Free is expensive.

"India's central bank will close a discounted forex swap facility for banks to hedge overseas deposits raised from non-resident Indians (NRI) a month earlier than planned," as "The RBI said it received $52.3 billion via FCNR deposits raised by banks." The scheme will now close on 31 August instead of on 30 September. Reuters. Higher foreign exchange reserves are necessary as, "India's goods exports in July, driven by higher electronics exports and engineering items, jumped nearly 20% to $44.24 billion but higher input costs due to West Asia crisis also drove imports 17.51% higher to $76.22 billion, pushing the goods trade deficit to a six-month high of $32 billion, data released by the Commerce and Industry Ministry showed." TIE. From April to July, FY 2026-27, total Merchandise exports were $173.78 billion and imports were $292.38 billion, while Services exports were $142.64 billion and imports were $73.47 billion, resulting in a total trade deficit of $49.43 billion. pib.gov.in. India's electronics export is booming. "In July, India exported $5.92 billion of electronics goods, up 57.4% from a year earlier, while imports surged 46.03% to $14.37 billion. For every $100 of electronics exported, it imported about $243." "China remained India's largest import source, with imports rising 34.4% in July to $14.67 billion." Exports to China were a tiny $2.20 billion. MC. India's "farmers use more urea - a nitrogen-heavy crop nutrient - than the US and Brazil combined, buoyed by government support which keeps prices well below market rates." As supplies through the Strait of Hormuz have stopped, India "has faced lofty costs for the natural gas imports...that serve as a crucial feedstock for domestic fertilizer production. The country's fertilizer subsidy bill is likely to exceed Rs 3 trillion ($31 billion) in the current fiscal year, well above the budgeted Rs 1.71 trillion." "Farmers still pay Rs 266.5 (2.80) for a 45-kilogram bag of urea, less than a tenth of the price paid in an April tender to procure it." ET. "Studies show that plants absorb only 30-40% of applied fertilizers such as urea and DAP (Diammonium Phosphate), leaving 60-65% of nutrients unused." "This is leading to groundwater contamination, air pollution and inefficient use of subsidized farm inputs, according to manufacturers and experts." Mint. "The total outstanding agricultural loans of banks neared Rs 31.35 trillion as on 31 December 2025." "Over the past decade, it reached nearly Rs 28.67 trillion in 2024-25 from Rs 8.45 trillion in 2014-15." Public sector banks (PSBs) account for over 70% of these loans. The Kisan (farmer) Credit Card Scheme (KCC) had 77.2 million operational accounts with loans outstanding of Rs 10.20 trillion, as on 31 March 2025. HT. It is unlikely that farmers, already poor, will be able to repay any of these loans and so the whole amount becomes a subsidy. Meanwhile, "The Parliamentary Standing Committee on Defence has flagged poor demand, high production costs and recurring quality issues at the country's small-arms factories." High overheads "resulted in cumulative losses of Rs 3.66 billion across three factories on 12 selected small arms between 2015-16 and 2019-20." "Even after corporatisation,Speaking on infrstructure" Advance Weapons and Equipment India Ltd (AWEIL) "recorded losses of Rs 2.34 billion between FY 2023-24 and FY 2025-26." India Today. Why not shut them down? Probably because a large number of poor quality workers will lose their jobs and that might cost votes. Speaking on infrastructure, Chief Economic Advisor, V Anantha Nageswaran said, "Free is the most expensive word in public policy." Waste of trillions of rupees is being used as subsidy. Then borrowing to fill up the hole. This is not voodoo economics. It's worse.     

Vande Mataram: the song of Independence.

