Daily Current Affairs (DCA) 18 March, 2025

Daily Current Affairs Quiz
18 March, 2025

International Affairs

1. India Strengthens Defence Ties with US, New Zealand, and Australia

Context:

India is intensifying defence cooperation with key Western allies the US, New Zealand, and Australia all part of the Five Eyes intelligence-sharing alliance (alongside Canada and the UK). This reflects India’s strategic positioning to counter China’s influence in the Indo-Pacific and Indian Ocean regions.

• Key Developments
  • India–New Zealand Agreement
    • Signed a new pact to institutionalize defence relations.
    • Focus on joint military exercises, staff training, and naval port calls.
    • New Zealand expressed interest in joining India’s Indo-Pacific Oceans Initiative, strengthening collective maritime security efforts.
    • Prime Minister Modi raised concerns about pro-Khalistani elements in New Zealand, indicating India’s assertive diplomatic approach.
  • India–US Engagement
    • Defence Minister Rajnath Singh met US Director of National Intelligence Tulsi Gabbard.
    • Discussions focused on defence innovation, niche technologies, supply chain integration, military exercises, and information-sharing, particularly in the maritime domain.
    • This meeting builds on prior discussions between Modi and Trump, showing consistent progress in defence and strategic cooperation.
  • India–Australia Defence Talks
    • The 9th edition of defence policy talks focused on maritime domain awareness, information-sharing, and defence industry collaboration.
    • The engagement signals continued commitment to maintaining stability and security in the Indo-Pacific.
• Geopolitical Implications
  • India is positioning itself as a central player in regional security by deepening relations with Four of the Five Eyes members.
  • The emphasis on maritime cooperation suggests that India is proactively safeguarding strategic sea lanes in response to China’s growing naval assertiveness.
  • Collaboration on defence technologies and supply chains indicates long-term strategic alignment with Western allies, reducing dependency on traditional defence suppliers and increasing self-reliance.

India’s intensified defence diplomacy with the US, New Zealand, and Australia highlights its proactive strategy to enhance maritime security, strengthen defence capabilities, and counter China’s regional influence. These engagements also reflect India’s broader ambition to become a key security partner in the Indo-Pacific and a leader in fostering multilateral cooperation in the region.

Source: BS

2. India–New Zealand Strengthen Trade and Digital Cooperation

• Trade and Economic Engagement
  • India and New Zealand have revived talks on a Free Trade Agreement (FTA) after a 10-year hiatus, with both leaders committing to expedite negotiations.
  • India’s merchandise exports to New Zealand in 2023–24 stood at $535 million, while imports were $335 million, indicating modest but growing bilateral trade.
  • New Zealand ranks 59th in terms of historical FDI in India, with only $87.2 million invested since 2000, highlighting untapped potential.
  • Both leaders emphasized leveraging complementary strengths and addressing mutual concerns for balanced growth in trade and investment.
• Key Developments and Agreements
  • Agreement to initiate discussions for enhancing cooperation in digital payments, reflecting the growing global interest in India’s robust fintech ecosystem.
  • Signing of the Authorised Economic Operators Mutual Recognition Arrangement to ease the movement of goods under the Customs Cooperation Arrangement (2024).
  • Updated bilateral air services agreement with a push for direct, nonstop flights between the two countries to enhance people-to-people and business connectivity.
  • Multiple Memorandums of Understanding (MoUs) were signed to further institutionalize cooperation across sectors.
• Focus on Future Technologies
  • Both economies identified opportunities for collaboration in artificial intelligence, quantum technology, biotechnology, and advanced manufacturing.
  • These areas indicate a shared focus on high-tech industries, aligning with India’s push for innovation and New Zealand’s interest in tech-driven growth.
• Strategic Intent
  • The bilateral emphasis on direct trade, investment growth, digital infrastructure, and aviation connectivity suggests a long-term effort to strengthen New Zealand’s engagement in South Asia.
  • New Zealand’s participation in platforms like the Raisina Dialogue shows growing diplomatic and economic interest in India as a regional leader and strategic partner.

The renewed engagement between India and New Zealand, marked by trade negotiations, digital payments cooperation, and future-oriented tech collaboration, signals a concerted effort to transform their modest trade ties into a strategic and multifaceted partnership. With a focus on digital innovation, supply chain facilitation, and direct connectivity, both nations are well-positioned to capitalize on complementary strengths for mutual economic and strategic gains.

3. India–U.S. Trade Talks

Context:

Commerce Secretary Sunil Barthwal stated that India and the U.S. are “proactively engaged” in discussions to boost bilateral trade.

Recent Developments

• Commerce Minister Piyush Goyal’s visit to the U.S. (March 4–6) included meetings with:
  • U.S. Trade Representative Jamieson Greer
  • U.S. Commerce Secretary Howard Lutnick
• Barthwal described these talks as “positive” and said discussions will continue.

Mission 500

• Talks are happening within the framework of Mission 500, aiming to:
  • Increase bilateral trade from $200 billion to $500 billion
  • Finalize a multi-sectoral bilateral trade agreement

Tariffs and Tesla

• Mr. Barthwal declined to comment on
  • U.S. President Donald Trump’s plan to impose reciprocal tariffs from April 2
  • Tariffs on premium U.S. electric vehicles, including Tesla
  • Whether Tesla would receive further tax incentives beyond the existing export policy

Electric Vehicle Policy

• Scheme to Promote Manufacturing of Electric Passenger Cars:
  • Offers 15% customs duty for manufacturers setting up production in India
  • Notified in March 2024

U.S. Position

• Donald Trump’s remarks:
  • Building a Tesla factory in India to avoid tariffs would be “unfair” to the U.S.
  • Highlighted India’s high car import duties during PM Modi’s visit last month
  • Agreed to continue working towards an early trade deal

Source: TH

4. U.S. Withdrawal from the Ukraine War Crimes Prosecution Group

Context:

The U.S. Justice Department has formally notified European officials of its decision to withdraw from the International Centre for the Prosecution of the Crime of Aggression (ICPA) by the end of March 2025.

Key Highlights:

• About ICPA
  • The ICPA was established in 2023 under the Biden administration to pursue legal accountability for Russian leaders including President Vladimir Putin and their allies for crimes of aggression against Ukraine.
• Shift in U.S. Policy
  • The withdrawal reflects a marked shift under the Trump administration, moving away from Biden’s active commitment to holding Russia accountable on an international legal platform.
  • The move signals a recalibration of U.S. foreign policy priorities, potentially indicating reduced emphasis on multilateral legal efforts and war crimes prosecution.
• Impact on Global Justice Efforts
  • This withdrawal could weaken international cooperation aimed at prosecuting top Russian officials and may dampen morale among allied countries seeking accountability for the invasion of Ukraine.
  • Eurojust President Michael Schmid’s letter confirms the U.S. exit, causing concern about diminished global leadership from Washington in prosecuting aggression-related crimes.
• Curtailing Domestic War Crimes Efforts
  • The Trump administration is also reducing the operations of the War Crimes Accountability Team, a unit created in 2022 to support investigations of Russian atrocities in Ukraine.
  • This team, established by former Attorney General Merrick Garland, was seen as a symbol of U.S. commitment to international justice. Its rollback may further signal retreat from active engagement in war crimes prosecution.
• Broader Strategic Implications
  • The decision may embolden adversaries like Russia and its allies, who could perceive the reduced American legal pursuit as an easing of pressure.
  • It could also strain transatlantic ties, particularly with European allies that remain committed to international prosecution efforts through platforms like Eurojust.
  • Conversely, this pivot might suggest that the U.S. prefers to focus on bilateral diplomatic and strategic measures rather than legal multilateralism under Trump’s foreign policy approach.

