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A significant percentage of organizations see artificial intelligence as the key to <keyword id="19959627" type="General" weightage="20" keywordseo="competitive-advantage" source="keywords">competitive advantage</keyword>. According to the "Industry 5.0 and <keyword id="19899640" type="General" weightage="100" keywordseo="AI" source="keywords">AI</keyword> Report," compiled by <keyword id="22094332" type="General" weightage="20" keywordseo="BML-Munjal-University" source="keywords" meta.keywordsubtype="org" meta.entityname="BML Munjal University" meta.hostid="153" meta.entityid="BML Munjal University">BML Munjal University</keyword>, 44% of organizations have experienced a significant boost in productivity through <keyword id="20230984" type="General" weightage="20" keywordseo="AI-integration" source="keywords">AI integration</keyword>. Additionally, 21% reported that AI can play a pivotal role in driving innovation, enabling the development of new products, services, and business models, particularly in sectors like finance, healthcare, manufacturing, and marketing. "Approximately 33% of organizations focus on product development, while 29% leverage AI for customer service through chatbots and robotic process automation (RPA). Marketing teams, representing 19% of businesses, utilize AI for trend analysis, while 13% apply AI to improve supply chain management. Financial planning, though less prominent (6%), benefits from AI's efficiency-boosting capabilities," the report added. Based on responses from 1,000 professionals and in-depth interviews with 50 industry experts, the report highlighted a significant shift in how businesses are integrating AI into their strategies. While AI has delivered numerous benefits, the report also highlights some key challenges. "Around 34% of organizations face a critical shortage of AI-trained personnel, which hinders their ability to fully leverage AI's potential. This skills gap highlights the need for better AI education and continuous learning programs. In fact, 31 %of organizations have started mentorship initiatives to help develop talent," the report said. AI's impact varies by sector; in mergers and acquisitions, 28% have seen benefits in personalized campaigns, but data privacy remains a hurdle for 22%. IT and augmented reality sectors report enhanced productivity (44%), but struggle with talent shortages. "In finance, AI improves risk management, though 18% face regulatory challenges. Healthcare has seen advancements in diagnostics, yet ethical concerns remain significant for 18% of professionals. In manufacturing, 23% recognize process optimization benefits from AI, but 21% struggle with legacy system integration," it said. Qualitative interviews with industry professionals reveal that transparency in AI decision-making is crucial, with 21% expressing concerns about the "black box" problem. "There are also ethical concerns, with 20% of respondents mentioning algorithmic bias and 22% expressing worries about data privacy. These issues show the need for responsible <keyword id="20355187" type="General" weightage="20" keywordseo="AI-governance" source="keywords">AI governance</keyword>, prompting 38.3% of organizations to adopt <keyword id="21198326" type="General" weightage="20" keywordseo="ethical-AI" source="keywords">ethical AI</keyword> guidelines to ensure transparency," it said. According to Pratik Modi, Dean School of Management, BML Munjal University, AI enhances human-machine collaboration. "As organisations embrace this new era, the report's findings offer a roadmap for integrating AI while prioritizing ethical standards and fostering human creativity," it said.

