Daily Current Affairs (DCA) 13&14 July, 2025

Daily Current Affairs Quiz
13 & 14 July, 2025

National Affairs

1. PARAKH Rashtriya Sarvekshan 2024

Context:

The PARAKH Rashtriya Sarvekshan 2024, a landmark assessment conducted by the Government of India, has delivered a blunt message: enrolment may be high, but learning outcomes remain dismal. Conducted across 21 lakh students in Classes 3, 6, and 9 in over 74,000 schools and 781 districts, the survey underlines deep foundational learning deficits in the Indian school system.

Key Findings:

• Literacy Gaps:
  • 43% of Class 6 students are unable to grasp the main idea of a text.
• Numeracy Crisis:
  • 63% of Class 9 students struggle with basic mathematics.
• The findings reinforce trends observed in earlier reports like Pratham’s ASER, showing foundational learning gaps persist across rural and urban India.

Underlying Causes

• Socioeconomic Disparities: Students from households with educated parents, access to electricity, and digital tools show better performance.
• Systemic Gaps:
  • Poor school infrastructure,
  • Undertrained teachers,
  • Overemphasis on rote learning,
  • Limited parental engagement,
  • Weak assessment systems.

Policy Implications and Reform Priorities

The NEP 2020 rightly emphasizes foundational literacy and numeracy (FLN) as a national priority. However, classroom-level reforms alone are insufficient without a supportive ecosystem.

Recommendations:

1. Move beyond rote learning:
   • Shift curriculum and assessment models toward critical thinking and conceptual clarity.
2. Early identification & support:
   • Use regular assessments to detect struggling students early and provide remedial learning.
3. Teacher training overhaul:
   • Expand access to continuous professional development, with a focus on pedagogy, FLN, and digital integration.
4. School-family partnerships:
   • Foster community engagement and parental involvement to reinforce learning at home.
5. Leadership development:
   • As per UNESCO’s Global Education Monitoring Report 2024-25, standardise principal training, promote gender-inclusive hiring, and ensure clearly defined school leadership roles.

2. India’s Carbon Credit Trading Scheme (CCTS)

Context:

India has announced emissions intensity of production targets under the CCTS for eight heavy industrial sectors:

• Aluminium
• Cement
• Paper and Pulp
• Chlor-alkali
• Iron and Steel
• Textile
• Petrochemicals
• Petroleum Refineries

These sectors are part of India’s compliance carbon market, where companies that beat their emission reduction targets can trade excess credits.

India’s Carbon Credit Trading Scheme (CCTS) & Carbon Pricing Framework

What is CCTS?

• CCTS = Market-based mechanism under Indian Carbon Market (ICM) for trading carbon credits.
• Focus: Emission intensity-based regulation of greenhouse gas (GHG) emissions.
• Replaces PAT by shifting from energy-saving certificates to Carbon Credit Certificates (CCC), where each CCC = 1 tonne of CO₂ equivalent (tCO₂e) reduced.

Key Mechanisms of CCTS

1. Compliance Mechanism
   • Applicable to energy-intensive sectors like iron & steel, aluminium, cement, fertilizers, refineries, pulp & paper, textiles.
   • Entities must meet sector-specific GHG intensity targets.
   • Entities exceeding targets earn CCCs; underperformers must buy credits.
2. Offset Mechanism
   • Allows voluntary participation from non-obligated sectors (e.g., agriculture, afforestation).
   • Enables generation and trade of carbon credits.

Why is CCTS Important?

• Helps India meet its Nationally Determined Contributions (NDCs) — aim to reduce emission intensity by 45% by 2030.
• Encourages clean technology adoption, carbon capture, and private sector participation.

What is Carbon Pricing?

• An economic tool that assigns a cost to carbon emissions to shift financial burden to polluters.
• Provides a market signal to reduce emissions or invest in green technologies.

Carbon Pricing Mechanisms:

1. Emissions Trading System (ETS)
   • Cap-and-Trade: Emissions capped; firms trade allowances.
   • Baseline-and-Credit: Firms emitting less than baseline can sell credits.
2. Carbon Tax
   • Fixed price per tonne of CO₂ emitted.
3. Crediting Mechanism
   • Project-based emissions reductions generate tradable carbon credits.

