RBI vs the Fed.

In his speech at Jackson Hole, new US Federal Reserve Chair Kevin Warsh "made two things clear: One, it is the 'Fed's job to deliver stable prices,' And two, with US inflation running above its 2% target, the central bank's 'predominant focus right now should be on prices'." "In India too, when it comes to inflation, the buck stops with its central bank under the regime we adopted a decade ago." Mint. The Consumer Price Index (CPI) inflation rate in the US was at 3.4% year-on-year in August. bls.gov. "India's retail inflation has accelerated to 4.82% in August 2026 from 4.45% in July, as food prices and other key components of the consumer basket exerted pressure on the economy." Actually, food inflation was relatively less to blame at 5.95% and could be partly caused by the transport services for goods at 14.64%. Personal care, social protection and miscellaneous goods and services went up by 15.17% while "inflation in other personal effects stood at 44.56%." ET. "India's wholesale prices rose 9.92%year-on-year in August," with manufactured products up by 8.37%, fuel and power by 22.93% and petroleum and natural gas by a whopping 34.41%. Producer prices in August rose 9.8% y-on-y, according to Reuters calculation. In the Wholesale Price Index (WPI), with 2022-23 as the base year, the weight of Primary Articles is at 22.62%, fuel and power at 13.15% and manufactured products at 64.23%. Anantam IAS. "The Producer Price Index (PPI) "reflects the cost at which goods are sold at the production level before they reach consumers. The PPI covers a wide range of sectors, including mining, manufacturing and agriculture." Bajaj Finance. If input prices as reflected by the WPI and wholesale manufactured prices in PPI are rising at near double digits its only a matter of time before retail prices rise by at least the same amount, or by even more as retailers add their own profits when selling to consumers. "There has been a growing body of evidence that wholesale inflation tends to move towards consumer inflation during episodes of divergence. And headline consumer price inflation moves towards core inflation when there is a substantial gap between the two." Core inflation was at 3.9% in July, wrote Niranjan Rajadhyaksha. The Reserve Bank of India (RBI) undertook to cover hedging costs as it asked Banks to borrow foreign exchange by promising higher interest to non-resident Indians (NRIs).  "Banks have received $127.3 billion in FCNR(B) deposits since June, marking a strong response to the RBI's scheme and taking total inflows to $136.4 billion." MC. It was necessary because, "net foreign direct investment has collapsed from $44 billion in 2020-21 to virtually zero. Foreign portfolio investors pulled out nearly $29 billion from Indian markets in 2026 alone, on top of $18 billion the previous year. The rupee was weakening fast." But, "These dollar inflows, converted to rupees, have contributed to a record surplus, close to Rs 10 trillion in the banking system. To prevent this from fuelling inflation or reckless lending, the RBI must mop it up by selling government bonds. That pushes bond prices down and yields up, raising the government's own borrowing costs, of which the interest cost is already at a staggering 40% of all revenues," wrote Ajit Ranade. The RBI's refusal to increase interest rate, to keep government borrowing costs low, has led it to such expensive maneuvers, which will lead to higher yields on GOI bonds, which means higher borrowing costs. The RBI may think it is in control but Kevin Warsh can overrule it. "The 10-year (US) Treasury yield fell slightly to 4.994% after rallying as high as 5.03%. in.investing.com. The Fed could make all RBI's efforts useless. Who will pay for this folly? The hapless taxpayer.      

Digital has no substance.

"De-dollarisation was one of the most-discussed topics ahead of the 18th BRICS Summit in New Delhi. However, like previous summits, BRICS did not come up with a proposal for a common unified currency. Instead, the grouping encouraged the New Development Bank (NDB) to expand financing in local currencies." News18. Central banks have been reducing their dollar holdings anyway. A survey by the Official Monetary and Financial Institutions Forum (OMFIF) found that, "More of the world's central banks plan to cut dollar allocations than increase them in the coming decade as political risks associated with the US currency rise." But, "There is no clear alternative to the dollar and it has rallied 3% this year, driven by higher US interest rates, a thirst for US assets and a flight to safety sparked by the US-Iran war." Reuters. The value of the dollar is rising because of the US attack on Iran, increasing the price of oil and causing global inflation. What an irony! However, "Over the past few years, central banks have been quietly buying up significant quantities of gold," "led by Russia, China, Turkey, India and Kazakhstan," and now hold "more than 36,000 tonnes." The Conversation. France and Germany transferred their gold back home from the US, while "The Dutch sold about 59 tonnes in New York and then bought more stocks in London," which they stored in the Bank of England. BBC. To reduce dependence on the dollar, "India is likely to pitch seamless cross-border digital payments and greater adoption of central bank digital currencies, or CBDCs, among BRICS members at the summit." India does not favor a BRICS currency to replace the dollar. ET. Recently, "Finance Minister Nirmala Sitharaman urged the Reserve Bank of India (RBI) to further advance its wholesale and retail digital rupee pilots as adoption of tekenisation gains ground in the financial markets." ET. CBDCs are issued by central banks and, "Unlike cryptocurrencies, which are decentralized and volatile, CBDCs aim to provide stability and are government backed." "Privacy is one of the most significant drivers behind cryptocurrency. CBDCs would require an appropriate amount of intrusion by authorities to monitor for financial crimes." "Cryptocurrencies have been the target of hackers and thieves. A central bank-issued digital currency would likely attract the same crowd of thieves." Investopedia. "Hackers thought to be for the North Korean regime have successfully converted at least $300 million of their record-breaking $1.5 billion crypto heist to unrecoverable funds." "Experts say that the infamous hacking team is working nearly 24 hours a day - potentially funnelling the money into the regime's military development." BBC. Will the RBI guarantee a full refund if someone's account is hacked? In April, "The central bank is seeking to rein in rupee volatility through enhanced oversight of foreign-exchange markets and by tightening norms governing banks' participation in the non-deliverable forward (NDF) segment." "Traded mainly in financial centers such as Singapore and London, rupee NDF contacts are settled in dollars between non-resident counterparties, limiting the central bank's ability to directly influence volumes, pricing or positioning." ET. If an Indian company pays for imports with a large amount of rupee CBDC how will the RBI control what the foreign company does with it? Finally, what happens if Iran, a member of BRICS, insists on paying for imports at the official exchange rate of the rial instead of the market rate through its CBDC? While the official rate is 1.375 million Iranian rials to one dollar (Paytm), the market rate is 2.305 million to one dollar (Alanchand). CBDC has no substance. Junk it. Dollars are real. Stick to it.  

Back to normal.

