Indian Economy : News,Discussions & Updates
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Just means stock markets are healthy which is expecting a strong recovery all over the world.
They are not taking money from middle or poor.
ExplainSpeaking: The state of Indian economy’s past and future in 6 charts
Last week, RBI Governor Shaktikanta Das announced the latest monetary policy review. The broad takeaway: The RBI marked down India’s GDP growth forecast for the current financial year 10.5% to 9.5% and marked up the inflation forecast for the year from 5% to 5.1%.Typically, faltering growth prompts the RBI to cut interest rates in order to spur economic activity. But rising inflation requires raising interest rates. And since RBI is mandated by law to target inflation within the band of 2% and 6%, the best it could do — and it has been doing this for several months now — is to maintain the status quo on interest rates.
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To be sure, under normal circumstances these two variables — GDP growth rate and inflation rate — are expected to move in the same direction. In other words, when GDP growth picks up, it is more likely that inflation also picks up. That’s because higher growth typically means more demand from people and more demand typically results in prices of those goods and services going up. Similarly, when GDP growth falters, it is more likely that inflation also falls.
But for most of his tenure as the RBI Governor, Das has found that the GDP growth rate has faltered while inflation has spiked.
Unsurprisingly, then, he started his address to the media by quoting the great Stoic philosopher Epictetus: “The greater the difficulty, the more glory in surmounting it…”
JOIN NOW : The Express Explained Telegram ChannelEpictetus famously believed that there weren’t a lot of things under human control and that is why he advised that humans should instead control how they reacted to what was beyond their control. Given the nature of the Covid-19 pandemic and how it is impacting the economy, such stoic wisdom is indeed useful.
But Epictetus’ very next sentence, which remains hidden by the ellipsis above, is also quite instructive: “Skilful pilots gain their reputation from storms and tempests”. In fact, Epictetus said a lot of things that are relevant to India today. Such as: “All religions must be tolerated… for every man must get to heaven in his own way” or “A ship should not ride on a single anchor, nor life on a single hope”.
So what made Governor Das lean on the Stoics?
Perhaps it has to do with the results of the latest RBI Consumer Confidence Survey which was conducted in May. The RBI conducts this survey every couple of months by asking households in 13 major cities — such as Ahmedabad, Bhopal, Guwahati, Patna and Thiruvananthapuram — about their current perceptions and future expectations on a wide variety of economic variables. These variables include general economic situation, employment scenario, overall price situation, own income and spending levels.
Based on these specific responses, the RBI constructs two indices. One, the Current Situation Index (CSI) and two, Future Expectations Index (FEI). The CSI maps how people view their current situation (on income, employment etc.) vis a vis a year ago. The FEI maps how people expect the situation to be (on the same variables) a year from now.
By looking at the two variables as well as their past performance, one can learn a lot about how Indians have seen themselves fairing over the years.
As CHART 1 shows, CSI has fallen to an all-time low of 48.5 in May. An index value of 100 is crucial here as it distinguishes between positive and negative sentiment. At 48.5, the current consumer sentiment is more than 50 points adrift from being neutral. In other words, more than 50% of the respondents felt that they are worse off at present in comparison to a year ago. It is important to note that a year ago, the CSI had hit an all-time low.
The future expectations index (FEI) also moved to the pessimistic territory for the second time since the onset of the pandemic.
To further see these falls in perspective, I have highlighted the two events — demonetisation (blue arrow) and Prime Minister Modi’s reelection in 2019 (green arrow) — since they coincide with the peaks of positive consumer sentiment.
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But to gain a better understanding of which specific factors are pulling down these indices, we need to look at the following charts.
The RBI says that the Current Situation Index is being pulled down because of two factors in particular. These are the consumer sentiments on the general economic situation and the employment scenario.
CHART 2 maps the “net responses” of households on the general economic situation. Let me explain what we mean by the “net responses”.
In the survey, RBI asks how many people currently perceive that the general economic situation has “improved”, “remained the same” or “worsened”. The difference between those who say it has improved and those who say it has worsened is the “net response”. It is in percentage terms and if it is negative then it means that more people think the situation has worsened.
Similarly, net responses are calculated for “one year ahead expectations” and a negative net response implies more people expect things to get worse in a year.
