Daily Current Affairs (DCA) 4&5 May, 2025

Daily Current Affairs Quiz
4&5 May, 2025

International Affairs

1. EU Willing to Reengage with India on WTO ICT Tariff Dispute

Context:

The European Union (EU) has expressed willingness to reinitiate negotiations with India over a WTO dispute concerning import tariffs imposed by New Delhi on information and communication technology (ICT) products. A senior EU official confirmed the bloc’s readiness to explore an “amicable settlement,” provided India is open to such talks.

Background of the Dispute

• Nature of Dispute: India imposed customs duties on ICT goods including mobile phones, components, and handsets — gradually implemented since 2014.
• EU’s Position: These tariffs violate WTO rules, particularly under the Information Technology Agreement (ITA), which mandates zero duty on covered products.
• WTO Ruling (April 2023): WTO’s Dispute Settlement Body ruled in favor of the EU, asking India to remove these duties.
• India’s Response: India appealed the ruling to the WTO Appellate Body, which is currently non-functional, rendering it an “appeal into the void.”

Current Developments

• EU Readiness for Talks: The EU remains open to discussions if India seeks an amicable bilateral resolution.
• Public Consultation by EU:
  • In November, the EU launched a public consultation under its Enforcement Regulation to assess the impact of India’s tariffs on EU interests.
  • This is a preliminary step to evaluate potential retaliatory measures, though it doesn’t predetermine any future decision.
• MPIA Rejection by India:
  • The EU suggested resolving the issue via the Multi-Party Interim Appeal Arbitration Arrangement (MPIA).
  • India declined, arguing for a restoration of the WTO Appellate Body and maintaining that the tariffs are on non-ITA products.

Key Issues at Stake

• Trade Impact: Tariffs affect EU exporters of ICT goods, including electronics and telecom equipment manufacturers.
• Legal Complexity: WTO appeals remain unresolved due to the dysfunctional appellate mechanism, complicating final settlement.
• Enforcement Regulation: Gives the EU legal grounds to retaliate if the dispute remains unresolved under WTO channels.

India’s Stand

• India claims the products in question do not fall under the ITA-1 agreement.
• The government asserts its sovereign right to impose tariffs and continues bilateral engagement with the EU.

BS

National Affairs

1. India Imposes Comprehensive Ban on Imports, Postal Links, and Port Access for Pakistan

Context:

In a significant escalation of bilateral tensions, the Government of India has imposed a complete ban on trade, shipping, and postal links with Pakistan. The decision follows a deadly terror attack in Jammu & Kashmir and coincides with Pakistan’s latest missile test.

Key Developments:

Trade Ban Enforced

• The Directorate General of Foreign Trade (DGFT) announced a ban on the “direct or indirect import or transit of all goods originating in or exported from Pakistan.”
• The restriction applies regardless of the goods’ import status (freely importable or otherwise).
• The ban is effective immediately and will remain in place until further orders.
• The DGFT cited national security and public policy as the basis for the decision.

Port and Shipping Restrictions

• The Ministry of Ports, Shipping and Waterways issued an order to:
  • Prohibit docking of Pakistani-flagged ships at Indian ports.
  • Bar Indian ships from visiting ports in Pakistan.
• These measures are effective immediately, with exemptions considered on a case-by-case basis.

Suspension of Postal Links

• The Department of Communications confirmed the complete suspension of all categories of inbound mail and parcels from Pakistan.
• The suspension affects both air and surface routes and is already in force.

Comprehensive Visa Revocation by India

• India has implemented a severe visa crackdown on Pakistani nationals in phases since April 23, culminating in near-total suspension of non-official travel.

Context & Background

• The restrictions come in the aftermath of the April 22 terror attack in Pahalgam, Jammu & Kashmir, which claimed 26 lives.
• Pakistan’s test-firing of a nuclear-capable missile on the same day further heightened tensions.
• Earlier this week, India had implemented a stricter visa regime for Pakistani nationals.

Policy Implications

• These measures represent India’s most stringent non-military response to Pakistan in recent years.
• Analysts believe the move is aimed at exerting economic and diplomatic pressure while reinforcing India’s national security posture.

TH

2. India-France Rafale-M Deal

Context:

India has formally concluded a ₹64,000 crore deal with France for 26 Rafale-Marine (Rafale-M) fighter jets, enhancing the Indian Navy’s combat capabilities and preparing both INS Vikramaditya and INS Vikrant for full fighter jet deployment by 2030. Minor modifications to aircraft and carriers will be required to ensure seamless operations.

Key Highlights:

Deal Finalisation and Delivery Timeline

• Inter-Governmental Agreement (IGA) signed on April 28, 2025 between India and France.
• Procurement includes:
  • 22 single-seater Rafale-Ms
  • 4 twin-seater trainer versions
• Delivery schedule:
  • Begins: Q2 2028
  • Completed: End of 2030
• Package includes training, simulators, weapons, associated equipment, and 5-year performance-based logistics (PBL).
• Deal value: ~₹64,000 crore (includes support equipment for existing IAF Rafales).

Significance for Indian Navy

• Once inducted, Rafale-M will complete the fighter complement for both Indian aircraft carriers.
• Will significantly enhance India’s maritime power projection, especially in the Indian Ocean Region (IOR).
• Offers improved interoperability with Western naval forces, bolstering India’s naval diplomacy and multilateral operations.

