Current Affairs June 2026

Context:

The Ministry of Health and Family Welfare has released the sixth round of the National Family Health Survey (NFHS-6), conducted in 2023-24 with the International Institute for Population Sciences (IIPS), Mumbai as the nodal agency. The survey covered nearly 6.79 lakh households across 715 districts and now provides district-level evidence on population, health, nutrition, and family welfare indicators. Two major shifts stand out. First, obesity and diabetes have risen sharply across India in just five years: obesity in women aged 15-49 has gone up from 24 per cent in NFHS-5 to 30.7 per cent in NFHS-6, while obesity in men in the same age group has risen from 22.9 per cent to 27.3 per cent.

Key Highlights

• Survey: National Family Health Survey (NFHS-6).
• Reference period: 2023-24.
• Released by: Ministry of Health and Family Welfare.
• Nodal agency: International Institute for Population Sciences (IIPS), Mumbai.

Major Findings

• Institutional deliveries increased from 88.6% to 90.6%, strengthening safe childbirth coverage across India.
• Antenatal Care (ANC) registration reached 95.9%, while first-trimester checkups improved to 76.2% and four ANC visits rose to 65.2%.
• India’s Total Fertility Rate (TFR) remained stable at 2.0, staying below the replacement level of 2.1.
• Child stunting declined significantly from 35.5% to 29.3%, while severe wasting reduced from 7.7% to 5.2%.
• Full immunization coverage among children aged 12–23 months increased from 83.8% to 87.1%.
• Rotavirus vaccine coverage more than doubled from 36.4% to 85.4%, reflecting improved immunization outreach.
• Over 95.6% of childhood vaccinations were delivered through public healthcare facilities, indicating strong trust in government health systems.
• Household health insurance coverage rose sharply from 41% to 60.2%, supported by schemes like Ayushman Bharat Pradhan Mantri Jan Arogya Yojana.
• Internet usage among women increased from 33.3% to 64.3%, narrowing the female digital divide.
• Caesarean section deliveries rose sharply from 21.5% to 27.2%, raising concerns over increasing surgical births.

Key Challenges Identified

• Around 40.5% of children aged 6–8 months still do not receive adequate solid or semi-solid complementary food.
• Nearly 12.9% of children remain partially vaccinated or unvaccinated despite high overall immunization coverage.
• Rising lifestyle diseases and non-communicable diseases (NCDs) are emerging as major public health concerns.
• India continues to face a dual burden of undernutrition alongside rising adult overweight and obesity levels.
• Only 37.8% of pregnant women consumed iron-folic acid supplements for the recommended 180 days, indicating gaps in maternal nutrition compliance.

Background Concepts

What is the National Family Health Survey (NFHS), and How is It Conducted?

The National Family Health Survey (NFHS) is a large-scale, nationally representative, household-level sample survey that provides reliable data on population, health, nutrition, and family welfare in India. It is conducted by the Ministry of Health and Family Welfare, with the International Institute for Population Sciences (IIPS), Mumbai, as the nodal agency. Field work is carried out by a network of field agencies, with technical support from international partners like ICF (USA) for DHS-style surveys and WHO. The NFHS provides state-, district-, and national-level estimates on fertility, family planning, infant and child mortality, immunisation, nutrition, anaemia, women’s empowerment, gender-based violence, HIV/AIDS, and non-communicable disease risk factors. The first NFHS (NFHS-1) was conducted in 1992-93, and the rounds have grown progressively larger: NFHS-5 (2019-21) and now NFHS-6 (2023-24) with 6.79 lakh households across 715 districts. NFHS data is used for planning Ayushman Bharat, ICDS, POSHAN Abhiyaan, RBSK, Anaemia Mukt Bharat, NP-NCD, and many other welfare programmes.

Practice MCQs

Q1. With reference to the National Family Health Survey (NFHS-6), consider the following statements:

1. NFHS-6 was conducted in 2023-24 by the Ministry of Health and Family Welfare.
2. The International Institute for Population Sciences (IIPS), Mumbai, served as the nodal agency.
3. The survey covered around 6.79 lakh households across 715 districts.
4. NFHS-6 provides district-level estimates on population, health, nutrition, and family welfare.

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 the key findings of NFHS-6:

1. Obesity in women aged 15-49 has risen from 24 per cent in NFHS-5 to 30.7 per cent in NFHS-6.
2. Obesity in men aged 15-49 has risen from 22.9 per cent to 27.3 per cent.
3. Diabetes prevalence (on medication) has risen in both men and women between NFHS-5 and NFHS-6.
4. Andhra Pradesh, Kerala, and Tamil Nadu are emerging as hotspots for overweight and obese adults.

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

Q3. With reference to Caesarean (C-section) births in India, as per NFHS-6, consider the following statements:

1. The national share of births by C-section has risen from 21.5 per cent in NFHS-5 to 27.2 per cent in NFHS-6.
2. Private hospitals reported a C-section rate of 54.1 per cent compared to 16.9 per cent in public hospitals.
3. Urban areas reported a C-section rate of about 40.5 per cent compared to about 22.8 per cent in rural areas.
4. Telangana, Andhra Pradesh, and Tamil Nadu reported some of the highest state-level C-section rates.

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

Q4. Consider the following statements about obesity and Type 2 diabetes:

1. The World Health Organization considers excess body weight as one of the strongest risk factors for Type 2 diabetes.
2. Excess abdominal fat is linked to insulin resistance, which can lead to Type 2 diabetes.
3. Body Mass Index (BMI) of 25 or above is classified as overweight under standard WHO criteria.
4. Maternal obesity and diabetes are associated with higher rates of Caesarean delivery.

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

Answer Key

1. (d), All four statements are correct.
2. (e), All four statements are correct.
3. (e), All four statements are correct.
4. (e), All four statements are correct.

2. India’s First SkyCast System at IGI Airport, New Delhi

Source: TOI

Context:

Union Minister Dr Jitendra Singh has inaugurated India’s first “SkyCast” System at the Indira Gandhi International (IGI) Airport, New Delhi. SkyCast is a next-generation, integrated atmospheric remote sensing system designed for aviation weather monitoring. It brings together multiple real-time measurements of fog, aerosols, turbulence, moisture, and visibility into a single, comprehensive aviation weather intelligence framework. The system has been developed under Mission Mausam, a flagship initiative of the Ministry of Earth Sciences (MoES) aimed at making India weather-ready and climate-smart through upgraded observation networks, modelling, and forecasting.

Aim:

(a) Usher India into fog-free, weather-smart aviation.
(b) Reduce flight delays, cancellations, and diversions caused by adverse weather.
(c) Maximise safety during take-off and landing, the most weather-sensitive phases of flight.

Multi-sensor integration:

Instrument	What it does
Radar Wind Profiler	Measures wind speed, direction, and vertical motion in the lower atmosphere
SODAR (Sound Detection and Ranging)	Uses sound waves to study wind, turbulence, and boundary-layer behaviour
Microwave Radiometer	Measures temperature and humidity profiles vertically through the atmosphere
Ground-based Fog Aerosol Spectrometer (GFAS)	Studies fog droplet sizes and aerosol-fog interactions
CL61 Lidar-based Ceilometer	Uses laser pulses to map the vertical structure and density of fog and clouds

About the News

What is SkyCast?

SkyCast is India’s first integrated aviation weather intelligence system, designed to provide real-time atmospheric data on fog, aerosols, turbulence, moisture, and visibility, helping airports and pilots make safer take-off and landing decisions.

Where has it been launched and by whom?

Launched at Indira Gandhi International (IGI) Airport, New Delhi, by Union Minister Dr Jitendra Singh, under Mission Mausam of the Ministry of Earth Sciences.

What instruments does it use?

(a) Radar Wind Profiler. (b) SODAR (Sound Detection and Ranging). (c) Microwave Radiometer. (d) Ground-based Fog Aerosol Spectrometer (GFAS). (e) CL61 Lidar-based Ceilometer.

Up to what altitude does it monitor the atmosphere?

Up to about 3 kilometres, mapping the boundary layer, wind, turbulence, temperature, and humidity in real time.

Why is GFAS especially important for Delhi?

Because Delhi’s winter fog is mixed with high levels of pollution and aerosols. The Ground-based Fog Aerosol Spectrometer can track droplet sizes and aerosol-fog interactions, which helps in understanding and forecasting the unique pollution-fog mix that affects flights.

What is the nowcasting window?

SkyCast provides precise nowcasts and real-time alerts within a 3-hour window, which is the most critical period for aviation flight planning.

Background Concepts (Q&A)

What is “Mission Mausam”, and What Does it Aim to Do?

Mission Mausam is a flagship initiative of the Ministry of Earth Sciences (MoES) approved in September 2024, to make India weather-ready and climate-smart by upgrading its weather observation, modelling, and forecasting capabilities. The mission aims to build a world-class observation network of radars, wind profilers, balloons, ocean buoys, and satellites, deploy advanced numerical weather prediction models, and develop AI and Machine Learning-based forecasting tools to deliver hyperlocal, sector-specific weather forecasts for agriculture, aviation, disaster management, urban planning, water resources, and public health. The mission also focuses on specific weather phenomena like fog, thunderstorms, heatwaves, cold waves, and extreme rainfall, which cause major disruption and damage in India. Its implementing agencies include the India Meteorological Department (IMD), the Indian Institute of Tropical Meteorology (IITM, Pune), the National Centre for Medium Range Weather Forecasting (NCMRWF), and other MoES institutions. SkyCast is one of the first major operational deliverables under Mission Mausam, focused on aviation weather.

What is the “Atmospheric Boundary Layer”, and Why Does It Matter for Aviation and Pollution?

The Atmospheric Boundary Layer (ABL), also called the Planetary Boundary Layer, is the lowest part of the Earth’s atmosphere, typically extending from the surface up to about 1-3 kilometres, depending on time of day, weather, and location. Above the ABL lies the free atmosphere, where conditions are less influenced by surface friction, heating, and moisture. The ABL is critical for several reasons:

(a) It is the layer where most weather phenomena affecting daily life happen, including fog, low clouds, wind shear, turbulence, and pollution mixing.

(b) Aircraft take-off and landing happen entirely within this layer, making boundary-layer dynamics central to aviation safety.

(c) Pollutants like PM2.5, PM10, NO2, and SO2 mix and disperse within the ABL. In winter, the ABL becomes shallow (cold ground compresses it), trapping pollution near the surface, which is why Delhi’s winter pollution is so severe.

(d) Fog formation depends on temperature and humidity profiles within the ABL.

SkyCast’s 3-km vertical monitoring is specifically designed to map the boundary layer in detail, which is why its data is useful for both aviation safety and urban pollution management.

Practice MCQs

Q1. With reference to India’s first SkyCast System, consider the following statements:

1. SkyCast has been inaugurated at the Indira Gandhi International (IGI) Airport, New Delhi.
2. The system has been developed under Mission Mausam, an initiative of the Ministry of Earth Sciences.
3. It is designed to provide aviation weather intelligence by integrating multiple atmospheric remote-sensing instruments.
4. The system continuously monitors atmospheric conditions up to an altitude of about 3 kilometres.

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 the instruments integrated into the SkyCast System:

1. The Radar Wind Profiler measures wind speed, direction, and vertical motion in the lower atmosphere.
2. SODAR uses sound waves to study wind, turbulence, and boundary-layer behaviour.
3. The Microwave Radiometer measures temperature and humidity profiles through the atmosphere.
4. The CL61 Lidar-based Ceilometer is used to track the vertical structure and density of fog.

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

Q3. With reference to Mission Mausam, consider the following statements:

1. Mission Mausam was approved by the Government of India in September 2024.
2. It is implemented under the Ministry of Earth Sciences (MoES).
3. The mission focuses on upgrading weather observation, modelling, and forecasting capabilities to make India weather-ready and climate-smart.
4. Implementing agencies include the India Meteorological Department, IITM (Pune), and NCMRWF.

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

Q4. Consider the following statements about the Atmospheric Boundary Layer (ABL):

1. The Atmospheric Boundary Layer is the lowest part of the Earth’s atmosphere, typically extending from the surface up to about 1-3 kilometres.
2. Most weather phenomena affecting daily life, including fog, turbulence, and low clouds, occur within the ABL.
3. The ABL becomes shallow in winter, trapping pollutants near the surface and contributing to severe urban air pollution.
4. Aircraft take-off and landing happen entirely within the Atmospheric Boundary Layer.

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

Answer Key

1. (d), All four statements are correct.
2. (e), All four statements are correct.
3. (e), All four statements are correct.
4. (e), All four statements are correct.

3. Sakura Science Programme 2026

Context:

The Department of School Education and Literacy (DoSEL), under the Ministry of Education, has flagged off a contingent of 56 Indian school students to Japan under the Sakura Science Programme 2026. The programme, originally launched as the Japan-Asia Youth Exchange Program in Science, is an international youth exchange initiative funded and implemented by the Japan Science and Technology Agency (JST), a leading public agency under Japan’s Ministry of Education, Culture, Sports, Science and Technology (MEXT). It invites bright young minds from across the world to Japan for short-term visits that combine hands-on experience of Japan’s cutting-edge science and technology with immersion in Japanese culture, history, and society.

Key Highlights

• Programme: Sakura Science Programme 2026.
• Original name: Japan-Asia Youth Exchange Program in Science.
• Implemented by: Japan Science and Technology Agency (JST).
• Indian nodal agency: Department of School Education and Literacy (DoSEL), Ministry of Education.
• Participating Countries: Japan, India, Ghana, Nigeria, and South Africa

Aim of the programme:

(a) Broaden the intellectual horizons of young learners.
(b) Foster a spirit of scientific exploration.
(c) Strengthen bilateral ties through youth and education diplomacy.
(d) Expose students to Japan’s advanced science and technology ecosystem.
(e) Offer immersion in Japanese culture and heritage.

About the News

What is the Sakura Science Programme?

A Japan-funded international youth exchange initiative under which students from selected countries visit Japan for a week-long experiential learning programme combining advanced science exposure with cultural immersion.

Who runs it and who participated this year?

It is run by the Japan Science and Technology Agency (JST). The May 2026 batch has students from India, Ghana, Nigeria, and South Africa. India sent 56 students through the Department of School Education and Literacy (DoSEL), Ministry of Education.

Background Concepts (Q&A)

What is the National Means-cum-Merit Scholarship (NMMS) Scheme?

The National Means-cum-Merit Scholarship (NMMS) Scheme is a Government of India centrally sponsored scholarship scheme launched in 2008, run by the Department of School Education and Literacy (DoSEL), Ministry of Education. Its purpose is to identify meritorious students from economically weaker sections and support them to continue education beyond Class 8, especially up to Class 12, reducing dropout rates during the secondary stage of school. Eligible students are those whose parental income is below ₹3.5 lakh per year (the income ceiling has been revised over time), and who clear a two-tier selection examination comprising a Mental Ability Test (MAT) and a Scholastic Aptitude Test (SAT), conducted by State Education Departments. Successful candidates receive a scholarship of ₹12,000 per annum (revised from the earlier ₹6,000) for classes 9 to 12, paid directly into their bank accounts under the Direct Benefit Transfer (DBT) Mission Mode. The scheme is implemented at the school level, and the selection through NMMS is now also used as a benchmark of merit for programmes like Sakura Science, ensuring that opportunities go to bright children from disadvantaged backgrounds.

Practice MCQs

Q1. With reference to the Sakura Science Programme 2026, consider the following statements:

1. The programme is funded and implemented by the Japan Science and Technology Agency (JST).
2. The Indian contingent of 56 students was flagged off by the Department of School Education and Literacy under the Ministry of Education.
3. The 2026 batch includes participants from India, Ghana, Nigeria, and South Africa.
4. Indian participants are selected from meritorious government school students who have qualified the National Means-cum-Merit Scholarship (NMMS) examination.

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 the Sakura Science Programme:

1. The programme was originally launched as the Japan-Asia Youth Exchange Program in Science.
2. India has been included in the programme since 2016.
3. Since India’s inclusion, a total of 674 Indian students and 96 supervisors have visited Japan under this framework.
4. The programme exclusively focuses on scientific exchange and has no cultural exchange component.

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

Q3. With reference to the National Means-cum-Merit Scholarship (NMMS) Scheme, consider the following statements:

1. NMMS is a centrally sponsored scheme implemented by the Department of School Education and Literacy under the Ministry of Education.
2. The scheme aims to support meritorious students from economically weaker sections to continue education beyond Class 8.
3. Selection is based on a two-tier examination, including a Mental Ability Test (MAT) and a Scholastic Aptitude Test (SAT).
4. The scholarship amount is disbursed via Direct Benefit Transfer (DBT) into the students’ bank accounts.

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

Q4. Consider the following statements about India-Japan cooperation in science, technology, and education:

1. The Japan Science and Technology Agency (JST) operates under Japan’s Ministry of Education, Culture, Sports, Science and Technology (MEXT).
2. India and Japan have a Special Strategic and Global Partnership.
3. India and Japan are also partners in the Quad along with the United States and Australia.
4. The Mumbai-Ahmedabad High-Speed Rail project uses Japanese Shinkansen technology.

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

Answer Key

1. (d), All four statements are correct.
2. (a), Statements 1, 2, 3 are correct. Statement 4 is wrong; the Sakura Science Programme explicitly includes a cultural exchange component, with immersive experiences to help students appreciate Japan’s history and social fabric, alongside scientific learning.
3. (e), All four statements are correct.
4. (e), All four statements are correct.

4. Union Minister Launches Logistics Port Performance Index (LPPI) and Four Digital Maritime Reforms

Source: PIB

Context:

The Union Minister of Ports, Shipping and Waterways has launched the Logistics Port Performance Index (LPPI) for FY 2024-25, along with four major digital governance platforms, during the 37th Foundation Day of the Jawaharlal Nehru Port Authority (JNPA), India’s busiest container port. The reforms together mark a structural shift in India’s maritime administration, from paper-based, fragmented workflows to an integrated, AI-ready, and cloud-governed digital framework. The reforms have been developed mainly by the Directorate General of Shipping (DGS) under the Ministry of Ports, Shipping and Waterways, and are linked to the PM Gati Shakti National Master Plan and the Sagar Aankalan framework for port performance benchmarking

Key Highlights

• Occasion: 37th Foundation Day of Jawaharlal Nehru Port Authority (JNPA).
• Launched by: Union Minister of Ports, Shipping and Waterways.
• Developer: Directorate General of Shipping (DGS), Ministry of Ports, Shipping and Waterways.

Five reforms launched:

#	Initiative	What it does
1	Logistics Port Performance Index (LPPI)	Benchmarks Indian ports across three cargo segments
2	24×7 e-Navik Grievance Redressal Module	Global grievance channel for Indian seafarers
3	e-Samudra Ship Registration Module	Digitises ship registration under the Indian flag
4	Medical Practitioner Module	Verified database of doctors certifying maritime crew fitness
5	Unified Ship Recycling Portal (Credit Note Module)	Links eco-compliant ship recycling to new shipbuilding incentives

About the News (Q&A)

What was launched, and where?

The Logistics Port Performance Index (LPPI) for FY 2024-25 and four major digital governance platforms were launched at the 37th Foundation Day of the Jawaharlal Nehru Port Authority (JNPA).

What is the Logistics Port Performance Index?

A port-benchmarking index built under the Sagar Aankalan framework and aligned with PM Gati Shakti, that ranks Indian ports across Dry Bulk, Liquid Bulk, and Container Cargo using metrics like vessel turnaround time, berth idle time, pre-berthing waiting time, and ship berth day output, balancing absolute performance with year-on-year improvement.

What is the e-Navik Grievance Redressal Module?

A 24×7 global welfare interface for Indian seafarers, allowing them to raise grievances from anywhere in the world through the e-Navik portal, WhatsApp, dedicated emails, and international toll-free helplines.

What does the e-Samudra Module do?

It digitises and streamlines ship registration under the Indian flag, helping shipowners avoid administrative delays and bringing India closer to the ease of registration offered by open-registry maritime nations.

What is the Medical Practitioner Module?

A central digital database for registering and verifying medical professionals who issue fitness certificates to maritime crews, designed to stop fraudulent health certifications.

What does the Unified Ship Recycling Portal offer?

Under the ₹70,000 crore Maritime Development Package, shipowners who recycle aging vessels at Hong Kong Convention-compliant Indian yards automatically get a digital credit note worth 40 per cent of the ship’s scrap value, which can be redeemed against new shipbuilding projects in India.

Background Concepts (Q&A)

What is the Directorate General of Shipping (DGS), and What is Its Role?

The Directorate General of Shipping (DGS) is the principal maritime administration agency of the Government of India, headquartered in Mumbai, and functions under the Ministry of Ports, Shipping and Waterways. Set up under the Merchant Shipping Act, 1958, DGS is responsible for: (a) regulating merchant shipping in India; (b) ship registration under the Indian flag; (c) safety of life at sea (SOLAS) implementation; (d) seafarer recruitment, training, certification, and welfare; (e) enforcement of international maritime conventions (MARPOL, SOLAS, MLC 2006, Hong Kong Convention) in India; (f) port state and flag state control inspections; and (g) administration of laws like the Recycling of Ships Act, 2019. DGS is the regulator and developer of most of India’s maritime workforce, and it is the nodal agency for the four new digital modules launched alongside the LPPI.

Practice MCQs

Q1. With reference to the recent maritime digital reforms launched in India, consider the following statements:

1. The reforms were launched on the 37th Foundation Day of the Jawaharlal Nehru Port Authority (JNPA).
2. They include the Logistics Port Performance Index (LPPI) and four digital governance platforms developed by the Directorate General of Shipping.
3. The Logistics Port Performance Index has been developed under the Sagar Aankalan framework and aligned with the PM Gati Shakti Master Plan.
4. The LPPI benchmarks ports across three cargo verticals: Dry Bulk, Liquid Bulk, and Container Cargo.

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 the new digital modules launched alongside the LPPI:

1. The 24×7 e-Navik Grievance Redressal Module is a global welfare interface for Indian seafarers.
2. The e-Samudra Ship Registration Module digitises the process of registering commercial vessels under the Indian flag.
3. The Medical Practitioner Module manages a verified database of doctors authorised to issue fitness certificates to maritime crews.
4. The Unified Ship Recycling Portal allows shipowners who recycle vessels at Hong Kong Convention-compliant Indian yards to receive a credit note worth 40 per cent of the ship’s scrap value.

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

Q3. With reference to the Hong Kong International Convention for Safe and Environmentally Sound Recycling of Ships, consider the following statements:

1. The convention was adopted under the International Maritime Organization (IMO).
2. It covers the entire life cycle of a ship, from design and construction to recycling.
3. Each ship covered by the convention is required to have an Inventory of Hazardous Materials (IHM).
4. India has aligned its Recycling of Ships Act, 2019, with the Hong Kong Convention.

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

Q4. Consider the following statements about the Directorate General of Shipping (DGS):

1. DGS is the principal maritime administration agency of the Government of India, headquartered in Mumbai.
2. It functions under the Ministry of Ports, Shipping and Waterways.
3. DGS handles ship registration, seafarer welfare, and enforcement of international maritime conventions in India.
4. The Directorate General of Shipping is a private commercial body that operates Indian shipping companies.

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

Answer Key

1. (d), All four statements are correct.
2. (e), All four statements are correct.
3. (e), All four statements are correct.
4. (a), Statements 1, 2, 3 are correct. Statement 4 is wrong; the DGS is a government regulatory body, NOT a private commercial entity. It does not operate shipping companies; it regulates the merchant shipping sector.

5. New Frog Species “Amolops Kamal” Discovered

Context:

A team of six scientists from the Zoological Survey of India (ZSI) has recorded a new-to-science cascade-dwelling frog species from the hill-stream habitats near Singrep village in Kiphire district of Nagaland, which borders Myanmar. The species was discovered during a field survey in August 2024, and has been formally named in the latest issue of the journal Records of the Zoological Survey of India.

Key Highlights

• New species: Amolops kamal (common name: Nagaland Cascade Frog).
• Recorded by: Zoological Survey of India (ZSI), six-scientist team.
• Location: Hill-stream habitats near Singrep village, Kiphire district, Nagaland, bordering Myanmar.
• Year of field discovery: August 2024.
• Published in: Records of the Zoological Survey of India.
• Named after: Kamal Choudhury, former teacher at B. Barooah College, Guwahati.

About the News

What has been discovered?

A new-to-science cascade-dwelling frog species named Amolops kamal, with the common name Nagaland Cascade Frog, has been recorded in the hill streams near Singrep village in Kiphire district, Nagaland.

Who discovered it and how?

A team of six ZSI scientists led the field expedition in August 2024 and confirmed the new species using integrative taxonomy, which combines physical (morphological) features with molecular DNA-based phylogenetic analysis.

Why is the name “Amolops kamal” significant?

The species is named after Kamal Choudhury, the former teacher of the lead author of the study at B. Barooah College, Guwahati, in tribute to his role in shaping the researcher’s scientific journey.

What does the discovery mean scientifically?

It shows that Amolops indoburmanensis, previously thought to be a single widespread species, may in fact be a complex of several genetically distinct species. This is an example of a cryptic species complex, where multiple species look almost identical but are genetically different.

Practice MCQs

Q1. With reference to the newly described frog species Amolops kamal, consider the following statements:

1. The species was recorded in the hill-stream habitats of Kiphire district, Nagaland.
2. It was discovered by a team of six scientists from the Zoological Survey of India (ZSI).
3. Its common name is the Nagaland Cascade Frog.
4. It belongs to the Amolops indoburmanensis species complex.

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 the genus Amolops:

1. The genus Amolops includes Asian cascade-dwelling frogs typically found in hill-stream habitats.
2. There are currently 90 recognised species of Amolops globally.
3. India has around 20 species of Amolops, classified mainly under three groups: Amolops marmoratus, Amolops monticola, and Amolops viridimaculatus.
4. The Amolops marmoratus group is the most diverse, with eight species in 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

Q3. With reference to the Zoological Survey of India (ZSI), consider the following statements:

1. ZSI was established in 1916 and is headquartered in Kolkata.
2. It functions under the Ministry of Environment, Forest and Climate Change.
3. ZSI is responsible for surveying India’s fauna, maintaining national zoological collections, and describing new species.
4. ZSI is the regulator of stock markets and securities in 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

Q4. Consider the following statements about cryptic species and integrative taxonomy:

1. Cryptic species look nearly identical to the human eye but are genetically distinct.
2. Cryptic species are often discovered through molecular phylogenetic analysis.
3. Recognising cryptic species can lead to better-targeted conservation policies.
4. Cryptic species are extremely rare in amphibians and rarely affect biodiversity estimates.

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

Answer Key

1. (d), All four statements are correct.
2. (e), All four statements are correct.
3. (a), Statements 1, 2, 3 are correct. Statement 4 is wrong; the regulator of stock markets and securities in India is SEBI, NOT the ZSI. ZSI is a biodiversity and animal taxonomy research institute, not a financial regulator.
4. (a), Statements 1, 2, 3 are correct. Statement 4 is wrong; cryptic species are quite common in amphibians, and recognising them is significantly raising biodiversity estimates in many parts of the world, including Northeast India.

Banking/Finance

1. RBI Issues Master Direction on Expected Credit Loss (ECL) Provisioning

Context:

The Reserve Bank of India (RBI) has issued a Master Direction on Expected Credit Loss (ECL) provisioning on 27 April, ending about three decades of rule-based provisioning in Indian banking. Until now, banks set aside provisions after a loan went bad, in fixed proportions that depended on how long the loan remained unpaid. Under the new approach, banks must provision before they incur a loss, by forecasting future losses based on loan health, economic stress scenarios, and recovery assumptions.

Key Highlights:

• Regulation: Master Direction on Expected Credit Loss (ECL) Provisioning.
• Issued by: Reserve Bank of India (RBI).
• Implementation deadline: April 2027.
• What it replaces: Three decades of rule-based, after-the-fact loan-loss provisioning.

Old vs New approach at a glance:

Feature	Earlier Rule-Based	New ECL Framework
Trigger for provisioning	Loan turns bad and stays unpaid for a certain period	Forward-looking estimate, before actual loss
Basis for amount	Fixed proportions set by RBI norms	Forecasts of future losses
Inputs considered	Mainly days overdue	Loan health, stress scenarios, recovery assumptions
Frequency of judgment	Periodic and mechanical	Continuous and analytical
Earnings volatility	Lower, but provisioning often delayed	Higher, but more honest in real time

Three-stage ECL classification:

Stage	What it means	Provisioning
Stage I	Loans with low credit risk	Minimal provisioning (12-month expected loss)
Stage II	Loans showing significant increase in credit risk (SICR)	Higher lifetime expected loss provision
Stage III	Loans that have already become impaired (credit-impaired)	Lifetime expected loss provision based on actual impairment

About the News

What has the RBI announced?

A new Master Direction on Expected Credit Loss (ECL) provisioning, which replaces three decades of rule-based provisioning with a forward-looking, model-based approach, effective from April 2027.

How is the new approach different?

(a) Earlier, banks provisioned after a loan turned bad, based on how long it stayed unpaid. (b) Now, banks must predict losses in advance, using economic scenarios, loan health, and recovery assumptions. (c) The system shifts from reactive to forward-looking and analytical.

What is SICR, and why is it crucial?

Significant Increase in Credit Risk (SICR) is the trigger that moves a loan from Stage I (low risk) to Stage II (higher risk) in the ECL framework. Once a loan crosses SICR, banks must hold lifetime expected loss provisions, which are usually much higher than Stage I provisions. A 30-days-overdue rule is one common SICR trigger, but the authors warn that this may not work for all Indian loan types.

Background Concepts (Q&A)

What is Expected Credit Loss (ECL), and How is It Different from the Old “Incurred Loss” Approach?

Expected Credit Loss (ECL) is a forward-looking accounting model for setting aside provisions for possible future credit losses on loans and other financial assets. It is based on the global accounting standard IFRS 9 (Financial Instruments), and its Indian counterpart Ind AS 109. Under ECL, banks must estimate possible future losses on all loans, even those that are still performing, based on probability of default, loss given default, and exposure at default, combined with forward-looking economic scenarios.

In contrast, the older “Incurred Loss” approach required banks to wait for a loss event to actually happen, such as a default or sustained overdue period, before recognising the loss in their books. The big criticism of the Incurred Loss approach, especially after the 2008 global financial crisis, was that banks acknowledged losses too late, when problems had already become too large to manage smoothly. ECL fixes this by requiring banks to anticipate losses based on credit conditions, building up provisions gradually and proactively. India’s adoption of ECL aligns its banks more closely with global best practices, supports better financial stability, and reduces the chance of sudden, large NPA shocks.

What is the “Three-Stage Classification” Under ECL, and What is SICR?

Under the ECL framework, loans are placed into one of three “stages” based on their credit risk, and provisions are calculated differently for each stage:

(a) Stage I, the performing stage, includes loans with low credit risk that are paying normally. Banks must hold a 12-month expected credit loss provision (losses that could occur in the next 12 months).

(b) Stage II, the underperforming stage, includes loans that have shown a Significant Increase in Credit Risk (SICR) since their origination, even if they are not yet impaired. Banks must hold a lifetime expected loss provision, which is much higher than Stage I.

(c) Stage III, the non-performing or credit-impaired stage, includes loans where actual default or impairment has occurred. Banks must also hold a lifetime expected loss provision, but the calculation is based on the actual impairment.

Significant Increase in Credit Risk (SICR) is the trigger that moves a loan from Stage I to Stage II. SICR can be measured through several indicators: (i) 30-days-overdue rule as a common benchmark; (ii) deterioration in credit rating since origination; (iii) economic stress indicators in the borrower’s sector or region; and (iv) qualitative factors like restructuring or watch-list status. Because provisioning rises sharply the moment a loan crosses SICR, the calibration of the SICR threshold is one of the most important governance and risk decisions a bank’s board will make under the new ECL regime.

Practice MCQs

Q1. With reference to the RBI’s new Master Direction on Expected Credit Loss (ECL) Provisioning, consider the following statements:

1. The Master Direction was issued by the RBI on 27 April and replaces three decades of rule-based provisioning.
2. Under the new framework, banks must provision before they actually incur a loss, based on forecasts of future losses.
3. The implementation deadline for Indian banks is April 2027.
4. The new framework continues the practice of provisioning only after a loan has gone bad and remained unpaid for a fixed period.

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 Expected Credit Loss (ECL) vs Incurred Loss approach:

1. Under the Incurred Loss approach, banks recognised losses only after a default or impairment event had occurred.
2. The Expected Credit Loss approach is based on global accounting standard IFRS 9 and its Indian counterpart Ind AS 109.
3. ECL requires banks to estimate possible future losses on loans based on probability of default, loss given default, and exposure at default.
4. The adoption of ECL was driven partly by lessons from the 2008 global financial crisis.

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

Q3. With reference to the three-stage classification under the ECL framework, consider the following statements:

1. Stage I loans carry low credit risk and require a 12-month expected loss provision.
2. Stage II loans are those that have shown a Significant Increase in Credit Risk (SICR) since origination and require lifetime expected loss provisions.
3. Stage III loans are those that have become credit-impaired or non-performing.
4. Stage I loans require higher provisions than Stage III loans.

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

Q4. Consider the following statements about implementation challenges of the new ECL framework in India:

1. ECL models typically require at least five years of loan-level data across a full credit cycle to be reliable.
2. The 2018-20 NBFC stress period and the pandemic-era loan restructuring wave are important data points for Indian banks.
3. A World Bank survey of IFRS 9 supervisors found that data quality was the single biggest implementation failure across jurisdictions.
4. Indian banks have already widely built expertise in loss-given-default and lifetime loss value estimation through their use of the Advanced Internal Ratings-Based approach for capital estimation.

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

Answer Key

1. (c), Statements 1, 2, 3 are correct. Statement 4 is wrong; the new framework moves AWAY from provisioning only after a loan has gone bad, and instead requires forward-looking provisioning based on forecasts.
2. (e), All four statements are correct.
3. (a), Statements 1, 2, 3 are correct. Statement 4 is wrong; Stage I requires LOWER provisions (only 12-month expected loss), while Stage III requires lifetime expected loss provisions based on actual impairment, which are generally much higher than Stage I provisions.
4. (a), Statements 1, 2, 3 are correct. Statement 4 is wrong; according to the article, Indian banks largely did NOT adopt the Advanced Internal Ratings-Based approach for capital estimation, and expertise in loss-given-default, lifetime loss value, and macro-projection-based estimation exists only in pockets, not widely.

