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Subject: Economics

  • [2nd September 2025] The Hindu Op-ed: The rise and risks of health insurance in India

    PYQ Relevance

    [UPSC 2023] Examine the pattern and trend of public expenditure on social services in the post-reforms period in India. To what extent this has been in consonance with achieving the objective of inclusive growth?

    Linkage: The expansion of Pradhan Mantri Jan Arogya Yojana (PM-JAY) and State Health Insurance Programmes (SHIPs) shows rising public expenditure on health but largely towards insurance reimbursements rather than strengthening primary health infrastructure. This trend benefits private hospitals and tertiary care but fails to reduce out-of-pocket costs or enhance inclusivity, as utilisation remains low. Thus, the expenditure pattern reflects growth without true inclusiveness, misaligned with the objectives of inclusive growth.

    Mentor’s Comment

    The debate on health insurance in India has intensified in recent years, especially with the expansion of State-sponsored schemes like Pradhan Mantri Jan Arogya Yojana (PM-JAY). While these initiatives provide some relief, the core question remains: can insurance-driven models substitute for robust public health infrastructure? This article unpacks the illusion of universal health coverage (UHC) through insurance, its systemic risks, and the urgent need for course correction.

    Introduction

    The Bhore Committee Report (1946) defined UHC as guaranteed access to quality health care for every citizen irrespective of their ability to pay. Eight decades later, India still falls far short of this goal. Instead of strengthening public health infrastructure, India has leaned heavily on health insurance schemes like the PMJAY and State Health Insurance Programmes (SHIPs). Though they provide relief to some, these schemes have created new distortions, risks, and inequities in the health system.

    The Surge of Health Insurance Schemes

    1. PMJAY Launch (2018): Landmark scheme under Ayushman Bharat with ₹5 lakh annual cover per household for in-patient care.
    2. Massive Coverage: In 2023–24, PMJAY covered 58.8 crore individuals with an annual budget of ₹12,000 crore.
    3. Parallel SHIPs: State-level schemes cover a similar number with a budget of at least ₹16,000 crore.
    4. Rising Budgets: SHIP allocations grew at 8–25% annually (2018–19 to 2023–24) in States like Gujarat, Kerala, Maharashtra.

    Commercialisation of Healthcare under Insurance

    1. Two-thirds of the PMJAY budget flows to private hospitals, often profit-oriented.
    2. Study findings: Minimal change in hospitalisation rates, but rise in private hospital use.
    3. Weak regulation: India’s poorly regulated profit-seeking providers dominate the system.

    Hospitalisation Bias in Insurance Models

    1. Bias towards hospitalisation: Insurance covers only in-patient care, neglecting primary and outpatient care.
    2. Ageing challenge: Expanding coverage to elderly (70+) risks disproportionate spending on tertiary care.

    Challenges in Effective Utilisation of Coverage

    1. High theoretical coverage: 80% of the population enrolled under PMJAY + SHIPs.
    2. Low effective use: Only 35% of insured patients could utilise benefits (2022–23 HCES).
    3. Barriers: Lack of awareness, procedural hurdles, and discrimination by providers.

    Discrimination in Healthcare Delivery

    1. Private hospitals: Prefer uninsured patients for higher commercial charges.
    2. Public hospitals: Prefer insured patients for reimbursement incentives.
    3. Result: Discriminatory treatment and pressure on patients to enrol immediately.

    Financial Strains Leading to Hospital Withdrawals

    1. Pending dues: PMJAY arrears reached ₹12,161 crore, more than its annual budget.
    2. Provider dissatisfaction: Low reimbursement, long delays.
    3. Hospital exits: 609 hospitals opted out of PMJAY since inception.

    Corruption and Irregularities in PMJAY and SHIPs

    1. Fraudulent practices: NHA flagged 3,200 hospitals for irregularities.
    2. Common issues: Overcharging, denial of treatment, unnecessary procedures.
    3. Weak safeguards: No evidence of effective audits or transparency in scheme portals.

    The Systemic Risk of Insurance-Led Health Care

    1. Profit over patients: Insurance reinforces commercial medicine rather than correcting it.
    2. Underfunded public health: India spends only 1.3% of GDP on health (World Bank, 2022), vs world average of 6.1%.
    3. Comparative failure: Unlike Canada and Thailand, India’s schemes lack universal coverage and non-profit focus.
    4. Result: Insurance becomes a “painkiller”, not a cure for India’s broken public health system.

