Faulty statistics makes us statistically insignificant.

There have been questions about India's GDP data ever since the base year was shifted to 2011-12 in 2015. GDP is a measure of a country's "finished goods and services" produced within its borders. Since consumption patterns change over time the base year is changed to reflect the new goods and services being produced. This is practiced everywhere. But how do you compare the new GDP with that in previous years, called back series, when the contents have changed? This is complicated. "Simply put, the difference in output at 2011-12 between the two series occurred due to an upward or downward shift in the production curve, which included new economic activities and/or excluded older activities that became extinct." The quarrel with the new method arose because it showed a higher growth rate during this government's tenure compared to the growth rate under the previous Congress-led government, wrote TCAS Raghavan. The opposition called the new back series data "gimmickry, jugglery, trickery and chicanery". Two members of the National Statistical Commission (NSC) resigned in protest when the government suppressed the jobs data claiming it was just a draft. But the acting chairman of NSC, PC Mohanan said that the report was final once he approved it. Now the National Sample Survey Office (NSSO) has published a report saying that the MCA21 database used for calculating the new GDP is faulty because "38% of companies that are part of the database could not be traced or were wrongly classified". "There is a high probability that India's growth figures will decline if these 'ghost' companies are removed from the data." "The ministry had deemed these companies as 'active companies' -- those that have filed returns at least once in the last three years." Objections to the new GDP data do not stand up to scrutiny, wrote Prof A Javadekar. GDP growth is not directly correlated to bank credit, car sales are related more to fuel prices than to bank credit and growth in the last two years was driven by government spending and not by consumer demand. The Central Statistics Office (CSO) is responsible for the National Accounts Statistics, wrote P Bhattacharya. The Chief Statistician of India (CSI) is secretary to the ministry of statistics and programme implementation (MoSPI) as well as the NSC. "In March 2010, Sen modified the composition of the Standing Committee on Industrial Statistics (SCIS) without consulting the NSC, earning the NSC's ire." "As far as NSSO surveys are concerned, the NSC has regulatory powers, since it took over the role of the governing council," said a former NSC member. "But its oversight of CSO's activities is very limited. CSO could ignore it when it wanted, and did so when it suited them." Too many committees, too many pen-pushers trying to increase their own importance to continue in their tinpot positions. Others must think we are idiots.  

Ignorance maybe bliss, but could cost a lot.

In 2013, "The government and the Reserve Bank of India (RBI) were in panic mode," wrote A Ranade. Economic growth had been 5% in the previous year, inflation was running at 14%, the current account deficit was above 3% of GDP, the stock market index, the Sensex had dropped steeply and the price of oil was around $100 per barrel. When the Chair of the US Federal Reserve Ben Bernanke announced that the Fed would start reducing its bond purchases, known as quantitative easing, there was global panic, with selling of emerging markets and strengthening of the dollar, known as 'taper tantrum'. The rupee fell from Rs 55.48 to the dollar in May 2013 to 60.73 in June and to 68.83 in August. Along with Brazil, Indonesia, South Africa and Turkey, India was classed as the "Fragile Five". Time to panic. An unorthodox weapon was proposed. "RBI offered foreign depositors protection from rupee depreciation if they were willing to bring dollars for a tenure of three years. The protection was actually subsidized insurance and covered half the cost." The then Governor of the RBI Raguram Rajan thought it was a crazy idea but "went along reluctantly". "It worked like magic." India received "around $40 billion in Foreign Currency Non Resident Deposits (FCNR), the exchange rate stabilized, stock markets recovered, and the current account deficit reduced". Subsequently, oil prices fell, the rupee became stronger and three years later when the bonds were redeemed the "RBI actually made a profit". The RBI has resorted to dollar swaps again even though there is no panic and the rupee is stable. The RBI has auctioned $5 billion on two occasions, apparently to inject liquidity into the economy. In three years when the bank refunds the dollars it has bought the rupee may be weaker, in which case, "the central bank has not only taken on exchange rate risk, but also credit risk on the counter party". The RBI will carry out further currency swaps, officials said. Large companies rushed to take advantage, with India's richest company Reliance Industries and one of its units cornering 60% of the swap on 23 April. The cost of borrowing dollars is lower, so, "That makes it cheaper for domestic firms to borrow overseas, and then swap into rupees with the RBI, according to analysis." Engaging in dollar swaps, "the RBI is operating like a hedge fund, taking on considerable interest rate and exchange rate risk", wrote Dahejia and Subramanya. Why? The present Governor of the RBI is a graduate in history with no knowledge of economics. Does he think that history will repeat itself and the RBI will make another profit? The fate of India hangs on such ignorance.

A welcome trade war.

"Just as the world thought that the US and China were headed for a truce on their trade war, US President Donald Trump has sprung a surprise, threatening to raise tariffs on $200 billion worth of Chinese imports as early as Friday," wrote an editorial in the Mint. Everyone was caught on the hop because just days before he had tweeted that talks were progressing "very well" and they could be close to an "historic" deal. "Late on Monday, US trade representative Robert Lighthizer accused China of trying to substantively change the text of a deal between the two countries as it neared its final stages," though he insisted that a deal is still possible. "We're not breaking off talks at this point. But for now....come Friday there will be tariffs in place," he said. Stock markets throughout the world fell steeply on the news. Treasury Secretary Steven Mnuchin agreed with Lighthizer that "China had reneged on previous agreements". China is not just a threat to global trade but it has built nuclear submarines capable of lethal second strike on the US and has deployed a large number of missiles capable of destroying US aircraft carriers and bases in Japan and Taiwan. This is an existential threat for India. China is now a bigger threat for NATO than Russia but Europe is so dependent on Chinese trade that it is reluctant to confront it. "It's an economic war," said Sun Microsystems co-founder Scott McNealy. "China is certainly fighting it, and they actually map out their game plan for all to see." China has no intention of respecting international rules, wrote S Deb. "The most celebrated victories in Chinese history are not based on valour, but on deception." "The West thought that freer markets would to lead a flowering of democracy, but the Chinese did not believe either in free markets or in democracy. Using deception, "China would borrow the techniques from the West to develop", while its government "actively sanctioned and encouraged audacious covert programmes to steal technology and Western intellectual property." The FBI has woken up to pervasive Chinese spying so that "30 Chinese professors in the social sciences, heads of academic institutes, and experts who explain government policies have had their visas to the US cancelled in the past year". Economic stimulus in China and softening of monetary policy in the US are creating asset price bubbles, wrote Prof VA Nageswaran. "Given that the current asset price boom cycle, the final denouement too will necessarily be worse than the fallout of the 2008 crisis." By creating a major correction in markets Trump has prevented a collapse later on. China's power depends on its economy. If that collapses it will be great for India. We pray.

