Not working for Indians.

"The Economic Survey 2024-25 suggested that India will also need to create 7.85 million new non-farm jobs annually till 2030, achieve 100% literacy, develop the quality of our educational institutions, and develop high-quality, future-ready infrastructure at scale and speed." ET. But why only till 2030? When, "As India became the most populous country in the world, UN projections estimate that the country's population is expected to grow for the next three decades after which it will begin declining." Though, "India has achieved the replacement level of fertility but the population will grow due to momentum phenomenon." NDTV. Ominously, "India needs to increase the relatively low participation of its citizens in labor markets and sustain fast productivity growth as the country has just 33 years until it is as 'old' as advanced economies, McKinsey Global Institute said in its report." ET. Comparing the Periodic Labor Force Survey of 2020-21 with that of 2023-24, P Baruah & DL Wankhar find a rise in long-term unemployment. While the numbers of men unemployed for 6-12 months and less than 6 months have fallen, the number of men unemployed for 1-2 years has jumped from 23.9% to 30.9%. The number unemployed for 2-3 years and more than 3 years have also increased. The number of women unemployed for more than 2 years has jumped from 10.7% to 16.3%." DH. On the other hand, more than 45% of Indian graduates are not fit to be employed as the Global Employability Test (GET) showed that 54.81% of graduates are employable. ET. Unfortunately, the illegal escape routes from the humiliation of unemployment are closing down rapidly. "The 'donkey route' refers not to a specific route, but to a circuitous, often perilous multi-hop journey that migrants take to reach Western countries." HT. "In 2023, a record 96,917 Indians were caught or deported while attempting to cross into the United States illegally." President Donald Trump has passed executive orders to halt illegal migrants, calling it "forms of invasion". ET. An estimated 725,000 Indians are living illegally in the US (ET) who must be living in fear of being caught in the dragnet, as "More than 3,500 undocumented migrants have been arrested since Trump returned to the White House," prompting "some migrants to skip work or keep their children home from school." (BBC). Canada is also throwing Indians out. "According to data of removals by citizenship provided to the Hindustan Times the Canada Border Services Agency (CBSA), the number of Indians who were made to leave the country in 2024 was 1,932, a record high." "US President Donald Trump's announcement of a crackdown on undocumented migrants has caused anxiety among parents in Haryana, who paid Rs 4-5 million to send their children to the US via the 'donkey route'," as "the Trump administration has officially taken up the matter with its counterpart in India of deporting around 18,000 Indian nationals back to the country." HT. Most of the illegal migrants from India are young men from Punjab and Gujarat, which raises questions about the Gujarat model of development touted by Prime Minister Narendra Modi, wrote Mihir Sharma. Still India should facilitate deportations to preserve the status of Indians who have migrated legally because India received a total of $129.1 billion in 2024 from Indians living abroad (The Hindu). This is highly significant because foreign direct investment (FDI) increased by 17.9% from $47.2 billion in the first eight months of FY24 to $55.6 billion in the same period of FY25. The Hindu. FDI less than half of remittances. Unemployment in India. Indians to be deported. Remittances could drop. Gujarat model cracking. Try donkey route again?      

Crucial, critical and cutting-edge.

"Till the other day, there were differences in India over whether the country should try to build its own AI foundation models." "With China's DeepSeek now training a frontier AI model with seemingly only $5.6 million and a modest inventory of graphic processors, the argument against an Indic foundation model will likely weaken." TOI. Why can't India produce its own DeepSeek? According to Zerodha Founder and CEO Nithin Kamath, "India suffers from a culture of short-termism, where challenges are often addressed with patchwork solutions rather than long-term strategies." "Additionally, India does not provide an adequate environment for researchers." Research "takes time and sustained investment, noting that China spent over two decades systematically building its own AI and scientific capabilities." ET. In a knee-jerk reaction, "As Chinese startups continue to storm the world of AI, India...raised its game by launching the National Critical Mineral Mission with a plan to invest Rs 343 billion - about $4 billion - in the next six years for securing a long-term sustainable supply chain of crucial natural resources needed for its semi-conductor and cutting-edge tech dreams." TOI. Critical minerals and cutting-edge tech, all for just $4 billion in six years.  A miracle like wine from water (Bible). For perspective, in 2023, Alphabet earned $282.84 billion, Microsoft $198.27 billion, Alibaba $130.35 billion and Huawei $95.49 billion. wikipedia. Cutting edge needs vast amounts of electricity. Microsoft is spending $1.6 billion to restart "the decommissioned nuclear reactor at Three Mile Island", Google is "to fund the construction of up to seven small nuclear modular reactors (SMRs)" and Amazon is planning three SMRs. Tech Target. India prides itself on "The number of global capability centers (GCCs) set up in India has increased to 1,700 in the fiscal year ending March 2024, generating $64.6 billion in export revenue and employing 1.9 million people." "Given the exponential growth of AI and its potential to impact all products and services, GCCs in India are increasingly focused on building AI capabilities and driving the AI transformation for their internal enterprise." ET. The intellectual property rights of AI research will be owned by the foreign head offices of the GCCs. Since the prime attraction of India is the abundant availability of software engineers at cheaper rates, this could be an upmarket version of the cyber-coolies of the business process outsourcing (BPO) and call center era. rediff.com. Thus, GCCs are essentially export of manpower within India while the lucky few with H1B visas travel to the US for short-term contracts. India gets 72% of the coveted H1B visas. BBC. Since the "culture of short-termism" cannot produce excellence which can be exported, "One of the issues being discussed is to position India as a manpower supplier to the world at a time when the country has a young population, while Europe, Japan and several other economies grapple with an ageing population." TOI. Put photos, education and experience online and let foreign companies bid for Indians. Sell as goods to provide services. Two in one. Genius. 

Like China in trust.

