Manageable for whom?

"US employers continued to hire at a solid pace and the jobless rate unexpectedly fell to 3.5%, matching the lowest since 1969 and putting an inflation-focused Fed on course for another outsize interest-rate hike next month." Bloomberg. In Turkey, "Consumer prices rose 83.5% in September on an annual basis," "The slide in Swedish home prices deepened in September," "UK corporate insolvencies in the second quarter reached their highest since 2009," "Israel's central bank raised interest rates highest since 2011. New Zealand, Ghana and Peru also hiked, while Poland unexpectedly held rates steady." Meanwhile, "India's retail inflation accelerated to a five-month high 7.30% in September due to surging food prices, staying well above Reserve Bank of India's (RBI) upper tolerance band for a ninth month, a Reuters poll found." "India's growth rate for FY24 (1 April 2023-31 March 2024) is likely to witness a sharp moderation to 5.2 percent as compared to FY23, said Japanese brokerage Nomura." ET. Nomura predicts FY23 GDP growth at 7% in line with RBI forecast. Growth may be slowing already. "There has been a decline of 11.80 percent in Indians searching for retail jobs from August 2021 to August this year, according to a report." ET.  "As many as 347 people have died while cleaning sewers and septic tanks in the last five years, with Uttar Pradesh, Tamil Nadu and Delhi accounting for 40% of these fatalities, according to government data." TOI. Clearly people are forced into this dangerous, disgusting work because there are no jobs but, in a disgraceful, sly effort to rid themselves of any responsibility, politicians have passed a law punishing anyone employing humans for this work. "The Finance Ministry...informed that India's direct tax collection surged 24 percent to Rs 8.98 lakh crore (Rs 8.98 trillion) between April 1-October 8, 2022." ET. " Tax collection is an indicator of economic activity in any country. But in India, the robust collection was despite a slowdown in industrial production and exports." "The rural markets witnessed a 5% decline in monthly purchases of essential items, inlcuding cooking oils, laundry products, biscuits and chocolates, besides personal hygiene products such as toilet soaps, said Rural Barometer Report." ET. Soaring prices resulted in "Revenue from Goods and Services Tax (GST) in September rose 26% year-on-year to Rs 1.48 lakh crore." HT. On the other hand, "Consumer-goods makers are reporting robust demand for items priced nearly $2,000 in a nation where per-capita income is just a tad above that level." ET. "Inflation is at a manageable level, finance minister Nirmala Sitharaman said." ET. Biscuits too expensive, no problem. Let them eat cake.

No need for actual data.

"New Delhi, December 16, 2020 - The Government of India and the World Bank today signed a $400 million project to support India's efforts at providing social assistance to the poor and vulnerable households, severely impacted by the Covid-19 pandemic." World Bank. "The first operation of $750 million was approved in May 2020. It enabled immediate cash transfers to about 320 million individual bank accounts identified under the pre-existing Pradhan Mantri Garib Kalyan Yojana (PMGKY) and additional food rations for about 800 million individuals." "A study by the World Bank has concluded that nearly 80% (56 million out of a total of 70 million) of people who slipped into poverty in 2020 due to the Covid-19 pandemic hailed from India." The Wire. "Since 2011, the Indian government has stopped publishing data on poverty." "It noted that due to lack of official data, the World Bank had relied upon the findings of the Centre for Monitoring Indian Economy's (CMIE's) Consumer Pyramid Household Survey (CPHS)." So, the World Bank lent us $1.15 billion ($115 crore) on asking. Not just poverty we do not as yet know how many died of Covid. "More than 4.7 million (47 lakhs) people in India - nearly ten times higher than official records suggest - are thought to have died because of Covid-19, according to a new World Health Organization (WHO) report." BBC. India officially reported just 481,000 deaths from 1 January 2020 to 31 December 2021. "So, we have a uniquely broken death-recording apparatus in the country. The CRS (civil registration system) fails to capture mortality among the poor, among women and among children. The SRS (Sample Registration System) fails to capture deaths among the non-poor and adult men," wrote Pramit Bhattacharya. The goods and services tax (GST) collection hit a record Rs 1,67,540 crore (Rs 1.67540 trillion) in April 2022, suggesting a booming economy. BS. This is supported by, "India's factory output, measured in terms of Index of Industrial Production (IIP) accelerated by 7.1% in April as against 1.9% in March 2022." BS. But, is it? "In a 30 August research note, Credit Suisse analysts Neelkanth Mishra, Abhay Khaitan and Prateek Ancha show that the IIP has consistently understated growth in industrial output over the past decade," wrote Bhattacharya. "A dynamic business register that is able to capture key attributes of all firms operating across sectors can help produce better indices for tracking both industrial and services activity." "Today, they use a 'jugaad' (improvised) method." Of great concern, "Multiple revisions by the Reserve Bank of India in its projections for growth and inflation have caused concern within the government about these being off the mark from actual numbers." TIE. Two ministries "have held internal consultations for developing a system for projecting price trends and growth forecasts, distinct from the actual data collection." How will they make projections without actual data? Won't it be complete fiction? Instead of a partial one. 

All about numbers.

"India's growth story will be second to none in the world," said Union Minister Piyush Goyal. And "India will be a USD 30 trillion economy by 2047 by the time it completes 100 years of independence." "Based on available data a good case can be made that growth would touch the 8% mark in the current fiscal year and sustain at a 7-8% rate in the medium term. By my calculation, the country would become the third largest in the world by the end of 2027-28 if not sooner," Prof Arvind Panagariya went one better. Becoming the richest country in the world attracts attention. "The European Union (EU) has withdrawn preferential tariffs for several Indian imports, including textiles and apparel, chemicals, leather works, gems and jewelery products and railway equipment, reducing some of the advantage to goods shipped from the country." TOI. "The World Bank trimmed India's growth forecast for this financial year by a full percentage point," Reuters. "India's forecast was trimmed to 6.5% from 7.5%." "Last week, the Reserve Bank of India (RBI) cut its growth forecast to 7% from an earlier estimate of 7.2% after raising the benchmark repo rate by 50 basis points to 5.9% as it battles to contain high inflation - seen to remain above 6% until early 2023." The question is: how much above 6%? Both 6.1% and 10% are above 6%. A lot depends on the price of oil. "A panel of OPEC+ ministers recommended a cut to the group's output limits of 2 million barrels a day as they seek to halt a slide in oil prices caused by the weakening global economy." ET. "A reduction of 2 million barrels a day in the group's output target, shared pro rata, would require just eight countries to reduce actual production and would deliver a real cut of 880,000 barrels a day according to Bloomberg calculations." "The Indian government has a moral duty to provide energy to its citizens and it will continue to buy oil from wherever it has to, Union Minister of Petroleum and Natural Gas Hardeep Singh Puri said..., asserting that no country has told India to stop buying oil from Russia." "India's crude oil imports from Russia have jumped over 50 times since April and now it makes up for 10 percent of all crude bought from overseas." Of course, no one can tell us where to buy our oil but "The US...asked its citizens to exercise 'increased caution' while traveling to India due to 'crime and terrorism' and advised them not to travel to the union territory of Jammu and Kashmir." ET. Earlier, "In what appears to be a bizarre travel advisory, Canada has advised its citizens to avoid all travel to areas in states of Gujarat, Punjab and Rajasthan, which share a border with Pakistan due to the 'presence of landmines' and 'unpredictable security situation'." ET. We care about energy, the US cares about inflation. "US employers hired more workers than expected in September, while the unemployment rate dropped to 3.5%." Reuters. "The Dow Jones Industrial Average fell 502 points, or 1.68%, while the Nasdaq slipped 2.72%." ET. $30 trillion or third biggest, which to aim for?