Cash versus them.

"On 8 November 2016, in a televised address to the nation, Prime Minister Narendra Modi declared that Rs 500 and Rs 1,000 notes, which together accounted for 86% of currency in circulation, would no longer be legal tender," wrote Alexander and Padmanabhan. Modi said that by eliminating cash he will eliminate corruption and counterfeit currency, which will reduce terrorism. "The magnitude of cash in circulation is directly linked to the level of corruption," said Modi in his speech. "Three years on, none of these goals have been met. While terrorist attacks by Maoists and in north eastern states have been declining since 2009, terrorist deaths have increased in Kashmir. Data released by the Ministry of Home Affairs shows a 93% increase "in the number of security personnel killed in terrorist incidents in Jammu and Kashmir and a 176% "rise in the number of terrorist incidents in the state". A landmine, planted by Maoists, killed 15 policemen in Gadchiroli in Maharashtra one week back. As for reducing cash usage, "currency in circulation has surpassed pre-demonetization levels and the cash-to GDP ratio "is inching back towards pre-demonetization levels of 12%". Despite cashless transactions increasing from $60 billion in 2010 to $167 billion in 2017, the ratio of cash-to-economic output was increasing in advanced economies, wrote L Bershidsky. "The average German wallet contains 103 physical euros" and "cash is still the means of payment in 80 percent of point-of-sale transactions" in Germany. Sweden and Denmark are the only developed countries to go largely cashless. These are also countries with negative interest rates which means that people will have to pay to keep money in banks. Going cashless prevents people from hoarding notes at home and negative interest rate forces people to stop saving. Forcing people to have no savings means that the government must provide support in the form of unemployment benefits, medical care and pensions. Using digital payments exclusively allows the state to spy on its citizens habits making us vulnerable to state control. "Philadelphia just passed a bill banning stores from going cashless" because it hurts the poor. "The Boston Consulting Group estimates that banks and payment companies such as Visa and Mastercard currently make $1 trillion annually in fees -- typically paid by the retailer -- for processing electronic payments," wrote R Clark. Data collected about our spending habits can be sold by payment companies and authorities will know our location at every moment. Demonetization "shaved 2 percentage points off quarterly economic growth" and it has not recovered as shown by falling consumption growth. However, demonetization was a "political success story" because the poor were happy that the wealthy lost their black money "even though they suffered from it". The economy lost, the people lost, but politicians gained. That's the way it always is.

Time to investigate the investigators?

Democrats in the US have been calling for impeachment of President Donald Trump from before he took office. With 21 Democratic candidates lined up to take on Trump in next year's presidential election, there are strident calls to impeach him. Bernie Sanders and Kamala Harris are the front runners at the moment, but the race has just begun. The US economy grew 3.2% in the first quarter of 2019, and the economy added 263,000 jobs in April, with unemployment falling to 3.6%, the lowest level in 49 years. With the economy firing on all cylinders Democratic hopefuls calculate that if they can keep Trump busy fighting impeachment proceedings in Congress he would be too distracted to campaign effectively and public attention could be diverted from the good news about the economy. The economy may not have such a strong influence on the outcome of presidential elections, wrote M Moffatt, but it cannot hurt. The Democrats were relying on Robert Muller to provide evidence of collusion between Trump campaign and the Russian government, but Muller found no such evidence. Muller was non-committal on whether Trump tried to obstruct his investigation. Attorney General Bill Barr appeared before the Senate Judiciary Committee to defend his release of a redacted version of the Muller report but refused to appear before a similar committee in the House. Chairman of the House Judiciary Committee Jerrold Nadler has threatened to hold Barr in contempt if he does not hand over an unredacted Muller report. Democrats are furious because Barr said "he'd already assigned people at the Justice Department to assist his investigation of the origins of Trump-Russia probe" and "justifications for secret surveillance warrants against Trump team members", wrote K Strassel. "He also said he'd focus on the infamous 'dossier' concocted by opposition-research firm Fusion GPS and former British spy Christopher Steele, on which the FBI relied so heavily in its probe." Democrats must be terrified of opening this can of worms. Meanwhile, officials in Ukraine, whose government is fighting Russian speaking citizens in the east of the country, tried to help Hillary Clinton campaign by releasing information on Paul Manafort's business activities. Trump is threatening to declassify documents used to obtain surveillance warrants on his campaign. No wonder Obama took Trump's election victory as a personal insult. A friend of former Director of the FBI James Comey leaked secret information from memos written by him. Comey is a thoroughly unreliable character whose interference cost Hillary Clinton the election and who kept notes on Trump. If the 2016 election was interesting next year's one is going to be absolutely fascinating. Better than an action movie.

Private investment when demand is falling?