    Conclusion

    Health insurance in India has expanded rapidly, but it remains a fragile foundation for UHC. It fosters profit-driven medicine, neglects primary care, suffers from poor utilisation, and is riddled with corruption. Without massive investment in public health infrastructure, primary care, and regulation, India cannot hope to achieve universal health coverage. Insurance schemes, at best, provide temporary relief, not sustainable health security.

    Value Addition
    1. National Health Policy, 2017: Targets increasing government health expenditure to 2.5% of GDP by 2025, but current levels remain at ~1.3%.
    2. High Out-of-Pocket Expenditure (OOPE): As per NSSO 2017–18, OOPE in India still accounts for over 50% of total health expenditure, one of the highest in the world.
    3. Lancet Commission on Global Surgery (2015): Highlighted that nearly 5 billion people worldwide lack access to safe, affordable surgery, underscoring the gaps in India’s insurance-driven, hospitalisation-focused approach.
    4. WHO Recommendation: For effective Universal Health Coverage (UHC), countries need to strengthen primary health systems — India still lags here, with sub-centres and PHCs facing severe staff shortages.
    5. National Health Accounts (NHAI) 2019–20: Show that private sector spending dominates health financing in India, with households bearing the brunt, unlike in OECD nations where governments fund the majority.
    6. Insurance Penetration vs. Health Security: India’s insurance penetration (life + non-life) is about 4.2% of GDP, but penetration does not automatically translate to healthcare access or financial protection.
    7. Ayushman Bharat Health and Wellness Centres (AB-HWCs): Intended to provide comprehensive primary healthcare (preventive + promotive), yet remain underfunded compared to PMJAY, skewing priorities.
    8. Equity Gap – Rural vs. Urban: Rural populations face doctor-population ratio deficits, with most PMJAY empanelled hospitals concentrated in urban centres, worsening regional disparities.
    9. Digital Health Mission (NDHM 2020): Aims to create digital health IDs and improve transparency, but challenges include digital divide and privacy concerns.
    10. Economic Survey 2020–21: Stressed that public health investment has high multiplier effects on productivity and human capital formation — much higher than insurance subsidies.

  • [1st September 2025] The Hindu Op-ed: India’s economic churn, the nectar of growth

    PYQ Relevance

    [UPSC 2019] Do you agree with the view that steady GDP growth and low inflation have left the Indian economy in good shape? Give reasons in support of your arguments.

    Linkage: India’s steady GDP growth of 7.8%, coupled with broad-based sectoral performance, reflects macroeconomic stability, while effective fiscal and monetary discipline underpins low inflation. The sovereign rating upgrade after 18 years validates external confidence in India’s fundamentals. These trends, along with inclusive poverty reduction, highlight that the economy is indeed in good shape.

    Mentor’s Comment

    India’s economy is once again at the centre of global attention. From being dismissed as a “dead economy” by sceptics, the latest economic data, sovereign rating upgrade, and energy security achievements have painted a powerful picture of resilience and renewal. This article unpacks the recent developments in India’s economic and energy story, their significance, and what they mean for aspirants of Viksit Bharat.

    Why is this issue in the news?

    India’s Q1 FY 2025-26 GDP figures revealed 7.8% real growth, the fastest among major economies, coupled with a historic sovereign rating upgrade by S&P Global after 18 years. Simultaneously, India has consolidated its position as the world’s third-largest energy consumer and is spearheading a green transition. These milestones are striking because they overturn the “dead economy” narrative, highlight India’s growing share in global growth, and showcase a balance between growth, reform, and welfare, all while maintaining democratic values in contrast to authoritarian models of fast-paced growth.

    Introduction

    Indian civilisation has always embraced the philosophy that turbulence precedes triumph, like the Samudra Manthan, where chaos yielded nectar. Similarly, India’s economic journey has turned crises into opportunities, from the liberalisation of 1991 to the digital surge during COVID-19. Today, India stands at another inflection point. Despite global headwinds and doubts, the country is demonstrating robust growth, deepening reforms, and a secure energy base, shaping the narrative of resilience and inclusive progress.

    Broad-based economic growth

    1. GDP expansion: Real GDP grew 7.8% in Q1 FY 2025-26, while GVA rose 7.6%, supported by manufacturing (7.7%), construction (7.6%), and services (9.3%).
    2. Global standing: India is the world’s fourth-largest economy and the fastest-growing major one, projected to overtake Germany by decade’s end.
    3. Global contribution: Independent estimates suggest India contributes 15% of incremental world growth, with ambitions to raise it to 20%.

