The cover of noise.

"India's Nifty 50 index (NSEI) struck a record high in December and is up 5% this year," "In contrast, MSCI's broadest index of Asia-Pacific shares outside Japan (MIAPJOOOPUS) shed 19%." Reuters. "Next year's optimism for India is driven by strong corporate earnings, a post-pandemic retail boom and an economy set to grow 6% in the next fiscal year - which will make it the world's fastest-growing major economy in 2013." "Importantly, conditions are better than not just the crippling slump during India's devastating Covid surge last year but also the anemic growth of the debt-saddled last decade." ET. "Overall, September quarter private consumption rose 7.8% from pre-Covid levels in 2019," "fixed capital formation, an indication of investment activity, 13.5% from 2019," "While unemployment remains elevated at an average of 7.4% over the last 12 months till November." Borrowing by Indian companies has risen sharply wrote Niti Kiran. "The aggregate debt of the sample of companies covered in the analysis jumped nearly 10% between 31 March and 30 September to Rs 25.2 trillion." Why are companies borrowing if not to invest in new projects? "Analysts say it's to fund their working capital needs, which increased sharply in the first half of 2022-23 due to the spike in commodity prices." Companies are also spending their cash balance. "The combined cash and bank balance of the sample of companies declined 2.4% in the first six months of 2022-23 to Rs 3.5 trillion." "Former Reserve Bank of India (RBI) Governor Raghuram Rajan...in a chat with Congress leader Rahul Gandhi claimed that India would be lucky if it achieves 5 percent growth next year." ET. "If you look at 2022 vis-a-vis 2019, it's about 2 percent per year. It's too low for us," he said. India's wholesale price index (WPI) inflation for November "was 5.85% year-on-year, government data showed", which was lowest since February 2021, when WPI rate touched 4.83%." Reuters. "India's consumer price (CPI) based inflation eased to an 11-month low of 5.88 percent in November on an annual basis from 6.77 percent in October, 2022." ET. If we leave out vegetables, oils and fats, CPI inflation in November would be 7.3%, wrote Vivek Kaul. Core inflation, which excludes volatile food and energy sectors, Investopedia, "was at 6.5% in November and has been higher than 6% in eight of the last nine months." Professional forecasters for the RBI predict CPI inflation to ease to 5.2% in 2023-24. "Given that most of these forecasters are corporate economists, they have a tendency to underestimate inflation." "Take the case of 2022-23. Initially, the median forecast was for inflation of 4.7%. This has since been revised to 6.7%." No professional integrity it seems. There could be other potential problems. The US Federal Open Market Committee (FOMC) targets an inflation rate of 2% "for maximum employment and price stability". Some economists advocate that the Fed should target a higher rate of 3-4%, as in developing countries, which will increase its nominal interest rate and give the Fed more room to lower rates if needed, wrote Prof Vidya Mahambare. "This would mean that nominal and real interest rates in the US and these developing countries would be similar should respective central banks achieve their inflation targets." Investment funds would flow into the US pushing down other currencies and increasing their inflation. Since economic predictions are most likely to be wrong why do they go on making them? To fool credit rating agencies, to fool international investors or to fool us? Create enough noise .Drown the truth.

Passports to cars.

"Seventy-five years after Independence, 7.2% of India's population owns a passport with a majority having availed one in the past decade. As of mid-December, 9.6 crore (96 million) Indians held passports, and the number is set to cross the 10-crore (100 million) mark in the next few months." This must be a sign of rising prosperity leading to aspirations of seeing the world and enjoying new adventures. Unfortunately, as Indians learn more about the outside world they develop a rising urge to escape. "The Sri Lakshmi Visa Ganapathy Temple is a few miles north of the airport in Chennai (formerly Madras)" and "This 'visa temple' has surged in popularity among US visa seekers over the past decade; they can be found in almost any Indian city with a US consulate." ET. There are temples in India where devotees offer toy aeroplanes to the deity in the hope that they would be able to travel abroad. India TV. Not as tourists, but as immigrants. "India is set to be the world's fastest growing major economy in the year ahead, as a post-pandemic retail boom and recent bank balance-sheet repairs lure new investment, fueling hot demand for everything from cars to televisions, coal to airliners." Reuters. "Air India, for example, is looking at landmark orders for as many as 500 jetliners worth tens of billions of dollars from both Airbus and Boeing," but, "Unemployment remains elevated at an average of 7.4% over the last 12 months till November compared with 6.3% in 2018-19 and 4.7% in 2017-18, the Centre for Monitoring Indian Economy estimates." "Banks have written off Rs 11.17 lakh crore (Rs 11.17 trillion) bad loans from their books in the last six years till financial year 2021-22, Parliament was informed." ET. Loan write-off is not a bonanza for borrowers, claimed the Finance Minister. "FM Nirmala Sitharaman...told Parliament that borrowers remain liable to repay loans despite a write-off by banks." TOI. But, surely limited liability means that shareholders and promoters of a company are not liable for its debts in case of bankruptcy? "While a shareholder can participate wholly in the growth of a company, their liability is restricted to the amount of investment in the company, even if it subsequently goes bankrupt and has remaining debt obligations." Investopedia. "The lady doth protest too much, methinks." wikipedia. Some Indians have surely made it. "Creating wealth at an unprecedented speed of Rs 1,612 crore (Rs 16.12 billion) per day, Gautam Adani has more than doubled his wealth in the last one year to beat Amazon founder Jeff Bezos as the world's second-richest man, according to IIFL Wealth Hurun India Rich List 2022." ET. Yah boo to Bezos. Blaming high taxation on cars and poor bureaucratic policy, Maruti Chairman RC Bhargava said, "We (India) are at around 30 cars per thousand people. This has been going up by one person per year in the last five years. If we have to reach China's level of 170 cars per thousand people, it will take us 140 years. Draw your conclusions." Why wrack your brain? Go to a visa temple. 

First Trump, now G20.

"In China, from 3 January 2020 to 4.54pm CET, 20 December 2022, there have been 10,088,555 cases of COVID-19 with 31,378 deaths, reported to WHO." "China reported 3,101 new symptomatic Covid-19 infections on Tuesday (yesterday) - as compared with 2,722 cases a day earlier." HT. "Currently, mainland China has confirmed a total of 386,276 cases with symptoms." "According to the National Health Commission, the country did not record any new Covid-19 related deaths." But, "Infectious disease expert Prof Wang Gui-qiang clarified that only pneumonia and respiratory failure caused by the coronavirus were counted as Covid deaths." BBC. "This has led to fears the numbers are an underestimate due to a recent reduction in Covid testing." What does it matter to us in India if the Chinese government is shamelessly and openly undercounting its Covid cases? After all, "The air travel (bird fly) shortest distance between China and India is 2,984 km = 1,854 miles." Because, the first ever case of coronavirus infection in India was when, "On January 27, 2020, a 20 yr old female presented to the Emergency Department in General Hospital, Thrissur, Kerala, with a one-day history of dry cough and sore throat." IJMR. "She disclosed that she had returned to Kerala from Wuhan City, China, on January 23, 2020 owing to the Covid-19 outbreak situation there." Coronavirus was confirmed by real time reverse transcription PCR (RTPCR) at the National Institute of Virology in Pune. On 2 and 3 February 2020, two more cases of Covid-19 were confirmed in Kerala, both of whom had returned from Wuhan in China. wikipedia. However, flights from foreign countries continued unchecked because the then President of the US Donald Trump and his family visited India on 24 and 25 February 2020. wikipedia. Over 100,000 people attended a rally in Motera Stadium in Gujarat. Mr Trump and First Lady Melania Trump visited the Taj Mahal in Agra where he received an "exuberant welcome" "which included dancers dressed as peacocks and horses". BBC. "On March 25, when India had reported only 500 cases, the country went into one of the strictest lockdowns in the world." HT. The lockdown was announced with just 4 hours notice, which led to massive panic buying with people packing into shops, thus creating the conditions which the lockdown was supposed to prevent. India Today. There was no lockdown in 2021 when so many people were dying that relatives were queuing with dead bodies and cremations being conducted in car parks of crematoriums. BI. The government "reported 481,000 Covid deaths between 1 January 2020 and 31 December 2021, but the WHO's estimates put the figure at nearly 10 times as many." BBC. There are 45-48,000 Indians living in China, as of 2015. wikipedia. We must stop all flights from China. Any Indians evacuated from there must be quarantined. Sadly, that will not happen. Because India holds presidency of the G20 from 1 December 2022 to 30 November 2023 and will host over 200 meetings. pib.gov.in. Politicians are not going to miss it before general elections in 2024. Will we count the cost in bodies?

