Daily Current Affairs (DCA) 7&8 June, 2026

Daily Current Affairs Quiz
7&8 June, 2026

National Affairs

1. The Power of Mangroves Over Seawalls

Source: The Hindu

Context:

The landfall of Cyclone Dana near Bhitarkanika on the Odisha coast has put the spotlight on the powerful protective role of coastal mangroves against storm surges and cyclones, in contrast to expensive engineered seawalls and groynes. Indian coastal states have spent ₹2,641 crore over the last decade on hard engineered protection, even as the National Coastal Mission’s budget fell from ₹195 crore in 2022-23 to ₹50 crore in 2024-25. The editorial argues that India must shift toward Ecosystem-based Adaptation (EbA), using mangroves, seagrass meadows, and coral reefs as dynamic, self-sustaining buffers for the 11,000 km coastline and the 250 million people living near it.

India’s Coastal Vulnerability

• India’s coastline: about 11,000 km.
• Coastal population at risk: about 250 million people.
• Cyclone Dana made landfall near Bhitarkanika, Odisha, where mangroves played a clear shielding role.

Why Mangroves Work as Climate Shields?

• Dense aerial root networks break the energy of incoming waves, reducing storm surge damage.
• They trap organic sediment at the roots, helping coastlines build up against rising seas.
• They are “blue carbon” sinks, locking carbon at rates much higher than tropical rainforests.
• They are self-repairing and strengthen over time, unlike concrete seawalls that degrade.
• Research finds India is a global hotspot for coastal EbA, where mangroves protect more people per hectare than almost any other country.

Why Seawalls Are Not the Best Long-Term Answer?

• They are expensive to build and maintain.
• They degrade under repeated cyclone and tidal stress.
• They are rigid, while coastlines move.
• They can shift erosion downstream, harming neighbouring stretches.
• They do not provide any biodiversity, carbon, or livelihood co-benefits.

What is Ecosystem-based Adaptation (EbA)?

• EbA is a nature-centric climate strategy that uses biodiversity and ecosystem services to help communities adapt to climate change.
• It uses natural habitats like mangroves, seagrass meadows, coral reefs, salt marshes, wetlands, and forests as dynamic buffers against climate hazards.
• Unlike “grey” engineered infrastructure (concrete walls, groynes), EbA harnesses living ecosystems that adapt and self-sustain over time.
• Promoted by the Convention on Biological Diversity (CBD) and the United Nations Framework Convention on Climate Change (UNFCCC) as climate-adaptation best practice.

What are Mangroves and Where Are They Found in India?

• Mangroves are salt-tolerant trees and shrubs that grow in the intertidal zones along tropical and subtropical coasts.
• Their aerial and stilt roots trap sediment and break waves.
• They are rich biodiversity habitats, home to fish, crustaceans, reptiles, and birds.
• India’s major mangrove ecosystems include:
  • Sundarbans in West Bengal, the world’s largest mangrove forest, a UNESCO World Heritage Site.
  • Bhitarkanika in Odisha, known for saltwater crocodiles and Olive Ridley turtles.
  • Pichavaram and Muthupet in Tamil Nadu.
  • Coringa in Andhra Pradesh.
  • Mahanadi delta, Krishna delta, Godavari delta.
  • Gulf of Kutch and Gulf of Khambhat in Gujarat.
  • Andaman and Nicobar Islands.

What is Blue Carbon and Why Does It Matter?

• Blue carbon is carbon dioxide captured and stored by coastal and marine ecosystems like mangroves, seagrass meadows, salt marshes, and tidal flats.
• Per unit area, mangroves store more carbon than most terrestrial forests.
• Their soil in particular acts as a long-term carbon sink.
• Protecting and restoring these ecosystems thus delivers climate mitigation as well as adaptation.

What is the National Coastal Mission?

• A central scheme to protect and manage India’s coastal areas, including mangroves, coral reefs, biodiversity, and coastal communities.
• Comes under the Ministry of Environment, Forest and Climate Change (MoEFCC).
• Funds activities like mangrove restoration, coral reef protection, capacity building, awareness, and shoreline management.

Key Initiatives India Has Taken

• MISHTI Programme: Mangrove Initiative for Shoreline Habitats and Tangible Incomes, announced in the Union Budget 2023-24, for mangrove plantation along coastlines and salt-pan lands.
• Integrated Coastal Zone Management (ICZM) Project: World Bank-supported project for coastal zone management in selected states.
• Coastal Regulation Zone (CRZ) Notification: A regulatory framework for activities along the coast.
• National Action Plan on Climate Change (NAPCC) and its National Coastal Mission.

Practice MCQs

Q1. With reference to India’s coastal vulnerability and the case for mangroves, consider the following statements:

1. India’s coastline is about 11,000 km long.
2. Around 250 million people in India live in areas directly threatened by coastal climate hazards.
3. Indian coastal states spent about ₹2,641 crore on hard engineered protection over the last decade.
4. The National Coastal Mission’s budget fell from ₹195 crore in 2022-23 to ₹50 crore in 2024-25.

How many of the above statements are correct?

(a) Only one (b) Only two (c) Only three (d) All four (e) None

Q2. With reference to the role of mangroves as climate shields, consider the following statements:

1. Mangrove root networks break the energy of incoming waves and reduce storm surge damage.
2. Mangroves trap sediment and help coastlines build up against rising sea levels.
3. Mangrove ecosystems sequester carbon at rates many times higher than terrestrial tropical rainforests.
4. Mangrove ecosystems are rigid and degrade rapidly, requiring constant repair like concrete seawalls.

Which of the above are correct?

(a) 1, 2 and 3 only (b) 1, 3 and 4 only (c) 2 and 4 only (d) 1 and 4 only (e) All four

(Statement 4 is wrong; mangroves are self-repairing and grow stronger over time, unlike seawalls that degrade.)

Q3. With reference to India’s mangrove ecosystems, consider the following statements:

1. The Sundarbans, spread between India and Bangladesh, is the world’s largest mangrove forest and a UNESCO World Heritage Site.
2. Bhitarkanika in Odisha is known for saltwater crocodiles and Olive Ridley turtle nesting sites.
3. Pichavaram and Muthupet are notable mangrove ecosystems in Tamil Nadu.
4. India has no significant mangrove ecosystems on its west coast.

Which of the above are correct?

(a) 1, 2 and 3 only (b) 1, 3 and 4 only (c) 2 and 4 only (d) 1 and 4 only (e) All four

(Statement 4 is wrong; India has significant mangrove ecosystems on the west coast, especially in the Gulf of Kutch and Gulf of Khambhat in Gujarat.)

Q4. With reference to Ecosystem-based Adaptation (EbA) and related Indian initiatives, consider the following statements:

1. The MISHTI Programme stands for “Mangrove Initiative for Shoreline Habitats and Tangible Incomes”.
2. The Coastal Regulation Zone (CRZ) Notification is a regulatory framework to protect India’s coastal ecosystems.
3. The Integrated Coastal Zone Management (ICZM) Project is supported by the World Bank.
4. The National Coastal Mission is part of the National Action Plan on Climate Change (NAPCC).

How many of the above statements are correct?

(a) Only one (b) Only two (c) Only three (d) All four (e) None

Answer Key

1. (d), All four statements are correct.
2. (a), Statements 1, 2, 3 are correct; Statement 4 is wrong because mangroves are self-repairing and grow stronger over time.
3. (a), Statements 1, 2, 3 are correct; Statement 4 is wrong because India has significant mangrove ecosystems on its west coast.
4. (d), All four statements are correct.

