Supreme Court ,SEBI and Short selling-who is Calling the Shots!

 It looks like Corporate War fought through Proxies- what is visible is Supreme Court being egged on by Advocates and Lawyers like Prashant Bushan to go against SEBI(a Government arm).but men behind it are with deep pockets of short selling and international funding, who wanted to sabotage the dreams of retail investors and small investors of LIC& PSU banks etc. by hurting the business group of Adani. Ingenious game of Cloaks & Daggers- all in the name of election funding of Modi &BJP through the so-called "tainted money" by Adani.

Smoke screen tactics and optics to divert the issue as an international fraud and financial malfeasance by planting motivated reports in foreign press and newspapers through NGOs OCCRP and the hit and run job of Hindenburg for the benefit of a Short-selling syndicate remote controlled by big foreign political & financial manipulators!

Finally Supreme Court had to appoint a Committee of eminent professionals and jurists who in their wisdom rightly observed that there is no prima facie evidence of wilful wrong doing either by Adani or by Sebi in the matters referred to them based on Hindenburg report.Now Supreme Court has mildly said Hindenburg report and other foreign news agency reports are not gospel truth!!It has chastised Prashant Bushan for being economical with the truth!

This case has to be viewed along with another expose. That in the Parliament one of the opposition MPs raised questions on Adani-Modi link and this MP stand exposed in unsavoury episodes of quid pro quo for raising queries on Adani-Modi in the floor of the Parliament. Alleged indiscretion & impropriety on the part of MP led to Indian Parliament security being breached thereby exposing it to Foreign based third party entities and individuals.Now Lok sabha has amended its login rules of its MPs to eliminate to plug the pledging or mortgaging of login credentials on quid pro quo basis by MPs!! 

The shoot & scoot report of Hindenburg according to me will not end there. Till Lok Sabha elections this game of subterfuge will be pursued by Modi detractors who are basically corrupt.

Supreme Court and Governors!

 IMHO, Supreme Court is Supreme and no Court can deny this- let alone a humble citizen like me!

But without contempt and malice for the Supreme Court, I want to submit few points of view on the latest judgment of Supreme Court on the role of Governors.

1) SC has stated the obvious- Governors are not elected but titular heads of States.

2)They cannot sit tight on the legislation passed by Legislature indefinitely.

3)They will have to function in harmony with the State CM and his Cabinet.

4)they will have to abide by Article 200 of the Constitution of India.

Nothing stated above are any new findings but simple platitudes repeatedly told to Governors.

However the larger question of how can a State Legislature pass a bill which calls for replacing Governor by State CM for appointing Vice-Chancellers of Universities and expect Governor to give his assent to such a bill- the simple question as to how a Governor or for that matter, a CM be a judge in his own cause. Is there not a inbuilt Conflict of Interest ?Simple logic.

When SC is going to answer this- as a Citizen am I entitled to expect an answer within reasonable time from SC?Will all Courts in the country give their judgments within reasonable time without agreeing on adjournments?or judgements are meant only for others?

Now Governor without giving his assent will forward the bills to President for consideration- what will happen?Supreme Court will question the President of India?

When there is no mens rea established or proven Governor is presumed to have acted in the public interest or in the best interests of the State.Is he not innocent until proven guilty?A Constitutional Authority like Governor must be respected by Courts atleast, until proven guilty- being elected by the people or not is a spurious argument IMHO- who will safeguard the minority who voted against the present elected Government?These are the checks and balances of a democracy-the only touchstone should be proof of "mens rea"- otherwise everybody is innocent until proven guilty?

Trade deficit in Oct 23 is jarring-other macro factors pleasing!

 India's trade deficit widened to a record high of $31.46 billion in October 2023, according to data released by the Ministry of Commerce and Industry. This was significantly higher than the $19.37 billion deficit in September 2023 and the $20.50 billion that economists had forecast.

(all the above figs in US $ Billions)

The widening trade deficit was mainly due to a sharp increase in imports, which grew by 26.2% year-on-year to $54.54 billion. This was driven by higher imports of crude oil, gold, and electronic goods. Exports, on the other hand, grew by a more modest 5.4% to $23.08 billion.

