GST at 18% and tax of Rs 44.6 million.

In 2024, Jamnagar's tiny airport "hosted about 600 flights during the pre-wedding celebration of Mukesh Ambani's son." "Upon the Union Defence Secretary's request, the Chief of Air Staff authorised round-the-clock operations at the Jamnagar air base." BS. Microsoft co-founder Bill Gates had tea at Dolly Chaiwalla, 10-year old Sushila Meena from Rajasthan reminded Sachin Tendulkar of Zahir Khan's bowling action  (BBC), 18-year old Gukesh Dommaraju defeated China's Ding Liren to become the youngest-ever world chess champion and the GST Council recommended 18% GST on caramel popcorn. "Security analyst Sushant Saran said that India will always be a third world country if we have a 'brainless bureaucracy' and 'clueless politicians' who penalise anything that remotely resembles upgrading products." BT. "The Reserve Bank of India (RBI) has sharply slashed its growth projection to 6.6% for the current fiscal from 7.2% earlier." "The Indian Economy is in big trouble and the government is in denial, Bloomberg columnist Andy Mukherjee has written." The government blames the RBI for not slashing interest rates despite high inflation. ET. The RBI's December 2024 Financial Stability Report (FSR) said that "The global financial system shows resilience, but medium-term risks persist," but "The Indian economy and domestic financial system remain strong, supported by strong economic fundamentals and healthy balance sheets ." ET. As Gukesh Dommaraju and Dolly Chaiwalla have shown, India's fundamentals are strong if they do not suck the lifeblood out of us with their insatiable greed for ever higher taxes. "The RBI has cautioned that the outlook for unsecured credit, particularly credit cards and personal loans, could face significant pressure due to rising delinquencies." "A default on unsecured loans, such as credit cards or personal loans, could trigger delinquencies in other loans, including housing and vehicle loans, due to the interconnected nature of borrower liabilities." ET. Indian banks have written off Rs 16.11 trillion during Prime Minister Narendra Modi's first 10 years, wrote Jawhar Sircar. The last United Progressive Alliance (UPA) 2 wiped off less than Rs 2 trillion and, because of that, "the UPA 2 government was declared 'intolerably corrupt' by an orchestrated campaign, but now it is really time to wake up. Never before have frauds, cronies and oligarchs played havoc with our money while the lying lama smiled." "Indians make up the largest group of H1B holders, with over 70% of the visas granted to them in recent years. For many, it represents not just a job but a pathway to permanent residency and the realization of the 'American Dream'." ET. The billionaires can enjoy caramel popcorn from the Rs 16.11 trillion they plundered, but Gukesh will have to pay at least Rs 44.6 million in taxes out of his prize money for making the country proud (BT) with absolutely no help from the government. The rest dream of the American paradise.     

Touring for our standing.

"The global landscape in 2024 was one of extraordinary complexity and volatility." Wars in Ukraine and Gaza, China's economic slowdown and the debt burden of emerging economies. "These interconnected challenges demand deft diplomacy and robust leadership," and in just one year Prime Minister Narendra Modi visited UAE, Qatar, Bhutan, Italy, the USA twice, Russia twice, Austria,Poland, Ukraine, Brunei, Singapore, Laos, Nigeria, Brazil, Guyana and Kuwait, wrote Harsh Vardhan Shringla. Mr Shringla was in the Indian Foreign Service and was appointed ambassador to various countries. wikipedia. Apparently, "These visits strengthened bilateral relations and elevated India's global standing." Inconsequential returns from billions of rupees spent on VVIP tourism. At home, "Inflationary pressures are set to upend household budgets, potentially worsening stressed urban demand." "Companies' production costs have swelled due to 22% increase in import duty on edible oil this September and up to 40% in calendar year 2024." ET. The rupee has collapsed against the dollar from Rs 76.31 to one dollar in 2021 (Thomas Cook) to Rs 85.59 to $1 this morning (xe.com). A 12.16% drop in 3 years. The Reserve Bank of India (RBI) has been selling dollars to support the rupee, so that our foreign exchange reserves have fallen to $644.39 billion as of 20 December (ET) from a record high of $704.89 billion as of 27 September (ET). A weaker rupee raises prices of imports and pushes inflation higher but the RBI's support has meant that "The rupee's 40-currency trade-weighted real effective exchange rate (REER) stood at 108.14 in November, indicating the currency was overvalued by around 8%," and "The rupee's overvaluation relative to its trading partners makes India's exports more expensive." ET. Since the arrival of Mr Modi in 2014, the RBI has been transferring vast sums of money to the government from its surplus. Except for FY 2016-17, the year of demonetisation (wikipedia) and in FY 2021-22 as a result of millions of deaths due to Covid and lack of oxygen (BBC), the RBI's generosity rose to a record high of Rs 2.11 trillion in FY 2023-24 (infometrics.com). Even when the RBI shortened its accounting year to eight months from 1 August 2020 to 31 March 2021 to coincide with India's financial year (The Hindu) the RBI transferred Rs 99,122 to the government. Can the RBI go bankrupt? The RBI has to shrink its assets to balance its shrinking reserves and printing notes to make up the shortfall will push up inflation. As happened in Venezuela in the 1980s and 1990s, wrote Andy Mukherjee. The RBI's Financial Stability Report 2024, on 30 December, says, "The Indian economy and domestic financial system remain strong, supported by sound macroeconomic fundamentals and healthy balance sheets." ET. "US President-elect Donald Trump has set the stage for a potential trade conflict with India, threatening to impose reciprocal tariffs if the country continues to levy high taxes on American goods." BS. Eighteen foreign visits in 12 months. To improve global standing. No wonder India is at a standstill. Happy New Year.         

What could be.

