Public Policy

Time for the Bear to be Bullish on Indian Higher Education

Leave a Comment / Education, Higher Education, Public Policy, World Economy /

Time for the Bear to be Bullish on Indian Higher Education Time for the Bear to be Bullish on Indian Higher Education Saravanan M January 30, 2026 Education, Higher Education, Public Policy, World Economy In the late 1950s and early 1960s, four Indian Institutes of Technology (IITs) were established with the support of four countries– the Soviet Union (now the Russian Federation), the United States, the United Kingdom, and Germany. While the latter three are amongst the most favourite higher education destinations of Indian students, along with Canada and Australia, Russia still punches below its weight. However, the current global situation presents an opportune moment for Russia to become a top higher education provider, through a strategic educational partnership with India. Why India? India reclaimed its position as the leading country of origin for international students in 2023–24, overtaking China, which had held the top spot since 2009–10. India had also been the largest source of international students for eight successive years prior to that. Together, India and China account for more than 50 per cent of all international students worldwide. Russia has a total student population of about 4 million, of which international students constitute nearly 8 per cent. A majority of these students come from India, China, and CIS countries. Although Russia maintains cordial relations with both India and China, historically it has shared a comparatively more stable and long-standing partnership with India. Moreover, given China’s growing economic presence and its ambition to develop as a global higher education hub, India emerges as a more strategically favourable partner for Russia across sectors, particularly in higher education. In recent years, Russia has been gaining increasing attention among Indian students. The number of Indian students in the country grew from nearly 20,000 in 2022 to over 31,000 in 2024. In contrast to other major destinations such as the US, the UK, and Canada, where Indian student enrolment has fluctuated due to policy changes and other factors, Russia has experienced continuous and gradual growth in the number of Indian students choosing its universities. Global Context Almost all major economic powers are becoming increasingly protectionist. The Make America Great Again (MAGA) movement in the US has intensified tariff barriers against several countries and tightened visa regulations. Consequently, the US may experience structural shifts in its economy and polity, including the higher education sector. The underlying narrative driving these shifts is the belief that immigrants are taking away jobs meant for Americans. While the quality of higher education is a key driver of student mobility, the prospect of post-graduation employment is an equally crucial determinant. With the current headwinds facing immigrants in the US job market, it is unlikely that the inflow of international students into American universities will continue to grow at the same pace. The Canadian and the UK economies are also facing challenges, with reports of rising unemployment among young immigrant graduates in Canada. Australian higher education is expensive compared to Germany and Russia. Given the prevalent situation, Russia would not find a more favourable period to strengthen the international segment of its higher education system. Untapped Indian Higher Education Space The Indian higher education landscape has undergone drastic changes over the years. From being largely an importer of educational services by sending its students abroad, the country is in the process of internationalising its domestic sector. Internationalising the curriculum is at the core of many Indian universities. Following the 2022 UGC regulations, Indian universities have begun collaborating with foreign universities through joint, twinning, and pathway programs. As per news reports, Deakin University, University of Wollongong, Victoria University, Western Sydney University from Australia; Istituto Europeo di Design from Italy; University of Southampton and University of Liverpool from the UK; and Illinois Institute of Technology from the US have received approval to establish their campuses in India, under 2023 UGC regulations. In the near future, these developments are expected to cater to a segment of Indian students, who would otherwise study abroad. Even for those who seek an overseas campus experience, short-term immersion courses can be designed to ensure foreign experience. The unused potential of India for foreign institutions is humongous, and Russia is well-positioned to leverage it for mutual benefit. Russian Strength Russia is reputed for producing world-class mathematicians, doctors, physicists, chemists and programmers, among others. STEM programs account for 55 per cent of total international enrolments. As Russia already offers a bouquet of STEM programs, including programs in English language, Indian students would find Russia very suitable. The decades-old technological and cultural relationship that India and Russia have will facilitate a stronger educational partnership. Russia already has a strong base with the India-specific plan, like Russian-Indian Network, supported by IIT-Bombay. All it needs to do is scale up and expedite the process. Language may not be a major hindrance, as Indian students also study in Germany, France, Japan, China, Korea, where most programs are not taught in English. Win-Win Partnership Russia has already averred its willingness for “no limits” strategic partnership with India, similar to its existing arrangement with China. When intent is positive, the global situation is conducive, and the Indian policy ecosystem is welcoming, there is every reason to believe that the long-neglected sector of higher education would get the attention it deserves. Strengthening this partnership would not only advance education, research, and innovation, but also enhance the soft power of both nations. Dr.M Saravanan, is specialised in Higher Education and Founder Secretary of the AgaPuram Policy Research Centre, Erode. Views expressed by the author are personal and need not reflect or represent the views of the AgaPuram Policy Research Centre.

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Use of Artificial Intelligence Tools in Tamil Nadu Government Schools

Leave a Comment / Child Development, Education, Public Policy, Skills Development Sector /

