The National Food Security Act (NFSA) Pradhan Mantri Matru Vandana Yojana Lack of Clarity and Barrier of Information Technology Successful Models: Tamil Nadu and Odisha Two Sets of Rules for Maternity Benefits Reform Road to Go Ahead These maternity benefits languish under neglect of the state, to the detriment of millions of helpless women and children. An effective maternity program not only fulfills the duty of compliance with the law but goes one step further to secure the health of mothers and children for the welfare of society as a whole. Source: The Hindu
Carbon-Border Adjustment Mechanism (CBAM) & Deforestation Regulation
Context: The European Union (EU) has highlighted that relaxations are unlikely for India concerning the CBAM and Deforestation Regulation. What is the CBAM and Deforestation Regulation? The Carbon-Border Adjustment Mechanism (CBAM) is a carbon tax the EU will levy from January 1, 2026 on imported goods to encourage cleaner industrial production practises. EU’s Position on CBAM EU’s Deforestation Regulation & Difficulty for India India’s Trade Strategy and WTO Concerns The EU stands firm in its enforcement of the CBAM and deforestation regulations, with no exemptions.In the next round of negotiations, India is expected to demand a longer transition period and trade safeguards. The negotiations for the India-EU FTA will become crucial in determining how these two economies will manage t
EU-India Relations
Context: Ursula von der Leyen, president of the European Commission, with a delegation of 21 European Union (EU) commissioners, embarks on a two day trip to India. The largest EU delegation to India since its establishment manifests an expression of resolve by the Europeans to strengthen its partnership with the Indian side outside the U.S. orbit against the backdrop of changing U.S. policies in the Russia Ukraine conflict. Key Highlights of the Visit Key Objective Items Geopolitical Context The high profile European visit reinforces the resolve to diversifying partnerships, and India appears to be playing a central role here. While trading technology cooperation remains a priority, expect considerable geopolitical divergences in particular, on this one aligned with Russia. UPSC Civil Services Examination Previous Year Questions (PYQs) Prelims: Q. The term ‘Digital Single Market Strategy’ seen in the news refers to (2017) (a) ASEAN (b) BRICS (c) EU (d) G20 Ans: (c) Q. ‘European Stability Mechanism’, sometimes seen in the news is an (2016) (a) agency created by EU to deal with the impact of millions of refugees arriving from Middle East (b) agency of EU that provides financial assistance to eurozone countries (c) agency of EU to deal with all the bilateral and multilateral agreements on trade (d) agency of EU to deal with the conflicts arising among the member countries Ans: (b)
U.S. Ukraine Economic Deal
Context: Ukraine and the U.S. just drafted an initial economic mechanism that signals the intentions of nations toward deeper bilateral relations. Key Provisions: Market and Geopolitical Impact The upcoming Washington talks on Friday will decide whether this economic framework will serve as a comprehensive strategy alliance or remain a work in progress. Source: The Hindu
Current Affairs 26 February, 2025
Daily Current Affairs Quiz26 February, 2025 International Affairs 1. India EU Free Trade Agreement Context: The European Union (EU) wants to obtain more firm commitments from India concerning tariff reductions on imports of cars, wines, and spirits as part of the ongoing Free Trade Agreement (FTA) negotiations. The joint meeting between PM Narendra Modi and URSULA VON DER LEYEN, President of the European Commission, is now taking place later this week in this connection. Key Highlights: Discussion Major Topics Trade & Market Access Geopolitical Context & Strategic Shifts India’s Position on the Russia Ukraine Conflict India Middle East Europe Economic Corridor (IMEC) Critical Importance This will set the stage for even deeper economic and geopolitical cooperation with the Modi von der Leyen meeting. Although tariff negotiations remain a challenge, shared strategic interests could accelerate an India-EU trade agreement. National Affairs 1. India’s Internet Shutdowns Context: The number of Internet shutdowns in India was slightly lower in 2024 than in 2023, according to the Software Freedom Law Center (SLFC), India’s annual report. Report Highlights Shutdowns Due to Communal Violence: India Leads the World Breakdown of 2024 Shutdowns Legal & Human Rights Dimensions Opacity of Shutdowns Authorities may try to argue that the Internet shutdowns contribute to controlling a crisis; however, the frequency and opacity of their implementation raise serious concerns. India must find ways to ensure a great reduction of shutdowns and to avoid using them in less serious cases, resulting in even possible accountability. Source: The Hindu 2. Balancing AI Innovation with Environmental Sustainability AI’s Expanding Influence Environmental Impact of AI Global Response & Gap in Policy Sustainable AI: The Way Forward In order to remain sustainable into the future, AI should be developed in an environmentally sustainable way. By ensuring that green requirements are incorporated into the design of an AI, the government and private sectors are able to reconcile innovation with environmental protection so that the benefits offered by AI do not come with a price on the planet. 