Daily Current Affairs (DCA) 14 March, 2025

Daily Current Affairs Quiz
14 March, 2025

National Affairs

1. Rising Kidney Disease Cases Among Young Indians

Context:

On World Kidney Day (March 13), medical experts highlighted the alarming rise in chronic kidney disease (CKD) among young Indians, traditionally considered a concern for older adults. Poor lifestyle habits, unregulated supplement use, and lack of awareness are key contributors. Kidney disease is a silent ailment that often goes undetected until significant damage occurs.

Key Causes & Risk Factors

• Lifestyle Factors
  • Obesity, poor diet, excessive fast food, high sodium intake
  • Low water consumption, especially among students and professionals
  • Excessive use of painkillers, protein supplements (whey, creatine)
• Medical Conditions
  • Diabetes, hypertension, cardiac issues
  • Pregnancy-related hypertension
  • Genetic predisposition (family history of kidney disease)
  • Early childhood conditions (low birth weight, nephrotic syndrome)
• Environmental Exposure
  • Pesticides and pollutants increasing kidney stress
  • Stress-induced high blood pressure affecting kidney function

Key Warning Signs

• Early-stage kidney disease is often asymptomatic
• Symptoms to watch for
  • Foamy urine (protein leakage)
  • Blood in urine (often ignored)
  • Frequent urinary infections
  • Fever with abdominal pain, burning sensation while urinating
  • Unexplained fatigue, swelling, and high blood pressure

Prevention & Lifestyle Recommendations

• Routine screenings
  • High-risk individuals should undergo creatinine and urine albumin tests annually
  • People with family history or pre-existing conditions: Testing every six months
• Healthy habits
  • Hydration: Avoid reducing water intake due to restroom concerns
  • Balanced diet: Avoid excessive salt, processed foods; prefer natural seasonings (lemon, black pepper)
  • Regular exercise and maintaining a healthy weight
  • Avoid overuse of supplements and painkillers
  • Adequate sleep (6–8 hours) and stress management

Challenges & Medical Concerns

• Limited Access to Treatment
  • India performs only 15,000 kidney transplants yearly, while demand exceeds 2 lakh
  • Dialysis requires large amounts of water (125L per session), making expansion difficult
• Awareness Gap: Many mistake kidney disease for minor ailments (e.g., back pain)
• Regulatory Concerns: Unmonitored supplement consumption among gym-goers poses health risks

Children & Kidney Disease

• Common causes
  • Congenital kidney disorders (cystic dysplastic kidneys, polycystic kidneys, glomerular disorders)
  • Hereditary conditions requiring lifelong monitoring
• CKD in children is irreversible and demands dialysis or transplantation

Kidney disease is increasing among young Indians due to poor lifestyle choices and lack of preventive measures. Since CKD progresses silently, early detection through routine screenings is crucial. Preventive care, awareness, and lifestyle changes are the most effective solutions, as dialysis and transplants remain inaccessible for many.

Source: TH

2. India’s First-Ever Auction of Exploration Licences for Critical Minerals

Context:

Union Coal and Mines Minister G. Kishan Reddy launched India’s first auction of exploration licences (ELs) for 13 critical mineral blocks in Dona Paula, Goa. This move marks a significant reform aimed at unlocking the country’s deep-seated and untapped mineral resources.

Key Highlights of the Auction

• Launch Location: Dona Paula, Goa.
• Number of Exploration Blocks: 13.
• Key Minerals Included:
  • Rare Earth Elements (REEs)
  • Zinc
  • Diamonds
  • Copper
  • Platinum Group Elements (PGE)
• Exclusive Exploration Rights: Private firms can explore up to 1,000 square meters per licence.

Impact on India’s Mining Sector

• Boost to Mineral Exploration: Aims to strengthen India’s position as a global player in mineral resources.
• Encouraging Private Sector Participation: Opens opportunities for private investments in exploration.
• Enhancing Transparency & Efficiency: New framework ensures that only the most promising areas proceed for detailed exploration.

Minister’s Statement on the Reform

• The mining sector has achieved major milestones in the past decade.
• The auction marks the foundation for a new era in mineral exploration.
• Future developments will position India as a global leader in mineral exploration.

Outlook

• The initiative is expected to attract domestic and international investments in the mining sector.
• It will accelerate mineral self-sufficiency, reducing India’s dependence on imports.
• Strengthening the critical mineral supply chain will support sectors like electronics, renewable energy, and defense.

