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  • Experts back warnings for high level of each nutrient — not just fats, sugar, or salt content

    Why in the News

    A front of pack warning should be triggered when a food carries a high level of any single nutrient, and not only when it is high in two nutrients at once. That position has been put to the Food Safety and Standards Authority of India (FSSAI), the country’s food safety regulator, by global nutrition researchers and by the ICMR National Institute of Nutrition (NIN), whose Dietary Guidelines for Indians 2024 supply the thresholds being used. FSSAI has proposed a red hexagonal warning triggered only where a food is high in two of three nutrients in the first phase, moving to each nutrient in the second. The Supreme Court is separately examining a petition to make front of pack labels mandatory on foods high in fats, sugar or salt. What is contested is how far the first phase label can be diluted before it stops doing the work it exists to do.

    What is a front of pack warning label?

    1. Front of pack warning label: A mark placed on the front face of a packaged food declaring that the product carries a high level of a nutrient of concern.
    2. Nutrients covered: The Indian proposal covers fats, sugar and salt.
    3. Threshold basis: A warning appears once the nutrient crosses a defined cut off, and those cut offs are referenced to the Dietary Guidelines for Indians 2024.

    What do the experts want the trigger rule to be?

    1. Single nutrient trigger: The warning should be triggered for each nutrient separately, so a food high in salt and in fat carries a red hexagon stating each.
    2. Multiple labels as a signal: Evidence from Chile shows consumers understand products carrying more warning labels to be less healthy than products with fewer or none.
    3. Evidence of impact: Warning labels are the only type of label with real world evidence of impact. That evidence covers consumer beliefs and behaviour, the nutritional profile of the food supply, and the healthfulness of purchases and dietary intake.

    Why are the colour and background of the label contested?

    1. Visual absorption into packaging: A colour based label placed over packaging of a similar colour becomes less noticeable, and surrounding graphic elements can minimise it further.
    2. Black hexagons: The experts asked for black hexagonal boxes in place of the red one, since black and white designs are harder to visually mask on colourful packaging.
    3. A fixed contrasting background: Mandating a white background behind the warning preserves its purpose, which is rapid identification at a glance.

    What does the ICMR National Institute of Nutrition add on thresholds?

    1. Energy density as the basis: The thresholds for identifying foods high in fats, sugars and salt should be set on the total energy density of the food.
    2. No cut off read in isolation: Added fat and added sugar cut offs should not be considered apart from the accompanying energy and total nutrient content. FSSAI told the court that the warnings would be triggered on the levels of added sugars and added fats.
    3. The failure mode of a two nutrient rule: Products substantially high in one nutrient escape consumer attention while the two nutrient trigger operates.
    4. Higher thresholds, time bound: Where phasing is operationally necessary, a time bound transition at higher thresholds, progressively lowered, avoids indefinite postponement.

    What has the Supreme Court asked the regulator for?

    1. A justified timeline: The Court has asked FSSAI for a scientifically justified and clearly defined timeline for implementing the second phase.
    2. The recorded reason: Without such a timeline, the Court said, implementation may take a backseat or be postponed indefinitely.
    3. Sweetened beverages: The Court also sought clarity on which sweetened beverages will receive the warning in the first phase.

    Challenges to the front of pack warning label

    1. Reach into the unpackaged food trade: A label rule touches only packaged food, and a large share of what is sold in India moves loose or through small manufacturers. Eg. Street sold namkeen and locally packed sweets carry no nutrition panel at all.
      The Fix: Tie labelling compliance to the FSSAI licence and registration number small manufacturers already hold, so enforcement runs through an existing list.
    2. Reformulation to the threshold rather than to health: A manufacturer can cut a flagged nutrient just below the cut off while leaving the product’s overall energy unchanged. Eg. Sugar trimmed slightly and offset by fat keeps a product under the trigger.
      The Fix: Review the cut offs on a fixed cycle against reformulation data collected from the market.
    3. Legibility on small packs: A hexagon on a single serve sachet occupies too little area to be read at a glance, which defeats the design’s purpose. Eg. Single serve sachets dominate rural sales of biscuits, chips and instant noodles.
      The Fix: Set a minimum label size as a share of the front panel rather than as an absolute dimension.
    4. Regulatory delay through consultation: Labelling rules draw sustained industry objection, and each further round of consultation pushes implementation out. Eg. The Indian Nutrition Rating star system, put out in draft in 2022, has still not taken effect.
      The Fix: Notify the second phase thresholds in the same regulation as the first, so the transition needs no fresh rule making.

    Conclusion

    The question is no longer whether India will label packaged food but whether the first version of the label is strong enough to be worth carrying. A trigger that waits for a second nutrient builds a gap into the rule and gives manufacturers a period in which the worst single nutrient products stay unmarked. The regulator now has to answer the Court with a dated transition rather than a stated intention, and that answer is what decides the value of everything already agreed.

    Back2Basics: Food Safety and Standards Authority of India

    1. Statutory body established under the Food Safety and Standards Act, 2006.
    2. Functions under the Ministry of Health and Family Welfare.
    3. Lays down science based standards for food articles and regulates their manufacture, storage, distribution, sale and import.
    4. Issues licences and registrations to food businesses and runs the national food safety surveillance system.

    Matching Previous Year Question

    “[2016] With reference to pre-packaged items in India, it is mandatory to the manufacturer to put which of the following information on the main label, as per the Food Safety and Standards (Packaging and Labelling) Regulations, 2011? 1. List of ingredients including additives 2. Nutrition information 3. Recommendation, if any, made by the medical profession about the possibility of any allergic reactions 4. Vegetarian/non-vegetarian Select the correct answer using the code given below. (a) 1, 2 and 3 (b) 2, 3 and 4 (c) 1, 2 and 4 (d) 1 and 4 only Answer: (c)”

  • Our healthcare boom hides a public-system deficit

    Why in the News

    The most revealing number in India’s healthcare record is government health expenditure at 1.43 per cent of GDP in 2022 to 2023, against the 2.5 per cent target set by the National Health Policy 2017. Almost every visible measure of healthcare has expanded, with medical colleges and seats multiplied, the footprint of the All India Institute of Medical Sciences (AIIMS) network widened, and Ayushman Bharat established as one of the world’s largest publicly funded health insurance programmes. The latest report of the Parliamentary Standing Committee on Health and Family Welfare finds a system still struggling with basic capacity, affordability and regulation. The tension is that expansion has been measured in inputs the state can count, while the outcome that decides the result, whether a family is less exposed when illness strikes, is set by financing the state has not provided.

    What does government health expenditure as a share of GDP measure?

    1. What the ratio counts: It measures spending on health by the Centre, the states and local bodies, set against the size of the economy, so it rises only when health spending grows faster than output does.
    2. Why the share and not the amount: An absolute figure grows every year with prices and with the economy, so only the share shows whether health is gaining or losing ground against competing claims on public money.
    3. The benchmark it is read against: The National Health Policy 2017 fixed 2.5 per cent of GDP as the target, and the distance between that and the actual figure is what the public system’s shortfall is measured by.

    Why has expanding medical education not fixed the distribution of care?

    1. The expansion is real: The number of medical colleges has risen to 818, and undergraduate medical seats have reached 1,28,875.
    2. The problem was never the count of doctors: It was where they practise, who can afford them, and whether the system has the infrastructure to use them.
    3. Specialists are missing where they are most needed: The Committee finds specialist shortages at rural community health centres of roughly 70 to 80 per cent.
    4. Facilities without a building: There are 17,788 sub centres with no building of their own.
    5. Education as a commercial sector: Medical education has itself become a major commercial sector, with private and public private partnership models playing an important role, and once medical seats become valuable commercial assets the integrity of the regulator becomes the live question.

    What does the private sector’s share of care cost a patient?

    1. Where care actually happens: Citing the National Sample Survey Office (NSSO) 80th round of 2025, more than 60 per cent of hospitalisations and around 70 per cent of outpatient care are serviced by the private sector.
    2. The price difference: Average hospitalisation expenditure is approximately Rs 6,631 in government hospitals, against Rs 50,508 in private hospitals.
    3. How the state imposes a cost without charging one: The state does not have to bill a patient to place the cost of private treatment on them, and only has to fail to provide a realistic public alternative.

    Why does insurance leave both prices and the missing middle unaddressed?

    1. What insurance has delivered: Ayushman Bharat has helped millions of families obtain hospital care they might otherwise have been unable to afford.
    2. Insurance pays the bill without controlling the price: If treatment costs Rs 5 lakh and insurance pays that amount, the patient is protected from immediate financial ruin while the healthcare system has still consumed the same sum.
    3. Someone eventually pays: If prices continue rising, the cost falls somewhere, on the government, the insurer, the employer or the patient.
    4. The missing middle: More than 40 crore Indians remain outside comprehensive financial protection, being too well off for the scheme and too poor for private cover.
    5. Out of pocket spending stays high: Such spending has fallen substantially and still accounted for 43.4 per cent of total health expenditure in 2022 to 2023.

    What is private capital buying, and what should the test of it be?

