Daily Current Affairs (DCA) 12 December, 2025

Daily Current Affairs Quiz
12 December, 2025

National Affairs

1. Working Paper on Generative AI & Copyright

Source: IE

Context:

The Government of India released a Working Paper on Generative AI & Copyright, introducing the country’s first structured framework for regulating AI training on copyrighted works. The model aims to balance creator rights with AI innovation, addressing disputes such as ANI vs OpenAI (Delhi HC, 2024–25) over unauthorized use of Indian content.

Key Issues Identified

• Unlicensed Use of Creative Works
  • Generative AI models train on Indian books, articles, films, music, and news without permission, violating Section 14 of the Copyright Act.
  • Example: ANI alleged OpenAI used its news content without consent.
• Legal Ambiguity
  • No explicit Text & Data Mining (TDM) exception exists.
  • Section 52 exceptions do not cover commercial AI training, leaving foreign AI developers in a legal grey zone.
• Absence of Compensation Mechanisms
  • Creators gain nothing from AI usage despite their works enhancing model quality.
  • Example: India’s informal music sector (~1.4 crore people) earns no royalties from AI training.
• Cultural and Economic Risks
  • AI outputs may overshadow or replace Indian folk art, local music, and regional storytelling, eroding cultural diversity.
  • Large AI firms benefit commercially, while small and independent creators remain disadvantaged.

Objectives of the Framework

• Protect India’s creative economy and safeguard livelihoods in entertainment, media, design, and folk sectors.
• Foster AI innovation aligned with IndiaAI Mission, enabling startups to access high-quality, lawful datasets.
• Preserve cultural diversity and human creativity.
• Ensure fair revenue sharing for Indian creators whose works train AI models.
• Simplify licensing for AI developers, especially MSMEs and smaller players.

Key Recommendations

• Mandatory Blanket License
  • One license grants AI developers access to all lawfully acquired copyrighted works without individual permissions.
  • Enables Indian LLMs (e.g., Sarvam, Gan AI, Soket) to train on diverse content across languages and formats.
• Statutory Royalty Payments
  • Creators receive revenue-proportional royalties.
  • Provides organized income streams to informal sectors such as music and journalism.
• Copyright Royalties Collective for AI Training (CRCAT)
  • Central government-designated body to collect license fees and distribute royalties to creators.
• Royalty Rate-Setting Committee
  • Government-appointed committee ensures fair, transparent, and periodically reviewed royalty rates with judicial oversight.
• Single-Window Licensing & Compliance
  • One license → One payment → Nationwide coverage.
  • Reduces transaction costs, especially for startups and smaller AI developers.

2. Deepavali Inscribed on UNESCO’s Intangible Cultural Heritage of Humanity

Source: News on Air

Context:

Deepavali, India’s festival of lights, has been officially inscribed on UNESCO’s Representative List of the Intangible Cultural Heritage of Humanity during the 20th Session of the Intergovernmental Committee held in New Delhi. The recognition highlights the festival’s cultural significance, social practices, and global reach.

About Intangible Cultural Heritage (ICH)

Living traditions, expressions, rituals, performing arts, craftsmanship, and knowledge systems recognised by communities as part of their cultural identity.

Background:

• UNESCO adopted the Convention for the Safeguarding of the Intangible Cultural Heritage (2003); enforced in 2006.
• India ratified the convention in 2005.

Objectives:

• Safeguard living heritage and support practitioners.
• Promote cultural diversity, intergenerational transmission, community participation, and intercultural dialogue.

Features of the ICH Framework:

• Community-Based: Practices recognised by the communities who sustain them.
• Dynamic & Living: Includes both traditional and contemporary adaptations.
• Five Domains:
  1. Oral traditions and expressions
  2. Performing arts
  3. Social practices, rituals, and festive events
  4. Knowledge concerning nature and the universe
  5. Traditional craftsmanship
• Representative List: Highlights practices contributing to humanity’s cultural diversity.
• Safeguarding Measures: States must inventory, conserve, support practitioners, and report periodically.

