29 November 2025

• India’s GDP grew 8.2% in Q2 FY26 — six-quarter high.
• Growth driven by manufacturing and services, despite low nominal GDP (8.7%).
• Released days after IMF again rated India’s national accounts ‘C’.
• Govt revises FY26 growth outlook to 7%+.

Key Points

• Q2 real GDP growth: 8.2%, higher than Q1’s 7.8% and the previous year’s 5.6%.
• First-half FY26 GDP growth: 8%.
• Nominal GDP growth: 8.7% vs. earlier projections of ~10.1%.
• Fiscal deficit risks: Lower nominal growth complicates achieving the 4.4% target.
• Manufacturing: 9.1% (helped by low base of 2.1%).
• Services: 9.2%, with financial & real estate services growing at 10.2% (nine-quarter high).
• PAD (Public administration, defence etc.) grew 9.7%, despite an 11.2% contraction in GoI non- interest revenue expenditure.
• Agriculture: 3.5%, slower than last year.
• Opposition flagged concerns over low deflator (0.5%), weak GFCF, and reliability of national accounts.
• GoI cites stable inflation, public capex, and reforms for strong numbers.

Static Linkages

• GDP vs GVA concepts – distinction between income-side and expenditure-side measures.
• Base effect – influence of previous year’s low/high values on current growth rates.
• GDP Deflator – ratio of nominal to real GDP; key inflation measure.
• Fiscal deficit – difference between total expenditure and revenue; tied to nominal GDP.
• GFCF (Gross Fixed Capital Formation) – indicator of investment demand.
• Sectoral classification of economy: primary, secondary, tertiary.
• National Income Accounting – CSO/MOSPI’s role.
• Counter-cyclical public expenditure – stabilisation function of the state (Keynesian view).

Critical Analysis

• Pros
  • Broad-based growth.
  • Strong corporate performance.
  • Public capex and stable inflation support momentum.
• Concerns
  • Low nominal GDP hides weak underlying activity.
  • Deflator distortion → inflation experience vs official data mismatch.
  • Weak private investment & slowing agriculture.  
  • IMF ‘C’ rating signals data quality issues.

Way Forward

• Improve national accounts methodology & transparency.
• Incentivise private investment via easier credit and regulatory reforms.
• Strengthen agriculture productivity to boost rural demand.
• Maintain calibrated fiscal consolidation.
• Continue public capex to crowd-in private sector.

IMPARTIALITY OF GOVERNORS

KEY HIGHLIGHTS

• Recent Supreme Court judgment on the role of Governors and the Constitution Bench advisory on the 16th Presidential Reference has revived debates on:
  • Governor’s discretion
  • Assent/withholding of Bills  
  • Federal balance
• The debate gains significance against increasing instances of Governors in Opposition-ruled States delaying Bills, withholding assent, or acting outside the aid- and-advice framework.
• Constituent Assembly debates (1947–1949), particularly Dr. B.R. Ambedkar’s clarifications, are being revisited to understand the original intent.
• Concerns echo K.R. Narayanan’s remark: “We must ask whether the Constitution failed us, or we failed the Constitution.”

Key Points

• Constituent Assembly members feared Governors would become agents of the Centre, similar to the 1935 Act’s Governors.
• Ambedkar’s emphatic stance:
  • Governor is a “purely constitutional Governor”, not rival to an elected ministry.
  • Discretion is “very limited” — mainly when appointing a CM if no clear majority exists.
  • Governor cannot ‘sit in judgment’ over Bills; assent/withholding is not discretionary, except in specific constitutional cases.
• Reservation of Bills for the President is not a general veto but applicable only when:
  • The Bill threatens Centre-State relations, or
  • Violates constitutional provisions.
• Ambedkar insisted that during emergencies too, Governors act on aid and advice of the Council of Ministers. Current tensions arise from Governors interpreting “as soon as possible” as “as late as possible”.
• Courts have been criticised for not fully upholding the constitutional spirit intended by framers.

Static Linkages

• Article 153 – Governor for each State.
• Article 154 – Executive power vests in Governor (to be exercised through CoM).
• Article 163 – Governor to act on aid and advice except where Constitution expressly provides discretion.
• Article 200 – Governor’s assent to Bills; withholding; reservation for President.
• Government of India Act, 1935 – Governor had overriding discretionary powers (explicitly rejected by CA).
• Sarkaria Commission & Punchhi Commission – Governor must be a neutral constitutional figure; discretionary power to be sparingly used.
• Basic Structure – Federalism, parliamentary democracy.

Critical Analysis

• Pros (when role is constitutional)
  • Maintains stability during political uncertainty.
  • Protects constitutional provisions where needed.
• Concerns
  • Political bias undermines federalism.
  • Delays in assent disrupt governance.
  • Judicial inconsistency on Governor’s powers.
  • Misinterpretation of “discretion” leading to overreach.
• Stakeholder View
  • States: Alleged interference.
  • Governors: Claim constitutional scrutiny.
  • Courts: Expected to clarify intent but recent rulings questioned.