It's all connected

"There is a 1958 Act on salaries and service conditions of Supreme Court (SC) judges. Other than salaries and pensions, this has provisions on leave and leave encashment, medical facilities, conveyance and sumptuary allowance," wrote Bibek Debroy and Aditya Sinha. But, "There are more than 72,000 cases pending before SC, more than 10,000 pending for more than 10 years. Reflecting implicit prioritisation, SC has chosen to decide whether ludo, travel chess, draughts and junior monopoly are toys, puzzles or games." Pretty scathing. "The core issue is environment versus development," wrote Pradeep S Mehta. "The hardships of prioritizing the environment over development are largely experienced by those who have a minimal role in ecological degradation." "Such decisions are becoming increasingly visible in judiciary as well." Mehta refers to the Sterlite copper plant in Thoothukudi, Tamil Nadu which was shut down after protests against pollution of air and water, but not before 13 people had been gunned down and over one hundred injured. wikipedia. Post-mortem examination revealed that 12 of the 13 had been shot in the head and chest while half were shot from behind. TNIE. "Adding insult to injury, the plant's closure reduced the country's production of copper by more than 40%. From being a net exporter, India has become a net importer of the metal, thus impacting the country's balance of payments." So, the town's population should be sacrificed to help the company and the government. Curious reason. The environment is being destroyed by organized crime who resort to extreme violence if opposed. "At least 193 people have died during illegal sand mining operations across India from January 2019 to November 15, 2020, according to a report collated by a network of organizations." TNIE. "In Uttarakhand, several important bridges collapsed when sand was mined excessively nearby in 2021. Sand mining contributes to, and worsens, the effects of climate catastrophes too. Sand is required for building. After every climate disaster, it is also required for re-building, further increasing environmental and human costs." Forbes. Sand is required in concrete which is essential in construction. Illegal construction is rampant in India. On 28 August, two towers in Noida, near Delhi, were demolished, as ordered by the Supreme Court, because extra floors had been added without permission. TNIE. Illegal construction requires illegal sand which results in murder. Buildings are visible and take months to construct. Why are they not stopped by officials in all this time? Because, they make huge fortunes on the side, and construction employs thousands of low-skill people, who constitute the 'vote-bank'. indiaspend. Who can object to the poor finding employment to provide for their families? "Climate science predicts that India may be one of the first places to experience heat waves that cross the survivability threshold for a healthy human being resting in the shade. The already vulnerable parts of the population could be the most affected." WEF. In other words, the poor will die in droves. Illegal acts are connected. A break in the chain may help.

Racing ahead of others.

For India, "Based on available data, a good case can be made that growth would touch the 8% mark in the current fiscal year and sustain at a 7-8% rate in the medium term," wrote Prof Arvind Panagariya. "By my calculation, the country would become the third largest in the world by the end of 2027-28 if not sooner." China and the US better watch out. Because, the GDP may grow at a total of 18.5% in the 2nd, 3rd and 4th quarters of this financial year, scope for huge catch-up growth in services, falling unemployment rates, contrary to claims based on faulty surveys, and economic reforms. Also, global merchandise trade was $22 trillion in 2021 compared to just $6.5 trillion in 2000 when China was entering global markets in a big way. "In a world tipping towards recession and higher inflation: Vietnam, Indonesia, India, Greece, Portugal, Saudi Arabia and Japan" "share some combination of relatively strong growth, moderate inflation and strong stock market returns - compared to other countries," wrote Ruchir Sharma. "Though India's growth is always flattered by its low base, its economy will continue to be one of the world's fastest growing." Despite "high inflation and high twin deficits, India has been called a rare shining spot" because the GDP is expected to grow at 7%, foreign direct investment (FDI) was $18.9 billion in April-July 2022, foreign portfolio investors (FPI) bought $7.5 billion worth in July-September and "Banks are lending vigorously and credit growth accelerated by 16.2% as on September 9, as against 6.7% last year," wrote Amitabh Chaudhury. Prospects for the US and Europe are decidedly gloomy, wrote Prof Nouriel Roubini. "Since World War II, there has never been a case where the Fed achieved a soft landing with inflation above 5% (it is currently above 8%) and unemployment below 5% (it is currently 3.7%)." Between January and June 2022, US and global equity indices have fallen 20% while long-term bond yields have risen from 1.5% to 3.5% as "highly indebted firms, shadow banks, households, governments and countries are entering a debt distress. The crisis is here." "Data from the Institute of International Finance suggests that global debt as of March 2022 stood at $305 trillion, or 348% of the world's gross domestic product (GDP), up from 286% in 2007," wrote Vivek Kaul. As central banks printed money to bring down interest rates to extremely low levels it "led to tremendous misallocations of capital". Finally, the US Fed has shrunk its balance sheet from $8.96 trillion to $8.79 trillion, "But the money printed by other rich-world central banks, running into trillions of units of their respective currencies, is still floating around." India's "Gross fixed capital formation (GFCF), as a proportion of GDP, rose to 29.2% in the three months till end-June" "And yet, despite New Delhi's large outlays, private investment demand seems resolutely inelastic to inducements; the private sector remains investment shy despite data that suggests capacity utilization has begun hitting a wall." Mint. Everything seems rosy. Why are people reluctant?  

Statistics and story.

