time. "During the global financial crisis it took about three years until output fell sharply," he told BBC's Talking Asia Programme. "This time around it didn't take three years, not even three months, in three weeks there was a freefall of every component." "Roubini, who's known as 'Dr Doom,' thinks the most obvious trigger will be US Treasury yields rising above 2%. That could panic investors in all asset classes, sparking powerful waves of selling," Forbes. "That's especially so here in Asia, the region with the largest US Treasury debt holdings. It could take on a momentum all its own, driving up rates on corporate, mortgage-backed, asset-backed and municipal debt. a jump in yields could force big revaluations in equity prices too." "The doom loop of sovereigns and banks in the eurozone after the global financial crisis will be repeated worldwide, sucking in households, corporations and shadow banks as well," he wrote. As opposed to the US, Europe and Japan, who have been striving to prevent deflation, India starts with very high inflation. Retail inflation came in at 6.3% in May from 4.23% in April, Economic Times (ET). Food and beverages comprise 45.86% of our consumer price index (CPI) basket, 54.18% in rural and 36.29% in urban areas. "Fuel costs have been ratcheted up to current levels by the combined effects of rising benchmark Brent prices and numerous tax hikes over the past few years," Business Standard. The RBI's Financial Stability Report shows that "at less than 6%, the overall credit growth is quite dismal", which means muted investment, and households expect employment, productivity, and wages to decline, even as they expected prices to rise, pointing towards lower spending and demand. This is because the RBI is doing everything in its power to "keep yields lower as that reduces borrowing costs for the government while preventing any upward movement in lending rates in the market", The Indian Express. The stress on food and beverages in our CPI probably does not reflect true inflation because GST collections have been rising to record levels, UNI, despite anemic demand, reflecting soaring prices of goods and services other than food. After all, man doth not live by bread alone". The World Bank and Dr Doom have warned us.      

Winning at any cost: what about duty and service?

Results of elections to State Assemblies in 2021 were disappointing for the Bharatiya Janata Party (BJP) of Prime Minister Narendra Modi, winning Assam and the tiny Union Territory of Puducherry, while losing in major states -- Kerala, Tamil Nadu and West Bengal. The heavy defeat in West Bengal where the Trinamool Congress Party of Chief Minister Mamata Banerjee won two--thirds majority with 213 seats to 77 for the BJP, moneycontrol, despite strenuous campaigning by Modi, would have been particularly bitter. "The BJP had pulled out all the stops for electioneering, with PM Narendra Modi leading its campaign from the front," wrote Geeta Pandey. "To enhance his appeal further to the Bengali voter, he had grown his beard long, with his supporters drawing comparisons with the state's much loved icon -- Nobel Prize-winning poet Rabindranath Tagore. But in the end, it all came to nothing," BBC. Next year is even more crucial with assembly elections in seven states, plus, possibly Jammu and Kashmir, wikipedia. Of these 7 states, 6 are held by the BJP so the elections are for the BJP to lose. Of these, Uttar Pradesh (UP) is the largest state in India with 80 seats in the Lok Sabha and control of the state could be crucial for the general election in 2024. "Three political economy developments offer pointers to the poll season coming up," wrote Rajrishi Singhal. The first is the government's assault on the social media platform Twitter, whose MD in India, Manish Maheshwari has summoned in person by UP police, Hindustan Times (HT). "But, bizarre as it may sound, a government obsessed with blue ticks on Twitter handles in the midst of a raging second wave, marked by accelerating fatality rates, could be aiming not just to divert attention from lack of oxygen or hospital beds, but also to prime its core constituency for the approaching UP elections," Mint. The second pointer is the change of rules for e-commerce companies, especially Amazon and Walmart. "New Indian e-commerce rules will raise costs for online retailers but particularly Amazon (AMZN.O) and Walmart's (WMT.N) Flipkart as they may have to review their business structures, senior industry sources told Reuters." These rules are "aimed at placating owners of mom-and-pop stores. It is almost ritualistic how every election season the BJP tries to mollycoddle this constituency. Shopkeepers have been part of its core support base, especially in many parts of UP." "The third pointer to UP elections is sugar politics." "At least 95 sugar mills out of 119 have closed their operations in the prevailing crushing season. These mills owe over Rs 11,700 crore (Rs 117 billion) to 40 lakh (4 million) farmers in the state (UP) so much so that the farmers are unable to take care of the other crops they have sown after the cane harvest. Increasing diesel prices are also a big concern for these farmers who have to irrigate lands with the help of generators and tractors," Times of India (TOI). Prices of petrol and diesel are being increased every alternate day relentlessly. "In the last two months, the price of petrol has increased 34 times in India," India Times. A recent meeting, oil cartel OPEC+ failed to come to a consensus about increasing production of crude oil which could result in higher prices of fuel for consumers, Daily Mail. Americans are complaining about high prices of fuel with petrol costing $3.13 per US gallon, which converts to about Rs 70 per liter, Rs 30 less than what we are being forced to pay. "The Bharatiya Janata Party (BJP) has won 67 of the 75 district council presidencies (zilla panchayat adhyaksh or ZPAs) in Uttar Pradesh (UP)," wrote Rahul Verma. Council members, "or even their family members get harassed, or worse, abducted to ensure they vote in a certain way." Control of power and money locally. Can the opposition present a combined front in 2024? That would depend on the Congress. "From 1989, its voter base has been steadily eroding but, despite all this, by virtue of being the main national Opposition party, it still seems an obvious choice to hold together an alternative front," wrote Shashi Shekhar. The BJP will not surrender its power easily. Could end up being a dirty fight. Very dirty.

