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Savings Slump, Revenue Crunch: CAPEX UP, OPTIMISM EBBS, By Shivaji Sarkar, 17 Sept 2026 Print E-mail

Economic Highlights

New Delhi, 17 September 2026

Savings Slump, Revenue Crunch

CAPEX UP, OPTIMISM EBBS

By Shivaji Sarkar 

By conventional macroeconomic yardsticks, India should enter the financial year 2026–27 (FY27) Budget cycle with a degree of comfort. Growth is expected to remain above 7 per cent, inflation has eased from its post-pandemic peaks, and fiscal consolidation appears broadly on track, with the fiscal deficit projected to narrow to around 4.4 per cent of GDP. On the surface, in a slowing global environment, the economy looks resilient.  

Yet budgets are not written for periods of comfort; they are crafted to anticipate stress. Beneath reassuring aggregates lie deep structural pressures that the FY27 budget cannot afford to overlook—weak household savings, skewed public expenditure, a hesitant manufacturing sector, fragile private investment, external trade risks, and a farm economy mired in low productivity. Stability, in short, risks masking stagnation. Inflation that was contained is again on the rise at 4.5 per cent, the Reserve Bank of India tolerance threshold limit. 

Revenue on Fragile Households

India’s recent revenue performance has benefited from buoyant indirect taxes, improved compliance, and steady nominal growth. Yet the quality of revenue is critical. Net household financial savings fell sharply to approximately 5.2 per cent of GDP in FY24, one of the lowest levels in decades as household indebtedness rose. 

This pattern suggests that tax buoyancy has been sustained in part by households consuming more and saving less. Such a fiscal base is inherently fragile. An economy cannot indefinitely extract revenue from households whose financial buffers are shrinking. The FY27 Budget must, therefore, be cautious about over-reliance on consumption-led revenues and should seek to broaden the tax base—not by deeper penetration into already-stretched household finances, but through formal employment growth and productive investment. 

Expenditure: Capex Heavy, Productivity Light

Public expenditure has leaned heavily on capital outlays since FY21, with central capital expenditure now exceeding Rs 11 lakh crore. This emphasis has helped stabilise growth and strengthen physical infrastructure. However, the composition of spending reveals a growing imbalance. 

Investment in human capital—education, skills, health, and research—lags badly. Education spending has stagnated around 3 per cent of GDP, teacher vacancies remain unfilled, and learning outcomes continue to disappoint. R&D spending has stagnated near 0.7 per cent of GDP, far below thresholds typical of innovation-driven economies. Infrastructure without corresponding investment in human capital risks creating assets the economy cannot fully utilise, weakening long-term returns on public investment. 

In advance of the new budget’s presentation on February 1, the government has raised the GST rate on pan masala, cigarettes, tobacco and similar products to 40 per cent, with biris attracting 18 per cent GST as a revenue-enhancing measure. 

In addition, the railways raised fares twice during the year, yielding about Rs 3,900 crore against a prior surplus of Rs2,517.38 crore in 2022–23. These moves aim to support revenue and contain the deficit, as the IMF has flagged a potential “revenue squeeze” in the central budget.

Manufacturing, Investment: Fragile

Manufacturing remains a weak link in India’s growth, with capacity utilisation still below levels needed to spur large-scale private investment and core industrial demand softening. While Production-Linked Incentive (PLI) schemes have attracted nearly Rs 2 lakh crore in realised investments and generated over 12.6 lakh jobs, they cannot substitute for a broad revival on their own. Recent PMI data show India’s factory activity cooling, with new orders and output growth slowing to multi-month lows. 

Sustainable manufacturing growth depends on predictable regulation, faster clearances, reliable logistics, and timely payments—structural constraints that continue to deter private capex. Although corporate balance sheets are healthier than a decade ago, firms remain cautious amid delays in government payments, regulatory unpredictability, and an MSME credit system that favours short-term liquidity over long-term capacity building. 

To unlock private investment, the budget should mandate penal interest on delayed government payments, publish a quarterly transparent dues dashboard, and redesign credit guarantee schemes to prioritise capital expenditure over working capital. Such reforms would do more to catalyse investment than additional fiscal incentives alone. 

