Newspaper Summary 190226

 

Sarvam AI unveils two home-grown large AI models

Sanjana B | Bengaluru

Sarvam AI on Tuesday unveiled two new large language models (LLMs) at the India AI Summit—a 30-billion and a 105-billion-parameter model—both of which outperform comparable models in their respective size categories on key benchmarks.

In April 2025, the Union government selected Sarvam under the IndiaAI Mission to build the country’s first sovereign LLM. These models, along with a 3-billion parameter variant, were trained using compute allocated under the IndiaAI Mission, with infrastructure support from Yotta and Nvidia.

Production-Ready Conversational Engine

The Sarvam 30B model is a mixture-of-experts (MoE) model pre-trained on 16 trillion tokens. While it has 30 billion total parameters, it only activates 1 billion parameters when generating an output token, which helps keep inference costs low. It supports a 32,000-token context length, enabling long conversations and agentic workflows.

Positioned as a real-time conversational engine for production use, Sarvam 30B supports Indian languages and user-facing dialogue. On benchmarks such as Math500, HumanEval, and MMLU, it remains competitive with or surpasses models like OpenAI’s GPT-OSS-20B, Google’s Gemma 27B, and Alibaba Cloud’s Qwen3-30B.

Advanced Reasoning and Indian Language Edge

The company’s larger MoE model, Sarvam 105B, features 9 billion active parameters and a 128,000-token context window. It is specifically built for complex reasoning, performing strongly across mathematics, coding, and Indian languages. On benchmarks like GPQA Diamond and MMLU Pro, it performs on par with GPT-OSS-120B and Zhipu AI’s GLM-4.5-Air.

Sarvam Co-Founder Pratyush Kumar noted that Sarvam 105B was trained from scratch and provides intelligence competitive to DeepSeek, despite being one-sixth the size of the 600B-parameter DeepSeek-R1. He further highlighted that the model handles Indian languages better than larger, more expensive models like Gemini 2.5 Flash.

Democratizing AI for India

The deployment of these models is expected to democratize legal reasoning and research, as well as improve customer service and government queries for bottom-of-the-pyramid users in local Indian languages. Additionally, Sarvam has partnered with Qualcomm to develop a Sovereign AI Experience Suite, which will run these AI applications across devices like smartphones and PCs, focusing on supporting multiple Indian languages and dialects.

AGI achievable in the next 5-8 years: Google DeepMind CEO

LOT IN STORE. Demis Hassabis says the next 10 years will be a golden era for scientific discovery using AI

Sindhu Hariharan | New Delhi

Artificial Intelligence is currently at a threshold moment, with Artificial General Intelligence (AGI) on the horizon within the next 5-8 years, according to Google DeepMind co-founder and CEO Demis Hassabis. Speaking to a full house at the AI Impact Summit in New Delhi, Hassabis stated that we are seeing the very beginning of what autonomous systems can achieve, and expressed his personal motivation to use AI to advance science, medicine, and climate change.

The Path to AGI

During a fireside chat with Professor Balaram Ravindran of IIT-Madras, Hassabis clarified that while AGI is coming, the current ecosystem is still missing key elements. He noted that today's AI systems are often inconsistent and lack the ability to continuously learn and train themselves. He described current technology as possessing a "jagged intelligence," noting that systems capable of winning gold medals in Math Olympiads still frequently make mistakes in elementary math.

Despite these current limitations, Hassabis predicted that the next 10 years will represent a "golden era" for scientific discovery driven by AI.

India’s Role and Advice to Students

Regarding India’s position in the global AI race, Hassabis remarked that he was "incredibly impressed" by the nation’s energy and positive attitude toward AI. He urged students to "lean in" and become proficient with AI tools, asserting that doing so would provide them with a "superpower" in any field they choose to pursue.