Most organizations see AI as key to competitive advantage, notes a new report

India’s electric vehicle (EV) sector, often seen as a key player in the country’s clean energy transition, has been called “irrelevant” without government <keyword id="20231384" type="General" weightage="20" keywordseo="incentives" source="keywords">incentives</keyword> by a recent Bernstein research report. The report highlights the serious challenges automakers face in achieving profitability and scaling operations in the EV segment, which remains heavily reliant on financial support from the government. <h2>Struggling to achieve profitability</h2>The Bernstein report reveals that generating profitable margins in the Indian EV sector is proving to be an uphill battle for automakers. “It is tough to generate sufficient margins and get scale in EVs. Even with hefty incentives, incumbent OEMs are still unprofitable,” the report stated. This underscores the fact that even with <keyword id="20022183" type="General" weightage="20" keywordseo="government-subsidies" source="keywords">government subsidies</keyword> aimed at promoting <keyword id="20138204" type="General" weightage="20" keywordseo="electric-mobility" source="keywords">electric mobility</keyword>, automakers are struggling to make EVs financially viable. High production costs, limited infrastructure, and relatively low consumer demand all contribute to this issue. Traditional automakers, particularly in India’s two-wheeler market, are facing significant financial losses. According to Bernstein, while some niche startups may survive, their long-term market share will likely remain limited, and competition will primarily be between established original equipment manufacturers (OEMs). The key challenge for these OEMs is achieving the scale and cost reductions required to compete with the well-entrenched internal combustion engine (ICE) sector. <h2>Reliance on incentives</h2>One of the most striking conclusions from Bernstein’s analysis is the deep reliance of the EV sector on government subsidies. Without these incentives, the <keyword id="19952060" type="General" weightage="100" keywordseo="EV-Industry" source="keywords">EV industry</keyword> would be unable to compete with traditional ICE vehicles. “The EV Industry is not relevant without incentives currently, and to break the ICE sector, it needs intense focus, scale, and continued cost downs,” the report emphasised. This indicates that while government schemes like GST benefits have helped reduce the cost difference between EVs and ICE vehicles, they are not enough to ensure the long-term sustainability of the EV sector. Bernstein estimates that the overall EV two-wheeler industry in India generates around USD 1.3 billion in annual revenues, but without government support, the sector incurs an EBIT loss of approximately USD 300-400 million. The high cost structure of EVs, combined with the relatively low sales volumes, makes it difficult for companies to operate without subsidies. <h2>Established players face mixed fortunes</h2>Among India’s leading two-wheeler manufacturers, Bernstein noted that <keyword id="19897354" type="General" weightage="20" keywordseo="Bajaj-Auto" source="keywords" meta.keywordsubtype="org" meta.entityname="Bajaj Auto" meta.hostid="265" meta.entityid="Bajaj Auto">Bajaj Auto</keyword> and <keyword id="20326963" type="General" weightage="20" keywordseo="TVS-Motors" source="keywords" meta.keywordsubtype="org" meta.entityname="TVS Motors" meta.hostid="265" meta.entityid="TVS Motors">TVS Motors</keyword> are on a similar footing in terms of their performance in the EV space. Bajaj Auto received an "Outperform" rating from Bernstein due to its lower valuations, while TVS Motors was rated "Market Perform" after it was found to be losing approximately 7.5% in EBITDA, or Rs 11,000 per vehicle, despite generating a gross profit margin of 7% without subsidies. <div type="Article" hostid="261" msid="113631992" title="Tata Nexon EV with a bigger battery launched starting at ₹13.99 lakh" mstype="2" mssubtype="0"></div>Hero MotoCorp, a major player in India’s automotive market, lags behind both Bajaj and TVS in terms of its EV offerings. Bernstein also pointed out that Eicher Motors, which is expected to launch its own <keyword id="19895203" type="General" weightage="20" keywordseo="electric-vehicles" source="keywords">electric vehicles</keyword> soon, is likely to remain “sub-scale and less relevant” in the competitive EV landscape. Interestingly, <keyword id="19897349" type="General" weightage="20" keywordseo="Ola-Electric" source="keywords" meta.keywordsubtype="org" meta.entityname="Ola Electric" meta.hostid="265" meta.entityid="Ola Electric">Ola Electric</keyword> (Ola-E) stands out as a startup that has been able to generate positive operating earnings (EBITDA) from its premium models like the S1 Pro and S1 Air, even as it incurs losses on its mass-market model, the S1X. “Our analysis indicates that Ola-E is generating positive operating EBITDA from its premium models, such as the S1 Pro and S1 Air while incurring a loss on its mass-market model, the S1X,” the report said. While Ola has shown some promise, it too remains heavily dependent on subsidies to maintain its financial health. <h2>Long-term outlook</h2>Bernstein’s report paints a challenging picture for the future of India’s EV sector, suggesting that while dominant startups may survive, the majority of the competition will come from traditional automakers. However, without significant scale and continued cost reductions, the EV industry will struggle to become self-sustaining. <div type="Article" hostid="261" msid="113315022" title="Waiting for the festive season to buy an EV? Cabinet approves PM E-Drive subsidising most EVs, sans electric cars" mstype="2" mssubtype="0"></div>Bernstein emphasised that to truly compete with ICE vehicles, the EV sector needs to focus on scaling up operations, reducing costs, and maintaining long-term commitment. Until these conditions are met, India’s EV industry will remain highly dependent on government support and may continue to face an uphill battle for relevance. In conclusion, while India’s EV sector is seen as a vital part of the country’s clean energy future, Bernstein’s analysis highlights that it is far from being self-reliant. The industry’s heavy dependence on government incentives raises questions about its long-term sustainability and relevance, particularly in the face of ongoing challenges with profitability and scale. (With inputs from ANI)

Why has Bernstein called India’s EV sector 'irrelevant'?

A day before the official release of India's Gross Domestic Product (<keyword id="35050" type="General" weightage="20" keywordseo="GDP" source="Orion">GDP</keyword>) figures for <keyword id="21593310" type="General" weightage="20" keywordseo="Q1-FY25" source="keywords">Q1 FY25</keyword>, a report by <keyword id="20548750" type="General" weightage="20" keywordseo="Anand-Rathi" source="keywords" meta.keywordsubtype="org" meta.entityname="Anand Rathi" meta.hostid="261" meta.entityid="Anand Rathi">Anand Rathi</keyword> research estimates the GDP to grow by 7 per cent, primarily driven by the robust performance of the services sector. The financial advisory firm also maintains its full-year <keyword id="19972825" type="General" weightage="20" keywordseo="GDP-growth" source="keywords">GDP growth</keyword> projection at 7 per cent, though it warns of potential downside risks. Utilities GVA is expected to rise by 11.5 per cent, while the construction sector has slowed due to election-related disruptions and the impact of heat. The mining sector remains strong, supported by increased coal production. The services sector is expected to be the primary driver of GDP growth in Q1 FY25. Despite reduced <keyword id="20155204" type="General" weightage="20" keywordseo="government-spending" source="keywords">government spending</keyword> ahead of the elections, which is likely to dampen growth in some service sectors, financial, real estate, and professional services are expected to have performed well. This performance is attributed to strong market activity and credit growth. However, the trade and transport sectors present a mixed picture, with some indicators showing improvement while others remain moderate. Overall, Services Gross Value Added (GVA) is expected to grow by 8.2 per cent in Q1 FY25. As per the report, Investment was a key growth driver in FY24, fuelled by government infrastructure projects and a real estate upswing. However, the momentum appears to have slowed in Q1 FY25 due to pre-election restrictions. Despite this, the report predicts a significant rise in government capital expenditure in the coming months, supported by greater budget allocations. The report highlights the changing dynamics of private consumption in India. FY24 saw weak consumption, especially in rural areas, with final consumption expenditure growing by just 3.8 per cent. However, as FY25 begins, there are signs of a rural revival. Indicators such as increased two-wheeler sales and improving Fast-Moving Consumer Goods (FMCG) volume growth signal a rebound in rural demand. In contrast, urban demand continues to show signs of sluggishness. The muted sales of passenger vehicles, weaker retail credit transfers, and flat Goods and Services Tax (GST) collections underscore this trend. While consumption is not expected to see a significant rise in Q1 FY25, the outlook for the remainder of the year appears positive. This optimism is bolstered by anticipated higher agricultural output and sharper government focus on rural areas. The agriculture sector is expected to post a subdued growth of 2.1 per cent in Q1 FY25, affected by scorching heat and uneven rainfall last year, which led to lower reservoir levels and hindered farming activities. However, the outlook is more promising for the remainder of the fiscal year, with better rains and improved sowing conditions expected to boost agricultural output Additionally, a rebound in stamp duty collections suggests buoyant real estate sales. Private capital expenditure, which was previously subdued, is expected to expand in FY25, driven by rising capacity utilisation and strong order books. The industrial sector, which grew by 9.5 per cent in FY24, is expected to see a shift in growth drivers in Q1 FY25. The focus is now moving towards utilities and mining, with manufacturing growth slowing. While government infrastructure projects and private capital expenditure will continue to support industrial growth, the global growth slowdown poses potential risks.

