Current Affairs of 9 September 2026

The Political Cost of Unconditional Cash Transfers

Context

• Since 2020, Unconditional Cash Transfer (UCT) schemes have become an important welfare instrument and electoral strategy in India, particularly for attracting women voters.
• Schemes such as Kalaignar Magalir Urimai Thittam, Lakshmir Bhandar, Gruha Lakshmi and Mukhya Majhi Ladki Bahin Yojana provide direct financial support to women.
• They also partly advance SDG 5.4, which recognises women’s unpaid domestic and care work, however, higher cash transfers do not necessarily ensure electoral success.
• Their effectiveness is influenced by fiscal pressures, targeting errors and perceptions of unfairness, creating significant political costs.

UCTs: Welfare Support and Electoral Strategy

• UCTs provide immediate financial relief without requiring beneficiaries to fulfil behavioural conditions.
• They can improve household consumption, strengthen women’s financial autonomy and recognise unpaid care work.
• States are expected to spend around $18 billion on UCTs in 2025-26, with much of the expenditure directed towards women.
• Their electoral appeal is strong because beneficiaries experience a visible and direct connection with government.
• Yet, elections show that cash benefits alone cannot guarantee voter loyalty, especially when large sections of potential beneficiaries feel excluded.

The Fiscal Cost of Competitive Welfarism

• UCTs create concerns regarding fiscal sustainability and opportunity costs.
• Governments may need to shift expenditure, borrow more or accept larger fiscal deficits to finance recurring transfers.
• This can reduce resources for employment generation, infrastructure, education, healthcare and self-employment programmes.
• Once households become accustomed to regular transfers, withdrawing them becomes politically difficult.
• Political parties may consequently engage in competitive welfarism, promising increasingly generous benefits.
• Welfare can thus become a recurring fiscal commitment rather than a temporary instrument of economic empowerment.

The Problem of Targeting

• Targeted UCTs face a fundamental challenge: identifying genuine beneficiaries.
• Since incomes are difficult to observe among informal-sector workers, governments rely on proxy indicators such as land ownership, electricity consumption and household assets.
• This produces inclusion errors, where ineligible households receive benefits, and exclusion errors, where eligible households are denied them.
• Such errors generate not only economic hardship but also perceptions of governmental injustice and discrimination.

Lessons from Tamil Nadu

• The Kalaignar Magalir Urimai Thittam illustrates the difficulties of targeting.
• Although the ruling party had promised ₹1,000 per month to women-headed households before the 2021 election, fiscal constraints led to eligibility restrictions when the scheme was launched in September 2023.
• Initially, around 13 crore women were covered. Following complaints, another 16.94 lakh beneficiaries were added in December 2025.
• The scheme cost approximately ₹13,807 crore in 2025-26.
• Nevertheless, dissatisfaction continued among women who believed they remained unfairly excluded.
• The distribution of advance payments and additional relief to existing beneficiaries could further intensify such grievances.
• In closely contested constituencies, even small shifts in voter preferences can affect electoral outcomes.

Political Costs of Perceived Injustice

• Similar concerns emerged with Lakshmir Bhandar in West Bengal, while Maharashtra’s Mukhya Majhi Ladki Bahin Yojana and Karnataka’s Gruha Lakshmi Scheme faced different inclusion or exclusion-related controversies.
• The key problem is that perceived targeting errors can be politically as damaging as actual errors.
• Citizens may consider themselves deserving even when they fail to satisfy official criteria. Conversely, legally eligible households may be perceived by others as undeserving because they appear relatively affluent.
• Thus, welfare satisfaction depends not only on receiving benefits but also on perceptions of fairness and equal treatment.

Economics versus Politics

• UCTs reveal a fundamental conflict between economic efficiency and political acceptability.
• Economics favours targeting scarce resources towards those most in need.
• Politics, however, often rewards broader inclusion because voters evaluate governments according to both the benefits they receive and those they believe were unfairly denied.
• Therefore, the more narrowly a programme is targeted, the greater its potential exposure to exclusion-related political grievances.
• Targeting improves resource efficiency but simultaneously creates a distinction between beneficiaries and non-beneficiaries.

