Daily Current Affairs (DCA) 1 August, 2025

Daily Current Affairs Quiz
1 August, 2025

National Affairs

1. India Justice Report 2025

Context:

The India Justice Report 2025 has flagged persistent gaps in India’s legal aid system. Despite over 80% of the population being eligible, only 15.5 lakh individuals accessed free legal aid in FY 2023–24, highlighting deficiencies in reach, quality, and resource utilisation under NALSA.

About Legal Aid and NALSA

• Full Form: National Legal Services Authority
• Established: Statutory body under the Legal Services Authorities Act, 1987
• Operational Since: 1995
• Patron-in-Chief: Chief Justice of India
• Mandate: To provide free and competent legal services to eligible persons, especially marginalised communities.

Key Responsibilities

• Lays down policies and supervises State (SLSAs) and District Legal Services Authorities (DLSAs).
• Organises Lok Adalats, awareness drives, and promotes Alternative Dispute Resolution (ADR).
• Offers legal aid to SCs, STs, women, children, disabled persons, poor individuals, and prisoners under Section 12.

Major Initiatives by NALSA

1. Legal Aid Defence Counsel (LADC) Scheme (2022):
   • Institutional legal defence for accused persons in 610 districts.
2. Para-Legal Volunteers (PLVs):
   • Grassroots legal workers trained for community outreach, awareness, and mediation.
3. Permanent Lok Adalats:
   • Conciliation-based resolution for pre-litigative and pending disputes.
4. Legal Literacy Clubs:
   • Created in schools and colleges to improve early legal awareness.
5. Jail Legal Aid Clinics:
   • Dedicated legal services for undertrial and convicted prisoners.
6. Special Schemes:
   • Tailored legal aid for transgender persons, disaster victims, industrial workers, and custodial populations.

Key Challenges Identified

Issue	Details
Budget Constraints	Legal aid accounts for <1% of the justice budget; funds fell to ₹169 crore (2022–23) from ₹207 crore (2017–18).
Fund Underutilisation	Utilisation rate dropped from 75% to 59%, hampering service delivery.
Decline in PLV Workforce	38% drop in Para-Legal Volunteers between 2019–24; poor honorarium payments in many States.
Rural Inaccessibility	Just 1 legal aid clinic per 163 villages; per capita legal aid spending as low as ₹2.
Service Quality Gap	Widespread perception that legal aid quality is inferior to private counsel.
Centralised Fund Control	State Legal Services Authorities need central clearance for hiring and logistics, delaying implementation.

Significance

• The report underscores the urgent need for decentralisation, better budgeting, and frontline legal workforce strengthening.
• Legal aid is vital for ensuring access to justice, a constitutional right under Article 39A.
• NALSA’s role is pivotal in achieving inclusive justice, especially for India’s vulnerable populations.

TH

2. Indian Navy Inducts Indigenous Stealth Frigate Himgiri under Project-17A

Context:

India’s naval defence capabilities received a boost with the delivery of Himgiri, a second indigenous stealth frigate in July 2025, built under Project-17A. The move aligns with India’s long-term strategy of aatmanirbharta (self-reliance) in warship manufacturing.

About Himgiri

• Builder: Garden Reach Shipbuilders & Engineers (GRSE), Kolkata.
• Type: Multi-role stealth frigate.
• Commissioning: Slated for end-August 2025, along with sister ship Udaygiri (delivered July 1 by Mazagon Dock Ltd).

Part of Project-17A

• Project Objective: Construction of 7 advanced stealth frigates for the Indian Navy.
• Distribution:
  • 4 frigates by MDL, Mumbai.
  • 3 frigates by GRSE, Kolkata.
• Total Project Cost: ₹45,000 crore.
• First Commissioned Ship: INS Nilgiri (January 2024).
• Remaining frigates expected to be delivered by end-2026.

Advanced Capabilities

• Weaponry:
  • Equipped with BrahMos supersonic cruise missiles (now extended to 450 km).
  • Barak-8 surface-to-air missiles (range: 70 km) for air defence.
• Technology Highlights:
  • High-end automation, sensor integration, and stealth features.
  • Designed to tackle multi-dimensional maritime threats.

