A report by NREGA Sangharsh Morcha and LibTech India reveals a sharp contraction in the Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS) in 2025-26. Despite a marginal rise in registered households, employment generation, total workdays, and the number of families completing 100 days of work significantly declined. This resulted in an average income loss of ₹1,221 per household. The report highlights the uncertainty surrounding the transition to the new Viksit Bharat - Guarantee for Rozgar and Ajeevika Mission (Gramin) Act, 2025, and criticizes the lack of public consultation for such a major restructuring of employment guarantee programs, raising concerns about rural livelihood security.
- The MGNREGS experienced a significant contraction in 2025-26, with declines in employment generation and total workdays.
- This contraction led to an average income loss of ₹1,221 for each MGNREGS household during the financial year.
- The number of households completing 100 days of work under the scheme declined by 40.5%.
India's data system is fragmented and lacks interoperability, leading to inefficiencies, fiscal leakages, and misinformed decisions. Parliamentary questions often seek basic facts that should already be publicly available, highlighting the issue. NITI Aayog's National Data and Analytics Platform (NDAP) vision document noted incoherence, with ministries failing to use shared standards. Duplication in health records and other databases leads to inflated spending and conflicting estimates. Poor data governance costs India significant economic potential. The solution lies in implementing the National Data Governance Framework Policy (NDGFP) and empowering the India Data Management Office (IDMO) to set binding standards and audit compliance across ministries.
- India's data ecosystem is fragmented and lacks interoperability, leading to inefficiencies, fiscal leakages, and hindering effective policymaking.
- Duplication of records in various sectors, such as health and welfare schemes, results in inflated spending and unreliable data.
- Poor data governance incurs significant economic costs and impacts India's global innovation rankings.
The EU's Ambassador to India, Hervé Delphin, lauded the India-European Union Free Trade Agreement (FTA) as the "mother of all deals," creating a massive joint market. However, he cautioned that burdensome compliance norms and administrative procedures could derail its benefits. Delphin emphasized the need for both sides to ensure smooth implementation with a pro-FTA mindset, preventing customs procedures or conformity requirements from acting as trade barriers. He also noted the FTA's shortcoming in not covering investment liberalization in non-services sectors, which could have provided greater assurance and predictability for investors. The deal is expected to be implemented by early 2027.
- The India-EU Free Trade Agreement (FTA) is hailed as the "mother of all deals," creating a significant joint market.
- EU Ambassador Hervé Delphin warned that burdensome compliance norms and administrative procedures could undermine the FTA's benefits.
- Both India and the EU must ensure smooth implementation with a pro-FTA mindset, avoiding trade barriers disguised as conformity requirements.
The article argues that openness, collaboration, and the ability to attract talent are fundamental to the West's progress, not isolation. It critiques the idea of a "Western civilisation" as a static concept, emphasizing that its strength lies in its dynamic evolution through continuous interaction and adaptation. The author highlights the importance of open systems for innovation, economic growth, and addressing global challenges, contrasting this with the risks of protectionism and isolation. The piece suggests that maintaining leadership requires embracing diversity, fostering collaboration, and upholding institutional openness rather than retreating into a defensive posture.
- Openness, collaboration, and attracting global talent are crucial for the West's continued progress and innovation.
- The concept of "Western civilisation" is dynamic, evolving through interaction and adaptation, not isolation.
- Protectionism and isolation pose significant risks to economic growth and the ability to address complex global challenges.
Tensions between the US and Iran have escalated following a drone attack on a US base in Jordan, killing three American soldiers. The US retaliated with strikes on Iran-backed militias in Iraq and Syria, but avoided direct confrontation with Iran. This cycle of violence, fueled by the Gaza conflict, risks a wider regional war. Iran's actions, often through proxies, aim to challenge US influence and pressure for sanctions relief, while the US seeks to deter further attacks without full-scale war. The situation remains volatile, with both sides needing de-escalation to prevent catastrophic outcomes for the region and global economy.
- Tensions between the US and Iran have intensified after a drone attack killed three US soldiers in Jordan.
- The US responded with retaliatory strikes on Iran-backed militias in Iraq and Syria, but avoided direct attacks on Iran.
- The ongoing Gaza conflict is a major catalyst for the escalating regional violence involving Iran and its proxies.
