The meteoric rise of military China in recent decades, is primarily due to the prosperity it earned, by becoming the world’s factory. Visit any mall in the USA and you will find that most of the products there carry the ‘Made In China’ tag. These products have been in demand, purely because they are cheap; cheap in price as well as quality. The Chinese goods have captured the Western markets to such an extent that it is as if that their entire demand for household goods is met by China. These markets have given huge profits to China, which now has foreign exchange reserves of about $4000 bn. If you compare it with India’s present forex reserves of about $400bn, you will understand the financial might of China today, which is being strategically transformed into military might. It has provided the China bully with the resources to bolster its muscle power and also its regular face offs with its numerous neighbours, with territorial ambitions to usurp territory. China has a long history of illegally occupying territories, with Tibet being just its most famous example. With a strong and nationalist Indian leadership, which has diplomatically decimated/isolated Pakistan (China’s all weather friend) in global circles, China has scaled up its belligerence towards India. It is now colonising Pakistan through the controversial CPEC project and seeks to contain India, by a twin strategy of increased skirmishes on the Pakistan border and the ongoing stand off in Bhutan. Xi, the powerful and ambitious Chinese leader also sees it as a means to consolidate his power, at the impending Communist Party elections in September. India’s real enemy today is China and not the puny Pakistan. To top it, in our trade, China enjoys an annual surplus of $50bn. That’s the extra cashflow we provide to China, ironically to fund its face offs with India. We are thus arming our own enemy against us. Buying Chinese products means providing resources to our enemy and strengthening its armoury against us. Indians need to boycott Chinese products. The tag on such products is not ‘Made in China’ but ‘Made By Enemy of India’.
LOADED WITH DEBT
As the banks initiate liquidation proceedings against their biggest defaulters, under the RBI diktat, to recover their lost dues, all the skeletons, so dubiously/dextrously hidden in bank cupboards (which the seniormost bankers did by manipulating their accounts), are falling out. The biggest of Indian corporates are either defaulters, or are on the verge of loan defaults and are thus desperately downsizing. Essar has already sold its oil assets to Rosneft Russia, Tata has sold off its illfated Corus Steel UK which it had acquired at a highly inflated price, Anil Ambani is looking out for buyers for an entire menu card of his assets on sale, as other big names like Bhushan Steel etc. face liquidation proceedings. It is apparent that their debt funded expansion in the last decade was mindless and due to their influence in the corridors of power, it was recklessly funded by banks. Both the lender as well as the borrower, threw prudence and caution to the winds. These corporate leaders are now sitting on huge bank loans, which they are unable to repay. The shocking part is that there are no matching assets against these gigantic loans given. CRISIL estimates that these loans have a mere 40-% asset cover, implying a 60% haircut for banks in loans recovery and a loss to that extent. This saga of reckless/fraudulent lending explains why, in the last three years of rising loan default, the growth of India has been largely funded by government spending and the private sector investment has been missing. The private sector is loaded with mountains of debt default, ruling out any fresh investment by it. Much as the government needs to desperately get the private sector into the growth game, to create genuine and sustainable market dynamism, its efforts are unlikely to succeed. If the big guns of Indian business are already struggling, defaulting and downsizing, then where is the question of their ability to invest in new projects. That’s ruled out at present. In such a scenario, with the government making it more and more easy and attractive to invest in India, the foreign investors are having a field day. It is they who are investing in India in large numbers and are reaping the growth opportunities of the present era. As India’s debt laden private sector misses the bus, it is the foreign players who will reap the benefits of the rapid growth that our economy is expected to witness. If they pumped in $62bn last year, it will be much more in the years to come`.
Learn From London
Under India’s foreign exchange laws, foreigners are not allowed to purchase immovable property in India and yet, they manage to do so. There are many known instances of Russians buying property in Goa, Maldivians acquiring property in Coorg/Karnataka, Arabs purchasing it in Hyderabad and coastal Kerala and Bangladeshis doing so, all over India. Such illegal property purchases by foreigners, is a cold blooded encroachment of India, which gives a beach head to enemy interests on our soil. Such property acquisition, at times, takes place in benami names, but is very often directly registered in the names of the foreigners, taking advantage of their names/skin colour, with the aid of colluding property brokers and registering authorities. The RBI has issued a stern warning to state authorities, to be vigilant against property purchases by foreigners. India needs to prevent such a stealthy invasion of its territory, which gives shelter to its own enemies. London too has been facing a rampant illegal acquisition of its properties by foreigners. A report by Transparency International identified properties worth £4.2 bn that were bought by foreigners with suspicious wealth. Ineligible persons from all over the globe, including those with links to crime and terrorism are known to have easily acquired tony London properties, certainly with the help of shady operators. Britain has now passed a law, allowing the seizure of properties purchased by foreigners, who cannot explain the source of their funds. It is a landmark measure to tackle the menace of dubious money in the London real estate market. The newly minted law is expected to be a game changer to prevent money laundering by wealthy individuals, through mansions bought in the affluent boroughs of London. The new law enables the UK government to seize and sell property acquired through illegal routes. India needs to learn from London, to uproot the foreigners who are illegally rooted in India, through such property acquisitions. The entire Western coast of India is populated with such questionable individuals, and poses a threat to the security of India. Its time to learn from London for a change.
THE CHIDU CONSPIRACY
The INX Media-Kanti Chidambaram (KC) case is an incriminating one, as is evident from the emanating facts. It all began in 2007, when P Chidambaram (PC) was India’s Finance Minister. The Forign Investment Promotion Board (FIPB) that PC headed, gave an approval to INX Media, then owned by the criminal duo of Peter/Indrani Mukharjea,(now languishing in Mumbai’s infamous Arthur Road Jail), to receive foreign investment of Rs.4.62 crores. The FIPB permitted no downstream investment out of such funds, since it violated the FDI regulations. Against the FIPB approval of Rs.4.62 crroes, INX Media, brought in a mind boggling Rs.305 crores from Mauritius and also blatantly made a downstream investment in INX News, wholly contrary to the FIPB approval.
The Financial Intelligence Unit, spotted this audacious violation by INX in 2008, and informed the Income Tax Department, (ITD) which in turn passed on the news to the Enforcement Directorate. While the ED began investigation in 2010, the ITD being directly under the FM, did nothing. INX Media, in order to regularise its gross violations, used the services of KC, to ‘amicably resolve’ its transgression of law. KC used his good offices to telling effect. FIPB ‘requested’ INX News to put in a fresh application, which was promptly accepted and its serious irregularities were buried. This approval by FIPB under KC’s intervention was deceitful and fallacious. INX went scot free, while KC was richer by a few crores, for ‘services’ rendered.
PC is not the FM any more. This outlandish crime, which should have been in hot pursuit by the investigating agencies, is now being pursued. KC was raided by the ED a few weeks ago, followed up IT and CBI raids yesterday. A defiant PC and the Congress Party calls it as political vendetta to silence his writing and speaking. While the courts will ultimately decide the case, the dots connect easily and put KC/PC in the dock. The raids are heartening to the common man. The high and mighty are being held accountable for shocking misuse of power and utter corruption and it looks that no one is above the law of the land. A corrupt person is of the same ilk, respective of the power he weilds. The law should not differentiate. The government too should not cherry pick and should punish the wrong doers, irrespective of their political affiliations.