Daily Current Affairs (DCA) 20 March, 2025

Daily Current Affairs Quiz
20 March, 2025

International Affairs

1. Chinese UAV Activity Near Okinawa

Context:

The recent appearance of Chinese Unmanned Aerial Vehicles (UAVs) near Okinawa had raised alarms among the Japanese. They always tend to be perceived as far less threatening than a full fledged fighter aircraft. It is important for India to keep this operational dynamics in mind while developing its UAV defense strategy and border security policies.

Unmanned Aerial Vehicles (UAVs)

Unmanned Aerial Vehicles (UAVs), commonly known as drones, are aircraft that operate without a human pilot onboard, controlled remotely or autonomously. They are used for various purposes, including military, civilian, and commercial applications. 

What are UAVs?

• Definition
  • UAVs are aircraft that can fly without a human pilot on board, controlled either remotely or autonomously. 
• Also known as
  • Drones, unmanned aircraft systems (UAS), or remotely piloted vehicles (RPVs). 
• How they work
  • UAVs are typically controlled via remote control or through pre-programmed flight plans. 

Why Are UAVs Perceived as Less Threatening?

• Limited Weapon Capabilities
  • Most UAVs are either unarmed or carry smaller weapon payloads compared to fighter jets.
• Surveillance Focus
  • Most UAVs act only to a large extent in the realm of reconnaissance and intelligence gathering.
• Reduced Political and Financial Risk
  • Downing a drone does not involve human casualties or the loss of an expensive piloted airplane.

International Instances of Engagement by Drones

• Iran-U.S. Disaster (2019)
  • An Iranian missile shot a U.S. surveillance drone out of the sky. But no escalation into military conflict took place.
• Russia-U.S. Scuffle (2023)
  • A MQ 9 Reaper UAV was knocked down by Russia without much consequence from the U.S. The pattern here shows that incidents over UAV often lead to restraint rather than escalation.

Increased UAV Employment Conjointly Risks

• Encourages Aggressive Reconnaissance
  • Less risky may welcomingly make countries utilize drones for any mission too risky for piloted aircraft.

Messages for India

• Trans Border Drone Threats from Pakistan
  • For arms and narcotics smuggling, UAVs are increasingly being employed. The Indian defense strategy must balance interception with cost effectiveness.
• Cost Difference
  • Air to air missiles (as in the case for India in 2019) become unattractive propositions against very low value dolls.
• UAV Utilization by Bangladesh
  • The use of Bayraktar TB 2 for border surveillance necessitates a review of India’s drone defense policies.

Future Steps for India in Managing UAV Threats

• Detection Systems in More Depth
  • Invest in radar and electronic warfare to enable seamless interception of UAVs.
• Anti Drone Technologies
  • Drive research on laser weapons, jammers, and smaller, affordable missile options.
• Strategic Partnerships
  • Joint defense efforts with international partners will upscale defense against drones in India.

Okinawa Island

Okinawa is a Japanese island in the East China Sea. In Naha city, Shuri Castle is the rebuilt palace of the Ryukyu Kingdom. One of several remaining Ryukyuan fortresses on Okinawa from the Gusuku period, it features the ornate gate of Shureimon. 

2. Israel Conducts Ground Operation in Northern Gaza and Intensifies Air Strikes

Context:

Israel announced that it had commenced limited ground operations in northern Gaza to regain the Netzarim corridor, a major strategic area that splits Gaza into two. The Israeli Defense Forces had previously withdrawn from this corridor as part of the ceasefire agreement with Hamas in January.

• The Israeli Defense Minister, Mr. Katz, warned that civilian evacuation orders in combat areas would soon be reissued.
• Katz further stated that military attacks on Hamas would escalate unless the hostages held for over 17 months are released.

Escalating Concerns and Regional Dangers

• The escalation of conflict threatens to plunge the region into all out war and reverse any semblance of the fragile peace established only during the two month ceasefire.
• Civilian casualties and humanitarian consequences in Gaza are of international concern as Israel continues its aggression.

The intensified Israeli ground and air operations in Gaza present a sharp escalation in hostilities geared at strategic control and pressuring Hamas for hostage release. The rising civilian toll and the killing of UN personnel in Gaza reflect heavy casualties against a growing humanitarian disaster as the situation spirals downward.

3. Donald Trump Could Reshape the Fed, IMF, and World Bank

Background: Trump’s First Term Approach

• Federal Reserve (Fed)
  • Trump pressured the Fed to lower interest rates but respected its independence, understanding market sensitivities.
• International Monetary Fund (IMF)
  • Retained bipartisan appointments and used the IMF to manage complex global financial issues.
• World Bank
  • Appointed David Malpass but made minimal structural interventions.

Shift in Strategy for Trump 2.0

• More radical and aggressive institutional disruption is underway.
• Trump seems less concerned with financial markets and more focused on dismantling international institutions.
• Has already shut down USAID, signaling potential withdrawal from larger global financial bodies.

World Bank and IMF Under Threat

• Project 2025, Trump’s second-term roadmap, suggests withdrawing from both the World Bank and IMF.
• Trump signed an executive order to review all international intergovernmental organizations for potential withdrawal.

World Bank

• US contribution is relatively small ($2.8 billion in 2024).
• The Bank largely funds itself via bond issuance.
• European countries could step in to compensate for US absence.

IMF

• US contributions are significant (~20% of IMF resources).
• Withdrawal could allow China and other nations to push through long-blocked quota and voting reforms, increasing their influence.

Potential Consequences for the US

• Loss of soft power and global influence.
• Seen as abandoning financial assistance to developing countries.
• Reduced ability to shape international financial and economic policies.

Risks to the Federal Reserve

• Inflation pressures from Trump’s proposed tariffs and tax cuts could trigger conflict with the Fed.
• Trump may blame the Fed if inflation rises or recession hits.
• Risks of presidential interference with Fed independence, possibly through:
  • Attempted removal of Chair Jay Powell.
  • Appointing a Fed chair loyal to the White House.
  • Extreme scenarios, including taking over Fed systems with administration loyalists.

Trump’s second term could mark a historic break from US leadership in international financial institutions. The Fed’s independence may face unprecedented threats. Global markets and US soft power would be significantly impacted if these scenarios unfold.

Mint

4. Why the Euro is Rising Against the Dollar

Source: The Indian Express

Background of Recent Exchange Rate Movements

• Pre-Election (Nov 5, 2024):
  • 1 Euro = 1.0933 USD
• By Trump’s Inauguration (Jan 20, 2025):
  • Fell to 1 Euro = 1.0277 USD
• As of March 18, 2025:
  • Recovered to 1 Euro = 1.0942 USD

Even small decimal shifts matter as trillions of dollars are exchanged daily.

Why Did the Euro Fall Initially?

• Post-Trump Victory Market Sentiment
  • Optimism over US growth due to promised tax cuts and deregulation
  • Anticipation of stronger US economy meant higher demand for USD
  • Comparatively weak outlook for EU economies (low growth, political uncertainty, ECB policy indecision)
  • Result: Massive investor money flowed into USD, weakening the euro

Why is the Euro Now Reversing and Rising?

