For UPSC CSE aspirants, analyzing editorials from The Indian Express is essential to build a comprehensive understanding of current affairs, policy debates, and socio-economic challenges. Here’s a structured breakdown of the editorial themes covered on February 03, 2025, tailored for UPSC preparation:
1. Stopping short of the farm
The Union Budget 2025-26 makes some progress in addressing agricultural challenges, but the approach remains incremental rather than transformational. Key concerns such as climate resilience, farm productivity, and income growth for farmers and labourers remain only partially addressed.
Budget Announcements & Allocations
- Total Allocation: The budget for agriculture and allied sectors is ₹1.49 trillion, marking a 4% increase from the previous year. However, with inflation at 4-5%, the real value of this allocation may decline.
- PM-Kisan: Allocation remains at ₹60,000 crore since 2019, decreasing in real terms. The opportunity to integrate it with direct fertiliser subsidy transfers was missed.
- Key Initiatives:
- Focus on 100 districts to enhance agri-productivity, promote sustainable farming, and encourage crop diversification.
- Expansion of Kisan Credit Cards limit from ₹3 lakh to ₹5 lakh.
- Launch of a Pulses Mission for self-sufficiency in tur, moong, and urad.
- Establishment of a Makhana Board in Bihar.
- Release of 109 high-yielding, climate-resilient crop varieties.
Structural Challenges in Agriculture
- Declining GDP Share & Workforce Issues:
- Agriculture’s share in GDP has fallen to 17.7%, while its share in employment has risen from 42.5% (2018-19) to 46.1% (FY24), reflecting the failure of urban sectors to absorb surplus labour.
- Farm labourers (55% of the agricultural workforce) face depressed real wages.
- Low R&D Investment:
- R&D spending remains below 0.5% of agri-GDP, far from the 1% benchmark needed for sustainable growth.
- Marketing & Price Realisation:
- Farmers receive only 30% of consumer spending on fruits and vegetables due to fragmented value chains.
- The Mission for Fruits & Vegetables has been allocated ₹500 crore, but this remains inadequate.
- Strengthening e-NAM & ONDC integration could improve price discovery and reduce middlemen inefficiencies.
- Import Dependence & Crop Imbalance:
- Shortages persist in pulses, oilseeds, and raw materials like cotton and maize.
- MSP-driven policies continue to prioritise rice and wheat, limiting diversification towards high-value crops.
- Expansion of pulses in rice-fallow regions and private-sector participation in oilseed production are needed for structural reform.
Post-Harvest Losses & Infrastructure Gaps
- High Post-Harvest Losses:
- 8.1% of fruits and 7.3% of vegetables are lost post-harvest, contributing to ₹1.53 trillion in annual losses.
- Cold chain & storage infrastructure remains inadequate.
- Agriculture Infrastructure Fund allocation increased from ₹600 crore (FY25) to ₹900 crore (FY26), but more investment is required.
Need for a Paradigm Shift
- The budget continues to rely on subsidy-heavy interventions rather than investment-driven growth.
- Private sector participation, technology adoption, and market linkages need to be prioritised.
- Without bold reforms, achieving Vikshit Bharat 2047 and transforming India into an agricultural powerhouse remains uncertain.
2. India needs a law to protect domestic workers’ rights
Supreme Court’s Directive on Legal Framework
- On January 29, 2025, the Supreme Court directed the Union government to explore the possibility of a separate law for domestic workers.
- The Court ordered the formation of an inter-ministerial committee to examine a legal framework for the protection, regulation, and rights of domestic workers.
- It highlighted the lack of regulations and the exclusion of domestic workers from labour laws such as the Minimum Wages Act and Equal Remuneration Act.
- While some states have regulations, the Court emphasized the need for a national law binding on all states.
Structural Challenges in Domestic Work
- Domestic work is highly feminised, with migrants from marginalised communities forming a significant proportion of the workforce.
- Key challenges include:
- Low wages and lack of uniformity in payment.
- Unfair working conditions, increased workloads without extra pay.
- Job insecurity and complete absence of social security.
- Harassment and mistreatment by employers, rarely reported in media.
- The societal perception that domestic work is a skill all women should possess further contributes to its undervaluation and invisibility.
Need for a Separate Legislation
- Some argue that new labour codes are inclusive, covering domestic workers under the Code on Wages (2019).
- However, the nature of employment (part-time/full-time, live-in/live-out) and asymmetrical employer-employee relationship make this sector qualitatively different.
