Daily Current Affairs (DCA) 25 March, 2025

Daily Current Affairs Quiz
25 March, 2025

International Affairs

1. Trump Proposes 25% Tariff on Countries Purchasing Venezuelan Oil

Context:

Former U.S. President Donald Trump announced a plan to impose a 25% tariff on any country purchasing oil and gas from Venezuela. The tariff would apply to all trade those countries conduct with the United States. The measure is set to take effect from April 2, 2025, as per Trump’s statement on his social media platform.

Reason Behind the Move

• Trump cited Venezuela’s alleged role in sending “tens of thousands” of violent gang members to the U.S.
• He described Venezuela as being “hostile” to the United States and its values.

Impact on Global Trade

• The tariff could significantly impact China, the largest purchaser of Venezuelan crude oil.
• In February 2025, China imported around 503,000 barrels per day (bpd) of Venezuelan crude and fuel, accounting for 55% of Venezuela’s total exports.
• Other major importers include Spain, Italy, Cuba, and India.

Recent U.S. Actions

• Earlier this month, Trump ordered a 30-day wind-down of the license granted to Chevron Corp to operate in Venezuela, with operations set to cease by April 3, 2025.
• This was due to Venezuela’s failure to progress on electoral reforms and efforts to return migrants, according to Trump.
• U.S. imports of Venezuelan oil will also end in early April unless an extension is granted.

Political Context

• The move escalates tensions with Venezuela’s socialist government, led by Nicolas Maduro.
• Venezuela’s government has not yet responded to the announcement.

Legal Action Against Venezuelan Gangs

• Trump invoked the 1798 Alien Enemies Act to deport alleged members of the Venezuelan gang Tren de Aragua without waiting for immigration court removal orders.

National Affairs

1. India’s Urbanisation Journey

India’s Urban Journey

• Post-1990s liberalisation triggered rapid urban growth.
• Urbanisation has been shaped by Union-led initiatives:
  • Jawaharlal Nehru National Urban Renewal Mission (JNNURM)
  • Five Urban Flagship Missions under various governments.
• The Centre has been pivotal in crafting urban policies, despite urban development being a State subject.

Role of the Centre in Urban Development

• Successive Union governments have launched missions:
  • Housing: Indira Awas Yojana, Rajiv Awas Yojana, PMAY.
  • Basic services: BSUP (UPA era), AMRUT, Swachh Bharat Mission (SBM).
  • Mobility: City mobility plans and major investments in metro rail projects (30% of urban budget during NDA).
• The Centre’s approach is top-down, with:
  • Central control over financial allocations and project structures.
  • Less autonomy for cities and States to address context-specific needs.

Why the Top-Down Financial Model?

• Cities as engines of growth: Successive governments view urban hubs as critical to national economic ambitions.
• Infrastructure investments seen as essential for achieving India’s $5 trillion economy goal.
• Finance Commissions imposed conditionalities on fund transfers:
  • Example: 15th Finance Commission’s condition to link property tax enhancement with State GDP growth.
• Current mechanisms restrict local flexibility and innovation.

Urbanisation Variations Across States

• Kerala and Karnataka: Rural-urban continuums dominate; boundaries between cities and villages blur.
• Gujarat: Urban sprawl shows core-periphery dynamics, with the wealthy often preferring peripheries.
• Housing needs vary some cities have excess social housing, while others require more.
• Sanitation and water supply infrastructure needs are location-specific, yet universal top-down mandates (like SBM) often ignore this diversity.

Problems with ‘One-Size-Fits-All’ Policies

• Universal urban policies fail to:
  • Address regional demographic shifts (like migration from north to south).
  • Cater to varied urban forms and priorities (for example, clustered towns needing decentralised systems vs. metro cities needing large infrastructure).
• Top-down financial impositions result in:
  • Unutilised or ineffectively used funds (e.g., Smart Cities Mission experiences).
  • Creation of irrelevant infrastructure driven by bureaucratic targets rather than community needs.

Suggested Alternative

• Redefine fiscal devolution:
  • 70% of the Union Budget for urban development should go as direct transfers to States and city governments.
  • Remaining 30% should be retained for national priorities (like climate resilience).
• Direct transfers to be categorised by:
  • Mobility, sanitation, housing, water, waste, innovation.
• Allow States and cities to identify their own priorities, supported by knowledge agencies and local consultations.
• Outcome: Avoid redundant infrastructure and foster needs-based, locally relevant solutions.

Why a Shift in Approach is Crucial

• Central governments are geographically and administratively distant, often disconnected from community-level challenges.
• Local governments are better positioned to resolve conflicts, deliver services, and manage taxation effectively.
• Plurality and diversity are at the core of India’s identity — urban planning must reflect this heterogeneity.
• Incremental fixes driven from the top risk infrastructure collapse and declining livability.
• City governments, if empowered, can ensure tangible links between governance and citizens, strengthening democratic participation.

A fundamental redefinition of roles at the Central, State, and city levels is necessary for India’s urban transformation. Central government’s role should shift to guidance and enabling, not prescription. Stronger fiscal autonomy for cities and States will help realise context-sensitive, demand-driven urban development, aligned with India’s complex and diverse realities.

2. DNA Fingerprinting and Its Role in Identification

What is DNA?

• Composition:
  • Each human cell (except sperm and egg) contains 46 DNA molecules 23 from the father (via sperm) and 23 from the mother (via egg).
  • Sperm and egg cells contain only one copy of the genome.
• Structure:
  • DNA is packaged in chromosomes (e.g., Chromosome 3 holds 6.5% of total DNA).
  • DNA consists of two complementary, anti-parallel strands made up of adenine (A), cytosine (C), guanine (G), and thymine (T).
• Polymorphisms:
  • Differences in DNA sequences between individuals are called polymorphisms.
  • These help in identifying individuals and tracing ancestry.

What are STRs (Short Tandem Repeats)?

• STRs are short sequences of base-pairs repeated multiple times (e.g., GATCGATCGATC).
• STRs are often highly polymorphic, meaning different people usually have different repeat numbers.
• STR polymorphisms are used to generate unique DNA profiles.

How do scientists copy DNA?