Exam Relevance

Exam	Relevance
UPSC Prelims	GS Paper III on Environment, Biodiversity, Climate Change (Mangroves, EbA, Blue Carbon, CRZ)
UPSC Mains	GS Paper I on Geography; GS Paper III on Environment, Disaster Management, Climate Change
BPSC and State PCS	Environment, Geography, Disaster Management, Current Affairs
Banking and NABARD	General Awareness on environment
NABARD Grade A	Environment, rural sustainability, climate adaptation

2. PM E-DRIVE Scheme

Context:

The Delhi Government plans to induct 2,800 air-conditioned low-floor electric buses (e-buses) under the Centre’s PM E-DRIVE scheme, to strengthen public transport connectivity and promote sustainable mobility. The announcement was made by Delhi Transport Minister Pankaj Kumar Singh. The new fleet will be a mix of 9-metre and 12-metre buses, mainly serving underserved and peripheral areas. The government aims to expand Delhi’s overall bus fleet to nearly 14,000 buses by 2028-29.

About PM E-DRIVE Scheme:

• Full form: Pradhan Mantri Electric Drive Revolution in Innovative Vehicle Enhancement (PM E-DRIVE).
• Launched in 2024 by the Ministry of Heavy Industries.
• Total outlay: about ₹10,900 crore (for a defined period).
• It replaced the earlier FAME-II scheme (Faster Adoption and Manufacturing of (Hybrid and) Electric Vehicles).
• Covers electric two-wheelers, three-wheelers, e-buses, e-trucks, e-ambulances, and EV charging infrastructure.
• Aims to boost EV adoption, reduce fossil fuel dependence, cut air pollution, and support domestic EV manufacturing.
• E-buses are a major focus area, with a target of supporting tens of thousands of e-buses across state transport undertakings.

Practice MCQs

Q1. With reference to the Delhi Government’s plan to induct e-buses, consider the following statements:

1. Delhi plans to induct 2,800 air-conditioned low-floor electric buses.
2. The fleet will be a mix of 1,400 nine-metre and 1,400 twelve-metre e-buses.
3. The e-buses are to be inducted under the Centre’s PM E-DRIVE scheme.
4. Delhi aims to expand its overall bus fleet to about 14,000 buses by 2028-29.

How many of the above statements are correct?

(a) Only one (b) Only two (c) Only three (d) All four (e) None

Q2. With reference to the PM E-DRIVE scheme, consider the following statements:

1. PM E-DRIVE stands for “Pradhan Mantri Electric Drive Revolution in Innovative Vehicle Enhancement”.
2. The scheme was launched in 2024 by the Ministry of Heavy Industries.
3. It replaced the earlier FAME II scheme as India’s flagship EV scheme.
4. PM E-DRIVE supports electric two-wheelers, three-wheelers, e-buses, e-trucks, e-ambulances, and EV charging infrastructure.

How many of the above statements are correct?

(a) Only one (b) Only two (c) Only three (d) All four (e) None

Answer Key

1. (d), All four statements are correct.
2. (d), All four statements are correct.
3. (a), Statements 1, 2, 3 are correct; Statement 4 is wrong because e-buses reduce noise pollution.
4. (a), Statements 1, 2, 3 are correct; Statement 4 is wrong because PM E-DRIVE is administered by the Ministry of Heavy Industries.

3. India’s GDP Grows 7.7 Per Cent in FY26

Source: The Hindu

Context:

The MoSPI’s Provisional Estimates put India’s GDP growth at 7.7 per cent in FY 2025-26, with Q4 at 7.8 per cent. To understand what these numbers really mean and how they are computed, it helps to know what GDP and GNP are, how they differ, and the three methods used to calculate national income. These concepts are core to UPSC, RBI Grade B, SSC, Banking, and State PCS economics modules.

What is Gross Domestic Product (GDP)?

• GDP is the total monetary value of all final goods and services produced inside the geographical territory of a country in a specified period (usually a year or a quarter).
• The word “Gross” means no deduction for depreciation (wear and tear of capital).
• The word “Domestic” means produced inside the country’s borders, regardless of who produces it (Indian or foreign-owned firms).
• The word “Product” means value of goods and services produced.

Examples:

• A Maruti Suzuki car made in Manesar, Haryana, is part of India’s GDP.
• A Hyundai car made in Chennai is also part of India’s GDP, even though Hyundai is a Korean company.
• An Infosys software service delivered from Bengaluru is part of India’s GDP.

GDP can be calculated at:

• Constant Prices (Real GDP): Inflation-adjusted, using a base year’s prices. This shows real growth.
• Current Prices (Nominal GDP): Uses today’s prices, includes inflation effect.
• Factor Cost: Price received by the producer (excluding indirect taxes, adding subsidies).
• Market Prices: Price paid by the consumer (including indirect taxes, excluding subsidies).
• Relationship: GDP at Market Prices = GDP at Factor Cost + Indirect Taxes – Subsidies.

What is Gross National Product (GNP)?

• GNP is the total monetary value of all final goods and services produced by the residents of a country (Indian citizens and Indian firms), regardless of where in the world they produce it.
• The word “National” means produced by Indians, whether inside India or abroad.
• Formula: GNP = GDP + Net Factor Income from Abroad (NFIA).

Where:

• Net Factor Income from Abroad (NFIA) = Income earned by Indian residents abroad minus Income earned by foreigners inside India.

Examples:

• An Indian software engineer working in the United States sends income to India. That income adds to India’s GNP, but not to India’s GDP.
• A Korean executive of Hyundai working in Chennai earns income in India. That income adds to India’s GDP, but not to India’s GNP (it adds to South Korea’s GNP).

What is the Difference between GDP and GNP?

• GDP is location-based: It counts production within India’s borders, regardless of who produces it.
• GNP is citizenship-based: It counts production by Indian residents anywhere in the world.
• GDP = GNP – NFIA.
• GNP = GDP + NFIA.

Other Related Aggregates

• Net Domestic Product (NDP) = GDP – Depreciation.
• Net National Product (NNP) = GNP – Depreciation.
• National Income (NI) = NNP at Factor Cost = NNP at Market Prices – Indirect Taxes + Subsidies.
• Personal Income (PI): Income actually received by households.
• Disposable Income (DI): Personal Income minus direct taxes.
• Per Capita Income (PCI) = National Income / Population.

What are the Three Methods of Calculating National Income?

There are three standard methods used to compute national income. In theory, all three should give the same number, because every act of production creates value, income, and spending at the same time. In practice, statisticians use all three together for cross-checking.

1. Production Method (Value-Added Method or Output Method)

• Adds up the value added at each stage of production by all firms in the economy.
• Value Added = Value of Output – Value of Intermediate Goods used.
• Used by the MoSPI for GVA (Gross Value Added) by sector.

Example:

• A farmer sells wheat for ₹10.
• A flour mill turns it into flour and sells it for ₹15 (value added = ₹5).
• A bakery turns flour into bread and sells it for ₹25 (value added = ₹10).
• Total value added = ₹10 + ₹5 + ₹10 = ₹25, which equals the final price.

Steps:

• Identify all producing sectors: agriculture, industry, services.
• Compute gross value of output in each sector.
• Subtract value of intermediate inputs to get GVA.
• Sum GVAs across sectors and adjust for indirect taxes, subsidies, and depreciation to get GDP, NDP, etc.

2. Income Method

• Adds up all incomes earned by factors of production in the economy in a year.
• Factors of production: land, labour, capital, and enterprise.
• Incomes earned: rent (for land), wages and salaries (for labour), interest (for capital), profit (for enterprise).

Formula:

• National Income = Rent + Wages + Interest + Profit + Mixed Income (of self-employed).

Steps:

• Identify all factors of production and the income each earns.
• Sum up all factor incomes.
• This gives National Income at Factor Cost.

Notes:

• Mixed income is important in India, since many people are self-employed (farmers, small traders, artisans) and their income mixes elements of wages, profit, and interest.
• Transfer payments (pensions, scholarships, subsidies received) are not included, because they are not earned by current production.

3. Expenditure Method

• Adds up all spending on final goods and services in the economy.
• Captures what the economy spends on output.

