Daily Current Affairs (DCA) 10 June, 2025

Daily Current Affairs Quiz
10 June, 2025

National Affairs

1. India’s First E-Waste Eco Park to be Set Up in Delhi

Context:

The Delhi Government has announced the development of India’s first electronic waste (e-waste) eco park in Holambi Kalan, North Delhi. This initiative aims to position Delhi as a pioneer in sustainable e-waste management and the circular economy.

• Objective: To establish a world-class e-waste processing ecosystem and promote green technology adoption

Processing Capacity & Scope:

• Annual E-Waste Capacity: 51,000 tonnes
• Regulatory Compliance: Will handle all 106 waste categories as per E-Waste Management Rules, 2022

Key Components of the Eco Park:

• Dedicated Zones For:
  • Dismantling units
  • Refurbishing facilities
  • Plastic recovery plants
  • Second-hand electronics market
• Training & Inclusion:
  • Skilling centres for informal sector workers
  • Formalization of unregulated e-waste handlers
  • Focus on health, safety, and improved livelihoods

Significance:

• Environmental Benefit: Cleaner, safer e-waste handling
• Social Impact: Inclusion of informal recyclers into the formal economy
• Minister’s Quote: “The eco park will not just manage waste. It will be the symbol of Delhi’s transition into a circular economy, where no resource is wasted and no worker left behind.”

TH

2. PM Modi’s Visits to Cyprus and Croatia

Context:

Prime Minister Narendra Modi is scheduled to visit Cyprus and Croatia en route to and from the G-7 Summit in Canada (June 15–17, 2025). These visits are being seen as an assertion of India’s traditional foreign policy principles with renewed engagement in Europe.

Visit to Cyprus: Political and Strategic Significance

• Message to Turkiye:
  • Cyprus visit signals displeasure towards Turkiye’s support to Pakistan during Operation Sindoor (May 2025).
  • Reinforces India’s solidarity with Cyprus amid its territorial dispute with Turkiye over Northern Cyprus.
• Diplomatic Alignment:
  • Cyprus to hold the EU Council Presidency in H1 2026.
  • Cyprus has supported India on:
    • Kashmir issue
    • Cross-border terrorism concerns
    • UN Security Council reform
    • Nuclear Suppliers Group (NSG) membership
    • International Atomic Energy Agency (IAEA) roles
• Indian Reciprocity:
  • India supports Cyprus’ reunification based on UNSC resolutions, international law, and EU regulations.
• Key Meeting:
  • PM Modi is expected to meet President Nikos Christodoulides.

Visit to Croatia: Cultural and Economic Linkages

1. Cultural Diplomacy:
   • Croatia has a strong Indology tradition, especially at the University of Zagreb.
   • Presence of ISKCON and widespread cultural interest in Indian philosophy and Sanskrit.
2. Defence and Tech Cooperation:
   • MoU on defence cooperation signed during Raisina Dialogue 2023.
   • Visit strengthens India’s ties with smaller yet strategic European partners.
3. Non-Alignment Legacy:
   • Tribute to Josip Broz Tito, Croatian founder of Non-Aligned Movement (NAM).
   • Reflects India’s continued engagement with NAM-origin countries in evolving multipolar world.

Geo-Economic Context: Role in IMEC

1. India-Middle East-Europe Economic Corridor (IMEC):
   • Announced at G20 Summit, New Delhi (2023).
   • Cyprus and Croatia seen as potential investors and participants in corridor projects.
2. Strategic Geography:
   • Cyprus: Gateway to the Eastern Mediterranean and EU platforms.
   • Croatia: Maritime infrastructure on the Adriatic Sea, key for logistics and trade under IMEC.

3. SEZ Rule Amendments to Boost Semiconductor & Electronics Manufacturing (June 2025)

Context:

The Union government has notified several changes to the regulations for the setting up of special economic zones (SEZs) for the manufacturing of semiconductors or electronic parts. Revisions include reducing minimum plot size for the units and allowing such semiconductor units to also supply to the rest of India, apart from exporting.