• The method used is Polymerase Chain Reaction (PCR):
  • DNA extraction: Obtained from tissues like blood, skin, bone, or saliva.
  • Step 1: Denaturation — Heat to 95°C to separate strands.
  • Step 2: Annealing — Cool to 60°C to allow primers to bind to specific DNA regions.
  • Step 3: Extension — Using Taq polymerase at 72°C, the DNA strand is extended with complementary bases.
• Each PCR cycle doubles the DNA; millions of copies can be made in under an hour.
• Performed using a device called a thermocycler.

What is a DNA fingerprint?

• DNA fingerprint: A unique profile created by measuring the sizes of STR variants through capillary electrophoresis.
• Process:
  • DNA fragments are separated by size in a capillary tube under an electric field.
  • The smaller fragments move faster and are detected.
  • The resulting table of STR sizes for paternal and maternal alleles forms an individual’s DNA fingerprint.
• Uniqueness:
  • Only identical twins share the same DNA fingerprint.

Uses of DNA Fingerprinting

• Forensic Identification:
  • Identify individuals from crime scenes (blood stains, sweat, spit).
  • Confirm suspects or exonerate innocent individuals.
• Disaster Victim Identification:
  • Extract DNA from bones, teeth, and other remains.
• Paternity and Relationship Testing:
  • Establish parent-child relationships.
• Organ Donation Matching:
  • Confirm donor-recipient compatibility.
• Cold Case Resolution:
  • Solve old crimes using preserved DNA samples.
• Historical Analysis:
  • Extract DNA from ancient remains (up to 65,000 years old).

Why is DNA analysis important?

• Stable over time: DNA remains intact for thousands of years.
• Accurate: Highly reliable for identifying individuals and familial relationships.
• Universal application: Used in criminal justice, medicine, anthropology, and disaster response.
• Unique personal marker: Much like an Aadhaar number for biological identity.

Source: TH

3. Guidelines on Deletion of MGNREGS Job Cards

Context:

Over 10.43 crore workers have been removed from the Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS) in the past four years. Aadhaar-linked payments: The deletions coincide with the implementation of Aadhaar-based payment systems, though the government denies any direct correlation.

Key Guidelines Issued by the Ministry of Rural Development

• Approval Process for Deletions:
  • Job card or worker name deletions must be approved in Gram Sabha meetings:
    • Regular Gram Sabha (for approving the shelf of works).
    • Social Audit Gram Sabha.
    • Special Gram Sabha (called specifically for this purpose).
• Valid Reasons for Deletion:
  • Permanent migration (to urban areas or another panchayat).
  • Panchayat reclassification (declared as urban).
  • Duplicate job card found.
  • Registration with forged documents.
  • Worker’s death.

Transparency & Due Process

• Publication of Deleted Names:
  • Deleted workers/job card details must be published in public domain for at least 30 days.
• Biannual Reviews in Gram Sabhas:
  • Twice a year, Gram Sabhas must convene to:
    • Discuss the draft list of flagged job cards.
    • Address objections raised by affected workers.
• Right to Appeal:
  • Households must be informed about their right to appeal against job card deletions.
  • The cause of deletion must be disclosed.
• Pending Dues Clearance:
  • Before deletion, all pending wages must be paid to affected workers.

Significance & Implications

• Enhanced Accountability: Ensures job card deletions are justified and verified.
• Worker Protection: Provides transparency and appeal mechanisms for affected workers.
• Improved Record-Keeping: Prevents wrongful deletions and ensures MGNREGS benefits reach genuine beneficiaries.

Source: TH

4. India’s Genomic Sequencing Initiative for Tuberculosis

Context:

The Department of Biotechnology (DBT) has completed the genomic sequencing of a third, or 10,000 samples, of the target of 32,500 samples of mycobacterium tuberculosis the bacteria behind tuberculosis (TB) in a bid to improve the understanding of drug-resistant TB and capture unique genomic features of the TB bacterium in India. Of the sequenced samples, 7% are said to be resistant to a single drug.

Overview of the Initiative

• Launched by: Department of Biotechnology (DBT), Ministry of Science and Technology.
• Programme: Part of Data-Driven Research to Eradicate TB (Dare2eraD TB).
• Goal: Genomic sequencing of 32,500 Mycobacterium tuberculosis samples.
• Progress:
  • 10,000 samples sequenced (one-third of target).
  • Completion target: October 2025.
• Consortium Members:
  • DBT, Council of Scientific and Industrial Research (CSIR), Indian Council of Medical Research (ICMR).
  • Collective body: Indian Tuberculosis Genomic Surveillance Consortium.
• Genomic sequencing is a laboratory method used to determine the complete DNA sequence of an organism or cell type, providing insights into genetic makeup, disease, and evolutionary relationships. 

Findings From Sequenced Samples

• Drug Resistance:
  • 7% of sequenced TB strains showed resistance to a single drug.
• Demographic Insights:
  • Majority of TB patients are between 18-45 years of age.
  • Many patients are diabetic and underweight, indicating comorbidities.

National TB Eradication Goals

• India’s target: Eradicate TB by 2025, five years ahead of WHO’s 2030 target.
• Current TB prevalence (as of 2022):
  • 1,990 cases per million, down from 2,370 per million in 2015.
  • WHO’s elimination benchmark: 1 case per million.
• India’s share: Contributes to 28% of global new TB cases.

Challenges Highlighted

• Drug-Resistant TB:
  • Major concern for treatment and public health.
• Latent TB Pool:
  • Potentially up to 3,000 per million carry latent TB infections, facilitating undetected spread.
• Time-Consuming Testing:
  • Current diagnostic confirmation can take up to three weeks.

Future Strategies

• Use of Artificial Intelligence (AI):
  • Potential to reduce TB testing duration from three weeks to one week.
• Genomic insights:
  • Aim to develop faster, more precise diagnostics and understand regional and genetic variations in TB strains.

Significance

• Global Impact: Progress in India is pivotal for global TB elimination efforts.
• Public Health Policy: Data will help shape drug development, targeted interventions, and national TB control strategies.

Source: TH

5. India to Conduct First-Ever ‘Aikeyme’ Naval Exercise

Context:

India is set to host a landmark naval exercise named ‘Aikeyme’ Africa-India Key Maritime Engagement with 10 African countries, marking a significant step in strengthening its maritime and defense ties with the African continent. This comes amid increasing Chinese strategic inroads and ongoing maritime threats in the region.

