Electronic Lord Amarnath darshan

Better get used to it.

It happens in China too ...

BEIJING: Rioters in southwestern China torched government buildings and cars after anger over a probe into a school girl's death exploded into violent street protests, state press said on Sunday. [...] Xinhua said the protesters took to the streets due to mounting concern over a police investigation into the alleged murder of the 15-year-old girl whose family said she had also been raped. Internet blogs said the family had accused the son of a local official of both crimes, and were outraged at the findings of the police probe which listed suicide as the cause of death. [link]

In India, the press is notoriously shy in reporting extra curricular activities of political scions.

[Update] The girl's uncle died in police custody.

Stories - update

The chapter 'Life without religion' has Left religious leaders fuming in Kerala. A teacher pats a student who wants to join the school without mentioning his religion or caste in the application form. He is born to a Hindu father and Muslim mother. [link] [emphasis added]

This is a paragraph quoted verbatim from an NDTV story mentioned in a previous post. Now, The Outlook reports:

Take this lesson titled Mathamillaatha Jeevan (Jeevan, the casteless):

The headmaster asked the parents, who had come with their ward, to sit in the chairs before him, and began to fill the application form.

"What’s your name, son?"

"Jeevan"

"Good. Nice name. Father’s name?"

"Anvar Rashid."

"Mother’s name?"

"Lakshmi Devi."

The headmaster raised his head, looked at the parents and asked:

"Which religion should we write?"

"None. Write there is no religion."

"Caste?"

"The same."

The headmaster leaned back in his chair and asked a little gravely:

"What if he feels the need for a religion when he grows up?"

"Let him choose his religion when he feels so."

This is the passage that has been singled out by the Congress-led United Democratic Front (UDF), the Church and Muslim organisations. They are demanding immediate withdrawal of the Class VII social studies book, being taught under the Kerala board, from which this passage has been taken. [emphasis added]

Notice the discrepancy between the two versions? When we read the NDTV version, it did seem odd.

Also note that the Outlook version skips out one religion.

An old soldier fades away ....

"Profiling is based on dress and behaviour ..."

The Naga Lawyers’ Guild, Delhi, has served a legal notice to the management of a lounge bar in GK-1 for allegedly refusing entry to a Naga woman photographer because she did not have the "right profile". [...] Bar owner Kashif Farooq, however, said he was yet to receive any legal notice. He denied the charges against the management saying, "Profiling is based on dress and behaviour and not region". [...] The photographer was to meet two friends - a South Indian publisher and a German employee of a development bank - at Urban Pind. "I was stopped at the gate because I did not have a good profile," she said. [link]

Also read CNN-IBN coverage of the same incident. Notice anything?

Sir Salman Rushdie

Finally.

Stories

Before we get to the stories, a random observation - it's been a long time since we saw lead stories on CNN-IBN with pictures of hungry kids. Any ideas why?

Anyway.

Something happened in Kerala. Some headlines:

Zee News, India : Kerala textbook row: Minister refutes allegations of being anti ...
NDTV.com: Protest against school textbook in Kerala
Sify: Religious groups ask Kerala to withdraw textbook
Thaindian.com: Muslim students burn school textbook copies in Kerala
IBNLive.com: Left advocates atheism, allege Kerala religious groups
Khaleej Times: Several injured in protests against Kerala textbook
Religious Intelligence Ltd, UK: Indian Christians protest ‘Marxistisation’ of school textbook
AsiaNews.it, Italy: Muslims and secular parties against pro-atheism textbook
Press Trust of India: Congress wants class VII textbook to be withdrawn in Kerala
The Statesman: Textbook wars
Times of India: Kerala: Alleged Youth Congress activists attack school
Newindpress: Five injured as KSU march turns violent

In particular:

The TOI version resorts to factual reporting, mentions only specific religious groups and identifies Congress. Mentions attack and clearly identifies the perps. although adding "alleged" to the headline dilutes the effect.

The CNN-IBN version has no mention of attack, implicates all religious groups, attempts at editorializing a news item (i.e. "students have taken cues from religious groups" - oh the poor impressionable babies, "Left Government needs to worry" etc.).