While this decision may align with Trump’s broader foreign policy strategy of recalibration and reduced international legal entanglements, it risks undermining global accountability initiatives, weakening collective pressure on Russia, and causing friction with European allies committed to holding aggressors accountable.

Source: BS

5. U.S. Launches Strikes on Houthis in Yemen

Context:

The US has launched a “decisive and powerful” wave of air strikes on Houthi rebels in Yemen, President Donald Trump has said, citing the group’s attacks on shipping in the Red Sea as the reason.

Key Objectives

• President Trump’s administration aims to succeed where past administrations failed by:
  • Delivering overwhelming military force.
  • Directly targeting Houthi leadership (something avoided under the Biden administration).
  • Sending a clear deterrence message to Iran and the wider region.
  • Ensuring freedom of navigation in the Red Sea, a critical global shipping corridor.

Nature of the Campaign

• Described by officials as the start of a sustained, unrelenting campaign potentially lasting weeks.
• U.S. strikes focused on:
  • Missile launchers being moved to attack shipping lanes.
  • Homes of Houthi leaders in San’a and Sa’dah.

Houthi Response

• Houthi leader Abdul-Malik al-Houthi vowed retaliation, including missile strikes on U.S. warships.
• Houthis launched a 12-hour drone and missile attack aimed at the USS Harry S. Truman carrier strike group.
  • U.S. fighter jets intercepted drones; the missile fell harmlessly into the sea.

Who are the Houthis?

• The Houthis are a Yemeni rebel group officially known as Ansar Allah.
• Origin:
  • They emerged in the 1990s in Yemen’s northern Saada province as a Shia revivalist movement.
• Key Characteristics:
  • Follow the Zaydi Shia branch of Islam.
  • Supported by Iran, though both parties deny direct control.
• Current Status:
  • Control large parts of northern Yemen, including the capital Sanaa, since 2014.
  • Involved in an ongoing civil war with a Saudi-led coalition supporting Yemen’s internationally recognized government.

Why are they attacking ships?

Solidarity with Palestinians:

• The Houthis claim they are targeting ships in the Red Sea and Gulf of Aden in protest against Israel’s military actions in Gaza.
• They say these attacks are a show of support for Palestinians and are directed toward vessels linked to Israel, the US, or the UK.

Wider Anti-West and Anti-Israel Stance:

• The Houthis are part of the “Axis of Resistance”, alongside Iran, Hezbollah, and other groups that oppose Israel and Western influence in the Middle East.

Pressure Tactics:

• By threatening vital maritime trade routes, they aim to increase global pressure on Israel and its allies.
• The Red Sea is a critical maritime chokepoint, with about 15% of global trade passing through it, including oil and LNG shipments.

Impact of the Attacks

• Dozens of merchant ships have been targeted with missiles, drones, and small boats since November 2023.
• So far:
  • 2 ships sunk
  • 1 vessel seized
  • 4 crew members killed
• Major shipping companies are rerouting via southern Africa, causing longer transit times and higher shipping costs.
• The Suez Canal — vital for trade between Asia and Europe — has seen drastically reduced use by US-flagged and other vessels.

Response from the West and Israel

• US and British air strikes have targeted Houthi military positions repeatedly, but attacks continue.
• Israel has launched air strikes against Houthi positions in retaliation for hundreds of missiles and drones launched from Yemen.
• Former US President Donald Trump has threatened overwhelming military action if the attacks persist, warning both the Houthis and Iran.

Iran’s Position

• Iran is believed to be a key backer of the Houthis, supplying weapons and technology.
• Iran’s Foreign Minister dismissed US threats and accused Washington of hypocrisy, urging the US to stop supporting Israel’s actions in Gaza and stop harming the Yemeni people.

Historical Context

• The Houthis, initially a tribal insurgency, took over northern Yemen and San’a in 2014, triggering ongoing civil war.
• Despite Saudi-led and U.S.-backed airstrikes, the Houthis have survived and strengthened, supported by Iranian arms and training.
• Since late 2023, the Houthis have attacked over 100 commercial vessels, sinking two and killing four sailors.

Strategic Risks and Challenges

• Experts warn of a vicious cycle of escalation.
• The Houthis may target:
  • U.S. bases in Djibouti and the UAE.
  • Saudi Arabia, to pressure Washington indirectly.
• There are concerns that striking leadership could make the Houthis more unpredictable.

Regional Dynamics

• Iran’s allies in the region (Hamas, Hezbollah) are currently weakened.
• Iran denies direct control over the Houthis but threatens retaliation if attacked directly by the U.S.
• Disruptions in arms shipments to Yemen are ongoing, though Iran continues to use alternative smuggling routes.

Takeaways

• The U.S. appears to be addressing the Houthis as an independent threat, not just an Iranian proxy.
• The effectiveness of the campaign will depend on deterrence holding and whether the Houthis can regroup.
• The strikes could remove one of Iran’s last operational levers against the U.S. and Israel, but the Houthis are capable of acting autonomously.

Source: Mint & BBC

National Affairs

1. Pradhan Mantri Internship Scheme (PMIS) Mobile App

Context:

Fifteen days ago, on 6th July 2023, Finance Minister Nirmala Sitharaman launched the mobile application for candidates accessing the Pradhan Mantri Internship Scheme. She called upon more and more companies to join in the efforts to instill confidence in the youth of India, particularly those from Tier II and Tier III cities.

Scheme Coverage and Purpose

• The Pradhan Mantri Internship Scheme introduces young people to the workings of a real job with an internship to complete their practical training. The scheme has successfully made its way throughout the country to cover all 735 districts for greater reachability and inclusiveness.

Current Progress (Second Pilot Round)

• The second pilot phase is underway
  • In this pilot phase, 325 companies made the opportunity of sharing almost 118,000 internship opportunities.
  • Approximately 115,000 candidates have registered, and till date, more than 240,000 applications have been received.
  • And the last date of registration has now been extended to 31st March 2025, after which the candidates are expected to take their internships on or before 15th May 2025.

Extend in Industries

• CSR funding was never the standard for PMIS inclusion, but the government is considering an expansion of candidates outside the current top 500.
• Financially restrained, however, 49 additional companies not in the top 500 have expressed their willingness to join the PMIS consortium.

