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  • To build Delhi’s future, learn from past missteps

    Why in the News

    Delhi’s fourth Master Plan was notified last week, with an emphasis on expanding public transport, ecological restoration, redevelopment, affordable housing and mixed land use. It follows the third Master Plan, which came into effect about 25 years ago when the city’s population was about 14 million, Gurugram and Noida were fledgling suburbs, the first lines of the Metro network were being laid, and a compressed natural gas policy for public transport had been introduced as a pollution-control measure. Another 10 million people have made the capital their home since then, and the air quality improvement of the 2000s and early 2010s has given way to an almost intractable pollution crisis. The third plan’s vision of a more sustainable city was defeated by municipal inertia and a lack of alignment among civic agencies, the Centre and the Delhi government. The contest is whether the fourth plan’s content can survive the same fragmented authority that defeated the third.

    What is the Delhi Master Plan?

    1. What it is: A Master Plan is a statutory long-range land use document that fixes how land in a planning area may be used, at what density, and with what infrastructure provision.
    2. Statutory basis: The Delhi Development Authority prepares and the Central Government approves it under the Delhi Development Act, 1957, which makes departure from the notified land use unlawful.
    3. Cycle: Each plan runs for a perspective period of roughly two decades, and the plan notified last week is the fourth in the series.

    What has changed in Delhi since the third Master Plan?

    1. Population then: The city’s population was about 14 million when the third Master Plan came into effect about 25 years ago.
    2. Population added since: Another 10 million people have made the capital their home in the intervening period.
    3. Satellite cities were still small: Gurugram and Noida were fledgling suburbs at that point and are now full cities in their own right.
    4. The Metro did not yet exist: The first lines of the capital’s Metro network were being laid when the third plan took effect.
    5. The pollution response of that era: A compressed natural gas policy for public transport had just been introduced as a pollution-control measure.
    6. Two outcomes since: Civic infrastructure in the neighbouring cities has come under acute stress, and the air quality improvement Delhi experienced for much of the 2000s and early 2010s has given way to an almost intractable pollution crisis.

    What does the fourth Master Plan propose?

    1. Five stated emphases: The plan is built around expanding public transport, ecological restoration, redevelopment of built-up areas, affordable housing and mixed land use, which reverses the outward expansion the earlier plans assumed.
    2. A large housing target: It carries an ambition of roughly 40 lakh additional homes by 2047 at affordable rates, to be met on land already inside the city rather than through fresh acquisition at the periphery.
    3. Higher permitted densities: Development norms are made more flexible so an existing plot can carry more floor space, which is the mechanism by which the housing target is to be delivered without new land.
    4. An end to rigid zoning: The plan records the futility of rigidly demarcating residential and commercial areas, since mixed use shortens the average work trip and lightens the load on the road network.
    5. Water bodies get attention: Restoration of the city’s water bodies and the nurturing of green spaces enter the plan as a standing planning obligation rather than as a separate departmental programme.
    6. The claimed payoff: Implemented as written, these measures ease the city’s longstanding traffic congestion and improve its air quality.

    Why can Delhi no longer grow by expanding outward?

    1. Land inside the territory is finite: With limited land available within the National Capital Territory, outward expansion has reached its limit.
    2. Existing land must work harder: Better utilisation of existing urban land therefore becomes more important than acquiring new land at the edge.
    3. The periphery is already strained: The stress on the civic infrastructure of neighbouring cities shows that pushing growth outward transfers the problem rather than solving it.
    4. Density and transport reinforce each other: Environment-friendly transport combined with mixed land use shortens trips, which is where the congestion and air quality gains come from.
    5. Ecological health follows land use: Redevelopment paired with the nurturing of green spaces and the city’s water bodies is what connects the land use choice to the well-being of residents.

    Why does fragmented civic authority defeat a good plan?

    1. Two persistent governance deficits: Municipal inertia and a lack of alignment among civic agencies, the Centre and the Delhi government are the national capital’s most persistent governance problems.
    2. They defeated the previous plan: These deficits were the biggest bottleneck in realising the previous Master Plan’s vision of a more sustainable city.
    3. Twenty-five years of research say the same thing: Work on pollution, Yamuna restoration, waste management, urban flooding and transport development has pointed consistently to the need for concerted action among departments.
    4. Metro expansion depends on four other agencies: A Metro line works best when bus routes, last-mile connectivity, parking rules and pedestrian facilities are designed around it, and each of those sits with a different authority.
    5. Land use cannot be separated from drainage: Land-use planning and infrastructure development cannot be divorced from the requirements of curbing water logging.
    6. Safety approvals need shared information: Building approvals, fire safety and emergency response require effective information-sharing among construction, fire and municipal authorities.
    7. The failures are already visible: Repeated fire incidents, building collapses and the strain placed on the city’s infrastructure during heavy rainfall have exposed the risks of fragmented and overlapping responsibilities among agencies.

    Challenges to the fourth Delhi Master Plan

    1. Higher density without matching services: Raising permitted density on existing land increases the load on water, sewerage and power networks that are already at capacity. Eg. Under 27 per cent of urban homes in India are connected to sewer lines. Fix. Tie each density increase to a notified infrastructure augmentation plan for that zone before the higher norm takes effect.
    2. Affordable housing targets have historically underdelivered: A large notified housing number does not by itself produce units at prices the intended buyers can pay. Eg. India carries an estimated shortage of about 1.87 crore urban housing units. Fix. Use in-situ redevelopment and rental stock alongside ownership housing, on the model of the Odisha JAGA Mission’s land titling.
    3. Unauthorised construction outruns the plan: Land use notified on paper is routinely departed from where enforcement is weak, which converts the plan into a document rather than a constraint. Eg. Only about 30 per cent of India’s urban land is properly planned. Fix. Publish a public geographic information system layer of notified land use against surveyed construction, updated annually.
    4. No single planning authority for the region: Delhi’s growth spills into Gurugram, Noida and Ghaziabad, which the National Capital Territory plan cannot bind. Eg. Congestion costs Delhi commuters 76 hours a year, much of it on inter-state commutes. Fix. Constitute and empower a Metropolitan Planning Committee under Article 243ZE with a statutory regional land use mandate.
    5. Municipal finances cannot fund the plan: Ecological restoration, drainage and transit feeders require sustained capital that city governments do not raise. Eg. Indian cities raise under 0.6 per cent of Gross Domestic Product in their own revenue, of which property tax is only 0.15 per cent. Fix. Modernise property tax assessment and issue municipal bonds against ring-fenced user charge revenue.

    Conclusion

    Delhi’s fourth Master Plan is a credible blueprint, and its emphasis on compact growth, mixed land use, public transport and ecological restoration addresses the failures of the last 25 years. Its content is not the binding constraint. The fragmentation of civic authority that defeated its predecessor, examined above, is left untouched by it. Delhi has a blueprint for improving liveability, and what it needs is to learn from past failures.

    “[2019, GS1, 15 marks] How is efficient and affordable urban mass transport key to the rapid economic development of India?”

  • Triple test, adrift

    Why in the News

    On 20 August 2026, a nine judge Bench of the Supreme Court of India delivered a judgment on the correctness of the ruling in Bangalore Water Supply and Sewerage Board vs A. Rajappa (1978). That 1978 judgment laid down the “Triple Test” for what counts as an “industry” under Section 2(j) of the Industrial Disputes Act, 1947. The present Bench left the Triple Test standing for all pending disputes under the older Act. A majority of the same Bench also ruled that the 1978 judgment will not be a “sheet anchor” for interpreting Section 2(p) of the Industrial Relations Code, 2020. The tension is that Section 2(p) itself reproduces much of the Triple Test’s essence, so an interpretive framework has been severed from a provision that continues to embody it.

    What is the “Triple Test” on what counts as an “industry”?

    1. The three conditions: An activity qualifies as an industry where three conditions are met together: a systematic activity, employer-employee cooperation, and production or distribution of goods and services to satisfy human wants other than those that are purely religious or spiritual.
    2. Profit is irrelevant: Profit motive plays no part in the determination. What matters is the nature of the activity itself, so a loss making or non-commercial body can still be an industry.
    3. The single exclusion: Only “sovereign functions” stand outside the definition, which is a narrow carve out rather than a general exemption for the State.

    How did the reference reach a nine judge Bench?

    1. The origin: The Triple Test was laid down in the 1978 judgment, which read Section 2(j) of the Industrial Disputes Act, 1947 expansively.
    2. The doubt: A five judge Bench in State of U.P. vs Jai Bir Singh (2005) raised a doubt about that definition.
    3. The escalation: A seven judge Bench then sent the question to the current nine judge Bench.
    4. The statute changed while the reference was pending: The Industrial Disputes Act, 1947 was repealed on 21 November 2025, when the Industrial Relations Code, 2020 came into force.
    5. The Bench therefore faced two statutes: It had to decide the status of the Triple Test both for disputes still pending under the repealed Act and for interpretation of the successor provision, which is why the ruling splits along those two lines.

    What did the majority and the dissent hold?

    1. Pending disputes are unaffected: The Bench, led by the Chief Justice of India, left the Triple Test standing for all pending disputes under the older Industrial Disputes Act, 1947.
    2. The anchor was removed for the new Code: A majority of the nine judge Bench ruled that the 1978 judgment will not be a “sheet anchor” for interpreting Section 2(p) of the Industrial Relations Code, 2020.
    3. The dissent went further than disagreement: The dissenting opinion held that the reference itself was unnecessary and that the Triple Test requires no interference at all.
    4. The dissent was not isolated: That view was shared by three other judges on the Bench, so the split on the reference question was narrow rather than lopsided.

    Why does an expansive definition of “industry” matter more now than in 1978?

    1. The workforce has moved: Since 1978, and particularly after the liberalisation and privatisation reforms of 1991, a far higher number of workers have moved to the private sector, out of the security of public employment.
    2. Security no longer comes from the employer: For a worker outside public employment, statutory coverage rather than employment status is what provides protection.
    3. Definition decides access: Whether an establishment is an “industry” determines whether its workers can raise an industrial dispute at all, so the definition is the gateway to every protection that follows.
    4. Most of the workforce is outside formal protection: About 90 per cent of India’s workforce is informal, and nearly 58 per cent of salaried workers still lack a written contract.
    5. The expansive reading is therefore a bulwark: An expansive definition of industry is more necessary now than it was in 1978, precisely because the cushion of public employment has shrunk.

    Was the Triple Test a pro-labour device or a framework for industrial peace?

    1. It was not merely pro-labour: The Triple Test was not only a device for extending worker protection, though it is usually described that way.
    2. It brought restrictions with it: An expansive definition of industry brought with it not just the protections of the Industrial Disputes Act, 1947 but also its restrictions.
    3. The employer gained a defined route: It gave employers a regulated route to retrenchment and closure, rather than leaving those decisions to be contested without a framework.
    4. Workers accepted a limit in return: It carried a bar on workers striking at will, so the coverage came with a procedural discipline on industrial action.
    5. The net effect was industrial peace: In essence the Triple Test allowed for industrial peace rather than worker welfare alone, which is what makes its removal a loss to both sides rather than to one.

