Khalistan: The Ghost That Refuses to Stay Buried

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Every few years, Punjab finds itself staring at a familiar headline: “Khalistani terror is back.” It is a phrase that carries the weight of history, trauma, and political urgency. It also carries a tendency toward exaggeration. The truth, as always, sits somewhere between complacency and alarmism.

What we are witnessing in 2026 is not a resurrection of the past, but neither is it a harmless echo. It is something more subtle, more fragmented, and in some ways, more difficult to fully grasp.

From Insurgency to Intermittent Disturbance

To understand the present, one must resist the temptation to lazily compare it with the Punjab of the 1980s and early 1990s. That period was marked by a full-blown insurgency—organised militant groups, ideological indoctrination, territorial influence, and a climate of widespread fear. Violence was systemic, not sporadic.

Today’s situation looks very different.

There is no parallel authority challenging the state. There are no large militant camps recruiting openly. There is no widespread breakdown of governance. What exists instead are isolated but coordinated incidents—small explosions, targeted plots, and modules that seem to emerge and disappear before they can fully mature.

This is not insurgency. It is something far more restrained, yet persistently unsettling.

The Rise of the “Hybrid Threat”

Security agencies increasingly describe the current pattern as a form of “hybrid terror.” It is a model designed not to overthrow the state, but to keep it on edge.

In this structure, the lines between crime and ideology blur. Local gangsters, once driven purely by profit, are now occasionally found acting as logistical arms for extremist handlers. Weapons, funding, and operational guidance often originate from outside the country, while execution happens through small, loosely connected local units.

The result is a network that is decentralised, deniable, and difficult to trace in a straight line.

Unlike the past, where leadership structures were identifiable, today’s ecosystem thrives on ambiguity. It is less about commanding an army and more about activating cells.

External Influence, Internal Vulnerability

One cannot ignore the role of cross-border dynamics in this pattern. Attempts to revive militancy in Punjab are not purely organic; they are, to a significant extent, externally stimulated. Over the years, Indian security agencies have repeatedly pointed to the involvement of Pakistan’s Inter-Services Intelligence in providing logistical support, training, funding, and safe havens to Khalistani elements operating from across the border.

Foreign-based handlers, often operating from safe distances, use digital platforms, encrypted messaging applications, and diaspora networks to sustain a steady flow of propaganda and coordination. The aim is not necessarily to trigger an immediate large-scale uprising, but to keep the idea alive, nurture small modules, and create periodic disruptions that signal continued relevance. Intelligence inputs have also, at times, named specific Khalistani figures believed to be operating under protection in Pakistan.

There are, in addition, periodic suspicions and allegations in public discourse about the role of Western intelligence environments—particularly in countries like Canada and the United Kingdom—where sections of the diaspora remain politically active on the Khalistan issue. The Khalistani activists like Gurpatwant Singh Pannun have been active in the United States, Canada and Australia without any hinderance. While these claims are often contested and diplomatically sensitive, they contribute to the perception of an international dimension to the problem.

At the same time, internal vulnerabilities make this strategy more viable. Punjab’s ongoing challenges—drug abuse, pockets of unemployment, and a well-entrenched organised crime network—create a pool of individuals susceptible to recruitment. This is rarely driven by deep ideological conviction; more often, it is opportunistic.

This is not mass radicalisation. It is selective, calculated exploitation of weakness.

The Myth of Mass Support

Perhaps the most important question is this: does Khalistani militancy today enjoy widespread support within Punjab?

The evidence suggests otherwise.

Punjab in 2026 is a society that has moved on in many ways. It is economically aspirational, globally connected, and deeply aware of the costs of past violence. The collective memory of that turbulent era still acts as a powerful deterrent.

There may be moments of emotional or symbolic mobilisation, especially around specific figures or incidents, but these do not translate into sustained, large-scale militant participation. The average Punjabi today is far more invested in stability than in separatist upheaval.

This does not mean the idea has disappeared. It means the idea has limited traction on the ground.

Why Small Incidents Create Big Anxiety

If the threat is limited, why does it generate such intense concern?

The answer lies in the nature of modern security challenges. Even a minor explosion or a foiled plot can have an outsized psychological impact. It revives memories, triggers political reactions, and amplifies media narratives.

In a state with Punjab’s history, symbolism matters as much as scale. A single incident can feel like the beginning of a larger pattern, even when it is not.

This is precisely what makes the Khalistanis’ and their mentors’ current strategy effective. It is not designed to win a war. It is designed to create the perception that a war could return.

