Peculiar Case of Inflation in India

Someone asked me why do most of the non-BJP ruled states have higher fuel prices than that of BJP ruled states? Don't they realize that it'll be the reason for high general prices?

First of all, I wanted to ignore this question due to its political reason but after a while I decided to respond knowing the fact that the answer to this question is very peculiar. If I try to remain politically correct, there would not be a factual and satisfying answer to this question. It is not possible at all to be politically correct and answer this question both at the same time!

As a matter of fact, most of the non-BJP ruled states are charging higher VAT on petroleum products than the BJP ruled states. As a result, the oil prices are higher in Non-BJP ruled states. But it is not that simple. It is more complex than it looks at face.

Media Against Bharat in G-20 Summit

A large number of news outlets irrespective of foreign or Indian, were hell-bent on declaring the G20 Summit a failure with the purpose to discredit Bharat before the G-20 Summit had even started! The Print, The Wire, Hindustan Times, Business Standard etc. along with the foreign news outlets were loudly declaring with huge confidence that there would be no New Delhi Leader’s Declaration because of non-consensus among the members! Why? Because the European countries and the USA wouldn’t tone down on the Ukraine-Russia war and India wouldn’t go against Russia. Rather India would opt for the middle path. So they were certain!

Rising Wealth Inequality in India

Inequalities in wealth and income are prevalent across the globe. There is perhaps no economy in the world that is not facing the challenges relating to inequalities in varying degrees. India is also faced with the challenge of increasing inequalities across states and regions on both fronts. Every year, through many surveys, different institutions and organizations highlight the issue of inequalities in India. A lot has been done to alleviate poetry but when it comes to inequalities, policy responses fail to address them.

After having a look at the data relating to wealth per adult in India, it is evident that the average wealth in India is found to be far higher than that of the median wealth. In 2022, the average wealth per adult was $18,048 and the median wealth was $4,107 in the same year. The average wealth was about four and a half times the median wealth in 2022.

Globalisation or Regionalisation?

COVID has been a learning experience for all countries across the globe. There is not a single country which was not negatively impacted; mostly in the form of supply-chain disruptions. As a result, countries have been focusing on domestic markets on both sides; demand and supply sides. So at present, their focus is revolving around increasing domestic production as well as consumption. This is more true in emerging economies like India, China, Brazil and South Africa. China is working on increasing domestic consumption while India, South Africa and Brazil are tirelessly working to increase manufacturing in their own domestic markets. However, all four countries of the BRICS bloc are working to increase their export share in global trade and this is pushing the globalisation movement forward.

However, since COVID supply-chain disruptions, many intellectuals have been talking about de-globalisation and predicting that de-globalisation would soon become a new phenomenon. It is quite possible that in the future de-globalisation may become more evident than today, but at present de-globalisation seems to be just another phrase being overused by academia! At least, the data says so.

What is Better? Efficiency or Fancy Degrees?

In 2013, the global rating agency S&P started discussing and threatening to put India in the junk category. However, today after just 10 years, the same S&P is declaring India as the fastest-growing economy in the world. What has happened in just 10 years that S&P has changed its mind and is the most optimistic about India? Is it magic or has this change just happened?

No. Surely, not. This did not happen just like that. For this, the Government of India has put in a lot of effort in the last 9 years and the fruits of those efforts are now visible in every aspect of life in India. It is a well-known fact that the effect of any structural reform is visible in any economy with a lag.

Indian Economy a Bright Spot but a Bumpy Ride

Most of the economic indicators clearly and reasonably indicate that the Indian economy will grow with a growth rate of not less than 6% in 2023. This is the highest rate of growth among the largest economies in the world while the global economy is slowing down. So without a doubt, it can be said that the Indian economy is a bright spot in the global economy when a soft to moderate recession is in offing in the world economy. This may look euphoric but this ride wouldn’t be an easy one but bumpy and full of many challenges.

At present the Indian economy is facing two big problems that need to be fixed in the short to medium term. The first and most significant problem is high inflation in the economy. This is a very costly situation for the Indian economy. To tame the inflationary situation, RBI has maintained a hawkish monetary policy and this policy stance is the biggest challenge for the economy as if the central bank continues to increase the interest rates in the economy, it would be very costly for the economy.

Increasing Intellectual Bankruptcy in India

With the decision of the Supreme Court of India, all the questions regarding the constitutionality of the demonetisation of currency notes by the Indian government in 2016 are now settled forever. A 4:1 verdict establishes that due process was followed and the Reserve Bank of India was in the loop. However, the questions regarding the economic and social impact of demonetisation would never die down and should not. A fair and unbiased discussion, as well as an assessment of this key but knee-jerk policy decision, is necessary so that this episode of demonetisation could be used as a case study for future policymakers.