"Dalal Street had a roller coaster ride in 2024," reaching record highs as, "The first half of the year saw robust corporate earnings, a surge in domestic flows and a resilient macro landscape." However, there has been some correction in the last two months but still, "As of December 27, the BSE benchmark Sensex has gained 6,458.81 points or 8.94% while the NSE Nifty climbed 2,082 points or 9.58%." BS. Growth in the manufacturing sector has been just 2.5% annually from 2017-18 to 2022-23 and as a result, "the share of manufacturing in national income in 2022-23 is lower than it was in 2017-18." Wages have increased by 1% in the unorganized sector and in the organized sector by a paltry 0.42% between 2014-15 and 2022-23, wrote Prof Himanshu. "India presently has more than a quarter trillion dollars of essential imports. These include crude oil, coal, edible unrefined oil, fertilizer, steel and copper." Inward remittances brought in $129 billion while software services earned $200 billion this year. "Both can be said to be de facto exports of skilled or semi-skilled labor." Tourism exports could create huge employment but India received only 9 million foreign tourists compared to 85 million for Spain and 29 million for Thailand, wrote Ajit Ranade. There were 27.8 million outbound tourists from India in 2023 and the number is expected to grow in 2024 at a cost of $19 billion and projected to hit $55 billion in a decade, wrote Rahul Jacob. In 2023, "Construction activity has picked up now and public expenditure is crowding in private sector participation here." "The construction sector grew 13.3% in the September quarter of 2023-24 from a year earlier in terms of gross value added (GVA)." "In India, construction activity in housing and third-party logistics is growing faster than infrastructure at the moment," wrote Madhurima Nandy. Perhaps, the biggest problem with running a business in India is the predatory and repressive taxation. The investigation arm of the Goods and Services Tax (GST) authority has issued over 20,000 notices pan-India for assessment year (AY) 2017-18 to AY 2021-22, involving tax demand of over Rs 800 billion." Maximum number of notices were for AY 2017-18 because there is a time limit of 5 years for such notices. Taxo. Whether the reasons are genuine or an effort to bully companies into paying something to rid themselves of the hassle is not known. No wonder, "India's model bilateral investment treaty (BIT) and the finance ministry's firm stance against amending it are becoming significant roadblocks for trade negotiators." "In 2016, India introduced the current model BIT following its loss in the White Industries arbitration case in 2010." ET. Because of the Indian government refusing tax benefits to Nestle the Swiss government has suspended the Most Favored Nation (MFN) status for India which means that Indian companies will now have to pay tax at 10% instead of at 5%. Netherlands and France may also follow suit. ET. Indians are helpless against 'we-will-do-whatever-the-hell-we-want' behavior of the government but other nations will not tolerate. Maybe that's why our stock exchanges have gone up by 8-9% whereas the Pakistan Stock Exchange has soared 80% from 62,052 last year to 11,351 points on 28 December 2024 (Tribune). India is a story of what could be. But will not be. Ever.

A Gini for luxury.

"In 2024, India's consumer landscape has been marked by paradoxes," as "According to the latest GDP data, private final consumption expenditure dropped to 6% in the July-September quarter from a seven-quarter high of 7.4% in the previous quarter." "Global luxury brands, such as Panerai, Bulgari and Gucci, are expanding their presence, with many targeting online platforms to overcome the limited availability of luxury real estate," and thus "reaching smaller towns across India." ET. Though India has lifted millions out of dire poverty, inequalities persist. The Gini coefficient measures the rate of inequality, with 0 representing total equality and 1 meaning one individual earning all the income. wikipedia. In 2023, the Gini for income improved to 0.41 because of cash transfers and food subsidies, Gini for expenditure was 0.36 and Gini for wealth was 056, wrote Rajesh Shukla. "Dimensions of inequality are interconnected." "Income inequality directly drives savings inequality," and "Expenditure inequality reflects disparities in access to goods and services, further amplifying income and savings gaps." "Income is the money you receive in exchange for your labor or goods." Investopedia. It could be argued that cash transfers and subsidies cannot be called income because they are unconditional. On the other hand, by paying for essentials, cash transfers and subsidies allow the poor to use their earnings to buy durable assets thereby boosting the economy. The UN Global Multidimensional Poverty Index 2024 says that with 234 million India has the highest number of poor people followed by Pakistan with 93 million and Ethiopia with 86 million. The Reporters' Collective investigation has revealed "a 'whole-of-government approach' devised by the Prime Minister's Office to closely monitor 30 global indices and reach out to agencies that publish the indices to convince them to change their parameters," and to that end "a nodal unit named 'Global Indices for Reform and Growth' (GIRG) has been set up." The Wire. During the 2024 Parliament elections Mr Modi claimed that 250 million people had been lifted out of poverty in the 10 years of his government. "The number had been rigged by his government in a pre-planned manner to spruce up its image." The Wire. Not just poverty, the India State of Forest Report 2023 by the forest Survey of India "has found that the forest and tree cover, combined, has increased by 1,445.81 sq km over the assessment made in the last report of 2021." Also, "except Himachal, all Himalayan and North-Eastern states have lost forest cover considerably." DH. According to the US Immigration and Customs Enforcement (ICE), "over the past three financial years, an average of 90,000 Indians were apprehended while attempting to cross US borders illegally." ET. When Indians are buying luxury online why are these Indians trying to sneak into the US? We need a Gini coefficient for luxury.  

Dare to cut.

"The rupee breached the 85 level for the first time on 19 Dec as the dollar gained ground across most currencies in the wake of the US Federal Reserve indicating that there would be fewer rate cuts in future than expected." TOI. Recently, "Two senior ministers of the Narendra Modi government," "Union Finance Minister Nirmala Sitharaman and Union Commerce Minister Piyush Goyal have flagged high interest rates as a dampener for growth. and want the RBI to change its tough stance on using high rates to tackle inflation." India Today. On 6 December, the Monetary Policy Committee of the Reserve Bank of India (RBI) held its policy rate at 6.5% for the eleventh time. "The RBI has maintained the repo rate at 6.5% since February 2023." BS. On 18 December, the US Federal Reserve cut its Funds rate by 25 basis points for the third time this year to 4.25%-4.5% and projected two more cuts in 2025. NBC. One would have expected that the higher yields on the rupee would lead to increased investment in Indian bonds by foreign investors looking for higher returns. In fact, yields on the benchmark 10-year bonds hardened from 6.751 on 18 December to 6.90 on 27 December. Investing.com. "The rupee plunged to a record low yesterday, closing at 85.53 against the dollar from its previous close of 85.26," having "touched an intraday low of 85.80 - its sharpest fall in nearly two years." TOI. "The fall in the rupee was driven by panic dollar buying from importers, increased month-end demand and maturing non-deliverable forwards." "India's foreign exchange reserves dipped by $8.4 to $644.39 billion as of December 20." ET. Reserves must have fallen further this week as the RBI sells dollars to prevent a collapse in the value of the rupee. The RBI's November bulletin shows that the real effective exchange rate (REER) of the rupee was overvalued because other currencies fell more against the dollar. REER rose from 104.4 to 105.3 against a basket of six currencies including those of the US, China, Eurozone, Hong Kong, the UK and Japan. TOI. Foreign investors (FIIs) net sold Rs 13.23 billion worth of shares on 27 December (Moneycontrol) and got relatively more dollars, which means the RBI effectively transferred dollars from its reserves to FIIs. When RBI sells dollars it creates a shortage of rupees in banks, pushing up lending rates. "As of 23 December, the liquidity deficit stood at Rs 2.43 trillion." ET. An overvalued REER against China means more imports from China. The merchandise trade deficit with China has risen 13% to $57.83 billion from April-October. Mint. A weakening rupee means higher cost of imports and higher inflation. At 6% inflation rate the value of Rs 100,000 will almost halve to Rs 55,840 after 10 years, will be nearly one-third at Rs 31,180 after 20 years and less than one-fifth at Rs 17,410 after 30 years. FE. If RBI cuts interest rate the rupee could fall further. Inflation will jump. And the value of the rupee will fall further. Will ministers take responsibility? Will Dear Leader?

Where the buck stops.

