Question 1

Clean Energy Needs Clean Industry

Accepted Answer

India’s clean energy transition has entered a decisive new phase. For more than a decade, conversation has focused on expanding RE capacity. But today, a more fundamental question is emerging: how sustainably are we manufacturing the infrastructure that powers the transition?
Industrial emissions are increasingly becoming the biggest challenge on the pathway to net-zero, accounting for nearly a quarter of GHG emissions. This will rise sharply, with the increase in demand for industrial commodities as the country pursues rapid urbanisation, infrastructure expansion and manufacturing growth.
This creates a critical contradiction. RE deployment may continue to accelerate, but if materials required to build that infrastructure are produced through carbon-intensive processes, industrial emissions could rise alongside clean energy growth. Without meaningful industrial decarbonisation, India risks undermining climate benefits of its own energy transition.
Importance of cleaner industrial supply chains is also being reinforced by developments in global markets.
Sustainability is no longer confined to ESG disclosures or voluntary reporting frameworks. It is increasingly becoming a determinant of market access and trade competitiveness. The EU’s Carbon Border Adjustment Mechanism (CBAM) exemplifies this shift. By attaching carbon cost to imported products, CBAM is changing how global manufacturers evaluate supply chains. Similar measures are likely to emerge across other developed markets.
For Indian exporters, particularly in sectors such as steel and aluminium, decarbonisation is no longer simply about corporate reputation. It’s becoming essential for preserving market access and maintaining competitiveness in GVCs. Manufacturers that can demonstrate lower embedded emissions will enjoy a distinct advantage in a world where carbon is becoming an economic variable.
Fortunately, economics of industrial decarbonisation is becoming increasingly attractive. Rising coking coal prices, growing carbon-related costs and investor expectations are narrowing the gap between conventional production pathways and greener alternatives.
Green steel, RE-powered manufacturing and circular production models are moving towards commercial viability. While challenges remain, particularly around tech and scale, the business case for cleaner production is becoming stronger. Increasingly, decarbonisation is being viewed not merely as a compliance requirement but as a long-term strategy for competitiveness and resilience.
Policy support is also accelerating transition from voluntary action to mandatory transformation.
India’s Carbon Credit Trading Scheme (CCTS) marks an important step in creating accountability for industrial emissions. More than 740 industrial facilities across key sectors are now subject to emission-intensity reduction targets, signalling a clear shift towards performance-based climate regulation.
At the same time, GoI initiatives supporting green hydrogen, carbon markets, and carbon capture, utilisation and storage (CCUS) are helping build the policy architecture needed to drive industrial decarbonisation at scale. These measures provide industries with both incentives and regulatory certainty required to invest in low-carbon technologies.
Technology and resource efficiency will be crucial enablers of this transformation. RE adoption alone will not deliver the deep emissions reductions required from hard-to-abate sectors. The next frontier lies in digitalisation, AI, process optimisation, electrification and circular economy practices.
AI-enabled energy management systems can improve operational efficiency, reduce waste and optimise resource consumption. Circular production models can lower dependence on virgin materials while improving productivity. Together, these innovations offer industries a pathway to reduce emissions and enhance competitiveness.
No major economy is attempting to simultaneously scale manufacturing, infrastructure and clean energy deployment at this pace. By building cleaner industrial supply chains alongside clean energy infrastructure, India can create a globally replicable model of sustainable industrial growth, and position itself as a trusted hub for low-carbon manufacturing in an increasingly carbon-conscious world.
The future of India’s energy transition won’t be determined solely by RE capacity it installs. It will also depend on the carbon footprint of the materials and industrial processes that make that transition possible.
Cleaner industrial supply chains are no longer a supporting element of the energy transition. They are rapidly becoming its foundation.