According to the annual Edelman Trust Barometer, "India has slipped one place to third slot when it comes to people's trust in the government, media and NGOs." Amazingly, "Five of the largest 10 global economies were among the least trusting nations on the Trust Index: Japan (the least trusting at 37%), Germany (41), the UK (43), the US (47) and France (48). Developing nations turned out to be more trusting - China (77%), Indonesia (76), India (75) and UAE (72) once again were on top of the Trust Index." DH. China has the Great Firewall which censors the internet of any foreign media and of any news or comment against Communist Party leaders. wikipedia. As when Winnie the Pooh, a children's cartoon character, was banned because it was seen as a mockery of Xi Jinping. BBC. India has its very own 'Godi Media', meaning 'lapdog media' (wikipedia), which is full of worship of the Dear Leader and self-censors any news or comment which may annoy Him. Also, tens of millions of people are dependent on 320 Direct benefit Schemes (cash transfer) across 54 ministries of the Central Government. dbtbharat.gov.in. In addition, the government is to dish out free food grains to 813.5 million people for five years starting from 1 January 2024. pib,gov.in. Cash in hand and a full belly breed a lot of trust. Unfortunately, foreign governments do not share in that trust. "An inquiry into Canada's recent elections has alleged that India was the 'second most active country engaging in electoral foreign interference', with only China having a greater impact on the country's Democratic processes." HT. "US President Donald Trump...announced plans to impose tariffs on the countries that 'harm' American interests, specifically naming China, India and Brazil as major offenders." TOI. India has labeled Canada a "safe haven for terrorists" meaning Khalistani Sikh separatists. CNN. India reacted fiercely when accused of state-sponsored killing Hardeep Singh Nijjar. "Every August crowds clutching saffron, white and green flags line a parade route through Edison, New Jersey, to watch business owners, politicians and the occasional Bollywood celebrity march past to commemorate India's Independence Day." But in 2022, "a yellow bulldozer - a symbol that has become offensive to many Indian Muslims - appeared among the floats." Reuters. Why is a bulldozer offensive? Because, following communal violence in Nuh in Haryana in 2023, "1,208 buildings and other structures - overwhelmingly Muslim-owned" were bulldozed. HT. Just recently, "Hindu nationalism and pro-Khalistan extremism are featured as new threats extremism in Britain in a leaked UK Home Office report." TOI. Hindus bracketed with Khalistanis. Government trusted almost as much as China's. Well done, indeed. India and Hindus have been bulldozed.         

A can of worms.

"India's central bank announced...a host of measures to inject liquidity into the banking system, including bond purchases and dollar/rupee swaps, which analysts and traders said could be a precursor to a rate cut next month. The Reserve Bank of India's (RBI) measures, expected to collectively infuse Rs 1.5 trillion ($17.39 billion) into the banking system," after "The daily average banking system liquidity deficit jumped to Rs 2.39 trillion in the fortnight that ended on Jan 24, as per latest RBI data." Reuters. One big reason for the huge deficit is that, "The RBI has spent $77 billion from its foreign exchange reserves through intervention in the spot market to defend the Indian rupee from falling sharply," MC. When the RBI sells dollars it buys up rupees from the market, creating a shortage. One US dollar buys Rs 86.57 this morning. xe.com. Taking a rate of Rs 86.50 to one dollar, $77 billion converts to Rs 6.66 trillion, which the RBI has sucked out. "Since April 1, 2014, Indian banks have written off loans worth Rs 16.61 trillion, according to data from the RBI in response to a Right to Information (RTI) query." "The data, which extend to September 30, 2024, show that only Rs 2.70 trillion of this amount has been recovered." The Wire. Roughly, about Rs 14 trillion has disappeared into dark pockets from our banking system. "The exodus of Foreign Portfolio Investors (FPI) from the Indian equity markets continues unabated, as they have withdrawn Rs 641.56 billion ($7.44 billion) so far this month, driven by the depreciation of the rupee, a rise in US bond yields and expectations of a tepid earnings season." TOI. If US bond yields rise and the RBI cuts interest rate, it will make US bonds more attractive and encourage more money move to the US. "Pressure on the rupee can intensify as the dollar's strength and Chinese yuan's weakness is likely to persist. Higher relative inflation in India is also contributing to rupee overvaluation in trade-weighted inflation-adjusted real effective exchange rate (REER) terms." "Overall, price stability should remain the focus of monetary policy." "A wait-and-watch approach would be best," wrote Gaurav Kapoor. In other words, do not cut the policy rate. In its December meeting, "The RBI's Monetary Policy Committee.., with a majority of 4:2, decided to keep the repo rate (key lending rate) unchanged at 6.5% for the 11th consecutive meeting. citing concerns over inflation and the uncertain growth outlook." ET. That brings us to the annual Union Budget which will be read out to the Parliament on 1 February by the Finance Minister Nirmala Sitharaman. Every Indian and every business wants an easing of the crushing tax burden that we have to bear. TOI. Everyone will be disappointed because the government is bankrupting itself by dishing out taxpayer cash to win elections. "The central government's direct benefit transfer umbrella currently houses 320 schemes across all ministries." "The handout-related consumption bump is also reflected in the 2024-25 advance estimates for gross value added," wrote Rajrishi Singhal. Which means, "The government has just Rs 800 billion to Rs 1 trillion in Budget 2025 for stimulating the economy, according to Neelkanth Mishra, Chief Economist at Axis Bank." CNBC. Tax and spend has been used by governments on public works, education and healthcare (wikipedia) but loot and throw for winning elections creates a can of worms. RBI and the Budget are too weak. Need to stop the loot. 

Bubbles must pop.

"Wall Street tumbled on Monday, January 27, on fears the big US companies that have feasted on artificial intelligence (AI) frenzy are threatened by DeepSeek, an AI competitor in China." Nvidia fell 17% and the Nasdaq Composite was down 3%. Mint. The Dow Jones Industrial Average was up 0.65% at 44,713.58, the Nasdaq was down 3.07% and the S&P 500 was down 1.46%. Reuters. "The world's 500 richest people, led by Nvidia Corp co-founder Jensen Huang, lost a combined $108 billion," as "Huang lost $20 billion or 20% of his wealth, Larry Ellison of Oracle lost $22.6 billion or 12% of his fortune, Michael Dell of Dell Inc lost $13 billion and Changpeng 'CZ' Zhao of Binance Holdings Ltd lost $12.1 billion. ET. "The overwhelming consensus is that the gap between America and the world is justified by the extraordinary earnings power of top US companies, their reach into the remotest corners of global trade, and their leading role in tech innovation - with AI the latest case in point. These strengths are real, but one definition of a bubble is a good idea gone too far," wrote Ruchir Sharma. "My calculations suggest that it now takes nearly two dollars of new govt debt to generate an additional dollar of US GDP growth - a 50% increase on just five years ago." So, "If the consensus on 'American exceptionalism' is so overwhelming, who is left to hop on the bandwagon and inflate it further?" "More likely, at some point next year, investors will baulk at financing runaway US spending," warned Sharma. We are into "next year" already. Indian stock markets could also have been in bubble territory when the S&P BSE Sensex reached an all-time high of 85,978.25 on 27 September 2024. Yahoo. It has fallen to 75,795.53 this morning. TOI. "The exodus of foreign portfolio investors (FPIs) from the Indian equity markets continues unabated, as they have withdrawn Rs 641.56 billion so far this month, driven by the depreciation of the rupee, a rise in US bond yields and expectations of a tepid earnings season." "The recent correction in indices comprising small and mid-sized companies (smids) may not be the end of the bloodbath for retail investors, with industry veterans pointing out that these stocks remain expensive." HT. Markets are falling because regression to the mean is at work, mutual funds tried to cash in by launching new schemes around which narratives have been built and the tendency of retail investors to look at what is happening in the short-term and project it forward, as if it will continue forever, wrote Vivek Kaul. Blowing bubbles is fun. But they must pop.

