In News:

The Union Budget 2026 announcement of a ?20,000 crore carbon credit programme based on the Department of Science and Technology (DST) roadmap has triggered a debate over its scope and intent. The confusion stems from the overlapping use of the term carbon credits, blurring the distinction between industrial decarbonisation through Carbon Capture, Utilisation and Storage (CCUS) and agriculture-based carbon farming initiatives.

Understanding CCUS and Carbon Farming

CCUS: Industrial Decarbonisation Tool

Carbon Capture, Utilisation and Storage (CCUS) is a technology-driven approach aimed at reducing emissions from hard-to-abate sectors such as:

• Power and refineries
• Steel and cement
• Chemicals

It involves capturing carbon dioxide from concentrated emission sources, followed by its utilisation in industrial processes or permanent storage underground. CCUS is particularly relevant for sectors that cannot fully transition to renewable energy.

Carbon Farming: Nature-Based Solution

Carbon farming refers to agricultural practices that enhance carbon sequestration in soil and biomass, thereby removing carbon dioxide from the atmosphere. It includes:

• Agroforestry
• Biochar application
• Conservation agriculture

Unlike CCUS, carbon farming is part of Carbon Dioxide Removal (CDR) strategies and is linked to voluntary carbon markets, offering potential income streams for farmers.

Why Agriculture is Not Part of CCUS

The DST roadmap clearly excludes agriculture from CCUS due to fundamental differences:

• Diffuse Emissions: Agricultural emissions are spread across large areas, unlike concentrated industrial sources
• Biological Nature: Emissions such as methane and nitrous oxide are biologically generated and cannot be mechanically captured
• Technological Mismatch: CCUS captures CO? from flue gases, whereas agriculture focuses on absorbing atmospheric carbon
• Strategic Distinction: CCUS prevents new emissions, while carbon farming removes existing carbon

Key Opportunities

1. Industrial Decarbonisation: CCUS offers a crucial pathway to reduce emissions from sectors contributing significantly to India’s carbon footprint. The ?20,000 crore investment aims to scale up industrial carbon capture and storage infrastructure.

2. New Income Streams for Farmers: A robust carbon farming framework could enable farmers to earn through carbon credits by adopting sustainable practices, integrating climate action with rural development.

3. Soil Carbon Sequestration: India’s vast agricultural land holds immense potential to act as a carbon sink, improving soil fertility and long-term productivity.

4. Growth of Carbon Markets: There is increasing demand for nature-based carbon credits, with private sector initiatives already piloting farmer-linked carbon credit models.

5. Climate-Resilient Agriculture: Carbon-friendly practices align with broader goals of sustainable and climate-resilient farming systems.

Challenges and Concerns

1. Policy and Communication Gaps: The use of the term carbon credit in the Budget has created confusion between industrial and agricultural pathways, leading to misplaced expectations.

2. High Cost of CCUS: CCUS is capital-intensive and technology-heavy, requiring sustained investment and infrastructure development.

3. Monitoring and Verification Issues: Measuring soil carbon and agricultural emissions is complex, requiring robust verification mechanisms to ensure credibility in carbon markets.

4. Policy Conflation: Lack of clear distinction between emission reduction (CCUS) and carbon removal (carbon farming) has hindered policy clarity.

5. Stakeholder Expectations: Farmers may expect direct financial benefits from the announced programme, whereas the current allocation is primarily targeted at industry.

Way Forward

• Clear Policy Demarcation: Separate industrial CCUS initiatives from agricultural carbon farming policies
• Dedicated Framework for Carbon Farming: Develop targeted funding, institutions, and verification systems for agriculture-based carbon credits
• Strengthen Communication: Use precise terminology to avoid confusion between mitigation approaches
• Scale Industrial CCUS Deployment: Ensure effective implementation in hard-to-abate sectors
• Integrated Climate Strategy: Promote both industrial and nature-based solutions for a balanced pathway to net-zero

Conclusion

India’s carbon credit strategy stands at a critical juncture, balancing technology-driven industrial decarbonisation with the emerging promise of nature-based carbon farming. While the ?20,000 crore allocation is clearly aimed at CCUS, the growing interest in agricultural carbon markets highlights the need for a parallel, well-defined policy framework. A coherent and differentiated approach will be essential to achieving India’s climate goals while ensuring economic and social benefits.

In News:

A recent ISRO study published in NPJ Natural Hazards has highlighted that the August 2025 Dharali flash flood in Uttarakhand was triggered by the collapse of an exposed ice patch on the Srikanta Glacier. This finding marks a significant shift in the understanding of Himalayan disasters, as it moves attention away from large glacial lake outburst floods (GLOFs) toward smaller, often overlooked cryospheric instabilities caused by rapid deglaciation.

Understanding Glacier Melting (Deglaciation)

Glacier melting, or deglaciation, refers to the reduction in a glacier’s mass and volume when ice loss through melting and sublimation exceeds the accumulation of snowfall. With rising temperatures, the protective snow and firn layers thin out, exposing older and structurally weak ice. These exposed ice patches become highly unstable and can collapse, triggering flash floods even in the absence of large glacial lakes.

Insights from the Dharali Flash Flood

The Dharali disaster demonstrated that small-scale geomorphic processes can have large-scale impacts. The flood was caused by the collapse of an ice patch located within a nivation hollow on a steep slope of the Srikanta Glacier. This challenges the conventional focus on GLOFs as the primary source of glacial hazards and underscores the importance of monitoring micro-level changes in glacial landscapes.

Data and Trends on Glacier Melting

Recent data indicate that Himalayan glaciers have been losing ice at an average rate of nearly 0.5 metres of vertical height annually since 2000. The Hindu Kush Himalaya region is warming faster than the global average, with projections suggesting that up to 75% of glacier volume could be lost by 2100. This has serious implications for water security, as over 1.3 billion people depend on rivers originating from these glaciers. While initial melting may increase river flows, it eventually leads to long-term water scarcity. Additionally, the frequency of glacial hazards such as GLOFs and similar events has tripled over the past two decades.

Factors Contributing to Glacier Instability

The increasing instability of glaciers can be attributed to multiple interrelated factors. Rising atmospheric temperatures reduce snow cover and expose darker ice, which absorbs more heat and accelerates melting, as observed in the Srikanta Glacier. Black carbon deposition from biomass burning and vehicular emissions further intensifies melting by lowering the albedo of glaciers, with significant impacts seen near the Gangotri Glacier. Changes in precipitation patterns, particularly the shift from snowfall to rainfall at high altitudes, hinder glacier recharge, as seen in Ladakh. Infrastructure development, including road construction and tunnelling in fragile mountain ecosystems, creates localized disturbances and increases slope instability. Moreover, geomorphic processes like nivation-characterized by repeated freezing and thawing, gradually weaken slopes and create hollows that can collapse suddenly, as in the Dharali event.

Government Initiatives and Scientific Efforts

India has undertaken several initiatives to monitor and mitigate glacier-related risks. The National Mission for Sustaining the Himalayan Ecosystem (NMSHE) focuses on understanding glacier dynamics and ecosystem resilience. ISRO has been actively using satellite technologies such as Cartosat and RISAT to map over 9,500 glaciers and assess potential risks. Early Warning Systems have been installed in vulnerable regions like the Rishiganga and Dhauliganga valleys following past disasters. Additionally, international collaborations, such as Indo-Swiss programmes, are enhancing research capabilities and climate resilience strategies in the Himalayan region.

Challenges in Glacier Monitoring and Management

Despite these efforts, several challenges persist. The rugged and inaccessible terrain of the Himalayas makes it difficult to install and maintain monitoring infrastructure. There is also a lack of long-term historical data, which limits the ability to predict rare events such as ice-patch collapses. Transboundary issues further complicate glacier management, as many glaciers span across India, China, and Pakistan, restricting coordinated research and data sharing. Socio-economic vulnerabilities are high, as communities often reside in narrow valleys prone to sudden flooding. Additionally, unpredictable micro-climatic conditions make it difficult to anticipate disasters, as seen in past events like the Chamoli avalanche.

Way Forward

Addressing these emerging risks requires a multi-pronged approach. Integrated monitoring systems that combine satellite observations with ground-based sensors should be developed to track both large and small-scale glacial changes. Disaster frameworks must expand beyond GLOFs to include hazards like ice-patch collapses and nivation processes. Community participation is crucial, and local populations should be trained to recognize early warning signs such as exposed ice surfaces. Infrastructure development in Himalayan regions must be made climate-resilient, with strict environmental impact assessments. Regional cooperation among Himalayan countries is essential for effective data sharing and coordinated response. Furthermore, systematic mapping of vulnerable slopes and nivation zones can help in identifying high-risk areas.

Conclusion

The Dharali flash flood highlights the evolving nature of Himalayan hazards in the context of climate change. As glaciers continue to recede, new forms of instability are emerging, necessitating a shift from traditional monitoring approaches to more comprehensive, ridge-to-valley surveillance systems. Protecting the fragile Himalayan ecosystem is not only an environmental priority but also critical for ensuring the safety, livelihoods, and water security of millions of people dependent on these mountains.

In News:

The debate on fiscal federalism in India has intensified following the Union government’s acceptance of the 41% tax devolution recommended by the Sixteenth Finance Commission. While the recommendation appears to maintain the existing share of tax revenues for States, critics argue that structural changes in the fiscal framework may gradually reshape the balance of financial power between the Centre and the States.

Fiscal Federalism in India

Fiscal federalism refers to the division of financial powers, taxation authority, and expenditure responsibilities between different levels of government in a federal system. In India, the Constitution establishes a structured framework for fiscal relations between the Union and the States.

Key constitutional provisions include:

• Articles 268–281: These articles govern the distribution of taxation powers and revenue sharing between the Union and the States.
• Article 280: Provides for the establishment of the Finance Commission, which recommends the sharing of central taxes and grants to States.
• Seventh Schedule: Divides taxation powers between the Union List and the State List.

Since the Union government collects a major share of taxes, the Finance Commission periodically recommends how the divisible pool of central taxes should be distributed among States.

Evolution of Tax Devolution

The share of States in the divisible pool has increased over time:

• 14th Finance Commission: Increased States’ share to 42%.
• 15th Finance Commission: Reduced it slightly to 41% after the reorganisation of Jammu and Kashmir.
• 16th Finance Commission: Recommended retaining the 41% share.

Although the percentage has remained unchanged, analysts argue that the effective transfer of resources to States may be declining.

The Divisible Pool and the Issue of Cesses and Surcharges

The divisible pool represents the portion of central tax revenues that is shared with States. However, certain revenues such as cesses and surcharges are excluded from this pool and are retained entirely by the Union government.

Over time, the share of the divisible pool in gross tax revenue has declined:

• 13th Finance Commission period: 89.2%
• 14th Finance Commission period: 82.1%
• 15th Finance Commission period: 78.3%

This trend implies that even though the States’ share is fixed at 41%, the base from which this percentage is calculated has shrunk, reducing the overall transfer to States.

Key Recommendations of the Sixteenth Finance Commission

The Union government accepted several major recommendations of the Commission, including:

• Retaining 41% tax devolution to States
• Acceptance of the horizontal distribution formula among States
• Approval of grants to local bodies
• Continuation of the disaster management funding framework

However, several structural reforms proposed by the Commission were deferred. These include:

• Reform of Fiscal Responsibility Legislation (FRL) frameworks
• Regulation of off-budget borrowings by States
• Reforms in the power sector distribution companies (DISCOMs)
• Rationalisation of subsidies

Fiscal Stress in States

The Commission also highlighted rising fiscal stress in several States. For example:

• Punjab: Debt–GSDP ratio of 42.9% and revenue deficit of 3.7% of GSDP (2023–24).
• Rajasthan: Liabilities at 37.9% of GSDP.
• West Bengal: Liabilities at 38.3% of GSDP.
• Andhra Pradesh: Liabilities around 34.6% of GSDP.

In some cases, borrowing is used primarily to finance revenue expenditure such as salaries and interest payments, rather than capital investment. Another concern is off-budget borrowing, where loans are raised through government-controlled entities and serviced using public funds.

Changes in Horizontal Devolution

The Finance Commission also revised the horizontal distribution formula among States. Earlier, a criterion known as tax and fiscal effort rewarded States that improved their tax collection efficiency. This has now been replaced with a “contribution to GDP” indicator with a weight of 10%.

This shift may benefit economically stronger States such as Maharashtra, Gujarat, and Karnataka, which contribute significantly to national GDP. However, poorer States such as Bihar, Jharkhand, and Uttar Pradesh, which depend heavily on central transfers, may gain relatively less, raising concerns about weakening the principle of fiscal equalisation.

Local Body Grants

The Sixteenth Finance Commission also recommended ?7,91,493 crore in grants for rural and urban local bodies. These grants are divided into:

• Basic grants for essential services and administration.
• Performance grants linked to conditions such as timely constitution of State Finance Commissions, audited accounts, and compliance with data reporting systems.

However, implementation challenges persist, as only 62.6% of recommended urban local body grants were released during the previous Finance Commission period.

Conclusion

The retention of 41% tax devolution appears to preserve the formal structure of fiscal federalism. However, the increasing use of cesses and surcharges, changes in allocation criteria, and delays in structural reforms indicate evolving Centre–State fiscal dynamics. These developments may gradually reshape India’s fiscal federal landscape, raising important questions about resource distribution, fiscal autonomy, and cooperative federalism.

