Forced hikikomori.

"Japan faces a daunting demographic challenge," as "In a nation of 123.9 million, a mere 727,277 births were recorded last year," with a fertility rate "now standing at 1.20, down from 1.26." TOI. "In 2023, the country recorded 1.57 million deaths, according to the Health Ministry - more than double the number of births." And, "The number of marriages fell by 30,000 last year, while the number of divorces rose." The government has launched "initiatives such as expanding child care facilities, offering housing subsidies to parents, and in some towns, even paying couples to have children." The Tokyo Metropolitan Government has introduced an AI-based matchmaking app. CNN. "China's population fell for a second consecutive year in 2023," as "The National Bureau of Statistics said the total number of people in China dropped by 2.08 million, or 0.15%, to 1,409 billion in 2023." The birth rate was at a record low of 6.39 births per 1,000 people, while "Japan's birth rate was 6.3 per 1,000 people in 2022, while South Korea's rate was 4.9." Reuters. 'Hikikomori' is "a Japanese term for people who cut themselves off from society, sometimes for months or years - often Gen Z and Millennials in the prime of their youth. The phenomenon first emerged in Asia, and is particularly well-documented in Japan - but similar stories are surfacing in other parts of the world including the United States, Spain and France." "It's not clear how many hikikomori there are worldwide, but more than 1.5 million are estimated to live in Hong Kong, Japan and South Korea." CNN. In India, the massive rise in the number of tourists in the Himalayas is causing traffic jams. "The region's delicate ecosystem is under threat due to increased pollution and waste management challenges as heaps of plastic garbage can be seen at every nook and corner of all the hill stations. We are aware that even organic waste cannot be recycled naturally due to weather conditions." Ten million pilgrims visited the holy temple of Kedarnath on 10 May. "This surge led not only to severe logistical strain but also raised raised health and safety concerns." News18. India's "Real GDP has been estimated to grow by 8.2% in FY 2023-24 as compared to the growth rate of 7.0% in FY2022-23." pib.gov.in. "Over half of India's 1.4 billion people are aged under 30, according to government health figures." "The International Labour Organization estimates 29% of India's young university graduates were unemployed in 2022. The rate is nearly nine times higher than for those without a diploma, who typically find work in low-paid service or construction jobs." ET. "Unemployment is not a new story." "But in village unto village across Maharashtra's countryside, a supposedly prosperous state, unemployment and agrarian crisis are spurring a ravaging, if unacknowledged and far-reaching, social consequence. Educated and jobless men with family farms their only source of income are unable to find suitable brides for themselves," wrote Jaideep Hardikar. No jobs, no brides, ashamed of going to parties - the Indian version of hikikomori. The only difference is it is forced. So, no escape.

Divine purpose.

Skulduggery has started, it's always been the strategy. "As the buzz about allies seeking to secure a higher share of berths and high-profile portfolios in Modi 3.0 government persisted on Saturday (08 June), there were indications of the BJP leadership asking NDA partners to 'pare down' their demands to 'reasonable limits' while assuring that unfulfilled desires may be given due consideration at an appropriate time later." TOI. How much later? After all, "In the long run we are all dead." Keynes. "Prime Minister Narendra Modi is to be sworn in for his third consecutive term on June 8 after 21 allies gave him their written support in a meeting on Wednesday (05 June)." TNIE. Weren't they insulted that the BJP doesn't trust them? Having committed themselves, "Prominent allies on Friday (07 June) proposed the name of Bharatiya Janata Party's Narendra Modi as leader of the NDA Parliamentary Party, paving the way for him to become the Prime Minister of India for the third consecutive term." ET. Now they can make no demands and the BJP will poach their MPs by giving them useless cabinet posts until these allies are assimilated into the BJP. "A look at the trajectory of regional allies like Asom Gana Parishad (AGP), Shiv Sena, Naga People's Front (NPF), since the time they allied with the Modi-era BJP can help understand the strategy better. These regional parties once ruled their respective states - Assam, Maharashtra, Nagaland." The Wire. "As many as 251 (46%) of the 543 elected Lok Sabha members have criminal cases registered against them and 27 of them have been convicted, according to an analysis by poll rights body Association of Democratic Reforms (ADR). This is the highest number of candidates facing criminal charges to be elected to the Lower House." Charges include rape, murder, attempt to murder, kidnapping and crimes against women. 39% of the BJP's MPs and 50% of TBP's MPs have charges against them. "Birds of the same feather" (wikipedia), as it were. "When my mother was alive, I used to believe that I was born biologically. After she passed away, upon reflecting on all my experiences, I was convinced that God has sent me." "I believe God has given me abilities, inspiration and good intentions for a purpose..." "That's why, whenever I do anything, I believe God is guiding me." The Wire. BJP MP and trained surgeon, Dr Sambit Patra (wikipedia) claimed that "Lord Jagannath is bhakt (devotee) of Modi" (TOI). Delusions of divine purpose are dangerous. Any act can be attributed to God's command. On 20 March 1995, 13 people were killed and 54 seriously injured by sarin gas in Tokyo subway, released by members of Aum Shinriyo cult led by Shoko Asohara, who believed he was born to take the world's sins on himself. wikipedia. On 19 April 1993, 79 Branch Davidians, including 21 children under the age of 16, were burnt to death at Waco, Texas in the US. The cult was led by David Koresh who claimed to be chosen by God and having the gift of prophecy. wikipedia. However, Asohara and Koresh were leaders of cults with limited number of followers, not leaders of nations. God's representative with power over nuclear weapons is completely different. The world beware. 

Just show the basis points.

On 7 June 2024, the Monetary Policy Committee (MPC) of the Reserve Bank of India (RBI) "decided to keep the repo rate unchanged at 6.5%, continuing the stance of 'withdrawal of accommodation' due to ongoing food inflation concerns and global uncertainties." Interest rate has been left unchanged 7 times since February 2023. The MPC increased its prediction for the rate of growth of the real GDP from 7% to 7.2% and predicted the rate of inflation at 4.5% for 2024-25. While the RBI is confident of consumer price index (CPI) inflation at 4.5%, its own survey of households' inflation expectations shows current inflation felt by households fell by 10 basis points ((bps) to 8%. Inflation expectations for 3 months increased by 20 bps and at one year by 10 bps. ET. Why do the media reveal that inflation expectations increased by negligible amounts while hiding the absolute figures? "Two MPC members Ashima Goyal and Jayanth Varma voted to reduce the policy repo rate by 25 basis points and they also wanted to change the stance to neutral." ET. High inflation helps the government by increasing tax collections and reducing the value of its debt. Economics Help. "The Gross Goods and Services Tax (GST) collections hit a record high in April 2024 at Rs 2.10 lakh crore (Rs 2.10 trillion)," pib.gov.in. GST collections in May came in at slightly lower at Rs 1.73 trillion. pib.gov.in. Since GST is a percentage of the prices of goods and services, the higher the prices the higher the collections. "Moody's rating agency has highlighted that India's fiscal consolidation pace post-Covid has underperformed compared to its peers, including in the Asia-Pacific region." "India's goal is to reduce its fiscal deficit to 4.50% of GDP by the end of FY26, from the 5.1% projected for the current year ending March 2025." ET. The RBI has further helped by transferring Rs 2,10,874 crore (Rs 2.11 trillion) of its surplus to the government. This is apparently because high interest rates in the US have increased its earnings from interest on US government Treasuries. ET. In May, US Federal Reserve Chair Jerome Powell said, "I expect that inflation will move back down," and so, "I don't think it is likely based on the data we have that the next move that we make will be a rate hike. It's more likely...we hold the policy rate where it is." Reuters. The next meeting of the Fed is on 11-12 June when they will also give a Summary of Economic Projections. FOMC. In January the Federal Reserve Bank of Dallas reported that "high inflation is disproportionately hurting low-income households, including Black and Hispanic households and renters." "People experience different inflation rates and different level of inflation stress based on household composition and income, housing tenure and other factors." dallasfed.org. Housing rents have risen by up to 50% in parts of India in the last one year, causing financial distress. India Today. The US Fed cares about the poor, the RBI serves the government. Expectations are revealing. Just show the basis points. 

