Daily Current Affairs (DCA) 13 March, 2025

Daily Current Affairs Quiz
13 March, 2025

International Affairs

1. India-Mauritius Relations

Context:

India is widening its scope of role vis à vis Mauritius security, economy, and culture much in the same manner as its larger Indian Ocean strategy. The latest agreements convey geopolitical maneuvering, economic integration, and soft power diplomacy.

Indian Influence in the Indian Ocean

• Police Academy and Maritime Information Sharing Center
  • India helps establish Mauritius’ Police Academy and Maritime Information Sharing Centre, as part of its regional security architecture.
• Aim
  • Strengthen counter piracy efforts, intelligence sharing, and maritime domain awareness in the Western Indian Ocean area.
• Impression
  • Measures India in terms of security presence in the region, countering thereby Chinese maritime expansion.
  • Enforces Mauritius as a regional security hub, thus strengthening the Colombo Security Conclave.
• Chagos Dispute: India’s Diplomatic Leverage
  • India strengthening Mauritius on the sovereignty of Chagos boosts India’s leadership in Indian Ocean governance.
• Significance of Chagos
  • Renter of Diego Garcia under control of U.S. military from U.K., which makes it a geopolitical hotspot.
• India’s Angle
  • Amplifies through Colombo Security Conclave, Indian Ocean Rim Association, and Indian Ocean Conference.
  • Strategic neutrality by not offending Western allies.
• Implication
  • Increased credibility of India among small island nations, mostly seeing military bases as evil.
  • Balances Western strategic partnerships and yet shows the regional influence.

Economic and Financial Integration: Ties Made Stronger on Both Sides

• Currency Agreement: The national currency agreement between India and Mauritius is designed to
  • Promote local currency usage in current and capital account transactions.
  • Establish an Indian rupee clearing centre in Mauritius, extending to COMESA (Common Market for Eastern and Southern Africa) countries.
• Implication
  • Positions Mauritius as India’s financial gateway to Africa.
  • Eases dependence on USD, establishing a multipolar trade ecosystem.
  • Greater investment flows, enhanced trade efficiency, and economic stability in bilateral engagements.
• Development Assistance: New Indian sponsored development projects worth Mauritian rupee 500 million would strengthen India’s commitment to
  • Infrastructure and socio economic development.
  • Strengthening Mauritius’ dependence more on Indian funding than Chinese funding.
• Implication
  • Solidifies India’s role as a developmental partner in Africa and the Indian Ocean region.
  • Counters China’s Belt and Road Initiative.

Source: TH

2. Jio Signs Deal to Bring SpaceX’s Starlink Internet to India

Context:

Within a day of the announcement of the partnership between Bharti Airtel and Elon Musk’s SpaceX for Starlink broadband services in India, Reliance Jio Platforms Ltd (JPL) announced a similar agreement with SpaceX for its services.

What is SpacesX’s Starlink?

Starlink is a satellite internet constellation operated by Starlink Services, LLC, an international telecommunications provider that is a wholly owned subsidiary of American aerospace company SpaceX, providing coverage to over 100 countries and territories. It also aims to provide global mobile broadband. Starlink has been instrumental to SpaceX’s growth.

Significant Aspects

• Jio will make Jio Starlink available after SpaceX has obtained all approvals to operate in India.
• Jio will offer retail sales of Starlink equipment via its physical locations and online portals.
• Jio will create support processes for Starlink consumers.
• Starlink will be further used to boost JioAirFiber and JioFiber to provide high speeds in places that tend to miss out on broadband.
• Jio and SpaceX are looking into additional partnership opportunities to improve India’s digital infrastructure.

Since both Jio and Airtel tied up with SpaceX, India’s satellite broadband sector will be developing significantly in the near future and help in better connectivity to remote locations.

Source: TH

3. US Tariffs of 25% Extra on Steel & Aluminium: Impact on India

Context:

U.S. President Donald Trump officially increased tariffs on all steel and aluminum imports to 25% on Wednesday (March 12, 2025), promising that the taxes would help create U.S. factory jobs at a time when his seesawing tariff threats are jolting the stock market and raising fears of an economic slowdown.

Overview of US Tariffs

• Effective Date: Wednesday
• Additional Duty: 25% on steel & aluminium imports
• Mutant Scope of Impact: This time there are no exemptions for any country unlike previous tariffs under Trump’s first term.

Effects on Indian Steel & Aluminium Exports

• Total Exports to US: 5 billion dollars (Steel & Aluminium)
• Exports of Steel Products (Chapter 73): 3 billion dollars (Mainly MSME sector)
• Immediate Effects:
• $1 billion worth of goods in transit crossing higher tariffs 60 days’ voyage to the US.
• A greater impact on Stainless steel & industrial use of steel fasteners.

Government & Industry Response

• Steel Secretary Sandeep Poundrik
  • A limited impact of such tariffs on large carbon steel producers since their exports to the US are very minimal.
  • Exports of steel to the USA from India are less than 100,000 metric tonnes, that is a very small fraction of the 145 million tonnes produced in 2024.

International & Policy Reactions to the Tariff Imposition

• The response of the EU: Retaliatory tariffs on agricultural and industrial goods from the US.
• India’s Trade Position
  • In fact, India imports more raw iron and steel & aluminium from the US than it exports finished goods.
  • Such retaliation might hurt the US far more than India.
• Trade Expert Ajay Srivastava: Trade ties with the US need to be reconsidered and countermeasures like those in 2019 could be reinstated.

Important Takeaways

• Limited impact on large Indian steel companies due to very little export of carbon steel.
• MSMEs will face severe impact when it comes to the export of stainless steel & industrial use steel.
• India’s muted response arises several questions over its trade strategy as contrasted to the swift retaliation from the EU.
• Counter tariffs seem likely to affect the USA, raw materials exports to India in turn.

National Affairs

1. Palk Bay Fisheries Dispute

Context:

The recent remarks by Sri Lankan Leader of the House Bimal Rathnayake highlight the deep-rooted complexities of the Palk Bay fisheries dispute, a long-standing issue between India and Sri Lanka. His strong demand for “decisive action” underscores the growing frustration of Sri Lankan Tamil fishermen over illegal fishing and bottom trawling by Indian fishermen.

Key Issues in the Fisheries Dispute

a) Environmental Concerns: The Impact of Bottom Trawling

• Bottom trawling is ecologically destructive, leading to:
  • Over-exploitation of fish stocks.
  • Damage to marine biodiversity and habitats.
  • Disruptions in fish breeding cycles.
• While banned in Sri Lanka, it is still practiced by Indian fishermen, worsening tensions.

b) Economic Asymmetry: Wealth Disparity Among Fishermen

• Indian fishermen (Tamil Nadu & Puducherry)
  • Have larger, mechanized vessels and access to financial resources.
  • Are driven by economic necessity, as their available fishing area in Indian waters is limited by coral reefs and regulatory constraints.
• Sri Lankan Tamil fishermen (Northern Province)
  • Are still recovering from the civil war.
  • Primarily rely on traditional, small-scale fishing and lack the resources to compete with their Indian counterparts.

c) Geopolitical Sensitivities and Policy Challenges

• The International Maritime Boundary Line (IMBL) between the two countries is often breached by Indian fishermen.
• The Sri Lankan Navy has taken action (arrests, boat seizures), but this escalates diplomatic tensions.
• Sri Lanka’s strong stance under NPP signals a potential policy shift toward stricter enforcement.

