Daily Current Affairs (DCA) 7 & 8 June, 2026

Context

The Panchayat Advancement Index (PAI), a flagship data-driven evaluation platform of the Ministry of Panchayati Raj, has been selected for the Gold Award at the National Awards for e-Governance 2026. The award was given under Category VII, “Digital Transformation through the Use of Data Analytics in Digital Platforms”. The PAI is India’s first comprehensive, analytics-driven framework to assess, score, and rank the performance of Gram Panchayats, aligned with the nine themes of the Localisation of Sustainable Development Goals (LSDGs).

The Award

• Award: Gold Award at the National Awards for e-Governance 2026.
• Awardee: Panchayat Advancement Index (PAI).
• Implementing Ministry: Ministry of Panchayati Raj, Government of India.
• Award Category: Category VII, Digital Transformation through the Use of Data Analytics in Digital Platforms.
• Awards organised by: Department of Administrative Reforms and Public Grievances (DARPG), in coordination with the Ministry of Electronics and Information Technology (MeitY).
• Theme of 2026 awards: “Viksit Bharat 2047: AI-Enabled, Data-Driven and Secure Digital Governance”.
• Gold Award incentive: trophy, citation, and ₹10 lakh cash incentive for further technological scaling and R&D.

The 9 Themes of LSDGs (Used by PAI)

• Poverty-free and enhanced livelihood villages.
• Healthy villages.
• Child-friendly villages.
• Water-sufficient villages.
• Clean and green villages.
• Self-sufficient infrastructure villages.
• Socially secured villages.
• Villages with good governance.
• Women-friendly (engendered) development villages.

What is the Panchayat Advancement Index (PAI)?

• A data-driven evaluation framework that assesses, scores, and ranks Gram Panchayats across India.
• PAI 2.0 evaluates over 6 lakh Gram Panchayats.
• Built around the 9 themes of LSDGs.
• It tracks development metrics on a unified digital dashboard.
• Designed to drive competitive federalism at the grassroots level.
• Aims to eliminate subjective assessments, identify development gaps, and help states target funds more efficiently.

What is the Localisation of Sustainable Development Goals (LSDGs)?

• A framework launched by the Ministry of Panchayati Raj to adapt the United Nations Sustainable Development Goals (SDGs) to rural India through Gram Panchayats.
• The 17 SDGs are mapped into 9 thematic clusters for village-level action.
• The PAI tracks performance against these 9 themes.
• LSDGs operationalise the broader 2030 Agenda for Sustainable Development.

What is Competitive Federalism (and Cooperative Federalism)?

• Cooperative federalism: The Centre and States work together toward shared national goals.
• Competitive federalism: States (and now Panchayats) compete with each other on performance metrics, encouraging better governance through benchmarking.
• Indian examples include the NITI Aayog rankings on education (SEQI), health (Health Index), water (CWMI), SDGs (SDG India Index), and the Aspirational Districts Programme.
• The PAI extends competitive federalism to the Panchayat level, the lowest tier of governance.

What are the National Awards for e-Governance?

• India’s premier awards for digital governance excellence.
• Given since 2003.
• Organised by DARPG and MeitY.
• Recognise innovative digital initiatives by Central ministries, State governments, UTs, districts, and PSUs.
• Aim to build a repository of successful digital blueprints that can be replicated across regions.

Key Categories of the Awards (Examples)

• Excellence in Government Process Re-engineering.
• Excellence in providing citizen-centric delivery.
• Use of AI and emerging technologies.
• Use of Open Data and Data Analytics in digital platforms (this is where PAI won).
• Cybersecurity and digital trust.

Practice MCQs

Q1. With reference to the Panchayat Advancement Index (PAI), consider the following statements:

1. The PAI is a flagship initiative of the Ministry of Panchayati Raj.
2. PAI 2.0 evaluates more than 6 lakh Gram Panchayats across India.
3. It uses over 150 indicators and 230 distinct data points.
4. The PAI ranks Gram Panchayats based on the 17 Sustainable Development Goals directly, without any local thematic mapping.

How many of the above statements are correct?

(a) Only one (b) Only two (c) Only three (d) All four (e) None

(Statement 4 is wrong; the PAI uses the 9 themes of the Localisation of Sustainable Development Goals (LSDGs), NOT the 17 SDGs directly.)