Exam Relevance

Exam	Relevance
UPSC Prelims	GS Paper III on Indian Economy (RBI, Banking, NPAs, IFRS 9, Ind AS 109)
BPSC and State PCS	Banking, Economy, Current Affairs
Banking (RBI Gr B, SBI PO, IBPS, NABARD)	Very high importance, banking regulation, accounting, provisioning
SEBI Grade A	Disclosure norms, accounting standards
IRDAI	Insurance sector also moving towards Ind AS 109

2. RBI Explores Universal “Kill Switch” and “Switch On/Switch Off” Facility

Context:

The Reserve Bank of India (RBI), in its Annual Report, has announced that it is exploring the implementation of a universal “Kill Switch” mechanism, along with a “Switch On/Switch Off” facility, across all digital payment channels in India. The Kill Switch is being designed as an emergency security protocol that allows a user to immediately freeze all financial operations and fund transfers from their bank account or digital wallet, the moment they realise they are caught in a scam, especially real-time frauds like the fake “digital arrest” video calls that have become increasingly common.

What each facility does:

Facility	Function
Kill Switch	Instantly freezes all financial operations and fund transfers from a user’s account or wallet
Switch On/Switch Off	Lets users selectively enable or disable specific transaction channels (UPI, IMPS, international cards, etc.)

How activation works:

Channel	Use Case
Mobile banking app	Single-tap emergency button built into native banking apps
Designated SMS code	Quick activation when app access is compromised
Toll-free portal / call centre	Alternative channel for non-tech users
Internet banking portal	Activation from any computer with credentials
IVR (Interactive Voice Response)	Voice-based emergency activation

Payment systems to be covered:

Payment Mode	Coverage
Debit and credit cards	Already covered through existing card controls
Unified Payments Interface (UPI)	To be brought under the new framework
Immediate Payment Service (IMPS)	Covered
National Electronic Funds Transfer (NEFT)	Covered
Internet banking	Covered
Digital wallets	Covered

About the News

What is the RBI exploring?

A universal Kill Switch and a Switch On/Switch Off facility across all digital payment channels in India, to give users emergency control over their accounts during cyber frauds.

How will the Kill Switch work in practice?

A user who suspects fraud can activate the Kill Switch through their mobile banking app, SMS code, toll-free portal, IVR, or internet banking. Once triggered, the bank instantly blocks all outward fund movements from the user’s account.

What payments will it cover?

Unified Payments Interface (UPI), IMPS, NEFT, internet banking, debit and credit cards, and digital wallets. Unlike current card-only blocking, this is a universal switch across the entire electronic payment spectrum.

What is “Granular Channel Toggling”?

The Switch On/Switch Off feature lets users disable specific transaction modules while keeping others working. For example, a user can turn off international transactions but keep domestic ATM withdrawals active. This adds everyday safety to regular usage, not just emergencies.

Background Concepts (Q&A)

What are “Mule Accounts”, and Why are They Central to Cyber Financial Fraud?

Mule accounts are bank accounts used by criminals to receive, hold, and move fraudulently obtained money, often without the original account holder fully understanding their role. In a typical cyber fraud, the victim is tricked into transferring money to a mule account, after which the funds are rapidly moved through a chain of further mule accounts, often into wallets, gaming credits, or cryptocurrency, to make the money trail very hard to trace. Mule accounts are created in two main ways: (a) knowingly, when a person sells or rents out their bank account to fraudsters for a small fee (a serious offence in itself); or (b) unknowingly, when fraudsters open accounts using fake or stolen identity documents and forged KYC details. Tackling mule accounts is one of the biggest priorities for the RBI, banks, the Indian Cyber Crime Coordination Centre (I4C) under the Ministry of Home Affairs, and financial intelligence agencies. Tools like the Kill Switch help by stopping the original transfer before money even reaches the mule chain.

Practice MCQs

Q1. With reference to the RBI’s proposed Kill Switch facility, consider the following statements:

1. The Kill Switch will allow users to instantly freeze all financial operations and fund transfers from their account.
2. The facility will be available across UPI, IMPS, NEFT, internet banking, and digital wallets, not just debit and credit cards.
3. Activation will be possible through the mobile banking app, SMS code, IVR, internet banking, and toll-free portal.
4. The Switch On/Switch Off feature will allow users to selectively disable or enable specific transaction channels.

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 the rationale behind the Kill Switch and Switch On/Switch Off mechanism:

1. Real-time cyber frauds like fake “digital arrest” video calls have increased in India.
2. Once siphoned, fraudulent funds are usually layered quickly through mule accounts, making recovery difficult.
3. Existing fraud-reporting and chargeback channels are mostly post-fraud, which causes delays in stopping money movement.
4. The Kill Switch facility is intended only for high-net-worth individuals and not for general retail users.

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

Q3. With reference to mule accounts and cyber financial fraud, consider the following statements:

1. Mule accounts are bank accounts used by criminals to receive and move fraudulently obtained money.
2. Mule accounts may be created knowingly by individuals selling their account access, or unknowingly through fake identity documents.
3. Tackling mule accounts is a key priority for the RBI, banks, and the Indian Cyber Crime Coordination Centre (I4C).
4. The Kill Switch facility helps stop transfers before money even enters the mule chain.

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

Q4. Consider the following statements about cyber fraud reporting and digital payment security in India:

1. The national helpline number for reporting financial cyber frauds in India is 1930.
2. The Indian Cyber Crime Coordination Centre (I4C) functions under the Ministry of Home Affairs.
3. RBI has issued Master Directions on Digital Payment Security Controls.
4. The Reserve Bank-Integrated Ombudsman Scheme provides a unified grievance redressal mechanism for customers of RBI-regulated entities.

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

Answer Key

1. (d), All four statements are correct.
2. (a), Statements 1, 2, 3 are correct. Statement 4 is wrong; the Kill Switch is being designed for all retail users, NOT just high-net-worth individuals. The whole point is to protect ordinary citizens, especially those vulnerable to digital arrest, OTP, KYC, and similar frauds.
3. (e), All four statements are correct.
4. (e), All four statements are correct.

Facts To Remember

1. MoH&FW Releases 10th National Health Accounts Estimates for FY23

The Ministry of Health and Family Welfare (MoH&FW) released the 10th National Health Accounts (NHA) Estimates for Financial Year 2022-23 (FY23), highlighting a major increase in Government Health Expenditure (GHE). The report stated that GHE rose from Rs.1.30 lakh crore in 2013-14 to Rs.3.85 lakh crore in FY23, reflecting increased public investment in India’s healthcare sector. India’s Total Health Expenditure (THE) for FY23 was estimated at Rs.8.81 lakh crore, accounting for 3.37% of Gross Domestic Product (GDP).

2. Dr. Jitendra Singh Inaugurates PECVD System and RETINA Centre at IACS Kolkata

Union Minister Jitendra Singh inaugurated the Plasma Enhanced Chemical Vapor Deposition (PECVD) system and the RETINA incubation centre at the Indian Association for the Cultivation of Science, Kolkata, during its 150-year celebrations. The indigenously developed PECVD system will support fabrication of India’s first amorphous silicon solar cell under the Atmanirbhar Bharat initiative. The RETINA incubation centre aims to promote startup-driven innovation and commercialization of scientific research.

3. DARPG Launches NeSDA 2025 Portal for Digital Governance Assessment

The Department of Administrative Reforms and Public Grievances (DARPG) launched the National e-Governance Service Delivery Assessment (NeSDA) 2025 Portal to evaluate digital public service delivery mechanisms across India. The biennial assessment framework measures the effectiveness of Government-to-Citizen (G2C) and Government-to-Business (G2B) e-governance services. The portal will assess central, state, Union Territory, and city-level digital service platforms across sectors such as education, transport, labour, tourism, finance, and public grievances.

4. RITES and CRISIL Sign MoU for Data-driven Infrastructure Consultancy

RITES Limited signed a Memorandum of Understanding (MoU) with CRISIL to jointly develop data-driven infrastructure consultancy solutions in India and overseas markets. The partnership combines RITES’ infrastructure expertise with CRISIL’s analytics and research capabilities to strengthen advisory support for transport, energy, water, hydropower, wastewater, and industrial infrastructure projects. The collaboration will focus on financial due diligence, valuation support, market intelligence, and analytical model development.

5. IAF Collaborates with IIT Bombay for Su-30MKI Predictive Maintenance System

The Indian Air Force signed agreements with Indian Institute of Technology Bombay to develop Artificial Intelligence (AI)-based predictive maintenance technologies for the Sukhoi Su-30MKI fighter aircraft fleet. The project includes development of a digital diagnostic health index using indigenous AI-driven engineering solutions. The initiative aims to improve operational readiness, reduce maintenance costs, and enhance aircraft availability for the IAF.

6. IIT Madras Launches Circulating Water Tunnel Facility in Chennai

Indian Institute of Technology Madras inaugurated a state-of-the-art Circulating Water Tunnel Facility near Chennai, Tamil Nadu, to strengthen India’s hydrodynamic testing and ocean engineering research capabilities. Developed with Rs.4.5 crore CSR funding from Mazagon Dock Shipbuilders Limited, the facility will support research in ship design, naval architecture, offshore engineering, marine vehicles, and fluid dynamics.

7. NSE and SUFI Sign MoU to Develop Steel Commodity Derivatives Ecosystem

National Stock Exchange of India signed an MoU with Steel Users Federation of India to strengthen India’s steel commodity derivatives ecosystem. The collaboration will focus on exchange-traded steel derivatives, hedging mechanisms, market outreach, and industry consultations to reduce risks arising from steel price volatility. The initiative aims to benefit steel manufacturers, MSMEs, OEMs, infrastructure companies, and industrial users.

8. WBGB and Canara HSBC Life Insurance Partner for Rural Insurance Expansion

West Bengal Gramin Bank partnered with Canara HSBC Life Insurance to strengthen life insurance penetration in rural and semi-urban regions of West Bengal. Through WBGB’s network of 960 branches, customers will gain access to protection, savings, and wealth creation insurance products. The partnership aims to improve financial security and insurance accessibility in underserved areas.

9. DBJ Partners with HDFC Capital for Affordable Housing Projects

Development Bank of Japan entered into a strategic partnership with HDFC Capital Advisors Limited to invest in affordable and mid-income housing projects across India. The collaboration targets a corpus of USD 1 billion through the H-DREAM Fund, marking DBJ’s first real estate investment in India. The investment will support large-scale housing development under the GIFT City offshore investment framework.

10. Taiwan Surpasses India as World’s Fifth Largest Stock Market

Taiwan overtook India to become the world’s fifth largest stock market in terms of market capitalization, reaching USD 4.95 trillion compared to India’s USD 4.92 trillion. The rise was driven by the AI-led semiconductor boom led by Taiwan Semiconductor Manufacturing Company. India experienced foreign portfolio investor outflows and benchmark market declines amid changing global investment trends.

11. TCS Signs Multi-million Dollar AI-led ERP Deal with Sweden’s SKF

Tata Consultancy Services signed a multi-million dollar agreement with Swedish industrial manufacturer SKF to implement a next-generation AI-enabled Enterprise Resource Planning (ERP) platform. The partnership aims to modernize SKF’s global IT systems, improve operational efficiency, and enhance customer experience through AI-integrated digital enterprise solutions.

12. Janez Janša Becomes Prime Minister of Slovenia for Fourth Term

Janez Janša, leader of the Slovenian Democratic Party (SDS), was appointed Prime Minister of Slovenia for a fourth term after securing parliamentary approval. He succeeded Robert Golob and formed a centre-right coalition government following the 2026 parliamentary elections.

13. Red Balloon Aerospace Launches India’s First Indigenous Stratospheric SPB

Indian startup Red Balloon Aerospace Private Limited launched India’s first indigenous Stratospheric Super Pressure Balloon (SPB) named “VISTA” under Mission SANA in Vijayawada, Andhra Pradesh. The platform ascended to nearly 25 kilometres above Earth carrying payloads related to biological experiments, propulsion systems, navigation technologies, and earth observation sensors. India joined the United States, France, Japan, and China among nations possessing indigenous SPB capability.

14. Urdu Poet Bashir Badr Passes Away

Renowned Urdu poet and Padma Shri awardee Bashir Badr passed away at the age of 91 in Bhopal, Madhya Pradesh. He was awarded the Padma Shri in 1999 for his contribution to literature and education. His celebrated collection of ghazals earned him the Sahitya Akademi Award in Urdu literature.

15. International Day of United Nations Peacekeepers 2026 Observed on May 29

International Day of United Nations Peacekeepers was observed globally on May 29 with the theme “Invest in Peace”. The day honours the service and sacrifice of UN peacekeepers worldwide and commemorates the first UN peacekeeping mission launched in 1948 under the United Nations Truce Supervision Organization.

16. World Digestive Health Day 2026 Observed on May 29

World Digestive Health Day was observed globally on May 29 with the theme “Chronic Diarrhea: Don’t Flush the Signs Away.” Initiated by the World Gastroenterology Organisation, the observance raises awareness regarding prevention, diagnosis, and treatment of gastrointestinal disorders.

17. International Everest Day 2026 Observed on May 29

International Everest Day was observed globally on May 29 to commemorate the first successful ascent of Mount Everest by Edmund Hillary and Tenzing Norgay in 1953. The observance celebrates courage, resilience, and human endurance while honouring mountaineering achievements worldwide.

18. West Bengal Government Begins Annapurna Yojana Enrolment

The Government of West Bengal started the enrolment process for the Annapurna Yojana aimed at supporting women without fixed income sources. Eligible women aged between 25 and 60 years can apply through online and offline modes for monthly financial assistance. The enrolment drive will continue for 90 days across municipalities and wards in the state.

Context:

The Ayushman Bharat Digital Mission (ABDM) has crossed a landmark milestone of over 90 crore Ayushman Bharat Health Accounts (ABHAs) generated across India. The ABDM is a flagship national digital public infrastructure (DPI) project, implemented by the National Health Authority (NHA) under the Ministry of Health and Family Welfare (MoHFW), and was launched in September 2021. It functions as a single, unified digital highway linking the entire healthcare ecosystem, citizens, doctors, hospitals, pharmacies, diagnostic centres, and insurers, into an integrated, transparent, and interoperable digital framework. The mission’s vision is to bridge the information gap between public and private healthcare, create a single source of truth for health data, and give citizens full ownership of their lifelong, longitudinal health records.

Key Highlights

• Programme: Ayushman Bharat Digital Mission (ABDM).
• Implementing agency: National Health Authority (NHA).
• Parent Ministry: Ministry of Health and Family Welfare (MoHFW).
• Launched in: September 2021.
• Milestone: Over 90 crore ABHAs generated.

Aim:

(a) Build an integrated, transparent, interoperable digital health infrastructure for India. (b) Bridge the public-private divide in healthcare data. (c) Create a single source of truth for health records. (d) Give citizens absolute ownership of their lifelong health records.

Six foundational building blocks:

Component	What it does
Ayushman Bharat Health Account (ABHA)	14-digit unique digital health identifier; master key to link and share medical history
Healthcare Professionals Registry (HPR)	Verified central database of doctors, nurses, paramedics, modern and traditional medicine
Health Facility Registry (HFR)	Master registry of public and private hospitals, clinics, diagnostic centres, pharmacies
Health Information Exchange and Consent Manager (HIE-CM)	Routes medical records with explicit, electronic, revocable patient consent
Unified Health Interface (UHI)	Open network protocol for teleconsultations, diagnostics, and digital health services
National Health Claims Exchange (NHCX)	Digital platform to standardise and speed up health insurance claim settlements

About the News (Q&A)

What is the ABDM?

A digital public infrastructure (DPI) project that creates a unified national digital health framework linking citizens, providers, and insurers, implemented by the NHA under the MoHFW since September 2021.

What is the ABHA, and why is it called a “Health Aadhaar”?

ABHA is a 14-digit unique digital health identifier. Just as Aadhaar is the master ID for identity and UPI is the rails for payments, ABHA is the master key for digital health records. Citizens can link their medical history to it and share it securely with doctors and hospitals when needed.

Background Concepts (Q&A)

What is “Digital Public Infrastructure (DPI)”, and Why is It Relevant to Health?

Digital Public Infrastructure (DPI) is a set of shared, open, interoperable digital systems that serve as the basic plumbing for public and private services in a country, similar to how roads, electricity grids, and water supply are physical infrastructure. DPI is typically built on three layers: identity (e.g., Aadhaar), payments (e.g., UPI), and data exchange (e.g., Account Aggregator, DigiLocker, ABDM). The key features of DPI are: (a) public-good orientation, the infrastructure is built or backed by the state but open to use by both public and private actors; (b) open standards and APIs, so that many companies and applications can plug in; (c) interoperability, so that data and services can flow across providers; and (d) consent and privacy by design.

In health, DPI is especially important because medical data is highly sensitive, traditionally siloed within individual hospitals, and difficult to share across providers. ABDM brings the three DPI layers to the health system: ABHA as the identity layer, HIE-CM and UHI as the data and service exchange layers, and NHCX as the financial-settlement layer. India is now seen globally as a pioneer of digital public infrastructure, and its Health Stack (ABDM) is being studied by many developing countries as a possible model.

Practice MCQs

Q1. With reference to the Ayushman Bharat Digital Mission (ABDM), consider the following statements:

1. ABDM was officially launched in September 2021.
2. It is implemented by the National Health Authority (NHA) under the Ministry of Health and Family Welfare.
3. Over 90 crore Ayushman Bharat Health Accounts (ABHAs) have been generated under the mission.
4. The ABHA is a 14-digit unique digital health identifier issued to citizens.

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 the six foundational building blocks of ABDM:

1. The Healthcare Professionals Registry (HPR) is a verified database of doctors, nurses, and paramedical staff.
2. The Health Facility Registry (HFR) is a master registry of public and private hospitals, clinics, pharmacies, and diagnostic centres.
3. The Health Information Exchange and Consent Manager (HIE-CM) routes medical records only with the patient’s explicit, electronic, and revocable consent.
4. The National Health Claims Exchange (NHCX) is a digital platform to standardise and speed up health insurance claim settlements.

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

Q3. With reference to Digital Public Infrastructure (DPI), consider the following statements:

1. DPI typically rests on three layers: identity, payments, and data exchange.
2. DPI is designed to be open, interoperable, and consent-based.
3. Aadhaar, UPI, DigiLocker, Account Aggregator, and ABDM are part of India’s DPI ecosystem.
4. Digital Public Infrastructure is restricted to use only by government bodies and cannot be used by private companies.

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 is explicitly designed to be open to both public and private actors, NOT restricted to government use only.)

Q4. Consider the following statements about the National Health Authority (NHA):

1. The NHA is the apex implementing agency for Ayushman Bharat-PMJAY and the Ayushman Bharat Digital Mission (ABDM).
2. The NHA functions under the Ministry of Health and Family Welfare.
3. The NHA is headed by a Chief Executive Officer and has a Governing Board chaired by the Union Health Minister.
4. State Health Agencies (SHAs) implement PMJAY at the state level in coordination with the NHA.

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

Answer Key

1. (d), All four statements are correct.
2. (e), All four statements are correct.
3. (a), Statements 1, 2, 3 are correct; Statement 4 is wrong because DPI is explicitly designed to be open to both government and private actors, not restricted to government use.
4. (e), All four statements are correct.

6. India’s Maternal Mortality Ratio (MMR)

Context of the News

India’s Maternal Mortality Ratio (MMR), defined as the number of maternal deaths per 1,00,000 live births, has improved by just one point from 88 in 2021-23 to 87 in 2022-24, according to the latest Sample Registration System (SRS) bulletin released by the Office of the Registrar General and Census Commissioner, Ministry of Home Affairs. The headline is a near-stall in national progress, after two decades of sharp improvement, with India having cut MMR from 212 in 2007-09 to 88 in 2020-22, putting the country on track for the Sustainable Development Goal (SDG 3.1) target of reducing the global MMR to less than 70 by 2030.

Key Highlights

• Indicator: Maternal Mortality Ratio (MMR), deaths of women due to pregnancy-related causes per 1,00,000 live births.
• Source: Sample Registration System (SRS) bulletin.
• Latest value (2022-24): 87.
• Previous value (2021-23): 88.

Two-decade trend:

Period	MMR (per 1,00,000 live births)
2007-09	212
2020-22	88
2021-23	88
2022-24	87

SDG target:

Indicator	Target
SDG 3.1	Reduce global MMR to less than 70 per 1,00,000 live births by 2030

State-level performance:

Category	States
Strong improvers	Odisha, Assam, Chhattisgarh, Punjab, Telangana (cut MMR by 11-29 points)
Moderate improvers	Tamil Nadu and West Bengal (cut by 10 points each)
High-birth states improving	Bihar, Madhya Pradesh
Worsening states	Jharkhand (biggest), Uttar Pradesh, Gujarat
State with India’s highest MMR	Uttar Pradesh at 154 (nearly twice the national average)

Regional and global comparison:

India vs Country	Status
China, Sri Lanka, Bhutan	Well ahead of India
Bangladesh, Nepal, Pakistan, Myanmar	Behind India
Malaysia, Thailand, Vietnam	Ahead of India
Sub-Saharan Africa	Very high MMR, pulls global average up

About the News (Q&A)

What is the main finding?

India’s MMR has moved only by one point, from 88 to 87, between 2021-23 and 2022-24, suggesting that national progress has slowed sharply after two decades of rapid decline.

How does this compare to earlier years?

India had cut MMR from 212 in 2007-09 to 88 in 2020-22, a major achievement. Compared to this rapid pace, the latest one-point change is a near-stall.

Which states have improved?

(a) Odisha, Assam, Chhattisgarh, Punjab, Telangana (cut MMR by 11-29 points). (b) Tamil Nadu, West Bengal (cut by 10 points each). (c) Bihar, Madhya Pradesh (both high-birth states).

Which states have worsened?

(a) Jharkhand (biggest increase). (b) Uttar Pradesh. (c) Gujarat.

Uttar Pradesh now has India’s highest MMR at 154, nearly twice the national average.

How does India compare globally?

India is behind: China, Sri Lanka, Bhutan, Malaysia, Thailand, Vietnam. India is ahead of: Bangladesh, Nepal, Pakistan, Myanmar. The global average is higher than India because of very high MMR in parts of sub-Saharan Africa.

Background Concepts (Q&A)

What is the “Maternal Mortality Ratio (MMR)”, and How is It Different from Other Maternal Indicators?

The Maternal Mortality Ratio (MMR) is defined by the World Health Organization (WHO) as the number of maternal deaths per 1,00,000 live births in a given period. A maternal death is the death of a woman while pregnant or within 42 days of the end of pregnancy, from any cause related to or aggravated by the pregnancy or its management (but not from accidents or incidental causes). MMR measures the risk of dying from pregnancy or childbirth per pregnancy, and is the most widely used indicator of maternal health. India tracks MMR through the Sample Registration System (SRS), run by the Office of the Registrar General and Census Commissioner.

Two related but different indicators are:

(a) The Maternal Mortality Rate, which measures the number of maternal deaths per 1,00,000 women of reproductive age (15-49 years) in a given period. It reflects both the risk of pregnancy and the frequency of pregnancy in the population.

(b) The Lifetime Risk of Maternal Death, which measures the probability that a 15-year-old female will eventually die from a maternal cause. It combines the per-pregnancy risk (MMR) with the fertility rate (TFR).

MMR is preferred globally because it isolates the risk per pregnancy, making it comparable across countries with different fertility rates. India’s MMR of 87 (2022-24) means about 87 women die for every 1,00,000 live births, a sharp improvement over 2007-09 (212) but still higher than the SDG target of 70.

What are the Main Causes of Maternal Mortality in India, and What is the Policy Response?

In India, the main causes of maternal mortality include: (a) Postpartum haemorrhage (severe bleeding after delivery), the single largest cause globally and in India; (b) Hypertensive disorders, including pre-eclampsia and eclampsia; (c) Sepsis and infections after delivery; (d) Obstructed labour and complications during birth; (e) Unsafe abortion; and (f) Indirect causes like anaemia, malnutrition, malaria, and tuberculosis, which weaken pregnant women and increase the risk of dying during pregnancy or childbirth.

India’s policy response is built around strengthening the entire continuum of maternal care, through programmes like:

(a) Janani Suraksha Yojana (JSY), a conditional cash transfer to encourage institutional deliveries, especially in EAG states. (b) Janani Shishu Suraksha Karyakram (JSSK), which provides free delivery, free Caesarean section, free drugs, diagnostics, blood, and transport for pregnant women in public facilities. (c) Pradhan Mantri Surakshit Matritva Abhiyan (PMSMA and e-PMSMA), which provides free, comprehensive antenatal care on the 9th of every month, with special attention to high-risk pregnancies. (d) Surakshit Matritva Aashwasan (SUMAN), which guarantees zero-tolerance for denial of services to pregnant women in public health facilities. (e) LaQshya, which focuses on improving the quality of care in labour rooms and maternity operation theatres. (f) Anaemia Mukt Bharat and POSHAN Abhiyaan/POSHAN 2.0, which address anaemia and nutrition in adolescent girls, pregnant women, and lactating mothers. (g) Pradhan Mantri Matru Vandana Yojana (PMMVY 2.0), a maternity benefit scheme.

Together, these programmes have helped drive India’s MMR from 212 to 87 in about 15 years, but the last mile, especially in Uttar Pradesh, Jharkhand, and Gujarat, will require stronger system-level reforms.

Practice MCQs

Q1. With reference to India’s latest Maternal Mortality Ratio (MMR) figures, consider the following statements:

1. India’s MMR has marginally improved from 88 in 2021-23 to 87 in 2022-24 as per the latest SRS bulletin.
2. India had cut MMR from 212 in 2007-09 to 88 in 2020-22.
3. The Sustainable Development Goal (SDG) target is to reduce the global MMR to less than 70 per 1,00,000 live births by 2030.
4. Uttar Pradesh now has the highest MMR among Indian states at 154, nearly twice the national average.

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 state-level MMR trends in India:

1. Odisha, Assam, Chhattisgarh, Punjab, and Telangana have cut their MMR by 11 to 29 points.
2. Tamil Nadu and West Bengal have reduced their MMR by 10 points each.
3. Jharkhand, Uttar Pradesh, and Gujarat have seen their MMR worsen in the latest cycle.
4. Bihar and Madhya Pradesh, despite being high-birth states, have also reduced their MMR.

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

Q3. With reference to MMR-related concepts, consider the following statements:

1. Maternal Mortality Ratio (MMR) is defined as the number of maternal deaths per 1,00,000 live births in a given period.
2. A maternal death is the death of a woman while pregnant or within 42 days of the end of pregnancy from any cause related to or aggravated by the pregnancy.
3. The Maternal Mortality Rate is calculated per 1,00,000 women of reproductive age (15-49 years), not per 1,00,000 live births.
4. The Lifetime Risk of Maternal Death combines per-pregnancy risk with fertility rates.

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

Q4. Consider the following statements about India’s maternal health programmes:

1. Janani Suraksha Yojana (JSY) is a conditional cash transfer scheme to encourage institutional deliveries.
2. Janani Shishu Suraksha Karyakram (JSSK) provides free delivery, free C-section, free drugs, diagnostics, blood, and transport in public facilities.
3. Surakshit Matritva Aashwasan (SUMAN) guarantees zero tolerance for denial of services to pregnant women in public health facilities.
4. LaQshya is a Reserve Bank of India programme to improve banking services for pregnant women.

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; LaQshya is a Ministry of Health and Family Welfare initiative to improve quality of care in labour rooms and maternity OTs, NOT an RBI banking programme.)

Answer Key

1. (d), All four statements are correct.
2. (e), All four statements are correct.
3. (e), All four statements are correct.
4. (a), Statements 1, 2, 3 are correct; Statement 4 is wrong because LaQshya is a Ministry of Health programme, not an RBI banking scheme.

Banking/Finance

1. Government to Replace Wholesale Price Index (WPI) with Producer Price Index (PPI)

Source: TH

Context:

The Government of India has decided to phase out the Wholesale Price Index (WPI) over the next five years and gradually replace it with a more comprehensive Producer Price Index (PPI). From 15 June 2026, the Department for Promotion of Industry and Internal Trade (DPIIT) under the Ministry of Commerce and Industry will release: (a) a revised WPI series with the new base year 2022-23 (replacing the current 2011-12 base year); and (b) a new PPI series with three sub-indices: Output PPI, Trial Input PPI, and Services PPI. The Services PPI will, in its first phase, cover seven service sectors: banking, securities transactions, insurance, management of pension funds, railways, air passenger transport, and telecom.

Wholesale Price Index (WPI)

The WPI measures the average change in prices of goods bought and sold in bulk at the wholesale level, before they reach the retail consumer. It is the oldest price index in India.

Indicator	Detail
Released by	Office of the Economic Adviser, DPIIT, Ministry of Commerce and Industry
Current base year	2011-12 (to be revised to 2022-23)
Frequency	Monthly, released around the 14th of every month
Coverage	Goods only, no services
Total items	697 items in the existing series

Three major groups of WPI:

Group	Weight (existing 2011-12 series)
Primary Articles	22.62 per cent (food articles, non-food articles, minerals, crude petroleum)
Fuel and Power	13.15 per cent
Manufactured Products	64.23 per cent (the largest group)

Limitations of WPI:

(a) No services coverage, even though services contribute over 50 per cent of GDP. (b) Reflects bulk wholesale prices, not producer-level prices. (c) Does not directly capture consumer-experienced inflation. (d) Cannot fully analyse input-output price pass-through.

Producer Price Index (PPI)

The PPI measures the average change in prices received by domestic producers for their goods and services, at the producer’s gate, before any trade margins, transport costs, or taxes are added.

India’s new PPI (effective 15 June 2026) will have three sub-indices:

Sub-Index	Measures
Output PPI	Prices of goods produced and sold by producers
Trial Input PPI	Prices of inputs used by producers
Services PPI	Prices of services, starting with 7 sectors in Phase 1

The 7 services in the first phase of Services PPI:

(a) Banking. (b) Securities Transaction. (c) Insurance. (d) Management of Pension Funds. (e) Railways. (f) Air (Passenger) Transport. (g) Telecom.

Why the World Uses PPI:

(a) Captures producer-level price pressures, more accurate than wholesale. (b) Includes services, reflecting modern economies. (c) Allows clear input-output pass-through analysis. (d) Aligned with IMF Price Statistics Manuals. (e) Used by US, UK, EU, Japan, China, and most major economies.

WPI vs PPI, Head-to-Head Comparison

Parameter	Wholesale Price Index (WPI)	Producer Price Index (PPI)
Stage of measurement	Wholesale (bulk trading) level	Producer’s gate, before distribution margins
Coverage	Goods only	Goods + Services
Released by	DPIIT, Ministry of Commerce and Industry	DPIIT, Ministry of Commerce and Industry
Frequency	Monthly	Monthly for Output PPI, plus periodic Services and Input PPI
Number of items	697 (current series)	Wider, with services added
Use in monetary policy	Not the RBI’s inflation target	Not the RBI’s inflation target
Use in contracts	Widely used in price escalation clauses	Expected to gradually replace WPI
Reflects services?	No	Yes
Input-output analysis	Limited	Clear and structured
Aligned with global practice	Outdated; only a few countries use WPI	Standard global indicator

Where Each Fits in India’s Price-Index Ecosystem

Index	Released by	What It Measures	Used For
WPI	DPIIT, Ministry of Commerce and Industry	Wholesale-level goods prices	Price escalation clauses, industrial inflation analysis
PPI (new)	DPIIT, Ministry of Commerce and Industry	Producer-level goods and services prices	To replace WPI over five years
CPI (Combined, Rural, Urban)	National Statistical Office (NSO), MoSPI	Retail prices of household consumption basket	RBI MPC’s inflation target (4 per cent +/- 2 per cent)
CPI-IW (Industrial Workers)	Labour Bureau, Ministry of Labour and Employment	Retail prices for industrial workers	DA computation for government employees
CPI-AL/RL	Labour Bureau	Retail prices for agricultural and rural labourers	Wage and welfare indexation

Key Differences Between PPI and Consumer Price Index (CPI)

Parameter	PPI	CPI
Stage	Producer’s gate	Household / retail point of purchase
Measures	Prices received by producers	Prices paid by consumers
Coverage	Goods + services (producer side)	Goods + services in household basket
Use	Industrial inflation, contract pricing, GDP deflators	Inflation targeting, cost of living, DA, welfare indexation
Includes taxes?	Generally excludes indirect taxes on output	Includes indirect taxes in final consumer price

Practice MCQs

Q1. With reference to the Wholesale Price Index (WPI) and the Producer Price Index (PPI) in India, consider the following statements:

1. WPI measures the average change in prices of goods bought and sold in bulk at the wholesale level.
2. PPI measures the average change in prices received by domestic producers at the point of production.
3. WPI in India does not cover services, while the new PPI includes a Services PPI starting with 7 sectors in Phase 1.
4. Both WPI and PPI in India are released by the National Statistical Office (NSO).

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; WPI and PPI are released by the DPIIT under the Ministry of Commerce and Industry, NOT the NSO. The NSO releases CPI (Combined, Rural, Urban).)

Q2. Consider the following statements about the new PPI series being launched in India:

1. The new PPI series will be launched from 15 June 2026.
2. It will have three sub-indices: Output PPI, Trial Input PPI, and Services PPI.
3. The Services PPI in Phase 1 will cover banking, securities transactions, insurance, pension fund management, railways, air passenger transport, and telecom.
4. The transition from WPI to PPI aligns with IMF recommendations and global best practices.

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 architecture of price indices in India, consider the following statements:

1. The Consumer Price Index (Combined, Rural and Urban) is released by the National Statistical Office under the Ministry of Statistics and Programme Implementation.
2. The Consumer Price Index for Industrial Workers (CPI-IW) is released by the Labour Bureau under the Ministry of Labour and Employment.
3. The RBI’s Monetary Policy Committee targets the Consumer Price Index (Combined) inflation at 4 per cent, with a tolerance band of +/- 2 percentage points.
4. The Wholesale Price Index (WPI) is the official inflation target for the RBI under India’s monetary policy 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; the RBI’s official inflation target is the CPI (Combined), NOT the WPI.)

Q4. Consider the following statements about WPI and PPI features:

1. WPI covers only goods and does not include services.
2. PPI explicitly includes both goods (Output and Input) and services.
3. PPI is generally compiled at the producer’s gate, before trade margins and indirect taxes are added.
4. CPI captures prices at the retail consumer level, including taxes and trade margins.

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. (a), Statements 1, 2, 3 are correct; Statement 4 is wrong because WPI and PPI are released by DPIIT, not the NSO.
2. (d), All four statements are correct.
3. (a), Statements 1, 2, 3 are correct; Statement 4 is wrong because the RBI’s inflation target is CPI (Combined), not WPI.
4. (d), All four statements are correct.