Key Amendments to SEZ Rules, 2006

• Rule 5 (Minimum Land Area Requirement)
  • Previous requirement: 50 hectares
  • Revised requirement: 10 hectares (for SEZs in semiconductors and electronic component manufacturing)
• Rule 18 (Domestic Supply Allowed)
  • Change: SEZ units in semiconductors and electronics can now supply products within India (i.e., Domestic Tariff Area) after paying applicable duties
  • Earlier: Only export-oriented operations were permitted
• Rule 7 (Encumbrance Relaxation)
  • Change: The Board of Approval may now relax the “encumbrance-free land” requirement
  • Applies where land is mortgaged or leased to government or authorized agencies

Objective of the Amendments

• Promote pioneering, high-tech investments
• Address capital intensity and long gestation challenges in semiconductor manufacturing
• Build India’s semiconductor ecosystem and reduce import dependency

New SEZ Approvals:

1. Micron Semiconductor Technology India
   • Location: Sanand, Gujarat
   • Purpose: Semiconductor manufacturing SEZ
2. Hubballi Durable Goods Cluster Pvt Ltd (Aequs Group)
   • Location: Dharwad, Karnataka
   • Purpose: Electronic components SEZ

TH

4. India’s Poverty Levels See Sharp Decline

Context:

India has made significant progress in reducing absolute poverty over the last two decades. However, the absence of updated official poverty estimates continues to hinder accurate measurement and policy targeting.

Key Points:

• Decline in Extreme Poverty (Based on World Bank Thresholds):
  • Under $3/day (new low-income line):
    • Down from 27.1% in 2011–12 to 5.3% in 2023–24
  • Under $4.20/day (for lower middle-income countries):
    • Down from 57.7% to 23.9% over the same period
• World Bank Poverty Line Revisions:
  • The World Bank has updated its thresholds in 2022:
    • From $2.15 to $3.00 for low-income nations
    • From $3.65 to $4.20 for lower middle-income countries like India
  • This offers a new basis to evaluate India’s poverty trajectory

Contributing Factors to Poverty Reduction:

• Sustained economic growth
• Targeted welfare and poverty alleviation programs
• A reformist consensus on inclusive development strategies

Challenges and Gaps:

• Urban-Rural Disparities:
  • Poverty remains significantly higher in rural areas
  • Differences may be overstated due to price-level variations, needing clarification via consumer surveys
• Data Limitations and Policy Needs:
  • India’s last official poverty estimate was nearly a decade ago
  • Despite two recent household consumption surveys, the government has not produced updated poverty statistics
  • There’s an urgent need for a revised poverty line tailored to India’s current socioeconomic reality
• Fragility of Poverty Gains:
  • Lessons from the pandemic underscore that many who escaped poverty remain vulnerable to economic shocks
  • The “last mile” in poverty elimination is the hardest, requiring precise targeting

Policy Considerations:

• Avoid overstating success (triumphalism); instead, build on gains with accurate data
• Evaluate how schemes like free food provision align with actual poverty numbers
• Rely on domestic, evidence-based poverty estimates rather than international proxies

BS

5. Bhashini & Indian Railways to Revolutionize Multilingual Passenger Services

In a major push for linguistic inclusion and AI-driven digital transformation, Digital India Bhashini Division (DIBD) and the Centre for Railway Information Systems (CRIS) signed an MoU to integrate multilingual AI solutions across Indian Railways’ public platforms.

Key Highlights of the Partnership:

• Objective: Enable railway services in 22 Indian languages using AI-powered language tools.

 Technology Integration:

• Automatic Speech Recognition (ASR) – Voice-based queries in local languages.
• Text-to-Text Translation – Real-time multilingual responses.
• Text-to-Speech (TTS) – Audio announcements in regional languages.
• Optical Character Recognition (OCR) – Digitizing printed text for translations.

Platforms Covered:

• National Train Enquiry System (NTES)
• RailMadad (Passenger grievance system)
• Chatbots, voice assistants, call centers, kiosks, and mobile apps

Source: PIB

Banking/Finance

1. Marginal Cost of Funds-Based Lending Rate (MCLR)

Context:

HDFC Bank, India’s largest private lender, has reduced its Marginal Cost of Funds-Based Lending Rate (MCLR) by 10 basis points (bps) across select tenures, effective June 7, 2025.

What is MCLR?

MCLR (Marginal Cost of Funds-Based Lending Rate) is the minimum interest rate below which a bank cannot lend (except in special cases approved by the Reserve Bank of India). Introduced by the RBI in 2016, it replaced the older Base Rate system to make loan pricing more transparent and responsive to market changes.