On Our 80th Independence Day today (HT), "A Pew Research Center Survey conducted across 36 countries between February and May 2026 reveals an international community divided down the middle: a global median of 45% of respondents hold a favorable view of India, while 41% express an unfavorable opinion." Sri Lanka has the most favorable view of India with 79%, followed in second place by the UK and Kenya with 71%. Pakistan has the largest unfavorable view with 91%, followed by Turkey, another Islamist dictatorship, with 72% negative. Surprisingly, Brazil and South Africa, both BRICS nations, are negative.  TOI. Alarmingly, "Attacks on Indians living abroad have witnessed a nearly sevenfold increase in the past five years," according to the Ministry of External Affairs. There were 15 attacks in 2021, which jumped to 104 in 2025. The US reported the highest number of violence against Indians with 33, "followed by 32 in the UAE, 31 in the UK, 30 in Canada, 24 in Ireland, 23 in Russia and 19 in Germany." NDTV. "In an unprecedented acceleration of immigration enforcement, Canada has deported 3,323 Indian nationals during the first six months of 2026." "Families who invested substantial resources - often liquidating ancestral land or securing high-interest loans - to send students to Canadian colleges now face sudden deportations and severe financial distress." News18. "Indian Prime Minister Narendra Modi concluded a three-day visit to Australia from 8-10 July," during which, "The finalisation of export arrangements to supply Australian uranium for India's nuclear power plants signifies that the relationship has reached new depths." East Asia Forum. On 8 July 2026, Australian Prime Minister Anthony Albanese "can and should take a different approach when Modi returns to Australia this week," as "in the three years since his last visit, the Modi government has weakened India's democratic institutions and intimidated and harassed critics...Violence against religious minorities has increased and BJP leaders routinely use hate speech to target Muslims and Christians, while government curbs criticism online." ABC. "An influential students' organisation in Nagaland has asked educational institutions not to send students to participate in Independence Day celebrations this weekend, during which the complete version of the national song Vande Mataram will be sung. HT. Vande (praise, celebrate, venerate) Mataram (mother) was a published in 1882 as a poem in Sanskrit, written in the Bengali script, by Bankim Chandra Chatterjee in his novel Anandamath (The Abbey of Bliss) and became the rallying cry in the Indian Independence Movement. "Indeed, the song and the raising of 'Vande Mataram' as a slogan was outlawed by British authorities." Britannica. A row erupted when Vande Mataram was played before the Tamil anthem and the national anthem "as per directions from the Governor's office" during the oath-taking ceremony of newly elected Chief Minister of Tamil Nadu, C Joseph Vijay. India Today. Following that, "A resolution has been unanimously passed by the Tamil Nadu Assembly, mandating that the state song 'Tamil Thai Vazthu' be sung first at the beginning of government events." "Both DMK and AIADMK supported the resolution." NDTV. A song which united and electrified the nation before Independence is now dividing it. "A US lawmaker has raised concern over New Delhi's proposed amendments to Indian laws governing foreign donations received by NGOs, trusts, educational institutions and religious organizations, threatening that the changes could affect bilateral relations." NDTV. The Foreign Contribution (Regulation) Amendment (FCRA) Bill 2026 says that a Designated Authority will take over assets and foreign contribution of an organization that ceases to have an FCRA certificate. PRSIndia. And "the Catholic Church and Christian NGOs and activists have expressed serious concern over the Bill." TOI. Attacked outside, divided inside. Independent yes, but how secure is Mother India? Vande Mataram.

Staying the same.

"India's retail inflation accelerated in July, led by higher food prices," as, "The consumer price index (CPI) rose 4.45% from a year earlier." "The central bank left its benchmark policy rate unchanged last week, awaiting clearer evidence on whether inflationary pressures had become broad-based in Asia's third-largest economy, making India an outlier among regional peers." Reuters. "Five months after the Iran war raised fears of an inflation spike and an economic downturn, Indian officials are sounding more confident," as CPI inflation has stayed within RBI's tolerance band of 2%-6%, "Consumer demand has also held up, with vehicle sales at record level, credit growth climbing to a two-year high and GST receipts rising at at a double-digit pace." As the festival season approaches, "businesses are building inventories, ramping up production and adding temporary workers in anticipation of a pickup in demand." ET. However, "Disruptions around the Strait of Hormuz are rapidly turning a shipping problem into a wider cost challenge," as "the increase in landed costs, which include item price, shipping fees, customs, taxes and charges for insurance and risk, can vary from 35 to 50% on some trade lanes." "Jitendra Srivastava, CEO of Triton Logistics & Maritime, says freight rates to the Gulf on some routes have climbed to $3,400-$4,000 from $300-$400 before the latest disruption." ET. "On July 29, US Fed left interest rates unchanged at 3.50% -3.75%." Under new Fed chair Kevin Warsh, "Policy statements have shrunk from 341 words to 130. Forward guidance is gone." So the markets "fall back on behavior, and a debutant chair has none. So, they forecast the man." With the RBI, "What investors have absorbed is not a condition but a blunter summary: this lot don't raise rates.And the more firmly markets assume no rise is coming, the more damage an eventual rise does. Itself a reason to postpone again," wrote Krishnan Ranganathan. Meanwhile, "Credit rating agency Fitch...affirmed India's sovereign rating at 'BBB-', citing robust growth balanced against still-weak fiscal metrics that it reckons could face pressure from rising concerns over youth unemployment." "Fitch has rated India at 'BBB-' since 2006, while Moody's has retained its 'Baa3' since 2020. S&P Global Ratings, meanwhile, upgraded India by a notch to 'BBB' last year." Reuters. Such low ratings are considered unfair and cause considerable resentment in India. "Credit rating agencies need to reform their sovereign process to correctly reflect the default risk of developing economies, saving billions in funding costs, the government's chief economic advisor, V Anantha Nageswaran said." "His comments coincide with India seeking an upgrade to its sovereign credit rating, currently at the lowest investment grade." Mint. Rating agencies "care far more about how much a government owes than what it plans to do," wrote Prof Prachi Mishra. "It's not just about running a primary surplus (revenues minus non-interest spending). Since India's growth outpaces its borrowing costs, a primary surplus would bring the debt ratio down automatically." "Country effects matter more. They likely reflect the strength of institutions and transparency, not the numbers themselves." All our institutions have been corrupted. "India's main financial crime fighting agency has investigated well over a hundred opposition politicians in the past decade," (Reuters) while the BJP has been labeled the "washing machine" party for removing allegations of crime from anyone who joins it (The Print). "India's Election Commission (ECI), one of the most trusted public institutions in the world's largest democracy," "has fielded a string of allegations from the opposition, ranging from voter fraud and manipulation to inconsistencies in electoral rolls. It has denied all of these." BBC. The markets know the RBI will not raise rates to help the government borrow at lower rates. If Indians don't trust our institutions, why would the agencies? We are not in charge of the fruits of our action and must not be attached to inaction, said Lord Krishna in the Bhagawad Gita. The greed for power and plunder. Insatiable.  