India hosted the 18th BRICS summit in New Delhi on 12-13 September. "Today BRICS comprises 11 countries: Brazil, China, Egypt, Ethiopia, India, Russia, Saudi Arabia, South Africa and the UAE. Collectively, these members represent 49.5% of the global population, 40% of the global GDP and 26% of global trade." pib.gov.in. Of all the members, China's economy, with a GDP of $20.85 trillion (IMF), is greater than the other 10 combined, and, at 2,889.5 million, the combined populations of India and China  (worldometer), is greater than all the rest combined. "Chinese President Xi Jinping told PM Narendra Modi the current momentum in bilateral ties anchored in resumption of institutional exchanges, expanding cooperation agenda and increasing trade is hard-won and deserves to be cherished." TOI. Of course he would cherish it because, in 2025-26, India's exports to China rose 36.62% to $19.47 billion while imports rose 16.03% to $131.63 billion, giving a difference of $112.16 billion in favor of China. ET. Despite a wide difference of opinions, India succeeded in getting a joint declaration which condemned the Pahalgam attack without naming anyone responsible, called for restraint in the Middle East, opposed tariffs and carbon tax and asked Israel to withdraw from Lebanon. India Today. So anodyne that no one can find a flaw. Photos of Delhi's makeover have gone viral: "recliner lounges with no rush, market corridors clear of hawkers for the first time in years, curated regional gifts for delegates. But behind the wonder is a sharper, more familiar Delhi question - why does the city only look this good when the world is watching?" News18. It is not the whole city, only highly selected areas where foreigners will be shepherded. Come to the middle class area of Vasant Kunj, South Delhi, a 20-minute drive from the airport, and see broken roads, piles of strewn garbage, and uncontrolled, dangerous extensions to buildings everywhere. While delegates were receiving curated gifts, "A YouTuber in Uttar Pradesh's Bijnor was allegedly thrashed and chased down after  he posted videos highlighting the condition of roads and other civic issues in a village. The victim claimed the attack was carried out by the husband of a village head and his supporters." HT. Villages are administered by an elected body known as the Panchayat and one-third of the seats are reserved for women by law. ECI. However, women are put forward for show while their husbands run the Panchayat in the backward areas of north India. "This phenomenon, described as the 'Pradhan Pati' (husband of the chief) or 'Mukhiya Pati' practice (where husbands of women village heads do proxy governance for their wives), has long been explained as a distortion expected to recede as representation deepens." SAM. Foreigners know the real state of India. If BRICS "becomes an effective group at all, it is likely to become one that China will use to promote its interest and isolate India, and to undermine India's interest in the Indo-Pacific." "India's interest thus lies in sabotaging BRICS to the extent it can, lest it becomes a juggernaut that flattens India's interest," wrote Rajesh Rajagopalan. Not to worry, BRICS is just a talking shop with numerous photos of Prime Minister Narendra Modi with heads of governments. "What does BRICS do? "Mostly, it is a messaging platform. Countries use it to signal to the US and the West. Where a member can negotiate with Washington, it negotiates, bilaterally and quietly. Where it does not agree, cannot agree, or will not agree, it comes to a forum like BRICS and makes a polemical statement," wrote Happymon Jacob. While the gala dinner hosted by Mr Modi, skipped by Xi Jinping (TOI), was in progress, "Amid a high alert in Delhi, more than 20 men went on a late-night rampage in northeast Delhi's Nand Nagri, pelting stones and opening fire at three or four houses before damaging vehicles and fleeing the area." India Today. Now that the furriners have left, Delhi can go back to being the filthy, crumbling, lawless, violent, brutal and uncivilized city that it actually is. Phew, what a relief!   

Xi Jinping and Putin were smiling.

"The desperate pleas for air cover from Yemeni generals started coming mid-morning on Thursday (10 September). An advance by the Iran-backed Houthis toward Yemen's strategic port city of Mocha was in full swing," but the air support never came. "Hours later, on Friday, the Houthis captured another key coastal asset, Perim Island, at the mouth of the Red Sea. The island splits the Bab al-Mandeb Strait in two, giving Tehran de facto control over another key shipping route." CNN yesterday. Two days previously, "Stepping on to the Yemeni island of Perim is to relive history." "For Perim Island sits in the Strait of Bab al-Mandeb, a geopolitical pinchpoint that's taken on an outsized importance since US President Donald Trump's war with Iran effectively shuttered the Strait of Hormuz." CNN. While the Americans and the Saudis seem to be completely clueless against an armed Shia militia group whose total membership was around 350,000 in 2024 (wikipedia), "Israel's military says it has destroyed a large underground complex operated by Hezbollah in Southern Lebanon." "The blast triggered seismic activity equivalent to a magnitude 4.1 earthquake, according to the US Geological Survey." The tunnel "included a command center used by Hezbollah's Badr unit and contained dozens of rockets, missiles and unmanned aerial vehicles, as well as anti-tank weapons, mines and explosives." Israel lost 40 soldiers and four civilians in the fighting. BBC. Hezbollah is a Shia militia group in Lebanon (Britannica) which, like the Houthis in Yemen, is a proxy for Iran. Three weeks ago, "Iran has warned the United States that it would respond forcefully to an Israeli offensive on a mountainous ridge in Southern Lebanon where Iranian military personnel are holed up alongside Hezbollah fighters." Reuters. Not any longer. Israel has cleared the rubbish out. A ferocious Israeli revenge has left Hamas, the perpetrators of the surprise, unprovoked attack on Israel on 7 October 2023 which killed 828 civilians (including 36 children) and 367 members of the armed forces, while 251 people were taken hostage (wikipedia), are a much depleted group. "Gaza is destroyed. The movement's leaders have been targeted. Its military structure has been badly hit. Its ability to govern has declined." But, "Hamas has come out of this war as a different movement: weaker militarily, heavier politically, and more dependent on its ability to survive than on its ability to govern." MEM. In short, it is just a criminal gang now. Meanwhile, "Iran has resumed its production of ballistic missiles using stockpiled components and working in underground facilities," despite the fact that "The US and Israel severely diminished Iran's missile program early in the war with thousands of strikes." "Satellite imagery shows that Iran is rebuilding everything from bridges and roads to production sites at a pace that is worrying Israel." WSJ. At the same time, "ordinary Iranians who are already struggling with a plunging currency, worsening joblessness and rising prices for everything from food to trash bags," have also to pay higher prices to fill their cars as, "the government doubled some gasoline prices to the equivalent of $0.04 a liter. Filling a tank after the cheapest rations are exhausted could now cost $2 for a car and $5 for a truck, a drain for Iranians." WSJ. Since the beginning of the war, 18 US service members have died and 757 injured (CNN), not because of any heroic attacks on Iranian positions by US troops, but because they were killed or injured by Iranian missiles and drones while hiding in bunkers. US generals seem terrified of involving soldiers in any fighting and rely solely on indiscriminate bombing which kill civilians and destroy infrastructure while leaving Iranian underground facilities intact. So, US soldiers are sitting ducks. Now, "Things have gotten so bad that the Pentagon has transferred weapons stored in Asia and Europe stockpiles in the Middle East." cfr.org. No wonder both Xi Jinping and Vladimir Putin were smiling broadly in Delhi yesterday (NDTV). Israel lost 40 soldiers to defeat Hezbollah and Iranian army personnel. The US lost 18 soldiers and 757 injured doing nothing. The regime cannot afford to lose. It will try to kill as many as it can. Hiding in bunkers is no solution. Ask Israel. It knows how to win.    

It's not Putin, or Trump.

