Daily News Capsules
1. Cigarettes set to get costlier from Feb 1 as excise duty hiked
The government has imposed a new excise duty on cigarettes ranging from ₹2,050 to ₹8,500 per 1,000 sticks, a move that sent tobacco company shares plummeting on Thursday and is expected to significantly raise prices for the country’s approximately 100 million smokers. ITC, the market leader and maker of Gold Flake cigarettes, fell 9.69%, while Godfrey Phillips India, which distributes Marlboro, tanked 17.09%. The excise duty, notified late on Wednesday, will take effect from February 1 in addition to a 40% Goods and Services Tax (GST) on tobacco products and cigarettes. The duty varies according to cigarette length and replaces the compensation cess being scrapped as part of a broader GST restructuring announced in September. The new levies will result in a 22% to 28% increase in overall costs for 75-85mm cigarettes, according to ICICI Securities analysts. Jefferies Financial Group estimated the new charges imply nearly 30% higher taxes if the National Calamity Contingent Duty continues to be levied. The finance ministry also notified additional excise duties on other tobacco products: 91% on gutkha, 82% on chewing tobacco and 82% on jarda-scented tobacco. A health and national security cess will be levied on the production capacity of pan masala manufacturing units, while bidis will face the new levies on top of an 18% GST rate. A new maximum retail price-based valuation mechanism has been introduced for tobacco products, whereby GST value shall be determined based on the retail sale price declared on the package. The ministry also notified the Chewing Tobacco, Jarda Scented Tobacco and Gutkha Packing Machines (Capacity Determination and Collection of Duty) Rules, 2026. Under the new rules notified on December 31, duty will be calculated based on the maximum rated capacity of packing machines rather than actual output, making it impossible for manufacturers to under-report production.
Possible Question
The government has replaced the GST compensation cess on tobacco with a differentiated excise duty linked to cigarette length and manufacturing capacity. Examine the objectives behind this shift in indirect taxation and assess its implications for public health, revenue mobilisation, and tax compliance.
2. HC flags ‘growing tendency’ in TN to use detention laws
The Madras high court has taken a strong exception to the Tamil Nadu government’s indiscriminate use of preventive detention laws, and warned that such “draconian powers” cannot be deployed to “silence dissenting voices or bypass ordinary criminal law.” In an order passed on December 30, 2025, the court reiterated that personal liberty remains the State’s foremost constitutional obligation and directed the home secretary to initiate departmental action against officials who invoke the Goondas Act against citizens for “extraneous reasons” in an erroneous and mechanical manner, and to prosecute them if necessary. A bench of justices SM Subramaniam and P Dhanabal granted interim bail to a YouTube investigative journalist Varaki, who had been detained as a “sexual offender” under the Tamil Nadu Prevention of Dangerous Activities Act, holding that there were not any sufficient grounds to detain Varaki under the Goondas Act. The bench directed the state to file its counter-affidavit within 12 weeks and also flagged a “growing tendency” among state police officers to invoke the Goondas Act mechanically to prolong the incarceration of accused persons. If this were allowed to continue, it would lead to “disastrous consequences,” the court said. The court added that the right to personal liberty is a fundamental right guaranteed under the Constitution, and any illegal detention, particularly one ordered for extraneous reasons, cannot be permitted to continue “even for an hour”. The court also examined the scope of “public order,” which it said, was a “key requirement” for invoking preventive detention, and reiterated settled Supreme Court jurisprudence that not every breach of law and order qualifies as a threat to public order.
Possible Question
Preventive detention laws are constitutionally permitted but tightly circumscribed. In the light of the Madras High Court’s observations on the misuse of the Goondas Act, examine the distinction between ‘law and order’ and ‘public order’, and discuss the safeguards available to protect personal liberty.
3. Another Hindu man set on fire in Bangladesh
Another Hindu man in Bangladesh was allegedly attacked by a mob of miscreants, who seriously injured him and then set him on fire in Shariatpur’s Damudya region of the country. According to local newspaper ‘Prothom Alo’, the incident took place on New Year’s Eve on Wednesday at around 9.30pm (local time), when the miscreants attacked the businessman, identified as 50-year-old Khokon Chandra Das, seriously injured him, poured petrol on his body and set him on fire near the Keurbhanga Bazar in Koneshwar Union of Damudya. Das jumped into a nearby pond beside the road. Hearing his screams, local people rushed to the scene, prompting the attackers to flee. Locals later rescued him and took him to Shariatpur Sadar Hospital, where he received his initial treatment in the emergency department and was later sent to Dhaka later that night for advanced treatment, as his condition deteriorated. According to sources at the Damudya Police Station, Das, a resident of Tiloi village in the Koneshwar Union, runs a pharmacy and a mobile banking business at Keurbhanga Bazar. Sima Das, wife of the victim, told reporters, “On Wednesday night, criminals attacked him. He recognised two of the attackers, and because of that, they assaulted him with the intention to kill—hacking him and setting fire to his head and face after pouring petrol on him. We have no enemies in the area. We have no disputes with anyone over any matter. We cannot understand why the criminals suddenly targeted my husband.” Last month, two incidents of Hindu youth being lynched were reported in Bangladesh.
