Indian Rupee Plunges Past 90 Against US Dollar Amidst Deepening Economic Concerns

https://markets.financialcontent.com/stocks/article/marketminute-20...

Mumbai, India – December 3, 2025 – The Indian Rupee (INR) today crossed a critical psychological threshold, breaching the 90 mark against the US Dollar (USD) for the first time in history. This unprecedented depreciation, with the currency hitting an intraday low of 90.30 before settling at 90.19, signals a period of heightened economic anxiety for India. The rupee's swift decline, marking it as Asia's worst-performing currency in 2025, is a stark indicator of persistent foreign capital outflows, a widening trade deficit exacerbated by surging gold imports, and a globally strong US Dollar.

The immediate implications are far-reaching, threatening to fuel imported inflation, increase the burden of foreign debt for Indian companies, and dampen overall market sentiment. While a weaker rupee typically benefits exporters, the current environment of global economic slowdown and specific US tariffs complicates this advantage, leaving policymakers and businesses grappling with a complex economic landscape.

Historic Slide: A Confluence of Global and Domestic Pressures
The Indian Rupee's journey to 90 against the US Dollar has been a culmination of several intertwined economic forces throughout 2025. On December 3, 2025, the currency fell sharply, extending a period of sustained depreciation that saw it dip below 89.95 on December 2 and a record low of 89.76 on December 1. This rapid descent from the 88+ level to 90 within a single week has sent jitters across financial markets.

A significant catalyst for this sharp depreciation was the announcement of sweeping US tariff hikes on April 2, 2025. India's tariff burden, at 50%, is considerably higher than that of other major economies, directly impacting approximately $45 billion worth of Indian exports, particularly in labor-intensive sectors. This, coupled with a prolonged delay in finalizing a comprehensive trade deal with the United States, has cast a long shadow over India's export competitiveness and investor confidence.

Adding to the pressure are persistent Foreign Portfolio Investor (FPI) withdrawals. Foreign investors have been consistent net sellers in the Indian markets, withdrawing nearly $17 billion from Indian equities in 2025 alone. This sustained selling has created unprecedented demand for the US dollar, widening the demand-supply gap in the foreign currency market. Factors driving these outflows include declining corporate profitability, concerns over stretched valuations, and the lingering uncertainty surrounding US-India trade negotiations.

India's heavy reliance on imports, particularly crude oil, electronics, and bullion, further exacerbates the situation. Rising global commodity prices inflate India's import bill, necessitating a significant demand for US dollars and putting continuous downward pressure on the rupee. The Reserve Bank of India (RBI) has adopted a more "hands-off" and "calibrated" approach to currency intervention, primarily aiming to curb "excessive volatility" rather than defending a specific exchange rate level. While the RBI has intervened by selling dollars (reportedly $30 billion between June and October 2025), its strategy appears to allow market forces greater sway, contributing to the rupee's swift depreciation.

Initial market reactions beyond just the stock market (where the Nifty slipped below 26,000 and the Sensex fell nearly 200 points) included heightened volatility in the foreign exchange market, rising bond yields due to inflation concerns, and increased hedging costs. The rupee's fall directly fuels imported inflation, particularly for crucial commodities, which can erode purchasing power and complicate the RBI's monetary policy decisions.

Is India really the fastest-growing economy? Economist Arun Kumar breaks...

https://youtu.be/8SYDPqB6Qhg?si=8qvGoQy0Lq4VTbZR

In this episode of Frontline Conversations, economist and retired professor from JNU, Arun Kumar, breaks down the turmoil inside India’s economic data ecosystem. He discusses the latest GDP numbers, the IMF’s “not fit for purpose” assessment, and India’s contradictory economic indicators all point to a deeper structural crisis.

Kumar explains why GDP growth is increasingly detached from lived economic realities, how the unorganised sector has been rendered invisible in official measurement, and why the 2011–12 base year has distorted national accounts for a decade. He also details the political pressures shaping data releases—from unemployment and consumption surveys to poverty estimates—and warns that the upcoming revision of the GDP series may still fail without census data and transparency in methodology.

Highlights:
-Why India’s GDP numbers are unreliable—and what the IMF got right
-How the shift to the MCA-21 database and removal of shell companies distorted growth estimates
-The systematic invisibilisation of the unorganised sector after demonetisation, GST and the pandemic
-Manipulation of data on employment, consumption, poverty and health
-The political logic behind “fastest growing economy” narratives
-Why GST cuts, corporate-friendly labour codes and tariff geopolitics are worsening inequality

Perfect for those interested in:
-Students of economics and public policy
-Researchers of political economy and development studies
-Informal sector and labour rights activists
-Think-tank analysts tracking India’s macroeconomic indicators

Credits:
Host: Sukumar Muralidharan
Camera: Vedaant Lakhera and Vitasta Kaul
Editing: Razal Pareed
Producers: Mridula Vijayarangakumar and Kavya Pradeep M

Indian rupee slips to record low, central bank intervention curbs fall


https://www.reuters.com/world/india/indian-rupee-weakens-record-low...

Summary
Rupee down nearly 6% on year, worst performer among Asian FX
Lack of trade deal with US key drag
Foreign investors sell over $18 billion of Indian stocks YTD
MUMBAI, Dec 15 (Reuters) - The Indian rupee fell to a record low on Monday, pressured by a prolonged deadlock in U.S.-India trade negotiations and sustained foreign outflows from domestic equities and bonds.
The rupee weakened 0.3% to 90.74 against the U.S. dollar, eclipsing its previous all-time low of 90.55 hit on December 12.
Get the latest news from India and how it matters to the world with the Reuters India File newsletter. Sign up here.
The currency, Asia's worst performer this year, avoided steeper losses amid likely central bank intervention, four traders told Reuters.



The rupee has declined nearly 6% against the dollar year-to-date, as steep U.S. tariffs of up to 50% on Indian goods hurt exports to its biggest market and diminish local equities' appeal to foreign investors.
Overseas investors have net sold Indian stocks worth more than $18 billion so far in 2025, making India one of the worst-hit markets in terms of portfolio outflows. Foreign investors have net sold bonds worth over $500 million in December.


India's trade data for November is due later in the day, with economists pencilling in a $32 billion goods deficit, down from a record high of $41 billion in October.


Remarks from India's chief economic adviser that the trade deal is likely only by March have bogged sentiment down, and outflows have been near-constant, a trader at a Mumbai-based bank said.
India and the European Union, meanwhile, are also unlikely to finalise a trade deal by this year's end, Bloomberg News reported on Friday.


