REWIND

New Delhi, 5 June 2026

ECONOMIC ISSUES TO THE FORE

By Inder Jit

(Released on 14 December 1976) 

Economic issues with particular reference to the problem of prices and production are receiving New Delhi's top priority, notwithstanding the excitement caused by developments in Orissa and West Bengal and the visits of the Hungarian President and other VIP friends from abroad. At Gauhati, the AICC spotlighted the renewed demand for a national wage and prices policy. Mrs Gandhi also addressed a massive workers rally organised by the Assam unit of the INTUC at Jawahar Nagar and gave an inkling of her mind on certain important issues agitating the working class. Following return to New Delhi, the Prime Minister received an INTUC deputation, led by its President, Mr B. Bhagavati, and discussed with it the general labour situation, especially the need for improvement in the system for payment of bonus. Meanwhile, the Finance Minister, Mr C. Subramaniam, has initiated meetings with the labour leaders, top economists and leading industrialists to hear their views on the general economic situation. 

The situation on the price front has been causing concern. This was reflected in Mrs Gandhi's own speeches at Jawahar Nagar. She said that the prices of certain commodities had risen when there was no reason at all for this to happen. She then did some "loud thinking" and added that perhaps the answer lay in deliberate public control on prices and incomes. Mrs Gandhi's remark was not off the cuff. She has, in fact, been keen for some time now to forge a national policy on wages, incomes and prices. But as she and Mr Jagjiwan Ram pointed out at Jawahar Nagar, the subject bristles with any number of difficulties in a country as large and varied as India. The employees of the nationalised banks, the Life Insurance Corporation and the two airlines, IA and AI, for instance, draw high salaries in the national context. Under a national wage policy, either their wages would have to be brought down or those of the others raised. The first alternative would pose many practical problems. But the second is clearly not possible at present. India is in no position to foot the additional wage bill. 

INTUC and its leaders, who were warmly complimented by Mrs Gandhi at Jawahar Nagar for "serving the interest of the workers and standing behind the Congress even in the most difficult times", appreciate the many constraints faced by the Government in coming forward with a national wage policy. They also concede the need to ensure that any policy in regard to limitation on incomes does not in any way hit what is described as the "principal source for capital formation at present in India, namely, the contribution of the individual investor. They are, therefore, willing to wait until such time as the Government is able to evolve a formula which does not affect the all-important individual saving and ensures a minimum rate of growth. However, these leaders are pressing the Government for a fair deal on at least one count: payment of bonus. 

A review of the bonus formula is sought on the ground of the workers’ “magnificent response to the call of Emergency and acknowledgement by the Prime Minister at Gauhati of the good work done by them. ("We have congratulated the workers on their cooperation during the emergency in terms of improved production, especially in the public sector," she said and then significantly added: They rightfully ask what the management is doing in exchange and, frankly, I have not been able to answer that.") The number of man days lost due to strikes has been reduced almost to nil and production has gone up all round, availability of consumer goods has increased. But INTUC and other leaders are bugged by one fear: increasing productivity is not matched by a required increase in the purchasing power of the people. This, it is argued, is all the more so in a situation in which wages have remained, more or less, the same. 

Specifically, the INTUC, as urged by the President of its Assam unit, Mr K.P. Tripathi, former MP and Assam Minister, feels that the payment of bonus should not be linked to "allocable surplus". It is argued that under the existing system a company has "allocable surplus" for distribution as bonus "only when it makes a profit of 30 to 40 per cont". Under the present formula, four charges are first made on profits before allocable surplus is determined. The charges are: a guaranteed return of 8.5 per cent on equity capital, a provision of 6 per cent for the reserve fund, payment of income-tax and, finally, provision for past losses. It is pointed out that in the case of tea plantations, for instance, no allocable surplus is available even where profits have totalled Rs 2 crores or more. Allocable surplus is available only where profits are more than 35 per cent. Not unoften, there is insufficient "allocable surplus" even to pay the minimum statutory requirement of four per cent, causing not a little hardship to the workers, 

