1. TAMIL NADU INTERIM BUDGET PRESENTED AMID FISCAL DISPUTE
SUBJECT: POLITY & ECONOMY
- Interim Budget 2026-27: Finance Minister Thangam Thennarasu presented the Interim Budget for 2026-27 in the State Assembly today, projecting an outstanding debt of ₹10.71 lakh crore by the end of the next fiscal year.
- Fiscal Federalism Challenges: The Minister accused the Union Government of “artificially precipitating” a fiscal crisis in Tamil Nadu by withholding legitimate funds, including ₹3,548 crore under the Samagra Shiksha Scheme and ₹3,112 crore under the Jal Jeevan Mission.
- Revenue Deficit Concerns: The Revenue Deficit for 2026-27 is estimated at ₹48,696 crore, attributed partly to GST rate rationalization carried out without adequate state consultation.
- Debt-to-GSDP Ratio: Despite borrowing plans of ₹1.79 lakh crore, the state aims to maintain a debt-to-GSDP ratio of 26.12%, signaling a push for fiscal discipline despite external constraints.
- Infrastructure Momentum: The budget highlighted that 67% of the work on the Chennai Metro Rail (CMRL) Phase II stretch from Koyambedu to Chennai Trade Centre is complete, though the state continues to bear the Union’s share of costs as debt.
- Concepts: Article 293(3) – Governs the Union’s power to fix borrowing limits for states; Fiscal Deficit vs. Revenue Deficit – Critical metrics for assessing state financial health in a federal structure.
2. INDIA-FRANCE STRATEGIC DIALOGUE & RAFALE DEAL CLEARANCE
SUBJECT: INTERNATIONAL RELATIONS & DEFENCE
- Macron Visit: French President Emmanuel Macron arrived in Mumbai for a three-day visit to attend the India AI Impact Summit and hold bilateral talks with PM Narendra Modi on trade, energy, and critical technologies.
- 114 Rafale Jets: The visit follows India’s landmark clearance to procure 114 Multi-Role Fighter Aircraft (Rafale) under a Government-to-Government (G2G) framework, valued as one of the world’s largest military contracts.
- Year of Innovation: Both leaders launched the “India-France Year of Innovation,” focusing on co-development in green hydrogen, semiconductors, and space exploration.
- Nuclear Energy Cooperation: Discussions advanced on the Jaitapur Nuclear Power Project, aiming to resolve long-standing liability and technical issues to boost India’s carbon-neutral energy goals.
- Indo-Pacific Alignment: Both nations reaffirmed their commitment to a “free and open Indo-Pacific,” focusing on maritime security and counter-piracy operations in the Indian Ocean Region.
- Concepts: Strategic Partnership (1998) – The foundation of Indo-French ties; G2G Agreements – Streamlined procurement processes bypassing traditional multi-vendor tenders.
3. NEW DEFENCE ACQUISITION PROCEDURE (DAP) 2026 UNVEILED
SUBJECT: DEFENCE
- “Owned by India” Doctrine: The Ministry of Defence released the draft DAP 2026, shifting the focus from mere “Make in India” to “Owned by India,” emphasizing domestic ownership of Intellectual Property (IP) and source codes.
- Indigenous Content (IC) Hike: The minimum IC requirement for the Buy (Indian-IDDM) category has been raised from 50% to 60%, mandating deeper technology absorption by domestic firms.
- Tech-Ready Classification: A new system based on Technology Readiness Levels (TRL) was introduced to align procurement with product maturity, allowing faster single-vendor cases for high-TRL indigenous items.
- Fast-Track Procedures: The draft introduces “Procurement Protocols” for rapidly evolving fields like AI, quantum computing, and drones, shortening the traditional 3-year acquisition cycle to under 12 months.
- Software as a Weapon: For the first time, software upgrades are given equal weightage to hardware acquisitions, recognizing the role of digital systems in multi-domain warfare.
- Concepts: Atmanirbhar Bharat in Defence – Policy to reduce import dependency; Intellectual Property Rights (IPR) – Central to technological sovereignty in modern military hardware.
4. TAMIL BRAHMI DISCOVERY IN EGYPT & MADRAS HC AI REFORMS
SUBJECT: NATIONAL ISSUES & TECHNOLOGY
- Archaeological Breakthrough: Inscriptions in Tamil-Brahmi (dating back nearly 2,000 years) were reportedly identified in Egyptian royal tomb regions, providing fresh evidence of ancient maritime trade links between the Tamil coast and the Roman-Egyptian world.
- Superlaw Courts: The Madras High Court officially introduced “Superlaw Courts,” an AI-assisted system designed to automate case scheduling, summarize voluminous records, and assist judges in legal research to reduce pendency.
- NITI Aayog Net-Zero Roadmap: NITI Aayog released a study titled “Scenarios Towards Viksit Bharat,” outlining a roadmap for the Indian agriculture sector to reach Net Zero emissions by 2047 through carbon farming and bio-stimulants.
- Right to Recall Debate: A national discourse on the “Right to Recall” elected representatives gained momentum in the Rajya Sabha, with members debating its feasibility in the Indian democratic framework to enhance accountability.
- PM RAHAT Scheme: The government highlighted the success of the PM RAHAT (Road Accident victim Hospitalization and Assured Treatment) scheme, providing ₹1.5 lakh cashless treatment for road accident victims nationwide.
- Concepts: Maritime Silk Route – Ancient trade connectivity; AI in Judiciary – Ethical and efficiency implications of algorithmic legal assistance.
5. GOLDMAN SACHS UPGRADES INDIA’S 2026 GDP FORECAST
SUBJECT: ECONOMY
- Growth Outlook: Goldman Sachs raised India’s 2026 GDP growth forecast to 6.9% (up from 6.7%), citing lower US tariffs on Indian exports following the recent interim trade deal.
- Trade Deal Impact: The India-US trade agreement, reducing reciprocal tariffs from 25% to 18%, is expected to provide a 0.2 percentage point annual boost to the economy.
- Inflation Targeting: Headline inflation is projected to average 3.9% in 2026, aligning closely with the RBI’s medium-term target of 4%.
- FDI & Infrastructure: Capital expenditure (Capex) is expected to surge in the second half of 2026 as private investment intentions translate into execution, supported by ₹6.3 trillion in recent banking liquidity measures.
- Current Account Stability: The trade deal is also expected to narrow the Current Account Deficit (CAD) to 0.8% of GDP, easing pressure on the Indian Rupee (INR) against the dollar.
- Concepts: Reciprocal Tariffs – Mutually agreed tax rates on imports/exports; Current Account Deficit (CAD) – The difference between a nation’s total export value and total import value.