This means the rupee has been unable to benefit from a broadly weaker dollar. The dollar index is down 1.1% so far this month.
"The next support (for rupee) is at 90.80, after which we could see a crossover of 91 towards 92. RBI has clearly let the market to determine the price and has been intervening only to control any excessive volatility," said Anil Bhansali, head of treasury at Finrex Treasury Advisors.


Analysts at ANZ say that while an India-U.S. trade deal could spur a knee-jerk rebound in the rupee, its strength could fade if the RBI chooses to rebuild reserves by purchasing dollars.
India's foreign exchange reserves stood at $687.3 billion as of December 5, down from the year-to-date peak of $703 billion hit in early September.
India's benchmark equity indexes, the BSE Sensex (.BSESN), opens new tab and the Nifty 50 (.NSEI), opens new tab were down 0.2% each, tracking losses in regional shares as sentiment remained tepid heading into a week of key data releases and central bank meetings.

It is now widely understood that India's official GDP is highly exaggerated. IMF has questioned it and Indian economists like Prof Arun Kumar have said India's actual GDP is as low as 50% of the official GDP, mainly because of the way the rapidly declining unorganized sector is overestimated by Indian officials.

https://www.riazhaq.com/2025/11/imf-questions-modis-gdp-data-is-ind...


On the other hand, Pakistan's unorganized GDP is significantly underestimated. It can be seen in the size of Pakistan's cash economy (currency in circulation) which is much larger as a percentage of the total economy than in India and Bangladesh.

https://propakistani.pk/2025/10/10/pakistans-real-economy-is-near-1...

“Pakistan’s recorded economy stands at US$411 billion, but nearly half remains undocumented,” the (finance) minister (Aurngzeb) said. “The real size of our economy is closer to a trillion dollars.

https://www.riazhaq.com/2021/12/has-bangladesh-really-left-india-an...

"Pakistan’s currency in circulation reaches Rs10.8 trillion ($38.5 billion) , up 27.4% of total money supply"

https://profit.pakistantoday.com.pk/2025/08/28/pakistans-currency-i...

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Countries with most cash use in world in 2025: Pakistan in top 10; know where India ranks

List of top 10 countries with most cash usage in 2025: At the top of the list is Myanmar, where cash is used for about 98 per cent of everyday transactions.

https://indianexpress.com/article/trending/top-10-listing/countries...

With around 90 per cent of everyday transactions being performed in cash, Pakistan is likewise at the top of the list. Here, the sizable informal economy is crucial. Cash is preferred by many daily wage workers and small business owners, in part to avoid complex banking procedures and occasionally to avoid paying taxes.

How much Cash do Indians use in 2025?
Approximately 70 per cent of all transactions in India involve cash, despite the country not ranking among the top 10. However, India is notable for spearheading the revolution in digital payments. With just a smartphone, millions of individuals may now send and receive money without using cash thanks to the government-backed Unified Payments Interface (UPI). UPI has made digital transactions quick, simple, and accessible for both online and street merchants.

India Looks To Boost Nuclear; Power Demand Lags GDP Growth By Far - Bloomberg

https://www.bloomberg.com/news/newsletters/2025-12-16/india-looks-t...


Why is India’s power demand up barely 1% if GDP growth is tracking 7%-8% this fiscal year?

It started with several reports that show power demand growth at 0.9% during April to November. That, too, on a weak base of 3% growth last fiscal year through March.

A key reason is a cooler summer and an extended monsoon — unseasonal rains in May and October lowered use of irrigation pumps in rural areas and air conditioners in cities, Murtuza Arsiwalla, director of research at Kotak Institutional Equities, told me.

But that doesn’t explain why power demand declined last month, making it the first November contraction in five years. Arsiwalla adds two more reasons to the list — a rise in off-grid power supply, such as captive and rooftop solar power, and moderation of industrial activity, which is 40% of all power consumption.

Typically, power demand growth is about 0.9 times GDP growth, with exceptions in some years. Right now, that ratio is running at about 0.1. Economists caution against reading too much into the correlation. One pointed to the less energy intensive services sector dominating economic growth. The other suggested rising energy efficiency across the economy, citing the modest increase in fuel consumption despite a pick-up in GDP growth post-pandemic as evidence.

To be sure, some analysts expect power demand to bounce back. Till that happens, the data casts a shadow over the strength of India’s economic recovery. It also spells trouble for an energy sector already concerned about oversupply and rising instances of solar power curtailment.

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Tax collections of the Centre have grown only 4% between April and October 2025, way below the fiscal 2026 target of 11% growth


https://www.moneycontrol.com/news/opinion/india-s-gdp-outperformed-...

@ShoaibDaniyal

Had a fascinating chat with @arvindsubraman and Devesh Kapur.

They argue that India's official GDP data is wrong.

They posit that the liberalisation phase ended a decade+ back.

India's growth has fallen sharply since then.


https://x.com/shoaibdaniyal/status/2001998168041652333?s=61&t=m...


https://youtu.be/KfEk0mEiK8I

In A Sixth of Humanity, political scientist Devesh Kapur and economist Arvind Subramanian set out to do something ambitious: chart India’s development journey from Nehru to Modi.

In this episode of Adda, they sit down with Shoaib Daniyal and break down the four stages of India’s development. Starting with Nehru’s planned economy, which they argue did not do what it set out to: import substitution. Rather than create a safe space for Indian industry to grow and then eventually take on international competition, it ended up nearly killing the private sector.

Interestingly, Modi might be doing something similar now by promoting so-called national champions like Adani and Ambani. Again, by allowing them to largely play in the domestic space, rather than making them take on international competition, these firms are not adding to India’s growth story.

Most shockingly, however, Kapur and Subramanian argue that India’s GDP growth has ground to a halt over the last decade or so, with them estimating that average growth has been only around 3%. For context, official data reported that India’s real GDP grew 8.2% in the second quarter of 2025-26.

Ignis Rex
@Ignis_Rex
India’s Missing Middle: A Society Without Values Cannot Create Prosperity

India’s absence from the global middle-class map is not a statistical anomaly—it is the logical consequence of a society that has never been built on principles, values, or institutions that sustain prosperity.

Bloomberg’s recent analysis rightly points out India’s fading presence in the global middle-income bracket. But the deeper truth is this: India is not merely unequal; it is structurally incapable of producing a middle class.

