UPSC Mains Current Affairs for 30 January 2026

Economic Survey 2025–26 Preface – Towards an Entrepreneurial State in an Uncertain World

January 30, 2026

Economic Survey 2025-26 Latest News

The Economic Survey 2025–26, tabled in Parliament by the Union Minister for Finance and Corporate Affairs, Smt. Nirmala Sitharaman, reflects on India’s post-Covid economic resilience amid rising global geopolitical and economic uncertainties.
The Preface departs from conventional macroeconomic commentary and makes a strong normative case for transforming India into an “entrepreneurial state” capable of navigating uncertainty while pursuing the goal of Viksit Bharat.

Reconfigured Economic Survey

Structural changes:
- The Economic Survey 2025-26 expanded to 17 chapters - indicating greater depth and breadth.
- Chapters are rearranged based on national priority and relevance, not convention.
Special essays on:
- Evolution of Artificial Intelligence
- Quality of life in Indian cities
- State capacity, private sector and households in achieving strategic resilience and strategic indispensability.

Core Theme - Entrepreneurial Policy Making under Uncertainty

Fundamental shift in the role of the State: From risk-averse, compliance-driven governance to risk-structuring, capability-driven and adaptive governance.
Key features of an ‘Entrepreneurial State’:
- It acts before certainty emerges, structures and manages risk, rather than avoiding it.
- It will learn from systematic experimentation, and correct course without policy paralysis.
Significance: This vision is presented as practical and already unfolding, not merely aspirational.

Early Signals of the Entrepreneurial State

The Survey highlights ongoing initiatives as evidence of this shift. For example,
- Mission-mode platforms (e.g., Semiconductors, Green Hydrogen).
- Public procurement reforms enabling first-of-a-kind domestic innovation.
- State-level deregulation compacts, replacing inspection-based controls with trust-based compliance.
These initiatives mark a transition from regulation to capability building.

India’s Macroeconomic Resilience in a Turbulent World

Despite the Covid-19 shock, US tariffs imposed (in April 2025), rising global fragmentation, India has demonstrated strong macroeconomic fundamentals.
For example, expected real GDP growth of over 7% in 2025–26, with momentum continuing into the next year.
However, the Survey identifies a “Paradox of 2025”:
- India’s strongest macroeconomic performance in decades coincides with a global system that no longer rewards macroeconomic prudence with currency stability, capital inflows, or insulation from shocks.

Global Headwinds vs India’s Aspirations

India, with 145 crore people, aims to become a high-income country within a generation, within a democratic framework—a path with no ready-made global template.
The Survey notes:
- Retreat of the global dominant power from earlier commitments.
- Rising trade frictions, geopolitical rivalries, and economic nationalism.
These headwinds can become tailwinds only if the State, private sector, and households align and commit to sustained effort.

Three Possible Global Scenarios for 2026

Managed disorder:
- Less coordinated world
- Higher risk aversion
- Integrated yet distrustful global system
- Narrower margin of safety
Disorderly multipolar breakdown:
- Intensified strategic rivalry
- Coercive trade, sanctions, supply chain realignments
- Greater trade-offs between autonomy, growth, and stability
Systemic shock cascade (low probability, high impact): Financial, technological, and geopolitical shocks amplify each other - potentially worse than the 2008 Global Financial Crisis.

India’s Relative Strengths

India is better placed than many countries due to:
- Large domestic market
  - Less financialised growth model
  - Strong foreign exchange reserves
  - Credible strategic autonomy
Yet, a common risk across all scenarios remains:
- Disruption of capital flows
- Sustained pressure on the rupee

Running a Marathon and Sprint Simultaneously

External sector imperative: Rising incomes will inevitably lead to rising imports. Therefore, India must generate export earnings, and foreign investor confidence.
Policy stance for 2026:
- Focus on supply stability, resource buffers, diversification of routes and payment systems.
- Adopt strategic sobriety, not defensive pessimism.
India must “India must run a marathon and sprint simultaneously, or run a marathon as if it were a sprint”—maximising growth while absorbing shocks.