    Why the sovereign rating upgrade matters

    1. S&P recognition: First upgrade in 18 years, citing robust growth, fiscal consolidation, and monetary credibility.
    2. Lower borrowing costs: Improves India’s access to cheaper capital and widens the investor base.
    3. Narrative shift: Counters the label of a “dead economy,” giving credibility to India’s reforms.

    Growth with inclusion

    1. Poverty reduction: 24.82 crore Indians moved out of multidimensional poverty between 2013-14 and 2022-23.
    2. Last-mile delivery: Success through bank accounts, clean cooking fuel, health cover, tap water, and direct benefit transfers (DBT).
    3. Democratic model: Built on consensus, competitive federalism, and digital rails, contrasting authoritarian growth models.

    Energy security as a growth driver

    1. Global role: India is the third-largest energy consumer, fourth-largest refiner, and fourth-largest LNG importer.
    2. Capacity expansion: Refining capacity of 5.2 mb/d with plans to cross 400 MTPA by 2030.
    3. Exploration reforms: Sedimentary basin coverage expanded to 16% in 2025 (from 8% in 2021), with 1 million sq km target by 2030.
    4. Gas reforms: New pricing linked to Indian crude basket; 20% premium for deepwater wells boosting investment.

    India’s energy transition

    1. Ethanol blending: Surged from 1.5% (2014) to 20% today, saving ₹1.25 lakh crore forex and paying ₹1 lakh crore to farmers.
    2. Green fuels: 300 compressed biogas plants under SATAT, targeting 5% blending by 2028.
    3. Hydrogen push: Oil PSUs driving the green hydrogen mission.

    Responding to global criticism on Russian oil

    1. Compliance: India operates fully within G-7/EU price cap systems; every transaction uses legal, audited channels.
    2. Global stabiliser: Purchases prevented oil shocks and stabilised prices, aligning with Vasudhaiva Kutumbakam.
    3. Export reality: India has been a top petroleum exporter for decades, not a “laundromat” for Russia.

    India’s digital-industrial revolution

    1. Semiconductors: Four new projects cleared under the India Semiconductor Mission; strengthened by Japan collaborations.
    2. Digital economy: India leads in real-time payments; UPI enhances small-business productivity and exports of solutions.
    3. Synergy: Gati Shakti logistics & digital rails reduce costs, formalise the economy, and spur consumption.

    Conclusion

    India’s recent performance is more than statistics, it is the reaffirmation of resilience, reform, and inclusion. The world’s doubters labelled it a “dead economy,” yet growth, energy security, digital leadership, and poverty reduction tell a different story. As reforms deepen, India is on track not just to become the world’s third-largest economy soon but also to build a model of democratic, inclusive, and sustainable growth. For India, Viksit Bharat is not aspiration, it is delivery in motion.

  • [30th August 2025] The Hindu Op-ed: In an unstable world, energy sovereignty is the new oil

    PYQ Relevance

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

    Linkage: India’s past dependence on West Asia for over 60% of crude made energy security central to its economic stability, but the share has now reduced to under 45% through diversification. The article highlights how geopolitical flashpoints and chokepoints like Hormuz expose the risks of over-reliance on West Asia. Thus, India’s emerging doctrine of energy sovereignty through five domestic pillars complements but does not replace the strategic need for balanced cooperation with West Asian suppliers.

    Mentor’s comment

    Energy defines the destiny of nations. While oil shaped the geopolitics of the 20th century, uninterrupted, affordable, and indigenous energy will decide the balance of power in the 21st. For India, a country importing over 85% of its crude and more than 50% of its natural gas,  energy dependence is not just an economic statistic but a national security liability. In an era of wars, fragile supply chains, and volatile prices, the debate is no longer about transition versus fossil fuel dependence. It is about energy sovereignty as the foundation of survival and strategic autonomy.

    Introduction

    India’s dependence on imported energy is a national vulnerability, with crude oil and natural gas alone forming nearly one-fourth of merchandise imports. While discounted Russian oil has provided temporary relief, heavy reliance on any single source magnifies strategic risks. In a fragile global environment, energy sovereignty is no longer an economic choice but a survival imperative.