A Hollow Growth Story

For decades, India has been celebrated as “the next big market.” Economists and investors have projected a rising consumer base, a demographic dividend, and a vibrant democracy. Yet the reality is starkly different. India’s economy is polarized between a tiny elite and a vast underclass. The so-called middle class is a mirage—fragile, precarious, and dependent on patronage rather than merit.

Unlike China, which built factories, infrastructure, and disciplined institutions to lift hundreds of millions into middle-income status, India has relied on slogans, subsidies, and rent-seeking. The result is an economy where luxury malls flourish for the elite, while the majority struggle for subsistence. There is no broad-based demand, no stable middle-income consumer, and no genuine ladder of upward mobility.

Why Inequality Is Entrenched

India’s inequality is not simply economic—it is cultural and institutional.
- Caste and tribalism: Social hierarchies remain rigid. Meritocracy is suffocated by caste privilege, nepotism, and political favoritism.
- Corruption as culture: Rules are bent, contracts ignored, and corruption normalized. In India, dishonesty is not an exception—it is the operating principle.
- Absence of civic values: Societies that sustain a middle class are built on trust, accountability, and respect for law. India has none of these. Institutions are hollow, enforcement is arbitrary, and opportunism is the only ethic.
- Protectionistic policy that punish foreign manufacturers and brands for being successful in the Indian market and dare to compete successfully against local heroes. India normally used tax and custom procedures to harrass these foreign companies.

Why is value and principle important for a society? Without values, inequality becomes entrenched. Without principles, institutions collapse into corruption. And without institutions, there can be no middle class.

The Mirage of Democracy

India’s defenders point to its democracy as a safeguard. But democracy without values is merely populism. Elections are won through caste arithmetic, handouts, and manipulation. Policy is reactive, incoherent, and designed to appease factions rather than build institutions. The middle class, which in other societies acts as a stabilizing force, is too weak to play that role in India. Instead, politics amplifies division and entrenches inequality.

Global Implications

India’s failure to build a middle class has consequences beyond its borders.
- Economic fragility: Without a strong middle-income base, India’s growth story is unsustainable. Domestic demand will remain polarized, vulnerable to shocks, and incapable of driving global markets.
- Geopolitical weakness: India cannot credibly claim to rival China when it lacks the social and economic foundation of a middle class.
- Investor caution: For global capital, India offers opportunities at the top and bottom of the pyramid—but the broad consumer market that sustains long-term investment is missing.

Conclusion

India’s missing middle is not a temporary setback—it is the inevitable outcome of a society that has never embraced values of fairness, merit, or accountability. Until India confronts its cultural and institutional dysfunction, it will remain a deeply unequal society, incapable of producing prosperity for the majority of its people.

https://www.bloomberg.com/opinion/articles/2025-12-18/why-india-fel...

https://x.com/Ignis_Rex/status/2001987658726396311?s=20

Sensex lags Pakistan, China and other major global markets this year by wide margin — what to expect in 2026?
Story by Saloni Goel


https://www.msn.com/en-in/money/markets/sensex-lags-pakistan-china-...


After displaying sharp outperformance over the last few years, the Indian stock market has taken a back foot in 2025. The returns offered by major global peers have eclipsed Sensex's performance as the index remained in consolidation mode amid several headwinds like steep tariffs, record FII outflows and fading earnings growth.

The extent of India's underperformance is such that it's also lagged its neighbour Pakistan, whose stock market has not only given high double-digit returns but also remains one of the top-performing global markets.

India vs Global markets

Sensex touched a record high this year. Yet, this feat was achieved after a gap of 14 months in November this year. The index has risen almost 9%, as the macro setup remained positive.

Yet, when compared to Pakistan, it's almost a sixth of the 52% return offered by the KSE 100 index this year, making it one of the best-performing markets globally. Pakistan’s surge is explained by its small market size alongside IMF support and domestic rate cuts that spurred liquidity.

Meanwhile, India’s underperformance this year is not about weak fundamentals, but about sentiment and missing foreign flows, said Harshal Dasani, Business Head at INVAsset PMS. Foreign investors have net sold Indian equities worth ₹156,852 crore in the last one year.


The weakness in the rupee, along with earnings slowdown, has reduced the Indian stock market's appeal for the FIIs. Another factor that has driven them away is the steep 50% tariff imposed by US President Donald Trump on Indian exports to the US.

Among other global markets, South Korea's KOSPI has topped the charts, with a massive 68% surge. Other Asian peers like China, Hong Kong and Japan have also delivered two or three times the returns by Sensex, having risen 16%, 28% and 29%, respectively in a year.

The mother market US has also delivered a stellar rally. Its broader S&P 500 index has seen a 15% rise. Meanwhile, the UK's FTSE 100 index has gained 21%.

Can Indian stock market reverse underperformance?

Analysts believe mojo can return to the Indian stock market once clarity emerges on the India-US trade deal front and flows return.

Dasani said that on most domestic and global parameters, India is positioned for a strong next leg. "Globally, conditions are supportive. Crude prices have remained below USD 70 per barrel, easing inflation and external pressures. Domestically, GDP growth is around 8.2%, RBI has cut rates, tax measures have supported consumption, and festive demand has lifted activity. Retail and domestic institutions continue to buy. The only overhang is FII caution, largely linked to uncertainty around India-US trade relations," he opined.

Pegging his view on when FIIs can likely return, Kranthi Bathini of Wealthmills Securities, said that earnings recovery coming to track will bring FIIs to the Indian markets again. He expects this to happen in the middle of 2026. Meanwhile, he remains bullish on the Indian stock market.

Global brokerages, too, have displayed their confidence in Indian equities, upgrading their ratings. Goldman Sachs, earlier in November, reversed its October 2024 downgrade, as it raised its rating for the Indian stock market to "overweight" from "neutral".

Similarly, in September this year, HSBC had upgraded its stance on Indian equities from "neutral" to "Overweight", citing improved valuations, supportive government policies, and resilient domestic

@SushantSin

If economy is growing at more than 8% during the same period, how can housing sales be falling? Surely, someone will find a convoluted explanation, as they have about very low power consumption growth and below-target tax collections.


https://x.com/sushantsin/status/2004783345465786671?s=61&t=mgTx...

