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GS Paper: GS2

  • Linked civilizations, a modern strategic partnership

    Introduction

    India and Iran represent two ancient civilisations whose interaction predates modern statecraft. Their relationship, rooted in linguistic, cultural, and philosophical exchanges, has endured political upheavals and geographic separation. In the contemporary era, shared economic needs, energy complementarities, and regional security concerns are transforming this civilisational bond into a strategic partnership. This has implications for Eurasian connectivity, West Asian stability, and Asia’s emerging multipolar order.

    Why in the News

    India-Iran relations have acquired renewed strategic salience as global geopolitics shift towards multipolarity and regional connectivity becomes central to economic and security architectures. The strategic importance of the Chabahar Port and the International North-South Transport Corridor (INSTC), offering a 40% shorter and 30% more cost-efficient route than the Suez Canal, marks a significant departure from earlier episodic engagement.

    How do civilisational links shape modern India-Iran relations?

    1. Shared cultural heritage: Reflects deep historical ties through linguistic, religious, and philosophical exchanges between the Indo-Gangetic plains and the Iranian plateau.
    2. Literary synthesis: Enabled the development of Indo-Persian literary traditions, including the Sabk-e-Hindi style in Persian poetry.
    3. Intellectual legacy: Produced enduring figures such as Mirza Abdul-Qadir Bedil Dehlavi, shaping Persian literary and philosophical thought.
    4. Cultural continuity: Sustained trust and mutual recognition despite political disruptions and geopolitical distance.

    Why is economic pragmatism driving a renewed partnership?

    1. Geopolitical transition: Aligns bilateral engagement with a multipolar global order and Asia’s rising economic weight.
    2. Trade diversification: Reduces overdependence on conventional trade routes vulnerable to geopolitical shocks.
    3. Financial innovation: Strengthens local-currency trade mechanisms to mitigate exposure to external financial constraints.
    4. Long-term stability: Anchors economic cooperation in structural complementarities rather than short-term transactions.

    How does energy security form a central pillar of cooperation?

    1. Energy demand: Supports India’s growing energy needs amid rising industrial and economic expansion.
    2. Hydrocarbon reserves: Positions Iran as a natural long-term supplier of oil and gas.
    3. Supply diversification: Reduces India’s vulnerability to regional disruptions and market volatility.
    4. Strategic alignment: Integrates energy cooperation with broader economic and connectivity frameworks.

    Why is connectivity central to India-Iran strategic convergence?

    1. Chabahar Port: Enhances India’s access to Afghanistan, Central Asia, and Eurasia while bypassing geopolitical chokepoints.
    2. INSTC integration: Connects India to Russia and Northern Europe through a multimodal corridor.
    3. Efficiency gains: Provides a route 40% shorter and 30% more cost-effective than the Suez Canal.
    4. Eurasian competitiveness: Strengthens both countries’ positions in transcontinental trade networks.

    What role does security cooperation play in bilateral ties?

    1. Shared threats: Addresses extremism and terrorism affecting West and South Asia.
    2. Intelligence coordination: Facilitates discreet but essential cooperation to counter non-state threats.
    3. Strategic autonomy: Enables both states to manage third-party pressures without compromising core interests.
    4. Regional stability: Anchors cooperation in mutual interest rather than alliance politics.

    How can technology and knowledge sectors deepen engagement?

    1. IT cooperation: Leverages India’s comparative advantage in information technology.
    2. Advanced sciences: Expands collaboration in nanotechnology and medical sciences, where Iran has demonstrated progress.
    3. Economic diversification: Moves partnership beyond hydrocarbons and traditional trade.
    4. Innovation-driven growth: Positions bilateral ties within future-oriented economic sectors.

    Conclusion

    India-Iran relations are transitioning from historical affinity to strategic necessity. Civilisational depth provides legitimacy, while energy security, connectivity corridors, and regional stability concerns provide contemporary relevance. A revitalised partnership anchored in mutual respect, strategic autonomy, and innovation-driven cooperation can contribute to stability in West Asia and reinforce Asia’s multipolar economic architecture.

    PYQ Relevance

    [UPSC 2017] The question of India’s Energy Security constitutes the most important part of India’s economic progress. Analyze India’s energy policy cooperation with West Asian Countries.

    Linkage: This question directly links to India-Iran energy cooperation highlighted in the article, especially Iran’s hydrocarbon reserves and India’s long-term energy security needs. Alongside connectivity projects like Chabahar, these integrate energy, trade, and regional stability.

  • Somaliland  

    Why in the News?

    Recently, Israel formally recognised the self declared Republic of Somaliland as an independent and sovereign state.

