Daily Current Affairs (DCA) 4 March, 2025

Daily Current Affairs Quiz
4 March, 2025

International Affairs

1. India-Australia Economic Cooperation

Context:

Australia expressed continuing faith in the economic ascent of India, backing its aim to become the third largest global economy by 2030, and supporting India’s permanent membership in the United Nations Security Council. Recently, Prime Minister Anthony Albanese of Australia announced the New Roadmap for Australia Economic Engagement with India to expand cooperation in various sectors ranging from trade to investment to geostrategic partnership.

Trade Surge between India and Australia

• The export markets of India grew by 35% over the last five years, while exports to Australia surged by 66%, the latter nearly double the speed showing complementary economic strengths.
• The trade between the two nations has experienced a fillip largely due to the Economic Cooperation and Trade Agreement (ECTA).

Focus Areas under the Roadmap

The roadmap identified four “Superhighways of Growth”:

• Clean Energy
  • Australia stands at the forefront as a producer of lithium, nickel, and cobalt and thus will be the fountain of India’s green transition and EV manufacturing goals.
• Education & Skills
  • Australian universities are exporting to India (GIFT City, Noida) to skill 20 million Indians every year.
• Agribusiness
  • Food security and trade enhancement through sustainable agriculture solutions.
• Tourism
  • Enhance cultural ties and promote travel between two nation states.

The other visible path of prosperity will come alive through the seven ‘Major Economic Roads’ including investments, technology, sports, arts & culture, resources, defence, space, and health.

Harnessing the Indian Diaspora

People to people ties are at an all time high with the 1 million strong Indian diaspora, the fastest growing population group in Australia.
Australia is investing ₹132 crore in the Centre for Australia India Relations and ₹22 crore in the Maitri grants program to further strengthen this ‘human bridge’ between the two nations.

Going Forward: CECA

• As enterprises seek new opportunities for investment and trade, progress on the CECA will therefore be critical to expanding market access and deepening economic collaboration.

Implications

The New Roadmap indicates Australia’s long term commitment to enhancing India’s economic strength, putting forth a clear, structured approach to an intensified partnership.

2. The White House Clash

Context:

A day after the heated exchange at the Oval Office between President Donald Trump, Vice President J.D. Vance, and Ukrainian President Volodymyr Zelenskyy, protests for Ukraine erupted across numerous cities in the U.S. Meanwhile, a survey by the PEW Research Center highlights an increasing partisan divide regarding U.S. aid to Ukraine and NATO issues.

Moulding Attitudes on U.S. Support for Ukraine

• Now, more Americans think the U.S. is giving too much aid (30%, up from 27% immediately prior to the November elections).
• 22% feel the U.S. is not providing enough, a 4% increase since the elections.
• While 23% believed the U.S. was providing the right amount of aid, acceptability of this view is waning across all political affiliations.

Party Split (Chart 1 and 2)

• 50% of Republicans are in the opinion that the U.S. is giving too much support to Ukraine, whereas fewer than 15% of Democrats concur.
• The share of Democrats who perceive aid to Ukraine as “just right” has dropped dramatically (by 12 points), whereas Republicans only saw a minor 3 point drop.

Concerns Based on National Security

• 39% of Americans maintain that aiding Ukraine benefits U.S. national security; 27% contend it has no impact at all.
• Partisan Split (Chart 3):
• Democrats are universally in favor of considering Ukraine aid beneficial to U.S. security, particularly those 65 and older.
• Republicans, especially young Republicans, are relatively more inclined to say that it harms national security.

NATO Membership of the U.S.: Eroding Faith

• 63% of Americans think NATO helps the U.S., down from 66% in 2024 (Chart 4).
• Partisan Split
  • 82% of Democrats support NATO membership, whereas only 47% of Republicans agree.
  • The majority of Republicans now think that the U.S. doesn’t benefit much from NATO, if at all.

Decreasing Support for Additional European Defense Spending

• A smaller share of Americans (39%) now believes that European allies ought to increase their defense spending, down from 47% in 2024 (Chart 5).

A deepening partisan divide over aid to Ukraine, NATO and national security means that greater challenges could loom for U.S. foreign policy in the future. With the Trump administration signaling a shift in priorities, the role of the U.S. in general security alliances continues to remain controversial.