External Risks: Tariffs, FTAs, and Russia Trade

The global environment adds further complexity. A potential return of Trump-era tariff aggression poses risks to India’s export strategy, particularly in steel, aluminium, pharmaceuticals, and IT services. India cannot assume benign access to the US market in FY27 and beyond. At the same time, a slew of free trade agreements (FTAs) has delivered only modest export gains, and many have widened trade deficits without significantly boosting value-added exports—reflecting weaknesses in domestic competitiveness rather than market access alone. 

Trade with Russia has expanded in value but remains lopsided, dominated by energy imports settled through complex payment mechanisms. While geopolitically strategic, these ties have done little to strengthen Indian manufacturing exports. The Budget must focus on export capability—improving logistics, standards, and scale—rather than relying on strategic trade alone. 

The Farm Sector: The Silent Constraint

Agriculture still employs nearly half the workforce while contributing less than a fifth of GDP. Productivity remains low, incomes are volatile, and climate risks are rising. Budgetary support continues to be skewed toward subsidies rather than investment in irrigation, storage, crop diversification, and agro-processing. 

Recent changes to rural employment schemes and procurement policies risk weakening income buffers without offering sustainable alternatives. The FY27 Budget must tread carefully: weak farm incomes directly affect consumption, savings, and broader economic stability. A credible farm strategy would prioritise productivity-enhancing investment over repeated fiscal band-aids. 

Savings–Investment Trap

Despite improvements in Direct Benefit Transfer (DBT) targeting, vulnerability remains high. Health shocks, income volatility, and inadequate insurance continue to suppress household savings and risk-taking. An economy that seeks higher investment cannot leave households one illness away from financial distress. The Budget must pivot from transfer-heavy welfare toward genuine risk protection—especially in health coverage and income stabilisation—a step that is not just social policy, but a macroeconomic necessity. 

The Real Budget Question

The central question for the FY27 Budget is not whether India can maintain stability—it likely can. The real challenge is whether it can convert that stability into sustained, broad-based growth. Achieving this will require hard choices: redirecting expenditure toward productivity, addressing institutional frictions that deter private investment, preparing for external trade shocks, and confronting long-neglected sectors like agriculture and human capital. 

India does not face a fiscal crisis. But it does face an institutional test. The FY27 Budget will reveal whether the state is ready to move beyond managing aggregates to strengthening the foundations beneath them.---INFA

 

(Copyright, India News & Feature Alliance)

 

Chancellor Merz’s Visit: STRENGTHENING INDIA-GERMANY, EU TIES, By Dr. D.K. Giri, 16 Jan 2026 Print E-mail

Round The World

New Delhi, 16 January 2026

Chancellor Merz’s Visit

STRENGTHENING INDIA-GERMANY, EU TIES

By Dr. D.K. Giri

(Prof of Practice, NIIS Group of Institutions) 

German Chancellor Friedrich Merz two-day visit to India marked a significant milestone in the bilateral relations. Accompanied by 23 CEOs of German companies from various sectors, Merz landed in Ahmedabad on 12 January. Having spent a full day in multiple events, in the company of Indian Prime Minister Narendra Modi, the Chancellor flew to Bengaluru. The intent and composition of the delegation was reflected in signing number of MoUs and Joint Declaration of Intents which aimed at strengthening economic, technological and security cooperation between the two countries. 

For Chancellor Merz, it was his first trip to India and Asia as the Head of the German Government. Merz chose India for his first Asian trip as Chancellor, indicating a shift in strategy among European leaders, who previously focused on China. Prime Minister Modi, however, pointed out that Chancellor Merz’s visit coincided with India and Germany acknowledging 25 years of strategic partnership and 75 years of diplomatic relations between two countries. New Delhi is also preparing to receive the EU leaders as the guests in the ensuing Republic Day parade. Their visit should coincide with the India-EU summit later this month. Soon after, the French President Emmanuel Macron is visiting India. 

The new year seems to be starting with bonhomie between Indian and the European leadership. German Chancellor suggested that India and the EU could be concluding the FTA by the end of January. Germany being the largest economy in the Union, German Chancellor’s voice carries considerable weight. The strategic shift in German foreign and trade policy could be detected in Chancellor’s poignant remarks that the world is experiencing “a renaissance of unfortunate protectionism” that harms Germany and India. He did not name any country, but the reference was obvious. 