Politics, Perception, and the Narrative Battle

No discussion on this issue is complete without acknowledging the role of politics. Security concerns in Punjab often intersect with political narratives, sometimes reinforcing genuine risks, and at other times magnifying them. Elections, coalition rivalries, and the need to control public perception frequently shape how the issue is presented to citizens.

Different stakeholders frame the situation in different ways—some emphasise the severity of the threat to justify strong action, including tougher policing, surveillance, and central intervention, while others downplay it to prevent panic, protect Punjab’s economic image, or avoid political fallout. In this tug-of-war, the truth risks being stretched in both directions, especially in an era of social media amplification and selective leaks.

The danger lies in allowing narrative to overtake nuance. Overstating the threat can create unnecessary fear, stigmatise communities, and even alienate sections of the Sikh diaspora. Understating it, however, can lead to complacency and give space to covert networks to grow.

What is required is a calibrated understanding, not a slogan. It is also worth noting that political parties often weaponise the Khalistan issue to score points. The Bharatiya Janata Party has, at various times, accused rivals like the Aam Aadmi Party, Shiromani Akali Dal, and Indian National Congress of either being soft on or indirectly encouraging separatist elements, reflecting how national security concerns often become instruments in domestic political contestation.

So, Is Khalistani Terrorism Back?

The most honest answer resists simplicity.

Khalistani terrorism is not back in the form it once existed. There is no large-scale insurgency, no mass uprising, and no widespread militant infrastructure.

However, it is equally true that the threat has not vanished. It has adapted. It operates at a lower intensity, through fragmented networks, external support, and opportunistic local linkages.

It is present, but contained. Active, but not dominant. Concerning, but not catastrophic.

The Road Ahead: Vigilance Without Panic

Punjab today stands in a position of relative stability, but not absolute immunity. The current phase demands alertness without hysteria.

Security agencies appear to be responding proactively—tracking modules, intercepting plots, and tightening surveillance around sensitive areas. This approach is crucial in dealing with a threat that thrives on slipping through small gaps rather than launching large offensives.

At the same time, long-term stability will depend on addressing deeper structural issues—economic opportunities, social cohesion, and the weakening of criminal networks that can be co-opted for larger agendas.

Conclusion: A Fire That Flickers, Not One That Rages

Khalistani militancy in 2026 is best understood not as a raging fire, but as a flicker that refuses to die out completely. It does not engulf the state, but it does not disappear either.

And perhaps that is the real challenge.

Because a raging fire demands immediate action. A flicker demands constant attention.

Ignore it, and it may grow. Overreact to it, and you risk feeding it.

Punjab today walks that delicate line—between memory and modernity, between vigilance and overreaction. Whether it continues to hold that balance will determine whether this remains a flicker… or becomes something far more dangerous once again.

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The 2026 State Assembly Elections: Nuanced Mandates in an Era of Fluid Politics and Conditional Accountability

 

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The assembly elections in Assam, Kerala, Tamil Nadu, West Bengal, and Puducherry have produced outcomes that, at first glance, appear to validate familiar political narratives—public fatigue with nepotism in Tamil Nadu, corruption and governance drift in Kerala and West Bengal, and the consolidation of power by entrenched political forces. However, a closer and more rigorous examination reveals a far more complex and layered reality. These results are not reducible to a singular national mood or ideological wave. Instead, they emerge from a dense interplay of anti-incumbency, leadership perception, demographic shifts, welfare politics, economic aspirations, and organisational strength. What we are witnessing is not a uniform rejection of “dynasty, corruption, and nepotism,” but a series of context-specific mandates that reaffirm the deeply federal and heterogeneous nature of Indian democracy.

Tamil Nadu: Beyond Nepotism – The TVK Disruption and Dravidian Fatigue, Tempered by Formidable Challenges

In Tamil Nadu, the emergence of Vijay’s Tamizhaga Vettri Kazhagam (TVK) as the single largest party marks one of the most dramatic political disruptions in recent decades. TVK has effectively challenged the long-standing duopoly of the DMK and AIADMK. While public frustration with the dynastic politics associated with the Stalin-led DMK provided fertile ground, the scale of TVK’s success cannot be explained by anti-nepotism sentiment alone. It reflects a deeper fatigue with entrenched political structures and a growing appetite for alternatives, particularly among younger voters. High voter turnout, touching nearly 85 percent, underscores this surge in electoral participation and the desire for change.

