India's Proposition 47.

"India's latest inflation number at 7.4% comes as a shocker, with doom speak all around," wrote Madan Sabnavis. "This is so because we have been talking of getting to 4%, which is axiomatically taken to be the ideal mark." The Monetary Policy Committee (MPC) of the Reserve Bank of India (RBI) was formed in 2016 and held its first meeting in October. It was given a mandate to target a consumer price index (CPI)  inflation rate of 4% with a margin of 2% on either side till March 2021, which was extended to March 2026. ET. The MPC has been successful in keeping inflation at or below 4% in only 23% of months, while it has exceeded 5% in 52%, over 6% in 35% of months and between 5 and 6% in 16% of months. Which means that the MPC has failed to honor its mandate 77% of the time. So what does Sabnavis recommend? "Therefore, there exists a practical argument for revising the central target to 5%, up 1 percentage point." Since the MPC seems to be targeting 6% why not increase the target to 6%? Or better still, set the target at 10%, in which case the MPC will be spectacularly successful. It is like Proposition 47 in California, USA which has reduced the crime rate by redefining shoplifting, forgery, car theft and burglary as a misdemeanor, a minor offence, and not a felony, if the value of stolen goods is below $950. wikipedia. This has apparently reduced the prison population by 13,000 and saved the state $150 million in one year. "President of the California Retailers Association Rachel Michelin stated that the thieves will bring in calculators to ensure that they do not go over the $950 limit and that 'one person will go into a store, fill up their backpack, come out, dump it out and go right back in and do it all over again'." So, why has the RBI failed in its duty to control inflation? It is a department under the Ministry of Finance, Government of India. wikipedia. And, "because governments are the biggest beneficiaries of inflation. They collect more receipts from indirect taxes and their soaring debt is slowly eroded by inflation." mises.org. In 2016, then RBI Governor "Raghuram Rajan has often been accused of not cutting the repo rate fast enough and in the process hurting economic growth," wrote Vivek Kaul. "In June 2016, the rate of inflation as measured by consumer price index was at 5.7 percent. The repo rate at 6.5 percent is hardly enough." Today, the repo rate is also at 6.5%, and the MPC made no change in its August meeting, for the third time running. BT. While CPI inflation was at 7.44% in July. BT. "India collected Rs 1.65 lakh crore Goods and Services Tax (GST) for the month of July, registering a growth of 11% from a year earlier." ET. At Rs 155.6 trillion, central government debt has fallen from 61.5% of GDP to 57.1% because nominal GDP has soared due to inflation. ET. At some point it will probably catch up but as long as it is not before May 2024. Just a matter of timing.

Give them data. Not bull.

"India's economy shines as a beacon of hope in these challenging times. With robust growth and resilient spirit, the future looks promising," Prime Minister Narendra Modi said. "While affirming a 'BAA3' rating on India, Moody's said that despite growing at a high rate, India's potential growth has come down in the last 7-10 years. Further, it flagged that India continues to suffer from a high debt burden and weak debt affordability." ET. "The Baa3 rating and stable outlook also take into account a curtailment of civil society and political dissent, compounded by rising domestic political risk," Moody's said. "India called the credit rating as unfair and the Economic Survey charged the global credit rating agencies with prejudice against emerging economies such as of India." Outlook. "Countries like Indonesia have been rated higher than India." "India's dissatisfaction with lower sovereign ratings is not a fresh development." ET. "India even pressed for an independent BRICS nations rating agency, aimed at creating appropriate ratings standard for the emerging market economies, to provide an alternate view to the three Western rating agencies that hold over 90 percent of the market." It is not the function of rating agencies to increase the election popularity of the Indian government. They provide guidance to foreign funds that invest into India. According to a Morningstar report, "the value of FPIs' (foreign portfolio investors) in Indian equities rose from $523 billion as of June 2022 to $626 billion at the end of June 2023." news.abplive. That is more than our forex reserves. "India's foreign exchange reserves jumped $708 million to $602.161 for the week ended August 11, the Reserve Bank of India (RBI) said." News18. If government officials are to persuade rating agencies of India's galloping economy they have to provide credible data to back up their claims. They can't. "Behind India's record-setting growth lies a glaring caveat: the world's most populous country has a serious data problem." Bloomberg. "The issue is not limited to outdated numbers. Frequent revisions to existing data have added to frustrations. making it difficult to predict where one of the world's fastest-growing economies is headed." "The infusion of politics into data-collection has frustrated many of India's top statisticians, who've emphasized that the nation can't reach its growth goals if nobody knows what's happening on the ground." India's first census was held in 1881. "For the next 130 years, after independence and through wars and other crises, India kept its date with the census - once a decade, hundreds of thousands of enumerators visited every household in the country to gather information." BBC. Rating agencies are actually very considerate. They have not lowered us to junk. As yet.

Delhi lockdown.

"Schools and offices in Delhi may remain closed or go online for the four days of the G20 Leaders' Summit in New Delhi scheduled in September." India.com. "According to reports, schools and colleges may be advised to move to online mode and offices could be asked to be on work from home between September 8 and 11 in view of the mega event." And there is a possibility that residents of the city "will be issued an advisory to stay at home and only step out for essential services for three days in a row." TNIE." The heads of government of all the 20 nations that comprise the G20 are expected to attend. wikpedia. In September 2022, 157 heads of state attended the UN General Assembly meeting in New York in the US of A. Vladimir Putin, Xi Jinping, Prime Minister Abiy Ahmed of Ethiopia and Indian Prime Minister Narendra Modi did not attend. NYT. China actively supports Russia's actions in Ukraine so the absence of the two leaders is understandable. Modi probably did not want any discussion about the bonanza of cheap oil from Russia. "From a market share of less than 1 percent in India's import basket before the start of the Russia-Ukraine conflict, Russia's share of India's oil imports rose to over 40 percent." NDTV. As a result, "India's imports from Russia doubled to $20.45 billion during the April-July period of this fiscal due increasing inbound shipments of crude oil and fertiliser from that country." After receiving a Nobel Peace Prize in 2019, Abiy probably stayed away because of the war with Tigray fighters and bloody ethnic clashes between Oromo and Amhara tribes. Reuters. Did New York shut down with 157 self-important leaders gathering to blow off hot air which will be news in their home countries and ignored by others? Detailed timetables of the closure of sections of certain streets were announced by New York police, designed to cause least disruptions of life in the city. NBC. Xi Jinping has made 42 international trips to 69 countries in the 11 years since he became President of China on 15 November 2012. wikipedia. Whereas, Modi has visited 65 countries in 70 foreign trips since he captured power in May 2014. wikipedia. So, Modi has made nearly twice as many foreign trips than Xi Jinping in 9 years. Naturally, it cost the Indian taxpayer Rs 254.87 crore (Rs 2.5487 billion) in the last five years. DH. Meanwhile, "The engineers who built the mobile launch pad and other important components for the Chandrayaan-3, have reportedly not received their salaries for more than a year." CNBC. And, "Banks have written off bad loans worth Rs 14.56 lakh crore (Rs 14.56 trillion) in the last nine financial years starting 2014-15, Parliament was informed." ET. The rich have done well. And Modi is off to South Africa, Greece and Indonesia (HT), before lockdown in Delhi. Who cares about Engineers? And us.

SBI is a government bank.