Challenges in Effective Implementation of CCTS

• Target Setting: Must balance ambition with industry capacity; wrong targets may distort CCC value.
• Compliance Weakness: Under PAT, over 50% of certificates went untraded; no penalties enforced.
• Delayed Credit Issuance: Undermines market confidence.
• Transparency & MRV (Monitoring, Reporting, Verification): Gaps in emissions data affect credibility.
• Risk of Double Counting: Especially in international trade contexts.

Governance Mechanisms

• Mission LiFE (Lifestyle for Environment)
  • Global mission to promote sustainable living.
  • Goal: Mobilize 1 billion people by 2028 for pro-planet actions.
• Green Credit Program (GCP)
  • Voluntary market to incentivize tree plantations on degraded forest lands.
  • Credits awarded based on verified reforestation efforts.
• National Steering Committee for Indian Carbon Market (NSCICM)
  • Apex body guiding rules, targets, and governance of carbon markets.
• Bureau of Energy Efficiency (BEE)
  • Established in 2002, key body implementing carbon market and energy efficiency norms.

TH & PIB

3. Special Economic Zone (SEZ) Amendment Bill

Context:

The long-awaited Special Economic Zone (SEZ) Amendment Bill is expected to be introduced in the upcoming Monsoon Session of Parliament, marking a major overhaul of the existing SEZ Act, 2005. The Union Cabinet’s approval is expected shortly before the Bill is tabled.

Why Is the Amendment Needed?

• The current SEZ law, enacted in 2005, has not met expectations in attracting investment in manufacturing.
• The reforms aim to align India’s SEZ framework with global trade realities, improve ease of doing business, and boost local manufacturing and employment.

Key Proposed Changes

1. Duty Forgone on Raw Materials for Domestic Sales

• Current Rule: SEZ units must pay full customs duty on the finished product sold in the Domestic Tariff Area (DTA).
• Proposed Change: Duty to be charged only on raw materials, not on the finished goods.
• Expected Impact: Makes SEZ-to-DTA sales less costly, encouraging domestic linkages and higher capacity utilisation.

2. Introduction of Reverse Job Work

• What It Means: SEZ units can now carry out partial manufacturing for companies in the domestic area.
• Current Restriction: Manufacturing only allowed for exports.
• Expected Impact:
  • Helps manage seasonality in exports.
  • Reduces idle capacity.
  • Improves employment generation and technology sharing.

3. Payment in Indian Currency for SEZ Services

• Current Rule: Services from SEZs must be paid in foreign exchange.
• Proposed Change: Indian Rupee payments to be permitted.
• Expected Impact: Brings parity between services and manufacturing sectors within SEZs, promotes greater domestic service demand.

What Are SEZs?

• SEZs are special enclaves deemed foreign territory for trade and tax purposes, offering incentives to promote exports and foreign investment.
• However, over the years, the model has seen limited success in attracting major manufacturing investments.

BS

Banking/Finance

1. Rise in Informal Borrowing Among Poor Households in India

Context:

Despite near-universal access to bank accounts (96% households as per NFHS-5), recent data from CMIE and Piramal Enterprises show a rising trend in informal borrowing among low-income households due to limited access to formal credit.

What is Informal Credit?

• Credit from non-regulated sources such as:
  • Moneylenders, pawnshops, friends/family, chit funds, etc.
• No formal documentation, transparency, or consumer protection.
• Often high-interest and exploitative in nature.

Key Trends in Informal Credit Usage

• Formal Credit Fall:
  • 4.2% decline in formal credit among poor households (CMIE, 2023).
• Rising Informal Borrowing:
  • 5.8% rise in informal borrowing among households earning ₹1–2 lakh annually.
• Rural Dependence:
  • 75% of rural adults still rely on informal credit in some form (NABARD, 2019).
• Volume of Informal Lending:
  • Informal credit market estimated at ₹1.4 lakh crore (CRISIL, 2022).