3. Shilp Didi Programme

Source: PIB

Context:

The Union Textiles Secretary announced that the Shilp Didi Programme, a government initiative to empower women artisans, has significantly increased their incomes, with some participants earning over ₹5 lakh annually. The scheme combines skill development, digital training, and market access to strengthen financial independence for women in the handicrafts sector.

About the Programme

• Nature: Economic empowerment initiative for women artisans (“Shilp Didis”) via training, market access, and entrepreneurship support.
• Launch: 2024, with a 100-day pilot phase starting in June.
• Implementing Agency: Ministry of Textiles, through the Office of the Development Commissioner (Handicrafts).

Objective:

• Promote financial independence among women artisans.
• Enhance design, business, and digital marketing skills.
• Enable access to modern sales channels, including physical exhibitions and e-commerce platforms.

Key Features

• E-Training Modules: Entrepreneurship, regulatory compliance, social media, and e-commerce onboarding.
• Marketing Opportunities: Access to Dilli Haat, craft fairs, and curated events.
• E-Commerce Integration: Nationwide and global visibility for handcrafted products.
• Coverage:
  • 100 women artisans from 72 districts across 23 states.
  • 30 handicraft categories, including textiles, pottery, metal crafts, embroidery, and more.
• Capacity Building: Supported through National Handicrafts Development Programme (NHDP) clusters.

Science & Tech

1. Europe Launches World’s Largest Planetary-Defense Drill on 3I/ATLAS

Source: ET

Context:

Europe has initiated the largest-ever planetary-defense simulation, focused on tracking the fast-approaching object 3I/ATLAS. The exercise is a global collaboration testing the detection, tracking, and response mechanisms for near-Earth threats.

• Launched by: European Space Agency (ESA), NASA, and the UN’s International Asteroid Warning Network (IAWN).
• Objective: Assess Earth’s readiness to respond to high-velocity celestial objects while identifying gaps in international coordination, data-sharing, and public communication.

Purpose of the Drill

• Test Early-Warning Systems – Evaluate tracking networks and detection efficiency for fast-moving objects.
• Simulate Emergency Response – Model deflection missions, civil-defense mobilization, and evacuation scenarios.
• Strengthen International Coordination – Measure collaboration among space agencies like NASA, ESA, ISRO, CNSA, JAXA, and UN-IAWN.
• Assess Public Communication – Address misinformation, manage citizen alerts, and test psychological preparedness.

Key Features

• Real-World Object: 3I/ATLAS provides authentic high-velocity challenges (~60 km/s).
• Multi-Agency Participation: Includes defense space commands and international space organizations.
• Public Communication Modules: Preparedness for misinformation and societal response.
• Geopolitical Context: Exercises run alongside ESA’s record budgets and global space security considerations involving the U.S., China, and India.

Banking/Finance

1. Is the Falling Rupee a Cause for Alarm?

Source: TH

Context:

The Indian rupee recently depreciated beyond ₹90 per US dollar, sparking political debate and public concern. Economists Madan Sabnavis and Ranen Banerjee assess whether this decline signals deeper economic issues or is a short-term market phenomenon.

Why Is the Rupee Falling?

The depreciation stems from a combination of fundamental and sentiment-driven factors:

• Trade & Current Account Deficit: Imports outpace exports, increasing dollar demand.
• FPI Outflows: Global investors seeking higher short-term returns abroad.
• Import Growth: Rising faster than exports, pushing up forex demand.
• Policy Uncertainty: India–U.S. tariff negotiations affecting market sentiment.
• Limited RBI Intervention: Suggesting the fall is within the central bank’s tolerance.

Insight: The rupee’s movement reflects forex market demand–supply pressures, not a collapse in confidence.

Does a Falling Rupee Signal Economic Weakness?

