Context

• The passage of Pakistan’s 27th Constitutional Amendment (PCA) marks a significant turning point in the country’s constitutional evolution.
• Introduced under the pretext of reorganising aspects of military command, the amendment fundamentally alters the structure of constitutional governance.
• By transferring original jurisdiction over constitutional interpretation, fundamental rights, and federal–provincial disputes from the Supreme Court to a newly created Federal Constitutional Court (FCC), the PCA reshapes the balance of institutional authority.
• This change raises serious concerns about judicial independence, executive dominance, and the long-term stability of constitutional checks and balances. 

The Marginalisation of the Supreme Court of Pakistan

• The Supreme Court of Pakistan has historically served as the principal guardian of the Constitution, particularly through its original jurisdiction.
• This authority enabled it to adjudicate landmark political cases, including the Panama Papers and Memogate controversies, placing the Court at the centre of constitutional accountability.
• The PCA removes this pivotal role, fragmenting constitutional adjudication and weakening the Court’s position as the final arbiter of constitutional meaning.
• This reallocation of authority is not merely procedural. It risks institutional marginalisation, especially in a political system where executive influence has frequently tested judicial autonomy.
• By sidelining the apex court from the most consequential constitutional questions, the amendment undermines coherence in constitutional interpretation and diminishes the Court’s ability to function as an effective check on power.

Judicial Independence and the Rule of Law

• At the heart of constitutional governance lies the rule of law, articulated most famously by A.V. Dicey.
• This doctrine rests on the absence of arbitrary power, equality before the law, and the central role of independent courts as protectors of rights.
• Courts, within this framework, are not passive institutions but active guardians that restrain authority and preserve liberty.
• The PCA unsettles this equilibrium. While specialised constitutional courts are not inherently problematic, their legitimacy depends on demonstrable independence.
• The FCC’s creation, coupled with the scope for executive influence over its composition and functioning, raises the risk that judicial review may become an extension of political power.
• This concern is particularly stark given that the 18th Amendment had sought to insulate the judiciary by strengthening the Judicial Commission of Pakistan and reducing executive interference. The PCA appears to dilute these safeguards.

Historical Warnings and Constitutional Lessons

• The tension between executive authority and judicial autonomy has deep historical roots.
• In early 17th-century England, King James I claimed the right to personally adjudicate disputes, a claim firmly rejected by Sir Edward Coke, the Chief Justice.
• Coke’s insistence that the monarch was subject to the law established a foundational constitutional principle: judicial authority must remain separate from executive will.
• This episode underscores that constitutional governance relies not on the goodwill of rulers but on institutional insulation from power.
• Courts operating under political pressure cannot serve as neutral arbiters.
• The PCA echoes this historical struggle by relocating constitutional interpretation to a forum potentially vulnerable to political preferences, thereby weakening the structural foundations of judicial neutrality.

Regional Context and Implications for India

• The PCA must be understood within a broader South Asian context marked by political instability, security pressures, and institutional strain.
• In such environments, governments are often tempted to prioritise control over constitutional restraint.
• For countries in the Global South, where democratic institutions remain fragile, constitutional design choices carry lasting consequences.
• For India, developments in Pakistan are instructive rather than comparative. As the region’s largest constitutional democracy, India has a vested interest in the health of constitutional norms across its neighbourhood.
• The erosion of judicial independence or the normalisation of executive dominance elsewhere in South Asia offers a cautionary lesson.
• History demonstrates that democratic decline is often incremental, achieved through formally valid legal changes rather than abrupt ruptures.
• The experience of inter-war Europe illustrates this danger vividly. Democratic systems were hollowed out through constitutional amendments enacted in the name of stability and necessity.
• Power was consolidated legally, even as institutional checks were steadily dismantled.
• The PCA reflects a similar pattern, preserving constitutional form while weakening constitutional substance.

Conclusion

• Pakistan’s 27th Amendment represents more than an administrative restructuring; it signals a shift in constitutional philosophy.
• By diminishing the role of the Supreme Court and empowering a potentially executive-influenced FCC, the amendment risks transforming the Constitution from a shield against power into an instrument of governance.
• For India and the wider region, the lesson is clear: constitutional democracy depends not merely on written texts but on sustained respect for judicial independence, institutional boundaries, and constitutional restraint.
• The choices republics make today will determine whether this century is defined by democratic renewal or by the quiet erosion of constitutional spirit.