(Imports Figs above are in US $ Billions)

(the above Exports Figs in US $ Billions)

The widening trade deficit is a concern for the Indian economy as it puts pressure on the rupee and could lead to higher inflation. The government has announced a number of measures to boost exports, but in view of dampening Global Trade volumes which are exacerbated by wars in Europe and Middle East theaters , the exports may lag behind severely in the coming months of FY 24.The situation looks bleak with trade volumes falling till the end of first half of 2024.

Here are some of the reasons for India's widening trade deficit:

• Rising global commodity prices: The prices of many of India's imports, such as crude oil, have been rising in recent months. This has made it more expensive for India to import these goods.
• Weak global demand: The global economy is expected to slow down in 2023, which could hurt demand for India's exports.
• Supply chain disruptions: The COVID-19 pandemic and the wars in Ukraine and Israel/Gaza have caused disruptions to global supply chains. This has made it more difficult and expensive for India to export goods.

The Indian government is taking a number of steps to address the widening trade deficit. These include:

• Promoting exports: The government has announced a number of initiatives to promote exports, such as the Production Linked Incentive (PLI) scheme.
• Diversifying export markets: The government is also trying to diversify India's export markets, with a focus on emerging markets in Africa and Southeast Asia.
• Improving infrastructure: The government is investing in infrastructure to improve connectivity and reduce logistics costs.

But the short term outlook for Exports look uncertain and shaky which may have a bearing on Manufacturing and Services GDP, even though the domestic demand conditions are robust.

Inflation is well-behaved, IIPs, Composite PMIs, stable monetary policy despite Election spending liquidity buildup, aggressive Capex spending by both Central and State Govts, well managed Fiscal deficit backed up by robust tax collections(both Direct tax and GST ) etc. are all on even keel indicating good GDP nos.Only Trade deficit is the party spoiler!

Weekend philosophical musings!!

 One of the thoughts that crossed my mind on our Dvaita, advaita and visishtadvaita ,I wanted to share- all based on veda vakyas as pramanam- all true depending on our mental perceptions/conditions of mind- it is Visishtadvait in Jagrat- wakefulness when u feel the reality of Universe with full knowledge that Parmatma/Bhagwan runs it; Dvaita is Svapna- dream state when u think that ur dreams r true and they are separate; sushupti / deep sleep is Advaita when u don't feel ur existence separately!!some may look at it as over simplification but the emphasis here is that all three states r true based on Veda pramanam/Sruti vakyas.-Adiyen

                                                <=><=><=><=>

Some of you who are familiar with Judaism Angels will know that three Angels are Primary- Cherubim,Seraphim and Ophanim.

Cherubim according to ancient Jewish scriptures ,is eagle faced- sometimes Ox or Lion or Human faced- but mainly Eagle faced always at the Feet of God in His Throne

Seraphim according to Jewish or Biblical description is flying Serpent. "the word Sera" says it is fire breathing Serpent,the angel of God serving Him in His Throne.

Ophanim, according to Biblical scriptures, is the Wheel of God with thousands of eyes and wheels within wheels decorating the Chariot of God.

All the above Three Angels can be equated to Sanathan Dharma's Symbols/Servants of Narayana- Cherubim is Eagle faced -"Garuda".

Seraphim- the Serpent is "AdiSesha"

Ophanim- the Wheel is "Sudarsana Chakra"!!!

You may please check for yourself!-Adiyen

India Core sector growth ,Composite PMI and GST collections-all robust

India's Core sector growth in August 2023 is 12.1%, Composite PMI is 61 for September 2023 and GST collections for September 2023 is Rs.1.63 lakh crores.

These are all excellent economic indicators for India. The core sector growth is the highest in 14 months, and the Composite PMI is above 50, indicating that the private sector economy is expanding at a robust pace. The GST collections are also at a record high, suggesting that consumption demand is strong.

