Introduction
Today's legal and governance highlights center on a fundamental shift in India's statutory accounting standards, moving from GDP to NDP, which has significant implications for fiscal policy laws. Additionally, the analysis covers NITI Aayog's policy roadmap for the internationalization of higher education, which requires amendments to UGC regulations, and the successful trial of the Akash-NG missile, strengthening India's defense procurement framework.
1. Statutory Reforms: Economic Measurement & SNA 2025
The Ministry of Statistics and Programme Implementation (MoSPI) announced a plan to shift India's primary measure of economic activity from Gross Domestic Product (GDP) to Net Domestic Product (NDP).
A. The Legal/Statutory Shift
System of National Accounts (SNA) 2025: India is aligning its statistical framework with the UN's System of National Accounts (SNA) 2025. This is the internationally agreed standard set of recommendations on how to compile measures of economic activity.
Why NDP?
Depreciation: Unlike GDP, NDP accounts for the "wear and tear" (depreciation) of capital assets.
Natural Capital: Under SNA 2025, the depletion of natural resources (minerals, coal) is treated as a "production cost," while renewables are assets. This legally integrates environmental sustainability into national accounts.
RBI's Status: A significant statutory change under SNA 2025 is reclassifying the Reserve Bank of India's (RBI) output as "non-market activity," and treating regulatory payments by banks as "transfers" rather than service fees.
B. Constitutional Impact
Article 112: The shift to NDP and the inclusion of "Natural Capital Accounting" will impact the Annual Financial Statement (Budget), as fiscal deficit targets under the FRBM Act might need recalibration based on "Net" rather than "Gross" figures.
2. Education Law & Policy: Internationalisation of Higher Education
NITI Aayog has released a roadmap for the internationalization of higher education to align with the National Education Policy (NEP) 2020.
A. Regulatory Hurdles & Reforms
UGC Regulations: Current regulations under the University Grants Commission (UGC) Act, 1956 restrict foreign universities. The roadmap calls for statutory reforms to allow:
Twinning Programs: Joint degrees between Indian and foreign universities.
Visa Reforms: Streamlining student visas to correct the 1:28 inbound-outbound student ratio.
Foreign Education Providers Bill: The report reignites the need for a specific legislative framework to allow top global universities to set up campuses in India (as seen in GIFT City).
3. Defense Law: Akash-NG Missile & Acceptance of Necessity
The DRDO successfully completed "User Evaluation Trials" (UET) of the Akash-NG missile.
A. Procurement Procedure
Acceptance of Necessity (AoN): The successful trial leads to the issuance of an AoN by the user (Indian Air Force). This is the first formal step in the defense procurement process under the Defence Acquisition Procedure (DAP) 2020.
Indigenization: The project (96% indigenous) aligns with the "Make in India" provisions of the DAP, granting it priority in procurement.
Key Legal Takeaways
Statutory Framework: System of National Accounts (SNA) 2025 (UN Standard adopted by MoSPI).
Key Economic Shift: Transition from GDP to NDP (deducting depreciation and natural resource depletion).
Policy: National Education Policy (NEP) 2020 (Basis for internationalization of education).
Defense Procedure: Acceptance of Necessity (AoN) under DAP 2020 (Crucial step for missile induction).
RBI Classification: RBI output to be "Non-Market Activity" under new SNA rules.
Frequently Asked Questions (FAQs)
Q1: What is the primary difference between GDP and NDP?
Answer: Net Domestic Product (NDP) = Gross Domestic Product (GDP) - Depreciation. NDP accounts for the wear and tear of capital assets and, under the new SNA 2025 framework, effectively accounts for the depletion of natural resources, providing a more sustainable measure of growth.
Q2: Is the System of National Accounts (SNA) a binding treaty?
Answer: No, the SNA is an internationally agreed standard set of recommendations on how to compile measures of economic activity, adopted by the United Nations Statistical Commission. It serves as a guiding framework for countries to ensure comparability.
Q3: Which body issues the 'Acceptance of Necessity' (AoN) for defense procurement?
Answer: The Defence Acquisition Council (DAC), headed by the Defence Minister, usually accords the AoN. In specific cases involving lower amounts, it can be done by service boards, but for major systems like missiles, the DAC is key.
Q4: Under which Act is the University Grants Commission (UGC) established?
Answer: The University Grants Commission Act, 1956.
Q5: What is the significance of reclassifying RBI's output as "non-market activity"?
Answer: It changes how the central bank's contribution to the economy is calculated. Instead of being seen as a market service provider charging fees, it is viewed as a public institution providing non-market services, with payments treated as transfers. This aligns with global best practices.