Key Highlights of the PMIS Mobile App

• Aadhaar based Face Authentication allowing smooth and secure registration.
• Personalized Dashboard for candidates to manage their applications and track changes in status.
• Real time alerts and notifications to keep the users up to date with new opportunities.
• Users have access to a dedicated support team for assistance and guidance.

Indeed, the PMIS mobile app comes as an instrument for achieving the objective of imparting basic job market exposure to youth. Again, with continuous support from the industry and government, this initiative would eventually propel the process of nurturing a healthy and competent workforce all over India.

2. PM Surya Ghar Muft Bijli Yojana (PMSGMBY)

Scheme Overview

• Launched: February 2023
• Goal: Solar power supply to 10 million homes by March 2027
• Subsidies Offered
  • ₹30,000 for 1 kW system
  • ₹60,000 for 2 kW system
  • ₹78,000 for 3 kW and above
• Key Benefits
  • Lower electricity bills
  • Option to sell excess power back to the grid

Funding and Application Response

• Budgetary Allocations
  • Initially ₹6,250 crore (2024-25), revised to ₹11,100 crore
  • Further increased to ₹20,000 crore (2025-26)
• Demand
  • 4.73 million applications submitted
  • Government simplified the application process through an online portal and streamlined financing

Performance Status

• As of March 10, 2025: Only 10% of the target achieved
• Current Installation Rate: ~70,000 installations/month
• Projection: At this pace, only 30% of the target likely by end of 2026
• Geographical Skew:
  • Gujarat and Maharashtra account for two-thirds of installations
  • Other states show significantly lower adoption

Challenges Identified

• Quality and Standardization Issues
  • Entry of inexperienced installers
  • Variation in module sizes and substandard equipment
  • Ignoring mandatory quality tests (e.g., net metering module in Kerala)
• Discom (Distribution Company) Resistance
  • Discoms fear financial strain from absorbing daytime-only solar power
  • Reluctance to adjust scheduling and integrate solar into grids

Recommendations for Improvement

• Set Clear Quality Standards:
  • Ministry of New and Renewable Energy should publish standardized component requirements
• Discom Reforms:
  • Incentivize discoms to actively participate in solar power absorption
• Even Implementation Across States:
  • Push for wider, more balanced adoption beyond Gujarat and Maharashtra
• Mission-Mode Urgency:
  • Apply the same administrative focus used for Swachh Bharat and Har Ghar Nal Se Jal
• Focus on Awareness and Consumer Trust:
  • Strengthen consumer confidence by ensuring installation quality and long-term performance

The PMSGMBY is a high-potential initiative with robust funding and public interest. However, it risks underperforming due to solvable bottlenecks around quality assurance, discom cooperation, and uneven implementation. With corrective action and administrative urgency, the scheme can play a pivotal role in reducing India’s dependence on thermal power and contribute to climate resilience in an increasingly warming environment.

3. Rise in Seasonal Influenza Cases

Context:

Recent reports indicate a rise in seasonal influenza cases in the Delhi-NCR region. Predominant strains this season: Influenza A and Influenza B.

Influenza

• Influenza (flu) is a contagious respiratory illness caused by viruses.
• Often confused with the common cold, but differs in:
  • Severity and viral cause
  • Symptoms: sudden cough, sore throat, high fever, muscle pain, body aches, headaches, fatigue, stuffy nose
• Can range from mild to severe illness, sometimes leading to hospitalisation or death if treatment is delayed.

Seasonality in India

• Two peaks of seasonal influenza in India
  • January to March
  • August to October (during the latter part of the southwest monsoon)

Surveillance and Preparedness

• India has near real-time surveillance of:
  • Influenza-like illness (ILI)
  • Severe Acute Respiratory Infections (SARI)
• Surveillance was further strengthened post COVID-19.
• A nationwide network of diagnostic laboratories supports this system.
• Surveillance helps track circulating strains and align vaccination efforts accordingly.

Key Public Health Challenge

• Governments must not only monitor but anticipate outbreaks and focus on preparedness.
• Priority attention needed for high-risk groups:
  • Children
  • Senior citizens
  • People with chronic respiratory conditions

Vaccination

• Adult vaccination for influenza remains under-prioritised.
• Currently dependent on State governments for rollout and funding.
• Children’s vaccination is more widely accepted and supported.
• There is a need for targeted, impactful awareness campaigns, especially among high-risk groups.

4. Genetic Cause of Early Lung Cancer Relapse

Background

• Lung adenocarcinoma: Most common type of lung cancer, affecting even non-smokers.
• Current treatment: Targeted drugs known as EGFR tyrosine kinase inhibitors (TKIs) are used for patients with mutations in the EGFR gene.
• Challenge: Many patients eventually relapse due to therapy resistance.

Key Findings

Aspect	Details
Study Scope	Analyzed data from 483 lung cancer patients with EGFR mutations.
Discovery	Presence of mutations in certain tumor suppressor genes (TSGs) along with EGFR mutation increases risk of early relapse.
Survival Impact	– Patients with TSG mutations had an average survival of 51.11 months compared to 99.3 months for others. – Progression-free survival was also significantly shorter.
Identified Genes	A group of 17 tumor suppressor genes found to contribute to therapy resistance and early relapse.

Methodology

Process	Details
Genetic Sequencing	Performed on tumor samples from 16 patients before and after relapse to understand genetic evolution.
Liquid Biopsy	– Blood-based testing used to detect cancer DNA fragments. – 200 blood samples from 25 patients tracked over time using technology from One Cell Diagnostics.
Evolution Tracking	Found that mutations in the 17 TSGs were present at early stages and became dominant as treatment progressed.

Implications of the Study

• Personalized Treatment
  • Early detection of TSG mutations can help doctors tailor therapies to account for potential resistance.
  • May delay or prevent early relapse.
• Clinical Application:
  • Patients identified as high-risk could receive alternative or more aggressive therapy strategies.

Contributors and Support

Research Institutions: University of Delhi South Campus, Tata Memorial Centre (Mumbai), One Cell Diagnostics (Pune)

India

• Lung cancer in India (2022):
  • 81,748 new cases
  • 75,031 deaths (WHO data)

This study provides a critical genetic insight into why certain lung cancer patients relapse early. Early genetic profiling can potentially revolutionize treatment protocols and outcomes for lung adenocarcinoma patients.

Source: The Indian Express

Banking/Finance

1. FIA vs. SEBI

Context:

The Futures Industry Association (FIA), a global derivatives market body representing members ranging from clearing corporations to foreign portfolio investors, has voiced strong opposition to the Securities and Exchange Board of India’s (Sebi’s) proposed overhaul of open interest (OI) calculation and position limits for index futures and options (F&O).