These data points suggest that the Indian economy is on a strong growth trajectory. The government has also taken a number of steps to boost economic growth, such as increasing infrastructure spending and reducing taxes. As a result of these factors, the Indian economy is expected to grow at a healthy pace in the coming months and years.

Here is a more detailed analysis of each indicator:

• Core sector growth: The core sector consists of eight industries that are crucial to the Indian economy: coal, crude oil, natural gas, refinery products, fertilizer, steel, cement, and electricity. The 12.1% growth in the core sector in August 2023 is the highest since June 2022. This growth is being driven by strong demand from the construction, manufacturing, and infrastructure sectors.
• Composite PMI: The Composite PMI is a measure of business activity in the manufacturing and services sectors. A PMI reading above 50 indicates that the economy is expanding. The 61 reading for September 2023 is the highest since May 2022. This suggests that the private sector economy is expanding at a strong pace.
• GST collections: The GST is a consumption tax that is levied on goods and services sold in India. The record-high GST collections in September 2023 of Rs.1.63 lakh crore suggest that consumption demand is strong in India. This is a positive sign for the economy, as consumption is a major driver of economic growth.

Overall, the economic indicators for India are very positive. The core sector growth, Composite PMI, and GST collections all suggest that the Indian economy is on a strong growth trajectory.

Now the focus is on RBI's Monetary policy direction, Exports and the Crude and other Commodity prices for the next two quarters.

Lower PFCE and Lower Household Financial Savings indicate any longer term problem for India's GDP growth?

 The combination of lower PFCE(Private Final Consumption Expenditure) growth and lower household financial savings as per RBI Monthly Bulletin(Aug 23) are problems for future GDP growth of India.

PFCE, or Private Final Consumption Expenditure, is the spending of households on goods and services. It is one of the most important components of GDP, and it accounts for a large share of economic activity.

Household financial savings are the savings of households in financial assets such as bank deposits, stocks, and bonds. These savings are used by businesses to invest in new projects and create jobs, which ultimately determine GDP growth.

Lower PFCE growth and lower household financial savings can lead to lower GDP growth in a number of ways.

• Lower PFCE growth means that households are spending less money on goods and services. This can lead to a decrease in demand for products and services, which can hurt businesses and lead to job losses.
• Lower household financial savings means that businesses have less access to capital to invest in new projects and create jobs. This can lead to a slowdown in economic growth.

In addition, lower household financial savings can make it more difficult for households to withstand economic shocks such as job losses or medical emergencies. This can lead to a decrease in consumer spending, which can further hurt businesses and lead to a slowdown in economic growth.

(Courtesy:Press Note of MOSPI,GOI dt 31.8.23)

"The net financial saving of the household sector – the most important source of funds for the two deficit sectors, namely, the general government sector and the non-financial corporations – moderated to 5.1% of GDP in FY23 from 11.5% in FY21 and 7.6% from FY20 (pre-pandemic). It has been said that it fell to 50 year low, however this is completely misleading as household savings must be looked into as a sum total of physical and financial savings. To start with, the sharp rise in financial liabilities on hindsight may reflect drawdown in precautionary saving during pandemic. However, a deeper look at the data reveals otherwise. Consider the following. Financial liabilities jumped Rs 8.2 trillion since pandemic, outpacing the increase in gross financial savings at Rs 6.7 trillion, thus explaining the fall in household net financial saving by Rs 1.5 trillion / 2.5% of GDP. On the asset side of households, there was an increase of Rs 4.1 trillion in insurance and provident and pension funds" (SBI Ecowrap Sep 23)This explains why Indian Households apparent Financial Savings is low when low interest rates during Pandemic offered a rare opportunity for the households to lock in for long term housing loans at fixed rates.

However,the Indian government is also taking steps to address the problems of lower PFCE growth and lower household financial savings. For example, the government is cutting taxes and increasing government spending on social welfare programs to support consumer spending. The government is also encouraging households to save more money by providing tax breaks and other incentives.

