Why Indians invest in Gold/Silver?

In India, inflation runs at about 10% (in terms of the M3 money supply). Banks give an interest of about 7%. From this interest, Tax is deducted. So effectively people get about 5% interest if they save in a bank deposit or something equivalent.

Real estate in India went into a bubble territory a few years ago, because of government policies. The overheads and taxes in buying/selling property are high. So the number of people investing in real estate has greatly declined.

Most stocks are overvalued. Government agencies like LIC buy index stock and so the government can paint a rosy picture of the economy. But, sooner or later, the true value gets reflected in stock price.

When Indians invest in gold/silver, their savings are protected from inflation theft. If they use cash, then even taxes are avoided. The chart below shows the average rise/fall in the price of gold/silver for last few years.

What just happened in Maharashtra politics?

Ajit Pawar breaks NCP party and supports BJP. Does Sharad Pawar, who leads NCP, support this decision?

Never believe what a politician says; look at what a politician does. If BJP supports Sharad Pawar by going slow on cases against Sharad Pawar and projects that cause financial loss to Sharad Pawar; then it implies that Sharad Pawar supports BJP. If BJP continues to harass Sharad Pawar, that means that Ajit Pawar has really broken away from Sharad Pawar to join BJP.

Mess in India's telecom sector

India's telecom sector has 3 major players i.e. Jio, Airtel and Vodafone Idea.

• Jio received a spectrum at a much lower price than Airtel and Vodafone Idea. So Jio has a strong balance sheet.
• Airtel needs some help. If it pays all its dues, it will be left with no cash to run the company. So Airtel will collapse if the government insists all dues be paid immediately. However, if Airtel is given time to repay its dues and banks are asked to continue lending to Airtel, then Airtel will survive.
• Vodafone Idea has the biggest problem. Its liabilities exceed its assets. The parent company has refused to pump in more cash. So now, unless it receives some help from the Indian government, it will likely liquidate. The government will have to forgive some of the taxes recoverable and ask banks to infuse more cash at a concessional rate.

But, how did we come to this stage? The key reasons why Indian telecom failed are

1. TRAI interference with the Telecom sector. In other countries, the competition determines the prices. In India, TRAI forces telecom companies to charge fixed rates for IUC, number portability, etc. This causes a huge loss to telecom companies. The role of TRAI should be advisory only. TRAI cannot levy penalties on any telecom company. The competition will determine prices in India, like in other countries.
2. Jio was given spectrum at a lower rate than others, in a very questionable manner. The government should give concessions to competitors of Jio to make up their loss. Also, the government should hire tax experts and ensure JIO is paying all taxes due to it. e.g.
   • JioPhone is sold without paying all taxes because on paper it is "lent" for 3 years. But, in today's world, which mobile lasts more than 3 years. So JioPhone is sold without paying all taxes due.
   • Jio Setup box is also lent for many years for home internet access. If it is "sold", then more taxes will have to be paid by Jio to Government.
   The Indian government should stop favoring Reliance Jio over Airtel and Vodafone Idea.