Buffers can calm anxiety, but they cannot carry a system forever. Forex reserves can steady a currency. Legal settlements can discipline digital platforms. Central banks can fight symbolic exchange-rate battles. Rising research spending can signal ambition. Nation states can rely on inherited legitimacy. But a harsher world eventually asks a deeper question: Is there enough real capacity beneath the buffer?
Our first editorial today, “Rising forex reserves”, asks this question with respect to India’s external position. The RBI’s forex reserves have risen to a record $729.3 billion, helped by swap schemes announced in June, including the FCNR(B) deposit window. This offers comfort amid uncertainty in West Asia, elevated crude prices, and pressure on the rupee. But the editorial warns that reserves should not be used to defend the currency against fundamentals. Swap inflows provide short- to medium-term relief; they do not solve the larger challenge of attracting stable capital, improving external competitiveness and preparing for tighter global financial conditions.
The second editorial, “Terms of engagement”, turns to social media. Meta’s settlement in the child-addiction case could force major design changes across platforms: Age checks, time limits for teenagers, enforced breaks, restrictions during school hours, muted notifications, hidden like counts, limits on cosmetic filters, parental alerts and the option of chronological feeds instead of algorithmic ones. The significance lies in the shift from voluntary promises to structural safeguards. If platforms are built to maximise engagement, teen safety cannot depend on goodwill alone. It must be built into the operating model.
Ajay Shah’s column, “Round number skirmishes”, takes the argument back to currency policy. India’s repeated attempts to defend the rupee near psychologically important levels impose costs on public finances, financial-market development and monetary autonomy. The FCNR(B) strategy may buy time, but India is now a much larger economy with far bigger external flows. Defending round numbers can distort incentives, push activity offshore and weaken the domestic financial system. A modern economy needs deeper markets, not recurring barricades around exchange-rate symbols.
Ashish Dhawan and Anisha Grover’s column, “India’s R&D inflection moment”, makes the capacity argument most directly. India’s R&D spending has crossed 0.84 per cent of gross domestic product, and the private sector’s share has risen sharply. This is a genuine shift. But if India wants to avoid the middle-income trap and realise its Viksit Bharat ambition, it must raise R&D intensity further, increase industry participation, fund higher education and foundational research better, and create stronger bridges between labs, startups, firms and markets. Innovation capacity has to be built before global competition hardens.
“The unmaking of the nation state”, Shyam Saran’s review of Rana Dasgupta’s After Nations extends the theme to the global order. The nation state, liberalism and international law are not timeless certainties but historical constructs now under pressure from capital, technology, ecology and new geopolitical actors.
As these pieces tell us, stability will not come from stockpiles, settlements, symbolic defences or inherited structures alone. It will come from the capacity to adapt when old buffers no longer hold.
