The minister said India’s middle class has expanded at an average annual rate of 6.3% since 1995, following the country’s economic liberalisation. Citing OECD projections, she said India is expected to surpass China in the absolute size of its middle-class population between 2030 and 2035.

She also referred to World Economic Forum estimates showing a fundamental shift in India’s consumption patterns, with nearly 500 cities emerging as new centres of economic activity. “By 2036, 93% of all spending in India will be because of the middle class or the slightly affluent consumers,” she said. Emphasising that India’s growth is geographically broad-based, Sitharaman said the middle class is increasingly concentrated in tier-II and tier-III cities rather than only in metropolitan centres, leading to a wider distribution of wealth.

Listing the government’s initiatives to expand the middle class, the minister highlighted financial inclusion through Jan Dhan accounts, saying 248 million people have moved out of multidimensional poverty, citing World Bank and IMF estimates. She said the government-backed credit guarantee programme has enabled first-time entrepreneurs to access concessional loans without collateral, while widespread digital connectivity and digital payments have improved the creditworthiness of small businesses. Sitharaman also pointed to lower GST rates, investments in girls’ hostels, skill development in animation, visual effects, gaming and digital media, and university townships focused on training. FE

In the non-life segment, for an airline with a fleet worth $ 20 billion and annual premium of $ 30 million, insurance commission to brokers can range from 2.5-10%, according to sources. According to the IRDAI consultation paper issued two weeks ago, insurance intermediaries whose commission income exceeds a prescribed threshold will be required to make detailed annual disclosures to the regulator. These disclosures would include commission earnings, related-party transactions, profits generated from operations, and any dividend repatriation to promoters or parent entities.

The regulator believes that enhanced reporting will help monitor business practices and ensure that intermediary compensation structures remain transparent and aligned with policyholder interests.

The proposed framework also seeks to strengthen public accountability by mandating that such information be published on the websites of the intermediaries.

The latest proposal comes at a time when the regulator is planning to put a cap on commission earnings, a move that could disrupt the segment.

The total commission shelled out by 26 life and 28 non-life insurers crossed the Rs one lakh crore mark in FY25. The gross commission expenses of public sector general insurers, private general insurers, standalone health insurers and specialised insurers stood at Rs 9,335 crore, Rs 30,498 crore, Rs 7,365 crore and Rs 67 crore respectively for 2024-25, thus cumulatively amounting to a total gross commission expense of Rs 47,266 crore for the entire non-life insurance industry, according to the IRDAI Annual Report.

During 2024-25, life insurers paid a total amount of Rs 60,800 crore as commission.

The commission expenses ratio (commission expenses expressed as a percentage of premium) slightly increased to 6.86% in 2024-25 from 6.21% in 2023-24. While the IRDAI has not yet formally proposed a cap on commissions, it is reportedly working on a draft proposal to limit commission payouts by insurers to distributors, a move enabled by the January 2026 amendment to the Insurance Act that empowered the regulator to prescribe commission ceilings.

Cut-throat competition

Insurance distribution is widely regarded as one of the most fiercely competitive segments of the financial services industry. Commission earnings in the insurance sector — particularly among intermediaries such as agents, brokers, web aggregators, corporate agents and insurance marketing firms — have long been a subject of intense competition, especially in high-growth segments such as health, motor, corporate and retail insurance.

With many insurers offering products that are broadly similar in terms of coverage and pricing, intermediaries often place significant emphasis on commission structures, incentive payouts and other commercial arrangements when deciding which products to distribute. “As a result, insurers compete aggressively to secure access to distribution channels, frequently offering higher commissions, performance-linked incentives and other benefits to attract and retain intermediaries,” said an official.

Intense race for customers

Intermediaries generally favour products that generate recurring renewal commissions, prompting strong competition to acquire new policyholders and policy contracts from big corporate clients. There is also considerable mis-selling and under-cutting by insurers to get business.  The emergence of digital platforms, web aggregators and insurtech companies has further heightened competition by lowering customer acquisition costs, expanding market reach and increasing price transparency.

The statutory Inspection for Supervisory Evaluation (ISE 2025) of the bank was conducted by RBI with reference to its financial position as on March 31, 2025, it said, adding a notice was issued to the bank advising it to show cause.