While the United States has imposed heavy tariff on trading partners, China introduced export controls on minerals used in auto manufacturing causing months of supply chain disruption last year due to the US-China trade war. This has badly affected German car makers. Germany has signalled diversification of its trade and search for alternatives to Chinese exports and market. More than once, the German leadership have revealed their preference for India as a democratic alternative to Chinese authoritarian state. Germany has also expressed interest in building trade relations with India, treating latter as a new source of supply chain. 

That said, Germany has not been able to divert its trade away from China with its bilateral trade pegged at 287b USD in 2024-25, compared to 50b USD with India in the same year. Germany remains the largest trading partner of China, whereas Germany is the largest trading partner of India in Europe. The delay in German disinvestment from China and in deepening trade and economic ties with India may be attributed to the strategic divergence between India and Europe that includes Germany on the war in Ukraine. 

While Europe treats Russia as the main security threat, New Delhi puts China on the table as an aggressive and aggrandising neighbour. Germany is yet to take a concrete call on its attitude towards China, if Bonn wants to have strategic partnership with New Delhi. The geo-political approach has to be matched with trade and economic strategy. Admittedly, Germany has pursued a China plus strategy to reduce the excessive dependence on a single partner. Its trade with China is declining reflecting both emerging challenges in political engagement and Germany’s diversification efforts. 

Chancellor Merz may have overstepped as he decided to characterise the growing India-German defence relationship as a means to reduce New Delhi’s dependence on Russian defence hardware. At the same time, the MoUs and JDIs included strengthening bilateral defence industrial cooperation, a semi-conductor eco system partnership, cooperation on critical minerals and the bio-economy, a roadmap for higher education, easier visa access for health professionals, India-Pacific and scaling up triangular development cooperation in third countries. 

The key highlights of the visit include defence cooperation: both countries signed a Joint Declaration of Intent to develop a defence industrial cooperation roadmap, focusing on long-term technology partnerships, co-development and co-production of defence equipment. In trade and economy, the two countries aim to conclude the India-EU Free Trade Agreement by the end of January which should also boost bilateral trade. On critical technologies, agreements were signed on semi-conductor, eco-system development, critical minerals and telecommunications, underscoring the growing cooperation in critical and emerging technologies. Germany will contribute technology, funding for equipment manufacturing, precision engineering and work force training. 

On critical minerals, a JDI was signed focussing on exploration, R&D, processing, recycling as well as acquisition and development of critical mineral assets in both countries as well as third countries. Both the countries emphasised on collaboration on internet and data governance, AI and emerging technologies. Agreements were signed on green hydrogen, renewable energy, climate-resilient urban infrastructure with Germany contributing 1.24b Euro under the Green and Sustainable Development Partnership. 

A major off-take deal was signed between India’s AM Green and Germany’s Uniper Global Commodities for the supply of green ammonia. On space cooperation, the Indian Space Research Organisation (ISRO) and the German Space Agency (DLR) agreed to enhance Space Industry Level Engagements. 

The visit underscores the growing importance of India-Germany relations with Germany emerging as India’s strategic and trade partner. Strengthened bilateralism between India and Germany automatically leads to deepening India-EU ties. Faced with the capricious US trade and security policies, mainly diluting NATO and the traditional trade ties with Europe, Germany and European Union are looking for new partners. While China remained for a long time the strongest trade partner of Germany and the EU, this may no longer be the case for at least two reasons, one, the growing trade and strategic rivalry between the US and China, and the ‘systemic threat’ posed by Beijing. 

Germany and the EU will have no other option than giving up their China obsession while correspondingly reducing their trade with the country. In that scenario, India emerges as the strongest candidate for an alternative to China. This has been a potent expectation but has not been transformed into reality. With the visit of German Chancellor followed by the India-EU Summit, the strategic shift in Europe should reflect in the deliberations between and EU, conclusion of the long-awaited FTA, and European Union using New Delhi to pivot to India-Pacific region. 