The Policy Dilemma

a) The Challenge of Weaning Fishermen Off Bottom Trawling

• Deep-sea fishing has been suggested as an alternative, but its adoption remains slow due to:
  • Higher costs (longer voyages, advanced vessels).
  • Traditional mindset (generational fishing practices).
  • Lack of adequate financial support (₹1,600-crore deep-sea fishing scheme has seen limited success).
• Policy Proposal:
  • Merging Palk Bay Deep-Sea Fishing Scheme with Pradhan Mantri Matsya Sampada Yojana (₹20,050 crore fund) to increase financial incentives for deep-sea fishing adoption.

b) The Role of Alternative Livelihoods

• Sustainable fishing models must be explored, including:
  • Seaweed farming
  • Open-sea cage aquaculture
  • Ocean ranching
• These options would reduce over-reliance on Palk Bay fishing while ensuring economic stability.

c) Diplomatic and Negotiation Imperatives

• The Sri Lankan government’s silence on resuming fishermen talks is a policy gap.
• Talks were last held in 2016, and India has consistently supported dialogue.
• Strategic Timing for Negotiations:
  • The April fishing ban on India’s east coast (2-month duration) provides a window for discussions.
  • Prime Minister Modi’s visit to Sri Lanka in April presents an opportunity for Colombo to proactively engage in resolving the dispute.

The Way Forward: A Multi-Level Resolution Approach

a) Short-Term Actions

1. Immediate resumption of fishermen-level talks, hosted by Sri Lanka, to build trust and cooperation.
2. Strict regulation of bottom trawling in Tamil Nadu, with penalties and monitoring mechanisms.
3. Strengthening of alternative livelihood programs with financial and technical support.

b) Long-Term Solutions

1. Deep-sea fishing adoption incentives must be expanded through a merged financial scheme.
2. Bilateral fisheries management framework: A structured approach for sustainable resource sharing.
3. Maritime security cooperation: Coordinated patrolling mechanisms to prevent border violations.

A Diplomatic and Policy-Driven Resolution is Needed

The Palk Bay fisheries dispute is a multi-dimensional issue that requires a balanced approach between environmental sustainability, economic security, and geopolitical stability. While Sri Lanka is within its rights to demand stronger enforcement, a collaborative resolution through structured dialogue and policy innovation remains the most viable path forward.

Source: TH

2. Indian Railways’ Role in Mission Amrit Sarovar

Context:

The Indian Railways’ involvement in Mission Amrit Sarovar marks a strategic move to integrate water conservation efforts with infrastructure development. By leveraging railway construction activities to rejuvenate waterbodies, the initiative aims to enhance water security, promote environmental sustainability, and optimize resource utilization.

Understanding Mission Amrit Sarovar

a) Objectives

• Water conservation and rejuvenation: Address water scarcity by constructing or reviving 75 ponds per district.
• Strengthening groundwater levels: Improve surface and groundwater availability in drought-prone and water-stressed regions.
• Community participation (Jan Bhagidaari): Ensure public involvement for long-term sustainability.
• Climate resilience: Mitigate climate change impacts by enhancing water storage and recharge capacity.

b) Progress So Far

• Launched: April 2022.
• Ponds completed (as of October 2024): 68,000+.
• Phase 2 focus: Strengthening climate resilience and ensuring long-term water availability.

Role of Indian Railways in Mission Amrit Sarovar

a) Key Contributions

• Excavation & Desilting: Railways will dig or rejuvenate waterbodies in areas near railway lines.
• Identifying Suitable Sites: In collaboration with district authorities, potential pond locations will be selected near railway construction sites.
• Utilizing Excavated Material: The soil and material extracted during pond creation will be repurposed for railway embankments, reducing waste and cost.
• Coordination with the Rural Development Ministry: Ensuring efficient implementation by working in tandem with state and local governments.

b) Expected Impact

• Water Security Enhancement: Increased surface water storage capacity will boost irrigation, drinking water availability, and groundwater recharge.
• Cost-effective Infrastructure Development: Repurposing excavated soil for railway projects minimizes waste disposal costs and material procurement expenses.
• Community and Ecological Benefits:
  • Improved rural livelihoods through better water access.
  • Reduced soil erosion and enhanced ecological balance.
  • Increased agricultural productivity in adjacent areas.
• Sustainability and Climate Adaptation:
  • Supports climate-resilient infrastructure.
  • Helps mitigate drought effects in vulnerable areas.

Challenges and Implementation Hurdles

a) Land and Site Identification Issues

• Availability of suitable land near railway sites might be limited.
• Potential conflicts over land usage between railway construction and water conservation needs.

b) Quality of Excavated Soil

• Not all excavated soil will be suitable for embankment construction.
• Additional processing may be needed, increasing logistics and operational costs.

c) Coordination Between Agencies

• Multiple stakeholders involved (Railways, Rural Development Ministry, State Governments, Local Communities) may create bureaucratic delays.
• Ensuring smooth collaboration and fund allocation is crucial.

d) Maintenance and Long-Term Sustainability

• Preventing pond encroachments and silt accumulation requires continuous monitoring and community engagement.
• Lack of regular desilting and maintenance mechanisms could reduce long-term effectiveness.

Policy and Strategic Recommendations

a) Strengthening Interagency Coordination

• Establish joint task forces between Railways, Rural Development Ministry, and State Governments for efficient execution.
• Digital monitoring systems to track site selection, excavation progress, and fund utilization.

b) Ensuring Soil Suitability Before Excavation

• Conduct preliminary geotechnical analysis to determine soil quality before excavation.
• Develop alternative usage strategies for excavated material unfit for embankments.

c) Community Involvement for Sustainable Maintenance

• Engage local stakeholders in pond maintenance and upkeep through village-level water committees.
• Introduce incentive-based models for community participation.

d) Periodic Impact Assessments

• Conduct regular water availability assessments to measure the effectiveness of rejuvenated ponds.
• Use satellite mapping and AI-driven analytics to monitor water retention and ecosystem restoration.

A Model for Infrastructure-Integrated Water Conservation

The Indian Railways’ role in Mission Amrit Sarovar represents a synergistic approach to combining water conservation with infrastructure development. While challenges such as land availability, soil suitability, and interagency coordination exist, strategic planning and community engagement can ensure long-term success.