Risks and Responsibility

While Hassabis is "cautiously optimistic" about current AI systems, he emphasized that human ingenuity must be paired with efforts to address societal challenges. When questioned about potential dangers, he specifically flagged cybersecurity and bio hacks as two key risks. He noted that Google DeepMind is actively working to ensure that AI "defences are stronger than of-fences" to counter these threats.

AI disruption to software industry is real, says Zoho’s Sridhar Vembu

Sindhu Hariharan | New Delhi

Artificial intelligence models have become significantly more capable in just the last few months, making the disruption to the software industry "very real," according to Sridhar Vembu, Founder and Chief Scientist of Zoho Corp. Speaking on the sidelines of the AI Summit, Vembu noted that models from companies like Anthropic have improved so much in the last two months that they are drastically accelerating software development speeds.

Rapid Prototyping and Efficiency

Vembu highlighted that tasks which human engineers previously estimated would take two to three months can now be completed in just two to three days using these advanced models. This shift allows companies to reach the prototype stage extremely quickly. He urged software firms to experiment across different areas and try new approaches, noting that "sometimes the opportunity may be in a place where everybody is not looking".

The "Textile Industry Moment"

Vembu described the current state of the Indian IT sector as its "textile industry moment," comparing it to when manual weavers had to adapt to new-age automated technologies. Addressing concerns over job losses, he pointed out that history demonstrates that large-scale technological transformations consistently "create more jobs than they destroy".

Advice to Software Engineers

For engineers worried about their roles, Vembu suggested that the "most safe job" involves developing stronger customer relationships rather than just working with code. He advised them to focus on understanding customer needs and learning how to translate those needs into products faster.

India’s Positive Outlook

Vembu praised the AI Impact Summit for projecting India as an emerging power in the field. He expressed confidence that India would lead in finding unique AI use cases for education and public services. He credited this potential to India's "young and curious population," stating that while there is some fear, the overall national attitude toward AI remains overwhelmingly positive.

India well positioned to be leader in AI: Sunak

Supported by a deep talent pool and strong digital public infrastructure, India is well positioned to be a leader in AI and demonstrate its mass adoption and deployment in society, former British prime minister Rishi Sunak said on Wednesday.

At an interactive session during the ongoing AI Impact Summit, Sunak also said there are different attitudes towards artificial intelligence (AI) around the world, and in India, there is “incredible optimism and trust”, whereas in the West, the “overriding feeling is one of anxiety at the moment”. The session — ‘AI for All: Reimagining Global Cooperation’ — was hosted by Carnegie India in association with the Observer Research Foundation, among other partners.

During the interaction, Sunak was asked about the learnings from the AI Safety Summit, a global event that took place in November 2023 at Buckinghamshire in the UK, under his tenure as the prime minister. “First of all, there was this scepticism about whether you could get these politicians, leaders and all the entrepreneurs and innovators together, and whether they would understand each other,” Sunak recalled.

The former UK prime minister asserted that crucially, the debate has shifted over the years when it came to AI. “I think the AI debate has shifted from technology to strategy. From what these tools could do to what countries are choosing to do with them,” Sunak said. He underlined that for political leaders, “AI can’t be some specialist subject on the side”, it’s got to become the “central responsibility” of a government. “And that’s what we are seeing at this Summit, with its focus rightly on impact,” Sunak added.

When he left office, someone gave him a copy of the book Technology and Great Powers, which looks at the history of great technological revolutions, and proves the thesis that even if you don’t invent a technology, you could be the country that benefits from it the most, stretching all the way back to the printing press. “I think India has recognised that leadership in technology doesn’t just depend on inventing technology, it’s about how you deploy it,” he said.

An expanded Trans-Pacific alliance will be beneficial

Pritam Banerjee

The global economy is currently navigating a sea of uncertainty as the post-Cold War rules-based trading system is increasingly undermined by intensifying geopolitical rivalries. While this order provided essential stability for middle powers to grow, strategic options for these nations now appear to be shrinking. Middle powers—a diverse group including mature economies like the European Union, Japan, and Canada, as well as surging emerging powers like India, Brazil, and Indonesia—share a vital goal: managing turbulence without compromising their national interests.

