The Hindu
UPSC News Analysis
Friday, March 13, 2026 | Bengaluru City Edition
Structured analysis with mind-maps, flowcharts, tables, MCQs & model questions
The ongoing U.S.-Israel-Iran conflict has severely disrupted global LPG supply chains, exposing India’s 60% import dependence on Gulf countries. With the Strait of Hormuz effectively closed by Iran’s Islamic Revolutionary Guard Corps (IRGC), India faces acute shortages of commercial LPG cylinders, forcing restaurants to shut down and panic-buying to surge.
The Union Petroleum Minister assured Parliament that crude supply is secured, and a 20% cap on commercial LPG allocation by oil-marketing companies (OMCs) has been imposed to prevent hoarding. However, the crisis has revealed India’s structural vulnerabilities in strategic energy storage and diversification.
- Essential Commodities Act, 1955: Enables government to regulate production, supply and distribution of essential commodities including petroleum.
- Essential Services Maintenance Act (ESMA): Invoked to regulate commercial LPG supply and prevent black-marketing during the crisis.
- Petroleum and Natural Gas Regulatory Board (PNGRB): Regulates the downstream petroleum and natural gas sector in India.
- Strategic Petroleum Reserves (SPR): India has underground SPRs at Visakhapatnam (1.33 MMT), Mangaluru (1.5 MMT), and Padur (2.5 MMT) – primarily for crude oil, not LPG.
- PMUY (Pradhan Mantri Ujjwala Yojana): Added 10 crore LPG connections without corresponding expansion of strategic storage infrastructure.
- Strait of Hormuz: Critical maritime chokepoint connecting Persian Gulf to Arabian Sea; ~20–34% of global traded oil passes through it; 90% of India’s LPG imports transit this route.
- IEA (International Energy Agency): Released 400 million barrels from global strategic reserves as emergency measure.
| Dimension | Current Status | Implication |
|---|---|---|
| Import Dependence | ~60% LPG from Gulf (Qatar 34%, UAE 26%) | High vulnerability to geopolitical shocks |
| Domestic LPG Production | ~13 MMT/yr from refineries (25% boost possible) | Short-term buffer but insufficient (~50% gap) |
| Strategic LPG Storage | 1.4 lakh MT (Vizag + Mangaluru) = <2 days consumption | Critically inadequate; zero buffer capacity |
| Supply Diversification | New sources: U.S., Norway, Canada, Algeria, Russia | U.S. cargo takes 45 days shipping time |
| PMUY Connections | 10 crore households; ~33 crore families served | Social vulnerability if supply disruption continues |
| Commercial LPG | Fully deregulated; no cap previously | Led to hoarding; 20% cap now imposed |
(Feb 28)
Strait of Hormuz
imports disrupted
shortage; panic buying
allocation cap
(partially)
- Structural storage deficit: India’s LPG strategic storage of 1.4 lakh MT covers less than 2 days of consumption — far below the IEA benchmark of 90 days for crude. No equivalent standard exists for LPG.
- PMUY expansion without infrastructure: Government added 10 crore LPG connections under PMUY but did not create commensurate strategic reserves — a classic case of welfare without resilience planning.
- Deregulated commercial market loophole: The fully deregulated commercial LPG market (no registration, no purchase limits) made hoarding structurally possible — a policy design flaw exposed only by crisis.
- Diversification delay: Despite years of geopolitical signals (U.S.–Iran tensions since 2019), India only began active diversification (U.S., Norway, Canada) during the crisis — reactive, not proactive policy.
- Domestic boost is limited: The 25% increase in domestic LPG production covers only ~10% of daily consumption gap — insufficient without rapid imports.
- Geopolitical tightrope: India’s co-sponsorship of the UNSC resolution against Iran, while seeking Iranian permission for shipping, reveals a contradictory diplomatic posture that may complicate energy negotiations.
1. It connects the Persian Gulf with the Red Sea.
2. Approximately 20–34% of the world’s traded oil passes through it.
3. India’s LPG imports through this strait account for nearly 90% of its total LPG imports.
Which of the statements given above is/are correct?
- (a) 1 and 2 only
- (b) 2 and 3 only
- (c) 1 and 3 only
- (d) 1, 2 and 3
Explanation: The Strait of Hormuz connects the Persian Gulf with the Arabian Sea (not the Red Sea). Statement 2 is correct — roughly 20–34% of globally traded oil transits through it. Statement 3 is correct — approximately 90% of India’s LPG imports route through the Strait of Hormuz, making it a critical energy chokepoint for India.
