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General Studies Paper – II: Governance, Constitution, Polity, Social Justice, and International Relations

Context

The relations between India and the Arab world have now evolved beyond centuries-old civilizational ties into a 'deep strategic partnership.' The convergence of India's 'Link West' policy and the Arab nations' 'Look East' policies has made both indispensable to each other. Amidst current global instability and regional conflicts, India has emerged as a 'stability-providing power.' This meeting is not limited to economic interests alone but creates a shared geopolitical front to strengthen the voice of the Global South, counter-terrorism, and ensure maritime security, which is poised to play a decisive role in the emerging new world order.

About Arab League

  • Origin: It is an intergovernmental organization encompassing all Arab states in the Middle East and North Africa. It was established on March 22, 1945, following the adoption of the 'Alexandria Protocol' in 1944.
  • Members: Currently, it has 22 members.
  • Founding Members: Egypt, Iraq, Lebanon, Saudi Arabia, Syria, Transjordan (now Jordan), and Yemen.
  • Headquarters: Cairo, Egypt.

Why in News?

This meeting has been the center of global discussion for the following reasons:

  • A Decade-long Gap: This was the first such major diplomatic event since 2016 (Bahrain), marking a significant milestone in India's 'Link West' policy. This is the 2nd India-Arab Foreign Ministers' Meeting held in New Delhi on January 30-31, 2026.
  • Pahalgam Terror Attack: The official condemnation of the terrorist attack in Pahalgam, Kashmir, by Arab nations is being seen as a major diplomatic victory for India.
  • Regional Tensions: The meeting took place at a time when West Asia is navigating Houthi attacks in the Red Sea and complex ceasefire processes in Gaza.

India-Arab Foreign Ministers' Meeting

  • This is the highest institutional mechanism for dialogue between India and the 22-member Arab League.
  • It was co-chaired by India's External Affairs Minister, Dr. S. Jaishankar, and the Foreign Minister of the United Arab Emirates (UAE).
  • Representatives from all significant countries of the Arab world participated in this summit, underlining India's growing global stature.

Main Objective of the Meeting

  • Historic Return: This was the first such meeting since 2016 (Bahrain) in which all 22 member states of the Arab League participated.
  • Shared Vision: Prime Minister Narendra Modi described the Arab world as India's "extended neighborhood" and emphasized exploring new opportunities in technology, energy, and trade.
  • Global Challenges: The meeting occurred while the world grapples with challenges like the new policies of the U.S. (Trump administration), Iran-Israel tensions, and instability in the Red Sea.

Key Highlights of the Delhi Declaration

A joint statement was issued after the meeting, titled the 'Delhi Declaration.' Its major pillars are as follows:

  • Peace and Security: Both sides pledged to respect multilateralism and the sovereignty of states.
  • Crackdown on Terrorism: A policy of "Zero Tolerance" against terrorism was reaffirmed. Specifically, Arab nations strongly condemned the Pahalgam terror attack in Kashmir, which India views as a major diplomatic achievement.
  • The Palestine Issue: India and Arab nations supported an independent and sovereign State of Palestine based on the 1967 borders, living side-by-side in peace with Israel.
  • Regional Stability: Attacks by Houthis on ships in Yemen were condemned, and emphasis was placed on ensuring safe passage in the Red Sea.

Economic and Strategic Significance

The relationship between India and Arab countries is not limited to politics; it has solid economic foundations:

  • Trade: Trade between India and Arab countries exceeds $240 billion.
  • Energy Security: India imports 47% of its crude oil and over 50% of its fertilizers from these countries.
  • Indian Diaspora: Approximately 9 million Indians live and work in these countries, serving as a strong bridge between the two regions.
  • New Initiatives: Regional frameworks like STREAM (Suez Canal–Red Sea Economic and Maritime Development Initiative) were discussed to promote economic integration.

Diplomatic Balancing (The Balancing Act)

The highlight of this meeting was India's "strategic maturity":

  • India appealed for peace without naming Israel, ensuring that ongoing ceasefire efforts were not hindered.
  • India maintains strong ties with Israel on one hand, while fully upholding its historical and cultural relations with Arab nations and Palestine on the other.

