Why “No” is a default answer

Continuing from the previous week (Just like that)

Have you noticed that whenever you ask your child to break a routine, e.g., wake up early, sleep on time, eat healthy, spend less time on the phone; the default response is mostly “no”! You try to offer incentives or sometimes use threats to elicit compliance, which in most cases is not a durable response.

Try remembering your childhood – didn’t you also behave in the same manner with your parents, as your child is doing with you?

Now recall the response of the government officer, customer care executive, your senior in the office, your housemaid, your car mechanic, et. al. whenever you made a request that was not routine or strictly as per the laid down procedure. Wasn’t the default answer mostly “no”.

In my view, the default “no” is deeply ingrained in our social and cultural consciousness. This could be one of the root causes of several problems afflicting our society. We as a society are not adequately trained to manage exceptions. It is one of the major causes of widespread corruption, avoidable litigation, and mafia.

What a “no” costs

A flat “no” for a small deviation that could have been ignored or corrected leaves you with three choices. You can pay the officer, hire a middleman, or go to court. Say a minor defect in your papers means two more rounds of a government office. Paying Rs 2,000 to get it done today looks cheaper than two lost days, and many of us pay. The work gets done, but the citizen has paid extra in money, effort and time.

The worst damage is slower. You stop trusting the system. Middlemen find a steady business. Bribery starts to look normal, and in the worst cases, the mafia fills the gap.

Why the officer says “no”

Since last week’s post, I have been thinking about why the officer says no so quickly. Part of it is habit. But I think a large part is plain safety. If he says no, nobody can question him. If he says yes to an exception and something goes wrong later, he alone has to answer for it, maybe years later, in an audit or an inquiry.

This is the same thing I wrote about last week: adding a check is safe, and removing one is risky. The officer is not stupid or lazy. He is doing the sensible thing for himself. So, I would not blame culture alone. Culture teaches the habit, and the incentive keeps it going.

Why a simple fix will not do

My answer was simple: review the procedures, build rules for exceptions into them, and train officers to say “this can be done this way” instead of “this cannot be done”. I still believe in it, but there is a catch. If every exception depends on one officer’s judgment, we have only given him more power, and more power at the counter is exactly where bribes come from.

So, exceptions need a written route. A short list of small defects that can be corrected at the counter, such as a missing stamp or a spelling mismatch. A fixed time limit. A record of what was allowed and why. And a senior who must decide within a few days if the officer cannot. With this, the officer is covered when he says yes, and the citizen has a way forward when he hears no.

Teaching children to handle a break from routine is a good idea too. It will take a generation to show results, so it cannot be our only answer, but it costs very little to begin.

What this means for an investor

You can carry the same thought into investing, but I need to be careful here. When you read the management commentary of your companies, you will often find lines like these:

·         The execution of the project was delayed because it rained heavily during the monsoon.

·         Pollution control measures in Delhi NCR impacted the execution of projects.

·         We could not meet margin guidance due to raw material inflation.

·         Forex loss affected the reported profit by 10%.

·         Shortage of raw material due to the war in the Gulf region impacted production materially.

·         Competition from cheap Chinese imports is hurting margins.

When I first read these, I called them excuses. That is too harsh, because some are fair reasons. What matters is which kind of reason it is.

Some of them are predictable. The monsoon comes every year. Pollution curbs in Delhi NCR have been a regular feature of recent winters. Raw material prices go up and down, and currencies move. A company that is caught out by these again and again has not planned well. A forex loss that cuts profit by 10% suggests a large exposure was left open. It may have been a choice, because hedging costs money, but as an investor you should know it was a choice.

Others are not predictable. A war that cuts raw material supply is not something anyone can plan for in detail. Here the test is not whether the shock came, but how the company responded. Did it find another supplier, pass on the cost, or just wait? Competition from cheap Chinese imports is a different matter again. It is not an exception at all. It is a question about the company’s cost position and pricing power, and it depends on your view on the quality of the business.

So, I would not cut a company’s valuation just because its commentary has a reason in it. I would ask a few questions first:

·         Does the same reason come up quarter after quarter?

·         Did peers face the same problem and do better? If they did, the reason is not the whole story.

·         Has management met its own guidance in the past, or does it keep missing?

·         Does the company hold buffers, such as cash, hedges or alternative suppliers, for risks it knows will come back?

If the answers are poor, I would want a bigger margin of safety before I buy. I do not have a formula for it, and I would be wary of anyone who says they do.

A good system says “no” when it must, and “yes, if” when it can. I would look for the same habit in a good management. I would also like to hear your own experience of the default “no”, from either side of the counter.

 

Just like that

Until a few years ago, the baggage tags on all hand baggage were mandatory for all air passengers. The security personnel must stamp these tags for security clearance. Often you lost the tag while waiting for your flight; or the security personnel missed stamping the tag and you did not notice it; or the wet stamp ink got erased before you reached the flight gate. The security personnel at the gate would not let you board the flight and you had to scramble to get the tag stamping again. Then one fine morning some bureaucrat decided that hand baggage does not need to be tagged and stamped. Maybe an old parent of some top bureaucrat or politician or judge was made to run to get a tag stamped, which triggered this change in the mandate.

A rule that irritated passengers every single day went away with the issue of a simple circular. I wonder why it took so long, and what else is still waiting.

