Daily Current Affairs (DCA) 26 April, 2025

Daily Current Affairs Quiz
26 April, 2025

International Affairs

1. U.S.–Iran Nuclear Talks

Context:

U.S. and Iran have held two recent rounds of nuclear talks in Muscat and Rome, mediated by Oman. A third technical round is confirmed, signaling cautious optimism for progress.

Background and Breakdown

• The 2015 Iran nuclear deal (JCPOA) had effectively limited Iran’s nuclear capabilities.
• In 2018, Donald Trump unilaterally exited the agreement, leading to its collapse.
• Since then, Iran has significantly increased uranium enrichment but has not weaponized its nuclear program.

Current Nuclear Threat Landscape

• Iran is estimated to be weeks away from being able to build a nuclear bomb if it chooses.
• Nuclear facilities are dispersed and deeply fortified, making military strikes extremely challenging.

Regional Shifts and Pressure

• Iran’s regional influence has weakened due to Israeli military actions and instability in Syria.
• Israel is advocating for an attack on Iran’s nuclear infrastructure, though Trump has vetoed immediate military options.

Trump Administration’s Strategy

• Combining diplomacy with military intimidation—offering talks while increasing regional military presence.
• Launched aerial strikes on Yemen’s Houthi rebels and moved B-2 bombers to the Indian Ocean.
• Messaging aims to pressure Iran into compliance without full-scale conflict.

Diplomatic Opportunity

• Iran has signaled readiness to scale back nuclear activity in exchange for relief from sanctions and threats.
• The 2015 agreement remains a viable framework for a new deal, if negotiations are constructive.

Strategic Recommendations

• The U.S. should act as a responsible global power, not a partisan ally of Israel.
• Military solutions are not viable—diplomacy remains the most effective path forward.
• A renewed deal would stabilize regional security and prevent nuclear escalation.

TH

National Affairs

1. T.N. Startup Summit

Context:

Instilling entrepreneurial education at the school level is key to shaping the future. Educational institutions have a pivotal role in providing early exposure to creative thinking among students, said experts in a session organised at The Hindu-Tamil Nadu Startup Summit 2025 held in Chennai.

Key Themes from the Panel

1. The Case for Inclusive Policy: More Than a Moral Imperative

“We must build ecosystems where no innovator is left behind — not by gender, not by ability.”
– Prateek Madhav, AssisTech Foundation

Tamil Nadu’s start-up landscape has seen exponential growth, but lacks a formal inclusion policy
Call to action: Embed inclusion and assistive tech into the state’s start-up policy framework

2. Assistive Technology: A Sector with Impact and Promise

India now boasts 500+ assistive technology start-ups, many from Tamil Nadu
These ventures are empowering people with disabilities, enhancing access and independence
Madhav noted that persons with disabilities contribute up to 7% of India’s GDP — an economic force not to be overlooked

What Tamil Nadu Needs Now

• Inclusive Policy Framework: Formal recognition and support for disability-tech, gender equity, and minority-led start-ups
• Academic-Industry Bridges: Funding and mentorship for student and faculty innovations
• Deep Tech Support: Infrastructure and investment for research-led start-ups, especially those in manufacturing and healthcare tech
• Gender Equity: Programs and networks that support women entrepreneurs in scaling innovative ventures

To lead the next wave of start-up innovation, Tamil Nadu must think beyond valuation and growth. It must invest in inclusive innovation, policy-backed ecosystems, and diverse leadership. The message from Chennai is clear: Inclusion is not a footnote; it is the future.

TH

2. India–France Rafale-M Deal

Context:

India and France to formally announce a ₹63,000-crore government-to-government deal for 26 Rafale-M fighter jets. The deal includes 22 single-seat, carrier-operable Rafale-M jets and 4 twin-seat trainer variants (non-carrier compatible). Official signing is being conducted remotely due to French Defence Minister Sebastien Lecornu deferring his visit for personal reasons.

Timeline and Delivery

• Jet deliveries to begin in 3.5 years post-contract signing.
• Entire delivery expected to be completed in 6.5 years.

Operational Context

• Indian Navy operates two aircraft carriers: INS Vikramaditya (Russian origin) and INS Vikrant (indigenously built).
• Rafale-M jets need minor modifications to fit carrier lifts designed for MiG-29Ks.

