Daily Current Affairs (DCA) 17 April, 2025

Daily Current Affairs Quiz
17 April, 2025

International Affairs

1. WTO Global Trade Outlook for 2025

Revised Trade Growth Forecast

• Decline in Global Merchandise Trade: The World Trade Organization (WTO) has revised its global trade growth forecast for 2025, shifting from an expected expansion to a decline of 0.2%. This revision reflects growing concerns over the U.S. tariff developments.
  • Previous Growth Expectations: Originally, WTO anticipated continued growth in global merchandise trade for 2025, but this forecast has now been adjusted due to worsening trade conditions.

Potential for Further Decline

• Worst-case Scenario: If trade conditions deteriorate further, WTO predicts that global merchandise trade could contract by 1.5% in 2025. This is a stark contrast to 2024, when global trade grew by 2.9%.
  • Impact of U.S. Tariffs: If the U.S. proceeds with reciprocal tariffs, WTO estimates a reduction of 0.6 percentage points in global trade growth for 2025.
  • Trade Policy Uncertainty: Additional uncertainty surrounding trade policies could further reduce growth by another 0.8 percentage points. Combined, these factors would contribute to a 1.5% decline in global trade.

Broader Economic Implications

• UNCTAD’s Global Growth Forecast: The United Nations Conference on Trade and Development (UNCTAD) has projected global growth to slow to 2.3% in 2025, indicating a shift toward recessionary conditions.
  • Risks for Developing Countries: Developing nations are expected to face intensified pressures due to subdued demand, trade policy shocks, financial turbulence, and systemic uncertainty.

Key Risks

• Tariffs and Policy Shocks: The spreading trade policy uncertainty and the potential for tariff wars, especially involving major economies like the U.S. and China, pose significant risks to global trade.
• Economic Slowdown: A contraction in global trade will likely exacerbate the already slow global economic recovery, particularly impacting developing economies heavily reliant on trade.

The WTO’s revised trade growth forecast reflects increasing risks to global trade in 2025, with U.S. tariff policies and trade uncertainty acting as key contributors to a potential decline in merchandise trade. Additionally, broader economic challenges, including slower global growth, will particularly affect developing countries, intensifying their vulnerability to trade shocks.

TH

2. India’s Trade Deficit with China for FY 2024-25

Context:

India recorded a trade deficit of $99.2 billion with China for the fiscal year 2024-25, a significant gap driven by a surge in imports of electronics goods and consumer durables.

• Key Factors: The increase in imports from China, particularly in high-value sectors like electronics, played a substantial role in widening this trade imbalance.

Implications of the U.S. Tariff Pause

• Trump’s 90-Day Pause: U.S. President Donald Trump recently announced a 90-day pause on most tariff hikes for major trading partners, including India. This temporary freeze on tariff increases was intended to allow for negotiations and potential agreements.
  • Impact on China: While India benefits from this pause, the U.S. sharply increased levies on Chinese goods, which could have broader trade ramifications.
  • Potential Diversion of Goods: There are concerns that Chinese firms may redirect their goods to other markets, including India, to mitigate the impact of the higher tariffs imposed by the U.S. on Chinese imports. This could exacerbate India’s trade deficit further, especially in sectors where China is a dominant supplier.

Trade Dynamics and Concerns

• Electronics and Consumer Durables: The primary drivers behind India’s growing trade deficit with China are electronics and consumer durables, two sectors where India remains heavily reliant on Chinese imports.
• Diversification Risks: The diversion of Chinese goods into India’s market, amid increasing tariffs on China by the U.S., could further inflate India’s trade imbalance and strain its efforts to balance trade with major partners.

India’s trade deficit with China has ballooned to $99.2 billion in FY 2024-25, fueled by imports of electronics and consumer goods. Meanwhile, the U.S. tariff pause has created potential shifts in global trade flows, with fears that Chinese goods could flood the Indian market, exacerbating the trade deficit.

HT

3. Beijing Faces Up to 245% US Tariffs Amid Intensifying Trade War

US-China Trade Tensions Escalate

• The White House announced that China may now face tariffs of up to 245% on its exports to the United States.
• This move follows China’s retaliatory actions in the ongoing trade dispute.
• The announcement was part of a fact sheet issued Tuesday, which emphasized President Trump’s commitment to “America First” trade policies.

Key Developments

• President Trump has signed an executive order to investigate national security risks stemming from US reliance on imported critical minerals and their derivative products.
• While tariff discussions with over 75 countries are ongoing and individualized tariffs are currently paused, China is excluded from this relief due to its retaliation.