"Breaking news: According to an SBI (State Bank of India) research report, there has been a massive rise in middle-class income in India. The report is based on income tax returns filed for FY11 to FY22," and shows that "The mean weighted income has risen nearly three times form Rs 4.4 lakh (Rs 440,000) to Rs 13 lakh (Rs 1.3 million) in assessment year 2023-24 (corresponds to financial year 2022-23)." "When calculating a weighted average, before the final calculation is completed, each number in the data set is multiplied by a predetermined weight." Thus, "the weighted average assigns weights which decide the relative importance of each data point in advance." cleartax.in. In 2011, the exchange rate of the rupee rose from 44 to 56 to the dollar. Thomas Cook. If we take an average of 50, Rs 440,000 in 2011 would have bought $8,800. In 2022-23, the rupee rose from 75 to 80 to the dollar. Taking an average of Rs 78 to one dollar, Rs 1.3 million converts to $16,667. It is double, not triple of $8,800, but respectable nonetheless. The average annual inflation rate in the US varied from 3.2 in 2011 to 8.0 in 2022. usinflationcalculator.com. Taking an average inflation rate of 2.5 per year from 2011 to 2023, a basket of goods costing $8,800 in 2011 would cost $11,546 in 2022. Therefore, accounting for the value of the rupee against the dollar and inflation rate in the US, the increase in income for middle-class Indians rose by about 58%, not by 300%, from 2011 to 2023. Promptly, "Prime Minister Narendra Modi...citing an SBI report said income tax return data suggests the weighted mean income has witnessed a remarkable leap over the past nine years," resulting in "a widening tax base across different income brackets, with a minimum threefold increase in tax filings and nearly fourfold surge in some brackets." TNIE. Why such elation? Because income tax is collected on nominal income without accounting for inflation, which has ranged from 10.02% in 2013 to 3.33% in 2017. macrotrends. net. "The Indian government has collected Rs 6.53 lakh crore (Rs 6.53 trillion) as gross direct tax in the ongoing financial year (starting 1 April) up to August 10, showing a growth of 15.7 percent year-on-year, data showed." ET. Modi "highlighted India's progress towards equitable and collective prosperity". Collective it may be, equitable it definitely is not. The median salary of CEOs in India rose from Rs 115.1 million in FY19 to Rs 118.1 million in 2021, whereas the median salary for workers fell from Rs 644,000 in 2019 to Rs 640,000 in 2021. A "Business Standard analysis revealed that a typical Indian CEOs salary in FY 21 was 184 times the median employee salary." BS. "The Government of India has postponed the decadal census, which was due in 2021, indefinitely," wrote Yamini Aiyar. "The only conclusion to draw from the Government of India's stubborn refusal to fill the statistical vacuum is that it fears the political consequences of acknowledging the reality that poverty may well have increased." That's why the government is building food stockpiles which it will use to bring down prices before the general election. Bloomberg. The SBI gives just one set of figures without analysing what it means. SBI is a government bank. And, Brutus was an honorable man.      

Why can't they see it?

"Headline inflation is expected to average well above 6 percent in the second quarter, said the Reserve Bank of India's (RBI) monthly bulletin." "Beating analyst's expectations, India's retail inflation surged to 7.44 percent in July on an annual basis as against 4.81 percent in June, showed data released by the ministry of statistics." ET. "The sharp rise can be attributed to a steeper-than-expected surge in the prices of vegetables, especially tomatoes, over the past month." "In its meeting last week, the Monetary Policy Committee (MPC) had kept the policy rate unchanged at 6.5% for the third consecutive time." "The MPC remains resolute in its commitment to aligning inflation to the 4 percent target and anchoring inflation expectations," said (Governor) Das in the bulletin. By doing nothing? What Das probably means is that we are lucky that the RBI did not reduce the policy rate. "Risk of stagflation currently in India remains very low, with a probability of only 3 percent, notwithstanding a sharp pick-up in inflation, said the RBI's bulletin." DH. If the RBI is trying to allay our fears, the risk must be real. "Stagflation is the phrase when an economy faces moderation in GDP growth and high inflation." "Evidence from 22 economies, particularly those heavily reliant on non-commodity exports, indicates that higher commodity prices and the US dollar appreciation are key factors contributing to the risk of weak economic growth and high inflation, particularly in emerging market economies." "On 26 July, the US Federal Reserve raised rates for the eleventh time in its current round of increases. on 27 July, the European Central Bank (ECB) raised rates for the ninth time in a row. This was followed by the Bank of England raising rates for the fourteenth time on 2 August," wrote Vivek Kaul. India was in a Goldilocks situation with a GDP growth rate of 6.5% in the financial year 2023-24, according to the RBI, and a cooling core inflation which was down from 5.1% in June to 4.9% in July, wrote Sonal Varma & Aurodeep Nandi. But the three bears of higher headline inflation in July along with falling growth rate in the US and China and a K-shaped recovery in India could result in a stagflation -like environment. However, "In our view, with core inflation showing signs of deflation and inflation expectations well contained, the RBI is right to be looking through the current food price shock." Is it? Inflation means prices higher than before which, in turn, means that the rupees in our wallets is buying less than before. Whatever the cause. In July, the consumer price index (CPI) in the US rose by 3.2% year-on-year. bls.gov. The minutes of the July 25-26 meeting of the US Federal Reserve showed that participants are still concerned over inflation rates and may raise the Funds Rate further. ET. That may strengthen the dollar against the rupee and push up cost of imports in India, leading to higher prices. "India, an import dependent country, could feel the heat of a falling Rupee in an inflationary environment as it stands to further the spending decisions of households. Exactly. Don't need a PhD in economics to see that. Why can't they?

Babies before apartments.

While the rest of the world is battling inflation, China's prices fell in July. "Retail prices in the country fell by 0.3% in the 12 month period ending July," wrote Vivek Kaul. Producer prices have fallen for 10 months in a row. "In July, the fall was 4.4%, implying that wholesale prices at the factory level have been falling for 10 months now." "China's goods exports in US dollar terms fell by 14.5% from July 2022. At the same time goods imports fell by 12.4%." To add to its problems, "China's fertility rate is estimated to have dropped to a record low of 1.09 in 2022, the National Business Daily said." Reuters. The replacement level of total fertility rate is 2.1, below which the population will start to shrink. wikipedia. "Hong Kong's Family Planning Association said in a separate release...that the number of childless women in the special Chinese administrative region more than doubled from five years ago to 43.2% last year," and "the average number of children per woman dropped from 1.3 in 2017 to a record low of 0.9 last year." China is now a middle-income country with a current per capita income at $12,500, one-fifth that of the US, wrote Ruchir Sharma. "The original Asian miracles, Japan, South Korea and Taiwan, had positive population growth at China's stage of development. Only two (Lithuania and Latvia) had a shrinking workforce." "Before the 2008 crisis, China's debts held steady at around 150% of GDP," but now "Total debt is up to 275% of GDP, and much of it funded investment in the property bubble, where all too much of it went to waste." "Country Garden, a Chinese real estate giant, has lost billions of dollars and racked up $200 billion in unpaid bills. It's on the hook to deliver, by one estimate, nearly 1 million apartments across hundreds of cities in China." ET. "A default by Country Garden would be the latest in a string of collapses in the housing market," and has led to worries that it will end up like China Evergrande which collapsed in 2021. In addition, "Zhongrong International Trust Co, which traditionally had sizable real estate exposure, missed payments on dozens of investment products since late last month, a senior officer told angry investors." Reuters. "China's $3 trillion shadow banking sector is roughly the size of Britain's economy, and concerns about its outsized exposure to property and risks to the wider economy have grown over the past year." "China's major state-owned banks were seen selling US dollars to buy yuan in both onshore and offshore spot foreign exchange markets this week...in an attempt to slow the yuan's depreciation." Reuters. Trouble is, minutes of the Federal Open Market Committee (FOMC) show, "Most participants continued to see significant upside risks to inflation, which could require further tightening of monetary policy." ET. Which means more pressure on the yuan. So bad is the situation that China has stopped releasing the youth unemployment figures. "The age 16 to 24 category has seen unemployment far above the overall jobless rate, reaching a record high of 21.3% in June." CNBC. If the population starts falling who will live in all this real estate? Xi Jinping has to increase pregnancies. Can he?