In India-EU exchanges in the past, China was the elephant in the room, but now it is Russia, and US as well. So, the eyes of the world powers will be focused on the India-EU Summit later this month. New Delhi is certainly bracing up for it and should not let this opportunity slip out of hand.---INFA 

(Copyright, India News & Feature Alliance)

Chancellor Merz’s Visit STRENGTHENING INDIA-GERMANY, EU TIES, By Dr. D.K. Giri, 16 Jan 2026 Print E-mail

Round The World

New Delhi, 16 January 2026

Chancellor Merz’s Visit

STRENGTHENING INDIA-GERMANY, EU TIES

By Dr. D.K. Giri

(Prof of Practice, NIIS Group of Institutions) 

German Chancellor Friedrich Merz two-day visit to India marked a significant milestone in the bilateral relations. Accompanied by 23 CEOs of German companies from various sectors, Merz landed in Ahmedabad on 12 January. Having spent a full day in multiple events, in the company of Indian Prime Minister Narendra Modi, the Chancellor flew to Bengaluru. The intent and composition of the delegation was reflected in signing number of MoUs and Joint Declaration of Intents which aimed at strengthening economic, technological and security cooperation between the two countries. 

For Chancellor Merz, it was his first trip to India and Asia as the Head of the German Government. Merz chose India for his first Asian trip as Chancellor, indicating a shift in strategy among European leaders, who previously focused on China. Prime Minister Modi, however, pointed out that Chancellor Merz’s visit coincided with India and Germany acknowledging 25 years of strategic partnership and 75 years of diplomatic relations between two countries. New Delhi is also preparing to receive the EU leaders as the guests in the ensuing Republic Day parade. Their visit should coincide with the India-EU summit later this month. Soon after, the French President Emmanuel Macron is visiting India. 

The new year seems to be starting with bonhomie between Indian and the European leadership. German Chancellor suggested that India and the EU could be concluding the FTA by the end of January. Germany being the largest economy in the Union, German Chancellor’s voice carries considerable weight. The strategic shift in German foreign and trade policy could be detected in Chancellor’s poignant remarks that the world is experiencing “a renaissance of unfortunate protectionism” that harms Germany and India. He did not name any country, but the reference was obvious. 

While the United States has imposed heavy tariff on trading partners, China introduced export controls on minerals used in auto manufacturing causing months of supply chain disruption last year due to the US-China trade war. This has badly affected German car makers. Germany has signalled diversification of its trade and search for alternatives to Chinese exports and market. More than once, the German leadership have revealed their preference for India as a democratic alternative to Chinese authoritarian state. Germany has also expressed interest in building trade relations with India, treating latter as a new source of supply chain. 

That said, Germany has not been able to divert its trade away from China with its bilateral trade pegged at 287b USD in 2024-25, compared to 50b USD with India in the same year. Germany remains the largest trading partner of China, whereas Germany is the largest trading partner of India in Europe. The delay in German disinvestment from China and in deepening trade and economic ties with India may be attributed to the strategic divergence between India and Europe that includes Germany on the war in Ukraine. 

While Europe treats Russia as the main security threat, New Delhi puts China on the table as an aggressive and aggrandising neighbour. Germany is yet to take a concrete call on its attitude towards China, if Bonn wants to have strategic partnership with New Delhi. The geo-political approach has to be matched with trade and economic strategy. Admittedly, Germany has pursued a China plus strategy to reduce the excessive dependence on a single partner. Its trade with China is declining reflecting both emerging challenges in political engagement and Germany’s diversification efforts. 

Chancellor Merz may have overstepped as he decided to characterise the growing India-German defence relationship as a means to reduce New Delhi’s dependence on Russian defence hardware. At the same time, the MoUs and JDIs included strengthening bilateral defence industrial cooperation, a semi-conductor eco system partnership, cooperation on critical minerals and the bio-economy, a roadmap for higher education, easier visa access for health professionals, India-Pacific and scaling up triangular development cooperation in third countries. 

The key highlights of the visit include defence cooperation: both countries signed a Joint Declaration of Intent to develop a defence industrial cooperation roadmap, focusing on long-term technology partnerships, co-development and co-production of defence equipment. In trade and economy, the two countries aim to conclude the India-EU Free Trade Agreement by the end of January which should also boost bilateral trade. On critical technologies, agreements were signed on semi-conductor, eco-system development, critical minerals and telecommunications, underscoring the growing cooperation in critical and emerging technologies. Germany will contribute technology, funding for equipment manufacturing, precision engineering and work force training. 