Key Features of MCLR

1. Dynamic Pricing: Adjusts based on:
   • Repo rate changes (RBI’s policy rates).
   • Deposit costs (banks’ cost of borrowing funds).
   • Operating expenses & cash reserve requirements.
2. Tenure-Based Rates:
   • MCLR varies for different loan tenures (overnight, 1-month, 3-month, 6-month, 1-year, etc.).
3. Reset Period:
   • Floating-rate loans (e.g., home loans) linked to MCLR reset interest rates after a fixed period (e.g., every 6/12 months).

What This Means for Borrowers

• Lower EMIs for MCLR-linked loans (e.g., home, car, personal loans).
• Possible reduction in loan interest rates for new borrowers.
• HDFC Bank’s first rate cut in 2025, following RBI’s softer monetary stance.

Why the Rate Cut?

• Declining cost of funds due to surplus liquidity.
• Competitive pressure from other banks reducing rates.
• RBI’s pause on repo rate hikes (currently at 6.50%).

Who Benefits?

• Existing borrowers with floating-rate loans (reset after MCLR revision).
• New loan applicants seeking lower interest rates.

Why Did RBI Introduce MCLR?

• To ensure faster transmission of RBI’s rate cuts to borrowers.
• Prevent banks from delaying rate benefits to customers.
• Align lending rates with actual market conditions.

(Source: The Economic Times)

2. RBI Flags Misselling and Microfinance Concerns

Context:

In a recent address at an HSBC event on financial inclusion, RBI Deputy Governor M. Rajeshwar Rao expressed concerns over widespread misselling by financial institutions and persistent issues in the microfinance sector. His speech was later published on the RBI website.

Key Issues Highlighted

Misselling of Financial Products

• RBI is examining whether new guidelines are needed to regulate misselling of financial products by banks and NBFCs.
• Misselling includes pushing products (e.g., insurance) without assessing customer suitability and financial awareness.
• Such practices can erode trust in welfare schemes designed to provide a safety net for low-income groups.

High Interest Rates in Microfinance

• Private banks and Small Finance Banks (SFBs) with microfinance exposure are reportedly charging excessive interest rates, despite access to low-cost funds.
• Some institutions charge significantly higher margins than the industry average, which is seen as exploitative.

Over indebtedness and Recovery Practices

• The microfinance sector suffers from a cycle of over indebtedness, coercive recovery, and financial distress.
• Disruptions and borrower distress have become more frequent in recent years.

RBI’s Prescription for Responsible Lending

• Lenders must:
• Strengthen credit appraisal systems to prevent overleveraging.
• Avoid any form of coercive or unethical recovery.
• Ensure services are delivered in a sustainable and ethical manner.
• Rao stressed that financial inclusion must not come at the cost of consumer protection and dignity.

Call for Business Model Introspection

• Rao urged institutions to reflect on whether their incentive structures or operational models are creating perverse outcomes.
• Emphasized the need to go beyond the “high-yielding microfinance” mindset and adopt a developmental and empathetic approach.

Regulatory Signal

• RBI is likely to:
• Introduce specific norms to curb misselling.
• Reassess interest rate transparency in the microfinance sector.
• Make effective grievance redressal mechanisms mandatory across regulated entities.

BS

3. RBI Discontinues Daily VRR Auctions Amid Liquidity Surplus

Context:

The Reserve Bank of India (RBI) has announced it will discontinue daily Variable Rate Repo (VRR) auctions from Wednesday, June 11, 2025, following a review of the improving liquidity conditions in the banking system.

Key Highlights:

Daily VRR Auctions Discontinued

• Daily VRRs, introduced on January 16, 2025, to manage short-term liquidity tightness, will now be discontinued.
• This step reflects muted demand for funds: banks bid only ₹3,711 crore on June 9 against a notified ₹25,000 crore.

Reason for the Move

• The banking system is now in a liquidity surplus of ₹2.45 trillion (as of June 8).
• Earlier, the system had faced a deficit of ₹2.22 trillion on January 15 due to tax outflows and forex market interventions.
• As conditions improved, RBI had already reduced the size and frequency of both daily and 14-day VRR auctions.

Shift in RBI’s Monetary Stance

• On Friday, June 6, RBI:
  • Cut the policy repo rate by 50 basis points.
  • Shifted its stance from accommodative to neutral.
  • Announced a 100 basis point reduction in CRR in four tranches (starting September), lowering it to 3%.