No. Key macro fundamentals remain strong:

• Robust GDP growth
• Benign inflation levels
• Adequate forex reserves (~11 months of imports)
• Fiscal consolidation on track
• Supportive monetary policy, including recent rate cuts

Conclusion: The depreciation is largely sentiment-driven and transient, not a sign of structural weakness.

Potential Benefits and Drawbacks of a Weaker Rupee

Benefits:

• Boosts export competitiveness, offsetting global tariff pressures.
• Improves services exports, supporting rupee earnings and corporate profitability.
• May enhance employment and consumption via higher exporter incomes.

Drawbacks:

• Costlier imports, raising input costs for firms.
• Minor imported inflation (~0.3–0.4% for a 5% depreciation).
• Pressure on import-dependent sectors like fertilizers and energy.

Net Impact: Mixed effects across sectors; overall neutral to mildly positive.

Should India Be Alarmed?

Consensus among economists: No immediate cause for alarm.

• Depreciation has not reached destabilising levels.
• Over the long term, the rupee has outperformed many EM currencies.
• Volatility, rather than the level itself, poses challenges for businesses.
• RBI’s role is to smooth volatility, not defend a fixed exchange rate.

2. Rural Demand Revival as Incomes Rise: NABARD Survey

Source: TOI

Context:

The eighth round of NABARD’s Rural Economic Conditions and Sentiments Survey (RECSS), presents the clearest evidence of a broad-based revival in rural demand, rising incomes and improved household well-being over the past year. RECSS is a high-frequency, bi-monthly assessment being conducted by NABARD since September 2024.

Key Findings:

Strong Consumption Growth Driven by Real Purchasing Power

• 80% of rural households consistently reported higher consumption over the past year.
• 67.3% of monthly income is spent on consumption — the highest share since survey inception.
• Supported by GST rate rationalisation, lower inflation, and welfare transfers.
• Indicates broad-based demand revival, not limited to specific income groups.

Income Growth at Record High Levels

• 42.2% of households reported income growth — the best performance so far.
• Only 15.7% experienced income decline — the lowest ever recorded.
• Future outlook extremely positive:
  • 75.9% expect income to rise next year, the highest optimism since Sept 2024.

Rural Investment Activity Gains Momentum

• 29.3% of households increased capital investment, the highest across all rounds.
• Reflects renewed asset creation in agriculture and non-farm activities.
• Investment driven by income and consumption strength, not distress borrowing.

Formal Credit Access Reaches New High

• 58.3% of households accessed only formal credit sources, up from 48.7% in Sept 2024.
• Indicates improved financial inclusion and banking penetration.
• Informal credit share still ~20%, highlighting scope for further formalisation.

Welfare Transfers Support Demand Without Dependency

• Government transfers supplement about 10% of average monthly income.
• Includes benefits like:
  • Subsidised food, electricity, water, LPG, fertilisers
  • Education support, pensions, transport benefits
• For some households, transfers exceed 20% of income, stabilising consumption without distorting work incentives.

Inflation Perceptions at One-Year Low

• Average perceived inflation fell to 3.77%, below 4% for the first time.
• 84.2% perceive inflation at or below 5%.
• Nearly 90% expect inflation to remain below 5% in the near term.
• Enhanced real incomes and purchasing power.

Improved Loan Repayment Capacity

• Share of income allocated to loan repayment has declined.
• Lower inflation and easing interest rates have reduced repayment stress.
• Improved balance sheets are enabling higher productive investment.

Positive Feedback on Rural Infrastructure & Services

High satisfaction reported in:

• Road connectivity
• Education facilities
• Electricity supply
• Followed by improvements in drinking water and health services
  These gains reinforce income growth and long-term rural prosperity.