They could be swallowed.

Following my blog "Ayodhya Falls" on Wednesday, 5 June, " As the yawning gap between exit poll predictions and the actual election results led to huge losses in the stock market on Tuesday, Trinamool Congress Rajya Sabha MP Saket Gokhale has asked Sebi to investigate whether BJP and poll agencies made crores by manipulating the stock markets via pollsters." "In his letter to Sebi chairperson Madhabi Puri Buch, he has also asked the regulator to investigate if there are entities that booked profits through selling on 3rd June and made even more profits on 4th June by short selling." ET. The elections took place in seven phases. from Friday, 19 April to Saturday, 1 June 2024. ECI. In the first phase, voting started at 7 AM and ended at 6 PM except in certain areas for security reasons. Mint. In the seventh phase on Saturday, 1 June voting hours were also between 7 AM and 6 PM. HT. Since the elections dragged on for 6 weeks all media channels would have had the exit poll figures tabulated and added up. All they had to do was to add the figures for the final day and release their predictions as soon as voting ended. But, exit polls were not released till much later and all predicted a sweep for the BJP-led NDA with over 350 seats. "The Republic TV-P Marq poll claimed that the ruling alliance will win up to 359 seats and the opposition INDIA bloc will bag 154 seats in the 543-member Lok Sabha." HT. As if they had been told. However, the BJP won 240 seats, well short of 272 required for absolute majority, and have to depend on support from Chandrababu Naidu's Telugu Desam Party (TDP) which won 16 seats and Nitish Kumar's Janata Dal (U) party which got 12 seats. NDTV. "Amid speculation that Naidu and Nitish Kumar might be courted by the Opposition INDIA bloc, comprising parties that garnered 232 seats, the BJP has proactively secured written assurances of support from the TDP and JD leaders." BS. Apparently, Messrs Naidu and Nitish Kumar could demand key ministerial posts in return for their support. The Week. They must be careful because they will return to their respective states while their MPs will remain in Delhi as prey for the BJP. The BJP has an unsavory record of stealing votes from their alliance partners, weakening them in their states and then discarding them as scrap. "A look at the trajectory of regional entities like the Asom Gana Parishad (AGP), Shiv Sena, Naga People's Front (NPF), since the time they allied with the Modi-era BJP can help understand the strategy better. These regional parties once ruled their respective states - Assam, Maharashtra, Nagaland." The Wire. In Surat, Gujarat, other candidates mysteriously withdrew their nomination, leaving the BJP candidate Mukesh Dalal elected unopposed. In Indore, opposition candidates "were coerced and otherwise 'persuaded' to leave the fray". NOTA (None Of The Above) came second with 2,18,674 votes. The Wire. This was a humiliating insult to the BJP. But, they do not care they won dirty. Nor will the ones who made fortunes by gaming the markets. Those who are supporting need to beware. They could be swallowed.   

Global confusion.

In Europe, "Consumer prices rose 2.6% from a year ago, up from 2.4% in April, according to Eurostat." "Britain's richest households are experiencing higher rates of inflation than poorer segments of society because of high mortgage costs and rapid price increases in restaurants and hotels." "Companies transporting goods from Asia face costs of as much as $10,000 for an urgent full-size shipping container over the next month - about double current rates." ET. Standard & Poor (S&P) "cut France's long-term sovereign debt rating...to 'AA-' from 'AA', citing expectations that higher than expected deficits would push up debt in the euro zone's second biggest economy." Analysts said that the "downgrade could push the spread between French and German benchmark bonds by 3-5 basis points (bps)." That would have a minor economic impact but could add pressure on President Emmanuel Macron to rein in the fiscal deficit. Reuters. In China, "When Ou Yangyun traveled to the Chinese city of Zhengzhou in February to demand recompense after his bank account containing tens of thousands of dollars was frozen, his family expected him to be home two days later" but "The small-business owner from Changsha never returned." Instead. the protesters were arrested, served mouldy food and deprived of sleep. Most were released after a few days but "Ou and two other defrauded depositors are still being held by Zhengzhou police." Reuters. "Lawyers across China are up in arms over what they say is 'blatant sabotage' of the legal system" "after advocates at the Tianjun county court in Haixi Mongol caught the presiding judge red-handed receiving real-time instructions on WeChat group." WION. Must have been a case between individuals or else they would be eating mouldy bread in prison. "China's leaders are 'bizarrely unwilling' to use more government spending to support consumer demand instead of production, according to Nobel Laureate in economics Paul Krugman." "The comments came amid renewed concern in the US and Europe over what is viewed as Chinese overproduction and the dumping of heavily subsidized products overseas." ET. "Philippine President Ferdinand Marcos Jr has warned China not to cross a red line in the South China Sea, where a standoff between the countries continues to escalate. BBC. China believes in 'wolf-warrior diplomacy' (wikipedia), a bare-knuckle fight  instead of polite civilized conversation. So, "China has launched an anti-dumping probe into imports of a widely used plastic from the US, EU, Taiwan and Japan." "Less than a week ago, Washington sharply increased tariffs on Chinese goods including electric vehicles (EVs), solar panels and computer chips.The new US moves also expanded on sweeping border taxes that were imposed on Chinese goods under the Trump administration." BBC. Can the US and EU control inflation while increasing tariffs on imports? Can the Chinese Communist Party fight its citizens and other nations at the same time? Do all of them know what they are doing? Fortunately, it doesn't matter to us in India. Our economy is growing 8.2% (ET) by itself. 

Ayodhya lost.

