Content
Industrial growth jumps to four-month high of 3.5%
Lost villages and other costs of coalfields
Should States be compensated for revenue loss from GST reforms?
Which sectors are worst hit by tariffs?
School enrolment in 3-11 age group down by 25 lakh: UDISE+
Centering elderly women: caring for the quiet majority
Industrial growth jumps to four-month high of 3.5%
Understanding the Index of Industrial Production (IIP)
Definition: IIP measures the volume of production of different industry groups (manufacturing, mining, electricity).
Base year: 2011–12.
Weightage:
Manufacturing: ~77%
Mining: ~14%
Electricity: ~8%
Importance:
Monthly indicator of industrial health.
Proxy for economic activity and GDP (particularly industry sector).
Guides policy interventions in demand, supply, and infrastructure.
Relevance : GS 3(Indian Economy)
Key Data: July 2025
Overall industrial growth:
3.5% (July 2025) – four-month high.
Lower than 5% (July 2024) → deceleration YoY.
Sectoral performance:
Manufacturing: +5.4% (six-month high), up from 4.7% in July 2024.
Electricity: +0.6% (weak growth vs double-digit levels last year).
Mining: -7.2% (fourth straight month of contraction).
Use-based classification:
Capital goods: +5% → investment revival.
Consumer durables: +7.7% (seven-month high).
Consumer non-durables: +0.5% (eight-month high, but very low absolute growth).
Basic metals, fabricated metals, electrical machinery: strong double-digit growth.
Non-metallic minerals: +9.5% → infra and construction push.
Why Growth Picked Up in July 2025
Manufacturing rebound:
Recovery after two months of contraction.
Driven by investment demand (metals, machinery).
Consumer durables revival shows festive/pre-festive demand pickup.
Electricity slowdown:
Monsoon impact → lower power demand from irrigation.
High base effect (double-digit growth in 2024).
Mining contraction:
Seasonal monsoon disruption in coal, iron ore, limestone.
Subdued global commodity demand, especially in China.
Regulatory and environmental bottlenecks.
Consumer goods mixed trend:
Durables (+7.7%) → white goods, electronics, appliances supported by urban demand and credit growth.
Non-durables (+0.5%) → rural demand still sluggish due to erratic monsoon, food inflation pressures.
Structural Takeaways
Investment revival signals: Capital goods + basic/intermediate goods expansion → infra + capex cycle strengthening.
Rural–urban divergence: Strong urban discretionary demand, weak rural essentials.
Policy sensitivity: RBI likely to watch rural weakness + commodity volatility for growth–inflation trade-off.
Mining as a drag: Persistent contraction risks supply-side constraints for core industries (steel, cement, power).
Base effect reality: Lower growth vs July 2024 highlights statistical distortion – economy grew on a high base last year.
Implications
For GDP growth (Q2 FY26):
Industrial sector contribution may be moderate due to mining weakness + slower electricity.
Manufacturing strength prevents sharp slowdown.
For government policy:
Need for rural demand stimulus (via MSP, rural jobs, credit).
Mining reforms (ease clearances, monsoon-resilient infra).
Support electricity diversification (RE integration, industrial demand).
For markets & industry:
Metals, machinery, and consumer durables show strong prospects.
FMCG (non-durables) growth remains tepid, rural stress may weigh on stock performance.
Lost villages and other costs of coalfields
Coal Mining and Displacement in India
Coal in India:
India has 389.42 billion tonnes of estimated reserves (2024).
Odisha is the largest coal reserve holder: 99.2 billion tonnes (25.5% of India).
Coal still supplies ~45.65% of India’s electricity capacity (June 2025).
Talcher Coalfields (Angul, Odisha):
Largest in India.
Angul spans 6.3 lakh hectares, with 32% cultivable land, 43% forests, and 12.26% coal-bearing areas.
66 coal blocks identified; 12 operational, 2 about to start.