Formula:

• GDP = C + I + G + (X – M)

Where:

• C = Private Final Consumption Expenditure (PFCE) by households.
• I = Gross Fixed Capital Formation (GFCF) plus changes in inventories (investment).
• G = Government Final Consumption Expenditure (GFCE).
• X = Exports of goods and services.
• M = Imports of goods and services.
• (X – M) = Net exports.

Example application from India’s FY 2025-26 GDP figures:

• Strong PFCE (C) growth indicates household consumption.
• Strong GFCF (I) growth indicates firms’ investment in factories, machinery, infrastructure.
• GFCE (G) is government spending on services like public administration, defence, and education.
• Net exports (X-M): India typically has a trade deficit, so this is negative, but services exports and remittances help.

Which Method Does India Use?

• India uses a combination of all three methods.
• The Production Method (Value-Added) is used heavily for sectoral GVA (agriculture, industry, services).
• The Expenditure Method is used for demand-side breakdown (PFCE, GFCF, GFCE, exports and imports).
• The Income Method is more complex due to data limitations, but is embedded in factor income estimates for various sectors.

Practice MCQs

Q1. With reference to the difference between GDP and GNP, consider the following statements:

1. GDP is based on the geographical territory of a country, regardless of who produces it.
2. GNP is based on the citizenship/residency of producers, regardless of where they produce it.
3. GNP = GDP + Net Factor Income from Abroad (NFIA).
4. GDP includes income earned by Indian citizens working abroad.

Which of the above are correct?

(a) 1, 2 and 3 only (b) 1, 3 and 4 only (c) 2 and 4 only (d) 1 and 4 only (e) All four

(Statement 4 is wrong; income earned by Indian citizens abroad is part of GNP, NOT GDP.)

Q2. With reference to the methods of calculating national income, consider the following statements:

1. The Production (Value-Added) Method sums up the value added at each stage of production.
2. The Income Method adds up rent, wages, interest, profit, and mixed income earned by factors of production.
3. The Expenditure Method adds up consumption, investment, government spending, and net exports.
4. The three methods are expected to give very different totals because they measure different aspects of the economy.

Which of the above are correct?

(a) 1, 2 and 3 only (b) 1, 3 and 4 only (c) 2 and 4 only (d) 1 and 4 only (e) All four

(Statement 4 is wrong; the three methods should give the same total, since they measure the same economic activity from three angles.)

Q3. With reference to national income concepts in India, consider the following statements:

1. GDP at Market Prices = GDP at Factor Cost + Indirect Taxes – Subsidies.
2. NDP = GDP – Depreciation.
3. National Income (NI) is generally measured as NNP at Factor Cost.
4. Per Capita Income (PCI) = National Income divided by the total area of the country.

Which of the above are correct?

(a) 1, 2 and 3 only (b) 1, 3 and 4 only (c) 2 and 4 only (d) 1 and 4 only (e) All four

(Statement 4 is wrong; Per Capita Income = National Income divided by Population, NOT area.)

Q4. With reference to the Expenditure Method, consider the following statements:

1. PFCE is the largest component of expenditure-side GDP in India.
2. GFCF measures investment in long-lived assets like factories, machinery, and infrastructure.
3. GFCE is the spending by the government on the public sector and services.
4. Net Exports always make a positive contribution to India’s GDP.

Which of the above are correct?

(a) 1, 2 and 3 only (b) 1, 3 and 4 only (c) 2 and 4 only (d) 1 and 4 only (e) All four

(Statement 4 is wrong; India typically has a trade deficit, so net exports usually make a negative contribution to GDP, especially on the merchandise side.)

Answer Key

1. (a), Statements 1, 2, 3 are correct; Statement 4 is wrong because income earned by Indian citizens abroad is part of GNP, not GDP.
2. (a), Statements 1, 2, 3 are correct; Statement 4 is wrong because the three methods should give the same total.
3. (a), Statements 1, 2, 3 are correct; Statement 4 is wrong because Per Capita Income = National Income / Population.
4. (a), Statements 1, 2, 3 are correct; Statement 4 is wrong because India typically has a trade deficit, making net exports negative.

4. Jan Samarth Portal Marks 4th Anniversary

Source: PIB

Context:

The Ministry of Finance marked the 4th anniversary of the Jan Samarth Portal, India’s unified single-window digital gateway that links central government credit-linked schemes directly to beneficiaries and lenders. Launched on 6 June 2022, the portal lets applicants check eligibility, apply for loans, and receive digital approvals from various financial institutions in one place, instead of approaching multiple ministries. It currently hosts 16 credit-linked schemes across 8 sectors, supports 8 languages, and is positioned as part of India’s Digital Public Infrastructure (DPI) for financial inclusion.

The Portal in Brief

• Name: Jan Samarth Portal.
• Launch date: 6 June 2022.
• Launched by: Ministry of Finance, Government of India.
• Anniversary marked: 4 years as of June 2026.
• Nature: First-of-its-kind unified single-window digital gateway for central government credit-linked schemes.
• Total schemes hosted: 16.
• Sectors covered: 8 core consumer sectors.
• Languages supported: 8 (English, Hindi, Bengali, Marathi, Gujarati, Telugu, Tamil, Kannada).

8 Sectors and Schemes on the Portal

• Business Activity Loans: PMEGP, Pradhan Mantri Mudra Yojana (PMMY), PM SVANidhi, and Startup Loans (START).
• Livelihood Loans: DAY-NRLM (Deendayal Antyodaya Yojana, National Rural Livelihoods Mission).
• Agriculture Loans: Kisan Credit Card (KCC) and KCC-Fisheries.
• Agri Infrastructure: Agriculture Infrastructure Fund (AIF) and ACABC (Agri Clinics and Agri Business Centres).
• Renewable Energy: Roof Top Solar Installation Financing.
• Home Loans: Urban Housing Loans for EWS, LIG, and MIG.
• Credit Guarantee: Emergency Credit Line Guarantee Scheme (ECLGS) 5.0.
• Financing on e-NWR: e-Kisan Upaj Nidhi (EKUN).

Key Features of the Portal

• Multilingual support in 8 languages, including Bengali, Marathi, Gujarati, Telugu, Tamil, and Kannada.
• Centralised scheme basket of 16 credit-linked schemes across 8 sectors.
• Intelligent eligibility matching: Applicants answer a few simple questions and the rule engine identifies the best-suited scheme.
• End-to-end database integration: Real-time verification checks pulling records from government databases.
• Automated digital in-principle approval: Application files are automatically forwarded to the chosen bank branch.
• Assisted mode: Bank Business Correspondents (BCs) and rural digital partners can apply on behalf of citizens with low digital literacy.

What is Digital Public Infrastructure (DPI)?

• A set of shared digital platforms and protocols built or backed by the state, that anyone, public or private, can use.
• Key examples in India: Aadhaar (identity), UPI (payments), DigiLocker (documents), Account Aggregator (financial data sharing), ABDM (health), ONDC (e-commerce), ULI (lending), and Jan Samarth (credit-linked schemes).
• India is widely seen as a global leader in DPI.

How Does It Connect to Financial Inclusion?

• Many Indians have bank accounts under PM Jan Dhan Yojana, but credit access remains uneven.
• Schemes like PMMY, PM SVANidhi, KCC, and AIF can help, but awareness and application friction are barriers.
• Jan Samarth removes friction by bringing the schemes online, matching automatically, and routing to banks digitally.
• It complements other tools like the Universal Lending Interface (ULI), the Account Aggregator framework, ABDM, and the TransUnion CIBIL credit score ecosystem.

Practice MCQs

Q1. With reference to the Jan Samarth Portal, consider the following statements:

1. It was launched by the Ministry of Finance on 6 June 2022.
2. It is a unified single-window digital gateway linking central government credit-linked schemes with beneficiaries and lenders.
3. It currently hosts 16 credit-linked schemes across 8 sectors.
4. It is available in 8 Indian languages, including Bengali, Marathi, Gujarati, Telugu, Tamil, and Kannada.