Challenges

India’s central challenge - Policy and process reforms:
- The Survey underlines that policy reforms are necessary, and process reforms are even more critical.
- Why? Processes govern state–citizen interaction. They determine whether policy intent succeeds or fails.
- Positive signals: State-led deregulation and smart regulation, and shift from control to enabling governance.
Other challenges:
- Global geopolitical fragmentation and economic coercion
- Capital flow volatility and exchange rate pressures
- Need for rapid institutional adaptation
- Balancing growth with resilience and stability

Way Forward

Integrating 3 pillars for Viksit Bharat:
- The Survey integrates three pillars: state capacity, societal participation, and deregulation.
- In a democracy, the State remains the principal development agent, but must upskill and reskill, be mentally prepared for a hostile and uncertain global terrain, and adapt to the reality that old rules no longer apply.
Strategic opportunity amid global crises:
- Potential global crises may open space for India to shape the emerging global order, and enhance strategic influence and indispensability.
- This demands the most agile, flexible and purposeful governance since Independence.
Delayed gratification over short-term fixes:
- The Survey advocates resilience over quick wins, innovation and persistence over short-term pressure management.
- This will help India to stay committed to Viksit Bharat amid prolonged global churn.
Other suggestions:
- Deepen entrepreneurial governance.
- Strengthen process reforms and deregulation.
- Build buffers, redundancy, and liquidity.
- Align state, market, and society towards long-term national goals.
- Invest in state capacity and institutional learning.

Conclusion

The Economic Survey 2025–26 Preface redefines India’s economic strategy for an era of uncertainty.
It calls for an entrepreneurial, adaptive and resilient State that can sustain high growth while absorbing shocks.
In a volatile global order, India’s path to Viksit Bharat lies not in quick fixes, but in patient resilience, relentless innovation, and strategic sobriety—running the marathon of development at the pace of a sprint.

Source: PIB

[youtube url="https://www.youtube.com/watch?v=Wu66P3clSAU" width="560" height="315"]

Economic Survey 2025–26 FAQs

Q1: What does the Economic Survey 2025–26 mean by an “entrepreneurial state”?

Ans: It is one that acts before certainty emerges, structures risk instead of avoiding it, learns through experimentation.

Q2: What is the “Paradox of 2025”?

Ans: India achieved its strongest macroeconomic performance while operating in a global system that no longer rewards such success.

Q3: What are the common macroeconomic risks for India?

Ans: Disruption of capital flows leading to sustained pressure on the rupee.

Q4: Why does the Economic Survey emphasise process reforms over policy reforms?

Ans: Because administrative processes shape state–citizen interaction and determine whether policy intent translates into effective outcomes.

Q5: What is meant by the metaphor of “running a marathon and sprint simultaneously”?

Ans: It signifies India’s need to maximise domestic growth while simultaneously building buffers, liquidity, and shock-absorption capacity.

Has Health Spending by the Centre Increased in India?

January 30, 2026

Health Spending Latest News

Recent data show that while States have increased health expenditure, the Union government’s health spending as a share of GDP has declined in the post-pandemic period.

Background: Health Financing Commitments in India

India’s health financing framework has long acknowledged the need for higher public investment.
The National Health Policy (NHP), 2017, committed to increasing total public health expenditure from 1.15% of GDP to 2.5% by 2025.
A key pillar of this commitment was enhancing the Union government’s contribution, envisaged at 40% of total public health spending.
However, the policy target has not been achieved. As of 2025-26, India remains significantly below the stated goals, raising concerns about fiscal prioritisation of health in national budgeting.