We face many similar situations in our routine life which makes us wonder why these rules exist and who will take the decision to change these rules to make our already stressful lives slightly easier. For example, have you ever been in any one or more of the following situations:

Rules that nobody looks at again

The missing stamp. A form or an application for your business goes to the bank or a government office. It is complete, signed and the figures are right, but the rubber stamp is missing, so it comes back. In most cases the stamp tells the clerk nothing that the signature and the company name do not already say. It stays because it is on the checklist.

The tree. A tree stands on a busy road and chokes the traffic. Court orders and tree protection rules do not allow it to be removed, and I understand why, because our cities have lost far too many trees. But a jam that runs for hours every day burns fuel, wastes time and adds to pollution too. I have not worked out the numbers, but I doubt the tree is winning that trade. The rule says no, and seems to have no easy way of saying yes with conditions, such as shifting the tree or planting many more elsewhere.

Rules that are fine on paper, but not at the counter

The barricade. A police barricade narrows the road and slows everything down, but nobody is checking anything. Cars crawl through a barrier that has no one to stop them. We pay the delay and get no security.

The security check. At malls, hotels and office buildings, it can take 20 minutes to clear the “security check”. The guard asks you to open the trunk, looks at it for a second and shuts it. He does not seem to know what he is looking for, and most of the time he does not even look at what is stuffed inside. Call it anything, but not a security check. We go through this almost every day.

The bank and Aadhaar. Your passport and driving license carry the address of your hometown. Your bank account, phone connection and LPG connection were given on the basis of your Aadhaar card, which carries your current address. Now the bank refuses Aadhaar as address proof for re-KYC. This refusal may not be strictly as per the RBI rules, but is common in practice.

Offices that do not talk to each other

The address loop. You move to a new city and rent a house. Now the address has to change in your passport, bank account, driving license, LPG connection, phone connection, voter ID, mutual funds and so on. Each office wants a document that another office issues, and the order in which you do things decides whether you get out at all.

The repeat test. The doctor at a hospital or clinic does not accept the reports from another hospital or an independent lab, and wants you tested again at a lab of his choice. Sometimes he has a fair reason. The report may be old, or the method may be different, and a treatment decision should not rest on a stale number. But when it is a routine test from a good lab done last week, the repeat is only an extra cost. From the patient’s side, I cannot tell which of the two it is, and that is the real problem.

The jam that was not there

You are stuck in a long jam. After crawling for half an hour you reach the end and find nothing at all that was causing it. You just drive away. Traffic people call it a phantom jam. Hours ago someone took a wrong turn or braked a little too hard, and the one behind braked harder, and the wave kept travelling backwards long after the first driver was gone. A small mistake somewhere, and thousands of people paying for it for hours.

With great powers comes no accountability

These instances reflect, inter alia, on the efficacy of our governance system, awareness of our society and how we look at the process of reforms. I would not say the whole system is broken. My reading is narrower. Making a rule has an owner, but removing one has none. An officer who adds a check is safe and often has no accountability. An officer who removes one carries the blame if something goes wrong later. There is no incentive for reforms.

I shall be happy to hear the views of the readers before I write more on this subject next week.

 

Take it or leave it

The Indian equity markets continue to notably underperform its global peers, despite assurances of a resilient economy and decent corporate performance. Experts have attributed the underperformance to incessant selling by the foreign investors and geopolitical uncertainties. Both are valid reasons. But I do not think these explain the full picture.

Foreign selling is an effect, not a cause

Foreign portfolio investors (FPIs) have been net sellers in four out of the past five years. Obviously, they are not selling for fun. Something seems to have changed in how they see the risk and the return from India. The selling, therefore, tells us “what” is happening, not “why”.

Part of the “why” is global. Treasury bonds in the developed economies are yielding highest in over two decades, providing global investors a safer option to invest. The rupee is flirting with 96 to the dollar, which cuts dollar returns even when the Nifty stays flat. Neither of these is India-specific. They hit every emerging market.

Geopolitics is affecting India mostly through oil and other raw materials. Expensive crude, chemicals, metals, etc. means higher imported inflation and a weaker rupee. That is a real cost, but the economy is absorbing it. The RBI’s own estimate for FY27 growth stands at 7.1%, after the oil shock and the weaker rupee are already in the numbers. Domestic institutions are also buying, so net flows (FPI plus DII) remain positive. A market that falls under these conditions is telling us that the risk premium foreign investors are willing to pay for India has changed.

The one cause that is in our own hands

I think, among other things, policy and legal uncertainty is one of the reasons global investors are staying away. I have highlighted this before (see here). The government itself acknowledged it in an Economic Survey (see here). Over the past decade, India has seen more than one sudden shock. The retrospective tax of 2012 was repealed only in 2021, after costly arbitration losses. The higher surcharge on FPIs in the 2019 Budget was rolled back within weeks. Each was corrected in the end. But the correction came after the damage, and that pattern is what erodes the trust between government and enterprise.

Two recent instances are noteworthy in this context.

