Newspaper Summary 120226

 

India’s first LLM takes shape as Sarvam expands AI stack

Sanjana B | Bengaluru

India’s effort to build a sovereign Large Language Model (LLM) has moved from promise to platform as Bengaluru-based Sarvam AI unveiled the country’s most ambitious push yet to create an indigenous AI stack. Ahead of the India AI Impact Summit 2026, the company expanded its stack across translation, speech, and vision capabilities.

Multilingual Translation and Speech

Sarvam-Translate now supports 22 Indian languages, including Bengali, Marathi, Telugu, Maithili, Santali, Kashmiri, Nepali, Sindhi, Dogri, and Sanskrit. It offers paragraph-level translation and, according to company evaluations, performs significantly better than larger models.

In the speech domain, Sarvam launched Bulbul v3, a code-mixed multilingual text-to-speech model designed for natural, production-ready voices in 11 Indian languages. Complementing this is Saaras v3, a speech-to-text model that auto-detects spoken language and provides transcription across all 22 supported Indian languages, handling code-mixed audio for both real-time and batch processing.

Vision and Sovereign Variants

The company also recently launched Sarvam Vision, a 3-billion-parameter vision-language model built for image captioning, scene text recognition, and complex table parsing.

Under its sovereign LLM proposal, Sarvam is developing three specific variants:

• Sarvam-Large: For advanced reasoning and generation.
• Sarvam-Small: For real-time interactive applications.
• Sarvam-Edge: For compact, on-device tasks.

Government Backing and Training Strategy

Founded by Vivek Raghavan and Pratyush Kumar in August 2023, Sarvam introduced its first 2-billion-parameter model in 2024. In April 2025, the government selected Sarvam AI under the IndiaAI Mission to build the nation’s first sovereign LLM, providing dedicated compute resources to create a foundational model from scratch for population-scale deployment.

Industry experts, such as Jaspreet Bindra, CEO of AI&Beyond, note that Sarvam is building with an "India-first lens". Its training strategy is curated toward Indian languages, governance documents, and local enterprise needs, prioritizing contextual depth and linguistic nuance over pure model scale.

Three-hour content takedown mandate termed regulatory over-reach, but many back the action

S Ronendra Singh | New Delhi

The Centre’s decision to slash the takedown timeline for unlawful AI-generated content to three hours has sparked a sharp debate among legal and digital policy experts. While some term the mandate a regulatory overreach that risks undermining constitutional protections, others support the swift action against violative material.

Significant Tightening of Rules

The amendments were notified under the Information Technology (Intermediary Guidelines and Digital Media Ethics Code) Amendment Rules, 2026. They require online intermediaries to remove unlawful synthetic content within just three hours of being notified, representing a drastic tightening from the previous 36-hour window.

The Internet Freedom Foundation (IFF) described the new rules as a “regression” from earlier drafts. While acknowledging that AI requires regulation, the IFF argued that this approach expands censorship powers in a manner inconsistent with constitutional safeguards.

Experts Divided on Impact

Several experts have raised concerns regarding the "take down first, ask later" framework:

• Mishi Choudhary (Software Freedom Law Center India): Warned that shortened timelines could trigger excessive content removal, especially since multiple authorities are empowered to order takedowns.
• Vikram Jeet Singh (BTG Advaya): Flagged practical challenges, noting that a three-hour deadline may be insufficient for platforms to seek clarification if orders are vaguely worded.
• Risk of Over-deletion: The provision allowing "one or more authorised officers" to issue directions could lead to contradictory orders, causing platforms to err on the side of caution and delete content broadly.

Defense of the Policy

Conversely, some experts defended the move as a necessary protection against harmful content. NS Nappinai, Supreme Court advocate and Founder of Cyber Saathi, stated that expedited takedowns are reasonable and warranted for violative material such as child sexual abuse material or sexually explicit synthetic content. She argued that such measures should not be considered a restraint on free speech, provided they are utilized according to the letter and spirit of the law.

