💥Join UPSC 2027,2028 Mentorship (August Batch) + XFactor Notes & Microthemes PDF
Talk to Mentor

Civilsdaily

Login

Archives: News

  • India’s return to its Central Asian neighbourhood

    India’s return to its Central Asian neighbourhood

    Why in the News

    The Prime Minister is set to travel to Central Asia, beginning with a state visit to Uzbekistan and followed by participation in the Shanghai Cooperation Organisation (SCO) summit of Heads of State in Bishkek, the Kyrgyz capital once called Frunze in Soviet times. The visit follows a decade long build up in India’s outreach to the region, a landmark 2015 tour of all five Central Asian states, India’s entry into the SCO as a full member in 2017, and the invitation extended to all five Central Asian leaders as chief guests for Republic Day in 2022. Central Asia sits between Russia and China, both of which still shape its politics and economy, while Pakistan seeks to claim the region’s historical and religious lineage as its own. The visit tests how far India can convert a civilisational and diplomatic relationship into a substantive one without a shared land border.

    Why does India treat Central Asia as its neighbourhood despite the absence of a land border?

    1. A civilisational link substitutes for geography: Central Asia shares deep ties with India in culture, religion, language and architecture, and India is separated from Tajikistan only by the narrow Wakhan corridor inside Afghanistan.
    2. Pakistan contests this claim: Pakistan seeks to use religious affinity to claim the region’s historical lineage for itself and to cut India off from these connections, an approach that has not succeeded so far.
    3. The region is turning outward: Central Asian states are increasingly looking beyond Russia and China for development partners, and view India’s plural, moderate and democratic experience with admiration rather than suspicion.

    How has India built its Central Asia engagement over the past decade?

    1. The 2015 visit ended a policy of deference: The Prime Minister’s 2015 tour of all five Central Asian states marked the end of India’s earlier practice of deferring to Russia in what it treated as Moscow’s periphery.
    2. SCO membership followed in 2017: India was admitted to the Shanghai Cooperation Organisation as a full member in 2017, the same year Pakistan was admitted, sponsored respectively by Russia and China.
    3. A dialogue mechanism followed the pandemic: An unprecedented invitation to all five Central Asian leaders as Republic Day chief guests in 2022 was forced online by the COVID 19 pandemic, but still produced the India Central Asia Dialogue as a standing mechanism for cooperation.

    Why does the visit begin with Uzbekistan?

    1. Uzbekistan has been the region’s most dynamic reformer: Ties with Uzbekistan have improved steadily under its president since 2016, and the country is regarded as the most forward looking in the region on diversifying its foreign policy.
    2. Its counter terrorism record matters to India: Uzbekistan has taken an uncompromising line against terrorism and extremism, and its close knowledge of and pragmatic approach to Afghanistan and the Taliban is of direct value to India.
    3. It anchors India’s alternative connectivity plans: India has held detailed talks with Uzbekistan on alternative rail and road routes through Iran and Afghanistan, links that need to be revisited given recent developments in both countries.

    What other powers is India competing with in the region?

    1. Russia and China remain the dominant powers: Central Asia is landlocked between the two, and both continue to shape the region’s politics and economy even as their relative influence shifts, Russia’s weakening and China’s growing.
    2. Turkiye and Iran hold cultural and economic sway: Both countries are described as dominant influences in the region alongside Russia and China.
    3. The United States and European Union are entering the space: Both are working their way into Central Asia as Russia’s grip loosens.
    4. Radicalisation spillover from Afghanistan is a shared anxiety: China fears the spread of radicalisation into its border regions from Afghanistan, an anxiety the region shares along with memories of attacks such as the 2024 Crocus City Hall attack in Moscow.

    What is India’s position inside the SCO?

    1. The SCO has grown well beyond its founding core: What began as the “Shanghai Five” grouping in 1996 has grown, in its 25th year, to 10 members, 15 dialogue partners and two observers.
    2. India engages the SCO on geography, not ideology: India has been a regular participant at SCO Head of State meetings except in 2024, and has pushed ideas on economic, technological and civilisational cooperation, including a vision of security, connectivity and opportunity put forward at last year’s Tianjin summit.
    3. India offers a counterweight within the SCO’s China Pakistan dyad: Negotiating inside the SCO against a China Pakistan axis is demanding, and for a country as dependent on China as Kyrgyzstan, India’s presence in the SCO offers a genuine alternative.

    Challenges to India’s Central Asia outreach

    1. Weak physical connectivity limits how far ties can grow: India has no direct land or transit route into Central Asia, so trade and people movement rely on routes through third countries. Eg. Talks on alternative rail and road links through Iran and Afghanistan remain unfinished even after years of discussion. Fix. Operationalise the Chabahar port route and conclude a transit framework with Uzbekistan and other Central Asian states independent of Afghan transit uncertainty.
    2. China’s economic footprint outpaces India’s: China’s connectivity and trade financing in the region dwarf India’s presence in infrastructure and investment. Eg. China has built rail links and pipeline corridors connecting Central Asia directly to its own territory, a scale of investment India has not matched. Fix. Use lines of credit and the India Central Asia Dialogue to fund discrete, deliverable projects in energy, health and digital infrastructure rather than compete on scale.
    3. Russia’s traditional primacy still shapes the region’s security choices: Most Central Asian states retain security arrangements with Russia through the Collective Security Treaty Organisation, limiting how far they can diversify. Eg. Kyrgyzstan and Tajikistan continue to host Russian military bases. Fix. Build India’s security cooperation around counter terrorism training and disaster response, areas that do not compete with existing Russian linked security arrangements.

    Conclusion

    The visit signals a deliberate, structured attempt to convert a civilisational relationship into a strategic one, anchored first in Uzbekistan and then in the SCO platform. Connectivity gaps and the entrenched primacy of Russia and China in the region mean this return builds incrementally rather than displacing existing power structures. How far India can embed itself economically and strategically in Central Asia will depend on sustained follow through on the India Central Asia Dialogue rather than on the visit itself.

    Back2Basics

    What is the Shanghai Cooperation Organisation?

    1. Origin: It began in 1996 as the “Shanghai Five”, grouping China, Russia, Kazakhstan, Kyrgyzstan and Tajikistan, and was renamed the Shanghai Cooperation Organisation in 2001 when Uzbekistan joined.
    2. Mandate: It focuses on regional security, counter terrorism, economic cooperation and connectivity among its Eurasian member states.
    3. Headquarters: Its secretariat is based in Beijing.

    [2024] “Critically analyse India’s evolving diplomatic, economic and strategic relations with the Central Asian Republics (CARs) highlighting their increasing significance in regional and global geopolitics.”

  • India-China boundary talks: Some progress, but a long road ahead

    India-China boundary talks: Some progress, but a long road ahead

    Why in the News

    An eight point consensus has emerged from the 25th round of talks between the Special Representatives of India and China, the National Security Advisor and the Chinese Foreign Minister, held in Beijing. The talks come ahead of the expected visit of the President of China to India for the BRICS Summit. The outcomes include agreement to advance a framework for settling the boundary question through an Expert Group and a Working Group, and to establish two new hotlines in the Eastern and Middle Sectors. Whether this procedural progress marks the start of genuine boundary delimitation, or repeats a decades long pattern of confidence building measures that stall before they mature, remains contested.