"President Donald Trump said he did not regret going to war against Iran despite the impact the conflict may have on the November US midterm elections." "Trump reiterated his thinking the war will end immediately after the midterm elections." ET.  "Global markets came under renewed pressure...as a sharp jump in oil prices intensified inflation fears, pushing bond yields higher and raising expectations that central banks may be forced to keep interest rates elevated for longer." Brent crude futures surged nearly 6% overnight to $109.97 a barrel." News18. Yield of US 10-year Treasuries jumped to 4.965, perilously close to 5%. Investing.com. "Indian government bonds plunged in opening deals today," as "The 10-year benchmark 6.94% 2036 bond yields hit 7.0211% after closing at 6.9762% yesterday." ET. That is a spread of just over 2%, or 200 basis points (bps) with the US. In its July meeting, the Federal Open Market Committee (FOMC) kept its benchmark interest rate fixed at 3.50%-3.75%, while, in its August meeting the Reserve Bank of India (RBI) followed suit by keeping its policy rate fixed at 5.25%. Forbes. That is a spread of 150-175 bps. The bond market is hinting that interest rates need to rise. Governments sell bonds to finance their fiscal deficit. "Foreign fund flows into Indian bonds have reversed after an unprecedented spike three months ago, reflecting the combined impact of persistently high global yields, Bloomberg's move to defer inclusion of local debt on a key gauge, and increasingly shortened odds on a rate hikes." ET. "The rise in bond yields is a global phenomenon," as "Investors are selling bonds, pushing prices lower and yields higher." "Bond yields set interest rates across the economy, and a steep rise in yields can raise the cost of mortgages, auto loans and student borrowing." CNN. "The US, UK, France and Japan now confront elevated sovereign bond yields." India seems quite safe. India's overall public debt is at 81% of GDP, the combined fiscal deficit of States and the Centre is at 7% of GDP, economic growth is strong and foreign exchange reserves are adequate. We should guard against fiscal dominance, encourage private investment and R&D and remember that the "current ability to borrow should not be confused with tomorrow's capacity to service debt comfortably," wrote Anoop Singh. This year's budget targets revenue deficit at 1.5% of GDP in FY 2026-27 and fiscal deficit at 4.3% of GDP. Those figures seem comfortable but , worryingly, "Interest payments account for 26% of total expenditure, and 40% of revenue receipts"  (PRS). India's real GDP grew by 7.8% in the first (April-June) quarter of FY 2026-27 compared to last year. Using new methodology the nominal GDP, or GDP at current prices, for 2025-26 was reduced from Rs 86 trillion to Rs 80 trillion but, the Ministry of Statistics and Programme Implementation (MoSPI) said that real GDP, or GDP at constant prices, was Rs 81.36 trillion this year over Rs 75.46 trillion last year. Mint. Some of the growth could be due to base effect. On 28 February 2026, the RBI held a record Rs 21.34 trillion of government paper compared to Rs 15.58 trillion in March 2025. This is "tantamount to deficit monetization," wrote Madan Sabnavis. Also, the RBI transferred a record Rs 2.87 trillion as dividend to the government from its surplus this year. Kotak Neo. Indian banks have borrowed $127 from non-resident Indians (NRI) but "have left much of their future interest payments on overseas FX deposits unhedged, creating a source of potential dollar demand that could compound depreciation pressure in a rupee-weakening scenario." ET.  The fact that India is borrowing a huge $127 billion at very high interest seems to be a red flag. All because the RBI refuses to raise its policy rate. Don't blame Putin. Or Trump.  

Waiting to collapse.

Three days ago, on 6 Sepetember, "Rescuers are digging through the rubble a day after a residential building collapsed in the Indian capital, Delhi, killing at least, seven people." "Authorities have confirmed 12 people were taken to hospital and that seven died while others are receiving treatment." "Building collapses are relatively common in Delhi, with more than a thousand recorded in the past three years causing dozens of deaths, according to fire department figures." BBC. On 30 May, "A building near Saket Metro station collapsed, killing six people, including five doctors preparing for FMGE and NEET-PG exams." On 3 June, "Fire at Flourish Stay B&B in Malviya Nagar claimed at least 23 lives." "Magisterial inquires into a series of deadly building collapses and fires in Delhi have repeatedly flagged regulatory failures, negligence and lapses by multiple govt agencies. The subsequent actions, however, have largely been directed at junior govt officials and engineers." TOI. Illegal, unsafe construction generates enormous amounts of bribes, which go right to the top, votes for the government and employment for the great unwashed. "Around 4 million residents of Delhi are living in unauthorized colonies. Besides, absence of approved building plans, these colonies suffer from other inherent problems of haphazard growth, lack of public amenities and infrastructure, unsafe structures and unhygienic conditions." And so, under the PM-Uday scheme residents of these colonies were given ownership of their properties so that they can get parks, playgrounds and community facilities. dda.gov.in. This is called Regularization. "Regularization is the process by which a state government or local authority retrospectively grants approval to a building. It applies to buildings built without the requisite permissions or in violation of the approved building plan." Propote. Why allow people to live in unsafe structures? Because it creates a 'vote bank' (wikipedia). Also because authorities do not have the means to provide alternate accommodation to the people if the unsafe buildings are demolished. Public land would have been grabbed by a crony of politicians who would have sold parcels to these people. Naturally, politicians and officials would get their cuts. After agriculture, the construction sector is the second largest employment generator in India, employing some  71 million of the workforce in India, 81% of whom are unskilled labor while 19% are skilled. ET. It provides a fallback to the rural landless in between harvesting and planting. Between 2021 and 2025, 179 bridges collapsed killing 202 people and injuring 441 across India. "The Ministry of Road Transport and Highways reported only 42 collapses between 2019 and 2024. An analysis of media reports suggests 2024 alone saw 48 collapses, more than the ministry's five-year count. Newslaundry. The problem is that owners of almost all legal buildings in Delhi have added illegal extensions without extra support. In April 2025, "The urban development department informed Delhi Assembly that the 12 zones of Municipal Corporation of Delhi registered 76,4765 cases of illegal constructions in 10 years - form 1 January 2015 to 17 March 2025 - but enforcement action was initiated in only 35,842 cases." ET. Gross underestimate. No  details of what 'enforcement action' were revealed. Unless the minister in charge and senior officials are severely punished this will continue. Delhi is in a high-risk seismic zone 4. TOI. At a guess, over 90% of buildings in Delhi will collapse in the event of any significant earthquake. Casualties will be in millions. Life has no inflation. It remains the cheapest.          

Supposed to be an economist.

"Investors are showing signs of diversifying away from US Treasuries as global debt levels hit a record of nearly $353 trillion by end-March, a report by the Institute of International Finance found." "Looking at key debt ratios, global debt stood at 305% of world economic output, broadly stable where it had been since 2023. However, debt ratios followed a similar pattern as debt levels - trending lower in mature markets and rising steadily in emerging economies." Reuters. On 23 August, "US national debt has topped 40 trillion." "America's debt burden is rising faster than estimates just a few years ago, exacerbated by persistent deficits and soaring interest payments." At a spot price of $4,600 a troy ounce, the US debt is "More than the total value of all gold ever mined." CNN. Regardless, Trump has been busy. On 1 February 2025, the US levied 25% tariffs on all imports from Canada and Mexico, except oil and energy, which were taxed at 10%. Canada retaliated with 25% tariffs on US goods. wikipedia. Early this year, "Trump announced 'major combat operations' against Iran on Feb. 28, with massive joint US-Israeli strikes targeting military, government and infrastructure sites." Yesterday, the US destroyed five Iranian oil tankers while Iran fired missiles towards US bases in Jordan. ABC. The price of crude oil has jumped, with the benchmark Brent crude selling at $99.06 per barrel this morning. oilprice.com. In the last week of August 2026, "Canada's chief US trade negotiator is disputing claims made by Americans officials about why trade talks fell apart last week, namely that the Canadian side brought forward last minute-demands on autos and that US negotiators weren't interested in French language discoverability rules. CBC. Yesterday, "Canada imposed tariffs of 15% to 50% on hundreds of products from the US, as Canadian Prime Minister Mark Carney bets that standing up to Trump will eventually help Ottawa's negotiating position with its biggest trading partner." The Japan Times. In retaliation, "The latest US measures will hit Canadian alcohol, dairy products, motorcycles and mopeds, while Canadian goods will also face restrictions in some major US government contracts." These measures are due to start on 29 September. TOI. In US dollars, from January to July 2026, Canada exported 233,665.4 million to the US and imported 205,475.7, for a trade surplus of 28,189.7 million in Canada's favor. Canada enjoyed a surplus of 48,302.3 million in 2025, 61,166.0 million in 2024 and 78,333.4 million in 2022. census.gov. In 2024, trade with the US constituted 62.22% of Canada's total trade, the Indo-Pacific was a distant second with 17.40% and Europe and Central Asia contributed 11.99%. wikipedia. The US has a GDP of $32.38 trillion, while Canada's GDP is $2.51 trillion. Worldometers. Mark Carney is the present prime minister of Canada and was the governor of the Bank of England (July 2013-March 2020) (Britannica) when Britain exited the European Union, known as Brexit (wikipedia). Britain with a GDP of $4.26 trillion chose to give up free trade with the European Union, with a combined GDP of $21.24 trillion, just across the English Channel (World Bank). Ten years on, Britain has probably lost 3% to 8% of economic growth due to Brexit, while "The most recent study by the NBER takes account of population growth and says the UK lost 6-8% of per capita output. BBC. Even with a ringside seat, Carney seems to have learnt nothing. He, like Iran, is probably calculating that the mid-term elections to the US Congress in November will bring a Democrat majority in both the House and the Senate, which will reverse Trump's policies. Even if that happens Trump will still have veto power till 2028. Cutting off one's nose to spite one's face  is silly. The economy could tank. And Carney is supposed to be an economist. Legacy of failure. 