Tiger Global: the ruling and the repair

In January this year, the Supreme Court ruled that Tiger Global must pay capital gains tax in India on its 2018 sale of Flipkart shares to Walmart. The court found that Tiger Global’s Mauritius entities acted as simple conduits for tax avoidance rather than active local businesses. The court emphasized that a Tax Residency Certificate (TRC) issued by Mauritius no longer automatically guarantees tax treaty relief. Tax authorities can look past paperwork to see where real control and business decisions happen. The judgement said India’s General Anti-Avoidance Rules (GAAR) can override older treaty benefits if an arrangement lacks commercial substance, even for older investments.

To be fair, I would not defend a structure with no commercial substance. The court was enforcing an existing anti-avoidance law, not inventing a new one. The real difficulty is for investors who believed that investments made before April 2017 were protected, which is what the 2016 treaty protocol seemed to promise.

On March 31, 2026, the CBDT amended the GAAR rules so that income from the transfer of investments made before April 1, 2017 stays outside GAAR. That is a welcome step. But the issue may not be closed yet. The “substance over form” reasoning and treaty-level anti-abuse clauses are still available to the tax department, and it is not clear that the relief reaches Tiger Global itself. Shock first, patch later, some doubt left over. That is a worrying pattern for investors.

Prima facie, this mostly concerns private equity and venture capital investors, not the FPIs selling listed shares. But long-term capital talks to each other. What one set of investors learns about exit risk soon becomes part of how everyone prices India.

Hospitals: a risk building, not yet a shock

The healthcare sector in India has attracted substantial foreign capital in the past decade. Foreign investors now hold material stake in most of the corporate hospital chains in India. Recently, the Supreme Court of India criticized corporate hospitals for overcharging patients and suggested that they should be operating as service providers rather than attempting to maximize profit. The government is yet to clarify its stand on the issue, creating significant uncertainty for foreign investors who have invested heavily in Indian hospitals.

If a margin cap is actually imposed, it will come with little notice and no transition. Investors have seen that film before.

What I make of it

The message from these episodes seems to be that India is no haven for those looking for tax arbitrage or policy loopholes. The call reads as “either play by the rules or leave”. That is a fair position for any country, provided the rules are clear and known before the money goes in. Investors can live with strict rules. What they cannot price is a rule that gets interpreted or redrawn after they have invested. For now, foreign money’s verdict seems to be to trim exposure.

Investor takeaways

·         FPI selling is not a verdict on India’s growth. The growth is decent. But do not dismiss it either; markets sometimes see risks before the data does.

·         Watch the follow-through, not the headline. The final government stance on hospital pricing, and how the tax department applies the GAAR amendment in pending cases, will tell us more than any media headline.

·         Treat price-regulation risk in listed hospital chains as a real input to valuation, not as noise.

·         Stay selective on FPI-dependent segments until there is more clarity. Domestic flows are a cushion, not a substitute.

·         Do not assume that a patch for one problem means the pattern has ended. Look at how quickly and how clearly the next one is handled.

Ideas are valuable, execution is critical — Except when neither works

For any enterprise to succeed, ideation and execution have to work together. Execution has nothing to execute if there’s no idea behind it. And an idea, however brilliant, stays a thought on paper unless it’s carried through well. Still, since the idea comes first, the person who conceives it usually earns the higher valuation. Investors have known this for as long as there have been start-ups to fund.

The same logic applies to governance. Good government, in my view, rests on exactly two legs:

·         Conceiving and instituting policies that deliver equitable, sustainable, accelerated growth.

·         Executing those policies through structured programs, efficient delivery, and honest, timely course-correction.

Judge any government on these two counts, and only these two.

On execution, I’d give the incumbent government a reasonably good score. It has carried forward policies inherited from its predecessor — food security, direct benefit transfer, financial inclusion, FDI in retail, infrastructure push, defence procurement reform, privatization, the manufacturing thrust — and executed them competently. It built out delivery rails — digital payments, GST, the 14th Finance Commission’s recommendations — for ideas that were formulated in the UPA’s last years. And it squeezed real value out of a couple of foundational bets, particularly Aadhaar and digital payments. That execution muscle is a big reason the economy came through Covid and the global slowdown as well as it did, and why UPI is now a genuine export success and road-building runs at a pace India hasn’t seen before.

Ideation is a different story. In twelve-plus years, the list of genuinely new policy ideas is short. Where the government has innovated, the results have been mixed at best — demonetization being the obvious example: a big idea, thin preparation, questionable payoff.

I would put the newly enacted Prevention of Insults to National Honour (Amendment) Act, 2026 in the same bucket. It isn’t going to achieve much of anything constructive, and it carries real potential to disturb public order, hand police another discretionary lever, and generate avoidable litigation and harassment.

The backstory

Bankim Chandra Chattopadhyay wrote Vande Mataram; it appeared in Bangadarshan in 1875 and was incorporated into his novel Anandamath in 1882. The Congress sang it at its sessions from 1896 onward. On 24 January 1950, the Constituent Assembly adopted the first stanza of Tagore’s Jana Gana Mana as the National Anthem. Article 51A of the Constitution makes “respecting” the anthem a fundamental duty, and Parliament backed that with teeth via the Prevention of Insults to National Honour Act, 1971, which criminalized disrespect to the Flag, the Constitution and the Anthem.