This auction marks a significant policy shift, fostering greater private sector involvement and ensuring a transparent, efficient, and innovation-driven exploration process.

3. ISRO Successfully Accomplishes SpaDeX Satellite Undocking

Context:

Nearly two months after successfully docking two satellites as part of the Space Docking Experiment (SpaDeX) mission, the Indian Space Research Organisation (ISRO) achieved a new milestone by executing their undocking on March 14, 2025, at 9:20 a.m.

Key Details of the Undocking Event

• Orbit Details: 460 km circular orbit with a 45-degree inclination.
• Current Status: Satellites now orbiting independently and in good health.
• Monitoring Locations: Operations were tracked from Bengaluru, Lucknow, and Mauritius ground stations.

Significance of the Achievement

• ISRO successfully demonstrated all capabilities required for rendezvous, docking, and undocking operations in space.
• This reinforces India’s capabilities in space technology, placing it alongside the U.S., Russia, and China in this domain.

SpaDeX Mission

• Launch Date: December 30, 2024, via PSLV C60.
• Docking Date: January 16, 2025.
• Satellites Involved:
  • SDX01 (Chaser)
  • SDX02 (Target)

Objectives of the SpaDeX Mission

• Develop and demonstrate docking and undocking technology for future space missions.
• Enable critical advancements in space technology, including:
  • Sending Indian astronauts to the Moon.
  • Conducting sample return missions from the Moon.
  • Supporting the development of an Indian Space Station.
• Demonstrate power transfer capabilities between docked spacecraft, crucial for future in-space robotics and payload operations.

Future Plans

• Additional experiments with the undocked satellites will continue in the coming days.
• The success of SpaDeX lays the groundwork for India’s long-term space ambitions, including deep-space missions and in-orbit satellite servicing.

This milestone marks a significant step forward for ISRO, strengthening India’s expertise in autonomous spacecraft docking and undocking, which is vital for advanced space exploration and station-building initiatives.

4. Prime Minister Internship Scheme (PMIS) App

Context:

Union Finance Minister Nirmala Sitharaman will launch the Prime Minister Internship Scheme (PMIS) app, making it easier for young people to apply for internships under the scheme, according to official sources.

Key Announcements & Initiatives

• PMIS App Launch: The app, developed by Bhaskaracharya Institute for Space Applications and Geoinformatics (BISAG), will allow youth to easily register and apply for internships.
• Facilitation Centre in Kolkata: The first PMIS facilitation centre will be launched in Kolkata, set up by the Ministry of Corporate Affairs (MCA) in partnership with the Confederation of Indian Industry (CII).
• CII Facilitation Desks: 47 Model Career Centres across India will also set up facilitation desks to provide guidance and support for applicants.

PMIS: Objectives & Implementation

• Announced in Budget 2024-25, the Prime Minister’s Internship Scheme (PMIS) aims to provide internship opportunities to one crore youth in top 500 companies over the next five years.
• The Ministry of Corporate Affairs (MCA) launched the scheme as a Pilot Project on October 3, 2024, with a target of 1,25,000 internships for FY 2024-25.

Current Progress of PMIS Pilot Project

• First Round (2024-25): Over 1,27,000 internships were offered across various sectors.
• Second Round (January 9, 2025 – Ongoing): More than 1,18,000 internship opportunities have been posted by partner companies.
• Financial Allocation:
  • ₹840 crore allocated for the pilot project.
  • ₹48 crore spent so far.

Importance of the PMIS App

• Improves Accessibility: Many youth use mobile phones more than computers, making it easier to register and apply via an app.
• Centralized Platform: The internship portal, currently managed by BISAG, will be more user-friendly and streamlined.
• Enhanced Outreach: The MCA is actively working with state governments, central ministries, and industry bodies to promote and expand the scheme.

The Road Ahead

• Increased Participation: More companies will continue posting internships, and existing ones can update unfilled opportunities.
• Wider Reach: The app and facilitation centres will ensure that more students across India can benefit.
• Boost to Youth Employment: The scheme aligns with India’s broader goal of enhancing skill development and employment opportunities.

Bottom Line

The PMIS app launch and the first facilitation centre in Kolkata mark significant steps toward making the internship scheme more accessible and impactful. With over one lakh internship opportunities already available, the scheme is on track to benefit millions of youth across India in the coming years.