The NDTV version mentions violence deep inside the story without referring to the specifics ("Meanwhile, the youth and students outfits of opposition parties continued their protests across the state, which turned violent in some places."), long winded article, attempt at editorializing.

Ancient History: new take

Professor Upinder Singh, longtime professor of history with several books and research papers to her credit, is about to publish a new book on India's ancient history. Prof. Singh happens to be PM Manmohan Singh's daughter.

Singh's 704-page A History of Ancient and Early Medieval India: From the Stone Age to the 12th Century is targeted at graduate and post-graduate students and will be released on July 18.

With her keen interest in archaeology, Singh seeks to challenge Marxist historians like Romila Thapar, and provides, for those "writing the new NCERT school books," more than one interpretation of ancient Indian history, and encouraging them to look for more.

Elaborating on her divergences with the Marxist school which have dominated the campuses since the 70s, Singh stressed the need for students of ancient Indian history to pay attention also to cultural aspects art, literature religion and philosophy. "Religious doctrines, I feel, are important for students to understand things in context," she said.

[...]

Explaining the purpose in the preface, she said, "It is necessary to expose them to the complex details and textures of history... unresolved issues... have been presented as such, rather than conveying a false sense of certainty. Where there are debates, the different perspectives have been presented, along with my own assessment of which arguments are convincing and which ones are not." [link]

Sounds intriguing.

India after Gandhi - Redux

For those who haven't had a chance to read Ramachandra Guha's India after Gandhi, here is a great opportunity to sample the essential ideas. Guha's long article in The Outlook [link via Confused] captures much of the flavor of the book.

What is spread thinly over an almost 800-page long book is presented in highly concentrated doses in the article, which, although quite long for an op/ed piece, doesn't quite mask the toxic fumes coming out of the author's brain.

Here is a sample:

The real hate figure for the Sangh parivar is the Muslim. But, as my late teacher, the historian Dharma Kumar, once pointed out, they actually secretly admire and even wish to emulate their historic enemies. What the BJP wanted for India, she said, was to construct "an Islamic State—for Hindus". In medieval Muslim states, there was a category known as dhimmi, consisting of Jews and Christians who, as people of the book, were treated somewhat more leniently than the kaffirs, the unbelievers.The dhimmi were barred from the top positions in the state and in the army. However, so long as they paid their taxes and did not challenge the ruler, they could live in peace and security. The kaffirs, on the other hand, were seen always and invariably as adversaries. In the same manner, if the RSS were to get its way, the Muslims and Christians in modern India would live undisturbed, so long as they acknowledged their theological and political inferiority to the dominant Hindus. But if they sought equal rights of citizenship, they would be punished as the kaffirs had once been.

It is funny how the embedded irony of the above passage completely eludes Guha. Can you really fault a group of people for being paranoiac about a faith which designates the group least favorable and whose central tenet practically mandates its annihilation?

It also appears that Guha has gone centrist with a vengeance.

The political history of the modern world can be written in terms of a three-way contest. On the left, there are varieties of socialist or communist extremism. On the right, there are varieties of national or religious fanaticism. Placed in the middle are the forces of liberal, constitutional democracy. When the centre is fragile, as in Russia in 1917 or in Germany in 1933, one or the other form of extremism will triumph. When the centre is resolute, as in India in 1948, liberal democracy can consolidate itself.

Yet he provides no yardstick, no objective measure for how to get to the exact centrist position. In practical terms the only people who are allowed to walk the middle of the road are the leftists, or Gujjars, to take a more recent example.

Guha remains completely enamored by the process which created India. He just can't stop talking about how difficult it was to create a unified nation out of a multitude of nation states, how logistically challenging was our first general elections etc. This is merely ex post admiration for an image we have grown comfortable to see. Just as an example, what if the partition didn't happen?