"The combination of monetary policy stance and macroprudential measures by the central bank, and structural factors, may have contributed to slowdown in demand, a finance ministry report said on Thursday (yesterday) in the latest sign of divergent views between North Block and the Reserve Bank of India (RBI)." TOI. The attempt at shifting blame is because, "India's Gross Domestic Product (GDP) growth slowed down to 5.4% during the second quarter of the financial year 2024-25 due to the falling growth rate in manufacturing, consumption and mining." HT. This sleight of hand is mendacious because the RBI is but a department of the Ministry of Finance. "Though originally privately owned, since nationalisation in 1949, the Reserve Bank is fully owned by the Government of India." rbi.org.in. "An impression has been created that India's FIT (flexible inflation targeting) is failing the country on growth," but "The ministers need to deconstruct another puzzle for the public: the reason industrial capacity utilization has ranged around 75% for close to 10 years. This indicates stagnating consumption demand, which is independent of interest rates but is overly influenced by inflation rates," wrote Rajrishi Singhal. "Add rising unemployment to the mix and the demand situation indeed looks grim." Indeed, consumer price index (CPI) inflation has been consistently above 4.5% (RI), since 2014, when the Bharatiya Janata Party (BJP) first grabbed power (wikipedia), except for 2017, 2018 and 2019 because of the sudden demonetization of the Rs 1000 and Rs 500 notes on 8 November 2016 (wikipedia). One very important contribution to inflation comes from taxes. While crude oil prices averaged around $100 a barrel from 2011 to 2014, oil prices plunged from 2015 to below $50 per barrel (Macrotrends). The government did not pass on the price advantage to consumers but raked in windfall profits by massively hiking excise duties on petrol and diesel  (mycarhelp line). Hence "Petrol tax in India consists of 55% of petrol's retailing price while diesel tax is 50% of the fuel's retail value." cleartax. In addition, "India's toll collection in 2024 could surpass Rs 700 billion, government data indicates." ET. The rising cost of transport is passed on to every goods and services thus increasing prices. Goods and Services Tax (GST) is collected as a percentage of the retail price. Total GST collections have risen exponentially from Rs 215.72 billion in July 2017 to a high Rs 2.10 trillion in April 2024. wikipedia. The RBI's mistake was in holding its interest rate at 4% for 24 months from May 2020 to May 2022 (BS) when it suddenly raised rates by 40 basis points in an emergency meeting (ET) to preempt the US Federal Reserve. Rake in taxes, push up prices, kill consumer demand, thus restricting investments, causing unemployment, and then blame the RBI. The buck stopped with President Harry Truman. Where does it stop with Dear Leader?    

More good or more bad?

"India's economy is expected to grow at 6.5% in FY25 and FY26, despite challenges from weak private consumption and reduced government spending, according to the EY Economy Watch." "The GDP growth rate fell to a seven-quarter low of 5.4% in the July- September period," and "The Reserve Bank of India (RBI) has revised its Real GDP growth forecast for FY25 to 6.6% during its latest Monetary Policy Committee (MPC) meeting." BS. "The year 2024 presented a mixed bag for the Indian economy, with notable successes tempered by emerging challenges." Foreign exchange reserves were high, hitting a record high of $704.89 billion as of 27 September (ET). Purchasing Managers' Index (PMI) was consistently positive; Manufacturing PMI was lower at 56.5 in November from 57.5 in October (BS) and Services PMI at 58.4 in November from 58.5 in October (ET). Foreign Direct Investment (FDI) increased 26% in the first half of FY25 to $42.1 billion and monthly GST collections averaged Rs 1.7 trillion. High GST collections were a result of consistently high inflation and GDP growth is starting to slow. As a result of uncontrolled inflation, "Once the backbone of domestic consumption, India's middle class, which represents 31% of its population, is cutting back sharply on daily and discretionary expenditure." FE. "Makers of packaged food to personal care products have ramped up supply of affordable packs and launching specific brands for rural areas as India's hinterland drives consumption even as urban demand cools." Mint. However, "Since much of the middle class in India resides in cities, FMCG companies have seen urban slowdown pangs hit growth rates in recent quarters, experts say." Because, "A recent FICCI-Quess Corp report on the marginal increase in  wage growth in the corporate sector, despite a four-fold growth in profits over the last four years, has brought the issue of stagnant wages into sharp focus in India." "Private final consumption expenditure dropped to 6% in the July-September quarter from a seven-quarter high of 7.4% in the previous quarter," but "the appetite for premium goods continued to grow." "Global luxury brands, such as Panerai, Bulgari and Gucci are expanding their presence, with many targeting online platforms to overcome the limited availability of luxury real estate." "Credit card spends in November dropped 16.1% month-on-month (M-o-M) to Rs 1.7 trillion, owing to moderation in consumer spending, following strong festival season momentum in October." Only 350,000 net credit cards were added in November compared to 1.3 million last year. "Drawing from his tenure at Infosys, (Mohandas) Pai pointed out that freshers earned Rs 3,25,000 annually in 2011. Today, 13 years later, they earn between Rs 3,25,000 and Rs 3,75,000 - an increase of merely 15%," whereas CEO salaries have gone up by 50-60%. BT. Middle class cuts spending while crony capitalists buy premium products. India remains poor.  

Asymmetry worse than inequality.

Prof Thomas Piketty, author of Capital in the Twenty-First Century, is of the opinion that "a wealth tax of 2% on billionaires would raise a lot of money to fund India's social infrastructure and health. He also urged India to raise its tax revenue as a proportion of GDP," wrote Prof Satya Narayan Misra. Piketty's book is a reminder of Das Kapital by Karl Marx. Piketty's hypothesis is that "inequality is not an accident, but rather a feature of capitalism and can only be reversed through state interventionism." wikipedia. Marx proposed that "the motivating force of capitalism is in the exploitation of labor, whose unpaid work is the ultimate source of surplus value." wikipedia. The first volume of Das Kapital was published in 1867, just after the American civil war from 1861-65 (Britannica) and probably draws on the persecution of slaves in the US. This led to Communism in which the working class "would control the government and economy" and would form a classless society "in which the production and distribution of goods would be based upon the principle 'From each according to his ability, to each according to his needs'."Britannica. However, Communism did not create a workers' Utopia. When the state controls every resource, service and means of production it gives total control over the lives of citizens to a small coterie of individuals, who then enforce their power through executions, famine, deaths through forced labor, deportation, starvation and imprisonment (wikipedia). Perhaps, Prof Misra should read The Gulag Archipelago by Aleksandr Solzhenitsyn (wikipedia) before recommending The Robin Hood Effect which is income and wealth distribution from the rich to the poor (Investopedia). In November 2024, the Supreme Court "upheld the inclusion of 'socialist, secular' in the Preamble of the Constitution." The Hindu. India already has a plethora of social subsidies for the poor. wikipedia. The e-Shram site of the Ministry of Labour & Employment gives a list of cash transfer schemes, distribution of food grains and accident and health insurance for the poor by the central government. eshram. gov.in. "In fact, the Economic Survey of 2022-23 had pointed out that as of December 2022, there were more than 2,000 such schemes run by state governments." In practice, India is quietly adopting universal basic income, wrote Vivek Kaul. There is no accountability. Just 6.68%, of Indians, or 80.9 million, filed Income Tax Returns (ITR) in financial year 2023-24 (FY24), up from 74 million in FY23. However, of the 74 million filers, 49 million declared zero taxable income in FY23 (Assessment Year 2023-24). ET. Thus 66.2% of those who filed ITR did not earn enough to pay income tax. Even so "Net direct tax collections so far this year have witnessed a strong uptrend, having gone up by 16.45% year-on-year to over Rs 15.82 trillion as of mid-December." Net individual tax collection was Rs 7.97 trillion while net corporate tax collection was less at Rs 7.42 trillion. ET. The state is defined as having a 'monopoly on violence'. Britannica. Income tax is extortion with threats of imprisonment. The government controls the investigating agencies CBI and ED and can imprison anyone without giving any reason. The Wire. It's not inequality of wealth, it is the asymmetry of power that is killing Indians. Professors should ask the right questions.  