Source: TH

3. Automated Permanent Academic Account Registry (APAAR) ID

Context:

The Automated Permanent Academic Account Registry (APAAR) ID intends to standardize student records with DigiLocker and the Academic Bank of Credits (ABC). The Education Ministry says that enrolments are voluntary, but CBSE has instructed all schools to get a 100% registration, making it difficult for them to opt out.

Key Highlights:

• Compulsory imposition
  • School and state (e.g. Uttar Pradesh) pressure students to enroll which contradicts the volunteer status claim.
• Data privacy risks
  • Sensitive student data is collected without adequate legal protections.
• Aadhaar dependency issues
  • Linking APAAR with Aadhaar has delayed enrolment owing to document mismatch and compulsorily made it an indirect requirement for school benefits.
• Illegalities
  • The Supreme Court (K.S. Puttaswamy v. Union of India, 2019) said Aadhaar cannot be mandatory for education, yet APAAR is making it virtually so.

Public Push back and Advocacy

• Organizations such as the Internet Freedom Foundation (IFF) and Software Freedom Law Centre (SFLC) appeal that APAAR violates privacy rights.
• Some parents have resisted the enrolment, however, the pressure of the states may restrict future ceasing of enrollment.

Recommendations

• Ensure real voluntariness by disallowing coercion at schools.
• Pass robust data protection legislation for the students’ information protection.
• Provide alternative ways of enrollment (like school ID instead of Aadhaar).
• Make Aadhaar verification easier to avoid bureaucratic obstacles.

While APAAR intends digitization of education, people are compelled, concerned about the data, and dependent on Aadhaar raising more serious issues. The government should strike a balance in between education reforms and protecting students’ rights to ensure voluntary participation and legal compliance.

Source: TH

4. Oilfields (Regulation and Development) Amendment Bill, 2024

Context:

The Oilfields (Regulation and Development) Amendment Bill, 2024 introduces key structural changes aimed at enhancing ease of doing business, clarifying legal definitions, and streamlining petroleum operations. The bill replaces outdated laws from 1948 (last amended in 1969) and adapts India’s regulatory framework to modern technological and commercial realities.

Key Reforms Introduced in the Bill

Reform Area	Key Change
Delinking Petroleum from Mining	Introduces “Petroleum Lease” as a separate category from a mining lease, removing legal ambiguities.
Clear Granting & Extension of Leases	Provides legal clarity on how petroleum leases are issued and extended.
Expanded Hydrocarbon Scope	Uses the term “mineral oils” instead of just “oils,” bringing more hydrocarbons under regulation.
Dispute Resolution Mechanism	Introduces a new mechanism for resolving disputes in exploration and production (E&P) activities.

Implications for India’s Energy Sector

Enhanced Ease of Doing Business

• By removing outdated mining references, the bill aligns India’s petroleum regulations with global industry standards.
• The move will attract greater foreign investment and encourage more private players to enter the exploration & production (E&P) sector.
• Reducing regulatory uncertainty will accelerate approvals and streamline lease extensions, making it easier for companies to operate.

Boost to Domestic Oil & Gas Production

• The bill comes at a time when India relies heavily on imports for 85% of its crude oil needs.
• By clarifying lease terms and broadening hydrocarbon categories, the government aims to stimulate domestic production and reduce import dependence.
• The introduction of “mineral oils” expands exploration opportunities beyond just conventional crude oil.

Improved Investor Confidence

• Clear lease terms and dispute resolution mechanisms will lower risks for energy companies.
• Private and public sector parity ensures that no undue advantage is given to state-owned enterprises, making the sector more competitive.

Alignment with Energy Transition Goals

• While the bill focuses on fossil fuels, it aligns with India’s medium-term energy security needs.
• As renewables scale up, ensuring stable hydrocarbon supplies remains critical for energy transition stability.
• The bill provides a regulatory framework for newer forms of hydrocarbons like unconventional gas.

Challenges & Potential Risks

Challenge	Impact
Implementation Efficiency	Faster approvals will depend on bureaucratic responsiveness and coordination among ministries.
Balancing Fossil Fuels & Renewables	The bill prioritizes fossil fuel expansion at a time when India is trying to increase its renewable energy share.
Regulatory Clarity in Execution	While the bill provides a framework, interpretation and execution by regulatory bodies will determine its success.

The Oilfields (Regulation and Development) Amendment Bill, 2024 is a long-overdue reform that modernizes petroleum regulations, improves investor confidence, and aims to boost domestic oil & gas production. However, effective implementation and balancing fossil fuel development with clean energy commitments will be key to ensuring its long-term success.

Source: The Indian Express

5. PM-KUSUM 2.0

Context:

PM-KUSUM 2.0: The Ministry of New and Renewable Energy (MNRE) is working on an updated version of the Pradhan Mantri Kisan Urja Suraksha evam Utthaan Mahabhiyan (PM-KUSUM) scheme. The proposal is being prepared for approval by the Expenditure Finance Committee (EFC). National Bioenergy Programme – Phase II: MNRE is also developing a proposal for the second phase, even as Phase-I runs until March 2026.

Parliamentary Panel Observations & Recommendations

Expectations for PM-KUSUM 2.0

• Should be more robust and flexible than the current version (launched in March 2019).
• Needs to incorporate learnings from the first phase.

Concerns on Bioenergy Programme

• The ministry has not synchronized targets and allocations for Phase II, despite Phase I nearing completion.

PM Suryaghar Muft Bijli Yojana

• The committee urges MNRE to accelerate actual installations under this scheme.

Thermal & Hydro Power Capacity Expansion

• The Power Ministry should coordinate with states & agencies to resolve challenges in meeting capacity addition targets.

Future Outlook

• PM-KUSUM 2.0 could enhance renewable energy adoption among farmers through solar and decentralized energy projects.
• Efficient execution of Phase-II of the Bioenergy Programme is crucial for sustained progress.
• Faster execution of PM Suryaghar Muft Bijli Yojana is necessary to achieve solar power targets.
• Timely thermal & hydro power expansion will help in energy security & grid stability.

The success of these initiatives will depend on effective implementation, inter-agency coordination, and financial approvals.

Banking/Finance

1. Self-Regulatory Organization (SRO)

The Reserve Bank of India (RBI) invited applications from entities to becomea self regulatory organization (SRO) in the account aggregator (AA) space by June 15. According to RBI, the AA ecosystem is distinct in its complexity, involving exchange of data amonga diverse array of regulated entities (REs) operating under varied regulatory environments.

What is an SRO?

A Self-Regulatory Organization (SRO) is a non-governmental entity with the authority to establish and enforce industry regulations and professional standards. These organizations operate independently but may be subject to governmental oversight to ensure compliance with broader policies.

In financial markets, SROs—such as stock exchanges—aim to protect investors by enforcing ethical standards and professional integrity.