The other major theme consists of a nostalgic reverence for the "Nehru" era, which according to this retro-liberal was the most perfect period in India's modern history. There were patriots galore, as were tireless workers who selflessly toiled hard to create a great country (only to be undone later by - guess who?). Guha laments:

Indians less than 70 years of age—that is to say, 98 Indians out of 100—are insufficiently aware of, and possibly insufficiently grateful to, the great democracts and patriots who, back in the late 1940s, successfully stood their ground against the challenges of revolutionary communism and religious fundamentalism.

The logical fallacy of this almost jumps out of that passage. What happened earlier must have an indelible effect on what came next. If the previous state was so perfect and the previous actors so noble, how come the present day reality is so fucked up?

Guha also laments how we don't read the constitution. This can't be naivete, so we presume this is merely elitism. These days we are better off betting on the future state of the Schroedinger's cat than trying to get a fix on what the constitution says at any given moment.

To follow the Naxalites is to plunge India into decades of civil war; to follow the Hindu right is to persecute and demonise large numbers of one’s own countrymen; to follow the market fundamentalists is to intensify the divisions between the consuming and the surviving classes (and to destroy the global environment in the process). Rather than nurture or act upon these utopian fantasies, the Indian patriot must focus instead on the tasks of gradual and piecemeal reform. We need to repair, one by one, the institutions that have safeguarded our unity amidst diversity, and to forge, also one by one, the new institutions that can help us meet the fresh challenges of the 21st century. It will be hard, patient, slow work—that is to say, the only kind of work that is ever worth it.

Essentially what blowhard secularists like Guha mean by the centrist position is merely this: why derail the gravy train while the going is good? The "gradual and piecemeal reform", "repair, one by one" etc. are mere code words for status quo. Guha doesn't even register a feeble show of protest against the various constitutional amendments, which has left the book beyond recognition from the time he considers the golden age of India. Yet he talks about repairing the institutions. This is a dead giveaway.

Here comes double digit inflation

(Please click image for a larger version)

It is our turn to say, we told you so! Actually we didn't expect things to get this bad so soon.

Meanwhile the FM has made some interesting statements reacting to the BJP resolution on price rise. Some of his points are well taken. The statement is available on the front page of the Finance Ministry Website, scroll down to the entry dated 2008.06.06.

In 2003-04, the NDA's last year, the economy registered a growth rate of 8.5 per cent. However, this was a statistical aberration and entirely due to the base effect of the low growth rate of 3.8 per cent in the previous year. The agriculture sector appeared to bounce to a growth rate of 10.0 per cent in 2003-04, but this, again, was only a statistical quirk because the previous year had recorded a negative growth rate of 7.2 per cent! Not surprisingly, when the NDA claimed in 2003-04 that India was “shining”, the people voted them out.

Notice the high dramatic tone. Arguably the Finance Ministry website is being used as the FM's personal blog and a political vehicle.

The FM is referring to this document [pdf] in the above statement. Sure enough, the agriculture, forestry and fisheries had a negative growth of -7.2% in 2002-03. From this low base, in 2003-04, NDA Government's last year, the same sector had a 10% growth. But here is the kicker, in 2004-05 (UPA's first year of this term), the sector achieved a 0% growth. Zero, as in zilch, nada. So, what magic did the UPA perform?

The current inflation figures are for the period just after the fuel price hike took effect.

Notwithstanding the many successes under the UPA Government, we admit that inflation is a problem. It was a problem under the BJP/NDA Government too. In 2000-01, in 48 out of 52 weeks, the WPI was over 6 per cent; in 22 of those weeks, it was over 7 per cent; and in 12 of those weeks, it was over 8 per cent. These are facts that cannot be wished away. During the entire six year rule of the BJP/NDA, crude oil prices per barrel ranged from US$13 to US$36. How I wish that the UPA Government had enjoyed such benign crude oil prices? We have not been fortunate.