Worry about trade and migrants. Not the deep state.

The annual Indian circus, the Union Budget, will be exposed by Finance Minister Nirmala Sitharaman on 1 February 2025 and is "expected to announce innovative measures and financing solutions to strengthen infrastructure, agriculture, MSMEs and other key sectors.., according to a report by the State Bank of India." Since loans are expensive the government will announce alternative methods of raising money. Which means she will either raise tariffs on imports and/or heap more taxes on the middle class. "Market research agency NielsenIQ has found that rural demand has risen at the rate of 6% in the second quarter compared to only 2.8% for urban segments," wrote Sushma Ramachandran. Oil prices may go up, President Trump may impose tariffs, but the biggest hurdle is that, "Despite claims that much has been done to remove regulatory cholesterol, investors continue to find red tape enmeshing new projects. The result is that smaller countries, like Vietnam and Indonesia, with less bureaucracy are attracting higher investments." DH. In setting up a new business, "At every step of dealing with the petty bureaucracy, some money needs to change hands to speed up the process." "All told, 19% of a $2.3 million factory in India is an extra burden on governance - or lack of it - that doesn't exist in Thailand," agreed Andy Mukherjee. "Labour Force Participation Rate (LFPR) in urban areas among persons of age 15 years and above has increased from 49.3% during July-September, 2023 to 50.4% in July - September, 2024." And, the unemployment rate has decreased from 6.6% to 6.4% over the same period. pib.gov.in. So, all is bliss? Not quite. "Average earnings for self-employed workers went down by Rs 7 per day from Rs 324 per day in 2017-18 to Rs 317 per day in 2023-24. Average earnings for the salaried workers went down from Rs 497 per day in 2017-18 to Rs 492 in 2023-24." Worse, "The entire landscape of the workforce is changing with increasing shares of self-employed workers (from 52% to 58% over the seven-year period) and shrinking shares of of the salaried class (from 24% to 23% over the seven-year period)," wrote Ghatak, Jha and Singh. "Nearly 18,000 illegal immigrants from India are likely to be repatriated by the new administration," out of an "estimated 725,000 undocumented Indians in the US," wrote Bharat Bhushan. "In 2022 alone, Indian immigrants in the US contributed a staggering $12 billion in remittances, a crucial source of income for families back home." Sudden stoppage of this income could cause great inconvenience to families and local economies. Worse, "The sudden return of a large number of skilled workers to India, without adequate opportunities for reintegration into the labor market, could exacerbate unemployment and underemployment." FPJ. On top of all that, "Is America's deep state out to destabilize India? The question is so ludicrous that it deserves an outright dismissal," wrote Prof Neeraj Kaushal. The lady seems unaware of suspected, denied but widely believed, CIA sponsored assassinations of Patrice Lumumba of the Democratic Republic of Congo  (wikipedia) and of King Faisal bin Musaid Al Saud of Saudi Arabia (wikipedia). Failed attempts are on record (wikipedia). The good news is that Trump has "designs on the size and effectiveness of our sprawling government. Nowhere are those concerns greater than among those intelligence professionals occupying what Trump disparagingly calls 'the deep state'." Atlantic Council. We need to worry about trade and migrants. Ignore the deep state.      

All about inflation and productivity.

"India's foreign exchange reserves fell to $623.98 billion, down by $1.8 billion as of the week ending January 17, 2025." "The primary contributor of this decline were the foreign currency assets that declined by $2.87 billion to settle at $533.13 billion." ET. "RBI sold $20 billion from its forex reserves to stabilize the rupee in Nov." "On RBI's forex intervention, Nomura notes that the central bank net sold approximately $89.4 billion, including spot and forward transactions, since October 2024" and still has "headroom for another $138 billion worth sales." TOI. In a bid to protect the rupee the Reserve Bank of India (RBI) permitted the use of Special Rupee Vostro Account (SRVA) with Russia, Mauritius, Sri Lanka, Malaysia, Myanmar, Singapore, Israel and Germany. DH. Imports into India would be paid for in rupees into these accounts and can then be used for buying exports from India. That only works if trade with a particular country is equal and the balance is about zero. By May 2023, "Russia has accumulated billions of rupees in Indian banks which it can't use, Foreign Minister Sergei Lavrov said.., pointing to the ballooning trade surplus with the South Asian nation (India)." ET. The RBI does not stop trying. Now it is allowing individuals living outside India to open rupee accounts in overseas branches of banks with authorised dealer (AD) licences. These accounts would allow non-resident Indians (NRIs) to receive payments in rupees or exports to India which they can use for imports from India or for remittances. This is not expected to make much difference because the rupee is a non-convertible currency, wrote Gopika Gopakumar. The rupee depreciated 0.4% annually between 2000 and 2004, 3.4% between 2005 and 2014 and by 3.5% annually between 2015 and 2025, wrote Nilanjan Banik. Because, "Historically, the US has a lower inflation rate than India." and India's productivity is much lower than that of the US. "According to ILO estimates for 2025, India is producing an output of $25,431 per worker, below America's average of $153,446 per worker." "The BIS 'Triennial Central Bank Survey: OTC Foreign Exchange Turnover in April 2022' estimated global trading in forex markets to average $7.5 trillion per day. This year's survey could show slightly above $9 trillion." Large banks can influence emerging market currencies. Although the rupee is non convertible, "Non-deliverable forwards (NDFs) have become a major challenge for emerging economies," wrote Soumya Kanti Ghosh & Ashish Kumar." "Being offshore without physical settlements, RBI will have to think of counterintuitive ways to curb malpractices woven around NDF, hailed frequently as precognitive intuitions." ET. At $9 trillion per day, forex transactions are two and a half times India's annual GDP of $3.94 trillion in 2024 (Forbes). On the one hand the RBI is trying to get others to use the rupee, while on the other it thinks it can restrain others from trying to find the real exchange value of the currency. Instead, the RBI should control consumer price (CPI) inflation which was 5.22% in December 2024 (mospi.gov) slightly lower than 5.48% in November (pib.gov.in) and the government should work to increase jobs and reduce taxes instead of trying to win every election by increasing handouts which are expected to cost Rs 4.2 trillion this fiscal (TOI). Citizens have no options but foreigners will take advantage. Can't fight the figures.     

An elaborate fraud.

