AN ENGELS’ PAUSE IN AN AI-SHAPED WORLD
TOPIC: (GS3) SCIENCE AND TECHNOLOGY: THE HINDU
Nobel Laureate Geoffrey Hinton recently warned that Artificial Intelligence (AI) could make a few people very rich while making most others poorer.
What are Engels’ Pause?
- Term by economist Robert Allen, named after Friedrich Engels.
- Refers to 19th-century Britain, when industrial output grew rapidly but workers’ wages stagnated and inequality widened.
- Improvements in living standards came only decades later, after reforms and institutional changes.
AI and the Modern Engels’ Pause
- AI is a General-Purpose Technology (GPT) like steam, electricity, or the internet — with potential for transformation but also short-term inequality.
Productivity vs. Wages
- AI tools (e.g., in call centres) improve productivity by 30–50%.
- Yet workers’ wages remain stagnant, and cost of living continues to rise.
- Workers feel poorer despite technological gains — a key sign of an Engels’ pause.
Rising Cost of Complements
- AI success needs cloud services, retraining, data, and cybersecurity.
- These are costly — making it expensive for workers to stay relevant.
- Similar to how higher wages in 19th century were offset by higher food prices.
Unequal Gains and Global Inequality
- AI could add $15.7 trillion to global GDP by 2030, but benefits will be concentrated in few countries and big firms.
- 40% of jobs globally face AI exposure, with advanced economies more affected.
- Inequality may deepen before welfare improves.
Job Displacement and Task Shifts
- AI reshaping sectors like health, education, finance, and public services.
- Some roles are transformed, others replaced — creating uncertainty for workers.
Policy Measures Needed
Skill Transition Programmes
- Example: Singapore’s SkillsFuture — continuous reskilling for workers.
- Institutions like MBZUAI (Abu Dhabi) focus on AI-specific education.
Redistribution of AI Gains
- Through robot taxes or Universal Basic Income (UBI) experiments.
- Aim: share productivity gains widely.
AI Infrastructure as Public Good
- Ensure affordable compute, data access.
- Open AI models (like K2Think.ai, Apertus) are steps toward equitable access.
Challenges
- Today’s welfare systems are stronger, but AI inequality may grow faster.
- Without governance and policy, benefits will remain limited to elites.
Conclusion
AI can trigger an Engels’ pause if growth benefits only a few. Governments must ensure inclusive innovation, reskilling, and redistribution so that AI becomes a human welfare revolution, not just a productivity one.
MAIZE CLUSTERING AND INSECT RESISTANCE STUDY
TOPIC: (GS3) ENVIRONMENT: THE HINDU
A new study published in science by researchers from Zhejiang University (China), along with found that clustering maize plants closely improves natural insect resistance through plant communication using linalool.
Background
- Maize is one of the world’s most widely grown grains, vital for food, animal feed, biofuel, and industrial products.
- However, monoculture farming makes maize highly vulnerable to pests and diseases.
- Climate change may further reduce maize productivity by up to 24% by the late 21st century under high-emission scenarios.
Key Findings of the Study
- Crowded Fields Improve Defence: Maize plants grown in dense clusters emit more linalool, a natural volatile compound, when attacked by insects. This chemical signal alerts neighboring plants to activate their defence mechanisms.
- How It Works
- Step 1: Insect attack triggers linalool release.
- Step 2: Neighboring plants detect linalool and activate jasmonate signalling (a stress-response pathway).
- Step 3: Plants release HDMBOA-Glc into soil.
- Step 4: This metabolite enriches beneficial soil bacteria, which trigger salicylic acid signalling in nearby plants.
- Result: Broad resistance to insects, nematodes, fungi, and viruses.
- Experimental Evidence
- Linalool-deficient maize mutants failed to develop this resistance.
- Applying synthetic linalool restored defences, confirming its key role.
- Trade-off
- Plants in high-density fields gain better pest resistance, but grow slower and produce less biomass — showing a growth-defence trade-off.
Significance
- Provides a natural, chemical-free pest management method.
- Reduces dependence on pesticides and supports sustainable agriculture.
- Helps farmers manage pest threats based on local conditions.
Future Applications
- Breeding Programs: Identify maize varieties more responsive to linalool signalling using genomic markers and reporter genes.
- Precision Farming: Farmers can apply linalool externally when pest threats rise, or disable it when pest pressure is low to improve yield.