Source: TH

3. India-Belgium Defence Ties

Context:

India and Belgium deliberated upon defence engagements in Indo Pacific with a view to the maritime domain and, by extension, industrial cooperation. Defence Minister Rajnath Singh met Belgian Defence Minister Theo Francken and Princess Astrid in New Delhi to discuss boosting Belgium’s defence investments in India.
An “institutionalised defence cooperation mechanism” is likely in further discussions between the two sides.

India-EU Defence Collaboration

• India and the EU committed to deepening security ties and consider a Security of Information Agreement (SoIA).
• India has expressed interest in becoming part of the European Union’s Permanent Structured Cooperation (Pesco) framework for joint defence projects.
• European defence companies are making overtures to Indian firms in order to bump up production and take India somewhere in the global supply chain.

Strategic Importance

• With Russia Ukraine war and changing global security dynamics pushing Europe to enhance its defence capabilities.
• India’s below par defence manufacturing base makes it an important player as part of EU defence supply chains.
• Boosted maritime cooperation in the Indo Pacific is in alignment with the cherished Act East Policy for India and EU Indo Pacific strategy.

This promising India Belgium and India EU partnership will open a new chapter in global defence cooperation for security in the Indo Pacific but beyond.

Source: TH

National Affairs

1. The Sacred Orans

Context:

In pursuance of the judgment of the Supreme Court of India, all sacred forests in Rajasthan known as orans were, from December 2024, protected under a High Court order recognising the socio-ecological and cultural significance of orans in T. N. Godavarman Thirumulpad v. Union of India. The ruling brought orans under the purview of the biodiversity-related laws, but the issue remains whether formalisation undermines community governance.

The meaning of Orans

• These are sacred groves maintained by local communities from time immemorial, each dedicated to some deity and with a complete ban against cutting trees.
• The ecological and economic functions they serve, among others, include:
  • Support biodiversity
  • Enhance sources of water by trapping runoff and raising underground water levels
  • Community efforts at watershed management

Yet, despite the concern for mere empowerment of communities that the Court expressed, the whole idea of formalisation, as presented, makes one apprehensive:

Declare Orans as Forests under the Forest (Conservation) Act, 1980

• There is protection, but there are exceptions within the Forest Conservation Amendment Act, 2023 even for diversion of forest land for zoos, safaris and ecotourism-related activities.
• This may interfere with the age old practices of the communities, resulting in the limited access of local communities.

Declare Orans as Community Reserves under the Wildlife (Protection) Act, 1972.

• With regard to this Act, the governance committees would have a very limited capacity to make effective decisions with the control virtually being that of the State.
• This would risk undermining informal community institutions that are currently managing the orans.

Orans may become ‘Common Forest Land’ under the Forest Rights Act, 2006.

• Only eligible communities/individuals can claim rights, in all likelihood excluding informal governance structures preserving orans at present.
• There is a risk that bureaucratic obstacles may delay recognition of traditional rights.

Strengthening Community Led Governance

• It will not annul community institutions, but replace them with its own.
• There should be identifying functioning informal governance models for replication in similar contexts.
• Collaboration should be ensured between local communities, civil society, and the government.
• The State would be a backstop support while communities are fully entrusted with decision making authority.

While the Supreme Court’s ruling acknowledged the cultural and ecological significance of orans, the formalization could disturb traditional governance systems.

2. Cities Coalition for Circularity (C-3)

Context:

India launched the Cities Coalition for Circularity C-3, a multi national platform for city to city collaboration, knowledge sharing, and partnership with the private sector in support of sustainable urban development.

Key Objectives of C-3

• To encourage circular economy principles of reduce, reuse, and recycle (3R).
• Enable and encourage collaboration among policymakers, industry leaders, and researchers.
• Develop sustainable waste management and resource efficiency across Asia Pacific.

Prime Minister’s Vision

• In a special written message, PM highlighted:
  • India’s leadership in advocating a Pro, Planet and People (P3) approach.
  • Importance of 3R and circular economy principles to sustainable urban growth.
  • Indication of India to share expertise and experience in circular economy initiatives.

To further strengthen the coalition, he proposed the formation of a working group to develop the structure and operational framework for the coalition.

Key Signing of the CITIIS 2.0 Agreement

A key Memorandum of Understanding (MoU) for CITIIS 2.0 was signed at the time of the launch in the city of Jaipur.

• ₹1,800 crore in agreements were announced under the initiative.
• The funds will reach 18 cities across 14 states.
• The selected projects would serve as lighthouse models for other urban areas.

C-3 will play a very crucial role in making Indian cities sustainable and resource efficient, said Manohar Lal, Union Minister of Housing and Urban Affairs.