Trends in Public Health Spending in India

India’s public health expenditure remains among the lowest globally.
Comparative data show that countries such as Bhutan, Sri Lanka, Thailand, and Malaysia spend several times more per capita on health than India. Even among BRICS nations, India’s per capita public health spending is markedly lower.
During the COVID-19 pandemic, public health spending as a percentage of GDP rose temporarily.
However, this increase was driven largely by State governments, not by sustained expansion in Union government allocations.

Union Government Health Spending: Declining Priority

According to Reserve Bank of India data, the Union government’s health expenditure declined from 0.37% of GDP in 2020-21 to 0.29% in 2025-26 (Budget Estimates).
In real terms, the 2025-26 health allocation is 4.7% lower than actual spending in 2020-21, after adjusting for inflation.
This decline indicates that the modest priority accorded to health during the pandemic has not been sustained.
The share of health in the total Union Budget has also fallen from 2.26% to 2.05% during this period, signalling a relative de-prioritisation.

State Governments Driving Health Expenditure Growth

In contrast, States and Union Territories have increased health spending consistently since 2017-18.
Health expenditure by States rose from 0.67% of GDP in 2017-18 to 1.1% in 2025-26, with the share of health in State budgets increasing from 5% to 5.6%.
This trend highlights a structural imbalance: while health is primarily a State subject, the fiscal capacity of States depends heavily on Union transfers. Reduced Central spending, which directly affects frontline healthcare delivery.

Health and Education Cess: Limited Impact on Health Budgets

The Health and Education Cess (HEC), introduced in 2018-19 at 4% of taxable income, was intended to augment health spending.
However, evidence suggests that cess collections have largely been absorbed into general revenues rather than used to expand health budgets.
In FY 2023-24, only about one-fourth of the Rs. 71,180 crore collected through HEC was allocated to health.
Excluding cess contributions, the Union government’s health spending declined by 22.5% in real terms between 2020-21 and 2023-24.

Cuts in Centrally Sponsored Health Schemes

Another major concern is the declining share of Union spending transferred to States through Centrally Sponsored Schemes (CSS).
This share fell from 75.9% in 2014-15 to about 43% in 2024-25.
Key schemes such as the National Health Mission (NHM), which has been central to strengthening rural and urban health infrastructure since 2005, have seen stagnation or real-term declines in funding.
During the second tenure of the NDA government, NHM spending declined by 5.5% annually in real terms, weakening public health system capacity.

Implications for Public Health Outcomes

Low and declining Central investment has several implications:
- Increased out-of-pocket expenditure for households
- Strain on State finances, especially poorer States
- Weakened preventive and primary healthcare systems
- Reduced preparedness for future health emergencies
These trends undermine India’s ability to achieve Universal Health Coverage and meet Sustainable Development Goal targets related to health.

Source: TH

Health Spending FAQs

Q1: What was the health spending target under the National Health Policy, 2017?

Ans: It aimed to raise public health expenditure to 2.5% of GDP by 2025.

Q2: Has Union government health spending increased since COVID-19?

Ans: No, it has declined from 0.37% to 0.29% of GDP post-pandemic.

Q3: Which level of government has driven recent increases in health spending?

Ans: State governments and Union Territories.

Q4: Has the Health and Education Cess significantly boosted health budgets?

Ans: No, most cess proceeds have not translated into higher health allocations.

Q5: Why is reduced Central health spending a concern?

Ans: It weakens State health systems and limits access to affordable public healthcare.

India’s New CPI Series: Food Weight Cut, Housing Gains

January 30, 2026

New CPI Series Latest News

According to documents released by the Ministry of Statistics and Programme Implementation (MoSPI), India’s revised Consumer Price Index, with 2024 as the base year, will significantly lower the weight of food and beverages from 45.86% to 36.75%.
At the same time, housing will account for a larger share of the CPI basket. Along with improved methods to measure rent increases, this change is expected to push up measured housing inflation and place upward pressure on headline retail inflation.

