January 2026
In short: India's schemes, budget and infrastructure this month — distilled for SI/Constable Prelims.
Current Affairs — India › Economy & Infrastructure · 20 min read · Free to read · English & Telugu
Bilingual study notes for the Andhra Pradesh Police SI & Constable exams (SLPRB AP) by AP Police Hub, a product of Anvil Academy.
India's First Advance Estimate pegged FY 2025-26 GDP growth at 7.4% and India overtook China as the world's largest rice producer, even as the Supreme Court denied the Centre customs duty on SEZ electricity and denied Tiger Global a tax-treaty shield; a wave of new schemes covered pesticides, electricity policy, textiles, MSMEs, pensions and startups, while the EU's carbon border tax, Bulgaria's euro adoption and the EU-Mercosur pact reshaped India's external trade landscape.
A harvested paddy field near Palakkad, Kerala — India overtook China in 2024-25 to become the world's largest rice producer (150.18 MT) · Conquester / Wikimedia Commons (CC BY-SA 3.0)
January 2026 — At a Glance
January 2026 opened with strong headline economic data — India's growth estimate and its rise to the world's largest rice producer — while a burst of new government schemes touched agriculture, power, textiles, MSMEs, pensions and startups, and two Supreme Court tax rulings and three international trade developments reshaped the external picture.
1. Growth, Trade & Labour Data
First Advance Estimate: FY 2025-26 GDP growth pegged at 7.4%
- What — NSO released the First Advance Estimate (FAE) — the earliest official growth estimate, published in early January and used to fix the next Budget's allocations, derived by extrapolating IIP, GST, crop, corporate and infrastructure data.
- Numbers — Nominal GDP: ₹357.14 lakh crore (8.0% growth); Real GDP: ₹201.90 lakh crore, growing 7.4% — up from 6.5% in FY 2024-25.
India becomes the world's largest rice producer
- Numbers — India's rice output reached 150.18 million tonnes (2024-25), surpassing China's 145.28 MT for the first time; India's global share rose to 28%; Bangladesh (36.6 MT) and Indonesia (34.1 MT) trail at 3rd/4th.
- Why paddy dominates — Grown in 614 of ~800 districts; assured MSP procurement gives higher net returns (~₹56,226/hectare vs ₹17,856 for maize) than other crops, but is highly water-intensive (1-3 tonnes water/kg rice), straining groundwater in states like Punjab.
India's LFPR hits a record high
- Numbers — Labour Force Participation Rate (LFPR) rose to 56.1% in December 2025 (highest since the monthly PLFS began); female LFPR at 35.3%; Worker Population Ratio hit a yearly peak of 53.4%; unemployment stable at 4.8%.
Global reports: employment, growth prospects & export readiness
- ILO Employment & Social Trends 2026 — Global unemployment steady at 4.9% (186 million people); the broader global jobs gap projected at 408 million; ~300 million workers live in extreme poverty (under $3/day).
- UN DESA World Economic Situation 2026 — Global growth projected to slow to 2.7% in 2026; India's growth projected to moderate from 7.4% (2025) to 6.6% (2026); global inflation to fall to 3.1%.
- NITI Aayog Export Preparedness Index 2024 — 4th edition (first was 2020), aligned with India's $1 trillion merchandise export target by 2030; 4 pillars — Export Infrastructure (20%), Business Ecosystem (40%), Policy & Governance (20%), Export Performance (20%) — across 70 indicators.
- Opinion trading & RBI's CBDC-BRICS proposal — SEBI warns prediction-market platforms (Polymarket, Kalshi) are unregulated and illegal for securities trading in India; separately, RBI proposed linking BRICS nations' CBDCs for cross-border trade/tourism payments, clarifying this is not aimed at de-dollarisation.
2. New Schemes, Industry & Infrastructure
Draft Pesticides Management Bill, 2025
- What — Proposed by the Ministry of Agriculture & Farmers Welfare to replace the Insecticides Act, 1968; creates a Central Pesticides Board and a Registration Committee for digital registration, and provides for graded penalties (₹10-40 lakh fine, up to 5 years' imprisonment) for unregistered/banned pesticides.