Way Forward

• Define discretionary powers clearly.
• Mandate timelines for assent.
• Follow constitutional conventions strictly.
• Strengthen CM–Governor coordination.
• Judiciary must uphold original constitutional intent.
• Promote cooperative federalism.

DISASTER RESPONSE AND FEDERALISM

• The July 2024 Wayanad landslides killed nearly 300 people; Kerala estimated losses at ₹2,200 crore, but the Centre released only ₹260 crore.
• The gap between States’ assessed needs and Central disbursements is widening, raising concerns of centralised, conditional disaster finance.
• Similar mismatches occurred in Tamil Nadu (Gaja 2018), Karnataka (2019 floods), and Himachal–Uttarakhand disasters.

Key Points

• Disaster funding follows the DM Act 2005 with SDRF (75:25 / 90:10) and NDRF (100% Union).
• Compensation norms outdated: ₹4 lakh for death, ₹1.2 lakh for house loss.
• No statutory definition of “severe calamity”, enabling discretion.
• Aid release not automatic; multi-layered approvals cause delays.
• Finance Commission criteria weak—use population/area, not hazard-specific data.
• Kerala’s “unspent SDRF” cited by Centre often reflects committed, not idle, funds.
• SDRF allows only immediate relief, not reconstruction → States remain fiscally strained.

Static Linkages

• Art. 280 – Finance Commission role in disaster financing.
• Concurrent List – Disaster management.
• Art. 275 – Grants-in-aid. Cooperative federalism debates in Constituent Assembly.
• Sendai Framework 2015–30 – data- driven disaster finance.

Critical Analysis

• Strengths
  • Predictable SDRF structure; uniform norms; FC oversight.
• Issues
  • Growing central discretion in NDRF releases.  
  • Outdated norms fail to reflect real costs.
  • Delayed fund flows during peak disaster periods.
  • Misaligned allocation criteria → high- vulnerability States underfunded.
  • Fiscal pressure on States amid rising climate disasters.
  • Cooperative federalism shifting to negotiated federalism.
• Perspectives
  • States want timely, rule-based aid.
  • Centre emphasises utilisation and accountability.
  • Citizens face prolonged vulnerability due to delays.

Way Forward

• Update relief norms to current price levels. 
• Adopt objective triggers: rainfall thresholds, fatalities/million, loss-to-GSDP.
• Statutorily define “severe calamity.”
• Make NDRF support automatic, not approval- based.
• Build disaster vulnerability index using IMD– NDMA–ISRO data.
• Keep assistance grant-based, not loan-based.
• Allow SDRF flexibility for livelihood restoration.
• Explore risk-pooling insurance models (Mexico, Caribbean).
• Make federal disaster finance climate-resilient.

• IMF’s 2024 review gave India’s national accounts a ‘C’, indicating data gaps affecting economic surveillance.
• Key concerns: 2011-12 base year, weak informal sector capture, outdated CPI/IIP series.
• Government revising base years for national accounts, CPI, IIP; new series due early 2026.
• Grade puts India alongside China — raising questions on data reliability.

Key Points

• Outdated base year distorts GDP, GVA, consumption and investment estimates.
• CPI’s ‘B’ grade also due to old base year + high food weight.
• Informal sector underestimation remains the largest structural weakness.
• MCA-21 improved corporate data, but informal activity remains inadequately mapped.
• GST data integration in the next series expected to enhance output measurement.
• Data inaccuracies weaken RBI’s monetary policy, fiscal planning and welfare design.

Static Linkages

• GDP follows UN SNA 2008 standards.
• NSC recommends base year revision every 5 years.
• CPI & IIP compiled by NSO.
• Inflation targeting uses CPI-Combined (RBI Act amendment).
• Informal sector defined using ILO norms.

Critical Analysis

• Strengths
  • Robust statistical ecosystem (NSO, surveys).
  • Use of MCA-21 and upcoming GSTN integration.
• Weaknesses
  • Irregular base year revisions.
  • Price index distortions affecting monetary policy.
  • Informal sector largely invisible in GDP.
  • Delayed data releases reduce credibility.
• Stakeholder Views
  • Government: upgrades underway.   
  • RBI: needs accurate inflation data.
  • IMF/Investors: quality gaps affect assessments and risk perception.
  • Citizens: inaccurate data → misaligned welfare and planning.

Way Forward

• Ensure regular base year revision.
• Strengthen informal sector mapping using hybrid survey + administrative data.
• Improve CPI methodology, rationalise food weights.
• Provide statutory backing to NSO for independence (Rangarajan Committee).
• Integrate datasets (GSTN, MCA-21, digital payments).
• Maintain a transparent data release calendar.