Impact on Liquidity

• The CRR cut is expected to inject ₹2.5 trillion of primary liquidity by end-November 2025.
• Since January, RBI has infused a total of ₹9.5 trillion in durable liquidity, including:
  • ₹5.2 trillion via Open Market Operations (OMO).
  • ₹2.1 trillion through long-term VRRs.
  • ₹2.2 trillion via USD/INR buy-sell swaps.
• As a result, daily demand for short-term VRR fell, and balances under Standing Deposit Facility (SDF) averaged ₹2 trillion during April–May.

TET

4. National Investment and Infrastructure Fund (NIIF)

Why in News?

The Union Finance Minister recently chaired the 6th Governing Council meeting of NIIF, reviewing its performance, partnerships, and future strategies. Here’s a detailed overview of NIIF and its role in India’s infrastructure growth.

What is NIIF?

• Definition: A government-backed investment platform mobilizing long-term capital for infrastructure and strategic sectors in India.
• Structure: Operates as a Sovereign Wealth Fund (SWF)-linked asset manager with independent decision-making.
• Headquarters: Mumbai
• Nodal Ministry: Ministry of Finance (Dept. of Economic Affairs)
• Established: 2015 (Announced in Union Budget 2015-16)

Key Features of NIIF

1. Public-Private Fund Structure

• Government Stake: 49%
• Private Investors (51%): Includes Abu Dhabi Investment Authority (ADIA), Temasek (Singapore), Canada Pension Plan Investment Board (CPPIB), and others.

2. SEBI-Registered AIF

• Registered as a Category II Alternative Investment Fund (AIF) in December 2015.

3. Professional Management

• CEO & MD: Sanjiv Aggarwal (Appointed Feb 2024)
• Managed by a seasoned investment team.

4. Strong Financial Growth

• Assets Under Management (AUM): ₹30,000+ crore (~$4.9 billion)
• Catalyzed Investments: ₹1.17 lakh crore in infrastructure projects.

5. Global & Domestic Partnerships

• Collaborates with sovereign wealth funds, pension funds, and multilateral banks (ADB, AIIB, NDB).

Governing Council of NIIF

• Chairperson: Union Finance Minister
• Role: Advises on strategy, governance, capital mobilization, and fund deployment.
• Meeting Frequency: Annual (to align with evolving mandates).

Functions of NIIF

1. Capital Mobilization

• Attracts domestic & global investments for infrastructure development.

2. Investment Management

• Deploys equity & debt in commercially viable projects:
• Transport (roads, ports, airports)
• Energy (renewables, power grids)
• Digital Infrastructure
• Urban Development (smart cities, logistics)

3. Strategic Partnerships

• Builds investment platforms with global institutions (e.g., Green Growth Equity Fund with UK govt).

4. Policy Alignment

• Supports national initiatives like:
• Make in India
• Green Energy Transition
• Gati Shakti (Multi-Modal Connectivity)

Why NIIF Matters?

• Bridges India’s infrastructure funding gap (~$1.5 trillion needed by 2030).
• Attracts foreign investments while maintaining strategic control.
• Drives sustainable & inclusive growth in key sectors.

5. RBI Defends Role in Subvention Scheme Scandal as Supreme Court Probes Builder-Bank Nexus

Context:

The Supreme Court of India is examining a major financial scandal involving banks, real estate developers, and subvention housing schemes, after hundreds of aggrieved homebuyers alleged harassment and fraud due to misuse of sanctioned home loans.

Key Highlights:

• What is the Subvention Scheme?
  • In this scheme, banks directly disburse home loan amounts to builders.
  • Builders are required to pay EMIs until possession of flats is given to homebuyers.
  • However, many builders defaulted on EMIs and construction, leading banks to demand repayment from innocent homebuyers.
• Supreme Court Intervention:
  • SC, citing misuse and harassment, has ordered a CBI probe into the ‘unholy nexus’ between builders and banks.
  • It also provided interim relief to buyers:
    • Barred coercive recovery actions
    • Stopped cheque bounce cases against homebuyers
  • SC remarked, “A rich man (bank) gave money to another rich man (builder), and the poor man (buyer) is now left in the lurch.”
• RBI’s Response to the SC:
  • Filed an affidavit stating it has fulfilled its regulatory duties under the Banking Regulation Act.
  • RBI cited:
    • 2015 Guidelines directing loan disbursals to be linked to construction stages — no upfront disbursal for incomplete projects.
    • August 2022 circular on recovery practices, mandating ethical and non-coercive recovery methods by banks and agents.
  • However, it acknowledged banks violated these norms by releasing funds before verifying construction progress.
• Regulatory Gap and Enforcement Failure:
  • Despite RBI’s circulars, banks allegedly ignored norms and enabled siphoning of funds by builders.
  • RBI has distanced itself from direct responsibility, saying enforcement is within the banks’ operational discretion.