Trapped in own maze.

"Indian and Chinese troops clashed along the Line of Actual Control (LAC) in the Tawang sector of Arunachal Pradesh on December 9 and the face-off resulted in 'minor injuries to a few personnel from both sides'. However, ANI reported that there were around 300 Chinese soldiers involved." HT. The Chinese government needs something to divert people's attention because, "After the easing of Covid-19 restrictions, China is experiencing a massive surge in Coronavirus cases. Hospitals are completely overwhelmed in China, reported Eric Feigl-Ding, an epidemiologist and health economist." NDTV. "Epidemiologist Wu Zunyou has said he believes the current spike in infections would run until mid-January, while the second wave would then be triggered by mass travel in January around the week-long Lunar New Year celebrations which begin on 21 January." BBC. "The third surge in cases would run from late February to mid-March as people return to work." This is not the only trouble for China. "The US is rapidly ramping up efforts to try to hobble China's progress in the semiconductor industry - vital for everything from smartphones to weapons of war." BBC. "Washington's measures also prevent US citizens and green card holders from working for certain Chinese chip companies." "The Biden administration has added 36 more Chinese companies, including  major chip maker YMTC to Washington's 'entity list'. It means American companies will need government permission to sell certain technologies to them, and that permission is difficult to secure." "Under the Biden restrictions, China is severely limited in its ability to buy those chipmaking machines from abroad." TOI. "Those US efforts gathered momentum this week with Japan and the Netherlands nearing an agreement to join Washington in tightening controls over the export of up-to-date chipmaking machinery to China." China could solve its chip problem by taking over Taiwan, which it claims as its own territory, because, "Taiwan's position in the world of semiconductor manufacturing is a bit like Saudi Arabia's status in OPEC." Just one company, the "TSMC (Taiwan Semiconductor Manufacturing Corporation) has a 53% market share of the global foundry market (factories contracted to make chips designed in other countries)." The Conversation. "It is up to the Chinese people to resolve the Taiwan issue and China will never renounce the right to use force," said Chinese President Xi Jinping. Reuters. That will surely result in a full scale war with the US which has a Mutual Defense Treaty with Taiwan to prevent such an attack. wikipedia. "China's plan of reviving its relationship and extracting benefits from the Afghan Taliban seems to be fading away, especially after the recent explosion of the 'Kabul Hotel', which is seen as an attack on Chinese tourists." ANI. Many countries are struggling to repay loans from China and may suffer if they default. China apparently canceled debts of a few African countries but that may not prevent some countries from defaulting. Reuters. China is trapped in a maze. Of its own making. Attacking India won't help.

Could be a sequel.

"In 2022, India has become global champion in an area none could have predicted -- the stock market," wrote Swaminathan S Anklesaria Aiyar. "In mid-December, the Sensex was up 7.5% since the start of 2022. But the MSCI index, the most comprehensive global index, had crashed 17%." US S&P 500 down 18%, Japan' Nikkei down 3% and Germany's DAX down 10%. "In the Great Recession of 2008-9, the Sensex slumped by a massive 64%." But this time the Sensex is soaring because "Systematic Investment Plans (SIPs) have boomed in India, providing a steady flow of savings into the stock market month after month?" But, stock market booms are nothing new in India. In 1992, Harshad Shantilal Mehta used "corrupt officials signing fake cheques, misusing market loopholes, and fabrication to drive the prices of stocks up to 40 times their original price." wikipedia.  "The scam featured an embezzlement of Rs 1439 crore (Rs 14.39 billion) [$3 billion] that led to a severe crunch and drastic loss of wealth in the life savings of many investors that amounted to Rs 3542 crores ($7 billion)." cleartax.in. "He owned shares of Associated Cement Company (ACC), which saw an inexplicable surge in price from a mere Rs 200 to a Rs 9,000." From 1998 to 2001, "Ketan Parekh purchased large stakes in less known small market capitalization companies, and jacked up their prices through circular trading with other traders, and collusion with these companies and large institutional investors. This resulted in steep hikes in share prices, for example: shares of Zee telefilms zoomed up from Rs 127 to a price of Rs 10,000." wikipedia. Parekh "siphoned off public funds to the tune of Rs 1200 crore (Rs 12 billion). Moreover, the damage he caused was so serious that The Serious Frauds Investigation Office (SFIO) estimated that the extent of the fraud could touch Rs 40,000 crore (Rs 400 billion)." HT. In February 2022, the National Stock Exchange (NSE) co-location scam was exposed. "Chitra Ramakrishna, a former Chairperson of India's largest bourse - the National Stock Exchange - was manipulated by a "Siddha Purusha/Yogi" (an unidentified spiritual guru) and allegedly provided him confidential company information including NSE's five year projections, financial data, dividend ratio, business plans." TOI. "According to Republic sources, the NSE system was rigged by placing a computer close to the NSE server. This offered the brokers a 10:1 speed advantage over their competitors." News18. These brokers made windfall profits. Maybe that is why, "The currency in circulation has been going up and stood at Rs 32.2 trillion as of October. In fact, the currency in circulation to the gross domestic product (GDP) ratio as of 30 June stood at 12.9%," wrote Vivek Kaul. That's higher than the 12% level before demonetization. Aiyar is happy it is all due to SIPs. We may be excused for thinking this could be RIP-OFF. 

They like when we accuse.