3R and Circular Economy Forum

Previous Development

• The Regional 3R and Circular Economy Forum in Asia and the Pacific was inaugurated in 2009 with the objective of promoting:
  • Sustainable waste management
  • Resource efficiency
  • Circular economy policies

A Milestone: The Hanoi 3R Declaration (2013-2023)

• Outlined 33 voluntary goals to transition towards a resource efficient and circular economy.
• Addressed challenges such as rapid economic growth, resource depletion, and rising waste generation.

The launch of C 3 marks a significant step in India’s commitment to sustainability. Through this initiative, India aims to lead global efforts in circular economy practices, ensuring a greener, more resilient urban future.

Source: TH

3. Gangetic Dolphins First Survey

Context:

A very large survey has brought out the figure of 6,327 Gangetic dolphins inhabiting the waters of the Ganga and its tributaries, it is the very first standardized assessment of their population. At present, because of varied previous counting methodologies, this number cannot yet indicate trends in population over time.

Distribution of Dolphin Population

• Main stem Ganga: 3,275 dolphins
• Tributaries of Ganga: 2,414 dolphins
• Main stem Brahmaputra: 584 dolphins
• Tributaries of Brahmaputra: 412 dolphins
• Beas River: 101 dolphins
• Indus River Dolphins: 3 Individuals

This survey is the first step undertaken in scientific conservation efforts, covering a huge expanse of river stretches that totals 8,507 km.

Difficulties in Counting the Dolphins

• For dolphins found in the rivers, the population statistics were difficult to include:
  • Submerged in water for an inordinate time, only coming up occasionally for a breath.
  • Without any most distinctive feature to indicate individuals, like stripes in tigers.

New Survey Methodology

• Acoustic Hydrophones (Underwater microphones), which capture dolphin echolocation clicks from underwater, will be used to create sounds that can be together used by the observers to triangulate dolphins locations, thus preventing duplicate counting.

Threats of Gangetic Dolphins

• For entangling fishnets is one of the leading causes of death.
• Further studies are being conducted to detect how pollution and environmental degradation would affect dolphin survival.

Roadmap for Conservation in the Future

• For four years next survey with the very same improved devices methods will be used.
• Prime Minister had stressed local community participation in conservation while releasing the report in the National Board for Wildlife meeting in Gujarat.
• Compulsory educational outreach programs with students attached to raise awareness concerning dolphin habitats.

State Wise Dolphin Population

• Uttar Pradesh (UP) is the state, which, taken as a whole, boasts the highest number of Gangetic dolphins.
• Next comes Bihar, West Bengal, and Assam.

With standardized survey methods, simple and focused conservation strategies, India is gearing up for a major leap in the direction of ensuring a favorable future for the Gangetic dolphin, one of the most relevant indicators of river ecosystem health.

Source: TH

4. Aditya-L1 Mission Update

Context:

The Indian Space and Research Association has announced the second set of scientific data released by ISRO‘s solar observation mission Aditya L1, providing crucial information regarding the Sun’s photosphere, chromosphere, and corona, as well as in situ particle and magnetic field measurements at the first Earth Sun Lagrange Point (L1).

The Scientific Journey of Aditya L1

• Launch Date: September 2, 2023 using PSLV C 57.
• Insertion in Halo Orbit: January 6, 2024, in Lagrange Point (L1), at 1.5 million km from the Earth toward the Sun.
• Current Status: It has been in its third revolution around L1, continuously observing the Sun.

The mission serves as a treasure trove of data for solar parameter studies and helps augment the understanding of solar activity, space weather, and their effect on Earth.

5. Bose Metal

What Is Superconductivity?

• Metals are materials that provide resistance to the flow of current.
• Superconductors would conduct current without any resistance (e.g., zinc at 272.3ºC) due to the fact that they host Cooper pairs, which are two electrons bound together at low energy states.
• So the older theory has it that, at 0K, the metals can either be very good insulators (zero conductivity) or good superconductors (infinite conductivity).

What Are the Bose Metals?

• A peculiar metallic state in which
  • Cooper pairs form (like in superconductors).
  • But superconductivity doesn’t set in the material conducts better yet never attains zero resistance.
  • It stands against all existing theories of superconductivity and quantum behavior.

Niobium Diselenide (NbSe₂) A Bose Metal?

The Experiment

• Material: Ultra thin Niobium Diselenide (NbSe₂).
• Situation: Applied under particular magnetic fields.
• Results:
  • Cooper pairs formed.
  • Hall resistance was zero (which proved that Cooper pairs were indeed charge carriers).
  • No superconducting state occurred.