 "Narendra Modi is set to take oath as prime minister of the country for the record third term as Bharatiya Janata Party (BJP)-led National Democratic Alliance (NDA) secured a majority by winning 292 seats in the 543-member Lok Sabha," while "the Congress-led INDIA bloc emerged as a strong opposition and registered wins in 234 seats." News18. On its own, the BJP secured 240 seats, well short of the 272 seats required for an absolute majority, while the Congress got 99 seats. The NDA is an alliance of 41 parties, some of them tiny regional parties (wikipedia) which most of us have not heard of. Most of them have lost. The Indian National Development Inclusive Alliance (INDIA) is an alliance of 42 parties (wikipedia) in which the Congress got 99 seats, DMK 22 seats, Trinamool Congress (AITC) 29 seats and Samajwadi Party (SP) 37 seats. The big news is that SP won 37 seats in Uttar Pradesh (UP) beating the BJP into second place with 33 seats. Mint. In 2022, the BJP won the assembly election in UP with 255 seats to 111 seats for the SP  (wikipedia), and Yogi Adityanath, who revels in the nickname of 'Bulldozer Baba' because of his use of bulldozers to demolish homes of people accused of crime (wikipedia), was re-elected as Chief Minister. In January 2024, "Indian Prime Minister Narendra Modi has inaugurated a grand temple to Hindu God Ram in the flashpoint city of Ayodhya." "Televised live, it showed Mr Modi performing religious rituals inside the temple's sanctum along with priests and Mohan Bhagwat, head of Rashtriya Swayamsevak Sangh (RSS) - the ideological fountainhead of Hindu nationalist parties." BBC. However, it seems that Lord Ram was not best pleased at being used as an election gimmick because "BJP candidate Lallu Singh lost Faizabad Lok Sabha seat which includes Ayodhya where a grand Ram Temple was opened for the public earlier this year. Singh, a three-time MP from Faizabad, was facing SP candidate Awadesh Prasad." News18. Curiously, all exit polls predicted a huge victory for the NDA with over 350 seats. India Today. They also predicted big wins for the BJP in UP, Maharashtra, Haryana and even West Bengal. Mint. In 2014 and 2019, on the other hand exit polls differed widely among each other. FP. As a result of exit polls showing a massive win for the BJP stock markets jumped. The BSE Sensex gained 2,507 points to close at a record 76,469 points, thus generating Rs 13.8 trillion for investors. TOI. When results started coming out yesterday the Sensex collapsed by 6,000 points but recovered somewhat to close down 4,390 points or 5.7%, wiping Rs 31 trillion of wealth. BS. So far this morning, the BSE is up 1,643 points to 73,697 points. Sensex. It means that the exit polls were an enormous opportunity for some to unload their shares at very high prices and then gain by short selling yesterday. That may explain the rise in Sensex this morning as short sellers square their positions. Only the regulators can tell us. 

The bouncing GDP.

"Beating the expectations of analysts, India's gross domestic product (GDP) grew at 7.8% on an annual basis in the last quarter (Q4) of the FY24." The growth of Q3 has been revised upwards from 8.4% to 8.6%, "Therefore, the growth in the previous three quarters now stand at 8.2% in Q1, 8.1% in Q2 and 8.6% in Q3, on an annual basis." "The GDP growth for FY24 has also been revised upwards to 8.2% from the second advanced estimate of 7.6%." ET. Also, "The Centre contained its fiscal deficit at 5.6% of GDP in FY24, beating the revised estimate of 5.8% on the back of improved resource mop-up and curtailed revenue expenditure." ET. This is because the Reserve Bank (RBI) has decided to transfer Rs 2.1 trillion as profits from a 17% increase in its income and a 56% fall in its expenses. ET. "The Centre collected Rs 1.73 lakh crore (Rs 1.73 trillion) towards the goods and services tax (GST) in May, around 10% higher on an annual basis," but less than the Rs 2.1 trillion collected in April. ET. That may be because "Annual retail inflation in April was 4.83%, down from 4.85% in March." Reuters. The slight fall in CPI inflation may have been because the government cut domestic cooking gas prices by Rs 100 rupees per cylinder on 8 March, thus reducing fuel costs by a tad. BS. It is a coincidence that, as the GST collections fell from Rs 2.1 trillion in April, the RBI stepped in with a gift of Rs 2.1 trillion in May. A friend in need is a friend indeed. Dictionary. "For all the pride we can justifiably take in India having become the world's fifth largest economy (and IMF projections of becoming the fourth biggest by 2025 and third by 2027). the reality is that when it comes to per capita income we are close to the bottom of the global league tables, at No 144." " It is a sobering thought that in per capita terms, it is only by 2029 that India is forecast to overtake countries like Uzbekistan, Papua New Guinea and Angola." Mint. Finance Minister Nirmala Sitharaman said that, at 18% of GDP, India has one of the lowest external debt among G20 countries. However, the true foreign liability is the difference between assets, which include "all foreign financial assets that Indians own, including international reserves held by the central bank" and liabilities which "consist of domestic assets that foreigners own: direct and portfolio investment into India and external debt such as bonds, loans, deposits, trade credit." This difference is known as the net international investment position (NIIP) and is negative for India. "Between 2003 and 2023, this net liability went up from $60 billion to $396 billion, rising from 9.9% to 11.1% of GDP," wrote Deepa Vasudevan. According to the latest Periodic Labor Force Survey (PLFS), workforce participation has risen from 67.7% to 69.8% from January-March 2022 to January-March 2024 for men, and from 18.3% to 23.4% for women. But rural regular wages declined by 1.3% per annum in the last five years while urban wages declined by 2.7% per annum in the same period, wrote Prof Himanshu. The GDP is on a trampoline. The people are in a hole. 

Rs 34 trillion for 74%.

"In a blog on Sunday (yesterday), Prime Minister Narendra Modi asserted that India's governance model of the last decade has become an example for several countries in the world as the nation managed to lift 25 crore (250 million) people from poverty, saw adoption of innovative practices of good governance, and worked for the welfare of the poorest people without any discrimination." ET. "Analysis outside India on Indian politics tends to focus on democratic backsliding under the Modi government, but this overlooks the fact that Modi remains a democratically elected leader whose hold on power largely reflects the will of the people." Mr Modi's popularity is driven by a "welfare and development-driven agenda" in which, Mr Modi said, "his government has spent more than Rs 34 trillion ($400bn) in the past decade, delivering cash benefits to low-income households and reaching over 900 million people" (BBC), by inaugurating a new Ram Temple in the city of Ayodhya (BBC) as a proof of Hindutva, by a muscular foreign policy when Mr Modi said "No more dossiers to Pak on ultras, India kills them on their home turf" (TOI), and by Mr Modi's personal popularity rating of 74%, the highest in the world (Morning Consult). But, "There are signs of the government pursuing authoritarianism by stealth by employing key levers of power - including the judiciary, media and security services - to mount a witch-hunt against opposition politicians and civil society." Chatham House. Due to concerns over democratic backsliding, "Amid questions surrounding the Election Commission's conduct and the sanctity of the electoral process in the ongoing Lok Sabha elections, over 120 civil organisations came together on 21 May to raise concerns about potential 'manipulation' of votes on counting day." The Wire. Not just government agencies, but the Home Office itself has been questioned by Ladakhi innovator and activist Sonam Wangchuk, who said that trolls have accused him of being a CIA agent, taking money from American George Soros and "taking Chinese money and engaging in Chinese propaganda". "But what is intriguing here is how this information, which is in files from 25 years ago - and it couldn't be from us, so from the home ministry's files - has somehow reached the hands of these trolls." The Wire. "Jingoists may sometimes take pride in believing that the outside world is against them; admittedly, enemies give one a sense of outsized importance." But, "If India's institutions are deemed unreliable or politically compromised, it may deter Western investors and businesses from bringing their money into the country." DH. If foreigners are biased, why do they need an army of trolls against citizens? Delusions of grandeur cost $400 billion in handouts. After all, beggars can't be choosers. Can they?