"The Bharatiya Janata Party (BJP) on Saturday (yesterday) held nationwide protests against Pakistan foreign minister Bilawal Bhutto Zardari's 'uncivilised remarks' against Prime Minister Narendra Modi. Across the country, BJP workers took to the streets and burnt effigies of Bhutto, and demanded an apology from Islamabad." "The Pakistan foreign minster's remark triggered widespread outrage with the BJP terming it 'highly derogatory, defamatory and full of cowardice'." Bhutto's remarks probably followed on from US State Department's position on immunity to the Saudi Crown Prince. In November, "India expressed its displeasure after US State Department official referred to PM Narendra Modi while talking about immunity to Saudi leader Mohammed bin Salman accused of ordering the killing of journalist Jamal Khashoggi in Turkey." TN. "In September, "Saudi Arabia's powerful Crown Prince Mohammed bin Salman has been appointed prime minister - a post that is traditionally held by the king." BBC. "A royal decree announcing his promotion from deputy PM and defence minister cited an exception to the basic law." Heads of state enjoy immunity from prosecution in the US. During his visit to the US, Bhutto said, "I would like to remind the Minister of External Affairs (EAM) of India that Osama bin Laden is dead but the butcher of Gujarat lives and he is the prime minister of India. He was banned from entering this country until he became prime minister." "This is the prime minister of the RSS" and "while India's EAM inaugurated a bust of Mahatma Gandhi at the UN, he would be knowing that the RSS does not believe in the ideology of Gandhi." The RSS, or Rashtriya Swayamsevak Sangh, "presents itself as a cultural, not a political, organization that nevertheless advocates a Hindu agenda under the banner of hindutva or 'Hinduness'." Britannica. Nathuram Godse, who shot Gandhi, was a volunteer in the RSS, but claimed to have left it to join the Hindu Mahasabha before he shot Gandhi. BBC. "However, Nathuram Godse's brother Gopal Godse stated that all the Godse brothers were members of the RSS at the time of the assassination and blamed the RSS for disowning them," wrote Pritika Chowdhry. Modi was chief minister of Gujarat during communal riots in 2002 when "According to official figures, the riots ended with 1,044 dead, 223 missing, and 2,500 injured. Of the dead, 790 were Muslim and 254 Hindu." wikipedia. "In Gujarat, campaigning for the BJP ahead of assembly polls, Union home minister Amit Shah on Friday, November 25, said perpetrators of violence were 'taught a lesson' in 2002." The Wire. Which perpetrators? "By 2014, Pakistan had nearly vanished from our public discourse. India had broken laps ahead in the race. Pakistan was, at worst, a nuisance state," wrote Shekhar Gupta in December 2019. "That hyphenation has been buried. Just that we have now dug it out again." If we keep talking about Pakistan just to win elections we make it important. Pakistan will love to be hyphenated with India again. Why make it possible?      

It's not the 'foreign hand'.

"Federal Reserve policymakers may need to lift US borrowing costs above the 5.1% they penciled just this week, and keep them there perhaps into 2024 to squeeze high inflation out of the economy, three of them signaled." ET. This, despite the fact that "Inflation in the United States slowed again last month" as "Consumer prices rose 7.1% in November from a year ago, the government said." CPI inflation was 7.7% in October and 9.1% in June. "US producer prices rose slightly more than expected in November" as "In the 12 months through November, the PPI increased 7.4%. That was the smallest gain since May 2021." Reuters. In response, "The Federal Open Market Committee raised its benchmark rate by 50 basis points to a 4.25% to 4.5% target range. Policymakers projected rates would end next year at 5.1%." ET. Why should it take till 2024 for the rate hikes to take effect? Because, "Inflation is largely self-fulfilling [in the US], so if people expect higher inflation, they ask for more money at work. raise prices on what they sell or on the rent they charge," wrote Allison Schrager. "The role of expectations is potentially even more powerful than raising rates." The problem is that, "Despite a slowdown in the US, job vacancies are still very high, with the unemployment rate at a 50-year low. This has been feeding into wage inflation," wrote Vivek Kaul. "Higher interest rates in the US encourage investors to move money from different parts of the world, including India, to the US. This puts pressure on other currencies, including the Indian rupee." "The US basically ends up exporting inflation to other parts of the world." The solution would seem simple - the Reserve Bank (RBI) just needs to keep pace with the Fed and raise rates in India. However, on 7 December, the RBI "expectedly raised the benchmark lending rate by 35 basis points (bps)" even though it "kept the inflation forecast unchanged at 6.7 percent for the current fiscal". DH. Which is surprising because, "Terming the Indian economy a bright spot in the otherwise gloomy world, the RBI lowered its estimate of GDP growth to 6.8 percent in the fiscal ending March 31, 2023." That should make India the fastest growing major economy in the world. "India is on track to become the world's third largest economy by 2027, surpassing Japan and Germany, and have the third largest stock market by 2030, thanks to global trend and key investments the country has made in technology and energy." Morgan Stanley. But, surely if so much wealth is created in India, consumer demand will soar and inflation may soar with it? Niggardly rate rises by the RBI means that, "Twelve-month implied rupee yields - typically a reflection of interest rate differentials with the US - fell to the lowest level since 2009 last week." Bloomberg. "With the RBI widely expected to end a rate-hike cycle early next year, and the Federal Reserve seen peaking toward the middle, the interest-rate differentials are expected to worsen, further pressuring the carry trade and ultimately the rupee." Why blame the 'foreign hand'? Serve the nation. Not self interest.

Selling lemons? Possible.

"Over the last 30 odd years, through ebbs and flows, the zeitgeist of globalization and now the unraveling of the same, through conflicts and wars, Indian stocks have been massive outliers to all its emerging market (EM) peers," wrote Somnath Mukherjee. "Over time, the correlation between growth and stock returns have come down significantly." Our population of 1.4 billion is apparently in our favor. "India today sells a total of 3 million cars every year. (South) Korea with a population of 50 million sells 1.5 million" That is why our companies give great shareholder values. "With an 8% year-to-date (YTD) rise, the sensex is currently the best performing index in the world in 2022. The increase is in sharp contrast to most global indices that are deep in the red." TOI. "Market players said that the growing SIP contributions and buying by domestic institutional investors amid a nearly Rs 1.3-lakh-crore (Rs 1.3 trillion) selloff by foreign funds in the year has boosted Indian stocks." "India is growing faster than what is captured by the country's official data, and it presents a case for an upgrade of equities outlook, Credit Suisse said." ET. Even "The World Bank...revised upwards its GDP growth forecast to 6.9% for FY23, saying the economy was showing higher resilience to global shocks." TOI. If our economy is so strong why "India has proposed curbing the import of private jets and helicopters as the South Asian nation seeks to plug the widening trade deficit, according to a document from the country's aviation ministry seen by Bloomberg." ET. Any plane weighing over 15,000 kg (33,100 pounds) and turbo jets should be banned. "The government is working on ways to contain surge in imports of non-essential goods with an aim to boost the country's exports and reduce trade deficit an official said." ET. In the Budget in 2020, Finance Minister Nirmala Sitharaman "announced Customs duty hike on a range of items, including toys, furniture, electronic goods, and footwear." BS. In addition, "As many as 350 customs duty exemptions have been withdrawn in the Budget 2022-23 to boost domestic manufacturing." ET. The aim is to force people to buy goods manufactured in India by increasing the prices of imported goods, thus increasing investments and creating jobs. A virtuous cycle, as it were. Strangely, the government is also working on a series of free trade agreements (FTAs). "Earlier this year, the country brought into force a comprehensive economic partnership with the UAE and signed an ambitious trade pact with Australia, committing to reduce tariffs by 85%. Advanced negotiations are also under way to sign FTAs with the UK and the EU." BBC. The EU meanwhile is slyly erecting barriers to imports. "In November 2021, the European Commission proposed legislation to check EU consumption and production of agricultural produce cultivated on deforested land," wrote Sakshi Abrol. "The problem is that Europe cleared most of its primary forests decades ago." If cheap products come from abroad how will our companies profit? In which case, shares of such companies should plummet. Are they selling lemons? 

Our poor friendly neighbor.