Worsening US Economic Prospects

• Trump’s early focus:
  • Imposition of tariffs (acting like a tax on consumers)
  • Shrinking the federal government (leading to job and contract losses)
• Rising market uncertainty due to:
  • Policy instability and frequent legal challenges
• OECD report (March 17, 2025):
  • US GDP growth projected to slow from 2.8% (2024) → 2.2% (2025) → 1.6% (2026)
• Negative wealth effect as US markets decline
• Anticipation of Fed rate cuts reduces investment appeal in USD

Improving EU Economic Outlook

• EU growth projections (OECD):
  • 0.7% (2024) → 1.0% (2025) → 1.2% (2026)
• Trump’s trade and security policies have pushed EU leaders away from fiscal austerity
• Germany and France leading efforts to stimulate growth

Will the Trend Sustain?

• No certainty; it depends on:
  • Fed policy announcements (March 19, 2025)
  • Trump’s planned reciprocal tariffs (April 2, 2025)
  • Continued geopolitical and trade stability

Impact on India

• Stronger Rupee vs. USD
  • Strengthened from 87.5 (Feb 6) to 86.5 (Mar 18)
  • Positive: Reduces inflation (lower oil import costs)
• Weaker Rupee vs. Euro
  • From 87.4 (Jan 5) to 94.5 (Mar 18)
  • Positive: Boosts Indian exports to the eurozone

In Short

• Euro’s rise = Result of weakening US economic sentiment + recovering EU confidence
• The coming weeks will be pivotal, with Fed’s policy stance and Trump’s tariff decisions shaping the next moves.

National Affairs

1. What Is the APAAR ID?

• Full form
  • Automated Permanent Academic Account Registry.
• Aim
  • Generate an independent, permanently valid academic ID as part of the “One Nation, One Student ID” initiative.
  • Preserve student academic achievements for smoother inter institution transfers and record verification.
• Aadhaar Integration
  • Linked to Aadhaar and retained in Digi Locker.
  • It is generated through the UDISE+ portal, which is responsible for educational statistics of schools, teachers, and students.
• The Role of APAAR in NEP 2020
  • Being introduced as part of reforms in educational data, so as to strive towards evidence based policymaking and analysis.
  • The Education Ministry is actively pursuing full saturation in CBSE affiliated institutions.

APAAR: Is It Mandatory?

• Status
  • It is voluntary (confirmed as such by the Union government in Parliament in December 2024).
• Confusion
  • Circulars and FAQs from CBSE and the government are not sufficiently clarifying the voluntary nature of the ID system.
  • Many schools and state authorities (e.g. in Uttar Pradesh) are putting pressure on parents and schools to ensure 100% enrolment.
  • Parents usually receive insufficient and/or confusing wordings concerning their right of opting out.

Concerns over Data Security

• Transparency issues
  • IFF’s attempts at obtaining crucial policy documents via RTI were met with multiple transfers back and forth and no genuine responses.
• Extent of data collection
  • Data collection extends beyond academic certificates and grades into concerning areas involving unnecessary and excessive data being collected about minors.
• Legal Risks
  • Collection of minors’ personal data on a massive scale, without any legislative authority, could infringe on constitutional guarantees.
  • It further prohibits the tracking or behavioral observations of children as per Section 9(3) of the Digital Personal Data Protection Act of 2023.
  • Existence of APIs could mean exposure to third parties without sufficient safeguards, increasing the chances of misuse.
• Administrative Pressure
  • Teachers say that the same data is being entered twice through different systems like APAAR and UDISE+, creating drudgery and extra load.

How Is an APAAR ID Generated?

• Methodology
  • Basic demographic details of students are verified by the schools.
  • A consent form shall be filled in and signed by the parents.
  • An ID will be generated after the verification by the school concerned.
• General issues
  • Errors requiring correction and resubmission can result from discrepancies between names of school records and identity documents.

How to Opt out?

• Opt out procedures
  • Parents opt out requests addressed to schools using templates provided by the Software Freedom Law Centre(SFLC).
• Ground reality
  • In practice, states like Uttar Pradesh have issued warnings to certain schools facing threats of derecognition on grounds of insufficient enrolment.
  • On the ground, authorities are intensifying pressure on parents and schools to comply.
  • Some parents managed to successfully opt out.

Key Concerns Moving Forward

• Lack of legal clarity and excessive push for compliance undermining voluntariness.
• Risks of privacy violations and data misuse due to unclear safeguards.
• Duplication of data collection creating administrative inefficiencies.
• Need for stronger legal frameworks, transparency, and parent-friendly communication.

Source: TH

2. Union Cabinet Approved ₹4,500 Crore Greenfield Highway Project

Context:

The Union Cabinet, under the aegis of Prime Minister Modi, has cleared this project for construction of six lane access controlled greenfield high speed National Highway that would connect JNPA Port (Pagote) to Chowk over Maharashtra for a total investment worth ₹4,500 crore into a total length of approximately 29.219 km. The execution of this project will be as per Build Operate Transfer mode.

Significance of the Highway Project

• Port Connectivity Improvement
  • Adding on to JNPA Port constraints on access and connection with major national highways.
• Logistics Efficiency Improvement
  • Travel time will diminish from between 2–3 hours to little as 10 m by avoiding several congested urban points, including Palaspe Phata, Kalamboli junction, and Panvel.
• Allows Preparation for Navi Mumbai International Airport
  • Avi Mumbai Airport is likely to start operations around 2025. The highway promises smooth cargo movement and passenger movement.
• Supplement PM Gati Shakti National Master Plan
  • Fits the vision of the government in respect to complete integration of infrastructure planning and improvements in logistics under the PM Gati Shakti initiative.

3. India’s Monsoon Forecast

Context:

India looks forward to the 2025 monsoon forecast for implications on agriculture, water resources, and economic stability. Will El Niño or La Niña rule the 2025 2026 season?
Not to forget, El Niño and La Niña explained the high incidence of monsoon failing or surplus years to only 60 percent, but still remaining as great indications.

Current ENSO Confusion: La Nina or Something Else?

• Early projections in 2024 suggested that a strong La Niña would develop, supported by cold sea surface temperature (SST) anomalies deep in the eastern tropical Pacific.
• However, these SST cold anomalies shifted toward the west, and at that time there were already warm SST anomalies in the far east an unusual and confusing phenomenon.
• Wind anomalies also deviate from norms, where unexpected easterly and westerly wind patterns coexist.

What Is the Dateline El Niño?

• This beautiful strange pattern looks like a Dateline El Niño (also called Central Pacific El Niño), with warm SST anomalies close to the dateline but cold further east.
• La Niña terms, however, will have colder SSTs in the extreme eastern to central Pacific with more predictable patterns.

The role that ENSO Transition Mode (ETM)

• Recent studies indicated that the ENSO Transition Mode (ETM), a natural variability pattern in the southern Pacific, is impacting the anomalies of both tropical wind and SST.
• Hence, ETM probably disrupted the expected transition from El Niño (2023 24) to La Niña (2024 25) that resulted in the ongoing chaotic ENSO state.