    What is the Special Representatives mechanism on the India China boundary?

    1. A political level channel: The Special Representatives mechanism is the designated political level channel, held at the level of the National Security Advisor and the Foreign Minister, tasked with negotiating a framework for settlement of the boundary question.
    2. The current round: The 25th round of talks was held in Beijing between the National Security Advisor and the Chinese Foreign Minister.
    3. Its relationship to implementation bodies: It operates alongside implementation level mechanisms such as the Working Mechanism for Consultation and Coordination on India China Border Affairs (WMCC), which handles border management and now houses the Expert Group and Working Group tasked with delimitation and management.

    What did the 25th round of talks agree to?

    1. Reaffirming peace along the border: The outcomes concern maintenance of peace and tranquillity in the border areas, and advancing negotiations on a framework for settlement of the boundary question in accordance with previous agreements.
    2. New task for the Expert Group and Working Group: There is a specific reference to advancing discussions through an Expert Group and a Working Group respectively, to explore an early harvest of boundary delimitation in appropriate sectors, and effective border management.
    3. Implementing an earlier understanding: The two sides agreed to implement last year’s understanding on additional General Level Mechanism or Senior Highest Military Commander meetings, along with establishing two hotlines in the Eastern and Middle Sectors.

    How has the border personnel meeting mechanism evolved since 1992?

    1. Origins in the Joint Working Group: In 1992, the Joint Working Group on the Boundary Question decided on confidence building measures such as Border Personnel Meetings, complementing forward movement on border trade.
    2. A subgroup that grew into an institutional mechanism: A subgroup of the Joint Working Group was created following the 1993 border peace and tranquillity agreement, the India China Expert Group of Diplomatic and Military Officials, which became the precursor to the Working Mechanism for Consultation and Coordination on India China Border Affairs, set up in 2012.
    3. New meeting points identified after 1995: After the success achieved in 1995 on disengagement at Sumdorong Chu, Lipulekh in the Middle Sector and Dichu in the Eastern Sector were identified as additional military meeting points.
    4. Not every point could be operationalised: The plan for meetings at Lipulekh was abandoned for want of infrastructure and because of adverse weather conditions. A trial meeting at Dichu, in the Kibithu sector of Arunachal Pradesh’s Anjaw district and the site of a notable 1962 battle in which the Kumaon Regiment fought, was finalised, but the chosen site on Madan Ridge proved contentious and no further meetings took place there.
    5. The proposal was revived only in 2014: It was then decided to hold regular meetings at Wacha, opposite Damai on the Chinese side, in the same Kibithu sector, in addition to existing venues across Bum La in Arunachal Pradesh and Nathu La in Sikkim.

    What do the new hotlines add to existing India China contact channels?

    1. The understanding they build on: Last year, the two sides had reached agreement in principle on working towards additional General Level or Senior Highest Military Commander meetings in the Eastern and Middle Sectors, similar to the existing mechanism in the Western Sector at Chushul and Moldo.
    2. Existing channels already in place: Hotlines already exist at Daulat Beg Oldie and Chushul, with informal communication at Demchok in the Western Sector, and similar hotlines at Nathu La in Sikkim and at Bum La and Kibithu in the Eastern Sector.
    3. What the new hotlines could achieve: The two additional hotline channels agreed for the Eastern and Middle Sectors could strengthen this existing capacity and help defuse local tensions.

    What broader thaw in ties has this round of talks followed?

    1. Political level consensus behind the process: The Special Representatives are working to realise the consensus reached between the Prime Minister and the President of China at Kazan in October 2024, and at Tianjin in August 2025, on improving ties.
    2. Other signs of normalisation: The resumption of the Kailash Mansarovar Yatra, the restoration of direct flights, and the resumption of border trade are meaningful steps in the same direction.

    What tensions temper optimism about this round of talks?

    1. It would be premature to call this delimitation: It would be premature to suggest that substantive boundary delimitation has already begun in earnest, since the Expert Group and the Working Group under the Working Mechanism for Consultation and Coordination are only now explicitly tasked with finalising their respective terms of reference, meaning the framework is being created and the process is being activated only incrementally.
    2. The road ahead is long: The task of achieving an early and substantial harvest of boundary delimitation and border management may be long and arduous, requiring patient negotiations.
    3. Piecemeal progress against an unsettled whole: There is also the question of piecemeal progress against a more holistic settlement of differences along the Line of Actual Control (LAC), since neither the Sikkim subsector nor the Middle Sector are free from their own unresolved differences.
    4. Negotiators need to be equal to a vexed history: The negotiators must be empowered to engage in meaningful discussions and must have sufficient experience in handling a matter that has proved difficult for previous generations.

    Conclusion

    This round of Special Representative talks has advanced the procedural architecture for the India China boundary question, through new hotlines and a formal mandate for the Expert Group and Working Group, ahead of the expected visit of the President of China for the BRICS Summit. Genuine boundary delimitation has not yet begun, and the decades long history of the border personnel meeting mechanism shows that such confidence building steps can stall for years before they mature. Whether the newly mandated Expert Group and Working Group convert this round’s procedural momentum into an actual settlement remains to be seen.

    Back2Basics: Line of Actual Control (LAC)

    1. Definition: The LAC separates Indian controlled territory from Chinese controlled territory along the unsettled boundary between the two countries.
    2. Three sectors: It is divided into three sectors, the Eastern Sector covering Arunachal Pradesh and Sikkim, the Middle Sector covering Uttarakhand and Himachal Pradesh, and the Western Sector covering Ladakh.

    “[2024, GS3, 15 marks] India has a long and troubled border with China and Pakistan fraught with contentious issues. Examine the conflicting issues and security challenges along the border. Also give out the development being undertaken in these areas under the Border Area Development Programme (BADP) and Border Infrastructure and Management (BIM) Scheme.”

  • Insurers can invest in NDB’s onshore rupee bonds, says IRDAI

    Insurers can invest in NDB’s onshore rupee bonds, says IRDAI

    Why in the News

    The Insurance Regulatory and Development Authority of India (IRDAI) has permitted insurers to invest in Maharajah INR Bonds, the onshore rupee bonds of the New Development Bank (NDB). The approval follows a representation from the NDB seeking clearance for the bonds, under which the bank proposes to raise Rs 25,000 crore over a five year period. The move assumes significance ahead of next month’s BRICS Summit in New Delhi.

    What is a Maharajah INR Bond?

    1. Definition: It is an onshore rupee bond issued in the Indian market by the New Development Bank.
    2. Purpose: Proceeds are intended to be raised over a five year period, totalling Rs 25,000 crore, for general corporate purposes and for financing or onward lending to sustainable development, sustainable infrastructure, and green and social projects in India.
    3. Legal classification: IRDAI has clarified that the proposed onshore rupee bond issuances by the NDB fall under the definition of securities under the Securities Contracts (Regulation) Act, 1956.

    What has IRDAI approved and why does it matter now?