The Rafale-M acquisition marks a strategic leap for Indian naval aviation, ensuring full fighter capacity on both carriers by 2030. Backed by intelligent budgeting and intergovernmental collaboration, this deal underscores India’s focus on blue water capabilities, indigenous carrier readiness, and modern air power integration.

TH

3. Global Vaccine Coverage Decline Raises Alarms as Preventable Diseases Re-emerge

Why Vaccine-Preventable Diseases Are Rising Again

Global health agencies — WHO, UNICEF, and Gavi — have issued a joint warning that diseases such as measles, meningitis, and yellow fever are making a comeback due to:

• Massive drops in immunisation coverage
• Reduced donor funding and disrupted supply chains
• Misinformation, humanitarian crises, and population growth

Key Alarming Findings

• WHO’s survey of 108 countries (mainly low/lower-middle income) found:
  • Nearly 50% face moderate to severe disruptions in immunisation campaigns
  • Over half have weakened disease surveillance systems
• In 2023, 14.5 million children missed all routine vaccines, up from 13.9 million in 2022 and 12.9 million in 2019
• Over half of unvaccinated children live in fragile/conflict-hit regions
• Measles outbreak in the U.S.: 935 cases reported as of May 1, 2025 — triple 2024 figures

Vaccination: A Proven High-Return Investment

• WHO: Immunisation offers a $54 return for every $1 spent
• 154 million lives saved in 50 years — six lives a minute
• Accounts for 40% improvement in infant survival rates
• Measles vaccine alone saved 60% of those lives
• Vaccines annually prevent 4.2 million deaths from 14 major diseases

India’s Progress Through Immunisation

• Universal Immunization Programme (UIP) targets:
  • 26 million newborns and 34 million pregnant women annually
  • 13 million immunisation sessions held each year
• Major milestones:
  • Polio-free (2014) and tetanus eliminated (2015)
  • National rollout of Measles-Rubella, PCV, and Rotavirus vaccines
• As per NFHS-5 (2019–21), India’s full immunisation coverage is 76.1% — meaning 1 in 4 children still miss essential vaccines

Urgent Actions Needed

• Governments must prioritise immunisation as a critical public health and economic investment
• Strengthen the ‘Big Catch-Up’ initiative and commit to the Immunisation Agenda 2030
• Gavi’s June 25, 2025 pledging summit seeks to raise $9 billion to:
  • Protect 500 million children
  • Save at least 8 million lives between 2026–2030

TH

4. Discovery of Prehistoric Workshop in Haryana’s Mangar Bani

Context:

The discovery was made in Mangar Bani, situated between Manesar and Faridabad, Haryana Hidden within the Aravalli hills, the site contains evidence of early human civilization dating back 500,000 years

Archaeological Findings

• The site is possibly the oldest workshop in North India, associated with the Acheulean culture — an early stage of human tool-making
• The Lower Palaeolithic artefacts discovered at the site offer insights into the tools and lifestyle of our ancient ancestors
• Former ASI Joint Director-General S B Ota, who confirmed the discovery, described the site as more than just a prehistoric settlement but a complete workshop where early humans not only crafted tools but also lived and thrived

Cultural and Historical Context

• The Acheulean culture is known for distinctive hand axes and cleavers, marking a crucial period in human evolution
• The findings shed light on how early humans interacted with their environment and developed complex tool-making techniques during the Lower Palaeolithic period

Impact on Prehistoric Studies

• Mangar Bani adds an important piece to the puzzle of human evolution, offering a glimpse into the lifestyles and technologies of early hominins
• This discovery could influence future archaeological surveys and deepen our understanding of ancient human activity in the Indian subcontinent

TOI

Science & Tech

1. Microgravity Increases Core Body Temperature: IIST Model

Context:

A new study from the Indian Institute of Space Science and Technology (IIST), Thiruvananthapuram, offers critical insights into how microgravity affects human thermoregulation—a key determinant of astronaut well-being during long-duration space missions such as future voyages matching Voyager 1’s trajectory.

What is Microgravity?

Microgravity is the condition in which people or objects appear to be weightless. The effects of microgravity can be seen when astronauts and objects float in space. Microgravity can be experienced in other ways, as well. “Micro-” means “very small,” so microgravity refers to the condition where gravity seems to be very small. In microgravity, astronauts can float in their spacecraft – or outside, on a spacewalk. Heavy objects move around easily. For example, astronauts can move equipment weighing hundreds of pounds with their fingertips. Microgravity is sometimes called “zero gravity,” but this is misleading.

Key Findings:

• Core Body Temperature in Space:
  • Microgravity consistently raises astronauts’ core body temperature. Over 2.5 months in space, body temperature may increase from 36.3°C to 37.8°C, and up to 40°C with exercise due to reduced sweating and increased metabolism.
• Body Heat Redistribution:
  • In near-zero gravity, blood shifts from the lower limbs to the upper body, making the head, abdomen, and core warmer, while hands and feet become cooler.
• Advanced 3D Computational Model:
  • IIST researchers developed a 3D thermoregulation model simulating:
    • Blood redistribution
    • Reduced blood volume
    • Bone and muscle atrophy
    • Metabolic changes
    • Environmental heat transfer (e.g., via clothing, vital organs)
• Verification and Application:
  • The model’s predictions match official reports from Mir Space Station and the International Space Station (ISS).
    Beyond space, such models are used in medicine (surgical planning), architecture (thermal comfort), and apparel design (climate-adaptive clothing).

