Content

1. Unpacking the global ‘happiness’ rankings
2. Excessive dependence
3. Language of security needs upgrade, beyond OTP 

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Unpacking the global ‘happiness’ rankings

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 Why in News?

• World Happiness Report (WHR) 2025 places Finland at Rank 1 for the 8th consecutive year.
• India ranks 118 (score: 4.389/10) and averages 124 over the years.
• Pakistan ranks 109, despite economic instability and repeated IMF bailouts.
• Raises questions on the nature, validity and perception-driven basis of “happiness”.

Relevance

GS1 (Society)

• Links to social cohesion, community bonds, family structures, loneliness, and wellbeing.
• Explains shifts in Indian social capital due to urbanisation and digital lifestyles.

GS2 (Governance & Social Justice)

• Highlights governance quality, institutional trust, welfare states, corruption perception.
• Shows role of public service delivery in influencing subjective wellbeing.

Practice Question

• “India’s low ranking in global happiness indices reflects a deficit of trust, not a deficit of wellbeing.” Discuss.(250 Words)

What is the World Happiness Report?

• Published by Wellbeing Research Centre, Oxford University.
• Uses Gallup World Poll’s Cantril Ladder:
  • People rate their lives on a scale of 0 (worst) to 10 (best).
• Combines six variables:
  • GDP per capita
  • Social support
  • Healthy life expectancy
  • Freedom to make life choices
  • Generosity
  • Perception of corruption
• Strong emphasis on perceptions, not objective indicators.

Why Nordic Countries Lead Consistently ?

• High institutional trust; lost-wallet-return probability is high.
• Low corruption, strong welfare states, universal healthcare, social equality.
• High social cohesion + reliable public services → stable well-being.
• Low inequality of opportunity; egalitarian norms.
• High taxes convert into visible public goods; trust-tax feedback loop strengthens satisfaction.

Why India Scores Low Despite High Growth ?

1. Aspiration–Satisfaction Paradox

• Rising incomes → rising expectations; dissatisfaction reflects ambition, not misery.
• Democracies with vibrant media amplify public criticism → lower perceived satisfaction.
• Similar trend in the U.S., which fell to Rank 24 despite wealth.

2. Perception-Based Metrics

• Subjective impressions of freedom, corruption and trust can lower national score.
• Frequent public debates on governance, pollution, inequality → higher negative perceptions.

3. Structural Social Changes

• Shrinking joint families, urban isolation, digital addiction → weakening social capital.
• Migration and gig work reduce community bonds that earlier provided emotional buffers.

4. WEIRD Bias in Methodology

• Report reflects Western norms:
  • Individualistic societies emphasise institutional trust.
  • India’s strength—family/community trust—undervalued and unmeasured.

India’s Fluctuating Rank (2012–2025)

• Best phase (2022):
  • Post-COVID recovery, PM-GKY, welfare expansions.
• Worst phase (2012):
  • Corruption scandals, growth slowdown.
• Data shows little correlation between fiscal growth and happiness scores.

Core Issue for India: Social Trust Deficit

Institutional Trust

• Uneven governance, bureaucratic delays, service quality inconsistencies reduce trust.
• Transparent, predictable public services (ration cards, ticketing, pensions) remain patchy.

Informal Trust

• Families and villages act as safety nets.
• COVID-19 migration showed strong community cohesion.
• But these networks are invisible to global indices.

Psychological and Behavioural Overview

• Report admits: belief in community kindness predicts happiness more than income.
• Nearly 19% of young adults globally report “no one to rely on”.
• India faces similar relational deficits due to urbanisation + digital lifestyles.

Political and Methodological Concerns

• Many global indices (including WHR) criticised for transparency and Western biases.
• 2022 study (Sanjeev Sanyal & Aakanksha Arora) highlighted:
  • Reliance on small pools of Western experts.
  • Penalising democracies for openness; rewarding states with suppressed dissent.
• Happiness rankings risk mistaking conformity for contentment.

India’s Evolving Approach to Wellbeing

• Mental health becoming a governance priority.
• Initiatives:
  • Tele-MANAS (national mental health helpline).
  • Workplace wellness programmes.
  • Inclusion and emotional resilience campaigns.
• Signals shift toward human-centric development.

What India Needs to Do ?

1. Rebuild Social Capital

• Community spaces, libraries, shared meals, cultural events.
• Promote inter-generational bonding; reduce loneliness.
• Larger household size and community kindness strongly correlate with happiness.

2. Strengthen Institutional Trust

• Simplified, digital-first citizen–state interactions.
• Transparent service delivery: PDS, healthcare, railways, grievance redress.
• Consistency in rules → predictability → trust.

3. Make Mental Health an Economic Priority

• WHO: $1 investment in mental health → $4 productivity return.
• Integrate counselling in schools, workplaces and primary health centres.
• Recognise psychological wellbeing as economic infrastructure.

Conclusion

• India’s low rank reflects restlessness, not unhappiness.
• High aspirations, accountability, and demands for better services are signs of a maturing democracy.
• “Unfinished, ambitious, striving” India may appear less satisfied—but is progressing toward a deeper idea of happiness.