Rs 25,000 vs Rs 84.66 trillion.

In a surge of extreme jingoism, Zee News asked, "Is Indian Rupee in the race to take over the American Dollar? More than 18 countries have agreed to use Rupee for international trade with India. After this more than 35 countries have shown their interest to trade in Indian Rupee." "After the efforts of the RBI, rupee has become like a reserve currency in South Asia." "Whether you travel to China, Europe, Argentina or Cuba, Dollars have an advantage of being accepted while shopping or renting hotels. Indian Rupee has to reach the pocket of foreign travelers and investors." That would mean the government will have to allow Indian rupees to be freely taken out of India and to be able to exchange any amount of rupees into any foreign currency. "As of December 21, 2020, there was $2,040.7 billion in circulation totaling 50.3 billion notes in volume." "As much as one-half of the value of US currency is estimated to be circulating abroad." uscurrency.gov. Which means a total of US$1.020 trillion, equivalent to Rs 84.66 trillion, is in foreign hands. Whereas, an Indian citizen can carry a paltry Rs 25,000, equivalent to $301.20, when traveling abroad. nriguides.com. We are not even allowed to bring more than Rs 25,000 in currency when returning from abroad. The problem is, what will other countries buy from India with Indian rupees? "In July, goods exports fell by around 16% to $32.3 billion," wrote Vivek Kaul. "Along similar lines. goods imports fell by 17% to $52.9 billion." "India's overall exports (merchandise and services combined) in June 2023 is estimated to be $60.09 billion, which is -13.16% over June 2022, according to PIB release in July. Overall imports in June 2023 is estimated to be $68.98 billion which is -13.91% over June 2022." ET. India buys more than it sells. "India and the United Arab Emirates have started settling bilateral trade in local currencies with India's top refiner making payment in rupees for purchase of a million barrels of oil from the Middle Eastern nation, the Indian government said." ET.  "The transaction comes after one involving the sale of 25 kg gold from a UAE gold exporter to a buyer in India at about 128.4 million rupees ($1.54 million)." Indian exports to the UAE came in at $31.3 billion while imports were at $53.2 billion during the financial year April 2022-March 2023. india.briefing.com. Perhaps, the UAE can utilise the extra rupees it accumulates in financing remittances by Indian nationals working in the country. "The number of resident Indian Nationals is estimated to be 3.5 million in 2021 as per UAE records." Embassy of India, UAE. An added problem is the erosion in the value of the rupee against the dollar. "The rupee was pegged at 4.79 against a dollar between 1948 and 1966." ET. Today one dollar buys over Rs 83. xe.com. The reason is that high inflation in India erodes the value of the rupee. "Inflation, without accounting for food and energy prices, known as core inflation, stood at 4.9% in July, as against 5.1% in June." Mint. However, consumer price (CPI) inflation jumped to 7.4% in July. Rupee replacing the dollar? The RBI smiled.

Claiming credit for the inevitable.

"India will be a developed country by 2047, Prime Minister Narendra Modi said in his 10th Independence Day speech, juxtaposing that long term goal with the more short-term objective of the country's economy becoming the world's third largest - it is currently fifth - which he said would happen during his third term." HT. "Well, I am confident" "And it is because of that confidence we are able to say, yes, we will see India as a developed country by 2047. Now third-largest, it is certainly something that PM (Modi) has mentioned as a guarantee that in his third term, we will achieve it," echoed Finance Minister Nirmala Sitharaman. "For starters, the country would have to make its per capita income grow more than five-fold in 24 years, which calls for annual growth of 7 percent. Since the country's population will continue to grow, GDP would have to grow faster than that," wrote TN Ninan. According to the UN's present classification, "A country with GNI (gross national income) per capita of up to $1,085 is low income economy, up to $4,255 in the next bracket of lower middle-income, up to $13,205 as upper middle-income and above that high-income economy," wrote Darpan Singh. "In a special report titled India@100, the Reserve Bank of India (RBI) has projected that the country's real GDP will have to grow 7.6% per annum for the next 25 years, raising its current per capita GDP of $2,500 to $22,000, to join the developed economy club," wrote Pragya Srivastava. India has never grown at that rate for that long. However, a nominal GDP growth rate of 8.3% will take the nominal GDP to $5 trillion in 2027 and to $10 trillion by 2036. Real GDP is derived by adjusting the nominal GDP for inflation. Investopedia. India's annual GDP deflator was 8.3% in 2022. World Bank. To calculate a country's GDP properly needs accurate data. "Given the weaknesses in India's statistical system, annual data on many sectors is unavailable. India's national accountants use outdated data, heroic assumptions and rough proxies to fill these gaps in the national accounting database," wrote Pramit Bhattacharya. Modi may not win the next election, "But India will grow to become the third-largest economy in the next few years almost regardless of who is in the prime minister's seat, because India's growth trajectory was set long before Modi became PM, and it has been on course despite the shocks he has himself administered to it," wrote S Raghotham. "Population and economic growth will ensure a larger economy," wrote Congress leader Salman Anees Soz. "If GDP rankings were a measure of well-being, our first Prime Minister Jawaharlal Nehru would have celebrated India's 8th largest economy rank in 1960 when much of the country lived in extreme poverty." For comparison, GDP in rupees is converted to US dollars at current prices. From 4.79 to a dollar the Indian rupee has fallen to 83 to a dollar today because India has much higher inflation than the US. ET. According to the World Bank, at constant prices in 2015 US dollars the Indian GDP stood at $2.95 trillion in 2022 (the IMF calculated it at $3.39 trillion in current prices), while Japan's economy was $4.51 trillion at constant prices in US dollars," wrote Vivek Kaul. India will have to maintain a much higher rate of growth than Japan consistently to become the third largest in the next few years. Growth is inevitable. As long as it is not spoiled by bad policies.    

Very bad or only a little bit?

