Arvind's Newsletter

1.With a GDP growth of 7.6% in September quarter, India remains the fastest-growing economy in the world.

Moreover,the output of eight key infrastructure sectors jumped by 12.1 per cent in October 2023 against 0.7 per cent expansion in the year-ago period on account of a sharp uptick in production of coal, steel, cement and electricity, according to the official data released on Thursday.

These numbers assume significance as the eight core sectors -- coal, crude oil, natural gas, refinery products, fertiliser, steel, cement and electricity -- contribute 40.27 per cent to the Index of Industrial Production (IIP).

The RBI had maintained real GDP growth for 2023-24 at 6.5 per cent with Q2 at 6.5 per cent, Q3 at 6.0 per cent, and Q4 at 5.7 per cent. At its last monetary policy meeting, the central bank showed utmost concern on the rising inflation and its attached potential risk to the growth outlook.

2.The Union government may end up spending Rs 50,000 crore more than the budget estimate (BE) on the three major subsidies — fertiliser, food and cooking gas — during the current financial year, reported MoneyControl

The maximum slippage of Rs 25,000 crore would be in fertiliser subsidy where the revised estimate (RE) is likely to be Rs 2 lakh crore against a BE of Rs 1.75 lakh crore. Food subsidy will increase by Rs 15,000 crore with the RE rising to Rs 2.12 lakh crore against the BE of Rs 1.97 lakh crore. Cooking gas subsidy will overshoot the BE of Rs 2,250 crore by Rs 10,000 crore. 

The underachievement of targets is a manifestation of an attempt by the ruling dispensation to artificially suppress the BE in order to show a better picture of the fiscal deficit in line with the pattern seen in the past. The jump in fertiliser subsidies shows the government’s inability to correctly assess likely movement in the global prices of fertilisers and fertiliser raw materials (FRMs) during the course of the year. Besides, the unwillingness of the political brass to increase the maximum retail price (MRP) of fertilisers, even by a small amount, makes sure that the actual subsidy payout always remains higher. 

3.U.S. Says Indian Official Directed Assassination Plot in New York

An Indian government employee conspired to assassinate a US citizen in June, US prosecutors charged yesterday. The foiled plot allegedly targeted a New York City-based Sikh separatist leader, a faction of the Indian religious minority group who seeks an independent state in northern India. 

Charging documents detail the unnamed senior officer's recruitment of 52-year-old Indian national Nikhil Gupta to hire a hitman in May. Gupta's efforts led him unwittingly to an FBI source, who referred Gupta to an agent undercover as an assassin. The target,Gurpatwant Singh Pannun, is an attorney for the separatist group Sikhs for Justice and was designated as a terrorist in 2020 by New Delhi. Gupta was arrested upon traveling to the Czech Republic in late June.

The news threatens to strain ties between the US and its ally India as each looks to counter China's global influence. US officials claim the plot was connected to the killing of another Sikh separatist in Ottawa that same month, which later prompted a diplomatic spat between Canada and India.

Meanwhile, the Financial Times reported India has announced it has formed a committee to investigate security issues after the US warned New Delhi over an alleged assassination plot targeting a Sikh separatist on American soil.

4.Inside India’s Gargantuan Mission to Clean the Ganges River, reports Wired.

The Ganges river is one of the world’s most sacred waterways—and one of its most polluted.To restore it, India is undertaking one of the biggest engineering programs in the history of sanitation.To restore it, India is undertaking one of the biggest engineering programs in the history of sanitation.

“The Ganges is one of the most densely populated river basins in the world, providing water for an estimated 600 million people. But to Hindus, it is more than a waterway: It is Ma Ganga, the mother river, formed—according to the sacred text the Bhagavata Purana—when Lord Vishnu himself punctured a hole in the universe and divine water flooded into the world. Water from the Ganges is widely used in Hindu prayer and ceremony; you can buy plastic bottles of it from stalls all over the subcontinent—or order one on Amazon in the UK for as little as £3.”