It is noteworthy that there has been a largely secular decline in both current consumer sentiment and future expectations since PM Modi’s reelection in 2019 (green arrow).
The last such trough — albeit not as deep — on the general economic situation was in 2013-14, which was the last year of UPA rule.
The other big factor that is bringing down consumer sentiment is the worsening employment prospects in the country.
Look at CHART 3.
On employment, the current sentiment has been worsening ever since PM Modi was elected in 2014 (sky blue arrow). There were only two spikes, which again coincide with Demonetisation and PM Modi’s reelection in 2019.
Beyond the medium-term trend, what also stands out is the starkness of consumer sentiments on employment. The difference between the percentage of respondents who think the employment situation has improved (7.2%) and those who think it has worsened (82.1%) from a year ago is a whopping 75%. What is equally worse is that more people expect the employment situation to worsen a year from now — that is why the one year ahead expectation line is below 0.
The rather depressing employment outlook was crucial not just in pulling down the current situation index (CSI) but also the future expectation index (FEI). But there was one more factor that is bringing down the FEI: the outlook on incomes.
CHART 4 maps the net responses for current perception and future expectation on their income. Again, much like employment, the prospects on incomes have registered a secular decline since roughly the start of PM Modi’s tenure in 2014. The two positive spikes again coincide with Demonetisation and the 2019 Lok Sabha elections.
The current perception line has plummeted since the pandemic and shows that more and more respondents believe that their current income is worse than what it was a year ago.
Thankfully the future expectations line has not yet dipped below the zero mark. This means that in percentage terms more people expect to earn higher in a year’s time. Whether that will happen or not, however, is an entirely different matter.
Typically the gap between the line mapping current perceptions and the line mapping future expectations — with the latter being higher than the former — shows that people live in hope and expect things to get better a year from when they were surveyed. In the case of incomes, this gap has increased quite dramatically since the start of the pandemic, showing possibly the strength of hope.
When looking at any of these charts, it is also important to note that while one-year ahead expectations are mostly in the positive territory — implying more people hope they will be better off in a year’s time — when one goes forward a year and looks at the “current perception” a year later, it often is in the negative territory — implying more people believe they are worse off than a year ago.
There are two more charts that merit your attention.
CHART 5 maps the net responses on the inflation rate (or the rate at which prices increase year on year). This is quite a remarkable chart because it is unlike any other in one crucial respect. Both the lines are in the negative territory and that too deeply negative.
This means two things. One, that an overwhelming proportion of Indians have been finding, repeatedly, that the inflation rate has increased over the past year. Two, that an overwhelming proportion of Indians have been expecting the inflation rate to get worse (that is, increase) in a year’s time.
Such hardened inflation expectations might explain why, in the past, the RBI has found it difficult to bring down interest rates as often as or by as much as the government wanted.
Lastly, CHART 6 provides a clue as to why even the businesses are so bothered about the fall in consumer demand in India and are asking the government to even print money to boost aggregate demand in the economy.
This chart maps the net responses about spending on non-essential items such as leisure travel, eating out, luxury items etc. While Indian had started curtailing spending on non-essential items quite sharply since the middle of 2018, the pandemic simply pulled the metrics into the negative territory. In other words, more respondents say that they spend less today and similarly more respondents expect to spend less on non-essentials a year from now.
Upshot
These charts lay out the tricky challenge facing the Indian economy.
If the government’s strategy for fast economic growth — expecting the private sector to lead us out of this trough by investing in new capacities — is to succeed then consumer spending (especially on non-essentials) has to go up sharply. But for that to happen, household incomes have to go up, and for that to happen the employment prospects have to brighten, and for that to happen companies have to invest in new capacities.
ExplainSpeaking: The state of Indian economy’s past and future in six charts
The latest Consumer Confidence Survey has shown that the Indian consumer sentiment has hit an all-time low. Here’s how this could hinder India’s economic recovery.
indianexpress.com
RBI may use money managers to boost forex reserves yield
The Reserve Bank of India (RBI) is weighing the option of engaging specialist money managers to help improve yields on the reserves fund as rates hit record lows globally. Given the increasing complexities of managing inflows from multiple channels, the RBI also wants better safeguards for the...
