Arvind's Newsletter

1.India Predicts a Hotter Summer, Raising Power Supply Worries, reports Bloomberg ; Prolonged heat waves expected in most parts through June even though temperatures in March were mostly below-average due to rains

Several parts of India are forecast to witness hotter-than-usual weather through June, raising the risk of more strain on the power network as people turn to air conditioners to find reprieve from heat waves.

Most areas of central, eastern and northwestern states of the nation are likely to experience heat waves during the three-month summer season, Mrutyunjay Mohapatra, director general of the India Meteorological Department, said in New Delhi on Saturday.

Climate change is increasing global temperatures and worsening the frequency and intensity of extreme weather events. This year, there’s been increased focus on India’s weather outlook after the subcontinent suffered a punishing heat wave in 2022 that caused widespread human suffering and affected global wheat supplies.

2.EY Fails to Reach Deal on Split, reports the Wall Street Journal

The unexpected revolt that has upended the planned breakup of accounting firm Ernst & Young is being driven by two longtime U.S. auditors who believe their part of the firm could end up weakened by a deal.

John King and Frank Mahoney, senior U.S. EY executives, have emerged as key opponents to the firm’s plan for a worldwide split of its auditing and consulting arms, according to people familiar with the matter.

After a year of planning and tens of millions of dollars in costs, the split of the 390,000-person accounting firm was put on hold earlier this month. A meeting in Silicon Valley this week failed to reach a deal.

Carmine Di Sibio, EY’s global leader, and Julie Boland, head of the firm’s U.S. arm, said in a joint statement Friday they were “continuing to work toward a transaction.” The deal is “very complicated, and we agree it is critical that we get the key elements right,” the statement added.

The stalemate dates back to earlier this month. Mr. King, EY’s U.S. head of auditing, and his predecessor, Mr. Mahoney, used a meeting of EY’s U.S. leadership to push back on the planned breakup, the people familiar with the matter said.

The two executives convinced EY U.S. chief Ms. Boland that the auditors should get a greater share of EY’s multibillion-dollar tax practice, according to people familiar with the matter. Ms. Boland would lead the global audit firm, should the split go ahead. Mr. Di Sibio is expected to lead the new consulting firm.

3.Energy transition: California will require half of all heavy trucks sold beginning in 2035 to be electric

In a pioneering plan designed to cut emissions from some of the worst polluters on the road, the state is mandating that in 12 years, no more than 50 percent of garbage trucks, tractor-trailers and cement mixers sold there can be equipped with combustion engines. The Biden administration today granted California the legal authority to take such a step, which goes beyond federal requirements.

California passed legislation last year requiring all new passenger vehicles sold there to be electric by the same target year. The moves propel California to the forefront of the race to eliminate emissions from transportation, the economic sector that generates the most greenhouse gases

4.Japan facing an ageing population and falling birth rate, like South Korea, unveiled a draft proposal aimed at reversing the downtrend , including subsidies for childrearing and education and a salary increase for younger workers.

The next few years are possibly “a last chance” for Japan to reverse its declining births. If the number of births keeps falling at the rate since the beginning of 2000, the young population will shrink at twice the current pace in the 2030s.

5.The Indian Premier League is taking over global cricket opines a report in The Economist.

The growth of the Indian Premier League (IPL) has been spectacular. Only 15 years after its launch, India’s biggest domestic cricket contest, which begins its annual rendition on March 31st, has become, by one measure, the world’s second-most lucrative sports league after America’s National Football League (NFL). The sale of five-year media rights to the IPL, which uses the fast-paced Twenty20 (T20) cricket format, raised $6.2 bn last year for its organiser, the Board of Control for Cricket in India. This commercial success has confirmed India as by far the dominant economic power in cricket. But the owners of the IPL’s team franchises, who include some of India’s richest men and biggest companies, want more.

The valuations of IPL franchises are much less than the billions that English football clubs and American football teams trade for. Two IPL expansion teams were sold in 2021 for $940m and $750m. This mostly reflects how little cricket they play. The IPL season consists of 74 matches played over two months. The NFL hosts 272 games a year. To expand their playing-time, India’s franchise owners are therefore looking abroad.

In the past year IPL owners have snapped up all six franchises in SA20, a new T20 league in South Africa; three of the six teams in the United Arab Emirates’ International League; and four of the six sides in Major League Cricket (MLC), a new American competition that begins in July. These acquisitions have turned the IPL owners into international businesses. For example, the stable of the Mumbai Indians team, which is owned by a subsidiary of Reliance, India’s biggest firm, consists of five teams on four continents. The franchise has appointed two former international cricketers, Mahela Jayawardene and Zaheer Khan, to oversee performance across all its sides.

Reliance and other multi-team T20 investors hope to mobilise their Indians fans behind their more recent acquisitions. That should greatly increase merchandise, broadcast and other revenues. According to Ajimon Francis of BrandFinance, a consultancy, the team owners are also eyeing spin-off businesses, such as coaching academies, fan clubs and events.

The overseas teams are expected to act as feeder clubs for their IPL mother-teams, explains Dan Weston of Sports Analytics Advantage, which helps the franchises build their rosters for T20 tournaments. The Mumbai Indians signed up a promising South African bowler, Duan Jansen, for their Cape Town team and, encouraged by his performances, brought him to Mumbai. Owning teams abroad also helps IPL investors experiment tactically. Before Sunrisers Hyderabad appointed their captain for 2023 they gave him a trial leading their Eastern Cape side in the inaugural SA20 competition.

For the new leagues, the IPL connection confers credibility as well as financial clout. According to Graeme Smith, a former South African captain and now the commissioner of SA20, “the willingness of IPL owners to share their experience and know-how was key to our success in season one”. Although the South African league does not disclose its finances, IPL owners are believed to have paid more than $25m each for at least two of the teams and, more important, generated sufficient interest in the contest in India for its media rights to have been sold there. This ensured its first season was profitable.

For cricket aficionados, these changes are dizzying and not entirely positive. For well over a century, the game has been largely organised around international contests. The domestic contests played in India, Pakistan, England, Australia, South Africa and other top cricketing countries were mainly considered talent-pools for the national team. The privatisation of cricket through the IPL’s franchise model, and its enormous commercial success, has upended that relationship. IPL owners can offer foreign players much bigger salaries than their national cricket boards. As a result, more and more cricketers are cutting short international careers in favour of the T20 franchise circuit.

Many do so after achieving success in international cricket. Last year, for example, an outstanding 33-year-old New Zealand fast bowler, Trent Boult, was released from his national side to play T20 around the world. The fear is that younger cricket stars will increasingly forgo international cricket altogether. The IPL’s de facto global expansion makes that much likelier. Venky Mysore, chief executive of the Kolkata Knight Riders franchise (which also owns teams in the International League, MLC and the Caribbean Premier League), wants to sign players on year-round contracts to play for all his sides. That would be incompatible with the national service that former star players such as Mr Smith, who played 347 times for South Africa, describe as the highlight of their careers.