SEBI’s Proposal (February 24, 2025)

• Objective
  • Bring back alignment between the F&O markets and cash markets
  • Reduce instances of ban of stocks
  • Strengthen risk management
• Key Changes Indicated
  • Change Open Interest (OI) calculation with the use of a delta adjusted (future equivalent) formula
  • Review market wide position limits
  • Introduce specific position limits for single stocks and index derivatives
• FIA’s Concerns
  • The Futures Industry Association (FIA) representing global derivatives players including clearing corporations and FPIs strongly opposes SEBI‘s proposals.
• Key Objections

Issue	FIA’s Concern
Liquidity Drain	Could lead to wider bid-ask spreads, reduce institutional participation, and undermine market depth.
Increased Trading Costs	Higher operational and compliance costs due to complex calculations and monitoring requirements.
Market Volatility	Restrictions may cause higher price swings and instability.
Price Manipulation Risks	Paradoxically, inefficiencies could increase the chance of price manipulation.
Operational Challenges	Delta-adjusted OI method is rare globally, adding significant complexity and error risk.
Position Limit Gaps	Potential loopholes, with large positions still possible in short-term out-of-the-money options.

Industry Pushback

Stakeholders	Likely Impact of SEBI’s Proposal
Traders	Face higher costs and reduced flexibility.
Market Makers	Possible liquidity constraints, leading to wider spreads and less competitive pricing.
Retail Investors	Increased costs and higher trading risks.
Institutional Investors	May pull back participation, harming market depth and efficiency.

What Is Open Interest?

Open interest is the total number of outstanding derivative contracts for an asset—such as options or futures that have not been settled. Open interest keeps track of every open position in a particular contract rather than tracking the total volume traded.

FIA’s Recommendations

• Rethink the proposed framework for OI calculation and position limits.
• Introduce a more practical threshold:
  • EOD (End-of-Day) Net Future Equivalent limit of ₹7,500 crore.
• Focus on simplified, globally accepted practices rather than complex adjustments.

SEBI’s Justification (Regulator’s perspective)

• The proposals aim to
  • Align derivatives trading with the underlying cash market activity
  • Reduce manipulation-prone scenarios
  • Prevent stock ban instances

The SEBI-FIA standoff highlights a critical debate between tighter regulatory controls and maintaining market liquidity and efficiency. While SEBI’s intention is to strengthen the system, the FIA warns that poorly calibrated restrictions could end up destabilizing the very markets they aim to protect.

Source: BS

2. Futures and Options (F&O)

• Futures and Options are types of derivative contracts where two parties agree to buy/sell an underlying asset at a predetermined price on a future date.
• They help hedge market risks by locking in prices in advance.
• The underlying asset can be stocks, indices, commodities, ETFs, etc.

Key Differences Between Futures and Options

Aspect	Futures	Options
Obligation	Mandatory to buy/sell on the agreed date	Right (but not obligation) to buy/sell
Risk	Higher (both parties are liable to fulfill the contract)	Limited for buyer (only premium lost if not profitable)
Flexibility	Less flexible	More flexible (buyer can withdraw if unfavorable)

Types of Options

Option Type	What it Means
Call Option	Right to buy an asset at a predetermined price in the future
Put Option	Right to sell an asset at a predetermined price in the future

Who Should Invest in Futures & Options?

1. Hedgers

• Aim to reduce risk from price fluctuations.
• Example: A farmer fixes a price today for future crop sales to avoid losses if prices fall.
• Physical trade is common in commodities.

2. Speculators

• Predict price movements to profit from market volatility.
• Take long positions if expecting prices to rise, or short positions if expecting prices to fall.
• Generally opt for cash settlement rather than physical delivery.

3. Arbitrageurs

• Profit from price differences between markets.
• They buy in one market and sell in another to benefit from temporary price imbalances.
• Their activity helps stabilize prices and eliminate inefficiencies.

Leverage in Futures and Options

• Traders use leverage, meaning they only deposit a small percentage (margin) to control larger positions.
• Can amplify both profits and losses, making proper risk management essential.

Risks Involved

• High risk due to unpredictable price movements.
• Requires a deep understanding of:
  • Stock market dynamics
  • Underlying asset behavior
  • Economic conditions and news

What Is Open Interest?

Open interest is the total number of outstanding derivative contracts for an asset—such as options or futures that have not been settled. Open interest keeps track of every open position in a particular contract rather than tracking the total volume traded.

• Futures and options are powerful financial tools for hedging, speculating, and arbitrage.
• They can generate substantial returns but come with significant risks, requiring skill and market experience.

3. Statutory Liquidity Ratio (SLR)

• SLR is the minimum percentage of a commercial bank’s net demand and time liabilities (NDTL) that it must maintain in the form of:
  • Liquid cash
  • Gold
  • Approved government securities
• These reserves are not kept with the RBI, but maintained by the banks themselves.
• The SLR is set and regulated by the RBI under Section 24(2A) of the Banking Regulation Act, 1949.

Purpose and Importance of SLR

• Monetary Policy Tool: Helps RBI regulate liquidity, credit growth, and inflation.
• Inflation Control:
  • Increasing SLR reduces the availability of funds with banks, curbing inflation.
  • Decreasing SLR frees up funds for lending, boosting economic growth.
• Government Debt Management:
  • Banks buy government securities to meet SLR requirements, helping the government raise funds.
• Earning Interest:
  • Unlike CRR, the portion kept as SLR in government securities earns interest income for banks.

Difference Between SLR and CRR

Aspect	SLR (Statutory Liquidity Ratio)	CRR (Cash Reserve Ratio)
Definition	Minimum percentage of deposits to be kept in liquid assets by the bank itself	Minimum percentage of deposits to be kept as cash with RBI
Form	Cash, gold, or approved government securities	Only cash
Held With	Maintained by the bank in its own vaults	Maintained with RBI
Interest	Banks earn interest on government securities kept as SLR	No interest is paid on CRR reserves
Flexibility	Used to manage liquidity and support government borrowing	More actively used for controlling liquidity and inflation

Overview

• SLR = % of deposits banks must hold in liquid assets.
• Helps control inflation, liquidity, and supports government debt.
• Higher SLR = Lower lending capacity = Inflation control.
• Lower SLR = More funds for loans = Boost to growth.
• Difference from CRR: SLR earns interest (held with banks), CRR does not (held with RBI).