Previous Rafale Procurement

• Indian Air Force currently operates 36 Rafale jets from a ₹60,000-crore deal signed in 2016.

TH

3. India’s Poverty Reduction By World Bank

Context:

India has made significant progress in reducing poverty, with extreme poverty measured at $2.15 per day in purchasing power parity (PPP) terms falling from 16 per cent in 2011–12 to 2.3 per cent in 2022–23, according to the World Bank. The decline lifted 171 million people above the internationally comparable poverty line.

Key Findings from the World Bank (2022–23):

• Extreme Poverty (defined at $2.15/day PPP):
  • Fell from 16% in 2011–12 to 2.3% in 2022–23.
  • 171 million people moved above the international extreme poverty line.
• Lower-Middle-Income Country (LMIC) Poverty Line ($3.65/day):
  • Declined from 61.8% to 28.1%.
  • This shift lifted around 378 million people out of poverty.
• Multidimensional Poverty Index (MPI):
  • Dropped from 53.8% in 2005–06 to 15.5% in 2022–23.
  • This measure excludes health and nutrition but reflects improvements in education, living standards, and services access.

Urban vs Rural Poverty Trends

• Rural Extreme Poverty: Fell from 18.4% to 2.8%.
• Urban Extreme Poverty: Declined from 10.7% to 1.1%.
• Rural-Urban Poverty Gap: Narrowed from 7.7 percentage points to 1.7, indicating better rural inclusion.
• At the LMIC line:
  • Rural Poverty: Dropped from 69% to 32.5%.
  • Urban Poverty: Declined from 43.5% to 17.2%.
  • Rural-Urban Gap: Reduced from 25 to 15 percentage points, an annual decline of 7%.

Methodological Caveats:

• Estimates are based on the 2011–12 Consumption Expenditure Survey (CES) and the 2022–23 Household CES.
• The World Bank acknowledged changes in survey design (questionnaire, sampling, methodology) which may impact comparability over time.
• Concerns Raised:
  • N.C. Saxena, former Planning Commission Secretary, emphasized the need for cross-verification using independent sources like the Census and NFHS.
  • The new methodology might underestimate consumption inequality, which could affect real poverty estimates.

India’s rapid decline in both monetary and non-monetary poverty is noteworthy, especially at a time when global poverty reduction is slowing. However, experts stress the importance of robust data collection and transparency to ensure accurate policy direction.

BS

4. Biodiversity Beyond National Jurisdiction (BBNJ) Treaty

What It Is:

• The BBNJ Treaty is the third implementing agreement under UNCLOS (United Nations Convention on the Law of the Sea).
• It focuses on protecting marine biodiversity in areas beyond national jurisdiction.

Objectives:

• Conserve marine biodiversity in the high seas.
• Ensure equitable sharing of benefits from marine genetic resources (MGRs).
• Mandate Environmental Impact Assessments (EIAs) for activities in international waters.

Coverage:

• Applies to oceans beyond 200 nautical miles from national Exclusive Economic Zones (EEZs).
• Covers about 64% of the world’s oceans.

India’s Status

• India has signed the BBNJ Treaty but has not yet ratified it.

Why the BBNJ Treaty Is Urgently Needed

• Marine Protection Gap: Only 1.44% of the high seas are currently protected.
• Unregulated Activities: Deep-sea mining, overfishing, and marine pollution lack international regulation.
• Marine Genetic Resources: Growing biotechnological use of MGRs demands a governance framework.
• Equity: Seeks to balance ocean wealth sharing, preventing dominance by developed countries.

Challenges to BBNJ Treaty Implementation

• Low Ratification Rate: Only 21 countries have ratified out of the required 60.
• Geopolitical Tensions: Disputes in areas like the South China Sea delay consensus.
• Weak Enforcement: No strong compliance mechanisms; opt-out clauses risk weakening it.
• Overlap with Other Treaties: Potential conflict with the Convention on Biological Diversity (CBD).
• Financial Burden: Developing nations face challenges without assured funding support.
• Limited Scope: Excludes oil and gas exploration and pollution issues within EEZs.

