Strange bedfellows

BJP hugs Congress, AIMIM; panics after uproar Thane : Eyebrows were singed and blood pressures spiked when the Bharatiya Janata Party suddenly decided to hug its “sworn enemies” in Ambernath (Thane), and in Akot (Akola) – after the December 20 municipal council polls there. The BJP became snug under its saffron blanket with the Congress and Ajit Pawar’s Nationalist Congress Party – all to politically leave the Mahayuti ally, Shiv Sena led by Deputy Chief Minister Eknath Shinde, out in the...

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BJP hugs Congress, AIMIM; panics after uproar Thane : Eyebrows were singed and blood pressures spiked when the Bharatiya Janata Party suddenly decided to hug its “sworn enemies” in Ambernath (Thane), and in Akot (Akola) – after the December 20 municipal council polls there. The BJP became snug under its saffron blanket with the Congress and Ajit Pawar’s Nationalist Congress Party – all to politically leave the Mahayuti ally, Shiv Sena led by Deputy Chief Minister Eknath Shinde, out in the cold. Similarly in Akot, the BJP cozied up under the All India Majlis-E-Ittehadul Muslimeen (AIMIM)'s green quilt, without a shred of guilt, to shoo off the Congress-Vanchit Bahujan Aghadi and others from bagging the civic body. In Ambernath, the Shiv Sena had emerged as the single-largest party with 27 seats in the 60-Ward house, and in Akot, the BJP achieved the same feat with 11 seats in the 35-Ward house. Predictably, leaders across these parties rushed to douze the hayfires. A shaken Congress state chief Harshwardhan Sapkal suspended local leaders in Ambernath, including the local party chief Pradeep Patil, the executive committee and around a dozen elected municipal councillors. A dazed AIMIM state chief Imtiaz Jaleel, declared there was “no question of joining hands with the BJP”, and added grimly: “We have sought a report from the local party leaders, and after getting all details, we shall initiate appropriate disciplinary action,” a grim Jaleel said. Smarting under red-hot chilli criticism flung by Shiv Sena (UBT)’s Sanjay Raut and Aam Aadmi Party’s Preeti Sharma-Menon, Chief Minister Devendra Fadnavis shot out an earful to the local party leaders in Ambernath and Akot. “We shall not tolerate the alliances with Congress and AIMIM. These partnerships must be broken. If the local (BJP) units have worked out such deals, they are wrong and violate norms. We shall take stringent action against them,” warned Fadnavis. Later, BJP State President Ravindra Chavan slapped a notice on the Akot party units seeking an explanation. Ideological Somersaults Since 2019, the state has witnessed many such brazen ideological somersaults that have left political parties and voters shocked and awed. It started when the (undivided) Shiv Sena joined the Congress and (united) NCP to form the Maharashtra Vikas Aghadi (MVA) which ruled the state for two-and-half years. In the current civic elections season, even the MVA has fractured with Congress going solo or with local allies like Prakash Ambedkar’s Vanchit Bahujan Aghadi, while the Shiv Sena (UBT) and NCP (SP) have embraced the once-untouchable MNS. Adding to this is the flurry of local leaders-activists hopping parties, leaving voters bemused and bewildered, even as the parties fumbled to save their ideological credibility. Ambernath: Shoving out the winner Indulging in political creativity, the BJP, Congress and NCP floated the Ambernath City Development Front, uniting the BJP, Congress and NCP, intended to keep the Shiv Sena out of power at all costs. Ambernath falls in the Kalyan Lok Sabha seat of Dr Shrikant Shinde, son of Deputy CM Eknath Shinde, who is already at loggerheads with BJP state chief Ravindra Chavan, hailing from Dombivali town, also in Thane district. BJP-Shiv Sena fought against each other in the civic polls last month. In the 59-member Ambernath Municipal Council, the Shiv Sena won 23 seats, BJP 16, Congress 12 and NCP four. BJP’s Tejashree Karanjule was elected president through direct polls. Post-alliance, the BJP-Congress-NCP touched 32 seats, edging out the Shiv Sena which in its undivided form had ruled here for almost 35 years. Akot: Bulldozing to grab power The BJP, AIMIM formed the Akot Vikas Manch, which included Shiv Sena, Shiv Sena (UBT), NCP and NCP (SP) and Prahar Janshakti Party to wrest the 35-member house from potential claimants. The BJP won 11 and AIMIM five, and along with others, the AVM claimed a majority with 25 municipal councillors, and the Congress, VBA floundered with just 8 seats. The AVM was formally registered with the SEC. In the polls, BJP’s Maya Dhule was elected mayor defeating AIMIM’s Firozabi S. Rana.

Growth With Caveats

Amey Chitale
12 hours ago
4 min read

While India enters the year with enviable economic momentum, a long list of reforms still awaits completion.

January has a way of sharpening economic judgment. Companies tally their third-quarter results and sketch full-year ambitions while governments begin aligning policy signals and spending priorities for the next fiscal year. But before gazing ahead, India must reckon with the year just gone - a period that offered reassurance about the economy’s resilience even as it exposed stubborn structural gaps.

The global backdrop was hardly comforting. Growth remained uneven, with the IMF estimating world output at 3.2 percent in 2024 and 3.3 percent in 2025. Manufacturing continued to labour under supply-chain disruptions and trade frictions, while services proved more resilient. Geopolitics distorted commerce and capital flows, rewarding caution over exuberance. Against this unsettled canvas, India’s performance was respectable rather than spectacular. Growth slowed to 6.2 percent in the second quarter of FY25. Retail inflation averaged 4.9 percent, but food prices rose by a sharper 8.4 percent as erratic monsoons took their toll.