Yet, this breakthrough comes with significant caveats. TVK remains organisationally thin compared to the seasoned Dravidian parties, relying heavily on Vijay’s personal charisma and a network of fan clubs rather than a deeply institutionalised cadre base. The transition from a personality-driven movement to a governing entity presents formidable challenges. Administrative experience is limited, candidate quality varies, and the absence of a clearly articulated ideological framework beyond anti-incumbency raises questions about long-term coherence. Governing a complex state like Tamil Nadu will demand not just popular appeal but policy clarity, bureaucratic navigation, and fiscal discipline. If successful, TVK could redefine southern politics; if not, it risks rapid disillusionment—a pattern not unfamiliar in outsider-led political experiments.

Kerala: Alternation as Norm, Not Pure Anti-Corruption Rebuke

Kerala, by contrast, has delivered a result that aligns more closely with its historical pattern of alternating governments rather than representing a sweeping moral indictment of the incumbent. The Congress-led United Democratic Front (UDF) has returned to power after a decade, unseating the Left Democratic Front led by Pinarayi Vijayan. While opposition narratives emphasised corruption and administrative stagnation, the verdict appears rooted in governance fatigue rather than systemic rejection. Kerala’s high levels of literacy and political awareness ensure that governments are held to exacting standards, and even incremental shortcomings in employment generation, fiscal management, and service delivery accumulate over time. Despite maintaining strong welfare indicators, the LDF could not fully counter concerns over economic stagnation and migration pressures. The result reaffirms Kerala’s preference for centrist alternation, where power shifts act as a corrective mechanism rather than a revolutionary rupture.

West Bengal: Dramatic Realignment Against TMC Entrenchment

West Bengal presents the most decisive shift among the five states, with the Bharatiya Janata Party ending the 15-year rule of Mamata Banerjee. Its victory is the culmination of sustained organisational expansion, strategic defections, and effective narrative-building. Allegations of corruption, the persistence of “syndicate raj,” and concerns over law and order contributed significantly to anti-incumbency sentiment. However, reducing the outcome to a simple rejection of corruption would be reductive. The BJP’s success also reflects its ability to consolidate fragmented opposition votes, mobilise cultural identity narratives, and present itself as a credible alternative. At the same time, the polarisation evident in the state highlights deep social and political cleavages that the incoming government will need to navigate carefully. Governance in Bengal will require balancing development priorities with sensitivity to regional identity and political diversity.

Assam: Performance Continuity Over Anti-Dynasty Rhetoric

Assam has emerged as a clear exception to the anti-incumbency trend seen in several states. The BJP-led NDA has secured a strong third consecutive term, comfortably crossing the majority mark. Rather than seeking change, voters appear to have endorsed continuity, largely due to visible governance outcomes across sectors.

Infrastructure development has been a key driver of this support. Expansion of roads, railways, airports, and waterways has strengthened Assam’s position as a gateway to the Northeast. At the same time, major investments such as the Tata semiconductor project have signalled economic momentum and future job opportunities. Improvements in law and order, along with sustained anti-insurgency efforts, have helped ease long-standing militancy concerns. Welfare initiatives like Orunodoi, support for tea garden workers, and youth-focused schemes have further broadened the government’s appeal, especially among women and rural communities.

Issues of border management and illegal infiltration also played a decisive role. The government’s focus on protecting indigenous identity—captured in the phrase jati, mati, bheti—resonated deeply with voters concerned about demographic change and land rights. While critics have raised concerns about polarisation, these measures found significant acceptance among large sections of the electorate. High voter turnout reflected active engagement rather than dissatisfaction.

Overall, Assam’s verdict highlights that electoral outcomes in India are deeply shaped by local realities. When governance aligns with regional priorities—development, security, and identity—incumbency can become an advantage. However, sustaining this mandate will require balancing growth with inclusivity to avoid deepening social divides.

Puducherry Votes for Stability

In Puducherry’s 30-seat Legislative Assembly elections, the ruling AINRC-led NDA alliance has secured a comfortable victory. The BJP contributed key wins, allowing the NDA to retain power for a second consecutive term.

Record voter turnout of 89.87% reflected high engagement. Voters largely rewarded the incumbent government for continuity in governance, welfare schemes, infrastructure push, and relative stability in the Union Territory. Chief Minister Rangasamy’s personal popularity and pragmatic local alliances proved decisive, outweighing anti-incumbency narratives seen elsewhere. Issues like employment, tourism revival, and development in rural pockets resonated more than national ideological battles.

This result reinforces Puducherry’s preference for stable, development-oriented local leadership over disruptive change. It bolsters the BJP’s footprint in southern India without full dominance and highlights the NDA’s resilience in smaller Union Territories. For national politics, it signals that pragmatic incumbency can triumph where governance delivery aligns with local aspirations, even amid broader regional shifts. Challenges remain in addressing fiscal dependencies on the Centre and equitable growth across Puducherry, Karaikal, Mahe, and Yanam regions. 