Impact on Technology Sector: Nvidia and AI Chips

• Nvidia announced that new US export controls on AI-related chips could cost the company an additional $5.5 billion.
• The US government has imposed indefinite licensing requirements on chips like Nvidia’s H20 integrated circuits, citing potential use in Chinese supercomputers.
• Nvidia’s shares fell 5.8% in pre-market trading, while AMD shares dropped 6.5%.
• Asian tech stocks also declined:
  • Advantest: -6.7% (Tokyo)
  • Disco Corp: -7.6%
  • TSMC (Taiwan): -2.4%

US Retail Sales Surge in March

• Retail sales rose 1.4% in March, a sharp increase from 0.2% in February, according to the US Commerce Department.
• The boost is largely attributed to a rush in automobile purchases, as consumers aimed to avoid anticipated tariffs.
• However, despite the overall surge, discretionary spending remains under pressure due to economic uncertainty.

TET

National Affairs

1. Kailash Mansarovar Yatra 2025

Why in News?

Efforts are intensifying between Indian and Chinese officials to restart the Kailash Mansarovar Yatra, suspended since 2019. With the deadline for finalizing pilgrims fast approaching, both sides are narrowing differences and aiming for a breakthrough soon.

Current Status and Developments

• Diplomatic Talks: Discussions have recently focused on logistics, infrastructure readiness, and border coordination.
• Ministry Coordination: The Ministry of External Affairs (MEA) has called for a key inter-agency meeting on April 21 to assess and coordinate next steps.
• Local Preparations: Agencies such as the Kumaon Mandal Vikas Nigam (KMVN) are already preparing, especially along the Lipulekh route in Uttarakhand.

Route Enhancements

• Pilgrims may now bypass the 80–100 km trek from Dharchula to Lipulekh Pass.
• Special transport arrangements are being considered to ease travel and reduce physical strain on yatris.

Background

• Last Held: The yatra was last conducted in 2019.
• Suspension Reasons:
  • COVID-19 pandemic prompted China to halt access.
  • Post-Galwan tensions (2020) at the Line of Actual Control (LAC) further delayed resumption.

Why This Matters

• Kailash Mansarovar holds deep spiritual significance for Hindu, Buddhist, and Jain pilgrims.
• Its resumption is seen as a positive signal in India-China diplomatic relations, especially amid lingering border tensions.
• The yatra also contributes to local economies in Uttarakhand and helps promote people-to-people connections.

TH

2. Kancha Gachibowli Deforestation

Context:

The Supreme Court delivered a stern warning to the Telangana government on Wednesday, ordering immediate action to protect wildlife affected by the destruction of 100 acres of the Kancha Gachibowli forest area. The court barred further tree felling and made it clear that development cannot come at the cost of the environment.

Key Highlights from the Hearing

• Wildlife Protection Mandate: The Telangana Wildlife Warden has been directed to initiate urgent conservation steps for animals displaced by the deforestation.
• Strict Warning on Justification: Justice B.R. Gavai warned the State that attempting to justify the deforestation could result in court-ordered jail time for responsible officials.
• Call for Forest Restoration: The Bench stressed that the State’s only acceptable course is to present a forest restoration plan. Senior advocate A.M. Singhvi, appearing for the State, agreed with the court’s position.
• Sharp Criticism of Rapid Destruction: The court questioned the State’s “tearing hurry” in bulldozing 100 acres in just three days, despite the process reportedly taking months to plan.
• Quote from Justice Gavai:

Context and Consequences

• The court emphasized ecological balance and accountability, regardless of which government is in power.
• The Supreme Court’s comments signal zero tolerance toward unlawful environmental degradation.
• Telangana must now present a credible plan for reforestation and conservation, or face potential legal action against its top bureaucrats.

This case has brought the balance between urban development and ecological preservation into sharp focus, with the court prioritizing the rights of nature and wildlife over short-term infrastructural ambitions.

TH

3. Gond (Gutti Koya) Tribes

The Gond tribe is second largest indigenous groups in India, with a significant presence in central and south-central regions. They are categorized as a Scheduled Tribe and are known for their rich cultural heritage and traditional way of life. The Gonds are spread across several states, including Madhya Pradesh, Chhattisgarh, Maharashtra, Andhra Pradesh, and others. 

• Largest Tribe
  • The largest tribe in India is the Bhil tribe.
    

Background of Displacement

• In 2005, ~50,000 Gond tribals were displaced from Chhattisgarh due to the Government of India’s “strategic hamleting” program aimed at countering Maoists, inspired by a similar strategy in Vietnam (1960s).
• Tribals were relocated to roadside camps in undivided Andhra Pradesh (now Andhra Pradesh and Telangana).
• The program failed; many tribals returned to forests while others stayed back, some even joined security forces.

Role in Counter-Maoist Operations:

• Displaced tribals and surrendered Maoists have been instrumental in recent military successes.
• Their knowledge of local terrain and dialects has made them valuable assets.
• Home Minister Amit Shah targets to end Maoist insurgency by March 31, 2026.