Direct tax kitty rises 9% to ₹19.44 lakh cr in April-Feb

Our Bureau | New Delhi

With good growth in corporate earnings, net direct tax collection rose over 9 per cent during the April 1 to February 10 period, according to data released by the Central Board of Direct Taxes (CBDT) on Wednesday. Net collections reached ₹19.44 lakh crore, compared to ₹17.77 lakh crore during the same period last fiscal, representing a growth of 9.4 per cent.

Challenging Targets

Despite the growth, achieving the Revised Estimates (RE) for the current fiscal appears to be very challenging based on this trend. The RE has already been lowered from the initial Budget Estimate by approximately ₹1 lakh crore to ₹24.21 lakh crore. To meet this revised target, the tax department must collect around ₹4.77 lakh crore in the remaining weeks of the fiscal year.

Sectoral Breakdown

• Corporate Tax: Grew by more than 14.5 per cent.
• Non-Corporate Tax: Increased by approximately 6 per cent.
• Securities Transaction Tax: Collections remained nearly flat at around ₹50,000 crore.
• Refunds: These continued to show a de-growth.

Expert Insight

Rohinton Sidhwa, Partner at Deloitte India, observed that both corporate and non-corporate taxes are showing flat growth compared to the previous year. He pointed out that while the RE for corporate tax was increased marginally, the estimate for non-corporate taxes fell by 8 per cent.

Legacy created over last six years will be carried forward by successor: Yes Bank CEO

Piyush Shukla | Mumbai

The six years of legacy created after the reconstruction of Yes Bank in 2020 will be carried forward by Vinay Tonse, who is set to take over as the private lender’s MD and CEO in April. The bank’s current chief, Prashant Kumar, shares how the bank was brought back from the brink in 2020, his guidance for his successor, and the retail segment’s profitability.

Interview Excerpts:

What are your plans after the tenure ends as Yes Bank’s chief in April? Change is the only constant. I never plan for the future. If anything comes at a later point, we will see it then. I have completed 42 years as a banker with SBI and Yes Bank. I would live a happy retired life.

What would be your guidance to your successor? I feel very happy that I am passing on the baton to a very competent person who has vast experience at SBI. It gives me a lot of comfort that the legacy, created over the last six years, will be carried forward.

No one should give strategic business guidance to anyone; every leader needs the freedom to chart the bank’s future trajectory. From a risk-taking perspective, the banking sector has shown that organizations that have patience and don't take aggressive bets move in a positive direction. You are dealing with public money and must not take undue, aggressive risks.

You led Yes Bank after the RBI notified the bank’s reconstruction scheme in 2020. How have things changed since then when depositors were panicking and withdrawing funds en masse? When I joined, we declared a loss of over ₹18,000 crore for the December 2019 quarter—the highest for any bank. In the December 2025 quarter, exactly six years later, the bank showed a profit of almost ₹1,000 crore, which is very near to 1 per cent RoA.

Other key improvements include:

• Deposits: Grown from around ₹1 lakh crore to a base of ₹3 lakh crore.
• Gross NPA Ratio: Reduced from 18 per cent to 1.5 per cent.
• Capital Adequacy Ratio: Increased from less than 1 per cent to around 13 per cent.
• Independence: We revived the bank as an independent entity without merging it with another lender.

Retail segment profitability has been a pain point though... When we started after reconstruction, the retail segment contributed very little to overall profitability. We had to make substantial investments—branches, hiring, and tech—to build the retail book before returns could follow.

In FY24, the entire industry suffered an adverse credit cycle with higher slippages in unsecured loans. This came early in our investment phase, which is the only reason retail wasn't showing profits. Today, excluding credit costs, the retail book has broken even and has always been profitable from an operating standpoint.