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Fewer houses sold in 2025 in top seven cities; Chennai bucks the trend
Hit by ever-increasing property prices, layoffs in the IT sector, geopolitical tensions, and other uncertainties, the sector reported a sharp dip in housing sales.


https://www.newindianexpress.com/amp/story/business/2025/Dec/26/few...

India's realty sector in 2025 disappointed most developers with sales struggles plaguing all but top players.

Hit by ever-increasing property prices, layoffs in the IT sector, geopolitical tensions, and other uncertainties, the sector reported a sharp dip in housing sales. Real estate consultant firm ANAROCK Research's data indicates that housing sales in India's top 7 cities witnessed a 14% decline in 2025, with approx. 3,95,625 units sold in the year against 4,59,645 units in 2024.

Mumbai Metropolitan Region (MMR) witnessed the highest sales of approximately 1,27,875 units, registering an 18% yearly decline. Pune followed with approximately 65,135 units sold, declining by 20% y-o-y. The two western markets together led residential sales in 2025, comprising a 49% overall share.

Besides Chennai (up 15%), sales declined year-on-year in all the remaining six major markets. Hyderabad (down 23%), Pune (down 20%) and MMR (down 18%) registered sharply decline in sales.


Year of upheaval

"2025 has been a year of broad-spectrum upheaval including geopolitical turmoil, layoffs in the IT sector, tariff tensions and other uncertainties," said Anuj Puri, Chairman – ANAROCK Group.

"The year's trend was of sale volumes stabilising at around 4 lakh units across the top 7 cities, but growth in overall sales value. Our data shows that more than 21% of the new supply was launched in the above Rs 2.5 crore price bracket. Interestingly, the average residential price growth rate has tapered down from double digits in previous years to single digits in 2025," added Puri.

Prices in the top 7 cities collectively rose 8% annually, and only NCR saw double-digit growth at 23%, largely due to a higher new supply of pricier homes. The other major cities recorded single-digit price appreciation, ranging between 4-9% in 2025 as against last year’s 13-27% in 2024.

Out of NCR's total new supply of 61,775 units during the year, over 55% was priced over Rs 2.5 crore. Owing to a constant rise in property prices and better demand for luxury apartments, the overall sales value of housing units saw a 6% yearly jump -- from Rs 5.68 lakh crore in 2024 to over Rs 6 lakh crore in 2025.

The share of new supply of homes priced more than Rs 2.5 crore in the top 7 cities made up a significant 21% in 2025, as against 18% in 2024. New launches in the top 7 cities saw a 2% annual increase -– from 4,12,520 units in 2024 to 4,19,170 units in 2025.

MMR and Bengaluru saw the maximum new launches, together accounting for almost 48% of the new supply in the year.

AI Overview

Former Chief Economic Advisor Arvind Subramanian claimed India's GDP growth was significantly overestimated (by ~2.5 percentage points annually) between 2011-12 and 2016-17, suggesting actual growth was around 4.5% instead of the reported 7%, due to changes in data sources and methodology, particularly affecting manufacturing, sparking debate and rebuttal from the government.
Subramanian's Core Argument (2019):
Overestimation: In a Harvard working paper, Subramanian argued that India's GDP growth was overstated by roughly 2.5 percentage points per year between FY12 and FY17.
Actual vs. Reported: He suggested real growth was closer to 4.5%, compared to the official 7% average for that period.
Evidence: He cited breakdowns in correlations between GDP and 17 high-frequency indicators (like industrial production, exports) and issues with manufacturing sector data after methodological changes.
Government Response & Ongoing Debate:
Rejection: The Economic Advisory Council to the Prime Minister (EAC-PM) rejected his findings, calling them sensationalist and promising a rebuttal that never fully materialized.
Economic Survey Chapter: The 2019-20 Economic Survey included a chapter titled "Is India's GDP Growth Overstated? No!" to counter his claims, noted Scroll.in and the federal.com as sources..
Recent Comments (2024-2025): Subramanian continued to express bewilderment at more recent (2023-24) GDP figures, finding them inconsistent with other economic indicators, adding to ongoing questions about India's data credibility.
In essence, Subramanian's work highlighted concerns about the reliability of India's GDP data, proposing that the economy's post-GFC performance was solid but not spectacular as officially reported.

@menakadoshi

India’s former chief economic adviser is skeptical of the 7.4% growth estimate for this fiscal year through March. 

“We should be cautious about both the level and direction in which India’s economy is headed.”

“It would be very odd for capital to be fleeing a country where growth, at 7.4%, is so much greater than anywhere in the world.”

https://x.com/menakadoshi/status/2009661382447534574?s=61&t=mgT...


———-
Risks Remain Elevated for India Investors, Warns Former Adviser

Subramanian advised lowering expectations for next year’s growth.

https://www.bloomberg.com/news/newsletters/2026-01-09/india-gdp-gro...

Today we decode the latest growth estimates through the lens of a former government adviser, and explore the appeal of all-stock deals.

India’s former chief economic adviser is skeptical of the 7.4% growth estimate for this fiscal year through March. “We should be cautious about both the level and direction in which India’s economy is headed,” Arvind Subramanian told me this morning in an interview on Bloomberg Television.

“It would be very odd for capital to be fleeing a country where growth, at 7.4%, is so much greater than anywhere in the world,” he said, flagging the disconnect.

Sushant Singh
@SushantSin
When even Ruchir Sharma says that India is slipping from the global spotlight because no one takes the official GDP growth figures seriously, in light of all the other contrarian indicators, India's economic crisis has to be in all alarms flashing mode.

https://x.com/SushantSin/status/2010759796602126428?s=20


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Ruchir Sharma

https://www.ft.com/content/999a8dd3-a494-4bf9-892f-22446b9de73b


India is still reporting world-beating economic growth but no longer getting any love for it. Flows of foreign money into the country have dried up, suggesting outsiders believe that the reported GDP growth rate of over 8 per cent masks underlying weaknesses.

Most strikingly, corporate revenue normally grows (or shrinks) with the economy — in any country. But last year corporate revenue growth for listed companies in India decelerated to barely half the GDP growth rate. Rather than taking comfort in the headline real GDP figures, which are likely to be boosted by technical factors related to adjustments for inflation, policymakers would be wise to address some key faultlines.  

Among the leading signs of weakness: India is losing more people and attracting a lot less money than it used to. This decade, a net total of 675,000 people emigrated each year, up from 325,000 in the 2010s. Only Pakistan, Bangladesh and Ukraine have seen a larger exodus while China is haemorrhaging people at the same pace as it did in the last decade, 300,000 a year. A chunk of this outflow from India is “brain drain” — a loss of exactly the skilled workers it needs to compete in advanced fields. As a result, one-third of Silicon Valley’s tech workforce is now Indian.

