Best of BS Opinion: India's tightrope walk on the dollar, BRICS finance

Today's opinions examine India's cautious move away from dollar dependence, questions around the new GDP series, middle-class anger over ethanol-blended petrol and the societal risks posed by AI.

Hello, and welcome to the Best of BS Opinion, our wrap of the day's Opinion page. Shyam Saran examines India’s difficult balancing act as the BRICS summit approaches, arguing that New Delhi wants to reduce its dependence on the dollar without provoking Washington or being drawn into a China-led financial system. India is pushing for cheaper, faster cross-border payments through networks such as NEXUS, while China is advancing alternatives such as mBridge and CIPS that could weaken the dollar’s dominance and help countries evade sanctions. With global finance moving towards multiple currencies and payment systems, the BRICS summit will test India’s ability to navigate the emerging financial order without aligning too closely with either the US or China.

 The new GDP series shows stronger headline growth, but methodological changes make the numbers harder to interpret, particularly the unusually low deflator. Double deflation can produce a negative manufacturing deflator when input costs rise faster than final-product prices, potentially overstating real growth, writes Devangshu Datta. Alternative indicators, he suggests, provide a useful cross-check: electricity consumption and bank credit growth support the view of a relatively robust economy, while rail freight growth is weaker than expected, though port traffic has expanded strongly. The conflicting signals suggest caution rather than outright rejection of the GDP data. A better approach would be to develop greater familiarity with the new methodology and track high-frequency indicators more systematically.

 

 Shekhar Gupta argues that the real political debate is not over India’s disputed GDP growth figures, but over the growing anger among the BJP’s core middle-class voters at ethanol-blended petrol. Consumers feel they are paying the same for lower mileage, without being given a choice or a clear explanation of the benefits. In fact, the government rushed the policy without adequately preparing farmers or accounting for its impact on sugar, maize and rice supplies. With shortages pushing up food prices and scarce grain being diverted to fuel, Gupta sees EBP as another example of the Modi government’s “shock-and-awe” approach to policymaking. A partial rollback or consumer choice, he argues, may be necessary. 

 AI could reshape society more radically than previous technological revolutions, yet public concern remains surprisingly muted, observes Mihir S Sharma, pointing out that unlike earlier innovations, which generally increased demand for moderately skilled workers, AI threatens to displace white-collar professionals and potentially creative workers as well. Manufacturing employment, meanwhile, has continued to grow globally, with shortages emerging in several highly specialised fields, suggesting that technology has not simply eliminated blue-collar work. AI-generated music, films and other content could also undermine creative industries and degrade the quality of future training material. Most strikingly, the technology’s own leading developers appear deeply concerned about its risks. The complacency, he warns, may not last.