daily news capsule
1. Government speeds up 8th pay panel plan
The Union Cabinet chaired by Prime Minister Narendra Modi on Tuesday approved the terms of reference of the 8th Pay Commission, starting the process of increasing the salaries and pensions of about 12 million central government employees and pensioners, likely to be effective from January 1, 2026. The panel must submit its recommendations within 18 months of its formation, meaning the increase will be with retrospective effect. The panel will be chaired by retired Supreme Court judge Ranjana Prakash Desai, with IIM-Bangalore professor Pulak Ghosh as part-time member and Petroleum Secretary Pankaj Jain as member secretary. The 7th Pay Commission has recommended an increase of 23.55% in the pay and allowances of government employees, this change will be effective from January 1, 2016. It has also recommended a 24% increase in pension with a 3% annual increase. Pay Commission recommendations are highly anticipated and closely monitored – so much so that many state governments follow the same for their employees. The Pay Commission recommendations also apply to armed forces personnel and pensioners.
Possible question
Discuss the fiscal and governance challenges arising from periodic pay commission awards in India. How can governments balance employee welfare with fiscal prudence?
2. Tata Trust ousts Mehli Mistry from board member post amid major rift
Tata Trust chairman Noel Tata and vice-chairmen Venu Srinivasan and Vijay Singh have not approved the reappointment of Ratan Tata’s longtime confidant, Mehli Mistry, as a permanent trustee – setting the stage for a 2016-like battle between the Tatas and ousted Tata Sons chief Cyrus Mistry. It is almost certain that Cyrus Mistry’s cousin Mistry will challenge the move in court, potentially throwing the philanthropic entities controlling Tata Sons into uncertainty. On Tuesday, Noel Tata, TVS Motor Company honorary chairman Srinivasan and former defense secretary Singh voted against Mistry’s candidature for the life trustee post, according to an executive with knowledge of the matter. Three other trustees – former Citibank India chief executive Pramit Jhaveri, Mumbai lawyer Darius Khambata and Pune-based philanthropist HC Jahangir – voted in favour. Mistry’s opposition presents two immediate challenges for Noel Tata: an impending legal battle and growing divisions among the trustees.
Possible question
Evaluate the role of corporate governance and charitable trusts in the economic ecosystem of India. How can regulatory frameworks ensure accountability in such large institutions?
3. OpenAI gives 27% stake to Microsoft, completes transformation to profit
Microsoft and OpenAI reached a deal to allow the ChatGPT maker to reorganize itself into a public benefit corporation, valuing OpenAI at $500 billion and giving it more freedom in its business operations. The deal removes a major hurdle for OpenAI to raise capital that has existed since 2019, when it signed a deal with Microsoft that gave the tech giant rights over most of OpenAI’s functions in exchange for the expensive cloud computing services needed to run it. As the popularity of its ChatGPT service grew, those limitations became a notable source of tension between the two companies. CEO Sam Altman will not get equity in the reorganized company, an OpenAI spokesperson said, contrary to discussions last year that he would get equity. The spokesperson said the company has no plans to focus on a potential public offering. Microsoft will still have a stake of about $135 billion, or 27%, in OpenAI Group PBC, which will be controlled by the OpenAI Foundation, a nonprofit, the companies said. The Redmond, Washington-based firm has invested $13.8 billion in OpenAI, with Tuesday’s deal meaning Microsoft has earned a return of nearly 10 times its investment.
Possible question:
Discuss the implications of OpenAI’s transition to a public benefit corporation. Examine what this means for innovation, public accountability, and the global governance of artificial intelligence.
4. Government refineries examining Russia’s oil alternatives after sanctions
India’s state refiners are considering whether they can continue to take some discounted Russian oil cargoes by relying on smaller suppliers instead of energy giants Rosneft PJSC and Lukoil PJSC, both of which were blacklisted by the US last week. Since the latest round of US sanctions was announced, refiners including Indian Oil, Bharat Petroleum and Hindustan Petroleum have been out of the market for Russia’s benchmark grade Ural crude. According to senior refinery officials, they are instead waiting for government direction and considering their options. With other major producers Surgutneftegas PAO and Gazprom Neft already blacklisted, processors are trying to understand how much can be bought from non-sanctioned entities in Russia and at what price. Russian oil flows are expected to decline, with private refiner Reliance Industries hit hardest, as it has spent most of this year buying Urals through a term contract with Rosneft. Reliance, by far the biggest buyer of Urals in India, has rushed to buy alternative crude from the Middle East and the US, in line with its state-owned peers. The only exception in India may be Nayara Energy, which is backed by Rosneft and already approved by Europe and the UK. It has shown no signs of curbing Russian purchases.
Possible question
How do international sanctions affect India’s energy security strategy? Check out the options available to diversify India’s crude oil imports.