Way Forward for Effective BBNJ Implementation

• Accelerate Ratification: Push for 60 ratifications before UNOC-3 in France.
• Inclusive Governance: Ensure regional and scientific diversity in decision-making.
• Dedicated Funding: Operationalize a special fund for capacity building and technology transfer.
• Integrated Ocean Management: Harmonize high seas and EEZ conservation efforts.
• Global Monitoring: Create transparent digital tools for tracking marine protection efforts.

The BBNJ Treaty represents a crucial opportunity to safeguard the high seas. However, without swift action, inclusive governance, and equitable funding, its promise will remain unfulfilled.
Protecting our oceans demands urgency, collaboration, and innovation—because marine ecosystems cannot wait.

5. DRDO Achieves Milestone in Hypersonic Weapon Development

Context:

The Defence Research and Development Laboratory (DRDL), a DRDO unit, conducted a long-duration ground test of an Active Cooled Scramjet Subscale Combustor at the newly established Scramjet Connect Test Facility in Hyderabad. The combustor sustained operation for over 1,000 seconds, marking a major achievement in India’s hypersonic propulsion programme.

Key Highlights

• Progress from Earlier Tests:
  • This follows a successful 120-second test held in January 2025, demonstrating significant scaling up in duration and system reliability.
• Importance of Scramjet Technology:
  • Scramjets, or Supersonic Combustion Ramjets, enable combustion at supersonic airflow speeds without moving parts, essential for powering hypersonic cruise missiles capable of traveling at over Mach 5 (6,100 km/h).
• Facility and Infrastructure:
  • The test was carried out at DRDO’s new, state-of-the-art Scramjet Connect Test Facility, purpose-built for high-speed, high-temperature testing of air-breathing propulsion systems.

Strategic and Technical Implications

• Validation and Readiness:
  • The successful long-duration test validates both the combustor’s design and the functionality of the new testing infrastructure, paving the way for full-scale flight-worthy combustor trials.
• Collaborative Achievement:
  • The accomplishment reflects integrated efforts across DRDO laboratories, Indian industries, and academic institutions, strengthening India’s indigenous hypersonic technology capabilities.
• Future Roadmap:
  • The next phase will focus on flight-testing complete hypersonic cruise missile prototypes, bringing India closer to joining an elite group of nations with operational hypersonic weapon systems.

Sonic, Supersonic and Hypersonic Missiles

The main difference between hypersonic, supersonic, and sonic missiles lies in their speed. Sonic missiles travel at the speed of sound (Mach 1), while supersonic missiles travel faster than the speed of sound (Mach 1 and above), and hypersonic missiles travel at speeds five times faster than the speed of sound (Mach 5 and above). 

Sonic Missiles

• Speed: Travel at the speed of sound, which is approximately 767 miles per hour (1,235 km/h) at sea level.
• Characteristics: Usually subsonic, meaning they travel slower than the speed of sound. 

Supersonic Missiles

• Speed: Travel faster than the speed of sound (Mach 1). 
• Characteristics: Most travel at speeds between Mach 2 and Mach 3, which is up to 2,300 mph. 
• Examples: The BrahMos missile is a well-known supersonic missile. 

Hypersonic Missiles

• Speed: Travel at speeds exceeding five times the speed of sound (Mach 5). 
• Characteristics: These missiles are capable of sustained flight at hypersonic speeds, often using air-breathing engines like scramjets. 
• Maneuverability: Hypersonic missiles are often designed to maneuver mid-flight, making them more difficult to intercept. 

This successful long-duration test is a foundational leap for India’s hypersonic cruise missile programme, showcasing readiness for full-scale systems development and reinforcing India’s strategic defence capabilities.

The Indian Express

6. Simla Agreement

Background
Following the Pahalgam terror attack, India has decided to hold the Indus Waters Treaty (IWT) and other bilateral agreements, including the Simla Agreement, “in abeyance.” Pakistan has reciprocated similarly.

Simla Agreement: Origins, Context, Provisions, and Significance

Origins and Context

• Post-1971 War Dynamics:
  • The Simla Agreement was born out of the aftermath of the 1971 Indo-Pakistani War, which led to the creation of Bangladesh. India’s decisive military role dramatically reshaped South Asia’s political landscape.
• Key Negotiators:
  • Indian Prime Minister Indira Gandhi and Pakistani President Zulfikar Ali Bhutto were the principal architects of the agreement, aiming to stabilise relations after hostilities.

