Why in news?

The Union Budget’s allocation of ₹20,000 crore over five years for carbon capture, utilisation and storage (CCUS) signals a major push towards cutting emissions from hard-to-abate sectors.

By backing CCUS technologies, the government aims to lower industrial carbon footprints and support India’s long-term goal of achieving net-zero emissions.

What’s in Today’s Article?

• About Carbon Capture, Utilisation and Storage (CCUS) Solutions
• Budget Push for Carbon Capture in India
• Economic Benefits of CCUS

About Carbon Capture, Utilisation and Storage (CCUS) Solutions

• Capturing carbon emissions - CCUS refers to a set of technologies that capture carbon dioxide (CO₂) released during industrial activities before it enters the atmosphere. CO₂ is the main driver of global warming and climate change.
• Storage or reuse of captured CO₂ - Once captured, CO₂ can either be stored safely underground in geological formations for long periods or utilised by converting it into useful products such as chemicals, fuels, or construction materials.
• Not a single technology - CCUS is not one technology, but a range of methods and processes aimed at preventing CO₂ emissions. Different industries use different capture, transport, storage, or utilisation techniques.
• Limited deployment so far - Although CCUS technologies have existed for decades, their use has been limited due to high costs, safety concerns, and scaling challenges. Deployment has picked up only recently.
• Global status of CCUS - Most active CCUS projects are currently in the US, Europe, and China. Even so, only about 50 million tonnes of CO₂ are captured annually—less than 0.5% of global emissions.
• Crucial for net-zero goals - With global emissions remaining high, CCUS is increasingly seen as essential. There is no credible pathway to achieving net-zero emissions by 2050 or controlling global warming without large-scale adoption of CCUS technologies.

Budget Push for Carbon Capture in India

• With emissions expected to rise in the near and medium term due to rapid industrialisation and infrastructure expansion, CCUS is crucial for India to meet its long-term net-zero by 2070 commitment.
• India’s CCUS journey so far
  • Since announcing its net-zero goal at the 2021 Glasgow climate summit, India has accelerated efforts to develop indigenous CCUS technologies tailored to domestic conditions.
  • Pilot and demonstration CCUS projects are already running in steel, cement and chemical sectors.
  • Potential large-scale capture and storage sites have been mapped, and Centres of Excellence—such as at IIT Bombay and JNCASR Bengaluru—are driving research.
  • While CCUS science is well understood, major engineering, process and material innovations are needed across capture, transport, storage and utilisation to improve efficiency, safety and affordability.
  • 
• Policy and R&D roadmap
  • In December, the Department of Science and Technology released a CCUS R&D roadmap for 2030, identifying key technology, finance and policy bottlenecks slowing adoption.
• Role of the ₹20,000 crore budget outlay
  • The five-year budget allocation aims to bridge the critical funding gap for field testing and scale-up.
  • Many CCUS solutions have proven laboratory success but require real-world deployment to reach commercial readiness.
  • The funding seeks to raise technology readiness levels so systems can capture or store 100–500 tonnes of CO₂ per day.
  • Experts expect several CCUS technologies to reach commercial deployment in India within five years.

Economic Benefits of CCUS

• Hard-to-abate industries - CCUS is crucial for sectors like steel and cement, where carbon dioxide emissions arise not just from fuel use but are an inherent part of the production process. Switching to renewable power alone cannot eliminate these emissions.
• Only viable decarbonisation route - In cement and steel, most CO₂ emissions come from chemical processes rather than energy consumption. CCUS is therefore the only practical solution to significantly reduce their carbon footprint.
• Budget focus on major emitters - The ₹20,000 crore budget allocation is aimed at end-use CCUS applications in power, steel, cement, refineries and chemicals—industries that together account for the bulk of India’s CO₂ emissions.
• Boosting export competitiveness - Indian exporters in these sectors face carbon-related trade barriers such as the EU’s Carbon Border Adjustment Mechanism (CBAM). CCUS adoption can help lower embedded emissions, making Indian products more competitive in global markets.

Why in news?

In a significant hearing, the Supreme Court of India sharply questioned the data practices of Meta, the parent company of WhatsApp, suggesting that the extraction of user data may resemble “theft” rather than voluntary exchange.