5. Government eyes Union Bank, BOI merger plan
The government is preparing a new blueprint for the merger of select public sector banks as it aims to grow such lenders and streamline overlapping operations under banking sector reforms planned over the next few years, three people familiar with the matter said. The discussion in the finance ministry is around the merger of Union Bank of India and Bank of India, both headquartered in Mumbai, the first person cited above said. If the merger goes through, it will become a state-run lender second only to State Bank of India, the country’s top bank in terms of assets. Today the second largest public sector bank is Bank of Baroda with total assets of 18.62 trillion by 30 June 2025. This asset base is fourth among all banks, including private, after HDFC Bank and ICICI Bank. The assets of the merged Union Bank of India and Bank of India will be 25.67 trillion, standing shoulder to shoulder with ICICI Bank ( 26.42 trillion). The ministry is also considering the option of merging Indian Overseas Bank and Indian Bank, both Chennai-based lenders with a significant presence in Tamil Nadu and neighboring states, said the first person cited above. As part of the plan, Punjab & Sind Bank and Bank of Maharashtra, lenders that rank bottom on assets among public sector lenders, are being considered as potential candidates for privatization in later stages.
Possible question
Critically analyze the role of bank mergers in strengthening the financial sector of India. What risks do such consolidation pose to financial inclusion and regional credit needs?
Editorial Snapshot
A. Caste plus politics of Bihar
In an interview with this newspaper, Rashtriya Janata Dal (RJD) leader and chief ministerial face of the grand alliance Tejashwi Yadav spoke in detail about the new development agenda for Bihar, jobs, women’s financial empowerment, schemes and law and order. In its absence was anything evident about caste empowerment, which was the fundamental idea of the RJD under the leadership of Yadav’s father Lalu Prasad. This shift – evident in the grand alliance manifesto released on Tuesday – is not just a tactical maneuver, but an acceptance of a new political reality in Bihar, no longer limited exclusively by caste. Since the advent of Mandal politics in the 1990s, caste identity has been the basis of electoral politics in Bihar. During the 15 years of RJD rule, empowerment of oppressed communities, described in broad terms as the politics of social justice, defined the political discourse and governance. Nitish Kumar broke this paradigm by exploiting the hierarchy within the OBC and Dalit spectrum and introducing the gender dimension into the empowerment discourse. Kumar’s own political lineage – the JP movement and Mandal – helped him pursue this politics in alliance with the BJP. RJD was late to understand that Mandal politics has become more subtle than during Lalu’s rule. Under Tejashwi’s leadership, the party is changing its stance and taking pains to explain that it is not just a Muslim-Yadav party and a vehicle of identity politics. The change in narrative has also been emphasized by Prashant Kishor, a political novice but effective communicator, who has been raising governance issues in his campaign. This does not mean that caste is no longer an electoral factor, but rather suggests that parties are pursuing governance, while issues like caste census have been relegated to the background. This change in politics, made possible by the rise of transactional voters, could be a turning point for Bihar politics.
Question: Critically assess the emerging role of caste in the politics of Bihar. To what extent are governance issues and transactional voting reshaping the traditional caste-based political system?
B Jaishankar’s clear statement against America’s double speech
External Affairs Minister S Jaishankar highlighted India’s concerns, such as rising barriers to access to energy trade and markets, at the East Asia Summit in Malaysia, which came at a time of growing disillusionment and concerns over the disruptive effects of the US administration’s trade and tariff policies. Jaishankar also raised the selective application of principles and the failure to practice what is preached – an apparent reference to the doublespeak at the heart of US and Western sanctions aimed at India, which is not the only buyer of Russian energy. These sanctions and punitive actions have already created market distortions, driving up crude oil prices and raising fears of supply shortages. It has long been India’s case that the Russia Ukraine war’s cascading effect on the food and fuel security of countries in the Global South is a major reason for ending the conflict. Many of the US actions against Russia are a result of President Donald Trump’s failure to end the war in Ukraine, but this cannot be a reason to punish India, which has, in fact, cited the previous US administration’s insistence as a reason to increase purchases of Russian oil in 2022. Jaishankar said at the East Asia Summit that the world community will “inevitably respond” to the current churn through adjustment, reckoning, fresh understanding and flexible solutions. In this context, he highlighted technology, market size, digitalisation, connectivity and talent mobility – all key attributes that India possesses. India may consider its chairmanship of BRICS next year – and possibly also work with China in the SCO – to ignite the mantra of multi-polarity while playing a leading role in the drive to find solutions to pressing problems and challenges.
Question: How do unilateral sanctions by major powers affect the economic sovereignty of developing countries like India? And how does the idea of multipolarity fit into this?
today’s fact
UN assessments show countries are delaying critical climate action: A UN analysis released Tuesday finds most of the world’s countries have missed a key deadline to update their climate pledges, leaving international efforts to curb global warming dangerously short of what scientists say is needed to avoid catastrophic consequences. Only 64 of the 195 parties to the Paris Agreement have updated their nationally determined contributions (NDCs) – formal climate commitments that underpin international efforts to limit temperature rise. The shortfall is particularly acute among the world’s biggest polluters: China and India have not yet formally submitted their updates, while doubts remain over whether the US will honor commitments made under the previous administration. Yet, the limited presentations, covering only 30% of global emissions in 2019, also suggest that global emissions will decline by about 10% by 2035 – a significant change in direction but very little.