"Lambasting New Delhi for its 'nefarious terror activities in Pakistan', State Minister for Foreign Affairs Hina Rabbani Khar has termed India a 'rogue state', saying that though it projects itself as the 'greatest victim' of terrorism, it is the 'perpetrator of it'." Geo TV. "She reminded New Delhi that it cannot have islands of excellence in a sea of depravity." "She said India continues to divert attention from state-sponsored terrorism and human right violations in IIOJK (Jammu & Kashmir)." Ouch! We, in India, have not forgotten Khar's fashion terrorism on her visit to India in 2011. "Her oversized Hermes black Birkin bag was among the top trending items on Twitter on Wednesday as India's Khar-ites contemplated the purported Rs 17 lakh (Rs 1.7 million) price tag. She alighted on Tuesday in a blue-tunic pants ensemble teamed up with pricey South Sea pearls at her neck and ears and Roberto Cavalli shades covering half her face." TOI. This was clearly designed to create heartburn in Indian women and marital discord as they blamed their husbands for being cheapskates. Sadly for Pakistan, it's not just India. "At least seven people lost their lives and 16 others suffered injuries on Sunday in Chaman, which came under heavy gunfire and artillery shelling by Afghan border forces, the military media wing said." Dawn. Earlier, "As the number of cross-border attacks targeting security forces from Afghanistan increases, Foreign Office...said Pakistan was holding discussions to sort out the issue." Dawn. Double ouch! "Mullah Omar, the founder of the Taliban, was trained by the ISI," and "As he created the Taliban, the Pakistan army gave him support for the drive on Kabul in 1996 that gave the Taliban control of most of the country." Brookings. The ISI helped the Taliban to attack NATO and US forces in Afghanistan, forcing them to flee in disarray by 30 August 2021. wikipedia. Biting the hand, as it were. Worse, "Approximately $7 billion of military equipment the US transferred to the Afghan government over the course of 16 years was left behind in Afghanistan after the US completed its withdrawal from the country in August." CNN. Actually, fled in blind panic. Alarmingly, "The foreign exchange reserves held by the State Bank of Pakistan (SBP) plunged $784 million to a nearly four-year low of $6.72 billion during the week that ended on Dec 2." Dawn. SBP is the central bank of Pakistan. India is forcing Pakistan to make difficult choices for survival. Dawn. Gen Zubair Hayat "reminded that over the past five years there were 'phantom and fake' surgical strikes claim, the 2019 Balakot incident - the first attack on the mainland, and the so-called 'accidental' launch of missile into the country's heartland." Pakistan is a victim of "full scale war to insurgencies and terrorism and more recently hybrid warfare", he said. Poor Pakistan. India is forcing it "to maintain robust nuclear and conventional capabilities". When all they want is South Sea pearls in Birkin bags.     

Who wants to be Pappu?

"India's consumer price based (CPI)  inflation eased to a 11-month low of 5.88 percent in November on an annual basis from 6.77 percent in October 2022." ET. The number has dropped within RBI's tolerance band of 2-6 percent after 10 months." It is mainly because food inflation dropped to 4.67% in November from 7.01% in October. This rise in prices is on top of the 4.91% rise in CPI in November 2021. NDTV. It may be within the tolerance band of the RBI but it means a compounding price rise for Indian consumers. Core inflation reflects change in prices of goods and services but excludes volatile food and fuel inflation. Investopedia. "Data from the CMIE (Centre for Monitoring Indian Economy) shows that core inflation increased five basis points to 6.19% in November," wrote Pavitra Kanagaraj. No wonder, "The Index of Industrial Production (IIP), a measure of industrial activity, contracted by 4% in October after expanding by 3.1% in November." Because, "The consumer goods subcategory contracted for the fourth consecutive month" despite the festive season. The Goods and Services Tax (GST) collection jumped by 11% to 1.46 trillion (Rs 1,45,867 crore), ET, showing the compounding effects of inflation rate rises. That explains the tolerance of the RBI even though Indian consumers are suffering. The RBI raised its interest rate by a cute 35 basis points to 6.25%. ET. "The RBI net sold $33.4 billion in the foreign exchange market in the first six months of the current fiscal to defend the rupee from excess volatility, FM Nirmala Sitharaman said." TOI. As a result, "The Indian Rupee has been strong against every currency," said the Finance Minister in Parliament. Since India imports more than it exports, a relatively strong rupee brings down the cost of imports and thus helps to keep inflation slightly under check. But a strong rupee makes exports more expensive. Hence, India's merchandise exports contracted to $29.78 billion in October from $35.45 billion in November, while the trade deficit widened to $26.91 billion. ET. "The merchandise trade deficit for April-October 2022 was estimated at USD 173.46 billion as against USD 94.16 billion in April-October 2021." A strong rupee and low interest rate is great for the rich. "This year has seen the highest-ever growth for such super-luxury cars in India (with a minimum price tag of Rs 2 crore [Rs 20 million] and more) as sales grew by 50% in 2022, breaking the previous record." ET. The trade deficit with China alone was $51.5 billion during April-October this year. BS. We cannot blame oil imports for this. Using percentages, Commerce Minister Piyush Goyal sought to disguise the fact that the trade deficit with China increased by about $35 billion in the 10 years from 2004-2014 but has jumped by $37 billion in the 7 years since. TOI. Who is the 'Pappu' (meaning incompetent) now, asked Trinamool Congress MP Mahua Moitra. TOI. Did anyone claim that sobriquet? We doubt it.

Endogeous negotiations.

"UK Trade Secretary Kemi Badenoch is visiting New Delhi for the sixth round of Free Trade Agreement (FTA) negotiations between the UK and India, first formal round since July." ET. "Strong growth in the Indian economy is expected to boost UK exports to India by over 9 billion pounds by the middle of the next decade." "Big-hitting UK brands such as Pret A Manger, Revolut and Tide announce expansion in India." Gov. UK. "Visit enforces UK's strategic tilt to Indo-Pacific, home to some of the fastest-growing economies in the world." Badenoch's visit to Delhi was necessitated by Brexit, when "The UK voted to leave the EU (European Union) in 2016 and officially left the trading bloc - its nearest and biggest trading partner - on 31 January 2020." BBC. The EU was a $17 trillion economy in 2021, World Bank, while India was at $3.173 trillion in the same year. Former Prime Minister Boris Johnson, a vociferous campaigner for Brexit,  predicted  it will save 350 million pounds a week which can be used for the National Health Service (NHS). Reuters. But, "Overall, Britain's net payment to the EU worked out at 181 pounds a week." "According to one study, UK exports fell by more than 20%, compared to a projection of what they would otherwise have been, in the first 15 months following the post-Brexit trade deal with the EU. Imports from Europe have bounced back, but exports haven't," wrote Clive Crook. The UK relied on new FTAs. "The first such deal was with Australia last year. Completed incompetently and in haste, it's now derided by officials, at least one former minister and UK businesses for surrendering more than it gained." "Former environment secretary George Eustice savaged the UK's free trade deal with Australia and criticised Liz Truss's role in negotiating it." BBC. "This includes giving Australia or New Zealand full access to the UK market to sell beef and sheep, while Australia still bans the import of British beef, he added." "London's Brexit options are limited and unappealing," wrote Crook. "It would need to start by acknowledging - even if tacitly - Brexit's two great tactical errors." "First, London would be negotiating with the EU from a position of weakness; second, the EU would be pleased to see Brexit fail, and conspicuously, to discourage other rebellions." "Mainstream economics tells us that people's goals ambitions are 'exogenously' given, meaning they are hardwired into us," wrote Prof Kaushik Basu. But, like the FIFA World Cup has shown "many of our ambitions are endogenously created. Rather than being born with them, we acquire and cultivate them along the way." Brexit was created by Johnson's fictitious claim of 350 million pounds. The Indian government treats us like children , wrote Manu Joseph. "They bully us in many ways, and there is a presumption visible in every public policy - that we are not smart or mature." "On their part, Indian adults do behave like children." The UK Trade Secretary is here. We are both endogenous. Should be in agrement.

