Happiness Is a Policy Choice, and India Is Still Writing the Manual

Dear Insighter,

I remember standing on the sprawling campus of Thimphu’s university, a former communications department experiment that had slowly transformed extra cottages into a doorway for tourists. The valley cradled us in cold drizzle and mountain wind, yet everyone moved at a pace that felt almost defiant in its calmness. They wore layers of silk and wool, and they smiled. Not the transactional smile of a city barista, but something softer, slower, more settled. One taxi driver-cum-guide, when we asked about his life, said “sustainability” as casually as if he had said business. A store owner told us she farmed. A man lining up a snooker shot in a smoky underground club said he guided treks during peak season and farmed the rest of the year. Sustainability there didn’t feel like a bumper sticker; it felt like a way of life.

The border crossing itself had already delivered the first shock. We walked from Jaigaon into Phuentsholing, and within metres — not kilometres, mind you — the streets turned spotless, the sky seemed to widen, and you could breathe without tasting dust. Bhutan, a country with barely 800,000 people, had chosen a different metric of progress: not the roar of consumption but a deliberate, almost stubborn contentment. And yet, the place was hardly utopian. There were old trucks coughing fumes, guides candid about high living costs, a gap between rich and poor that the mountain scenery does nothing to conceal, and snooker halls full of young men making peace with limited economic opportunity. Happiness, I realised, was not the absence of hardship. It was the presence of a rhythm that did not break every time the world sped up.

That contrast lingered while reading this week’s stories because India increasingly feels like a country running faster without always knowing whether the ground beneath it is steady.

Start with the rupee. Yield Scribe argues that India is still selling the same demographic-dividend story it began marketing in 1991, while the world has moved on to leverage. America built dominance around AI, China around manufacturing and energy security, the Gulf around trade corridors and strategic geography. India built consumption. That worked when capital was abundant and the world forgiving. But external shocks now arrive in clusters, and our dependence on imported oil and gold keeps exposing structural fragilities.

V Thiagarajan sharpens the point further: the rupee’s weakness is no longer merely cyclical; it is becoming institutional. As the RBI increasingly resembles a fiscal backstop through large dividend transfers, investors begin questioning the sanctity of the line between monetary and fiscal policy. Credibility, once chipped away, is painfully expensive to restore.

R. Gurumurthy notes that while the RBI has become adept at controlling overnight rates, India’s broader term-money markets remain fragmented and shallow. Monetary transmission works beautifully at one end of the curve while uncertainty echoes through the rest of it. Gaura Sen Gupta points out that the RBI’s record ₹2.9 trillion dividend to the government will temporarily lubricate liquidity conditions, but currency leakage and dollar interventions mean durable OMO purchases are likely to return soon enough. The dividend is relief, not repair.

Srinath Sridharan, meanwhile, mounts a defence of the central bank itself. Modern central banking, he argues, is no longer textbook economics but geopolitical statecraft conducted amid oil shocks, sanctions, climate disruptions and volatile capital flows. Judging policymakers from hindsight’s armchair is easier than managing a currency in real time. In another piece, Thiagarajan observes that the US two-year Treasury yield has risen sharply this year, and markets increasingly believe the Fed’s next move could be a hike rather than a cut. In that environment, the RBI’s room for comfortable gradualism shrinks rapidly.

Which is precisely why BasisPoint Groupthink’s observation on Bank Indonesia matters. Jakarta surprised markets with a 50-basis-point rate hike, prioritising rupiah credibility over growth comfort. Indonesia looked at volatile flows, imported inflation risks and weakening currency expectations and concluded that waiting would eventually cost more. India still has deeper reserves and stronger institutional buffers, but the signal from Indonesia is hard to ignore.

Energy, inevitably, sits underneath much of this anxiety. Kalyan Ram questions whether the RBI can afford to “look through” the latest oil shock using the same pandemic-era framework. The pandemic was synchronised global weakness; today’s disruptions are geopolitical and asymmetric. Oil shocks now carry freight spikes, Hormuz chokepoints and inflationary aftershocks that do not dissipate neatly. Sujit Kumar’s piece reinforces the vulnerability. India has expanded its natural gas pipeline network dramatically and domestic PNG access has surged, yet over 90% of LPG imports still pass through the Strait of Hormuz. One geopolitical escalation, and the price of everything from transport to household cooking begins to twitch.