On critical minerals, a JDI was signed focussing on exploration, R&D, processing, recycling as well as acquisition and development of critical mineral assets in both countries as well as third countries. Both the countries emphasised on collaboration on internet and data governance, AI and emerging technologies. Agreements were signed on green hydrogen, renewable energy, climate-resilient urban infrastructure with Germany contributing 1.24b Euro under the Green and Sustainable Development Partnership. 

A major off-take deal was signed between India’s AM Green and Germany’s Uniper Global Commodities for the supply of green ammonia. On space cooperation, the Indian Space Research Organisation (ISRO) and the German Space Agency (DLR) agreed to enhance Space Industry Level Engagements. 

The visit underscores the growing importance of India-Germany relations with Germany emerging as India’s strategic and trade partner. Strengthened bilateralism between India and Germany automatically leads to deepening India-EU ties. Faced with the capricious US trade and security policies, mainly diluting NATO and the traditional trade ties with Europe, Germany and European Union are looking for new partners. While China remained for a long time the strongest trade partner of Germany and the EU, this may no longer be the case for at least two reasons, one, the growing trade and strategic rivalry between the US and China, and the ‘systemic threat’ posed by Beijing. 

Germany and the EU will have no other option than giving up their China obsession while correspondingly reducing their trade with the country. In that scenario, India emerges as the strongest candidate for an alternative to China. This has been a potent expectation but has not been transformed into reality. With the visit of German Chancellor followed by the India-EU Summit, the strategic shift in Europe should reflect in the deliberations between and EU, conclusion of the long-awaited FTA, and European Union using New Delhi to pivot to India-Pacific region. 

In India-EU exchanges in the past, China was the elephant in the room, but now it is Russia, and US as well. So, the eyes of the world powers will be focused on the India-EU Summit later this month. New Delhi is certainly bracing up for it and should not let this opportunity slip out of hand.---INFA 

(Copyright, India News & Feature Alliance)

PARTNERS IN PROGRESS AND MORE, By Inder Jit, 15 Jan 2026 Print E-mail

REWIND

New Delhi, 15 January 2026

PARTNERS IN PROGRESS AND MORE

By Inder Jit

(Writing from Bonn, 4 November 1986) 

Autumn is a good time to visit West Germany. The weather is delightful -- cool and crisp as in New Delhi around Christmas. The leaves are beginning to change colour from green to yellow and further to brown and flaming rust. What is, however, even more gratifying is the new mood and outlook I have noticed in regard to our country during a two-week visit here. India now counts more than ever before in West Germany and enjoys widespread friendship and admiration of its leaders, top officials and people at large. Things were not too bad when I first visited this country in 1969 and next in 1982. But a significant qualitative change has taken place in the four years that have since rolled by. India's achievements are today seen in this country in their proper perspective and fulsome praise voiced for the vigour and vitality of its democracy and, importantly, for what has been repeatedly described here as "the dynamic leadership" of Mr Rajiv Gandhi. Lavish bouquets were offered not only in Bonn, the Capital of the Federal Republic, but also in Hamburg, Munich and Stuttgart, Capital of the prosperous Baden-Wurtemberg, one of the country's federating states.

Much of the credit for this must go to the West German Chancellor, Mr Helmut Kohl, who is now getting ready for the Federal Republic's next four-yearly general election to it: Parliament, the Bundestag, on January 25. Initially, he visited India in 1983, within a few months of his election as Chancellor. He was in New Delhi again in April this year. Bonn has also taken other significant steps subsequently reflecting the country's new mood, notwithstanding the fact that Mr Kohl as the leader of West Germany's Christian Democratic Union heads a conservative coalition with the Free Democrats. At least three of Mr Kohl's senior Cabinet colleagues have visited New Delhi during the past two years. They are the country's Finance Minister, Mr Stoltenberg, the Minister of Economy, Mr Bangemann, who deals with both Commerce and Industry and the Minister of Economic Cooperation, Dr Jurger Warnke. In addition, the energetic and popular Prime Minister of Baden-Wurtemberg, Mr Spath, visited New Delhi earlier this year in a further bid to strengthen mutual ties. (It is not unusual for the heads of government in the Federal Republic's various states to travel to foreign lands and initiate bilateral steps.)

