CURRENT AFFAIRS | 25 MAY 2026
An Indian Express Ideas Page editorial dated 25 May 2026 by Ashok Gulati (ICRIER) and Ritika Juneja warns India faces a “1991 moment” — the rupee under pressure could slide past ₹100/USD, requiring RBI intervention of $50–60 billion. With CPI inflation below 6% but current-account-deficit widening, the editorial argues the FY27 fertilizer-subsidy budget of ₹1.71 lakh crore could balloon to ₹2.25–2.50 lakh crore. They prescribe a “DBT Brahmastra” — per-acre Direct Benefit Transfer for fertilizers integrated with PM-KISAN and Aadhaar — to plug the leak.
For CLAT 2027 aspirants this story is a one-stop revision of LPG-1991, FRBM Act, RBI’s MPC framework, NFSA, Aadhaar §7, and the Essential Commodities Act — all in one editorial. Below is the constitutional/legal architecture and the CLAT-pitched takeaways.
Constitutional & Legal Framework
- Article 14 — Equality, applied to subsidy targeting
- Article 38 — DPSP, welfare-state objective
- Article 39(b) — Material resources distributed for common good
- FRBM Act 2003, §4 — Fiscal deficit ceiling 3% of GDP
- RBI Act 1934, §§ 45ZA & 45ZB — MPC framework, inflation target 4±2%
- NFSA 2013 — Food security to ~67% of population
- Aadhaar Act 2016, §7 — Subsidy via Aadhaar authentication
- Essential Commodities Act 1955 — Fertilizer Control Order 1985 backbone
CLAT 2027 Angle
Tests the 1991 BoP backdrop (forex reserves under 2 weeks of imports, gold pledged to Bank of England, Manmohan budget July 1991, New Industrial Policy → LPG). Expect direct MCQs on the 4±2% MPC band, FRBM 3% ceiling, and Aadhaar §7 (upheld in KS Puttaswamy II, 2018, by 4:1 majority). NITI Aayog’s MPI uses 12 indicators across health, education, living standards — different from the World Bank’s $2.15/day extreme-poverty line.
Key Facts at a Glance
| Item | Detail |
|---|---|
| Editorial date | 25 May 2026, IE Ideas Page |
| Authors | Ashok Gulati (ICRIER) + Ritika Juneja |
| Rupee psychological mark | ₹100/USD |
| RBI intervention need | $50–60 billion |
| Fertilizer subsidy FY27 (budget) | ₹1.71L cr → could touch ₹2.50L cr |
| Food subsidy FY27 | ₹2.28 lakh crore |
| Urea: landed cost vs farmer price | $935/T vs $70/T |
| Extreme poverty | 5.3% (World Bank) / ~11% (NITI MPI) |
Mnemonic: “RUPEE”
- RBI MPC 4±2% inflation target (§§45ZA-ZB)
- Urea $935 landed vs $70 farmer = arbitrage
- PM-KISAN + Aadhaar DBT integration
- Extreme poverty 5.3% (WB) / 11% (NITI MPI)
- Essential Commodities Act 1955 + FCO 1985
Landmark Cases
- KS Puttaswamy v UoI (2018) — Aadhaar §7 upheld; subsidy linkage permissible
- Reliance Industries v Union of India — Subsidy-policy challenges
- Excel Crop Care v CCI (2017) — Cartel conduct in subsidised fertilizer tenders
Practice Quiz
Practice Quiz — 10 CLAT-Style Questions
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