Use of Artificial Intelligence Tools in Tamil Nadu Government Schools Use of Artificial Intelligence Tools in Tamil Nadu Government Schools Charanya T December 18, 2025 Child Development, Education, Public Policy, Skills Development Sector Artificial Intelligence (AI) is becoming an important part of education in many parts of the world. In India, Tamil Nadu has taken several steps to introduce AI and digital technologies in government schools. These initiatives aim to improve learning, administration, and access to modern education, especially for students from government schools. This article examines how AI initiatives in Tamil Nadu government schools are transforming learning while also highlighting the challenges of implementation. As India embarks on its ambitious INDIAai Mission towards the Safe and Trusted AI pillar, which underscores the commitment to ensuring safety, accountability, and ethical practices in AI development and deployment. The mission aims to empower innovators and democratise AI benefits across sectors by promoting indigenous frameworks, robust governance tools, and self-assessment guidelines. One important initiative taken by the government of Tamil Nadu through its Tamil Nadu e-Governance Agency (TNeGA) is the introduction of AI-based attendance systems in schools for students. This system uses technologies such as facial recognition to mark attendance automatically. It helps reduce manual work for teachers and improves accuracy in attendance records. The data collected through this system can help school authorities understand student attendance patterns and take steps to reduce absenteeism and dropouts. Another major development is the decision to introduce AI, coding, and robotics for government students in Classes 6 to 9 starting from the academic year 2025-26. This move brings new technology-based subjects into the regular school curriculum. Learning coding and AI at a young age helps students develop logical thinking, problem-solving skills, and creativity. This is especially beneficial for students in government schools who may not get exposure to such skills outside the classroom. Before implementing these changes across the state, the Government of Tamil Nadu introduced pilot programmes in selected government schools, covering around 3,000 schools across the state. According to official pilot programme reports of the Tamil Nadu School Education Department, these initiatives included the use of robotics kits, AI-based digital tools, and interactive learning platforms. Students used these tools for subjects such as mathematics, science, and languages. As reported in government releases and education department updates, students showed increased interest and engagement in learning, and many became more confident in using technology. The Government of Tamil Nadu’s Department of School Education has partnered with IIT Madras to improve digital assessments and learning experiences in 6029 government schools to improve the learning of 90 lakh students. Under this collaboration, a Learning Management System (LMS) is being developed for thousands of government schools. This system will help teachers track student’s progress, understand learning patterns, and identify areas where students need additional support. Such digital assessment systems can help move away from rote learning and encourage better understanding of concepts. Some schools have also introduced AI-based language labs to improve student’s communication skills. For example, government schools in Kuthalam town in Nagapattinam district have implemented AI tools that help students practice pronunciation, speaking, and language fluency. These tools provide instant feedback, which helps students learn independently and build confidence, especially in English. The Pilot programmes such as Tamil Nadu Schools Programme for AI, Robotics and Knowledge (TNSPARK) would help to bring digital tools and AI-based learning into everyday classroom activities for classes of 6 to 9 covering 3000 government schools by “leveraging 8,209 Hi-Tech Labs and 22,931 Smart Classrooms alreadyestablished statewide”. This pilot programmes are being implemented with collaborations of industry like Microsoft, Intel, Cognizant, Namma School Namma Ooru Palli, and Teach for India (PMU). TN SPARK is expected to benefit over 7 lakh students in its pilot phase. However, there are still challenges in using AI effectively in education. Not all schools have the same level of infrastructure, which reflects the digital divide between different regions and social groups. Schools in rural or economically weaker areas may struggle more with access to devices and internet facilities. Teachers also need proper training to use AI-based technologies efficiently, as their role is central in the socialisation and learning process of students. It is important to ensure that AI acts as a support system rather than replacing teachers, since education is not only about technology but also about human interaction, guidance, and emotional support. Tamil Nadu’s efforts to integrate AI into its education system show a positive step towards modern and inclusive learning. By introducing AI-based attendance, coding and robotics education, digital assessments, and language labs, the state is working towards improving the quality of education in government schools. If these initiatives are implemented properly and equitably across the state, Tamil Nadu can become a strong model for using AI in public education in India. Ms.Charanya.T is Final Year Student of B.A Sociology at VET Institute of Arts and Science, Erode, Tamil Nadu. Views expressed by the author are personal and need not reflect or represent the views of the AgaPuram Policy Research Centre.  

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Bihar’s Flip-Flop on Alcohol Policy

Leave a Comment / Cultural Economics, Public Policy, State Economies /

Bihar’s Flip-Flop on Alcohol Policy Bihar’s Flip-Flop on Alcohol Policy Ghanshyam Sharma December 12, 2025 Cultural Economics, Public Policy, State Economies Ironically, the poorest and most corrupt state first increased the number of alcohol addicts by promoting alcohol sales. Then, it arrested over 13 lakh men – for drinking alcohol. Over the past two decades, Bihar has conducted a uniquely absurd experiment in the history of alcohol regulation. Starting in 2006, it actively promoted the sale of alcohol to increase tax collections from alcohol sales. However, in 2016, it reversed course and introduced one of the strictest alcohol bans, which has had significant adverse effects on the people, corruption, and the economy. After the 2005 elections, the Bihar government pursued a policy to open a theka (or liquor shop) in every panchayat. Media reports noted that the number of liquor shops in rural areas tripled, from 779 to 2,360. As a result, tax revenues from alcohol jumped from Rs 87 crore to Rs 3142 crores in 2014-15. This represented 15 percent of the state’s budget. The new thekas increased the proximity to liquor. As a result, the number of men with alcohol addiction increased by 50 percent (NFHS-3 and 4). People develop an addiction to alcohol due to physical or emotional dependence on alcohol. For example, manual labourers drink alcohol to deal with chronic pain, especially in the absence of reliable and accessible healthcare.  Similarly, people who have been exposed to childhood adversity or are dealing with mental health issues are more likely to turn to alcohol for relief. When access to alcohol improves, such people are likely to increase their frequency and volume of alcohol intake. Thus, the policy exploited the vulnerable groups prone to alcohol addiction to raise tax revenue. However, despite the state government’s push to increase alcohol sales, the overall percentage of men in Bihar who drink alcohol actually declined in this period. The proportion of married women who reported that their husband drinks alcohol fell from 39 to 35 percent from 2006 to 2016 (National Family Health Survey-3 & 4). Hence, the alcohol taxes increased sales only because of an increase in demand from vulnerable groups who were prone to addiction. Hence, when Bihar imposed a comprehensive ban on alcohol in 2016, it came as a policy shock because the fraction of men who drink alcohol in Bihar was already declining (despite the government promoting alcohol). Besides, relative to other states, fewer men in Bihar were drinking alcohol. Several rigorous penal provisions of the prohibition law also came as a shock. For example, the provision of ‘guilty until proven innocent’ placed the burden of proof on the accused. According to the Transparency International Report (2019), Bihar is the most corrupt state in India. This law makes citisens vulnerable by vesting indiscriminate powers with the police to arrest people without proof. The law also punished drinking in a public place with life imprisonment. The law penalised possession of knowledge about alcohol with eight years of imprisonment. The law has had several predictable consequences. Since 2016, Bihar has arrested over 13 lakh people (mostly men) under the prohibition law, as only half a percent of women drink alcohol in Bihar (NFHS). The actual conviction rate in these cases is one percent (Indian Express report).  Kumar and Raghavan (2020) found that the SCs & STs faced disproportionate arrests under this law, and many have been awaiting trial for several years. Over 8 lakh prohibition-related cases have clogged the courts and overcrowded prisons. The prohibition has led to thousands of undocumented deaths from spurious alcohol. In April 2023, the Supreme Court raised concerns about the fairness of the law that makes drinking alcohol a non-bailable offence.  The Court also questioned whether the prohibition had been effective in curbing alcohol consumption.  In a study recently published in the journal Economics of Governance, I find that despite such rigorous provisions, there has been only a 6 percentage point decline among men who drink alcohol. I also find empirical evidence for bootlegging. Alcohol consumption has declined less in districts that share a border with other states or Nepal.  Selling alcohol in districts that do not share a border with other states would imply dealing with two police departments, which would increase the price and risk of selling alcohol in such districts. I find further evidence of bootlegging as there is a sharper decline in low alcohol (e.g, beer) drinkers compared to high alcohol spirits (e.g., whiskey). This is because high-alcohol spirits such as whiskey are easier to store and last longer compared to low-alcohol drinks, which may need cold storage. I also find evidence of a decline in branded alcohol drinkers, but no decline in spurious alcohol drinkers. This could be because branded alcohol is imported from outside the state, while spurious liquor can be sourced locally. Branded alcohol is relatively less harmful to drink than locally made liquor. Bootleggers use methanol to increase the potency of unbranded liquor, which can have severe health complications such as blindness or death. The alcohol ban has resulted in thousands of undocumented deaths from the consumption of spurious liquor. I also discovered that the prohibition has only deterred occasional drinkers – people whose frequency of alcohol consumption is less than weekly. The ban has not deterred people who drink daily. There is only a 1 to 2 percent decline in men who drink alcohol daily. This again highlights the wide availability of alcohol and the limitation of the policy. Governments globally have realised that educating people is more effective than bans. For example, the US government had to reverse its alcohol ban in the 1930s. Several US states have recently amended their “War on Drugs” policy and legalised their use. Prohibitions only lead to black markets, unfair arrests, targeting of vulnerable groups, an increase in corruption, loss of tax revenues, and the strengthening of criminal gangs/mafia. Bihar’s ban on alcohol has been a colossal policy failure. The ban is an attack on personal freedom.