Forecast for Summer and Autumn of 2025

• The 2025 climate forecasts are pretty murky:
  • Some models predict the emergence of La Niña by fall.
  • Others see it as a neutral year, or occasionally it might even paint a discharge for a strong El Niño scenario.
  • This divergence makes the science of accurate monsoon forecasting increasingly difficult.

Climate Change, Jet Streams, and Monsoon Complexity

• The ENSO monsoon relationship has been undergoing changes over the last decades.
• Increasingly global warming and the mid latitude meandering of jet streams will cause further variations in monsoon and cyclone patterns.
• These pre monsoon cyclones will in turn influence the timing and amount of rain during monsoon onset.

Hope, Uncertainty, and Preparation

Yet, with the complexity of climate interactions and unprecedented heatwaves in early 2025, managing both expectations and risks remains a formidable challenge. India’s farmers and policymakers are left on edge, balancing hope with preparation amid climate uncertainty. The India Meteorological Department (IMD) and global climate scientists continue working toward improving model accuracy.

4. India’s Inward Remittances in FY24

Context:

India’s inward remittances more than doubled from $55.6 billion in FY11 to $118.7 billion in FY24. Advanced Economies (AEs) US, UK, Singapore, Canada, and Australia accounted for 51.2% of total remittances in FY24, up from 34.2% in FY21. The Gulf Cooperation Council (GCC) countries — UAE, Saudi Arabia, Kuwait, Qatar, Oman, Bahrain contributed 38% of India’s total inward remittances in FY24.

Shift from GCC to Advanced Economies

• According to the sixth round of India’s Remittances Survey (RBI, March 2025), there has been a clear decline in GCC dominance as the source of India’s remittances.
• The surge from AEs is attributed to changing migration patterns, with more skilled Indian professionals moving to developed economies.
• Growth of remittances from AEs outpaced that of the GCC, reflecting stronger employment prospects for skilled workers abroad.

Country-Wise Remittance Breakdown (FY24 vs FY21)

Country/Region	Share in FY21 (%)	Share in FY24 (%)
United States	23.4	27.7
United Arab Emirates	18.0	19.2
United Kingdom	6.8	10.8
Singapore	Not available	6.6
Canada	Not available	3.8
Australia	Not included in FY21 data	2.3

US: The Largest Remittance Source

• The US remained the top contributor with 27.7% share in FY24, up from 23.4% in FY21.
• 78% of Indian migrants in the US are employed in high-earning sectors:
  • Management
  • Business
  • Science
  • Arts
• Growth driven by a 6.3% increase in foreign-born workers in the US labor force in 2022, up from 0.7% in 2019.

UAE: The Second-Largest Source

• The UAE contributed 19.2% in FY24 (up from 18% in FY21).
• Indian migrants in the UAE are primarily employed in blue-collar jobs, especially in:
  • Construction
  • Healthcare
  • Hospitality and tourism

Other Key Contributors

• UK’s share rose significantly from 6.8% (FY21) to 10.8% (FY24), indicating robust job creation and migration.
• Singapore accounted for 6.6% of total remittances, supported by growth in financial and tech sector employment for Indian expats.
• Canada (3.8%) and Australia (2.3%) also showed rising contributions, highlighting the diversification of skilled Indian migration destinations.

Insights from RBI’s Survey

• Skilled migration to developed economies is becoming a dominant driver of India’s remittance growth.
• The higher earnings potential in AEs means larger average remittance amounts per migrant, despite fewer individuals compared to the GCC.
• The GCC remains significant, but its share is gradually declining as remittance growth from white-collar migrant destinations accelerates.

Source: BS

5. Prime Minister Internship Scheme (PMIS)

Context:

Prime Minister Internship Scheme (PMIS): As per the Standing Committee Report on the Ministry of Corporate Affairs (MCA), top five emerged companies being the leading providers of internship opportunities

Breakdown of Interns by Gender and Age

• Interns by Gender
  • 72% Male
  • 28% Female
• Main Point of Feedback: Need for improvement in gender dynamics and location based opportunities (appropriate travel distance: 5 10 km).

State wise Participation

• Uttar Pradesh – 1,234
• Assam – 994
• Bihar – 715
• Madhya Pradesh – 693

Challenges Identified in MCA

• Mismatch in published internship opportunities versus actual participation
• Imbalanced gender ratio
• Longer duration of internship not matching the expectations of candidates
• Unmatching interests of individual candidates with roles provided
• Problems related to age criteria for applicants from ITI and Polytechnic
• Location constraint for internship acceptance

Funding and Allocation

• FY2024-25
  • Budget Estimate (BE): ₹2,000 crore
  • Revised Estimate (RE): ₹380 crore
• Actual spending (till mid February 2025): ₹21.10 crore
• FY2025 26
  • Amount will now enhance to ₹10,831.07 crore

Recommendations by the Parliamentary Panel

• Intensification of outreach and mass awareness of the scheme.
• Encourage States to establish specific agencies for implementing and monitoring.
• Respond adequately to challenges such as gender imbalance, role mismatch, and geographic constraints.
• Move towards the ambitious target of internship for one crore youth in 500 top companies over five years.

6. Chabahar Port and Sagarmala 2.0

Context:

The Chabahar Port, operated by state-owned India Ports Global (IPGL), currently has a capacity of 100,000 TEUs (Twenty-Foot Equivalent Units).

• The Centre plans to expand capacity fivefold to 500,000 TEUs over the next decade.
• ₹4,000 crore capital expenditure is underway, focusing on:
  • Acquiring modern cranes
  • Mechanisation and terminal modernisation
• Cranes are expected to be procured within the next three years.

Traffic Projections at Chabahar

• FY25: 30,000 TEUs projected
• 5th year of agreement: 140,000 TEUs
• 10th year of agreement: 300,000 TEUs

Challenges and Geopolitical Risks

• Concerns over viability intensified after US President Donald Trump’s executive order (Feb 2025), directing sanctions reassessment, which could impact the Chabahar Port project.
• Ongoing discussions between the Ministry of Shipping and the Ministry of External Affairs on potential implications.
• India’s negotiations successfully avoided a Minimum Guaranteed Traffic (MGT) clause with penalties, though traffic targets are part of the agreement.

Strategic Importance of Chabahar Port

• Key gateway for the International North-South Transport Corridor (INSTC).
• Crucial for trade routes connecting India, Central Asia, and Russia, aimed at reducing transit time and boosting connectivity.

Sagarmala 2.0: ₹40,000 Crore Initiative for Maritime Growth

Key Highlights of Sagarmala 2.0

• Announced by Union Minister Sarbananda Sonowal during the National Sagarmala Apex Committee meeting.
• Budgetary corpus: ₹40,000 crore.
• Focus on:
  • Shipbuilding
  • Ship repair
  • Ship recycling
• Aims to enhance India’s maritime economy and position the country as a global maritime powerhouse.

7. World Happiness Report 2025

Context:

Happiness is important for overall well-being, improving mental and physical health and helps in leading a positive life. The United Nations released the World Happiness Report 2025 on the occasion of the International Day of Happiness. This year, India stood at 118th position among 147 countries.