4. RBI Governor Urges Banks and NBFCs to Strengthen Customer Grievance Redress

Key Highlights

• Sharp Criticism of Rising Complaints
  • RBI Governor Sanjay Malhotra expressed serious concern over the increasing number of customer complaints.
  • Urged regulated entities (banks and NBFCs) to strengthen grievance redress systems urgently.
  • Emphasized that senior leaders, including CEOs and MDs, should dedicate time each week to focus on customer service.
• Data on Complaint Surge
  • Complaints under the RBI Integrated Ombudsman Scheme grew at nearly 50% annually over the past two years.
  • 934,000 complaints were received in FY24.
  • RBI Ombudsman processed 294,000 complaints in FY24, up 25% from FY23.
  • Nearly 57% of complaints required formal intervention or mediation, highlighting the inefficiency of current systems.
  • Scheduled commercial banks received over 10 million complaints in FY24.
• Directives to Regulated Entities (REs)
  • Senior management, zonal heads, and branch managers must allocate time weekly or daily to grievance handling.
  • The goal should be not only to resolve complaints but to ensure that similar issues do not arise repeatedly.
  • Large REs should have multi-level grievance redress systems, allowing escalation of unresolved issues to senior decision-makers.
• Areas Identified for Improvement
  • KYC Documentation
    • Once a customer submits documents, they should not be repeatedly asked for the same information.
    • Urged immediate enablement of Central KYC Records Registry (CKYCRR) integration across branches and outlets.
  • Digital Fraud
    • Raised alarm over the increasing number of digital fraud cases affecting unsuspecting customers.
  • Misselling and Aggressive Recovery Practices
    • Called for more ethical practices and customer protection measures across financial institutions.
• Potential Role of Artificial Intelligence (AI)
  • Stressed that AI can play a transformative role in grievance redress.
  • Suggested integrating AI at every stage of the grievance process, from lodging complaints to resolution.
  • AI could help create seamless, efficient, and data-driven grievance systems.

The RBI Governor’s remarks serve as a wake-up call to all regulated financial institutions. As customer expectations rise and digital transactions become more prevalent, banks and NBFCs must prioritize customer service and grievance handling.

5. RBI Revises State Bond Auction Amount

Key Highlights

• Revised Auction Size
  • The Reserve Bank of India revised the scheduled state bond auction amount for to ₹52,120 crore, up from the previously planned ₹40,120 crore.
• Previous Auction Recap
  • In the previous auction, 20 states raised a total of ₹49,522 crore through debt sales.
• Top Borrowing State
  • Out of the 13 states participating in the current auction, Karnataka plans to borrow the highest amount of ₹7,000 crore.
• Bond Yield Trends
  • In the last auction, the cutoff yield on 10-year state bonds was in the range of 7.18% to 7.27%.
  • The rise in yields was attributed to heavy supply and a lack of demand from long-term investors.
  • Banks refrained from aggressive purchases, primarily due to ongoing liquidity constraints.

The pressure on yields due to oversupply and weak demand signals challenges for state governments, especially with banks facing liquidity issues. Market participants will be closely watching future auctions and investor appetite for state debt amid tightening financial conditions.

Source: BS

6. India’s Retail Options Trading Plunge

Context:

Retail options trading on India’s National Stock Exchange (NSE) has plummeted to a three-year low.

• 30-day rolling average of options contracts by individual investors down 77% since November 2023.
• Derivatives traders at a 17-month low in January 2024.
• Market turnover on major exchanges has sharply declined.

Cause: SEBI’s Regulatory Measures

• Securities and Exchange Board of India (SEBI) introduced strict curbs to control speculative retail trading.
• Regulations included
  • Limiting weekly options,
  • Increasing lot sizes (making it costlier to trade),
  • Other phased restrictions to protect investors.

Impact on the Market

• Retail-driven options boom has ended India was the world’s largest options market before the crackdown.
• Lower trading volumes have led to
  • Higher option prices,
  • Wider bid-ask spreads (increased costs for traders).

Regulatory Justification & Market Expert Views

• SEBI‘s study revealed billions in retail investor losses, prompting intervention.
• Vivek Sharma (Estee Advisors):
  • Past years were “abnormal” for India’s derivatives market.
  • SEBI’s objectives have been largely achieved.
  • Retail investors were losing too much money, and the trend was unsustainable.

SEBI’s crackdown has successfully curbed speculative retail trading in derivatives. Long-term effects on India’s broader financial markets and institutional trading remain to be seen.

7. Paytm Money Receives SEBI Research Analyst Certification

Context:

Paytm Money has received its Research Analyst registration certificate from SEBI, as per exchange filings.

Significance

• This certification allows Paytm Money to
  • Provide research reports
  • Offer investment analyses to both retail and institutional investors

Company’s Stand

• Paytm Money stated that this milestone:
  • Aligns with its objective to expand offerings in the investment ecosystem
  • Aims to enhance user experience
  • Will deliver expert-backed insights for investors

Why Was the Paytm Payments Bank Banned ?

Since the commemoration of PPBL, many notices have been issued to the company from RBI. The company faced many issues like failing with the KYC guidelines and suspending the new accounts. Here are the major reasons: 

• Money-laundering concerns: The total value of transactions happening goes much beyond the regulatory limits. 
• Dormant accounts: Out of 35 crore e-wallets, 31 crore were dormant accounts and only 4 crore remaining had some to no activity. This high number of dormant accounts can mean an increase in the mule accounts. 
• Irregularities in KYC: There were major faults in KYC which would put the users at huge risk. 
• Anti-money laundering violations: In 2021, RBI detected violations of anti-money laundering violations and the bank was warned about it but continued to persist. 
• Incomplete compliance: The compliance submitted by the bank was faulty and incomplete in many instances. 
• Audit: RBI instructed PPBL to onboard new clients in 2022 and appoint an external firm to do a comprehensive audit of the system. Many accounts were ceased by various digital agencies across the countries as they were used in committing digital frauds. 

What’s Next

• The new research and advisory services will soon be:
  • Integrated into the Paytm Money app

8. SBI Shelves Bond Issuance Plans for Current Fiscal

Context:

State Bank of India (SBI) has decided to defer its plan to raise ₹15,000 crore through bond issuance in the current fiscal year (ending March).

Reason for Deferral

• High bond yields despite
  • A 25 bps policy repo rate cut by the Reserve Bank of India (RBI)
  • Significant liquidity infusion by the RBI
• Yields on AAA-rated 10-year corporate bonds have risen by 15 basis points since early February.

Planned Fundraising

• Originally intended to raise
  • ₹5,000 crore via Basel III-compliant additional Tier-I perpetual bonds
  • ₹10,000 crore via 15-year infrastructure bonds

Current Decision

• SBI has:
  • Assessed its asset-liability position
  • Chosen to postpone fundraising to the next fiscal year (starting April)
• The bank will reassess funding needs at that time.

Source: BL

9. RBI Governor Advocates AI Use

Context:

RBI Governor Sanjay Malhotra urged central bank-regulated entities to leverage artificial intelligence (AI) for internal controls to address consumer complaints related to misselling and aggressive practices.

Complaint Data

• 95 commercial banks in India received over 10 million customer complaints in FY 2023-2024.
• Malhotra warned this number could grow with an expanding customer base and product suite if proactive steps are not taken.

Suggested AI Applications

• Data Analysis & Early Detection
  • Use AI to analyse large volumes of data for detecting spikes in:
    • ATM failures
    • Erroneous charges
  • Enable preemptive alerts for such issues.
• Customer Interaction Tools
  • Implement AI-driven chatbots and voice recognition to overcome language barriers in India’s linguistically diverse population.