Lead Researchers:

• Prof. Shine S.R., Department of Aerospace Engineering
• Chithramol M.K., PhD researcher and first author

Publication:

The findings were published in Life Sciences in Space Research on March 29, 2025.

Significance:

This research strengthens the knowledge base for designing safer human spaceflights, aiding agencies like ISRO and NASA to prepare for extended missions beyond Earth orbit.

TH

Banking/Finance

1. Crypto Scam Epidemic in India

Context:

Since 2015, a surge of fraudulent cryptocurrency platforms in India has led to widespread investor losses running into tens of thousands of crores. Lured by promises of high monthly returns and buoyed by Bitcoin’s meteoric rise, investors—many unfamiliar with the technology—were misled into Ponzi-style schemes. Enforcement agencies have ramped up investigations, but legal ambiguity and delayed reporting have hindered recovery efforts.

Key Highlights:

Rise of Dubious Crypto Firms (2015–2017)

• Fraudulent companies like BTC Fund and Gain Bitcoin capitalized on crypto’s early popularity and regulatory vacuum.
• These firms promised 10–40% monthly returns, leveraging seminars, social media, and influencer endorsements to attract unsuspecting investors.

Enforcement Action

• The Enforcement Directorate (ED) has taken up 122 cryptocurrency-related cases since 2017–18.
• Assets worth:
  • ₹4.56 crore have been attached in the BTC Fund case.
  • Over ₹180 crore seized in the Gain Bitcoin investigation, including properties in Dubai.
• The 2015 amendment to the PMLA (Section 8[8]) allows courts to restore attached properties to victims.

Fraud Mechanisms & Challenges

• Ponzi schemes masked as legitimate Bitcoin exchanges.
• Dark Web channels and crypto wallets used to obscure fund trails.
• Funds are swiftly diverted to mule accounts and withdrawn overseas, complicating recovery.
• According to Haryana Cyber Police, 70–80% of funds could be recovered if reported within 5–6 hours of a scam.

Global Rankings and Legal Ambiguity

• Per FBI data (2023):
  • India ranks 5th globally in crypto scam complaints.
  • 6th in overall crypto fraud losses.
• Cryptocurrency’s legal status remains unclear:
  • RBI ban (2018) lifted by Supreme Court (2020).
  • No formal regulatory ban, yet crypto incomes are taxed, implying tacit approval.
  • Crypto platforms often violate FEMA provisions.

India’s cryptocurrency sector is trapped in a regulatory grey zone. While enforcement agencies have intensified action, victims remain in financial distress due to delayed justice, lack of investor awareness, and weak early intervention systems. Stronger oversight, legal clarity, and rapid response mechanisms are critical to curbing the ongoing crypto scam epidemic.

TH

2. SBI Q4FY25 Results

Context:

State Bank of India (SBI), India’s largest lender, reported a 10% year-on-year decline in net profit for the fourth quarter of FY25, primarily due to higher provisions. However, on a full-year basis, the bank posted a 16% growth in net profit, driven by stable core income and improved asset quality.

Key Financial Highlights – Q4FY25:

• Net Profit: ₹18,643 crore (↓10% YoY from ₹20,698 crore)
• Net Interest Income (NII): ₹42,775 crore (↑2.63% YoY)
• Net Interest Margin (NIM): 3.15% (↓32 bps from 3.47%)
• Loan Loss Provisions: ₹3,964 crore (↑20.35% YoY)

Full-Year FY25 Performance

• Net Profit: ₹70,901 crore (↑16% YoY)
• NII: ₹1,66,965 crore (↑4.43% YoY)
• Loan Loss Provisions: ₹14,418 crore (↑51.49%)

Mint

3. ICAI to Prepare Research Paper to Assist SEBI in Tackling Financial Frauds

Context:

The Institute of Chartered Accountants of India (ICAI) has announced that it will develop a comprehensive research paper to assist SEBI (Securities and Exchange Board of India) in addressing financial frauds in the Indian capital markets.

Key Highlights:

• Objective: To support SEBI in enhancing regulatory oversight and preventing financial irregularities through structured academic input.
• Working Group Formation: ICAI will establish a dedicated working group comprising experts to identify fraud indicators and best practices in forensic auditing.
• Collaboration with SEBI: The institute will hold consultative discussions with SEBI to define the scope and focus areas of the research.
• Deliverable: The working group will submit a detailed research paper outlining strategies to detect, investigate, and deter financial frauds.

BS

4. Public Sector Bank Pullback Slows Bancassurance Growth for Life Insurers in FY25

Context:

The bancassurance (banca) channel for life insurance witnessed diverging growth trends in FY25. Public sector banks (PSBs) scaled back insurance sales amid misselling concerns and regulatory scrutiny, while private sector bank–backed insurers continued to see robust growth through the same channel.