TET

3. Mangrove Restoration Initiatives Across States

Context:

India has launched large-scale mangrove restoration drives across Tamil Nadu, Gujarat, and Mumbai to enhance coastal security, biodiversity, and climate resilience in the face of escalating ecological threats.

What Are Mangroves?

• Mangroves are salt-tolerant coastal forests thriving in tropical and subtropical tidal zones.
• India’s Mangrove Coverage: ~4,900 sq. km.
• Major Regions: Sundarbans (West Bengal), Pichavaram (Tamil Nadu), Mahanadi & Godavari deltas (Odisha & Andhra), Gulf of Kutch (Gujarat).

Ecological and Climate Importance

• Disaster Mitigation: Natural barriers against cyclones, floods, and tidal surges.
• Blue Carbon Sink: High carbon storage in roots and sediments.
• Biodiversity Hotspot: Habitat for flamingos, herons, mudskippers, and crustaceans.

Major Threats to Mangroves

• Urbanisation: Encroachment for roads, ports, and housing.
• Pollution: Waste and plastics reduce regeneration capacity.
• Aquaculture: Shrimp farms replacing native mangrove belts.
• Climate Change: Salinity shifts, sea-level rise, and erratic rainfall patterns.
• Invasive Species: Prosopis juliflora displacing native vegetation.

State-Led Restoration Efforts

• Tamil Nadu – Green Tamil Nadu Mission:
  • Mangrove cover doubled from 4,500 ha to 9,000 ha (2021–24).
  • Canal desiltation and Avicennia seed planting in Muthupettai Estuary (115 ha).
• Maharashtra – Thane Creek Project:
  • ₹10.3 crore budget to plant 3.75 lakh saplings and remove 150 tonnes of plastic in 3 years.
  • Women-led workforce ensures sustainability and employment.
• Gujarat – MISHTI Scheme Front-runner:
  • Over 19,000 ha restored in two years, surpassing national targets.

Strategic and Socioeconomic Benefits

• Disaster Resilience: Mitigated tsunami impact (2004) and recent cyclone damages.
• Livelihood Source: Supports fishing, honey gathering, crab farming.
• Carbon Efficiency: Absorbs CO₂ at higher rates than terrestrial forests.
• Eco-Tourism Potential: Sites in Sundarbans and Gujarat attract tourists and promote conservation awareness.

TH

4. Kavach 4.0

Context:

Indian Railways has successfully commissioned the indigenous train protection system, Kavach 4.0, on the Mathura-Kota section of the high-density Delhi–Mumbai route. This marks a significant leap in modernizing railway safety systems in India.

Key Highlights:

• What is Kavach 4.0?
  • Kavach 4.0 is an Automatic Train Protection (ATP) system developed indigenously by Indian Railways. It ensures safe train operations by automatically controlling speed and applying brakes in emergency situations.
• Development and Approval
  • Developed under Atmanirbhar Bharat vision.
  • Approved by RDSO in July 2024.
  • First operationalized in South Central Railway (2018).
  • Kavach 4.0 approved in May 2025 for trains up to 160 km/h.
• Features
  • Designed with Safety Integrity Level 4 (SIL 4) – the highest global safety rating.
  • Works in fog and low visibility conditions—information visible on loco dashboard.
  • Integrated with train braking systems.
  • Uses RFID tags, telecom towers, optical fibre network, and station-based controls.
• Scale and Complexity
  • Described as equivalent to setting up a telecom company.
  • Requires high-end hardware like RFID tags (every 1 km), telecom towers, and OFC connectivity.
  • Real-time communication between Loco Kavach and Station Kavach ensures safety and speed regulation.

Significance

• First such indigenous train safety initiative post-Independence.
• Enhances passenger safety across high-traffic corridors.
• Supports Make in India and Digital India missions.
• Aims to commission Kavach 4.0 on major national routes within 6 years.