    1. The approval itself: IRDAI communicated its approval to insurers through a circular, permitting them to invest in the NDB’s Maharajah INR Bonds.
    2. What triggered it: The approval follows a representation from the NDB seeking clearance for the bond programme.
    3. Its timing: The approval assumes significance ahead of next month’s BRICS Summit in New Delhi, where the New Development Bank’s fundraising plans are likely to draw attention.

    Under what conditions can insurers invest, and what is the intent behind the approval?

    1. Widening the investment universe: IRDAI is permitting the investment to give insurers more scope for investments.
    2. Regulatory treatment: The investment will be treated as part of insurers’ approved investments and remains subject to norms laid down by the Government of India and to SEBI (Securities and Exchange Board of India) approval, among other conditions.
    3. Who stands behind the bonds: The New Development Bank is a multilateral development bank established by Brazil, Russia, India, China and South Africa, the BRICS grouping.

    Conclusion

    IRDAI’s approval is a procedural but enabling step that widens the pool of domestic capital available to the New Development Bank ahead of the BRICS Summit in New Delhi. How much of the proposed Rs 25,000 crore is actually raised will depend on the bond issuance itself and on insurer appetite once it opens.

    Back2Basics: New Development Bank

    1. Formation: The New Development Bank was established in 2014 under the founding agreement of the BRICS grouping and became operational the following year.
    2. Headquarters: It is headquartered in Shanghai, China.
    3. Mandate: It mobilises resources for infrastructure and sustainable development projects in BRICS and other emerging and developing economies.
    4. Membership: It has since expanded its membership beyond its five founding countries to include other developing nations.

    [2014] “India has recently signed to become founding a New Development Bank (NDB) and also the Asian Infrastructure Investment Bank (AIIB). How will the role of the two Banks be different? Discuss the significance of these two Banks for India.”

  • Can India build a strategic fuel system?

    Why in the News

    Disruptions related to West Asia have exposed a vulnerability in India’s energy security system. India imports large quantities of crude oil, liquefied natural gas (LNG) and liquefied petroleum gas (LPG), but its ability to store, move and release these fuels during a prolonged disruption differs sharply by fuel. Against this, the government is considering a decade long strategic fuel programme that would add about 28 MT (million tonnes) of crude oil storage, 9 MT of LNG storage and 4 MT of LPG storage. The programme remains under consideration and should be treated as a proposed target rather than committed capacity.

    What is India’s proposed strategic fuel storage programme?

    1. Scale of the proposal: The decade long programme would add about 28 MT of crude oil storage, 9 MT of LNG storage and 4 MT of LPG storage, roughly 41 MT of combined new capacity.
    2. Purpose: The reserves are intended to provide nearly two months of crude oil and LNG demand cover and about six weeks of LPG demand cover during a prolonged supply disruption.
    3. Status: The programme remains under consideration and is a proposed target, not committed capacity.

    How much strategic fuel storage does India already have?

    1. Crude storage is the most developed: Phase I of the Strategic Petroleum Reserve provides 5.33 MT of underground capacity, with actual storage of about 3.37 MT, or roughly 63 to 64 percent utilisation, across Visakhapatnam, Mangaluru and Padur. A further 6.5 MT has been approved under Phase II at Chandikhol and Padur.
    2. Execution has lagged on Chandikhol: Work on the Chandikhol project remains slow amid ongoing land acquisition requirements and the finalisation of commercial public private partnership frameworks.
    3. LPG storage is a fraction of the proposed target: The Visakhapatnam and Mangaluru caverns together provide about 0.14 MT of capacity, so a proposed 4 MT reserve would represent roughly a thirty fold increase in underground LPG capacity.
    4. Natural gas has no underground storage at all: India currently has no operational underground gas storage facility, and its gas security instead depends on domestic production, LNG imports, import terminals, commercial inventories and pipelines.
    5. Capacity is not the same as usable inventory: A facility has a physical capacity, but the fuel it actually holds can vary, and not all inventory is immediately accessible. During a crisis, the critical measure is how much fuel is available and at what withdrawal rate it can reach consumers.

    What does the proposed 9 MT of LNG storage actually mean?

    1. Regasification capacity is not the same as strategic inventory: India already has substantial LNG import and regasification infrastructure, but a regasification terminal’s capacity to convert LNG into natural gas does not itself constitute strategic inventory.
    2. LNG storage and underground gas storage work differently: LNG is stored as a cryogenic liquid at around 162 degrees Celsius below zero, requiring specialised insulated tanks and management of boil off gas. Underground gas storage instead regasifies the LNG first and injects the resulting natural gas into a depleted reservoir or cavern.
    3. A narrower stress test already exists: A study by the Petroleum and Natural Gas Regulatory Board (PNGRB) and the International Copper and Fertiliser (ICF) group examined how much additional LNG infrastructure would be needed to supply priority consumers for a stress period of 20 days by 2030, estimating a requirement of about 0.56 to 0.6 MT of LNG equivalent, achievable with roughly eight additional LNG tanks at a combined cost of about 1 billion dollars.
    4. The proposed reserve is an order of magnitude larger: Against the same study’s projection of roughly 58 MT of annual LNG imports, the proposed 9 MT works out to about 56 days of import cover, which is the basis for describing it as nearly two months of LNG import cover, not two months of India’s total gas consumption.

    Does all of India’s gas storage have to take the form of LNG tanks?

    1. A portfolio approach is possible: India could eventually use a combination of surface LNG tanks and underground natural gas storage rather than LNG tanks alone.
    2. A parallel proposal targets import terminals directly: A separate proposal from the Ministry of Petroleum and Natural Gas would require LNG import terminals to maintain storage capacity 10 percent above their normal operating requirement, with the additional capacity available to the government during supply or price disruptions.
    3. Depleted reservoirs offer the largest potential volumes: Depleted oil and gas reservoirs, which account for 74 percent of global working gas volume, could provide much larger volumes of underground gas storage, while salt caverns allow faster injection and withdrawal, making them more suited to shorter duration balancing.
    4. India has candidate geology but not yet usable storage: India’s sedimentary basins, including Krishna, Godavari, Cambay, Mumbai Offshore and Rajasthan, offer potential locations, but moving from geological potential to usable storage requires subsurface investigation, site selection, engineering, construction, testing, filling and pipeline integration. Rajasthan’s salt bearing formations have similarly been investigated for solution mined caverns, with suitability depending on depth, thickness, purity, geometry, groundwater and mechanical properties.

    What does the United States Strategic Petroleum Reserve show about storage as a system?

    1. Scale achieved through salt caverns: The United States Strategic Petroleum Reserve holds an authorised capacity of 714 million barrels across 60 salt caverns.
    2. Storage works only as part of an infrastructure system: The American reserve functions as an integrated network of caverns, pipelines, marine terminals and refineries, showing that strategic storage is fundamentally an infrastructure system and not simply an underground space.

    How mature are India’s crude and LPG storage systems?

    1. Crude is the most mature component: India already operates underground crude caverns and has developed the associated engineering capabilities.
    2. LPG presents a much larger scaling challenge: LPG storage is technically proven in India, but a proposed 4 MT reserve would require a substantial network of new caverns or other storage facilities, together with import terminals, pipelines, pumping systems and bottling infrastructure.
    3. The Mangaluru cavern illustrates the complexity involved: Underground construction requires geological and hydrogeological investigation, rock mechanics analysis and groundwater management, particularly where work takes place alongside operating surface facilities.

