Global Skill Gap and Circular Migration: A Win-Win for India

Brain Drain and Remittances

India has long struggled with the outflow of skilled professionals, particularly doctors and engineers, to developed nations.
While remittances from these migrants contribute to the economy, they are often overshadowed by the loss of valuable human capital.

Migration as a Historical Force

Historically, human migration has played a pivotal role in shaping civilizations.
Europe’s colonization of the Americas and Australia, driven by economic opportunities, led to rapid development and the alleviation of poverty.
India, however, evolved differently, welcoming outsiders rather than expanding territorially.

Circular Migration: A Modern Solution

Today, the aging populations of Western countries present a unique opportunity for developing nations like India.
Circular migration, a system involving temporary work abroad followed by return to the home country, can address both global skill shortages and poverty.

Addressing the Skills Gap

India possesses a vast pool of skilled labor, but language barriers and cultural differences pose significant challenges.
Initiatives like the National Skill Development Corporation (NSDC) are working to bridge this gap by providing training and certification programs that align with global standards.

Benefits of Circular Migration

Skill Upgradation: Workers gain valuable experience and expertise abroad, which can benefit their home economies upon return.
Economic Growth: Remittances from migrants contribute to economic development and poverty reduction.
Enhanced Social Status: Migrants often return with higher social status and improved living standards.

Way Forward

India must actively pursue circular migration agreements with countries facing skill shortages.
By fostering a conducive environment for skilled workers, India can position itself as a global source of human capital and reap the benefits of this strategic approach.

Feeling the Heat: Temperature Matters More Than Rain for Inflation

Temperature and Food Inflation:

Rising average temperatures and temperature volatility are impacting food inflation.
Crop yields are decreasing due to heat stress.
Heatwaves damage crops, leading to higher prices for vegetables, dairy, poultry, and fishery products.

Correlation Between Temperature and Food Prices:

Perishable crops are more sensitive to heatwaves.
Correlation between temperature and perishable prices has increased significantly.
Durable crops, traditionally less sensitive, are becoming more vulnerable to heat.

Other Factors Affecting Food Prices:

Government interventions, such as buying/selling from granaries, imports/exports, and clamping down on hoarders, influence food prices.
Rains and water reservoir levels also play a role.

HSBC’s Model and Findings:

HSBC’s model predicts food inflation accurately.
Temperature is a stronger predictor than rainfall.
Improved irrigation and a strong correlation between reservoir levels and temperature contribute to temperature’s dominance.

Predicting Food Inflation:

La Niña weather phenomenon may lead to lower temperatures and stronger precipitation.
Cooling temperatures could reduce food inflation.
RBI may start easing rates due to decreasing inflation.

Way Forward:

Rising temperatures pose a significant challenge to inflation management.
Improved irrigation can mitigate the impact of weak rains, but addressing rising temperatures requires long-term solutions.