Galloping Sensex.

The S&P Bombay Stock Exchange (BSE) Sensitive Index, or Sensex, is an index of 30 financially sound, well-established companies listed on the BSE. wikipedia. The index was taken as 100 on 1 April 1979 and had grown by 10 times to 1000 by 25 July 1990. On 1 December 2022. it opened on 63357.99, hit an intra-day high of 63583.07 before closing on 63284.19. wsj.com. Which means that it had grown 63 times in 32 years and 5 months. It is trading at 62,068.98 this morning. BSE. In the US, the Dow Jones Industrial Average (DJIA) is also an index of stocks of 30 prominent US companies listed on stock exchanges and is maintained by S&P Dow Jones Indices. wikipedia. Its end-of -year closing value was 40.45 in 1896, reached 107.23 in 1919, closed at 300 in 1928, fell to 59.93 in 1932 and did not reach 300 till 1954. Just before the great crash of 1929 the DJIA had grown 10 times in 9 years, peaking at 381.17 on 3 September 1929. wikipedia. This was the start of the Great Depression  and after several ups and downs the DJIA  reached its lowest level of 41.22 on 8 July 1932. It took over 25 years, till 23 November 1954 for the DJIA to return to its peak of 3 September 1929. It breached the 1000 level briefly in 1980 but did not close above 1000 consistently till 1983. macrotrends. It reached a peak of 36,934.84 on 4 January 2022 before closing down at 36,799.65. Yahoo. It closed at 33,476.46 on Friday, 9 December 2022. So, in the 39 years since 1983 the DJIA has grown by around 33 times, while the Sensex has grown by almost twice the rate in 32 years. In 1990, India's GDP was about $321 billion and has grown to $3.2 trillion in 2021, macrotrends. So India's GDP grew by 10 times while the Sensex multiplied by 63 times in the same period. In 1983, the US GDP was about $3.6 trillion and grew to nearly $23 trillion in 2021. macrotrends. So the US economy grew by 7 times while the DJIA multiplied by 33 times. The Organization for Economic Cooperation and Development (OECD) consists of 30 developed economies, wrote Karan Mehrishi. The characteristics of these countries are that they have large multinational companies, spend a lot on research. have very rich banks, powerful central banks and active citizens groups. India's largest company Reliance Industries had a revenue of $102 billion in the whole of the last financial year of April 2021 to March 2022, HT, while the US company Apple posted revenues of $123.9 billion in the last quarter of 2021 alone. Variety. Market capitalization of Reliance Industries is $214.22 billion, companiesmarketcap.com, while currently that of Apple is $2.6 trillion. Why then is the Sensex galloping so far ahead of US markets? "Today, we are facing the worst aspects of the 1970s (stagflationary shocks) alongside the worst aspects of the global financial crisis," wrote Prof Nouriel Roubini. So, "The mother of all stagflationary debt crises can be postponed but not averted." Do we have the mother of all bubbles? Will it burst?   

Chips, trees and governors.

"India's ruling Bharatiya Janata Party (BJP) scored a landslide election win in Prime Minister Narendra Modi's home state of Gujarat" as "The BJP took 156 of 182 total seats in the Gujarat state assembly following voting earlier this month, marking the party's best-ever performance in the state, a longtime BJP stronghold." CNN. "Maharashtra played a crucial role in BJP's historic win in Gujarat as development projects originally planned to be in Maharashtra eventually went to Gujarat ahead of the election, former Maharashtra chief minister Uddhav Thackeray said." HT. This was in reference to the Vedanta-Foxconn project to build a semi-conductor factory in Maharashtra which was shifted to Gujarat just before the election. ET. A bullet train between Ahmedabad in Gujarat and Mumbai in Maharashtra is apparently essential. So, "The Bombay High Court...permitted the National High Speed Rail Corporation (NHSRCL) to cut around 20,000 mangrove trees in the city and neighboring districts of Palghar and Thane for the Mumbai-Ahmedabad bullet train project." ET. In June, the ruling Shiv Sena Party split up in Maharashtra and the BJP swiftly formed a coalition government with the rebels, TOI, which fits in nicely with the adjoining state of Gujarat. Now the trees can be murdered. And elections won. North of Gujarat is the state of Rajasthan which is home to about 1.5 million members of the Bishnoi community. "Spread mostly in hamlets across Rajasthan, the community draws inspiration from Amrita Devi, a Bishnoi woman killed in 1730 while trying to protect a khejari - now a state tree." DH. "In all, 363 Bishnoi men, women and children were killed," trying to protect their trees which were cut to build the king's palace. A vanity project then, and another one now. Nothing changes. "The misuse of the office of the governor for partisan politics is as old as the Indian Constitution itself." The Wire. "Since Narendra Modi established his control over the administrative and political system in 2014, the whole dictionary and grammar of gubernatorial etiquette has reversed." "They began using every opportunity to publicly assail their state government's decisions and portray them as anti-people." Then there is blatant propaganda. "Bollywood director Vivek Agnihotri's The Kashmir Files is a 'vulgar, propaganda' movie which is inappropriate for an artistic competitive section of the International Film Festival of India, IFFI's jury head for the international competition section Nadav Lapid said." DH. This drew a storm of protest. "In countries that are increasingly losing the ability to speak your mind or speak the truth, someone needs to speak up," responded Lapid. And then, "Let's put it this way: I'm happy to be on my way to the airport now." Sadly, trees can't move.   

To be rich like the US.

"The latest National Family Health Survey (NFHS-5) data for 2019-21 indicates that India has more females than males with its overall sex ratio having risen to 1,020," even though "The sex ratio at birth (SRB), however, was still worryingly low at 929, indicating continued sex selection at birth." TOI. The normal sex ratio at birth is 105 male babies for every 100 female babies. Pew Research. When test for prenatal sex determination became available in India, "The sex ratio at birth widened rapidly from about 105 boys per 100 girls before 1970, to 108 boys per 100 girls in the 1980s; it reached 110 in the 1990s and remained at that level for roughly 20 years." It has come down to 108 boys per 100 girls in NFHS-5. Children are our future, but only if they get proper nutrition, healthcare and education. "Over 222 million children in India are living under the 'dual burden' of poverty and vulnerability to adverse climate impacts, according to a recent report by Save the Children." The Quint. "Approximately 51% of children in India are impacted by both - poverty and climate change." More than half our children will grow up to be poor adults, ill prepared for the rapidly changing world, thus perpetuating poverty to the next generation. "Children are a marginalised political constituency and while they are the country's future, today they do not vote and hence have no political voice," wrote Prof Devesh Kapur. Highly paid public school teachers do not turn up for work while a large number of private colleges are owned by politicians to make black money. "When even IITs have a 40% faculty vacancy rate, what do we think young people are learning in these colleges?" A compilation of "covid-specific surveys conducted from April 2020 to June 2022 found that the proportion of children who were not enrolled in a school, or had dropped out, ranged from 1.3% to 43.5%," wrote Rai, Vernekar and Singhal. "Further, the proportion of children who 'did not receive any online education' ranged from 10% to 60%, with one study reporting that 43% of students had not accessed any online education for a period of up to 19 months (since the start of the pandemic in March 2020)." In 2021-22, "The per capita income of Tamil Nadu stood at Rs 1.54 lakh (Rs 154,000), whereas that of Bihar was Rs 30,779 (in real terms adjusted for inflation)," wrote Vivek Kaul. The fertility rate of Tamil Nadu was 1.76, while that of Bihar was 2.98. "The fertility rate of women with no schooling stood at 2.82 whereas when it comes to women with 12 or more years of schooling, the fertility rate was at 1.78." Pew Research Center "statistics show that for middle-class Americans, average incomes jumped 6% from $74000 in 2010 to about $78,500 in 2016. Today, that figure sits at about $90,000." msc.com. In 2019, households headed by an Indian immigrant had a median income of $132,000, compared to $64,000 and $66,000 for all immigrant and US-born households respectively." MPI. No wonder, over 32 million Indians are living abroad. mea.gov.in. Educated girls mean fewer children and greater income. Soon we could be rich like the US.