Happily, there is no adamant insistence that bonus should be linked to profit and profit alone. INTUC leaders would be equally pleased if bonus is linked to production or productivity instead of to profit-sharing. Indeed, INTUC and its affiliates are increasingly seeking a link with productivity. But, as Mr Bhagavati told the Prime Minister, the response from the managements has been far from positive. In some cases, even such managements as had agreed in the past to link bonus to production had dragged their foot, taking shelter under the formula of prior changes and the law. This law as it stands today provides for the payment of bonus on the basis of productivity only if a management agrees. The INTUC would, therefore, like the Government to provide for a tripartite agreement (the Government being the third party) or to lay down that whenever workmen demand payment of bonus on productivity, it should be made obligatory on the part of the employers to accept the basis and negotiate in good faith. 

Two other interesting points have been advocated in this context for New Delhi's consideration. First, it is stated that in multi-unit companies bonus is not being given to workmen even in units which have earned substantial profits on the ground that the overall company's balance sheet and profit and loss account do not permit payment of any bonus, at present, whether the bonus is to be unit-wise or industry-wise is left to the employer. This, according to the case argued before the authorities, should be changed and the choice left to the workers. Second, INTUC leaders have conveyed their gratitude to the Prime Minister for amending the Constitution to include in the Directive Principles of State Policy the worker's right to participate in the management of Industries. But they have also argued that if the workers are to participate in management intelligently and effectively they should be enabled access to all financial and other economic information pertaining to the undertaking. 

Mrs Gandhi and her colleagues are, no doubt, anxious to ensure a fair deal to the workers. At Jawahar Nagar, she not only voiced her concern over the welfare of workers but went one step further to cast a specific responsibility on Government-appointed Directors in companies. She said it was their duty to protect the workers interest in those companies, besides ensuring that these companies carried out Government policies and programmes. Referring to the demand for the repeal of the "iniquitous" allocable surplus formula for bonus, she also significantly remarked: "One thing which has to be done is to ensure proper accounting by companies”. At the same time, however, there is no question of the Government allowing itself to be stampeded into doing anything against its better judgment. First, Mrs Gandhi candidly told the workers' rally in Gauhati that they must "bear in mind that they will not benefit from more increase in bonus and wages if prices go up and the value of rupee falls." More important, she declared that while the Government was committed to the workers welfare it had to see that the country's "economic boat" did not sink.---INFA. 

(Copyright, India News and Feature Alliance)

Round The World

New Delhi, 4 June 2026

India & The World

THE MYANMAR TEST

By Dr. D.K. Giri

(Prof. International Relations, JIMMC) 

Why Min Aung Hlaing, President of Myanmar chose Delhi as his first visit and what India must do next? Admittedly, in diplomacy, the first visit of a Head of State matters. It tells you who a leader trusts, fears or needs. At the same time, it can also be a confidence trick. 

On Monday last, Myanmar’s President landed in New Delhi. As said, it was his maiden visit since assuming office in April this year. He did not choose Beijing, nor Bangkok but Delhi. Why? And what should New Delhi do with this trust? 

I pondered over this question since his visit. Because Myanmar is just not another neighbour. It shares 1,643 km long borders with India and presents a test of India’s foreign policy; a test of geography, history, democracy and something I call ‘strategic maturity’ – the courage to act in our national interest without losing our national character. Let me explain. Why Delhi was his first port of call? 

There could be three possible reasons, all practical. First, security: Myanmar’s territory touches our troubled North-East – Nagaland, Manipur, Mizoram and Arunachal Pradesh.  Insurgent groups have camps across the border: arms flow, so do drugs and refugees. President Hlaing knows this. So, he came with a promise: “We will not allow Myanmar’s soil to be used against India’s security interest”. The statement was delivered in Hyderabad House, and it matters. 

India has been Myanmar’s quiet partner on counter-insurgency for 20 years: Operation Sunrise, intelligence sharing, and border fencing. No other country gives Myanmar that kind of help. China gives roads and loans, whereas India gives joint patrols. In a region where guns speak louder than talks, that counts. 