Key Takeaways

• Independent Authority: SROs set industry-specific rules and regulations.
• Enforcement Mechanisms: They ensure compliance through penalties or expulsion.
• Governmental Oversight: Though independent, SROs often operate under regulatory supervision.
• Industry-Driven: Businesses and professionals can form SROs to maintain standards and competitiveness.
• Financial Sector Examples: FINRA, NYSE, and IIROC regulate financial markets and member institutions.

How SRO Functions?

Though privately operated, SROs exercise regulatory influence within their industries. Their power comes from internal governance and agreements among industry players, rather than direct government mandates.

Authority and Responsibilities

• Regulation & Compliance
  • Members must adhere to established rules.
  • Violations can lead to penalties or expulsion.
• Membership Standards
  • Entry requirements (e.g., education, experience) are set.
  • Ethical conduct is mandated.
• Investor & Consumer Protection
  • Educating investors on best practices.
  • Safeguarding against fraud and unethical behavior.
• Dispute Resolution
  • Many SROs provide arbitration services for disputes.

Note: Governmental regulations take precedence over SRO policies.

Examples of SROs

Financial Industry SROs

• Financial Industry Regulatory Authority (FINRA) – Regulates broker-dealers in the U.S.
• New York Stock Exchange (NYSE) – Maintains trading rules and investor protections.
• Investment Industry Regulatory Organization of Canada (IIROC) – Oversees Canadian securities markets.
• Chicago Board of Trade (CBOT) – Regulates commodity trading.

Professional & Industry-Specific SROs

• American Bar Association (ABA) – Sets legal ethics and professional standards.
• American Institute of Certified Public Accountants (AICPA) – Regulates accounting practices.
• Association of Mutual Funds in India (AMFI) – Governs mutual fund operations in India.

Example: FINRA’s Role

• Licenses securities dealers.
• Conducts audits to ensure compliance.
• Oversees arbitration in financial disputes.
• Operates under SEC oversight, meaning federal regulations override FINRA rules.

SROs in Business & Trade

How They Operate?

• Members create and enforce their own rules.
• Violators face fines, reprimands, or expulsion.
• While autonomous, they may be subject to government regulation.

Comparing SROs & Government Regulators

Feature	SROs	Government Regulators (e.g., SEC)
Authority	Industry-based	Legislative mandate
Oversight	Self-governed, with some external regulation	Fully government-controlled
Compliance Enforcement	Member-driven	Legally binding
Examples	FINRA, NYSE, AMFI	SEC, RBI, EU regulators

SROs play a vital role in regulating industries by setting standards, ensuring compliance, and protecting stakeholders. While they function independently, they remain subject to government oversight where applicable. Their role is crucial in industries where government intervention is minimal or slow, allowing for self-governance, innovation, and ethical business practices.

Source: BS

2. Corporate Bond Market Sees Heavy Issuances

Context:

The corporate debt market is witnessing aggressive fundraising despite rising yields and liquidity constraints, reflecting a complex interplay of funding needs, market conditions, and policy expectations. Major issuers including REC, NTPC, Canara Bank, and PFC are set to collectively raise ₹ 22,000 crore, pushing total issuances to over ₹ 25,000 crore in the next 7–10 days.

Why Are Corporates Rushing to Raise Debt?

• Liquidity Tightening & Advanced Tax Outflows
  • System liquidity deficit exceeds ₹ 1 trillion, exacerbated by tax outflows and sustained credit demand.
  • The RBI’s ₹ 50,000 crore OMO may provide short-term relief, but liquidity constraints will likely persist.
• Surge in State Borrowing
  • State Development Loan (SDL) auctions could surpass calendar estimates, adding further supply pressure on the debt market.
  • This intensifies the competition for funds, pushing yields higher.
• Rising Bond Yields & Market Expectations
  • Heavy issuances, negative liquidity, and global uncertainties have led to higher yields on corporate bonds.
  • Market participants do not expect any meaningful softening in yields before the RBI’s April policy review.
• Front-Loading of Fundraising
  • With macro risks (inflation, global rate cycles, oil prices) persisting, corporates may be locking in funds early to avoid further yield spikes.

Sector-Specific Implications

• Banking & Financial Services
  • Canara Bank’s ₹ 4,000 crore Tier-II bond issuance signals that banks are securing capital buffers amid regulatory shifts and potential asset quality risks.
  • The credit-to-deposit ratio at 79% suggests sustained credit growth pressure on deposits, making bond financing a strategic move.
• Infrastructure & Power Sector
  • REC and PFC’s combined ₹ 14,000 crore issuance reflects continued funding demand in power financing.
  • NTPC’s ₹ 4,000 crore, 15-year bond issuance indicates long-term project financing needs, aligning with India’s infrastructure push.

Market & Policy Outlook

• RBI’s April Policy Meeting Is Crucial
  • Markets will closely watch RBI’s stance on liquidity management and rate guidance.
  • If policy signals remain neutral-to-hawkish, yields could stay elevated, impacting future bond pricing.
• Global & External Factors
  • U.S. Federal Reserve’s rate trajectory remains a key risk—higher U.S. yields could trigger outflows from Indian debt markets.
  • Geopolitical risks (oil prices, global trade tensions) could add to inflationary pressures, influencing policy decisions.

Balancing Act Between Funding Needs & Market Risks

The current surge in bond issuances highlights a strategic push by corporates to secure funding amid liquidity constraints and uncertain market conditions. However, with higher yields, external headwinds, and fiscal pressures, the coming months will be critical in determining how corporates navigate the evolving debt landscape. Investors and issuers alike will closely track RBI’s policy signals, global rate movements, and liquidity trends to assess further borrowing strategies.

3. SEBI’s New RPT Disclosure Norms

Context:

On February 14, 2024, the Securities and Exchange Board of India (SEBI) issued stricter disclosure requirements for Related-Party Transactions (RPTs) to

• Enhance transparency in corporate governance.
• Ensure fairness in RPT approval processes.
• Standardize compliance under Listing Obligations and Disclosure Requirements (LODR).

These guidelines were formulated by the Industry Standards Forum (ISF) which includes Assocham, CII, and Ficci in consultation with SEBI and stock exchanges.

Key Disclosure Requirements

Companies must now

• Provide extensive financial details of RPTs.
• Justify missing data, if any.
• Submit valuation reports and peer comparisons.
• Explain the benefits of RPTs in shareholder approval statements.
• Obtain audit committee and shareholder approval for RPTs.

Industry Concerns & Criticism

a) Compliance Burden & Operational Delays

• Stricter documentation requirements may increase compliance costs for businesses.
• Operational delays could arise due to extensive approvals and data submissions.

b) Criticism by Former SEBI Chairperson M. Damodaran

• Described the guidelines as an “elaborate document with inconsistencies.”
• At a March 5 governance and risk management event, he remarked:
  “If you take these rules seriously, you will have a problem. It is better to read them, laugh at them, and move on.”
• In a newsletter by Excellence Enablers, his governance advisory firm, he questioned:
  “Are these rules a procedural prescription to eliminate RPTs in the future? Wouldn’t it have been better to simply state that RPTs will not be allowed except in rare circumstances?”

c) Perceived Regulatory Overreach

• RPTs are legitimate business activities under the Companies Act and LODR.
• However, SEBI’s complex documentation requirements may hinder normal business operations.