"The Reserve Bank of India's (RBI) rate-setting panel...increased the benchmark rate by 50 basis points, in a bid to bring inflation to its comfort zone and in line with aggressive policy tightening by key global central banks." ET. "The Monetary Policy Committee (MPC) increased the repo rate, or the key rate at which the RBI lends short term funds to commercial banks, to 5.9% from 5.4%. It also decided to remain focused on withdrawal of accommodative stance." "The real GDP for FY23 has been revised downwards to 7.0% from 7.2% projected earlier." Growth for Q1FY24 (April-June 2023) has been revised to 7.2%." ET. Real GDP is derived from nominal GDP by dividing by a GDP deflator to adjust for inflation. Investopedia. "The inflation projection for FY23 has been retained at 6.7%." "Price-tags of daily groceries from oil and spices to rice and hair oils have risen between 10% and 22% since January this year, according to retail analytics platform Bizom, on the back of higher commodity rates. This has impacted volume sales, particularly in rural markets dragging down the market growth." ET. "The rural markets witnessed a 5% decline in monthly purchases of essential items, including cooking oils, laundry products, biscuits and chocolates, besides personal hygiene products such as toilet soaps, said the Rural Barometer Report." Mint. As expected, 'experts' eulogized the RBI's move, with stock markets zooming to dizzying heights. "Sensex rallied over 700 points while Nifty reclaimed the coveted 17,000 mark as banks and financials led the bull charge." ET. Debt fund managers were non-committal, preferring to talk about international commodity prices and actions of other central banks. ET. The rich celebrate while ordinary folk cut consumption. All this may be fairly straightforward, but it begins to get weird. "India's current account deficit (CAD) widened to 2.8% of gross domestic product (GDP) in the three months through June, up from 1.5% in the March quarter, primarily due to a widening of the merchandise trade deficit and an increase in net outgo of interest income payments. The CAD increased to $23.9 billion in the June quarter of FY23" Mint. However, the RBI data "showed the country's balance of payments came at a surplus of $4.6 billion for the quarter," even though "Robust services revenue led to CAD coming in less than forecasts" at $23.9 billion. ET. "About 67% of the decline in reserves during the current financial year is due to valuation changes arising from a appreciating US dollar and higher US bond yields," said RBI Governor Shaktikanta Das. "The Indian rupee has fared better than many other currencies but it has cost the RBI more than two-thirds of its warchest in defending it, Governor Das said." CNBC. "Multiple revisions by the RBI in its projections for growth and inflation have caused concern within the government about these being off the mark from actual numbers." TIE. Because, "India's growth story will be second to none in the world: Piyush Goyal." ET. Forget statistics. Just stick to the story.

Up the GII.

 "India has entered the top 40 countries in the Global Innovation Index (GII) for the first time, owing to increases in information and communication technologies (ICT) services exports," as "The World Intellectual Property Organization (WIPO) said on Thursday (yesterday) that India's six-notch jump to 40th place in the 132 nation GII in 2022 from 46th place in 2021 elevated it to the topmost innovative lower middle-income country in the world, surpassing Vietnam." Vietnam has a population estimated at 10.4 million in 2022, with nominal GDP of $409 billion and GDP per capita of $4,122, wikipedia. India has a population of about 1400 million, nominal GDP of $3.5 trillion, wikipedia, while GDP per capita was $2,277 in 2021. World Bank. While beating tiny Vietnam is indeed laudable, Indian students would prefer to study and work abroad if at all possible. "While countries like Russia, China, and Australia are popular choices for technical courses among Indian students, a large number of them have also turned to universities in the US, the UK, and Canada for programs that will fetch them work permit for global technical jobs. According to Canada's Immigration, Refugee and Citizenship data, the number of students studying in the country has increased by a whopping 350 percent between 2015-16 and 2019-20 academic years." ET. The labor force participation rate (LFPR), which is defined as the section of working population in the age group of 16-64 in the economy currently employed or seeking employment, ET, was 73.4 for males, just 20.4 for females and 47.3 combined, while the worker population ration (WPR) was 67.7 for males, a dismal 18.3 for females  and 43.4 combined in the January-March 2022 period, pib.gov.in. Which means that more than half the population of India is not working. India's employment elasticity, which is the percentage change in employment associated with 1% change in GDP, peaked at 0.31 by 2002, plunged to a negative -0.04 in 2014 before recovering modestly. DH. "In fact, the average elasticity between 2006 and 2018 was a mere 0.01." "An attendant problem of this prolonged period of low to no employment generation is that currently, India has virtually the largest share of discouraged workers in the world." On the other hand, "Pay hikes on an average in India are likely to increase by 10.4% in 2023, compared to an actual increase of 10.6% to date in 2022, which is slightly higher than the 9.9% increase projected in February, according to a survey by Aon plc, a global professional services firm." ET. Not surprising, "Household spending trends ahead of India's main festive season are flashing warning signs of a widening chasm in demand recovery as inflation hovers around 7% and unemployment keeps on rising. Consumer-goods makers are reporting robust demand for items priced nearly $2,000 in a nation where per capita income is just a tad above that level, while industry data on sales of budget phones priced below $100 and motorcycles, an indicator of rural demand, are showing a weaker trend." ET. Most have-nots, a few have-lots. Perhaps those in GII.

Race to be fifth.

"I know an unpopular economic policy when I see one. And the consensus among economists about the tax cuts and deregulations announced last week by UK Prime Minister Liz Truss is almost universally negative," wrote Prof Tyler Cowen. In an immediate reaction the British currency the sterling fell by 4.85% to $1.037 and "British bond prices were set for their biggest slump of any calendar month since at least 1957." Reuters. Bond prices are inversely related to yields, Investopedia, so a fall in prices means higher borrowing costs for the government. This also signals that markets expect inflation to increase. The rate of inflation in the UK was 9.87% year-on-year in August, a tad lower than 10.101% in July. RI. A bigger danger was that the fall in bond prices slashed asset value of pension funds which invest in government bonds because of their safety. "Pension funds, which invest in bonds, were forced to start selling, sparking fears of a fresh market downturn." BBC. The fear was that falling value of assets could result in pension funds being forced to default on their debts. So the Bank of England pledged to buy 65 billion pounds worth of government bonds which would increase their price. This is good old 'quantitative easing' in which central banks buy government securities to encourage lending by reducing borrowing costs and increasing liquidity in banks. But, won't this increase inflation? Prof Cowen is baffled by the panic. Current yields are 4.5% on two-year security and 4.3% on 30-year security while core inflation was 6% for July and August. "In other words, the UK government is borrowing at about a negative 2% real rate of interest right now." Despite the cut in top rate of income tax from 45% to 40% it is still higher than the top rate of 37% in the US. So, why such a reaction? India's economy is now larger than that of the UK. "On September 2, the International Monetary Fund (IMF) announced that India has surged past the United Kingdom to become the fifth largest economy in the world." HT. "India increased its lead over the UK in the quarter ending March, IMF data showed." If India's economy is booming the rupee should be stronger. But, "In a battle that has so far failed to staunch the rupee's fall to a record low against the greenback, the RBI has drawn down its foreign exchange reserves by nearly $100 billion to $545 billion from $642 billion a year ago, and more is coming." Mint. "The Reserve Bank of India (RBI) is said to be contemplating several bespoke measures, such as opening a special window for oil importers and reducing the hedging costs for foreign-currency depositors, to minimise the pace of decline in the rupee against the surging US dollar." ET. "The RBI has used its forex stockpile across platforms - spot, futures, forwards and non-deliverable forwards markets." "The Indian rupee has held back very well against the US dollar compared to other currencies, Finance Minister Nirmala Sitharaman said." ET. That will make our exports more expensive compared to our competitors. Little surprise that exports contracted by 1.15% to $33 billion while the trade deficit doubled to $28.68 billion in August. BT. Which will win - UK or India, pound or rupee? Who comes fifth?      