What the PFC-REC merger means for investors

Nishanth Gopalakrishnan

The merger of power finance PSUs, PFC and REC, could create a power financing behemoth with a combined loan book of ₹11.5 lakh crore. Following a restructuring proposal by the Finance Minister in the Budget speech, the boards of both companies granted in-principle approval for the merger on February 6, which will eventually lead to the liquidation of REC.

Rationale and Synergies

The Centre is pursuing this merger because both Maharatna PSUs are identical in most respects. Each manages a loan book of approximately ₹6 lakh crore, with about 40 per cent of those loans directed to the distribution segment. Both entities have also expanded into non-power infrastructure financing, such as ports and roads.

Their operating and borrowing models are also nearly identical, raising funds through domestic bonds, bank loans, and external commercial borrowings to lend to the power ecosystem. By combining, the entities are expected to command higher bargaining power.

Impact on Business Operations

The combined entity’s portfolio would be broken down as follows:

• Distribution: 40%
• Conventional Generation: 29%
• Renewables: 14%
• Transmission: 8%
• Infrastructure & Logistics: 6%
• Miscellaneous: 3%

Approximately 80 per cent of the portfolio would consist of loans to state-owned entities. Based on Q3 FY26 financials, the combined entity would have a gross non-performing asset (GNPA) ratio of 1.3 per cent and a trailing 12-month Return on Assets (RoA) of about 3 per cent.

Implications for Shareholders

Currently, the government holds a controlling 56 per cent stake in PFC, which in turn holds a controlling stake in REC. Post-merger, PFC must remain a government company with at least a 51 per cent stake.

However, based on a swap ratio of 6 shares of PFC for every 7 shares of REC (calculated from February 10 prices), the government’s stake in the merged PFC would drop to approximately 42 per cent. To maintain its 51 per cent stake, the government has two primary options:

1. Buyback: Directing PFC to conduct a buyback in which the government does not participate.
2. Capital Infusion: Infusing at least ₹32,000 crore into PFC post-transaction.

Without capital infusion, PFC's outstanding shares would rise by about 33 per cent; with infusion, they would rise by approximately 56 per cent.

Valuation and Stock Attractiveness

As of February 10, both PFC and REC stocks trade at relatively low price-to-book value multiples of 1.1x. While investors must consider the high concentration of loans to state discoms and lower loan growth in 9M FY26, the stocks remain attractive given their profitability.

PFC and REC delivered RoAs of 3 per cent and 2.8 per cent respectively for the 12-month period ending September 2026, with net NPAs contained at approximately 0.2 per cent. For comparison, SBI trades at 1.8x trailing book value for a lower RoA of 1.1 per cent.

How to move up the value chain

By Vishnu Venugopalan

In the seminal essay, I, Pencil, an ordinary pencil is used to reveal an extraordinary fact that no single person on earth knows how to make a pencil entirely on their own. From wood and graphite to machines and transport, its creation relies on the skills and decisions of countless people spread across countries.

Shifting Growth Strategies

Over the modern industrial era, ideas about how emerging economies should grow have shifted. Import-substituting industrialisation dominated the post-war decades in countries like Brazil, India, and Mexico before hitting constraints in scale and efficiency. From the late twentieth century, a new consensus emerged focused on attracting foreign investment and integrating into global value chains (GVCs) to drive scale and productivity.

As economist Richard Baldwin argues, globalisation has unfolded in waves of unbundling: first separating production from consumption, then unbundling stages of production across borders, and currently unbundling tasks rather than industries.

India's Role in Global Networks

The distinction that now matters is not just participation in supply chains, but which specific tasks a country performs. For example, Apple’s supply chain included no Indian facilities in 2013, but by 2023, it included more than 10 facilities with over 20 more in the pipeline. While India has entered this network, most of the value still lies beyond mere assembly, highlighting the need for upgrading.

The Economic Survey of India 2025-26 suggests that the way forward is strategic indispensability—occupying positions in global production networks that are difficult to bypass or substitute.