Implications for Corporates & Investors

a) Positive Aspects

• Increased transparency
  • Stricter disclosures may reduce conflicts of interest and protect minority shareholders.
• Stronger corporate governance
  • Improved compliance could lead to greater investor confidence.

b) Negative Aspects

• Higher costs and compliance burden
  • Companies may struggle to meet the detailed reporting standards.
• Risk of overregulation
  • Excessive disclosure requirements could discourage legitimate business transactions.
• Impact on business growth
  • Companies reliant on intra-group transactions (e.g., conglomerates) may face delays in decision-making.

A Need for Balance

SEBI’s new RPT guidelines reflect a strong push for transparency, but their complexity and compliance costs could hinder businesses. The real challenge is ensuring accountability without stifling legitimate transactions. Whether SEBI will revise these norms based on industry concerns remains to be seen.

Source: Mint

4. RBI Examines Banks Derivatives Exposures

Context:

India’s central bank, the Reserve Bank of India (RBI), has launched a review of derivatives exposures at both private and state-run banks. This follows IndusInd Bank’s recent disclosure of lapses in its forex derivatives accounting, leading to a 2.35% hit to its net worth. The RBI seeks to determine whether this issue is isolated or part of a broader risk across the banking sector.

RBI’s Investigation Focus

The RBI has asked banks to submit details on:

• Overseas borrowings and deposits.
• Forex hedge positions and effectiveness.
• Accounting and valuation methods for derivatives transactions.

Key Concern

• The central bank is reviewing whether banks have properly accounted for hedging costs in forex transactions.
• It aims to ensure that IndusInd’s underestimation of hedging costs is not a sector-wide issue.

IndusInd Bank’s Disclosure

• On March 11, 2024, IndusInd Bank admitted a forex derivatives accounting lapse.
• This resulted in a 2.35% reduction in its net worth, prompting regulatory scrutiny.

Regulatory Context

• Before April 1, 2024, banks were allowed to engage in internal swaps, where one cash flow is exchanged for another.
• With new investment norms in effect, the RBI is keen to prevent systemic risks from poor derivatives risk management.

Industry Implications

For Banks

• Stricter oversight of forex and derivatives trading.
• Potential regulatory changes to improve transparency in hedging practices.

For Investors & Market Stability

• Short-term volatility in banking stocks amid regulatory scrutiny.
• Increased confidence in risk management if the RBI strengthens oversight.

Strengthening Risk Controls

• The RBI’s proactive review signals enhanced vigilance over financial risks in the banking system.
• If systemic issues are identified, the central bank may introduce stricter regulations on forex hedging and derivatives accounting.

Source: BS

5. LIC, New India Assurance, GIC Re remain D-SIIs 

Context:

State-owned insurers LIC, The New India Assurance, and GIC Re have retained their D-SIIs designation for 2024-25, as per IRDAI. Implications of D-SIIs Status:

• These insurers are considered crucial to financial system stability due to their size and market influence.
• They are subject to enhanced regulatory supervision to prevent systemic risks.

Approval for Valueattics Reinsurance – First Private Reinsurer

• Valueattics Reinsurance received IRDAI’s approval for registration to operate exclusively in reinsurance.
• Key Promoters:
  • Prem Watsa-backed FAL Corporation (majority stakeholder).
  • Kamesh Goyal (Go Digit founder) through Oben Ventures LLP.
• Significance:
  • First private reinsurer licensed under the revamped regulatory framework.
  • ₹210 crore initial paid-up capital for operations.
  • Strengthens competition in India’s reinsurance sector.

Other Regulatory Discussions & Initiatives

• Bima Sugam (Insurance e-Marketplace): Reviewed progress on this digital insurance platform.
• Indian Risk-Based Capital (RBC) Framework & Risk-Based Supervision: Ongoing regulatory reforms for a more risk-sensitive approach to capital requirements.
• State Insurance Plan:
  • Decentralized model involving governance at State, district, urban, and gram panchayat levels.
  • Aims to identify protection gaps and improve coverage at the grassroots level.

Impact & Future Outlook

• Strengthening Financial Stability:
  • Retention of D-SIIs status ensures stringent oversight on key insurers.
• Boost to Reinsurance Market:
  • Entry of Valueattics Re enhances competition and risk diversification in the reinsurance industry.
• Digital & Localized Insurance Expansion:
  • Bima Sugam & State Insurance Plan could improve insurance accessibility and penetration, especially in rural India.

The Indian insurance sector is witnessing significant regulatory advancements, with a focus on risk-based supervision, digital transformation, and fostering competition in reinsurance.

Economy

1. India’s Retail Inflation Eases

Context:

India’s retail inflation eased to a seven-month low of 3.61 per cent in February 2025, down from 4.31 per cent in January,  as food price pressures softened, according to government data released on Wednesday. This brings inflation below the Reserve Bank of India’s (RBI) medium-term target of 4 per cent for the first time since August 2024.

Key Highlights:

• Retail Inflation Falls
  • The number came down to a 3.61% in February, which is a 7 month low, primarily attributed to a fall in food prices.
• Food Inflation Cools
  • Slumping from 6% in January to 3.75%, with price drops seen in vegetables ( 1.07%), pulses ( 0.35%), and eggs ( 3.01%).
• Industrial Growth Soars
  • 5% grew IIP in January, an eight month high, and this was driven by 5.5% growth in manufacturing.
• Inflation in Rural vs. Urban
  • Rural inflation: 3.79% (down from an earlier 4.59%)
  • Urban inflation: 3.32% (down from an earlier 3.87%)
• Graves Concerns
  • The price surges are, however, sharp as building up on edible oil (+16.36%) and fruits (+14.82%), in part due to currency depreciation.
• Policy Effect
  • It strengthened the repo rate cut anticipation in the forthcoming April 7 MPC meeting, with inflation below the RBI target.

Source: BS

2. India’s GDP Growth & Economic Trends

Context:

The latest national accounts data provide crucial insights into India’s economic trajectory, highlighting both positive momentum and potential constraints. A closer look at growth drivers, sectoral performance, investment trends, and policy implications reveals key challenges for achieving a sustained 6.5%+ growth trajectory.

Understanding Q3 2024-25 GDP Growth

• GDP Growth (Q3 2024-25): 6.2%, up from 5.6% in Q2, but lower than 6.5% in Q1.
• Sectoral Breakdown
  • Agriculture: Strong 5.6% growth, likely driven by better monsoons & rural demand, but not a sustainable long-term driver.
  • Manufacturing: Weak at 3.5%, despite an improvement from 2.1% in Q2. High input costs, weak external demand, and slow capex cycles continue to dampen momentum.
  • Services (Trade & Hospitality): Gained 6.7% vs. 6.1% in Q2, benefiting from consumer recovery & festive season demand.