Positive proof of the new mood came from Dr Warnke, whom I had met in New Delhi at a dinner hosted by the Union Finance Minister, Mr V.P. Singh, in his honour. In an hour-long talk in Bonn, Dr Warnke told me candidly: "We are today the largest aid donor to India. Chancellor Kohl raised West Germany's annual assistance to India by ten per cent during his visit to DM 399 million. We shall continue our assistance at this higher level." He acknowledged that the trade imbalance between India and West Germany was very wide - some DM 2 billion. But he hastened to add: "We are ready to offer all reasonable help to India for stepping up its exports to West Germany. We have already sent someone to India in this connection. We might even subsidise Indian expositions in West Germany. India could then follow up... energetically. India put up a big show at Hanover two years ago. It made a bio impact and generated a lot of goodwill. But it was not followed up effectively. We are ready for any good ideas."

Dr Warnke made three other points. First, circumstances had forced West Germany to tie up some of its aid to India and go bilateral. Bonn recognised India's desire to get the best for itself through international bidding. "If we lose, we shall not finance the project. However, the amount offered for the project will be held in reserve for India for another project". Second, Bonn had noted the wishes of India about IDA's eighth replenishment and supported its view that this ought to be $12 billion. "We are prepared to make a contribution of $1.3 billion towards it -- much more than what the others are doing in terms of their GNP. We hope we can persuade Japan to do better too -- and push the eighth replenishment to $12 billion." Third, India should try to promote greater German tourism. He said: "We feel India is mainly concentrating on higher class of tourists and five star hotels. We feel India has an incredible amount of cheap labour to set up a chain of modern three star hotels. The potential is there. India should exploit it. We will be glad to help."

Top officials in Bonn today regard India as "the greatest democracy" and, therefore, "a very important partner not only in the present but also in the future." "Look around Asia", remarked one senior official, "and you cannot but help admire India. You people have performed an extraordinary feat of feeding your 850 million people. Which Asian country gives its citizens and its Press as much freedom?" The "new direction" given to the economic policies by Mr Rajiv Gandhi has created new interest in India. Nevertheless, a lot more still remains to be done. Said he: "Our businessmen still encounter some problems. Administrative procedures for investment are lengthy and complicated. Again, Indians invariably think only in terms of industrial giants such as Siemens, Bosch and Mercedes-Benz when they think of new collaborations. They overlook the fact that West Germany's real strength lies in medium range and highly specialised industries. Many of these enterprises are family concerns -- a father and two or three sons. In some cases, these concerns are willing to send one of the family members. But India hesitates to give visas for two to three years."

There are other problems too. West German collaborators want the right to run joint ventures and to influence their management. However, they are not allowed to do so. India, they feel, needs to have a "flexible approach". Again, India is viewed as being disinclined to allow foreign experts to come in and to give them their due. Said one authoritative source: "We here import not only foreign technologies, but also get experts. Other developing countries show greater pragmatism than India. Take China. It ran into a major problem with its steel plant at Wuhan and readily got itself an expert from West Germany. The expert got the plant running again, to the joy of the Chinese. In fact, they were so happy with the expert that they gave him honorary citizenship of Wuhan!" India's decision to fix a maximum of 5 per cent as license fee for the transfer of technology is also viewed as "unhelpful". Consequently many Germans hesitated to go. Bonn, therefore, feels that India needs a flexible policy here also. Ultimately collaboration decisions are made by the German investors, not by the Government.

Political relations between the two countries have also undergone a qualitative change and are looking up. Time was when Bonn's stand in regard to the Sikh extremists and the Khalistanis caused not a little anger and annoyance in New Delhi, as reflected in the Talwinder Singh affair. Both sides now seem to understand each other's positions and difficulties better. West Germany's Basic Law (or Constitution) entitles any one to get political asylum by doing no more than whispering the word "asylum". This law, it needs to be remembered, was made against the backdrop of all that tragically happened under Hitler and the subsequent outcry against political persecutions. However, New Delhi`s problems and sensibilities vis a vis the Sikh extremists are now appreciated better in Bonn which has reassured India of "every cooperation within the framework of the West German system". A top source explained: "I am afraid we cannot go beyond legal possibilities and arrest people because they hold different views. But our Courts have now firmly held that India is a free democracy with an independent judiciary and there is, therefore, no question of giving Indians any political asylum, as in the case of some other countries. Hundreds of Indians have applied for political asylum in the past and continue to do so. But none has been given asylum."