To achieve this, they must salvage a rules-based system that protects them from the “weaponisation” of demand, supply, and technology. An expanded Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) offers the ideal platform for this collective defence.

A New Economic Gravity

The current CPTPP consists of 12 countries, including major economies like Japan, Australia, Canada, and the UK. With the EU, Indonesia, and South Korea already seeking entry, the addition of India, Brazil, and the Philippines would transform the pact into a massive, united counterweight to any dominant power seeking to destabilise the global economy.

In this configuration, India and the EU would serve as the primary anchors of a trans-regional alliance. This bloc would account for:

• Global reach: 13 G20 members.
• Market power: Roughly 45 per cent of global GDP and over a third of global trade.
• Demographic weight: A combined population of over three billion, representing nearly 40 per cent of humanity.

The Engine of Global Growth

This expanded group would be responsible for approximately 40 per cent of global GDP expansion in 2026, with India alone accounting for 17 per cent of that growth. By 2030, India is projected to contribute 20-25 per cent of all global GDP growth. This surge, alongside contributions from Indonesia, Brazil, and others, will balance the falling economic shares of mature powers, potentially accounting for over 50 per cent of global economic growth by the end of the decade.

The ‘Third Alternative’

This alliance would be more than just a trade pact; it would be a trans-regional economic alliance underpinned by open markets and democratic accountability. Synergies would include:

• A growth-innovation engine: Fusing the demographic dividends of the emerging world with the sophisticated technology and capital of mature powers.
• Dominance in global value chains: Empowering businesses to lead global value chains through unprecedented access to scale and technical know-how.
• A shield against economic coercion: Providing a combined market heft to defend against supply-chain “blackmail”.
• Forging digital sovereignty: Leveraging the bloc's talent pool to create “digital champions” and a more balanced global digital ecosystem.
• Salvaging global institutions: Driving the compromises needed to revitalise the WTO, World Bank, and IMF.

The ‘Grand Bargain’

For this vision to materialise, mature powers must acknowledge the unique developmental imperatives of emerging economies. This requires ‘Grand Bargains’ in sensitive areas like labour standards, environmental regulations, and intellectual property. Success lies in flexibility through carve-outs and exemptions that allow emerging members the policy space to grow. The groundwork is already laid by the India-UK and India-EU Free Trade Agreements (FTAs), which provide a roadmap for the necessary compromises.

India’s Strategic Imperative

As India ascends to the status of a global great power, its leadership in crafting this “third alternative” will be crucial. This leadership is an evolution of India's diplomatic history:

• A new non-alignment: Just as India spearheaded the Non-Aligned Movement during the Cold War, it can now lead a redefined CPTPP to protect middle powers from modern great-power coercion.
• Incremental but defining: Since India is already negotiating or has signed FTAs with nearly every current CPTPP member, joining the bloc is a logical incremental step.

While the step may be incremental, the consequences would be world-defining, shifting the centre of gravity towards a more equitable international order defined by cooperation and mutual interest.

The writer is Head, Centre for WTO Studies, Indian Institute of Foreign Trade. Views are personal.

Effect of the new rules on bank lending to brokers

NEW NORMS. Will push up cost of funds for proprietary trading

The RBI ban on bank funding for proprietary trades from April 2026 will raise costs and force deleveraging

Akshata Gorde

The Reserve Bank of India (RBI) has tightened rules governing how banks lend to capital market intermediaries, raising significant concern among brokerage firms, particularly those with large proprietary trading operations. While the move is intended to curb excessive leverage and strengthen financial stability, brokers warn the transition could disrupt funding and trading activity.

What has the RBI changed?

The RBI has mandated that all bank lending to capital market intermediaries must be fully backed by eligible collateral and subject to continuous monitoring. Crucially, banks are now barred from financing brokers’ proprietary trading or investment positions. However, lending for operational requirements, such as working capital, settlement mismatches, and market-making, remains permitted. Banks are also explicitly allowed to fund margin trading undertaken by clients through stockbrokers.