It's nothing personal.

India's sovereign credit rating by the US agencies are at investment grade, with S&P (BBB) and Moody's (Baa3) rating it at one notch above investment level and Fitch (BBB-) just above speculative level. The Global Economy. There are 25 countries rated BBB by S&P, including India with per capita GDP at $2,810 and British Virgin Islands at $46,710. Brazil rated BB has per capita GDP of $12,335 and Vietnam rated BB+ has per capita GDP of $5,300, but are both rated below India. Even CareEdge Global Ratings currently rates India at BBB+ with a stable outlook. Mint. Just recently, "The Government of India welcomes the decision Of Japan Credit Rating Agency (JCR) to upgrade India's Long-Term Foreign Currency and Local Currency Issuer Ratings by one notch from 'BBB+' to 'A-', while maintaining the Stable Outlook. JCR also raised India's country ceiling by one notch to 'A'." pib.gov.in. Does this mean that the JCR is fair to India while the US companies are biased? Firstly, it is not clear whether the currency and country ratings by JCR are the same as the sovereign credit rating. Secondly, US foreign portfolio investors (FPI) hold 41% of India's equity and debt markets. "In absolute terms, US based FPI holdings increased from Rs 29.5 trillion in January 2025 to Rs 32.1 trillion in January 2026." Debt investments rose by Rs 150 billion. AngelOne. In 2024, Japanese FPI investment into India was Rs 2.06 trillion less than 3% of the total FPI investment into Indian stocks. MC. Since the exposure of US companies is more than 10 times that of Japanese companies, the US rating agencies may err on the side of caution. Also the Reserve Bank of India (RBI) seems extremely reluctant to raise interest rates to tackle rising inflation unless forced to do so. In its August meeting, the RBI "kept the repo rate unchanged at 5.25% for the fourth consecutive monetary policy review, signalling that interest rates are likely to remain stable for now," even as it increased its projection for retail inflation from 5% to 5.1%. Mint. This was expected by the markets. "Over time, a fairly settled view of RBI has emerged. It is widely seen as an institution that prefers to wait rather than tighten policy unless inflation becomes impossible to ignore or external developments leave it with little room for maneuver ." "Inflation has been rising and inflation expectations are showing signs of firming up. Yet very few analysts bet on a rate hike," wrote Puja Mehra. If prices in India are rising faster than in the US, the Indian rupee will weaken against the US dollar. In May, the Indian rupee fell to a record low of 96.96 to one US dollar "as the stalled US-Iran peace talks kept oil prices elevated, driving global bond yields higher and hurting equities amid fear of further central bank rate hikes." Reuters. The USD is trading at 94.6978 to one dollar this morning. xe.com. How did the RBI achieve this? "It turned to overseas Indians, luring them with attractive sweeteners." The FCNR (B) "might have bailed us out, but only for the moment. They have to be repaid, and in dollars." "It is a telling commentary that at a time when yields and interest rates are rising all over the world, for reasons that are far from clear, India's central bank alone seems to believe in 'Indian exceptionalism'. The world doesn't," wrote Mythili Bhusnurmath. As a result, "The gap between India's 10-year government bond yield and the US 10-year Treasury yield has narrowed sharply to levels last seen many years ago, changing the equation for the rupee, foreign investors and the RBI's monetary policy." MC. Foreign investors have to account for the falling rupee. "A total of 64.3% of India's population, which represents 940 million people, are now covered under at least one social protection benefit," according to the International Labor Organisation. TNIE. Which puts a big question mark over tax collection and fiscal deficit. The RBI may not care about Indian citizens, foreign investors are responsible to their people. Hence they rate us low. Pure economics. Nothing personal.   

Face it, it's impossible.

"After opening the door to higher interest rates,...US Federal Reserve Chairman Kevin Warsh has to decide how to follow though with actions." "In a speech to the Kansas City Fed's annual Jackson Hole conference in Wyoming,... Warsh went further than many observers expected in agreeing that higher interest rates may be needed to curb inflation that is stuck above the central bank's 2% target." "Fed policymakers will meet on September 15-16." Reuters. President Donald Trump piled on the pressure when he said, "We should have the lowest rate of any country in the world...Lower the rate or I'll stop trading with countries with which we have a deficit." Reuters. That would push inflation higher and force the Fed to raise rates, possibly by a greater amount. On 2 September, "Bond prices continued to slide in Asia and Europe, pushing borrowing costs to multi-decade highs as the Middle East conflict drives up energy prices and layers concerns about inflation on top of worries about ballooning government debt." Reuters. "In the United States, 10-year interest rates sit around 4.7%, surging nearly half a percent this year," while, "Australia's government now has to offer investors more than 5% on its 10-year bond, which hit a 15-year high after a long period of low interest rates." "US national debt has grown to more than  $40 trillion," and so, "Funding debts of this size is pushing up interest rates worldwide." The Conversation. "With benchmark Japanese bond yields breaking through a three-decade-old barrier, higher returns are starting to tease capital home." Japan "is the biggest owner of US Treasuries and one of the most reliable buyers of sovereign debt worldwide." Reuters. Why should we Indians care about what is happening in the US and Japan? "As of August 18, the two-year Treasury yield stood at 3.76%, while the 10-year and 30-year yields were 4.71% and 5.28% respectively." India will be affected as, "Sustained higher US Treasury yields could make dollar-denominated assets more attractive relative to emerging-market investments, potentially putting  pressure on capital flows into India." "Higher global yields can increase the return investors demand from Indian bonds." And, "India remains exposed to movements in the dollar, commodity prices and global trade." BT. For years, "With Japanese interest rates close to zero, hedge funds and institutional investors borrowed cheaply in yen and invested in higher-yielding assets -- from US Treasuries and AI stocks to emerging-market equities." That is the yen carry trade. Although Japanese investors hold a small amount of Indian equities, Indian markets could still be affected as other foreign investors divert funds from India to safer markets. MC. The Reserve Bank of India (RBI) has taken preemptive action. "India attracted a much larger-than-expected $136.38 billion through special foreign-currency mobilisation schemes," as "Indian banks raised $127.23 through non-resident foreign currency deposits, with additional inflows coming through external commercial borrowings and overseas foreign-currency borrowings." "India's banking system liquidity surplus jumped to Rs 9.7 trillion ($102.76) as most banks have swapped their dollar inflows with the central bank." ET. This money does not come free. At 6.50% rate of interest (IDBI Bank) $127.23 billion will grow to $153.69 billion compounding for 3 years and to $174.32 billion in 5 years, which banks will have to repay. The RBI will have to pay a bill of about $10.6 billion for protecting banks from rupee depreciation. ET. The rupee has strengthened due to all this inflow of foreign exchange which could bring inflation down by making imports cheaper. That would allow the RBI not to increase interest rate and help the government to borrow cheaply. Foreign investors aren't fools. The RBI may be able to control interest rates, borrow capital to manage capital flows but it will not be able to control foreign exchange rate. wikipedia. It's impossible. The cost could be enormous. For us.