How many of the above statements are correct?

(a) Only one (b) Only two (c) Only three (d) All four (e) None

Q2. Consider the following schemes hosted on the Jan Samarth Portal:

1. PMEGP, PMMY, and PM SVANidhi.
2. Kisan Credit Card (KCC) and KCC-Fisheries.
3. Agriculture Infrastructure Fund (AIF) and ACABC.
4. National Rural Health Mission (NRHM).

Which of the above are hosted on the Jan Samarth Portal?

(a) 1, 2 and 3 only (b) 1, 3 and 4 only (c) 2 and 4 only (d) 1 and 4 only (e) All four

(Statement 4 is wrong; NRHM is a health scheme, NOT a credit-linked scheme on Jan Samarth.)

Q3. With reference to the features of the Jan Samarth Portal, consider the following statements:

1. The portal uses intelligent eligibility matching, picking the best-suited scheme based on the applicant’s profile.
2. It issues automated digital in-principle sanctions, with application files routed to the chosen bank branch.
3. It offers an assisted mode through Bank Business Correspondents and rural digital partners for citizens with low digital literacy.
4. The portal works only in English and Hindi, with no support for other Indian languages.

Which of the above are correct?

(a) 1, 2 and 3 only (b) 1, 3 and 4 only (c) 2 and 4 only (d) 1 and 4 only (e) All four

(Statement 4 is wrong; the portal is available in 8 languages, NOT only English and Hindi.)

Q4. With reference to India’s Digital Public Infrastructure (DPI), consider the following statements:

1. Aadhaar, UPI, DigiLocker, Account Aggregator, ABDM, ONDC, ULI, and Jan Samarth are examples of India’s DPI stack.
2. The Jan Samarth Portal is positioned as part of India’s DPI drive for financial inclusion.
3. India is widely seen as a global leader in Digital Public Infrastructure.
4. DPI in India is exclusively built and operated by private fintech firms, with no role for the state.

Which of the above are correct?

(a) 1, 2 and 3 only (b) 1, 3 and 4 only (c) 2 and 4 only (d) 1 and 4 only (e) All four

(Statement 4 is wrong; DPI in India is largely state-built or state-backed, with public-private collaboration, not purely private.)

Answer Key

1. (d), All four statements are correct.
2. (a), Statements 1, 2, 3 are correct; Statement 4 is wrong because NRHM is a health scheme, not a credit-linked scheme on Jan Samarth.
3. (a), Statements 1, 2, 3 are correct; Statement 4 is wrong because the portal is available in 8 Indian languages.
4. (a), Statements 1, 2, 3 are correct; Statement 4 is wrong because India’s DPI is largely state-built or state-backed.

Exam Relevance

Exam	Relevance
UPSC Prelims	GS Paper II on Government Schemes (Jan Samarth, PMMY, PM SVANidhi, KCC); GS Paper III on Indian Economy (DPI, Financial Inclusion)
UPSC Mains	GS Paper II on Welfare schemes; GS Paper III on Indian Economy, Financial Inclusion, MSME, Agriculture credit
BPSC and State PCS	Schemes, Economy, Current Affairs
Banking (RBI Gr B, SBI PO, IBPS, NABARD)	Very high importance, government credit-linked schemes, DPI, financial inclusion
RBI Grade B	Core area on financial inclusion and DPI
NABARD Grade A	Rural credit, KCC, AIF, SHGs
SIDBI Grade A	MSME finance, PMEGP, Mudra, ECLGS
SEBI Grade A and IRDAI Grade A	Financial inclusion and digital infrastructure

5. Kaziranga National Park Records 30 Raptor and 6 Stork Species in Rapid Bird Survey

Source: The Hindu

Context:

The Kaziranga National Park and Tiger Reserve in Assam has recorded 30 species of raptors and 6 species of storks in a rapid survey conducted between the last week of February and 2 March 2026, by a 10-member team in collaboration with researchers from Gauhati University. The findings were released on World Environment Day (5 June 2026). The survey shows Kaziranga’s strong role as a refuge for birds of prey and wetland birds, including the Pallas’s fish eagle and the greater adjutant stork.

What is the Kaziranga National Park and Tiger Reserve?

• Located in Assam, in the floodplains of the Brahmaputra River.
• Spread across the districts of Golaghat, Nagaon, Sonitpur, Biswanath, and Karbi Anglong.
• Declared a National Park in 1974.
• Designated a UNESCO World Heritage Site in 1985.
• Notified as a Tiger Reserve in 2006.
• It is home to about two-thirds of the world’s population of the One-Horned Rhinoceros (Rhinoceros unicornis).
• It is also home to wild elephants, tigers, Asiatic water buffalo, hog deer, swamp deer, Gangetic dolphins, and pythons.
• Its wetlands, grasslands, and floodplains make it a prime habitat for raptors, storks, and migratory birds.

What is a Raptor and Why are They Important?

• A raptor (bird of prey) is a bird that hunts and feeds on other animals, using sharp talons and beaks and powerful flight.
• Includes eagles, hawks, falcons, kites, vultures, harriers, buzzards, and owls.
• Raptors are top predators and indicators of ecosystem health.
• A decline in raptors, especially vultures, usually points to habitat loss, poisoning, electrocution, or contamination of the food chain.

What is a Stork and Why are They Important?

• Storks are large, long-legged, long-necked wading birds that live in wetlands and grasslands.
• They feed on fish, frogs, crabs, snakes, insects, and small mammals.
• They are bio-indicators of wetland health.
• The Greater Adjutant Stork (or Hargila) is listed as Endangered by the IUCN and is largely concentrated in Assam, with major colonies in Boragaon and Dadara near Guwahati.

What is the Significance of Kaziranga for Birds of Prey?

• Kaziranga’s wetlands, grasslands, and Himalayan-foothill forests offer diverse habitats for raptors.
• It harbours about 50 of India’s 112 raptor species in its broader landscape.
• It is the last global stronghold of the Pallas’s Fish Eagle, with 10 active nests recorded in 2020.
• The presence of large vulture populations, like the Himalayan Griffon, signals a healthy ecosystem and adequate carrion availability.

Practice MCQs

Q1. With reference to the recent bird survey at Kaziranga National Park, consider the following statements:

1. The survey recorded 30 species of raptors and 6 species of storks.
2. A total of 217 individual raptors and 266 individual storks were recorded.
3. The survey was conducted by a 10-member team in collaboration with Gauhati University researchers.
4. The findings were released on World Environment Day.

How many of the above statements are correct?

(a) Only one (b) Only two (c) Only three (d) All four (e) None

Q2. Consider the following statements about birds in Kaziranga:

1. The Asian Openbill was the most abundant stork in the survey.
2. The Greater Adjutant Stork was the rarest stork, with only 3 individuals recorded.
3. The Himalayan Griffon Vulture was the most common raptor, with 69 sightings.
4. The Booted Eagle and the White-tailed Eagle were among the rarest raptors with one sighting each.

How many of the above statements are correct?

(a) Only one (b) Only two (c) Only three (d) All four (e) None

Q3. With reference to Kaziranga National Park and Tiger Reserve, consider the following statements:

1. Kaziranga is located in the floodplains of the Brahmaputra River in Assam.
2. It was declared a UNESCO World Heritage Site in 1985.
3. Kaziranga harbours about two-thirds of the world’s population of the One-Horned Rhinoceros.
4. Kaziranga is located in the Western Ghats region of India.

Which of the above are correct?

(a) 1, 2 and 3 only (b) 1, 3 and 4 only (c) 2 and 4 only (d) 1 and 4 only (e) All four

(Statement 4 is wrong; Kaziranga is in Assam, in the Brahmaputra floodplains, NOT the Western Ghats.)