Karnataka has operationalized India's first specialized grievance redressal mechanism for platform-based gig workers through the Integrated Public Grievance Redressal System (IPGRS). This system allows gig workers to file complaints regarding issues like suspension, termination, unfair penalties, and discrimination, aiming to provide structure and legal recourse. The Karnataka Platform-Based Gig Workers (Social Security and Welfare) Act, 2023, underpins this initiative, providing social security and welfare benefits funded by a 1% cess on platform transactions. Complaints filed via IPGRS are automatically routed to the platform's Internal Dispute Resolution Committee (IDRC) for resolution within 15 working days.
- Karnataka has launched India's first specialized grievance redressal mechanism for platform-based gig workers via the Integrated Public Grievance Redressal System (IPGRS).
- The IPGRS enables gig workers to file complaints concerning issues such as suspension, termination, unfair penalties, and discrimination.
- This system aims to provide structure, transparency, and legal recourse for gig workers who often lack formal employment benefits.
India and Vietnam have elevated their bilateral relationship to an "enhanced comprehensive strategic partnership," with PM Narendra Modi calling Vietnam a major pillar of India's Act East Policy and Vision MAHAsagar. During Vietnamese President To Lam's visit, 13 documents were signed, including MoUs on critical minerals and digital payments. Discussions focused on expanding cooperation in maritime security, defense industry collaboration, and joint research. Both sides acknowledged progress in implementing defense Lines of Credit from India, enhancing Vietnam's defense capabilities. The leaders reaffirmed their shared outlook on the Indo-Pacific, emphasizing rule of law, peace, and stability.
- India and Vietnam have elevated their relationship to an "enhanced comprehensive strategic partnership."
- Prime Minister Modi identified Vietnam as a key pillar of India's Act East Policy and Vision MAHAsagar.
- During Vietnamese President To Lam's visit, 13 documents were signed, including MoUs on critical minerals and digital payments.
This article discusses persistent inequality in India, particularly concerning consumption expenditure and income, despite policy changes like the Bharat-Guaranteed for Rozgar and Ajeevika Mission (Gramin) Bill, 2023. National Sample Survey Organization (NSSO) data indicates higher urban inequality and a persistent rural-urban gap. While overall poverty has declined, growth benefits are not equitably distributed, widening disparities across socio-economic groups, castes, and classes. The analysis suggests current mechanisms are inadequate, potentially leading to social unrest if not properly addressed, emphasizing the need for targeted interventions beyond broad poverty alleviation.
- Inequality in India persists despite policy initiatives like the Bharat-Guaranteed for Rozgar and Ajeevika Mission (Gramin) Bill, 2023.
- NSSO data reveals higher consumption expenditure inequality in urban areas compared to rural, with a significant rural-urban gap.
- Despite overall poverty reduction, economic growth benefits are not equitably distributed across socio-economic groups, castes, and classes.
The Centre has introduced a new Standard Operating Procedure (SOP) for Foreign Direct Investment (FDI) proposals, aiming to accelerate inflows into priority sectors by capping processing time at 12 weeks. The fully digital process mandates the Department for Promotion of Industry & Internal Trade (DPIIT) to disseminate proposals to relevant ministries, RBI, MHA, and MEA within two days. These bodies must submit comments within eight weeks, with internal scrutiny completed within 12 weeks. Delays in responses will be treated as no objection. The SOP also clarifies that no prior approval is needed for increasing foreign equity up to Rs 5000 crore if the percentage of foreign/NRI equity remains unchanged.
- A new SOP for FDI proposals aims to cap processing time at 12 weeks and implement a fully digital process.
- DPIIT will disseminate proposals to relevant ministries, RBI, MHA, and MEA within two days.
- Ministries and other bodies must provide comments within eight weeks, with a 12-week deadline for internal scrutiny.
Rohit Lamba and Raghuram Rajan argue that India risks repeating past mistakes in its AI strategy, becoming a 'tenant of intelligence' rather than a producer. While the new Google AI hub in Visakhapatnam signifies infrastructure development, the core AI models and silicon are foreign-designed, reflecting India's historical focus on outsourcing rather than deep-tech R&D. They highlight India's low R&D intensity (below 1% of GDP) and lack of world-class research universities, contrasting with countries like Korea and Taiwan. The authors warn that relying on diffusion without frontier innovation could compromise India's strategic autonomy and economic future, urging a shift towards building indigenous AI capabilities.