And, the devil take the hindmost.

"Chinese President Xi Jinping reappeared on state television Tuesday (yesterday) after a several-day absence from public view that sparked rumors about the 69-year-old leader's political fortunes. Xi was shown visiting a display at the Beijing Exhibition Hall on the theme of 'Forging Ahead into the New Era." abcnews. "China's focus of political goals like Covid Zero over economic objectives is making the country less appealing to European companies as a place to invest, a business group said, calling on Beijing to refocus on reform." ET. "The OECD slashed GDP forecasts for most of the G-20, with only Indonesia featuring a moderately higher outlook." ET. "The global economy will expand just 2.2% in 2023," so "The new projection for the year means output will be $2.8 trillion less than officials had predicted at the end of 2021." "A downturn in business activity across the euro zone deepened in September, according to a survey which showed the economy was likely entering a recession as consumers rein in spending amid a cost of living crisis." ET. "S&P Global's flash Composite Managers' Index (PMI), seen as a good gauge of overall economic health, fell to 48.2 in September from 48.9 in August." "A PMI reading under 50 represents a contraction, and a reading at 50 indicates no change." Investopedia. "The downturn in German business activity deepened in September," as the PMI "fell to 45.9 in September from August's final reading of 46.9." Reuters. The UK currency, the sterling fell sharply. "Sterling has weakened more than 20% against the dollar this year and it is set for its biggest monthly decline since November 2008." Reuters. Partly, this is due to a massive reduction in taxes in a mini-budget unveiled by the new Chancellor of the Exchequer Kwasi Kwarteng. wikipedia. Partly, this is due to the strength of the US dollar. "Fueled by hawkish Federal Reserve policy, US economic strength and investors in search of a haven from market swoons, the greenback is surging relentlessly against counterparts big and small by the most in decades." ET. What about the US? Is it immune? "US GDP has fallen for two consecutive quarters - 1.6% during the first quarter of 2022, and 0.6% the next. In most countries, that's a recession. Just not in the US." BBC. "US consumers buying cars and going to restaurants and bars in August drove a surprise bounce in retail sales, even as spending on gasoline fell as prices at the pump dropped." ET. "Every recession has led to loss of factory jobs that never returned. But the recovery from the pandemic recession has been different: American manufacturers have now added enough jobs to regain all that they shed - and then some." ET. However, some forecast a grim future. "As in the 1970s, persistent and repeated negative supply shocks will combine with loose monetary, fiscal and credit policies to produce stagflation. Moreover, high debt ratios will create the conditions for stagflationary debt crises," predicted Prof Nouriel Roubini. Each nation has to look out for itself. And, the devil take the hindmost.        

Middle income.

"India is expected to add another 183 million people to the working age group of 15-64 years between 2020 and 2050," wrote Prof Amit Kapoor & Bibek Debroy. "According to the World Economic Forum, by 2030, India is projected to be led by the middle class. In 2030, around 80% of households will be middle-income, up from 50% today, with the middle-class expected to drive 75% of consumer spending." Provided they are "equipped holistically in terms of education, skills and health". But, how? "According to the report (released by Mr Debroy), income data from the Periodic Labour Force Survey (PLFS) 2019-20 showed that a monthly income salary of Rs 25,000 (about $312) is already among the top 10 percent of total incomes earned," "while the top 10 percent accounts for one-third of all incomes earned". "If an amount like this comes in the top 10 percentile, then the bottom-most condition cannot be imagined." TOI. "The all-India female labour force participation rate (LFPR) in usual status has increased 2.3% in 2021 to 25.1% as compared to 22.8% a year ago, shows the PLFS annual report for July 2020-June 2021." TNIE. Point to note is that LFPR of rural women increased 3% to 27.7%, while that of urban women rose 0.1% to a dismal 18.6%. According to Prof Himanshu, this is an indication of rural distress with the elderly and women forced to work to augment household income. "Most of these indicators are showing trends and patterns which are similar to what was observed during the last period of severe distress in India's economy, between 1999-00 and 2004-05." These are women who survived birth. "Uttarakhand's sex ratio (number of females per 1000 males) at birth was found to be the worst in the country at 844, and Kerala's the best, at 974, according to the Sample Registration System (SRS) 2020, released by the Registrar General of India." TOI. Normal ratio at birth is around 105 males for every 100 females, wikipedia, which works out to 952 females per 1000 males. "Data shows that southern Indian states continue to outperform the country in health, education and economic opportunities." BBC. Populations in southern states have been falling. They pay more taxes because of their prosperity but get less from the Center because of fewer people. If delimitation of seats, which means reallocation of seats according to population, in parliament goes ahead in 2026 it will mean "with revenue loss and lack of freedom to make their own policies, the prosperous south may have fewer seats in parliament in future." Also our borders are insecure. "Locals near India's border with China in the mountainous region of Ladakh have claimed that the Indian government 'ceded' land to China after both sides agreed to withdraw troops from contentious ares earlier this month, The Guardian reported." Dawn. May be because, "Prime Minister Narendra Modi's push to boost domestic manufacturing of defense systems is leaving India vulnerable to persistent threats from China and Pakistan, according to officials with knowledge of the matter." DH. Middle income is between $1,036 and $12,535. Which figure are we aiming for? 

Going down.