About NABARD’s RECSS

• Frequency: Bi-monthly
• Coverage: Nationwide rural households
• Focus Areas: Income, consumption, inflation, credit, investment, welfare and expectations
• Purpose: Capture real-time rural economic conditions and household sentiment

3. RBI Eases Rules on Current, CC and OD Accounts

Source: ET

Context:

The Reserve Bank of India (RBI) has relaxed its framework governing the opening and operation of current accounts (CA) and overdraft (OD) accounts, reducing restrictions that earlier tied businesses closely to their lending banks. The revised norms aim to improve operational flexibility for companies while maintaining safeguards against diversion of funds.

Comparison: Current Account vs Cash Credit vs Overdraft

Aspect	Current Account (CA)	Cash Credit (CC) Account	Overdraft (OD) Account
Nature	Deposit account	Working capital loan facility	Short-term credit facility
Primary Purpose	Routine business transactions	Financing day-to-day operational expenses	Meeting short-term liquidity gaps
Interest on Balance	No interest paid	Not applicable	Not applicable
Interest Charged	Not applicable	Charged only on utilised amount	Charged only on overdrawn amount
Withdrawals	Unlimited	Up to sanctioned credit limit	Beyond balance up to approved limit
Credit Limit	Not applicable	Sanctioned based on stock, receivables, or drawing power	Sanctioned limit based on creditworthiness or security
Revolving Nature	Not applicable	Yes, repaid amount can be reborrowed	Yes
Linkage	Base account for business operations	Usually linked to CA	Linked to CA or Savings Account
Security	Not required	Generally secured (inventory, receivables)	Can be secured or unsecured
Cost of Credit	Not applicable	Lower than OD	Generally higher than CC
Typical Users	Businesses, firms, institutions	Manufacturing, trading, MSMEs	Businesses and individuals
Common Uses	Payments, receipts, settlements	Inventory purchase, wages, operating costs	Temporary cash flow mismatches

Key Changes Announced:

Higher Loan Threshold for Restrictions

• Earlier, businesses with borrowings of ₹5 crore or more could open current accounts only with their lending banks.
• The RBI has now raised this threshold to ₹10 crore.
• Borrowers with loans below ₹10 crore can open CA/OD accounts with any bank, subject to conditions.

Cash Credit Accounts Unrestricted

• RBI has removed all previous restrictions on cash credit accounts. These facilities can now be offered by banks based on customer needs without caps, recognising their unique role in working capital finance.
• Cash Credit Accounts: Banks can continue to provide CC facilities based on customer needs without restriction. CC accounts remain operationally distinct from current or OD accounts as they are primarily linked to working capital requirements.

Wider Choice of Banks

• The new framework applies to most banking categories, including:
  • Public and private sector banks
  • Small finance banks
  • Local area banks
  • Regional rural banks
  • Co-operative banks
• Payments banks remain excluded.

Rules for Large Borrowers (₹10 crore and above)

• A bank can operate a CA/OD account if it has at least 10% of the borrower’s total exposure or 10% of fund-based exposure.
• If no single bank meets this criterion, the top two lenders by exposure may operate these accounts.
• Rules allow an extra bank of the borrower’s choice if only one bank currently has exposure, subject to a no-objection certificate (NOC) from the lending bank.

Non-Lending Banks and Collection Accounts

• Non-lending banks cannot freely operate CA/OD accounts for large borrowers.
• They may, however, operate collection accounts, provided funds are transferred to the main operating account within two working days.
• RBI now classifies current, CC and OD accounts collectively as “transaction accounts”, giving a uniform regulatory approach and simplifying compliance for banks and customers alike.

Background: Why the Change Matters

• In August 2020, RBI imposed tight restrictions to curb diversion of funds, effectively banning standalone current accounts for borrowers with CC/OD limits.
• While prudent, the rules forced firms to consolidate payments and collections with a narrow set of banks, increasing operational rigidity.
• The revised framework balances risk control with ease of doing business.