    How is India strengthening the logistics that move fuel once it is stored?

    1. India is investing to reduce reliance on foreign shipping: State run oil refiners and the Shipping Corporation of India plan to invest 1.5 to 2 billion dollars in a joint venture to acquire 59 ships.
    2. Sourcing is being diversified too: Indian Oil is expanding sourcing through new 2027 agreements with Algeria and increased purchases from the United States, while exploring direct stakes in Very Large Gas Carriers to secure greater control over its supply chain.
    3. New pipelines are expanding delivery, not storage: The PNGRB has authorised approximately 1,800 km of new LPG pipelines across six States, involving investment of around 0.7 billion dollars. These pipelines improve connections between supply sources and inland markets and reduce dependence on road movement, but they do not themselves add strategic storage.
    4. Every storage form depends on connectivity to be useful: Underground gas storage is useful only if it can inject into and withdraw from the gas grid at the required rate. LNG tanks are useful only when regasification and downstream pipelines can move the gas onward, and LPG caverns require connections to bottling and distribution systems.

    Who pays for building and running the strategic reserves?

    1. The reported cost remains unconfirmed: A reported 42 billion dollar programme, which the government has yet to confirm, combines infrastructure capital expenditure with the cost of purchasing and maintaining strategic fuel inventories, with more than half expected to go towards storage infrastructure and the balance towards purchasing and filling the reserves.
    2. A cess has been ruled out: Financing is a genuine challenge, and the government has rejected reports that a cess would be charged to pay for the reserves.
    3. Replenishment carries its own cost and risk: Stocks released during a crisis would need to be replenished, potentially when commodity and freight prices are higher, so the policy needs to settle who owns and finances the inventory, minimum stock obligations, emergency release authority, and who bears replenishment and price risk.
    4. A mixed commercial and strategic model could ease the burden: A model that combines commercial and strategic use of the same capacity could reduce the public financing burden, provided the commercially used capacity remains available during emergencies.

    Is storage capacity alone enough for India’s energy security?

    1. Building capacity is only part of the equation: A strategic reserve is effective only if India can access the fuel, transport it inland, and replenish stocks after a release.
    2. Energy security depends on an integrated framework: Reserves buy time, shipping brings the next cargo, pipelines deliver fuel inland, and governance decides how emergency releases are executed, so the real test of the programme is its ability to coordinate all these elements at once when a crisis hits.

    Conclusion

    India’s existing storage differs sharply by fuel, with crude the most developed, LPG a limited underground footprint, and natural gas without any operational underground facility. The proposed 28 MT of crude, 9 MT of LNG and 4 MT of LPG storage would mark a major expansion, but the programme remains under consideration, and its value will depend as much on shipping, pipelines and financing arrangements as on the storage capacity itself.

    Back2Basics: Petroleum and Natural Gas Regulatory Board (PNGRB)

    1. Governing law: PNGRB was set up under the Petroleum and Natural Gas Regulatory Board Act, 2006.
    2. Jurisdiction: It regulates the downstream petroleum and natural gas sector, including refining, processing, storage, transport, distribution, marketing and sale of petroleum products and natural gas, excluding production and exploration.
    3. Mandate: It authorises and lays down technical and safety standards for gas and LPG pipelines and city gas distribution networks, and protects consumer interests while promoting competitive markets.
    4. Relevance here: It is the regulator behind the LPG pipeline authorisations and the LNG stress test study referenced in this item.

    [2025] “Energy security constitutes the dominant kingpin of India’s foreign policy, and is linked with India’s overarching influence in Middle Eastern countries.” How would you integrate energy security with India’s foreign policy trajectories in the coming years?”

  • On workers rights, shrinking spaces and cruel state response

    On workers rights, shrinking spaces and cruel state response

    Why in the News

    An opinion piece has linked the invocation of the National Security Act, 1980 (NSA) against wage protesters in Noida and Ghaziabad to a longer decline in trade unionism and a spread of casual, contract based labour across India’s unorganised sector. The piece follows a wage protest by thousands of workers on 13 April, after which the Noida police floated a theory that the agitation was sponsored by “Pakistan based handlers” and radical leftists, and about 200 people were arrested, two of them booked under the NSA. The piece argues that the same law once reserved for genuine threats to State security is now being used against ordinary economic protest and ideological dissent.

    What is the National Security Act, 1980?

    1. Preventive detention power: The Act lets the Union or a State government detain a person without trial for up to twelve months where it is satisfied that the person’s activities are prejudicial to the defence of India, State security, public order or the maintenance of essential supplies.
    2. Subjective satisfaction standard: Detention rests on the detaining authority’s own assessment of a future risk rather than on a proven criminal act, so no conviction or specific offence needs to be established beforehand.
    3. Limited disclosure of grounds: The grounds for detention must ordinarily be communicated to the detainee within days of the order, but can be withheld where disclosure is considered against the public interest.
    4. Advisory Board review: An Advisory Board that includes sitting or former High Court judges reviews each detention within a set period, though its proceedings are not equivalent to a full trial.

    How did the state respond to the Noida and Ghaziabad wage protest?

    1. A wage protest turned into a security case: Thousands of workers in Noida and Ghaziabad took to the streets on 13 April demanding higher wages. The Noida police, caught off guard, floated a theory that the agitation was sponsored by “Pakistan based handlers” and radical leftists.
    2. Mass arrests followed: About 200 people were arrested on charges of inciting violence.
    3. Two individuals were booked under the NSA: Journalist Satyam Verma and Delhi University student Akriti Chaudhary were held under the NSA, for their ideological leanings rather than for any specific act.
    4. The underlying wage demand was met, but the case was not withdrawn: The Uttar Pradesh government announced higher wages for the workers, while those arrested fought a difficult legal battle and continue to face its aftermath even after coming out of jail.

    Why has India’s unorganised workforce lost the power to resist such treatment?

    1. A largely unrecorded toll: Forty thousand to fifty thousand casual workers die every year from occupational hazards in India’s unorganised sector, according to numerous research studies, and many more deaths go unrecorded in official data altogether.
    2. A sector too large to protect through informal goodwill alone: The unorganised sector employs nearly 80 percent of India’s workforce, so lapses in protection affect the majority of working people rather than a small margin.
    3. Trade unionism has receded since liberalisation: The movement that once produced leaders such as George Fernandes has weakened sharply as India’s economy has liberalised.
    4. Casualisation spread from the media into government itself: From the 1990s, news organisations began hiring staff on contract rather than on the payroll, part of a wider trend already under way in other sectors. The Centre and State governments, the country’s largest employers, eventually adopted the same contract based hiring as a way to save cost, entrenching the casualisation of labour.
    5. The result is a workforce with no leverage: Workers and employees today have little means to demand better conditions or resist injustice.
    6. Left parties have lost political weight: The Left is losing political strength and relevance, and the term “leftist” is now used as a pejorative in social media discourse.

    What historical precedent of ideological accommodation has been abandoned?