PIB

Banking/Finance

1. ICICI Bank to Begin Charging Payment Aggregators for UPI Transactions

Context:

From August 1, 2025, ICICI Bank will start levying charges on payment aggregators (PAs) for processing Unified Payments Interface (UPI) transactions, becoming the latest major private bank to tap into this cost recovery mechanism.

Key Highlights:

Reason Behind the Move

• ICICI joins Yes Bank and Axis Bank, which already levy similar charges on PAs.
• Banks invest heavily in UPI infrastructure (switches, APIs, fraud monitoring, etc.).
• With no Merchant Discount Rate (MDR) applicable on UPI, banks currently earn minimal or no revenue per transaction.
• Banks also pay NPCI for access to the UPI switch.

Impact on PAs and Merchants

• PAs often charge merchants platform fees, convenience charges, or integration costs.
• With this move, PAs may:
• Pass on the charges to merchants to maintain margins.
• Absorb the cost depending on contractual terms with merchants.

Growing UPI Volumes and Monetisation Pressure

• Peer-to-merchant (P2M) UPI volumes are rising sharply.
• Credit card–linked UPI transactions are also growing, creating new opportunities for monetisation.

Operational Structure of PAs

• PAs act as intermediaries between the customer’s bank (debit side) and merchant’s bank (credit side).
• Typically maintain escrow accounts with their banking partner.
• Once funds are received, they are transferred to the merchant’s account.

BS

2. Bank Credit Growth Slows Sharply in June 2025 – RBI Data

Context:

According to the Reserve Bank of India (RBI), non-food bank credit growth slowed to 10.2% year-on-year (Y-o-Y) as of the fortnight ended June 27, 2025, down from 13.8% during the same period in 2024. The slowdown was driven by weaker demand across agriculture, services, retail, NBFCs, and industrial sectors.

Key Highlights:

1. Agriculture and Allied Activities

• Credit flow to the agriculture sector has witnessed a marked decline.
• After a strong performance last year, banks are reporting a reduced pace of disbursement—likely due to high base effects and tightening liquidity in rural areas.

2. Services Sector

• One of the strongest performers in recent years, the services sector has also experienced a notable dip in credit offtake.
• Key sub-segments like trade and NBFCs have seen especially muted growth, indicating restrained working capital demand and cautious lending by banks.

3. NBFCs and Trade

• Non-Banking Financial Companies are facing limited credit flow from the banking system, partly due to regulatory tightening and increased scrutiny.
• The trade sector too has cooled off, with wholesalers and retailers showing lesser appetite for fresh credit amid subdued consumer demand.

4. Retail Lending Trends

Personal loans, housing finance, and vehicle loans—once pillars of credit growth—have all recorded slower expansion. This signals a shift in household borrowing behaviour, possibly due to higher interest rates, inflationary pressures, and reduced discretionary spending.

• Personal loans: Witnessed sluggish growth, especially in the unsecured segment.
• Housing loans: Demand continues but at a softer pace, possibly due to high property prices and cautious consumer sentiment.
• Vehicle and credit card loans: Reflect weakened urban consumption.

5. Industrial Credit

• Credit flow to industries, including infrastructure and manufacturing, has slowed.
• Despite strong government capex, private investment remains tentative, reflecting continued uncertainty and cautious business sentiment.

Reasons Behind the Slowdown

• Seasonal Factors: The April–June quarter typically sees lower demand, especially post financial year-end reconciliations.
• Compliance Overhang: Banks have been focused on audits, provisioning, and regulatory compliance during the start of the new fiscal.
• Borrower Caution: With macroeconomic volatility, both corporates and individuals are adopting a wait-and-watch approach to fresh borrowing.

BS

3. Standing Committee on Finance Flags Gaps in PMIS and IBC

Context:

On July 31, 2025, the Standing Committee on Finance, chaired by MP Bhartruhari Mahtab, submitted a report in Parliament highlighting key issues and recommendations related to the Prime Minister’s Internship Scheme (PMIS), Insolvency and Bankruptcy Code (IBC), and rising direct and indirect tax disputes.