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Karnataka’s Menstrual Leave Policy: Women Empowerment or Unintended Bias?

Leave a Comment / Child Development, Cultural Economics, Public Policy, State Economies /

Karnataka’s Menstrual Leave Policy: Women Empowerment or Unintended Bias? Karnataka’s Menstrual Leave Policy: Women Empowerment or Unintended Bias? Prayaga Venkata Rama Vinayak November 14, 2025 Child Development, Cultural Economics, Public Policy, State Economies, Women Empowerment In a welcome move, the Government of Karnataka recently approved Menstrual Leave Policy, 2025, allowing female employees throughout the State to avail one day paid leave every month, in addition to other paid leaves sanctioned by their organisation. This policy applies to all women employees both in the public and private sectors across the State. Further, this leave does not require any pre-approvals from employers, but only prior intimation by the employees to their respective authorities. This move is worthy of emulation, as the State Government’s intention is to create a work environment that enhances women’s participation in the workforce. States such as Bihar, Kerala, and Odisha have implemented similar policies in the past. However, Karnataka’s policy explicitly covers both government and private sector employees, unlike those of the other States. Nevertheless, the initiative also warrants an analysis of its effectiveness in achieving the intended objective of women’s empowerment. One of the shortcomings of the policy is that it appears to apply only to employees in the organised sector, as no government currently has adequate mechanisms to implement such a policy in the unorganised sector, which employs a larger workforce. As of October 2025, Karnataka has approximately 10.96 million (1,09,61,042) unorganised sector workers registered on the e-Shram portal, of whom 58.1 percent (about 6.36 million) are women. However, many more women workers remain unregistered on the portal. Consequently, a majority of women employees in the State are unlikely to benefit from the policy. For micro, small, and medium enterprises (MSMEs), granting 12 additional paid leaves may lead to more absenteeism and payroll costs. From the women labour force point of view, the new leave policy may worsen the hiring bias, especially in micro and small firms that operate on very rigid workforce margins. Moreover, the state government has not proposed any reimbursement or tax offset to encourage small employers to implement the policy. The private sector may view women as costlier or less reliable employees due to additional leave entitlements like maternity, childcare and now menstrual leave. The “Voice of Women” Survey Report (2024) by Aon sheds light on how women employees view workplace equity and flexibility, which is pertinent while evaluating policies like menstrual leave. The survey mentions that findings reinforce years of research showing that women face microaggressions at work in the form of subtle and seemingly innocuous comments based on stereotypes. Nearly 42 percent women reported that they face judgmental comments or expressions on leaving work early or working remotely. Furthermore, one in three mothers reported facing career setbacks after returning from maternity leave — for 75 percent of them, the impact lasted up to two years, while 25 percent experienced setbacks lasting more than three years. We can understand from the above-mentioned survey that women are already going through lot of unavoidable discrimination in their workplace irrespective of many DEI (Diversity, Equity and inclusion) friendly policies. These kinds of policies will even amplify the ongoing discrimination to next level and, it’s worth noting that without awareness among the people in the work environment about female menstrual health and it’s impacts this kind of policies just pay a lip service to the concept of women empowerment. The periodic Labour Force Survey Report (2023-24) reveals that Karnataka’s Labour Force Participation Rate (LFPR), which indicates how many people are either working or looking to work out of the total population, is 49.9 percent for rural women, lower than the nation’s average of 51.2 percent. For urban women it is 33.5 percent, slightly above the nation’s average of 31.2 percent. The consolidated LFPR of women in Karnataka is 43.6 percent lower than the nation’s average of 45.2 percent. Further, Karnataka’s Worker Population Ratio (WPR), which indicates the proportion of working population, is 49.5 percent for rural women, a tad below the nation’s average of 50 percent. For urban women, it is 32 percent, considerably above than nation’s average of 28.8 percent. The consolidated WPR of women in Karnataka is 42.7 percent, slightly lower than the nation’s average of 43.7 percent. If the state government policy is implemented without addressing the recruitment bias faced by women in the private sector, especially in small firms, the already existing gap between the Karnataka’s LFPR and WPR of rural women will be widen, weakening the State’s efforts towards women empowerment. The policy may be modified to make it easier to implement. Instead of mandating complete paid leave, the governments can incentives organisations to grant remote work facilities for at least 3-4 consecutive days, wherever feasible. This will allow women to take proper care of their menstrual health. Also, the state government may consider this an opportune time to strictly enforce menstrual-friendly infrastructure in all workplaces with adequate hygienic and sanitation facilities across the public and private sectors. It would be commendable if the State Government could find convergence between schemes such as Koosina Mane, which empower local bodies and promote decentralization, and the implementation of new policies related to women’s menstrual health. Such an integrated approach would be mutually beneficial to both employees and employers. Further, it is essential to consult as many stakeholders as possible, including women, before implementation of the policy. The Karnataka State Menstrual leave policy is a welcome move, but it also brings some real concerns that may be overlooked. The matter requires a holistic understanding. It should aim to incentivise organisations instead of making them more hesitant to hire women, especially in smaller companies. The State Government should make sure the new policy supports both women and workplaces, without benefitting one at the cost of the other. Real inclusion means creating equal opportunities, not in offering special provisions that may inadvertently widen the very gap the policy seeks to close. The Author is Public Policy Fellow at AgaPuram Policy Research Centre, Erode The