Why are they celebrating when we feel hopeless?

"The provisional revenue and expenditure figures for the Union government for 2020-21 show that "its collection of indirect taxes were more than of direct taxes, and personal income tax collection exceeded corporate income tax collection. Both are unwelcome," wrote Prof VA Nageswaran. The government has massively increased taxes on petrol and diesel, so that taxes account for over 60% of the price paid by consumers, ORF. "Indirect taxes (excise, customs and goods and services tax) are like direct taxes on production," Mint. "Indirect taxes keep the cost of production up, thus reducing the growth of incomes accruing to factors of production. In the process, tax collection through direct taxes also suffers." Goods and services tax (GST) collection in April 2021 reached a record Rs 1.414 trillion, UNI, after a record collection of Rs 1.24 trillion in March, IIFL Securities. Collections in May 2021 fell slightly to Rs 1.02 trillion but this was the eighth consecutive month when it was more than Rs 1 trillion, moneycontrol. "Commendable work has been done in the year gone both in the area of facilitation and enforcement. The enhanced revenue collection in recent months should now be the 'new normal'," said Finance Minister Nirmala Sitharaman ominously, Times of India (TOI). She seems to be setting targets for tax officials and encouraging tax terrorism, Rajat Deb, on individuals and businesses to achieve those targets, however unrealistic and extortionary they maybe. "For instance, TDS (tax deduction at source) deduction is duty of the organisation that is making payments to invoices raised by service/goods provider. The payee gets paid post TDS deductions, thus should not be penalised or harassed by authorities when the deducting organisation does not deposit the same or delays it," wrote Vijay Kumar Gupta. "One of the biggest challenges that the Covid-hit economy faces at the moment is dwindling demand -- a factor that could delay India's economic recovery for a longer period after the second wave. There are several reasons behind falling demand during the second wave, ranging from lower consumer footfall, weak consumer sentiments and mobility restrictions due to localised lockdowns in most parts of the country," India Today. According to a survey by the RBI, consumer confidence in India has fallen to new lows. "The current situation index fell to a record 48.5 in May from 53.1 in March, according to the Reserve Bank of India's (RBI) consumer confidence survey, where 100 divides pessimism from optimism," Economic Times (ET). Essential spending was "showing signs of moderation while non-essential spending continues to contract". "Households' median perception for the current period jumped by 150 basis points to 10.2% while the inflation expectation for three months rose 70 basis points to 10.8%, compared to March 2021 survey, the RBI said. Median inflation expectations for one-year ahead also remained at an elevated level at 10.9%." If consumers are pessimistic and spending less how did the private final consumption expenditure (PFCE) rise sharply to near Rs 34 trillion in the first quarter of 2021 from below Rs 24 trillion at the end of 2020, OECD.  PFCE fell 9.1%, from Rs 83.2 trillion in 2019-20 to Rs 75.6 trillion in 2020-21, while government final consumption expenditure (GFCE) 2.91% from Rs 15.41 trillion to Rs 15.86 trillion, moneycontrol. If people are spending less how are GST collections, which accrue only when people buy goods or services, soaring so dramatically? "Against the revenue neutral rate of 15.3% which was recommended by the Arvind Subramanian Committee, weighted average GST has been falling continuously and was just 11.6% in July and September 2019," wrote Roshan Kishore. The current effective tax rate is around 11.8%, Hindustan Times. If people are buying less and rate of GST has fallen, how is the total collection hitting record levels? Since GST is a percentage of the price, prices must have risen massively. That will hit consumer spending even more. They are hitting us when we are down. Doesn't make sense, does it? 