Exempted Accounts

Certain accounts remain outside these restrictions, including:

• Accounts opened under FEMA requirements
• Accounts mandated by law
• Accounts maintained by regulated financial entities for core activities

4. SEBI Notifies Leadership and Governance Framework for Market Infrastructure Institutions (MIIs)

Source: Mint

Context:

The Securities and Exchange Board of India (SEBI) has formalised a comprehensive framework to restructure leadership, reporting lines and governance responsibilities across Market Infrastructure Institutions (MIIs), including stock exchanges, clearing corporations and depositories. The changes aim to strengthen regulatory oversight, risk management and operational resilience.

Key Objectives

• Enhance independence and accountability within MIIs
• Strengthen regulatory, risk and technology governance
• Reduce concentration of power in the Managing Director’s office
• Improve transparency in senior appointments and performance oversight

Major Structural Changes

1. Mandatory Appointment of Two Executive Directors (EDs)

MIIs must appoint:

• ED (Critical Operations): Responsible for core operational functions
• ED (Regulation, Compliance & Risk): Responsible for regulatory affairs, compliance, risk management and investor grievances

Both EDs:

• Will be full-time executives
• Will sit on the governing board of the MII
• Will report directly to the Managing Director (MD)

2. Transparent Appointment Process

• Appointments must be advertised in all editions of at least one national daily
• MIIs must forward at least two candidates per post to SEBI
• Proposed compensation packages must be disclosed upfront
• Compensation terms cannot be altered without prior board approval
• Appointment process must begin at least two months before the incumbent’s term ends

3. Oversight by Public Interest Directors (PIDs)

• PIDs will oversee annual performance assessments of both EDs
• SEBI may grant temporary exemptions to MIIs facing genuine operational challenges

Revised Reporting and Oversight Structure

Executive Reporting

• Both EDs report to the MD
• Department heads, including:
  • Chief Technology Officer (CTO)
  • Chief Information Security Officer (CISO)
  • Compliance Officer
  • Chief Risk Officer (CRO)
    will now report to their respective EDs, not directly to the MD

Independent Committee Interactions

• Standing Committee on Technology will meet the ED (Critical Operations) quarterly without the MD present
• Regulatory Oversight Committee and Risk Management Committee will meet the ED (Regulation & Risk) on similar terms
• Committees will submit independent performance assessments to the Nomination and Remuneration Committee

Facts To Remember

1. Axis AMC to Launch Third Private Credit Fund

• Timeline: Launch expected next week
• Fund House: Axis Asset Management Co. (AMC)
• Fund Type: Third Private Credit Alternative Investment Fund (AIF)
• Target Corpus: Up to ₹2,000 crore

2. India’s Retail Inflation Rises to 0.71% in November

India’s retail inflation rose to 0.71 per cent in November this year on an annual basis, up from a record low of 0.25 per cent recorded in October.

3. Sudha Murty Inaugurates ‘Craftkatha 2025’ to Celebrate India’s Handicraft Heritage

Rajya Sabha MP, Sudha Murty, today inaugurated “Craftkatha – 2025”, an exhibition showcasing artisans from across India, as part of the National Handicrafts and Heritage Week 2025 celebrations in New Delhi. 

4. Textiles Ministry Launches Nationwide Chaupal Program to Empower Artisans

The Ministry of Textiles today organized the Nationwide Rollout of the Chaupal Program in New Delhi. 

5. 8th India-Austria Foreign Office Consultations Held in Vienna

Secretary (West), External Affairs Ministry, Sibi George and Austria’s Secretary General for Foreign Affairs, Nikolaus Marschik, held the 8th round of India-Austria Foreign Office Consultations in Vienna.

6. Project Cheetah Sees Second Generation Born in Kuno National Park

Project Cheetah marks a significant step in India’s biodiversity restoration efforts, aiming to re-establish a once-lost species. Launched on 17 September 2022, when Prime Minister Narendra Modi released eight cheetahs from Namibia into Kuno National Park