Analysis

This meeting demonstrates that India is no longer just a 'Buyer' but has become a 'Security Provider' and 'Technology Partner' for the Arab world. The soft and supportive stance of Arab countries regarding the Kashmir issue indicates that they have stopped viewing India through the prism of Pakistan.

Way Forward

  • Institutional Continuity: There should not be a 10-year gap in such high-level meetings; they should be made biennial (every two years).
  • Digital Economy: Expanding digital infrastructure like UPI and RuPay across the Arab world.
  • Food Security: Increasing investment in agriculture and logistics through the 'India-Middle East-Europe Economic Corridor' (IMEC).

Conclusion

The India-Arab meeting is not merely a diplomatic formality but a "civilizational reunion." The Delhi Declaration has made it clear that from New Delhi to Cairo and Riyadh, there is a shared vision for peace and progress. This partnership will play a decisive role in shaping the direction of the 'Global South' in the coming decade.

General Studies Paper – II: Governance, Constitution, Polity, Social Justice and International Relations


Context

In the third decade of the 21st century, the global order is at a historic turning point. The ‘Liberal Global Order’ established after World War II and globalisation based on free trade are now dying. Recent ‘tariff warnings’ by U.S. President Donald Trump and the rising dominance of China are signs that the world is moving away from ‘cooperation’ back toward ‘mercantilism’. In such a scenario, the question is whether India is prepared for this new, harsh order?

The Death of Globalisation and the Rise of ‘Mercantilism’

Globalisation was not just an expansion of trade, but a political system that rested on democracy and multilateral institutions.

  • New Paradigm: Trade is now being viewed as an instrument of ‘state power’.
  • Zero-Sum Game: Trade is no longer a deal for mutual benefit, but has become a battlefield where exports are ‘strength’ and imports are ‘weakness’.
  • Assertion of Sovereignty: Countries are now prioritising ‘self-reliance’ and ‘domestic protectionism’ over liberal values.

The Influence of China and the Collapse of the Multilateral System

China utilised the global system but did not follow its rules.

  • Alternative Model: China demonstrated that one can become an economic superpower even without democracy and without a free information system.
  • Excess Capacity: China’s trade surplus has crippled the domestic manufacturing of developing countries like India.
  • Failure of Institutions: Institutions like the WTO are no longer effective, resulting in the loss of collective bargaining power for developing countries.

Internal Challenges Facing the Indian Economy

India is “too large to ignore, but too poor to matter”.

  • Erosion of Demographic Dividend: Over the last 15 years, India has not been completely successful in converting its youth population into ‘productive capacity’.
  • Imbalance of the Social Pyramid: India's economic structure has become divided into a narrow apex (the wealthy class) and a vast, powerless base (the poor class).
  • Lack of Infrastructure: Lack of public investment in sectors like education and health has limited the state's capacity.

The Aspiration of ‘Vishwaguru’ vs Institutional Foundations

India claims to become a ‘Vishwaguru’ on the global stage, but the necessary infrastructure for this is weak:

  • State Capacity: A system where the government can effectively implement policies and provide justice.
  • Social Cohesion: Social stability is not possible without the benefits of development reaching the last person in society.
  • Lack of Innovation: Except for Digital Public Infrastructure (DPI), India still lags behind global standards in other sectors.

Areas of Opportunity for India

Despite these challenges, India can lead in certain areas:

  • Digital Public Infrastructure (DPI): Mechanisms like UPI and Aadhaar are India's identity at the global level.
  • Renewable Energy: India's initiatives in the field of green energy can give it a strategic edge.
  • Services Sector: India's dominance in information technology and consultancy services remains intact.

Way Forward

India must move away from ‘rhetoric’ and focus on ‘solid institutional reforms’:

  • Social Contract: Equal distribution of the benefits of development must be ensured to prevent social unrest.
  • Investment in Human Capital: To become a ‘Vishwaguru’, not just diplomacy, but an educated and healthy workforce is required.
  • Diverse Supply Chain: To reduce dependence on China, the ‘China Plus One’ strategy must be implemented at the ground level in the manufacturing sector.