Playing games.

"The Reserve Bank (RBI)...expectedly raised the benchmark lending rate by 35 basis points (bps) - the fifth increase since May" while it "lowered its estimate of GDP growth to 6.8 percent in the fiscal ending March 31, 2023, from an earlier forecast of 7 percent." DH. "It, however, kept the inflation forecast unchanged at 6.7 percent for the current fiscal and projected it to come down below the upper tolerance limit of 6 percent in the fourth quarter of the current financial year." While other central banks raise rates in multiples of 25 bps, the RBI likes to keep us entertained with unusual numbers. On 4 May, it raised its repo rate by 40 basis points in an emergency meeting of the Monetary Policy Committee. BS. The emergency was an anticipated 75 bps rate hike by the US Federal Funds rate later on the same day. WEF. If it was an emergency why not raise the rate by 50 bps? The Goods and Services Tax (GST) collection in April was a record Rs 1,67,540 crore (Rs 1,68 trillion). HT. Since GST is a percentage of the price, the higher the inflation the higher the collection. The next meeting of the Fed is on 13-14 December 2022. Federal Reserve. The Fed is expected to downshift to a 50 bps rise at this meeting, Reuters, but economists say "a longer period of US central bank tightening and a higher policy rate peak are the greatest risks to the current outlook." "Peak rate forecasts ranged between 4.25%-4.5% and 5.75%-6%." As expected, businesses in India were unhappy because this will increase borrowing costs and suppress demand, FE, implying thereby, a fall in investments. Will investments in manufacturing increase if interest rates fall? "India's overall manufacturing growth as a percentage of GDP remained steady over 60 years," wrote Prof Deepanshu Mohan. In fact, it has fallen from 17.9% of GDP in 1995 to 13.7% of GDP in 2020. "At a macro-manufacturing level, India experienced 'premature de-industrialization'." "The International Monetary Fund (IMF) has cautioned against dropping the guard against inflation" and warned that "easing monetary policy too early should be avoided and has called for continuing fight against sharp increase in prices." TOI. "Consumer confidence among Indian households continued to improve in November even though it remained in the pessimistic zone, the RBI said in its consumer confidence survey." If demand increases while supply remains constrained due to geopolitical reasons won't that increase prices still further? Perhaps, the RBI is banking on base effect. If the price of a thing rises from Rs 100 to Rs 200, the price has increased by 100%. If the price jumps from Rs 200 to Rs 300 it has risen just 50%, even though the increase was the same. The RBI may claim victory but the poor suffer enormously nonetheless. So, why do businesses continually whine for lower rates? "The RBI has disclosed that Rs 10 lakh crore (Rs 10 trillion) in bad loans have been written off in the last five years." The Wire. Playing games with interest rates. What if the Fed refuses to play along?

Planes by weight.

"India has proposed curbing the import of private jets and helicopters as the South Asian nation seeks to plug a widening trade deficit, according to a document from the country's aviation ministry seen by Bloomberg. Any import of planes weighing more than 15,000 (33,100 pounds) unladen as well as turbo jets are also 'non-essential' and shouldn't be brought in from abroad as is done now, the letter dated Dec. 6 stated." FE. "India's October merchandise trade deficit widened to $26.91 billion from $25.71 billion in September" as "India's merchandise exports fell to $29.78 billion from $35.45 billion in September." ET. "The merchandise trade deficit for April-October 2022 was estimated at USD 173.46 billion." The cumulative trade gap with China since the early 2000s has exceeded $1 trillion. The Hindu. "In 2021, annual two-way trade crossed $100 billion for the first time, reaching $125.6 billion, with India's imports accounting for $97.5 billion, pegging the imbalance at close to $70 billion." India always runs a trade deficit, which rose to a high of $122.91 billion in 2012. macrotrends. A huge chunk of this because "India's crude oil import bill surged 76% to $90.3 billion in the first half of 2022-23 even as the total import quantity increased by 15% to 116.6 million tonnes." HT. Even as the international price of crude oil increased, government taxes added to the price at the pump, increasing the cost of transport. Even after the reduction of excise duty, it still adds Rs 19.90 to one liter of petrol. godigit.com. Despite the almost complete lockdown due to Covid-19 in 2020, wikipedia, the government collected around Rs 3.72 trillion in taxes on petroleum products. In fact, "Since the financial year 2020-21 - the first to be completely impacted by the pandemic - the share of indirect taxes in the Center's total tax collections has risen above 50%." TOI. While direct taxes are linked to earnings, indirect taxes are paid by both rich and poor. "Four out of five smartphones sold in the June quarter in India were made by Chinese companies, according to industry reports." BI. "India's laptop imports surged to $5.24 billion between January and September 2022, of which $3.82 billion worth of laptops came from China alone." The Wire. "According to data, over the last five years, every three in four laptops that India has imported have come from China alone." Because they are a higher quality with lower prices despite having to be transported a distance of 2845 km (1768 miles) from Chingqinq, prokerala. com, which manufactures the largest number of laptops in the world. chongqinq.info. High taxes make it worthwhile for importers to under-invoice what they import. "In the first nine months of 2022, China claimed to have exported goods worth $89.66 billion. Data from India's ministry of commerce and trade, however, put the figure at just $7918," wrote Sumant Banerji. Plus the huge salaries of numerous tax officials. Just reduce taxes. Increase exports. Save huge on salaries. No-brainer.  

Consumption is half of GDP.