5. Hantavirus: A Rare but Deadly Disease

Context:

The recent passing of Betsy Hackman, wife of actor Gene Hackman, has brought attention to hantavirus, a rare but severe viral infection that can lead to life-threatening respiratory illness and internal bleeding.

What is Hantavirus?

According to the CDC, hantaviruses belong to a family of viruses that can cause:

• Hantavirus Pulmonary Syndrome (HPS): A severe respiratory illness.
• Hemorrhagic Fever with Renal Syndrome (HFRS): Causes internal bleeding and kidney failure.

How is Hantavirus Contracted?

• Carried by Rodents: Common carriers include deer mice, white-footed mice, rice rats, and cotton rats.
• Transmission to Humans:
  • Inhalation of Aerosolized Droppings: The virus spreads when contaminated dust particles from rodent urine, feces, or saliva are disturbed.
  • Direct Contact: Handling infected rodents or their nests.
  • Rare Cases: Bite from an infected rodent.

Symptoms and Progression

• Incubation Period: Symptoms appear 1-8 weeks after exposure.
• Early Symptoms (Flu-like):
  • Fever
  • Muscle aches
  • Fatigue
• Severe Symptoms:
  • Respiratory Distress: Shortness of breath, chest tightness, and fluid in the lungs.
  • Organ Failure: In HFRS, it can lead to kidney failure and internal bleeding.

High-Risk Groups

The CDC highlights that individuals in rodent-prone areas are at higher risk, including:

• Farmers, campers, construction workers, and homeowners in rodent-infested areas.
• Children under five, pregnant women, and immunocompromised individuals should avoid handling pet rodents.

Treatment and Prevention

• No Specific Cure: There is no antiviral medication for hantavirus.
• Supportive Care:
  • Oxygen Therapy & Ventilation for severe respiratory cases.
  • Intensive Care Support to manage complications.
• Prevention Measures:
  • Rodent Control: Seal entry points and eliminate rodent infestations.
  • Proper Sanitation: Avoid sweeping contaminated areas; instead, disinfect with bleach solutions.
  • Protective Gear: Wear gloves and masks when cleaning rodent-prone areas.

Hantavirus is rare but potentially fatal, making early detection and prevention crucial. Proper hygiene and rodent control can significantly reduce the risk of infection.

6. Starlink’s Entry into India Through Bharti Airtel & Reliance Jio

Context:

India’s top telecom players, Bharti Airtel and Reliance Jio, have partnered with Elon Musk-led SpaceX to bring Starlink satellite internet services to India. This move aims to enhance connectivity in rural areas and may offer long-term investment opportunities in Bharti Airtel and Reliance Jio stocks. However, regulatory uncertainties and pricing challenges could limit short-term gains.

Key Developments

• Bharti Airtel Partnership: Will provide Starlink’s high-speed satellite internet to customers.
• Reliance Jio Partnership: Jio will distribute Starlink equipment through retail outlets and offer customer installation and support services.
• Strategic Focus: Targeting rural and remote areas with connectivity gaps, rather than high-density urban regions where terrestrial networks are superior.
• B2B Expansion: Partnerships may help telecom players grow their enterprise and business connectivity offerings in areas lacking fiber or fixed wireless access.

Challenges & Concerns

• Regulatory Approval: Indian authorities have privacy and security concerns regarding satellite internet services.
• High Pricing vs Local Broadband Rates:
  • Starlink Pricing: $105–$500 per month, plus $250–$380 for hardware.
  • Indian Broadband Plans: Much cheaper, starting at $5–$7 per month (7–18x lower than Starlink).
  • Cost Sensitivity: Starlink’s high costs may hinder mass adoption unless the Indian government offers subsidies.

Financial & Market Impact

• Limited Direct Revenue Contribution: Analysts believe Airtel and Jio will only generate distribution income, making the direct impact on revenues modest.
• Stock Market Outlook:
  • Long-term Investors: May find buying opportunities on market dips, driven by 5G expansion and digital transformation.
  • Short-term Caution: Regulatory challenges could cap near-term stock gains.

Starlink’s partnerships with Airtel and Jio mark a strategic move to expand India’s rural internet infrastructure. However, pricing barriers and regulatory uncertainties remain significant hurdles, and the immediate financial impact on telecom giants is expected to be limited.

