Daily News Capsules
1. Backdrop for Budget: 7.4% growth estimated for FY26
The Indian economy is expected to grow at 7.4% in the ongoing fiscal year, the National Statistical Office (NSO) said in its first advance estimates of gross domestic product released on Wednesday, with manufacturing, services, and government expenditure spurring growth. And the small print of the numbers released suggest that despite low inflation pushing nominal growth, in percentage terms, lower than that assumed in the budget, there is unlikely to be any adverse impact on tax collections and the fiscal deficit – good news from the perspective of both the macroeconomy and the forthcoming Union Budget. The projected growth rate – there are still three months left for 2025-26 to finish – is not very different from what has been projected by the Reserve Bank of India or private forecasters, and they reiterate the resilience and strength of the Indian economy amidst global headwinds. RBI’s December Monetary Policy Committee (MPC) resolution had projected an annual growth of 7.3% in 2025-26. A large shortfall in nominal GDP would have complicated the fiscal math of the government. The headline growth number compares with 6.5% in 2024-25, and is primarily a result of improvement in growth in manufacturing and services. On the expenditure side, the increased growth is on account of a rise in government expenditure and capital formation despite a marginal slowdown in private consumption. While Private Final Consumption Expenditure (PFCE) came down from 7.2% in 2024-25 to 7% in 2025-26, Government Final Consumption Expenditure (GFCE) and Gross Fixed Capital Formation (GFCF) growth increased from 2.3% to 5.2% and 7.1% to 7.8% between 2024-25 and 2025-26. Gross Value Added (GVA) – it is GDP less net indirect taxes – growth increased from 6.4% to 7.3% between 2024-25 and 2025-26. An increase in manufacturing (4.5% to 7%) and services (7.2% to 9.1%) growth drove up the performance despite a slowdown in sectors such as agriculture (4.6% to 3.1%) and construction (9.4% to 7%) between 2024-25 and 2025-26.
Possible Question
Advance GDP estimates often shape fiscal strategy ahead of the Union Budget. Discuss how trends in nominal GDP, sectoral GVA, and expenditure-side components influence fiscal deficit management, tax buoyancy, and capital expenditure prioritisation in India.
2. Varma’s impeachment motion never admitted in RS: LS to SC
The motion for the removal of Allahabad high court judge, justice Yashwant Varma, was never admitted in the Rajya Sabha on account of being “defective”, the Lok Sabha speaker’s office has told the Supreme Court, marking the latest twist surrounding the sensational case following the discovery of wads of cash in his official residence in Delhi last year. The top court was examining the plea of justice Varma finding fault with the speaker’s decision to unilaterally proceed with the inquiry on August 12, 2025 when a similar motion was also in the works in the Rajya Sabha. On December 16, the court had sought the response of both Houses of Parliament, being prima facie satisfied about the grounds of challenge raised in the petition. The response filed by the speaker’s office said that soon after the motion was presented in the Rajya Sabha, a communication was sent to the Lok Sabha, claiming that the same was “defective” and was never admitted in the first place. Acting on this information, the LS speaker admitted the motion on August 11 and proceeded under section 3(2) of the Judges (Inquiry) Act, 1968 by constituting an inquiry committee headed by a Supreme Court judge. On July 21, then vice-president Jagdeep Dhankhar resigned on health grounds, hours after he presided over the first day of the monsoon session in the Rajya Sabha. Earlier that day, he had announced that he had received notice of motion to constitute a committee for the removal of justice Varma, signed by more than 50 members — as is constitutionally required for such a motion. HT had then reported that all 63 MPs who signed the notice were from the Opposition parties and the National Democratic Alliance had no idea that such a notice was being prepared. It had also reported that Dhankhar’s move to kickstart the impeachment mechanism took the government, which wanted the process to go through the Lok Sabha, by surprise, and it was the trigger that prompted the abrupt resignation. The court said, “We need to see the intention of the legislature in providing the proviso to section 3(2). If one House rejects and another admits and a committee is constituted, we have to read it that way. If both Houses admit, only then a joint committee is to be formed by speaker and chairman. But if one House rejects, where is the bar on the LS to constitute a committee.”
Possible Question
The impeachment process for higher judiciary involves constitutional safeguards and inter-House coordination. Examine the constitutional procedure for removal of judges, the role of Articles 124(4) and 217, and assess the implications of procedural ambiguity between the two Houses of Parliament.