A three-judge Bench observed that in markets dominated by a few digital platforms, user consent may be illusory, as individuals have little real choice but to accept data-sharing terms. The court indicated that market dominance can convert consent into coercion, raising concerns that go beyond privacy to challenge the very economic foundations of data-driven business models.

The observations signal a possible judicial rethink on how consent, competition, and data ownership are understood in India’s rapidly expanding digital ecosystem, with far-reaching implications for Big Tech regulation in the world’s largest internet market.

What’s in Today’s Article?

• Meta–WhatsApp Regulatory Friction
• Why Meta Took the Dispute to the Supreme Court
• What Happens Next?

Meta–WhatsApp Regulatory Friction

• The dispute began in 2021, when WhatsApp introduced a “take-it-or-leave-it” privacy policy update.
• The revised policy enabled greater data sharing between WhatsApp and its parent company, Meta.
• Although WhatsApp maintained that end-to-end encryption continued to protect message content, regulators flagged concerns over the use of metadata for advertising and business profiling.
• Competition Commission of India’s Intervention
  • The Competition Commission of India (CCI) viewed the update as an abuse of dominant market position.
  • Key observations included:
    • For most Indian users, opting out of WhatsApp is not a realistic choice
    • WhatsApp functions as India’s “digital town square”, making consent effectively coerced
  • Penalty imposed: ₹213.14 crore (≈ $25 million) on Meta
  • While financially modest for a trillion-dollar firm, it marked a strong regulatory signal.
  • Meta challenged the CCI order before the National Company Law Appellate Tribunal (NCLAT).
• NCLAT’s Nuanced Verdict
  • The NCLAT delivered a split decision:
    • Upheld the CCI’s finding that Meta had abused its dominant position
    • Retained the monetary penalty
    • Set aside a critical CCI directive that would have barred Meta from sharing WhatsApp user data with its other entities for five years for advertising purposes
  • The NCLAT’s reasoning rested on:
    • A traditional view of corporate integration, treating data-sharing between parent and subsidiary as a common digital-age practice
    • Concern that a five-year moratorium would be a disproportionate “structural remedy”, potentially disrupting Meta’s platform synergies
    • Preference to let privacy-specific legislation, rather than competition law, govern data flows
• With the Digital Personal Data Protection Act, 2023 on the horizon, the tribunal appeared inclined to defer finer questions of consent and data use to the emerging data protection regime.

Why Meta Took the Dispute to the Supreme Court?

• Dissatisfied with both the financial penalty and the reasoning adopted by the NCLAT, Meta appealed to the Supreme Court of India.
• Meta sought relief from what it viewed as excessive regulatory interference in its data-sharing practices and business model.
• Supreme Court’s Hard Line on Market Dominance
  • The apex court showed little inclination to dilute scrutiny.
  • Chief Justice remarked that opting out of WhatsApp in India is akin to “opting out of the country”, underlining the network effects that lock users into dominant digital platforms.
  • This observation reinforced the idea that user consent in monopolistic markets may be illusory.
• Shift from Privacy to Economic Value of Data
  • A more far-reaching argument came from Justice Joymalya Bagchi, who reframed the debate beyond privacy to the economic value of personal data.
  • India’s Digital Personal Data Protection Act, 2023 primarily safeguards informational privacy
  • However, the law is largely silent on “rent-sharing”—who benefits economically when platforms monetise user data
  • Justice Bagchi questioned: if behavioural data of Indian users fuels targeted advertising, who owns the profits generated from that data?
• Towards a ‘Data-as-Property’ Approach
  • The court’s reasoning hinted at a data-as-property framework, aligning India closer to the Digital Services Act of the European Union, rather than the more laissez-faire approach associated with the United States.
  • By impleading the Ministry of Electronics and Information Technology (MeitY), the court compelled the government to reflect on a deeper policy question:
    • Is privacy protection alone sufficient, or
    • Does the economic value of citizens’ digital footprints warrant a new form of sovereign and regulatory protection?

What Happens Next?

• Court’s Growing Discomfort with the ‘Free Internet’ Model - The remark that users are “not only consumers, but also products” captures the court’s unease with digital business models built on harvesting personal data. Targeted ads following private conversations are seen as intrusions, not innovation.
• Transparency vs Real Understanding - The court signalled that formal consent does not equal informed consent in a country with uneven digital literacy.
• Ultimatum to Meta - The court has issued a clear warning: Meta must give an undertaking to stop sharing personal data, or risk dismissal of its case and the imposition of “very strict conditions”.
• Message from the Judiciary - The judiciary’s stance is unmistakable—Indian users are no longer passive data sources. The long-tolerated model of invisible data extraction may be nearing its end.