Question 2

Odisha’s Ascent in India’s Growth Story

Accepted Answer

Odisha’s economic momentum has already been acknowledged in the Economic Survey 2025-26, which cites the state as a leading example across multiple sectors.
The Union Budget 2026–27 offers a compelling blend of strategic vision and pragmatic policymaking, reinforcing India’s trajectory as a high-growth, investment-led economy. With macroeconomic stability firmly in place and growth projected at around 7 per cent, the Budget builds on reform continuity while sharpening focus on manufacturing depth, logistics efficiency, regional connectivity and enterprise growth. These priorities resonate strongly with Odisha’s evolving development narrative.
Odisha’s economic momentum has already been acknowledged in the Economic Survey 2025-26, which cites the state as a leading example across multiple sectors — from climate adaptation and industrial skilling to semiconductor ecosystem engagement and tribal livelihoods. The Survey also points to improving income indicators: Odisha’s Net State Domestic Product (NSDP) has risen from Rs 6.99 lakh crore in 2023-24 to an estimated Rs 7.90 lakh crore in 2024-25, reflecting a robust 13.04 per cent growth, while per-capita NSDP has reached about Rs 1.69 lakh. Together, these trends underscore rising incomes and a broadening base of economic dynamism, lending strong context to the Budget’s Odisha-facing interventions.
One of the most consequential announcements is the proposal to establish Rare Earth Mineral Corridors, with Odisha explicitly identified as a beneficiary state. Rare earths are critical to clean energy technologies, advanced electronics and strategic manufacturing. For Odisha, which already anchors India’s mineral production and hosts a strong metals ecosystem, this opens pathways to move decisively up the value chain — from extraction to processing, research, and advanced manufacturing.
Equally transformative is the operationalisation of National Waterway-5 which will connect the Talcher-Angul industrial belt and Kalinganagar Industrial Estate to Paradip and Dhamra ports. This will fundamentally alter the state’s logistics landscape by lowering transportation costs for bulk commodities, easing pressure on rail and road networks, and strengthening export competitiveness for minerals, metals and manufactured products.
Tourism also finds meaningful space in the Budget, with Odisha included in eco-tourism initiatives such as Turtle Trails along the state’s coastline. This aligns conservation with livelihood creation and places Odisha firmly within India’s sustainable tourism framework.
Beyond these explicit state-level references, several national initiatives announced in the Budget carry strong locational relevance for Odisha. The proposed Chemical Parks and Mega Textile Parks, built around plug-and-play industrial ecosystems, can catalyse the next wave of value-added manufacturing by leveraging Odisha’s land availability, skilled workforce and improving infrastructure. Complementing this, the Container Manufacturing Scheme, with a five-year outlay amounting to Rs 10,000 crore, aligns seamlessly with the state’s emergence as a port-linked industrial gateway, strengthening domestic logistics and export competitiveness. Equally important is the enhanced policy thrust on MSMEs — through easier access to credit, invoice-based financing, equity support and simplified compliance — which will enable enterprise clusters across Odisha’s districts to scale up, integrate with larger value chains, and generate sustainable employment.
The Economic Survey’s recognition of Odisha’s success in industrial training and skilling further strengthens the state’s ability to absorb these opportunities. As India seeks to build resilient supply chains and deepen manufacturing capabilities, Odisha’s preparedness becomes a strategic national asset.
What stands out in the Union Budget 2026-27 is the coherence between national reform priorities and Odisha’s structural strengths. With rising investment interest, expanding infrastructure and improving governance outcomes, the state is no longer on the periphery of India’s growth story.
As the nation advances towards the goal of Viksit Bharat, Odisha is well-positioned to emerge as a model of inclusive industrialisation — powered by minerals, enabled by connectivity, supported by MSMEs, and guided by sustainable development. The Union Budget 2026–27 provides a timely impetus to accelerate this journey.
Subhrakant Panda
Managing Director, IMFA and former president of FICCI