"India became a free land on August 15, 1947, and was relieved from the reigns of 200-year old British rule." BQ. "If we estimate excess mortality from 1891 to 1920, with the average death rates of the 1880s as normal mortality, we find some 50  million (5 crore) people lost their lives under the aegis of British capitalism," wrote Dylan Sullivan and Jason Hickel on British rule in India. But, "If we measure excess mortality over England's 16th- and 17th-century average death rate, we find 165 million (16.5 crore) excess deaths in India between 1880 and 1920. This figure is larger than the combined number of deaths from both World Wars, including Nazi holocaust." "India's mortality rate from 1921 to 1950 was higher than England's in the 16th and 17th centuries," and "In fact, it was higher even than the average mortality rate that afflicted China during the Great Famine of 1959-61." Regarding the British Empire, "To the majority of Britons even today, it is something to be proud of, a force of progress, decency and rule of law around the world, despite the occasional excesses of a 'few bad apples'," wrote Caroline Elkins. "The natives were 'half-devil and half-child' in Rudyard Kipling's conception, John Stuart Mill advocated 'paternal despotism' to deal with them." "At every point the ideological agenda was to reconcile the logic of necessary violence with its civilising mission." "Much of India's trade in the 19th century, over two-thirds of imports and a third of exports, was with the UK. The imports were largely manufactured goods and exports were raw materials going into the making of these goods," wrote Vivek Kaul. "This ultimately had an impact on education levels." Even now, "The overall literacy rate as per our last census in 2011 was around 73%, with only 65% of women being literate." So, the British are devils? Not so, wrote Swaminathan S Anklesaria Aiyar. "India's GDP stagnated at $33.75 billion from 1 AD to 1000 AD, the Hindu-ruled period. Per capita income also stagnated at $450 as the population remained steady at around 75 million." The population stayed at the same level for 1000 years "Because drought, disease, and wars meant that merely staying alive was a challenge." "Between 1700 and 1950, India's GDP  went up from $50 billion to $222 billion, the fastest growth ever. India's share of world GDP fell not because it was impoverished but because the Industrial Revolution helped other countries grow much faster," wrote Aiyar. No matter what the figures say, conquering a nation with military force and subjugating its population is a criminal act. No excuses. And yet, even today a lot of Indians would prefer living in Britain than in India. "The latest UK Home Office statistics show that the number of Indians crossing the English Channel on small boats has shot up in the first three months of this year, making them the second-biggest cohort after Afghans." TOI. Afghans are escaping from the Taliban. What are Indians escaping from? Back to the evil colonial masters.  

Two bumbling nations.

"News that a Chinese coast guard ship fired water canon on a smaller Philippine counterpart in a disputed area of the South China Sea should be worrying enough," but videos show, "Most of the Chinese ships involved are marked 'China Coast Guard', but among the flotilla are also at least two blue-hulled vessels that resemble fishing boats." CNN. Experts believe that "those boats belong to a Beijing-controlled maritime militia that experts say is hundreds of vessels strong - and officially deniable - force that China uses to push its territorial claims both in the South China Sea and beyond." "The economic woes that China is currently facing, prompted fears that Beijing in turn could become more aggressive, and compensate by escalating the risk of a war with the US over Taiwan, Voice of America (VOA) reported." TOI. "Also, China's economic slowdown...is further expected to worsen if other nations follow the US lead in restricting investments in China." China may gamble that US help to Ukraine has left it short of weapons. "President Biden sat down for a recent interview in which he said the United States is low on 155 mm artillery ammunition rounds, sparking outrage and questions of competency from conservatives on social media." New York Post. What else is it low on? The US is certainly not low on debt. For the first time, the US Government debt reached $32.6 trillion or 122.8% of its nominal GDP in June 2023. CEIC. "Credit card balances rose by $45 billion to $1.03 trillion in the second quarter", the New York Federal Reserve Bank said. Reuters. "Household debt ticked up 0.1% to $17.06 trillion" but "credit card delinquencies are at an 11-year high, as measured using a four-quarter average, the data showed." Meanwhile, "Fitch downgraded the United States to AA+ from AAA, citing fiscal deterioration over the next three years and repeated down-the-wire debt ceiling negotiations that threaten the government's ability to pay its bills." Reuters. Biden seems to be borrowing the 'revdi culture' from India, possibly to increase his vote tally in next year's re-election bid. "In total, the Biden- Harris administration has approved more than $116.6 billion in student loan forgiveness for more than 3.4 million borrowers." US Department of Education. Just as PM Modi announced cash transfers of Rs 6000 per year to small and marginal farmers at an annual cost of Rs 750 billion just before the 2019 general election, Outlook, which he won handsomely. Farmers here, students there, revdi culture as default option. "Lean times faced by many US and European companies last longer than expected as they try to sell off their bulging inventories in an economic climate where demand is stalling." Reuters. "The fight against the steep price rises unleashed by the pandemic and war in Ukraine has been long and painful, with central banks hiking interest rates at a scorching pace to cool inflation." CNN. But, "Oil and food prices have jumped in recent weeks, and wages are growing strongly in some of the world's biggest economies." With the US election on 5 November 2024, it may be the best time for China to attack Taiwan. Will the US accept the challenge? Can it?

No humility. No sympathy or compassion either.

"Prime Minister Narendra Modi on Saturday (yesterday) addressed G20 Anti-Corruption Ministerial Meeting in Kolkata virtually, stating that India has a strict policy of zero tolerance against corruption." NDTV. But, only against the opposition. "The renewed hullaballoo about corruption - which as you know happens only among those in the political opposition; the clever ones who switch to the ruling party are at once washed clean with an unfailing saffron detergent - is, crucially, sought to be peddled with the stamp and seal of the Dear Leader," wrote Badri Raina. "One reason that the BJP won a landslide in 2014 was because it promised to eradicate corruption and create an India based on clean governance. After nine years of BJP rule, there should have been no corruption in India," wrote Vir Sanghvi. "Even if that is a sincere intention, upon assuming office, the winner will quickly realize  that it is best to focus  on critics of the government and opposition political parties, since going after one's own allies for corruption will erode one's political base. Hence, an unintended consequence of the original plan is to plant seeds of cronyism. Even while targeting corruption, protecting friends and doling out favors to allies strengthens the leaders hold on power, and the country slides towards authoritarianism. In the end, corruption, too, could end up rising rather than falling," wrote Prof Kaushik Basu. An exact description of India under BJP in 3 sentences. "Humility does not come naturally to the Bharatiya Janata Party (BJP) and Prime Minister Narendra Modi," wrote Nilanjan Mukhopadhyay. "Pragmatism bordering on unprincipled pursuit of power is clearly the party's mantra now." So, Modi has not uttered a word on Manipur for over two months even as, "Deadly violence has plunged Manipur, a scenic Indian state bordering Myanmar, into turmoil for more than two months." BBC. "The violence has left more than 130 people dead, nearly 60,000 have become refugees in their own land." Eventually, Modi was forced to answer a no-confidence motion in Parliament. "However, in his speech that lasted 2 hours 20 minutes, Modi spoke about the violence hit-state for barely ten minutes in which he said his government was working towards peace." The Wire. Instead, "Modi devoted the entire duration to recall the alleged wrongdoings of the Congress governments of the past" until "The opposition eventually walked out of the House in protest after Modi hadn't touched upon the Manipur issue nearly two hours into his speech." The Wire. Not just humility, Modi doesn't do sympathy or compassion either. Just as he has no sympathy for the people of Manipur he uttered not one word of sympathy for the thousands of migrant laborers forced to walk hundreds of kilometers with little children (TOI) when he imposed one of the strictest lockdowns in the world on 24 May 2020 with just 4 hours notice. NYT. And no help. Modi is beyond the point of no return. He cannot lose the next election in 2024. Will he impose martial law if he is losing? Will our generals obey? India is facing its greatest danger since Independence. Not from China or Pakistan, but from inside. 