Popcorn for economic growth.

"The British economy flatlined in the third quarter of the year," as "the Office for National Statistics said the British economy showed no growth against the previous estimate of 0.1%." Treasury Chief Rachel Reeves "raised taxes on businesses to help shore up public finances and ailing services," and "many businesses are responding to the tax rise by either raising prices or reducing employees or wages." BS. In the US, "Total debt outstanding has surged to $36 trillion from $19.5 trillion in 2016, or approximately 120% of gross domestic product (GDP) from 105%." But, even as the federal government debt has ballooned, state and local governments, households, companies and financial institutions have reduced their debt loads. Still, high public debt pushes interest rates higher which discourages companies and households from borrowing. This could hurt growth. Bloomberg. According to Business Insider, Chinese economist Gao Shanwen "stated that the actual GDP growth of China could be averaging somewhere around 2% over the past two or three years, in spite of the official figures reporting close to nearly 5%. He also speculated that future growth will be at 3%-4%, "while the government will likely continue to report around 5%." ET. In the EU, annual Real GDP growth rate for 2024 was 1.1% and GDP at current prices, or nominal GDP, is $19.4 trillion. IMF. Total population is 450.7 million and the average fertility rate is 1.5%. World Economics. To add to its problems, "Europe's struggling industries are bracing for a new gas price shock over the coming winter months, as colder weather depletes stocks, competition with Asia for liquefied natural gas intensifies and the prospect of reduced natural gas supplies looms." Reuters.  "The world's debt stock surged by over $12 trillion in the first three quarters of 2024 to a fresh record of nearly $323 trillion," But "Economic growth enabled debt to GDP to slip to roughly 326%." "Debt in emerging markets is approaching a record $105 trillion - a whopping 245% of GDP." Reuters. "The Syrian government fell...in a stunning end to the 50-year rule of the Assad family after a sudden rebel offensive sprinted across government-held territory and entered the capital in 10 days." ET. "Iran's embassy in Damascus was stormed after the rebels seized the Syrian capital, Iranian state- run Press TV said." Eurasian Times. Older Iranians will remember "On November 4, 1979, Iranian students seized the (US) embassy and detained more than 50 Americans, ranging from Charge d'Affairs to the most junior members of the staff as hostages. The Iranians held the Americans hostage for 444 days." history. state.gov. In India, "The Goods and Services Tax (GST) Council, chaired by the Finance Minister and including state representatives, announced on 21 December that non-branded popcorn mixed with salt and spices would attract a 5% GST, pre-packaged and branded popcorn 12% and caramel popcorn, categorized as a sugar confectionery, 18%." ET. No matter what happens in the world, good or bad, the Indian government will find sly, deceitful ways to extract the last rupee from citizens, including children. Merry Christmas. If you can afford it.  

Foreign policy should be diplomatic, not bold.

"India's foreign policy in 2024 showcased a bold stance, with India asserting its influence not only in its immediate neighborhood but also on the global stage." India and China agreed to return to "the Line of Actual Control (LAC) in eastern Ladakh that were in place before the Galwan clashes in 2020 after several negotiations." ET. However, China being an uncivilised and barbaric nation, "has built at least 22 villages and settlements over the past eight years within the territory that has traditionally been part of Bhutan, with eight villages coming up in areas in proximity to the strategic Doklam plateau since 2020, according to satellite imagery." HT. According to India's tourism ministry data for 2023, "foreign tourist arrivals were 9.5 million while NRI/diaspora arrivals were 9.4 million. The total was surpassed by outbound domestic travelers from India at 27.8 million." "A recent report in Mint showed tourist arrivals in 2024 are unlikely to cross 10 million, less than the 10.9 million pre-pandemic level, and Vietnam has already received 14.4 million tourists in the first 10 months of 2024, wrote Rahul Jacob. Unfortunately, "There are some startling similarities developing between India and China." GDP growth fell to 5.4% in the three months to September, only 80 basis points faster than that of China, business tycoon Gautam Adani has been indicted in the US for securities fraud and Canada has slapped a tag of 'foreign interference' on India. Reuters. "As the US prepares for President-elect Donald Trump to take office next month, nearly 18,000 undocumented Indians have been identified for deportation, according to recent data from the US Immigration and Customs Enforcement." ET. "Indian students studying in Canada have reported receiving emails asking them to resubmit crucial documents such as study permits, visas and educational records, including marks and attendance," causing "widespread panic among international students, many of whom hold visas with up to two years' validity." TOI. "At the outset of 2024, Prime Minister Narendra Modi was riding a wave of international acclaim and anticipating an election campaign that look like such a formality he talked of a thousand-year legacy. Now, he is looking back at a year of setbacks - at the ballot box, on the economy, in relations with foreign partners and in India's backyard." DH. In addition, "Union Parliamentary Affairs Minister Kiren Rijiju has said that (94 year old) George Soros wants to create chaos in India adding the alleged charges against the deep state are extremely serious." Republic. Mr Rijiju is probably referring to the US 'deep state', which has been denied and found 'disappointing' by the US after the BJP made similar allegations. TOI. BJP is a political party and so its allegations can be ignored, but a minister repeating the same allegations makes it the official position of the Indian government. As countries close their doors to Indians, the Economic Times has some advice for those wishing to escape - 'An Indian's Guide to Moving Abroad'. Bold foreign policy has received bold reactions. All routes closing. No way out.    

The US is over 8,000 miles away.

