Growth push: RBI cuts rate by 0.25%

Lowering India's interest rates for the first time in the last 57 months, the Monetary Policy Committee (MPC) of the Reserve Bank of India unanimously cut the repo rate by 25 basis points (bps) to 6.25%, to support fading growth in the hope of inflation easing to 4.4% in this quarter and 4.2% through 2025-26. The RBI's policy shift, which may translate into cheaper loans for homes, cars and other purposes, comes within a week of the Union Budget for 2025-26 that seeks to drive growth by stimulating urban demand with income tax breaks worth ₹1 lakh crore. The repo rate is the rate at which the RBI lends to other banks, and one basis point equals 0.01%. This is the first repo rate cut since the early days of the CO-VID-19 pandemic, when the RBI made a 40 bps cut to 4% in May 2020 and held it there for a couple of years. Since 2022, the repo rate has been on the rise. 

India's voice must resonate in global AI conversations

AI is reshaping industries, economies, and geopolitics, transcending national borders with data, algorithms, and innovations flowing seamlessly across regions. In this interconnected landscape, effective governance and safety mechanisms require a unified international approach. For India, participating in global standard-setting on Al safety is not just an opportunity but an imperative. But, India has not even established a national AI safety institute.

India's participation in such global discussions is not just desirable but essential. As one of the world's fastest adopters of AI, with an adoption rate of 30%, significantly higher than the global average of 26%, according to a recent Boston Consulting Group (BCG) report, India stands at the forefront of leveraging AI for transformative change across sectors such as health care, finance, agriculture, and logistics. India holds a significant portion of ChatGPT users estimates place India as having the second largest user base behind the U.S., with around 10% of global ChatGPT users from India. A recent survey ranked India first among the percentage of consumers using ChatGPT. Clearly, we are major adopters of AI.

Technology and the challenge of equitable education

In India, the 1990s and the early 2000s were a time of education activities on a mass scale. But results from the nationwide Annual Status of Education Report (ASER) surveys of that period indicated that while enrolment and infrastructure indicators showed a rush to schools, learning indicators pointed to no change. In 2018, nearly 90% of rural households had simple mobile phones and 36% had smartphones. In 2022, the proportion of households with smartphones had risen to over 74% and, according to ASER 2024, it has grown further to 84% this year. While the percentage of children who have access to a smartphone at home is nearing saturation, the proportion of children aged between 14 and 16 years who own a smartphone has risen from 19% to about 31% within a year.

Cabinet nod to rejig skilling initiatives with a combined scheme

The Union government has decided to restructure its skilling initiatives, combining three of them into the Skill India Programme, a Central Sector scheme, with the Cabinet on Friday approving an outlay of ₹8,800 crore for a three-year period ending in 2025-26. The Pradhan Mantri Kaushal Vikas Yojana 4.0 (PMKVY 4.0), the Pradhan Mantri National Apprenticeship Promotion Scheme (PM-NAPS), and the Jan Shikshan Sansthan (JSS) Scheme will now become the three key components of the composite Skill India Programme. These initiatives aim at providing structured skill development, on-the-job training, and community-based learning, ensuring that both urban and rural populations, including marginalised communities, have access to high-quality vocational education, according to an official statement. 

Nine submarines, 65 ships taking part in TROPEX exercise

Indian Navy's biennial capstone Theatre Level Operational Exercise (TROPEX) is under way in the Indian Ocean Region, in which the combined fleet, comprising approximately 65 Indian Navy ships, nine submarines, and over 80 aircraft, are being "put through complex maritime operational scenarios to validate and refine the Navy's Concept of Operations". This is conducted biennially with participation by all operational units of the Navy along with participation of Army, Air Force, and Coast Guard assets. 

New Income Tax Bill gets approval from Union Cabinet

The Union Cabinet approved the new In-come Tax Bill, which will replace the six decades old I-T Act. The new Bill seeks to make direct tax law simple to understand and not to impose any new tax burden. It will not have provisos and explanations or long sentences. The Cabinet, chaired by Prime Minister Narendra Modi, approved the new Bill. Sources said the new Income Tax Bill will now be introduced in the Parliament next week and sent to Parliament's Standing Committee on Finance. Finance Minister Nirmala Sitharaman had announced in the Union Budget that the new Tax Bill will be introduced in the ongoing session of Parliament. 

Centre holds consultation with States on setting up biomanufacturing facilities

Following the approval of the Biotechnology for Economy, Environment and Employment (BioE3) policy by the Union Cabinet last August, the Department of Biotechnology organised a consultation with States here to setting up biomanufacturing facilities in their regions. Biomanufacturing refers to the industrial manufacture of a variety of products relating to high-value bio-based chemicals, biopolymers and enzymes; smart proteins and functional foods; precision biotherapeutics and climate resilient agriculture. The road map to achieving this will involve establishing 'State-centric BioE3 cells', formulating State-centric BioE3 action plans, constituting State-level steering committees, appropriate working groups and nodal officers and setting up Bio-Al hubs, foundries and manufacturing hubs. Several States made presentations on their efforts at promoting biotechnology industries.

Budget's focus on vegetables, fruits and pulses is a positive for inflation: RBI Governor

Reserve Bank of India Governor Sanjay Malhotra, in a briefing after unveiling the latest monetary policy, said the rate-setting panel unanimously felt this was the time to support growth with inflation worries easing a bit. Edited excerpts: was taken into account while making all our projections. We also do various sensitivity analyses while making our projections. The exchange rate is a matter of demand and supply. We should really not be looking at day to day kind of a volatility. It is more the long-term rate that we should be looking at, not only for the rupee, but also for other asset classes like the Sensex or Nifty, or gold prices or other asset prices. The Budget is an excellent one, both from the growth and inflation perspectives. The fiscal deficit has been curtailed at 4.4% of GDP, even below the indicated glide path rate of 4.5% of GDP in 2025-26. Also, 46% of the Consumer Price Index (CPI) basket comprises of food.