Reduced to zero

"Cockroach Janta Party...withdrew its call for a march on 5 September after Supreme Court, on the Centre's request, quashed all FIRs registered across the country against students who participated in the NEET (National Eligibility cum Entrance Test)." The government gave three assurances: the Centre would not pursue FIRs registered between July 20 and July 25, no fresh FIRs would be registered in connection with the matter and the government would pay compensation to students who died by suicide allegedly in connection with NEET paper leak. TOI. FIR, or the First Information Report, is a document prepared by the police to record information about a cognizable offence. wikipedia. Indian police, controlled by politicians, registered FIRs against unarmed students but not against the use of lethal weapons by the fascist state. The Delhi Police was forced to register an "FIR in the case of a 19-year-old student protester who suffered pellet-gun injuries during the 20 July march on Parliament as Rahul Gandhi, accompanied by the victim, Sahil Lochab, staged a sit-in outside a Delhi Police station, refusing to budge until an FIR is filed in the case." NDTV. And yet Noida Police filed a 'Zero FIR' against a minor girl who apparently used insulting language against Prime Minister Narendra Modi. "A zero FIR is one recorded at a station that has no local jurisdiction and then transferred onward, in this case, to Delhi." "The sections invoked were 352, 353(1) and 356(1) of Bharatiya Nyay Sanhita, dealing with insult, public mischief and defamation respectively." "All of them descend from Macaulay's Penal Code enacted in 1860," wrote Saurav Gupta 

and Aditya Prasanna Bhattacharya. The Bharatiya Nyay Sanhita was enacted by this Bharatiya Janata Party (BJP) government in 2023. wikipedia. Bharatiya means 'belonging to Bharat' or the Republic of India. Wiktionary. Ironic that the party which claims to be for the Indian Republic is using the draconian colonial Indian Penal Code (IPC), drafted by Thomas Babington Macaulay (wikipedia) to force allegiance to the British monarch, to oppress independent Indians. The 15-year-old girl against whom the coercive Zero FIR was registered recorded a video in which she said, "Modiji, you have turned my life into hell. I am unable to leave my home and have had to hide my face wherever I go." The Wire. A 75-year-old man has let loose his attack dogs on a child. How vindictive and small-minded can you get? In his Independence Day address from the ramparts of the Red Fort in Delhi, Mr Modi said, "We have succeeded in getting rid of armed Naxals in the jungles, but 'dimagi Naxals' (intellectual Naxals) are looking for opportunities to create violence, unrest..." NDTV. "The least we expect from an elected premier in a democracy, is that he is loyal to his people, that he protects them and respects them," "But from the beginning of his long tenure PM Modi and his speech writers have concentrated on slighting and even abusing citizens who raise their voices against specific policies or inaction - Khan Market Gang. Tukde Tukde Gang, anit-nationals and so on," wrote Neera Chandhoke. "It will cost you very dearly," warned Union Minister Kiran Rijiju to "protesters and Khalistani supporters who put their feet on the Indian national flag and tore it outside New York Madison Square Garden,...when people gathered there to hear RSS chief Mohan Bhagwat's address." NDTV. He doesn't know that "The US Supreme Court has ruled that burning the American flag can be protected under the First Amendment when it is used as a form of political expression." Just Criminal Law. "Sticks and stones may break my bones, But words will never hurt me," is a children's rhyme. In India, a 75-year old man is using police batons and pellet guns against slogans from children. Zero FIR, zero respect, zero dignity. How embarrassing. For us.       

Indians everywhere in the world.