Anand Rathi anticipates Q1 FY25 GDP growth at 7%, a little lower than RBI's estimate of 7.1%

<keyword id="19955404" type="General" weightage="20" keywordseo="finance" source="keywords">Finance</keyword> Minister <keyword id="19916618" type="General" weightage="20" keywordseo="nirmala-sitharaman" source="keywords">Nirmala Sitharaman</keyword> presented the Union <keyword id="19936553" type="General" weightage="100" keywordseo="budget" source="keywords">Budget</keyword> 2024-25 on Tuesday, outlining a detailed financial roadmap aimed at driving economic growth and ensuring fiscal stability. The budget reveals a comprehensive picture of government revenues and expenditures, highlighting major <keyword id="20439675" type="General" weightage="20" keywordseo="allocations" source="keywords">allocations</keyword> to key <keyword id="20353247" type="General" weightage="20" keywordseo="sectors" source="keywords">sectors</keyword> and <keyword id="19915334" type="General" weightage="20" keywordseo="schemes" source="keywords">schemes</keyword>. The <keyword id="19945274" type="General" weightage="20" keywordseo="revenue" source="keywords">revenue</keyword> to the government is generated from multiple sectors. Income tax contributes 19 per cent, borrowings and liabilities stand as the largest source at 27 per cent, and <keyword id="19951327" type="General" weightage="20" keywordseo="gst" source="keywords">GST</keyword> along with other taxes accounts for 18 per cent. Corporation taxes contribute 17 per cent, followed by non-tax receipts at 9 per cent, customs at 4 per cent, excise duty at 5 per cent, and non-debt capital receipts at 1 per cent. On the <keyword id="19936655" type="General" weightage="20" keywordseo="expenditure" source="keywords">expenditure</keyword> side, the budget outlines significant allocations to various public sectors. Interest payments consume 19 per cent of the total expenditure, central sector schemes account for 16 per cent, and states' tax devolution takes up 21 per cent. Subsidies represent 6 per cent of the spending, while defence expenditures stand at 8 per cent. The Finance Commission and other transfers take up 9 per cent, centrally sponsored schemes another 8 per cent, pensions 4 per cent, and other expenses 9 per cent. In terms of sector-specific allocations, defence receives the highest allocation at Rs 4,54,773 crore. Rural development is allocated Rs 2,65,808 crore, reflecting the government's focus on boosting rural economies. Agriculture is set to receive Rs 1,51,851 crore, while home affairs are allocated Rs 1,50,983 crore, underscoring the importance of internal security. Education, a critical sector for future growth, is allocated Rs 1,25,638 crore. The IT and Telecom sector, pivotal for digital transformation, receives Rs 1,16,342 crore. Health is allocated Rs 89,287 crore, emphasising the ongoing commitment to improving healthcare infrastructure. The energy sector is earmarked Rs 68,769 crore, social welfare Rs 56,501 crore, and commerce and industry Rs 47,559 crore. The budget also highlights significant increases in allocations to major schemes. The Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) sees an increase from Rs 60,000 crore in FY23-24 to Rs 86,000 crore in FY24-25, aimed at enhancing rural employment. Nuclear power projects receive a boost from Rs 442 crore to Rs 2,228 crore, while the development of semiconductors sees a substantial increase from Rs 3,000 crore to Rs 6,900 crore, underscoring the push towards technological advancement. Direct Benefit Transfer for LPG is allocated Rs 1,500 crore, up from Rs 180 crore, to support energy access. Solar power allocation doubles from Rs 4,970 crore to Rs 10,000 crore, reflecting the government's commitment to renewable energy. This budget, with its detailed allocations and revenue plans, underscores the government's strategy to foster economic resilience, technological advancement, and sustainable growth.