Eight gold out of 13.

Flanked by five female athletes, "Prime Minister Narendra Modi on Sunday interacted with India's Commonwealth Games 2026 medal winners at his residence and praised the athletes for their dedication, hard work and contribution towards bringing glory to the nation." ANI. Can't miss a free photo op. "Of India's 13 gold medals, eight have been won by women - remarkable testament to the strength, resilience and growing depth of women's sport in the country." "Hon'ble Prime Minister Narendra Modi has consistently encouraged women athletes, celebrating their achievements and urging young girls to pursue excellence in sport." olympic.india.in. In the midst of all this nauseating attempts at cheap publicity, "A Delhi court, acquitted Brij Bhushan Sharan Singh and Vinod Tomar after finding material contradictions in the prosecution's case (of sexual assault against female wrestlers) and holding that the charges were not proved beyond reasonable doubt." "The court went on to observe that the allegations appeared to be 'false and fabricated' and formed part of a 'deep conspiracy which seems to be politically motivated'." The charges were brought by six female wrestlers. Athletes? Mr Brij Bhushan Sharan Singh has been a six-times Member of Parliament for the Bharatiya Janata Party (BJP) and is known as a bahubali (strong-armed) in his region in Uttar Pradesh (UP). wikipedia. The BJP won an overwhelming majority with 255 seats out of a total of 403 seats in the assembly elections in UP in 2022. wikipedia. Two of the complainants turned hostile. "Nowadays, the main cause for the high acquittal rate in our criminal justice system is due to the witness turning hostile." "The main reasons behind this are the money and muscle power, intimidation and monetary inducement." iils.india.com. One hostile witness "had explicitly stated that 'no untoward incident had taken place' and that she had signed the original complaint 'under the pressure and on behest of two other complainants'." The Print. Oh dear! This woman had been arm-twisted against poor Mr Bahubali. The conspiracy was very deep indeed. In December 2025, "The Supreme Court has put on hold a controversial order that had suspended the life sentence of a former lawmaker convicted of raping a teenager. Kuldeep Singh Sengar, formerly of the BJP, was found guilty in 2019 under the Protection of Children from Sexual Offences (Pocso) Act." BBC. "On 5 April 2018, the woman's father was arrested and placed in judicial custody, allegedly after he was assaulted by supporters of Sengar. A medical examination found injuries consistent with his having been beaten." On 9 April, the father died in hospital. "On 28 July 2019, the rape victim and her lawyer were seriously injured and two of her family members died when a truck struck their car. The truck had blackened license plates." wikipedia. It is not safe to accuse any BJP politician, with or without strong arms. Early this month, "BJP distanced itself Thursday from slogans raised by some of its workers during 'celebrations' marking the seventh anniversary of Article 370's abrogation the previous day after backlash over their alleged anti-women content." TOI. After the student protests at Jantar Mantar in Delhi from 5 June to 25 July 2026  (wikipedia), on 26 July, "TG Mohandas, a Rashtriya Swayamsevak Sangh (RSS) ideologue, who has served as convenor of the BJP's intellectual cell in Kerala, said "the women would be 'gang-raped' and no complaints would follow as 'the women there would enjoy it'." "Some women liked being raped, especially leftists, secular, democratic and proletarians," he said. The Wire. Not much different from ISIS. "One should remember that enslaving the families of the kuffar - the infidels - and taking their women as concubines is a firmly established aspect of Shariah, or Islamic law," the group announced in the ISIS publication the 'Dabiq'. CNN. "The evolution of Hindutva in politics is the antidote to the creation of vote banks and appeasement of sectional interests. Hindutva means justice for all." bjp.org. Not for victims of rape or sexual assault, obviously. Photo ops only.   

Only two exceptions.