Current Status:

• CBI probe underway as per SC orders.
• RBI maintains that it cannot be held liable, while SC is likely to determine the accountability framework across regulators, lenders, and developers.

6. The Digital Rupee (e₹)

Context:

The Digital Rupee (e₹) is a central bank digital currency (CBDC) issued by the Reserve Bank of India (RBI), functioning as a digital version of cash. Unlike cryptocurrencies, it is a legal tender backed by the RBI.

Key Features of e₹:

• Digital Cash Alternative – Works like physical money but stored in a digital wallet.
• Programmable Payments – Can be restricted for specific uses (e.g., subsidies, employee benefits).
• Offline Transactions – Future feature allowing payments without internet.
• UPI Compatibility – Can scan UPI QR codes, converting e₹ into regular money in the merchant’s account.
• No Interest Earned – Like holding cash, it does not accrue interest.

How It Differs from UPI & Cryptocurrencies

• vs. UPI: UPI transfers money between bank accounts, while e₹ is a direct digital cash substitute.
• vs. Cryptocurrencies: Unlike decentralized cryptos (e.g., Bitcoin), e₹ is centralized and RBI-backed.

Current Status (2025)

• Circulation: Grew from ₹234 crore (2024) to ₹1,016.5 crore (March 2025).
• Users: 6 million across 17 banks.
• Pilot Banks: SBI, HDFC, ICICI, Axis, Yes Bank, and others.
• Future Plans: Cross-border payments, reducing remittance costs, and expanding offline transactions.

Anonymity & Usage

• Not Fully Anonymous – Requires KYC (like a bank account).
• Wholesale e₹ (e₹-W) – Used for interbank settlements, not retail transactions.

The Digital Rupee aims to modernize payments, reduce cash dependency, and enhance financial inclusion in India’s digital economy.

7. RBI Flags High Interest Rates and Coercive Recovery in Microfinance Sector

Context:

RBI Deputy Governor M. Rajeshwar Rao, speaking at a Mumbai event on 5 June 2025, raised serious concerns over the deteriorating conditions in India’s microfinance sector. His speech was uploaded to the RBI website on 10 June 2025.

Key Highlights:

Persistent Sectoral Issues

• The microfinance sector is caught in a vicious cycle of:
  • High interest rates
  • Over-indebtedness of borrowers
  • Coercive loan recovery practices
• These systemic problems are creating stress across microfinance portfolios, particularly affecting rural borrowers and low-income households.

Rising Financial Stress in FY26

• Banks have reported growing delinquency and stress in microfinance loans since the beginning of FY26.
• Contributing factors include:
  • High borrower leverage
  • Decline in rural incomes
  • Election-related disruptions

Interest Rates and Margins

• Some lenders, despite access to low-cost capital, are charging excessively high margins, beyond industry norms.

RBI’s Recommendations

• Credit Assessment: Strengthen borrower evaluation to prevent over-leverage.
• Recovery Practices: Strictly avoid coercive recovery tactics.
• Cost Structure Scrutiny: Lenders must introspect whether high yields are driven by operational inefficiencies or unjustified business models.
• Rethinking Incentives: Rao warned that flawed organizational structures and incentive systems could lead to “perverse outcomes” for borrowers.

BS

8. Jana Small Finance Bank Applies to RBI for Universal Bank License

Context:

Jana Small Finance Bank (Jana SFB) has officially applied to the Reserve Bank of India (RBI) for approval to transition into a universal bank, marking a major step in its growth strategy.