In News:

Migratory species are vital components of global biodiversity and play an important role in maintaining ecological balance across ecosystems. However, recent assessments indicate that many migratory species are facing growing threats due to human activities and environmental changes. The latest interim update to the State of the World’s Migratory Species Report warns that nearly half of the world’s migratory species populations are declining, highlighting the urgent need for stronger international conservation efforts.

About the State of the World’s Migratory Species Report

The State of the World’s Migratory Species Report is a global scientific assessment that evaluates the conservation status, population trends, and threats facing migratory animals worldwide. The report is prepared under the Convention on the Conservation of Migratory Species of Wild Animals (CMS), an international treaty established in 1979 under the United Nations Environment Programme (UNEP). CMS provides a framework for international cooperation to conserve migratory wildlife and their habitats across national boundaries.

The first comprehensive global report was released in 2024, covering 1,189 species listed under CMS and analysing trends among more than 3,000 additional migratory species worldwide. The assessment relies on scientific data from sources such as the International Union for Conservation of Nature (IUCN) Red List, population monitoring studies, and peer-reviewed scientific literature.

Importance of Migratory Species

Migratory species contribute significantly to ecosystem functioning and human livelihoods. Migratory birds help in pollination, seed dispersal, and pest control, while marine animals such as whales and fish support marine food chains and nutrient cycling. Large migratory mammals distribute nutrients across landscapes and influence vegetation patterns.

These species also hold economic and cultural importance, supporting tourism, food systems, and traditional practices in many regions. However, migration makes species highly vulnerable, as the loss of even a single habitat along their migration route can disrupt entire ecological networks. Effective conservation therefore requires coordinated action across multiple countries and ecosystems.

Major Findings of the Latest Report

1. Declining Populations of Migratory Species

The report highlights worrying global trends in migratory wildlife populations. Approximately 49% of migratory species protected under CMS are experiencing population declines, while about 24% face a risk of extinction. Compared to earlier assessments, the proportion of declining species has increased by around five percentage points within two years, indicating an accelerating conservation crisis. Out of the 1,189 CMS-listed species, about 582 species show declining population trends.

2. Rising Extinction Risks

The assessment also notes that 26 migratory species have moved to higher extinction-risk categories on the IUCN Red List. Among them, 18 species are migratory shorebirds, highlighting severe threats to coastal and wetland ecosystems. Species affected include birds such as cranes and pelicans, ungulates such as wildebeest, freshwater fish species, and marine animals including sharks, rays, and sea turtles.

3. Habitat Loss and Overexploitation

The report identifies habitat loss and overexploitation as the most significant threats to migratory species. Activities such as urban expansion, agricultural development, infrastructure construction, overfishing, and hunting have disrupted migratory routes and degraded critical habitats.

Large infrastructure projects such as roads, railways, pipelines, and fences are increasingly blocking migration corridors, particularly for large terrestrial mammals in regions such as Central Asia. Since migratory species depend on multiple habitats across countries, the destruction of even one site along their migration pathway can jeopardise their survival.

4. Emerging Threat of Avian Influenza

Another emerging threat highlighted in the report is Highly Pathogenic Avian Influenza (H5N1). Disease outbreaks have caused large-scale mortality events among several migratory bird populations and have even affected marine mammals. Species impacted include African Penguins, Humboldt Penguins, Peruvian Pelicans, and Red-crowned Cranes. Marine mammals such as the South American Sea Lion and South American Fur Seal have also been affected, indicating the growing ecological impacts of disease outbreaks.

Conservation Progress and Key Biodiversity Areas

Despite these concerning trends, the report identifies several conservation successes. Seven migratory species listed under CMS have shown improvements in conservation status, including the Saiga Antelope, Scimitar-horned Oryx, and the Mediterranean Monk Seal. These cases demonstrate that coordinated international conservation measures can effectively restore threatened species populations.

The report also highlights the significance of 9,372 Key Biodiversity Areas (KBAs) that serve as critical habitats for migratory species. However, 47% of these areas currently lack formal protection, making them vulnerable to human pressures and habitat degradation.

Conclusion

The State of the World’s Migratory Species Report underscores the growing conservation crisis facing migratory wildlife. Declining populations, rising extinction risks, habitat loss, overexploitation, and emerging diseases collectively threaten the survival of many species. Addressing these challenges requires strengthened international cooperation, protection of migratory corridors and key biodiversity areas, and sustainable management of ecosystems. Ensuring the conservation of migratory species is essential not only for preserving biodiversity but also for maintaining ecological balance and supporting human livelihoods across the globe.

In News:

The Ministry of Statistics and Programme Implementation (MoSPI) is releasing a new series of National Accounts Statistics (NAS) with 2022–23 as the base year, replacing the 2011–12 base year. The revised series aims to improve the accuracy and granularity of estimates of Gross Domestic Product (GDP) and Gross Value Added (GVA), reflecting structural changes in the Indian economy over the past decade.

Rationale for Revision

Since the previous base year revision in 2015, India’s economy has undergone significant transformations:

• Expansion of the digital economy and e-commerce
• Increased formalisation following the GST regime
• Shifts in consumption, employment, and production patterns
• Rapid growth of financial and service sectors

Updating the base year ensures better measurement of real growth, improved sectoral representation, and stronger evidence-based policymaking.

Key Structural Improvements

1. Sectoral Measurement Reforms

• Private Corporate Sector: Earlier, a company’s entire GVA was attributed to its dominant sector. The new approach allocates GVA based on activity-wise revenue shares, improving sectoral accuracy.
• General Government Sector: Inclusion of housing services provided to government employees and better coverage of local bodies and autonomous institutions enhances government output estimation.

2. Better Estimation of the Household Sector

The household sector—one of India’s largest contributors to GVA—will now be estimated using annual data from:

• Annual Survey of Unincorporated Sector Enterprises (ASUSE)
• Periodic Labour Force Survey (PLFS)

This replaces earlier extrapolation methods with direct annual estimation.

3. Improved Consumption Estimates

Private Final Consumption Expenditure (PFCE) will be derived from:

• Household Consumer Expenditure Surveys
• Production-side data
• Administrative datasets

This strengthens measurement of domestic demand.

Integration of Administrative Data

• Expanded use of GST data for regional output estimation and corporate value addition.
• Identification of active companies through tax records.
• Use of RBI’s Statistical Tables Relating to Banks in India (STRBI) for banking sector estimates.
• Replacement of proxy methods for private NBFCs with actual financial data from the Ministry of Corporate Affairs.

These changes improve financial sector GVA estimation and reduce reliance on assumptions.

Informal Sector and Agriculture

Greater use of ASUSE improves coverage of informal enterprises, insurance agents, and Gross Fixed Capital Formation (GFCF) in the unincorporated sector.

Agriculture estimation is strengthened using updated methodologies and data from institutions such as:

• Central Marine Fisheries Research Institute
• Central Inland Fisheries Research Institute
• Grassland and Fodder research bodies

This improves measurement of livestock, fisheries, and fodder output.

Methodological Upgrade: Double Deflation

One of the most significant reforms is the shift from a single deflator to a double deflator method.

• Earlier: Same inflation rate applied to inputs and outputs, causing growth distortions.
• Now: Separate deflators for inputs and outputs, ensuring more accurate real GVA estimates.

This reduces statistical discrepancies and improves credibility.

Additionally, Supply and Use Tables (SUTs) will be integrated, improving consistency between production and expenditure approaches.

International Alignment

India currently follows the System of National Accounts (SNA 2008). With the UN adopting SNA 2025, India plans to align with updated global standards in future revisions.

Challenges

• Complexity of double deflation and data integration.
• Back-series reconstruction may take nearly a year.
• State-level data quality variations.
• Need for greater transparency to avoid credibility debates seen in past revisions.

Conclusion

The 2022–23 base year revision represents one of India’s most comprehensive statistical overhauls in over a decade. By integrating richer datasets, modern methodologies, and improved sectoral coverage, the new GDP series aims to enhance policy reliability and international comparability. Its success, however, will depend on transparent implementation, timely back-series release, and sustained strengthening of India’s statistical ecosystem.

In News:

The National Green Tribunal (NGT) has approved the ?81,000-crore Great Nicobar mega infrastructure project, citing its strategic importance and environmental safeguards. The project covers 166 sq km of Great Nicobar Island (910 sq km), home to Indira Point, India’s southernmost location. It involves diversion of ~130 sq km of forest land and felling of over one million trees, raising significant ecological concerns.

Core Components

The project, initially conceptualised by NITI Aayog and implemented by ANIIDCO, rests on four pillars:

• Integrated Township (≈149 sq km) – Residential, commercial, tourism, logistics and defence infrastructure.
• Transshipment Port at Galathea Bay – Strategically located near the Malacca Strait; projected capacity of 14.2 million TEUs annually.
• Dual-use International Airport (8.45 sq km total allocation) – Second air facility after INS Baaz; requires 4.2 sq km land acquisition, affecting 379 families.
• 450-MVA Gas and Solar Power Plant (0.39 sq km) – To ensure reliable energy supply.

Land reclamation includes 2.98 sq km (port) and 1.94 sq km (airport), requiring 33.35 million cubic metres of construction material.

Strategic Importance

Great Nicobar lies close to the Malacca Strait, through which ~94,000 ships pass annually, accounting for ~30% of global trade and ~one-third of global maritime oil trade. The port aims to compete with Colombo, Hambantota, Port Klang and Singapore, reducing India’s dependence on foreign transshipment hubs.

The island hosts the Andaman and Nicobar Command (since 2001), India’s only tri-services command—and INS Baaz Naval Air Station at Campbell Bay. Defence infrastructure is included in the first construction phase, strengthening India’s Indo-Pacific posture.

Environmental and Social Concerns

Great Nicobar is part of the Sundaland biodiversity hotspot and largely falls under the Great Nicobar Biosphere Reserve. The project led to denotification of Galathea Bay Wildlife Sanctuary and a megapode sanctuary. The endemic Nicobar megapode faces habitat loss, while Galathea Bay is a key nesting site for leatherback turtles.

Indigenous communities are also affected:

• Shompen tribe (~250 people) – Semi-nomadic and highly vulnerable to external exposure.
• Nicobarese community – Many displaced during the 2004 tsunami; resettlement concerns persist.

The island’s population is projected to increase from ~8,500 (2011 Census) to 6.5 lakh by 2050, raising concerns of ecological strain and demographic transformation.

Conclusion

The Great Nicobar Project represents a high-stakes strategic initiative combining maritime trade ambition, defence expansion and geopolitical positioning. However, its implementation in a fragile ecological zone necessitates strict environmental safeguards, transparent governance and protection of tribal rights to ensure sustainable and inclusive development.

In News:

India’s aviation sector has emerged as one of the fastest-growing in the world, marked by rising passenger traffic, expansion of low-cost carriers, and rapid airport infrastructure development across metros and tier-2 cities. However, regulatory mechanisms have not kept pace with this expansion.

The growing complexity of algorithm-based pricing and market concentration makes a strong case for data-driven oversight, moving beyond reactive crisis management to proactive, evidence-based regulation.

Structural Transformation of India’s Aviation

• Rapid rise in domestic air travel.
• Dominance of low-cost carriers.
• Expansion of airport infrastructure under public-private partnerships.
• Increasing use of dynamic revenue management systems for pricing.

While operational data on passenger numbers, fleet size, and freight movement is regularly tracked, systematic monitoring of fare behaviour and market conduct remains limited.

Why Data-Driven Oversight is Needed

1. Dynamic Pricing and Algorithmic Markets

Airline fares fluctuate in real time based on:

• Demand patterns
• Seat inventory
• Competitor pricing
• Seasonal variation
• Route-level market share

This makes it difficult to distinguish between legitimate demand-driven price increases and potential market power abuse.

2. Limits of Crisis-Based Regulation

Recent fare spikes in India have triggered:

• Temporary fare caps
• Requests for data submission
• Post-facto investigations

However, ad hoc interventions are reactive and do not substitute for continuous, structured oversight. Often, data collected is retrospective and insufficient for robust analysis.

3. Volume-Focused Oversight

Current regulatory practice largely tracks traffic volumes rather than pricing behaviour. In a market increasingly driven by algorithmic decision-making, this creates regulatory blind spots.

Importance of Data Transparency

(a) Identifying Route-Level Market Power

If routes dominated by a single airline consistently show higher fares compared to competitive routes, it may signal structural pricing power.

(b) Tracking Entry and Exit Effects

• Entry of a new airline → Fares usually decline.
• Exit of a competitor → Fares often increase.

Systematic data collection enables regulators to measure competitive intensity.

(c) Monitoring Peak-Period Pricing

Holiday seasons provide natural tests of pricing conduct. Disproportionate fare increases on routes with high market share may indicate dominance leverage.

(d) Algorithmic Accountability

When pricing outcomes are observable and periodically reviewed, airlines are incentivised to embed compliance safeguards within revenue management systems. Transparency acts as a deterrent without constant state intervention.

Global Best Practice: The U.S. DB1B Model

The United States’ Airline Origin and Destination Survey (DB1B), maintained by the Bureau of Transportation Statistics (BTS), provides a model for structured transparency.

• Collects ticket-level data since 1995.
• Covers a 10% random sample of domestic tickets each quarter.
• Tracks fares, routes, and carrier details.

The DB1B database enables:

• Long-term pricing trend analysis
• Competition assessment
• Empirical research
• Transparent policymaking

Adopting a similar 10% sampling framework in India could expand the role of the Directorate General of Civil Aviation (DGCA) from volume tracking to behaviour monitoring.

