September 23, 2025

Current Affairs

Why was Indonesia rocked by Protests?

Context: Recently, Indonesia witnessed violent protests against a range of cost-of-living issues. The protests have generally been seen as an incitement of anger against the elites by the middle class.

Relevance of the Topic : Prelims: India and its neighbourhood: Indonesia

Indonesia, Southeast Asia’s largest democracy and economy, was rocked by one of its most intense waves of protests in recent years. Protestors attacked public buildings, burned down and looted houses of public officials.

Causes of the Protests in Indonesia

Public resentment against elite privileges: Members of Parliament in Indonesia receive a monthly housing allowance of 50 million rupiah (about $3000) which is almost ten times the national minimum wage.
Austerity measures introduced by the government: President Prabowo’s government announced budget cuts worth 306 trillion rupiah (approximately $18.8 billion) to fund the flagship school meals programme. This led to steep budgetary reductions in vital sectors such as public works, economic affairs, investment, and higher education.
Tax hikes by regional governments: To offset the impact of reduced central funding, regional authorities imposed heavy tax increases. E.g., 250% hike in property tax in Pati, Central Java.
Income inequality: While the Gini coefficient of Indonesia has been declining, the country still registers one of the highest levels of inequality in the Southeast Asian region. As per an Oxfam report, Indonesia ranks sixth among countries with the greatest wealth inequality.
Additional issues include low wages and job insecurity. Education also remains underfunded, with various barriers restricting higher education.

Also Read: India-Indonesia Bilateral Relations

At the regional and global level, Indonesia’s political stability is crucial for ASEAN and for global supply chains that depend on Southeast Asia’s largest economy. Continued unrest could therefore affect not just Indonesia but the wider region.

Issues with Sikh Marriage Registration

Context: The Supreme Court has directed 17 States and 8 Union Territories to frame rules for the registration of Sikh marriages under the Anand Marriage Act, 1909, within four months.

Till then, Sikh couples can register their marriages under existing laws. This ensures legal recognition of Anand Karaj marriages, but it does not solve deeper problems with the Act.

Relevance of the Topic: Prelims: Anand Marriage Act.

What is Anand Karaj?

Anand Karaj, literally “blissful union”, is the prescribed form of marriage in the Sikh faith.
The ceremony is conducted in the presence of the Guru Granth Sahib, the holy scripture of the Sikhs.

Anand Marriage Act 1909:

In the early 20th century, efforts by the Sikh community for legal recognition of their distinct marriage ceremony (specifically to differentiate it from Hindu rituals) led to the enactment of the Anand Marriage Act in 1909.
The Act legally sanctifies all marriages solemnised through the Anand Karaj ceremony. However, the original Act did not include provisions for the registration of these marriages. This gap was addressed over a century later with the Anand Marriage (Amendment) Act, 2012.

Anand Marriage (Amendment) Act, 2012:

The Amendment introduced Section 6, which directed state governments to create rules for the registration of Anand Karaj marriages.
Once registered under the Act, a couple would not need to register their marriage under any other law.

Issues with Anand Marriage Act

The Act only provides for recognition and registration of marriages but does not cover divorce, custody, or other matrimonial disputes.
Sikh couples seeking divorce must still rely on the Hindu Marriage Act, 1955, which undermines the distinct identity of Sikh personal law.
Most States and Union Territories have still not framed rules for the registration of Anand Karaj marriages, despite the 2012 amendment.
The failure to notify rules has denied Sikh couples a statutory facility and created uneven access to their legal rights.
Without a marriage certificate, Sikh couples face hurdles in matters of residence, maintenance, inheritance, and succession.
This inaction has effectively disenfranchised a large section of the Sikh community from the benefits of a central law.

The SC recently addressed this gap and issued a comprehensive set of directions to all States and Union Territories to frame rules for registration of Anand Karaj marriages within four months and held that no application can be refused in the meantime.

Limitations of Supreme Court recent directions:

The order only addresses the problem of registration and does not resolve deeper legal gaps such as provisions for divorce, custody, or other matrimonial disputes.

As a result, Sikh couples must still rely on the Hindu Marriage Act, 1955 for matters beyond registration, leaving the larger demand for a comprehensive Sikh Marriage Code unaddressed.