- Policy Relevance: Supports Integrated Pest Management (IPM) and climate-resilient agriculture under SDG-2 (Zero Hunger).
Agricultural & Climatic Requirements of Maize
Feature | Requirement / Preference |
Temperature | Generally, grows best at 21-27°C. Sensitive to frost; excess heat especially during flowering can reduce yields. |
Rainfall | Needs 500-1000 mm (50-100 cm) during growth period; drought stress reduces yield, but also doesn’t tolerate waterlogging. |
Soil | Well-drained soils: alluvial, loamy, red loamy; pH around 5.5 to 7.5. Fertile soils with good moisture retention are good. |
Altitude | Can be grown from sea level up to about 3000 m above mean sea level, depending on variety. |
Season | Three main seasons: Kharif (main season), Rabi, and sometimes Summer (Zaid). Yields vary by season. |
CHHATTISGARH’S FIGHT AGAINST NAXALISM AND DEVELOPMENT IN BASTAR
TOPIC: (GS3) SEQURITY: THE HINDU
Chhattisgarh Chief Minister Vishnu Deo Sai stated that Naxalism in Bastar has been largely eliminated due to strong security operations and government efforts.
Background
- Bastar region in southern Chhattisgarh has long been a Naxal (Maoist) stronghold, hampering development and governance.
- The new “double-engine government” (Centre + State) aims to combine security measures with development initiatives.
Naxalism: Progress in Elimination
- Intensive Security Operations: Over the last 19–20 months, several top Maoist leaders have been neutralised. Regular recovery of weapons shows operational success.
- Central Support: Prime Minister and Home Minister set a target to eradicate Naxalism by March 2026.
- Dialogue Still Open: Government invites Maoists to surrender and join mainstream development. A rehabilitation policy is being prepared for those giving up violence.
Development Vision for Bastar
- Tourism Promotion: Bastar’s natural beauty and tribal culture to be developed as a tourist hub.
- Agriculture & Dairy Focus: Support for tribal farmers and dairy cooperatives to boost local economy.
- Industrial Investments: State received ₹7 lakh crore proposals through investor meets in India and abroad. Aims to create employment and infrastructure growth.
Religious Conversion Law
- Upcoming Legislation: A strict law on religious conversion to be tabled in the winter session.
- Objective: To prevent forced conversions based on poverty, illiteracy, or inducements. Individuals will need to seek official permission before conversion.
- Government’s Stand: Law protects voluntary choice, does not restrict religious freedom.
Government Security Forces Fighting Against Naxalism in India
- COBRA (Commando Battalion for Resolute Action): Elite force under CRPF specialized in anti-Maoist operations. Trained in guerrilla warfare, jungle combat, and intelligence-based operations.
- Special Task Force (STF): State-level elite police units in Naxal-affected states. Conduct targeted operations, raids, and rescue missions in coordination with central forces.
- Greyhounds: Elite anti-Naxal force in Andhra Pradesh and Telangana. Known for swift hit-and-run operations in forested terrains.
- Local Police & District Reserve Guard (DRG): Involves trained local tribal personnel familiar with terrain. Supports central forces in intelligence gathering and community policing.
NAXAL MOVEMENT
Origin and Ideology
- Began in 1967 at Naxalbari, West Bengal, led by radical communist leaders demanding land reforms.
- Advocates armed struggle against the state to overthrow the existing system, inspired by Maoist ideology.
- Initially focused on landless peasants and tribal rights, later expanded to broader anti-state activities.
Spread and Evolution
- 1970s–80s: Spread to Jharkhand, Chhattisgarh, Odisha, Andhra Pradesh, Bihar, Maharashtra, and Telangana.
- 1980s–90s: Formation of CPI (Maoist) and consolidation of various left-wing extremist groups.
- Strategy shifted from localized peasant revolt to organized guerrilla warfare targeting police, government installations, and infrastructure.
Hotspots Today
- Red Corridor: Main Maoist-affected region across Chhattisgarh, Jharkhand, Odisha, Bihar, Maharashtra, Telangana, and West Bengal.
- High-intensity states: Chhattisgarh (Bastar), Jharkhand (Palamu, Latehar), Odisha (Malkangiri), Maharashtra (Gadchiroli), Telangana (Sukma).
Conclusion
Chhattisgarh is combining security, dialogue, and development to transform Bastar. Focus on peace, investment, and inclusive growth marks a shift from conflict to prosperity.
