The Great Indian Budget Tamasha

by | Feb 15, 2020

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Indians are innately boisterous. Celebration and gaiety are in our blood. We find occasions to celebrate and make a great show of routine and small matters. From passing an exam, to celebrating birthdays and anniversaries, there is a show on display galore. People even take loans to celebrate occasions. Your clothes may be tattered, but your face must be smiling– that is the spirit.  

Nowhere in the world, does the government budget make for such an event as in India. Earlier, there used to be a separate Railway Budget, but now it has been merged with the Union Budget. The media start hyping the budget right from the beginning of the new year and depending on the ownership of the TV channel or the newspaper, a propaganda is launched about what the budget should contain. A halwa ceremony takes place in the Ministry of Finance at the commencement of the budget writing. 

This year, India faced an economic slowdown along with the rest of the world. It was touted as the coming of an apocalypse and clamour started about the liberalization of control over businesses and unleashing more money into the market by whatever means that could fuel the consumption and increase the GDP. Our political parties have long stopped debating on the basis of reason. They simply follow the trend of ‘opposition must oppose’, regarding whatever the government of the day is doing and forgetting the similar things they did in their own days in power. 

Finally, the budget is presented. The Finance Minister becomes the star of the day. The length of his/her speech matters and even the number of times water is sipped is counted. Then a loud cacophony is created about what was expected and not fulfilled. No one indeed asks for the rationale of expectations expressed in the media and why these expectations must be met. Most of the noise is made by narrow vested interests. The huge government machinery concerned with managing the finances of the country is always in place and operates all 365 days. It is not as if the annual budget is the only occasion where policies are changed. Yet the ritual continues.

The simple fact is that the income of the government has risen from 320 billion USD three years ago to 350 billion last year and 380 billion this year. The expenditure is also rising– from 370 to 430 to 480 in the last three years respectively. The problem that needs to be handled is the shortfall of 100 billion dollars. Taxes can’t be raised, loss-making industries can’t be closed down or sold, and there are limits on borrowing from the RBI; so how the government will manage this is unclear. 

The Finance Minister did not succumb to media pressure about the market looking for stimulus. People were so sure about themselves that they opened the stock market on a Saturday so that moolah could be made, but instead, the Sensex tanked by a thousand points! It, however, recovered all that was lost in the next few days and even exceeded expectations. The prophecy of the Nobel laureate Abhijit Banerjee that the Indian economic recession would be “big and long” is turning out to be untrue. 

Another pitch was about pushing up consumption. I personally disagree with raging consumption habits and follow the old school of saving whatever possible, no matter how little the income and of living a frugal life. I consider consumption-based growth a fallacy and bad for the economy. The doubling of tariff on imported furniture is a good decision. A celebrated European multinational furniture company sells mostly Chinese products in India. It is high time we make Chinese products dearer and promote Indian products, especially consumables.

The real issue India faces is infrastructure deficit and unemployment. With time, government share in both has declined and the private sector has emerged as the provider in both areas. In a good economy, 40 percent of the GDP must be invested back. Actually, China invests back 50 per cent of its GDP, which is four times ours. So, the creation of the Delhi-Mumbai Expressway is good news. The IPO of LIC is overdue. LIC invests more than USD 1 billion in the stock market every year, in a closely guarded manner. The public listing of LIC will lead to more disclosures of investment and transparency. Obviously, the beneficiaries of the status quo will protest.

Finance management of an economy in the current globalized world is an ongoing activity, like flying an airplane. The pilot takes off on a designated route following a strict protocol and then keeps adjusting the aircraft in response to the real-time disturbances in the air. 

India needs to bring down the hoopla and rhetoric in its public life and learn to conduct its business with calm and based on what is good for the poor of this country as well as for the owners of corporations and the lobbies they finance. The parliament proceedings are now telecast live, which are filled with cynicism galore. There is opposition for the sake of opposing. If a step taken by the government is wrong, the critic must also propose an alternative and why it is better. 