If all blocks become active → 348 villages to be displaced.
Displacement in Odisha:
5,923 families displaced in past 5 years (2019–24), mainly from Angul.
Angul accounts for 48% of Odisha’s coal production (269.71 MT in 2024).
Relevance : GS 3(Environment and Ecology)
Human Cost of Displacement
Loss of community & cultural identity:
Example: Antaryami Pradhan had to travel 10 km for his brother’s cremation as new village denied him land.
Villagers scattered → weakened social cohesion.
Disruption of livelihoods:
Farmers, cattle rearers, milkmen lose land & traditional professions.
Rehabilitation colonies often lack open space for farming.
Psychological & social alienation:
New villagers don’t accept displaced families socially.
Migrants often feel like outsiders even in new houses.
Gendered impacts:
Pregnant/lactating women lose access to health workers and schemes post-relocation.
Women bear additional burden of household and social adjustment.
Compensation & Rehabilitation Issues
Compensation discrepancies:
Example:
SCCL (Telangana) offers ₹70 lakh/acre.
Gopiballavpur villagers offered only ₹11 lakh/acre.
Within Angul, land valuation varies drastically between adjacent villages (e.g., ₹35 lakh vs ₹17 lakh per acre).
R&R (Rehabilitation & Resettlement) packages:
Options include:
₹35 lakh (cash in lieu of employment + self-relocation).
₹31 lakh + land at R&R colony.
Issues:
R&R colonies often delayed or on disputed land (e.g., forest land challenged at NGT).
Many forced to rent or return to old villages.
Failure in implementation:
Law requires resettlement colonies before displacement → often violated.
Welfare schemes (health, nutrition, education) do not transfer automatically post-relocation.
Larger Structural Concerns
Fragmented governance:
No centralised displacement database in Angul.
Land acquisition handled piecemeal → policies differ across projects.
Legal & policy shifts:
2014: SC cancelled 204 coal block allocations (including 8 in Angul).
2015: Coal Mines (Special Provisions) Act allowed auctions.
2020: Commercial coal mining introduced → private & foreign players entered.
Outcome → increased pace of land acquisition & displacement.
Energy paradox:
India pushes renewables but still heavily dependent on coal.
Angul remains at the epicenter of India’s coal–development trade-off.
Socio-Economic & Environmental Impact
Economic paradox:
Some families receive life-changing sums but cannot buy equivalent land in towns.
Compensation often erodes quickly without sustainable livelihood alternatives.
Environmental stress:
Villages, forests, agricultural lands consumed by expanding open-cast mines.
Ecological degradation (loss of forest cover, dust pollution, groundwater depletion).
Education disruption:
Schools demolished → children’s education interrupted.
Families caught in limbo delay investments in education due to uncertain future.
Rural–urban shift stress:
Villagers struggle to adapt to urban costs & lifestyles.
Loss of access to affordable vegetables, community services, and collective rural economy.
Implications
For displaced communities:
Identity erosion, livelihood collapse, weak social absorption → long-term vulnerability.
Inter-generational impact as children lose educational continuity and cultural roots.
For governance & policy:
Need for uniform, transparent, and inflation-adjusted compensation.
Collective relocation models (keeping villages intact) rather than atomised dispersal.
Transfer of welfare entitlements (PDS, Anganwadi, health services) to new sites.
Centralised displacement tracking & accountability mechanism.
For India’s energy policy:
Rising dependence on Odisha coalfields → concentrated risk.
Balancing energy security vs social justice vs environmental sustainability will be a defining challenge.
Transition to renewables must consider a “just transition” framework for coal-dependent regions.
Should States be compensated for revenue loss from GST reforms?
Basics of GST
GST launched: July 1, 2017, as a destination-based, indirect tax subsuming central (excise, service tax, CST) and state taxes (VAT, entry tax, octroi).