The next government which comes into power on 23 May, when election results are announced, must ask "what are the binding constraints to strong sustainable and job creating growth in India", wrote SZ Chinoy. There are two constraints. "First, India's growth is not being led by private investment, which limits both its strength and sustainability. Second, growth is not creating commensurate jobs, because the 'effective' cost of labour -- relative to capital -- is too high." Unfortunately, Chinoy seems to have forgotten that India is a socialist country and socialism was added to the Preamble to the Constitution in 1976 by the then prime minister Indira Gandhi. "CK Prahalad promulgated the concept of 'the fortune at the bottom of the pyramid'. He used an example of the shampoo sachet to explain it," wrote A Maira. Poor people cannot "afford to buy a whole bottle of shampoo", so a multinational company "repackaged its shampoo in very small sachets" which the poor could afford. The poor paid for the increase in wealth of the investors. Maira suggests that every business should be a cooperative, owned by its employees. You cannot start any business without capital and no foreign business will invest here unless it expects to make profits. Although patent protection is weak in India, using poverty as an excuse, no company is going to give up its intellectual property without adequate compensation. There is a superabundance of capital in the world which needs to be taxed to "prevent excess substitution of labour with capital", wrote R Jagannathan. India already has a Minimum Alternative Tax so even loss making companies are forced to pay some tax, and some sectors are taxed on gross revenue and not on profits. Corporate tax rate in Ireland is only 12.5%, and the US brought its corporate tax rate down to an effective rate of 25.7% from 35%. Number of private projects under implementation is declining, wrote Prof I Patnaik. Consumer demand is weakening in India which is leading to lower private investment, wrote A Nag. Consumer demand is unlikely to pick up unless there is strong jobs growth which is dependent on increased investment. Household savings has declined to 17.2% of GDP and automobile sales are down. "India's effective cost of labour remains inordinately high because of strangulating labour laws" so these have to be reformed. However, labour reform slowed down during this government which could be due to Rahul Gandi's "suit boot ki sarkar" jibe. We know what ails the nation but socialists want to distribute wealth before creating it. The new government will be the same.   

Cute animals in the spying game.

A white beluga whale has been found wearing a harness off the coast of Norway. The harness is marked 'Equipment of St Petersburg' and was designed to hold a GoPro camera. The whale is "charming locals by dancing in the water, playing with balls, and letting schoolchildren tap its nose". Apparently it has been trained by the Russian Navy at Murmansk, probably to spy on vessels. Last month a Griffon vulture Nelson was arrested in Yemen for suspected espionage. It came down in the city of Taez, possibly out of hunger. Nelson is 2 years old and came from Bulgaria where "his wing was tagged and equipped with a satellite transmitter by the Fund for Wild Fauna and Flora (FWFF). The bird is believed to have "migrated from Bulgaria, to Turkey, to Jordan, Saudi Arabia and then Yemen" where his GPS tracker was mistaken as spying equipment. Fortunately he has been handed back to FWFF and is recovering. But, Russians are not the only ones. Americans have tried using cats and bats for spying and have even thought of using insects with tiny transmitters. In 2007, Iranians arrested 14 "spy squirrels" loitering near a nuclear enrichment plant and in 2013, Egyptians arrested a stork. Instead of suspecting little squirrels Iranians should have been awake to Mossad agents watching how they were collecting and storing records of nuclear weapons program, since February 2016. On 31 January 2018, the Israelis broke into "a warehouse in a drab commercial district of Tehran", "cut through 32 Iranian-made safes" with "torches that burned at least 3,600 degrees, hot enough, as they knew from the intelligence collected during the planning of the operation" and escaped with "50,000 pages and 163 compact discs of memos, videos and plans". If a cute beluga whale escaped, Russia can always use a red-haired beauty, named Mariia Butina. "Mariia Butina wasn't hiding. The red-headed, gun-toting young woman whom the FBI has accused of being a Russian spy posed with high-level Republican politicians, including former Sen. Rick Santorum and Wisconsin Gov. Rick Scott Walker and other influential conservative players, like NRA chief Wayne LaPierre," wrote A Finley. Being an open society the US is susceptible to foreign dark money, wrote former Vice President Joseph Biden and Michael Carpenter. "We don't know how much illicit money enters the United States" "but in 2015, the Treasury department estimated that $300 billion is laundered through the US every year". Of course, the US has been interfering in other nations for decades, including regime change in Iraq and Libya through illegal invasion. The world of intelligence is messy and is becoming more complex, wrote S Joshi. At least animals are cute and entirely innocent. Humans are the problem.

What the young people want.

A survey among young voters in India showed that, "a significant section of both BJP-leaning and non- BJP-leaning youth felt that unemployment, women's safety, and corruption were among the biggest area of concern currently", wrote Kwatra and Bhattacharya. The survey also showed that, "Roughly half of India's urban millennials support the ruling Bharatiya Janata Party (BJP), while only a sixth favor the principal opposition party, Congress." Support for the BJP was 62% among Hindus and only 21% among non-Hindus. Family, friends, work and religion are equally important to both BJP and non-BJP supporters. BJP-leaning youth are slightly more conservative when it comes to gender roles and much more conservative when it comes to eating meat, especially beef. Paradoxically, they are slightly more liberal when it comes to inter-caste or inter-religious marriage. Only Hindus have reservations about eating beef, other religions don't. So it is curious that BJP-leaning youth are against eating beef but not against marrying into other religions. While older people are against the government running businesses, "An overwhelming majority of millennials and post-millennials cutting across political divide want governments to run businesses in strategic sectors such as defence and to create more jobs in the public sector." That is because there is high unemployment and, even more worrying, the labor force participation rate, which is the proportion of people working or actively looking for work, is only around 50%. Government jobs offer security which is why 24 million applied for 120,000 vacancies in Indian Railways. Also, salaries are much higher for government workers than in the private sector. A World Bank survey showed that from 1995-2000, the average annual salary of a government employee in the UK was 1.4 times the average British citizen's income. For Indonesia it was 1.0 times, for Singapore it was 2.9 times, while for India it was a whopping 4.8 times the average annual income of the Indian citizen. That is why those with PhD degrees applied for posts of peons in UP and for post of mortuary attendants, considered unclean by Hindus, at a government medical college in Kolkata. Not surprising that young people want the government to control businesses and to increase jobs in the public sector. "To be able to work 996 is a huge bliss," said Jack Ma, China's richest man. Meaning from 9 am to 9 pm, six days a week. "An average employee in Mumbai works 3,315 hours a year -- which is more than any other place on earth, a study by Swiss investment bank UBS has found." Government control of business allows politicians to misuse public funds for political gain. It is like the story of the Monkey's Paw. 