Ambitious Aims

The Economic Survey 2024–25 responded with ambition rather than defensiveness. Its lodestar was Viksit Bharat 2047: an India without extreme poverty, with universal access to education and healthcare, a fully skilled workforce, female labour-force participation of 70 percent, and a credible claim to being the world’s food basket. To reach a five-trillion-dollar economy by FY28 and Rs. 6.3 trillion by FY30, the Survey argued that India would need sustained nominal growth of 10 percent and real growth of about 8 percent. The chosen lever was deregulation. “Ease of Doing Business 2.0” was presented as a corrective to what the Survey identified as the economy’s chief constraint: regulatory overreach rather than fiscal or monetary tightness.

Four vulnerabilities framed the diagnosis. Manufacturing accounts for only 2.8 percent of global output, compared with China’s 28.8 percent. Credit to GDP, at 93 percent, suggests room for financial deepening. India depends on China for more than 90 percent of its rare-earth magnet imports, a strategic weakness disguised for too long by benign trade. The demographic window is both a gift and a threat as by 2026, some 923.9 million Indians will be of working age, demanding jobs at a pace institutions have yet to master.

Farm output was strong, with rural and urban consumption gaps narrowing, labour-force participation rising as unemployment fell to 3.2 percent. Banks enjoyed their cleanest balance-sheets in a decade, though stress was creeping into microfinance and unsecured retail lending.

The Union Budget sought to convert diagnosis into direction. Fiscal discipline was preserved: expenditure was set at Rs. 50.65 lakh crore, receipts at Rs. 34.96 lakh crore, and the deficit guided down to 4.4 percent of GDP under the FRBM path. Agriculture received a boost through the Dhan-Dhaanya Krishi Yojana for 100 low-productivity districts and a mission for self-reliance in pulses. MSMEs were courted with higher classification thresholds and expanded credit guarantees, unlocking an estimated Rs. 1.5 lakh crore of incremental lending. Public capital expenditure, at Rs. 10.18 lakh crore, remained the economy’s flywheel, complemented by a Rs. 10 lakh crore asset-monetisation pipeline and Rs. 1.5 lakh crore in long-term loans to states.

Trade ambitions were revived through an Export Promotion Mission and the BharatTradeNet platform, with an eye on lifting merchandise exports towards 300 billion dollars by 2030. The budget also gestured at GST rationalisation, expanded PM-KISAN and the Garib Kalyan Anna Yojana for 80 crore beneficiaries, and offered forward guidance on capex.

Deregulation has moved from rhetoric to statute. The Jan Vishwas Act of 2023 decriminalised 183 business-related provisions, replacing punishment with remediation; a second instalment promises to extend this logic to more than 100 additional laws. PAN 2.0 has made tax identification instant and paperless, nudging fintech adoption and formalisation among small firms. States, prodded by the Business Reform Action Plan, have begun linking regulatory reform to industrial expansion.

Familiar Obstacles

That said, labour-law rationalisation and land reform remain hostage to state-level resistance. Environmental clearances are quicker on paper than in practice. Banks, despite the Reserve Bank of India’s easing, still chafe under layered compliance. A high-level committee on regulatory reform is expected to report by early 2026, while a proposed Investment Friendliness Index aims to shame laggard states into action. Risk-based compliance could yet invigorate MSMEs and startups, but tariff simplification (now compressed into eight slabs) must still resolve duty inversions that penalise domestic value addition.

Nowhere is strategic vulnerability clearer than in rare-earth permanent magnets. Imports exceeded 90 percent of demand, a dependence that became painfully visible in April 2025 when China imposed export controls. Electric vehicles, renewable-energy firms and defence manufacturers faced cost increases of 15 to 20 percent and sharply longer lead times. India imported around 53,000 tonnes of magnets in FY25; demand is expected to double by 2030. The government has responded with a Rs. 16,300 crore National Critical Mineral Mission and a Rs. 7,280–7,350 crore incentive scheme to build an integrated domestic magnet ecosystem with 6,000 tonnes per annum of capacity. Overseas acquisitions and mineral auctions add ballast. While dependence on China may fall to 60–70 percent by 2030, near self-sufficiency is unlikely before 2035.

Finance, by contrast, has been a rare source of cheer. Gross non-performing assets fell to a 12-year low of 2.2 percent, or about Rs. 1.5 lakh crore on a credit base of Rs. 181 lakh crore. Public-sector banks improved to 2.5 percent; private lenders held at 1.8 percent. Credit growth moderated to 10.2 percent by mid-2025 as firms tapped capital markets, while retail and MSME lending held steady. The IPO market was exuberant: 373 listings raised Rs. 1.95 lakh crore, making India the world’s busiest bourse for new issues. Domestic investors displaced foreigners, cushioning outflows without dulling market confidence.

Monetary policy helped as the RBI cut rates by 125 basis points in 2025, shifting decisively from inflation control to growth support. Liquidity swung into surplus; inflation drifted towards the 3–4 percent comfort zone.

As the year unfolds, the question is less whether India has momentum than whether it can sustain reform through execution. Self-reliance demands institutional persistence and political patience. Deregulation offers the clearest path to faster growth. The destination is enticing. The journey remains unfinished.

(The author is a Chartered Accountant with a leading company in Mumbai. Views personal.)