Key Growth Trends in FY25

• PSB-backed life insurers:
• Growth slowed from 7% in FY24 to 6% in FY25
• Growth dropped to 2% in March FY25
• Private bank–backed life insurers:
• Recorded 15% growth in FY25
• March growth moderated to 7%, compared to 8% in FY24

Reasons Behind PSB Slowdown

• Changes in Incentive Structures:
• Several PSBs eliminated incentive schemes for staff involved in insurance sales.
• Previously, some PSBs offered commissions or rewards; these have been completely withdrawn.
• Regulatory Pushback:
• The Reserve Bank of India (RBI) advised banks to focus on core banking and treat insurance as a customer service, not a primary business.
• At the SBI Conclave (Nov 2024), Finance Minister Nirmala Sitharaman and former IRDAI Chairman Debashish Panda flagged serious concerns around misselling and forced selling.
• IRDAI formed a task force to review and possibly restructure the banca framework.

Performance by Key PSBs

• Low Single-Digit Growth: Punjab National Bank, Canara Bank, Union Bank of India
• Double-Digit Growth: State Bank of India, Bank of Baroda, Bank of India

Emerging Challenges

• Customer Preferences Shift:
• Footfalls at bank branches are declining as customers prefer buying insurance online.
• Compliance Measures Introduced:
• Banks are adopting PIVC (Pre-Insurance Verification Calls) and other checks to curb misselling.

Strategic Realignment in Banca Distribution

The bancassurance model, once a dominant life insurance distribution channel, is undergoing a major reset, especially in the public sector. As banks realign to regulatory expectations and digital transformation accelerates, insurers will need to adapt quickly by diversifying channels, enhancing transparency, and leveraging digital innovations to sustain growth.

BS

5. Bank Lending to NBFCs and MFIs Remains Subdued

Context:

Despite the Reserve Bank of India (RBI) reverting to lower risk weights on loans to non-banking financial companies (NBFCs) and microfinance institutions (MFIs) from April 1, 2025, banks remain cautious in extending fresh credit to the sector. Top-rated NBFCs continue to get funding access, while mid-sized and lower-rated firms struggle.

Key Trends and Data

• Bank credit to NBFCs grew only 5.7% YoY to ₹16.36 trillion as of March 21, 2025 (vs 15.3% growth in the same period last year).
• Microfinance loan portfolio declined 4% YoY to ₹3.91 trillion (as of December 2024).
• Credit to the services sector, which includes NBFCs, slowed to 13.4%, down from 28% last year.

Sectoral Insights

• Top-rated NBFCs:
  • Continue to have stable access to bank funding.
  • Are the primary beneficiaries of the RBI’s rollback of higher risk weights.
• Mid and small NBFCs/MFIs:
  • Face limited benefit due to banks’ conservative stance.
  • Have been impacted by tightened lending norms, especially in high-risk segments.

Why Are Banks Still Cautious?

• Microlending stress: Rising delinquencies have made microfinance a high-risk segment.
• Cautious credit approach: Banks prefer a wait-and-watch strategy for 1–2 more quarters.
• Unchanged loan pricing: Despite regulatory support, loan rates are not expected to decline.
• MFIN restrictions: The Microfinance Industry Network has imposed new norms (from early 2025), limiting borrower exposure to no more than three lenders.

Caution Over Optimism

Even with RBI’s support, risk aversion persists among banks, especially toward smaller NBFCs and MFIs. Sustained improvement in credit quality, adherence to new borrower protection norms, and stronger sectoral performance will be key to reviving lending momentum over the coming quarters.

BS

6. PMMY: Fueling India’s Micro Enterprise Growth and Financial Inclusion

Context:

Launched on April 8, 2015, the Pradhan Mantri Mudra Yojana (PMMY) has emerged as a key pillar of India’s inclusive financial ecosystem. Designed to offer collateral-free loans to micro and small enterprises (MSEs), PMMY has empowered millions of first-time entrepreneurs with access to formal institutional credit.

Loan Categories Under PMMY

PMMY operates through four loan categories:

• Shishu: Loans up to ₹50,000 (early-stage enterprises)
• Kishor: Loans between ₹50,001 to ₹5 lakh (growth-stage enterprises)
• Tarun: Loans between ₹5 lakh to ₹10 lakh (established businesses)
• Tarun Plus (new in FY25): Loans up to ₹20 lakh to support business expansion for existing borrowers

Key Achievements (2015–2025)

• 520+ million loans sanctioned
• Total loan amount sanctioned: ₹32.61 trillion
• 68% of Mudra loans availed by women borrowers
• 50% of accounts belong to SC, ST, and OBC entrepreneurs
• MSMEs’ share in total bank credit rose from 15.8% to 20% in 10 years

Impact on Financial Inclusion & Entrepreneurship

• PMMY has reduced dependence on informal lending by offering credit linked to cash flows and asset life.
• Encouraged first-time business owners, especially women and marginalized communities.
• Strengthened the foundation of inclusive entrepreneurship and self-reliance (Atmanirbhar Bharat).

Role of Lending Institutions

• Banks, NBFCs, RRBs, and MFIs are central to the scheme’s delivery.
• These institutions have:
  • Expanded credit access through rural and semi-urban branches
  • Improved awareness, reduced turnaround time, and simplified procedures
  • Actively resolved field-level implementation challenges

Sectoral Expansion and Reforms

• Inclusion of allied agriculture and rural manufacturing has had transformational impact.
• Extension to homestays (Union Budget 2025) aims to unlock rural tourism potential.
• Tech-enabled credit risk models planned for the next phase to enhance reach and precision.