Banking/Finance

1. RBI Nears Finalization of Climate Risk Disclosure

The Reserve Bank of India (RBI) is close to finalizing climate risk disclosure norms for regulated entities and preparing a guidance note for lenders to conduct climate scenario analysis and stress testing, Governor Sanjay Malhotra announced on Thursday.

Key Announcements

• Finalization of Disclosure Norms: RBI is working on a framework to ensure that regulated entities outline their climate risk management plans.
• Guidance on Climate Stress Testing: A dedicated guidance note will help financial institutions analyze climate-related risks through scenario-based stress testing.
• Common Pool of Bankable Projects:
  • To boost climate finance, entities will be encouraged to create a shared pool of viable green projects.
  • Financial institutions with experience in climate-related financing can contribute to and benefit from shared project data.

Climate Change Risks and Financial Sector Coordination

• The impact of climate change risks extends beyond finance to corporates, MSMEs, and agriculture, requiring a cohesive and harmonized approach.
• Collaboration among financial sector regulators, regulated entities, and government agencies is crucial for effective risk mitigation.

RBI’s Commitment to Green and Sustainable Finance

RBI’s Role as a Facilitator

• Acts as a facilitator for capacity building and a conducive regulatory framework to promote green finance.
• Issued the Framework on Acceptance of Green Deposits to encourage banks to finance green projects.
• Integrating small renewable energy projects into priority sector lending to boost green financing.

Commitment to Climate Risk Management

• Adopting a constructive and consultative approach to mitigate financial risks from climate change.
• Collaboration with the government and regulators to ensure harmonization and consistency in climate policies.

Vision for a Resilient Financial System

• Building financial resilience against climate shocks.
• Enabling the financial system to actively contribute to India’s sustainability goals.

RBI’s Short-Term Climate Action Plan

• Assess Climate Risks: Realistically estimate climate-related risks at both individual institutional and financial system levels.
• Implement Stress Testing: Use bottom-up and top-down approaches for risk assessments.
• Encourage Green Financing:
  • Strengthen technical expertise for financing green technology projects.
  • Promote innovation in sustainable finance solutions.

New Initiatives Underway

• Regulatory Sandbox “On Tap” Cohort: A dedicated initiative focused on climate risk and sustainable finance.
• Special “Greenathon” Event: Planned to encourage innovation in climate finance and sustainability.
• Final Climate Risk Disclosure Guidelines:
  • Following public consultations on the draft framework (February 2024), RBI is now incorporating feedback for final guidelines.
  • Regulated entities must detail governance, risk assessment, mitigation, and monitoring processes for climate-related financial risks.

The Road Ahead

With these new regulatory frameworks, RBI aims to:

• Strengthen climate risk assessment capabilities within the financial sector.
• Foster more transparent and effective climate finance mechanisms.
• Support India’s transition to a low-carbon economy through sustainable investment practices.

These initiatives mark a significant step in integrating climate risk considerations into India’s financial system, ensuring both stability and sustainability in the long term.

2. RBI’s Rate Cut Trajectory

Context:

A softer inflation print in February 2025 is unlikely to push the Reserve Bank of India (RBI) toward aggressive rate cuts, as system liquidity remains in deficit and the full transmission of the recent 25 basis point (bp) cut is still in progress, according to economists.

Inflation Trends & Forecasts

• February 2025 CPI inflation: 3.61% (lowest since July 2024), down from 4.3% in January.
• Food inflation decline (led by lower vegetable prices) was a key factor in easing inflation.
• UBS Securities projection: Average CPI inflation of 4.2% in FY25-26.

RBI’s Interest Rate Policy & Liquidity Conditions

• In February 2025, the RBI cut the repo rate by 25 bp to 6.25%, marking its first rate reduction in nearly five years.
• Banking system liquidity remains in deficit (₹1.38 trillion as of March 12), delaying the full transmission of the rate cut.
• The RBI has introduced liquidity measures like:
  • Open market operations
  • Daily variable rate repo auctions
  • Foreign exchange swaps

Market Response & Policy Transmission Challenges

• Corporate bond spreads and state government securities spreads over government bonds remain elevated.
• Certificate of deposit (CD) rates have increased due to tight liquidity and rising bulk deposit rates.
• Lending rates (linked to the marginal cost of funds-based lending rate – MCLR) have not fully adjusted to the February rate cut.