3. US seizes 2 oil tankers, to ease Venezuela sanctions
The United States seized two sanctioned oil tankers linked to Venezuela in back-to-back actions in the North Atlantic and the Caribbean Sea, officials said on Wednesday, and is removing sanctions to enable the shipping and sale of oil from the South American country to markets worldwide. US European Command announced the seizure of the merchant vessel Bella 1 for “violations of US sanctions” in a social media post. The US had been pursuing the tanker since last month after it tried to evade a US blockade on sanctioned oil vessels around Venezuela. Then, Secretary of Homeland Security Kristi Noem revealed that US forces also took control of the tanker Sophia in the Caribbean. Noem said in a social media post both ships were “either last docked in Venezuela or en route to it”. Noem said that both ships are part of a large “ghost fleet” of sanctioned vessels that carry oil from Russia, Iran and Venezuela in defiance of Western sanctions, mostly to customers in Asia. The Trump administration is “selectively” removing sanctions to enable the shipping and sale of Venezuelan oil to global markets, according to an outline of the policies published on Wednesday by the Energy Department. The oil sales are slated to begin immediately with the sale of 30 million to 50 million barrels from the South American country. The US government said the sales “will continue indefinitely” with the proceeds settling in US-controlled accounts at “globally recognized banks”. The money would then be disbursed to the US and Venezuelan populations at the “discretion” of Trump’s government. “We are enforcing American laws with regards to oil sanctions,” Secretary of State Marco Rubio said on NBC on Sunday. “We go to court. We get a warrant. We seize those boats with oil. And that will continue.”
Possible Question
Sanctions enforcement and selective relaxation have become key tools of foreign policy. Analyse the legal basis, geopolitical objectives, and economic consequences of unilateral sanctions regimes, with reference to the US approach towards Venezuela and its impact on global energy markets.
4. Big Tech pushes back on AI copyright regulation plan
The government’s resolution to require artificial intelligence (AI) firms to pay royalties for the data used to train their models has met fierce resistance from the technology sector. The department for promotion of industry and internal trade’s (DPIIT’s) proposal plans to set up a framework to compensate creators whose work helps AI tick. Big Tech firms said the DPIIT’s plan, announced on 8 December, for standard AI royalties won’t work because it is difficult to separate commercial AI use from the very early stages, where it might have been a non-profit or research project. Industry body Nasscom, which represented technology companies within DPIIT’s working panel on the AI copyright royalty proposal, published a ‘dissent note’ against the framework on December 17. The government, however, believes that while challenges raised by the industry will be taken into account, regulating the usage of copyrighted data in AI models is necessary. DPIIT’s proposal suggested a flat fee, determined by the Centre and payable through a government-appointed body to creators, to which anyone claiming royalty will need to sign up. The proposal placed the onus of compensating creators on tech firms, and also included the idea of retrospective royalty payments—for data that companies have already used. Seven top executives that Mint spoke with across Meta, Google, OpenAI and Nasscom, all of whom requested anonymity since DPIIT’s AI copyright proposal is still open for consultation, cited Japan and Singapore’s models legalizing Big Tech’s ability to collect and use data, as an ideal ground.
Possible Question
The regulation of training data for artificial intelligence raises complex questions of law and innovation. Discuss the challenges of applying copyright frameworks to AI training, and evaluate the trade-offs between creator compensation, technological innovation, and global competitiveness in India’s proposed approach.
5. SC warns courts against treating arbitral award challenges as civil pleas
The Supreme Court on Wednesday cautioned courts against treating challenges to arbitral awards as regular civil appeals, emphasising that routine judicial interdictions would frustrate and defeat the very objective of the Arbitration and Conciliation Act, 1996, which envisages minimal court intervention in commercial dispute resolution. A bench of justices PS Narasimha and Pankaj Mithal underlined that the Act is a special enactment designed to ensure speedy and cost-effective resolution of contractual disputes through arbitration, and warned that allowing courts to re-examine arbitral awards at multiple levels would render the statutory framework nugatory. “If the courts are allowed to step in at every stage and the arbitral awards are subjected to challenge before the courts in hierarchy…it would obviate, frustrate and defeat the very purpose of the Act,” the bench said. The court stressed that an arbitral award must be accepted if it is not patently illegal or does not fall within the narrow scope of interference under Section 34 of the Act, adding that appellate scrutiny under Section 37 is even more restricted. The judgment came as the bench set aside a 2021 decision of the Madras high court, which had interfered with an arbitral award in a dispute between Jan De Nul Dredging India Private Limited and the Tuticorin Port Trust over alleged non-payment and under-payment of dues raised in the final bill for a major dredging project. Allowing the appeal filed by the dredging company, the Supreme Court held that the division bench of the high court had manifestly erred in law by re-interpreting contractual clauses and disturbing an arbitral award that had already been upheld under Section 34 of the Act.
Possible Question
Judicial intervention in arbitration has long been a concern for India’s investment climate. Examine the principle of minimal judicial interference under the Arbitration and Conciliation Act, 1996, and assess how recent Supreme Court jurisprudence seeks to balance finality of awards with judicial oversight.