Exam Relevance

Exam	Relevance
UPSC Prelims	GS Paper III on Indian Economy (Inflation indices, WPI, PPI, CPI)
UPSC Mains	GS Paper III on Indian Economy, Inflation, Monetary policy, Statistical reforms
Banking (RBI Gr B, SBI PO, IBPS, NABARD)	Very high importance, inflation, monetary policy, statistics
SEBI Grade A, IRDAI Grade A	Macroeconomic awareness
Indian Statistical Service (ISS)	Core area on price indices
SSC, Insurance, Railway	Static and Current GK on WPI, CPI, PPI, base years

2. RBI Reportedly Sold About USD 12 Billion in Gold to Shield Foreign-Currency Assets

Context:

According to an analysis by Bloomberg Economics, based on publicly available data, the Reserve Bank of India (RBI) may have sold gold reserves worth roughly USD 12 billion in the two weeks through 22 May, while simultaneously buying about USD 7.5 billion of foreign-currency assets. The move is being read as a deliberate rebalancing of India’s forex reserves, where the central bank is prioritising liquid foreign currency (mainly the US dollar) over gold holdings, at a time when India is facing multiple external pressures, including the Iran-related Middle East war, the effective closure of the Strait of Hormuz, sustained capital outflows, higher oil prices, and a widening current account deficit (CAD) that is pressuring the rupee.

Why this is significant?

(a) Gold prices were stable to firm, so the fall in reported gold value points to actual sales, not just valuation effects.
(b) Import duty on gold had been hiked, which would have increased the rupee value of gold reserves. (c) The direction of change in the data is opposite to what these factors would normally suggest, supporting the interpretation of active selling.

Why the RBI may be doing this?

(a) Pressure on the rupee from capital outflows and higher oil prices.
(b) Widening current account deficit due to costlier energy imports and softer remittance and FDI/FPI inflows.
(c) Need for liquid foreign currency, mainly US dollars, to intervene in the FX market without moving the spot rate too sharply.
(d) Gold, while a strategic reserve, is less immediately liquid than dollar assets in stress periods.

Why hold gold partly overseas?

(a) Operational flexibility during international transactions.
(b) Easier use as collateral for swaps and liquidity operations.
(c) Diversification of custody risk between domestic and global custodians.

Background Concepts (Q&A)

What are India’s “Foreign Exchange Reserves”, and What are They Composed Of?

Foreign Exchange Reserves (often shortened to forex reserves) are external assets held by the central bank of a country to support its currency, balance of payments, monetary policy, and financial stability. India’s forex reserves are managed by the Reserve Bank of India under the RBI Act, 1934 and the Foreign Exchange Management Act (FEMA), 1999, in consultation with the Government of India. They are composed of four main parts:

(a) Foreign Currency Assets (FCA), by far the largest component, mostly in US dollars, euros, British pounds, Japanese yen, and Chinese yuan, held in the form of deposits with foreign central banks, deposits with the Bank for International Settlements (BIS), and investments in highly rated foreign government securities (like US Treasuries, German bunds, etc.).

(b) Gold, held both in India (in RBI vaults) and overseas (with the Bank of England and the BIS).

(c) Special Drawing Rights (SDRs), an international reserve asset created by the IMF, with its value linked to a basket of currencies.

(d) Reserve Tranche Position (RTP) with the IMF, the quota-related amount that India can access from the IMF without conditionality.

Forex reserves are used to: (i) defend the rupee in times of stress; (ii) finance the trade deficit; (iii) service external debt; (iv) build international confidence in the economy; and (v) provide a cushion against sudden capital outflows.

Practice MCQs

Q1. With reference to recent reports about the RBI’s foreign reserves strategy, consider the following statements:

1. According to Bloomberg Economics, the RBI may have sold around USD 12 billion in gold reserves over a two-week period through 22 May.
2. The RBI is also reported to have bought about USD 7.5 billion in foreign-currency assets in the same period.
3. The reported sale of gold has been linked to pressure on the rupee from the Middle East war, higher oil prices, and capital outflows.
4. By end-March, India held about 880.52 metric tonnes of gold, with 77 per cent held domestically.

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 the composition of India’s foreign exchange reserves:

1. Foreign Currency Assets (FCA) are the largest component of India’s forex reserves.
2. India’s reserves also include gold holdings, Special Drawing Rights (SDRs), and a Reserve Tranche Position (RTP) with the IMF.
3. India’s overseas gold reserves are mainly held with the Bank of England and the Bank for International Settlements (BIS).
4. Special Drawing Rights are an international reserve asset created by the World Bank, not the IMF.

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; SDRs are created by the IMF, NOT the World Bank.)

Q3. With reference to the Strait of Hormuz and its importance for India, consider the following statements:

1. The Strait of Hormuz connects the Persian Gulf with the Gulf of Oman and onward with the Arabian Sea and the Indian Ocean.
2. Iran lies on the northern side of the strait, while Oman and the UAE lie to the south.
3. About a fifth of global oil trade by volume passes through the Strait of Hormuz.
4. India imports a large share of its crude oil from Gulf countries through the Strait of Hormuz.

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

Q4. Consider the following statements about the RBI’s policy options for defending the rupee:

1. Selling US dollars in the foreign exchange market is one of the most direct tools used by the RBI to support the rupee.
2. The RBI can conduct buy-sell dollar-rupee swap auctions to inject rupee liquidity while temporarily acquiring dollars.
3. The RBI has no role in any kind of intervention in the gold market.
4. Easing overseas borrowing limits for banks and expanding FPI access to debt markets can help attract capital inflows that support the rupee.

Which of the above are correct? (a) 1, 2 and 4 only (b) 1, 3 and 4 only (c) 2 and 4 only (d) 1 and 4 only (e) All four (Statement 3 is wrong; the RBI is actively involved in the management of India’s gold reserves, as part of its forex reserve management framework.)

Answer Key

1. (d), All four statements are correct.
2. (a), Statements 1, 2, 3 are correct; Statement 4 is wrong because SDRs are created by the IMF, not the World Bank.
3. (e), All four statements are correct.
4. (a), Statements 1, 2, 4 are correct; Statement 3 is wrong because the RBI manages India’s gold reserves as part of its forex reserve framework, and can buy or sell gold.

3. DFS Launches “Common Landing Portal” for Unclaimed Financial Assets

Context of the News

The Department of Financial Services (DFS), under the Ministry of Finance, has launched a Common Landing Portal for Unclaimed Financial Assets to help citizens easily search for and reclaim money they may have forgotten or lost track of across various parts of the financial system. The portal was launched by M. Nagaraju, Secretary, DFS, during a high-level review meeting of Public Sector Banks (PSBs) in New Delhi, and was developed in collaboration with the PSB Alliance, a joint initiative of public sector banks. The portal is a single, unified search platform where users can look for unclaimed assets across multiple categories, including bank deposits, insurance claims, shares and dividends, and mutual fund investments, instead of going to each regulator or bank separately.

Key Highlights

• Portal: Common Landing Portal for Unclaimed Financial Assets.
• Launched by: DFS, Ministry of Finance.
• Officially launched by: M. Nagaraju, Secretary, DFS.
• Developed in collaboration with: PSB Alliance (a joint initiative of public sector banks).

What the portal does:

Feature	Detail
Single entry point	One landing portal instead of multiple regulator-wise portals
Searchable categories	Bank deposits, insurance claims, shares and dividends, mutual fund investments
Aim	Easier access, transparency, citizen convenience
Alignment	Viksit Bharat 2047, financial inclusion, public awareness

Linked initiatives:

Initiative	Detail
“आपकी पूँजी, आपका अधिकार” (“Your Money, Your Right”)	Nationwide DFS-led campaign for awareness and reclaim of unclaimed assets
PSB Alliance	Joint platform of public sector banks for shared services (also runs Doorstep Banking, EASE reforms, etc.)

Existing channels for specific asset categories (still in operation):

Category	Channel
Unclaimed bank deposits	UDGAM portal of the Reserve Bank of India (RBI)
Unpaid dividends, matured deposits, debentures, shares	Investor Education and Protection Fund (IEPF) Authority under Ministry of Corporate Affairs
Unclaimed insurance amounts	IRDAI rules and the insurer’s own portals
Dormant EPF accounts	EPFO website / UMANG app
Mutual fund folios	Each AMC and MFCentral by AMFI

Background Concepts (Q&A)

What is the “RBI’s Depositor Education and Awareness (DEA) Fund”, and What Happens to Unclaimed Bank Deposits?

The Depositor Education and Awareness (DEA) Fund is a fund maintained by the Reserve Bank of India (RBI) under Section 26A of the Banking Regulation Act, 1949, where banks are required to transfer the credit balance of any deposit account that has remained inoperative for 10 years or more. Once a deposit is transferred to the DEA Fund, the bank continues to owe the depositor the amount, but the money is parked with the RBI, which uses the interest earned for promoting depositor education and awareness, research on banking and financial sector issues, and other depositor-protection activities.

If the rightful depositor or legal heir comes forward at any time, the bank is obligated to pay the amount (with applicable interest), and the bank then claims a refund from the DEA Fund. The RBI also runs the UDGAM portal (launched August 2023), a centralised web portal where citizens can search across multiple banks for unclaimed deposits using their name and a few identifying details, instead of going to each bank separately. The Common Landing Portal launched by DFS now sits on top of these systems, providing a single front door for unclaimed assets across multiple sectors, not just banking.

Agriculture

1. Ministry of Agriculture to Run “Khet Bachao Abhiyan”

Source: News on Air

Context:

The Union Ministry of Agriculture and Farmers Welfare will conduct a month-long, nationwide “Khet Bachao Abhiyan” from 1 to 30 June 2026, designed as an agricultural awareness and outreach campaign that combines sustainable farming practices, soil health improvement, and stronger farm-level decision-making.
The campaign’s main objectives are: (a) to promote the balanced and judicious use of fertilizers based on soil health and scientific recommendations, and (b) to provide weather-based, region-specific farm advisories, while linking farmers to the wider basket of government schemes and agricultural support.

Key Highlights

• Campaign: Khet Bachao Abhiyan.
• Duration: 1-30 June 2026.
• Run by: Ministry of Agriculture and Farmers Welfare, Government of India.

Aim of the Abhiyan:

(a) Balanced and judicious fertilizer use based on soil health.
(b) Region-specific, weather-based advisories for farmers.
(c) Scheme convergence for farmer support.
(d) Stronger farm-level decision-making.

Five core features:

Feature	Detail
Balanced fertilizer use	Soil-test based, INM-oriented; promote organic, bio-, and green manures
Climate-smart advisories	Guidance on crops, diversification, water, weather risks
Institutional participation	Panchayats, KVKs, ICAR, State Governments, Agriculture Departments
Panchayat-centric	Village-level implementation with community leaders
Scheme convergence	PM-KISAN, KCC, Pulses-Oilseeds Mission, Oil Palm Mission, Cotton Mission, mechanisation, water conservation

Schemes that the Abhiyan will help link farmers to:

Scheme	Purpose
PM-KISAN	₹6,000 per year direct income support in three instalments
Kisan Credit Card (KCC)	Short-term subsidised crop loans, also for allied activities
National Mission on Edible Oils (Oilseeds)	Reducing edible-oil imports, raising oilseed production
National Mission on Edible Oils-Oil Palm	Boosting oil palm cultivation under NMEO-OP
Cotton Mission	Improving cotton productivity and value-chain
Sub-Mission on Agricultural Mechanisation (SMAM)	Subsidies for tractors, drones, harvesters, etc.
PMKSY (Pradhan Mantri Krishi Sinchayee Yojana)	Water conservation and per-drop-more-crop approach

Facts To Remember

1. Admiral Krishna Swaminathan Assumes Charge as Chief of Naval Staff

Admiral Krishna Swaminathan officially assumed charge as the new Chief of the Naval Staff (CNS) of the Indian Navy during a formal ceremony held in New Delhi. He succeeded Admiral Dinesh K. Tripathi as the head of India’s naval forces.

2. Dr. Jitendra Singh Inaugurates India’s First ‘SkyCast’ Aviation Weather Monitoring System

Union Minister Dr. Jitendra Singh inaugurated India’s first ‘SkyCast’ aviation weather monitoring system at the Indira Gandhi International (IGI) Airport in New Delhi. Developed under Mission Mausam, the system makes India the 19th country globally to deploy an integrated aviation weather monitoring platform. SkyCast aims to improve aviation safety and reduce fog-related disruptions through real-time weather monitoring and advance forecasting alerts of up to three hours.

3. NITI Aayog Releases 10-Year Roadmap for India’s Semiconductor Industry

NITI Aayog’s Frontier Tech Hub released India’s first comprehensive semiconductor roadmap titled “Future of India’s Semiconductor Industry”. The roadmap outlines a long-term strategy to build a USD 120–150 billion semiconductor value chain by 2035 and position India as a major global hub for chip manufacturing, design, packaging, and testing. The report projects India could capture 10–13% of the global semiconductor market by 2035 through a ‘More-than-Moore’ manufacturing strategy.

4. MCA Expands CSR Rules to Include ZCZP Instruments on Social Stock Exchanges

The Ministry of Corporate Affairs (MCA) amended the Companies Act CSR framework by including subscription to Zero Coupon Zero Principal (ZCZP) Instruments listed on Social Stock Exchanges (SSEs) as an eligible Corporate Social Responsibility (CSR) activity. The reform allows companies to channel CSR funds towards eligible not-for-profit organizations through regulated financial instruments. CSR spending through ZCZP instruments has been capped at 10% of annual CSR expenditure.

5. Odisha Signs MoU with Intel and 3DGS for Semiconductor Manufacturing Facility

The Government of Odisha signed an MoU with Intel and 3D Glass Solutions (3DGS) to establish a USD 3.3 billion advanced packaging glass-core substrate manufacturing facility in the Bhubaneswar–Khurda region. The project will focus on semiconductor packaging technologies and high-density interconnect substrates, strengthening India’s semiconductor manufacturing ecosystem under the India Semiconductor Mission.

6. NISM Partners with Galgotias University for Financial Education Expansion

The National Institute of Securities Markets (NISM), established by Securities and Exchange Board of India, partnered with Galgotias University to strengthen industry-oriented financial education and training. The collaboration will provide students with access to NISM certifications, e-learning modules, market simulation platforms, and specialized training in securities markets, fintech, derivatives, and risk management.

7. Bajaj Finserv and IIT Bombay Launch ‘Finserv Intelligence’ Initiative

Bajaj Finserv partnered with Indian Institute of Technology Bombay to launch “Finserv Intelligence”, a strategic initiative focused on Artificial Intelligence (AI) and deep-tech research. The initiative plans investments of Rs.1,500–2,000 crore over five years in AI innovation startups and research projects related to cybersecurity, quantum technologies, healthcare, and digital financial inclusion.

8. Tamil Nadu Farmer Valluvan Honoured as FAO ‘Soil Farmer Hero’

Valluvan, a farmer from Pollachi district in Tamil Nadu, was honoured as a “Soil Farmer Hero” by the Food and Agriculture Organization for adopting sustainable and multi-crop farming practices. Supported by the Isha Foundation’s Cauvery Calling initiative, he transformed his 11-hectare farm into a diversified agricultural enterprise cultivating over 14 crop varieties.

9. Rajesh Kumar Singh Given Additional Charge as DRDO Chairman

Rajesh Kumar Singh, Defence Secretary in the Ministry of Defence, was assigned additional charge as Secretary of the Department of Defence Research and Development and Chairman of the Defence Research and Development Organisation. He assumed the responsibilities following the completion of Dr. Samir V. Kamat’s tenure.

10. Former Congress MP K. P. Dhanapalan Passes Away

Senior Congress leader and former Member of Parliament K. P. Dhanapalan passed away at the age of 76 in Kerala. He served as MP from Chalakudy between 2009 and 2014 and held several important positions in the Congress party and cooperative sector in Kerala.

11. Rajnath Singh Releases Commemorative Volume on ‘Operation Sindoor’

Union Defence Minister Rajnath Singh released a commemorative volume titled “Operation Sindoor” documenting testimonies and experiences of 100 Indian Armed Forces personnel involved in the operation. The publication highlights India’s integrated multi-domain warfare capabilities demonstrated during the operation launched after the Pahalgam terror attack in 2025.

12. International Week of Solidarity with the Peoples of Non-Self-Governing Territories 2026 Observed

The United Nations observed the International Week of Solidarity with the Peoples of Non-Self-Governing Territories from May 25 to 31, 2026. The observance promotes decolonization, self-determination, human rights, and sustainable development for Non-Self-Governing Territories across the world.

Context:

The Office of the United States Trade Representative (USTR) has proposed an additional 12.5 per cent tariff on imports from India and 53 other countries, alleging their failure to effectively enforce prohibitions on goods produced using forced labour. The proposal is not final, with written submissions due by 6 July and public hearings scheduled for 7 July 2026. The proposal comes under Section 301 of the US Trade Act, 1974, even as India and the US are close to finalising an interim bilateral trade deal.

Key Facts

Indicator	Detail
Proposed extra tariff	12.5 per cent
Total countries listed	54 (including India)
Legal basis	Section 301 of the US Trade Act, 1974
Status	Not final

What is Section 301 of the US Trade Act?

Section 301 empowers the US government to: (a) Investigate unfair trade practices by foreign countries. (b) Impose tariffs or trade restrictions if such practices are seen as harmful to US commerce.

Reason for the investigation:

The US has alleged that certain countries failed to effectively prevent imports of goods produced using forced labour.

India’s response:

The Ministry of Commerce and Industry has said that India remains engaged with the US regarding: (a) Section 301 proceedings. (b) Interim trade agreement negotiations.

Sectors likely to be impacted (labour-intensive):

Sector
Textiles
Garments
Leather products
Carpets
Brassware

What is “Forced Labour”?

According to international labour standards (notably the ILO Forced Labour Convention, 1930, Convention 29), forced labour is work extracted under threat, coercion, or without voluntary consent.

About the News (Q&A)

What is the USTR’s proposal?

An additional 12.5 per cent tariff on imports from India and 53 other countries, on the grounds that they have failed to effectively enforce prohibitions on goods produced using forced labour.

Under what law has this been proposed?

Section 301 of the US Trade Act, 1974, which allows the US to investigate and act against unfair trade practices considered harmful to US commerce.

Background Concepts (Q&A)

What is “Section 301 of the US Trade Act, 1974”, and Why is It Significant?

Section 301 of the US Trade Act, 1974 is a US domestic law that gives the Office of the United States Trade Representative (USTR) wide authority to investigate and respond to foreign trade practices considered unjustified, unreasonable, or discriminatory, and that burden or restrict US commerce.

Under Section 301, the USTR can: (a) Impose additional tariffs on imports from specific countries. (b) Suspend trade concessions previously granted. (c) Restrict services trade or investment. (d) Take other appropriate actions.

Section 301 has been controversial because it is a unilateral instrument, meaning the US can act based on its own investigation rather than through multilateral processes like the WTO Dispute Settlement Mechanism. It has been used in recent years against China (during the 2018-19 trade war), the European Union (digital services taxes), Vietnam, and India on various issues, including intellectual property protection, digital taxes, and now forced-labour enforcement.

What is “Forced Labour”, and How is It Defined in International Law?

Forced labour is defined by the International Labour Organization (ILO) Forced Labour Convention, 1930 (Convention 29) as “all work or service which is exacted from any person under the menace of any penalty and for which the said person has not offered himself voluntarily.”

Forced labour includes: (a) Bonded labour (debt-driven coercion). (b) State-imposed forced labour. (c) Trafficking in persons for labour exploitation. (d) Coerced labour of migrants, prisoners, or members of religious or ethnic minorities.

Key international and Indian legal instruments: (a) ILO Conventions 29 (1930) and 105 (1957): on forced labour and its abolition. India is a party to both. (b) Universal Declaration of Human Rights (UDHR), 1948: prohibits slavery and servitude. (c) Bonded Labour System (Abolition) Act, 1976 (India). (d) Article 23 of the Indian Constitution: prohibits trafficking and forced labour.

The US Tariff Act of 1930, Section 307 prohibits the import of goods made with forced labour, and is enforced by the US Customs and Border Protection (CBP) through Withhold Release Orders (WROs). The Uyghur Forced Labor Prevention Act, 2021 is the most prominent recent example, presuming goods from Xinjiang (China) to be made with forced labour unless proven otherwise.

Practice MCQs

Q1. With reference to the USTR’s recent proposal for an additional 12.5 per cent tariff, consider the following statements:

1. The tariff has been proposed under Section 301 of the US Trade Act, 1974.
2. The proposal targets India and 53 other countries for alleged failure to enforce forced-labour import prohibitions.
3. The USTR has scheduled public hearings on the matter for 7 July 2026.
4. The proposed tariff has already been finalised and notified for immediate implementation.

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 proposal is not yet final, and is subject to public hearings and written submissions before a final decision.)

Q2. Consider the following statements about Section 301 of the US Trade Act, 1974:

1. It is a US domestic law that empowers the United States Trade Representative (USTR) to act against foreign trade practices considered unfair.
2. Actions under Section 301 can include additional tariffs, suspension of trade concessions, and restrictions on services trade.
3. Section 301 is part of the World Trade Organization’s Dispute Settlement Understanding.
4. Section 301 has been used in recent years against countries like China, the European Union, and India.

Which of the above are correct? (a) 1, 2 and 4 only (b) 1, 3 and 4 only (c) 2 and 3 only (d) 1 and 4 only (e) All four (Statement 3 is wrong; Section 301 is a US domestic law, NOT part of the WTO Dispute Settlement Understanding.)

Q3. With reference to Indian export sectors potentially affected by the proposed USTR tariff, consider the following statements:

1. Textiles and garments are among the most exposed sectors.
2. Leather products, carpets, and brassware are also among the labour-intensive sectors flagged as vulnerable.
3. India’s response, articulated by the Ministry of Commerce and Industry, has emphasised continued engagement with the US.
4. IT services and software exports are directly affected by the proposed goods tariff.

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 proposed tariff is on goods, NOT on IT services or software.)

Q4. Consider the following statements about forced labour and the ILO framework:

1. The ILO Forced Labour Convention of 1930 (Convention 29) defines forced labour as work exacted under the menace of any penalty and without voluntary offering by the worker.
2. India is a party to ILO Conventions 29 and 105 on forced labour and its abolition.
3. Article 23 of the Indian Constitution prohibits trafficking in human beings and forced labour.
4. The Bonded Labour System (Abolition) Act, 1976 is the principal Indian legislation prohibiting bonded labour.

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. (c), Statements 1, 2, 3 are correct; Statement 4 is wrong because the proposal is not yet final.
2. (a), Statements 1, 2, 4 are correct; Statement 3 is wrong because Section 301 is a US domestic law, not part of the WTO framework.
3. (a), Statements 1, 2, 3 are correct; Statement 4 is wrong because the proposed tariff is on goods, not on IT services.
4. (d), All four statements are correct.

PYQ Reference [Prelims 2018]

International Labour Organization’s Conventions 138 and 182 are related to:

(a) Child labour ← CORRECT (b) Adaptation of agricultural practices to global climate change (c) Regulation of food prices and food security (d) Gender parity at the workplace

ILO Convention 138 (1973) is the Minimum Age Convention for employment, while ILO Convention 182 (1999) is the Worst Forms of Child Labour Convention. India ratified both in 2017.

Quick memory hook:

• Child labour conventions: 138 and 182.
• Forced labour conventions: 29 and 105.

Exam Relevance

Exam	Relevance
UPSC Prelims	GS Paper II on International Relations (USTR, WTO, Section 301, ILO)
UPSC Mains	GS Paper II on India-US, Effect of policies of developed countries; GS Paper III on External sector, Trade
BPSC and State PCS	International Affairs, Economy, Current Affairs

2. Forbes World’s Top 10 Richest People (June 2026)

Source: IE

Context:

Forbes, the American business magazine and global media company, has released its latest World’s Top 10 Richest People rankings (as of 1 June 2026). Elon Musk, the CEO of Tesla and SpaceX, has retained the top spot since May 2024, with an estimated net worth of USD 835 billion. Larry Page, co-founder of Alphabet Inc. (Google’s parent), is in second place with USD 309 billion, while his fellow co-founder Sergey Brin is third with USD 285 billion. The list reflects the continued dominance of US-based tech billionaires in global wealth rankings.

Key Facts

Forbes Top 10 Richest People in the World (June 2026):

Rank	Person	Net Worth (USD billion)	Source / Company
1	Elon Musk	835	Tesla, SpaceX
2	Larry Page	309	Alphabet (Google) co-founder
3	Sergey Brin	285	Alphabet (Google) co-founder
4	Jeff Bezos	277	Amazon, Blue Origin founder
5	Larry Ellison	276	Oracle co-founder and Chairman
6	Michael Dell	260.1	Dell Technologies
7	Mark Zuckerberg	206.1	Meta Platforms (Facebook, Instagram, WhatsApp)
8	Jensen Huang	193.7	NVIDIA CEO
9	Bernard Arnault	149.1	LVMH (Louis Vuitton, Dior, etc.)
10	Steve Ballmer	143.5	Former CEO, Microsoft

Indian billionaires like Mukesh Ambani (Reliance Industries) and Gautam Adani (Adani Group) are usually in the global top 20-25, but not in the top 10 as of this snapshot. India also features many other names in the Forbes World’s Billionaires list.

About Forbes and the ranking:

• Forbes: an American business magazine founded in 1917 by B. C. Forbes and Walter Drey; headquartered in Jersey City, New Jersey, USA.
• Forbes is famous for several global lists, including the World’s Billionaires list, Forbes 400 (richest Americans), Global 2000 (largest public companies), Most Powerful People, and Best Countries for Business.
• The wealth estimates are calculated based on public stock holdings, private business valuations, real estate, and other assets, net of debts, on a specified date.

Practice MCQs

Q1. With reference to the Forbes World’s Top 10 Richest People list (June 2026), consider the following statements:

1. Elon Musk topped the list with an estimated net worth of about USD 835 billion.
2. Larry Page and Sergey Brin, co-founders of Alphabet (Google’s parent), are ranked second and third respectively.
3. Jeff Bezos, founder of Amazon and Blue Origin, is ranked fourth with about USD 277 billion.
4. Bernard Arnault, Chairman of LVMH, is the only non-American billionaire in the top 10 of this list.

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 specific billionaires in the Forbes June 2026 list:

1. Larry Ellison is associated with the technology company Oracle.
2. Jensen Huang is the CEO of NVIDIA, a leading semiconductor company.
3. Bernard Arnault heads LVMH, which owns brands like Louis Vuitton, Dior, Tiffany, and Bulgari.
4. Steve Ballmer is a former CEO of Apple.

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; Steve Ballmer is a former CEO of Microsoft, NOT Apple.)

Q3. With reference to Forbes and its rankings, consider the following statements:

1. Forbes is an American business magazine and global media company founded in 1917 by B. C. Forbes and Walter Drey.
2. Forbes is headquartered in Jersey City, New Jersey, USA.
3. Forbes publishes lists such as the World’s Billionaires, Forbes 400, Forbes Global 2000, Most Powerful People, and Forbes 30 Under 30.
4. The Forbes World’s Billionaires list is published once a year, although net worth is also tracked in real time on its website.

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

Q4. Consider the following statements about wealth concentration and inequality:

1. Wealth concentration refers to the unequal distribution of accumulated assets, not annual income.
2. Income inequality measures the distribution of annual earnings, while wealth concentration measures the distribution of total wealth.
3. The Gini coefficient is a commonly used measure of inequality, with values closer to 1 indicating greater inequality.
4. SDG 10 of the United Nations Sustainable Development Goals focuses on reducing inequality within and among countries.

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 Steve Ballmer is a former CEO of Microsoft, not Apple.
3. (e), All four statements are correct.
4. (d), All four statements are correct.

National Affairs

1. India Receives Fourth S-400 Squadron from Russia

Source: TOI

Context:

India has received the fourth squadron of the Russian-made S-400 long-range air defence missile system from Russia, as part of the USD 5.43-billion contract signed between India and Russia in 2018 for the acquisition of five S-400 regimental systems. The fourth squadron arrived in May 2026, and is expected to be deployed in an operational area shortly. Three S-400 squadrons had already been inducted into service before this; the fourth has now arrived after delays caused by the Russia-Ukraine conflict, which had disrupted defence supply chains between Russia and several global partners.

Key Highlights

• System: S-400 Triumf (NATO reporting name: SA-21 Growler).
• Origin: Russian-made.
• Contract value: USD 5.43 billion.
• Number of squadrons: 5 (under the contract).

Key capabilities of the S-400:

Feature	Detail
Type	Long-range surface-to-air missile (SAM) system
Maximum range	About 400 km (longest-range variant)
Engagement altitude	From a few metres to 30+ km
Targets	Aircraft, drones, cruise missiles, short and intermediate-range ballistic missiles
Simultaneous targets	Can track 300+ targets and engage multiple simultaneously
Multi-layered missiles	Different missiles for short, medium, long, and very-long range
Mobility	Highly mobile, road-based; can deploy and relocate quickly

Background Concepts

What is the S-400 Triumf, and What Makes It a Top-Tier Air Defence System?

The S-400 Triumf (NATO reporting name: SA-21 Growler) is a Russian-made long-range, mobile, surface-to-air missile (SAM) system developed by Almaz-Antey, designed to protect large air-defence areas against a wide range of aerial threats. It entered service with the Russian Armed Forces in 2007 and has been exported to several countries, including China, Turkey, Belarus, Algeria, Saudi Arabia, and India.

What makes the S-400 a top-tier air defence system:

(a) Multi-target tracking: Can track over 300 targets simultaneously and engage multiple simultaneously.

(b) Multi-layered missile mix: The system fires different types of missiles for different ranges:

• Very long-range missile (up to 400 km), capable of engaging high-altitude, high-value targets like AWACS aircraft and refuelling tankers.
• Long-range missile (up to 250 km).
• Medium-range missile (around 120 km).
• Short-range missile (around 40 km) for close-in defence.

(c) Wide altitude coverage: From a few metres above ground (against cruise missiles) to about 30 km altitude (against ballistic missiles).

(d) High mobility: The system is road-mobile, allowing fast deployment and relocation, which makes it less vulnerable to enemy strikes.

(e) Robust radars and command systems: Each S-400 unit includes multiple radars for early warning, target acquisition, fire control, and a command-and-control vehicle.

(f) Engagement of multiple threat types: Aircraft (including stealth), drones, cruise missiles, and short to intermediate-range ballistic missiles.

Practice MCQs

Q1. With reference to the recent delivery of the fourth S-400 squadron, consider the following statements:

1. India has received the fourth S-400 air defence squadron from Russia in May 2026.
2. The S-400 deal between India and Russia was signed in 2018 for five regimental systems, worth USD 5.43 billion.
3. The fifth and final S-400 squadron under the contract is expected to be delivered in 2027.
4. The fourth squadron will be integrated with AI-enabled decision-support capabilities for threat prioritisation.

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 the S-400 Triumf air defence system:

1. The S-400 is a Russian-made, long-range, mobile surface-to-air missile system developed by Almaz-Antey.
2. It can engage targets such as aircraft, drones, cruise missiles, and short and intermediate-range ballistic missiles.
3. Its longest-range missile can engage targets up to about 400 km away.
4. The S-400 cannot track multiple targets at the same time.

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 S-400 can track over 300 targets simultaneously and engage multiple targets at the same time.)

Q3. With reference to India’s air defence architecture, consider the following statements:

1. The Akash missile system is an indigenous medium-range surface-to-air missile system developed by DRDO.
2. The MR-SAM (Barak-8) is a joint India-Israel medium-range air defence system.
3. Project Kusha is an indigenous long-range air defence missile project under development by DRDO.
4. Akashteer is an indigenous air-defence command-and-control system designed to integrate multiple air defence assets.

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

Q4. Consider the following statements about the impact of the Russia-Ukraine conflict on Indian defence imports:

1. The Russia-Ukraine conflict has affected the delivery timelines of major Russian defence systems including the S-400 to India.
2. India faces potential secondary sanction risks under the US CAATSA framework for purchasing major Russian weapons.
3. India has used the disruption as one reason to diversify its defence partnerships with France, the United States, and Israel.
4. The Russia-Ukraine conflict has fully ended India’s defence relationship with Russia.

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 Russia-Ukraine conflict has not ended India’s defence relationship with Russia; India continues to acquire major Russian systems, including the S-400, and remains a significant defence partner.)

Answer Key

1. (d), All four statements are correct.
2. (a), Statements 1, 2, 3 are correct; Statement 4 is wrong because S-400 can track and engage multiple targets simultaneously.
3. (e), All four statements are correct.
4. (a), Statements 1, 2, 3 are correct; Statement 4 is wrong because India’s defence ties with Russia have continued, not ended.

2. Prime Minister Research Chair (PMRC) Scheme 2026

Source: News on Air

Context:

The Department of Higher Education under the Ministry of Education has officially opened applications for the Prime Minister Research Chair (PMRC) Scheme 2026. The PMRC is a national talent-repatriation initiative that creates a direct pathway for top Indian-origin researchers working in leading foreign universities, private laboratories, and tech industries to take up high-level research positions in premier Indian institutions, especially in 13 strategic technology areas critical to India’s economic and security future.

About Scheme

The scheme will link global Indian talent with the country’s rapidly expanding research, development, innovation and technology ecosystem across 13 thematic areas of national priority, including Advanced Computing, Semiconductors and Cybersecurity.  

Key Facts

• Scheme: Prime Minister Research Chair (PMRC) Scheme 2026.
• Ministry: Department of Higher Education, Ministry of Education.
• Budget estimate: about ₹200 crore for multi-year research grants, relocation, fellowships, and lab infrastructure.
• Governance: An Empowered Committee chaired by the Principal Scientific Adviser (PSA) to the Government of India.

13 Prioritised Strategic Thematic Areas:

Category	Areas
Computing and Tech (4)	Advanced Computing (AI, Quantum, Supercomputing), Semiconductors, Next-Generation Communications, Cybersecurity
Industrial and Infrastructure (4)	Manufacturing and Industry 4.0, Advanced Materials and Critical Minerals, Space and Defence, Atomic Energy
Sustainability and Biology (5)	Energy, Sustainability and Climate Change, Biotechnology, Healthcare and MedTech, Agri and Food Technologies, Blue Economy

Difference from PMRF (often confused):

Indicator	PMRC (this scheme)	PMRF (Prime Minister’s Research Fellowship)
Target	Indian-origin researchers abroad	Indian students pursuing PhDs in India
Stage	Mid- to senior-level researchers	Doctoral (PhD) candidates
Aim	Talent repatriation	Top domestic doctoral fellowships

About the News (Q&A)

What is the Prime Minister Research Chair (PMRC) Scheme?