Expert Views on Rate Cut Trajectory

Economist (Institution)	Rate Cut Forecast	Outlook
Gaura Sen Gupta (IDFC Bank)	25 bp in April, 25 bp in June	RBI to proceed cautiously, keeping external factors in view.
Madan Sabnavis (Bank of Baroda)	25 bp in April, pause in June	RBI may reassess based on liquidity and monsoon impact.
Rahul Bajoria (Bank of America)	100 bp total rate cut	RBI may adopt a more aggressive easing stance.
Tanvee Gupta Jain (UBS Securities)	50 bp total rate cut, starting April	Policy support will strengthen domestic growth amid global uncertainties.

Key Factors Influencing RBI’s Decision

• US Federal Reserve’s rate decisions: RBI will watch for any Fed rate cuts before making deeper moves.
• Domestic growth dynamics: India’s Q3 FY25 GDP growth stood at 6.2%, up from 5.6% in Q2 FY25, supported by:
  • Stronger consumer demand
  • Higher export growth
  • Increased government expenditure
• Uncertainties in global trade policies, including potential reciprocal tariffs on India.

The Road Ahead

• The RBI is expected to remain cautious with its rate-cut strategy, balancing inflation control, liquidity concerns, and external risks.
• While some easing is expected, the depth of rate cuts will depend on how liquidity conditions evolve and how quickly policy rate transmission improves.

Despite lower inflation, the RBI is unlikely to pursue aggressive rate cuts due to liquidity deficits and global economic uncertainties. Most economists predict a gradual easing cycle, with an initial 25 bp cut in April and possible further reductions in June or beyond.

3. RBI Imposes Penalties on JM Financial Products and Experian Credit Information

Context:

The Reserve Bank of India (RBI) has imposed penalties on JM Financial Products Limited and Experian Credit Information Company of India for regulatory compliance deficiencies, according to a statement released.

Penalties Imposed

• JM Financial Products Limited
  • Penalty Amount: ₹3.1 lakh
  • Reason: Non-compliance with certain provisions related to Non-Banking Financial Companies (NBFCs).
• Experian Credit Information Company of India
  • Penalty Amount: ₹2 lakh
  • Reason: Violation of provisions under the Credit Information Companies (Regulation) Act, 2005, and related rules.

Regulatory Implications

• The penalties indicate RBI’s strict approach toward regulatory compliance, particularly in the NBFC and credit information sectors.
• Companies operating in these sectors are expected to adhere strictly to RBI norms, and any deviations can lead to financial penalties or further regulatory scrutiny.

What This Means for the Financial Sector

• Increased Oversight: RBI continues to tighten regulatory measures to ensure transparency and stability in financial markets.
• Compliance Importance: Financial institutions, especially NBFCs and credit bureaus, must maintain strict compliance frameworks to avoid penalties.
• Consumer Protection: By enforcing such penalties, RBI ensures better financial governance and protection of consumer interests.

The penalties on JM Financial Products and Experian Credit Information Company serve as a reminder that RBI remains vigilant about regulatory compliance. Both NBFCs and credit bureaus must strictly adhere to financial regulations to avoid penalties and ensure consumer trust in the system.

4. ICRA: Securitised Asset Pools Under Pressure

Context:

The securitised asset pool is facing stress due to declining collections in collateral-free credit segments such as personal loans, microfinance, and small business loans, according to a report by ICRA.

Key Findings from ICRA’s Report

A. Decline in Collection Efficiency

• Microfinance loans: Collection efficiency dropped from 97% at the beginning of FY25 to 90% in Q3 FY25.
• Unsecured SME & Personal Loans: Collections have also weakened due to slow economic activity and overleveraging of borrowers.

B. Performance of Secured Loan Pools

• Housing Loans & Loans Against Property: Collection rates remain steady due to the critical nature of collateral and digital payment adoption.
• Vehicle Loans: Marginal decline in Q3 FY25, but still stable.
• Secured SME Loans: Collection efficiency in the range of 91% to 104% in the first nine months of FY25.

Causes for Concern

• Economic Slowdown: A decline in business activity is affecting borrowers’ ability to repay loans.
• Overleveraging of Borrowers: Many borrowers have taken multiple loans, increasing default risks.
• Upcoming Regulations: Stricter microfinance lending norms from April 2025 may limit disbursements, increasing stress on highly leveraged borrowers.

Credit Risk Outlook

• Unsecured Loan Pools: High risk due to falling collections and borrower distress.
• Secured Loan Pools: Better performance due to collateral backing and digital collections.
• Microfinance Loans: Signs of improvement from December 2024, but further stress expected in Q1 FY26 due to stricter regulations.