    Why is setting the 1978 judgment aside difficult to justify?

    1. The successor provision did not change the test: Section 2(p) of the Industrial Relations Code, 2020 does not move away from the Triple Test formula and reproduces much of its essence.
    2. The reasoning does not follow: It is therefore difficult to understand why the 1978 judgment has to be set aside when Section 2(p) itself comes up for interpretation.
    3. A framework, not just a precedent, was cut away: Severing that principle from the Code cuts away the interpretive framework that allowed such disputes to be resolved at all.
    4. Two footings now coexist: Pending disputes under the repealed Act will be decided on the Triple Test, and disputes under the Code will be decided without it as an anchor, on a definition that says much the same thing.
    5. The burden shifts to the lower courts: It is now incumbent upon courts and tribunals to ensure that a change of statute is not read as a change of intent, and they must do so with the anchor removed.

    Challenges to the definition of “industry” under the Industrial Relations Code, 2020

    1. Litigation will restart from zero: With the 1978 judgment displaced as the anchor, every category of establishment settled over four decades becomes arguable again. Eg. Hospitals, educational institutions and charitable bodies were brought within the definition on the strength of that judgment. Fix. Insert a statutory explanation to Section 2(p) listing the categories expressly included and excluded, so the question is settled by text rather than by fresh litigation.
    2. The “sovereign functions” exclusion has no statutory boundary: The carve out is judicially defined, so its width expands or contracts with each ruling rather than by legislative choice. Eg. Municipal and public utility bodies performing statutory duties have repeatedly contested their status as industries. Fix. Define sovereign functions in the Code by reference to a listed set of constitutional functions.
    3. Threshold changes shrink the protected group: Raising the retrenchment and closure approval threshold reduces how many workers the framework covers regardless of how “industry” is defined. Eg. The Industrial Relations Code, 2020 raises the closure and retrenchment threshold from 100 to 300 workers. Fix. Pair the higher threshold with a statutory retrenchment compensation escalator and a funded reskilling entitlement.
    4. Platform and contract work sits outside the frame: The employer-employee cooperation limb assumes an identifiable employer, which app-mediated and multi-layered contract work does not supply. Eg. Aggregator platforms classify workers as partners rather than employees, which places them outside the industrial dispute route. Fix. Deem an aggregator to be the principal employer for the purpose of dispute resolution where it controls pricing and task allocation.
    5. Two parallel regimes will run for years: Pending disputes under the repealed Act and new disputes under the Code will be decided on different interpretive footings for as long as the backlog lasts. Eg. Industrial disputes routinely take a decade or more to reach final decision. Fix. Issue a transitional provision directing that Section 2(p) be construed consistently with the settled position under Section 2(j) for a stated period.
    6. Tribunal capacity has not been strengthened: A framework that shifts interpretive burden to tribunals fails where those tribunals are understaffed and slow. Eg. Industrial tribunals and labour courts carry long standing vacancies alongside a large pending case load. Fix. Fill sanctioned tribunal posts on a fixed calendar and publish disposal timelines for industrial dispute references.

    Conclusion

    The nine judge Bench preserved the Triple Test where it no longer decides much and removed it where it would have decided most. The relationship between the successor provision and the test, set out above, is what makes that split hard to defend. The dissenting view, that the reference was unnecessary and the test required no interference, is the more coherent reading of a workforce that has moved into private employment since 1978 and needs an expansive definition more, not less. It now falls to courts and tribunals to ensure that a change of statute is not read as a change of intent, without the anchor that would have made that straightforward.

    “[2024, GS3, 15 marks] Discuss the merits and demerits of the four ‘Labour Codes’ in the context of labour market reforms in India. What has been the progress so far in this regard?”

  • Vande Mataram and the right to dissent

    Why in the News

    Parliament has given Vande Mataram the same criminal-law protection long enjoyed by the national anthem, through the Prevention of Insults to National Honour (Amendment) Bill, 2026. The amendment follows the government’s push, since late 2025 and around the song’s 150th anniversary, to popularise and even mandate all six stanzas at official functions. The amended text does neither of those things: it does not compel any citizen to sing, and it does not prescribe which stanzas of the song attract its protection. The contest is between that narrow statutory text and the political framing around it, with Bijoe Emmanuel & Ors. v. State of Kerala (1986) standing as the controlling precedent on whether a citizen can be compelled to join a patriotic recitation against conscience.

    What is the Prevention of Insults to National Honour (Amendment) Bill, 2026?

    1. What it amends: It substitutes Section 3 of the Prevention of Insults to National Honour Act, 1971, the statute that already protected the national anthem from disrespect.
    2. What it punishes: It punishes two things and only two things, in relation to both the national anthem and the national song: intentionally preventing their singing, and causing disturbance to an assembly engaged in singing them.
    3. The punishment: Up to three years’ imprisonment, a fine, or both. A mandatory minimum of one year applies to repeat offenders.
    4. What it equalises: That punishment is now common to both compositions, so the national song carries the same criminal protection as the anthem.

    Why was Vande Mataram never made the national anthem?

    1. The question was left open almost to the end: India’s national anthem was left unsettled for nearly the entire life of the Constituent Assembly.
    2. It was settled by a statement, not a vote: The matter was resolved by a presidential statement on 24 January 1950, at the Assembly’s last sitting, declaring Jana Gana Mana the National Anthem of India.
    3. Vande Mataram was given equal status, not anthem status: The same statement said the song, “which has played a historic part in the struggle for Indian freedom, shall be honoured equally with Jana Gana Mana and shall have equal status with it.” It did not make it the anthem or a co-anthem.
    4. The Constitution is silent on a national song: The Constitution, which came into force two days later, contains no reference whatsoever to a “national song”, so the song’s status rests entirely on the 1950 statement and on subsequent convention.
    5. The restraint came from a 1937 decision: Objections from the Muslim League and others led the Congress Working Committee, in October 1937, to resolve that only the first two stanzas, pastoral, secular in imagery and free of any reference to a deity, would be sung at official gatherings.
    6. The objection was to the song’s source text: The later stanzas invoke the motherland in explicitly devotional, goddess-centred terms, and in the context of the 1882 novel Anandamath, from which the song is drawn, some verses were read as casting Muslims as adversaries.

    How was the Amendment passed?

    1. Introduction and passage: The Bill was introduced in the Rajya Sabha on 24 July 2026 and cleared both Houses within a week.
    2. The House dates: The Rajya Sabha cleared it on 29 July and the Lok Sabha on 30 July, each after only a brief discussion.
    3. The Opposition’s objection: The Dravida Munnetra Kazhagam (DMK) and the Congress raised strong objections that the Bill was being used to advance a particular cultural agenda, and objected to its timing amid unrelated protests in the House.
    4. Assent: It received Presidential assent shortly after passage in both Houses.
    5. The scrutiny it received: It was one of 12 Bills passed in a Monsoon Session in which, by Parliament’s own record, most legislation went through with barely any discussion. For a law touching religious sentiment, free expression and criminal liability at once, that is remarkably little parliamentary scrutiny.

    What does the Amendment not do?

    1. It prescribes no version: Nowhere does the amended Act say which stanzas of Vande Mataram must be sung, or that all six stanzas must be sung, for the law’s protection to apply.
    2. It does not compel singing: The statute does not compel singing in the first place, by anyone, of any stanza.
    3. The obligation is conditional and negative: All the amended Section 3 requires is that if the national song is being sung, at whatever length and in whatever form, that rendition must not be intentionally prevented or disturbed.
    4. It is narrower than the framing around it: That is a materially narrower obligation than the political framing around the Bill, including the push since late 2025 to mandate all six stanzas at official functions, would lead the public to believe.
    5. What it actually penalises: The law penalises disrespect and disruption of a performance. On its text it does not mandate participation in one, and it does not fix which version of the song is entitled to protection.

    Why do the later stanzas raise a constitutional difficulty?

    1. The opening stanzas are pastoral: The commonly sung opening stanzas describe the motherland in pastoral terms: her waters, her fruit, her cooling breezes, her fields.
    2. The later stanzas change register entirely: In substance, and in every available English rendering, they describe the motherland as embodied in the Hindu goddesses Durga, Lakshmi and Saraswati, goddesses of power, wealth and learning.
    3. They read as prayer, not patriotic verse: They speak of her as an object of worship enshrined in temples, with “crores” of arms raised in her defence. On a plain reading this is a devotional address to a deity, structured in the grammar of prayer.
    4. Two fundamental rights are engaged: Article 25 guarantees freedom of conscience and the free profession, practice and propagation of religion. Article 26 guarantees a denomination the right to manage its own religious affairs without State interference.
    5. Coercive pressure is enough to raise the difficulty: For adherents of monotheistic faiths, being required to stand through an extended recitation addressed to Hindu goddesses, whether by direct compulsion or by a criminal statute looming over the assembly, raises a serious constitutional difficulty. That discomfort is exactly the conscientious objection Articles 25 and 26 exist to protect.
    6. An ordinary law cannot override a fundamental right: No ordinary legislation, however patriotically framed or however large its parliamentary majority, can override a fundamental right, so a law pressuring citizens into a devotional performance contrary to their faith would not survive Part III scrutiny.

    What did Bijoe Emmanuel hold?

    1. The facts: Three siblings, practising Jehovah’s Witnesses, stood respectfully and silently while their schoolmates sang Jana Gana Mana during morning assembly, since their faith forbade joining in what they understood as an act of worship of anyone or anything other than god. They were expelled for this.
    2. The High Court position: The Kerala High Court upheld the expulsion, holding that the Article 51A fundamental duty to respect the national anthem overrode any claim under Articles 25 and 26.
    3. The reversal: A Division Bench of the Supreme Court reversed the High Court in emphatic terms in 1986.
    4. The two rights engaged: The Bench held that compelling a person to join in singing despite a genuine, conscientiously held religious objection contravenes Article 19(1)(a), freedom of expression, which the Court held extends to the freedom to remain silent, and Article 25(1), the guarantee of freedom of conscience.
    5. Duties cannot cut down rights: The Court held that the fundamental duties enumerated under Article 51A cannot be used to cut down or override the fundamental rights guaranteed under Part III. A duty to respect national symbols cannot in law be turned into a licence to punish sincere religious dissent.
    6. The 1971 Act was read narrowly: The Court read the 1971 Act itself as requiring nothing more than respectful conduct, not active participation from anyone present. It closed by observing that the country’s tradition, philosophy and Constitution alike “practise tolerance”.

    What is the settled legal position now?