    About Somaliland

    • Located in the Horn of Africa
       • Borders Djibouti, Ethiopia, Somalia, and the Puntland region
       • Has a strategic coastline along the Gulf of Aden
       • Capital city Hargeisa

    Economy and Infrastructure

    • Economy primarily livestock based
       • Major exports of livestock to Gulf countries
       • Berbera Port is being developed as a regional trade and logistics hub
       • Port plays a key role in providing access to sea trade for landlocked Ethiopia

    Prelims Pointers

    • Somaliland is not a UN recognised state despite functioning independently
       • Located along a strategic maritime route near the Bab el Mandeb region
       • Unique political system combining customary institutions and democracy
       • Berbera Port enhances regional connectivity in the Horn of Africa
    Which of the following countries has been suffering from decades of civil strife and food shortages and was in news in the recent past for its very severe famine? [2023]

    (a) Angola 

    (b) Costa Rica 

    (c) Ecuador 

    (d) Somalia

  • [27th December 2025] The Hindu OpED: Social scourge: on India and child marriages

    PYQ Relevance

    [UPSC 2020] Customs and traditions suppress reason leading to obscurantism. Do you agree?

    Linkage: Child marriage exemplifies how entrenched customs override rational decision-making, despite legal prohibition and awareness. The article highlights that social acceptance of tradition-driven practices continues to undermine health, education, and gender equality outcomes.

    Introduction

    Child marriage in India represents a structural intersection of poverty, gender inequality, and limited educational access. While legislative frameworks and flagship schemes exist, the practice continues in several States and socio-economic groups. The persistence of child marriage reflects a widening gap between policy intent and ground-level implementation.

    Why in the News

    India has reaffirmed its commitment to end child marriage by 2030 under the Sustainable Development Goals, marking the first anniversary of the Bal Vivah Mukt Bharat Abhiyan with a 100-day national awareness campaign. This renewed focus comes against the backdrop of sharp national decline in child marriage rates, from 47.4% (2005-06) to 23.3% (2019-21) but persistent regional, economic, and educational disparities highlighted by NFHS data. The issue remains critical as child marriage directly undermines outcomes in health, education, poverty reduction, and gender equality, threatening progress on at least 9 of the 17 SDGs.

    Why does child marriage remain uneven despite national decline?

    1. National Decline: Reflects sustained policy focus and social awareness, with child marriage nearly halved over 15 years.
    2. Regional Concentration: Highest prevalence among women aged 18-29 in West Bengal, Bihar, and Tripura, with Jharkhand, Andhra Pradesh, Assam, Telangana, Madhya Pradesh, and Rajasthan close behind.
    3. Demographic Variation: Indicates that national averages mask entrenched local vulnerabilities.

    How are poverty and education directly linked to child marriage?

    1. Economic Deprivation: 40% of girls from the lowest wealth quintile married before adulthood, compared to 8% in the highest quintile.
    2. Educational Attainment: 48% of girls with no education married before 18, compared to 4% among those with higher education.
    3. Intergenerational Cycle: Early marriage reinforces poverty by limiting education and economic participation.

    What are the health consequences of child marriage?

    1. Maternal Health: Early pregnancies increase risks of anemia, obstetric complications, and maternal mortality.
    2. Child Health: Higher incidence of low birth weight, malnutrition, and infant mortality.
    3. Healthcare Avoidance: Fear of legal repercussions under stringent laws pushes underage girls toward unsafe, unregulated medical practices.

    Why has legal enforcement remained weak?

    1. Primary Legislation: The Prohibition of Child Marriage Act, 2006 serves as the flagship law.
    2. Enforcement Deficit: NCRB data indicates low reporting and conviction rates, reflecting poor implementation.
    3. Legal Overreach Concerns: Application of the Protection of Children from Sexual Offences (POCSO) Act in consensual adolescent relationships discourages institutional healthcare access.

    Why have incentive-based schemes not yielded uniform outcomes?

    1. State Schemes: Cash incentives for girls’ education, such as in West Bengal, have not translated into proportional reductions.
    2. Structural Gaps: Incentives fail without supportive infrastructure like clean toilets, safe transport, and school accessibility.
    3. Targeting Deficit: Vulnerable and marginalised communities remain inadequately reached.

    What role do national campaigns play in addressing the issue?

    1. Bal Vivah Mukt Bharat Abhiyan: Focuses on awareness and social mobilisation.
    2. Beti Bachao Beti Padhao: Aims to improve girl child survival, education, and empowerment.
    3. Implementation Challenge: Behavioural change remains uneven without sustained community-level engagement.

    Conclusion

    Child marriage in India persists due to entrenched socio-economic vulnerabilities, weak enforcement, and fragmented implementation. Without simultaneous progress in poverty reduction, educational access, healthcare security, and gender equality, the gap between policy commitments and social reality will remain unbridged, undermining India’s SDG obligations.

  • India weathers tariff storm for now

    Introduction

    India ends 2025 with relatively strong macroeconomic fundamentals despite a turbulent global environment marked by tariff wars, slowing global growth, and technological disruptions. While fears of a tariff-led slowdown, especially following renewed US trade protectionism, have not fully materialised, structural weaknesses in domestic consumption pose a critical challenge. The central policy question is whether India can transition from public-investment-led growth to a consumption- and private-investment-driven growth cycle.

    Why in the News?

    India’s economy has defied early pessimism around global tariff escalation, particularly fears arising from renewed US trade protectionism. Despite facing one of the highest effective tariff exposures among major economies, India closed 2025 with stable growth, low inflation, and manageable external balances. 

    Has India Successfully Weathered the Global Tariff Shock?