"From Europe to Japan, India is building a wider network of agreements and arrangements to facilitate the movement of its workers abroad. The prize for India is just not more jobs for its workforce, but potentially more dollars flowing home through remittances. The opportunity is growing as ageing populations and shrinking work forces leave countries across the world facing shortages of skilled workers." ET. Indians are cheap - sell them for dollars. Yesterday, one Indian was among 12 killed by a massive aerial assault on Ukraine by Russia. TOI. "227 Indian nationals have been recruited into the Russian armed forces, of whom 139 have been discharged while 51 have passed away, Foreign Secretary Vikram Misri said. NDTV. That leaves 37 Indians unaccounted for, probably still serving in the Russian army because they can't find jobs back home. "Indians accounted for seven of the 16 seafarers - nearly 44% - killed in attacks on commercial vessels during the Strait of Hormuz crisis between 1 March and 14 July 2026." When Indians are not being killed, "In 2025, Indians constituted 18% of all seafarers abandoned by shipowners worldwide, making them the worst-affected nationality for the second consecutive year." NDTV. In June, "An Indian man killed in an Iranian strike at Kuwait airport was coming to his home in Madhya Pradesh's Ujjain to attend his niece's wedding." NDTV. It seems that if there is an explosion in any part of the world Indians will definitely be among the casualties. Indians are the cheapest. It may be because the Indian state does not recognize Indians as citizens. In July, a Division Bench of Justice Debangshu Basak and Justice Ajay Kumar Gupta of the Calcutta High Court "held that documents such as Aadhaar cards, voter identity cards, PAN cards, bank records and ancestral land records, though important indicators of identity and residence, are not conclusive proof of citizenship." CJP. Even a passport, that requests other countries to "allow the bearer to pass freely without let or hindrance and to afford him or her every assistance and protection if he or she may stand in need," does not prove citizenship. "Amid growing public confusion over the use of passports as proof of citizenship and eligibility for government benefits, the Ministry of External Affairs (MEA) has clarified that an Indian passport is strictly a travel document and should not be treated as conclusive proof of citizenship." NDTV. Last month, "Former Indian diplomat Navdeep Singh Suri questioned the Election Commission of India's (ECI) Special Intensive Revision (SIR) process in Punjab, saying he was made to establish his Indian citizenship despite having represented the country abroad. Suri served as India's ambassador to the UAE and Egypt and high commissioner to Australia." HT. Why should any country accept our ambassador as the representative of the government (wikipedia) and take him seriously if he is not a citizen of the country he represents? In August, "amicus curiae and a senior advocate Vijay Hansaria has informed the Supreme Court that there are serious criminal cases against chief ministers of 14 of the 28 states, a list topped by Telangana's A Revanth Reddy who faces 89 cases." TOI. And, According to a report submitted to the Surpreme Court by senior advocate Vijay Hansaria, at present 4,192 cases are pending against incumbent and former parliamentarians and legislators, while 519 of these cases are pending for more than a decade." The Wire. Criminals ruling India. No one is a citizen. So, sell people for dollars. Very cheap. 

Exemplary by design.

"The Indian economy grew at 7.8% in the first quarter (April-June 2026)of the current fiscal year braving what is described as the largest oil shock in the history of capitalism." "March quarter growth now stands at 8.6% compared to 7.8% according to the data released by the NSO (National Statistical Office) in June." "India's exemplary GDP growth of 7.8% during Q1 of FY 2026-27 is a herculean feat," exulted Prime Minister Narendra Modi. HT. Calling it the "largest oil shock in history" is an exaggeration. In 1974, the price of crude jumped from $24 to $56 per barrel because of the Arab oil embargo in 1973. In 1979, oil went from $56 to over $125 because of the Iran revolution and in 2008, the price of crude jumped from $118 to over $165 per barrel and, coinciding with the subprime crisis in the US, led to the Great Recession. (Investopedia). US consumer price inflation rose to 12.3% in November 1974, came down to a low of 4.9% by October 1976 and then soared to 14.8% in March 1980. US Inflation Calculator. In fact, except for two or three months in early 2026, when the price of India's import basket of crude oil briefly spiked above $150, the price has stayed comfortably below $100 per barrel. India Macro Indicators. As always, things are not as we are told. "As per a report by Bernstein, company earnings, domestic consumption, and asset valuation are increasingly influenced by regulatory interventions, tax incentives and substantial government transfers rather than underlying productivity gains." "Since financial year 2023, the government allocated over Rs 287 billion to various manufacturing industries" under the Productivity Linked Incentive (PLI) schemes, and "Rural spending resilience persists largely due to government direct transfers rather than productivity gains of farm income expansion." ET. If the economy is sizzling why is the rupee so weak? In July the Reserve Bank of India (RBI) sold $7 billion to defend the rupee. "The RBI intervened across both onshore and offshore markets as the currency approached the record low." ET. The first vulnerability is geopolitical. "Any prolonged disruption around the Strait of Hormuz would push up crude oil prices." The second vulnerability is that foreign portfolio investors (FPI) pulled out roughly $28 billion from Indian equities "despite bringing in a net $2.1 billion in July," wrote Prof Saumitra Bhaduri. "India's 10-year government bond yield is around 6.87%, while the US 10-year Treasury yield is in the 4.6-4.7% range, leaving a spread of roughly 2.1-2.3 percentage points, or 210-230 basis points. The narrowing matters because the yield spread is one of the factors that overseas investors consider when deciding whether Indian bonds offer enough compensation for the currency and other risks involved." MC. According to the RBI, "External debt at the close of fiscal 2025-26 stood at $762.8 billion, an increase of $26.3 billion over the level recorded at the end of 2024-25." It was up by 1% to 20.8% of GDP. However, the higher value of the dollar against the rupee is worth $24.6 billion, so effectively the debt increase was $51 billion. Mint. "In 2025-26, India recorded $334 billion trade deficit. Of this, 120 billion came from petroleum products and $214 billion, nearly double, from non-petroleum products. Electronics trade deficit stood at nearly $69 billion." Mint. For comparison, Vietnam's trade surplus with the US in the first six months of the year stood at $114 billion, ahead of China, Mexico and Taiwan. ET. And, despite "herculean growth" India remains the sixth largest economy in the world. worldometers. The brokerage firm Systematix estimates "a new average annual depreciation path of 6.5% of the currency." "Without aggressive RBI intervention, the Indian currency would have crossed the 100-per-dollar mark." ET. So, in dollar terms the GDP growth is a minuscule 1.3% (7.8-6.5). It's the currency that determines our rank. How long can the RBI support it? Before it runs out. Of cash.   