Q4. With reference to raptors and storks in India, consider the following statements:

1. India is home to 112 species of raptors, including both diurnal and nocturnal birds of prey.
2. India houses 8 of the 20 stork species found in tropical and subtropical regions worldwide.
3. All 8 Indian stork species are found in Assam.
4. The Greater Adjutant Stork has been removed from the IUCN list of threatened species.

Which of the above are correct?

(a) 1, 2 and 3 only (b) 1, 3 and 4 only (c) 2 and 4 only (d) 1 and 4 only (e) All four

(Statement 4 is wrong; the Greater Adjutant Stork remains on the IUCN list, classified as Endangered.)

Answer Key

1. (d), All four statements are correct.
2. (d), All four statements are correct.
3. (a), Statements 1, 2, 3 are correct; Statement 4 is wrong because Kaziranga is in Assam, not the Western Ghats.
4. (a), Statements 1, 2, 3 are correct; Statement 4 is wrong because the Greater Adjutant Stork remains classified as Endangered by the IUCN.

5. Panchayat Advancement Index (PAI) Wins Gold at National Awards for e-Governance 2026

Source: PIB

Context

The Panchayat Advancement Index (PAI), a flagship data-driven evaluation platform of the Ministry of Panchayati Raj, has been selected for the Gold Award at the National Awards for e-Governance 2026. The award was given under Category VII, “Digital Transformation through the Use of Data Analytics in Digital Platforms”. The PAI is India’s first comprehensive, analytics-driven framework to assess, score, and rank the performance of Gram Panchayats, aligned with the nine themes of the Localisation of Sustainable Development Goals (LSDGs).

The Award

• Award: Gold Award at the National Awards for e-Governance 2026.
• Awardee: Panchayat Advancement Index (PAI).
• Implementing Ministry: Ministry of Panchayati Raj, Government of India.
• Award Category: Category VII, Digital Transformation through the Use of Data Analytics in Digital Platforms.
• Awards organised by: Department of Administrative Reforms and Public Grievances (DARPG), in coordination with the Ministry of Electronics and Information Technology (MeitY).
• Theme of 2026 awards: “Viksit Bharat 2047: AI-Enabled, Data-Driven and Secure Digital Governance”.
• Gold Award incentive: trophy, citation, and ₹10 lakh cash incentive for further technological scaling and R&D.

The 9 Themes of LSDGs (Used by PAI)

• Poverty-free and enhanced livelihood villages.
• Healthy villages.
• Child-friendly villages.
• Water-sufficient villages.
• Clean and green villages.
• Self-sufficient infrastructure villages.
• Socially secured villages.
• Villages with good governance.
• Women-friendly (engendered) development villages.

What is the Panchayat Advancement Index (PAI)?

• A data-driven evaluation framework that assesses, scores, and ranks Gram Panchayats across India.
• PAI 2.0 evaluates over 6 lakh Gram Panchayats.
• Built around the 9 themes of LSDGs.
• It tracks development metrics on a unified digital dashboard.
• Designed to drive competitive federalism at the grassroots level.
• Aims to eliminate subjective assessments, identify development gaps, and help states target funds more efficiently.

What is the Localisation of Sustainable Development Goals (LSDGs)?

• A framework launched by the Ministry of Panchayati Raj to adapt the United Nations Sustainable Development Goals (SDGs) to rural India through Gram Panchayats.
• The 17 SDGs are mapped into 9 thematic clusters for village-level action.
• The PAI tracks performance against these 9 themes.
• LSDGs operationalise the broader 2030 Agenda for Sustainable Development.

What is Competitive Federalism (and Cooperative Federalism)?

• Cooperative federalism: The Centre and States work together toward shared national goals.
• Competitive federalism: States (and now Panchayats) compete with each other on performance metrics, encouraging better governance through benchmarking.
• Indian examples include the NITI Aayog rankings on education (SEQI), health (Health Index), water (CWMI), SDGs (SDG India Index), and the Aspirational Districts Programme.
• The PAI extends competitive federalism to the Panchayat level, the lowest tier of governance.

What are the National Awards for e-Governance?

• India’s premier awards for digital governance excellence.
• Given since 2003.
• Organised by DARPG and MeitY.
• Recognise innovative digital initiatives by Central ministries, State governments, UTs, districts, and PSUs.
• Aim to build a repository of successful digital blueprints that can be replicated across regions.

Key Categories of the Awards (Examples)

• Excellence in Government Process Re-engineering.
• Excellence in providing citizen-centric delivery.
• Use of AI and emerging technologies.
• Use of Open Data and Data Analytics in digital platforms (this is where PAI won).
• Cybersecurity and digital trust.

Practice MCQs

Q1. With reference to the Panchayat Advancement Index (PAI), consider the following statements:

1. The PAI is a flagship initiative of the Ministry of Panchayati Raj.
2. PAI 2.0 evaluates more than 6 lakh Gram Panchayats across India.
3. It uses over 150 indicators and 230 distinct data points.
4. The PAI ranks Gram Panchayats based on the 17 Sustainable Development Goals directly, without any local thematic mapping.

How many of the above statements are correct?

(a) Only one (b) Only two (c) Only three (d) All four (e) None

(Statement 4 is wrong; the PAI uses the 9 themes of the Localisation of Sustainable Development Goals (LSDGs), NOT the 17 SDGs directly.)

Q2. With reference to the 9 themes of LSDGs used in the PAI, consider the following statements:

1. Poverty-free and enhanced livelihood villages is one of the themes.
2. Child-friendly villages and Women-friendly villages are also among the themes.
3. Water-sufficient villages, Clean and green villages, and Self-sufficient infrastructure villages are part of the framework.
4. Healthy villages and Socially secured villages are not part of the framework.

Which of the above are correct?

(a) 1, 2 and 3 only (b) 1, 3 and 4 only (c) 2 and 4 only (d) 1 and 4 only (e) All four

(Statement 4 is wrong; Healthy villages and Socially secured villages are part of the 9 themes.)

Q3. With reference to the National Awards for e-Governance, consider the following statements:

1. The awards are presented annually by DARPG in coordination with MeitY.
2. They have been given since 2003.
3. The PAI won the Gold Award under Category VII, “Digital Transformation through the Use of Data Analytics in Digital Platforms”.
4. The 2026 theme of the awards is “Viksit Bharat 2047: AI-Enabled, Data-Driven and Secure Digital Governance”.

How many of the above statements are correct?

(a) Only one (b) Only two (c) Only three (d) All four (e) None

Q4. With reference to Panchayati Raj and federal governance in India, consider the following statements:

1. The 73rd Constitutional Amendment of 1992 gave constitutional status to Panchayati Raj Institutions.
2. The Panchayati Raj system in India is generally a three-tier structure of Gram Panchayat, Panchayat Samiti, and Zilla Parishad.
3. Competitive federalism encourages states and local bodies to compete with each other on performance benchmarks.
4. The Localisation of SDGs framework operates only at the State level and is not relevant to Panchayats.

Which of the above are correct?

(a) 1, 2 and 3 only (b) 1, 3 and 4 only (c) 2 and 4 only (d) 1 and 4 only (e) All four

(Statement 4 is wrong; the LSDG framework is specifically designed to be relevant to Panchayats and villages.)

Answer Key

1. (c), Statements 1, 2, 3 are correct; Statement 4 is wrong because the PAI uses 9 LSDG themes, not the 17 SDGs directly.
2. (a), Statements 1, 2, 3 are correct; Statement 4 is wrong because Healthy villages and Socially secured villages are part of the framework.
3. (d), All four statements are correct.
4. (a), Statements 1, 2, 3 are correct; Statement 4 is wrong because LSDGs are specifically designed for the Panchayat level.