How to become a middle-income economy first?

"Too many countries have failed to make the leap from middle-income to high-income group, afflicted by a malady now commonly referred to as 'the middle income trap'," wrote Jahanwi Singh. "Re-allocation of labour from low-productivity agriculture to high-productivity sectors, such as manufacturing, has been a primary channel through which today's advanced economies raised living standards. In India, growth in labour productivity has consistently declined over the past decade. The annual growth rate of output per worker has dipped from 7.9% in 2010 to 3.5% in 2019 as per International Labour Organization estimates," Mint. Reform of labor laws and increased use of technology should do the trick, thinks Singh. The fear was that robots will replace large numbers of human workers, instead, "New technologies can give corporations tools for monitoring, managing, and motivating their workforces" and makes it easier them "to maintain tight control on workers and squeeze and exploit them to maximize profits," Vox. "In recent years, Amazon has become the corporate poster child for automation in the name of efficiency -- often at the expense of workers." And yet, in April, Amazon "secured enough votes to defeat the unionization drive at one of its Alabama warehouses," CNBC. "Of the 3,215 ballots cast, there were 1,798 votes opposing the union and 738 in favor." "Gig economy companies such as Uber, Lyft, and DoorDash are fighting tooth and nail to make sure the people they enlist to make deliveries or drive people around are not considered their employees." In India, "According to the Annual Survey of Industries (2017-18), contract workers accounted for 36.4 percent of total production workers in the registered factory sector," wrote Rachicka Kapoor. "Contract workers, who are hired via an intermediary (contractor) are not on the payrolls of the company on whose shop floors they work," The Indian Express (TIE). The new labour laws have sought to help companies by allowing them to employ workers with fixed term contracts which will end without notice and without having to pay retrenchment benefits, and will help workers by paying the same salaries and benefits as regular employees, The National Law Review. But companies continue to prefer contract workers because "the monitoring, legal compliance and litigation costs are shifted onto the contractor, thereby reducing the transaction costs of recruitment to firms," TIE. Contract workers rioted in a Maruti factory at Manesar in Gurugram in 2012, damaging cars and machines and burning a manager to death. 100 management officials and 9 police officials were injured in several hours of rioting, NDTV. In December last year contract workers rioted at an iPhone production plant operated by Taiwanese company Wistron in Narasapura in Karnataka, techradar. An analysis of 1,130 companies showed that despite the prolonged lockdown due to the coronavirus in 2020-21, "even as revenues, at the aggregate level, fell by 6%, the operating profit of this representative set of India Inc shot up by 30% and net profit climbed by 48%," wrote Arjun Srinivas. "The revenue-profit dichotomy within corporate India suggests that companies went on a massive cost-cutting spree, which was at an order of magnitude different from what unfolded in other countries." "One major area of cost-cutting was compensation to employees, whether in the form of laying off staff, employing contract labour for fewer days, or by pruning salaries." India's factory activity contracted for the first time in almost a year in June as restrictions to contain the deadly second second wave of the coronavirus triggered declines in demand and output that pushed firms to cut more jobs," Reuters. Too many workers, not enough jobs. Stuck in low-income economy. 

May seem different, but they died of the same cause.