Conditional Transfers as an Alternative

• Conditional cash transfers and incentive-based welfare programmes can provide a more sustainable alternative by linking benefits with desirable developmental outcomes such as education, healthcare, nutrition and skill development.
• Tamil Nadu’s Midday Meal Scheme demonstrates this approach.
• Since participation is connected with school enrolment, beneficiaries effectively self-select, reducing some targeting grievances while simultaneously promoting education, nutrition and human-capital development.

Way Forward

• Future welfare policies should combine social protection with long-term economic empowerment. Governments should:
  • Improve beneficiary identification and grievance redressal.
  • Establish transparent and easily understandable eligibility criteria.
  • Regularly assess inclusion and exclusion errors.
  • Combine cash support with employment and skill development.
  • Expand conditional programmes where behavioural incentives can generate developmental gains.
  • Evaluate welfare schemes for fiscal sustainability and social outcomes.
  • Recognise the political consequences of perceived unfairness.

Conclusion

• UCTs can provide meaningful financial protection and promote women’s economic empowerment, but their electoral effectiveness cannot be taken for granted.
• Cash transfers may generate political support among beneficiaries while simultaneously creating resentment among excluded groups.
• India therefore needs a welfare framework balancing financial protection, fiscal responsibility, administrative fairness and human development.
• The ultimate goal should be to transform welfare from a mechanism of recurring dependence into a pathway towards economic security, capability and genuine empowerment.

The Political Cost of Unconditional Cash Transfers FAQs

Q1. What are UCT schemes?
Ans. UCT schemes provide direct financial assistance without imposing behavioural conditions.

Q2. What is a major problem with targeted UCTs?
Ans. A major problem is the occurrence of inclusion and exclusion errors.

Q3. Why can UCTs create political costs?
Ans. UCTs can create political costs when excluded citizens perceive the targeting as unfair.

Q4. What is an alternative to unconditional transfers?
Ans. Conditional cash transfers can link welfare benefits with desirable developmental outcomes.

Q5. What should future welfare policies prioritise?
Ans. Future welfare policies should balance social protection, fiscal sustainability, fairness and economic empowerment.

Source: The Hindu

Reclaiming Universities Through Trust, Student Voice

Context

• Student protests are growing across Indian campuses. Recently, law students of NALSAR were in the news after a controversy over their convocation.
• Chief Justice of India Surya Kant intervened by staying the Bar Council of India's order against the graduating batch, quashing FIRs against protesting students, declaring that the BCI has no disciplinary control over students, and reducing the three-year practice requirement for the judicial services examination to one year.
• Against this backdrop, this article argues that the real issue is not student behaviour but the failure of university governance.

The Real Question Behind Campus Protests

• The debate should not be about whether students were right or wrong in seeking a say in their convocation.
• The deeper question is why students are so frustrated with the governance of universities that they lose hope and sometimes cross the limits of decency.
• Blaming a single oral remark by the CJI, which was quickly clarified, oversimplifies a much larger governance crisis. Three questions need answers:
  • How should universities be governed?
  • What is the role of free speech and academic autonomy?
  • Why are Vice-Chancellors unable to command students' respect or resolve issues internally?

Academic Freedom Must Be the Core

• Universities cannot function without academic freedom. The Indian Constitution does not explicitly mention it, but several other constitutions do:
  • Article 5(3) of the German Basic Law guarantees scientific freedom (Wissenschaftsfreiheit) to everyone engaged in scholarly teaching and research.
  • The Constitutions of Japan, South Africa, Portugal and Spain contain similar provisions.
  • Article 137 of Hong Kong's Basic Law allows educational institutions to retain autonomy and enjoy academic freedom.
• Ideally, governments should not dictate what universities teach or how they teach. Universities, in turn, should not deny this freedom to their departments.
• Experts cite Delhi University's recent decision to drop a paper on the Delhi Sultanate. They argue that Gen Z can easily see the ideological motives behind such curriculum changes.
• Curriculum should be decided by all stakeholders, including students.
• Academic freedom does not mean a licence to defame people or engage in anti-national activities. Where an activity involves "conduct" rather than speech, the state can regulate it.

Academic Freedom Under Strain Worldwide

• Even in the West, academic freedom faces pressure. In the US, federal funding has been used to reshape campus culture, diversity programmes have been dismantled, and research funding in areas like climate change has been
• Universities have been pressured for allowing student protests, including those over Gaza. Both right-wing and left-wing regimes have tried to control universities.
• Today, with shrinking public funding, research agendas are shaped by funders, corporations and pharmaceutical companies.