Key Details of Exercise Aikeyme

• Dates: April 13 to 18, 2025
• Location: Off Dar-es-Salaam, Tanzania
• Co-host: Tanzania
• Participating Countries:
  • Tanzania
  • Comoros
  • Djibouti
  • Eritrea
  • Kenya
  • Madagascar
  • Mauritius
  • Mozambique
  • Seychelles
  • South Africa
• Inauguration: By India’s Defence Minister Rajnath Singh

Indian Ocean Ship (IOS) Sagar Initiative

• Launch Date: April 5, 2025
• Deployment Period: April 5 to May 8, 2025
• Vessel: INS Sunayna (Offshore Patrol Vessel)
• Crew Composition: Indian sailors + 44 personnel from nine ‘friendly foreign countries’
• Mission Area: South-West Indian Ocean Region (IOR)
• Objective: Promote ‘SAGAR’ (Security and Growth for All in the Region) and ‘Mahasagar’ (Mutual & Holistic Advancement for Security Across the Regions)

Strategic Importance

• China’s presence in Africa has grown rapidly, leading India to deepen maritime ties.
• Continued surveillance of Somali pirates and Houthi rebels.
• An Indian warship is permanently stationed in the Gulf of Aden to counter piracy, with readiness to deploy more if required.

The Aikeyme naval exercise and the IOS Sagar initiative reinforce India’s commitment to:

• Maritime collaboration with African and IOR nations
• Combating maritime threats
• Establishing itself as a key maritime power and security partner in the region

TOI

Banking/Finance

1. Transparency, FPI Threshold, and Governance Reforms

Context:

The Securities and Exchange Board of India (Sebi), under the new leadership of Tuhin Kanta Pandey, held its first board meeting on Monday.

Key Decisions

A. High-Level Committee (HLC) Formation

• Purpose:
  • Review conflict of interest provisions.
  • Strengthen disclosure norms and other governance matters for top SEBI officials.
• Context:
  • Move to rebuild trust following past allegations of conflict of interest under the previous leadership.

B. Regulatory Changes and Simplifications

• Foreign Portfolio Investors (FPIs):
  • Disclosure threshold doubled from ₹25,000 crore to ₹50,000 crore to reduce compliance burden and align with market growth.
• Alternative Investment Funds (AIFs):
  • Category II AIFs’ investments in ‘A’ or lower-rated debt will now be treated as investments in unlisted securities, enhancing risk transparency.
• Market Infrastructure Institutions (MIIs):
  • Tweaks in appointment process for Public Interest Directors (PIDs) and Key Managerial Personnel (KMPs), ensuring cleaner governance and merit-based selections.
• Investment Advisors & Research Analysts:
  • Now permitted to charge advance fees for up to one year, providing operational clarity and certainty for advisory businesses.
• Registered Investment Advisors (RIAs):
  • RIAs are now permitted to collect up to one year’s fees in advance, reversing the previous three-month limit.
  • Investment advisors (IAs) and research analysts (RAs) can also charge advance fees for up to one year, increasing financial flexibility.

Strategic Objectives

• Foster institutional transparency.
• Simplify and modernize compliance processes.
• Align SEBI’s regulations with the evolving needs of capital markets and global best practices.

Implications for Stakeholders

• Investors: Improved disclosures and reduced regulatory frictions.
• Financial intermediaries: Clearer guidelines and more predictable compliance.
• Market Confidence: Restoration of trust post conflict-of-interest concerns.

Under Tuhin Kanta Pandey’s leadership, SEBI has taken decisive first steps towards transparent governance, robust conflict-of-interest safeguards, and simplified regulations. These reforms signal a forward-looking, investor-friendly approach that aims to balance market growth with strong institutional integrity.

Source: BS

2. SEBI to set up High-Level Committee on Conflict of Interest

Context:

The newly formed High-Level Committee (HLC), comprising eminent experts from regulatory bodies, government, private sector, and academia, will submit its recommendations within three months of formation.

• Recommendations will be placed before the SEBI board for consideration.
• The conflict-of-interest framework, last updated in 2008, will be revisited to enhance operational disclosures, including self-recusal mechanisms.
• SEBI Chairman Tuhin Kanta Pandey emphasized the need for a clear framework to build trust and handle complaints transparently.

Raised FPI Disclosure Threshold

• The threshold for granular ownership disclosures by Foreign Portfolio Investors (FPIs) has been doubled from ₹25,000 crore to ₹50,000 crore.
• This move is expected to attract more capital and ease compliance.
• The concentration limit of 50% of AUC in a single corporate group remains unchanged.
• The regulator continues engaging with FPIs to facilitate capital formation.

Fee Structure Reforms for IAs and RAs

• Investment Advisors (IAs) and Research Analysts (RAs) are now allowed to charge advance fees for up to one year, subject to client agreement.
• Previously, advance fee collection was capped at two quarters for IAs and one quarter for RAs.
• This aims to provide more flexibility in fee structuring and improve client servicing.

Deferred Proposals

• The SEBI board deferred amendments to regulations concerning merchant bankers, debenture trustees, and custodians.
• Revised proposals will be reconsidered in future meetings after exploring alternative approaches.

Treatment of Category II AIF Investments

• SEBI clarified that investments by Category II Alternative Investment Funds in listed debt securities rated ‘A’ or below will now be treated as investments in unlisted securities, addressing market limitations in unlisted debt availability.

Changes in MII Governance Appointments

• SEBI approved process changes for appointing Public Interest Directors (PIDs) on Market Infrastructure Institution (MII) boards.
• If a PID is not reappointed after the first term, the reason must be recorded and shared with SEBI.
• The cooling-off period for PIDs moving between MIIs has been removed.
• Appointment of key officials (compliance officer, chief risk officer, chief technology officer) will now require approval from the MII governing board instead of the nomination and remuneration committee (NRC).

F&O Market Reforms Update

• SEBI officials provided an update on proposed reforms for risk monitoring and open interest formulation in the futures & options (F&O) market.
• While most feedback has been positive, certain stakeholder concerns are under review and will be considered before finalization.

SEBI’s recent board meeting decisions highlight its intent to foster transparency, ensure strong governance, and promote ease of doing business. By doubling FPI thresholds, revising conflict-of-interest frameworks, and streamlining governance in MIIs, the regulator is taking proactive steps to build trust and facilitate sustained market growth.