Key Highlights

• India ranks 126th out of 143 countries, with a happiness score of 4.054, placing it at the bottom among BRICS nations.
• BRICS Happiness Scores (2021–23 average)
  • Brazil: 6.27
  • Russia: 5.79
  • India: 4.05
  • China: 5.97
  • South Africa: 5.42

India vs. Neighboring Countries

• Pakistan: Rank 108 (Score: 4.657)
• Nepal: Rank 93 (Score: 5.158)
• Myanmar: Rank 118 (Score: 4.354)
• India fared better than Sri Lanka, Bangladesh, and Afghanistan, which ranked lower.

Global Leader

• Finland topped the happiness rankings with a score of 7.741.

Age-wise Happiness in India (2021–2023 average)

Age Group	Happiness Score	Change from 2006–2010
Below 30 (Young)	4.28	-0.79
Lower-middle age (30–44)	3.76 (Lowest)	-1.12 (Sharpest fall)
Upper-middle age (45–60)	4.01	-0.94
Above 60 (Old)	4.10	-0.87
All Ages	4.05	-0.92

• Lower-middle-aged Indians (30–44 years) are the least happy demographic with the steepest decline in happiness scores since 2006–10.

Factors Influencing Happiness Scores

The report considers six major indicators:

• GDP per capita
• Life expectancy
• Social support
• Perceived freedom of choice
• Generosity
• Perception of corruption

8. Inward remittances to India

Context:

Inward remittances to India have more than doubled from $55.6 billion in FY2011 to $118.7 billion in FY2024. Advanced economies (AEs) including the US, UK, Singapore, Canada, and Australia accounted for 51.2% of total remittances in FY24, after 34.2% in FY21. This surge highlights a clear shift in migration patterns towards a skilled Indian diaspora working in advanced economies.

Declining Share from Gulf Countries

• The Gulf Cooperation Council (GCC) countries UAE, Saudi Arabia, Kuwait, Qatar, Oman, and Bahrain contributed 38% of India’s remittances in FY24, down from 50.2% in FY21.
• It is clear from this shift that, even though the GCC region remains important, its hold is slowly being replaced by the remittances coming out of the high income, skilled migration destinations.

Comparative Data on Remittance Sources

Source	FY21 Share (%)	FY24 Share (%)
Advanced Economies (US, UK, Singapore, Canada, Australia*)	34.2%	51.2%
GCC Countries (UAE, Saudi Arabia, Kuwait, Qatar, Oman, Bahrain)	50.2%	38%

Reasons Behind the Shift

• The increase in skilled professional migration to advanced economies (especially IT, healthcare, and finance).
• States such as Canada and Australia have relaxed entry restrictions regarding long term migration.
• Gradual decline in the number of low skilled labor exports to GCC countries with an onward shift in the economic diversification of those countries.
• Greater value adding jobs and salaries in the US, UK, and Singapore have contributed to higher per capita remittances.

Future Prospects

• Such global conditions will give further momentum to India’s rising inward remittances:
  • Global demand for skilled professionals.
  • Stronger Indian diaspora presence in high income countries.
  • A depreciating rupee, increasing the economic incentives to send money to India.
  • The share of AEs would further increase, while GCC contributions would either stabilize or decline. Localization efforts and economic transitions in those countries will bring this.

Banking/Finance

1. Government Announces ₹1,500 crore UPI Incentive Scheme for FY 2024-25

Context:

The Union cabinet announced an incentive scheme for Unified Payments Interface (UPI) payments of less than ₹2,000 for 2024–25 with an outlay of around ₹1,500 crore. Banks will get a 0.15% incentive, one fifth of which will be incumbent on adequate performance of their infrastructure over the year. The incentive will be paid out in the case of payments to small merchants. 

Features of UPI Incentive Scheme 2024-25

• Incentive rate
  • 0.15%for each qualified transaction to the banks.
• Performance linked component
  • 20% of that incentive will be dependent on the banks keeping robust infrastructure for their performance standards up to par.
• Transaction limit
  • The maximum ceiling would only be for lesser payments within ₹2,000; no incentives would be paid on higher payments.
• Target Audience
  • Facilitate the small merchants using UPI payments without charging payouts that involve merchant discount fees(MDR).

Importance of This UPI Incentive Scheme

• As of now, UPI payments do not attract merchant fees, like debit and credit cards, hence digital infrastructures are not cost effective for banks and merchants to invest in.
• The incentive will be paid to banks and will encourage merchants to increase their acceptance of UPI for smaller amounts.
• Cost free digital offerings for the smaller merchants, diminishing dependence on cash transactions.

Government Digital Payments Strategy

• To achieve a target of ₹20,000 crore through UPI transaction volumes in the coming FYs 2024 25.
• During FY 2023 24, the government has spent ₹3,631 crore in incentive disbursement to banks, which is more than the last two years combined.
• It also covers RuPay debit card transactions, which promote the NPCI as a home grown alternative to Visa and Mastercard.

Other Cabinet Decisions

Greenfield National Highway in Maharashtra

• Approval for a six-lane access-controlled greenfield highway in Maharashtra.
• Project to be developed on Build, Operate and Transfer (BOT) model.
• Estimated cost: ₹4,500.62 crore.

Brownfield Ammonia-Urea Plant in Assam

• Approval for a 12.7 lakh tonne ammonia-urea complex at Brahmaputra Valley Fertilizer Corporation Limited, Namrup, Assam.
• Project cost: ₹10,601 crore.

Revised Rashtriya Gokul Mission

• Focus on livestock sector growth with enhanced measures for cattle productivity and indigenous breed promotion.

Revised National Program for Dairy Development

• Additional allocation of ₹1,000 crore, bringing the total project budget to ₹2,790 crore for the 15th Finance Commission period.

The UPI incentive scheme for FY 2024 25 reflects the ongoing governmental initiative toward a cashless economy while yet maintaining fiscal prudence in the growth of digital payments. Special attention to small merchants and banks is intended to further deepen digital penetration in India’s economy.

Source: TH

2. RBI Bulletin: State of the Economy

Context:

The Reserve Bank of India (RBI), in its monthly bulletin’s State of the Economy article, has warned that escalating trade wars and tariff tensions, particularly after Donald Trump’s return as US President, could adversely impact global growth and fuel inflation.

• A full-blown tariff war could:
  • Raise US inflation by 1.0–1.2%.
  • Lower US GDP growth by 0.6 percentage points in 2025.
  • Result in the US economy being 0.3–0.4% smaller in the long run.

Global Financial Impact and Market Reactions

• As of March 17, 2025, the US dollar has lost all gains made since mid-November 2024, impacted by trade policy uncertainties.
• Gold prices surged to a historic high of $3,000 per ounce on March 14, 2025, driven by safe-haven demand.
• Financial markets are pricing in the anticipated global economic slowdown.