Five Pillars for Moving Up the Value Chain

1. Task-Focused Industrial Policy: Policy must adjust to a world where production is fragmented into specific tasks. Support and incentives should be conditional on firms internalising more complex tasks over time, not just expanding output.
2. Deepening Backward GVC Participation: India's limited share in manufacturing stems from weak backward linkages, particularly in importing intermediates for export-oriented production. Integration, not insulation, is the pathway to upgrading.
3. Cluster-Led Scale: Industrial clusters require deliberate regional planning that integrates social infrastructure like housing, transport, healthcare, and education. Success depends on concentration, connectivity, and dense ecosystems rather than standalone estates.
4. AI-Services-Manufacturing Convergence: Modern manufacturing is inseparable from services like design, logistics, and software. Services must be treated as a core pillar of industrial strategy. For instance, nearly 41 per cent of India’s logistics cost is driven by activities highly susceptible to AI adoption and automation.
5. Economic Statecraft with Institutional Capacity: Industrial policy must be a continuous problem-solving function anchored in adaptive state capacity. Reducing the cost of capital depends as much on productivity, exports, and R&D investment as it does on finance.

Moving up the value chain is neither automatic nor assured. For India, the real test is whether it can build capabilities to move from mere participation toward indispensability in global supply chains.

Kerala farm varsity launches rejuvenated varieties of Cochin ginger, Alleppey finger turmeric

Our Bureau | Kochi

The Kerala Agricultural University (KAU) has launched selected varieties of Cochin ginger and Alleppey finger turmeric, two iconic spices that have been traded from the state for centuries. These trade names were formally documented as early as the 19th century with clearly defined quality parameters that distinguished them in global markets. However, the availability of these traditional varieties has declined sharply in recent years, hurting their niche export segments.

Reasons for Decline

The fall in production is attributed to a shift towards high-yielding varieties favored in the domestic market for size and productivity. Additionally, indiscriminate cultivation and varietal mixing further eroded the distinct quality traits of the traditional strains.

Boosting Exports

A seminar was held under the MIDH project, “Rejuvenation of Cochin Ginger and Alleppey Finger Turmeric for export promotion,” implemented by the Department of Plantation, Spices, Medicinal and Aromatic Crops at the College of Agriculture, Vellanikkara (2022-26). Sunil Appukuttan Nair, Principal Investigator, stated that reviving these varieties could provide a significant export boost to markets in the Middle East, Europe, and the US. The initiative will identify potential Farmer Producer Organisations (FPOs) and spice exporters for large-scale cultivation and distribute token seed kits.

Industry Demand

Ramkumar Menon, Chairman of the World Spice Organisation (WSO), noted that annual industry demand is estimated at about 20,000 tonnes of dry Cochin ginger (around one lakh tonnes of fresh ginger) and nearly 50,000 tonnes of high-curcumin turmeric comparable to the Alleppey variety. Demand is rising, driven by growing interest from the nutraceutical and pharmaceutical sectors for immunity-boosting properties, but supplies meeting quality specifications remain limited.

The All India Spices Exporters Forum and WSO flagged the issue to the Agriculture Ministry and the Spices Board, prompting this targeted project to identify, purify, and multiply authentic planting material for commercial use. The initiative is expected to enable better price realization while ensuring compliance with international quality standards.

BUDGET SPEND CHECK: MORE UNDERSHOOTING

By Nandita Venkatesan

On the first day of February, the nation tunes in for the Union budget, parsing how the finance minister allocates limited resources to meet huge public expectations. However, a Mint analysis comparing budgeted outlays with actual expenditure between FY10 and FY26 (excluding the pandemic years) shows that results are mostly underwhelming. Several ministries and flagship schemes have faced sharp spending compression toward the end of fiscal years as the government walks a narrow fiscal tightrope.

Scheme Stagnation

The Modi government has opted to support growth by backing infrastructure-heavy schemes and making welfare programs more "targeted" through public delivery and cash transfers. Despite this focus, an analysis of 11 flagship schemes reveals that six have used sub-90% of their funds on average over the last four fiscal years.