The Control Model and Its Failures

• Student protests are a symptom of poor governance. Governments increasingly seek to control universities, and administrations follow a "control model".
• Most universities remain Vice-Chancellor-centric, while students, the very reason universities exist, have little say.
• When grievances go unaddressed, students feel ignored and some take extreme steps. Vice-Chancellors rarely hold open houses and remain inaccessible.
• Knowledge creation cannot happen in a controlled environment. It needs the freedom to question everything.
• India's ancient Gurukul system was fully autonomous, yet today's education system is over-regulated and underfunded. Key problems include:
  • Public investment in education stands at around 4–4.1 per cent of GDP, well short of the NEP 2020 target of 6 per cent, with higher education receiving the smallest share.
  • Deteriorating infrastructure and an acute hostel shortage, which led to a tragedy in New Delhi.
  • Vacant faculty positions and poorly paid guest faculty.
  • Faculty recruitment that prioritises ideological leanings over merit.
  • Repeated examination paper leaks that add to student stress.
• Eventually, this frustration erupts against the government rather than university administrations.

Flawed Appointments of Vice-Chancellors

• Experts highlight gross violations of natural justice in Vice-Chancellor appointments.
• In one case, a Vice-Chancellor changed the composition of the selection committee, chaired it, and voted to appoint his own wife. The judiciary declined to follow its own precedents of quashing such appointments.
• Some appointees have questionable records and adverse CVC reports, and some state universities face bribery allegations.
• Paper leaks reflect the same systemic failure. No examination is foolproof if paper setters and officials are appointed for reasons other than merit and integrity.

The Liberty Model of Governance

• This article proposes a "liberty model".
• It rests on trust: when students are trusted, they act more responsibly. Students could meet the Vice-Chancellor without appointments and share personal concerns.
• This trust made frank conversations possible even when unpopular decisions had to be taken.
• Under this model:
  • Universities are spaces where even the most unpopular ideas can be debated freely.
  • Students have a meaningful role in academic, administrative and financial decisions, including faculty appointments, procurement, curriculum design and drafting of regulations.
  • Institutions like Aligarh Muslim University already give students a statutory role in selecting the Vice-Chancellor.
• Democratising campuses is the only real solution to growing student protests.

Conclusion

• Student unrest reflects a governance crisis, not student indiscipline. Universities must become student-centric rather than Vice-Chancellor-centric. Restoring academic freedom, merit-based appointments, adequate funding and genuine student participation can rebuild trust.
• India must reject the outdated control model and embrace the liberty model of governance.

Reclaiming Universities Through Trust, Student Voice FAQs

Q1. What is the main issue behind growing student protests?

Ans. Growing student protests reflect dissatisfaction with university governance, inaccessible administrations, unaddressed grievances, limited student participation and declining trust in institutional leadership.

Q2. Why is academic freedom important for universities?

Ans. Academic freedom enables universities to question ideas, encourage independent research and teaching, and provide spaces where diverse and unpopular views can be debated.

Q3. What problems does the control model of university governance create?

Ans. The control model limits student participation, concentrates authority with Vice-Chancellors, suppresses open dialogue and leaves grievances unresolved, ultimately increasing campus frustration.

Q4. What is the liberty model proposed for universities?

Ans. The liberty model is based on trust, allowing students meaningful participation in academic, administrative and financial decisions while encouraging open communication.

Q5. How can universities rebuild trust with students?

Ans. Universities can rebuild trust through academic freedom, transparent governance, merit-based appointments, adequate funding, accessible leadership and genuine student participation in institutional decisions.

Source: TH

India’s Demographic Dividend as a Global Talent Strategy

Context

• The global economy is entering a demographic transition marked by declining fertility, ageing populations and shrinking workforces, particularly in advanced economies.
• This is producing structural labour shortages in healthcare, infrastructure, technology and other skilled sectors.
• For India, this demographic imbalance presents a strategic opportunity. With a large young population, India can transform its human capital into a global economic and geopolitical resource.
• However, India must develop the skills, institutions and safeguards necessary for international workforce participation.