Impact on India’s Economy

• Despite external turbulence, the Indian economy continues to show resilience:
  • The headline inflation rate dropped to a 7-month low of 3.6% in February 2025 (down from 4.3% in January) due to falling food prices.
  • However, core inflation rose to 4.1% in February, up from 3.6% in January.
• Real GDP growth in Q3 FY25 was recorded at 6.2%, rebounding from previous quarter sluggishness.

Key Domestic Economic Indicators

• Private consumption expenditure has increased, indicating strong consumer confidence and sustained demand.
• Government spending has picked up, further boosting growth.
• Key sectors showing robust growth:
  • Construction
  • Financial services
  • Trade
• High-frequency indicators point toward sustained growth momentum in Q4 FY25.

Monetary Policy and Liquidity Management

• In February 2025, the RBI reduced the policy repo rate by 25 basis points, the first cut in nearly five years.
• Another rate cut is widely anticipated in April 2025.
• The RBI has actively managed tight liquidity conditions due to tax outflows and foreign portfolio investor (FPI) withdrawals through:
  • Open Market Operations (OMO)
  • Daily Variable Rate Repo (VRR) auctions
  • Dollar/Rupee buy-sell swap auctions
• During the quarter, the RBI injected approximately ₹5.5 trillion of durable liquidity into the banking system.

Rising Bank Dependence on Certificates of Deposit (CDs)

• Amid ongoing liquidity tightness, banks have increased reliance on Certificates of Deposit (CDs) for funding.
• CD issuances in the primary market have grown by 34% year-on-year, reaching an all-time high of ₹10.58 trillion (up to March 7, 2025).

Strong Domestic Fundamentals Amid Global Challenges

• While global trade wars and tariff tensions loom large and could ripple through international financial systems, the Indian economy is bolstered by stable inflation, robust consumption, and government spending.
• The RBI’s proactive monetary measures and liquidity infusions aim to ensure financial stability and support continued domestic growth.

Source: BS & IE

3. SEBI Consultation Paper on Open Interest (OI)

Context:

Since February 24, 2025, the SEBI consultation paper has affected OI calculations, limits on positions, and new trading sessions before and after continued derivatives trading. The delta calculation has been staunchly opposed by the Futures Industry Association, or FIA, a global body representing foreign portfolio investors.

What Is Open Interest?

Open interest is the total number of outstanding derivative contracts for an asset—such as options or futures—that have not been settled. Open interest keeps track of every open position in a particular contract rather than tracking the total volume traded.

SEBI”s Key Proposals

• Change in OI Calculation
  • Current: Simple addition of notional OI in futures and options Proposed: Aggregation of delta adjusted options positions with futures OI to better reflect price sensitivity.
  • Delta Based Position Limits: Delta (ranging from 1 to +1) would become the benchmark for position limits, representing option price sensitivity relative to underlying asset movements.
• Pre Opening and Post Closing Sessions
  • New trading windows for derivatives proposed to enhance price discovery.
• Eligibility Criteria for Non Benchmark Index Derivatives
  • New standards to offer derivatives on indices other than market benchmarks.

FIA Has Conclusively Identified Concerns as

• Operational Complexity
  • Delta based calculations necessitate constant recalculation and monitoring, which increases error susceptibility and heavy burden.
• Liquidity Risks
  • Frequent delta adjustments may force participants out, leading to low liquidity and high volatility.
• Price Manipulation Risks
  • The shifting limits could unconsciously lead to “unintentional market distortions.”
• Contrary to Global Standards
  • Delta based OI calculations are such issues that most prominent markets such as Hong Kong and Chicago Mercantile Exchange (CME) fail to utilize.
• Adversely Impacts Frequent Trading Strategies
  • Strategies such as index arbitrage or long options positions would be subjected to penalties under delta threshold but would incur no coverage increase in risk.

Debate over Proposed Limits

• SEBI proposes an increase in the end of day (EoD) limit for entities to be ₹1,500 crore instead of ₹500 crore. FIA states that if delta methodology is adopted, the EoD limit should be ₹7,500 crore to accommodate such fluctuating risk thresholds.

Market Perspective

• There are no serious defaults in the present system, which interrogates the need for an overhaul. FIA suggests SEBI reconsider and analyse other adaptations of global methodologies before it embarks upon complicated changes.

While SEBI’s intent to strengthen risk monitoring is laudable, the FIA’s indorsement throws a huge trellised shadow around “practical and operational risks” capable of disrupting liquidity and market efficacy. A balanced, globally benchmarked approach adapted to best practices in standard risk management should therefore be developed to address all concerns around this proposal.

4. SEBI’s $7 Billion Mutual Fund Limit

Context:

The SEBI $7 billion overseas investment limit for mutual funds has been reached, limiting direct mutual fund-based global diversification for Indian investors. An alternative option is investing abroad via Portfolio Management Services (PMS), allowing professionally managed global investments through the Liberalised Remittance Scheme (LRS).

PMS Investment Route: Key Features

• Minimum Investment: $75,000 (approximately ₹66 lakh).
• LRS Limit: Up to $250,000 can be remitted in a financial year.
• Popular PMS Example: Marcellus Global Compounders Portfolio.

Geographic & Sector Allocation (Marcellus Global Compounders Portfolio)

• Geographic Split:
  • 75% in the United States
  • 20% in Europe
  • 5% in Canada
• Sectoral Allocation (US Portfolio):
  • Industrials: 39% (seen as undervalued with strong long-term stability)
  • Technology: 26%
  • Financials: 11.6%
  • Consumer Discretionary: 9.5%
  • Healthcare: 7.8%

Why Emerging Markets Are Avoided

• Inconsistent gains over the past two decades (excluding India).
• Regulatory unpredictability (e.g., China’s crackdowns).
• Indian investors already have exposure to EMs via domestic investments.
• Top-quality, stable companies predominantly exist in developed markets.

Investment Process in Marcellus PMS

1. Upload verification documents (ID proof, PAN, canceled cheque/bank statement).
2. Marcellus sets up an account with Interactive Brokers (US-based) in around two days.
3. Transfer of minimum $75,000 via LRS to Marcellus’ overseas pool account.
4. Entire process typically takes 3–4 working days.

Tax Considerations for Indian Investors

• Tax Pass-Through Structure: The tax liability falls on the investor.
• Dividend Taxation:
  • US companies withhold 25% tax on dividends.
  • Dividends are added to taxable income in India, but investors can claim foreign tax credit via DTAA (Double Taxation Avoidance Agreement).
• Capital Gains Taxation (on US stocks/ETFs):
  • Holding >24 months: 12.5% LTCG tax + surcharge & cess (no indexation benefits).
• Tax Collection at Source (TCS):
  • Proposed increase in threshold from ₹7 lakh to ₹10 lakh.
  • 20% TCS on remittance above this threshold.
  • TCS is adjustable against final tax liability or refundable if excess.
• Tax Reporting Requirements:
  • Schedule FA (Foreign Assets)
  • Schedule TR (Tax Relief)
  • Form 67 (for claiming foreign tax credits)

Despite the SEBI overseas mutual fund cap, PMS investments via LRS offer a viable global diversification route. Investors must consider taxation, reporting obligations, and the higher entry barrier of $75,000. Developed markets like the US and Europe remain the top choices for consistent returns, regulatory stability, and industry leadership.

