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Type: Explained

These Newscards correspond to the explained section of various newspapers. They become immensely important for both prelims and mains and special attention needs to be paid to them

  • How India plans to count caste now, and what went wrong earlier

    Why in the News

    The Registrar General of India has settled on an open ended question on caste for the ongoing Census, with no predetermined list of castes supplied to the enumerator. The same method in 2011 returned nearly 46.7 lakh distinct caste names and produced no usable table, which places the design of the question, rather than the decision to count, at the centre of the exercise.

    What is an open ended caste question?

    1. How it works: The respondent states a caste in their own words and the enumerator records that answer as given, with no dropdown list or code frame to select from.
    2. No verification step: The enumerator is duty bound to enter what is stated, including a surname offered in place of a caste name.
    3. Errors become data: A misspelling of the stated name becomes an entry in the caste column in its own right.
    4. The colonial precedent: The same open method was used until the 1931 Census, the last census whose caste data were released.

    Why does an open ended question produce unusable data?

    1. Interchangeable names for one group: Rajput, Thakur, Singh and Kshatriya may be used interchangeably by the same respondent for the same identity.
    2. The same name meaning different groups: Rajput in the Bundelkhand region cutting across Uttar Pradesh and Madhya Pradesh may also refer to the Other Backward Class Lodh community.
    3. Surnames that cross categories: Singh is a surname running across castes and across reservation categories, so it identifies nothing on its own.
    4. Volume without structure: The result is a very large number of entries that may all belong to a single caste, with no rule for collapsing them afterwards.
    5. The 2011 outcome: The open method returned nearly 46.7 lakh distinct caste names, against the 4,147 castes recorded in the last comprehensive caste census of 1931.

    What did the 1931 Census reveal about counting caste?

    1. Caste as a subjective category: The 1931 Census report itself recorded the difficulty of enumerating caste once respondents were free to name their own.
    2. New identities appearing between rounds: Sections of the leather working caste among Dalits in Punjab assumed a new religious identity as Aad Dharmis, meaning people of the original, pre Aryan religion of India.
    3. The scale of that shift: 418,789 persons enumerated themselves as Aad Dharmis, roughly the same number as Christians in Punjab at that time, in a category that did not exist in 1921.
    4. The pattern was not local: Similar names appeared in other regions, including Adi Dravida, Adi Andhras and Adi Karnatakas.
    5. Consolidation to bolster numbers: The report recorded grazier castes combining under the term “Yadava” the Ahirs, Goalas, Gopis, Idaiyans and other milkmen castes, a movement already effective in 1921.
    6. What both moves show: Caste counts respond to claims of new social status and to the arithmetic advantage of a larger group, not only to who people are.

    How did caste enumeration lapse after 1931?

    1. 1941: Caste details were collected but caste was dropped from the final tabulation.
    2. 1951: The government led by the first Prime Minister decided there would be no caste enumeration, in a newly independent India shaped by the ideals of equality and secularism.
    3. 2011: The Socio Economic and Caste Census conducted under the then government failed to produce usable caste data because of open ended enumeration.
    4. The data withheld: The Union government eventually withheld the raw caste data from the 2011 exercise.

    What did the Bihar caste survey show about using a list?

    1. The exercise: A statewide caste survey was ordered by the then Chief Minister of Bihar in 2023.
    2. The administrative choice made: State officials compiled a list of castes for the purpose, on the view that enumerating without a list would create an administrative nightmare.
    3. The contest that followed: Questions were raised after the data were released about how the lists were prepared and about the methodology used.
    4. What it establishes: A list makes tabulation possible and simultaneously makes the list itself the contested object, since inclusion and placement decide entitlement.

    What alternative design do experts propose?

    1. A predetermined list: A former chairman of the Indian Council of Social Science Research, who was a member of the expert committee on Telangana’s caste data, holds that a predetermined list is necessary.
    2. Building on lists that already exist: Scheduled Caste, Scheduled Tribe and Other Backward Class lists are already recognised by the government, so only a similar list of castes in the general category is needed for the list to be exhaustive.
    3. The error trade off: Such a list may still carry a margin of error of about 2 to 3 percent, which is smaller than the error produced by open ended enumeration.
    4. Columns for non identification: Separate columns for “no caste” and “no religion” are needed for people who do not identify with either.
    5. Separate questionnaires by group: Distinct questionnaires are proposed for Scheduled Castes and Scheduled Tribes, because the exclusion each faces differs, untouchability related for the former and physical and geographical isolation for the latter.
    6. No separate schedule for Other Backward Classes: A separate questionnaire is held to be unnecessary for OBCs, since social and educational backwardness would be captured by the Census exercise anyway.
    7. Questions on internal hierarchy: A Valmiki community activist campaigning for sub categorisation holds that the schedule must ask about hierarchies and exclusions within the Scheduled Castes and Scheduled Tribes, since some castes within them are more deprived than others.

    How many caste groups does the state already recognise?

    1. Scheduled Castes: The Ministry of Social Justice and Empowerment lists 1,208 Scheduled Castes, with different castes appearing in the category in different States.
    2. Scheduled Tribes: A Press Information Bureau year end release of 2022 lists exactly 730 Scheduled Tribes.
    3. What the two lists prove: A workable, State specific enumeration frame already exists for the reserved categories, which is why the general category is the only gap in a list based design.
    4. The residual problem: The lists are State specific, so a single national code frame still has to reconcile the same caste appearing in different categories across States.

    Challenges to caste enumeration in the Census

    1. Self declaration cannot be verified: No enumerator can test a stated caste against any record, so the count is a record of claims. e.g. the 1931 appearance of 418,789 Aad Dharmis in Punjab was a reclassification, not a demographic change.
    2. Category and caste are conflated: Respondents answer with a reservation category rather than a caste, which destroys the disaggregation the exercise exists to produce. e.g. an entry of “OBC” or “General” tells the statistical office nothing about the specific community.
    3. State specific lists break national aggregation: The same caste name sits in different categories in different States. e.g. a community listed as OBC in one State appears in the general category in a neighbouring one, so a national total is not additive.
    4. Political stakes shape the answer: Enumeration takes place while reservation and sub categorisation demands are live, which gives groups a reason to consolidate. e.g. the Yadava consolidation of Ahirs, Goalas, Gopis and Idaiyans recorded in 1931 combined several castes into one larger head.
    5. Enumerator discretion at the point of entry: With no code frame, spelling, phrasing and abbreviation decisions rest with the field functionary. e.g. a misspelt surname entered as a caste becomes a distinct caste in the final dataset.
    6. Publication risk: Caste tables invite legal and political contest, which creates an incentive to withhold rather than release. e.g. the raw caste data of the 2011 exercise were never published.
    7. Sub caste invisibility: A single caste head hides sharp deprivation differences within it. e.g. sub categorisation demands within the Scheduled Castes rest on the claim that a few communities capture most of the benefit.

    Conclusion

    The choice of an open ended caste question repeats the design that failed in 2011 and that the 1931 report had already flagged as unstable. A predetermined list built on the existing Scheduled Caste, Scheduled Tribe and Other Backward Class rolls, extended to the general category, is the correction experts have placed on record, along with separate questionnaires for Scheduled Castes and Scheduled Tribes and questions on internal hierarchy. The self enumeration window is currently open, so the question design is close to being frozen. Whether the exercise yields a usable caste table will be settled by the code frame, not by the decision to count.

    “[2009] Consider the following statements:

    1. Between Census 1951 and Census 2001, the density of the population of India has increased more than three times.

    2. Between Census 1951 and Census 2001, the annual growth rate (exponential) of the population of India has doubled.

    Which of the statements given above is/are correct?

    (a) 1 only

    (b) 2 only

    (c) Both 1 and 2

    (d) Neither 1 nor 2

  • Transmission Constraints Emerge as the Binding Limit on India’s Renewable Expansion

    Why in the News

    Insufficient transmission lines have emerged as a major obstacle to India’s renewable energy expansion, with many solar projects being curtailed during daylight hours, a rating agency assessment released on 19 August 2026 found. The constraint has shifted the binding limit on India’s energy transition from how fast capacity can be built to how much of it the grid can actually carry, and new project bidding has collapsed in response.

    What is curtailment of renewable power?

    1. Forced reduction of output: Curtailment occurs when a power generator is forced to reduce or stop producing electricity because of oversupply and grid congestion, even though the plant is capable of generating.
    2. Why solar is hit hardest: Solar output peaks in the middle of the day, when several projects on the same corridor feed in simultaneously and demand is not correspondingly high, so the surplus cannot be evacuated.
    3. What it costs the generator: A curtailed unit is generation permanently lost, since sunlight cannot be stored without additional storage capacity, and the fixed cost of the asset continues to accrue against a smaller output.
    4. Scale of the problem: Around 37% of renewable energy capacity at substations affected by curtailment in the northern, western and southern regions operates under short term access arrangements, and this capacity faces 30% to 50% curtailment during the day.

    What is Temporary General Network Access?

    1. Short term use of spare grid capacity: Temporary General Network Access (T-GNA) is a short term arrangement that allows a renewable energy project to use available capacity on the inter-State transmission system, typically for periods ranging from a single time block to about 11 months.
    2. Why it is precarious: T-GNA gives no firm entitlement to evacuate power, so projects operating under it are particularly vulnerable to curtailment, which raises their operational costs and, on prolonged use, reduces the supplier’s revenues.

    What is the inter-State transmission system?

    1. The national transmission backbone: The inter-State transmission system is the network of high voltage lines and substations that carries power across State boundaries, planned centrally and operated as a single national grid, on which access rights are allotted separately from generation approvals.

    What is a Power Purchase Agreement?

    1. The contract that makes a project bankable: A Power Purchase Agreement (PPA) is the long term contract under which a distribution company or intermediary agrees to buy a defined quantity of power from a generator at an agreed tariff, and without a signed PPA a project has no assured revenue stream against which lenders will disburse.

    What is firm and dispatchable renewable energy?

    1. Renewable power with an assured supply obligation: Firm and dispatchable renewable energy (FDRE) is renewable generation contracted with an obligation to supply a specified quantum during specified hours, achieved by combining solar, wind and storage, so that the buyer receives a guaranteed profile rather than whatever the weather delivers.

    What is round the clock renewable power?

    1. Renewable supply across all 24 hours: Round the clock (RTC) power is a contracting structure in which the developer commits to supply renewable energy across every hour of the day at a specified availability, again by combining complementary sources with storage.

    How severe is the curtailment, region by region?

    1. The affected regions: Curtailment at substations has been recorded in the northern, western and southern regions, the three regions carrying the bulk of India’s solar and wind capacity.
    2. Share on temporary access: Around 37% of renewable capacity at affected substations across these three regions operates under T-GNA.
    3. The daily loss: Capacity operating under T-GNA faces 30% to 50% curtailment during daylight hours.
    4. Western region: About 55% of the affected capacity in western India was under T-GNA, and peak curtailment reached 8,617 MW as of 6 August 2026.
    5. Northern region: The corresponding peak curtailment figure for the northern region was 5,573 MW.
    6. What the concentration means: The western region, which hosts the largest solar and wind clusters, is also the region most dependent on temporary access, so the two vulnerabilities compound rather than offset.

    Why has new capacity bidding collapsed even as construction continues?

    1. Construction pipeline remains large: More than 150 GW of renewable projects were under construction as of 30 June 2026.
    2. Awards have fallen sharply: After 40.6 GW was awarded in 2024-25, awards fell to 14.7 GW in 2025-26 and stood at only 4.7 GW through 10 August 2026.
    3. Contracts awarded but not signed: Between 40 GW and 45 GW of capacity with bids already awarded remained without signed PPAs as of April 2026.
    4. Delays in firming PPAs: Delays in converting awarded bids into signed PPAs are identified as an impediment independent of the transmission constraint.
    5. Land acquisition: Land acquisition for both generation sites and transmission corridors continues to stall projects.
    6. Distribution company finances: The financial position of distribution companies limits their willingness to sign long term purchase obligations at all, since a new PPA adds a fixed payment liability to a stressed balance sheet.
    7. The bidding mix is changing: New bidding is shifting toward firm and dispatchable renewable energy and round the clock power, which require storage and therefore carry a higher tariff than plain solar.

    Is the binding constraint on India’s energy transition generation capacity or grid capacity?

    1. The generation side is not the problem: More than 150 GW is under construction and renewable energy including large hydro is projected to account for more than 35% of electricity generation by 2029-30, against 22% in 2024-25.
    2. The evacuation side is: Capacity is being commissioned faster than transmission corridors are being built, which is why up to half of the output of projects on temporary access is being discarded during the hours it is generated.
    3. The market has already priced the constraint: New awards fell from 40.6 GW to 4.7 GW in eighteen months, which is the developer response to a corridor that cannot carry what is already built.
    4. Storage is the second missing input: Timely execution of intra-State and inter-State transmission infrastructure, along with greater storage capacity, is identified as critical to sustaining renewable additions, because a line that is congested at noon is idle at night.
    5. Why this reframes the target: A target expressed in installed capacity measures what has been built, while a target expressed in share of generation measures what actually reaches consumers, and curtailment is precisely the gap between the two.

    How is transmission and renewable infrastructure financed in India?

    Source: Backgrounder, Infrastructure Financing.docx

    1. Why bank lending failed: Commercial banks funded 25 to 30 year infrastructure assets with one to three year deposits, and this asset liability mismatch produced stressed assets crossing Rs 10 lakh crore in Indian banking by 2017.
    2. National Bank for Financing Infrastructure and Development: Established in 2021 under a dedicated Act of Parliament as India’s first dedicated infrastructure development finance institution, providing non recourse long term financing with 20 to 30 year tenors that match infrastructure asset life.
    3. Its scale: As of December 2025 it had sanctioned approximately Rs 3.03 lakh crore and disbursed approximately Rs 1.09 lakh crore.
    4. Partial Credit Enhancement: It partially guarantees bonds issued by infrastructure companies and special purpose vehicles, upgrading their credit rating from BBB to AA or AAA so that insurance companies and pension funds can participate, with the first such facility sanctioned in February 2026.
    5. Sector specific development finance institutions: REC and PFC finance power generation, transmission and distribution by raising long term bonds and lending to State electricity boards and private power companies.
    6. POWERGRID InvIT: The first Infrastructure Investment Trust in the power sector, set up in 2020, with proceeds channelled into new and under construction transmission projects.
    7. How an InvIT recycles capital: The sponsor transfers only the right to collect revenues for a defined concession period and receives upfront capital which it reinvests in new projects, while ownership is never transferred and the asset reverts at the end of the concession.
    8. The SEBI safeguard: SEBI requires a minimum of 80% of InvIT assets to be in completed operational projects, which protects investors from construction risk, and InvITs may raise debt up to 49% of asset value.
    9. Infrastructure Risk Guarantee Fund: Announced in the 2026-27 Budget, it provides partial guarantees to lenders financing infrastructure projects, covering a portion of the loss on default so that lenders extend credit where they previously refused, while the partial cover preserves due diligence incentives.
    10. Sovereign green bonds: Issued by the Government of India since 2022-23 with proceeds ring fenced for renewable energy, clean transport and sustainable water management, establishing a sovereign benchmark for long term green paper.
    11. The recycling logic: The architecture is designed so that the government builds, the asset stabilises and generates revenue, the asset is monetised through an InvIT, and the capital returns to fund the next tranche of the National Infrastructure Pipeline without a fresh budget allocation each cycle.
    12. Monetisation targets: The National Monetisation Pipeline 2.0, announced in February 2026, targets Rs 16.72 lakh crore including private sector investment of Rs 5.8 lakh crore over 2025-26 to 2029-30, nearly three times the first pipeline’s target.

    Challenges to India’s Renewable Energy Expansion

    1. Transmission build lags generation build: A solar park can be commissioned in about a year while a high voltage corridor takes several years, so the two cannot be commissioned in step. e.g. peak curtailment in western India reached 8,617 MW as of 6 August 2026 on capacity that was already generating.
    2. Temporary access gives no firm evacuation right: Projects on T-GNA can be curtailed at the system operator’s discretion, which makes their revenue unpredictable and their debt harder to service. e.g. around 37% of affected capacity across three regions runs on T-GNA and faces 30% to 50% daytime curtailment.
    3. Storage capacity is inadequate to absorb the midday surplus: Without batteries or pumped hydro the same corridor is congested at noon and underused at night. e.g. the shift in new bidding toward firm and dispatchable and round the clock contracts is itself an admission that plain solar without storage no longer clears.
    4. Distribution company finances limit offtake: Loss making distribution utilities avoid signing new long term purchase obligations irrespective of tariff. e.g. 40 GW to 45 GW of awarded capacity remained without signed PPAs as of April 2026.
    5. Right of way and land acquisition for transmission corridors: Transmission lines cross many districts and require sustained land and forest clearances along the whole route. e.g. land acquisition is named alongside transmission constraints as an independent impediment to project completion.
    6. Geographic concentration of resource: Solar and wind resources are concentrated in a few States while demand centres lie elsewhere, so the transition is dependent on long distance evacuation. e.g. the western and northern regions together account for the two largest curtailment figures recorded.
    7. Tariff pressure from cheap early bids: Projects awarded at very low tariffs in earlier competitive rounds have thin margins that curtailment erases entirely. e.g. the collapse of awards from 40.6 GW in 2024-25 to 4.7 GW through August 2026 shows developers withdrawing rather than bidding lower.
    8. Grid stability with high variable renewable share: A grid carrying more than 35% renewable generation needs inertia, frequency response and balancing reserves that thermal plants currently supply. e.g. must run thermal capacity has to be retained and paid for even as it operates at low plant load factors.
    9. Module and cell supply chain dependence: Domestic content requirements raise capital costs while imported modules expose projects to trade policy shocks. e.g. changes in duty on imported solar cells and modules have repeatedly reset project economics after bids were submitted.
    10. Delayed payments to generators: Payment delays by distribution utilities strain developer working capital independently of curtailment. e.g. the late payment surcharge rules had to be framed specifically to enforce a payment discipline that contracts alone did not achieve.