Why does the proprietary trading restriction matter so much?

For many brokers, bank credit served as a relatively low-cost source of leverage for proprietary trading desks. With this route shut, brokers will be forced to either cut back positions, deploy more internal capital, or shift to alternative funding sources, which are typically more expensive. This directly impacts leverage, trading volumes, and short-term profitability, especially for firms where proprietary trading is a meaningful contributor to earnings.

What do the new collateral rules do?

The RBI has introduced standardized collateral haircuts:

• 40 per cent on listed equities.
• 25 per cent on sovereign gold bonds, mutual funds, and REITs/ETF units.
• 15-40 per cent on debt mutual funds and debt instruments.

While these norms bring clarity and consistency for banks, they may reduce the effective borrowing value of pledged assets for brokers, further tightening funding in some cases.

Are client-facing brokers affected?

Brokers focused on client-driven businesses—such as cash equities, derivatives broking, advisory, and wealth management—are expected to see limited impact on core operations. The clear regulatory backing for bank funding of client margin trading is viewed as a positive for this segment, removing a long-standing grey area for lenders.

Why are brokers planning representations to the RBI?

While brokers generally support the goal of reducing systemic risk, they are concerned about near-term disruption. Industry representations are expected to focus on transition timelines, operational clarity, and the cumulative impact of higher funding costs. In the short run, brokers warn of selective unwinding of proprietary positions and some pressure on market liquidity.

Over the longer term, the rules are likely to push the industry towards lower leverage, stronger balance sheets, and more conservative business models.

Norway shares India’s vision for AI impact

How can we measure the success of Artificial Intelligence? By how sophisticated its algorithms are? By the speed of its computation? For me, the metric that should matter most is its impact. That is why I’m so happy to be here in Delhi for the AI Impact Summit.

The Summit’s three guiding “sutras” — People, Planet, Progress — remind us that AI’s real value lies not in technicalities but in its power to improve lives and shape a safer, more equitable and sustainable future.

Norway’s ‘National Digitalisation Strategy 2024-2030’ sets out an ambitious goal: To become the world’s most digitalised country by 2030. This is not an end goal but a means to build better public services, a more competitive private sector and a more inclusive society. The responsible application of AI is central to this effort.

Strengthening Infrastructure and Governance

Norway is strengthening our national AI infrastructure through concrete initiatives. Last year, we launched AI Norway, a national AI hub to support the innovative and responsible development and use of artificial intelligence in both the public and private sectors.

Initiatives such as Olivia, Norway’s most powerful supercomputer, will play a key role in developing artificial intelligence, particularly in advancing and improving Norwegian language models. We are also establishing new AI Research Centres to boost expertise in sectors where Norway has clear industrial strengths and where AI can help solve pressing societal challenges.

Norway is also a co-founder of the Digital Public Goods Alliance, aiming to promote open and shareable digital solutions that support sustainable development and the public good. On the regulations side, Norway has proposed that the European Union’s AI Act be implemented into Norwegian law. All these developments reflect a broader philosophy: AI must be aligned with real economic and societal needs.

A Complementary Agenda

In this context, Norway’s complementarity with India stands out. Norway brings strengths in governance, sustainability and innovation. We have extensive experience in managing natural resources responsibly, building transparent public institutions and ensuring that technological change is anchored in open dialogue.

India, on its part, brings scale, an enormous talent pool and expertise in building digital systems for a population of 1.4 billion. As part of India’s remarkable digital transformation, systems for identity, payments and service delivery have provided digital access to millions, even in remote locations. Its dynamic start-up ecosystem and thriving digital economy offer much scope for AI innovation. India has consistently emphasised the use of AI for service delivery at the grassroots level, from agriculture and healthcare to legal services and education. Together, these strengths create synergies leading to meaningful and mutually beneficial cooperation.

