Arvind's Newsletter

1. Economist Viral Acharya, formerly a Deputy Governor of Reserve Bank of India, has opined that the Top 5 Conglomerates in India should be broken up in a new paper for the Brooking Institute. “Creating national champions, which is considered by many as the industrial policy of ‘New India,’ appears to be feeding directly into keeping prices at a high level,” said Acharya, who is a professor of economics at New York University Stern School.
   "The “Big 5” consisting of Reliance Group, Tata Group, Aditya Birla Group, Adani Group and Bharti Telecom have grown at the expense of smaller local firms. At the same time, the government’s “sky-high tariffs” have shielded these conglomerates from competition by foreign firms.
   “Such growth of conglomerates raises several concerns, such as the risk of crony capitalism, i.e., political connections and inefficient project allocations, related party transactions within their byzantine corporate organisation charts, over-leveraging due to an implicit too-big-to-fail perception, key-men/women (or key-family) risk in their operational efficiency, and a lack of creative destruction by crowding out of entrants.”

Prof. Acharya’s paper itself is wide ranging and is titled,”India at 75: Replete with Contradictions, Brimming with Opportunities, Saddled with Challenges.” You can read the full paper here

2 India’s IPO Funding halves in FY 2023. The fiscal year FY23 witnessed a lacklustre flow of initial public offerings (IPO) with 37 companies raising upto ₹52,116 crore through the main board. The latest fundraising halved compared to the all-time high performance of ₹1,11,547 crore in FY22. The largest life insurer in India, LIC's IPO accounted for around 39% of the total fundraising in FY23

3.Asia’s ‘best restaurants’ list is out — and it’s no surprise which country made the list 17 times-Japan, Singapore and Thailand tied for second place, with 15 restaurants on the list each. Hong Kong — last year’s top destination — saw 13 establishments on the list.

There are 3 restaurants from India in the top 50 list, topped by Masque based in Mumbai (#16 in Asia), followed by India Accent-New Delhi (#19) and Avartana-Chennai (#30).

The full list is here

4.Britain and the EU plan to cooperate on a carbon border tax, placing an import levy on carbon-intensive goods and reducing incentives to offshore polluting businesses to less regulated nations. It’s a sign of thawing post-Brexit relations, alongside the resolution of the Northern Ireland border issue last month. Britain and the EU are anxious about U.S. green subsidies: Britain’s finance minister wrote in The Times of London, referring to the Inflation Reduction Act, that London would not engage in American-style “protectionism.”

5.Top artificial intelligence researchers, the co-founder of Apple, and Elon Musk are among signatories of an open letter calling for companies to stop training powerful AIs. They argue that advanced AI “could represent a profound change in the history of life on Earth,” and companies should not be racing to unleash it. The letter calls for a six-month pause, providing time to decide whether developing things that might “outnumber, outsmart, obsolete and replace us” is a good idea. Meanwhile, a Goldman Sachs report suggested that generative AIs like GPT-4, the most advanced platform so far debuted, could automate away the equivalent of 300 million jobs, especially in legal and administrative work. On the contra side $335,000 pay for “ AI whisperer” jobs are appearing in a red-hot market .The fast growing apps have created a seller’s market for anyone-even liberal arts graduates-capable of manipulating its output.

Read the letter here