Still most popular.

"Prime Minister Narendra Modi introduced Saptadhara from the Red Fort on 15 August. This concept includes seven streams of national strength that help India achieve its Viksit Bharat goal." Yoga, Ayurveda, our spiritual centers and festivals, Indian literature, music, dance and cinema, cuisine, handicraft and handlooms, democracy, scientific progress, digital systems, space program and the global diaspora "further enhance its global reputation" and create millions of jobs. TIE. That is a total of 16 streams. On 21 August, "the saffron flag-bearing men climbed Gate 4 of Jadavpur University in Kolkata and used its lotus-ringed emblem as a foothold," "The emblem, designed by Nandalal Bose, shows three flames surrounded by a blooming lotus." Bose was one of Bengal's most renowned artists. The irony was: "Even a lotus was not safe from the foot soldiers of lotus politics." The Wire. Watch goons rioting while eating butter chicken, whose origins are being fiercely debated at Delhi High Court (Reuters), should be irresistible to tourists. "Modi talked of complete manufacturing value chains, AI, quantum computing, robotics, 6G, high-speed rail, inland waterways, drones, hypersonic weapons, green manufacturing, fisheries, tourism and yoga." "That is precisely the problem. Saptadhara is a wishlist masquerading as strategy," wrote Swaminathan SA Aiyar. Yesterday, "PM Modi was conferred Uzbekistan's highest state honor, the Order of 'Oliy Darajali Dustlik', by President Shavkat Mirziyoyev during his two-day state visit to the central Asian country." TOI. The BJP published a list of 35 international honors collected by Mr Modi. ET. While we may not understand the meanings of many of the awards, Slovakia's 'Order of the White Double Cross, First Class' is easy to comprehend. Last week, "India had just one request ahead of PM Modi and US President Donald Trump's meeting two months ago - that the press not be given an opportunity to ask them questions, said Washington's ambassador Sergio Sergio Gor." The Wire. Trump forgot and held a press conference for 45 minutes. "Everything was on the table". HT. Not easy to sit silently for 45 minutes when, just yesterday, "In the 137th episode of Mann Ki Baat (dialogue of the mind), PM Modi highlighted grassroots initiative and individuals creating change through technology, social action, entrepreneurship and community participation." TOI. Thankfully these individuals are not "dimagi Naxals (ideological Naxals)", who are embedded in the power corridors and need to be "identified and isolated" so the youth of the country can be brought together for a developed India. NDTV. Naxals are Marxist insurrectionists, named after Naxalbari in West Bengal, who waged an armed struggle against the Indian state since 1967. wikipedia.  "The Cockroach Janta Party (CJP) took to social media to slam the Karnataka BJP over a post targeting 'Dimagi Naxals',"..."warning that the post amounted to a call for 'mass genocide'." The Karnataka BJP created a meme featuring a scene from the movie KGF Chapter 2, in which it repurposed a scene to "depict the shooters as its different state units, while portraying their rivals as 'Dimagi Naxals'." CJP's Saurav Das wrote on X, "The ruling party is threatening to shoot the country's youngsters dead. Pure evil. They seem to have lost the plot." HT. Mr Modi remains the nations choice for prime minister for 48.7% of those asked in the Mood of  the Nation Survey. India Today. Still most popular for prime minister. And 35 awards. Unbeatable?      