The India-Norway economic relationship has also entered a new phase. The Trade and Economic Partnership Agreement (TEPA) between India and the EFTA countries, including Norway, entered into force on October 1, 2025. This agreement provides a foundation for a trade and investment partnership and gives a boost to collaboration in energy transition, maritime technology, healthcare innovation, cybersecurity and digital services — all sectors where AI will play an increasingly important role.

Converging Ambitions

Despite the differences in size and scale between our two countries, our ambitions converge. We want AI that can strengthen democratic governance, drive inclusive and sustainable growth and serve the public interest. Together, as partners, we can put responsible AI frameworks into practice and test how they work on the ground.

Norway and India are already cooperating on digital public infrastructure solutions such as MOSIP (Modular Open-Source Identity Platform) developed in India, benefiting countries around the world. The democratisation of AI is another shared imperative. Access to AI tools should not be limited to a privileged few. Open innovation, support for start-ups and collaboration between public and private sectors can help distribute benefits more widely.

Safety and Ethics

Having said that, democratisation must not come at the cost of safety. Guardrails must be in place to prevent misuse, such as the spread of misinformation or violations of privacy, and to protect vulnerable communities. During India’s G20 presidency, the agreement on a common Framework for Systems of Digital Public Infrastructure was an important milestone, demonstrating that shared digital systems can drive development, inclusion, trust and healthy competition.

As Minister of Digitalisation, I am aware that technological change often outpaces the ability of institutions and legislation to adapt. We cannot predict every new change. But what we can do is base our innovations on principles of human rights, the rule of law, ethics and sustainability that can maximise their benefits for the people.

The choices we make today about how AI is developed and used will influence our societies for decades to come. The question is not whether AI will transform our public and private lives—it is already doing so. The question is how we ensure that this transformation is responsible, transparent and aligned with democratic values. I look forward to the many valuable answers that will emerge during the AI Impact Summit.

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The writer is Norway’s Minister of Digitalisation and Public Governance.

Exporters face uphill task to ship wheat

LACKING PARITY. With MSP hiked to ₹2,585 a quintal this year, the grain will be $45/t higher than global rates

Subramani Ra Mancombu | Chennai

India will find it tough to get buyers abroad for its wheat as the domestic cost of the foodgrain is higher than in the global market, according to traders and analysts. This "uphill task" is primarily attributed to the government fixing the minimum support price (MSP) for wheat at ₹2,585 a quintal, an increase of ₹160 from the previous year.

Export Context and Pricing

Last week, the government lifted a nearly four-year-old ban on wheat exports, allowing for shipments of 2.5 million tonnes (mt). This move was intended to ensure remunerative prices for growers after domestic rates dropped earlier this month. However, price disparities remain a significant hurdle:

• Domestic Costs: Wheat delivered at Kandla port currently costs between ₹25,200 and ₹25,500 a tonne ($285–288).
• Freight Impact: Including a freight rate of $20 a tonne for the Middle East and South-East Asia, the total cost and freight (C&F) could reach $305–308 a tonne.
• Global Comparison: Global wheat prices are currently ruling at approximately $260 a tonne. Even with the premium Indian wheat sometimes commands in the Middle East, a difference of $45–48 makes it uncompetitive.

International Competition

Traders noted that Indian wheat struggle to compete with global offers from companies like Olam International, Bunge, and Louis Dreyfus, who are offering wheat for late March delivery between $286 and $290 a tonne. Furthermore, Indian wheat with 11.5% protein content is trading $20 higher than grain from the Black Sea region.

While Australian and North American wheat are finding strong global demand, Indian exporters are left with limited competitive options.

The Bangladesh Option

The "best-case scenario" for Indian exports may be limited to road or rail transport to Bangladesh. Wheat exported from Bihar could cost approximately $283 a tonne, which is closer to the current landing price in Bangladesh of $270. Analysts suggest that under the new regime in Bangladesh, India could potentially explore government-to-government (G2G) exports.