Causes of Informal Credit Reliance

1. Access Barriers to Formal Credit:
   • No collateral, income proof, or credit history.
   • Bureaucratic hurdles and digital exclusion.
2. Perceived High Risk by Banks/NBFCs:
   • Low-income borrowers often seen as non-creditworthy.
   • Result: Credit rationing and risk-averse lending.
3. Mismatch in Credit Demand-Supply:
   • Poor need small-ticket, instant, and flexible loans, often for consumption or emergencies.
   • Formal institutions unable to cater to urgent, localized needs.

Implications for Financial Inclusion

• Financial Access ≠ Financial Empowerment:
  • While bank account ownership is high, credit access remains poor.
• Risk of Debt Trap:
  • Informal loans often carry high-interest rates and can push borrowers into a cycle of debt.
• Undermines Digital and Formal Finance Ecosystem:
  • Weakens trust in formal credit institutions and limits growth of digital lending platforms.

TH

2. Mobile Money

Context:

Globally, over 1 billion people remain unbanked, relying solely on cash for everyday transactions. This exposes them to security risks, travel burdens, and limited economic opportunity.

What is Mobile Money?

• Mobile money enables financial transactions via text messages on mobile phones.
• Unlike traditional banking, it does not require internet access or physical bank branches.
• Users can:
  • Send/receive money using a phone number as an account
  • Deposit/withdraw money through mobile money agents (e.g., kiosks, shops)

Global Growth

• In 2010: 13 million mobile money accounts worldwide
• By 2023: 640+ million accounts

3. Banks Prefer VRRR Over SDF as Overnight Rates Firm Up

Context:

The amount parked by banks in the Reserve Bank of India’s (RBI’s) Standing Deposit Facility (SDF) has dropped sharply to ₹1.2 trillion, down from ₹3.26 trillion at the beginning of July 2025. This shift follows RBI’s Variable Rate Reverse Repo (VRRR) auctions aimed at absorbing surplus liquidity.

What is Variable Rate Reverse Repo (VRRR)?

• VRRR is a liquidity absorption mechanism where banks park surplus funds with the RBI.
• Conducted via auctions, the interest rate is market-determined through competitive bidding.
• Typically, the VRRR rate is equal to or slightly higher than the standard reverse repo rate.
• VRRR is deployed when the banking system has excess liquidity, making it an effective tool to:
  • Curb inflationary pressures
  • Maintain monetary stability

What is the Standing Deposit Facility (SDF)?

The Standing Deposit Facility (SDF) is a tool introduced by the RBI to absorb surplus liquidity from the banking system without providing any collateral.

Traditionally, when banks had excess funds, they could deposit them with the RBI and earn interest through the reverse repo mechanism, but the RBI had to provide government securities as collateral in exchange. The SDF changes that—it lets banks park their surplus funds securely with the RBI while earning an interest rate, and the RBI doesn’t need to part with any assets in return.

BS

4. RBI’s Nod for Voluntary Gold Pledge Likely to Boost Micro and Agri Lending

Context:

The Reserve Bank of India (RBI) has clarified that voluntary pledging of gold for small-value loans will not violate collateral-free lending norms. This regulatory relief is expected to enhance priority sector lending (PSL) to farmers and micro enterprises, sectors critical to inclusive credit growth.

Key Highlights:

New RBI Clarification

• Borrowers voluntarily pledging gold to avail loans up to:
  • ₹2 lakh for agriculture
  • ₹10 lakh for MSMEs
    will not be treated as collateral-based lending under PSL norms.
• This move aligns practice with borrower preference and lender risk appetite, without violating the spirit of collateral-free mandates.

Impact on Agricultural Loans

• Small and marginal farmers are set to benefit the most.
• Banks often hesitate to offer unsecured agricultural loans due to high risk and poor credit history in rural segments.
• Gold-backed loans for crop cultivation or allied activities (e.g., dairy, poultry) can now be counted as agricultural lending under PSL.

Boost to MSME Lending

• MSMEs are entitled to collateral-free loans up to ₹10 lakh under PSL.
• Many borrowers, however, prefer pledging gold voluntarily to avoid strict scrutiny under unsecured lending.
• RBI’s clarification will allow banks to extend more loans to micro enterprises while maintaining PSL classification.

