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The attention the archipelago is receiving must be leveraged through strategic marketing campaigns, both by government and private stakeholders.

Lakshadweep, a uni-district and the smallest Union Territory of India, is getting attention like never before after Prime Minister Narendra Modi posted pictures of his “exhilarating experience” during his visit to the UT, early this month. In a matter of four days, there has been a jaw-dropping rise of 3400% in Lakshadweep searches on travel sites; “Lakshadweep” became the 10th most searched word on Google in India; and the worldwide search for Lakshadweep was the highest in the last 20 years.

What else do we know about Lakshadweep? Formed in 1956, Lakshadweep, meaning a hundred thousand islands, is an archipelago of 36 islands, of which only 10 are inhabited with a population of about 64,473 as per the 2011 census. Despite a very small population, the region showcases a harmonious coexistence of diverse customs and practices. Malayali Muslims form the majority, contributing to the cultural mosaic with their language, cuisine, and religious traditions.

Little can be stated about its economy. No official Gross State Domestic Product (GSDP) statements are available for the island. It might be contributing a small fraction to the country’s GDP. But what is known is that its economy revolves around fisheries, coconut cultivation, and tourism, thanks to the archipelago’s pristine coral reefs, clear blue waters, and tranquil landscapes. The local administration has been making efforts to promote sustainable tourism, striking a balance between economic development and environmental conservation.

So far, both domestic and international tourist arrivals to Lakshadweep, as per the ministry of tourism’s India Tourism Statistics, have been extremely meagre. The UT hosts just about 10,000 domestic and less than a thousand international tourists each year. Despite this, tourism is a significant contributor to the UT’s economy. According to a report by the National Council of Applied Economic Research (NCAER) on Lakshadweep’s Tourism Satellite Account, which estimated tourism economy in terms of both GDP and employment, tourism contributed 4.3% to the UT’s GDP and a sizeable 22% to its employment in 2015-16. This is much above the national average of 2.8% and 5.4% , respectively for the same year. Any escalation in the number of tourists to the UT can give a significant boost to not just its tourism economy but also to its overall economy, not to mention the strong multiplier effect of tourism.

The recent spat with Maldives has already served as a catalyst to increasing its visibility and promoting it as a sought-after tourist destination. The media coverage and publicity surrounding the PM’s trip would naturally generate widespread interest and curiosity among the general public. This heightened attention should be leveraged through strategic marketing campaigns, both by the government and private tourism stakeholders.

The need of the hour is to focus on the supply side of tourism in order to meet the growing tourism demand. The supply side refers to the tourism-supplying industries like accommodation, transportation, restaurants, recreation, culture, and more.  Lakshadweep needs to be developed as a tourist destination. This very much falls in line with the government’s agenda to develop 50 new tourism destinations across the country, with a focus on green tourism.

Destination development with strategic planning must be the  focus to improve or augment the supply -side of tourism when the demand side is expected to flourish. Such planning is expected to provide compelling experiences, quality infrastructure, and remarkable services to entice repeat visitation by the tourists.

Beyond the current lodging and hotel options, the Tata Group has recently declared its intention to establish two luxurious resorts by 2026 on the islands of Suheli and Kadmat in Lakshadweep. These forthcoming Taj resorts are poised to become world-class destinations, catering to both international and national tourists.

Regarding its comparison with Maldives, Lakshadweep may turn out to be a preferred destination for more reasons than have been highlighted in social media. Its geographical proximity to the Indian subcontinent, merely 500 km away from the southwestern coast, makes it easily accessible and potentially cost-effective destination. It offers a unique, less explored, and offbeat experience. With thoughtful planning, sustainable practices, and the allure of untouched beauty, Lakshadweep has the potential to emerge not only as a sought-after tourist destination but also as a beacon of responsible tourism, balancing growth with environmental conservation.

Poonam Munjal & Palash Baruah, respectively, professor and associate fellow, National Council of Applied Economic Research (NCAER). Views are personal.

If universities are to remain home to creativity, they must embrace both radical thinking and scepticism toward received wisdom. This is important not just for humanities and social science but also for science and engineering.