Human Capital Investment

• Malhotra emphasized the need for financial institutions to invest in human capital to:
  • Improve customer service
  • Strengthen grievance redressal mechanisms

10. Mutual Funds Mix Debt

Context:

Mutual funds are repackaging some of their existing debt schemes into Fund of Funds (FoFs). This move leverages tax benefits announced in the previous year’s budget. These restructured funds will now invest in both bonds (fixed income) and arbitrage strategies.

Structure of New Schemes

• The restructured funds will
  • Invest slightly less than 65% of their corpus in fixed income instruments.
  • Invest the balance in arbitrage (simultaneous buy and sell of shares and futures to exploit price differentials).
• Gains from these schemes, if held for more than 24 months, will be taxed as long-term capital gains (LTCG) at 12.5%.
• In contrast, plain debt schemes are taxed at individual tax slabs (up to 30% for high-income individuals and corporates).

Key Fund Changes

Existing Fund Name	New Name
Kotak All Weather Debt FoF	Kotak Income Plus Arbitrage FoF
Bandhan All Seasons Bond Fund	Bandhan Income Plus Arbitrage Fund of Fund
Axis All Seasons Debt Fund of Funds	Axis Income Advantage Fund of Funds
ABSL Active Debt Multi Manager FoF	ABSL Debt Plus Arbitrage FoF

• Kotak, Aditya Birla, Bandhan: Invest primarily in their own fund house’s debt schemes.
• Axis Mutual Fund: Uses a multi-strategy approach, investing in debt schemes of multiple AMCs.

Expert Views

• Deepak Agrawal, CIO (Debt), Kotak Mahindra AMC: A mix of debt and arbitrage could offer higher returns with tax efficiency compared to pure debt schemes and potentially outperform pure arbitrage funds over 2-3 years.
• Devang Shah, Head of Fixed Income, Axis Mutual Fund: The strategy follows dynamic allocation across short-to-long duration bonds based on macroeconomic views. Currently, the fund is positioned with high duration expecting future rate cuts.

Costs and Trade-offs

• These schemes come with higher expenses compared to traditional debt products due to the double-layered expense ratio (main fund + underlying funds).

Mutual funds are creatively adapting to tax changes by blending debt and arbitrage strategies in FoF structures. For wealthier investors and corporates, these funds present an opportunity for better post-tax returns than conventional debt schemes, though at a slightly higher cost.

Source: Economic Times

11. Short-Term Borrowings Likely to Get Cheaper for Indian Banks

Context:

Industry experts expect short-term borrowing costs (like Certificates of Deposit and Commercial Paper rates) to ease as early as next month. The expected drop is due to multiple liquidity infusion measures by the Reserve Bank of India (RBI). Lower borrowing costs should eventually lead to softer lending rates.

Central Bank’s Liquidity Actions

• RBI’s stance appears to have shifted from neutral to accommodative.
• Key liquidity measures
  • ₹4.1 lakh crore infused through Open Market Operations (OMO).
  • ₹1 lakh crore more planned through two OMO auctions in March.
  • $15.16 billion in dollar/rupee buy-sell swaps already auctioned.
  • Additional $10 billion in buy/sell swaps announced for March 2025.
  • The aggregate liquidity infusion via swaps could total around ₹2.15 lakh crore by the next quarter.

Impact on Rates

• The Weighted Average Call Rate (WACR) spiked to 6.81% in January, but fell to 6.21% by March 12.
• Three-month CD rates rose by 25-30 basis points in December, showing tightening liquidity.
• With these interventions, the banking system liquidity is expected to shift into surplus territory.

Additional Factors Adding to Liquidity

• RBI dividend transfers to the government are expected to further boost liquidity.
• Banks are also supported by existing Statutory Liquidity Ratio (SLR) and Cash Reserve Ratio (CRR) buffers.

Outlook

• Short-term rates are set to ease first, followed by gradual easing in broader lending rates.
• Rate cuts and surplus liquidity will be beneficial to borrowers and could lead to earlier-than-expected softening of bank lending rates.
• However, banks may see pressure on net interest margins (NIMs) in the short term.

12. Option Trading

• Option trading involves buying and selling options contracts, which give the right but not the obligation to buy or sell an underlying asset at a pre-agreed price (strike price) before or on a specified date (expiry date).
• The buyer pays a premium to the seller for this right.
• Options are derivatives, meaning their value is derived from the price of an underlying asset (stock, index, ETF, etc.).

How Does Options Trading Work?

• Buyers gain the right to exercise the option anytime before the expiration (American style) or on the expiration date (European style).
• Exercising is optional; if conditions aren’t favorable, the buyer can let the option expire, losing only the premium.
• Sellers (writers) are obligated to fulfill the contract if the buyer chooses to exercise.

Types of Options

Type	Meaning
Call Option	Right to buy the asset at a set price before expiry (if profitable).
Put Option	Right to sell the asset at a set price before expiry (if profitable).

Key Terms in Options Trading

Term	Definition
Premium	The cost paid by the buyer to the seller for the option contract.
Strike Price	The price at which the option can be exercised.
Expiry Date	The final date by which the option must be exercised.
American Option	Can be exercised anytime up to the expiry date.
European Option	Can be exercised only on the expiry date.
Index Options	Options where the underlying asset is an index (e.g., Nifty, Bank Nifty).
Stock Options	Options where the underlying is a stock.

Participants in Options Trading

Participant	Role
Buyer	Pays the premium and has the right to exercise the option.
Seller (Writer)	Collects the premium and is obligated to fulfill the contract if exercised by the buyer.

Popular Options Trading Strategies

1. Long Call — Buy call option (bet on price rise).
2. Short Call — Sell call option (bet on price fall or stagnation).
3. Long Put — Buy put option (bet on price drop).
4. Short Put — Sell put option (bet on price staying above strike).
5. Long Straddle — Buy both call and put at the same strike (bet on high volatility).
6. Short Straddle — Sell both call and put at the same strike (bet on low volatility).

Profitability Scenarios in Options

Scenario	Description
In-The-Money (ITM)	Exercising the option yields profit. • For a call: Spot price > Strike price. • For a put: Spot price < Strike price.
At-The-Money (ATM)	No profit or loss if exercised. • Spot price = Strike price.
Out-of-The-Money (OTM)	Exercising the option results in a loss. • For a call: Spot price < Strike price. • For a put: Spot price > Strike price.

Option trading is flexible, with limited risk for buyers (limited to premium paid) and obligations for sellers. Success in options trading requires understanding of market movement, pricing, and risk management.