The Government of Karnataka has constituted a Committee on Responsible Artificial Intelligence (AI), chaired by Kris Gopalakrishnan (co-founder, Infosys) and co-chaired by N. Manjula (Secretary, Dept. of Electronics, IT, Biotechnology & S&T). The committee held its first meeting on March 12, 2026.
Its mandate is to develop a Responsible AI Policy and implementation roadmap for Karnataka, covering legality, fairness, non-discrimination, privacy, safety, transparency, accountability, and human oversight — positioning Karnataka as the first Indian state to have a comprehensive responsible AI framework.
- India’s National AI Strategy (NITI Aayog, 2018): “AI for All” – emphasized healthcare, agriculture, smart cities, education.
- IndiaAI Mission (2024): ₹10,372 crore allocation; includes compute infrastructure, datasets, application development, safety & trust frameworks.
- Digital Personal Data Protection (DPDP) Act, 2023: Key legislation governing data used by AI systems in India.
- EU AI Act (2024): World’s first comprehensive AI regulation — risk-based framework classifying AI into unacceptable, high, limited and minimal risk.
- OECD AI Principles: Internationally endorsed principles on responsible AI (transparency, accountability, robustness).
- Karnataka’s ‘Deeptech Decade’: State initiative linking AI innovation to economic growth, job creation, and citizen services.
- Global AI Governance Index: India scores low on regulatory readiness relative to China, EU, and U.S.
| Principle | What It Means | UPSC Relevance |
|---|---|---|
| Fairness | AI must not discriminate based on caste, gender, religion | Art. 14, 15, 16 – Equality provisions |
| Transparency | Citizens must know when AI is making decisions about them | Art. 19 – Right to know; RTI framework |
| Accountability | Govt. agencies must be answerable for AI-driven decisions | Constitutional morality; Rule of Law |
| Human Oversight | Humans must remain in the loop for high-stakes decisions | Fundamental rights cannot be auto-decided |
| Privacy & Safety | AI systems must not misuse personal data | K.S. Puttaswamy Judgment, DPDP Act |
| Inclusion | AI benefits must reach marginalised communities | SDG 10 – Reduced Inequalities |
- Federalism dimension: AI governance requires coordination between Centre and States. Karnataka’s independent framework may create regulatory fragmentation if not aligned with national policies — a potential federal tension.
- Industry-dominated committee: With an industry co-founder chairing, there is risk of regulatory capture — where AI governance principles are shaped to benefit industry over citizen protection.
- No binding legislation yet: The committee will develop a “policy and roadmap” — not a law. Without statutory backing, recommendations risk being advisory-only with limited enforceability.
- Algorithmic accountability gap: India lacks a dedicated AI regulator or audit mechanism. Even EU AI Act required years of negotiation. India risks deploying AI in public services faster than governance can keep pace.
- Deepfakes and misinformation: PIB fact-check unit flagged 50 AI deepfakes in one month (from Pakistani propaganda accounts). Responsible AI governance must address adversarial uses, not just domestic deployment.
1. It was launched with an allocation of ₹10,372 crore.
2. It includes a dedicated AI Safety and Trust framework.
3. It is implemented by the Ministry of Science and Technology.
- (a) 1 only
- (b) 1 and 2 only
- (c) 2 and 3 only
- (d) 1, 2 and 3
Explanation: The IndiaAI Mission was approved with an allocation of ₹10,372 crore and does include pillars covering AI Safety and Trust. However, it is implemented by the Ministry of Electronics and Information Technology (MeitY), not the Ministry of Science and Technology. Hence statement 3 is incorrect.
India co-sponsored a GCC-led UNSC resolution along with 134 countries demanding the “immediate cessation of all attacks by Iran” on GCC countries and condemning interference with navigation through the Strait of Hormuz. The resolution was passed 13-0 with Russia and China abstaining.
However, India has conspicuously not condemned U.S.-Israeli strikes on Iran — including the killing of 1,255+ people, bombing of a school killing 150 schoolgirls, and sinking of Iranian ship IRIS Dena which India had hosted for exercises. This asymmetric response has drawn sharp criticism from senior Indian former diplomats as inconsistent with India’s “strategic autonomy” doctrine.
- Non-Alignment Movement (NAM): India’s historical doctrine of not taking sides in great-power conflicts; though now evolved into “strategic autonomy.”