The FM pins all the blame on oil prices alone. It is true that oil and commodity prices gravitated upwards during the past two years. However, that alone can not account for double digit inflation. Even before the fuel price hike inflation was running at 8% or above. The fuel price hike was supposed to add 50 - 70 basis points by itself, since fuel has about 5% weight in the WPI. What explains this sudden unexplained jump? This proves that there are strong inflationary forces lurking underneath. The blue line in the above graph is the inflation over a week earlier, annualized. The latest figures show that the WPI jumped by almost 100% in annualized terms, over the previous reporting period.

The FM laments high oil prices while boasting strong GDP growth. The NDA rule coincided with a general slowdown in the world economy and a US recession. After the recession from 2000-01, it took nearly two years for the US economy to get back into track. The stock market recovered late 2003 and then started peaking until the housing and credit bubble burst in 2007.

In other words, if the NDA regime had the advantage of relatively benign oil and commodity prices, it suffered due to global economic slowdown and financial turmoils. Both these factors were reversed during the UPA regime. We had a liquidity glut and enormous inflows. At the same time commodity prices went up.

The less said about the FM's assertions about fiscal discipline, the better. The UPA is all set to end this term with an avalanche of spending. No Government will be able to roll back the NREGS or the farmer loan waiver schemes without political backlash. The UPA has started a dangerous game of competitive largesses.

Early Elections?

All signs are pointing towards an early General Election. Several months ago it seemed almost certain but various issues cropped up and the momentum was lost.

If you recall, last time also there were rumors of the PM resigning over the N-Deal. But Congress quickly squashed those rumors. The FM claimed that the rumors were responsible for the stock market crash.

CNN-IBN is reporting that the PM has threatened to resign if the left does not cooperate over the N-Deal:

Prime Minister Manmohan Singh has indicated that he would resign if the Indo-US Civil Nuclear Agreement doesn't go through. Senior government sources have told CNN-IBN that the PM has communicated his desire to resign to Congress President Sonia Gandhi earlier in the week. It is a move that has only intensified after his confrontation with the Left over the nuclear deal. [link]

That the PM was always serious about the N-Deal was beyond any doubts (except that now that a "liberal" Government rules Australia, pretty much half of world's Uranium is out of bounds).
But it was amply clear that if the Government were to fall over the N-Deal, it had to have the support of "high command".

It looks like the "high command" is finally ready to relent.

There is not much upside for Congress to hang around any longer than this. The major populist programs have already been implemented (OBC quotas, NREGS, loan waiver). The loan waiver is being fast-tracked to end of June. On the other hand, realistically, inflation is not going to abate anytime soon, nor is oil prices.

More significantly, waiting for the upcoming state elections may not add much value, given that there is a great deal of turmoil in the ranks.

PM's resignation will add to the middle class (iPod + Khaddar) appeal for Congress.

It could be for real this time.

Two curious legal cases

The first involves the following statement by Narendra Modi:

"I want to tell the government in Delhi, lets sign a year-long pact, you don't take any money from us and don’t give us any aid. And then we will show the Centre how we run the state. You all tell me, am I not right," he was quoted as saying. [link]

It is not known if these were the exact words uttered by Modi, but calling these statements seditious is quite ambitious. As a matter of fact, Congress bigwigs have not made any public statements, leaving the hatchet job to foot soldiers like Manish Tewari.

Given that the UPA top brass have basically maintained a wall of silence about the Gujjar and Gorkha issues, one can only imagine the seriousness of this regime about the nation's security. Perhaps this is a moot point, since many of UPA's partners are unabashedly seditious, especially the communist factions.

As a side point, Congress claims that the Government does not have "any system to determine how much a state government contributed in taxes to the Centre". This is quite funny. Evidently the Government does not have any mechanism to determine which castes qualify for OBC privileges either. The Government does not even have a mechanism to determine how much of social spending actually go to intended recipients (15% if you believe the late Rajiv Gandhi, 5% if you believe Rahul).

The center-state resource allocation issue is nothing new. A plethora of studies have been done on this issue, as an example - here. The fact of the matter is, there is a well defined system that determines these issues. That system is called "electoral opportunism".