    1. Where the capital is going: Major transactions involving Manipal Health Enterprises, CARE Hospitals, KIMS, Rainbow Children’s Hospital and several diagnostic chains illustrate the growing appetite for healthcare assets.
    2. What attracts investors: Recurring demand, consolidation opportunities and the ability to build scalable chains.
    3. Capital is not the problem: India needs enormous investment, and the open question is what that investment actually produces.
    4. The tests to apply: Whether it creates capacity in under served districts, makes treatment cheaper and strengthens primary care, or instead acquires existing businesses, consolidates markets and pursues the most profitable segments.
    5. The standard proposed: The 2026 Lancet Commission Report on a Citizen-Centred Health System for India argues for a stronger publicly financed and publicly provided health system as the foundation of universal healthcare.

    Challenges to a publicly financed health system

    1. Spending is stuck below the policy’s own target: The share of public money reaching health has not moved to the level the policy set, so every other reform runs into a financing ceiling. Eg. Only around 40 per cent of public health funds go to primary care, against the National Health Policy 2017 target of two thirds.
      The Fix: Ring fence a rising share of the health budget for primary and preventive care, with an annual reporting requirement against the two thirds target.
    2. Health is a State subject and capacity varies sharply: Delivery depends on the state, so a single national design lands on very different administrative systems. Eg. Kerala’s decentralised public health system and Tamil Nadu’s doorstep care programme for the elderly and for patients with non communicable diseases have no counterpart in many states.
      The Fix: Tie central health transfers to state level outcome indicators rather than to expenditure alone, so building capacity is what gets rewarded.
    3. Public beds sit where the patients are not: Public capacity is concentrated in cities while most of the population is rural, so proximity rather than price decides who reaches care. Eg. 73 per cent of public hospital beds are in urban areas.
      The Fix: Make rural service a condition of subsidised medical education, with the posting tied to the district that lacks that specialty.
    4. Money collected for health does not reach health: A cess raised for a stated purpose does not arrive in the fund built for it, so the shortfall persists even where the revenue exists. Eg. The Comptroller and Auditor General has reported a gap of over Rs 43,000 crore in the transfer of health cess to the Pradhan Mantri Swasthya Suraksha Nidhi.
      The Fix: Make the transfer of the health cess to that fund automatic, and report the closing balance in the annual budget documents.
    5. Regulation of a commercialised sector is weak: Where private providers deliver most of the care, the state’s only lever over price and quality is a regulatory capacity it has not built. Eg. There is no national mechanism that caps the cost of high cost private procedures.
      The Fix: Enforce the Clinical Establishments (Registration and Regulation) Act, 2010 across states, with published standard treatment guidelines and rate ranges.

    Conclusion

    The expansion is real and it is being measured against the wrong thing. Counting colleges, seats, cards and institutions records what the state has built, and records nothing about whether a household can reach care it can pay for. The unresolved tension is that the public system is being asked to carry a universal promise on a share of national income that has not risen to meet it, while the private system it defers to sets the price. What to watch is whether that financing share moves, because every other reform in this area sits downstream of it.

    Public Healthcare System in India

    1. Constitutional placement: Public health and hospitals are a State subject in the Seventh Schedule, with the Centre acting through centrally sponsored schemes and coordination rather than direct delivery.
    2. How delivery is organised: Rural care runs in three tiers, the sub centre, the primary health centre and the community health centre, with district hospitals and medical college hospitals above them.
    3. Where the disease burden now sits: Non communicable diseases account for around 66 per cent of total deaths, with cardiovascular disease and chronic respiratory disease the leading causes.
    4. Scale of the primary care network: More than 1,85,000 Ayushman Arogya Mandirs, formerly health and wellness centres, are operational.

    Government Initiatives for Public Healthcare

    1. National Health Mission: It is the umbrella programme funding rural and urban public health delivery through the states, and it created the Accredited Social Health Activist (ASHA) cadre in 2005.
    2. Pradhan Mantri Swasthya Suraksha Yojana: It addresses regional imbalance in tertiary care by setting up new AIIMS institutions and upgrading existing government medical colleges.
    3. Ayushman Bharat Digital Mission: It builds the digital health record layer, with Ayushman Bharat Health Accounts giving each person a portable health identifier.
    4. eSanjeevani: The national telemedicine service links primary health facilities to specialists on a hub and spoke model, extending specialist advice to remote and tribal areas.
    5. Pradhan Mantri Bhartiya Janaushadhi Pariyojana: Its Janaushadhi Kendras supply quality generic medicines at low prices, reducing the medicines share of household health spending.

    Back2Basics

    1. What it is: The Committee on Health and Family Welfare is one of the 24 department related standing committees of Parliament.
    2. Composition: Each such committee has 31 members, 21 from the Lok Sabha and 10 from the Rajya Sabha, all nominated rather than elected, for a tenure of one year.
    3. Origin: The system of 17 such committees was constituted with effect from 8 April 1993, and was restructured in July 2004 to the present 24.
    4. Weight of its reports: It examines the ministry’s demands for grants, bills and policy, and its recommendations are advisory rather than binding on the government.

    Matching Previous Year Question

    “[2024, GS2, 15 marks] In a crucial domain like the public healthcare system, the Indian State should play a vital role to contain the adverse impact of marketisation of the system. Suggest some measures through which the State can enhance the reach of public healthcare at the grassroots level.”

  • Public trust & public approval not same; trust demands fairness: CJI

    Why in the News

    The Chief Justice of India has said that public trust in the judiciary is not the same thing as public approval, because trust is not earned by giving people the outcomes they want but by ensuring fairness of process. The remarks answered concerns raised at the same event by senior counsel about the administrative reforms the judiciary needs in order to deal with challenges such as the appointment of judges. The stated position was that reform must be the rule, and that no institution can survive or take pride in remaining static. The tension is that the same address defended two internal mechanisms, judicial appointments through the Collegium and the handling of complaints against judges, while grounding institutional confidence in a court’s willingness to be examined, questioned and, where necessary, criticised.

    What is the Collegium system?

    1. What it is: The Collegium is the mechanism by which judges of the Supreme Court and the High Courts are selected by judges themselves rather than by the executive.
    2. Where it comes from: It has no textual basis in the Constitution, and was created by judicial interpretation of Articles 124 and 217 across the three judges cases of 1981, 1993 and 1998.
    3. Composition: For a Supreme Court appointment it comprises the Chief Justice of India and the four senior most judges of the Court, whose recommendation then goes to the Union government for the warrant of appointment.
    4. The failed alternative: The National Judicial Appointments Commission, created by the Ninety ninth Constitutional Amendment Act, 2014, was struck down by a five judge Constitution Bench in 2015, which restored the Collegium.

    What does transparency mean for a court?

    1. Not only open doors: Transparency is not simply a matter of open doors and public hearings, though it certainly includes those things.
    2. The reasoning, not the result: It means the reasoning behind a decision, and not merely its result, can be examined by anyone who cares to look, including the very people the decision goes against.
    3. A verdict without reasoning is not transparency: A court that announces its verdicts but keeps its reasoning to itself has not really been transparent, whatever else it may have done.
    4. What the phrase demands: “Seen to be done” means a fair hearing conducted honestly in the open, and a system that remains willing to be examined on whether it has kept its own word.

    How is public trust different from public approval?

    1. The difference matters a great deal: A court does not earn trust by being liked, or by handing out the outcomes people wanted.
    2. The test is the losing party: Trust is earned when the people who lost, who wanted an entirely different result, still walk away believing that the process which decided against them was fair.
    3. Harder and more valuable: That is a far harder thing to earn than approval, and far more valuable than it.
    4. What trust is for: Public trust is not decoration for the judiciary, and is the only currency in which authority is ever paid.

    What was said on judicial appointments?

    1. Reform as the standing rule: No institution can survive or take pride in remaining static, so reform is treated as a welcome step rather than a concession.
    2. Limits of a public answer: Some questions may not be prudent to respond to from a public platform, and the answers to them are legal answers set in the historical background of how the Collegium developed and how successfully it has worked.
    3. The record of appointments: There is hardly any impediment between the appointments by the Union of India and the recommendations of the Collegium, which itself indicates the kind of deliberation that goes into a final recommendation.

    How are complaints against judges handled?

    1. The internal mechanism: The mechanism the Supreme Court and the High Courts have developed for complaints against judges is described as robust, responsive and very timely.
    2. The misuse risk: Given a choice, a judicial officer will invite a complaint at every stage, whether passing an interlocutory order, adjourning a case or passing a final decree.
    3. The open question: Whether every such complaint should be brought onto a public platform or a website, or whether a strong internal mechanism should deal with it with complete objectivity and a dispassionate approach, is treated as a seriously debatable issue.
    4. Not treated as settled: The mechanism is described as well established, and as always subject to reforms and qualitative improvements.

    Why is criticism treated as compatible with institutional confidence?

