Current Affairs - Economy

India’s eight core industries recorded a growth rate of 4% in January 2026, reflecting a moderation compared to the revised 4.7% growth in December 2025. The Index of Core Industries, which tracks coal, crude oil, natural gas, refinery products, fertilisers, steel, cement, and electricity, serves as a key indicator of industrial momentum. While sectors like steel and cement continued to show strong performance due to sustained infrastructure and construction activities, others experienced slower growth or contraction. Despite the slowdown in core sectors, overall industrial production remained strong during the period.

The Reserve Bank of India has mandated that a Unique Transaction Identifier (UTI) must be used for all over-the-counter (OTC) derivatives transactions beginning January 1, 2027. This requirement applies to rupee interest rate derivatives, foreign currency derivatives, credit derivatives, and certain government securities contracts. The UTI, a globally recognised tracking code, will uniquely identify each transaction, reduce duplication in reporting, and improve transparency. By introducing this mandate, the RBI aims to strengthen regulatory oversight, enhance systemic risk monitoring, improve data accuracy, and align India’s OTC derivatives reporting framework with global financial market standards.

The latest survey conducted by the Department of Financial Services highlights that 57% of respondents prefer UPI as their primary payment method, making it the most favoured transaction mode in India. This surpasses cash, which stands at 38%. The widespread adoption is driven by instant fund transfers, ease of use, and attractive cashback incentives. A significant portion of users, particularly those aged 18–25, perform multiple digital transactions daily. Additionally, 94% of small merchants now accept UPI, reflecting its deep penetration and the success of government-backed digital payment initiatives.

India’s WPI inflation rose to 1.81% in January 2026, reaching a 10-month high and registering the third consecutive monthly increase. The rise was primarily driven by higher prices of food articles, non-food items, and manufactured products such as basic metals and textiles. Food inflation turned positive, and manufacturing inflation strengthened, indicating increasing producer-level price pressures. However, fuel and power remained in deflation, which helped moderate the overall surge. While WPI reflects wholesale-level price changes, the Reserve Bank of India mainly targets CPI inflation for monetary policy decisions, making this divergence significant for economic analysis.

The RBI Digital Payments Index for September 2025 stood at 516.76, indicating significant growth in digital payment adoption across India. This increase from the previous value of 493.22 in March 2025 reflects improvements in key parameters such as Payment Performance and Payment Enablers. The index measures the extent of digitisation in the country and includes factors like infrastructure, transaction volume, and consumer centricity. A higher index value signifies deeper penetration of digital payment systems, showcasing India’s steady progress toward a less-cash and more transparent economy supported by robust digital infrastructure.