Fund allocations to key sectors and schemes hiked in budget

<ul class="summary-list"><li>Russia almost tripled its defense spending to finance its invasion of Ukraine.</li><li>Defense firms are busy — but high inflation and interest rates past 20% have left them struggling.</li></ul>In Russia's defense sector, demand is surging — but its companies are struggling all the same.The Kremlin is seeking ever more weapons for its attack on Ukraine.But sky-high interest rates are leaving companies struggling to turn a profit, a prominent CEO recently said.Sergei Chemezov, CEO of the defense conglomerate Rostec, sounded the alarm in an address to Russian senators in late October.He <a target="_blank" class="" href="https://www.rbc.ru/economics/23/10/2024/6718c36a9a79476b774f1989">said</a> "record" interest rates were "eating up" the profit from its orders.<h2 id="f760578d-7185-4150-bf09-fde6f3d70c06">Debt trap</h2>He said clients tended to pay 30%-40% of an order's value in advance, leaving the firm to borrow the rest.That debt, he said, was so expensive that it canceled out any profit on the work."If we continue to work like this, then most of our enterprises will go bankrupt," he said.A few days after he spoke, Russia's central bank <a target="_blank" class="" href="https://www.businessinsider.com/russian-central-bank-raises-key-interest-rate-to-21-2024-10">hiked its main interest rate further still</a>, from 19% to 21%.Rostec is not alone in its predicament, economic analysts told Business Insider.Rising interest rates and export bans were eroding Russian defense companies' profits across the board, they said, making the Russian state the only guarantor of revenues.<h2 id="b9ad0c28-486e-4588-b4c2-4b027ca1e40d">Sustaining the war machine</h2>Since launching a full-scale invasion of Ukraine about two and a half years ago, the Kremlin has taken a slew of measures to keep its defense sector pumping out tanks, ammunition, drones, and missiles.It restructured its economy to prioritize the war, imposed export bans, tapped its national wealth fund, and strengthened trade with non-Western countries.Its defense budget soared, from $59 billion in 2022 to $109 billion in 2023.It's heading for an <a target="_blank" class="" href="https://www.sipri.org/media/newsletter/2023-december">estimated $140 billion</a> in 2024, with a draft budget forecasting $145 billion for 2025.That figure would represent 6.3% of Russian GDP, the highest share since Soviet times.That spending has consequences, said Roman Sheremeta, an associate professor of economics at the Weatherhead School of Management at Case Western Reserve University."The government pumped enormous sums of money to support the war efforts," he told Business Insider. "And the Russian reserves have been almost depleted."The liquid assets of Russia's national wealth fund dropped by almost half, from 8.9 trillion rubles (about $91 billion) before the war to 5 trillion rubles (about $51 billion) at the end of last year, Bloomberg <a target="_blank" class="" href="https://www.bloomberg.com/news/articles/2024-01-17/war-in-ukraine-drains-nearly-half-of-accessible-russian-reserves">reported</a> in January, citing Finance Ministry data."The Kremlin cannot afford defense companies to go bankrupt," Sheremeta said.<h2 id="86664911-b4d8-4aec-ad9a-8c27b113bb7b">A 'death spiral'</h2>While huge defense expenditures have contributed to economic growth in Russia and <a target="_blank" class="" href="https://www.businessinsider.com/russia-economy-ukraine-war-moscow-military-spending-currency-inflation-budget-2024-9">averted a recession</a>, they also fueled inflation.When it hiked the key interest rate to 21%, Russia's central bank said its mission was to tame inflation.In September, Russia's annual inflation rate rose to 8.6%, far above its 4% target.Sheremeta described the situation as a "death spiral," where war spending begets more inflation, which requires more war spending."What is even worse for those companies," he said of the defense firms, "is that they cannot export due to sanctions and sell their weapons for US dollars or Euros."Daniel Treisman, a professor of political science at the University of California, Los Angeles, and a research associate of the National Bureau of Economic Research, said Russia could end up with hyperinflation."As the budget deficit rises in the face of military costs, the need to cover part of it by printing money will drive prices ever higher, and the Central Bank will have to hike interest rates further to slow them," he said.<h2 id="2a236608-2617-4e7e-8687-d480f19dea32">A crisis point — but not yet</h2>The experts BI spoke to both said Russia could sustain its spending for a year or more before a crisis point.Some see even more runway.Iikka Korhonen, the head of research at the Bank of Finland Institute for Emerging Economies, said defense companies won't be allowed to go bankrupt, and would instead be restructured or bailed out.Russia has done that before, saving indebted defense firms in 2016 during an earlier financial crisis.If that doesn't fix the problem, "other sectors will be cut" to keep defense firms going, Korhonen said.Julian Cooper, Professor Emeritus at the Centre for Russian and East European Studies of the University of Birmingham, made similar remarks."If some defense companies cannot fulfill their obligations, the Kremlin can simply nationalize them," Sheremeta said.Konstantin Sonin, a professor at the University of Chicago Harris School of Public Policy, forecast a dark economic future ahead for Russia due in part to "borrowing" funds from the future.In an <a target="_blank" class="" href="https://www.businessinsider.com/russia-economy-ukraine-war-outlook-moscow-sanctions-west-firms-uchicago-2024-10">op-ed</a> for Project Syndicate earlier this month, Sonin wrote that massive investment in military production at the expense of key public spending programs may strengthen Putin's hand in the short term."But it sets a time bomb under longer-term economic development," he wrote."Whenever the Ukraine war ends and Russia returns to international trade (beyond raw materials), all the nationalizations of recent years will come back to haunt it," he wrote.

Russia's defense sector is running on overdrive — but firms are warning of bankruptcy