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Tamil Nadu’s bumpy road to $1-trillion economy

Leave a Comment / Public Policy, State Economies, Tamilnadu Economy /

Tamil Nadu’s bumpy road to $1-trillion economy Tamil Nadu’s bumpy road to $1-trillion economy by Chandrasekaran Balakrishnan October 31, 2025 Public Policy, State Economies, Tamilnadu Economy Though Centre-state devolution gets public attention, little light is shed on intra-state devolution to rural and urban local bodies. If Tamil Nadu is to reach its goal of being a $1-trillion economy soon, the new State Finance Commission will have to address such issues The Tamil Nadu government accepted 259 out of 280 recommendations made by the sixth State Finance Commission without changing the ratio of devolution amount between rural and urban local bodies (Photo | Express) Updated on: 30 Oct 2025, 2:17 am 4 min read Tamil Nadu aspires to become a $1-trillion economy by 2030. However, it seems feasible only after 2031-32 given the amount of work needed on multiple fronts, ranging from effective decentralised governance and sectoral growth challenges to addressing intra-state regional disparities. While the state’s strength of being a global hub for manufacturing and its significant contribution to the services sector make the headlines, certain challenges remain under-discussed. Almost two years have passed since the release of a plan titled ‘Tamil Nadu Vision $1 trillion’, which aimed to “ensure that all districts and regions of the state emerge as growth centres, while driving prosperity for all sections of the society”. Yet, there has been a little visible change in implementing its key recommendations. In a dynamic federal country like India, state governments often tussle with the Centre seeking more regional autonomy. Ironically, some of the same states fare poorly in decentralisation of administrative power and financial autonomy within, despite a mandate for it under the 73rd and 74th constitutional amendments in 1992. The challenges faced by Tamil Nadu, especially its urban and rural local bodies, including its limited capacity to meet the aspirations of the people for better civic infrastructure facilities and services could be mostly attributed to inadequate institutional mechanisms. One of the biggest institutional and structural lacunae is that despite about 55 percent of people living in urban areas, the devolution of funds continues to be higher for rural local bodies (51 percent) as compared to urban local bodies (49 percent). Against this background, the state government has constituted its 7th State Finance Commission (SFC) under the chairmanship of K Allaudin, a retired IAS officer, to “review the financial position of various urban and rural local bodies and make appropriate recommendations on the distribution of funds to be provided by the state government” for a five-year period from April 1, 2027. This surpasses the target to become a $1-trillion economy by two years. The three-member commission has been asked to submit its report by August 31, 2026. Unlike states like Assam and Kerala, Tamil Nadu has not involved any subject experts on its SFC this time too, as has been the case since its inception in 1997. While the first, sixth and the recently-constituted seventh SFCs have been headed by retired IAS officers, others were headed by serving IAS officers. The key recommendations of the SFCs are mandated to be implemented within a year after the submission of action taken reports. However, there are no such publicly available reports on actual implementation until the next SFC is constituted. The state has accepted many of the past SFC proposals, ranging 80-96 percent of the recommendations. However, for the third SFC, the state government accepted only 240 out of the 308—or about 78 percent—of the recommendations. This gives a clue about how bound the state feels about acting on the proposals. The actions are important for the SFCs’ functions, which include a wider consultative process, examination of various data sets of rural and urban local bodies, and time taken to submit the report So it is instructive to look at the time taken by each SFC to make their final submissions. The state’s first SFC took 19 months, second 15 months, third 22 months, fourth 22 months, fifth 24 months, and the sixth took 24 months to submit the final report to the government. Most often, the reasons for delay are not mentioned. It is also important to note that public discourse has been largely silent on the SFCs’ functions, operations, effectiveness, quality, and implementation. With all this in the backdrop, here are five critical challenges before Tamil Nadu’s seventh SFC Decentralisation of real administrative and financial autonomy from the state capital to district administrations, city corporations, and town and village panchayats is still a distant reality. Though the administrative coverage of urban local bodies has expanded to 25 cities from 16, the availability and quality of basic civic infrastructure and services remain inadequate and substandard. 1.Decentralisation of real administrative and financial autonomy from the state capital to district administrations, city corporations, and town and village panchayats is still a distant reality. 2.Though the administrative coverage of urban local bodies has expanded to 25 cities from 16, the availability and quality of basic civic infrastructure and services remain inadequate and substandard. 3. Increased regional disparities within districts have become a major challenge. The average per capita incomes in the western and northern parts of the state are significantly higher than those in the eastern and southern parts. 4.Another major hurdle is the lack of coordination among key departments, insufficient public consultation, and ineffective programme design in crucial sectors such as sanitation, water supply, electricity, roads, transport, policing, waste management, and wastewater disposal. These gaps create avoidable hardships, especially for the young. 5. Although there is significant scope to enhance revenue streams for local bodies in urban or rural administrations, state-level centralisation continues to constrain their autonomy in decision-making and their ability to address local issues and challenges. While neighbouring states Karnataka and Kerala have made significant progress in addressing challenges related to devolution of administrative power, these aspects have often been given piecemeal attention by Tamil Nadu’s SFCs and no commission has taken a holistic view of the structural challenges faced by the local bodies. The prayer is that this time