Historical Context:

• Similar tribal recruitment happened in 1949 against Telangana communists.
• In Mizoram (1960s), the strategic hamlet policy led to a peace deal; later, in 2019, displaced Brus were rehabilitated.

Current Situation of Displaced Tribals

• Gutti Koya tribals still live on forest lands in AP and Telangana without legal status.
• Chhattisgarh Govt: Admitted 10,000 displaced due to violence.
• Telangana & Andhra Pradesh: Report 24,000 and 8,000 displaced respectively.

Legal and Administrative Issues:

• Forest Rights Act (FRA) Clause 3.1(m): Guarantees alternative forest land for those displaced before Dec 13, 2005.
• Many have applied under this clause, but Chhattisgarh has stalled action for over 5 years.
• No legal barrier to granting land in a different State, but Chhattisgarh hasn’t pursued it with the Centre or other States.

Lack of Recognition and Rights:

• AP and Telangana treat Gutti Koya as “migrants”, denying them Scheduled Tribe (ST) status.
• States provide limited humanitarian support but claim central intervention is needed.
• Displaced face harassment from forest officials, police, and local tribals.

Pending Actions and Recommendations:

• NCST has ordered a comprehensive survey of displaced tribals within 3 months.
• Need for a national policy for Internally Displaced People (IDPs).
• Demand for dignified, permanent rehabilitation with ST recognition and forest rights in host States.

TH

4. NREGS Daily Minimum Wage Unlikely to See Major Hike in FY26

Government Position

• The Centre is unlikely to raise daily NREGS wages significantly beyond the usual annual 2–7% hike.
• Reason: Fear that a sharp increase could fuel inflation and complicate fiscal and monetary management, especially with moderating price pressures.

Current Wage Scenario

• Post FY26 hike, most states still offer below ₹300/day under NREGS.
• Only Haryana pays ₹400/day, meeting the panel’s recommended level.
• NREGS wages act as a benchmark for rural and industrial wages, impacting farm costs and overall production economics.

Parliamentary Panel Recommendations

• The Parliamentary Standing Committee on Rural Development, led by Saptagiri Sankar Ulaka, recommended:
  • Raising NREGS wage to at least ₹400/day
  • Increasing annual workdays from 100 to 150
• Centre is not inclined to accept these recommendations in full.

Effectiveness Under Scrutiny

• Government may instead focus on reviewing the scheme’s implementation:
  • National survey recommended by the House panel
  • NITI Aayog is currently evaluating NREGS for performance and impact

Sinha Panel (2023) Recommendations

• Headed by Amarjeet Sinha, the expert committee advised:
  • Substantial wage increase
  • Enhanced budgetary allocation
• The government has not implemented these recommendations yet.

Budget Outlook

• Budget for NREGS in FY26: ₹86,000 crore, same as FY25, indicating no major expansion planned.

Rural Consumption Implications

• Experts note that higher wages could boost rural demand, but this must be balanced against inflationary risks.

TET

5. Japan to Gift India Two Shinkansen Bullet Train

Context:

Japan will gift two Shinkansen train sets (E5 and E3) to India for inspection and familiarisation. These trains will be used to train Indian engineers and test operations on the Mumbai-Ahmedabad High-Speed Rail (MAHSR) corridor. The gifted train sets are expected to arrive in early 2026.

Long-Term Shinkansen Partnership

• According to Japan Times, India and Japan plan to deploy the next-generation E10 series Shinkansen on the MAHSR corridor by the early 2030s.
• This collaboration underlines the deepening Indo-Japanese partnership in high-speed rail technology.

MAHSR Corridor Project Progress

• Phase 1 (Surat–Bilimora, 48 km) is slated for launch in August 2026.
• Other sections will follow in phased commissioning as construction progresses.
• In Maharashtra, tunnelling work, especially in the Mumbai Metropolitan Region (MMR), is delayed due to late TBM arrivals, pushing completion timelines to 2030 or beyond.

Significance

• This gift from Japan is seen as a symbol of technological cooperation and will accelerate India’s readiness for high-speed rail operations.
• The initiative supports the broader vision of India’s bullet train ambition and will enhance skill transfer and preparedness.

TOI

Banking/Finance

1. Sebi Chairman’s Statement on Corporate Governance and Misgovernance

Corporate Misgovernance: A Case of Individual Responsibility

• Addressing Recent Scandals: The Chairman of the Securities and Exchange Board of India (Sebi), Tuhin Kanta Pandey, stated that corporate misgovernance episodes like the fraud at Gensol Engineering or the front-running by a mutual fund manager should not be considered systemic issues necessitating regulatory overhauls.
  • Individual Accountability: These incidents, according to Pandey, are a result of greed and egregious behavior rather than failures in the broader governance system. Therefore, the responsibility falls on independent directors, boards, and auditors to take proactive measures to prevent such misconduct.
  • Existing Governance Standards: He emphasized that the necessary governance standards and “guardrails” are already in place, and it is up to the stakeholders within companies to function within these parameters.

