Current Affairs 13 February, 2025

Daily Current Affairs Quiz
13 February, 2025

International Affairs

1. India and France Strengthen Cooperation on the IMEC

Context:

India and France are jointly implementing the IMEC, which aims to enhance connectivity between India and Europe through sea and land routes.

Key Highlights:

• The purpose of IMEC is to establish a trade and transport corridor linking India, the Middle East, and Europe.
• The discussions on the project coincided with Prime Minister Narendra Modi’s accompanying the two day visit to France.
• Modi sought to attend the Paris AI Action Summit and discuss matters with French President Emmanuel Macron.
• The joint statement expressed closer cooperation between the two countries for the project’s execution.

National Affairs

1. Hyderabad Bird Atlas Project

Context:

The Hyderabad Bird Atlas is a three year project aimed at mapping the avian fauna of the city to understand bird distribution, monitor changes in bird populations, and assist land use planning.

Key Highlights:

• Objectives
  • Track bird distribution and population trends in Hyderabad.
  • Identify important bird areas.
  • Provide land use planning insight.
• Project Timeline
  • Initiated on February 3, runs till February 23 each year.
  • Conducted twice a year in February (Winter) and July (Summer) to monitor migratory birds and resident birds.
• Volunteer Training
  • Training for volunteers on identification of birds.
  • A preliminary survey was conducted at Nehru Zoological Park prior to the formal start of the atlas.
• Survey Methodologies
  • Volunteers were organized into small groups of 2-5.
  • 180 proposed survey regions in Hyderabad.
  • Surveys are conducted in randomly selected regions for better representation.

Nehru Zoological Park

Construction of Nehru Zoological Park was initiated on 26 October 1959 and was opened to public on 6 October 1963. The Park is managed by forest department, Government of Telangana, and is named in memory of India’s first Prime Minister, Jawaharlal Nehru.

2. TRAI Strengthens Consumer Protection

Context:

The Telecom Regulatory Authority of India (TRAI) has come up with fresh regulations aimed to tightrope walk between curbing spam calls and messages. These regulations to the Telecom Commercial Communications Customer Preference Regulations, 2018, come with strict timelines for compliance imposed along with enhanced penalties and consumer facilitation measures.

Important Provisions of The New Rules

More Stringent Complaint Handling and Faster Remedial Action

• Telcos must now accept spam complaints up to 7 days after a user receives unsolicited calls or messages.
• Action should be taken against unregistered telemarketers under five days.
• Reported spam will have lower tolerance levels making repeat offences very costly.

Specific Identification of Commercial messages

• Businesses sending legitimate messages should specify message type it has, in suffixes of the SMS sender head:
  • ” P” for Promotional messages
  • ” S” for Service messages
  • ” T” for Transactional messages
  • ” G” for Government messages

Harsh penalties on Repeats

• First Violation
  • Outgoing service for all telecom resources of the sender shall be barred for 15 days.
• Subsequent Violations
  • Complete disconnection for one year across all telecom networks.
  • Blacklisting of the sender across telecom providers.
• Financial Penalties on Telcos for Misreporting Spam
  • Misreporting of spam by telecom operators gives them penalties ranging from ₹2 lakh to ₹10 lakh.

AI Enabled Spam Detection & Monitoring

• Call and SMS patterns will be analyzed using AI to detect spam based on:
  • High call volumes
  • Short call durations
  • Low incoming to outgoing call ratios
  • The Do Not Disturb (DND) app has been updated to make spam reporting easier for consumers.

Banking/Finance

1. RBI Removes Business Restrictions on Kotak Mahindra Bank

Context:

Ten months since the Reserve Bank of India imposed business restrictions on Kotak Mahindra Bank, the RBI has finally removed the restrictions after complete determination of remedial measures and compliance verification.

Key Highlights:

Why Was The Restriction Imposed?