The Government of India demonetised ₹500 and ₹1,000 currency notes in 2016 with the stated objectives to clean illicit money and cashless economy which eventually proved to be a very costly affair for the economy. However, after six years of demonetisation, it can easily be said that ideally none of the stated objectives was ever achieved apart from the cleansing of the counterfeit currency notes from the market.

Rising Inflation across the Globe

Tomorrow on 8th of June 2022 the MPC of RBI would announce the monetary policy for India and it is expected that the interest rates would be increased by around 50 basis points in response to the rising inflation. It should be noted that inflation in the Indian economy has been rising for many months and there is no indication of it falling in the next few months. These realities have forced RBI to reconsider its accommodative monetary policy which was aimed at supporting growth in the economy which has been hit hard by the Coronavirus pandemic.

It must be noted that today inflation is not a local issue altogether. Rather if it said that no economic activity across the globe remains a local activity but a global activity in the globalized markets and financial integration. Today the whole world is under tremendous pressure of rising inflation. This has been caused by many factors. Some factors are global in nature and some are local. However it must be noted that rising food inflation has been the largest contributor in overall inflation across the globe.

Tech Crackdown by China and Investment in India

The Tech Crackdown by the Chinese authorities was the least expected when the world was still struggling with the Coronavirus pandemic. It took everyone by surprise. China's tech crackdown which started in 2021 is aimed at reorienting the technologies aligning with the national technological priorities of the countries aimed to gain global technology supremacy, stopping monopolies as well as bringing the increasing inequalities down, however a costly affair. This has caused a lot of stress on the Chinese technology firms, investors, venture capital and private equity firms which have invested in China. As a result, a lot of money has started flying to India, the second hottest destination for such money. The loss of China is becoming the gain for India. However, the data suggest that there persists a lot of gap in the flow of private equity and venture capital investment between the two economies.

Disinvestment of PSBs is not a Solution

The government of India for decades has been pursuing the policy of disinvestment and was able to privatize many non-performing public sector undertakings (PSUs) since the implementation of liberalization, privatization and globalization (LPG). It has disinvested many non-performing firms from the manufacturing sector to services sector which are now healthy and growing. Such disinvestments have not only brought down the cost to the public exchequers but are contributing towards economic growth too. So as a whole disinvestment efforts should be termed successful. However, there had always been strong resistance to every single effort to privatize any PSU from the employees and political class citing many reasons.

Would the Conversion of AGR into Equity be Enough for Revival of Vodafone Idea

Finally the board of Vodafone Idea (VI) has approved the bailout package rolled out by the Department of Telecom (DoT) to rescue firms from the burden of Adjusted Gross Revenue (AGR) dues. This will make the Government of India the largest shareholder in the company. The DoT rolled out this bailout package to provide breathers to the telecom operators from the burden of AGR dues. However, the most important question still remains unanswered. Would this conversion of AGR into equity be enough for the revival of Vodafone Idea?

Onset of Third Wave of COVID19 Infections

It is less than two weeks since the new cases of COVID19 infections have started witnessing significant increase and India is in the middle of the third wave of infections overtaking the peaks of the previous two waves. The rate at which the new infections are increasing is alarming and everyone must be careful observing social distancing and wearing masks.

The numbers of daily reported confirmed cases as on 9th January 2022 are very high in the very beginning of the third wave in comparison to the previous waves of infections. Daily reported confirmed cases may soon cross the second wave's peak in the month of January itself.

I Love Hating Ambanis and Adanis

The appointment of Mr. Paraga Agarwal as new CEO of Twitter Inc. had sparked the traditional and social media. Every social and traditional media platform was abuzz and floating with millions of congratulatory messages with pride. People are talking about the Indian CEOs of multinational companies from Staya Nadela to Sundar Pichai to Parag Agarwal. It's really good to pride in something good which can symbolize the success of the Indian system. Everyone does this, so we are! It’s very natural. But the irony of the whole story is that the same people hate Ambani, Adani and other businesses in the same breath! Isn't it strange to believe? Yes, but that’s true. Perhaps the constitutional socialist take reside in us!

Pollution, Mad Rush for Growth and Delhi

Post Diwali, Delhi had a proposal to impose a 2-day lockdown to deal with the very high level of pollution in the national capital. However, instead of imposing a 2-day lockdown, the government of Delhi ordered all the government offices, schools and colleges to function online from home which is to be lifted on 29th November 2021. The neighbouring city Gurugram had similar experiences and the Government of Haryana had to impose similar restrictions in Gurugram too like Delhi. However, the problem of pollution and high Air Quality Index (AQI) is not a new or once in a year instance but it is now a day to day problem. The average annual Air Quality Index in Delhi always remains above 150 for many years.