Dubai or weddings.

"The Dubai Property Leaks have exposed a significant number of prominent Pakistanis who own high-end properties in Dubai." Among them are "President Asif Ali Zardari's children, Hussain Nawaz Sharif, Interior Minister Mohsin Naqvi's wife, Sharjeel Memon, Senator Faisal Vawda," and also "late Gen Pervez Musharraf, former prime minister Shaukat Aziz, retired generals, a police chief, an ambassador and a scientist." TOI. In Pakistan, politicians may be named but not serving generals, only dead and retired ones. In India, it would be the opposite. In Pakistan the army controls the police while in India politicians do. So, despite directions by the Supreme Court in Prakash Singh vs Union of India 2006, there has been no reform of the police. TOI. "What is worse? Police flouting all mandatory procedures while arresting and gathering evidence, or the government lawyer, an officer of the court, asking judges to overlook the conduct? What is worse? Policemen accompanying a lynch mob, or their seniors entrusting these very policemen with the investigation of lynching? They prove, if at all further proof was required, that our police is beyond the pale," wrote Jyoti Punwani.  "The biggest winner in South Africa's election this week may be former President Jacob Zuma whose newly formed uMkhonto weSizwe (MK) party has exceeded expectations and emerged as a major factor in the African National Congress' sharp drop in support." Reuters. "Umkhonto we Sizwe (MK), was the paramilitary wing of the African National Congress (ANC) from 1961 to 1993. Founded by Nelson Mandela and others," it "carried out waves of sabotage and guerrilla attacks against South Africa's apartheid government." Britannica. Zuma just nicked the brand. In 2013, "A senior South African diplomat has been suspended over use of a military airport by wealthy Indian supporters of President Jacob Zuma," when "A large chartered plane landed at Waterkloof Air Force base...carrying 200 guests who received a full police escort to the Sun City resort for the four-day wedding of 23-year-old Vega Gupta." NDTV. In India, "In a rare case, the Narendra Modi government has given the international tag to the sensitive defence airport at Gujarat's Jamnagar town for just 10 days so that guests invited to the wedding of Mukesh Ambani's son can land close to the venue. The international tag to the Indian Air Force airport close to the Pakistan border was given for February 25 to March 5 (2024)." The Wire. "South Africa's former president Jacob Zuma, who spent only two months of a 15-month in prison in 2021, was granted remission approved by President Cyril Ramaphosa." Reuters. In India, Dera Sacha Sauda chief Gurmeet Ram Rahim, convicted of rape and murder, has been out on parole 9 times, for a total of 91 days, in two years, including for cutting a birthday cake with a large sword. NDTV. Immunity for the elite, third degree (dictionary) for the rest. That's why we are the third world (wikipedia).

Saved 100 tonnes of gold.

"Chinese companies under investigation by the US government are using shell companies, new names and other legal workarounds to continue doing business in America, according to a recent report." Fox. "As China's big banks withdraw from financing Russia-related transactions, some Chinese companies are turning to small banks on the border and underground financing channels such as money brokers - even banned cryptocurrency - the sources told Reuters." "The US has imposed an array of sanctions on Russia and Russian entities" and "Now the threat of extending these to banks in China - a country Washington blames for 'powering' Moscow's war effort - is chilling the finance that lubricates even non-military trade from China to Russia." CNBC. "India rarely bought Russian oil before 2022 due to high freight costs," but "Russia emerged as India's top oil supplier in 2023. Through term deals and spot market purchases, the South Asian nation imported about 1.66 million barrels per day (bpd) of Russian oil in 2023 compared to an average 652,000 bpd in 2022." BS. "India in April imported more Russian oil but less from Iraq and Saudi Arabia than it did a month earlier," as "The world's third biggest oil importer and consumer, India raised purchases in April by 13-17% compared to previous months, the data show." Reuters. Given this background, perhaps it is prudent that "The Reserve Bank of India (RBI) has moved 100 metric tonnes of its gold stored in the UK to domestic vaults in FY24." "As of March 2024, the RBI's gold reserves stand at 822.1 tonnes," of which over 408 tonnes are held at home while 413.79 tonnes are held abroad. "Storing gold internationally comes with risks, particularly during geopolitical tensions. The freezing of Russian assets by Western nations has heightened concerns about the safety of assets held abroad." BT. A good start, but the RBI should move all of our gold to India. That would save a lot of money in fees. But what about foreign currencies and government bonds? As of 12 April the RBI's total Liabilities/Assests amounted to Rs 67.255 trillion, of which foreign currency assets constituted Rs 47.501 trillion. RBI. "As of March 31, 2024, the RBI had invested $240.6 billion in US Treasuries, marking a nearly $20 billion increase between October and March, according to data from the US Department of Treasury." which meant that "with yields rising due to monetary policy tightening - reflecting the higher-for-longer stance of the US Federal Reserve - resulting in substantial interest income for the RBI from foreign assets." rediff.com. "The most notable increase in the central bank's income came from foreign sources, which saw a 71% year-on-year (YoY) rise to Rs 1.03 trillion." This enabled the RBI to pass on an unprecedented Rs 2.1 trillion to the government just before elections. Mint. If sanctions do come, they will not be only on gold, but also on foreign currencies. The RBI may be government property (RBI), but the money is ours. Don't gamble with it.

Market changes are permanent.