3. Time Use Survey 2024 Context: Though India is steadily changing in the landscape of work and home, with women’s increasing stake in the workforce and evolving gender roles in caregiving, the most recent Time Use Survey 2024 conducted by the National Statistics Office (NSO) emphasizes on these. Key Findings Analysis of the Report Though the new Time Use Survey 2024 indicates advancements toward better participation in employment and an even slight decrease in gender differences, structural barriers and societal norms remain strong inhibitions to the full economic integration of women into the economy. This will require focus on integrated policy measures, cultural shifts, and systemic support to produce a more equitable future. 4. Ultra Conserved Elements (UCEs) Context: For decades, ultra conserved elements have puzzled scientists. DNA pieces having remained essentially unchanged for 80 million years across organisms seem to have a biological constraint so strong that any slight modification would be lethal. But now, with fresh evidence, here is a compelling reason why they are so highly conserved. What Are Ultra Conserved Elements (UCEs)? Key Discovery: UCEs Are “Poison Exons” A functional UCE of the mouse Tra2b gene was shown to actually be a gene serving primarily in RNA splicing by David J. Elliott, at Newcastle. Working of This UCE Regulation of Protein Production What Would Keep UCEs Basically Unchanged for 80 Million Years? Zooming Out: Evolution, Genetics, and Future Exploration This represents another major step toward resolving the biggest riddles of evolutionary biology, namely why some DNA sequences are frozen in a time when everything else in the genome is changing. Source: The Hindu 5. Devolution Index (DI) For Panchayati Raj Context: According to a recent report of the Ministry of Panchayati Raj and Indian Institute of Public administration, India has a state level devolution index (DI) measure of the decentralized actions across the country. Key Highlights Key Challenges Faced by Panchayati Raj Institutions Recommendations for Strengthening PRIs While Panchayati Raj Institutions have improved themselves through the years, financial autonomy, administrative capacity, and accountability remain major concerns. To do that, India has to learn from successful decentralized governance models like Switzerland and Scandinavian countries to strengthen local authorities by increasing financial devolution, streamlining governance structures, and ensuring representation. Banking/Finance 1. Government’s Plan to Reduce Stake in PSBs Context: The Indian government is planning for a roadmap to disinvest up to 20% of ownership in five public sector banks (PSBs) over a period of the next four years fulfilling the minimum public shareholding (MPS) norms of SEBI. The disinvestment will proceed in consultation with: Objective: Meeting SEBI’s MPS Norms Banks Identified for Stake Reduction Bank Govt. Holding (%) Stake to be Sold (%) UCO Bank 95.39% 20.39% Indian Overseas Bank 96.38% 21.38% Central Bank of India 93.08% 18.08% Punjab & Sind Bank 98.25% 23.25% Bank of Maharashtra 86.46% 11.46% Implementation Strategy through OFS & QIP Routes The government plans to follow two methods to reduce stake: Rationale for the Preferred Route TOFS Market Conditions & Timing Consequences of Stake Dilution Such a strategic action is a part of the essential banking sector reforms and capital market deepening but with due control over the PSBs. 2. RBI Reverses Higher Risk Weights on NBFC Loans Context: The Reserve Bank of India (RBI) has reversed its previous decision to increase risk weights on bank loans to Non Banking Financial Companies (NBFCs), starting from April 1, 2025. This move should boost credit flow to NBFCs and release sizable capital for banks. Background: The Initial Risk Weight Increase Why the Reversal? New Risk Weight Structure Implications and Benefits 3. RBI Clarifies Risk Weights On Microloans Context: Risk weights on microfinance loans were clarified by the Reserve Bank of India (RBI), thus decreasing the capital requirements on banks. 75% Risk weights have now been imposed on loans considered under the regulatory retail portfolio or business loans. Earlier, this slab was confusing and was considered under 125%. Consumer credit microloans, which do not fall under regulatory retail, will now carry a 100% risk weight instead of
Rupee Depreciates Again
Context: Rupee fell 50 paise (0.57%) to ₹87.21/USD, its biggest fall in three and more weeks. Year to date in FY25, the rupee has depreciated 4.31%; in 2025 alone, it has declined 1.81% against the dollar. Key Highlights: Limited RBI Intervention Exerts Further Pressure Animation of RBI Forward Book Importers and Hedging Activity Drive Increased Dollar Demand Movement of Other Currencies in the Region With the expiry of offshore contracts and dollar demand from imports remaining, the rupee’s near term movement is expected to depend on the RBI’s intervention strategy and global market sentiments.