    Energy Sovereignty as India’s New National Imperative

    • Import Dependence: Over 85% crude oil and 50% natural gas imports expose India’s economy to global shocks.
    • Economic Burden: Energy imports worth $170 billion (25% of total imports) destabilise the rupee and worsen the trade deficit.
    • Geopolitical Vulnerability: Russian oil now forms 35–40% of India’s imports, compared to just 2% pre-2022. Overdependence on one partner creates strategic risks.
    • Global Flashpoints: Near-conflict between Israel and Iran in June 2025 threatened 20 million barrels/day of global oil flows enough to push Brent crude above $103/barrel within days.
    • Fragile Transition: Despite global rhetoric, fossil fuels still supply 80% of primary energy; premature phase-outs, like Spain-Portugal’s 2025 blackout, prove the risks of over-reliance on intermittent renewables.

    Global Energy Shocks and the Lessons for India

    • 1973 Oil Embargo: Quadrupling of oil prices exposed Western overdependence on OPEC, prompting strategic reserves and diversified sourcing.
    • 2011 Fukushima Disaster: A nuclear meltdown stalled nuclear expansion, but the rise of coal/gas revived emissions. Nuclear energy is now regaining ground as a zero-carbon baseload.
    • 2021 Texas Freeze: Pipeline freezes and turbine failures highlighted the danger of cost-driven systems lacking resilience and weather-proofing.
    • 2022 Russia-Ukraine War: Europe’s 40% gas dependence on Russia ended abruptly, forcing record LNG prices and coal revival.
    • 2025 Iberian Blackout: Grid collapse in Spain-Portugal proved the risk of over-reliance on renewables without dispatchable backup.

    The Five Pillars of India’s Energy Sovereignty

    1. Coal Gasification for Indigenous Energy:
      • India has 150 billion tonnes of coal reserves, long sidelined due to high ash content.
      • Technologies like carbon capture and gasification can convert coal into syngas, methanol, hydrogen, and fertilizers.
      • Unlocking this potential ensures domestic supply security while reducing import dependence.
    2. Biofuels: Rural Empowerment Meets National Security:
      • Ethanol blending programme transferred over ₹92,000 crore to farmers, reduced crude imports, and saved foreign exchange.
      • With the E20 blending target, rural incomes will expand further.
      • SATAT scheme supports compressed biogas (CBG) plants, producing clean fuel and bio-manure with 20–25% organic carbon.
      • Vital for restoring soils in North India where organic carbon has dropped to 0.5% (vs healthy 2.5%).
    3. Nuclear Power for Dispatchable Zero-Carbon Future:
      • India’s nuclear capacity remains stagnant at 8.8 GW.
      • Thorium roadmap, uranium partnerships, and Small Modular Reactors (SMRs) are essential to create a baseload backbone for a renewable-heavy grid.
    4. Green Hydrogen as Strategic Technology:
      • Target: 5 million metric tonnes annually by 2030.
      • Requires domestic electrolyser manufacturing, catalysts, and storage systems.
      • The goal is not just production, but sovereign hydrogen value chains.
    5. Pumped Hydro as Grid Inertia Backbone:
      • Complements solar/wind by offering storage and grid balancing.
      • India’s topography provides vast potential for durable, scalable pumped hydro projects.

    India’s Shift Towards a Diversified Energy Strategy

    1. Reduced West Asia dependence: Crude sourcing from West Asia fell from 60% to under 45%, as per S&P Global.
    2. Diversification of partners: Russia has emerged as a key supplier, but long-term strategy aims at broad-based imports plus indigenous production.
    3. Energy Realism: India recognises transition as a pathway, not a switch. Security and resilience are prerequisites to climate ambition.

    Conclusion

    The 20th century was dominated by oil politics; the 21st will be shaped by energy sovereignty. India’s vulnerability due to high imports, volatile supply chains, and geopolitical risks makes domestic capacity building non-negotiable. Coal gasification, biofuels, nuclear, green hydrogen, and pumped hydro form the sovereign spine of a resilient energy future. The Israel-Iran ceasefire is a reminder: India must act during stability, not after a crisis. Energy sovereignty is no longer a policy choice, it is the foundation of survival, resilience, and strategic autonomy.

  • [pib] State Energy Efficiency Index, 2024

    Why in the News?

    The Bureau of Energy Efficiency (BEE) has released the latest edition of State Energy Efficiency Index 2024 (SEEI 2024).