"The number of unique investors in Indian equity markets has nearly tripled since 2020 to 90 million." The number of investors in mutual funds "has more than doubled from 21 million as of December 2020 to 45 million as of April 2024." "This shift is being fueled by three interconnected mega trends: An expansion of the middle class, rising incomes within this demographic and the youthful profile of India's population," wrote Dhiraj Relli. Even better, "The notional volume of equity derivative trading in India reached $6 trillion in early February, a six-fold surge since the start of 2022, before easing recently." "The surge has come despite repeated warnings from the country's securities market regulator, whose own studies suggested that 90% of active retail traders lose money trading derivative contracts." ET. To put it in perspective, India's GDP is estimated at around $4.112 trillion in 2024. Forbes. "Chief Economic Advisor V Anantha Nagesaran has flagged household savings getting invested in futures and options trade, stressing for a rethink on sachetisation of such trades because a different financial literacy is needed. Sachetisation refers to process of making financial products and services available in smaller, more manageable packs." BT.  "India's youth continue to grapple with soaring unemployment rates, with nearly 83% of the jobless population belonging to this demographic, as per India Employment Report 2024 jointly published by the International Labour Organisation (ILO) and the Institute of Human Development (IHD). The report underscores a concerning trend where the proportion of educated young people, possessing at least secondary education, among the total unemployed youth has nearly doubled from 35.2% in 2000 to 65.7% in 2022." Mint. In its annual report, the Reserve Bank of India (RBI) said that the Indian economy "expanded at a robust pace in 2023-24 (April 2023 to March 2024 financial year), with real GDP growth accelerating to 7.6% from 7% in the previous year - the third consecutive year of 7% or above growth pace." BS. "However, the compounded annual growth rate (CAGR) for the period 2019-20 to 2023-24 was 4.3%, compared with 7.4% in the five-year period ending 2018-19," wrote Madan Sabnavis. Retail investors don't care. Although foreign portfolio investors (FPI) have sold stocks worth Rs 355.27 billion, domestic institutional investors (DII) have invested Rs 417.20 billion, so that both the Nifty and the Sensex have registered record highs during this month. Mint. The markets are pricing in a victory for the BJP. Why do markets love the BJP? Because, from 2018-19 to 2022-23, net sales of the top 5,000 companies went up by 52% while corporate taxes increased by only 36% resulting in profits rising sharply by 187%. Lower corporate tax rates are increasing profits and the share prices, wrote Vivek Kaul. Punters love it. "As favorable government policies are driving growth in many companies, investors have now coined a new category - Modi stocks - to beyond the existing heroes of Dalal Street like Adani, Ambani or Tata." ET. What if Mr Modi loses? Will all this just vanish?

Expensive, but a mirage nonetheless.

"Lauding Prime Minister Narendra Modi's government, External Affairs Minister S Jaishankar said that it is under his leadership that the foreign policy of India has given fame to the nation, which has resulted in New Delhi gaining popularity across the globe." TOI. "Due to changes in provincial laws, hundreds of students are facing deportation from Canada. The protesting Indian students have been on a hunger strike for the past four days," and "some students have threatened to go on a dry hunger strike." Mint. It's not as if these students are being bundled off to Yemen or Iran. They are being asked to return to the bosom of their families in India where Mr Modi "introduced the concept of Amrit Kaal or 'The Era of Elixir' to the entire nation on India's 75th Independence Day. Amrit Kaal is the PM's vision 2047 for 'New India', a new dawn for the country which will bring with it the chance to fulfill the nation's aspirations." investindia.gov.in. "The sensitive border state of Manipur completed one year of violence on Friday, May 3," due to which 230 people have died and 60,000 rendered homeless. During this period Mr Modi made "162 official and non-official visits to various other states in the country" as well as 14 official visits abroad. The Wire. No doubt to spread the word about impending Amrit Kaal. But he forgot Manipur. "Confident of an overwhelming BJP victory in the Lok Sabha elections," Mr Modi vowed to attend the G7 meeting in Italy on 13-15 June. TOI. "The government's decision to attend the G7 summit in Italy (June 13-15) and the conference on Ukraine in Switzerland (June 15-16) can only be seen as a cynical act." "The paradox is, while the Indian elite resorts to strident nationalistic rhetoric and jingoistic grandstanding in domestic politics, its psyche longs for a seat the high table of Western democracies. The contradiction is that the elite wants to cherrypick while the US won't settle for anything less than India unequivocally toeing the Western agenda from Ato Z," wrote MK Bhadrakumar. "As India navigates its role in the global intelligence landscape, it faces a myriad of converging and diverging interests with Five Eyes." "Avoiding confrontation between India and the Five Eyes alliance is essential for security, stability, and cooperation in an increasingly complex global environment," wrote Gen MM Naravane. When Mr Jaishankar accuses Canada of giving visas to people linked to organised crime and to terrorism (Mint), perhaps he should not forget that Canada is a member of the G7 (home.treasury.gov) and the Five Eyes group of nations (publicsafety.gc.ca.) and India is not. "A new report called 'Modi Mirage', produced by academics in the US, Netherlands and UK, says Prime Minister Narendra Modi's claim of having dramatically enhanced India's standing in the world is a 'mirage'." TOI. In 9 years, from 2014 to 2023, Mr Modi visited 124 countries in 70 foreign journeys. From May 2014 to November 2019 his foreign visits cost India Rs 359 billion or $43 million. Wion. Foreigners, it seems, are not impressed. 

Forget the past, prevent the future.

"The International Criminal Court is seeking arrest warrants for Hamas leader in Gaza Yahya Sinwar and Israeli Prime Minister Benjamin Netanyahu on charges of war crimes and against humanity over the October 7 attacks in Israel and the subsequent war in Gaza." ICC prosecutor Karim Khan said that "the ICC's prosecution team is also seeking warrants for Israel's Defense Minister Yoav Gallant, as well as two other top Hamas leaders - Mohammed Diab Ibrahim al-Masri, the leader of the Al Qassem Brigades, who is better known as Mohammed Deif, and Ismail Haniyeh, Hamas's political leader." CNN. Predictably, "Benjamin Netanyahu responded with fury to the news that he might face an arrest warrant for war crimes and for crimes against humanity." "Mr Khan, he said, was like judges in Nazi Germany who denied Jews basic rights and enabled the Holocaust." BBC. Absolutely. To equate Israeli government and Hamas is an outrage of monstrous proportion when one considers that Hamas can stop the war instantly by releasing the hostages. This is a despicable attempt to allow Hamas to continue to use hostages as human shields. In truth, Khan and the ICC are guilty of crimes against humanity by not demanding immediate release of hostages. In a similar outrage, "The UN's top court, the International Court of Justice (ICJ), has issued a dramatic ruling, ordering Israel to 'immediately halt its military offensive in Rafah'. It acted in support of a South African application last week which sought a number of measures against Israel, accusing of stepping up what it says is a genocide." BBC. South Africa's anger against Israel dates back to Israel's friendship and cooperation with the apartheid government which helped Israel to develop nuclear weapons. wikipedia. South Africa should be careful supporting Hamas. Africa has its own rebel movements. "Today's rebels seem especially uninterested in winning converts, content instead to steal other people's children, stick Kalashnikovs or axes in their hands, and make them do the killing," wrote Jeffrey Gettleman in 2010. South Africa shares a border with Mozambique. Map. On 11 May 2024, "Islamic State-linked insurgents attacked the town of Mocomia in Mozambique's gas-rich Cabo Delgado province, in what is their boldest target in three years. The government said its army successfully repelled the attack after 45 minutes of fighting." HT. Islamic State is a friend of Hamas. "Ten people have been killed and at least 160 other villagers have been kidnapped from a remote community in Nigeria's central Niger state, officials say. A large number of armed men, suspected from Nigeria's militant Islamist group Boko Haram, invaded Kuchi village on Friday (24 May) night, local official Aminu Abdulhamid Najume told the BBC's World Service." Boko Haram, Islamic State, Hamas, are all different names for the same fetid cancer metastasizing all over the world. The only way to survive is to excise all of them. That's what Israel is trying to do. Some day South Africa may need that expertise.       