Possible Question
Repeated attacks on religious minorities in Bangladesh have raised concerns about human rights and internal stability in India’s neighbourhood. Discuss India’s diplomatic options in responding to such incidents while balancing principles of non-interference, neighbourhood first policy, and regional stability.
4. Govt plans to pull cough syrups out of OTC list
The government is proposing to remove cough syrups from a class of drugs that are allowed to be sold over the counter with less strict licensing and manufacturing norms after cases of adulteration claimed the lives of scores of children in several states recently. The government, on December 29, issued a draft notification proposing to remove the word “syrup” from a listing of cough medication in Schedule K in the Drugs Rules, 1945. Schedule K drugs in India are a specific list of medicines, such as common antiseptics and antacids, which are exempt from certain strict regulations of the Drugs and Cosmetics Act, allowing them to be sold over the counter. An official from the health ministry aware of the matter, on condition of anonymity said, “Following recent cases that involved the deaths of children after allegedly consuming cough syrups in different states, during an advisory committee meeting, experts considered that consumers were buying cough syrups very easily over the counter because they are part of Schedule K. This was leading to the wrongful sale and consumption of cough syrups among people. The committee had earlier suggested making cough syrups prescription-based, following which a notification has been issued proposing the removal of the word ‘syrup’ from Schedule K.” The government has sought suggestions and comments on the changes, to be submitted within a month. “The proposed amendment is a step in the right direction, but by itself, it may not be sufficient to fully curb the misuse of cough syrups… Many of these drugs are available in tablet or capsule equivalents with similar pharmacological effects. If enforcement focuses only on syrups without tightening prescription control across all formulations, there is a real risk of displacement, where misuse simply shifts from syrups to tablets,” said Dr Sanjay K. Jain, HOD, Paediatrics & Neonatology and Medical Director, Maccure Hospital.
Possible Question
The proposal to remove cough syrups from Schedule K of the Drugs Rules marks a regulatory shift from ease of access to patient safety. Examine the strengths and limitations of India’s drug regulatory framework in preventing misuse and ensuring pharmaceutical quality.
5. Speed up release of those who can’t afford bail: Govt to states
The Union home ministry has urged all state chief secretaries and heads of state prisons to expedite release of poor prisoners who have not got bail due to their inability to pay the bail amount, officials aware of the matter said. They added that the ministry has revised its guidelines dealing with underprivileged prisoners following a Supreme Court order of October 8, which sought a review of the existing guidelines and SOPs under the 2023 Support to Poor Prisoners Scheme. Support to prisoners scheme was launched by MHA in 2023 under which financial assistance is provided to states/UTs, which can be used to bail amount of poor prisoners. The assistance is granted in cases where bail is granted but prisoner is unable to pay and stays in jail. The new guidelines make it clear that the scheme will not be applicable to prisoners involved in case such as rape, offences under the Pocso Act, human trafficking, and cases involving national security. This distinction was earlier not explicitly mentioned in the 2023 guidelines, officials said. Other categories of prisoners involved in cases such as drug trafficking, terror acts, money laundering, and corruption cases remain unchanged, they added. According to the new guidelines, if a prisoner is not released from the jail within seven days of the court order, the jail authority must inform the secretary District Legal Services Authority (DLSA), after which the DLSA must immediately arrange for an interaction of the prisoner with a jail visiting lawyer/paralegal volunteer or a civil society representative to verify the prisoner’s case and update the DLSA within 5 days. Under the 2023 guidelines, district magistrates played a key role in approving and releasing funds to help prisoners with their bail amounts. The ceiling on the bail amount has also been raised under the rules from ₹40,000 to ₹50,000. The committee has also been empowered to exercise discretion to pay a higher amount but not exceeding ₹1 lakh.
Possible Question
The revised Support to Poor Prisoners Scheme seeks to address prolonged incarceration due to inability to furnish bail. Critically examine the issue of undertrial detention in India and discuss how legal aid, judicial discretion, and executive schemes can uphold the right to personal liberty.