Employment growth continues to be weak; even at the famed Indian Institutes of Technology, 38 per cent graduated without a single job offer from a campus recruiter in 2024. Many Indians are leaving to find work in the few countries still friendly to immigrants, such as the UAE and Saudi Arabia, drawn in by the region’s construction boom. 

A sense of limits is reshaping capital flows as well. India has long attracted only modest capital from abroad, thanks in large measure to the lingering “Licence Raj”, which can make it prohibitively expensive to acquire land or hire and fire workers. Asian economies that have sustained rapid growth — such as China and Vietnam more recently — saw net foreign direct investment surge above 4 per cent of GDP during their boom phases.

That figure never surpassed 1.5 per cent in India, and it is now just 0.1 per cent. Over the past decade, India dropped in the rankings for net FDI/GDP, from 12th to 19th among the 25 largest emerging countries. While the net numbers have been depressed recently by foreigners repatriating past profits, gross flows are low too, with India ranking below most emerging markets last year.

In addition to India’s long-standing reputation as a difficult place to do business, new risks have been holding back foreign investors including New Delhi’s deteriorating relations with its neighbours, the tariff battle with Washington and doubts about its tech potential. China and South Korea spend more than 2.5 per cent of GDP on research and development; India’s outlays last year were just 0.65 per cent of GDP. It is no surprise then that it has no serious players in AI.

These shortcomings are souring financial markets. After a long drought, stock markets in the emerging world finally saw net inflows last year. India, however, experienced record net outflows of $19bn. The intense foreign selling was countered by domestic buyers, with households keen to increase their historically low exposure to equities. Nonetheless, the Indian stock market significantly lagged behind its peers last year. 

India is the world’s fastest-growing major economy, despite facing punitive US tariffs for buying Russian oil, yet capital is fleeing and the currency is sagging.
Tax collection figures are a concern, with New Delhi’s net tax intake not even hitting the halfway mark of what it expects to collect by March 31 in the first eight months of the current fiscal year.
A new federal budget is due February 1, and the government may need to address the gap in tax revenue, potentially by asking investors to pick up the slack or tightening its belt through measures such as cutting capital expenditure.


https://www.bloomberg.com/opinion/articles/2026-01-12/india-has-7-4...


India is once again the world’s fastest-growing major economy, despite facing punitive US tariffs for buying Russian oil. Yet, capital is fleeing, the currency is sagging, businesses aren’t investing, and tax revenue is faltering.

That last point has the most immediate significance. Tax collection figures are hard numbers, whereas gross domestic product is a statistical artifact. The ministry responsible for the calculations is predicting an acceleration in GDP growth — to 7.4%, from 6.5% previously. Yet in the first eight months of the current fiscal year, New Delhi’s net tax intake didn’t even hit the halfway mark of what it expects to collect by March 31.

A new federal budget is due Feb. 1, and the bond markets are on edge. Consumption taxes were slashed in September, but if the relief fails to lift economic activity on a sustained basis, investors may be asked to pick up the lingering slack in government revenue.


That challenge could get complicated if the actual state of the economy is not as rosy as the numbers suggest. An outdated base year and reliance on a corporate database that doesn’t directly measure informal activity are well-known methodological infirmities of national-income estimation in India. Businesses that have used cheery growth figures as guideposts have often been flummoxed by a more humdrum reality.

There is a third source of confusion. Nominal GDP, measured at current prices, has slowed sharply since the end of the pandemic and exhaustion of pent-up demand. But real, or inflation-adjusted, GDP growth is holding strong, suggesting that the impact of price changes is perhaps not being captured correctly in official data.

All three problems are likely to be addressed when the government announces a new GDP series toward the end of next month. Even if the revamp doesn’t satisfy all critics, it will hopefully present a more accurate picture directionally — whether growth is headed higher or lower — in the world’s most-populous nation.


That will be of enormous help to policymakers who are currently flying blind. For instance, the central bank’s chief has looked at high reported growth and low inflation to conclude that the economy is in the middle of a rare Goldilocks period. But what if, as the economist Dhananjay Sinha and his colleagues at Systematix, a Mumbai-based brokerage, have argued, the real situation is more a gridlock of “weak tax buoyancy and shrinking fiscal space?”

The sub-par tax collection is unlikely to lead to a blowout increase in the full-year deficit, which will somehow be managed around its budgeted level of 4.4% of GDP. But the manner in which Prime Minister Narendra Modi’s government tightens its belt, for instance by hitting the brakes on capital expenditure or pushing the burden to state governments, could have implications for growth in the coming fiscal year.


India’s 28 states have recently been put on the hook for 40% of the cost of a revised rural jobs program. This is when they’re struggling with a resource squeeze from the Modi government’s decision to cut the nationwide goods and services tax. Those GST rate reductions were aimed to spur local consumption in the face of harsh US tariffs, though their net effect has been to temporarily boost festive-season sales of automobiles and white goods. After meeting the extra

India is the world’s fastest-growing major economy, despite facing punitive US tariffs for buying Russian oil, yet capital is fleeing and the currency is sagging.
Tax collection figures are a concern, with New Delhi’s net tax intake not even hitting the halfway mark of what it expects to collect by March 31 in the first eight months of the current fiscal year.
A new federal budget is due February 1, and the government may need to address the gap in tax revenue, potentially by asking investors to pick up the slack or tightening its belt through measures such as cutting capital expenditure.


https://www.bloomberg.com/opinion/articles/2026-01-12/india-has-7-4...

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India’s 28 states have recently been put on the hook for 40% of the cost of a revised rural jobs program. This is when they’re struggling with a resource squeeze from the Modi government’s decision to cut the nationwide goods and services tax. Those GST rate reductions were aimed to spur local consumption in the face of harsh US tariffs, though their net effect has been to temporarily boost festive-season sales of automobiles and white goods. After meeting the extra demand for retail credit, banks are strapped for liquidity. In the absence of cheap deposits, they aren’t keen to absorb an elevated supply of state government debt.