Three years could be a long time.

"The Reserve Bank of India (RBI) plans to buy back government securities of Rs 300 billion on 3 September, with all securities listed in the auction maturing in FY27. The aim of the buyback is likely to reduce the redemption burden on the government in the next fiscal year. Securities worth Rs 6 trillion are scheduled to mature." ET. The government sells bonds to fund its fiscal deficit, which is "the difference between what a government spends and what it collects in revenue, often leading to borrowing to cover the shortfall if spending is greater." (Investopedia). As on 28 February 2026 the RBI held Rs 21.34 trillion of government paper (including treasury bills), an increase of Rs 5.76 trillion over Rs 15.58 trillion in March 2015. "An increase of this scale has never been witnessed." "RBI's holdings of government paper have increased: this is tantamount to deficit monetization. But income on securities adds to its surplus, which is transferred to the government," wrote Madan Sabnavis. Deficit monetization is when a central bank creates new money to finance government spending instead of by selling bonds to private investors or raising taxes. "It is prohibited in many countries, because it is considered dangerous due to the risk of creating runaway inflation." wikipedia. In May, the RBI "transferred a record Rs 2.87 trillion ($30.1 billion) as dividend to the government, compared with last year's Rs 2.69 trillion." "The annual report showed interest income rose 11.81% to Rs 2.36 trillion in the financial year ended March. Interest earned on rupee bonds climbed 37.66% to Rs 1.18 trillion." The RBI also gains from selling dollars at a rate higher than the buying rate and transfers those gains to the government. The Print. "India's central bank sold about $7 billion to defend the rupee last Friday (28 August), in what was one of its largest direct interventions in months, according to people familiar with the matter," ET. So, the RBI prints money to buy government bonds, which is like transferring sacks-full of new notes to the government, and then transfers the interest from those bonds to the government as well. This increase in liquidity results in a drop in the value of the rupee, so the RBI sells dollars to support the rupee, and transfers apparent gains from the difference in sale/purchase values to the government. For us ordinary citizens, not as brilliant as RBI officials, this seems like magic. There is only a teeny weeny problem: the RBI can print rupee notes but not dollars. "India's foreign exchange reserves climbed to a record high of $729.33 billion in the week to 21 August." "In June, India unveiled a raft of measures to boost dollar inflows, including discounted hedging facilities for overseas borrowings by state-run firms and banks, and a free-of-cost hedging facility for banks to raise overseas Fx deposits." Reuters. Banks are paying much higher rates of interest on Foreign Currency Non-Resident Bank (FCNR B) deposits from expatriate Indians, with HDFC Bank paying 6.25% on 5 year USD deposits, while IDFC First Bank is offering 6.75% for 5 years. The RBI is buying these dollars from banks and will repay them at the same exchange rate at the end of 5 years, thus absorbing the full cost of rupee depreciation. Would it mean more printing of rupee notes? "In the early 1950s, the government started issuing Treasury bills to the central bank for funds to bridge its deficit." This continued for four decades until, "As a part of the 1991 reforms, the government and RBI decided to stop this financing arrangements." "In 1997, the government and RBI signed an agreement that stopped this practice of deficit financing." The India Forum. Borrowing from the IMF would have been cheaper but electoral suicide. So they are borrowing at huge costs because five years will take repayment to beyond the next general election due in April 2029 (wikipedia). Till then we are back to the 1950s. There are still three years to 2029. They think they are being clever. Perhaps, too clever.     

Poor Iranians.