"Across the country, ideologues who deny the biological reality of sex have increasingly used legal and other socially coercive means to permit men to self-identify as women and gain access to intimate single-sex spaces and activities designed for women," and so "It is the policy of the United States to recognize two sexes, male and female." The White House. The belief in gender fluidity may have risen from the 'nature versus nurture' debate, based on arguments that "human individuality - personality traits, intelligence, preferences, and other characteristics - must be based on either genes people are born with or the environment in which they grew up." The differentiation between male and female begins after eight weeks of pregnancy and is influenced by whether the fetus is genetically 46XX, which is female, or 46XY, which would make a male. Britannica. No amount of nurture after birth can change the structure of a human being. You can encourage girls to become top class engineers or scientists (Microsoft) but you cannot change ovaries into testicles. Modern transgender is completely different from cross-dressing which has been known for millennia (wikipedia). Perhaps, the most famous was Portia in The Merchant of Venice, who dresses up as a male lawyer, (BBC) because women were barred from practicing law in Italy until Lydia Poet qualified as a lawyer in 1881 (wikipedia). She was admitted to the bar in 1920 at 65 years of age. Physical transgenders were not possible until recently because the male hormone testosterone was discovered in 1935  (online- library), and the female hormones estrogen was discovered in 1923 (Science Direct) while progesterone was isolated in 1934 (wikipedia). Breast enlargement in men, or Gynecomastia, can be physiological or due to a wide range of drugs and diseases. Mayo Clinic. Administering female hormones to men will cause gynecomastia but will never create a functioning female with a uterus capable of pregnancy. Also, hormones are extremely potent and can cause serious side effects. Estrogen is well known to increase the risk of blood clots in arteries and veins in women and can cause sudden death due to pulmonary embolism. pmc.ncbi. Progesterone, used in hormone replacement therapy after menopause, has a long list of serious side effects. Medline Plus. If naturally occurring female hormones can cause such serious problems in women they can only be extremely harmful in men. A physical male cannot be turned into a functional female nor can a woman become a man. Therefore, the whole trade in transgender conversion is an elaborate fraud, a massive con trick on vulnerable people who may feel inadequate or unattractive in their bodies and think that they will be more comfortable if they change their sex. Like the Repressed Memory Syndrome scam in the 1980s where girls were brainwashed into accusing their fathers of sexual assault when they were children. Psychiatrists were made to pay. wikipedia. Transgender treatment is extremely expensive (CNN) and this has attracted unscrupulous charlatans making money out of dangerous experiments on vulnerable people. All those involved in this bogus trade should be prosecuted and doctors who are violating the first principle of medicine, which is do no harm (Harvard Health), must be struck off. One may disagree with Trump's policies but in this he is right. One hundred percent.   

Rooting for China.

President Donald Trump issued a series of executive orders from a promise of higher tariffs, deportation of illegal immigrants, pledging an end to birthright citizenship to recognizing only two biological sexes (male and female). ET. India and Indians will be profoundly affected. Indian women on temporary visas are rushing to terminate their pregnancies before the deadline of 20 February. "The women are opting for C (Cesarian)-sections in their eighth or ninth month of pregnancy and not waiting to complete their full term." News18. They probably think that they are giving their babies a future by ensuring US citizenship but the whole process is hazardous and premature babies can have many survival and long-term problems (Mayo Clinic). A US citizenship with permanent health damage is of no use. Hopefully, doctors will refuse such unethical practice. "India will certainly be hit with tariffs and told to reduce its own high tariffs," and "To the extent India kowtows to him and promotes American interest, he will be happy. But, do not believe for a minute that there is some kind of special chemistry between Modi and Trump. There is none," opined Swaminathan SA Aiyer. Tariffs on Indian exports can be negotiated by offering to increase imports of American products, which the government is already contemplating. ET. It's the threat of tariffs on China which is the real worry. "In 2023, Chinese exports to the US aggregated $500 billion. If Trump imposes such tariffs, Chinese exports to the US are expected to fall by 85%. This output will find its way into other markets, including India." "Since Trump's first trade war in 2018, China's overall trade surplus has doubled to $820 billion levels. But the trade surplus with the US, however, remained at $340 billion. This indicates that Chinese exports have found their way to other markets," wrote N Madhavan. Indian industry will be decimated. There are approximately 725,000 Indians living in the US illegally and a lot, or all, of them could be deported. ET. Already, "The two countries have together identified some 18,000 illegal Indian migrants to the US to be sent back home." Mint. The problem is, "While hard data is lacking, reporting suggests that many if not most are young men from the western states of Punjab and Gujarat. Both regions are relatively well-off; Gujarat in particular has long been touted as a model of development," so that "If it turns out that young people from such prosperous areas are being driven to follow the 'donkey route' to the US, a few questions might begin to be asked about the famous 'Gujarat model' of growth," wrote Mihir Sharma. However, not everything is so gloomy. "Reliance Industries Chairman Mukesh Ambani and Reliance Foundation Chairperson Nita Ambani attended a pre-inauguration celebration in Washington DC, in honor of President-elect Donald Trump." ET. This could be a return gift for Ivanka Trump's invitation to the pre-wedding of Mr Mukesh Ambani's youngest son Anant Ambani and Radhika Merchant. TOI. Mr Gautam Adani could not attend because there is an arrest warrant waiting for him in the US. India Today. The most encouraging news could be Trump saying that he 'would rather not' impose tariffs on China. BBC. It seems really bizarre that we Indians could be wishing for no tariffs on this most uncivilized barbarous nation but, if that protects our industries, then so be it. We should immediately start imposing anti-dumping duties on Chinese products. Protect ourselves.

Counter with bourbon and pecan nuts

"In a circular last week, the Reserve Bank of India (RBI) allowed overseas branches of authorised dealer (AD) banks to open rupee accounts for non-resident Indians (NRI)," so that "They will be able to hold rupees received for exports to India and use the rupee balance for business payments to a person resident in India." The RBI is trying to transform the rupee into an international currency. Mint. The problem with holding on to a large amount of rupees is that rules change suddenly in India. Last week, the RBI liberalized Foreign Exchange Management Act (FEMA) rules to prevent trading in dollars because of the rupee's depreciation against the dollar. An NRI can now pay another NRI in rupees for business transactions. TNIE. If the RBI can change FEMA rules this week, it can change them back next week. Why take a risk? Taxes also change suddenly. In December, "The GST (goods and services tax) council, led by the Finance Minister Nirmala Sitharaman, proposed 5% GST for non-branded popcorn with salt and spices, 12% for pre-packaged and branded varieties and 18% for caramel popcorn, classified under sugar confectionery. TOI. Building a factory in India is much more difficult than building one in Thailand, wrote Andy Mukherjee. Land is more expensive, taxes are much higher, rules are restrictive and public services are erratic. "At every step of dealing with petty bureaucracy, some money needs to change hands to speed up the process. All told, 19% of a $2.3 million factory in India is an extra burden of governance - or lack of it - that doesn't exist in Thailand." DH. "India displaced Britain in 2022 as the world's fifth-largest economy, and by next year it is expected to push aside Germany in fourth spot." But, "The stock market, which soared for years, has just erased the past six months of gains. The currency, the rupee, is falling fast against the dollar, making homegrown earnings look smaller on the global stage. India's new middle class, whose wealth surged like never before after the pandemic, is wondering where it went wrong." DH. On Tuesday, 21 January, "The BSE Sensex plummeted by 1,235.08 points to end the day at a more than 7-month low of 75,838.36," which "left investors poorer by Rs 7.52 trillion. Investors took risk off the table, spooked by US President Donald Trump's idea of universal tariffs." FE. To placate Trump, "Officials in the Modi-led administration have sketched out various scenarios to counter any steps a new Trump administration may take to narrow India's trade surplus with the US which was $35.3 billion for the year ended March 31." "Among the options discussed, the government could buy more whiskey, steel and oil," and also reduce import tariffs on "bourbon whiskey and farm goods like pecan nuts." ET. Excellent idea. With Holi, the festival of colors on 14 March (bankbazaar) we could celebrate with bourbon and pecan nuts. Colors will be sho bright. Cheers.       