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Reward Citizens to Bring a Paradigm Shift in Civic Behaviour

Leave a Comment / Public Policy, Urban Development, Youth Entrepreneurship /

Reward Citizens to Bring a Paradigm Shift in Civic Behaviour Reward Citizens to Bring a Paradigm Shift in Civic Behaviour Prayaga Venkata Rama Vinayak October 13, 2025 Public Policy, Urban Development, Youth Entrepreneurship India is known for its rich cultural practices, family values, hospitality, and ethics. It was an economic superpower for over a millennium and is on the verge of regaining its rightful stature soon. One of the major bottlenecks in the development of our country is the lack of good civic sense among Indians. Despite improvements in literacy and enrollment in higher education, unfortunately, there has not been any perceptible improvement in the civic sense of the public. As per the latest Swachh Survekshan Report (2024-25), not even a single city from Kerala, one of the most literate states in India, is ranked among the top 50 cities. Mattanur, the top-ranked city in Kerala, is ranked 53rd nationally, followed by Alappuzha at the 80th position. Furthermore, organising awareness campaigns alone is hardly effective without decentralization and community-driven efforts at the local level. The NITI Aayog report on ‘Reforms in Urban Planning Capacity in India’, released in 2021, mentioned that during the period 2011–2036, urban growth would account for 73% of the total population increase. There is a saying my father often quotes: “We can wake up someone who is in a deep sleep, but we can never wake up someone who is pretending to be asleep.” The awareness campaigns are beneficial to someone who is unaware of their wrongdoing. These campaigns help them understand and rectify their mistakes, but in our country, that’s not the case. We can relate the above-mentioned findings to the recent Gross Domestic Behaviour Survey by India Today (2025). The Survey presented a few statements to the respondents from 21 states and 1 union territory, requesting them to either agree or disagree with the statements. Based on the responses, the States were ranked. The statements were broadly categorized in the following themes: “Civic Behaviour”, “Public safety”, “Gender attitudes” and “Diversity & discriminations”. Under the Civic Behaviour theme, Tamil Nadu secured 1st place followed by West Bengal, Odisha, Delhi and Kerala in 2nd, 3rd, 4th and 5th places respectively. In the remaining 3 themes, “Public safety”, “Gender attitudes” and “Diversity & discriminations” Kerala secured the 1st place. In overall rankings too, Kerala secured 1st Place in the Gross Domestic Behaviour survey. Under the Civic Behaviour theme, the survey asked the respondents to agree or disagree with the following statement: “It is ok to throw litter on the road/public place, if there is no public garbage bin available”.  Almost 99% of respondents in Kerala either strongly or somewhat disagreed with the statement, helping the state secure the first position for the statement. This clearly indicates that people are well aware that throwing litter on the road is wrong, which is actually a matter of common sense. Yet not even a single city in Kerala featured among the top 50 places in Swachh Survekshan, demonstrating that awareness alone does not guarantee responsible civic behaviour. While strict measures such as bans and prohibitions may be very effective in certain cases, they are not as sustainable as the efforts driven by voluntary participation. Hence, there is a need to promote and ensure the active involvement of citizens in civic matters. China is a case in point, having figured out that the antidote for irresponsible civic behaviour is decentralization and community participation. The country has achieved significant results through its community-based governance. At the neighbourhood committee levels, residents participate in committees that handle disputes, cleanliness and local events. It also employs other measures like Civilized City Rankings, social credit rewards, and public shaming for civic violations. Though Kerala is renowned for its decentralization, it lacks behavioural governance tools like China’s reward – punish civic systems that transform awareness into actions. It is high time we adopt a pragmatic citizen-reward mechanism to encourage better civic sense among our youth and the general public. For example, governments could introduce a “Good Citizen Card (GCC)”. This GCC could be awarded to individuals who pay loans, electricity bills, and property taxes on time; follow traffic rules properly; have no criminal records, especially against children, parents, women, or the elderly; refrain from creating public disturbances; and maintain public hygiene. Additionally, the GCC could include parameters related to education, health, environment, skill development, cultural values, and other aspects that promote responsible citizenship. An autonomous body could be tasked with implementing this citizen-reward initiative to ensure transparency and neutrality. Governments could incentivise the holders of GCC with various benefits, such as preferential allocation of seats in trains, priority or relaxation in cooking gas connection, electricity connection, property registration, or other services. The governments could also consider holding of GCC a prerequisite for government jobs at all levels. It is pertinent to note the similar initiative of the Indian Railway—Lucky Yatri Yojana—a privately sponsored initiative that turned every valid train ticket into a lottery entry, offering daily cash prizes of Rs. 10,000 and a weekly jackpot of Rs. 50,000 to incentivize commuters to travel with a ticket and curb fare evasion. Though the scheme did not take off as intended, the takeaway from the scheme is that incentives encourage people positively. Governments can formulate a robust rewarding mechanism to improve civic sense of our citizens, in addition to the existing stringent laws. The Union Government, in its Budget for 2025-26 has announced the setting up of “Urban Challenge Fund”, wherein “the Government will set up an Urban Challenge Fund of Rs.1 lakh crore to implement the proposals for ‘Cities as Growth Hubs’, ‘Creative Redevelopment of Cities’ and ‘Water and Sanitation’.” For the current year, the Union Government allocated Rs. 10,000 crore under the proposed Fund. The government could implement a citizen-reward initiatives, such as GCC, under this Fund and encourage responsible civic behaviour from its citizens. The Author is Public Policy Fellow at AgaPuram Policy Research Centre, Erode The views expressed by the author are personal and does

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Interest Rate Cuts – A Sinker to a Plunging Dollar