Donald <keyword id="19906203" type="General" weightage="20" keywordseo="Trump" source="keywords">Trump</keyword> and <keyword id="19903807" type="General" weightage="100" keywordseo="Elon-Musk" source="keywords">Elon Musk</keyword> have apparently become great friends over recent months. Musk poured millions of dollars into Trump's successful election campaign and has been a vocal and visible supporter of the president-elect. In return, he's been given a new job, in joint charge of the new <keyword id="23593857" type="General" weightage="20" keywordseo="Department-of-Government-Efficiency" source="keywords">Department of Government Efficiency</keyword> (Doge), where he will be tasked with streamlining government operations and reducing bureaucracy. This "department"—actually an advisory group—will aim to cut unnecessary spending and make the general functioning of the US government more efficient. The idea is that within a federal budget of over US$6 trillion, there are opportunities to make some big savings. Musk's appointment—like many things he's involved with—has sparked controversy. The richest man in the world has already said he wants to cut spending by US$2 trillion (£1.6 trillion) and mentioned setting up a "leaderboard for most insanely dumb spending of your tax dollars.". Some are concerned about the impact he could have on public services. Others fear he will use his position to promote his own business interests. On the positive side, Musk has a very impressive CV when it comes to big organisations. He has created (or co-created) multi-billion-dollar businesses, including Paypal, <keyword id="19895433" type="General" weightage="20" keywordseo="Tesla" source="keywords" meta.keywordsubtype="org" meta.entityname="Tesla" meta.hostid="261" meta.entityid="Tesla">Tesla</keyword>, and <keyword id="19905255" type="General" weightage="20" keywordseo="SpaceX" source="keywords" meta.keywordsubtype="org" meta.entityname="SpaceX" meta.hostid="261" meta.entityid="SpaceX">SpaceX</keyword>. He has founded startups involved in AI (xAI), tunnelling (the Boring Company), and medicine (<keyword id="19985233" type="General" weightage="20" keywordseo="Neuralink" source="keywords" meta.keywordsubtype="org" meta.entityname="Neuralink" meta.hostid="261" meta.entityid="Neuralink">Neuralink</keyword>). And research suggests that much of Musk's success comes down to a relentless focus on efficiency. He has also been praised for the depth of his analytical thinking and innovative problem solving. Tesla's factory in California went from being the least productive car manufacturing plant in the US when it was owned by General Motors to the most productive under Musk's ownership. SpaceX has vastly reduced costs in the space cargo business. So he has form. And Musk is not the first American business leader to offer private sector expertise to the world of politics. Back in the 1960s, Robert McNamara, former president of the Ford Motor Company, served as secretary of defence under presidents John F. Kennedy and Lyndon B. Johnson. McNamara brought significant innovations to <keyword id="22668770" type="General" weightage="20" keywordseo="government-efficiency" source="keywords">government efficiency</keyword> that drew on his corporate experience. He championed cost-benefit analysis and a data-driven approach to decision-making and was keen on reducing bureaucracy and promoting accountability in complex governmental processes. To achieve this, McNamara recruited a team of experts from the worlds of academia and business. Known as the "Whizz Kids," they brought new perspectives to the White House. In the UK now, the Labour government's minister of state for investment is Poppy Gustafsson, a former venture capitalist and tech founder. Its minister for prisons is James Timpson, former CEO of the Timpson Group, a family firm renowned for hiring ex-offenders. These people—and there are many other examples around the world—were brought into the political sphere because of the knowledge and vision they have demonstrated in the private sector. The hope is their talent and leadership will improve policy and practice. <h2>Data-driven reform</h2>The same must be hoped for Musk: that with his co-leader, Vivek Ramaswamy—a biotech entrepreneur and former Republican leadership candidate—he will bring expertise in cost-cutting and innovative strategies. This will probably include comprehensive audits and data-driven approaches to reform. Critics refer to prior examples of Musk's approach, such as the mass layoffs and aggressive cost-cutting measures at Twitter (now X), with concerns that there could be similarly drastic reductions in the federal workforce and public services. But big job cuts were happening across the tech sector at that time. They came in the wake of reduced revenues and a need to reduce bloated workforces and ineffective functions—not unlike the challenges faced by the US government. Nevertheless, while proponents see Musk as an experienced leader capable of streamlining bureaucracy, sceptics fear the advent of harmful austerity measures that risk disruption to essential public programs. Concerns have also been raised about potential conflicts of interest, as Musk's business empire benefits from government contracts. However, since Doge will operate as an advisory body, concerns over him gaining advantage through any self-dealing seem overblown. Besides, two of Musk's companies (SpaceX and Tesla) have been awarded US$15.4 billion (£12.3bn) in federal contracts in the last decade. Perhaps then, success precedes influence rather than the reverse? Doge will also be governed by the Federal Advisory Committee Act, which maintains legal and ethical guardrails. And Congress will have the final say over any decisions. Fears of the worst possible outcome to Musk's appointment are a natural human response in the face of uncertainty. It is part of the reason that negative headlines get more clicks than positive ones. It is also true that Musk has aligned himself with a politician who divides opinion like few others. By leveraging his billions of dollars and 200 million followers on X to help Trump to victory, he made it clear which side he was on. And in a highly polarised US political landscape, the anguish about his governmental role may be little more than a knee-jerk reaction from the millions of people whose side he did not choose.

Love him or loathe him, Elon Musk is a champion of efficiency and could save the US government a fortune