Still in sixth.

India's Real GDP, or GDP at Constant prices, grew at 7.8% to Rs 81.36 trillion in the first quarter (April-June) of FY 2026-27. Nominal GDP, or GDP at Current Prices, grew at 10.3% to Rs 88.27 trillion. pib. gov.in. Former Finance Secretary, Subhash Garg, said that this is because the government reduced last year's first-quarter GDP from Rs 86 trillion to Rs 80 trillion, which has raised the year-on-year rate of growth. He said the production at current prices remains fixed. So, where did Rs 6 trillion go? he asked. The Federal. "Govt strongly defended the sanctity of GDP data," saying "the revision was consistent with the new methodology. The base year has changed, the use of producer price index provides more granular information, and more data is available." TOI. "The base year is revised periodically to reflect structural shifts in the economy," to account for "expansion of renewable energy and digital services, alongside changes in consumption pattern and investment behavior." pib.gov.in. "On price adjustments, the government's April-June deflator was 2.3%, significantly less than retail inflation of more than 4% and wholesale inflation over 9%." Prof Raghuram Rajan asked "why the robust GDP growth figure is not showing up in stronger results for job creation, domestic investment and foreign portfolio inflows." Reuters. This government is not trusted because of what transpired right at the beginning, in 2015. "Immediately after the GDP series was released in early 2015 (with 2011-12 as its base year), economists and policymakers began questioning the accuracy of the numbers, as it seemed to contradict other economic indicators." "Around this time, the Niti Aayog got involved in reviewing the GDP methodology and in the preparation of a back-cast series." Niti Aayog "corrected" (decreased) the growth rate of the previous regime, wrote Pramit Bhattacharya. In 2019, "The only two non-government members of the National Statistical Commission, including its acting chief, have quit over 'disagreements' with the government on the release of jobs data and concerns about it being buried in election season." NDTV. JP Morgan chief economist Sajjid Chinoy said that the high rate of growth is because of an enormous fiscal stimulus. Direct tax rates were reduced in February last year, consumption taxes were cut in September and interest rates have come down by 1.5% over the last year. Exports have jumped 12% despite tariffs as the rupee has fallen by 15% against the dollar and global demand has been strong. BBC. "The UK has seen years of slow growth, although the economy expanded by 1.2% in the first six months of this year, according to official figures." BBC. The GDP of the UK was $4002.588 billion in 2025 while that of India was $3956.067 billion in 2025, according to the World Bank. If India's GDP has grown 7.8%, it should now be $4264.653 billion while a 1.2% growth should take the UK economy to $4050.63 billion. India should rise above the UK to fifth in ranking. But the IMF projects the UK economy at $4264.794 billion and the Indian economy at $4153.191 billion in 2026. wikipedia. Which means the IMF is projecting a 5% growth of Real GDP in dollar terms. The festive season started with Janmashtami, the birth of Lord Krishna, on 4 September. (wikipedia). Prices of sugar and onions have more than doubled. India Today. A valuable source of protein, "Egg prices have risen sharply across India over the past year," as "more maize is diverted to ethanol production, poultry farmers are having to compete for the same crop. Feed accounts for more than 70% of the cost of producing an egg." HT. Sugar cane is also a source of ethanol. Instead of this asinine celebration of some dubious statistical growth, the government should concentrate on policies that are good for the people. Not on single or double deflator. India is still in sixth position. That's real.    

Children demanding knowledge.

"Bengal chief minister Suvendu Adhikari set a target...to establish at least 1000 schools run by RSS's education wing Vidya Bharati in every district, municipality and panchayat within a year." "The website of Vidya Bharati Akhil Bharatiya Shiksha Sansthan states its vision is 'to develop a system of education which would help build a younger generation committed to Hindutva and infused with patriotic fervor'." TOI. How do the students of these schools perform in Board level exams, especially in science and math? "The RSS-affiliated Akhil Bharatiya Shaikshik Mahasangh (ABRSM) has opposed the Cockroach Janta Party's (CJP) campaign over the condition of government schools in Rajasthan, arguing that educational institutions should remain free of political activity." MC. "Authorities demolished a dilapidated government school building in Rajasthan's Rampura (Kanwarpura) village...after its poor condition was brought to light by the CJP." CJP members were attacked on their way to inspect the school. ET. So, the RSS thinks it is "politics" to draw attention to little children, including Hindus, attending classes in an unsafe building? "CJP's spokesperson Ashutosh Ranka...demanded the arrest of those involved in the alleged violence during the party workers' visit to a government school in Jaipur's Rampura," and "urged the government to focus on improving the condition of government schools across Rajasthan instead of 'wasting time on theatrics and violence'." ET. "Facing mounting heat from CJP's nationwide 'School Thik Karo (improve schools)' movement,...and upcoming local body elections, BJP's Bhajan Lal Sharma government has introduced a three-year, Rs 125 billion plan to revamp school infrastructure." ET. That is purely political and it remains to be seen whether the plan continues after the election. "Times of India (TOI) reporters visited government schools in 6 Rajasthan districts" and found "78 children, no building; classes held inside tin sheds" at Kota MBS Road, "Toilets but no water; 10 students, one teacher" at Jaipur Bhojyawas, "37 students under trees/hut" at Barmer Asad Nagar and "Building collapse caused 7 deaths in 2025; new building still awaited at Jhalawar Piplodi. In Goa, primary schools are closing due to falling enrollment of children and lack of teachers. In Bihar's Upgraded Middle School in Doiya village, Rohtas, "four classes and nearly 200 students share a single room." Two other rooms are occupied by a local resident, who keeps buffaloes in them, claiming the land belongs to him. In Chhattisgarh, over 1,000 girls schools have no separate toilets. In Uttarakhand, leaky roofs and dilapidated buildings are common. Only Keralam has "4,752 public schools in which every classroom is hi-tech, together accounting for 45,000 such rooms." Also, 150,000 trained teachers and 11,000 hi-tech labs. TOI. "A series of protests by school children over poor facilities, dubbed the 'Gen Alpha' movement, has set off alarm bells in Uttar Pradesh (UP), prompting the Yogi Adityanath government to direct senior officials to investigate all complaints and address them promptly." The Print. UP must hold elections to its Assembly in February/March 2027. wikipedia. Lack of proper school education will persist throughout life. "India is home to more than half of the world's Global Capability Centers (GCC) - a sector generating $100 billion in revenue, with over 2,100 centers employing 2.3 million professionals directly." However, "India produces 1.5 million engineering graduates every year, but only 25% to 30% are considered job-ready for GCCs and capable of contributing from day one." ET. While children are demanding good education, Bengal chief minister wants 1,000 schools which will teach "Hindutva" and "patriotic fervor", a kind of Hindu madrassas. Children are demanding education. Which means knowledge. Not brainwashing.     

How to Trump others.