That same day, Constituent Assembly President Rajendra Prasad made a statement — not a resolution, not a constitutional provision, just a statement — that Vande Mataram’s first two stanzas be honoured equally with the Anthem, with wording changes left for later. The later stanzas, invoking Durga and Lakshmi, were dropped from that honour, partly on the reasoning that overt religious imagery sat awkwardly with a plural republic. The Constitution itself, worth noting, doesn’t mention a “National Song” at all — the status rests entirely on Prasad’s 1950 remarks.

It’s a genuinely unusual arrangement. No other country runs a separate anthem and song; a few, like Denmark and New Zealand, have two anthems of equal standing, which is a different thing altogether.

What the law actually does

What the 2026 Act does is narrower than the noise around it suggests. It doesn’t touch the Constitution — it’s an ordinary statute — and it doesn’t itself declare the full six-stanza composition the official National Song. All it does is extend the 1971 Act’s existing anthem protection (up to three years’ imprisonment for intentionally preventing its singing or disrupting an assembly singing it) to Vande Mataram, citing Prasad’s 1950 statement as its rationale.

Where I think the trouble starts is in how it’s being sold. The government and its supporters have been framing this as conferring National Song status on all six stanzas — when what actually has that status, per Prasad’s own words, is the first two. That framing may not survive judicial scrutiny, but it hands police the discretion to act against citizens who are doing nothing more than honoring the version the Constituent Assembly actually blessed.

The legal exposure

There’s a genuine constitutional exposure here too. The Supreme Court’s Bijoe Emmanuel ruling on the Anthem established that no one can be compelled to sing a national symbol against conscience — only stopped from disrupting others who choose to. A penal provision built around Vande Mataram invites the same challenge on Article 25 religious-freedom grounds. And any attempt to stretch the song’s status toward something constitutionally binding runs into the Basic Structure doctrine from Kesavananda Bharati vs State of Kerala — Parliament can’t amend around secularism, one of the Constitution’s basic features, through the back door.

The groundwork that was never laid

Then there’s the sheer absence of preparation. Unlike the Anthem, which has a government-notified tune, tempo and duration, Vande Mataram has never had an official musical setting — Tagore’s own 1896 tune, Hemant Kumar’s from the film Anandamath, A. R. Rahman’s version, and others have coexisted freely for decades. Nothing in this law fixes that. Which means a constable on the ground, not any statute, effectively decides whether a given rendition counts as respectful — a recipe for selective, motivated enforcement against whoever happens to be inconvenient that day.

And one more data point worth sitting with: per the 2011 Census (language data released only in 2018), just 24,821 people in the then population north of 1.2 billion listed Sanskrit as their mother tongue — the least-spoken of India’s 22 scheduled languages. Only Himachal Pradesh and Uttarakhand give it second-official-language status. None of that bears directly on the law’s validity, but it’s a reminder of how thin the on-the-ground constituency is for turning a freedom-movement anthem into a criminal-law flashpoint.

There’s a sequencing problem too, and it’s the clearest tell that this was written on the back foot rather than thought through in advance. Back in February 2026, the Home Ministry had already directed that all six stanzas be sung at official events and school assemblies — using the word “may” not “shall” and attaching no penalty. When that directive was challenged, the Supreme Court in March declined to intervene precisely because it was voluntary and toothless. The 2026 Act reads like the fix for that gap — except it still doesn’t define “intentionally prevents” or “causes disturbance”, so the ambiguity the Court flagged hasn’t been resolved, only criminalized. That’s not ideation. That’s patching a loophole after the fact and calling it policy.

The bottom line

None of this required rushed legislating. The Constituent Assembly’s own words already drew the line — first two stanzas, equal honor, details to follow. A government with a genuine appetite for ideation would have used the space “details to follow” left open: notify a tune, define “disrespect”, settle the six-stanza question through consensus rather than executive push. Instead, what we have is a law that recycles a 76-year-old ambiguity, dresses it up as settled history, and leaves the actual grey areas — much like demonetization before it — to be sorted out later, in public, the hard way.

Good execution can carry a government a long way. It can’t make up for an idea nobody thought through.

The price tag not to be ignored

Over the past week I sat with a stack of very different headlines side by side - a proposed cash payout to women in Uttar Pradesh, an old World Bank note on how Indian states balance their books, a parliamentary panel’s numbers on school dropouts, and a district-level count of doctors in Bihar and UP. Read separately, they are four unrelated stories. Read together, they are one story – sustainability of growth.

A season of generosity

Uttar Pradesh’s government is reportedly weighing a cash payout of up to Rs 50,000 for women in the state, timed just ahead of the 2027 assembly election. The principal opposition, the Samajwadi Party, has countered with a promise of Rs 40,000. This is not an isolated UP story. Over the past three years, the number of states running large unconditional cash transfer schemes for women has gone from two to twelve, and by my reading of the available data, these twelve states will together spend around Rs 1.68 lakh crore on such schemes in 2025-26 alone - roughly 6% of their combined revenue expenditure. Add farmer and youth-linked transfers, and some estimates for women-focused transfers alone run closer to Rs 2 lakh crore across fourteen states.

None of this makes any single scheme wrong on its own terms. Direct transfers can be an efficient, leakage-resistant way to put money in the hands of households that need it, and I don’t doubt many families are genuinely better off for it. My concern, as an investor rather than as a commentator on any party’s politics, is arithmetic, not intent.