Objectives of the Simla Agreement

• Bilateral Resolution of Kashmir:
  • India sought to ensure that the Kashmir dispute would be addressed bilaterally, preventing its internationalisation.
• Normalisation of Relations:
  • India aimed to establish a foundation for peaceful coexistence based on the new regional realities.
• Avoiding Pakistan’s Humiliation:
  • To maintain regional stability, India refrained from converting the ceasefire line into a permanent boundary, offering Pakistan space to recover diplomatically.

Key Provisions of the Simla Agreement

• Commitment to Bilateralism:
  • Both nations agreed that future disputes would be resolved bilaterally and peacefully without recourse to external intervention.
• Recognition of the Line of Control (LoC):
  • The LoC, reflecting the ceasefire positions post-1971 war, was to be respected by both sides without altering its status, pending a final settlement.
• Troop Withdrawals:
  • Forces were to return to their respective sides of the international boundary, aiming to de-escalate military tensions.
• Framework for Future Diplomacy:
  • Provisions were made for continued diplomatic engagement, including future meetings between leaders and negotiations on unresolved humanitarian issues, like repatriation of prisoners of war.

Significance of the Simla Agreement

• Geopolitical Relevance:
  • Even today, the Simla Agreement forms a reference point in South Asian diplomacy, especially concerning the Kashmir dispute.
• Legal and Diplomatic Framework:
  • It established a precedent for bilateralism in India-Pakistan relations, discouraging third-party interventions — a principle respected in global diplomatic circles.

Criticism and Limitations

• Unfulfilled Potential:
  • Despite noble intentions, deep-rooted mistrust and repeated ceasefire violations have hindered the achievement of lasting peace.
• Impact of Nuclearisation:
  • The nuclear tests conducted by both countries in 1998 shifted strategic priorities, with nuclear deterrence overshadowing the spirit of Simla.
• Long-Term Shortcomings:
  • The agreement failed to catalyse a durable peace process, as subsequent conflicts (such as Kargil in 1999) and continued hostilities illustrate.
• International Perspective:
  • While the global community endorses Simla’s principle of bilateralism, the persistent volatility in Indo-Pak relations highlights its limited success in practice.

Simla Agreement Status

• Indus Waters Treaty (IWT) Status:
  • India formally notified Pakistan of suspending the IWT, which governs the sharing of Indus River waters. Although IWT states it cannot be unilaterally altered (Article XII), India invoked the clause for modification citing “fundamental changes” like altered demographics, clean energy needs, and Pakistan’s bad faith actions.
• International Law Aspects:
  • The Vienna Convention on the Law of Treaties (VCLT) allows “termination” or “suspension” based on a “fundamental change of circumstances” (Article 62). However, past ICJ rulings (e.g., Nicaragua v USA, Gabcikovo-Nagymaros Project) set a high threshold for this, meaning India’s terrorism argument may be weaker under strict legal standards.
• Nature of Simla Agreement:
  • Signed post-1971 war, it outlined peaceful conduct of bilateral ties and recognized the LoC. It contained “best endeavour” obligations without legally binding enforcement mechanisms.
• Practical Reality:
  • Pakistan has long violated the Simla framework through ceasefire violations, Kargil incursions, and support for non-state actors. The suspension largely formalizes an existing breakdown in Simla obligations.
• Consequences of Suspension:
  • Pakistan’s move to hold the Simla Agreement in abeyance signals non-recognition of the LoC, potentially escalating future border tensions. However, since the agreement lacks dispute resolution provisions, legal recourse is limited.
• Immediate Impact:
  • India currently lacks infrastructure to significantly reduce Indus water flow immediately. Pakistan may invoke the IWT’s dispute resolution mechanism if it chooses. However, in international law, enforcement depends on nations’ consent.

Legal and Strategic Analysis

• India’s Legal Standing:
  • Experts argue India’s actions are lawful under international law principles emphasizing sovereign consent and bad faith withdrawal of treaty obligations.
• Diplomatic Fallout:
  • Suspension of treaties may lead to heightened diplomatic tensions but also signals India’s shift towards leveraging legal frameworks to counter terrorism-backed provocations.

