2026 for January 1970

RBI’s ‘State of the Economy’ – Growth Resilience and Emerging Global Risks

January 22, 2026

State of the Economy Latest News

The Reserve Bank of India (RBI), in its State of the Economy article, has assessed India’s macroeconomic conditions based on high-frequency indicators (for December 2025).
The assessment points towards continued growth momentum, resilient domestic demand, and optimism about future prospects, despite elevated global geopolitical and geo-economic uncertainties.
The views expressed in the article are those of the authors and not the official stance of the RBI.

Key Growth Signals - Domestic Economy

Robust demand conditions: High-frequency indicators suggest sustained buoyancy in growth impulses. Demand conditions remain upbeat, supported by consumption and economic activity.
Revival of rural demand:
- Retail automobile sales recorded broad-based growth across categories.
- Key drivers are GST rate cuts improving affordability, year-end promotional offers, and pre-buying ahead of expected price hikes in January.
Commercial activity and logistics: Retail commercial vehicle sales maintained strong growth. It indicates improved goods movement, and strong underlying economic activity.
GST and formal economy indicators: E-way bill generation continued healthy growth due to GST rate rationalisation, stock clearance, and firms pushing year-end sales.

Macro-Economic Indicators

GDP growth: (National Statistics Office’s first advance estimate)
- The real GDP growth is estimated at 7.4% in 2025-26, up from 6.5% a year ago.
Inflation trends: In December, the consumer price index (CPI) inflation rose to 1.3% driven by a lower rate of deflation in the food group along with an increase in core index.

Global Geopolitical and Geo-Economic Risks

Key developments at the start of 2026:
- US intervention in Venezuela
- Ongoing Middle East conflict
- Uncertainty over Russia–Ukraine peace deal
- Escalation of the Greenland dispute
Implications:
- Elevated geo-economic risks
- High policy uncertainty
- Potential spillover effects on trade, energy, and capital flows

Structural Reforms and Policy Environment (2025)

Major reforms highlighted:
- Rationalisation of tax structures
- Implementation of labour codes (labour market reforms)
- Financial sector deregulation
Expected outcomes:
- Improved growth prospects
- Enhanced productivity
- Strengthened medium- to long-term economic fundamentals

External Sector and Trade Strategy

Export diversification: India has made significant efforts to diversify exports (like focusing on new markets in Africa and Latin America).
Trade negotiations: Ongoing talks with 14 countries/groups, covering nearly 50 nations, including European Union (EU), Gulf Cooperation Council (GCC), United States.

Challenges and Way Ahead

Persisting global geopolitical instability: Strengthen domestic demand while boosting export competitiveness.
Risk of imported inflation: Tackling imported inflation by a mix of monetary (interest rate cuts), fiscal (reducing import duties) and trade policies (boosting domestic supply chains).
Balancing growth and inflation management: Maintain a balanced policy approach between innovation vs. stability, and growth vs. consumer protection.
Ensuring inclusive and sustainable growth: Deepen structural reforms to enhance productivity and resilience.
Managing policy uncertainty: Continue prudent regulation and supervision.

Conclusion

The RBI’s State of the Economy assessment underlines the resilience of the Indian economy, supported by strong domestic demand, improving rural consumption, robust GST indicators, and sustained reform momentum.
While global uncertainties remain elevated, India’s macroeconomic fundamentals and reform-oriented policy framework provide credible grounds for optimism, positioning the economy for stronger and more stable long-term growth.

Source: IE

State of the Economy FAQs

Q1: How do high-frequency indicators reflect the current growth momentum of the Indian economy?

Ans: Indicators such as automobile sales, e-way bill generation, and commercial vehicle sales indicate sustained demand, robust economic activity.

Q2: What factors contributed to the revival of rural demand as highlighted by the RBI?

Ans: Rural demand revival was driven by enhanced affordability due to GST rate cuts, year-end discounts, etc.

Q3: Despite global uncertainties, why does the RBI express optimism about India’s growth prospects?

Ans: This is due to strong domestic demand, resilient macroeconomic fundamentals, and ongoing structural reforms.

Q4: What is the role of structural reforms undertaken in 2025 in strengthening India’s long-term growth?

Ans: Reforms such as tax rationalisation, labour code implementation, are expected to enhance productivity, formalisation, and investment-led growth.

Q5: How does India’s trade strategy contribute to economic resilience amid geo-economic uncertainties?

Ans: Export diversification and trade negotiations with the EU, GCC, and the US help reduce external vulnerability and strengthen economic resilience.

Judiciary on Prior Sanction for Corruption Probe – Explained

January 22, 2026

Corruption Probe Latest News

The Supreme Court has delivered a split verdict on the constitutional validity of Section 17A of the Prevention of Corruption Act, 1988, which mandates prior government approval before investigating certain corruption allegations against public servants.