The problem with Low Inflation

Context: Inflation in India has fallen sharply in recent months. CPI inflation was at just 2.07% in August 2025 and WPI inflation at 0.52%. While this trend is positive for consumers, it poses challenges for the Union Government’s fiscal arithmetic and Budget management.

Relevance of the Topic: Prelims: Concept of Inflation; Low Inflation: Issues and Implications.

Inflation refers to the sustained rise in the general price level of goods and services. While high inflation erodes purchasing power, moderate inflation is considered desirable as it supports growth and helps maintain fiscal balance.

However, persistently low inflation, as seen in India in 2025 with CPI inflation at 2.07% and WPI inflation at 0.52%, poses distinct challenges for the economy and government finances.

Issues with Low Inflation

Slower Nominal GDP Growth: The government’s fiscal calculations depend on nominal GDP, which includes both real growth and inflation. With prices barely rising (stagnant) due to lower inflation, nominal GDP growth has slowed falling below the 10.1% assumed in the Union Budget 2025-26.
Weaker Tax Revenues: Tax collections are directly linked to nominal GDP growth. Lower inflation means slower growth in the value of goods and services i.e., weak GST and excise revenues. In April-July 2025, gross tax revenue grew by only 1% year-on-year, while net tax revenue declined by 7.5%.
Fiscal Deficit Ratios Under Strain: The fiscal deficit and debt are measured as a share of nominal GDP. With a lower GDP base, deficit and debt ratios look worse even if the government’s borrowing remains constant. This risks India’s FRBM targets (3% fiscal deficit in the medium term, 60% debt-GDP ceiling).

Implications of Persistently Low Inflation:

Budgetary Stress: Lower tax revenues make it harder for the government to meet Budget targets and maintain fiscal discipline. Budget credibility is undermined if revenue projections repeatedly fall short.
Borrowing vs. Spending Cuts: The government may struggle to meet its revenue targets, which could force either higher borrowing or cuts in planned spending.
Weak Demand and Employment: Persistently low inflation often reflects weak demand, which can delay job creation and wage growth.
Discouraged Private Investment: Weak demand discourages private investment despite high corporate profits.

Vicious Cycle Risk: In the long run, prolonged low inflation can create a vicious cycle of weak demand, lower revenues, and constrained fiscal space.
Monetary Policy Challenge: RBI has an inflation targeting mandate (4% ±2%). Too-low inflation limits its ability to cut rates (real interest rates rise when inflation falls).
Agricultural distress: India’s CPI is food-heavy (~45%). Weak food inflation reflects rural distress and falling farm incomes.

Is Low Inflation always Bad?

Low inflation is not always harmful. If it is driven by productivity gains, technological innovation or supply-side efficiencies, it benefits consumers by reducing costs without damaging fiscal health.
If caused by weak demand and poor investment sentiment or agricultural distress, it signals structural weakness, reduces revenues, squeezes fiscal space, and slows down both growth and revenues.

For sustainable growth, India requires moderate inflation driven by healthy demand and productivity improvements.

Sawalkote Hydroelectric Project

Context: The stalled Sawalkote Hydroelectric Project is under renewed consideration. The Expert Appraisal Committee (EAC) of the Environment Ministry is set to review its clearance amidst the Indus Waters Treaty (IWT) being in abeyance after the Pahalgam terror attack.

Relevance of the Topic: Prelims: About Sawalkote Hydroelectric Project (HEP).

Sawalkote Hydroelectric Project (HEP):

Sawalkote HEP is located on the Chenab River in Jammu & Kashmir.
It has a planned installed capacity of 1865 MW (1406 MW in Stage I and 450 MW in Stage II).
The project involves a 192.5-metre-high concrete gravity dam with a reservoir capacity of 530 MCM spread over 1,159 hectares.
It is officially termed a run-of-river scheme, but experts contest this due to its large reservoir.

Delays surrounding the Project:

Originally conceived in 1984, the project has faced delays due to Centre-State disagreements and restrictions imposed by the Indus Waters Treaty (IWT) that limited India’s use of western rivers.
In 2017, the Expert Appraisal Committee (EAC) recommended environmental clearance, but final approval was withheld due to pending forest clearance.
After the suspension of the IWT in 2025 following the Pahalgam terror attack, the project was revived as a strategic priority for India.

The government views it as critical for strengthening energy security in Jammu & Kashmir and for enhancing India’s strategic leverage over the Chenab River.