Are flights important if only 5.5% of Indians hold a passport?

India can never be the next China, and shouldn't even try, wrote R Sharma.  China created Special Economic Zones and, "The authorities also closed thousands of rusting state factories, which threw tens of millions out of work. With no social safety net, many were forced to find new livelihoods in the burgeoning private sector, which was responsible for the subsequent decades of double-digit growth." India has a multitude of social schemes and every new government adds some more. Since the list was published, 8 states have implemented farm loan waiver at a cost of Rs 1.9 trillion, the central government is to spend Rs 75,000 on handing out Rs 6,000 to an estimated 120 million farmers with landholding of less than 2 hectares each, and Ayushman Bharat will cover medical costs up to Rs 500,000 for 100 million poor families. "India has tinkered with free-market reforms, but only under pressure from economic crises, not as a steady long term strategy like China." Prime Minister Narendra Modi has also "continued on a path of gradual change". With an economy more than 5 times the size of India, China is far ahead defensively and diplomatically, wrote I Marlow. India barely has more diplomats than Singapore. V Kaul compared 5 years of Modi government with the previous 5 years of Manmohan Singh government. In 11 out of 15 economic indicators, including vehicle sales, cement production, consumption of steel and household financial savings, Singh did better than Modi. Singh's first term was even better. Modi should learn from his mistakes in his first term which he can rectify in his second, wrote R Jagannathan. He should have specified what he was looking to achieve so as not build expectations too high, he should have tackled bad loans at banks right at the beginning and he was obsessed with black money which is why he resorted to demonetization, which slowed economic growth. He should have set up an economic advisory council which would have packaged his activities in political terms. He didn't because he thought that social schemes would suffice. "There was practically no month or quarter in the first half of Modi's tenure when a new scheme was not launched." Despite his vociferous 'campaign' against corruption Modi has not appointed a Lok Pal, has crippled the Right to Information Act by not appointing officials, protected corrupt civil servants from investigation and increased dirty money in elections by allowing donations through anonymous bonds, wrote Bhardwaj and Johri. Modi gambled on demonetization and Balakot strike within Pakistan which paid off in electoral gain, wrote TK Arun. In revenge, Pakistan closed its airspace to civilian flights to and from India. As a result United Airlines has suspended flights to Delhi and Air India has lost Rs 3 billion having to fly south and then over Gujarat and Arabian Sea. What it will do to business only God knows. Only 5.5% of Indians possess a passport. Which leaves 94.5% for social schemes. Logical.

Everyone an Einstein? Is it possible?

"All political parties have unquestioningly and unthinkingly -- indeed almost reflexively -- adopted communist precepts and principles; whether it's the centrist Congress or the supposedly right wing Bharatiya Janata Party, the most important doctrines of communists and socialists have been accepted. We are all Leftists now," wrote RS Kapoor. Writing about Marxism, Prof D Gupta agreed that "over three fifths of his recommendations in The Communist Manifesto are already in place in most actually existing democracies. Progressive income tax, national central banks, state run communication services, cultivating waste lands, right to work, eradicating town and country differences, providing free education and, finally, banning child labour comprise the bulk of "communist policies" advocated in the Manifesto." "A liberal believes that capitalism can be humanized," wrote H Razer. "A socialist is skeptical about this. A communist doesn't believe it at all." Indian politicians believe that "prosperity is a zero sum game: if somebody gets wealthy, it must be at the expense of others", resulting in perpetual class war, thinks Kapoor. "They know that ressentiment (suppressed envy and hatred) is an emotion far stronger than hope." Hence, "A communist seeks the abolition of property, whether held by the state, private firms and citizens; they want all of us to own everything equally and become our own dictators." Trouble is, there can be only one dictator. Public anger at the enormous difference in wealth maybe dismissed as "mere envy or jealousy", wrote N Smith. "But resentment of the super-rich is not simply envy. It likely has to do with notions of fairness." India is a socialist country and the word 'socialist' was added to the preamble of the Constitution by Indira Gandhi in 1976. Socialism means state control of all means of production. By that definition India is not fully socialist as there is a thriving private sector. But the government still retains control over banks, railways, oil, insurance and minerals, leading to, "Corruption, cronyism, nepotism, investment and divestment based on patronage and not profit. These are what have kept India down," wrote M Kilcoyne. "If you're of Indian descent in the UK you are far more likely to succeed in exams, far more likely to go to university, and far more highly paid, than the rest of the population." The Congress proposes to distribute Rs 6,000 per month to 50 million of the poorest families if elected to power, called NYAY. 'Nyay' means justice. Analysing the scheme Prof VA Nageswaran is of the opinion that "the Congress party is delivering a curse to millions of Indian families" through NYAY. Not so, wrote V Kaul. Giving reasons why it will do good, he feels that "basic income scheme is an idea whose time has come". Trouble is some people are hugely intelligent, like Einstein was. Since it is not possible to make everyone an Einstein should Einstein be made stupid by surgery? It can be done, but should we?

A US slipstream could pull us along.