The RBI had placed curbs on Kotak Mahindra Bank for reasons related to its IT management. The RBI said that the bank had persistently failed to rectify “serious deficiencies and non-compliances” and it resulted in severe outages in 2022 and 2023, which resulted in inconvenience to customers.

RBI’s Decision to Remove Restrictions

• This meant that “cease and desist” orders levied upon Kotak Mahindra Bank were relieved, allowing the entity to continue with digital customer acquisition and credit card issuances.
  • “Cease and desist” is an idiom that means to stop doing something, often due to a legal threat or order. 
• Existing restrictions remains for Paytm Payments Bank.

Compliance and Remedial Measures Taken

• Kotak Mahindra Bank undertook remedial actions to address RBI’s supervisory concerns.
• The bank also ordered an outside audit, after taking RBI’s approval in advance, to authenticate its compliance.
• On the basis of these measures of correction, RBI decided to remove the curbs.

Bank’s Response

• Kotak Mahindra Bank had a positive view of RBI’s decision, committing itself to the compliance with regulators.
• The bank announced that it would resume digital customer onboarding and new credit card issuance in the near future.

With the restrictions removed, Kotak Mahindra Bank is now set to increase stakes on digital expansions and credit card products.

Source: The Hindu

2. RBI Consumer Confidence Survey

Context:

Post 2025 the early urban consumers in India find themselves with the option of some relief due to diminishing inflation and growing discomfort at stagnant incomes and job fears. Consumer spending is gaining some stability, but people’s predominant concerns over money security seem to project the economy into an uncertain one.

Highlights of the RBI Consumer Confidence Survey

Inflation Falls, But Is That Enough?

• Retail inflation eased to 4.31%, the lowest in five months and somewhat reassuring for household budgets.
• Yet, 93% of respondents do mention price rises, now this has fallen to the lowest level since mid 2024.
• A rising share stated that prices stayed the same; this is an indicator of stabilization.

Spending Patterns: Non Essentials and Essentials

• For Essentials:
  • While 87.6% responded increased on essentials, now for the first time since September 2024, on the least.
  • Less than 2% mentioned spending less on essentials, which seem to be holding on.
• Non Essential Expenditure:
  • Non essential spending has nearly been on par from here onwards, as the segments have been very cautious.
  • The huge caution on the part of the populace is evident in the low responses regarding increased expenditure on non essentials.

Larger Problems: Income Stagnation and Employment Concerns

• Income Stagnation:
  • This has a record high for a decade whereby 55% of respondents said that incomes showed no increase.
  • This perception is further reinforced by a drop in the share of those responding that incomes either increased or decreased, this again strengthens the perception of income stagnation.
• Employment Sentiment Falls:
  • Unemployment feeling rose to 42.7%, escaping a paradigm from Covid pandemic aftermath recovery.
  • Slowly being allowed a spurt of pessimism since mid 2024 suggests far deeper and far larger issues regarding the pace of the economy.

Economic Outlook: Clouded Horizon

• 43% believe that, for the most part, economic conditions have worsened: the largest share in twelve months.
• Flat wages and insecurity in jobs outweigh confidence in growth, despite the low inflation, thereby putting a question mark on long term financial stability.

Although a welcome change is decline in inflation, urban India is in a state of an awful lot of confusion about what the future holds with many other economic problems over its head. The stagnation of incomes and job issues take a heavy toll on poor consumer confidence.

3. New Income Tax Bill, 2025

Context:

Going forth with the New Income Tax Bill, 2025, it is slated to be presented at the Lok Sabha soon to desimplify and modernize tax laws by reducing complexity, redundant provisions, and improving clarity therein. If passed, this will effectively replace the Income Tax Act, 1961, taking force as from April 1, 2026.

Significant Changes in Income Tax Bill 2025

Introduced the Concept of a ‘Tax Year’

• As the bill introduces tax year, which literally means a 12 months financial year which starts in April.
• It has been replacing the earlier terms of assessment year and previous year, thus bringing the terminology to the tax life.