    1. Trade unions once worked across ideological lines: In Kanpur in 1985, leaders of the CITU (Centre of Indian Trade Unions), the AITUC (All India Trade Union Congress), the INTUC (Indian National Trade Union Congress) and the BMS (Bharatiya Mazdoor Sangh) shared a camaraderie and jointly took up the cause of labour despite their ideological differences.
    2. Workers won rights through sustained struggle, not political patronage: Workers in textile mills and in the defence sector earned their rights through consistent struggles against management.
    3. A trade unionist held a Brahmin dominated seat for two decades: Kanpur, despite being a predominantly Brahmin constituency, was represented in the Lok Sabha by S M Banerjee, a veteran trade union leader, from 1957 to 1977.
    4. Political rivals once mourned an ideological opponent: In 1997, the BJP’s national executive passed a resolution mourning the assassination of AISA (All India Students Association) leader and former JNU (Jawaharlal Nehru University) Students Union president Chandrashekhar, killed by Mohammed Shahabuddin in Siwan. Chandrashekhar belonged to a Naxal aligned ideological stream.
    5. That same accommodation would now be treated as suspect: The piece argues that the 1997 BJP resolution, if found in someone’s possession today, would itself risk being treated as seditious material by the Uttar Pradesh Police.

    What tension does criminalising ideological material expose?

    1. Possession of a book is being treated as an offence: A book on Marxism, or on Gaza or the Palestinian struggle, is being categorised as criminal material when found in an individual’s possession.
    2. Marxist ideology sits within India’s constitutional mainstream: Marxist ideology is as much a part of India’s political mainstream as the Congress or the BJP, and every political party that swears loyalty to the Constitution is allowed to grow and function in the country.

    Challenges to invoking the National Security Act against protest and dissent

    1. Vague and subjective grounds for invocation: The Act permits detention on the executive’s own subjective satisfaction that a person’s activities are prejudicial to public order, without a defined evidentiary threshold. Eg. In 2020, the National Security Act was invoked against a doctor in Uttar Pradesh over a public speech, and the Allahabad High Court quashed the detention in 2021 for lacking any evidence of an actual threat to public order. Fix. Require a documented, judicially reviewable threshold of imminent public order harm before invocation, rather than the detaining authority’s subjective satisfaction alone.
    2. Weak disclosure of the case against the detainee: Grounds for detention can be withheld where disclosure is considered against the public interest, leaving the detainee unable to mount a full challenge. Eg. Detainees under the Act have often learned the specific allegations against them only after approaching High Courts through habeas corpus petitions. Fix. Mandate disclosure of detention grounds within a fixed period, with any exception reviewed by a judicial officer rather than decided by the detaining authority itself.
    3. The Advisory Board functions as an executive check rather than a judicial one: The Board that reviews detention orders has historically confirmed most of the orders referred to it, and its proceedings offer limited scope for legal representation. Fix. Allow legal representation before the Advisory Board and require it to publish reasoned orders, so its review carries genuine weight.
    4. A chilling effect on journalists and students: Using a preventive security law against people over their reading material or ideological leanings, rather than any proven act, discourages lawful reporting and dissent. Eg. A Manipur journalist was detained under the Act in 2018 over a social media post criticising the state’s Chief Minister. Fix. Confine invocation of the Act to demonstrable threats to public order, with judicial pre screening required in cases involving journalists and students.

    Conclusion

    The Noida episode shows that as trade union protections have eroded and labour has been casualised, the state has increasingly reached for security legislation such as the National Security Act to answer a wage protest, extending a pattern of criminalising political dissent that earlier generations of political rivals once resisted. Whether the arrested journalist and student receive a fair hearing, and whether India’s civil liberties framework is reformed to prevent such recourse to preventive detention against economic protest, remains unresolved.

    Current Status of Personal Liberty in India

    1. A broad but conditional guarantee: Personal liberty covers freedom of speech, assembly, association, and movement under Article 19(1)(a) to (e), and the right to life and personal liberty under Article 21, all subject to reasonable restrictions the state may impose by law.
    2. A carved out exception for preventive detention: Article 22 protects against arbitrary arrest and detention, but specifically permits preventive detention laws such as the National Security Act, 1980 and the Unlawful Activities (Prevention) Act, 1967, under which a person can be held without a trial.
    3. Judicial reading has widened even as detention powers remain broad: Courts have steadily expanded what Article 21 protects, yet the power to preventively detain still rests largely on the executive’s own satisfaction rather than on prior judicial approval.

    Constitutional Provisions Related to Personal Liberty

    1. Article 19(1)(a): Guarantees freedom of speech and expression.
    2. Article 19(1)(b): Guarantees freedom of peaceful assembly.
    3. Article 19(1)(c): Guarantees freedom of association.
    4. Article 21: Guarantees the right to life and personal liberty, protecting against arbitrary state action.
    5. Article 22: Protects against arbitrary arrest and detention, while permitting preventive detention laws as a specific exception.

    Major debates surrounding Personal Liberty

    1. Security law versus proportionality: Whether preventive detention laws such as the National Security Act curtail personal liberty beyond what public order genuinely requires.
    2. Dissent versus disorder: Whether vague grounds such as public order or prejudicial activity are being used to criminalise lawful dissent rather than address genuine security threats.
    3. Judicial expansion versus executive discretion: The gap between the judiciary’s expansive reading of Article 21 protections and the limited judicial oversight available at the point of preventive arrest itself.

    Laws and Rules Governing Personal Liberty and Preventive Detention

    1. Unlawful Activities (Prevention) Act, 1967: Allows the government to designate organisations and individuals as unlawful or as terrorists, and permits prolonged detention before trial in cases involving alleged threats to India’s sovereignty and integrity.
    2. Bharatiya Nyaya Sanhita, 2023, Section 152: Replaced the sedition offence earlier defined under Section 124A of the Indian Penal Code, 1860, penalising acts that excite secession, armed rebellion, or subversive activity.
    3. Bharatiya Nagarik Suraksha Sanhita, 2023: Governs the ordinary process of arrest, remand and bail that a preventive detention law such as the National Security Act bypasses.

    [2024] Right to privacy is intrinsic to life and personal liberty and is inherently protected under Article 21 of the Constitution. Explain. In this reference discuss the law relating to D.N.A. testing of a child in the womb to establish its paternity.”

  • Why 543 should remain 543

    Why 543 should remain 543

    Why in the News

    After both Houses of Parliament were adjourned sine die, the monsoon session has yet to be formally prorogued, prompting speculation that Parliament could be reconvened for another attempt at the constitutional amendment linked to delimitation and women’s reservation. That uncertainty sharpens a question Parliament must confront: whether delimitation, the redrawing of constituency boundaries to reflect population change, must necessarily mean enlarging the Lok Sabha beyond its present 543 seats. The government has reportedly suggested increasing every State’s representation by roughly 50 percent so each keeps its current proportion of seats, a formula that leaves the proportional balance between States unchanged even as it widens the absolute gap in their voting strength.

    What is the constitutional basis linking delimitation to the Lok Sabha’s size?