Question 3

A Budget that underscores credibility and invests for competitiveness

Accepted Answer

The Union Budget 2026-27 comes at a moment of unusual global uncertainty, marked by disrupted supply chains, rising resource constraints and fragile multilateralism. Against this backdrop, the Budget makes a clear strategic choice: maintain fiscal discipline while using public investment to strengthen India’s long-term competitiveness and improve ease of living for citizens.
Rather than chase short-term stimulus, the Budget anchors itself in credibility. The reaffirmation of fiscal consolidation — combined with a continued push on infrastructure — signals a confidence that India’s growth momentum can now be sustained with an equal focus on maintaining macro-economic stability. Some of the key takeaways are:
Fiscal prudence as an enabler, not a constraint: A defining feature of the Budget is its emphasis on declining debt-to-GDP ratio. The Finance Minister noted that the ratio is projected to fall from 56.1% in 2025-26 to 55.6% in 2026- 27. Lower debt and reduced interest outgo are explicitly positioned as creating headroom for spending on priority areas, especially capital expenditure.
This has allowed the government to raise public capital expenditure to ₹12.2 lakh crore, even as the fiscal deficit is reduced to 4.3% of GDP. The message is clear: infrastructure investment will remain the principal lever for growth, but it will be funded within a disciplined macro framework.
Logistics reform through inland waterways: Among the most consequential infrastructure announcements is the renewed push on inland waterways and coastal shipping. The operationalisation of 20 new national waterways, starting with NW-5 in Odisha, and the launch of a Coastal Cargo Promotion Scheme aim to double the modal share of waterways and coastal shipping to 12% by 2047.
This is not merely an infrastructure expansion. Logistics cost in India remains high relative to global peers, eroding manufacturing competitiveness. By shifting bulk cargo away from road and rail to waterways, the Budget targets a structural reduction in freight costs while promoting environmentally sustainable movement of cargo. The parallel focus on skill development and ship-repair ecosystems along waterways reinforces the idea that logistics reform can generate employment alongside efficiency gains.
Securing strategic materials through Rare Earth Corridors: The Budget’s focus on Rare Earth Corridors (RECs) reflects a sharp understanding of the geopolitics of manufacturing. By supporting mineral-rich States such as Odisha, Kerala, Andhra Pradesh and Tamil Nadu to develop integrated corridors spanning mining, processing, research and manufacturing, the government is addressing a critical vulnerability in global supply chains.
Rare earths are no longer niche inputs; they are foundational to electronics, clean energy, defence, and advanced manufacturing. The corridor approach moves policy beyond extraction towards value-added industrial ecosystems, reducing import dependence while positioning India as a reliable supplier in a fragmented global market.
Reviving legacy industrial clusters: Alongside frontier sectors, the Budget turns attention to the revival of 200 legacy industrial clusters. Many of these clusters suffer not from lack of entrepreneurial capacity but from outdated infrastructure, poor connectivity and technology gaps. By focusing on cost competitiveness and efficiency upgrades, the government acknowledges that industrial renewal must be broad-based. Reviving legacy clusters is as much about preserving employment and regional balance as it is about productivity. It also signals a pragmatic industrial policy — one that modernises what already exists, while also betting big on emerging sectors.
Container manufacturing and trade readiness: The announcement of a scheme for container manufacturing with a budgetary allocation of ₹10,000 crore over five years addresses a less visible but critical trade bottleneck. Container shortages during recent global disruptions exposed India’s dependence on imported logistics hardware. Building domestic container manufacturing capacity strengthens trade resilience, reduces logistics volatility and complements the broader push on ports, waterways and freight corridors. It also illustrates the Budget’s emphasis on closing gaps across the entire trade ecosystem.
MSMEs as growth multipliers: Support for MSMEs runs through the Budget as a cross-cutting theme. The proposed SME Growth Fund, liquidity support through a strengthened TReDS ecosystem, and professional compliance assistance aim to help MSMEs scale, formalise and integrate with larger value chains. Notably, the focus shifts from survival to champion creation – encouraging enterprises to grow in size, sophistication and competitiveness.
Ease of living as the unifying thread: Beyond economics, the Budget repeatedly invokes ‘ease of living’ through tax simplification, faster customs clearance, reduced compliance, and citizen-friendly processes. These measures may appear incremental in isolation, but together they reinforce a governance philosophy that places citizens and small businesses at the centre of reforms. In that sense, the Budget is not just pro-growth or pro-investment; it is deeply citizen-centric, recognising that sustainable growth depends on trust, predictability and everyday efficiency.
Overall, the strength of the Union Budget 2026-27 lies in its coherence: fiscal prudence that enables investment, infrastructure that lowers costs, industrial policy that addresses strategic vulnerabilities, and reforms that improve daily life. If execution keeps pace with intent, it will lead to a durable strengthening of India’s growth ambitions.