Future Outlook

With a strong base of digitally assessed, collateral-free loans, PMMY is poised to support India’s goal of becoming a $5 trillion economy by:

• Scaling small businesses
• Encouraging formalization
• Deepening credit penetration in underserved areas

BS

7. Governance Crisis in Indian Banking

Context:

• On April 28, 2025, the Deputy CEO of IndusInd Bank resigned.
• A day later, the MD & CEO also stepped down, citing moral responsibility for lapses in derivative accounting.
• Earlier in January, the Chief Financial Officer (CFO) had also resigned.

Triggering Events

• Discrepancies in the accounting of derivative transactions within the bank’s global markets division raised red flags.
• Investigations are ongoing to determine the balance sheet impact.
• The top-level resignations followed systemic failures across internal control, audit, and risk management functions.

Parallel Cases of Financial Misconduct

• New India Cooperative Bank Fraud (₹122 crore siphoned off):
  • In February, RBI uncovered cash misappropriation by a former GM.
  • The individual admitted to stealing cash from the vaults over several years.
• Aviom India Housing Finance Fraud:
  • National Housing Bank detected inflated cash balances through mutual fund accounting irregularities.
  • A forensic audit confirmed a serious accounting fraud.

Key Issues Raised

• Failures in internal control mechanisms, board supervision, and governance oversight.
• Questionable audit quality and weak RBI vigilance in early detection.
• Nomination and appointment of CEOs, often influenced more by compliance than competence.
• Regulatory blind spots, as RBI relies on board-approved shortlists for key appointments.

Governance Structure & Regulatory Framework

• CEO accountability under Section 10B of the Banking Regulation Act.
• RBI’s powers under Section 36ACA allow board supersession for up to 1 year in public interest.
• Private bank boards must comprise at least 50% independent directors with specialized domain expertise.

Systemic Challenges

• Current governance mechanisms are inadequate to detect or prevent large-scale fraud.
• Board-level dysfunction often limits a CEO’s accountability, especially when the chairman plays an outsized role.
• Inspection ≠ Audit: RBI’s inspections can miss deeper governance and compliance issues.

Recommendations & Future Outlook

• Focus of RBI inspections should shift from asset quality to board-level governance and compliance culture.
• Appointment of dedicated governance officers, separate from ethics officers or company secretaries.
• Strengthening laws for financial crimes, including clearer consequences and faster judicial outcomes.
• Avoid symbolic resignations; instead, enforce individual accountability and structural reform.

BS

8. Supreme Court Ruling on JSW-Bhushan Power Deal

Context:

The Supreme Court declared JSW Steel’s acquisition of Bhushan Power and Steel illegal, spotlighting serious procedural gaps in India’s Insolvency and Bankruptcy Code (IBC)

• The ruling reflects growing concerns about delays, inefficiencies, and legal loopholes in the insolvency resolution process

Core Issues in the IBC Framework

• Delays in timely resolution, contradicting IBC’s original objective of time-bound recovery
• Limited institutional capacity to handle increasing caseloads
• Bottlenecks include:
• Inadequate information flow between creditors and debtors
• Strategic legal challenges used to delay proceedings

Structural Flaws and Incentive Misalignment

• Current framework gives creditors dominant control, incentivizing debtors to obstruct or delay
• A balanced approach is needed to ensure fair outcomes for both sides
• Letting debtors retain operational control post-resolution can reduce resistance and fast-track settlements

Suggested Reforms for Improved Efficiency

• Evolve the IBC process to:
• Raise the deterrence value of entering insolvency proceedings
• Use the threat of losing corporate control to push quicker settlements
• Encourage pre-insolvency arbitration and out-of-court negotiations
• Emphasize equal accountability for lenders and borrowers in managing credit risks

Long-Term Vision

• A reformed IBC should:
• Prevent moral hazard by enforcing responsible risk management
• Enable faster, fairer resolutions
• Reduce the system’s vulnerability to legal and procedural abuse
• Legal interventions should focus on systemic design rather than case-by-case fixes, which are costly and time-consuming

TET

9. Foreign Investors Face Regulatory Roadblocks in Buying Small Stakes in Indian Listed Companies

Context:

Offshore investors seeking to buy less than 10% equity in listed Indian companies through off-market transactions (like preferential allotments or secondary deals) are facing rejections from banks. Banks insist such investments require the investor to be Sebi-registered Foreign Portfolio Investors (FPIs), even for sub-10% holdings.

Market Trades and Off-market Transactions

• Market Trades- Trades placed through the stock exchange. They are executed through a broker/exchange (NSE/BSE), cleared by the depositories (NSDL/CDSL), and settled through a Clearing Corporation (CC). 

• Off-Market Trades- Trade settlement between two parties, the transferor (entity which transfers the share) and transferee (entity that receives the shares) without the involvement of an exchange or a CC. It is a way of transferring ownership of securities. Here, the transferor submits a signed Delivery Instruction Slip (DIS) to their Depository Participant (DP) requesting a transfer of the mentioned securities to the transferee.