- India-Iran Relations: Strategic cooperation on Chabahar Port (access to Central Asia/Afghanistan); India discontinued oil imports from Iran in 2019 under U.S. sanctions pressure. Only ~9,000 Indians in Iran vs. 10 million in GCC.
- India-GCC Relations: ~10 million Indian diaspora; ~90% of India’s LPG imports; remittances; India’s largest trading bloc partner.
- UNSC Resolution Mechanism: Under Chapter VI (peaceful settlement) or Chapter VII (coercive measures); India’s co-sponsorship signals endorsement of narrative framing.
- IMEC (India-Middle East-Europe Economic Corridor): Announced 2023; stalled after October 7 Hamas attack; further delayed by current conflict.
- India-U.S. Strategic Partnership: Major Defence Partner status; FTA negotiations; tariff disputes under Trump.
| India’s Stated Position | Criticism / Contradiction | Strategic Implication |
|---|---|---|
| Co-sponsored GCC UNSC resolution condemning Iran | Did not condemn U.S.-Israeli strikes; asymmetric response | Perceived as aligning with U.S./GCC bloc; weakens “autonomy” narrative |
| Modi visited Israel days before conflict began | Signal of affiliation at critical diplomatic moment | Strained Iran ties; complicates energy diplomacy |
| Prioritised GCC diaspora (10M) and energy (90% LPG) | Iran: Chabahar, Central Asia connectivity overlooked | Transactional approach may harm long-term connectivity ambitions |
| Condemned attacks on GCC countries, Dubai, Thai ship | Silent on bombing of school killing 150 schoolgirls | Selective civilian concern undermines moral authority |
| MEA: “We prioritise safety of all civilians” | Former FSs: “Tactical subservience = strategic irrelevance” | Risk of losing Iran as strategic partner permanently |
+ 90% LPG
+ Connectivity
+ FTA pressure
Response
Autonomy at Risk
- Abandonment of strategic autonomy: India’s refusal to even condole the death of the Iranian Supreme Leader (assassinated in a U.S.-Israeli strike) violates diplomatic norms — as noted by former FS Kanwal Sibal. Contrast with India’s vocal protest when any Indian official is targeted.
- Chabahar in jeopardy: India’s silence on Iran may jeopardize the Chabahar Port agreement, which is India’s only strategic access route to Afghanistan and Central Asia, bypassing Pakistan.
- IMEC corridor stalled: The India-Middle East-Europe Economic Corridor (IMEC) is now “on the back burner” — both due to Gaza crisis and the current conflict. India loses a critical connectivity initiative.
- “Tactical subservience = strategic irrelevance”: Former FS Shyam Saran’s warning is particularly significant — India’s short-term accommodation of U.S. preferences (resolution, tariff deals, oil purchases) may permanently reduce its independent mediator role.
- Trump factor: Despite India’s accommodation, Trump imposed tariffs, reciprocal trade probes (Section 301), and demanded credit for the India-Pakistan ceasefire — showing that accommodation does not guarantee U.S. goodwill.
1. It was formally announced at the G20 Summit in New Delhi in 2023.
2. It aims to connect India to Europe via the Arabian Peninsula and Israel.
3. It has been fully operationalised since its announcement.
Which of the statements given above is/are correct?
- (a) 1 only
- (b) 1 and 2 only
- (c) 2 and 3 only
- (d) 1, 2 and 3
Explanation: IMEC was announced at the G20 New Delhi Summit in 2023 and aims to connect India to Europe via the Arabian Peninsula and Israel. However, Statement 3 is incorrect — IMEC has not been operationalised; it is effectively stalled due to the Gaza conflict (October 2023) and the ongoing West Asia war.
The Supreme Court (Bench led by CJI Surya Kant) agreed to examine what constitutes “personal data” under the Digital Personal Data Protection (DPDP) Act, 2023 and its corresponding Rules, 2025. The case was filed by journalist Geeta Seshu and the Software Freedom Law Center, arguing that the DPDP laws are being used to block journalistic access to public-interest information.
The core issue: the deletion of “public interest” from the DPDP Act means journalists cannot access data about public officials that is held in public offices — effectively weaponising privacy law to defeat the Right to Information and the public’s right to accountability.
- DPDP Act, 2023: India’s first comprehensive data protection law; replaces IT Act’s Section 43A provisions; establishes Data Protection Board; classifies consent-based data processing.