"President Donald Trump arrives at an awkward moment for his presidency on Friday as the US-Israel war against Iran reaches the six-month mark," "And this week his administration said it would turn its focus to increasing economic pressure - rather than military action - to try to finish off Iran." ABC News. Trump must surely have consulted with armed forces generals before declaring war against Iran and it seems that US generals, lulled by their dependence on big bombs, have little clue about reading their enemy and devising strategy accordingly. Not only are they incapable of fighting a war, they could not even withdraw from Afghanistan in an orderly fashion (wikipedia) after then President Joe Biden announced on 14 April 2021 that a drawdown of all 2,500 US troops would begin on 1 May and conclude on 11 September 2021, the 20th anniversary of the war (war.gov). Such was the chaotic incompetence that, "Approximately $7 billion of military equipment the US transferred to the Afghan government over the course of 16 years was left behind in Afghanistan after the US completed its withdrawal from the country in August." "It included aircraft, air-to ground munitions, military vehicles and other materials, according to the DoD report." CNN. In Vietnam the US lost despite the death of "as many as 2 million civilians on both sides and some 1.1 million North Vietnamese and Vietcong fighters." Britannica. On the other side, Iran's Ayatollahs and the Islamic Revolutionary Guards Corps (IRGC) commanders probably thought that the midterm elections on 3 November 2026, with all 435 seats in the House of Representatives and 35 seats in the Senate up for grabs (wikipedia) will put unbearable pressure on Trump to accept their terms for a deal. Yesterday, "Iran is preparing a list of conditions for reopening the Strait of Hormuz," as "A Guards spokesperson said Iran would not allow the Strait to reopen unless Washington lifted what Tehran describes as a blockade of Iranian ports while also paying compensation and removing sanctions." Reuters. In short, total capitulation by the US, even as, "Iran condemned the United States' new economic sanctions yesterday as 'state terrorism' while its Supreme Leader said he is banning acts that could harm 'social cohesion' amid concern that more financial pain could could spark unrest at home." Reuters. Even before the new sanctions, "The rial dropped to 2.02 million to the US dollar as trading opened on currency markets. Iran's official Central Bank rate stood at around 1.5 million rial to the dollar, but the market rate is what most Iranians pay." BNN Bloomberg. We Indians may think that the Indian rupee is collapsing, as the rate of exchange has dropped from 91.07 on 2 March to 95.47 on 28 August 2026 (exchangerates.org.uk) but Rs 100 now buys 2.1 million rials. A fall in the currency of such magnitude must result in skyrocketing inflation so Rs 100 now buys "2 kg of tomatoes, around a quarter of a kilogram of chicken and less than half a liter of cooking oil." Mint. "The Iran war's redrawing of the global trade map is forcing Gulf nations to retool their investment playbook, ploughing capital into infrastructure," as "Gulf governments are looking at ways to create permanent, integrated solutions to get round the Strait of Hormuz." Reuters. Once the alternative routes are in place Iran will permanently lose its leverage over the Strait but will still be vulnerable to blockade by the Americans. It cannot use a nuclear weapon to force Gulf states to use the Strait again or against a US naval blockade. The regime is terrified of losing power because they will have to face retribution for their crimes. Will there be a famine with deaths due to starvation? Pakistan is complaining to the world about India cutting off Indus River water (Dawn) but what use are its nuclear weapons? Iranians will be dying of starvation for something they cannot use. Poor Iranians. How stupid? 

Scare at midnight.