Regulatory Confusion: FDI vs. FPI

• As per NDI (Non-Debt Instruments) Rules,
  • ≥10% holding = FDI (governed by RBI)
  • <10% = Foreign Portfolio Investment (FPI, governed by Sebi)
• However, the term “foreign portfolio investment” in Rule 2(t) applies broadly to any non-resident—not just registered FPIs
• This has led to divergent interpretations:
  • Conservative banks reject sub-10% investment unless investor is an FPI
  • Liberal banks allow non-FPI foreign investors to buy <10% without FDI documentation like FC-GPR

Implications for Foreign Investment in India

• Single-digit stake buyers reluctant to seek FPI registration due to cost and complexity
• Inconsistent bank interpretations create hurdles for foreign inflows
• Sebi’s upcoming proposal to allow direct stock purchases by foreigners (similar to NRIs) may address part of the problem

FDI-FPI Classification Rigidity

• If an FPI exceeds 10% stake, entire holding reclassified as FDI
• Even after reducing the stake below 10%, it’s still considered FDI
• This rigidity reflects jurisdictional turf issues between RBI (FDI) and Sebi (FPI), limiting investor flexibility

TET

10. IIFL Finance Sues ACRE Over ₹1,000 Crore Loan Recovery Dispute

Context:

IIFL Finance, a Mumbai-based NBFC, has filed a petition in the Bombay High Court against Assets Care and Reconstruction Enterprise (ACRE), backed by Ares Management. The legal battle centers around alleged mismanagement of ₹1,085 crore in distressed assets under a 2021–22 servicer agreement

Key Allegations by IIFL Finance

• Arbitrary suspension and termination of recovery efforts by ACRE, hampering progress on asset resolution
• Unjustified charging of management fees after RBI’s October 2022 circular prohibiting such payments from non-recovery funds
• Violation of RBI guidelines by not refunding excess fees already paid
• Misuse of trust funds to cover ACRE’s legal expenses in arbitration, in breach of contract terms
• ACRE allegedly prioritized its own interests after recovering capital, compromising its fiduciary responsibility

Servicer Agreement Details

• Agreement covered:
  • ₹1,085 crore in bad loans from 7 stressed developers and over 22,000 retail borrowers
• ACRE was entitled to:
  • 4% annual management fee (~₹40 crore)
  • Additional performance incentives based on recovery outcomes

Regulatory Trigger

• In October 2022, the RBI issued a circular requiring that management fees for ARCs be paid only from actual recoveries
• IIFL stopped fee payments post-circular and demanded refund of any excess payments made in violation of this directive

ACRE’s Response

• Refused to comment citing sub judice status of the case
• Rejected the accusations as baseless and misconceived
• Reiterated commitment to RBI compliance and stakeholder interest

Implications for the ARC Sector

• Case may set precedent for how servicer agreements are enforced post-RBI guidelines
• May lead to tighter fiduciary accountability standards for Asset Reconstruction Companies (ARCs)
• Could impact ARC fee structures, recovery timelines, and trust-based fund usage in future asset resolution deals

TET

11. India’s Export Performance in FY 2024-25: RBI Report

• Total Exports:
  • India achieved an all-time high in total exports, reaching US$824.9 billion in the financial year 2024-25, a 6.01% increase from US$778.1 billion in the previous year.
• Services Exports:
  • Services exports continued to drive the growth momentum, hitting a record of US$387.5 billion in 2024-25, reflecting a 13.6% growth from US$341.1 billion in 2023-24.
  • For March 2025, services exports stood at US$35.6 billion, a robust 18.6% year-on-year growth compared to US$30.0 billion in March 2024.
• Merchandise Exports:
  • Merchandise exports, excluding petroleum products, surged to a new peak of US$374.1 billion, marking a 6.0% increase over US$352.9 billion in the previous year.

India’s export growth in FY 2024-25 highlights the continued strength of services exports, while also showing solid gains in merchandise exports. This trend reflects the country’s growing global trade presence.

12. India Post Payments Bank (IPPB) Celebrates Labour Day with Key Welfare Initiatives

• Commitment to Labour Welfare:
  • On Labour Day (May 1), India Post Payments Bank (IPPB) reaffirmed its commitment to the welfare of Shramiks (labourers) by focusing on providing essential services and benefits for the unorganised sector workforce.
• Launch of Antyodaya Shramik Suraksha Yojana (ASSY):
  • The Antyodaya Shramik Suraksha Yojana (ASSY), an affordable insurance scheme, was introduced to offer comprehensive protection to unorganised sector workers.
  • Launched by the Hon’ble Chief Minister of Gujarat on 8th July 2023 at Kheda, Gujarat, this scheme provides workers with a safety net and financial support in times of need.
• Scheme Impact:
  • 6,97,531 policies have been issued to Shramiks under the scheme since its launch.
  • 355 claims have been successfully settled, amounting to a total claim payout of ₹5,41,17,754.
• IPPB’s Role and Partners:
  • The scheme is facilitated through IPPB with the support of six insurance partners:
    • New India Assurance
    • Bajaj Allianz General Insurance
    • TATA AIG General Insurance
    • Niva Bupa Health Insurance
    • Aditya Birla Health Insurance
    • Start Health
• IPPB’s Infrastructure:
  • India Post Payments Bank aims to bridge the gap for unbanked and underbanked populations, ensuring that essential services reach the last mile through its extensive postal network.
  • The network includes approximately 1,65,000 Post Offices (with 140,000 in rural areas) and 3,00,000 Postal employees.
• Leadership:
  • Mr. R. Viswesvaran serves as the MD & CEO of India Post Payments Bank (IPPB).