    Conclusion

    India’s renewable programme has moved past the point where generation capacity is the constraint, and the evidence for that is a 150 GW construction pipeline coexisting with up to 50% daytime curtailment on capacity that is already running. The market has responded not by building more but by bidding less, with awards falling from 40.6 GW to 4.7 GW in eighteen months, and by shifting toward firm and dispatchable contracts that price the constraint into the tariff. Whether renewable energy reaches more than 35% of generation by 2029-30 now depends on the execution of intra-State and inter-State transmission lines and on storage capacity, not on the pace of solar commissioning.

    “[2022, GS3, 15 marks] Do you think India will meet 50 percent of its energy needs from renewable energy by 2030 ? Justify your answer. How will the shift of subsidies from fossil fuels to renewables help achieve the above objective? Explain.”

  • Supreme Court makes school students the instrument for changing household waste behaviour

    Why in the News

    The Supreme Court has directed the Department of School and Higher Education to integrate theoretical and practical instruction on solid waste management so that students train their own family members. The order rejects the assumption that solid waste is a problem for sanitary workers alone, holding that a minuscule number of sanitary workers cannot handle the waste generated by a population of 1.4 billion. The order was passed on 18 August and released on Wednesday.

    What are the Solid Waste Management Rules, 2026?

    1. About: The Solid Waste Management (SWM) Rules, 2026 are the subordinate rules that set the national standards for the segregation, collection, transport, processing and disposal of municipal solid waste.
    2. Benchmark for audit: The Court treated these Rules as the extant standard against which existing waste infrastructure must be completely audited and upgraded.
    3. Where implementation power sits: The Court agreed with the Additional Solicitor General that the true power to implement the Rules lies with householders, local body officers and every direct and indirect contributor of waste, not with the municipal machinery alone.

    What are the five categories of waste the Court identified?

    1. Biodegradable waste: Organic waste from kitchens, markets and gardens that decomposes and is treatable by composting or biomethanation.
    2. Non biodegradable waste: Plastics, metals, glass and packaging that persist and require material recovery or recycling.
    3. Hazardous waste: Waste with toxic, corrosive, reactive or infectious properties requiring specialised handling and treatment.
    4. Electronic waste: Discarded electrical and electronic equipment carrying both recoverable metals and toxic components.
    5. Construction waste: Debris from building, renovation and demolition, which is the heaviest stream by volume in a growing city.
    6. The Court’s conclusion from the set: The volume and complexity of these five streams have outgrown what any single class of workers can be expected to handle.

    Why did the Court call the sanitary worker assumption constitutionally unethical?

    1. The prevailing assumption: The Bench held that the assumption that solid waste is a problem for sanitary workers alone, while the rest of the population remains passive generators, is neither legally correct nor practically sustainable, and is constitutionally unethical.
    2. The general feeling in society: The Court described the regrettable attitude as one where a person is entitled to generate but not to cooperate and control the impact of solid waste management at the threshold.
    3. Arithmetic of the mismatch: Every human being and their activities result in pollution, yet all contributors expect a minuscule percentage of sanitary workers to handle it.
    4. The responsibility it fixed: The Court held that this perception shall be eradicated and that waste management shall be the responsibility of all contributors.
    5. The public health warning: Continued complacency would lead to pandemic and endemic situations.

    What monitoring machinery has the Court already put in place?

    1. Trigger for the committee: The imbalance between the volume of waste generated and the infrastructure to collect it alarmed the Court on 25 May, when it constituted a monitoring committee.
    2. Five Union Secretaries: The committee comprises the Secretaries of the Ministries of Housing and Urban Affairs; Environment, Forest and Climate Change; Jal Shakti; and Panchayati Raj and Rural Development; and the Department of Drinking Water and Sanitation.
    3. Pollution regulator: The Member Secretary of the Central Pollution Control Board (CPCB) is the sixth member.
    4. Design logic of the composition: Urban services, environmental standards, water and sanitation, and rural local government are placed in a single body because waste crosses all four jurisdictions.

    Why did the Court fall back on education rather than penalty?

    1. The limit of law: The Bench accepted the reality that law alone could not induce good civic behaviour, and that the change had to come from within.
    2. The instrument chosen: The Court held that an educated child is the most effective and least coercive instrument for educating a parent or a relative.
    3. The tension this creates: Rules, standards and a five Secretary committee are enforceable instruments with fixed accountability, while behavioural change through schoolchildren has no compliance date and no defaulter.
    4. The reversal of the usual direction: Compliance is being routed through the household rather than through the municipal contractor, which shifts the burden to the very generators the Rules had earlier treated as passive.

    What directions did the Court issue?

    1. Curriculum integration: The Department of School and Higher Education must integrate, with immediate effect, both theoretical and practical knowledge on solid waste management.
    2. Students as trainers: Students are to be equipped to train their own family members in waste handling at the household stage.
    3. Teachers as trainers of trainers: Teachers are to be trained so that they can deliver the practical component.
    4. District level engagement: District Collectors must engage with households and educational institutions.
    5. Infrastructure audit: The waste infrastructure needs a complete audit and upgradation to meet the extant standards of the Solid Waste Management Rules, 2026.

    Conclusion

    The Court has reclassified solid waste from a service delivery failure of municipal sanitation into a generation side behavioural failure of 1.4 billion contributors, and has held the passive generator assumption to be constitutionally unethical. Its enforceable directions are the curriculum mandate on the Department of School and Higher Education, the engagement duty on District Collectors and the infrastructure audit against the Solid Waste Management Rules, 2026. The five Secretary committee constituted on 25 May continues to monitor the volume and infrastructure mismatch. The next stage will turn on whether the Department reports a dated curriculum integration plan, since the order carries an immediate effect direction but no separate compliance schedule.

    “[2018, GS3, 10 marks] What are the impediments in disposing the huge quantities of discarded solid wastes which are continuously being generated? How do we remove safely the toxic wastes that have been accumulating in our habitable environment?”

  • Census 2027: rights groups flag gaps in disability categories

    Why in the News

    Disability rights organisations have objected to the nine category disability question proposed for Census 2027, against the 21 specified disabilities recognised in law. The objection turns on a design choice, since the categories printed on the schedule decide which conditions can be counted at all, and a condition without its own box is recorded inside a broader one or not at all.

    What does Census 2027 propose to record on disability?

    1. The nine proposed categories: Seeing, hearing, speech, mobility, intellectual disability, mental illness, disability due to acid attack, disability due to chronic neurological disease, and blood disorder.
    2. What carries over from 2011: Six of the nine, namely seeing, hearing, speech, mobility, intellectual disability and mental illness, are the 2011 Census categories, with “mental retardation” renamed “intellectual disability”.
    3. What is new: Acid attack, chronic neurological disease and blood disorder are the three additions over the 2011 schedule.
    4. Multiple disability recording: The questionnaire allows up to three disabilities to be recorded for one person, entered in the order of severity.

    What are “specified disabilities” under the Rights of Persons with Disabilities Act, 2016?

    1. The statutory list: The Rights of Persons with Disabilities (RPwD) Act, 2016 recognises 21 specified disabilities in its Schedule, covering physical, intellectual, mental, blood related and multiple disabilities.
    2. The expansion it made: The Act replaced the Persons with Disabilities Act, 1995 and raised the recognised types from seven to 21, treating disability as a dynamic and evolving concept.

    Why do rights groups say the nine categories fall short?

    1. The assurance on record: The Union Minister of State for Social Justice and Empowerment stated in March 2026 that Census 2027 would capture data on all 21 disabilities.
    2. Conditions without a distinct box: Autism spectrum disorder, specific learning disabilities, dwarfism, leprosy cured persons and multiple disabilities including deafblindness are not distinctly placed under any proposed category.
    3. Distinct conditions collapsed into one: Thalassemia, haemophilia and sickle cell disease are reduced to the single category “blood disorder”, which erases the difference between three separate conditions with different prevalence and support needs.
    4. Other statutory conditions absent: Cerebral palsy, muscular dystrophy and multiple sclerosis are recognised in the Act but not separately represented in the proposed schedule.
    5. Scale of the objection: The statement of the National Platform for the Rights of the Disabled (NPRD), citing information from the Politics and Disability Forum, was endorsed by more than 400 signatories.

    What is the Registrar General’s defence of the design?

    1. Broad categories by design: The nine are described as broader categories that include other detailed specific disabilities within them.
    2. Severity ordering retained: The option to record up to three disabilities in order of severity is offered as the mechanism for capturing multiple disability.
    3. Consultation claimed: Categories were finalised after consultation with the Department of Empowerment of Persons with Disabilities, the Ministry of Social Justice and Empowerment, and other stakeholders.
    4. Enumerator competence: Field functionaries are not technically qualified to assess or confirm a specific disability, which is the stated reason for keeping categories broad.
    5. Training provided: A three day training covering all aspects of the questionnaire is held for enumerators and supervisors.
    6. Comparison with 2011: The 2027 schedule enumerates a larger number of disabilities than the 2011 schedule did.

    Why does the classification itself decide the count?

    1. The instrument sets the ceiling: An enumerator can only record what the schedule offers, so a condition without a category is absorbed into a broader one and disappears from the published table.
    2. Untrained recognition: Broad categories without a notified training module on which specific disability sits under which head leave the classification to the enumerator’s judgement.
    3. The respondent’s own knowledge: A person who neither communicates nor understands the correct name of their disability cannot correct a wrong entry, which compounds the error.
    4. Self declaration and stigma: Census disability data is self reported, and households under reported disability in earlier rounds because of stigma, which a broad category does nothing to correct.
    5. Downstream consequence: Undercounting a specific group weakens the evidence base for scheme design, budget allocation and reservation entitlements tied to that disability.

    What did the 2011 Census record on disability?

    1. Total count: The 2011 Census counted 2.68 crore persons with disabilities, which was 2.21 percent of the country’s population.
    2. Categories used: The 2011 schedule carried six of the nine categories now proposed.
    3. Concentration of the count: Movement or locomotor, hearing and vision related disabilities together accounted for over half of the country’s population with disabilities.
    4. What the 2011 base implies: A count already limited to six categories in 2011 sets the comparison base against which any 2027 increase will be read.

    Challenges to accurate disability enumeration

    1. Self reporting and stigma: Households conceal disability, particularly mental illness and intellectual disability, to avoid social consequences for marriage and employment. e.g. the 2011 Census figure of 2.21 percent sits well below global disability prevalence estimates of around 15 percent of population.
    2. Untrained enumerators on clinical categories: A three day training cannot equip a field functionary to distinguish autism spectrum disorder from intellectual disability. e.g. specific learning disabilities are invisible without assessment and were absent from the 2011 count entirely.
    3. Severity capping at three: Persons with more than three conditions lose the rest of their profile, which particularly affects multiple disability. e.g. deafblindness combines two sensory disabilities and has no distinct category in the proposed schedule.
    4. No linkage to certification data: Census figures are not reconciled with the Unique Disability ID database, so the two official counts diverge. e.g. UDID certification is issued against the 21 statutory categories while the Census will record nine.
    5. Question placement and time: The disability question sits late in a long household schedule, where fatigue produces default negative answers. e.g. the 2027 self enumeration form is completed by the respondent without any enumerator prompt at all.
    6. Definitional change across rounds: Renaming and regrouping categories between censuses breaks comparability of the time series. e.g. “mental retardation” in 2011 becomes “intellectual disability” in 2027, and three blood conditions are merged into one new head.

    Conclusion

    The dispute is not about whether Census 2027 counts persons with disabilities but about whether its nine category schedule can carry the 21 categories the law recognises. The Registrar General’s position is that the nine are containers holding the specific conditions, and the rights groups’ position is that a container without a notified mapping and enumerator training will not produce disaggregated data. The self enumeration window for snowbound areas is open until 31 August 2026, with the second phase of population enumeration in those areas from 1 to 30 September 2026 and a revisional round from 1 to 5 October 2026. Any change to the disability question must therefore be made before the main enumeration schedule is frozen.

    “[2026] Which of the following statements with regard to the persons with disabilities in India is/are correct?

    1. The Rights of Persons with Disabilities Act, an Act passed by the Parliament of India in 2018, mandates reservation in education and employment, places a legal duty on Governments to ensure accessibility and non-discrimination.

    2. The Sugamya Bharat Abhiyan focuses on achieving universal accessibility for Persons with Disabilities across three key domains, built infrastructure, transport systems and information and communication technology.

    3. The National Divyangjan Finance and Development Corporation (NDFDC) is a public sector organisation set up by the Ministry of Corporate Affairs as a not-for-profit company to promote entrepreneurship among Persons with Disabilities (PwDs).

    (a) 1 and 2

    (b) 2 only

    (c) 1 and 3

    (d) 1 only

  • The myth called ‘perfect victim’

    Why in the News

    The Goa Division Bench of the Bombay High Court on 6 August set aside a 2021 trial court judgment and convicted a former magazine editor of raping a former colleague, sentencing him to ten years of rigorous imprisonment. The High Court termed the trial court’s ruling perverse and held that it had fallen for the notion that a sexual assault complainant must be a ‘perfect victim’ and conduct herself in a certain way to appear credible. The ruling sets the evidentiary record against a stereotype of expected victim behaviour that has shaped Indian adjudication for four decades.

    What is the ‘ideal victim’ concept?

    1. Who theorised it: The Norwegian criminologist Nils Christie set out the concept of the ‘ideal victim’ or ‘perfect victim’ in a chapter of the same name in the book From Crime Policy to Victim Policy, published in 1986.
    2. What it claims: Victimhood is not an objective state established by the facts of the offence, it is a status that society grants or denies according to how far the complainant matches an expected profile.
    3. Where it is produced: The idea is propagated by the media, social media, films and the larger society, and race, class and gender determine who is cast as innocent and deserving and who as undeserving of sympathy.
    4. Why it matters in court: Once the profile becomes the test of credibility, a complainant who departs from it has her account doubted regardless of the evidence on record.

    What five attributes did Nils Christie assign to the ‘ideal victim’?

    1. Weakness relative to the offender: The victim is often female, disabled, very young or very old, and is therefore weak in relation to the offender.
    2. Respectability of activity: The victim is engaged in what society treats as respectable activities at the time of the offence.
    3. Blamelessness of location: The victim cannot reasonably be blamed for being where she was during the crime.
    4. No prior acquaintance: The victim does not know the offender personally.
    5. A stereotypically bad offender: The victim is attacked by a perpetrator who is big and bad.
    6. The additional condition: While being weak, the victim must have enough social power to influence sympathy and have her victim status recognised, which is why the poorest complainants are least often believed.

    What is the current status of protection for sexual assault survivors in India?

    1. The governing offence: Rape is defined and punished under Section 63 and Section 64 of the Bharatiya Nyaya Sanhita, 2023, with the minimum sentence set at ten years of rigorous imprisonment.
    2. Consent defined in statute: Consent is defined as an unequivocal voluntary agreement, and the absence of physical resistance does not by itself amount to consent.
    3. Past sexual history excluded: Evidence of a complainant’s general immoral character or previous sexual experience is no longer relevant to the question of consent, following the amendment of the evidence law in 2003 and its retention in the Bharatiya Sakshya Adhiniyam, 2023.
    4. The presumption on consent: Where sexual intercourse is proved in specified aggravated cases and the woman states she did not consent, the court presumes the absence of consent.
    5. Procedural protections: Trials are held in camera, the survivor’s identity may not be disclosed, and her statement is to be recorded by a woman officer, with a two month outer limit for completing the trial.
    6. The workplace framework: Sexual harassment at the workplace is governed by the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013, which codified the Vishakha guidelines.
    7. The gap that persists: None of these provisions govern the inferences a judge may draw from a survivor’s demeanour, which is what the Supreme Court’s report of 3 August 2026 addresses.