- India's current AI strategy, exemplified by the Google AI hub, risks making it a tenant rather than a producer of intelligence.
- The authors criticize India's historical focus on outsourcing and infrastructure development over deep-tech R&D and indigenous innovation.
- India's R&D intensity remains below 1% of GDP, and it lacks world-class research universities, unlike leading tech nations.
The Indian rupee has been consistently weakening, falling by 5.64% this year and 5% last year, primarily due to the West Asia conflict and capital account pressures. Elevated global crude oil prices, with Brent crude around $113 per barrel, are widening the current account deficit, potentially reaching 2% of GDP in 2026-27. Capital outflows are significant, with foreign portfolio investors withdrawing $21.2 billion this year and $18.9 billion last year. The RBI's efforts to ease stress are challenged by its swelling short dollar book. The delay in adjusting retail fuel prices, coupled with rising commercial LPG costs, threatens to push up retail inflation, worsening growth-inflation dynamics and necessitating delicate macroeconomic management.
- The Indian rupee has significantly weakened, falling over 5% this year and last year.
- The West Asia conflict and high global crude oil prices are key drivers, pushing Brent crude to around $113 per barrel.
- The current account deficit is projected to widen to about 2% of GDP in 2026-27.
The Union Cabinet has approved a five-year mission with an outlay of Rs 5,659 crore aimed at significantly increasing cotton yield in India. This mission will focus on research and development of new high-yielding varieties, adoption of modern farming practices, and providing support to cotton farmers. The initiative seeks to enhance the income of farmers, improve the quality of Indian cotton, and strengthen the textile industry's raw material base. It is a strategic step to make India self-reliant in cotton production and boost its agricultural exports.
- The Union Cabinet approved a five-year mission to boost cotton yield in India.
- The mission has an outlay of Rs 5,659 crore.
- It will focus on R&D for high-yielding varieties and modern farming practices.
The Union Cabinet has given its nod for the establishment of two new semiconductor manufacturing plants with a total investment of Rs 3,936 crore. This decision aligns with India's broader strategy to boost its domestic semiconductor ecosystem and reduce reliance on imports. The initiative is expected to attract further investments in the high-tech manufacturing sector, create skilled jobs, and enhance India's position in the global electronics supply chain. This move is crucial for national security and economic growth, particularly in advanced technology sectors.
- The Union Cabinet approved two new semiconductor manufacturing plants.
- The total investment for these plants is Rs 3,936 crore.
- This initiative aims to strengthen India's domestic semiconductor ecosystem.
The Union Cabinet approved the Emergency Credit Line Guarantee Scheme 5.0 (ECLGS 5.0) to provide credit support of Rs 2.55 lakh crore to industries, particularly MSMEs and airlines, facing distress due to the West Asia conflict. This scheme, modeled on previous Covid-era lifelines, includes Rs 5,000 crore specifically for airlines. With an estimated outlay of Rs 18,000 crore, it aims to ensure additional credit flow, offering 100% guarantee coverage for MSMEs and 90% for non-MSMEs by the National Credit Guarantee Trustee Company Limited (NCGTC). The initiative seeks to maintain operations, protect jobs, and sustain supply chains amidst global uncertainties.
- The Union Cabinet approved ECLGS 5.0 to provide Rs 2.55 lakh crore in credit support, including Rs 5,000 crore for airlines.
- The scheme targets MSMEs and other industries affected by the West Asia conflict, mirroring Covid-era relief measures.
- ECLGS 5.0 offers 100% credit guarantee coverage for MSMEs and 90% for non-MSMEs through NCGTC.
The "Das Adam Smith Problem" refers to the perceived contradiction between Adam Smith's "The Theory of Moral Sentiments" (emphasizing sympathy) and "The Wealth of Nations" (focusing on self-interest). Initially formulated by 19th-century German economists, this problem is now largely considered a misunderstanding by contemporary scholars. They argue that Smith's philosophy forms a coherent whole, uniting ethics and economics through concepts like empathy and the "invisible hand" as a metaphor for societal benefit from individual motivations. The article explains that Smith extended his moral philosophy into economics, viewing markets as extensions of morality, and his two works are compatible, engaging with different points on a spectrum of self-interest and empathy.