India's forex reserves may have exceeded $600 billion milestone
RBI kept interest rates unchanged at a record low at 4%
www.livemint.com
Its not an outcome but a means to achieve prosperity.India's forex reserves may have exceeded $600 billion milestone, says RBI GovernorIndia's forex reserves may have exceeded $600 billion milestone
RBI kept interest rates unchanged at a record low at 4%
India’s debt to GDP ratio is now at a 14-year high
Spending boost amid weaker revenue collections led to higher borrowing
www.livemint.com
TAKING BACK CONTROL: DEFANGING CHINA
RAPID "LIGHTNING" MANUFACTURING UNITS (RLMU) ACT
Prologue:-
India has learnt a brutal lesson this past year. It is hugely dependent on China for everything including Supply Chain components. The only way for India to reduce dependence form China is by introducing an act called the Rapid Lightning Manufacturing Units (RLMU) Act which aims at establishing manufacturing units to make 800 out of 2400 Components like Condensers (Electricity), Thyristors, Farad Meters and many components that we import from China and Taiwan who don't need any great design or skill but just good quality manufacture.
The Aim is to ensure Domestic control and supply by 2027 (7 Years)
What is the Rapid Lightning Manufacturing Unit Act?
A RLMU - is a Manufacturing Facility which aims at manufacturing a Component required for Manufacture in India which is presently imported from China or Taiwan. A RLMU will specialize in manufacture of 1,2,3 or 5 components depending on how important the components are.
What constitutes an RLMU?
One or More RLMUs will constitute a RAPID MANUFACTURE INDUSTRY which will be an Independent Company with No Parent. 60% of the Stake of each such Company shall belong to Private Investors, 20% to the Govt of India and 20% to the Employees Cooperative Society consisting of Employees from the Low Skilled to the Middle Management to the Senior Management. The Number of Employees shall also be in the ratio of 60:40 - with 60% being Private Employees and 40% being Govt Employees on Deputation. Only Private Employees will be part of the Cooperative.
Chairman of the RMI will be appointed by Govt of India while CEO and 3 Directors will be appointed by the Private Company, The CFO will be appointed by Govt of India from the Finance Ministry to Oversee things while 1 Director will represent the Employees Cooperative Society.
Special Concessions for an RMI (Consisting of RLMUs):
(a) Land to set up an RLMU shall be acquired by a newly created Ministry of Emergent Development. The Govt shall pass a law called Eminent Domain wherein Central govt can acquire any industrial Land from the State Govt or agricultural land from individuals or State Govt, provided they pay the market price for such land. State Govt has no say in anything. Courts can only interfere in deciding the price.
(b) No Permits shall be required from any State Govt for an RLMU or RMI. All Permits shall be issued by the Ministry of Emergent Development which shall obtain necessary permits from other Central Ministries.
(c) Designated Courts called Special Industrial Tribunals shall be set up to govern disputes related to RMI and RMLU. There shall be no adjournments to any case. The plaintiff will be given a day with 90 minutes to make his case to a panel of 3 Judges (Retired HC, Sessions Judges, Sr Civil Judges) and submit all documents in his possession. No delays, No extra time nothing. Then the Defendant will be given a day with 90 minutes to submit his case to the same panel and on the next day the Panel shall deliver their decision.
Decision made by the Panel may be challenged only in front of a 3 Member bench of HC but no interim decisions or stay orders can be passed by the HC.
No Public Interest Litigations can be entertained by HC or SC with respect to RMI or RMLU.
(d) Joint Financing - All Loans availed by the PMI and PMLU shall be availed from PSU Banks jointly by GOI and the Private Player. Disbursal of the Loan shall be overseen by the CFO appointed by the Govt of India. 2 Bank Officials - of the rank of DGM or above shall oversee the disbursal of the loan as well.
(e) No Political Interference - Local MPs, MLAs will have No say in the PMI or PMLU.
(f) Rapid clearing by Port Authorities - RMI shipments shall be released with immediate effect with highest priority by Port Authorities and Customs. Delay beyond 24 hours will require a Show Cause Notice and Inquiry against the Customers officials in Charge.
(g) No Departmental Interference - The Ministry of Emergent Development shall be solely answerable to the PM. All the Officials of this ministry shall be deputed for a minimum period of 10 years with in house promotions guaranteed to avoid the threat of transfers or no promotions. No Officials or other Ministers can interfere with these officials. Even CBI and ED will need permission from the PMO to arrest these officials. The Most honest and efficient officials shall be selected.