- DPDP Rules, 2025: Detailed implementing rules including data fiduciary obligations, consent managers, and grievance redressal.
- K.S. Puttaswamy v. Union of India (2017): Landmark 9-judge SC judgment declaring Right to Privacy as a Fundamental Right under Art. 21.
- RTI Act, 2005: Right to Information; Section 8(1)(j) already provides an exemption for personal information — but with a “public interest” override that DPDP now threatens to eliminate.
- PDPB (Personal Data Protection Bill) Journey: Introduced 2019; referred to JPC; lapsed; DPDP Act enacted in 2023 with significant dilutions including removal of “public interest” clause.
- Srikrishna Committee Report (2018): Recommended a balanced framework preserving public interest journalism access to data.
| Aspect | Right to Privacy (DPDP) | Right to Information / Press Freedom |
|---|---|---|
| Basis | Art. 21 (Right to Life & Dignity); K.S. Puttaswamy | Art. 19(1)(a) – Free Speech; Art. 19(1)(b) – Press Freedom; RTI Act |
| DPDP Act Position | “Public interest” deleted; consent required for all data access | Journalists cannot access public officials’ data without consent |
| Concern | Could shield corrupt officials from journalistic scrutiny | RTI exemption u/s 8(1)(j) already balanced — DPDP disrupts balance |
| Penalty Concern | Fines go to Consolidated Fund of India, not injured party | Data principal (victim) gets no compensation — unjust |
| SC Direction | Hearing scheduled March 23; petitioner to frame questions of law | CJI: “One right should not compromise the other” |
- Accountability vs. Privacy paradox: The DPDP Act, in removing “public interest” from its framework, may create a perverse outcome — powerful public officials gaining stronger privacy protection than ordinary citizens.
- RTI erosion risk: Section 8(1)(j) of RTI exempts personal information but preserves public interest override. If DPDP is interpreted to override RTI’s “public interest” exception, it fundamentally weakens India’s accountability framework.
- Chilling effect on investigative journalism: Journalists accessing land records, financial disclosures, or official misconduct data may face DPDP violations even when public interest is evident.
- Penalty misdirection: The Act routes fines to the Consolidated Fund of India, not the aggrieved individual — meaning victims of data breaches have no direct remedy, contrary to natural justice principles.
- CJI’s observation is landmark: “Data has become the true wealth of the day” — the court’s acknowledgment of data’s power in the hands of private corporations is critical for future digital rights jurisprudence.
1. It establishes a Data Protection Board to adjudicate data breach complaints.
2. It explicitly includes a “public interest” exception for journalistic use of data.
3. Penalties for data breaches are payable to the Consolidated Fund of India.
- (a) 1 only
- (b) 1 and 3 only
- (c) 2 and 3 only
- (d) 1, 2 and 3
Explanation: The DPDP Act, 2023 does establish a Data Protection Board (Statement 1 correct). Penalties are payable to the Consolidated Fund of India, not to the injured individual (Statement 3 correct). However, Statement 2 is incorrect — the “public interest” clause was deleted from the final DPDP Act, which is precisely the concern raised in the Supreme Court petition.
The Supreme Court (Justices P.S. Narasimha and R. Mahadevan) ruled on March 11, 2026 that OBC creamy layer exclusion “cannot be decided solely on the basis of parental income.” The judgment clarifies that the creamy layer framework is status-based, not purely income-based — reflecting social progression through governmental hierarchy.
The ruling directly benefits children of Public Sector Undertaking (PSU/PSB) employees who were incorrectly excluded from OBC reservation on the basis of high parental salary alone, despite their parents not holding Group A or B government posts. This widens the OBC reservation pool and settles over a decade of litigation.
- Indra Sawhney v. Union of India (1992): Landmark SC judgment upholding OBC reservations under Art. 16(4); introduced the “creamy layer” concept to exclude OBC members who have achieved social advancement.
- Creamy Layer Threshold: Currently set at annual parental income of ₹8 lakh (unchanged for 11+ years); criteria also based on parental position in govt. service.
- DoPT Charter (1993): Defined creamy layer criteria — persons in constitutional posts, Group A/B officers, senior PSU employees, large landowners, etc., are excluded.
- October 2004 DoPT Clarification: Introduced differentiated income test for PSU employees — inclusion of salary in creamy layer calculation; contested in the present cases.
- Article 16(4): Enables the State to make provision for reservation in favour of backward class of citizens.