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Excessive dependence

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Why in News?

• India recorded a historic goods trade deficit in October 2025: $41.68 billion, rising from $32.15 billion in September.
• Triggered by U.S. tariff shock (50% levy since August) + a surge in gold and silver imports.
• Raises concerns over overdependence on the U.S. and a possible structural shift in India’s trade portfolio.

Relevance

GS2 (Governance & International Relations)

• India–U.S. trade architecture, tariff vulnerabilities, strategic balancing with Russia.
• Dependence on single markets as a structural governance challenge.

GS3 (Economy – External Sector)

• Trade deficit, BoP stress, rupee depreciation, import–export dynamics.
• Bullion imports, intermediate goods dependence, manufacturing depth issues.

Practice Question  

• “India’s October 2025 trade deficit is a warning against single-market dependence. Analyse the structural vulnerabilities it exposes.”(250 Words)

What is Goods Trade Deficit?

• Occurs when imports > exports (merchandise only; excludes services).
• Persistent deficits → pressure on forex reserves, currency depreciation, external vulnerability.
• India typically covers merchandise deficit through:
  • Strong services exports (IT, BPM).
  • Remittances.
  • Foreign capital flows.

Key Data Highlights

• Exports:
  • Fell 11.8% YoY → $34.38 bn (from $38.98 bn, Oct 2024).
• Imports:
  • Surged sharply due to bullion inflows and intermediate goods demand.
• Gold imports:
  • Nearly tripled (vs Oct 2024).
• Silver imports:
  • Rose 5x.
• Rupee:
  • Depreciated from ₹85.6/$ (April) → ₹88.4/$ (October).
• U.S. market:
  • Exports to U.S. fell 9% YoY.
  • Labour-intensive sectors worst hit.

Why the Deficit Rose So Sharply?

U.S. Tariff Shock (50% duty)

• Imposed in Aug 2025; U.S. is India’s largest single export market since 2018–19.
• Hit sectors like:
  • Engineering goods (↓16.71%)
  • RMG and apparel (↓12.88%)
  • Man-made yarn (↓11.75%)
  • Cotton yarn/handlooms (↓13.31%)

Bullion Surge as Hedge

• Gold and silver inflows indicate:
  • Hedging against global + domestic uncertainty.
  • Rupee depreciation encouraging bullion buying.
  • FPI outflow in September deepened anxiety.

Higher Use of Imported Intermediates

• Firms sourcing cheaper imported inputs to remain export-competitive.
• Points to weak domestic manufacturing depth.
• HS-wise breakdown (once released) will confirm the shift.

Impact on India–U.S. Trade Dynamics

• Heavy dependence on U.S. → amplified vulnerability.
• India shifting:
  • Russian imports ↓27.73% (oil correction, geopolitical balancing).
  • U.S. imports ↑13.89% (signalling alignment + reducing trade imbalance concerns).
• Pressure increasing for:
  • Early India–U.S. Bilateral Trade Agreement.
  • Rollback of tariffs.

Government & RBI Response

• Export Promotion Scheme: ₹25,060 crore over 6 years.
• RBI relief measures: liquidity, procedural relaxations, credit support for exporters.
• Aim: cushion tariff impact + restore competitiveness.

Is This a Structural Shift or a Temporary Shock ?

Arguments for a Temporary Shock

• U.S. tariffs are a one-off external event.
• Bullion imports may normalize once uncertainty eases.
• Re-routing exports and supply chain realignments take time; cannot be labelled structural yet.

Arguments for a Structural Shift

• India is consciously reducing Russian crude share.
• Increasing U.S. imports to stabilise strategic relations.
• Export stagnation in labour-intensive sectors indicates deeper competitiveness issues.
• Reliance on imported intermediates signals systemic domestic production gaps.

Why Heavy Dependence on the U.S. is Risky ?

• U.S. accounts for nearly 20% of India’s total exports.
• Exposure to:
  • Protectionist tariffs
  • Geopolitical pressures
  • Currency volatility
  • Supply-chain disruptions
• “Single-market reliance” = economic + diplomatic vulnerability.

Long-Term Consequences if Dependence Continues

• Persistent trade deficits.
• Employment hit in labour-heavy sectors (textiles, leather, gems).
• Rupee depreciation pressure.
• Declining manufacturing self-sufficiency.
• Reduced bargaining power in trade negotiations.

What India Must Do ?

1. Diversify Export Markets

• Target Latin America, Africa, Middle East, ASEAN+3.
• Reduce concentration risk: broaden beyond U.S. & EU.

2. Deepen Manufacturing Ecosystems

• Strengthen domestic intermediates production.
• Accelerate PLI 2.0, logistics reform, SEZ modernization.

3. Build Tariff-Resilient Sectors

• Promote advanced engineering, electronics, green tech, medical devices.
• Modernise textiles: MMF focus, technical textiles, design competitiveness.

4. Stabilise India–U.S. Trade Architecture

• Conclude bilateral trade agreement.
• Seek tariff rollbacks linked to wider strategic cooperation.

