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 08, 2025, tailored for UPSC preparation:
1. In the AI race, what India needs to do
- AI Hardware Development – India must strengthen its AI hardware ecosystem for efficiency, reliability, and scalability.
- Global AI Competition – The US is investing heavily in semiconductors, while open-source AI models like DeepSeek are challenging proprietary systems.
- India’s AI Strengths – 4.2 lakh AI professionals, 92% enterprise AI adoption, $17 billion market potential, and the IndiaAI Mission.
- Startup Ecosystem – 240+ Gen AI startups addressing healthcare, education, BFSI, and agriculture challenges.
- Digital Public Infrastructure (DPI) – Success in financial inclusion, UPI payments, and pandemic relief showcases India’s digital transformation.
- Hardware Limitations – US restrictions on GPU exports hinder India’s AI capabilities, making self-reliance essential.
- Need for AI Sovereignty – India must avoid becoming dependent on the US and China for AI advancements.
- Action Plan for AI Leadership:
- Develop energy-efficient, cost-effective AI solutions.
- Promote open-source innovation and software-hardware convergence.
- Build sovereign AI models based on India’s unique datasets.
- Develop multilingual AI models catering to India’s linguistic diversity.
- Demand Tier-I status in AI diffusion to avoid import/export restrictions.
- Adopt a mission-driven, urgent approach to AI development.
- Future Vision – India must transition from an AI service provider to a global AI innovator.
2. RBI’s shallow rate cut after five years
RBI’s Rate Cut Cycle (Feb 2025)
- RBI’s Monetary Policy Committee (MPC) initiated a rate-cutting cycle in February 2025.
- A 25 basis points repo rate cut was made due to a favorable growth-inflation mix.
- India’s rate cut cycle is expected to be shallow, with only one more rate cut anticipated.
Inflation and Growth Trends
- CPI inflation in Dec 2024 breached 6%, the upper threshold of RBI’s target range (2-6%).
- Inflation is projected to dip to 4.2% in 2025-26 from 4.8% in 2024-25 due to lower food inflation.
- GDP growth slowed to 5.4% in Q2 of 2024-25, significantly below 8.2% in 2023-24.
Global Economic Risks
- Tariff-related actions by the US and countermeasures by other nations are increasing financial volatility.
- The rupee has depreciated but performed better than other emerging market currencies.
- Inflationary pressures due to external factors remain a concern.
Impact of RBI’s Policy on Economy
- Lower EMIs from rate cuts may boost urban consumption and GDP growth.
- The Union Budget’s ₹1 trillion tax cuts could support consumption but may not be significantly inflationary.
- Fiscal deficit is set to narrow to 4.4% of GDP in 2025-26 from 4.8% in 2024-25.
Challenges to Growth
- Weak exports, especially in goods, could limit GDP growth.
- Private capital expenditure (capex) may remain subdued due to lack of strong external demand.
- The government’s capex growth (₹1 trillion, 10.1% increase) may be constrained by fiscal limitations.
Fiscal and Policy Considerations
- India’s potential growth remains at 6.5-7%, below the 8% projected in the Economic Survey.
- Fiscal consolidation efforts will be affected by the 8th Pay Commission and the 16th Finance Commission.
- RBI’s exchange rate policy aims to smoothen volatility rather than target a specific level.
3. Budget 2025, a catalyst for growth
- Tax Relief for the Middle Class: Income tax exemption limit increased from ₹7 lakh to ₹12 lakh, aiming to boost disposable income and domestic consumption.
- Impact on Economic Growth: Higher disposable income is expected to stimulate spending, increase production, and generate jobs, particularly in the consumer goods sector.
- Challenges in the Manufacturing Sector: Manufacturing remains a weak spot in India’s economy, but recent growth has pushed employment in the sector to 18.5 million.
- Rise of the Gig Economy: India’s gig sector employs around 10 million workers and is growing at a compounded rate of 17%, projected to reach 23.5 million by 2029-30.
- Social Security for Gig Workers: PM Jan Arogya Yojana coverage extended to gig workers, addressing a long-standing demand for social security in the sector.
- Infrastructure and Capital Inflows: Continued infrastructure spending to support job creation, but long-term growth requires attracting more domestic and foreign capital into labor-intensive industries.
- Boost to Shipbuilding Industry: Granting industry status to shipbuilding to increase India’s role in the global shipping industry, which is currently negligible despite its reliance on maritime trade.
- Regulatory Reforms: The government aims to ease business operations by reducing bureaucratic hurdles and forming a high-level committee for a modern, flexible, and trust-based regulatory framework.
- Jan Vishwas Bill 2.0: Proposal to decriminalize 100 additional provisions across various laws to enhance the ease of doing business.
- Government’s Economic Approach: Chief Economic Advisor emphasizes reducing government intervention in businesses to foster a more conducive economic environment.
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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