A government scheme to attract top Indian-origin researchers working abroad to take up research positions in top Indian institutions, particularly in 13 strategic technology areas.

Who administers and funds it?

The Department of Higher Education, Ministry of Education, with an Empowered Committee chaired by the Principal Scientific Adviser to the Government of India for evaluation and selection.

Background Concepts (Q&A)

What is the “National Institutional Ranking Framework (NIRF)”, and Why is It Central to the PMRC?

The National Institutional Ranking Framework (NIRF) is the Government of India’s official ranking system for higher education institutions, launched in 2015 by the Ministry of Education (then Ministry of Human Resource Development). The framework ranks institutions across multiple categories, including Overall, Universities, Engineering, Management, Pharmacy, Medical, Law, Architecture, Dental, Research, Agriculture, Innovation, and State Universities.

NIRF rankings are based on five broad parameters:

(a) Teaching, Learning, and Resources, covering faculty-student ratios, infrastructure, and PhD output. (b) Research and Professional Practice, covering publications, citations, intellectual property, and funded research. (c) Graduation Outcomes, including placement, higher studies progression, and exam results. (d) Outreach and Inclusivity, including gender diversity, regional diversity, and outreach to disadvantaged groups. (e) Perception, based on a wide survey of employers, academics, and professionals.

NIRF is central to the PMRC because the host eligibility criteria are tied directly to NIRF ranks. Institutions in the Top 100 of NIRF Overall or Engineering, or Top 50 of NIRF Research, are eligible to host PMRC researchers. This use of NIRF acts as a quality filter, ensuring that incoming global talent is hosted only by institutions with strong academic and research environments, with the infrastructure and culture to support high-end work.

Practice MCQs

Q1. With reference to the Prime Minister Research Chair (PMRC) Scheme 2026, consider the following statements:

1. The scheme is administered by the Department of Higher Education under the Ministry of Education.
2. It is designed to attract Indian-origin researchers working in leading foreign universities, private laboratories, and tech industries to top Indian institutions.
3. The scheme has three tiers: Young Research Fellows, Senior Research Fellows, and Research Chairs.
4. The Empowered Committee that selects fellows and proposals is chaired by the Principal Scientific Adviser to the Government of India.

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 the institutional eligibility under the PMRC scheme:

1. Only government Higher Education Institutions ranked in the Top 100 of NIRF Overall or Engineering, or Top 50 of NIRF Research, can host PMRC researchers.
2. Selected national research labs under DST, DBT, ICMR, and CSIR are also eligible to host PMRC researchers.
3. Seven institutions, including IIT Delhi, IIT Bombay, IIT Madras, IIT Kanpur, IIT Hyderabad, IIT (ISM) Dhanbad, and IISc Bengaluru, have been designated as Lead Hubs.
4. The scheme is open to all private universities in India regardless of NIRF ranking.

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 PMRC scheme is restricted to government Higher Education Institutions meeting NIRF criteria, NOT all private universities.)

Q3. With reference to the 13 strategic thematic areas under the PMRC scheme, consider the following statements:

1. The Computing and Tech category includes Advanced Computing (AI, Quantum, and Supercomputing), Semiconductors, Next-Generation Communications, and Cybersecurity.
2. Space and Defence and Atomic Energy are among the prioritised areas.
3. Biotechnology, Healthcare and MedTech, Agri and Food Technologies, and Blue Economy are part of the Sustainability and Biology category.
4. The Sports and Recreation sector is one of the 13 prioritised thematic areas under the scheme.

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; Sports and Recreation is not one of the 13 prioritised thematic areas.)

Q4. Consider the following statements about the broader research ecosystem in India:

1. The Anusandhan National Research Foundation (ANRF) was set up under the ANRF Act, 2023, and is chaired by the Prime Minister.
2. The National Institutional Ranking Framework (NIRF) is run by the Ministry of Education and ranks institutions across multiple categories.
3. The Principal Scientific Adviser (PSA) is an ex-officio member of the ANRF and chairs the PMRC Empowered Committee.
4. The Prime Minister’s Research Fellowship (PMRF) and the Prime Minister Research Chair (PMRC) are the same scheme.

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; PMRF and PMRC are different schemes: PMRF supports doctoral students in India, while PMRC targets Indian-origin researchers abroad at mid and senior levels.)

Answer Key

1. (d), All four statements are correct.
2. (a), Statements 1, 2, 3 are correct; Statement 4 is wrong because the scheme is restricted to government Higher Education Institutions meeting NIRF criteria and select research labs.
3. (a), Statements 1, 2, 3 are correct; Statement 4 is wrong because Sports and Recreation is not among the 13 prioritised areas.
4. (a), Statements 1, 2, 3 are correct; Statement 4 is wrong because PMRF and PMRC are distinct schemes.

3. Mission Senehjori Launched

Source: PIB

Context:

Union Minister Jyotiraditya M. Scindia and the Chief Minister of Assam have launched Mission Senehjori on 2 June 2026, an Atmanirbhar North East project aimed at transforming Assam’s Muga silk, the only silk in the world that is golden in colour and produced exclusively in Assam, into a globally competitive luxury ecosystem. The mission is anchored by the Ministry of Development of North Eastern Region (MDoNER), in convergence with the Ministry of Textiles and the Government of Assam, and will work along the entire farm-to-foreign-shores value chain.

Key Facts

• Initiative: Mission Senehjori.
• Launched on: 2 June 2026.
• Launched by: Union Minister Jyotiraditya M. Scindia (MDoNER) and the Chief Minister of Assam.
• Anchor ministry: Ministry of Development of North Eastern Region (MDoNER).
• Partner ministry: Ministry of Textiles.
• Implementing State: Government of Assam.
• Programme type: Cluster-based, value-chain-focused textile initiative.

Why Muga silk matters:

Indicator	Detail
Produced exclusively in	Assam (a globally unique product)
Colour	Natural golden tint, brightens with age
Geographical Indication (GI) tag	Yes (since 2007)
Host plants	Som (Persea bombycina) and Soalu (Litsea polyantha) trees
Current rearer-weaver income (annual)	About ₹18,000 to ₹21,000

Main goals:

(a) Raise annual incomes of Muga rearers and weavers (currently very low).
(b) Capture full premium value of Muga silk from the farm gate to international markets.
(c) Position Muga silk as a traceable, GI-tagged, high-end global commodity.
(d) Preserve Assam’s silk heritage and culture.

Why this matters:

(a) Muga silk is one of Assam’s most unique cultural and economic assets, but rearers and weavers earn very low incomes.
(b) The golden colour and rarity give Muga strong luxury-market potential, especially in Japan, the EU, and the Middle East.
(c) GI authentication and digital traceability can protect Muga from cheaper imitations.
(d) FPOs and Farmer Interest Groups give weavers and rearers collective bargaining power.
(e) Silk tourism can create additional employment and link the textile story to cultural experience.
(f) Fits the Aatmanirbhar North East vision and the broader Viksit Bharat 2047 focus on traditional, place-based industries.

Other Indian silks for context:

Silk	Where Produced	Type
Muga	Assam (only place in the world)	Wild silk, golden
Eri / Endi	Assam, Meghalaya, Bihar, parts of NE	Wild silk, vegan (non-violent)
Tasar	Jharkhand, Chhattisgarh, Odisha, MP	Wild silk
Mulberry	Karnataka, AP, TN, WB, J&K	Cultivated silk (largest share)

About the News (Q&A)

What is Mission Senehjori?

A cluster-based, value-chain-focused textile initiative to transform Assam’s Muga silk into a globally competitive luxury brand, anchored by MDoNER in partnership with the Ministry of Textiles and the Government of Assam.

What is special about Muga silk?

Muga silk is produced exclusively in Assam, has a natural golden colour that brightens with age, holds a Geographical Indication (GI) tag since 2007, and is reared on the leaves of Som and Soalu trees.

Practice MCQs

Q1. With reference to Mission Senehjori, consider the following statements:

1. Mission Senehjori was launched in June 2026 to transform Assam’s Muga silk into a global luxury brand.
2. It is an Atmanirbhar North East project anchored by the Ministry of Development of North Eastern Region (MDoNER).
3. It works in convergence with the Ministry of Textiles and the Government of Assam.
4. The mission targets annual Muga silk exports of over 2,000 kg by 2028.

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 the key targets and components of Mission Senehjori:

1. The mission plans to regenerate about 5,000 hectares of Som and Soalu host plants.
2. It aims to establish five modernised reeling units and a specialised Muga Spun Mill.
3. The mission will create 30 Farmer Producer Organisations and over 1,180 Farmer Interest Groups.
4. About 80 per cent of traded Muga silk is targeted to be authenticated under the Geographical Indication (GI) tag.

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

Q3. With reference to Muga silk, consider the following statements:

1. Muga silk is produced exclusively in Assam.
2. It is produced by the Muga silkworm, Antheraea assamensis, which feeds on Som and Soalu trees.
3. Muga silk has a natural golden tint that brightens over time with washing and wear.
4. Muga silk is a type of cultivated mulberry silk.

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; Muga is a wild, non-mulberry silk, not a cultivated mulberry silk.)

Q4. Consider the following statements about Geographical Indication (GI) tags in India:

1. Geographical Indications in India are governed by the Geographical Indications of Goods (Registration and Protection) Act, 1999.
2. The GI Registry in India is headquartered in Chennai.
3. Muga silk of Assam received a Geographical Indication tag in 2007.
4. India’s protection of GIs is broadly aligned with the obligations under the WTO’s TRIPS Agreement.

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. (e), All four statements are correct.
3. (a), Statements 1, 2, 3 are correct; Statement 4 is wrong because Muga is a wild, non-mulberry silk.
4. (d), All four statements are correct.

Exam Relevance

Exam	Relevance
UPSC Prelims	GS Paper II on Government Schemes; GS Paper III on Indian Economy (Textiles, GI, Exports)
UPSC Mains	GS Paper II on Welfare schemes, North East development; GS Paper III on Indian Economy, Textiles, IPR
BPSC and State PCS	Schemes, Economy, Current Affairs
Banking and NABARD	General Awareness on rural livelihoods and FPOs
NABARD Grade A	Very high importance on rural development, FPOs, sericulture

Banking/Finance

1. RBI Annual Report 2025-26

Source: RBI

Context:

The Reserve Bank of India has released its Annual Report 2025-26, a statutory report of its Central Board of Directors covering its working and functions from April 2025 to March 2026. The report shows an Indian economy that grew at 7.6 per cent, with sharp food deflation pulling CPI to 2.1 per cent, alongside a depreciating rupee, FPI outflows, falling Sensex, a widening trade deficit cushioned by services and remittances, and an RBI that cut the policy repo rate by 100 bps to 5.25 per cent while running a larger balance sheet (26.4 per cent of GDP) through the West Asia conflict-driven external stress.

PART ONE: THE ECONOMY

Chapter I: Taking Stock and Looking Forward

The World Economy

Worldwide output expanded 3.4% during 2025, a touch above the 3.3% recorded in 2024. The year was a tug-of-war: steep tariffs, mounting public debts, and murky trade rules dragged on activity, while early stockpiling of imports ahead of tariffs, the reshaping of supply chains, and a wave of AI-driven technology spending propped it up. Once hostilities erupted in West Asia in the final days of February 2026, the IMF trimmed its 2026 global growth call to 3.1%.

Trade told a similar story. The total volume of goods and services traded across borders climbed 5.1% in 2025. Goods led with 4.6% growth as firms loaded up on technology inventory, whereas services cooled to 5.3% once the rush of post-pandemic travel ran its course. For 2026, the IMF anticipates a marked slowdown to 2.8%.

On prices, global inflation drifted down to 4.1% over 2025. With the West Asian flare-up snarling shipping lanes and supply networks, however, the Fund nudged its 2026 inflation projection up to 4.4%.

India’s Economy

India held on to its title as the quickest-expanding major economy. Real GDP rose 7.6% in 2025-26, building on the prior year’s 7.1%, with buoyant household demand and dependable investment doing the heavy lifting. Looking to 2026-27, growth is pencilled in at 6.9%, though the balance of risks tilts downward given the threat of dearer freight and energy from overseas.

Inflation eased dramatically. Headline CPI cooled to 2.1% in 2025-26 from 4.6% a year earlier, almost entirely because food turned cheaper. The forecast for 2026-27 sits at 4.6%, with risks pointing higher.

Chapter II: The Economy in Detail

The Real Economy

On the demand side, consumer spending continued to anchor the economy. It quickened to 7.7% in 2025-26 from 5.8%, lifted by firm appetite in both rural and urban markets. Investment in physical assets such as plants and machinery advanced a healthy 7.1%, and the broader investment-to-GDP ratio held firm at 34.3% in 2024-25.

Savings improved as well. National savings reached 34.2% of disposable income in 2024-25, households’ net financial savings edged up to 7.0%, and the government’s shortfall between earning and spending narrowed to 4.6% of GDP from 5.3%. Closing this gap between what the nation saves and invests has left India leaning less heavily on fickle foreign capital.

Turning to supply, farming lost momentum, slowing to 2.4% from 4.2% as poor weather hit the monsoon (Kharif) harvest. A generous South-West monsoon offered relief, though, pushing reservoir levels to a record 91.4% by October 2025 and giving the winter and summer crops a boost. Come end-March 2026, the government’s grain reserves stood at over four times the legally required cushion.

Industry was a standout, growing 9.5% versus 8.7% the year before, with manufacturing surging 11.5% and factory utilisation climbing to 75.6% by the third quarter. The clean-energy push also hit milestones: renewable capacity passed 250 GW, total non-fossil capacity reached 283 GW — more than half (53.2%) of the power mix — fulfilling the COP26 pledge years ahead of 2030, while EV sales topped 25 lakh units under PM E-DRIVE. Services, contributing 69% of real growth, grew 8.7%, powered by trade, transport, hospitality, and professional finance and IT work.

Prices

A new price-measurement framework arrived in February 2026, when MoSPI rolled out a CPI series rebased to 2024, refreshing the basket using the 2023-24 household spending survey. Food and beverages saw their weight cut from 45.9% to 36.8%, ready meals were folded into restaurants and accommodation, a single housing-and-fuel category was carved out at 17.7%, and transport (8.8%) and information and communication (3.6%) were given their own slots.

Behind the headline numbers, food prices slipped 0.8% from April to December 2025. Tomatoes, onions, and potatoes plunged 31.3% as onion output jumped 26.7% and buffer stocks were released; pulses also fell, down 13%. Cutting the other way, edible oils and fats vaulted 15.0% on the back of global palm-oil biodiesel rules. Fuel inflation crept up to 2.4% over the same stretch after LPG cylinders rose ₹50 in April 2025 and another ₹60 in March 2026. Stripping out food and fuel, core inflation lingered near 4.3% (3.7% in the fourth quarter under the new series), kept warm by personal-care costs — chiefly gold and silver, which spiked as nervous investors sought shelter. Elsewhere, wholesale inflation softened to 0.7% from 2.3% on cheaper energy, and the GDP deflator fell to 0.9% from 2.5%.

Money and Credit

The RBI’s balance sheet equalled 26.4% of GDP. After accounting for the staggered one-percentage-point cut to the Cash Reserve Ratio — which brought the requirement down to 3.0% — reserve money grew 10.8%, while cash in public hands rose 11.4% on welfare payouts and stronger retail spending after tax cuts. Broad money expanded 13.0%, up from 9.4%, aided by a 10.6% rise in time deposits; the currency-to-deposit ratio dipped to 14.9% and the money multiplier firmed to 6.1.

Lending stayed robust. Non-food bank credit grew 15.9%, with non-bank credit up 13.3%. Loans to micro and small firms leapt 33.1% and to medium firms 21.7%; personal loans rose 16.2%, of which housing made up close to half; and bank lending to NBFCs climbed 26.3% once the RBI reset risk weights to normal in April 2025. Because credit outran deposits, the funding gap widened, nudging banks to issue more Certificates of Deposit to plug the hole.

Financial Markets

In the money market, the overnight call rate hugged the repo rate, sitting about 7 basis points beneath it, and collateral-backed trades dominated — triparty repos at 67% and market repos at 30%. Government bond yields dipped early on amid ample liquidity but firmed later, with the 10-year benchmark pushing past 7.04% by late March 2026 as crude prices and borrowing plans rose.

Equities had a rough year: the Sensex shed 7.1% to close at 71,948, as a strong first half gave way to a second-half slide driven by West Asian strains and a reset in tech valuations. Foreign portfolio investors offloaded a net ₹2.7 lakh crore of shares, while domestic institutions snapped up a net ₹8.5 lakh crore. The rupee leaned weaker all year, ending 9.9% lower at ₹94.83 to the dollar, and the trade-weighted NEER and REER measures fell 6.9% and 7.5%.

Government Finances

The Centre tightened its belt, trimming the fiscal deficit to 4.4% of GDP in 2025-26 (revised) on the strength of solid non-tax receipts and disciplined spending, with the bar set fractionally lower at 4.3% for 2026-27. Direct taxes are slated to reach 6.9% of GDP next year — a ten-year high — and central capital outlay is set to grow 11.5% to ₹12.2 lakh crore. States saw revenue growth ease on thinner central grants and softer GST, yet their combined deficit is budgeted at 3.0% of state GDP, with transfers from the Centre rising 12.2%.

The Sixteenth Finance Commission left the states’ slice of central taxes untouched at 41% but reworked the distribution formula, introducing a 10% weight for a state’s contribution to GDP, while paring income-distance to 42.5%, population to 17.5%, and fiscal performance to 10%. It also scrapped post-devolution revenue-deficit grants to stop rewarding weak revenue effort and to nudge states toward collecting more on their own.

The External Sector

The goods trade gap swelled to US$ 333.2 billion, but a 15.3% jump in net services exports and a 10.1% rise in remittances kept the current account deficit at a slim 1.0% of GDP through April–December 2025. Trade alliances shifted notably — China leapfrogged the US as India’s top single trading partner — and India sealed an FTA with the EU and signed deals with the UK (CETA), Oman (CEPA), and New Zealand (FTA). With inflows falling short of the external gap, reserves fell US$ 30.8 billion (excluding valuation), equity FPI flows reversed by US$ 16.5 billion, and gross FDI rose to US$ 94.5 billion (net US$ 7.7 billion). Reserves finished at US$ 691.1 billion in end-March 2026, covering 11 months of imports and 90.3% of external debt.

PART TWO: THE WORKINGS OF THE RESERVE BANK OF INDIA

Chapter III: Monetary Policy

The Monetary Policy Committee lowered the repo rate by a full percentage point to 5.25%, spread across a 0.25-point move in April 2025, a 0.50-point move in June 2025, and a 0.25-point move in December 2025. Its stance turned accommodative in April 2025 before reverting to neutral in June to preserve flexibility against jumpy fuel and commodity costs.

To keep cash flowing, the RBI added durable liquidity through open-market purchases, dollar-rupee swaps, and the one-point CRR cut, releasing roughly ₹2,50 crore into the system. After an internal review it retired its daily 14-day repo and reverse-repo auctions in favour of 7-day and fine-tuning operations, and the Standing Deposit Facility soaked up 84.9% of daily surplus parked with the central bank.

Rate cuts fed through reasonably well: banks shaved 0.60 point off their one-year median MCLR, fresh-loan rates fell 0.95 point and outstanding-loan rates 0.78 point. Loans tied to external benchmarks reached 65.4% of the total by December 2025, and because private banks carried a far larger share (89.2% against public banks’ 50.6%), cuts reached their borrowers faster.

Chapter IV: Credit Delivery and Financial Inclusion

Banks routed 45.0% of adjusted net credit to priority sectors, comfortably above the 40% floor, with Small Finance Banks topping the table at 78.8%. To ease pressure on small firms, the collateral-free lending ceiling for micro and small enterprises was doubled from ₹10 lakh to ₹20 lakh.

The Financial Inclusion Index rose to 67.0 in March 2025 from 64.2 on better usage and quality. The digital-payments drive achieved full digital onboarding in 710 districts (over 80% of the country), and basic savings accounts reached 7,304 lakh, 52% of them held by women. In December 2025 the RBI launched the 2025-30 financial-inclusion strategy, “Panch-Jyoti,” a 47-point plan resting on five pillars: widening access to affordable services for households and small firms; advancing women-led inclusion through gender-sensitive design; tying livelihoods and skills to formal finance; using financial education to instil discipline; and bolstering customer protection and grievance handling.

Chapter V: Financial Markets and Foreign Exchange

The RBI made the Unique Transaction Identifier mandatory for OTC derivative trades, consolidating the rule into a single master direction. It accepted municipal bonds as repo collateral, tied the FX-Retail platform to Bharat Connect, hooked NDS-OM up to global bond networks, and recognised FIMMDA as a self-regulatory organisation. To tame dollar-rupee swings it intervened across onshore and offshore currency-derivative markets and capped dealers’ net open rupee positions at US$ 100 million by April 2026.

On internationalising the rupee, the central bank finalised local-currency arrangements with the UAE, Indonesia, Maldives, and Mauritius, while banks in 35 countries opened Special Rupee Vostro Accounts. Rupee-settled exports touched ₹1,71,916 crore and imports ₹1,59,691 crore. Banks were cleared to lend rupees to counterparties in Nepal, Bhutan, and Sri Lanka, easing reliance on swap lines. Exporters got breathing room too — those serving Bharat Mart in the UAE were given nine months to repatriate earnings, the standard window for regular exports stretched from 9 to 15 months, and the external-borrowing framework was widened with limits keyed to a borrower’s finances.

Chapter VI: Regulation, Supervision and Stability

In a sweeping simplification, the Department of Regulation rolled more than 11,000 scattered circulars into 244 Master Directions spanning 30 categories and 11 types of regulated entities, and floated 64 draft directions for comment. The fintech arm layered programmability onto retail digital-rupee pilots to deliver food subsidies in Gujarat, Puducherry, and Chandigarh; built the Unified Markets Interface using wholesale CBDC to speed settlement, with a pilot to tokenise Certificates of Deposit; scaled up the Unified Lending Interface; and rolled MuleHunter.ai across banks to catch fraudulent mule accounts in near-real time. The RBI also studied the FREE-AI committee’s report on ethical AI, in step with the government’s launch of “Bharat Gen,” a state-backed multilingual, multimodal language model. On the supervisory front, a cyber-range initiative tested banks’ cyber defences, KYC/AML risk reviews covered NBFCs, and a supervisory data-quality index was built for smaller urban cooperative banks.

Chapter VII: Public Debt Management

The RBI raised ₹14.6 lakh crore in gross market borrowing for the Centre during 2025-26, with 2026-27 budgeted at ₹17.2 lakh crore gross and ₹11.7 lakh crore net (3.0% of GDP) — enough net borrowing to fund 69.2% of the central deficit. For states, it ran the securities programme and extended the 50-year interest-free capital-investment loan scheme, lifting the pool by a third to ₹2 lakh crore.

Chapter VIII: Currency Management

Cash in circulation grew 11.4% by value, up sharply from 5.8%, on spending after income-tax cuts, crop-damage compensation, and state cash transfers; the ₹500 note led in both value and count. Old notes were retired through shredding-and-briquetting and high-speed processing systems, printing costs were trimmed via efficiencies at BRBNMPL presses, coin reach was widened with more mobile vans, and the MANI app for visually impaired users was refreshed.

Chapter IX: Payments, Settlements and Technology

UPI volumes surged 30% past 200 billion transactions a year, and the digital-payments index rose 11%, reflecting steady uptake in rural and semi-urban areas. Under Payments Vision 2028 — themed “Shaping India’s Payment Frontier” and running through December 2028 — the RBI plans a full Digital Payments Intelligence Platform to combat cyber fraud, a central switch-on/switch-off tool for payment channels, and stronger consumer safeguards that cap customer liability for electronic fraud and compensate victims of low-value scams.

Chapter X: Communication, International Relations and Research

The central bank struck digital-asset partnerships with Singapore’s MAS and ran joint sessions with the UAE’s central bank to link fast-payment systems and trial cross-border CBDC flows, and it joined BIS Innovation Hub efforts including Project Rialto and the second phase of Project Mandala to smooth cross-border payments. Its statistical backbone, CIMS, was upgraded for micro-data analytics, sharpening forecasting and risk-tracking while lightening banks’ reporting load.

Chapter XI: Governance, Human Resources and Organisation

The RBI unveiled Utkarsh 2029, its 2026-29 strategy centred on earlier risk detection, deeper root-cause analysis, and more consistent supervisory action, and consolidated technical training under the Enterprise Computing and Cybersecurity Training Institute. It also pared back routine reporting for commercial bank boards so they can focus more on strategy and risk.

Chapter XII: The Reserve Bank’s Accounts for 2025-26

The balance sheet grew to 26.4% of GDP as of 31 March 2026, up from 23.7%, propelled by revaluation gains on foreign-currency assets and gold amid exchange-rate moves and rising bullion prices. Gold’s share of net foreign assets accordingly rose to 17.2% from 12.0%, and net income gains enabled a surplus transfer to the Centre to shore up stabilisation reserves.

Key Terms (Simple Explanations)

• GDP (Gross Domestic Product): Total value of all goods and services produced inside a country in a year. The headline measure of an economy’s size.
• CPI (Consumer Price Index): A measure of how prices of a basket of goods and services bought by households change over time. India’s official inflation target is based on CPI.
• WPI (Wholesale Price Index): A measure of how prices change at the wholesale (bulk) level, before goods reach consumers.
• GVA (Gross Value Added): The value an industry adds at each stage of production; GDP at factor cost is built up from GVA across sectors.
• GNDI (Gross National Disposable Income): A country’s total income (including transfers from abroad like remittances) that is available for spending and saving.
• GFCF (Gross Fixed Capital Formation): Investment in long-lived assets like factories, machinery, buildings, and infrastructure. A key sign of how much the economy is investing in its future.
• PFCE (Private Final Consumption Expenditure): Total spending by households on goods and services. It is the biggest component of demand in India.
• Repo Rate: The interest rate at which the RBI lends short-term money to commercial banks. The RBI’s main policy rate.
• CRR (Cash Reserve Ratio): The share of bank deposits that banks must keep as cash with the RBI. Lowering CRR releases more money for banks to lend.
• MPC (Monetary Policy Committee): A six-member committee of the RBI that decides the repo rate and the policy stance. Three members are from the RBI and three are external experts.
• MCLR (Marginal Cost of Funds-based Lending Rate): An internal benchmark used by banks to decide their lending rates, based on their own cost of funds.
• WALR (Weighted Average Lending Rate): The average interest rate that banks actually charge across all their loans, weighted by the size of each loan.
• EBLR (External Benchmark-based Lending Rate): A bank’s lending rate linked to an outside benchmark (usually the repo rate), so that changes in policy rate pass through to customers faster.
• LAF (Liquidity Adjustment Facility): The RBI’s main tool to manage short-term liquidity in the banking system, through repo (lending) and reverse repo (absorbing) operations.
• SDF (Standing Deposit Facility): A facility that lets banks park surplus cash with the RBI without giving collateral, at a rate slightly below the repo rate.
• OMO (Open Market Operations): When the RBI buys or sells government securities in the market to either inject or absorb rupee liquidity.
• VRR / VRRR (Variable Rate Repo / Reverse Repo): Auction-based operations through which the RBI provides or absorbs liquidity at market-determined rates.
• M3 (Broad Money): The widest measure of money supply, including currency with the public, demand deposits, time deposits, and other deposits with the RBI.
• Money Multiplier: The ratio of broad money (M3) to reserve money. It shows how many times the banking system multiplies central bank money.
• ANBC (Adjusted Net Bank Credit): The benchmark amount on which a bank’s Priority Sector Lending obligations are calculated.
• PSL (Priority Sector Lending): A requirement that banks lend a fixed share of their credit to specified priority sectors like agriculture, MSEs, education, housing for the weak, and weaker sections.
• CAD (Current Account Deficit): The gap between what a country pays out to the rest of the world (imports, dividends sent abroad) and what it earns (exports, remittances, services).
• GFD (Gross Fiscal Deficit): The total borrowing requirement of the government in a year, that is, the gap between what it spends and what it earns (excluding borrowings).
• BoP (Balance of Payments): The complete record of all economic transactions between a country and the rest of the world.
• FDI (Foreign Direct Investment): Long-term investment by foreign companies in a country’s businesses, often with management control.
• FPI (Foreign Portfolio Investment): Foreign investment in shares, bonds, and other financial instruments, without management control. More volatile than FDI.
• NEER / REER (Nominal / Real Effective Exchange Rate): NEER is the rupee’s value against a basket of foreign currencies; REER adjusts that for differences in inflation. Falls in these indicate a weaker rupee.
• G-sec (Government Securities): Bonds issued by the Central or State governments to borrow money from the market.
• 10-year yield: The market interest rate on the 10-year G-sec, a key benchmark for long-term borrowing in India.
• CBDC (Central Bank Digital Currency): A digital form of central bank money. India’s CBDC is called the e-rupee, with separate wholesale (CBDC-Wholesale) and retail (CBDC-Retail) versions.
• UPI (Unified Payments Interface): India’s real-time digital payments system that lets users transfer money instantly between bank accounts using a mobile app.
• ULI (Unified Lending Interface): A digital infrastructure built by the RBI to make small-ticket lending faster and friction-free by sharing borrower data with consent.
• SCB (Scheduled Commercial Bank): A bank included in the Second Schedule of the RBI Act, 1934. The main category of formal banks in India.
• SFB (Small Finance Bank): A specialised bank category created by the RBI to extend banking services to small businesses, marginal farmers, and the unbanked.
• NBFC (Non-Banking Financial Company): A financial company that lends and invests but cannot accept demand deposits like a bank.
• FCA (Foreign Currency Assets): The part of India’s reserves held in foreign currencies, mainly in US dollars, euros, yen, and pounds.
• NFA (Net Foreign Assets): A central bank’s total foreign assets minus its foreign liabilities, a key part of its balance sheet.
• HCES (Household Consumption Expenditure Survey): A large-scale national survey of how households spend their money, used to update CPI weights.
• CETA / CEPA / FTA: Different names for trade agreements. FTA is a Free Trade Agreement; CEPA is a Comprehensive Economic Partnership Agreement (broader, includes investment and services); CETA is a Comprehensive Economic and Trade Agreement.
• MoSPI: Ministry of Statistics and Programme Implementation, the central government body that produces India’s official statistics, including the CPI.
• IMF (International Monetary Fund): A 191-member international organisation that monitors the global economy, helps countries with balance of payments problems, and publishes forecasts like the World Economic Outlook.
• FC-XVI: The 16th Finance Commission, a constitutional body that decides how central taxes should be shared between the Centre and the States for a 5-year period.
• Master Directions: Consolidated, single-document regulations issued by the RBI on a specific topic, replacing many earlier scattered circulars.
• SRO (Self-Regulatory Organisation): A non-government organisation recognised by a regulator (like the RBI or SEBI) to set rules and supervise its own industry members.
• LCA (Local Currency Arrangement): A bilateral agreement between two central banks that allows trade between the two countries to be settled in their own currencies, reducing dependence on the US dollar.
• SRVA (Special Rupee Vostro Account): A rupee account opened by a foreign bank in an Indian bank, to settle trade in Indian rupees.
• LLM (Large Language Model): A type of artificial intelligence model trained on large amounts of text. Bharat Gen is India’s own state-backed multilingual, multimodal LLM.
• bps (basis points): A small unit of interest rate measurement. 100 bps = 1 percentage point. So a “100 bps cut” means an interest rate cut of 1 percentage point.

About the News (Q&A)

What is the overall picture from the RBI Annual Report 2025-26?

A fast-growing economy at 7.6 per cent, with sharp food deflation pulling CPI to 2.1 per cent, alongside a depreciating rupee, FPI outflows, falling Sensex, larger trade deficit cushioned by services and remittances, and an RBI that cut both the repo rate and CRR by 100 bps each while running a bigger balance sheet at 26.4 per cent of GDP.

What did the new CPI series change?

The base year moved from 2012 to 2024, with the Food and Beverages weight cut from 45.9 per cent to 36.8 per cent, a new unified Housing-water-electricity-gas-fuels division (17.7 per cent), and Transport and Information and Communication separated as distinct categories.

What are the headline monetary-policy actions?

A cumulative 100 bps repo rate cut to 5.25 per cent (in April, June, and December 2025), a 100 bps CRR cut to 3.0 per cent, and a stance briefly accommodative before returning to neutral.

Background Concepts (Q&A)

What is the “RBI Balance Sheet”, and Why is the 26.4 Per Cent of GDP Figure Significant?

The RBI’s balance sheet captures all its assets and liabilities as the central bank, monetary authority, banker to the government, and manager of foreign exchange reserves. The major assets are foreign currency assets, gold holdings, domestic investments (mainly government securities), and loans and advances to banks and the government. The major liabilities are currency in circulation, deposits from banks (including CRR balances), government deposits, and capital and reserves (including the Contingency Fund and the Currency and Gold Revaluation Account). When the balance sheet expands, it usually reflects larger forex operations, more open market activity, gold accumulation or revaluation gains, and higher currency issuance. The figure of 26.4 per cent of GDP is significant because it shows the balance sheet has grown faster than nominal GDP, signalling active liquidity management, forex intervention, and gold-driven revaluation gains. The Economic Capital Framework, based on the Bimal Jalan Committee (2019), governs how much risk buffer the RBI must hold within this balance sheet, with the Contingent Risk Buffer band of 5.5 to 6.5 per cent of the balance sheet.

What is “Priority Sector Lending (PSL)”, and Why are SFBs Required to Lend a Much Higher Share?

Priority Sector Lending (PSL) is a policy framework under which the RBI mandates that scheduled commercial banks, regional rural banks, small finance banks, and certain other regulated entities must lend a specified share of their Adjusted Net Bank Credit (ANBC) to sectors considered economically essential but credit-deprived. These sectors include agriculture, micro and small enterprises, education, housing for the weaker sections, renewable energy, social infrastructure, and weaker sections more broadly. The general PSL target for domestic commercial banks and foreign banks with 20 or more branches is 40 per cent of ANBC, with sub-targets of 18 per cent for agriculture (within which 10 per cent is for small and marginal farmers), 7.5 per cent for micro enterprises, and 12 per cent for weaker sections. Regional Rural Banks (RRBs) have a higher PSL target of 75 per cent, and Small Finance Banks (SFBs) have a target of 60 per cent of ANBC, reflecting their specialised mandate to serve the unbanked and underserved. Urban Cooperative Banks (UCBs) have a target of 60 per cent, and Foreign Banks with fewer than 20 branches have a target of 40 per cent. SFBs are structurally designed to be community-focused, small-ticket lenders, so a higher PSL target makes sense, and shows in their 78.8 per cent achievement, well above the 60 per cent norm. Banks that fall short must contribute the shortfall to specific funds like the Rural Infrastructure Development Fund (RIDF) with NABARD, the Small Industries Development Fund (SIDBI), or similar arrangements.

