💰️ Pay your taxes

PLUS: Indian graduates can’t find jobs

Author

Ruchirr Sharma
May 02, 2024

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Good morning. The fear of long words is called Hippopotomonstrosesquippedaliophobia.

Ironic doesn’t cover it.

The 36-letter word was first used by the Roman poet Horace in the first century BCE to criticise those writers with an unreasonable penchant for long words. It was American poet Aimee Nezheukumatathil, possibly afraid of their own surname, who coined the term how we know it in 2000.

But fear not, we at Up n' Running have Hippopotomonstrosesquippedaliophobia and therefore won't use words of more than four syllables.

If you find any, let us know!

- Ruchrngd Sharma & Shatakshi Sharma

📊 Markets

🇮🇳 India

🌍️ International

  • The Federal Reserve kept interest rates steady but signaled likely future rate cuts, though continued progress on lowering inflation is uncertain. Fed Chair Powell noted the labour market is normalising with job openings falling. The S&P 500 and Nasdaq ended lower while the Dow rose modestly after Powell's comments, with individual stocks like AMD, Amazon, Starbucks, and CVS seeing big moves on earnings/forecasts.

Source: Blume VC

India has a tax problem. 

Out of India's population of 1.42 billion, only 74 million are tax filers (~ 5%), and just 22 million are taxpayers (~ 1.5% of Indians). The majority of taxes are contributed by 4.5 million Indians.

This means that 0.3% of Indians contribute to 80% of the country's income tax collection. This is problematic because low tax collections result in increased borrowing by the Indian government.

Over the past decade, government debt has tripled, accounting for 82% of our GDP. 

So India needs a fix here. 

The good thing is that this time around, India's Goods and Services Tax (GST) collections hit an all-time high of INR 2.10 lakh crore in April 2024, registering a remarkable 12.4% year-on-year growth. 

Numbers: 

  • The Central GST collection stood at INR 43,846 crore, State GST at INR 53,538 crore, and Integrated GST at INR 99,623 crore, including INR 37,826 crore from imported goods. 

  • The total cess collection amounted to INR 13,260 crore.

  • After accounting for refunds, the net GST revenue for April 2024 stood at INR 1.92 lakh crore, marking a 15.5% growth compared to the same period last year. 

Biggest contributors to this increase? This achievement is attributed to the strong economic momentum, increased domestic transactions (up 13.4%), and a rise in imports (up 8.3%).

Looking ahead: The record collections have raised expectations for the next wave of GST reforms. This consistent buoyancy in GST collections has set the stage for pursuing forward-thinking reforms under GST 2.0, potentially including rate rationalisation and bringing new products under the GST ambit.

But something still needs to be done about the country's lack of income taxpayers. Comprehensive measures, including advantageous policy incentives, simplified compliance processes, and nationwide taxpayer awareness campaigns, are imperative to broadening the income tax base. 

Unlocking India's economic potential and achieving fiscal sustainability requires more even tax distribution and reducing borrowing reliance. The recent GST increase provides an opportunity for this essential direct tax overhaul.

Read more: Times of India

IITs/IIMs have always been a guaranteed pathway to a successful future in corporate India - or at least they were. 

Turns out that kids today have a decent excuse to deny their parents their IIT/IIM dreams.

Over the past several months, IIT/IIM graduates have been peppered with headlines that look like this:

  • In India, young graduates struggle to get jobs.

  • High-paying IIT jobs a myth? Top grads settle for as low as Rs 6 lakh as placements dry up.

  • IIT graduates are landing salary packages below Rs 10 lakh this year.

Yikes… So what's really happening?

  • IIT Bombay has a 36% graduate unemployment rate, following IIM Lucknow and BITS Pilani who sought alumni assistance for placements.

  • The India Employment Report reveals that 29% of graduates are unemployed.

  • At the end of the placement season, some students are accepting annual packages below INR 10 lakh, far below the national average of INR 20-50 lakh. 

  • Organisations that would usually hire 4-6 students are now only selecting 1-2.

These hiring challenges have resulted in a decrease in the Labour Force Participation Rate (LFPR) among the youth, falling from 54% in 2000 to 42% in 2022.

Despite the difficult situation, there are some positives:

  • IITians' Pace, a tutorial service for entrance exams, has offered 25 students an annual package of INR 12 lakh.

  • At IIT Delhi, companies like Bharat Petroleum Corp. Ltd and HCL Software have offered packages ranging from INR 19.5 lakh to INR 21.9 lakh.

Overall: The economic downturn has significantly reduced the attractive job prospects that IIT/IIM graduates usually have, compelling them to adjust their expectations and consider different career paths.

🗞️ Bite-sized summaries

Source: DIW

📉 U.S. H-1B numbers have taken a hit - The number of eligible H-1B lottery registrations for the 2025 fiscal year in the United States declined by 38% to 470,000 compared to 759,000 the previous year. This significant drop does not reflect the reduced interest in H-1B visas but results from a new "beneficiary-centric" registration system implemented to prevent misuse through multiple entries by employers working together. The new process ensured each beneficiary was entered into the lottery only once based on their passport number, giving everyone an equal chance regardless of employer registrations. While total employer registrations remained steady at around 52,700, the number of beneficiaries with multiple registrations plummeted from 408,000 to just 47,314. US authorities attribute the decline to the success of the beneficiary-centric process in curbing abuse and state they will investigate any attempts to circumvent it.

🧑‍⚖️ Google receives an unlawful termination suit - A group of former Google employees have filed a complaint with the U.S. National Labour Relations Board, accusing the tech giant of unlawfully terminating around 50 workers for protesting Google's $1.2 billion cloud computing contract with the Israeli government, known as Project Nimbus. The workers claim they were fired for advocating better working conditions by opposing the contract, which they argue supports Israel's development of military tools, though Google denies this. The complaint alleges Google interfered with the employees' rights under U.S. labour law and seeks their reinstatement with back pay, as well as a statement from Google affirming workers' rights to organise. A former employee arrested during the Nimbus protests accused Google of trying to instill fear and suppress dissent through the terminations.

🍟 Fast food sales are falling, but it’s not because of what you think - Major restaurant chains like Starbucks, Pizza Hut, and KFC reported surprising declines in same-store sales this quarter, signaling the long-predicted consumer pullback has finally hit the restaurant industry. While some chains cited weather or tough comparisons as reasons, the overarching issue appears to be increased competition for a shrinking pool of cost-conscious diners who are trading down amid higher prices and interest rates. Fast food prices have risen faster than grocery costs, prompting customers to become pickier with their spending. However, outliers like Wingstop and Chipotle showed customers will still pay for their favourite indulgences. In response, McDonald's plans a new nationwide value menu, while Starbucks will offer deals through an upgraded app, as chains adopt a "street-fighting mentality" to retain value-minded customers.

🧑‍🍳 What else is cookin’?

What’s happening in India (and around the world 🌍️)

🍿 Entertainment, Entertainment, Entertainment

And that’s all for today folks - have a lovely day and we’ll meet again tomorrow.