    About State Energy Efficiency Index (SEEI), 2024:

    • Released by: Bureau of Energy Efficiency (BEE), Ministry of Power, in association with Alliance for an Energy Efficient Economy (AEEE).
    • Coverage: Assesses 36 States/UTs on energy efficiency performance for FY 2023–24.
    • Framework:
      • 6th edition, implementation-focused.
      • 66 indicators across sectors – Buildings, Industry, Municipal Services, Transport, Agriculture, DISCOMs, Cross-sector.
      • Includes new focus areas: EV adoption, star-rated buildings, Demand Side Management (DSM).
    • Classification:
      • Front Runners (>60%), Achievers (50–60%), Contenders (30–50%), Aspirants (<30%).
      • Top performers: Maharashtra (>15 MToE), Andhra Pradesh (5–15 MToE), Assam (1–5 MToE), Tripura (<1 MToE).
    • Key Highlights:
      • 24 states notified Energy Conservation Building Code (ECBC 2017).
      • 31 states adopted EV policies.
      • 13 states promoted solar pumps (Kerala – 74% adoption).
      • All 36 prepared State Energy Efficiency Action Plans (SEEAPs); 31 formed State Energy Transition Committees.
    • Significance: Supports India’s Net Zero 2070 goal by promoting state-level energy transition.

    Back2Basics: Bureau of Energy Efficiency (BEE):

    • Established: 1 March 2002, under the Energy Conservation Act, 2001.
    • Nodal Ministry: Ministry of Power.
    • Mission: To assist in developing policies & strategies for energy efficiency, with the aim of reducing energy intensity of the Indian economy.
    • Functions:
      • Regulatory: Implementation of Energy Conservation Act provisions.
      • Promotional:  Encourage adoption of efficient technologies & practices.
    • Key Achievements:
      • Contributed to 3.5% reduction in India’s overall energy consumption.
      • Implements programmes like Perform, Achieve, Trade (PAT), Standards & Labelling, Energy Efficiency Financing Platform, etc.
    [UPSC 2016] On which of the following can you find the Bureau of Energy Efficiency Star Label?

    1. Ceiling fans 2. Electric geysers 3. Tubular fluorescent lamps

    Select the correct answer using the code given below.

    Options: (a) 1 and 2 only (b) 3 only (c) 2 and 3 only (d) 1, 2 and 3*

     

  • PM SVANidhi Scheme extended until 2030

    Why in the News?

    The Union Cabinet has approved the restructuring and extension of the Prime Minister Street Vendor’s Atmanirbhar Nidhi (PM SVANidhi) scheme.

    About PM SVANidhi Scheme:

    • Launch: June 1, 2020, as Central Sector Scheme fully funded by the Ministry of Housing and Urban Affairs (MoHUA).
    • Purpose: To provide affordable credit to street vendors hit hard by the Covid-19 pandemic and help them restart/expand their businesses.
    • Target Group: Urban street vendors in statutory towns and peri-urban/rural areas.
    • Extension: Restructured and extended up to March 31, 2030.
    • Beneficiaries: 1.15 crore vendors, including 50 lakh new ones.

    Key Features:

    • Collateral-free Loans (incremental):
      • 1st tranche: ₹15,000 (earlier ₹10,000).
      • 2nd tranche: ₹25,000 (earlier ₹20,000).
      • 3rd tranche: ₹50,000.
    • Digital Empowerment:
      • Timely 2nd loan repayment → eligibility for UPI-linked RuPay Credit Card (for emergent business/personal needs).
      • Digital cashback incentives up to ₹1,600 on retail & wholesale transactions.
    • Capacity Building:
      • Training in entrepreneurship, financial literacy, digital skills, and marketing.
      • Food safety & hygiene training for street food vendors (with FSSAI partnership).
    • Implementation:
      • Jointly by MoHUA & Department of Financial Services (DFS).
      • DFS facilitates loans & credit cards through banks/financial institutions.
    • Wider Goals:
      • Promote financial inclusion & digital adoption.
      • Enable vendors’ business expansion & sustainable growth.
      • Contribute to inclusive urban economic development.
    [UPSC 2011] Microfinance is the provision of financial services to people of low-income groups. This includes both the consumers and the self-employed. The service/services rendered under microfinance is/are:

    1. Credit facilities 2. Savings facilities 3. Insurance facilities 4. Fund Transfer facilities

    Options: (a) 1 only (b) 1 and 4 only (c) 2 and 3 only (d) 1, 2, 3 and 4*

     

  • [27th August 2025] The gender angle to India’s economic vulnerabilities

    PYQ Relevance

    [UPSC 2021] Examine the role of ‘Gig Economy’ in the process of empowerment of women in India.