Conclusion: Structural Shift

The 2026 state election results are best understood as the outcome of multiple, overlapping factors rather than a single sweeping trend. Anti-incumbency continues to matter, but its impact varies depending on local governance, leadership, and voter priorities. While issues like corruption, nepotism, and dynasty still shape public opinion, they now operate alongside deeper forces such as economic aspirations, demographic shifts, and organisational strength. High voter turnout across states suggests that the electorate is engaged and making nuanced, state-specific choices rather than expressing a uniform national mood.

A striking feature of these elections is the growing personalisation of politics. Leadership has become central to electoral narratives, with figures like Mamata Banerjee and Himanta Biswa Sarma exemplifying this trend. Voters are increasingly responding to the credibility, decisiveness, and relatability of individual leaders, sometimes more than to party ideology. This shift toward leader-centric politics brings clarity to electoral contests but also increases volatility, as public approval becomes closely tied to the perceived performance of a single individual.

At the same time, welfare politics appears to be reaching a point of saturation. In states with long histories of expansive welfare programs, voters are no longer satisfied with subsidies alone. Instead, there is a growing demand for economic growth, job creation, and infrastructure development. This shift is being driven in large part by younger voters, who are more aspirational and less bound by ideological loyalties. Employment opportunities, entrepreneurship, and global competitiveness are becoming key factors in shaping electoral outcomes, suggesting that future political success will depend on balancing welfare with credible economic advancement.

Digital campaigning has also emerged as a decisive force. Political communication is increasingly shaped by social media, influencer networks, and direct voter engagement that bypasses traditional media. Parties that have performed well have demonstrated strong control over messaging in these digital spaces, influencing public perception in real time. However, this transformation raises concerns about misinformation, echo chambers, and the decline of substantive policy debates, as elections are now fought as much online as on the ground.

Another recurring theme is the fragmentation of the opposition. In several states, the inability of opposition parties to unite has allowed dominant players to convert divided vote shares into decisive victories. This dynamic points to the emergence of an asymmetrical multi-party system, where one dominant force faces a fragmented and often ineffective opposition. Without stronger coordination and clearer messaging, opposition parties risk continued marginalisation.

The results also reflect evolving tensions within India’s federal structure. The expansion of the BJP into eastern regions and its consolidation in states like Assam signal growing central influence, while outcomes in states such as Tamil Nadu highlight the enduring strength of regional identity politics. This interplay suggests that Indian federalism is entering a new phase, where questions of autonomy, resource distribution, and cultural identity will become increasingly important.

Perhaps the most significant takeaway is the shortening patience of voters. Electoral mandates are becoming more conditional, with governments expected to deliver tangible results quickly. Delays or underperformance can rapidly erode support, creating a more demanding political environment.

Looking ahead, these trends carry important implications. The BJP’s expanding footprint increases both its opportunities and responsibilities, while new political entrants and shifting alliances could reshape electoral dynamics. Ultimately, the 2026 elections reveal an electorate that is pragmatic, fluid, and increasingly focused on performance. Voters are willing to reward results, experiment with alternatives, and hold governments accountable—signalling a more mature and responsive democratic landscape.

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A Shock to the System: Is the Punjab Rajya Sabha MPs’ Defection a Preparation for 2027 Elections?

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The defection of seven Rajya Sabha Members of Parliament from the Aam Aadmi Party (AAP) to the Bharatiya Janata Party (BJP) signifies more than just a typical instance of political opportunism. It indicates a deeper shift in India’s changing party system, where ideological beliefs often clash with electoral practicality. AAP’s foundational narrative of clean politics and internal democracy is challenged by these defections. This development benefits the BJP both symbolically and structurally, especially in Punjab where their influence has been limited.

The initial impression is that the BJP has gained and the AAP has lost. Still, changes in the political landscape of this sort usually bring about consequences that have depth. Beyond altering perceptions and organisational dynamics, they commonly initiate chain reactions that shape future politics.

BJP’s Tactical Success: Perception, Figures, and Account

The immediate benefit of the defections for the BJP is strengthening its presence in the Rajya Sabha. Parliamentary calculations are significant, especially in a time when legislative changes frequently meet resistance from the Opposition. Increasing its numbers increases the BJP’s legislative power, it still remains ineffective in seeing the bills through.