The second issue cropped up when an RTI petition revealed that the BJP had accepted an election contribution from Dow Chemicals. A partial list of the contributions to various parties is available here. The issue is embarrassing for the BJP given the popular (and grossly misplaced) sentiment against Dow. The Madhya Pradesh Congress has petitioned the EC to cancel the registration of BJP. There is no question that the contribution was illegal. The relevant laws (Foreign Contribution Regulation Act) can be found here. It is not clear if a contribution of Rs. 1 Lakh ($2,500), albeit illegal, is ground enough to cancel a party's registration.

The funny part is this bit from the Congress website:

The Committee has received suggestions that the Congress make efforts to raise funds from NRIs and overseas Indians.

The factual position is that under Section 4 (1), Chapter II of the Foreign Contribution (Regulation) Act, 1976 (FCRA), no political party can accept foreign contributions. Section 4 (2) bars even NRIs having Indian citizenship from delivering any currency, Indian or foreign, to any political party.

However, Section 5, Chapter II of FCRA allows an organization of a political nature but not being a political party, to accept a foreign contribution with the prior permission of the Central Government. The organistion can be associated with the activities of a political party.

Thus, under the FCRA, theoretically the Congress Party could (i) establish a Congress Foundation registered, as say a trust under the Indian Trusts Act 1888; and (ii) seek permission from the Central Government to mobilize funds from NRIs for specified functions that the Foundation would undertake like training, education, publications and conventions. It is clear from the FCRA that activities of the Foundation alone can be financed in such a manner. [link]

Congress can swing back and forth between exactitude and rhetoric, technicalities and life stories with great ease, depending on whichever is convenient at a given moment. The media, ever eager to dance to its tunes, gives it much of this latitude. The aam aadmi is left holding it in their hands - the short end of the stick that is.

Change, anyone?

Young Barack Obama with Grandpa

Come to think of it, the prolonged battle for the democratic nomination spared us tons of editorials and special shows. Now that it's finally over, expect a barrage of Obama ululation.

As a matter of fact, it has already started. Sample this editorial by Rajdeep Sardesai. He starts out with a tongue lashing on static order and dynastic politics, but, get this, the example he furnishes actually involves Karunanidhi!

Obama is also bound to draw comparisons with Mayawati. Needless to say this causes a lot of discomfiture to the media:

Ironically, the one Indian politician who comes closest to embracing the Obama principle is Mayawati. There are many aspects of Maya raj that are wholly undesirable, but at least she offers her supporters the hope of a new political order, however flawed. She may have alienated middle class India with her corrupt, autocratic ways, but for the next generation Bahujan Samaj, Mayawati is the only representative of real change. If Mayawati had been fortunate enough to go to Harvard, perhaps she too could have created an entire new menu for indian political and social life, a new discourse, a new counter culture that is truly Indian (unlike the Left) and truly revolutionary (unlike the Congress).

For the moment, India awaits her Barack Obama. [emphasis added]

It is not clear exactly how long do we have to await our deliverance by a Harvard Educated Dalit, because clearly Mayawati is not acceptable to these intellectuals. Actually we know exactly what would happen if we happened to chance upon a Dalit leader who could satisfy middle-class fancies. Dr. Ambedkar was exactly one such individual. He is just about the only person who objected to adding adherence to socialism as a founding principle of our nation.

When Dr. Ambedkar fought for a Lok Sabha seat from a Bombay constituency, Congress put up an illiterate milkman against him. The campaign was nasty. It was claimed that the western attired leader would not be able to understand the plight of Dalits (although wealth never prevented Chachaji from empathizing with the poor).

Dr. Ambedkar lost the election.

In the Indian context change would essentially mean two distinct phases of power-shift. The first would be to transfer power from the colonials to the real people and undo the massive power grab that happened during the tumultuous time of formation of the nation. The second phase will necessarily involve dissolving the feudal order of crony capitalism and drastically shrinking the size of the Government.

Of course intellectuals like Rajdeep Sardesai will resist change with all their might.

Effete, stupid and corrupt

How can you have any pudding if you don't eat your meat?