Addressing Industry Concerns

• Proprietary Algorithms: A sampling framework monitors outcomes, not algorithmic code.
• Technical Burden: Airlines already maintain digital databases; quarterly reporting is feasible.
• Risk of Implicit Coordination: Delayed and aggregated release of data can prevent real-time collusion risks.

Way Forward

• Institutionalise periodic, structured fare data collection.
• Build analytical capacity within regulatory bodies.
• Shift from temporary fare caps to continuous oversight.
• Promote competition while safeguarding consumer interests.
• Strengthen inter-agency coordination between aviation and competition authorities.

Conclusion

India’s aviation growth is a major economic achievement. However, rapid expansion without robust data infrastructure risks regulatory vulnerabilities. The solution lies not in heavy-handed control but in structured transparency and analytical regulation.

In an increasingly algorithm-driven aviation market, regulatory institutions must evolve toward data-centric governance to ensure fair competition, consumer protection, and sustainable sectoral growth.

In News:

IndiaAI Mission 2.0, unveiled by the Union IT Minister at the India AI Impact Summit 2026 in Bharat Mandapam, signals a strategic evolution in India’s artificial intelligence policy framework. Moving beyond initial infrastructure building, the renewed mission focuses on indigenous research and development, MSME integration, sovereign AI capabilities, and large-scale diffusion of AI technologies. It aligns technological advancement with domestic economic priorities and the broader vision of positioning India among the world’s leading AI nations.

Strategic Shift: From Capacity Creation to Innovation Diffusion

The first phase of India’s AI efforts emphasized building compute capacity and foundational infrastructure. Mission 2.0 transitions toward:

• Accelerating indigenous AI research and development
• Enabling sector-wide adoption, particularly among MSMEs
• Strengthening domestic value creation across the AI stack

This marks a shift from “infrastructure availability” to “innovation scalability and economic integration.”

MSME-Focused AI Stack: A UPI-Like Model

A key feature of Mission 2.0 is the creation of a common digital AI platform, conceptualized on the lines of the Unified Payments Interface (UPI). The objective is to provide a bouquet of ready-to-use AI tools for micro, small and medium enterprises (MSMEs).

Through this shared platform:

• MSMEs can seamlessly access AI applications.
• Sector-specific solutions will enhance productivity and competitiveness.
• Barriers related to cost and technical complexity are reduced.

Given the centrality of MSMEs in employment generation and exports, embedding AI in this segment can significantly improve global integration and efficiency.

Expanding Compute Infrastructure and Democratizing Access

India plans to expand its AI compute capacity by adding 20,000 GPUs to the existing base of 38,000 GPUs. Unlike models where AI infrastructure is concentrated in a handful of corporations, India’s approach emphasizes broad-based and equitable access.

Several sovereign AI models launched at the summit reportedly performed competitively on global benchmarks, indicating progress in domestic capability building.

This expansion strengthens India’s ability to support startups, academic institutions, and enterprises without overreliance on foreign infrastructure providers.

Investment Momentum and Global Standing

India is now ranked among the top three AI nations globally, according to international assessments such as Stanford’s AI index. The government projects that over $200 billion in investments could flow into the AI ecosystem over the next two years.

These investments are expected across all five layers of the AI stack:

1. Hardware (chips and compute)
2. Infrastructure
3. Foundational models
4. Platforms
5. Applications

Such capital infusion can catalyse innovation-led growth and job creation.

Sovereign AI: Beyond Model Development

Mission 2.0 broadens the concept of sovereign AI beyond developing domestic language models. It includes:

• Indigenous chip development
• Control over infrastructure and compute systems
• Development of scalable AI applications

The goal is to ensure strategic autonomy and reduce dependence on foreign technological gatekeepers.

AI, Workforce Transition, and Copyright Concerns

Acknowledging concerns about AI’s impact on India’s IT services sector, the government has emphasized upskilling through collaboration among government, industry, and academia.

Additionally, the government supports fair remuneration for news publishers whose content is used to train AI systems. A DPIIT committee has proposed a mandatory blanket licensing framework with statutory royalty provisions potentially making India the first country to institutionalize such a regime.

Conclusion

IndiaAI Mission 2.0 represents a comprehensive policy recalibration—integrating infrastructure expansion, sovereign capability, MSME empowerment, investment mobilisation, and regulatory innovation. By combining technological ambition with inclusive economic objectives, the mission positions AI not merely as a technological tool, but as a driver of structural transformation and strategic autonomy in India’s development trajectory.

In News:

The Union Budget 2026 has approved the establishment of two major telescope facilities in Ladakh—the National Large Solar Telescope (NLST) and the National Large Optical–Near Infrared Telescope (NLOT) along with the upgradation of the existing Himalayan Chandra Telescope (HCT).

Operated by the Indian Institute of Astrophysics (IIA), these projects aim to strengthen India’s capacity in frontline space science, solar physics, and cosmology while consolidating Ladakh’s status as the country’s premier astronomy hub.

Ladakh, particularly the Hanle region located at over 4,000 metres above sea level, offers exceptional observing conditions like high altitude, cold desert climate, minimal atmospheric water vapour, and extremely low light pollution. The presence of the Hanle Dark Sky Reserve, India’s first, ensures protection of natural night skies through strict lighting regulations. These factors enable year-round observations, unlike many mainland observatories affected by monsoons, thereby maximizing scientific output.

National Large Solar Telescope (NLST)

The NLST, a 2-metre aperture solar telescope, will be installed near Pangong Tso in Merak. Operating in visible and near-infrared wavelengths, it is expected to be completed within 5–6 years. With a spatial resolution of about 50 km and millisecond-level temporal resolution, NLST will enable high-precision studies of solar dynamics, magnetic fields, flares, and coronal mass ejections.

Understanding these processes is crucial for space-weather forecasting, as solar disturbances can disrupt satellites, communication networks, power grids, and space missions. NLST will complement India’s space-based solar mission, Aditya-L1 (launched in 2023), and join the historic Kodaikanal Solar Observatory (1899) and Udaipur Solar Observatory (1975) as India’s third ground-based solar facility. Strategically, it fills a longitudinal gap in global solar observation networks, enhancing India’s contribution to heliophysics.

National Large Optical–Near Infrared Telescope (NLOT)

The NLOT, to be located in Hanle, will be a 13.7-metre class segmented-mirror telescope, placing it among the world’s largest optical–infrared observatories. Its primary mirror will consist of 90 hexagonal segments functioning as a unified optical surface, enabling collection of faint cosmic light with high precision.

Projected to be operational within a decade, NLOT will facilitate cutting-edge research in exoplanets, stellar and galactic evolution, supernovae, and the origins of the universe. Its infrared capability allows observation of distant and dust-obscured objects, critical for studying early cosmic epochs.

India’s technical expertise gained from its participation in the Thirty Meter Telescope (TMT) project where it contributes mirror segments and segment-support assemblies will aid in constructing NLOT’s advanced optical systems. Importantly, domestic ownership ensures greater observation time for Indian scientists, overcoming the limitations of competitive international access.

Upgradation of the Himalayan Chandra Telescope (HCT)

Operational since 2001, the 2-metre HCT has contributed significantly to transient astronomy, including supernova studies. The planned upgrade to a 3.7-metre segmented mirror system will enhance sensitivity and expand its optical–infrared capabilities. The upgraded HCT will work synergistically with global facilities such as LIGO-India (gravitational-wave observatory in Maharashtra) and the Square Kilometre Array (radio telescope in Australia and South Africa), enabling multi-messenger astronomy.

Significance

Together, NLST, NLOT, and the upgraded HCT represent a transformative investment in India’s scientific infrastructure. They strengthen India’s strategic autonomy in high-end research, support capacity building in precision engineering, and position the country and the Global South more prominently in global astronomy. Complemented by a new COSMOS planetarium in Andhra Pradesh for outreach and education, the initiative reflects a comprehensive vision that integrates research excellence, technological self-reliance, and public scientific engagement.

In News:

India will host the AI Impact Summit 2026, marking the first time a major global AI governance forum is being held in the Global South. The summit represents a significant shift in the international discourse on artificial intelligence,  from narrow concerns of safety and regulation to broader questions of development, equity, and long-term societal impact.

Evolution of Global AI Governance Forums

The New Delhi summit builds upon a sequence of international engagements on AI governance. The Bletchley Park AI Safety Summit (2023) primarily focused on identifying catastrophic AI risks and resulted in the Bletchley Declaration. The Seoul Summit (2024) expanded the agenda to include innovation and inclusivity, while the Paris AI Action Summit (2025) shifted attention towards implementation and economic opportunities. Each phase has progressively widened the scope from risk containment to practical deployment. India’s summit seeks to carry this evolution forward by anchoring AI governance in developmental priorities.

India’s Distinctive Vision

Unlike earlier summits dominated by regulatory anxieties of advanced economies, India is framing the conversation around “People, Planet, and Progress.” The focus is on deploying AI solutions to address real-world challenges such as employment transitions, sustainability, and service delivery—especially in developing countries. This approach reflects India’s dual identity: an emerging AI power and a representative voice of the Global South seeking a more equitable share in the global AI value chain.

Scale, Participation and Agenda

Described by Union IT Minister Ashwini Vaishnaw as the largest such gathering so far, the summit is expected to witness participation from over 100 countries, including 15–20 heads of government, 50+ ministers, and 40+ CEOs of leading global and Indian technology firms. Narendra Modi will inaugurate the event and engage with global industry leaders through a CEO roundtable.

The summit will follow a multi-stakeholder format, bringing together governments, industry, researchers, civil society, and international institutions. Working groups will deliberate on AI’s impact on jobs, trust and safety frameworks, and sector-specific applications across healthcare, industry, and governance.

India’s Domestic AI Push

A key feature of the summit will be the launch of indigenous AI language models under the IndiaAI Mission (?10,370 crore), including both foundational and small language models. The event will also showcase over 500 AI startups and host around 500 parallel sessions, underscoring India’s ambition to emerge as a global AI innovation hub.

Geopolitics and China’s Participation

India has extended an invitation to China, signalling a pragmatic approach to AI governance despite geopolitical sensitivities. China’s participation follows precedents set at earlier summits and coincides with signs of easing bilateral tensions, such as the resumption of direct flights and partial relaxation of rare-earth export restrictions affecting Indian manufacturers. The summit’s non-binding, host-driven format allows India strategic flexibility in shaping participation.

Structural Constraints: Hardware and Energy

Despite its ambitions, India faces critical constraints. The absence of domestically manufactured advanced computing hardware, particularly GPUs, limits AI self-reliance. Prospective gains from an interim India–US tech trade deal and tax holidays for data centres aim to mitigate this gap. Energy requirements pose another challenge, with the government exploring nuclear power as a long-term solution for energy-intensive AI data centres.

Conclusion

The AI Impact Summit 2026 represents India’s attempt to redefine global AI governance through a development-first lens. By aligning technology with inclusivity, sustainability, and economic opportunity, India seeks not only a larger share of the AI pie but also a more representative and balanced global AI order, one that reflects the aspirations and constraints of the developing world.

In News:

The Union Budget’s allocation of Rs. 20,000 crore over five years for Carbon Capture, Utilisation and Storage (CCUS) marks a significant policy intervention to address emissions from India’s hard-to-abate industrial sectors. The move reflects a strategic recognition that achieving India’s net-zero emissions target by 2070 will not be possible through renewable energy transition alone, especially amid continued industrialisation and infrastructure expansion.

Understanding CCUS

CCUS refers to a suite of technologies that aim to prevent carbon dioxide (CO2)—the principal driver of climate change from entering the atmosphere. The process involves:

• Capturing CO2 from industrial processes such as cement, steel, power generation, refineries and chemicals
• Transporting CO2 through pipelines or other means
• Storing CO2 securely in deep geological formations, or
• Utilising CO2 by converting it into fuels, chemicals or construction materials

Importantly, CCUS is not a single technology but a value chain involving diverse capture methods, materials, transport systems and storage solutions.

Global Status and Climate Relevance

Although CCUS technologies have existed for decades, global deployment has been limited due to high costs, safety concerns, and scale-up challenges. Currently, only about 50 million tonnes of CO2 are captured annually worldwide—less than 0.5% of global emissions of nearly 40 billion tonnes.

However, with global emissions remaining stubbornly high, climate assessments increasingly agree that there is no credible pathway to limiting global warming or achieving net-zero by 2050 without large-scale CCUS adoption. Consequently, CCUS projects are expanding mainly in the United States, Europe and China.

India’s CCUS Journey

India’s CCUS push gained momentum after it announced its net-zero by 2070 commitment at the 2021 Glasgow climate summit. Since then:

• Pilot and demonstration projects have begun in the steel, cement and chemical sectors
• Potential large-scale capture and geological storage sites have been mapped
• Dedicated Centres of Excellence, such as at Indian Institute of Technology Bombay and Jawaharlal Nehru Centre for Advanced Scientific Research, are leading indigenous research

While the underlying science of CCUS is well understood, significant innovation is still required in engineering design, materials, transport logistics and storage safety to make systems affordable, efficient and scalable under Indian conditions.

Policy and R&D Roadmap

In December, the Department of Science and Technology released a CCUS R&D Roadmap for 2030, identifying key technology, financing and policy bottlenecks that have slowed adoption. A major gap highlighted was the lack of funding for field-level testing and scale-up, where commercial risks are highest.