Role of Sebi and Regulatory Oversight

• Regulator’s Limitations: While Sebi can act swiftly when it detects wrongdoing, Pandey highlighted the limitations of the regulator. He acknowledged that Sebi cannot monitor every boardroom or manage every corporate decision, which would be ineffective.
  • Intervention in Public Interest: Sebi intervenes when the public interest is at risk, such as when public investors could be impacted by fraudulent activities. Timely action is emphasized, particularly through interim orders, in cases where further delays could harm investors.

Futures and Options (F&O) Trading

• Curbing Speculation: On the issue of excessive speculation in Futures and Options (F&O) trading, Pandey mentioned that feedback from market participants is being carefully evaluated.
  • Caution Against “Casino-Type” Trading: He expressed concern about the trend where younger traders, particularly, engage in speculative or “casino-type” trading. He pointed out that while F&Os play an important role in liquidity, price discovery, and hedging, the excessive speculation in options trading is not aligned with their intended purpose.
  • Systemic Improvement: Sebi is looking for systemic improvements to curb speculation, ensuring a better balance between risk and reward in the market.

Sebi’s Approach to Regulatory Oversight

• Not Overreacting to Isolated Incidents: Pandey firmly stated that, despite occasional failures due to the actions of a few individuals, it would not be appropriate to introduce more stringent regulations based on isolated instances of corporate misconduct.
• Regulatory Effectiveness: While acknowledging the limits of regulatory intervention, he stressed that Sebi would continue to focus on timely and exemplary actions to create a chilling effect on potential wrongdoers.

Sebi’s chairman, Tuhin Kanta Pandey, reassured that while the regulator has robust governance standards in place, the responsibility to prevent corporate misgovernance lies primarily with boards, independent directors, and auditors. Sebi continues to focus on timely intervention to protect public investors and curb speculative trading practices. He emphasized that regulatory changes should be systemic, not driven by the actions of a few individuals.

BS

2. UPI Outages: NPCI and Banks Collaborate for a Solution

Context:

Unified Payments Interface (UPI) has experienced a series of outages, causing disruptions in real-time payments. The National Payments Corporation of India (NPCI), along with member banks, is now actively seeking a long-term solution to prevent repeated glitches.

Focus on Transaction Status API Calls

• The outages have been linked to the high frequency of Transaction Status API calls made by banks, which are essential for verifying transaction statuses in the UPI ecosystem. These API calls are creating strain on the system, leading to network instability.
• API Role: APIs (Application Programming Interfaces) facilitate secure communication between banking systems and the UPI network, enabling smooth and real-time transaction monitoring.

Monitoring and Control Mechanisms

• NPCI’s Plan: NPCI is considering the introduction of a monitoring mechanism to track Transaction Status API calls. This would be done in collaboration with major Payment Service Provider (PSP) banks to ensure efficient and secure operations within the UPI network.

Root Cause Analysis

• Findings: An investigation into the outages revealed that banks were sending an excessive number of status check requests, contributing to the system overloads.
• Frequency of API Calls: The issue stems from the high frequency of these “Check Transaction Status” requests, which has been a key cause behind recent disruptions, including the fourth outage within three weeks (April 12).

Proposed Solutions

• Solution Options: To address the problem, two main solutions are being discussed:
  • Self-Imposed Limits: Banks could impose their own limits on the number of API calls they make, reducing the load on the system.
  • NPCI Intervention: Alternatively, NPCI might step in to block entities found to be misusing the system or making excessive calls.

Next Steps

• Collaborative Effort: Both NPCI and member banks plan to meet again to review the situation and agree on a course of action that can help stabilize the system and prevent future outages.

The repeated outages in the UPI system have prompted NPCI and banks to work together to address the issue of excessive Transaction Status API calls. Solutions being considered include self-regulation by banks or NPCI intervention to ensure smooth operations within the UPI ecosystem. Further discussions and reviews are expected to follow to implement an effective and lasting solution.