 "Three months after CJI Surya Kant's 'cockroach' remark sparked a storm and gave birth to Cockroach Janta Party,... Supreme Court...sought responses from government and CBI on a PIL (public interest litigation) against those who commercially exploited the remark through clever editing of virtual court proceedings and draped it with a meaning that was never intended." TOI. "The Central Bureau of Investigation (CBI) is the domestic crime investigating agency of India" wikipedia. Surely, CJI Surya Kant knows exactly what he said and what he meant? How are the government and CBI going to read his mind? "There are youngsters like cockroaches, who don't get any employment or have any place in profession. Some of them become media, some of them become social media, RTI activists and other activists and they start attacking everyone," are the exact words quoted in TOI. This is mainstream media and the meaning seems quite clear. The government's own, "The Periodic Labour Force Survey (PLFS) 2025 annual report shows that 25% of India's youth (15-29 years, Gen Z) fall into the 'Not in Education, Employment or Training' NEET category. These youth are idle, doing nothing. Further, the unemployment rate, which counts those actively seeking employment" was 11.8% among graduates and 11.3% among post-graduates, wrote Subhash C Garg. "Shockingly, 40% of all youth (15-29 years) in the workforce are unpaid family labor. In 2024, about 28 million unemployed youth were looking for jobs; and about 100 million educated youth (mostly women) have stopped looking," wrote Profs Santosh Mehrotra & Jajati Parida. Whose fault is it that the economy produces no jobs? Is there no sympathy for the millions of young people looking at an empty, frustrating, blighted future? In May 2013, "A packed New Delhi courtroom sat in rapt silence this week as an irate Supreme Court judge denounced the elite CBI as 'caged parrot' and 'it's master's voice'." And "Justice RM Lodha loudly berated the attorney-general, the government's top lawyer, for what he said was clear evidence of interference in a CBI inquiry." Reuters. During the Emergency (1975-1977), "In what is now widely regarded as one of the most courageous judgments in Indian judicial history, Justice HR Khurana held that even during an Emergency, no person could be deprived of life or liberty without legal justification. He asserted, 'The question is not whether personal liberty can be restricted, but whether the rule of law can be entirely silenced.' He categorically stated that even the President could not suspend the rule of law or legal remedies guaranteed under the Constitution." He was denied promotion to Chief Justice even though he was the senior most judge. Law Trend. In August 2017, the Supreme Court "overruled 'expressly' the four-decades old controversial Emergency era verdict by which citizens were denied the right to approach a court to challenge detentions during the proclamation." FE. And yet, today, without declaring an Emergency, people are detained for years under the notorious Unlawful Activities (Prevention) Act (UAPA) without any evidence of wrongdoing. "For all India figures, we have 2% to 6% conviction, meaning thereby that there is a 94% to 98% possibility of acquittal in such cases in the country. In so far as the Union Territory of Jammu and Kashmir is concerned, the annual rate of conviction is always less than 1%," observed Justices BV Nagarathna and Ujjal Bhuyan in May 2026. In July, when a lawyer approached the Supreme Court on the matter of police brutality against unarmed protesters, a bench headed by Chief Justice of India (CJI) Surya Kant told the lawyer, "Don't waste our time, and don't waste your time." When the lawyer offered to show videos as evidence he was told, "We are not interested in videos; we don't have time to watch." HT. Incarceration for years without evidence is fine, but there is no time for real evidence. Justice Khanna and Justice Lodha had the guts to stand up for principles and the dignity of law. They should not be held up as exceptions. Sadly, they are.          

From $3,000 to $14,000 in 20 years.