    Constitutional Provisions Related to Gender Justice and Fair Adjudication

    1. Article 14: Guarantees equality before the law and equal protection of the laws, the basis for challenging a differential standard of credibility applied to women complainants.
    2. Article 15(1): Prohibits discrimination on grounds of sex.
    3. Article 15(3): Permits the State to make special provision for women and children.
    4. Article 21: Guarantees life and personal liberty, read to include the right to live with dignity and bodily integrity.
    5. Article 39(a) and 39(d): Direct the State to secure an equal right to an adequate means of livelihood and equal pay for equal work for men and women.
    6. Article 39A: Directs the State to secure equal justice and free legal aid so that opportunities for securing justice are not denied by economic or other disabilities.
    7. Article 42: Directs the State to make provision for just and humane conditions of work and for maternity relief.
    8. Article 51A(e): Places a fundamental duty on every citizen to renounce practices derogatory to the dignity of women.
    9. Article 141: Makes the law declared by the Supreme Court binding on all courts, the route through which the Vishakha guidelines operated before Parliament legislated.

    How has the ‘ideal victim’ standard shaped Indian judgments?

    1. Mathura, 1979: In the custodial rape case of a teenager, the Sessions Court relied on the survivor’s previous sexual experience to reason that she had likely consented, describing her as habituated to sexual intercourse. The Supreme Court, while acquitting the accused policemen, noted the absence of any alarm or resistance from the survivor and of injuries on her body.
    2. Bhanwari Devi, 1992: In the gang rape of a social worker, the Jaipur District and Sessions Court in 1995 acquitted the accused of gang rape, reasoning that it was unlikely that upper caste men would pollute themselves by having sexual relations with a Dalit woman. Her caste status was what made her an unlikely ‘ideal victim’ in the court’s eyes.
    3. What that case nonetheless produced: The Bhanwari Devi case became the catalyst for the formulation of the Vishakha guidelines and later for the enactment of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.
    4. The Jindal case, 2017: A Punjab and Haryana High Court division bench, in an interim order, suspended the sentences and granted bail to three former law school students convicted of gang raping and blackmailing a classmate, describing the survivor’s behaviour as having a perverse streak.
    5. The reasoning in that order: The bench acknowledged that the allegations of threat and blackmail lent sufficient diabolism to the offence, but read her statement as offering an alternate conclusion of misadventure stemming from a promiscuous attitude and a voyeuristic mind, placing her sexual behaviour at the centre of its assessment.
    6. The trial court in the present case, 2021: The Goa Sessions Court noted several discrepancies in the survivor’s versions, and held that while she had claimed to be in shock and trauma after exiting the lift on 7 November 2013, the closed circuit television footage showed her composed and smiling.
    7. The common thread: Each ruling demanded a performance of trauma from the survivor, and treated any departure from the expected behaviour as a reason to doubt her credibility rather than to examine the evidence.

    Why did the High Court call the trial court’s reasoning perverse?

    1. What the trial court examined: It focused on the complainant’s conduct, her reactions and her personal background rather than on the evidence on record.
    2. What the High Court held about that: It termed the ruling perverse, and identified the specific error as the assumption that a complainant must conduct herself in a certain way to appear credible.
    3. The finding on trauma response: The High Court noted that a survivor has already faced trauma and might feel too ashamed, nervous or confused to respond clearly when questioned repeatedly in an unfamiliar environment.
    4. What that does to the demeanour evidence: Composure on camera minutes after an assault ceases to be evidence of consent once trauma is recognised as producing varied responses.
    5. The outcome: The conviction was recorded and a sentence of ten years of rigorous imprisonment imposed on the former editor for raping a former colleague.

    Why does the ‘ideal offender’ stereotype collapse in this case?

    1. The mirror concept: Christie held that the ‘ideal offender’ must be framed as purely bad, dangerous and a stranger to the victim, so that it becomes easy for society not to like him.
    2. When the frame breaks: Where the offender is a familiar person with a good background story, the ideal dynamic breaks down.
    3. How it broke here: The accused’s social status and his image as a liberal intellectual complicated the stereotype of the ‘ideal offender’.
    4. The consequence for the complainant: On Christie’s argument, when there is no ideal offender to hate, it becomes hard to perceive an ideal victim to sympathise with, so the doubt is transferred to the complainant.
    5. Why this is the core of the item: The two stereotypes operate as a single mechanism, and a complainant’s credibility is set not by her evidence but by how easily society can dislike the man she accuses.
    6. The structural result: This produces a hierarchy of victimisation in which those thought undeserving are perceived as having contributed to the situation and receive less sympathy or none at all.

    How is the judiciary correcting course?

    1. The institutional apology: In 2025, a former Chief Justice of India apologised on behalf of the judiciary for the Supreme Court’s judgment in the Mathura case, calling it a moment of institutional embarrassment.
    2. The report of 3 August 2026: The Supreme Court issued a report recommending greater gender sensitivity in judicial writing.
    3. What it cautions against: It cautions judges against drawing adverse conclusions from delayed reporting, from a lack of physical injuries, from inconsistencies in testimony, or from a survivor’s demeanour.
    4. The reasoning it supplies: It records that trauma affects people differently, which removes the empirical basis for treating a uniform behavioural response as a test of truthfulness.
    5. What the present ruling adds: The Bombay High Court applied that reasoning to set aside a completed acquittal, which converts a recommendation about judicial writing into an operative ground of appeal.

    Major debates surrounding the credibility of sexual assault survivors

    1. Demeanour as evidence: One position treats a complainant’s behaviour after the offence as relevant corroboration, the other holds that trauma responses vary so widely that demeanour carries no evidentiary value.
    2. The sole testimony rule: Indian law permits conviction on the sole testimony of the prosecutrix if found reliable, and the contest is over what makes testimony reliable when there is no medical or electronic corroboration.
    3. Delay in reporting: Delay is read by one line of reasoning as weakening the complaint and by another as the ordinary consequence of shame, dependence and fear of the accused’s social position.
    4. Character evidence in practice: The statutory bar on past sexual history has not removed the use of a complainant’s background and conduct as a proxy, which is precisely the defect the High Court identified here.
    5. Class and caste in the assessment: The Bhanwari Devi ruling turned on the improbability of upper caste men assaulting a Dalit woman, which shows social hierarchy operating as an evidentiary presumption.
    6. Judicial training against judicial discretion: Prescribing what inferences a judge may not draw is defended as necessary correction and resisted as an intrusion on the appreciation of evidence.
    7. The absence of measurement: There is no systematic dataset on how often acquittals turn on demeanour or conduct reasoning, so the scale of the problem is argued from a succession of named cases rather than from evidence.

    Challenges to eliminating victim stereotyping in adjudication

    1. Reasoning migrates to sentencing and bail: Barred from the finding on consent, stereotype reasoning reappears in orders on bail and on suspension of sentence. e.g. the 2017 Punjab and Haryana High Court interim order suspending the sentences of three convicted law students on a reading of the survivor’s promiscuous attitude.
    2. Social hierarchy operating as evidence: Caste and class assumptions are treated as improbability findings rather than as prejudice. e.g. the 1995 Jaipur District and Sessions Court reasoning that upper caste men would not pollute themselves with a Dalit woman.
    3. Electronic evidence read against the survivor: Footage recorded minutes after an assault is used to test a trauma response against an expected script. e.g. the 2021 Goa Sessions Court relying on closed circuit television footage showing the complainant composed and smiling after exiting the lift.
    4. Status of the accused shaping the inquiry: A respected or well connected accused shifts the burden of explanation onto the complainant. e.g. the present case, where the accused’s standing as a magazine editor and liberal intellectual complicated the stereotype of the ideal offender.
    5. Recommendations without binding force: A report on judicial writing does not bind a trial court in the way a statutory provision does. e.g. the Supreme Court’s report of 3 August 2026, whose recommendations reach trial judges only through appellate correction.
    6. Time to correction: Reversal comes at the appellate stage, years after an acquittal. e.g. the 6 August 2026 High Court conviction reversing a trial court ruling of 2021 on an incident of November 2013.
    7. Attrition before trial: Complainants withdraw under social pressure long before any court examines the evidence, so the reported cases understate the problem. e.g. the Mathura case, whose 1979 acquittal produced the nationwide campaign that led to the criminal law amendment of 1983.

    Conclusion

    The ‘ideal victim’ framework explains why Indian courts have repeatedly assessed a complainant’s respectability, caste, prior sexual history and post assault demeanour rather than the evidence on record. The High Court’s reversal on 6 August is the first appellate ruling to name that framework as the reason a trial verdict was perverse, and it applies the Supreme Court’s report of 3 August 2026 on gender sensitivity in judicial writing to an operative outcome. What remains unaddressed is that the correction arrives only on appeal, years after an acquittal, and that a report on judicial writing does not bind a trial court in the way a statutory bar does.

    What is Victimology?

    1. About: Victimology is the systematic study of the victim of a crime, the victim’s relationship with the offender, and the treatment the victim receives from the criminal justice system and from society.
    2. Rationale: It emerged because criminal law is framed as a contest between the State and the accused, which leaves the person actually harmed without a defined position in the proceedings.
    3. Primary victimisation: The harm caused by the offence itself.
    4. Secondary victimisation: The further harm caused by the response of the police, the courts, the media and the community, including hostile cross examination and disbelief.
    5. Victim precipitation: An older strand of the discipline that examined the victim’s own conduct as a contributing factor, now largely discredited in sexual offence contexts for shifting responsibility onto the complainant.
    6. Victim typologies: Classifications of victims by vulnerability and by perceived blameworthiness, of which Christie’s ‘ideal victim’ is the best known.

    Key Concerns Regarding Victimology in India

    1. No statutory standing for the victim: The victim is a witness in the prosecution’s case rather than a party, so the conduct of the trial rests with the State.
    2. Uneven victim compensation: Compensation schemes framed under the criminal procedure law vary widely between States in quantum and in disbursal time.
    3. Secondary victimisation in trial practice: Repeated questioning in an unfamiliar environment and cross examination on conduct reproduce the harm the trial is meant to remedy.
    4. Absence of support services: Trained counsellors, support persons and witness protection are unevenly available across districts.
    5. Blame allocation persists in reasoning: Discredited victim precipitation logic survives in judicial language about conduct, demeanour and lifestyle.
    6. No data on outcomes by victim profile: Conviction rates are not disaggregated by the survivor’s caste, class or relationship to the accused, so disparities cannot be measured.

    Laws and Rules Governing Sexual Offences and Survivor Protection in India

    1. Indian Penal Code, 1860: Defined rape under Section 375 and punished it under Section 376 until its replacement in 2023.
    2. Criminal Law (Amendment) Act, 1983: Enacted after the Mathura acquittal, it created the offence of custodial rape and introduced a presumption against consent in specified cases.
    3. Indian Evidence Act, 1872, as amended in 2003: Removed the provision permitting evidence of the prosecutrix’s general immoral character in a rape trial.
    4. Protection of Women from Domestic Violence Act, 2005: Provides civil remedies including protection, residence and monetary orders.
    5. Protection of Children from Sexual Offences Act, 2012: Creates gender neutral offences against children with child friendly trial procedures and special courts.
    6. Criminal Law (Amendment) Act, 2013: Enacted on the recommendations of the Justice J.S. Verma Committee, it widened the definition of rape and created offences of stalking, voyeurism and acid attack.
    7. Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013: Codified the Vishakha guidelines and requires an Internal Committee in every workplace with ten or more employees.
    8. It also requires a Local Committee at the district level for establishments below that threshold and for the unorganised sector.
    9. Criminal Law (Amendment) Act, 2018: Introduced the death penalty for the rape of a girl below twelve years and raised minimum sentences.
    10. Bharatiya Nyaya Sanhita, 2023: Replaced the Indian Penal Code, 1860, with rape defined in Section 63 and punished in Section 64.
    11. Bharatiya Sakshya Adhiniyam, 2023: Replaced the Indian Evidence Act, 1872 and retains the bar on evidence of the complainant’s past sexual history.
    12. Bharatiya Nagarik Suraksha Sanhita, 2023: Carries the trial procedure, including in camera proceedings and the recording of the survivor’s statement by a woman officer.

    Key Facts about Gender Justice Jurisprudence in India

    1. Vishakha versus State of Rajasthan, 1997: Laid down binding guidelines on workplace sexual harassment under Article 141, which governed the field for sixteen years until Parliament legislated in 2013.
    2. Tukaram versus State of Maharashtra, 1979: The Mathura acquittal, which triggered an open letter from four law professors and the nationwide campaign leading to the 1983 amendment.
    3. State of Punjab versus Gurmit Singh, 1996: Held that the testimony of a rape survivor is on the same footing as that of an injured witness and needs no corroboration as a rule.
    4. Justice J.S. Verma Committee, 2013: Constituted after the December 2012 Delhi gang rape, it reported within 29 days and its recommendations shaped the Criminal Law (Amendment) Act, 2013.
    5. Handbook on Combating Gender Stereotypes, 2023: Issued by the Supreme Court, it lists stereotyped terms used in judgments and supplies the neutral alternatives.
    6. International Day for the Elimination of Violence against Women: Observed on 25 November, marking the start of the sixteen days of activism ending on Human Rights Day.
    7. National Commission for Women: Established under the National Commission for Women Act, 1990 as the statutory body for the review of legal safeguards for women.

    Back2Basics: Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013

    1. What it is: A central statute creating a civil mechanism for the prevention and redressal of sexual harassment of women at the workplace.
    2. Origin: It codified the Vishakha guidelines laid down by the Supreme Court in 1997, which themselves arose from the gang rape of a social worker in Rajasthan in 1992.
    3. Administering ministry: The Ministry of Women and Child Development.
    4. Internal Committee: Mandatory in every workplace employing ten or more persons, headed by a senior woman employee, with at least half its members being women and one member drawn from a non governmental organisation.
    5. Local Committee: Constituted by the District Officer for establishments with fewer than ten employees and for complaints against the employer.
    6. Coverage: It extends to the organised and unorganised sectors, to domestic workers, and to clients, customers and visitors at a workplace.
    7. Timelines: A complaint is to be filed within three months of the incident, the inquiry completed within ninety days, and action taken within sixty days of the report.
    8. Duties on the employer: Providing a safe working environment, displaying the penal consequences of harassment, organising awareness programmes and filing an annual report.

    Way Forward

    1. Convert the report into a practice direction: Issuing the 3 August 2026 recommendations as a binding practice direction under Article 141 would reach trial courts directly rather than through appeal.
    2. Mandatory reasoning standards in acquittals: Requiring a trial court to record why the evidence on record, and not the complainant’s conduct, produced an acquittal would make stereotype reasoning visible on the face of the order.
    3. Gender sensitisation in judicial academies: Sustained modules in State judicial academies for trial judges and public prosecutors, using the Supreme Court’s handbook on gender stereotypes as the syllabus.
    4. Trauma informed examination protocols: Recording the survivor’s evidence through a support person and in a single sitting reduces the repeated questioning the High Court identified as producing confused responses.
    5. Statutory bar on demeanour inference: An express evidentiary provision that a survivor’s demeanour is not relevant to consent would close the gap that the bar on past sexual history left open.
    6. Disaggregated conviction data: Publishing outcomes by the survivor’s caste, class and relationship to the accused would replace argument from named cases with measured disparity.
    7. Strengthen victim support infrastructure: Fully staffed one stop centres, district witness protection under the 2018 scheme, and timely compensation reduce the attrition that removes cases before trial.

    “[2014, GS4, 10 marks] We are witnessing increasing instances of sexual violence against women in the country. Despite existing legal provisions against it, the number of such incidences is on the rise. Suggest some innovative measures to tackle this menace.”

  • SEBI’s Closing Auction Session: Better Price Discovery, and the First Manipulation Case

    Why in the News

    The Closing Auction Session (CAS), introduced by the Securities and Exchange Board of India (SEBI) on 3 August 2026 to replace the average based method of fixing stock market closing prices, has raised mutual fund participation from 5% to 7% earlier to 25%. Within ten days of launch the regulator imposed a Rs 3.7 crore penalty on two entities for manipulating the same window, which exposes the trade off at the centre of the reform, that concentrating price discovery into a single transparent auction also concentrates the target for manipulation.

    How does the Closing Auction Session work?

    1. A fixed auction window: CAS is an official 20 minute auction held between 3:15 p.m. and 3:35 p.m., during which the exchange collects buy and sell orders from participants instead of executing continuous trades.
    2. A blind auction: Participants cannot see the full order book during the window, which prevents an order placed at the last instant from being priced against a visible book.
    3. Matching at the equilibrium price: At the end of the window all orders are matched at a single equilibrium price, defined as the price at which the maximum number of shares can be traded.
    4. Deferred execution: In contrast to continuous trading, where bids and offers match instantly, an auction can only result in a trade after the exchange ends it, which allows more time for supply and demand to find a new equilibrium.

    What is the Volume Weighted Average Price?

    1. An average of executed trades: The Volume Weighted Average Price (VWAP) is the average price of trades executed over a defined period, weighted by the quantity traded at each price, and it was the basis on which exchanges earlier fixed the closing price from the last 30 minutes of continuous trading.
    2. Why an average is vulnerable: Because it averages trades that have already happened, a few large trades placed at the end of the period can pull the average disproportionately without any change in the underlying supply and demand.

    What is order imbalance?

    1. The gap between buy and sell interest: Order imbalance is the gap between cumulative buy quantity and cumulative sell quantity at different price levels within the auction, and a low imbalance indicates that the discovered price represents a more stable consensus.

