Best of BS Opinion: India's AI boom, fiscal reset sharpen policy challenges

Here are the best of Business Standard's opinion pieces for today

India’s artificial intelligence push is setting off a major investment cycle in data centres and digital infrastructure. As our first editorial notes, companies such as Reliance Industries and Adani Enterprises have announced investments running into hundreds of billions of dollars, with global firms including Microsoft expanding capacity in India and the Global South. Yet constraints are real. Data centres are energy-intensive, with power forming a large share of operating costs. Capacity could rise sharply by 2030, increasing pressure on electricity supply and water resources. The opportunity is significant, but so are the risks of overcapacity, financial stress, and dependence on foreign technology and demand. 

 

Regulation, too, is under scrutiny. The Supreme Court’s criticism of the Himachal Pradesh Real Estate Regulatory Authority has refocused attention on the Real Estate (Regulation and Development) Act, 2016. Rera has created a functioning framework, yet enforcement gaps persist. Annual reports are often delayed, dispute resolution exceeds timelines, escrow monitoring is uneven, and staffing remains inadequate. As our second editorial argues, the answer lies not in dilution but in stronger compliance and faster adjudication to protect homebuyers and sustain confidence in the property market. 

Writing on the 16th Finance Commission, A K Bhattacharya explains that while the vertical devolution remains at 41 per cent, the more consequential change lies in the horizontal formula. By assigning a 10 per cent weight to states’ contribution to national GDP, the Commission has explicitly recognised economic output as a criterion for tax sharing. The result is a modest gain for several southern states and a relative decline for some northern ones. The political message is clear: fiscal transfers will continue to address equity, but productivity will no longer be ignored. With revenue deficit grants being phased out, fiscally weaker states may face tighter budget constraints, making state-level reform and revenue mobilisation more urgent. 

Harsh V Pant and Vivek Mishra place the US Supreme Court’s decision on Donald Trump’s emergency tariffs in a broader institutional context. By ruling that the International Emergency Economic Powers Act does not permit sweeping tariff action without congressional backing, the court has reasserted legislative primacy in trade policy. Yet the administration’s recourse to other statutes, including Section 122 of the Trade Act of 1974, shows how adaptable executive authority can be. For countries such as India, the episode underscores a structural problem: US trade policy can shift through multiple legal channels, and judicial pushback may slow but not necessarily stop tariff actions. Businesses planning supply chains or export strategies must therefore factor in continued volatility. 

Finally, in her review of Navtej Sarna’s A Flag to Live and Die For, Aditi Phadnis traces how India’s national flag evolved through argument and compromise. Early versions reflected competing visions of identity and resistance. The final adoption of the tricolour with the Ashoka Chakra in July 1947 followed intense debate, including British suggestions that were ultimately rejected. Post-Independence, the Flag Code formalised its use, later liberalised to widen citizens’ rights. The book presents the flag not as a fixed emblem, but as the outcome of negotiation within a diverse and divided polity. 

Stay tuned!