    1. Exposure keeps institutions clean: Recalling Justice Krishna Iyer, institutions do not stay clean by being shielded from scrutiny, and stay clean by being repeatedly exposed to it and repeatedly surviving that exposure.
    2. The textbook proceedings: Suo motu proceedings concerning a National Council of Educational Research and Training (NCERT) textbook, which carried a chapter on corruption in the judiciary, became an occasion to consider the relationship between legitimate criticism and public confidence in the institution.
    3. What the order said: The order reiterated that the judiciary, as an institution, is not and cannot be averse to criticism.
    4. Why that follows: A court cannot seek the confidence of the public by placing itself beyond scrutiny, and must remain willing to be examined, questioned and, where necessary, criticised.

    Challenges to public trust in the judiciary

    1. Opacity of the appointment process: The Collegium publishes its resolutions but not the material or the comparative assessment behind a name, so the standard of examinable reasoning is weaker for appointments than for judgments. Eg. Reiterated recommendations have been left unacted by the government, with no published reason recorded on either side.
      The Fix: Publish an anonymised assessment memorandum with every recommendation, recording seniority, disposal record and the ground for any supersession.
    2. The internal complaints procedure has no statutory footing: Complaints against judges are handled under a procedure the judiciary framed for itself, so its outcome rests on institutional discipline rather than on law. Eg. Removal remains the only statutory route, under the Judges (Inquiry) Act, 1968, and no Supreme Court judge has ever been removed through it.
      The Fix: Give the internal procedure statutory backing with defined timelines and a published outcome summary that names no complainant.
    3. Pendency erodes trust faster than any single verdict: A litigant who waits years for a hearing experiences the process as unfair regardless of how the case is eventually reasoned. Eg. Cases pending before the district judiciary are counted in crores on the National Judicial Data Grid.
      The Fix: Publish court wise disposal and case ageing data against listed targets, so delay is attributable to a court rather than to the system in general.
    4. Vacancies outrun appointments: A sanctioned strength that is never filled turns an appointment mechanism into a bottleneck whatever its design. Eg. High Court vacancies have run into hundreds of posts for years together.
      The Fix: Fix a time limit for each stage from High Court proposal to warrant of appointment, with any delay recorded against the stage that caused it.

    Conclusion

    The address settles nothing about how judges are appointed or how complaints against them are decided, and it was not meant to. What it does is state the standard the institution asks to be judged by, which is the fairness of the process rather than the popularity of the result. That standard is testable only against the things the judiciary itself controls and publishes. The concrete thing to watch is whether the two mechanisms defended here acquire published reasons and fixed timelines, since a standard of examinable reasoning applied everywhere except to the institution’s own administration is precisely the gap the criticism turns on.

    Matching Previous Year Question

    “[2025, GS2, 15 marks] “Constitutional morality is the fulcrum which acts as an essential check upon the high functionaries and citizens alike…” In view of the above observation of the Supreme Court, explain the concept of constitutional morality and its application to ensure balance between judicial independence and judicial accountability in India.”

  • Government trusts Aadhaar on welfare. It needs to rely on it to make voter lists

    Why in the News

    The Special Intensive Revision (SIR) of the electoral rolls has stopped being a one off event. Rolling out in phases since June 2025, it now extends to almost the entire country and has already deleted over 13 crore names. The Supreme Court has upheld the exercise while holding that the final determination of citizenship belongs to the Ministry of Home Affairs (MHA) under the Citizenship Act, 1955, and not to the Election Commission (EC). The goal of clean, accurate and inclusive rolls is not in dispute; the method is. That method revives a document intensive, house to house verification mothballed for over two decades and applies it on a near national scale, while the one question it is most often defended by, citizenship, is the question the Court has just said cannot be answered by an electoral officer at the doorstep.

    What is the Special Intensive Revision?

    1. What it does: It is a time bound, house to house enumeration in which Booth Level Officers (BLOs) physically visit households and verify every single voter entry.
    2. How it differs from the routine revision: The annual Summary Revision updates additions, deletions and corrections against a qualifying date, while an intensive revision re verifies every entry through fresh enumeration forms and document checks.
    3. Statutory basis: Section 21 of the Representation of the People Act, 1950 authorises a special revision of the roll at any time, for reasons recorded in writing.
    4. Procedure: The Registration of Electors Rules, 1960 lay down the framework for house to house enumeration and verification.

    Why does the method impose its heaviest cost on the poorest voters?

    1. The burden of proof shifts to the voter: Lakhs of officials go door to door, and crores of citizens must prove their eligibility on paper within compressed deadlines.
    2. Who carries that burden: It falls hardest on the poor, the elderly, migrants and women, who are the least likely to hold a continuous documentary record of themselves.
    3. Welfare linkage raises the price of an error: Orders in some states link roll deletions to welfare records, so a wrongful removal can cost a family its rations and its pension.
    4. Redress is slow where deletions are largest: The Supreme Court is pressing the EC over the slow disposal of appeals against deletions in West Bengal, where voters struck off are still waiting to be heard.
    5. The cost recurs by design: The exercise mobilises around 10 lakh public servants, mostly schoolteachers, and costs the exchequer thousands of crores every cycle.

    Why can citizenship not be settled in the field?

    1. The documents are not universal: A passport is held by under 8 per cent of Indians, and was clarified in June by the Ministry of External Affairs to be a travel document rather than proof of citizenship.
    2. What the common records actually prove: Aadhaar proves identity and residence by statute and not citizenship, while the voter identity card and the Permanent Account Number (PAN) prove none of it.
    3. Birth registration was patchy: For decades the registration of births was incomplete for the poor, for women and for rural India.
    4. The abandoned pilot: The Multipurpose National Identity Card pilot was abandoned as unworkable.
    5. The Assam precedent: The National Register of Citizens (NRC) in Assam excluded 19 lakh people, caused enormous distress and resolved nothing.
    6. The register that followed counted residents: The National Population Register enumerated “usual residents”, citizens and non citizens alike, because a field test of citizenship was found impractical.

    What would an Aadhaar based revision actually do?

    1. The application: A voluntary application on mobile or web would let a voter link Aadhaar to the Electors Photo Identity Card (EPIC) and complete face authentication in one step, with no document and no visit to any office.
    2. What a single authentication settles: The act proves the voter is alive, removes duplicates because each Aadhaar is unique, and removes ghosts because a non existent person cannot authenticate.
    3. Age without a date of birth: Biometrics are not captured below the age of five, so a person whose fingerprints and iris were recorded in an enrolment around 2013 or earlier was at least five then and is at least 18 now.
    4. Why the record has no motive to lie: Aadhaar was created as a bare identity carrying no benefit or entitlement, so nothing was gained by misstating age, and the address had to be genuine because the Aadhaar letter was posted to it.
    5. Voluntariness and the residue: Linkage stays voluntary, and those who decline use the ordinary manual route, a small residue given near universal coverage.
    6. Citizenship handled as the Court requires: Everyone is identified first, analytics flag the few genuine outliers, and only those are referred to the MHA.

    Does the existing record of face authentication support the claim?

    1. Coverage: Aadhaar covers 1.36 billion residents, making it the largest and most carefully audited enrolment in existence.
    2. Proven at scale in welfare: De duplicating PAN, closing benami accounts and removing crores of ghost beneficiaries from welfare have together saved over Rs 2.7 lakh crore.
    3. Face authentication at the airport gate: More than 10 crore Aadhaar face authentication transactions have been completed in Digi Yatra through more than 100 airports, with as many as 500 crore face authentications completed in all to date.
    4. Face authentication for pensions: Jeevan Pramaan lets 1.47 crore pensioners prove from a phone, by their face alone, that they are alive.
    5. Privacy design: Aadhaar authentication returns only a yes or no answer, and never the underlying data.

    Challenges to an Aadhaar based electoral roll revision

    1. It cannot answer the question the revision is defended by: Aadhaar proves residence, so it leaves citizenship exactly where the Court left it, with the MHA. Eg. The same statutory limit that disqualifies Aadhaar as proof of citizenship applies to the proposed application.
      The Fix: Separate the two tasks in law, using the application only for de duplication and proof of life, and routing citizenship doubts to a statutory MHA process carrying notice and hearing.
    2. Authentication failure excludes the people it is meant to protect: Biometric and face authentication fails for manual labourers, for the elderly and where connectivity is poor, and a failure at the roll stage removes a vote rather than a ration. Eg. Ration denials following biometric authentication failure were reported in Jharkhand.
      The Fix: Make manual verification a guaranteed fallback with a statutory timeline, so no name is ever deleted on an authentication failure alone.
    3. Seeding Aadhaar into rolls has been halted once already: An earlier programme was stopped on legal rather than technical grounds, and the same objection can be raised against a fresh attempt. Eg. The National Electoral Roll Purification and Authentication Programme of 2015 was halted after the Supreme Court’s interim orders restricting the use of Aadhaar.
      The Fix: Ground the application in an express statutory provision carrying defined purpose limitation, so linkage rests on law rather than on an administrative circular.
    4. Deletion by analytics carries no hearing: Flagging an outlier produces an administrative suspicion the voter must then rebut, which returns the burden of proof to the individual. Eg. Rule 18 of the Registration of Electors Rules, 1960 requires individual notice before a deletion, and its observance has been contested in petitions against the current revision.
      The Fix: Require a reasoned notice, a hearing and an appeal decided within a fixed period before any flagged name is removed.
    5. Privacy and proportionality: Building the electoral roll on a national biometric identity concentrates a population wide database against a constitutional right. Eg. Any state intrusion into privacy must satisfy legality, a legitimate aim and proportionality between the means and that aim.
      The Fix: Subject the application to a published proportionality assessment and to independent audit of every authentication log.