Leave a Comment / Indian Economy, Public Policy, World Economy /

Interest Rate Cuts – A Sinker to a Plunging Dollar Interest Rate Cuts – A Sinker to a Plunging Dollar Chandrasekaran Balakrishnan September 26, 2025 Indian Economy, Public Policy, World Economy The US Dollar has been in a rapid decline since 2022, and the series of hikes initiated by Powell has merely stemmed the rate of decline rather than reversing the trend. This pattern has accelerated since Trump assumed office at the start of the year. It is in this context that we should view the 25bps cut effected by Powell with a promise of two more similar cuts to be made in the remainder of this year. Gold prices have more than doubled since January 2022 (from $1,800/oz to $3,700/oz) while DXY has declined by nearly 15% (112 to 97) in the same period. This indicates that the US Dollar is not only losing purchasing power against the market standard of gold, but also against the currencies of its trading partners. In this environment, what a rate cut(s) would do is to accelerate the decline of the Dollar – most certainly against gold but even vis-à-vis other currencies. What the cut signifies to the markets is the greater preference of the US Fed for its employment mandate over price stability (which was, incidentally, the only mandate of the US Fed when it was formed in 1913). As an aside, I should point out that in the book “RIP USD: 1971-202X …and the Way Forward”, it was explained why gold prices will touch $24,000/oz by the end of this decade. So, though the rate cuts pave the way for higher gold prices, these are merely proximate reasons within the larger context of the world reverting to some form of a gold monetary system over the next few years. Do Rate Cuts Always Lead to a Lower Dollar? On the contrary, the converse is true more often than not. Apart from the 4-year period between 2007 and 2011, interest rate movements and gold price changes are positively correlated; that is, when interest rates rise, gold prices tend to increase and vice versa. The reasons are manifold. At the outset, explaining gold prices with a single factor such as interest rates is academically a flawed proposition. We will have to consider at least 3 factors – interest rates, price inflation and Cantillon effects to explain the movements in gold prices. Without delving into a detailed discussion of the factors mentioned above, the prevailing high price inflation rates today lead to a situation where a reduction in interest rates results in increasing gold prices. So, while we are in an environment where gold prices are structurally positioned to go multiples higher from the current levels, the Fed action of cutting interest rates would be the equivalent of throwing gasoline on an inferno. What should the Fed do? Whether Bernanke acknowledges it or not, the US is in a stagflationary economic situation. The growth and employment numbers are below par, while the price inflation numbers are admittedly much higher than their targets. This is despite accepting the government numbers at face value, and we have repeatedly seen the systemic reporting bias in painting a rosier picture than is actually the case. What did the Fed do when it was previously in such a situation, i.e., a stagflation? We will have to go back to the 1970s, and as one can observe in the table above, the Fed hiked rates substantially to 20%. That begs the question – What is different in the environment back then that warranted hiking rates, while under a similar environment today, the Fed is embarking on a path of lower rates? Between the two issues – the stability of the dollar (price inflation or stable prices) and employment, the former must take precedence. There is no historical record of any country achieving prosperity by devaluing its currency. This was precisely the hard choice in the 1970s as well, and the US Fed under Paul Volcker raised interest rates high enough to quell the monetary as well as price inflationary forces and bring stability to the US Dollar. For context, the US annual price inflation has been above 2% since 2020. So why is the exact opposite monetary path being attempted today? The elephant in the room is obviously the $37 trillion National debt that is bankrupting the US Federal Government. Despite previous claims that the US Fed managed the impossible (i.e., raised interest rates without affecting employment), recent trends have exposed the flawed data basis on which the Fed had made the claims. It is only a matter of time before the GDP is also revised downwards in line with the employment data. The Economic Forecast – What does all this indicate? The only question now is “how long and how deep will the stagflation be?” Given the massive imbalances in the US Economy (multi-trillion-dollar budget deficits, trillion-dollar trade deficits, and debt-to-GDP above 125%), we should not be surprised by an economic playbook that is much worse than the 1970s. That is the best-case scenario, and in my opinion, it is not a very high-probability event. The most probable forecast would have to be a high-inflationary depression, with a possibility of hyperinflation depending on how the Fed / Trump choose to respond to the emerging situation. If they continue to prioritize temporary economic stimulus over price stability, then hyperinflation would become a probable scenario. For 2026, we should not be surprised to see gold prices in the $5,000 – $6,000 range. This is assuming none of the asset bubbles burst (the AI bubble, Housing Bubble 2.0, and the US Bond Bubble). It is pretty unlikely that the Fed can postpone the bursting of these asset bubbles, and in that case, we should witness even higher gold prices depending on the size of the QE in store. About the Author: Shanmuganathan N (aka Shan) is an Austrian/Libertarian Economist based in Chennai, India. He is the author of the recently published

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Is the Fed Setting Up Trump to be the Scapegoat?