3. IMF’s FSSA Report Highlights

Need for Stronger Credit Risk Practices

• Indian banks need to adopt International Financial Reporting Standards (IFRS 9) for robust credit risk management.
• The IMF emphasizes enhanced supervision of individual loans, collateral valuation, and monitoring of connected borrower groups.

Key Findings from the FSSA Report

• India’s financial system has become more resilient and diverse since the last FSAP in 2017.
• The sector has recovered from multiple distress phases and navigated the pandemic well.
• Non-Banking Financial Intermediaries (NBFIs) are more interconnected, presenting both opportunities and risks.
• Banks and NBFCs hold sufficient aggregate capital to support moderate lending under severe macro-financial conditions.

Financial Inclusion and Infrastructure Growth

• India’s Financial Inclusion Index has risen from 43.4 in 2017 to 64.2 in March 2024.
• Over 548.4 million bank accounts have been opened under the Jan Dhan Yojana, with total balances exceeding ₹2.45 trillion.
• The IMF recommends strengthening legal, tax, and informational infrastructure to expand credit access for financially underserved sectors.

Insurance Sector and Regulatory Progress

• India’s insurance sector is strong, with significant presence in both life and general insurance.
• Supported by robust regulations and digital innovations, the sector remains stable.
• The IMF suggests transitioning towards risk-based solvency frameworks and stronger group supervision mechanisms.

Addressing Cybersecurity and Climate Risks

• Indian authorities have advanced cybersecurity risk oversight, especially for banks.
• Climate change-related financial risks are manageable but require continued monitoring with better data granularity.
• System-wide contagion and emerging vulnerabilities will need proactive supervision.

The IMF’s FSSA report acknowledges India’s progress in building a resilient and diverse financial system. However, the path forward requires continued focus on aligning with global standards, particularly IFRS 9, strengthening credit risk supervision, broadening financial inclusion, and addressing climate and cybersecurity challenges. These steps are vital to fortify India’s financial system and sustain its growth momentum.

Source: BS

4. RBI Revises Priority Sector Lending Norm

Key Changes

Housing Loan Limits Under Priority Sector

• Population > 5 million:
  • Loan up to ₹50 lakh
  • Maximum dwelling unit cost: ₹63 lakh
• Population between 1 million and 5 million:
  • Loan up to ₹45 lakh
  • Maximum dwelling unit cost: ₹57 lakh
• Population < 1 million:
  • Loan up to ₹35 lakh
  • Maximum dwelling unit cost: ₹44 lakh

Earlier Norms:

• Up to ₹35 lakh in metro areas (population > 10 lakh)
• Up to ₹25 lakh in other centres
• Maximum dwelling unit costs: ₹45 lakh (metros), ₹30 lakh (others)

Renewable Energy (RE) Loan Limit Enhancements

• For RE-based power generators and public utilities (street lighting, village electrification):
  • Loan limit increased to ₹35 crore (from ₹30 crore)
  • Eligible for priority sector classification
• For individual households:
  • Limit unchanged at ₹10 lakh per borrower

Changes for Urban Cooperative Banks (UCBs)

• Overall PSL target revised to 60% of Adjusted Net Bank Credit (ANBC) or Credit Equivalent of Off-Balance Sheet Exposure (CEOBSE), whichever is higher
• Earlier target was 75% (to be achieved by FY26 with interim milestones)

Weaker Sections Lending

• Expanded list of eligible borrowers
• Removal of the cap on loans by UCBs to individual women beneficiaries

Current Status (as per January 2024):

• Housing loans worth ₹7.47 trillion classified under priority sector

Performance in FY24:

• Priority sector lending by scheduled commercial banks rose by 16.9% (up from 10.8% in FY23)
• All bank groups met their overall priority sector lending targets and sub-targets

The RBI’s revised priority sector lending guidelines are aimed at expanding financial inclusion and promoting renewable energy investments. By enhancing housing loan limits and broadening eligible categories, the central bank is supporting key sectors aligned with national development goals.

5. Record Dividend Payouts by Central Public Sector Enterprises (CPSEs) in FY25

Key Highlights

1. Highest-Ever Dividend Receipts:

• Dividends paid by Central Public Sector Enterprises (CPSEs) in FY25 have reached a record ₹ 69,873 crore so far.
• The government is optimistic that this figure will touch ₹ 70,000 crore by the end of the financial year.
• In FY24, dividend receipts stood at ₹ 63,749.3 crore, the previous highest.

2. Top Dividend Contributors in FY25:

• Coal India: ₹ 10,252.09 crore
• Oil and Natural Gas Corporation (ONGC): ₹ 10,001.97 crore
• Bharat Petroleum Corporation (BPCL): ₹ 3,562.47 crore
• Telecommunications Consultants (India): ₹ 3,761.50 crore
• Hindustan Zinc: ₹ 3,619.06 crore

3. Revised CPSE Dividend Policy:

• Each CPSE must pay a minimum annual dividend of 30% of profit after tax (PAT) or 4% of net worth, whichever is higher (subject to legal provisions).
• CPSEs in the financial sector must pay at least 30% of PAT, within legal limits.
• The stated minimum is a benchmark — CPSEs are encouraged to pay higher dividends, factoring in:
  • Profitability
  • Capital expenditure needs
  • Cash reserves
  • Net worth
  • Maintaining financial leverage

4. CPSE Profit Growth:

• According to the Public Enterprises Survey, 212 operating CPSEs reported combined net profits of ₹ 3.43 trillion in FY24, up 48% from ₹ 2.18 trillion in FY23.

5. Public Sector Banks (PSBs) Dividend Surge:

• Dividend payouts by 12 PSBs increased by 33% to ₹ 27,830 crore in FY24.
• The government received ₹ 18,013 crore, nearly 65% of this amount.
• PSBs recorded their highest-ever aggregate net profit of ₹ 1.41 trillion in FY24.
• In the first nine months of FY25 (April–December), net profit reached ₹ 1.29 trillion.

6. State Bank of India (SBI) Performance:

• SBI contributed over 40% of public sector bank profits in FY24.
• The bank reported profits of ₹ 61,077 crore, 22% higher than the previous fiscal (₹ 50,232 crore).