    What is tracking error?

    1. Deviation of a fund from its benchmark: Tracking error is the extent to which an index fund's or exchange traded fund's return diverges from the return of the index it is meant to replicate, and it widens when the closing price used to value the fund differs from the price at which the index is computed.

    Why did SEBI replace the VWAP based closing price?

    1. The closing price is a reference, not a number: The closing price of a security is used for portfolio valuation, index computation, derivative settlement, mutual fund net asset value calculation and institutional investment decisions, so it must reflect the expectations of both buyers and sellers.
    2. The old method's weakness: Exchanges determined the closing price largely through the VWAP of trades in the last 30 minutes of continuous trading, and a few large last minute trades could disproportionately affect the final average, creating the possibility of price distortion.
    3. When distortion was worst: The vulnerability was concentrated on large event days, specifically index rebalancing days and derivative expiry days, when order flow is heavily one sided.
    4. The measured evidence: For NIFTY 50 stocks, volatility in the last half hour exceeded the volatility observed between 09:15 and 14:30 by 1.8 times on MSCI index rebalancing days and by 1.5 times on FTSE index rebalancing days in 2024.
    5. The conceptual shift: CAS converts closing price determination from passive averaging of past trades into dynamic demand and supply discovery, and reduces price noise while improving the information efficiency of Indian equity markets.
    6. The regulatory gain: The SEBI Chairperson stated that CAS provides the regulator with greater capability to identify manipulation than the earlier VWAP based system.

    What does the spread of closing auctions across major exchanges establish about the model?

    1. The peer group: With this move the National Stock Exchange and the Bombay Stock Exchange have joined NASDAQ, the New York Stock Exchange, the London Stock Exchange, Euronext, the Hong Kong Stock Exchange, Singapore Exchange, the Tokyo Stock Exchange and the Australian Securities Exchange, all of which fix closing prices by auction.
    2. United States, NASDAQ Closing Cross: A single price auction at the close that publishes indicative closing prices and order imbalance information in the minutes before the cross, so that participants can supply liquidity against a visible imbalance.
    3. United States, New York Stock Exchange Closing Auction: Designated Market Makers publish imbalance information before the close and are obliged to offset residual imbalance, which places an accountable intermediary inside the auction.
    4. United Kingdom, London Stock Exchange: A closing auction with a randomised end to the uncrossing phase, so that no participant can time an order to the exact final instant.
    5. Hong Kong Stock Exchange: Reintroduced its Closing Auction Session in 2016 with price limits and a random closing period, after an earlier version launched in 2008 was suspended in 2009 following manipulation concerns, which is the closest precedent for India's present position.
    6. Japan, Tokyo Stock Exchange: Uses the Itayose single price call auction method to determine the closing price, matching all eligible orders at one price.
    7. Australian Securities Exchange: Runs a single price closing auction with a randomised start, again to defeat last instant order timing.
    8. What the set demonstrates: Closing auctions were initially adopted to achieve efficient price discovery and have since become a liquidity event in their own right, with the volume share of closing auctions increasing across both Europe and America.

    Who gains from a cleaner closing price?

    1. Passive funds first: India's passive funds, which have expanded from a relatively small base to a multi crore asset base driven by exchange traded funds and index funds, are likely to be the biggest beneficiaries initially, because they depend on accurate closing prices to replicate benchmarks.
    2. Mutual funds have already moved: The SEBI Chairperson stated that mutual funds' participation rate in CAS has risen sharply to 25%, compared with 5% to 7% earlier.
    3. Large orders execute without leaking information: The auction allows large investors to participate anonymously and execute at a commonly discovered price, which reduces information leakage and the price impact that usually accompanies large orders placed close to market closing time.
    4. Foreign institutional capital: Foreign investors managing billions of dollars prefer markets with predictable closing mechanisms, so aligning India with international practice can improve institutional inflows into Indian equities.
    5. Better execution technology: Execution algorithms that analyse order imbalance, liquidity patterns and equilibrium prices push Indian markets toward institutional quality trading practices.
    6. A stronger valuation benchmark: A well functioning CAS makes the closing price a stronger valuation benchmark by incorporating the bid spread, order imbalance, liquidity and investor conviction, rather than only executed trade prices.

    Does concentrating price discovery into one window reduce manipulation or relocate it?

    1. The case that it reduces manipulation: Matching at a single equilibrium price with a blind order book removes the ability of a few late trades to pull an average, and the regulator gains a complete record of every order placed and cancelled inside the window.
    2. The case that it relocates manipulation: Concentrating the entire closing price determination into 20 minutes creates one high value target, and the first enforcement action arrived within ten days of launch.
    3. The evidence for the second reading: The alleged manipulation involved placing very large orders and cancelling them within seconds, a technique that works precisely because the auction aggregates orders before matching them.
    4. What actually changed: The manipulation did not disappear, it became visible, since the regulator could identify the pattern from the order and cancellation record in a way the VWAP system did not permit.
    5. The unresolved part: Detection after the event does not prevent the closing price on that day from being distorted, and the closing price then flows into index computation, net asset values and derivative settlement before the enforcement order is issued.

    What did SEBI's first CAS manipulation order find?

    1. The penalty and the entities: SEBI imposed a penalty of Rs 3.7 crore on Copthall Mauritius Investment Ltd. and Mansi Share and Stock Broking Private Ltd. and barred them from the market for allegedly manipulating trades during the CAS.
    2. The date and the context: The alleged violations occurred on 13 August 2026, the day on which weekly derivative contracts linked to the Sensex expired.
    3. The reference price rule: SEBI fixes the maximum permitted deviation from the reference price at 3% within the CAS.
    4. The buy side conduct: One entity placed large buy orders constituting at least 85% of all buy orders made in the minutes before the Sensex closed, all of them above the 3% deviation mark, and simultaneously cancelled its latest buy order.
    5. The sell side conduct: The other entity placed large sell orders across eight Sensex constituents totalling about 12.65 lakh shares, of which more than seven lakh shares were placed 2.5% below the reference price and 4.6 lakh shares below 1%, and cancelled them within four to five seconds.
    6. The alleged effect: The manipulation led to three price spikes.
    7. The alleged motive: SEBI's preliminary findings state that placing and then cancelling these large buy and sell orders allowed the noticees to avoid losses or wrongfully profit from positions in derivative trades that would otherwise have expired worthless.
    8. The stage of proceedings: The noticees have been given 21 days to respond to the interim order.
    9. The regulator's stated posture: The SEBI Chairperson stated that anyone manipulating the CAS would face strict and immediate action, that CAS exists for transparency, and that those who think they can manipulate CAS in order to discredit it are mistaken.

    Challenges to the Closing Auction Session

    1. Cash and derivative markets close at different times: Cash market closing prices are set through CAS while equity derivatives continue trading beyond the window, creating a temporary gap between spot and futures prices. e.g. on Sensex weekly expiry days the mismatch is largest, and it was on the 13 August 2026 expiry that the first manipulation case arose.
    2. Arbitrage strategies lose their reference: Arbitrage traders who price the spot against the future cannot do so cleanly when one leg is settled by auction and the other by continuous trading. e.g. cash and carry arbitrage positions built on a VWAP close now carry an unhedged residual through the auction window.
    3. Algorithmic and institutional models were built on the old mechanism: Institutional traders and algorithmic firms must rebuild strategies that assumed a VWAP based close, factoring in auction imbalances, indicative prices and real time order flow. e.g. SEBI itself stated that the problem is a lack of understanding, because algorithms and other players historically based their models on the old mechanism.
    4. Index levels jumped across the auction in early sessions: Participants raised concerns over the sharp difference between index levels recorded before CAS and after the auction on the first two trading days, though SEBI ruled out foul play. e.g. this gap appeared immediately after the 3 August 2026 launch, before participation had stabilised.
    5. Illiquid securities cannot generate a representative price: The efficiency of CAS depends on sufficient order participation, and in less liquid securities limited buy and sell orders may produce a closing price that does not represent broader market sentiment. e.g. this is why the mechanism was launched only for stocks with futures and options contracts rather than the whole cash market.
    6. Retail investors do not recognise the new closing price: For many retail investors the closing price has traditionally meant the last traded price or a VWAP figure, so intraday traders and derivative participants may find the auction price confusing. e.g. an investor comparing a broker application's last traded price with the official closing price on the same screen sees two different numbers.
    7. Order cancellation is a manipulation channel the auction structure enables: Large orders placed to shift the indicative equilibrium and then withdrawn before matching are the classic auction manipulation technique. e.g. the 13 August 2026 case involved sell orders cancelled within four to five seconds of being placed.
    8. The 3% deviation band can itself be gamed: A cap on deviation from the reference price becomes a target that orders cluster against rather than a limit they respect. e.g. all of the buy orders in the first enforcement case were placed above the 3% deviation mark.
    9. Derivative expiry concentration magnifies the stake: Restricting the number of weekly expiries per exchange concentrated open interest into fewer expiry days, so the value riding on a single closing price rose. e.g. the alleged manipulation was targeted at derivative positions that would otherwise have expired worthless.
    10. Enforcement is after the fact: An interim order issued days later cannot restore a distorted closing price that has already flowed into net asset values, index levels and settlement. e.g. the Rs 3.7 crore order came with a 21 day response window, long after the 13 August settlement had been completed.

    Conclusion

    CAS replaces a passively computed average with an actively discovered equilibrium, and on the evidence of the first three weeks it is working as intended, with mutual fund participation quadrupling and the regulator able to reconstruct manipulation from the order record in a way the VWAP system did not allow. What the first enforcement case shows is that the reform relocates manipulation rather than eliminating it, moving it from a diffuse 30 minute average into a concentrated 20 minute auction where it is more consequential but also more visible. The correct test of the mechanism is not the volatility of its first fortnight but measurable improvement in market quality, specifically lower tracking errors, reduced closing price variance, narrower spreads, improved liquidity and stronger price efficiency.

    India's Securities Market

    1. What it is: The securities market is the set of institutions through which companies and governments raise capital by issuing securities and through which those securities are subsequently traded, valued and settled.
    2. Two segments: The primary market handles fresh issuance through public offers and private placements, while the secondary market handles trading of already issued securities on exchanges.
    3. Regulatory architecture: SEBI regulates the securities market, the RBI regulates the government securities and money markets, and the Insurance Regulatory and Development Authority of India and the Pension Fund Regulatory and Development Authority regulate the institutional investors that participate in it.
    4. Two national exchanges: The Bombay Stock Exchange, established in 1875, is Asia's oldest stock exchange, and the National Stock Exchange, which began operations in 1994, introduced screen based nationwide electronic trading.
    5. Global standing in derivatives: India accounts for a very large share of equity option contracts traded globally, and the National Stock Exchange has ranked as the world's largest derivatives exchange by number of contracts traded for several consecutive years.
    6. Dematerialised holding: Securities are held in electronic form through two depositories, the National Securities Depository Limited and the Central Depository Services Limited, established under the Depositories Act, 1996.
    7. Settlement cycle: India moved to a T plus 1 settlement cycle for all listed equities by January 2023, becoming one of the first large markets to do so, and has since introduced an optional same day settlement segment.
    8. Rising retail and passive participation: Growth in demat account openings, systematic investment plans and index linked products has made passive funds a structurally important source of demand, which is why the accuracy of the closing price now carries system wide consequences.
    9. Investor protection funds: Exchanges maintain Investor Protection Funds and SEBI operates an Investor Protection and Education Fund funded partly from disgorged amounts and penalties.

    Laws and Rules Governing India's Securities Market

    1. Securities and Exchange Board of India Act, 1992: Constitutes SEBI as a statutory body and gives it the powers to protect investor interests, promote market development and regulate the securities market.
    2. Section 11 confers the general power to regulate, and Section 11B the power to issue directions, including the interim orders under which market access is barred.
    3. Section 15HA provides the penalty for fraudulent and unfair trade practices, and Section 15J sets the factors for determining the quantum of penalty.
    4. Securities Contracts (Regulation) Act, 1956: Governs the recognition and regulation of stock exchanges, the definition of securities and the listing of securities.
    5. Securities Contracts (Regulation) Rules, 1957: Prescribe minimum public shareholding requirements and the conditions for continued listing.
    6. Depositories Act, 1996: Provides for the dematerialisation of securities and the constitution and regulation of depositories and depository participants.
    7. Companies Act, 2013: Governs public issues, prospectus disclosure, related party transactions and corporate governance obligations of listed companies.
    8. SEBI (Prohibition of Fraudulent and Unfair Trade Practices relating to Securities Market) Regulations, 2003: Prohibit manipulative and deceptive devices, including placing orders with no intention of executing them, which is the provision under which order and cancellation manipulation is pursued.
    9. SEBI (Prohibition of Insider Trading) Regulations, 2015: Prohibit trading on unpublished price sensitive information and require listed companies to maintain structured digital databases of such information.
    10. SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015: Fix continuous disclosure, board composition and related party approval requirements for listed entities.
    11. SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 2011: Govern open offers on acquisition of control or of specified shareholding thresholds.
    12. SEBI (Intermediaries) Regulations, 2008: Govern registration and conduct of brokers, merchant bankers and other intermediaries, under which broking entities are proceeded against.
    13. Prevention of Money Laundering Act, 2002: Applies know your customer and beneficial ownership obligations to market intermediaries and foreign portfolio investors.

    Key Facts about SEBI and India's Exchanges

    1. CAS was launched on 3 August 2026, initially for stocks having futures and options contracts, and runs from 3:15 p.m. to 3:35 p.m.
    2. SEBI fixes the maximum deviation from the reference price within the CAS at 3%.
    3. Mutual fund participation in CAS rose to 25% from 5% to 7% earlier within the first weeks of operation.
    4. SEBI released its study on retail and non retail participation in the derivatives market for 2025-26 on 20 August 2026.
    5. An earlier SEBI study flagged that over 90% of trades by retail investors in the derivatives segment resulted in losses.
    6. SEBI's measures to curb excessive derivatives volatility include increasing lot sizes and limiting the number of expiries per exchange, while the Union Budget raised the Securities Transaction Tax on the segment.
    7. SEBI was established as a non statutory body in April 1988 and given statutory status by the SEBI Act, 1992 with effect from 30 January 1992.
    8. SEBI's headquarters is at the Bandra Kurla Complex in Mumbai, with regional offices in New Delhi, Kolkata, Chennai and Ahmedabad.
    9. Appeals against SEBI orders lie to the Securities Appellate Tribunal, and from there to the Supreme Court on a question of law.
    10. National Investors' Day, marking investor awareness, and the Investor Protection and Education Fund are both instruments through which SEBI discharges its investor protection mandate.

    Back2Basics: Securities and Exchange Board of India

    1. Governing Act: Constituted under the Securities and Exchange Board of India Act, 1992.
    2. Year established: Set up as an administrative body in April 1988 and given statutory powers with effect from 30 January 1992.
    3. Administrative ministry: Functions under the Department of Economic Affairs, Ministry of Finance.
    4. Threefold mandate: To protect the interests of investors in securities, to promote the development of the securities market, and to regulate the securities market.
    5. Composition: A Chairperson, two members from among officials of the Union Ministries dealing with finance and law, one member from the RBI, and five other members appointed by the Union Government, of whom at least three are whole time members.
    6. Appointment: The Chairperson and members are appointed by the Union Government, and the Chairperson can be removed only on the grounds specified in the Act.
    7. Jurisdiction: Covers stock exchanges, depositories, brokers, merchant bankers, mutual funds, foreign portfolio investors, credit rating agencies, listed companies and investment advisers.
    8. Quasi legislative power: Frames regulations binding on all market participants without requiring prior parliamentary approval, subject to laying before Parliament.
    9. Quasi judicial power: Conducts inquiries, passes interim and final orders, imposes monetary penalties, bars entities from the market and orders disgorgement of unlawful gains.
    10. Quasi executive power: Investigates, conducts search and seizure with the approval of a designated court, and calls for records from any person associated with the securities market.
    11. Appellate route: Its orders are appealable to the Securities Appellate Tribunal, a statutory tribunal constituted under the same Act.