Average spending as a percentage of budget outlay (FY23-FY26) for key schemes include:

• Mission Shakti: 61%.
• Jal Jeevan Mission: 62%.
• Swachh Bharat: 63%.
• UDAN: 60.9%.
• PM Kisan: 76.7%.
• Pradhan Mantri Awas Yojana: 78%.

A shortfall in spending can indicate multiple issues, such as scheme saturation, poor demand, or over-optimistic budgeting.

Performance of Social Sector Ministries

The performance of social sector ministries offers clues to the government’s welfare priorities. While rural development (driven by the rural jobs scheme) and culture performed best—spending 107.4% and 103.4% of their budgets respectively—others have lagged. The skilling ministry saw the lowest fund utilization in this category, averaging just 59.1% during FY23-FY26. Core pillars like health and education fared better, using over 90% of their funds, though spending remains below desired levels.

Divided Dividend: Widening Spending Cuts

Ministry spending cuts have grown more severe and widespread in recent years. Between FY23 and FY25, 12-13% of ministries spent less than 50% of their funds, compared with only 2-3% in the decade preceding the pandemic. By FY25, nearly half of the 53 ministries listed by the government used less than 80% of their budgeted amount. The government showed much stronger utilization ratios prior to the pandemic, when only 10-16% of ministries undershot allocations by over 20%.

The Usual Suspects

While spending cuts vary each year, certain "usual suspects" consistently miss their targets, spending less than 60% of their outlay in at least two of the last four fiscal years. These include:

• Minority Affairs and Tourism: Consistently undershooting targets due to systemic bottlenecks in fund absorption or execution constraints.
• Labour and Employment and MSMEs: Frequently missing spending targets by wide margins.
• Jal Shakti and Skill Development: Showing erratic fund utilization despite being key to infrastructure and human capital.

Fiscal Squeeze

The government has received praise for rapid fiscal consolidation, reducing the deficit from a pandemic high of 9.16% of GDP in FY21 to a projected 4.31% by FY27. However, data shows that a major chunk of this consolidation occurred through spending cuts rather than a rise in revenue. While fiscal discipline earned praise through FY26, cuts in income tax and GST rates further dried revenue in FY27, leading to a sharp spending cut of 30 basis points as a percentage of GDP. This execution gap suggests that while development priorities are ambitious, implementation struggles to keep pace.

Fundamentum to sharpen fintech bets with third fund

The VC’s move is driven by India’s digital public infrastructure and financial inclusion gaps

Rwit Ghosh | Bengaluru

Fundamentum, the venture capital firm co-founded by Nandan Nilekani, is preparing to sharpen its fintech focus in its upcoming third fund. The firm is banking on India’s robust digital public infrastructure and a widening financial inclusion gap to drive the next wave of growth.

A Wide-Open Market

Mayank Kachhwaha, who leads fintech investments at Fundamentum, believes the market remains completely open from a financial inclusion standpoint. The firm recently led a $23 million Series C round in Olyv, a personal loan provider. This marked its fourth fintech investment, bringing the sector to nearly half of the 11 total investments made through its $227-million second fund.

Other recent participations by Nilekani’s fund include:

• Flexiloans: $44 million Series C (June 2025).
• Stable Money: Led a $20 million Series B (June 2025).
• TransBnk: $25 million Series B (August 2025).

Investment Strategy

Fundamentum is selective, evaluating 5 to 10 startups weekly. Kachhwaha noted that the firm often builds relationships with companies for years before investing. Typically, the firm enters post-product-market fit as companies transition into building institutions, writing first cheques of $10–15 million.

While no specific target for the number of fintech companies in the third fund has been set, the core thesis remains "India-first", focusing on tech-first companies building primarily for the domestic market.