Book Review: Shades of Saffron: From Vajpayee to Modi by Saba Naqvi

‘When a writer writes a book on a certain event or phenomenon; he is not just airing his opinion but judging it.’

Journalists have the privilege to access information that is often not available easily or is not completely in the public domain. This privilege of the journalists often makes them to be better at psephology not just in predicting the election results but also what the people of a country or geography are thinking or where the tide is headed to. For this ability is also very conditional. To have a clear view one needs to have little or no prejudice and should not be furthering a specific goal or agenda. Prejudiced writers often focused on certain specific issues more while ignoring a large part of the event or phenomenon to prove their theory. When a journalist turned writer has prejudices or agenda to further, it is reflected in her/his writings. Their skill and magic with the words opens the slits wide.

The criticism of any phenomenon or event along with the detailing is necessary to judge the relevance and importance of that phenomenon or the event and help the future generations to make proper amendments so that the positive values created by the phenomenon or the event is gracefully put forth while the negative values are criticized so those who pursue or follow such goals have some ideas about how to navigate or opine and none commits the same mistakes which had been committed earlier. Such criticism helps in building a better society; so the nation. So it's a very important task at the hand of the critic at her/his disposal.

Is the Pandemic Over?

The second wave has been devastating for India with very high numbers of daily new infections and deaths from the coronavirus. Even today, the number of new infections from the COVID19 has been hovering around 40,000 for more than four weeks. Numbers of active cases have fallen down to 4.15 lakhs with daily death falling to the 7 days average of more than 750 (excluding 12th July data). There are seven states which are recording more than one thousand daily cases accounting for more than 80 percent of the national total. Of these seven states, five states are recording more than two thousand cases a day and Kerala is recording more than ten thousand cases a day. Around 24 percent of the total population has received at least one dose of vaccine while only 6.3% of the total population has received both the doses! The average of daily vaccine doses being administered in India is hovering around 3 millions for months. This average clearly indicates that it will take more than a year before half of the population in India is fully vaccinated.

Vaccination Drive Must Intensify in India

India started its vaccination drive on 16th January 2021 by vaccinating the front-line workers including doctors, paramedical staff and police officials. As on 13th July 2021 total doses of 38,76,97,935 have been administered in the last 179 days or about six months. This gives an average of 21,65,910 doses every day. Even the 7 days moving average is 37,67,770. However India had One Day Show of vaccination with a total 87,29,3030 vaccine doses on 21st June 2021 when vaccination drive was made open to all citizens of 18 years and above. Many states are again witnessing long queues outside the vaccination centres.

Fatality is lower in the Second Wave of COVID19 in India

Every single death from COVID19 is unfortunate but the second wave of the pandemic had devastating for India. There was not just panic all around but the whole healthcare system of India had collapsed. Every coronavirus related medicine was short in supply and price of sky-rocketed. Thousands of people died just due to lack of hospitalization, oxygen and medicines. All the claimed preparations during the first wave of infection and the lockdown seemed to have completely failed. However the second wave was far fiercer in comparison to other pandemics where the second waves are found to be less fierce.

Corona Vaccine for All

Coronavirus has already infected more than 18 crores people across the globe. More than 39 lakh individuals have also succumbed to this deadly virus. These are the reported statistics relating to the coronavirus pandemic. Lakhs of people are left with no family and thousands of children have become orphans. Crores of people across the globe have lost their livelihoods and have been forced into the vicious circle of poverty and are struggling for a square meal a day! World economy is left in lurch and there lies only uncertainties ahead. All this is happening when the governments, non-governmental organizations as well as the citizens across the world have been trying to provide the maximum support to everyone in need in the times of pandemic! Even at this point of time when hundreds of millions of doses of the vaccines have been administered to people, everyday more than 3.5 lakhs of individuals are getting infected with the virus and more than 7 thousands individuals giving their life to this undying virus.

Fatality is Far Lower in the Second Wave of COVID19 in India

Every single death from COVID19 is unfortunate but every media outlet is creating panic by showing the dead bodies but none tells that the numbers of death per lakh tested positive is far less in the second wave than the first wave.

In the first wave, Case Fatality Rate (CFR) was 1.43 per cent but in the second wave it is only 0.57 per cent. That means more than 99.4 per cent of infected individuals are recovering over time in this wave. This clearly indicates that Indian health system has learned a lot in the last one year. And this is a good news that every citizen must know to defuse the panic behaviour which on rise. Media outlets rather all the time creating panic should also focus on this side of the pandemic.