“And yet despite its sacred status, the Ganges is one of the most contaminated major rivers on earth. The UN has called it “woefully polluted.” As India’s population has exploded—in April 2023, it overtook China to become the world’s most populous country—hundreds of millions of people have settled along the Ganges’ floodplain. India’s sanitation system has struggled to keep up. The Ganges itself has become a dumping ground for countless pollutants: toxic pesticides, industrial waste, plastic, and, more than anything, billions upon billions of liters of human effluent.”

“India is also unique, in that Hindu culture places rivers at the center of religious beliefs. And it’s for this reason the Modi government, alongside its Clean India Campaign, launched an expensive infrastructure plan to clean up the national river: the Namami Gange (“Obeisance to the Ganges”) program. It is by no means the first attempt. Previous governments have been launching “‘action plans”’ to clean the Ganges since at least the 1980s. But past efforts, beset by alleged corruption and mismanagement, rarely got far. “

“To date, the Namami Gange program has cost over 328 billion rupees ($3.77 billion) and promised the construction of more than 170 new sewage facilities and 5,211 kilometers of sewer lines—enough to cross the Atlantic Ocean. It is a fascinating test case in the global effort to clean up our rivers and seas.” Read on

5.These are the world’s most expensive cities according to the Economist.

The global cost-of-living crisis that began in 2022 is now so much part of daily life that it is entering the vernacular. “Cozzie livs”, British slang for the crisis, was recently named Australia’s word of the year by the Macquarie Dictionary. The latest Worldwide Cost of Living survey by eiu, our sister company, confirms that inflation remains high worldwide: the prices of 200 products and services that it tracks rose by an average of 7.4% over the past year. This is down slightly from 8.1% in 2022, but remains well above the average of 2.9% over the previous five years. Our map and chart below reveal which cities are the most expensive.

Tied in first place this year were Singapore and Zurich. Singapore is no stranger to the top spot: it has ranked as the priciest place to live in nine of the past 11 years. Groceries, alcohol and clothing in the international business hub can cost a small fortune. The cost of a certificate needed to own a car (which the government wants to discourage) recently topped $106,000. Zurich, meanwhile, jumped five places from last year. Switzerland’s largest city is perennially pricey; it came joint first in 2020 and rarely leaves the top ten. Its rise to the top of the index is mostly because the Swiss franc has appreciated by more than 10% against the dollar over the past year.(The survey’s benchmark city is New York, so if a country’s currency strengthens its cities will generally move up the ranking.)

Western European cities, including Copenhagen, Dublin and Vienna, take around half of the top 20 spots. Rising prices are one reason. Another is that the European Central Bank raised interest rates six times in 2023 to tame inflation, which caused the euro to appreciate by 7% against the dollar. North American cities dropped in the ranking this year: New York, last year’s joint most-expensive city with Singapore, fell to third place. Geneva came in joint third with New York.

Hong Kong, Los Angeles and Paris came 5th, 6th and 7th respectively. Tel Aviv and Copenhagen came in joint 8th. San Francisco rounds up the top 10 in 10th place.

Beijing was one of four Chinese cities among the ten biggest decliners in the ranking. That reflects the depreciation of the renminbi and the faltering of China’s recovery from the pandemic. Moscow and St Petersburg fell furthest, plummeting by 105 places to 142nd and by 74 places to 147th, respectively. The rouble collapsed against the dollar because of Western sanctions on Russian oil and high levels of military spending.

In last year’s report EIU predicted correctly that energy prices and supply-chain problems would ease in 2023. This year’s ends on a more pessimistic note. Interest rates are unlikely to come down soon, which will constrain economic growth; energy prices could rise again if the Israel-Hamas war spreads across the Middle East; and El Niño—which began in June and will last well into next year—could yet push up food prices. “Cozzie livs” will remain popular into 2024.