In recent weeks, two American university presidents, Claudine Gay from Harvard and Liz Magill from the University of Pennsylvania, resigned from their positions after evasive responses during a testimony at a Congressional hearing on anti-Semitism on campuses following the October 7 attack by Hamas in Israel. President Magill from the University of Pennsylvania explicitly condemned anti-Semitism as well as Islamophobia, but still, she came under fire for refusing to relieve a professor who led chants for intifada, revolution, that has come to characterise calls for violent protests by Palestinians against the Jewish state. President Gay from Harvard, also under fire, resigned voluntarily to protect the institution from further controversy.

This incident provides an intriguing insight into the culture wars of 21st century America while offering a cautionary tale for other nations seeking civil discourse about difficult issues. Freedom of expression is enshrined in the American Constitution and is often taken to an extreme where the individual right to carry guns or to burn the American flag is hotly defended. Nonetheless, as this incident shows, this freedom is under considerable threat, a threat that is not limited to the present controversy.

In the cases of Harvard and Pennsylvania, this threat came under the guise of creating a safe space for Jewish students, accompanied by the financial clout of donors and alums. But it is not simply the power of donors that has generated such a powerful backlash. We also see a similar desire to avoid controversy and protect the sensibilities of diverse communities in other cases.

For example, the dismissal of Professor Erika López Prater from Hamline University for actions deemed Islamophobic. Her crime? She showed an image of a 14th century painting depicting Prophet Mohammad in a course in global art history. A student in her class complained that the pictorial depiction of the Prophet was against religious diktats, and it made him feel disrespected. The administration took the side of the student, and the New York Times reported Hamline’s president, Fayneese S Miller, as having sent an email that said respect for the Muslim students “should have superseded academic freedom.”

Moderating or censoring speech to what in India we term “respecting the sentiments” of some communities is often classified in the US as protecting vulnerable groups from microaggression. In most settings, power still rests in the hands of white men, creating a hostile environment for women and racial or gender minorities. Efforts at identifying behaviours that construe aggression in day-today interactions, often termed microaggression, have gained currency. Redressal usually involves instituting diversity programmes in universities and large businesses. Fareed Zakaria, in a perceptive article, argues that the growth of this DEI (diversity, equity and inclusion) bureaucracy has given rise to a culture of virtue signaling and fed demands from Jewish students for protection from hurtful speech, as other groups have demanded in the past.

And yet, the road to hell is often paved with the best intentions, and diversity initiatives do not always increase diversity. A fascinating study of large businesses by Harvard Sociology Professor Frank Dobbin, published in Harvard Business Review, finds that mandatory diversity training for managers has reduced rather than increased diversity. Blaming and shaming led to the hardening of biases, and diversity training was associated with a reduction in black women managers as well as Asian managers. Moreover, attempts at enhancing comfort and silencing strident debate come at a price.

Modern universities — in the United States and globally — are buffeted by two competing forces. On the one hand, there is a recognition that existing inequalities can create a hostile environment for some students. On the other hand, trying to protect against it can diminish spaces for dissent and debate in institutions designed to foster creativity. Struggling to find a balance between the two, a report of the Committee on Freedom of Expression by the University of Chicago quotes its President Hanna Gray, “Education should not be intended to make people comfortable, it is meant to make them think.”

If universities are to remain home to creativity, they must embrace both radical thinking and scepticism toward received wisdom. This is important not just for humanities and social science but also for science and engineering. Arguably, the most visible example is periodic attempts by various US state legislatures to restrict the teaching of evolution in schools since it is inconsistent with the Christian conception of how the universe was created.

Radical thinking and scepticism towards received wisdom are not readily embraced. They imply not simply accepting ideas we like but also being open to ideas that are not consistent with our other beliefs and social norms or may be hurtful to some segment of our society, whether they are about the right of the state of Israel to displace Palestinians, caste-based reservation or scientific discoveries. Temples of education are not places where ideological battles should be fought. As Claudine Gay notes in an essay in The New York Times, “At tense moments, every one of us must be more sceptical than ever of the loudest and most extreme voices in our culture, however well organised or well connected they might be.”

The writer is a Professor at the University of Maryland and the National Council of Applied Economic Research. Views are personal.

Facing unprecedented socio-economic challenges, the financial system must act decisively to preserve its vital economic role.