The Indian IT services sector is staring at a second consecutive year of muted <keyword id="19965932" type="General" weightage="20" keywordseo="revenue-growth" source="keywords">revenue growth</keyword> due to modest increase in <keyword id="21414675" type="General" weightage="20" keywordseo="tech-spends" source="keywords">tech spends</keyword> in Europe and the US, a domestic rating agency said on Wednesday. Crisil Ratings said it expects the sector to grow at 5-7 per cent in FY25, after a growth of 6 per cent estimated to have been achieved in FY24. The overall industry size is pegged at USD 250 billion and it creates over 50 lakh direct jobs. "The slowdown in technology spend will continue this fiscal, weighing on the revenue growth of IT service providers," said Aditya Jhaver, director at Crisil. The industry is, however, expected to sustain in the key metric of profitability, as the operating profit margins will be stable at 22-23 per cent, the agency said, attributing it to prudent management of <keyword id="19999266" type="General" weightage="20" keywordseo="employee-costs" source="keywords">employee costs</keyword>. Crisil said the sectoral revenues achieved a compounded annual growth rate of 12 per cent for the decade through FY24. High interest rates and economic slowdown in client markets led to a modest single-digit growth in tech spends by companies in the banking, financial services and insurance (BFSI), retail, technology and communications sectors in FY24, the agency said. It said these four sectors account for nearly two-thirds of the industry's revenues. Jhaver said revenue from BFSI and retail segments will continue to be a drag with subdued growth of 4-5 per cent in FY25. Manufacturing and healthcare, which contribute a tenth of the revenue, were the only bright spots and continued double-digit growth in tech spend given the focus on process automation and research and development-based analytics, especially in healthcare. As revenue growth remained subdued, IT service companies pulled back on addition of fresh talent, resulting in headcount reductions by 4 per cent in 2023 by top 12 companies. This, along with the decline in attrition to 13 per cent as of December 2023 from the high of 20 per cent in FY23 provided a breather by limiting higher-cost replacement hiring during FY24, it said. Associate director Joanne Gonsalves said the ratings company expects IT service providers to remain "cautious" on fresh hiring in FY25 too, which will maintain employee utilisation at a healthy level of ~85 per cent. Continued healthy cash generation, strong balance sheets and sizeable cash surplus will keep the credit quality of IT service providers stable, the rating agency said. Players will continue to eye acquisitions, especially small and mid-sized opportunities that could enhance their product baskets and increase digital capabilities, it said. An appreciation in the rupee value or sustained delay in economic revival in key markets amid ongoing geopolitical conflicts could pose downside risks, it added. SEE ALSO:<a href="https://www.businessinsider.in/tech/mobile/news/realme-narzo-70-narzo-70x-5g-smartphones-launched-in-india-starting-at-11999/articleshow/109557895.cms" target="_blank"></a> <a href="https://www.businessinsider.in/tech/mobile/news/realme-narzo-70-narzo-70x-5g-smartphones-launched-in-india-starting-at-11999/articleshow/109557895.cms" target="_blank">Realme Narzo 70, Narzo 70X 5G smartphones launched in India starting at ₹11,999</a> <a href="https://www.businessinsider.in/tech/news/apple-let-loose-event-scheduled-for-may-7-ipads-expected-to-be-launched/articleshow/109553148.cms" target="_blank"></a> <a href="https://www.businessinsider.in/tech/news/apple-let-loose-event-scheduled-for-may-7-ipads-expected-to-be-launched/articleshow/109553148.cms" target="_blank">Apple Let Loose event scheduled for May 7 – New iPad models expected to be launched</a><a href="https://www.businessinsider.in/tech/mobile/news/google-pixel-8a-may-be-more-expensive-than-its-predecessor-as-per-a-new-leak/articleshow/109499394.cms" target="_blank"></a> <a href="https://www.businessinsider.in/tech/mobile/news/google-pixel-8a-may-be-more-expensive-than-its-predecessor-as-per-a-new-leak/articleshow/109499394.cms" target="_blank">Google Pixel 8a may be more expensive than its predecessor, as per a new leak</a>