    1. Tariff absorption capacity: Maintained growth despite heightened US tariff actions, including punitive duties linked to Russian crude purchases.
    2. Export resilience: Benefited from tariff-exempt segments such as pharmaceuticals, electronics, and selected manufacturing exports.
    3. Macroeconomic stability: Achieved low inflation, narrowing fiscal deficit, and controlled interest rates by end-2025.
    4. Relative performance: Emerged less impacted than China and several emerging markets facing sharper trade slowdowns.

    Why Do Global Tariff Shocks Continue to Matter for 2026?

    1. Policy uncertainty: Lack of clarity on future US trade actions sustains volatility in investment decisions.
    2. Capital flow risks: Heightened risk of portfolio outflows amid global risk aversion.
    3. Export vulnerability: Slowing global demand and rising protectionism constrain export-led growth.
    4. Cost pressures: Higher global capital costs and supply chain reconfigurations affect manufacturing competitiveness.

    Is Domestic Demand Showing Signs of Weakness?

    1. Consumption slowdown: GST and festive-season data indicate uneven household demand recovery.
    2. Income stress: Middle and lower income households face stagnating real wage growth.
    3. Capacity utilisation ceiling: Manufacturing utilisation at ~75-77% limits fresh private investment.
    4. K-shaped recovery: Aggregate growth masks divergent sectoral and income-group outcomes.

    Why Is Private Investment Not Responding Adequately?

    1. Demand visibility gap: Firms delay expansion due to uncertain consumption outlook.
    2. Credit transmission limits: While balance sheets have improved, risk appetite remains cautious.
    3. Public investment dominance: Growth remains heavily reliant on government capital expenditure.
    4. Structural rigidities: Labour market frictions and regulatory uncertainty persist.

    What External Headwinds Could Intensify in 2026?

    1. Global growth slowdown: Weak recovery in major economies constrains export demand.
    2. AI-driven disruption: Automation threatens employment-intensive sectors, affecting income-led demand.
    3. Trade diversion risks: Chinese exports diverted from the US could flood emerging markets.
    4. Geopolitical instability: Ongoing conflicts heighten energy and financial market volatility.

    Can Policy Levers Offset Consumption Headwinds?

    1. Monetary space: Stable inflation allows accommodative monetary stance if growth slows.
    2. Fiscal recalibration: Shift from capital-heavy spending to targeted consumption support.
    3. Structural reforms: Labour codes, logistics efficiency, and regulatory predictability improve confidence.
    4. External engagement: Trade negotiations with the EU and diversification of export markets reduce exposure.

    Conclusion

    India enters 2026 with macroeconomic stability and demonstrated resilience to global tariff shocks, but the durability of growth remains uncertain. Public investment has sustained momentum, yet weak household consumption and sub-optimal capacity utilisation constrain private investment revival. External headwinds, protectionism, capital flow volatility, and technology-led disruptions, continue to pose risks. Sustaining high growth will therefore depend on rebalancing the growth model toward demand revival, improving income and employment outcomes, and ensuring that public expenditure effectively crowds in private investment while preserving macro-stability.

    PYQ Relevance

    [UPSC 2018] How would the recent phenomena of protectionism and currency manipulations in world trade affect macroeconomic stability of India?
    Linkage: The article analyses India’s exposure to renewed US tariff protectionism and its impact on growth, exports, capital flows, and macro stability in 2026.

  • [26th December 2025] Thze Hindu OpED: A year of dissipating promises for Indian foreign policy

    PYQ Relevance

    [UPSC 2019] ‘‘The long-sustained image of India as a leader of the oppressed and marginalised Nations has disappeared on account of its new found role in the emerging global order”. Elaborate.

    Linkage: This PYQ examines the transformation of India’s normative foreign policy identity amid power politics and global realignments. The article highlights India’s selective silence on democracy and human rights in its neighbourhood and alignment dilemmas, weakening its moral leadership image in 2025.

    Introduction

    India entered 2025 with expectations of active diplomacy backed by political continuity and economic scale. Planned bilateral visits, trade negotiations, and regional outreach were intended to reposition India amid global flux. However, the year unfolded with mounting challenges across economic security, energy security, global strategic stability, and regional security, forcing India into reactive diplomacy rather than agenda-setting leadership.

    Did India’s Economic and Energy Security Strategy Falter in 2025?

    1. Tariff escalation by the U.S.: Imposition of a 25% reciprocal tariff on Indian goods affected labour-intensive sectors such as apparel, gems and jewellery, and seafood.
    2. Trade vulnerability exposure: Actions reversed expectations of a smooth India-U.S. reset under Trump’s second term.
    3. Generalized System of Preferences (GSP) withdrawal legacy: Continued absence of preferential market access compounded export stress.
    4. Energy sanctions pressure: U.S. surcharge on Russian oil imports raised costs, making India the most heavily tariffed Russian oil buyer.
    5. Investment uncertainty: Factory-level job losses and delayed contracts reflected tangible economic impact.
    6. FTA stagnation: Despite negotiations with the U.K., Oman, and New Zealand, major agreements with the U.S. and EU remained unsigned.

    Did China Engagement Deliver Strategic Stability?