2024 will be a make-or-break year for the financial sector. It will rise to the challenge of a changing world or fall into irrelevance and chronic stress. The fate of finance and the global economy hangs in the balance.

The world faces a perfect storm of threats: inflation, policy shifts, war and socio-economic shocks. The financial sector is vital in navigating these dangers by allocating resources wisely, managing risk effectively and creating wealth for future generations.

But the old ways will not work anymore. The financial sector cannot afford to remain reactive or dependent. It must decide what transformations are essential to stay relevant to the needs of the hour. It must rethink its role and purpose in a market economy. Retroactively picking up the pieces after every period of stress or economic crisis and expecting central banks to save the day is no longer tenable.

Today’s financial sector is complex and plagued by structural flaws and unfinished reforms. The interactions between the financial sector and the broader economy are more direct and robust. To this end, financial sectors in both advanced and developing countries need support to stay resilient. All the while, the International Monetary Fund warns of higher interest rates and spillovers from other sectors that could amplify the sources of financial stability and bring out the risks endogenous to the financial sector.

The balance sheets of governments, corporations and households are weak. Assets are overvalued or underutilised, while liabilities outstrip income. The global credit cycle is unstable, as borrowers struggle to repay and financing dries up. These imbalances threaten financial stability, credit and funding patterns and economic growth.

In developing markets, stability of the financial system has been elusive and inconsistent. As a result, balance sheets reflect the long-lasting consequences of distorted capital allocation and inefficiency. The availability and allocation of finance and credit essential for long-term economic growth, climate resilience and sustainable development goals are also inadequate.

The financial sector’s choices during 2024 will decide the future of finance and the global economy. How prepared will the financial system be and what will it choose?

Transitions

The financial sector will navigate the complex interplay of transitions likely to unfold during 2024 and the lingering macro-financial risks from the Covid-19 pandemic. Market movements could be higher, and risk aversion even tighter. 2024 might be a year when financial agents prefer to watch rather than assume risk. Most financial resources may remain within the system or move across select asset classes, such as real estate, instead of being aggressively used on the needed scale for productive purposes. The transitions during 2024 will have their own respective drivers, dynamics and relationship with financial stability.

The final phase of post-pandemic financial normalisation still needs to be completed. It requires unwinding the remaining policy support, addressing the debt burden and developing more straightforward approaches to credit cycles and asset pricing.

Technological turbulence is another transition. It will involve accelerated developments in artificial intelligence, cloud computing, blockchain and biometrics, which will continue transforming the financial system, blurring the industry boundaries and changing the regulation and governance requirements.

Financial sectors are more interconnected across borders than ever before. However, this may change in a more fragmented and regionalised global finance and trade environment. The finalisation of the pending UK-EU agreement on financial services after Brexit will have regional and broader impacts on how much access, alignment, competition and cooperation there are between different markets and their central banks and regulators.

Limitations

The environment of these transitions limits the financial system’s ability and will to act in 2024. Political factors and industry interests restrict the space for preemptive and macro-prudential policies and the coordination among authorities and stakeholders. The international standard-setting and evaluation work has stalled, as the global financial governance and architecture are polarised and incomplete and the existing rules and standards could be enforced unevenly and inconsistently.

Central banks and regulators face growing challenges from their legislatures demanding more accountability. In addition to this, public mistrust in finance is evident and the view that regulators can be influenced by the industries they regulate at the public’s expense is widely held across advanced and developing countries.

Opportunities

Despite these limitations, the financial sector can be part of the solution in 2024. Climate change and sustainability will demand new production and consumption patterns. The financial industry will finance and facilitate this transition, manage climate-related risks and align with the 2030 Agenda for Sustainable Development.

Technological innovation and disruption will create new values and advantages, bring new players and change financial behaviour and norms. The financial sector will face technological risks of data privacy, cybersecurity and ethics. It must adapt to improve the financial system’s efficiency, inclusiveness and security.

Inclusion and diversity will require meeting all stakeholders’ various needs and preferences while ensuring the quality and affordability of financial services and access for the underserved and underrepresented segments.

External factors

Other external forces besides climate change will shape these transitions. Social and political change across countries will affect the financial system. These shifts include changes in power, alliances and institutions related to money and finance. Migration and urban shifts will move people across and within countries and change the urban and rural dynamics.