Where the money is going

A quick snapshot of what's on the table this election cycle

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Six of the twelve states running these schemes are already sitting on a revenue deficit in 2025-26. Strip out the cash transfer spending, and several of them - Karnataka and Madhya Pradesh among them - would show a revenue surplus instead. That gap is not academic. A revenue deficit means a state is borrowing to fund its day-to-day running costs, not its future.

The capex we’re quietly deferring

Zoom out to the national picture and the aggregate numbers still look reasonably disciplined - states’ combined gross fiscal deficit is budgeted at about 3.3% of GDP for 2025-26, broadly where it has held for two years, and outstanding state debt has actually eased slightly as a share of GDP. On the surface, fiscal prudence looks intact.

But the composition worries me more than the headline number. Over the past decade, a large share of the adjustment states have made to hit their deficit targets has come from squeezing capital spending - roads, power, water, hospitals, schools - rather than from trimming recurrent, non-development costs or from mobilizing more revenue. Capital investment has repeatedly acted as the shock absorber whenever a state needed to tighten its belt, in richer and poorer states alike. There are genuine signs of recent improvement - the ratio of revenue spending to capital outlay across states has come down from roughly 6.2 in 2015-16 to about 5.0 last year, which is progress. My worry is that this progress is fragile, and a fresh wave of poll-driven transfer commitments is exactly the kind of pressure that reverses it, because cash transfers are far easier to cut from next year’s capex line than from a promise already made to millions of women voters.

The children and the doctors we don’t have

While states debate the next round of transfers, the human capital numbers tell their own story. A parliamentary panel has just flagged that nearly 73% of Indian students drop out before completing higher secondary school. The number of schools shrinks at almost every stage as children get older - from about 9.1 lakh primary schools down to under 91,000 at the higher secondary level - and enrolment falls in step, from 6.18 crore children in primary classes to just 1.64 crore by the time they reach classes 11 and 12.

Forestation targets, a proxy for longer-horizon public investment discipline, have seen only about a fifth of the decade’s goal met.

Healthcare tells a similar story. India ranks 145th out of 194 countries on WHO health parameters, and the shortfall is starkest exactly where the new cash schemes are being rolled out. Against a WHO benchmark of one doctor per 1,000 people, rural India averages one per roughly 11,000; Bihar is close to one per 28,000, and Uttar Pradesh near one per 20,000. By one estimate, India needs another 6 lakh doctors, 20 lakh nurses and 2 lakh dental surgeons just to close the existing gap - a gap Gujarat’s own recent numbers put in sharp relief, with close to 80,000 new cancer cases and over 43,000 deaths from the disease in a single year.

I don’t read any of this as an argument against welfare spending as a category. I read it as evidence that the current mix of state spending is tilted toward transfers that buy loyalty “this election cycle”, at the expense of the schools, hospitals and roads that would have built durable growth over the next one.

Who actually pays for this

The other half of this equation is who is funding it. Personal income tax has now overtaken corporate tax as India’s single largest source of direct tax revenue, with net direct tax collections crossing roughly Rs 24 lakh crore in 2025-26. That burden sits overwhelmingly on the organized, salaried middle class - a narrow base of taxpayers now effectively out-contributing corporate India, while agricultural income of any size remains untaxed and a large informal economy stays largely outside the net. The compliant formal sector - salaried professionals and organized businesses - carries a growing share of the state’s obligations, including the welfare commitments being made on its behalf without much reference to its own capacity to keep paying.

My takeaway for investment strategy

This is not an immediate crisis - state balance sheets remain broadly sustainable and debt ratios are not alarming today. But sustainability is a medium-term question, not a one-year one, and the direction of travel worries me more than the current level. A political economy that finances consumption ahead of capacity, and funds it by leaning harder on a narrow, already-stretched taxpayer base, is not a formula for the kind of broad-based, decade-long growth story that equity markets like to price in.

For portfolio positioning, I continue to prefer businesses and sectors with pricing power and limited dependence on state fiscal transfers to sustain demand - I’d be cautious of consumption plays whose growth story leans heavily on scheme-driven cash rather than organic income growth. I also continue to doubt a case for holding long-duration debt, given that state finances, like the broader macro picture I have written about before, look calmer on the surface than they may prove to be underneath. 

Gen Z isn’t one crowd

Over the past two months, “Gen Z” has moved from a demographic label to the center of India’s political conversation. Politicians, judges, religious leaders and social influencers who had never before troubled themselves with youth slang are suddenly trying to speak it fluently. Everyone wants a piece of Gen Z’s attention, because everyone has just watched what that attention can do.

The trigger was concrete. A leaked paper in this year’s medical entrance exam, the NEET, forced a retest and set off protests that grew nationwide. What began at Jantar Mantar in early June spilled into a march on Parliament by late July, drew in high-profile supporters, and ended - within weeks - in the resignation of the union education minister.

In a political system that rarely bends quickly to street pressure, this was a genuinely unusual outcome, and it has understandably convinced a great many people that Gen Z is now a decisive force in Indian public life.

A comfortable but misleading assumption

My conversations with a range of people over the past few weeks suggest that most of this new enthusiasm rests on a shaky premise: that India’s Gen Z is a single, homogeneous bloc, united by common grievances and common demands. It isn’t. India’s youth are enormous in number and radically different in circumstance, and that difference matters more than the label suggests.