Significance

• Strong evidence for the existence of the Bose metal.
• Proves to challenge theories on superconductivity, yet it can forge new avenues in physics modeling.

Applications

• No direct applications to date, but:
  • Enhances the understanding of quantum materials.
  • May impact the future generation of superconductors and electronics.
  • Pours knowledge into disordered metals and quantum phase transitions.

There may be some forsaken few who saw the glimmer of a new state of matter meeting neither the perceived classical nor the microscopic rules and potentially on a path to a new physics in condensed matter.

Source: TH

6. Obesity Crisis in India

Context:

As per National Family Health Survey, there is such a five fold increase in overweight and obesity cases in India as revealed by a new study published in The Lancet over the past three decades. The number of overweight or obese individuals increased from 53 million in 1990 to 236 million in 2021, projected to surpass 521 million by 2050 in urgent action failure, Making India the second most affected country in the world after China.

This includes the key findings of the study

• 1990: 53 million overweight or obese Indians.
• 2021: 236 million.
• 2050 (Projected): Over 521 million (second highest in the world).
• Slide: Comparison Between Nations:
• China: Had 464 million overweight/obese individuals in 2021 and projected to increase to 696 million by 2050.

What is Obesity?

Obesity is a chronic disease that occurs when there is too much body fat. It can lead to many health problems, including heart disease, type 2 diabetes, and some cancers. 

Definitions of BMI

Body mass index (BMI) is a calculation that estimates body fat and compares weight to height. It’s a quick and inexpensive way to screen for weight categories like underweight, overweight, and obesity. 

• Overweight: BMI between 25-30 kg/m².
• Obese: BMI of 30 kg/m² or higher.
• Younger Generations Affected More:
  • People are gaining weight faster than the earlier generation.
  • Earlier onset of obesity is more likely to have higher boluses of Type 2 diabetes, increased high blood pressure, cardiovascular illnesses, and cancers.

Need for Urgent Action: 5 Year Plan (2025-30)

The study’s authors call for global and national policy interventions in order to curb the obesity crisis.

• Balancing Overnutrition & Undernutrition
  • India is paradoxical: 180 million Indians suffer from obesity while 35% of under five children are malnourished (NHFS 5, 2019 21).
• Key Policy Recommendations
  • Regulating ultra processed foods.
  • Improving maternal and child health by nutritional diets & breastfeeding supports.
  • Encouraging physical activity & healthier living environments.
  • Cut back on cooking oil consumption (as per PM Narendra Modi).

According to Dr. Jessica Kerr, co lead author of the study, preventing obesity should come at top priority among low and middle income countries. The absence of an action plan could transform into a dramatic rise in an obesity related health care in the next decades. That holistic policy must advocate healthier diets and physical exercise, and improved urban planning to reverse the current trend.

Source: TH

Banking/Finance

1. Virtual Digital Assets (VDAs)

With the evolution of blockchain technology and expansion of digital economies, countries all over the world have begun amending their regulations in view of ensuring that Virtual Digital Assets (VDAs) are properly governed. India’s Income Tax Bill, 2025, sets forth a clear legal structure for VDAs under Section 2(111), and the country’s tax policies thus have corresponded to global standards.

What are Virtual Digital Assets (VDAs)?

• According to the Income tax act, ‘virtual digital asset’ refers to any information, code, number, or token (not being Indian currency or foreign currency) generated through cryptographic means or otherwise and can be called by whatever name.
• It can be transferred, stored, or traded electronically. The definition of VDA also specifically includes a non-fungible token, i.e., NFT, or any other token of similar nature, by whatever name is called.

VDAs as Property and Capital Assets

• Legal Classification & Taxation
  • For the first time, the VDAs have been explicitly classified in India as:
  • Property (Section 92(5)(f))
  • Capital Assets (Section 76(1))

This means that any gains resulting from the transactions involving the VDAs will be taxed in a manner analogous to property deals or transactions involving stocks and bonds.

Tax Features

• Fixed 30% tax on income arising from the transfer of VDAs (no deductions allowed, except for the cost of acquisition).
• No deductions will be allowed for mining, transaction fees, or platform commissions.
• Tax Deducted at Source (TDS) at the rate of 1% will be applicable to all transactions involving VDAs, including peer to peer (P2P) transactions.
• The exemption limit is ₹50,000 for small traders and ₹10,000 for others.