    1. Symbolic diplomatic engagement: High-profile Modi-Xi interactions restored optics but not substance.
    2. Unresolved security guarantees: No rollback of Chinese military deployments or confidence-building mechanisms at the LAC.
    3. Economic barriers intact: Restrictions on Chinese investment and trade regulations remained unchanged.
    4. Consular incident escalation: Prolonged detention of an Indian airline passenger in Shanghai raised diplomatic credibility concerns.
    5. Strategic ambiguity persistence: Engagement failed to translate into operational de-escalation.

    Has India’s Russia Policy Reached Strategic Limits?

    1. Energy dependence peak: Russian oil imports rose to $52 billion after sanctions eased.
    2. Renewed sanctions pressure: New U.S. actions revived uncertainty over import sustainability.
    3. Summit outcome gap: India-Russia summit ended without major agreements in defence, nuclear energy, or space cooperation.
    4. Reputational costs: Alignment dilemmas increased amid geopolitical polarisation.
    5. Strategic autonomy strain: Balancing Western pressure and Eurasian partnerships became costlier.

    Is Global Strategic Space Shrinking for India?

    1. Shift in U.S. strategic framing: 2025 U.S. National Security Strategy adopted a softer but ambiguous stance on China and Russia.
    2. Reduced India emphasis: India’s role articulated mainly within Indo-Pacific security, not as a global strategic partner.
    3. G-2 speculation: Trump’s references to Xi Jinping heightened concerns over marginalisation.
    4. Rules-based order erosion: Gaza and Ukraine ceasefire proposals weakened accountability norms.
    5. China’s governance push: Beijing’s Global Governance framework challenged existing international architectures.

    Did Regional Security Challenges Expose Diplomatic Gaps?

    1. Pahalgam terror attack: April attack demonstrated continued cross-border terrorist capability.
    2. Operation Sindoor limitations: Militarily effective retaliation lacked sustained diplomatic backing.
    3. Limited international support: Few countries openly endorsed India’s response.
    4. Neighbourhood volatility: Political instability in Bangladesh and Nepal reduced predictability.
    5. Pakistan dynamics: Rise of ultra-hardline leadership constrained crisis management options.

    Has India’s Neighbourhood Policy Lost Momentum?

    1. Bangladesh reversal: Post-protest regime change reversed engagement gains.
    2. Nepal instability: Fragile transitional government limited cooperation.
    3. Myanmar elections: India engaged with junta while also reaching out to deposed leadership without results.
    4. Human rights dilemma: Calls for democratic values conflicted with strategic silence.
    5. Reduced influence: India appeared reactive rather than agenda-shaping in South Asia.

    What Lessons Does 2025 Offer for India’s Foreign Policy?

    1. Limits of performative diplomacy: Summits and symbolism failed to deliver strategic gains.
    2. Credibility deficit risk: Silence on sensitive issues weakened diplomatic trust.
    3. Normative inconsistency: External democracy advocacy clashed with internal minority concerns.
    4. Narrative recalibration: Shift from Vishwaguru to Vishwamitra lacked operational clarity.
    5. Strategic self-reflection: Acknowledging double standards emerged as a policy necessity.

    Conclusion

    India’s foreign policy experience in 2025 underscores a widening gap between diplomatic ambition and strategic delivery. Economic coercion, unresolved security challenges, neighbourhood volatility, and shrinking multilateral space revealed the limits of symbolism-driven diplomacy. The year demonstrates that strategic autonomy cannot be sustained through optics alone and requires consistency, credibility, and outcome-oriented engagement. Recalibrating foreign policy around economic resilience, principled regional leadership, and realistic power alignment will be essential for restoring India’s influence in an increasingly transactional global order.

    Value Addition: India’s Foreign Policy Trajectory under the Modi Government (2014-2025)

    1. Strategic Reorientation: Transitioned India’s foreign policy from issue-based reactivity to agenda-setting and assertive diplomacy aligned with national interest.
    2. Guiding Doctrine: Anchored diplomacy in the principles of Sabka Saath, Sabka Vikas, Sabka Vishwas, Sabka Prayas, reinforcing inclusivity, trust-building, and collective effort.

    Regional and Neighbourhood Outreach

    1. Neighbourhood First Policy: Prioritised political stability, connectivity, development assistance, and crisis support in South Asia.
    2. Extended Neighbourhood Strategies:
      1. Act East strengthened ASEAN and Indo-Pacific engagement.
      2. Think West deepened ties with West Asia and the Gulf.
      3. Connect Central Asia expanded India’s Eurasian footprint.
    3. SAGAR Doctrine: Reinforced maritime security, regional cooperation, and inclusive growth in the Indian Ocean Region.

    Defence Self-Reliance and Strategic Partnerships

    1. Atmanirbhar Defence: Expanded indigenous manufacturing and reduced import dependence.
    2. INS Vikrant Commissioning: Demonstrated India’s capability in complex defence platforms and blue-water navy ambitions.
    3. iDEX Framework: Institutionalised innovation by integrating startups, MSMEs, and academia into defence R&D ecosystems.