Key Highlights:

Prime Minister’s Internship Scheme (PMIS)

• Budget Allocation:
  • ₹2,000 crore allocated in BE FY25; revised to ₹380 crore in RE FY25.
  • Current funds sufficient for the pilot phase, but require dynamic reassessment for scaling.
• Issues Identified:
  • Exclusion of families of govt. employees deemed excessive.
  • No support for living expenses hinders participation by candidates from remote or economically weak backgrounds.
  • Poor monitoring of internship-to-employment conversion rates.
  • Limited engagement with SMEs, startups, and regional organisations.
• Recommendations:
  • Periodic and independent evaluation for transparency.
  • Relax eligibility norms for marginalised and poor candidates.
  • Establish a robust monitoring framework to track internship outcomes.
  • Expand participation to diverse sectors and regions.

Insolvency and Bankruptcy Code (IBC)

• Issues:
  • Delays in resolution and growing case backlog at NCLTs.
• Recommendations:
  • Set up fast-track tribunals with strict timelines for high-priority IBC cases.
  • Strengthen NCLT infrastructure and explore public-private partnership models, inspired by the success of Seva Kendras.
  • Ministry of Corporate Affairs agreed to initiate reforms and expand tribunals to improve case disposal speed.

4. Insurance Brokers Association of India (IBAI) Report on Insurance in India

Context:

The Insurance Brokers Association of India (IBAI) released a comprehensive report titled “Leading the Path to Insurance for All: Broker of the Future”, in collaboration with McKinsey & Company, to mark its 24th Foundation Day in Mumbai (August 2025).

Key Highlights:

• Low Insurance Penetration in India:
  • Health insurance: Only 2 in 5 Indians are covered.
  • If government schemes are excluded, this falls to just 1 in 4.
  • Life insurance: Only 1 in 2 adults has any life insurance.
• Rural Access Gap:
  • 65% of India’s population resides in rural areas.
  • Yet, only 2% of life insurance branches are located in rural India.
  • Rural India contributes 45% of GDP but remains underserved.
• Projected Market Growth:
  • Insurance market to grow from ₹11 lakh crore (2024) to ₹25 lakh crore (2030).
  • Insurance penetration to rise from 3.7% to 5%, closing the gap with the global average of 6.8%.
  • Retail Gross Written Premiums (GWP) expected to double to ₹21 lakh crore by 2030.
• Life Insurance Challenges:
  • Penetration rate: 2.8%.
  • Large protection gap due to limited adoption of pure term insurance products.
• Broker Ecosystem:
  • Only 735 licensed insurance brokers in India.
  • Top 36 brokers account for 85% of insurance broking revenue.
  • Many small brokers have failed to scale or digitize.

About IBAI (Insurance Brokers Association of India)

• Status: Statutory trade body under Section 25 of the Companies Act, 1956.
• Headquarters: Mumbai, Maharashtra
• President: Sumit Shantilal Bohra
• Role: Represents and regulates all licensed insurance brokers in India.

BS

5. IRDAI Issues Master Circular to Raise Minimum Insurance Coverage Requirements

Context:

On 25 July 2025, the Insurance Regulatory and Development Authority of India (IRDAI) released its latest Master Circular. This circular lays out enhanced regulatory obligations for all life, general, and standalone health insurers for FY2025–26 and FY2026–27, superseding the 2024 version of the regulations.

Key Obligations for Insurers

Rural Sector Coverage

• FY26: Insurers must collectively cover lives, dwellings, and vehicles in 25,000 designated Gram Panchayats. Each insurer must ensure 15% coverage in their allocated panchayats.
• FY27: Target increased to 50,000 Gram Panchayats. Insurers must achieve 25% coverage in earlier allocated areas and 10% in newly assigned panchayats.

Social Sector Coverage

• Insurers must ensure that 10% of the total insured lives are from the social sector in FY26, rising to 12% in FY27.
• Where documentation is lacking, up to 20% of beneficiaries may be included based on self-certification.

