About Ayushman Sahakar Scheme:

• It is a scheme of the National Cooperative Development Corporation for financial assistance to cooperatives on holistic healthcare infrastructure, education and services.
• Objectives of the Ayushman Sahakar Scheme:
  • To assist provision of affordable and holistic healthcare through hospitals / healthcare / education facilities by cooperative societies,
  • To assist promotion of AYUSH facilities by cooperative societies,
  • To assist cooperative societies meet the objectives of National Health Policy,
  • To assist cooperative societies participate in the National Digital Health Mission
• Features of Ayushman Sahakar Scheme:
  • Eligibility: Any Cooperative Society registered under any State/ Multi State Cooperative Societies Act in the country, with suitable provision in the bye-laws to undertake services related to hospital/ healthcare/ health education.
  • Loan Period: Up to 8 years, including 1 - 2 years moratorium on payment of principal, depending on the type of project and its ability to generate revenue.
  • Incentive:  1 % interest rebate in case of borrower cooperative society where women members are in majority.
  • Support the modernisation of cooperative healthcare facilities.
  • Support the establishment of healthcare infrastructure

About Vidyanjali Initiative:

• It was launched in 2021 in alignment with the National Education Policy 2020.
• It aims to strengthen government schools through community and private sector participation, enabling greater support for students’ holistic development and improved learning outcomes.
• It is an initiative of Department of School Education and Literacy, Ministry of Education, for facilitating the community and volunteers to directly connect with the government and government-aided schools to contribute their services and/or assets/ materials/equipments through a dedicated portal.
• The platform connects volunteers, alumni, institutions, civil society organisations and CSR partners directly with schools based on their identified needs.
• Salient features of the platform:
  • Create an interface between volunteers and schools to bridge the gap between them
  • Help school students in getting exposure other than academic activities
  • Enable schools to share their activities for Volunteer-ship, where volunteers can participate by performing various activities
  • Enable Ministry to view various reports like Schools on-boarded, Volunteers, Activities performed etc.
  • Facilitate the participation of Citizens/Volunteers/Alumni’s to contribute services at schools and their management.

Context:

• India’s life insurance industry paid ₹60,799 crore in commissions in FY2025, with payouts rising 18% year-on-year, far exceeding the 6.7% growth in premiums.
• This widening gap means distribution costs are increasing nearly three times faster than the business itself. The RBI flagged this divergence in its Financial Stability Report (December 2025).
• While public insurers have maintained relatively better cost discipline, several private insurers have seen sharper commission escalation since 2022–23.
• For policyholders, this trend translates into significant long-term value erosion, driven not by misconduct but by structural imbalances in bargaining power within certain distribution channels.
• This article highlights the hidden structural costs embedded in India’s life insurance distribution system, where commission payouts are rising far faster than premium growth.

Public–Private Divide in Life Insurance Commissions

• Widening Cost Gap in FY2025
  • FY2025 data reveal a clear structural divergence between public and private life insurers.
  • The Life Insurance Corporation of India (LIC) reduced its commission ratio from 5.45% to 5.17%, despite modest premium growth of 2.8%.
  • In contrast, private insurers relying on alternate channels—such as bancassurance and brokers—saw commission ratios jump from 7.21% to 8.95%, a 174-basis-point increase.
    • Bancassurance is a partnership where banks sell insurance products (life, health, general) to their existing customers.
  • Private commission payouts surged 38.8%, reaching ₹35,491 crore.
• Channel Composition Drives Cost Behaviour
  • The divergence—amounting to over 200 basis points—is largely explained by:
    • Distribution channel mix (agency vs bancassurance/brokers)
    • Share of single-premium business
  • Agency-driven models, like LIC’s, show greater cost discipline. Insurers dependent on alternate channels exhibit escalating commission expenses.
  • This reflects structural causation rather than coincidence.
• Bargaining Power and Market Dynamics
  • The root cause lies in distribution power concentration.
  • Twenty-six life insurers compete for partnerships with banks controlling over 4 lakh branches.
  • Banks can switch insurer partnerships or adjust product placement easily, while insurers face high costs in building alternative distribution networks.
  • This imbalance concentrates pricing power with intermediaries, driving commission inflation.
• Regulatory Context and Competitive Incentives
  • Earlier, the Insurance Regulatory and Development Authority of India (IRDAI) imposed strict product-wise commission caps.
  • Under those limits, competitive pressures shifted into indirect incentives—marketing fees, training support, or infrastructure arrangements.
  • The issue is not necessarily regulatory non-compliance, but the predictable outcome of competition interacting with concentrated distribution power.