    1. The precedent stands: The 1986 ruling has never been overturned, and its logic transfers with full force to the national song.
    2. It applies with greater force here: The song’s later verses are, unlike the anthem, addressed to specific deities, so a citizen objecting to reciting them stands on stronger ground than the objector in the 1986 case did.
    3. Official recognition was always confined: The Constituent Assembly and the founding leadership deliberately confined official recognition to the first two, secular stanzas, which is precisely why the fuller devotional version was never made compulsory.
    4. No textual obligation to sing exists: The 2026 Amendment imposes no textual obligation on any citizen to sing any particular version of the song, let alone all six stanzas.
    5. Silent respect is not an offence: Standing respectfully, in silence, without disrupting others, is not an offence under the amended Act, was not an offence under the original 1971 Act, and cannot be made one merely by extending the statute to a new composition.

    Challenges to the Prevention of Insults to National Honour (Amendment) Bill, 2026

    1. “Disturbance” is left undefined: The offence turns on causing disturbance to an assembly, a term the statute does not define, which leaves its scope to the complainant and the investigating officer. Eg. A citizen who remains seated or silent during a recitation may be read as disturbing it, which is precisely what the 1986 ruling forbids. Fix. Insert a statutory explanation excluding silent non-participation and peaceful abstention from the meaning of disturbance.
    2. The political framing exceeds the text: Official messaging around the law suggests a duty to sing all six stanzas, so citizens act on the framing rather than on the statute. Eg. The Ministry of Home Affairs’ Orders relating to the National Anthem of India are executive instructions carrying no penal force, yet schools and public institutions routinely enforce them as though they were binding law. Fix. Issue an advisory to State governments and school authorities recording that the Act creates no obligation to participate in a rendition.
    3. It was passed without scrutiny: A law touching religious sentiment, free expression and criminal liability at once cleared both Houses within a week on brief discussion. Eg. It was one of 12 Bills passed in a Monsoon Session where most legislation passed with barely any debate. Fix. Refer any Bill creating or extending a criminal offence to a Standing Committee as a default rule of procedure.
    4. Cognisance risks vexatious complaint: A criminal provision available to any complainant against a person present at a public assembly invites use as a tool of local pressure. Eg. Cinema hall anthem prosecutions after 2016 produced repeated complaints against individuals who stayed seated for medical or conscientious reasons. Fix. Require prior sanction from a district level authority before a court takes cognisance of an offence under Section 3.
    5. A mandatory minimum removes judicial discretion: The one year minimum for repeat offenders forecloses proportionality in cases where the conduct is trivial or conscientious. Eg. A repeat conscientious abstainer wrongly booked twice would face the same floor as a deliberate disruptor. Fix. Replace the mandatory minimum with a graded sentencing guideline keyed to intent and to actual disruption caused.
    6. Enforcement asymmetry across compositions: Extending equal protection to a composition whose later verses are devotional creates unequal burdens on citizens of different faiths at the same public event. Eg. A monotheistic believer at a school function faces a choice the same statute does not impose on others present. Fix. Confine the protected rendition at State functions to the first two stanzas, as the 1937 Congress resolution and the 1950 statement already did.

    Conclusion

    The Amendment extends the anthem’s criminal protection to the national song without compelling anyone to sing it and without fixing which stanzas count. The three strands, the founding decision to recognise only the first two secular stanzas, the narrow text of the new Section 3, and the 1986 precedent on freedom of conscience, converge on a single conclusion: a citizen who declines to join in on grounds of conscience is under no legal obligation to participate, and needs no court to say so. The measure has received Presidential assent and is now in force, and the source records no further legislative milestone attached to it. What remains unresolved is application rather than text, since the danger lies in how a statute framed narrowly is enforced against those who exercise the silence the Constitution protects.

    “[2025] Consider the following pairs: Provision in the Constitution of India: Stated under

    I. Separation of Judiciary from the Executive in the public services of the State The Directive Principles of the State Policy

    II. Valuing and preserving of the rich heritage of our composite culture The Fundamental Duties

    III. Prohibition of employment of children below the age of 14 years in factories The Fundamental Rights

    How many of the above pairs are correctly matched?

    (a) Only one

    (b) Only two

    (c) All the three

    (d) None

  • Cong: LS not prorogued, is Shah still pushing delimitation Bill?

    Why in the News

    The Congress general secretary in-charge of communications has questioned why the Lok Sabha has not been prorogued ten days after being adjourned sine die. He asked whether the Union Home Minister was still in search of a two-thirds majority to get the Constitutional Amendment Bill on delimitation passed in a special session. The reference is to a twin legislative package: a Constitutional Amendment Bill to advance women’s reservation to 2029, and a Delimitation Bill to increase the strength of the Lok Sabha to up to 850 seats. A House that has been adjourned sine die but not prorogued remains technically in session, which leaves the Presiding Officer able to reconvene it without a fresh summons from the President. A former Secretary General of the Lok Sabha has stated that no clear rule fixes when Parliament should be prorogued after a House is adjourned sine die.

    What is prorogation?

    1. The act itself: Prorogation is the formal termination of a session of a House of Parliament by the President. It ends the session, unlike adjournment, which only suspends a sitting.
    2. Who exercises it: The President prorogues the House on the advice of the Council of Ministers. The Prime Minister advises the President on summoning and proroguing Parliament and on dissolving the Lok Sabha.
    3. How it differs from adjournment sine die: Adjournment sine die is the termination of a sitting for an indefinite period, and it is done by the Presiding Officer of the House. The House remains in session until prorogation is notified.
    4. What it does to pending business: Prorogation ends all pending notices, including questions and motions, other than Bills, which do not lapse on prorogation. Bills lapse only on dissolution of the Lok Sabha, subject to the exceptions the Constitution provides.

    Why does the ten day gap matter?

    1. The normal interval: The time gap between the adjournment of the Lok Sabha sine die and its prorogation is generally two to four days. There are many instances when adjournment and prorogation have taken place on the very same day.
    2. The interval in this case: Ten days have passed since the House was adjourned sine die. No information on its prorogation has been made available.
    3. The longer precedents cited: The gap for the Monsoon Session was 28 days in 2015 and 20 days in 2021. The Congress position is that no comparable legislative move was pending on either occasion.
    4. What an unprorogued House permits: A House still in session can be reconvened by the Presiding Officer without the President issuing a fresh summons. The procedural cost of resuming business is therefore lower than convening a special session from scratch.
    5. The political inference drawn: The Congress reading is that the delay preserves the option of resuming the same session once the numbers for a Constitutional Amendment are assembled. The Union Minister of Parliamentary Affairs did not respond to a request for comment.

    What is the twin legislative package at issue?

    1. The Constitutional Amendment Bill: It seeks to advance the implementation of women’s reservation to 2029. The 106th Constitutional Amendment of 2023 provides 33 per cent reservation for women in the Lok Sabha and State Assemblies, and ties implementation to the next Census and a fresh delimitation.
    2. The Delimitation Bill: It seeks to increase the strength of the Lok Sabha to up to 850 seats. A delimitation exercise would be required to give effect to that expansion.
    3. What delimitation is: Delimitation is the act of fixing the limits or boundaries of territorial constituencies to reflect population changes. Article 82 mandates Parliament to enact a Delimitation Act after every Census.
    4. The freeze the package would end: The 42nd Amendment of 1976 froze seat allocation on the 1971 Census until 2000, and the 84th Amendment of 2001 extended that freeze until the first Census after 2026. The proposed expansion is the first readjustment of Lok Sabha strength since that freeze was imposed.
    5. Why the majority threshold governs the timing: A Constitutional Amendment Bill requires a special majority, which includes a majority of the total membership of each House and two-thirds of members present and voting. The Bill cannot be moved to a vote until that support exists.

    Is there a rule the delay breaches?

    1. No fixed interval is prescribed: No clear rule states when Parliament should be prorogued after a House is adjourned sine die, in the assessment of a former Secretary General of the Lok Sabha. Prorogation is described as a routine practice rather than a timed obligation.
    2. The constitutional source of the power: Article 85(2)(a) empowers the President to prorogue the Houses from time to time. Article 85(2)(b) separately empowers the President to dissolve the Lok Sabha.
    3. The only hard timing rule: Article 85(1) requires that six months shall not intervene between the last sitting of one session and the first sitting of the next. That is the outer limit on the gap between sessions, not on the gap before prorogation.
    4. Where the discretion actually sits: The President acts on the advice of the Council of Ministers in exercising the power. The executive therefore controls both the summoning and the closing of a session.

    Challenges to prorogation as a procedural check

    1. The timing is entirely executive-controlled: No statute or rule of procedure obliges the government to advise prorogation within a stated period. Eg. The interval has ranged from the same day to 28 days for the Monsoon Session of 2015. Fix. Prescribe an outer limit in the Rules of Procedure requiring prorogation within a fixed number of days of adjournment sine die.
    2. Parliament cannot summon itself: Members have no mechanism to require a sitting where the executive does not advise one. Eg. The Article 85(1) six month rule is the only enforceable constraint, and it permits long stretches with no sitting. Fix. Adopt a statutory parliamentary calendar fixing the number of sitting days per year, as the National Commission to Review the Working of the Constitution recommended in 2002 at 110 days.
    3. The special session route bypasses the ordinary calendar: A session convened outside the three-session cycle compresses notice, scrutiny and committee referral. Eg. The Women’s Reservation Bill in 2023 was introduced and passed within a special session convened for the purpose. Fix. Require that any Bill taken up in a special session first stand referred to a Departmentally Related Standing Committee.
    4. Prorogation ends scrutiny instruments without ending the government’s agenda: Questions and motions lapse on prorogation and Bills survive it, so the balance of the reset favours the executive. Eg. A pending starred question falls away while the Bill it concerned remains on the books. Fix. Carry over admitted questions and motions to the succeeding session on the model used for Bills.
    5. The ordinance route substitutes for a sitting House: A prorogued House allows the executive to legislate by ordinance under Article 123. Eg. Ordinances have been repromulgated across successive gaps between sessions rather than replaced by legislation. Fix. Enforce the bar on repromulgation laid down in Krishna Kumar Singh v. State of Bihar (2017) by requiring a laid statement of reasons for every ordinance.

    Conclusion

    The Lok Sabha stands adjourned sine die and not yet prorogued ten days on, which keeps the session formally alive and the option of reconvening it open. No rule fixes the permissible interval, so the delay is unusual rather than irregular, and the objection raised is about intent rather than legality. The twin legislative package at issue, the Constitutional Amendment on women’s reservation and the Delimitation Bill that accompanies it, remains untabled for a vote. The next milestone is the notification of prorogation or the summoning of a session in which the Constitutional Amendment Bill is moved.

    “[2024] With reference to the Parliament of India, consider the following statements:

    1. Prorogation of a House by the President of India does not require the advice of the Council of Ministers.

    2. Prorogation of a House is generally done after the House is adjourned sine die, but there is no bar to the President of India proroguing the House which is in session.

    3. Dissolution of the Lok Sabha is done by the President of India who, save in exceptional circumstances, does so on the advice of the Council of Ministers.

    Which of the statements given above is/are correct?