Statist to billionaires.

"The Directorate General of Foreign Trade (DGFT)...restricted imports of certain laptops and computers under HSN8471 with immediate effect."ET. Restrictions imposed on "import of laptops, tablets, all-in-one personal computers and ultra small form factor computers and servers. These electronics can be imported only against a valid license meant for restricted imports." "The Indian 'big state' has lately been striking back. As it did this week by announcing drastic controls on the import of personal computers, laptops, tablets and so on," wrote Shekhar Gupta. "The objective, we were told officially first, was to promote domestic manufacturing. By the very next day, the discourse had moved on. National security had taken precedence." "When national security is invoked, Indians usually trust their government and go silent." But, "Every now and then, pictures of VIP tours through India's top scientific facilities, especially the laboratories of the Defence Research and Development Organisation (DRDO), pop up on social media (mostly Twitter), where sharp eyed observers note the presence of Chinese CCTV cameras, Hikvision being the most prominent brand." "The biggest reform of 1991 was industrial delicensing. In one swoop, it took away the power of bureaucrats to decide who would produce what, how much, where and for whom," wrote Ajit Ranade. Most importantly, "We need to import low-cost tablets in large volumes simply to remedy a covid-induced education deficit," and "As digital devices have a high rate of obsolescence, free and instant access to the latest products are imperative." Our $500 billion exports of software needs high-tech hardware. "This move to suddenly label items as restricted doesn't ban them, it merely adds to the red tape for businesses," wrote Tim Culpan. "The earlier import-tax policy - part of the 'Make in India' program - was likely a far bigger driver of manufacturing than the later incentives." "But a restrictive regime that is based on licensing amounts to neither carrot (incentives) nor stick (tariffs)." By combing the annual Forbes list of billionaires, Ruchir Sharma found, "There were 500 billionaires worth a total of less than $1tn in 2000; now there are 2,500 worth over $12tn." "Ironically, these include most prominently nations with deep socialist roots, including France, Sweden, Russia and India." "Among emerging markets, the 2023 analysis highlights two more nations with strong statist tendencies, India and Russia. In both, total billionaire wealth exceeds 20% of GDP - nearly double the average of other developing nations on my list." The state has a 'monopoly on violence' because of its control of the police and military. "Thus the words 'statism' and 'statist' describe institutions and political practices in which executive authority gathers increasing levels and varieties of power into its hands." pages.uoregon. As a result, "With the wealth of the crony-capitalist sector going up from 5 percent to almost 8 percent of its Gross Domestic Product (GDP) in the past decade, India ranks at 10th position in the British magazine The Economist's 2023 'Crony-Capitalism Index'." The Print. Since laptops and tablets are essential today we can expect more billionaires among those that hold licenses and those that grant them. Statist to crony capitalism to billionaires. Up the index.        

Simply compounding.

"Monetary Policy Committee of the Reserve Bank of India (RBI) on Thursday (yesterday) unanimously decided to keep policy repo rate unchanged at 6.5 percent for the third time in a row but revised retail inflation projection for the current fiscal to 5.4 percent from its earlier estimate of 5.1 percent, citing upturn in food inflation and uncertainties in global oil prices." DH. "The Indian economy is likely to grow at 6.5 percent in the financial year 2023-24, said RBI Governor Shaktikanta Das." ET. "The RBI will withdraw nearly one trillion rupees ($12.07 billion) from the banking system through a temporary increase in the amount of funds lenders set aside with the central bank, as it tries to keep a lid on inflation." Reuters. "Liquidity surplus in India's banking system has averaged around 2.5 trillion rupees in August, up from 1.6 trillion rupees in July, pushing down overnight borrowing and lending rates." "To control the price rise, the government in 2016 gave a mandate to the RBI to keep retail inflation at 4 percent with a margin of 2 percent on either side for a five-year period ending March 2021." ET. This mandate was extended to 31 March 2026. Though the mandate is to target a retail inflation of 4% the RBI seems to be targeting the upper limit of 6%. Inflation means rising prices and higher prices mean higher tax in government pockets. "India collected Rs 1.65 lakh crore (Rs 1.65 trillion) Goods and Services Tax (GST) for the month of July, registering a growth of 11% from a year earlier." ET. India's consumer price index (CPI) increased by 4.6% in October 2019 and has been consistently higher than 4% since then, reaching a high of 7.8% in April 2022. rateinflation.com. Inflation is compounding. Politicians lie when they claim that CPI inflation of 4.81% in June 2023, BT, means that prices are coming down because this rise was on top of a 7% rise in prices in June 2022, which was on top of a 6.3% rise in June 2021 and another 6.3% rise in June 2020. Which means that an article which cost Rs 100 in May 2020 now costs Rs 126.72. If GST on that article is levied at 12%, the government would have got Rs 12 in May 2020 but, with the cost having risen to Rs 126.72, the government will now pocket Rs 15.20 in GST on the same article. No wonder then that the government's debt has fallen. "The Central Government's debt was Rs 155.6 lakh crore (Rs 155.6 trillion) as on March 31, 2023. It has reduced from 61.5 percent of GDP in 2020-21 to 57.1 percent of GDP in FY 2022-23," Minister of State for Finance Pankaj Chaudhary said." ET. That is because Nominal GDP, or GDP at current prices, grew at 16.1% to Rs 272.41 trillion in 2022-23, because of inflation, while Real GDP, or GDP at constant prices, is estimated to have grown by 7.2% to Rs 160.06 trillion. pib.gov.in. High prices mean that ordinary Indians are having to reduce their consumption, according to the RBI, ET, while government employees are to see a 3% rise in Dearness Allowance to 45%. BT. Compounding inflation and compounding Dearness Allowance. No wonder they can afford to smile.

Actually pouring.

"Now the world's most populous country, India could experience a decades-long investment boom. Goldman Sachs Investment Inc analysts expect its share of equity market capitalization to quadruple between now and 2075 - reaching 12%, when it will be neck and neck with China's. (Over that same period, the US share is projected to drop by half, to 22%)." "China is the world's second largest economy, featuring a massive consumer market and advanced manufacturing. India has friendlier relations with the West and a young workforce." Although still the second largest economy, China's problems are multiplying. "China's consumer and producer prices both declined in July from a year ago, a sign of deflation pressure as demand in the world's second largest economy wanes. The consumer price index dropped 0.3% last month," while "Producer prices fell for a 10th consecutive month, contracting 4.4% in July from a year earlier." China's "Imports dropped 12.4% in July year-on-year," while "exports contracted 14.5%, steeper than an expected 12.5% decline and the previous month's 12.4% fall." Reuters. "Mexico and Canada have replaced China as the top providers of goods to the US as a nearshoring push encourages more diversified supply chains. The US imported $203 billion in goods from China in the first six months of the year, 25% less than in the same period in 2022, based on the latest unadjusted data from the Commerce Department." ET. However, things are never as they seem. To bypass trade restrictions, "scores of major Chinese companies are investing aggressively in Mexico, taking advantage of an expansive North American trade deal. Tracing a path forged by Japanese and South Korean companies, Chinese firms are establishing factories that allow them to label their goods 'Made in Mexico', then trucking their products into the United States duty-free." ET. But, when it rains, it pours. "Typhoon Doksuri slammed into southeastern China's Fujian province on July 28," and "The rains that followed soaked Hebei, a province of 75 million, and the neighboring cities of Beijing and Tianjin. Flooding in those regions stranded residents, washed away bridges and highways, killing about 30 people in total, according to Chinese authorities." CNN. But, of course, flooding cannot be permitted in Zhongnanhai in Beijing (wikipedia). "Nearly 1 million people in China's northern Hebei province were relocated after record rains forced authorities to channel water from swollen rivers to some populated areas for storage, sparking anger online over the homes sacrificed to save Beijing." NDTV. The deputy commander of the PLA Rocket Force Wu Guohua died under mysterious circumstances on 6 June, India Today, and, recently, "China replaced two leaders of an elite unit managing its nuclear arsenal, triggering speculation of a purge." BBC. All very well, but will India gain from China's problems? We hope.    