A line spoken by the character of actor Ranbir Kapoor in the film ‘Tamasha’ comes to mind – ‘Ek din mujhe pata chala ki Santa Claus nahin hota. Bahut bura laga tha. Par kya karein, hota nahin hai.’ (One day I came to know that there is no Santa Claus. I felt very bad. But what can one do? There is no Santa Claus.). Some words are sweet but unprofitable! True words are bitter but important. Some leaders may win elections by promising freebies but in reality, there are no freebies; you are just shifting money that needs to be invested in creating services and jobs. Also, it is a sad reflection on the quality of people that though 30 million Indians travelled abroad in 2019, only 15 million paid income tax. What kind of budget is this?  If we make a tamasha of our country, it would become so.


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  1. Dear Sir … Me M.Sc. With physics , did LL.B. For passion , worked with CMIE as data analyst, and made good money through share market …..The way you portrayed the Indian economy not only charmed a science student’s enthusiasm, a lawyer’s logic with love, and data researcher’s quest but also quench Market enthusiast’s eternal thirst ….

    I know the subject can be discussed for months…How wonderfully You put ideas into words is no secrets anymore …But your very first para swang my into the memory land of my introduction to Indian budget … It was presented by Late Shri Madhu Dhandvate…. All the newspapers were filled up with how great our FM was , that his wife wanted to buy a washing machine and though he know that the price of the machine was going down , he did not tell her , as It would have been against the ethics ….

    Well , those were the golden years of less Media , less cooked up stories and so I believed completely … Today even whenever I see Mr. Dadvate’s pic… I feel pride ..

    I am sure no girl of 13-14 of any other country even cared for budget, but thanks to Indian culture … I forwarded this into my Son ‘s life too …!!!!


  2. Many times simplicity may be dumbfounding- reading this blog made me feel stupid. How come we miss on such profound yet straightforward observations?

    The financial status is undoubtedly grim, yet there is no shortage of ostentatious expenditure. Consumption for the sake of it is not sustainable. We seem to have wandered from what matters- poverty elimination, job creation, and taming the increasing gap between urban and rural.

    An engineer must not observe problems without indicating to a solution which is to change our political discourse and bring back focus to problem-solving.

  3. Dr Arun Tiwari Sir your write ups amaze us every time. We are enlightened very well on complex issues.You are always Inspirational for many of us. Your “Budget Tamasha” blog is witty and informative. Let’s applaud the present FM and the PM. They are trying their level best to sink the reality sink into the mind of people.

  4. Arun ji, excellent write up. Very simple and brought insights of the annual ritual budget tamasha. Celebrations are good, but too early and too often loses the purpose. Whether others like it or not, till politicians start practising’True words are bitter but important’ nation can not progress. Can there be Government policy on banning or limiting freebies as certain percentage of budget?
    Thank you Arunji, keep writing and is very inspiring and thoughtful.

  5. Very genuine points you have mentioned sir. Especially about “freebies”. And yes this is the one of the major point which no one is talking. Take the example of Delhi..or farmers loan waiver. Government must focus on resource generation, technology development etc. Instead of giving freebies and also we as a citizen take this part very seriously especially in choosing our leader because we need leader who can make us independent instead of dependent on themselves.

  6. Analysing a budget confuses aam aadmi. Budgets are meant to take our country on a welfare path. Two most important things a budget has to address are wealth inequality and corruption. Rightly said, managing finances is an everyday affair. Jobs and livelihood opportunities are looked forward to by India’s teeming millions to who GDP, USD, 80C and many other budget terms make no sense at all. Hope is a good thing but finances must be managed on the basis of ground realities. In between hopes and experimentation, elected governments must make sure welfare programmes and funds meant for Jawans, Kisans and aam janta don’t get tampered.

  7. Sir, Many people like me don’t know what is a union budget means and imply? The people live in the lowest economic strata doesn’t care about a budget proposal but the real fact is that they are the worst or well affected by the policies. Their most worrying issue is the day to day subsistence. Do they want money to meet their necessities? This is a relevant question but every one of the above poverty will ask and consider most relevant as this Where does this income come to the union treasury? There is a gap here in between a need and a demand. A wise financer could manage this by the intellect. Every ruler wishes about the well being of his people otherwise he will be the thrown down from the rule. I am not thinking much about this issue but the real fact is that there is a huge divide between urban and rural and have and have not. Thank you. God bless.

  8. Prof Tiwari, this article on the National is a piece worth of serious attention, much as it has been written in the context of the Subcontinent, truth be said the implication is universal in the sense that policy makers need to reflect upon and customise adjustments in the context of the Countries.