Research by Prof B Eichengreen has shown that a country's economic growth tends to stagnate when "average incomes are either around $11,000 or $15,000 a year. This is the famous middle income trap," wrote N Rajadhyaksha. "The International Monetary Fund (IMF) estimates that average incomes in China will be $10,098 this year." The initial rapid growth in a poor country is due to rising inputs but the next phase must be based on increasing productivity. China has tried to deal with the problem through financial stimulus which has resulted in fiscal deficit close to 10% of GDP. "Some China bears are convinced that a Minsky Moment is just round the corner." "The China slowdown is an opportunity for India to close the gap." China will be a $14 trillion economy this year and India will be close to $3 trillion, so if we grow 1% faster it could take forever to overtake China unless we undertake economic reforms which push our growth rates up to double digits. But, the Chinese do not play fair. The US is locked in trade negotiations with China over its sly restrictions on US companies, its preference for Chinese companies for state contracts and its blatant theft of intellectual properties. China is expert at making promises and then breaking them as it sees fit. The US is demanding strict enforcement of any deal and the right to retaliate if China tries tricks. China is calculating that President Donald Trump will soften is stance as his re-election in November 2020 comes closer, but if Trump wins next year he could come back harder because he will not stand again. " A high court in Tamil Nadu has lifted a ban on a Chinese app TikTok provided it removes pornography form its contents. "Remember that Indian content creators have always been locked out of the Chinese internet," wrote N Pai. "India can ban TikTok without losing much." There are alternatives but, "On the other hand, ByteDance, on its own admission, loses $500,000 every day it is not available in India. New Delhi must not fritter away the leverage." Do we have the guts? As is usual, China has treated our government with contempt by showing a reduced trade deficit with the mainland, while turning a trade surplus of $3.9 billion with Hong Kong in 2017 to a deficit of $2.7 billion in 2018. "We are amazed at the rise of China but we don't appreciate the role meritocracy has played in in this great miracle," wrote G Das. Meritocracy is a dirty word in India. "China has decent colleges in almost all provinces," wrote SA Aiyer. "By contrast the higher education debate in India is dominated by the provision of quotas for sundry castes." We hope the US wins. That may open doors for us. 

Really enjoy the elections. Lose over 200.

The fourth phase of the general election in India will be held today. 128 million people will be voting to select their representatives out of 961 candidates contesting 72 seats of the Lok Sabha. That is almost the combined population of Germany (83 million) and Spain (47 million). "It's clear from the North to the South, money power influences Indian democracy the most," wrote S Shekhar. A party worker campaigning in a village near Varanasi, Prime Minister Modi's constituency, was told by a woman that he would have to pay if he wanted her vote. Since only the rich can pay for votes, 449 members out of 543 in the present Lok Sabha are "millionaires or billionaires". "It's not surprising that until now cash, alcohol and drugs worth about Rs 3,000 crore (Rs 30 billion) have been recovered in various raids after the Lok Sabha elections were announced." Since money is the main requirement for victory, spending in these elections "could top $7 billion, making it one of the priciest elections globally", said the Centre for Media Studies in New Delhi. Modi started a scheme for electoral bonds where the donor remains anonymous, apparently to root out black money. Needless to say 92% of funding for Modi's party the BJP is from corporate donations. "The lack of transparency allows conflicts of interest and quid pro quos to flourish," said Milan Vaishnav, who researches the political economy of India. With so many candidates standing the vast majority lose so badly that they forfeit their deposits, wrote B Pradhan. A candidate contesting for a Lok Sabha seat has to deposit Rs 25,000 as security, which is forfeit if he gets less than 1/6th of the total votes cast. "Over 64,000 (76.88%) candidates who contested the Lok Sabha elections from 1951 have lost their security deposit for failing to secure at least one-sixth of the votes polled in the constituencies where they fought the polls," wrote S Joy. The highest was in 1996 when 90.94% lost their deposits. In 2014 the government collected Rs 145.7 million from forfeited security deposits. A large number of candidates stand knowing they are going to lose. These 'small candidates' cause enormous anxiety to the main parties because even a few hundred votes may make a difference in the first-past-the-post system we have. Major parties may put up dummy candidates with the same caste or similar sounding name as opponents. Some small candidates hope to be paid to drop out. However, many contest to enjoy democracy. There are those who lose repeatedly and are known as 'Dhartipakad', which means 'one who clings to the earth', wrote A Ghosh. Kaka Joginder Singh from Bareilly lost 300 times over 30 years and distributed sweets after a defeat. 94 year old Nagarmal Bajoria has lost over 200 elections, including against previous prime ministers Indira Gandhi and Atal Bihari Vajpayee. Perhaps, these are the true nationalists.

They pronounce judgements from on high.

"A former employee of the Supreme Court has made allegations of sexual harassment against Chief Justice of India (CJI) Ranjan Gogoi in an affidavit that she has sent to all the judges in the court," wrote AA Mahaprashasta. The alleged sexual harassment happened on October 10 and 11, 2018. "The woman has since been dismissed from service and seen her whole life fall apart. First, her husband and one of her brothers-in-law -- both employed with the Delhi Police -- were suspended on allegedly frivolous grounds. "Next another brother-in-law who was appointed junior court attendant" "was also dismissed from service without reason." "Finally, she was arrested in a case of bribery in March 2019" but the bribe giver has indicated that "he was not keen to pursue the matter". She says that her legs were chained all night after arrest. A panel consisting of three sitting judges, SA Bobde, NV Ramana and Indira Banerjee, of the Supreme Court was set up. Justice Ramana has been replaced by Justice Indu Malhotra after "trashing" the woman's claims. Suddenly, a lawyer Utsav Bains filed an affidavit that he was approached by a "fixer" who wanted to discredit the Chief Justice. A parallel inquiry, chaired by former justice of the Supreme Court AK Patnaik, "will look into the allegations that disgruntled employees were part of a conspiracy to frame the chief justice in the sexual harassment case". So, the case has already been decided against the complainant and the inquiry is merely to find proof. The response of the CJI to the allegations "showed not just lack of sensitivity, but also of propriety. In his defence, he appeared to cast doubt on her integrity and tried to contrast it with his own, which he sought to establish via the irrelevant example of a modest bank balance". "He went as far as to contend that the complaint was an attack on the judiciary." Despite creation of the inquiry committee, "doubts persist over the committee's legality, over whether it can at all scrutinise allegations made against the CJI, and over whether its composition lacks a moral base in that no external members have been included", wrote S Parthasarathy. "In the legal profession, sexual harassment is rampant. It is extremely difficult for women to come forward," said M Sood. "The question is, should such a thing happen, is there impunity? The answer is, yes," said K Nundy. Both are advocates of the Supreme Court. "That lawyers are generally dishonest is a well-known fact. Lawyers are (frequently) humorously called liars, and because they are the middle-men between judges and litigating public, they act like dishonest brokers," wrote former justice of the Supreme Court Ruma Pal. Relating the case of police falsely implicating a rickshaw-puller in the  rape and murder of a little girl, S Shekhar asked "when will the judicial process become sensitive in a country where 106 incidents of rape take place every day? If the Supreme Court is breaking the law, the answer is 'never'.