Simpler and Less Complex

• Overall, the law was pruned from 520,000 word to 260,000 words.
• It has prudently reduced the number of pages from 823 to 622.
• Explanations and provisos have been incorporated directly in the section and subsections, minimizing legal complexity.

Clear Profits Definition and Taxation Rules

• Profits related provisions have been consolidated throughout the Act under Clauses 334 to 346.
• Ambiguous textual definitions now have replacement with more simpler and easier language.

Digital Taxation Adjustments

• All amendments regarding virtual digital assets will be incorporated from the Finance Bill 2025 into this bill.
• This is because VDA has an extended definition that seeks to bring crypto assets, NFTs, and other digital assets under clearer tax regulations.

Source: The Hindu

Economy

1. India’s Retail Inflation

Context:

India’s retail inflation dipped to 4.31% in January 2025 from 5.22% in December 2024 and 5.1% in January 2024. Food inflation declined for the third straight time, though fruits and edible oils saw an increase in price.

Key Highlights:

• Inflation Trends
  • Retail inflation dropped to 4.31%, a five month low.
  • Food inflation dropped to 6% in January from 8.4% in December.
  • Edible oils and fruits saw sharp price increases despite the overall slowdown.
• Urban vs Rural Inflation
  • Urban inflation: 3.87%, dipping below RBI’s 4% target.
  • Rural inflation: 4.64%, though lower than December’s 5.8%, remains above the median target.
• RBI’s Interest Rate Cut & Future Projections
  • RBI cut interest rates by 0.25 percentage points, citing falling inflation and the necessity to spur growth.
  • Inflation will be 4.4% on average in January March and ease to 4.2% in 2025 26.
• Impact of Rupee Depreciation & Imported Inflation
  • Economists alert over imported inflation threats following rupee depreciation.
  • Most sensitive problems
    • Edible oils, fertilizers, and petroleum prices.
    • Edible oils especially susceptible, since 60% of India’s availability is imported and liable to import duties & world prices.

2. NCAER Report Calls for Independent Fiscal Councils in States

Context:

In their research paper, the National Council of Applied Economic Research (NCAER) has suggested that Indian States set up independent fiscal councils to enhance institutional capacity in order to improve financial governance.

Key Highlights:

Role of State Level Fiscal Councils

• Members would include academics, participants in financial markets, and other experts.
• They would assess the state government’s estimates for revenues and expenditures.
• Provide independent estimates and analyses to assess fiscal sustainability.
• Analyze contingent liabilities and provide transparency on potential financial risks.

An Example from Abroad: EU Model

• At the Union level, the European Commission performs a quasifiscal council role.
• Individual fiscal councils exist in every EU member state to critique the budget related forecasts.
• NCAER suggested that India can set up a similar model at the state level.

Earlier Recommendations for a Central Fiscal Council

• Various bodies, including the Thirteenth and Fourteenth Finance Commissions, recommended the formation of a Central Fiscal Council.
• The N.K. Singh Committee on FRBM also called for the establishment of such an institution.
• However, the Centre rejected these recommendations, concerned about powers to the finance ministry.

Need for Forensic Analysis of Fiscal Deficits

• The report calls for a surgical analysis of revenue shortfalls and spending overruns of the worst performing states.
• It is important to learn from past mistakes in order to avoid such fiscal crises in the future.

If set up, these councils will encourage fiscal discipline and reduce fiscal misgovernance at the state level.

3. NITI Aayog’s Fiscal Health Index (FHI)

Context:

Fiscal performance in India is assessed largely through tax policy and Union government deficits/debt, and fiscal health at the state level has not received much attention. The NITI Aayog’s Fiscal Health Index (FHI) is aimed at assessing the financial position of states, but is now in need of refinement for better policy applications.

Key Observations and Issues

Nothing about Public Service Provision

• Although macroeconomic stability is critical, the main roles of the states are social and economic service provision.
• The FHI, therefore, does not measure the volume and quality of public services that are provided by the states.
• Odisha, Chhattisgarh, and Jharkhand have ranked high on the index but severely lack in adequate teachers, healthcare staff, and medicines in hospitals.