Leave a Comment / Indian Liberals, Public Policy, World Economy /

Is the Fed Setting Up Trump to be the Scapegoat? Is the Fed Setting Up Trump to be the Scapegoat? by Shanmuganathan N September 4, 2025 Indian Liberals, Public Policy, World Economy In Greek mythology, Scylla and Charybdis are two mythical sea monsters guarding a narrow strait. Navigating the sail successfully would require not getting too close to one monster while trying to avoid the other. The job of the Federal Reserve has often been compared to (mistakenly, though) the above, wherein they have to navigate the economy on its dual mandate of maximum employment and price stability. The Phillips Curve is the most standard model that depicts this supposed inverse relationship between unemployment and price inflation. Neo-Keynesian economics has broadened the interpretation of the Phillips curve from unemployment to include economic growth. So, the narrative is that if the economy is operating below potential in terms of GDP growth rate or employment, then the Federal Reserve would reduce the Fed Funds rate to stimulate the economy. If price inflation exceeds the 2% mandate, the Federal Reserve would raise the Fed Funds rate to dampen the price inflationary forces. But what happens if the growth is below par or unemployment numbers are high, AND concurrently, price inflation numbers are high? Technically, the economic scenario is called “Stagflation”. Just a year back, when Powell was quizzed about the possibilities, he quipped, “I don’t see the stag or the -flation, actually.” A short twelve months later, that is precisely the situation in front of Powell. How do the Keynesians explain “Stagflation”? They don’t; they hope that it doesn’t occur during their tenures. Paul Volcker was the last Fed Chairman who had to handle a similar situation, and even he would not want to step into the shoes of Powell today. The condition is much worse on a logarithmic scale. The solution though remains the same: dramatically hike interest rates. However, it cannot be implemented today, as it would collapse the system due to the substantial debt. But let us step back a bit and examine the entire hypothesis of this employment-price inflation tradeoff. At the outset, followers of Austrian Economics would know that this Phillips Curve and what it represents is almost as mythical as the sea monsters. It is the combination of Cantillon effects and the misrepresentation of price inflation that creates this illusion of trade-offs between employment and price stability. Examining the US price Index from the year 1800 to 1913 reveals a period of continuously falling prices. The price index was down by more than 40% by 1913, as compared to the starting year 1800. By some estimates, this fall in prices was even higher as the product basket was continuously becoming better and not even strictly comparable. Most major innovations we can think of – telephones, automobiles, airplanes, computers, mass production, modern medicine, military hardware, etc – happened during this period. The transition of the US from an erstwhile colony of the British Empire to the dominant superpower also occurred in this period. If falling prices had caused the Great Depression of 1929 to 1946, as is popularly believed, or as the Phillips curve implies, the entire 19th century (1801-1900) should have been an extended depression. Instead, what we actually witnessed was a boom of unparalleled proportions in modern history, except for what has happened in China starting in 1990 to date. How does one reconcile the Phillips Curve, and indeed, Keynesian Economics, with the above? One simply cannot. So, what does all this have to do with today? A note on the current stage, i.e., “The Oncoming Inflationary Bust,” would be in order before proceeding. The US Government has incurred unprecedented debt and liabilities since the 2008 GFC. The National debt is at $37 trillion and growing at $3+ trillion per year, while the unfunded liabilities are an additional $200+ trillion. If the Federal government were to pay its entire income towards servicing this debt (ignoring the interest part), it would take nearly 50 years to extinguish this debt. A sovereign credit rating of anything other than JUNK would be outright disregard for the fundamentals. The only way this debt is going to be resolved would be through a hyperinflationary meltdown of the economy. Barring a Milei-style presidency, that is the most probable outcome.  However, the mainstream media narrative even today is that Trump wants to lower interest rates to achieve even higher growth rates, from already what is the “best performing economy ever”. On the other hand, Powell intends to hold the rates steady to protect the purchasing power of the US Dollar. The economic truth is that both narratives are flawed. Even a 0% rate today cannot prevent a bust of the financial systems that is floating on a sea of asset bubbles – an AI bubble that dwarfs the NASDAQ 2000 bubble; a housing bubble that is far bigger than the 2008 housing bubble; and a US bond bubble that is bigger than these two bubbles combined. The bust at this point is inevitable and imminent – the timeframes would be a few months and not a few years. The current rate of 4.25% to 4.5% is way too low to contain price inflation meaningfully. The National debt is increasing at an even higher pace than before, and monetary inflation is a natural outcome, indicating that the rates are very accommodative. Why Rate Cuts are Imminent Whether Trump is aware of the above is debatable, but unquestionably, Powell understands the deep crisis the US Economy and the US Dollar face in the months ahead. The Fed even telegraphed the oncoming crisis in one of its own publications. For more than 50 months in a row, the core inflation rate – the Fed’s preferred measure – has been above the target 2%. The June 2025 number was 2.82% and under normal conditions, the US Fed would have aggressively hiked the rates. The only reason why they do not do so is “Fiscal Dominance”. What

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The Euphoria of Tamil Nadu GSDP Growth Rate!!

Leave a Comment / Indian Economy, Public Policy, Tamilnadu Economy /

The Euphoria of Tamil Nadu GSDP Growth Rate!! The Euphoria of Tamil Nadu GSDP Growth Rate!! Chandrasekaran Balakrishnan September 4, 2025 Indian Economy, Public Policy, Tamilnadu Economy The regional economies in India are still largely evolving and have their own pace of sectoral growth trends. The evolution of the state economy is dependent on the pattern of institutional governance, services, and facilities deliveries, which plays a vital role for achieving the national dream of Viksit Bharath@2047. The degree of economic freedom between and within States varies across India, indicating disparity. The Gross State Domestic Product (GSDP) is an aggregate of all sectors, broadly consisting of agriculture and allied activities considered as the primary sector; manufacturing, including construction, etc., as the secondary sector; and financial services, transports, hotels, etc., as the services sector. Each sub sector has its own significance for achieving a balanced regional growth as well as intra-regional growth within a State and contributing to the national growth rate. When politicians or policymakers become passionate about achieving a year’s GSDP growth rate as the biggest achievement, leaving the growth trends and other inferences, it becomes detrimental for economic development, which accounts for a sustained and overall improvement in welfare. Further, at the regional level, some of the sub-sectors’ growth trends are undermined while focusing only on the overall GSDP growth rates, which leads to not only misinterpretations but wrong conclusions for short term political gains. It is pertinent to note that Ludwig Von Mises, a prominent figure in the Austrian School of Economic Thought, saw statistics as descriptive rather than explanatory, and he cautioned against interpreting statistical regularities for political milage. He argued that statistics deal with past events and historical facts, lacking the ability to predict future outcomes or reveal causal relationships in the realm of human action. In April, 2025 when the Union Ministry of Statistics and Programme Implementation (MoSPI) had released the state-wise GSDP data, there was a huge celebration among a section with the claim that the one-year growth rate of Tamil Nadu state (9.69% for 2024-25) was an extraordinary achievement. The truth is that one year growth rate data cannot give a true picture for a trend analysis- short run, medium run, and long run. The macroeconomic growth rate discourse in the State missed an important point that Tamil Nadu’s agriculture and allied sector witnessed in negative growth of -0.15% in 2024-25 (provisional). As per the provisional data, the average GSDP Growth rate of Tamil Nadu in the last four years (2021-22 to 2024-25) was 8.48%, which was way below the growth rates of States like Odisha (9.80%) and Maharashtra (8.99), and Karnataka (8.73%). Moreover, more than a dozen States’ provisional GSDP data were not even released for the year 2024-25 in April, 2025. Similarly, the MoSPI released the revised State-wise GSDP data on 1st August, 2025, for the financial year 2024-25. One-year GDP data is important, but it is the trend which is more important. There is another dubious claim of a 14-year break of the Tamil Nadu State GSDP! Let’s look at what the actual average trend data reveals. In the current regime of DMK rule in Tamil Nadu, the average growth rate of State GSDP for last four years (2021-22 to 2024-25) is 8.63% which is lower than states like Assam (9.05%), Bihar (9.59%), Karnataka (8.73%), Maharashtra (8.99%), Meghalaya (9.54%), and Uttara Pradesh (9.15%). It is also interesting to look at the data of the first four years’ average state GSDP growth rate of the previous DMK regime. Tamil Nadu’s economy performed far better than comparatively. The average state GDP growth rate for the first four years was 9.41% (2006-7 to 2009-10). Further, even then, States like Bihar (10.41%), Chhattisgarh (9.76%), Haryana (9.89%), etc. outperformed Tamil Nadu. It is pertinent to note that Tamil Nadu’s share of GDP at all India level over the last 7 decades increased only by 0.2% from 8.7 % in 1960-61 to 8.9% 2023-24. Maharashtra’s economic performance has remained relatively steady throughout the period (from 12.5% to 13.3%). According to recent NCAER Analysis (2025), the state of public finance of Tamil Nadu is worrisome. Debt Sustainability Analysis, a method used to assess whether a state (or country) can meet its debt obligations without resorting to excessive borrowing or facing financial instability, expects an upward and increasing trajectory, during the period from 2022-23 to 2026-27. In recent years, what Tamil Nadu missed is the following key drivers of economic growth and creation of employments opportunities, which is at par with States of Karnataka and Maharashtra. Attracting FDI: Analysis of major states’ attractions of Foreign Direct Investments (FDI) Trends of the last decade (2015-16 to 2024–25) shows Gujarat’s share increased from 6% to 11%, while Tamil Nadu’s share declined from 11% to 7%. Tamil Nadu is still lacking what Karnataka and Maharashtra have nurtured for decades, including improved infrastructure policy stability and mature industrial ecosystems across the departments and across the region/districts within the State. The latest FDI data analysis for 2024-25 reveals that among the top ten states, Maharashtra accounts for 39%, followed by Karnataka (13%) and Delhi (12%). Tamil Nadu ranks 5th with FDI inflow of Rs. 31,103 crores. Under-utilised Coastal economy: The strategic geo-economic coastal advantage of Tamil Nadu has not yet been harnessed. Mobility: In the area of mobility as a key driver of the economy, Tamil Nadu has done some concrete efforts in terms of policy for the attraction of new investments for the production of Electric Vehicles, but it has been lacking consistently over the years in terms of adoption of EVs in public transportations across the state. Sub-par urban civic amenities: Urban Population in Tamil Nadu has consistently exceeded the national estimates, and the gap between the two has widened, particularly over the past three decades. Now, Tamil Nadu has 54% of its urban population, but basic urban civic facilities are very poor across the state, without decentralisation Diversification: Tamil Nadu predominantly concentrates on some services sectors, agriculture, forestry, and