 "Iran and the US have traded strikes after American forces attacked two rocket launchers on Larak Island in the Strait of Hormuz." "US Central Command (Centcom) said it took 'limited, precise action' after observing Iran preparing to 'launch rockets and deploy sea mines in the Strait of Hormuz'. "Iran said it had struck US bases in Jordan in response," and "targeted an air base in the UAE with drones." BBC. "For the first time on record, Iran has gone seven weeks without shipping meaningful crude exports through the Strait of Hormuz." "Unlike previous sanctions campaign,...the current blockade has stopped fresh crude cargoes reaching China," and, "As a result, Iran can only sell crude to China from floating storage in Asia, which it cannot replenish as crude accumulates aboard tankers inside the Strait." Reuters. The origin of the word 'Hormuz' could be from the local Persian word Hur-Mogh (Place of Dates), or from a Zoroastrian God Hormoz (Ahura Mazda) or it could have been named after Ifra Hormizd, the mother of King Shapur of Persia. wikipedia. Since Iran's claim on the Strait derives from its Persian name, President Donald Trump has a brilliant solution to eliminate Iran's claim once and for all. "Now that we have it under USA control, should we change the name Hormuz Strait to TRUMP STRAIT?" Trump said on his Truth Social network. Iran trumped. "Ever since the (trade) talks collapsed on Aug. 21, Canadian and American officials have been blaming each other for making too many last minute requests." "New 50% tariffs went into force on Aug. 22, targeting $20 billion in import from Canada," while "Canada hit back with countertariffs, including new duties on American steel and aluminium." Politico. Following the collapse of the talks, on 27 August, Trump proclaimed by Executive Order 14422, "The United States is the greatest protector of the Great Lakes, including the body of water currently known as Lake Ontario." "In recognition of this flourishing economic resource and its critical importance to our Nation's economy and its people, I am directing that the Lake officially be renamed as Lake America." The White House. On 1 September, "Apple changed the name of Lake Ontario to 'Lake America' on the web version of its Apple Maps," which "followed a decision by Alphabet to change the name of the lake on its Google Maps for US users." Reuters. In retaliation, "Ontario Premier Doug Ford has hit back at Donald Trump by installing a large sign on Canada's shoreline with the message: 'Lake Ontario. Now and Always." This is diplomacy at its highest level. The G20 Finance Ministers' summit was hosted by the United States at Asheville, North Carolina, from 29 August to 1 September. Enlace Latino NC. "It was a summit of squabbling. The proceedings had barely begun when Treasury Secretary Scott Bessent mocked Canada's military, dismissing it with a reference to a decommissioned amusement park ride." WSJ. That was unfair. It is not Canada's fault that it has the safest surrounding  in the world, with the Atlantic to the East, the Pacific to the West, Alaska to the Northwest, Greenland to the Northeast and  the US to the South. Britannica. "Trump has said he is seeking 'immediate negotiations' to acquire Greenland for national security reasons - and insisted he 'won't use force'." BBC. Once that happens, Canada will be even safer - from Viking attacks.  Yesterday, "the US Mint launched the $1 with a portrait of Trump alongside the words 'Liberty' and 'In God We Trust', to celebrate America's 250th anniversary. The Mint said the coins, which are being marketed as a collectible, were not being put in circulation for daily use." BBC. Now Iranians can collect coins as they picnic beside Trump Strait, while Canadians can do the same by Lake America. How to Trump others. For a harmonious world.         

Reduced to zero

"Cockroach Janta Party...withdrew its call for a march on 5 September after Supreme Court, on the Centre's request, quashed all FIRs registered across the country against students who participated in the NEET (National Eligibility cum Entrance Test)." The government gave three assurances: the Centre would not pursue FIRs registered between July 20 and July 25, no fresh FIRs would be registered in connection with the matter and the government would pay compensation to students who died by suicide allegedly in connection with NEET paper leak. TOI. FIR, or the First Information Report, is a document prepared by the police to record information about a cognizable offence. wikipedia. Indian police, controlled by politicians, registered FIRs against unarmed students but not against the use of lethal weapons by the fascist state. The Delhi Police was forced to register an "FIR in the case of a 19-year-old student protester who suffered pellet-gun injuries during the 20 July march on Parliament as Rahul Gandhi, accompanied by the victim, Sahil Lochab, staged a sit-in outside a Delhi Police station, refusing to budge until an FIR is filed in the case." NDTV. And yet Noida Police filed a 'Zero FIR' against a minor girl who apparently used insulting language against Prime Minister Narendra Modi. "A zero FIR is one recorded at a station that has no local jurisdiction and then transferred onward, in this case, to Delhi." "The sections invoked were 352, 353(1) and 356(1) of Bharatiya Nyay Sanhita, dealing with insult, public mischief and defamation respectively." "All of them descend from Macaulay's Penal Code enacted in 1860," wrote Saurav Gupta 

and Aditya Prasanna Bhattacharya. The Bharatiya Nyay Sanhita was enacted by this Bharatiya Janata Party (BJP) government in 2023. wikipedia. Bharatiya means 'belonging to Bharat' or the Republic of India. Wiktionary. Ironic that the party which claims to be for the Indian Republic is using the draconian colonial Indian Penal Code (IPC), drafted by Thomas Babington Macaulay (wikipedia) to force allegiance to the British monarch, to oppress independent Indians. The 15-year-old girl against whom the coercive Zero FIR was registered recorded a video in which she said, "Modiji, you have turned my life into hell. I am unable to leave my home and have had to hide my face wherever I go." The Wire. A 75-year-old man has let loose his attack dogs on a child. How vindictive and small-minded can you get? In his Independence Day address from the ramparts of the Red Fort in Delhi, Mr Modi said, "We have succeeded in getting rid of armed Naxals in the jungles, but 'dimagi Naxals' (intellectual Naxals) are looking for opportunities to create violence, unrest..." NDTV. "The least we expect from an elected premier in a democracy, is that he is loyal to his people, that he protects them and respects them," "But from the beginning of his long tenure PM Modi and his speech writers have concentrated on slighting and even abusing citizens who raise their voices against specific policies or inaction - Khan Market Gang. Tukde Tukde Gang, anit-nationals and so on," wrote Neera Chandhoke. "It will cost you very dearly," warned Union Minister Kiran Rijiju to "protesters and Khalistani supporters who put their feet on the Indian national flag and tore it outside New York Madison Square Garden,...when people gathered there to hear RSS chief Mohan Bhagwat's address." NDTV. He doesn't know that "The US Supreme Court has ruled that burning the American flag can be protected under the First Amendment when it is used as a form of political expression." Just Criminal Law. "Sticks and stones may break my bones, But words will never hurt me," is a children's rhyme. In India, a 75-year old man is using police batons and pellet guns against slogans from children. Zero FIR, zero respect, zero dignity. How embarrassing. For us.       

Indians everywhere in the world.