The new framework could require VPN operators to establish offices in India and hire compliance officers who can address grievances raised by the government, two senior government officials told The Indian Express. Penal consequences, including jail terms for local employees, are also being considered in case of non-compliance, it is understood. Much of these requirements and penalties are also present for large social media companies under India’s Information Technology (IT) Rules, 2021.

“In the last few months, we have been observing that users are able to bypass content, accounts and online services that have been blocked by the government on various grounds by using VPN services. The 2022 Cert-In directives that required VPN providers to store some usage data have not managed to rein in these companies as they have simply refused to comply. So, the need for a full-fledged law is being felt,” a senior government official said, requesting anonymity.

Queries sent to the Ministry of Electronics and IT did not elicit a response until publication.

VPN services allow users to mask their IP addresses and browse the Internet via servers located elsewhere, making it appear like the traffic is coming from a different jurisdiction, while hiding the original location. India’s censorship orders typically require companies to geo-block content within the country’s jurisdiction, so, by using a VPN server located in the US, for instance, people can visit content that has been blocked here. They are also a way to anonymously browse the web, and are largely seen as a privacy-enhancing service.

India has stepped up its content blocking ecosystem in recent years, with over 24,000 orders issued in 2025, up from the over 12,000 orders it had issued in 2024, The Indian Express had earlier reported.

Another official said the need for having local points of contact for VPN companies is being felt so that the government can direct these services to not allow access to content that is being blocked, as such services “otherwise defeat the purpose”.

For instance, when the Centre temporarily blocked Telegram ahead of the NEET-UG retest last month, David Peterson, general manager at Proton VPN, a major VPN provider, said that daily registrations for the service from India jumped by more than 120%. Peterson’s post on X and his account were both blocked in India after he shared this information.

The 2022 Cert-In directive required VPN service providers along with data centres and cloud service providers, to store information such as names, email IDs, contact numbers and IP addresses (among other things) of their customers for a period of five years. In response, VPN operators like Proton VPN, NordVPN, ExpressVPN and Surfshark, had removed their servers physically located in India and had started routing traffic coming from India via Singapore.

“We have no intention of complying with this invasive mass surveillance law, leaving us no choice but to remove our VPN servers from Indian jurisdiction,” Proton VPN had said at the time.

This year’s situation stands in contrast to last year, when hydroelectric power played a crucial role in meeting evening peak demand during summer when solar output drops. However, rainfall deficit has altered the equation. With hydro generators prioritising reservoir conservation, grid operators are relying more on thermal sources in providing flexible peak-hour generation.

Stress on coal power

Throughout the April-June period this year, coal-fired generation has remained elevated, with output climbing to 352,725.38 MU — the highest for the period since 2023.  The sustained reliance on thermal power also pushed coal consumption at power plants above supplies during the first two months of the quarter.

Latest data from the Central Electricity Authority shows the country’s 223 GW thermal fleet consumed 156.8 million tonnes (mt) of coal during April-May 2026, against supplies of 147.2 mt, resulting in a drawdown in inventories.

The higher thermal generation reflected the need to meet sustained demand from elevated night-time temperatures and agricultural consumption amid a monsoon rainfall deficit, a senior official said.

However, coal supplies to the power sector gathered some pace in June, with dispatches by Coal India Ltd (CIL) — the country’s largest coal miner — rising 7.5% y-o-y, according to company data.

That marked a sharp acceleration from the 2.2% growth recorded in May, indicating stronger coal movement to power plants as thermal generation remained elevated. Notably, CIL accounts for about 83% of the coal supplied to the power sector in India, while nearly 80% of its total offtake goes to power utilities.

Grid operators turn to gas-based power

The sluggish progress of southwest monsoon has also prompted the country’s top grid operator to turn to expensive gas-based power this summer. On June 29, Grid Controller of India (Grid India) issued an advisory asking gas-based power stations to plan fuel procurement arrangements, anticipating the need for additional gas-fired generation for 10-15 days in July.

The assessment is based on projected demand, planned and forced outages of generating units, hydro, renewable generation profiles and present weather information available on IMD, the advisory read. Similar advisories were issued for June as well. This comes as the conflict in West Asia has cast a shadow over fuel availability for gas-based power plants this year. During April-June period, gas-based power generation fell to 6,594.81 MU from 8,794.35 MU in the same period last year, marking a 25% y-o-y decline. Even though gas-based power accounts for only a small share of India’s overall generation mix, it plays a crucial rebalancing role during evening peak hours.