Four Key Segments

The firm is broadly looking to back companies across four segments:

1. MSME Credit: A massive opportunity, with an addressable credit gap of approximately ₹30 trillion ($300 billion).
2. Consumer Credit: Tapping into the growing demand for individual loans.
3. Wealthtech: Managing the increasing savings and investment needs of Indians.
4. Banking Infrastructure: Supporting the underlying tech that powers financial services.

The push into MSME credit is particularly timely. Registrations in this sector surged from 2.5 crore in March 2024 to over 6.2 crore in March 2025. Furthermore, digital lending for MSMEs is seen as a large emerging opportunity, given that 90 per cent of surveyed businesses in the sector now accept digital payments.

How Waaree overcame US tariffs while Adani faltered

Sourcing of cells from South East Asia, manufacturing capacity in US help sustain sales

Nehal Chaliawala | Mumbai

Smart supply-chain manoeuvres and assembling in the US helped India’s top solar panel exporter Waaree Energies maintain its lucrative trade with the country in the face of steep tariffs, even as the exports of its main domestic rival Adani New Industries Ltd (ANIL) faltered.

Strategic Sourcing and Assembly

Waaree escaped crippling tariffs on India by sourcing solar cells—the building blocks of solar panels—from suppliers in Southeast Asia. The US levies tariffs based on the country of origin of the solar cells rather than where the panels are assembled. By procuring cells from countries like Cambodia, Thailand, and Vietnam (where tariffs are 19-20%) instead of India, Waaree minimized its tax burden.

In addition, Waaree operates a panel manufacturing line in the US with a 1.6 GW capacity. During the December quarter, the company sold 275 MW of locally produced modules and 300 MW of imported modules in the US. These exports are highly profitable; while modules sell for ₹18-24 per watt in India, they fetch approximately ₹25-27 (28-30 cents) per watt in the US.

The Contrast with Adani

While Waaree’s trade flourished, ANIL’s exports dropped to zero in the December quarter. This divergence is largely due to different manufacturing models:

• ANIL relies on a backward-integrated model, using cells made in-house at its facilities in Mundra, Gujarat. While this offers a cost edge, it provides less flexibility to sidestep origin-based tariffs.
• Waaree has 21.2 GW of module capacity but only 5.4 GW of cell capacity, compelling it to import cells. The company turned this "shortcoming" into a strategic advantage to mitigate US tariffs.

Outlook

Industry experts note that Waaree benefited significantly from its US assembly plant and Southeast Asian cell sourcing. While Adani’s pause in exports is considered temporary, analysts at ICRA noted that US tariffs and increased competition affected ANIL’s revenue and profitability in H1 FY2026. However, with the India-US trade framework expected to lower tariffs to 18%, business is likely to normalize for both companies soon.

Faster takedowns: Big Tech wary of India’s new AI law

Shouvik Das | New Delhi

India’s maiden rules governing the use of artificial intelligence (AI) in social media may set Big Tech scrambling for adequate content moderation teams, after New Delhi crunched timelines for taking down deepfake posts with nudity, defamatory, and other illicit content.

Drastic Timeline Compression

Under the new mandate, non-consensual sexual imagery—including deepfakes—must be removed within two hours instead of the previous 24-hour window. Any other unlawful content is to be removed within three hours, representing a sharp reduction from the earlier 36-hour requirement.

While the Centre maintains that technology firms are well-equipped to automate scanning and curb harmful online material, lawyers and policy executives warn that such sweeping automation could lead to the removal of legitimate posts, disrupting content creators and advertisers.

Compliance Challenges

Rohit Kumar, co-founder of The Quantum Hub, noted that while removing the watermark requirement for AI content was progressive, the new timelines will be significantly difficult to match. He emphasized that while most monitoring is automated, taking down specific content based on reports inevitably requires human oversight, adding massive costs for large tech firms and presenting a nearly impossible task for smaller ones.

A senior executive at a top Big Tech firm characterized the policy as "taking one step forward, but two steps backward," noting that even progressive economies like Japan and Singapore backed down from hard-touch AI regulation because it is a nascent, evolving field.