Indian IT sector staring at 2nd straight year of muted revenue growth: Crisil

<ul class="summary-list"><li>The Department of Government Efficiency wouldn't be a department, but an outside advisory group.</li><li>Under current law, Congress needs to approve most budget changes, limiting the DOGE's power.</li></ul>President-elect Donald Trump on Wednesday announced a new effort to slash what he sees as federal inefficiency, with Elon Musk as cost-cutter-in-chief.Trump <a target="_blank" href="https://www.businessinsider.com/elon-musk-trump-cabinet-election-x-2024-9">made good on a campaign promise</a> when he tapped Musk to co-lead the proposed "Department of Government Efficiency," or DOGE, alongside former GOP presidential candidate Vivek Ramaswamy.Musk says he wants to cut $2 trillion from the federal budget to make it more efficient and effective. Beyond that, though, little is known about how the DOGE will function and how much power it — <a target="_blank" href="https://www.businessinsider.com/trump-adopts-elon-musk-plan-cut-government-spending-efficiency-reform-2024-9">and Musk</a> — will have.Musk did not respond to Business Insider's request for comment for this article. A representative for Ramaswamy declined to comment.<h2 id="2dc0c03e-9977-4403-9201-3d55e844524d">What do we know about the DOGE?</h2>Despite its name, the DOGE will <a target="_blank" href="https://www.businessinsider.com/elon-musks-doge-gets-a-government-checkmark-on-x-2024-11">not actually be a government department</a>, as departments are permanent and can only be created by Congress. Instead, it will function "outside of the government" and disband by July 4, 2026, Trump said in a statement.<div type="image" title="Trump and Musk at a rally" height="2584" width="4184" msid="115360794" hostid="261" sizebytes="161264"></div>The name DOGE is an homage to Musk's preferred cryptocurrency, Dogecoin, which shot up in value after Trump won the election. Under current law, the DOGE might not be able to accomplish much, since Congress controls federal spending."They have no power. No power at all," Elaine Kamarck, a senior fellow at the nonpartisan Brookings Institute who led efforts to reform the federal government under former President Bill Clinton, told Business Insider. "They do make recommendations, and once they make recommendations, the expectation is that the government will act on them."There's no guarantee that a recommendation will turn into a policy, especially given that many of the DOGE's suggestions will likely require congressional approval, Kamarck said.<h2 id="0f11a880-6c1f-4025-a722-a860ae33d16c">The DOGE's $2 trillion goal is something of a pipe dream.</h2>Federal spending <a target="_blank" href="https://www.businessinsider.com/trump-elon-musk-vivek-ramaswamy-department-government-efficiency-doge-2024-11">reached $6.75 trillion in 2024</a>. Multiple experts told BI that it's unlikely Musk will be able to cut his desired $2 trillion without sacrificing programs that have wide bipartisan support or fall under federal mandatory spending, like Medicare and Social Security. Kamarck called the $2 trillion goal the "most unrealistic" part of the whole DOGE plan.Trump has long been preoccupied with cutting what he sees as Washington's waste and fraud."The Department of Government Efficiency (DOGE) will ultimately be staffed and dedicated to this mission," Brian Hughes, a spokesperson for Trump's transition team, told BI in a statement.Quoting former Rep. Barney Frank, Kamarck said that excess federal spending is "marbled" <a target="_blank" href="https://www.businessinsider.com/elon-musk-vivek-ramaswamy-doge-government-efficiency-what-us-spends-2024-11">throughout the budget</a>, like fat throughout a steak, making the DOGE's desired $2 trillion in cuts tricky."It just doesn't work, unless you decide to start cutting Social Security benefits or Medicare, at which point all hell breaks loose," she told BI. "And you know, the bromance between Trump and Musk will end very quickly."Known for <a target="_blank" href="https://www.businessinsider.com/elon-musk-efficiency-companies-tesla-spacex-x-2024-11">streamlining efficiency at his companies</a>, Musk says he wants to cut bureaucracy, shrink the federal workforce, and trim the number of federal agencies down to no more than 99 (there are currently <a target="_blank" href="https://www.federalregister.gov/agencies">more than 440</a>).Douglas Holtz-Eakin, the former director of the Congressional Budget Office, told BI that he doubted that the loosely defined group would be able to accomplish much given its sprawling $2 trillion target."It is hard for me to get seriously ginned up about it until there's a real structure there that suggests that this makes some sense and has a purpose," he said. "If something is designed to do everything, it will do nothing."<h2 id="6bcaf431-1be5-4839-9b83-d0f24a7146cf">The DOGE will exist "outside of government."</h2>In one scenario, the DOGE could function as an advisory committee, which Trump can create through an executive order. The president-elect said the DOGE will work with the Office of Management and Budget, which prepares the president's budget request for Congress."They have made clear that this is a non-governmental department, which is not a familiar term, and so it's not really clear how the organization will operate because of that," Lisa Gilbert, co-president of the progressive nonprofit advocacy group Public Citizen, told BI. "It might be an advisory committee of non-governmental actors, but even from that posture, it won't have the authority to alter budgets or fire employees or rescind regulations."<div type="image" title="Donald Trump and Elon Musk" height="1910" width="2707" msid="115360796" hostid="261" sizebytes="118134"></div>Kamarck said that there are specific rules laying out how much interaction external committees can have with the government, but it's not clear how Trump, Musk, and Ramaswamy envision the <a target="_blank" href="https://www.businessinsider.com/elon-musk-doge-hiring-staff-how-to-apply-2024-11">internal infrastructure of the DOGE</a>."How are they going to talk to each other? How are they going to meet with each other? Are they going to go talk to anybody in the government, or are they just going to make up things from 50 miles away?" she said.On November 14, the DOGE <a target="_blank" href="https://x.com/DOGE/status/1857076831104434289">said in a post on X</a> that it is seeking "super high-IQ small-government revolutionaries willing to work 80+ per week on unglamorous cost-cutting." Musk said on his <a target="_blank" href="https://x.com/elonmusk/status/1857112441529700671">personal X account</a> that the positions will not be paid.<h2 id="4c25da3e-39de-44e2-a1c5-c7249f9fc728">Trump has talked about changing a key law that limits his federal spending power.</h2>Trump, Musk, and Ramaswamy may try to circumvent the congressional obstacles standing in the way of their cost-cutting agenda. Last year, Trump expressed interest in going after the Impoundment Control Act, a 1974 provision that requires the president spend funds that Congress has appropriated."Bringing back Impoundment will give us a crucial tool with which to obliterate the Deep State, Drain the Swamp, and starve the Warmongers," the president-elect <a target="_blank" href="https://www.donaldjtrump.com/agenda47/agenda47-using-impoundment-to-cut-waste-stop-inflation-and-crush-the-deep-state">said in a video</a> in June 2023.Holtz-Eakin said attempting to skirt the impoundment act would be like rewriting history, and Kamarck told BI that any attempt to not spend money that Congress has appropriated poses big Constitutional questions."If he tries to change the law so that he can impound funds, my guess is there'll be a fight in the Congress and he'll lose," she said.<h2 id="4956dc95-91da-4028-b1b3-d843a1509397">Musk could bump up against many conflicts of interest but likely wouldn't have to divest from his companies.</h2>If the DOGE is a federal advisory committee, Musk and Ramaswamy would likely be "special government employees," who are experts or consultants that can work for a federal agency or the White House for up to 130 days. They do not get paid and, crucially, would not have to divest from their companies."They've been clear also that they're staying in their roles as the heads of companies and in other places," Gilbert said. "Not being a part of government means they don't have to deconflict themselves."In a press release for Public Citizen, Gilbert said that Musk's "own businesses have regularly run afoul of the very rules he will be in position to attack" as the DOGE co-lead.<div type="image" title="Donald Trump and Vivek Ramaswamy" height="5504" width="8256" msid="115360795" hostid="261" sizebytes="4296554"></div>In the role, Musk and Ramaswamy would still be bound to federal ethics laws and have to recuse themselves from conversations that affect them personally, <a target="_blank" href="https://www.bloomberg.com/news/articles/2024-11-14/doge-what-can-musk-do-with-the-department-of-government-efficiency?srnd=homepage-americas">Bloomberg</a> reported. With his companies under investigation from at least 20 federal regulatory agencies and SpaceX having more than $15 billion in federal contracts, Musk could face many such conflicts.Kamarck said that there's no "firm line" about when employees need to take themselves out of discussions, but that lawyers address questions on a case-by-case basis.Musk has expressed public frustration with what he views as overbearing federal oversight, which he said has <a target="_blank" href="https://www.nytimes.com/2024/11/12/us/politics/elon-musk-vivek-ramaswamy-trump.html">slowed down his pace of business</a>.By law, meetings of advisory committees, like the kind the DOGE could be, need to be open, and Musk has no problem with the <a target="_blank" href="https://www.businessinsider.com/elon-musk-doge-leaderboard-federal-government-spending-trump-2024-11">transparency</a> — in fact, he seems to invite it. In a post on X, the billionaire promised to post all of the group's actions online <a target="_blank" href="https://www.businessinsider.com/elon-musk-leaderboard-government-spending-marketing-genius-doge-donald-trump-2024-11">"for maximum transparency</a>" and said the public should chime in with their opinions.It's also possible the group might intentionally avoid becoming a federal committee because of the increased oversight and scrutiny, Holtz-Eakin said."It's not a federal committee as far as I can tell," he said. "I think that's deliberate. If you do that, then you're subject to lots of things like a conflict of interest you have to sign off on, and I think that would be a nightmare for Mr. Musk. And so they're not going to let it tiptoe toward federal jurisdiction."Until Trump actually forms the DOGE, if he ever does, the legal and bureaucratic details remain murky, and the experts BI spoke with aren't convinced that it will work well."It sounds a little screwy, frankly," Kamarck said.