"The Supreme Court on Wednesday ruled that the Centre must pay compensation to the family of those who succumbed to Covid-19, but said the amount of compensation will be decided by the government," India Today. Few days ago, the Centre had told the Supreme Court that Rs 4 lakh (Rs 400,000) compensation cannot be paid to all those who died due to Covid-19 as it would exhaust the disaster relief funds." "Even at Rs 4 lakh each for almost 400,000 homes, going by India's official covid toll so far, its fiscal bill would work out to under Rs 16,000 crore (Rs 160 billion), which is just a fraction of its other outlays for pandemic aid," wrote an editorial in the Mint. "Our current total is very probably an undercount, with some states showing mortality denial even in the face of nameless bodies spotted at random, but the scale of it is hard to estimate." And that is what will make this compassion so unfair. Officially, India has registered 30.5 million cases of Covid infections of which 401,068 have died, worldometer. "India's true coronavirus death toll could closer to 2 million compared to the official 395,000 fatalities reported, experts warned," Daily Mail. Which means, a large number of families will not receive any help because they have not been counted. At today's prices, Rs 400,000 will not last very long if the earning member of a family has died. What happens to children who have lost both parents? "Over 2,000 children in Delhi have lost either one or both their parents to COVID-19, with 67 of them losing both their parents, since the pandemic outbreak in March last year, says a survey conducted by the Delhi Commission for Protection of Child Rights of DCPCR," NDTV. Since children have no knowledge of investment and banking the compensation money could be stolen. But it is not just those who were proved to have been infected with the coronavirus. Various state governments blocked hospital beds for Covid patients only. "The number of COVID-19-designated hospital beds at Delhi government run hospitals has been increased from 6,000 to 13,000, Health Minister Satyendra Jain said on April 14," moneycontrol. In April, "Two days after designating 14 big private hospitals as dedicated to Covid, the Delhi government on Wednesday revised its order allowing the hospitals to use 10%-30% of their beds to provide emergency care as well as follow-up treatment to some of their patients," Hindustan Times (HT). "Only two hospitals, Max Smart Superspeciality hospital and Manipal hospital, remained completely Covid-19 centres after the order, which reduced the number of beds accrued from 4,337 beds to 3,553." India has just 5 beds for every 10,000 Indians. The just released Human Development Report 2020 showed that out of 167 countries, India would rank 155th on bed availability," Times of India (TOI). "Countries in the 'very high human development' category typically have 25-50 doctors per 10,000 and 25-35 beds per 10,000." We have 5 hospital beds and just 8.6 doctors per 10,000 people. "So far, 798 doctors have died in the second wave of the pandemic, according to the registry by the Indian Medical Association, shooting past the toll of 748 recorded during the first wave," HT. When the second wave struck the nation was completely unprepared and there was a desperate scramble for beds and oxygen, BBC, with patients dying outside hospitals. Blocking of beds by governments and the death of at least 1546 doctors would mean that tens of thousands of patients with heart disease, strokes, diabetes, tuberculosis, cancer, renal failure and many other serious diseases would have died without medical help due to scarcity of doctors, hospital and ICU beds. These patients may not have been infected with the virus but they died as a result of the pandemic, just as those who died of the virus infection. A clearer picture could be obtained from all-cause mortality numbers but states are not releasing those numbers. Only Kerala "released all-cause mortality data with the claim that contrary to all assumptions of deaths in the state going up due to the impact of Covid-19, the total number of deaths in 2020 went down by more than 11% in comparison with 2019," ORF. The Supreme Court means well but won't it be grossly unfair to compensate just a small selection of people? Perhaps, the Court should order all governments to release correct data. Honesty: is it asking for too much?   

We are a poor cousin to China.