Conclusion

• The October 2025 deficit is partly a shock, partly a signal.
• The key lesson:
  India’s overdependence on the U.S. has converted a single tariff action into a national trade crisis.
• A structural shift in India’s trade portfolio—towards market diversification, domestic manufacturing depth, and balanced import sources—is not only inevitable but strategically overdue.

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Language of security needs upgrade, beyond OTP 

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Why in News?

• Article highlights the rising ineffectiveness of OTP-based authentication amid soaring digital fraud cases in India.
• Points to need for new security terminology (e.g., “FTP — Financial Transaction Password”) to reduce fraud by improving user psychology and behavioural responses.

Relevance

GS2 (Governance)

• Citizen–state digital interface; RBI/CERT-In regulations; secure digital payments.
• Trust in public digital infrastructure (UPI, Aadhaar-enabled services).

GS3 (Science & Technology – Cybersecurity)

• Digital fraud, OTP-fatigue, behavioural vulnerabilities.
• Need for human-centric security design and terminology innovation (FTP).

Practice Question

• “Technological solutions alone cannot address India’s digital fraud epidemic. Behavioural and linguistic redesign is equally critical.” Explain.(250 Words)

What Is OTP and Why It Was Created?

• OTP (One-Time Password) = temporary authentication code for online verification.
• Initially added as a second-factor security layer to reduce unauthorized access.
• Used for Aadhaar authentication, bank payments, tax filings, UPI, card-not-present transactions.

Why OTP Has Lost Psychological Meaning?

• OTP is used for almost every digital action, making people desensitised.
• Users routinely share OTPs for deliveries, subscriptions, device logins → weakens security discipline.
• Perception: OTP feels like “a simple code handed by a service provider”, not a serious safeguard.
• Fraud data:
  • 200%+ rise in digital fraud cases year-on-year.
  • ₹22,845 crore reported losses to citizens.
• Overuse = security fatigue + rising scams such as phishing, vishing, remote-access tricks.

Core Argument of the Article

1. Security Failures Are Linguistic and Behavioural, Not Just Technological

• People share OTPs not due to ignorance but due to habitual desensitisation.
• Research in behavioural economics:
  • Small linguistic modifications change user response significantly.
  • Word choice affects perception → affects caution levels.

2. Proposed Shift: Replace OTP with “FTP”

• FTP = Financial Transaction Password.
• Reserved only for actual money-transfer transactions, not for general logins, couriers, apps.
• Separates financial risk events from routine authentication.
• Raises seriousness, caution, and psychological barrier.

How FTP Improves Behavioural Security?

• Clarifies that FTP = money movement.
• Deters sharing since the term communicates risk + financial consequences.
• Makes users more alert in UPI, NEFT/IMPS, and debit-card operations.
• Similar to the way “ATM PIN” creates strong caution vs. ordinary passwords.

Why India Needs This Shift?

1. UPI Dominance
   1. 13+ billion monthly transactions.
   1. Small lapses create massive aggregate risk.
2. Widespread Digital Fraud
   1. Remote app scams
   1. Fake UPI collect pulls
   1. Phishing links
   1. Social engineering
3. High-speed digitisation demands high-speed behavioural adaptation
   1. Tech alone insufficient.
   1. Requires “language of security” to evolve.
4. Low-cost intervention
   1. Changing terminology = inexpensive but high psychological impact.

Systemic Solutions Recommended

1. Upgrade Security Terminology

• Introduce FTP for financial transactions.
• Restrict OTP to non-financial actions only.

2. Banking Interface Overhaul

• Payment apps, netbanking, UPI should:
  • Use distinct FTP screens.
  • Provide warning prompts on financial authorisations.

3. Regulators & Financial Institutions

• Conduct mass awareness campaigns.
• Promote FTP like ATM PIN standards.
• Integrate FTP into UPI 3.0 / 4.0 ecosystem as optional or mandatory.

4. Policy-Level Action

• Aligns with India’s cybersecurity strategy, CERT-In advisories, RBI’s digital payment security initiatives.
• Helps reduce losses borne by banks and insurers.

Strategic Significance

Behavioural Economics Overview

• Humans make security errors due to framing, cognition, and expectations, not only due to lack of knowledge.
• Language shifts can reduce fraud without heavy tech upgrades.

Trust & Digital Governance

• Essential for India’s aspiration of becoming a trillion-dollar digital economy.
• Enhances confidence in UPI, Aadhaar-enabled payments, and public digital infrastructure.

Broader Implications

• India’s digital expansion → high risk of cybercrime at scale.
• Without behavioural security design, technological innovation becomes counterproductive.
• FTP-like segmentation = global best practice in human-centric cybersecurity.

Prelims Pointers

• OTP = widely used authentication mechanism, vulnerable due to user habituation.
• FTP (proposed): restricted to financial transactions; improves behavioural caution.
• Major fraud losses: ₹22,845 crore reported.
• India: one of the world’s fastest digitising economies → rising digital fraud risk.