The second reason could be connectivity. Two Indian projects are stuck in Myanmar for a decade. The Kaladan Multi-Modal Transit Transport Project – to link Kolkata with Mizoram via Sittwe Port, and the India-Myanmar-Thailand Trilateral Highway – our gateway to ASEAN. Both are 80 per cent done. Both need Myanmar’s political push to finish. Hlaing’s visit was also a signal, “we will unlock them”. For India, this is not charity. This is our Act East Policy on Wheels. Without Myanmar, we cannot reach South-East Asia by land. 

Third: balance: China has entered the Myanmar theatre in a big way. Twenty-one billion USD is invested in projects under the China-Myanmar Economic Corridor. Kyaukpyu Deep-Sea Port is also financed by China. Beijing is supporting oil and gas pipelines to Yunnan, as well as in arm sales, political cover at the UN. 

Myanmar knows dependence is dangerous. So, every Myanmar leader, even from the military, keeps one window open to India. It is a balance. Hlaing’s Delhi visit tells Beijing, “We have options”; and it tells Washington, “Do not lecture us”. So, he came, not for love, but for leverage. Every country, for the sake of independent foreign policy, seeks to balance rival powers. India does it in the name of multi-alignment. So could Myanmar. 

Let us recall the weight of history of India-Myanmar relations. India and Myanmar are no strangers. We share Buddhism, tea, and Tagore. General Aung San, father of Aung San Suu Kyi, studied at Shanti Niketan. U Thant, the Burmese UN Secretary-General, was a friend of Nehru. In 1948, India was the first to recognise Myanmar’s independence. In the 1950s, we were both leaders of the Non-Aligned Movement. Our peoples crossed the border for weddings, funerals, and festivals. 

This history gives India something China cannot buy -- trust at the village level. When a bridge is built by India, people say “Delhi helped”. When it is built by China, they ask “how much is the debt?” But history is not policy. Sentiment will not stop a Chinese submarine in Kyaukpyu. For that, we need strategy. 

So, let us deal with the China factor. Let us be clear. India cannot remove China from Myanmar. The border is 2,200 km long. The trade is 12b USD. The pipelines are already pumping. So, our aim is not to compete Rupee for Yuan. Our aim should be to ensure Myanmar does not become a Chinese colony that threatens us. How do we secure this aim? 

Three possible moves may be proffered. First, finish what we started. Speed is strategy. Every month Kaladan is delayed, Sittwe Port looks more Chinese. India must put money, men, and monitors on the ground. Create a special PMO Cell for Myanmar’s projects. Review weekly. If we deliver roads, power, and ports, Myanmar’s army will have a reason to call Delhi. 

Second, play to our strengths. As China builds hard infrastructure, India can build soft infrastructure – IT, pharma, education, democracy training. Give 1000 scholarships to Myanmar’s students. Train their civil servants, especially in E-Governance. A Myanmar officer who studied in one of IIMs is less likely to sign a secret deal with Beijing. 

Third, talk to all, tilt to India. We must engage the junta on security and connectivity. But we must also keep the communications lines open with a democratic forces, civil society, and ethnic groups, quietly, not with a megaphone. The US can preach. India must practice sampark with all, samarthan for India (relate to all, secure support for India). This is diplomacy in action – we deal with the government of the day, but we never burn bridges with the people of tomorrow. 

It is true that New Delhi faces the democracy dilemma in Myanmar which puts principles versus national interest. The question is, should India support democracy revival in Myanmar, even if it costs us? Many in the West say yes. They want India to sanction the junta, like America does. They quote our democratic values. But, let it be said, values without geography are a lecture. Values with geography is a policy. 

Here is the ground reality. If India backs off, China fills the vacuum in 24 hours -- more arms, more ports, more surveillance on our North-East. The refugee flow into Mizoram and Manipur will double. Insurgents will get new sponsors. And the people of Myanmar still will not get democracy – they will just get a Chinese one. 

So, Myanmar tests India’s statecraft. Every neighbour of India poses a different challenge. Pakistan tests our patience; China tests our power; and Myanmar tests our balance. Can we secure our borders without becoming a bully? Can we compete with China without copying China? Can we stand for democracy without sacrificing our security interests? 