Question 4

Entrepreneurship is key to sustainable growth

Accepted Answer

As India eyes a $7-trillion economy, inclusive growth will depend on scaling startups and MSMEs, deeper innovation, and states like Odisha converting big investments into job-creating enterprises
India is the world’s fourth largest economy and will move up the ladder before the end of the decade with GDP estimated to cross $7 trillion. However, growth alone will not lead to prosperity unless it is broad-based and inclusive; and, for that to happen, entrepreneurship is important. Moreover, a shift from being job seekers to job creators will also boost innovation and add momentum to the nation’s growth trajectory.
Entrepreneurship is not just about livelihoods, it is also a powerful driver of innovation. Ideas with a compelling value proposition which disrupt entrenched interests are the starting point of the innovation cycle and eventually scale up to market dominance which others then look to emulate. Were it not for this virtuous cycle, much of what we take for granted today would be absent.
Demography is key to our growth ambition but skilling and gainfully utilising the young population is a challenge. In this context, while the share of self-employed workers rose from 52.2 per cent in 2017-18 to 58.4 per cent in 2023-24, economic growth will be more inclusive and sustainable when there is an increase in the number of hiring enterprises. Moreover, while the MSME footprint is increasing thereby indicating that the formalisation of the economy is underway, an increase in scale and productivity is needed for greater impact.
Odisha stands at an inflection point in this regard, transitioning from a resource-extraction economy to one with a diversified manufacturing base. Innovation driven growth – anchored by startups, MSMEs, and government-backed schemes – is the need of the hour to catalyse tangible economic transformation along with greater inclusivity.
The state has demonstrated remarkable capacity to attract and ground large-scale investment with Utkarsh Odisha &#8211; Make in Odisha Conclave 2025 seeing proposals worth Rs 16.73 lakh crore across 20 sectors. It is imperative to parlay this into greater entrepreneurial opportunities at the middle of the pyramid which will have a multiplier effect.
As on January 2025, Odisha hosted 18.7 lakh MSMEs; moreover, the development of 30 multi-product MSME Parks will particularly benefit semi-urban and rural entrepreneurs. Its startup sector has also achieved substantial formal recognition and financial backing with 4,551 operational startups and 40 incubators as of mid-2023.
A strategic pivot towards innovation-intensive sectors has been a top priority of Chief Minister Mohan Charan Majhi’s government with support from the Centre, and the recent announcement of a `400 crore Centre of Excellence in Semiconductor Materials and Devices at IIIT Bhubaneswar signals alignment with the India Semiconductor Mission. It represents tangible investment in high-tech manufacturing and R&D and will no doubt lead to knowledge transfer from academic institutions to entrepreneurial ventures.
Access to risk capital is the lifeblood of entrepreneurship. The Union government provides support through the Startup India initiative and dedicated funding and credit schemes like the `10,000 crore Fund of Funds for Startups managed by SIDBI and Startup India Seed Fund Scheme. The announcement of a `1 lakh crore Research, Development & Innovation (RDI) Fund to boost private sector R&D and innovation is an ambitious attempt to provide patient, long term capital rather than short term grants. Odisha too has a Startup Policy with an initial corpus of `100 crore to support 5,000 startups over five years; however, tailored seed and pre-seed funds, especially for women entrepreneurs, are needed and will help unlock latent talent.
Finally, many first-generation entrepreneurs require mentoring as they often have little or no experience relating to regulatory compliances, financial discipline, and marketing. A structured approach through incubators, angel investors, experienced professionals, and industry partnerships can be the secret sauce which leads to successful outcomes.
Odisha’s entrepreneurship outlook is positive but contingent upon execution of large capital projects and expanded credit access for MSMEs. The convergence of mega infrastructure projects, startup ecosystem development, and gender-inclusive financing mechanisms has created necessary conditions for economic transformation. Budding entrepreneurs must now step forward to make their mark.
(The writer is Managing Director of Indian Metals & Ferro Alloys Ltd and a former president of FICCI)

Question 5

India’s critical minerals push gathers steam

Accepted Answer

India stands at the crossroads in its journey towards a green, tech-driven future where critical minerals like lithium, cobalt, and nickel, along with rare earth elements (REE), will play a vital role. Used in everything from solar panels to EVs and washing machines to fighter aircraft, they cannot be replaced. However, India’s near-total import dependence has emerged as a significant strategic concern.
China, which controls 70% of rare earth mining and 90% of refining, has leveraged its dominance. In 2023, on the heels of the US restricting exports of advanced semiconductor chips, China imposed export curbs on gallium, germanium, and graphite citing national security concerns.
More recently, it restricted the supply of rare earth magnets in response to reciprocal tariffs. The resultant disruption to global supply chains was wide-ranging and, along with other steps targeted specifically at India, has raised questions about our industrial resilience. Addressing this will require strengthening domestic capabilities, including achieving technological self-reliance and diversifying global sourcing.