Current structure: Multiple slabs (0%, 5%, 12%, 18%, 28%) + special rates (gold, precious stones) + cess (luxury/sin goods).
Revenue sharing: GST collected is split between Centre and States (CGST + SGST; IGST for inter-state).
Compensation principle (2017–2022): Centre guaranteed States 14% annual revenue growth, bridging losses via Compensation Cess on luxury/sin goods (cars, tobacco, aerated drinks).
Relevance : GS 3(Economy – Taxation)
Proposed Reform
Move from 4–5 slab system → 2-tier (5% & 18%), with essentials exempt or 0% rated.
Higher tax (40%) to continue on luxury/sin goods.
Target average GST rate: reduce from ~11.5% (current) to ~10%.
Objective:
Simplification → compliance ease.
Lower rates → boost consumption, formalisation, investment.
At par with developed economies (average GST/VAT 10–12%).
Likely Revenue Impact
Short-term dip inevitable:
Estimated ₹60,000–1,00,000 crore/year loss (~0.2–0.3% of GDP).
FY2025–26: ~₹45,000 crore hit (partial year implementation).
Medium/long term gains:
Wider tax base: More consumption under formal economy.
Leakage reduction: Simplified slabs reduce classification disputes.
Demand boost: Lower rates on consumer durables/essentials → higher sales volume → more GST.
Luxury/sin cess: Higher rates (40%) to partly offset revenue fall.
Impact on States
Unequal effect across States:
Manufacturing/urban States (Maharashtra, Karnataka, Tamil Nadu): Larger revenue hit as bulk of GST collections come from industrial goods and services.
Agrarian/consumption-heavy States (Bihar, UP, NE States): Smaller impact since their GST base is narrower and skewed towards essentials (already exempt/low slab).
Past experience: July 2018 GST cuts → Maharashtra/Karnataka collections dipped 3–4%, but NE states unaffected.
Revenue distribution remains unequal: Richer States lose more; poorer States less affected.
Compensation Question
Legal status: 5-year compensation period (2017–2022) ended; technically Centre has no liability now.
Arguments against further compensation:
Perpetual transfers unsustainable.
States should expand their tax base, plug leakages, attract investment.
Alternative: allocate funds for infrastructure or contingency, not continuous GST gap-filling.
Arguments for compensation:
Asymmetry in GST revenue distribution → small states structurally disadvantaged.
Global precedent: Countries like Australia/Canada initially provided both GST-linked compensation + consolidated fund support.
Equity demands special packages for less industrialised states.
Possible middle ground:
Create Contingency/Equalisation Fund from part of GST or Consolidated Fund of India.
Use mechanism like Kerala Flood Cess for State-specific needs.
Time-bound compensation, not indefinite.
Political & Institutional Dimensions
GST Council: Consensus-based so far (except ~2 votes). Likely to approve reform since announced by PM.
Potential friction: Product classification disputes (whether certain goods fall in 5% or 18%), timing of implementation, and transitional compensation.
Consensus outlook: Strong — reforms likely passed in next Council meeting (may require vote, but government has majority).
Macro Implications
Average GST rate falls to ~10% → competitive with OECD economies.
Ease of doing business improves: Simple two-rate GST system boosts investor confidence.
Formalisation accelerates: lower rates + better compliance → more firms enter GST net.
Revenue trajectory: Dip in Year 1–2, stabilisation by Year 3, higher buoyancy thereafter.
State fiscal independence: Pushes states to strengthen own tax (property tax, excise, stamp duty) rather than rely on GST transfers.
Summary Judgment:
Reform = Simplification + Ease of doing business + Long-term revenue buoyancy.
Short-term revenue dip of ₹45,000–1,00,000 crore inevitable, disproportionately hitting industrialised states.
Compensation debate: Centre unlikely to extend blanket GST compensation; instead, targeted equalisation fund or special packages may balance inequities.
Net effect = Moderate tax regime (~10% avg), stronger compliance, higher consumption, improved investor sentiment.