"According to Amitabh Kant, former CEO of NITI Aayog, India needs to grow at around 9% annually if it is to become a developed economy by 2047." Compounding at 9% per year the economy will double in size every eight years, and we need to attract at least $180-200 billion in foreign direct investment annually, but that will need predictable policies. "Uncertainty over taxation, customs procedures, regulatory decisions, dispute resolution and approvals can affect the economics of long-term investment." CNBCTV18. As per the World bank's classification, a developed, or high income, country is one with a gross national income (GNI) per capita of over $13,935 per year. India's GNI per capita was just $2,760 in 2025. Bangladesh was higher at $2,840, but Pakistan was much lower at $1,500. World Bank. "Foreign investors see impressive things in India." "Yet India remains a paradox: It can attract much more foreign investment, but it will not." "A TeamLease report found that setting up a stand-alone solar plant requires 2,735 compliances. Almost 40% of these are labor related." Firing workers is difficult. So, India needs labor reforms. But, "Reforms create losers in the short run, while benefits accrue only later."As Jean Claude Juncker said, "We all know what needs to be done. We just don't know how to get re-elected after doing it," wrote, Swaminathan Aiyar. Policy decisions should not be based on a whim. "India's disastrous demonetization in 2016 offers a striking example. With barely four hours' notice, 86% of the country's currency in circulation ceased to be legal tender." "The economic damage was enormous: markets were thrown into disarray, India's economic growth slowed for four years and youth unemployment surged to 26%," wrote Prof Kaushik Basu. To attract foreign exchange, "The Reserve Bank of India (RBI) unveiled a package centered on foreign-currency deposits from non-resident Indians." "The RBI also introduced incentives aimed at external commercial borrowings." These are short-term measures so the government is considering increasing foreign direct investment (FDI) from Rs 50 billion to Rs 150 billion without Cabinet-level scrutiny. "Foreign investors have long argued that India's dispute-resolution architecture is less attractive than competing destinations. The government is now examining changes that could make the investment regime more investor-friendly." ET. But why has it taken a possible currency crisis to agree to rules for fair trade? Why didn't we learn in 2021 when, "In a setback to India, Britain's Cairn Energy has secured a French court order to seize some 20 government properties in Paris to recover a part of the USD 1.7 billion due from New Delhi following an arbitration panel overturning levy of retrospective taxes." NDTV. Since oil is priced in dollars, a higher price of crude will cause a higher outflow of foreign exchange and a weaker rupee. That is why the government is discussing how to be reasonable. There is also China. China had a stockpile of 1.3-1.5 billion barrels of oil, and responded to the supply shock due to the Iran war by "sharply cutting crude imports, restricting exports of refined fuels and drawing on domestic inventories." "June deliveries plunged more than 41% from a year earlier to 7.12 million barrels per day (bpd)," which "allowed the global economy to absorb the loss of over 13 bpd of Middle Eastern exports." ET. China helped us by keeping the price of oil down. But what if China increases buying to replenish its oil stores, in addition to its daily imports? The Indian government has to understand that it has to obey rules if it wants foreigners to invest here. Cannot reply with pellet guns on foreigners as they did on Indian students (NDTV). Be trustworthy. If you can. 

John Kennedy you are not.

"Prime Minister Narendra Modi urged graduating engineers at IIT-Delhi...to measure their careers against the country's needs rather than salary slips or startup valuations, telling students that 'the basis of every decision of yours should be what the benefit to the country will be'." HT. Shouldn't the PM set an example? "PM Modi's foreign visits have incurred over Rs 5.57 billion in expenditure since 2021, the Centre informed the Rajya Sabha, with nearly Rs 1.87 billion spent in 2025 and Rs 745.8 million so far in 2026." TNIE. Mr Modi should enjoy foreign junkets, while the young should serve for nothing. "And so, my fellow Americans: Ask not what your country can do for you - ask what you can do for your country," said President John F Kennedy on 20 January 1961. shapell.org. If Mr Modi is trying to be Kennedy, perhaps he should remember that Kennedy enlisted in the US Navy during World War II. "Commanding the Patrol Torpedo Craft (PT) 109, Lieutenant, Junior Grade, John Kennedy participated in the early campaigns," and "On August 2, 1943, as PT 109 was running silent to avoid detection it was struck by Japanese destroyer Amagiri." PT 109 was cut in two and the crew thrown in the water. Kennedy towed injured crew member Mc Mahon 4 miles to a small island. jfklibrary.org. While Kennedy risked his life for his nation, early this month the Delhi Police fired pellet guns at unarmed protesters, blinding some permanently (BBC). Mr Amit Shah, Home Minister since 2019, "hasn't undertaken any foreign visits, neither official nor personal." "According to Shah's website, he hasn't gone on a foreign visit since 2006. It doesn't, however, say which country or countries he had visited before 2006." The Telegraph. While asking students to sacrifice for the country, India's "Education accounts for 4.1% of GDP and 14.2% of public expenditure, down from 15.7% in 2015 and below UNESCO's 15% benchmark." "The funding situation in education becomes more conspicuous as it trails behind in terms of secondary school completion as well." The rate for Classes IX-XII is at 51% compared to the target figure of 84%. ET. "Academic and research freedom in Indian educational institutes and universities is at its lowest since 1900, even below the Emergency years between 1975 and 1977, an international ranking has highlighted." India ranks below Pakistan, Iraq, Sudan, Syria and Yemen. The Print. In September 2025, "Five years after the implementation of National Education Policy (NEP) 2020," "The recently published PARAKH (Performance Assessment, Review, and Analysis of Knowledge for Holistic Development) 2024 survey report, has highlighted significant learning gaps among students in different grades in all subjects, including science. The average scores of class 9 students were only 40% in science and 37% in math," wrote Anuradha De & Amarjeet Sinha. "According to the India Employment Report 2024, the youth make up 83% of the total unemployed." There is a huge demand for coaching centers to prepare for government jobs or elite institutions. "It is an industry worth an estimated $10 billion." And yet, in Maharashtra, "it was revealed that there are 300 colleges, fully funded by the state, that receive zero applicants. These colleges receive grants for staff and faculty salaries but have no students," wrote Ajit Ranade. Clearly, some in the government are pocketing huge sums without accounting for them. When asked how Abhijeet Dipke, leader of the Cockroach movement, financed his studies in the US, he said, "I am ready to show documents related to my education loan and the scholarship letter. I also request Modi to show his degree." If Mr Modi wants people to follow his advice he should lead by example. Which, as we know, is better than precept (askfilo,com). Action, rather than hot air. Thank you.