    Linkage: The article highlights that India’s economic vulnerabilities are aggravated by its failure to integrate women into the workforce. While traditional women-dominated export sectors face instability due to tariff shocks, the gig economy offers a new pathway for empowerment. Platforms like Urban Company demonstrate how women can earn sustainable incomes (₹18,000–25,000/month) with safety, insurance, and skill development. Thus, the gig economy is not just an employment option but a structural enabler of women’s empowerment, mobility, and autonomy. However, as the article stresses, formalisation of gig work, targeted policy support, and social protections are vital to make this empowerment sustainable.

    Mentor’s Comment

    India’s economic rise is undeniable, valued at $4.19 trillion, it is poised to be the world’s third-largest economy. Yet, the proposed 50% U.S. tariffs on Indian exports highlight an uncomfortable truth: India’s growth story is fragile because it has failed to empower half its population. This article unpacks how gender imbalance in labour markets is no longer a social concern but an economic vulnerability.

    Introduction

    India’s ascent as a global economic power is being tested by external shocks such as U.S. tariff hikes targeting $40 billion worth of Indian exports. Unlike China, which diversified and scaled its manufacturing, India’s labour-intensive sectors, textiles, gems, leather, footwear, remain exposed. These are precisely the industries that disproportionately employ women. The looming disruption reveals a deeper structural weakness: India’s persistently low female labour force participation rate (FLFPR). What was once viewed as a social development challenge is now a core economic liability threatening the sustainability of India’s demographic dividend.

    The U.S. tariff shock and its economic implications

    1. Targeted exports: U.S. tariffs at 50% could shave off nearly 1% from India’s GDP, directly hitting sectors employing 50 million workers, many of them women.
    2. Comparative disadvantage: India could face a 30–35% cost disadvantage against competitors like Vietnam.
    3. Dependency: The U.S. absorbs 18% of India’s exports, exposing India’s lack of diversification.
    4. Employment vulnerability: An export decline of up to 50% could destabilise women-dominated industries.

    Women’s participation as India’s strategic liability

    1. Persistently low FLFPR: Stuck at 37–41.7%, far below China’s 60% and the global average.
    2. Lost GDP potential: IMF estimates closing the gender gap could boost India’s GDP by 27%.
    3. Cultural and systemic barriers: Patriarchal norms, unpaid care work, safety issues, poor public transport, and sanitation gaps keep women away from education and jobs.
    4. Urban stagnation: Urban female labour participation shows little improvement despite rising education levels.

    The ticking clock of India’s demographic dividend

    1. Demographic window: India’s working-age population outnumbers dependents, but this will close by 2045.
    2. Historical lessons: China, Japan, and the U.S. capitalised on their demographic peak to fuel growth; Southern Europe failed due to low female participation, resulting in stagnation.
    3. Risk of lost opportunity: Without women’s integration, India risks a slowdown before fully realising its demographic advantage.

    Lessons from global experiences in women’s empowerment

    1. U.S. during WWII: Women’s labour mobilised with equal pay and childcare.
    2. China’s post-1978 reforms: FLFPR at 60%, backed by state-supported childcare and education.
    3. Japan’s reforms: FLFPR rose from 63% to 70%, boosting GDP per capita by 4%.
    4. Netherlands model: Flexible part-time work with full benefits, relevant for India’s context.
    5. Common thread: Institutional investments in legal protections, skills, and care infrastructure.

    Emerging solutions and policy innovations within India

    1. Karnataka’s Shakti Scheme: Free bus travel boosted female ridership by 40%, improving access to jobs, education, and autonomy.
    2. Targeted fiscal policies: Tax incentives for female entrepreneurs, digital inclusion drives, and gender-skilling programmes.
    3. Gig economy empowerment: Urban Company employs 15,000+ women, offering ₹18,000–25,000/month along with maternity benefits and insurance.
    4. Public schemes: Rajasthan’s Indira Gandhi Urban Employment Guarantee Scheme generated 4 crore person-days of work, with 65% jobs for women, enabling many to work for the first time.

    Conclusion

    The U.S. tariff threat is a wake-up call, India’s economic fragility lies not just in external shocks but in internal neglect of women’s potential. Empowering women is no longer a matter of social justice but a strategic necessity for sustaining growth, harnessing the demographic dividend, and achieving global competitiveness. The choice is stark: invest in women and rise as a resilient power, or ignore them and remain vulnerable to shocks and stagnation.

  • Jan Vishwas Bill 2.0

    Why in the News?