Significance of the Rs. 20,000 Crore Budget Allocation

The five-year budgetary support is designed to:

• Bridge the “valley of death” between laboratory success and commercial deployment
• Raise technology readiness levels of CCUS systems
• Enable scale-up to capture or store 100–500 tonnes of CO2 per day, which is necessary for economic viability

Experts expect that this funding could allow multiple CCUS technologies to reach commercial deployment within five years, transforming India’s industrial decarbonisation landscape.

Economic and Strategic Benefits

CCUS is particularly critical for hard-to-abate sectors such as cement and steel, where:

• A majority of CO2 emissions arise from chemical processes, not fuel combustion
• Renewable electricity alone cannot eliminate emissions

Accordingly, CCUS represents the only viable large-scale decarbonisation route for these industries.

The Budget explicitly targets CCUS applications in power, steel, cement, refineries and chemicals, which together account for the bulk of India’s industrial emissions.

From a trade perspective, CCUS adoption can help Indian exporters navigate emerging carbon-based trade barriers, such as the Carbon Border Adjustment Mechanism (CBAM) of the European Union. Lower embedded emissions would enhance the global competitiveness of Indian products.

Challenges Ahead

Despite strong policy intent, several challenges remain:

• High upfront capital costs and uncertain returns
• Need for long-term monitoring and liability frameworks for CO2 storage
• Limited transport infrastructure for captured CO2
• Regulatory clarity on ownership and responsibility for stored carbon

Addressing these issues will require coordinated action across ministries, industry, academia and financial institutions.

Conclusion

The Rs. 20,000 crore CCUS allocation represents a structural shift in India’s climate strategy, acknowledging the limits of energy transition alone and embracing industrial decarbonisation technologies. If effectively implemented, CCUS can reconcile India’s development imperatives with its climate commitments, safeguard export competitiveness, and enable a credible pathway towards net-zero by 2070. Sustained policy support, technological innovation and regulatory certainty will determine whether this budgetary push translates into long-term climate and economic gains.

In News:

The Union Budget 2026–27 was presented in Parliament by the Nirmala Sitharaman, marking her ninth consecutive Budget and the first to be prepared in Kartavya Bhawan. The fiscal blueprint is structured around three core duties or “Kartavyas” that reflect the government’s strategic priorities: accelerating and sustaining economic growth, building human capacities and fulfilling aspirations, and ensuring inclusive development across regions and communities. This framework signals an integrated approach to achieve Viksit Bharat by 2047 amid global uncertainties and domestic structural challenges.

Macro-Fiscal Framework and Priorities

For the financial year 2026–27, the Budget projects total expenditure at ?53.5 lakh crore, with non-debt receipts estimated at ?36.5 lakh crore and net tax receipts at ?28.7 lakh crore. The fiscal deficit is targeted at 4.3% of GDP, marginally lower than the revised estimate of 4.4% for 2025–26, underscoring a continued commitment to fiscal consolidation. The debt-to-GDP ratio is projected to decline to 55.6%, indicating gradual improvement in fiscal metrics.

First Kartavya: Growth, Competitiveness and Infrastructure

The Budget places strong emphasis on strengthening India’s growth engine through investment-led strategies and sector-specific interventions. Public capital expenditure is significantly enhanced to ?12.2 lakh crore, reinforcing the infrastructure build-out across transport, logistics, waterways and urban connectivity. Seven high-speed rail corridors are proposed as growth connectors, while 20 new national waterways are slated to be operational in the coming five years.

Manufacturing and strategic sectors receive focused support. The Biopharma SHAKTI initiative, with an outlay of ?10,000 crore, aims to position India as a global biopharmaceutical hub. The India Semiconductor Mission 2.0 and expanded electronics components manufacturing scheme are designed to enhance technological sovereignty and supply chain resilience. Rare earth corridors in mineral-rich states will facilitate mining, processing and value chain development. Initiatives such as the Textile Expansion and Employment Scheme and Mega Textile Parks will boost traditional and technical textiles through cluster-based financing and technology upgradation.

Special focus is accorded to legacy industry revival, with targeted schemes to modernise 200 industrial clusters, and to developing Champion SMEs backed by a ?10,000 crore growth fund. Infrastructure risk mitigation funds and monetisation of CPSE real estate are expected to catalyse private investment.

Second Kartavya: Human Capital and Aspirational Growth

The second Kartavya underscores investment in human capital. A High-Powered Education–Employment–Enterprise Standing Committee will align skill development with employment outcomes, particularly in services and future sectors. New allied health institutions and regional medical hubs are proposed to strengthen healthcare capacity and position India as a medical tourism destination. Traditional systems of medicine will be reinforced with new institutes for Ayurveda.

Education infrastructure will be expanded with university townships near industrial corridors and girls’ hostels across districts to improve access and equity. Creative industries under the Orange Economy will be catalysed through AVGC labs in schools and colleges, targeting employment generation in animation, gaming and visual effects.

Third Kartavya: Inclusive Development and Last-Mile Participation

Inclusivity is central to the third Kartavya. Major schemes are unveiled to boost farm incomes, including integrated development of reservoirs, a Coconut Promotion Scheme and Bharat-VISTAAR, an AI-enabled multilingual platform to improve agricultural decision-making. Efforts to empower divyangjan through skilling initiatives and the expansion of mental health infrastructure, including NIMHANS-2, reflect a broader social inclusion agenda.

Regional disparities are addressed through targeted infrastructure in Purvodaya States and the North-East, including tourism circuits and e-buses to enhance sustainable connectivity. Fiscal transfers through the 16th Finance Commission amount to ?1.4 lakh crore, reinforcing cooperative federalism.

Conclusion

The Union Budget 2026–27 balances growth imperatives with inclusive outcomes, reinforcing infrastructure, manufacturing, human capital, and regional equity. Anchored in the Three Kartavyas, it strives to consolidate India’s macroeconomic stability while enabling citizens to actively participate in and benefit from the development process.

In News:

The Union Budget 2026–27 is anchored in a threefold developmental framework accelerating economic growth, building human capacity, and ensuring inclusive participation. At a time when the global economy faces supply chain realignments, technological disruption, and resource insecurity, the Budget attempts to position India as a resilient, innovation-driven, and socially inclusive economy.

I. Growth Strategy: Investment-Led and Technology-Driven

A defining feature of the Budget is the continued emphasis on public capital expenditure, raised to ?12.2 lakh crore. This reinforces the government’s belief that infrastructure spending crowds in private investment, enhances productivity, and generates employment.

The push spans:

• High-speed rail corridors and freight infrastructure
• Expansion of National Waterways for cost-effective logistics
• Development of City Economic Regions (CERs) to leverage urban agglomeration benefits

These measures reflect a shift from isolated project-based development to integrated regional growth planning.

The Budget also promotes strategic manufacturing and high-technology sectors. The Biopharma SHAKTI initiative (?10,000 crore outlay) aims to develop domestic capabilities in biologics and biosimilars, reducing import dependence while addressing India’s rising non-communicable disease burden. This aligns with the broader push toward knowledge-intensive industrialisation.

Simultaneously, the ?10,000 crore SME Growth Fund recognises MSMEs as drivers of employment and innovation, moving beyond survival support toward scaling globally competitive firms.

II. Human Capital: From Demographic Dividend to Skilled Workforce

The Budget acknowledges that economic growth without skill formation risks jobless expansion. Hence, it invests in education, skilling, and sector-specific workforce creation.

• AVGC labs in schools and colleges support India’s emerging digital content industry.
• Establishment of girls’ hostels in STEM districts addresses gender gaps in higher education.
• A National Institute of Hospitality and guide training scheme link skilling with tourism-led growth.

Healthcare is treated not only as welfare but also as an employment-intensive care economy. The proposal for Regional Medical Hubs integrates healthcare delivery, research, and medical tourism, positioning India as a global health services destination.

III. Inclusive Growth and Social Sector Interventions

The third pillar of the Budget centres on inclusion. Schemes such as Bharat VISTAAR, an AI-based multilingual agricultural advisory, aim to democratise digital infrastructure for farmers, thereby reducing information asymmetry and climate risk.

Similarly, SHE-Marts build on SHG-based mobilisation to promote women’s entrepreneurship, signalling a shift from credit access to market integration and enterprise ownership.

Mental health infrastructure expansion, regional development in the Northeast, and targeted tourism circuits indicate an attempt to address geographical and social imbalances.

IV. Fiscal Prudence with Growth Orientation

Despite higher expenditure, fiscal consolidation remains on track:

• Fiscal deficit projected at 4.3% of GDP
• Debt-to-GDP ratio on a declining trajectory

This suggests a calibrated approach where growth-enhancing capex is prioritised while maintaining macroeconomic credibility.

V. Tax Reforms: Simplification and Competitiveness

The introduction of the New Income Tax Act (2025) aims to simplify compliance and reduce litigation. Rationalisation of penalties, decriminalisation of minor offences, and automated safe harbour provisions for IT services improve the ease of doing business.

In a bid to attract global capital, tax incentives for data centres, cloud services, and non-resident investors indicate a strategy to integrate India into global value chains in digital and high-tech domains.

VI. Trade Facilitation and Industrial Policy

Customs reforms reduce duties on inputs for critical minerals, clean energy, aviation, and pharmaceuticals, supporting domestic manufacturing. Digitisation of cargo clearance, AI-based risk assessment, and warehouse reforms enhance trade efficiency and logistics competitiveness.

Conclusion

The Union Budget 2026–27 reflects a structural transition in India’s development model—from consumption-led growth to investment, innovation, and inclusion-led expansion. By combining infrastructure investment, industrial policy, human capital formation, and digital governance, the Budget attempts to align short-term growth impulses with the long-term goal of Viksit Bharat. The key challenge lies in effective implementation and coordination with states, which will determine whether these ambitions translate into broad-based socio-economic transformation.

In News:

India’s statistical architecture is undergoing a major transformation as the Ministry of Statistics and Programme Implementation (MoSPI) moves toward developing a bottom-up District Domestic Product (DDP) framework.

The initiative seeks to address long-standing limitations in district-level economic measurement by integrating two critical datasets—the Annual Survey of Unincorporated Sector Enterprises (ASUSE) and the Periodic Labour Force Survey (PLFS). Beginning January 2025, the combined use of these datasets aims to provide more accurate, granular and timely insights into India’s local economic activity, enabling evidence-based policymaking at the district level.

For decades, most states have relied on top-down allocation methods to estimate DDP, proportionately distributing Gross State Domestic Product based on outdated demographic indicators such as population. This approach produces “near-identical growth rates across districts”, obscuring regional disparities. Recognising this gap, MoSPI has initiated a shift toward a bottom-up estimation model in partnership with state governments. By directly capturing enterprise-level and labour market data from each district, the new framework is expected to radically improve the precision of district economic accounts.

The ASUSE forms the backbone of this strategy. Covering the unincorporated non-agricultural sector—which includes micro, household-based and small enterprises across manufacturing, trade and services—ASUSE produces detailed information on operations, investment patterns, workforce size and value addition. Previously released annually, the survey now offers quarterly data, enhancing frequency and granularity. Given the dominance of the unorganised sector in India’s economy, ASUSE provides an indispensable window into local economic activity.

The PLFS, conducted monthly by the National Statistical Office (NSO), complements ASUSE by capturing labour force participation, employment conditions, earnings and occupational structures in both rural and urban areas. Together, the two datasets reflect the dual pillars of district economies—enterprise activity and labour engagement. MoSPI notes that large enterprises are easy to identify, but district-level output is primarily driven by households, nano units and MSMEs, which both surveys cover extensively.

By combining these datasets, MoSPI aims to compute DDP through:

(a) bottom-up aggregation of district-level enterprise and labour data;

(b) integration of informal sector output; and

(c) alignment of statistical systems with decentralised planning structures.

This marks a paradigm shift in India’s economic measurement, aligning with the government’s emphasis on data-driven governance under Viksit Bharat @2047.

The initiative is part of a broader overhaul of the statistical system. Several complementary efforts are underway:

• The Annual Survey of Service Sector Enterprises (ASSSE), launching in January 2026, will map the incorporated services sector.
• The National Household Income Survey (NHIS), beginning February 2026, aims to measure income distribution and inequality—despite traditional challenges of under-reporting.
• A forward-looking capital expenditure survey has been introduced to track investment trends.
• MoSPI is also expanding public access to over 250 datasets, including GST aggregates, e-Vahan registrations and trade statistics, to strengthen national accounts and support research.

Despite these advancements, challenges remain. Accurate data capture from unincorporated enterprises is difficult, statistical capacity varies across states, and integrating multiple datasets raises risks of double-counting. Yet experts view the reform as a critical step toward improving the granularity, reliability and timeliness of India’s economic statistics. With several states already experimenting with district-level estimation, MoSPI’s framework could soon enable standardised and credible DDP measurement nationwide, transforming local governance and development planning.

In News:

India is grappling with a growing employability crisis, underscored by the fact that only 42.6% of graduates are considered job-ready. This mismatch between academic training and labour market needs has become a structural challenge, affecting productivity, economic growth, and youth aspirations. The crisis signals a systemic misalignment rather than a shortage of talent.

Understanding Employability

Employability today goes beyond academic qualifications. It includes the ability to:

• Acquire and apply knowledge in real-world contexts.
• Adapt to evolving technologies and workplace demands.
• Engage in lifelong learning, unlearning, and relearning.
• Demonstrate soft skills, value creation, and ethical behaviour.

Modern industries require graduates who combine technical capability with communication, teamwork, problem-solving, and a growth mindset.