More naked than Churchill.

"An investigation by the New York Times (NYT) has reached the doors of the Lok Sabha and put the spotlight once again on Neville Roy Singham, who has been accused of working closely with the Chinese government media machine and is financing its propaganda worldwide, including news portal NewsClick." ET. "Singham, 69, himself sits in Shanghai, where one outlet in his network is co-producing a YouTube show financed in part by the city's propaganda department." "In New Delhi, corporate filings show, Singham's network financed NewsClick, that sprinkled its coverage with Chinese government talking points." "NewsClick in a statement on their website said the allegations are false and misleading." "In 2017, Singham married Jodie Evans, a former Democratic political adviser and co-founder of Code Pink. The wedding, in Jamaica, was a Who's Who of progressivism." DH. "Singham sent his money through a system that concealed his giving." He used 4 nonprofits, "Because US nonprofit groups do not need to disclose individual donors, these four nonprofits worked like a financial geyser." "Evan, 68, was once a Democratic insider who managed the 1992 presidential campaign of California Governor Jerry Brown." "Evans now stridently supports China." So what? We know that China uses all kinds of nefarious methods to extend its influence. The most important question is whether China influenced the 2020 US elections through Singham to ensure a victory for Democrat Party candidate Joe Biden (wikipedia), because of the effects of President Trump's tariffs on the Chinese economy (cepr.org) and whether China is the motivator behind a series of politically motivated cases against Donald Trump (BBC) to ensure that he does not return to power in the 2024 election. Predictably, the NYT article has stirred up mindless shouting by the usual storm troopers in India. "Calling itself a pioneer in using big data for 'hybrid warfare' and the 'great rejuvenation of the Chinese nation', a Shenzen-based technology company with links to the Chinese government, and the Chinese Communist Party, is monitoring over 10,000 Indian individuals and organisations in its global database of 'foreign targets', an investigation by the Indian Express has revealed." That includes the Prime Minister. China has hacked into Indian hospitals, power grids and UIDAI which houses biometric details of all Indian citizens. Outlook. It means that China not only knows everything going on in our country but can create duplicate identities of Indian citizens using the intrusive Aadhaar card (wikipedia). A naked Churchill apparently had nothing to hide from Roosevelt. The whole Indian nation is naked before China. Who needs Singham?        

Pakistani woman wins.

"What PM Shehbaz Sharif blurted out recently," "Though none in high office can admit it publicly, in a moment of despair he admitted that wherever he visits, disdain is written on the faces of hosts," wrote Pervez Hoodbhoy. Even worse, "This understated the truth: Pakistan is seen everywhere as problematic even as major world powers cosy up to India; foreign companies are fleeing skill-empty Pakistan but high-tech semiconductor manufacturers woo India; and Pakistan's space program has faded away even as Chandrayaan and Mangalyaan elevated India to the world's top four space-faring nations." "The economy is projected to grow at two to three percent, and the average inflation rate is expected to decline to the range of 20-22pc in FY24, from 29.2pc in FY23, according to the latest State Bank of Pakistan (SBP) monetary policy statement." The rupee will decline by 20.4% in FY24, according to the IMF. It is trading at 284.80 to 1 USD. xe.com. The economy grew by a dismal 0.29% in FY23, the economy shrank from $375.449 billion in FY22 to $341.554 billion in FY23, and per capita income fell from $1,766 to $1,568. Dawn. The latest census estimated the country's population at just under 250 million, total fertility rate is at 3.3% and the population is projected to cross 400 million by 2050. Dawn. Politicians are competing to use religion against opponents. "Jinnah was labeled Kafir-e-Azam by the hard right. Zia used Nizam-e-Mustafa to ascend to power." Dawn. "But what is happening now is different. Politicians have begun taking more and more extreme positions, and it is actually working." "The game of 'Who is a Better Muslim' needs to end. Unless it does soon, it will turn into a trans-generational shift towards extremism and violence, the likes of which we have not seen before." Then there is the Tehreek-i-Taliban Pakistan (TTP). "The recent militant attack in the Zhob town of Balochistan, where the Pakistan military lost nine soldiers, was one of the latest in a string of attacks targeting security forces in areas that were previously considered relatively free of militancy." Dawn. It would therefore seem to make sense that Pakistani woman Seema Ghulam Haider apparently sold her house in Pakistan, flew to Dubai and then to Nepal and finally crossed the land border between Nepal and India by bus, with four children, to marry and live with her lover Sachin Meena, whom she met online while playing PUBG. dseodisha.in. Life in India should be much easier than in Pakistan. Hence, it is impossible to understand why, "A 34-year-old Indian mother of two children who traveled to a remote village in Pakistan to marry her Facebook friend after converting to Islam." ET. "Anju - who now goes by the name of Fatima after converting to Islam - on July 25 married her 29-year-old friend Nasrullah, whose home is in the Upper Dir district of Khyber Pakhtunkhwa." ET. Common sense says that Pakistani Seema has got a much better deal than Indian Anju. Hence, Pakistani woman more intelligent than Indian. Much more.

Not so vibrant.

"Of the 4,001 legislators in state legislatures across the country, 44% face criminal charges. The picture at the central level is not much better - 43% of Lok Sabha MPs elected in 2019 have criminal charges against them, compared with 34% in 2014. It's not just criminal charges that MPs have racked up - the assets of 71 MPs reelected to the Lok Sabha between 2009 and 2019 ballooned close to 300% on average." We know all this because of the non-profit Association for Democratic Reforms (ADR) set up 25 years ago by Prof Trilochan Sastry and some of his colleagues at IIM-Ahmedabad. Recently another professor, Sabyasachi Das at Ashoka University has written a paper "Democratic Backsliding in the World's Largest Democracy" in which he analyses huge amounts of data to find indications of manipulation in favor of the BJP in he 2019 general election. "The paper says that this manipulation resulted in the party (BJP) winning a disproportionate share of closely contested constituencies in the 2019 Lok Sabha election." The Wire. "While the figure is much less than the BJP's required half-way mark of 272 to form a government on its own, the author alarmingly concludes through data analysis that electoral fraud even in a single constituency would imply that such manipulations by incumbent parties are possible." "The Ashoka University came out with a statement distancing itself from the research, as the paper attracted criticism from the section supporting the ruling BJP," DH. This is not the first time that Ashoka University has caved into threats from the BJP. In 2021, Prof Pratap Bhanu Mehta resigned his post at the university as, "After a meeting with Founders it has become abundantly clear to me that my association with the University may be considered a political liability. My public writing in support of a politics that tries to honor constitutional values of freedom and equal respect for all citizens, is perceived to carry risks for the university." "Two days after political commentator Pratap Bhanu Mehta resigned from the Ashoka University, his colleague Arvind Subramanian, put in his papers...and faculty members wrote to the vice-chancellor expressing their deep anguish." ET. What makes suspicion of manipulation credible is that "the Union government is yet to provide a reply for the last four years after it promised parliament that it would obtain information from the Election Commission about possible discrepancies between the Electronic Voting Machines (EVMs) and Voter Verifiable Paper Audit Trail (VVPAT) tallies during the 2019 elections." The Wire. Maybe it can't. Because the answer is embarrassing. BJP MP Nishikant Dubey tweeted "how can someone in the name of half-baked research discredit India's vibrant poll process?" Firstly, the paper does not discredit the "vibrant poll process", but manipulation in favor of the BJP. Second, Dubey does not provide any statistical analysis of his own but labels the research "half-baked". This is clear mudslinging and he should be prosecuted for criminal defamation, which only India seems to practice (The Wire). Criminals in control. And they are passing laws. What a democracy! Anything but vibrant.  