Abhishek Dey argues that the financialisation of gold through ETFs and Sovereign Gold Bonds has changed the form of ownership faster than the underlying appetite itself. Yashveer Singh adds that SGB maturities may ironically fuel fresh physical gold purchases, keeping import demand sticky even as policymakers request restraint. India’s relationship with gold is not merely financial. It is emotional, cultural and deeply resistant to macroeconomic persuasion.

Arvind Mayaram shifts the discussion toward investor confidence, arguing that India’s 2015 Bilateral Investment Treaty framework overcorrected in favour of sovereign defensiveness. At precisely the moment India needs patient global capital for manufacturing, infrastructure and clean energy, the treaty architecture can appear more suspicious than welcoming.

That same trust deficit appears in renewable energy. Amitrajeet A. Batabyal explains the “holdup problem” in solar power: once a plant is built, developers lose bargaining leverage because state discoms know the infrastructure cannot simply walk away.

Corporate India, too, is discovering that narratives eventually need evidence. Dev Chandrasekhar’s analysis of the Big Six IT companies finds a meaningful gap between “AI-first” rhetoric and actual attributable revenues. Infosys and LTIMindtree appear relatively credible on disclosures, while others still lean heavily on frameworks and future promises.

In telecom, Krishnadevan V writes, Bharti Airtel’s ARPU softened while Vodafone Idea — long presumed irrelevant — is slowly clawing back viability after promoter funding and AGR relief. The easy oligopoly thesis no longer feels so easy. In automobiles, Hyundai India’s first listed year has left IPO investors nursing losses even as exports continue benefiting the Korean parent more visibly than local shareholders.

Elsewhere, Rahul Ghosh raises alarms about the rapidly expanding private credit market, now estimated globally between $1.3 trillion and $3 trillion. Operating largely outside conventional banking oversight, the market increasingly resembles a shadow-finance ecosystem whose opacity should make regulators nervous. The sub-prime crisis emerged from a market smaller than this one.

At the social end of the economy, Sharmila Kantha’s writes that the shift from a demand-driven legal guarantee of work to a fixed-budget allocation changes the philosophy of rural support itself. MGNREGA was messy, often inefficient and vulnerable to misuse, but it expanded precisely when distress intensified — during droughts, slowdowns and the pandemic. Replacing a rights-based safety net with a budget-constrained programme, particularly amid uneven rural conditions and weak monsoon forecasts, leaves very little room for implementation failure.

And then there is governance itself. Srinath Sridharan notes that IRDAI’s proposal to link insurance executive compensation to claims settlement and customer outcomes — rather than simply premium growth — signals an overdue recognition that financial systems are ultimately tested during distress, not expansion.

In those smoky snooker clubs in Thimphu, young men with uncertain futures quietly rebelled against a tobacco ban in a country otherwise built on collective discipline — and still carried a sense of ease that felt earned rather than performed. Bhutan’s happiness was never about perfection. It was about a society where people felt held together by functioning systems, social trust and a rhythm larger than quarterly growth numbers.

India, in its own way, is attempting something vastly more ambitious: a $7-trillion economy, net-zero commitments, Viksit Bharat by 2047. The ambition is not the problem. The question is whether the pipes are being laid, the credibility is being protected, and the millions at the edge of the growth story are being carried along.

The double rainbow I saw over that Bhutanese valley felt almost implausible in its sharpness. But there it was — stretching fully across the mountains in a country that is 70% forest, made brighter by the clean air beneath it.

Until next time, hoping the foundations grow as fast as the ambition.

Also Read:

• Is India’s Teacher Knowledge Gap Quietly Undermining Learning? by Amitrajeet A. Batabyal: New research from Odisha finds weak teacher subject knowledge, especially in English, may be quietly limiting classroom effectiveness across India.
• A Leaked Cable that Tells a Post-Colonial Story by Rajesh Ramachandran: A leaked cable reveals the US as India’s greatest strategic challenge, arguing for a BRICS currency and an Eastern corridor at the Modi-Putin-Xi summit.
• Why Doesn’t Today’s India Have a Truly Global Icon? by Kirti Tarang Pande: A dinner game in Lisbon shows Gandhi remains India’s only globally recognised icon, while modern India lacks the narrative power to lodge itself in collective memory.
• The Past Rarely Leaves Quietly by Kalyani Srinath: A reflective essay on how old relationships and memories slip unbidden into present encounters, and the quiet work of letting their weight rest.
• A Cold Shower for the AI Mania by Raghuram Rajan: Rajan warns that AI euphoria may be unfounded, and not every debt-fuelled provider will survive the coming shakeout.