Why Food’s High Weight in CPI Has Been a Concern

Food items account for a large share of India’s Consumer Price Index (CPI), meaning sharp swings in food prices often dominate headline inflation, pushing it up or down irrespective of broader price trends.
From June 2025, food inflation turned negative, with prices consistently lower than a year earlier.
This sharply pulled down headline CPI inflation, which fell to an all-time low of 0.25% in October 2025, alongside record-low food inflation of –5.02%.

Impact of New CPI Weights on Inflation Readings

According to experts, recalculating CPI with new weights but unchanged indices suggests:
Overall CPI could be 20–30 basis points higher when food inflation is low.
In periods of high food inflation, CPI could be 20–30 basis points lower than under the current series.

Why RBI Has Been Uneasy with the Current CPI

For the Reserve Bank of India, the heavy food weight is problematic because the existing CPI is based on 2011–12 consumption patterns, making it outdated and less representative of today’s economy.
As per Ernst Engel’s economic theory, the share of income spent on food declines as incomes rise. This trend is reflected in recent Indian data.
The updated CPI basket draws on the MoSPI’s 2023–24 Household Consumption Expenditure Survey (HCES):
- Rural households: food share fell from 52.9% (2011–12) to 47.04% of monthly per capita consumption.
- Urban households: food share declined from 42.62% to 39.68%.
Falling food shares in household spending underline why reducing food’s weight in the CPI is seen as necessary—to make inflation data more stable, current, and reflective of actual consumption patterns in India today.

Relief for RBI from Lower Food Weight in CPI

The RBI influences inflation mainly by managing demand through interest rates.
However, it has limited ability to address supply-side shocks in food prices, as rate changes cannot quickly alter the supply of vegetables, cereals, or other food items.
In the past, episodes of high food inflation have kept headline inflation elevated, preventing the RBI from cutting interest rates even when underlying demand conditions were weak. This has complicated monetary policy decision-making.
Against this backdrop, the Economic Survey 2023–24 suggested exploring whether India’s inflation targeting should focus on inflation excluding food items.
The RBI opposed this idea.
- Then Governor Shaktikanta Das said that while the central bank can look through temporary food inflation, it cannot ignore persistently high food inflation.

Current Inflation Targeting Framework

By law, the RBI must target CPI inflation at 4%, within a tolerance band of 2–6%, under the Flexible Inflation Targeting (FIT) framework.
This framework is currently under review, with the new target for the next five years, starting April, expected to be announced by March.
Most economists expect the FIT framework to be retained in its current form, but changes in CPI composition—especially a lower food weight—could give the RBI greater operational comfort in managing inflation and interest rates.

New CPI Basket: What Is Changing

Timeline for the New CPI Series - The broad weights of categories in the new CPI basket have been released ahead of the first inflation data under the new series, which will come out on February 12 for January. Detailed item-wise weights will be published before that.
Expanded Coverage: More Items in the Basket - The new basket will include 358 items, up from 299 earlier—reflecting changes in consumption patterns.
Reclassification of Categories - The MoSPI has reorganised CPI categories, making one-to-one comparisons (with earlier version) difficult. For example, education services now carry a 3.33% weight as a standalone category, whereas earlier education was a sub-group under “miscellaneous” with a 4.46% weight.
Linking Old and New CPI Series - To ensure continuity, the expert group recommended releasing a linking factor between CPI 2012 and CPI 2024 for all-India, rural, and urban indices with the first CPI 2024 release.
Food Weight Falls; Housing Gains Prominence - While food’s weight declines in the new series—expected to reduce headline inflation volatility—housing’s weight rises sharply from 10.07% to 17.66%.

Why Housing Weight Is Rising

The increase is driven by:
- Expanded coverage to include residential utilities (water, electricity, gas, other fuels).
- Higher spending on rent, per the 2023–24 HCES:
- Rural rent share rose to 0.56% (from 0.45% in 2011–12).
- Urban rent share increased to 6.58% (from 6.24%).