These will change the financial preferences of the population and alter the demand for and supply of financial services. The financial system must then respond and distribute the costs, benefits, rights and responsibilities among different groups and regions without harming social stability and cohesion.

These transitions and external forces show the macroeconomic role of the financial sector and the close macro-financial interactions. The financial industry will play a more significant role in capital, liquidity and risk management related to climate change, technological innovation and reducing frictions, costs and barriers to financial transactions and services.

Competition and cooperation among the financial actors and institutions – old and new, incumbents and disruptors, public and private – will affect the financial sector’s market structure and outcomes. The demand for new forms of financial intermediation will create new values and advantages and new issues and dilemmas, such as data privacy, cybersecurity and ethics. Alignment and integration with global goals and international standards will require coordination and cooperation among the authorities and stakeholders at the regional and international levels.

These must meet the needs of the changing national and local situations and circumstances. Implementing frameworks such as the IMF’s integrated policy framework and the Bank for International Settlements’ comprehensive and coordinated policy response will address the structural challenges and opportunities of the financial system.

2024 stands to be a pivotal year for the global financial system in advanced and developing economies. The transitions and external forces will have profound and lasting implications for the financial sector, the economy and society. 2024 will be decisive for the financial industry and its stakeholders to prove their worth and align with the common good.

Udaibir Das is a Visiting Professor at the National Council of Applied Economic Research, a Senior Non-Resident Adviser at the Bank of England, a Senior Adviser of the International Forum for Sovereign Wealth Funds, and a Distinguished Fellow at the Observer Research Foundation America.

Despite targeted Skill India government initiatives strive to boost female participation, societal pressures and caregiving responsibilities stand out as formidable barriers. The PLFS 2022-23 furnishes valuable insights into female workforce participation, underscoring how family dynamics shape caregiving responsibilities and impact women’s career trajectories. Given the magnitude of the need, there is an urgent call to expand the coverage and accessibility of caregiving centres.

Within Skill India government programs, women receive special attention, given their historically low participation in the workforce. Despite this emphasis, current figures reveal a persistently low rate of female work participation, even among those with acquired skills. According to the latest PLFS data (2022-23), only 14.7 percent of female youth possess vocational training, with a meagre 4.2 percent from formal sources and 10.5 percent from informal ones.

Clearly, these statistics are not convincing, emphasizing the need for the country to intensify efforts in meeting the growing demand for skills and staying competitive globally.

Moreover, the issue intensifies when even vocationally trained females choose not to join the workforce, leading to a significant underutilization of the nation’s resources. According to the PLFS 2022-23 data, only approximately 37 percent of female youths (excluding those currently in education) who received formal training are part of the labour force.

Among several factors influencing women’s decisions to leave their jobs or refrain from joining the workforce, research indicates that caregiving responsibilities for their children and elders within the family significantly shape Indian women’s employment choices. Delving deeper into family structures and female work status sheds light on this relationship.

The data from the Periodic Labour Force Survey (PLFS) for 2022-23 allows us to quantify this connection and reveals that about 45 percent female youths (excluding females currently in education), who have received formal vocational training are found to be working in nuclear family setups. In contrast, joint families exhibit lower female participation in the economy, with about 32 percent of females working in such setups.

Further analysis within nuclear families indicates an increase in the work status of female youths without children, with about 56 and 43 percent of them in nuclear families with and without children found to be working.

This suggests that the absence or minimal burden of caregiving responsibilities, coupled with limited interference from family elders (other than parents) in decision-making, likely contributes to higher participation in nuclear families.

Family structures, be it nuclear or joint, are shaped by a complex interplay of cultural, social, economic, and personal factors, often beyond the control of individuals or government interventions. Nonetheless, fostering a supportive environment can play a crucial role in minimizing the impact of family structures on female participation. Affordable and quality childcare centres can be potential solutions to address these challenges.

India has witnessed progressive legislation aimed at improving female participation in the workforce. The National Creche Scheme, later revised as Palna in 2022, provides day-care facilities for children (6 months to 6 years) of working mothers.

