Not happy hour.

"Foreign Institutional Investors (FIIs) remained net sellers in the Indian equity market yesterday, offloading shares worth Rs 11.405 billion, according to provisional exchange data." "Domestic Institutional Investors (DIIs), meanwhile, continued to provide support, emerging as net buyers to the tune of Rs 31.5924 billion." "FIIs have remained net sellers throughout the week, withdrawing a cumulative Rs 50.476 billion over the first three trading sessions." "DIIs, meanwhile, continued to offset the foreign outflows, purchasing a cumulative Rs 128.0269 billion worth of equities." CNBC TV18. "Foreign portfolio investors (FPIs) offloaded $29.28 billion (Rs 2.74 trillion) in the equity market in the first six months of 2026, according to NSDL." "In comparison, FPIs have invested around $6.8 billion (Rs 637.84 billion) in the debt market this year." BT. Higher investment in government bonds is because of the removal of taxes on profits from bonds and relaxation in the upper limit of FPI investment. A higher influx of foreign exchange supports the rupee. "An astonishing $53 billion has exited Indian stocks in the last 18 months." It is because domestic investors are keeping the share prices relatively higher, so that "India's price-earnings (P/E) ratio - the ratio of share price to net profit per share - is 22.5 on a trailing basis and 18.8 projected for the coming year." China's P/E ratio is just 12-14, Korea is 10-12 and Brazil is 8-10, wrote Swaminathan Aiyar. Curiously, the cumulative effort of the government and the RBI to keep the rupee strong against the dollar allows FIIs to get more dollars in exchange for their rupee profits. So DIIs, the RBI and the government are expediting FIIs to sell. India "is the fastest growing major economy with political stability, a young population, a large domestic market, and robust growth prospects. Yet India remains a paradox: It can attract much more foreign investment, but it does not." This is because of the political inability to reform labor and land acquisition laws. "Reforms create losers in the short run, while benefits accrue only later. Jean Claude-Juncker, former head of the European Commission, once said, 'We all know what needs to be done. We just don't know how to get re-elected after doing it," wrote Aiyar. Calculating the monthly per-capita consumption expenditure (MPCE) at 2023-24 prices, just the bottom 0.5% of the rural population today has the same MPCE of the bottom 10% in 2011-12 while for urban India it is 0.4%. In 2011-12, 121 million of the population fell in the bottom 10%, in 2023-24, that has fallen to 6.5 million, wrote Ashish Kumar and Payal Seth. Extreme poverty may almost have been eliminated but people aspire to a much higher standard of living, inspired by smartphones. Only salaried jobs can fulfill their dreams. But, "last year, 11.6 million Indians in their 20s were unemployed and about 6.8 million of them had been job hunting for over a year." "These numbers understate the full picture: another 78 million in the same age group were not looking for work at all as per our estimates based on the Periodic Labout Survey data for 2025," wrote Prof Vidya Mahambare & Asrar Alam. "The most concerning fact, set to get worse with the advent of AI, is that as education levels rise, so does the unemployment level." Even for those with jobs, salaries do not reflect company profits. "Profit before taxes for over 33,000 sampled companies nearly quadrupled between 2019-20 and 2022-23." GDP grew at 6.7% annually between 2021--22 and 2023-24 while real wages for regular workers contracted by 0.7%, wrote Ajit Ranade. Political paralysis, corporate greed, and a frustrated, defeated youth. A sad cocktail.   

Deleted by SIR.