Unchanged Economics Behind Rising Insurance Commissions

• EOM Framework: Transparency Without Structural Change
  • The 2023–24 shift to the Expenses of Management (EOM) framework aimed to enhance autonomy and efficiency.
  • While it improved transparency by surfacing previously embedded costs as commissions, the underlying distribution economics remain unchanged.
  • Institutions with bargaining power have simply become more assertive in demanding higher payouts.
• Not an Agent Problem, but a Market Structure Issue
  • Blaming individual agents is misplaced. After deductions, agents retain only 35–40% of headline commissions.
  • The larger share—around ₹26,000 crore in FY2025—flows to corporate intermediaries such as banks and insurance marketing firms that control large customer networks.
  • This reflects a concentration of distribution power, not misconduct at the agent level.
• Limitations of Common Policy Fixes
  • Several proposed remedies fall short:
    • Clawbacks may discourage distribution by creating cash flow uncertainty.
    • Commission disclosure offers limited consumer benefit and may push transactions into informal rebates.
    • Open architecture models could weaken insurer incentives to invest in training and service, as seen in parts of the mutual fund industry post-2012.
• Core Challenge: Incentive Design and Bargaining Power
  • The problem cannot be solved through accounting changes or disclosure alone.
  • It stems from incentive structures and concentrated bargaining power within distribution channels, requiring deeper structural reform rather than surface-level adjustments.

A Way Out: Reforming Insurance Distribution Economics

• Shift Toward Renewal-Based Incentives
  • A sustainable solution lies in reducing extreme front-loaded commissions and strengthening renewal income.
  • Linking payouts to persistency, servicing quality, and long-term policy retention would align distributor incentives with customer outcomes rather than short-term sales.
• Stronger Regulatory Coordination
  • Effective oversight of bancassurance requires joint supervision by the RBI and IRDAI, focusing not only on expense ratios but also on:
    • Policy persistency
    • Customer complaints
    • Servicing standards
    • Commission structures
  • EOM limits must account for channel realities while keeping acquisition costs within reasonable bounds.
• Outcome-Oriented Regulation
  • Regulation should shift from process compliance to measurable outcomes such as:
    • Retention rates
    • Claims experience
    • Service satisfaction
  • This would better protect policyholder value.
• Why It Matters for Insurance Penetration?
  • Insurance penetration has fallen from 4% to 3.7% of GDP in FY2024.
  • If distribution costs keep rising faster than customer value, insurance may lose relevance for middle-income households.

Why in News?

• On February 12, 2026, the Ministry of Statistics and Programme Implementation (MoSPI) released India’s first retail inflation data under the new Consumer Price Index (CPI) series (Base Year: 2024=100).
• Retail inflation for January 2026 stood at 2.75% (provisional) — the first official reading under the revised framework.
• This revision replaces the earlier 2012 base year, reflecting changes in consumption behaviour, market structures, and household expenditure patterns, as captured by the Household Consumption Expenditure Survey (HCES) 2023–24.

What’s in Today’s Article?

• Why a New CPI Series?
• Key Structural Changes in the New CPI
• Revised Weight Structure - Changing Consumption Patterns
• Inflation Numbers (January 2026)
• Challenges and Way Forward
• Conclusion

Why a New CPI Series?