Cheetahs are foreigners.

On 17 September 2022, "The Prime Minister, Shri Narendra Modi today released wild Cheetahs - which had become extinct from India - in Kuno National Park (KNP). Cheetahs - brought from Namibia - are being introduced in India under Project Cheetah, which is the world's first inter-continental large wild carnivore translocation project. Out of the eight Cheetahs there are five female and three male Cheetahs." pib.gov.in. Cheetahs are highly specialised living creatures, not posters for photo ops. "So far, nine cheetahs have died at KNP since March." TOI. "Last month, two cheetahs died due to infection in wounds caused by the radio collars around their necks. However, the environment ministry said all cheetah deaths were due to natural causes." "The two African cheetahs found dead in India's KNP this week perished due to bacterial infection in their blood after a maggot infestation in the wet skin under their radio collars that went unchecked, a leading South African expert said." The Independent. Must have been in agony. But, they died of "natural causes". So lucky! "South African and Namibian experts behind the translocation of cheetahs to India have written to the Supreme Court that their 'expert opinions are being ignored by the newly set up steering committee of the project' and they have been reduced to 'window dressing'." TOI. "The committee has denied the allegations." We Indians know everything from our ancient knowledge. Don't need foreigners to advise us. In October 2022, "The Indian government's science departments announced...a plan to organise a conference on akash or space, described as one of the five 'primal elements' of panchamabhoot alongside agni (fire), vayu (air), jala (water) and prithvi (earth)." TT. In February 2022, "Amid criticism about a central government body spreading  'superstition and unscientific' information about cows through reference material on cattle, the Rashtriya Kamdhenu Aayog (RKA)...deferred its 'Gau Vigyan' (cow science) online exam scheduled for February 25." TOI. "A meeting of experts led by Indian Council of Medical Research (ICMR) director general Dr Rajiv Bahl, and Niti Aayog member Dr VK Paul was held last week to discuss setting indigenous growth standards for children. This is despite several experts saying that this was a futile exercise since India was a part of the Multicentric Growth Reference Study (MGRS) of the World Health Organisation (WHO) in 2003, which drew up the growth standards currently being used in India." TOI. But first, the director of the International Institute for Population Sciences, which conducts the Family Health Surveys,  KS James was suspended for inconvenient data. The Wire. Indian lives are cheap. Who cares if children are stunted and anemic? Just create new lower standards. But the cheetahs are foreigners. Problem.    

License and ban.

"India needs to focus on the manufacturing sector to achieve sustained growth of 7-7.5 percent until 2030, Chief Economic Advisor V Anantha Nageswaran said." ET. "The share of manufacturing in total gross value added has to increase from 16 percent at present to at least 25 percent of GDP at the expense of agriculture and low value added services," he said. Gross fixed capital formation, which is a marker for investment, must increase from 29% to 35% of GDP. "Over the past two decades, the services sector grew rapidly without a manufacturing boom, unlike other countries where manufacturing growth precedes services. The services sector's contribution to GDP has risen from 45 percent to 55 percent while manufacturing has remained largely stagnant at 15 percent in 2017 and 17 percent in 2022." ET. "India on Thursday (3 August) said it will impose a licensing requirement for imports of laptops, tablets and personal computers with immediate effect, a move that could hit hard the likes of Apple, Dell and Samsung and force them to boost local manufacturing." Reuters. "The government in its notification gave no reason for the move." Apparently this is because of security concerns about hardware imported from China. This after, "iPhone maker Apple...opened its first-ever store in India at Mumbai's Bandra Kurla Complex, underscoring its ambitious drive in the country." "The US company now makes almost 7% of its iPhones in India," and "Apple's suppliers Foxconn, Wistron and Pegatron employ some 60,000 workers in India." TOI. "According to provisional data from the commerce ministry, India's exports to China dipped by 28% to $15.32 billion in 2022-23, while imports rose by 4.16% to $98.51 billion in the last fiscal. The trade gap widened to a record high of $83.2 billion." The Wire. "India's pharmaceutical exports this fiscal year are set to grow nearly twice as fast as last year to hit sales of $27 billion, driven by strong US buying, a government-backed trade body told Reuters, despite deaths linked to Indian-made cough syrups." ET. A report by CareEdge showed that 43% of India's total pharma imports are from China. "The contribution of bulk drug imports from China has exhibited significant growth in both value and volume terms, increasing from 64% and 62% in FY14 to 71% and 75% during FY23, respectively," the report said. "On 20 July, India banned exports of non-basmati white rice in an attempt to calm rising domestic prices at home." BBC. "IMF chief economist Pierre-Olivier Gourinchas reckons the ban would drive up prices and that global grain prices could rise up to 15% this year." "India has a stockpile of an eye-popping 41 million tonnes of rice - more than three times the buffer requirement." The government "could easily distribute to poorer Indians or release into the open market to cool down prices. The fact is, for control-mad bureaucrats in New Delhi, export bans have become the first, not last, response to rising domestic prices," wrote Mihir Sharma. Trade is a two-way process. If you restrict, others also will.

Rating down, market down, dollar up.