Key Highlights:

• Strategic Expansion: The move aligns with Jana SFB’s long-term vision for financial inclusion, innovation, and sustainable banking.
• Strong Performance: Since receiving its SFB license in 2017, Jana has built a robust retail and MSME-focused franchise, expanding both digital and physical reach nationwide.
• Solid Financials: The bank has demonstrated consistent growth in deposits, loans, and asset quality, positioning it well for the transition.
• Next Growth Phase: With a growing deposit base, national presence, and digital capabilities, Jana believes it is ready to operate as a full-fledged universal bank.

What Is Universal Banking?

Universal banking is a system in which banks provide a wide variety of comprehensive financial services, including those tailored to retail, commercial, and investment services.

RBI’s Licensing Guidelines Universal Banking Licences in India (2016)

The Reserve Bank of India introduced the ‘On Tap’ Licensing Policy in August 2016 for private sector universal banks. This policy allows eligible applicants to seek a banking licence at any time, enhancing dynamism and competition in the Indian banking sector.

Eligibility Criteria

• Individuals/Professionals:
  • Must be Indian residents
  • Minimum 10 years of senior-level experience in banking and finance
• Private Entities/Groups:
  • Resident-owned and controlled
  • Minimum 10 years of successful operational track record
  • Large industrial houses excluded but may hold up to 10% stake
• NBFCs:
  • Resident-controlled with a 10-year track record
  • Must meet additional criteria prescribed by RBI
• Small Finance Banks (Conversion Eligibility):
  • Net worth ≥ ₹1,000 crore
  • Scheduled bank status
  • 5-year satisfactory operational record
  • Gross NPA ≤ 3% and Net NPA ≤ 1% for past two years
  • Mandatory listing on stock exchanges

This move could further strengthen India’s banking sector, promoting competition and inclusion.

9. Finance Ministry Pushes PSBs for Faster Loan Disbursal

Context:

To enhance credit flow to India’s handloom sector, the Ministry of Finance has instructed Public Sector Banks (PSBs) to speed up the sanction and disbursement of loans to eligible weavers under the Pradhan Mantri MUDRA Yojana (PMMY). This comes under the National Handloom Development Programme (NHDP) and aims to support both working capital and term loan needs.

Key Highlights:

Digital Portal for Scheme Monitoring

• A centralised portal has been developed in partnership with Punjab National Bank to streamline:
  • Submission of claims for margin money
  • Interest subvention reimbursement
  • Credit guarantee fees
• PSBs are required to process and submit these claims through the Handloom Weaver Mudra Portal.

Credit Benefits for Individual Weavers and Organisations

• Margin Money Support:
  • 20% of the loan amount, up to:
    • ₹25,000 for individual weavers/entrepreneurs
    • ₹20 lakh for handloom organisations (₹2 lakh per 100 weavers)
• Interest Subvention:
  • Concessional interest rate of 6% for 3 years, capped at 7%
• Credit Guarantee Fee: Waived for up to 3 years

Boost to Market Access for Weavers

• 150,000 weavers have been onboarded on the Government e-Marketplace (GeM) to enable direct sales to govt. departments.
• Ministry of Textiles has partnered with 23 e-commerce platforms and launched the ‘Indian Handmade’ portal to facilitate online sales by artisans and weavers.

10. SBI Offloads ₹1,556 Crore Stressed Loan of Regen Powertech to Clean Up Books

Context:

State Bank of India (SBI) is selling its ₹1,556 crore stressed loan exposure to Regen Powertech Private Ltd (RPPL), a South India-based wind turbine manufacturer, as part of efforts to clean up its balance sheet.

Key Details of the Sale

• Outstanding Principal: ₹580 crore (as of March 2025).
• Auction Method: Swiss Challenge (SBI already has an initial bid and is inviting counter-bids for price discovery).

Why Is SBI Selling?

• Bad Debt Cleanup: SBI has been actively reducing NPAs (Gross NPA improved to 1.82% in FY25 from 2.24% YoY).
• Recovery Efforts: In FY25, SBI recovered ₹17,213 crore through upgrades, cash recoveries, and write-offs.

SBI’s Broader NPA Strategy

• Stronger Asset Quality: Economic recovery and risk containment helped reduce NPAs.
• Aggressive Recovery: Using auctions, settlements, and write-offs to improve financial health.

This sale is part of SBI’s ongoing efforts to strengthen its balance sheet and focus on profitable lending.

Source: Business Standard

Economy

1. India-EFTA Trade Deal to Take Effect by September 2025

Context:

India’s Trade and Economic Partnership Agreement (TEPA) with the European Free Trade Association (EFTA)—comprising Switzerland, Norway, Iceland, and Liechtenstein—will come into force by September 2025, according to Commerce and Industry Minister Piyush Goyal.