Conclusion

The end of globalisation means that no country can move forward with the help of ‘crutches’ anymore. This is a moment of self-introspection for India. If we do not strengthen our state capacity and social unity, the slogan of ‘Vishwaguru’ will remain merely a rhetorical ornament. Real power comes from ‘the strength of institutions’ and ‘economic self-reliance’, not from speeches alone.

General Studies Paper – II: Governance, Constitution, Polity, Social Justice and International Relations

Context

Recently, the Government of India has made significant amendments to the New Drugs and Clinical Trials Rules, 2019. The primary objective of these amendments is to reduce regulatory hurdles in the pharmaceutical sector and promote “ease of doing business”. This step by the government is considered a major effort towards strengthening India’s position as the “pharmacy of the world”.

What are “Quick Pills”?

“Quick Pills” refers to such swift and simple reforms made by the government in drug regulations whose objective is to accelerate the process of pharmaceutical research and development and reduce regulatory barriers.

That is —

  • By removing the requirement of licences
  • By implementing a prior-intimation system
  • By reducing approval timelines

The government has attempted to make the drug development process faster and smoother, which has been metaphorically described as “Quick Pills”.

Why in Discussion?

  • The government has abolished the previously mandatory ‘test licence’ required for small quantities of drugs manufactured for research and testing purposes.
  • In its place, only a ‘prior-intimation mechanism’ has been introduced, which has become the main subject of discussion.

Key Changes in the Rules

  • Intimation instead of licence: For research and analysis, giving a ‘notice of intent’ on the SUGAM portal will now be sufficient instead of obtaining a physical licence.
  • Reduction in timeline: The statutory licensing period for high-risk drugs (narcotic and psychotropic) has been reduced from 90 days to 45 days.
  • Digitisation: The entire process has been made paperless and online.
  • BE/BA studies: For low-risk bioavailability and bioequivalence studies, only online intimation has been made mandatory.

Why were these Changes Needed?

  • Global competition: After COVID-19, global demand for rapid delivery of medicines has increased.
  • Delay in research: Earlier, complex licensing procedures caused months of delay in research.
  • Cost reduction: Saving time reduces research costs, which can make medicines cheaper.

Impact of these Reforms

  • End of ‘Licence Raj’: Dependence on physical documents and repeated visits to government offices will end.
  • Significant time savings: Drug development timelines are expected to reduce by at least 3 months.
  • Encouragement to innovation: Experimentation will become easier for small start-ups and researchers.
  • Economic benefits: Time savings will increase investor confidence and boost foreign direct investment (FDI) in the sector.

Limitations and Concerns

  • Threat to quality: Simplification of rules raises fears of relaxation in quality control.
  • Lack of monitoring: After removal of licensing, ensuring compliance with Good Manufacturing Practices (GMP) may become difficult.
  • Past incidents: Deaths abroad caused by Indian cough syrups in recent years have affected the image of India’s pharma sector. Reduced inspection could prove fatal.
  • Possibility of misuse: There remains a risk that drugs produced for research could be commercially misused.

Deeper Analysis

These reforms represent a major tilt towards “speed” and “efficiency”. India has the highest number of US-FDA approved manufacturing plants in the world, yet the domestic regulatory system has often been known for complexities. However, it must be remembered that in the pharmaceutical sector, “speed” can never substitute “patient safety”. Deregulation can succeed only when supported by a strong post-market surveillance mechanism (monitoring after drugs enter the market).

Way Forward

  • Automated monitoring: Random audits and surprise inspections should follow the intimation mechanism.
  • Strict penalties: Heavy fines and blacklisting provisions should be enforced for violation of quality standards.
  • Digital tracking: Technologies such as blockchain may be used to monitor drug supply chains.
  • Capacity building: The number and technical capability of state and central drug inspectors should be increased.