    (a) 1 only

    (b) 1 and 2

    (c) 2 and 3

    (d) 3 only

  • The rural-urban divide in female labour force participation

    Why in the News

    The Periodic Labour Force Survey (PLFS) 2025 records a significant increase in the Female Labour Force Participation Rate (FLFPR) since 2020, following the COVID-19 pandemic. The overall rate for women aged 15 years and above rose from 30 per cent in 2019-20 to 40 per cent in 2025. The increase was far more pronounced in rural areas, where the rate rose from 33 per cent to 45.9 per cent, against a rise from 23.3 per cent to 27.7 per cent in urban areas. The tension the data raises is that the pace of improvement, measured as the Average Annual Percentage Point (AAPP) change, cannot be read on its own, since a State with a low pace may already sit at a high level of participation.

    What is the Female Labour Force Participation Rate?

    1. Definition: The Female Labour Force Participation Rate is the ratio of women in the labour force to women of working age, taken as 15 years and above.
    2. What counts as participation: The labour force includes women who are employed and women who are unemployed but seeking or available for work, so the rate moves when women enter or leave the search for work, not only when they find it.
    3. What it leaves out: Unpaid domestic work and unpaid caregiving inside a woman’s own household are not counted as labour force participation, so a large volume of work sits outside the measure by construction.

    How large is the rural-urban gap in the headline numbers?

    1. The national rate rose by ten percentage points: Female labour force participation for those aged 15 and above moved from 30 per cent in 2019-20 to 40 per cent in 2025.
    2. Rural India accounts for most of the gain: The rural rate rose from 33 per cent to 45.9 per cent, a gain of about 12.9 percentage points across the period.
    3. Urban India moved far less: The urban rate rose from 23.3 per cent to 27.7 per cent, a gain of about 4.4 percentage points, under half the pace of the rural gain in percentage point terms.
    4. The gap widened rather than closed: Rural participation began roughly 9.7 percentage points above urban participation and ended about 18.2 percentage points above it.
    5. The divergence is what needs explaining: This substantial rural-urban difference is what warrants a more granular, State level analysis rather than a single national figure.

    Which States improved fastest in rural areas?

    1. Seven States beat the national rural pace: West Bengal (3.68), Uttar Pradesh (3.64), Gujarat (3.38), Odisha (3.28), Bihar (3.23), Rajasthan (3.06) and Haryana (2.62) recorded Average Annual Percentage Point change above the all-India rural average, in percentage points per year between 2019-20 and 2025.
    2. The middle band sat below the average: Madhya Pradesh (2.42), Tamil Nadu (2.06), Keralam (1.96), Punjab (1.80), Jharkhand (1.71), Chhattisgarh (1.48) and Andhra Pradesh (1.36) recorded change below the national rural average.
    3. The slowest group still improved: Karnataka (1.20), Uttarakhand (1.18), Maharashtra (0.58), Telangana (0.48) and Goa (0.30) registered the smallest positive annual changes.
    4. All five southern States sat below the rural average: Tamil Nadu, Keralam, Andhra Pradesh, Karnataka and Telangana all recorded change below the all-India rural figure, alongside Madhya Pradesh, Punjab, Jharkhand, Chhattisgarh, Uttarakhand, Maharashtra, Goa and Himachal Pradesh.
    5. One State went backwards: Himachal Pradesh recorded a marginally negative change of -0.02 percentage points a year, which is notable because nearly 90 per cent of its population resides in rural areas.

    Which States improved fastest in urban areas?

    1. Two States cleared two percentage points a year: Rajasthan (2.30) and Gujarat (2.26) recorded particularly sturdy improvements in urban female participation.
    2. Seven more beat the urban average: Uttarakhand (1.88), Keralam (1.76), Chhattisgarh (1.22), Karnataka (1.20), Odisha (1.12), Bihar (1.10) and Andhra Pradesh (0.94) recorded change above the all-India urban average.
    3. The remainder fell below it: Tamil Nadu (0.76), Telangana (0.66), Jharkhand (0.64), Punjab (0.60), Uttar Pradesh (0.54), West Bengal (0.48) and Maharashtra (0.36) recorded change below the national urban average.
    4. Strong urban gains occurred despite a slower overall pace: Several States recorded relatively strong gains even though the overall pace of improvement in urban areas was considerably lower than in rural areas.
    5. The urban leaders are not the rural leaders: West Bengal and Uttar Pradesh led the rural table and sat near the bottom of the urban one, so a State’s rural performance does not predict its urban performance.

    Why is pace alone an incomplete measure?

    1. It measures speed, not level: The Average Annual Percentage Point change captures only the pace of change and does not consider the level of female labour force participation from which a State started.
    2. A low pace can sit on a high level: A State with a lower annual change may already have a relatively high participation rate, so a low figure is not automatically a poor outcome.
    3. The baseline has to be combined with the pace: Reading the 2019-20 rate for each State together with its annual change is what allows a State to be assessed properly.
    4. It is not a ranking device: The measure is used to indicate the pace of improvement and is not intended to rank States against one another.
    5. Himachal Pradesh shows why the pairing matters: Its marginally negative change is read against a rural population share of nearly 90 per cent, which places the figure in context rather than treating it as a simple last place.

    What does the rural baseline-pace map show?

    1. Low baseline with faster improvement: Bihar, Uttar Pradesh, West Bengal and Haryana started with relatively low female participation but recorded change above the all-India average, indicating a relatively faster pace of improvement.
    2. Low baseline with slower improvement: Goa and Punjab started from relatively low baseline levels and recorded change below the national average, indicating slower improvement despite having considerable scope to grow.
    3. High baseline with faster improvement: Odisha, Gujarat and Rajasthan started with relatively higher baseline rural participation and still recorded above average change, showing that faster improvement is not confined to States starting from a low base.
    4. High baseline with slower improvement: Madhya Pradesh, Jharkhand, Uttarakhand, Chhattisgarh, Maharashtra, Himachal Pradesh and the five southern States had relatively higher baseline levels but recorded change below the national average.

    What does the urban baseline-pace map show?

    1. Low baseline with faster improvement: Rajasthan, Gujarat, Uttarakhand and Bihar started from relatively low baseline levels and recorded change above the all-India average.
    2. Low baseline with slower improvement: Uttar Pradesh, Jharkhand, Haryana and Punjab also started from relatively low levels but recorded below average change, indicating slower improvement.
    3. High baseline with faster improvement: Keralam, Karnataka, Chhattisgarh, Odisha and Andhra Pradesh already had relatively higher urban participation and continued to make relatively rapid gains.
    4. High baseline with slower improvement: Tamil Nadu, Telangana, West Bengal, Maharashtra, Madhya Pradesh, Himachal Pradesh and Goa recorded slower improvement despite their relatively higher starting levels.

    Challenges to raising the Female Labour Force Participation Rate

    1. The rise is concentrated in low productivity work: Most of the increase sits in self-employment, home based work and unpaid family labour, which raises participation without raising earnings. Eg. Over 64 per cent of working women are self-employed and nearly 64 per cent of working women are in agriculture. Fix. Link Self Help Group producers to the Open Network for Digital Commerce so household enterprise output reaches priced markets rather than local thrift.
    2. Unpaid care work caps available hours: Domestic and caregiving responsibility absorbs the working day before paid work is considered, which pushes women toward part time and proximate options. Eg. Women spend 363 minutes daily on unpaid work against 123 minutes for men. Fix. Raise care economy investment toward 2 per cent of Gross Domestic Product, which is estimated to create around 11 million jobs held largely by women.
    3. Mobility constraints narrow the job set: Unsafe transport and inadequate childcare restrict how far a woman can travel for work, so employers outside walking distance are effectively unavailable. Eg. Preference for nearby work pushes rural women into home based employment even where factory jobs exist in the district. Fix. Fund working women’s hostels and last mile transport on the Tamil Nadu Thozhi hostel model in industrial districts.
    4. Formal sector entry stays narrow: Manufacturing and much of services remain male dominated, so women who enter the labour force do not enter the formal payroll. Eg. Women are 43 per cent of Science, Technology, Engineering and Mathematics graduates but only 14 per cent of the corresponding workforce. Fix. Attach a minimum female workforce ratio as a qualifying condition for Production Linked Incentive disbursal.
    5. Hiring costs are loaded onto the employer: Statutory maternity cost sits entirely with the firm, which discourages some employers from hiring women of working age. Eg. The 26 week paid maternity leave entitlement, though progressive, can discourage some firms from hiring women. Fix. Move maternity benefit funding to a shared employer and social insurance pool rather than a single employer liability.
    6. Pay gaps blunt the incentive to stay: Women earn less than men for comparable work, which lowers the return on staying in the labour force after a break. Eg. India ranked 131st of 148 countries in the Global Gender Gap Report 2025. Fix. Enforce the equal remuneration provisions of the Code on Wages, 2019 through mandatory gender disaggregated pay reporting above a firm size threshold.

    Conclusion

    Female labour force participation has risen substantially since 2019-20, but the gain is rural rather than national, and the rural-urban gap has widened rather than narrowed. The State picture cannot be read off the pace of change alone: Bihar, Uttar Pradesh, West Bengal and Haryana are improving fast from a low rural base, while the five southern States are improving slowly from a high one, and both readings are correct. The unresolved question is composition, since a rise driven by self-employment and unpaid family work raises the participation rate without raising women’s earnings. Whether the trend converts into better outcomes depends on the movement of women into paid, formal and urban employment, which is exactly where the data shows the least progress.

    Back2Basics: Periodic Labour Force Survey

    1. Conducting body: The Periodic Labour Force Survey is conducted by the National Statistical Office under the Ministry of Statistics and Programme Implementation.
    2. When it began: It was launched in 2017, replacing the earlier quinquennial employment and unemployment surveys of the National Sample Survey Office.
    3. What it reports: It gives quarterly estimates for urban areas and annual estimates covering both rural and urban areas, and has moved to monthly release of key indicators.
    4. How it measures: It reports labour force indicators on both the usual status, based on activity over the preceding year, and the current weekly status, based on activity in the preceding seven days.

    “[2025, GS2, 10 marks] Women’s social capital complements in advancing empowerment and gender equity. Explain.”

  • Small transporters hit by compliance burden

    Why in the News

    The road transport industry, which carries nearly 70 per cent of India’s domestic freight, has been described as facing one of the most difficult periods in its history. Operating costs for commercial vehicles have risen sharply over the last few years. Freight rates have stayed largely stagnant over the same period. Vehicle location tracking devices, originally conceived for passenger safety and emergency response, have since been mandated for goods vehicles as well. Faults in integrating those devices with the VAHAN portal have left commercial vehicles stranded for weeks and in some cases months. The contest is between technology driven governance, which promises transparency and enforcement quality, and its implementation cost, which falls hardest on the small operators who have no margin left to absorb it.

    What is a Vehicle Location Tracking Device (VLTD)?

    1. Function: A Vehicle Location Tracking Device (VLTD) is an onboard unit that continuously transmits a vehicle’s position to a State level control centre over a mobile network. It carries emergency buttons that raise an alert to that centre.
    2. Original purpose: The device was conceived for passenger safety and emergency response, so that a distress signal from a bus or a cab could be located and acted on.
    3. Registration linkage: A fitted device must be registered against the vehicle on the VAHAN portal, the Ministry of Road Transport and Highways database that holds every vehicle’s registration record. A vehicle whose device does not map correctly to that record cannot complete its compliance formalities.