    Challenges in India's Securities Market

    1. Retail losses concentrated in derivatives: Retail participation has grown fastest in the segment where retail outcomes are worst. e.g. a SEBI study found that over 90% of trades by retail investors in the futures and options segment led to losses.
    2. Speed advantage of co-located algorithmic trading: Firms with exchange co-located servers execute in fractions of the time available to other participants, raising questions of unequal access. e.g. the National Stock Exchange co-location matter, in which SEBI passed disgorgement orders, ran for years before resolution.
    3. Manipulation in small and mid cap counters: Thin float and low liquidity make price manipulation cheap in smaller listed companies. e.g. SEBI's action against Dhenu Buildcon Infra Ltd. for allegedly creating a Rs 1,000 crore unsecured loan through 46 transactions over eight days and converting part of it into equity through preferential allotment, leaving six entities with 99.70% of outstanding equity.
    4. Unregistered investment advice through digital channels: Social media based tip providers operate outside the registered investment adviser framework. e.g. SEBI has repeatedly issued orders against finfluencers running paid advisory channels without registration.
    5. Enforcement timelines outrun market timelines: Investigation, interim order, final order and appeal can take years while the price effect is realised in minutes. e.g. an interim order carrying a 21 day response window is issued after the affected settlement is complete.
    6. Corporate governance failures at listed entities: Related party transactions and fund diversion continue to surface after the fact. e.g. the Central Bureau of Investigation registered a case against Gensol Engineering Limited, Gensol EV Lease Limited and their promoters for allegedly causing a loss of Rs 672.74 crore to the Indian Renewable Energy Development Agency Limited.
    7. Concentration risk from passive investing: As index funds grow, index inclusion and rebalancing decisions move prices independently of company fundamentals. e.g. volatility on MSCI and FTSE rebalancing days for NIFTY 50 stocks ran 1.8 times and 1.5 times the normal session volatility in 2024.
    8. Cross border and offshore derivative exposure: Positions built through offshore derivative instruments and foreign entities complicate beneficial ownership tracing. e.g. the first CAS manipulation order named a Mauritius domiciled investment entity.
    9. Investor grievance redress capacity: The volume of complaints from a rapidly widening retail base outpaces the capacity of the online dispute resolution and grievance mechanisms. e.g. the SCORES platform and the Online Dispute Resolution portal were both introduced in response to backlogs rather than in anticipation of them.

    Way Forward

    1. Align the derivative and cash market close: Extend an auction based or reference linked close to the derivatives segment, so that the spot and futures legs settle against a consistent price and the expiry day arbitrage gap closes.
    2. Publish indicative equilibrium prices and imbalance during the window: Adopt the NASDAQ and New York Stock Exchange practice of disseminating indicative prices and order imbalance, so that participants can supply liquidity against a visible imbalance rather than trade blind.
    3. Randomise the auction close: Follow the London Stock Exchange and Australian Securities Exchange practice of a randomised uncrossing moment, so that an order timed to the final instant cannot determine the outcome.
    4. Penalise order and cancellation patterns directly: Frame an explicit order to trade ratio and cancellation threshold for the auction window, so that placing large orders with no intention of execution is actionable on the pattern itself rather than only on proof of derivative gain.
    5. Phase the extension to illiquid securities: Extend CAS beyond futures and options eligible stocks only where a minimum order participation threshold is demonstrated, so that thin counters are not given a closing price that no consensus supports.
    6. Run a structured transition programme for algorithmic participants: Publish auction microstructure documentation and offer a simulated environment, since the regulator has itself identified model dependence on the old mechanism as the core adjustment problem.
    7. Invest in retail investor communication: Explain through exchange and broker interfaces why the last traded price and the official closing price now differ, so that the change does not itself become a source of mistrust.
    8. Publish a market quality dashboard: Report tracking error, closing price variance, bid ask spreads and auction liquidity on a rolling basis, so that CAS is evaluated on the metrics the reform was designed to improve rather than on daily volatility.

    Matching Previous Year Question

    “[2025] 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? (a) I and II only (b) II and III only (c) I and III only (d) I, II and III Answer: (a)”

  • Workers protesting for higher wages spent over 50 days in jail on average until courts intervened

    Why in the News

    An investigation into 222 bail orders arising from the April 2026 wage protests by factory workers in Noida found that relief was granted in 188 of them, or 84 per cent, after courts repeatedly held that mere presence in a protesting crowd is not evidence of criminal intent. The average protester nonetheless spent 53 days in custody before that relief arrived. Two protests over comparable grievances in the same month produced opposite outcomes, one ending in a ministerial resignation and an assurance of no prosecution, the other in mass arrests and preventive detention.

    What is the National Security Act, 1980?

    1. What it is: A central preventive detention law that allows the State to detain a person to prevent an apprehended act, without trial and without a criminal charge being proved.
    2. The period it permits: It allows detention for up to one year without trial.
    3. Who orders it: A district magistrate, a commissioner of police or the State government may pass the detention order, and the State government must confirm it.
    4. Its use in this case: Two of those arrested in the Noida protests were booked under the Act, a former journalist and a university graduate, and their pleas are pending before the Supreme Court and the Allahabad High Court respectively.

    What is the current status of the right to protest in India?

    1. A derived right, not an enumerated one: The right to protest is not written into the Constitution as a separate right, it is derived from the freedom of speech under Article 19(1)(a) and the freedom to assemble peaceably and without arms under Article 19(1)(b).
    2. The qualification on it: Both freedoms are subject to reasonable restrictions in the interests of public order and the sovereignty and integrity of India.
    3. The peaceful assembly limit: Protection extends only to assembly that is peaceable and unarmed, so the State may act against an assembly once it turns violent.
    4. The bail standard courts applied here: Judges in these cases held that mere presence at a protest is not evidence to deny bail, that the absence of specific evidence outweighs the gravity of the charges, and that ordinary workers cannot be equated with those found organising or instigating violence.
    5. Preventive detention sits alongside it: A person may be detained without trial under a preventive detention law even where no offence has been proved, which is the route taken against two of the accused here.

    Constitutional Provisions Related to Protest, Liberty and Preventive Detention

    1. Article 19(1)(a): Guarantees freedom of speech and expression, from which the right to protest is derived.
    2. Article 19(1)(b): Guarantees the right to assemble peaceably and without arms.
    3. Article 19(1)(c): Guarantees the right to form associations or unions, the basis of the right to organise labour.
    4. Article 19(2) and 19(3): Permit reasonable restrictions on speech and on assembly in the interests of public order.
    5. Article 21: Guarantees that no person shall be deprived of life or personal liberty except according to procedure established by law, read to require a just, fair and reasonable procedure.
    6. Article 22(1) and 22(2): Guarantee an arrested person the right to be informed of the grounds of arrest, to consult a legal practitioner, and to be produced before a magistrate within twenty four hours.
    7. Article 22(3): Expressly withdraws those protections from a person detained under a preventive detention law.
    8. Article 22(4) and 22(5): Cap preventive detention at three months unless an Advisory Board of persons qualified to be High Court judges reports sufficient cause, and require the grounds of detention to be communicated to the detainee.
    9. Entry 9, Union List and Entry 3, Concurrent List: Place preventive detention connected with defence and foreign affairs with the Union, and preventive detention for reasons connected with State security and the maintenance of public order on the Concurrent List.
    10. Article 23: Prohibits forced labour, the constitutional anchor of minimum wage jurisprudence.
    11. Article 43: Directs the State to secure a living wage and conditions of work ensuring a decent standard of life, as a Directive Principle.

    What triggered the Noida wage protests?

    1. Rising fuel costs: Rising liquefied petroleum gas cylinder prices amid the West Asia crisis, with workers additionally citing black market prices for cylinders.
    2. A rumour about the Labour Codes: WhatsApp rumours in late March that the new Labour Codes would raise minimum wages.
    3. A neighbouring wage settlement: Wage hike protests in Haryana's Manesar, which produced a settlement that workers in Noida then demanded for themselves.
    4. The underlying grievances: Workers cited unrealistic work targets, the absence of social security benefits such as provident fund, and hiring on a temporary basis through contractors.
    5. Working hours in practice: Workers said they were officially on eight hour shifts but routinely worked ten to twelve hours with few breaks, with safety, especially for women, a further concern.

    What did the wage revisions actually deliver?

    1. The Haryana settlement: After the Manesar protests, the State government announced a 35 per cent hike in minimum monthly wages on 9 April, backdated to 1 April.
    2. The Haryana figures: Rs 15,220.71 for unskilled workers and Rs 19,425.85 for highly skilled workers.
    3. The effect on Noida: The Haryana announcement intensified the Noida protests, which turned violent as workers and activists took to the streets.
    4. The Uttar Pradesh interim hike: Calm returned after the State announced its own interim revision on 14 April, raising unskilled wages from Rs 11,313 to Rs 13,690 and skilled wages from Rs 13,940 to Rs 16,868 in Gautam Buddh Nagar and Ghaziabad.
    5. The parallel warning: Authorities in Noida warned contractors that complaints against them would be dealt with harshly.

    What did the bail orders across the seven FIRs establish?

    1. First Information Report 149 of 2026, Noida Phase III: 31 granted bail and 6 denied, on an allegation that 300 to 400 accused entered an electronics firm's premises in Sector 67 on 13 April carrying lathis, sticks, bricks, stones and deadly weapons and extended threats to kill. The sessions court held that the mere fact that an accused was part of the crowd cannot by itself lead to the conclusion that he possessed the same grave criminal intent, and found that the prosecution had described the crowd's acts in a collective manner without specifying individual roles. Fourteen further grants came from the High Court.
    2. First Information Report 151 of 2026, Noida Phase III: 37 granted bail, on an allegation of stone pelting with intent to cause death and vandalism of security gates, closed circuit television cameras, glass structures and office property. The prosecution relied on an informant's statement, an inspection of the site and closed circuit television footage, and the court found that no such footage or electronic record had been placed on record depicting the accused in any violent activity.
    3. First Information Report 163 of 2026, Noida Phase II: 3 granted bail and 10 denied, arising from protests by workers of three garment and apparel firms between 10 and 11 April. Bail went to three who had remained in judicial custody for a long period once the chargesheet was filed, and was refused to ten on prima facie allegations of an active conspiratorial role, including the creation of WhatsApp groups in the names of companies and the recovery of banners, posters and pamphlets from their residences.
    4. First Information Report 165 of 2026, Noida Phase II: 29 granted bail and 6 denied, on an allegation that 450 to 500 workers assembled in Sector 84 and elsewhere on 13 April over wages, overtime and bonuses, and that the protest turned violent between 8.30 am and 9.30 pm. The prosecution cited independent witnesses including a water vendor, a chowmein cart owner and a rickshaw puller, and the court found it was not clear how they were previously acquainted with or able to identify the accused, adding that the presence of an accused at a labourers' protest is not unnatural. Six further grants came from the High Court.
    5. First Information Report 169 of 2026, Noida Phase II: 26 granted bail and 1 denied, on an allegation that garment exporter employees blocked gates, restrained workers from entering and threatened vandalism and arson from 10 April. The court noted the First Information Report was lodged nearly ten days after the incident with several accused not named in it and no explanation for the delay, and that the complaint reflected no actual incident of arson or injuries. The single refusal rested on closed circuit television footage establishing a specific role.
    6. First Information Report 172 of 2026, Noida Phase I: 21 granted bail and 7 denied, on an allegation that workers of an auto components manufacturer blocked a public road, damaged government and company property and injured police personnel. The court held that the only allegation was presence in the protesting crowd, that the role of every person in a crowd cannot be treated the same, and that mere presence does not by itself make every accused equally liable where no specific act is attributed.
    7. First Information Report 164 of 2026, Noida Phase II: 41 granted bail and 4 denied, with 39 of the 41 grants coming from the Allahabad High Court, which applied a broad standard resting on the facts and circumstances of the case, the evidence on record and grounds of parity.

    On what grounds was bail refused?

    1. The common accusation: Those denied relief face an alleged role in the conspiracy rather than an alleged act at the protest.
    2. Administering WhatsApp groups: Courts cited data showing certain accused were administrators of a WhatsApp group alleged to have been created to facilitate the commission of violence.
    3. Mobilisation from outside: Bail was refused to accused said to have called others to Noida for the protests or to have run groups to mobilise and instigate workers.
    4. Absence of an employment link: One court held that persons with no direct employment relationship with the companies concerned stand on a different footing from the companies' own workers.
    5. Statements of co accused: In one case bail was refused on the statements of co accused despite the defence pointing to the absence of prior criminal antecedents.
    6. Preventive detention instead of bail: On 13 May, nearly a month after the protests turned violent, the State invoked the National Security Act, 1980 against a 60 year old former journalist from Lucknow and a 25 year old Delhi University graduate, taking both outside the bail process altogether.
    7. The material cited in the detention orders: The grounds included membership of a political organisation, writing described as inciting a new generation to join a rebel organisation, joining a library run by a co accused, the recovery of a book on Indian revolutionaries described as a controversial work of literature, and participation in earlier protests over citizenship registration and over Gaza. One police report used the term andolanjeevi.

    What did the arrests cost the workers and their families?

    1. Time in custody: Across the 106 arrests carrying substantive allegations, ranging from rioting and arson to attempt to murder, the average period a protester spent in custody was 53 days.
    2. Arrest away from any protest: A 34 year old daily wage worker was picked up from Labour Chowk on 14 April while looking for work, and was released on bail 40 days later.
    3. Cost of the process itself: That worker's family, migrants from Bihar, spent nearly Rs 50,000 on jail and court visits alone, and his mother lost her factory job over the frequency of those visits.
    4. The scale of borrowing: The families of two young men aged 20 and 18 from Sitamarhi spent almost Rs 3 lakh between them on bail, and sought relatives' help for surety bonds.
    5. Length of detention for the young: One of those two completed three months and a day in jail, and was released two days after the other because of a documentation problem.
    6. The lasting effect: A 19 year old picked up on 14 April after stepping out of his workplace for a meal was released on 18 May, and reports that his parents now call six times a day fearing he will be picked up again.

    Why did two protests over comparable grievances end so differently?

    1. The first outcome: The Jantar Mantar protest demanding a leak proof examination system ended with the Union Education Minister's resignation and an assurance by the Centre and the States that the police would pursue no case against the protesters.
    2. The second outcome: The week long protest beginning 10 April by factory workers in Noida demanding higher wages drew a police crackdown, with up to 200 people taken into custody.
    3. The distinction was not the demand: Both protests raised a grievance against a State failure, one over examination integrity and the other over the statutory minimum wage.
    4. The distinction was the protester: The workers were largely contract hires, migrants and daily wagers with no institutional voice, which is what left them dependent on the courts for relief the other protesters received by executive assurance.
    5. The State conceded the demand anyway: Uttar Pradesh raised wages on 14 April, so the substance of the workers' claim was accepted while the workers themselves remained in custody.
    6. The relief was judicial, not political: Courts granted relief in 84 per cent of the bail pleas, which means the correction came from the judiciary rather than from the executive that had made the arrests.

    Major debates surrounding preventive detention and the right to protest

    1. Preventive detention inside a rights guaranteeing Constitution: India is among the few democracies to carry preventive detention in the Constitution itself, and Article 22(3) removes the very safeguards Article 22(1) and 22(2) create for an arrested person.
    2. Public order against ordinary law and order: Preventive detention is available only for a threat to public order, and the line between a law and order breach and a public order breach determines whether the ordinary criminal process or detention without trial applies.
    3. Collective liability against individual act: The prosecution treats the crowd as the accused while the courts require a specific act attributed to a named individual, and the bail record here shows the two standards producing opposite results.
    4. Bail as the rule and jail as the exception: The settled principle collides with a practice in which the average protester spent 53 days in custody before a court applied it.
    5. Speech and association as evidence: Books read, library membership, publishing and participation in earlier protests were cited in the detention grounds, which raises whether protected expression can supply the material for a preventive order.
    6. Advisory Board review against judicial review: Preventive detention is reviewed by an Advisory Board rather than by a trial, so the detenu's remedy is a writ petition, which is slower than a bail application.
    7. The right to strike: Indian law recognises no fundamental right to strike, so a wage agitation has no protected status independent of the general freedom of assembly.

    Challenges to protecting the right to protest

    1. Procedure as punishment: Even where charges fail, the time spent in custody before bail is itself the penalty. e.g. the 53 day average custody in these Noida cases against an 84 per cent eventual bail rate.
    2. Collective First Information Reports: Naming 300 to 500 unidentified persons in a single complaint makes individual defence impossible and shifts the burden onto the accused. e.g. First Information Report 149 of 2026, where the sessions court found the prosecution had described the crowd's acts in a collective manner without specifying individual roles.
    3. Preventive detention bypasses bail entirely: Once a detention order is passed, the bail jurisprudence stops applying and the detenu must approach a constitutional court. e.g. the two National Security Act, 1980 detentions of 13 May 2026, whose pleas remain pending before the Supreme Court and the Allahabad High Court.
    4. Cost of accessing justice: Surety bonds, travel, lawyers and jail visits impoverish families whose original grievance was a wage below subsistence. e.g. one family spending nearly Rs 50,000 on visits and another almost Rs 3 lakh on two sons.
    5. Contract hiring removes institutional protection: Workers hired through contractors have no recognised union and no employer of record to negotiate on their behalf. e.g. courts here treated persons with no direct employer employee relationship with the companies as standing on a different footing when refusing bail.
    6. Delay in registering complaints: Complaints filed days after the event allow names to be added without contemporaneous evidence. e.g. First Information Report 169 of 2026, lodged nearly ten days after the incident with several accused not named in it.
    7. Unequal executive response: The executive can extend an assurance of no prosecution to one set of protesters and none to another, with no standard governing the choice. e.g. the Jantar Mantar assurance against the Noida crackdown in the same month.
    8. Absence of accountability for wrongful arrest: No consequence attaches to an investigating agency whose case collapses at the bail stage. e.g. senior police officers linked to this investigation declined comment on the findings.