(The Wall, Pink Floyd)

It was a surreal experience. The national capital region was under siege by a ragtag mob armed with primitive weapons. Highways were shutdown, food supplies and essential services disrupted. Home Minister Shivraj Patil's response to this crisis mainly consisted of holding innumerable "briefings". Right about now a very serious security threat has emerged in the Darjeeling area. After lying dormant for about two decades, the Gorkhaland movement has raised its head once again.

The problem with a "soft state" is that incidents such as these keep erupting like boils. Ineffective leadership only compounds the problem.

Much has been discussed about Shivraj Patil's confounding statement equating an Indian prisoner in a Pakistani jail and another Indian citizen facing the death penalty in India. Afzal Guru has reportedly made full use of the controversy by making bravura statements to the media. Another drama is unfolding about Nalini Sriharan's mercy plea. If you add Priyanka Gandhi's unexpected prison visit, the whole picture becomes clearer.

It could be that Congress calculates the gains from pardoning Afzal marginally greater than hanging him. They figure that if they can engineer Sarabjit's release and if the Gandhi family magnanimously "forgives" Nalini, they can contain some of the damage in addition to scoring some Dravidian points. The recent unexpected deportation of Pakistan's former Human Rights Minister Burney from New Delhi airport adds more fuel to this suspicion.

Either that or Patil is incredibly stupid.

In any case, it looks like Shri Shivraj Patil has been busy doing a little family welfare on the side. A recent report on Indian Express exposed a massive land grab scam by Patil's son and daughter in law. To facilitate the scam, the environment ministry flouted its own norms. The proposed Rs. 149 crore expansion of the distillery in question has left villagers high and dry.

Gao Kao, Egg in the chicken and this year's achievers

It is that time of the year again. The results of various examinations, including the entrance tests have come in. But first, a taste of how our neighbor does it:

For China's 31st annual National College Entrance Exam, which takes place on the first Thursday and Friday of June, at least 10 million Chinese high-school students have registered to sit the gaokao, as it is colloquially known. They are competing for an estimated 5.7 million university spots. Kao means test, and gao, which means high, indicates the test's perceived level of difficulty—and its ability to intimidate. It is China's SAT—if the SAT lasted two days, covered everything learned since kindergarten, and had the power to determine one's entire professional trajectory. [link]

Do read the whole article, it is enlightening, especially the part about regional adjustments. This is highly relevant for us, as we will explain in a later post.

As always, the results of various tests in the country have blown to smithereens the commonly peddled assumptions behind our quota regime. A few random highlights:

• OBC Candidates dominate Lucknow Pre-med and Engineering tests, and by that we mean really dominate. Vishvendra Kumar (SEE Topper), son of a farmer, said: "Arakshan tou ji band hona chahiye (reservation should be scrapped)."
  
  
• Village milk seller's son passes the IAS. his study partner, a railway booking clerk's son, also made it. How much these folks make, any ideas? Above the creamy layer barrier of Rs. 2.5 lkh per annum?
  
  
• Brother-sister duo, a fruit vendors grandkids, make it in the civil services.
  
  
• Children of semi-literate parents and tribals - civil services.
  
  
• Waiter becomes IAS Officer.
  
  
• Daughter of a Paan seller and proud resident of a mud house clears UPSC examination.
  
  
• Kids from rural and backward areas have done well in this year's Bangalore CET.
  
  
• Vegetable vendor's daughter is Gujarat XII state topper.
  
  
• Partially blind makes it to three IIMs.
  
  
• Children of laborers, shop keepers from backward communities make it to IITs. This is a Super 30 related news, they had a perfect score this year. These kids would make it without quotas.

We congratulate all these students and others we don't know about on their success. Good job.

Now for the egg in the chicken story.

There was a great debate in the MSM and blogosphere about whether the Government should create a large number of IITs. We stayed away from this debate because the basic premise is silly. The Government should not be in this business. Most of the debate was centered around whether this would result in a dilution of quality etc. This is the fundamental problem of central planning, there is no way in hell you can get price guidance from the market. You just don't know when and how much to scale up.