- The lack of recognition of employers as formal “employers” and homes as workplaces creates resistance to regulation.
Proof of Employment & Legal Enforcement Challenges
- A major challenge in enforcing labour regulations is proving employment.
- Domestic workers’ unions demand mandatory employer registration to ensure legal protection.
- Resistance from employers remains a key obstacle, as many do not see themselves as formal employers.
Importance of Legislation & Regional Efforts
- A national law ensuring minimum entitlements and grievance redressal mechanisms would:
- Challenge power hierarchies and recognise the value of housework and care work.
- Provide legal recognition and voice to domestic workers and their unions.
- Regional efforts, such as those in Kerala and Delhi, could serve as models for national-level legislation.
- While global similarities exist, local and regional specifics must be considered in framing laws.
Path Forward: Challenges & Hopes
- A law may not immediately improve working conditions due to implementation and enforcement issues.
- However, legal recognition is a crucial first step in redefining power relations in the sector.
- The effectiveness of any potential law depends on the committee’s report and the Union government’s follow-up actions.
3. After budget, what India’s economy needs amid global uncertainties
Balancing Growth and Fiscal Stability
- The Union Budget 2025-26 was presented in a challenging macroeconomic environment marked by:
- Declining growth rates
- Falling savings rate
- Slower corporate earnings
- Rising household debt
- While India has recovered from the Covid-19 shock, the current slowdown in GDP growth required a calibrated fiscal stance to support economic recovery while maintaining fiscal discipline.
- The budget aimed to strike a balance between fiscal expansion and consolidation, with a projected fiscal deficit of 4.4% of GDP.
Key Budget Announcements and Fiscal Measures
- The budget focused on taxation reforms, urban development, mining, financial sector, power, and regulatory frameworks.
- Direct tax reforms included:
- Significant revision of income tax slabs, providing relief to the middle class.
- Tax structure simplification to improve compliance.
- On the expenditure side, two fiscal expansion tools were deployed:
- Increasing disposable income through tax cuts.
- Providing relief to lower-income groups through targeted expenditure.
- Despite these measures, the overall fiscal stance remained non-expansionary, with expenditure expected to decline to 14.6% of GDP in 2025-26 (BE).
The Need for Proactive Policy Interventions
- The Economic Survey emphasized the need for deregulation and second-generation reforms, which predominantly fall within state jurisdiction.
- A Centre-State coordination mechanism is necessary for the smooth implementation of structural reforms beyond the budgetary provisions.
- A consultative, trust-based policy framework is essential to invigorate private sector investments and enhance middle-class spending power.
Addressing Rising Household Debt and Financialisation
- A key concern is the rising household debt-to-GDP ratio, which has not returned to pre-Covid levels.
- While India’s household debt remains lower than in developed economies, there is a rising trend post-Covid, coupled with:
- A decline in the savings rate.
- A shift of safe savings to risky assets like stocks and speculative investments.
- Regulatory oversight is needed to mitigate macroeconomic risks and ensure financial stability.
- Encouraging household savings, reducing excessive financialisation, and promoting safe saving instruments are crucial to navigating global economic uncertainties.
Inflation, Growth, and Future Challenges
- The budget assumes a nominal GDP growth of 10.1% for 2025-26, with real GDP growth projected at 6% or more and inflation at 4% or lower.
- Achieving low inflation will be a challenge given current global geopolitical and economic conditions.
- A higher-than-expected nominal GDP growth could aid fiscal prudence, but external risks cannot be ignored.
Way Forward: Policy Considerations Beyond the Budget
- While the budget provides a fiscal roadmap, India’s economic trajectory will depend on policy measures outside the budget in the following areas:
- Monetary and financial-sector policies to maintain macroeconomic stability.
- Active government intervention to curb excessive financialisation.
- Strengthening household savings mechanisms to enhance financial security.
- Implementing next-generation structural reforms through Centre-State collaboration.
4. Despite Donald Trump’s loud claims, why ‘baby may not drill’
Trump’s Energy Push: Sound and Fury?
Former President Donald Trump’s pro-oil rhetoric—“Drill, baby, drill”—aims to reposition the U.S. as an energy superpower. His executive orders, including:
- Revoking the electric vehicle (EV) mandate,
- Withdrawing the U.S. from the Paris Agreement,
- Easing oil exploration restrictions,
signal a radical departure from the green agenda. However, will this lead to a substantive shift in the global energy market? Unlikely.