- Code on Social Security, 2020: Codifies labour protections including for PSU employees — relevant context for employment status of parents.
| Category | Old Position (DoPT 2004) | SC Ruling 2026 |
|---|---|---|
| PSU/PSB Employee’s Child | Parental salary counted → could cross ₹8L threshold → creamy layer exclusion | Salary alone cannot determine creamy layer; post/status must be assessed |
| Group A/B Govt. Officer’s Child | Excluded regardless of salary | Unchanged — position-based exclusion continues |
| Agricultural Land Owner | Irrigated vs. unirrigated distinction applied | Unchanged — wealth/land test continues |
| Income Test Basis | Salary + assets included together | Salary from employment excluded from income/wealth test; only assets count |
| Effect on Pool | Narrower OBC pool; many PSU children unfairly excluded | Wider OBC pool; corrects historical misclassification |
- Stagnant income threshold: The ₹8 lakh annual threshold has not been revised in over 11 years. With inflation, this threshold now covers a much larger proportion of OBC families, effectively excluding many genuinely backward individuals. The SC has not addressed this fundamental issue.
- Definitional clarity needed: The ruling’s “status-based” approach requires clear operational guidelines from DoPT on how to compare PSU employment grades with government service hierarchy — otherwise implementation confusion will continue.
- Impact on civil services selections: Multiple civil services selections over the past decade may have incorrectly excluded eligible OBC candidates. The ruling may prompt retrospective challenges — creating administrative uncertainty.
- Broader equity question: The concept of creamy layer itself is debated — some argue that once an OBC community has achieved educational access (not just salary), the individual should be re-evaluated. The ruling does not address this larger philosophical question.
- Intersectionality gap: The framework doesn’t account for OBC-SC/ST intersectional identities where reservation categories may overlap — a growing complexity in sub-categorisation post-Jarnail Singh and EV Chinnaiah.
1. It was first introduced by the Supreme Court in the Indra Sawhney v. Union of India judgment of 1992.
2. The current income threshold for creamy layer exclusion is ₹8 lakh per annum.
3. Income from agricultural land is included in the income/wealth test for determining creamy layer status.
Which of the statements given above is/are correct?
- (a) 1 and 2 only
- (b) 2 and 3 only
- (c) 1 only
- (d) 1, 2 and 3
Explanation: The creamy layer concept was introduced in Indra Sawhney (1992) (Statement 1 correct). The current income threshold is ₹8 lakh per annum (Statement 2 correct). Statement 3 is incorrect — income from agricultural land is excluded from the creamy layer income/wealth test under the DoPT framework (agricultural land ownership is assessed separately as a wealth criterion, not folded into the income test).
Despite the government’s ambitious ₹1,00,000 crore Research, Development and Innovation (RDI) Fund and India’s improved ranking to 38th in the Global Innovation Index (GII) 2025, India continues to underperform on fundamental innovation metrics — particularly R&D spending (0.65% of GDP), Patent Cooperation Treaty (PCT) applications (4,547 vs. China’s 70,000+), and private-sector-led commercialisation.
The article argues that India’s innovation challenge has moved from one of intent to execution — and that without decisive private sector participation, government investments will not translate into global technological influence.
- RDI Fund (₹1,00,000 crore): Announced 2025; ₹20,000 crore corpus for deep-tech startups in Budget 2026–27; Atal Tinkering Labs funding increased 6x (₹500 cr → ₹3,200 cr).
- Global Innovation Index (GII): Published by WIPO; India ranks 38th among 139 economies in GII 2025 — up from 81st in 2015.
- Patent Cooperation Treaty (PCT): International patent filing system under WIPO; India filed 4,547 applications in 2024 (vs. China: 70,000+; U.S.: 54,000+).
- SHANTI Act, 2025: Sustainable Harnessing and Advancement of Nuclear Energy for Transforming India — allows patents for peaceful uses of nuclear energy; opens door for private sector.
- DSIR’s IRDPP: Removed 3-year existence requirement for deep-tech startups to access Industrial R&D Promotion Programme.
- WIDUSHI & WISE-KIRAN: Government programmes to improve women’s participation in science and engineering.