Implications for Inflation

Lower food weight should reduce volatility in headline CPI.
However, the higher housing weight, combined with methodological changes—such as excluding employer-provided accommodation from rent measurement—could push housing inflation higher, adding upward pressure to overall inflation.

Source: IE | BS

New CPI series FAQs

Q1: What is changing in the new CPI series?

Ans: The new CPI series reduces food weight sharply, increases housing weight, expands item coverage, and updates inflation measurement to reflect current consumption patterns.

Q2: Why is food weight lower in the new CPI series?

Ans: In the new CPI series, food weight falls because households now spend a smaller share of income on food, as shown by the latest consumption survey data.

Q3: How does the new CPI series affect inflation volatility?

Ans: The new CPI series is expected to reduce headline inflation volatility by limiting the outsized impact of sharp food price swings on overall inflation.

Q4: Why does housing gain importance in the new CPI series?

Ans: Housing gains weight in the new CPI series due to expanded coverage of utilities, higher rent spending, and improved methods to measure housing inflation accurately.

Q5: How does the new CPI series help the RBI?

Ans: The new CPI series gives the RBI a clearer inflation signal by reducing food-driven distortions, making interest rate decisions more aligned with underlying demand conditions.

Gandhi’s Gram Swaraj Ideal and the Limits of Decentralisation

January 30, 2026

Gram Swaraj Latest News

Recently a President of a prominent political party criticised the Union government for renaming the MGNREGS as VB-G RAM G ahead of Parliament’s Budget session.
He alleged that the name change was an attempt to erase Mahatma Gandhi’s presence from public memory and weaken the idea of Gram Swaraj, or village self-rule.

Background to the Remarks on MGNREGS

Origins of the Employment Guarantee Scheme - The MGNREGS was introduced in 2005 and notified in February 2006. Its objective was to provide basic livelihood security in rural India amid rising concerns, including farmer suicides.
Addition of Mahatma Gandhi’s Name - The “Mahatma Gandhi” prefix was added to the scheme on October 2, 2009, linking it explicitly to Mahatma Gandhi’s philosophy of village self-reliance and rural empowerment.
Recent Legislative Changes - In December 2025, the Union government introduced a Bill to repeal the MGNREGA and replace it with VB-G RAM G.
Ideological Objection - The main opposition party criticised both the repeal and the removal of Gandhi’s name, arguing that it undermines Gandhi’s vision of Gram Swaraj, which emphasised rural self-sufficiency as central to the nation’s well-being.

Gram Swaraj: Gandhi’s Vision of Village Self-Rule

Across his writings and actions, Mahatma Gandhi envisioned Gram Swaraj as the all-round development and self-reliance of villages.
He believed excessive urbanisation harmed society and that cities had historically exploited villages, draining their resources and vitality.
Critique of Urban-Centric Development
- In a June 23, 1946 writing, Gandhi argued that the growth of cities was “unfortunate for mankind,” stating that the prosperity of cities was built on the exploitation of villages.
- He wanted this flow reversed, so prosperity returned to rural India.
From Thought to Action
- Gandhi’s ideas were reflected in practice.
- His first major satyagraha in Champaran (1917) addressed rural injustice, while Sevagram, the self-sufficient ashram he founded, served as a living experiment in rural self-reliance.
Village Swaraj as a ‘Complete Republic’
- Writing in Harijan on July 26, 1942, Gandhi described Gram Swaraj as a “complete republic”—independent in meeting its basic needs but interdependent with others where necessary.
- Each village, he said, should prioritise growing its own food and cotton for clothing.
Social Equality and Non-Violence
- Gandhi’s Gram Swaraj rejected caste hierarchies and graded untouchability.
- Non-violence, along with Satyagraha and non-cooperation, was to be the moral foundation of village life and governance.
Democratic Village Governance
- Village administration, Gandhi proposed, should rest with a Panchayat of five members, elected annually by adult villagers—men and women alike—forming what he called a “perfect democracy based on individual freedom.”
Equality Between Village and City
- In a November 13, 1945 letter to Jawaharlal Nehru, Gandhi stressed that every individual must have equal rights and opportunities, arguing for parity between villages and cities in India’s social and economic imagination.
- Together, these ideas form Gandhi’s vision of Gram Swaraj—an ethical, democratic, and self-sufficient village-centred model for India’s development.