Editorial Snapshots
A. Detox done, now aim for growth
Gross non-performing assets (NPAs) as a share of total advances of all scheduled commercial banks (SCBs) stood at 2.2% of all advances in September 2025, according to the latest Financial Stability Report (FSR) released by the RBI on December 31. Anybody reading this number on a one-off basis would need to be reminded that this number was 11.2% in 2017-18. The cleaning of bank balance sheets is one of the most important detox exercises for the Indian economy in the last decade. While the number officially reached a peak in 2017-18, there is good reason to believe that the stress had built up from much earlier and came to the fore after the then RBI leadership forced an asset quality review on the banks. Not all of the bad loans were cleaned via recoveries. A large amount has been written off, part of which has required capital infusion into banks from the public exchequer. That India’s banks are now in a healthy shape means that the economy is well-placed to see an investment revival once animal spirits are adequately rekindled. With a big boost to consumption demand via tax cuts in last year’s budget and the government pressing on the gas as far as the reform paddle is concerned in the more recent past and going forward, there is good reason to be hopeful on this front. To be sure, not everything is bright and promising on the financial sector front. The FSR rightly flags the growing turbulence behind an exuberance on the surface as far as global economic, especially financial conditions are concerned. Bursting of an AI bubble, a sudden global liquidity shock etc. are some such downside risks which have been flagged in the FSR. The larger message from the FSR merits careful attention. What the economy, especially its financial sector strategy, needs is a calibrated slingshot approach aimed at pushing growth but pragmatically mindful of the external risks involved.
Possible Question
India’s banking sector has significantly reduced NPAs over the past decade. Analyse the role of asset quality review, recapitalisation, and regulatory reforms in this process, and discuss the risks highlighted by the RBI’s Financial Stability Report in the current global economic environment.
B. Consequences of China’s dam on Brahmaputra
China’s construction of what is being billed as the world’s largest dam on the Tibetan plateau was one of the highlights of a New Year’s address by President Xi Jinping, a clear indication that Beijing is giving short shrift to concerns expressed by lower riparian States such as India and Bangladesh. Work on the $167-billion Motuo Hydropower Station, close to the border with Arunachal Pradesh, began in July, triggering concerns that China will be able to control or divert the Yarlung Tsangpo, which feeds the Siang and Brahmaputra in India and the Jamuna in Bangladesh. Even before work began, the external affairs ministry conveyed India’s concerns to China about the impact of such a mega-dam and urged Beijing to “ensure the interests of downstream States” are not impacted. India also highlighted the need for “transparency and consultation” with downstream countries, but there has been no indication that China has taken any step to address the concerns of lower riparian States. China’s claims that the dam will prioritise ecological protection and bolster prosperity in Tibet ring hollow as Tibetan activists have described it as the latest example of exploitation of their land and resources. Officials in India’s northeastern states describe the new dam as a “water bomb”, and a report from the Lowy Institute warns that China’s control over rivers in the Tibetan plateau effectively gives Beijing a “chokehold” on the Indian economy. The push to build a mega dam in an ecologically sensitive area during a time of climate crisis and growing extreme weather events is fraught with consequences. The Brahmaputra is not just a water channel, but an ecosystem that feeds millions of lives — human, animal and plant. Any reduction in fresh water flow would have a grievous impact downstream, especially in the Bangladesh delta that has been experiencing increased salination and loss of cultivable land. It is imperative for Beijing, Delhi, and Dhaka to have a conversation on China’s Brahmaputra dam.
Possible Question
China’s construction of a mega dam on the Yarlung Tsangpo has serious strategic and ecological implications for downstream countries. Discuss the challenges of transboundary river governance in Asia and evaluate India’s options under international water law and regional diplomacy.
Fact of the day
Pakistan launches governance reforms under IMF lens: Prime Minister Shehbaz Sharif has launched economic-governance reforms to address the vulnerabilities identified in the International Monetary Fund’s (IMF) Governance and Corruption report. The 186- page Governance and Corruption Diagnostic report launched late last year highlighted massive economic leakages due to bad governance and corruption. Under the IMF conditions linked to its ongoing $7 billion bailout package, Pakistan was required to publish “governance action plan based on the recommendations of the Governance Diagnostic Assessment” to address critical governance vulnerabilities by December 31. The Express Tribune reported that the 142-point reform plan launched on Wednesday envisaged undertaking national risk assessment on corruption, making rule-based appointments in key institutions, including the National Accountability Bureau (NAB) and improving its credibility in the eyes of the public. Shehbaz said that the recommendations of the international institutions have been incorporated in his reforms’ plan but it is fundamentally the government’s home grown agenda to “shift from crisis management to institutional building”. Shehbaz said that under his governance plan, there are 59 priority actions and 83 complementary actions. The prime minister said that the government’s focus would now shift from crisis management to institutional building. He said that people of Pakistan have paid a very heavy price during the past two years and “we cannot return to business as usual”.