• India’s economy has undergone structural transformation over the past decade.
• For example,
  • Rising share of services
  • Growth of digital consumption
  • Shift toward cleaner fuels
  • Changing food patterns
  • Expansion of online marketplaces
• The new CPI aligns inflation measurement with current consumption realities, thereby improving its relevance for monetary policy (RBI), fiscal policy calibration, wage indexation, welfare schemes, GDP deflation and national accounts.
• Significance for monetary and fiscal policy:
  • The CPI is the primary inflation measure for RBI’s Monetary Policy Committee (MPC), linked to the inflation targeting framework (4% ± 2%), and is used for DA revisions, poverty estimation, real income calculation, welfare transfers.
  • Lower weight of volatile food items may reduce short-term fluctuations, and provide clearer inflation signals.

Key Structural Changes in the New CPI:

• Updated base year: Changed from 2012 to 2024, ensuring contemporary relevance.
• Adoption of international classification:
  • The new series adopts 12 consumption divisions in line with the COICOP 2018 (Classification of Individual Consumption According to Purpose) framework.
  • 12 divisions (more granular) from earlier structure (6 groups) enhances comparability with global inflation standards.
• Expanded coverage of items: Total items increased from 299 to 358 (goods increased to 308 from 259, and services from 40 to 50). This reflects growth of the services economy, and modern consumption patterns.
• New items added:
  • Rural house rent (introduced for the first time)
  • Online media and streaming services
  • Value-added dairy products
  • Barley and related products
  • Pen drives, external hard disks
  • Attendant and babysitter services
  • Exercise equipment
  • Cleaner fuels (CNG/PNG)
• Removed items: VCR/VCD/DVD players, tape recorders, radios, CD/DVD cassettes, second-hand clothing, coir/rope, reflecting technological obsolescence and lifestyle shift.
• Wider data collection:
  • The new series collects data from more sources across the country. For example, data is collected from 1,465 rural markets (up from 1,181) and 1,395 urban markets (up from 1,114).
  • The new series also collects data from 12 online marketplaces. Inclusion of online platforms is a major methodological advancement.

Revised Weight Structure - Changing Consumption Patterns:

• Food and beverages:
  • Weight reduced to 36.75% (from 45.86%).
  • Implication: Headline inflation may become less volatile, as food prices are typically unstable. Food still remains the largest
• Housing (expanded category):
  • Weight increased from 10.07% to 17.67%.
  • Now expanded to include water, electricity, gas, and other fuels. Also introduces rural house rent, improving representativeness.

Inflation Numbers (January 2026):

• Headline CPI Inflation (2.75%): Rural: 2.73%, Urban: 2.77%
• Food Inflation (CFPI): 2.13%
  • Rural: 1.96%
  • Urban: 2.44%
• Housing Inflation: 2.05%
  • Rural: 2.39%
  • Urban: 1.92%
• Historical comparison is limited since this is the first release under the new base. A linking factor has been provided to compute backward-compatible index values up to 2013.

Challenges and Way Forward:

• Comparability issues: Break in time series complicates long-term analysis. Integrate CPI data with big data analytics.
• Data consistency: Linking factor may not perfectly replicate old series trends. Enhance transparency in linking methodology.
• Food weight reduction debate: India remains a lower-middle-income economy where food inflation impacts welfare significantly. Ensure regular revision cycles (every 5–10 years).
• Rural representation concerns: Despite expansion, informal consumption may still be underreported. Strengthen rural data infrastructure. Increase public statistical literacy.
• Online price volatility: Digital marketplace pricing can fluctuate dynamically. Improve real-time digital price collection systems.

Conclusion:

• The launch of the CPI Base 2024 series marks a crucial reform in India’s statistical architecture.
• By aligning inflation measurement with contemporary consumption patterns and international standards, the new series enhances the reliability of inflation signals for policymakers.
• However, maintaining continuity, credibility, and transparency will be essential to ensure that the CPI remains a trusted macroeconomic anchor in India’s inflation-targeting regime.
• In essence, this is not just a statistical update—it is a recalibration of how India measures the cost of living in a transforming economy.