Editorial Snapshots
A. No platform for perversity
Elon Musk’s Grok AI chatbot spent the holiday season generating sexualised deepfakes of women and children on X, the social media platform he owns. Users discovered they could tag @Grok directly on photos uploaded by users to prompt the AI with requests like “remove her clothes” or “put her in a bikini”. The results appeared instantly in public feeds, viewable by millions. Among the victims: 14-year-old Stranger Things actor Nell Fisher and Ashley St. Clair, mother of one of Musk’s children. Regulators moved swiftly. India issued an ultimatum demanding system changes, the EU launched urgent investigations, the UK warned of compliance probes and France opened a criminal case citing child pornography generation. Musk initially made light of the scandal, posting Grok-generated images of himself and a toaster in bikinis, calling it “way funnier” than other AI memes. When reporters sought comment, xAI sent an automated reply: “Legacy Media Lies”. Only later did Musk post that users creating illegal content would “suffer the same consequences” as those uploading it — a threat that rang hollow when Grok continued churning out sexualised versions of women’s photos without consent through Wednesday. For many who have closely followed Twitter’s transformation into X after Musk took over, the developments track a steady abandonment of social and moral responsibilities. Musk dissolved Twitter’s content safety teams in 2022 and fired the vast majority of engineers working on child exploitation. What followed was an unbridled proliferation of hate, gore and pornography — content that caters to the basest instincts. Today, Grok even sells unrestricted access through “Spicy Mode”, a paid tier that positions the platform as an “uncensored” alternative to competitors. X and its subsidiaries haven’t accidentally become systems that generate material preying on women and children. They’re deliberately optimised for engagement and revenue above all else. Here, the scandal exposes something darker than negligent engineering: A system built to cater to the insatiable demand for non-consensual sexualisation of women. The perverse incentives work on both levels — economic and literal. The question isn’t whether X can fix Grok’s safeguards. It’s whether the business model that made this crisis inevitable will face consequences severe enough to make such economics costly. Right now, nothing in Grok’s popularity suggests the market is punishing X for enabling sexual harassment at scale. That’s the real perversion. Regulators must force platforms to internalise the costs of these failures through penalties that exceed the profits. The town square belongs to the townsfolk, whether virtual or physical — and X needs reminding that no business model trumps the law.
Possible Question
The rise of generative AI has amplified concerns around online safety, consent, and platform accountability. Critically examine the responsibility of digital platforms in preventing AI-generated sexual abuse, and discuss the role of regulation, liability frameworks, and market incentives in enforcing ethical technology governance.
B. US’s vaccine denialism reflects deeper malaise
The US federal government dropping a set of vaccines from its list of recommendations for universal vaccination will very likely push up risks of morbidity among children in that country. The Centers for Disease Control and Prevention bypassing the usual process of external expert review for the decision was expected, given US health secretary Robert F Kennedy Jr’s anti-vaccine stance and the Trump administration’s disregard for science, processes, and institutions (although, ironically, the US insists on proof that people visiting the country have been administered all these vaccines). Beyond American borders, the move is likely to fuel vaccine denialism, even in countries where health programmes are critically dependent on preventive interventions. The larger concern is that this is a symptom of a broader problem: Allowing ideology to trump science across various fields, including policy, epistemology, and historiography. And it is not limited to just the US. Power and capital, in many parts of the world, are turning their backs on science, which is reflected in the cuts to public funding for research and development. While US universities have seen significant cuts, funding has remained flat in many Western nations. Pharmaceutical companies have pivoted from vaccine research to therapeutic research for chronic diseases. Dubious systems have been spun into multi billion-dollar industries in the wellness space, endorsed by persons in public office and influencers (usually paid) making claims that can’t stand scientific rigour. The need now is to reorient the discourse. Only by putting science back in the driver’s seat can leaders restore trust in vaccines.
Possible Question
Public health outcomes are closely tied to trust in scientific institutions. Analyse how politicisation of health policy and vaccine denialism can undermine global disease control efforts, and discuss the lessons for strengthening science-based policymaking in democracies.
Fact of the day
Gig firms told to contribute 5% of wages by June 30: Firms in India’s gig economy, known as aggregators and platforms, will have to contribute up to 5% of the wages payable to workers as contribution towards a National Social Security Fund and they will have to pay provisional contribution, as assessed, by June 30, the labour ministry’s draft rules to operationalise a new social security law show. According to the draft, gig and platform workers will have to be employed for 90 days with an aggregator in the last financial year to qualify for social security benefits under the Code on Social Security 2020. Workers who take up employment with multiple aggregators will need to be employed for 120 days to avail of the allowances. The Centre on November 21 last year announced the implementation of four labour codes passed by Parliament in 2019-20 meant to replace a welter of complex, British-era legislation. The Code on Social Security, one of the laws, provides for social security benefits to gig workers for the first time. India’s gig economy, especially rapid-delivery platforms parceling out stuff in under 10 minutes, is proving to a vital provider of employment. However, workers’ groups, who say they face poor work conditions and wages, called for a strike on New Year’s Eve, a busy time for home delivery of everything, from cakes to gifts. On Tuesday, a prominent gig workers’ union said the cut-offs for receiving social benefits in the draft rules don’t match actual work patterns. This could mean very little benefit, it said. “Most gig workers would miss the threshold for social security payouts,” said Shaik Salauddin, founder president of the Telangana Gig and Platform Workers’ Union. Salauddin referred to a post on X by Deepinder Goyal, the founder of Eternal, which owns quick commerce platforms such as Zomato and Blinkit, in which he said: “In 2025, the average delivery partner on Zomato worked 38 days in the year and 7 hours per working day, reflecting true gig style participation rather than fixed schedules.” Raminder Uppal, a labour activist who advises gig workers’ unions, said the draft rules don’t specify how aggregator firms will calculate their contributions towards a social security fund when gig workers shift between platforms.