What Happened to Gandhi’s Gram Swaraj Vision

In the years after Independence, India’s development strategy prioritised urban and industrial growth.
This widened the rural–urban divide and pushed large-scale migration to cities, often resulting in slum settlements and poor living conditions for rural migrants.
Rural Policies, But Limited Transformation
- Rural-focused measures were not absent.
- Reforms such as the abolition of the Zamindari system (though uneven across states) and employment schemes like Jawahar Rojgar Yojana and the Employment Assurance Scheme sought to address rural distress.
- However, their impact was limited in creating sustained rural livelihoods.
Infrastructure Gains Without Social Foundations
- While roads and electricity have reached many villages and improved daily life, quality education and healthcare have lagged.
- Persistent caste-based divisions and limited job opportunities mean migration often remains the best path to upward mobility.
Demographic Change and Migration
- India remains predominantly rural, but the share of people living in villages has declined—from about 82% in 1960 to around 65% today—reflecting long-term migration trends driven by economic necessity.
Missing Push for Rural Entrepreneurship
- Rural entrepreneurship has not received the policy backing needed to generate large-scale employment.
- As a result, villages remain dependent on external job markets rather than becoming self-sustaining economic units.
Decentralisation Without True Devolution
- Although the 73rd Constitutional Amendment gave constitutional status to Panchayati Raj institutions, real self-reliance—as envisioned by Gandhi—has remained elusive.
- Financial, political, and administrative powers largely remain concentrated at higher levels of government.
Mixed Results from Village-Centric Initiatives
- Activists and leaders have attempted grassroots change with mixed outcomes.
- In 2014, PM Modi launched the Sansad Adarsh Gram Yojana, urging MPs to adopt and develop villages.
- However, most MPs showed limited engagement, curbing its impact.
The Core Constraint: Political Will
- Genuine devolution of power continues to depend on the willingness of higher authorities to relinquish control.
- Without this shift, policy measures and funding alone are insufficient to realise village self-rule.
A Lifelong Project
- As Mahatma Gandhi himself acknowledged, building a truly self-sufficient village could take a lifetime.
- For India’s 6.74 lakh villages, his vision of Gram Swaraj remains an unfinished and long-term endeavour.

Source: IE | MG

Gram Swaraj FAQs

Q1: What did Gandhi mean by Gram Swaraj?

Ans: Gram Swaraj was Gandhi’s vision of self-reliant villages with local democracy, economic independence, social equality, and panchayat-based governance forming the foundation of India’s development.

Q2: Why did Gandhi oppose urban-centric development under Gram Swaraj?

Ans: Under Gram Swaraj, Gandhi believed cities exploited villages, drained their resources, and created inequality, arguing that prosperity must return to villages for national well-being.

Q3: How was Gram Swaraj reflected in Gandhi’s actions?

Ans: Gram Swaraj shaped Gandhi’s work in Champaran, his writings in Harijan, and the establishment of Sevagram as a living experiment in village self-sufficiency.

Q4: Why did Gram Swaraj weaken after Independence?

Ans: Gram Swaraj weakened as India prioritised industrialisation and urban growth, widening rural–urban gaps, encouraging migration, and limiting sustained investment in rural livelihoods.

Q5: Why has Gram Swaraj remained unfulfilled despite decentralisation?

Ans: Gram Swaraj remains unfulfilled because genuine financial, political, and administrative devolution has not occurred, with higher authorities reluctant to relinquish control to local institutions.