Tata Capital Plans IPO, Worth $1.7Bn Listing
Context: Tata Capital’s board approved the IPO to consist of 23 crores shares for a fresh issue and stake sales from existing shareholders. Key Highlights: Regulatory Issues & Listing Aspects Tata Capital’s impending IPO constitutes a vital market event conforming to the financial strategy of the Tata Group. Currently under huge interest and scrutiny, this IPO would provide weight to Tata Capital’s capital base and change the way Tata Sons think in the future.
SEBI: Stricter Rules for Equity and Index Derivatives
Context: Reduction in stock derivative position limits and index derivatives rule tightening in order to curb market risk. Follows the measures of October 2024, which increased entry barrier and trading costs in derivative securities to protect retail investors.There are also concerns regarding the high volatility of the futures and options (F&O) market, which appears to be spilling over into the broader stock market, which has declined after record highs in September. Proposed Amendments to Stock Derivatives Proposed Changes in Index Derivatives Introduction of Pre Open Session in Futures Market SEBI is actually soliciting feedback until 17 March 2025 from market participants.If implemented, it would reduce the exposure to risk, limit the excessive speculation, and tie in derivatives trading with the fundamentals underlying stock tra
Irregularities Persist in UCBs despite RBI Interventions
Context: Urban cooperative banks in India have been subjected to scrutiny for a long time, with stronger preventive measures required. Regulatory Interventions and Persistent Irregularities Challenges to Regulate UCBs Regulatory Reforms and Protection of Deposits A Few Bad Banks or a Systemic Problem? What is a Bad Bank? A bad bank is an Asset Reconstruction Company (ARC) or an Asset Management Company (AMC) that takes over the bad loans of commercial banks, manages them and finally recovers the money over a period of time. While most UCBs might be working well, the repeated emergence of irregularities calls for stricter oversight. Therefore, the RBI should tighten governance parameters, improve auditing mechanisms and promote technological innovations in thes Source: Business Standard
RBI Clarifies Risk Weights On Microloans
Context: Risk weights on microfinance loans were clarified by the Reserve Bank of India (RBI), thus decreasing the capital requirements on banks. 75% Risk weights have now been imposed on loans considered under the regulatory retail portfolio or business loans. Earlier, this slab was confusing and was considered under 125%. Consumer credit microloans, which do not fall under regulatory retail, will now carry a 100% risk weight instead of 125%. Bank Funding Impact On NBFCs Clarification to Resolve: Bank’s Uncertain Stand The RBI’s May announcement concerning microloan risk weights is a helpful relief to banks and NBFCs, which would allow an increased lending capacity while clinching regulatory certainty. Banks, with lesser capital constraints, would now be able to set aside a fair portion of their portfolio for lending microfinance, hence improving credit for small borrowers. This will stabilize the conditions under which NBFCs are funded and also support efforts towards financial inclusion in sectors that have remained underserved. Source: Business Standard