    Conclusion

    The Noida record shows a criminal process in which the crowd, rather than a named individual with a proved act, was treated as the accused, and in which the correction came from the courts rather than from the agency that made the arrests. The State conceded the wage demand on 14 April while the workers who raised it remained in custody for weeks longer, so the substance of the grievance was accepted without any consequence for the arrests. The pending challenges to the two National Security Act, 1980 detentions, before the Supreme Court and the Allahabad High Court respectively, are the next milestone in the matter.

    What is Preventive Detention?

    1. About: Preventive detention is the confinement of a person to prevent an apprehended future act, rather than to punish a proved past offence, and it therefore involves no charge, trial or conviction.
    2. Rationale: It exists to allow the State to act on an anticipated threat to public order or State security in advance of the harm, on the reasoning that a completed offence would be too late to prevent.
    3. Punitive detention distinguished: Punitive detention follows conviction after a trial, preventive detention precedes any trial and rests on the subjective satisfaction of the detaining authority.
    4. The constitutional cap: Detention beyond three months requires an Advisory Board of persons qualified to be High Court judges to report sufficient cause, under Article 22(4).
    5. The grounds requirement: The authority must communicate the grounds of detention to the detainee and afford the earliest opportunity to make a representation, under Article 22(5).
    6. The judicial standard: Because the satisfaction is subjective, courts review the procedure and the relevance of the material rather than the sufficiency of the grounds themselves.

    Key Concerns Regarding Preventive Detention

    1. Constitutional safeguards expressly withdrawn: Article 22(3) removes the right to be informed of grounds of arrest, to counsel and to production before a magistrate for a preventively detained person.
    2. No requirement to prove an offence: Detention rests on apprehension rather than evidence of a committed act, so the ordinary standard of proof never applies.
    3. Executive rather than judicial review: An Advisory Board, not a trial court, examines the detention, and the detenu's only judicial route is a writ petition.
    4. Vague standards for public order: The distinction between a law and order breach and a public order breach is not statutorily defined, so classification is a matter of executive judgment.
    5. Successive detention orders: A fresh order can follow the revocation of an earlier one, extending confinement beyond the period any single order permits.
    6. Use against speech and association: Writing, publishing, reading and participating in earlier protests have been cited as material in detention grounds, converting protected expression into evidence of apprehended threat.

    Laws and Rules Governing Preventive Detention and Public Order in India

    1. Preventive Detention Act, 1950: The first post independence preventive detention statute, tested in A.K. Gopalan versus State of Madras in 1950, and allowed to lapse in 1969.
    2. Maintenance of Internal Security Act, 1971: Provided for preventive detention on internal security grounds and was repealed in 1978.
    3. Conservation of Foreign Exchange and Prevention of Smuggling Activities Act, 1974: Permits preventive detention in smuggling and foreign exchange matters, and remains in force.
    4. National Security Act, 1980: Permits detention for up to one year to prevent a person from acting prejudicially to the defence of India, the security of the State, relations with foreign powers, the maintenance of public order, or the maintenance of supplies and services essential to the community.
    5. Detention orders may be passed by a district magistrate, a commissioner of police or the State government, and must be confirmed by the State government.
    6. Prevention of Illicit Traffic in Narcotic Drugs and Psychotropic Substances Act, 1988: Provides preventive detention in narcotics cases.
    7. Unlawful Activities (Prevention) Act, 1967: Governs terrorist and unlawful association offences, with restrictive bail conditions in place of ordinary bail jurisprudence.
    8. Bharatiya Nagarik Suraksha Sanhita, 2023: Replaced the Code of Criminal Procedure, 1973 and carries the preventive powers of the police and the magistracy, including the dispersal of unlawful assemblies.
    9. Bharatiya Nyaya Sanhita, 2023: Carries the substantive offences of rioting, unlawful assembly, mischief and criminal conspiracy on which protest prosecutions are built.
    10. State security legislation: Several States operate their own public safety or goonda acts providing for preventive detention on locally defined grounds.

    Back2Basics: The Four Labour Codes

    1. What they are: Four consolidated central statutes that subsume 29 earlier central labour laws into a single framework covering wages, industrial relations, social security and workplace safety.
    2. Code on Wages, 2019: Merges four laws including the Minimum Wages Act, 1948 and the Payment of Wages Act, 1936, and provides for a statutory floor wage set by the Centre below which no State may fix its minimum wage.
    3. Industrial Relations Code, 2020: Merges three laws on trade unions, standing orders and industrial disputes, and raises the threshold for prior government permission for retrenchment and closure to establishments with 300 or more workers.
    4. Code on Social Security, 2020: Merges nine laws on provident fund, gratuity, maternity benefit and employees' state insurance, and for the first time brings gig and platform workers within the definition of beneficiaries.
    5. Occupational Safety, Health and Working Conditions Code, 2020: Merges 13 laws on factories, contract labour, migrant workmen and specific hazardous sectors.
    6. Coverage of minimum wages: The Code on Wages, 2019 extends minimum wage entitlement to all employees in both organised and unorganised sectors, whereas the earlier law applied only to scheduled employments.
    7. Why they figure here: A rumour in late March 2026 that the Codes would raise minimum wages was one of the three stated triggers of the Noida protests.

    Way Forward

    1. Require individualised allegations in a First Information Report: A complaint naming an unascertained crowd should be treated as insufficient to sustain custody absent a specific act attributed to a named person.
    2. Apply a statutory bail timeline in protest cases: A fixed outer limit for the first bail hearing would prevent the process itself becoming the punishment, as the 53 day average shows it did.
    3. Restrict preventive detention to defined public order threats: A statutory definition distinguishing a law and order breach from a public order breach would narrow the discretion the National Security Act, 1980 currently leaves to the detaining authority.
    4. Bar expression and association as sole detention grounds: Books read, publications authored and participation in earlier lawful protests should not by themselves constitute material for a preventive order.
    5. Enforce the Code on Wages, 2019 floor wage: Timely notification and revision of minimum wages removes the grievance that produced the agitation, since Uttar Pradesh conceded the revision within four days of the protests.
    6. Regulate contract hiring: Registration of contractors and a statutory grievance route for contract workers gives them a channel short of street protest, addressing the absence of any union or employer of record.
    7. Institutionalise a protest response protocol: A published standard for how the police respond to a peaceful assembly, applied uniformly, would end the disparity between the assurance given at Jantar Mantar and the crackdown at Noida.

    Matching Previous Year Question

    “[2023] Consider the following statements: 1. According to the Constitution of India, the Central Government has a duty to protect States from internal disturbances. 2. The Constitution of India exempts the States from providing legal counsel to person being held for preventive detention 3. According to the Prevention of Terrorism Act, 2002, confession of the accused before the police cannot be used as evidence. How many of the above statements are correct? (a) Only one (b) Only two (c) All three (d) None Answer: (a)”

  • Early Closure of the FCNR(B) Swap Window and the Cost of Absorbing Dollars

    Why in the News

    The Reserve Bank of India (RBI) advanced the closure of the Foreign Currency Non-Resident (Bank), or FCNR(B), swap window by a month, and the RBI Governor defended the move on 19 August 2026 as a calibrated and data driven response rather than a reversal. The decision exposes a shift in the objective of India's forex defence, from maximising dollar inflows to managing the rising domestic cost of absorbing them.

    What is the FCNR(B) deposit and what was the swap window?

    1. The deposit: FCNR(B) deposits allow non residents to hold money in an Indian bank in the foreign currency itself, so the depositor faces no rupee exchange risk on the principal.
    2. Permanent availability: These deposits are available at all times and are a standing category of non resident deposit, not a temporary scheme.
    3. The temporary swap facility: In June 2026 the RBI opened a temporary window allowing banks to swap these foreign currency deposits with the central bank, with the RBI bearing the full currency risk on them.
    4. What the window did: By taking the currency risk off bank balance sheets, the facility made it commercially attractive for banks to mobilise fresh foreign currency deposits and convert them into rupee resources.

    What are External Commercial Borrowings?

    1. Foreign currency loans to Indian entities: External Commercial Borrowings (ECBs) are commercial loans raised by eligible Indian resident entities from recognised non resident lenders, governed by RBI limits on amount, maturity, end use and all in cost.

    What are Overseas Foreign Currency Borrowings?

    1. Bank borrowing abroad: Overseas Foreign Currency Borrowings (OFCBs) are foreign currency funds raised abroad by Indian banks themselves, typically through their overseas branches, and brought back to support domestic foreign currency lending and liquidity.

    What is sterilisation?

    1. Neutralising the rupee side of a dollar purchase: Sterilisation is the operation by which a central bank absorbs the rupee liquidity it releases when it buys foreign currency, using instruments such as open market sales of government securities or cash reserve ratio changes, so that the forex purchase does not add to domestic money supply.
    2. Why it has a cost: The central bank earns a low return on the dollars it holds and pays a higher domestic rate on the instruments used to absorb the rupees, and that spread is the sterilisation cost, which rises the longer the position is held.

    Why did the RBI advance the closure of the window?

    1. Inflows exceeded expectations: Inflows had been stronger than the RBI and most market participants had expected, so the quantity objective of the facility was met ahead of schedule.
    2. Diminishing marginal utility of each dollar: The Governor stated that there is a diminishing marginal utility of every dollar that is swapped, because each additional dollar adds less to an already adequate reserve and inflow position.
    3. Rising marginal cost: At the same time there is an increasing marginal cost, because the rupee liquidity created has to be sterilised for a longer period, and that cost accumulates with the size and duration of the position.
    4. A decision from strength: The closure was taken from a position of strength rather than under stress, and forms part of the RBI's wider external sector management.
    5. Not a reversal: The Governor stated that it would not be correct to call it a U turn, that it is rather a calibration, and that the move demonstrated the central bank's ability to remain flexible and data dependent amid rapidly changing conditions.

    Does an early closure amount to a policy reversal or a calibration?

    1. The criticism: Remarks made after the Monetary Policy Committee meeting of 5 August 2026 were read by the market as ruling out an early closure, so bringing the date forward within two weeks was read as a reversal of stated guidance.
    2. The defence on wording: The Governor pointed to the use of the words as of now in the statement that there was no proposal to advance the last date, which conditioned the guidance on the information available at that moment.
    3. The defence on process: The RBI had also said it would keep stakeholders informed of any decision, which on the central bank's reading indicated that an early closure had not been ruled out.
    4. The underlying trade off: Data dependence requires a central bank to change course when the data changes, while forward guidance requires it to keep its word, and the two objectives pull against each other whenever conditions move faster than the guidance horizon.
    5. Why the distinction matters commercially: Banks and depositors price fixed tenure instruments against the announced window, so an advanced closure imposes a real cost on those who planned against the earlier date, regardless of how the change is described.

    What do the three schemes mean for India's balance of payments?

    1. The combined expectation: The RBI expects the three schemes together, FCNR(B), ECBs and OFCBs, to attract at least $80 billion.
    2. What the number signals: The Governor stated that this reflects the country's strong macroeconomic fundamentals and would further strengthen the balance of payments.
    3. The channel: All three are capital account inflows, so they finance the current account deficit and add to reserves without requiring an improvement in the trade balance itself.
    4. The currency backdrop: The rupee stood at 95.76 to the United States dollar and the Indian basket crude oil price at $92.11 a barrel as of 18 August 2026, which is the pressure the inflows are being mobilised against.
    5. The market backdrop: The Sensex closed at 76,909.68, down 325.78 points or 0.42%, and the Nifty at 24,078.30, down 76.60 points or 0.32%, on the day the remarks were made.

    What did the Governor prescribe for Indian banks to reach global scale?

    1. The stated ambition: The Prime Minister has set out the objective of having an Indian bank among the world's top five, and the Governor stated that Indian banks have the scale and ability to achieve a larger global footprint and are on the right path.
    2. Governance and institutional strength: Banks must continue improving governance and institutional strength and build a sound risk management culture.
    3. Customer trust: They must sustain good customer service and retain customer trust, which the Governor listed as a distinct requirement rather than a consequence of the others.
    4. Technology and cost: They need to invest continuously in technology, reduce costs, improve efficiency and expand their reach.
    5. People: They must continuously train and equip their staff to adapt nimbly to a growing economy and a fast evolving financial system.
    6. On mergers: Asked whether bank mergers would hasten the process, the Governor said what is needed is a good, strong banking system with healthy competition, that the government merged a few banks earlier, and that whether there is a case for further mergers is a call the government can take.

    Challenges to the RBI's Forex Inflow Schemes and External Sector Management

    1. Sterilisation cost accumulates on the central bank's own balance sheet: Every dollar absorbed requires rupee liquidity to be withdrawn at a domestic rate higher than the return earned on reserves, and the spread is a direct cost. e.g. sustained open market sales of government securities to absorb liquidity push up domestic yields at the same time as the government is running a large borrowing programme.
    2. The inflows are debt creating, not equity: ECBs, OFCBs and FCNR(B) deposits all create a repayment obligation in foreign currency, unlike foreign direct investment, so they improve the balance of payments today at the cost of a redemption cliff later. e.g. the $34 billion FCNR(B) mobilisation of 2013 produced a concentrated redemption in late 2016 that the RBI had to manage through a pre announced forward book.
    3. Currency risk transfers to the central bank, not away from the system: Under the swap facility the RBI bears the full currency risk, so a sharp rupee depreciation converts a banking sector exposure into a public balance sheet loss. e.g. with the rupee at 95.76 to the dollar, every further rupee of depreciation raises the rupee cost of returning the same dollar principal.
    4. Guidance reversals raise the risk premium on future schemes: Advancing a closure date after indicating no such proposal makes participants discount the next announced window. e.g. banks that had built deposit mobilisation campaigns around the original closure date carry stranded acquisition costs.
    5. Inflows can reverse faster than they arrived: Non resident deposits and portfolio linked borrowings respond to interest rate differentials and can exit within a quarter. e.g. foreign portfolio investors withdrew a record of about Rs 1.66 lakh crore from Indian markets in 2025.
    6. Oil dominates the current account the schemes are financing: India imports the bulk of its crude requirement, so a rise in the crude price widens the deficit faster than capital inflows can be mobilised. e.g. the Indian basket price at $92.11 a barrel on 18 August 2026 sits well above the levels around which recent import bills were budgeted.
    7. Tariff shocks can undercut the export side simultaneously: Trade restrictions imposed by a major partner reduce export earnings at the same time as capital inflows are being courted. e.g. the imposition of tariffs of up to 50% on Indian goods by the United States in August 2025 hit textiles and auto components, which are labour intensive export earners.
    8. Concentration of banking scale can weaken competition: Pursuing a top five global bank through further mergers reduces the number of competing lenders, which the Governor himself flagged by insisting on healthy competition. e.g. the amalgamation of ten public sector banks into four with effect from 1 April 2020 cut the number of public sector banks from 27 in 2017 to 12.

    Conclusion

    The early closure of the FCNR(B) swap window is best read not as a change of view on the rupee but as the point at which the RBI judged the marginal cost of absorbing another dollar to exceed its marginal benefit. With the three schemes expected to deliver at least $80 billion, the quantity objective is largely met, and the residual task is managing the sterilisation cost of the liquidity already created. The open question is whether the communication cost of advancing an announced date will raise the price of the next facility the RBI needs to open.

    India's External Sector: Capital Flows and the Rupee

    Source: Backgrounder, External Sector_ FDI,FPI, Weakening Rupee against Dollar.docx

    1. Foreign Direct Investment: Foreign Direct Investment (FDI) is investment made to acquire a lasting interest and significant control over an enterprise, defined as 10% or more of the post issue paid up equity capital of a listed company, or any stake in an unlisted company.
    2. Foreign Portfolio Investment: Foreign Portfolio Investment (FPI) is investment in financial assets for short term financial gain without control, defined as less than 10% of the paid up equity capital of a listed company.
    3. Divergent stability: FDI is long term, strategic and often tied to physical assets such as factories, while FPI is highly liquid, passive and prone to sudden reversals during global stress.
    4. Split regulation: FDI is regulated primarily by the RBI under the Foreign Exchange Management Act and by the Department for Promotion of Industry and Internal Trade through the Consolidated FDI Policy, while FPI is regulated by the Securities and Exchange Board of India under the SEBI (Foreign Portfolio Investors) Regulations, 2019.
    5. FDI entry routes: Investment enters either through the automatic route, requiring no prior approval and only reporting to the RBI, or the government approval route requiring prior clearance, for example food retail and defence above 74%.
    6. Prohibited sectors: FDI is barred in atomic energy, gambling and lotteries, chit funds and Nidhi companies, real estate other than townships and special economic zones, and tobacco.
    7. Recent flow stress: Net FDI turned negative for three consecutive months even as gross inflows remained strong, driven by higher outward direct investment by Indian companies and high repatriation by foreign companies operating in India.
    8. The harvest phase: Many investments made in the early 2000s have reached a stage where funds prioritise profit booking over expansion, so repatriation rises without any deterioration in the investment climate.
    9. Portfolio outflow scale: FPIs recorded a record outflow of about Rs 1.66 lakh crore, roughly $18.9 billion, in 2025, the largest since FPI investment began in India.
    10. Financialisation of FDI: A growing share of FDI is routed through Alternative Investment Funds rather than direct industrial equity, so headline FDI increasingly behaves like volatile portfolio money and delivers less technology transfer.
    11. Round tripping: A large share of inflows still originates from Mauritius and Singapore, which points to tax arbitrage rather than fresh industrial capital and inflates the headline number relative to its productive impact.