Submission and devotion.

"India's economy is estimated to grow at 8-8.3% in the current fiscal, industry body PHDCCI said. The country's GDP will grow at an average of 6.7% over the next 23 years to become a $34.7 trillion economy by 2047, with a per capita income of $21,000, it added." BS. "Former Reserve Bank of India (RBI) Governor Raghuram Rajan says if one takes away the 'fluff' from India's growth numbers, its real rate of growth could be around 6-6.5% and not 8-8.5%. To become a developed country by 2047, India would need growth at 9-10% over a sustained period of time, he added." BT. In his quest for a third election victory, Prime Minister Narendra Modi said that "Adani and Ambani were filling the Congress coffers with their black money, transporting tempo loads of them to the party he loves to hate." "Shouldn't Adani and Ambani act against Modi (and Rahul Gandhi) for defamation? And if they don't - and they will not - what does it say about corporate India and its billionaires?" "Indian billionaires have flourished in the last 10 years. Governmental policymaking partly made it happen. In return, these elites confer their silence. Patronage always trumped reputation." DH. "It isn't just the official statistics that Indian CEOs find hard to discuss these days. It's a bigger problem if they talk about policies." "Multinationals have learnt to keep quiet because when they do complain - like when a Toyota Motor Corp. executive spoke up against taxing cars as drugs and alcohol - they only get pressure to walk back their words. Either that or social media trolls are unleashed on them." "Whether they feel the growth or not, companies have to applaud the published GDP figures, praise India's regressive tax system and demonize Modi's opponents as anti-growth," wrote Andy Mukherjee. During Mr Modi's tenure prices of shares of public sector companies have soared. "State firms have done better than India's benchmark Sensex index for three straight years." "The government actively mops up household financial savings and routes all investment through the state sector. As a share of GDP, government expenditure has increased sharply, as has India's debt." But, "New investment plans for the private sector shrunk by over 15% in 2023-24. Manufacturing suffered the biggest hit, as fresh proposals fell by 40% in value terms, from Rs 20 trillion ($240 billion) in 2022-23 to Rs 12 trillion ($144 billion) in 2023-24, "wrote Mihir Sharma. India recorded a trade deficit with nine of its top ten trading partners in 2023-24. "The trade deficit with China rose to $85 billion, Russia to $57.2 billion, Korea to $14.71 billion and Hong Kong to $12.2 billion in 2023-24." "India has a trade surplus of $36.74 billion with the US in 2023-24." "India's total trade deficit in the last fiscal narrowed to $238.3 billion as against $264.9 billion in the precious fiscal." BS. While combined exports of merchandise and services have gone up by a tiny amount imports have fallen by a much greater amount, thus reducing the total trade deficit. India Briefing. That is probably because people do not earn enough to buy imported goods. "Lower class aspirations, colored by digital imagination and mall window shopping, remain framed by the lack of industrial jobs in an economy in which the market produces only low-paid service work for the unskilled and the semi-skilled," wrote Prof Supriya Roy Chowdhury. A repressive government, totally submissive middle and upper classes, an army of brain-dead Bhakts, meaning devoted, (DH) and the struggling masses. It's a wonder they don't revolt. Perhaps, they don't have the energy. 

Alchemy or Midas Touch.

"Foreign portfolio investors (FPIs) have turned aggressive sellers in Indian markets ever since reducing their buying momentum with the onset of the new fiscal 2024-25 (FY25)." "From January to May so far, they have net sold around Rs 120,000 crore (Rs 1.2 trillion) in Indian markets. This is the secondary market outflow." Mint. And yet, "Domestic stocks staged a strong upmove in Thursday's (23 May) trade to hit their record highs." "The 30-share BSE Sensex pack rallied 1,279 points to hit an all-time high of 75,500, while the broader NSE Nifty index moved over 396 points to trade at a fresh record peak of 22,994." BT. "The share of domestic institutional investors (DIIs), with net inflows of Rs 1,08,434 crore (Rs 1.084 trillion), increased to 16.05% from 15.96% during the December-March FY24 quarter, according to Prime Database. On the other hand, the share of foreign institutional investors (FIIs) declined to an 11-year low of 17.68% as on March 31, 2024, down by 51 bps (basis points) from 18.19% on December 31, 2023." News18. The combined investment of High Net Worth (HNI) individuals and retail investors fell to 9.50% from 9.64%. Thus, domestic investments in Indian stock markets are well above those of foreign ones. The US dollar has been trading at over 83.30 through April and May (Investing.com), reaching a high of 83.669 INR to one dollar on 16 April 2024. Exchange Rates. The exchange rate is 83.04 INR to one dollar today. xe.com. A stronger rupee means that foreign investors are making handsome profits when converting their sales to dollars. "India's forex reserves jumped USD 4.549 billion to a new all-time high of USD 648.7 billion for the week ended May17, the Reserve Bank (RBI) said." BS. In addition, "From January to April 2024, the RBI added 24 tonnes of gold to its reserves," so that gold holdings rose to 827.69 tonnes as of 26 April. TOI. The RBI has been buying gold despite its price shooting up to over Rs 76,000 per 10 grams of 24 karat gold. Bankbazaar. The RBI has declared a dividend of Rs 2.1 trillion to the government for 2023-24. This has resulted from interest from bonds, from lending money to banks and from the sale of foreign currencies. TOI. The RBI also increased the Contingency Risk Buffer (CRB) to 6.5% in FY24. BS. "The contingency risk buffer is a specific provision fund kept by the central bank primarily to be used during any unexpected and unforeseen contingencies." MC. "Rs 2.1 trillion is a phenomenal amount, 0.7% of GDP or something like that," said economist Swaminathan Aiyar. The increase in CRB indicates that "the RBI is aware that there is a chance of some kind of financial storm in markets, which may require RBI intervention on a much larger scale than hitherto." ET. What it boils down to is that the RBI has bought 24 tonnes of gold, allowed FPIs to repatriate dollars, increased its forex holdings to record level, dished out a record amount of cash to the government, increased its CRB and yet the rupee is becoming stronger. The RBI must have the Midas Touch (wikipedia) or knows Alchemy (wikipedia). Other central banks must be green with envy. 

Rs 680 billion for menial jobs.

