1.Job openings: Entry-level tech hiring takes a hit; campus placements may fall over 50% this year, reported Economic Times
India's IT job market has seen a steady decline in entry-level jobs over the past few years, with a further drop anticipated this year, along with fewer campus hirings. While some upticks were observed in hiring activity, real momentum may only materialise in the latter half of the year.

There is a shift towards niche skill sets like AI and ML, necessitating upskilling initiatives. Challenges persist in aligning educational curricula with industry demands, prompting companies to invest in L&D. Despite ongoing uncertainties, opportunities exist in global development centers, albeit at a slower pace. Proactive upskilling remains crucial for navigating the evolving IT job landscape.

2.The private sector investment cycle shows signs of revival, reported Business Standard

The private sector investment cycle is showing signs of revival. New private sector project announcements in March were at their second-highest level on record, according to data from the Centre for Monitoring Indian Economy (CMIE). The previous high was in March 2023 when large aircraft orders may have skewed numbers.

The current uptick is spread out across multiple sectors. There have been a slew of announcements in the past two months, including the ground-breaking for three semiconductor facilities. Manufacturing and electricity accounted for the majority of new project investments, beating services.

This comes on the back of an increase in the HSBC India Manufacturing Purchasing Managers' Index, which came in at its highest level in 16 years in March. The index has crept higher ahead of the current election season compared to when the current government first came to power in 2014.

Companies typically invest in setting up new production facilities when existing capacity is close to being fully utilised. Capacity utilisation figures are only available with a lag, but the latest numbers were higher than the pre-pandemic levels.

3.Modi’s messenger to the World

S Jaishankar is one of India’s most visible faces on the global stage. As foreign minister now, he was hand picked by Prime Minister Modi to represent India in various roles. Foreign Policy magazine’s latest issue on India has a profile of Jaishankar by Rishi Iyengar that tracks the rise and rise of both men from their early days.

“On paper, Jaishankar is a natural choice to spearhead a rising India’s foreign policy. His ambassadorships in Beijing and Washington gave him a keen understanding of the two major powers defining global geopolitics today, and they came as part of a four-decade diplomatic career that began in the Indian Embassy in Moscow in the late 1970s and included stints in Japan, Singapore, and the Czech Republic. As joint secretary for the Americas in India’s Ministry of External Affairs, he was also a key negotiator for the country’s landmark civilian nuclear agreement with the United States in 2005.

“He already had the reputation of being a whiz kid because he of course had a legendary pedigree,” said Ashley J. Tellis, the Tata chair for strategic affairs and a senior fellow at the Carnegie Endowment for International Peace…. his father, K. Subrahmanyam, a former bureaucrat and government advisor who played a key role in establishing India’s nuclear doctrine and is considered one of the country’s foremost strategic thinkers.’

4.The Indian Giant Has Arrived; Long Read in Project Syndicate by Nobel Prize winning economist Michael Spence and Mohamed Al El-Erian, Chief Economic Advisor to Allianz group.

Some excerpts from this article, which raises three important issues that India will need to deal with:

Firstly, India’s economic muscle in IT Services and its massive diaspora remitting money back home brings $350bn+ of annual inflows into the country, something that no developing country has ever seen before. This allied to foreign investor inflows creates a very real risk of an overvalued currency. If India is to thrive with an overvalued currency, the Indian economy will need to become far more efficient: “On the domestic front, India is on the cusp of an even greater inflow of FDI and portfolio investors. Such capital has many benefits, of course, including job creation, technology transfer, and greater access to cheaper funding. 

But as other countries’ experience shows, large inflows require rapid adaptation of policies and policymakers’ mindsets, as well as measures to overcome internal resistance from domestic incumbents. Otherwise, the benefits will be more than offset by the serious threat of macroeconomic instability, severe resource misallocation, excessive risk taking, and corruption.”

Secondly, environmental issues are already becoming an increasingly prominent challenge for those of us who live in India (eg. smog in the winter, water scarcity in the summer, floods during the monsoons, etc). “Carbon dioxide emissions, another dimension of global impact, paint a similar picture. India ranks behind only China and the United States in terms of overall CO2 emissions. But this, again, is a function of its large population; its per capita emissions are still quite low, at 1.89 metric tons, well below the global average of 4.66 metric tons.

Moreover, India already has plans to reduce its emissions. The chart below, from a 2022 McKinsey Sustainability report, depicts alternate decarbonisation pathways that it could take. The “line of sight” (LoS) scenario (the royal blue line) reflects the anticipated adoption of existing technologies, policies, and commitments that have already been implemented or announced, whereas the accelerated scenario captures further-reaching measures such as carbon pricing and carbon capture, utilisation, and storage (CCUS).

But even the LoS scenario seems very aggressive to us. With overall CO2 emissions peaking in the mid-2030’s, and with 7% annual growth in the interim, it will be achieved only if the carbon intensity of the economy declines at an equally rapid pace. But over the past decade, McKinsey notes, India’s carbon intensity declined at a rate of 1.3% per year. If India manages to stay on the LoS path, its per capita CO2 emissions would peak at 2.71 metric tons – something that has never been done before.”