Record Stocks and Production

India is under significant pressure to export because its ending stocks as of March 31 could reach a 10-year high of 21 mt. Currently, the Food Corporation of India (FCI) holds 25.31 mt of wheat alongside record-high rice stocks.

The initial export ban was implemented on May 13, 2022, following severe heatwaves that lowered production to below 110 mt. Since then, the promotion of climate-resilient wheat varieties helped production rebound to 117.95 mt in 2025.

Wheat Cost & Freight Price Disparity ($/t)

Origins	West Coast (Kandla)	East Coast (Vizag)
Gujarat	308	-
Rajasthan	305	-
Uttar Pradesh	306	311
Madhya Pradesh	308	306
Disparity	45–48	46–51

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The phantom stealth fighter that exposes Europe’s deep divisions over defense

Duplicated efforts, fragmented industry and soured collaborations are among reasons region isn’t getting more bang for its defense buck

Alistair MacDonald, Cristina Gallardo, & Robbie Gramer | LONDON/BARCELONA/MUNICH

It was billed as the answer to high-tech U.S. stealth fighters. Instead, an ambitious pan-European project has become a case study into some of what has gone wrong with the region’s defense push.

The Future Combat Air System (FCAS) project, involving France, Germany, and Spain, was intended to develop a next-generation aircraft to compete with the latest U.S., Chinese, and Russian models. However, the venture has devolved into bickering between defense giants Airbus and Dassault Aviation—and between Berlin and Paris—over leadership of its development, leaving all sides questioning its future.

Less Than the Sum of Its Parts

This unraveling collaboration highlights a fundamental problem in European defense: while collective spending dwarfs Russia’s and has overtaken China’s, the whole is somewhat less than the sum of its parts. National interests often take priority, leading to industrial fragmentation, overlaps, incompatibilities, and high prices due to low economies of scale.

In 2022, collaborative procurement accounted for less than a fifth of the total spent on defense equipment in the European Union. Additionally, Europe lags significantly in research and development; R&D accounted for 16% of total military spending in the U.S. in 2023, compared to just 4.5% in Europe the previous year.

The FCAS Vision and Conflict

Conceived as a sixth-generation jet fighter, FCAS is meant to incorporate artificial intelligence and operate in connection with a swarm of drones, potentially surpassing the U.S. F-35.

The project took a wrong turn last year when Dassault Aviation’s CEO Eric Trappier argued that his firm must lead the development and select subcontractors, citing their superior record in developing combat aircraft. Airbus, whose defense business is heavily centered in Germany, has pushed back. German unions and politicians have grown impatient, with German Defense Minister Boris Pistorius stating that it “wouldn’t be the end of the world” if the project failed to proceed.

A Pattern of Friction

France, the world’s second-largest defense exporter, is frequently blamed for disrupting joint ventures. Recent examples include:

• Eurofighter: France dropped out of this earlier joint jet fighter project.
• KNDS Tank: Italy’s Leonardo abandoned a deal to make a tank with the Franco-German company KNDS after failing to receive a sufficient share of the project's development.
• Bromo Project: French opposition reportedly nixed an attempt to merge space activities involving Leonardo, Airbus, and OHB.

The Imperative for "Defragmentation"

Despite these tensions, analysts argue that Europe has little choice but to make joint projects work to effectively deter threats from Russia and step up as a pillar of NATO. While some collaborations, like the MBDA missile maker, are seen as successful models, the region still suffers from a lack of standardization. For instance, European nations have supplied Ukraine with 11 different types of howitzers all firing the same 155mm shell.

Some governments are shifting toward pooling development budgets while allowing national companies to produce the resulting weapons, such as the frigate co-designed by Italy’s Fincantieri and France’s Naval Group. As Fincantieri CEO Pierroberto Folgiero noted, the goal should be "defragmentation" to generate much-needed efficiency.