Draft National Electricity Policy, 2026
- What — Released by the Ministry of Power, aligned with the SHANTI Act, 2025 and the 100 GW nuclear target by 2047; targets RE-conventional parity in scheduling by 2030, DISCOM financial viability, and estimates power-sector investment of ₹50 lakh crore by 2032, ₹200 lakh crore by 2047.
Power DISCOMs post their first collective profit
- Numbers — Distribution utilities posted a positive PAT of ₹2,701 crore in FY 2024-25 — compared to a loss of ₹25,553 crore in FY 2023-24 — credited to the Revamped Distribution Sector Scheme (RDSS), smart metering and tariff reforms.
Textiles push: District-Led Transformation, Tex-RAMPS & Kaladi upgrade
- District-Led Textiles Transformation — Transforms 100 high-potential districts into Global Export Champions and 100 Aspirational Districts into self-reliant textile hubs, based on Export Performance, MSME Ecosystem and Workforce parameters.
- Tex-RAMPS — Ministry of Textiles signed MoUs with 15 States (₹305-crore outlay, FY 2025-26 to 2030-31) to strengthen textile data/research systems at the cluster/district level, with annual grants to States and districts.
- Kaladi upgrade — CSIR-CFTRI (Mysuru) and CSIR-IIIM (Jammu) are extending the shelf life of Kaladi, a GI-tagged Udhampur (J&K) dairy cheese, under the One District One Product initiative.
MSME & industry: SIDBI infusion, MSME convergence, Fourth Industrial Revolution centre
- SIDBI equity infusion — Cabinet approved a ₹5,000-crore equity infusion into SIDBI (in 3 tranches) to expand MSME credit — beneficiary MSMEs expected to rise from 76.26 lakh to 102 lakh by FY 2027-28, generating ~1.12 crore jobs.
- NITI Aayog MSME report — "Achieving Efficiencies in MSME Sector through Convergence" — recommends merging the Ministry of MSME's 18 overlapping schemes via information- and process-convergence.
- 4th Industrial Revolution Centre, AP — WEF will set up a new Centre for the Fourth Industrial Revolution in Andhra Pradesh (besides France, UK, UAE) — India already has centres in Mumbai and Telangana — focused on AI, energy transition and cyber resilience.
Infrastructure snapshots: Greenfield corridor, Land Stack, marine fish farming, agarwood
- Maharashtra Greenfield Corridor — CCEA approved a 374-km, six-lane Nashik-Solapur-Akkalkot corridor (₹19,142 crore, BOT toll mode), cutting travel time from 31 to 17 hours.
- Land Stack — MoRD launched an integrated, GIS-based Land Stack (DILRMP) with single-window land/property access, piloted in Chandigarh and Tamil Nadu, alongside a new Glossary of Revenue Terms (GoRT).
- Open-sea marine fish farming — India's first open-sea marine fish farming project launched at North Bay, Andaman Sea — a Blue Economy milestone by the Ministry of Earth Sciences/NIOT and the A&N Islands administration.
- Agarwood Value Chain Scheme — MDoNER launched the scheme with two Central Processing Centres, a GI tag underway, and a six-fold rise in export quotas for Northeast farmers.
Government to merge agricultural schemes into PM-RKVY
- What — The Ministry of Agriculture proposed merging three ongoing schemes into the umbrella Pradhan Mantri-Rashtriya Krishi Vikas Yojana (PM-RKVY, launched 2007), weighting fund allocation more heavily toward state reform performance rather than static need-based indicators, echoing the 15th Finance Commission's idea.
3. Finance, Pensions & Startups
Pension reforms: Atal Pension Yojana, PFRDA and bank-run pension funds
- Atal Pension Yojana — Cabinet approved APY's continuation up to FY 2030-31; over 8.66 crore subscribers enrolled as of January 2026.
- PFRDA reforms — PFRDA constituted the SAARG committee (chaired by Narayan Ramachandran) to review NPS investment strategy, and gave in-principle approval for banks to independently set up pension funds.
