Another Browncast is up. You can listen on Libsyn, Apple, Spotify (and a variety of other platforms). Probably the easiest way to keep up the podcast since we don’t have a regular schedule is to subscribe to one of the links above!
In this chat our 2 Resident US citizens and 2 Indians analyze US elections and its implications
“It was not the best of times , it was the worst of times , it was not the season of light , it was the season of darkness , it was not the spring of hope , it was the winter of despair ” I am talking about the 2020-2021 period when the world was battling Covid.. Like the rest of the world I too was stuck in my house , hearing bad news after other and trying to put on a brave face . Cricket briefly for a few months , the great India tour of Australia ending with the great heist at Gabba gave us moments of great joy but such events were few and far in between.
It was in this background that , for my motley set of old classmates and fellow “Cricket Tragics” as we called ourselves had a blast , thanks to Bansi ( Ajay Bansiwal) one of our founding members , who took us through a masterclass of World Cinema. He is a movie buff , one of the lucky few whose day job also involves movies and he has a treasure trove of great world movies – that were non English and Non Indian Language and gave us a sampling of great movies across various languages – Korean , Scandinavian , European and such. These were not “High Brow” art movies , in the situation that we were with near and dear and friend and colleagues all suffering , all of us needed some escapist fantasy without compromising on our aesthetics. So the movies Bansi recommended were not sad or serious movies even though they took upon real and serious issues but always in a entertaining “masala” way or as a black comedy. These are all as Desi or Indian as movies can be only in languages and cultures that are vastly different from us. Sort of gives us the reaffirmation that human emotions are rather universal !
In this podcast , Bansi and I talk about 15-20 such movies in no particular order of priority – the only common theme being , we enjoyed watching all of these possibly the most. These range from hard core violent Revenge movies to Slow Burn Crime Thrillers set in Argentina to absurdist black comedies and some picture perfect French work of art movies ! We have tried not to share spoilers in most cases and hope to hook you enough to make you search for these movies and have as much fun seeing them and discussing them as we had . These prove that a good yarn well narrated is always engrossing whatever language it be in or the culture or country it is based in !
The Movies discussed are
Sympathy for Mr Vengeance – Korean
Oldboy – Korean
Lady Vengeance – Korean
Memories of murder – Korean
Barking dogs never bite – Korean
I saw the devil – Korean
Welcome to Dongmakdol – Korean
Secretly Greatly – Korean
In China they eat dogs – Danish
Adam’s apples – Danish
Department Q series -Danish
The Alzheimer case – Dutch – Belgian Movie
Micmacs – French
Welcome to the Sticks – French
The band’s visit – Arabic/Hebrew – Israeli Movie
Marshland – Spanish
Nine Queens – Spanish – Argentinean Movie
Killing Cabos – Spanish Mexican Movie
Two rabbits – Portuguese – Brazilian Movie
The man who copied – Portuguese – Brazilian Movie
The following post is contributed by @saiarav from X or Yajnavalkya from Medium
Modi does the unthinkable – goes to polls with a non-populist (revdi-free) budget
At the start of this year, I had written about Modi’s excellent economic stewardship during his second term amidst a period of extreme economic turbulence globally – a once-in-a-century pandemic followed by a major war which roiled energy markets and rapid rate hikes in the West to combat inflation (Modi’s fiscal masterclass). I had noted then that Modi:
“has achieved the near impossible of following a disciplined fiscal policy while not just maintaining his political capital, actually expanding it”
But I had fully expected that he would open up the purse strings during the election year budget this February notwithstanding his public remonstrations against the growing revdi (freebies) culture. And for good reasons. One, Modi had gone in for a ‘revdi’ at the end of his first term in 2019 (the cash transfer scheme for 120 million farmers). And the economic scenario in 2024 was decidedly more mixed compared to 2019 with greater level of economic distress among the poor. Two, recent state elections had seen parties winning based on extremely aggressive freebie promises. For example, Congress won handsomely in Karnataka last year with promises of a slew of freebies (or welfare programs if you like) amounting to more than 2% of the state’s GDP. So I must not have been the only person who was stunned to see that Modi had decided that the normal rules of politics does not apply to him. And as of today, his judgment appears to be spot-on because the only debate about the 2024 elections appears to be what his margin of victory will be. The reasons for this – the so-called “akshat-wave” after the Ram mandir inauguration, the opposition being in absolute shambles, the ever-increasing political stature of Modi – calls for a separate discussion. In this post, I peer into the future and see what Modi’s fiscal statesmanship could potentially mean for the country.
A 10-year long fiscal tapasya….
For reasons that are not entirely clear, fiscal conservatism has been an article of faith for Modi throughout his career as an administrator. He has held on to it steadfastly during his entire 10 years as the the Prime Minister. For anyone familiar with Indian politics, it is easy to appreciate how challenging it can be to stick to fiscal discipline even during times of buoyant revenues. This makes his unrelenting fiscal focus all the more remarkable considering that for most of his tenure, he has been hemmed in by weak tax revenues. Therefore, to call Modi’s 10 year long commitment to financial discipline as a tapasya (penance) would not be out of place.