Come share the nectar.

"Indian equities yesterday capitulated to worries over possible US trade tariffs and poor corporate earnings in a crash that saw benchmarks plummet and left investors poorer by Rs 7.52 trillion." "The BSE Sensex plummeted by 1,235.08 points to end the day at a more than 7-month low of 75,838.36." FE. During President Donald Trump's inauguration India's External Affairs Minister S Jaishankar was apparently asked "to sit in the back while the ceremony was going on." Thankfully, "India Today Fact Check found that the woman was actually asking a cameraperson to go to the back because she was standing in front of Jaishankar." Whew, what a relief! That could have been another 1,000 points down for the Sensex. Why the uproar? Because, in a break with tradition, Trump invited several world leaders, including Chinese President Xi Jinping, to the inauguration ceremony but Prime Minister Narendra Modi was not. HT. Xi did not attend. Possibly because he could not be seen to be endorsing such an enormous celebration of democracy. The Ministry of External Affairs dismissed rumors of an invitation snub and pointed out that, Defence Minister Rajnath Singh attended the Nigerian President's swearing in, Minister of Earth Sciences Kiren Rijiju attended Maldives' and Highways Minister Nitin Gadkari attended Iran's. TN. Nigeria, Maldives and Iran are small fry compared to the US. This is especially puzzling as Mr Modi congratulated "my friend" Trump on his victory and Trump said Mr Modi is a "magnificent man", a "total killer" and that the "whole world loves him". India Today. In 2019, then President Trump even dropped in on a huge rally, labeled 'Howdy Modi', attended by over 50,000 people, mostly Indians living in the US, during Mr Modi's visit. BBC. Mr Modi's BJP is the only mainstream political party to have registered its US wing, the Overseas Friends of BJP-USA (OFBJP-USA) under the US Foreign Agents Registration Act (FARA). Diplomat. "Nearly half of all Indian Americans approve of Modi's performance as prime minister. This support is greatest among Republicans, Hindus...and those who hail from North and West India." Carnegie. Hindiwallahs and Gujaratis presumably. The OFBJP-USA campaigned heavily for Mr Modi in the general elections in 2024 with the aim of getting him over 400 seats in the Lok Sabha. DH. India is getting ready to take back 18,000 Indians illegally in the US to avoid a trade war. Mint. This is a very small fraction of the estimated 725,000 Indians living illegally in the US. TOI. A lot of Indians are worried because of Trump's promise to end 'birthright' citizenship, wherein any baby born in the US is automatically granted citizenship regardless of the legality of its parents. TOI. While we are sincerely sympathetic with unexpected troubles of Indians living in the US, it is reasonable for us to expect that they should join us in enjoying the 'Amrit Kaal' (age of Divine Nectar) that Mr Modi has promised for us (BS), with biometric Aadhaar for newborns and school admissions, repeated KYC checks, soaring inflation, punishing taxes, tax terrorism, and the potent threat of raids by CBI, ED, NIA or any of a multitude of stormtroopers if anyone has the temerity to protest. We invite them to join us in sipping the nectar. It's only fair.   

Too tragic to mock.

The middle-class in India is defined as "households with annual disposable incomes ranging from Rs 500,000 to Rs 3 million (at 2020-21 prices) and "this group accounted for 40% of India's population in 2025, up from 26% in 2016," according to PRICE's ICE 360 survey report, wrote Rajesh Shukla. "Discretionary spending has surged in high-value categories, such as smartphones, automobiles and real estate." "Steep rise in the cost of living, subdued job market trends and, of late, a volatile equity market have added further strain on the country's middle class that have cut down on purchases." "Despite challenges though, one segment that continues to grow by leaps and bounds is the luxury homes - residential units priced over Rs 30 million." BT. "Under Prime Minister Narendra Modi, consumption by India's 294 million households has nearly trebled to $2.07 trillion. It is the top engine of the $4 trillion economy and drives around 60% of GDP." "Beyond the luxury market where well-heeled Indians are spending big on the high-life, cracks are appearing; car sales crawled during the busy annual Diwali holiday in October-November. Indians are eating out less often." Reuters. "In 2024, India's consumer landscape has been marked by paradoxes - on one hand, a slowing economy and sagging private consumption and, on the other, an unmistakable shift toward premium products." "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." ET. "After Covid, the share of post-tax profit of companies listed on the stock exchange has risen to 5.2% of GDP, which is a figure only seen during the boom times of 2007-08." But, "Economists Amit Basole and Zico Dasgupta report that from the third quarter of 2021-22 to the second quarter of 2023-24, the average real GDP growth rate was 6.7% whereas regular wages stagnated (minus 0.7% growth)," wrote Ajit Ranade. As a barometer of the nation's economy, the Indian Rupee has fallen to lifetime lows. "The rupee's plunge to its lifetime low has prompted X users to remind PM Modi and celebrities of their comments mocking the Manmohan Singh government on the Indian currency's depreciation before 2014." "When Modi took office in 2014, the rate was 58.58 to a dollar. It was Rs 86.17 on 17 January." TT. "Companies are reluctant to put up new factories. They don't know what kind of pressure they will face from Chinese rivals," and "Above all, firms don't know if domestic consumers will be able to buy what they make." "A recent survey of 16,000 consumers by New Delhi-based LocalCircles showed that one in four of them expects their household earnings to drop by 25% or more in 2025," wrote Andy Mukherjee. So, "A senior advisor of NitiAayog, government's to think tank, admitted that under instructions from the top, the UN's Multidimensional Poverty Index was one of the 30 indices that the government monitored and reviewed, and eventually countered with a self-serving alternative, because it showed India in a 'poor light'." The Wire. They can fake economic data but they cannot force people to spend if they have no money or prop the rupee up by words. The demise of the rupee is tragic. Too sad to mock.  

Proper channel required.