Conclusion

These amendments to drug rules are a bold step toward making India’s pharmaceutical sector globally competitive. Ending the ‘Licence Raj’ is commendable, but compromising on quality could prove self-destructive. Ultimately, India must develop an ecosystem where the “speed of innovation” and the “quality of products” complement each other rather than act as obstacles.

General Studies Paper – III: Technology, Economic Development, Bio-diversity, Environment, Security, and Disaster Management


Context

The fundamental principle of 'Fiscal Federalism' in the Indian federal system is the equitable distribution of resources between the Centre and the States. In recent years, it has been observed that the financial position of States is increasingly dependent on 'market borrowings' rather than tax devolution from the Centre. The fiscal autonomy of States is gradually eroding, raising question marks over the concept of 'Cooperative Federalism'.

What are Cess and Surcharge?

  • Cess: It is a tax levied over and above the tax for a specific purpose (such as education, health, or road construction). It can only be used for the specific task for which it was collected.
  • Surcharge: It is a 'tax on tax', primarily levied on the high-income group. It goes directly into the government treasury.
  • Key Fact: Under Articles 270 and 271 of the Indian Constitution, it is not mandatory to share the 'Cess' and 'Surcharge' collected by the Centre with the States.

Why in Discussion?

  • This subject recently came into discussion when data revealed that several major States (such as Tamil Nadu and Maharashtra) have raised a large portion of their revenue receipts through 'State Development Loans' (SDLs).
  • Concerns are being raised that while the States' share in taxes from the Centre is 41% on paper, the actual devolution has significantly decreased due to the increasing trend of 'Cess' and 'Surcharge'.

Increasing Dependence on Debt (SDLs) and Debt-GSDP Ratio

The loans taken by States from the market for their daily needs and welfare schemes (pensions, health insurance) are called SDLs.

  • Debt-GSDP Ratio: According to the FRBM Committee, this ratio for States should be within 20%. However, currently, the debt of many States has reached between 26% and 35% of their GDP.
  • Essential Standards: For a healthy economy, the Fiscal Deficit of States should remain within 3% of their GSDP, with permission up to 3.5% under special circumstances.

Impact of Cess and Surcharge

  • Since 'Cess' and 'Surcharge' are not part of the divisible pool, the Centre's total tax receipts increase, but the actual share received by the States decreases.
  • This leads to a shortage of funds for discretionary spending for the States, and they remain entangled in salary and debt interest payments instead of capital investment (roads, bridges, industries).

GST and State Autonomy

The advent of GST in 2017 has limited the sovereign rights of States to collect taxes.

  • 15th Finance Commission and Recommendations: The Commission has recommended 41% for tax devolution to the States.
  • Parameters of Division: The 6 bases fixed by the Commission for the distribution of money are challenging for industrialized States:
    1. Income Distance (45%): This gives more money to poor States.
    2. Population (2011 Census) (15%): Benefits large States.
    3. Area (15%): Based on administrative costs.
    4. Demographic Performance (12.5%): Reward for population control.
    5. Forest and Ecology (10%): For environmental protection.
    6. Tax Effort (2.5%): 'Incentive' for States increasing their income.
  • Main Dispute: Developed and industrialized States are demanding that the percentage of 'Tax Effort' be increased from 2.5%, so that States generating more tax for the Centre can receive their due reward.

Crisis for the Future

If debt remains the main pillar of the financial system, the following crises may arise in the future:

  • Cut in Capital Expenditure: Shortage of funds for development works.
  • Debt Trap: Taking new loans to pay off old ones.
  • Decrease in Private Investment: As government borrowing increases, credit becomes expensive for the private sector.

Analysis

The current situation indicates that India's fiscal structure is becoming unbalanced. The Centre has unlimited means to mobilize resources, while the States have more responsibilities (education, health, agriculture). The erosion of tax autonomy after GST and the shrinkage of the divisible pool have turned States into market debtors.

General Studies Paper – III: Technology, Economic Development, Biodiversity, Environment, Security, and Disaster Management


Context

The Economic Survey 2025-26, presented in Parliament by the Union Finance Minister, is the official "report card" of the Indian economy. This document is not just a statistical summary but a blueprint for the future strategy of Indian governance.

