High-stakes chess beneath the surface

BJP Candidates coming out after filing their nomination for the upcoming Legislative Council Polls from Vidhan Bhavan in Mumbai on Thursday. Pic: Bhushan Koyande Mumbai: Typically, when a ruling coalition enjoys a formidable and comfortable majority, elections to the Rajya Sabha and the State Legislative Council are quiet, predictable affairs. They are often viewed as mere formalities, rarely capturing the public imagination or dominating front-page headlines. Historically, these indirect...

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BJP Candidates coming out after filing their nomination for the upcoming Legislative Council Polls from Vidhan Bhavan in Mumbai on Thursday. Pic: Bhushan Koyande Mumbai: Typically, when a ruling coalition enjoys a formidable and comfortable majority, elections to the Rajya Sabha and the State Legislative Council are quiet, predictable affairs. They are often viewed as mere formalities, rarely capturing the public imagination or dominating front-page headlines. Historically, these indirect elections only become newsworthy under specific conditions: either the ruling coalition is plagued by internal fissures, or the opposition is too fragmented to put up a united front. In Maharashtra, however, the political landscape remains highly volatile. Recently, the Rajya Sabha elections became the center of intense media scrutiny, and over the past week, the Legislative Council polls followed suit. Although all ten candidates—nine from the ruling alliance and one from the opposition Maha Vikas Aghadi (MVA)—are now set to be elected unopposed, the intricate backroom maneuvers that led to this truce kept the state’s political circles buzzing. Interestingly, the reason for this heightened news value can be traced to both a subtle tug-of-war within the ruling combine and a visibly weakened opposition. Shifting Strategy The maneuvering within the opposition ranks has been particularly telling. A major focal point of the election buildup was the anticipated candidacy of Shiv Sena (UBT) Chief Uddhav Thackeray. After generating considerable hype and speculation about a potential return to the legislature, Thackeray ultimately chose to withdraw from the electoral fray. This sudden pullback forced a rapid recalibration within the MVA. Initially, the Congress party had adopted an aggressive posture, declaring its intention to field a candidate if Thackeray decided against contesting. However, following closed-door deliberations with Shiv Sena (UBT) leadership, the Congress quietly backed down. Why the state Congress leadership so readily acquiesced to this sudden change in strategy, sacrificing a potential seat, remains a mystery and a subject of intense debate among political observers. On the other side of the aisle, the ruling Mahayuti coalition maximized this electoral opportunity to consolidate its political base, reward loyalists, and balance complex regional equations. The Nationalist Congress Party (NCP) strategically paved the way for the political rehabilitation of former Congress legislator Zishan Siddique by nominating him to the Legislative Council. This calculated move introduces a prominent new Muslim face for the party, likely intended to fill the leadership vacuum in Mumbai left by veteran leader Nawab Malik. Meanwhile, Chief Minister Eknath Shinde used his nominations to send a definitive message about the premium he places on loyalty. By securing another term for Dr. Neelam Gorhe, Shinde demonstrated that those who stood by his faction would be adequately rewarded. Furthermore, by bringing Vidarbha strongman Bachchu Kadu into the fold, Shinde has attempted to anchor his party’s future and expand its footprint in a region predominantly controlled by his senior alliance partner, the BJP. The Bharatiya Janata Party, playing its characteristic long game, meticulously ensured that its list of six candidates struck the perfect organizational, social, and political balance. Battle for LOP Despite these broader alliance strategies, the most consequential nomination in this electoral cycle is arguably that of Ambadas Danve. Barely six months after completing his tenure in the Upper House and stepping down from the prestigious post of Leader of the Opposition in the Legislative Council, Danve has been nominated once again by the Shiv Sena (UBT). With his return to the house, there is a strong possibility that he will reclaim his former post. This specific development highlights a much deeper crisis within the Congress. Following Danve’s brief retirement, the Congress had naturally emerged as the largest opposition party in the Upper House. This mathematical advantage theoretically paved the way for their Kolhapur strongman, Satej “Banti” Patil, to lay claim to the Leader of the Opposition’s chair. However, the sudden defection of Congress MLC Pradnya Satav, who switched loyalties to the BJP, severely dented the party’s numbers. Her departure brought the Congress’s strength in the house just below that of the Shiv Sena (UBT). Stripped of its numerical superiority overnight, the Congress was relegated to being a mute spectator, unable to assert its rightful claim. Internal Dissent This series of tactical defeats has triggered palpable frustration within the Congress’s state unit. One senior Congress leader, speaking on the condition of anonymity, expressed deep disappointment with the state leadership’s inability to protect the party’s interests. “Everyone has personal political ambitions, but leaders must learn the ways to collectively move ahead and strategize,” the leader remarked, attributing the party’s current stagnation in Maharashtra to this lack of cohesive vision. In short, these Legislative Council elections have delivered one message loud and clear: even when everything appears calm and stable on the surface, the relentless machinery of politics continues to churn behind the scenes. No political player in Maharashtra can afford to rest assured or sit idle under the illusion that there are no major state elections until 2029.

AI Vulnerabilities and Digital Payment

Sagari Gupta
2 days ago
4 min read

India’s rapid shift toward a digitally mediated financial system has delivered gains in efficiency, inclusion, and transaction speed. At the centre of this transformation is the Unified Payments Interface, now processing billions of transactions each month and functioning as the backbone of retail payments. This architecture improves access and reduces friction, but it also concentrates operational dependence within a tightly connected system where vulnerabilities can scale quickly.