- The "Das Adam Smith Problem" highlights the perceived conflict between Adam Smith's works on sympathy and self-interest.
- Modern scholars largely view this "problem" as a misunderstanding, arguing for a coherent philosophical system in Smith's writings.
- Smith's concept of the "invisible hand" is seen as a metaphor for how individual motivations can benefit society when properly directed.
Medical inflation in India is rising exponentially, leading to significant out-of-pocket expenditure (OOPE) for most households, many of whom lack health insurance. The 2025-26 Economic Survey indicated health inflation at 3%, but other reports show 12-13%. Factors contributing to this include costly technological advancements, increased demand due to non-communicable diseases, pharmaceutical inflation, and supply chain disruptions. The article highlights the low public health expenditure (below 2% of GDP) and challenges in regulating private hospital pricing. Suggested solutions include expanding the National List of Essential Medicines and including healthcare services under the Essential Commodities Act, 1955.
- Medical inflation in India is rising significantly, leading to high out-of-pocket expenditure for most households.
- Many Indians lack adequate health insurance, making them vulnerable to medical debt.
- Key drivers of inflation include advanced technology, increased demand, pharmaceutical costs, and supply chain issues.
The article discusses the European Union's Carbon Border Adjustment Mechanism (CBAM), effective January 1, 2026, which imposes a carbon price on imports. It argues that CBAM shifts decarbonisation burden to developing countries while retaining revenue in Europe. India should implement an India Border Adjustment Mechanism (IBAM) to impose its own carbon-based charge on CBAM-covered exports, ensuring revenues stay in India. This IBAM should be developed through Annex 14-A of the India-EU FTA to be recognized as a "carbon price paid in the country of origin" under CBAM Article 9, preventing double-pricing and financing India's green transition.
- The EU's Carbon Border Adjustment Mechanism (CBAM) will impose a carbon price on imports starting January 1, 2026, raising concerns about revenue retention.
- India should introduce an India Border Adjustment Mechanism (IBAM) to collect carbon-based charges on its exports, keeping the revenue domestically.
- IBAM should be designed in coordination with the EU through Annex 14-A of the India-EU FTA to ensure it's recognized under CBAM Article 9.
OPEC, once a dominant force in global oil markets, is facing internal divisions and external pressures that are eroding its influence. The cartel's unity has been challenged by members' differing economic needs and production capacities, with countries like the UAE seeking greater autonomy. The rise of non-OPEC producers, particularly the U.S. shale industry, and the global shift towards renewable energy further complicate OPEC's role. While the organization has adapted by forming OPEC+, its ability to stabilize markets and dictate prices is diminishing, leading to increased volatility and uncertainty in the oil sector. This analysis suggests a future where OPEC's power may continue to wane, impacting global energy geopolitics.
- OPEC's influence is diminishing due to internal divisions and external pressures.
- Members like the UAE seek greater autonomy, challenging the cartel's unity.
- The rise of non-OPEC producers, especially U.S. shale, and renewable energy shift impact OPEC.
The UAE's recent decision to withdraw from OPEC+ and OPEC stems from a desire for greater autonomy over its oil production and export policies, aiming to maximize revenue and pursue its own economic agenda. The UAE has historically sought higher production quotas than allocated by OPEC, viewing the restrictions as hindering its economic growth and diversification efforts. While the move offers the UAE flexibility, it could destabilize global oil markets and weaken OPEC's influence. The UAE's strategic partnerships and its role as a regional economic hub suggest a calculated move to assert its economic sovereignty and adapt to evolving global energy dynamics.
- The UAE withdrew from OPEC+ and OPEC to gain autonomy over oil production and export policies.
- The UAE has historically sought higher production quotas than allocated by OPEC.
- The move aims to maximize revenue and support its economic diversification agenda.
Mazagon Dock Shipbuilders Limited (MDL) acquired a 51% stake in Sri Lanka's Colombo Dockyard PLC (CDPLC) for ₹250 crore, marking India's first international shipyard acquisition. This move significantly boosts India's maritime presence in the Indian Ocean Region and is strategically and commercially important for both nations. The acquisition, which infused $40 million into CDPLC, has addressed financial strains faced by the Sri Lankan company and expanded its access to global markets and Indian clients. MDL plans to expand ship repair operations and explore opportunities in other Sri Lankan ports, while clarifying that CDPLC will remain commercial and not be used for defence manufacturing.