"The World Bank on Tuesday (yesterday) revised upwards its GDP growth forecast for India to 6.9% for FY23, saying the economy was showing higher resilience to global shocks." TOI. "This is the first upgrade of India's growth forecast by any international agency amid the global turmoil." India's "Real GDP or GDP at Constant (2011-22) Prices in Q2 (July to September) 2022-23 is estimated at Rs 38.17 lakh crore (Rs 38.17 trillion), as against Rs 35.89 lakh crore in Q2 2021-22, showing a growth of 6.3 percent as compared to 8.4 percent in Q2 2021-22." pib.gov.in. "Between 1990-91 and 2019-20, the Indian economy grew at an average rate of 6.2% per year, and the annual rate of population growth dropped to under 1%. As a result, per capita income improved, and paced up, with each decade," wrote Deepa Vasudevan. "A hypothetical misery index made up of 4% inflation, 5% joblessness and 7% growth would be good for India." But, "The many rising headwinds, both domestic as well as external, will more than halve the GDP (Gross Domestic Product) growth to 4-4.5% in the second half of FY2023 (1 April 2022-31 March 2023)." NDTV. The economy grew by 9.7% in the first half. In India, "Investments in factories, roads, and other fixed assets are just shy of 35% of domestic output; they haven't been this high in 10 years. Loan demand is growing so fast that deposits can't keep up," wrote Andy Mukherjee. "The oft-cited reason is what multi-national corporations refer to as their 'China+1' strategy." However, "Now that pent-up consumption from the pandemic is exhausted," "Nomura's consumption tracker fell from 11 percentage points above its pre-pandemic reading in the June quarter to below that level in October." "Only 15% of the $33 billion in private investment approved by the government under its production-linked incentive program has fructified so far; fewer than 200,000 jobs were created as of September, compared with expectations of around 6 million." Private consumption expenditure typically forms 55-60% of GDP, wrote Vivek Kaul. "It grew 9.7% during July to September, after having grown by close to 26% from April to June." Naturally, if this slows down GDP growth will follow suit. "Contraction in the manufacturing sector signals stress in Asia's third-largest economy, economists warn, after growth slowed in the second quarter amid rising prices and higher borrowing costs." ET. One reason is that, "Data from the Controller General of Accounts till September 2022 shows that the Centre transferred only 24% of the RS 334,339.42 crore (Rs 3.34...trillion) budgeted for states under finance commission grants, loans and transfers - only 33% on the revenue account and, sadly, only 5% under the capital account," wrote Rajrishi Singhal. Money is finite. If the government pockets it there is little left for others to spend. Consumption falls. Hence, so does manufacturing.  

Long Covid of the economy.

"The US Federal Reserve may consider slowing the pace of rate increases at its next meeting but that should not be seen as a 'softening' in its commitment to lower inflation, Federal Reserve Gov Christopher Waller said." BT. "Markets should now pay attention to the 'endpoint' of rate increases, not the pace of each move, and that endpoint is likely still 'a ways off', Waller said." "US employers hired more workers than expected in November and raised wages despite mounting worries of a recession," as "Non-farm payrolls increased by 263,000 jobs last month, the Labor Department said in its closely watched employment report. Data for October was revised higher to show payrolls rising 284,000 instead of 261,000 as previously reported." ET. "There were 10.3 million job openings at the end of October," and "The unemployment rate was unchanged at 3.7%." One reason for the shortage of workers is that "Around 16 million working-age Americans (those aged 18 to 65) have long Covid today. Of those, 2 to 4 million are out of work due to long Covid. The annual cost of those lost wages alone is around $170 billion a year (and potentially as high as $230 billion)." Brookings. But, surely if all those people were working and spending their cumulative wages of $170 billion it would worsen the rate of inflation? In a speech at the end of August, Fed Chair Jerome Powell predicted "some pain to households and businesses", meaning closing of small businesses with consequent loss of jobs. CNN. So long Covid has anticipated the Fed. "Following a series of interest rate hikes this year by Fed officials, the unemployment rate could rise as high as 6% next year, according to the Deutsche Bank forecast." CBS. Which implies a loss of 4 million jobs by the end of 2023. "There seems to be three different economies out there," said Ethan Harris, global economist at Bank of America. "You've got a housing market in recession, you've got a consumer who's hanging in, and then you've got a hot labor market." Vox. "Anyone who says they know exactly what is going on in the economy is lying." "Under all of the old rules, some things don't make sense right now, and it's not clear if it will all ever make sense again." Global inflation is cooling. "In the US, so-called core inflation, which excludes food and energy prices, rose a below-forecast 0.2% in October from a month earlier. Euro-zone annual inflation slowed in November by the most since 2020, but still remained elevated at 10%." ET. Adding to the confusion, "The global economy could go back to a low inflation regime," said Prof Raghuram Rajan, adding that "headwinds, including de-globalisation, slow growth in China and K-shaped recovery in emerging economies can hurt growth." TOI. Perhaps actions of people will balance things out. So long as policymakers don't mess up.

The gulf between states.

"What's growth likely to be in 2022-23 and what's the trajectory of growth from 2023-24? For both, I think, the range is between 6.5% and 7%,closer to the upper end of the band for the first question and closer to the lower end of the band for the second question," opined Chairman of the Economic Advisory Council to the Prime Minister of India Bibek Debroy. However, like the song "Anything you can do, I can do better", wikipedia, "Economic Advisory Council member Sanjeev Sanyal...said India is capable of sustaining an economic growth of 9 percent for many years." ET. India's nominal GDP was around $3.20 trillion in 2021. World Bank. At a compound annual growth rate (CAGR) of 9% our nominal GDP should reach $7.6 trillion. investor.gov. At present India is fifth behind the US, China, Japan and Germany, worldometers, but, given that Japan and Germany have much lower growth rates India would become the third largest economy in the world. Sounds fantastic, but, divided by our huge population, it will make only a slight difference to the standard of living of ordinary people. India's per capita GDP was just $2,277 was 2021. World Bank. So when can India's per capita GDP match those of rich countries? Economist Augusto Lopez-Claros explained that in Europe in 1990, the income per capita of the 3 poorest states was about 50% of that of the 3 richest states. But the poorer states grew much faster and have largely caught up because of 'fiscal federalism'. However, "India has a state like Kerala which has an income per capita in PPP terms of over USD 9,000 which is higher than Ukraine was before the war. And then the country has Bihar, which is again on PPP terms approximately USD 2000 and practically, accounts to one-fifth of that of Kerala." TN. "An all-India growth rate is a function of what states achieve and factor market reforms are largely contingent on what states do. A large chunk of public expenditure, including capital expenditure, is made by the states," wrote Debroy. "A middle-income status by 2047 is certain." But surely, we are already there. According to the new classification, countries with per capita gross national income (GNI) of $1,046 - $4,095 are lower middle-class, from $4,096 - $12,695 are upper middle-class. World Bank. In 2021, India's per capita GNI was $2,170, which is almost double that of the lower limit. World Bank. The problem is that the gap between richer and poorer states in India is getting wider. The goods and services tax (GST) was supposed to narrow that gap by transferring tax collection from rich manufacturing states like Maharashtra and Gujarat to poorer consumption states like Bihar. wikipedia. But, "As it turns out, more industrialized states such as Maharashtra and Gujarat also have a high consumption base comprised of a relatively more affluent population, and are thus able to 'capture' the tax within their state borders." howindialives.com. As a result, "over half of of the proposed industrial investment - including capacity expansions - are still accounted for by just three, relatively industrialized states: Gujarat, Maharashtra and Karnataka." India's GDP is not evenly distributed. The gulf between states is increasing.   

They are many.