…might finally yield a Rs.20T (~$50bn) -sized fruit during Modi-3
And Modi is on the cusp of reaping the fruits of that tapasya in his third term. Barring unexpected shocks – electoral and economic – he could be presiding over a period where the economy has sizeable fiscal resources to pursue its socio-economic goals; a rare event in independent India’s economic history. Underpinned by a solid cyclical recovery in the economy and strong buoyancy in tax collections (direct taxes likely grew at 20% in 2023-24, twice the pace of nominal GDP growth), Modi-3 is not only placed very comfortably to meets its 2025-26 fiscal deficit target of 4.5% (vs. 5.8% in 2023-24), it will also have its disposal, up to Rs.4 trillion of fiscal space during 2025-26 for spending on new programs or projects (or >1% of GDP) after meeting its regular revenue and capital expenditure obligations. That is the base case which assumes direct taxes grow at 15% annually. In a bull case of direct taxes continuing to grow at 20%, the above figure could be as high as Rs. 5.5 trillion. Further, this figure will continue to swell with each succeeding year as the economy expands and revenue growth outpaces the growth in base expenditure. During Modi’s third term, I estimate that the central government will have up to Rs.20 trillion of aggregate fiscal space for new programs/projects. Also, note that many of the programs of the central government include contribution from the states, which means the total fiscal resources available could be well higher than Rs. 20 trillion.
(For those interested in the math behind the above numbers, I discuss the same at the end of the post) .
Potentially transformative, but availability of funds is not enough
What can one do with an annual budget of Rs.4 trillion? Well, for perspective, the Jal Jeevan Mission which was initiated in Modi’s second term with an annual budget outlay of Rs.0.7T (Rs.3.5T over 5 years, 60% funded by centre) will have provided tap water connections to 160 million households by end of 2024 (110 million connections provided as of April 2024). No commentary required on how transformative this project has been for the 100s of millions of beneficiaries.
In the first two terms, Modi’s focus was primarily on building physical infrastcucture – road building under Gadkari has been an unqualified success while in case of Railways, huge investments have been made, it is still a work-in-progress with mixed results so far. Even welfare schemes had a physical asset bias – from toilets to piped water to housing. While the government deserves a lot of credit for strong execution, it has to be underlined that these are relatively low-hanging fruits from a governance perspective. As the priority areas inevitably shift from road and railways to more complex ones, quality of policymaking, human capital and management will be the key drivers of outcomes, and not just availability of funds. To wit, it is way more difficult to develop 20 high quality IITs or a few hundred Kendriya Vidyalayas compared to building 100K kms of roads. Or just throwing around money into PLIs will not deliver a successful industrial policy.
An opportunity for Modi to cement his legacy – a wide range of focus areas to choose from
What areas Modi will prioritize with the Rs.4 trillion per year (~$50bn) of additional resources is anyone’s guess because this is one government which revels in keeping its plans a total secret. One can only say two things with certainty -one, Modi will be extremely keen to cement his legacy with a couple of flagship projects/programs which has a transformational impact on society. Two, the consummate politician that he is, he will have his eyes firmly on what programs will drive the optimal political benefit for the 2029 elections (and all the state elections over the next few years).
The list of potential programs is endless. Below, I discuss briefly a few ones which I see as critical ones. I classify them into 3 categories: A) long term strategic B) medium term economic growth and C) quality of life. Obviously, most of these programs will tick all three boxes, the classification is based on how a politician like Modi would want to see it. Admittedly, some of the resources might also simply get used up in standard fiscal management as well – ie Modi might simply want to reduce fiscal deficit at a faster pace, or execute the long pending reduction on tax surcharges on the rich or fill up the job vacancies in the government.
The second part is investment in energy transition. So far, the Modi government has bet big on solar but now it has also stated its intention of expanding its nuclear fleet (add 15 GW by 2030). While investments in solar power has been largely driven by private players, the government will need to play a big role in setting up nuclear plants. A back-of-envelope estimate for the cost of the plants would be $50 billion and it would be reasonable to assume that the government will have to invest close to half of that amount.
The fiscal math
Assumptions
Fiscal deficit falls to 4.5% by 2025-26 and below 3% by 2028-29.
A few points:
Another Browncast is up. You can listen on Libsyn, Apple, Spotify, and Stitcher (and a variety of other platforms). Probably the easiest way to keep up the podcast since we don’t have a regular schedule is to subscribe to one of the links above!
Mr. Tilak Devasher, Author, Member, National Security Advisory Board and former Special Secretary, Govt of India joins Maneesh, Somnath and Dr. Ali to talk about his latest book The Pashtuns- A Contested History.
Every time I used to play a strategy video game, my mind was firstly on money. Creating an income stream as well as buildings and units to magnify that income stream was the primary priority of my gameplay. Only then could I exercise my will and wrath on the codes of computer programming that were my enemies. I think recent history has shown us this is a powerful stratagem, especially on this side of the Atlantic.