Myanmar’s President’s visit gave us a chance to answer these questions. They are: India will work with whoever governs Myanmar, to secure our North-East, complete our connectivity, and prevent the Indian Ocean from becoming a Chinese lake. This is our Neighbourhood First. That is Act East. For India, Myanmar is not a problem to solve. It is a relationship to manage. We do so with history in our heart, geography in our mind and strategy in our hand. ---INFA 

(Copyright, India News & Feature Alliance)

Open Forum

New Delhi, 3 June 2026  

NEET Exam Leak & After

GOVT NEEDS TO BUILD TRUST

By Dhurjati Mukherjee 

The lack of good governance in the country is widely acknowledged. Effective and stringent oversight of public institutions could significantly enhance efficiency and substantially reduce corruption. The recent leak of the National Eligibility-cum-Entrance Test (NEET) examination is yet another example of administrative lapses and inadequate accountability in the management of crucial public processes. In the wake of the controversy, Union Human Resource Development Minister Dharmendra Pradhan has acknowledged responsibility for the incident, highlighting the seriousness of the issue and the need for systemic reforms to restore public confidence. 

At the outset it needs to be emphasised that given the National Testing Agency’s (NTA’s) record in conducting 24 exams by 2024, a parliamentary standing committee in its review of high education bodies in December 2026 laid emphasis on pen-and-paper testing for NEET given that “NTA’s recent performance has not inspired confidence”. 

In fact, the Supreme Court has refused to direct the NTA to conduct re-test of NEET-UG 2026, scheduled on June 21, through a Computer-Based Test (CBT) mode instead of the existing pen-and-paper format.Expressing disinclination to grant the relief, the two-judge bench posted the matter to July, effectively denying the relief for the NEET re-test. 

The decision to make the NEET computer-based test (CBT) does not necessarily imply an online exam equals a safe exam, as per experts, due to the advent of digital fraud. Prof. Suman Chakraborty, Director, IIT-Kharagpur, observed the need for a paradigm shift including “encrypted item banks, last mile question activation, multiple equivalent question sets, AI-enabled anomaly detection, biometric identity verification, jammer-enable centres, and deep-tech surveillance”. Some have suggested conducting NEET twice a year to make it in time for the exam. 

The recent leak of question paper is nothing new as there have been such leaks in 2024 and 2027. In 2019, several candidates used proxies to appear in the NEET after which biometric checks were tightened. However, earlier the leaks were considered localised and did not trigger cancellation of the exam. Having to spend Rs 10-20 lakhs, the question paper could seem like a worthwhile one-time investment if it boosts chances of securing admission to a government college or even a cheaper private college. 

Clearly, the Public Examinations (Prevention of Unfair Means) Act, 2024, enacted to curb question paper leaks and organised malpractices in major recruitment and entrance examinations such as UPSC, SSC, NEET and JEE, has so far failed to serve as an effective deterrent. This is despite the stringent provisions of the law, which prescribe penalties ranging from three to ten years of imprisonment and fines between Rs 10 lakh and Rs 1 crore, depending on the gravity of the offence. The persistence of such scandals suggests that the enormous financial incentives behind these crimes continue to outweigh the fear of punishment, exposing serious shortcomings in enforcement and governance. 

While the number of MBBS seats has increased significantly—from about 51,000 in 2014 to nearly 1.2 lakh today—the number of aspirants appearing for the medical entrance examination has also risen sharply, from around 11 lakh in 2017 to over 22 lakh this year. Consequently, competition for admission remains intense despite the expansion in capacity. 

Earlier, eligibility for appearing in the medical entrance examination required candidates to secure a minimum of 50 per cent marks in their Class XII board examinations. However, this criterion was later relaxed, making a mere pass in the qualifying examination sufficient for eligibility. Critics argue this change has diluted the importance of school education and encouraged an excessive number of candidates to enter an already highly competitive process. 

There is a case for reconsidering the earlier eligibility norms so that only academically prepared students are allowed to take the exam. Some educationists suggest the qualifying benchmark could be restored, or even raised to 60 per cent, in line with minimum standards followed in many government and private sector recruitments. They contend that when a large majority of students routinely score well above 60 per cent in Class XII exams, there is little rationale for permitting every passing candidate to appear for a highly specialised and demanding professional entrance test. Such a measure, they argue, could help reduce the burden on the exam system while reinforcing the importance of school-level academic performance. 