Another noteworthy initiative is the 2017 amendment to the Maternity Benefit Act, encouraging establishments with fifty or more employees to allow work-from-home options for women. It also mandates companies with more than 50 employees to offer a creche on-premises, with costs borne by the employers.

While these government initiatives are commendable, several factors have limited their impact on overall female labour force participation. The number of creches under the scheme has declined over the years, and budget allocations have shrunk.

Additionally, the scheme predominantly caters to the economically disadvantaged section of society. Companies eligible to offer creche facilities under the Maternity Benefit Act of 2017 frequently fall short in providing these amenities on their premises, and the lack of official data on compliance further complicates the assessment of their effectiveness.

Despite childcare remains a major constraint, India’s rapidly aging population adds another layer of caregiving responsibility often assigned to women. While a predominantly young country, India boasts the second-largest aged population globally.

According to the UN Population Fund’s India Ageing Report 2023, there are 149 million people above the age of 60, comprising around 10.5% of the country’s population. With increasing life expectancy, this number is expected to double by 2050. Women, traditionally responsible for caring for senior household members, face challenges balancing work and elder care responsibilities.

Yet, not all seniors need caregiving; some actively support the younger generation by engaging in family caregiving responsibilities instead of being recipients. However, as they reach a certain age, they too require special care, and conventionally, the responsibility of providing that care is often assigned to women.

Government initiatives like the Atal Vayo Abhyuday Yojana (AVYAY) aim to support senior citizens. However, considering the increasing demand and to address the specific needs of day care centres, these initiatives must focus and broaden their coverage and raise awareness.

Women, irrespective of economic or social backgrounds, bear the weight of caregiving responsibilities. Government welfare programs addressing such needs should broaden their coverage to encompass all sections of society rather than focusing solely on the marginalized. However, the solution lies not just in government action, but in collective effort.

Companies in India grappling with skilled talent shortages can expand the pool of skilled resources by encouraging more women to join the workforce. Investing in childcare and elder care centres not only aligns with societal needs but also contributes to economic growth. By strategically utilizing Corporate Social Responsibility (CSR) funds to support these initiatives, companies can make meaningful contributions to society and the economy. It’s a win-win situation that supports families, fosters workforce participation, and drives sustainable development.

Asrar Alam, Associate fellow, National Council of Applied Economic Research (NCAER). Views are personal.

Unlocking the full potential of AI, ushering in an era where technology and agriculture converge.

In the dynamic landscape of agricultural development, rural progress undergoes a significant metamorphosis with the infusion of technology, contributing to a structural transformation that reverberates across rural communities.

Despite agriculture’s historical resistance to digital integration, the sector is experiencing a paradigm shift marked by the burgeoning development and commercialization of agricultural technologies. This evolution, albeit fraught with challenges, holds a promising trajectory as artificial intelligence (AI) emerges as a linchpin in the quest for optimal agricultural productivity and sustainability.

The COVID-19 pandemic, acting as a catalyst, spurred the integration of AI into agriculture, urgently demanding innovative solutions to surmount challenges and safeguard food security. From predictive and monitoring tools for droughts to robot-assisted methodologies addressing skilled manpower shortages, AI is a versatile ally in navigating the complexities of the agricultural landscape.

More than 87% agricultural holdings in India belong to smallholders (<2 ha). The small size of landholdings, giving rise to inefficient farming practices and restricting economies of scale, poses a formidable obstacle for farmers striving to embrace contemporary agricultural techniques. AI serves as a visionary partner to farmers, foreseeing and predicting agricultural yields with a precision that transcends traditional methods.

Further, crop diversification emerges as a viable solution to enhance resilience. A significant portion of agricultural land is dedicated to a few staple crops, contributing to soil health issues and increased susceptibility to pests and diseases.The predictive prowess of AI becomes especially evident in its capacity to anticipate crop health, identify nutritional deficits, and pinpoint pest incidences through the meticulous analysis of high-resolution images.

This, in turn, facilitates a level of accuracy in resource allocation and management. The fusion of AI with Global Positioning System (GPS) technology ensures the exact positioning of seeds, fostering consistent crop growth, optimizing nutrient utilization, and mitigating wastage appreciably.

Sustainability issues in the current arena are gaining momemtun. Several regions in India grapple with water scarcity, aggravated by inadequate water management. The challenge is compounded by inefficient irrigation methods and the excessive exploitation of groundwater.