Despite holding the world’s third-largest REE reserve base, India contributes less than 1% to global output because deposits are largely low grade and there is hardly any processing capacity for downstream alloys and magnets. This is set to change dramatically with National Critical Minerals Mission (NCMM), led by the ministry of mines and supported by Geological Survey of India (GSI) and Khanij Bidesh India Limited (KABIL).
Announced earlier this year with an outlay of Rs 34,300 cr ($4 bn), the mission aims to ‘secure long-term sustainable supply of critical minerals and strengthen India’s critical mineral value chains encompassing all stages from mine exploration and mining to beneficiation, processing, and recovery from end-of-life products’. Essentially, it will transform India from a vulnerable importer to a leader in the critical minerals ecosystem.
While GSI has been tasked with conducting 1,200 exploration projects by 2030, UGC has proposed setting up a Centre of Excellence in Mineral Processing, and the Anusandhan National Research Foundation has allocated Rs 1,000 cr to support advanced research.
Additionally, a Rs 1,500 cr scheme launched in June under NCMM will promote a circular economy by supporting initiatives aimed at material recovery, reuse, and recycling. In this context, pilot projects in Telangana have shown potential for extracting scandium and strontium from the overburden of coal mines.
More recently, Quad Critical Minerals Initiative was launched to focus on securing and diversifying supply chains through collaborative efforts in mineral recovery, recycling, sustainable mining, and technology sharing. It also looks to counter non-market practices like export restrictions and encourages private sector engagement through the Quad Business Roundtable.
KABIL has entered into an agreement with CAMYEN, a state-owned enterprise in Argentina, for a lithium exploration and mining project, and the India-Australia Critical Minerals Investment Partnership will pursue lithium and cobalt assets Down Under.
Bilateral agreements have also been signed with Peru, Malawi, Mozambique, and Zambia, among others, and the ministry of mines has initiated the process of entering into G2G MoUs with Brazil and the Dominican Republic.
Further, with a view to amplifying its strategic positioning as a rising economic power, India is also part of multilateral platforms such as the US-led Minerals Security Partnership, Indo-Pacific Economic Framework (IPEF), Initiative on Critical and Emerging Technologies (iCET), and the G7 Critical Minerals Action Plan, which aim to promote innovation and circular economy practices to strengthen the critical minerals value chain.
Thus, there is a concerted effort to leverage the nation’s increasing sphere of influence to underpin economic ambitions. However, recent developments reflect potential hurdles. China’s export curbs on rare earth magnets, of which it controls 80% of global supply, have had a chilling effect on India’s EV industry and can also derail the success achieved in electronics manufacturing. It drew the attention of PMO, which held a high-level review meeting to take stock of the situation and assess the Rs 1,345 cr incentive scheme aimed at bolstering domestic manufacturing of rare earth magnets.
There are limitations on what can be done to significantly alleviate the impact of a continuing curb on exports by China. However, it is a definite call for action to develop indigenous capabilities and become self-reliant.
India’s clean energy ambitions and the renaissance of its manufacturing sector stand on a foundation of minerals it scarcely controls. NCMM is an ambitious roadmap to reduce import dependency by 30–40% by 2035 and, in conjunction with various policy initiatives and trade pacts, $100 bn in economic value stands to be unlocked by 2040. In effect, it is the bedrock of PM Narendra Modi’s vision of Viksit Bharat.
There will be challenges along the way but, if this strategy is executed with speed and at scale, the next decade will see India emerge as an important player globally in critical minerals, thereby securing its economic future while meeting climate commitments.