BS

3. IndusInd Bank Derivatives Portfolio Discrepancy

• Stock Performance
  • Shares surged 7.12% on April 16 to ₹788.25 on the BSE
  • Rebounded nearly 24% from the March 25 low of ₹637.30
  • Rally followed positive external audit findings
• PwC External Review Findings
  • Discrepancies in derivatives portfolio estimated at ₹1,979 crore (as of June 30, 2024)
  • Post-tax impact: 2.27% of net worth (₹65,102 crore as of Q3FY25)
  • Lower than internal review estimate of ₹1,580 crore (2.35% of net worth)
• Analyst Insights
  • Macquarie Capital: Impact is “incrementally positive” as it aligns closely with prior estimates
  • Focus now shifts to:
    • Outcome of forensic audit report by another external agency
    • Root cause analysis of the discrepancies
    • Clarity on management succession plans
• Leadership and Governance
  • RBI granted only a 1-year extension to MD & CEO Sumant Kathpalia
  • The board had recommended a full 3-year term
  • Kathpalia hinted the RBI’s decision may be linked to the portfolio issue
• Market Sentiment and Future Focus
  • Citi note: PwC’s report confirms marginally lower impact than internal findings
  • Investor attention now on:
    • Completion of the forensic audit
    • RBI’s governance stance
    • FY25 financial statements reflecting the derivative losses

BS

4. Paytm Founder Vijay Shekhar Sharma Settles Sebi Case

Context:

Vijay Shekhar Sharma, his brother Ajay Shekhar Sharma, and One97 Communications (owner of Paytm) have agreed to pay a total of ₹2.79 crore as a settlement amount to the Securities and Exchange Board of India (SEBI). The settlement comes after SEBI accused them of misrepresenting facts and violating shareholder classification norms during Paytm’s IPO.

Settlement Terms

• Vijay Sharma has forgone 21 million ESOPs granted to him in 2019.
• Ajay Sharma has forgone 225,000 stock options and will disgorge ₹35 lakh to SEBI.
• Vijay has agreed not to accept any new ESOPs for the next three years.
• This settlement is part of SEBI’s settlement mechanism, allowing individuals and entities to resolve regulatory breaches without admitting or denying guilt, through a monetary fee or corrective measures.

Specifics of the Violation

• Vijay Shekhar Sharma had initially identified himself as a non-promoter when Paytm went public, but SEBI argued that he should have been classified as a promoter.
• By classifying himself as a non-promoter, he was eligible to receive ESOPs, a practice not permitted for promoters according to SEBI regulations.
• Vijay’s ownership of 14.7% in Paytm at the time of the IPO was later reduced to below 10% by transferring 30.9 million shares to the Sharma Family Trust.

Employee Stock Ownership Plan (ESOP)

ESOP stands for Employee Stock Ownership Plan. It’s a plan where employers give their employees the option to purchase company stock, often at a discounted price or with a specific vesting period. This allows employees to become partial owners of the company and potentially benefit from its growth. 

Impact of the Settlement

• One97 Communications reported that Vijay’s forfeited ESOPs have been cancelled and returned to the ESOP pool under the One97 Employees Stock Option Scheme, 2019.
• This will result in a non-cash acceleration of ESOP expense of ₹492 crore in Q4 FY25, with an equivalent reduction in future ESOP expenses.

Legal Representation

• Finsec Law Advisors represented One97 Communications before SEBI.
• The Sharma brothers were represented by Regstreet Law.

Background on the Case

• SEBI questioned whether Vijay Shekhar Sharma should have been classified as a promoter instead of an employee when Paytm filed its IPO documents.
• The case involves alleged non-compliance in the issuance of ESOPs to promoters, with independent directors also questioned for supporting Vijay’s stance.

TET

5. Sebi Reviews Regulation 24 to Ease Restrictions on Mutual Fund Business Activities

What’s Happening?

• The Securities and Exchange Board of India (Sebi) is conducting a comprehensive review of Regulation 24, which governs the business activities of Asset Management Companies (AMCs).
• Manoj Kumar, Executive Director at Sebi, confirmed the development, indicating a potential policy shift.

Current Regulatory Framework

• AMCs are restricted from engaging in businesses that conflict with their core function: managing mutual funds.
• They must:
  • Seek Sebi’s approval to offer foreign fund consultancy.
  • Maintain strict separation (“hard walls”) between different fund accounts.

Rationale Behind Restrictions

• The primary aim is to prevent AMCs from prioritizing their own profits over investor interests.
• Regulations are intended to reduce conflicts of interest and ensure investor protection.

Why a Review is Needed

• Critics argue that the current rules may be too restrictive, limiting AMCs from:
  • Diversifying revenue streams
  • Leveraging their expertise in other financial services
• A more balanced approach may involve:
  • Enhanced disclosures about AMCs’ non-core activities
  • Allowing investors to make informed decisions about such engagements

Investor Risk Perspective

• The evolving view suggests that investors are aware of inherent risks and that over-regulation may stifle innovation and growth.
• A shift toward greater operational freedom with transparent disclosures could be a more pragmatic regulatory stance.

Mint

6. RBI Suspends 14-Day Liquidity Window for Third Time

What’s New?