The advent of AI-powered irrigation systems further underscores their efficacy, demonstrating promising outcomes in the realm of water conservation. Real-time data, coupled with weather predictions, becomes the guiding force behind AI-powered irrigation systems. These systems organize optimal watering schedules, that not only decrease water wastage but also usher in an era of efficient water consumption.

Furthermore, AI steps in as a vigilant tool, detecting early signs of diseases and insect infestations. The use of AI extends beneath the surface as well, as it continually monitors soil health. This empowers farmers to implement targeted soil management practices, enriching fertility and paving the way for long-term sustainability in agriculture.

The incidence of extreme events are increasing. Irregular weather patterns induced by climate change adversely affect crop yields, leading to increased occurrences of droughts, floods, and extreme weather events. Farmers often lack the resources to cope with these changes.

AI’s prowess is established in navigating the complex terrain of climate-related datasets, elevating the precision of climate predictions and providing profound insights into the future ramifications of climate change. This capacity proves pivotal in enhancing the accuracy of climate predictions, offering a clearer understanding of the impending impacts of climate change.

The volatile nature of agricultural input costs and the uncertainty surrounding crop prices expose farmers to significant financial risks, thereby deterring them from making crucial investments in modern technologies. This precarious situation further contributes to the absence of a stable income for farmers.

The dearth of rural infrastructure, spanning essential components such as roads, storage facilities, and market linkages, amplifies the challenges faced by the agricultural sector. Post-harvest losses are exacerbated, and the smooth movement of agricultural produce is impeded, adversely affecting the overall efficiency of the farming ecosystem.

The absence of transparent mechanisms for price discovery exacerbates the predicament, as farmers often find themselves at a disadvantage when negotiating the remuneration for their produce.

The literature unfolds the extraordinary potential of AI in reshaping the intricate web of agricultural supply networks. Equipped with real-time information, predictive analytics, and the robust foundation of blockchain technology, AI enhances efficiency throughout the supply chain.

It increases production, minimizes losses, and assures a level of operational efficiency that propels agriculture into a new era of productivity.

Logistics, a critical artery of the supply network, undergoes a metamorphosis under the influence of AI. The technology dissects numerous elements – transit routes, storage conditions, and demand patterns – with a precision that surpasses human capacity.

AI also delves into market patterns and historical pricing data, offering insights on futuristic agricultural commodity prices.

This foresight sensitizes the farmers and stakeholders, empowering them to make educated choices in a dynamic market landscape. Through nuanced analysis, AI categorizes products based on parameters such as size and ripeness, introducing a level of precision that enhances supply chain efficiency.

The transformative potential of AI in the realm of agricultural exports unfolds as a narrative of unprecedented growth, efficiency, and transparency. The integration of AI with radio-frequency identification (RFID) and blockchain technology transforms the export supply chain into a transparent and accountable ecosystem.

Nevertheless, for AI to transform the agricultural sector, government agencies and commercial enterprises might need to take a more active role in the transition. Such aspirations are especially important to ensure that the government and societal demand for reduced emissions and increased sustainability is met in the technological shift.

For the transformation to be successful, farmers must have continuous and easy ways to acquire up-to-date knowledge of how to apply smart technologies. Therefore, ensuring that technical, agricultural education is easily accessible through for example flexible, on-demand courses are needed.

Additionally, smart farming techniques need to be modifiable to match the varying transparency and adaptability demands that different farmers have. In the Transition of the agricultural sector into a more data-driven and digital environment, the technical infrastructure needs to be secure.

This narrative suggests a vision for collaborative efforts between institutions of eminence, like ICAR, IITs, Policy Think Tanks, and other institutions of excellence pooling resources and expertise to navigate the intricate landscape of AI implementation in agriculture.

This collaboration becomes a cornerstone for unlocking the full potential of AI, ushering in an era where technology and agriculture converge to shape a more efficient, transparent, and sustainable future for agricultural growth.

Dr Raka Saxena is Principal Scientist at National Institute of Agricultural Economics and Policy Research and Laxmi Joshi is Fellow at National Council of Applied Economic Research, NCAER. Views are personal