Global Comparison

Country	Legal Status of VDAs	Tax Treatment
U.K.	Property	Subject to Capital Gains Tax (CGT)
U.S.	Securities	Regulated under SEC financial market laws
New Zealand	Property	Subject to income tax on trades
UAE	Regulated by VARA	0% personal income tax on certain gains

Compliance and Reporting Requirements

Heightened Regulation over Crypto Transactions

• Failure to report VDA holdings will lead to an assumption of classified as undisclosed income (Section 301).
• The tax authorities are permitted to confiscate the VDAs under investigation (Section 524(1)), along with any cash, gold, or real estate.
• VDA dealers (such as exchanges, wallet providers, and traders) must report transactions in a prescribed format (Section 509).
• To enable better financial monitoring, VDAs must still be reported in Annual Information Statements (AIS).

Challenges and Road Ahead

• While the Income Tax Bill, 2025 goes a long way toward laying down taxation, there are grave regulatory gaps to fill:
  • No investor protection laws.
  • No standard market regulation.
  • No effective enforcement mechanism against fraud.

India’s taxation approach, therefore, goes so far as to reaffirm that VDAs are a non shadow asset class. For a robust, safe digital economy, the demand for stronger financial regulation, consumer protection, and standardized compliance guidelines has become urgent.

Source: TH

2. Slow IPO Market

Context:

Just 14 companies filed Draft Red Herring Prospectus (DRHP) forms in February as opposed to 29 in January, the lowest ever to show since November 2024.
Decline in Fundraising: The overall amount being sought for IPOs dipped to ₹9,695 crore, which is a low of 9 months.

What is Slow IPO Market?

The condition called the Slow IPO Market is attributed to the low DRHP applications, which observed a new low of 3 months.

What is Initial Public Offerings?

What is Behind the Slowdown?

• Market Volatility
  • Since the beginning of October, companies have been extra cautious because of fluctuations in the market.
• Political Uncertainty
  • The apprehension of investors has heightened since the likely return of Donald Trump to the White House in January.
• Wait and Watch mode
  • IPO filings have been stopped by companies, in the hope that more stability and bullishness would follow.

Wider Market Effect

• Brokerage Stocks Suffered
  • An onslaught of selling for a long period combined with possible SEBI changes in regulations related to the derivatives markets meant declines of up to 18% in a couple of brokerage stocks.
• RIL Weakens
  • Stock of reliance industries (RIL) fell tracking weak earnings.

Source: BS

3. Bank Deposit Insurance

Context:

The Indian government is actively considering increasing the deposit insurance limit from Rs 5 lakh to Rs 15 lakh. This move comes after the recent scam at New India Co-operative Bank, which raised concerns about the safety of depositors’ money.
Plays a key role in ensuring depositor safety: Deposit Insurance and Credit Guarantee Corporation (DICGC).

Understanding Bank Deposit Insurance

Bank deposit insurance is a financial safety net that protects depositors from losses if their bank fails. It helps stabilize the financial system and prevent panic. 

• Current Coverage
  • Deposit insurance covers “principal + interest” up to ₹5 lakh per bank.
  • If ₹5 lakh is principal, forfeiture of interest in a bank failure.
• Risk Management Strategies for Depositors
  • Distributing deposits among multiple banks reduces risk exposure.
  • Different sequences of joint accounts: They will be insured separately for ₹5 lakh each.

How DICGC Works?

Established in 1978 with the merger of Deposit Insurance Corporation with Credit Guarantee Corporation.

• Collects insurance premiums from banks, not depositors.
• Premium rate: 0.12% per annum (₹0.12 per ₹100 of assessable deposits).
• Deposit Insurance Fund (DIF) stood at ₹1.98 trillion in FY24.

Change coming in Deposit Insurance

• Risk Based Premiums
  • RBI Deputy Governor Swaminathan J suggests connecting the insurance premium with the risk profiles of individual banks.
• High risk banks will end up paying more in insurance premiums encouraging better risk management.

Raising Awareness

• 97.8 percent of the deposit accounts fully insured but only 43.1 percent of the total deposits protected.
• To ensure greater awareness among depositors about the benefits of deposit insurance, targeted awareness campaigns are planned by DICGC.

In a scenario of financial uncertainty, a higher deposit cover of ₹15 lakhs could become a great boon for depositors and inspire confidence in the banking system of India.