    Why has the road freight business turned financially unsustainable?

    1. Costs and earnings have moved apart: The gap between operational expenses and earnings has widened steadily. Freight rates have not tracked the rise in the cost of running a truck.
    2. Fuel dominates the cost sheet: Diesel alone accounts for nearly 60 per cent of a truck’s operating cost. Every rise in the pump price passes almost directly into the operator’s monthly outgo.
    3. Emission compliance added a new input: Operators have had to absorb the cost of AdBlue, the urea solution injected into the exhaust of Bharat Stage VI (BS-VI) vehicles to cut nitrogen oxide emissions. This is a recurring consumable that did not exist in the earlier cost structure.
    4. Every other input has escalated: Tyre prices, insurance premiums, spare parts, engine oil, lubricants, maintenance expenses, finance costs and statutory compliance charges have all risen together. Toll charges continue to rise alongside them.
    5. Margins have gone below cost for some: Many transporters operate on wafer thin margins simply to retain business. Some are running below their actual cost of operations.

    What has the compliance and enforcement layer added?

    1. Documentation load has grown: The burden of documentation, permits, fitness requirements and other regulatory compliances has increased substantially. Each of these carries its own fee, its own renewal cycle and its own downtime.
    2. Electronic challans have drawn allegations of misuse: The electronic challan was introduced to minimise human intervention and improve road safety. A growing number of transporters allege misuse of the system, producing avoidable penalties and harassment.
    3. Tracking devices were extended without a stated case: The VLTD mandate was extended to goods vehicles in the absence of clear operational necessity. A device designed around passenger distress response was applied to freight movement, adding a financial burden with no matching benefit to the operator.
    4. Integration failure converts compliance into downtime: Technical problems in integrating VLTD units with the VAHAN portal have left many commercial vehicles off the road for weeks and in some cases months.
    5. Downtime compounds financially: Each day a truck stays off the road means lost income, continuing loan repayment pressure and severe financial distress for the operator. The loan instalment does not pause because the portal did not accept the device.

    Does technology driven governance deliver transparency or only new hardship?

    1. The intent is not in dispute: Technology driven governance is welcome where it promotes transparency and efficiency. Both the electronic challan and the tracking mandate were framed in exactly those terms.
    2. Implementation is where the cost lands: A mandate is issued centrally and instantly, while its back end integration is completed unevenly across States and vendors. The operator carries the difference as idle capital.
    3. Enforcement quality decides the outcome: Enforcement must remain transparent, accountable and fair, so that genuine operators are not penalised alongside violators. An automated penalty with no accessible appeal converts a safety tool into a revenue tool.
    4. The burden is uniform, the capacity to bear it is not: A compliance charge set as a flat per vehicle amount is trivial for a large fleet and material for a single truck owner. The same rule therefore produces very different pressure across the sector.
    5. Digital mandates need a working failure route: No route exists for an operator whose device is fitted and paid for but not accepted by the database. The vehicle is treated as non compliant even where the failure is on the system side.

    Why are small operators and self-driving truck owners hit hardest?

    1. They absorb every shock directly: Small transport operators and self-driving truck owners are affected the most by these developments. They have no fleet across which to spread a stranded vehicle or a disputed penalty.
    2. The sector is structurally fragmented: Most road freight capacity sits with small, unorganised firms and single truck owners rather than large corporate fleets. Fragmentation leaves no bargaining power against shippers on freight rates.
    3. Finance costs bite first: Vehicle loans are serviced monthly regardless of utilisation. An operator with one or two trucks moves into default faster than a fleet operator with the same days of downtime.
    4. Highway amenities have not followed toll payments: Despite paying substantial toll charges, drivers continue to face a shortage of secure truck parking zones, clean toilets, rest areas and other basic highway amenities.
    5. Tolls are a rising fixed charge: Toll charges require rationalisation, since they now form a large and rising share of the per trip cost on tolled corridors. A rate that is not linked to service delivered is a pure cost addition.

    Challenges to the road freight compliance regime

    1. Freight rates are not cost linked: No mechanism ties freight rates to the actual cost of operating a truck, so input inflation is absorbed rather than passed on. Eg. The rise in diesel, tyre and insurance costs over recent years has not produced a matching rise in contracted freight rates. Fix. Base freight rates on scientific cost calculations that reflect actual operating expenses and are revised on a stated cycle.
    2. Device mandates run ahead of system readiness: A device is made compulsory before the registration database can reliably record it, so compliant operators are penalised for a back end fault. Eg. VLTD to VAHAN integration failures have kept commercial vehicles off the road for weeks and months. Fix. Tie the commencement of any device mandate to a certified integration test, and grant an automatic provisional clearance where the portal fails to accept a fitted device.
    3. Automated enforcement lacks a low cost appeal route: An electronic penalty is issued instantly while contesting it requires time and travel that a single truck owner cannot spare. Eg. Transporters allege misuse of the electronic challan system producing avoidable penalties. Fix. Provide a time bound online adjudication route with photographic evidence disclosure at the point of the challan.
    4. Compliance costs are not scaled to fleet size: Fees, permits and fitness requirements are set per vehicle, so the smallest operator carries the highest cost per rupee of turnover. Eg. Statutory compliance charges have escalated alongside tyre, insurance and finance costs for operators running one or two trucks. Fix. Introduce a graded fee structure and a single consolidated annual compliance filing for operators below a stated fleet threshold.
    5. Toll collection is not linked to service: Toll rates rise on schedule while wayside amenities on the same corridors remain absent. Eg. Drivers on tolled highways face a shortage of secure parking zones, clean toilets and rest areas. Fix. Make a stated wayside amenity standard a condition of toll revision on each stretch, audited before the next revision is notified.
    6. Overloading and safety enforcement fall on the driver, not the shipper: Penalties for overloading attach to the vehicle and the driver, leaving the consignor who loaded it untouched. Eg. Overloaded highways suffer rapid wear and tear while enforcement action is recorded against the transporter. Fix. Extend statutory liability for overloading to the consignor and the loading point operator.

    Conclusion

    The compliance burden on road freight has grown faster than the sector’s ability to pay for it, and the cost has settled on small operators and self-driving truck owners rather than on large fleets. The immediate cause is not the principle of technology driven governance but its implementation, where a mandate takes effect before the system that records it works. A comprehensive review of the road transport ecosystem is the stated demand, resting on three things: freight rates built on scientific cost calculations, rationalised tolls, and a relook at the compliance load. None of the three has been taken up.

    “[2014, GS3, 12 marks] National Urban Transport Policy emphasises on ‘moving people’ instead of ‘moving vehicles. Discuss critically the success of the various strategies of the Government in this regard.”

  • Chipflation: Electronics see years of price hikes replicated in 6 mths

    Why in the News

    Consumer Price Index (CPI) data from the Ministry of Statistics and Programme Implementation (MoSPI) shows prices of a range of consumer electronics goods in July 2026 up 3 to 5 per cent against January 2026. The global artificial intelligence (AI) investment boom has created an acute shortage of the memory chips used in the manufacture of everyday consumer electronics. Manufacturers have raised the rates they charge to the point where price increases that took years for products such as smartphones and televisions have occurred in just six months of 2026. The movement in 2025 was far more sedate over the identical January to July window. The shortage runs in the opposite direction to the decades-long decline in memory chip prices that made consumer electronics steadily cheaper.

    What is chipflation?

    1. The term and its origin: Analysts at the American investment bank Morgan Stanley coined the term in June 2026. It describes how AI’s appetite for memory chips is boosting the cost of everything from data centres to smartphones, with consequences that may reach far beyond the technology industry.
    2. The chip at the centre of it: DRAM, or Dynamic Random Access Memory, is the working memory used in refrigerators, washing machines, air conditioners, smartphones, laptops, televisions and earphones. It is being displaced in fabrication capacity by the more advanced chips data centres demand.
    3. How a chip shortage becomes a retail price: Manufacturers facing a supply shortage of an essential component raise the rates they charge. Those increases pass into the retail price indices that MoSPI compiles.

    How much have Indian consumer electronics prices actually moved?

    1. The headline movement: Prices of a variety of consumer electronics goods in July 2026 were up 3 to 5 per cent against January 2026. The comparable movement over January to July 2025 was far smaller.
    2. Mobile handsets: The CPI price index for mobile handsets rose 4 per cent from January 2026 to July 2026. Over the same months of 2025 it declined by 0.7 per cent.
    3. Air conditioners: Air conditioner prices rose 4.8 per cent between January and July 2026 against 1.1 per cent over the same period of 2025. Air conditioners normally do see higher prices in the summer months.
    4. Televisions and the four-and-a-half year comparison: The CPI index of televisions is up 3.5 per cent since January 2026. Counting back from December 2025, matching that magnitude of increase took 54 months.
    5. The same comparison across five more categories: The number of months needed to match the 2026 increase was 46 for air conditioners, 45 for refrigerators and 41 for mobile phones. It was 32 for washing machines and 31 for computers and laptops.
    6. The series break behind the comparison: Increases over 2026 are calculated on the new CPI series with 2024 as the base year, and the earlier period on the old series with 2012 as the base year. Only consumer electronic items present in both baskets have been compared.

    Why has an AI investment boom raised the price of a refrigerator?

    1. Capacity has been redirected: Key chipmakers including TSMC, Samsung and SK Hynix are making the more in-demand advanced chips used in data centres. Those data centres are being built across the world at speed.
    2. What is being sacrificed: DRAM and other chips used in everyday electronics goods are what that redirection displaces. The result is a supply shortage of the chips essential to consumer electronics.
    3. Capacity cannot be added quickly: New memory capacity takes years to build, qualify and ramp up. Supply relief is a process rather than a switch, in the assessment of the Head of Morgan Stanley’s Europe and Asia Technology Team.
    4. A two-tier market has formed: Large AI and cloud buyers can sign long-term agreements, prepay and secure priority access to output. Traditional buyers, including personal computer makers, smartphone makers and industrial hardware companies, must compete for what remains.
    5. The scale of the projected shortfall: The shortfall in memory chips in 2027 is equivalent to what is needed to make 134 million phones. That estimate comes from the same Morgan Stanley technology team.

    Why is this a reversal rather than an ordinary price cycle?

    1. The historical direction of travel: DRAM prices fell 90 per cent every five years over the second half of the twentieth century and the first twenty or so years of the twenty-first. Falling component costs are what made each generation of consumer electronics cheaper than the last.
    2. What drove that decline: The fall was driven by Moore’s Law, the observation that the number of transistors on a chip doubles at regular intervals, so cost per unit of computing capacity falls steadily. Manufacturing scale converted that into lower prices for finished goods.
    3. The size of the reversal: DRAM prices will have risen more than 400 per cent from the start of 2024 to the end of 2026, on the estimate of JPMorgan Global Research. That is a price path with no precedent in the preceding five decades.
    4. Why the reversal is structural rather than seasonal: The demand shifting capacity is investment in AI data centre buildout, not a cyclical swing in consumer demand. It persists for as long as that buildout continues.