Context

• India stands at a pivotal moment where economic expansion and climate responsibility must advance together.
• The commitment to submit a more ambitious Nationally Determined Contribution (NDC) places pressure on the country to move beyond incremental change towards economy-wide
• Among all sectors, steel emerges as the most consequential. Its transformation will shape India’s ability to meet climate goals while sustaining development, competitiveness, and global leadership in sustainable industrialisation.

The Centrality of Steel to India’s Growth and Emissions Challenge

• Steel underpins India’s development ambitions, enabling infrastructure, urbanisation, and industrial growth.
• To unlock its full economic potential, steel production would need to more than triple from roughly 125 million tonnes annually to over 400 million tonnes by mid-century.
• This scale of expansion is unprecedented and poses a serious climate challenge. The steel sector currently contributes around 12% of national carbon emissions, primarily due to dependence on coal-based blast furnaces.
• India faces a dual imperative common to emerging economies: maintaining rapid growth while aligning with long-term climate targets.
• The central risk lies in locking in high-carbon infrastructure through present-day investments. Steel assets are long-lived, and continued reliance on conventional technologies could embed emissions for decades.
• Such lock-in would undermine climate commitments and weaken India’s long-term economic attractiveness in a world rapidly transitioning towards low-carbon production.

Global Signals and Competitive Pressures

• Global trends reinforce the urgency of transition. Major steel-producing economies are actively reducing emissions.
• China is expanding scrap-based secondary steelmaking and investing in green hydrogen to curb coal dependence.
• The European Union has advanced decarbonisation for decades and introduced the Carbon Border Adjustment Mechanism (CBAM), which penalises carbon-intensive imports.
• These developments signal that access to premium global markets will increasingly depend on demonstrable low-carbon production.
• Countries that fail to adapt face border charges, reputational risks, and declining export competitiveness.
• Conversely, early movers in green steel will secure a durable advantage. Delay, therefore, is no longer a neutral option but a strategic liability for India.

Industry Action: Progress and Its Limits

• India’s steel industry has begun responding. Leading producers are piloting low-emission technologies and diversifying energy sources.
• Initiatives include hydrogen injection trials, expanded renewable energy procurement, modernisation of facilities, and exploration of carbon capture.
• These efforts reflect growing leadership commitment and recognition of the climate challenge.
• However, pilot projects alone are insufficient. The sector must move swiftly towards demonstration plants and full-scale deployment of near-zero-emission technologies.
• Continued investment in business-as-usual blast furnace capacity risks diluting progress.
• Small and medium producers also need to adapt by adopting best available technologies and raw materials to improve carbon efficiency, ensuring that the transition remains equitable across the sector.

Policy Framework: Momentum Without Sufficient Incentives

• Policy direction has improved, but implementation gaps remain.
• The Greening Steel Roadmap outlines a practical transition pathway, while the Green Steel Taxonomy positions India as a global first-mover in defining low-carbon steel.
• Supporting initiatives such as the National Green Hydrogen Mission, expanded renewables, and emissions intensity targets under the Carbon Credit Trading Scheme indicate momentum.
• Yet, strong incentives to decisively shift investments away from coal-based technologies are still lacking.
• Without them, India risks continuing to add outdated infrastructure while others accelerate ahead.
• Key barriers include high hydrogen costs, limited industry-dedicated renewables, an underdeveloped scrap market, constrained natural gas availability, financing challenges, and workforce skill gaps.
• These challenges are significant but solvable, as demonstrated by India’s rapid renewable energy expansion over the past decade.

The Way Forward: Towards a Market-Aligned Transition

• Long-term investment requires clear and credible policy signals.
• Setting stringent short-, medium-, and long-term emission targets would allow firms to plan capital allocation with confidence.
• Early rollout of carbon pricing is essential to internalise emissions costs and distribute them across the value chain.
• Experience from Europe shows that near-zero steel technologies become viable only when carbon prices reach $90–$100 per tonne of CO₂.
• Additional measures include widespread adoption of the Green Steel Taxonomy, public procurement to create domestic demand, robust certification and labelling systems, and the creation of shared infrastructure hubs for energy, hydrogen, gas, and carbon transport.
• Given that low-carbon steelmaking has 30–50% higher capital intensity, targeted fiscal support—especially for smaller producers, is critical for a just transition.

Conclusion

• Green steel is no longer optional. It is central to India’s climate ambitions, industrial competitiveness, and global leadership.
• Having demonstrated capability in renewables and climate diplomacy, India now faces its next decisive test.
• By aligning bold corporate action with a coherent, market-oriented policy framework, the country can decarbonise steel, protect economic growth, and shape global standards for low-carbon industrialisation.

Why in news?