Economic Reality vs. Trump’s Rhetoric
- Oil exploration and production is a high-risk, capital-intensive industry with a long gestation period.
- Three major uncertainties govern drilling:
- Finding hydrocarbon reserves (improved by technology).
- Extracting them efficiently (aided by innovation).
- Profitability of production, which depends on oil prices.
- A Federal Reserve survey found that new U.S. oil investments require a breakeven price of $84 per barrel.
- Current oil prices (WTI crude at $75 per barrel) discourage new exploration.
- Trump’s goal of reducing oil prices below $50 per barrel contradicts his drilling push—companies won’t drill if production is unprofitable.
Operational Constraints: Slow Response to Policy Changes
- Even if drilling were economically viable, the process from exploration to production takes years (often beyond a single presidential term).
- Companies fear regulatory reversals—future administrations could reinstate environmental bans, making investments risky.
- Drilling in protected areas like the Arctic is contentious, likely leading to legal battles that delay projects.
America’s Energy Independence: A Reality Check
- The U.S. is already the world’s largest oil producer (13.4 million barrels per day in 2024), surpassing Saudi Arabia.
- Two decades ago, the U.S. was a major crude oil importer (10.1 mbd in 2005). Today, it is a top exporter, thanks to:
- Shale revolution (hydraulic fracturing and horizontal drilling).
- Favorable geology and technology.
- Relatively high oil prices that sustained investment.
- If market conditions favor drilling, companies will act regardless of political mandates—Trump’s directive adds little incentive.
Climate Policy and EV Transition: Limited Impact
- Exiting the Paris Agreement will disrupt U.S. climate funding, but the global green movement is resilient.
- EV market growth is unlikely to reverse—Trump’s rollback may slow smaller U.S. EV startups but won’t halt China’s dominance or global EV expansion.
- Even Tesla, despite losing tax credits, will continue to thrive in the evolving market.
Conclusion: Energy Markets Won’t Pivot Overnight
- While Trump’s rhetoric grabs headlines, the economics of oil drilling suggest limited real-world impact.
- U.S. energy policy changes cannot override market realities—companies invest based on profitability, not political slogans.
- The green transition and global climate efforts will continue, despite temporary political roadblocks.
5. The first salvo
U.S. President Donald Trump has fired the first salvo in what could escalate into a global trade war. His executive orders impose steep tariffs on three of the country’s largest trading partners:
- Canada & Mexico: 25% additional tariffs on imports.
- China: 10% additional tariffs.
These nations together account for 40% of U.S. imports. The move, justified as a measure to curb illegal immigration and drug inflows, is expected to have far-reaching economic consequences.
Immediate Retaliation from Affected Nations
- Canada: PM Justin Trudeau announced 25% retaliatory tariffs on $107 billion worth of U.S. goods.
- Mexico: President Claudia Sheinbaum has instructed the economy ministry to implement defensive trade measures.
- China: More measured in its response, likely to file a case against the U.S. at the WTO.
Economic Fallout: U.S. Households & Inflation
- The Tax Foundation estimates an $830 additional tax burden per U.S. household in 2025.
- Goldman Sachs predicts:
- 0.7% rise in core inflation due to tariffs.
- 0.4% reduction in U.S. GDP.
- Federal Reserve policy implications:
- Higher inflation may force the Fed to delay interest rate cuts.
- Trump has been openly critical of the Fed, increasing tensions over monetary policy direction.
Impact on Global Markets & India’s Strategy
- The trade war adds uncertainty to global markets.
- India is currently not targeted but must prepare for potential spillover effects.
- PM Narendra Modi’s upcoming U.S. visit presents a crucial opportunity:
- India should leverage bipartisan support in Washington for stronger India-U.S. trade ties.
- Geopolitical shifts could create opportunities for India to expand exports and strengthen economic partnerships.
Conclusion: India Must Navigate Carefully
Trump’s aggressive trade policy will shape global economic dynamics, impacting inflation, monetary policy, and market stability. While India is not directly affected yet, it must remain strategic, adaptable, and proactive in securing its trade interests amid rising global protectionism.
Disclaimer:
This analysis is based on the editorial content published in Indian Express and is intended solely for informational and educational purposes. The views, opinions, and interpretations expressed herein are those of the author of original article. Readers are encouraged to refer to the original article for complete context and to exercise their own judgment while interpreting the analysis. The analysis does not constitute professional advice or endorsement of any political, economic, or social perspective.
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