Background of the Prevention of Corruption Act, 1988

The Prevention of Corruption Act, 1988 (PCA) is India’s primary anti-corruption legislation dealing with offences committed by public servants in the discharge of official duties.
The Act traces its origin to the recommendations of the Santhanam Committee (1962-64), which highlighted the need for a strong legal framework to curb corruption in public life.
The PCA consolidated existing laws and introduced penal provisions covering bribery, criminal misconduct, and abuse of official position.
Under the Act, a “public servant” is defined broadly to include government employees, judges, and individuals entrusted with public duties.
Over time, judicial scrutiny and legislative amendments have shaped the balance between protecting honest officials and ensuring accountability for corrupt practices.

Section 17A and Its Legislative Intent

Section 17A was introduced through the 2018 amendment to the PCA.
It mandates that prior approval of the appropriate government is required before initiating any inquiry or investigation against a public servant for decisions or recommendations made while discharging official functions.
The legislative rationale behind Section 17A was to address concerns that honest officers were becoming risk-averse due to fear of frivolous or malicious investigations.
Policymakers argued that excessive scrutiny could lead to a “policy paralysis” where officials avoid taking bold or time-sensitive decisions, particularly in areas involving economic or administrative discretion.
It is important to note that the PCA already contains Section 19, which requires prior sanction before a court can take cognisance of corruption offences.
Section 17A extends this protection to the pre-investigation stage.

Judicial Precedents on Prior Sanction

The Supreme Court has historically been cautious about executive controls over corruption investigations.
In Vineet Narain vs Union of India (1998), the Court struck down the “Single Directive,” which required prior government approval before investigating senior officials.
Similarly, in Subramanian Swamy vs Director, CBI (2014), Section 6A of the Delhi Special Police Establishment Act, requiring prior approval to investigate senior officers, was declared unconstitutional for violating Article 14 (equality before law).
These rulings established that differential treatment based on rank or position in corruption investigations undermines the principle of equal accountability under law.

Supreme Court’s Split Verdict on Section 17A

A two-judge Bench of the Supreme Court delivered a split verdict while examining the constitutional validity of Section 17A.
One judge upheld the provision, reasoning that prior approval is necessary to protect honest officers from harassment and to prevent a “play-it-safe” bureaucratic culture.
However, this view came with a significant caveat: the approval mechanism should involve an independent body, such as the Lokpal or Lokayukta, rather than being controlled solely by the executive.
The other judge struck down Section 17A as unconstitutional, describing it as a reintroduction of previously invalidated safeguards in a new form.
The judgment held that Section 17A fails the test of reasonable classification under Article 14 and that sufficient protection already exists under Section 19 of the PCA at the prosecution stage.
As a result of the split verdict, the matter has been referred to a larger Bench of the Supreme Court for final adjudication.

Governance and Accountability Implications

The case raises critical governance questions.
On the one hand, excessive procedural safeguards may dilute the effectiveness of anti-corruption agencies and delay investigations.
On the other hand, unchecked investigations can be misused as tools of political or administrative vendetta.
The debate highlights the need to balance administrative efficiency, decision-making autonomy, and constitutional principles of equality and rule of law.
The outcome of the larger Bench decision will significantly shape the future of corruption control mechanisms in India.

Way Forward and Systemic Reforms

Beyond the constitutional question, the case underscores broader systemic issues in tackling corruption.
Speedy investigation and time-bound trials are essential to ensure deterrence.
Additionally, mechanisms to penalise false or malicious complaints can help prevent abuse of the investigative process without shielding genuine wrongdoing.
Institutional independence, transparency in approval mechanisms, and judicial oversight will be crucial in maintaining public trust in anti-corruption frameworks.

Source: TH

Corruption Probe FAQs

Q1: What is Section 17A of the Prevention of Corruption Act?

Ans: It requires prior government approval before investigating certain corruption allegations related to official decisions of public servants.

Q2: Why was Section 17A introduced?

Ans: To protect honest officials from frivolous investigations and encourage bold decision-making.

Q3: What did the Supreme Court rule on Section 17A?

Ans: A two-judge Bench delivered a split verdict, leading to referral of the case to a larger Bench.

Q4: How is Section 17A different from Section 19 of the PCA?

Ans: Section 17A applies at the investigation stage, while Section 19 applies before prosecution in court.

Q5: Why is the verdict significant for governance?

Ans: It affects the balance between administrative autonomy and accountability under anti-corruption laws.

Punjab Border Fence Shift: Why Farmers Want It Moved Closer to Pakistan Border

January 22, 2026

Punjab Border Fence Latest News

Punjab Chief Minister said the Centre has agreed in principle to move the security fence closer to the India–Pakistan border, a step that could restore access to farmland lying beyond the fence.
The proposal, discussed earlier but never implemented, revives questions around its origins, security concerns, and why relief for border farmers has remained elusive.