• The Reserve Bank of India (RBI) has once again withheld its 14-day Variable Rate Repo (VRR) auction its primary cash management tool for the fortnight of April 17 to May 2.
• This marks the third consecutive fortnight without the standard liquidity operation, intensifying speculation about a strategic shift in liquidity management.

Implications for Liquidity Framework

• The 14-day repo has been the RBI’s core instrument for modulating systemic liquidity under its current framework.
• In its place, the RBI is relying on:
  • Short-term liquidity operations (like 1-day and 5-day windows)
  • Daily variable rate repos to fine-tune liquidity more dynamically

Emerging Policy Direction

• The RBI appears to be testing a more flexible liquidity toolkit, deviating from fixed 14-day cash infusions.
• The goal may be to:
  • Align money market rates more precisely with the policy repo rate
  • Provide greater responsiveness to evolving cash conditions in the banking system

Statement from RBI Leadership

• RBI Governor Sanjay Malhotra recently stated that aspects of the liquidity framework are under review.
• This suggests that a formal recalibration of liquidity operations may be forthcoming.

Market Impact

• The move is being watched closely by:
  • Bank treasury teams and money market participants
  • Analysts expecting a shift from rigid fortnightly tools to more dynamic liquidity support mechanisms

Mint

7. SEBI Set to Review ESG and Supply Chain Disclosure Norms

Context:

SEBI Chairman Tuhin Kanta Pandey has announced a comprehensive review of India’s ESG (Environmental, Social, Governance) disclosure norms, especially those relating to supply chain reporting. The move follows industry concerns over the complexity and cost of current disclosure requirements.

Background

• Since FY23, SEBI has mandated ESG disclosures for the top 1,000 listed companies by market capitalization.
• In July 2023, SEBI asked the top 250 companies to:
  • Report ESG data for 75% of their supply chain partners
  • Provide third-party assurance starting FY26
• This requirement was eased in May 2024, and the deadline was extended by one year in December 2024 due to industry pushback.

Reasons for the Review

• Indian companies cited challenges with:
  • Measuring and assuring ESG metrics
  • Data availability and supply chain complexity
• Pandey emphasized: “If disclosures turn out to be only on paper or false, it will create more problems.”
• SEBI aims to foster capacity building to support accurate sustainability reporting.

Global Context

• India’s review mirrors global trends:
  • EU proposed exemptions for small businesses from sustainability rules
  • US (under Trump-era policy) showed resistance to ESG mandates
• India has a low ESG score, with Moody’s rating the country as high-risk on environmental and social fronts

Other Regulatory Areas Under Review

• Related party transactions: Rules may be fine-tuned for better proportionality
• Derivatives market: SEBI is reviewing 800+ responses on proposed changes to how open interest is measured
  • Industry groups warn these could hurt liquidity and raise costs
• SEBI to adopt a principle of “optimal regulation”, not “sledgehammer” measures

What’s Next?

• The ESG review begins next month, with no timeline given on final rule changes
• Pandey has not confirmed whether reporting norms will be softened, only that they will be more calibrated

BS

8. PNB Launches 34 New Digital and Inclusive Banking Services

Context:

Punjab National Bank (PNB) marked its 131st Foundation Day by launching 34 new products aimed at boosting:

• Digital banking
• Inclusive financial services
• Customer experience enhancements

Government Recognition

• M. Nagaraju, Secretary, Department of Financial Services (DFS), praised PNB for:
  • Driving financial inclusion
  • Introducing innovative digital solutions
  • Promoting cyber awareness among citizens

PNB’s Vision and Impact

• Ashok Chandra, MD & CEO, emphasized: “PNB has been a cornerstone in India’s development, supporting every sector and empowering every citizen.”
• Key focus areas include:
  • Credit access across all sectors
  • Support for underprivileged communities
  • Farmer income enhancement
  • Youth education and entrepreneurship
  • Alignment with the Viksit Bharat 2047 vision

Customer-Centric Initiatives

• Ongoing improvements in:
  • Grievance redressal mechanisms
  • Call center efficiency
  • Use of QR codes for real-time customer feedback
• Goal: Elevate overall service quality and build trust through responsive banking

TH

9. RBI Imposes ₹3.2 Lakh Penalty on Citibank for FEMA Violation

Context:

The Reserve Bank of India (RBI) has imposed a monetary penalty of ₹3.20 lakh on Citibank N.A.

• Reason: Failure to conduct due diligence while processing inward remittances.
• The remittances originated from a foreign currency account opened by a constituent.

Violation

• The bank was found in contravention of the Foreign Exchange Management Act (FEMA), 1999.
• RBI cited non-compliance with regulatory obligations related to KYC and transaction scrutiny.