What of the future? Normally, one would answer: "Let us wait for the next West German poll on January 25". But in the present situation Chancellor Kohl appears confidently poised to win another four-year term for his coalition government with the Christian Socialist Union of Bavaria and the Free Democrats. Happily for Mr Kohl the West German economy is in fine fettle and booming. Prices have been incredibly stable, leaving everyone happy and contented. Inflation rate has been almost zero per cent. Unemployment, no doubt, poses a problem as in most European countries. West Germany has some two million jobless. However, the number is much less than the figure of three million anticipated by the previous Socialist-PDF coalition. Security continues to be a matter of major concern. But here, too, the majority in the country seems satisfied with Chancellor Kohl, whose support for President Reagan and his policies is seen as having made the Super-Power summits possible -- and purposeful. The Greens have done well in the recent Bavarian poll. But Chernobyl has made no decisive impact, even though the latest radiation levels of vegetables and meats is today an item of popular every day conversation.

The future of Indo-West Garman relations clearly holds out promise. However, much will inevitably depend upon the ability of the two sides to take full advantage of the present cordial atmosphere to strengthen mutual ties. There is need for greater appreciation on both sides of the depth of mutual relations and opportunities. At the same time, Bonn and New Delhi must avoid taking the other for granted, as has regrettably happened in the past. West Germany has symbolically shown its special and continuing interest in India through Frankfurt's International Book Fair this year. India was the main focus at this fair. Some 28 Indian authors were invited to attend it with all expenses paid. Over 90 business representatives in Hamburg crowded in at a meeting convened by the city's Chamber of Commerce to meet a team of Indian industrialists visiting the Federal Republic to explore ways and means of stepping up exports and bridging the yawning trade gap of DM 2 billion. But India will have to do a lot more for its part (like Japan) if it wants a bigger share of the highly competitive West German market and West German Investments abroad. Some 5000 Japanese businessmen stationed in Dusseldorf knock every day on German doors to push their exports. India will also have to launch imaginative policies to attract more tourists. There is no scope for spoon feeding. All in all, India and West Germany could not only be partners in progress but a lot more! INFA

(Copyright, India News and Feature Alliance)

Indore ‘Water’ Deaths: STATES IGNORE WARNINGS, By Dhurjati Mukherjee, 14 Jan 2026 Print E-mail

Open Forum

New Delhi, 14 January 2026 

Indore ‘Water’ Deaths
STATES IGNORE WARNINGS

By Dhurjati Mukherjee 

The recent deaths of over 16 persons (with unofficial estimates suggesting the number could be as high as 20), coupled with an outbreak of diseases and the hospitalisation of hundreds in Indore—one of the nation’s most reputedly clean cities—underscore significant concerns regarding drinking water contamination and the response by state and municipal authorities. A recent report from the Union government, conducted under the Jal Jeevan Mission, revealed that 38.7% of drinking water samples from rural areas in Madhya Pradesh were deemed non-potable, highlighting ongoing risks within village water supply systems. 

Another report by the M.P. State Pollution Control Board had cautioned mixing of sewage with drinking water sources in Bhagirathpura, one of the hotspots along with 58 other spots in Indore way back in 2016-17. Sadly, such assessments are not seriously taken! There are now reports of sewage contamination of drinking water in Gandhinagar in Gujarat and Bengaluru which are reportedly grappling with a similar public health scare. 

Additionally, a report of the Central Ground Water Board (CGWB)has noted that many states, specially Rajasthan, Haryana, Punjab and Andhra Pradesh, face widespread contamination. It pointed out that arsenic contamination is a major concern in the Ganges and Brahmaputra river basin areas and despite various studies is largely prevalent in West Bengal, Bihar and Odisha and very little has been done to counter such contamination in an effective manner. Uranium consumption, though less widespread, has been sporadically detected in parts of Rajasthan, Punjab, Haryana, Delhi, Andhra Pradesh, and Telangana. 