Causes of the Academia–Industry Divide

Academic Factors

• Outdated Curriculum: Syllabi often fail to match rapid technological changes, new job roles, and automation trends.
• Theory-Oriented Pedagogy: Learning remains exam-centric with limited exposure to practical projects, internships, or problem-solving environments.
• Soft Skills Deficit: Institutions provide little training in communication, adaptability, workplace behaviour, and emotional intelligence.

Industry Factors

• High Expectations: Employers expect “ready-to-deploy” graduates but invest minimally in onboarding or mentoring.
• Rapid Technological Shifts: Industry skill needs evolve faster than academia can adjust, widening the skills gap.
• Weak Collaboration: Companies often view academic institutions as outdated, resulting in minimal engagement in curriculum design or research.
• Short-Term Approach: Recruitment is prioritised over building robust, long-term skill ecosystems.

Government and Institutional Initiatives

• National Education Policy (NEP) 2020: Encourages experiential learning, flexibility, internships, and stronger industry linkages.
• AICTE Internship Mandate: Requires engineering students to undergo industrial exposure.
• Skill India Mission: Strengthens vocational education through Sector Skill Councils aligned with market needs.
• NASSCOM FutureSkills PRIME: Upskills youth in digital technologies such as AI, data analytics, and cybersecurity.

These initiatives aim to modernise learning pathways and improve alignment with industry demands.

Challenges in Implementation

Despite reforms, several structural challenges persist:

• Curricular Inertia: Bureaucratic hurdles delay rapid updates in university syllabi.
• Fragmented Skills Ecosystem: Weak coordination among government, academia, and industry limits policy effectiveness.
• Faculty Skill Gaps: Many educators lack exposure to new technologies and contemporary workplace practices.
• Urban–Rural Divide: Smaller and rural institutions suffer from poor infrastructure and limited corporate linkages.
• Low Industry Investment: Companies underinvest in academia–industry partnerships and long-term talent development.

Way Forward

• Structural Reforms
  • Curriculum Co-Design: Regular, collaborative revision of syllabi with inputs from employers, universities, and policymakers.
  • Dual-Learning Model: Embed apprenticeships, live projects, and work-integrated learning into higher education.
  • Faculty Immersion: Promote faculty internships, industry sabbaticals, and continuous upskilling.
• Skills and Ethics
  • Soft Skills & Ethics Labs: Establish dedicated centres for communication, workplace ethics, and emotional intelligence.
  • Outcome-Based Tracking: Use data to monitor alumni career trajectories and skill relevance.
• Industry Engagement: Incentivise long-term corporate participation in curriculum development, research, and training.

Conclusion

India’s employability challenge is fundamentally an issue of alignment, not ability. Bridging the gap between academia and industry requires shared responsibility, continuous innovation, and sustained collaboration. When education becomes practical, dynamic, ethical, and closely connected to the world of work, India can unlock its demographic potential and build a resilient, future-ready workforce.

In News:

India’s food and fertiliser subsidy regime has played a critical role in ensuring food security and supporting farm productivity. However, with extreme poverty declining from 27.1% in 2011 to a historic low of 5.3% in 2022, and the combined food and fertiliser subsidy bill exceeding ?3.5 lakh crore in FY26, there is a growing policy imperative to reimagine these subsidies for greater efficiency, fiscal prudence, and long-term sustainability.

The Current Landscape

Food and fertiliser subsidies in India are a mix of direct and indirect support mechanisms. Direct subsidies include schemes like PM-KISAN, while indirect subsidies include low-cost foodgrains under the National Food Security Act (NFSA) and price-controlled fertilisers. As per government data:

• Food subsidy is budgeted at ?2.03 lakh crore, reaching over 800 million beneficiaries through the Public Distribution System (PDS).
• Fertiliser subsidy is pegged at ?1.56 lakh crore, driven by rising global prices and a skewed demand for urea.

Challenges in the Current Subsidy System

• Mismatch Between Poverty and Coverage: Despite poverty falling to 5.3%, 84% of households still possess ration cards, many of whom are no longer poor. This reflects poor targeting and leads to welfare leakages.
• Nutritional Deficiency in PDS: The PDS remains cereal-centric, primarily distributing rice and wheat, while nutrition insecurity persists due to insufficient supply of pulses, edible oils, and micronutrients.
• Fertiliser Misuse: The overuse of nitrogen-based fertilisers (particularly urea) has caused an ecological imbalance, deteriorating soil health and reducing long-term farm productivity.
• Fiscal Constraints: Massive subsidy expenditures are crowding out investments in rural infrastructure such as irrigation, cold storage, and extension services—critical for doubling farmer incomes.
• Leakages and Ghost Beneficiaries: Despite digitisation and Aadhaar seeding, leakages continue in both PDS and fertiliser channels, with instances like card cancellations in Jharkhand pointing to persistent inefficiencies.

Government Initiatives So Far

• PMGKAY during COVID-19 extended free foodgrains to NFSA beneficiaries, and has now been merged with NFSA provisions.
• Digitisation of ration cards and Aadhaar-enabled ePoS machines are being used to plug PDS leakages.
• Neem-coated urea and the Nutrient-Based Subsidy (NBS) policy aim to reduce misuse and promote balanced fertilisation.
• Direct Benefit Transfer (DBT) for fertilisers is being piloted to streamline subsidy flows and reduce diversion.

Reform Measures Needed

• Targeting and Gradation: Use PM-KISAN, SECC, and Aadhaar-linked databases to better identify the poorest 15% households and gradually taper subsidies for others.
• Digital Food Coupons: Introduce ?700/month digital wallets or coupons for nutrient-rich food purchases (pulses, eggs, milk), improving dietary diversity and nutrition security.
• Fertiliser Coupons & Price Rationalisation: Introduce fertiliser coupons, deregulate prices, and incentivise eco-friendly inputs like bio-fertilisers and organic compost.
• Improve Monitoring: Strengthen data triangulation using land records, crop surveys, and income data to reduce inclusion/exclusion errors.
• Farmer Sensitisation: Communicate the rationale for reforms clearly to farmers to avoid mistrust or resistance, as witnessed during earlier protests.

Conclusion

India’s welfare architecture must evolve with its changing socio-economic landscape. With poverty rates at historic lows, continued universal subsidies are both fiscally unsustainable and inefficient. Smartly targeted reforms in food and fertiliser subsidies are vital for improving nutritional outcomes, restoring soil health, and ensuring optimal allocation of public resources. A calibrated transition to a more efficient, inclusive, and sustainable system will enhance welfare delivery without compromising economic growth.

In News:

India’s green hydrogen sector stands at a critical crossroads. Once buoyed by global enthusiasm for clean fuels, it now faces export-related headwinds due to geopolitical uncertainties and wavering international policy commitments. In response, India has strategically pivoted toward building a robust domestic ecosystem to ensure long-term energy security and decarbonisation.

National Green Hydrogen Mission

Launched in 2023, the National Green Hydrogen Mission aims to establish India as a global green hydrogen hub. With an outlay of ?19,744 crore, the mission targets the production of 5 million metric tonnes (MMT) of green hydrogen by 2030, along with domestic manufacturing of electrolysers under the SIGHT (Strategic Interventions for Green Hydrogen Transition) programme.

To ensure credibility and transparency, the Ministry of New and Renewable Energy (MNRE) introduced a measurement and certification framework in April 2025 to verify green hydrogen at the production stage. These foundational steps are essential for market integrity, both domestically and internationally.

Export Slowdown: Policy and Geopolitical Challenges

India’s early ambitions to become a major green hydrogen exporter have been hampered by global developments. Projects like ReNew’s green ammonia facility in Odisha face uncertain prospects due to declining international demand. Contributing factors include policy uncertainty in key markets like the United States, where a potential rollback of the Inflation Reduction Act (via the “Big Beautiful Bill”) threatens long-term clean energy investments.

Moreover, European procurement initiatives, such as Germany’s Hintco under the H2Global Foundation, have seen low industry response, reflecting weak investor confidence. In response, India has initiated talks with European ports like Rotterdam and Antwerp, and is pushing for FTA provisions to lower import duties on green hydrogen, aiming to keep future export channels open.

Domestic Market Creation:

Faced with uncertain exports, India is actively cultivating domestic demand. A recent tender for 8 lakh tonnes of green hydrogen received full bids, indicating growing interest from Indian firms. The Solar Energy Corporation of India (SECI) is managing another tender for 7 lakh tonnes, primarily for the fertiliser sector.

Pilot initiatives are also being deployed in sectors such as steel, shipping, and transportation. For example, hydrogen fuel cell buses are being tested in five cities, including Ladakh. Industry experts advocate for mandatory blending in sectors like fertilisers to accelerate adoption.

Cost Competitiveness: The Core Challenge

At present, green hydrogen costs $4–$5 per kg, significantly higher than $2.3–$2.5 per kg for grey hydrogen. A report by CII, Bain & Co., and RMI attributes this to immature supply chains, high capital costs, and limited scale. The report recommends pragmatic interventions such as:

• Blending green hydrogen into existing grey hydrogen or natural gas systems.
• Promoting uptake in niche sectors like ceramics and chemicals.
• Public procurement of green steel to create economies of scale.

Conclusion:

While India’s long-term vision to lead the green hydrogen transition remains intact, current challenges necessitate a strategic rebalancing. Prioritising domestic demand creation, infrastructure development, and cost reduction over near-term exports will be key. If implemented effectively, India may replicate its renewable energy success, positioning itself as a global leader in green hydrogen by the next decade.

In News:

India’s increasing dependence on imports of pulses and edible oils has raised serious concerns about agricultural sustainability, trade deficits, and farmer welfare. Despite policy claims of self-reliance in agriculture, recent trends highlight structural imbalances in domestic production and pricing mechanisms, especially for pulses and oilseeds.

Farmers at the Receiving End

Farmers cultivating pulses and oilseeds, such as moong, chana, masoor, and soyabean, are struggling due to poor price realization and lack of systematic procurement at Minimum Support Prices (MSP). Rao Gulab Singh Lodhi, a farmer from Madhya Pradesh, harvested 90 quintals of moong in summer 2025. Despite an MSP of ?8,682/quintal, he had to sell his produce in the open market at ?6,000/quintal due to the absence of procurement infrastructure. Soyabean prices, too, are well below MSP, selling at ?4,100–4,200/quintal against an MSP of ?5,328 (for 2025–26).

Unlike rice and wheat, for which procurement is extensive and assured, pulses and oilseeds lack institutional support, even in regions where agro-climatic conditions favour their cultivation. This discourages farmers from growing these critical crops, despite using high-yielding and climate-resilient varieties.

Pulses: From Self-Reliance to Import Surge

India witnessed a record 7.3 million tonnes (mt) of pulses imports worth $5.5 billion in 2024–25, surpassing the previous high of 6.6 mt in 2016–17. This comes after years of reduced imports, thanks to improved domestic production which had peaked at 27.3 mt in 2021–22.

However, the El Niño-induced drought in 2023–24 brought down production to 24.2 mt, leading to higher retail inflation in pulses and prompting duty cuts on imports. While these imports helped control prices—with CPI inflation in pulses falling to –8.2% by May 2025—they also depressed mandi prices. In Maharashtra, arhar and chana are currently trading below MSPs, impacting farmer incomes.

Major pulse imports in 2024–25 included:

• 2.2 mt of yellow/white peas (Canada, Russia),
• 1.6 mt of chana (Australia),
• 1.2 mt each of arhar and masoor (Africa, Canada, Australia),
• 0.8 mt of urad (Myanmar, Brazil).

Edible Oils: Worsening Import Dependency

India’s vegetable oil imports more than doubled in a decade—from 7.9 mt in 2013–14 to 16.4 mt in 2024–25. In value terms, imports jumped from $7.2 billion to $20.8 billion, driven partly by global supply disruptions (e.g., Russia-Ukraine war) and high domestic consumption.

India now imports over 60% of its edible oil needs, with palm (7.9 mt), soyabean (4.8 mt), and sunflower oil (3.5 mt) forming the bulk. In May 2025, CPI inflation for vegetable oils stood at 17.9%. In response, the Centre slashed import duties on crude palm, soyabean, and sunflower oil from 20% to 10%, reducing the overall tariff to 16.5%.

While the move may lower consumer prices, industry bodies like the Soyabean Processors Association of India have warned it will "flood the market with cheap imports", making domestic oilseed cultivation less viable. Farmers may shift to alternative crops in the coming kharif season, further weakening India’s self-sufficiency goals.

Conclusion

India’s growing import reliance for essential food commodities like pulses and edible oils, coupled with poor farm-level price realization and weak procurement systems, undermines the objectives of food security and self-reliance. Sustainable import substitution must be driven by robust domestic production incentives, fair pricing mechanisms, and resilient procurement frameworks—especially for non-cereal crops.

Context:

The Gross Domestic Product (GDP) is the most critical metric used to measure the size and performance of a country’s economy. The "base year" is the reference year against which future GDP growth is calculated. India’s current GDP base year is 2011–12. The government, through the Ministry of Statistics and Programme Implementation (MoSPI), is now preparing to revise it to 2022–23, with the updated series to be released in February 2026.

Why GDP Base Years are Revised

Base year revisions are necessary to reflect structural changes in the economy, incorporate improved and updated data sources, and align with global statistical standards. GDP calculation, by its definition—the market value of all final goods and services produced in an economy—requires accurate, timely, and sectorally-relevant data. However, India’s economy evolves rapidly, particularly with the expansion of the services sector and changes in consumption, production, and labour patterns.