Economy

1. India’s WPI Inflation Rises

Key Highlights

• Overall WPI Inflation
  • India’s Wholesale Price Index (WPI)-based inflation rose to 2.38% in February from 2.31% in January.
• Manufactured Products Inflation
  • Inflation in manufactured products (which carry a 64.2% weight in the index) rose to 2.86% in February from 2.51% in January.
  • Key drivers within manufactured goods included:
    • Food products: 11.06%
    • Vegetable and animal fats: 33.6%
    • Tobacco: 2.74%
    • Paper products: 2.1%
    • Chemicals and chemical products: 1.26%
    • Semi-finished steel: 0.51%
  • The rise was partly driven by increasing industrial metal prices and global commodity price momentum.
• Global Influence
  • The Bloomberg Commodity Price Index rose by 4.1% in January and 9.2% in February, reversing a six-month deflationary trend.
  • Geopolitical factors and global trade uncertainties are expected to remain key influencers on commodity prices and inflation.
• Food Price Inflation
  • Inflation in food items declined sharply to 3.38% in February from 5.88% in January.
  • Prices decelerated for:
    • Cereals: 6.77%
    • Paddy: 5.17%
    • Wheat: 9.58%
    • Potato: 27.54%
    • Eggs, meat, and fish: 1.48%
  • Prices of pulses (1.04%) and vegetables (5.8%) contracted.
  • Sharp price rise observed in:
    • Onion: 48.05%
    • Fruits: 20.88%
• Fuel and Power Category
  • Deflation in fuel and power narrowed to -0.71% in February from -2.78% in January.
• Expert Outlook
  • According to Rajani Sinha (Chief Economist, CARE Ratings), food inflation is expected to remain benign, aided by fresh Rabi harvest and good reservoir levels.
  • Caution remains necessary regarding weather-related disruptions and global commodity volatility.

India’s slight uptick in WPI inflation in February was driven by rising prices in manufactured goods and narrowing fuel price deflation, while food inflation showed signs of easing. With global commodity markets regaining strength and geopolitical factors remaining uncertain, inflation dynamics will continue to be closely monitored.

Source: BS

2. India’s Trade Balance Dynamics

Key Trends and Data

• Growing Reliance on the US for Trade Surplus
  • India’s trade surplus with the US has steadily risen from $17.27 billion (2019-20) to $35.32 billion (2023-24).
  • This surplus acts as a cushion against India’s large overall trade deficit.
  • If this surplus is neutralized by potential US protectionist measures (such as retaliatory tariffs), India’s total trade deficit could worsen by 10.7% to 22.14%.
• Excessive Deficit Concentration with China
  • China accounts for approximately 30–43% of India’s total trade deficit over the past five years.
  • In 2022-23, the deficit with China peaked at $85.07 billion, showing India’s heavy import dependency.
  • This pattern makes India’s trade health extremely vulnerable to fluctuations in trade terms with China.
• Structural Weakness in India’s Trade Portfolio
  • India’s trade strategy has two major vulnerabilities:
    1. Over-reliance on US surplus: Subject to geopolitical shifts and foreign policy changes.
    2. Persistent and growing deficit with China: Suggests lack of competitiveness and limited access to the Chinese market.
• Missed Opportunities in Reducing China Deficit
  • Despite ongoing efforts, India has been unsuccessful in gaining more market access to China.
  • If India manages to reduce the deficit with China by even 50%, it could more than offset any shortfall from US trade friction.
• Geopolitical Sensitivities and Strategic Risks
  • The Trump administration’s efforts to rebalance trade ties could foreshadow unpredictable policy moves that India must hedge against.
  • The current global trade environment highlights the need for diversification, both in export markets and sources of imports.
• Macroeconomic Consequences
  • A wider trade deficit can:
    • Weaken the rupee.
    • Strain foreign exchange reserves.
    • Lead to inflationary pressures by increasing the cost of imported goods.
  • These risks are amplified when there is excessive concentration of deficit from a single trade partner like China.

The real challenge is structural India needs to focus on competitiveness, diversification, and securing greater market access in China. Otherwise, external shocks, like policy changes from the US, could disproportionately widen the trade gap and hurt macroeconomic stability.

3. Growth in Net Direct Tax Collections

What is Direct tax and Indirect Tax?

Key Highlights

• Overall Growth
  • Net direct tax collections rose by 13.13% YoY to ₹21.3 trillion as of March 16, FY25.
  • Driven largely by strong advance tax collections and improved compliance.
• Advance Tax Collections Surge
  • Advance tax collections increased by 14.6% to ₹10.4 trillion, showing robust business and personal income growth.
  • The fourth installment deadline (March 15) further accelerated collections.
• Segment-Wise Analysis
  • Non-corporate tax collections (from individuals, HUFs, and others) grew significantly by 17.5% YoY to ₹11.01 trillion, indicating rising prosperity in the non-corporate sector and better tax discipline.
  • Corporate tax collections grew at a slower pace of 7.1% to ₹9.69 trillion, reflecting moderate corporate profit growth relative to individual and small business income.
• Securities Transaction Tax (STT)
  • STT collections soared by 55.5% to ₹53,095 crore, suggesting a sharp rise in market activity and equity market buoyancy.
• Gross Direct Tax and Refunds
  • Gross direct tax collections grew by 16.15% to ₹25.9 trillion.
  • Refunds also rose by 32.5% to ₹4.6 trillion, highlighting efficient tax administration and faster processing.
• Advance Tax Components
  • Within advance tax, corporate tax contributed ₹7.6 trillion (up 12.5%), while non-corporate tax contributed ₹2.9 trillion (up 20.5%), showing greater tax contribution from small businesses and individuals.
• Macroeconomic Linkage
  • Revenue growth is supported by factors like digitalization, improved compliance, simplification of tax laws, and moderate industrial growth (Q3FY25: revenue up 6.2%, EBITDA up 11%, PAT up 12%).
• Government Targets
  • The government’s revised target for FY25 is ₹22.37 trillion in direct tax collections and ₹16.16 trillion from indirect taxes (total ₹38.53 trillion).

India’s direct tax collection growth is a positive signal of economic resilience, rising income levels, and improved tax compliance. While corporate tax growth has been steady, the surge in non-corporate tax and STT reflects deeper market participation and increasing formalization of small businesses and individuals in the tax net.

Source: BS

4. Rupee Strengthens for the Third Day

• Key Drivers
  • The rupee appreciated for the third consecutive session, reflecting improved sentiment toward the domestic currency.
  • The dollar index fell by 0.2% to 103.5, close to a five-month low, weakening the greenback globally.
• Local Market Dynamics
  • Exporter and foreign bank dollar sales supported the rupee, indicating strong supply of dollars in the market.
  • The rupee touched an intraday high of 86.76, the strongest in three weeks, before settling slightly lower at 86.80 per dollar (previous close: 87).
• Global Context
  • The dollar index’s decline indicates market anticipation of a potentially dovish outcome from the upcoming US Federal Reserve meeting.
  • Lower expectations for aggressive rate hikes in the US have reduced demand for the dollar globally.
• Market Sentiment
  • Traders are cautious and await the US Fed’s policy decision for further direction.
  • Positive rupee movement reflects investor confidence in India’s external stability, supported by steady foreign inflows and controlled trade deficits.