7. Historical Dividend Trend:

• Total dividend receipts since FY15: ₹ 531,453.23 crore
• Dividend receipts have consistently risen from ₹ 31,691.91 crore in FY15 to nearly ₹ 70,000 crore in FY25.

6. India’s Derivatives Market

Unprecedented Growth in Derivatives Trading

• India has become the world’s largest derivatives market, with:
  • $6.4 trillion notional turnover per day
  • Annual option premiums of $2.2 trillion in 2024
• The ratio of derivatives-to-cash market volumes in India is the highest globally.

SEBI’s Initial Measures (Effective from November 2024)

• Concerns: Overheated market activity and 90% loss rate among retail investors (SEBI study).
• Measures introduced:
  • Limit of one weekly expiry per exchange
  • Increase in minimum contract size
  • Upfront premium collection
  • Removal of calendar spread benefits on expiry days

Visible Impact of Measures

• Monthly expiries reduced from 20 to 8.
• Average premium per index option increased from ₹1,300 (Nov 2024) to ₹3,000 (Feb 2025).
• Share of zero-day-to-expiry options fell from 70% to 50% of volumes, and 40% to 20% of total premiums.
• Notional daily traded value of options dropped by 35% ($5 trillion to $3.2 trillion).
• Option premium turnover saw only a 15% decline, showing resilience in structured trading.
• Cash market volumes dropped by 12% (Feb vs. Nov 2024), aligning with derivatives moderation.
• In March 2025, derivative volumes rebounded by 20% month-on-month with improving market sentiment.

Current Derivative-to-Cash Market Ratios

• Option premium turnover to cash turnover ratio remains high at 0.54x (Feb 2025).
• On a notional basis, derivatives-to-cash volumes are still extremely high at 300x (down from 400x in Nov).

SEBI’s New Consultation Paper (February 2025)

• Proposed moves for orderly conduct and market stability:
  1. Delta-based (future equivalent) calculation for market-wide position limits for stock and index derivatives.
  2. Linking single stock derivative limits to underlying cash delivery volumes.
  3. Enhanced entity-wise derivative position limits, introducing intraday monitoring alongside end-of-day limits.
• Delta-based exposure monitoring is considered more accurate for price sensitivity and aligns with global regulatory standards.
• The new 15% free float-based limit is more liberal compared to the earlier 20% notional-based cap.
• Under this framework, the number of stocks falling under derivatives ban is projected to drop by 90% (from 366 to 27).

Intraday Limits and Safeguards

• End-of-day limit for individual entities: ₹500 crore (on a future-equivalent basis).
• Gross entity-wise limit: ₹1,500 crore.
• Intraday limits introduced to prevent market domination and sudden volatility caused by large players.
• SEBI is also pushing for diversified benchmarks to reduce the chance of index manipulation.

Retail Participation and Market Outlook

• Retail derivatives traders have grown from 700,000 to 3.7 million in five years.
• Despite regulatory tightening, India’s options market remains a key attraction for both global and domestic investors.
• Given its scale now surpasses the cash market, orderly growth and strict supervision are crucial for long-term equity market health.

India’s derivatives market has seen unparalleled growth, but SEBI’s proactive measures aim to curb excesses, safeguard retail investors, and ensure systemic stability. Ongoing supervision and dynamic regulation will be key to balancing growth with stability in this critical market segment.

7. RBI Revises Priority Sector Lending (PSL) Guidelines for 2025

Context:

The Reserve Bank of India (RBI) has issued revised guidelines on priority sector lending (PSL), aimed at facilitating better targeting of bank credit to priority sectors of the economy.

• These revised guidelines will come into effect from 1 April 2025.
• RBI stated that the enhanced PSL coverage is designed to improve credit flow to critical areas of the economy.

Key Changes in the New PSL Guidelines

a) Enhanced Loan Limits

• Several loan limit enhancements have been introduced to ensure greater PSL coverage, especially in sectors like housing and renewable energy.

b) Broadened Classification for Renewable Energy

• The RBI has broadened the loan purposes eligible for PSL classification under renewable energy, encouraging green financing and sustainable investments.

c) PSL Targets for Urban Cooperative Banks (UCBs)

• The overall PSL target for Urban Cooperative Banks (UCBs) has been revised to 60% of either:
  • Adjusted Net Bank Credit (ANBC), or
  • Credit Equivalent of Off-Balance Sheet Exposures (CEOBSE),
    whichever is higher.

Implications of the Revised PSL Guidelines

• The new guidelines will support housing finance growth, push renewable energy lending, and strengthen the role of urban cooperative banks in priority sector development.
• This move aligns with the RBI’s focus on inclusive growth and sustainability in the credit ecosystem.

The revised PSL guidelines by RBI, effective April 2025, mark a significant step towards widening access to credit in priority sectors such as affordable housing, renewable energy, and cooperative banking. The emphasis on enhanced limits and target revisions will strengthen India’s push for inclusive economic growth and sustainable development.

Mint

8. Brokers Seek RBI Clarity on Retail G-Sec Trading Framework

Context:

A group of stock brokers has approached the Reserve Bank of India (RBI), requesting a detailed procedural framework for retail participation in government securities (G-Secs) trading on the NDS-OM (Negotiated Dealing System-Order Matching) platform.

Key Issues Raised by Brokers

• Implementation Guidelines Pending:
  Although the RBI announced access to NDS-OM for non-bank brokers in its February monetary policy, no implementation timelines or draft regulations have been issued yet.
• Operational Clarifications Needed:
  Brokers are seeking clarity on:
  • Whether retail participation would use the same demat account or require a separate SGL account.
  • If the same unique client code (UCC) can be used for both equity and G-Sec transactions.
  • The integration costs and operational requirements, as brokers’ back-office systems are not yet integrated with NDS-OM.

Challenges in Driving Retail Participation

• Lack of Awareness:
  Brokers note that retail demand for G-Secs is currently low due to limited public understanding of yields, price movements, and the secondary G-Sec market.
• Competition with FDs:
  • Retail investors tend to prefer fixed deposits (FDs), which are simpler, more familiar, and easily accessible.
  • Nikhil Agarwal, CEO, Grip Invest: “From the user’s perspective, FDs are accessible, understood, and familiar, making them a more comfortable choice.”
• Need for Education:
  • Satish Menon, Executive Director, Geojit Financial Services, emphasized: “A nationwide education campaign is required for retail investment in G-Secs to pick up.”