Global Comparison

India’s new timelines are notably stricter than those in other major jurisdictions:

• United States: The Take It Down Act mandates removal of non-consensual sexual imagery within 48 hours.
• European Union: The AI Act urges proactive removal but does not specify a clock countdown.
• China: Laws mandate "high pressure" for removal but lack specific timelines.

Impact on Smaller Platforms

The financial and operational burden of these rules has raised concerns about market sustainability. Rutuja Pol, a partner at law firm Ikigai, pointed out that the 10-day window given to firms to comply with the rules is itself difficult. For smaller social media platforms, the cost of compliance may become so high that it becomes infeasible to continue operating in India.

How fake invoices duped BlackRock unit into a $400 million loan

By Jack Pitcher & Juliet Chung

BlackRock entered the booming private-lending business last July by acquiring HPS Investment Partners, a firm founded by Goldman Sachs alumni. Days after the deal closed, an analyst discovered a massive problem with a $400 million credit agreement led by HPS for telecom entrepreneur Bankim Brahmbhatt. The loan used accounts receivable—invoices acquired from other businesses—as collateral, but HPS soon alleged that the emails, invoices, and collateral were worthless and fake.

The Unraveling of a "Breathtaking" Fraud

The discrepancy was first spotted when an analyst noticed that an email domain on an invoice did not match the actual website of the company purportedly sending it. HPS contacted the firms in question, such as the Belgian telecom BICS, which confirmed the fraud, noting they had nothing to do with the "belgacomics.com" domain used in the emails. Further review of contracts revealed what appeared to be forged customer signatures.

When HPS portfolio manager Jon Ashley sought answers, Brahmbhatt—who had been in India since June—eventually stopped answering his phone. Lenders found his corporate offices in Garden City, N.Y., locked and empty in early August.

Missed Red Flags and Due Diligence

Brahmbhatt’s companies, which focused on wholesale VoIP termination, had a history that diligence experts say should have signaled alarm. He had been previously sued by three telecom companies for refusing to pay for services, and regulators in Massachusetts and California had taken action against his firms for failing to file necessary paperwork. One of his companies, Broadband Telecom, had its utility status suspended in Pennsylvania in 2017 for an "unacceptable history of compliance".

Despite this, HPS provided a large credit facility to Brahmbhatt at the end of 2020, relying on its own comprehensive due diligence and third-party experts, including Deloitte. HPS also hired the accounting firm CBIZ to perform annual audits of the collateral.

Impact and the Private Credit "Frenzy"

In August, Brahmbhatt, his telecom firms, and his factoring company Carriox all filed for bankruptcy. Brahmbhatt cited "financial distress" from lawsuits, though he noted he had recently repaid a $4 million debt to a relative. The FBI is now investigating the matter.

While the loss is a small portion of HPS’s $179 billion in assets, it has significantly impacted the two main funds that held the loan, with expected returns dropping from roughly 11–12% down to 8–9%. HPS has written the entire investment down to zero.

Industry experts suggest this wipeout highlights the risks of the $3 trillion private-credit industry, where intense competition for deals can lead to lower standards. JPMorgan Chase CEO Jamie Dimon warned that more defaults may emerge, stating, “When you see one cockroach, there are probably more”.

Getting a job is harder than toppling a government for Bangladesh’s Gen Z

Shan Li | Rangpur, Bangladesh

In July 2024, 25-year-old Faruk Ahmed Shipon joined daily street demonstrations fueled by frustration over job prospects. To his amazement, these protests evolved into a revolution that toppled the country’s long-term authoritarian leader, Sheikh Hasina. However, as Bangladesh prepares for its first national elections since that uprising, Shipon and many of his peers are losing hope that new leadership can solve the economic crisis plaguing their generation.

A Bleak Job Market

Despite the political shift, young graduates are entering the toughest labor market in years. While the interim government led by Nobel laureate Muhammad Yunus promised democratic and economic reform, critics argue it has delivered few tangible results. Total employment in the country fell by nearly two million in 2024 compared to the previous year.