Past revisions (seven since 1948-49) reflect efforts to modernize methodology and include newer data sources, such as the shift from decennial Census-based workforce estimates to five-yearly Employment-Unemployment Surveys by the NSSO. This aligns with the National Statistical Commission’s recommendation of rebasing economic indices every five years.

The last revision occurred in 2015 (base year changed to 2011–12), following which methodological changes attracted controversy. Experts, including former Chief Economic Advisor Arvind Subramanian, argued that the revised methodology overestimated India’s GDP growth, especially in manufacturing, due to reliance on corporate database MCA-21 over the traditional Annual Survey of Industries.

Why the 2026 Revision Is Crucial

The 2026 revision comes after India missed a base year update in 2017–18 due to data-related concerns. Two key surveys—the Consumer Expenditure Survey (CES) and the Periodic Labour Force Survey (PLFS)—faced credibility and methodological challenges. The 2017-18 CES suggested rising poverty, while the PLFS showed a 45-year high in unemployment—trends contrary to government narratives. These issues led to scrapping the proposed 2017–18 base year.

Additionally, disruptive policy changes like demonetisation (2016) and the rollout of GST (2017), followed by the COVID-19 pandemic, meant the following years were not "normal" reference points. The 2022–23 base year is likely to mark the first post-pandemic stable year suitable for a revised series.

This revision is especially significant as India is poised to become the world’s third-largest economy by nominal GDP. At such a juncture, the quality, accuracy, and global credibility of GDP data will directly influence investor confidence, credit ratings, and policymaking.

The base year revision will also extend to other indicators: the Index of Industrial Production (IIP) will be revised to 2022–23, and the Consumer Price Index (CPI) to 2023–24. These changes ensure that inflation and industrial output metrics remain reflective of present-day consumption and production structures.

Conclusion

Revising the GDP base year is not merely a technical exercise—it is central to economic governance. The upcoming 2026 revision must restore faith in India's statistical systems, offer a transparent methodology, and align with international best practices. Its credibility will shape India’s economic narrative for the decade to come, both domestically and on the global stage.

In News:

The recent crash of Air India flight AI-171 in Ahmedabad, claiming 241 lives, marks the deadliest aviation accident in India in over a decade. As investigations proceed, the spotlight is on India’s aviation safety standards and regulatory preparedness, particularly the role of the Directorate General of Civil Aviation (DGCA) and India’s standing in global aviation safety audits.

India has received commendable recognition from two premier global aviation oversight bodies: the International Civil Aviation Organization (ICAO) and the US Federal Aviation Administration (FAA). These ratings assume greater relevance now, as the Aircraft Accident Investigation Bureau (AAIB) leads the probe into the Air India crash, in coordination with international stakeholders.

ICAO’s Positive Evaluation of India’s Aviation Oversight

In its 2022 audit under the Universal Safety Oversight Audit Programme (USOAP), the ICAO rated India’s overall Effective Implementation (EI) score at 85.65%, a sharp improvement from 69.95% in 2018. India outperformed the global average across all eight USOAP parameters—legislation, organisation, licensing, operations, airworthiness, accident investigation, air navigation services, and aerodromes.

In two critical areas, India scored remarkably high:

• Operations: India scored 94.02%, compared to the global average of 72.28%, and even surpassed the US (86.51%) and China (90%).
• Airworthiness: India achieved 97.06%, again ahead of the US (89.13%) and China (94.83%).

These ratings reflect significant reforms in civil aviation governance and oversight mechanisms. India’s regulatory capabilities are aligned with ICAO protocols, demonstrating strong institutional capacity to manage operational safety and technical compliance in aviation.

FAA's Endorsement: Retaining Category 1 Status

Further affirming India’s safety standards, the FAA retained India’s Category 1 status in April 2023 after a comprehensive audit in 2021 of DGCA’s oversight in aircraft operations, airworthiness, and personnel licensing. This classification means that India complies with international safety norms under the Chicago Convention and allows Indian carriers to expand operations to the US and enter into code-share agreements with American airlines.

The FAA acknowledged DGCA’s consistent improvement and commitment to safety, especially considering India’s rapid aviation growth—it is the world’s third-largest domestic aviation market and the fastest-growing among major economies.

Multinational Collaboration in Crash Investigation

In the wake of the AI-171 crash, a multi-agency probe has been launched. The AAIB, as per ICAO norms, is leading the investigation. The US National Transportation Safety Board (NTSB) and the UK’s Air Accidents Investigation Branch (AAIB-UK) are involved due to the aircraft’s American origin (Boeing), and the presence of British citizens onboard. Boeing and engine manufacturer GE will also assist in the investigation, adhering to ICAO’s investigation protocols.

Conclusion

India’s strong global safety ratings by ICAO and FAA underscore the DGCA’s enhanced regulatory performance and the country’s growing credibility in civil aviation safety. However, the tragic AI-171 crash serves as a reminder that even well-rated aviation systems must remain vigilant, responsive, and transparent—especially in post-crisis investigations.

In News:

India’s textiles and apparel (T&A) sector is one of its oldest and most employment-intensive industries, contributing 2.3% to GDP and employing over 45 million people, making it the second-largest employer after agriculture. Despite this, India’s share in global apparel trade has remained stagnant at around 3% for two decades—far below its potential. With global apparel trade at $529.3 billion, India’s contribution stands at just $15.7 billion, and the ambitious target of $40 billion in exports by 2030 remains distant unless bold structural reforms are initiated.

Structural Challenges

The fragmentation of the industry is a major bottleneck. Over 80% of apparel units are MSMEs, operating with limited scale, informal labour, and poor integration. In contrast, countries like China, Vietnam, and Bangladesh have achieved scale by setting up large, export-oriented factories or coordinated "buying houses" to pool capacity.

India’s cost of capital (≈9%) also hampers competitiveness, compared to 3–4.5% in China and Vietnam. Further, rigid labour laws, such as mandatory 2x overtime pay, discourage formal employment. Supply chains are dispersed, increasing delivery timelines and logistics costs. These issues are compounded by low female labour force participation, despite women comprising 70% of the workforce in leading apparel hubs.

Success Story: Shahi Exports

The example of Shahi Exports illustrates what is achievable with scale, professionalism, and inclusive practices. From a 15-member unit in 1974, it has evolved into India’s largest apparel exporter, employing over 100,000 workers (70% women) across 50+ factories in 8 states, with over $1 billion in revenue. It shows that Indian firms can scale and compete globally, but organic growth alone is too slow to meet national export goals.

Policy Reforms: A Way Forward

To unlock the sector’s full potential, transformative policy measures are required:

• Capital Access for Scale: A 25–30% capital subsidy and a 5–7 year tax holiday for units with 1,000+ machines would help achieve viable scale. Linking incentives to size, as proposed under PLI 2.0, is essential.
• Flexible Labour Norms: Labour reforms, such as rationalising overtime pay to 1.25x (ILO standard), and easing compliance can encourage formal hiring. Linking MGNREGA funds (25–30%) to wage subsidies in garment units can promote productive, formal employment.
• Skilling for Demand: Schemes like SAMARTH should be expanded for short-cycle, demand-driven training, especially for women and youth, to bridge the skills gap in the sector.
• Cluster-Based Development: At least two PM MITRA Parks should be designated as garment hubs in labour-abundant, low-cost states like Uttar Pradesh and Madhya Pradesh to reduce migration, cut costs, and promote inclusive industrialisation.
• Export-Linked Incentives (ELI): Shift from production-linked to export-linked schemes that reward global competitiveness, not just output.

Conclusion

The apparel sector offers a rare opportunity to generate mass employment, promote inclusive growth, and boost exports. But without scale, reforms, and a strategic policy shift, the $40 billion export dream will remain elusive. India must act swiftly to replicate success stories like Shahi Exports, not over decades, but within years. The time for bold policy innovation is now.

In News:

According to the latest World Bank estimates, India’s extreme poverty has sharply declined from 27.1% in 2011-12 to 5.3% in 2022-23, based on an updated $3/day consumption threshold adjusted for 2021 purchasing power parity (PPP). In absolute terms, the number of extremely poor people has reduced from 344.47 million to 75.24 million, indicating 269 million people were lifted out of extreme poverty during this period.

The progress is more striking when viewed under the previous poverty line of $2.15/day (2017 prices). Under this standard, the extreme poverty rate fell from 16.2% to 2.3%, translating to a drop in the number of poor from 205.93 million to 33.66 million—a reduction of 172 million individuals.

Even as the poverty threshold was raised globally, India managed to outperform most developing countries. The lower-middle-income (LMIC) poverty rate, measured at a higher threshold of $4.20/day, also fell substantially—from 57.7% in 2011-12 to 23.9% in 2022-23. This decline reduced the number of people under LMIC poverty from 732.48 million to 342.32 million over 11 years.

The fall in poverty occurred despite high inflation during the decade. When adjusted for domestic inflation, even the $3/day threshold (new benchmark) is higher than the inflation-adjusted $2.60/day from previous estimates, making the achievement more credible.

The World Bank estimates also reveal stark differences in poverty distribution:

• The top five populous states—Uttar Pradesh, Maharashtra, Bihar, West Bengal, and Madhya Pradesh—accounted for 65% of extreme poverty in 2011-12, but still made up 54% in 2022-23.
• Rural India still shows significant poverty, with 90% of rural individuals reporting average monthly per capita expenditures below Rs 5,763, and the bottom 5% class spending just Rs 1,677.
• Urban poverty is relatively lower, with 25.78% in the bottom 40%, compared to 45.44% in rural areas.
• Educational attainment remains a strong poverty determinant; in 2022-23, 35.1% of Indians without schooling lived below the LMIC poverty line, compared to 14.9% with post-secondary education.

In terms of non-monetary deprivation, India also recorded improvement. As per the Multidimensional Poverty Index (MPI), which considers factors such as access to education, electricity, water, and sanitation, multidimensional poverty fell from 53.8% in 2005-06 to 15.5% in 2022-23. NITI Aayog estimates it to be 11.28%, down from 29.17% in 2013-14.

To ensure continued tracking, NITI Aayog is planning a new income-based extreme poverty measure with broader consultation. Meanwhile, the Household Consumption Expenditure Survey (HCES) 2023-24 indicates a 45.4% rise in rural consumption and 38% in urban consumption, reinforcing the World Bank’s findings.

Conclusion

India’s remarkable poverty reduction over the last decade reflects successful economic reforms, social welfare schemes, and increased consumption. However, regional, educational, and rural-urban disparities persist, necessitating continued policy focus, data refinement, and inclusive growth strategies.

In News:

The launch of the Vande Bharat Express between Katra and Srinagar by Prime Minister Narendra Modi marks a transformative chapter in Jammu and Kashmir’s infrastructural journey. The long-awaited completion of the Udhampur-Srinagar-Baramulla Rail Link (USBRL) is not merely a technological feat, but a symbol of national integration, economic upliftment, and inclusive development in the Kashmir Valley.

Historical Background

The evolution of rail connectivity in Jammu and Kashmir dates back to the colonial era when, in 1897, a 40–45 km rail line linked Jammu to Sialkot (now in Pakistan). Subsequent plans to extend railways to Srinagar in the early 20th century were shelved. After the 1947 Partition, Jammu was cut off from the rail grid as Sialkot became part of Pakistan. The region had to wait until 1975 for the inauguration of the Pathankot–Jammu line. The Jammu–Udhampur line, started in 1983, was completed only in 2004.

In 1994, the rail project was further extended to include Srinagar and Baramulla, and the USBRL was declared a national project in 2002, with the initial estimated cost of ?2,500 crore.

USBRL: Engineering Triumph

The fully operational 272 km USBRL has been completed at a revised cost of ?43,780 crore. It includes 36 tunnels, 943 bridges, and several record-setting engineering marvels in the seismically active, snow-covered terrain of the Shivalik and Pir Panjal ranges.

• Chenab Bridge: The world’s tallest railway arch bridge, 359 meters above the riverbed, surpassing even the Eiffel Tower. Designed to withstand wind speeds of 260 km/h and extreme temperatures, it spans 1,315 meters and has a life expectancy of 120 years.
• Anji Khad Bridge: India’s first cable-stayed rail bridge, located in Reasi, towers 331 meters above the river and stretches 725 meters. Its iconic inverted Y-shaped pylon is supported by 96 high-tensile cables.
• Tunnel T-49: At 12.77 km, it is India’s longest transport tunnel, located in Ramban district, designed to ensure seamless all-weather connectivity.

Strategic and Socio-Economic Significance

This rail link is a game-changer for the region. By reducing Katra–Srinagar travel time to just 3 hours, it ensures year-round, all-weather accessibility, even during harsh Himalayan winters. The connectivity is critical not only for civilians but also for the rapid movement of security personnel in this strategically sensitive region.

Economically, the rail link is poised to boost trade and tourism. It will facilitate the quicker and more cost-effective transport of local produce such as apples, walnuts, saffron, pashmina, and handicrafts, thereby integrating the Valley with national markets. Reduced logistics costs will also lower the prices of essential goods imported into Kashmir.

Way Forward

The upcoming extension to Jammu Tawi aims to further enhance nationwide connectivity to Srinagar. This project stands as a testament to India’s commitment to inclusive development, national unity, and strategic infrastructure in border regions. With its blend of engineering excellence and socio-political impact, the USBRL reinforces the vision of a Viksit Bharat that leaves no region behind.

In News:

India, which hosts over 70% of the world’s wild tiger population, holds a dual responsibility of pride and stewardship. The near-collapse of tiger numbers in 2006, with populations falling to around 1,400 and local extinctions in Sariska and Panna, prompted a national awakening. Strengthened interventions such as the formation of the National Tiger Conservation Authority (NTCA) and Project Tiger rejuvenation efforts helped India register over 3,600 tigers in the 2023 census, reflecting significant progress.