"Recent Announcement: Marriage Certificate is Not A Proof That You Are Married. It's just a Document To Show That You Had Attended Your Marriage Ceremony," mocked journalist Rajdeep Sardesai. Memes like these have flooded social media in India after, "A passport is primarily a travel document and should not be treated as proof of citizenship, a senior external affairs ministry official said." TOI. Does that mean that there are citizens of other countries traveling with Indian passports? If so, how many? "R Rajagopal, who worked at The Telegraph newspaper, says his passport renewal was held up after his name was removed from the electoral roll in West Bengal during a controversial voter list revision. Known as the Special Intensive Revision (SIR), the exercise is being carried out by the Election Commission of India (ECI) to identify ineligible voters." BBC. Renewal of a passport requires the old passport, proof of address, which include utility bills, driving license or rent agreement, and two recent photographs. Bajaj Finance. It does not need a voter card which is now being issued by the ECI after an SIR. As per the ECI an elector (a voter) is one who is a "Citizen of India. At least 18 years of age. Ordinarily Resident of the Constituency. Not disqualified under any law." eci.gov.in. If a passport does not certify citizenship, why is Mr Rajagopal being denied one because the ECI refuses to recognize him as a citizen. Even though he undoubtedly is. So what is the recourse? Obviously a court of law. But this is where one could disappear. "Even as Supreme Court has repeatedly invoked the legal maxim 'that justice delayed is justice denied' - with CJI Surya Kant recently saying 'justice delayed is justice destroyed'," "SC took almost 14 years to decide the appeal. During the period, two out of three convicts died." "The appeal came up for hearing on 12 dates over the last 14 years." TOI. On 23 June, the Orissa High Court delivered a verdict in favor of two daily-wage sweepers after 27 years of litigation. TOI. "Indian entrepreneur Prakash Dadlani has backed Zoho founder Sridhar Vembu's argument that corruption is pushing up costs across the economy, saying it is quietly making Indian manufacturing more expensive by raising the cost of land, approvals, interest and rents." He said, "corruption is not only making homes unaffordable but is also weakening India's ability to compete with manufacturing hubs such as China and Vietnam." BT. If you can prolong a case till death, there is little fear of punishment. So, "A total of 17,043 encounter operations were carried out across Uttar Pradesh in the past nine years, in which 289 criminals were killed and 34,253 were arrested. A total of 11,834 accused were injured." NDTV. "Encounter killings, often simply referred to as encounters, is a euphemism used in India and Pakistan to refer to extrajudicial killings by security forces." wikipedia. "In 'encounter' deaths, the logic of Uttar Pradesh Police is always the same. The accused attacks the police while being taken for interrogation. In an act of defence, the police retaliate, in which the accused dies." 101reporters.com. Apparently, UP Police have changed tactics and now shoot the legs. "According to Uttar Pradesh Police data, there have been 13,000 such incidents in the last seven years, in which the accused were shot in the knee. This is called 'half fry' in UP Police parlance." Hindus are cremated after death, so the 289 dead were fully fried and the 13,000 crippled for life just half fried. How droll.     

Cover up to keep cool.

"Europe's unprecedented early summer heatwave may be responsible for hundreds of excess deaths," with 1,000 excess deaths recorded in France. "At least 74 people have drowned in France since the beginning of the heatwave, according to the Interior Minister Laurent Nunez." BBC. It is apparently because of an 'Omega Block'. "An omega block takes its name from the shape of the Greek letter omega (wikipedia) - with a bulge of warmer, settled high pressure held between two cooler low pressure systems." "Under normal conditions, the jet stream carries carries weather systems steadily from west to east. But during an omega block, that flow becomes disrupted and can buckle dramatically north and south, isolating the pressure systems." Reuters. In 2003, "the hottest summer recorded in Europe since 1540" resulted in 70,000 excess deaths. "In France, 14,802 heat-related deaths (mostly among the elderly) occurred during the heatwave, according to the French National Institute of Health." wikipedia. "Air conditioning is very rare in European homes." "While nearly 90% of US homes have air conditioning, in Europe it's around 20%." The main reason is that up until now there has been no need for AC, houses are built to keep out heat in the summer and energy is very expensive. CNN. One reason for excess deaths among Europeans may lie in their reaction to heat. They tend to take off their clothes which exposes their bodies directly to heat and sunlight. The Arabian Middle East is desert-like and temperatures can reach 55 degrees Celsius in summer. Britannica. Of course, deserts radiate heat after sunset, so nights can be pleasant. The Rub al-Khali (rub means quarter, khali means empty) in Saudi Arabia is the largest area of continuous sand in the world. Britannica. Saudi men wear an ankle-length robe of fine cotton, called thawb (Pinterest) and cover their heads with a square piece of cloth, called Ghutra (saudipedia.com). Over centuries Arabs have adapted their clothing to the weather. White reflects light, and the body, head and neck are all protected from the sun and the hot wind. "The record-shattering June heat that's baked Europe this week would have been'virtually impossible' just a few decades ago, according to a new analysis, which says the human-driven climate crisis is 'unequivocally to blame'." "A similar heatwave occurring in June 1976 would have been a startling 3.5 degrees Celsius cooler, according to the study, which has not been peer-reviewed." CNN. "As of April 2026, real-time data and reports from the India Meteorological Department (IMD) indicate that 95 of 98 of the world's hottest cities are located in India." India is undoubtedly the hottest country in the world. "In 2016, for example, severe heat wave conditions affected Bihar, Jharkhand, Gangetic West Bengal, Odisha, Punjab, Haryana, Chandigarh, Rajasthan, Maharashtra,  West Madhya Pradesh and Gujarat." etvbharat.com. To survive such prolonged extreme heat people need water. India is blessed with hundreds of rivers, Fed by over 5,000 glaciers. wikipedia. Alarmingly, glaciers in the Himalayas and the Hindu Kush are melting rapidly (pib.gov.in) and there is nothing that the government can do to halt the process. "Water has become a struggle in the capital (Delhi), deciding people's sleep, work and daily routine." "In some areas, a family member stays at home or even skips work to wait for tankers so that water can be collected whenever it arrives." TOI. "In yet another act of unprovoked aggression against India, a Pakistani Minister threatened to 'cut off those hands' that sought to claim Islamabad's so-called share of water under the Indus Water Treaty. NDTV. Could desperate leaders of countries with citizens dying of thirst actually declare war on their neighbors? The end of the world could be nigh, indeed. Till then Europeans could adopt the Arab thawb. Cheaper than AC. No running cost.      