How to know when to act?

Last Sunday suicide bombers attacked 3 Christian churches across Sri Lanka and 3 luxury hotels in the capital Colombo. At first 359 people were feared to have died in the blasts but that figure has been revised down to 253. This is perhaps the only 'good mistake' to come out of a tragedy that should and could have been avoided, wherein both the president and the prime minister were not informed about at least 3 warnings from India. Seven suspects are still on the run although 3 of them could be among 15 people, including 6 children, killed in a shootout yesterday. Sri Lankan police are not as incompetent as has been made out in the media. In January, they discovered 100 kg of high powered explosives buried in a coconut farm and arrested 4 people. There are those who argue that poverty is the root cause of terrorism, but here a wealthy family was behind the attacks. 33 year-old Inshaf Ibrahim, who blew himself up in Shangri-La hotel, owned a copper factory. The father Mohamed Ibrahim is a wealthy spice trader. The pregnant wife of one of the brothers detonated a suicide vest, killing her 2 children and 3 policemen. Sri Lanka has a long history of violence. A civil war between Hindu Tamils and the majority Buddhist Sinhalese lasted from 1983 to 2009, when the army vanquished the Tamils by slaughtering over 40,000 civilians and shooting Tamil leader Prabhakaran's wife, daughter and son in cold blood. The 12-year old boy was given some chocolate and then shot at close range. Suicide bombing was invented by the Tamils and used to assassinate Indian Prime Minister Rajiv Gandhi. Would the army take a similar approach to Muslims remains to be seen. After the Mumbai attacks in 2008, the Multi-Agency Center (MAC) within the Intelligence Bureau was revamped but it missed the suicide bombing at Pulwama in Kashmir in February, which killed 40 soldiers. "On a typical day, the MAC generates 10-15 alerts but when a big event takes place or in a packed election season, the number of alerts can go up to 100,000 per year." Clearly, it would take enormous manpower at great expense to follow up each piece of information, which is impossible, but they do a tremendous job by preventing a a lot of "lone-wolf or ISIS scale attacks within the country". India had warnings of the Mumbai attacks, "But the Indian Navy did not find the intelligence actionable enough and the Mumbai police believed, after the attacks started, that it was witnessing gang warfare, not a terror attack," wrote S Gupta. According to a book published recently, Jesus was a scholar who lived among the Nagas in the east of India and was abducted by a UFO, according to one Chan Thomas. The CIA censored the book for 50 years. Did they classify this as top-secret intelligence?

Pushmepullyou economics. Does it work?

Why is India a poor country? asked M Sabharwal. "India still has poverty because the brilliant politics after 1947 was coupled with nutty economics that sabotaged competition, entrepreneurship and productivity." "Too many Indians work in low productivity geographies (Karnataka has the same GDP as UP with a third of the people), low productivity sectors (50% of our labor force in agriculture only produces 14% of GDP, while IT employs 0.7% of our labor force and produces 8% of GDP)", low-productivity firms and low-productivity skills. Too much regulation with "60,000+ compliance rules, 3,600+ filings, and 5,000+ changes every year" are suffocating the economy. The Congress President Rahul Gandhi announced an income supplement of Rs 6,000 per month to 50 million of the poorest households in India, called NYAY, without increasing taxes or fiscal deficit. In conditional cash transfers (CCT), such Bolsa Familia in Brazil and Prospera in Mexico, payments are linked to children attending school and getting regular health check ups, whereas NYAY is guaranteed, wrote V Thomas. To pay for additional subsidies the economy has to grow at a high rate but, "What's more concerning is the way the RBI is opening the floodgates to liquidity," wrote A Mukherjee. The Reserve Bank (RBI) "has snapped up $10 billion in two auctions in over a month, buying the US currency for reserves and agreeing to reverse the trade in 2022". The RBI buys and sells dollars regularly to stabilise the rupee, which is why our foreign exchange reserves increased to over $400 billion in recent days. Foreign funds invested over Rs 270 billion in our stock market last month. This would tend to make the rupee stronger which would hurt our exports by making them more expensive. So, if the RBI buys and sells dollars anyway why give a commitment to reverse the trade in 2022? How much difference will $10 billion make in a $2.5 trillion economy? Expectations are rising among the young who want jobs "With job security, good pay, benefits", wrote Prof A Banerjee. With enormous disruption expected from Artificial Intelligence a "minimum income guarantee" is essential, to prevent social discord. Superabundant capital has resulted in a new form of business which concentrate on collecting millions of consumers without bothering about profits. They pay little in taxes. The IMF suggested that they should pay a minimum amount of tax to the host country while SA Aiyer suggested a 2-3% on revenues, rather than on profits. India is doing both already. We have a minimum alternative tax on companies that make no profits and taxes on revenue on infrastructure firms, wrote R Jagannathan. Perhaps, that is the problem. Distributing subsidies and increasing liquidity are attempts to increase consumption while putting a lid on creating wealth by imposing too many regulations and taxes. Pushmepullyou economics. Will it work?

What happens if the bubble refuses to pop?