“Gen Z” conventionally covers those born between 1997 and 2012 - roughly the 15-to-29 age bracket today. The Azim Premji University’s State of Working India 2026 report puts this group at about 36.7 crore, or 367 million people - the largest youth population of any country in the world, and close to a quarter of India’s population.

On the report’s own numbers, this is also nearly a third of the country’s entire working-age population.

That scale is precisely why treating them as one voting bloc, one consumer segment, or one protest movement is a mistake.

Four Indias, not one

The people with the greatest economic grievances often have the least ability to sustain political mobilization - and vice versa.

Break the 36.7 crore down by economic reality and the group splits into at least four distinct constituencies, each shaped by a different set of pressures and each with a very different capacity to act on its grievances.

Read the table left to right and a pattern jumps out: the people with the most acute economic grievances have the least ability to sustain a protest, and the people with the most ability to sustain a protest have the least reason to want the system torn down​

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Why the loudest group is also the smallest

For a young person from an economically constrained household, life runs on a tight sequence: employment, then income, then family security, then any hope of mobility. Whatever the depth of frustration with the system, weeks spent on a protest site carry a real cost when you are preparing for a government exam, working informally, or simply trying to help your family get by.

The established middle class has a different problem. It has already invested years and real money into education, professional qualifications, and career-building, and it has something to lose from prolonged instability. Its anger, when an exam is compromised, can be intense - but its preferred remedy is to fix the system, not overturn it. This group wants exams conducted properly and merit to count, not disorder.

Rural aspirers - roughly 7.5 crore of them - are arguably as affected as anyone by the gap between promise and opportunity, but they are geographically too dispersed to organize at scale.

That leaves the urban aspirer: highly educated relative to the national average, digitally native, aware of global benchmarks, and carrying a strong, often justified, sense that the system has failed to deliver on its own promises. This is not a group protesting for survival. It is a group protesting because it believes it has been denied something it was told it would earn. At an estimated 3.5 crore, it is also the smallest of the four segments - and the one that just forced a sitting minister to resign.

An old echo, correctly placed

There is a historical parallel worth drawing, though it is often misplaced in casual conversation. Older readers will remember how a wave of student radicalism swept through parts of India in the late 1960s and early 1970s, drawing educated, idealistic young people toward Naxalism and organized Left politics. That movement’s roots were not in Delhi’s university campuses - it began in the Naxalbari uprising in West Bengal in 1967, and its most committed student wing formed in Calcutta, around institutions like Presidency College and Jadavpur University, before spreading to pockets of Bihar, Andhra Pradesh and beyond. What is instructive is not the geography but the mechanism: it was educated, urban, relatively privileged youth - not the poorest of the poor - who supplied the ideological energy, precisely because they had the time, literacy and networks to organize. The same mechanism is visible in this year’s protests.

What this means for anyone allocating capital

·         Policy responsiveness has been demonstrated. A government not known for quick concessions to street protest reversed course within weeks. That is a data point on this administration’s sensitivity to organized, visible, urban discontent - relevant to how markets should price policy risk around education, employment and youth-facing reforms going into any electorally sensitive period.

·         The protest constituency and the consumption constituency substantially overlap. Urban aspirers are also disproportionately the segment driving discretionary spending, digital adoption, and white-collar labour supply. Their frustration with job scarcity - not the exam leak itself - is the more durable signal, and it bears on how confidently one should extrapolate India’s consumption and services growth story forward.

·         The demographic dividend has a shelf life. The same report that supplies today’s headline numbers also flags that India’s youth cohort, currently near its peak, is projected to start shrinking within a decade. The window to convert this population into productive employment - and to avoid the kind of frustration now visible on the streets - is narrower than the growth-story narrative sometimes implies.

·         Civil unrest risk is being independently flagged. Verisk Maplecroft’s Civil Unrest Index has rated India among the highest-risk countries this year. That is a signal worth tracking alongside GDP prints and earnings, not dismissing as unrelated to markets.

The unfinished agenda

None of this means today’s urban aspirer-led movement is destined to fade. It has already shown it can move a government. But 3.5 crore people, however visible and well organized, are a fraction of a 36.7 crore youth population. If this energy is to translate into something more durable than a single ministerial resignation, it will need to broaden its agenda well beyond exam integrity to include the very different concerns of rural and economically constrained youth - jobs, wages, migration, and basic security - rather than assuming those groups share its priorities by default.

Until that broadening happens, my own reading is that this remains a powerful but narrow force: capable of extracting concessions on specific, well-defined grievances, but not yet the singular, unified “Gen Z” movement that the current wave of political and corporate courtship seems to be betting on.

Highways are about human lives, not cement & steel

A highway built only for speed, without regard for the land and the people it passes through, honors only half that duty. True development binds kilometers to the wellbeing of those who live alongside them.

Last week, a section of the Dehradun-Mussoorie Road caved in after overnight rain weakened the embankment beneath it. The road was shut, and hundreds of vehicles were stranded on both sides. This is the same hill road that now absorbs every additional vehicle the new Delhi-Dehradun Expressway sends toward Mussoorie, since the expressway itself terminates at Dehradun and goes no further.