    Conclusion

    The revision and the alternative are not two methods for the same task. One tries to settle a legal status in the field, which the Court has already held the field cannot settle, and the other cleans the roll of the dead, the duplicated and the departed, which is the part a machine can actually do. Keeping the two apart is what would allow the roll to be cleaned without a citizenship test attached to it. The thing to watch is whether the Election Commission is given an express statutory basis for face authentication, because without one the alternative inherits the same legal fragility that stopped the last attempt.

    Electoral Roll Management in India

    1. One roll for all: Article 325 mandates one general electoral roll for every territorial constituency, and bars exclusion from it on grounds of religion, race, caste or sex.
    2. Universal adult suffrage: Article 326 guarantees the vote to every citizen of 18 years and above, the age fixed by the Sixty first Amendment.
    3. Who qualifies for registration: Section 19 of the Representation of the People Act, 1950 requires a voter to be 18 or above and “ordinarily resident” in the constituency, while Section 16 lists the disqualifications for registration, including non citizenship.
    4. The machinery: Sections 13A to 13CC set the administrative hierarchy of the Chief Electoral Officer at state level, the District Election Officer at district level and the Electoral Registration Officer at constituency level.

    Government Initiatives on Electoral Roll Management

    1. Election Laws (Amendment) Act, 2021: It permits the Electoral Registration Officer to seek a voter’s Aadhaar number on a voluntary basis, through Form 6B, to establish identity and to identify duplicate entries.
    2. National Voters’ Service Portal: It allows voters to register, modify and confirm their electoral details online without visiting an office.
    3. ECINET: Launched in 2026, it is a single digital interface integrating more than 40 mobile and web applications for voters and election officials.
    4. Faster delivery of the identity card: A standard operating procedure requires the Electors Photo Identity Card to be delivered within 15 days of an update.

    Back2Basics

    1. What Aadhaar is: It is a 12 digit random number issued to a resident of India after biometric and demographic de duplication, and it establishes identity rather than citizenship.
    2. Governing law: It rests on the Aadhaar (Targeted Delivery of Financial and Other Subsidies, Benefits and Services) Act, 2016.
    3. Issuing authority: The Unique Identification Authority of India (UIDAI) is the statutory authority under that Act, functioning under the Ministry of Electronics and Information Technology.
    4. Judicial limits: In K S Puttaswamy v. Union of India (2018) a five judge Constitution Bench upheld the Act and struck down Section 57, so a private entity cannot demand Aadhaar authentication under a contract.

    Matching Previous Year Question

    “[2026, GS2, 10 marks] Is the right to vote a fundamental right? Discuss the position of the Election Commission of India while undertaking the revision of electoral rolls. Can it also examine the question of citizenship of voters?”

  • BJP’s states route to UCC, over one central law

    Why in the News

    The Union Home Minister has said the Uniform Civil Code (UCC) will be introduced in all 21 Bharatiya Janata Party led National Democratic Alliance ruled states before the 2029 Lok Sabha elections. The abolition of triple talaq was cited in the same statement as part of the effort to provide equal rights to Muslim women. The commitment follows a settled preference within the Rashtriya Swayamsevak Sangh (RSS) since 2023 that states enact their own codes first, with the Centre considering an overarching law later, so what had been a state first strategy now carries a date. The tension is constitutional as much as political: Entry 5 of the Concurrent List lets every state legislate its own code, so a promise of uniformity is being delivered through four statutes that are similar but not identical, and none of which is literally universal.

    What is the Uniform Civil Code?

    1. Constitutional source: The promise stems from Article 44, which says the State shall endeavour to secure for the citizens a uniform civil code throughout the territory of India.
    2. Adoption: The Constituent Assembly adopted the Article on 23 November 1948 after a spirited debate, and had no consensus on what such a code would actually contain.
    3. Enforceability: The Article sits among the Directive Principles of State Policy, and under Article 37 those principles are fundamental to governance but are not enforceable by any court.

    Why is the code being legislated state by state rather than through one central law?

    1. Legislative competence: Marriage, divorce, adoption, wills, intestacy, succession and joint family matters fall under Entry 5 of the Concurrent List, giving both Parliament and state legislatures competence over them.
    2. Variation in personal law: A single national code would have to negotiate enormous variation in personal laws and customary practices, particularly among tribal communities and in the Northeast.
    3. Codification is not like criminal law: The recorded objection in 2023 was that a civil code could not simply be codified the way criminal law was, because a tribal community in Uttarakhand or Himachal Pradesh practises very differently from one in Chhattisgarh or the Northeast.
    4. Political utility of the state route: Legislating state by state allows different models to be tested, local customs to be accommodated and implementation to be demonstrated, without first confronting the full political and constitutional complexity of a nationwide law.
    5. The Sangh’s stated caution: The RSS position in 2023 was that the subject required deeper study and wider consultation because it affected every section of society. The RSS general secretary welcomed the Uttarakhand model in March 2024 and said it should be studied and implemented across the country.

    What do the four enacted state codes actually contain?

    1. Uttarakhand: The only code currently in force, implemented in January 2025, it provides common rules on marriage, divorce, inheritance and succession, prohibits polygamy and mandates marriage registration.
    2. Regulation of live in relationships: Its most distinctive feature requires couples to register the relationship and its termination, while recognising children born of such relationships as legitimate.
    3. Gujarat: The Assembly passed its Bill in March 2026, broadly following the Uttarakhand model on marriage, divorce, succession and live in relationships, and prohibiting bigamy.
    4. Assam: The Bill was passed in May, covering marriage, divorce, succession and live in relationships, prohibiting polygamy and making live in registration compulsory.
    5. Madhya Pradesh: The Bill was passed in July and additionally covers adoption, with provisions relating to triple talaq and nikah halala, alongside live in registration and a bar on polygamy.
    6. Scheduled Tribes are excluded: All four laws exclude Scheduled Tribes, and Uttarakhand also exempts certain communities protected by constitutional customary law provisions.

    What has the Law Commission said?

    1. The 2018 position: The 21st Law Commission, in its Consultation Paper on Reform of Family Law (2018), said a uniform civil code was “neither necessary nor desirable at this stage”.
    2. Equality within over equality between: Its emphasis was on achieving “equality within communities” between men and women rather than “equality between” communities, reforming discriminatory provisions across personal laws while preserving diversity.
    3. Piecemeal change over absolute uniformity: It preferred making piecemeal changes to imposing absolute uniformity, and flagged the constitutional protections enjoyed by tribal and northeastern communities as a complication.
    4. The issue reopened: The 22nd Law Commission reopened the matter in 2023, seeking fresh views from the public and from recognised religious organisations, on the ground that more than three years had elapsed since the 2018 consultation and that developments including court orders warranted fresh examination.

    Where do the Opposition and the NDA allies stand?

    1. The Opposition’s framing: Opposition parties have questioned whether the code is genuinely a gender equality reform or an attempt to alter the personal laws of minorities through a majoritarian framework.
    2. State level opposition: The Congress opposed the Gujarat Bill as directed against Muslims, and in Madhya Pradesh criticised the legislation as an RSS agenda.
    3. Assam’s Opposition: Opposition parties there sought wider consultation and raised concerns over the tribal exemption and the regulation of live in relationships.
    4. Janata Dal (United): The party has consistently said it is not opposed to a uniform code but wants it to emerge through consensus rather than imposition. Its president told the Law Commission that such a code should respect India’s “delicate balance” between different religious and ethnic groups.
    5. Telugu Desam Party: The party has called for discussion and consensus, and in 2024 said it would ensure that Muslim interests were protected.

    Challenges to the Uniform Civil Code

    1. Four codes do not produce one code: Legislating separately in each state produces similar but not identical statutes, so uniformity is not what the project delivers. Eg. Madhya Pradesh’s law covers adoption, triple talaq and nikah halala, while Uttarakhand’s does not.
      The Fix: Anchor state enactments to a model law drafted by the Law Commission, so the substantive rules converge even where the enacting legislature differs.
    2. Exclusion of Scheduled Tribes: A code that exempts Scheduled Tribes leaves the customary law of a large population outside the very uniformity it is named for. Eg. All four enacted codes carry the exclusion, and Uttarakhand exempts further protected communities.
      The Fix: State the constitutional basis of the exemption openly, in the Fifth and Sixth Schedule protections, rather than leaving it as a silent exception.
    3. Directive Principles create no claimable right: Article 44 gives a citizen nothing to enforce, so the pace and the content of the code are settled entirely by political choice. Eg. The Article has stood since the Constitution commenced without any central statute enacted under it.
      The Fix: Route the contested questions through parliamentary scrutiny of a draft bill, so the content is debated before it binds anyone.
    4. Registration of private relationships: Compulsory registration of a live in relationship and of its termination extends the state into conduct that was previously unregulated. Eg. Uttarakhand’s code requires both the registration and the recorded termination of such a relationship.
      The Fix: Limit registration to the consequences the state must settle, namely the legitimacy of children and maintenance, rather than the existence of the relationship itself.
    5. Federal friction on a Concurrent List subject: A later central law can override a state code on the same entry, so the states legislating first face the prospect of their statutes being displaced. Eg. Article 254 gives a central law precedence over a repugnant state law on a Concurrent List subject.
      The Fix: Reserve state codes for Presidential assent under Article 254(2), which protects them until Parliament legislates on the same matter.