Can't displease the boss.

"Even with the removal of taxes on overseas purchases of sovereign bonds, relative yield differential and the current state of the policy cycle and INR expectations do not provide much comfort with respect to prospects of debt flows," SBI Funds said. "The assessment comes as SBI Funds also expects the Reserve Bank of India (RBI) to remain on an extended pause on interest rates," as "The RBI's repeated emphasis on core inflation also indicates a greater tolerance for headline inflation remaining above the 4% target." The Hindu. In this decade, "Beijing has dropped export prices nearly 20%, producing a 40% surge in volume." China's trade surplus jumped 20% to a record $1.2 trillion last year. "Across Asia, nations where Chinese imports are rising fastest, also tend to have the weakest job growth. India has been particularly hard hit recently, and has suffered a sharper decline in manufacturing, than many Asian rivals." TOI. What is the connection between the SBI Funds report and Chinese perfidy? India's "Retail inflation based on Consumer Price Index (CPI) in June, was 4.38%." It was 3.93% in May. pib.gov.in. But, "All India Wholesale Price Index (WPI) for June 2026 was 9.87% on a year-on-year basis, compared to 9.68% in May 2026." "Across groups, 'Mineral oils (containing Petroleum Products), 'Food Articles', 'Manufacture of Basic Metals', and 'Manufacture of Chemicals and Chemical Products', have been major drivers of WPI inflation in June 2026." pib.gov.in. India's trade deficit with China was a record $116.12 billion in 2025 (understandupsc) and is already at $67.1 billion in the first half of 2026 (ET). Cheap Chinese imports may explain why the CPI inflation has risen a little to 4.38% while input costs, as shown by the WPI inflation, have risen at 9.87%, near double digits. "Central banks in many major emerging markets have already hiked their rates." But, "The term 'core inflation' (excluding food and fuel inflation) has been mentioned eight times in Governor (of RBI) Malhotra's statement," wrote Mythili Bhusnurmath. In May 2026, Poonam Gupta, Deputy Governor in charge of monetary policy, pointed out, "Of the 48 countries that currently operate under an [inflation targeting] framework, 47 target headline inflation." In India, "The government...extended the mandate for the RBI to maintain CPI inflation at 4%, with a tolerance band of 2 percentage points on either side, for another five years ending 31 March 2031." TOI. So, the mandate is for 4%, with tolerance for an occasional slippage, and not tolerance forever, which the RBI seems to think. India's GDP grew 7.7% in 2025-26 which should "tighten output gap and lift inflation. Instead India's 'refined' core inflation, which excludes food, fuel and precious metals to better capture domestic demand conditions, fell...from around 6% in early 2023 to 2.1% in the first quarter of 2026." This was because of a combination of productivity expanding faster than domestic demand, lower food prices restrained household inflation expectations, which may have suppressed demand for higher wages, lowering of GST rates in late 2025 and "China has exported disinflation to much of the world." "But policymakers should avoid drawing structural conclusions from an exceptional period," wrote Dhiraj Nim. Markets have inferred a hierarchy of objectives which seems to guide the RBI. "Many investors would describe the hierarchy roughly as: exchange rate stability (supporting the rupee), government's borrowing costs, growth and finally inflation," wrote Puja Mehra. Annual CPI inflation in the US was at 3.5% in June. bls.gov. A higher rate of inflation relative to the US would lead to a weaker rupee against the dollar and so the difference in yields between US Treasuries and GOI bonds should be higher than it is to compensate for the expected fall in the rupee. Foreign investors are shunning GOI bonds because the RBI is refusing to raise rates. That is what SBI Funds is trying to explain. But without upsetting the RBI. Because the RBI is the regulator. The Boss.   

Europe having to deal with heat and VaaS.