RBI’s Efforts So Far

• The RBI has been making efforts to promote retail participation by:
  • Launching a mobile app for G-Sec investment.
  • Reducing the minimum investment amount to ₹10,000 last year to make G-Secs more accessible.

Summary Table

Issue	Concern/Requirement
Procedural clarity	Implementation details, account structure (Demat or SGL), and UCC usage needed
Technology integration	Brokers need time and resources to integrate back offices with NDS-OM
Retail investor education	Awareness about yields, price movement, and secondary markets is lacking
Competition with FDs	FDs remain simpler and more familiar for retail investors
Minimum investment threshold	Lowered to ₹10,000 by RBI to attract retail investors

For the RBI’s vision of democratizing federal debt ownership to succeed, the regulator needs to:

• Issue clear implementation guidelines and operational frameworks for brokers.
• Launch nationwide education and awareness campaigns.
• Support brokers in technology integration to make retail G-Sec trading smooth and accessible.

Source: The Economic Times

9. RBI Revises Priority Sector Lending Norms; Enhances Housing Loan Limits

Context:

The Reserve Bank of India (RBI) has released revised guidelines on priority sector lending (PSL), effective from April 1, 2025. The move aims to better target bank credit towards priority sectors such as agriculture, MSMEs, export credit, education, housing, social infrastructure, and renewable energy.

Key Highlights of the Revised PSL Norms

a) Overall PSL Target Unchanged

• The overall PSL target remains at 40% of a bank’s total lending, with sub-targets across various categories.

b) Enhanced Housing Loan Limits

• The RBI has increased loan limits for housing loans eligible under PSL: Area Previous Limit Revised Limit Metropolitan cities ₹35 lakh ₹50 lakh Towns with population < 5 mn ₹25 lakh ₹45 lakh Towns with population ≤ 1 mn New classification ₹35 lakh
• Exclusions from PSL Classification:
  • Housing loans to banks’ own employees will not be classified as PSL.
  • Housing loans backed by long-term bonds will also not qualify under PSL.
  • Urban Cooperative Bank (UCB) investments in bonds issued by NHB/HUDCO on or after April 1, 2007, are not eligible for PSL classification.

c) Renewable Energy Sector Expansion

• The RBI has broadened the list of eligible purposes for which loans can be classified under the ‘renewable energy’ category, encouraging clean energy financing.

d) Weaker Sections Category Expanded

• The list of eligible borrowers under the ‘weaker sections’ has been expanded to ensure wider credit coverage.

Priority Sector Coverage at a Glance

Priority Sector	Included Categories
Agriculture	Crop loans, agri-infrastructure, ancillary activities
Micro, Small & Medium Enterprises (MSME)	Manufacturing, services, and trading-based MSMEs
Export Credit	Credit to exporters for goods and services
Education	Loans to students for higher education in India and abroad
Housing	Enhanced limits as per revised guidelines
Social Infrastructure	Loans for schools, healthcare facilities, drinking water facilities, sanitation, etc.
Renewable Energy	Loans for solar, wind, and other renewable energy projects with broadened classification

The RBI’s revised PSL framework is expected to:

• Strengthen credit availability to critical sectors of the economy.
• Boost housing affordability by significantly increasing eligible loan limits.
• Encourage sustainable development through increased renewable energy lending.
• Expand support for the weaker sections, driving inclusive growth.

Source: The Economic Times

10. Payments Council of India Flags Financial Sustainability Challenges for UPI Ecosystem

Context:

The Payments Council of India (PCI) has highlighted that the current ₹1,500 crore financial incentive for FY25 covers only a small portion of the ₹10,000 crore annual cost needed to maintain and expand UPI services.

• The incentive outlay has been reduced from ₹3,500 crore in FY24 to ₹1,500 crore in FY25, raising concerns about the financial viability of the ecosystem.

Zero MDR Policy

• The Zero MDR (Merchant Discount Rate) policy, in place since January 2020, has put further pressure on the financial sustainability of digital payment service providers.
• MDR is a fee that merchants pay to payment service providers for each transaction, and its absence removes a critical revenue stream for maintaining and enhancing the payment infrastructure.

Industry Recommendations to the Government

In a letter to Prime Minister Narendra Modi, PCI has proposed:

• Introduction of MDR for RuPay debit cards across all merchants.
• A reasonable MDR of 0.3% for UPI transactions, applicable only to large merchants.
• This structure aligns with existing MDR rates for other payment instruments:
  • Credit cards: ~2%
  • Non-RuPay debit cards: ~0.9%

Rationale Behind the Proposal

• According to PCI, large merchants (approx. 50 lakh out of 6 crore merchants) are already familiar with MDR on other payment modes and can absorb this nominal charge without disruption.
• Small merchants (90% of digital payment-accepting merchants), defined by RBI as those with turnover below ₹20 lakh per annum, would remain unaffected.
• PCI believes that implementing MDR for large merchants will:
  • Ensure sustainable monetisation for service providers.
  • Support continued investments in innovation, cybersecurity, merchant onboarding, compliance, and IT infrastructure.
  • Prevent disruption at the grassroots level in digital payment adoption.

The PCI has made a clear case for introducing nominal MDR charges for RuPay debit and UPI payments among large merchants to ensure the long-term sustainability of India’s digital payments ecosystem. Without such monetisation mechanisms, maintaining and scaling UPI services amid rising costs will remain a major challenge.

BL

12. IMF-World Bank Report

Context:

India’s financial system has become stronger and more diversified since 2017, according to the latest Financial System Assessment Program (FSAP) report conducted jointly by the IMF and the World Bank. The IMF recently released this report, highlighting significant regulatory, structural, and operational improvements.

Key Highlights of the FSAP Report

a. Non-Banking Financial Companies (NBFCs)

• Better capitalized to withstand economic shocks.
• Lending growth remains moderate and sustainable.
• RBI’s scale-based regulatory framework and liquidity coverage requirements have strengthened oversight.

b. Banking and Financial Regulations

• Improved regulatory frameworks by RBI.
• Enhanced monitoring mechanisms for system-wide stability.

c. Public Digital Infrastructure

• Significant strides in digital financial access through platforms like UPI, Aadhaar, and DigiLocker.
• Financial inclusion has improved, but further legal and tax reforms are needed to sustain and deepen this progress.

d. Insurance Sector

• Stable and well-regulated, but growing risks from climate change and cybersecurity threats require enhanced risk management frameworks.