Motor Third-Party (TP) Insurance

Obligations are based on an insurer’s market share in the TP segment:

Market Share	FY26 Increase	FY27 Increase
≤ 2%	12.5%	13.75%
2%–5%	10%	11%
5%–10%	7.5%	8.25%
> 10%	5%	5.5%

Insurers must verify compliance using vehicle registration data and the Insurance Information Bureau (IIB) database to identify uninsured vehicles.

Key Changes Introduced

• A consolidated framework replaces separate regulations for rural, social, and motor TP insurance obligations.
• The definition of rural areas is now tied to Gram Panchayat jurisdiction, promoting better local targeting.
• The social sector definition has been broadened to include:
• Unorganised workers
• Informal sector employees in small establishments (fewer than 10 workers)
• Beneficiaries of government-sponsored schemes
• Emphasis placed on saturation-based coverage: insurers are encouraged to comprehensively cover dwellings, lives, livelihoods, and vehicles in each assigned area.
• Incentives proposed for insurers who exceed minimum targets or adopt innovative approaches.

About IRDAI

• Full Name: Insurance Regulatory and Development Authority of India
• Founded: 1999
• Headquarters: Hyderabad, Telangana
• Current Chairperson: Ajay Seth

6. SEBI Proposes Changes in IPO Allocation Norms for Large Issues

Context:

The Securities and Exchange Board of India (SEBI) has released a consultation paper proposing major reforms to the allocation structure of Initial Public Offerings (IPOs), particularly for large issues exceeding ₹5,000 crore. The move aims to better align IPO allocation with investor interest and institutional appetite.

Proposed Changes in IPO Allocation Structure

• For IPOs above ₹5,000 crore, SEBI proposes:
  • Retail investor quota to be reduced from 35% to 25%.
  • Institutional quota (Qualified Institutional Buyers – QIBs) to be increased from 50% to 60%.
  • A graded approach will be applied based on IPO size.

Rationale Behind the Proposal

• SEBI noted that:
  • IPO sizes have grown, but retail participation has remained flat over the last three years.
  • In large IPOs, retail subscription levels have often been muted or underutilized, while institutional demand remains strong.

Anchor Investor Reforms

• SEBI proposes to increase the number of permissible anchor investor allottees for allocations exceeding ₹250 crore.
  • This will make participation easier for large FPIs managing multiple funds.
• Inclusion of insurance companies and pension funds in the reserved anchor investor category is suggested.

Enhanced Reservation for Long-term Institutions

• Within the anchor investor portion, the reservation for:
  • Life insurers, pension funds, and domestic mutual funds to increase from 30% to 40%.
    • One-third of this (approx. 13.3%) remains for domestic mutual funds.
    • 7% is earmarked specifically for insurance companies and pension funds.

Objective of the Reform

To align IPO structures with:

• Market demand and mutual fund flows
• Ground realities of retail application limits
• The goal of maintaining long-term investor confidence in India’s capital markets

Mint

Agriculture

1. Reassessing India’s Agricultural Protectionism and the Need for Market Reforms

Context:

India’s post-Independence tariff policy has been centred on protecting agriculture, citing food security and farm livelihoods. However, over the decades, this protectionist model has resulted in inefficiencies, uncompetitive farming, and persistent food insecurity. A recent opinion piece reconsiders the long-standing rationale for this policy, highlighting the market distortions and the need for structural reforms.

Key Highlights:

1. Protectionism in Agriculture: An Outdated Strategy

• Tariff protections, originally meant to shield farmers, have become counterproductive:
  • Created concentric rings of protection across agriculture, manufacturing, and services.
  • Result: Uncompetitive agriculture, low farm wages, and inefficient food systems.

2. Food Security Paradox

• Selective price support policies (like MSPs) distort cropping patterns in favour of government-stocked staples (e.g., rice, wheat).
• Leads to:
  • Surpluses in some crops → necessitating exports.
  • Deficits in others → requiring imports.
• India becomes a simultaneous importer and exporter of food—indicative of a flawed security model.

3. Stagnant Farm Productivity and Wages

• Factory jobs in a protected economy haven’t expanded fast enough to absorb surplus rural labour.
• Result: Persistently low agricultural productivity and incomes.