    I am impressed by what you said “Some words are sweet but unprofitable! True words are bitter but important.

    “Some leaders may win elections by promising freebies but in reality, there are no freebies; you are just shifting money that needs to be invested in creating services and jobs. Also, it is a sad reflection on the quality of people that though 30 million Indians travelled abroad in 2019, only 15 million paid income tax. What kind of budget is this?”

    If we make a tamasha of our country, it would become so, all countries will become like this if the call for the attention is not headed

  9. Budget is like any other ceremony. Lot.of importance is given by govt.for this ritual. Now a days it is just like an income and expenditure account. what is not.included in budget can be imposed through an administrative order. Even a layman can understand the higher amount od income tax he pays by opting for the loweted rate of income tax on foregoing every exemption. Why this confusion as if.offering a discount on bulk purchase or buy one get one free. No intelligence or expertise is required to confuse. What is the great relief offered by insuring upto rs.5 lakhs deposits. Does any one deposit money in PSU banks if banks and.othet financial institutions offer security for the entire amount deposited? There will not be any depositor for PSU banks. Provide full security to depositors. You may take insurance cover skin to group group gratuity/ ayushmanbhava. Why govt. should own share holding in banks. They were set up when there was none operating private banks. Now as more private banks are doing well and larger than some of the PSU banks it is bettet to off load the shareholding of PSUs. This can discipline lending. This may be solution to prevent weekly strikes by the PSU bank employees. There if snyone gies.on strike marching orders are given. Due to unemployment govt.can dismiss an employee strike. Govt.can direct banks to auction individual assets eithout routing through ARCe. This will enable wider oarticipation to.liwuidate assets belonging NPA COS. Does the govt.come down to solve problems only when thry thresten a strike, go on strike. Can’t it evolve a avert strikes in any sector? Govt and opposition engage in war of words on budget or any issue. Oppn. Is perpetuating indiscipline, agitation against laws apart from.taking to legal recourse. Govt.should arrest them.under psa. When FM was listing out out the budget estimates, revisef budget estimates and actuals and the budget details by Mr.Chidambaram when he was FM in UPA. He could not dispute his poor financial management. As common people do not know all this, govt. should prepare in small booklets/pamphlets in all regional languages and ensure reaching every enlighten achievement of this govt. tax on individual income can be abolished. on business impose 2%-3% tax on turnover. due to GST it is transparent now. This brings in more revenue because those who are not paying tax due to various exemptions also pay. the other day I went to an eye institute for some test. they have shown three packages. one lowest cost for my test only. second one a little more which covers cost of my tests and finance another patient’s. third still higher which covers my tests’ cost and also another two patients’ cost of tests. like this if government seeks participation of people in national building on every item there may be people who come forward to contribute over and above the taxes they are paying. this helps govt. enormously in reaching out the needy.
    FM may consider reducing GST rate on parking. Making parking minimum only for 1/2 hour like in airports, rounding of nearest to rupee to overcome change problem and also stop minting coins.
    govt. may make allocation/assistance to state governments to build each city bus stop. this reduces urinary tract, kidney and cancer. reduces bills on Arogya Shri/ AAYUSHMAN.

  10. Arun Tiwari ji is a noted writer, philosopher, and commentator. He picks up very pertinent subjects and enters the sea deep into that. Very often the titles he chooses say everything he wants to speak about. The present blog entitled “The Great Indian Budget Tamasha” is one amongst them. Budget = Bud+jatt, in Hindi:- buri tarah jatane walaa. Income tax = In – come – tax ( O tax ! you come in). Consumer ( consume karate karate mar jane walaa vyakti). Now, look at consumers. A fellow needs something to purchase from the market – big or the small things, if he is the right person, he has to pay the cost of material plus GSTs. In a single day, he pays n number of GSTs he does not know why. Now GST is pan-India. The statement that “30 million Indians traveled abroad in 2019, only 15 million paid income tax”. Does this data include laborers also who travele to foreign countries in search of wages? Tiwari ji writes about vision! The growing up new generation is frequently going to Eye-Physicians, and are being prescribed Opticales (Chasma) to correct vision. Where has the vision gone? We very cynically and proudly say 5000 years ago we had this, we had that! And feel proud of our ancestry. Do we ever have thought of that when later some 500 years ahead our future generation will look at us, what will they think about us? Are not we making Tamasaa of ourselves? When we will become serious? The dynasty rules were replaced with democracy meaning by the people for the people. Are we living in a democratic country or we are making a mockery of democracy! Where has the Great ancient Bharatiya wisdom gone in the course of indianizing Bharat-Vasi?

