Current Affairs

IMF upgrades India’s growth projection for current financial year from 6.6% to 7.3%

Context: The International Monetary Fund (IMF) has revised upwards its estimate of India’s Gross Domestic Product (GDP) growth in the current financial year 2025-26 to 7.3% from its earlier prediction of 6.6%.

• This upward revision, the IMF said in its January 2026 World Economic Outlook update released on Monday, was primarily a reflection of stronger-than-expected growth in the third quarter, and “strong momentum” in the fourth quarter of the financial year.
• “In India, growth is revised upward by 0.7 percentage point to 7.3% for 2025 [FY 2025-26], reflecting the better-than-expected outturn in the third quarter of the year and strong momentum in the fourth quarter,” the report said. “Growth is projected to moderate to 6.4% in 2026 and 2027 as cyclical and temporary factors wane,” it added.

Slower figure

• The IMF’s prediction of 7.3% growth for 2025-26 is just marginally slower than the 7.4% the Union government predicted for the same period.
• For the global economy, the report projects growth to remain “resilient” at 3.3% in calendar year 2026 and at 3.2% in 2027, largely the same as the 3.3% estimated for 2025.
• These forecasts entail a small upward revision for 2026 and no change for 2027 as compared with the predictions made in the October 2025 World Economic Outlook. “This steady performance on the surface results from the balancing of divergent forces,” the report said.

Turbulent times

• “Headwinds from shifting trade policies are offset by tailwinds from surging investment related to technology, including artificial intelligence (AI), more so in North America and Asia than in other regions, as well as fiscal and monetary support, broadly accommodative financial conditions, and adaptability of the private sector.”
• On the inflation front, the report predicted that inflation in India is expected to go back to near-target levels after a decline in 2025 driven by subdued food prices. The Reserve Bank of India’s target for inflation is 4%.

Include digital currency link on BRICS agenda: RBI to govt.

Context: The Reserve Bank of India (RBI) has recommended to the Centre that a proposal connecting the central bank digital currencies (CBDCs) of BRICS countries be included on the agenda for the 2026 summit of the grouping, two sources have said.

• The proposal seeks to make cross-border payments easier, in a move that could reduce reliance on the U.S. dollar as geopolitical tensions rise. The RBI’s recommendation builds on a 2025 declaration at the BRICS summit in Brazil, which pushed for interoperability between members’ payment systems to make cross-border transactions more efficient.
• The RBI has publicly expressed interest in linking India’s digital rupee with other nations’ CBDCs to expedite cross-border transactions and bolster its currency’s global usage. It has, however, said its efforts to promote the rupee’s global use are not aimed at promoting de-dollarisation.
• India will host the next BRICS summit later this year. If the RBI’s recommendation is accepted, a proposal to link the digital currencies of BRICS members would be put forward for the first time. The BRICS includes Brazil, Russia, India, China, and South Africa, among others. The initiative could irritate the U.S., which has warned against any moves to bypass the dollar. U.S. President Donald Trump has previously said the BRICS alliance is “anti-American” and he threatened to impose tariffs on its members.
• While none of the BRICS members have fully launched their digital currencies, all five main members have been running pilot projects.
• India’s digital currency — the e-rupee — has attracted a total of 7 million retail users since its launch in December 2022, while China has pledged to boost the international use of the digital yuan.
• The RBI has encouraged the adoption of the e-rupee by enabling offline payments, providing programmability for government subsidy transfers and by allowing fintech firms to offer digital currency wallets.
• The RBI and the central bank of Brazil did not respond to emails seeking comment. The People’s Bank of China said it had no information to share on the subject in response to a request for comment; the South African and Russian central banks declined to comment.
• For the BRICS digital currency linkages to be successful, elements like interoperable technology, governance rules and ways to settle imbalanced trade volumes would be among the discussion topics, one of the sources said.
• The source cautioned that hesitation among members to adopt technological platforms from other countries could delay work on the proposal and concrete progress would require consensus on tech and regulation.
• One idea that is being explored to manage potential trade imbalances is the use of bilateral foreign exchange swap arrangements between central banks, both the sources said.
• Previous attempts by Russia and Indian government to conduct more trade in their local currencies hit roadblocks.
• Russia accumulated large balances of the Indian rupee for which it found limited use, prompting India’s central bank to permit the investment of such balances in local bonds.
• Weekly or monthly settlements for transactions are being proposed to be made via the swaps, the second source said.

Human + AI will define the future of work by 2027: study

• Human + AI will define the future of work and nearly all HR leaders (97%) anticipate that by 2027, the nature of work will be shaped by humans working alongside AI rather than engaging with it only intermittently, showed a Nasscom-Indeed study.
• As per the study, this trend signalled a shift from AI being a supplementary tool to becoming an integral part of everyday roles, workflows and decision-making processes.

Equality in society has to start in school, says Supreme Court

Context: The Supreme Court, in a judgment on Tuesday, said that equality in society had to start in school, where the child of a multi-millionaire or a Supreme Court judge had to sit shoulder-to-shoulder with a child of an autorickshaw driver or a street vendor.

• A Bench headed by Justice P.S. Narasimha elaborated that the obligation of the government under the Right to Education Act (RTE) to ensure that neighbourhood schools admit children belonging to weaker and disadvantaged sections has an “extraordinary capacity to transform the social structure of our society”.
• “The statutory design [of the RTE Act] is normatively ambitious. It envisages elementary education for all children, across the spectrum of class, caste, gender and economic position, in a shared institutional space. It makes it possible, normatively and structurally, for the child of a multimillionaire or even of a judge of the Supreme Court of India to sit in the same classroom and at the same bench as the child of an autorickshaw driver or a street vendor,” Justice Narasimha, who authored the judgment, wrote.
• The top court’s judgment rose from the bitter experience of the petitioner, Dinesh Biwaji Ashtikar, who was quietly snubbed off when he had approached a neighbourhood school to admit his children for free and compulsory elementary education in 2016.
• “It is his case that, even though information through RTI indicated that seats were available, the neighbourhood school did not respond,” Justice Narasimha narrated.
• The judge observed that educating “young India” and achieving “equality of status” demanded an earnest implementation of the constitutional right under Article 21A to free and compulsory education, followed by the statutory mandate of the 2009 Act.

‘National mission’

• “Ensuring admission of such students must be a national mission and an obligation of the appropriate government and the local authority. Equally, courts, be it constitutional or civil, must walk that extra mile to provide easy access and efficient relief to parents who complain of denial of the right,” the Supreme Court declared.