INDIA’S REALIGNMENT WITH THE GLOBAL SOUTH AT UNGA
TOPIC: (GS2) INTERNATIONAL RELATIONS: THE HINDU
During the 80th UN General Assembly (UNGA) High-Level Week, External Affairs Minister S. Jaishankar emphasized India’s stronger engagement with the Global South.
India’s Engagement at UNGA 2025
- EAM Jaishankar held ~30 bilateral meetings, more than half with developing nations.
- India participated in multiple Global South groupings: BRICS, IBSA, India–CELAC, India–SICA, FIPIC, L-69, C-10, and the Like-Minded Global South group.
- These meetings discussed trade barriers, energy security, conflicts, and UN reforms.
Key Highlights
Position on Gaza
- India backed statements by BRICS and IBSA condemning Israel’s continued attacks on Gaza.
- Shift from earlier neutral stance to stronger humanitarian alignment with Global South.
Trade and Tariff Issues
- U.S. imposed 50–100% tariffs on Indian goods and pharma products, causing strain in bilateral trade talks.
- India criticized non-market trade practices and tariff volatility affecting developing economies.
Focus on Global South
- India reiterated its role as a “leading voice of the Global South”, raising issues like:
- Energy and food security
- Climate finance
- Fair market access
- Reforms in global institutions
Call for UN Reforms
- India’s priority paper highlighted the stalled UN Security Council reform, urging faster progress for equitable representation.
UN GENERAL ASSEMBLY (UNGA)
Overview
- Founded: 1945 (under the UN Charter)
- Members: 193 countries (including India – a founding member)
- Meetings: Annual session in September (New York)
- Decision-making: Each member has one vote; resolutions are non-binding but carry political weight.
Functions
- Discusses global peace, security, development, human rights
- Approves UN budget, elects non-permanent UNSC members
- Provides a platform for multilateral diplomacy and consensus building
India’s Role
- Active since 1945; advocates for:
- Reformed multilateralism
- Voice of developing nations
- Peacekeeping contributions
- Climate action and SDGs
UNGA and Multilateralism
- Promotes collective decision-making and global cooperation.
- India uses UNGA to highlight issues of Global South, equity, and reform.
- Serves as a platform to balance North-South divide.
Conclusion
India’s approach at UNGA 2025 shows a strategic realignment with developing nations, reaffirming its leadership role in the Global South and push for a fairer global order through reformed multilateralism.
ANALYSING INDIAN STATES’ MACRO-FISCAL HEALTH
TOPIC: (GS3) ECONOMY: THE HINDU
The CAG’s decadal report on State finances shows rising debt and uneven fiscal strength across Indian States.
Background
- Indian States handle major spending responsibilities in health, education, and welfare, often exceeding Union government expenditure in these sectors.
- Fiscal stability at the State level is key for inclusive growth, development, and financial federalism.
Key Findings of the CAG Report
Uneven Revenue Capacity
- States differ widely in internal revenue generation:
- Maharashtra generated 70% of receipts internally (2022–23).
- Arunachal Pradesh only 9%, and Uttar Pradesh just 42% (rest through Union transfers).
- This reflects vertical fiscal imbalance — richer States self-reliant; poorer States dependent on the Centre.
Volatile Income Sources
- Some States rely on uncertain revenues:
- Kerala from lotteries (₹12,000 crore).
- Odisha from mining royalties (90% of non-tax income).
- Telangana from land sales (₹9,800 crore).
- Such sources are temporary and unsustainable.
Borrowing and Debt Trends
- Pandemic years saw sharp rise in borrowings due to revenue loss and higher spending.
- Andhra Pradesh tripled borrowings to ₹1.86 lakh crore; Bihar doubled; Rajasthan quadrupled.
- High debt burdens:
- Punjab (~45% of GSDP),
- Kerala (~37%),
- Bihar (~39%),
- Manipur–Nagaland–Mizoram (40–60%).
- Low-debt performers: Odisha (15%), Gujarat (20%), Maharashtra (20%).
The Welfare Paradox
- Some surpluses are misleading — achieved through central transfers, off-budget loans, or deferred liabilities.
- Many States underspend on welfare despite surpluses.
- Heavy borrowing for populist schemes (free power, waivers) increases fiscal stress.