    Humanitarian Diplomacy and Crisis Response

    1. First Responder Role: Institutionalised rapid humanitarian assistance through the MEA’s Rapid Response Cell.
    2. Evacuation and Relief Operations:
      1. Operation Dost (Turkey-Syria earthquake, 2023)
      2. Operation Ganga (Ukraine, 2022)
      3. Operation Devi Shakti (Afghanistan, 2021)
      4. Mission Sagar (IOR outreach, 2020)
    3. Outcome: Enhanced India’s credibility as a reliable humanitarian partner.

    Global Initiatives and Multilateral Leadership

    1. Climate and Sustainability Leadership:
      1. International Solar Alliance (ISA)
      2. Coalition for Disaster Resilient Infrastructure (CDRI)
      3. Lifestyle for Environment (LiFE) Movement
    2. Multilateral Impact: Positioned India as a norm-shaper on climate action, resilience, and sustainable development.

    G20 Presidency and Global South Leadership

    1. G20 2023 Presidency: Advanced consensus-driven diplomacy under the theme “Vasudhaiva Kutumbakam”.
    2. African Union Inclusion: Secured AU’s permanent G20 membership, strengthening Global South representation.
    3. Development-Centric Agenda: Emphasised debt relief, digital public infrastructure, and inclusive growth.

    Overall Significance for UPSC Mains

    1. Demonstrates India’s evolution from a rule-taker to a rule-shaper in global governance.
    2. Provides counterbalance to critiques of 2025 by highlighting structural strengths, institutional capacity, and long-term strategic vision.
    3. Useful for GS II answers on India’s foreign policy evolution, Global South leadership, strategic autonomy, and multilateralism.

  • Kimberley Process 

    Why in the News?

    The Kimberley Process Plenary has selected India to assume the Chairmanship of the Kimberley Process from 1 January 2026. This will be the third time India will chair the process.

    About the Kimberley Process

    • It is a tripartite initiative involving governments, the international diamond industry, and civil society.
    • Aim is to prevent the trade in conflict diamonds.
    • Conflict diamonds are rough diamonds used by rebel groups to finance armed conflicts against legitimate governments, as defined by UN Security Council resolutions.

    Governance Structure

    • Chair and Vice Chair are appointed by Plenary consensus.
    • Vice Chair of a year automatically becomes Chair the following year.
    • Plenary is the highest decision making body of the Kimberley Process.

    Participants

    • 60 participants representing 86 countries.
    • European Union is counted as a single participant.

    India and the Kimberley Process

    • India has been participating in the Kimberley Process Certification Scheme since 2003.
    • This is the third time India has been entrusted with the Chairmanship.
    • India is a major global hub for diamond cutting and polishing, giving it strategic importance in KP deliberations.

    Prelims Pointers

    • Kimberley Process deals only with rough diamonds, not polished diamonds.
      • KP is not a UN body, but works in alignment with UN Security Council resolutions.
      • Certification is mandatory for international trade in rough diamonds among KP participants.
      • EU counts as one participant despite multiple countries.
    Consider the following pairs: (2025)

    Country –        Resource-rich in; 

    I. Botswana:   Diamond; 

    II. Chile:         Lithium; 

    III. Indonesia: Nickel. 

    In how many of the above rows is the given information correctly matched? 

    (a) Only one (b) Only two (c) All the three (d) None

  • NATGRID Linked with NPR 

    Why in the News?

    The National Intelligence Grid has been linked with the National Population Register, enabling real time access to family wise population data for law enforcement and intelligence agencies.

    National Intelligence Grid (NATGRID)

    • Secure and indigenous intelligence sharing platform
       • Conceptualised in 2009 after the 26/11 Mumbai terror attacks
       • Became operational in 2024
       • Receives around 45,000 queries per month on average
       • Accessible only to authorised law and security agencies
       • Access expanded to Superintendent of Police rank officers
       • Earlier limited to select central agencies

    Key Agencies with Access

    • Intelligence Bureau
     • Research and Analysis Wing
     • National Investigation Agency
     • Enforcement Directorate
     • Financial Intelligence Unit
     • Narcotics Control Bureau
     • Directorate of Revenue Intelligence

    Prelims Pointers

    • NATGRID is not a law enforcement agency
      • It is a data access and integration platform
      • NPR is different from Census but linked administratively
      • NPR data is family based not biometric centric
      • Gandiva supports facial recognition and analytics
      • NATGRID enhances counter terrorism and organised crime investigation
    Q. With reference to the Government of India, consider the following information: Organization Some of its functions It works under (2025)

    I.Directorate of EnforcementEnforcement of the Fugitive Economic Offenders Act, 2018Internal Security Division- I, Ministry of Home Affairs 

    II.Directorate of Revenue IntelligenceEnforces the Provisions of the Customs Act, 1962Department of Revenue, Ministry of Finance 

    III.Directorate General of Systems and Data ManagementCarrying out big data analytics to assist tax officers for better policy and nabbing tax evadersDepartment of Revenue, Ministry of Finance 

    In how many of the above rows is the information correctly matched? 

    [A] Only one 

    [B] for Only two 

    [C] All the three 

    [D] None

  • [25th Dcember 2025] The Hindu OpED: New labour codes, the threats to informal workers

    [UPSC 2024] Discuss the merits and demerits of the four ‘Labour Codes’ in the context of labour market reforms in India. What has been the progress so far in this regard?