The suspension of IWT and Simla Agreement reflects growing hostility in India-Pakistan ties post-Pahalgam attack. While immediate impacts on water sharing and LoC management may be limited, it marks a significant recalibration of India’s strategic and legal approach toward Pakistan.

The Indian Express

Science & Tech

1. Adobe Launches Free Content Authenticity App

Context:

Adobe has introduced a free “Content Authenticity” app aimed at helping digital creators protect their work.

• Key Features:
  • Creators can embed verified information (like names and social media accounts) directly into digital content.
  • Enables a verifiable digital signature that travels with the content online.
• Purpose: The app ensures secure attribution, reduces misuse of digital works, and fosters greater transparency in online publishing.

Motorola Unveils Razr 60 Series:

• New Launch: Motorola announced the Razr 60 Ultra and Razr 60, expanding its flip-style foldable smartphone portfolio.
• Specifications:
  • Razr 60 Ultra: Powered by the Qualcomm Snapdragon 8 Elite chipset, offering flagship-level performance.
  • Razr 60: Equipped with the MediaTek Dimensity 7400X SoC, providing a more affordable premium option.
• Moto AI Introduction:
  • Along with the Razr 60 series, Motorola introduced new AI-powered features under the Moto AI platform, enhancing user experience through smart interactions and personalization.

BS

Banking/Finance

1. EPFO Introduces Revamped Form 13 to Simplify PF Transfer Process

Context:

The Employees’ Provident Fund Organisation (EPFO) has introduced a revamped version of Form 13 to streamline PF account transfers for members changing jobs. 

Key Changes in the New System

• Elimination of Destination Office Approval: EPFO has removed the requirement for approval from the destination office when transferring Provident Fund (PF) accumulations after job changes. Previously, both the source office (where the PF account is held) and the destination office (where the new employer is located) were involved in the transfer process.
• Streamlined Transfer Process: With the new system, once the transfer claim is approved at the source office, the transfer to the destination account is automatic and instantaneous, significantly reducing the time taken for transfers to complete.

Benefits for EPF Subscribers

• Faster Transfers: This change is expected to speed up the transfer process, with members’ PF balances being transferred more efficiently without delays from multiple offices.
• Wider Reach: More than 1.25 crore subscribers will directly benefit from the new system, improving the overall experience for employees switching jobs.
• Financial Impact: The new process will help in the swift transfer of around ₹90,000 crore annually, which is currently held in the accounts of members moving across employers.

New Functionalities in the System

• Tax Component Breakdown: The revamped system now bifurcates taxable and non-taxable components of PF accumulations. This feature helps in accurate calculation of the Tax Deducted at Source (TDS) on taxable PF interest, ensuring that subscribers are not overtaxed on their savings.
• Bulk UAN Generation: In another significant improvement, EPFO has introduced the facility to bulk-generate Universal Account Numbers (UANs) using Member IDs and other available details, particularly for members who might not have had a UAN in the past. This will speed up the process of crediting funds to members’ accounts, ensuring quick updates and accurate account management.

Relaxed Aadhaar Requirement

• No Longer Mandatory for UAN Generation: The requirement for Aadhaar linkage to generate a Universal Account Number (UAN) or credit previous PF accumulations has been relaxed. This is especially beneficial for those who face difficulties in linking their Aadhaar with EPF accounts, ensuring inclusivity and accessibility.

Impact on the EPF Ecosystem

• Reduced Administrative Burden: The simplification of the transfer process reduces the administrative workload for both EPFO offices and employers, speeding up the entire job-switching procedure for members.
• Improved User Experience: By eliminating multiple steps and approvals, the new system offers a more user-friendly interface for members, enhancing the overall efficiency and transparency of the EPFO’s services.

Expected Long-Term Benefits

• Enhanced Efficiency: The faster transfer of funds will boost the overall efficiency of the EPF system, leading to better management of retirement savings for a significant portion of India’s workforce.
• Greater Financial Inclusion: By easing the complexities involved in the PF transfer process, more workers, especially those in informal sectors or with multiple job changes, will be able to easily manage their retirement funds.

The new system aligns with EPFO’s ongoing efforts to digitize and modernize its operations, simplifying processes and providing better services to subscribers. This reform will create a more efficient, transparent, and seamless system for those saving under the Employees’ Provident Fund scheme.