India’s Human Capital - A Strategic Resource

• India has around 450 million people aged 18–35 years, according to UN population estimates.
• A substantial section of this population is English-speaking, digitally literate, culturally adaptable and globally connected.
• Unlike conventional strategic resources such as oil, coal or rare-earth minerals, India’s advantage lies in its raw human talent.
• However, demographic strength by itself cannot generate economic gains. Youth must be equipped with -
  • Language and communication skills
  • Technical and vocational training
  • Internationally recognised certifications
  • Cultural and professional preparedness
  • Industry-relevant skills and work discipline
• Thus, India needs to move from merely having a large workforce to creating a globally employable workforce.

Global Skills Mobility as Economic Diplomacy

• International labour mobility should no longer be treated merely as a migration issue. It can become a strategic instrument of economic diplomacy, workforce development and international cooperation.
• Indian professionals and workers can help address labour shortages in ageing economies while generating substantial remittance inflows for India.
• Overseas employment can also enhance India's soft power, strengthen people-to-people ties and expand its international influence.
• India’s remittance performance demonstrates this potential. Worker remittances exceeded $110 billion in FY 2025–26, reflecting the growing economic significance of Indians working abroad.
• The traditional concern over “brain drain” is also evolving into the concept of “brain circulation”, where international mobility can generate knowledge, networks, capital and skills that ultimately benefit the home country.

The Political Challenge - Rising Anti-Immigration Sentiment

• The opportunity exists alongside a major political constraint - many developed economies facing labour shortages are simultaneously witnessing declining political support for immigration.
• Anti-immigration political movements have gained influence in parts of Europe, making large-scale permanent migration increasingly politically contentious.
• Therefore, India's global talent strategy cannot depend exclusively on conventional permanent migration.

Circular Mobility - A Possible Solution

• Circular mobility—where workers move temporarily between countries while maintaining economic and social links with their home country—offers an alternative.
• Models involving temporary foreign workers in Singapore, Hong Kong and Gulf economies demonstrate how structured labour mobility can address workforce shortages while limiting political concerns.
• For India, negotiated mobility partnerships could combine -
  • Temporary and sector-specific migration
  • Mutual recognition of qualifications
  • Skill certification
  • Worker welfare and social-security safeguards
  • Transparent recruitment
  • Prevention of exploitation
  • Mechanisms for return and reintegration
• However, circular migration must not become a justification for weakening labour rights or social protection.
• The objective should be managed mobility based on dignity, fairness and mutual benefit.

Need for Trusted Institutions

• India's existing migration ecosystem faces challenges from fragmented recruitment systems, opaque intermediaries and inadequate worker protection.
• A globally competitive talent-mobility framework therefore requires institutional reform.
• Role of government: The government should negotiate bilateral and multilateral mobility agreements, harmonise qualifications and standards, strengthen consular protection and establish mechanisms to protect migrant workers from exploitation.
• Role of industry:
  • Industry must move beyond treating overseas recruitment as a short-term placement exercise.
  • It should invest in long-term workforce development, skill formation, certification and continuous upskilling.

Way Forward

• India should aim to become a “global hub for trusted talent mobility”.
• This requires converting its demographic advantage into human-capital advantage through skill development, internationally recognised certification, ethical recruitment and strategic mobility partnerships.
• The coming decades may reward countries capable of producing globally employable talent at scale.
• India's demographic dividend therefore needs to be connected with the demographic deficits of ageing economies.

Conclusion

• India’s young population can become a strategic asset comparable, in economic significance, to traditional natural resources.
• But the dividend will materialise only if demographic strength is matched by skills, institutional capacity, worker protection and diplomatic strategy.
• Global skills mobility can consequently become an important pillar of India's economic growth, remittance economy, soft power and geopolitical influence.

India’s Demographic Dividend FAQs

Q1. How can India convert its demographic dividend into a global strategic advantage?

Ans. By investing in skill development, international certification, language proficiency and ethical talent mobility.

Q2. What is the significance of “brain circulation” for India’s development?

Ans. It transforms overseas migration from a potential loss into an opportunity for remittances, knowledge transfer, etc.

Q3. How can circular mobility address the contradiction due to labour shortages?

Ans. Temporary, regulated and sector-specific migration can meet labour shortages while reducing concerns over permanent settlement.

Q4. What institutional reforms are required to make India a global hub for trusted talent mobility?

Ans. Transparent recruitment systems, recognised skill certification, bilateral mobility agreements, etc.

Q5. Why is global skills mobility considered as an instrument of economic diplomacy?

Ans. Because managed talent mobility can simultaneously address global labour shortages, strengthen people-to-people ties, etc.

Source: IE