5. SEBI to Strengthen and Standardise Internal Audit Mechanism at Market Infrastructure Institutions (MIIs)

Context:

The Securities and Exchange Board of India (SEBI) is planning to tighten and standardise internal audit processes at market infrastructure institutions (MIIs). This move follows findings that significant audit observations were missed by internal auditors during SEBI inspections.

Key Proposed Changes by SEBI

Strengthened Internal Audit Mechanism

• Internal auditors’ observations must be:
  • Sent to heads of departments (HODs) for their comments.
  • Shared with the audit committee.
• HODs will be required to respond within a timeline set by the audit committee.

Mandating Audit Committee Independence

• Managing Directors (MDs) may potentially be barred from being part of audit committees.
• Only key managerial personnel (KMPs) can attend audit committee meetings with prior approval from the committee chairman.
• Aim: Ensure independence and objectivity in the audit process.

Exclusive Submission of Internal Audit Reports

• Internal audit reports will be submitted only to the audit committee, further insulating them from management influence.
• SEBI is expected to release a consultation paper soon for wider industry feedback.

Standardising Internal Audit Framework

Comprehensive Coverage Required

• Internal audits must cover all functions and activities of MIIs, including:
  • Critical operations
  • Regulatory compliance
  • Risk management
  • Investor grievance redressal
  • Business development

Industry-Wide Standardisation

• Terms of reference for internal audits will be standardised across MIIs through consultation with the industry standards forum of MIIs.

Final Reporting Process

• After incorporating department heads’ comments, the final internal audit report must be presented to the audit committee for review and action.

Objective

• SEBI’s overarching goal is to enable MIIs to:
  • Strengthen risk management frameworks
  • Improve internal control mechanisms
  • Enhance governance processes
  • Adopt a systematic and disciplined approach to internal evaluation and accountability.

BL

6. RBI’s State of the Economy Report

Key Highlights

• Headline inflation has dropped significantly from above 6% in October 2023 to 3.6% in February 2024.
• Key contributors to this decline include:
  • Robust kharif production
  • Improved rabi sowing
  • Higher reservoir water levels
  • Seasonal correction in vegetable prices
• This moderation in inflation is expected to cushion the Indian economy against trade tensions and global economic volatility.

India’s External Sector Strengths

• Resilient services exports continue to perform well, remaining largely unaffected by global disruptions.
• Structural strengths such as:
  • Sound fiscal policies
  • A calibrated monetary framework
  • Strong digital transformation initiatives
    are expected to underpin long-term, sustainable economic growth.

Monetary Policy Outlook

• The RBI reduced the policy rate by 25 basis points to 6.26% in February 2024.
• According to an ET poll of economists, another 25 bps rate cut is expected in April, given the inflation moderation.

Global Economic Concerns

• US tariff policies under President Trump are creating global growth uncertainty.
• Rising tariffs may push up consumer prices, which could raise inflation risks globally and impact growth in both emerging and advanced economies.

Risks for India

• Emerging economies, including India, are poised for faster growth than advanced economies.
• However, risks include:
  • Capital outflows
  • Currency depreciation pressures
• Since October, foreign portfolio investors (FPIs) have withdrawn $29 billion from Indian stocks, marking the largest six-month outflow.

Indian Rupee and Capital Flows

• FDI inflows remained strong, growing 12.4% year-on-year to $67.7 billion during FY25 (April–January).
• However, net FDI dropped to $1.4 billion from $11.5 billion a year ago due to higher repatriation and increased outward FDI.
• Outward remittances under the Liberalised Remittance Scheme (LRS) rose to $2.8 billion in January from $2.3 billion in December.
• Despite rupee depreciation, the Real Effective Exchange Rate (REER) stood at 102.37 in February, indicating the rupee remains overvalued by 2.4%, though improving from the November REER of 108.14.

Inflation Control Key to Navigating Global Headwinds

• With inflation easing, India is better placed to tackle external risks like trade tensions, capital outflows, and global volatility.
• Sustained fiscal discipline, monetary stability, and digital advancements will continue to be pillars of India’s economic resilience.

The Economic Times

7. SEBI Partners with DigiLocker to Reduce Unclaimed Financial Assets

Context:

The Securities and Exchange Board of India (SEBI) has announced a partnership with the government’s DigiLocker platform.

• The objective is to help reduce unclaimed financial assets in the securities market.
• Investors can now store and access key financial documents such as:
  • Demat account holdings
  • Mutual fund statements
  • Consolidated Account Statements (CAS)
    directly through DigiLocker.

Unclaimed financial assets

Unclaimed financial assets are funds or financial instruments that remain inactive, dormant, or unclaimed by their rightful owners for a legally defined period, such as bank deposits, shares, insurance policies, or dividends. 

• Unclaimed financial assets (UFAs) are assets that have been left unclaimed or inactive by their rightful owners for a period of time, often defined by law. 
• Examples:
  • Bank deposits: Savings, current accounts, or fixed deposits that haven’t been accessed for a certain period. 
  • Shares and dividends: Unclaimed dividends from stocks or collective investment schemes. 
  • Insurance policies: Life policies or endowment policies where payouts remain uncollected after maturity. 
  • Other financial assets: Mobile money accounts, unclaimed wages, or utility refunds. 

New Features for Investors

• SEBI’s circular states that:
  • Investors using DigiLocker can automatically fetch their CAS on January 1st each year.
  • This feature aims to ensure investors regularly review and track their financial assets, reducing the likelihood of assets becoming unclaimed.
• Previously available documents in DigiLocker include:
  • Bank account statements
  • Insurance policy certificates
  • New Pension Scheme (NPS) account statements

Impact of SEBI-DigiLocker Collaboration

• The move is expected to:
  • Increase financial awareness among investors.
  • Provide a secure, centralized repository for key investment documents.
  • Minimize unclaimed investments due to forgotten or misplaced statements.
  • Boost the adoption of paperless financial documentation.

Digital Push for Better Asset Tracking

• SEBI’s partnership with DigiLocker is part of a broader effort to enhance financial literacy, investor convenience, and reduce unclaimed financial assets in the capital markets.
• This initiative complements existing features of DigiLocker and aligns with India’s digital financial inclusion goals.

8. RBI Governor Calls Out Banks for Poor Customer Service

Context:

RBI Governor Sanjay Malhotra sharply criticized Indian banks for their poor customer service and complaint management. Banks in India held ₹103 lakh crore ($1.2 trillion) in fixed deposits in 2023, but small customers continue to face negligence.

• Complaints under RBI’s ombudsman scheme have been growing at a 50% CAGR over the past two years, highlighting a systemic issue.
• Malhotra termed this a “highly unsatisfactory situation” needing urgent corrective action.

Rampant Underreporting and Regulatory Violations

• Banks received over 1 crore complaints in FY24.
• Many complaints were misclassified as queries or requests, violating regulatory norms.
• The practice of window dressing complaint data was flagged by the RBI.