Practice MCQs

Q1. With reference to India’s macroeconomic performance in 2025-26 as per the RBI Annual Report, consider the following statements:

1. India’s real GDP grew at 7.6 per cent in 2025-26, up from 7.1 per cent in 2024-25.
2. Headline CPI inflation moderated sharply to 2.1 per cent in 2025-26 from 4.6 per cent in the previous fiscal year.
3. The Current Account Deficit (CAD) was contained at about 1.0 per cent of GDP during April-December 2025.
4. India’s real GDP growth for 2026-27 has been projected at 9.5 per cent in the RBI’s report.

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 RBI has projected India’s GDP growth at 6.9 per cent for 2026-27, not 9.5 per cent.)

Q2. Consider the following statements about monetary policy actions of the RBI in 2025-26:

1. The MPC cut the policy repo rate cumulatively by 100 basis points to 5.25 per cent during the year.
2. The Cash Reserve Ratio (CRR) was cut by 100 bps to 3.0 per cent.
3. The MPC’s policy stance was shifted to accommodative in April 2025 but was returned to neutral in June 2025.
4. The Standing Deposit Facility (SDF) absorbed about 84.9 per cent of total daily Liquidity Adjustment Facility surplus.

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

Q3. With reference to the 16th Finance Commission, consider the following statements:

1. The vertical devolution share to states has been preserved at 41 per cent.
2. The horizontal criteria now include a 10 per cent weight for the States’ contribution to GDP.
3. The Income distance weight has been lowered to 42.5 per cent and population to 17.5 per cent.
4. The 16th Finance Commission has discontinued post-devolution revenue deficit grants.

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

Q4. Consider the following statements about Priority Sector Lending (PSL) in India:

1. The general PSL target for domestic commercial banks is 40 per cent of Adjusted Net Bank Credit (ANBC).
2. Regional Rural Banks (RRBs) have a higher PSL target of 75 per cent of ANBC.
3. Small Finance Banks (SFBs) have a PSL target of 60 per cent of ANBC.
4. Scheduled Commercial Banks in 2025-26 achieved a PSL ratio of 45.0 per cent of ANBC, exceeding the statutory threshold.

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

Answer Key

1. (c), Statements 1, 2, 3 are correct; Statement 4 is wrong because the RBI has projected 6.9 per cent GDP growth for 2026-27, not 9.5 per cent.
2. (e), All four statements are correct.
3. (e), All four statements are correct.
4. (e), All four statements are correct.

Exam Relevance

For Banking exams (RBI Grade B, SBI PO, IBPS PO and Clerk, NABARD Grade A, SIDBI Grade A), this is absolutely essential, especially RBI Grade B, where the Annual Report is a primary reference for the Economic and Social Issues and Finance and Management papers.
For SEBI Grade A and IRDAI Grade A, the report supports macroeconomic and regulatory awareness.

Facts To Remember

1. India Issues Letter of Request to France for Acquisition of 114 Rafale Fighter Jets

The Government of India issued a Letter of Request (LoR) to the Government of France for a government-to-government defence deal worth around Rs.3.25 lakh crore to procure 114 Rafale fighter aircraft for the Indian Air Force (IAF). Under the proposed agreement, nearly 94 Rafale jets are expected to be manufactured in India by Dassault Aviation in partnership with an Indian company. The acquisition is part of India’s Multi-Role Fighter Aircraft (MRFA) programme aimed at addressing the IAF’s declining squadron strength.

2. Assam Launches ‘Mission Senehjori’ to Promote Muga Silk Ecosystem

Union Minister Jyotiraditya Scindia and Assam Chief Minister Himanta Biswa Sarma launched ‘Mission Senehjori’, a cluster-based initiative to transform Assam’s traditional Muga silk industry into a globally competitive luxury textile ecosystem. The three-year programme (2026–2028), with an investment of around Rs.396–411 crore, aims to create a premium, traceable, and export-oriented Muga silk economy under the unified brand identity ‘Senehjori’.

3. MoE Launches Prime Minister Research Chair (PMRC) Scheme 2026

The Ministry of Education (MoE) launched the Prime Minister Research Chair (PMRC) Scheme 2026 to attract accomplished Indian-origin researchers, scientists, and technologists from across the world into India’s research ecosystem. The scheme focuses on 13 priority sectors including Artificial Intelligence (AI), semiconductors, quantum computing, biotechnology, healthcare, cybersecurity, climate change, defence, and advanced manufacturing.

4. Chandigarh University Establishes India’s First Private ‘IndiaAI Data Lab’

Chandigarh University became India’s first private university to establish an ‘IndiaAI Data Lab’ in partnership with Intel India. The initiative aims to strengthen students’ industry-oriented skills in Artificial Intelligence (AI), Data Science, and emerging technologies through practical training, research projects, hackathons, and Intel certification programmes.

5. BHASHINI Launches ‘VYOMA Innovation Challenge’ for Multilingual AI Solutions

The Digital India BHASHINI Division under the Ministry of Electronics and Information Technology (MeitY) launched the ‘VYOMA Innovation Challenge’ to promote development of multilingual, voice-first, and open-source Artificial Intelligence (AI) solutions. The initiative encourages AI applications in sectors such as education, healthcare, agriculture, governance, and public services, especially for offline and low-connectivity environments. Winning teams may receive prizes of up to Rs.80 lakh and opportunities for government deployment.

6. India Issues Letter of Request to France for 114 Rafale Fighter Jets

The Government of India issued a Letter of Request (LoR) to France for the acquisition of 114 Rafale fighter aircraft for the Indian Air Force (IAF) under a proposed government-to-government defence deal worth around Rs.3.25 lakh crore. The deal forms part of India’s Multi-Role Fighter Aircraft (MRFA) programme aimed at addressing the IAF’s declining squadron strength. Around 94 Rafale jets are proposed to be manufactured in India by Dassault Aviation in partnership with an Indian company, while the first Rafale-M jets are expected to arrive by 2028.

7. Ministry of Education Launches Prime Minister Research Chair (PMRC) Scheme 2026

The Ministry of Education launched the Prime Minister Research Chair (PMRC) Scheme 2026 to attract distinguished Indian-origin researchers, scientists, and technologists from across the world into India’s research ecosystem. The scheme focuses on priority sectors such as Artificial Intelligence, semiconductors, cybersecurity, biotechnology, climate change, quantum computing, healthcare, and defence technologies. Seven premier institutions have been designated as Lead Institutions for implementation of the programme.

8. Chandigarh University Establishes India’s First Private ‘IndiaAI Data Lab’

Chandigarh University became India’s first private university to establish an ‘IndiaAI Data Lab’ in collaboration with Intel India. The initiative aims to provide students with hands-on experience in Artificial Intelligence, Data Science, and emerging technologies through real-world projects, research, hackathons, and industry-linked programmes. The lab will support AI innovation, faculty development, and industry-academia collaboration to improve employability and technical skills.

9. BHASHINI Launches ‘VYOMA Innovation Challenge’ for Multilingual AI Solutions

The Digital India BHASHINI Division under the Ministry of Electronics and Information Technology launched the ‘VYOMA Innovation Challenge’ to promote development of multilingual, voice-first, open-source Artificial Intelligence solutions for low-connectivity environments. The challenge is built around the ‘Sunno Sutra’ handheld AI device and focuses on AI applications in education, healthcare, agriculture, governance, and public services. Winning teams can receive prizes of up to Rs.80 lakh and opportunities for deployment with government departments.

Context:

The earlier coverage focused on India’s ranking in the SIDE 2026 report. This time, we look more closely at what the CHIPS framework actually measures, why India scores high on AI, and what policy ecosystem is driving these results. India’s 8th to 5th rank jump in one year, and 4th rank on the CHIPS AI Index, reflects a combination of large user base, strong talent pipeline, and a deep stack of Digital Public Infrastructure (DPI) that few countries can match at India’s scale.

Key Facts

Indicator	Detail
India’s digital economy rank (SIDE 2026)	5th out of 71 countries
India’s previous rank (SIDE 2025)	8th out of 32 countries
India’s CHIPS AI Index rank	4th globally
Countries ahead on CHIPS AI Index	United States, China, Singapore
India’s internet user growth	8.8 per cent (vs 2.1 per cent average for other top-10 countries)
Share of global AI users	About 19.9 per cent
AI talent concentration	2nd largest in the world
Publisher of report	ICRIER-Prosus Centre for Internet and Digital Economy (IPCIDE)

About the CHIPS Framework (Closer Look):

• C, Connect: Measures internet access, broadband penetration, mobile coverage, affordability, and inclusion. India scores well because of large mobile base, low data tariffs, and rural broadband expansion (BharatNet, 5G rollout).
• H, Harness: Measures adoption and use of digital tools across business, government, and households. India scores well due to UPI, Aadhaar-based services, DigiLocker, ABDM (health), and FASTag.
• I, Innovate: Measures digital research, R&D, start-up ecosystem, and patents. India’s 3rd-largest start-up ecosystem and AI start-up growth are key drivers.
• P, Protect: Measures data protection, cyber-security, and consumer rights. India’s recent Digital Personal Data Protection (DPDP) Act, 2023 and CERT-In, NCIIPC activities are key.
• S, Sustain: Measures environmental and social sustainability of the digital economy. India’s green data centres, e-waste regulations, and inclusive design matter here.

About India’s AI Story:

• India has the world’s 2nd-largest pool of AI talent, supported by IITs, IIITs, NITs, ISIs, AIIMS data-science programmes, and hundreds of engineering colleges.
• India accounts for nearly 20 per cent of global AI users, driven by mass usage of AI assistants, chatbots, recommendation engines, generative AI, and AI on smartphones.
• The IndiaAI Mission has five pillars: IndiaAI Compute, Foundation Models, Datasets, Applications, and Skilling.
• India has launched Bharat Gen, a state-funded multilingual, multimodal Large Language Model (LLM).
• The National AI Portal (indiaai.gov.in) is a public-facing hub.
• The FREE-AI Committee at the RBI has reviewed ethical AI use in finance.

Why India’s Rank Jumped from 8th to 5th?

• The 8th rank was out of 32 countries; the 5th rank is out of 71 countries, a much larger and more diverse sample.
• India’s internet user base has been growing 4 times faster than other top-10 countries.
• The AI user base in India is exploding with smartphone-based generative AI tools.
• Government policy push through Digital India, IndiaAI Mission, ONDC, and DPI exports has strengthened all five CHIPS pillars simultaneously.
• The JAM Trinity (Jan Dhan, Aadhaar, Mobile) has built financial inclusion at scale.

Key Terms:

• Digital Public Infrastructure (DPI): A set of digital platforms and protocols (often built or backed by the state) that anyone, public or private, can use to build services on top, like Aadhaar, UPI, DigiLocker, and ABDM.
• JAM Trinity: Jan Dhan (bank account), Aadhaar (digital ID), and Mobile (phone), the three foundational pillars of India’s financial inclusion push.
• Artificial Intelligence (AI): Computer systems designed to perform tasks usually needing human intelligence, like understanding language, recognising images, and making decisions.
• Large Language Model (LLM): A type of AI trained on massive amounts of text that can understand and generate language, like ChatGPT-style systems. Bharat Gen is India’s homegrown LLM.
• IndiaAI Mission: India’s national mission to develop AI infrastructure, foundation models, datasets, applications, and skills.
• ONDC (Open Network for Digital Commerce): An open protocol for digital commerce in India, designed to avoid monopolies and enable interoperability between buyers, sellers, and platforms.
• Account Aggregator (AA): A consent-based data sharing system in India, regulated by the RBI, that allows individuals and businesses to share their financial data with financial institutions.

Practice MCQs

Q1. With reference to India’s performance in the SIDE 2026 report, consider the following statements:

1. India has been ranked the 5th most digitalised economy out of 71 countries in 2026.
2. India was ranked 8th out of 32 countries in the SIDE 2025 report.
3. India’s internet users grew at 8.8 per cent, against an average of 2.1 per cent in the other top-10 countries.
4. India ranks first globally in the CHIPS AI Index.

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 ranked 4th on the CHIPS AI Index, behind the United States, China, and Singapore.)

Q2. With reference to the CHIPS framework, consider the following statements:

1. The “C” pillar (Connect) measures internet access, broadband penetration, mobile coverage, affordability, and inclusion.
2. The “H” pillar (Harness) measures the adoption and use of digital tools by business, government, and households.
3. The “P” pillar (Protect) measures data protection, cybersecurity, and consumer rights.
4. The “S” pillar (Sustain) measures the environmental and social sustainability of the digital economy.

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 India’s AI story, consider the following statements:

1. India accounts for about 19.9 per cent of global AI users.
2. India has the second-largest concentration of AI talent in the world.
3. Bharat Gen is India’s state-funded multilingual, multimodal Large Language Model (LLM).
4. The IndiaAI Mission has five pillars: IndiaAI Compute, Foundation Models, Datasets, Applications, and Skilling.

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 India’s Digital Public Infrastructure (DPI) stack, consider the following statements:

1. Aadhaar, UPI, DigiLocker, Account Aggregator, and ABDM are key components of India’s DPI stack.
2. India’s DPI stack is widely seen as a global model and is being exported through G20 leadership and bilateral partnerships.
3. The JAM Trinity stands for Jan Dhan, Aadhaar, and Mobile, the three foundational pillars of India’s financial inclusion push.
4. India’s DPI 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; India’s DPI stack is largely built or backed by the state, with active public-private collaboration, not purely by private fintech firms.)

Answer Key

1. (a), Statements 1, 2, 3 are correct; Statement 4 is wrong because India is 4th on the CHIPS AI Index, not 1st.
2. (d), All four statements are correct.
3. (d), All four statements are correct.
4. (a), Statements 1, 2, 3 are correct; Statement 4 is wrong because India’s DPI is largely state-built or state-backed, not purely private.

Banking/Finance

1. RBI Eases Foreign Borrowing Rules for PSUs, FCNR(B) Deposits and FII Investment Limits

Source: The Indian Express

Context

The Reserve Bank of India (RBI) has unveiled a package of measures to boost foreign capital inflows and stabilise the rupee, by easing norms for foreign borrowings by state-owned enterprises, incentivising banks to mobilise FCNR(B) deposits, and liberalising FII and NRI/OCI investment limits. The move complements the government’s decision to scrap capital gains tax and withholding tax on FII investment in government bonds. RBI Governor Sanjay Malhotra said these steps are expected to strengthen the balance of payments and attract foreign capital inflows during a period of rupee pressure and FPI outflows (about USD 13.4 billion equity and USD 0.3 billion debt outflows during 1 April to 2 June 2026).

Key Facts

• Step 1: Cheaper dollar loans for PSUs. PSU companies borrowing in dollars get a subsidised hedging cost from the RBI till 30 September 2026, making dollar loans cheaper.
• Step 2: Cheaper NRI deposits for banks. Banks raising 3- to 5-year FCNR(B) deposits (deposits in foreign currency held by NRIs and OCIs) get full hedging cost support till September 2026, so they can offer better rates to NRIs.
• Step 3: More bond access for foreigners. Under the Fully Accessible Route (FAR), foreigners can now buy new 15-, 30-, and 40-year government bonds freely. Short-term, concentration, and single-security limits have also been removed.
• Step 4: Easier equity investment for NRIs and foreigners. NRIs, OCIs, and all Persons Resident Outside India (PROIs) can now buy listed Indian shares with higher limits and without SEBI registration.
• Step 5: Faster export earnings repatriation. Exporters now have to bring back their export earnings within 9 months, restored from the 15 months allowed in November 2025.

About the Concessional FX Swap Facility for PSU ECBs:

• A swap facility allows PSUs to convert rupee liabilities into foreign currency exposure, or vice versa, at more favourable terms than market-based hedging.
• The RBI is lowering the hedging and funding cost of foreign currency borrowing by PSUs, nudging them to tap cheaper overseas capital.

About the FCNR(B) Swap Facility for AD Banks:

• The RBI will provide full hedging cost on fresh 3- to 5-year FCNR(B) deposits raised by Authorised Dealer (AD) banks until September 2026.
• An FCNR(B) account is a fixed deposit in India held by NRIs and OCIs in foreign currencies like USD, GBP, EUR, or CAD, avoiding currency fluctuation risks for the depositor.
• With hedging costs subsidised, banks can offer more competitive interest rates without eating into their margins.
• This is expected to strengthen foreign currency inflows into the banking system, support FX liquidity, and stabilise the external account.

What is Fully Accessible Route (FAR)?

• The Fully Accessible Route (FAR) allows FIIs to buy and sell designated G-secs without any quantitative ceiling.
• The FAR has been expanded to include all new issuances of 15-year, 30-year, and 40-year G-secs.
• General Route restrictions removed: short-term investment caps, concentration limits, and individual security limits.
• These steps complement the government’s decision to scrap capital gains tax and withholding tax on FII investment in government bonds.

What is Liberalisation for NRIs, OCIs, and PROIs?

• NRIs (Non-Resident Indians), OCIs (Overseas Citizens of India), and now all Persons Resident Outside India (PROIs) get higher investment limits in listed equity instruments.
• They can invest without separate registration with SEBI.

About Export Realisation Time Limit:

• The RBI has proposed to restore the time limit for realisation of export proceeds to 9 months, providing breathing room for exporters facing global trade headwinds.

Key Terms:

• External Commercial Borrowings (ECBs): Loans taken by Indian companies (including PSUs) from foreign lenders in foreign currency (mostly USD), subject to RBI rules on end-use, maturity, and cost.
• FCNR(B) Account: Foreign Currency Non-Resident (Bank) account, a fixed deposit held by NRIs/OCIs in India in foreign currencies, so the depositor faces no rupee depreciation risk.
• Authorised Dealer (AD) Banks: Banks licensed by the RBI under FEMA to deal in foreign exchange.
• Hedging Cost: The cost of protecting against exchange rate movements through instruments like forwards and swaps.
• Forex Swap: A contract to exchange a sum in one currency for another now, and reverse the transaction later at a pre-agreed rate.
• Fully Accessible Route (FAR): A regime under which foreign investors can freely buy and sell specified Government of India securities without any quantitative limit.
• General Route for FII Investment: An alternative regime with specified caps and concentration limits for FII debt investments.
• NRI (Non-Resident Indian): An Indian citizen who lives outside India for tax or stay purposes.
• OCI (Overseas Citizen of India): A foreign citizen of Indian origin granted lifelong visa and certain rights in India (excluding voting).
• PROI (Person Resident Outside India): Any person resident outside India under FEMA, including NRIs, OCIs, and foreign nationals.
• Capital Gains Tax (in this context): Tax on profits earned from selling investments like bonds and securities.
• Withholding Tax: A tax deducted at source when income (like interest or dividend) is paid to a foreign investor, before the money leaves the country.

Practice MCQs

Q1. With reference to the RBI’s recent measures to boost foreign capital inflows, consider the following statements:

1. The RBI has announced a concessional foreign exchange swap facility for ECBs by PSUs until 30 September 2026.
2. AD banks will get a similar facility covering the full hedging cost for fresh 3- to 5-year FCNR(B) deposits until September 2026.
3. The RBI has also expanded the Fully Accessible Route (FAR) for FIIs by including new 15-, 30-, and 40-year G-sec issuances.
4. These measures complement the government’s decision to scrap capital gains tax and withholding tax on FII investment in government bonds.

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 FCNR(B) accounts:

1. FCNR(B) is the Foreign Currency Non-Resident (Bank) account scheme.
2. It is a fixed deposit held by NRIs and OCIs in foreign currencies like USD, GBP, EUR, or CAD.
3. It protects the depositor from rupee depreciation risk.
4. FCNR(B) deposits can only be held in Indian rupees.

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 held in foreign currencies, NOT Indian rupees.)

Q3. With reference to the Fully Accessible Route (FAR), consider the following statements:

1. Under FAR, FIIs can buy and sell designated Government of India securities without any quantitative ceiling.
2. The RBI has expanded FAR to include all new issuances of 15-, 30-, and 40-year G-sec bonds.
3. The General Route restrictions on short-term investments, concentration limits, and individual security limits for FII investments have been removed.
4. The FAR is governed by the Ministry of External Affairs and not the Reserve Bank 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; FAR is governed by the Reserve Bank of India, not the Ministry of External Affairs.)

Q4. Consider the following statements about NRIs, OCIs, and Persons Resident Outside India (PROIs):

1. NRIs are Indian citizens who reside outside India for tax or stay purposes.
2. OCIs are foreign citizens of Indian origin granted lifelong visa and certain rights in India, excluding voting.
3. PROIs include NRIs, OCIs, and foreign nationals as defined under FEMA.
4. The RBI has restricted PROIs from investing in Indian listed equity instruments under any route.

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 RBI has liberalised investment limits for NRIs, OCIs, and PROIs in listed equity instruments, without requiring SEBI registration.)

Answer Key

1. (d), All four statements are correct.
2. (a), Statements 1, 2, 3 are correct; Statement 4 is wrong because FCNR(B) deposits are held in foreign currencies, not rupees.
3. (a), Statements 1, 2, 3 are correct; Statement 4 is wrong because the FAR is governed by the RBI, not the Ministry of External Affairs.
4. (a), Statements 1, 2, 3 are correct; Statement 4 is wrong because the RBI has actually liberalised, not restricted, PROI investment in listed equity instruments.

2. ADB and Standard Chartered Sign Agreements to Strengthen Supply Chain Finance in India

Source: BL

Context:

The Asian Development Bank (ADB) and Standard Chartered Bank have signed agreements in June 2026 to strengthen supply chain finance in India, through risk-sharing arrangements covering both US Dollar (USD) and Indian Rupee (INR) transactions. The agreements were signed in Mumbai by Bhargav Dasgupta, Vice-President of ADB, and P.D. Singh, CEO of Standard Chartered Bank India and South Asia. The partnership aims to address financing gaps, strengthen risk-sharing mechanisms, and expand access to trade and supply chain finance for Indian businesses.

Key Facts

Indicator	Detail
Partners	Asian Development Bank (ADB) and Standard Chartered Bank
Month and venue of signing	June 2026, Mumbai (Maharashtra)
Signed by (ADB)	Bhargav Dasgupta, Vice-President, ADB
Signed by (Standard Chartered)	P.D. Singh, CEO, Standard Chartered Bank India and South Asia
Objective	Address financing gaps and strengthen risk-sharing in supply chain finance in India
USD-denominated transactions arrangement	Risk Participation Arrangement (RPA) through GIFT City, Gujarat
INR onshore transactions arrangement	Partial Guarantee Facility (PGF) agreement
Coverage	Both domestic and cross-border trade

About the Agreement and the Partners:

• The deal has two parts: a Risk Participation Arrangement (RPA) for USD-denominated transactions through GIFT City, Gujarat, and a Partial Guarantee Facility (PGF) for onshore INR transactions.
• The arrangements aim to expand access to trade finance and supply chain finance for Indian businesses, especially those in export and import value chains.
• They also support continued flow of both domestic and cross-border trade, particularly during periods of global supply-chain stress.

About Asian Development Bank (ADB):

• Regional development bank for the Asia-Pacific region.
• Established in 1966, headquartered in Manila, Philippines.
• Has 68 members, including 49 from within Asia-Pacific and 19 from outside the region.
• India is a founding member of ADB.
• Provides loans, technical assistance, grants, and equity investments for development projects.
• Largest shareholders include Japan, the United States, China, India, and Australia.

About Standard Chartered Bank:

• A British multinational banking and financial services company, headquartered in London, United Kingdom.
• Formed in 1969 through the merger of The Standard Bank of British South Africa and The Chartered Bank of India, Australia and China.
• Has a strong presence in Asia, Africa, and the Middle East.
• Operates in India for over 165 years, with a significant trade and corporate banking franchise.

About GIFT City:

• Gujarat International Finance Tec-City, located in Gandhinagar, Gujarat.
• India’s first International Financial Services Centre (IFSC).
• Regulated by the International Financial Services Centres Authority (IFSCA), set up in 2020 under the IFSCA Act, 2019.
• Allows foreign-currency-denominated transactions in a special regulatory regime, similar to global financial centres like Singapore, Dubai, and Hong Kong.

Practice MCQs

Q1. With reference to the recent agreements between ADB and Standard Chartered Bank, consider the following statements:

1. The agreements were signed in Mumbai in June 2026.
2. The partnership covers both USD and INR transactions.
3. The Risk Participation Arrangement is routed through GIFT City, Gujarat.
4. The Partial Guarantee Facility supports onshore INR transactions.

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 the Asian Development Bank (ADB):

1. ADB was established in 1966 and is headquartered in Manila, the Philippines.
2. ADB has 68 members, including 49 from within the Asia-Pacific region.
3. India is a founding member of ADB.
4. ADB’s largest shareholder is the United Kingdom.

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; ADB’s largest shareholders include Japan and the United States, NOT the United Kingdom.)

Q3. With reference to Standard Chartered Bank, consider the following statements:

1. Standard Chartered is a British multinational bank headquartered in London.
2. It was formed in 1969 through the merger of the Standard Bank of British South Africa and the Chartered Bank of India, Australia and China.
3. It has a strong presence in Asia, Africa, and the Middle East.
4. Standard Chartered is a fully Indian public-sector bank under the Department of Financial Services.

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; Standard Chartered is a British multinational private bank, NOT an Indian public-sector bank.)

Q4. Consider the following statements about GIFT City:

1. GIFT City stands for Gujarat International Finance Tec-City, located in Gandhinagar, Gujarat.
2. It is India’s first International Financial Services Centre (IFSC).
3. GIFT City is regulated by the International Financial Services Centres Authority (IFSCA), set up under the IFSCA Act, 2019.
4. GIFT City does not allow any foreign-currency-denominated transactions.

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; GIFT City allows foreign-currency-denominated transactions under a special regulatory regime.)

Answer Key

1. (d), All four statements are correct.
2. (a), Statements 1, 2, 3 are correct; Statement 4 is wrong because ADB’s largest shareholders include Japan and the United States, not the United Kingdom.
3. (a), Statements 1, 2, 3 are correct; Statement 4 is wrong because Standard Chartered is a British multinational private bank, not an Indian public-sector bank.
4. (a), Statements 1, 2, 3 are correct; Statement 4 is wrong because GIFT City explicitly allows foreign-currency-denominated transactions.

Exam Relevance

Exam	Relevance
UPSC Prelims	GS Paper II on International Organisations (ADB); GS Paper III on Indian Economy (Trade Finance, IFSC, GIFT City)
UPSC Mains	GS Paper II on Bilateral and multilateral institutions; GS Paper III on External sector, Banking, Trade
BPSC and State PCS	Economy, Banking, Current Affairs
Banking (RBI Gr B, SBI PO, IBPS, NABARD)	Very high importance, trade finance, supply chain finance, GIFT City, ADB
SEBI Grade A and IRDAI Grade A	Financial regulation, IFSCA, cross-border finance
SSC, Insurance, Railway	Static and Current GK on ADB, Standard Chartered, GIFT City

3. India Launches UPI Payments in Cambodia Through NPCI-ACLEDA Bank Partnership

Source: News on Air

Context

The National Payments Corporation of India (NPCI) has partnered with ACLEDA Bank to launch Unified Payments Interface (UPI) acceptance in Cambodia. With this, Cambodia becomes the latest country to accept UPI-based payments, strengthening India’s cross-border digital payments footprint in Southeast Asia. UPI is now live in over nine countries including the UAE, Singapore, Bhutan, Cambodia, Nepal, Sri Lanka, France, Mauritius, and Qatar.

About Cambodia:

• A culturally rich, largely rural country in mainland Southeast Asia.
• Civilization shaped over 2,000 years by Indian and Chinese cultural, religious, and architectural influences.
• Reached its classical peak under the Angkor Empire (9th to 15th century CE), famous for Angkor Wat.
• Capital: Phnom Penh.
• Currency: Cambodian Riel; the US dollar is also widely used.
• Population is largely rural, with a significant share employed in agriculture.

About UPI’s International Expansion:

• Unified Payments Interface (UPI) is India’s flagship real-time digital payment system, run by the National Payments Corporation of India (NPCI).
• It allows instant bank-to-bank money transfer through a mobile app.
• UPI is currently live in more than nine countries: UAE, Singapore, Bhutan, Cambodia, Nepal, Sri Lanka, France, Mauritius, and Qatar.

Practice MCQs

Q1. With reference to the launch of UPI payments in Cambodia, consider the following statements:

1. The launch is the result of a partnership between the National Payments Corporation of India (NPCI) and ACLEDA Bank.
2. With this launch, Cambodia becomes one of more than nine countries where UPI is live.
3. UPI is operated in India by the National Payments Corporation of India (NPCI).
4. UPI’s international expansion is driven by NPCI International Payments Limited (NIPL).

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 location and borders of Cambodia, consider the following statements:

1. Cambodia is bordered by Thailand to the west and northwest.
2. Cambodia is bordered by Laos to the northeast.
3. Cambodia is bordered by Vietnam to the east and southeast.
4. Cambodia’s southwestern coastline meets the Gulf of Thailand.

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 Cambodia’s geography, consider the following statements:

1. The Mekong River flows about 510 km through Cambodia and serves as a major transport and economic lifeline.
2. The Tonle Sap Lake is connected to the Mekong by the Tonle Sap River and expands during the monsoon.
3. The Dangrek Mountains lie in the north, while the Cardamom and Elephant Mountains lie in the southwest of Cambodia.
4. Mount Aôral, the highest peak in Cambodia, is located in the Himalayan range.

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; Mount Aôral is located in the Cardamom and Elephant Mountains of Cambodia, not in the Himalayan range.)

Q4. Consider the following statements about UPI’s international footprint:

1. UPI is now live in countries including the UAE, Singapore, Bhutan, Cambodia, Nepal, Sri Lanka, France, Mauritius, and Qatar.
2. NPCI International Payments Limited (NIPL) is the wholly owned subsidiary of NPCI responsible for UPI’s international expansion.
3. UPI’s international expansion has been driven exclusively by partnerships with central banks of European countries.
4. UPI is one of the building blocks of India’s Digital Public Infrastructure (DPI).

Which of the above are correct?

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

(Statement 3 is wrong; UPI’s international expansion has involved a mix of partnerships across Asia, Europe, the Middle East, and Africa, not just European central banks.)

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 Mount Aôral is in the Cardamom and Elephant Mountains of Cambodia, not the Himalayas.
4. (a), Statements 1, 2, 4 are correct; Statement 3 is wrong because UPI’s expansion has involved partnerships across many regions, not just European central banks.

Agriculture

1. APCNF Wins the 2026 Food Planet Prize for Transforming Food Systems Through Natural Farming

Source: Down To Earth

Context

India’s Andhra Pradesh Community Managed Natural Farming (APCNF) programme has won the prestigious 2026 Food Planet Prize, awarded in Båstad, Sweden. The Food Planet Prize is the world’s largest environmental award dedicated to transforming global food systems, established by Sweden’s Curt Bergfors Foundation. APCNF, launched in 2016, won over 1,000 international nominations from six continents, and now scales across 1.8 million farming families and 3,40,000 women’s Self Help Groups (SHGs) in Andhra Pradesh.

Key Facts

Indicator	Detail
Award	Food Planet Prize 2026
Award venue	Båstad, Sweden
Awarding body	Curt Bergfors Foundation, Sweden
Winner	Andhra Pradesh Community Managed Natural Farming (APCNF) programme, India
Implementing agency for APCNF	Rythu Sadhikara Samstha (RySS), under Andhra Pradesh’s agriculture department
APCNF launch year	2016
Grand prize amount	USD 1.5 million
Prize for specialised international finalists	USD 150,000 each

About the Food Planet Prize:

• It is the world’s largest environmental award focused entirely on transforming global food systems.
• Established by Sweden’s Curt Bergfors Foundation.
• Funds early-stage, high-potential projects capable of radically reshaping sustainable food value chains, rather than honouring past legacy achievements.
• The foundation also sends independent investigative journalists and photographers for unannounced on-ground verification.

About Andhra Pradesh Community Managed Natural Farming (APCNF):

• Launched by the Government of Andhra Pradesh in 2016.
• Implemented by Rythu Sadhikara Samstha (RySS), a non-profit company set up by the state’s agriculture department.
• Aims to shift Andhra Pradesh’s farmers from chemical-input-based agriculture to natural farming, based on principles like Jeevamrutham, Beejamrutham, and Acchadana (mulching).
• Key features: no chemical fertilisers or pesticides, use of cow-based bio-inputs, diverse cropping patterns, continuous soil cover, and community-led mobilisation through women’s SHGs.
• Acts as a community-based, women-led model rather than a top-down government scheme.
• Now covers 1.8 million farming families across the state.
• Aims to eventually take all six million farming households of Andhra Pradesh to natural farming.
• Linked to broader frameworks such as National Mission on Natural Farming (NMNF) and Paramparagat Krishi Vikas Yojana (PKVY).

About Natural Farming:

• A chemical-free farming approach that relies on local resources, cow-based inputs, and traditional knowledge.
• Different from organic farming in that it uses even fewer external inputs and is rooted in local, community-led practice.
• Promoted globally as a climate-smart, biodiversity-friendly, low-cost approach to agriculture.

Practice MCQs

Q1. With reference to the 2026 Food Planet Prize, consider the following statements:

1. The Food Planet Prize is the world’s largest environmental award focused on transforming global food systems.
2. It is awarded by the Curt Bergfors Foundation of Sweden.
3. The 2026 award has been won by India’s Andhra Pradesh Community Managed Natural Farming (APCNF) programme.
4. The grand prize amount is USD 1.5 million.

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 Andhra Pradesh Community Managed Natural Farming (APCNF) programme, consider the following statements:

1. APCNF was launched by the Government of Andhra Pradesh in 2016.
2. It is implemented by Rythu Sadhikara Samstha (RySS) under the state’s agriculture department.
3. The programme covers about 1.8 million farming families and around 3,40,000 women’s SHGs.
4. APCNF promotes the heavy use of chemical fertilisers and pesticides to maximise yields.