    What has the price rise done to demand?

    1. Global shipments have fallen: Global smartphone exports were down 11 per cent in the April to June quarter of 2026. That is their second-lowest level since 2013, on Counterpoint Research data.
    2. Indian sales have turned: Smartphone sales in India fell for three weeks in a row after the online promotional events of July 2026. The fall followed rather than preceded the promotional window.
    3. Consumers have become promotion-dependent: Rising device prices are making consumers increasingly value-conscious and more dependent on promotional offers, in the assessment of a Senior Analyst at Counterpoint Research. That trend has become more visible over the past few months.
    4. The pass-through is not optional for buyers: Memory is a non-substitutable component in every one of the affected categories. A household deferring a purchase is the only demand-side response available.

    Challenges to containing chipflation in India

    1. Import dependence in memory: India assembles consumer electronics without domestic fabrication capacity in memory chips, so the input price is set entirely offshore. Eg. Domestic smartphone assemblers competing for residual DRAM supply have no alternative source. Fix. Sequence the Semicon India Programme toward a memory fabrication line rather than only packaging and testing units.
    2. The measurement gap in a series break: Comparing 2026 movements against earlier years requires bridging two CPI series with different base years and baskets. Eg. Only items present in both the 2012-base and 2024-base baskets could be compared for this exercise. Fix. Publish an official back-cast series on the 2024 base so long-run comparisons do not depend on ad hoc bridging.
    3. Imported inflation escapes domestic policy tools: Interest rate changes cannot address a price rise originating in a global component shortage. Eg. Core inflation excluding food and energy is the segment monetary policy influences, and this shock sits inside it. Fix. Use tariff and input duty rationalisation on electronic components as the responsive instrument in place of rate action.
    4. Concentration among a handful of suppliers: A small group of firms controls advanced memory output, which gives buyers no bargaining position. Eg. TSMC, Samsung and SK Hynix set the allocation between data centre chips and consumer memory. Fix. Build long-term supply agreements through government-to-government channels, as the four-day commerce ministry delegation to Japan on semiconductors is designed to do.
    5. Downstream employment exposure: Falling handset volumes hit assembly and retail employment before they hit manufacturer margins. Eg. Three consecutive weeks of falling Indian smartphone sales followed the July promotional events. Fix. Link production-linked incentive disbursement to sustained volume rather than to value alone, so assemblers are not penalised for a component price shock.

    Conclusion

    An investment boom in one segment of the chip industry has reset the price of an input that every consumer electronics category depends on, and Indian retail price data has registered the effect within six months. Increases that historically took between 31 and 54 months have occurred since January 2026 across six product categories. Capacity for memory chips takes years to build and qualify, so the shortage does not resolve on a policy timetable. Demand has already turned in both global shipments and Indian sales, and the next test is whether volumes recover once the 2027 shortfall estimate is either met or confirmed.

    “[2021] With reference to the Indian economy, demand-pull inflation can be caused or increased by which of the following:

    1.Expansionary policies

    2.Fiscal stimulus

    3.Inflation-indexing of wages

    4.Higher purchasing power

    5.Rising interest rates

    Select the correct answer using the code given below:

    (a) 1, 2, and 4 only

    (b) 3, 4, and 5 only

    (c) 1, 2, 3, and 5 only

    (d) 1, 2, 3, 4, and 5

  • Measuring manufacturing growth afresh: Three questions

    Why in the News

    The new Gross Domestic Product (GDP) series of the Ministry of Statistics and Programme Implementation (MoSPI) shows the manufacturing Gross Value Added (GVA) deflator recording negative growth for nine consecutive quarters between 2023 and 2025. The same series places the level of real manufacturing GVA in 2025-26 at no less than 15 percentage points above the Index of Industrial Production (IIP) for manufacturing. When the new series was announced, the Chief Economic Advisor and the Secretary, MoSPI stated that the estimates rested on a new methodology. That methodology was said to have solved the measurement problems that had bedevilled the old series, including in manufacturing. MoSPI has not yet released the detailed standard document explaining the new calculations. Three specific anomalies in the manufacturing numbers therefore cannot be tested against the stated method, and the plausibility of the series has to be assessed from the numbers themselves.

    What is the manufacturing Gross Value Added deflator?

    1. Gross Value Added, defined: GVA for a sector is the value of its output minus the value of its intermediate inputs. It measures what producers in that sector actually added, before taxes on products are added and subsidies subtracted.
    2. What the deflator does: The sector deflator is the price index that converts nominal GVA at current prices into real GVA at base year prices. Real GVA equals nominal GVA divided by that deflator.
    3. What its movement signals: A deflator growing negatively means the sector’s own price level is falling. Real growth then runs ahead of nominal growth by the size of that fall.

    Why does confidence in manufacturing data matter now?

    1. The China Squeeze: The Chinese manufacturing export machine has again moved across world markets and threatens lower-skill manufacturing in poorer countries. The pressure this creates on Indian producers is what the data is being asked to measure.
    2. Two decades of stated ambition: The Union government set major ambitions for the sector, beginning with the flagship Make in India programme in 2014. The production-linked incentive (PLI) scheme followed several years later.
    3. The PLI’s dual purpose: The scheme was in part a response to the opportunities opened by the China-plus-one shift in global sourcing. It was also a response to the challenge of aggressive Chinese competition.
    4. Conflicting signals elsewhere: The wider economy is sending contradictory signals at present. Understanding manufacturing performance is the route to lifting some of that confusion.
    5. A recognised prior problem: Problems in manufacturing sector data under the previous series were widely recognised. MoSPI made strenuous efforts to address them in the new series.

    Why has the manufacturing deflator shown falling prices for nine straight quarters?

    1. The anomaly itself: The manufacturing GVA deflator records negative growth, meaning falling price levels, for nine consecutive quarters between 2023 and 2025. No comparable stretch of deflation appears anywhere else in the price data for that period.
    2. The core inflation test: The core Consumer Price Index (CPI), which excludes food and energy-related products, shows no sign of deflation across those quarters. Core CPI through December 2025 rests on the 2011-12 series and the March 2026 reading on the 2024 series.
    3. The wholesale price defence, and its limit: The wholesale price index (WPI) was negative for some of this period. It was not negative for nine consecutive quarters.
    4. Why WPI is the wrong benchmark anyway: The GVA deflator should not move in line with the WPI. The WPI is overly driven by input prices, and a value added deflator must reflect output prices net of inputs.

    Why is real GVA growth almost twice IIP growth?

    1. The size of the gap: In 2025-26 the level of real manufacturing GVA exceeded the IIP by no less than 15 percentage points. Both series are measured on the 2022-23 base.
    2. The growth gap it implies: Annual average real growth of manufacturing between 2022-23 and 2025-26 measured by GVA is about twice that measured by the IIP. The two figures are about 11 per cent against about 6 per cent.
    3. The informal sector explanation, and why it fails: Real GVA includes the informal sector and the IIP excludes it, so faster informal growth could in principle open a gap. For the most recent two years informal sector performance has been proxied by formal sector data, which makes the explanation mechanically impossible.
    4. The volumes versus value added explanation: The IIP measures output volumes rather than value added. A widely held perception holds that real GVA can grow faster than real output when input prices fall.
    5. Why that perception is wrong: Real GVA is calculated at constant prices, not at changing prices, so falling input prices cannot lift it. Real value added can grow faster than output volumes only where productivity improves, that is where firms become more efficient in using intermediate inputs.

    Why has the link between the two series broken down?

    1. The pre-2011 benchmark: Before the 2011-12 methodology changes, GVA and IIP moved closely together. The correlation between their growth rates over June 2005 to that break was 0.8.
    2. The post-2011 divergence: The two series diverged after the 2011-12 methodology changes. That divergence has been exacerbated in the new series rather than corrected by it.
    3. The recent segment: Since September 2022 the two series move very differently. The comparison excludes the Covid quarters from June 2020 to March 2022.
    4. The character of the difference: The real GVA series bounces around a great deal across quarters. The IIP series over the same stretch is fairly stable.

    What do the three questions together say about the new series?

    1. None is individually decisive: No one of the three issues is dispositive about the quality of the new series. Each is an unexplained pattern rather than a demonstrated error.
    2. The missing document is the binding constraint: The detailed standard document explaining the new calculations has not been released. Independent researchers therefore cannot check the anomalies against the method that produced them.
    3. The methodology claim raises the bar, it does not lower it: The new series was presented as the fix for exactly the manufacturing measurement problems of the old series. Anomalies concentrated in manufacturing are the hardest place for that claim to sit unexplained.
    4. What plausible explanations would buy: Explanations would engender confidence in the new GDP figures. They would also allow an assessment of the state of Indian manufacturing and of the impact of recent government actions to revive it.

    Challenges to the new GDP series’ manufacturing estimates

    1. Deflator choice drives the real number: Real GDP requires choosing a deflator, and the production side deflator is heavily influenced by the WPI. Eg. In FY23 a global commodity price surge pushed the WPI into double digits, and the high deflator suppressed measured real growth. Fix. Complete the WPI base revision so the deflator basket reflects the current price structure.
    2. No producer price index exists: India deflates goods sectors with a wholesale index built for trade flows rather than for producer output. Eg. Services sectors are deflated using CPI components because no dedicated producer price series covers them. Fix. Introduce a Producer Price Index on the model used across advanced statistical systems and retire WPI-based deflation.
    3. Transparency lags the release: The estimates reach the public well before the sources and methods behind them. Eg. The new series arrived with a stated methodology claim and without the standard explanatory document. Fix. Publish the sources and methods volume alongside the series so verification is concurrent with release.
    4. Informal output is still partly extrapolated: Informal sector performance for recent years is proxied from formal sector data, which cannot capture divergence between the two. Eg. The old series extrapolated large-company filings to the whole informal economy and stayed blind to the sharper hit small firms took after demonetisation. Fix. Shorten the lag on the Annual Survey of Unincorporated Sector Enterprises so proxying is not required for two full years.
    5. Statistical independence has been questioned: Resignations from the National Statistical Commission and withheld survey results have raised concerns about the autonomy of official statistics. Eg. Two members of the Commission resigned in 2019 over the handling of employment data. Fix. Constitute an independent statistical commission with a statutory mandate, as recommended by the Rangarajan Commission in 2001.

    Conclusion

    The new GDP series was presented as the answer to the manufacturing measurement problems of the old one, and its manufacturing numbers now carry three patterns that the stated methodology does not obviously produce. A deflator falling for nine quarters, a 15 percentage point level gap against the IIP and a correlation that has weakened since 2005-2012 are each testable claims that cannot be tested without the sources and methods document. Releasing that document is the precondition for confidence in the figures. Whether and how Indian manufacturing has stood up to Chinese competition is a question only reliable data can answer.