Why in the News?

• The SHANTI Act, recently passed in Parliament, has opened India’s nuclear power sector to private players and significantly altered the nuclear liability framework.

What’s in Today’s Article?

• Nuclear Liability (Background, Statistics, etc.)
• SHANTI Act (Key Features, Liability Cap Comparison, Safety Concerns, Implications, etc.)

Background of Nuclear Liability in India

• India’s nuclear liability regime was primarily governed by the Civil Liability for Nuclear Damage Act (CLNDA), 2010.
• The Act was enacted after India signed the Convention on Supplementary Compensation (CSC) for Nuclear Damage.
• Its key objective was to ensure prompt compensation to victims in case of a nuclear accident while also holding responsible parties accountable.
• A distinctive feature of India’s framework was the “right of recourse”, which allowed the nuclear operator to seek compensation from suppliers if an accident occurred due to defective equipment or services.
• Additionally, Section 46 of the CLNDA permitted victims to pursue remedies under other laws, including criminal law.
• This structure was seen as strengthening accountability but was criticised by international suppliers who feared unlimited liability exposure.
• Nuclear energy currently contributes only around 3% of India’s electricity generation.
• Despite ambitious targets, 10 GW by 2000 and 20 GW by 2020, actual capacity reached only 2.86 GW in 2000 and 6.78 GW in 2020.
• High capital costs, safety concerns, and liability issues have been key constraints.

Key Features of the SHANTI Act

• Opening the Sector to Private Entities
  • The Act allows private companies to operate nuclear power plants, ending the Union government’s exclusive control over the sector.
  • This marks a structural shift in India’s atomic energy governance model.
• Supplier Indemnity and Removal of Right of Recourse
  • The Act channels liability entirely to the operator and removes the operator’s “right of recourse” against suppliers.
  • This means suppliers cannot be sued for defects in equipment, even if such defects contribute to an accident.
• Liability Caps and Changes to CLNDA
  • The operator’s liability is capped between Rs. 100 crore (for small plants) and Rs. 3,000 crore (for large plants).
  • The total liability for a nuclear accident, including the Centre’s contribution, is capped at 300 million Special Drawing Rights (approximately Rs. 3,900 crore).
  • The Act also omits Clause 46 of the CLNDA, thereby limiting victims’ ability to seek remedies under other laws.
  • Additionally, it provides a legislative framework for the Atomic Energy Regulatory Board (AERB), but its independence is limited as members are selected by a committee constituted by the Atomic Energy Commission.

Rationale Behind Supplier Indemnity

• Major nuclear accidents such as Three Mile Island (1979), Chornobyl (1986), and Fukushima (2011) involved design flaws and equipment vulnerabilities.
• Reports highlighted issues such as reactor design weaknesses, deficient emergency systems, and communication failures by suppliers.
• Despite this historical evidence, multinational suppliers, particularly from the U.S., have consistently argued that India’s liability framework discouraged investment.
• International nuclear liability conventions generally channel liability exclusively to operators and shield suppliers.
• The SHANTI Act aligns India’s domestic framework with these international norms by indemnifying suppliers from civil and criminal consequences.

Comparison of Liability Caps with Potential Damages

• The liability caps under the SHANTI Act are significantly lower than the economic costs of past nuclear disasters.

• The Fukushima accident’s total cost has been estimated at around Rs. 46 lakh crore.
• Belarus alone estimated losses from Chornobyl at approximately Rs. 21 lakh crore.

• In contrast, India’s total liability cap of around Rs. 3,900 crore is nearly a thousand times smaller than these figures.
• Even with additional funds from the CSC mechanism, compensation would likely cover only a fraction of actual damages in the event of a major disaster.
• This raises concerns that victims may bear a substantial share of losses beyond the statutory cap.