Context

• India’s recent trade agreement with the United States represents a defining moment in the country’s evolving global trade strategy.
• Positioned within a broader architecture of strategic trade partnerships, the agreement reflects India’s shift toward predictable, rules-based, and large-scale trade engagement.
• More than a reduction in tariffs, the deal signals India’s growing confidence as a global economic actor and underscores the deepening strategic alignment between the world’s two largest democracies. 

The Road to Agreement on India-US Deal and India’s Expanding Network of Trade Partnerships

• The Road to Agreement: Negotiation, Diplomacy and Policy Certainty
  • The India-U.S. trade deal emerged from nearly a year of sustained dialogue, technical negotiations, and quiet diplomacy.
  • The complexity of the process highlights the sensitivity of bilateral trade relations and the significance of the outcome.
  • The agreement to reduce U.S. tariffs on Indian goods to 18% marks a critical departure from previously elevated tariff levels that had reached up to 50%.
  • This shift restores competitiveness for Indian exporters, enhances policy predictability, and reflects the effectiveness and resilience of India’s negotiating approach.
• India’s Expanding Network of Trade Partnerships
  • The agreement with the United States must be viewed as part of India’s broader strategy of forging comprehensive trade partnerships across regions.
  • Trade agreements with the European Union, the United Kingdom, and the European Free Trade Association provide India with preferential access to European markets, while agreements with Australia and New Zealand strengthen its engagement with the Pacific region.
  • Similarly, trade arrangements with the United Arab Emirates and Oman enhance access to West Asia.
  • Within this expanding network, the United States holds particular importance as the world’s largest import market and India’s single largest export destination, accounting for nearly one-fifth of India’s total exports.

Immediate Gains from US-India Trade Deal

• Sectoral Impact: Boosting Employment-Intensive Exports
  • The most immediate gains from the tariff reduction are expected in employment-intensive export sectors.
  • Apparel, a major contributor to industrial employment, stands to benefit significantly as Indian products now face lower tariffs than those of key competitors such as Vietnam and Bangladesh in the U.S. market.
  • Other sectors, including gems and jewellery, marine products, processed foods, footwear, and leather, also gain from improved price competitiveness.
  • Even modest tariff reductions in these industries translate into meaningful cost advantages, encouraging capacity expansion and deeper integration into global supply chains.
• Enhancing Global Competitiveness and Manufacturing Ambitions
  • By lowering U.S. tariffs on Indian goods, the agreement strengthens India’s competitive position relative to major exporting economies such as China, Bangladesh, Sri Lanka, Brazil, South Africa, Pakistan, and ASEAN countries.
  • This enhanced competitiveness directly supports India’s long-term objective of becoming a global manufacturing hub.
  • Improved market access, combined with greater policy certainty, creates conditions conducive to investment, scale, and productivity growth across export-oriented industries.
• Beyond Trade: Strategic and Institutional Implications
  • The agreement’s significance extends beyond immediate economic benefits.
  • Reduced trade frictions create momentum for advancing negotiations under the proposed India-U.S. Bilateral Trade Agreement, opening avenues for deeper cooperation in regulatory alignment, market access, and supply-chain resilience.
  • The deal also encourages joint ventures, technology partnerships, and investment in high-value sectors, creating innovation, skill development, and employment generation.
  • These outcomes reinforce mutual interests in strengthening trusted supply chains and advancing innovation-led growth.

Trade, Trust and Strategic Alignment

• From a strategic perspective, the trade deal contributes to a broader reset in India-U.S. relations grounded in trust and shared priorities.
• Stronger economic ties complement cooperation in strategic forums such as the Quad, where supply-chain resilience and reliable partnerships are key objectives.
• By aligning economic engagement with strategic cooperation, the agreement reinforces a stable and forward-looking bilateral relationship.

Conclusion

• The India-U.S. trade agreement is not merely a technical adjustment of tariff rates; it represents a strategic consolidation of economic and diplomatic ties.
• By enhancing export competitiveness, supporting employment-intensive sectors, and reinforcing India’s global trade integration, the deal lays the foundation for sustained bilateral growth.
• As policy momentum now shifts toward implementation, the focus turns to industry to leverage these opportunities through investment, innovation, and scale.
• Ultimately, the agreement marks a renewed, balanced, and strategic partnership poised to shape India-U.S. cooperation in the decades ahead.