    Statutory and Regulatory Framework Governing India's External Sector

    1. Foreign Exchange Management Act, 1999: Replaced the earlier control based regime and governs all current and capital account transactions, with the RBI as the administering authority.
    2. Section 6 of the Foreign Exchange Management Act, 1999: Empowers the RBI, in consultation with the Union Government, to specify the permissible classes of capital account transactions and the limits on them, which is the source of the FCNR(B), ECB and OFCB frameworks.
    3. Reserve Bank of India Act, 1934: Vests the RBI with the management of the country's foreign exchange reserves and with the issue and regulation of currency.
    4. Foreign Exchange Management (Deposit) Regulations, 2016: Govern non resident deposit accounts, including the FCNR(B), Non-Resident External and Non-Resident Ordinary categories.
    5. External Commercial Borrowings Master Direction of the RBI: Fixes eligible borrowers, recognised lenders, minimum average maturity, all in cost ceilings and permitted end uses for ECBs.
    6. Prevention of Money Laundering Act, 2002: Applies reporting and beneficial ownership requirements to cross border financial flows through banks and market intermediaries.
    7. SEBI (Foreign Portfolio Investors) Regulations, 2019: Govern registration, categorisation and investment limits for foreign portfolio investors in Indian securities.
    8. Consolidated FDI Policy of the Department for Promotion of Industry and Internal Trade: Codifies sectoral caps, entry routes and conditionalities for foreign direct investment.

    Government and Central Bank Initiatives to Manage External Sector Stress

    Source: Backgrounder, External Sector_ FDI,FPI, Weakening Rupee against Dollar.docx

    1. Open market operation purchases of government securities: A programme of about Rs 2 trillion in open market purchases, conducted in tranches, was used to offset the domestic cash crunch caused by portfolio investors pulling out of Indian equities.
    2. Dollar rupee swap and forex sales: A $10 billion dollar rupee swap auction, alongside direct sale of dollars, was used to prevent the rupee from crashing through a threshold level during a period of dollar shortage.
    3. Trade diversification through free trade agreements: The India European Union Free Trade Agreement and the India United Kingdom Comprehensive Economic and Trade Agreement are being used to reduce dependence on a single dominant export market.
    4. National Single Window System: Integrates 32 central departments and more than 25 States into a unified clearance portal to reduce approval delays that deter foreign investors.
    5. Jan Vishwas amendments: Decriminalisation of a large set of minor industry offences and removal of imprisonment for technical violations, aimed at reducing the perception of regulatory risk.
    6. New labour codes: Nationwide implementation of the four labour codes to simplify compliance on wages and social security for foreign investors.
    7. Beneficial ownership screening: Stricter beneficial ownership checks and portal upgrades to ensure incoming FDI brings permanent technology rather than tax arbitrage capital.

    Key Facts about India's Foreign Exchange Framework

    1. The rupee stood at 95.76 to the United States dollar and the Indian basket crude oil price at $92.11 a barrel as of 18 August 2026.
    2. The three schemes of FCNR(B), ECBs and OFCBs are together expected to attract at least $80 billion.
    3. India follows a managed float exchange rate regime, in which the rupee's external value is market determined and the RBI intervenes only to curb excessive volatility, not to defend a level.
    4. India's exchange rate arrangement is classified by the International Monetary Fund on the basis of observed intervention behaviour, not on any officially announced peg.
    5. The Foreign Exchange Management Act, 1999 replaced the Foreign Exchange Regulation Act, 1973, converting foreign exchange violations from criminal offences into civil contraventions.
    6. Non resident Indians hold rupee denominated deposits through Non-Resident External and Non-Resident Ordinary accounts, and foreign currency denominated deposits through FCNR(B) accounts.
    7. Portfolio investors withdrew a record of about Rs 1.66 lakh crore, roughly $18.9 billion, from Indian markets in 2025.
    8. Foreign direct investment is defined at a threshold of 10% or more of the post issue paid up equity capital of a listed company, the internationally standard cut off separating direct from portfolio investment.

    Back2Basics: India's Foreign Exchange Reserves

    1. What they are: Foreign exchange reserves are external assets held and controlled by the RBI that are readily available to finance a balance of payments gap and to intervene in the currency market.
    2. Four components: Reserves comprise foreign currency assets, gold, Special Drawing Rights held with the International Monetary Fund, and the Reserve Tranche Position with the Fund.
    3. Foreign currency assets: The largest component, held mainly in sovereign bonds, treasury bills and deposits with other central banks and the Bank for International Settlements, denominated chiefly in United States dollars, euros, pounds sterling and yen.
    4. Gold: Held partly domestically and partly in custody abroad, and revalued periodically, so movements in the gold price alone change the headline reserve number without any transaction.
    5. Special Drawing Rights: An international reserve asset created by the International Monetary Fund, allocated to members in proportion to their quota, whose value is set from a basket of five currencies comprising the United States dollar, euro, Chinese renminbi, Japanese yen and pound sterling.
    6. Reserve Tranche Position: The portion of a member's quota subscription paid in reserve assets, which the member may draw on from the Fund without conditions.
    7. Adequacy measures: Reserve adequacy is judged by the number of months of imports covered, by the ratio of reserves to short term external debt on residual maturity, and by the ratio of reserves to broad money.
    8. The forward book: The RBI's net forward position in the currency market is disclosed separately, because outstanding forward sales are a claim on future reserves that the headline number does not capture.
    9. Custody and disclosure: Reserve data are published weekly in the RBI's Weekly Statistical Supplement, with the currency composition disclosed with a lag in the half yearly report on foreign exchange reserves.

    Challenges in India's External Sector

    Source: Backgrounder, External Sector_ FDI,FPI, Weakening Rupee against Dollar.docx

    1. Protectionism and policy shocks abroad: Tariff escalation and trade fragmentation divert capital toward friend shoring hubs or back to home markets. e.g. tariffs rising to 50% on key Indian goods in August 2025 directly hit export oriented manufacturing in textiles and automobiles.
    2. Competing destinations with faster approvals: Rival economies offer quicker clearances and wider free trade agreement networks for near shoring investors. e.g. Vietnam, Indonesia and Mexico have absorbed a large share of the China plus one relocation that India was positioned to attract.
    3. Policy unpredictability: Frequent regulatory pivots undermine investor trust in the stability of the rules. e.g. retrospective taxation disputes and changes in e-commerce marketplace rules in 2025 sustained a perception of high regulatory risk.
    4. Cumbersome approvals: Land and environmental clearances remain a bottleneck for greenfield investment. e.g. roughly 200 FDI proposals faced delays as of August 2025 because of screening requirements, and legacy cases such as the abandoned $12 billion POSCO project continue to define the land risk narrative.
    5. Skill mismatch in frontier sectors: Only about 5% of India's workforce is formally skilled, with acute shortages in wafer fabrication and artificial intelligence roles. e.g. semiconductor and electric vehicle investors face a talent gap that constrains how much high value FDI India can absorb.
    6. Weak contract enforcement: Long drawn arbitration and a backlog in commercial courts raise the perceived exit risk for investors. e.g. multi year tax arbitration such as the Cairn Energy dispute is repeatedly cited as evidence of an unpredictable legal exit.
    7. Round tripping and financialisation: A large share of inflows originates in low tax jurisdictions and an increasing share is routed through Alternative Investment Funds rather than industrial equity. e.g. persistent concentration of inflows from Mauritius and Singapore points to tax arbitrage rather than fresh productive capital.
    8. Weak external demand: Cooling global orders discourage export oriented investment in labour intensive sectors. e.g. purchasing managers' index readings in April 2025 recorded a sharp cooling in Indian export orders.

    Way Forward

    1. Publish a sterilisation cost disclosure: Report the carrying cost of intervention alongside the reserve number, so that decisions to open or close swap windows can be evaluated against a visible fiscal and balance sheet cost.
    2. Pre announce redemption management for debt creating inflows: Publish the maturity profile of FCNR(B), ECB and OFCB obligations and the forward cover arranged against them, so that a redemption cliff is priced in advance rather than discovered.
    3. Attach conditions and horizons to guidance: State the data conditions under which a stated window date could change at the time the guidance is issued, so that a data driven adjustment is not read as a reversal.
    4. Rebalance toward equity inflows: Reduce the reliance on debt creating flows by removing sectoral entry frictions and completing single window clearances, so that the same balance of payments support carries no repayment obligation.
    5. Diversify export markets through concluded agreements: Operationalise the European Union and United Kingdom trade agreements at the level of standards, rules of origin and customs procedure, so that the current account improves rather than being financed by capital.
    6. Deepen the onshore rupee derivatives market: Widen participation in exchange traded currency futures and the non deliverable forward segment, so that hedging demand is met onshore and the RBI is not the residual bearer of currency risk.
    7. Reduce the oil exposure structurally: Expand strategic petroleum reserve capacity, ethanol blending and electric mobility so that a $90 a barrel oil price does not automatically translate into an external financing requirement.
    8. Strengthen banks before consolidating them: Prioritise governance, risk management culture and technology investment, as the Governor set out, over amalgamation, so that scale is built on institutional strength rather than on balance sheet addition.

    Matching Previous Year Question

    “[2018, GS3, 15 marks] How would the recent phenomena of protectionism and currency manipulations in world trade affect macroeconomic stability of India?”

  • Punjab’s decade-long journey towards a formal sacrilege law

    Why in the News

    Punjab brought a stringent sacrilege law into force in April 2026 by amending an existing State statute on the ceremonial custody of the Guru Granth Sahib, avoiding the Presidential assent that had defeated three earlier attempts. The route exposes a conflict between a State's determination to legislate on religious sentiment and the constitutional limits set by secularism, equality, proportionality and the division of legislative competence. A challenge to the Act is pending before the Punjab and Haryana High Court.

    What does Punjab's 2026 sacrilege law do?

    1. What it penalises: It punishes sacrilege committed against the Guru Granth Sahib, and covers no other religious scripture.
    2. The sentence it carries: Its most serious provisions carry a mandatory minimum sentence extending to life imprisonment, leaving no room for a judge to calibrate punishment to the facts of a case.
    3. The statute it amends: It amends a pre existing State law concerned specifically with the ceremonial custody of the Guru Granth Sahib, rather than the central penal code.
    4. How it was brought into force: Because the State argued the amendment falls within its own legislative competence, it claimed no Presidential assent was needed, and the Governor's signature brought it into force in April 2026.

    What is the current status of sacrilege law in India?

    1. The central provision: Insulting religion or religious beliefs with deliberate and malicious intent is an offence under Section 299 of the Bharatiya Nyaya Sanhita, 2023, the successor to Section 295A of the Indian Penal Code, 1860.
    2. The settled constitutional position: Section 295A was upheld in Ramji Lal Modi, and the Supreme Court has not revisited that ruling in almost sixty years.
    3. The intent requirement on paper: Conviction requires proof of deliberate and malicious intent, a threshold the court reads into the provision.
    4. Where the practical harm falls: Indian criminal procedure allows a First Information Report to be lodged and an accused arrested well before any court examines whether that intent was present, so the chilling effect operates at the point of complaint, not at the point of conviction.
    5. No standalone national sacrilege statute: There is no separate central law on sacrilege beyond the religious offence provisions of the Bharatiya Nyaya Sanhita, 2023, which is why Punjab has repeatedly attempted a State law.

    Constitutional Provisions Related to Sacrilege, Speech and Secularism

    1. Article 14: Guarantees equality before the law, and permits classification only where an intelligible differentia bears a rational nexus to the law's stated purpose.
    2. Article 19(1)(a): Guarantees freedom of speech and expression to all citizens.
    3. Article 19(2): Permits reasonable restrictions on that freedom in the interests of public order, decency or morality, among other grounds.
    4. Article 21: Guarantees life and personal liberty, which the Supreme Court has read as requiring a just, fair and reasonable procedure.
    5. Article 25: Guarantees freedom of conscience and the free profession, practice and propagation of religion, subject to public order, morality and health, and permits the State to legislate for social welfare and reform even where this cuts against religious custom.
    6. Entry 1, Concurrent List, Seventh Schedule: Places criminal law within the legislative competence of both Parliament and the State legislatures.
    7. Article 254: Provides that a State law repugnant to a central enactment on the same Concurrent List subject is void to that extent.
    8. Article 254(2): Saves such a State law only where it has been reserved for and has received the assent of the President.

    How did Punjab arrive at this law across a decade?

    1. 2016, the first attempt: The then Akali Dal and Bharatiya Janata Party government passed a bill imposing life imprisonment for sacrilege committed specifically against the Guru Granth Sahib. The Centre returned it, objecting that a law protecting only one religion's scripture could not sit easily with India's secular Constitution.
    2. 2018, the second attempt: The succeeding Congress government extended the same life sentence to the Guru Granth Sahib, the Bhagavad Gita, the Quran and the Bible, through a new Section 295AA of the penal code. That Bill was also returned without Presidential assent.
    3. July 2025, the third attempt: The Aam Aadmi Party government introduced the Punjab Prevention of Offences Against Holy Scripture(s) Bill, again covering all four texts, with sentences ranging from ten years to life. It was sent to a select committee and has since been effectively shelved.
    4. April 2026, the successful route: The State abandoned the amendment of the central penal code and instead amended an existing State statute on the ceremonial custody of the Guru Granth Sahib, bringing the law into force on the Governor's signature alone.
    5. The pattern the sequence shows: A State legislature has persistently tried, by one route or another, to entrench a sacrilege code of ever increasing severity, undeterred by repeated constitutional rebuffs.

    Why does a religion specific penal law run into the equality guarantee?

    1. The classification test it must pass: A provision drawing a line between one community's sacred text and every other's needs an intelligible differentia bearing a rational nexus to its stated purpose, the test the Supreme Court set out in State of West Bengal versus Anwar Ali Sarkar.
    2. Why the classification fails on its own terms: The Act's stated purpose is communal harmony, framed in terms of all communities, and singling out one faith's scripture does not serve a purpose framed in terms of all of them.
    3. The objection is not new: By protecting only the Guru Granth Sahib, the 2026 Act revives precisely the objection that sank the 2016 attempt.
    4. The pending litigation: In May 2026, the Anglican Church of India, through its Amritsar bishop, petitioned the Punjab and Haryana High Court arguing that the Act creates a religion specific penal regime violating equality before law, and sought both the quashing of the Act and a stay on its implementation.
    5. The standing wrinkle: The Bench reportedly questioned how a church whose own scripture the Act does not touch could claim to be aggrieved by it, a question that demonstrates the very defect alleged, since a law can discriminate in structure while leaving those it excludes without the conventional standing to challenge it. The petition remains pending.

    Why does the mandatory life sentence raise a proportionality problem?

    1. What the Act does: Its most serious provisions carry a mandatory minimum sentence extending to life imprisonment, removing all sentencing discretion from the trial judge.
    2. The controlling precedent: In Mithu versus State of Punjab, the Supreme Court struck down a different mandatory sentencing provision precisely because it stripped courts of discretion.
    3. The standard applied: Mithu applied the requirement of a just, fair and reasonable procedure that Maneka Gandhi versus Union of India had read into Article 21.
    4. The parallel is close: The earlier case also arose out of Punjab, which makes the comparison with the 2026 Act direct rather than analogical.
    5. Why proportionality matters here: Sacrilege covers conduct ranging from a deliberate desecration to an inadvertent act, and a single fixed maximum sentence prevents a court from distinguishing between them.

    Does the State have the legislative competence to enact this law?

    1. Where the subject sits: Criminal law sits on the Concurrent List, so both Parliament and the State legislature may legislate on it.
    2. The repugnancy rule: Article 254 makes a State law repugnant to a central enactment on the same subject void to that extent, and the Bharatiya Nyaya Sanhita, 2023 carries its own provisions on sacrilege and on outraging religious feeling.
    3. The only saving route: Article 254(2) saves such a State law only where it has received Presidential assent, which is the requirement that defeated the 2016 and 2018 Bills.
    4. How Punjab avoided it: The State amended a pre existing, ostensibly ceremonial statute rather than the Bharatiya Nyaya Sanhita directly, and argued that no assent was therefore needed.
    5. The challenge to that route: A petition before the Punjab and Haryana High Court argues that a life sentence is a matter of criminal law and cannot dodge central scrutiny merely by changing which statute book it sits in.

    Why does the free speech objection survive despite Ramji Lal Modi?