Bond vigilantes have no worries about inflation. Consumer prices are barely moving higher. If anything, the concern is the opposite: Subdued rural prices suggest weak income growth in villages and anemic demand. The 3.4% drop in tax collections up to November isn’t something debt investors would dismiss out of hand. Back in 2013, it was the Federal Reserve’s decision to taper its monetary easing that exposed India’s unsustainable fiscal and monetary policies. A shadow of that fragility is looming again, though the drivers of discomfort are different.


This time around, the worry is less technical, and more political. Recent comments by US Commerce Secretary Howard Lutnick suggest that the Trump administration is in no mood to give India an early reprieve from 50% tariffs. That puts a question mark over New Delhi’s upcoming budget: Should it play to the gallery of domestic equity investors by lunging for growth? Or should it choose fiscal restraint to keep a lid on rising borrowing costs — both for itself and the private sector? There are no easy answers.

A new Indian foreign policy consensus is emerging. That India isn’t a great power yet
After exuberance, India must now not only take difficult and costly steps toward industrialisation, but also convert growth into geo-economic leverage and military modernisation.
Sidharth Raimedhi


https://youtu.be/SgRKrybkJZs?si=SBh0i2Ir_3xHKolh

https://theprint.in/opinion/indian-foreign-policy-consensus-great-p...


After exuberance, India must now not only take difficult and costly steps toward industrialisation, but also convert growth into geo-economic leverage and military modernisation.


A new consensus in Indian foreign and strategic policy thinking has emerged over the past year. It holds that, despite various proclamations, India is not yet a great power, and that its status as a rising power should not be taken for granted either.

Accordingly, India should focus on costly reforms to establish the long-term foundations of power, rather than limiting its policy options to short-term diplomatic or strategic moves. If anything, these priorities require greater restraint and caution in foreign policy, rather than expansion or overt great-power assertion.

Whereas the evolving foreign policy consensus in the US has, understandably, hogged much of the attention in recent months, what is more easily missed is a parallel shift in India’s own broad policy framework, toward what can be termed ‘post-exuberance realism’. As a country’s foreign policy environment becomes more contested and multi-dimensional, it is only logical that its strategic culture adapts accordingly. The shift, therefore, is unsurprising.

The external drivers of post-exuberance realism

As argued earlier, shifts in key equations among the great powers, and in their respective equations with Delhi, have left India occupying a much diminished geopolitical sweet spot from which to bargain. As External Affairs Minister S Jaishankar has argued, changes in the global order have made India’s relationships with the system’s major powers — China, Russia, and the US — far more challenging and complex than they were in 2019. Indeed, 2025 proved to be a sobering year for Indian foreign policy. It saw China’s ‘DeepSeek’ moment and a growing appreciation in India of Beijing’s breakneck ascent toward superpower status. In particular, China demonstrated its ability to threaten industrial supply chains in the US, as well as key sectors of the Indian economy, through its still-evolving and coercive rare-earth export control licensing regime.

The year also saw Washington brusquely abandon India-US strategic convergence and pivot toward a softer reconciliation with China, driven by economic rationale but carrying strong strategic implications for Asia’s future. Trump’s trade war against India further exposed New Delhi’s limited stock of deployable geo-economic leverage vis-à-vis both China and the US. As external bottlenecks have hardened, India has been forced to finally confront internal constraints, evident in recent efforts to boost domestic demand and push labour law reforms.

Meanwhile, India was also confronted with the extent of the maturation of the China-Pakistan strategic and defence relationship in May last year, during Operation Sindoor — something that had faded from public consciousness since 2019-20. China’s continued infrastructure development along the LAC, combined with its growing economic leverage over India, has enabled Beijing to underwrite trilateral cooperation with Afghanistan and Bangladesh, with Pakistan on its side in both cases. The emergence of Turkey as a military ally and defence supplier to several states in the Indian Ocean region has not escaped attention either. Together, these developments necessitate a sober reckoning with the structural weaknesses in India’s armaments policy, as well as a measure of military restraint in the short term. India’s Chief of Defence Staff, General Anil Chauhan, appeared to allude to this last week when he emphasised the need to avoid “attritional warfare” amid increasing geopolitical uncertainty.

@javedhassan
Ashoka Mody’s article is a model of clarity: sharp, jargon-free, and unflinching in exposing how flawed statistics distort India’s economic reality and undermine democratic accountability.

Three key takeaways:

1. India’s reported GDP growth is substantially overstated due to methodological flaws, especially poor measurement of the unorganised sector (∼90% of employment) and persistent large discrepancies between income and expenditure estimates. Adjusting for these would reduce the past decade’s average growth to modest levels, far below the “fastest-growing major economy” claim.

2. The jobs crisis is severe but hidden: low official unemployment masks widespread underemployment, stagnant real wages, and reliance on low-productivity informal work. Mass consumption is weak, increasingly driven by a narrow elite importing luxury goods, while rental and living costs erode purchasing power for most.

3. Most seriously for democracy, misleading data allow governments to proclaim success amid mass distress, depriving citizens of the factual basis to hold power accountable. When statistics cease to reflect lived experience, democracy itself is weakened—a warning that extends beyond India.

Mody’s lucid linkage of technical critique to political consequence is outstanding. This is not just an Indian story; it is a warning for any country trying to manufacture flattering numbers as substitute to honest assessment of citizens’ welfare.

https://x.com/javedhassan/status/2013425545908805632?s=20

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Democracy damned by doctored data
When growth numbers flatter power, hide job scarcity, and mute rising costs, bad data stops disciplining policy and democracy pays a hefty price.

Ashoka Mody

https://frontline.thehindu.com/economy/india-gdp-growth-myth-data-i...

India’s GDP growth in the second quarter of 2025-26 (8.2 per cent) was greeted with the familiar ritual of celebration. A Bloomberg columnist described it as “growth that the world envies.” It did not matter that, nearly simultaneously, tucked away as Appendix VII of its Article IV report (the annual health check) for India, the International Monetary Fund gave India’s GDP estimation process a C grade. Translation: Indian GDP is poorly measured. Yet, the IMF—without a hint of irony and with no reference to its own data critique—stipulates in the main body of the report: “Real GDP growth has remained robust following a strong post-pandemic recovery.”

We have a problem, one that is systemic and corrosive. This is no longer just about GDP; it is about an India dominated by elite power, reinforced by resurgent nationalism and a media that has subordinated itself to an assertive official vision of the country. Global elites have their own geopolitical reasons for applauding the Indian narrative.