"Sterling slumped to a record low on Monday (today), prompting speculation of an emergency response from the Bank of England, as confidence evaporated in Britain's plan to borrow its way out of trouble, with spooked investors piling into US dollars." Reuters. "The pound plunged nearly 5% at one point to $1.0327, breaking below 1985 lows." "The euro wobbled to a two-decade low at 0.9660 as risks rise of the war escalating in Ukraine, before steadying at $0.9686." "Black Wednesday refers to September 16, 1992, when a collapse in the pound sterling forced Britain to withdraw from the European Exchange Rate Mechanism (ERM)." Investopedia. George Soros made $1 billion betting against the pound and the Conservative Party of John Major lost the next general election in 1997 by a landslide. On 5 September 2022, Liz Truss won the Conservative Party election to become the Prime Minister of Britain by promising tax cuts. BBC. On 15 September, "The dollar reached as high as 7.0188 (Chinese) yuan in offshore trade, its highest since July 2020, and was last up 0.35% at 6.995." ET. The yuan, or renminbi, is trading at 7.15 to the dollar this morning, xe.com. On 7 September, "The US currency soared as high as 144.99 (Japanese) yen, hitting the level for the first time since August 1998. It is now within a large leap of its 1998 high of 147.43." Reuters. "The Indian rupee has held back very well against the dollar compared to other currencies, Finance Minister Nirmala Sitharaman said." ET. That is only because the Reserve Bank (RBI) has been selling dollars and buying rupees to keep it higher. It sold $5.22 billion in the week ending 16 September. ET. We don't know how much it sold last week. The idea is that a stronger rupee reduces prices of imports and keeps a lid on inflation. "A prolonged period of high and rising inflation weakens the rupee by hurting India's growth and competitiveness and a declining exchange rate sets of inflation because of higher import prices," wrote Deepa Vasudevan. "Sustained high inflation in the US means the Federal Reserve may continue to tighten rates," so the RBI should also keep pace with the Fed which will control inflation and "attract foreign investments and consequently dollar inflows, which will support the rupee". The problem is that the government won't allow the RBI to increase rates as it should, TIE, because of a mythical belief that low interest rates stimulate growth and economic growth wins elections. That high prices will hammer growth by stifling consumer spending seems to escape them. Keeping the rupee stronger than our competitors has consequences. "In 2021-22, the trade deficit between India and China rose to $72.9 billion." The Print. A weaker yuan will only make it worse by sucking in cheaper imports. How long can the RBI fight the dollar? "Amid a surge in US bond yields and the US dollar index, the rupee on Monday (today) opened 0.68% lower to hit a fresh record low of 81.55 against the greenback." ET. A finger in the dyke will fail. We need concrete. Action.

Inscrutable China.

"The internet is abuzz with speculation about China President Xi Jinping being under house arrest. According to several posts on social media, Xi Jinping has been removed as the head of China's People's Liberation Army (PLA) and has been placed under house arrest. Neither the country's ruling Chinese Communist Party nor the state media have given an official confirmation yet." NDTV. "The video of military vehicles moving to Beijing comes immediately after the grounding of 59 percent of the flights in the country and the jailings of senior officials. There's a lot of smoke, which means there is a fire somewhere inside the CCP. China is unstable," said author Gordon G Chang. However, "China expert Aadil Brar noted that Xi is likely in quarantine after returning from the Shanghai Cooperation Organisation (SCO) Summit, which would explain his absence from public affairs at the moment. Brar also shared flight data showing there is no disruption of flights. He further shared visuals of public briefings by senior Chinese officials, suggesting the government is functioning normally." Outlook. In March 2018, "China has approved the removal of the two-term limit on the presidency, effectively allowing Xi Jinping to remain in power for life." BBC. "China had imposed a two-term limit on its president since the 1990s." In 2016, "China's Communist Party gave President Xi Jinping the title of 'core' leader..., putting him on par with past strongmen like Mao Zedong and Deng Xiaoping, but it signaled his power would not be absolute." Reuters. However, retired party leaders like 94-year old former Premier Zhu Rongji voiced opposition to Xi's plan to be elected for a third term this year. HT. Xi has done the disappearing act before. "In August 2012, Chinese politician Xi Jinping suddenly disappeared for three weeks. China's 18th Party Congress was weeks away, an event where Xi would be anointed as China's next leader." npr. Apparently, he was consolidating support among party elders for his ant-corruption drive which would put any opponents behind bars. Xi could be trying to generate support for his third term this time and he could have ordered PLA vehicles to move to Beijing to protect him till the Party Congress. "A novel study in China led by MIT scholars shows that anticorruption punishments meted out by government authorities receive significant support among citizens," and "The findings help explain how authoritarian governments endure, not merely based on domination and fear, but as regimes generating positive public support over time." MIT News. "By 2017, 15,000 party members had received punishment for violations of CCP discipline, more than the number punished during the Tiananmen purge of 1989-1992. Another highlight of the political discipline campaign was the expulsion of 63 military generals." Diplomat. Xi Jinping has every reason to hang on to power for life. His opponents want revenge. Xi could be trying to endplay his opponents. Or, he is down.  

A sweet spot.

"I believe that India is in a sweet spot both as an economy which will benefit from an advanced country recession and a market which will benefit from flows in a decreasing oil price scenario. India is in a very sweet spot at this point in time," said Sunil Subramaniam, MD & CEO, Sundaram Mutual. The US Federal Reserve hiked interest rate by 75 basis points for the third time this year on 21 September and committed to bringing inflation down to 2%. BT. "The median projection for the Fed rate is now 4.4 percent at the end of this year." "When interest rates are hiked it is killing demand. So naturally US economic growth will slow down and ultimately slip into recession. But from an Indian economy perspective we are fairly decoupled from America because we do not have too much exports to America compared to the size of our GDP." "The United States has remained India's largest trading partner, with exports of goods and services to the United States worth $102.3 billion." ITA. India imported goods and services worth $56.8 billion from the US in 2021, giving us a positive trade balance of $45.5 billion. "Indian origin FDI into the United States was valued at $12.7 billion in 2020," while "FDI from the United States into India was valued at $41.9 billion in 2020." Strange that Subramaniam dismisses the US as not important when we are gaining in both balance of trade and FDI. There are five big positives for India if advanced economies go into recession. ET. Inflation will fall as commodity prices fall, the rupee will be stronger as we spend less dollars to buy cheaper oil, current account deficit will fall, more money will come into our markets because India's growth will be strongest and supply chains will shift from China to India. It's win, win, win, win, win for India. "We've never had QE (quantitative easing). So the Fed is acting literally in uncharted waters. There's never been global QT (quantitative tightening)," said JP Morgan Chase CEO Jamie Dimon. "India should strive to be the fastest growing economy on the planet for the next decade." "And the question you should always ask is, what are we doing to get there? We deserve it. Why are we not there?" "The government is in no hurry to push inflation - now hovering near 7% and eight-year highs - back to the central bank's 4% medium-term target, for fear that aggressive rate hikes could hurt economic growth, two sources with direct knowledge of the matter said." TOI. Instead, "India's foreign exchange reserves fell by $5.22 billion to 545.65 billion in the week ending September 16." ET. "India purchased some of the nation's most expensive liquefied natural gas shipments after Russian deliveries were canceled." ET. We are in a sweet spot. How sweet?  