- Standard Essential Patents (SEP): Patents that are essential to implement a technical standard (e.g., 5G, 6G); India has minimal SEP contribution globally.
| Innovation Metric | India | Peer Comparison | Gap Assessment |
|---|---|---|---|
| R&D/GDP (%) | 0.65% | China: 2.4%; South Korea: 4.9%; U.S.: 3.5% | Lowest in BRICS (except South Africa) |
| Total Patent Filings | 1,10,000+ (2024-25) | China: 1.8M; U.S.: 600,000 | 7% of Chinese filings |
| PCT Applications | 4,547 (2024) | China: 70,000+; U.S.: 54,000+; Switzerland: 5,300 | Even Switzerland (size of Kerala) files more |
| GII Rank | 38th / 139 | Singapore: 5th; China: 11th | Improving but structurally shallow |
| Knowledge-intensive sector employment | GII Rank: 95th | Innovation-leading nations rank in top 20 | Human capital gap critical |
| Women in Science (advanced degrees) | Rank 101/119 | Leading nations: Top 20 | Gender gap = Innovation gap |
(RDI Fund ₹1L Cr)
Research Output
Transfer / TTO
Sector Uptake
Commercialisation
The weakest link is commercialisation — bridging academic research to market-ready, globally competitive technologies.
- Government-industry R&D inversion: In leading innovation economies (U.S., South Korea, Germany), industry drives 60–75% of R&D. In India, the public sector bears disproportionate burden — private sector’s unwillingness to invest in long-gestation R&D reflects structural risk aversion.
- “Faultline” in India’s development: India skipped large-scale labour-intensive industrialisation (East Asia model) and jumped directly to a services-dominated economy — resulting in a shallow technology base and “unicorns built on delivery workers, not patents.”
- PCT gap is the real indicator: Domestic patent filings can be inflated by policy incentives. PCT applications reflect genuine commercial innovation intent — India’s 4,547 applications vs. China’s 70,000+ reveals the true depth of the gap.
- SHANTI Act and nuclear patents: Opening nuclear energy patents to private sector is a bold reform — but without risk capital, experienced R&D workforce, and clear IP protection frameworks, the opening may remain theoretical.
- 6G as a benchmark: India’s contribution to 6G Standard Essential Patents will be the definitive test of whether the current R&D investment surge translates into global technological influence.
1. India ranks 38th among 139 economies.
2. Domestic patent filings now account for about 62% of total patent filings in India.
3. India’s PCT applications in 2024 exceeded those of Switzerland.
Which of the statements given above is/are correct?
- (a) 1 and 2 only
- (b) 2 and 3 only
- (c) 1, 2 and 3
- (d) 3 only
Explanation: India ranks 38th in GII 2025 (Statement 1 correct). Domestic filings account for approximately 62% of total Indian patent filings (Statement 2 correct). Statement 3 is incorrect — India filed 4,547 PCT applications in 2024 while Switzerland filed over 5,300 — thus Switzerland actually exceeds India despite being geographically “a bit larger than Kerala.”
India’s new Labour Codes — with draft central rules released in December 2025 — have been presented as transformative reform, with the Economic Survey 2025–26 projecting they will increase formalisation from 60.4% to 75.5%, create 77 lakh jobs, and contribute 1.25% to GDP by 2029–30. However, critical analysis reveals a “formalisation illusion” — the codes raise thresholds for worker protections, incentivise fixed-term employment over permanent jobs, and leave gig worker welfare details unspecified.
The article argues that informality is structurally profitable for firms — and relaxing regulations without addressing this structural incentive will not lead to genuine formalisation.
- Four Labour Codes: Code on Wages (2019); Industrial Relations Code (2020); Social Security Code (2020); Occupational Safety, Health and Working Conditions (OSH) Code (2020) — consolidate 29 Central labour laws.
- Code on Social Security, 2020: First to recognise gig and platform workers; requires 1–2% of annual turnover contribution for gig worker welfare.
- Informal Economy Scale: 80%+ of India’s workforce is informal; informal sector generates ~50% of GDP.
- Fixed-Term Employment (FTE): New concept introduced — allows hiring on short-term contracts with some benefits but without job security.
- National Floor Wage: Code on Wages mandates a National Floor Wage — minimum below which no state can set minimum wage; methodology not specified.
- Inspector-cum-Facilitator: Labour inspectors renamed and given dual role — this weakens enforcement by making facilitation primary.