As colony became country, America would dedicate itself to capitalism. In 1790, the US was a paltry nation with a population of 3.9 million spread across a vast and wild land. Only 7 cities had a population of over 5000 while 12 tipped over 2500; the rest found home in the wilderness. The inheritor of the great city of Rome was essentially one huge countryside. Yet by 1885, the US was nearing 60 million people and accounted for the production of 28.9% of global manufactured goods. Fast forward to today, and we have become an economic superpower never before seen. Only recently has the Middle Kingdom of the East challenged the writ of Washington, and it is still some ways away from being able to engage in a full on confrontation.
To understand American might, you must understand American economics. To understand American economics, you must understand American history.
Let’s turn back the pages.
Continue reading The Economic History of the American Empire
For a large part of history, the inhabitants of the Arabian peninsula were on the fringe in the rise and fall of empires. They alternated raiding and trading as this wheel of fire rolled on across the dunes. But eventually, the Arabian caravan would be equipped with both sword and word to make haste across the Old World in a relentless raid that would change both history and humanity.
Yet just as quickly as the prized Arabian horses would gallop into newly conquered lands, the Arabs would soon scatter leaving their language, faith, and the prestige of their roots behind in strange lands. Tribalism trumped their newfound unity and the Arabs would once again retreat into their wildernesses and pilgrimages.
That is until wealth erupted from its wastelands. The old elites of the Middle East would now return from their desert exile to begin another round of a game of thrones.
Another BP Podcast is up. You can listen on Libsyn, Apple, Spotify, and Stitcher (and a variety of other platforms). Probably the easiest way to keep up the podcast since we don’t have a regular schedule is to subscribe to one of the links above!
You can also support the podcast as a patron. The primary benefit now is that you get the podcasts considerably earlier than everyone else. This website isn’t about shaking the cup, but I have noticed that the number of patrons plateaued a long time ago.
This episode features Akshar and Mukunda talking to Cliff Smith and Sam Westrop of the Middle East Forum. We get into topics surrounding the relevance of the Deobandi movement, how Islamism percolates between South Asia and the West, and the political ramifications of Islamism in the US and the UK.
After finishing Escape from Rome: The Failure of Empire and the Road to Prosperity I continue to believe that geography and economics explain the basic reason for the very long ascendance of Turkic people in the Indian subcontinent, and, their eventual eclipse.
The context for this is the fact that many Indian and Indian American friends have posited cultural rationales for the Turkic hegemony. That is, there was a passivity and disunity in Hindu society which made it vulnerable to the Turks, who were also adherents to a separatist hegenomic ideology in the form of Musim. All this may very well be true, but I have always held that the key factor was that Turks and Muslims more general had ready and easy access to warhorses.
Between 500 A.D. and 1500 A.D. was the heyday of the nomadic pastoralist as a geopolitical force in Eurasia for various reasons. Even in the centuries after 1500 A.D. horses remained critical for mobility. The problem is that in much of agricultural Eurasia there is not sufficient pasturage to raise large numbers of horses.
Pretty much every Eurasian society within reach of the steppe (so basically every society except for those in Western Europe, Japan, and Southeast Asia) had to deal with the menace of armed nomads. Sometimes they paid them off. Sometimes they mobilized enormous armies which incurring crushing costs. And sometime they were conquered.
Between 1700 and 1900 this spectre faded. Improvements in military technology, transport, and mass national mobilization, leveled the gap between the steppe and the settled peoples, to the point where by 1900 the steppe was a marginal factor.
Note: the author of Escape from Rome attributes the rise and fall of Vijayanagara explicitly as a function of its access to horses.
Back in the 2000s on the Sepia Mutiny blog I would get frustrated with commenters who would talk about India as if it was analogous to Cuba or Israel, in that a group of American nationals with family ties could influence the shape of American policy. This was always a crazy proposition.
The reason that focused American ethnic lobbies could shape Cuba and Israel policy is that these are small nations which to be frank don’t matter that much.
There’s no Germany lobby. There’s no Russia lobby. There’s no China lobby. These nations are too important to get caught up in pure interest group politics. Similarly, there will never be an “India lobby.” Even personal relationships and affinities between leaders are irrelevant when realpolitik is too important. Think of the fact that Trump clearly has an affinity for Putin, but the American government continues to impose various sanctions on Russia.
Note: Because of its embeddedness in the Great Power jockeying between the USA, China, and India, there will also never be a “Pakistan lobby.”
Another BP Podcast is up. You can listen on Libsyn, Apple, Spotify, and Stitcher (and a variety of other platforms). Probably the easiest way to keep up the podcast since we don’t have a regular schedule is to subscribe to one of the links above!
You can also support the podcast as a patron. The primary benefit now is that you get the podcasts considerably earlier than everyone else. This website isn’t about shaking the cup, but I have noticed that the number of patrons plateaued a long time ago.
I would though appreciate more positive reviews! Alton Brown’s “Browncast” has 30 reviews on Stitcher alone! Help make us the biggest browncast! At least at some point.
This episode features Omar, Mukunda, and Akshar talking to Harsh Gupta, an investor and author. We discuss the big picture geopolitics of the Galwan clash in Ladakh, Indian civilization, and why Harsh is going long on India. Some positive vibes in a trying time for many!