"Pakistan has, for the third time in a row topped the list of countries at the highest risk of experiencing mass killings, as per an assessment by the US think-tank 'Early Warning Project' (EWP)." Times Now. Afghanistan and India were placed at seventh and eighth spots respectively. "Interestingly, India was placed ahead of Syria, Iraq, China and Iran on the list of countries at the highest risk of experiencing mass killings." This would be laughable if it wasn't so asinine and so obviously blind. In the US, "There have been at least 607 mass shootings through November 22 this year." CNN. This is less than 690 mass shootings in the same period last year. "In 2022, so far, at least 3,179 people have been shot in mass shootings, resulting in 637 deaths and more than 2,500 people injured." A clear example of 'When you point a finger at someone else, there are three pointing back at you'. Pinterest. However, even if this report seems completely inaccurate we should remember that the US and other 'white nations' hunt as a pack of hyenas. As we can see from the outrageous $60 price cap on Russian oil. BBC. That, this is a brazen attempt at plundering Russia's resource does not bother them at all. The G7 is an unofficial group of white nations, comprised of Canada, France, Germany, Italy, Japan, the UK and the USA. wikipedia. Officials of the European Union (EU), a collection of 27 countries with predominantly white populations, attend G7 meetings. Then there is NATO, an armed grouping of 30 white nations (except Turkiye) led by the US, which indiscriminately attacks smaller nations which have somehow displeased the US or Europe. That is why we should not ignore US displeasure. Last year, the US-based "Freedom House downgraded India from a free democracy to a 'partially free democracy'", while the Sweden-base V-Dem Institute described India as 'electoral autocracy' and The Economist Intelligence Unit labeled India a 'flawed democracy'. BBC. In 2020, 53 people, of which two-thirds were Muslims, were killed during riots in North East Delhi, wikipedia. Also in 2020, right-wing goons, armed with rods, sticks and acid attacked students of Jawaharlal Nehru University in Delhi, injuring at least 39. wikipedia. In August, "11 men who were convicted for the gangrape of a pregnant Muslim woman, and murder of 14 members of her family, including her three-year-old daughter in 2002," were released after serving just 14 years in prison. BBC. Why is the BBC bothered about a crime that took place over 20 years back? Because, they were released on Independence Day and were greeted with garlands and sweets. Disgusting. Government controlled investigation agencies, the Central Bureau of Investigation (CBI), Enforcement Directorate (ED) and the National Investigation Agency (NIA) are used to silence any opposition or criticism. The Wire. Fact-checkers, who highlight misinformation online, are routinely harassed and attacked. rfi.fr. India has the highest number of internet shutdowns. A government which condones violent crimes against its own citizens and then uses muscle to gag any protest is suspect in Western eyes. India is one and they are many. We better beware.

Every metric rising.

 "The Manufacturing Purchasing Managers' Index, compiled by S&P Global, rose to 55.7 last month compared to 55.3 in October, marking the seventeenth successive month of expansion in manufacturing production across India." Reuters. "Robust demand, particularly for consumer and intermediate goods, and marketing pushed the new orders sub-index to a three-month high. International demand rose for an eighth consecutive month and at a similar pace to October." Private consumption expenditure forms 55-60% of GDP, wrote Vivek Kaul. "A close to 10% growth of private consumption, or the money you and I spend on buying things, is what primarily drove the GDP growth." Investment grew by 10.4%. While India's PMI shows strong growth, "The Association of South East Asian Nations  (ASEAN) manufacturing PMI slowed further to 50.7 in November, from 51.6 in October. China's Caixin manufacturing PMI was in contraction zone for the fourth month in October," wrote Harsha Jethmalani. More encouragingly, "The input cost pressure for Indian manufacturers was the weakest in 28 months and the reading is well below its long-run average." This should bring down consumer prices. India has recovered from the Covid-19 pandemic and the war in Ukraine in much better shape than other major economies, wrote Soumya Kanti Ghosh. "We found that if the household budget was Rs 100 in September 2021 across all countries, it has now increased by Rs 12 in both US and India, but it has increased by Rs 20 in Germany and Rs 23 in UK." As a result of inflation. "In terms of increase in energy prices, what cost Rs 100 is now up by Rs 12 in US, a staggering Rs 93 in UK, Rs 62 in Germany and Rs 16 in India." The stock market index, the Sensex is at a record level. On 2 December, "After some end-of-the-session profit-taking at higher levels, the index logged a 185-point gain at 63,284 - a new closing high for the index. The sensex has now closed at a new high for six days in a row." "With an over 8% year-to-date (YTD) rise, the sensex is currently the best performing major index in the world in 2022. The increase is in sharp contrast to most global indices that are deep in the red." TOI. The Dow Jones Industrial Average is down nearly 7% YTD and the Nasdaq has crashed by 30% in the US. Inequality has decreased in India since 2011-12, wrote Prof Himanshu. The Gini coefficient is used to measure inequality with 0 indicating perfect equality and 100% indicating total inequality. wkipedia. The rural Gini in India "fell from 28.7 in 2011-12 to 25.8 in 2017-18. The decline was larger in urban areas, with the Gini reading falling from 36.7 to 32.9." This could be because "the poor were in a better position to weather the economic shocks and slowdown because of an expansion of India's social protection base over the past two decades." No wonder, US President Joe Biden promised to help his "dear friend" Prime Minister Narendra Modi during India's presidency of the G20. Zee News. India is flying. Fingers crossed. 

Expats keep on paying.

"The world must cooperate to tackle the greatest challenges of climate change, terrorism and pandemics, Prime Minister Narendra Modi said on Thursday (1 December) as India began its year-long presidency of the Group of 20 (G20)." Reuters. He said, "India would aim to depoliticise the global supply of food, fertilizers and medical products, so that geo-political tensions do not lead to global disruptions." "India must use the G20 to launch a collaborative effort to weaken the dollar," wrote Swaminathan S Anklesaria Aiyar. "The over-strong dollar has stoked high inflation in other countries, since most commodities are priced in dollars." "The rupee has gone from Rs 74 to Rs 82 to the dollar this year. Even when oil returns to its pre-war price in dollars, it will be 12% more expensive in rupee terms." Crude oil prices have already fallen sharply with the West Texas Intermediate (WTI) falling from $120 per barrel in May to $81 per barrel today. Trading Economies. "The US dollar tends to strengthen when the global economy is weak, the Unites States outperforms the rest of the world, and the Fed goes on the offensive with rate hikes." JP Morgan Private Bank. But the dollar may be weakening because, "The softer-than-expected US CPI report was a clear start, China has made moves towards reopening and supported property sector weakness, and European natural gas prices are over 60% off their summer highs." What Aiyar wants. "India's economic growth pace halved to 6.3 percent in July-to-September, amid rising repo rates and contraction in manufacturing." ET. Private consumption which constitutes 55-60% of GDP "grew by 9.7% during July to September, after having grown by close to 26% from April to June," wrote Vivek Kaul. "Investment, which forms a much smaller part of the GDP" grew by 10.4%, while government expenditure contracted by 4.4%. A survey by People Research on India's Consumer Economy (PRICE) reported that cities with populations of over 1 million accounted for 27% of the middle class, and 43% of the rich. "These cities generate 29% of the country's household disposable income, 27% of total spending and 38% of total savings." TOI. In the 9 metro cities of Mumbai, Delhi, Kolkata, Bengaluru, Chennai and Hyderabad "nearly 55% of households were middle class and 13% were rich and 32% were aspirers." And yet, despite strong economic growth, more recognition abroad and rising numbers of middle class and rich people Indians want to migrate abroad. In 2021, Canada admitted 100,000 Indians who have become permanent residents of Canada, wrote Biju Dominic. 721,050 Indian-born people are living in Australia. "Almost 76% of Indian students looking to study abroad plan to work and settle overseas after completing their international degree. In contrast, 86% of Chinese students returned home to China between 1978 and 2019. Perhaps, not such a bad thing. India is to receive a record $100 billion in remittances from expat Indians in 2022. CNBC. India will have the largest population by 2023. BBC. Makes sense to export what we are experts at producing. Goes on paying every year.