    Linkage: This question directly falls under GS Paper III, Labour Reform, testing the ability to critically evaluate structural labour market reforms under liberalisation. The article on new labour codes provides concrete evidence on demerits which can be used to balance the “merits vs demerits” and assess reform progress.

    Introduction

    India enacted four labour codes in 2019-20 to consolidate existing labour laws relating to wages, industrial relations, social security, and occupational safety. While projected as universalising worker welfare, the codes substantially marginalise unorganised workers, who constitute over 90% of India’s workforce and contribute nearly 65% of GDP. The article flags structural exclusions, regulatory dilution, and erosion of welfare institutions affecting informal labour across sectors.

    Why in the News

    The issue has gained prominence as States, including Tamil Nadu, deliberate on notifying rules under the Social Security Code. Unions and worker organisations have intensified opposition, citing first-time dismantling of long-standing welfare boards, dilution of inspection systems, and absence of funding guarantees. The transition marks a sharp departure from sector-specific, State-level welfare architectures built over decades.

    What are the new labour codes and how were they enacted?

    1. Legislative Consolidation: Replaced 29 labour laws with four codes covering wages, industrial relations, social security, and occupational safety.
    2. Consultative Deficit: Enacted without tripartite consultation at the Indian Labour Conference, violating established labour law-making practice.
    3. Coverage Gap: Unorganised workers excluded from consideration in three codes, except limited mention in the Social Security Code.

    How do the codes affect unorganised workers structurally?

    1. Workforce Magnitude: Unorganised workers constitute over 90% of India’s workforce and generate 65% of GDP.
    2. Policy Blindness: Codes assume uniform work conditions, ignoring sectoral diversity across agriculture, construction, salt pans, beedi, mining, and domestic work.
    3. Legal Erasure: Repeal of sector-specific laws removes tailored protections evolved over decades.

    How does consolidation weaken occupational safety and health?

    1. Regulatory Dilution: Occupational Safety, Health and Working Conditions (OSHWC) Code replaces site-based inspections with process-based systems.
    2. Safety Deficit: Absence of nearly 180 safety rules earlier applicable to construction sites under BOCW Act.
    3. International Violation: Contravenes ILO Convention 81, ratified by India, mandating effective labour inspections.

    Why are occupational diseases inadequately addressed?

      1. Sectoral Health Risks:
    • Construction: High prevalence of silicosis.
    • Agriculture: Cancer linked to pesticide exposure.
    • Salt Work: Chronic eye, skin, and kidney diseases.
    1. Institutional Gap: OSHWC Code ignores diagnosis, treatment, and rehabilitation obligations.
    2. Convention Breach: Violates ILO Convention 161, which mandates national occupational health services.

    How does the Social Security Code undermine welfare boards?

    1. Institutional Replacement: Creates a single national welfare board with no sectoral differentiation.
    2. Board Dissolution Risk: Threatens dissolution of 39 State-level welfare boards in Tamil Nadu.
    3. Benefit Loss: Eliminates protections such as old-age pensions, maternity assistance, and education support for workers’ children.

    What are the funding-related risks under the new framework?

    1. Cess Abolition: Removes sector-specific cesses (beedi, salt, mining) without replacement revenue.
    2. Funding Uncertainty: No guaranteed employer contribution for welfare funds.
    3. Unutilised Corpus: Centralised e-Shram registration may allow Centre to access nearly ₹11 lakh crore in unspent welfare funds, especially from construction sector.

    How have States responded to these changes?

    1. Legislative Resistance: Andhra Pradesh shut down welfare boards post-codes.
    2. Institutional Strength: Tamil Nadu retains strong welfare architecture under the Tamil Nadu Manual Workers Act, 1982.
    3. Worker Coverage: Approximately 3 crore informal workers registered across welfare boards in Tamil Nadu.

    What needs to be done?

    1. Institutional Protection: Preserve State-level welfare boards and sector-specific laws.
    2. Fiscal Safeguards: Retain saving clauses for welfare funds and statutory cesses.
    3. Legislative Resistance: Refuse notification of rules under the codes, as done by Kerala and Tamil Nadu.
    4. Welfare Continuity: Strengthen existing State welfare infrastructure instead of centralisation.

    Conclusion

    The four labour codes mark a significant shift in India’s labour market architecture by prioritising consolidation, flexibility, and ease of compliance. However, as highlighted in the article, this reform has simultaneously weakened occupational safety regimes, dismantled sector-specific welfare institutions, and left unorganised workers, who form the backbone of the economy, without assured social security or funding guarantees. Unless States retain and strengthen existing welfare boards, inspection mechanisms, and financing arrangements, labour market reforms risk deepening informality and inequality rather than enabling inclusive and sustainable growth.

  • [24th December 2025] The Hindu OpED: The VB-G RAM G Act 2025 fixes structural gaps

    PYQ Relevance

    [UPSC 2023] Most of the unemployment in India is structural in nature. Examine the methodology adopted to compute unemployment in the country and suggest improvements.

    Linkage: The VB-G RAM G Act, 2025 directly addresses structural unemployment and episodic employment by strengthening the statutory employment guarantee. The Act’s emphasis on advance planning, enhanced person-days, and timely payments responds to long-standing concerns over the mitigation of rural unemployment.