• The Union Budget for 2026–27, to be presented by Nirmala Sitharaman, will outline three core aspects:
  • the government’s expectations for economic growth and planned spending across schemes and departments;
  • projected revenues from tax and non-tax sources; and
  • the level of borrowing required to bridge the gap between income and expenditure, known as the fiscal deficit.
• While the Budget formally marks a fresh financial year, it is rarely a blank-slate exercise.
• In practice, fiscal realities and policy commitments from previous years significantly limit the scope for major shifts, leaving only constrained room for fundamental change.

What’s in Today’s Article?

• Why a New Budget Has Limited Room for Change?
• What Current-Year Data Signals: Three Key Macro Concerns?

Why a New Budget Has Limited Room for Change?

• A Union Budget is constrained by committed expenditures and policy continuity.
• Salaries, pensions, and many subsidies cannot be easily altered year to year, nor can tax rates be frequently changed.
• Crucially, the Finance Minister’s choices are shaped by the state of government finances in the ongoing year.
• Shocks or stresses—such as exports hit by US tariffs—often carry over, setting priorities for the next Budget.
• As a result, reviewing the year just ended offers key clues to what the Budget can realistically address.

What Current-Year Data Signals: Three Key Macro Concerns

• Current-year economic data point to several issues, but at the macroeconomic level, three broad concerns stand out as especially relevant for the upcoming Budget.

1. Weak Nominal GDP Growth: A Key Budget Worry

• While India’s real GDP growth often makes headlines, it is nominal GDP—the total value of goods and services at current prices—that matters most for Budget-making.
• Nominal GDP is the base on which tax revenues, spending plans, and borrowing needs are calculated.
• The Budget Arithmetic Problem
  • If nominal GDP grows slower than expected, government revenues fall short.
  • For example, lower-than-anticipated nominal growth means less tax collection, forcing the government to either:
    • Borrow more, which can crowd out private borrowers and push up interest rates, or
    • Cut spending, potentially reducing funds for R&D, infrastructure, or welfare.
• A Sustained Slowdown
• India’s nominal GDP growth has been decelerating for years. For the current year, it is expected to grow by just 8%, markedly lower than the levels seen over the past two decades.
• This is below the 10.1% growth assumed in last year’s Budget and reflects a recent secular slowdown.
• Implications for Budget 2026
  • The First Advance Estimates now peg nominal GDP growth at 8%, tightening fiscal space.
  • The foremost challenge for the Finance Minister is to devise a strategy to lift nominal GDP growth in the coming year to stabilise revenues and avoid difficult trade-offs between borrowing and spending.

1. Weak Tax Buoyancy: Revenues Falling Short of Expectations

• Tax buoyancy measures how tax revenues respond to economic growth.
• A buoyancy of 1 means tax collections rise in line with GDP. If GDP grows 10%, taxes grow 10%. Budgets often assume buoyancy above 1 to fund spending.
• If nominal GDP grows less than expected and tax buoyancy is lower, revenue shortfalls multiply.
• For instance, slower GDP growth combined with a buoyancy of 0.5 can slash expected additional revenues sharply.
• What’s Happening This Year?
  • Actual tax collections are lagging Budget assumptions across categories.
  • Year-to-date growth in taxes trails the government’s targets—and is even below the weak nominal GDP growth rate (around 8%).
  • Data show that while the Budget assumed tax buoyancy of 1.1, the actual buoyancy is closer to 0.6.
  • In other words, tax revenues are growing at barely half the pace anticipated relative to GDP.
• Implications for the Budget
  • Weak tax buoyancy tightens fiscal space.
  • With revenues underperforming, the government faces tougher choices between higher borrowing and spending restraint, complicating Budget 2026 planning.

1. Weak Private Corporate Investment: A Persistent Growth Challenge

• A central policy objective of the government has been to expand the role of the private sector under the idea of “Minimum Government”.
• Since 2019, this has translated into sharp corporate tax cuts, higher public capital expenditure, and targeted incentives like the Production Linked Incentive (PLI) scheme to lower costs and crowd in private investment.
• When investment did not respond as expected, the government shifted focus to boosting demand—raising income tax exemptions and cutting GST rates—to improve sales prospects and create a stronger business case for private investment.
• Investment Still Below Pre-Pandemic Levels
  • Despite these measures and strong headline GDP growth, data show that private corporate investment remains below pre-pandemic (2019) levels.
  • Firms are hesitant to invest widely, largely because sales growth has not been strong enough to justify fresh capacity creation.
  • Adding to concerns, foreign investors have also reduced exposure to India in recent periods.
  • This has put pressure on the rupee, creating economic and political challenges for Nirmala Sitharaman.
• The Budget Dilemma
  • The key question for the upcoming Budget is how to revive private investment—what additional incentives or reforms can restore confidence, lift demand, and persuade both domestic and global investors to commit capital more decisively.