The declining collection efficiency in unsecured loans poses a challenge for financial institutions and securitisation investors. Secured loans remain stable, but microfinance and small business loans may face further stress as new regulations take effect.

5. Unpublished Price-Sensitive Information (UPSI)

Context:

The Securities and Exchange Board of India (SEBI) has expanded the scope of Unpublished Price Sensitive Information (UPSI) to include:

• Proposed fundraising activities.
• Agreements impacting management or control of a company.
• Corporate restructuring plans.
• One-time bank settlements.

Objective of the Amendment

• Ensures greater regulatory clarity, certainty, and uniform compliance.
• Strengthens insider trading regulations to prevent unfair market practices.

Implementation

• SEBI issued a notification on March 11, 2025, amending Insider Trading Regulations.
• Companies must now ensure stricter compliance and disclosure norms for these activities.

Unpublished Price-Sensitive Information (UPSI)

This regulatory update aims to enhance transparency and protect investors by broadening the definition of UPSI, thereby reducing the risk of insider trading and market manipulation.

Definition of UPSI

UPSI refers to non-public information that, if disclosed, could materially affect a company’s stock price. It is governed by the SEBI (Prohibition of Insider Trading) Regulations, 2015, preventing the misuse of confidential corporate data for unfair trading advantages.

Key Characteristics of UPSI

• Non-Public Nature – Not available to the general public.
• Price Sensitivity – Can significantly impact stock prices.
• Specificity – Directly relates to a company or its securities.

Examples of UPSI

• Financial Results: Unannounced earnings reports or profit forecasts.
• Mergers & Acquisitions: Ongoing negotiations or confirmed deals.
• Dividends: Unanticipated changes in dividend payouts.
• Corporate Restructuring: Stock splits, bonus issues, or buybacks.
• Management Changes: Sudden CEO resignations or major leadership shifts.
• Litigation & Regulatory Actions: Legal proceedings affecting financial health.

Importance of UPSI

• Ensures Market Integrity – Prevents unfair trading advantages.
• Promotes Fair Trading Practices – Prevents exploitation of confidential information.
• Regulatory Compliance – Avoids legal penalties and reputational damage.

Regulatory Framework Governing UPSI

• Controlled Communication: UPSI can be shared only for legitimate purposes.
• Trading Restrictions: Insiders cannot trade securities while in possession of UPSI.
• Mandatory Code of Conduct: Companies must maintain strict internal compliance mechanisms.
• Transparent Disclosure Requirements: Timely public disclosure of UPSI is required.

Consequences of UPSI Mismanagement

• Statutory Penalties: Fines up to ₹25 crore or three times the illegal profit.
• Reputational Damage: Loss of investor trust and credibility.
• Criminal Liability: Insider trading can lead to imprisonment (up to 10 years).

Best Practices for UPSI Management

• Restricted Access: Limit UPSI access to necessary personnel.
• Training & Awareness: Educate employees on compliance rules.
• Monitoring & Auditing: Implement surveillance systems to track UPSI usage.
• Proactive Disclosures: Ensure timely public announcements to maintain transparency.

Proper UPSI management is crucial for market integrity, fair trading, and regulatory compliance. Companies must adopt strict controls and ethical policies to prevent insider trading and protect investor confidence.

Economy

1. Food Inflation in India

Decline in Inflation Rates

• Overall CPI-based inflation fell to 3.61% in February, the lowest since July last year.
• Food inflation dropped to 3.75%, the lowest since May 2023.
• The decline follows a peak of 10.87% in October 2023, which had complicated RBI’s monetary policy.

Increased Agricultural Output

• Kharif food grain production rose by 7.9%; rabi production by 6%.
• Record output projected for rice, wheat, maize, and pulses like millet, tur, and gram.
• Oilseeds production grew by 21% in kharif and 2% in rabi.
• Horticultural crops production estimated at 362.09 million tonnes, a 2.07% increase from 2023-24.
• Agriculture & allied activities expected to grow by 4.6% in FY25, up from 2.7% in FY24.

Policy Implications

• RBI projects retail inflation at 4.2% in FY26, down from 4.8% in FY25.
• Food inflation averaged 8.4% in 2024, significantly impacting household consumption.
• Higher agricultural output could boost overall economic growth and demand.