However, it is important to note that these measures will take time to have an impact. In the meantime, the Indian economy is likely to experience some moderation in growth due to the combination of lower PFCE growth and lower household financial savings.

What can be done to address the problems of lower PFCE growth and lower household financial savings? Is there any link with higher than normal unemployment data ?

Here are some things that can be done to address the problems of lower PFCE growth and lower household financial savings in India:

• Support consumer spending: The government can support consumer spending by cutting taxes, increasing government spending on social welfare programs, and making it easier for people to get loans.
• Encourage household financial savings: The government can encourage household financial savings by providing tax breaks, other incentives, and financial education programs.
• Reduce inflation: High inflation can erode household savings and make it difficult for people to afford essential goods and services. The government can reduce inflation by taking steps to control the money supply and reduce the cost of living.
• Create more jobs: When people have jobs and a steady income, they are more likely to save money and spend money on goods and services. The government can create jobs by investing in infrastructure, supporting small businesses, and promoting economic growth.

By addressing the problems of lower PFCE growth and lower household financial savings, the Indian government can support economic growth and create a better future for all Indians.

India's House hold savings is still robust if you consider Physical/Housing assets savings also

 India's household financial and physical assets savings as per RBI have declined in recent years.

• Household financial savings: Household financial savings in India declined to 5.1% of GDP in 2022-23, the lowest since 1976-77. This was down from 7.2% in 2021-22.
• Household physical assets savings: Household physical assets savings, on the other hand, have increased in recent years. They rose to 11.8% of GDP in 2021-22, up from 10.7% in 2020-21.

The decline in household financial savings is attributed to a number of factors, including:

• Rising inflation: Inflation has been rising in India in recent months after Covid, which has eroded the purchasing power of households. This has led to households spending more on essential items, leaving them with less money to save. This should have pushed up PFCE as a percentage of GDP but only a tad more than the long term trend
• Increase in debt: Household debt has also been increasing in recent years. This has put a strain on household finances, making it difficult for households to save.
• Change in investment patterns: Households are increasingly investing in physical assets, such as gold and real estate, instead of financial assets. This is because physical assets are seen as a hedge against inflation.
• The decrease in net financial savings of households has resulted in a tandem increase in household savings in gross  physical assets. In fact, savings in physical assets which accounted for more than two-thirds of household savings at the beginning of last decade had declined to 48% in FY21. However, the trend is again moving upwards and the share of physical assets is expected to reach approx 70% level in FY23,  with the decline in share of financial assets. This, as things stand may be due to the fact that the total household savings (both financial +physical) for FY23 would still surpass the FY22 levels despite the decline in financial savings as household savings in  physical assets has jumped Rs 6.5 trillion in FY22 over FY21 and as per existing datapoints, it is expected to move further by upto Rs 5 trillion in FY23 .Therefore this will be more than the increase in household indebtedness. All this clearly shows that the shift from financial savings to physical savings might have also been triggered by a low interest rate regime  during the pandemic.   

The increase in household physical assets savings is attributed to a number of factors, including:

• Rural savings: Rural households are more likely to save in physical assets than urban households. This is because rural households have less access to financial markets.
• Investment in gold: Gold is a popular investment option in India, especially among rural households. Gold is seen as a safe and secure investment, and it can also be used as collateral to raise loans.
• Investment in real estate: Real estate is another popular investment option in India. Real estate prices have been rising in recent years, which has made it a profitable investment.

The decline in household financial savings is a concern for the Indian economy if taken in isolation.But Household savings must be looked at as Financial savings +Physical assets for assessing the health of Household savings.

The government is taking a number of steps to encourage household financial savings, such as:

• Raising interest rates: The Reserve Bank of India has raised interest rates in recent months to combat inflation. This will make financial savings more attractive.
• Promoting financial literacy: The government is also promoting financial literacy among households. This will help households make informed investment decisions.
• Launching new financial products: The government is also launching new financial products, such as the Pradhan Mantri Jan Dhan Yojana, to make financial services more accessible to households.

It remains to be seen whether these measures will be effective in reversing the decline in household financial savings in the years to come