Source: BS

Economy

1. India’s GDP growth rate for Q3FY25 at 6.2%

Context:

India’s real GDP grew by 6.2% in Q3FY25, which is improved against the revised 5.6% in Q2FY25, but still among one of the slowest growth rates since Q4FY23. The poor performance of manufacturing activities and the services sector amid uncertainties surrounding global trade is rendering the government’s 6.5% full year growth target increasingly difficult to attain.

Key Highlights

• Sectoral Performance
  • Growth was mainly due to the primary sector, which grew sharply to 5.2% from 1.8% last year.
  • However, manufacturing (4.8%) and services (7.4%) slowed sharply relative to 12.4% and 8.3% in the previous year.
• Global Trade Challenges
  • Proposed 25% U.S. import tariffs on steel and pharmaceuticals might pose a major risk.
  • About 31% of India’s $8.7 billion pharma exports go to the U.S., and any potential shifts in the production towards the U.S. will be detrimental to trade revenue.
• Consumption & Spending
  • Not to forget, government consumption saw a tremendous rise of 8.3% (against 2.3% last year), as did private consumption, meanwhile, grew 6.9% (against 5.7%), aided by moderating inflation.
• Inflation & RBI Outlook
  • For its part, the Reserve Bank expects inflatory pressure to average around 4.8% in FY25, easy to 4.2% the following year in FY26, in keeping with its 4.0% medium term target. Questions remain over data veracity, though.
• NSO’s Data Revision
  • The National Statistical Office (NSO) has done some tinkering with its data collection methods, in order to allow some “industry wise/institution wise detailed information.” Data reliability, however, is under serious doubts, given the lack of transparency on the actual consequences.

While strong government spending and improved consumption provide some respite, there are severe challenges from global trade pressures, slow industrial growth, and worries concerning data credibility. Therefore, the 6.5% full year growth target will require a show of greater strength against external economic shocks and engagement of domestic demand.

2. Manufacturing PMI

Context:

The Manufacturing PMI in India has fallen to a 56.3 in February from a earlier figure of 57.7 in January.
Such a figure is currently below 14 month but still well above contractionary territory. The Purchasing Managers’ Index (PMI) is the barometer for an economy’s manufacturing activity a reading above 50 implies expansion, the below value indicates contraction.

Main Features

• Slower Growth
  • The February PMI is the most feeble since December 2023 but still indicates overall a positive business outlook.
• Sector Performance Figures
  • Consumer, intermediate, and investment goods were reported.
• Employment
  • Manufacturing firms expanded their workforce with job creation at its second highest level in survey history.

Demand and inflation trends

• New Orders & Exports
  • Strong domestic and global demand kept new business intakes rising for the 44th consecutive month.
• Pricing Pressure
  • Easing input costs notwithstanding, firms increased prices owing to increased labour and material costs (e.g., bamboo, leather, rubber, telecom).

Chief India Economist, HSBC

• According to an expert insight from Pranjul Bhandari, Chief India Economist, HSBC, At its current pace of slowdown, India’s manufacturing is still rather strong, carrying optimistic business outlooks.
• Global demand is also sustaining such growth, encouraging businesses to increase purchasing activity and hire new employees.

Purchasing Managers’ Index (PMI)

The Purchasing Managers’ Index (PMI) is a leading economic indicator that controls business activity over the manufacturing and services spectrums. Monthly based surveys of companies on economic trends and market conditions provide a base for it.

Types of PMI

• Manufacturing PMI – It measures the performance of the manufacturing sector.
• Services PMI – It assesses the activities present in the services sector.
• Composite PMI – It is an index that aggregates manufacturing and services activities.

How is the Manufacturing PMI Derived?

PMI is calculated from the survey responses provided by manufacturing companies based on five key variables:

• New Orders (30%)
• Output (25%)
• Employment (20%)
• Suppliers’ Delivery Times (15%)
• Stock of Items Purchased (10%)

PMI values are interpreted as follows:

• Above 50 is the expansion of business activity.
• Below 50 is the contraction of business activity.
• Closer to 50 is little change in business conditions.
• Growth or decline rates are determined by comparison of month over month PMI values.

Global PMI Measurement

The Purchasing Managers’ Index (PMI) was first published in 1948 by the Institute for Supply Management (ISM), USA. The Singapore Institute of Purchasing and Materials Management (SIPMM) compiles PMI for Singapore. IHS Markit is known to be producing PMI for 30 countries, with India being one of them. The Manufacturing PMI in India dates back to survey responses from 500 manufacturing companies.

Why is PMI Important?