Safety and Moral Hazard Concerns

• The Act introduces the concept of indemnifying operators for accidents caused by “grave natural disasters.”
• This departs from India’s earlier “absolute liability” principle for hazardous industries.
• Such liability caps and indemnities may create a moral hazard. When operators and suppliers are insulated from full financial consequences, they may have weaker incentives to invest in maximum safety and resilience measures.
• Given that Fukushima was triggered by a tsunami, critics argue that natural disasters cannot be treated as unforeseeable risks in nuclear plant design.

Economic and Strategic Implications

• Despite contributing only a small share of electricity, nuclear energy projects involve enormous capital investments.
• For example, two Westinghouse AP1000 reactors in the U.S. cost about $18 billion each.
• The SHANTI Act potentially facilitates greater private and foreign participation in India’s nuclear sector, including plans for 100 GW capacity by 2047. However, small modular reactors, often presented as the future of nuclear energy, remain largely untested and may have higher per-unit capital costs.
• Thus, while the Act may unlock commercial opportunities and attract foreign suppliers, it simultaneously raises questions about regulatory independence, financial risk distribution, and long-term energy viability.

Context

• Recent directive of the Union Ministry of Home Affairs (MHA) mandates the playing of all six stanzas of Vande Mataram at official functions with everyone standing at attention.
• The controversy surrounding the directive raises significant constitutional and philosophical questions.
• At first glance, the order appears to promote national pride, however, a closer examination reveals a deeper issue: the distinction between voluntary patriotism and state-enforced nationalism.
• It is necessary to examine the historical background, the decisions of the Constituent Assembly, and the legal principles laid down by the Supreme Court.

Historical Background: The 1937 Compromise

• The Congress Working Committee Decision
  • In October 1937, the Congress Working Committee met in Calcutta to address objections raised by certain communities regarding Vande Mataram.
  • The meeting included prominent leaders such as Mahatma Gandhi, Dr. Rajendra Prasad, and Sardar Vallabhbhai Patel.
  • After deliberation, the committee unanimously resolved that only the first two stanzas of the song should be used at national gatherings.
  • This decision acknowledged that later portions of Bankim Chandra Chatterjee’s poem contained explicit references to Hindu goddesses such as Durga, Lakshmi, and Saraswati.
  • These religious references were considered potentially exclusionary in a multi-religious society.
• Significance of the Compromise
  • The compromise was not a sign of political weakness. Instead, it reflected a practical effort to build national unity during the freedom struggle.
  • Leaders across ideological lines, including Rabindranath Tagore, supported the use of only the first two stanzas because they celebrated the land and nature rather than specific religious imagery.
  • Thus, from the freedom movement itself, Vande Mataram was adopted in a limited, inclusive form to ensure that all Indians could identify with it regardless of faith.

The Constituent Assembly and Constitutional Position

• National Anthem vs National Song
  • On January 24, 1950, the Constituent Assembly adopted Jana Gana Mana as the National Anthem and granted Vande Mataram equal honour as the National Song, but only in its two-stanza form.
  • The Constitution specifically mentions respect for the National Flag and the National Anthem in Article 51A(a), which outlines the fundamental duties of citizens.
  • Notably, the National Song is not included which indicates that the framers intentionally differentiated between constitutionally binding national symbols and culturally significant ones.
• Legal Protection
  • The Prevention of Insults to National Honour Act, 1971, legally protects the Constitution, the National Flag, and the National Anthem. It does not include Vande Mataram.
  • Consequently, there is no statutory penalty for not singing or standing for the song.
  • This legal structure reflects the framers’ recognition that, unlike the anthem, the song contains religious imagery requiring sensitive handling in a secular state.