From Crisis to Recovery: Institutional Response

The disappearance of tigers due to poaching, habitat degradation, and poor monitoring led to structural reforms post-2006. The NTCA (established in 2005) ensured stricter protocols, better surveillance, and habitat restoration. India now boasts 53 Tiger Reserves, with central and southern states like Madhya Pradesh, Karnataka, and Uttarakhand emerging as conservation success stories.

Emerging Challenge: Prey Base Decline

Despite rising tiger numbers nationally, several reserves in eastern and central India—such as Guru Ghasidas, Indravati, Udanti-Sitanadi (Chhattisgarh), Palamau (Jharkhand), and Simlipal and Satkosia (Odisha)—have shown worrying trends of tiger decline. The core issue is not direct poaching but the fall in prey density, especially species like chital, sambar, and gaur. Scientific evidence indicates that tiger viability is closely tied to prey abundance, with a threshold of at least 10–15 prey animals per sq km required for stable populations.

Socioeconomic Roots of Ecological Depletion

Many affected reserves lie in poverty-stricken tribal regions. In the absence of alternative protein sources and sustainable livelihoods, communities turn to bushmeat hunting using traditional snares and traps. This not only reduces herbivore populations but also threatens predator survival. Palamau Reserve is a stark example where both large herbivores and tigers have nearly vanished under such pressures.

Institutional Recommendations and Ecological Restoration

The NTCA-WII 2023 report recommends short-term herbivore breeding enclosures but recognizes their limitations in rewilding success. A sustainable solution lies in habitat quality enhancement and involving communities in conservation. Some reserves still retain dense forests, providing an ecological foundation for revival. The decline of left-wing extremism in many areas also opens avenues for focused conservation interventions.

Towards Inclusive Conservation: Eco-Tourism and Livelihoods

Prosperous reserves like Bandhavgarh and Ranthambore benefit from conservation-linked tourism and community participation. In contrast, remote and underdeveloped areas lack such economic linkages. Promoting inclusive eco-tourism, skill development, and income-generation activities—such as SHGs, poultry farming, and forest produce marketing—can transform local attitudes.

Way Forward: Integrated, People-Centric Approaches

India must adopt multidimensional strategies combining ecological, institutional, and social measures:

• Implement prey recovery plans in Tiger Conservation Plans (TCPs).
• Provide targeted funding and technical support to underperforming states.
• Restore grasslands, ensure wildlife corridors, and adopt technology (drones, AI) for monitoring.
• Recognize community forest rights, promote Gram Sabha governance, and expand MGNREGA to conservation-linked jobs.

Conclusion

India’s tiger conservation success is laudable but remains precarious if prey depletion continues unchecked. The path ahead demands a shift from protectionism to participatory conservation—rooted in equity, ecological integrity, and community empowerment. The survival of the tiger is not merely a wildlife concern, but a test of India’s commitment to sustainable development and inclusive environmental governance.

In News:

In a landmark medical feat, a nine-month-old American boy, Kyle “KJ” Muldoon Jr., became the first known human to be successfully treated using base editing, a next-generation gene editing technique derived from CRISPR-Cas9. KJ was born with Carbamoyl Phosphate Synthetase I (CPS1) deficiency, a rare genetic disorder that disrupts nitrogen breakdown, leading to toxic ammonia buildup—known as hyperammonemia—which can be fatal if untreated.

From CRISPR-Cas9 to Base Editing: Evolution of Gene Editing Tools

CRISPR-Cas9, developed in 2012 by Jennifer Doudna and Emmanuelle Charpentier, revolutionized biotechnology and earned them the 2020 Nobel Prize in Chemistry. Modeled after a microbial immune system, CRISPR works by creating “genetic memory”—capturing viral DNA and guiding the Cas9 enzyme, which acts as molecular scissors, to target and cut specific DNA sequences. This enables scientists to eliminate or repair faulty genes by inducing a double-strand break followed by insertion of a corrected DNA sequence.

However, the double-strand break mechanism raised concerns about unintended genetic consequences. Enter base editing, a refined tool that modifies single DNA bases—the letters A, T, C, G—without cutting both strands of the DNA. Instead of scissors and glue, base editing works like a pencil and eraser, replacing one incorrect base pair with the correct one using a fusion of Cas9 and a base-modifying enzyme. In KJ’s case, the specific base mispair causing CPS1 deficiency was successfully corrected using this technique.

Advantages of Base Editing

• Precision and Safety: Avoids double-strand breaks, reducing off-target effects.
• Compactness: Easier to deliver to cells via viral vectors.
• No foreign DNA: Eliminates need for donor DNA insertion.
• Customisation: Suitable for diseases caused by single-nucleotide mutations.

Challenges: Economic, Ethical, and Regulatory

Despite its promise, base editing faces several bottlenecks:

• Cost and Accessibility: The procedure is prohibitively expensive—estimated in the range of hundreds of thousands of dollars—and was funded by research institutions and biotech firms in KJ’s case.
• Scalability: The therapy was custom-designed for KJ’s specific mutation, limiting its use for others. Such personalised medicine lacks the economies of scale that attract pharmaceutical investment.
• Regulatory hurdles: Countries like India face issues of bureaucratic red tape and outdated ethical frameworks that delay the deployment of advanced genomic therapies.
• Ethical concerns: As the technology becomes more powerful, there are concerns about misuse, eugenics, and the potential editing of germline cells.

Conclusion

KJ’s treatment marks a paradigm shift in personalised medicine, highlighting the transformative potential of base editing in addressing rare and otherwise untreatable genetic disorders. However, wider application requires systemic reforms in bioethics, regulatory frameworks, and healthcare infrastructure. To ensure equitable access, future efforts must focus on cost reduction, public funding, global collaboration, and ethical oversight. If successfully scaled, base editing could revolutionise medicine for millions suffering from rare genetic diseases.

In News:

Medium enterprises (MEs), a vital yet under-recognized segment of India’s MSME ecosystem, have long faced significant challenges, especially in accessing affordable and timely credit. Though they constitute only about 0.3% of registered MSMEs, medium enterprises contribute nearly 40% of MSME exports, highlighting their critical role in India’s industrial growth and global trade competitiveness.

Significance of Medium Enterprises in the Indian Economy

The MSME sector as a whole contributes around 29% to India’s GDP and employs over 60% of the workforce. However, while micro and small enterprises dominate in number (97% and 2.7% respectively), medium enterprises represent a minuscule share by count but a disproportionately large share in exports and innovation. Medium enterprises have a turnover range of ?100–500 crore and investment in plant and machinery between ?25–125 crore, as per the revised FY26 classification norms announced in the Union Budget 2025-26.

Credit Gap and Financing Challenges

NITI Aayog’s 2025 report, Designing Policy for Medium Enterprises, reveals a credit deficit of approximately $10 billion faced by medium enterprises. This gap stems from institutional biases and structural constraints. Unlike micro units that benefit extensively from priority sector lending, medium enterprises receive fewer such loans and face borrowing costs about 4% higher than those for large companies. Moreover, out of 18 government MSME schemes, only 8 specifically target medium enterprises, which receive less than 18% of total scheme funds (?5,442 crore overall). The absence of dedicated working capital schemes exacerbates liquidity issues, limiting growth and scale-up prospects.

NITI Aayog’s Key Policy Recommendations

• Working Capital Financing Scheme: A sector-specific loan scheme, administered by the Ministry of MSME, is proposed to provide medium enterprises with working capital loans capped at ?25 crore, with individual requests up to ?5 crore. Loans would be linked to enterprise turnover and offered at concessional interest rates, addressing their substantial capital needs.
• Medium Enterprise Credit Card: To meet immediate liquidity requirements—such as payroll, inventory, and equipment maintenance—a credit card facility with a pre-approved limit of ?5 crore is recommended. This facility would follow market interest rates but include a repayment grace period.
• Expedited Credit Disbursal via Retail Banks: Leveraging local retail banks for faster fund distribution under MSME ministry supervision aims to reduce bureaucratic delays and enhance timely access to credit.
• Technology and Skilling Initiatives: The report advocates transforming existing MSME technology centres into ‘India MSME 4.0 Competence Centres’ tailored to sectoral and regional demands, spanning industries like engineering, electronics, and specialized manufacturing. It also proposes incorporating medium enterprise-specific modules into entrepreneurship training and skilling programmes to bridge labour skill mismatches.
• Digital Access and Compliance Support: NITI Aayog recommends creating a dedicated sub-portal within the Udyam platform that facilitates scheme discovery, compliance guidance, and AI-powered navigation to help medium enterprises efficiently access government resources.

Broader Structural Challenges

Apart from financing, medium enterprises face low adoption of advanced technologies, limited R&D support, inadequate sector-specific testing infrastructure, and a disconnect between training programmes and industry needs. These gaps impede innovation and scalability.

Strategic Importance and Policy Outlook

NITI Aayog emphasizes that medium enterprises have the potential to be major employment generators and innovation drivers if provided focused policy attention and financial support. Drawing lessons from global examples like Germany’s Mittelstand and Italy’s fashion industry, the report envisions India’s medium enterprises evolving into globally competitive firms over the next decade.

The medium sector’s formal labour structure also makes it key to transitioning India’s economy from informal to formal. Therefore, a coordinated and inclusive policy framework focusing on finance, technology, skill development, and digital infrastructure is vital to unlock this segment’s full potential and enhance India’s industrial competitiveness, export growth, and self-reliance.

In News:

In a significant milestone for the Indian economy, India has officially surpassed Japan to become the 4th largest economy in the world in nominal GDP terms, as per the IMF World Economic Outlook (April 2025). According to NITI Aayog CEO B.V.R. Subrahmanyam, India’s GDP now stands at $4.19 trillion, marginally higher than Japan’s $4.18 trillion. This marks a historic moment, reflecting a shift in the global economic order and reaffirming India's rising stature on the world stage.

From Fifth to Fourth: A Decade of Accelerated Growth

India’s economic rise has been particularly notable over the past decade. From a GDP of $2 trillion in 2014, India has more than doubled its output to cross the $4 trillion mark in 2025. This rapid expansion has also been accompanied by a sharp rise in per capita income, which has grown from $1,438 in 2014 to $2,880 in 2025. In global rankings, India moved from the 5th position in 2024 to 4th in 2025, overtaking Japan and trailing only the United States, China, and Germany.

Factors Driving the Surge

India’s ascent is the result of multiple structural reforms and policy initiatives undertaken in recent years. Programs such as Digital India, Atmanirbhar Bharat, and the Production Linked Incentive (PLI) scheme have enhanced domestic manufacturing, boosted digital infrastructure, and encouraged self-reliance. The government’s focus on ease of doing business, tax reforms (GST, corporate tax rationalisation), and large-scale infrastructure investment under schemes like Gati Shakti have further catalysed growth.

Despite global trends towards supply chain diversification and reshoring, India continues to attract foreign companies due to its cost-effective labor, large consumer base, and improving logistics. For instance, companies like Apple continue to expand their operations in India, viewing it as a reliable manufacturing hub.

Strategic and Geopolitical Implications

India’s new economic position carries significant geopolitical weight. As the 4th largest economy, India’s influence in global financial institutions, climate negotiations, trade partnerships, and multilateral forums such as G20 and BRICS is set to grow. The achievement enhances investor confidence, thereby potentially increasing foreign direct investment (FDI) inflows.

Domestically, this growth presents an opportunity for addressing structural issues such as unemployment, regional disparities, and income inequality. The challenge ahead lies in ensuring that growth remains inclusive, sustainable, and innovation-driven.

Future Outlook

According to NITI Aayog, India is poised to surpass Germany within the next 2.5–3 years, potentially becoming the third-largest economy globally. For this, sustaining macroeconomic stability, boosting exports, enhancing skill development, and transitioning to a green economy will be crucial.

Conclusion

India’s rise to the 4th largest economy marks a defining moment in its development trajectory. It reflects not just statistical growth, but also the success of structural reforms, demographic potential, and policy resilience. As India prepares for its next leap, balancing economic dynamism with social equity will be the key to truly becoming a global economic leader.

In News:

In the Union Budget 2025–26, the Finance Minister proposed a significant policy shift by increasing the investment and turnover limits for MSME classification by 2.5 and 2 times respectively. This move is expected to enhance the growth prospects and scalability of India’s micro, small, and medium enterprises (MSMEs).

Economic Significance:

The MSME sector forms the backbone of the Indian economy, contributing 30% to the GDP and nearly 45% to manufacturing output. With over 1 crore registered units employing 7.5 crore people, it is the largest source of non-agricultural employment in the country. It plays a pivotal role in inclusive development, offering livelihood opportunities to the rural, urban poor, and semi-skilled workforce.

The formalization drive has been significant, with over 4 crore MSMEs registered on the Udyam portal by March 2024. Key schemes like PM Vishwakarma Yojana (?13,000 crore) and Mudra Yojana (?5.41 lakh crore disbursed in FY24) have supported artisans and first-time entrepreneurs, particularly women and marginalized communities.

Boost to Trade and Innovation:

MSMEs account for 45.73% of India’s total exports in sectors like textiles, leather, and engineering goods. Their integration into Global Value Chains (GVCs) is being facilitated by reforms in trade logistics, the GeM portal, and PLI schemes. Digital transformation is advancing rapidly, with 72% MSME transactions now digital, supported by platforms like ONDC and the RBI’s Public Tech Platform.