This was not an isolated event, either. Just weeks earlier, a stretch built barely six months ago at Mussoorie’s Paani Wala Bend developed a large crack and began sinking, prompting a former legislator to allege negligence and demand an inquiry. Landslides and road damage in the Garhwal Himalayas are not new, but their frequency and severity have risen noticeably over the past decade.

Rapid deforestation for road widening, a sharp rise in vehicular traffic on wider roads, growing tourist and pilgrim inflows, and hurried construction of hospitality infrastructure to house them are all straining the fragile ecology of the region. This raises a pertinent question: is the impact-assessment process followed by governments and public authorities before approving and building infrastructure projects, especially highways and expressways, actually adequate?

The newly built Delhi-Dehradun Expressway is a useful case study. Inaugurated in April 2026 at a cost of roughly ₹12,000 crore, the six-lane, access-controlled corridor has cut travel time between Delhi and Dehradun from about six-seven hours to roughly two-and-a-half hours, and to Mussoorie from around seven hours to under four.

The government has projected that this faster connectivity will boost tourism and support industrial corridors around Dehradun. What I find missing from that projection is any visible reckoning with the fact that the expressway does not reach Mussoorie itself. Every vehicle it delivers to Dehradun in a fraction of the earlier time still has to funnel onto the very same unwidened hill stretch that collapsed last week. That is not a coincidental juxtaposition of two unrelated news items; it is a supply chain, with the expressway as the intake and the old Dehradun-Mussoorie Road as the choke point.

I say this carefully: last week’s collapse was triggered by rainfall saturating the embankment, not by traffic volume directly, and I do not want to overstate a mechanical link that isn’t there. But higher volume raises the stakes of every such failure, in how many people are stranded, how much pressure builds to keep a weakened road open, and how much rushed widening work gets done on unstable slopes to cope with the load. The two roads appear to have been evaluated, if at all, as though they belonged to two entirely separate projects under two separate agencies, rather than as one continuous journey for the traveler.

Part of the reason such downstream questions may never have been asked is structural. Under India’s (Economic Impact Assessment (EIA) Notification of 2006, many highways and road-widening stretches below defined length thresholds are exempt from a full environmental impact assessment. If that exemption applied here, then the absence of a study covering hotel capacity, sanitation load or the old road’s carrying capacity is not a gap in my research; it may be a gap the law itself permits. This would not be the first time Himalayan carrying capacity has been flagged as inadequately assessed before construction. The 2023 land subsidence in Joshimath, and the Supreme Court-mandated High-Powered Committee set up to review the Char Dham road-widening project, both arrived at the same underlying finding: that road-building in this terrain proceeded well ahead of any serious study of what the land and the towns at either end could actually absorb.

It is worth asking whether the following questions were part of the impact analysis for the expressway, and what measures were put in place to manage the consequent burden on regional ecology and local civic life:

·         How much will passenger and commercial vehicle inflow into Dehradun and Mussoorie increase, and is there adequate parking capacity to absorb it?

·         Was the additional load the expressway places on the existing, unwidened Dehradun-Mussoorie stretch modelled as part of the expressway’s own clearance, or was it treated as a separate agency’s problem because the two roads fall under different jurisdictions?

·         What is the likely impact of higher vehicle inflow and construction-linked deforestation on local air quality, and what mitigation measures, if any, are built into the road contract?

·         How many additional hotel rooms will be needed to house the increased tourist inflow, and do local regulations even permit new tourist accommodation at that scale?

·         What additional water supply, sanitation, sewerage treatment, garbage disposal and healthcare capacity will the higher tourist inflow require, and is augmentation of these civic amenities planned alongside the road itself?

·         How will the expressway affect local residents through higher land and home prices, increased transit traffic, and food and hospitality inflation, and who is accountable for measures to protect local affordability and traffic-handling capacity?

·         Is the road designed for safe traffic flow at every exit and interchange, particularly at points where a 100-120 kmph expressway meets local roads?

·         How will a high-speed, access-controlled expressway affect villages along its route whose residents are used to a slower pace of life, and what safety awareness and training do they need for themselves, their livestock and their property?

·         What systems exist for periodic safety audits and disaster management, including medical response and rapid evacuation in the event of a major accident, and has responsibility for these systems been fixed before the road opened to the public?

Despite genuine effort, I have not been able to establish whether the impact study for the Delhi-Dehradun Expressway addressed any of these points. I raise them not to oppose the project, but to draw the attention of policymakers, regulatory authorities and civil society to what I consider a critical gap in how highway development is planned and executed in ecologically sensitive regions.

At minimum, a corridor of this kind should require a mandatory downstream carrying-capacity study covering every connecting road it feeds traffic into, an independent post-construction audit rather than a one-time pre-approval clearance, and a single accountable authority spanning both the new expressway and the older roads it terminates into, rather than the current split between agencies.

Investor takeaways

Faster connectivity is a genuine tailwind for Uttarakhand-linked hospitality, real estate and consumption stories, but the pace of civic infrastructure build-out (water, sewerage, healthcare) is the real gating factor for how much of that tailwind converts into sustainable earnings.

Where a new expressway feeds traffic into an older, unwidened connecting road under a different agency, that jurisdictional seam is itself a risk; closures on the connecting stretch can strand demand the expressway was built to capture.