Thus, the actual benefit might stem from psychological and narrative factors. The BJP can now portray the AAP as volatile and fractured, a party incapable of keeping its senior leaders. This narrative is especially useful in Punjab, as perception frequently drives political momentum. By highlighting major defections, the BJP signals to voters and political players that AAP’s model might not be as stable as it suggests.

The BJP seems to be adjusting its long-term strategy in Punjab. Regional parties like the Shiromani Akali Dal have been its partners so far. This has not significantly helped its goals of creating an independent stronghold in the state. Clearly, the BJP plans to utilise these defections to form a strong leadership group in Punjab. However, the credibility of these defectors remains uncertain.

Engineering such defections carry their own risks. There is every possibility that the bringing in of these politicians might upset those BJP leaders who have been with the party right from the beginning. Historically, mass defections have frequently caused internal conflict within Indian political parties. Careful management is imperative if the BJP wants to avoid serious division within its ranks in Punjab due to the arrival of AAP leaders.

Internal Issues, Image, and Identity in the AAP’s Crisis

The AAP is in a complex crisis because of these defections. Its reputation has taken a hit. A party that championed ethical politics is now confronting claims of internal conflict and discontent among its leaders. The optics are especially damaging because the defectors included prominent figures associated with the party’s national expansion. At least one of them had been with the party since it was founded.

The crisis also raises questions regarding the AAP’s internal structure. Contrasting with traditional parties that have set hierarchies, AAP developed as an organisation fuelled by a movement. Over time, it has consolidated decision-making, placing significant power with the AAP Supremo and a select group of leaders. The defections suggest the model may be fostering discontent among senior leaders who feel overlooked. Earlier too, many prominent persons had left the Aam Aadmi Party out of frustration with the top leadership. For example, Yogendra Yadav and Ashutosh were once prominent faces of the party. They parted ways after realising that the communication is only one-way.

Also, AAP’s response of labelling defectors as traitors and aiming for  their disqualification may satisfy its core followers but does not address the core concerns. Moral appeals alone seldom maintain political loyalty. The party’s lack of self-reflection may lead to future difficulties.

The Changing Political Landscape of Punjab

Punjab will reveal the true impact of these defections. The AAP secured a historic and decisive victory in 2022. The party drew support from a mix of anti-incumbency sentiment, promises to reform governance, and a deliberately created image as an alternative to both Congress and conventional regional forces Like the Akali Dal. These defections upset the balance in multiple ways.

First, they cast doubt on the AAP’s declaration of internal unity. Voters in Punjab are willing to try new things, but they dislike political instability. Widespread perception of internal conflict may undermine voters’ faith in the party’s governance.

Second, the BJP’s increased presence creates a new competitive landscape. The BJP’s strategy in Punjab, despite its current weakness there, is changing from indirect involvement to direct competition. Absorbing AAP leaders provides a boost in numbers along with valuable local intelligence and networks for upcoming campaigns.

Third, these departures might allow other political groups, especially the Congress and regional players, to adjust their stances. Historically, Punjab’s politics has been unstable, and so voters will switch parties based on their performance and how they are perceived. A weakened AAP might lead to a fragmented election with no clear winner like in 2022.

The “Outsider” Narrative: A Double-Edged Weapon

Critics say some defecting leaders don’t have strong ties to Punjab. By portraying the defections as a betrayal by politicians from outside the region, AAP can work to solidify its support among Punjabi voters. This strategy has been used before. In Punjab politics, regional identity has often significantly affected voter behaviour and party alignments. AAP can combat the adverse image from defections by highlighting its local leaders and community connections.

However, if the AAP brings back its “outsider versus insider” story, it may backfire this time. AAP in Punjab has invariably leaned on centralised leadership and outsider strategists. Focusing too much on the outsider story might reveal inconsistencies in its political framework. Additionally, the focus on governance by Punjab’s voters diminishes the impact of identity politics. So, focusing on development might help the party in combating anti-incumbency and the repercussions of the Rajya Sabha MPs’ defection.

Domino effect is a risk. Will MLAs be next?

The most crucial question may be if the Rajya Sabha defections will set off a wider political cascade. AAP’s power in Punjab is based on its dominant majority in the Legislative Assembly. The party risks a severe governance crisis if any of its MLAs decide to defect or rebel.

If course, there’s no immediate sign of widespread MLA resignations right now. State politics operates differently from the Rajya Sabha, where members tend to have more freedom. Still, the momentum in politics can be quite infectious. If the sense of instability increases, it might encourage dissenting voices within the party ranks. Furthermore, it’s well known that the BJP doesn’t settle for small victories. It has the capacity to engineer widespread defections. For example, in Maharashtra it successfully divided NCP and Shiv Sena.