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; APCNF is a chemical-free natural farming approach, NOT one that promotes heavy use of chemicals.)

Q3. With reference to the architecture of the Food Planet Prize, consider the following statements:

1. The jury follows a 50-50 split between scientific researchers and grassroots field practitioners.
2. Nominations are mapped onto a 400-spot Master Grid covering geographies, formats, and food-cycle impact points.
3. Shortlisted candidates undergo anonymous scientific review by top academics and industry experts.
4. The prize is awarded only to projects with at least 50 years of historical legacy.

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 prize specifically funds early-stage, high-potential projects, NOT only legacy projects.)

Q4. Consider the following statements about natural farming and related policies in India:

1. Natural farming relies on local resources, cow-based inputs, and traditional knowledge, without chemical fertilisers or pesticides.
2. The Paramparagat Krishi Vikas Yojana (PKVY) is a Government of India scheme promoting organic and natural farming.
3. The National Mission on Natural Farming (NMNF) is a national-level scheme to encourage chemical-free farming.
4. Natural farming is identical to industrial high-input agriculture using genetically modified seeds.

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; natural farming is the opposite of industrial high-input agriculture, and does not depend on GM seeds.)

Answer Key

1. (d), All four statements are correct.
2. (a), Statements 1, 2, 3 are correct; Statement 4 is wrong because APCNF is a chemical-free natural farming model.
3. (a), Statements 1, 2, 3 are correct; Statement 4 is wrong because the prize specifically funds early-stage, high-potential projects, not legacy ones.
4. (a), Statements 1, 2, 3 are correct; Statement 4 is wrong because natural farming is the opposite of industrial high-input agriculture.

Exam Relevance

NABARD Grade A

Very high importance, sustainable agriculture, SHGs, rural development

Facts To Remember

1. Cabinet Approves Rs. 9,585 Crore Vehicle Replacement Scheme for Delhi-NCR

The Union Cabinet approved a two-year Rs. 9,585 crore scheme to replace 2.07 lakh BS-IV and older trucks and buses in Delhi-NCR with BS-VI-compliant or electric vehicles. The initiative aims to reduce vehicular pollution, improve air quality, and modernize commercial transport fleets across Delhi, Haryana, Rajasthan, and Uttar Pradesh. Benefits include interest subvention, fuel vouchers, tax concessions, registration fee waivers, and manufacturer discounts on eligible vehicles.

2. Cabinet Approves Rs. 10,000 Crore ATF Price Stabilisation Fund

The Union Cabinet approved a Rs. 10,000 crore Aviation Turbine Fuel (ATF) Price Stabilisation Fund to support Indian airlines affected by rising global fuel prices. The scheme will provide interest-free advances to Oil Marketing Companies (OMCs) and ensure stable ATF pricing for airline operators. A recovery mechanism will return excess support funds to the Consolidated Fund of India when fuel prices decline.

3. Jayant Chaudhary Launches ‘Navachar Mantra’ for Grassroots Innovators

Union Minister Jayant Chaudhary launched ‘Navachar Mantra’, a national initiative aimed at identifying, mentoring, and scaling grassroots innovations and startups. Implemented by NIESBUD with IIT Delhi’s FITT as knowledge partner, the programme offers mentorship, investor interactions, innovation showcases, and year-long support for selected innovators.

4. Centre Expands QR Tagging of FCI Foodgrain Bags

The Government of India expanded QR code tagging of Food Corporation of India (FCI) foodgrain bags to Andhra Pradesh, Telangana, and Odisha. The initiative enables end-to-end tracking of foodgrain movement, enhances transparency, prevents bag recycling, and streamlines subsidy distribution through electronic Point-of-Sale (ePoS) systems.

5. T-Hub Launches Third ORBIT Space-Tech Accelerator Cohort

Hyderabad-based T-Hub launched the third cohort of its ORBIT Space-Tech Accelerator Programme and onboarded 13 startups working in propulsion systems, satellite intelligence, orbital services, geospatial technologies, and space energy systems. The accelerator is supported by Atal Innovation Mission and aims to strengthen India’s growing space-tech ecosystem.

6. UNGA Elects Five New Non-Permanent Members to UNSC

The United Nations General Assembly elected Austria, Kyrgyzstan, Portugal, Trinidad and Tobago, and Zimbabwe as non-permanent members of the United Nations Security Council (UNSC) for the 2027–2028 term. Kyrgyzstan secured its first-ever membership of the Security Council since joining the United Nations in 1992.

7. mOECD Raises India’s FY27 GDP Growth Forecast to 6.3%

The Organisation for Economic Co-operation and Development (OECD) raised India’s FY27 GDP growth forecast by 20 basis points to 6.3% in its latest Economic Outlook report. The report projects GDP growth of 7.6% in FY26 and 6.4% in FY28 while forecasting inflation at 4.8% in FY27.

8. Lionel Messi Wins Princess of Asturias Award for Sports 2026

Argentine football legend Lionel Messi became the first footballer to receive the prestigious Princess of Asturias Award for Sports. He was recognized for his sporting achievements, global influence, and humanitarian contributions supporting education and healthcare initiatives.

9. D.K. Shivakumar Sworn In as Karnataka’s 25th Chief Minister

D. K. Shivakumar was sworn in as the 25th Chief Minister of Karnataka after succeeding Siddaramaiah. The oath of office was administered by Governor Thawar Chand Gehlot at Raj Bhavan, Bengaluru.

10. Mette Frederiksen Secures Third Consecutive Term as Denmark PM

Mette Frederiksen secured a third consecutive term as Prime Minister of Denmark after forming a new centre-left coalition government following the 2026 parliamentary elections.

11. Visa Appoints Shah Rukh Khan as Brand Ambassador

Shah Rukh Khan was appointed brand ambassador for Visa’s new ‘Infinitely More’ campaign in India. The campaign focuses on experience-led lifestyles, digital payments, travel, wellness, dining, and entertainment benefits.

12. GQG Partners Sells Stake in GMR Airports

American investment firm GQG Partners sold a 1.85% stake in GMR Airports Limited for Rs. 1,906 crore through open market transactions. The stake was acquired by Fidelity International through its investment funds.

13. India Launches First Flex-Fuel Passenger Vehicle

Union Minister Hardeep Singh Puri launched India’s first flex-fuel passenger vehicle, the Maruti Suzuki Wagon R Flex-Fuel, capable of operating on ethanol-petrol blends ranging from E20 to E100. The launch supports India’s ethanol-based mobility and cleaner transportation goals.

14. KS Bharat Retires from International Cricket

Kona Srikar Bharat announced retirement from international cricket after representing India in seven Test matches. He will now pursue opportunities in overseas T20 leagues while continuing domestic cricket commitments.

15. Constitutional Expert Subhash C. Kashyap Passes Away

Renowned constitutional expert and former Lok Sabha Secretary-General Subhash C. Kashyap passed away at the age of 97. A Padma Bhushan awardee, he authored over 100 books on India’s Constitution, parliamentary procedures, and political system.

16. Former CBFC Chairman Pahlaj Nihalani Passes Away

Veteran film producer and former CBFC Chairman Pahlaj Nihalani passed away at the age of 76. He was known for producing several successful Bollywood films and served as CBFC Chairperson from 2015 to 2017.

17. International Day for the Fight Against IUU Fishing 2026 – June 5

The United Nations observed the International Day for the Fight Against Illegal, Unreported and Unregulated (IUU) Fishing on June 5. The day raises awareness about the environmental and economic impacts of illegal fishing and promotes sustainable fisheries management worldwide.

18. International Level Crossing Awareness Day 2026 – June 5

International Level Crossing Awareness Day (ILCAD) was observed on June 5 under the slogan “Alert Today, Safe Tomorrow”. The observance promotes safety at railway crossings and encourages responsible behaviour among road and rail users.

19. Telangana and Germany’s Thuringia Sign Cooperation Pact

The Government of Telangana signed a cooperation agreement with the German state of Thuringia to strengthen collaboration in skill development, innovation, industrial growth, workforce training, startups, and life sciences. The partnership also includes plans for a German Language Training Hub in Hyderabad to improve overseas employment opportunities.

Context:

The Union Cabinet has approved a one-time budgetary support package of up to ₹10,000 crore to establish a Price Stabilization Fund for Aviation Turbine Fuel (ATF), in response to unprecedented global fuel volatility triggered by the West Asia crisis. International ATF prices surged 2.5 times, from ₹60.50 per litre in March 2026 to ₹142 per litre in May 2026. The fund will offer interest-free advances to Oil Marketing Companies (OMCs), shield Scheduled Indian Airlines from extreme fuel costs, and protect passenger fares and air connectivity.

Key Facts

Indicator	Detail
Fund name	Price Stabilization Fund for Aviation Turbine Fuel (ATF)
Approving authority	Union Cabinet
Budgetary support	Up to ₹10,000 crore (one-time, interest-free)
Routing	Demands for Grants of the Ministry of Petroleum and Natural Gas
Beneficiaries	All willing Scheduled Indian Airlines (domestic and international flight paths)
Trigger	West Asia crisis and global ATF price spike
MoU signatories	Participating airlines, OMCs, Ministry of Civil Aviation, Ministry of Petroleum and Natural Gas
Monitoring Committee composition	Ministry of Civil Aviation, Ministry of Petroleum and Natural Gas, and Department of Expenditure

About the Aim of the Fund:

• To provide price stability and structural predictability for fuel procurement by airlines.
• To shield domestic carriers and OMCs from severe financial losses caused by extreme global ATF price swings.
• To maintain India’s air connectivity networks, stabilise passenger ticket fares, and protect the broader civil aviation ecosystem.

Key Features:

• Interest-Free Advance to OMCs: Up to ₹10,000 crore to offset OMC losses when the international Import Parity Price (IPP) exceeds the fund’s benchmark.
• Recovery and True-Up Mechanism: When ATF prices drop below the threshold, the differential is recovered from OMCs and returned to the Consolidated Fund of India until the advance is fully settled.
• Universal Flight Operations Coverage: Available to all willing Scheduled Indian carriers for both domestic and international flight paths.
• Fixed-Price Fuel Arrangement: Eliminates daily ATF price volatility for airlines and gives clear cost predictability.
• Exclusive OMC Sourcing Lock-In: Through a Memorandum of Understanding (MoU), airlines must buy ATF exclusively from participating OMCs for up to 3 years.

Practice MCQs

Q1. With reference to the recently approved Price Stabilization Fund for Aviation Turbine Fuel (ATF), consider the following statements:

1. The Union Cabinet has approved a one-time budgetary support of up to ₹10,000 crore for the fund.
2. The fund will be routed through the Demands for Grants of the Ministry of Petroleum and Natural Gas.
3. The fund offers interest-free advances to OMCs to offset losses when international ATF prices spike above a benchmark.
4. The fund will permanently subsidise ATF prices irrespective of global oil prices.

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 fund operates on a revolving, non-deficit model, with true-up recovery when prices fall, and is not a permanent subsidy.)

Q2. With reference to the structure and operation of the fund, consider the following statements:

1. When global ATF rates drop below the threshold, the differential is recovered from OMCs and returned to the Consolidated Fund of India.
2. The fund is available to all willing Scheduled Indian carriers for both domestic and international flight paths.
3. Airlines participating in the scheme commit to sourcing ATF exclusively from participating OMCs for up to three years.
4. The fund is slated to remain active for 36 months, with annual reviews and a possible extension or early closure.

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 Aviation Turbine Fuel (ATF) and India’s policy backdrop, consider the following statements:

1. ATF, or jet fuel, typically accounts for 30 to 40 per cent of an Indian airline’s operating costs.
2. ATF prices in India are influenced by global crude oil prices, refining margins, the rupee-dollar exchange rate, and state and central taxes.
3. The recent fund was triggered by an unprecedented rise in ATF prices from ₹60.50 per litre in March 2026 to ₹142 per litre in May 2026.
4. ATF prices in India are entirely insulated from global crude oil market movements.

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; ATF prices are closely linked to global crude oil prices and the Import Parity Price (IPP) mechanism.)

Q4. With reference to oversight and governance of the ATF Price Stabilization Fund, consider the following statements:

1. The Monitoring Committee includes the Ministry of Civil Aviation, the Ministry of Petroleum and Natural Gas, and the Department of Expenditure.
2. The fund is implemented through a formal Memorandum of Understanding (MoU) signed by participating airlines, OMCs, and the concerned ministries.
3. The Monitoring Committee will mandate strict independent audits to verify claims.
4. The Reserve Bank of India is the lead authority for verifying and disbursing claims under the fund.

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 fund is overseen by the tri-ministerial Monitoring Committee, NOT the RBI.)

Answer Key

1. (c), Statements 1, 2, 3 are correct; Statement 4 is wrong because the fund is a revolving, non-deficit mechanism, not a permanent subsidy.
2. (d), All four statements are correct.
3. (a), Statements 1, 2, 3 are correct; Statement 4 is wrong because ATF prices in India are strongly linked to global crude oil markets.
4. (a), Statements 1, 2, 3 are correct; Statement 4 is wrong because the fund is overseen by the tri-ministerial committee, not the RBI.

4. Jai Prakash Narayan Bird Sanctuary (Surha Tal), Ballia, Becomes India’s 100th Ramsar Site on World Environment Day

Source: TOI

Context:

The Jai Prakash Narayan Bird Sanctuary, also known as Surha Tal, located in Ballia district, Uttar Pradesh, has been designated as India’s 100th Ramsar Site on World Environment Day (5 June 2026). It is Uttar Pradesh’s 13th Ramsar Site. Surha Tal is a freshwater wetland in the middle stretch of the Ganga River basin, recognised for its ecological importance and role as a bird habitat.

Key Facts

Indicator	Detail
New Ramsar Site	Jai Prakash Narayan Bird Sanctuary (Surha Tal)
Location	Ballia district, Uttar Pradesh
Type of wetland	Freshwater wetland in the middle stretch of the Ganga River basin
India’s Ramsar Site count	100 (Surha Tal is the 100th)
Uttar Pradesh’s Ramsar Site count	13 (Surha Tal is UP’s 13th)
Date of designation	5 June 2026, World Environment Day
Underlying treaty	Ramsar Convention on Wetlands, 1971

About Surha Tal (Jai Prakash Narayan Bird Sanctuary):

• A freshwater wetland in Ballia district, eastern Uttar Pradesh.
• Lies in the middle stretch of the Ganga River basin.
• Named after Jai Prakash Narayan (JP), the iconic Indian freedom fighter and social reformer.
• Known for being a bird habitat, especially for migratory and resident wetland birds.
• A state-protected wildlife sanctuary even before the Ramsar designation.

About the Ramsar Convention:

• The Ramsar Convention on Wetlands is an international treaty signed in 1971 in the city of Ramsar, Iran, and entered into force in 1975.
• It is the first modern global environmental treaty.
• It provides a framework for the conservation and wise use of wetlands and their resources.
• India became a party to the Ramsar Convention on 1 February 1982.
• The Convention covers all wetland types, including lakes, rivers, marshes, peatlands, oases, estuaries, deltas, tidal flats, near-shore marine areas, mangroves, coral reefs, and human-made wetlands like reservoirs and rice paddies.

About India’s Ramsar Sites:

• India now has 100 Ramsar Sites with the designation of Surha Tal.
• The first Ramsar Sites in India were designated in 1981: Chilika Lake (Odisha) and Keoladeo National Park (Rajasthan).
• The State with the most Ramsar Sites in India is Tamil Nadu, followed by Uttar Pradesh, Gujarat, and Punjab.
• India also has a few of the world’s most important wetland ecosystems, including Sundarbans, Kolleru Lake, Wular Lake, Loktak Lake, Sambhar Lake, and Chilika Lake.

About World Environment Day:

• Observed annually on 5 June since 1973, as established by the United Nations General Assembly in 1972 following the Stockholm Conference on the Human Environment.
• The 2026 theme focuses on ecological restoration and biodiversity (specifics may vary by host country).
• Coordinated by the United Nations Environment Programme (UNEP), headquartered in Nairobi, Kenya.

Key Terms (Simple):

• Wetland: An area where water covers the land or is present at or near the surface for most of the year. Wetlands include marshes, swamps, lakes, rivers, mangroves, and coastal areas.
• Ramsar Site: A wetland designated under the Ramsar Convention as being of international importance for biodiversity, water security, climate, or human livelihoods.
• Migratory Birds: Birds that travel long distances seasonally between their breeding and wintering grounds, often using wetlands as stopover sites.
• Bird Sanctuary: A protected area under Indian wildlife law, primarily aimed at protecting bird habitats and species.
• Ganga River Basin: The catchment area of the Ganga River, covering large parts of northern India and Bangladesh, and supporting rich biodiversity along its upper, middle, and lower stretches.

Practice MCQs

Q1. With reference to the recent Ramsar designation, consider the following statements:

1. Jai Prakash Narayan Bird Sanctuary (Surha Tal) has been designated as India’s 100th Ramsar Site.
2. Surha Tal is located in Ballia district, Uttar Pradesh.
3. It is Uttar Pradesh’s 13th Ramsar Site.
4. The designation was announced on World Environment Day (5 June 2026).

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 Ramsar Convention, consider the following statements:

1. The Ramsar Convention on Wetlands is an international treaty signed in 1971 in the city of Ramsar, Iran.
2. The Convention entered into force in 1975.
3. India became a party to the Ramsar Convention on 1 February 1982.
4. The Ramsar Convention is administered by the World Trade Organization (WTO).

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 Ramsar Convention is an independent intergovernmental treaty and is NOT administered by the WTO.)

Q3. Consider the following statements about wetlands and Ramsar Sites:

1. Ramsar Sites can include lakes, rivers, marshes, mangroves, and even human-made wetlands like reservoirs and rice paddies.
2. Chilika Lake in Odisha and Keoladeo National Park in Rajasthan were among India’s first Ramsar Sites, designated in 1981.
3. Wetlands are important for biodiversity, water security, flood control, and climate regulation.
4. Wetlands have no significance for migratory birds and are excluded from major bird conservation strategies.

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; wetlands are extremely important for migratory birds and are key parts of major bird conservation strategies globally.)

Q4. With reference to World Environment Day, consider the following statements:

1. World Environment Day is observed annually on 5 June.
2. It was established by the United Nations General Assembly in 1972, following the Stockholm Conference on the Human Environment.
3. The day has been observed globally since 1973.
4. World Environment Day is coordinated by the United Nations Environment Programme (UNEP), headquartered in Nairobi, Kenya.

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 the Ramsar Convention is not administered by the WTO.
3. (a), Statements 1, 2, 3 are correct; Statement 4 is wrong because wetlands are highly significant for migratory birds.
4. (d), All four statements are correct.

Banking/Finance

1. RBI MPC Holds Repo Rate at 5.25 %

Source: The Hindu

Context

The Monetary Policy Committee (MPC) of the Reserve Bank of India (RBI) has unanimously voted to hold the policy repo rate at 5.25 per cent under the Liquidity Adjustment Facility (LAF) and continue with the neutral stance. The decision was driven by a deteriorating global environment, with the West Asia conflict, extended supply-chain disruptions, elevated energy prices, and uncertainty over the south-west monsoon and El Niño. The MPC has cut its real GDP growth projection for 2026-27 to 6.6 per cent (from 6.9 per cent) and raised the CPI inflation projection to 5.1 per cent (from 4.6 per cent, that is, 50 bps higher).

Key Facts

• Repo rate unchanged: The policy repo rate stays at 5.25 per cent, the rate at which the RBI lends short-term money to banks.
• Other rates: The Standing Deposit Facility (SDF) rate stays at 5.00 per cent, and both the Marginal Standing Facility (MSF) rate and the Bank Rate stay at 5.50 per cent.
• Stance: The MPC continues with a neutral stance, meaning it is neither tightening nor easing, but watching the data.
• Vote: The decision was unanimous.
• GDP growth for FY27 cut to 6.6 per cent from the earlier 6.9 per cent, reflecting a drag from global supply constraints and elevated energy prices.
• Quarter-wise GDP growth for FY27: Q1 at 6.6 per cent, Q2 at 6.3 per cent, Q3 at 6.5 per cent, Q4 at 6.8 per cent.
• CPI inflation for FY27 raised to 5.1 per cent, which is 50 bps higher than the earlier 4.6 per cent projection.
• Quarter-wise CPI for FY27: Q1 at 4.2 per cent, Q2 at 5.1 per cent, Q3 at 5.9 per cent, Q4 at 5.4 per cent.
• Core CPI projected at 4.7 per cent for FY27.
• CPI to firm up to the upper tolerance level in Q3 of 2026-27, with the impact of the supply shock waning from Q4.
• Crude oil prices (Indian basket) averaged about USD 110 per barrel during April-May 2026, much higher than assumed in the April policy.
• Risk factors: West Asia conflict, supply-chain disruptions, sub-normal south-west monsoon forecast, El Niño, and second-round effects on wages and inflation expectations.
• Mitigating factors: Programmes for crop diversification, water harvesting and conservation, climate-resilient practices, and short-duration crops.
• MPC’s reasoning to hold rates: Although risks of higher inflation have amplified, it was felt prudent to wait for greater clarity to emerge. Decisions will remain data-dependent.

Key Terms (Simple)

• Repo Rate: The interest rate at which the RBI lends short-term money to commercial banks against government securities. The main policy rate.
• Standing Deposit Facility (SDF): A facility for banks to park surplus money with the RBI without collateral, at a rate slightly below the repo rate.
• Marginal Standing Facility (MSF): A facility for banks to borrow overnight from the RBI in emergencies, at a rate slightly above the repo rate.
• Bank Rate: A rate at which the RBI lends to commercial banks without collateral, usually aligned with the MSF rate.
• Liquidity Adjustment Facility (LAF): The RBI’s main toolkit to manage short-term liquidity in the banking system, including repo, reverse repo, SDF, and MSF.
• Neutral Stance: A monetary policy stance that does not commit to either tightening or easing, giving the MPC flexibility to respond as data evolves.
• CPI Inflation: The rate of change in retail prices of a representative basket of goods and services, as measured by MoSPI’s CPI (Combined).
• Core CPI: CPI inflation excluding food and fuel, considered a measure of underlying inflation.
• Tolerance Band: India’s inflation target is 4 per cent with a band of plus or minus 2 percentage points, so the upper tolerance is 6 per cent, and the lower tolerance is 2 per cent.
• Pass-through: How much of a change in input prices (like crude oil) flows into retail prices of goods and services.
• Second-round Effects: When initial price rises (like fuel or food) feed into wages and inflation expectations, making inflation more persistent.
• El Niño: A periodic warming of the eastern Pacific Ocean, often linked to weaker monsoons and droughts in India.

Practice MCQs

Q1. With reference to the RBI MPC’s latest decisions, consider the following statements:

1. The MPC kept the policy repo rate unchanged at 5.25 per cent.
2. The standing deposit facility (SDF) rate stands at 5.00 per cent, and the MSF rate and bank rate stand at 5.50 per cent.
3. The MPC voted unanimously and continued with the neutral stance.
4. The MPC has reduced India’s CPI inflation projection for 2026-27.

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 MPC has raised the CPI projection for 2026-27 to 5.1 per cent, which is 50 bps higher than the earlier projection.)

Q2. Consider the following statements about the RBI’s revised projections for 2026-27:

1. Real GDP growth for 2026-27 has been revised down to 6.6 per cent from 6.9 per cent.
2. CPI inflation for 2026-27 has been raised to 5.1 per cent.
3. The quarter-wise GDP growth projections are 6.6 per cent for Q1, 6.3 per cent for Q2, 6.5 per cent for Q3, and 6.8 per cent for Q4.
4. CPI inflation is projected to firm up to the upper tolerance level in Q3 of 2026-27.

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 institutional framework of India’s monetary policy, consider the following statements:

1. The Monetary Policy Committee (MPC) is a six-member committee of the RBI under the inflation-targeting framework.
2. CPI inflation is the official target for monetary policy, with a tolerance band of 4 per cent plus or minus 2 percentage points.
3. The standing deposit facility (SDF) rate forms the lower bound of the LAF corridor, while the MSF rate forms the upper bound.
4. The bank rate is the rate at which commercial banks lend to retail customers and is not set by the RBI.

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 bank rate is the rate at which the RBI lends to commercial banks and is set by the RBI, not by banks themselves.)

Q4. Consider the following statements about the global and domestic backdrop influencing the MPC’s decision:

1. The MPC noted that the global environment has deteriorated since the last policy meeting due to a lingering conflict and elevated energy prices.
2. The MPC flagged concerns about a sub-normal south-west monsoon forecast and El Niño risks.
3. The MPC emphasised that despite global shocks, CPI inflation has so far remained below the target due to limited pass-through.
4. The MPC has indicated that India’s monetary policy will be conducted entirely independently of global supply-chain conditions.

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 MPC explicitly discussed global supply chains and conflict spillovers in its reasoning, which means monetary policy is closely connected to global conditions.)

Answer Key

1. (c), Statements 1, 2, 3 are correct; Statement 4 is wrong because the MPC has raised, not reduced, the CPI projection for 2026-27.
2. (d), All four statements are correct.
3. (a), Statements 1, 2, 3 are correct; Statement 4 is wrong because the bank rate is set by the RBI, not by commercial banks.
4. (a), Statements 1, 2, 3 are correct; Statement 4 is wrong because the MPC’s reasoning shows monetary policy is closely tied to global supply-chain conditions.

Exam Relevance

Banking (RBI Gr B, SBI PO, IBPS, NABARD)	Very high importance, MPC decisions, rates, inflation framework
RBI Grade B	Core area, Economic and Social Issues, Finance and Management

2. RBI to Release Updated List of Upper Layer NBFCs Soon

Context:

The Reserve Bank of India (RBI) will soon release the updated list of Upper Layer NBFCs (NBFC-UL), Governor Sanjay Malhotra said at the post-policy press conference. The central bank has not released a list of Upper Layer NBFCs for the financial year ended March 2026. Meanwhile, Tata Sons, the holding company of the Tata Group, has sought to de-register as an Upper Layer NBFC, which would exempt it from the mandatory listing requirement (deadline was September 2025). The RBI has said the matter is under examination, with the process for finalising the revised list underway.

About the Scale-Based Regulation (SBR) for NBFCs:

• The RBI introduced a new Scale-Based Regulation (SBR) framework for NBFCs, effective 1 October 2022.
• Under this framework, NBFCs are classified into four layers, depending on size, activity, and perceived systemic risk:
  • Base Layer (NBFC-BL): Mainly non-deposit-taking NBFCs with assets below ₹1,000 crore, and specified categories. They face the lightest regulation.
  • Middle Layer (NBFC-ML): Deposit-taking NBFCs, larger non-deposit-taking NBFCs (above ₹1,000 crore in assets), and specific categories like standalone primary dealers, infrastructure finance companies, and housing finance companies. They face tighter regulation.
  • Upper Layer (NBFC-UL): NBFCs identified by the RBI as systemically significant, based on size, interconnectedness, complexity, and supervisory inputs. They face the strictest regulation, close to bank-like norms, and are required to be listed within 3 years.
  • Top Layer (NBFC-TL): A reserved layer that the RBI can populate if it finds certain NBFCs in the Upper Layer pose extreme systemic risk. Currently empty.

About the Upper Layer NBFCs and Listing Requirement:

• The RBI identifies Upper Layer NBFCs annually, based on scoring methodology that includes size, leverage, interconnectedness, complexity, and supervisory factors.
• Once identified, Upper Layer NBFCs face additional regulatory requirements:
  • Higher capital adequacy norms.
  • Larger exposure limits and tighter governance norms.
  • Common Equity Tier 1 capital requirements similar to banks.
  • Mandatory listing within 3 years of identification (deadline for the current batch was September 2025).
• Tata Sons was identified as an Upper Layer NBFC in the initial list of 2022-23, which would have required it to be listed by September 2025.
• Tata Sons has been seeking to de-register as an Upper Layer NBFC, which would allow it to avoid the listing requirement, but the request remains under RBI examination.

About NBFCs:

• Non-Banking Financial Companies (NBFCs) are financial institutions that lend money, invest in securities, and offer financial services, but cannot accept demand deposits (current and savings accounts) like a bank.
• They are regulated by the RBI under the Reserve Bank of India Act, 1934.
• Different types of NBFCs include Loan Companies, Investment Companies, Asset Finance Companies, Microfinance Institutions (MFIs), Infrastructure Finance Companies, and Housing Finance Companies.
• NBFCs play a critical role in financial inclusion, especially for MSMEs, consumers, vehicle finance, and underserved geographies.

Practice MCQs

Q1. With reference to the RBI’s announcement on Upper Layer NBFCs, consider the following statements:

1. The RBI Governor said that the list of Upper Layer NBFCs will be released soon.
2. The RBI has not released a list of Upper Layer NBFCs for the financial year ended March 2026.
3. Tata Sons has sought to de-register as an Upper Layer NBFC, which would exempt it from the mandatory listing requirement.
4. The matter of Tata Sons’ application is under examination by the RBI.

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 Scale-Based Regulation (SBR) framework for NBFCs, consider the following statements:

1. The SBR framework became effective on 1 October 2022.
2. It classifies NBFCs into four layers: Base Layer, Middle Layer, Upper Layer, and Top Layer.
3. Upper Layer NBFCs face stricter regulation, including a mandatory listing requirement within three years.
4. The Top Layer is reserved for NBFCs posing extreme systemic risk and is currently empty.

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 Non-Banking Financial Companies (NBFCs) in India, consider the following statements:

1. NBFCs are regulated by the Reserve Bank of India under the RBI Act, 1934.
2. NBFCs can lend money, invest in securities, and offer financial services.
3. NBFCs cannot accept demand deposits like current and savings accounts.
4. NBFCs play a significant role in financial inclusion, especially for MSMEs and underserved geographies.

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

Q4. With reference to Tata Sons and Upper Layer NBFC classification, consider the following statements:

1. Tata Sons is the holding company of the Tata Group.
2. Tata Sons was identified as an Upper Layer NBFC in the initial list released by the RBI under the SBR framework.
3. The mandatory listing deadline for the current batch of Upper Layer NBFCs was September 2025.
4. The RBI has confirmed that it has formally accepted Tata Sons’ application for de-registration.

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 RBI has said that Tata Sons’ application is under examination, NOT that it has been formally accepted.)

Answer Key

1. (d), All four statements are correct.
2. (d), All four statements are correct.
3. (e), All four statements are correct.
4. (a), Statements 1, 2, 3 are correct; Statement 4 is wrong because the RBI has only said the application is under examination, not that it has been accepted.

3. PFRDA Launches “StAR NPS” Platform for Digital Onboarding

Source: BS

Context:

The Pension Fund Regulatory and Development Authority (PFRDA), a statutory body under the Ministry of Finance, has launched the “StAR NPS” platform in June 2026, a digital onboarding solution developed by BSE Technologies Private Limited (BTPL) to simplify subscriber registration for the National Pension System (NPS). PFRDA has also introduced a Regulatory Sandbox Framework, effective from 2 June 2026, to allow controlled testing of innovative pension-sector solutions before they are rolled out more widely.

Key Facts

Indicator	Detail
Launching authority	PFRDA (Pension Fund Regulatory and Development Authority)
Ministry	Ministry of Finance
Platform name	StAR NPS
Developer	Bombay Stock Exchange (BSE) Technologies Private Limited (BTPL)
Channel for onboarding	Points of Presence (PoPs) and their network of pension agents
Eligibility (StAR NPS)	Resident Indians aged 18 to 85 years
Sandbox framework effective date	2 June 2026
Sandbox eligibility	PFRDA-registered intermediaries and eligible non-registered entities including fintech firms
Minimum net worth for non-registered applicants	₹10 lakh
Restriction on non-registered sandbox participants	Their innovations must not handle subscriber contributions, funds, or any other data

About the StAR NPS Platform:

• A technology-enabled assisted onboarding platform for NPS subscribers.
• Onboarding happens through Points of Presence (PoPs) and their network of pension agents.
• Aims to streamline and simplify the subscriber registration process for the National Pension System.
• Eligible to Resident Indian individuals aged 18 to 85 years (under the current framework).

About the Regulatory Sandbox Framework:

• Allows controlled testing of innovative pension-sector solutions before wider adoption.
• Open to:
  • PFRDA-registered intermediaries.
  • Eligible non-registered entities including fintech firms.
• Non-registered applicants must have a minimum net worth of ₹10 lakh.
• Non-registered participants are only eligible if their innovations do not handle subscriber contributions, funds, or any other data.
• Enables safe, time-bound experimentation with a limited user set.

About PFRDA:

• Pension Fund Regulatory and Development Authority.
• A statutory body under the Ministry of Finance, Government of India.
• Established as a regulator through the PFRDA Act, 2013.
• Headquartered in New Delhi.
• Regulates and supervises the National Pension System (NPS) and the Atal Pension Yojana (APY).

About the National Pension System (NPS):

• A voluntary, defined-contribution retirement savings scheme.
• Introduced for central government employees in 2004 (excluding armed forces) and made available to all citizens from 2009.
• Regulated by PFRDA.
• Two types of accounts: Tier-I (mandatory retirement account, with withdrawal limits) and Tier-II (voluntary, more flexible).
• Subscribers get a Permanent Retirement Account Number (PRAN).
• Investment options include equity, government securities, corporate bonds, and alternative assets.
• Offers tax benefits under Sections 80CCD(1), 80CCD(1B), and 80CCD(2) of the Income Tax Act.

About Points of Presence (PoPs):

• Banks, NBFCs, and other PFRDA-authorised entities that act as the first interface for NPS subscribers.
• They handle subscriber registration, contributions, account servicing, and grievance redressal.

About Regulatory Sandbox:

• A regulator-supervised, controlled environment that allows firms to test new financial products and services with real users but under defined limits (number of users, duration, exposure).
• Pioneered globally by UK’s Financial Conduct Authority (FCA).
• In India, RBI, SEBI, IRDAI, and now PFRDA have established sectoral regulatory sandboxes.

Practice MCQs

Q1. With reference to the launch of the StAR NPS platform, consider the following statements:

1. The platform has been launched by the Pension Fund Regulatory and Development Authority (PFRDA).
2. It has been developed by Bombay Stock Exchange (BSE) Technologies Private Limited.
3. The platform provides technology-enabled assisted onboarding for NPS subscribers through Points of Presence (PoPs) and pension agents.
4. The platform is currently open to all foreign nationals working in India, regardless of age.

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 platform is currently open to Resident Indian individuals aged 18 to 85 years, NOT all foreign nationals.)