  11. Dear Arunji. A true reflection of the facts around us. The real issue is our govt should practice their own vision – ” Subka Saath, Subka Vishwaas” narrative. Also, it is a pitty that our opposition marginalized to zero without proper agenda or action plans, other than just criticizing to criticize. That’s all. Moving towards LIC IPO is a bold step. However new tax regime ( Disallowing the tax rebate on Interest on Housing loan, Insurance premiums, etc) will derail the habits of the futuristics approach ( home and Life Insurance, Health Insurance, etc by middle class) & the future of Insurance & housing business in India in the long run.

  12. After Delhi elections emerging view is that each state has to find its own way of solving the unique population of it’s people. States have to get away from one size fits all cenetral schemes.

    Some direct productive benefits have to reach the populace. Universal benefits as opposed to selective ones need to be designed Life has to become less costly. Inefficiencies have to be reduced. Beareaucracy has to go.

    Income tax payers face double whammy of income tax and GST. No one else does. This is the class of people who have opinions. They create sentiments. Economy would benefit by good sentiments of these people. Reducing income tax should be the name do the game.

    Reduce costs , reduce tax burden, improve credit availability to small businesses. These are things budget should focus on.

  13. A cutting article….the use of Santa Claus as a metaphor is so apt.

    The roots of any plant flourish within the soil. So the composition of the soil is extremely important to the plant growth. To keep the plant healthily flowering and fruting, the soil needs to be nourished periodically with fertilizers and other amending media. Without giving any thought or having any idea about the soil, to simply blame the gardener (who for most of the time has been doing a decent job given his limitations) for a poor crop is simply inappropriate.

    This is exactly the state of the economy in India. No one has a magic wand. There is no silver bullet solution to the present slowdown. The road ahead is slow, but if we all persevere, we’ll reach in good time. But, like so appropriately mentioned in the article, we have people opposing just for the heck of opposing, and mostly its just for some narrow personal interests. People say nay, but do not offer any valid reason or any other effective alternative. We beat the drum, because we have a drum and a stick…please don’t mind the clatter. In fact they will even advise you that its a virtue to gladly suffer fools.

    Like so rightly mentioned in the article, “Finance management of an economy in the current globalized world is an ongoing activity, like flying an airplane. “. You got to let the plane reach in its designated destination. But each time there’s turbulence during the flight, there’s a call for changing the pilot midway no matter how dangerous that can be…cos some people just believe “tamasha hota hai toh hone do…no matter what the COST !!!!

  14. An eye-opening article Prof. Tiwari! Indeed, there is no Santa Claus. However, many want to believe there is a Santa. Here in the U.S., in a matter of under a decade, the Democratic party has moved far left. Presidential candidates Bernie Sanders, Elizabeth Warren and others all are promoting free college, free health care, new green deals, etc. projected to cost tens of trillions of USD! I am comforted by knowing they have little chance of winning in November. However, the movement towards this entitlement attitude, present in many millennials, is worrisome for the future. It seems most advanced countries’ governments cannot avoid the temptation to borrow from future generations – with Japan’s debt/GDP ratio nearly 250% and the US at just over 105%. China stands at 55% with India at 69%. [Source: ] I believe India’s future depends heavily on energizing the entrepreneurial spirit of it’s young educated population and adopting novel methods to accessing capital such as equity crowdsourcing. Less than 2% of the adult population of India paying income taxes is mind boggling! The government should develop policies to attract investment into India and broaden the base of earnings to bring income taxpayers to 5% or more of the population. Now that trend would be worth celebrating!

  15. Very perfect and common man expectations of the overall budget summary by Arun Tiwariji. Yes we still follow British raj for budget Tamasha except few changes. What an average Indian need is a good food, decent living and proper clothes to wear. Our GDP need to be invested back as much as possible for development for the larger benefits but a common man does not know this except how much free I get. We need to change our mind to think that what I can do for my country that will make the nation great.