- SAMPANN-UMANG — The pension-administration platform SAMPANN integrated with UMANG, letting pensioners check PPO number and Life Certificate status via a single mobile app.
A decade of Startup India; relaxed deep-tech and chip-design funding
- A Decade of Startup India — Marked on National Startup Day (16 Jan); India has 2 lakh+ startups (~50% from Tier-II/III cities), 120+ unicorns (from just 4 in 2014) worth $350 bn+ combined, and 45%+ startups have a woman Director/Partner. Key vehicles: Fund of Funds (₹10,000-cr corpus via SIDBI), Credit Guarantee Scheme (CGSS), Seed Fund Scheme (₹945-cr corpus).
- Deep-tech & chip design — DSIR removed the 3-year viability criterion for deep-tech startups seeking its ₹1-crore assistance; MeitY's Chips to Start-up (C2S) programme targets India's semiconductor talent gap (global shortfall of 1 million+ skilled professionals by 2032).
World Bank Country Partnership Framework with India
- What — India and the World Bank announced a new Country Partnership Framework (CPF) centred on private-sector job creation (~12 million youth enter the labour market yearly); ongoing projects include PM SETU (830m for ITIs), a Maharashtra agriculture-resilience project (490m), and Credila higher-education financing ($750m).
Welfare portals: PANKHUDI and the Karnataka Gig Workers' Welfare Board
- PANKHUDI — Ministry of Women & Child Development launched PANKHUDI, a single-window CSR/partnership portal for nutrition, child welfare and women's safety projects, accepting only non-cash contributions for transparency.
- Gig Workers' Welfare Board — Karnataka formed a 16-member board under its 2025 Act for the state's ~4 lakh gig/platform workers; aggregators (Zomato, Uber, Amazon, Porter etc.) must pay a welfare fee of 1-1.5% of transactions (up to 5% if needed).
4. Trade, Tax & the Global Economy
SC: Centre cannot tax SEZ-to-DTA electricity; Tiger Global denied tax-treaty relief
- SEZ electricity case — SC ruled the Centre cannot levy customs duty on electricity supplied from Adani Power's Mundra SEZ to the Domestic Tariff Area, overturning a 2019 Gujarat HC verdict — customs duty applies only to actual imports (Article 265).
- Tiger Global case — SC denied Tiger Global capital-gains tax-treaty relief on its Flipkart exit — its Mauritius entities were mere paper conduits with control lying elsewhere ('head and brain' test); a Tax Residency Certificate is not conclusive where the structure lacks real substance, and GAAR can apply even to pre-2017 investments.
EU's Carbon Border Adjustment Mechanism (CBAM) begins — impact on India
- What — EU's CBAM took effect from 1 January, a carbon-linked levy on imports of power, cement, steel, aluminium, fertilisers etc.; India's steel/aluminium exporters may need 15-22% price cuts to stay competitive, and MSMEs risk default high-emission tax rates from missing plant-level data.
- India's stand — Finance Minister Nirmala Sitharaman called CBAM unilateral and discriminatory; India secured a most-favoured treatment clause in the EU-FTA — any CBAM concession to another country will extend to India.
India's FTA paradox: fast-tracking deals amid a widening trade deficit
- What — A NITI Aayog Trade Watch Quarterly flagged that while India fast-tracks FTAs to diversify exports, its trade deficit with FTA partners has widened sharply even as electronics exports surge — recommending tighter rules of origin and diversification beyond electronics into EVs and semiconductors.
Bulgaria adopts the euro; EU-Mercosur trade pact nears signature
- Bulgaria — Bulgaria became the 21st eurozone member on 1 January 2026, replacing the lev; the eurozone now covers over 350 million Europeans.
- EU-Mercosur pact — The EU and Mercosur (Brazil, Argentina etc.) neared signature on a pact begun in 1999 — Mercosur eliminates duties on 91% of EU exports over 15 years, EU on 92% of Mercosur exports over 10 years; France, Poland, Austria, Hungary, Ireland oppose it over farm-sector concerns.