Regulatory Compliance and PSL Targets

• As per PSL norms:
  • Banks must allocate 40% of Adjusted Net Bank Credit (ANBC) to priority sectors.
  • Sub-targets include:
    • 18% for agriculture and allied sectors, with:
      • 14% for non-corporate farmers
      • 10% for small and marginal farmers
    • 7.5% for micro enterprises
• Earlier, at least one bank reclassified agri gold loans as retail gold loans to avoid perceived regulatory violation.
• The new RBI stance removes such ambiguity, allowing accurate PSL reporting without regulatory concerns.

TET

5. The CAMSPay’s New Payment Gateway

Context:

CAMS Limited has announced the launch of The CAMSPay’s New Payment Gateway, a next-generation digital payment infrastructure designed to support high-volume, real-time transactions while ensuring full compliance with evolving Reserve Bank of India (RBI) norms.

India’s Digital Payments Surge

• India’s digital payments market is on track to hit $10 trillion by 2030, powered by e-commerce expansion, fintech adoption, and digital-first financial services.
• Over 5 billion digital transactions are processed monthly, with peak volumes surging beyond 30%.
• This rapid growth has exposed the limitations of legacy payment gateways, which struggle with downtime, fraud risk, and slow settlements.

CAMSPay’s Key Differentiators

1. Regulatory Readiness
   • Fully compliant with RBI norms
   • PCI DSS certified
   • Supports tokenization and data localization, essential for today’s security mandates
2. Scalability and Real-Time Capabilities
   • Built for minimal latency and high availability
   • Engineered to scale with exponential transaction growth
3. Advanced Security Framework
   • Multi-factor authentication
   • AI-driven fraud detection
   • End-to-end encryption protocols

Payment Gateway

A payment gateway is a service that authorizes and processes credit card or debit card payments for online or physical stores. It acts as a bridge between the merchant and the customer’s bank, securely transmitting payment information and ensuring transactions are completed. Essentially, it’s a digital point-of-sale system for online businesses. 

6. RBI Expands Basel III Credit Rating Options for IFSC Exposures

Context:

The Reserve Bank of India (RBI) has amended its Basel III Capital Regulations to broaden the credit rating agencies banks can use for assessing risk weights on claims involving non-resident corporates located in International Financial Services Centres (IFSCs).

Key Highlights:

• New Rating Agency Permitted:
  • Scheduled Commercial Banks (excluding Local Area Banks, Payments Banks, and Regional Rural Banks) can now use CareEdge Global IFSC Ltd ratings for credit risk assessment.
• Previous Status:
  • Banks were limited to using international ratings from Fitch, Moody’s, and Standard & Poor’s.
• Purpose of Amendment:
  • To enhance credit risk assessment options under the Basel III standardized approach for banks with international exposures, particularly in IFSCs.
• RBI-Specified Risk Weight Mapping for CareEdge Global IFSC Ltd:
  • AAA – 20%
  • AA – 30%
  • A – 50%
  • BBB – 100%
  • BB & below – 150%

7. Slice Launches India’s First UPI-Enabled Physical Bank Branch

Key Highlights:

• Location: Koramangala, Bengaluru
• Launched by: Fintech firm Slice
• India’s first: Physical bank branch with UPI-powered banking

Features of the UPI-Integrated Branch

• UPI-integrated ATMs
• Instant account opening
• Cash transactions via UPI (no need for debit cards)
• Cash deposit and withdrawal using UPI apps

Additional Launch

• UPI-linked credit card:
  • No joining or annual fee
  • Enables QR-code payments directly from credit line

Significance

• The branch is a pilot project for potential nationwide expansion of UPI-driven physical branches.

Agriculture

1. India–Saudi Fertilizer Agreement for DAP Imports

Context:

Three major Indian fertilizer firms—Indian Potash Ltd (IPL), KRIBHCO, and Coromandel International—have signed a five-year agreement with Saudi Arabia’s Ma’aden to import 3.1 million metric tonnes (MMT) of DAP fertilizer annually starting FY 2025–26.