‘Mutual fund boom reflects a structural shift in savings’

MFs are evolving from niche investments into mainstream savings, set to rival bank deposits

Shipra Singh | Mumbai

Mutual funds are rapidly becoming the primary choice for Indian savers, evolving from what was once considered a sophisticated market product into a mainstream savings vehicle. At the Mint Money Festival held on February 14 in Mumbai, Madhu Nair, CEO of Union Mutual Fund, and Kailash Kulkarni, CEO of HSBC Mutual Fund, stated that the industry’s explosive growth represents a structural transformation in Indian savings behavior rather than mere short-term market enthusiasm.

Structural Shift

Nair highlighted the power of the mutual fund license to convert retail savings into market-linked returns within a transparent, diversified, and professionally managed framework. He noted that while the industry stood at just ₹1 lakh crore 25 years ago (compared to ₹12 lakh crore in bank deposits), it has now surged to ₹80 lakh crore, while bank deposits are approximately ₹250 lakh crore.

Nair’s estimates suggest that by 2035, both mutual fund assets and bank deposits could reach equilibrium at ₹400 lakh crore. He credited this rise to institutional transparency, competitive costs, favorable taxation, and diversification across market caps.

Asset Allocation Over "Best Fund"

Both experts emphasized that investors often focus on the wrong variables. While people spend significant energy trying to pick the “best fund,” this typically only alters outcomes by 5-10%. The real impact comes from asset allocation based on specific goals and risk tolerance.

Regarding the active versus passive debate, Nair noted that while beating the index is difficult in mature markets like the US or Japan, India still possesses information asymmetry and under-researched segments. He believes there is still room for alpha (outperforming the market) in India for the next 10 to 15 years.

Navigating Category Confusion

Industry complexity and the sheer number of categories can be intimidating for new investors. Many rely solely on past performance, but point-to-point returns only capture a specific moment and do not reflect consistency. Nair advised looking at rolling returns over 3-5 years to gauge how a fund performs across different market cycles. He also cautioned against relying on "star" fund managers, suggesting instead that investors look for institutions with a defined philosophy and process consistency.

Discipline vs. Timing

For salaried individuals, SIPs (Systematic Investment Plans) are recommended to enforce discipline and reduce the risk of entering the market at peaks. While a mix of SIP and lump sum can work for those with surplus funds, the core principle remains focusing on asset allocation and discipline rather than short-term performance tables.

A Maturing Investor Base

A significant sign of change is how investors now react to volatility. In previous cycles, market corrections often triggered panic redemptions; today, market falls frequently see higher transaction volumes as investors view a 1.5-2% dip as an opportunity.

Kulkarni warned that a common mistake is starting SIPs during bull markets but stopping them during downturns. He noted that corrections are actually the best time to accumulate more units at lower prices to improve long-term outcomes. Wealth in equities comes from staying invested across cycles rather than perfect timing.

The Retail Roadmap

To succeed, retail investors should:

• Align investments with clear goals and risk tolerance.
• Stay disciplined during volatility, particularly by maintaining SIPs.
• Evaluate funds based on process and consistency rather than one-year returns.
• Understand the distinctions in what they own, such as whether a fund is concentrated or diversified, or follows a buy-and-hold versus high-turnover strategy.

Resist social sector temptations: Learn how to laugh at yourself

Money, power and sainthood may beckon but those who do not fall for them have common traits

Anurag Behar

I met a few friends after a long while who also work in the social sector, and they remembered a series of columns I had written about donors and social-sector leaders with amusement. While my critiques of donor methods were met with widespread praise, the columns describing the three seductions faced by leaders—money, power, and sainthood—generated sharply divided reactions. My friends and I began discussing the common characteristics of individuals who manage to resist these seductions, agreeing on three primary traits.

Three Key Characteristics

The first characteristic is a clear idea of the role they play in society, distinguishing their chosen purpose as researchers or organizers from roles like politicians or policymakers. This clarity includes an understanding of what they are not, which is as vital as knowing what they are.