    1. The vagueness of the operative terms: Section 295A and its successor in the Bharatiya Nyaya Sanhita, 2023 rest on terms such as outrage, insult and religious feelings, policed after the fact by whichever officer receives the complaint.
    2. The precedent that should apply: In Shreya Singhal versus Union of India in 2015, the court struck down Section 66A of the Information Technology Act, 2000 in its entirety, holding that criminalising online messages using undefined terms such as offensive and menacing left the provision impermissibly vague, invited arbitrary enforcement and chilled protected speech in violation of Article 19(1)(a).
    3. The terms are no more precise: The words on which the religious offence provisions rest are as undefined as the words the court found fatal in Shreya Singhal.
    4. What the court has not done: It has never brought the Shreya Singhal reasoning to bear on Section 295A, whose constitutionality it settled in Ramji Lal Modi almost sixty years earlier and has not revisited since.
    5. The reason for the gap: The inconsistency reads as reluctance rather than principle, since it is easier to strike down a recent statute governing an unfamiliar medium than to unsettle an eighty year old precedent with a long and emotionally fraught history behind it.
    6. What the vagueness enables: A cartoon, a novel, a documentary or a stray remark on social media can all be made to fit the language of insult without any accompanying threat of actual disorder.

    Major debates surrounding sacrilege law

    1. Secularism as an unamendable limit: Secularism was declared part of the Constitution's unamendable basic structure in S.R. Bommai versus Union of India, precisely so that the State could neither favour a religion nor punish disrespect towards one, and a sacrilege law does the second.
    2. Religious freedom against religious reform: Article 25 protects the practice of religion and at the same time preserves the space for social reformers, sceptics and atheists to challenge religious practice, since the right is subject to public order, morality and health and the State may legislate for reform.
    3. Public order as a threshold or a label: One position requires an actual threat of disorder before speech may be punished, the other treats the giving of offence as itself a disturbance of public order.
    4. Ramji Lal Modi against Shreya Singhal: Two lines of authority now sit in tension, one upholding a vague religious offence provision and the other striking down a vague online speech provision on the same reasoning.
    5. Federal competence against local sentiment: A State legislature responding to local religious sentiment collides with a national criminal code and the Article 254 assent requirement designed to keep criminal law uniform.
    6. Deterrence against chilling effect: Severe sentences are defended as deterrence against desecration, and are opposed on the ground that the harm is inflicted at the stage of arrest, long before any court weighs intent.

    Challenges to enforcing a sacrilege law

    1. Undefined operative terms: Insult and outrage are not statutorily defined, so the same conduct produces prosecution in one district and none in another. e.g. Section 66A of the Information Technology Act, 2000 was struck down in Shreya Singhal in 2015 for exactly this defect.
    2. Arrest precedes adjudication of intent: A First Information Report can be registered and an accused arrested before any court tests the deliberate and malicious intent the offence requires. e.g. the 2026 Punjab Act's life sentence attaches to a charge that a magistrate never has to evaluate before custody begins.
    3. Selective protection invites litigation: Protecting one scripture and not others invites an equality challenge that can stall the law for years. e.g. the Anglican Church of India's May 2026 petition before the Punjab and Haryana High Court, still pending.
    4. No sentencing discretion: A mandatory minimum forces the same punishment on a deliberate desecration and an inadvertent act. e.g. Mithu versus State of Punjab struck down a mandatory sentencing provision for removing exactly this discretion.
    5. Repugnancy risk to the whole statute: A State criminal law that overlaps a central enactment is void to the extent of repugnancy unless it carries Presidential assent, so the entire Act can fall on a procedural ground. e.g. the 2016 and 2018 Punjab Bills were both returned without assent.
    6. Incentive for mob complaint: A severe penalty attached to a subjective standard makes the police complaint itself a weapon against critics, writers and artists. e.g. the returned 2018 Bill would have extended a life sentence to insult of four separate scriptures, multiplying the categories of complainant.
    7. Standing gap for excluded groups: A community whose scripture the law does not cover may be told it is not aggrieved, so the discrimination cannot be tested. e.g. the Punjab and Haryana High Court's question to the Amritsar bishop in the pending petition.

    Conclusion

    Punjab's 2026 Act carries three distinct constitutional infirmities at once: an equality defect under the Anwar Ali Sarkar test, a proportionality defect under Mithu, and a legislative competence defect under Article 254. Each of these is separate from the broader secularism objection that a State may neither favour a religion nor punish disrespect towards one. The petitions challenging the Act remain pending before the Punjab and Haryana High Court, and the next milestone is that court's decision on the quashing and stay applications.

    What is Secularism as a Constitutional Doctrine?

    1. About: Indian secularism requires the State to maintain equal distance from all religions, neither establishing nor favouring one, while retaining the power to regulate the secular aspects of religious practice.
    2. Rationale: It exists to secure equal citizenship in a society of multiple faiths, so that a citizen's legal standing does not vary with religious affiliation.
    3. Its constitutional status: It was declared part of the Constitution's unamendable basic structure in S.R. Bommai versus Union of India, and was written into the Preamble by the Forty second Amendment in 1976.
    4. Its distinguishing feature: Unlike a strict wall of separation, the Indian model allows positive State intervention in religion for social welfare and reform, which Article 25(2) expressly authorises.
    5. Where it is enforced: Articles 25 to 28 supply the operative provisions, and Article 15 and Article 16 bar religious discrimination by the State.

    Key Concerns Regarding Constitutional Secularism

    1. State regulation shading into State preference: The power to reform religious practice can be exercised unevenly across communities, converting regulation into favour.
    2. Religious offence provisions in a secular code: Criminal provisions protecting religious feelings require the State to adjudicate what counts as an insult to faith, a task secularism was meant to keep it out of.
    3. Uneven codification of personal law: Some communities' family law is codified and reviewable while others' is not, producing different legal protection for identically placed citizens.
    4. The essential religious practices test: Courts must decide what is essential to a religion before they may regulate it, drawing judges into theological determination.
    5. Local majoritarian legislation: State legislatures respond to locally dominant religious sentiment, so a nationally uniform standard fragments at the State level.
    6. Enforcement discretion at the police station: Where the offence turns on a subjective standard, the identity of the complainant rather than the conduct determines whether the law is invoked.

    Laws and Rules Governing Speech Restrictions in India

    Source: Backgrounder, Limits on Speech.docx

    1. Constitutional provision: Article 19(1)(a) guarantees free speech and Article 19(2) permits enumerated reasonable restrictions.
    2. Constitutional anchors for hate speech regulation: Article 14 on equality, Article 15 on non discrimination, Article 21 on dignity, Article 51A on the fundamental duty of harmony, and the Preambular value of fraternity.
    3. Bharatiya Nyaya Sanhita, 2023: Section 196 on promoting enmity between groups, Section 197 on imputations prejudicial to national integration, Section 299 on outraging religious feelings, and Section 356 on defamation.
    4. Section 152, effective from 1 July 2024, replaced Section 124A of the Indian Penal Code, 1860 and criminalises acts exciting secession, armed rebellion, subversive activities, separatist feelings or endangering sovereignty, unity and integrity, with punishment extending to life imprisonment.
    5. Representation of the People Act, 1951: Section 123(4) prohibits false statements about candidates during elections, and the Act carries the electoral speech restrictions.
    6. Information Technology Act, 2000 and the Information Technology (Intermediary Guidelines and Digital Media Ethics Code) Rules, 2021: Govern online content, intermediary due diligence and takedown obligations.
    7. Cable Television Networks (Regulation) Act, 1995: Prohibits misleading and prohibited broadcast content under its Programme Code.
    8. Cinematograph Act, 1952: Governs film certification and censorship.
    9. Indecent Representation of Women (Prohibition) Act, 1986: Restricts indecent depiction of women in publications and advertisements.
    10. Kedar Nath Singh versus State of Bihar (1962): Sedition requires both a tendency to create disorder and incitement to violence, and vigorous criticism of government measures is protected.
    11. Shreya Singhal versus Union of India (2015): Distinguishes discussion, advocacy and incitement, protects discussion and advocacy even where unpopular, and holds that vague terms such as annoyance or inconvenience cannot be the basis for restricting speech.
    12. Amish Devgan versus Union of India (2020): Applies a three part contextual test of content, intent of the speaker and harm caused or likely to be caused, with public figures held to a higher standard.
    13. Ashwini Kumar Upadhyay versus Union of India (29 April 2026): The Supreme Court dismissed a batch of petitions seeking new hate speech laws, holding that creating criminal offences belongs exclusively to the legislature and that the existing framework is adequate, the real problem being an enforcement deficit.

    Back2Basics: S.R. Bommai versus Union of India

    1. What it is: A Supreme Court ruling of 1994 delivered by a nine judge bench, arising out of the dismissal of State governments and the imposition of President's Rule under Article 356.
    2. Its holding on federalism: It made the exercise of Article 356 justiciable, requiring the proclamation to rest on relevant material and permitting courts to restore a dismissed government.
    3. Its holding on secularism: It declared secularism a part of the Constitution's basic structure, and therefore beyond the amending power under Article 368.
    4. The consequence for State action: A State government acting against secularism can itself be a ground for action under Article 356.
    5. Why it governs this item: It is the authority for the proposition that the State may neither favour a religion nor punish disrespect towards one, which is the core objection to a scripture specific penal law.
    6. Its broader effect: It sharply reduced the routine use of President's Rule, which had been invoked over a hundred times before the ruling.

    Way Forward

    1. Legislate through the correct route: A State that wishes to create a criminal offence on a Concurrent List subject should reserve the Bill for Presidential assent under Article 254(2) rather than route it through a ceremonial statute.
    2. Protect all scriptures equally or none: A provision framed around communal harmony must apply uniformly across faiths to satisfy the intelligible differentia and rational nexus test.
    3. Restore sentencing discretion: Replacing the mandatory minimum with a graded range lets courts distinguish deliberate desecration from an inadvertent act, meeting the Mithu standard.
    4. Define the operative terms: Statutory definitions of insult and religious feelings, and an express requirement of proximate incitement, would reduce the vagueness Shreya Singhal identified as fatal.
    5. Insert a pre registration safeguard: Requiring a preliminary inquiry or prior sanction before a First Information Report is registered addresses the chilling effect that operates at the point of complaint.
    6. Refer Ramji Lal Modi for reconsideration: A larger bench revisiting the 1957 ruling in the light of Shreya Singhal would settle the doctrinal inconsistency that now runs through religious offence law.

    Matching Previous Year Question

    “[2025, GS2, 15 marks] Examine the evolving pattern of Centre-State financial relations in the context of planned development in India. How far have the recent reforms impacted the fiscal federalism in India?”

  • To build AI for all, bring in more women

    Why in the News

    India ranks among the world’s leading artificial intelligence ready nations, powered by Digital Public Infrastructure and a large innovation ecosystem, while women fall from 43 percent of STEM graduates to 10 percent of senior AI leadership. Every artificial intelligence system begins with data and every dataset begins with people, so a pipeline that loses women at each stage produces systems that reproduce the inequality of the society they learn from.

    What is the AI pipeline?

    1. Definition: The AI pipeline is the full sequence from data collection through model training and deployment to the decisions the model produces.
    2. Not only technical: It is not merely a technological conduit of code, silicon and compute power. It is fundamentally a human pipeline.
    3. It starts early: The pipeline begins before the first line of code is written, at the point where data about people is collected or not collected.
    4. Where the consequences land: Its outputs shape decisions affecting millions, from loan sanction to clinical recommendation.
    5. The failure mode: When people are absent from that data, artificial intelligence inherits those gaps.

    What is Digital Public Infrastructure?

    1. Definition: Digital Public Infrastructure (DPI) is a set of shared, interoperable digital systems, such as digital identity, payments and data exchange layers, built as public utilities on which both government and private services run.
    2. Why it matters here: India’s artificial intelligence readiness is powered by DPI, which also determines whose transactions and records enter the datasets models are trained on.

    What is the India AI Mission?

    1. Definition: The India AI Mission is the national programme providing compute capacity, datasets, application development support, skilling and startup financing for artificial intelligence in India.
    2. Relevance here: It is the vehicle through which artificial intelligence in India can be steered onto the same inclusive path that DPI followed for public welfare.

    Where does the pipeline leak women?

    1. STEM foundation: Women account for 43 percent of India’s STEM graduates, one of the world’s largest pools of women STEM graduates.
    2. Tech workforce: Representation falls to 26 percent in the technology workforce.
    3. Advanced AI roles: Only 12 percent of professionals in advanced artificial intelligence roles are women.
    4. Senior AI leadership: Women hold just 10 percent of senior artificial intelligence leadership positions.
    5. What the sequence shows: At every stage the pipeline leaks talent, lived experience and innovation, so the loss compounds rather than occurring at one bottleneck.

    What causes the leakage?

    1. Access to the network itself: Only 57 percent of women have independent internet access, compared with 72 percent of men.
    2. Nutrition and education: Unequal nutrition and unequal education set the disparity before any career choice is made.
    3. Caregiving responsibilities: Unpaid care work removes women from the workforce at the point where advanced technical careers compound.
    4. Workplace discrimination: Discrimination at work blocks progression from entry level technical roles into advanced ones.
    5. Language barriers: Artificial intelligence education is dominated by English, which excludes those schooled in other languages.
    6. School infrastructure: A student cannot pursue robotics where her school lacks the necessary infrastructure, so the exclusion begins well before higher education.
    7. Influence, not only presence: A woman who becomes an artificial intelligence engineer often remains the only woman in the room, with limited influence in product design.

    What happens to systems built without women in the data?

    1. Credit assessment: A self help group member in rural Bihar applying for a micro-loan is scored by models relying mainly on historical male financial patterns, which may underestimate her creditworthiness.
    2. Maternal health tools: A community health worker in Gujarat depends on artificial intelligence enabled maternal health tools, and training data that fails to reflect local nutrition and health conditions produces inaccurate recommendations affecting maternal care.
    3. The general mechanism: Artificial intelligence automates existing inequalities when trained on incomplete or biased data.
    4. The learning relationship: Artificial intelligence learns from society, so an unequal society produces an artificial intelligence that reflects that inequality.
    5. Why datasets alone are insufficient: Correcting the output requires more than diverse datasets, because the decisions about what to collect and what to optimise are made by the people in the room.

    Does India’s AI readiness conceal an exclusion problem?

    1. The readiness claim: India ranks among the world’s leading artificial intelligence ready nations, powered by Digital Public Infrastructure and a thriving innovation ecosystem.
    2. The contradiction beneath it: India produces one of the world’s largest pools of women STEM graduates, and women steadily disappear as the artificial intelligence pipeline advances.
    3. Formal equality achieved early: When India adopted its Constitution in 1950, it granted women and men universal adult franchise simultaneously, ahead of the sequence followed in several western democracies.
    4. Substantive access lagging: That simultaneous political inclusion sits alongside a 15 percentage point gap in independent internet access between men and women today.
    5. What the measure of leadership should be: True artificial intelligence leadership cannot be measured only by models, investments or patents. It must be measured by whether artificial intelligence reflects India’s diversity of languages, cultures, socio-economic realities and lived experiences.

    What does the corrective path look like?

    1. The precedent of scale: India has already shown how technology can advance public welfare at scale, and the India AI Mission offers the opportunity to ensure artificial intelligence follows the same inclusive path.
    2. Existing women’s institutions: Across rural India, women’s self-help groups have built strong financial ecosystems through collective savings and entrepreneurship, which is usable financial data and an existing delivery network.
    3. Influence changes output: When women occupy positions of influence, the technology itself shifts.
    4. Four roles, not one: Women and marginalised communities must participate as researchers, engineers, entrepreneurs and policymakers, not only as subjects in the training data.
    5. The constitutional foundation: The commitment to simultaneous inclusion continues through Digital Public Infrastructure, which provides the base for building inclusive artificial intelligence.

    Challenges to building inclusive AI

    1. Unpaid care work truncates technical careers: Time available for advanced training and long project cycles is unequal, e.g. the Time Use Survey 2019 recorded women spending 299 minutes a day on unpaid domestic work against 97 minutes for men.
    2. Device and connectivity gap precedes the skills gap: Independent access, not shared household access, determines who generates data, e.g. the National Family Health Survey 2019 to 2021 found 33.3 percent of women had ever used the internet against 57.1 percent of men.
    3. Language exclusion in model and curriculum: English dominant material and models exclude most first generation learners, e.g. Bhashini and BharatGen were set up precisely because Indian language coverage in large models was thin.
    4. Data annotation labour has no design voice: The workers who label training data are outside the decisions the data shapes, e.g. annotation work is outsourced at low wages with no representation in product design.
    5. No bias audit obligation: Automated decision systems face no statutory fairness testing requirement, e.g. the Digital Personal Data Protection Act, 2023 governs consent and processing of personal data but imposes no algorithmic audit duty.
    6. Online safety drives women off the platforms that generate data: Harassment reduces sustained participation, e.g. National Crime Records Bureau data has recorded a rising count of cyber crimes against women.
    7. Absence of sex disaggregated public datasets: Models cannot be checked for differential performance where the data does not record the split, e.g. many administrative datasets used for training carry no reliable gender field.

    Conclusion

    The central point is that the artificial intelligence pipeline is a human pipeline, and the numbers show it losing women at every stage from 43 percent of STEM graduates to 10 percent of senior AI leadership. Diverse datasets alone will not correct outputs shaped by rooms in which women are absent, so participation must extend to research, engineering, entrepreneurship and policymaking. What remains unresolved is the access gap that precedes all of it, with only 57 percent of women holding independent internet access against 72 percent of men.