Don't wait for the Fed.

"In early June, RBI governor Sanjay Malhotra reportedly said that India had enough reserves to cover 11 months of imports." Even accounting for $110 billion in forward market commitments and $235 billion of short-term debt, reserves of $337 billion is enough to cover 5-6 months of imports, wrote Sudipto Mundle. In order "to attract stable long-term foreign capital" and increased participation in Government Securities (G-Secs) by foreign portfolio investors (FPI), the government has announced "tax exemptions on interest income, long term capital gains (LTCG) and short term capital gains (STCG), expansion of specified securities under the Fully Accessible Route (FAR), and streamlined investment norms." pib.gov.in. The Reserve Bank of India (RBI) was not to be left behind. In October 2025, the RBI loosened restriction on external commercial borrowings. "Companies may raise up to $1 billion or 300% of their net worth (whichever is higher), while financial sector firms regulated by RBI, Sebi, Irdai, or PFRDA face no cap." TOI. The idea is that companies will borrow at cheaper rates abroad to invest in India which will create jobs and increase economic growth, while the influx of foreign exchange will strengthen the rupee. The problem is that companies will have to repay in foreign currency and if profits and/or the rupee were to fall significantly they might find it difficult to service their loans. Last week, "India's central bank has allowed domestic lenders to extend loans to non-residents (NRI) against foreign currency deposits, including via their offshore branches." "Earlier this month, the RBI offered to subsidise hedging costs for foreign currency non-resident (FCNR) deposits as a way to encourage banks to bring in dollar flows from the Indian diaspora." Reuters. Public sector banks (PSB) are offering up to 6.5% on FCNR(B) deposits (ET), which is more than they offer to domestic investors on fixed deposits of similar duration  (paisabazaar.com). Given a consumer price index (CPI) inflation rate of 3.93% (pib.gov.in) the real returns for domestic investors drops to around 2% and the weakening of the rupee reduces the value of their investment. Indian banks are offering around 100 basis points above yields on US 5-year Treasuries, which is at 4.142% (investing.com), but investors are demanding higher yields (ET). It will be lucrative for NRIs "as the nominal FCNR interest rate of 6-7% is higher than international floating rates and NRIs can expect high returns from arbitrage. If they leverage their deposits, annual returns could rise to a whopping 12-19%, according to a Times of India report," wrote Mundle. Since our foreign exchange reserves are adequate why are the government and the RBI so anxious to augment our reserves? Maybe because they are unsure of what the US Federal Reserve is going to do. "The central bank held rates steady at 3.50% to 3.75% this month, as widely expected, but at his first press conference Fed Chair Kevin Warsh surprised many by stressing returning inflation to 2% target as the priority with hardly any mention of the jobs market. But most say the Federal Open Market Committee will prefer to keep rates where they are in coming months." Reuters. "The dollar surged in response and looks set for a period of relative strength." "The dollar rally is an opportunity for Asian capitals to reconsider their options. Indonesia and India, whose currencies have also been under siege could have used a less muscular tone from Warsh," wrote Daniel Moss. "India is trying to defend both the rupee and the stock market simultaneously," wrote Shankar Sharma. Domestic investors are keeping share prices higher through systematic investment plans (SIP) allowing foreign investors to exit at higher prices. The RBI is preventing a fall in the value of the rupee giving foreigners more foreign currency in exchange. "The RBI cannot burn forex reserves defending the rupee, giving foreign capital minimal-cost exits. Nor can Indian investors blow up their savings, giving foreign capital zero-cost exits. India cannot fight a two-front war." Unlike Warsh, the RBI seems unwilling to annoy the government by raising interest rates. Borrowing at high rates to support the rupee to keep cost of oil, gas, and cooking oil down. Must be paid back in future. With interest.