TH

2. Indian Bank Announces Reduced Interest Rates on Home and Vehicle Loans

Key Changes:

• Home Loan Rates: Reduced from 8.15% per annum to 7.90%.
• Vehicle Loan Rates: Reduced from 8.50% to 8.25%.

Benefits for Borrowers:

• Lower EMIs: The rate reductions are aimed at easing the financial burden on borrowers by lowering their monthly EMIs.
• Affordable Credit: The reduction supports Indian Bank’s goal to make credit more accessible and affordable for a larger pool of customers.

Additional Offers:

• Discounted Processing Fees: Indian Bank is offering a reduction in processing fees, making the loan application process more cost-effective.
• Zero Documentation Charges: There will be no documentation charges, further reducing the overall cost of borrowing.

Impact on Borrowers:

• The reduction in loan interest rates is likely to provide significant relief to both home and vehicle loan borrowers, especially in the current economic climate where affordability remains a key concern.

TH

3. Direct Tax Collection in FY25

Context:

The provisional net direct tax collection for the financial year 2024-25 marginally fell short of the revised target, growing 13.57 per cent to ₹22.26 trillion, data released by the finance ministry showed. The net direct tax collection in FY24 was ₹19.60 trillion.

Key Highlights:

• Provisional Net Direct Tax Collection for FY25 reached ₹22.26 trillion, registering a 13.57% year-on-year growth.
• This figure is slightly short of the revised target of ₹22.37 trillion set in February 2025.
• FY24 Net Direct Tax Collection stood at ₹19.60 trillion.

Breakdown of Collections:

• Corporation Tax:
  • Grew 8.31% to ₹9.87 trillion (from ₹9.11 trillion in FY24).
• Non-Corporation Tax(includes individuals, HUFs, firms, associations, local authorities, and artificial juridical persons):
  • Increased 17.01% to ₹11.83 trillion.
• Securities Transaction Tax (STT):
  • Surged 55.87% to ₹53,296 crore.
• Other Taxes:
  • Declined 15.89% to ₹3,341 crore.

Additional Insights:

• Tax Buoyancy (ratio of direct tax growth to GDP growth) improved to 1.57 in FY25 from 1.54 in FY24.
• The government emphasized that final figures may increase further as reconciliations and adjustments for FY25 continue.

Despite missing the revised target marginally, India’s direct tax collections for FY25 indicate strong underlying economic momentum. Robust growth in non-corporate taxes and a sharp rise in STT reflect a broadening taxpayer base and heightened market activity. Record-high refunds suggest better tax administration and faster processing.

BS

4. GST Appellate Tribunal (GSTAT) Procedure Rules, 2025 Notified

Context:

In a major step towards making the Goods and Services Tax Appellate Tribunal (GSTAT) functional, the Ministry of Finance notified the GST Appellate Tribunal (Procedure) Rules, 2025. These were made effective from April 24.

Major Development:

• The Ministry of Finance has officially notified the GST Appellate Tribunal (Procedure) Rules, 2025, effective from April 24, 2025.
• This notification is a crucial step towards making the GSTAT operational, streamlining dispute resolution under the GST framework.

Key Features of the Rules

• Online Filing of Appeals:
  • Appeals must be filed exclusively through the GSTAT portal.
  • A certified copy of the original order must accompany each appeal.
• Affidavits and Evidence Submission:
  • Specific procedures have been outlined for submitting affidavits, summoning documents, examining witnesses, and presenting additional evidence with prior tribunal permission.
• Public and Hybrid Hearings:
  • Hearings will be open to the public by default.
  • Proceedings can be attended physically or virtually (hybrid mode).
• Ex Parte Hearings:
  • If a party fails to appear, the tribunal has the authority to proceed ex parte (deciding the case without the absent party).
• Representation and Dress Code:
  • Authorised representatives (lawyers, tax practitioners) must submit a Power of Attorney before representing clients.
  • A formal dress code has been prescribed, with seasonal relaxations allowed.
• Digital Orders:
  • All final orders will be digitally signed and uploaded to the GSTAT portal for transparency and accessibility.