How Elon Musk's Department of Government Efficiency could actually work

<ul class="summary-list"><li>Russia will resume public sector layoffs, affecting up to at least 40,000 workers, per Kommersant.</li><li>Layoffs were paused due to COVID-19 and Russia's invasion of Ukraine.</li></ul>Russia is expected to lay off at least 40,000 government officials next year, according to a report by the Russian <a target="_blank" class="" href="https://www.kommersant.ru/doc/7296193?tg">Kommersant</a> newspaper.Russian President Vladimir Putin last month<a target="_blank" class="" href="http://publication.pravo.gov.ru/document/0001202410290050?index=1"> ordered regional branches of federal government agencies to cut staff by 10%</a> by July, per the publication.The layoffs were believed to be planned for much earlier but were put on hold for several years due to Russia's invasion of Ukraine and the COVID-19 pandemic.According to Kommersant, the cuts are designed to make the civil service more efficient and raise the salaries of existing staff.Russia's official wage statistics, published in January, showed wages in the private sector rose by 8% to 20% last year.The cuts would also allow more people to enter Russia's labor market which is experiencing a widespread shortage of workers amid Russia's invasion of Ukraine.According to an estimate from the Russian Academy of Science's Institute of Economics, Russia was short a record 5 million workers at the end of 2023.Workers have been <a target="_blank" href="https://www.businessinsider.com/russia-raises-mobilization-age-some-reservists-can-be-called-70-2023-7">pulled into the </a>Ukraine war or <a target="_blank" href="https://www.businessinsider.com/number-of-russians-fleeing-draft-bigger-1st-invasion-force-uk-2022-9">forced to flee</a> after Putin enacted a major mobilization to increase wartime recruitment.Russia has turned to <a target="_blank" href="https://www.businessinsider.com/russia-making-labor-crisis-worse-sending-workers-to-war-ukraine-2023-11">migrant</a> and <a target="_blank" href="https://www.businessinsider.com/russian-economy-worker-shortage-prison-labor-ukraine-war-putin-kremlin-2023-10">prison labor</a> to supplement its workforce, but those aren't sustainable solutions to its population problem, according to a <a target="_blank" href="https://www.businessinsider.com/russia-economy-population-decline-worker-shortage-growth-outlook-ukraine-war-2024-8">report</a> by Harley Balzer, a professor emeritus at Georgetown University.Last year, Russian Central Bank Governor Elvira Nabiullina warned that continued <a target="_blank" href="https://www.reuters.com/markets/europe/russias-depleted-workforce-threatening-economic-growth-says-central-bank-2023-11-09/">workforce depletion</a> would threaten Russian economic growth.However, so far, Russia's economy has <a target="_blank" href="https://www.businessinsider.com/russia-economy-outlook-defense-budget-spending-ukraine-war-putin-sanctions-2024-10">held up</a><a target="_blank" href="https://www.businessinsider.com/russia-economy-ukraine-war-moscow-military-spending-inflation-worker-shortage-2024-2"> partly because of its war spending</a>, which has boosted growth despite soaring <a target="_blank" href="https://www.businessinsider.com/russia-economy-outlook-stagflation-recession-inflation-gdp-growth-ukraine-war-2024-9">inflation</a> and <a target="_blank" href="https://www.businessinsider.com/russian-central-bank-raises-key-interest-rate-to-21-2024-10">high interest rates</a>.Inflation<a target="_blank" href="https://www.cbr.ru/eng/press/keypr/"> hit 9.8%</a> in September, and potatoes, which are a staple of Russian diets, saw a<a target="_blank" href="https://rosstat.gov.ru/storage/mediabank/172_08-11-2024.html"> 64% increase in price</a> this year.Russia is expected to spend <a target="_blank" href="https://www.businessinsider.com/russias-defense-sector-on-overdrive-but-firms-warn-of-collapse-2024-11">$140 billion on its defense industry in 2024</a> and up to $145 billion in 2025, or 6.3% of its GDP.

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