• Early Economic Indicator
  • The PMI itself is released even before other major economic indicators such as GDP or industrial output., making it exceedingly handy for forecasting economic trends.
• Helps Businesses Plan
  • Manufacturers and suppliers use PMI data to adjust production levels and anticipate demand.
• Investor confidence
  • The stock market investors use PMI to assess the economic health to make investment decisions confidently.

Even though some momentum waned within India’s manufacturing sector, it is still in expansion mode, with booming job creation and resilient demand. Looking ahead, however, some inflationary pressures and uncertainties in the global context would dent this momentum in future growth.

Source: BS

3. India to Overtake Japan as the Fourth Largest Economy

Key Highlights:

• It is estimated that India’s GDP would grow by 6.5% in FY25, marginally greater than the earlier projection of 6.4%.
• Revised one percentage point up for FY24 GDP growth as its economy began showing stronger performance.
• So, India now stands as having economy of ₹331 trillion ($4.2 trillion in FY25) and thus is getting closer to Japan’s $4 trillion GDP (2024).
• Looking at Japan’s steady and slow growth, it appears that India would soon overtake Japan’s economy in 2025.

India’s GDP Growth vs. Other Major Economies

Country	2017	2018	2019	2020	2021	2022	2023	2024*
India	6.8	6.5	3.9	-5.8	9.7	7.6	9.2	6.5*
US	2.4	3.0	2.6	-2.2	6.0	2.5	2.9	2.8
China	6.9	6.7	5.9	2.2	8.4	2.9	5.2	5.0
Japan	1.7	0.6	-0.4	-4.2	2.7	1.1	1.5	0.1

India’s figures are based on financial years (April-March).

India’s Economic Expansion in Dollar Terms

Year	GDP ($ Trillion)
2017-18	2.65
2018-19	2.70
2019-20	2.84
2020-21	2.67
2021-22	3.17
2022-23	3.35
2023-24	3.64
2024-25	3.91

Revised estimates and exchange rate fluctuations have been accounted for in this projection.

Major Issues

• Middle income trap
  • Though growth is rapid, India is still trapped in the lower middle income category.
  • Rupee depreciation may get a real iGDP effect if it shows annual decline of about 2.25% against the dollar.
• Sustained growth is needed
  • Policy support, infrastructure investment, and strong domestic demand are the means needed to drive continuity.

With steady growth along with favorable conditions in the world, India is going to overtake Japan, which will become the fourth largest economy by 2025. Only the US, China, and Germany will then be ahead of it.

Source: BS

4. Recommendations by RBI for MSME Lending

Context:

The Deputy Governor Swaminathan J mostly appealed for greater empathy from the banks toward MSEs who face financial deprivation. Digital solutions, alternative credit models, and wider acceptance of TReDS should be considered in order to improve MSME finances.
Delayed payments, information scarcity, and financial illiteracy were brought forward as the major issues.
The 29th meeting of the Standing Advisory Committee (SAC) took place in Ahmedabad concerning the review of MSME credit flow.

Recommendations by RBI for MSME Lending

• Empathy should lead the process
  • Instead of strict measures, banks should show compassion and embrace MSEs in distress.
• Digitally enable
  • Fintech solutions should be the order of the day for immediate credit access.
• A new horizon in credit appraisal
  • Move from traditional parameters to dynamic lending based on trustworthiness in terms of repayment.
• Continuous use of TReDS
  • TReDS be relied upon by banks for maintaining liquidity.

Hence, their take on ABI is that with MSMEs being the backbone of the Indian economy, the RBI advocacy for such innovative and inclusive banking solutions leads to financial stability and growth in that sector.

5. Single Nodal Agency (SNA) System

Context:

The SNA system aims at not only improving the transparency of centrally sponsored schemes (CSS), but also improving their efficiency. The current system reserves funds in several accounts to ensure “Just in Time” release. So far, it has helped the Union government save ₹11,000 crores.

Why Use of Fund Must Be Made Efficient?

• Averts wasteful interest servicing, Avoids idle funds and associated fiscal deficits with market, borrowing costs.
• Changes Transparency
  • In terms of the most recent Budget statement, ₹1 trillion from CSS happened to remain in state accounts unspent.
• Facilitates cash float management
  • Thus, punctual fund availability will be ensured for projects such as Jal Jeevan Mission, Pradhan Mantri Awas Yojana, and Swachh Bharat Mission.