    Conclusion

    The commitment now carries a date, and the instrument chosen to meet it remains the state legislature rather than Parliament. That choice buys the ability to work around customary law without arguing a national case, and it also guarantees the codes keep diverging as each state adds subjects of its own. What is unresolved is whether uniformity describes the outcome or only the ambition. The thing to watch is whether an overarching central law is eventually brought, because the moment it is, the enacted state codes become the question rather than the answer.

    Back2Basics

    1. What it is: The Law Commission of India is a non statutory executive body constituted by the Ministry of Law and Justice, and it is not created by any Act of Parliament.
    2. Term and composition: It is constituted afresh for a fixed term, normally three years, and is headed by a chairperson who is usually a retired judge, with full time and part time members.
    3. First Commission: The first Law Commission of independent India was constituted in 1955, chaired by the then Attorney General for India.
    4. Weight of its output: Its reports and consultation papers are recommendatory, so the government is free to act on them, to act against them, or to leave them unacted.

    Matching Previous Year Question

    “[2015, GS2, 12.5 marks] Discuss the possible factors that inhibit India from enacting for its citizens a uniform civil code as provided for in the Directive Principles of State Policy.”

  • Heat, weak monsoon continue to push up power demand

    Why in the News

    India’s peak electricity demand touched 269 gigawatt (GW) on September 10, the highest ever recorded for that month and close to the year’s peak of 270 GW set during the summer in May. Demand normally eases by September as the summer heat recedes, and September has recorded the year’s highest peak only twice in recent years, in 2023 to 24 and 2020 to 21. This year persistent heat, a deficient monsoon and higher irrigation load have held consumption at summer levels. The contested point is that the surge is arriving at the hour the grid is weakest, since solar generation falls away in the evening and night when the peak now occurs.

    What is peak power demand?

    1. What it measures: Peak demand is the highest instantaneous load the grid has to meet at any moment in a period, measured in gigawatt, and it sets the capacity the system must keep available.
    2. How it differs from consumption: Total electricity consumption is measured in units of energy over a period, in billion units, and a system can have flat consumption with a sharply higher peak.
    3. Why the distinction matters: Capacity planning, reserve margins and spot market prices are driven by the peak rather than by the total, so a rising peak stresses the system even where annual consumption growth is modest.

    What does the September demand data show?

    1. The record for the month: Peak power demand touched 269 GW on September 10, the highest ever peak recorded for September.
    2. Proximity to the summer peak: The year’s highest peak so far is 270 GW, recorded during the peak summer in May, so September is running within a gigawatt of it.
    3. The normal pattern: Demand usually peaks in April, May, June and July, driven by air conditioners and other cooling appliances in households and commercial establishments, and eases into a post summer pattern by September.
    4. Consumption growth: The Indian Energy Exchange (IEX), the country’s largest power trading platform, puts electricity consumption at 49.84 billion units between September 1 and 9, up 20.7 per cent from the same period a year earlier.

    Why has demand stayed at summer levels?

    1. Heat and cooling load: The Energy and Resources Institute (TERI) attributes the increase to persistent heat and continuing cooling demand, with El Nino related weather conditions adding to it.
    2. Irrigation load: Deficient rainfall raises irrigation demand, so agricultural pumping load rises at the same time as air conditioning load.
    3. The temperature and rainfall forecast: The India Meteorological Department (IMD) had forecast monthly average maximum temperatures in September above normal over most of the country, and rainfall below normal at less than 91 per cent of the long period average.
    4. The rainfall shortfall recorded: Between June 1 and September 9 India received 648 millimetres of rainfall against a normal of 760.6 millimetres, a seasonal deficit of 15 per cent.
    5. A recurring condition: The All India DISCOM Association states that this type of uncertainty will prevail given global warming and the consequential changes in weather and climate.

    Where does the system actually run short?

    1. The daytime surplus: Expansion of solar capacity has left the system comfortable during daylight hours, and grid operators have had to curtail solar generation as the system struggles to absorb the surplus.
    2. The evening and night deficit: Supply conditions tighten in the evening and at night as solar generation falls away, which is when the tightest balance now occurs.
    3. The measured shortfall: Grid India data show a night time shortfall of about 7.7 GW on September 9, when peak demand touched 267 GW, and 6.1 GW on September 10 at the 269 GW peak.

    What is filling the evening gap?

    1. Gas based generation: Electricity generation from gas based plants rose 80.32 per cent during September 1 to 9 over the same period last year, and gas is relatively expensive to run.
    2. Coal at near maximum: Coal based generation over the same nine days rose 25.30 per cent, from 26,135.72 million units in 2025 to 32,748.95 million units in 2026, with plants operating at near maximum levels.
    3. The cumulative coal shift: Since April, coal based generation has risen 10.64 per cent, from 553,730.78 million units to 612,663.37 million units, reflecting heavy reliance on coal through non solar hours.
    4. Hydropower squeezed: Deficient rainfall has cut hydropower generation, which deepens dependence on thermal generation and has pushed up prices in the spot electricity market.

    Challenges to meeting a weather driven evening peak

    1. No storage at the scale of the shortfall: Solar capacity cannot serve an evening peak without storage, and battery capacity on the Indian grid remains small against a shortfall measured in gigawatt. Eg. Grid operators curtailed solar output during the day in the same week the night time shortfall ran above 6 GW.
      The Fix: Tie every new solar tender to a contracted block of storage delivering into the evening peak rather than procuring energy alone.
    2. Expensive peaking generation: The evening gap is bridged with gas, which is the costliest generation in the stack, and the cost lands on distribution companies already carrying losses. Eg. Gas based generation rose sharply in the first nine days of September while spot market prices climbed.
      The Fix: Run a separate capacity market that pays for availability at the peak hour, so peaking plants are financed without distorting the energy price.
    3. Agricultural load is uncontrolled: Irrigation pumping rises with a rainfall deficit and is largely unmetered, so the system cannot shift it away from the peak. Eg. A 15 per cent seasonal rainfall deficit raised irrigation demand at the same time as cooling demand.
      The Fix: Expand segregated agricultural feeders that supply daytime solar power to pumps, moving that load into the surplus hours.
    4. Hydropower is no longer a reliable balancer: Hydropower is the traditional flexible source for an evening peak, and a deficient monsoon removes it in the same season that demand rises. Eg. Reduced reservoir inflows this monsoon have squeezed hydro generation exactly when the peak moved into September.
      The Fix: Contract pumped storage capacity on long term agreements so evening flexibility does not depend on the year’s rainfall.

    Conclusion

    The demand peak has moved out of the summer months and into a season the power system was not planned around, and it has moved into the hours when the fastest growing source of supply produces nothing. The response so far has been to run coal harder and gas more often, which raises both emissions and the spot price. The thing to watch is whether storage procurement is attached to new solar capacity at the scale the evening shortfall now requires, since every further year of weather driven September peaks will be met from the thermal fleet until it is.

    Back2Basics: Grid India

    1. What it is: Grid Controller of India Limited, known as Grid India, is the system operator responsible for integrated operation of the national electricity grid.
    2. What it was before: It was formerly the Power System Operation Corporation Limited, and it functions under the Ministry of Power.
    3. What it runs: It operates the National Load Despatch Centre and the Regional Load Despatch Centres, which balance generation against demand in real time.
    4. Why its data matters here: Scheduling and despatch data from these centres is the source for measured demand met, peak demand and the shortfall at any hour.

    Matching Previous Year Question

    “[2026, GS3, 15 marks] Explain the key challenges for India’s energy security. What measures do you suggest for ensuring energy security along with economic growth and sustainability?”

  • Subhash Chandra case: IBBI to tighten guarantor resolution

    Why in the News

    The Insolvency and Bankruptcy Board of India (IBBI) has proposed four amendments to the insolvency resolution process for personal guarantors to corporate debtors, extending to banks and creditors safeguards already available under the corporate insolvency resolution process (CIRP) of a company. The proposals follow a special bench of the National Company Law Tribunal (NCLT) staying a single bench order that had approved a repayment plan offering creditors Rs 6.25 crore against admitted claims of Rs 22,006.57 crore. That case led experts to question the efficacy of the Insolvency and Bankruptcy Code, 2016, which was introduced to revive companies under heavy debt and secure repayment to banks. The contested point is that the guarantor track of the Code was built with weaker creditor protections than the corporate track, and a related party of the guarantor can currently vote on the plan that decides what creditors recover.