RBI’s Statement

• The penalty is administrative in nature.
• It is intended to ensure compliance enforcement and does not impact the validity of any transactions or agreements with Citibank customers.

10. International Finance Corporation Launches Call for Expression of Interest for Catalytic First Loss Guarantee Facility

Context:

International Finance Corporation Launches Call for Expression of Interest for Catalytic First Loss Guarantee Facility.

• Objective: The IFC has launched a call for eligible financial services providers (FSPs) to participate in its new Catalytic First Loss Guarantee Facility, which is part of its MSME Finance Platform. The facility aims to enhance access to finance for women-owned businesses, promote agriculture and climate financing, and support MSME lending.
• Key Goals:
  • Increase access to finance for underserved sectors, including MSMEs.
  • Demonstrate the commercial viability of MSME lending, especially in agriculture and climate-related projects.
  • Experiment with new products, services, and risk criteria to scale up lending.
• Facility Details:
  • Offers a first loss guarantee to eligible FSPs, encouraging them to scale MSME lending, contributing to economic growth and job creation.
  • MSMEs account for over 90% of firms globally, contribute 70% of total employment, and represent 50% of global GDP.
  • The MSME finance gap is estimated at $5.7 trillion, expanding to $8 trillion when informal businesses are considered.
• Eligibility:
  • FSPs such as regulated banks, non-bank financial institutions, digital lenders, leasing companies, and microfinance institutions can apply.
  • FSPs must meet IFC’s qualifications, including compliance with Environmental & Social Risk Ratings (ESRR), Integrity Due Diligence (IDD), and financial capability.
• IFC Overview:
  • IFC, a part of the World Bank Group, committed $56 billion to private sector development in FY 2024 and operates in over 100 countries globally.

Economy

1. U.S. Reciprocal Tariff Policy – Implications for India

Overview of U.S. Reciprocal Tariffs:

• U.S. introduces new country-wise and commodity-wise tariffs under Trump’s proposal.
• Reciprocal tariffs capped at 10% for 90 days (excluding China).
• Aimed at correcting trade imbalances by penalizing trade-surplus countries.

Tariff Calculation Formula:

• U.S. discounted reciprocal tariff rate = -½ × (U.S. exports – U.S. imports) / U.S. imports
• No reference to elasticities or specific commodity structures.

India’s Calculated Tariff Rate (2024 Data):

• U.S. exports to India: $41.8B
• U.S. imports from India: $87.4B
• India’s reciprocal tariff = 26%
• This is added on top of existing commodity-specific tariffs.

Exempted Commodities:

• Steel, aluminum, autos and parts, semiconductors, copper, pharmaceuticals, bullion, energy, rare minerals.

Impact on Indian Exports:

• India’s total exports to U.S. are relatively low and declining.
• Affected sectors:
  • Electrical machinery
  • Machinery & mechanical appliances
  • Made-up textiles
• Less impacted sectors:
  • Gems and jewellery (inelastic demand)
  • Mineral fuels (re-exports after refining)
• India has competitive advantage as countries like China, Vietnam, Bangladesh face higher tariff rates.

Strategic Options for India:

• Avoid direct retaliation like China to prevent escalation.
• Increase essential imports from U.S. (e.g., petroleum) to reduce trade imbalance.
  • Example: Raising U.S. imports by $25B can reduce India’s tariff rate to 11.8%.
• Maintain current account balance by shifting sources of imports, not volumes.
• Begin diplomatic talks to negotiate a broader, stable trade framework with U.S.
• Watch for import dumping from affected countries like China.

Global Trade Implications:

• Current U.S. policy increases uncertainty and risk for global trade.
• WTO must step in to reinforce fair, rule-based global trade system.
• Regional trade pacts are helpful but only a second-best alternative.

• India should respond with strategic economic adjustments and diplomacy.
• Long-term goal should be restoring multilateral trade stability through WTO.

TH

2. CPI Inflation

Source: National Statistics Office (NSO)

India’s retail inflation, based on the Consumer Price Index (CPI), eased to 3.34% in March 2024 — the lowest since August 2019. However, several states continued to record inflation rates above the RBI’s medium-term target of 4%, underscoring regional price pressures.

States with Highest Inflation (%):

• Kerala – 6.59
• Karnataka – 4.44
• Chhattisgarh – 4.25
• Jammu & Kashmir* – 4.00
• Maharashtra – 3.86

Includes combined data for J&K and Ladakh.

States with Lowest Inflation (%):

• Telangana – 1.06
• Jharkhand – 2.08
• Andhra Pradesh – 2.50
• Gujarat – 2.63
• Rajasthan – 2.66

Key Takeaways:

• Wide state-level variation suggests uneven impact of food prices and local supply dynamics.
• Southern states like Kerala and Karnataka saw elevated inflation, possibly due to higher food and fuel costs.
• Telangana’s low reading reflects effective price control and base effects.