"Austrian entrepreneur Wolfgang Bergthaler, who has tracked India for 22 years, has listed what he believes has gone worse in the country despite its 'incredible progress'. He pointed to worsening air and water quality, unhealthy diets, social media use, and increasingly transactional relationships." "Everything became a business case," he wrote. Even "health, education and friendship etc. feel transactional." "Scrolling social media: Everyone. Always. Everywhere. Non-stop." BT. Agreeing with Bergthaler, "More important than screens are sports centers. More important than PlayStation is the playground. And this will happen only when the youth embrace this approach," said Prime Minister Narendra Modi. His government certainly tries to help. "Between March and July, there was one blocking order every 68 seconds for online content by the government of India. This amounts to around 1,275 everyday, nearly 195,000 in just five months." The Wire. "After the Cockroach Janta Party (CJP) protest mainly involving Gen-Z," Mr Modi is posting reels on Instagram even as late as midnight. Mr Modi's "average engagement increased from 1.19 million to 4.63 million per post, a rise of 289.9% - almost 3.9 times the earlier level." News 18. If the youth follow his advice to "embrace" sports and go offline, who will participate in the midnight gushing sessions? Mr Modi remains the top choice for prime minister with 48.7%, down from 55% in January, of those asked in the India Today - CVoter Mood of the Nation Survey (MOTN) in August. "When Mr Modi became prime minister in 2014, he promised an all-out war on corruption Na Khaoonga, Na Khane Doonga (won't take bribes, won't allow bribes) was the slogan.However, 43% of people polled believe corruption has increased under the Modi government in the MOTN survey." India Today. "Launching a blistering attack on PM Modi" in July, the Congress Party said that the promise was a hoax. "The opposition party alleged that under the prime minister's leadership, it has always been a case of 'khaunga, khane doonga, aur khilaunga' (will take, will allow and will give bribes)." DH. Although met with extreme violence, the CJP students' protest at Jantar Mantar in Delhi between 6 June and 25 July, against leak of questions for a selection exam, (wikipedia) has broken the perception of terror created by this government against any sort of protest. As a result, "Across India's social and political landscape, Gen Alpha students - those born between 2010 and 2024 have taken it upon themselves to improve their learning environments" as "hundreds of much younger school students have taken to the streets to highlight their problems. Bringing up issues such as no fans, no toilets, no teachers and no infrastructure, not even a proper building." HT. "A six-year-old from a slum in Patna," "Aditya dressed in a T-shirt and denim trousers and sporting a traditional tilak, joined the protest in Patna and later told journalists that Chief Minister Samrat Choudhary should resign." "The child was later taken to a police station and handed over to his mother." The police had to deny claims on social media that Aditya had been arrested." TOI. Very young children have little appreciation of danger but it is really surprising that protective Indian parents are allowing them to join in protests and, such is the reputation of the police in India, that Patna police had to deny they had arrested a 6-tear-old. Like all fascists, who rule by threats and violence, the BJP thinks people have a wrong perception of them and have reshuffled their party officials (NDTV). The problem is they must have loyalists and believers, which narrows the field to known faces. This, naturally, drew a sarcastic comment from the CJP. In a post on X, CJP chief spokesperson Saurav Das said, "Wonderful decision by the BJP on 'reaching out' to the Gen Z. Three claps to the BJP for a marvellous set of Gen Z faces." TOI. Mockery and children have no fear. So, Instagram reels at midnight. Now that's scary. Creepy.       

Restrained by bonds.

"Major central banks, including the Federal Reserve, the European Central Bank and the Bank of Japan, are formally independent, a system known as 'monetary dominance'." However at the Fed's annual fathering at Jackson Hole, Wyoming, "The topic of 'fiscal dominance' will be one of the key questions facing the Fed's new chair Kevin Warsh." Fiscal dominance is when the central bank prints money to finance the government's fiscal deficit, which leads to inflation, currency devaluation and a flight of foreign investors. Reuters. The questions have arisen because, "Total US debt has topped $40 trillion for the first time," as "The Treasury's latest daily cash and balances statement showed total public debt outstanding at $40.07 trillion, a total that includes Treasury securities held by the public for $32.266 trillion and intra-governmental debt holdings of $7.782 trillion." Reuters. "A sell-off in US government bonds is pushing up borrowing costs, which could squeeze households, companies, financial markets and the federal budget alike." "Treasury yields are what the government pays to borrow and higher yields raise federal interest costs." Reuters. "Debt levels in developed countries are reaching thresholds that look increasingly unsustainable," and "In addition, massive borrowing by technology companies to fund a buildout of AI infrastructure is competing with demand for government bonds." "In Europe, Germany's 10-year Bund yield touched its highest since 2011, French yields were at their highest since 2008 and Britain's 30-year borrowing costs neared peaks in May that marked the highest levels since 1998." Reuters. Japan is no exception. "For years Japan exported capital to the rest of the world." Today, "Thirty-year Japanese government bond yields are now above 4%." "Fiscal realities are increasingly influencing pricing." For India, "Domestic fundamentals remain supportive, and Indian bond yields continue to offer an attractive carry advantage relative to many developed markets." MC. "India's 10-year government bond yield is around 6.87%, while the US 10-year Treasury yield is in the 4.6-4.7% range, leaving a spread of roughly 2.1-2.3%, or 210-230 basis points." For a foreign investor, "A simplified way of looking at the trade-off is: India bond yield - US bond yield - expected rupee depreciation - hedging cost = effective return advantage. With yield differential now much smaller than it has been historically, even a moderate fall in the rupee can erode the additional return available from Indian bonds." MC. In the Union budget of 2026, The government is estimated to spend Rs 57.473 trillion in 2026-27, 7.7% higher than the revised estimate of 2025-26. Interest payments account for 26% of the total expenditure, and 40% of revenue receipts." "Fiscal deficit in 2026-27 is targeted at 4.3% of GDP." prsindia.org. The government was helped by a record payout of Rs 2.87 trillion excess reserves by the Reserve Bank of India (RBI) in May 2026. Kotak Neo. The RBI has also kept its policy rate steady at 5.25%, despite projecting headline inflation at 5%. Mint. All this has led to a sell-off of the rupee. And so, "The RBI has decided to shift to a more constant pattern of intervention to support the currency over the past month, thanks to the foreign deposit inflows, whereas previously it would largely step in to curb bigger swings." ET. Bonds are a form of debt. And defaulting on debt is absolute suicide. They act as a stranglehold on governments. No escape.             