Donald Trump will be sworn in for his second term as President of the United States and move into his official residence inside the White House. CBS. Unlike in India, where the previous incumbent tries to linger in the official residence as long as possible to get a few more days of free luxury, Joe Biden will move out immediately allowing Trump to move in within five hours (AP). "From ending the Russia-Ukraine war to launching mass deportations, its going to be the busiest day in US Presidential history as one looks at the promises made by Donald Trump to be kept on the very first day of assuming office." TOI. "Convinced he has an election 'mandate' from American voters, Trump is planning to surpass the century mark in executive actions over his first few days in office after getting sworn in as the 47th President today - a moment he has called 'liberation day for America'." USA Today. "US Immigration and Customs Enforcement (ICE) has released data revealing that nearly 18,000 undocumented Indians are among the 1.45 million individuals facing deportation from the United States." HT. "A Pew Research Report puts undocumented Indian immigrants in US at over 725,000." To placate Trump, India could offer "an agreement where, in order to obtain short-to-medium-term work permits for tech personnel, New Delhi guarantees they won't seek to settle in US. New Delhi can also offer to take back significant numbers of undocumented Indians," wrote R Jagannathan. This will not only create undying anger from those forced to return but those of their families, who may have sold land to pay people smugglers, and even their villages. Although several world leaders, including President Xi Jinping of China, have been invited to the inauguration, Mr Modi of India has not been. TH. "External Affairs Minister S Jaishankar boasted that Prime Minister Narendra Modi was among the first three world leaders whose calls US President-elect Donald Trump had taken." But, "The Trump rebuff - and rebuff it is because other invitees include President Javier Millei of Argentina, President Nayib Bukele of El Salvadore and Prime Minister Georgia Meloni of Italy - is speculated to be a fallout of Modi keeping a distance from Trump when he visited the US in September." "Nor does it augur well for India that Trump refers to India as a 'very big abuser' of the trade relationship between the two countries," wrote Bharat Bhushan. India enjoys a large trade surplus with the US. "The US goods and services trade deficit with India was $45.7 billion in 2022." ustr.gov. The goods trade surplus with the US was $43.311 billion in 2023 and was $41.480 billion in 2024. census.gov. "After forging unexpectedly fond ties with US President Joe Biden, Italy's right-wing premier Georgia Meloni is poised to leverage a more natural alliance with US President-elect Donald Trump that positions her as a key interlocutor between the US and Europe." ABC. Fortunately, Mr Modi is a BFF with Ms Meloni who "shared a selfie of them with the hashtag 'Melodi'. India Today. We Indians are enmeshed in the tangled vines of "through proper channel" (Law Insider) of Indian bureaucracy from cradle to grave. Mr Modi has the delightful Ms Meloni as the go-between. Where will Mr Jaishankar go?     

A Godfather and his devotees.

"Nate Anderson, founder of Hindenburg Research, announced...the shut down of his US investment firm, stating they have completed all ongoing projects." Hindenburg caused massive losses in Adani Group shares. TOI. Hindenburg accused Vinod Adani, brother of the Chairman of the Adani Group Gautam Adani  (wikipedia), of creating shell companies which were involved in "(1) stock parking / stock manipulation (2) and laundering money through Adani's private companies onto the listed companies' balance sheets in order to maintain the appearance of financial health and solvency." There was much rejoicing as share prices of the Adani Group surged 9% on the news of Hindenburg's shutdown. HT. This is not the only adventure of Mr Gautam Adani. "As per allegations made by the US Justice Department, (Indian government) officials were paid more than $250 million in bribes to okay solar deals with state governments. Adani Group Chairman Gautam S Adani, his nephew Sagar, and six others have been charged with paying these bribes." ET. "It's hard to think of a more tangible example of graft than agreeing to pay $265 million to government officials to secure overpriced solar power contracts," but "Perhaps surprisingly, the allegations are yet to prompt a commensurate outpouring of anger in India, nor any huge rush by its 28 states and eight Union territories to review their own renewable energy contracts." Reuters. No surprise there. Indians respond with a tired shrug. Everyone knows Adani is protected by Prime Minister Narendra Modi so that Congress MP Jairam Ramesh said, "This is not an Adani issue, this is a 'MODANI' issue." India Today. "The US fraud case against Indian billionaire Gautam Adani appears to be backed by documents that will help prosecutors make a strong case," but "the (Indian) government may be reluctant to facilitate testimony that could paint Indian officials in an unfavorable light." The Print. In November 2023, US Justice Department officials filed an indictment alleging a plot to murder US citizen and Khalistani separatist leader Gurpatwant Singh Pannun. TOI. In June 2024, Indian citizen Nikhil Gupta was extradited to the US from the Czech Republic to face murder-for-hire charges. justice.gov. In October 2024, "The US Justice Department announced it has charged a 'former Indian intelligence officer' - identified as Vikas Yadav - for allegedly directing a foiled plot to murder Sikh separatist Gurpatwant Singh Pannun, who advocates for the creation of Khalistan." HT. A high powered panel set up by the Indian government in 2023 has recommended "legal action against an individual" without naming the person involved. TOI. Amazingly, in December 2023, soon after the US allegations, Vikas Yadav was arrested and released on bail on a charge of kidnapping and robbing Raj Kumar Walia, the owner of Markaz Cafe and Lounge in Delhi. He cannot be extradited till his trial is over. TOI. Our government must think that Americans are stupid enough to accept an officer of India's intelligence agency Research and Analysis Wing (RAW) would jeopardize his career by robbing a few rupees. This is arguably the most corrupt government we have ever had but Mr Modi appears to be immune. Because, he has total loyalty from an army of half-witted imbecile 'Bhakts' (devotees) who live in an alternate reality (DH) where Mr Modi is to be worshipped, no matter what. Ministers and top civil servants are dependent on his largesse for lucrative posts so there is a code of 'Omerta' providing an armor of invincibility. A prime minister is accountable. A Godfather is not. Citizens are fair game.

ICU or moribund?