The Supreme Court has been petitioned seeking restructuring or replacement of the NTA, which conducts the NEET. Even Artificial Intelligence (AI) and GPS tracking have proved to be inadequate against organised malpractice. Note, competitive exams exert immense psychological pressure on students due to performance anxiety and other attendant factors and sudden invalidation of the exam has forced lakhs of students back into that cycle. 

This apart, there is an economic cost as well – the coaching centres that students flock to prepare for such tests often charge a high fee. Worryingly, persistent disruptions have eroded confidence in public institutions and deepened anxiety among candidates. 

Insofar as the question of the paper leaks is concerned, can the root be found in the coaching centres that take a lot of money from students? Do they operate with or without the help of influential politicians or their accomplices? Answers are critical. 

This apart, it’s necessary to examine the mental status of students when these exams are deferred. There are reports of students crying uncontrollably, refusing meals, withdrawing socially and staying awake entire nights. The mental agony of students who have prepared for the exam after months of rigorous study needs to be understood and authorities must ensure to spare them this ordeal. 

To sum up, the government must maintain strict monitoring and keep awatchful eye on the flourishing trade of coaching centres, which are behind the paper leaks. The larger question which needs attention is that unless governance in public institutions in the education sector improve, this will have a negative effect on the student community, specially those who aspire for higher education. At least till now, there have not been any major allegations against the UPSC in recruiting IAS, IAAS, IPS and other such officers and it is to be believed that only those who have merit achieve the desired results. But it also needs to be pointed out that many brilliant students from the lower echelons of society do not get a chance because they cannot afford proper coaching. 

Though the education minister announced a set of reforms and a phased transition towards computer-based testing, there is need to delve deep into the core weaknesses of the exam infrastructure. Undeniably, India’s uneven digital infrastructure raises concerns regarding systems failures, connectivity disruptions and unequal access for candidates from rural and economically weaker backgrounds. Thus, to ensure not just free and fair exams and whether NEET should run on the JEE template, it is necessary that facilities are extended to the last student on the street, so that he/she is able to come up in life and compete with his counterparts  in metros and big cities.---INFA 

(Copyright, India News & Feature Alliance)

Economic Highlights

New Delhi, 1 June 2026

Pakora to Petrol Price Trap

INFLATION POLICY-MADE

By Shivaji Sarkar 

Inflation in India is not merely the result of global shocks; it is increasingly a product of high fuel taxes, cesses and pricing policies that amplify costs across the economy. The country’s heavy dependence on petroleum and gas—further entrenched by schemes such as Ujjwala—has made energy prices the trigger for widespread inflation. 

A simple Petroleum Ministry advisory in March warning of tighter commercial LPG supplies was enough to push up the cost of everything from the humble pakora to ice cream, paints and construction materials. Pakora sellers say rising gas prices are compounded by costlier edible oils, commodities and transport, creating a cascading inflationary effect that touches almost every household and business. The pakora costs 40 percent more now. 

India's headline retail inflation rose to 3.48 percent (provisional) in April 2026, driven largely by food and beverage costs. Analysts, including those at ICRA, a Moody’s associate, expect headline figures to harden slightly to around 4.1 percent for May due to rising input and transport costs. It is rising now beyond Reserve Bank of India tolerance limits. 

If people were taxed less on petrol, they would have eventually spent it on other goods, promoting economic growth and government getting paid taxes anyway. That’s the common cry.The fuel policy needs immediate review. But bio fuel ethanol that has high moisture (water) is certainly not the solution. 

In such a scenario, should not the country have reduced petrol prices?  It collected Rs 39 lakh crore through high cess, additional excise duties etc “for funding redemption of approximately of Rs 3.3 lakh crore petro-bonds of regimes since 2002”. There is supposed to be a reserve of Rs 36 lakh crore as the benefit of crude falling below $40 a barrel (155 litre) was never passed on to the OMC. 