Similar neighbors.

"In what is billed as its largest operation ever, the National Investigation Agency has launched search operations across 10 states against operatives of several suspicious groups, mainly the Popular Front of India (PFI), for supporting terrorism." DNA. "The agency in consonance with the Enforcement Directorate, has raided the houses of national, state and local leadership of PFI, officials said." "Over 100 PFI operatives have been arrested." 'The PFI came into being in South India in 2007 with the merger of three Muslim organisations: the National Democratic Front in Kerala, the Karnataka Forum for Dignity and Manitha Meethi Pasarai in Tamil Nadu." DH. "It is similar to right-wing outfits like the VHP (Vishwa Hindu Parishad), the Hindu Jagaran Vedika and RSS (Rashtriya Swayamsevak Sangh) in that it does social work for Muslims." "The RSS presents itself as a cultural, not a political, organization that nevertheless advocates a Hindu nationalistic agenda of hindutva or 'Hinduness'." Britannica. "Several of the major political leaders of India's Bharatiya Janata Party (BJP) were or still are members of the RSS." The PFI is blamed for organising protests against the Citizenship Amendment Act (CAA), which eases the path to citizenship of India for religious minorities from Pakistan, Afghanistan and Bangladesh. wikipedia. It does not apply to Muslims. On 13 September, "Parts of Kolkata turned into a battlefield after thousands of BJP workers took to the streets to protest against alleged corruption by the ruling Trinamul Congress government. A police vehicle was torched in Lalbazar area, while stones were pelted in Santragachhi amid clashes between the protesters and the police." HT. The PFI is charged with funding the riots in Delhi which began on 23 February 2020 after a speech by BJP leader Kapil Mishra against peaceful protests against the CAA by Muslim women. "Of the 53 people killed two-thirds were Muslims who were shot, slashed with repeated blows or set on fire." wikipedia. The PFI is blamed for bringing attention to a gang-rape and murder of a Dalit woman in UP on 14 September 2020. The Wire. "On the last day of September, India woke up to the disturbing news that authorities had forcibly cremated the body of a 19-year-old Dalit (formerly untouchable) woman who had alleged gang-rape and died a day earlier." BBC. The victim repeatedly reported that she was beaten up because she resisted rape but authorities kept denying it. BBC. "UP: Gang-raped & robbed, girl, 15, walks naked for 2km to reach home in Moradabad." TOI. Will they blame this on the PFI as well? Pakistani journalist Arifa Noor compares authoritarianism in Pakistan, Bangladesh and India. "Free speech and a free press are under attack in the entire region." "The more democratic dispensations in India and Bangladesh (compared to Pakistan) have not led to more democratic structures such as freedom of speech." Thankfully, she didn't compare incidence of gang-rape. We may win.

Adani wins over Bezos.

"The Federal Reserve on Wednesday (yesterday) raised its benchmark interest rates by another three-quarters of a percentage point" to take its "federal funds rate up to a range of 3%-3.25%, the highest it has been since early 2008." CNBC. Markets would have already priced in a 75 basis points hike after Fed Chair Jerome Powell's speech at Jackson Hole, Wyoming last month, promising aggressive rate hikes to control inflation. BS. But, US markets fell yesterday with all three indices falling by over 1.70%. Reuters. Because "Along with the massive rate increases, Fed officials signaled the intention of continuing to hike until the funds level hits a 'terminal rate', or end point, of 4.6% in 2023." "The 'dot plot' of individual members' expectations doesn't point to rate cuts until 2024." "Powell conceded that a recession is possible." The US may be intolerant of inflation but, "India's government is in no hurry to push inflation - now hovering near 7% and eight-year highs - back to the central bank's 4% medium-term target, for fear that aggressive rate hikes could hurt economic growth, two sources with direct knowledge of the matter said." ET. The Reserve Bank of India (RBI) has a mandate to keep inflation at 4% with a margin of 2% on either side till March 2026. ET. If the government is overriding the RBI in this vital function they should get rid of the Monetary Policy Committee and save a large sum of money in huge salaries and perks for these officials. "Higher rates hurt demand, inflate the loan rates for consumers, or the 'aam aadmi' (common man) in particular who feel more burdened when they are already paying over Rs 100 for a liter of petrol in many parts of the country." ET. That is a complete canard. The common man is more burdened by rising prices of items of daily use and nobody takes a bank loan to buy milk, rice or cooking oil. "And of course, higher rates increase the interest costs for corporates too." That is very true. "The recent acquisition by the Adani Group of the cement maker Holcim's India businesses is expected to add another Rs 40,000 crore (Rs 400 billion) to the conglomerate's debt taking it to approximately Rs 2.6 trillion, an analysis by Credit Suisse showed." TIE. As a result, "Creating wealth at an unprecedented speed of Rs 1,612 crore (Rs 16.12 billion) per day, billionaire Gautam Adani has more than doubled his wealth in the last one year to beat Amazon founder Jeff Bezos as the world's second-richest man, according to IIFL Wealth Hurun India Rich List 2022." ET. The rupee "hit a fresh record low of 80.285 against the dollar at open". ET. A weak rupee will boost inflation by increasing the cost of imports. Unless the RBI also matches US rate rises. Another smokescreen is to compare with other countries. Should we feel proud by comparing with failed states like Zimbabwe, Lebanon or Venezuela? Inflation may have jumped to 9.8% in August in Sweden but till last year Sweden had a negative interest rate, to discourage people from saving, Reuters, because its inflation was so low. Bluffing will not stop rising prices. Jeff Bezos loses because he is in America. Adani wins because he is in India.      

No worries.