Conceptual Issues in Fiscal Health Measurement

The index is derived from the five sub indices on an equal weighting basis:

• Quality of expenditure
  • Development and capital expenditure as a percentage of total expenditure and GSDP.
• Revenue mobilisation
  • Own revenue of the states as a percentage of GSDP and total expenditure.
• Fiscal prudence
  • Ratio of fiscal and revenue deficit to GSDP.
• Debt index
  • This relies on the ratio of interest payments to revenue receipts, as well as outstanding liabilities to GSDP.
• Debt sustainability
  • This is defined as the gap between GSDP growth and interest rate growth. Problems with Debt.
• Sustainability Measure
  • Whenever the nominal GSDP growth rate exceeds that of the effective interest rate, the Debt GSDP ratio would keep declining, not just its growth.

Data Accuracy and Comparability Issues

• Estimates of GSDP differ from state to state and are not strictly comparable.
• The Ministry of Statistics and Programme Implementation (MoSPI) provides comparable GSDP estimates for Finance Commissions, but these are not updated every year.
• Public accounts transfers are counted as expenditures, instead of deducting actual expenditures from these funds this needs reverse adjustments for clarity.
• State run enterprises (transport, electricity, lotteries, etc.) inflate both revenue and expenditure figures, distorting fiscal assessments.
• Off Budget liabilities, especially in power distribution and infrastructure projects (like Kerala Infrastructure Investment Fund Board), create hidden fiscal risk.

The FHI serves as a great point of reference, however, it must underlie some major improvements if it wants to be recognized in representing what states really look like in terms of financial health and their capacity to deliver services.

Facts To Remember

1. Niki Poonacha, Courtney Lock advance to men’s doubles semifinals of Delhi Open

India’s Niki Poonacha and Zimbabwe’s Courtney Lock advanced to the men’s doubles semifinals of the Delhi Open.

2. India has emerged as a pioneer in democratizing technology through Digital Public Infrastructure initiatives: Ashwini Vaishnaw

Information and Broadcasting Minister Ashwini Vaishnaw has said that India has emerged as a pioneer in democratizing technology through Digital Public Infrastructure initiatives like UPI, Aadhaar, and DigiLocker. 

3. Nationwide Special Campaign To Register on National Fisheries Digital Platform to be Organized from Friday

Government will organize a special nationwide campaign for registrations on the National Fisheries Digital Platform to avail various benefits provided under Pradhan Mantri Matsya Kisan Samridhi Sah-Yojana.

4. Govt: More than 15.45 crore rural households have tap water supply under JJM

The Government today said, that more than 15.45 Crore of over 19 crore rural households in the country have tap water supply in their homes under Jal Jeevan Mission (JJM).

5. Govt plans to consolidate various National Pension Schemes under one umbrella

The government is planning to bring various national pension schemes under one umbrella in the days to come.  These schemes include Atal Pension Yojana, PM Shramik Manthan and PM Shram Yogi Manthan.

6. 38th National Games: Hockey Finals, MP leads in Malkhamb

The ongoing 38th National Games in Uttarakhand will witness the final matches of women’s and men’s hockey events today. In the women’s group, Madhya Pradesh will clash with Haryana, while in men’s hockey, Maharashtra will face Uttar Pradesh.

7. Ilie Bolojan takes over as Romania’s interim President

Centrist Liberal Party leader Ilie Bolojan became Romania’s interim president yesterday. Ilie Bolojan who was also the senate speaker until yesterday and a mayor and county council head, took over from centrist Klaus Iohannis, who resigned as president on Monday to pre-empt an impeachment bid by opposition parties. 

8. China approves deepwater ‘Space Station’ in South China Sea

China has approved the construction of the first South China Sea deepwater ‘space station. The cold seep ecosystem research facility will be anchored 2,000 metres below the surface of the strategically significant South China Sea, which is also subject to several competing territorial claims.