The marginal recovery in Q3 raises questions about the sustainability of a projected 7.6% Q4 growth, which appears optimistic given weak private investment and fiscal constraints.

Why Did GDP Growth Dip in Q2? Can Q4 Meet the 7.6% Target?

Private Consumption (PFCE)

• Consumption Contribution to GDP Growth
  • Q1: 4.3 pp | Q2: 3.3 pp | Q3: 4.1 pp | Q4 Target: 5.3 pp
• Key Insight: Q2 slowdown was driven by weaker consumption growth, which fell to 3.3 percentage points from 4.3 in Q1.
• Challenge for Q4: PFCE must grow at 9.9% to sustain a 7.6% GDP growth rate, a level not seen in recent years.
• Structural Headwind: Consumption growth is tied to wage growth, employment, and rural demand, all of which remain uneven.

A 9.9% PFCE growth target is unrealistic given past trends, making the 7.6% Q4 GDP growth target unlikely.

Will Government Capex Bridge the Gap?

• Investment Contribution to Growth (GFCF)
  • Q1: 2.3 pp | Q2: 2.0 pp | Q3: 1.8 pp | Q4 Target: 2.1 pp
• Key Concern: Government capital expenditure is the only major lever that can bridge the investment gap.
• Capex Execution Challenge
  • Government has spent ₹7.57 lakh crore (till Jan 2025).
  • Needs to spend ₹2.61 lakh crore in Feb-Mar, but past trends show only ₹1.81 lakh crore average spending in these months.
  • Shortfall in capital expenditure could lower Q4 GDP growth, requiring a downward revision of the 6.5% full-year estimate.

If capex falls short, Q4 GDP growth will likely be lower than 7.6%, potentially dragging full-year growth below 6.5%.

Revised GDP Data: What Do Upward Revisions Reveal?

• Upward revisions indicate higher economic momentum, but also raise questions about past estimates’ reliability.
• 2023-24 GDP Growth Revised to 9.2% (from 8.2%)
  • Manufacturing growth revised up by 2.4 pp → Indicates underestimated industrial activity.
  • Financial & real estate sector revised up by 1.9 pp → Stronger-than-expected services rebound.
• 2024-25 GDP Growth at 6.5% (sharp 2.7 pp fall vs. 2023-24)
  • Key cause: Gross capital formation (investment) growth fell from 10.5% to 5.8%, highlighting slower investment momentum.

Frequent sharp revisions impact policy-making by creating uncertainty in investment planning and fiscal forecasting.

Medium-Term Growth: Can India Sustain 6.5%+?

• Economic Survey 2025-26 Projection: 6.3% – 6.8% growth (midpoint: 6.55%)
• Investment-Led Growth Remains Key
  • Real Investment Rate (GFCF/GDP): 33.4% in 2024-25, supporting a 6.5%+ potential growth rate.
  • ICOR (Incremental Capital-Output Ratio): 5.1 (Avg. 2022-25) → Higher ICOR suggests diminishing investment efficiency, raising concerns about capital productivity.
• Savings Rate Challenge
  • 2023-24 nominal savings rate: 30.7%, below the pre-COVID avg. of 31.2%.
  • Policy Dilemma: Raising PFCE (consumption) to boost growth can lower savings, restricting investment capacity.

India’s medium-term strategy must focus on boosting savings & investment rather than relying on short-term consumption spikes.

Policy Implications & Key Risks

• Government capex must accelerate to sustain growth in 2025-26 & beyond.
• Manufacturing revival is crucial, given its weak momentum despite past revisions.
• Savings must rise to finance investment, avoiding excessive dependence on consumption-led growth.
• ICOR efficiency must improve to maximize output from investments.
• Consumption-driven growth is unsustainable without corresponding investment growth.
• Under-execution of capital spending poses a risk to Q4 GDP & long-term growth.

Growth Momentum at a Crossroads

While India’s GDP growth remains strong, the Q4 target of 7.6% appears overly optimistic due to weak private consumption, fiscal constraints on capex execution, and a slow manufacturing revival. Sustaining 6.5%+ medium-term growth requires a structural push in investment efficiency, savings growth, and industrial productivity, rather than short-term fiscal stimulus.

3. Moody’s Outlook on Indian Banks

Context:

Despite concerns regarding rising bad loans, Moody’s remains firm on the stable outlook for Indian banks.

Key Highlights of the Report

• Asset quality is under pressure
  • NPLs are expected to rise somewhere in the range of about 2.5 3.0% within 12 18 months.
  • Stress on unsecured retail loans microfinance and lending to small businesses is bringing in that increase.
• Corporate Loan Quality Remains Strong
  • Corporate loans are in good shape, supported by deleveraging and earnings growth.

Current State of NPLs

• Stark Decline in NPLs
  • Systemwide NPL ratio collapsed from 7.3% (in March 2024) to 2.6% (in September 2024).
  • Mostly because of recoveries and write offs of legacy bad loans.
• Factors supporting expected NPL increases
  • Slower economic growth in recent quarters.
• Impact of past interest rate hikes
  • Aging unsecured retail loans.
  • Nonetheless, unsecured retail loans constitute only 10% of total banking loans, and banks have good reserves against defaults.

Favorable Operating Conditions for Banks

• The Institute’s executive director foresees a supportive banking environment influenced by:
  • Government capital expenditures (capex) to boost infrastructure and industrial growth.
  • Tax cuts for the middle class households that would increase consumption.
  • Potential monetary easing that might reduce borrowing costs.

Loan Growth & Deposit Trends

• Balanced Growth Expected
  • Loan and deposit growth are expected to remain in tandem, while the Loan to Deposit Ratio (LDR) is expected to remain stable at ~80%.
• Key Banking Numbers (RBI) for Balance Date February 21, 2025
  • Credit to Deposit Ratio: 79% (last year 78%).
  • Growth in Bank Credit: 11.0% YoY.
  • Growth in Deposit: 10.3% YoY.

Economic Outlook & Conclusion

• GDP Growth of India
  • Likely to support banking growth as more than 6.5% in FY26 (ending March 2026) is expected.
• The Bottom Line
  • While moderate asset quality deterioration is expected, banks will remain stable on the balance between strong capital buffers and favorable economic conditions.
  • Loan quality by companies remains strong, while banks are well fortified against potential shocks.

4. India’s Digital Economy

Context:

India has established itself as a global leader in digital infrastructure and economic digitalization, ranking third globally in the overall digital economy. However, its user-level digital adoption lags significantly behind, ranking 28th out of 32 countries analyzed by ICRIER. This presents both challenges and opportunities for India’s digital expansion.