    1. The representation principle: Article 81 requires that representation broadly correspond to population “so far as practicable,” while Article 82 provides for a fresh delimitation exercise after every Census.
    2. The 1976 freeze: The 42nd Constitutional Amendment, 1976 froze the inter State allocation of Lok Sabha seats on the basis of the 1971 Census, so States that succeeded in family planning were not politically penalised for slowing population growth.
    3. The extension: The freeze was extended by the 84th Constitutional Amendment, 2001 until the first Census conducted after 2026 is published.

    Why does a proportional expansion still favour larger States?

    1. Proportions stay the same: A roughly 50 percent increase in every State’s seats would keep each State’s share of the Lok Sabha unchanged from today.
    2. But the absolute gap widens: If Uttar Pradesh’s seats rose from 80 to 120 and Tamil Nadu’s from 39 to about 59, the proportional relationship would hold, yet the absolute gap in voting strength would widen from 41 Members of Parliament to around 61.
    3. Why the gap matters: Parliament votes in absolute numbers rather than proportions, so governments, confidence motions and constitutional amendments would all turn on a wider numerical gap than exists today.

    Can delimitation happen without enlarging the House?

    1. A precedent already exists: The delimitation exercise after the 2001 Census reorganised constituencies within States while leaving the existing inter State seat allocation untouched.
    2. The same principle can apply again: The Census expected in 2027 could provide the basis for redrawing constituencies within each State to reflect demographic movement and urbanisation, without increasing the Lok Sabha beyond 543 seats.

    What do other democracies show about legislature size and population growth?

    1. United States: The House of Representatives has remained at 435 voting members for more than a century, despite the country’s population growing many times over.
    2. Switzerland: The National Council has stayed at 200 members since 1963.
    3. Hungary: Parliament was reduced from 386 members to 199.
    4. Italy: The Chamber of Deputies was cut from 630 members to 400.

    What would a larger Lok Sabha do to Parliament’s own functioning?

    1. Fixed parliamentary time: Parliamentary time does not expand with the number of Members of Parliament, so even with 543 members, many already get few opportunities to speak, ask questions or raise matters of public importance.
    2. A larger House would worsen this: A Lok Sabha enlarged to more than 800 members would reduce those opportunities further even as numerical representation rises.
    3. Already outsized constituencies: Indian Members of Parliament already represent the largest average constituencies among the world’s major democracies, several times the size of a United States congressional district or a United Kingdom constituency.

    Where should the accessibility pressure from population growth be absorbed instead?

    1. No federal arithmetic constraint at the State level: A larger Vidhan Sabha, or State Legislative Assembly, shifts no balance between States, since each Assembly answers only to its own State’s population.
    2. The proposed shift: Strengthening representation through more Members of the Legislative Assembly and smaller Assembly constituencies can bring representatives closer to citizens without enlarging the national legislature, since most citizens approach elected representatives over matters substantially within the State sphere, such as roads, schools and hospitals.

    How does women’s reservation fit within a frozen 543 seat House?

    1. The existing House can absorb it: One third of the present Lok Sabha is approximately 181 seats, and women’s constitutionally promised representation can be delivered within the existing House of 543 rather than through additional seats.
    2. What reservation is meant to do: The purpose of reservation is to alter who occupies parliamentary seats, not to create hundreds of additional ones.
    3. The risk of combining it with enlargement: An expansion on the proposed scale could raise the number of women Members of Parliament while also deepening the numerical dominance of the already larger States, so a reform addressing one imbalance could deepen another.

    Challenges to keeping the Lok Sabha frozen at 543

    1. Political resistance from faster growing States: States whose population has grown fastest since 1971 may resist a freeze that keeps their Lok Sabha strength unchanged relative to their current population share. Eg. States with higher population growth could press for the government’s enlargement proposal precisely because it raises their absolute seat count. Fix. Pair the freeze with strengthened State level representation, so faster growing States gain proportionate voice through larger Assemblies rather than through the Lok Sabha.
    2. Redrawing constituencies within States is itself contentious: Internal redelimitation shifts constituency boundaries and can alter the political weight of specific regions or social groups within a State, so it invites dispute even where a State’s total seat count is untouched. Eg. The Jammu and Kashmir Delimitation Commission’s 2022 exercise was contested by opposition parties as tilting the balance toward one region over another. Fix. Anchor any internal redelimitation in updated, transparent 2027 Census data, with a public objection and hearing process before boundaries are finalised.
    3. A prolonged freeze delays updated representation: Continuing the freeze until the first post 2026 Census pushes any change in the Lok Sabha’s internal distribution well into the future, leaving current population shifts unreflected for years. Eg. The freeze first imposed in 1976 has already run for close to half a century without a fresh count of inter State seat shares. Fix. Commit to a fixed timeline for the post 2026 Census based delimitation, so the freeze does not become indefinite by default.

    Conclusion

    Delimitation and the size of the Lok Sabha are separable questions, and preserving the House at 543 seats while redrawing constituencies within States and absorbing accessibility pressure through larger State Assemblies would deliver updated representation, women’s reservation and federal fairness without disturbing the balance between larger and smaller States. Whether Parliament chooses this route or an across the board enlargement that widens the absolute gap between States even as it keeps their proportions unchanged will shape the federal balance of the Republic for decades, a question that stays open as long as the constitutional amendment remains pending.

    Back2Basics: What is a Delimitation Commission?

    1. What it is: A Delimitation Commission is a body constituted under a Delimitation Act to redraw the boundaries of parliamentary and Assembly constituencies based on the latest Census.
    2. How many: Delimitation Commissions have been constituted four times in independent India, in 1952, 1963, 1973 and 2002.
    3. Legal basis: Its orders have the force of law and cannot be challenged in a court.
    4. Latest exercise: The most recent Commission, based on the 2001 Census, redrew constituency boundaries within States without altering the inter State allocation of Lok Sabha seats frozen since 1976.

    [2024] How many Delimitation Commissions have been constituted by the Government of India till December 2023?

    [A] One

    [B] Two

    [C] Three

    [D] Four

  • A.P. to become third subsea hub on data centre buildout

    A.P. to become third subsea hub on data centre buildout

    Why in the News

    Technology majors Microsoft and Google are building new subsea cable landing stations on the coast of Andhra Pradesh as part of an artificial intelligence linked data centre buildout in the State. Microsoft is part of a consortium with Lightstorm and the Singaporean telecom operator Singtel to land the 3,600 kilometre India Southeast Asia Submarine Cable System, while Google’s globe spanning America India Connect system will land at Visakhapatnam, where the company’s own data centre complex is coming up. Once complete, the buildout will give India, after Mumbai and Chennai, a third digital international gateway, even as a global shortage of fibre threatens to slow the inland network these projects still need.

    What is a subsea cable landing station?

    1. Definition: A subsea cable landing station is the facility where an undersea fibre optic cable comes ashore and connects to a country’s terrestrial network, carrying the bulk of international internet traffic.
    2. Global reliance: The overwhelming majority of the world’s international data traffic travels through such undersea cable systems rather than satellites, making landing stations critical infrastructure.
    3. India’s current concentration: India’s existing landing stations are concentrated in Mumbai and Chennai, leaving the country reliant on a small number of routes.

    What new cable infrastructure is being built off Andhra Pradesh’s coast?