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India Ranks 15th in FDI -UNCTAD Report 2025

Leave a Comment / Economic Reforms, Indian Economy, Public Policy, World Economy /

India Ranks 15th in FDI -UNCTAD Report 2025 India Ranks 15th in FDI -UNCTAD Report 2025 Madhusudhanan S July 30, 2025 Economic Reforms, Indian Economy, Public Policy, World Economy On June 19, 2025, the World Investment Report for 2025 was released by the United Nations Conference on Trade and Development (UNCTAD), highlighting a negative outlook due to trade tensions, geopolitical issues, and economic volatility. This has led to a decline in Foreign Direct Investment (FDI) prospects, impacting GDP growth, capital formation, trade flows, financial stability, and investor confidence. Global Investment Trends The World Investment Report 2025, launched by Secretary-General Rebeca Grynspan, highlights a concerning trend where foreign direct investment (FDI) is decreasing in countries and sectors that need it the most. Productive FDI declined by 11% in 2024, marking the second year of decline. This decline is not just a temporary setback but a consistent pattern, according to Ms. Grynspan. The report revealed a significant drop in productive FDI by 11% in 2024, marking a concerning trend. The US remains a top source and destination for FDI, with Asian economies also prominent in FDI outflows.                                          Foreign Direct Investment  – Top 10 Destination Economies Rank Economies/ Countries Billions in Dollars 1 United States 279 2 Singapore 143 3 Hong Kong SAR, China 126 4 China 116 5 Luxembourg 106 6 Canada 64 7 Brazil 59 8 Australia 53 9 Egypt 47 10 United Arab Emirates 46 Source: UN Trade based  on Information from The Financial Times, fDI markets – Authour converted image to Table Key sectors like renewable energy, water, sanitation, and agrifood systems have seen declines, hindering development efforts. Investment in key sectors like renewable energy has dropped by 31%, water and sanitation by 30%, and agrifood systems by 19%. Health investment has increased by nearly 20%, but the global total is still below $15 billion. These shortfalls are hindering progress in critical areas, highlighting the need for urgent action to ensure sustainable development for all. Developing Asia attracted $605 billion in FDI in 2024 but faces challenges like declining infrastructure investment and policy uncertainty. India’s Possition in Foreign Direct Investment India ranked 15th  globally for FDI inflows in 2024, with $27.6 billion, and 4th in Greenfield project announcements with 1,080 projects unveild in 2024. The country also saw growth in international project finance deals and outward investments. India’s 97 international project finance deals placed it among the top five global economies. With $24 billion in outward foreign investment, the country climbed to 18th place globally in FDI outflows.  There was an improvement in the rankings for both India and Saudi Arabia. The US and India led in greenfield activities in sectors like semiconductors and automobiles, with new battery and electric vehicle projects announced globally. The report ends with recommendations for channeling capital to areas in need by implementing reforms in global financial systems, expanding the use of blended finance, and adopting investment regulations that promote digital and clean transitions. Conclusion The Government of India’s policies have played a key role in making the economy one of the fastest-growing in the world and a top destination for foreign direct investment (FDI). Despite global economic challenges and changing supply chains, India’s stability and investment potential remain robust. India’s consistent implementation of policies and clear vision have attracted significant FDI over the past decade, showcasing confidence in the country’s institutions, skilled workforce, and future prospects. The Author is a Research Fellow at AgaPuram Policy Research Centre.  Views expressed by the author are personal and need not reflect or represent the views of the AgaPuram Policy Research Centre. https://thebangaloremonitor.com/india-ranks-15-in-global-fdi-attraction-unctad-report-2025/

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