Challenges and Recommendations

Area	Challenges Identified	Recommendations by IMF
Legal and Tax Frameworks	Need strengthening to support long-term growth	Implement robust legal reforms and consistent tax structures
Climate Change Risk	Emerging threat to financial stability	Develop climate risk guidelines for insurers and banks
Cybersecurity	Increasing risk to digital financial systems	Strengthen cyber-resilience frameworks
Public Digital Infrastructure	Risk of exclusion without proper safeguards	Broaden outreach, ensure equitable digital access

India’s financial system is resilient, diverse, and well-regulated, with NBFCs and banks better capitalized to manage shocks. The RBI’s proactive regulatory reforms, along with public digital infrastructure, have significantly broadened financial access. However, climate risks, cybersecurity concerns, and the need for legal and tax improvements remain priority areas to ensure long-term financial system stability and growth.

Source: TOI

Economy

1. India’s Private Sector Output Growth Slows in March: HSBC Flash PMI

Key Highlights:

Overall Output Trends:

• Private sector output in India grew at a slower pace in March compared to February.
• The slowdown came amid a quicker expansion in manufacturing and a softer increase in services activity, according to the HSBC Flash Purchasing Managers’ Index (PMI).

PMI Index Data

• The PMI index, compiled by S&P Global, fell to 58.6 in March from 58.8 in February.
• This index measures monthly changes in combined output of manufacturing and service sectors.
• The index has stayed above the neutral 50 mark for the 44th consecutive month, indicating continued growth.

Manufacturing Sector Performance:

• Manufacturing was the stronger segment in March, showing quicker increases in sales and output.
• The improvement in operating conditions was broadly aligned with FY25 averages.
• Manufacturers attributed output growth to positive demand trends, with new orders rising and extending expansion for over three and a half years.

Services Sector Performance:

• The service sector recorded softer growth, with the second-slowest pace of expansion since November 2023.
• Competitive pressures intensified in the services industry, slowing its momentum.

While India’s private sector output growth moderated slightly in March, the manufacturing sector outpaced services, reflecting stronger demand and robust new orders. The service sector, however, faces increasing competitive pressures that may temper growth momentum in the near term.

2. Parliamentary Panel Urges MoSPI to Salvage Interim Data from 7th Economic Census

Key Highlights

Call for Interim Data:

• The Parliamentary Standing Committee on Finance has urged the Ministry of Statistics and Programme Implementation (MoSPI) to salvage and release interim data from the incomplete 7th Economic Census.
• The committee noted the long gap of over 12 years between the 6th Economic Census (2013) and the proposed 8th Census, creating a large data void.

Fieldwork Challenges:

• Fieldwork for the 7th Economic Census began in 2019 and took two years to complete due to the Covid-19 pandemic.
• West Bengal did not participate, despite communication from the Union government.
• As of December 2023, 12 states/UTs had not approved the provisional results, with approval still pending in 10 states/UTs, preventing finalisation.

Expenditure and Concerns:

• The total outlay for the 7th Economic Census was ₹ 913 crore, of which ₹ 691.04 crore has been utilised.
• The committee criticized the outcome, stating: “even after spending such a huge sum, the purpose of the whole exercise was defeated.”

Ministry’s Response and Future Plans:

• The ministry admitted that the third-party fieldwork model did not perform as expected, with minimal role of states/UTs.
• For the upcoming 8th Economic Census, the ministry plans:
  • Full ownership by states/UTs in engaging enumerators and deploying supervisors.
  • Extended fieldwork timeline from 3 months in the 7th Census to 9 months, allowing sufficient time for data collection.

Importance of the Economic Census:

• The Economic Census provides critical data on:
  • Geographical clusters of economic activity
  • Ownership patterns
  • Employment statistics in establishments across the country
• This data is used for socio-economic developmental planning at both state and district levels.

Context from the 6th Economic Census:

• Results from the 6th Economic Census (released in 2016) showed 60 million establishments employing 131 million people.

The Parliamentary Committee has highlighted the urgent need for interim data from the 7th Economic Census to partially justify the expenditure and fill the growing data gap. The ministry has acknowledged shortcomings and proposed stronger state involvement and longer timelines for the 8th Economic Census.

3. India to Expand Extended Producer Responsibility (EPR) for a Circular Economy

Government’s Circular Economy Push

India is preparing to expand Extended Producer Responsibility (EPR) guidelines to additional sectors in an effort to foster a circular economy, according to a senior government official.

• Ved Prakash Mishra, Joint Secretary, Ministry of Environment, Forest & Climate Change (MoEF&CC), announced the move at a FICCI event.
• The government, with the support of NITI Aayog, has identified 10-11 sectors for potential implementation.

Need for Policy Shift

• Mishra emphasized the urgency of moving away from the traditional “take, make, and dispose” model.
• Circular economy policies under EPR are seen as essential for sustainable resource management and environmental protection.

What is Extended Producer Responsibility (EPR)?

• EPR is a policy approach that makes producers accountable for the entire lifecycle of their products.
• This includes:
  • Product design for longevity and recycling
  • Post-consumer waste management
  • End-of-life disposal and environmental impact mitigation

Future Outlook

• The planned expansion of EPR guidelines is expected to create opportunities for:
  • Waste reduction
  • Resource efficiency
  • Circular production models across multiple industries
• This move aligns with India’s broader sustainability goals and its commitment to a greener future.

The expansion of Extended Producer Responsibility (EPR) across more sectors will mark a major step toward building a circular economy in India. With the government’s proactive approach, industries will be encouraged to adopt responsible production practices, enhancing resource conservation and environmental sustainability.

Source: The Economic Times

4. RBI’s $10-Billion Dollar-Rupee Swap Auction Receives Over 2x Bids and Higher Premium

Context:

The Reserve Bank of India’s (RBI) $10-billion dollar-rupee buy-sell swap auction saw bids of $22.3 billion, more than double the notified amount, reflecting robust market demand.

Premium Surpasses Expectations

• The average premium of accepted bids stood at 592 paisa, slightly above market expectations of 580 to 590 paisa.
• However, this premium was lower than the 673 paisa recorded during the first swap auction held on February 28, 2024.