"This stock market boom is nearly 10 years old," wrote Prof VA Nageswaran. And yet, "In general, 84% of companies going for an initial public offering (IPO) lack profits. Ten years ago that figure was 33%. The current profitless share offerings match the situation in ... the year 2000." That was the year when the dot.com bubble peaked and the following year it crashed, wiping $5 trillion of investor wealth. Fearing a market correction later in the year IPOs are being brought forward this year. "Ride-hailing apps Uber and Lyft, respectively valued by investment banks at US $120 billion and $15 billion, are to be placed in early 2019 to beat the collapse," Wrote Prof J Colley. "Both are loss makers -- with Uber's losses approaching US $4 billion in 2018 after a US $4.5 billion loss in 2017." If we take technology unicorns, which are start-up companies with valuations of over $1 billion, "11 out of 12 unicorns lack profits". Such is the complacency in the market that, "Mistaking Zoom Technologies, a penny stock, for Zoom the videoconferencing company, investors pushed up the former's share price by nearly 54,000% from $0.005 to $2.70". "Markets tend to undergo manic-depressive cycles" which result in "bull markets, frothiness and and sometimes outright bubbles; eventually however, they overreact to some negative shock by becoming too pessimistic, shedding risk, and forcing a correction or bear market," wrote Prof N Roubini. "Moreover, central banks, particularly the Fed, have become super-dovish again, and this appears to have reversed the tightening of financial conditions that produced the risk-off in late 2018." "The latest Bank of America Merrill Lynch (BofA ML) survey showed 86% of money managers do not believe that the inversion of the US Treasury yield curve signals an impending recession," wrote Kamat and Jethmalani. Inversion of yield curve occurs when yields on short term bonds are higher than on long term ones, signalling a risk of recession in the short term. However, there are many risks, including, "A potential slowdown in China, trade wars, destabilization in the euro area, central bank liquidity traps and an unexpected rise in inflation were pointed out as the top five risks by asset managers in an Institute of International Finance (IIF) survey." President Donald Trump has been asking US Federal Reserve to reduce its Funds Rate to prevent share prices from dropping. Lose monetary policy "has contributed to social unrest, rising income and wealth inequality and to the rise of authoritarian nationalism in countries around the world by creating real wealth effects but phantom economic recoveries," wrote Nageswaran. The Indian government has appointed a retired civil servant as governor of the Reserve Bank to reduce rates. Industrialists borrowed huge sums at low interest rates which they had no intention of repaying, wrote A Mukherjee. Naturally, crony capitalists contribute generously to crony political parties at election time. Is it really a bubble? Or are the professors wrong? 

It is not as simple as in 2014.

"Thackeray was deep in love with Modi and the "Gujarat model" through 2013-14. However, the unalloyed bhakt has turned a ferocious antagonist, a hard hitting challenger," wrote S Koppikar. He admits that "he fell for Modi's public relations exercise" but "has since woken up to the dangers of the Modi model", thus telling people not to repeat the mistake of 2014, when Modi won on a landslide. Raj Thackeray is the nephew of the founder of Shiv Sena, Bal Thackeray, and founded his own party, the Maharashtra Navnirman Sena (MNS), after his cousin Udhav Thackeray, son of Bal, became chief of Shiv Sena. Raj Thackeray's speech is "peppered with video evidence, data, and clever use of Marathi idioms". "Thackeray's pattern is to call out Modi and BJP president Amit Shah for their 'fakery, lies, publicity blitzkrieg, and dictatorial tendencies'". Vinod Tawde of the BJP complained to the Election Commission but it can do nothing because Raj, or his party, is not contesting this election and he does not mention support for any candidate. "Perhaps no other sitting prime minister has scored so low on the popularity charts in Tamil Nadu," wrote AR Venkatachalapathy. "In the hugely popular pro-Jallikattu protests in January 2017, anti-Modi slogans were legion though he had little if anything to do with bullfighting." "Every slight to Tamil pride, every perceived threat to Tamil identity gets associated with Modi." At least a dozen Tamil films with anti-BJP messages have been released. While incumbents regularly get booted out in other states how do political parties hang on to power for decades in Bengal? "Short answer: a giant, octopus-squid whose tentacles reach each household in every village and mohalla," wrote A Barman. This is because of total control of public distribution by the state government. The previous Communist government "monopolised the distribution of fodder, fertiliser, whatever the village could need, through the party". The TMC of Mamata Banerjee has taken over the corrupt system. "What is happening in West Bengal is a systematic debasement and criminalisation of public life," wrote S Dasgupta. "Today, a mood of resignation is also accompanied by a growing sense of shame." If there is a hung parliament, Modi may have to contend with his minister for road transport, highways, shipping, water resources, river development, and Ganga rejuvenation, Nitin Gadkari. Gadkari has no national recognition and though, like Modi, he is a member of the RSS, the organisation is backing Modi. However, if Modi is unable to get a majority, other parties maybe more amenable to a BJP government with Gadkari as prime minister, rather than Modi. In 2014, Modi got 216 seats from 11 states but he may get only 50% from the Hindi belt this time, wrote MK Venu. The election may not end on 23 May with announcement of the results. 

Rs 5 per day, 3 bars of soap and one pair of slippers every year.