PIB

3. India’s GDP Growth Forecast for 2025: Moody’s vs. UNCTAD

Moody’s Ratings Outlook

• Revised GDP forecast: 5.5% to 6.5% (down from 6.6% projected in February 2024).
• Primary concern: Unpredictable U.S. tariffs and global trade tensions.
• Report title: “Tariffs and Trade Turmoil”.
• Risks Identified:
  • US tariff regime (10% universal, 145% on China) may stall investment and raise global recession risk.
  • Business planning and confidence across Asia-Pacific likely to suffer.
  • India’s exposure to US is relatively low but diversified across electronics, machinery, textiles, and food.
  • Sectors like gems & jewellery, medical devices, textiles most vulnerable to tariff disruptions.

Moody’s Analytics (subsidiary)

• Cut India’s 2025 growth forecast to 6.1%, citing specific tariff impacts.

UNCTAD Outlook

• India 2025 GDP forecast: 6.5%, higher than Moody’s lower-end estimate.
• Global context:
  • World growth expected to slow to 2.3% due to trade disputes and uncertainty.
  • Developing countries, including India, face headwinds, but robust domestic factors provide support.
• Key Growth Drivers for India:
  • Strong public capital spending.
  • Monetary easing: The RBI cut rates by 25 basis points in early February 2025 — first cut in five years.
  • Lower rates expected to stimulate private investment and boost consumption.

While Moody’s flags downside risks from global trade disruption, UNCTAD remains bullish on India’s domestic resilience, supported by fiscal and monetary measures. Both forecasts reflect uncertainty, but position India as a relative outperformer in a slowing global economy.

BS

4. Centre to Merge DPE & Dipam

Context:

The Union government is planning to merge the Department of Public Enterprises (DPE) with the Department of Investment and Public Asset Management (Dipam) under the Ministry of Finance.

• Goal: Improve efficiency, enhance CPSE performance, and streamline overlapping functions.

Key Questions

• Will the merged department emphasize:
  • Strategic management of CPSEs?
  • Or a more focused disinvestment agenda?
• There’s an apparent shift in government stance from aggressive disinvestment to value creation.

CPSE Policy Background

• As per the 2021–22 Budget, the government announced:
  • Minimal presence in strategic sectors
  • Privatisation or closure of CPSEs in non-strategic sectors
• Integration of DPE into the Ministry of Finance (2021) aimed to accelerate policy implementation, but limited progress has been made.

Disinvestment Track Record

• Inconsistent focus over the years:
  • Often pursued only to reduce fiscal deficit
  • Targets were ambitious but mostly unmet
• FY25 so far:
  • Over ₹3.7 trillion raised from overall equity markets (90% rise YoY)
  • Only ₹10,000 crore mobilized via disinvestment

Recent Trends

• No explicit disinvestment targets in recent Union Budgets
  • Offers operational flexibility
  • But risks neglecting disinvestment as a revenue source

Underlying Challenges

• Lack of political consensus is a core hurdle
  • Disinvestment often criticized as “selling family silver”
• CAG 2022 Report Findings:
  • 198 government companies with accumulated losses > ₹2 trillion
  • Net worth of 88 companies completely eroded
  • These entities are long-term fiscal liabilities

Merging departments may bring administrative clarity, but success hinges on strong political will and consistent execution. Without a firm disinvestment roadmap, India’s CPSE reforms risk stalling despite the structural overhaul.

BS

Facts To Remember

1. IIT-B graduate launches free website to make Sanskrit literature accessible to all

To bring together Sanskrit literature and reading tools, Antariksh Bothale, a software engineer from Jodhpur, Rajasthan, launched SanskritSahitya.org, a free website for anyone desiring quick access to Sanskrit literary texts, bringing his academic and professional experience in Natural Language Processing into the field of Sanskrit literature.

2. CJI proposes Justice Gavai as successor

Justice Gavai’s father, Ramkrishna Suryabhan Gavai, also known as ‘Dadasaheb’, was a former Governor of Bihar and a prominent Dalit leader.

3. Kothari trumps Advani to win IBSF World billiards crown

Sourav Kothari got the better of compatriot and holder Pankaj Advani 725-480 in final of the 2025 IBSF World billiards championship (timed format) in Carlow, Ireland.

4. Suruchi pips Manu for the gold; Saurabh wins bronze

Suruchi Singh continued to assert her class as she won her second successive air pistol gold in the shooting World Cup in Lima, Peru.

5. Pomona City to host cricket during 2028 LA Olympics

The South Californian city of Pomona will host the cricket (T20) competition during the 2028 Los Angeles Olympics, the ICC has announced.