From FY2016 to FY2022, Indian OMCs largely benefited from deregulated fuel pricing, healthy refining margins, and relatively stable crude prices, with profits peaking despite pandemic disruptions. In FY2023 they suffered some losses. Profitability rebounded dramatically in FY2024 with combined earnings of Rs 86,000 crore, moderated to Rs 33,602 crore in FY2025 due to LPG subsidies, and recovered to Rs 77,821 crore in FY2026, driven by normal refining margins and gains from lower-cost crude inventories. 

Despite collecting nearly ₹36 lakh crore through fuel taxes and cesses, India has largely relied on market-linked fuel pricing rather than using these revenues to help OMCs stabilize prices. As a result, fuel prices remain higher and more volatile than in neighbouring countries such as Bangladesh and Bhutan, where governments more actively regulate or subsidize fuel to contain inflation. 

Reliance Industries Limited (RIL), which operates the world’s largest refining hub at Jamnagar and its associated petroleum businesses, achieved an annual net profit of Rs 95,754 crore for the financial year ending March 31 (FY26). This represents a 17.8 percent increase year-on-year. The OMCs have to pay higher taxes. Reliance is exempted from some taxes. 

Greedflation, Profits Soar, Workers Lose 

Petroleum prices alone are not hiking market prices. Many sectors like education and health are victims of severe price manipulations often called Greedflation.This refers to the practice of companies using economic disruptions—. such as supply-chain bottlenecks, inflation, or commodity price spikes—not merely to cover rising costs but to expand profit margins by raising prices beyond what costs justify. 

In India, the concept gained prominence during the post-pandemic recovery as concerns grew that some firms were using inflationary conditions to boost profits while consumers faced rising living costs. The debate centres on whether price increases were driven by genuine cost pressures or by growing corporate pricing power and opportunistic profit-taking. 

The correction is difficult for their clout. Data from post-pandemic periods highlighted that the net profits of thousands of listed Indian companies reached historic highs, often multiplying several times over pre-pandemic averages. 

Many have expanded profit margins. Many companies have 22 to 45 percent hike in profits. More than half of the increases in corporate profits are reportedly driven by fatter profit margins rather than expanded sales volume.Unlike traditional cost-push inflation, where rising labour costs drive up prices, the surge in corporate profits was largely decoupled from wage growth. The wages stagnate or even compressed. 

A growing number of economists in the U.S. and Europe argue that recent inflation is increasingly “sellers’ inflation” ,manipulated by firms. The RBI needs to look at high prices charged by dominant firms instead of focusing on higher repo rates only.Listed corporate net profits has soared in 2025. Overall,there is strong evidence of expanding corporate margins during inflationary cycles in India. 

Education

Rising education cost is a quieter and more consequential form of inflation, and not linked to petrol, that India is overlooking. If the engine of India’s growth is its human capital, then the rising cost of building that human capital is not just a household problem, it is a macroeconomic one. 

The Ministry of Education told Lok Sabhaacross India, over 89,000 government schools were closed or merged over the last decade, with UP (25,126) and Madhya (29,400) accounting for more than 60 percent of this total.This has hit families hard as primary education costs zoom for greedy school managements. There are many more similar areas. 

Multiple fuel

NITI Aayog advocates for a technology-agnostic, “multiple fuel policy” to achieve energy security and net-zero emissions, rejecting a strict EV-only approach. And certainly, the ethanol-based bio-fuel with high water content is not the solution. It drastically reduces petrol energy efficiency. Pure bioethanol has about 33 percent less energy per unit of volume than pure petrol, says the U.S. Department of Energy (DOE) and the U.S. Energy Information Administration (EIA). 

The government must stop its use for more than one reasons, including damages caused to the vehicles.India’s energy and inflation control measures are flawed for many reasons.The overall energy policy, its pricing mechanisms and tax structure require a comprehensive review and reformulation. Short-term interventions may temporarily contain inflation, but they often distort markets, shift costs between consumers, producers and the government, and create uncertainty for investment and long-term planning. 

A more durable approach would balance consumer protection with transparent pricing, energy security, fiscal sustainability and incentives for efficiency. Without structural reforms, India risks recurring cycles of price shocks, subsidy burdens and uneven profitability across the energy sector, undermining both economic stability and sustainable growth.---INFA 

(Copyright, India News & Feature Alliance)