    Mentor’s Comment

    The enactment of the Viksit Bharat-Guarantee for Rozgar and Aajeevika Mission (Gramin) Act, 2025 marks a decisive recalibration of India’s rural employment guarantee framework. Amid debates on fiscal withdrawal, centralisation, and dilution of rights, this article examines how the Act addresses long-standing structural and implementation gaps in MGNREGA while preserving its legal core.

    Introduction

    The President’s assent to the VB-G RAM G Act, 2025 enhances the statutory rural employment guarantee from 100 to 125 days. Contrary to claims of dilution, the Act seeks to correct fragmentation, weak enforceability, episodic employment, and accountability deficits that emerged during earlier phases of implementation.

    Reframing Welfare and Development as Complementary

    1. Conceptual Continuum: Treats income support, asset creation, agricultural stability, and long-term rural productivity as interlinked outcomes rather than competing objectives.
    2. Statutory Anchoring: Retains the justiciable right to employment while strengthening enforceability through procedural reforms.
    3. Design Philosophy: Embeds welfare delivery within durable infrastructure creation and productivity enhancement.

    Expansion and Strengthening of Legal Entitlements

    1. Enhanced Employment Guarantee: Expands guaranteed employment from 100 to 125 days, reversing stagnation in entitlements.
    2. Removal of Dilutionary Provisions: Eliminates procedural disincentives that earlier nullified unemployment allowance in practice.
    3. Grievance Redressal: Reinforces time-bound grievance mechanisms to address delayed payments and denial of work.

    Institutionalisation of Demand-Based Employment

    1. Worker-Centric Demand: Preserves demand-based employment generation, ensuring work availability when demanded rather than post-distress.
    2. Advance Planning: Anchors employment planning at the village level, preventing administrative denial of work.
    3. Operational Efficiency: Transforms planning into a facilitative tool rather than a demand-suppressing mechanism.

    Correcting Fragmentation through Coordinated Decentralisation

    1. Gram Panchayat Primacy: Retains gram panchayats as primary planning and implementing authorities with approval powers over local plans.
    2. Vertical Integration: Aggregates village plans at block, district, and state levels to enable inter-sectoral convergence.
    3. Decision Authority: Centralises coherence without centralising execution, correcting fragmentation while preserving decentralisation.

    Fiscal Architecture and Equity-Based Allocation

    1. Budgetary Expansion: Increases allocations from ₹33,000 crore (2013-14) to ₹86,000 crore (2024-25).
    2. Enhanced Central Contribution: Raises the Centre’s share from ₹86,000 crore to nearly ₹95,000 crore, countering claims of withdrawal.
    3. Funding Model: 60:40 Centre-State structure for general states; accords 90:10 for northeastern, Himalayan states and Jammu & Kashmir.
    4. Normative Allocation: Ensures equity through rule-based state-wise allocations determined by objective parameters.

    Improved Delivery Outcomes and Financial Inclusion

    1. Person-Days Generated: Increases from 1,660 crore (pre-2014) to 3,210 crore, stabilising thereafter.
    2. Completed Works: Expands completed assets from 153 lakh to 862 lakh, addressing episodic employment
    3. Women’s Participation: Rises from 48% to 56.73%, strengthening gender inclusion.
    4. Payment Efficiency: Achieves 99% on-time fund transfers; links nearly all active workers to Aadhaar Payment Bridge.

    Addressing Structural Weaknesses of the Earlier Framework

    1. Episodic Employment: Reduces migration-driven spikes and post-crisis employment volatility.
    2. Weak Enforceability: Strengthens legal backing of unemployment allowance.
    3. Leakages: Addresses duplication, ghost entries, and fake job cards through digital governance systems.
    4. Crisis Resilience: Incorporates flexibility to respond to disruptions such as COVID-19.

    Contextual Flexibility within Cooperative Federalism

    1. Advance Notification: Empowers states to notify employment periods aggregating up to 60 days aligned with agricultural lean seasons.
    2. Local Customisation: Allows differentiated notification at district, block, or gram panchayat level based on agro-climatic conditions.
    3. Disaster Response: Permits temporary expansion of permissible works and employment during natural disasters.

    Lessons from the previous Governance and Fiscal Failures

    1. Wage Stagnation: Caps wages at ₹100 per day from 2009 despite inflation, undermining real income security.
    2. Allocation Cuts: Reduces allocations from ₹40,000 crore (2010-11) to ₹33,000 crore (2012-13) amid rising demand.
    3. Employment Decline: Falls from 7.55 crore workers (2010-11) to 6.93 crore (2013).
    4. CAG Findings (2013): Highlights 4.33 lakh fake job cards, unpaid wages, delayed payments, and misuse of funds across states.

    Conclusion

    The VB-G RAM G Act, 2025 represents a calibrated structural renewal of India’s rural employment guarantee framework rather than a retreat from welfare commitments. By expanding legal entitlements, correcting fiscal and governance distortions, institutionalising decentralised planning, and improving delivery outcomes, the Act addresses the core weaknesses revealed through years of implementation experience. In doing so, it reinforces the employment guarantee as a legally enforceable instrument of inclusive growth, rural stability, and cooperative federalism, aligned with both constitutional intent and evolving development priorities.