Fighting to lose.

"The UN's International Maritime Organization (IMO) has paused the planned evacuation of more than 11,000 stranded in the Strait of Hormuz after a cargo ship passing through the waterway was attacked." "The attack came after Iran's Islamic Revolutionary Guard Corps (IRGC) had warned that attempts to cross the strait along the route designated by the IMO would be 'unacceptable and completely dangerous' and vessels should communicate with Iran." BBC. Following that unprovoked attack, "The US military attacked Iran...in response to an Iranian drone strike on a cargo ship in the Strait of Hormuz," to which Iran said that, "Iranian naval forces responded by striking US military targets in the region. Tehran did not provide details." Reuters. It is incredible why Iran still has a navy when the US and Israel started attacks on Iran on 28 February (wikipedia), exactly four months to today. They should have destroyed every ship, boat, jetty right at the beginning. After all, ships and boats cannot be hidden in caves like missiles and drones. Starting 4 March, Iran's strategy has been to stop ships carrying oil and gas through the Strait  (congress.gov), causing a sharp rise in prices, in order to pressure the US. And so, "Alongside naval deployments and patrols, there have been reported incidents of gunboat fire to keep vessel movement through the Strait minimal," and "Central to sustaining this closure is Iran's use of naval mines, which can be tactically placed across the narrow maritime corridor to deter and deny the movement of ships." ORF. "Certain conventional surface vessels, like war ships or patrol boats, feature mine laying capabilities." Fishing boats can lay certain types. "Mines can also be dropped into the water via air, through either fixed or rotary winged aircraft, Submarines can use their torpedo tunes to lay some mines." Strauss Center. The US military has been attacking boats suspected of smuggling drugs since 2 September. "The US has since struck 59 boats in the Caribbean Sea and eastern Pacific Ocean." At least 205 people have been killed. pbs.org. By now, every Iranian ship, boat, submarine, even inflatable dinghies, should have been destroyed. To allow Iran to engage in such open piracy is probably why the US keeps losing every war since Vietnam. Last week, "The presidents of the US and Iran have signed an initial peace deal aiming to end the war, allowing it to immediately take effect." It includes "reopening the Strait of Hormuz, a $300 billion plan for Iran's 'reconstruction', and the US terminating 'all types of sanctions on Iran'." BBC. This sounds like a complete surrender and Trump haters in the US, Europe and India have been celebrating. Trump's deal is much weaker than the Joint Comprehensive Plan of Action negotiated by Barack Obama in 2015. Reuters. Yesterday, "The US struck multiple targets inside Iran for a second straight night...after Tehran allegedly attacked another oil tanker passing through the Strait of Hormuz,...and pushing the already fragile ceasefire to the edge of collapse." NDTV. Soon after the US had lifted the naval blockade on Iran, Iran's Supreme Leader Mojtaba Khamenei said that "Trump had 'out of desperation used all kinds of leverage' to bring the deal about." BBC. Strangely, even as the regime and the media in Iran celebrated a victory over the US, hardliners in Iran warned that the "agreement would turn the Islamic Republic into a 'colony of the United States' and open the Strait of Hormuz to Israel." CNN. If both countries lost, which lost more? The Strait is a body of water. Iran should have nothing that operates on or below the water surface. First control the water. Then negotiate for oil.      

Don't stay down.