Complexity of Banking Complaints Grows

• Traditional complaints (like forgery or wrong entries) have now evolved into:
  • Mistaken credit score downgrades, impacting customer loan eligibility.
  • Misselling of financial products (investment schemes, insurance) by bank staff incentivized for sales rather than service.
  • Poor due diligence in gold loans, unsecured loans, and top-up loans, leading to increased consumer risk.

Homebuyer-Banker Nexus Under Scrutiny

• The Supreme Court has called for a CBI probe into the alleged collusion between banks and builders.
• Banks disbursed up to 60% of housing loans despite knowing that construction had not even begun, indicating possible misconduct.
• This has resulted in lakhs of homebuyers paying EMIs without receiving their homes.

RBI’s Stern Warning to Banks

• Malhotra warned that if these issues remain unresolved, they will erode consumer confidence and tarnish the entire financial ecosystem.
• Banks are urged to shift focus from aggressive sales to transparent, customer-first banking practices.

Time for Banks to Clean Up

• With India’s banking sector holding massive deposits, the small customer cannot be ignored.
• Banks must address systemic flaws in complaint redressal, improve transparency, and adhere to regulatory standards.
• Failure to act will undermine trust and damage the credibility of the entire financial system.

TOI

Economy

1. Why a Safeguard Duty?

Context

The Directorate General of Trade Remedies (DGTR) has suggested the imposition of a 12% safeguard duty on steel products for a period of 200 days. This is an attempt to support the domestic steel industry which suffered an incidence of “serious injury” due to sudden invasion of steel products. In the meantime, the recommendation will be placed for consideration before the Department of Revenue under the Ministry of Finance.

Background: Steel Import Surge and Global Trade Diversion

• The importing activities of finished steel from China, South Korea, Vietnam, and Japan have alarmed Indian authorities.
• A surge was triggered by trade diversion after the U.S. implemented a 25% tariff on steel and aluminum (effective March 12) on the latter.
• Since 2018, global steel trade patterns have changed with the EU, South Africa, Turkey, Vietnam, and Malaysia taking measures to guard their own markets.

DGTR Recommendation and Its Urgency

• The DGTR report states that immediate action is warranted to prevent any irreparable damage to the domestic steel industry.
• Key statement: “There is a necessity for immediate application of provisional safeguard measures.”
• With the recommendation, it intends to counter trade diversion and prevent the deluge of surplus steel from other markets being guzzled by India.

Economic Implications

• The safeguard duty could raise raw material costs for MSMEs and steel dependent industries at a time when global steel prices are expected to soften.
• However, it already has raised metal stocks on the National Stock Exchange (NSE)
  • The Nifty Metal Index increased by 1.67%, closing at 9,185.20.
  • Hindustan Zinc stocks were up by 9.48% in intraday trading.

Summary of Recent Restrictive Measures (Source: DGTR)

Product Category	Action Taken
Non-alloy & alloy steel flat products	Preliminary findings (March 2025) recommend a 12% safeguard duty for 200 days.
Low-ash metallurgical coke	Quantitative restrictions imposed from January 1 – June 30, 2025.
Ferromolybdenum	Two-year safeguard duty announced in May 2023. Imports from South Korea faced a 5% duty (Oct 2023 – Oct 2024), followed by a 3.75% duty for the next year.

Balancing Industry Protection and Economic Costs

• The final decision rests with the Department of Revenue, with stakeholders closely watching for potential impacts on raw material costs and India’s trade competitiveness.
• The 12% safeguard duty aims to protect India’s steel manufacturing sector against global trade distortions.
• However, higher input costs could strain MSMEs and related sectors.

2. Improved System for Tracking Microenterprises

The Existing Scenario: The Deficit Economic Census

• Economic census of India is scheduled to monitor microenterprises along with other firms once in every five years.
• It is a sampling frame for informal sector surveys which help in estimation of informal sector contribution to GDP of India.
• Since inception in mid 1970s, following chronic challenges bad data quality, coordination problems between NSO and state DES, staff and supervision issues have plagued the census.
• It were also some issues in the execution of 7th economic census (2019-20) where most of the assignments were done to Common Service Centres (CSC) assigned by IT ministry and with very limited participation for the state.
• The outcome of 7th census is so unreliable that it may not be published.

Alternatives Needed

• India could build a meta database of enterprises instead of flawed quinquennial censuses on GST registrations and state level registrations under different laws like Shops and Establishments Act or Cooperative Act.
• A unique state ID could be assigned to each enterprise with dynamic updates of database status as per renewal data.

Challenges With This Approach

• They include a large number of microenterprises remaining unregistered, such as the following:
  • Roadside vendors
  • Seasonal businesses (selling sodas in summer)
  • Food carts during the evening
  • Tracking of these informal would still be necessary through sample surveys.

A New Proposition: Enterprise Sample Registration

• This has been modeled after the Sample Registration System (SRS) from the Registrar General of India (RGI), which will track birth and death.
• The ESRS would involve:
  • Randomly selected villages and urban blocks across India.
  • Part time enumerators would be observing a specific enterprise activity over a period.
  • Capture the births, deaths, and re births of microenterprises.
  • Dynamic real time insight into the volatility and fluidity of the microenterprise ecosystem in India would be provided.

Why ESRS is Important?

• Quinquennial censuses or occasional surveys cannot record the seasonality or the short term volatility in micro enterprises. It will enable ESRS to define economic contributions from small businesses acting at:
  • Only in certain periods during the year
  • Specific few hours within a day
  • and hence will present rich information to policymakers, investors, and economic analysts.

Global Context and Long Term Relevance

• The Chinese economic census of 2023 points out that, even at the top of large industrial economies, millions exist in microenterprises.
• In this sense, micro enterprises will occupy a considerable economic space in India, with or without the success of its manufacturing ambitions.
• It needs to embrace, monitor, measure their real survey into vanishing figures into the void.

3. Role of Manufacturing in India’s Economic Growth (2013-2024)

Key Trend: Manufacturing Losing Ground to Services

• Over the decade ending 2023-24, manufacturing’s share in India’s economy has declined significantly.
• While not outright de-industrialization, the shift toward services is unmistakable and increasingly difficult to reverse.
• India appears to have skipped the classic industrialization phase, transitioning from an agrarian economy directly to a service-based economy.

Why This Matters: Capital Formation and Economic Sustainability

• Services are less capital-intensive compared to manufacturing.
• This shift affects long-term sustainable growth, as manufacturing typically drives higher capital formation.
• The national goal of making manufacturing contribute 25% of GDP looks increasingly elusive.

Manufacturing Sector Data: 2013-14 vs. 2023-24

• Share in Gross Value Added (GVA) has dropped from 16.5% to 14.3%.
• Share in gross capital formation has fallen from 17.3% to 15.7%.
• Ratio of value added to gross output (a measure of productivity) declined from 21.6% to 20.6%.

Key Challenges Facing Manufacturing

Supply-Side Issues:

• Freer trade policies make importing products easier, dampening domestic manufacturing competitiveness.
• Mobile phone assembly dominates, with true domestic production still limited, despite PLI schemes.
• Imports continue to dominate in several sectors; domestic manufacturing progress remains slow.