"China's ruling Communist Party (CCP) is throwing itself a party kicking off a month of celebrations today to memorialize its founding 100 years ago. Across China, newspapers and buildings alike have been blanketed in red party propaganda," npr. Where China leads we follow. In March, the Indian government "set up a 259-member high level national committee headed by Prime Minister Narendra Modi to commemorate 75 years of India's Independence," Economic Times (ET). The so-called Central Vista project in New Delhi, which will have new residences for the Prime Minister and the Vice President, at a cost of Rs 200 billion will be completed by the end of next year, Scroll.in. "China's President Xi Jinping has warned that foreign powers 'will get their heads bashed' if they attempt to bully or influence the country," BBC. "Mr Xi also said Beijing would not allow 'sanctimonious preaching', in remarks widely seen as directed at the US." For India, China is the most dangerous and powerful enemy. "In a historic move, the Government of India (GOI) has moved 50,000 additional troops to its border with China as tensions between the two nuclear-powered countries continue after clashes between the two sides in the Galwan Valley and Eastern Ladakh," Zee News. "As of now, India has about 200,000 troops deployed on the border, representing an increase of more than 40% from last year." "There is scant evidence that the CCP under Xi has aims beyond the use and abuse of power to perpetuate its hegemony,"wrote a critical, yet nervous editorial in the Mint. "Yet, there is an even bigger reason for us to be wary of China. Backed by its tech-enabled military heft, it has revealed a will to supplant liberal democracy globally with its peculiar notions of a stable world order." "In terms of membership, with 91million, it (the CCP) is the world's second largest political party behind the Bharatiya Janata Party (BJP) of India," wrote Ajit Ranade. "The CCP would brook no dissent on the political system. In that, there was continuity and consistency from Mao to Deng and China's current President Xi Jinping." "Chief Justice of India NV Ramana on Wednesday said the right of people to change those in office through elections was no 'guarantee against tyranny of the elected' and argued that democracy and its benefits could only be ensured by giving space to both 'reasoned and unreasonable' public discourse," Times of India (TOI). In March, 'US-based non-profit Freedom House downgraded India from a free democracy to a 'partially free democracy', BBC, and then Sweden-based V-Dem Institute described India as a "flawed democracy". To that, the Foreign Ministry retorted that India has "robust institutions and well established democratic practices" and does not "need sermons especially from those who cannot get their basics right". We cannot 'bash heads' because we are not strong like China. "History writing has been part of the CCP's activities since the consolidation of Mao Zedong's leadership in the party in the early 1940s," wrote Adrija Roychowdhury. "What also stands out in the history writing project in China is that the same party, over the course of a 100 years of its existence, has approached the history of China and that of its own differently at different moments of its time." The Indian Express. However, "Similar exercises of state control over the past have happened in large parts of the world, including India." "We all read about Karna in the Mahabharata. If we think a little more, we realise that the Mahabharata says Karna was not born from his mother's womb," Modi said. "This means that genetic science was present at that time," The Print. "We worship Lord Ganesha. There must have been some plastic surgeon at that time who got an elephant's head on the body of a human being and began the practice of plastic surgery." From facial recognition to identify protesters, Down To Earth, to fingerprinting to pay income tax, India Today, we are a lot like China. Only poorer and weaker.        

Smaller trough, so many snouts.

India suffered a balance of payments crisis in 1991, when foreign exchange reserves fell to $1.2 billion in January, which was sufficient for 3 weeks of imports, and had to mortgage 67 tons of gold to borrow money from the Bank of England and the Union Bank of Switzerland, wikipedia. This led to economic reforms under the then Prime Minister Narasimha Rao and a dismantling of the licence/permit Raj, wikipedia. However, annual growth rate did not differ much from the 1980s. "India moved to a higher growth trajectory only after the year 2000," wrote Niranjan Rajadhyaksha. Maybe, but, "Independent India had a severe balance of payments crisis almost once every decade: 1957, 1966, 1981, 1990. There has been no comparable crisis over the past 30 years, despite a scare in 2013." After hitting a record high of $608.081 billion, India's foreign exchange reserves fell by $4.148 billion to $603.933 billion in the week ending 18 June, Times of India (TOI). This should help India to defend the rupee if and when the US Federal Reserve starts tightening monetary policy, "but analysts and traders warn a slowing economy and an expanding fiscal deficit still make it particularly vulnerable to capital flight", Business Today. "India has reached the end of the road of the gains made from the 1991 moment," wrote Yamini Aiyar. Because, "Corruption scandals under the United Progressive Alliance regime, the twin balance sheet problem, the consolidation of capitalist oligarchies and increased opacity in electoral  finances under the current government are illustrations of this entrenched cronyism, notwithstanding reforms such as the Insolvency and Bankruptcy Code," Hindustan Times (HT). Foreign currency reserves have increased because "Our imports of goods in 2020-21 fell to $392.2 billion from $474.2 billion in 2019-20," wrote Vivek Kaul, but our exports and inward remittances did not fall as much, Mint. Also, "India has emerged as the biggest recipient of foreign portfolio investments this fiscal with net inflows worth Rs 2.6 lakh crore (Rs 2.6 trillion), driven by ample liquidity in global markets and hopes of faster economic recovery, according to experts," The New Indian Express. "India's record more than $600 billion of foreign exchange reserves might not be good enough, as it falls short on some measures including import cover and liability outflows, according to new research from the central banks," wrote Anirban Nag. "The pile is the world's fifth-biggest after China, Japan, Switzerland and Russia, and is enough to cover 15 months of imports. That's less than the 39 months' cover offered by Switzerland's reserves, 22 by Japan's, 20 by Russia's and 16 months by China's pile, according to the RBI researchers. Besides, India's net international position -- which is assets over liabilities -- is a minus 129% of gross domestic product. The minus figure denotes that liabilities owed to foreigners are more than assets," Economic Times (ET). In 2019-20, India's GDP was Rs 146 trillion, fell to Rs 135 trillion in 2020-21 and is expected to grow to Rs 146 trillion in 2021-22 if the growth rate is 8.3%, wrote Udit Misra. So, India would have lost full two years of growth. Even if growth jumps to 10.1%, GDP will reach only Rs 149 trillion. Inflation, both retail and wholesale, is going up, bank credit to commercial sector is plummeting because of low consumer demand and the government is spending less," The Indian Express (TIE). The Covid crisis has driven the government back to the sleight of hands of the 1980s, which resulted in the balance of payments crisis in 1991. The RBI transferred Rs 991.22 billion to the government as dividend for the 9 months to 31 March, which is second only to that of Turkey, TOI.  "The government is set to see a dividend windfall thanks to its holdings in public sector undertakings," HT. "It's not just politicians linked to the ruling BJP who have been made independent Directors of Public Sector Undertakings. When it comes to patronage from the ruling establishment, officialdom isn't far behind," TIE. So many snouts in the trough. The trough is getting smaller. Another crash?