4. Need for Market-Based Reforms

• Farmers are entrepreneurs, yet denied fair access to markets.
• Protection should focus on:
  • Risk reduction, not market insulation.
  • Higher productivity through:
    • Investment in GM crops.
    • Sustainable land and water use.
    • Enhanced logistics, warehousing, and marketing infrastructure.

5. Policy Contradictions

• Current gains in productivity rely heavily on imported fertilisers, worsening dependence.
• The state continues to dominate food policy, despite clear signs of market failure and inefficiencies.

6. Long-Term Economic Risk

• Shielding half of India’s population (farmers) from market forces is unsustainable.
• Agriculture must evolve into a mature industry if it is to secure food supply and contribute to growth.

TET

2. Cabinet Approves “Grant-in-Aid to National Cooperative Development Corporation (NCDC)” Scheme

Context:

The Union Cabinet has approved a new Central Sector Scheme titled “Grant-in-Aid to NCDC”, with a total outlay of ₹2,000 crore for four years (FY 2025–26 to FY 2028–29).

Key Features

• Nature of Scheme: Central Sector Scheme
• Total Outlay: ₹2,000 crore (₹500 crore annually)
• Implementing Agency: National Cooperative Development Corporation (NCDC)
• Funding Purpose:
  • Grant to be used by NCDC to mobilize ₹20,000 crore from open markets.
  • Loans to be provided to cooperatives for:
    • Setting up new projects
    • Expansion, modernization, and tech upgradation
    • Working capital support

Expected Benefits

• Financial Empowerment of Cooperatives: Enables cooperatives to run profitably with improved liquidity and infrastructure.
• Capacity Building: Supports modernization, diversification, and scaling-up of cooperative enterprises.
• Social Impact: Aims to reduce socio-economic disparities and enhance women’s participation in the workforce.
• Asset Creation: Facilitates income-generating capital asset creation across cooperative sectors.

About NCDC

• Established: 1963
• Type: Statutory Corporation
• Headquarters: New Delhi
• Administrative Ministry: Ministry of Cooperation
• Mandate: Planning and promoting production, processing, marketing, and storage of agricultural produce and related activities under cooperative principles.

Facts To Remember

1. PM Modi invites citizens to share ideas for Independence Day

Prime Minister Narendra Modi has invited all citizens to contribute their thoughts and ideas for his Independence Day address. In a social media post, Mr Modi urged citizens to share their thoughts on the open forums on MyGov and the NaMo App.

2. HM Amit Shah pays tribute to Lokmanya Bal Gangadhar Tilak on his death anniversary

Union Home Minister Amit Shah paid tribute to Lokmanya Bal Gangadhar Tilak on his death anniversary today. In a social media post, Mr Shah stated that Tilak transformed Swaraj into a mass movement, made Swadeshi a matter of public consciousness, and elevated culture as a source of national pride. 

3. PM Modi to disburse ₹20,500 cr under PM-KISAN scheme in Varanasi

Prime Minister Narendra Modi will visit his parliamentary constituency, Varanasi, tomorrow to lay the foundation stone and inaugurate the development projects worth around 2,200 crore rupees. On this occasion, PM Modi will also address a public gathering.

4. Cabinet approves ₹6,520 crore outlay for Pradhan Mantri Kisan Sampada Yojana

The Cabinet has approved a total outlay of 6520 crore rupees, including additional outlay of 1920 crore rupees for ongoing Central Sector Scheme “Pradhan Mantri Kisan Sampada Yojana” during 15th Finance Commission Cycle.

5. Starlink receives license to launch satellite internet service in India

Union Communications Minister Jyotiraditya Scindia today said that Elon Musk-led Starlink has received a license to launch satellite internet service in India and a framework for spectrum allocation is also in place for a smooth rollout.

6. PM Modi condoles passing away of former RSS Chief Pramila Medhe

Prime Minister Narendra Modi today condoled the passing of Pramukh Sanchalika of Rashtra Sevika Samiti, Pramila Tai Medhe.