"From Europe to Japan, India is building a wider network of agreements and arrangements to facilitate the movement of its workers abroad. The prize for India is just not more jobs for its workforce, but potentially more dollars flowing home through remittances. The opportunity is growing as ageing populations and shrinking work forces leave countries across the world facing shortages of skilled workers." ET. Indians are cheap - sell them for dollars. Yesterday, one Indian was among 12 killed by a massive aerial assault on Ukraine by Russia. TOI. "227 Indian nationals have been recruited into the Russian armed forces, of whom 139 have been discharged while 51 have passed away, Foreign Secretary Vikram Misri said. NDTV. That leaves 37 Indians unaccounted for, probably still serving in the Russian army because they can't find jobs back home. "Indians accounted for seven of the 16 seafarers - nearly 44% - killed in attacks on commercial vessels during the Strait of Hormuz crisis between 1 March and 14 July 2026." When Indians are not being killed, "In 2025, Indians constituted 18% of all seafarers abandoned by shipowners worldwide, making them the worst-affected nationality for the second consecutive year." NDTV. In June, "An Indian man killed in an Iranian strike at Kuwait airport was coming to his home in Madhya Pradesh's Ujjain to attend his niece's wedding." NDTV. It seems that if there is an explosion in any part of the world Indians will definitely be among the casualties. Indians are the cheapest. It may be because the Indian state does not recognize Indians as citizens. In July, a Division Bench of Justice Debangshu Basak and Justice Ajay Kumar Gupta of the Calcutta High Court "held that documents such as Aadhaar cards, voter identity cards, PAN cards, bank records and ancestral land records, though important indicators of identity and residence, are not conclusive proof of citizenship." CJP. Even a passport, that requests other countries to "allow the bearer to pass freely without let or hindrance and to afford him or her every assistance and protection if he or she may stand in need," does not prove citizenship. "Amid growing public confusion over the use of passports as proof of citizenship and eligibility for government benefits, the Ministry of External Affairs (MEA) has clarified that an Indian passport is strictly a travel document and should not be treated as conclusive proof of citizenship." NDTV. Last month, "Former Indian diplomat Navdeep Singh Suri questioned the Election Commission of India's (ECI) Special Intensive Revision (SIR) process in Punjab, saying he was made to establish his Indian citizenship despite having represented the country abroad. Suri served as India's ambassador to the UAE and Egypt and high commissioner to Australia." HT. Why should any country accept our ambassador as the representative of the government (wikipedia) and take him seriously if he is not a citizen of the country he represents? In August, "amicus curiae and a senior advocate Vijay Hansaria has informed the Supreme Court that there are serious criminal cases against chief ministers of 14 of the 28 states, a list topped by Telangana's A Revanth Reddy who faces 89 cases." TOI. And, According to a report submitted to the Surpreme Court by senior advocate Vijay Hansaria, at present 4,192 cases are pending against incumbent and former parliamentarians and legislators, while 519 of these cases are pending for more than a decade." The Wire. Criminals ruling India. No one is a citizen. So, sell people for dollars. Very cheap. 

Exemplary by design.

"The Indian economy grew at 7.8% in the first quarter (April-June 2026)of the current fiscal year braving what is described as the largest oil shock in the history of capitalism." "March quarter growth now stands at 8.6% compared to 7.8% according to the data released by the NSO (National Statistical Office) in June." "India's exemplary GDP growth of 7.8% during Q1 of FY 2026-27 is a herculean feat," exulted Prime Minister Narendra Modi. HT. Calling it the "largest oil shock in history" is an exaggeration. In 1974, the price of crude jumped from $24 to $56 per barrel because of the Arab oil embargo in 1973. In 1979, oil went from $56 to over $125 because of the Iran revolution and in 2008, the price of crude jumped from $118 to over $165 per barrel and, coinciding with the subprime crisis in the US, led to the Great Recession. (Investopedia). US consumer price inflation rose to 12.3% in November 1974, came down to a low of 4.9% by October 1976 and then soared to 14.8% in March 1980. US Inflation Calculator. In fact, except for two or three months in early 2026, when the price of India's import basket of crude oil briefly spiked above $150, the price has stayed comfortably below $100 per barrel. India Macro Indicators. As always, things are not as we are told. "As per a report by Bernstein, company earnings, domestic consumption, and asset valuation are increasingly influenced by regulatory interventions, tax incentives and substantial government transfers rather than underlying productivity gains." "Since financial year 2023, the government allocated over Rs 287 billion to various manufacturing industries" under the Productivity Linked Incentive (PLI) schemes, and "Rural spending resilience persists largely due to government direct transfers rather than productivity gains of farm income expansion." ET. If the economy is sizzling why is the rupee so weak? In July the Reserve Bank of India (RBI) sold $7 billion to defend the rupee. "The RBI intervened across both onshore and offshore markets as the currency approached the record low." ET. The first vulnerability is geopolitical. "Any prolonged disruption around the Strait of Hormuz would push up crude oil prices." The second vulnerability is that foreign portfolio investors (FPI) pulled out roughly $28 billion from Indian equities "despite bringing in a net $2.1 billion in July," wrote Prof Saumitra Bhaduri. "India's 10-year government bond yield is around 6.87%, while the US 10-year Treasury yield is in the 4.6-4.7% range, leaving a spread of roughly 2.1-2.3 percentage points, or 210-230 basis points. The narrowing matters because the yield spread is one of the factors that overseas investors consider when deciding whether Indian bonds offer enough compensation for the currency and other risks involved." MC. According to the RBI, "External debt at the close of fiscal 2025-26 stood at $762.8 billion, an increase of $26.3 billion over the level recorded at the end of 2024-25." It was up by 1% to 20.8% of GDP. However, the higher value of the dollar against the rupee is worth $24.6 billion, so effectively the debt increase was $51 billion. Mint. "In 2025-26, India recorded $334 billion trade deficit. Of this, 120 billion came from petroleum products and $214 billion, nearly double, from non-petroleum products. Electronics trade deficit stood at nearly $69 billion." Mint. For comparison, Vietnam's trade surplus with the US in the first six months of the year stood at $114 billion, ahead of China, Mexico and Taiwan. ET. And, despite "herculean growth" India remains the sixth largest economy in the world. worldometers. The brokerage firm Systematix estimates "a new average annual depreciation path of 6.5% of the currency." "Without aggressive RBI intervention, the Indian currency would have crossed the 100-per-dollar mark." ET. So, in dollar terms the GDP growth is a minuscule 1.3% (7.8-6.5). It's the currency that determines our rank. How long can the RBI support it? Before it runs out. Of cash.   

Still most popular.

"Prime Minister Narendra Modi introduced Saptadhara from the Red Fort on 15 August. This concept includes seven streams of national strength that help India achieve its Viksit Bharat goal." Yoga, Ayurveda, our spiritual centers and festivals, Indian literature, music, dance and cinema, cuisine, handicraft and handlooms, democracy, scientific progress, digital systems, space program and the global diaspora "further enhance its global reputation" and create millions of jobs. TIE. That is a total of 16 streams. On 21 August, "the saffron flag-bearing men climbed Gate 4 of Jadavpur University in Kolkata and used its lotus-ringed emblem as a foothold," "The emblem, designed by Nandalal Bose, shows three flames surrounded by a blooming lotus." Bose was one of Bengal's most renowned artists. The irony was: "Even a lotus was not safe from the foot soldiers of lotus politics." The Wire. Watch goons rioting while eating butter chicken, whose origins are being fiercely debated at Delhi High Court (Reuters), should be irresistible to tourists. "Modi talked of complete manufacturing value chains, AI, quantum computing, robotics, 6G, high-speed rail, inland waterways, drones, hypersonic weapons, green manufacturing, fisheries, tourism and yoga." "That is precisely the problem. Saptadhara is a wishlist masquerading as strategy," wrote Swaminathan SA Aiyar. Yesterday, "PM Modi was conferred Uzbekistan's highest state honor, the Order of 'Oliy Darajali Dustlik', by President Shavkat Mirziyoyev during his two-day state visit to the central Asian country." TOI. The BJP published a list of 35 international honors collected by Mr Modi. ET. While we may not understand the meanings of many of the awards, Slovakia's 'Order of the White Double Cross, First Class' is easy to comprehend. Last week, "India had just one request ahead of PM Modi and US President Donald Trump's meeting two months ago - that the press not be given an opportunity to ask them questions, said Washington's ambassador Sergio Sergio Gor." The Wire. Trump forgot and held a press conference for 45 minutes. "Everything was on the table". HT. Not easy to sit silently for 45 minutes when, just yesterday, "In the 137th episode of Mann Ki Baat (dialogue of the mind), PM Modi highlighted grassroots initiative and individuals creating change through technology, social action, entrepreneurship and community participation." TOI. Thankfully these individuals are not "dimagi Naxals (ideological Naxals)", who are embedded in the power corridors and need to be "identified and isolated" so the youth of the country can be brought together for a developed India. NDTV. Naxals are Marxist insurrectionists, named after Naxalbari in West Bengal, who waged an armed struggle against the Indian state since 1967. wikipedia.  "The Cockroach Janta Party (CJP) took to social media to slam the Karnataka BJP over a post targeting 'Dimagi Naxals',"..."warning that the post amounted to a call for 'mass genocide'." The Karnataka BJP created a meme featuring a scene from the movie KGF Chapter 2, in which it repurposed a scene to "depict the shooters as its different state units, while portraying their rivals as 'Dimagi Naxals'." CJP's Saurav Das wrote on X, "The ruling party is threatening to shoot the country's youngsters dead. Pure evil. They seem to have lost the plot." HT. Mr Modi remains the nations choice for prime minister for 48.7% of those asked in the Mood of  the Nation Survey. India Today. Still most popular for prime minister. And 35 awards. Unbeatable?      