IPPB’s efforts reflect a strong commitment to improving the financial and social well-being of India’s labour force, especially in the unorganised sector.

13. India Post Collaborates with SBI Mutual Fund to Simplify KYC Verification Process

• Partnership Overview:
  • India Post has partnered with SBI Funds Management Limited (SBIFM) to streamline the KYC (Know Your Customer) verification process for mutual fund investors across India.
  • The collaboration is formalized through a Memorandum of Understanding (MoU), aimed at utilizing India Post’s extensive network to offer doorstep KYC verification services to investors of SBI Mutual Fund.
• Key Benefits of the Collaboration:
  • The partnership ensures easy access for investors nationwide to complete their KYC process from any location, leveraging India Post’s vast infrastructure.
  • This initiative supports the Government of India’s Jan Nivesh program, which aims to increase financial inclusion and encourage participation in India’s capital markets.
• India Post’s Proven Expertise in KYC:
  • India Post has previously successfully facilitated KYC verifications for other mutual fund companies, including UTI Mutual Fund and SUUTI (Securities and Exchange Board of India’s public fund).
  • India Post has handled over 5 lakh KYC verifications efficiently, demonstrating its ability to manage high-volume operations with precision, security, and efficiency.
• About SBI Mutual Fund:
  • Founded: 29 June 1987
  • Headquarters: Mumbai, Maharashtra
  • MD & CEO: Mr. Nand Kishore
  • Ownership: SBI Mutual Fund is a joint venture between State Bank of India (SBI) and Amundi, a leading European asset management company.

This collaboration is expected to further simplify the mutual fund investment process, offering greater accessibility and convenience for investors, while contributing to India’s financial inclusion goals.

Economy

1. India’s April GST Collection Hits Record ₹2.37 Lakh Crore

Record GST Collections and Compliance Trends

• India’s GST collections for April 2025 hit a historic high of ₹2.37 lakh crore, up 12.6% YoY.
• Net GST revenue after refunds: ₹2.09 lakh crore, marking a 9.1% annual increase.
• Rise attributed to:
  • Year-end tax filings by businesses
  • Increased compliance across MSMEs
  • Mass adoption of fintech solutions (87% fintech adoption rate, above global average)
  • Faster refunds supporting liquidity, especially for small businesses

April’s GST Growth Reflects Broader Economic Momentum

• Since GST rollout in 2017, April collections have more than doubled from ₹1.03 lakh crore to ₹2.37 lakh crore in 2025.
• A significant 86% rise in GST refunds—mainly to exporters—reflects export demand strength.
• GST from imports surged 20.8%, aligning with trade and supply chain shifts.

Manufacturing Sector Gets a Boost from Export Surge

• HSBC India Manufacturing PMI touched a 10-month high at 58.2 in April, from 58.1 in March.
• The PMI indicates:
  • Strong growth in new orders
  • Highest foreign demand in over 14 years
  • Export demand led by Africa, Asia, Europe, West Asia, and the Americas

Global Trade Realignment Benefiting India

• Surge in April export orders partly driven by the approaching July 9 deadline for the end of a 90-day U.S. tariff pause.
• U.S. tariffs on Chinese goods appear more stringent, prompting supply chain diversification.
• India gains from:
  • Lower risk of punitive U.S. tariffs
  • Reshoring and near-shoring trends
  • Corporate sourcing shift—Apple to manufacture most iPhones for U.S. in India

From Temporary Gains to Sustainable Growth

• While this surge reflects short-term export-led momentum, India’s manufacturing sector grew at only 4% in FY25—a four-year low.
• Long-term growth requires:
  • Boosting domestic demand
  • Favourable terms in ongoing Free Trade Agreements (FTAs)
  • Policy incentives to deepen manufacturing and value-addition capacity

India’s record April GST collections highlight robust export activity, a compliance-friendly fintech ecosystem, and shifting global trade dynamics. However, to sustain this momentum, domestic consumption and trade negotiations must play a larger role in driving manufacturing and tax revenue.

TH

Agriculture

1. India Unveils First-Ever Genome-Edited Rice Varieties

Context:

Union Agriculture Minister Shivraj Singh Chouhan announced the successful development of two genome-edited rice varieties.

• The innovation, led by the Indian Council of Agricultural Research (ICAR), is positioned as a catalyst for India’s second Green Revolution.
• Speaking at an ICAR event, the Minister praised the scientists for achieving a breakthrough that blends productivity with sustainability.

Major Agricultural Milestone

• India becomes the first country globally to release genome-edited rice varieties
• Two new variants: ‘Kamala (DRR Dhan 100)’ and ‘Pusa DST Rice 1’
• Developed using SDN1 and SDN2 genome editing methods, with no foreign genes inserted
• Promises 30% higher yield and 15–20 days earlier maturation compared to traditional varieties

Key Benefits of the Genome-Edited Rice

• Water Efficiency: The new rice varieties require less irrigation, helping conserve water resources.
• Environmental Impact: Reduced greenhouse gas emissions, especially methane, which is typically associated with rice cultivation.
• Higher Yield Potential: Aimed at boosting crop productivity while being resilient to climate stress.