(h) No Reservations - The RMI or RLMU workforce shall be chosen purely by merit. There will be no reservation rule for any job. The employees shall be selected without any consideration to caste, creed, residency, religion etc.
(i) The Employee Cooperative - The Employee Cooperative will own 20% of the RMI and shall have a profit participation but they will have a few mandatory laws which include : (a) No Strike until at least 60 days notice is given (b) No more than 24 hours strike (c) No Work No Pay (d) No Strike for more than 1 day over a 60 day period (e) Salaries divided into two components - Assured Salary and Contingent Salary (Based on Production Rate and Efficiency) (f) Deductions for Healthcare and Emergency Situations allowed (g) Every Employee to get a minimum stock option dependent on position after 15–20 years service.
(j) Mandatory English Certification Course - Every Employee must be certified in Spoken and Written English to be working for a RLMU/RMI. Night Classes will be done so that Employees have a basic understanding of English Language (Spoken) and Written.
(k) Training for Mid Level Employees - Industrial Training in countries like Singapore to be provided for Manufacturing, production and other skills.
(l) Immunity from Interference by Supreme Court - The RMI and its workings as well as RLMU cannot be stayed in any way by Supreme Court. Any Decision by the SC against an RMI and RLMU can be challenged immediately by a bigger bench without any interim decision being passed.
(m) E-Tendering by Contractors - A System shall be designed which shall set tough guidelines for selecting Contractors for Tenders for RMI /RLMU (Construction of facilities etc).
Once a group of contractors are shortlisted, their names will be removed as will their addresses, each tender will be reprinted in the same Font and the tender amounts shall be removed. These Revised Anonymous Tenders shall be analyzed for pure competitive work and quality of work and shall be ranked Q1, Q2, Q3 upto Q7
Then the Prices shall be checked by the System. If Q1 is not more than 10% expensive from Q2 - Q1 is automatically selected and only after selection will the details of the Tenderer be known to the Officials. Until then only the System and TCS/Wipro/Infosys people will know. The System will be called a BLACK BOX.
This should remove at least some of the tendering related corruption.
All Salaries will be disbursed only by the CFO and his people who will all be Govt Employees.
Only by providing such assurances can we set up quality manufacturing units that can hope to take over the domestic market for a lot of components by the Chinese.
The Eminent Domain Act will ensure State Govt has no say in anything, neither will MLAs or Panchayats or any one at State Level which will save time. No Permits from the State will also be a big plus to the speed of the operation since all permits will come from a Single Department which owns 20% of the RMI.
LIkewise frivolous PILS will be completely stopped and SC and HC will have no interim powers so they cannot obstruct work and production.
Hopefully this will create an efficient unit to combat China.
The Emergent Development Minister should be Mr Nitin Gadkari
----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Quora answer from Kanthaswamy Balasubramaniam, who is a retired banker + lawyer. So he should know what he's talking about. Some improvements, edits, modifications, etc. made by me.
@randomradio, @_Anonymous_, @Ashwin, @Gautam, @Milspec, @Nilgiri and others - your opinions on this idea?
RAPID "LIGHTNING" MANUFACTURING UNITS (RLMU) ACT
Prologue:-
India has learnt a brutal lesson this past year. It is hugely dependent on China for everything including Supply Chain components. The only way for India to reduce dependence form China is by introducing an act called the Rapid Lightning Manufacturing Units (RLMU) Act which aims at establishing manufacturing units to make 800 out of 2400 Components like Condensers (Electricity), Thyristors, Farad Meters and many components that we import from China and Taiwan who don't need any great design or skill but just good quality manufacture.
The Aim is to ensure Domestic control and supply by 2027 (7 Years)
What is the Rapid Lightning Manufacturing Unit Act?
A RLMU - is a Manufacturing Facility which aims at manufacturing a Component required for Manufacture in India which is presently imported from China or Taiwan. A RLMU will specialize in manufacture of 1,2,3 or 5 components depending on how important the components are.
What constitutes an RLMU?