It is all due to the premorbidity.

Finance Minister Nirmala Sitharaman announced new measures to stimulate the economy. "Rs 1.1 lakh crore (Rs 1.1 trillion) loan guarantee scheme for Covid affected sectors", including Rs 500 billion for the heath sector. Rs 1.5 trillion for Emergency Credit Line Guarantee Scheme, loans to micro finance institutions, loans to tourism sector, free visas to 500,000 people and subsidies for fertilizers, job creation, free food grains for the poor, public health and exports, Economic Times (ET). "Estimating the additional burden on the 2021-22 budget from three direct stimuli in the package at Rs 1,18,390 crore (Rs 1.184 trillion) or 0.5% of GDP for the fiscal year, EY said this was of limited magnitude. If the guarantee schemes and the announcements that had already been made earlier are excluded, the step up in the fiscal outgo within FY22 could be just Rs 60,000 crore (Rs 600 billion), Icra noted," The Financial Express. "Industry leaders and economists said the new loan guarantees, amounting to $35 billion, may provide some temporary relief but would not be sufficient to boost economic growth," ET. The word 'stimulus' has completely different meanings in India and the US. In the US, President Joe Biden signed a $1.9 trillion relief package which will give direct cash payments of up to $1,400 to most Americans, CNBC. In 2020, the US government spent $2 trillion in March to give cash payments of $1,200 for individuals and $500 added for every child, as well as grants to various sectors, CNBC, and another $900 billion in December which provided $600 to individuals, CNN. In India, Prime Minister Narendra Modi announced a grand package of Rs 20 trillion to stimulate the economy in May last year, Hindustan Times (HT). This was announced in 5 tranches over 5 days by Sitharaman. "Dubbed Atmanirbhar Bharat Abhiyan, this Covid relief package puts bold reforms at the heart of Modi's stated plan to make India self-reliant so that any other crisis that may emerge in future could be efficiently tackled," ET. However, calculations of hours of drama played out over 5 days showed that fiscal spending would be Rs 1.50 trillion which was 0.75% of the GDP, ET. "A large part of the rest of the package is actually loans provided by banks, many of them without collateral, leveraging $105 billion of liquidity provided by the central bank, government officials said," ET. The Reserve Bank (RBI) has maintained a negative real interest for the last one year and has resorted to quantitative easing under the guise of Government Securities Acquisition Programme (G-SAP) to flood the economy with liquidity, The Indian Express. The Monetary Policy Committee (MPC) of the RBI kept the policy rate unchanged at 4% and Governor Shaktikanta Das announced that the central bank would purchase (government) bonds worth Rs 1.20 lakh crore (Rs 1.20 trillion) under GSAP 2.0 from July to September," ET. Cheap loans have been utilised by companies to reduce their debts. "An analysis of the top 15 sectors, representing more than 1,000 publicly traded firms, by research arm of State Bank of india (SBI), showed companies reduced debt of more than Rs 1.7 trillion in FY21," Mint. Meanwhile, "India's debt soared to 58.8% of the gross domestic product in the fiscal year ended March from 51.6% a year ago as the economic contraction forced the government to borrow a record amount to meet revenue shortfall, finance ministry data showed, prompting experts to raise concerns over debt sustainability in the medium term," HT. Why so? "India's GDP -- at a high of 7-8% when Mr Modi took office -- had fallen to its lowest in a decade -- 3.1% -- by the fourth quarter of 2019-20," BBC. Just as people with premorbid conditions were more likely to die of the coronavirus, so the premorbid Indian economy is gasping due to the virus. All down to the government and RBI.

