1. Domestic Vitality: On Investment Announcements, Policy Implications
UPSC Syllabus Relevance:
- GS-III: Indian Economy and issues relating to planning, mobilization of resources, growth, development and employment. Investment models.
Analysis:
The editorial provides a mixed picture of India’s investment landscape, highlighting a strong divergence between domestic and foreign investor sentiment.
- Domestic Confidence: New project announcements by the private sector have surged to a near 15-month high (₹9.9 lakh crore), overwhelmingly driven by Indian firms, whose share in announcements has intensified to 94%. This domestic vitality is seen as a strong vote of confidence in India’s structural economic prospects, as much of this activity preceded temporary demand boosters like GST rate cuts. Furthermore, the majority of new investments are channeled into the manufacturing sector, a positive signal for industrial growth and job creation. The value of projects actually completed by Indian firms is also at a high.
- Foreign Scepticism: In contrast, the value of project announcements by foreign companies has plummeted to a five-year low, marking the third consecutive year of decline. While global factors like the lingering impact of the COVID-19 pandemic and international trade frictions (e.g., tariff issues with the U.S.) are contributors, the editorial stresses the need for the government to investigate why foreign capital is increasingly looking elsewhere.
- Policy Pressure Points: The analysis points out that with the Central government also signaling a deceleration in its capital expenditure (government project announcements are down 71%) and foreign companies pulling back, the onus to sustain the investment momentum falls heavily on domestic firms. This sharply increases the urgency for the government to push through deep ease of doing business reforms to ensure the announced projects actually fructify and to keep the domestic optimism from waning. The successful conversion of these announcements into reality is crucial to giving the government more fiscal space for essential developmental and defense spending.
2. Changing the Frame: On India, Forecasting and Natural Events
UPSC Syllabus Relevance:
- GS-I: Important Geophysical phenomena (floods, landslides).
- GS-III: Disaster and Disaster Management. Role of various agencies.
Analysis:
This editorial critiques India’s mindset and preparedness for extreme weather events, particularly those related to excess rainfall, despite accurate forecasting.
- The Irony of Bountiful Rain: India received above-normal monsoon rain this year, which is a positive for the agricultural sector (higher kharif crop sowing, increased reservoir levels). However, this abundance was accompanied by widespread destruction, including severe flooding and landslides in regions like Himachal Pradesh, Jammu and Kashmir, and Punjab.
- The Framing Problem: The core of the critique lies in how excess rain is framed psychologically and politically. The India Meteorological Department (IMD) consistently and correctly predicted “above normal” seasonal rainfall. When the damage occurs, it is often dismissed as an unavoidable act of nature (“cloudburst,” or fait accompli), or the correct forecast is celebrated merely as a victory of technology. In contrast, a warning of drought immediately triggers a ‘war footing’ response.
- Failure of Preparedness: The editorial argues that this ‘framing’ prevents adequate preparation for a predictable disaster. The failure to prepare for the adverse impact of excess rainfall should not be seen as a mere consequence of fate, but as an abdication of the government’s responsibility to the public. The government fails to connect the accurate forecast to commensurate preparedness and infrastructure investment (e.g., better urban drainage, flood-resistant infrastructure, and soil management to prevent erosion).
- Way Forward: It is essential for policymakers to change this psychological and administrative frame. Accurate forecasting technology must be seamlessly integrated with proactive disaster resilience strategies, treating warnings of extreme rain with the same urgency as warnings of drought.