The AAP must take rapid action to avoid this situation. Beyond disciplinary steps, this requires proactive collaboration with legislators. Resolving grievances, securing a voice in decision-making, and reinforcing Party unity are key to limiting potential fallout. Complacency and/or arrogance among top leaders definitely trigger rebellion and defections.

Managing Leadership During Stress

The AAP’s response to the crisis hinges on Punjab’s Chief Minister. His leadership as the party’s face in Punjab will be crucial in shaping perception and reality. He needs to juggle two conflicting objectives: ensuring stable governance and handling internal party matters.

His personal appeal and rapport with the masses give him an edge. He stands apart from defecting leaders due to his strong local connections and his approachable public image. This provides him with some resilience to political shocks. Still, popularity by itself is not enough. Effective crisis leadership hinges on strategic clarity and organisational discipline. He needs to take charge of the state unit, make decisions faster, and ensure that the party’s governance goals are met.

A Turning Point for AAP’s Organisational Reform

If managed positively, the crisis could drive AAP’s organisational growth. Being adaptable and reforming political parties tend to be more robust following difficult periods. Addressing the underlying issues causing dissatisfaction within AAP is crucial. To foster trust within the party, the top leadership ought to consider decentralising decision-making, empowering state units, and implementing transparent processes for leadership progression.

Also, the AAP needs to adjust its political communication. Anti-corruption activism and governance innovation were the roots of its initial success. This story has faded over time. Crucially, maintaining its core identity while evolving with political changes is key for its sustained existence. In other words, its idealistic core should remain intact while indulging in pragmatic politics - be it for retaining its members or dealing with allies and rivals.

2027 Elections: What to Expect

The defections have created a degree of uncertainty ahead of the 2027 Punjab Assembly elections, complicating what might have been a clear competition. The AAP enters the election season with strengths and weaknesses.

It retains a significant legislative majority and the incumbency advantage, which are positives. Voter loyalty may remain strong if it fulfils its governance commitments, particularly regarding employment, agriculture, and public services.

However, the feeling of instability might hurt its campaign. Opposition parties are expected to use the defections to create doubts about the AAP’s credibility and solidarity in the public mind. With its new leaders, the BJP has the potential to build a more robust campaign infrastructure in the state. But the realisation of this potential will depend on several factors, including how the Punjabis perceive its tactics of engineering defections and discrediting the opponents.

The final election results hinge on the AAP’s success in handling the present crisis. Success in organisational stabilisation and governance delivery may cause the defections to recede. Otherwise, they might significantly alter Punjab’s political path.

Conclusion: This could be a pivotal moment.

So, it’s not simply a numerical transition when seven AAP MPs switch to the BJP. The BJP can use this to extend its reach and reframe stories within a state that presents difficulties. It represents a tough trial of resilience, leadership, and organisational strength for AAP.

This unfolding story centres on Punjab. Electoral tactics and party responses to internal and external difficulties will influence the state’s political trajectory. From this viewpoint, the departures signify not a conclusion but rather the start of a different era in the Punjab politics.

The outcomes for AAP and the BJP will be shaped by choices made in the coming months. The 2027 elections won’t only be about competing for power alone. It is also about what the Punjab voters will accept. Let us not forget how they have shown the door to powerful parties like the Akali Dal and the Congress, when taken for granted.

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Bernstein’s Warning: Growth Without Guarantees-India’s Economic Moment of Reckoning

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The recent 12-page open letter from global brokerage Bernstein to India’s Prime Minister arrives like a cold gust cutting through India’s celebratory economic narrative. For years, the country has been framed as the world’s fastest-growing major economy, a rising power steadily climbing global GDP rankings while attracting investment and geopolitical attention. Bernstein does not deny this ascent. Instead, it questions its durability. Beneath the headline growth, the letter identifies structural weaknesses—“fault lines,” as it calls them—that could lock India into a low-productivity equilibrium just when it is expected to break into sustained prosperity.

As of April 2026, this warning feels particularly urgent. India stands at the crossroads of two powerful forces: rapid technological disruption and critical fiscal choices. One promises efficiency but threatens employment; the other offers political stability but risks long-term stagnation. The intersection of these forces is shaping a volatile and uncertain development trajectory, where growth may continue, but the quality of that growth—and who benefits from it—remains deeply contested.

The AI Disruption: From Global Back Office to Vulnerable Workforce

For nearly three decades, India’s economic story has been inseparable from its IT services revolution. The rise of software exports, Business Process Outsourcing, and Global Capability Centres created a vast middle class anchored in stable, white-collar employment. This ecosystem, employing roughly 15 million people directly and indirectly, became the backbone of aspirational India. It was not just an industry—it was a social contract promising upward mobility through education and English proficiency.