As India is in the midst of a general election, with hundreds of experts speculating on which politicians will form the next government and enjoy the riches that come with it, thousands of our fellow citizens are facing starvation in refugee camps in Tripura. These are people of a tribe called the Bru who fled from the adjoining state of Mizoram in 1995 when young Mizos attacked them. "Take immediate steps for distribution of ration, otherwise all the displaced Brus will have to launch a democratic agitation, including a blockade of road and looting of Government relief Godown under the banner of MBDPF," they wrote in a letter. MBDPF stands for 'Mizoram Bru Displaced Peoples Forum'. At present, government assistance to the Bru consists of "Rs 5 per day and 600 grams of rice to each adult migrant, Rs 2.50 to each minor, three soaps in a year, one pair of slippers every year and a mosquito net in every three years". This is nowhere near the average of Rs 181 per day for 100 days a year under the MGNREGA scheme, or the Rs 6,000 being distributed to all farmers every year by this government, or the Rs 72,000 promise by Mr Rahul Gandhi to 50 million poor families, should the Congress win the election. There is no shortage of food in India as an increase in production and fall in exports has led to low food prices. "Compared with population growth of 14% over the last 10 years, production of pulses, vegetables, fruit, milk, eggs and meat has grown between 40% and 84%," wrote M Nandurkar. Lower food prices are not because of a glut in production but because of low demand, wrote R Kishore. "The latest available data (for 2013) shows that among 177 countries in the FAO's list, India is ranked 137th in food supply per capita, 145th in protein supply per capita and 146th in fat supply per capita." Food prices have dropped globally, so that even in the US, "where farming is extremely mechanised and practiced on very large farms, prices cannot cover the cost of production for important crops such as wheat and cotton". Demand for fast moving consumer goods (FMCG), which are articles of daily use is falling in rural areas. Demand for private and commercial vehicles is weak and companies have reduced production to manage inventories. Our steel exports have fallen while imports have increased and household savings fell to 17.2% of GDP in 2017-18. The World Bank has advised India to grow the share of exports in the economy and not depend on domestic demand. Tribal people are ignored by every government, even though they are the original Indians. Perhaps, the Bru could manage with 2 bars of soap and sell one for food while they watch politicians celebrate victory with alligator smiles, thick garlands and sweet laddoos. That is what elections are all about.

It is an unfunny comedy.

As expected, comedian Volodymyr Zelensky won the presidential election in Ukraine yesterday, but what is shocking is that he received nearly 75% of votes cast, humiliating former President, Petro Poroshenko. Zelensky won despite having no policies, except promising to clean up corruption and control the oligarchs. People are so fed up with established political parties that they voted for Zelensky in a deliberate insult to politicians. It is somewhat like the NOTA (none of the above) vote in India, the difference being that politicians in India have made it useless, by making NOTA an invalid vote, while in Ukraine, people were able to show their contempt for all politicians by electing a complete outsider with no experience in politics. Ukraine's economy is expected to grow at around 2.5% this year with inflation at 7-10%, so Zelensky will have to institute structural reforms. After weeks of protests, Sudan's President Omar al-Bashir was removed from power on 11 April by the military and is now being held in Kobar high-security prison. $351,000, 6 million euros and 5 billion Sudanese pounds were found in his house, stuffed in bags which once held 50 kg of grain. The military council has promised a return to civilian rule but protesters do not believe "remnants" of the old regime. While agreeing to a civilian government the army said "it will hold on to control over the interior and defence ministries", which means the police and the army. Senior officers of the army were complicit in the genocide in Darfur in which over 100,000 people are said to have died. 60 protesters have apparently been killed in the recent protests. Complete handover of power may result in charges against these generals resulting in long prison sentences, as officers in Argentina discovered when they were jailed for crimes committed 40 years back. A similar situation is playing out in Algeria where protesters are demanding a complete regime change, after forcing President Abdelaziz Bouteflika to refrain from standing for a fifth term. Algeria's oil wealth was being divided among the military, the higher bureaucracy and some business leaders and people want all of them out. People are still protesting in Tunisia, the birthplace of Arab Spring. "Thousands of Tunisians, including many young men, left the country to join ISIS in Syria, Iraq or Libya; proportionately its militants made up one of the highest percentages of ISIS fighters from the region." The Egyptian parliament has changed the constitution to enable general-turned-politician Abdul Fattah al-Sisi to stay on as president till 2030. Thousands are protesting in Morocco for release of those who had protested earlier. Perhaps, electing a comedian is best. At least he can make people laugh, while they are crying. 

Can so much division be good?

One man in Uttar Pradesh chopped off the index finger of his left hand after mistakenly voting for the BJP, which is the party of the Prime Minister Narendra Modi, when he wanted to vote for the BSP, which was formed as a party for lower caste Hindus and is led by Ms Mayawati. Ms Mayawati has chosen not to contest these elections but will campaign for an alliance she has formed with SP and RLD. India stopped using paper ballots since electronic voting machines (EVMs) were first used in assembly elections in 1998. Each political party has been allotted a symbol by the Election Commission of India because large numbers of people are illiterate. So, there is the name of the candidate, the name of the party and the symbol of the party next to each button and the voter is required to press the button of his choice to register his vote. Although BJP and BSP may sound similar the symbol for the BJP is a lotus flower and that for the BSP is an elephant so even a totally illiterate person should have no trouble distinguishing the two. The alarming thing is that he chopped his finger in disgust, showing how divided our society is. Anger is not limited to supporters of the BSP. BJP candidate Pragya Thakur created a storm when she said that Hemant Karkare was killed because she had cursed him. Thakur was charged with terrorism after a bomb hidden in a scooter went off in Malegaon in Maharashtra in 2008. Thakur later apologized for her statement but claimed that she had been falsely charged and tortured while in police custody. Karkare was killed in action during the Mumbai terror attack in 2008 and is a hero. Thakur is standing as BJP candidate against Congress leader Digvijay Singh who initially blamed Hindu groups for the killing of Karkare. The other accused, Lt Col PS Purohit was swiftly reinstated in his post by the army, which never accepted his involvement, after being released on bail. India maybe the only nation in the world where politicians seek to gain minority votes by falsely blaming a whole community for terrorist attacks. Then there is the difference between the north of India and the south. The BJP is seen as a party of Hindi speakers and has little presence in the south, except in Karnataka. Far away from India's land borders with Pakistan, China, Myanmar and Bangladesh, the south is less concerned with defence matters and has other concerns. People of south India resent being stereotyped as Madrasis by people of the north. Southern states feel that they a smaller share of total tax collections from the center while states like Bihar and UP get more. While patriotic films were very popular in the north, films in Tamil Nadu were anti-establishment and anti-Modi. A country so divided is very difficult to govern. On the other hand, it can never become a dictatorship. A blessing?