Exam Relevance

Exam	Relevance
UPSC Prelims	GS Paper II on Panchayati Raj, Governance, Government Schemes (PAI, LSDGs, e-Governance Awards)
UPSC Mains	GS Paper II on Governance, Panchayati Raj, Welfare, Federalism; GS Paper III on Sustainable Development
BPSC and State PCS	Polity, Panchayati Raj, Governance, Current Affairs
Banking and NABARD	General Awareness on rural development
NABARD Grade A	Very high importance, rural development, Panchayati Raj, SDGs

Banking/Finance

1. The RBI’s Urban Consumer Confidence Survey (UCCS) and Rural Consumer Confidence Survey (RCCS)

Source: TNIE

Context

The RBI’s May 2026 surveys show a broad-based weakening in consumer sentiment across both urban and rural India, with households turning more cautious about economic conditions, employment, and discretionary spending. The Urban Consumer Confidence Survey (UCCS) and the Rural Consumer Confidence Survey (RCCS) both fell in May, while the Inflation Expectations Survey of Households (IESH) showed rising price perceptions and expectations. Despite easing headline inflation and supportive monetary policy, households across both segments report strong price pressures, weaker spending intent, and growing caution about the future.

Urban Consumer Confidence Survey (UCCS), May 2026

• Current Situation Index (CSI): fell to 90.7 (vs 95.7 in March), third consecutive decline.
• Future Expectations Index (FEI): slipped to 118.7 (vs 120.2), lowest since September 2023.
• CSI below 100 = pessimism; FEI above 100 = households still expect some improvement ahead, but less than before.

Rural Consumer Confidence Survey (RCCS), May 2026

• Rural CSI: down to 95.2 (vs 98.0 in March).
• Rural FEI: down sharply to 119.3 (vs 125.1), reflecting weaker expectations across most parameters.
• Future sentiment remains optimistic but less so than before, pointing to growing caution.

Inflation Expectations Survey of Households (IESH), May 2026

• Urban:
  • Median inflation perception: up to 7.8 per cent (vs 7.2 per cent).
  • Three-month ahead expectations: 9.3 per cent (up 80 bps).
  • One-year ahead expectations: 9.3 per cent (up 50 bps).
• Rural:
  • Median inflation perception: up to 5.9 per cent (vs 5.6 per cent).
  • One-year ahead expectations: up to 7.2 per cent (vs 6.8 per cent).
• The RBI noted that both rural and urban inflation measures increased sequentially.

Sentiment on Prices, Economy, Employment, and Spending

• Urban: Households more pessimistic on current prices; assessment of current economic situation fell sharply.
• Rural: Net response on current prices stayed deeply negative at -90.0.
• Rural households moved into pessimistic territory on the current economic situation.
• Spending intentions softened in both segments, especially on discretionary (non-essential) expenditure.
• Rural households were especially cautious on non-essential spending, where future spending sentiment fell significantly.

What is the Urban Consumer Confidence Survey (UCCS)?

• A bi-monthly RBI survey of urban households across major Indian cities.
• Captures perceptions and expectations on the economy, employment, prices, income, and spending.
• Generates two key indices:
  • Current Situation Index (CSI): How households see things today vs a year ago.
  • Future Expectations Index (FEI): How households expect things a year from now.
• An index above 100 indicates optimism; below 100 indicates pessimism.

What is the Rural Consumer Confidence Survey (RCCS)?

• A bi-monthly RBI survey of rural households.
• Conducted to measure sentiment in rural India, which makes up about two-thirds of India’s population.
• Tracks the same parameters as the UCCS (general economic conditions, employment, prices, income, spending), but among rural respondents.
• Helps the RBI understand the divergence between urban and rural India.

What is the Inflation Expectations Survey of Households (IESH)?

• A bi-monthly RBI survey that captures households’ perceptions of current inflation and their expectations of inflation in the next 3 months and 12 months.
• It includes both urban and rural households.
• Important because inflation expectations feed into wage demands, consumption decisions, and pricing behaviour, and therefore future actual inflation.
• The RBI uses these expectations to guide monetary policy.

Why is There an Urban-Rural Divergence?

• Urban households are more exposed to fuel prices, services inflation, housing costs, and global price shocks.
• Rural households depend more on food prices and agricultural incomes, which can shift with the monsoon, MSP, and rural employment programmes.
• Urban inflation perceptions (7.8 per cent) are higher than rural (5.9 per cent), partly because urban basket has more services and non-food items.

What is the Net Response in the Survey?

• A statistical measure showing the balance of opinions.
• Calculated as: (percentage of respondents reporting “increase” or “improvement”) minus (percentage reporting “decrease” or “deterioration”).
• A positive number means net optimism; a negative number means net pessimism.
• A figure like -90 on current prices suggests most households report prices have risen, NOT fallen.

Key Terms

• Consumer Confidence Survey: A survey that measures households’ perceptions and expectations about the economy, jobs, prices, income, and spending.
• Current Situation Index (CSI): How households see their current situation compared to a year ago.
• Future Expectations Index (FEI): How households expect the situation to be one year ahead.
• Inflation Expectations Survey of Households (IESH): A bi-monthly RBI survey that captures households’ perceptions of current inflation and expectations for the next 3 months and 1 year.
• Median Inflation Perception: The middle value of inflation perceptions across all surveyed households, less affected by extreme values.
• Anchored Inflation Expectations: A situation where expectations of future inflation remain close to the central bank’s target, regardless of short-term fluctuations.
• Headline CPI Inflation: The overall consumer price inflation rate, including all categories like food, fuel, housing, and services.
• Net Response: The balance between positive and negative responses in a survey, used as a summary indicator.
• Discretionary Spending: Spending on non-essentials like leisure, electronics, dining out, travel.
• Essential Spending: Spending on food, fuel, housing, healthcare, transport-to-work, that households cannot easily cut.

Practice MCQs

Q1. With reference to the RBI’s May 2026 Urban Consumer Confidence Survey, consider the following statements:

1. The Current Situation Index (CSI) fell to 90.7 from 95.7 in March, the third consecutive decline.
2. The Future Expectations Index (FEI) slipped to 118.7, the lowest level since September 2023.
3. An index value above 100 indicates optimism, while below 100 indicates pessimism.
4. The May 2026 UCCS reading showed sharp optimism on the current economic situation.

How many of the above statements are correct?

(a) Only one (b) Only two (c) Only three (d) All four (e) None

(Statement 4 is wrong; the survey showed pessimism, NOT sharp optimism, on the current economic situation.)

Q2. With reference to the RBI’s May 2026 Rural Consumer Confidence Survey, consider the following statements:

1. The rural CSI declined to 95.2 from 98.0 in March.
2. The rural FEI fell sharply to 119.3 from 125.1.
3. Rural households were especially cautious on non-essential spending.
4. Rural households reported a net response of -90.0 on current price levels, suggesting most felt prices had risen.

How many of the above statements are correct?

(a) Only one (b) Only two (c) Only three (d) All four (e) None

Q3. With reference to the RBI’s Inflation Expectations Survey of Households (May 2026), consider the following statements:

1. Urban households raised their median inflation perception to 7.8 per cent in May from 7.2 per cent in March.
2. Urban one-year-ahead inflation expectations rose to 9.3 per cent, up 50 basis points.
3. Rural households’ one-year-ahead inflation expectations rose to 7.2 per cent from 6.8 per cent.
4. Inflation perceptions and expectations fell sharply in both urban and rural households in May 2026.

Which of the above are correct?

(a) 1, 2 and 3 only (b) 1, 3 and 4 only (c) 2 and 4 only (d) 1 and 4 only (e) All four

(Statement 4 is wrong; inflation perceptions and expectations rose, NOT fell, in both segments.)

Q4. With reference to the role of inflation expectations in monetary policy, consider the following statements:

1. If households expect higher inflation, they may spend now rather than later, pushing up demand and inflation.
2. Firms may pass on higher input costs faster if they believe inflation is here to stay.
3. Anchored inflation expectations help keep actual inflation closer to the central bank’s target.
4. Inflation expectations of households have no influence on monetary policy decisions.

Which of the above are correct?