The second trait is simplicity, referring not just to a lifestyle but to a consistent habit of mind. This involves the ability to communicate complex matters in relatable terms and engaging with others in a direct, straightforward manner without "dumbing down" the content.

The third is that they don’t take themselves too seriously. While conscious that their work and purpose are serious, they are able to laugh at themselves, see their own limitations clearly, and acknowledge mistakes with a sense of lightness.

The Role of Circumstance

Underlying these traits is a deep awareness of the role of circumstances. These individuals appreciate that they are where they are because of the specific people, events, and moments in time they grew up in, rather than being the sole authors of their destiny. This understanding of the world as a somewhat random place helps keep hubris at bay.

A Method for Sanity

When asked if there is a specific formula for developing these sensibilities, I suggest that one should work closely with people who can laugh at you and pull your leg. Invaluable colleagues are those who take your role and competence seriously but can make fun of you without malice, reminding you that while your work may be special, you are not.

Laughter at oneself is an underrated tool for effectiveness and sanity in a sector filled with deep problems and serious work. Ultimately, the test is whether you can find genuine amusement in your own foibles and pretensions; if you cannot, it may be time to find people who will help you learn how.

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The writer is CEO of Azim Premji Foundation.

The puzzle of cash and UPI both touching record highs

SOUMYA KANTI GHOSH & TAPAS PARIDA

India’s currency in circulation (CiC) climbed to record-high levels in late 2025 and early 2026, reaching ₹40 trillion in January. So far in the 2025-26 fiscal year, CiC has increased by ₹2.76 trillion, which is 3.1 times the rise seen in the same period the previous year. Intriguingly, even as cash usage has jumped, India continues to log record levels of Unified Payments Interface (UPI) transactions. In January, the value of these stood at ₹28 trillion, representing 70% of CiC.

Simultaneously, the cash-to-GDP ratio has declined in recent years to 11.2% in 2025-26 from 14.4% in the pandemic year 2020-21. This shows that even as economic activity has been expanding at a rapid pace, currency is growing at a different rate than the broader economy.

Four Reasons for the Puzzle

The authors identify at least four reasons explaining why high CiC is co-existing with high UPI usage:

1. GST Signaling Impact: In July, the Karnataka Commercial Taxes Department issued around 18,000 GST notices to small traders and vendors for UPI transactions exceeding the ₹40 lakh registration threshold. This likely acted as a disincentive for UPI use, pushing small traders "into the shadows of cash". Statistical testing suggests these notices created a perverse signalling impact in other states like West Bengal and Kerala, where ATM-withdrawal data also showed an uptrend.
2. Rural Motivation and Sluggish Deposits: The motivation to hold cash has grown, particularly in rural areas, due to low interest rates on bank deposits paired with increased consumption. This shift is reflected in the sluggish growth of deposits for the banking system.
3. Recycling of Precious Metals: Rising prices for gold and silver may have encouraged households to recycle their holdings. Some households have used the surge in prices to encash metal holdings, leading to a rise in cash usage across the economy.
4. Withdrawal of ₹2,000 Notes: Following the withdrawal of the ₹2,000 currency note, the value share of ₹100 and ₹200 notes increased significantly. Because smaller notes display greater velocity in their circulation, this shift has boosted CiC. Notably, while UPI is used for 86% of person-to-merchant transactions under ₹500, the substitution of low-denomination notes with UPI is unlikely to happen beyond a certain point.

Two Key Learnings

From this increase in currency with the public, two main conclusions emerge:

• Don't Hinder Innovation: UPI is a global showpiece that has leapfrogged other digital banking transactions and significantly enhanced the ease of living; policymakers should not raise hurdles for it.
• Evidence of Formalization: Despite the rise in gold and silver imports, the decline in currency as a proportion of deposits indicates increased formalization and a steady move towards a digital economy.

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Soumya Kanti Ghosh is a member of the 16th Finance Commission and PMEAC, and group chief economic advisor at SBI. Tapas Parida is an economist and assistant general manager at SBI.