- Mazagon Dock Shipbuilders Limited (MDL) acquired a 51% stake in Colombo Dockyard PLC (CDPLC) in Sri Lanka.
- This is India's first international shipyard acquisition, enhancing its maritime presence in the Indian Ocean Region.
- The acquisition, valued at ₹250 crore, has revitalized CDPLC, which faced financial difficulties.
Rohit Jain has been appointed as a Deputy Governor of the Reserve Bank of India (RBI) for a three-year term, replacing T. Rabi Sankar, whose extended tenure ended on Saturday. Mr. Jain, currently an Executive Director at the RBI, was approved by the Appointments Committee of the Cabinet. As per the RBI Act, 1934, the RBI is mandated to have four Deputy Governors, with specific roles for two from within the ranks, a commercial banker, and an economist. This appointment ensures the continuity of leadership in the central bank's monetary policy and regulatory functions.
- Rohit Jain has been appointed as RBI Deputy Governor for a three-year term.
- He replaces T. Rabi Sankar, whose extended tenure ended.
- Mr. Jain was previously an Executive Director at the RBI.
India's Goods and Services Tax (GST) revenue hit an all-time high of ₹2.43 lakh crore in April 2026, marking an 8.7% increase over the previous year. This surge was primarily attributed to a nearly 26% growth in collections from imports, while domestic sales collections grew at a slower rate of 4.3%. Tax experts noted that April collections, reflecting March activity, typically peak due to financial year-end targets. Despite global uncertainties, this performance indicates a resilient GST regime, with net collections standing at ₹2.11 lakh crore after refunds.
- GST revenue for April 2026 reached an all-time high of ₹2.43 lakh crore, showing an 8.7% year-on-year growth.
- The significant growth was largely attributed to a nearly 26% increase in collections from imports.
- Domestic sales collections grew at a slower rate of 4.3% to ₹1.85 lakh crore.
The UAE has withdrawn from OPEC and OPEC+, a cartel it joined in 1967, seeking autonomy to increase oil exports. As OPEC's fourth-largest producer and third-largest exporter, the UAE aims to funnel higher revenues into infrastructure and diversification projects. This move is also driven by frustration over the lack of cartel-wide coordination in responding to Iran's missile and drone attacks on Gulf oil facilities, and differences with Saudi Arabia on external interventions in Yemen and Sudan. The UAE also seeks closer ties with Israel. The exit reflects a structural issue for OPEC, whose global crude share dropped to 36.7% in 2025, and whose pricing power has shifted to American producers. For net oil-importing countries like India, the immediate threat is not OPEC's unravelling but the "double blockade" in the Strait of Hormuz and the fragile Iran-U.S. ceasefire.
- The UAE has withdrawn from OPEC and OPEC+ to gain autonomy in increasing oil production and exports.
- The decision is partly influenced by the UAE's frustration with OPEC's lack of coordinated response to Iranian attacks on Gulf oil facilities.
- Differences with Saudi Arabia on regional interventions and closer ties with Israel also contributed to the UAE's move.
India concluded a Free Trade Agreement (FTA) with New Zealand in December 2025, marking a significant shift in its foreign trade policy towards strategic, high-velocity partnerships. This FTA, one of India's fastest, offers a first-mover advantage in Oceania and signals India's efficiency in trade diplomacy. Key wins include talent mobility provisions like annual quotas for professional visas and work-and-holiday visas, and international recognition of AYUSH systems. The agreement also commits to $20 billion in capital inflow over 15 years in high-priority sectors, supporting the "Make in India" programme. Crucially, India successfully shielded its sensitive dairy sector while securing market access for high-value dairy products. The FTA also ensures protection for Indian Geographical Indication products and establishes India as a logistical and regulatory reference point in the South Pacific.
- India concluded a Free Trade Agreement (FTA) with New Zealand in December 2025, reflecting a strategic shift in its trade policy.
- The FTA includes significant provisions for talent mobility, such as professional and work-and-holiday visas, and mutual recognition of traditional health systems.
- It anticipates a capital inflow of $20 billion over 15 years into high-priority sectors in India, bolstering the "Make in India" initiative.