And, thirdly, the authors contend that if India is to avoid becoming an international outcast like China then deep and early engagement with the global powers is a must: “With India expected to remain the world’s fastest-growing major economy, policymakers face the increasingly complex challenge of balancing external and internal interests, while still maintaining the country’s growth and development trajectory….

Recent history shows that the necessary internal course corrections, as well as the ability to shape international perceptions, can come late or be insufficient. As a result, a country’s (or a company’s) secular transformation can end up being more complicated than it needs to be.

This is not just about India playing defence to manage the growing international expectations that come with increased regional and global influence. It is also about playing offence. The Indian economy is reaching the point where maintaining reliable access to international markets is not just valuable but also important as a development priority.

One of India’s major challenges is to avoid the error that both China and Big Tech made when they failed to recognise their newly acquired global influence and adapt accordingly. In China’s case, policymakers remained too narrowly focused on their domestic development agenda as the country was becoming more systemically important. By the time China woke up to the external realities associated with a growing global footprint, it was already getting serious pushback from other countries. These responses piled up and ultimately created major complications – including by exacerbating domestic challenges – which could now derail, or at least hamper, China’s impressive development journey. Link for article at end of this newsletter.

5.Schengen-like visa for Thailand, Vietnam, 4 other nations: Is it a win-win deal for tourists?

Thailand along with Cambodia, Laos, Malaysia, Myanmar and Vietnam hosted about 70 million tourists last year. And anticipating a tourism boom in the coming years, Thailand Prime Minister Srettha Thavisin is steering an initiative for a Schengen-type visa program for the six nations in South East Asia. The facility will ensure seamless mobility for travelers among the six neighboring countries and also attract more long-haul and high-spending travelers

As per a Bloomberg report, Srettha has discussed the single-visa concept with his counterparts and most leaders have responded to it positively. However, to make it attractive, the visa validity will need to be extended to 90 days from the usual 30-day period, she said.

6.US office vacancy rate nears 20% to set fresh record, Moody’s says.

Despite a strong overall economy, commercial real-estate tenants are downsizing as hybrid work becomes the norm, taking vacancy rates past peaks set in the downturn of 1991, according to Moody’s. 

London has seen similar changes: Big tenants such as HSBC, Clifford Chance, and Moody’s itself are leaving the east London financial center of Canary Wharf. 

The departures have “called into question the areas appeal” to the large financial firms that have long called it home, the Financial Times reported, as working patterns shift in the wake of the pandemic.

7.Microsoft says a China-backed group is using AI misinformation to sway foreign elections

Microsoft Threat Intelligence released a report on Friday saying that China “will, at a minimum, create and amplify AI-generated content that benefits their positions” ahead of high-profile elections in the U.S., South Korea, and India.

The company’s team of cyberthreat experts and researchers found that an online operation backed by the Chinese Communist Party, known as “Spamouflage” or “Dragonbridge,” has begun using AI in attempt to influence public opinion in Taiwan and Canada. In Taiwan, Spamouflage used AI to make fake audio clips of a former candidate, who had dropped out of the race months earlier, endorsing someone else.

8.Narendra Modi’s welfare ‘freebies’ offer an election boost, reports Financial Times; Long Read.

Modi’s close association with help for the poor could play a key role in deciding whether his Bharatiya Janata party retains power at India’s general election, which begins on April 19. Since taking office in 2014, he has presided over an expansion of programmes for India’s poorest, many prefixed with the words Prime Ministerial and featuring his name and picture.

In the financial year 2022-23, India’s total spending on its seven largest subsidy schemes totalled Rs6.8tn ($82bn), more than twice the Rs2.6tn spent in 2014-15, Modi’s first year in power, government data compiled by the Financial Times shows.

The schemes include the free food grain programme, which is known by its Hindi acronym PMGKAY and reaches 813mn people, and housing and health insurance schemes known by their acronyms PMAY and PM-JAY.

Two other programmes for the poor work under Modi’s patronage. Jal Jeevan is a mission to provide Indian households with tap water connections.

And one of Modi’s signature campaigns, Swachh Bharat, or Clean India, launched in 2014, set out to free Indians from the blight and indignity of open defecation.

 Since its launch the government has spent Rs909bn on building 115mn toilets.

Analysts say government handouts and subsidies, which all political parties deploy and which Indians including Modi derisively call freebies or in Hindi rewadis (sweeties), long predate the prime minister’s ascent.

India saw an expansion of its welfare state under former governments led by the centre-left opposition Indian National Congress, but the governments they led were prone to corruption and waste.

Analysts say Modi has transformed welfare distribution and reduced the scope for pilferage by linking entitlements to biometrics such as fingerprints via its pioneering Aadhaar digital ID system.

Food security is a long running issue in India, which suffered major famines in the past and whose Supreme Court in 2001 upheld a constitutional right to food. 

After a long-running push by civil society groups and public interest litigants, India passed a national food security act in 2013, under a Congress-led government that the BJP ousted the following year.

The act entitled up to 75 per cent of India’s rural population and up to 50 per cent of city dwellers to subsidised food for a nominal payment. 

In 2020, when millions of Indians lost their work during the Covid-19 pandemic, Modi refashioned the scheme as PMGKAY and made the entitlement of 5kg of food grain per eligible Indian not just subsidised but free. Last year his government extended the scheme for another five years, a move widely seen as pitched to voters in the run-up to the poll.

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