"SAP has paused most travel and hiring. Europe's largest technology company has introduced the measures as it increases investment in artificial intelligence (AI), telling employees it needs to 'be disciplined in how we spend'." "The company added that expanding AI use across its operations has also increased token usage and related costs as more AI-powered services are deployed." TOI. "Record temperatures across Europe are piling fresh pressure on food prices, supply chains and heavily indebted economies." Heat is affecting agriculture and supply chains are getting disrupted because of the conflict in the Strait of Hormuz, as well as "Major waterways, including the Rhine river, are suffering from exceptionally low water levels." "The disruption risks adding to inflationary pressures," and "Heatwaves, droughts and wildfires across Europe are also hitting agriculture." "That leaves the European Central Bank and the Bank of England balancing inflation risks from extreme heat against the potential drag on economic growth." Reuters. One of the biggest economic problems may be that all European countries became wealthy by plundering, raping and slaughtering their colonies on every continent (wikipedia) and can't do that any more. European nations are still suffering some hangovers for their colonial sins. "Tens of thousands of migrants who crossed into Spain's tiny Ceuta territory returned voluntarily to Morocco," as "Ceuta's president put the number of migrants at 60,000, which was equivalent to 70% of the territory's population." Global News. Three days ago, "Italy has announced the suspension of free movement with Spain in response to a significant influx of migrants into the Spanish enclave of Ceuta from Morocco." "Following Italy's announcement, 22 EU member states signed a letter supporting Italy's position, indicating a shift towards increasing solidarity among nations over migration issues." Indian News Network. In retaliation, "Spain has imposed border controls on all air and sea travel from Italy as a row between the two EU countries intensifies." "Italy's decision to suspend Schengen for a month was backed by Finland and Denmark, while the Czech Republic called for Spain's membership to be temporarily suspended." BBC. The immigrant population has reached 21.8 million in Germany which is 26.3% of the population. "Police counted 13,920 rape cases in 2025. This is a 9% increase from 12,771 cases in 2024. In 2018, there were 8,106 cases." In Bavaria, "Syrians have a crime rate 16 times higher than German citizens. Afghan nationals have rate 14 times higher." etias.com. In Europe teenagers are being hired by, "the Foxtrot Network, an organized crime group with links to the Iranian regime which has become notorious for its violence-as-a-service (VaaS) tactics." Since 2022, the gang is thought to be responsible for 35 murders, as well attacks on Israeli targets "including two involving explosives and hand grenades". "The gang recruits teenagers to carry out the attacks for cash, but it almost never has to pay as they often get caught." BBC. One more reason why Iran needs a regime change. "Saudi Arabia, Turkey and Pakistan have signed a joint defence agreement, saying an attack on one of them would be seen as an attack on all three." BBC. Even Iran will not be able to resist attacks from three fronts. Meanwhile, Republican Senator Ted Cruz is urging arming Iranians who oppose the government. "Cruz first pushed for the US to arm protesters in late January, after Iran cracked down on the country's largest wave of demonstrations in years, killing at least 12,000 people." CBS. Excellent advice. Also target residences of the Islamic Revolutionary Guard Corps (IRGC) and Basij commanders without killing anyone. Get the wives to nag the scoundrels. Even the worst villains cannot resist their wives. Weapons and wives, win-win in war.           

The middle finger of fate.

"The Reserve Bank of India's (RBI) Monetary Policy Committee (MPC) on 05 August unanimously decided to keep the policy rate unchanged at 5.25%, while retaining its neutral stance." "Explaining the decision, the MPC said the economy continues to remain resilient despite heightened global uncertainty, while inflation is expected to rise in the coming months before easing." Real GDP growth rate is projected at 6.7% in 2026-27 and at 7.3% in the first quarter of FY 28 and CPI inflation is expected at 5%. ET. On 29 April, "India's economy remains resilient but faces mounting risks from the Middle East conflict, which has disrupted supplies of energy, fertilizers and industrial raw materials, raised costs and weakened trade, the government's monthly report said." The International Monetary Fund (IMF) raised its growth forecast for India from 6.4% to 6.5% but "risks were tilted towards higher inflation." Reuters. Politicians always want lower interest rates because that lowers the government's borrowing cost. In May 2018, "Turkey's President Tayyip Erdogan called for lower interest rates and described them as the 'mother and father of all evil', triggering a fresh slide in the lira," which fell from 4.2374 to 4.3080 against the dollar." Reuters. The Turkish lira is trading at 47.7026 against one dollar today, less than one-tenth of its value in 2018. in. investing.com. If the value of the currency falls, costs go up, and as costs rise the value falls further. Turkey's inflation rose from 16.33% in 2018, when Erdogan made his brilliant statement, up to 72.31% in 2022 (macrotrends) and is at 31.75% today (tcmb.gov.tr). Erdogan was seen handing out cash to voters at a polling station during elections in 2023. (independent.co). India has not reached Turkey's level as yet but the RBI was forced to raise its policy rate by 40 basis points (bps) in an emergency meeting on 5 May 2022, after holding it at 4% since May 2020, "barely hours before the US Federal Reserve was set to raise rates by 50 (bps)" (TOI), even though the consumer price index (CPI) inflation was raging at around an average of 6.5% (rateinflation.com). No wonder the rupee has dropped from around 76.38 in 2020 to one US dollar (bookmyforex.com) to 95.26 to 1 USD today (xe.com). Also, Prime Minister Narendra Modi transferred Rs 10,000 to the bank accounts of 7.5 million women in September 2025 at a cost of Rs 75 billion (pib.gov.in) just over one month before Assembly elections on 6 and 11 November (wikipedia). Since this unexpected handout would be expected to add to the fiscal deficit the government needs the interest rate to stay as low as possible and the RBI has to raise tens of billions of dollars from non-resident Indians (NRI) at much higher rates (ET) to prevent the rupee from tanking. US President Donald Trump "for months publicly pressured the Federal Reserve to slash its benchmark rates, claiming it would be 'Rocket Fuel!' for growth and make housing affordable." ABC. But Trump appointee "Federal Reserve Chairman Kevin Warsh said on 29 July that the US central bank has no higher 'soft target' for inflation and is determined to meet its longstanding 2% goal despite leaving rates unchanged amid elevated inflation readings." Reuters. Politicians just want to win elections but the central bank is supposed to make calculated decisions balancing growth, inflation and the currency. JP Morgan is pricing in a 25 bps rise in US interest rate in the Fed's September meeting. Will the RBI hold a panic meeting as it did in 2022? "RBI's rate policy panel has failed to read what's written on the wall, wrote Mythili Bhusnurmath. "The moving finger writes; and having writ moves on," wrote Omar Khayyam in the 12th century. Goodreads. Khaiyyam was writing about the finger of fate. RBI should beware. Hope it's not the middle finger. 