May not be what it seems.

"J&K's (Jammu and Kashmir) residents may not have been completely accepting of the loss of full statehood along with Article 370, but they too know changing times call for changing resolutions," wrote Shashi Shekhar, after his visit to the valley in March where he found "that people were fed up with violence, and the young felt that this was crippling their chances at a normal life". Article 370 allowed the state "its own constitution, a separate flag and freedom to make laws" and also to "bar Indians from outside the state from purchasing property or settling there", BBC. Article 35A "defined a permanent resident as someone who was a state subject on May 14, 1954, or who has been a resident of the state for 10 years", and, hence, stopped Indians from outside J&K from acquiring property or applying for jobs with the state government, Economic Times (ET). Both Articles 370 and 35A were revoked in August 2019, all political leaders in Kashmir were arrested and telecom and internet services were cut off, (ET). A curfew was imposed on all of Kashmir and citizens prevented from traveling or meeting, wikipedia. The coronavirus outbreak resulted in a lockdown just as schools and colleges were opening up, India Today. Last week Prime Minister Narendra Modi held a meeting with politicians of all parties from J&K where he proposed new elections after delimitation, which means creating new constituencies for the assembly, NDTV. Why? "On the face of it, the external environment -- in which Pakistan might be in the driving seat in Kabul through the proxy of the Taliban before the end of this year, the situation on the Line of Actual Control where the Chinese have adamantly stayed put, the spectre of a two-front war, therefore the need to strengthen the Line of Control and begin a dialogue with Pakistan, as well as remove Kashmir from the agenda of US Congressional hearings -- does present a compelling package of national security reasons for the sudden decision to engage these political parties after two years of saying they don't matter," wrote Nirupama Subramanian. "The Union government's 'historic' decision to bifurcate Jammu and Kashmir and Ladakh as two separate territories have bolstered national security and led to a major reduction in terrorist activities, Defence Minister Rajnath Singh said on Monday," ET. "In a significant development having far-reaching ramifications in respect of strategic alignments in South Asia, both India and Pakistan have agreed to 'mutually beneficial and sustainable peace' along the borders from the midnight of February 24/25 2021," ET. In April, President Joe Biden announced complete withdrawal of all US troops from Afghanistan, starting May 1 and ending by September 11, NBC News. "The Taliban are advancing at lightning speed across Afghanistan as US troops withdraw. They now control a third of the country, are fighting for the control of 42 percent more -- and may even be slowing their advance on purpose," NBC. "India's August 2019 move in Kashmir is stuck in Pakistan's throat. It can neither swallow it nor spit it out. Pakistan's current Kashmir debate is about finding a way out," wrote C Raja Mohan. Maybe not. Pakistan has been stuck on the grey list of the Financial Action Task Force since 2008 because of hosting terrorist groups on its territory and has suffered a loss of $38 billion to its economy in all that time, "according to a research paper published by the Islamabad-based independent think-tank, Tabadlab", ET. Now it has secured its northwest border as the Taliban has become respectable with both the US and India negotiating directly with the terrorist group, Prof Harsh V Pant and Kriti M Shah. India has had to shift 50,000 troops to its border with China so that we have 200,000 troops on that border, ET. "Two explosives laden drones crashed into the IAF station at Jammu airport in the early hours of Sunday, ET. A Special Police Officer (SPO), his wife and daughter were gunned down at 11 PM inside their home two days back, ET. India is facing two enemies. Peace in Kashmir is imperative. Modi needs help of Kashmir politicians.