In any case, apparently a few new IITs are coming up and they will start their session from this year. But get this, most of these will be housed in existing IITs! Can you believe this shit? Exactly what purpose does it serve other than to make a bullet point in UPA's election manifesto? This is the sort of tokenism that has led us to where we are today.

Needless to say, intellectuals cheered this move.

The UPA Government's gas bomb

This graphic shows that if the current trajectory of inflation continues, it may top 15% by the end of the year. Of course this is quite arbitrary, there is no theoretical support for this model.

There is an interesting discussion going on at offstumped. The folks over there have taken BJP to task for politicizing the gas price increases. This is a refreshing development, BJP supporters have taken a position directly opposed to the party's rhetoric (Mahangai Singh, LOL!). Unfortunately this is seldom observed in the Indian political space. Let alone the blogosphere, recent criticism of Congress even in the MSM was basically centered around the party's bad election management etc.

However, we did not find much to cheer about the Government's decision for a sudden hike to the tune of 10%. The general direction may be right as far as policy framework is concerned, but the timing, quantum of change and the modalities smack of nothing but political opportunism.

First of all, a few words about the inflation situation. As we noted in the previous post, the inflation figures are being revised at an unprecedented rate. The March 22 figures were just revised upwards to close to 8%. If the "revisions" continue at this rate, we may have already breached double digits and we don't even know it. Experts estimate the impact of the fuel price increase from 50 basis points to a full percentage point.

Even as people are busy editorializing the price hike, Sonia Gandhi has ordered Congress CMs to decrease taxes on fuel. There's talk of cooking gas rationing etc. The price of the most sensitive segment, i.e. Kerosene, remains unchanged.

It is quite clear that while global oil prices did contribute to the inflation, a substantial part came from gross mismanagement of the monetary policy. The UPA Government wanted to flood the country with populist spending as much and as fast as it could. The farmer loan waivers, already a whopping 60,000 crores, have been increased by 20%. The states have spent liberally too.

The fuel price hike is needed because UPA needs to finance its profligacy in an election year. Expect a very brisk implementation of the loan waiver program.

The UPA is all set to finish its term with a huge deficit, high debt to GDP ratio, runaway inflation and slowing growth.

Inflation: Revised

(click on images for larger versions)

Ever wonder how contemptuous the term "Hindu rate of growth" is? In this day and age of political correctness, it sounds so anachronistic. Ironically Hindus had little to do with it, except to be at the receiving end. Anyway, we digress.

Just how bad is inflation at the moment? Well, it is any body's guess. The office of the economic adviser publishes WPI numbers with a 2 - 3 week lag. Even this figure may get revised after a month or so. The March numbers have just been revised (light saffron band in the image above) upwards. Usually the revision stays within 0.2 - 0.3%, this time around it was almost in the ballpark of a full two percentage points.

One indicator of how bad the inflation is comes straight from the FM himself:

I’ve said this many times in the past. In the 70s and 80s average inflation was well over 8 percent, in the 50s and 60s it was even higher but since the 90s the tolerance level of inflation has come down drastically. Since the turn of this century, I think tolerance level of inflation is only between 4 to 5 percent. Therefore when the headline inflation number goes beyond 5 percent there is resentment and naturally political parties seize the opportunity to feed this resentment. We are doing everything to control the situation, but I don’t think it will have too adverse an impact on our government [link]

The FM might want to ponder what happened at the turn of this century that suddenly the tolerance level for inflation went down? In any case, we haven't heard this type of indictment of a previous Congress regime from the establishment before, especially of the Nehruvian golden age. The FM is of course lying (also known as speaking for social justice) about tolerance level coming down only recently. Just ask the dollar-a-day crowd.

The FM has also tried to suggest that India's inflation remains lower than other developing countries. Aside from the fact that India uses WPI, we still haven't seen the revised estimates for the current numbers yet. We already breached 8% in March.

The following chart makes it easy to visualize the trend:

Can you see the nasty red line snaking upwards?