Key Highlights:

• TEPA Agreement Timeline:
  • Signed on March 10, 2024.
  • Now ratified by all four EFTA countries’ parliaments.
  • Switzerland’s citizen objection period ends on July 10, post which implementation is expected in September.
• Historic Investment Commitment:
  • The deal includes a $100 billion investment commitment over 15 years from EFTA nations.
  • This is the first time India has incorporated investment commitments into a free trade agreement.
• Dedicated Investment Facilitation Desk:
  • India has set up a dedicated EFTA desk under Invest India to assist EFTA companies in investing in India.
• Sectoral Focus & Business Engagement:
  • Sectors showing strong investment interest: biotech, cybersecurity, healthcare, and machinery manufacturing.
  • Goyal is on a 4-day visit to Switzerland and Sweden with a 90-company Indian business delegation.
  • He met with over a dozen Swiss companies; several are exploring pilot launches in the Indian market.
• Bilateral Trade Outlook:
  • Goyal emphasized the trade pact will bring policy predictability, stability, and continuity for investors.
  • A 100-company Swiss delegation visited India in February 2025, showing growing bilateral interest.

India’s Global Trade Strategy Update:

• India is accelerating talks with the European Union (EU) and United States (US).
  • EU deal may conclude “faster than expected”.
  • With the US, India is ready to finalize a deal based on low-hanging fruits—i.e., areas with mutual consensus.
• Other active trade negotiations:
  • New Zealand, Chile, Peru, Oman.
  • India has already signed an early harvest deal with Australia.

Agriculture

1. Farm Pond Irrigation Model in Rajasthan’s Kukas Village

Context:

A climate-resilient rural water conservation initiative in Kukas village, Jaipur district, Rajasthan, is demonstrating the impact of scientifically designed farm ponds. This model aims to capture seasonal monsoon run-off and transform farming livelihoods by ensuring year-round irrigation.

Key Features of the Kukas Model:

• Seasonal Water Harvesting Potential: 10 crore litres of monsoon run-off
• Farm Pond Design:
  • Plastic-lined
  • Built on 5% of each farmer’s land
  • Secured with fencing
• Project Scope:
  • Model inspired by similar success in Dausa district (250 farm ponds)

Water Security and Agricultural Benefits:

• Jaipur district’s farming relies 99.4% on groundwater
• Groundwater extraction is 2.22 times the recharge rate
• Farm ponds designed to:
  • Support rabi and kharif crops
  • Recharge groundwater
  • Enable perennial crop cycles, livestock, and horticulture
  • Encourage crop diversification (e.g., groundnut, cowpea)

Sustainability and Development Impact:

• Promotes climate adaptation, livelihood diversification, and food security
• Can facilitate dairy units, food processing, and market linkages

2. UN Declares 2026 as International Year of the Woman Farmer

Context:

The United Nations General Assembly has designated 2026 as the International Year of the Woman Farmer, with support from over 100 co-sponsoring countries. This historic resolution acknowledges women’s critical contributions to global agriculture and calls attention to the persistent challenges they face, including limited land rights, restricted access to markets, and climate vulnerabilities.

Key Statistics:

• Women produce 60–80% of food in developing countries.
• They represent 39% of agricultural labour in South Asia.
• In India, women comprise 80% of economically active workers in agriculture, but own only:
  • 14% of agricultural land
  • 8.3%, as per the latest National Family Health Survey (NFHS)

Challenges Faced by Women Farmers

• Limited land ownership reduces access to credit and insurance.
• Technology gap restricts access to mobile-based advisories.
• Undervalued labour and limited role in decision-making.
• Climate change increases their household and farming burdens.

Government Initiatives in India

• Mahila Kisan Sashaktikaran Pariyojana (MKSP): Skill-building and resource access.
• Sub-Mission on Agricultural Mechanisation: 50–80% subsidy for equipment.
• National Food Security Mission (NFSM): 30% budget allocation for women in several States/UTs.