"The consumer price index showed a 12-month inflation rate of 2.7% after increasing 0.3% on the month, the Bureau of Labor Statistics reported. The annual rate was 0.1 percentage points higher than October." CNBC. "The US central bank cut interest rates.., as expected, but Federal Reserve Chair Jerome Powell said more reductions in borrowing costs now hinge on further progress in lowering stubbornly high inflation." "Powell's explicit - and repeated - references to the need for caution from here on jolted Wall Street, sending stocks sharply lower, bond yields higher and leading investors to dial back estimates of how far borrowing costs are likely to fall over the coming year." Reuters. The Fed cut its Funds rate by 0.25% to 4.25%-4.5% but the Dow Jones Industrial Average closed down 2.58%, "The S&P 500 lost almost 3% and the Nasdaq Composite fell 3.6%." BBC. So what? India is 13,595 km or 8,448 miles from the US so it should not matter to us. It did. "The Indian rupee weakened to a record low of 85.10 against the US dollar (India Today) because "India's economic growth moderated to a seven-quarter low of 5.4% in the second quarter of FY25 (ET), "India's merchandise trade deficit in November widened to an all-time high of $37.84 billion from $27.1 billion in October" and "the US Federal Reserve's projection of fewer rate cuts in 2025 amid sticky inflation has strengthened the US dollar, making emerging market currencies like the rupee more vulnerable." Matters could have been worse but for the record $129 billion, or Rs 10.7 trillion, in remittances sent by Indians living abroad. It was Rs 8.95 trillion last year. News18. In its December meeting, the Monetary Policy Committee (MPC) of the Reserve Bank of India (RBI) voted 4:2 to keep the interest rate unchanged for the 11th time at 6.25%. ET. MPC member Nagesh Kumar voted for a 25 basis points cut in the interest rate because "the repo rate cut "would help in reviving economic growth without worsening the inflationary situation". ET. "India's forex reserves dropped by $1.988 billion to $652.869 billion for the week ended December 13, the RBI said." BS. It is down from $704.89 billion from the week ended 27 September. BS. This is because the value of reserves keeps changing and also because the RBI has been selling dollars to soften the fall of the rupee. A weak rupee makes imports more expensive and increases consumer prices. However, selling dollars in exchange of rupees creates a shortage of the currency in banks and forces lending rates higher. So, the RBI conducted a variable repo rate auction (VRR) for an amount of Rs 1.50 trillion but received bids of Rs 2.01 trillion, indicating a strong demand for funds from banks amid a huge liquidity deficit. FE. "The US goods and services trade deficit with India was $45.7 billion in 2022." ustr.gov. The stock market index the Sensex has fallen 4,100 points in one week because of the US Fed's hawkish outlook on rate cuts. TOI. When the RBI is conducting gymnastics to protect the rupee while ensuring enough money in banks, how will a 25 basis points rate cut set fire to economic growth? And, Donald Trump hasn't been sworn in yet. Being an MPC member seems very easy. Just cut rates.

Dysfunctional, but exceptional.

"Having tagged America's inordinately large share of global financial markets as the 'mother of all bubbles," "Almost no one foresees an imminent pop. Virtually every Wall Street analyst predicts US stocks will continue outperforming the rest of the world in 2025." "Hype for American superiority is now the stuff of TV, radio, podcasts, newspaper columns and magazine cover stories," but "The longer it lasts, the more confident investors get and the more indiscriminately they buy into the mania," wrote Ruchir Sharma. "In political, diplomatic and military circles, the talk is of an increasingly dysfunctional superpower, isolationist abroad and polarized at home. But in the investing world, the term 'American exceptionalism' is hotter than ever. America's share of global share markets is far greater than its 27% share of the global economy, and the arrival of Donald Trump has only reinforced this disconnect," Sharma wrote earlier. Sharma is sounding like Prof Nouriel Roubini who was named 'Dr Doom' because of his habit of predicting economic disasters. He predicts Trump's policies will lead to higher inflation with stagnant growth, or stagflation. Yahoo. About 4.97 billion people in the world use Google and "According to SimilarWeb data, Google generated 83.26 billion visits in September 2024." Only American companies - Google and Meta - are free for users. In January, "Microsoft became the second-ever company worth $3 trillion" because "In 2023, the company's CEO, Satya Nadella, made a multibillion-dollar investment in AI, commercializing and adding tools like ChatGPT to its suite of products before rivals." CNN. Of the 12 trillion-dollar companies in the world, only three, Saudi Aramco, TSMC of Taiwan and PetroChina, are not from the US. wikipedia. In June, Nvidia became the third $3 trillion company after Apple and Microsoft. Investopedia. Market analyst Dan Ives believes Nvidia could become a $5 trillion company. ET. A US company SpaceX is already transporting people and cargo to the International Space Station. It is planning missions to the Moon and Mars. "NASA will partner with seven US companies to meet future and government needs, ultimately benefiting human spaceflight and US commercial low Earth orbit economy." In the US, "Retail sales jumped 0.7% last month after an upwardly revised 0.5% gain in October, the Commerce and Census Bureau said." "Retail sales increased 3.8% year-on-year." Reuters. The US has little competition. The second largest economy China has seen a spate of deadly attacks in recent weeks because "Millions of young Chinese struggle to find jobs. Homeowners have been watching their property values sink...Many migrant workers and even some government employees aren't getting paid." WSJ. If the global economy collapses the US will also fall but, as of now, the US has the best chance of coming out unscathed. Sharma may dislike Trump but the US survived Trump I and will likely survive Trump II. A case of crying wolf?   

Selective doubts.

"Doubts are often raised by some economists over the veracity of India's GDP estimates," but only when the growth in GDP is high and not when it falls, wrote Krishnamurthy Subramanian. In any economy, the Real GDP and the Real Gross Domestic Income (GDI) should be about equal but in the US there is a difference of $800 billion between Real GDP and Real GDI. "At 2.7% of GDP, this discrepancy is incredibly large as US's GDP growth itself is only 3.4%." So should the US figures also be described as "fake"? In the US every aspect of the economy is studied by the Federal Reserve, which has 12 branches, big commercial banks, universities (Ideas) and a large number of think tanks (INOMICS). In India, the government decides what story to feed the public. "After facing setbacks in the general elections, the Narendra Modi-led government doesn't want to give an impression to the public that it is collecting high taxes by way of indirect taxes, government sources told TNIE after the Centre didn't release official figures of monthly collection of goods and services tax (GST)." In 2019, acting Chairman of the National Statistical Commission (NSC) PC Mohanan and member of NSO J Meenakshi resigned in protest against government interference in data release. NDTV. "While few believe Indian statisticians are actively working to make growth numbers look better than they are, less and less data is publicly available, methods are less transparent and the GDP figures in particular sometimes diverge puzzlingly from independent data." India's large services sector and the informal economy are hard to calculate and "The figures for value-added contributed by the private sector have been particularly worrisome. They are often out of sync with other macroeconomic indicators." "India has wound up with official statistics that are unpredictable, don't match up with other figures, aren't robust to how price shifts are calculated and provide limited comparability over time," wrote Mihir Sharma. "The decennial population census that was scheduled in 2021 has still not happened." The Reserve Bank of India (RBI) "estimates that from the end of 2018-19 up to end of 2023-24, close to 151 million jobs were created," despite the pandemic in 2020 and 2021.The Late Chinese Premier Li Kiquang "liked looking at indicators like railway cargo, electricity consumption and loans disbursed by banks to get an indication of which way the Chinese economy was really headed." Perhaps we need our own Li Kiquang Index, wrote Vivek Kaul. In August, the same Mr Subramanian claimed that India can become a $55 trillion economy by 2047. All we have to do is grow by 8% every year. TOI. "For the past 15 years, incomes of ordinary Indians - those between the top 15% and 50% of the population - are stagnating." "Over 120 million people between 18 and 35 are neither in education nor looking for employment." India is showing the "markers of a failed middle-income country," said Rathin Roy. Economists in India have become sycophants. "Policy positions no longer seem based on economics. Instead, economists' public utterances tend to signal a leaning towards personalities or politics, perhaps to get picked for policymaking positions, or seem to vent frustration at getting fired from such jobs," wrote Puja Mehra. Economists or sycophants, toadies, creepy-crawlies? So many Lord Haw Haws (wikipedia).  