Essentially the FM is betting that high growth rates will sustain and the resultant high revenues can be group targeted (via schemes such as NREGS, loan waiver etc.) towards the most needy. This is a dangerous game. First of all, India's growth can cool pretty quickly in the coming year following a US recession. Secondly our national debt is about 75% of GDP, while the true fiscal deficit climbs towards double digits as well:


As this image shows, India's true budget deficit is about 7%. This doesn't factor in the recent largesses. A high deficit and high debt-GDP ratio can lead to a ratings downgrade for India. This may in turn reduce FDI.

So, are we heading towards another BOP crisis? Probably not, fortunately we are sitting on a cushion of large foreign exchange reserves. In terms of opportunities lost, the cost is incalculable, just remember the days of "Hindu rate of growth".

Karnataka Election Coverage

Happened to catch some of CNN-IBN coverage of the Karnataka elections. Here is a rundown.

Silly Board Game: The election coverage was as high-tech as it gets, complete with live updates, split screens, well coordinated multi-location video input, digital touch screens etc.

They put a strange device on the studio floor, a map of Karnataka with different colored cubes on it that could be moved. This device proved to be too cumbersome and especially when BJP started gaining momentum, the artifact was left untouched for the duration of the program.



Cartoon TV: They used a feature in which a politician would be shown in an inset mock TV screen surrounded by a cartoon audience. Only BJP politicians seemed to get this treatment and even when making completely neutral statements. We can't seem to figure out why Yediyurappa would be shown on the cartoon TV when he was merely thanking K'taka people.







Intellectuals: CNN-IBN invited a curious creature called Gauri Lankesh as a special guest. She was so upset that she was at a loss for words most of the time, at one point of time recalling the word "fascist" with great difficulty and then losing the chain of her thoughts completely. She called it a black day for Karnataka and that she believed Yediyurappa will be extremely bad for the state. Future tense. She also claimed Gujarat had higher rates of farmer suicides than Karnataka.


At one point of time intellectual Ramachandra Guha rued that BJP hadn't fielded any Muslim candidate although the state had 20% Muslims. He was duly reminded that K'taka has about 12% Muslims. Do watch the video, it is instructive.

Exit Poll: Various theories were put forward by the CNN-IBN team about why the exit polls went wrong. Apparently the polling errors and vote-percentage to seat translation errors cancel each other out. Only this time they went the same way. This does not explain why the other three polls did so much better, one of them being practically bang on the mark.







Yogendra Yadav blamed Dalits for the errors in exit poll. This brings up an important question. Despite dogged campaign by the media and incessant carpet bombing by intellectuals, Dalits are voting for the BJP in large numbers. Also, Mayawati's magic doesn't appear to work outside of a few states.








Whatever it takes: CNN-IBN blog-gal Divisha Gupta was making pulse checks on the blogosphere. Only secular blogs were quoted. The only reference to BJP blogs was a general statement, saffron blogs are euphoric.

Rajdeep Sardesai and Sagarika Ghose had dropped all pretense of neutrality long ago. This time they went much further, directly identifying themselves as part of the family in questions such as "how could we have done better", fielded to Congress leaders.

Towards the end, Vidisha Divisha and her team chimed the team slogan: whatever it takes (to defeat the communal forces).


Concedes defeat: In every election Congress loses, CNN-IBN puts up this silly frame. As if it imparts some sort of magnanimity on the party. Everyone who has observed the countdown knows that Jayanti Natarajan and Manu Singhvi were in no mood to concede defeat, even after BJP was leading in 100+ seats. We all know what would happen if Congress-JD(S) combine exceeded the BJP tally. As a matter of fact Singhvi went on record by saying the largest single combine should form the Government. He should remember that for the next general elections when UNPA runs him over with their train wreck coalition.


It was a narrow win for the BJP and we anticipate constant trouble for the party. It is the curious statistics that only six seats went to rebels and miscellaneous parties and BJP needs at least three. You can imagine the horse trading that will ensue in the days to come.


CNN-IBN supremo wore saffron to the studio a day after the election results.

Why Democracy?

Trailer and details available here.

New word

Syncretic.

Replaces secularism.