That contract is now under strain. Generative artificial intelligence is not a distant possibility; it is already reshaping the very jobs that powered India’s growth. Entry-level coding, software testing, customer support, and routine analytics—the bread and butter of India’s IT workforce—are increasingly being automated. What once required teams of engineers can now be performed by AI systems in a fraction of the time.

The danger here is not simply job loss, but structural displacement. India’s IT model was built on scale—large numbers of moderately skilled workers delivering standardised services to global clients. AI undermines this model by rewarding fewer, highly skilled individuals who can design, manage, and improve intelligent systems. The pyramid is collapsing from the bottom up.

Equally troubling is the issue of value capture. India leads the world in AI application adoption, accounting for a significant share of global downloads. Yet it does not control the foundational technologies that power these applications. The core models, infrastructure, and intellectual property remain concentrated in the United States and China. This creates a paradox: India is both a leading user of AI and a dependent consumer of it.

In economic terms, this is a rent-extraction problem. Indian firms and users pay for tools built elsewhere, even as those tools reduce domestic employment. Without investment in frontier AI research and indigenous platforms, India risks becoming permanently locked into a subordinate position in the global digital economy—consuming innovation rather than creating it.

The Fiscal Dilemma: Welfare as Symptom, Not Solution

If technology is reshaping the demand for labour, fiscal policy is shaping how the state responds to that disruption. Bernstein’s critique of India’s recent fiscal choices is sharp and uncomfortable. It argues that the growing reliance on unconditional cash transfers reflects not strength, but weakness—an inability to generate stable, productive employment at scale.

In the run-up to state elections across 2025 and 2026, cash transfer schemes—particularly those targeted at women—have expanded significantly. Estimates suggest annual outlays between ₹1.7 lakh crore and ₹2.5 lakh crore, roughly half a percent of GDP. These schemes undeniably provide relief. They sustain consumption, reduce immediate distress, and carry clear political benefits.

But their economic impact is more ambiguous. Unlike capital expenditure on infrastructure, education, or healthcare, cash transfers do not create lasting assets. They stimulate demand in the short term but do little to enhance productivity or future growth potential. Bernstein frames this as a misallocation of scarce resources: money that could build roads, logistics networks, or research capacity is instead being used to sustain consumption.

This shift also signals a deeper structural issue. In a healthy, rapidly industrialising economy, job creation drives income growth, which in turn supports consumption. In India’s case, the sequence appears reversed. The state is increasingly stepping in to support consumption directly, suggesting that the underlying employment engine is not functioning as expected.

The risk is not just fiscal strain, but strategic drift. As more resources are diverted toward politically attractive but economically shallow interventions, the space for long-term investment shrinks. Over time, this could erode the very foundations of growth, creating a cycle where weak job creation necessitates more transfers, which in turn limit the capacity to invest in job creation.

Manufacturing’s Missed Moment: The Late Entrant Problem

Few ambitions have been as central to India’s economic vision as the push to become a global manufacturing hub. Initiatives such as “Make in India” and Production Linked Incentive schemes were designed to attract investment, build capacity, and integrate India into global supply chains. Yet the results have been underwhelming. Manufacturing’s share of GDP remains stuck at around 16–17 percent, far below the levels achieved by East Asian economies during their high-growth phases.

Bernstein attributes this stagnation to what might be called a “late entrant” syndrome. India is attempting to build capabilities in industries where global supply chains are already deeply entrenched. Whether it is semiconductors, advanced batteries, or robotics, the dominant players have decades of experience, established ecosystems, and significant technological advantages.

This makes catching up both expensive and uncertain. Incentives can attract investment, but they cannot instantly create the dense networks of suppliers, skilled labour, and institutional support that define successful manufacturing clusters. As a result, progress has been slower than anticipated.

The much-discussed “China+1” opportunity illustrates this challenge. While global companies are seeking to diversify away from China, India has not emerged as the default alternative. Countries like Vietnam and Mexico have often moved faster, offering more predictable logistics, better infrastructure, and smoother integration into existing supply chains.

Domestic constraints compound the problem. Inconsistent power supply, regulatory complexity, and gaps in logistics continue to raise costs and reduce competitiveness. Without addressing these foundational issues, manufacturing growth risks remaining incremental rather than transformative.