Scope and Structure:

• The Rules are framed under Section 111 of the Central GST Act.
• They contain 124 provisions across 15 chapters, covering:
  • Filing of appeals
  • Presentation of evidence
  • Conduct of hearings
  • Issuance of final orders

The introduction of the GSTAT Procedure Rules, 2025 is expected to create a transparent, efficient, and accessible appellate system for GST-related disputes, significantly improving the ease of doing business in India.

BS

5. RBI Imposes Penalties on Indian Bank and Mahindra Finance for Regulatory Violations

Penalty on Indian Bank – ₹1.61 Crore:

• The Reserve Bank of India (RBI) fined Indian Bank ₹1.61 crore for:
  • Failing to benchmark interest rates correctly on certain floating rate retail and MSME loans.
  • Taking collateral on small-value Kisan Credit Card (KCC) loans, which violates RBI norms.

Penalty on Mahindra & Mahindra Finance – ₹71.3 Lakh:

• The RBI imposed a ₹71.3 lakh penalty on Mahindra & Mahindra Financial Services for:
  • Non-disclosure of processing fees and charges to some loan customers.
  • Auctioning vehicles without giving some borrowers a prior opportunity to repay, breaching fair lending practices.

RBI’s Objective

• These actions highlight the RBI’s commitment to ensuring:
  • Transparent loan pricing
  • Fair treatment of borrowers
  • Strict adherence to regulatory frameworks in both banking and NBFC sectors

TET

6. Benchmark 10-Year Government Bond to Be Introduced Next Week

New 10-Year Bond Launch:

• The government is expected to introduce a new 10-year benchmark government bond on May 2, 2025, according to bond dealers.
• This move comes as the existing benchmark bond, 6.79% GS 2034, now has a residual maturity of only 9.5 years, making a new issuance necessary.

Market Dynamics and Borrowing Costs:

• The Pahalgam terror attack and subsequent India-Pakistan tensions may push government borrowing costs up by around 5 basis points.
• On Friday, the 10-year benchmark yield rose to 6.36%, from a recent low of 6.32%, according to Clearing Corporation of India (CCIL) data.

Auction and Issuance Plans

• The Reserve Bank of India (RBI) will announce the securities for auction on Monday.
• Of the Rs 8 lakh crore borrowing plan until September 2025, the government targets Rs 2.1 lakh crore through seven auctions of 10-year bonds.

Corporate Bond Market Impact:

• Corporate bonds are priced at a spread over the 10-year benchmark yield, making the 10-year bond crucial for market participants.
• Corporates often prefer bond market fundraising, especially during a dovish monetary policy environment, due to faster transmission compared to bank loans.

Historical Context:

• The previous 10-year benchmark bond, 7.10% GS 2034, issued in April 2024, had an outstanding stock of Rs 1.80 lakh crore.
• The current benchmark, issued in October 2024, has now reached Rs 1.84 lakh crore outstanding, prompting the need for a fresh issuance.

Market Evolution:

• Earlier, the premium between new and old 10-year bonds was as high as 15 basis points pre-Covid.
• Now, the premium has narrowed to just 1-2 basis points, reflecting a more mature and deeper bond market.

TET

8. Edelweiss Mutual Fund Launches India’s First Internet Economy Index Fund

Context:

Edelweiss Mutual Fund has launched the Edelweiss BSE Internet Economy Index Fund, India’s first index fund offering exposure to the BSE Internet Economy Total Return Index.

Key Highlights:

• New Fund Offer (NFO):
  • Edelweiss Mutual Fund has launched the Edelweiss BSE India Internet Economy Fund, the country’s first index fund focused on the internet economy.
• Objective of the Fund:
  • The fund aims to track and replicate the performance of companies driving India’s fast-growing internet and digital economy. It provides investors an opportunity to tap into sectors like e-commerce, digital payments, online services, and technology platforms.
• Benchmark Index:
  • The fund will mirror the BSE India Internet Index, which is specifically designed to capture the performance of listed internet-driven businesses.
• Investment Focus:
  • It will primarily invest in:
    • E-commerce platforms
    • Online travel companies
    • Digital payment firms
    • Technology and internet-focused businesses
• NFO Details:
  • Opening Date: Likely opened around late April 2025 (exact date pending confirmation)
  • Closing Date: Generally, NFOs remain open for 10–15 days.
• Target Investors:
  • Millennials and Gen Z investors seeking exposure to India’s booming digital economy.
  • Long-term investors willing to participate in India’s structural digital growth story.
• Strategic Context:
  • The fund comes at a time when India’s internet economy is projected to reach $1 trillion by 2030, driven by rapid smartphone penetration, UPI adoption, and rising online consumption.