What is the Economic Survey 2025-26?

It is the flagship document of the Ministry of Finance that details the performance of the economy in the previous financial year. It is prepared by the Department of Economic Affairs under the leadership of the Chief Economic Adviser (CEA).


Economic Survey vs. Union Budget

  • Survey: It sets the ground for the budget by presenting the status, challenges, and future prospects of various sectors. It is presented in Parliament before the budget to assist in understanding economic policies and resource allocation.
  • Budget: The government budget is an annual financial statement that presents the plan for income and expenditure for the next financial year. It determines the collection of resources and their utilization, forming the basis of economic policies. It is not merely a statement of receipts and expenditures but an important document for development and policy-making.

Key Highlights of Economic Survey 2025-26

Macroeconomic Status

  • GDP Growth: India has maintained its strong momentum. The real growth rate for Financial Year 2026 (FY26) is estimated at 7.4%. For FY27, it is projected to be between 6.8% and 7.2%.
  • Inflation: Consumer Price Index (CPI) based inflation stood at a historic low of 1.7%.
  • Fiscal Deficit: It is estimated to reduce to 4.4% of GDP, significantly lower than the 9.2% in FY21.
  • Banking Health: Gross Non-Performing Assets (GNPA) have dropped to a multi-decade low of 2.2% (as of September 2025).

Sectoral Performance

  • Agriculture: A historic shift has been observed where horticulture production (362.08 MT) has exceeded foodgrain production for the first time. Animal husbandry (6.1%) and fisheries (7.2%) are also driving growth.
  • Industry: Recovery in the manufacturing sector continues, with a growth rate of 9.13% in Q2 FY26. The PLI scheme has generated 12.6 lakh jobs.
  • Services Sector: It remains the main driver of the economy, with its share in nominal GDP increasing to 53.6%.

Infrastructure and Connectivity

  • Highways: Since 2014, high-speed corridors have increased tenfold to 5,364 km.
  • Railways: 99.1% electrification has been achieved.
  • Aviation: India has become the world's third-largest domestic aviation market; the number of airports has increased to 164.
  • Space: India became the fourth nation to achieve autonomous satellite docking (SpaDeX).

Human Development and Employment

  • Education and Health: Maternal Mortality Ratio has decreased by 86% since 1990. Infant Mortality Rate (IMR) has dropped to 25 (from 40 in 2013).
  • Poverty: The Multidimensional Poverty Index (MPI) has decreased from 55.3% to 11.28%.
  • Employment: 56.2 crore people were employed in Q2 FY26, with 8.7 lakh new jobs added in the same quarter.

11-Point Summary

  1. Growth and Stability: India remains the fastest-growing major economy for the fourth consecutive year.
  2. Fiscal Consolidation: The tax base has expanded; Income Tax Returns have increased from 6.9 crore (FY22) to 9.2 crore (FY25).
  3. Monetary Management: The banking sector is in its healthiest state in decades. The number of Jan Dhan accounts has reached 55.02 crore.
  4. External Sector: India's foreign exchange reserves are at a record high of $701.4 billion, sufficient for 11 months of imports.
  5. Inflation Control: Inflation remained historically low (1.7%) due to the reduction in food and fuel prices.
  6. Agricultural Diversification: Horticulture and digital mandis (e-NAM) have improved farmers' income.
  7. Manufacturing and Innovation: India's rank in the Global Innovation Index has improved to 38th (2025).
  8. Infrastructure Multiplier: Effective Capital Expenditure (CapEx) has reached a historic level of 4% of GDP.
  9. Human Capital: Focus on leveraging the demographic dividend with the expansion of IITs, IIMs, and AIIMS.
  10. Social Security: 31 crore workers are registered on the e-Shram portal, of which 54% are women.
  11. Strategic Vision: The survey proposes a three-tier framework to make India indispensable in the global supply chain.

Conclusion

The Economic Survey 2025-26 portrays an economy that has stabilized inflation, expanded infrastructure, and established itself as an indispensable power on the global stage. India is now moving towards becoming not just a fast-growing economy, but a "systemically indispensable" global power.