Can't blame Trump.

"Donald Trump, the United States' president-elect, has once again fired a warning shot at India over its high tariffs on American goods. This latest warning comes months after Trump called India a 'very big abuser' of tariffs, highlighting the persistent friction in the US-India trade dynamic." That could be detrimental to our balance of trade because, "In 2023-24, imports from the US stood at $42.2 billion, while exports to the US reached $77.52 billion, making America India's largest export destination." ET. As it is, "India's merchandise trade deficit in November widened to an all-time high of $37.84 billion from $27.1 billion in October. "A widening trade deficit may put further pressure on India's currency, which weakened 0.5% against the dollar last month, marking its worst month since March." ET. There could be other sources of friction with the US. In September 2018, "Walmart's acquisition of 77% stake in Flipkart has made the income tax department richer by over Rs 100 billion after the American giant agreed to pay all dues in consultation with the government." TOI. In December 2018, "When I published recently that Walmart had invested $16 billion in India's Flipkart e-commerce platform," "My worries were confirmed by a recent decision by the Indian government that will bar foreign companies from selling products from affiliated companies on their Indian shopping sites. It will also prevent them from offering special discounts and exclusive products." Forbes. Changing rules after the sale has gone through is underhand, immoral and projects India as untrustworthy. "Walmart has already spent nearly two decades waiting for local regulations to become a little more welcoming of its investment dollars." "On paper, the rule is all about safeguarding livelihoods of the kirana stores," but "In reality, though, mom-and-pop shops are being shielded only from the Americans," giving an advantage to Reliance Industries of Mukesh Ambani. "But a delayed Flipkart IPO could just become a lightning rod for the incoming Trump administration to negotiate hard for US firms' access to Indian retail." ET. Highly justified and righteous. Trump could really hurt our most tender spot. "After months of sustained increase, last month's (November) services exports have been provisionally estimated at $35.7 billion, compared with $32.1 billion of merchandise or goods exports." "Currently, software is the big daddy of services, accounting for 47% of exports last year, with nearly 70% heading to the US." TOI. Europe became rich by looting its colonies and the US became rich by employing slave labor and they have become 'Master States', wrote Diva Jain. "While military strength is important, the entry ticket to this elite club of 'Master Nations' is governed by economic influence." After World War II, the US helped to rebuild Europe, including Germany, through the Marshall Plan, and helped Japan by providing security and making it an exporting power. That's why the US has so many friends and is so powerful. We don't play fair. That makes us vulnerable. Can't blame Trump.   

The sweetest deal.

"India's private sector output growth strengthened to its highest level in four months during December, according to the latest HSBC 'flash' PMI data compiled by S&P global." It has increased from 56.5 in November to 57.4 in December. Zee. But, why a celebration in the middle of the month, why not wait till it ends? Just a little propaganda to help the government because, "Between July and September, India's economy slumped to a seven-quarter low of 5.4%, well below the Reserve Bank of India (RBI) forecast of 7%." "Consumer spending has weakened, private investment has been sluggish for years and government spending - an essential driver in recent years - has been pulled back." BBC. But, "Are corporates evading accountability," because, "One, they haven't increased salaries despite profits. Two, they are paying lower taxes than even individuals. Three, they have not generated employment and invested in capacity building despite the tax breaks since 2019." "Even the biggest average salary hike of 5.4% is lower than the rate of inflation, which grew at an annual average of 5.7% in the last five years." India Today. "Around 4,000 listed companies in India reported a 6% growth in revenue or gross sales during financial year 2024, according to a report by the State Bank of India (SBI)." Earnings before interest, taxes, depreciation and amortization (EBIDTA) increased by 28% and profit after tax (PAT) increased by 32%, whereas "Employee costs grew by only 13%," suggesting that "companies are focusing on optimizing their wage bills while maintaining profitability." ET.  "The 'buy now, pay later' (BNPL) schemes and the credit card spending facilitate immediate consumption and reduce the savings of the younger generations, said Michael Debabrata Patra, Deputy Governor, RBI." "This makes it harder for central banks to regulate and stabilize economic activities effectively." ET. "India's merchandise exports in November stood at $32.11 billion, while imports were $69.95 billion," so that trade deficit "widened to an all-time high of $37.84 billion from $27.1 billion in October." "Gold imports in November reached an all-time high of USD 14.8 billion." ET. At least people are saving in gold to hedge against inflation. Indian politicians and industrialists conveniently pass the blame on to the RBI for the fall in growth rate, wrote Rajrishi Singhal. "Both Union Finance Minister Nirmala Sitharaman and Union Commerce Minister Piyush Goyal have flagged high interest rates as a dampener for growth," and "recently underlined the need to lower interest rates to spur growth." India Today. However, "The previous episode of low interest rates saw Indian corporates deleverage their balance sheets but fail to invest in fresh capacity." On the other hand, "Data available for April-November 2024 shows overseas investment (equity plus debt) totaling $12.2 billion, in addition to $15 billion in guarantee issuances." "Indian commercial banks wrote off Rs 12.3 trillion in loans between the 2014-15 and 2023-24 financial years, according to government data presented in Parliament," of which Rs 6.5 trillion came from public sector (government owned) banks. ET. Raise prices for enormous profits, pay low taxes, loot the banks, squeeze employees and blame the RBI. Can't get sweeter than this. Such loving cronies.     

Deflated Xi Jinping.