Why It Matters:

• The launch aligns with the trend of creating thematic funds focused on specific sectors like technology, healthcare, and now the digital economy.
• It offers diversification across multiple internet-driven companies rather than relying on a single stock or sector pick.

Agriculture

1. Sugar-Based Ethanol’s Shrinking Role in India’s Biofuel Strategy

Background:

• Sugar-based ethanol was pivotal during the launch of India’s Ethanol Blended Petrol (EBP) programme in 2003.
• Over time, raw material constraints, competing sugar demands, and strategic policy shifts have limited its growth.
• India’s 20% blending target (achieved in 2024-25) now relies on a 70% grain-based and 30% sugar-based ethanol mix.

Current Limitations:

• Water-intensive nature: Producing 1 litre of ethanol from sugarcane requires 2,860 litres of water.
• Capacity constraints: Only 875 crore litres of India’s 1,380 crore litre ethanol capacity (late 2023) came from sugarcane.
• Sugar prioritisation: Last year’s monsoon failures caused sugar shortages, pushing ethanol production down the priority list.
• Stagnant prices: No increase in procurement prices for sugar-based ethanol (from cane juice or B-heavy molasses) capped production incentives.

Impact on Sugar Millers:

• Heavy investments were made in ethanol distilleries anticipating rising demand.
• Underutilised capacity and financial strain now affect many sugar mills.
• Grain-based ethanol expansion and lack of price stability disrupted initial economic projections for sugar-based ethanol.

Grain-Based and Beyond:

• Government now favours grain-based ethanol, using surplus maize and FCI rice.
• Grain-based capacity already at 505 crore litres and growing.
• Future ethanol demand for diesel blending and industrial use highlights the unsustainability of sugar-based reliance.
• Second-generation (2G) biofuels from crop residues are emerging as the next solution, although technology is still maturing.

Multi-Feedstock Production:

• Strategic recommendation: Sugar mills should shift to multi-feedstock ethanol production (grains + residues + sugarcane).
• Government has launched an interest subvention scheme for cooperative mills; extension to private mills (60% of sector) is critical.
• Retrofitting support and assured pricing for multi-feedstock ethanol are vital to maximise national capacity.

Future Outlook for Sugar-Based Ethanol:

• Likely to stabilise at 30–40% share of the EBP blend, dependent on stable sugarcane production.
• Influencing factors:
  • Government sugar security policies
  • Competing ethanol demands
  • Environmental sustainability concerns
  • Millers’ financial viability without guaranteed price hikes

BL

Facts To Remember

1. Iran’s FM Araghchi arrives in Oman ahead of nuclear talks with the U.S.

Iran’s top diplomat Abbas Araghchi arrived in Oman for fresh nuclear talks with the U.S., following progress in earlier rounds.

2. Former ISRO Chairman Kasturirangan dies at 84

Former ISRO Chairman Dr. K. Kasturirangan passed away in Bengaluru on Friday. He was 84. The ISRO, in a statement, said he died at 10.43 a.m. at his residence. His body will be kept at the Raman Research Institute from 10 a.m.

3. Shriram Fin Q4 net up 6%; board approves foray into payments biz

Shriram Finance, one of the largest nonbanking financial companies in India, on Friday reporteda 6 per cent increase in its consolidated net profit to ₹ 2,143.77 crore in the fourth quarter of the financial year 202425 (FY25), compared to ₹ 2,021.28 crore in the yearago period.

4. RBL Bank´s Q4 profit slips 81%

Private lender RBL Bank´s net profit declined by 81 per cent on yearonyear ( YoY) basis to ₹ 69 crore for the fourth quarter ended March 202425 (Q4FY25) on reduction in net interest margin (NII) and rise in the bad loan provisions.

5. BoM net rises 23% to ₹ 1,493 cr

Stateowned Bank of Maharashtra (BoM) on Friday posteda 23 per cent rise in the net profit to ₹ 1,493 crore for the fourth quarter ended March 202425 (Q4FY25) due to rise in core income.