Agriculture’s Weight: A Structural Drag on Productivity

If manufacturing represents unrealised potential, agriculture represents an enduring constraint. Nearly 45 percent of India’s workforce remains engaged in agriculture, yet the sector contributes only about 15 percent of GDP. This imbalance is not just a statistical anomaly—it is a reflection of deep inefficiencies and underemployment.

In many ways, agriculture acts as a safety net, absorbing labour that the rest of the economy cannot productively employ. While this prevents mass unemployment, it also suppresses productivity and incomes. Workers remain trapped in low-value activities, with limited opportunities for upward mobility.

Bernstein’s call for revisiting farm reforms is both predictable and politically sensitive. Efforts to reform agricultural markets have historically faced strong resistance, reflecting the sector’s social and electoral importance. Yet without change, the costs are significant. Poor storage, inadequate logistics, and fragmented supply chains lead to substantial post-harvest losses—estimated at 5 to 15 percent of output.

Improving this system would require investment in cold storage, transport networks, and market access, as well as policy reforms that encourage diversification into higher-value crops. The transition would be difficult and disruptive, but the alternative is continued stagnation.

The broader challenge is one of structural transformation. For India to sustain high growth, labour must move from low-productivity agriculture to higher-productivity manufacturing and services. Without that shift, the demographic dividend risks becoming a demographic burden.

Energy Dependence and Transport Choices: The Cost of Inefficiency

India’s economic vulnerabilities are not limited to labour and capital allocation; they extend into energy and infrastructure. The country remains heavily dependent on imported crude oil, with import dependence hovering around 88 percent. This exposes the economy to global price shocks and geopolitical risks, complicating both fiscal planning and inflation management.

The transition to alternative energy sources, including electric vehicles, has been slower than many expected. While progress is visible, it has not yet reached the scale required to significantly reduce oil dependence. At the same time, inefficiencies in the power sector continue to impose heavy costs. Distribution companies, or discoms, carry accumulated losses exceeding ₹5 lakh crore, reflecting a mix of pricing distortions, technical losses, and governance challenges.

Transport policy adds another layer to this inefficiency. Bernstein’s critique of heavy investment in aviation is notable. Air travel is expanding rapidly in India, but the sector lacks a strong domestic manufacturing base, meaning much of the value is captured abroad. In contrast, railways offer greater domestic value creation, employment potential, and energy efficiency.

A “rail-first” strategy, as proposed in the letter, is not just about transport—it is about economic structure. Investments in rail infrastructure can support industrialisation, reduce logistics costs, and enhance connectivity across regions. Yet such a shift would require reallocation of resources from politically sensitive programmes, a move that is easier to recommend than to implement.

The Shrinking Window: Demography and Time Pressure

Underlying all these challenges is a simple but unforgiving reality: time is limited. India’s demographic dividend—the period during which a large share of the population is of working age—is nearing its peak. By the early 2030s, this advantage will begin to fade as the population ages.

This creates a narrow window for structural transformation. The next few years are critical. If India can build productive capacity, create quality jobs, and move up the technological ladder, it can convert its demographic advantage into sustained prosperity. If not, it risks entering middle-income status without the institutional and technological foundations needed to progress further.

Bernstein’s warning is stark precisely because it focuses on this temporal dimension. Many of India’s challenges are not new. What is new is the urgency. Delays that might once have been manageable now carry much higher costs.

Conclusion: Choosing Between Momentum and Transformation

India’s growth story is real, but it is not self-sustaining. The current trajectory combines strong macroeconomic momentum with underlying structural weaknesses. Left unaddressed, these weaknesses could erode the very gains that have been achieved.

The choice facing policymakers is not between growth and stability, but between two different models of growth. One is consumption-led, supported by transfers and incremental improvements. The other is productivity-led, driven by investment in technology, infrastructure, and human capital. The first is easier in the short term; the second is more demanding but ultimately more durable.

What makes this moment particularly consequential is the convergence of technological disruption and demographic pressure. AI is reshaping the global economy at a pace that leaves little room for gradual adjustment. Countries that fail to build capabilities quickly risk being locked into dependent roles. For India, this risk is amplified by the scale of its workforce and the expectations of its middle class.

The Bernstein letter does not offer easy solutions, but it performs an important function: it forces a reconsideration of comfortable narratives. Growth alone is not enough. The quality, structure, and sustainability of that growth matter just as much.

If there is a single thread running through its critique, it is this: India’s challenge is not a lack of potential, but a misalignment of priorities. Correcting that misalignment will require difficult choices—shifting resources from consumption to investment, from short-term gains to long-term capacity, and from political convenience to economic necessity.

The window is still open, but it is narrowing.

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