The highest uranium concentration was observed in Punjab, where over half of the samples exceeded the limit, followed by Haryana, Karnataka and Uttar Pradesh. Discharge of untreated industrial waste, excessive use of fertilizers and pesticides, improper waste disposal and sewage leakage in urban areas and over-extraction in groundwater may be listed as key factors for groundwater quality decline. “Significant concerns have emerged from the analysis, particularly the high concentrations of nitrate, fluoride and electrical conductivity in groundwater. Almost 20.7% of samples exceeded the permissible limit for nitrate while 8.05% of samples had fluoride levels above the limit,” said the report. 

If even warnings do not matter and if a minimum need of potable water cannot be supplied to suburbs of a big city, one may imagine the situation in remote and backward areas of the country. It is indeed tragic that after over 75 years of Independence, safe and potable water cannot be supplied throughout the length and breadth of the country though we now claim to have emerged as the fourth largest economy.  

It is also a well-known fact that diarrhoea and typhoid are rampant, specially during the rainy season. The situation has now reached even big cities. Is all this due to lack of governance of the municipal authorities or wanton corruption in the system that projects are not monitored and implemented strictly? 

As per as per government figures under Jal Jeevan Mission, 81% of rural households have tap water connections under the Jal Jeevan Mission, as of mid-2025. Though the figures may not be realistic, the problem lies in the quality of water. It has repeatedly been stressed that there is an urgent need to invent a low-cost spectrometer that measures TDS, heavy metals, nitrates, phosphates and microbial indicators. Whether AI can help in this regard is not known but it is understood that experiments to this effect are being carried out by various research institutions. This is necessary as clean water must be made available at around Rs 5 per 20 litres per family as the supply system may not be dependable. 

Though the upgraded Rural Piped Water Supply Schemes (RPWSS) module to significantly enhance monitoring, transparency, and accountability of rural drinking water services under the Mission represented a major digital transformation in rural water governance, it is not known how effective the system is. It’s designed to enable real-time tracking, geo-tagging, and data-driven monitoring of water infrastructure, making the operation and maintenance of schemes more efficient and transparent. Crucially, the upgraded platform for water management is expected to create a GIS-based asset registry linked via the PM Gati Shakti platform. This registry will provide end-to-end visibility of water supply networks, connecting sources, treatment plants, pipelines and household connections. 

This initiative is aimed to empower local bodies by providing panchayats and village water and sanitation committees with real-time, verified data to monitor system functionality and water quality. But it’s unknown whether these plans are effective at the panchayat levels and whether these fund-starved bodies have the requisite expertise to run a safe water supply system in rural areas. 

It is a well-known fact that water contamination in India has high economic costs, due to the health and environmental impacts of it. The cost of environmental degradation due to water contamination is estimated to be $80 billion a year, whereas the health costs are estimated to be $6.7-8.7 billion per year. The health impacts of water contamination can be extremely high for individual households. For example, in Ludhiana and surrounding areas in Punjab, the per capita cost for lower income households was found to be around Rs 3,385 whereas in Kolkata, this amount on an average was over Rs 1,168.  

Drinking water is a human right, yet water contamination in the country critically impedes safe drinking water, especially for the vulnerable sections. The progress of the Jal Jeevan Mission has undoubtedly been very slow, and it remains to be seen how drinking water would be made available to every rural household by 2030, as promised. However, safe drinking water management in India has increased from 61% to 71% from 2001 to 2017 and may presently be over 78%.   

The affected are mostly the poor and the economically weaker sections. A study conducted from 2011-2015 and from 2016-2020, has reported that there were 263 deaths from cholera in India. Majority of the cases came from Maharashtra, Punjab, West Bengal, Karnataka and Madhya Pradesh. Other diseases from contaminated water include typhoid, which has a rate of 500-700 per 10,000 people in India, diarrhea, which has an infant mortality rate of 9% for ages 0-59 months and Hepatitis A. Annually about 37.7 million are impacted by waterborne illness, and they have caused 10,738 deaths from 2017-2022. 

Protocols for monitoring water quality are largely absent in much of the country, raising concerns about the effectiveness of state pollution boards and municipal bodies in providing safe drinking water. Most citizens rely on municipal supplies and lack resources to regularly purify their water, so ensuring free potable water should be a top priority for any government. The big question is how soon will the ruling elite recognise the urgency?---INFA 

(Copyright, India News & Feature Alliance)

 

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