"Rating agency Fitch on Tuesday (1 August) downgraded the US government's top credit rating, a move that drew an angry response from the White House and surprised investors, coming despite the resolution of the debt ceiling crisis two months ago." Reuters. "Fitch downgraded the United States to AA+ from AAA." "More than a decade ago, John B Chambers and his colleagues at Standard & Poor's made a momentous decision: They were going to strip the United States of its cherished AAA credit rating." npr. "On the first day of trading after the announcement, the Dow Jones Industrial Average dropped by more than 600 points, and the Nasdaq closed 6.9% lower. Markets hadn't had a day that bad since the Global Financial Crisis." Naturally, the Obama administration reacted furiously and S&P President Deven Sharma was forced out. Reuters. After the recent Fitch downgrade, "On Wall Street, the Dow Jones Industrial Average fell about 1%, to 35,282, the S&P 500 lost 1.38%, to 4,513, and the Nasdaq Composite dropped 2.17%, to 13,973." Reuters. Strangely, Indian stocks fell as well. "India's benchmark stock indices declined nearly 1% through midday on Wednesday (2 August)," as "All sectors plunged, with stocks of the public-sector banks and metals correcting the most." BQ. Equally strangely, "The dollar rose on Wednesday as investors shrugged off Fitch's US credit rating downgrade," because, "Private payrolls rose by 324,000 jobs last month, the ADP National Employment report showed, more than the increase of 189,000 that economists polled by Reuters had forecast." ET. "The Indian rupee ended 14 paise lower against the US dollar on Thursday (yesterday) amid a stronger American currency in the overseas market  and weakness in domestic equities." Mint. "On Wednesday, the Foreign Institutional Investors (FIIs) net sold Indian shares worth Rs 1,877.84 crore (Rs 18.7784 billion), while Domestic Institutional Investors net sold shares to the tune of Rs 2.23 crore (Rs 22.3 million)." Foreign funds were selling emerging markets to reduce risk and to seek safe haven, which happened to be the dollar. ET. "Indian investors turned poorer by Rs 3.5 lakh crore (RS 3.5 trillion) on Wednesday as foreign portfolio investors (FPIs) sold shares to meet redemption pressures in developed markets spooked by Fitch Ratings Inc's downgrade of US credit rating." HT pressreader. "As foreign investors repatriated dollars after selling their Indian assets, demand for the greenback rose, driving the rupee lower by 33 paise to close at Rs 82.58 to the dollar." "If you hear the buzz, the Indian economy is the bright spot in a gloomy world." ET. "Why then, do all three global rating agencies, namely Fitch, S&P and Moody's, have the lowest investment-grade rating on India?" Ethnic clashes continue to kill and destroy properties in Manipur (wikipedia) and Haryana is just cleaning up after violence between Hindus and Muslims (TOI). That shows poor governance and makes India unstable. If American companies can downgrade America, India would be easy. Must be careful. Very.    

A matter of millions.

"The number of income tax returns (ITRs) filed in the assessment year 2023-24 touched an all-time high of more than 67.7 million, which is 16% higher than the total ITRs filed during the previous assessment year's 58.3 million." Mint. Assessment year (AY) 2023-24 is when the total income earned in the fiscal year 2022-23 is the computed and tax on the income is collected. hdfclifecom. Of the total, 5.37 million ITRs were from first-time filers, which is an indication of an expanding tax base. High fives all round. However, Finance Minister Nirmala Sitharaman claimed 74 million entities had filed ITRs. TOI. "There has been a 6.18 percent increase in the number of persons filing Income Tax Returns in FY 2022-23 as compared to persons in FY 2021-22," she said in the Lok Sabha. FY 2022-23 corresponds to AY 2023-24, and 'persons' presumably means 'individuals', and not companies. The tax department says 16% increase while the FM tells parliament 6.18%. In the period 2002-2008, "Gross fixed capital formation (GFCF), a measure of investment in the economy, touched an all-time high of 36% of GDP in 2007-08 (at current prices) and averaged a heady 34% during the period," wrote N Madhavan. Average economic growth was 8.8%. "GFCF has steadily declined and is currently hovering at 29%." The government claims that animal spirits are back. "The expansion of private capex in 2022-23 is broad-based with an increase in most sectors," said Chief Economic Advisor V Anantha Nageswaran. There is private investment but "it is selective in sectors such as cement, auto,oil & gas, green investments and those driven by production-linked incentives (PLI) schemes," said Hetal Gandhi. Production linked Incentive (PLI) scheme is an incentive provided by the government to increase manufacturing within India. wikipedia. "Of the new projects worth Rs 5.96 trillion announced in the first quarter of 2023-24 - the highest in five years - almost 74% of the amount is from the airline sector, which ordered new planes by the hundreds." This is not an investment in India as the planes will be from Boeing, an American company, or Airbus, a European one. "The seasonally adjusted S&P Global Indian Manufacturing Purchasing Managers' Index (PMI) was 57.7 in July, a tad lower than 57.8 in June," wrote Harsha Jethmalani. However, "Growth in new export business picked up to the fastest pace since November, according to the PMI survey." Sadly, "In the first half of 2023 alone, approximately 70 startups have collectively laid off more than 17,000 employees, according to data from CIEL HR, a recruiting and staffing firm." ET. Worse, "Only 45% of Indian graduates who apply for jobs are employable, with the readiness to meet industry's fast changing demands, a new study based on evaluations across 2,500 campuses and 440,000 learners has suggested." ET. Can't be taxpayers if you can't be employed. Hence the confusion in the increase. 16% or 6.18%?     

Growth at any price.

"The combined index of Eight Core Industries (ICI) jumped by 8.2% in June 2023 which was the highest in five months." Mint. "Seven of eight sectors which include Steel, Coal, Cement, Refinery Products, Natural Gas, Fertilizers and Electricity reported an increase in production, while the production of Crude Oil declined by 0.6% during June 2023." Decline in production of crude oil with a rise in refinery products reflects the increased import of cheap Russian oil. "India's imports of oil from Russia rose to an all-time high in June. ET. "India bought nearly 2 million barrels per day (bpd) of Russian crude in June." "In terms of market share, Russia supplied about 42% of India's crude oil imports in April-June, the first quarter of India's fiscal year." "India collected Rs 1.65 lakh crore (Rs 1.65 trillion) Goods and Services Tax (GST) for the month of July, registering growth of 11% from a year earlier." ET. "The central government's debt stood at Rs 155.6 lakh crore (Rs 155.6 trillion) or 57.1 percent of the GDP at the end of March 2023, Parliament was informed." ET. "The debt of state governments at the end of 2022-23 is estimated to be about 28 percent of GDP." So, the combined debt of the Center and state governments comes to 85.1% of GDP. The Central government's capital expenditure rose 33% for the third year in a row to Rs 10 trillion (3.3% of GDP) and is budgeted at Rs 13.7 trillion (4.5% of GDP) for 2023-24. However, despite the jump in capital spending, "Formal job creation remained muted in May after a stellar rise in April even as less-paying jobs increased, official data...showed." ET. "According to HSBC Holdings Plc, the widespread cereal shortages in India could drive inflation higher in the country, even though the shock from vegetable prices is expected to ease in the coming months." ET. "Vegetable prices in India are set to stay higher for longer, as erratic monsoon rains delayed planting and damaged ripening crops, farmers and traders said." Reuters. Both energy and grain prices spiked when Russia invaded Ukraine. "While the energy price index is significantly below pre-war levels, the same cannot be said about grain prices," wrote Roshan Kishore. But, "Indians singed by price pressures may not get any relief soon on fuel prices, as economists don't expect the Central government to immediately cut taxes on petrol or diesel despite the availability of fiscal space and oil marketers earning close to Rs 10 for every liter they sell." ET. "A disaggregated analysis of Consumer Prime Index (CPI) data - it is India's benchmark inflation measure - shows that while the contribution of fuel prices to the headline inflation number has come down, it is still in positive territory." The government is unconcerned about high food prices because high tax collections means more to spend for the election next year. And so, "Though the diet itself might be less expensive almost three-quarters of India's population could not afford a healthy diet in 2021," and "What is more alarming is the fact the the new UN report also shows the prevalence of undernourishment within India is on the rise - and well above global prevalence." HT. The government is rich, people are undernourished. That is growth. With Indian characteristics.