All of India’s macroeconomic data—GDP, employment, and prices—are seriously flawed. India scores a C in all categories the IMF covers, except trade data, which are difficult to fudge or spin. Curated use of flawed data feeds a seductive storyline: India, soon a developed nation; a superpower, perhaps.

Even these flawed data, read carefully, reveal a consistently sobering reality. The GDP data bear a clear signature of the breathtaking lifestyles of India’s rich—driving a surge of import-intensive consumption. The flip side is weak consumption of mass consumer goods, echoed in waning domestic investment. The reason for this suppressed demand is also clear: much-publicised low unemployment rates and understated inflation conceal the scarcity of dignified jobs and the daily struggles of ordinary people. Meanwhile, the narrative of a glorious India flatters elite vanity while leaving both the economy and democracy exposed to peril.

Democracy damned by doctored data
When growth numbers flatter power, hide job scarcity, and mute rising costs, bad data stops disciplining policy and democracy pays a hefty price.

https://frontline.thehindu.com/economy/india-gdp-growth-myth-data-i...

In the US, too, elite power has increasingly captured economic discourse. The historian Heather Cox Richardson asked the economist Paul Krugman how one corrects the record. “We must keep chipping away at the coalface,” Krugman replied. This essay is another attempt to do precisely that—chip away at the great India story. In what follows, I show how GDP measurement, misleading unemployment statistics, and understated inflation work together to flatter those at the top while obscuring mass economic distress.

Through the GDP mirror
The economist Arun Kumar has given a master class on all that is wrong with Indian GDP measurement. First, even if the data were correctly gathered, the national income (value-added or the difference between production and inputs used) is mismeasured for no good reason. To correct for inflation, a producer price index must deflate the total value of production and a proxy for input prices should deflate the value of inputs. Instead, Indian authorities deflate both with wholesale prices, which arguably are irrelevant to both production and inputs.

The more serious, indeed crippling, problem is that India does not gather data on the vast non-agricultural unorganised sector, about 30 per cent of the economy. Instead, the unorganised sector’s output is measured using a series of “faux proxies”, mainly the performance of the organised corporate sector. But, as Kumar emphasises, the unorganised sector’s performance is poorly correlated with that of Indian corporates, especially (but not only) in times of distress.



For example, around the time of demonetisation and COVID, the unorganised sector collapsed all too evidently but the income data barely reflected that. The problem persists today because the US tariffs have hurt the unorganised especially grievously. If, Kumar says, the non-agricultural unorganised output is exaggerated in such periods by 10-12 per cent, the last decade’s average growth would crumble to 2.5-3 per cent per year.

Even without delving deep into the data-gathering, a persistent inconsistency in published data becomes more acute whenever an eye-poppingly high growth rate is reported. I first noted this inconsistency in September 2023, about when the G20 guests were arriving in a cosmetically spruced-up New Delhi. The statistical principle is simple: the income generated in the economy must equal the expenditure on the goods produced. Instead, while the reported income growth on the eve of the G20 meeting was an impressive 7.8 per cent, the growth in expenditure was only 1.4 per cent. In statistical systems around the world, a small discrepancy exists between income and expenditure. Only India seems to have such huge discrepancies that materially influence the economy’s growth rate.

Since then, I have been looking at the discrepancies when growth rates are too high to be plausible. And that instinct has never failed me. Consider the latest data, which shows 8 per cent growth in the first half of 2025-26 (7.8 per cent in the first quarter and 8.2 per cent in the second). As is the Indian convention, this is the estimated income growth. But in the same period, expenditure grew by only 5 per cent. The reporting convention matters: in the US, growth would be reported as 5 per cent—and there would be an uproar over the discrepancy.

Because large discrepancies favouring income cumulate, the average Indian growth rate over time is also overstated. We have a black hole. What lies there? Who knows.

Democracy damned by doctored data
When growth numbers flatter power, hide job scarcity, and mute rising costs, bad data stops disciplining policy and democracy pays a hefty price.

https://frontline.thehindu.com/economy/india-gdp-growth-myth-data-i...

One thing we do know is that, at home or abroad, buyers have slowed down their purchases of Indian goods. Exports of goods other than petroleum products have struggled in recent years. And domestic consumption of Indian products has been weak. For this reason, the latest data present an interesting puzzle. The reported consumption growth is high: 7.5 per cent. The puzzle leads to a telling resolution.

Indians who can afford to spend—and are powering consumption growth—are increasingly buying import-intensive goods! Imports grew in the same period by 11.8 per cent. An array of striking examples helps illustrate the surge in imports:

Reuters reported earlier this year: “Lamborghini and Mercedes-Maybach plan to expand in India as a growing tribe of young, rich Indians splurge on super luxury cars, driving their sales to record levels.” While sales of two-wheelers and non-SUV passenger cars have stagnated or barely increased, sales of SUVs, especially premium models, have boomed. And the higher up in the premiumisation ladder, the higher the import content (arising from electronics and advanced transmission systems). About 15-20 per cent of a compact SUV’s value is imported; for fancier cars, the imported share rises to half or significantly more.

The same story repeats for consumer goods. Sales of staples such as biscuits, soaps, and shampoos have been growing slowly, if at all. Mid-tier and high-premium products are selling faster—and the more premium the product, the higher its import content (reflecting higher-end ingredients). This is especially visible in high-growth premium and niche categories: imported chocolates such as Ferrero Rocher and Lindt; specialty foods such as organic oats (e.g., Bob’s Red Mill); avocados; international skincare brands like The Body Shop and L’Occitane; gourmet cheeses, premium olive oils, and astronomically priced weight-loss drugs (Eli Lilly’s Mounjaro and Novo Nordisk’s Wegovy). These products are illustrative rather than exhaustive, but they capture the broader pattern: buoyant consumption at the top has become a status statement increasingly decoupled from domestic manufacturing.

The toxic air is causing another divide. The demand for air-quality monitors and purifiers is driven by affluent urban households that buy premium global brands with high import content, such as Dyson, IQAir, Blueair, Coway, and Philips—rather than basic domestic models. Some even live in bespoke “air bubbles,” creating an “air of exclusivity” that relies on imported advanced sensors, activated carbon, or electronics.

Out for lunch at a South Delhi mall with a senior policymaker, I asked who bought the $400 Adidas shoes and Swiss watches on display. He shrugged and said that he, too, would like to know.

Policy is bolstering these trends. In the recent trade agreement with the UK, India granted tariff exemption to luxury cars and premium whiskeys. A proposed trade agreement with the European Free Trade Association will lower tariffs on Swiss watches.