5. OECD India’s Economic Growth Forecast

Context:

The Organisation for Economic Co-operation and Development (OECD) has revised downwards India’s economic growth forecast for FY26 to 6.4% from 6.9% projected in its December outlook, amid rising global uncertainty.

Key Updates

• FY25: India’s GDP growth pegged at 6.3% (vs. NSO estimate of 6.5%).
• FY26: Revised downward to 6.4% (from 6.9% projected in December 2024).
• FY27: Forecast also lowered to 6.6% (from 6.8%).

Global Comparison

• United States
  • Growth expected to slow to 2.2% in 2025 and 1.6% in 2026.
• China
  • Growth forecast at 4.8% in 2025 and 4.4% in 2026.
• Indonesia
  • Expected to grow by 4.9% in 2025 and 5% in 2026.

Key Insights from OECD Report

• India’s slowdown will be mild compared to other major economies.
• Export growth support is anticipated for India and Indonesia, as trade shifts from countries facing higher tariffs.
• India’s economic performance in Q4 2024 remained strong with 6.2% GDP growth in the October-December quarter.
• The global economy is facing rising policy uncertainty and trade restrictions, but India remains resilient.

Inflation Projections for India

• FY26: Raised to 4.5% (from 4.8% earlier).
• FY27: Increased slightly to 4.1% (from 4%).

Global Economic Outlook

• Global growth projections lowered:
  • 2025: from 3.3% to 3.1%.
  • 2026: from 3.1% to 3%.
• OECD Secretary-General Mathias Cormann emphasized the need for an open, rules-based international trading system to curb rising costs and protect economic stability.

Source: TET

6. SBI Report on U.S. Tariff Impact

Key Concern

• U.S. President Donald Trump’s proposed reciprocal tariffs could impact Indian exports to the U.S.

SBI’s Assessment

• Expected decline in India’s exports to the U.S.: 3–3.5% post-tariff implementation.
• Possible contributing factors:
  • A downturn in U.S. GDP growth
  • Slowdown in U.S. exports and consumption

SBI’s Recommendations and Optimism

• Offset the decline by targeting higher export goals in:
  • Manufacturing
  • Services
• India’s strategy includes:
  • Export diversification
  • Greater value addition
  • Exploring alternative markets and sectors
  • Redrawing supply chain routes from Europe to the U.S. via the Middle East

Despite the tariff risks, SBI views India as well-positioned to adapt and benefit in a changing global trade environment through proactive diversification and supply chain realignment.

Agriculture

1. India’s Warmest February and the Threat to Wheat Production

Key Climate Concern

• February 2025 recorded as India’s warmest February in 124 years.
• March 2025 is also forecasted to experience above-normal temperatures and more frequent heat waves.
• The period coincides with India’s wheat harvest season, posing a serious threat to wheat yield and quality.

Wheat Cultivation in India

• Major wheat-producing states: Uttar Pradesh, Punjab, Haryana, Madhya Pradesh.
• Sown between October and December, harvested between February and April (rabi season).
• Government wheat procurement target for 2025-2026 rabi marketing season: 30 million tonnes.
• 2024-2025 procurement was 26.6 million tonnes, below the target of 34.15 million tonnes.

Heat Impact on Wheat

• Wheat requires cooler temperatures for optimal growth.
• Early heat waves reduce the grain-filling period, leading to:
  • Smaller, lighter grains
  • Lower starch content, higher protein content
  • Harder grain quality, affecting milling
  • Lower market prices for farmers
• Overuse of fertilizers and chemicals becomes common as farmers try to compensate for low yields, leading to inefficient resource use.

Stages of Wheat Growth (FAO Classification)

1. Germination to emergence
2. Growth stage 1 (Emergence to double ridge)
3. Growth stage 2 (Double ridge to anthesis; highly heat-sensitive stage)
4. Growth stage 3 (Grain-filling period until maturity)

Role of the Warming Indian Ocean

• The Indian Ocean is warming rapidly and is expected to remain in a near-permanent heat wave state by the century’s end.
• Changing ocean conditions are affecting India’s monsoon patterns, delaying both kharif and rabi seasons.
• Late sowing pushes critical wheat growth stages into early heat wave periods.

Adaptation and Mitigation Strategies

• Short-term measures:
  • Compensation for crop losses
  • Heat-stress advisories for farmers
  • Improved weather forecasts
• Long-term solutions:
  • Promote climate-resilient wheat varieties
  • Adjust sowing dates to avoid peak heat periods
  • Improve resource management (fertilizers, pest control)
  • Close the yield gap through better agricultural practices
  • Policy focus on ensuring food security
• Policymakers’ multi-pronged approach (as recommended by experts):
  • Scientific research investment
  • Financial support and crop insurance
  • Technological solutions and farmer education
  • Continuous weather monitoring and dissemination

Source: The Hindu

Facts To Remember

1. Banks write off NPAs worth ₹ 16.3 trillion in last 10 years

Banks have written off nonperforming assets (NPAs) or bad loans worth about ₹ 16.35 trillion in last 10 financial years, Parliament was informed. Highest amount of ₹ 2.36 trillion was written off during FY19 while NPAs worth ₹ 58,786 crore were written off in FY15, the lowest in last 10 years.

2. Cheetah Gamini, four cubs released into wild in Kuno

Cheetah Gamini and her four cubs were released into the wild at the Kuno National Park (KNP) in Madhya Pradesh, offering tourists a unique opportunity to spot the big cats during safari rides.

3. Bajaj to buy out Allianz’s stakes in insurance JVs

In the biggest insurance sector deal in India, Bajaj group will buy out Allianz’s 26% stakes in their life and non-life insurance ventures for Rs 13,780 crore and Rs 10,400 crore, respectively. The deal will make both insurers fully Indian-owned.

4. Musk’s Starlink likely to face spectrum tax

Starlink is likely to face a spectrum tax in India, which had been abolished for terrestrial network providers, such as Reliance Jio, Airtel and Vodafone Idea a few years back, sources said. The tax, if imposed, will increase service costs for Elon Muskrun satcom venture in India.

5. Public Sector Banks recover ₹2.27 lakh crore in written-off loans: FM Sitharaman

Union Finance Minister Nirmala Sitharaman has said that Public Sector Banks have made the recovery of written-off loans worth over two lakh 27 thousand crore rupees.

6. Russia to participate in Smart Cities India Expo 2025

A Russian delegation will participate in the Smart Cities India Expo 2025, which will be held from March 19 to 21 in New Delhi.

7. IOC Board approves boxing for inclusion in 2028 Los Angeles Olympic Games

The International Olympic Committee (IOC) has approved the inclusion of boxing in the 2028 Los Angeles Olympics games. 

8. GeM Surpasses ₹5 Lakh Crore GMV, Achieves Milestone in Public Procurement

The Government e-Marketplace (GeM) has achieved a significant milestone by surpassing Rs 5 lakh crore in Gross Merchandise Value (GMV) on its portal before the close of the financial year 2024-25