Why Punjab’s Border Fence Has Become a Farmers’ Flashpoint

Punjab’s 532-km border with Pakistan is secured by a barbed-wire fence that, due to uneven terrain, lies anywhere from a few feet to nearly 2 km inside Indian territory.
As a result, about 21,500 acres of privately owned farmland and 10,000 acres of government land fall between the fence and the International Border.
Farmers cultivating this land face strict restrictions. Access gates open only for limited hours on fixed days, with caps on the number of people and tractors allowed.
Each tractor must be escorted by two BSF Kisan Guards, further limiting daily access.
Border farmers have long demanded that the fence be moved closer to the International Border to ease cultivation.

Why the Punjab Border Fence Was Built

The electrified barbed-wire fence along the Punjab–Pakistan border was first installed in 1988 across Gurdaspur, Amritsar and Ferozepur, at the height of militancy in the state. Its primary purpose was to curb infiltration, militancy and drug smuggling.
At the time, farmers did not protest, as dissent was often viewed with suspicion during those volatile years.
In 1992, farmers formed the Border Area Sangharsh Committee to raise their concerns, but the issue has remained unresolved.
With the later creation of Tarn Taran, Fazilka and Pathankot districts, the fence now affects border communities across six districts in Punjab.

Kapoor Committee and Farmer Compensation

The Kapoor Committee, headed by then Punjab Chief Secretary S L Kapoor, was constituted in 1986 to examine the difficulties faced by farmers whose land lay beyond the border fence.
It recommended compensating affected farmers, leading to the release of an inconvenience allowance of ₹2,500 per acre in 1988.
However, farmers say this compensation has been irregular and not paid annually.

Farmers Seek Fence Shift Amid Evolving Security Landscape

Punjab’s border farmers argue that advances in surveillance and drone monitoring have changed the nature of border security, making the current fence alignment outdated.
With hundreds of acres trapped behind the fence, farmers face daily checks, delays in using machinery, and hurdles in transporting crops.
They say shifting the fence closer to the International Border would ease cultivation without compromising security, given improved monitoring and adequate defence resources.

Why the Border Fence Remains Unmoved

Despite repeated proposals, shifting the Punjab border fence has not materialised due to practical and administrative hurdles.
BSF officials say the nearly 40-year-old fence is in poor condition and moving it would require dismantling and rebuilding it with newly procured barbed wire.
Farmers, meanwhile, remain sceptical, noting that similar assurances have surfaced during elections in the past without any follow-through, including in 2023 when a possible fence shift was announced but never implemented.

Source: IE | HT

Punjab Border Fence FAQs

Q1: Why is the Punjab border fence shift in the news?

Ans: The Punjab border fence shift gained attention after the Centre agreed in principle to move the fence closer to the International Border, potentially restoring farmers’ access to restricted land.

Q2: How much farmland lies beyond the Punjab border fence?

Ans: About 21,500 acres of private farmland and 10,000 acres of government land lie beyond the Punjab border fence, restricting cultivation and access for border farmers.

Q3: Why was the Punjab border fence originally built?

Ans: The Punjab border fence was installed in 1988 during militancy to prevent infiltration, terrorism and drug smuggling along the India–Pakistan border.

Q4: What problems do farmers face due to the current fence alignment?

Ans: Farmers face restricted access hours, limits on tractors and workers, mandatory BSF escorts, delays in cultivation, and difficulties in transporting crops from fenced-off fields.

Q5: Why has the Punjab border fence not been shifted so far?

Ans: The Punjab border fence shift faces logistical hurdles, poor condition of the old fence, rebuilding costs, and repeated political assurances without implementation over decades.

Bombay High Court on Protective Custody Under PITA: Care vs Detention

January 22, 2026

Protective Custody under PITA Latest News

The Bombay High Court set aside an order placing an adult trafficking survivor in a protective home for a year, holding that such custody without legal justification violates constitutional liberty.
The court clarified that protective homes under the Immoral Traffic (Prevention) Act (PITA) are meant for rehabilitation, not confinement.
The court stressed that an adult survivor’s fundamental rights to personal liberty and freedom under Article 19 prevail over statutory powers, and do not stand suspended merely because she was trafficked.
The case arose after a police raid in Maharashtra, where the petitioner alone was detained on the assumption that her lack of family support or income made her likely to return to sex work—an assumption the court found impermissible.

Limits of Custody Under the Immoral Traffic (Prevention) Act

What PITA Allows After Rescue - Under Section 17 of the Immoral Traffic (Prevention) Act, a rescued person may be kept in safe custody only briefly if immediate production before a magistrate is not possible. This initial custody is capped at 10 days.
Magisterial Inquiry and Time Limits - Once produced before a magistrate, the law requires an inquiry. During this stage, interim custody can continue, but only up to three weeks. Any placement beyond this period is not automatic.