Q2. With reference to the new Regulatory Sandbox Framework introduced by PFRDA, consider the following statements:

1. The Regulatory Sandbox Framework became effective on 2 June 2026.
2. PFRDA-registered intermediaries and eligible non-registered entities, including fintech firms, can apply to test new solutions.
3. Non-registered entities applying as independent applicants must have a minimum net worth of ₹10 lakh.
4. Non-registered sandbox participants are restricted from handling subscriber contributions, funds, or other data.

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 PFRDA and the National Pension System (NPS), consider the following statements:

1. PFRDA is a statutory body under the Ministry of Finance, established by the PFRDA Act, 2013.
2. The NPS is regulated by PFRDA and is open to all Indian citizens from 2009.
3. The NPS uses a Tier-I (mandatory) and Tier-II (voluntary) account structure, with each subscriber assigned a Permanent Retirement Account Number (PRAN).
4. The NPS provides tax benefits under Sections 80CCD(1), 80CCD(1B), and 80CCD(2) of the Income Tax Act.

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 concept of a Regulatory Sandbox in India, consider the following statements:

1. A regulatory sandbox is a regulator-supervised, controlled environment to test innovative financial products and services.
2. The concept was pioneered globally by the United Kingdom’s Financial Conduct Authority (FCA).
3. In India, regulatory sandboxes have been established by sector regulators including RBI, SEBI, IRDAI, and PFRDA.
4. A regulatory sandbox typically operates without any user limits, time limits, or exposure caps.

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 regulatory sandbox is designed with defined limits on users, duration, and exposure.)

Answer Key

1. (c), Statements 1, 2, 3 are correct; Statement 4 is wrong because StAR NPS is open to Resident Indians aged 18 to 85 years, not foreign nationals.
2. (d), All four statements are correct.
3. (d), All four statements are correct.
4. (a), Statements 1, 2, 3 are correct; Statement 4 is wrong because a regulatory sandbox operates with clear limits.

Facts To Remember

1. CCEA Approves Four National Highway Projects Worth Rs.24,249 Crore Across Four States

The Cabinet Committee on Economic Affairs (CCEA), chaired by Prime Minister Narendra Modi, approved four major National Highway projects worth over Rs.24,249 crore across Odisha, Telangana, Bihar, and Madhya Pradesh. Covering more than 700 kilometres, the projects aim to improve regional connectivity, reduce travel time, ease congestion, and strengthen logistics infrastructure under the PM GatiShakti National Master Plan. The projects include a coastal highway in Odisha, highway upgrades in Madhya Pradesh and Bihar, and four-laning of key highway corridors in Telangana.

2. India Joins Anthropic’s Project Glasswing for Advanced Cybersecurity Capabilities

India joined Anthropic’s global cybersecurity initiative, Project Glasswing, gaining access to Claude Mythos AI, an advanced artificial intelligence platform designed to identify software vulnerabilities and strengthen cyber defences. The initiative aims to enhance cybersecurity resilience and protect critical infrastructure by enabling large-scale vulnerability detection, security auditing, and automated remediation across complex software systems.

3. India–UK Critical Minerals Global Supply Chain Observatory Launched

Union Minister G. Kishan Reddy and United Kingdom Foreign Secretary Yvette Cooper jointly launched the India–UK Critical Minerals Global Supply Chain Observatory (GSCO) in New Delhi. The initiative seeks to strengthen cooperation in critical minerals, support clean energy transitions, and enhance supply chain resilience. The observatory is jointly led by TEXMiN at IIT (ISM) Dhanbad and the University of Cambridge to provide supply-chain intelligence and support evidence-based policymaking.

4. PFRDA Launches ‘StAR NPS’ Platform and Regulatory Sandbox Framework

The Pension Fund Regulatory and Development Authority (PFRDA) launched the ‘StAR NPS’ platform to simplify digital onboarding of National Pension System (NPS) subscribers through Points of Presence and pension agents. Alongside, PFRDA introduced a Regulatory Sandbox Framework to allow controlled testing of innovative pension-sector solutions by fintech firms and registered intermediaries before large-scale implementation.

5. Dr. Jitendra Singh Announces ANRF-Backed Research and Innovation Portal

Union Minister Dr. Jitendra Singh announced a new digital portal supported by the Anusandhan National Research Foundation (ANRF) to strengthen India’s research and innovation ecosystem. The portal will provide training and support in research paper writing, scientific publishing, patent filing, intellectual property protection, and innovation management for researchers, students, startups, and innovators across the country.

6. 17 Projects Selected for National Awards for e-Governance 2026

The Department of Administrative Reforms and Public Grievances (DARPG) announced the winners of the 29th National Awards for e-Governance (NAeG) 2026, selecting 17 projects across seven categories. The awards recognize excellence in digital governance, innovation, and technology-driven public service delivery by central ministries, states, union territories, districts, organizations, and Gram Panchayats.

7. Major Prabhat Mishra Wins Two Prestigious Awards at US Army CGSOC

Major Prabhat Mishra of the Indian Army received the Birrer-Brookes Award for Outstanding Master of Military Arts and Science Thesis and the General Douglas MacArthur Military Leadership Writing Award at the United States Army Command and General Staff College (CGSOC). He became the first Indian officer to win both honours simultaneously and secured fourth rank among 1,185 officers in the programme.

8. Neelkanth Mishra Appointed Executive Director of the World Bank

The Appointments Committee of the Cabinet approved the appointment of economist Neelkanth Mishra as Executive Director of the World Bank for a three-year term. Currently serving as Chief Economist at Axis Bank, he will succeed Parameswaran Iyer and represent India at the World Bank.

9. India Launches First Flex-Fuel Passenger Vehicle

Union Minister Hardeep Singh Puri launched India’s first passenger Flex-Fuel Vehicle (FFV), the Maruti Suzuki Wagon R, capable of operating on ethanol-petrol blends ranging from E20 to E100. The launch marks a significant step towards ethanol-based mobility and cleaner transportation. Simultaneously, Hero MotoCorp introduced its first flex-fuel motorcycles to support India’s biofuel adoption goals.

10. KS Bharat Announces Retirement from International Cricket

Indian wicketkeeper-batter Kona Srikar Bharat, popularly known as KS Bharat, announced his retirement from international cricket. He represented India in seven Test matches between 2023 and 2024 and was part of the 2023 World Test Championship Final squad. He will now pursue opportunities in overseas T20 leagues.

11. Former Lok Sabha Secretary-General Subhash C. Kashyap Passes Away

Renowned constitutional expert, author, and former Lok Sabha Secretary-General Subhash C. Kashyap passed away at the age of 97. A Padma Bhushan awardee, he authored over 100 books on the Indian Constitution, parliamentary procedures, and political systems, making significant contributions to constitutional studies and parliamentary affairs.

12. Former CBFC Chairman Pahlaj Nihalani Passes Away

Veteran film producer and former CBFC Chairman Pahlaj Nihalani passed away at the age of 76. He was known for producing several successful Hindi films and served as Chairperson of the Central Board of Film Certification from 2015 to 2017.

13. International Day for the Fight Against Illegal, Unreported and Unregulated Fishing 2026 Observed on June 5

The United Nations observed the International Day for the Fight Against Illegal, Unreported and Unregulated (IUU) Fishing on 5 June 2026. The day aims to raise awareness about the harmful impact of illegal fishing on marine ecosystems, fisheries sustainability, and global food security, while promoting implementation of the Port State Measures Agreement.

14. International Level Crossing Awareness Day 2026 Observed on June 5

International Level Crossing Awareness Day (ILCAD) was observed globally on 5 June 2026 with the slogan “Alert Today, Safe Tomorrow”. The observance promotes safe behaviour at railway level crossings and aims to reduce accidents involving road and rail transport intersections.

15. Tamil Nadu Signs Rs.18,600 Crore Investment Pact with Larsen & Toubro

The Government of Tamil Nadu signed a Memorandum of Understanding with Larsen & Toubro for investments worth Rs.18,600 crore across three major projects. The projects include expansion of a data centre in Kancheepuram, establishment of an electronics manufacturing facility in Coimbatore, and expansion of the Kattupalli shipyard in Tiruvallur district, generating thousands of employment opportunities and strengthening the state’s industrial ecosystem.

16. Air Marshal Ashutosh Dixit to be next Vice-Chief of Air Staff

Air Marshal Ashutosh Dixit, a distinguished fighter pilot and test pilot, has been appointed the next Vice-Chief of the Air Staff (VCAS) and will assume office on July 1. He succeeds Air Marshal Nagesh Kapoor.

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

Facts To Remember

1. Cabinet Approves Rs 9,585 Crore Scheme to Replace Old Vehicles in Delhi-NCR

The Union Cabinet approved a two-year Rs 9,585 crore scheme to replace 2.07 lakh BS-IV and older trucks and buses in Delhi-NCR with BS-VI-compliant or electric vehicles. The initiative aims to reduce vehicular emissions, improve air quality, and modernize commercial transport fleets across Delhi, Haryana, Rajasthan, and Uttar Pradesh. The scheme offers interest subvention, fuel vouchers, tax concessions, registration fee waivers, and discounts from vehicle manufacturers.

2. Jayant Chaudhary Launches ‘Navachar Mantra’ for Grassroots Innovation

Union Minister Jayant Chaudhary launched “Navachar Mantra”, a national initiative aimed at identifying, mentoring, and scaling grassroots innovators and early-stage entrepreneurs. Implemented by NIESBUD in collaboration with IIT Delhi’s FITT, the programme offers year-long mentorship, investor connections, innovation showcases, and support for commercializing innovative ideas.

3. Centre Expands QR Tagging of FCI Foodgrain Bags

The Government of India expanded QR code tagging of Food Corporation of India (FCI) foodgrain bags to Andhra Pradesh, Telangana, and Odisha. The initiative enables end-to-end tracking of foodgrain movement, enhances transparency, prevents bag recycling, and improves monitoring of procurement, storage, and distribution under the Public Distribution System (PDS).

4. T-Hub Launches Third ORBIT Space-Tech Accelerator Cohort

Hyderabad-based T-Hub launched the third cohort of its ORBIT Space-Tech Accelerator Programme, inducting 13 startups working in areas such as propulsion systems, satellite intelligence, orbital servicing, space energy systems, and geospatial technologies. The programme provides mentorship from industry experts, investors, and former ISRO leaders.

5. UNGA Elects Five New Non-Permanent Members to UNSC

The United Nations General Assembly elected Austria, Kyrgyzstan, Portugal, Trinidad and Tobago, and Zimbabwe as non-permanent members of the United Nations Security Council (UNSC) for the 2027–2028 term. Kyrgyzstan secured its first-ever seat on the UNSC since joining the United Nations in 1992.

6. ADB and Standard Chartered Partner to Strengthen Supply Chain Finance

The Asian Development Bank (ADB) and Standard Chartered Bank signed agreements to strengthen supply chain finance in India through risk-sharing mechanisms covering both US Dollar and Indian Rupee transactions. The partnership aims to improve access to trade finance and support domestic and international business operations.

7. OECD Raises India’s FY27 Growth Forecast to 6.3%

The Organisation for Economic Co-operation and Development (OECD) increased India’s GDP growth forecast for FY27 to 6.3%, up from its earlier estimate of 6.1%. The report projects India’s economy to remain among the fastest-growing major economies despite global uncertainties and higher energy prices.

8. Lionel Messi Becomes First Footballer to Win Princess of Asturias Award

Argentine football legend Lionel Messi became the first footballer to receive the prestigious Princess of Asturias Award for Sports. He was recognised for his extraordinary sporting achievements, global influence, and philanthropic contributions supporting education and healthcare initiatives.

9. D.K. Shivakumar Sworn In as Karnataka’s 25th Chief Minister

D. K. Shivakumar was sworn in as the 25th Chief Minister of Karnataka following the resignation of Siddaramaiah. The oath ceremony was administered by Governor Thawar Chand Gehlot at Raj Bhavan in Bengaluru.

10. Mette Frederiksen Begins Third Consecutive Term as Denmark PM

Mette Frederiksen secured a third consecutive term as Prime Minister of Denmark after successfully forming a new centre-left coalition government following the 2026 parliamentary elections.

11. Visa Appoints Shah Rukh Khan for ‘Infinitely More’ Campaign

Visa appointed Shah Rukh Khan as brand ambassador for its new “Infinitely More” campaign in India. The campaign focuses on experience-led lifestyles, highlighting travel, dining, entertainment, and digital payment convenience.

12. GQG Partners Sells Stake in GMR Airports

American investment firm GQG Partners sold a 1.85% stake in GMR Airports Limited for Rs 1,906 crore through open market transactions. The stake was acquired by Fidelity International through its investment fund.

13. Vice-President Releases Book “When Audit Matters”

Vice-President C. P. Radhakrishnan released the book When Audit Matters: CAG Interventions That Made a Difference, edited by former CAG Vinod Rai. The book highlights the role of auditing in strengthening governance, accountability, and public trust.

14. International Day of Innocent Children Victims of Aggression 2026 Observed

The United Nations observed the International Day of Innocent Children Victims of Aggression on 4 June 2026 to raise awareness about the suffering of children affected by war, violence, exploitation, and armed conflict, while reaffirming commitments to child rights and protection.

15. Telangana and Germany’s Thuringia Sign Cooperation Agreement

The Government of Telangana signed a cooperation agreement with the German state of Thuringia to enhance collaboration in skill development, industrial growth, innovation, technology, workforce development, startups, and life sciences. The partnership also includes plans for a German Language Training Hub in Hyderabad to improve overseas employment opportunities.

Context:

Prime Minister of India has congratulated Major Abhilasha Barak of the Indian Army on being conferred the prestigious United Nations Military Gender Advocate of the Year Award. Major Barak is currently deployed with the United Nations Interim Force in Lebanon (UNIFIL) along the Blue Line between Lebanon and Israel, and serves as a Gender Focal Point and engagement team commander. With this award, she becomes the third Indian woman officer to win the recognition, after Major Suman Gawani (2019) and Major Radhika Sen (2023).

The Awardee

• Awardee: Major Abhilasha Barak, Indian Army officer.
• Award: UN Military Gender Advocate of the Year Award.
• Deployment: United Nations Interim Force in Lebanon (UNIFIL).
• Operational Region: Blue Line, between Lebanon and Israel.
• Roles: Engagement Team Commander and Gender Focal Point.

About the Award

• Created in: 2016.
• Created by: Office of Military Affairs, under the UN Department for Peace Operations (DPO).
• Recognises: Frontline military peacekeepers who promote and implement the UN Security Council Resolution 1325 on Women, Peace, and Security.
• Selection pool: Nominated by Force Commanders and Heads of Mission from active UN peace operations worldwide.
• Annual award.

Indian Winners

• 2019: Major Suman Gawani, UN Mission in South Sudan (UNMISS).
• 2023: Major Radhika Sen, UN Stabilization Mission in DR Congo (MONUSCO).
• 2025/26: Major Abhilasha Barak, UN Interim Force in Lebanon (UNIFIL).

What is UN Security Council Resolution 1325?

• A landmark resolution adopted in October 2000 by the UN Security Council (UNSC).
• It is the first UNSC resolution to formally link women’s experiences of conflict to the maintenance of international peace and security.
• Built on four pillars:
  • Participation of women in peace processes and decision-making.
  • Protection of women and girls from violence in conflict.
  • Prevention of conflict and gender-based violence.
  • Relief and recovery with a gender perspective.
• It is the foundation document of the Women, Peace, and Security (WPS) Agenda.

What is UNIFIL?

• United Nations Interim Force in Lebanon.
• A UN peacekeeping mission established in March 1978 through UNSC Resolution 425 and 426.
• Originally created to confirm Israeli withdrawal from southern Lebanon and restore international peace and security.
• After the 2006 Israel-Hezbollah war, its mandate was expanded under UNSC Resolution 1701.
• It monitors the Blue Line, supports the Lebanese Armed Forces (LAF), and provides humanitarian assistance.
• Headquarters: Naqoura, southern Lebanon.
• India is one of the largest troop contributors to UNIFIL.

What is the Women, Peace and Security (WPS) Agenda?

• A policy framework built on UNSC Resolution 1325 (2000) and subsequent resolutions (1820, 1888, 1889, 1960, 2106, 2122, 2242).
• Calls for the participation of women in peace processes, conflict prevention, and post-conflict reconstruction.
• Aims to protect women and girls from conflict-related sexual violence and gender-based violence.
• Promotes gender-responsive peace operations and post-conflict humanitarian assistance.

Practice MCQs

Q1. With reference to the UN Military Gender Advocate of the Year Award, consider the following statements:

1. It was created in 2016 by the Office of Military Affairs under the UN Department for Peace Operations.
2. It recognises military peacekeepers who promote UNSC Resolution 1325 on Women, Peace, and Security.
3. Major Abhilasha Barak is the third Indian woman officer to receive this award.
4. Major Radhika Sen of India received the award in 2023 for her service with MONUSCO.

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 UN Security Council Resolution 1325 and the Women, Peace and Security (WPS) Agenda, consider the following statements:

1. UNSC Resolution 1325 was adopted in 2000.
2. It is built on four pillars: Participation, Protection, Prevention, and Relief and Recovery.
3. It is the foundation of the UN’s Women, Peace and Security Agenda.
4. UNSC Resolution 1325 is non-binding and has no relevance to UN peacekeeping operations.

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; Resolution 1325 is a UNSC resolution and is central to UN peacekeeping operations.)

Q3. With reference to UNIFIL and the Blue Line, consider the following statements:

1. UNIFIL was established in March 1978 through UNSC Resolution 425 and 426.
2. After the 2006 Israel-Hezbollah war, UNIFIL’s mandate was expanded under UNSC Resolution 1701.
3. The Blue Line is a demarcation line drawn by the UN in 2000 between Lebanon and Israel.
4. UNIFIL is headquartered in Tehran, Iran.

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; UNIFIL is headquartered in Naqoura, southern Lebanon, NOT Tehran.)

Q4. With reference to India’s role in UN peacekeeping, consider the following statements:

1. India is one of the largest troop contributors to UN peacekeeping operations.
2. India has contributed to more than 49 UN peacekeeping missions since 1948.
3. India deployed the first all-women Formed Police Unit (FPU) of the UN in Liberia in 2007.
4. India has not had a single peacekeeper casualty in UN missions.

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; more than 180 Indian peacekeepers have died in service of UN missions.)

Answer Key

1. (d), All four statements are correct.
2. (a), Statements 1, 2, 3 are correct; Statement 4 is wrong because Resolution 1325 is a UNSC resolution central to UN peacekeeping.
3. (a), Statements 1, 2, 3 are correct; Statement 4 is wrong because UNIFIL is headquartered in Naqoura, Lebanon.
4. (a), Statements 1, 2, 3 are correct; Statement 4 is wrong because more than 180 Indian peacekeepers have died in UN service.

2. India Wins SAFF Women’s Championship 2026

Source: News on Air

Context:

The Indian Women’s Football Team has won the SAFF Women’s Championship 2026, the 8th edition of the tournament, by defeating Bangladesh 3-1 in the final at the Pandit Jawaharlal Nehru (Fatorda) Stadium, Margao, Goa. This is India’s 6th SAFF Women’s Championship title, and the first since 2019, breaking Bangladesh’s two consecutive titles in 2022 and 2024. The Prime Minister of India has congratulated the team on its win. India’s Sanfida Nongrum was named the MVP, Aveka Singh the Top Scorer, and Panthoi Chanu Elangbam the Best Goalkeeper.

The Tournament

• Event: SAFF Women’s Championship 2026 (8th edition).
• Organising body: South Asian Football Federation (SAFF).
• Host: India.
• Venue: Pandit Jawaharlal Nehru (Fatorda) Stadium, Margao, Goa.
• Frequency: Held approximately every two years.

SAFF Member Nations

• Bangladesh, Bhutan, India, Maldives, Nepal, Pakistan, and Sri Lanka.

The Final

• India (FIFA rank 69) vs Bangladesh (FIFA rank 112).
• Result: India 3-1 Bangladesh.

Practice MCQs

Q1. With reference to the SAFF Women’s Championship 2026, consider the following statements:

1. The 8th edition of the championship was hosted by India at the Pandit Jawaharlal Nehru (Fatorda) Stadium in Margao, Goa.
2. India defeated Bangladesh 3-1 in the final.
3. Pyari Xaxa, Sanfida Nongrum, and Lynda Kom scored the three goals for India in the final.
4. The tournament is held every year.

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 SAFF Women’s Championship is held approximately every two years, not every year.)

Q2. With reference to the SAFF Women’s Championship history, consider the following statements:

1. India won the first five consecutive editions from 2010 to 2019.
2. Bangladesh won the 2022 and 2024 editions before India reclaimed the title in 2026.
3. Nepal has finished as runners-up six times in the tournament.
4. India’s 2026 title is its 6th overall in the championship.

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 individual awards in the SAFF Women’s Championship 2026, consider the following statements:

1. Sanfida Nongrum of India was named the Most Valuable Player (MVP).
2. Aveka Singh of India was the top scorer with 4 goals.
3. Panthoi Chanu Elangbam of India was named the Best Goalkeeper.
4. Nepal received the Fair Play Award.

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 football’s governing bodies, consider the following statements:

1. The South Asian Football Federation (SAFF) is the regional governing body for football in South Asia, founded in 1997.
2. SAFF is headquartered in Dhaka, Bangladesh.
3. The Asian Football Confederation (AFC) is the continental governing body of football in Asia.
4. The All India Football Federation (AIFF) governs football in India and is affiliated to FIFA and AFC.

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. (c), Statements 1, 2, 3 are correct; Statement 4 is wrong because the tournament is held approximately every two years.
2. (d), All four statements are correct.
3. (d), All four statements are correct.
4. (d), All four statements are correct.

Exam Relevance

Exam	Relevance
UPSC Prelims	GS Paper I on Sports (SAFF, AIFF, FIFA); GS Paper II on Regional groupings (SAFF)
UPSC Mains	GS Paper I on Sports and Women’s Empowerment; GS Paper II on Regional cooperation
BPSC and State PCS	Sports, Current Affairs
Banking and NABARD	General Awareness

3. e-Jagriti Platform Wins Silver Award at National Awards for e-Governance 2026

Source: News on Air

Context:

The Department of Consumer Affairs’ flagship AI-powered e-Jagriti platform has won the prestigious Silver Award at the National Awards for e-Governance 2026. Launched on 1 January 2025, e-Jagriti is an AI-enabled, paperless core portal that consolidates consumer dispute redressal across India into a single virtual environment. By merging four legacy systems, the platform aims to clear case backlogs, enable online filing and virtual hearings, and allow even NRIs to file consumer cases from abroad.

The Recognition

• Award: Silver Award at the National Awards for e-Governance 2026.
• Awardee: e-Jagriti Platform.
• Ministry: Department of Consumer Affairs, under the Ministry of Consumer Affairs, Food & Public Distribution.

The Platform

• Launched on: 1 January 2025.
• Nature: AI-enabled, paperless, cloud-based consumer dispute platform.
• Coverage: NCDRC and 35 State Commissions across India.
• Removes: The need for physical presence and paper documents.

What is e-Jagriti?

• A single, unified, digital portal for filing, tracking, and resolving consumer cases across India.
• Operates under the Consumer Protection Act, 2019.
• Uses AI, video conferencing, and cloud technology to modernise consumer justice.
• Tries to clear case backlogs, improve access, and reduce cost for consumers.

Key Terms

• e-Jagriti Platform: A unified, AI-powered digital portal for filing, tracking, and resolving consumer disputes across India.
• National Consumer Disputes Redressal Commission (NCDRC): The apex consumer redressal body in India, located in New Delhi.
• State Commissions: State-level consumer redressal bodies, with jurisdiction up to ₹2 crore.
• District Commissions: District-level consumer redressal bodies, with jurisdiction up to ₹50 lakh.
• CCPA (Central Consumer Protection Authority): A regulator established under the Consumer Protection Act, 2019, with powers to investigate, recall products, and act against misleading ads.
• Consumer Protection Act, 2019: The modern Indian law for consumer rights and dispute resolution, replacing the 1986 Act.
• Bharat Kosh, PayGov, SBI ePay: Government payment gateways used for secure digital payments to government departments.
• National Awards for e-Governance (NAeG): India’s premier awards for excellence in digital governance, given since 2003 by DARPG and MeitY.
• OCMS, e-Daakhil, NCDRC CMS, CONFONET: Earlier IT systems used by consumer commissions, now integrated into e-Jagriti.

Practice MCQs

Q1. With reference to the e-Jagriti Platform, consider the following statements:

1. e-Jagriti was launched by the Department of Consumer Affairs on 1 January 2025.
2. It is an AI-enabled, paperless, cloud-based platform for consumer dispute redressal.
3. It has merged four legacy systems: OCMS, e-Daakhil, NCDRC CMS, and CONFONET.
4. It covers only the National Consumer Disputes Redressal Commission (NCDRC) and excludes the State Commissions.

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 platform covers the NCDRC and 35 State Commissions, NOT only the NCDRC.)

Q2. With reference to the features of the e-Jagriti Platform, consider the following statements:

1. The platform includes AI chatbots, voice-to-text transcription, and dashboards for tracking cases.
2. The platform supports filing and resolution of consumer disputes by NRIs from abroad.
3. The platform is integrated with payment gateways like Bharat Kosh, PayGov, and SBI ePay.
4. The platform won the Gold Award at the National Awards for e-Governance 2026.

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 platform won the Silver Award, NOT the Gold Award.)

Q3. With reference to the Consumer Protection Act, 2019, consider the following statements:

1. The Consumer Protection Act, 2019 replaced the Consumer Protection Act, 1986.
2. The Act establishes the Central Consumer Protection Authority (CCPA) as a regulator.
3. The Act introduces the concepts of product liability, unfair contracts, and misleading advertisements.
4. The Act has no provisions related to e-commerce transactions.

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 Consumer Protection Act, 2019 explicitly recognises e-commerce transactions.)

Q4. With reference to the three-tier consumer dispute redressal mechanism in India, consider the following statements:

1. District Commissions handle complaints involving values up to ₹50 lakh.
2. State Commissions handle complaints with values between ₹50 lakh and ₹2 crore.
3. The National Consumer Disputes Redressal Commission (NCDRC) handles complaints with values above ₹2 crore.
4. The Reserve Bank of India is the apex consumer dispute redressal body in 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; the NCDRC, not the RBI, is the apex consumer redressal body in India.)

Answer Key

1. (c), Statements 1, 2, 3 are correct; Statement 4 is wrong because the platform covers both the NCDRC and 35 State Commissions.
2. (c), Statements 1, 2, 3 are correct; Statement 4 is wrong because the platform won the Silver Award, not the Gold Award.
3. (a), Statements 1, 2, 3 are correct; Statement 4 is wrong because the Act explicitly recognises e-commerce transactions.
4. (a), Statements 1, 2, 3 are correct; Statement 4 is wrong because the NCDRC, not the RBI, is the apex consumer redressal body.

4. Union Minister Piyush Goyal Launches BHAVYA Portal

Source: News on Air

Context:

The Union Minister of Commerce and Industry has launched the BHAVYA Portal in New Delhi, formally operationalising the Cabinet-approved ₹33,660 crore Bharat Audyogik Vikas Yojana (BHAVYA) scheme. The scheme aims to build 100 world-class, investment-ready industrial parks across India. The BHAVYA Portal acts as a single-window digital platform for state project submissions, construction tracking, and investor mapping, while the scheme is implemented through a challenge-based, tiered, public-private partnership model with the National Industrial Corridor Development Corporation (NICDC) as the nodal execution body.

The Scheme and the Portal

• Scheme: Bharat Audyogik Vikas Yojana (BHAVYA).
• Total outlay: ₹33,660 crore (Cabinet-approved).
• Aim: Build 100 world-class industrial parks across India.
• Portal: BHAVYA Portal, a single-window digital management platform.
• Launched by: Union Minister of Commerce and Industry.
• Ministry: Ministry of Commerce and Industry.
• Nodal execution body: National Industrial Corridor Development Corporation (NICDC).

The Funding Model

• State Governments: Provide the physical land.
• Central Government (through NICDC): Funds the primary infrastructure.
• Sharing pattern: 51:49 joint partnership model.

Key Features of the Parks

• Plug-and-play industrial plots with ready infrastructure.
• Special spaces for deep-tech, start-ups, R&D labs, and Global Capability Centres (GCCs).
• In-house quality testing labs, in partnership with BIS, Export Inspection Agency (EIA), and FSSAI.
• Global expatriate enclaves for investors from Japan, Singapore, South Korea, Switzerland, including housing and social infrastructure.

What is the National Industrial Corridor Development Corporation (NICDC)?

• A special purpose vehicle (SPV) of the Government of India for developing industrial corridors.
• Earlier known as DMICDC (Delhi-Mumbai Industrial Corridor Development Corporation).
• Implements major industrial corridor projects like the Delhi-Mumbai, Chennai-Bengaluru, Amritsar-Kolkata, Bengaluru-Mumbai, Vizag-Chennai, and others.
• Acts as the nodal agency for greenfield industrial city development.

What Are Global Capability Centres (GCCs)?

• Captive offshore centres set up by global multinational corporations (MNCs) in India.
• Perform functions like R&D, IT services, finance, HR, analytics, AI, engineering, and design.
• India is the world’s leading hub for GCCs, with over 1,500 centres employing about 1.66 million professionals.
• GCCs are a major source of high-skilled jobs and FDI.

Practice MCQs

Q1. With reference to the Bharat Audyogik Vikas Yojana (BHAVYA), consider the following statements:

1. The scheme has a total outlay of ₹33,660 crore.
2. It aims to develop 100 world-class industrial parks across India.
3. The National Industrial Corridor Development Corporation (NICDC) is the nodal execution body.
4. The scheme is administered by the Ministry of External Affairs.

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 scheme is administered by the Ministry of Commerce and Industry, NOT the Ministry of External Affairs.)

Q2. With reference to the BHAVYA Portal, consider the following statements:

1. The portal acts as a single-window digital management platform for India’s new industrial parks.
2. It enables state project submissions, real-time construction tracking, and investor mapping.
3. The scheme uses a challenge-based selection model where states must submit DPRs to win projects.
4. States receive funds automatically without any project proposal under the BHAVYA scheme.

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; states must compete and submit DPRs under a challenge-based model; they do not receive funds automatically.)

Q3. With reference to the design of the BHAVYA industrial parks, consider the following statements:

1. The parks are tiered by region: 25 acres for hilly regions and UTs, 100-500 acres for mid-sized states, and up to 1,000 acres for urban peripheries.
2. The funding follows a 51:49 joint partnership model, with the Centre funding primary infrastructure and the State providing land.
3. The parks will feature plug-and-play industrial plots with ready infrastructure.
4. The parks will include specialised spaces for deep-tech, start-ups, R&D labs, and Global Capability Centres (GCCs).

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 related institutions and concepts, consider the following statements:

1. The Bureau of Indian Standards (BIS) is India’s national standards body.
2. The Food Safety and Standards Authority of India (FSSAI) regulates food safety and standards.
3. Global Capability Centres (GCCs) are captive offshore centres of global MNCs in India, with India being the world’s leading hub.
4. The NICDC is the regulator of the Indian capital market.

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 NICDC is an SPV for industrial corridor development, NOT a capital market regulator. SEBI is the capital market regulator.)

Answer Key

1. (c), Statements 1, 2, 3 are correct; Statement 4 is wrong because the scheme is administered by the Ministry of Commerce and Industry, not the Ministry of External Affairs.
2. (c), Statements 1, 2, 3 are correct; Statement 4 is wrong because states must compete through DPRs, not receive funds automatically.
3. (d), All four statements are correct.
4. (a), Statements 1, 2, 3 are correct; Statement 4 is wrong because the NICDC is an SPV for industrial corridor development, not a capital market regulator.

5. 10th anniversary of the Pradhan Mantri Surakshit Matritva Abhiyan (PMSMA)

Source: PIB

Context

Two separate government initiatives in the news. First, the Ministry of Health and Family Welfare has begun nationwide celebrations to mark the 10th anniversary of the Pradhan Mantri Surakshit Matritva Abhiyan (PMSMA) under the theme “10 Years of PMSMA, A Decade of Care”. The scheme, launched on 9 June 2016, offers free, assured, comprehensive antenatal care (ANC) to all pregnant women. Second, the Union Minister of State for Environment, Forest and Climate Change has launched the NZP Saathi App and self-ticketing kiosks at the National Zoological Park (NZP), New Delhi, to make zoo visits smart, app-guided, and cashless.

PRADHAN MANTRI SURAKSHIT MATRITVA ABHIYAN (PMSMA)

Key Facts

• Scheme: Pradhan Mantri Surakshit Matritva Abhiyan (PMSMA).
• Launched on: 9 June 2016.
• Launched by: PM Narendra Modi.
• Ministry: Ministry of Health and Family Welfare (MoHFW).
• 10th anniversary theme: “10 Years of PMSMA, A Decade of Care”.
• Core service: Free, assured, comprehensive antenatal care (ANC).
• Date of service: 9th of every month, all government facilities conduct special PMSMA sessions.
• Single-window package: Clinical check-ups, counselling, medicines, lab tests, and one ultrasound scan in a single visit.

About e-PMSMA

• Name-based line listing of pregnant women, especially high-risk cases.
• Real-time digital monitoring through online portals and mobile apps.
• Facilities can hold up to 4 sessions per month for extended coverage.
• 45-day healthy outcome window tracks both mother and newborn.
• Transport assistance under JSSK (Janani Shishu Suraksha Karyakaram).

What is RMNCH+A?

• A strategic approach of the MoHFW to address Reproductive, Maternal, Newborn, Child and Adolescent Health in a continuum.
• Focuses on interventions across the life cycle, from adolescence to motherhood, newborns, and children.

What is JSSK?

• Janani Shishu Suraksha Karyakaram, launched in 2011.
• Provides free delivery, free C-section, free drugs, free diagnostics, free diet, free blood transfusion, and free transport for pregnant women and sick newborns.
• Designed to eliminate out-of-pocket spending on maternal and newborn care.

Practice MCQs (Item 1)

Q1. With reference to the Pradhan Mantri Surakshit Matritva Abhiyan (PMSMA), consider the following statements:

1. PMSMA was launched on 9 June 2016 by PM Narendra Modi.
2. The scheme provides free assured comprehensive antenatal care (ANC) on the 9th of every month.
3. The scheme uses a green sticker for normal pregnancies and a red sticker for high-risk pregnancies on the MCP card.
4. The scheme is implemented by the Ministry of External Affairs.

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 scheme is implemented by the Ministry of Health and Family Welfare, NOT the Ministry of External Affairs.)