    • The Jan Vishwas (Amendment of Provisions) Bill, 2025 was introduced in the Lok Sabha to further the government’s agenda of decriminalisation and rationalisation of laws.
    • This is the second Jan Vishwas Bill; the first (2023) decriminalised 183 provisions in 42 Acts.

    About the Jan Vishwas Bill 2.0:

    • Introduced in Lok Sabha (August 2025) as the second Jan Vishwas reform.
    • Seeks to amend 16 Central Acts across 10 ministries/departments.
    • Builds on the Jan Vishwas Act, 2023, which decriminalised 183 provisions in 42 Acts.
    • Aims to promote trust-based governance, ease of living, and ease of doing business.
    • Currently referred to a Lok Sabha Select Committee for examination.

    Key Features of the Bill:

    • Scope: Proposes amendments to 355 provisions:
      • 288 decriminalised (technical/procedural defaults).
      • 67 rationalised (ease of living).
    • Acts covered: RBI Act (1934), Drugs & Cosmetics Act (1940), Motor Vehicles Act (1988), Electricity Act (2003), Legal Metrology Act (2009), MSME Development Act (2006), Apprentice Act (1961), and others.
    • First-time Offences: Introduces “warning” and “improvement notice” in 76 offences (e.g., non-standard weights, MVA violations).
    • Decriminalisation: Removes imprisonment clauses for minor defaults, replacing them with fines or warnings.
      • Example: Electricity Act → imprisonment replaced with fines between ₹10,000 and ₹10 lakh.
    • Penalty Rationalisation: Automatic 10% increase in penalties every 3 years for repeat offences.
    • Objective: Ensure deterrence without overburdening courts and without repeated legislative amendments.

    Why was the Bill brought in?

    • Over-criminalisation in Indian laws:
      • 882 central laws; 370 contain criminal provisions for 7,305 offences (Vidhi Centre).
      • Many are trivial or outdated (e.g., penalties for routine acts like exercising pets incorrectly).
    • Business barriers:
      • ORF (2022) → Over 50% of 1,536 business laws carry jail terms; 37.8% of 69,233 compliances carry imprisonment clauses.
      • Creates fear among entrepreneurs, stifling growth.
    • Judicial pendency:
      • 3.6 crore criminal cases pending in district courts (Aug 2025).
      • 2.3 crore are over 1 year old.
      • Minor offences clog the system, delaying trials of serious crimes.
    • Governance reform agenda:
      • Aligns with PM Modi’s commitment to remove “unnecessary laws” (reiterated in Independence Day 2025 speech).
      • Supports ease of living and ease of doing business as core NDA governance planks.
    [UPSC 2012] What is/are the recent policy initiative(s)of Government of India to promote the growth of the manufacturing sector?

    1. Setting up of National Investment and Manufacturing Zones

    2. Providing the benefit of ‘single window clearance’

    3. Establishing the Technology Acquisition and Development Fund

    Select the correct answer using the codes given below:

    Options: (a) 1 only (b) 2 and 3 only (c) 1 and 3 only (d) 1, 2 and 3*

     

  • Simplified two-rate GST Structure

    Why in the News?

    • The Group of Ministers (GoM) on Rate Rationalisation has accepted the Centre’s proposal to simplify GST into a two-rate structure.
    • The recommendation will now be placed before the GST Council for final approval.

    https://www.thehindu.com/business/Economy/gom-on-rate-rationalisation-approves-centres-two-rate-gst-proposal/article69959558.ece 

    About Goods and Services Tax (GST):

    • Nature: Comprehensive, multi-stage, destination-based indirect tax on goods and services.
    • Introduction: Launched July 1, 2017, via the 101st Constitutional Amendment Act, 2016.
    • Replaced Taxes: Subsumed excise duty, value-added tax (VAT), service tax, etc.
    • Objectives: One Nation–One Tax, reduce cascading taxation, simplify compliance, expand tax base.
    • Structure: Five slabs – 0%, 5%, 12%, 18%, 28%, with cess on luxury/sin goods (tobacco, cars, online gaming).
    • Exemptions: Essential goods (food, medicines, education items) in 0% slab. Petroleum, alcohol, and electricity remain outside GST.

    Proposed Two-Rate GST Structure:

    • Reforms: Removal of 12% and 28% slabs; only 5% and 18% to remain.
    • Reclassification: 99% of 12% items → 5% slab; 90% of 28% items → 18% slab.
    • New Slab: 40% rate for demerit goods (tobacco, luxury cars, real-money gaming).
    • Cess: Compensation cess on 28% items to end.
    • Timeline: Implementation expected October 2025 (Diwali).