Which sectors are worst hit by tariffs?
Basics of the Tariffs
Effective date: August 27, 2025.
Tariff level: Flat 50% additional tariff on imports from India (over existing tariffs).
Coverage: Broad, covering labour-intensive and manufacturing sectors where U.S. is a major export destination.
Earlier tariff structure: Most sectors faced 0–10% tariffs; now in many cases, effective duties are 50–60%.
Metrics of severity (impact analysis):
Export value to U.S. (absolute terms).
Share of U.S. in India’s total exports of that product.
Final tariff rate post-hike.
Relevance : GS 3(Economy – Tariff)
Sectors Facing Severe Impact
(a) Shrimp
Exports to U.S.: $2.4 billion (2024–25).
Share: 32.4% of India’s total shrimp exports.
Tariff jump: 10% → 60%.
Immediate impact:
Sharp fall in demand from U.S. buyers.
Reports of exporters in Andhra Pradesh lowering purchase prices.
Cancelled contracts and shipment delays.
High risk for aquaculture farmers and coastal labour.
(b) Textiles & Apparel (Tiruppur cluster etc.)
Exports to U.S.: $2.7 billion.
Share: 13.2% of India’s total textile exports.
Tariff jump: 4% → 54%.
Immediate impact:
Exporters rushing existing shipments before duties bite.
U.S. buyers cancelling fresh orders.
Threat to jobs in Tiruppur, Surat, Panipat (labour-intensive hubs).
(c) Jewellery, Diamonds & Carpets
U.S. a top market for India’s gems & jewellery (~$10–12 billion annually, though not all under 50% tariff).
Impact:
High-value exports like cut diamonds and studded jewellery hit severely.
Surat, Jaipur clusters face job & liquidity pressures.
Reports of production cuts and downsizing.
Sectors Facing Moderate Impact
(a) Metals (Steel, Aluminium, Copper)
Exports to U.S.: $4.7 billion (17% of total Indian metal exports).
Impact:
U.S. not largest global market, but vital for SMEs in Delhi-NCR engineering belt and eastern foundry hubs.
Stainless steel, aluminium casting, and copper semi-finished goods face job disruptions.
(b) Machinery & Mechanical Appliances
Exports to U.S.: $6.7 billion (20% of India’s total in this category).
Impact:
Demand drop expected, but diversified global buyers soften the blow.
Still critical for SMEs dependent on U.S. orders.
(c) Organic Chemicals
Medium exposure to U.S.
Tariff impact is cushioned by wider markets in EU, Japan, ASEAN.
Industry body CHEMEXCIL has sought government intervention.
Immediate Economic Impact
Severe demand shock: shrimp, textiles, jewellery already seeing cancellations.
Price crash: Shrimp prices falling in Andhra Pradesh procurement markets.
Employment risk: Labour-intensive sectors (textiles, gems, aquaculture) at risk of layoffs.
Exporters’ reaction: Pre-shipment rush, appeals to government, lobbying through industry bodies.
Government Response (Short-term)
“Swadeshi” & “Vocal for Local” narrative: Reduce export dependency; boost domestic demand.
Multi-ministry plan under consideration (Commerce, Finance, External Affairs, MSME):
Possible interest subvention / credit support for exporters.
Export incentive packages for worst-hit sectors.
Marketing support to explore alternative destinations.
RBI readiness: Governor stated RBI will provide liquidity or credit easing to impacted sectors.
Medium to Long-term Strategy
Diversification of export markets:
Leverage FTAs (UAE, Australia, EU in progress).
Push into Africa, ASEAN, Latin America.
Strengthening domestic value chains: Reduce reliance on U.S. orders.
Special packages/funds: For sectors with high labour absorption (textiles, gems, marine exports).
Negotiation channels: Possible WTO consultations or bilateral trade talks with U.S.