"Prices for goods leaving Chinese factories have fallen year-over-year for 26 consecutive months, dropping 2.5% in September from a year earlier, and there is no sign of them turning up again soon." "The fear is that deflation is becoming ingrained in China. As falling prices sap profitability, companies could postpone investments or shed workers, leading more people to cut back on spending." One problem is that policies are focused on immediate financial risks and another is that Beijing is extending loans and subsidies to factories, leading to more production." WSJ. Chinese tycoons are deliberately devaluing their wealth, wrote Ruchir Sharma. "On Chinese social media, chatter broke out about how corporate tycoons might be competitively devaluing their own stock prices in order to avoid the widening crackdown on excessive wealth." "Since the crackdown began, the number of millionaires leaving China has been on the rise and peaked last year at 15,000." Only 4,300 left India. So, "China has unveiled an ambitious plan to relieve public debt, aiming to turn local governments away from belt-tightening practices that have exacerbated a domestic slowdown." The debt in state-owned companies is hidden in local government financing vehicles (LGFV) and is estimated at 60.4 trillion yuan ($8.4 trillion). ET. In February, Donald Trump promised to "impose tariffs of 60% or higher on Chinese goods in his potential second term." CNBC. He also promised an extra 10% tariffs on China for smuggling fentanyl into the US. Reuters. Early this month, "The United States... launched its third crackdown in three years on China's semiconductor industry, curbing exports to 140 companies, including chip equipment maker Naura Technology Group." Reuters. In retaliation, "China... banned exports to the United States of the critical minerals gallium, germanium and antimony that have widespread military applications, escalating trade tensions the day after Washington's latest crackdown on China's chip sector." Reuters. China is making too many goods for its own consumption and so "Chinese goods head to overseas markets where they kill the local industry due to their ultra low prices made possible by Chinese state subsidies and various other incentives." "With its own market bereft of demand, China is dumping low-priced steel into India where demand is robust. ET. In fact, "China topped a list of 2 countries with over 79% of total 43 dumping cases registered by India this year as the Directorate General of Trade Remedies (DGTR) is conducting an investigation into an alleged damage to the domestic chemicals, glass, metals, fibers and plastic sectors." HT. Things must be so bad that Xi Jinping is getting paranoid. In his early years Xi "consolidated control over the world's largest military by taking down powerful generals from rival factions and replacing them with allies and proteges loyal to himself." Now, because, beset with high unemployment and low incomes people are complaining about "the garbage time of history" (Reuters), so "like many strongman leaders in history, he is increasingly turning against his own handpicked loyalists."  CNN. "Appear weak when you are strong, and strong when you are weak." SunTzu. Xi was strong when he was strong. Now he doesn't know what to do. The beginning of the end?   

Skeletons rattling.

According to the rating agency Crisil, "the India economy - in the medium term - could grow by 6.7% on average between fiscal 2025 and 2031, and touch the $7 trillion mark." ET. Union Minister of Commerce & Industry Piyush Goyal said, "India on track to become $35 trillion, fully developed economy by 2047." pib. gov.in. Sadly, India's meteoric rise under Prime Minister Narendra Modi has bred jealousy in other countries. "Since the visibility of Indians has only risen in recent years - with a string of high-profile CEOs and political figures in the US,and even a former PM in the UK - many online interactions on global forums like X have also taken the form of insults, mockery and expressions of hatred," wrote Amit Majmudar. "A survey reveals that Canadians having a favorable view of India has dropped to 26% from 56% some 20 months ago." India Today. After Canadian Prime Minister Justin Trudeau accused the Indian government of the killing of Khalistani Hardeep Singh Nijjar in Canada (CBC), "Indians have united in outrage at Justin Trudeau." "Meanwhile, the Indian media has launched a half-crazed jihad against Mr Trudeau and his government. One news channel suggested that his Indian counterpart, Narendra Modi, was about to 'break Canada in two'." WSJ. Mr Modi's "Bharatiya Janata Party (BJP) has accused the State Department and 'deep state' elements in the US of trying to destabilize India in conjunction with a group of investigative journalists and opposition leader Rahul Gandhi." Reuters. "The US District Court for the Southern District of New York...issued summons to the Indian government in response to a civil lawsuit filed by Khalistani terrorist GS Pannun, who alleges an assassination plot against him." ET. Pannun does not allege. The US Justice Department said, "At the direction of an Indian government employee, Nikhil Gupta worked to carry out a plot to murder US-based leader of Sikh separatist movement." justice.gov. Gupta was extradited to the US. Indian billionaire Gautam Adani has been indicted for "his alleged role in a $265 million bribery scheme". Reuters. "In 2014, Adani's net worth was $2.8 billion," but "Amidst political criticism of brazen favoritism, Adani became the second rischest person in the world in April 2022, with $90 billion in is kitty." The Wire. "Many of Adani's international deals were struck soon after Mr Modi's official visits to certain countries or after heads of governments visited India. Some of these interventions have backfired badly." Adani Watch. Then there is 94 year-old George Soros whose Open Society Foundations donate money to promote democracy and transparency. wikipedia. Should be welcomed in India which, Mr Modi said in Parliament, is the Mother of Democracy ANI. "Soros launched a tirade against the Modi government and BJP soon after their second mandate in 2019." "Since then, he is accused of inciting protests using institutions, individuals and lawmakers with liberal funds to continuously berate Modi." Still, "Legitimising Soros's power to shake or make governments is political exaggeration. Using conspiracy theories about facilitating regime change reflects the weakness of a party or leadership," wrote Prabhu Chawla. Exactly. Unless, there are skeletons in the closet. Lots of them. And Soros is merely rattling them.  

Strange that India will grow but people will not.

On 13 December, "The BSE benchmark Sensex, after an initial drop of 1207.14 points, rebounded remarkably to close at 82,133.12, showing a gain of 843.16 points or 1.04%." "The NSE Nifty finished at 24,768.30, rising by 219.60 points or 0.89%, despite an early intra-day decline of 367.9 points." TOI. "According to the National Securities Depository Ltd (NSDL) data, FPIs (Foreign Portfolio Investors) invested Rs 227.66 billion in Indian equities this month, and net inflows stood at Rs 343.18 billion as of December 13, taking into account debt, hybrid, debt-VRR and equities." MInt. The Indian rupee fell to an all-time low on Thursday (12 December)," as the "Rupee hit a low of 84.88 against the dollar before closing at 84.8575, down slightly on the day." Reuters. However, with FPIs pouring money into Indian markets the rupee has hardened to 84.78 against the US dollar this morning (xe.com). "Between July and September, India's economy slumped to a seven-quarter low of 5.4%," because "Consumer demand has weakened, private investment has been sluggish for years and government spending - an essential driver in recent years - has been pulled back." The global share of goods exports was a mere 2% in 2023. "Fast-moving consumer goods (FMCG) companies report tepid sales, while salary bills at publicly traded firms, a proxy for urban wages, shrank last quarter." BBC. Markets are booming despite sluggish growth because "As per a report from Motilal Oswal Financial Services, the growth in profit of Nifty-500 companies over the 2020-2024 period was 34.5% per year, whereas GDP was growing only at 10.1%." By comparison, "Economists Amit Basole and Zico Dasgupta report from the third quarter of 2021-22 to the second quarter of 2023-24, the average GDP growth rate was 6.7% whereas regular wages stagnated (minus 0.7% growth)." "A recent report from Citibank says that for the first three quarters of 2024, growth in inflation-adjusted wages cost for listed Indian companies has remained below 2%, as against a ten-year average of 4.4%," wrote Ajit Ranade. "The recovery from the pandemic - fueled by pent-up demand, a surge in stock-market wealth and a big expansion in household credit - is exhausted." "Loans against gold are surging at a 50%-plus annual pace, a tell-tale sign of desperation among lower-income borrowers struggling to keep their heads above water." "Back in 2018 and 2019, GDP growth had slumped to just 3% from 9%." "This time around, too, they appear to be in denial," wrote Andy Mukherjee. "Unless the government figures out a way to get cities growing faster, officials might find themselves caught in another trap. Poor economic outcomes will lead to demands for welfare for the middle class rather than growth-first policies, which will in turn drive down growth even lower. India may have two vicious circles to break, not one," wrote Mihir Sharma. It may take 75 years for India just to reach one quarter of US per capita income, the World Bank said. DH. So India will grow but the people will not. What is this growth. Strange.       

