Arvind's Newsletter

1.Govt’s FY24 tax collection target broadly met on back of robust economic activity

The central government’s tax collection target of over ₹34.37 lakh crore for fiscal year 2023-24 (FY24) has been broadly met on the back of robust economic activity and improved compliance, according to a report by PTI.

In the revised estimates (RE) presented in Parliament on February 1, 2024, the government had raised the target for direct tax collection in FY24 (April 2023 to March 2024) to ₹19.45 lakh crore, while for indirect taxes (GST Customs Excise) the target was lowered to ₹14.84 lakh crore.

Meanwhile, domestic and international air traffic in India for the first time crossed the pre-pandemic peak of 2018-19 in 2023-24 due to sustained increase in demand, according to aviation consultancy firm CAPA India's data released on Tuesday.  

International air traffic in India saw faster growth than domestic air traffic in 2023-24. The international air traffic in the country stood at 69.7 million passengers in 2023-24, recording a 22.5 percent year-on-year (YoY) growth. In 2018-19, a total of 69.5 million air passengers travelled internationally.

2.US medtech giant GE HealthCare is re-discovering India. Through its joint venture with Wipro, the company is planning to invest over Rs 8,000 crore (~$1 billion) into India in the next five years. 

The goal is to step-up manufacturing in India. CEO & President Elie Chaillot says GE will export India-made CT scan products and MRI coils to about 15 countries. Sure, it’s partly a China-plus strategy, but that's not the only lure.

It's also India's tech talent. India-based R&D team will play a "growing role" in GE's gen AI push. And if history is any indication, they might just strike gold again.Back in the 2000s, GE famously developed low-cost, compact ECG devices in India, which it took to the US and Europe as well, birthing what Prof Vijay Govindarajan had referred to “reverse innovation”. 

3.Apple has emerged as the top blue-collar job creator in India, thanks to its suppliers Foxconn, Wistron and Pegatron. 

The three companies employed 77,000 workers directly, with Foxconn hiring 41,000, followed by Wistron inducting 27,300, and Pegatron employing 9,200, The Economic Times reported, quoting unpublished government data. 

Apart from the trio, Tata Electronics, Salcomp Technologies, Foxlink and Sunwoda, which between them produce iPhone enclosures, cables and batteries, have hired another 70,000 workers. 

When Indian government officials first started wooing Taiwanese Foxconn to start making Apple devices in India, they also insisted that it should not merely set up assembly units but also make components, including critical ones. While the companies have increased local sourcing, most critical components are still shipped from China. Shifting their manufacturing to India would help workers move up the value chain as well. 

4.Microsoft and OpenAI are working on a supercomputer project worth $100 billion. It’s called Stargate and it involves a U.S.-based data centre that could launch as soon as 2028 reported the Information.

It's no secret that OpenAI and its chief financier Microsoft are charging ahead in a bid to make AI the next big thing in computing.

For reference, $100bn is roughly the combined annual capex of Google, AWS and Azure last year. Two probably-relevant considerations: there is a lot of chatter about how the power consumption of such systems could overload some power grids, and, the challenges of interconnecting training systems across multiple locations.

5.Start-up entrepeneurs -Premium for good governance will be very high, many took it for granted: Sachin Bansal

According to Bansal, governance has to be put in place deliberately and should not be just because you happen to work with founders who are doing the right thing themselves. He added that it should not taken for granted

Numerous cases of mis-governance at Indian startups have resulted in a high premium for good governance, Sachin Bansal, founder of ecommerce startup Flipkart and fintech startup Navi, told Moneycontrol in an exclusive interview.

“The premium for good governance will be very high now. I think we took governance for granted. I believe in the long term, there is a premium for good governance and creating a trustworthy environment where people can take our word for it and trust it blindly. That's the kind of trust you want from your stakeholders,” Bansal said.

The comments assume significance given that Bansal gave the Indian startup ecosystem its biggest company and largest-ever exit and is also an angel investor in many startups.

“As an operator in the startup space as well as a small-time investor, I kind of took governance mostly for granted - that most of the founders are from good backgrounds, they generally do the right things for the business,” Bansal added.

Indian start-ups have faced a prolonged funding winter and a series of governance lapses after the funding euphoria of 2021.

6.Chip Wars: Japan approved $3.9 billion in subsidies to help build semiconductors domestically, the latest in a series of financial packages and inducements by countries seeking to win control of the global chipmaking industry.

The announcement by Tokyo came after the Netherlands last week said it would spend $2.7 billion on local infrastructure to ensure ASML, the advanced semiconductor equipment manufacturer, does not expand abroad, while Beijing is pushing homegrown companies to break Western companies’ stranglehold on key parts of the chipmaking process, the South China Morning Post reported. The U.S., meanwhile, last month offered nearly $20 billion in grants and loans to help Intel expand domestic semiconductor manufacturing.

And, MIT Technology Review reports on How Netherland’s ASML took over the chipmaking chessboard.

Moore is best known for pioneering Moore’s Law, the observation that the number of transistors on an integrated circuit doubles every two years or so. But if Moore deserves credit for creating the law that drove the progress of the industry, it is Dutch company ASML, which makes the machines that in turn let manufacturers produce the most advanced computer chips in the world, that deserves much of the credit for ensuring that progress remains possible. 

Yet that also means the pressure is on. ASML has to continue making sure chipmakers can keep pace with the law. Will that be possible?  Read on.

7.China is trying to sway the U.S. presidential elections, using fake social media accounts of Donald Trump fans to target President Joe Biden, The New York Times reported. 

The tactics are similar to those Russia used during the 2016 election, according to researchers and officials, who linked the activity to the long-running pro-China influence campaign known as “Spamouflage.” Past efforts were seen as “clumsy” and largely ineffective, but the latest network of pro-China accounts have successfully generated attention and engagement, The Times reported, and signals that Beijing might favour Trump over Biden.

“The accounts signal a potential tactical shift in how Beijing aims to influence American politics, with more of a willingness to target specific candidates and parties, including Mr. Biden.

Some of the Chinese accounts impersonate fervent Trump fans, including one on X that purported to be “a father, husband and son” who was “MAGA all the way!!” The accounts mocked Mr. Biden’s age and shared fake images of him in a prison jumpsuit, or claimed that Mr. Biden was a Satanist pedophile while promoting Mr. Trump’s “Make America Great Again” slogan.

This effort has been modest so far, and it remains unclear whether it will grow — or whether Beijing-linked accounts will later try to balance their approach with anti-Trump posts. For now, though, at least parts of the Chinese government appear to have picked a side in the 2024 election.”