"India's foreign exchange reserves fell to $625.87 billion, down by $8.7 billion as of the week ending January 10, 2025, the Reserve Bank of India (RBI) data showed." ET. Forex reserves hit an all-time high of $704.89 billion on 27 September 2024. ET. "With rupee weakening to an all-time low, former RBI chief Raghuram Rajan has expressed that there is no need to be 'overly concerned' about the big slide." ET. The RBI's January bulletin states that, "The benefits of intervening in the foreign exchange market for emerging market economies like India far outweigh the costs," and "finds of 'symmetric effects of purchases and sales' and notes that interventions follow a 'leaning against the wind' strategy, where in the central bank steps in to moderate large swings in the currency." TOI. When the RBI sells dollars to stop the rupee from plunging to low levels, it helps foreign investors (FIIs) who can buy more dollars to repatriate home. FIIs have net sold Rs 465.76 billion worth of Indian stocks in January 2025, but they were more than matched by domestic investors (DIIs) who net bought Rs 493.67 billion worth. Moneycontrol. In 2024, FIIs net sold in 8 months and net bought in four, but DIIs net bought in every month. Despite constant buying by DIIs the S&P BSE Sensex has fallen from an all-time high 85,782.72 on 26 September 2024 to 76,619.3 yesterday. Trading Economics. Hence, FIIs have profited in two ways - every time they have sold stocks, buying by DIIs helped to support stock prices upward and the RBI support for the rupee helped them to gain from conversion to other currencies. When the rupee fell to 62.92 against the dollar in September 2013 (Thomas Cook), Mr Narendra Modi, then Chief Minister of Gujarat, was scathing. "The rupee is in the hospital and has been admitted to the ICU." "They have lost control of the country." Even Bollywood actors like Shilpa Shetty and Amitabh Bachchan put in their two pennies worth. Mr Modi never speaks on relevant important matters but what about the loveys? Why not a squeak out of them? asked Vir Sanghvi. The rupee collapsed to an all-time low of 86.6475 this week (BS) before recovering to 86.58 to one dollar this morning (xe.com). Even more serious, Mr Modi has not uttered a word on the ongoing violence in Manipur since 3 May 2023, even though 221 Indians have been killed, over 1,000 injured, 60,000 displaced, 4,786 housed burnt and 386 religious structures vandalized. wikipedia. Partha S Ghosh enumerated six reasons for Mr Modi's silence. The BJP is in power in Manipur till 2027, Manipur sends only two members to Parliament, the majority Hindu community is safe, there is a huge lucrative drug trade across the border, demands for fencing on the border with Myanmar will create enormous opportunities from allocation of contracts and cronies want to exploit natural resources where minority Kukis live. The Wire. And, this man projects himself as the savior of Sanatan Dharma (TOI), which teaches honesty, refraining from injuring living beings, goodwill, self-restraint and generosity (wikipedia). Non-stop inconsequential blather. pib.gov.in. Only power and pelf (Sir Walter Scott) at any cost. Even God cannot help India.    

Private resources vs government.

"The 10,000 wealthiest individuals of the 92 million Indian adults own an average of 22.6 billion rupees ($271.91 million) in wealth, 16,763 times the country's average, while the top 1% possessing an average of 54 million in wealth," said a study by the World Inequality Lab. "By the end of 2023, India's richest citizens owned 40.1% of the country's wealth, the highest since 1961, and their share of total income was 22.6%, the most since 1922, said the study." DH. "From 1975 to 1995, urban inequality declined slightly to (Gini ratio) 0.390." It rose to 0.455 post-liberalization in 1995-2005. "Between 2005 and 2020, urban inequality peaked at a Gini ratio of 0.532." Post-covid, from 2020-2023 it fell sharply to 0.382, wrote Rajesh Shukla. The sudden reduction in inequality may be because of a fall in earnings of the middle-class along with higher subsidies for the poor. "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." For the FMCG sector, "urban volume growth in the June to September quarters was stagnant at 2.8% versus rural volume growth which improved from 5.2% in the June quarter to 6% in the September quarter." FE. However, "Despite challenges, one segment that continues to grow," are "luxury homes - residential units priced over Rs 30 million." "And after touching new highs in 2023, sales of luxury units have scaled a new peak in 2024, latest data shows." BT. How to reduce inequality? "Let's take cues from Piketty to raise India's tax revenue," wrote Madan Sabnavis. Increase taxes on luxury homes, high-priced hotels and first class air travel. This will presumably reduce wealth of the rich and provide more money to the government to distribute handouts. This is the old Communist slogan, "From each according to his ability, to each according to his needs," propounded by Karl Marx. wikipedia. By now it should be obvious that communism was a total failure and the rich have the choice of buying real estate abroad. Already, "Property developers in Dubai are receiving an increasing number of inquiries from residents of Tier 2 and Tier 3 India cities as apartment and villa prices in Delhi and Mumbai literally shoot through the roof." ET. How to increase national wealth? "India's geology is like resource-rich nations like Canada, South Africa and Australia." But, "50% of India's imports are on account of natural resources: oil, gold, diamonds, minerals and metals." The government should provide subsidies like the Production Linked Incentive (PLI) schemes (wikipedia) for resources as it does for manufacturing, wrote Dhiraj Nayyar. In the US, individuals owning a piece of land are entitled to mineral rights underneath the surface of the land. Investopedia. Individuals and corporations can register mining claims in the United States as resources are privately owned. blm.gov. There is a long list of names of those who have become billionaires from oil and gas in the US. Forbes. In the US, national wealth is owned by the people, creating billionaires, in India everything is owned by the government which distributes handouts, creating beggars. The US is the richest country in the world while India is a failed middle income country (Rathin Roy). End of story. 

Rupee drowning in deluge of words.

India's "merchandise exports fell by nearly 1% to $38.01 billion in December 2024 while imports rose by 4.8% to $59.95 billion." Trade deficit fell to $21.94 billion from $32.84 billion in November. "Gold import bill for November 2024, which was reported at $14.8 billion, has been lowered to $9.8 billion. This is the sharpest ever correction in gold import data." DH. $4 billion would have bought just short of 52 tonnes of gold. calculateme. That is an enormous amount of gold. So was it an honest mistake, or...? The Reserve Bank of India (RBI) bought 8 tonnes of gold in November and a total of 73 tonnes in 2024, raising its gold holdings to 876 tonnes. ET. With a mark down of 52 tonnes of gold, it is no surprise that the rupee is feeling the chill. "The rupee weakened to its all-time low on 14 Jan, hitting a record low of 86.6475 before closing at 86.63 against the US dollar, down from its close at 86.5750 in the previous session." "The main reason behind a weakening rupee is strengthening of the US dollar amid improved macroeconomic scenario in the US." ET. "The government, in the forthcoming Budget, could consider levying higher tariffs on imports to check the significant decline in rupee value witnessed in the past three months, said EY Chief Policy Adviser DK Srivastava." As "higher import duties would curb the demand for dollars by importers," presumably by reduction of demand due to higher prices. ET. How much would higher import prices add to inflation? For instance, India "has registered a growth of 4.12% in overall imports of bulk drugs and intermediaries at Rs 377.22 billion during the fiscal year 2023-24, as compared to Rs 362.29 billion in the previous fiscal year." pharmabiz.com. People must buy medicines regardless of cost and imported components are used in manufacturing of many things. The average annual consumer price (CPI) inflation in India from 2014-2024 has been around 5% (RI) compared to an average annual inflation rate of around 2.5% in the US over the same period (US Inflation Calculator). Because inflation compounds over time, an article costing 1000 units of currency in 2014 would cost 1,710.34 in India but just 1,312.09 in the US in 2024 (investor.gov). Thus, the purchasing power of the rupee falls against the dollar over time. The rupee must depreciate to reflect that. Bond prices fell and yields rose in global bond markets in anticipation of higher inflation. "The US Treasury yields have shot up to 4.8% this January," and "India's 10-year bond yield has climbed to 6.9%," as foreign institutional investors (FIIs) sought higher returns in the safety of the dollar. India Today. When the RBI is unable to sell government bonds because dealers reject yields as too low they devolve on the underwriters. RBI auctions devolved eight times in 2022-23 but not even once in 2023-24 because of their inclusion in the Morgan Stanley Government Bond Index. FE. This year foreign fund flows will be lower. BS. Foreign investors are not interested in buying sovereign green bonds from Gujarat's Gift City because they are denominated in rupees. They want the bonds in dollars. Mint. The rupee has collapsed from 62 to the dollar in 2014, when Mr Modi first came to power (Bankbazar) to around 86.48 to one dollar this morning (xe.com). Mr Modi promised to strengthen the rupee mocked social media (Indiatimes.com). But then, when you spout jumla nonstop it comes back to bite you. Deluge of words to drown our brains. No respite. 