International Parallels
Similar protective tariffs by U.S. in past (e.g., Trump-era steel tariffs, China tariffs) caused:
Short-term export pain.
Trade diversion to alternate markets.
Other countries responded with compensation packages for farmers/exporters or by negotiating bilateral deals.
Summary
High-impact sectors: Shrimp, textiles, jewellery/carpets (tariffs up to 60%, immediate order cancellations, production/job cuts).
Moderate-impact sectors: Metals, machinery, organic chemicals (tariffs 50%, but diversified export base reduces damage).
Government response: Short-term relief plan + credit support + long-term diversification strategy.
Outlook: Immediate pain in labour-heavy sectors, with medium-term adjustment possible if markets diversify and domestic demand strengthens.
School enrolment in 3-11 age group down by 25 lakh: UDISE+
Basics: What is UDISE+?
Unified District Information System for Education Plus (UDISE+): Annual survey by the Ministry of Education.
Covers pre-primary to Class 12 in govt., aided, private, and other schools.
Provides data on enrolment, dropouts, Gross Enrolment Ratio (GER), infrastructure, teachers, etc.
Latest data: 2024-25, compared to 2023-24.
Relevance : GS 2(Education , Social Issues)
Key Findings of UDISE+ 2024-25
Sharp fall in young student enrolment (ages 3–11; Anganwadi, pre-school, Classes 1–5):
2023-24: 12.09 crore
2024-25: 11.84 crore
Decline: 24.93 lakh students
Overall enrolment (Classes 1–12):
2023-24: 24.8 crore
2024-25: 24.69 crore
Drop: 11 lakh students → lowest since 2018-19.
Historical trend:
2012-13: 26.3 crore
2021-22: ~26 crore
2022-23: 25.18 crore
2023-24: 24.8 crore
2024-25: 24.69 crore
Net fall in a decade: ~1.6 crore students (~6%).
Causes of Decline in Enrolment
Demographic transition:
Falling birth rates → shrinking school-age population.
India’s TFR = 1.91 (2021) < replacement level (2.1).
Except UP, Bihar, Meghalaya, all states below replacement fertility.
Shift to standalone pre-primary private institutions → some children outside UDISE+ school count.
Methodological changes in 2022-23 and 2023-24 → not fully comparable to older datasets.
Urbanization & migration: Possible undercounting of mobile/migrant children.
Positive Indicators Amid Decline
Rising GER (Gross Enrolment Ratio):
Middle level: 89.5% → 90.3% (2023-24 to 2024-25).
Secondary level: 66.5% → 68.5%.
Suggests higher share of eligible children are actually enrolled, even if population base shrinks.
Dropout rates improving:
Preparatory stage: 3.7% → 2.3%.
Middle school: 5.2% → 3.5%.
Secondary: 10.9% → 8.2%.
Indicates better retention, fewer children leaving school midway.
Higher enrolment in upper classes:
Classes 6–8: +6 lakh students (6.31 → 6.36 crore).
Classes 9–12: +8 lakh students (6.39 → 6.48 crore).
Suggests progress in transition from primary to secondary education.
Implications of the Decline
Demographic dividend challenge: Shrinking base of young students → smaller workforce in future.
Education system planning: Govt. must align teacher recruitment, infrastructure, and budgets with falling school-age population.
Policy focus shift:
From universal access → to quality of learning outcomes.
With fewer children, per-child investment can be higher.
Regional disparities: States like UP & Bihar (still high fertility) may see continued high demand for schools, while southern & western states face declining enrolment.
Long-term social impact: Lower child population → ageing society sooner, with implications for pensions, health care, and dependency ratios.
Way Forward
Use of upcoming 2026 Census: To update school-age population base and refine GER/dropout estimates.
Policy realignment:
Rationalizing school infrastructure in low-population areas.
Investing more in teacher training, digital learning, foundational literacy.