TENSE WATERS

Context of the News

• Japan’s new PM Sanae Takaichi stated (Nov 7) that Chinese military action on Taiwan could threaten Japan’s survival, indicating possible military involvement — a departure from Tokyo’s traditional ambiguity.
• China reacted with demands for retraction, seafood import bans, travel advisories, and accusations of planned Japanese missile deployment on Yonaguni Island.
• Chinese Coast Guard intensified patrols around Diaoyu/Senkaku Islands, which Japan says violate its waters.
• Beijing warned Japan that any intervention in Taiwan would be treated as aggression.

Key Points

• China–Japan trade: USD 300+ billion yearly.
• Taiwan under Japanese rule: 1895–1945; returned to Chinese control post-WWII.
• U.S.–Japan Security Treaty binds U.S. to defend Japan.
• Yonaguni lies ~110 km from Taiwan.
• Japan’s new leadership signals a shift to a more assertive security posture.

Static Linkages

• Treaty of Shimonoseki; post-WWII settlements affecting East Asian borders.
• Territorial waters & EEZ under UNCLOS.
• Collective self-defense, security alliances, strategic ambiguity.
• Historical memory shaping regional geopolitics.

Critical Analysis

• Opportunities
  • Clear deterrence messaging in the Taiwan Strait.
  • Strengthens U.S.–Japan security coordination.
  • Could push supply-chain diversification away from China.
• Risks
  • Heightened chance of military miscalculation.
  • Deepens historical mistrust; provokes Chinese retaliation.
  • Economic disruptions due to interdependence.
• Stakeholders
  • China → territorial integrity  Japan → national security
  • U.S. → treaty commitments + balancing role  Taiwan → support without escalation
  • ASEAN → stability concerns

Way Forward

• Activate hotlines and incident-prevention mechanisms.
• Promote regional multilateral maritime dialogue.
• Reaffirm status quo on Taiwan.  
• Expand CBMs in East China Sea.
• Balance deterrence with active diplomacy.

WHERE DO WE DRAW GOOD HEALTH LINES

Context of the News

• A former Canadian High Commissioner to India, David Malone, opted for Canada’s Medical Assistance in Dying (MAiD) programme due to early-stage Alzheimer’s.
• The development reopens debates around autonomy, dignity, medical ethics, euthanasia, and assisted dying, especially as many countries liberalise such laws.
• India allows only passive euthanasia (withdrawal of life support) under strict guidelines laid down by the Supreme Court (Aruna Shanbaug case, 2018 judgment).
• The philosophical and moral questions around “a good death,” autonomy, coercion, loneliness, and institutional care deficits have gained renewed attention.

KEY POINTS

• MAiD (Canada): Allows medically assisted voluntary death for those with grievous, irremediable conditions. More liberal than UK, Australia; Netherlands has the most permissive regime (~5% of all deaths).
• Distinction:
  • MAiD ≠ Suicide (triggered by illness-related suffering, not external reasons).
  • MAiD ≠ Passive Euthanasia (withdrawing treatment).
• India:
  • Supreme Court recognises passive euthanasia and validity of living wills (2018).
  • Active euthanasia or assisted suicide remains illegal under IPC 309 (attempt to suicide decriminalised to an extent via MHCA 2017; abetment remains punishable).
• Ethical dilemmas: When does autonomy justify self-extinguishing? Can suffering or cognitive decline undermine “informed consent”?
• Societal concerns: Loneliness, inadequate palliative care, and institutional abandonment risk coercing vulnerable people into choosing death.

STATIC LINKAGES

• Right to Life (Article 21): Includes right to die with dignity (Gian Kaur vs State of Punjab, 1996; recognised in passive euthanasia ruling 2018).
• Doctrine of Parens Patriae: Courts act as guardians for incapacitated persons (used in Aruna Shanbaug case).
• Mental Healthcare Act 2017: Presumes that a person attempting suicide is under severe stress; mandates treatment not punishment.
• Ethical Frameworks:
  • Utilitarianism: Minimising suffering.
  • Deontological ethics: Sanctity of life.
  • Autonomy principle (Bioethics): Respect for individual choice.
• Global Law Trends: Netherlands (Euthanasia Act 2002), Switzerland (assisted suicide allowed since 1940s), UK (strict ban except withdrawal of treatment).

CRITICAL ANALYSIS

• Arguments For
  • Upholds autonomy and dignity.  
  • Prevents prolonged suffering.
  • Reduces emotional and financial strain.
  • Several countries regulate it successfully.
• Arguments Against
  • Slippery slope to misuse.
  • Vulnerable groups may be coerced by distress or neglect.
  • Moral and medical ethics concerns.
  • Difficulty ensuring genuine informed consent.
• Stakeholders
  • Patients, families, doctors, state institutions, civil society.

WAY FORWARD

•   Strengthen palliative/hospice care.
• Clear legal framework with strict safeguards.  
• Robust guidelines for living wills and consent.  
• Expand mental health and geriatric support.
• National-level ethical and legal consultation.