"About 10 years ago, less than one in 10 of India's poorest rural households owned a bike or car; now close to half do." Ownership of refrigerators has jumped from 2.9% to 22.5% in the bottom 40% of rural India while it has increased from 20.9% to 57.9% in urban areas. Mobile phones are ubiquitous. TOI. About 97% of people in the age group 15-29 years own mobile phones and 95.5% of them own smartphones. Over 92% have accessed the internet in the last three months (pib.gov.in) and a majority of them have used the United Payments Interface (UPI) (Kotak) for online transactions. The Household Consumption Expenditure Survey (HCES) 2023-24 shows that the monthly per capita expenditure (MPCE) of only 0.5% of rural and 0.4% of urban households, at 2023-24 prices, are at the same level as the bottom 10% of the population in 2011-12. In rural areas most are found in the 10th to 40th percentiles while in urban areas most are in the 20th to 30th percentiles. "Even accounting for population growth, this implies that nearly 114.5 million people or about 8% of India's current estimated population have moved above the real consumption level that defined the bottom decile," wrote Ashish Kumar & Payal Seth. This is a real eyeopener. But how was it achieved? The large proportion may be because, "The population covered by social protection systems has increased from 22% in 2016 to 64.3% in 2025, indicating substantial expansion in social security coverage in the country, data released by statistics ministry showed." TOI. "Over the past decade, government cash transfers, particularly directed at women and farmers, have emerged as a major welfare tool for poverty. Federal and state allocations for such schemes grew more than 20 times from under $2bn in 2015 to nearly $30bn, according to data from Project DEEP," BBC. During elections, "Free electricity, free bus rides, loan waivers, cash transfers, subsidised meals, free liquefied petroleum gas (LPG) cylinders, free consumer appliances and restoration of pension schemes have become familiar features of electoral campaigns." Political parties try to outbid each other in making reckless promises, uninhibited by any worries about how to finance these handouts, such are the perks of power in India. "Many states have to depend on heavy borrowing because their revenues are insufficient to meet growing commitments." In time, interest payments on their debt become a major part of their budgets. NUS. Handouts may prevent poverty and even increase spending of the bottom 10% but they are not going to create wealth. Jobs with proper salaries will. "Last year, 11.8 million Indians in their 20s were unemployed and about 6.8 million of them had been job hunting for over a year." "In terms of overall unemployment rate, about 10% of young Indian adults in their 20s were unemployed last year. This does not include around 40% who were not even looking for a job," wrote Prof Vidya Mahambare & Asrar Alam. Not sure of consumers' ability to spend, it is no surprise that Indian companies are reluctant to invest in new capacity despite higher earnings. "The aggregate net income of listed Indian firms is approaching 6% of gross domestic product (GDP). Even so, their capital expenditure has remained flat at 3.6% to 3.7% of GDP." "The good jobs that come with new factories, warehouses, and showrooms are becoming elusive." "India's per capita real income is less than half of 1950s America," wrote Andy Mukherjee. "India's predictable slide into economic mediocrity follows a well-trodden path into middle-income trap." "Weak authoritarian regimes" "provide only polarisation, slogans and hubris. But they are powerless when an external crisis hits." "High GDP growth that does not translate into more and better jobs, and results in weak inflation due to poor demand, signals a middle-income trap," wrote Rathin Roy. Trapped below the 1950s. Is there a way out? Not by staying down. Push everyone up instead.   

A country without citizens.

"A passport is primarily a travel document and should not be treated as proof of citizenship, a senior external affairs ministry official said...at an event to highlight the expansion of passport services across the country on 14th Passport Seva Divas. The passport attests the nationality of Indians when they are abroad but it isn't a document of citizenship, officials clarified." TOI. "In international law, nationality is a legal identification establishing a person as a subject, a national of a sovereign state." wikipedia. What then is the difference between a nation and a state? "A nation is a group of people with a common language, history, culture and (usually) geographic territory. A state is an association of people characterised by institutions of government, including laws; permanent territorial boundaries; and sovereignty (political independence)." Britannica. "There are 28 states and 8 Union territories in the country." And, "From the largest to that smallest, each State/UT of India has a unique demography, history and culture, dress, festivals, language etc." india.gov.in. Therefore, each state in India is a nation, but the states are not sovereign and cannot issue passports. Only the Union government can. But the Union government cannot attest to our nationality, only the states can. This confusion is dangerous. China "claims approximately 90,000 sq km of Indian territory in State of Arunachal Pradesh, Indian territory under occupation of China in Jammu & Kashmir is approximately 38,000 sq kms." mea.gov.in. If the people of these states are not citizens of India what will they defend? An application for a new passport requires any one of eight documents as proof of identity but not of citizenship. Bajaj Finserve. Apparently, the only real proofs of citizenship are Certificate of Naturalisation or a Certificate of Registration issued to foreign nationals obtaining Indian citizenship and birth certificate of an individual born after 1950 and their parents. News 18. So, what of those of us born before 1950 when no one had a birth certificate? We were born here, grew up here and have been paying taxes all our lives but we are not citizens. No wonder, "Close to one million Indians have renounced their citizenship over the last five years, with annual numbers crossing the 200,000 mark consistently since 2022, according to data presented by the government tin Parliament." TOI. Since they were not recognized as citizens by the Indian government they lost nothing. But they have gained citizenship of another country. Strangely, "An immigration officer in London, Paris or Washington is expected to place complete faith in the document, while the country that issues it reserves the right to treat with extreme caution and suspicion and ultimately to disregard it entirely." "A death certificate that merely suggested the possibility of death, a birth certificate that did not confirm birth, a driving licence that did not prove the holder could drive,...or a marriage certificate that did not affirm marriage would be laughed out of existence," wrote Rahul Bedi. If an Indian passport is issued on production of documents none which certify citizenship, is it being issued to illegal immigrants? If so, why? In 2019, 20 illegal immigrants from Bangladesh were arrested in Tamil Nadu who had "allegedly not only acquired ration cards and driving licenses but had also managed to get authentic Aadhaar cards and, through Aadhaar, passports." TINE. Perhaps, what the officials can't, or won't, say is that the entire bureaucracy is not to be trusted. Documents obtained with money aren't certifiable. Easier to deny citizenship to all Indians. The government is safe.       

