CAA, NRC and NPR in India.

CAA determines the rules of citizenship in India. NRC is the list of Indian citizens. NPR is the list of people residing in India.

India intends to create a through NPR in the near future. In this exercise, a government official will ask you

• Name
• Gender
• Date of birth
• Place of birth
• Parent citizenship
• PAN number
• Aadhar number
• Mobile number
• Place of stay
• etc.

NPR will track the population of India. The government can decide whether the person is a citizen of India, based on the rules in CAA. Thus NPR will lead to NRC.

This exercise has some benefits. Many nations keep track of its citizens e.g. the USA, Canada, etc. So India keeping track of its citizens is nothing new. Government benefits are normally only for citizens. Also, people from nearby countries should not be able to just enter India. Many governments try to restrict illegal immigration.

So then why are people opposed to this exercise?
People opposed to CAA say that it is not secular. That is correct. Hindu immigrants from Muslim countries will get citizenship in India more easily than a Muslim immigrant from a Muslim country. But, in my opinion, this is not a major problem. Muslim countries give preference to Muslims. So a Hindu majority country can give preference to Hindus.

The actual problems with this exercise are:

• Showing your documents to a government official is problematic in India. Most Indian bureaucrats demand a bribe to do their work. So genuine citizens, who have all documents, will face harassment.
• People who have lost their documents will have to stand in lines, bribe officials, etc to first get their documents in order. Only then can they become citizens of India. These people will face additional harassment.
• Lakhs of people in India are illiterate. They have minimal or no documents. Do they even have the capability to get the documents and show them to a government official?

NPR (which will lead to NRC based on CAA) will cause problems for everyone in the country. The middle-class and rich will face little harassment because they will arrange documents and pay bribes. The suffering of poor will increase in NPR. So, we have many people, across religions, opposing NPR. Opposition political parties are fanning this unrest to gain votes.

In this environment, the Indian government needs to make the registration process bribe-free and hassle-free e.g.

• The government can ask the people of India to register electronically. If there is no human interaction, then bribes are minimized.
• Instead of asking multiple documents, the government should only ask for one document e.g. PAN card or Aadhar card or birth certificate or school/college leaving certificate or employment certificate or bank account passbook or any document that shows that you are residing in India for many years. Fewer the documents, lesser the hassle.

Then, more people will likely comply with NPR.

Four shocks of Modi

Modi has given the Indian economy four big shocks; thus causing a slowdown.

1. Demonetization: It was supposed to eliminate black money. In India, black money is held mostly in real estate, gold, and dollars. Only a small percentage of black money is held in cash.
2. GST: No other country has GST of this complex nature with such high taxes. The overheads are huge. It benefits accountants, at the cost of legitimate businesses.
3. IBC: It was supposed to clear NPAs of banks, but the process was clogged with delays and lawsuits. So no creditor wants to use it.
4. RERA for real estate was supposed to safeguard the buyer, but instead, it caused a slow down of the entire sector. Now lawsuits take years to resolve.

The Indian economy cannot be revived in the short run. By taking appropriate measures, the Indian economy can be put on a growth path, in the long run.

Cause of Rapes

Nitish Kumar says that porn sites are responsible for rapes in India. By the same logic:

• Crime serials are responsible for thefts.
• Violent movies are responsible for murders.
• Playgrounds are responsible for a lack of education.
• Shops responsible for credit card debts
• Share market responsible for suicides due to financial loss.
• Banks responsible for the poor economy; people save instead of spending.

If porn sites are responsible for rapes, then why are rapes so few in countries like Singapore? Even in Singapore, people have access to porn sites!

The key question is, whether a rapist is born or society makes someone a rapist. In most criminal cases:

1. The criminal had a bad childhood e.g. The parent/care-giver of the child used to beat the child ruthlessly.
2. The criminal started with small crimes e.g. stealing from a store. He got away with these crimes. In fact, he received praise for his daring. There was no one to correct the behavior of the child.
3. The criminal saw/hear others getting away with big crimes. So the size of his crime increased.

Politicians are trying to pass the blame to porn sites. If rape (and in general crime) has to be reduced, then

1. It should be a criminal offense to shout or hit a child of less than 5 year
2. A child of less than 15 years can only be hit for the purpose of self-defense; Any other cause, should be a criminal offence.
3. Justice should not take years. In a few months, punishment should be meted out for crimes taken.

Politicians don't want to punish parents, because children don't vote. Politicians don't want swift justice, because most politicians are criminals.

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.

Protect yourself from Bank failure in India

PMC bank was put under restrictions this week, by RBI, because of its huge NPAs. Many other banks also have significant NPAs. Other banks can also face similar restrictions. So what should a typical depositor do in India?

• Keep maximum Rs 1 lakh in one bank.
• If you have 3 lakhs, then open account in 3 banks and keep 1 lakh in each.
• Keep enough cash with yourself for a few weeks in event of some bank closure.
• Do not keep many lakhs of rupees in savings accounts of banks. Keep the remaining in Gold or silver. These precious metals have been money for many centuries.
• If your society or business needs to keep crores of rupees in current account of bank, then use the biggest bank you can find e.g. HDFC, SBI, etc.

The above steps will guard you against most problems of Indian banking sector.