Key Highlights of the Agreement

• Nature of Agreement:
  • Long-term supply pact to secure Di-Ammonium Phosphate (DAP) imports.
• Parties Involved:
  • Indian Companies: IPL, KRIBHCO, Coromandel
  • Saudi Company: Ma’aden (Saudi Arabian Mining Company)
• Duration:
  • Five years (FY 2025–30), extendable by mutual consent.
• Volume Commitment:
  • 3.1 MMT per annum of DAP—30 Lakh Metric Tonnes (LMT) total over five years.

Strategic Features

• Supply Security:
  • Guarantees long-term DAP availability for Indian farmers.
• Joint Research Collaboration:
  • Includes India-specific R&D for alternative and customized fertilizers to improve soil health and crop productivity.
• Bilateral Investment Facilitation:
  • Explores Indian PSU investments in Saudi mining & fertilizer sectors and reciprocal Saudi investments in India’s agri-inputs ecosystem.
• Policy Dialogue Platform:
  • Bilateral team created for cooperation on fertilizer policy, trade logistics, and mineral sourcing.

Significance for India

• Fertilizer Security Backbone:
  • DAP is a crucial component for India’s nutrient-balanced agriculture. A stable supply ensures food security and price stability.
• Reduced Import Volatility:
  • Provides predictable access to fertilizer imports amidst global supply disruptions and geopolitical risks.
• Boosts Strategic Ties with Saudi Arabia:
  • Strengthens India’s engagement with Saudi Arabia beyond energy—towards agricultural and mineral cooperation.
• Custom Fertilizer Innovation:
  • Supports region-specific fertilizer development for India’s diverse agro-climatic zones.

The Indian Express

Facts To Remember

1. ‘Enrolment nearly done in third phase trials for India’s first dengue vaccine’

Following an announcement by the Indian Council of Medical Research (ICMR) and Panacea Biotec Ltd. to initiate third phase trials, about 8,000 of the targeted 10,000 participants have enrolled in the third phase of clinical trials for a dengue vaccine in India, Manoj Murhekar, Director, National Institute of Epidemiology, ICMR, Chennai, told The Hindu.

2. Harikrishnan becomes India’s 87th GM

For seven years, Harikrishnan A. Ra. remained an International Master. In the meantime, he competed in many tournaments in his quest to become a Grandmaster but fell short after coming agonisingly close.

3. Kota Srinivasa Rao, veteran Telugu actor, passes away

Veteran Telugu actor Kota Srinivasa Rao, who gave a new style to villainous and comedic roles, passed away in the early hours of Sunday at his residence in Hyderabad. He was 83.

4. India joins military exercise Talisman Sabre in Australia

India, along with 18 other nations, is participating in Talisman Sabre 2025, a major bilateral military drill led by Australia that commenced. Now in its 11th iteration, the Talisman Sabre is the largest and most sophisticated warfighting exercise ever conducted in the continent.

5. England women clinch last-ball thriller to end series on a high

England women clinched the final T20I of the series by five wickets in a nail-biting finish at Birmingham, chasing down India’s 168-run target off the very last ball of the match to finish on a high.

6. Liquidity Flows Back to RBI, into SDF: Surplus Rises Amid Weak Credit Demand

The Reserve Bank of India’s (RBI) Standing Deposit Facility (SDF) witnessed a record-high average quarterly balance of ₹2.6 lakh crore in Q1FY26 (April–June 2025), reflecting banks’ preference to park surplus funds amid muted credit growth and persistent liquidity overhang.

7. Kotak Mahindra Bank, IndiGo Relaunch Co-Branded Credit Cards With BluChip Travel Rewards

Kotak Mahindra Bank and IndiGo Airlines have relaunched their co-branded credit cards under IndiGo’s newly introduced loyalty program, BluChip. The refreshed offering aims to turn everyday spending into travel rewards, catering to both casual travellers and frequent flyers.

8. Sierra Leone’s Tiwai Island Wins UNESCO Heritage Status

Tiwai Island, a 12 sq. km. tropical forest nestled in Sierra Leone’s Moa River and home to one of the world’s highest concentrations of primates, has officially been inscribed on the UNESCO World Heritage list. The recognition marks a monumental achievement in the country’s environmental conservation efforts — a dream nurtured for decades by environmentalist Tommy Garnett.