    “[2021, GS3, 10 marks] Explain the difference between computing methodology of India’s Gross Domestic Product(GDP) before the year 2015 and after the year 2015.”

  • Investment question has a political answer

    Why in the News

    Private corporate investment in India remains considerably lower than the peak seen in the mid 2000s, even as large corporates hold substantial cash. Firms are deploying funds in financial assets rather than building physical assets such as factories, and are taking money out of the country rather than investing it here. The standard explanations offered for this are subdued domestic demand and global uncertainty. A political economy explanation is now advanced instead, locating the cause in how political power structures affect investment decisions. Centralisation of political power has been unmistakable after 2014, accompanied by fiscal centralisation and a reconfiguration of federal structures. The contested claim is that market concentration around a handful of “national champions” is not an accident of policy but is politically useful, which would make an investment revival costly to the current political settlement.

    What are “national champions”?

    1. Definition: A national champion is a large domestic business group that a government treats as the preferred vehicle for building strategic capacity, and that is favoured in policy design as a result.
    2. How the status is conferred: Preference operates through the terms of auctions, tariffs, incentive eligibility, clearances and access to public contracts rather than through an announced designation.
    3. The economic consequence: A handful of such groups now command far greater sway over the economy than before, which raises the entry barrier facing any firm attempting to compete with them.

    What does the investment slowdown actually look like?

    1. Cash-rich firms are not building: Large corporates hold funds but are not committing them to new capacity in India.
    2. Capital is leaving: Companies are taking money out of the country rather than investing it domestically.
    3. Investment is below its own peak: Private corporate investment remains considerably lower than the level reached in the mid 2000s.
    4. Financial assets over physical assets: Corporate India is more keen to deploy funds in financial assets than to use them for factories and plant.
    5. The standard explanations are incomplete: Subdued domestic demand and global uncertainty have been put forward, and neither accounts for why firms with the means to invest choose not to.

    Why does the concentration of political and market power deter private investment?

    1. Political and fiscal centralisation: Centralisation of political power after 2014 has been accompanied by greater fiscal centralisation and a reconfiguration of federal structures, including attempts to restrict the powers of states and, as a consequence, of regional parties. Eg. The Mines and Minerals (Development and Regulation) Amendment Act, 2026, amending the 1957 law under which the State owns the mineral and signs the lease while the Centre sets the rules and the royalty rate.
    2. Market concentration has moved in step: The rise of a handful of large companies, aided by policy, has given them far greater sway over the economy than ever before.
    3. One, patronage for smaller firms has dried up: The concentration of political power and the decline in the relative power of regional parties has ended the patronage and protection that were afforded to smaller and regional firms, who could rise up and become national players.
    4. Two, policy uncertainty and an uneven playing field: Higher barriers to entry and terms tilted towards larger corporates make it harder for new players to emerge, and firms will not invest if they fear the rules of the game can be arbitrarily changed or that they can be caught on the wrong side of policies. Policy credibility is what is at stake.
    5. Three, the fear of being muscled out: Investors fear that business success will be met by a hostile takeover by a national champion, so the question is not whether they are allowed to operate but whether they can stay in business and remain competitive over the next 10 to 20 years.

    Why would dispersing economic power be politically costly?

    1. Competition requires a rethink of the strategy: For the larger corporate sector to ramp up investment and for competition to emerge, the strategy of relying on a few national champions needs to be reconsidered.
    2. Dispersed economic power funds political opposition: A larger number of big private players would disperse rather than concentrate economic power, which would in turn increase the funding avenues available to Opposition parties.
    3. Economic competition feeds political competition: Weakening the concentration of economic power would possibly weaken the concentration of political power, so greater economic competition could lead to greater political competition.
    4. The two open questions: It is unsettled whether the current political structure creates the space for new players to safely invest and emerge as competitors to the national champions, or whether market concentration is itself politically useful.

    Why do the ingredients of an investment boom not produce one?

    1. The macroeconomic conditions are present: An undervalued exchange rate, depressed real wages and sustained public sector investment in infrastructure are all in place, alongside the demographic dividend.
    2. The same mix powered East Asia: This combination powered the rise of countries such as China and South Korea, where firms responded to it with large capacity additions.
    3. India’s firms are not responding: Firms are likely to remain hesitant and unsure about investing without a change in the approach, despite those conditions.
    4. Confidence, not capability, is binding: Investment decisions are taken only when investors think they have a fair chance of benefiting from them.
    5. The end state if nothing changes: The consequent absence of competition raises the possibility of an uncompetitive, high-cost economy.

    Challenges to the national champions strategy

    1. Concentration raises consumer and input costs: Dominant firms in a sector face little pressure to hold prices down, which raises costs for every downstream user. Eg. Telecom tariffs rose sharply after the sector consolidated into three private operators. Fix. Use the deal value threshold introduced by the Competition (Amendment) Act, 2023 to review acquisitions that current turnover tests miss.
    2. Policy-created advantage is hard to withdraw: Once a group builds capacity on the strength of an incentive, removing the incentive becomes a shock the government is reluctant to deliver. Eg. Most approved incentive under the Production Linked Incentive scheme for large-scale electronics manufacturing has flowed to a small group of mobile phone assemblers. Fix. Publish sunset dates and firm-level disbursement data with each incentive scheme so withdrawal is scheduled rather than negotiated.
    3. Concentrated bank exposure transmits firm risk to the system: Lending concentrated in a few large groups converts a single group’s distress into a banking problem. Eg. The corporate loan losses that produced the non-performing asset build-up of the 2010s were concentrated in a handful of infrastructure and metals groups. Fix. Enforce large exposure limits at group rather than borrower level and publish group-wise banking exposure.
    4. Bidding rules can favour incumbents: Net worth, prior experience and bank guarantee conditions in auctions and tenders can exclude new entrants before price is considered. Eg. Critical mineral block auctions have repeatedly failed for want of qualified bidders. Fix. Set qualification thresholds proportionate to block or contract size and allow consortium bidding for first-time entrants.
    5. Competition enforcement is slow relative to market speed: Investigations concluded years after conduct occurs cannot restore a market that has already tipped. Eg. Appeals against Competition Commission of India orders routinely run for several years before finality. Fix. Fund a dedicated appellate bench for competition matters with statutory disposal timelines.

    Conclusion

    The reluctance of cash-rich Indian firms to invest is being read as a political economy problem rather than a demand or global uncertainty problem. Concentrated political power, an uneven playing field and the fear of being displaced by a national champion together deny new entrants confidence in a 10 to 20 year horizon. Reversing that requires dispersing economic power, which carries political costs the current settlement has no incentive to accept. What remains unresolved is whether market concentration will be treated as a cost to growth or retained as a political asset.

    Industrial Policy and Private Investment in India

    1. What industrial policy does: It is the set of state interventions that shape which industries expand, through licensing, tariffs, incentives, public investment and ownership rules.
    2. The arc since Independence: The Industrial Policy Resolutions of 1948 and 1956 built a mixed economy with reserved public sector schedules, the licensing regime of the 1960s and 1970s restricted private entry, and the New Industrial Policy of 1991 abolished licensing for most sectors.
    3. India’s scale: Manufacturing contributes around 17 per cent of Gross Domestic Product against a 25 per cent target, and India accounts for about 2.8 per cent of global manufacturing output against China’s roughly 29 per cent.
    4. The current gap: Weak domestic private capital formation persists even as foreign investment rises, with cumulative Foreign Direct Investment crossing about $1.14 trillion between April 2000 and December 2025.

    Laws Governing Industry and Competition in India

    1. Industries (Development and Regulation) Act, 1951: The parent law for central regulation of scheduled industries, and the statutory basis of the industrial licensing regime.
    2. Monopolies and Restrictive Trade Practices Act, 1969: Regulated large business houses through asset thresholds to prevent economic concentration, and was repealed after those thresholds were removed post-1991.
    3. Competition Act, 2002: Replaced the 1969 Act, prohibits anti-competitive agreements and abuse of dominance, and establishes the Competition Commission of India to regulate combinations.
    4. Competition (Amendment) Act, 2023: Introduces a deal value threshold for merger review, a settlement and commitment framework, and shorter approval timelines.

    Government Initiatives for Industry and Investment

    1. Make in India (2014): Aims to raise manufacturing’s share of Gross Domestic Product towards 25 per cent, largely through ease of doing business measures.
    2. Production Linked Incentive scheme (2020): Covers 14 sunrise and strategic sectors with outcome-linked financial incentives paid on incremental output.
    3. National Manufacturing Mission: Announced in the 2025-26 Budget, targeting a 25 per cent Gross Domestic Product share and 143 million jobs by 2035, with a focus on solar photovoltaics, electric vehicle batteries, green hydrogen and wind.
    4. National Single Window System: Consolidates central and state clearances into a single application interface for investors.
    5. Invest India: The dedicated investment facilitation agency created after the Foreign Investment Promotion Board was abolished in 2017.

    Challenges in Industrial Policy and Private Investment

    1. Logistics and infrastructure costs: Power, transport and cluster gaps raise the operating cost of a new plant and lengthen its payback period. Eg. Logistics costs remain close to 8 per cent of Gross Domestic Product. Fix. Front-load the National Infrastructure Pipeline in states with the weakest evacuation and port connectivity.
    2. Land acquisition risk: Title complexity and local resistance delay projects long enough to destroy their business case. Eg. The POSCO steel project in Odisha was shelved after prolonged land disputes. Fix. Build titled and pre-cleared land banks with plug-and-play utilities before inviting investment.
    3. Tariff and trade shocks: External trade measures can remove an export market after capacity has been built for it. Eg. The 50 per cent United States tariff imposed in August 2025 hit roughly 55 per cent of India’s United States-bound exports. Fix. Diversify market access through trade agreements and deepen participation in global value chains.
    4. Workforce readiness for Industry 4.0: Adopting automation and artificial intelligence systems requires reskilling at a scale current training capacity cannot deliver. Eg. Only about 4.7 per cent of India’s workforce has formal skill training, against roughly 96 per cent in South Korea. Fix. Fund employer-led reskilling through the re-skilling fund created under the Industrial Relations Code, 2020.
    5. Import dependence in strategic inputs: Heavy reliance on imported electronics, semiconductors and pharmaceutical inputs exposes downstream manufacturers to supply shocks. Eg. Electronics assembly in India depends on imported display and chip components. Fix. Extend performance-linked incentives to component and materials manufacture rather than final assembly alone.

    Matching Previous Year Question

    “[2025, GS3, 15 marks] Discuss the rationale of the Production Linked Incentive (PLI) scheme. What are its achievements? In what way can the functioning and outcomes of the scheme be improved?”