Inversely related.

"The Indian Economy is set to face challenges in 2025, with the International Monetary Fund (IMF) forecasting a slightly weaker performance despite steady growth." FE. Public sector bank, "The State Bank of India (SBI) sees India's GDP growth in FY25 to be 6.3% with a 'downward bias' due to several challenges affecting economic growth." ET. "India's economy needs a readjustment, and not just in fiscal and monetary policies." "As the finance minister readies to present her annual budget next month, she would hopefully no longer rely on a giant leap by companies." "The last time India faced a growth slump just before the pandemic - in 2019 - the government responded with a surprise reduction in the corporate tax rate." Didn't work. So, "It's the 1.4 billion consumers who need the government to stand next to them and say, 'Yes,you can do it'," wrote Andy Mukherjee. "India's gross domestic product (GDP) growth in 2029-20 revised to 4% from 4.2% estimated earlier," as "Nominal GDP grew by 7.8% compared with a provisional estimate of 7.2%." MInt. Companies have taken advantage of the cut in their tax rate to increase their profits. "Corporate profits have grown four times in the last four years, but real wages haven't grown, according to a report." "Private consumption is the biggest driver of the Indian economy, accounting for 60% of the country's GDP. What drives consumption is money in the hands of people." India Today. "Ahead of the upcoming Union Budget presentation, finance experts and industry leaders are voicing their expectations, urging the government to address India's high taxation structure, which they say is hurting the middle-class and causing a decline in consumption." BT. Instead the government is squeezing ever higher taxes out of taxpayers. "Only 6.68% of India's population filed income tax returns in 2023-24 fiscal," which means a total of 80.9 million in absolute terms. In 2022-23, a total of 74 million returns were filed of which 49.0 reported zero taxable income. ET. That means that only 25 million out of a total of 1,456 million (worldo-meter) paid any income tax. Yet, despite this minuscule number of actual taxpayers, "Net direct tax collection increased 15.88% year-on-year to about Rs 16.90 trillion till January 12 in this financial year (April-March)," of which personal income tax contributed Rs 8.74 trillion compared to corporate tax of Rs 7.68 trillion. ET. The government sets tax collections targets on officials. "The government will exceed the Rs 22.07 trillion direct tax target for the current fiscal, Central Board of Direct Taxes (CBDT) chairman Ravi Agarwal said." BS. Not satisfied with that, "The government is making a concerted effort to recover direct and indirect tax arrears amounting to over Rs 46.57 trillion." HT. True or fake, no one knows. Dividends for resident shareholders are taxed at nearly 50%. ET. Will the budget actually reduce our tax burdens. Not a chance. Instead, Finance Minister Nirmala Sitharaman and Commerce Minister Piyush Goyal have called for a cut in interest rates (India Today), even though consumer price index (CPI) inflation came down to 5.22% in December from 5.48% in November  (ET). Cannot consume if we have to pay sky-high prices after paying sky-high taxes. The GDP can go only one way. Down.

A different TINA.

"India's economic growth story has been impressive. Gross domestic product (GDP) is expanding, corporate profits are looking up and the country is asserting itself as a global economic powerhouse. But beneath the headline-grabbing figures lies a troubling reality: stagnant wages, biting inflation, insufficient jobs and growing inequality," wrote Ravi Venkatesan. He suggests that the government should increase minimum wage levels and company bosses should pay higher wages to their workers. In 1913, Henry Ford doubled wages of his employees from $2.50 a day to $5 per day and shortened the workday from 9 hours to 8.This allowed him to operate 3 shifts instead of two, increased productivity by 40%, so that "By 1919, a Model T car that sold for $800 in 1910 cost on $350. inc.com. India does not do such silly things. Instead, salaries of CEOs in the IT sector are now 500-1000 times the median wages of workers. TOI. The main reason for low wages is the law of supply and demand. India needs to create 90 to 115 million jobs to keep its economy growing. Manufacturing creates jobs but "India's manufacturing represents only 13% of GDP, compared to a quarter of GDP in Vietnam or over a quarter of GDP in China." "Less than half of the 950 million working-age population is actually employed, compared to 70% in other emerging markets." And, only 51.25% of college graduates are employable. hbr.org. If wages are stagnant and only half the population is working, consumption will be reduced and there will be no incentive for the private sector to invest in new capacity and job creation will remain subdued. Real GDP, or GDP at constant prices, grew at 7.7% in the first half (H1) of FY 2023-24 (April-September), while private final consumption expenditure grew at 4.5% in H1 of FY 2023-24 compared 13.6% in H1 of 2022-23 and gross fixed capital formation, which is a measure of investment, grew at 9.5% in H1 of 2023-24 compared to 14.7% in H1 of 2022-23. dea.gov.in. Thus, while the GDP growth was high, consumption and investment were slowing down. "According to central bank data, financial liabilities of households - borrowings - stood at Rs 77 trillion in June 2021, a year into the covid-19 crisis, and in the midst of a wrenching 'second wave'. As of March 2024, this had risen 56% to Rs 120 trillion. HT. Naturally, inequality is stark and increasing. "According to Oxfam's 2023 report, the top 1% of India's population controls over 40% of the nation's wealth, while the bottom half owns just 3%," wrote Navanita Varadpande. Faced with high unemployment and low wages, the government taxes the hell out of the middle class. "Personal income taxes, paid by less than 5% of the total population, pulled 19% of almost Rs 45 trillion total budget burden in 2023-24, or just over 30% of the total tax revenue and over half the direct taxes collected." "There is no alternative for middle India," wrote an angry Monica Halan. There is no alternative (TINA) was a slogan used by Margaret Thatcher. Investopedia. We have a different TINA. Much worse.