  16. Very good introspection of the great Indian budget tamasha. One thing that always come to my mind is that as soon as budget is read out every single person starts commenting whether politician or a common man. Is it that easy to understand the budget then what is the need of economist and bureaucrats to design a budget. Another important thing is not the amount of money allocated but the way in which it will be utilized.

  17. A very well-written, thought-provoking piece. I look forward to reading more blogs of such quality.

  18. I am neither an economist nor a financial wizard. However, I do agree with several comments/ observations made by Prof Tiwari in his blog. A vast majority of Indians, who are relatively poor, can look for happiness only in small things. Bigger events are beyond their reach. Similarly, presentation of the annual budget has been a long awaited ritual every year as it impacts the lives of masses. It provides occasion both for celebration and temporary depression depending upon how the budget impacts one’s livelihood. I agree that consumption-based growth model is not sustainable particularly when unemployment is looming large. Investment in infrastructure is going to give more dividends particularly in the long run besides generating immediate employment. The present day opposition needs re-education as they need to come out from the groove- opposition is meant to oppose only without burning their cerebral energy.
    I suggest in addition to the government presenting its budget, the opposition should also present its budget(or budgets if each party wants to present its own budget) in the parliament and they should be debated threadbare. From this exercise, a more comprehensive budget should evolve which would be acceptable to all political parties irrespective of their ideologies.

  19. It’s an eye opener piece Prof. Tiwari. I feel, the solution to our budget Tamasha is to cut down on expenditure drastically. How much tax payers money was spent in decorations when Evanka Trump visited Hyderabad? Even the dull & thirsty looking trees in Hyderabad were decorated with lights that contributed to global warming. Currently, lakhs of tax payers money is being spent in decoration for welcoming Donald Trump which I feel is unreasonable when our youth remain unemployed. Your last line is mind blowing to learn that 30 million travelled abroad in 2019 & only 15 million paid taxes. Perhaps, 30 million Indians who traveled abroad includes students and semi skilled workers. I agree with you that Indians love to celebrate for every occasions. In fact, I told my neighbour recently that we celebrate festivals & events every month in India. These celebrations also waste precious foods & pollute our environment. I will be looking forward to reading your next piece on your blog!

  20. I agree with you that the central need for India is infrastructure. There is an immediate need for $1.4 trillion in infrastructure improvements. Unless such infrastructure improvements are made India will never catch up with China in economic development. In 1987 the GDP in India and China was about the same, as was per capita GDP. Today China’s GDP is five times that of India as is its per capital GDP. The question has to be raised as to why that is so. A large part of the answer lies in China’s willingness to commit massive sums to new airports, dams, fast rail, highways, and domestic improvements. Democracy is a messy process that China does not worry about, but India needs refocus on its domestic economic development instead of stoking up divisions in its society.

  21. Infrastructure deficit and unemployment are the two biggest curse upon India and indeed related to each other. In a good economy half of the GDP must be invested back. In families we do it by investing half of income in future – house, machines, education. Delhi-Mumbai Expressway is truly a good news. Once we de-clog goods transport, economy will automatically flourish. Roads are indeed most corrupt in pour country.

  22. The consumption tax we have (GST) is a nice backdoor for those evading taxes. Only issue is that the honest salaried tax layer is now doubly burdened with both income tax and GST. And the scrupulous ones get away without paying either.

  23. Interesting comments. Transparency at all levels is a must. Digital transactions is slowly catching on, but can be done at a faster rate.

    It appears that only the salaried pay the income tax. Why not tax the rest. Why so much of deductions for the rest ? Why tax the easily taxable only ?

    Overall steps in the right direction. Determination and strict implementation is the only way.
    Development at all levels can be ensured only if all the subsisdies and privileges are ‘given’ ( ??? sincere apologies as I could not get the right word) on a strictly monitored basis.
    Best wishes to country and honest citizens. May their tribe increase!

  24. Dear Professor Tiwari. The clarity and recommendations of your comments are crystalline — if you cannot make the lowest member of society stronger you have failed. And where the political classes in India (and most countries) are turning their campaigns into gladiatorial contests of right and wrong they are missing the basic need for humanity. It is ultimately about using whatever human capital we can muster to improve the neighborhood, family and individual. It starts by recognizing those that need the most and offering a helping hand. Your words come at a critical moment in time and will hopefully will be shared with others. The loudest voices should never win the argument, which unfortunately happens more than it ever should in our society..