Innovative Approach: ENACT Project (Assam)

• Full Form: Enhancing Climate Adaptation of Vulnerable Communities through Nature-based Solutions and Gender Transformative Approaches.
• Location: Nagaon district, Assam.
• Implemented by: UN World Food Programme (WFP) with the Government of Assam.
• Funded by: Government of Norway.
• Key Features:
  • Weekly climate-smart advisories via mobile phones
  • Flood-resilient crop varieties (e.g., submergence-tolerant rice)
  • Women’s smart seed production and market linkage systems
  • Climate Adaptation Information Centres for knowledge dissemination

Outcomes and Impact:

• Over 300 women farmers connected via IT-based platforms in 17 villages.
• Improved access to climate-resilient practices and technologies.
• Community-led climate adaptation and livelihood diversification models.

Recommendations and Policy Directions:

• Collect granular, gender-disaggregated data for targeted interventions.
• Design credit tools and agri-equipment suited to women’s needs.
• Strengthen agri-value chains owned and operated by women.
• Promote collective action, self-help groups, and market access.
• Integrate women in climate resilience planning, seed systems, and food processing.

3. India-US Trade Deal: Agricultural Negotiation

India has grouped US agricultural imports into three strategic buckets based on economic and political sensitivity:

1. Non-Negotiable (No Concessions)
   • Commodities: Rice, Wheat
   • Reason: Politically sensitive staples critical for food security, large farmer base
   • Stance: No tariff reductions or import concessions
2. Very Sensitive (Limited Concessions)
   • Commodities: Apples, others tied to regional farmer interests
   • Mechanisms: May allow restricted imports via:
     • Minimum Import Price (MIP)
     • Tariff-Rate Quotas (TRQs)
   • Rationale: Protect interests of states like Himachal Pradesh, Uttarakhand
3. Liberal (High-Value Niche Imports)
   • Commodities: Almonds, Pistachios, Walnuts, Blueberries
   • Target Consumer: Urban affluent class
   • Stance: Willing to drastically reduce tariffs for strategic trade-offs

Trade Priorities

• Focus on market access
• US wants to narrow trade deficit with India
• Political will on both sides seen as key to success

Implications:

• India’s nuanced approach balances trade diplomacy with domestic farmer interests
• Liberal concessions in niche segments show openness to strategic give-and-take
• Sensitive and non-negotiable categories protect food security and political stability

Facts To Remember

1. Dhoni among seven players inducted into ICC’s Hall of Fame

Former India captain Mahendra Singh Dhoni was inducted into the ICC’s Hall of Fame for 2025 along with six other cricketers, including two female players. Dhoni is the 11th Indian to make the elite club. Dhoni was joined by Australia’s Matthew Hayden, South African duo of Graeme Smith and Hashim Amla as well as former New Zealand skipper Daniel Vettori as the five male cricketers in the list.

2. Portugal fights back to edge Spain on penalties, wins second title

Ruben Neves scored the decisive spot kick after Alvaro Morata missed as Portugal beat Spain 5-3 via penalties, following a 2-2 draw, to claim its second Nations League title.

3. Fintech Startup Cred Raises $72 Million at $3.5 Billion Valuation, Eyes Public Listing by 2027

Indian fintech major Cred has raised ₹617 crore (approx. $72 million) in a new funding round, at a valuation of $3.5 billion, marking a significant drop from its $6.4 billion valuation in 2022.

4. Army to get new air def boost with ₹30,000cr QR-SAM deal

The defence ministry will soon take up the case for a preliminary nod to a Rs 30,000 crore proposal to procure three regiments of the new indigenous quick reaction surface to air missile (QR-SAM) systems for the Army.

5. Maharashtra, Karnataka Dominate India’s FDI Inflows in FY25; Delhi’s Share Declines Sharply

What is FDI?
Foreign Direct Investment (FDI) is a cross-border capital inflow where a foreign entity invests in and gains control over business operations in another country. In India, FDI is regulated by the Department for Promotion of Industry and Internal Trade (DPIIT) under automatic and government approval routes. It is a critical non-debt capital source for development.

6. VRR Auction Discontinue

The Reserve Bank of India (RBI) said it would discontinue daily variable rate repo (VRR) auctions to infuse shortterm liquidity in banks.

7. NHAI Mulls Public InvIT for Retail Participation in Highway Monetisation

The National Highways Authority of India (NHAI) is exploring the launch of a public infrastructure investment trust (InvIT) to widen retail investor participation in its asset monetisation efforts, as part of an aggressive pipeline under the second National Monetisation Pipeline (NMP).