Key Findings

Metric	India’s Score (%)	Median Score (32 Countries)	Gap
Internet Access	58%	93%	-35%
Smartphone Usage	49%	82%	-33%
E-commerce Adoption	28%	52%	-24%
Wireless Coverage	99%	100%	-1%

Strengths of India’s Digital Economy

• Third-Largest Digital Economy
  • India’s overall digital economy score (35.9) is ahead of most developing nations but behind the U.S. (68.5) and China (62.5).
  • It has the second-largest mobile and internet network by number of users.
  • India leads in digital transactions volume and ICT service exports.
• Strong Digital Infrastructure
  • 99% of the population is covered by wireless internet, ensuring connectivity potential.
  • Digital public infrastructure (e.g., UPI, Aadhaar, ONDC) has enabled rapid economic digitization.

Challenges

• Digital Access Gap
  • Only 58% of Indians have internet access, leaving over 40% of the population digitally excluded.
  • In contrast, the median score for other countries is 93% internet access, meaning India has one of the largest digital access gaps globally.
• Low Smartphone Penetration
  • With 49% smartphone usage, India trails significantly behind the median (82%).
  • Limited affordability, digital literacy, and patchy connectivity in rural areas contribute to this gap.
• Slow E-commerce Adoption
  • Only 28% of Indians engage in e-commerce, well below the global median of 52%.
  • This suggests limited trust in digital payments, logistical constraints, and a preference for traditional retail.

Policy Implications & Growth Opportunities

India’s digital economy is expected to contribute nearly 20% of GDP by 2030, but user-level adoption needs to accelerate. Bridging the digital gap could unlock:

• Higher economic participation, especially for rural and underserved populations.
• More job creation in digital services, fintech, and e-commerce.
• Stronger domestic consumption via e-commerce and digital payments.

Recommendations for Accelerating Digital Adoption

• Expand Affordable Internet Access
  • Drive 5G expansion in rural areas.
  • Subsidize low-cost smartphones and data plans.
• Improve Digital Literacy
  • Scale up grassroots digital education initiatives to boost internet adoption.
  • Encourage public-private partnerships to promote online skills training.
• Enhance Digital Financial Inclusion
  • Strengthen consumer trust in digital payments and e-commerce.
  • Expand digital banking services to rural areas and small businesses.

A Digital Economy with Untapped Potential

India’s digital economy is booming, but it risks leaving large sections of its population behind due to low internet penetration, smartphone access, and e-commerce adoption. Closing these gaps will be critical to sustaining economic growth and maximizing India’s digital potential. With targeted policies and infrastructure expansion, India can bridge this divide and fully leverage its digital transformation.

5. The Global Challenge of Tax Evasion

Context:

Tax evasion and avoidance by multinational corporations (MNCs) and high-net-worth individuals (HNIs) pose significant challenges to governments worldwide, particularly in developing countries. These nations require tax revenues to:

• Improve infrastructure and human development.
• Address environmental challenges.
• Manage debt and fiscal deficits, which have worsened due to global economic disruptions like the pandemic and supply chain shocks.

What Is Tax Evasion?

Tax evasion is an illegal activity in which a person or entity deliberately avoids paying a true tax liability. Those caught evading taxes are generally subject to criminal charges and substantial penalties. To willfully fail to pay taxes is a federal offense under the Internal Revenue Service (IRS) tax code.

Common Strategies for Tax Avoidance

MNCs and HNIs exploit legal loopholes to shift profits to low-tax jurisdictions using tactics such as:

• Transfer Pricing Manipulation
  • Inflating service costs from subsidiaries in tax havens to shift profits.
• Artificially High Interest Payments
  • Taking loans from related entities in low-tax countries at excessive interest rates.
• Use of Intangible Assets
  • Registering trademarks, patents, and intellectual property (IP) in tax havens, forcing high-tax subsidiaries to pay royalties.
• Real Estate Investments
  • With the introduction of multilateral financial information exchange in 2017, tax evaders shifted wealth from offshore bank accounts to real estate to avoid financial scrutiny.

Case Study: Dubai has become a major destination for tax-related real estate holdings, with Indians reportedly owning 20% of foreign-owned properties some of which may be linked to tax evasion.

Global Policy Responses and Their Challenges

Major International Initiatives

• OECD’s BEPS Framework (2013)
  • The G20 tasked the OECD with addressing Base Erosion and Profit Shifting (BEPS).
  • A 15-point action plan was developed, with 140 countries working towards international tax coordination.
• The Inclusive Framework (2017)
  • Introduced multilateral exchange of financial information among banks.
  • Expanded to over 100 countries by 2023, reducing global bank secrecy and cutting offshore tax evasion by one-third.
• The 2021 Global Minimum Tax Agreement
  • 140+ countries agreed to a minimum corporate tax rate of 15%.
  • This was expected to increase global tax revenue by 10%, but actual collections fell far below expectations due to loopholes.

Persistent Challenges

Challenge	Impact
Loopholes & Tax Competition	Some nations offer incentives to attract corporations, continuing a “race to the bottom.”
Shell Companies	Billionaires use offshore shell firms to reduce tax payments below 0.5% of their wealth.
US Corporations & Tax Havens	Around 40% of profit shifting to tax havens is done by US-based MNCs, costing global tax systems nearly 10% of corporate tax revenues.
Lack of US Participation in CRS	The Common Reporting Standard (CRS) for financial transparency lacks US involvement, limiting its global effectiveness.

Proposed Policy Reforms

Recommendations from the Global Tax Evasion Report

• Increase Global Minimum Tax to 25% – A stronger tax floor would reduce tax-motivated profit shifting.
• Plug Loopholes in Tax Treaties – Avoid base erosion through stricter enforcement and better monitoring.
• Introduce a 2% Wealth Tax on Billionaires – A global billionaire tax could curb extreme tax avoidance.
• Tax Long-Term Residents Moving to Low-Tax Countries – Discourage individuals from relocating purely for tax benefits.
• Unilateral Actions if Global Consensus Fails – Countries should implement stronger tax measures individually.

Key Questions & Challenges

• Can countries act unilaterally?
  • Some nations may tighten tax policies on their own, but this risks pushing corporations to more lenient jurisdictions.
• Will the US allow stricter global tax rules?
  • Given that US MNCs benefit the most from tax havens, American support remains uncertain.
• Do developing nations have enough power to enforce tax reforms?
  • Without stronger international cooperation, developing countries lack leverage against powerful multinational firms.

While recent global tax reforms have made progress, major gaps remain due to loopholes, tax competition, and reluctance from powerful nations and corporations. The fight against tax evasion requires stronger global cooperation, stricter enforcement, and innovative policy solutions. Until then, tax evasion will continue to undermine economic equity and fiscal stability worldwide.