- Welfare expansion coexists with weak revenue base, leading to a fiscal illusion of prosperity.
Key Concerns
- Fiscal imbalance and rising debt threaten long-term sustainability.
- Overdependence on Centre and volatile income reduces autonomy.
- Welfare populism vs. fiscal prudence dilemma persists.
MACRO AND MICRO FISCAL INDICATORS
Macro Fiscal Indicators (State or National Level)
- Revenue Receipts: Total income collected by the government through taxes (GST, income tax) and non-tax sources (fees, dividends).
- Expenditure: Total government spending on development, subsidies, welfare, and administration.
- Fiscal Deficit: The gap between total expenditure and total revenue (excluding borrowings).
- Debt-to-GDP Ratio: Measures government borrowings relative to the size of the economy.
- Revenue Surplus/Deficit: Difference between revenue receipts and revenue expenditure.
- State Dependency Ratio: How much a state depends on central transfers vs. own revenue.
Micro Fiscal Indicators (Specific Programs, Departments, or Local Level)
- Per Capita Expenditure: Government spending per person in a state or district.
- Sectoral Spending: Budget allocation to sectors like health, education, agriculture.
- Utilization of Funds: How efficiently allocated funds are spent on intended projects.
- Local Debt Levels: Borrowings by municipal bodies or local governments.
- Return on Investment (ROI) of Projects: Benefits gained compared to cost in local schemes.
Measures by Government of India to Stabilize Macro Fiscal Indicators
- Prudent Fiscal Management: Maintain fiscal deficit within the targets set under the Fiscal Responsibility and Budget Management (FRBM) Act.
- Revenue Enhancement: Expand tax base through GST, direct tax reforms, and Mobilizing non-tax revenues like dividends from public sector enterprises.
- Debt Management & Borrowing Strategy: Diversify sources of borrowing (central loans, market instruments) to avoid excessive reliance on a single source.
Conclusion
India’s States face a fiscal tightrope — balancing development spending with limited revenue capacity. True fiscal health requires strong internal revenue, rational expenditure, and transparent borrowing, ensuring that welfare gains are backed by sustainable finances.
THE RISE OF INDIA’S HOME-GROWN MUTUAL FUND INVESTORS
TOPIC: (GS3) ECONOMY: THE HINDU
Even as Foreign Portfolio Investors (FPIs) continue to withdraw from Indian markets, domestic investors, especially through mutual funds, have helped maintain market stability.
Background
- Foreign Portfolio Investors (FPIs): Invest in stocks/shares of another country (e.g., India).
- Domestic Institutional Investors (DIIs): Indian entities such as mutual funds, insurance firms, and banks investing in the local market.
- Among DIIs, Domestic Mutual Funds (DMFs) have emerged as a major driving force in India’s equity market.
Key Trends
Ownership Patterns
- FPI share in NSE-listed companies (non-promoter holdings) at 17.3% — a 13.5-year low.
- DMF share at a record 10.3%, showing a steady rise in domestic participation.
- Though FPIs still hold a larger share, domestic self-reliance is strengthening.
Growth of SIPs (Systematic Investment Plans)
- SIP accounts grew from 1.41 crore (FY21) to 6.8 crore (FY25).
- SIP Assets Under Management (AUM) rose from ₹4.27 trillion to ₹13.35 trillion.
- SIPs allow small, regular investments (starting from ₹1,000/month), encouraging disciplined investing.
Changing Household Savings Pattern
- Households still prefer bank deposits and insurance, but mutual fund share has grown from 0.9% (2011–12) to 6% (2022–23) of gross financial savings.
Regional and Gender Diversity
Rise in Tier-2 & Tier-3 Cities
- Share of mutual fund AUM from non-metro cities rose from 20% (2015) to 40% (2025).
- Every state saw a 100%+ rise in demat accounts; Bihar and UP recorded 400%+ growth.
Women Investors
- 1 in 4 mutual fund investors is a woman (around 25% since FY16).
- Indicates growing financial participation and literacy among women.
Drivers of Growth
- Increase in demat accounts (from 3.8 crore to 11.8 crore between 2020–24).
- Low fixed deposit rates pushing investors toward market-linked options.
- User-friendly digital platforms and financial inclusion initiatives.
Significance
- Strengthens domestic financial resilience amid global uncertainty.
- Promotes inclusive financial growth through small investments.
- Reduces over-dependence on foreign capital.