Why in news?

The latest Economic Survey, led by V Anantha Nageswaran, has reassessed India’s long-term economic prospects and raised the country’s potential growth rate from 6.5% to 7%.

This reassessment comes amid an active debate on India’s current GDP growth trajectory and reflects the Survey’s view of improved structural and medium-term growth capacity of the economy.

What’s in Today’s Article?

• What Is Potential Economic Growth and Why It Matters?
• What Determines a Country’s Potential Growth Rate?
• India’s Declining Potential Growth: The Trend
• Why the Economic Survey Sees Higher Potential Growth?

What Is Potential Economic Growth and Why It Matters?

• A country’s potential growth rate differs from its annual GDP growth.
• While GDP growth measures how fast the economy expands in a given year, potential growth shows the pace at which it can grow without causing high inflation.
• If growth exceeds this level, demand outstrips supply and prices rise; if it falls below, resources remain underused.
• Therefore, to achieve sustainably higher growth, governments must focus on raising the economy’s potential growth rate, not just boosting short-term demand.

What Determines a Country’s Potential Growth Rate

• Capital Stock - Potential growth depends on the size and quality of physical assets—such as roads, bridges, ports, factories, and machinery—that support production and expansion in the economy.
• Labour Input - This includes not just the number of workers, but also their skills, productivity, and capacity, which directly influence how much an economy can produce.
• Total Factor Productivity (TFP) - TFP reflects how efficiently labour and capital are used together. Higher efficiency allows faster growth without inflationary pressure.

India’s Declining Potential Growth: The Trend

• Research by the Reserve Bank of India shows that India’s potential growth rate has declined over time:
  • 2003–2008: around 8%, India’s highest growth phase
  • 2009–2015: fell to 7%
  • Around the Covid-19 period: declined further to 6.5%, as acknowledged by the Chief Economic Adviser.
• This decline underscores the need for sustained reforms to rebuild long-term growth capacity.

Why the Economic Survey Sees Higher Potential Growth?

• Reforms Lifting Medium-Term Growth - The Chief Economic Adviser notes that the cumulative impact of recent policy reforms has raised India’s medium-term potential growth to around 7%, reversing earlier declines.
• Manufacturing and Supply-Side Push - Key reforms over the past three years—PLI schemes, FDI liberalisation, and logistics improvements—have strengthened manufacturing capacity and boosted the economy’s ability to expand supply.
• Labour Market Improvements - Measures such as labour law consolidation, lower regulatory compliance, and state-level reforms, along with investments in education, skilling, and apprenticeships, have reduced labour market frictions and improved employability.
• Conditions for Sustained Gains - The Survey stresses that credible increases in potential growth require persistent reforms and macroeconomic stability—conditions it says India currently meets.
• The Caveat: External Risks - Despite domestic strengths, the Survey cautions that geopolitical conflicts and global disruptions could still constrain India’s ability to fully realise its growth potential.

About NPS Swasthya Pension Scheme (NSPS):

• It is a new initiative launched by the Pension Fund Regulatory and Development Authority (PFRDA) as a Proof of Concept (PoC) under its Regulatory Sandbox Framework.
• The initiative aims to integrate health-related financial benefits with the existing National Pension System (NPS) framework.
• The scheme is designed to provide financial support for out-patient and in-patient medical expenses.
• The scheme will function as a sector-specific contributory pension scheme within the Multiple Scheme Framework (MSF) of NPS and will be offered to Indian citizens on a voluntary basis.
• It will be launched by Pension Funds after obtaining prior approval from PFRDA.
• As it is being implemented as a pilot project, only a restricted number of subscribers will be enrolled during the PoC phase.
• To facilitate the pilot, certain provisions of the PFRDA (Exits and Withdrawals under NPS) Regulations, 2015, have been relaxed.
• Pension Funds may also collaborate with FinTech firms and health service administrators to implement the scheme.

Key Features of the Scheme:

• Any Indian citizen is eligible to join the scheme, but a Common Scheme Account under NPS is mandatory.
• Subscribers can contribute any amount, in line with existing NPS guidelines applicable to the non-government sector.
• Subscribers aged above 40 years (excluding government sector subscribers) may transfer up to 30% of their contributions from the Common Scheme Account to the Swasthya Pension Scheme.
• Partial withdrawals are permitted for medical expenses up to 25% of the subscriber’s own contributions, with no limit on the number of withdrawals, subject to a minimum accumulated corpus of ₹50,000.
• In cases of critical inpatient treatment, where medical expenses exceed 70% of the available corpus, subscribers may opt for 100% premature withdrawal solely to meet such medical costs.