    What is the personal guarantor resolution process?

    1. Who a personal guarantor is: An individual, usually a promoter, who personally guarantees a company’s borrowing, so the lender can proceed against that individual’s own estate when the company defaults.
    2. How the process runs: A resolution professional is appointed, a repayment plan is prepared for the guarantor, and the plan is put to a vote of the creditors before it goes to the adjudicating authority for approval.
    3. How it differs from the corporate track: Under CIRP the plan is decided by a committee of creditors from which a related party of the debtor company is excluded from voting. In a personal guarantor resolution only an associate is barred, and the definition of associate is far narrower.

    What triggered the review?

    1. The order under stay: On August 25 the NCLT single bench approved a repayment plan involving personal guarantor and Essel Group founder Subhash Chandra, and a special bench has since stayed that order.
    2. The recovery on offer: Creditors were offered Rs 6.25 crore against admitted claims of Rs 22,006.57 crore.
    3. What the banks alleged: The banks alleged that the non bank entities voting on the plan were associates or related parties of the guarantor and had acted under his influence to push through a plan carrying a very large haircut.
    4. The gap the case exposed: The narrower associate test let entities that would fail a related party test vote on the plan. The IBBI’s own illustration is a company that habitually acts on the guarantor’s advice or instructions, without the guarantor holding any shares in it or controlling its board.

    What are the four proposed amendments?

    1. Voting rights of related parties: Any creditor who is a related party of the guarantor would get no voting right in approving the resolution plan, replacing the narrower associate test.
    2. Scrutiny of avoidance transactions: Resolution professionals would have to examine whether the guarantor was party to any avoidance transactions, meaning undervalued transactions, transactions giving preference and extortionate credit transactions, present those findings to creditors before the vote, and initiate legal proceedings with creditor approval.
    3. Independent asset valuation: A registered valuer would have to determine the fair value and the realisable value of the guarantor’s assets, and the valuation report would go to creditors along with the repayment plan.
    4. Reasoned minutes of creditor meetings: Resolution professionals would have to record creditors’ deliberations and the reasons for their decision in the minutes of creditors’ meetings.

    How do these proposals close the gap with the corporate process?

    1. Parity on the voting bar: The related party exclusion is the CIRP standard, and applying it to guarantor resolutions removes the mismatch the Chandra case turned on.
    2. A duty that does not currently exist: When a guarantor’s repayment plan is put to a vote, the resolution professional is today under no obligation to examine whether an avoidance transaction took place or whether the guarantor made full disclosure of affairs.
    3. Informed commercial judgement: The IBBI’s stated purpose for the valuation report is to let creditors assess the adequacy of the proposed security, the viability of the repayment plan and the potential recovery available from the guarantor’s assets.
    4. An auditable record: Recording only raw voting tallies leaves no record of commercial reasoning, and reasoned minutes give an appellate forum something to review beyond the arithmetic of the vote.

    Challenges to the personal guarantor resolution framework

    1. Asset shielding before the filing: A guarantor can move assets into family or trust structures well before insolvency begins, leaving little to value. Eg. Promoter assets held through family trusts have repeatedly fallen outside the estate available to lenders in large default cases.
      The Fix: Extend the look back period for avoidance transactions involving a guarantor’s relatives and require a sworn asset disclosure covering it.
    2. Proving a related party connection: The related party test is broader than the associate test and is also harder to establish, since control through habitual instruction leaves no shareholding trail. Eg. The IBBI’s own example is a company acting on the guarantor’s instructions without any shareholding or board control.
      The Fix: Place the burden on the creditor claiming unrelated status to establish it, rather than on the objecting bank to disprove it.
    3. Delay in adjudication: The guarantor track sits in the same tribunals already carrying a heavy corporate caseload, so an order and its stay can consume months while asset value erodes. Eg. The stay in this case leaves the approved plan in suspension with no fixed date for a decision.
      The Fix: Fix a statutory outer limit for disposal of a personal guarantor repayment plan and report breaches bench wise.
    4. Valuation of illiquid personal assets: Fair value and realisable value diverge sharply for unlisted shareholdings, disputed land and pledged promoter stock. Eg. Pledged promoter shareholdings lose value the moment a lender begins to sell them into the market.
      The Fix: Require two independent registered valuers where the guarantor’s estate is dominated by unlisted or pledged securities.

    Conclusion

    The guarantor track of the Code was written as a lighter version of the corporate one, and the difference has turned out to matter most in exactly the cases where recovery is largest. The four proposals move that track towards the corporate standard on voting, scrutiny, valuation and record keeping, and each of them constrains the resolution professional rather than the tribunal. The proposals sit in a discussion paper open for public comment, and the special bench’s stay holds until it decides the matter.

    Back2Basics: Insolvency and Bankruptcy Board of India

    1. What it is: The IBBI is the regulator for insolvency and bankruptcy proceedings in India, established in 2016 under the Insolvency and Bankruptcy Code, 2016.
    2. Who it regulates: Insolvency professionals, insolvency professional agencies, registered valuers and information utilities.
    3. What makes it unusual: It holds regulatory, executive and quasi judicial functions over the same set of entities, which is rare among Indian regulators.
    4. Its rule making role: It frames the regulations that govern both the corporate insolvency resolution process and the resolution of personal guarantors, which is what the present discussion paper proposes to amend.

    Matching Previous Year Question

    “[2019] What was the purpose of Inter-Creditor Agreement signed by Indian banks and financial institutions recently? (a) To lessen the Government of India’s perennial burden of fiscal deficit nd current account deficit (b) To support the infrastructure projects of Central and State Governments (c) To act as independent regulator in case of applications for loans of Rs. 50 crore or more (d) To aim at faster resolution of stressed assets of Rs. 50 crore or more which are under consortium lending Answer: (d)”

  • Govt: No bank charge on UPI payment up to Rs 2,000

    Why in the News

    The Ministry of Finance has notified that no bank or system provider may impose any charge, directly or indirectly, on a payment made through RuPay debit cards or through the Unified Payments Interface (UPI), the National Payments Corporation of India’s real time system for transferring money between bank accounts using a virtual address, up to Rs 2,000. The notification does not specify any charge for transactions above that amount, which opens the way for a fee on higher value person to merchant payments. It follows the Taxation and Other Laws (Amendment) Bill, 2026, passed by Parliament last month, which removed the statutory bar on charging for these payment modes. The contested point is that a threshold covering 96 per cent of person to merchant transactions by number leaves roughly two thirds of their value open to a charge.

    What is the Merchant Discount Rate?

    1. What it is: The Merchant Discount Rate (MDR) is the fee a bank that processes a card or digital payment levies on the merchant receiving it.
    2. What it pays for: It covers transaction processing, settlement and payment infrastructure costs across the chain of banks and providers that carry the payment.
    3. The usual range: An MDR normally runs between 1 and 3 per cent of transaction value on debit and credit card payments.
    4. The exemption since 2020: No MDR has been levied on RuPay debit cards and UPI transactions since January 2020, a decision taken to promote adoption of digital payments.

    What has the notification done, and who decides a fee above the threshold?

    1. The prohibition: The notification bars any charge, direct or indirect, on RuPay debit card payments and on UPI transactions of up to Rs 2,000, whether imposed on the person making or the person receiving the payment.
    2. The silence above the threshold: The ministry did not specify charges for transactions above Rs 2,000, which is what creates the opening for an MDR on higher value person to merchant payments.
    3. The deciding body: Whether an MDR is imposed above the threshold will be decided by the UPI and Services Steering Committee, headed by the National Payments Corporation of India (NPCI), with 22 members including banks, third party application providers such as PhonePe and Google Pay, the Payments Council of India and the Indian Banks’ Association.
    4. The rate under discussion: Payments industry officials have suggested an MDR of around 0.4 to 0.5 per cent for UPI payments to large merchants, which would help meet the industry’s annual cost of about Rs 20,700 crore.

    What legal change made this possible?

    1. The provision amended: The Bill amended Section 10A of the Payment and Settlement Systems Act, 2007, which had barred any bank or system provider from imposing a charge on payments made through the electronic modes prescribed under Section 269SU.
    2. The modes covered: Those prescribed modes were RuPay debit cards, BHIM UPI and the UPI QR code.
    3. Who the underlying obligation binds: Section 269SU of the Income Tax Act, 1961 applies to businesses with a turnover of over Rs 50 crore, requiring them to offer the prescribed electronic payment modes.
    4. What the amendment enables: Removing the exemption paves the way for an MDR on UPI and RuPay debit card payments to large merchants such as e commerce platforms.
    5. The stated rationale: The amendment is presented as an enabling provision for UPI’s long term sustainability, technological advancement and resilience against emerging risks.

    Why does the Rs 2,000 threshold matter for UPI’s economics?