"In the picturesque Canadian province of Prince Edward Island (PEI), a significant protest is unfolding. A group of former and current students, mostly from India, have taken to the streets, voicing their distress over a policy shift that jeopardizes their future prospects in the country." The PEI government has decided to prioritize healthcare, early childhood education, and construction, leaving students who work in food and retail industries, meaning as waiters and salespeople, in jeopardy. So "they face the stark choice of returning to their home countries or protesting in hopes of a policy reversal." ET. The Government of Canada decided to cap the number of international students. "For 2024, the cap is expected to result in approximately 360,000 approved study permits, a decrease of 35% from 2023." canada.ca. Yet, "Despite Canada's policy changes, the fundamental qualities which made the country attractive" are "Canada continues to offer better chances of settling down post-studies, compared to other countries." TIE. A student visa is an avenue to menial jobs in Canada which offer a decent quality of life and the prestigious tag of Non-Resident Indian (NRI). The same jobs in India are considered shameful and a loss of status. Canadian student visas are very attractive for young Punjabis who spend a total of Rs 680 billion every year in university fees and living costs in Canada. ET. Canada's actions may have resulted from India's response to "accusations by the Canadian government that Indian agents were involved in the killing of Khalistani terrorist Hardeep Singh Nijjar." Mint. "External Affairs Minister S Jaishankar said Canada has a 'permissive attitude' towards terrorists and extremists," (India Today), and "People linked to organised crime in Punjab are welcomed in Canada." ET. Naturally, Canada would like to restrict potential terrorists and criminals from Punjab. Without a good income men cannot find brides. "These days, the first preference of potential brides is for men with govt jobs that don't exist, followed by private jobs that are shrinking, and then self-employed youth, backed by farmland; the foremost question being, what's the groom's annual income?" wrote Jaideep Hardikar. "You meet graduates and postgraduates of all hues; they've tried their luck - futilely - in the industrial belt of Mumbai-Pune-Nashik; worked in contractual employment for paltry wages; lived in crowded shared chawls or rooms; tried - or are still trying - their luck at competitive exams to land a job, and failed." Sadly, "There is an entire class, probably in the millions, of Indian graduates and would be graduates who are absolutely subpar in their ability to think, communicate, understand, analyse or problem-solve anything." Because of smartphones. "Somehow, watching videos has become the new cool and books a waste of time," wrote Chetan Bhagat. The rot starts in schools and enforced school closures for two years due to Covid (HT), exacerbated the problem. The Annual School Education Report 2023 found that "nearly 25% of rural youth in the age group of 14-18 cannot read a class 2 level text 'fluently', even if it is in their regional language," and "more than half struggle with division (3-digit divided by 1-digit) problems," and yet, "Close to 90% of youth have a smartphone in the household and know how to use it." The Hindu. If they have to do menial jobs, better to do it in Canada. It might get them a bride. 

A waste of time.

"The BJP-led National Democratic Alliance (NDA) has crossed the majority mark in the first five phases of the Lok Sabha polls, Prime Minister Narendra Modi told the Economic Times in an interview." ET. Mr Shah has no need for the NDA. "Exuding confidence that BJP's Lok Sabha count has surpassed 310 after five phases of elections, Union home minister Amit Shah...his party is headed for victory in more than 400 seats." ET. At present, the Lok Sabha has a total of 543 seats so any party, or an alliance of parties, with 272 seats and over will have a simple majority. wikipedia. A victory with over 362 seats will give the BJP two-thirds, and 408 seats will give it three-quarters of all seats. A two-thirds majority will allow the BJP to change the Constitution. byjus.com. Mr Modi is very keen on the idea of 'One Nation, One Election' which means that all states will hold elections to their assemblies along with the parliamentary elections. This will apparently improve voter turnout and reduce the cost of holding elections. NDTV. When assembly elections are held separately voters focus on local issues, like roads, electricity and water supply, but if combined with national elections Mr Modi can use his popularity rating of 78% (TOI) to make it a referendum on himself and confuse voters with completely fictitious claims of the Congress insulting Lord Ram and intending to shut down the temple in the city of Ayodhya (ET). This will, Mr Modi hopes, enable the BJP to win in over 50% of states because to change the federal structure he needs two-thirds majority in the Lok Sabha + support of more than 50% of states (byjus.com). And so, India will become a one-party state with the BJP in power forever. In a public meeting in the Milkipur Assemby constituency, the BJP MP from Ayodhya said the government needs two-thirds majority to change the Constitution.  The Print. With Messrs Modi and Shah claiming victory already what is it they know that we don't? "The Supreme Court on May 24 refused to direct the Election Commission of India (ECI) to disclose booth-wise voter turnout under form 17C. BT. This was in response to "the petition filed by the Association for Democratic Reforms (ADR) flagging 5-6% increase in final voter turnout data as compared to the initial percentages announce on the day of polling by the ECI." This gives rise to the suspicion that the electronic voting machines (EVM), used by the voters, are being replaced by doctored ones. ABP. "Considering that all of India's voting is electronic, this information is readily available. Indeed, it is required to be handed over to the agents of all candidates in each of the country's 1.2 million polling booths after the last ballots are cast," wrote Andy Mkherjee. In November 2023, the Attorney General arguing for the government in the Supreme Court claimed that "the voter does not have any right to know how his vote has been recorded and counted". "The judiciary has never been an obstacle to the ruling party's rampaging depredations of our social, constitutional, legal and institutional landscape." "The Supreme Court never fails to disappoint," wrote Avay Shukla. Why waste time voting? If they are going to change the machines.

Aliens not involved.

"The US has warned of potential sanctions for any country considering business deals with Iran, hours after India signed a 10-year contract to operate a port with Tehran. India had entered an agreement to develop the strategically important Chabahar port, close to Iran's border with Pakistan, in 2016. On Monday (13 May), it signed a long-term deal with Iran to develop it further." BBC. One week later, "Iranian President Ebrahim Raisi, a hardliner seen as a potential successor to Supreme Leader Ayatollah Ali Khamenei, was killed when his helicopter crashed in poor weather in mountains near the Azerbaijan border, officials and state media said." Reuters. Poor timing. "Social media is abuzz with conspiracy theories about the death" "Occurring amid the Israel-Hamas war in which Iran-backed militant groups Hezbollah and the Houthis are also attacking Israel." "What gives wind to such theories is Israeli spy agency Mossad's extraordinary capability to strike inside Iran." "In a stunning operation in 2020, Iranian scientist Mohsen Fakhrizadeh" "was driving his car when he was killed with a robotically operated machine gun mounted on a truck parked on the roadside. The sniper was sitting at an undisclosed location over 1,000 miles away, controlling the machine gun on a computer screen." "Finally, the truck was packed with explosives so it could be blown to bits after the kill." ET. "Amidst rumors of a conspiracy regarding the circumstances of Raisi's death, claims are being made that a space-based laser weapon may have been deployed to bring down his helicopter." "Turkey added to the rumor mill by asserting that the helicopter's transponder was either missing or turned off." HT. Could be aliens from another planet. "The sighting of two alien creatures in Las Vegas last year has been confirmed. With this, it has been established that the aliens were spotted and the video purportedly made showing them was not doctored, it was genuine." ET. The Americans could have come to a deal with the Aliens to get Raisi to stop the Chabahar deal. Duplicitous Yanks. "The death of Raisi could have significant implications for Iran, Israel, and the wider region, as well as for global markets." ET. Not really. There are plenty such villains where he came from. "Raisi came to power in 2021, claiming that Iran didn't need a by-then-defunct nuclear deal with the West and could prosper by facing its 'resistance economy' squarely to the east. He also quickly imposed a crackdown on female dress codes, in a demonstrative turn to a past where his revolutionary credentials - as 'the Butcher of Tehran', responsible for mass executions of regime opponents in 1988 - were impeccable. By the time of his death..., however, both policies had proved disastrous. There were fireworks in the streets of Tehran," wrote Marc Champion. In April, "For the first time ever, Iran has carried out strikes against Israeli territory." "At least nine countries were involved in the military escalation - with projectiles fired from Iran. Iraq, Syria and Yemen and downed by Israel, the US, the UK and Jordan." BBC. Iran fired 170 drones, 120 ballistic missiles, and 30 cruise missiles at Israel. "All drones and cruise missiles were intercepted successfully." Roughly 50% of ballistic missiles failed to reach their target. NDTV. So that failed as well. Aliens need not bother. The regime will fail by itself.