"Stocks fell broadly in morning trading on Wall Street Tuesday (yesterday) ahead of a key decision on interest rates by the Federal Reserve." moneycontrol. "The Dow Jones Industrial Average fell 393 points, or 1.3%, to 30,629 and the Nasdaq fell 1%." "The yield on the 2-year Treasury, which tends to follow expectations for Fed action, rose to 3.97% from 3.95%," while "The 10-year yield, which influences mortgage rates, rose to 3.58% from 3.52%." Since yields on 10-year bonds are lower than yields on 2-year bonds, is this inversion of the yield curve? Does this mean the US is in recession? "The yield curve inverts when long-term interest rates drop below short-term rates, indicating that investors are moving money away from short-term bonds and into long-term ones. This suggests that the market as a whole is becoming more pessimistic about the economic prospects for the near future." Investopedia. "A popular rule of thumb is that two consecutive quarters of decline in gross domestic product (GDP) constitute a recession." Investopedia. "US GDP has fallen for two consecutive quarters - 1.6% during the first quarter of 2022, and 0.6% the next. In most countries, that's a recession. Just not in the US." BBC. Even as US markets fell, Indian stock markets rose by around 1%, as "Notwithstanding the rising yields and a stronger dollar, Foreign portfolio investors (FPIs) net bought shares worth Rs 1,196.19 crore (Rs 11.9619 billion), according to provisional data." ET. "The US dollar is experiencing a once-in-a-generation rally." Mint. "The dollar's rise this year is being fueled by the Federal Reserve's aggressive interest-rate increases, which have encouraged global investors to pull money to pull money out of other markets to invest in higher-yielding US assets." "It's early days yet," said Prof Raghuram Rajan. "We're going to be in a high-rates regime for some time. The fragilities will build up." "Much of the weakness across broader EM (emerging markets) - for example in the South African rand or the Indian rupee versus the dollar - reflects challenges that are qualitatively not dissimilar to many DMs (developing economies): Policy rate increases that have struggled to outpace the US Fed, for example, and shocks to energy prices that have exacerbated current account deficits. The challenge for these EMs is that weaker currencies complicate what is already a tough challenge of bringing inflation and inflation expectations under control." Goldman Sachs. The Reserve Bank of India has responded by selling dollars and buying rupees to keep the rupee falling below 80 to the dollar. "India's forex reserves have fallen to a two-year low of $550 billion from a peak of $642 billion in October 2021." ET. "Alongside its intervention in the spot market, the central bank's forward dollar holdings have fallen to $22 billion from $64 billion in April." The Fed doesn't seem worried about recession. Neither are we.  

Dollars instead of rupees.

"According to calculations by European thinktank Bregel, where countries like China, Brazil and the United States (US) focused anything from 60-90% of their pandemic response packages on fiscal spending, India's program allocated just 12% to this bucket," wrote Rajeev Mantri. Indeed, not only did the government refrain from increased spending, it sucked out "nearly Rs 8.02 lakh crore (Rs 8.02 trillion) from taxes on petrol and diesel during the last three fiscal years, of which more than Rs 3.71 lakh crore (Rs 3.71 trillion) was collected in FY 21 (1 April 2020-31 March 2021) alone, Finance Minister Nirmala Sitharaman informed Parliament" on 14 December 2021. ET. In April 2022, former Finance Minister P Chidambaram said that in the eight years of the Modi government, the central government collected Rs 26,51,919 crore as fuel taxes. "There are approximately 26 crore (260 million) families in India. That means from every family the central government has collected Rs 100,000 as fuel tax," he said. india.com. Even though the international price of crude oil has fluctuated the retail prices of petrol and diesel have been the same since 28 May because the government controlled oil marketing companies (OMCs) absorbed higher prices to prevent inflation from rising even higher, wrote Vivek Kaul. Now that the price of crude has fallen OMCs have maintained retail prices to make up for losses. The Reserve Bank (RBI) has been selling dollars to keep the exchange rate of the rupee below 80 to the dollar to reduce import cost of oil "The foreign currency assets of RBI have fallen from around $580 billion in September 2021 to around $490 billion." "India's central bank is using up its foreign exchange reserves at a quicker pace than during the taper-tantrum period in 2013 as it tries to prevent an overshoot in the rupee, but a larger pool of reserves may allow it to support the currency for some more time, economists said." BS. "Alongside its intervention in the spot market, the central bank's forward dollar holdings have fallen to $22 billion from $64 billion in April." Naturally, the rupee has appreciated against other currencies. "In inflation-adjusted real terms, the rupee has appreciated 8% against the (Chinese) yuan." "The dollar's rise this year is being fueled by the Federal Reserve's aggressive interest-rate increases, which have encouraged global investors to pull money out of other markets to invest in higher-yielding US assets." Mint. "For the US, a stronger dollar means cheaper imports, a tailwind for efforts to contain inflation, and record relative purchasing power for Americans." When the RBI sells dollars for rupees it creates a shortage of rupees in the market. "India's central bank may have to reverse its approach towards currency markets and liquidity management after an ungainly spike in overnight lending rates Monday (yesterday) reflected the near-total erosion in systemic surplus - from about Rs 8 lakh crore (Rs 8 trillion) a year ago to within touching distance of a deficit last week." ET. The other effect of an overvalued rupee is that India exported $21.25 billion worth of goods to China while it imported $94.16 billion and the volume of imports is increasing. ET. We did not spend rupees during the pandemic like other nations so we are having to spend dollars. Not independent of the global economy.

Zooming taxes, booming economy.