Women and Rural Empowerment:

Women entrepreneurs constitute 20.5% of Udyam registrations, and 68% of Mudra loans benefit them. MSMEs are also catalyzing rural industrialization by promoting agro-processing and curbing rural-urban migration through schemes like the SRI Fund and Animal Husbandry Credit Guarantee Scheme.

Key Challenges:

Despite their potential, MSMEs face critical bottlenecks:

• Credit access remains limited; only 20% of units access formal finance. Payment delays amounting to ?10.7 lakh crore (2022) hinder working capital.
• Regulatory burdens, inadequate infrastructure, and poor digital skills further constrain productivity.
• Low awareness of schemes and limited integration into global ESG standards affect competitiveness.
• The sector remains largely informal, weakening labor rights and policy outreach.

Recent Reforms & Recommendations:

To unlock MSMEs’ potential, a multi-pronged reform strategy is underway:

• Credit Measures: Promotion of cash-flow based lending, expansion of CGTMSE, Vyapar Credit Cards, and enhanced TReDS-GeM integration.
• Ease of Doing Business: Single-window clearances, self-certification, and stronger MSME facilitation councils.
• Digital & Skill Upgradation: Launch of Digital MSME 2.0, apprenticeship hubs, and innovation incubators.
• Market Access: Expansion of cluster-based models, branding support, and ONDC-GeM integration.
• Green MSMEs: ESG-linked credit, circular economy incentives, and green certifications.
• Formalization Push: Linking benefits to Udyam registration, backed by SIDBI-led equity support.

Conclusion:
MSMEs are central to India’s vision of a $5 trillion economy and Viksit Bharat by 2047. With increased investment thresholds, focused policy interventions, and digital empowerment, India can build a resilient, inclusive, and globally competitive MSME ecosystem.

In News:

A recent scientific study has revealed that the eastern Himalayas in Arunachal Pradesh have lost 110 glaciers between 1988 and 2020, highlighting a critical impact of climate change in the region.

Key Findings of the Study

• Glacier Loss: The number of glaciers declined from 756 to 646 over 32 years.
• Glacial Area Reduction: Total glacial cover reduced from 585.23 sq. km to 309.85 sq. km, indicating a loss of over 47%.
• Retreat Rate: Glaciers retreated at a rate of 16.94 sq. km per year.
• Elevation: Most glaciers were located at 4,500–4,800 metres above mean sea level on north-facing slopes of 15°–35°.
• Remote Sensing & GIS: The study used advanced tools along with the Randolph Glacier Inventory to track and analyze glacier boundaries.
• Glacial Lakes: Retreat has led to the formation of numerous glacial lakes, increasing the risk of Glacial Lake Outburst Floods (GLOFs), as seen during the 2023 Sikkim disaster which killed at least 55 people and damaged a 1,200 MW Teesta hydropower project.

Causes of Glacial Retreat

• Climate Change:
  • The eastern Himalayas are warming faster than the global average.
  • Temperature rise: Between 0.1°C and 0.8°C per decade.
  • Over the last century, the region has experienced an increase of ~1.6°C.
  • By 2100, projections indicate a 5–6°C temperature rise and 20–30% increase in precipitation.
• Black Carbon Deposition: Emissions from human activities (e.g., vehicles, biomass burning) deposit soot on ice, reducing reflectivity (albedo) and increasing heat absorption.
• Erratic Snowfall Patterns: Changes in precipitation reduce snow accumulation, weakening glacier sustenance.
• Geological Factors: Local topography, altitude, and rock composition also influence glacier stability and response to warming.

Implications of Glacial Retreat

• Water Security
  • The Himalayas are known as the ‘Third Pole’, storing the largest volume of ice outside the polar regions.
  • They are vital for sustaining over 1.3 billion people in South Asia by feeding major rivers (Indus, Ganga, Brahmaputra).
  • Glacial retreat threatens long-term freshwater availability, agriculture, and urban water supplies.
• Hydropower and Infrastructure
  • Changing river flow patterns due to glacial melt affect hydropower generation and irrigation systems.
  • Risk of infrastructure damage from GLOFs is rising.
• Biodiversity and Agriculture: Altered ecosystems and climatic stress impact Himalayan biodiversity and disrupt traditional farming practices.

Himalayan Glaciers and River Systems

• Indus Basin: Originates from Lake Mansarovar; flows through Ladakh and Pakistan.
• Ganga Basin: Emerges from Gangotri Glacier in Uttarakhand; forms the Ganga after merging with Alaknanda.
• Brahmaputra Basin: Rises near Kailash range in Tibet; flows through Arunachal Pradesh, Assam, and Bangladesh.

Major Glaciers in India

Glacier                  Region              Importance

Siachen                Ladakh               Longest glacier in India (76 km)

Gangotri             Uttarakhand        Source of the Ganga

Yamunotri          Uttarakhand        Origin of the Yamuna

Zemu                  Sikkim                 Largest glacier in Eastern Himalayas

Rathong             Sikkim                 Feeds Teesta River

Milam                Uttarakhand         Source of Goriganga River

Pindari               Uttarakhand         Glacial trekking route

Glacial Lake Outburst Floods (GLOFs)

• GLOFs are sudden discharges of water from glacial lakes, often caused by moraine dam failures.
• These can trigger catastrophic downstream floods, threatening lives, infrastructure, and ecosystems.

Mitigation and Adaptation Strategies

• Climate Action: Drastic cuts in greenhouse gas emissions at national and global levels.
• Sustainable Water Management: Enhance glacier-fed river basin planning.
• Disaster Risk Reduction: GLOF early-warning systems, resilient infrastructure, and relocation policies.
• Community Participation: Local awareness, traditional knowledge integration, and eco-restoration efforts.
• International Cooperation: Transboundary initiatives under frameworks like the HKH (Hindu Kush Himalaya) Monitoring Network and UNFCCC.

In News:

In January 2025, the Reserve Bank of India (RBI) announced its largest monetary easing since the COVID-19 pandemic, unveiling a multi-pronged plan to inject over ?1.5 lakh crore into the money markets.

This move aims to address liquidity shortfalls caused by RBI’s forex interventions and signal possible easing in the upcoming monetary policy review.

Context: Why Liquidity Infusion Was Needed

• Forex Intervention: RBI sold over $50 billion from its foreign exchange reserves to stabilise the rupee, in response to large-scale equity sell-offs by Foreign Institutional Investors (FIIs).
• Impact: These interventions reduced rupee liquidity, tightened short-term interest rates, and raised borrowing costs.
• Liquidity Deficit: Market estimates pegged the shortfall at ?3 lakh crore.

Key Liquidity Measures Announced by RBI

• Government Bond Buy-Back: ?60,000 Crore
  • Conducted in three tranches on January 30, February 13, and February 20, 2025.
  • Objective: To inject liquidity into the banking system by repurchasing government securities before maturity.
• 56-Day Variable Rate Repo Auction: ?50,000 Crore
  • Scheduled for February 7, 2025.
  • Enables banks to borrow short-term funds by offering government securities as collateral at a market-determined interest rate.
• USD/INR Buy-Sell Swap Auction: $5 Billion
  • A six-month forex swap in which RBI borrows dollars in exchange for rupees and agrees to buy them back later.
  • Helps stabilize the rupee without draining rupee liquidity.

Significance of the Measures

• Monetary Transmission: With adequate liquidity, any potential repo rate cut will be more effectively transmitted through lower lending rates, boosting investment and consumption.
• Financial Stability: By calming money markets and moderating borrowing costs, RBI strengthens confidence amid global uncertainties.
• Rupee Management without Liquidity Squeeze: The forex swap allows rupee liquidity to remain intact while addressing exchange rate volatility.

Governor’s Focus Areas:

In a meeting with private sector bank heads ahead of the February monetary policy review, RBI Governor Sanjay Malhotra highlighted the following priorities:

• Financial Stability & Inclusion
• Enhanced Digital Literacy and Credit Access
• Improved Customer Service & Grievance Redressal
• Cybersecurity & IT Risk Management
• Monitoring of Third-party Service Providers
• Countering Rising Digital Fraud

In News:

Union Minister for Finance and Corporate Affairs Smt Nirmala Sitharaman presented Union Budget 2025-26 in the Parliament.

Key Highlights:

Fiscal Policy and Macroeconomic Indicators

• Total Expenditure: ?50.65 lakh crore
• Total Receipts (excl. borrowings): ?34.96 lakh crore
• Fiscal Deficit: 4.4% of GDP
• Gross Market Borrowing: ?14.82 lakh crore
• Capital Expenditure: ?11.21 lakh crore (3.1% of GDP)

Agriculture and Allied Sectors

• Prime Minister Dhan-Dhaanya Krishi Yojana: 100 low-productivity districts targeted; 1.7 crore farmers to benefit.
• Mission for Aatmanirbharta in Pulses: 6-year mission on Tur, Urad, and Masoor; NAFED/NCCF to procure for 4 years.
• Vegetables & Fruits Program: Comprehensive initiative for production, pricing, processing, and logistics.
• Makhana Board: New board in Bihar for production, value addition, and export.
• National Mission on High Yielding Seeds: To commercialize over 100 high-yielding seed varieties.
• Cotton Mission: 5-year initiative to boost productivity and Extra Long Staple (ELS) varieties.
• Fisheries: New EEZ and High Seas Framework focusing on Islands.
• Credit through KCC: Loan limit increased from ?3 lakh to ?5 lakh.
• Urea Plant in Assam: New plant at Namrup (12.7 lakh MT annual capacity).

MSMEs and Startups

• MSME Classification: Investment and turnover limits doubled (2.5x & 2x).
• Credit Cards for Micro Units: ?5 lakh limit; 10 lakh cards in year one.
• ?10,000 Cr Fund of Funds for Startups
• First-Time Entrepreneurs Scheme: Loans up to ?2 crore for 5 lakh women, SC/ST entrepreneurs.
• Footwear & Leather Sector Scheme: Aims ?4 lakh crore turnover and 22 lakh jobs.
• Toy Manufacturing Support: High-quality, eco-friendly toy ecosystem.
• Food Tech Institute: To be established in Bihar.
• National Manufacturing Mission: Across small, medium, and large units.

Infrastructure and Investment

• PPP Pipeline: 3-year project pipeline to be announced.
• ?1.5 lakh crore 50-year interest-free loans to states for CapEx.
• Urban Challenge Fund: ?1 lakh crore outlay; ?10,000 crore for FY26.
• Asset Monetization Plan 2025–30: Capital recycling worth ?10 lakh crore.
• Jal Jeevan Mission: Extended to 2028 with enhanced outlay.
• UDAN 2.0: Targeting 120 new destinations, 4 crore passengers in 10 years.
• Maritime Development Fund: ?25,000 crore; up to 49% govt contribution.
• Nuclear Energy Mission: ?20,000 crore outlay for Small Modular Reactors (SMRs).
• Greenfield Airports: Announced for Bihar.

Welfare and Social Security

• Saksham Anganwadi & Poshan 2.0: Enhanced nutritional cost norms.
• Medical Education: 10,000 new MBBS seats; 75,000 in 5 years.
• Day Care Cancer Centres: In all district hospitals; 200 in FY26.
• PM SVANidhi Revamp: ?30,000 UPI-linked credit cards.
• Online Platform Workers: E-Shram ID, PMJAY coverage.
• Urban Livelihood Scheme: For sustainable urban worker incomes.

Education and Skilling

• 50,000 Atal Tinkering Labs: Govt schools in 5 years.
• Bharatiya Bhasha Pustak Scheme: Digital books in Indian languages.
• National Skilling Centres of Excellence: With global partners.
• AI in Education: Centre of Excellence with ?500 crore outlay.
• IIT Expansion: Additional capacity for 6,500 students.

Innovation and R&D

• ?20,000 crore Innovation Fund (private-led R&D).
• Deep Tech Fund of Funds: For next-gen startups.
• PM Research Fellowships: 10,000 fellowships with higher support.
• 2nd Gene Bank: 10 lakh germplasm lines for food security.
• National Geospatial Mission
• Gyan Bharatam Mission: Conservation of 1 crore+ manuscripts.

Exports and Trade

• Export Promotion Mission: With ministerial and sectoral targets.
• BharatTradeNet (BTN): Unified platform for trade finance and docs.
• GCC Framework: Promote Global Capability Centres in Tier-2 cities.

Financial Sector Reforms

• FDI in Insurance: Raised from 74% to 100% for domestic investment.
• NaBFID Credit Enhancement Facility: For infra bonds.
• Grameen Credit Score: For SHGs and rural borrowers.
• Investment Friendliness Index: To rank states in 2025.
• Jan Vishwas Bill 2.0: Decriminalization of 100+ provisions.
• Tonnage Tax Extended: To inland vessels.
• Startups: Tax benefit eligibility extended to incorporation by 1 April 2030.

Taxation Reforms

Direct Taxes

• No Personal Tax: Income up to ?12 lakh (?12.75 lakh for salaried) under new regime.
• Revised Tax Slabs (New Regime):
  • 0–4L: Nil | 4–8L: 5% | 8–12L: 10%
  • 12–16L: 15% | 16–20L: 20% | 20–24L: 25% | 24L+: 30%
• Standard Deduction: ?75,000
• Compliance Relief: Trusts registration extended to 10 years.
• TDS/TCS Rationalization: Fewer thresholds, higher limits for senior citizens and rent.
• Tax Certainty: Safe harbour rules, startup extensions, presumptive taxation for electronics.