(a) 1, 2 and 3 only (b) 1, 3 and 4 only (c) 2 and 4 only (d) 1 and 4 only (e) All four

(Statement 4 is wrong; inflation expectations are an important input into monetary policy decisions.)

Answer Key

1. (c), Statements 1, 2, 3 are correct; Statement 4 is wrong because the survey showed pessimism, not optimism.
2. (d), All four statements are correct.
3. (a), Statements 1, 2, 3 are correct; Statement 4 is wrong because inflation perceptions and expectations rose in both segments.
4. (a), Statements 1, 2, 3 are correct; Statement 4 is wrong because inflation expectations influence monetary policy decisions.

Exam Relevance

Exam	Relevance
UPSC Prelims	GS Paper III on Indian Economy (RBI surveys, Consumer sentiment, Inflation expectations)
UPSC Mains	GS Paper III on Indian Economy, Growth, Inflation, Monetary policy
BPSC and State PCS	Economy, Banking, Current Affairs
Banking (RBI Gr B, SBI PO, IBPS, NABARD)	Very high importance, RBI surveys, inflation expectations, sentiment
RBI Grade B	Core area, Economic and Social Issues, Finance and Management
SEBI Grade A and IRDAI Grade A	Macroeconomic awareness, household sentiment

2. Foreign Currency Non-Resident (Bank)

Source: The Economic Times

Context

The Central Government will nudge commercial banks to step up deposit mobilisation through the Foreign Currency Non-Resident (Bank) or FCNR(B) route, after the Reserve Bank of India announced it would bear the full hedging cost on fresh 3- to 5-year FCNR(B) deposits till 30 September 2026. Industry estimates suggest banks could raise up to USD 40 billion through this route, while PNB’s Managing Director Ashok Chandra sees overall inflows of USD 50 to 60 billion along with the concessional FX swap facility for PSUs. Banks are expected to reach out to NRI/OCI customers through both local and overseas branches in mission mode.

The Plan

• Centre to nudge banks to aggressively mobilise FCNR(B) deposits.
• Outreach will happen through local and overseas branches of Indian banks.
• Industry estimate: Banks may raise up to USD 40 billion through the FCNR(B) route.

What is an FCNR(B) Account?

• Full form: Foreign Currency Non-Resident (Bank) account.
• It is a term deposit (fixed deposit) held in India.
• The deposit is maintained in foreign currency, not in Indian rupees.
• It can be opened only by Non-Resident Indians (NRIs) and Persons of Indian Origin (PIOs) or Overseas Citizens of India (OCIs).
• It is a bank-level liability, not a sovereign borrowing.

Currencies Allowed

• USD (US Dollar), GBP (British Pound), EUR (Euro), JPY (Japanese Yen), AUD (Australian Dollar), CAD (Canadian Dollar), and a few others as permitted by the RBI.
• The depositor chooses one of the allowed currencies.

Maturity Range

• Minimum: 1 year.
• Maximum: 5 years.
• The RBI’s current swap window focuses on 3- to 5-year FCNR(B) deposits.

Tax Treatment

• Interest earned on an FCNR(B) account is tax-free in India for the NRI/OCI depositor.
• This is one of its biggest attractions for NRIs.

Why is the RBI Bearing the Hedging Cost?

• Banks raising dollar deposits in India have to hedge the currency risk because they will pay back in dollars in 3 to 5 years, but use the funds in rupees in the meantime.
• The hedging cost (about 3 per cent) usually eats into the bank’s spread.
• By absorbing this cost, the RBI effectively subsidises the bank, allowing it to offer attractive rates to NRIs while still being profitable.
• This is a rerun of the 2013 strategy, when about USD 30 billion was raised through a similar swap window during the taper tantrum.

Why Is This So Important Right Now?

• The rupee has been under pressure, with depreciation linked to FPI outflows, rising oil prices, and the West Asia conflict.
• India’s FCNR(B) mobilisation collapsed in FY26, with banks raising only about USD 946 million versus USD 7 billion in FY25.
• A fresh inflow surge can stabilise the rupee, shore up reserves, and ease pressure on the banking system.
• It is also a non-debt-creating capital flow that does not raise external sovereign debt.

How Does an FCNR(B) Inflow Help the Rupee?

• When NRIs deposit dollars in FCNR(B) accounts, dollars flow into India, boosting forex reserves.
• This increases dollar supply, which tends to strengthen the rupee against the dollar.
• It also gives the RBI more ammunition to intervene in the forex market if needed.

Key Terms

• FCNR(B) (Foreign Currency Non-Resident Bank) Account: A term deposit in India held by NRIs and OCIs in foreign currencies, with no rupee depreciation risk to the depositor.
• NRI (Non-Resident Indian): An Indian citizen residing abroad for tax or stay-related reasons.
• OCI (Overseas Citizen of India): A foreign citizen of Indian origin granted lifelong visa and certain rights in India (excluding voting).
• CRR (Cash Reserve Ratio): The share of deposits banks must keep with the RBI in cash, currently 3.0 per cent.
• SLR (Statutory Liquidity Ratio): The share of deposits banks must invest in government securities and approved instruments, currently 18.0 per cent.
• Hedging Cost: The cost of protecting against currency-rate movements, typically through swaps and forwards.
• Forex Swap: A contract to exchange currencies now and reverse the deal later at a pre-agreed rate, used by banks to manage currency risk.
• Net Interest Margin (NIM): The difference between a bank’s interest income and interest expense, as a percentage of interest-earning assets.
• Forex Reserves: A country’s stock of foreign currency, gold, IMF reserve position, and SDRs, held by the central bank, used to manage exchange rates and BoP needs.
• External Commercial Borrowings (ECBs): Foreign currency loans raised by Indian entities (including PSUs) from foreign lenders, subject to RBI rules.

Practice MCQs

Q1. With reference to the latest push for FCNR(B) deposit mobilisation, consider the following statements:

1. The Centre will nudge banks to step up FCNR(B) deposit mobilisation through local and overseas branches.
2. Industry estimates suggest banks could raise up to USD 40 billion through the FCNR(B) route.
3. The RBI will bear the full hedging cost for fresh 3- to 5-year FCNR(B) deposits till 30 September 2026.
4. The hedging cost typically borne by banks is around 3 per cent.

How many of the above statements are correct?

(a) Only one (b) Only two (c) Only three (d) All four (e) None

Q2. With reference to FCNR(B) accounts, consider the following statements:

1. FCNR(B) accounts can be opened only by NRIs and OCIs.
2. The deposits are held in foreign currencies like USD, GBP, EUR, JPY, AUD, and CAD.
3. The depositor does not bear rupee depreciation risk on FCNR(B) deposits.
4. Interest earned on FCNR(B) deposits is taxable in India for NRIs and OCIs.

Which of the above are correct?

(a) 1, 2 and 3 only (b) 1, 3 and 4 only (c) 2 and 4 only (d) 1 and 4 only (e) All four

(Statement 4 is wrong; interest on FCNR(B) deposits is tax-free in India for NRIs and OCIs.)

Q3. With reference to the regulatory treatment of FCNR(B) deposits, consider the following statements:

1. FCNR(B) deposits are exempt from Cash Reserve Ratio (CRR) requirements.
2. FCNR(B) deposits are exempt from Statutory Liquidity Ratio (SLR) requirements.
3. The CRR is currently 3.0 per cent.
4. The SLR is currently 18.0 per cent.

How many of the above statements are correct?

(a) Only one (b) Only two (c) Only three (d) All four (e) None

Q4. With reference to the macroeconomic impact of the FCNR(B) push, consider the following statements:

1. The new inflows are expected to bolster India’s forex reserves.
2. Bigger forex reserves can support the RBI’s ability to fight rupee depreciation pressures.
3. PNB MD Ashok Chandra estimated combined FCNR(B) and PSU forex inflows of USD 50 to 60 billion.
4. FCNR(B) inflows are classified as external sovereign debt and significantly raise India’s external debt burden.