The reserve currency.

"The board of India's central bank approved a record surplus transfer of 2.11 trillion rupees ($25.3 billion) to the government for the fiscal year that ended in March, sharply above analysts' and government projections." "The government had budgeted a dividend of 1.02 trillion rupees from the Reserve Bank of India (RBI), state-run banks and other financial institutions." This will help contain fiscal deficit for 2023-24. "India's benchmark 10-year bond yield dropped five basis points to 6.99% after the announcement, its lowest level in nearly a year." Reuters. The Revised Estimate of fiscal deficit was 5.8% of GDP in 2023-24 and was projected at 5.1% of GDP for 2024-25 in the Interim Budget presented on 1 February 2024. pib.gov.in. The RBI earned such a humongous profit from increased interest payments on $250 billion worth of US Treasuries that it holds, from interest paid on borrowings by banks, which are starved of liquidity, and from the sale of dollars. ET. But the RBI also buys dollars. "India's forex reserves jumped $2.561 billion to $644.151 billion for the week ended May 10, the RBI said." "For the week ended April 5, the reserves had hit an all-time high of $648.562 billion following multiple weeks of rise." Zee. How can the RBI make profits by selling dollars if it is buying back at the same rate of exchange? "Hypothetically, if there is a $5 billion shortage, RBI can either directly sell $5 billion to add to the dollar supply; or, it can sell $25 billion and buy back $20 billion, to generate a net supply (or sale) of $5 billion. It's the latter which the RBI did during the year." ET. The buying rate of the US dollar today is Rs 83.74 while the selling rate is Rs 81.45. Thomas Cook. Which means that we have to pay Rs 2.29 more if we buy dollars than if we sell. So, by selling $25 billion and buying $20 billion the RBI should be incurring a loss, or breaking even at best. Apparently, it is showing that the dollars it is selling were purchased in earlier years when the exchange rate was lower. Thus, if it shows that the dollars were purchased in 2014 when the exchange rate was Rs 60.95 to one dollar (Forbes) it is making a gain of Rs 20.50 for every dollar it sells. The dollars it is buying is added to the reserves and becomes an asset. This is a diabolical sleight of hand just to help the government. Can the RBI go bankrupt or can it easily plug any gap in its assets by printing money? "But there's a danger, exemplified by Venezuela in the 1980s and 1990s. The central bank pushed into insolvency by its support of the Latin American government's industrial policy, leaned too heavily on the power of cheap money-printing to earn profits and repair its balance sheet, and lost control of inflation," wrote Andy Mukherjee. The US Federal Reserve, which can print dollars, did not pay any dividend to the US government. "In 2023, the Reserve Banks increased the deferred asset by $116 billion resulting in a cumulative deferred asset at year-end of $133.0 billion. The deferred asset is the amount of net excess earnings these Reserve Banks will need to realize before their remittances to the US Treasury resume." federalreserve.gov. Not a peep out of the Biden government. Hard to imagine the fury of our government if the RBI paid no dividend. That's why the dollar is the world's reserve currency. Investopedia. And the rupee will never be.  

Unwanted legacy.

On 5 May, "The Centre's decision to repurchase short-term government bonds, maturing within 6-9 months, is expected to lower yields and ease liquidity conditions, said market participants." "The decision came amid observations  that while government spending surged between February and April, there is an anticipation of a slowdown leading up to the June election results." BS. On 17 May, "The RBI repurchased only Rs 2,069 crore (Rs 20.69 billion) of government bonds from a notified amount of Rs 60,000 crore (Rs 600 billion) as banks were unwilling to sell at a loss. The central bank's second attempt to infuse liquidity saw a limited success as the securities were purchased by banks at higher prices." BT. "The Government's attempt to infuse liquidity through a bond buyback...failed again - the third time in a row this month - as the Reserve Bank of India (RBI) rejected most of the bids." "In the three buybacks conducted this month, the RBI has managed to repurchase bonds worth only Rs 178.49 billion, significantly falling short of the Rs 1.6 trillion target." Banks are demanding a higher price for the bonds which was rejected by the RBI. Because, "If it accepted bids at very high prices, short term bond yields would have fallen as if the RBI had cut interest rates. That would represent easier financial conditions. Given that inflation is still above 4%, the RBI would not want markets to start pricing in rate cuts when the central bank is working hard to keep inflation expectations anchored." ET. Banks may run short of liquidity because, "The robust post-pandemic economic recovery has seen a surge  in credit growth, especially in the retail segment." "The CD (credit-to-deposit ratio) is at a decadal high of 80%, CareEdge Ratings state in a March 2024 report." "According to RBI data, bank credit growth exceeded the increase in deposits by Rs 2 trillion in 2023-24. A key contributor to this trend has been the rise in equities as an asset class," wrote Abhishek Mukherjee. "Net household savings have fallen to a low of Rs 14.2 trillion in 2022-23 from a peak of Rs 23.3 trillion in 2020-21. That's a drop of Rs 9 trillion, or almost 40% in a brief period." It's not just a slowdown in the growth of deposits but a fall in absolute numbers. "According to official data, household MF (mutual funds) investments almost trebled to Rs 1.79 trillion from Rs 640.84 billion. in 2020-21; in debentures, they nearly doubled to Rs 2.06 trillion." Mint. "The Indian stock market has achieved a remarkable feat of adding $1 trillion in wealth within a span of 6 months. Yesterday, it entered the prestigious $5 trillion club for the first time, despite facing FII pullout ahead of the Lok Sabha election results on June 4." TOI. Not just equities. "The notional volume of equity derivative trading in India reached $6 trillion in early February, a six-fold surge since the start of 2022, before easing recently." ET. This is higher than India's GDP estimated at $4.112 trillion in Q3 of FY2024  (Forbes). What do all these data mean? Is there a danger of millions of people suddenly losing everything? That would leave banks losing trillions due to default. Mr Modi would perhaps not want such a legacy.