"A sharp rebound in consumer spending and rising employment will sustain economic growth in India in the months ahead, the government said in its monthly economic review for August." ET. "Business investment has been encouraged by government spending which climbed 35% in April-August compared to the same period a year ago, the report said, adding that tax revenue for the government had been buoyant." "Gross direct tax collections grew 30% to Rs 8.36 lakh crore (Rs 8.36 trillion) till September 17 of current fiscal year on higher advance tax mop-up buoyed by the economic revival post pandemic, the finance ministry said." Zee. "This includes revenue from Corporate Income Tax of Rs 4.36 lakh crore (Rs 4.36 trillion) and Personal Income Tax of Rs 3.98 lakh crore." If consumer spending is so high that corporate tax collection is booming then companies must be producing much more. Why then, "Union Finance Minister Nirmala Sitharaman...sought to know from India Inc what is stopping them from getting into manufacturing when countries abroad are showing their belief in India." ET. Is it because high government taxes are squeezing their cash balance? "The Union government...urged bankers to increase lending to the industries segment given the multiplier benefits it offers for the country's economic growth." ET. Department of Financial Services Secretary Sanjay Malhotra said that "the maximum loan growth has been in the retail segment over these years, and the banks have been focusing on the same." Maybe banks have no money left after lending to the Adani Group. "The recent acquisition by the Adani Group of cement maker Holcim's India buisnesses is expected to add another Rs 40,000 crore (Rs 400 billion) to the conglomerate debt, taking it to approximately to Rs 2.6 trillion, an analysis by Credit Suisse showed. The Gautam Adani-led Group has seen its debt levels increase over the past five years from Rs 1 trillion to Rs 2.2 trillion." TIE. "The unemployment level in urban areas has shrunk for the fourth consecutive quarter ending at 7.6 percent in the June quarter of 2022," and "Work demanded under MGNREGS (scheme to help rural unemployed) has been diminishing since May and was the lowest in August 2022, as compared to the same period in the last two years." News18. If more people are employed why are they reducing their spending? "The recent Index of Industrial Production data showed that the consumer non-durable sector contracted by 2 percent and was almost flat in the April-June period. This is a worrying scenario as people have cut back spending on day-to-day items like soaps, shampoo, biscuits among others." ET. The government is pressuring the Reserve Bank (RBI) not to increase interest rate to control inflation because prices are rising due to supply problems. TIE. Sanctions on Russia are not going to go any time soon so if consumer demand increases, as the government claims, then prices are sure to rise further. Increasing interest rate will subdue demand and control prices. If the economy is galloping, why trying to whip industry, banks and RBI into submission? What gives?

Monkey on our backs.

"Nearly eight decades after the last cheetah was hunted to extinction in India, its cousins from Africa are now here to restore the spots of glory." TOI. "PM Narendra Modi released eight cheetahs to the enclosures inside Kuno National Park in Sheopur district of Madhya Pradesh through the apparatus, rotating a lever on Saturday morning. It is also PM Modi's birthday today." "Genetic analysis of wild cheetahs shows they may have survived two historical bottlenecks, events that sharply reduce the size of the population. When this happens, the few remaining individuals end up inbreeding, or mating with relatives." National Geographic. Genetic similarity leads to deformation and diseases. And, "Cheetahs have a low rate of reproductive success, meaning that as a species they are not always able to reproduce." "Cub mortality is higher in protected areas like national parks and wildlife reserves where proximity to larger predators is greater than in non-protected areas. In such areas, the cheetah cub mortality can be as high as 90%." cheetah.org. As of 2018, there are 12,852 leopards in India, of which 3,421 are in Madhya Pradesh. TOI. Cheetahs are not stuffed toys for birthday present. "An e-auction of gifts and souvenirs presented to Prime Minister Narendra Modi began on Saturday as the top leader marked his 72nd birthday." TN. Two days before that, Modi "said Rajpath symbolised India's 'slavery' and has now been consigned to history as he inaugurated the revamped stretch with a new name, Kartavya Path, and unveiled a statue of Netaji Subhash Chandra Bose at India Gate." BS. Anything to get in the news. But, ominously, 'kartavya' means 'duty', so whose duty is it, the government's or the people's? "In many of his actions, instincts and most importantly his approach to the practice of power, he echoes Mrs (Indira) Gandhi," wrote Shekhar Gupta. On Kartavya Path "What Modi has been doing there is putting the monkey on the citizen's back, by shifting the definition of the constitutional state from the government's duties to the citizen." If 'Rajpath' signified slavery to the white British, 'Kartavya Path' signifies slavery to our brown masters. We still remain slaves. Oppression of citizens could not be possible without extreme sycophancy. Finance Minister Nirmala Sitharman was enraged because there was no picture of Modi in a government fair price shop in Telangana. ET. She does not know that subsidised food is paid for, not by Modi, but by taxes paid by the people. A Parliamentary panel blamed the government for the large number of deaths due to inadequate vaccination and lack of oxygen during the Covid epidemic last year. DH. An estimated 3.4-4.7 million people died during the pandemic in India, 10 times the government's count of 414,482. npr. Modi's "push to boost domestic manufacturing of defense systems is leaving India vulnerable to persistent threats from China and Pakistan. DH. Duty for us, posturing for him. Will India survive?   

Recession may be catching.

"India is likely to be the fastest-growing Asian economy in 2022-23, according to analysts at Morgan Stanley. They expect India's gross domestic product growth to average 7 percent during this during this period - the strongest among the largest economies - and contributing 28 percent and 22 percent to Asian and global growth." BS. "The country has become the fifth biggest economy during the last three months of 2021, pushing the United Kingdom to the sixth spot, with the country grappling with a harsh shock of high cost of living." News18. "As per a Bloomberg report, the size of the Indian economy with regards to 'nominal' cash was $854.7 billion during the quarter through March. On the contrary, the same for the UK was $814 billion." India may be zooming like a rocket but it is still a part of the world, so if the global economy falls sick we are bound to feel its drag. "The world economies may fall into a global recession next year amid aggressive monetary policy tightening by central banks to tame inflation, the World Bank said." "Aside from recession, a string of financial crises in emerging markets and developing economies is also likely to do them 'lasting harm', the report said." FE. "India's overall exports, both merchandise and services, in August 2022 rose 6.75 percent year-on-year to $57.47 billion." News18. Trade deficit was $18.37 billion in August. However, the merchandise trade deficit in August was estimated at $27.98 billion and for April-August 2022, the merchandise trade deficit was estimated at $124.52 billion. If our economy grows and consumption improves, there will be a commensurate rise in imports, while a global recession will reduce demand for our exports, which may increase our current account deficit (CAD). An article by the Reserve Bank (RBI) said that CAD is likely to remain within 3% of GDP in 2022-23. ET. Fingers crossed. "US and European importers of merchandise like bags, apparel and jewellery are asking their Indian suppliers to ship cheaper products, as the purchasing power of inflation-battered consumers in those markets has declined." ET. The national debt of the US is $30.888 trillion. pgpf.org. Almost ten times India's nominal GDP which was $3.173 trillion in 2021. World Bank. "Federal Reserve officials look on track for another jumbo increase in interest rates this month, as they hasten to crimp demand and assure Americans they will bring inflation back down to 2%." ET. Which means, "A rally that has the dollar on course for its best year since 1984 has further to run, traders and analysts say, suggesting more pain almost everywhere else as other currencies either crumble or require rapid rate hikes to stay put." Reuters. Or sell dollars, as the RBI has been doing. "The country's forex reserve has shrunk by almost $90 billion from the peak of $642 billion in November 2021. Forex reserves at current level can pay for 9 months of imports. India's monthly import bill is around $63 billion." TNIE. Once the piggy bank is empty then what?