Judicial Interpretation: Bijoe Emmanuel vs State of Kerala (1986)

• Facts of the Case
  • In 1985, three schoolchildren belonging to the Jehovah’s Witnesses faith were expelled because they respectfully stood during the National Anthem but refused to sing it due to their religious beliefs.
  • The Kerala High Court upheld the expulsion, but the Supreme Court reversed the decision.
• Supreme Court Ruling
  • Justice O. Chinnappa Reddy ruled that the expulsion violated the children’s fundamental rights to freedom of speech and freedom of religion.
  • The Court clarified that respect for the National Anthem does not require singing it; standing respectfully is sufficient.
  • The judgment also invoked the principle from the American case West Virginia State Board of Education vs Barnette (1943): no authority may compel citizens to profess a particular form of patriotism or belief.
• Constitutional Principle
  • The ruling established a crucial doctrine: the right to remain silent is part of freedom of expression. Therefore, dissent, even silent dissent, cannot be treated as disrespect.

Constitutional Concerns with the 2026 Directive

• Compulsion and Freedom of Conscience
  • The MHA directive requires playing all six stanzas, including those invoking specific Hindu
  • For individuals of other religions or no religion, compulsory participation may conflict with Article 25, which guarantees freedom of conscience and religion.
• Legal Inconsistency
  • If citizens cannot be compelled to sing the National Anthem, an officially protected symbol, then compelling participation in the National Song, which lacks constitutional and statutory protection, becomes even more questionable.
• Secularism and State Neutrality
  • India’s constitutional secularism requires the state to maintain neutrality among religions.
  • Mandating participation in verses that invoke particular deities risks transforming civic nationalism into religious symbolism, potentially undermining the inclusive nature of the republic. 

Conclusion

• The debate over the compulsory performance of Vande Mataram reflects a broader constitutional dilemma: whether unity should be achieved through uniformity or through accommodation.
• Historical precedent, constitutional provisions, and judicial interpretation consistently support the latter approach.
• Ultimately, patriotism in a constitutional democracy cannot be imposed by executive order. It must arise freely from citizens’ allegiance to constitutional principles, freedom, equality, and pluralism.

About Idukki Hydroelectric Project:

• It is built across the Periyar River in the Idukki district of Kerala.
• It is the largest hydroelectric project in Kerala.
• The powerhouse at Moolamattom is the longest underground power station in India, and the pressure shaft is the largest in the country.
• There are three dams associated with this project. They are: Idukki Arch Dam, Cheruthoni Dam & Kulamavu Dam.
  • The Idukki dam is one of the highest ten arch dams in the world and the third highest in India after the Tehri Dam (Uttarakhand) and Bhakra Nangal Dam (Himachal Pradesh).
  • It is the first dam in Asia that is constructed in a double-curvature arch dam type and the second in the world.

About Mud Volcano:

• It is a mound of mud heaved up through overlying sediments.
• The craters are usually shallow and may intermittently erupt mud.
• These eruptions continuously rebuild the cones, which are eroded relatively easily.
• Some mud volcanoes are created by hot-spring activity where large amounts of gas and small amounts of water react chemically with the surrounding rocks and form a boiling mud.
• Other mud volcanoes, entirely of a nonigneous origin, occur only in oil-field regions that are relatively young and have soft, unconsolidated formations.
• Mud volcanoes, also known as “sedimentary volcanoes” or “gas-oil volcanoes,”.
• Mud volcanoes also exist on the floor of the sea and can form islands and banks that alter the topography and shape of the coastline.
• In India, the only mud volcano lies in Baratang Island, a part of the Andaman chain of islands.

About Kapilash Wildlife Sanctuary:

• It is located in the Dhenkanal district of Odisha.
• Vegetation: It is classified as an Eastern Highlands moist deciduous forest
• Flora: It is dominated by sal trees and a rich variety of flora like amla, teak, and kadamba.
• Fauna:
  • It is home to diverse wildlife, including elephants, jungle cats, sloth bears, spotted deer, jackals, and various species of birds such as peacocks, junglefowl, and kingfishers.
  • It also supports several reptiles and unique species like pangolins and porcupines.