Context

• The Union Budget 2026–27 is framed as a critical step in India’s journey towards Viksit Bharat by 2047.
• It prioritises advanced technology sectors such as artificial intelligence, biopharma, semiconductors and critical minerals, reflecting long-term development ambitions.
• While the strategic direction is appropriate, the success of these initiatives depends on effective implementation, adequate fiscal space and the pace at which outcomes can be delivered in a resource-constrained environment. 

Key Highlights of Union Budget 2026-27

• Restructuring of Expenditure and Changing Fiscal Priorities
  • A key feature of recent fiscal policy has been the restructuring of government expenditure to accommodate new priorities.
  • The share of revenue expenditure in total expenditure has declined from 88 per cent in 2014–15 to about 77 per cent in 2026–27 (BE).
  • This reduction has been driven largely by a decline in central subsidies, allowing a corresponding increase in capital spending.
  • This shift signals a move away from consumption-oriented spending towards asset creation and long-term growth.
• Capital Expenditure: Role in Growth and Emerging Concerns
  • Public capital investment has played a crucial role in supporting economic recovery in the post-pandemic period.
  • Capital expenditure as a share of GDP has remained elevated, supporting infrastructure creation and demand.
  • However, the momentum of this spending has weakened. Capital expenditure growth declined sharply from 28.3 per cent in 2023–24 to 4.2 per cent in 2025–26 (RE).
  • Although growth is budgeted at 11.5 per cent in 2026–27 (BE), it is only marginally higher than nominal GDP growth, leaving capital expenditure nearly stagnant at around 3.1 per cent of GDP.
  • Repeated shortfalls between budgeted and actual spending raise concerns about execution capacity.
• Revenue Prospects and Tax Buoyancy Challenges
  • On the revenue side, tax projections appear cautious and achievable. However, the low buoyancy of gross tax revenues remains a constraint.
  • Overall tax buoyancy is estimated at 0.8, below the benchmark of one. While direct taxes show relatively strong responsiveness, indirect taxes lag behind. In particular, GST collections are not expected to keep pace with GDP growth.
  • With rising developmental and welfare commitments, strengthening indirect tax responsiveness becomes essential for maintaining fiscal balance.

Finance Commission Transfers and Centre–State Fiscal Relations

• The recommendations of the Sixteenth Finance Commission retain the share of States in the divisible pool of central taxes at 41 per cent.
• However, the discontinuation of revenue deficit grants and the absence of sector- or State-specific grants have reduced overall transfers.
• Finance Commission grants are projected to decline from 0.43 per cent of GDP in 2025–26 to 0.33 per cent in 2026–27.
• This reduction may constrain subnational governments at a time when their role in delivering public services and development programmes is expanding. 

Challenges and the Way Forward

• Fiscal Consolidation and the Debt–Deficit Strategy
  • The pace of fiscal consolidation has slowed considerably in recent years.
  • While the fiscal deficit to GDP ratio continues to decline, the annual reduction has narrowed to just 0.1 percentage point in 2026–27 (BE).
  • The shift in focus from deficit targeting to debt-GDP targeting does not significantly improve transparency, as both indicators are closely linked to nominal GDP growth.
  • A clear medium-term glide path outlining targets and assumptions would strengthen fiscal credibility.
• Rising Debt and Interest Payment Pressures
  • High public debt levels have increased interest payment pressures.
  • The effective interest rate on central government debt is projected to rise to 7.12 per cent in 2026–27, with interest payments absorbing nearly 40 per cent of revenue receipts.
  • This limits fiscal space for essential primary expenditure. Persistent high public borrowing also risks crowding out private investment, which could weaken medium-term growth prospects.

Conclusion

• The Budget presents a coherent roadmap for long-term development, with emphasis on technology-led growth and public investment.
• However, achieving these objectives requires careful balancing of ambition with fiscal prudence.
• Strengthening tax buoyancy, ensuring credible capital expenditure outcomes, maintaining adequate transfers to States and restoring momentum in fiscal consolidation are essential.
• Sustained economic expansion ultimately depends on macroeconomic stability and sustainability, both of which require disciplined and transparent fiscal management.