Question 6

Demographic advantage, Indian economy’s sweet spot

Accepted Answer

Much has been written about India’s emergence as an economic giant – it is the world’s fastest growing big economy, and is currently the fifth largest. Demographics is a major factor in propelling this rise given that the median age is around 29 years and 63% of the population is of working age. However, the labour force participation rate stood at 55.2% in 2022, according to a recent report released by the International Labour Organisation (ILO), which goes on to state that falling labour intensity is due to growth being led by the services sector rather than manufacturing. Therefore, while we are certainly not experiencing “jobless growth”, more steps are needed to harness the demographic dividend.
Continue with the reforms agenda
First and foremost, there is a need to press ahead with the ongoing reforms agenda as mentioned, if not accelerate, India’s growth trajectory as that will create opportunities galore. There was a welcome reference to this in Finance Minister Nirmala Sitharaman’s Budget speech to initiate and incentivise improvements in productivity and facilitate farmers and sectors to become more efficient. While there is much that the Centre has done to enhance ease of doing business, much more needs to be done to be seen, especially in the context of production concerns the States (which is where the action is). Hence, both need to walk in lockstep to broaden and deepen reforms.
The Economic Survey for 2023-24 states that technological advancements have led to a declining capital-to-output ratio and an increasing capital-to-labour ratio. It was perhaps in this context that Arvind Panagariya, economist and Chairman of the 16th Finance Commission, while speaking at a recent event in the Federation of Indian Chambers of Commerce and Industry said capital-led economic growth is not ideal as the country has an abundance of labour.
The reluctance of Micro, Small and Medium Enterprises, the backbone of employment, to grow in size and scale as well as that of large business houses to diversify into labour-intensive sectors can be attributed to the compliance burden and costs imposed by outdated labour laws.
The impasse over implementing the new labour code as approved by Parliament is sending a wrong signal to existing and prospective investors alike. It is important that one or two States with an evolving manufacturing ecosystem break the logjam by taking the lead.
The Centre’s efforts to give a boost to the manufacturing sector is generally viewed favourably but the fact that it is unsuitable for 45% of the workforce to be employed in the agricultural sector which accounts for only 15% of GDP. While we must focus on enhancing agricultural productivity, we must not forget those who are engaged in the services sector and more particularly those at the lower end of the services sector – which are highly manpower intensive but suffer from low productivity.
For this, robust skilling and reskilling programmes, innovation, human resources upgradation, and logistics sector are essential. More than the jobs, the skills we impart today will ensure tomorrow’s workforce is equipped to perform even better and stay ahead of the curve.
Skilling as a continuous process
There needs to be greater acceptance of making future skilling an integral part of society. The Economic Survey highlighted that only 4.4% of the workforce is formally skilled as compared to 24% in China. The gap is immense and must be addressed through meaningful public-private partnerships wherein industry plays an integral role in devising the curriculum and imparting “on the job training”. Moreover, skilling is not a one-time intervention but a lifelong process which requires flexibility in institutional mechanisms as well as learning agility.
The emphasis of the New Education Policy (NEP) 2020 on foundational skills as well as higher order cognitive skills and critical thinking is a good step but, in a constantly changing world, the document must be reviewed periodically and updated.

Impact of AI/ML
Finally, in an era of artificial intelligence (AI) and machine learning (ML), perspective tasks will be taken care of at much faster speed but there will always be a need for human intervention and oversight. While we must not underestimate the impact of AI/ML, neither should it be overestimated. The key is to have appropriate regulations in time to avoid the happenings that we fear of. In addition to the opportunities offered by various emerging sectors, AI/ML itself as estimated by Statista to grow by nearly nine times to become $267.3 billion worldwide market by 2030. Further, according to NASSCOM, India already has the second largest talent pool globally in this field but there remains gap between demand and supply of skills which is projected to widen. Though very much a risk, it is an opportunity which should not be missed.
Gainfully employing a large, young and aspirational population is not easy but it is a far better challenge than dealing with an ageing population given its attendant economic and societal implications. India is in the sweet spot and must employ a judicious approach to create a talent pool so as to harness this demographic dividend for the benefit of the world at large.
 
Originally published in The Hindu. Read the full story here.

Subhrakant Panda

Managing Director, IMFA | Past President, FICCI

Subhrakant Panda

Managing Director, IMFA | Past President, FICCI

Op-Ed