    1. Microsoft’s consortium project: Microsoft, alongside Lightstorm and Singtel, is landing the 3,600 kilometre India Southeast Asia Submarine Cable System, expected to be ready for service in the fourth quarter of 2029.
    2. Google’s own system: Google’s America India Connect system will land at Visakhapatnam, alongside the data centre complex the company is building there as part of what a Google executive described as an artificial intelligence hub.

    What does this make Visakhapatnam?

    1. India’s third gateway: After Mumbai and Chennai, Visakhapatnam becomes India’s third digital international subsea gateway, connecting the country directly with Southeast Asia, Australia and the Middle East.
    2. A new corridor: Lightstorm’s chief executive has described the India Southeast Asia system, which also connects to Chennai, as providing a fresh corridor to South Asia from Singapore and Malaysia.

    Why are companies building on the east coast now?

    1. Ageing existing infrastructure: Most cables currently connecting India’s east coast are old, are already filled to capacity and are approaching the end of their working life.
    2. A search for resilience: Companies are also seeking to reduce the risk of relying on a single route by adding cables on India’s east coast, citing instability in West Asia as a reason to build in an alternate location.

    What inland infrastructure does this buildout require?

    1. A nationwide undertaking: Both projects require installing and lighting thousands of kilometres of new terrestrial fibre linking the coast to major cities, a scale one company executive described as spanning the entire country.
    2. A dedicated corridor: Lightstorm is expected to build a terrestrial corridor connecting Machilipatnam to Mumbai and Hyderabad, and Chennai to Hyderabad and Mumbai, with matching bandwidth.
    3. A global fibre shortage: Fibre, its components and its raw material are in short supply worldwide, including from Indian manufacturers, a constraint industry executives describe as unprecedented in over a decade.

    What will Google’s Visakhapatnam facility do?

    1. Focused on inference: The facility will focus on inference work rather than power intensive training runs, serving domestic enterprises and government agencies given the deep adoption of artificial intelligence across government service delivery.
    2. Power and water choices: Google is seeking to source as much renewable power for the project as possible and is using air cooling technology to minimise water use.

    Challenges to the subsea cable buildout

    1. A global fibre shortage: A worldwide shortage of fibre and its raw material, unprecedented in over a decade, could delay the inland network these projects still need. Eg. Industry executives report that fibre is out of stock across the globe, including from Indian manufacturers. Fix. Expand domestic fibre manufacturing capacity through targeted incentives so the inland rollout is not held back by global supply constraints.
    2. Physical vulnerability of undersea cables: Undersea cables remain exposed to accidental damage from fishing and anchoring activity and to disruption in contested waters. Eg. India’s existing east coast cables are already ageing and running close to capacity, leaving few redundant routes today. Fix. Build multiple, geographically separated landing points and routes, as the new Visakhapatnam gateway is itself intended to do, so a single cable fault cannot isolate India’s connectivity.
    3. Concentration of ownership with foreign firms: The new cable systems and the data centres they serve are being built and operated by foreign technology majors, so India’s expanding gateway capacity depends on the investment decisions of a small number of firms. Eg. Both the India Southeast Asia system and the America India Connect system are anchored by Microsoft and Google respectively rather than Indian carriers. Fix. Encourage Indian telecom operators to invest jointly in landing station capacity so gateway control is not concentrated entirely with foreign firms.

    Conclusion

    Andhra Pradesh’s coastline is emerging as India’s third major digital gateway, as Microsoft and Google build new subsea cable systems into Visakhapatnam alongside the data centres driving the region’s artificial intelligence buildout. Delivering on that promise depends on inland fibre rollout keeping pace despite a global supply crunch, and on India diversifying its cable landing points and ownership so its expanding digital infrastructure does not remain concentrated in a handful of ageing routes and foreign owned systems.

    [2023] “What is the status of digitalization in the Indian economy? Examine the problems faced in this regard and suggest improvements.”

  • Carney’s defiance is well thought out

    Carney’s defiance is well thought out

    Why in the News

    Canada’s Prime Minister has walked away from trade negotiations with the United States after Washington put forward terms that would have cost Canada its sovereignty, key industries, French language protections and its freedom to negotiate with other countries. He has also announced retaliatory tariffs matching the new United States tariffs dollar for dollar, stating that the Americans “asked too much and offered too little.” The move tests whether a middle power, an economy that sends roughly three quarters of its exports into a market ten times its size, can resist pressure from a dominant trading partner without folding, and it carries lessons for other countries, including India, that are negotiating their own terms with Washington.

    What calculations underlie the decision to walk away?

    1. Broad domestic backing: The stance draws support even from the opposition Conservative party, amid public frustration with the United States President’s repeated talk of making Canada the fifty first state.
    2. A contained tariff footprint: The new tariffs apply to only about 5 percent of Canada’s overall exports to the United States, worth roughly 20 billion dollars, limiting the immediate domestic cost of retaliation.
    3. A calculated bet on mutual damage: A breakdown in trade relations is expected to hurt the United States as well, so Canada does not need to win the confrontation outright, only to make the arithmetic politically painful in Washington.

    How exposed is the United States to a breakdown with Canada?

    1. A leading export destination: Canada is the largest export market for 26 American states and among the top three trading partners for 45 of the 50 states.
    2. Energy dependence: Canada supplies roughly 60 percent of America’s crude oil imports, and Canadian electricity helps power grids in New England and the upper Midwest.
    3. Critical inputs: Canadian potash is vital to American agriculture, while Canadian critical minerals feed strategically important American supply chains.

    Why is the timing unfavourable for Washington?

    1. Domestic economic strain: A stalemate with Iran has pushed United States gasoline prices above 4 dollars a gallon, while the 30 year Treasury yield has climbed above 5.3 percent, its highest level since 2007.
    2. Fiscal and political weakness: Federal debt has crossed 40 trillion dollars, and the United States President’s net approval rating has fallen to minus 26 percent, narrowing his room to absorb a prolonged trade standoff.

    What broader pattern does this defiance respond to?

    1. A repeated negotiating playbook: Governments from Mexico City to Brussels to Tokyo have spent the past year confronting an American administration that treats a signed trade agreement as an opening bid that can be revisited whenever it suits it, coercing partners with escalating tariff threats and demanding unilateral concessions.
    2. Prior diversification, not improvisation: The Canadian Prime Minister had earlier warned that middle powers must stand up or risk ending up “on the menu,” and spent close to a year building trade ties with China, the Gulf and Asia, including India, so that a closed door in Washington did not mean a locked room globally.

    Challenges to Canada’s defiance strategy

    1. Economic exposure to a sustained standoff: Canada still sends roughly three quarters of its exports to an economy ten times its own size, so a prolonged confrontation could cost jobs and growth even if it wins the political argument. Eg. Estimates cited alongside the retaliatory tariffs put up to 90,000 Canadian jobs at risk from a sustained trade confrontation. Fix. Continue diversifying export markets by deepening the trade ties already being built with China, the Gulf and Asia.
    2. A narrow tariff footprint limits leverage: The new tariffs cover only about 5 percent of Canada’s exports to the United States, so retaliation alone may be too small to force a reversal in Washington. Eg. Even a full breakdown leaves most of Canada’s three quarter dependence on the United States market untouched. Fix. Extend retaliation toward strategically sensitive sectors such as crude oil, electricity and critical minerals, where Canada supplies a large share of United States demand.
    3. Domestic political risk if pain outlasts patience: Sustained economic pain could erode the broad backing that currently underwrites the stance, including support from the opposition. Eg. Higher fuel and consumer prices from a prolonged standoff could shift Canadian public opinion before comparable pressure is felt in Washington. Fix. Time targeted relief for the sectors affected by the new tariffs so public patience holds through the standoff.