Just a by-election.

Prashant Kishor, chief of the Jan Suraj Party won a by-election from Bankipur in Bihar by beating the BJP candidate Neeraj Kumar by 19,324 votes." Kishor received 64,151 votes while Kumar got 44,827. NDTV. Kishor's party failed to win a single seat in the assembly election held in November 2025, in which the BJP won the largest number of seats with 89 while its ally JD(U) came second with 85 seats. wikipedia. Bankipur was considered a BJP bastion, having held it continuously since 1995. TOI. Ironically, Prashant Kishor, a political strategist, helped Mr Narendra Modi win in Gujarat and also the general election in 2014, when the BJP won a majority in the Lok Sabha with 282 seats (wikipedia) and made Mr Modi the prime minister. It would be premature to read too much into one by-election result. However, "Most by-elections are indeed insignificant but political circumstances sometimes transform them into historical milestones," exulted The Wire. "The BJP stands on two pillars of Modi and Shah. Even Municipal elections are won using their magic, money and muscles." But, "Modi and Shah are living in a delusion if they think the brutalities against the students (The Diplomat) and theft at Ram temple (BBC) will not bruise their image." Apart from the BJP, "What's most shocking, however, is the wild speculation on social media about the absence of Gyanesh Kumar magic in these elections." Mr Gyanesh Kumar is the Chief Election Commissioner of the Election Commission of India (eci.gov.in), which must be seen to be completely impartial and honest. If the social media is so contemptuous of Mr Gyanesh Kumar, it is a sad decline from Mr TN Seshan "who believed that if the Constitution had entrusted him with power, it was his moral obligation to use each of it without any fear, favor or hesitation." Politicians feared and hated him but, "Seshan's tenure transformed the Election Commission into one of the most respected institutions in India. Voters began to trust elections again." (Luv My India). "Bankipur stands out as an unusually educated, middle-class, and upper-caste oasis, in a poor rural state that's heavily fissured along caste lines." Bankipur is home to students, coaching centers, middle-class salaried households, small traders and migrant workers." "In recent decades, Bihar's elections have been fought between an NDA bloc (BJP and its allies) (wikipedia) that combined Hindutva and women-centric welfare, and RJD-led bloc that spoke the language of Mandal-inspired (wikipedia) social justice." Prashant Kishor campaigned on "education, jobs, out-migration, corruption and the quality of public services and leadership," wrote Uday Chandra. While an old steel bridge over a river at Ranikhet, which was fabricated at a foundry in Liverpool, England, in 1927, is still carrying heavy traffic, "in Bihar, 26 moderns concrete bridges have collapsed in the last five years. Among these, some collapsed during construction, and one even during the inauguration," wrote Gautam Bhatia. After the leak of questions of the recent NEET examination (BBC) students see no future for themselves. They feel they have nothing to lose and so have lost their fear, while the regime cannot afford to lose power because they will be held to account for all their crimes. Already a Congress leader has threatened that BJP leaders will need protection. DH. First, Education Minister Dharmandra Pradhan was forced to resign (BBC) and now a citadel has fallen. When children chant "56-inch ka chhota bandar, bhaag Narender, bhaag Narender" (56-inch small monkey, run Narender, run Narender) (The Wire), your dignity is completely ruined. Time to go. Preserve your self respect. If you have any.