    Policy Rationale & Concerns:

    • Simplification: From four slabs to two, easing compliance and transparency.
    • Consumption Boost: Lower rates on daily goods to benefit households and Micro, Small and Medium Enterprises (MSMEs).
    • Compliance Gains: Less scope for disputes, litigation, and evasion.
    • Economic Signal: Projects confidence in domestic consumption as growth driver.
    • State Concerns: States, including Kerala, warn of revenue loss; call for compensation mechanism.
    [UPSC 2018] Consider the following items:

    1. Cereal grains hulled 2. Chicken eggs cooked 3. Fish processed and canned 4. Newspapers containing advertising material

    Which of the above items is/are exempted under GST (Goods and Services Tax)?

    Options: (a) 1 only (b) 2 and 3 only (c) 1, 2 and 4 only *(d) 1, 2, 3 and 4

     

  • Kalai-II Hydroelectric Project

    Why in the News?

    The Arunachal Pradesh State Pollution Control Board (APSPCB) conducted a public hearing for the proposed 1,200 MW Kalai-II hydroelectric project in Anjaw district.

    About Kalai-II Hydroelectric Project:

    • Location: Anjaw District, Arunachal Pradesh, on the Lohit River (tributary of the Brahmaputra).
    • Capacity: 1,200 MW (six turbines of 190 MW each + one unit of 60 MW).
    • Project Type: Run-of-river with pondage.
    • Key Features: Concrete gravity dam, diversion tunnels, underground powerhouse, surge chamber, and tailrace tunnel.
    • Power Generation: Estimated 4.85 TWh annually; free power worth ₹318 crore/year for the state.
    • Equity: Arunachal Pradesh holds 26% stake.

    Strategic Importance:

    • Energy Security: Expands India’s renewable energy portfolio and hydropower capacity in the North-East.
    • Geopolitical Context: Strengthens India’s presence in the sensitive Brahmaputra basin bordering China.
    • Economic Boost: Contributes to state revenues through free power and Local Area Development Fund (~₹2.2 crore/year).
    • Part of Larger Push: One of 13 stalled hydropower projects in Arunachal Pradesh revived through MoAs with central PSUs, aligning with India’s clean energy targets.
    [UPSC 2008] On which one of the following rivers is the Tehri Hydropower Complex located?

    Options: (a) Alaknanda (b) Bhagirathi *(c) Dhauliganga (d) Mandakini

     

  • Minimum Public Shareholding (MPS)

    Why in the News?

    SEBI has released a consultation paper proposing changes in Minimum Public Shareholding (MPS) and Minimum Public Offer (MPO) norms for listed companies.

    What is Minimum Public Offer (MPO)?

    • Meaning: When a company launches an Initial Public Offer (IPO), it must sell a minimum number of shares to the public.
    • Analogy: Like a new shop ensuring enough goods are displayed for customers — otherwise trading is thin and controlled by a few.

    What is Minimum Public Shareholding (MPS)?

    • Concept: A company is like a cake. Promoters (founders/owners) usually keep most of it, but SEBI mandates at least 25% must be shared/sold with the public.
    • Purpose:
      • Broader ownership and participation.
      • Fairer prices by reducing manipulation.
      • Greater accountability of companies.

    What SEBI is proposing?

    • Flexibility: Large companies find it difficult to release big chunks of shares at once; rules will be eased.
    • Extended Timelines:
      • Companies valued at ₹50,000–1,00,000 crore now get up to 10 years (instead of 5) to meet 25% MPS.
      • They must reach 15% in 5 years first, then 25% in 10 years.
    • Reduced Burden: For very large companies, the initial Minimum Public Offer (MPO) will be lowered.

    Significance of the Move:

    • Market Stability: Selling too many shares too quickly is like flooding the market — prices may fall even if the company is strong.
    • Benefits:
      • More big companies will list in India.
      • Investors can enter gradually without sudden shocks.
      • Encourages fund-raising while maintaining fair trading.
    [UPSC 2024] Consider the following statements:

    I. India accounts for a very large portion of all equity option contracts traded globally, thus exhibiting a great boom.

    II. India’s stock market has grown rapidly in the recent past, even overtaking Hong Kong’s at some point in time.

    III. There is no regulatory body either to warn small investors about the risks of options trading or to act on unregistered financial advisors in this regard.

    Which of the statements given above are correct?”

    Options: (a) I and II only * (b) II and III only (c) I and III only (d) I, II and III