From this illustrative list, a simple macroeconomic bottom line emerges. As rich Indians assert their privilege through distinctive consumption, they, in effect, demand specialised inputs. These inputs account for a large fraction of the product’s price even when the product’s final assembly is in India. Import intensity remains high because each luxury product is produced in quantities too small to justify domestic manufacturing of sophisticated electronics and material inputs—these are made in gigantic factories abroad, at scales that India cannot match.

Democracy damned by doctored data
When growth numbers flatter power, hide job scarcity, and mute rising costs, bad data stops disciplining policy and democracy pays a hefty price.

https://frontline.thehindu.com/economy/india-gdp-growth-myth-data-i...

The macroeconomic effect stems from the fact that the very rich command such a large share of income—the top 10 per cent earn nearly three-fifths and own two-thirds of the wealth—so their voracious but import-heavy consumption generates limited domestic income and wealth.

Persistent inequalities have extended the enclave logic to consumption patterns. For years, rich Indians have lived in gated communities, sent their children abroad to study, vacationed in exotic international locales, and shopped in Singapore, Dubai, Milan, and Zurich. Now, from air-bubbles at home, they step into cars with air-quality monitors, and from there into climate-controlled workplaces—while hundreds of millions breathe air that shortens their lives. The Lamborghinis and weight-loss products of the rich are almost entirely imported in content. India might eventually produce more avocados, but nearly all of the surging demand for it in India is still met from abroad.

Two implications follow: First, in their bid to lead first-world lives—with the bonus of maids and chauffeurs—rich Indians, aided by policy, are driving an ever-larger structural trade deficit.

Second, and more seriously, the much-touted 1.4 billion consumers is a myth. Recognising that, businesses have had a diminishing appetite to invest in India. Earlier this year, I had highlighted the steady fall in net foreign investment into India to miniscule levels in 2024-25; in the calendar year 2025, net foreign investment was down to nearly zero. Indeed, in September and October, large outflows occurred. While foreign investors continue to repatriate their earnings in small but steady amounts, the big story of 2025 is a rush of Indian investments abroad.

The bleak investment story is mirrored in Indian corporate investment trends. Nikhil Gupta and Adarsh Agarwal, the only analysts who estimate private corporate investment consistent with national income data (because the Indian authorities do not publish this data on a regular basis), recently reported that corporate investment as a share of GDP has fallen to 14 per cent, from a high of 19 per cent in the first half of 2016. Only at the height of COVID was corporate investment marginally lower at 13.7 per cent. Again, the question arises: why, if growth is so blazingly high, are Indian investors almost as pessimistic today as in the middle of COVID?

The answer lies not in a meaningless GDP growth number but in jobs and wages.

The elusive dignity of jobs
In November 2025, when the Indian Railways called for job applicants, as many as 12 million candidates applied for 8,868 openings. Stated more directly, 1,370 persons applied for every job, and some job categories saw 2,000 applicants per position. Even by the standards of the Railways, which is a huge draw for job seekers, this was unusual. Earlier, in September, 2.5 million job seekers applied for 53,000 peons’ positions in Jaipur. That is 47 applicants for each vacancy, with many of the applicants possessing college degrees, including Ph.Ds. Nearly simultaneously, in Sambalpur, 8,000 candidates applied for 187 Home Guard positions—about 50 people for each job. So large was the number of candidates—many of them with college degrees—that they had to sit on an airstrip to take the testfor a position that required just a primary-school-level qualification.

Democracy damned by doctored data
When growth numbers flatter power, hide job scarcity, and mute rising costs, bad data stops disciplining policy and democracy pays a hefty price.

https://frontline.thehindu.com/economy/india-gdp-growth-myth-data-i...

The mainstream media no longer covers such news. While all the newspapers reported the latest GDP growth estimate, with the tag “fastest growing major economy”, the desperate scramble of jobs does not make news even in the so-called progressive press. If the press does report on the jobs situation, it is to cite the latest unemployment rate, which currently hovers between 5 and 6 per cent of a labour force of about 600 million people; that implies between 30 and 35 million Indians unemployed. This ultra-low number of those unemployed is never juxtaposed against the jarring reality of frantic job searchers.



Elite India, which now includes the media, has no time to dwell on people’s lived reality. The simple truth is that very few Indians can afford to be unemployed. The unemployment rate is no gauge of the country’s job market.

According to the ILO, a person is employed if he/she works just one hour in a week. And it is true that a lot of people will find an hour’s work in a week. What is more important though is that almost all of them want to work many more hours. India’s problem is vast underemployment: people work too few hours, in very low-productivity work, and some just drop out of the labour force and stop looking for work in frustration. India has a mass of surplus labour, a term economists use to describe people looking for more work that is also more productive.

Surplus labour exists in agriculture, which has low productivity relative to the rest of the economy and cannot employ people through the year; surplus labour exists in mom-and-pop kirana stores and, indeed, across the vast unorganised sector; surplus labour exists in colleges and universities, where students attempting their luck at public service exams acquire one degree after another to avoid facing the world.

Economists and practitioners have struggled for decades to measure underemployment. The ILO has proposed an imperfect but useful concept, “underutilisation”, which includes (in addition to the conventionally unemployed, those who want to work more hours and those who might be induced to give up their pessimism about finding work). The Organisation for Economic Cooperation and Development, comprising mainly advanced economies, finds a high level of underutilisation even in those economies. In late 2024, Italy had an unemployment rate of 7 per cent but underutilisation of nearly 20 per cent.

How do we assess India’s underutilisation rate? The key thing to focus on is the size of the informal sector, where the bulk of the underemployment is. India’s informal sector—the safety net for those who have no options for full-time productive work—harbours 90 per cent of the country’s labour force. As a benchmark, Turkey, with 26 per cent of the jobs in the informal sector, has a labour underutilisation rate (the proxy for underemployment) of nearly 25 per cent. This surely does not mean that India has an underutilisation rate of 90 per cent, but it is a warning that India has a daunting underemployment problem.

By my estimate, extending the seminal work of the late economist Ajit Kumar Ghose, about 200 million Indians would be without a job if we eliminate underemployment. As Ghose noted, the essence of underemployment is that a number of people share a job that one person can do. If that sharing disappeared, a huge number of people would have no work. And this number keeps going up as new job seekers continuously exceed the jobs created. That is the source of the desperation.