Family first.

"India has attracted nearly $73 billion through the Reserve Bank of India's (RBI) special forex swap facility as of 21 August, with most of the inflows coming through Foreign Currency Non-Resident (Bank) or FCNR (B) deposits." And yet, "The rupee was at 95.71 against the US dollar on 8 June when the scheme was announced and stood at 95.69 on 21 August." That is because banks are handing over all the foreign exchange raised to the RBI in exchange for Indian rupees, and so the dollars are not entering the spot market. The money is being added to the foreign currency reserves. CNBCTV18. "India's foreign exchange reserves climbed to $716.9 billion, their highest level in about six months as of the week to August 14, data showed." "The reserves are within striking distance of a record high of $728.5 billion hit in February." Reuters. We need foreign exchange as, "India's merchandise trade deficit widened more than expected to a six-month high of $31.98 billion." "Imports rose to $76.22 billion against $70.84 billion in June, driven by a rise in crude oil prices and surging imports of electronics goods and gold." "Goods exports hit a record high of $44.24 billion for July,...while they were $40.41 billion in June." Reuters. The problem is the lack of investment in manufacturing. "Gross capital formation (GCF) refers to the gross additions to national wealth," from 1. gross fixed capital formation which is acquisition of fixed assets less disposals, 2. changes in the value of inventories and 3. "acquisitions less disposals of valuables." abs.gov. au. While India's GCF/GDP has grown from 15.3% in 1950-51 to 34.6% in 2024-25, the manufacturing GCF/GDP has grown from 2.4% in 1950-51 to 4.3% in 2024-25. Bank lending to large industry increased from 12.6% in 2007-08 to 18% in early 2010s, and has fallen to 8.6% in 2025-26. "Finance and professional services generated not just growth but also white-collar jobs and high tax revenue." This revenue was used for a large scale expansion of welfare programs to cover for a lack of mass employment and, recently, for direct cash transfers to win elections, wrote Roshan Kishore. "India could face a manufacturing GDP gap of up to USD 5.1 trillion by 2047 if it fails to unlock the potential of advanced manufacturing and adopt frontier technologies, according to a report by Angel One, which estimates that the country could miss out on USD 270 billion in additional manufacturing GDP by 2035 and USD 1 trillion by 2047." ET. A paper by SBI caps said that large capital projects require confidence, and so, "When pricing, input costs and end-market demand remain uncertain, companies choose to defer investment." "Government spending on transport, power, logistics and urban infrastructure is providing demand for private-sector suppliers." ET."Indian CEOs should identify their most complex business problems and create dedicated task forces to solve them using AI, rather than limiting their experimentation with the technology to smaller use cases, Anthropic MD Irina Ghose said. Indian business leaders do not like to be seen to be wrong and so are reluctant to take risks. Lack of confidence and a desire to reduce risks are leading to "A few large private banks, along with to law firms and wealth managers, are ducking an unwritten ban to handhold Indian promoter and business families to set up family offices in Singapore and other jurisdictions." "A large Singapore bank has teamed up with two large law firms and a wealth manager in advising families..." and "About Rs 15 billion is estimated to have been remitted in the past two months." ET.  If they are worried about external factors why would they shift their wealth to foreign jurisdictions? Perhaps they have lost confidence in the government and are worried about the desperate measures being adopted by the RBI. They don't dare to speak. So, quietly slink away. Unnoticed, if possible.