- ESIC & EPFO: Statutory social security bodies; coverage expansion is central to formalisation argument.
| Labour Code Change | Government’s Claim | Critical Reality |
|---|---|---|
| Factory threshold: 10→20 workers (with power) | Reduces compliance burden; encourages formal registration | Excludes 30M+ small establishments from OSH protections |
| Lay-off approval threshold: 100→300 workers | Flexibility for larger firms; encourages formal hiring | Reduces job security; makes mass retrenchment easier |
| Fixed-Term Employment (FTE) | Formal employment with some benefits (appointment letter, gratuity) | Lacks job security — the defining feature of “formal” employment |
| Gig worker welfare: 1–2% turnover contribution | First recognition of gig workers’ social security needs | Benefit levels, eligibility, claim process all “to be notified” — unimplemented |
| Inspector → “Inspector-cum-Facilitator” | Ease of doing business; reduce harassment | Enforcement weakened; firms can compound serious violations by paying fines |
| National Floor Wage | Minimum wage protection for all workers | No clear methodology; differentiation from Minimum Wage unspecified |
- Formalisation vs. precarious formalisation: The codes may create “statistical formalisation” — more workers appearing in formal registers while actual job quality (security, wages, social security) deteriorates. Fixed-term employment is formally registered but structurally precarious.
- Historical evidence ignored: Between 2011 and 2023, formal factory employment fell from 61% to 47%, and contract workers grew to 42% of the workforce — showing firms use regulatory flexibility to informalise, not formalise.
- Minimum wage paradox: The renaming of inspectors as “facilitators” and compounding of violations means firms can avoid minimum wage compliance by paying fines — undermining the very National Floor Wage the code claims to establish.
- Gig workers’ structural vulnerability: With ~7 crore gig and platform workers in India by 2030 (NITI Aayog projection), leaving benefit details “to be notified” is a critical policy failure — these workers have no fallback and were not party to consultation.
- Economic Survey’s optimism vs. empirical evidence: The Survey’s projection of 75.5% formalisation contradicts observed trends of contracting formal employment in both public enterprises (30,000 fewer workers in 2024 alone) and private factories.
1. The Code on Wages establishes both a National Minimum Wage and a National Floor Wage.
2. The Occupational Safety, Health and Working Conditions Code raises the factory definition threshold from 10 to 20 workers (with power).
3. The Code on Social Security, 2020 mandates platform companies to contribute 5% of annual turnover for gig worker welfare schemes.
- (a) 1 and 2 only
- (b) 2 only
- (c) 1 and 3 only
- (d) 1, 2 and 3
Explanation: The Code on Wages creates both a National Floor Wage and a National Minimum Wage (Statement 1 correct). The OSH Code raises the factory threshold from 10 to 20 workers with power (Statement 2 correct). Statement 3 is incorrect — the Code on Social Security mandates platform companies to contribute 1–2% of annual turnover (not 5%) for gig worker welfare schemes.
- Children of constitutional post holders and Group A/B officers
- Children of large landowners and business families
- Families with annual income above ₹8 lakh (threshold set by DoPT)
- Code on Wages (2019): Minimum wage, equal remuneration, payment of wages, bonus
- Industrial Relations Code (2020): Trade unions, industrial disputes, standing orders
- Social Security Code (2020): EPFO, ESIC, gratuity, maternity benefit; recognises gig workers
- OSH Code (2020): Occupational safety, health, working conditions; factories, mines, etc.
- R&D spending: Only 0.65% of GDP — lowest in BRICS except South Africa
- PCT applications: India filed 4,547 in 2024 vs. China’s 70,000+
- Knowledge-intensive employment: India ranks 95th
- Women in advanced STEM: India ranks 101st out of 119
- Bypass Pakistan: Provides India direct access to Afghanistan and Central Asia without routing through Pakistan
- Connectivity: Linked to India’s broader International North-South Transport Corridor (INSTC) vision
- Afghan trade: India uses Chabahar to send humanitarian and trade goods to Afghanistan
- Counter to Gwadar: China’s CPEC-linked Gwadar Port in Pakistan is seen as a competitor; Chabahar counters China’s growing regional influence
- Legality – AI must operate within legal frameworks
- Fairness & Non-discrimination – No bias in outcomes
- Privacy & Safety – Protection of personal data
- Transparency & Accountability – Explainability in AI decisions
- Human Oversight – Humans must review high-stakes AI outputs
- Inclusion & National Interest – Benefits must reach all sections
The Hindu UPSC News Analysis | March 13, 2026
Prepared for UPSC Civil Services Prelims & Mains | GS I · GS II · GS III · GS IV · Essay Disclaimer: This analysis is for educational purposes only. All facts sourced from The Hindu, March 13, 2026.