Which of the above are correct?

(a) 1, 2 and 3 only (b) 1, 3 and 4 only (c) 2 and 4 only (d) 1 and 4 only (e) All four

(Statement 4 is wrong; FCNR(B) deposits are non-sovereign, bank-level liabilities and do not significantly raise India’s external sovereign debt burden in the way sovereign borrowings do.)

Answer Key

1. (d), All four statements are correct.
2. (a), Statements 1, 2, 3 are correct; Statement 4 is wrong because interest on FCNR(B) deposits is tax-free for NRIs and OCIs.
3. (d), All four statements are correct.
4. (a), Statements 1, 2, 3 are correct; Statement 4 is wrong because FCNR(B) deposits are not classified as external sovereign debt.

3. India Slips to 7th in Global Market Cap Rankings

Source: TH

Context

India has slipped to the 7th spot in global market capitalisation rankings in June 2026, with a total market valuation of USD 4.84 trillion, overtaken by South Korea which has moved to the 6th spot with USD 5.01 trillion. Earlier, in May 2026, India had already lost the 5th rank to Taiwan. The slide is attributed to heavy foreign selling, weak earnings growth, and India’s limited exposure to AI-linked stocks. Foreign investors have pulled out USD 26.4 billion from Indian stocks so far in 2026, and India’s weight in the MSCI Global Standard Index has dropped from 21 per cent (September 2024) to 12.3 per cent.

Current Global Market Cap Ranking (June 2026, Bloomberg data)

• 1st: United States with about USD 79.1 trillion.
• 2nd: China with about USD 16.3 trillion.
• 3rd: Japan with about USD 8.9 trillion.
• 4th: Hong Kong (SAR of China) with about USD 7.6 trillion.
• 5th: Taiwan with about USD 5.15 trillion.
• 6th: South Korea with about USD 5.01 trillion.
• 7th: India with about USD 4.84 trillion.

India’s Slide

• Earlier in May 2026, India was pushed to the 6th spot by Taiwan.
• In June 2026, India was pushed further down to the 7th spot by South Korea.
• India’s market valuation: USD 4.84 trillion.
• South Korea’s market valuation: USD 5.01 trillion.

Main Reasons for the Slide

• Heavy foreign selling: FPIs withdrew USD 26.4 billion from Indian stocks so far in 2026.
• Weak earnings growth in Indian-listed companies.
• Limited exposure to AI-linked stocks, where global investors are concentrating capital.

India’s Weight in MSCI Global Standard Index

• September 2024: about 21 per cent.
• Latest: down sharply to 12.3 per cent.

Why Does Global Market Cap Matter?

• It reflects the total value of all listed companies in a country, in US dollar terms.
• A rising market cap signals investor confidence, strong corporate earnings, and economic growth prospects.
• A falling market cap can signal foreign investor pullback, weak earnings, or sector exposure mismatches.
• It is a rough yardstick of a country’s financial market depth and global investor interest.
• Rankings shift due to stock prices, currency moves, IPOs, delistings, and macro sentiment.

Why Are AI Stocks Driving Global Rankings?

• The global rally in AI stocks (US tech, Taiwan, South Korea, China) has lifted entire market caps.
• The United States benefits from AI giants like Nvidia, Microsoft, Alphabet, Apple, Amazon, and Meta.
• Taiwan rides on TSMC (Taiwan Semiconductor Manufacturing Company), the world’s leading chip foundry.
• South Korea has Samsung Electronics and SK Hynix, key players in memory chips and AI hardware.
• India’s tech sector is dominated by IT services (TCS, Infosys, Wipro), which are not direct AI-hardware plays.
• This sector composition mismatch has cost India in AI-driven valuations.

Why Are FPIs Pulling Out of India?

• Higher US bond yields (US 10-year above 4.5 per cent) make US assets more attractive.
• Strong dollar raises currency risk for Indian investments.
• Slower domestic earnings growth relative to expectations.
• High valuations in certain Indian segments after a multi-year rally.
• Geopolitical risks including the West Asia war and trade tensions.
• Better-priced opportunities in other emerging markets, including South Korea and Taiwan.

Practice MCQs

Q1. With reference to India’s slip in global market capitalisation rankings (June 2026), consider the following statements:

1. India has slipped to the 7th spot in global market cap rankings, with a valuation of about USD 4.84 trillion.
2. South Korea has overtaken India and moved up to the 6th spot with USD 5.01 trillion.
3. Earlier in May 2026, India was pushed to the 6th spot by Taiwan, which is now at the 5th spot.
4. The slide is attributed to heavy foreign selling, weak earnings growth, and limited exposure to AI-linked stocks.

How many of the above statements are correct?

(a) Only one (b) Only two (c) Only three (d) All four (e) None

Q2. With reference to the current global market cap rankings (June 2026), consider the following statements:

1. The United States holds the 1st spot with about USD 79.1 trillion.
2. China is at the 2nd spot with about USD 16.3 trillion.
3. Japan and Hong Kong are at the 3rd and 4th spots respectively.
4. India holds the 4th spot ahead of Hong Kong.

Which of the above are correct?

(a) 1, 2 and 3 only (b) 1, 3 and 4 only (c) 2 and 4 only (d) 1 and 4 only (e) All four

(Statement 4 is wrong; India is at the 7th spot, behind Hong Kong, Taiwan, and South Korea.)

Q3. With reference to FPI flows and MSCI index weight changes, consider the following statements:

1. Foreign investors have withdrawn about USD 26.4 billion from Indian stocks so far in 2026.
2. India’s weight in the MSCI Global Standard Index has fallen from about 21 per cent in September 2024 to about 12.3 per cent.
3. The MSCI Global Standard Index is published by Morgan Stanley Capital International (MSCI).
4. A fall in MSCI weight has no impact on passive global fund flows into Indian equities.

Which of the above are correct?

(a) 1, 2 and 3 only (b) 1, 3 and 4 only (c) 2 and 4 only (d) 1 and 4 only (e) All four

(Statement 4 is wrong; a fall in MSCI weight directly reduces passive global fund flows into Indian equities.)

Q4. With reference to why AI stocks are driving global rankings, consider the following statements:

1. The US benefits from AI giants like Nvidia, Microsoft, Alphabet, Apple, Amazon, and Meta.
2. Taiwan’s market is heavily lifted by TSMC, the world’s leading chip foundry.
3. South Korea benefits from Samsung Electronics and SK Hynix, key players in memory chips.
4. India’s tech sector is dominated by AI hardware companies and chip foundries.

Which of the above are correct?

(a) 1, 2 and 3 only (b) 1, 3 and 4 only (c) 2 and 4 only (d) 1 and 4 only (e) All four

(Statement 4 is wrong; India’s tech sector is dominated by IT services, not AI hardware companies or chip foundries.)

Answer Key

1. (d), All four statements are correct.
2. (a), Statements 1, 2, 3 are correct; Statement 4 is wrong because India is at the 7th spot.
3. (a), Statements 1, 2, 3 are correct; Statement 4 is wrong because a fall in MSCI weight reduces passive global fund flows.
4. (a), Statements 1, 2, 3 are correct; Statement 4 is wrong because India’s tech sector is dominated by IT services, not AI hardware.

Exam Relevance

Exam	Relevance
UPSC Prelims	GS Paper III on Indian Economy (Capital Markets, Global Indices, FPI flows)
UPSC Mains	GS Paper III on Indian Economy, External sector, Capital markets, Global integration
BPSC and State PCS	Economy, Capital Markets, Current Affairs
Banking (RBI Gr B, SBI PO, IBPS, NABARD)	Very high importance, FPI flows, capital markets, global rankings
RBI Grade B	Core area on capital markets, external sector
SEBI Grade A	Very high importance, capital markets, MSCI, FPI rules
IRDAI Grade A	Capital market awareness

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