Recent advances in AI-based code analysis systems, including autonomous vulnerability detection tools under development in frontier AI firms such as Anthropic, have expanded concerns about cybersecurity exposure in critical infrastructure. These systems are framed as defensive tools for identifying software weaknesses, but their capability profile raises dual-use concerns. The ability to map vulnerabilities across large codebases at scale shifts cyber risk from isolated breaches toward systemic exposure across interconnected financial networks.

India’s payment infrastructure depends on layered integration between banks, payment providers, and the central switching system operated by the National Payments Corporation of India. This structure enables scale and near real-time settlement across financial actors. Its efficiency is linked to interdependence, where disruption in one layer can propagate quickly across others, especially when legacy systems are not uniformly hardened.

Unknown Vulnerabilities

The concern is not only system outages but also the possibility of AI systems identifying previously unknown vulnerabilities across banking software and API layers. In such cases, the challenge moves from detection to containment of adaptive exploit patterns that evolve faster than conventional response systems. Recovery timelines may extend if attacks target logic-level weaknesses rather than surface infrastructure.

From a macroeconomic perspective, the Reserve Bank of India focuses on inflation control, liquidity management, and financial stability. Digital payment systems influence transaction velocity and play an indirect role in monetary transmission. While a major disruption would not lead to immediate monetary failure, it could introduce short-term frictions in liquidity flows.

In a stress scenario, economic agents may temporarily shift toward cash holdings, altering currency circulation patterns. Such behavioural adjustments complicate liquidity forecasting and short-term policy calibration. They may also distort high-frequency economic indicators that central banks rely on for real-time assessment.

India’s banking system exhibits uneven cybersecurity capacity across institutions. Large private banks and globally integrated financial institutions invest significantly in threat intelligence, continuous testing, and cyber defence systems. In contrast, several public sector and smaller banks operate with legacy systems and constrained cybersecurity budgets. This creates asymmetric exposure to cyber risk. If advanced AI-based vulnerability tools become unevenly accessible, the gap in defensive capacity may widen. Cybersecurity risk then becomes linked not only to system design but also to institutional capability. From a systemic standpoint, financial stability depends on the resilience of weaker institutions as much as on stronger ones. This raises a policy question about whether cybersecurity should remain market-driven or be treated partly as shared infrastructure.

India’s approach to AI governance is evolving through initiatives such as the India AI Impact Summit and related policy frameworks. These efforts recognise AI as a strategic domain intersecting with economic policy, innovation, and security considerations. However, current regulation remains focused on data protection, algorithmic transparency, and consumer-facing applications.

The emergence of autonomous systems capable of interacting with software infrastructure suggests a need for expanded regulatory scope. One policy direction under consideration globally is structured auditing of high-capability AI systems. This involves evaluating whether such systems can be misused to identify or exploit vulnerabilities in critical infrastructure, including financial networks. The objective is to establish baseline safety standards for systems with systemic risk potential. Such frameworks would require coordination between financial regulators, cybersecurity agencies, and technical oversight bodies. They would also need to remain adaptive as AI capabilities evolve.

From a development economics perspective, financial systems shape individual capability. The framework associated with Amartya Sen highlights that economic security depends on reliable access to systems that enable participation in economic life. In a digital financial environment, cybersecurity becomes a condition for maintaining that access.

If individuals are unable to use payment systems, access savings, or rely on digital transactions due to disruptions, their economic functioning is constrained. Cybersecurity therefore becomes a welfare concern, not just a technical issue.

Policy Challenge

The policy challenge is to align the growth of AI capability with proportional safeguards in financial infrastructure. This requires strengthening institutional resilience through continuous stress testing, including scenarios that account for AI-driven threats. It also requires reducing asymmetry in cybersecurity capacity by improving access to defensive tools across institutions.

Governance frameworks must incorporate security auditing as a standard requirement for advanced AI systems, particularly those with code-level or autonomous capabilities. This ensures that technological progress is accompanied by appropriate safeguards.

India’s digital public infrastructure remains among the most advanced large-scale payment systems globally. Preserving its stability requires anticipating both conventional cyber threats and emerging risks associated with increasingly autonomous software systems. The objective is not to slow digital transformation, but to ensure that its foundations remain secure under evolving technological conditions.

International coordination is also relevant as financial systems become interconnected across jurisdictions. Cyber incidents in one system can transmit through correspondent banking relationships and shared infrastructure providers. Harmonised cybersecurity standards for systemically important institutions can improve resilience.

Domestic policy can further strengthen stability through redundancy in payment routing, improved system segmentation, and stronger incident response protocols. Clear communication during disruptions is equally important to maintain public trust and prevent behavioural shocks that amplify technical failures. Over time, resilience in digital finance will depend on combining technical safeguards with institutional coordination and regulatory clarity. This will allow continued innovation in financial technology while maintaining stability in core economic functions.

India’s experience shows that digital finance can scale rapidly when supported by strong infrastructure and governance. The next phase requires integrating cybersecurity into the core design of financial systems rather than treating it as an external layer. This shift is essential to ensure that technological progress strengthens the foundations of economic security.

(The author is an independent public policy researcher. Views personal.)