About Tender Years Doctrine:

• It is a prominent common law principle in family law and custody jurisprudence.
• It presumes that children of "tender age" (generally under 5 years) should remain with their mother unless she is proven unfit.
• The doctrine rests on several presumptions:
  • Biological Bond: Infants have a natural attachment to mothers.
  • Nurturing Instinct: Mothers are presumed better caregivers for young children.
  • Developmental Needs: Early childhood requires maternal involvement.
  • Emotional Security: Mother's presence provides psychological stability.
• Recent Delhi High Court Ruling:
  • It held that the best interests and welfare of minor children are paramount and must override the application of the Tender Years Doctrine.
  • The court also held that custody disputes must be resolved based on a comprehensive evaluation of the child’s overall well-being rather than stereotypical assumptions regarding parental roles.

About Exercise Khanjar-XIII:

• It is the 13th edition of the annual India-Kyrgyzstan Joint Special Forces Exercise.
  • The exercise has been held alternatively in India and the Kyrgyz Republic every year.
• Khanjar-XIII Location: Misamari in the Sonitpur district of Assam.
• The exercise aims to enhance interoperability between the Special Forces of both nations.
• The 2026 exercise will focus on joint operations in urban warfare and counter-terrorism scenarios under the United Nations mandate.

About Dholpur–Karauli Tiger Reserve:

• It is located in the Rajasthan.
• It shares ecological continuity with the Ranthambhore Tiger Reserve to the west and lies close to the Chambal River on the east, which serves as a natural boundary and water source for the region.
• Vegetation: The vegetation primarily consists of dry deciduous forests.
• Flora: Some of the common tree species found here include:
  • Dhok (Anogeissus pendula) – the dominant tree species across much of the reserve.
  • Khair (Acacia catechu)
  • Tendu (Diospyros melanoxylon)
  • Babool (Acacia nilotica)
• Fauna:
  • The reserve hosts tiger, leopard, sloth bear, Indian wolf, striped hyena, herbivores such as spotted deer, sambar, nilgai, chinkara, and wild boar, and small mammals including Indian hare, porcupine and jungle cat.

About Project Himank:

• It is a project of the Border Roads Organization (BRO) in the Ladakh.
• Objective: Development of road communication in the Ladakh region.
• The entire area of responsibility of the project falls in high altitude with challenging working conditions and a limited working season.
• The Project ensures the maintenance of communication and access to strategic areas close to the Line of Actual Control (LAC) with China.

Key Facts about Border Roads Organization (BRO):

• It is a road construction executive force in India that provides support to the Indian Armed Forces.
• BRO was entirely brought under the Ministry of Defence in 2015.
• It develops and maintains road networks in India’s border areas and friendly neighboring countries.
  • This includes infrastructure operations in 19 states and three union territories (including Andaman and Nicobar Islands) and neighboring countries such as Afghanistan, Bhutan, Myanmar, Tajikistan, and Sri Lanka.
  • BRO specialises in constructing and maintaining Roads, Bridges, Tunnels, Airfields and Marine Works across some of the world’s most challenging terrains.
• The BRO also has an operational role during national emergencies and the outbreak of hostilities, when it provides direct support to the Army in the maintenance of roads in the forward zones and executes other functions specified by the government.
• In order to ensure coordination and expeditious execution of projects, the Government of India set up the Border Roads Development Board (BRDB) with the Prime Minister as Chairman of the Board and the Defence Minister as Deputy Chairman.
• Motto: Shramena Sarvam Sadhyam (everything is achievable through hard work).

About Punatsangchhu-II Hydroelectric Project:

• It is a run-of-the-river hydroelectric power project.
• Location: It is located in Bhutan on the right bank of the Punatsangchhu River.
• The project is being developed under an Inter-Government Agreement (IGA) between the Royal Government of Bhutan and the Government of India.
• It is funded by the Government of India (GoI).

Key Facts about Punatsangchhu-I Hydroelectric Project:

• It is a 2GW run-of-the-river hydroelectric power project.
• Location: It is located in Bhutan on the left bank of Punatsangchhu River.
• The project is being developed by Punatsangchhu I Hydroelectric Project Authority, an entity formed under a bilateral agreement signed by the Bhutanese government and the Government of India (GoI) in 2007.
• It is funded by the Government of India (GoI).