Recurring landslide-driven closures are a direct operating risk for logistics, tourism and construction companies with revenue tied to these corridors, and are worth factoring into weather-linked earnings volatility.

If regulators tighten carrying-capacity and post-construction audit requirements in response to episodes like Joshimath, future Himalayan infrastructure timelines and costs could extend; this is worth watching as a sector-wide execution risk, not just a single-project one.

 

Think about simpler solutions

We have a habit of ignoring simpler solutions for our problems and love to over complicate things. Energy security and air pollution are two specific issues where the policymakers have often ignored simpler and sustainable solutions and favored adhoc solutions, often with uncertain outcomes.

When petrol prices rise, we cut fuel taxes, burdening fiscal balance with economy wide ramifications. When crude oil prices rise, we worry about the import bill. When Delhi’s air turns unbreathable, we restrict traffic and close schools. When accidents climb, we call for stricter enforcement. Each problem gets its own emergency response.

One question, however, rarely gets asked: why do we engineer ordinary family cars to run at 200–240 kmph when the highest permissible speed on any Indian road is 120 kmph, on access-controlled expressways, with 100 kmph the norm on national highways?

This is not a question of engineering capability. Indian manufacturers can build fast cars. The question is whether a country that imports the bulk of its crude oil, battles severe air pollution, and records one of the world’s highest road-accident tolls should keep paying, in fuel, cost and emissions, for a top-speed capability its drivers are legally barred from using.

The case in numbers

Consider two hypothetical family cars of similar size and utility, one engineered for a 240 kmph top speed, the other purpose-built for 150 kmph. Directionally, the trade-off may look like this:​

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The distinction matters: this is not about bolting an electronic speed limiter onto an existing 240 kmph car. It is about designing the vehicle, from engine and transmission to tyres and aerodynamics, around a lower top speed from the outset.

Caveat

India’s fuel-efficiency and emissions norms (BS-VI, CAFE) are measured over standardized drive cycles, not top speed, so a car’s advertised maximum speed does not feed directly into its certified mileage; efficiency gains would have to come through the weight and drivetrain changes described, not from the speed cap itself. Second, high-performance engines are frequently shared across model variants and export markets, so the cost and engineering savings from a lower top-speed design would vary widely by manufacturer and platform, and are unlikely to be uniform across the industry. The reader should treat the table as a plausible order of magnitude for the direction of the argument, not as a verified engineering estimate.

Why pay for speed we cannot use?

An ordinary Indian family car can often exceed 180–240 kmph, well beyond the 120 kmph ceiling on our fastest roads, and beyond what most global markets permit. Even in the United States, the highest posted speed limit is 85 mph, about 137 kmph, on a single 41-mile stretch of State Highway 130 in Texas; most US interstates cap out at 70–80 mph.

A car engineered for 240 kmph is not simply a car with a bigger engine. Reaching that speed safely requires a stronger transmission, larger brakes, higher-speed-rated tyres, more sophisticated suspension and cooling, and greater structural strength. Each addition adds weight, and weight compounds fuel consumption. It is an expensive chain: more speed capability leads to more power, a heavier drivetrain, bigger brakes and tyres, and ultimately more fuel burned, on every single journey, regardless of whether that top speed is ever used.

The oil, pollution and safety angles

India imports roughly 85% of the crude oil it consumes, so every additional liter burned adds to the import bill, pressures the rupee and widens the current account deficit. Fuel-price policy gets debated in detail. The amount of fuel a given vehicle needs to burn in the first place gets far less scrutiny.

The same logic applies to pollution. Reactive, winter-only restrictions on traffic and construction treat a structural problem as a seasonal one. A lighter, more efficient vehicle fleet reduces emissions at source, every day of the year, not only when air quality crosses a threshold.

On safety, the physics is straightforward: kinetic energy rises with the square of speed, so high-speed crashes are disproportionately more destructive. A lower speed ceiling will not by itself curb reckless driving, but resources currently spent engineering unusable top-end performance could instead fund better brakes, more airbags, stronger crash structures and wider adoption of electronic stability control.

Performance need not suffer

A 150 kmph ceiling does not mean a sluggish car. Top speed and usable performance are different things. What matters on Indian roads is strong 0–100 kmph acceleration and confident overtaking in the 80–120 kmph band, not a theoretical capability twice the legal limit.

Policy levers, not a ban

A blunt speed cap is not the only option. Fiscal policy could nudge the market toward efficiency without dictating design: lower registration fees or GST for lightweight, fuel-efficient vehicles, insurance incentives for safer and lower-risk cars, and taxation more closely linked to vehicle weight and engine capacity. The aim is to let the market reward efficiency rather than horsepower.

Investor takeaways

·         The oil-import and current-account channel is the more durable investment link: any structural reduction in average vehicle fuel consumption reduces India’s crude import intensity over time, a theme relevant to INR trajectory and to companies exposed to the import bill.

·         Passenger-vehicle OEMs face a genuine strategic question on where to allocate engineering spend, high-performance variants versus efficiency and lightweighting, as regulatory and fiscal incentives evolve; this is a multi-year theme, not a near-term catalyst.

·         Ancillary segments tied to lightweighting, efficient braking systems and advanced driver-assistance technology stand to benefit disproportionately if policy shifts incentives in this direction; treat any related exposure as a slow-moving structural theme.