Issues & The Way Forward

• States possess unspent funds
  • to identify bottlenecks which inhibit spending.
• Contention for CSS rationalization
  • State demands greater spending flexibility and recommends that funds should flow freely from the Centre.
• Future reforms
  • Better balancing state authority and central supervision for better economic outcomes may be suggested by finance commissions.

The SNA system is bound to improve governance and fiscal governance through resource trade-off in the country.

Source: BS

6. MGNREGA Work Demand Remains High

Context:

As of February 2025, MGNREGA has a total of 21.8 million households seeking work, which is a minor increase of 3% from February of the previous year. There has been a sustained demand growth for the work that is always higher than the previous year towards the end of November 2024.
Funding Shortfall: MGNREGA has a net negative balance amount of ₹18681.24 crore as of the 3rd of March, 2025.

Financial Scenario

• Pending dues in total: ₹14,239.17 crore.
• Unskilled wages: 929.14 crore (6.52% of total dues).
• All other pending dues relate primarily to material costs.
• States with highest negative balances:
  • Tamil Nadu: ₹3,443 crore
  • Uttar Pradesh: ₹2,817 crore
  • Maharashtra: ₹2,758 crore
  • Bihar: ₹2,082 crore

Work Demand Trend

• MGNREGA demand continues to stay high indicating both rural distress as well as dependency on employment.
• Even though demand remains high, funds are in shortage which raises concerns over timely payments for wage and material procurement.

More likely further fund allocation might be needed to cater demands on rise.
Delayed payments could have repercussions on rural livelihoods as well as project completion.
Sustained increase in demand may signal wider economy or employment issues in rural India.

Facts To Remember

1. Tiger Zeenat to be released into larger enclosure soon

Tiger Zeenat, which had strayed into Jharkhand and West Bengal in December before being tranquillised and brought back to Odisha’s Similipal Tiger Reserve (STR), is expected to be released into a larger enclosure as part of a phased acclimatisation process. 

2. Govt launches 5 projects for hydrogenfuelled vehicles

The government has launched five pilot projects to deploy hydrogenbased vehicles for trial as part of the National Green Hydrogen Mission, the Ministry of New and Renewable Energy said. As many as 37 hydrogenfuelled vehicles, including buses and trucks, will be deployed for trial run under the pilot projects across the country.

3. Set up centralised digital verification for QCOs: GTRI

The government should set upa centralised digital verification system before issuing new quality control orders (QCOs) with an aim to prevent fraud and ensure the integrity of certification processes, think tank Global Trade Research Initiative (GTRI) said. QCO´s are issued to contain imports of lowquality products and protect consumers. GTRI claimed that India is facinga growing problem of substandard imports falsely claiming to have Bureau of Indian Standards certification.

4. Uttarakhand approves ‘Mukhyamantri Ekal Mahila Swarozgar Yojana’

The Uttarakhand government has approved the “Mukhyamantri Ekal Mahila Swarozgar Yojana,” aimed at empowering unmarried, divorced, abandoned, destitute, and differently-abled single women by providing them with financial assistance of up to 2 lakh rupees.

5. Govt working with vision of self-reliant India, MSMEs play transformative role in growth: PM Modi

Prime Minister Narendra Modi today said that the government is working with the vision of a self-reliant India and has accelerated the pace of reforms.

6. India’s R&D spending doubled in last decade: Union Minister Jitendra Singh

Union Minister Dr. Jitendra Singh has said that the country’s Research and Development spending has doubled in the last decade, from more than sixty thousand crore in 2013-14 to 1.27 Lakh Crore rupees.

7. Over 1.4 million women associated with Panchayati Raj Institutions: Union Minister Rajiv Ranjan Singh

Union Minister of Panchayati Raj Rajiv Ranjan Singh, alias Lalan Singh, has highlighted that nearly 1.4 million women across the country are associated with Panchayati Raj Institutions today.

8. Health Minister JP Nadda chairs 9th Mission Steering Group Meeting of NHM

Union Minister for Health and Family Welfare, Jagat Prakash Nadda, today chaired the 9th meeting of the Mission Steering Group of the National Health Mission (NHM) at Bharat Mandapam in New Delhi.

9. Bombay HC stays FIR order against ex-SEBI chief, 5 others

The Bombay High Court today granted a stay on the order of a special PMLA court directing the Maharashtra Anti-Corruption Bureau (ACB) to file an FIR against former Securities and Exchange Board of India (SEBI) Chairperson Madhabi Puri Buch and other SEBI and Bombay Stock Exchange (BSE) officials in connection with a listing fraud case.