Focus on early childhood education: Integrate Anganwadis and standalone pre-schools into formal system (NEP 2020 mandate).
Address regional imbalance:
Northern states → focus on access (school availability).
Southern states → focus on retention & higher-order skills.
Centering elderly women: caring for the quiet majority
India’s Ageing Context
Demographic transition:
India is moving from a young to ageing society due to falling fertility & rising life expectancy.
India Ageing Report 2023 (IIPS + UNFPA):
By 2050, 20%+ of India’s population will be aged 60+.
This equals ~347 million elderly, compared to ~149 million in 2022.
Gendered longevity:
Women live 2.7 years longer than men on average.
Results in a feminisation of ageing (more elderly women than men).
Relevance : GS 1(Society) , GS 2(Social Issues)
Health & Longevity Gap Between Men and Women
McKinsey Health Institute:
Women spend 25% more years in poor health than men.
Much of this burden falls in later years of life.
Elderly women’s health paradox:
Longer life expectancy ≠ better quality of life.
Higher prevalence of chronic conditions, cancers, and cognitive decline.
Social Determinants of Elderly Women’s Health
Cultural & social conditioning:
Women prioritise family health > own health.
Gatekeeping of care decisions by husband/adult children.
Economic dependency:
60% of elderly women have no personal income (UNFPA 2011).
<20% women can pay their own medical bills (vs. 44% men).
Very few elderly women have health insurance.
Digital divide:
Limited access to digital health platforms & insurance enrolment.
Reduces access to information & tele-health solutions.
Education gap:
Education strongly linked to better health-seeking behaviour.
Uneducated women face poor awareness about preventive screenings & therapies.
Disease Burden Among Elderly Women
Cancer risks:
Breast cancer: Elderly women often get less aggressive treatment, lowering survival despite effectiveness of surgery/chemo.
Cervical cancer: Vaccination awareness growing in younger women, but elderly women lack access to pap smear screening.
Ovarian cancer: Most lethal gynaecological cancer; 5-year survival only 17% if diagnosed late.
Neurodegenerative diseases:
Higher vulnerability to Alzheimer’s, dementias (due to oestrogen decline, widowhood, isolation).
LASI: Women 70+ report higher cognitive impairment, but are under-diagnosed & under-treated.
Mental health:
Depression highly under-reported.
HelpAge India: Only 1 in 10 elderly women with depressive symptoms seek help.
Barriers: stigma, lack of geriatric psychiatry services, family neglect.
Positive Protective Factors
Social embeddedness:
Elderly women deeply connected to family & community networks.
Protective against loneliness & cognitive decline.
Active lifestyles:
Walking groups, yoga, hobbies (painting, music) improve physical & mental well-being.
Education advantage:
Educated women are more likely to seek outpatient care, both public & private.
Policy & Systemic Gaps
Healthcare spending bias:
Across age groups, health expenditure on men > women.
Gender-insensitive care:
Few healthcare facilities tailor care to elderly women’s needs (e.g., cancer screening, mental health).
Elderly treated as dependents:
Public discourse ignores elderly women’s agency; sees them only as caregivers or passive dependents.
Insurance gap:
Limited geriatric coverage; most elderly women lack health protection schemes.
Way Forward – Recommendations
Policy realignment:
Build gender-sensitive geriatric health systems.
NEP for ageing: integrate elderly women’s health into Ayushman Bharat & state health missions.
Preventive care expansion:
Free screening programs for cancers (cervical, breast, ovarian) & cognitive decline.
Financial inclusion:
Pensions, micro-insurance, and social security nets for widows & single elderly women.
Mental health integration:
Geriatric psychiatry, community counselling, elderly support helplines.
Digital & health literacy:
Train elderly women in basic digital health platforms.
Expand awareness on vaccinations, screening, and treatment options.
Community-driven solutions:
Promote elderly women’s groups, SHGs, walking clubs, skill-based learning for social & mental health benefits.