When Long-Term Placement Is Permissible

A longer stay in a protective home — ranging from one to three years — can be ordered only if the magistrate records a clear finding that the person is “in need of care and protection”.
The Bombay High Court stressed that these timelines reflect legislative intent to prevent rescue from turning into confinement.

Protective Homes vs Corrective Institutions

PITA draws a clear distinction:
- Protective homes (Section 2(g)) are meant for care and rehabilitation of victims.
- Corrective institutions (Section 2(b)) are for detention of offenders and are governed by Section 10A.
Only persons found guilty of offences under the Act can be sent to corrective institutions.

Constitutional Rights of Adult Survivors

For adults, constitutional freedoms under Article 19 — including the right to move freely, choose residence, and pursue a livelihood — remain intact even after trafficking.
Unlike children, adults cannot be subjected to extended state control without consent.

Consent as the Core Principle

The High Court held that “care” for an adult survivor must be voluntary.
Once an adult clearly expresses a desire to leave a protective home, continued confinement ceases to be care and becomes unlawful detention.
In this case, the woman’s repeated refusal to stay made her consent central, not optional.

When Care Becomes Detention: The Court’s Test

Substance Over Labels - The Bombay High Court clarified that the difference between care and detention depends on effect, not terminology.
- Care involves voluntary support — counselling, shelter with consent, and help in rebuilding life — while detention is defined by compulsion.
Consent and Autonomy as the Core - When an adult is kept in a protective home against her wishes, with restrictions on movement and choice, it amounts to detention.
- Such restraint on personal liberty must be justified with concrete material on record, not assumptions.
Victims Are Not Offenders - The court cautioned against treating trafficking survivors as offenders by default.
- The Immoral Traffic (Prevention) Act (PITA) “was not meant to punish a victim of sexual exploitation”.
- In the absence of conduct attracting penal provisions, restrictions cannot be imposed.
Role of the Magistrate - Under PITA, only a magistrate, after conducting a proper inquiry, can determine whether a rescued person genuinely requires care and protection.
- Any placement in a protective home must follow this satisfaction and statutory safeguards.

When Detention May Be Justified

Detention may be permissible only in limited situations:
- Evidence of a condition impairing decision-making capacity
- A demonstrable danger to society if released
- The person being an accused in a criminal case

Why Detention Failed in This Case

None of these conditions were met. There was no medical evidence of incapacity, no finding of danger to others, and the woman was not accused of any offence.
The court rejected speculative fears — including the possibility of returning to sex work — as insufficient grounds for confinement.

What the Law Penalises Under PITA

Prostitution Is Not a Crime - The PITA does not criminalise prostitution itself. Courts have clarified that being engaged in sex work does not automatically make a person an offender.
Focus on Exploitation, Not Individuals – The Act targets the commercial exploitation surrounding prostitution. The law is aimed at those who control, profit from, or facilitate exploitation — not the individuals trapped within it.
Who the Act Criminally Targets
- Criminal liability arises for:
  - Managing or running a brothel
  - Living off the earnings of another person’s prostitution
  - Procuring or trafficking persons for prostitution, even with apparent consent
  - Detaining a person for sexual exploitation
Limited Punishable Conduct - Certain acts linked to prostitution are punishable only when they affect public order — such as soliciting in public spaces or operating near schools, hospitals, or places of worship.
- Courts stress these are regulatory, not moral, provisions.

Poverty Is Not Grounds for Detention

The Bombay High Court rejected the view that economic vulnerability justifies confinement.
Lack of family support or fear of returning to sex work cannot override constitutional rights.
Poverty may warrant assistance, but never the curtailment of liberty.

Source: IE | LL

Protective Custody under PITA FAQs

Q1: What did the Bombay High Court rule on protective custody under PITA?

Ans: The Bombay High Court held that protective custody under PITA for adult trafficking survivors cannot violate constitutional liberty and must remain voluntary, time-bound, and justified by law.

Q2: How does PITA regulate protective custody after rescue?

Ans: Under PITA, protective custody is limited to 10 days initially and three weeks during inquiry; longer confinement requires a magistrate’s clear finding of need for care and protection.

Q3: Why did the court reject detention in this case?

Ans: The court found no medical incapacity, criminal charge, or danger to society, making continued protective custody under PITA unconstitutional and based on speculative assumptions.

Q4: What distinction did the court draw between care and detention?

Ans: Care under PITA involves voluntary support and rehabilitation, while detention involves forced confinement; keeping an adult against her will transforms care into unconstitutional detention.

Q5: Does PITA criminalise prostitution?

Ans: No, PITA does not criminalise prostitution itself; it targets exploitation by traffickers and brothel operators, not individuals engaged in sex work.