Benefits to Farmers and Environment

• Reduced water consumption during cultivation
• Lower greenhouse gas emissions, supporting climate-resilient farming
• Enhanced tolerance to stress factors like drought, pests, and salinity
• Initial distribution through state-run seed firms, later expanded to wider markets

Regulatory and Legal Landscape

• India exempted SDN1 and SDN2 genome-edited crops from GEAC oversight under EPA Rules, 1989
• These varieties fall outside the scope of genetically modified (GM) crop regulation
• Intellectual Property Rights (IPR) applications to be filed soon for new rice lines

Government Investment and Future Outlook

• ₹500 crore allocated in the 2023–24 Union Budget for genome editing in agriculture
• Apart from rice, 24 food crops and 15 horticultural crops are under gene editing development
• Deployment to farmers may take 4–5 years due to seed production cycles
• Efforts underway to fast-track seed availability

‘Lab-to-Land’ Mission to Reach Farmers

• ICAR scientists and Krishi Vigyan Kendras to conduct twice-a-year outreach
• Each program includes 15 days of interaction with farmers per season
• At least three farmer meetings per day, aiming for full national coverage in 3–4 years
• Initiative aims to accelerate adoption of agri-scientific innovations at the grassroots

Strategic Context and Government Vision

• The development aligns with Prime Minister Narendra Modi’s call during Azadi Ka Amrit Mahotsav to adopt modern agricultural technologies.
• Genome editing is part of India’s push for sustainable agri-innovation, especially under conditions of climate uncertainty and resource scarcity.

TH & BS

2. Agrivoltaics in India

What Are Agriphotovoltaics (APVs)?

• Agriphotovoltaics (APVs) refer to the dual use of land for solar energy generation and crop cultivation.
• Originally conceptualized by German scientists Adolf Goetzberger and Armin Zastrow in 1981, APVs involve elevated solar panels (typically 2 m high) that allow crops to grow beneath or between solar arrays.
• APVs promote land-use efficiency, enable climate resilience, and create additional income streams for farmers.

Current Status and Pilot Projects in India

• APVs are at a nascent stage in India, mostly limited to pilot projects by research bodies or private developers.
• A case study in Najafgarh, Delhi, showed a more than sixfold income boost when a farmer leased land for APV use while also growing shade-tolerant, high-value crops.
• APVs also foster favorable microclimates, reducing water loss and heat stress on crops.

Economic and Structural Barriers

• High upfront cost is a major hurdle: APV systems cost 11% more than traditional ground-mounted solar systems (~₹2.7 crore per MW).
• Feed-in tariffs (FiTs) are crucial for viability:
  • Current FiT (₹3.04/unit) yields a 15-year payback.
  • A FiT aligned with thermal average power purchase cost (₹4.52/unit) would cut it to just 4 years.

Need for Regulatory Framework

• India lacks national standards for APVs, unlike:
  • Japan: Requires temporary APV structures, 2m panel height, <20% crop yield loss.
  • Germany: Mandates 66% reference yield and restricts solar footprint to 15% of arable land (DIN SPEC 91434).
• India must define clear APV norms to ensure agricultural priority isn’t compromised for energy returns.

Smallholder Integration and Institutional Support

• Most Indian farmers are smallholders (<2 ha) with limited capital.
• FPOs and cooperatives like Sahyadri (which runs a 250-kW APV with high-value crops) can aggregate land and investments.
• Policy instruments like:
  • NABARD credit guarantees
  • Grants for APV infrastructure
  • Capacity-building programs
    can scale adoption among small farmers.

Expand PM-KUSUM

• PM-KUSUM, India’s flagship agri-solar scheme, currently lacks APV-specific provisions.
• By modifying its grid-connected components to accommodate dual-use infrastructure, the government can:
  • Leverage existing policy
  • Promote land-neutral solar growth
  • Incentivize rural energy entrepreneurship

Two Pillars for APV Success in India

1. Robust Farmer-Centric Policy: Guidelines on panel design, crop yield protection, and land-use criteria.
2. Strong Economic Incentives: Fair feed-in tariffs, financial support, and institutional innovation.

With the right policy vision, India can scale APVs to enhance rural incomes, support clean energy, and ensure food security — all on the same piece of land.

TH

Facts To Remember

1. Australia’s Albanese wins a second 3-year term

Anthony Albanese claimed victory as the first Australian Prime Minister to clinch a second consecutive three-year term in 21 years and suggested his government had increased its majority in the next Parliament by not modelling itself on U.S. President Donald Trump’s administration.

2. Indian Bank Q4 net soars 32%, to pay dividend

State-owned Indian Bank reported a 32% jump in net profit to ₹2,956 crore for the March quarter of 2024-25, helped by a decline in bad loans and a rise in core income.

3. Kotak Bank Q4 net slips 14%, to pay ₹2.5 dividend

Kotak Mahindra Bank reported a 14% year-on-year drop in Q4 standalone net profit to ₹3,552 crore against ₹ 4,133 crore in the year-earlier period.

4. City Union Bank Q4 profit after tax rises 13% to ₹288 cr.

Private sector lender City Union Bank profit after tax (PAT) for the fourth quarter ended March 31 rose 13% year-on-year to ₹288 crore. Net interest income (NII) rose 10% to ₹601 crore. 

5. Rise of sporting culture will boost India’s soft power: PM

Modi inaugurates 7th Khelo India Youth Games, says the government has always given top priority to sports in its policies; he underlines the efforts to bring the Olympics to the country in 2036