Soros could use ONOE.

"Since 2010, more than 60 protest movements have erupted against ruling governments across the world." Starting with the Arab Spring in 2010-2011. "The second wave of protests commenced in 2019 and spread across the world," wrote Neera Chandhoke. The Arab Spring erupted in Tunisia in December 2010, when a street vendor Mohamed Bouazizi committed self-immolation in protest against treatment by local officials leading to a mass uprising and the flight of President Zine al-Abidine Ben Ali. Britannica. Egypt's protests started spontaneously in January 2011 and resulted in 846 deaths and over 6,000 injuries. President Hosni Mubarak was forced out. BBC. However, the Muslim Brotherhood grabbed power in elections that followed and Mohammed Morsi became president for one year before being ousted by further protests and the army. BBC. In August 2024, Prime Minister Sheikh Hasina fled from Bangladesh after mass protests. BBC. Muhammad Yunus, who was awarded the Nobel Peace Prize for his micro credit initiative, is cozying up to Islamist parties and is covering up crimes against minorities. India Today. Security requirements for visas for Pakistanis have been removed. TOI. Last week, rebels seized control of Syria in a matter of days forcing President Bashar al-Assad to flee to Russia. Reuters. Assad's fall is a result of the sudden Hamas attack on Israel on 7 October 2023 which resulted in 1200 deaths. More than 240 people were taken hostage. Britannica. In September 2024, thousands of pagers used by the Hezbollah exploded killing at least 32 people and injuring thousands. The next day, exploding walkie-talkies killed 20 people and injured at least 400 more. BBC. Later the same month, Hezbollah chief Hassan Nasrallah was killed by a bunker buster bomb in Beirut. ABC. In October, Nasrallah's successor Hashem Safieddin was killed in Israeli bombing in Beirut. BBC. In October, Israel struck military installations inside Iran with precision strikes for over three hours (TJP) forcing Iran's Supreme Leader Ayatollah Ali Khamenei to go into hiding in a secure location inside Iran (Reuters). Without his supporters Assad became collateral damage for the Hamas attack. South Korean President faces an impeachment vote in Parliament today for his attempt at imposing martial law. Large demonstrations have been going on since his attempt. Reuters. In all these nations, an overwhelming majority of people use one common language. India has 28 states with different languages, culture and separate elections to state assemblies. Know India. "The Union Cabinet on 12 December approved the 'One Nation, One Election' (ONOE) bill," apparently to save cost and stop disruptions due to elections on different dates in different states. ET. One reason may be that the BJP hopes to harness Mr Modi's popularity rating at over 70% (Ipsos) to win in all the states and thus impose one-party rule in India. They should be careful. A homogeneous one-party rule could invite massive all-India protests by a united opposition. The BJP should remember that George Soros wanted Mr Modi to lose power. Reuters. Soros may be 94 years old but is still alive. wikipedia. Forget ONOE. Remember Soros. Terrifying.      

Economic growth through 'Ji Huzoor'.

India's "Retail inflation eased in November to 5.48%, lower than 6.21% in the previous month," as "Food inflation slowed down to 9.04% from 10.87% a month earlier." "The decline in inflation, together with a sharp fall in growth in the July to September quarter to a seven-quarter low, supports expectations of a rate cut in February when the monetary policy committee meets next." Reuters. "India's Gross Domestic Product (GDP) growth slowed down to 5.4% during the second quarter (Apr-Sept) of the financial year 2024-25 due to the falling growth rate in manufacturing, consumption and mining." HT. "Meanwhile, core inflation, which excludes food and fuel prices, stood at 3.9% in November 2024," while "industrial output rose to a three-month high of 3.5% year-on-year in October...driven by a boost in consumer durables and manufacturing during the festival season." Mint. On 10 December, "The Indian rupee slipped to a record low and government bond yields fell.., as the appointment of career bureaucrat Sanjay Malhotra as the next governor of the Reserve Bank of India (RBI) prompted traders to ramp up bets on rate cuts." Yesterday, "The rupee hit a low of 84.88 against the dollar before closing at 84.8575," as "The RBI has been routinely selling dollars in the spot market...to support the local currency as it has consistently hit new all-time lows." Mint. Every central bank faces a 'trilemma' which is 1. A fixed currency exchange rate, 2. Allowing capital to flow freely and 3. Autonomous monetary policy. Investopedia. India does not allow capital account convertibility, which means allowing conversion of any amount of rupees to any foreign currency, because that would lead to extreme volatility. CNBC. Hence, the RBI's governor faces a different trilemma - that of "balancing economic growth, inflation and exchange rate stability". "Rahul Bajoria, an economist with the Bank of America, highlighted RBI's 'three-body problem' as it navigates slowing growth, elevated inflation and exchange rate pressures." TOI. The main problem is inflation. The RBI has a mandate from the government to keep retail inflation at 4% with a margin of 2% on either side." ET. However, from 2014 to 2023 the RBI has been happy with inflation higher than 4% (RI), except for 2017, 2018 and 2019, when the average rate of inflation fell a little below 4% probably because India's GDP growth rate fell from 8.26% in 2016 to 3.87% in 2019, (Macrotrends) due to the demonetisation of Rs 1000 and Rs 500 notes in November 2016 (wikipedia). In the US, the consumer price index (CPI) inflation increased by 2.7% in November which was 0.1% higher than in October. Core CPI was at 3.3%. CNBC. While the US finds a rate of 2.7% intolerable, in India there is a raucous chorus for cutting interest rate even with an inflation rate of 5.48%. Higher inflation means that the value of the rupee keeps falling as the rupee buys less. One dollar was less than Rs 60 in May 2014 (Thomas Cook) when this government was first elected (wikipedia), but has risen to Rs 84.8575 yesterday. A weaker rupee increases the cost of imports and results in higher inflation which, in turn, reduces the value of the rupee. Donald Trump will be sworn in on 20 January. His victory caused the rupee to fall, so what effect his policies will have is not known. Mint. The new governor of the RBI will want to please his masters in government who totally believe in lower interest rates to increase economic growth. However, the economy cannot grow if people restrict spending due to rising prices. Ji huzoor can't support the rupee or control inflation. Please Dear Leader. Enough.