    Conclusion

    The decision to reject an unfavourable trade deal, backed by calculated retaliation and prior diversification of trade ties, is being read as proof that a middle power can resist pressure from a much larger economy without folding. Whether the strategy succeeds depends on whether Canada’s own economic pain stays contained and whether Washington’s vulnerabilities, from energy prices to approval ratings, bite hard enough to force a reversal. For India, still negotiating its own trade deal with Washington, the lesson is not to reject a deal outright but to know precisely which concessions it can never afford to make.

    [2025] What are the challenges before the Indian economy when the world is moving away from free trade and multilateralism to protectionism and bilateralism? How can these challenges be met?”

  • Economy is resilient, but risks remain

    Economy is resilient, but risks remain

    Why in the News

    The State of the Economy report, compiled by economists at the Reserve Bank of India (RBI), together with the finance ministry’s monthly economic review, has found that India’s underlying growth momentum held up through the first quarter of the financial year. Both readings point to firm household consumption, industrial output and credit growth even as global conditions stay unsettled. The outlook nonetheless remains clouded by continuing geopolitical and trade related uncertainty, volatile energy prices and a strengthening El Niño (a periodic warming of central and eastern Pacific Ocean waters that disrupts monsoon rainfall patterns), risks that could weigh on growth just as the National Statistics Office (NSO) prepares to release its first quarter Gross Domestic Product (GDP) estimate.

    What signals point to resilient domestic growth?

    1. Steady consumption indicators: E way bill generation has stayed firm, Goods and Services Tax (GST) revenues have remained healthy, and passenger vehicle, tractor and two wheeler sales have all been strong.
    2. Firm industrial output: The Index of Industrial Production (IIP), a measure of output across mining, manufacturing and electricity, rose 5.8 percent in the quarter, aided by the manufacturing sector, while electricity demand held steady.
    3. Corporate profitability and credit growth: Firms in both manufacturing and services reported improved operating profits, and bank credit has grown at a brisk pace across both industrial and retail lending.
    4. Monsoon recovery and exports: A recovery in the monsoon has supported kharif sowing, and exports excluding oil grew 12.8 percent in the first four months of the year, aided by the currency’s depreciation.
    5. Public capital spending: The Centre’s own expenditure grew by roughly 24 percent in the quarter, keeping public capital spending on track.

    What risks could weigh on this resilience?

    1. External uncertainty: Continuing geopolitical and trade related tensions, along with supply chain pressures, threaten to unsettle the momentum built up domestically.
    2. Volatile energy prices: Fluctuating global energy prices raise input costs across manufacturing and transport and feed inflation risk.
    3. A strengthening El Niño: A stronger El Niño could unsettle the rainfall gains that supported this quarter’s kharif sowing and rural demand.
    4. A cautious institutional tone: The finance ministry’s economic review itself notes that “recent years have been a time for hunkering down and battening down the hatches,” and expects coming years to be no exception.

    What does the growth trajectory imply for the GDP estimate?

    1. RBI’s own projection: At its August Monetary Policy Committee (MPC) meeting, the central bank projected 7 percent growth for the first quarter, a figure broadly matched by assessments from agencies such as Crisil and ICRA.
    2. The GDP release ahead: The National Statistics Office is set to release its first quarter GDP estimate shortly, with growth seen as likely to surprise on the upside even as the external environment continues to weigh on the outlook.

    Conclusion

    Domestic demand, industrial output and credit growth show the economy’s underlying momentum has held up, but persistent external risks, from trade tensions to volatile energy prices and a strengthening El Niño, mean policymakers cannot afford complacency. The National Statistics Office’s forthcoming GDP estimate will offer the first concrete test of whether this resilience is translating into headline growth, even as the external environment continues to demand a calibrated policy response.

    Back2Basics: What is the State of the Economy report?

    1. Publisher: It is a monthly assessment published in the Reserve Bank of India’s Bulletin, written by economists in the RBI’s Monetary Policy Department.
    2. Status: It carries a standard disclaimer that the views expressed are those of the authors and not necessarily those of the RBI.
    3. Purpose: It reviews high frequency indicators of growth, inflation and the external sector to assess the economy’s current momentum.

    [2021] “Explain the difference between computing methodology of India’s Gross Domestic Product(GDP) before the year 2015 and after the year 2015.”

  • PSU banks more efficient than private peers: EAC-PM

    PSU banks more efficient than private peers: EAC-PM

    Why in the News

    A paper by two economists for the Economic Advisory Council to the Prime Minister (EAC-PM), a body that advises the Prime Minister on economic policy questions, found that public sector banks (PSBs) are more efficient than private and foreign banks.

    Titled “Reforms, Efficiency, and Productivity of Indian Banking Sector in the Last Decade: DEA Approach”, the paper used Data Envelopment Analysis (DEA), a method that measures how far a unit could shrink its inputs while producing the same output, to compare 47 banks.

    What does the study find?

    1. PSBs improved significantly: During 2014-15 to 2025-26, PSBs recorded average efficiency of 88.53%, compared with 85.62% for private banks. Foreign banks led over the full period: Foreign banks had the highest 12-year average of 88.98%, but their efficiency declined from 95.86% in 2014-15. Most efficient banks:
    2. HSBC and JPMorgan Chase: 100% efficiency in all 12 years.
    3. HDFC Bank: 97.54% average efficiency among private banks.
    4. State Bank of India (SBI): 97.49%, highest among PSBs.
    5. DBS Bank India: Lowest single-year efficiency of 40.12% in 2021-22, linked to its merger with Lakshmi Vilas Bank.
    6. Impact of PSB mergers: PSBs were relatively less efficient than private banks during FY2019 to FY2022, partly due to the merger and rationalisation of branches, employees and business operations.

    Data Envelopment Analysis (DEA)

    1. DEA is a method for measuring the relative efficiency of units, here banks, that produce the same kind of output from different combinations of inputs.
    2. An efficiency score below 100% means the unit could reduce its inputs by that shortfall and still produce the same output. Eg. A score of 85% means the unit could cut inputs by 15% without any loss of output.

    “[2024] Consider the following statements:
    Statement-I: Syndicated lending spreads the risk of borrower default across multiple lenders.
    Statement-II: The syndicated loan can be a fixed amount/lump sum of funds, but cannot be a credit line.
    Which one of the following is correct in respect of the above statements?
    (a) Both Statement-I and Statement-II are correct and Statement-II explains Statement-I
    (b) Both Statement-I and Statement-II are correct, but Statement-II does not explain Statement-I
    (c) Statement-I is correct, but Statement-II is incorrect
    (d) Statement-I is incorrect, but Statement-II is correct