The economic situation was deteriorating even before the regime change, with foreign direct investment falling for four consecutive years and domestic investment remaining stagnant for a decade. The garment sector, a cornerstone of the economy, has shed jobs, with employment dropping from 4.1 million in 2019 to 3.7 million last year. Automation is a major factor; some factory owners have cut their workforces by a third after installing machines to handle tasks like thread trimming.

The Graduate Mismatch

Bangladesh faces a growing mismatch in its labor market where higher education often correlates with higher unemployment.

• Graduate Unemployment: The rate for college graduates rose to nearly 14% in 2024, up from 5% in 2010.
• No Formal Education: Conversely, those with no formal education had a jobless rate of just 1.3%.

Business leaders note that while at least 700,000 graduates enter the force annually, many lack practical skills. Manufacturers argue the country produces too many history students and not enough workers with vocational training in trades like plumbing or carpentry.

Personal Toll and Emigration

For Shipon, who holds a master’s degree in English, the reality is a struggle to survive on approximately $290 a month earned through private tutoring. Half of his income goes toward caring for his mother, including rent for a two-room tin shed and medicine.

The revolution was galvanized by the death of his classmate, Abu Sayed, who was shot by police during the protests. Now, Siphon and Sayed’s family fear those sacrifices were in vain. Many of Sayed's peers remain without stable work, as the few available government positions—highly prized for their perks and prestige—are nearly impossible to secure.

Disappointed by the lack of change, Shipon’s new dream is to emigrate permanently to Sweden or Switzerland. “When I look back at what we did, I feel disappointed,” he said. “Only Sheikh Hasina has left. Everything else is the same”.

HOUSING, RETIREMENT FINANCE ARE LETTING FAMILIES DOWN

By Tarun Ramadorai

India’s personal finance markets have made major strides, with mass bank account ownership, world-class digital payments, and rising participation in formal finance. Yet two linked failures persist: a weak home loan market and a fragile retirement savings system. Household balance sheets show wealth overly concentrated in real estate, heavy reliance on unsecured debt, and thin retirement savings, forcing dependence on family in old age.

Property-Heavy Portfolios

Indian households hold an unusually high share of wealth in real estate—far more than in comparable economies—yet home loan participation remains low. This excess home equity crowds out other long-term investments, including retirement savings, tightly linking the two problems.

Why Mortgages Fail

The causes are both structural and practical.

• Structural issues: Long-term, high-value lending is weakened by slow legal enforcement, unclear land titles, and uncertain property rights.
• Practical barriers: Home loans are burdened by "punishing frictions," including onerous documentation, endless wet signatures, hard-sold insurance, opaque pricing, and costly refinancing.

The result is that many households shun mortgages or take ill-suited loans, locking wealth into a single risky asset while remaining poorly prepared for retirement.

An Ageing Reality

India is ageing, and joint families are giving way to nuclear households. While life expectancy is rising, pension wealth remains negligible. Formal account participation is low, and balances fall short of sustaining working-life living standards. Many still rely on children or property for security—an increasingly fragile bet in a mobile, urban economy where younger generations face growing pressures.

Proposed Solutions

1. Fixing Mortgages: The aim should be standardized, "boring" mortgages—simple fixed-rate or transparently benchmarked floating-rate loans that automatically refinance when rates fall. Disbursement should be fast and frictionless using digital infrastructure, and a regulator-mandated "default" mortgage should be offered by all lenders for easy comparison.
2. Fixing Retirement: The goal is a single, portable pension account that follows workers across jobs, with automatic enrollment and sensible life-cycle investment defaults. This requires lower costs, stripped-down complexity, and active choice only where it adds value.
3. Confronting Conflicts of Interest: Advice and distribution should be separated, commissions plainly disclosed, and mis-selling punished visibly.

India has built world-class financial infrastructure; the harder task is now fixing the products that matter most for household welfare.