    1. Small share by number: Only 4 per cent of person to merchant UPI payments in 2025 to 26 were for more than Rs 2,000.
    2. Large share by value: Those same transactions accounted for about two thirds of total person to merchant UPI payment value.
    3. The base: More than 24,000 crore UPI transactions worth Rs 314 lakh crore were made during the year.
    4. What the design achieves: The threshold protects the small ticket everyday payment from any charge while leaving the value where a percentage fee actually earns revenue open to one.

    How has the state paid for zero MDR so far?

    1. The incentive scheme: The government subsidises payments of up to Rs 2,000 made to small merchants through its incentive scheme for promotion of RuPay debit cards and low value BHIM UPI person to merchant transactions.
    2. The cap and the exclusion: The incentive is capped at 0.15 per cent of transaction value, and large merchants are not covered by the scheme at all.
    3. What it costs: The Budget for 2026 to 27 estimated the payout at Rs 2,000 crore. Rs 2,196.21 crore was paid in 2025 to 26, up from Rs 1,922.77 crore in 2024 to 25.
    4. The sustainability finding: A March report of the Standing Committee on Finance recorded that the absence of MDR makes the UPI ecosystem financially unsustainable.

    Challenges to reintroducing a Merchant Discount Rate on UPI

    1. Merchant pass through to the customer: A merchant charged a percentage fee recovers it by quoting a higher price or by preferring cash for large tickets. Eg. Many small retailers added a surcharge on card payments before the Reserve Bank of India barred the practice on debit cards.
      The Fix: Bar surcharging by contract with the acquiring bank and make the ban a condition of merchant onboarding.
    2. Threshold gaming by splitting payments: A fixed value threshold invites a single large payment being broken into several below the cut off. Eg. A Rs 5,000 purchase settled as three separate UPI transfers falls entirely inside the exempt band.
      The Fix: Apply the threshold to the aggregate value settled to one merchant from one payer in a day rather than to a single transaction.
    3. Definition risk on the large merchant: The charge is designed to fall on large merchants, and the line between a large and a small merchant sits on self declared turnover. Eg. Section 269SU already uses a Rs 50 crore turnover test that a merchant can restructure across entities.
      The Fix: Anchor the classification to verified Goods and Services Tax turnover rather than to a declaration made at onboarding.
    4. Fiscal and commercial funding running in parallel: An incentive subsidy and an MDR answer the same infrastructure cost, and running both leaves the split unstated. Eg. The subsidy payout has risen each year while the industry’s stated annual cost has stayed far above it.
      The Fix: Publish a stated glide path withdrawing the incentive as MDR revenue begins, so the two do not fund the same cost twice.

    Conclusion

    The zero fee regime on UPI was paid for by the exchequer, and the bill grew every year while the payments industry’s own cost stayed several times larger. The notification shifts the funding of the large value end of the system from the Budget to the merchant, and leaves the small everyday payment where it was. What to watch is whether the UPI and Services Steering Committee sets a rate above the threshold at all, and whether merchants at that end of the market stay on UPI once it does.

    Back2Basics: National Payments Corporation of India

    1. What it is: NPCI is the umbrella organisation for retail payments and settlement systems in India.
    2. How it was set up: It was incorporated in 2008 as a not for profit company, promoted jointly by the Reserve Bank of India and the Indian Banks’ Association.
    3. Its statutory anchor: It operates under the Payment and Settlement Systems Act, 2007, which is the law governing payment systems in India.
    4. What it runs: Its systems include UPI, RuPay, the Immediate Payment Service, the National Automated Clearing House and FASTag.

    Matching Previous Year Question

    “[2023, GS3, 10 marks] What is the status of digitalization in the Indian economy? Examine the problems faced in this regard and suggest improvements.”

  • Key inflation numbers rise in August, all eyes on RBI’s interest rate decision next month

    Why in the News

    Retail inflation measured by the Consumer Price Index (CPI) rose to 4.82 per cent in August from 4.45 per cent in July, the highest reading in at least eight months. This is the third month in a row that headline retail inflation has stayed above the 4 per cent target the Reserve Bank of India (RBI) is legally mandated to hold it at. The Monetary Policy Committee (MPC), the six member body that sets the policy repo rate, left that rate unchanged at 5.25 per cent last month and has not raised it since February 2023. The contested point is whether a price rise now visible across food, fuel and manufactured goods obliges the MPC to begin tightening even as output is growing faster than expected.

    What is India’s inflation targeting framework?

    1. The statutory target: The RBI is legally mandated to keep CPI inflation at 4 per cent, within a tolerance band of 2 to 6 per cent.
    2. The instrument: The MPC sets the policy repo rate, the rate at which the RBI lends overnight to commercial banks against government securities, and changes in it are expected to pass through to deposit and lending rates.
    3. Why the band matters: Inflation inside the band does not by itself require action. A reading persistently above the central target, rather than a breach of the 6 per cent ceiling, is what builds the case for a rate increase.

    What do the August retail price numbers actually show?

    1. Food inflation: Food inflation measured by the CPI rose from 5.52 per cent in July to 5.95 per cent in August.
    2. Sugar: The CPI for sugar surged 19 per cent over July and 24 per cent over August 2025, on lower than expected production and inventory falling to multi year lows.
    3. Policy response on sugar: The government last month allowed duty free imports of up to 10 lakh tonnes of raw sugar until October 31, with sugar a key input through the festival season.
    4. Onion: Onion prices were up 22 per cent in August over July, with late rains delaying planting.

    Why is the price rise being read as broad based rather than a food shock?

    1. Breadth of the increase: 314 of the 358 items in the CPI recorded higher prices in August than in July. The figure was 310 in July and 236 in February, before the war in West Asia began.
    2. Items above target: The number of items with inflation above the target rate rose from 101 in July to 110 in August.
    3. Spillover risk: Price pressure spreading from food and fuel into other categories is what distinguishes a broad based rise from a seasonal vegetable spike, and it is the pattern the data now shows.

    What do the wholesale and producer numbers add?

    1. Wholesale Price Index: Wholesale inflation rose to 9.92 per cent in August from 9.78 per cent in July, driven by food and fuel.
    2. Wholesale food: Wholesale food inflation hit a 20 month high of 7.05 per cent in August, which ICRA attributes largely to higher prices of fruits, vegetables, milk, spices and sugar.
    3. Producer prices: Inflation based on the output Producer Price Index (PPI) edged up to 9.81 per cent from 9.57 per cent in July.
    4. Structural signal in manufacturing: India Ratings and Research reads the rise as becoming structural, since seven manufacturing sub categories, tobacco products, textile products, chemical products, rubber and plastic products, base metals, electrical equipment and other manufacturing, all carry wholesale inflation above 10 per cent. Those seven make up more than a quarter of the manufacturing group, which is itself almost two thirds of the entire Wholesale Price Index.

    Where does this leave the Monetary Policy Committee?

    1. Direction from the last meeting: Minutes of last month’s meeting showed the RBI Governor and a Deputy Governor both hinting towards an increase in interest rates.
    2. The RBI’s own projections: The central bank expects CPI inflation to average 4.7 per cent in July to September, 5.9 per cent in October to December, 5.5 per cent in January to March 2027 and 5.3 per cent in April to June 2027.
    3. Growth is not a constraint: GDP growth was 7.8 per cent in the first quarter of 2026 to 27, which removes the usual argument against tightening.
    4. The meeting date: The MPC meets on October 5 to 7, three weeks after this price data, and could deliver the first interest rate increase in three and a half years.

    What is the external monetary backdrop?

    1. US Federal Reserve: The Fed announces its own interest rate decision this week, with markets expecting a 25 basis point increase in the federal funds rate target range to 3.75 to 4 per cent.
    2. The US price trigger: American consumer prices rose 0.4 per cent month on month in August against a 0.1 per cent increase in July, with the year on year headline rate steady at 3.4 per cent.
    3. The tightening cycle: ANZ economists expect a compressed 75 basis point tightening cycle, with the increase this week followed by further increases in October and December to take the key rate to 4.25 to 4.50 per cent.
    4. Why it matters for India: Major central banks have already begun raising rates, which narrows the room for the MPC to hold while inflation runs above target.

    Challenges to inflation targeting in India

    1. Food weight in the index: Food carries a large share of the CPI basket, so a supply shock in one commodity moves the headline number that policy is judged against. Eg. A sugar output shortfall and delayed onion planting moved the August print on their own.
      The Fix: Publish the policy response against core inflation alongside the headline, so a supply driven spike is not read as a demand signal.
    2. Interest rates do not reach a supply shock: The repo rate works on credit demand and cannot add a tonne of sugar or an onion crop to the market. Eg. The government answered the sugar price surge with an import window rather than with monetary policy.
      The Fix: Pair the rate decision with a stated buffer stock and import calendar for the commodities driving the print.
    3. Transmission lag to borrowers: A change in the repo rate reaches lending and deposit rates only over several quarters, so a decision taken after inflation is established arrives late. Eg. The policy rate has been unchanged for four consecutive meetings while the headline number has risen for three months.
      The Fix: Widen the share of loans benchmarked to an external rate, so a policy change reaches borrowers in the same quarter.
    4. Imported price pressure: A large share of fuel and edible oil demand is met by imports, so the exchange rate and global prices set domestic costs irrespective of the domestic rate stance. Eg. Landed prices of imported crude palm, soyabean and sunflower oil in Mumbai are all above their September 2025 levels.
      The Fix: Use a calibrated import duty schedule on edible oils that moves against global prices rather than staying fixed through a cycle.

