A SMARTER HAPPINESS AGENDA- The World Happiness Report 2025 ranked India at 118th among 143 countries — a figure that reignited debate on how the nation measures progress.
- Despite strong GDP growth and poverty reduction, India’s subjective well-being indicators (social trust, mental health, life satisfaction) remain low.
- The editorial reflects on what constitutes “a good life” and how public policy can incorporate psychological and social well- being.
Key Points
- India’s policy model equates happiness with economic and infrastructural growth, but once basic needs are met, well-being plateaus.
- The hedonic treadmill effect: increases in income temporarily raise happiness but soon return to baseline.
- Determinants of durable well-being: meaningful relationships, purposeful work, community engagement, and mental health.
- Policy implications:
- Treat relationships and public spaces as social infrastructure.
- Integrate socio-emotional learning and life skills in education.
- Promote digital hygiene and right-to- disconnect norms in workplaces.
- Draws from Indian philosophical traditions (Sukha, Eudaimonia, Ataraxia) that equate happiness with balance, virtue, and purpose, not indulgence.
Static Linkages
- GDP vs. HDI Debate – Limits of GDP as a measure of welfare (Economic Survey, 2018– 19).
- Bhutan’s Gross National Happiness (GNH) model — integrates socio-economic, environmental, and cultural well-being.
- Directive Principles of State Policy (Art. 38 & 47) — obligation of the State to promote social welfare and public health.
- UN Sustainable Development Goals (SDGs) – Goal 3 (Good Health and Well-being), Goal 11 (Sustainable Cities & Communities).
- World Bank’s Human Capital Index – measures education, health, and productivity potential.
Critical Analysis
- Pros:
- Encourages holistic, people-centric governance.
- Promotes mental health and community bonding.
- Challenges:
- No national well-being metrics. Survey bias in global indices.
- Weak inter-ministerial coordination.
Way Forward
- Create a National Well-being Index (via NITI Aayog).
- Integrate socio-emotional learning in
- Develop community spaces to build social
- Ensure work-life balance and digital detox
- Foster civic volunteering and mentorship.
FOREIGN CAPITAL & INDIAN BANKS
KEY HIGHLIGHTS
- India’s net FDI has slowed, but FDI inflows into the financial sector have surged.
- Global giants such as Blackstone, Zurich Insurance, Emirates NBD, Sumitomo Mitsui (SMBC), and Abu Dhabi’s IHC are investing heavily in Indian banks, insurers, and NBFCs.
- Marks a strategic shift — from a protected domestic sector to a globally integrated one.
Key Developments
- Major Deals
- Blackstone acquired 9.99% stake in Federal Bank (₹6,196 crore).
- Fairfax (Canada) allowed to hold majority stake in CSB Bank beyond 40% cap (RBI approval).
- Several foreign players entering insurance, banking, and NBFC space.
- Regulatory Changes
- Insurance sector: FDI limit raised to 100%.
- Private banks: FDI up to 74% (with RBI approval).
- RBI & SEBI maintain cautious oversight — insist on compliance, ownership transparency, and capital adequacy norms.
Implications for India Positive Outcomes
- Capital Inflow & Deepening of Credit Markets – strengthens liquidity, supports MSME and retail credit.
- Technology & Risk Management Transfer – global best practices in governance and innovation.
- Improved Efficiency – competition pressures Indian players to modernize.
- Boost to Financial Inclusion – helps achieve national goals like Jan Dhan, Digital India.
- Supports India’s $7 Trillion GDP Vision (by 2030) – helps meet rising capital demand.
Risks & Concerns
- Foreign Control Over Strategic Assets – ownership could shift decision-making offshore.
- Exposure to Global Shocks – e.g., 2008 crisis; contagion risk if parent firms face distress.
- Uneven Playing Field – foreign entities have access to cheaper global funding.
- Regulatory Challenges – complex mergers, cross-border compliance, systemic risk oversight.
- Financial Sovereignty – need to ensure domestic stability and autonomy are not compromised.
Regulatory and Policy Safeguards
- RBI’s cautious liberalisation — stepwise, case- by-case approach.
- Fit-and-Proper criteria for foreign promoters. Limits on voting rights & management control.
- SEBI norms on disclosure and capital adequacy.
- Need for a clear national framework on maximum permissible foreign control.
Key Terms / Concepts
- FDI vs FPI: Long-term strategic control vs portfolio investment.
- NBFC: Non-Banking Financial Company – provides credit outside formal banking system.
- Financial Inclusion: Providing affordable financial services to all.
- Systemic Risk: Risk of collapse of an entire financial system due to interlinkages.
Way Forward
- Balanced Liberalisation: Encourage FDI without compromising regulatory autonomy.
- Strengthen RBI Oversight: Real-time monitoring of cross-border ownership and risk.
- Domestic Capacity Building: Strengthen Indian institutions through capital infusion and governance reforms.
- Crisis Preparedness: Build buffers and contingency mechanisms.
- Strategic Clarity: Define “critical financial infrastructure” with national control safeguards.