Claim Settlement and Safeguards:

• Amounts withdrawn under the scheme will be paid directly to the Health Benefit Administrator (HBA), Third Party Administrator (TPA), or hospital, based on valid claims and supporting bills.
• Any surplus remaining after settlement of medical expenses will be transferred back to the subscriber’s Common Scheme Account.

About Vishwamitri River:

• It is a small non-perennial river located in Gujarat.
• It drains into the Arabian Sea via the Gulf of Khambhat.
• The highly meandering, sinuous river has a unique ecosystem bearing a plethora of beautiful ravines right from its beginning till its end.
• Porcupines, the common Indian civet, the jungle cat, cobras, pythons, the checkered keelback, and the Bengal monitor are some of the species found in the ravines on the banks of this river.
• Vishwamitri is also where the protected and vulnerable species of the Indian crocodile (Crocodylus palustris), also known as the mugger, resides.

Key Facts about Mugger Crocodiles:

• It is one of the 24 extant species of crocodilians found globally.
• The crocodile’s common name comes from magar, which translates loosely to “water monster” in the Hindi and Urdu languages.
• Distribution:
  • The mugger’s geographic range extends from extreme southeastern Iran eastward to Bangladesh and from Nepal and northern India south to Sri Lanka.
  • In India its largest populations are found in the middle Ganges (Bihar-Jharkhand) and Chambal (Madhya Pradesh, Gujarat and Rajasthan) basins.
• Habitat:
  • It is most commonly found in freshwater environments such as rivers, lakes, hill streams, and village ponds.
  • It can live in fresh water and coastal saltwater lagoons.
  • This species makes burrows on land in a wide variety of habitats.
• Conservation Status:
  • IUCN Red List: Vulnerable

About Tehri Lake:

• It is an artificial dam reservoir located in the Tehri Garhwal town of Uttarakhand.
• It came into existence during the construction of Tehri Dam when the water from the Bhagirathi River was diverted to fill the dam reservoir.

Key Facts about Tehri Dam:

• It is a multipurpose dam built on the Bhagirathi River (one of the source streams of the Ganges River) in the Garhwal district of Uttarakhand.
• It is one of the tallest dams in the world and the tallest dam in India.
• Its primary purpose is to generate hydroelectricity.

About Kyasanur Forest Disease (KFD):

• It is a tick-borne viral haemorrhagic disease mostly found in southern India.
• The disease was first reported from the Kyasanur Forest of Karnataka in India in 1957; hence, it is known as KFD.
• The causal agent, KFD Virus (family Flaviviridae, genus Flavivirus), is a member of the tick-borne encephalitis (TBE) complex.
• It is also known as “monkey disease/monkey fever” because of its association with monkey deaths.
• Transmission:
  • Hard ticks (Hemaphysalis spinigera) spread the KFD virus to people and to animals, like monkeys and rodents.
  • Transmission to humans may occur after a tick bite or contact with an infected animal, most importantly a sick or recently dead monkey.
  • KFD does not spread between people.
• Symptoms:
  • Sudden onset of high-grade fever, prostration, nausea, vomiting, diarrhea, and occasionally neurological and haemorrhagic manifestations.
• Treatment:
  • There is no cure for KFD.
  • Supportive care is crucial, including fluid balance, providing oxygen, managing blood pressure, and treating additional infections.
• Vaccine: A vaccine for KFD is available and recommended in the parts of India where KFD is found.

About Pechora Missile System:

• The Pechora, officially known as the S-125 Neva/Pechora, is a Soviet-origin, medium-range surface-to-air missile (SAM) system designed to intercept low- to medium-altitude targets.
• Features:
  • The system consists of a radar-guided missile launcher and a fire control unit, typically employing the V-600 missile.
  • It uses the 4R90 Yatagan radar, equipped with five parabolic antennas, to detect, track, and lock onto targets.
  • It is particularly effective against slow-moving or low-flying targets, making it well-suited for countering drones and cruise missiles.
  • It can operate independently or as part of a larger, integrated air defence network, and is capable of functioning even in environments with heavy electronic jamming.
  • Range: The Pechora system has an operational firing range of up to 30–35.4 km.
  • Altitude: It can engage targets flying at altitudes from as low as 20 meters up to 20–25 km, making it versatile for both low and medium-altitude threats.
  • Detection: The system’s radar can detect targets up to 100 km away, providing early warning and engagement capability.