  • What young want, and why creating good jobs is no longer optional

    Why in the News

    Almost 70 per cent of urban job seekers surveyed in Delhi said they were looking for a job that would place them on their ideal career path from the start, instead of settling for any job. The survey covered over 3,000 randomly sampled men and women, 24 years of age on average, living in middle-class residential areas of the capital, and was conducted in the summer of 2023. Their stated career goal was predominantly salaried or formal-sector employment. The Periodic Labour Force Survey (PLFS) for the same year records an urban labour market that cannot supply that goal, with less than 50 per cent of the urban workforce in salaried jobs. A follow-up experiment then exposed a random subset of the same job seekers to real-world job openings and salaries, and re-surveyed them a year later. Correcting their information lowered their expectations and left their aspirations untouched, so the contest is over who adjusts, the young or the labour market.

    What is the Periodic Labour Force Survey (PLFS)?

    1. Purpose: The PLFS is the official household survey that estimates how many people are working, seeking work or outside the labour force, and in what kind of work they are engaged.
    2. Nodal body: The National Sample Survey Office under the Ministry of Statistics and Programme Implementation conducts it and is the principal source of employment estimates in India.
    3. Activity status measures: Usual Status classifies a person by activity over the preceding 365 days, while Current Weekly Status treats a person as unemployed if they did not work even one hour in the reference week.

    What do young urban job seekers actually want from work?

    1. A career path, not a job: Almost 70 per cent said they wanted an opening that put them on their ideal career path from the start rather than any available job, and more men said this than women.
    2. Formal salaried work is the goal: The stated career goal was predominantly salaried or formal-sector employment rather than casual or own-account work.
    3. Women lean harder towards salaried jobs: More women job seekers aspired to salaried positions than men did.
    4. Only 14 per cent of women prefer self-employment: Just 14 per cent of the women interviewed said they would rather work for themselves.
    5. A third of men want to run enterprises: More than a third of the men wanted to start their own businesses.
    6. Public sector preference is a myth: A comparable share of these men and women were looking for private-sector salaried jobs, which cuts against the dominant narrative of a strong preference for government jobs.

    How far does the urban labour market fall short of those preferences?

    1. Salaried work is a minority outcome: Less than 50 per cent of India’s urban workforce holds a salaried job.
    2. It is scarcer still for the young: Merely one in every three employed 24-year-olds holds a salaried job, a lower share than for the workforce as a whole.
    3. Government jobs are a tenth of the market: No more than 10 per cent of the urban workforce is in the public sector or government jobs.
    4. The formal private sector is barely larger: Only about 15 per cent of the urban workforce is in the formal private sector.
    5. Self-employment is the largest single category: Of those working, 40 per cent are self-employed.
    6. Most self-employment is subsistence, not enterprise: An overwhelming majority of these businesses hire no worker at all and report an annual turnover of less than Rs 10 lakh, so the aspiration to build a firm meets a market of one-person shops.

    Why do salary expectations diverge from what these jobs actually pay?

    1. The occupations tested: Respondents were asked what they expected to earn as an accounts keeper, a primary school teacher, a data entry operator, a hospital attendant and an electrician, and each expectation was measured against actual PLFS earnings for the same occupation.
    2. Expectations run up to 40 per cent above reality: Job seekers expect up to 40 per cent higher salary than the earnings the PLFS records for the same work.
    3. Men are the more over-optimistic: Male job seekers expect almost Rs 8,000 more per month than the actual average earnings for these jobs.
    4. The gap widens for salaried work: For salaried jobs specifically, male job seekers expect Rs 8,500 more per month than actual earnings.
    5. The aggregate divergence exceeds 30 per cent: Taken together, salary expectations sit more than 30 per cent above reality, and the skew is sharper still among job seekers below 25 years of age, especially young men.
    6. Information and inexperience explain the gap: A lack of information or outright misinformation about openings and pay, combined with inexperience of the job market, are the two obvious sources of the misalignment.

    What did correcting job seekers’ information change, and what did it leave untouched?

    1. The design: A random subset of the 3,000 job seekers was informed about real-world job opportunities and salaries, and both the informed and the non-informed groups were re-surveyed twelve months later.
    2. Expectations fell: Accurate information significantly dampened labour-market expectations of landing the ideal job, relative to those who were not informed.
    3. Men disengaged first: Men in particular became less likely to report that they were on their ideal career path.
    4. Search effort fell with belief: That disillusionment was accompanied by a decline in men’s job-search intensity.
    5. The two exits from a failed search: As preferred job offers fail to materialise, job seekers adjust expectations downwards and either remain in the same jobs or leave the labour market and enrol at educational institutions.
    6. Aspirations did not move: The answer on whether aspirations changed is a clear no, since these men and women continued to aim for formal-sector jobs or dynamic entrepreneurship a year later, because aspirations are long-term goals and not easily malleable.
    7. High education costs make the expectation rational: Good-quality education is increasingly bought from private institutions at rising cost, so a high expected salary is not only aspirational but necessary to recover that outlay.

    Challenges to the Periodic Labour Force Survey

    1. Informal work is under-captured: Household surveys do not fully record home-based, gig and platform work in a workforce that is about 90 per cent informal. Eg. Delivery and ride-hailing riders working across two aggregators are frequently recorded as ordinary self-employed workers. Fix. Align the activity definitions with International Labour Organization and System of National Accounts practice so multi-job holders, freelancers and platform workers are counted separately.
    2. No skill mapping against job requirements: The survey does not match worker skills to the requirements of available jobs, so structural unemployment cannot be measured from it. Eg. The India Skills Report finding that only about half of graduates are employable has no counterpart in official survey data. Fix. Add a skills and job-requirement module so mismatch is measured rather than inferred.
    3. Rural data has been low frequency: Rural estimates were historically produced only once a year, so rural distress is visible with a long lag. Eg. A monsoon failure that pushes workers back into farm labour shows up only in the following annual round. Fix. Extend high-frequency quarterly or monthly rounds to rural areas rather than confining them to towns.
    4. Urban bias in the high-frequency rounds: The quarterly bulletins have been confined to urban areas, which under-measures the larger rural workforce. Eg. Quarterly urban unemployment rates are debated publicly while comparable rural numbers are unavailable. Fix. Publish a single integrated quarterly series covering both sectors on the same reference period.
    5. New job categories are missing: Gig, digital, start-up and green jobs are not adequately represented in the occupational classification the survey uses. Eg. Solar installation and battery recycling roles have no distinct occupational code. Fix. Integrate Employees’ Provident Fund Organisation, National Career Service and PLFS records so emerging job creation is tracked from administrative data as well.

    Conclusion

    Young urban job seekers want formal salaried careers and dynamic enterprise, and correcting their information about the market lowers what they expect to earn without changing what they want. That asymmetry places the burden of adjustment on the economy rather than on the young, and realising these aspirations requires a structural transformation that creates jobs with regular pay and benefits. The four Labour Codes are a step in that direction, and creating good jobs and genuine career paths, rather than jobs alone, is no longer optional. Failure carries a specific cost, which is the squandered potential of an entire generation.

    Employment and Unemployment in India

    1. What is measured: An unemployed person is of working age, that is 15 years and above, without work, currently available for work and actively seeking it in a reference period.
    2. Structure of the workforce: The Labour Force Participation Rate stood at 59.3 per cent in 2025, about 90 per cent of the workforce is informal, and nearly 58 per cent of salaried workers still lack a written contract.
    3. The absorption problem: Services drive most output growth but employ under 30 per cent of the workforce, while manufacturing contributes only about 16 to 18 per cent of Gross Domestic Product against roughly 26 per cent in China.
    4. Types of unemployment tested: Frictional, structural, cyclical, seasonal, disguised, voluntary and chronic unemployment are distinguished, with disguised unemployment concentrated in agriculture where marginal productivity approaches zero.

    Laws and Rules Governing Employment in India

    1. Code on Wages, 2019: Consolidates four wage laws, sets a statutory floor wage, and extends minimum wage cover beyond the roughly 30 per cent of workers it earlier reached.
    2. Industrial Relations Code, 2020: Merges three laws, raises the closure and retrenchment approval threshold from 100 to 300 workers, and gives fixed-term workers parity and gratuity after one year.
    3. Code on Social Security, 2020: Merges nine laws, defines gig and platform workers for the first time, and requires aggregators to contribute 1 to 2 per cent of turnover to a welfare pool.
    4. Occupational Safety, Health and Working Conditions Code, 2020: Consolidates 13 laws into one licence, one registration and one return, and caps hours at 8 to 12 daily and 48 weekly.
    5. Commencement of the four Codes: All four came into force on 21 November 2025, replacing a fragmented body of central labour legislation.
    6. Mahatma Gandhi National Rural Employment Guarantee Act, 2005: Guarantees 100 days of wage employment per rural household in a financial year.

    Government Initiatives for Employment Generation

    1. PM Viksit Bharat Rozgar Yojana: An employment-linked incentive approved in July 2025 with a Rs 99,446 crore outlay, targeting 3.5 crore jobs over two years.
    2. e-Shram Portal: A national database issuing Universal Account Numbers to unorganised workers and integrating access to more than 14 central schemes.
    3. PM Internship Scheme: Launched in 2024 to offer 1 crore internships in top companies over five years.

    Challenges in Employment Generation in India

    1. Lopsided structural change: India moved from agriculture to services without a job-rich manufacturing phase, so the sector that absorbs low-skilled labour elsewhere never scaled here. Eg. Manufacturing’s share of output has been stuck near 17 per cent against a 25 per cent policy target. Fix. Direct incentives to textiles, leather, food processing and electronics assembly, which absorb low and semi-skilled workers at scale.
    2. Capital-intensive investment bias: Investment flows to information technology and infrastructure rather than to labour-intensive activity, so output growth outruns job growth. Eg. Under the Production Linked Incentive scheme, most disbursed incentive has gone to large scale electronics assembly and pharmaceuticals, both capital intensive lines. Fix. Weight incentive schemes by jobs created per rupee of assistance rather than by output alone.
    3. Firms stay small to avoid compliance: Threshold-linked obligations reward staying under the size limit, which caps productivity and formal hiring. Eg. Micro, small and medium enterprises face more than 1,450 annual compliances costing Rs 13 to 17 lakh. Fix. Extend the Jan Vishwas approach of decriminalising minor compliance offences, which already covered 183 provisions across 42 central Acts.
    4. Skill deficit at both ends: Only about 4.7 per cent of the workforce has formal skill training, against roughly 96 per cent in South Korea, so employers and applicants describe different jobs. Eg. The Annual Status of Education Report 2023 found a quarter of rural youth aged 14 to 18 unable to read a Class 2 text. Fix. Tie curricula to Industry 4.0 and green job roles through mandatory industry-academia apprenticeship linkages.
    5. Women are kept out of paid work: Caregiving, domestic duties and mobility barriers hold female participation far below male participation. Eg. Urban female Labour Force Participation Rate stood at 25.8 per cent against 75.6 per cent for men in 2024. Fix. Enforce creche provision and workplace safety obligations already carried in the Codes.

    Matching Previous Year Question

    “[2023, GS3, 15 marks] Most of the unemployment in India is structural in nature. Examine the methodology adopted to compute unemployment in the country and suggest improvements.”

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