  25. Well articulated on prevailing economic scenario vis a vis budgets Mr Tiwari. My understanding is freebies and excessive populism is anathema to good governance. Besides being unsustainable, it disempowers people at large, since crutches replace limbs, and people will find it natural to walk. with crutches and forget how to walk with their own legs.

  26. You have beautifully described the hype created by the media and analysts on the annual Budget. Many a times you feel sick with the news flashes about the budget on the TV screen. At the end when the budget is presented there is nothing exiting about it except a balancing act and make up here and there. Kudos for your ability to bring about the truths!!

  27. Post is an eye opener. Thanks for writing blog on this topic Sir,

    The base created by previous government seems wrong. Now freebies become an important tool to win an election, Delhi election is an example.

    People are not understanding at present that their money is going to be wasted if it is not coming to GDP as investment by govt.

    In my view all the people who are earning should pay tax. The salary gap should be least in different redefined bands. All should pay similar percentage of tax. No freebies at all. Yes some subsidy should be provided on certain things or services. And the money should be diverted to infrastructure. This might help to bring equality and boost the economy but obviously it’s not so easy.

  28. Arun Ji, Unmatched style of writing touching subtly the facts. All salaried colleagues look at budget day as a festto find how much more take home will happen.

  29. Very relevant observations sir. I especially like the part about how parties criticize each other without providing any alternative suggestions.

  30. Namaste Sir, Wonderful analysis and beneficial ideas for the future. I would like to share some thoughts…
    1. Strict methods to reduce the use of paper money
    2. Special benefits to encourage the people who are paying more income tax…some special facilities to them for example..skipping the queue at airports and government offices and more…
    3. Government is already on the path by improving the road networks and coming up with new airports…Businesses are sure to grow with improved network all over the country
    4. Taking measures to stop the wastage of tax-payers’ hard-earned money, government is already on it like stopping the subsidized canteen rates for politicians, stopping the govt support to religious educational institutions and also universities where the grants are being misused by undeserving students
    5. I agree with you, the ‘free-culture politics’ recently started in our country is very very dangerous. It will stop all development. There is also a risk of other state governments doing this…I feel this is putting the Nation’s interests to grave danger for petty political wins. Neither the politicians nor the voters are thinking about the nation. Tax payers’ money should be utilized with great discretion, no government should develop the dependence on free facilities amongst the people for votes. If continued, it will ultimately be very harmful for our nation’ growth. When people start getting things for free, they stop working hard.
    6. I also hope the expenditure on health of our people will have a greater share in our budget in future.
    All in all, I think ultimately our economy will prosper. Thanks for the wonderful article, Best wishes and regards

  31. Very true and factual observation. Indeed the requirement is to invest more in infrastructures and development but today’s politicians just care only for their win in the elections and at the cost of national development they distribute freebies to keep their vote bank alive. Delhi is just a current example. However criticism of budget by opposition is an old practice to oppose every thing the government does, whether good or bad. The opposition and media must introspect whether some of them are capable of criticising some thing beyond their intellect.
    Well written blog bhasaab.

  32. Sir, You have rightly pointed out the root problem that is the shortfall of 100 billion dollars every year. Taxes can’t be raised, loss-making industries can’t be closed down or sold, and there are limits on borrowing from the RBI; so how the government will manage this is unclear. Delhi elections created another benchmark for free things. Next election will see free Internet being offered.

  33. Sir it is indeed true that the real issue India faces is infrastructure deficit and unemployment and we can see Telangana doing a good job in this direction. Your observation that in a good economy, 40 per cent of the GDP must be invested back is very apt and when I see politicians offering free electricity, water and now bus and train tickets also, I wonder if they really understand this. All these sweet things are indeed not only unprofitable but harmful in the long run.

  34. Lovely post! While it is indeed a fact that there is no Santa Claus but perhaps in India every big politician feels he is. Waiving loans is a route to win elections. Delhi has surpassed all earlier attempts and demonstrated that it indeed works. Not to pay income tax is considered as a prestige issue by many in India. It is not that our budget is a tamasha, we have made a tamasha of our country.

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