Purpose of the Swap Auction

• The RBI conducted the auction to address the persistent liquidity deficit in the banking system that began in mid-December 2024.
• According to RBI data, the daily average system liquidity deficit in March was ₹1.6 lakh crore.
• In this buy-sell swap structure:
  • The RBI buys dollars and injects rupee liquidity.
  • The second leg, scheduled for March 2028, involves the RBI selling back $10 billion at the prevailing exchange rate plus the agreed premium of 592 paisa.

Market Reactions

• Rajeev Pawar, Head of Treasury, Ujjivan Small Finance Bank, said: “The higher premiums show that people are willing to pay more to swap their dollars.”
• Gopal Tripathi, Head of Treasury, Jana Small Finance Bank, commented: “Since this is the second long-term $10-billion auction, the lower premium compared to last time is positive for the market.”

Key Takeaways

Aspect	Details
Auction Size	$10 billion
Total Bids Received	$22.3 billion (2x oversubscribed)
Average Premium	592 paisa (vs. expected 580-590 paisa)
Previous Auction Premium (Feb ’24)	673 paisa
System Liquidity Deficit (March)	₹1.6 lakh crore daily average
Second leg settlement	March 2028

The strong demand and premium levels from the RBI’s second long-term swap auction reflect the market’s confidence in using RBI facilities to manage liquidity needs. The lower premium compared to February signals easing pressure in the market, which is a positive indicator for banking system liquidity and forex stability.

TET

Agriculture

1. Impact of Rainfall Variability on Indian Agriculture

Context:

A recent RBI bulletin (March 2025) highlights increasing rainfall variability as a growing threat to India’s food crop production. Despite advancements in modern irrigation and climate-resilient seeds, agriculture remains heavily dependent on the southwest monsoon.

Rainfall and Crop Production Relationship

• Monsoon precipitation directly affects kharif crop yields.
• Erratic rain leads to:
  • Disrupted crop cycles
  • Increased pest and plant disease outbreaks
• Good monsoons improve both kharif and rabi season productivity due to:
  • High soil moisture
  • Elevated reservoir levels for rabi sowing (wheat, mustard, lentils)

Monsoon Timing and Crop-Specific Effects

• Deficient rain in June–July:
  • Harmful for maize, pulses, soybeans (delayed sowing and weak early growth)
• Excess rain during harvest:
  • Adversely impacts oilseed yields

Recent Production Trends

• In the current financial year:
  • Kharif food grain production: up by 7.9%
  • Rabi food grain production: up by 6%
• Contributed by abundant monsoon and normal winter conditions.

Monsoon Outlook for 2025

• While IMD has not yet released its forecast, the World Meteorological Organization predicts a normal to above-normal rainfall season.

Climate Change and Long-Term Challenges

• Extreme weather events are becoming frequent:
  • 2024 saw 322 extreme weather days, affecting 4.07 million hectares of crop area.
  • Heatwaves and floods exceeded 250 days last year.
• Key risks:
  • Reduced crop yields
  • Decline in nutritional value of produce
  • Soil degradation

Recommendations for Climate-Resilient Agriculture

• Shift to climate-adaptive farming practices:
  • Improved drainage systems
  • Effective flood and drought management
  • Use of agritech and smart technologies
• Emphasis on natural farming:
  • Different from traditional organic farming
  • Promotes soil regeneration and diverse cropping
  • Offers sustainable income for farmers

India’s agriculture is at a critical juncture with growing climate risks. The RBI study emphasizes that without multi-pronged climate mitigation, adaptation, and long-term water management strategies, India’s food security could be jeopardized. Natural farming, climate-resilient policies, and sustainable farming techniques must become national priorities to safeguard future productivity and nutritional security.

Facts To Remember

1. New Zealand qualifies for 2026 FIFA World Cup

New Zealand reached the World Cup for only the third time with a 3-0 win over New Caledonia.

2. Ajay Seth is new finance secretary

The appointments committee of the Cabinet on Monday approved the appointment of Ajay Seth as finance secretary in the Union Ministry of Finance. Seth is currently the secretary in the department of economic affairs in the finance ministry and holds additional charge as revenue secretary.

3. Modi to inaugurate Hisar airport on April 14

 Prime Minister Narendra Modi will visit Haryana on April 14 to inaugurate the Maharaja Agrasen International Airport in Hisar, the BJP’s state chief Mohan Lal Badoli. 

4. AQI in poor zone, GRAP-I enforced in city yet again

Commission for Air Quality Management (CAQM) reimposed GRAP stage-I curbs on Monday as the city’s air quality turned poor, with an average AQI of 206 against moderate 194 a day earlier.

5. Lok Sabha Passes Finance Bill 2025, Tax Relief Up to ₹12 Lakh Announced

The Lok Sabha has passed the Finance Bill, 2025. The Bill seeks to give effect to the financial proposals of the Central Government for the financial year 2025-2026.

6. Sharjah Revolutionizes Agricultural Technology with High-Protein Wheat Farming

In a remarkable triumph of agricultural innovation, the Mleiha Wheat Farm in Sharjah has successfully demonstrated how cutting-edge technology and strategic planning can transform harsh desert landscapes into productive agricultural zones. 

7. 1,737 Gram Panchayats developed under ‘Sansad Adarsh Gram Yojana’ since 2014: Govt

The government has said that one thousand 737 Gram Panchayats across the country have been developed under the ‘Sansad Adarsh Gram Yojana’ so far by completing the projects and activities planned under the Village Development Plan. 

8. Minister George Kurian inaugurates conference on Minority Empowerment in New Delhi

Minister of State for Minority Affairs George Kurian today inaugurated a conference of State Minorities Commissions in New Delhi. 

9. Nagaland govt to set up Solar Mission team for PM Surya Ghar Muft Bijli Yojana implementation

The Nagaland government will set up a Solar Mission Team at the Directorate level and a Solar Mission Cell at the Secretariat level to oversee the implementation of the PM Surya Ghar Muft Bijli Yojana.

10. BCCI announces Indian Women’s team retainership for 2024-25

The Board of Control for Cricket in India (BCCI) has announced the retainers for the Indian Women’s team for the 2024-25 season, covering the period from the 1st of October, 2024 to 30th of September, 2025.