One or More RLMUs will constitute a RAPID MANUFACTURE INDUSTRY which will be an Independent Company with No Parent. 60% of the Stake of each such Company shall belong to Private Investors, 20% to the Govt of India and 20% to the Employees Cooperative Society consisting of Employees from the Low Skilled to the Middle Management to the Senior Management. The Number of Employees shall also be in the ratio of 60:40 - with 60% being Private Employees and 40% being Govt Employees on Deputation. Only Private Employees will be part of the Cooperative.
Chairman of the RMI will be appointed by Govt of India while CEO and 3 Directors will be appointed by the Private Company, The CFO will be appointed by Govt of India from the Finance Ministry to Oversee things while 1 Director will represent the Employees Cooperative Society.
Special Concessions for an RMI (Consisting of RLMUs):
(a) Land to set up an RLMU shall be acquired by a newly created Ministry of Emergent Development. The Govt shall pass a law called Eminent Domain wherein Central govt can acquire any industrial Land from the State Govt or agricultural land from individuals or State Govt, provided they pay the market price for such land. State Govt has no say in anything. Courts can only interfere in deciding the price.
(b) No Permits shall be required from any State Govt for an RLMU or RMI. All Permits shall be issued by the Ministry of Emergent Development which shall obtain necessary permits from other Central Ministries.
(c) Designated Courts called Special Industrial Tribunals shall be set up to govern disputes related to RMI and RMLU. There shall be no adjournments to any case. The plaintiff will be given a day with 90 minutes to make his case to a panel of 3 Judges (Retired HC, Sessions Judges, Sr Civil Judges) and submit all documents in his possession. No delays, No extra time nothing. Then the Defendant will be given a day with 90 minutes to submit his case to the same panel and on the next day the Panel shall deliver their decision.
Decision made by the Panel may be challenged only in front of a 3 Member bench of HC but no interim decisions or stay orders can be passed by the HC.
No Public Interest Litigations can be entertained by HC or SC with respect to RMI or RMLU.
(d) Joint Financing - All Loans availed by the PMI and PMLU shall be availed from PSU Banks jointly by GOI and the Private Player. Disbursal of the Loan shall be overseen by the CFO appointed by the Govt of India. 2 Bank Officials - of the rank of DGM or above shall oversee the disbursal of the loan as well.
(e) No Political Interference - Local MPs, MLAs will have No say in the PMI or PMLU.
(f) Rapid clearing by Port Authorities - RMI shipments shall be released with immediate effect with highest priority by Port Authorities and Customs. Delay beyond 24 hours will require a Show Cause Notice and Inquiry against the Customers officials in Charge.
(g) No Departmental Interference - The Ministry of Emergent Development shall be solely answerable to the PM. All the Officials of this ministry shall be deputed for a minimum period of 10 years with in house promotions guaranteed to avoid the threat of transfers or no promotions. No Officials or other Ministers can interfere with these officials. Even CBI and ED will need permission from the PMO to arrest these officials. The Most honest and efficient officials shall be selected.
(h) No Reservations - The RMI or RLMU workforce shall be chosen purely by merit. There will be no reservation rule for any job. The employees shall be selected without any consideration to caste, creed, residency, religion etc.
(i) The Employee Cooperative - The Employee Cooperative will own 20% of the RMI and shall have a profit participation but they will have a few mandatory laws which include : (a) No Strike until at least 60 days notice is given (b) No more than 24 hours strike (c) No Work No Pay (d) No Strike for more than 1 day over a 60 day period (e) Salaries divided into two components - Assured Salary and Contingent Salary (Based on Production Rate and Efficiency) (f) Deductions for Healthcare and Emergency Situations allowed (g) Every Employee to get a minimum stock option dependent on position after 15–20 years service.
(j) Mandatory English Certification Course - Every Employee must be certified in Spoken and Written English to be working for a RLMU/RMI. Night Classes will be done so that Employees have a basic understanding of English Language (Spoken) and Written.
(k) Training for Mid Level Employees - Industrial Training in countries like Singapore to be provided for Manufacturing, production and other skills.
(l) Immunity from Interference by Supreme Court - The RMI and its workings as well as RLMU cannot be stayed in any way by Supreme Court. Any Decision by the SC against an RMI and RLMU can be challenged immediately by a bigger bench without any interim decision being passed.
(m) E-Tendering by Contractors - A System shall be designed which shall set tough guidelines for selecting Contractors for Tenders for RMI /RLMU (Construction of facilities etc).