  • How exports are concentrated in few states

    Introduction

    India’s export-led growth strategy historically rested on the assumption that expanding external demand would absorb surplus labour and facilitate broad-based industrialisation. However, disaggregated State-level data reveals a core-periphery structure in India’s export geography. Export growth is now driven by pre-existing industrial hubs, while large hinterland regions remain marginal to global value chains. This shift reflects deeper structural constraints related to capital intensity, industrial complexity, and financial asymmetries.

    Why in the News?

    Recent analysis based on the RBI Handbook of Statistics on Indian States (2023-24) highlights that India’s export growth is increasingly concentrated in a shrinking cluster of States, even as aggregate export numbers remain strong. The top five exporting States, Maharashtra, Gujarat, Tamil Nadu, Karnataka and Uttar Pradesh, now account for around 70% of India’s total exports, up from about 65% half a decade ago.

    Export Geography and the Emerging Core-Periphery Pattern

    Spatial Concentration of Export Activity

    1. Export concentration: Top five States command ~70% of national exports.
    2. Rising market concentration: Herfindahl-Hirschman Index (HHI) indicates increasing spatial concentration of exports.
    3. Deceptive aggregation: National export growth masks declining participation of non-core States.

    Regional Divergence

    1. Coastal advantage: Western and southern coastal States integrate more easily into global supply chains.
    2. Hinterland exclusion: Northern and eastern States with large labour pools remain weakly connected to export networks.
    3. Sticky geography: Export growth reinforces existing industrial locations rather than spreading spatially.

    From Labour Absorption to Capital Deepening

    Shift in Factor Intensity

    1. Capital deepening: Rising capital-to-labour ratios across export sectors.
    2. Weak employment response: Employment elasticity of export growth has declined sharply.
    3. Manufacturing stagnation: Manufacturing employment share remains around 11.6-12%, despite export expansion.

    Structural Evidence

    1. Wage compression: Net Value Added (NVA) data shows productivity gains accrue disproportionately to capital.
    2. Limited job creation: New export jobs emerge mainly in capital-intensive hubs rather than labour-surplus regions.

    Changing Nature of India’s Exports

    Transition from Volume to Value

    1. Global slowdown: WTO data indicates deceleration in merchandise trade growth.
    2. India’s ranking: India among top 10 global exporters, accounting for ~5% of global trade.
    3. Higher complexity: Export baskets increasingly shift towards complex, technology-intensive goods.

    Implications for Labour

    1. Barrier to entry: Complex value chains require skilled labour, logistics depth, and supplier ecosystems.
    2. Limited diffusion: Such ecosystems rarely emerge organically in lagging regions.
    3. Bypassing labour-intensive phase: India risks skipping the East Asian pathway of mass industrial employment.

    Capital over Worker: Evidence from Employment Data

    PLFS-Based Insights

    1. Household-led employment: Export boom does not translate into factory-floor job growth.
    2. Factory output without labour expansion: Capital-intensive plants dominate export hubs.
    3. Regional imbalance: Hinterland labour remains disconnected from export-driven growth.

    Urban Concentration

    1. Electronics exports: ~47% year-on-year growth remains concentrated in Chennai, Kancheepuram, Noida.
    2. Supply-chain rigidity: High technological complexity prevents geographic diffusion.

    Financial Architecture and Regional Inequality

    Credit-Deposit Ratio Divergence

    1. Export hubs: Tamil Nadu and Andhra Pradesh record CD ratios above 90%.
    2. Hinterland States: Bihar and eastern Uttar Pradesh show CD ratios below 50%.
    3. Capital recycling: Savings from labour-surplus regions finance industrial growth elsewhere.

    Institutional Weakness

    1. Financial thinness: Hinterland lacks credit absorption capacity.
    2. State capacity gap: Weak industrial policy execution limits integration into global value chains.

    Rethinking Export-Led Growth as a Development Strategy

    Limits of Export Optimism

    1. Exports as outcome, not lever: Export success reflects prior industrial capacity.
    2. Employment decoupling: Export growth no longer guarantees labour absorption.
    3. Misleading metric: Export growth alone insufficient as a proxy for inclusive prosperity.

    Policy Implication

    1. Industrial policy recalibration: Labour-intensive manufacturing requires deliberate state intervention.
    2. Metric correction: Development assessment must incorporate employment and regional equity indicators.

    Conclusion

    India’s export performance reflects a narrow, capital-intensive growth model concentrated in a few industrial hubs, limiting its capacity to generate employment and reduce regional disparities. Without recalibrating industrial and trade policies towards labour-intensive manufacturing and wider spatial diffusion, export-led growth risks reinforcing jobless growth rather than serving as an engine of inclusive development.

    PYQ Relevance

    [UPSC 2017] Account for the failure of the manufacturing sector in achieving the goal of labor-intensive exports. Suggest measures for more labor-intensive rather than capital-intensive exports.

    Linkage: It is relevant to GS-III as the article shows India’s export growth has become capital-intensive with weak employment generation. Rising capital-labour ratios and export concentration explain the failure of labour-intensive exports and the need for policy correction.