Q2. With reference to PMSMA and related maternal health initiatives, consider the following statements:

1. PMSMA is a pillar of the Continuum of Care approach under the RMNCH+A strategy.
2. JSSK (Janani Shishu Suraksha Karyakaram), launched in 2011, offers free transport, drugs, diagnostics, and delivery services.
3. e-PMSMA includes name-based line listing and real-time digital monitoring of high-risk pregnancies.
4. India’s Maternal Mortality Ratio (MMR) has been falling and stands around 87 per 1,00,000 live births.

How many of the above statements are correct?

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

Answer Key (Item 1)

1. (c), Statements 1, 2, 3 are correct; Statement 4 is wrong because the scheme is implemented by the MoHFW.
2. (d), All four statements are correct.

6. Land Port Management System (LPMS)

Source: Times of India

Context

The Union Home Minister of India has launched the Land Port Management System (LPMS) in New Delhi, a centralised electronic platform to digitise and unify operations across India’s international land borders. Developed by the Land Ports Authority of India (LPAI), the platform aims to bring land ports on par with airports and seaports in digital efficiency, while supporting trade facilitation, secure border management, and the Viksit Bharat 2047 vision. The LPMS offers single-window registration, advance slot booking, BI analytics, ICEGATE customs integration, automated security operations, warehouse management, and unified digital payments.

The Platform

• Name: Land Port Management System (LPMS).
• Launched by: Union Home Minister of India.
• Developer: Land Ports Authority of India (LPAI).
• Nature: Centralised electronic platform to digitise and unify operations at India’s international land borders.

Why is LPMS Needed?

• India shares long land borders with multiple neighbours, with active trade through specific Integrated Check Posts (ICPs).
• Airports and seaports already use advanced digital systems, but land borders have lagged.
• This lag has caused delays, paperwork burden, congestion at borders, and weaker data trails for trade and security.

Key Features of the System

• Unified Onboarding (SRR): A Single Registration Request (SRR) system, so stakeholders submit information only once.
• Predictive Slot and Dwell Management: Advance slot booking based on real-time capacity at ICPs, plus wait-time forecasting.
• Automated Security and Gate Operations: Digitally records shipment details, transport manifests, and gate movements, integrated with Full Body Truck Scanners.
• Business Intelligence (BI) Analytics: Dashboards with real-time insights on cargo, containers, transit, and efficiency.
• Direct ICEGATE Integration: Auto-filing of Shipping Bills and Bills of Entry for customs.
• Yard and Warehouse Management: Efficient space allocation, reduced congestion, and better cargo handling.
• Unified Single-Window Payments: Customs duties, parking, weighbridge, and terminal charges in a single digital gateway.

What is the Land Ports Authority of India (LPAI)?

• A statutory body under the Ministry of Home Affairs.
• Set up under the Land Ports Authority of India Act, 2010.
• Responsible for the planning, development, operation, and management of Integrated Check Posts (ICPs) along India’s international land borders.
• Similar in role to Airports Authority of India (AAI) for airports and Major Port Authorities for seaports.
• Headquartered in New Delhi.

What is an Integrated Check Post (ICP)?

• A modernised border facility that brings together various agencies under one roof for smoother passenger and cargo movement.
• Typically includes Customs, Immigration, BSF/SSB, plant and animal quarantine, warehousing, currency exchange, banking, and other services.
• Replaces scattered, ad hoc arrangements of past land border posts.
• Major ICPs include:
  • Attari (India-Pakistan).
  • Petrapole (India-Bangladesh).
  • Agartala (India-Bangladesh).
  • Raxaul (India-Nepal).
  • Jogbani (India-Nepal).
  • Moreh (India-Myanmar).
  • Phuentsholing/Jaigaon (India-Bhutan).

What is ICEGATE?

• The Indian Customs Electronic Data Interchange Gateway (ICEGATE).
• An online portal of the Central Board of Indirect Taxes and Customs (CBIC).
• Allows traders and customs agents to file customs documents like Shipping Bills and Bills of Entry electronically.
• LPMS will link directly with ICEGATE, reducing duplication and speeding up customs clearance.

Practice MCQs

Q1. With reference to the Land Port Management System (LPMS), consider the following statements:

1. The LPMS has been developed by the Land Ports Authority of India (LPAI).
2. The platform is designed to digitise and unify operations across India’s international land borders.
3. It uses a Single Registration Request (SRR) system where stakeholders submit information only once.
4. The LPMS is administered by the Ministry of Civil Aviation.

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 LPAI is under the Ministry of Home Affairs, NOT the Ministry of Civil Aviation.)

Q2. With reference to the features of the LPMS, consider the following statements:

1. It enables advance slot booking based on real-time capacity at Integrated Check Posts (ICPs).
2. It integrates with Full Body Truck Scanners for cargo and security monitoring.
3. It connects directly to ICEGATE for automatic submission of Shipping Bills and Bills of Entry.
4. The platform offers a unified single-window digital payment gateway for customs and terminal charges.

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 Land Ports Authority of India (LPAI) and Integrated Check Posts (ICPs), consider the following statements:

1. LPAI is a statutory body set up under the Land Ports Authority of India Act, 2010.
2. LPAI functions under the Ministry of Home Affairs.
3. Attari (India-Pakistan), Petrapole (India-Bangladesh), and Raxaul (India-Nepal) are among India’s important ICPs.
4. ICPs are operated entirely by private logistics firms, with no role for government agencies.

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; ICPs are operated through multiple government agencies like Customs, Immigration, and BSF/SSB, NOT private logistics firms alone.)

Q4. With reference to India’s broader logistics and trade-facilitation framework, consider the following statements:

1. ICEGATE is the online portal of the CBIC for electronic filing of customs documents.
2. PM Gati Shakti is a GIS-based digital platform for integrated infrastructure planning across ministries.
3. The National Logistics Policy aims to reduce logistics costs and improve efficiency.
4. The LPMS is fully unrelated to India’s broader logistics and trade-facilitation 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; the LPMS is closely aligned with India’s broader logistics, trade facilitation, and digital governance push.)

Answer Key

1. (c), Statements 1, 2, 3 are correct; Statement 4 is wrong because LPAI is under the Ministry of Home Affairs.
2. (d), All four statements are correct.
3. (a), Statements 1, 2, 3 are correct; Statement 4 is wrong because ICPs are operated by government agencies, not private logistics firms alone.
4. (a), Statements 1, 2, 3 are correct; Statement 4 is wrong because the LPMS is closely aligned with India’s broader logistics framework.

Banking/Finance

1. RBI Opens a USD-Rupee Swap Window at Fixed 1.5 Per Cent Cost

Source: The Economic Times

Context

The Reserve Bank of India (RBI) has formally opened a dollar-rupee swap window for banks at a fixed cost of 1.5 per cent per annum (compounded semi-annually), with maturities up to 5 years. This is the operational follow-through to Governor Sanjay Malhotra’s monetary policy statement last week, where the RBI announced support for hedging costs. The facility will help PSUs raising External Commercial Borrowings (ECBs) and banks raising Overseas Foreign Currency Borrowings (OFCBs) with minimum 3-year maturity. The window is available for ECBs drawn till 31 December 2026, when market hedging costs have risen to 3.5 to 4 per cent.

The Swap Window

• Issued by: Reserve Bank of India.
• Effective: Following the June 2026 monetary policy statement.
• Type: USD-Rupee buy-sell swap.
• Cost: Fixed at 1.5 per cent per annum, compounded semi-annually.
• Available maturities: Up to 5 years.
• Minimum maturity: 3 years.
• Window for PSU ECBs: Till 31 December 2026.

Who Can Use the Window?

• Public Sector Undertakings (PSUs) raising External Commercial Borrowings (ECBs).
• Banks raising Overseas Foreign Currency Borrowings (OFCBs).
• Available also for undrawn portions of existing ECBs.

How a Swap Works in Simple Steps

• A bank wants to use dollar funds (raised through ECBs or OFCBs) for rupee-denominated activity in India.
• The bank sells dollars to the RBI today and gets rupees in exchange.
• The bank commits to buy back the same amount of dollars from the RBI at the end of the swap period (up to 5 years).
• The buy-back rate is pre-fixed, so the bank is fully hedged against rupee depreciation.
• The cost of this hedge (now 1.5 per cent, against market 3.5 to 4 per cent) is what makes the facility attractive.

Why is This So Important Right Now?

• The rupee has been weakening.
• FPI outflows have hit Indian markets.
• The RBI wants more dollars flowing into India to stabilise the rupee and build forex reserves.
• Cheaper hedging lets PSUs and banks raise more foreign currency funding, helping the balance of payments.

Key Terms

• Foreign Exchange Swap (FX Swap): A contract where two parties exchange currencies now and agree to reverse the exchange at a later date at a pre-agreed rate.
• Hedging: The process of protecting against unfavourable movements in exchange rates, interest rates, or commodity prices, using financial instruments.
• Hedging Cost: The price paid for hedging protection, usually a percentage per annum.
• External Commercial Borrowings (ECBs): Loans in foreign currency raised by Indian entities from foreign lenders, subject to RBI rules.
• Overseas Foreign Currency Borrowings (OFCBs): A special category of foreign currency borrowings by banks to fund overseas operations or lending.
• PSU (Public Sector Undertaking): A government-owned business enterprise in India.
• Compounded Semi-Annually: A way of calculating interest where the interest is added to the principal twice a year, and future interest is calculated on the new total.
• FCNR(B): Foreign Currency Non-Resident (Bank) account, a foreign currency fixed deposit held in India by NRIs and OCIs.
• Forex Reserves: A country’s stock of foreign currency, gold, IMF reserve position, and SDRs, held by the central bank.
• Balance of Payments (BoP): A country’s complete record of economic transactions with the rest of the world.

Practice MCQs

Q1. With reference to the RBI’s USD-Rupee Swap Facility, consider the following statements:

1. The swap will be offered at a fixed rate of 1.5 per cent per annum, compounded semi-annually.
2. The facility is available for PSU ECBs and bank OFCBs with a minimum average maturity of three years.
3. The market hedging cost was about 3.5 to 4 per cent at the time of the announcement.
4. The window for PSU ECBs is available till 31 December 2026.

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 ECBs and OFCBs, consider the following statements:

1. ECBs are foreign currency loans raised by Indian entities from foreign lenders, subject to RBI rules.
2. OFCBs are a category of foreign currency borrowings by banks to fund overseas operations or lending.
3. The RBI’s swap window covers PSU ECBs and bank OFCBs with at least 3-year maturity.
4. ECBs and OFCBs are exclusively governed by SEBI, not the RBI.

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; ECBs and OFCBs are governed by the RBI, NOT SEBI.)

Q3. With reference to the macroeconomic rationale for the swap window, consider the following statements:

1. The package aims to make foreign currency borrowing cheaper for Indian entities.
2. The lower hedging cost can support larger foreign currency inflows into India.
3. Larger foreign currency inflows can support the rupee and forex reserves.
4. The RBI has set a formal target of USD 100 billion in inflows under this swap window alone.

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 RBI has not set a formal target of USD 100 billion under this window.)

Q4. With reference to the RBI’s broader 5-pronged package and government tax measures, consider the following statements:

1. The package includes a concessional FX swap for PSU ECBs and full hedging support for 3- to 5-year FCNR(B) deposits.
2. The Fully Accessible Route (FAR) has been expanded to include all new 15-, 30-, and 40-year G-secs.
3. The government has scrapped the 20 per cent withholding tax on G-sec interest and the 12.5 per cent long-term capital gains tax for foreign investors in government bonds.
4. The export realisation period has been extended from 9 months to 15 months.

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 export realisation period has been restored to 9 months, NOT extended to 15 months.)

Answer Key

1. (d), All four statements are correct.
2. (a), Statements 1, 2, 3 are correct; Statement 4 is wrong because ECBs and OFCBs are governed by the RBI, not SEBI.
3. (a), Statements 1, 2, 3 are correct; Statement 4 is wrong because the RBI has not set a formal target.
4. (a), Statements 1, 2, 3 are correct; Statement 4 is wrong because the export realisation period has been restored to 9 months.

2. RBI Imposes ₹41.80 Lakh Penalty on Canara Bank for KYC and Account Classification Lapses

Context

The Reserve Bank of India (RBI) has imposed a penalty of ₹41.80 lakh on Canara Bank, a public sector lender, following a supervisory review that found critical lapses in Know Your Customer (KYC) norms and account classification. The penalty has been imposed under the Banking Regulation Act, 1949. The lapses were identified during the Statutory Inspection for Supervisory Evaluation (ISE 2025), which audited the bank’s operations as of 31 March 2025.

Key Facts

• Penalty amount: ₹41.80 lakh.
• Imposed by: Reserve Bank of India (RBI).
• Bank: Canara Bank (a public sector lender).
• Legal provisions used: Section 47A(1)(c) read with Sections 46(4)(i) and 51(1) of the Banking Regulation Act, 1949.
• Inspection: Statutory Inspection for Supervisory Evaluation (ISE 2025).

The Specific Lapses Identified

• KYC lapse: Canara Bank failed to upload KYC records of several customers to the Central KYC Records Registry (CKYCR) within the prescribed timelines.
• Account classification lapse: The bank misclassified certain accounts as inoperative, even though the last customer-induced transaction was less than one year old in those accounts.

What is the Banking Regulation Act, 1949?

• The main law that governs banking in India.
• Empowers the RBI to regulate, supervise, and inspect banks.
• Provides the legal framework for licensing, capital, governance, audit, and penalties in the banking sector.
• The RBI uses Section 47A of the Act to impose monetary penalties on banks for violations.

What is the Statutory Inspection for Supervisory Evaluation (ISE)?

• A routine on-site inspection of banks by the RBI.
• Audits a bank’s operations, governance, risk management, and regulatory compliance as on a specific reference date.
• Forms the basis for supervisory ratings and enforcement action if needed.

What is Know Your Customer (KYC)?

• A process used by banks and financial institutions to verify the identity and address of their customers.
• Mandatory under the Prevention of Money Laundering Act, 2002 (PMLA) and RBI rules.
• Documents commonly accepted include Aadhaar, PAN, Voter ID, driving licence, and passport.
• Aims to prevent money laundering, terror financing, and identity fraud.

What is the Central KYC Records Registry (CKYCR)?

• A central database of KYC records of customers across the financial sector.
• Maintained by the Central Registry of Securitisation Asset Reconstruction and Security Interest of India (CERSAI).
• Banks, NBFCs, insurance companies, mutual funds, and other regulated entities are required to upload KYC records of customers to CKYCR within prescribed timelines.
• Avoids the need for multiple KYC submissions across the financial sector.
• A customer’s CKYC number can be used across multiple institutions.

What is an “Inoperative Account”?

• An account where no customer-induced transaction has happened for a specific period.
• Under RBI rules:
  • A savings or current account becomes inoperative if there has been no customer-induced transaction for more than 2 years.
  • System-generated entries like bank-credited interest or charges do not count as customer-induced transactions.
• Banks must review accounts annually and classify them correctly.
• Misclassification can inconvenience customers and lead to wrongful freezing of accounts.

RBI’s Wider Use of Section 47A

• The RBI regularly uses Section 47A of the Banking Regulation Act to impose monetary penalties on banks, NBFCs, and co-operative banks for:
  • KYC and AML lapses.
  • Cybersecurity lapses.
  • Credit and lending rule violations.
  • Failure to follow customer service standards.
• These penalties are part of the RBI’s supervisory toolkit, alongside directions, restrictions, and licence cancellations.

About Canara Bank

• A public sector bank headquartered in Bengaluru, Karnataka.
• Founded in 1906 at Mangaluru by Ammembal Subba Rao Pai.
• One of the oldest commercial banks in India.
• Nationalised in 1969.
• One of India’s largest PSBs by branch network and deposit base.
• After the 2020 merger, Syndicate Bank was merged with Canara Bank.

Practice MCQs

Q1. With reference to the RBI’s recent penalty on Canara Bank, consider the following statements:

1. The penalty of ₹41.80 lakh has been imposed under the Banking Regulation Act, 1949.
2. The penalty followed a Statutory Inspection for Supervisory Evaluation (ISE 2025) audit of operations as of 31 March 2025.
3. The lapses included a failure to upload KYC records to the Central KYC Records Registry (CKYCR) within prescribed timelines.
4. The penalty was imposed under the Companies Act, 2013.

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 penalty was imposed under the Banking Regulation Act, 1949, NOT the Companies Act, 2013.)

Q2. With reference to KYC and the Central KYC Records Registry (CKYCR), consider the following statements:

1. KYC is a process used by banks and financial institutions to verify the identity and address of customers.
2. KYC is mandatory under the Prevention of Money Laundering Act, 2002 and RBI rules.
3. The Central KYC Records Registry (CKYCR) is maintained by CERSAI.
4. The CKYCR is a state-level database, separately maintained by each State Government.

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; CKYCR is a central database, maintained by CERSAI under the Government of India, NOT a state-level database.)

Q3. With reference to “inoperative” accounts under RBI rules, consider the following statements:

1. A savings or current account becomes inoperative if there has been no customer-induced transaction for more than 2 years.
2. System-generated entries like bank-credited interest or charges do not count as customer-induced transactions.
3. Misclassification of accounts as inoperative can wrongfully restrict customer access to funds.
4. The classification of accounts as inoperative is decided by the customer alone, with no role for the bank.

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 classification of accounts as inoperative is done by the bank, based on RBI rules, not by the customer alone.)

Q4. With reference to the regulatory framework for banks in India, consider the following statements:

1. The Banking Regulation Act, 1949 empowers the RBI to regulate, supervise, and inspect banks.
2. Section 47A of the Banking Regulation Act allows the RBI to impose monetary penalties on banks for specified violations.
3. Canara Bank is a public sector bank founded in 1906 at Mangaluru by Ammembal Subba Rao Pai.
4. The RBI was set up under the Banking Regulation Act, 1949.

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 RBI was set up under the Reserve Bank of India Act, 1934, NOT the Banking Regulation Act, 1949.)

Answer Key

1. (a), Statements 1, 2, 3 are correct; Statement 4 is wrong because the penalty was imposed under the Banking Regulation Act, 1949.
2. (a), Statements 1, 2, 3 are correct; Statement 4 is wrong because CKYCR is a central database maintained by CERSAI.
3. (a), Statements 1, 2, 3 are correct; Statement 4 is wrong because the classification is done by the bank, not the customer alone.
4. (a), Statements 1, 2, 3 are correct; Statement 4 is wrong because the RBI was set up under the RBI Act, 1934.

3. India 5th Largest Military Spender at USD 92.1 Billion: SIPRI

Context:

The Stockholm International Peace Research Institute (SIPRI) has released its annual SIPRI Yearbook 2026: Armaments, Disarmament and International Security. The report ranks India as the world’s 5th-largest military spender in 2025, with defence expenditure of USD 92.1 billion (up 8.9 per cent from 2024). It also estimates that India’s nuclear warheads rose from 180 in 2025 to 190 as of January 2026. Global military expenditure reached USD 2.9 trillion in 2025, the 11th consecutive year of increase, while nine nuclear-armed states together held about 12,187 nuclear weapons.

India’s Military Profile (2025)

• Rank: 5th-largest military spender globally.
• Defence expenditure: USD 92.1 billion.
• Year-on-year growth: 8.9 per cent vs 2024.
• Nuclear arsenal: 180 warheads in 2025, rising to 190 as of January 2026.

Top Global Military Spenders (2025)

• 1. USA: USD 954 billion.
• 2. China: USD 336 billion.
• 3. Russia: USD 190 billion.
• 4 and 5: India (USD 92.1 billion) features at 5th, with Saudi Arabia or another country in the 4th slot (the article focuses on India’s position).

India’s Position on Nuclear Weapons

• India follows a doctrine of No First Use (NFU) (with some debate in recent years).
• Has a credible minimum deterrent.
• Nuclear Command Authority (NCA) is the apex body for nuclear weapons decisions, chaired by the Prime Minister.
• Strategic Forces Command (SFC) is responsible for operational control of India’s strategic nuclear forces.
• India is not a party to the Nuclear Non-Proliferation Treaty (NPT) or the Comprehensive Nuclear-Test-Ban Treaty (CTBT), but maintains a voluntary moratorium on nuclear testing since 1998.

What is SIPRI?

• Stockholm International Peace Research Institute, headquartered in Stockholm, Sweden.
• An independent international institute founded in 1966, dedicated to research on conflict, armaments, arms control, and disarmament.
• Best known for:
  • SIPRI Yearbook (flagship publication).
  • Annual data on global military expenditure.
  • Arms transfer data.
  • Trends in nuclear forces.

Practice MCQs

Q1. With reference to the SIPRI Yearbook 2026, consider the following statements:

1. India was the world’s 5th-largest military spender in 2025.
2. India’s defence expenditure reached USD 92.1 billion in 2025, an 8.9 per cent rise over 2024.
3. India’s estimated nuclear warheads rose from 180 in 2025 to 190 as of January 2026.
4. SIPRI is headquartered in Geneva, Switzerland.

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; SIPRI is headquartered in Stockholm, Sweden, NOT Geneva, Switzerland.)

Q2. With reference to global military expenditure trends in 2025, consider the following statements:

1. Global military expenditure reached about USD 2.9 trillion in 2025.
2. This represents about 2.5 per cent of the world’s GDP.
3. Global military expenditure increased for the 11th consecutive year.
4. The United States, China, and Russia were the top three military spenders globally.

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 global nuclear arsenals as of January 2026, consider the following statements:

1. There are nine nuclear-armed states: USA, Russia, UK, France, China, India, Pakistan, North Korea, and Israel.
2. Together, they hold about 12,187 nuclear weapons.
3. About 9,745 of these are in military stockpiles for potential use.
4. India has officially signed both the NPT and CTBT.

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 not a party to either the NPT or the CTBT, but maintains a voluntary moratorium on nuclear testing since 1998.)

Q4. With reference to India’s nuclear doctrine and institutions, consider the following statements:

1. India’s nuclear doctrine includes the principle of No First Use (NFU).
2. The Nuclear Command Authority (NCA) is the apex body for nuclear weapons decisions in India, chaired by the Prime Minister.
3. The Strategic Forces Command (SFC) is responsible for the operational control of India’s strategic nuclear forces.
4. India is recognised as a Nuclear Weapon State under the NPT.

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 not recognised as a Nuclear Weapon State under the NPT, since only the USA, Russia, UK, France, and China are recognised as such.)

Answer Key

1. (c), Statements 1, 2, 3 are correct; Statement 4 is wrong because SIPRI is headquartered in Stockholm, Sweden.
2. (d), All four statements are correct.
3. (a), Statements 1, 2, 3 are correct; Statement 4 is wrong because India is not a party to the NPT or the CTBT.
4. (a), Statements 1, 2, 3 are correct; Statement 4 is wrong because India is not recognised as a Nuclear Weapon State under the NPT.

3. RBI Recognises Sahamati Foundation as Self-Regulatory Organisation (SRO) for Account Aggregator (AA) Ecosystem

Source: BS

Context

The Reserve Bank of India (RBI) has formally recognised the Sahamati Foundation as the Self-Regulatory Organisation (SRO) for India’s Account Aggregator (AA) ecosystem. This creates a formal, industry-led governance framework for India’s consent-based financial data sharing network, which now connects 1,120 regulated entities, 17 operational AAs, over 294 million linked accounts, over 450 million consent requests, and over 290 million monthly data-sharing transactions. The recognition gives Sahamati a clear mandate to set industry standards, promote best practices, address operational challenges, and strengthen compliance.

The Recognition

• Recognising authority: Reserve Bank of India (RBI).
• Recognised entity: Sahamati Foundation.
• Role: Self-Regulatory Organisation (SRO) for India’s Account Aggregator (AA) ecosystem.

What Sahamati Will Do

• Act as the representative body for AA ecosystem participants.
• Promote collaboration among financial institutions, AAs, fintech firms, and other stakeholders.
• Help develop industry standards and promote best practices.
• Address operational challenges and strengthen compliance.

What is the Account Aggregator (AA) Framework?

• A consent-based, regulated digital framework in India.
• Enables individuals and businesses to securely share their financial data with authorised institutions via Account Aggregators.
• Built on principles of user consent, purpose limitation, time-bound access, and data minimisation.
• Launched by the RBI under the NBFC-Account Aggregator (NBFC-AA) framework, 2016.
• Live network launched in September 2021.

The Three Key Roles in the AA Ecosystem

• Financial Information Provider (FIP): An entity that holds the user’s data, like a bank, NBFC, mutual fund, insurance company, or pension fund.
• Financial Information User (FIU): An entity that uses the user’s data with consent to provide a service (like a loan, insurance, or investment advice).
• Account Aggregator (AA): A regulated, neutral entity that collects, encrypts, and transmits data from FIPs to FIUs, only with user consent.

What is a Self-Regulatory Organisation (SRO)?

• A non-government organisation recognised by a regulator (like the RBI, SEBI, or IRDAI) to set rules and supervise its industry members.
• It acts as an intermediate layer between the regulator and individual firms.
• It helps:
  • Develop industry standards.
  • Address operational issues.
  • Improve compliance.
  • Provide grievance redressal.
  • Promote best practices.
• Examples in India:
  • FIMMDA for fixed income markets.
  • FEDAI for foreign exchange dealers.
  • MFIN for microfinance institutions.
  • NPCI as a standard setter for retail payments.
  • Sahamati Foundation for the AA ecosystem (newly recognised).

Practice MCQs

Q1. With reference to the recent RBI recognition of Sahamati Foundation, consider the following statements:

1. The RBI has recognised Sahamati Foundation as the Self-Regulatory Organisation (SRO) for India’s Account Aggregator (AA) ecosystem.
2. The SRO will help develop industry standards, promote best practices, and strengthen compliance across the AA ecosystem.
3. Sahamati will act as the representative body for AA participants, including banks, AAs, and fintech firms.
4. The recognition was given by SEBI, not the RBI.

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 recognition is by the RBI, NOT SEBI.)

Q2. With reference to the Account Aggregator (AA) framework, consider the following statements:

1. The AA framework is a consent-based digital framework regulated by the RBI.
2. The framework involves three key roles: Financial Information Provider (FIP), Financial Information User (FIU), and Account Aggregator (AA).
3. The AA acts as a neutral consent manager and transmits encrypted financial data from FIPs to FIUs.
4. The AA framework allows financial institutions to access user data without any user consent.

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 AA framework is strictly consent-based, with no access without explicit user consent.)

Q3. With reference to the scale of India’s AA ecosystem, consider the following statements:

1. The ecosystem comprises about 1,120 regulated entities, including 17 operational AAs.
2. It has enabled over 294 million linked accounts.
3. It has supported over 450 million consent requests and over 290 million monthly data-sharing transactions.
4. The AA framework currently covers only banks, with no participation from mutual funds, insurance companies, or pension funds.

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 AA framework covers banks, mutual funds, insurance companies, pension funds, and NBFCs, NOT only banks.)

Q4. With reference to Self-Regulatory Organisations (SROs) in India’s financial sector, consider the following statements:

1. FIMMDA is an SRO for the fixed income markets.
2. MFIN is an SRO for microfinance institutions.
3. NPCI plays a central role in retail payments standards in India.
4. SROs replace the regulator and have no obligation to follow regulatory rules.

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; SROs operate under the regulator’s oversight, NOT in place of it.)

Answer Key

1. (c), Statements 1, 2, 3 are correct; Statement 4 is wrong because the recognition is by the RBI, not SEBI.
2. (a), Statements 1, 2, 3 are correct; Statement 4 is wrong because the AA framework is strictly consent-based.
3. (a), Statements 1, 2, 3 are correct; Statement 4 is wrong because the AA framework covers banks, mutual funds, insurance companies, pension funds, and NBFCs.
4. (a), Statements 1, 2, 3 are correct; Statement 4 is wrong because SROs operate under the regulator’s oversight.

Exam Relevance

Exam	Relevance
UPSC Prelims	GS Paper II on Statutory and Regulatory bodies (RBI, SRO); GS Paper III on Indian Economy (DPI, AA framework)
UPSC Mains	GS Paper II on Government policies; GS Paper III on Indian Economy, Financial Inclusion, Data Governance
BPSC and State PCS	Economy, Banking, Current Affairs
Banking (RBI Gr B, SBI PO, IBPS, NABARD)	Very high importance, AA framework, SROs, DPI, fintech
RBI Grade B	Core area on banking and DPI
SEBI Grade A and IRDAI Grade A	Financial regulation, SROs, data governance

Agriculture

1. Urea Subsidy Reform Long Overdue

Source: Business Standard

Context

The urea subsidy is the last unreformed subsidy in India’s welfare and farm support system, the editorial argues. The Department of Fertilisers is now seeking a doubling of the Budget allocation, citing the spike in petrochemical prices after the blocking of the Strait of Hormuz. India’s fertiliser subsidy could rise to ₹3.4 trillion in FY27, well above the previous peak of ₹2.5 trillion in FY23 (post the Russia-Ukraine war). The editorial calls for a shift to a nutrient-based, direct-benefit subsidy regime, where benefits go to farmers, not fertiliser companies, addressing concerns of fiscal sustainability, transparency, fairness, soil health, and food security.

The Core Distortion

• Urea is heavily subsidised, with the government bearing about 90 per cent of the actual market cost.
• Phosphorus (P) and potassium (K)-based fertilisers have been allowed some price adjustment under the Nutrient-Based Subsidy (NBS) scheme.
• But urea (the nitrogenous fertiliser) has been kept out of NBS and its price kept administered.
• This has led to distorted N:P:K usage, with farmers using too much urea relative to P and K.

Consequences of the Current Structure

• Fiscal stress: Subsidy bill is highly unpredictable and rising sharply.
• Black-marketing and diversion: Big gaps between administered and market prices encourage leakages.
• Soil degradation: Over-use of urea harms soil quality and long-term productivity.
• Unfair distribution: Subsidy is disproportionately captured by large wheat and rice farmers in certain states.
• Environmental harm: Excess nitrogen leads to groundwater nitrate pollution, eutrophication, and greenhouse gas (N2O) emissions.

What is the Nutrient-Based Subsidy (NBS) Scheme?

• Launched in April 2010 for non-urea fertilisers, mainly P (phosphorus) and K (potassium)-based fertilisers like DAP, MOP, and complexes.
• Under NBS, the subsidy is fixed per nutrient (N, P, K, S), and manufacturers and importers are free to set the maximum retail price, with the difference covered by government subsidy.
• This partially decontrolled the non-urea fertiliser market.
• Urea remained outside NBS, with the government controlling both price and subsidy.

Why Has Urea Stayed Outside Reform?

• Urea is the most-used fertiliser in India.
• It is consumed in massive quantities by wheat, rice, and other staple crops.
• Politically, raising urea prices is sensitive because of mass farmer exposure.
• Successive governments have avoided the political cost of reform.

What is the Soil Health Concern?

• The ideal N:P:K ratio for Indian soils is roughly 4:2:1.
• Actual usage in many regions is closer to 10:3:1 or 8:3:1, skewed heavily towards N (urea).
• This causes:
  • Loss of soil organic carbon.
  • Decline in micronutrients (zinc, boron, sulphur).
  • Higher pest susceptibility.
  • Lower fertiliser response per kg applied.
• The Soil Health Card Scheme and the PM-PRANAM scheme are partial responses, but the incentive structure remains skewed.

What is the Strait of Hormuz and Why is It Important Here?

• A narrow strip of water between Iran and Oman, connecting the Persian Gulf to the Arabian Sea.
• About 20 to 25 per cent of global oil and a large share of LNG trade passes through this chokepoint.
• A blockage raises oil and gas prices sharply.
• Urea is made from natural gas, so natural gas prices are a major input in urea costs.
• Hence, a Strait of Hormuz disruption flows directly into India’s urea import bill and subsidy outgo.

Practice MCQs

Q1. With reference to India’s fertiliser subsidy outlook for FY27, consider the following statements:

1. The Union Budget initially estimated a fertiliser subsidy of about ₹1.7 trillion for FY27.
2. The Department of Fertilisers is now seeking a doubling of the budget allocation, which could take the subsidy to about ₹3.4 trillion.
3. The previous peak in fertiliser subsidy was about ₹2.5 trillion in FY23, after the Russia-Ukraine war.
4. The recent spike has been triggered by a sharp fall in global petrochemical prices.

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 recent spike is due to a rise, NOT a fall, in petrochemical prices, linked to the Strait of Hormuz disruption.)

Q2. With reference to the structure of India’s fertiliser subsidy, consider the following statements:

1. Urea has remained outside the Nutrient-Based Subsidy (NBS) scheme.
2. The Nutrient-Based Subsidy (NBS) was launched in April 2010 for non-urea fertilisers.
3. The government bears about 90 per cent of the actual market cost of urea.
4. India’s fertiliser sector has fully shifted to a direct benefit transfer (DBT) to farmers, with no role for fertiliser companies.

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; subsidies are still largely paid to fertiliser companies, NOT directly to farmers.)

Q3. With reference to the consequences of an unreformed urea subsidy, consider the following statements:

1. The wide gap between administered and market prices encourages black-marketing and diversion.
2. Over-use of urea skews the N:P:K ratio and harms soil health.
3. The subsidy is captured disproportionately by large wheat and rice farmers in certain regions.
4. The subsidy structure has had no fiscal impact on India’s budget.

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 urea subsidy is a major fiscal item and has a significant impact on the budget.)

Q4. With reference to fertiliser-related policies and frameworks in India, consider the following statements:

1. The Soil Health Card Scheme provides farmers with information on their soil’s nutrient profile.
2. PM-PRANAM aims to promote alternative and balanced fertilisers and reduce chemical fertiliser dependence.
3. The Nutrient-Based Subsidy (NBS) applies to phosphorus and potassium-based fertilisers like DAP, MOP, and complexes.
4. The Strait of Hormuz, between Iran and Oman, is irrelevant to India’s fertiliser cost equation.

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 Strait of Hormuz is highly relevant, since natural gas-based urea costs depend on oil and LNG prices, which flow through this chokepoint.)

Answer Key

1. (c), Statements 1, 2, 3 are correct; Statement 4 is wrong because the recent spike is due to a rise in petrochemical prices.
2. (c), Statements 1, 2, 3 are correct; Statement 4 is wrong because subsidies are still paid largely to fertiliser companies.
3. (a), Statements 1, 2, 3 are correct; Statement 4 is wrong because the urea subsidy has a major impact on the budget.
4. (a), Statements 1, 2, 3 are correct; Statement 4 is wrong because the Strait of Hormuz directly affects India’s fertiliser costs.

Exam Relevance

NABARD Grade A

Very high importance, agriculture, soil health, rural economy

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