Once a group of contractors are shortlisted, their names will be removed as will their addresses, each tender will be reprinted in the same Font and the tender amounts shall be removed. These Revised Anonymous Tenders shall be analyzed for pure competitive work and quality of work and shall be ranked Q1, Q2, Q3 upto Q7
Then the Prices shall be checked by the System. If Q1 is not more than 10% expensive from Q2 - Q1 is automatically selected and only after selection will the details of the Tenderer be known to the Officials. Until then only the System and TCS/Wipro/Infosys people will know. The System will be called a BLACK BOX.
This should remove at least some of the tendering related corruption.
All Salaries will be disbursed only by the CFO and his people who will all be Govt Employees.
Only by providing such assurances can we set up quality manufacturing units that can hope to take over the domestic market for a lot of components by the Chinese.
The Eminent Domain Act will ensure State Govt has no say in anything, neither will MLAs or Panchayats or any one at State Level which will save time. No Permits from the State will also be a big plus to the speed of the operation since all permits will come from a Single Department which owns 20% of the RMI.
LIkewise frivolous PILS will be completely stopped and SC and HC will have no interim powers so they cannot obstruct work and production.
Hopefully this will create an efficient unit to combat China.
The Emergent Development Minister should be Mr Nitin Gadkari
----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Quora answer from Kanthaswamy Balasubramaniam, who is a retired banker + lawyer. So he should know what he's talking about. Some improvements, edits, modifications, etc. made by me.
@randomradio, @_Anonymous_, @Ashwin, @Gautam, @Milspec, @Nilgiri and others - your opinions on this idea?
Can somebody explain in layman terms about forex reserves ? I googled it but couldn't understand about it. My questions are :
What is the use of this 600 billion USD reserve ? In which case it will increase or decrease ? Does increasing forex reserves is a good sign ?
If we have such a huge amount in reserves, why the govt is not using these funds for buying equipment for armed forces ?
What is the use of this 600 billion USD reserve ? In which case it will increase or decrease ? Does increasing forex reserves is a good sign ?
If we have such a huge amount in reserves, why the govt is not using these funds for buying equipment for armed forces ?
Forex reserve is a tool to hedge against foreign exchange volatility. It also acts as an assurance to the external debt that we have taken.
Making sense of forex reserves
India’s foreign exchange reserves have crossed $500 billion. For some, this is a cause for national pride. For some others, it is a source of irritation: why do we keep such a large hoard abroad,...
RBI likely to continue building forex reserves amid strong fund flows, say experts
The central bank’s reserve accumulation could eventually pose a risk to its ability to transfer dividend to the government as returns on forex assets are quite low.
Normally, Forex increases when rupee is appreciating (meaning, rupee value going down) and RBI want to keep the exchange rate stable (currently ~₹75). If the currency starts depreciating against the dollar, then the central bank can sell its dollar reserves and buy the local currency in order to stop the depreciation.
In can also be because of capital inflows or intentional buying to cover the external debt that we have accumulated.
In short, It's is positive and an indicator of stability. But, not like that you can suddenly take that money and put it into the real economy.
Another Good read : Why RBI’s hoarding of forex reserves over currency concerns will be counter-productive
Thats the foreign currency (mostly dollar) we have with us which has come in many different ways like foreigners investing or by export earnings/NRI sending money..etc. If we need to buy some thing from foreign countries (a.k.a imports) we need to pay in dollars., that is what foreign reserve mostly used for. Currently India's imports are around $470 billion dollar, guess thats where it is mostly used.
Govt cannot use it bcos it is not govt's money, if the FII who invested in India wants to sell every thing and take their investment back or finance imports ( Indian imports are more than exports, nearly to tune of $100 billion ) or stabilize Indian rupee that money will be used by RBI. It is just like bank deposit that is made by customers and RBI is holding it. If RBI spends it and customers want their deposit back then all hell will break loose.
India needs to finance its purchases from its revenue that is tax collection , RBI does not lend this money to Indian govt as they have no confidence in Indian govt returning it back.
Road ahead more daunting than 1991, time to introspect: Ex-PM Manmohan Singh
Former Prime Minister Manmohan Singh on Friday said the road ahead was even more daunting than during the 1991 economic crisis and the nation needed to recalibrate its priorities to ensure dignified living for its people.