RBI has Arjun's eye and Arjun's quiver !

 RBI Governor Shri.Shaktikantadas emphatically enunciated RBI's policy for containing inflation in the month of Nov22 by calling its focus as "Arjun's eye"!

In Mahabharata Arjun is eulogised for his single minded focus on hitting the targets with unwavering skill.

RBI has succeeded in its mission in the last one year largely, by reducing the CPI inflation keeping it within the band of 2% to 6% for the last few months with occasional jump beyond the upper band of 6% induced by food inflation.

In the recent policy press meet RBI Governor went one step ahead and mentioned that he has Arjun's quiver with all its arrows and weapons to tackle the inflation if it rears its head. He specifically mentioned that OMO being one such weapon is still in Arjun's quiver. He hastened to add at the end of the press conference that the Arjun's analogy is only meant to say that all kinds of weapons to kill the inflation are at his command and not to equate himself with the larger than life hero  Arjun of Mahabharatha.

Leaving aside Arjun's eye and quiver, RBI's recent policy is pedantic  but keen on keeping the ship steady with monetary policy in sync with the Govt's Fiscal policy. RBI is doing a tight rope walking conscious of not doing excessive liquidity tightening which can hamper growth when General elections are just round the corner and also not  loosening its grip on liquidity which can bump up the inflation.

Since the elephant in the room is General Elections due next May, Govt. will have to work in tandem in showing fiscal rectitude by not overshooting its Fiscal deficit target of 5.9% of GDP this year since higher GDP growth itself can generate heat in the economy pushing up the inflation.Added to that will be Govt.spending on Capex & others and other Election spending by parties splurging on liquidity and RBI is mindful of these monetary quagmires.

RBI will be presenting two more Monetary policy updates- in Feb 24 and April 24 before the General elections and will do everything in its ability to rein in inflation if it reaches uncomfortable levels.

Fortunately all PSU banks are in ship shape with low NPAs and sufficient provisioning which gives large elbowroom for the Central bank to manage the liquidity in the system and thereby keeping inflation in a leash. The factor beyond RBI or GOI's control is Oil and other Commodity prices which can rock the boat.However RBI fortunately has  Arjun's quiver to quell the inflation!

Q2 FY24 GDP growth at 7.6% is phenomenal but...

 Govt has released the official NSO estimates for Q2 FY24 GDP growth rate at 7.6% which is a tad lower than 7.8% GDP growth in Q1 Fy24.

This figure is stupendous but what are the pin pricks in sustaining this high growth trajectory in H2.

1)Agricultural GDP growth has faltered to 1.5% due to truant monsoon rains;

2)Personal final consumption expenditure grew at 3.1% as against 6% in the Q1.

3)Government Investments and Government Consumption have picked up due to higher fiscal deficits budgeted for the year;

4)despite higher Personal loans, Vehicle loans etc given by NBFCs and Banks ,why Personal Consumption is languishing- Is it because of higher inflation due to food &fuel?Are the new loans taken to payout old loans leading to recycling of loans?

5)Only Urban Consumption expenditure is showing some significant traction but Rural consumption is still  tepid and low.

6)Unemployment rate is holding steady but still not falling significantly. Moreover the Wage earnings over the years have not grown significantly for  those employed at lower levels and therefore, this has not enabled them to generate higher disposable and discretionary incomes.

The above questions point to a situation where the GDP growth is on high steroids of Government expenditure fuelled by high Fiscal deficit budgeted.

If Governments &PSUs spending on Capex falter in the years to come, the GDP growth may also fall in tandem.

In nutshell, the GDP growth is largely confined to Urban segments  and sectors and the people who are dependant on it , thereby sidestepping rural India's huge population.

Courtesy: Crisil Research

IMHO, the above crude analysis may be wrong and if proven wrong in the medium term when the Fiscal deficit levels are brought down, I will be definitely happy.

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.