Economy

AI REVOLUTION: IS INDIAN JOB MARKET PREPARED?

AI threatens millions of Indian IT jobs, worsening stagnant wages and graduate unemployment. A deep skills mismatch and low R&D and education investment weaken preparedness. India must pivot to human-AI collaboration through curriculum reform, large-scale reskilling, and strong industry-academia partnerships to build a competitive, future-ready workforce.

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PAC observation on SANKALP Scheme

The SANKALP (Skill Acquisition and Knowledge Awareness for Livelihood Promotion) scheme, launched in 2018 by the Ministry of Skill Development and Entrepreneurship with assistance from the World Bank, aims to strengthen short-term skill training by improving institutional capacity, ensuring industry relevance, and promoting inclusion of marginalised groups. However, audit findings by the Comptroller and Auditor General of India and observations of the Public Accounts Committee have highlighted concerns such as underutilisation of funds, slow implementation, weak monitoring mechanisms, and lack of preparedness. The issue underscores the need for stronger governance, outcome-based implementation, better industry linkages, and integration of vocational education within the school system to improve employability and effectively harness India’s demographic potential.

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RARE EARTH MAGNETS : OPPOTUNITY & CHALLENGES

Rare earth magnets are high-performance materials essential for electric vehicles, wind turbines, electronics, and defence systems, making them critical for India’s clean energy transition and technological growth. With China dominating global processing, India’s push for domestic manufacturing, critical mineral processing, and recycling aims to reduce import dependence and build a self-reliant mine-to-magnet ecosystem to strengthen economic and strategic security.

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CIRCULAR ECONOMY IN AGRICULTURE : POLICY AMBITION & GROUND REALITY

India generates nearly 350 million tonnes of agricultural waste annually, creating both an environmental challenge and a major economic opportunity. The circular agriculture approach aims to convert this waste into valuable resources such as bioenergy, organic fertilisers, and bio-based products, with the potential to create a $2 trillion market and millions of jobs by 2050. While the Government has launched multiple initiatives for biomass utilisation, residue management, and infrastructure development, implementation gaps, weak supply chains, limited monitoring, and uneven regional performance remain key concerns. Strengthening outcome-based monitoring, market linkages, and integrated waste management is essential to transform agricultural waste into sustainable rural wealth.

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RBI tightens norms on loan recovery to protect borrower rights

The Reserve Bank of India has issued draft Responsible Business Conduct (Second Amendment) Directions, 2026 to regulate the conduct of loan recovery agents, effective from July 1, 2026. The guidelines prohibit harassment, abusive language, excessive or anonymous calls, inappropriate digital messages, and any form of intimidation or public humiliation of borrowers or guarantors. Banks are required to establish a dedicated grievance redressal mechanism and adopt board-approved policies covering due diligence, code of conduct, and performance standards for recovery agents. The move aims to strengthen financial consumer protection, promote ethical recovery practices, and balance borrower dignity with credit discipline in India’s expanding retail lending ecosystem.

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Strengthening Capital Goods for a Viksit Bharat

The Union Budget 2026–27 reinforces the capital goods sector as a key driver of India’s investment-led growth by increasing public capital expenditure to ₹12.2 lakh crore and introducing targeted measures to strengthen domestic manufacturing capacity. Key initiatives include a ₹10,000 crore container manufacturing scheme, establishment of Hi-Tech Tool Rooms, support for construction and infrastructure equipment, tax incentives for toll and electronics manufacturing, and customs duty exemptions for energy storage and critical mineral processing. Along with ongoing programmes such as Make in India, PLI and the Capital Goods Competitiveness Scheme, these measures aim to enhance technological capability, reduce import dependence and position India as a globally competitive manufacturing hub.

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India - US farm trade deal with feed security and farmer protection

The India - United States farm trade understanding allows limited imports of sorghum and distillers’ dried grains to support India’s rapidly growing animal feed demand while retaining the ban on genetically modified maize and soyabean to protect domestic farmers and biosafety standards. As India’s feed industry, producing about 60 million tonnes and valued at over ₹1.7 lakh crore, faces rising demand and productivity constraints, the agreement aims to balance feed security and cost stability with agricultural self-reliance, though concerns remain over future import dependence and the need to strengthen domestic crop productivity.

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RBI expands collateral-free credit for Micro and Small Enterprises

The Reserve Bank of India has increased the collateral-free loan limit for Micro and Small Enterprises (MSEs) from ₹10 lakh to ₹20 lakh, with a possible extension up to ₹25 lakh for financially sound units. The measure aims to improve access to formal credit, promote entrepreneurship, and strengthen financial inclusion, particularly for small businesses lacking assets to pledge. Supported by guarantee mechanisms such as the Credit Guarantee Fund Trust for Micro and Small Enterprises and aligned with schemes like the Prime Minister Employment Generation Programme, the initiative is expected to boost employment, support business expansion, and enhance the role of the MSME sector in driving inclusive economic growth, while requiring prudent risk management by banks.

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RBI’s new framework to safeguard customers from digital fraud

The Reserve Bank of India has proposed a new customer protection framework to compensate individuals up to ₹25,000 for losses arising from small-value digital frauds, reflecting the growing risks in India’s rapidly expanding digital payments ecosystem. Along with revising the existing customer liability norms for unauthorised electronic transactions, the RBI plans to introduce measures such as enhanced authentication for high-risk users and additional safeguards to improve payment security. The central bank has also proposed draft guidelines to curb mis-selling of financial products, harmonise conduct norms for loan recovery agents, and strengthen institutional capacity through initiatives like Mission SAKSHAM for Urban Cooperative Banks. Collectively, these measures aim to enhance consumer trust, improve regulatory oversight, and ensure the safe, inclusive, and resilient growth of the digital financial system.

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RBI holds repo rate steady: Key highlights and implications

The Reserve Bank of India kept the repo rate unchanged at 5.25% and retained a neutral stance, citing a favourable macroeconomic environment. With inflation projected at 2.1% for FY26 and GDP growth expected at 7.4%, the central bank opted for a cautious pause to allow the impact of earlier rate cuts to transmit fully. The decision ensures stability in borrowing costs and EMIs while preserving policy flexibility to respond to risks such as global uncertainty, crude oil volatility, and potential inflationary pressures.

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India’s crude oil transition: Challenges and Opportunities

India is gradually reducing its dependence on Russian crude amid global geopolitical pressures, but a complete halt remains unlikely due to discounted pricing, refinery compatibility, contractual commitments, and structural reliance of certain facilities. While increasing imports from the US and exploring options like Venezuela support diversification and reduce sanctions risk, higher logistics costs and limited alternative capacity pose challenges. India’s current strategy focuses on market-driven diversification, maintaining strategic autonomy, and strengthening long-term energy security through a broader supplier base and accelerated clean energy transition.

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MINI RATNA CATEGORY-I STATUS TO YANTRA INDIA

Miniratna status is a government classification granted to profit-making Central Public Sector Enterprises with a positive net worth to provide them limited financial and operational autonomy. It enables faster decision-making, improves efficiency, supports regional and sectoral development, and serves as a stepping stone towards Navratna status, thereby strengthening the overall PSU reform framework in India.

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