Source: BS

Agriculture

1. Parliamentary Panel’s Recommendations for Agriculture Sector

Context:

The Standing Committee on Agriculture’s recommendations reflect a broader policy shift toward inclusivity, financial security, and systemic accountability in the agricultural sector. The proposals renaming the Agriculture Ministry, introducing a National Commission for Farm Labourers’ Wages, ensuring MSP for organic crops, and improving fund utilization mechanisms carry far-reaching socio-economic and policy implications.

Inclusion of Farm Labourers

a) Proposed Name Change: A Symbolic and Policy Shift

• Current Name: Department of Agriculture and Farmers Welfare.
• Proposed Name: Department of Agriculture, Farmers, and Farm Labourers Welfare.

b) Rationale & Significance

• Recognizes farm labourers as a distinct stakeholder group in agriculture policymaking.
• Farm labourers (primarily landless and marginalized communities) often lack access to direct government benefits that farmers receive.
• Could lead to better-targeted welfare schemes, particularly in social security, insurance, and wage protection.

c) Potential Challenges

• Administrative challenges: Expanding policy coverage to farm labourers requires new data collection, program restructuring, and budget reallocation.
• State-level implementation complexity: Agricultural labour policies are often influenced by state-specific dynamics; aligning them with central policy changes may be difficult.

National Commission for Minimum Living Wages

a) Context & Justification

• Wage disparities in agriculture remain stark, with farm labourers earning below minimum wage in many regions.
• Many farm workers do not benefit from formal wage protection laws, leaving them vulnerable to exploitation.

b) Expected Impact

• Formalized minimum wages: Ensures that farm labourers receive consistent and fair compensation.
• Improved living standards: Helps address rural poverty and indebtedness among landless labourers.
• Boosts rural demand: Higher wages could lead to increased consumption, indirectly stimulating rural economies.

c) Implementation Challenges

• State vs. Central Jurisdiction: Agriculture falls under the State List; wage regulation may require coordinated federal action.
• Enforcement mechanisms: Ensuring compliance from small and medium farm owners may be difficult without robust monitoring systems.

Crop Insurance for Smallholding Farmers: Strengthening Financial Resilience

a) Why It’s Necessary

• Small and marginal farmers (owning less than 2 hectares) form 86% of India’s agricultural workforce.
• Existing insurance schemes like PM Fasal Bima Yojana (PMFBY) have low penetration rates among small farmers due to:
  • High premium costs.
  • Delays in claim settlements.
  • Complicated enrollment processes.

b) Potential Benefits

• Customized insurance models for small farmers: Lower premiums, faster payouts, and simplified claim processes.
• Climate resilience: Reduces vulnerability to weather shocks and market fluctuations.
• Encourages sustainable farming: Farmers may take higher-yield risks if assured of financial security.

c) Implementation Barriers

• Budget constraints: Expanding insurance coverage requires significant fiscal support.
• Awareness & accessibility issues: Many small farmers lack awareness of existing schemes or face bureaucratic hurdles in availing them.

MSP for Organic Crops: Balancing Sustainability & Economic Viability

a) Why It’s Important

• Organic farming is gaining policy focus, but farmers face:
  • Higher production costs.
  • Longer transition periods (3 years to get organic certification).
  • Market volatility due to inconsistent demand.
• Providing MSP for organic crops would:
  • Encourage more farmers to shift towards sustainable practices.
  • Make organic farming financially viable for small and marginal farmers.

b) Potential Risks

• MSP for organic crops should not overshadow broader MSP reforms:
  • The panel rightly pointed out that organic MSP should not dilute the larger demand for MSP based on the Swaminathan formula (C2 + 50%).
• Market absorption challenges:
  • Organic produce must have steady consumer demand to prevent government procurement inefficiencies.

Enhancing Fund Utilization & Policy Efficiency

a) Problem Statement

• Unspent budget allocations remain a concern in agricultural schemes, leading to:
  • Under-utilization of resources.
  • Delays in farmer benefits.
  • Lack of accountability in fund deployment.

b) Proposed Solutions

• Real-time fund monitoring systems to track scheme implementation at district & state levels.
• Regular impact assessments to ensure budget allocations meet intended objectives.

c) Expected Outcomes

• More efficient agricultural spending.
• Reduction in fund leakage and delays.
• Better targeted interventions for farmers and farm labourers.

A Step Toward Inclusive & Sustainable Agricultural Policy

The Standing Committee’s recommendations reflect a shift towards a more inclusive, sustainable, and financially secure agricultural policy framework. By:

1. Recognizing farm labourers as key stakeholders,
2. Addressing wage disparities,
3. Expanding financial safety nets for small farmers, and
4. Encouraging organic farming without undermining MSP reforms,

These proposals strike a balance between welfare, sustainability, and economic security. However, effective implementation will require coordinated efforts between the Union and State governments, financial institutions, and rural governance bodies.

Source: TH

Facts To Remember

1. Syria’s Jolani expected at Brussels donor summit in first Europe trip

Syria’s interim President Abu Mohammad al-Jolani, also known as Ahmed al-Sharaa, is expected to attend a Brussels donor summit on March 17, his first European visit since becoming interim President after Bashar al-Assad’s ouster.

2. Opposition wins Greenland vote, as nationalists surge

The centre-right Opposition has won a surprise victory in legislative elections in Greenland, the Danish territory coveted by U.S. President Donald Trump, as support also surged for the nationalist Naleraq party seeking independence as soon as possible.

2. Gill wins ICC Player-of-the-Month award for February

Shubman Gill was named ICC Men’s Player-of-the-Month for February following his stellar performances, which includes his exploits in his team’s title-winning Champions Trophy campaign. 

3. Centre right Demokraatit Party Wins in Greenland Election

The centre right Demokraatit Party, which favoursa gradual path to Greenland´s independence from Denmark wona surprise victory in parliamentary elections, held in the shadow of US President Donald Trump´s stated goal of taking control of the island one way or another.

4. Google launches AI models for robotics

Alphabet’s Google launched two new artificial intelligence (AI) models tailored for robotics applications based on its Gemini 2.0 model, as it looks to cater to the rapidly growing robotics industry. The robotics field has made large strides over the past few years with increasing advancements in AIand improving models, speeding up commercialization of robots largely in industrial settings, according to industry experts.

5. RBI Seeks External Candidates for IndusInd Bank CEO Role

CEO Tenure Cut: RBI recently approved only a one-year extension for current CEO Sumant Kathpalia, reducing his term to March 23, 2026. This is the second time RBI has shortened his tenure, previously cutting it to two years instead of three in 2023.

RBI Directive: The Reserve Bank of India (RBI) has asked IndusInd Bank’s board to propose two external candidates for the CEO and COO positions.

6. IIT-Delhi Leads Indian Institutes in QS World University Rankings by Subject

JNU ranked 29th in Development Studies, a drop from 20th last year.

Top Performer in India:

IIT-Delhi ranked 26th globally in Engineering and Technology, improving from 45th last year.