Three years could be a long time.

"The Reserve Bank of India (RBI) plans to buy back government securities of Rs 300 billion on 3 September, with all securities listed in the auction maturing in FY27. The aim of the buyback is likely to reduce the redemption burden on the government in the next fiscal year. Securities worth Rs 6 trillion are scheduled to mature." ET. The government sells bonds to fund its fiscal deficit, which is "the difference between what a government spends and what it collects in revenue, often leading to borrowing to cover the shortfall if spending is greater." (Investopedia). As on 28 February 2026 the RBI held Rs 21.34 trillion of government paper (including treasury bills), an increase of Rs 5.76 trillion over Rs 15.58 trillion in March 2015. "An increase of this scale has never been witnessed." "RBI's holdings of government paper have increased: this is tantamount to deficit monetization. But income on securities adds to its surplus, which is transferred to the government," wrote Madan Sabnavis. Deficit monetization is when a central bank creates new money to finance government spending instead of by selling bonds to private investors or raising taxes. "It is prohibited in many countries, because it is considered dangerous due to the risk of creating runaway inflation." wikipedia. In May, the RBI "transferred a record Rs 2.87 trillion ($30.1 billion) as dividend to the government, compared with last year's Rs 2.69 trillion." "The annual report showed interest income rose 11.81% to Rs 2.36 trillion in the financial year ended March. Interest earned on rupee bonds climbed 37.66% to Rs 1.18 trillion." The RBI also gains from selling dollars at a rate higher than the buying rate and transfers those gains to the government. The Print. "India's central bank sold about $7 billion to defend the rupee last Friday (28 August), in what was one of its largest direct interventions in months, according to people familiar with the matter," ET. So, the RBI prints money to buy government bonds, which is like transferring sacks-full of new notes to the government, and then transfers the interest from those bonds to the government as well. This increase in liquidity results in a drop in the value of the rupee, so the RBI sells dollars to support the rupee, and transfers apparent gains from the difference in sale/purchase values to the government. For us ordinary citizens, not as brilliant as RBI officials, this seems like magic. There is only a teeny weeny problem: the RBI can print rupee notes but not dollars. "India's foreign exchange reserves climbed to a record high of $729.33 billion in the week to 21 August." "In June, India unveiled a raft of measures to boost dollar inflows, including discounted hedging facilities for overseas borrowings by state-run firms and banks, and a free-of-cost hedging facility for banks to raise overseas Fx deposits." Reuters. Banks are paying much higher rates of interest on Foreign Currency Non-Resident Bank (FCNR B) deposits from expatriate Indians, with HDFC Bank paying 6.25% on 5 year USD deposits, while IDFC First Bank is offering 6.75% for 5 years. The RBI is buying these dollars from banks and will repay them at the same exchange rate at the end of 5 years, thus absorbing the full cost of rupee depreciation. Would it mean more printing of rupee notes? "In the early 1950s, the government started issuing Treasury bills to the central bank for funds to bridge its deficit." This continued for four decades until, "As a part of the 1991 reforms, the government and RBI decided to stop this financing arrangements." "In 1997, the government and RBI signed an agreement that stopped this practice of deficit financing." The India Forum. Borrowing from the IMF would have been cheaper but electoral suicide. So they are borrowing at huge costs because five years will take repayment to beyond the next general election due in April 2029 (wikipedia). Till then we are back to the 1950s. There are still three years to 2029. They think they are being clever. Perhaps, too clever.     

Poor Iranians.

"President Donald Trump arrives at an awkward moment for his presidency on Friday as the US-Israel war against Iran reaches the six-month mark," "And this week his administration said it would turn its focus to increasing economic pressure - rather than military action - to try to finish off Iran." ABC News. Trump must surely have consulted with armed forces generals before declaring war against Iran and it seems that US generals, lulled by their dependence on big bombs, have little clue about reading their enemy and devising strategy accordingly. Not only are they incapable of fighting a war, they could not even withdraw from Afghanistan in an orderly fashion (wikipedia) after then President Joe Biden announced on 14 April 2021 that a drawdown of all 2,500 US troops would begin on 1 May and conclude on 11 September 2021, the 20th anniversary of the war (war.gov). Such was the chaotic incompetence that, "Approximately $7 billion of military equipment the US transferred to the Afghan government over the course of 16 years was left behind in Afghanistan after the US completed its withdrawal from the country in August." "It included aircraft, air-to ground munitions, military vehicles and other materials, according to the DoD report." CNN. In Vietnam the US lost despite the death of "as many as 2 million civilians on both sides and some 1.1 million North Vietnamese and Vietcong fighters." Britannica. On the other side, Iran's Ayatollahs and the Islamic Revolutionary Guards Corps (IRGC) commanders probably thought that the midterm elections on 3 November 2026, with all 435 seats in the House of Representatives and 35 seats in the Senate up for grabs (wikipedia) will put unbearable pressure on Trump to accept their terms for a deal. Yesterday, "Iran is preparing a list of conditions for reopening the Strait of Hormuz," as "A Guards spokesperson said Iran would not allow the Strait to reopen unless Washington lifted what Tehran describes as a blockade of Iranian ports while also paying compensation and removing sanctions." Reuters. In short, total capitulation by the US, even as, "Iran condemned the United States' new economic sanctions yesterday as 'state terrorism' while its Supreme Leader said he is banning acts that could harm 'social cohesion' amid concern that more financial pain could could spark unrest at home." Reuters. Even before the new sanctions, "The rial dropped to 2.02 million to the US dollar as trading opened on currency markets. Iran's official Central Bank rate stood at around 1.5 million rial to the dollar, but the market rate is what most Iranians pay." BNN Bloomberg. We Indians may think that the Indian rupee is collapsing, as the rate of exchange has dropped from 91.07 on 2 March to 95.47 on 28 August 2026 (exchangerates.org.uk) but Rs 100 now buys 2.1 million rials. A fall in the currency of such magnitude must result in skyrocketing inflation so Rs 100 now buys "2 kg of tomatoes, around a quarter of a kilogram of chicken and less than half a liter of cooking oil." Mint. "The Iran war's redrawing of the global trade map is forcing Gulf nations to retool their investment playbook, ploughing capital into infrastructure," as "Gulf governments are looking at ways to create permanent, integrated solutions to get round the Strait of Hormuz." Reuters. Once the alternative routes are in place Iran will permanently lose its leverage over the Strait but will still be vulnerable to blockade by the Americans. It cannot use a nuclear weapon to force Gulf states to use the Strait again or against a US naval blockade. The regime is terrified of losing power because they will have to face retribution for their crimes. Will there be a famine with deaths due to starvation? Pakistan is complaining to the world about India cutting off Indus River water (Dawn) but what use are its nuclear weapons? Iranians will be dying of starvation for something they cannot use. Poor Iranians. How stupid?