Lavish gifts for foreigners.

"Kevin Warsh took office as chairman of the Board of Governors of the Federal Reserve System on May 22, 2026, for a four year term," and "also serves as chairman of the Federal Open Market Committee, the Federal Reserve System's principal monetary making body." Federal Reserve History. Warsh was expected to be dovish on interest rates, but "The Federal Reserve held US interest rates between 3.5% and 3.75% after Kevin Warsh's first meeting in charge of the central bank." The Fed's conclusion was, "The Committee will deliver price stability." BBC. Which hints at a tightening bias. "The dollar surged in response and looks set for a period of relative strength. That is precisely what beleaguered Asian currencies did not need," wrote Daniel Moss. Japan's yen fell to 161 against the dollar. "Japan spent an unprecedented $74 billion in the month to 27 May to back the yen." On 16 June, "the Bank of Japan (BOJ) raised its so-called policy rate to 1% from 0.75% - a level not seen since 1995." "Japan's interest rates were cut aggressively in the 1990s to combat the fallout from a collapse in prices of assets like property and shares." "The bank has been gradually raising its interest rate since March 2024." BBC. Japan's consumer price inflation rose to a high of 4% in January 2025, but has been well below the BOJ's target of 2%. rateinflation.com. Currencies of Indonesia and India have also been under pressure. " Indonesia "has waded into the market repeatedly over the past year," "But developments became more serious this month, when it (the rupiah) broke through the critical level of 18,000 per dollar and demand for the country's bonds crumbled. That pushed the Bank of Indonesia into an emergency quarter-point rate increase, followed by a hike of the same magnitude last Thursday." The Reserve Bank of India (RBI) has been extremely clever. As always. "The RBI is not thinking about raising interest rates at the moment, Governor Sanjay Malhotra said." It is too early to discuss rate hikes, he said. India Today. "India's foreign currency reserves dropped USD 9.985 billion to USD 671.625 billion during the week ended 12 June due to a sharp drop in gold reserves, the RBI said." TNIE. "The RBI sold a net $8.94 billion in the foreign exchange market in April, while its gold holding remained stable." "The Indian rupee slumped to a record low of 96.96 per dollar last month," and so, "The currency was then shored up by firm RBI intervention over multiple trading sessions." "The RBI's net outstanding forward dollar sales stood at $95.30 billion as of end-April, compared with $103.06 billion as of end-March." Reuters. The central government "promulgated an ordinance exempting foreign institutional investors and the Bank of International Settlements (BIS) from tax on interest income and capital gains arising from investment in government securities." The RBI will bear hedging costs for external commercial borrowings of public sector banks. TNIE. The RBI has allowed banks to offer higher interest on FCNR(B) accounts of non-resident Indians (NRI) and "RBI absorbs the currency hedging cost (estimated at around 3.5%)," so that "Banks are now offering 6% to 7.1% on USD FCNR(B) deposits." Investmates. FCNR(B) accounts are held in foreign currencies are fully repatriable, can be converted to any other currency, earn a higher rate of interest than in the parent country and are free of tax in India. cleartax.in. Who will pay for all this generosity by the RBI for foreigners? The hapless Indian taxpayer of course. While determined not to increase interest rate, so that savers can earn more, the RBI is now projecting a higher consumer price index (CPI) inflation at 5.1% for this financial year (ANI). So Indians are to suffer higher costs, get less interest on bank savings, lose wealth from rupee depreciation and reward foreigners with lavish gifts. The colonial mentality has not gone. Still subservient to foreigners. We are second class.