    Conclusion

    Inflation has moved from a food story to a broader one, and the numbers that usually lag the headline, wholesale and producer prices, are now leading it. The central bank holds a rate that has not changed in three and a half years against a growth rate that gives it no reason to wait. The thing to watch is the next Monetary Policy Committee decision and whether it treats the current run as a supply spike that will pass or as the start of a demand driven episode requiring a rate increase.

    Back2Basics: Producer Price Index

    1. What it measures: The Producer Price Index tracks the average change in prices received by domestic producers for their output, measured from the seller’s side of a transaction.
    2. How it differs from the Wholesale Price Index: The Wholesale Price Index measures the price a buyer pays at the wholesale stage, so it includes trade margins and indirect taxes. The PPI strips those out and measures the producer’s own realisation.
    3. Why it is tracked: It signals cost pressure building upstream before that pressure reaches retail prices, so it works as a leading indicator for consumer inflation.

    Matching Previous Year Question

    “[2024, GS3, 10 marks] What are the causes of persistent high food inflation in India? Comment on the effectiveness of the monetary policy of the RBI to control this type of inflation.”

  • From Bengal to Boston, politicians love a ‘revdi’

    Why in the News

    The US President has promised a dividend of $5,000 to every adult citizen of the United States if the Republican Party retains control of Congress at the November midterm elections, describing it as a return on the country’s economic strength. The promise imports into a rich economy an instrument Indian parties have used for two decades. In India, Direct Benefit Transfers (DBT), the routing of welfare money straight into a beneficiary’s bank account, were built on the Jan Dhan, Aadhaar and Mobile (JAM) trinity under the second United Progressive Alliance government, and every party now carries cash handouts in its manifesto. The Prime Minister warned against a “revdi culture” in July 2022, and his own party’s state units went on to make cash transfers central to their poll strategy. The contested point is whether an instrument with this universal electoral pull is welfare policy or a substitute for a state that has not delivered health, education and skilling.

    What is a Direct Benefit Transfer based cash transfer?

    1. Direct Benefit Transfer: Welfare money is credited directly to an identified beneficiary’s bank account instead of reaching them as a subsidised good or a service.
    2. The JAM rails: A Jan Dhan bank account, an Aadhaar number for identification and a mobile number for authentication together make the credit instantaneous and traceable.
    3. Unconditional transfer: The recipient has to satisfy an eligibility filter such as being an adult woman, and nothing more. No school attendance, health check or work requirement attaches to the payment.

    Why does a cash dividend appeal to voters in the world’s richest economy?

    1. Per capita income gap: US annual per capita income is $94,430, almost 34 times India’s $2,813, so a flat payment reads very differently at each end of that range.
    2. Bottom quintile: Mean household income of the poorest 20 per cent of Americans is $17,132 a year, per the 2024 American Community Survey of the US Census Bureau. A $5,000 payment is more than 100 days of that household’s annual income.
    3. Second quintile: The next 20 per cent has a household income of $48,852 a year, so the same payment is a little over a month’s income.
    4. Concentration at the top: Annual household income of the top 5 per cent is $5,25,113, more than 30 times the mean of the bottom 20 per cent. A flat transfer is therefore a large sum for the bottom of a rich country and a rounding error at its top.

    How large is the fiscal commitment behind these promises?

    1. Cost of the US dividend: About 245 million citizens are over 18, per US Census Bureau 2024 data, putting the cost of the promise at at least $1 trillion.
    2. Scale against India: That sum is close to a fourth of India’s entire GDP of $3.92 trillion in 2025 to 26.
    3. State transfers in India: The Sixteenth Finance Commission estimates large group unconditional cash transfers by states at Rs 1.96 lakh crore in 2025 to 26, roughly $20 billion, the bulk of it going to women in Maharashtra, Karnataka and West Bengal.
    4. Approval risk: The US dividend is a promise and not an appropriation. It requires the United States Congress to approve the spending.

    How did cash transfers become the common instrument of Indian electoral politics?

    1. Origin in delivery reform: DBT began as a leakage reduction measure under the second United Progressive Alliance government, built on the JAM trinity rather than on an electoral calculation.
    2. The electoral discovery: An advisor to that government framed the appeal in terms of funds reaching a voter’s account at the click of a mouse ahead of an election.
    3. Cross party adoption: Regional parties, the Congress and the Bharatiya Janata Party all now carry cash handouts to sections of their voter base in their manifestos.
    4. Reversal of a stated position: The Prime Minister’s July 2022 warning against the practice was followed by his own party’s state units adopting it, producing a competitive escalation between state units, regional parties and the Congress.

    What does the spread of cash transfers reveal about the state?

    1. A political economy fallout: Cash transfers expanded because the state failed on health, education and skilling, leaving parties to offer money in place of services.
    2. Substitute forms of security: The same failure produces minimum income through job guarantees, cash in the hands of women and allowances for the literate but jobless, each of them a payment standing in for a missing service.
    3. Universality of the instrument: A rich economy with 34 times India’s per capita income reaches for the same device, which shows the appeal is electoral rather than developmental.

    Challenges to unconditional cash transfers

    1. Recurring outlay against capital spending: A monthly transfer becomes a permanent charge on a state budget and competes with capital spending on hospitals, schools and water supply. Eg. Maharashtra’s Ladki Bahin scheme and Karnataka’s Gruha Lakshmi are annual recurring commitments rather than one time payments.
      The Fix: Report unconditional transfer outlay as a disclosed share of a state’s own revenue receipts in every annual budget document.
    2. Absence of human capital conditionality: An unconditional payment asks nothing of the household, so it does not move school attendance or immunisation. Eg. Mexico’s Progresa linked benefits to school attendance and health check ups, and Brazil’s Bolsa Familia used conditional transfers to lift 36 million people out of poverty.
      The Fix: Attach verifiable attendance and immunisation conditions where the delivery system can already confirm them.
    3. Exclusion through the identification layer: Eligibility rests on databases, and a household with unseeded or mismatched records drops out of the list without knowing why. Eg. Aadhaar seeding failures have removed ration card holders from beneficiary lists in Jharkhand.
      The Fix: Provide an offline grievance and reinstatement route at the block level with a fixed disposal deadline.
    4. Pressure off the public provider: Cash allows a household to buy the private service the state failed to supply, which removes the political pressure to repair the public one. Eg. Out of pocket spending on private hospitals remains a leading route into household impoverishment in India.
      The Fix: Publish a service availability audit of the relevant public facilities alongside each transfer scheme.

    Conclusion

    A cash transfer buys immediate relief and buys it visibly, which is why it has crossed from a lower middle income democracy to the richest one. It does not build a health centre, staff a school or train a worker, and the states expanding it fastest are the ones whose service delivery gaps created the demand for it. The tension is unresolved: the instrument is popular precisely because the public system it compensates for has not been fixed, and every rupee committed to the transfer makes fixing that system harder to finance.

    What is Inclusive Growth?

    1. About: Inclusive growth is economic growth distributed fairly across society that creates opportunity for all, as defined by the Organisation for Economic Co operation and Development (OECD).
    2. Rationale: It entered India’s stated policy goals with the Eleventh Five Year Plan (2007 to 2012), titled “Rapid and More Inclusive Growth”, and continued in the Twelfth Plan as “Faster, Sustainable, and More Inclusive Growth”.
    3. The OECD typology: Three dimensions govern it. Participation, meaning all groups can contribute to growth; benefit sharing, meaning all groups gain in proportion to their contribution; and equity, meaning historical disadvantage is actively redressed.
    4. How it is measured: The National Multidimensional Poverty Index across health, education and living standards, the Gini coefficient for consumption or income inequality, the Human Development Index, and the Periodic Labour Force Survey for participation and unemployment.

    Government Initiatives for Inclusive Growth

    1. Pradhan Mantri Garib Kalyan Anna Yojana: Free food grain to 81.35 crore beneficiaries, extended to 31 December 2028 at an outlay of about Rs 11.80 lakh crore.
    2. Viksit Bharat G RAM G Act, 2025: Replaces the Mahatma Gandhi National Rural Employment Guarantee Act with a 125 day wage guarantee plus skill and livelihood diversification components, effective 1 July 2026.
    3. Ayushman Bharat PM JAY: Health cover of Rs 5 lakh a year for 55 crore beneficiaries, now extended to all persons above 70 under Ayushman Vay Vandana.
    4. Pradhan Mantri Mudra Yojana and PM SVANidhi: Rs 27 lakh crore disbursed across 43 crore micro enterprise loans since 2015, and collateral free credit of Rs 10,000 to Rs 50,000 for street vendors.

    Matching Previous Year Question

    “[2024, GS3, 10 marks] Examine the pattern and trend of public expenditure on social services in the post-reforms period in India. To what extent this has been in consonance with achieving the objective of inclusive growth?”

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