Demand-Side Issues:

1. Shift in consumption patterns:
   • Share of manufactured goods in final consumption dropped from 57.2% to 48.8%.
   • Services like health, transport, and education gained preference.
2. Decline in non-durable goods consumption and only a marginal rise in durable goods consumption (from 2.8% to 3.2%).
3. Weak demand leads to underutilized capacity and low private investment in manufacturing.

Where Investments Are Flowing Instead

• Investment is moving towards:
  • Construction: Share increased from 4.8% to 8.1% (housing and infrastructure).
  • Trade, hotels, restaurants, transport, communication: Share rose from 15.3% to 22.2%.
  • Railways: Capital formation doubled from 1.3% to 2.7% due to government expenditure.
• The share of private non-financial corporations in capital formation decreased from 36.6% to 32.4%.

Government Efforts: Supply-Side Push

• Make in India campaign aimed to promote domestic manufacturing.
• PLI (Production-Linked Incentive) schemes were launched with substantial budget support.
• Fiscal measures:
  • Corporate tax reductions.
  • GST rationalization to ease the business environment.
• Despite these efforts, the demand-side shift toward services continues to dominate.

What Needs to Change

• The demand challenge cannot be solved with supply-side measures alone.
• Manufacturing companies must:
  • Innovate and produce cost-effective products.
  • Align with consumer preferences influenced by higher incomes and service-sector lifestyles.
• A more consumer-centric strategy is essential to regain manufacturing momentum.

Way Forward

• India’s economy is experiencing a structural shift towards services at the cost of manufacturing.
• While government initiatives have focused on supply-side support, consumer demand for manufactured goods remains weak.
• To rejuvenate manufacturing, India needs both innovative production strategies and strong domestic demand, ensuring that the sector remains a vital contributor to sustainable economic growth.

Agriculturte

1. India’s Agroforestry Revolution

Context:

Every year, March 21 marks the International Day of Forests, celebrating the importance of forests in sustaining life. This year, India’s palm oil push emerges as a prime example of agroforestry in action, showcasing how economic growth and environmental balance can co-exist.

India’s Palm Oil Push: Economic and Strategic Benefits

• India aims to expand oil palm cultivation to 10 lakh hectares by 2025-26 under the National Mission on Edible Oils – Oil Palm (NMEO-OP).
• Key benefits:
  • Reducing dependence on edible oil imports.
  • Enhancing farm incomes, especially for small landholders.
  • Slashing the country’s import bill and boosting self-reliance.

Economic Potential of Oil Palm Cultivation

• Oil palm productivity: Up to 4 tonnes of oil per hectare, compared to 300-500 kg/hectare for other oil crops.
• Case study: Andhra Pradesh
  • Farmers have seen incomes triple after shifting to palm oil cultivation.

Agroforestry and Intercropping

Tackling the 4-year gestation period

• Agroforestry integrates trees and shrubs into farmland, allowing intercropping with crops like:
  • Cocoa
  • Red ginger
  • Bush pepper
  • Banana

Revenue diversification for farmers

• A 3-year study in Maharashtra’s South Konkan region (IJCMAS) revealed:
  • Banana intercropping: ₹55,833/ha
  • Pineapple: ₹27,500/ha
  • Elephant foot yam: ₹61,950/ha

Ecological and productivity benefits

• Intercropping:
  • Enhances soil health and fertility.
  • Reduces pest and disease pressure.
  • Stabilizes the ecological system.
• Yield improvement:
  • 10.53 tonnes/ha with intercropping vs. 7.64 tonnes/ha without.

A Key Enabler of Sustainable Agroforestry

• GPS-guided planting and harvesting equipment optimized for small, mixed-crop plots.
• Drone technology:
  • Manages pest outbreaks.
  • Monitors canopy cover for optimal light balance.
  • Enhances precision farming techniques.

A Model for Sustainable Development

• India’s agroforestry-driven palm oil strategy is a blend of:
  • Economic prosperity for farmers.
  • Environmental stewardship.
  • Technological innovation.
• This integrated approach positions forests and farms as allies, not adversaries.

A Global Lesson in Sustainable Agriculture

• On this International Day of Forests, India’s palm oil push highlights how agriculture and forestry can coexist sustainably.
• The initiative stands as a global model demonstrating that:
  • Prosperity for farmers
  • Edible oil security
  • Climate resilience
  • Ecological protection
    can all be achieved through agroforestry and innovation.

Facts To Remember

1. Ramnath Goenka Awards given to The Hindu journalists

Two journalists at The Hindu were felicitated by President Droupadi Murmu at the 19th Ramnath Goenka Excellence in Journalism Awards 2025. Maitri Porecha, senior assistant editor, won the award for Politics and Government in the print category, and Satyasundar Barik, The Hindu’s Odisha correspondent, won the award in the Uncovering Invisible India category.

2. Fitch Ratings retains India´s FY26 GDP forecast at 6.5%

 Fitch Ratings has kept India´s GDP growth forecast for financial year 202526 (FY26) unchanged at 6.5 per cent and revised upwards its FY27 growth projection by 10 basis points to 6.3 per cent in its March Global Economic Outlook report.

3. Philippines wants to add India to Squad

The Philippines and its allies are trying to expand the Squad grouping of nations to include India and South Korea to counter China in the Indo-Pacific region, the Philippines’ armed forces chief General Romeo S. Brawner said.

4. Reserve Bank of India appoints Indranil Bhattacharyya as Executive Director

The Reserve Bank of India (RBI) has appointed Indranil Bhattacharyya as Executive Director (ED), effective March 19, 2025, the banking regulator said in a statement. In his new role as ED, Bhattacharyya will look after the Department of Economic and Policy Research.

5. World Sparrow Day being observed to raise awareness on sparrow conservation

World Sparrow Day is being observed worldwide today, marking an annual effort to raise awareness about the rapid decline in sparrow populations. Celebrated every year on March 20, the day was first observed in 2010 across various parts of the world. 

6. MoSPI organises brainstorming session on Leveraging Non-Conventional Data for Official Statistics

The Ministry of Statistics and Programme Implementation (MoSPI) today organised a brainstorming session on Leveraging Non-Conventional Data Sources for Official Statistics in New Delhi. 

7. Corporate Affairs Ministry hosts 2nd open house for PM Internship Scheme

Ministry of Corporate Affairs hosted its second open house for the PM Internship Scheme to engage and support eligible candidates of the scheme.

8. Centre approves revised Rashtriya Gokul Mission to boost growth in livestock sector

The government has approved the revised Rashtriya Gokul Mission to boost growth in the livestock sector. The implementation of the revised mission is being carried out with an additional outlay of one thousand crore rupees. 

9. Indian economy continues to show resilience amid global challenges: RBI

The Reserve Bank’s monthly bulletin for March 2025 states that the Indian economy continues to demonstrate resilience despite global challenges. According to an article titled “State of the Economy” in the bulletin, the global economy is being tested by escalating trade tensions and a heightened wave of uncertainty around the scope, timing, and intensity of tariffs.