Long-Term Agricultural Challenges

• Extreme weather & climate change remain key risks.
• High price disparities between farm gate and consumer prices.
• Storage & logistics issues lead to crop spoilage.
• Poor rural infrastructure affects supply chain efficiency.

The Road Ahead

• Investment in agricultural supply chains is crucial to reducing long-term food price volatility.
• Policy measures should address market access, storage facilities, and rural connectivity.
• While inflation control is positive, long-term agricultural resilience remains a priority.

The decline in food inflation, driven by strong agricultural output, is a positive development for India’s economy. However, structural reforms are necessary to sustain this trend and mitigate future risks.

2. India’s Economic and Financial Trends

Context:

India’s economy and financial markets present a mixed picture based on three key data points: January’s industrial production, February’s retail inflation, and the performance of mutual funds in February.

Retail Inflation and Its Implications

• February’s retail inflation fell to 3.61%, a seven-month low, signaling easing price pressures.
• Food inflation, a major component of household expenses, declined to 3.75%, the lowest in nearly two years, down from 10.87% in October 2024.
• The drop in inflation is a positive sign for policymakers, as it supports the government’s 6.5% GDP growth target for FY 2025.
• RBI’s 4% inflation target is now within reach, making a repo rate cut more likely to ease the ongoing liquidity squeeze in financial markets.

Industrial Production

• January’s industrial production grew by 5%, an eight-month high, up from 3.55% in December.
• Growth was driven by primary, intermediate, infrastructure, and construction goods, indicating sustained demand in core sectors.
• This signals strong fundamentals in the real economy, despite concerns in financial markets.

Financial Market Volatility and Mutual Fund Trends

• Retail investors pulled back from equity markets, leading to a 27% decline in MF inflows in February.
• Stock market returns have declined for four consecutive months, triggering investor caution.
• New Systematic Investment Plans (SIPs) dropped to 44.6 lakh, the lowest in FY 2025.
• Despite this, market volatility appears temporary, as liquidity injections by the RBI (₹2 trillion) aim to stabilize financial markets.

RBI’s Monetary Policy Response

• February 7 Repo Rate Cut
  • Reduced from 6.50% to 6.25% (first cut in five years).
  • Aimed at boosting capital flows and economic activity.
• Liquidity Injection Measures
  • ₹1.7 trillion liquidity crunch due to foreign investor outflows.
  • RBI conducted two dollar/rupee swap auctions and plans a third, expected to inject over ₹2 trillion into the banking system.

Way Forward

• Encouraging signs in the real economy: Lower inflation and higher industrial production suggest stability and resilience.
• Concerns in financial markets: Investor sentiment remains uncertain, but RBI interventions aim to restore confidence.
• Short-term turbulence, long-term optimism: While market volatility is concerning, the underlying economic strength makes the impact manageable.

Facts To Remember

1. Jio Fin taps debt market with debut commercial paper issue

Jio Finance,a whollyowned unit of Jio Financial Services, has tapped the debt market with its maiden commercial paper (CP) issuance, ahead of its debut bond sale later this month, three merchant bankers said.

2. SBI to set up AI, fintech project finance unit

State Bank of India, the country´s largest lender, is setting upa dedicated unit to manage project financing solutions for “newagee industries” such as artificial intelligence, ecommerce, and fintech, according toa senior executive.

3. India has taken the lead in providing finance to renewable energy projects: RBI Governor 

RBI Governor Sanjay Malhotra said that India has taken the lead in providing finance to renewable energy projects by including them in ‘priority sector lending’ to accelerate the country’s transition to a low carbon economy in the fight against climate change. 

4. Centre plans to turn North-east into next saffron hub

Union Minister of State (Independent Charge) for Science and Technology Jitendra Singh today said that Northeast is a key driver for India to realise the vision of Viksit Bharat and the region will also become the country’s next saffron hub.

5. UNSC agrees to condemn Syria violence, say diplomats

The United Nations Security Council has agreed to a statement condemning widespread violence in Syria’s coastal region and calling on Syria’s interim authorities to protect all Syrians, regardless of ethnicity or religion, diplomats said yesterday.

6. Govt announces 1 billion dollar fund for creators’ economy, ahead of WAVES 2025

Union Information and Broadcasting Minister Ashwini Vaishnaw has announced a 1 billion-dollar fund for the creator’s economy as part of the World Audio-Visual and Entertainment Summit (WAVES) 2025.