Q2. With reference to the 9 themes of LSDGs used in the PAI, consider the following statements:

1. Poverty-free and enhanced livelihood villages is one of the themes.
2. Child-friendly villages and Women-friendly villages are also among the themes.
3. Water-sufficient villages, Clean and green villages, and Self-sufficient infrastructure villages are part of the framework.
4. Healthy villages and Socially secured villages are not part of the framework.

Which of the above are correct?

(a) 1, 2 and 3 only (b) 1, 3 and 4 only (c) 2 and 4 only (d) 1 and 4 only (e) All four

(Statement 4 is wrong; Healthy villages and Socially secured villages are part of the 9 themes.)

Q3. With reference to the National Awards for e-Governance, consider the following statements:

1. The awards are presented annually by DARPG in coordination with MeitY.
2. They have been given since 2003.
3. The PAI won the Gold Award under Category VII, “Digital Transformation through the Use of Data Analytics in Digital Platforms”.
4. The 2026 theme of the awards is “Viksit Bharat 2047: AI-Enabled, Data-Driven and Secure Digital Governance”.

How many of the above statements are correct?

(a) Only one (b) Only two (c) Only three (d) All four (e) None

Q4. With reference to Panchayati Raj and federal governance in India, consider the following statements:

1. The 73rd Constitutional Amendment of 1992 gave constitutional status to Panchayati Raj Institutions.
2. The Panchayati Raj system in India is generally a three-tier structure of Gram Panchayat, Panchayat Samiti, and Zilla Parishad.
3. Competitive federalism encourages states and local bodies to compete with each other on performance benchmarks.
4. The Localisation of SDGs framework operates only at the State level and is not relevant to Panchayats.

Which of the above are correct?

(a) 1, 2 and 3 only (b) 1, 3 and 4 only (c) 2 and 4 only (d) 1 and 4 only (e) All four

(Statement 4 is wrong; the LSDG framework is specifically designed to be relevant to Panchayats and villages.)

Answer Key

1. (c), Statements 1, 2, 3 are correct; Statement 4 is wrong because the PAI uses 9 LSDG themes, not the 17 SDGs directly.
2. (a), Statements 1, 2, 3 are correct; Statement 4 is wrong because Healthy villages and Socially secured villages are part of the framework.
3. (d), All four statements are correct.
4. (a), Statements 1, 2, 3 are correct; Statement 4 is wrong because LSDGs are specifically designed for the Panchayat level.

Exam Relevance

Context

The RBI’s May 2026 surveys show a broad-based weakening in consumer sentiment across both urban and rural India, with households turning more cautious about economic conditions, employment, and discretionary spending. The Urban Consumer Confidence Survey (UCCS) and the Rural Consumer Confidence Survey (RCCS) both fell in May, while the Inflation Expectations Survey of Households (IESH) showed rising price perceptions and expectations. Despite easing headline inflation and supportive monetary policy, households across both segments report strong price pressures, weaker spending intent, and growing caution about the future.

Urban Consumer Confidence Survey (UCCS), May 2026

• Current Situation Index (CSI): fell to 90.7 (vs 95.7 in March), third consecutive decline.
• Future Expectations Index (FEI): slipped to 118.7 (vs 120.2), lowest since September 2023.
• CSI below 100 = pessimism; FEI above 100 = households still expect some improvement ahead, but less than before.

Rural Consumer Confidence Survey (RCCS), May 2026

• Rural CSI: down to 95.2 (vs 98.0 in March).
• Rural FEI: down sharply to 119.3 (vs 125.1), reflecting weaker expectations across most parameters.
• Future sentiment remains optimistic but less so than before, pointing to growing caution.

Inflation Expectations Survey of Households (IESH), May 2026

• Urban:
  • Median inflation perception: up to 7.8 per cent (vs 7.2 per cent).
  • Three-month ahead expectations: 9.3 per cent (up 80 bps).
  • One-year ahead expectations: 9.3 per cent (up 50 bps).
• Rural:
  • Median inflation perception: up to 5.9 per cent (vs 5.6 per cent).
  • One-year ahead expectations: up to 7.2 per cent (vs 6.8 per cent).
• The RBI noted that both rural and urban inflation measures increased sequentially.

Sentiment on Prices, Economy, Employment, and Spending

• Urban: Households more pessimistic on current prices; assessment of current economic situation fell sharply.
• Rural: Net response on current prices stayed deeply negative at -90.0.
• Rural households moved into pessimistic territory on the current economic situation.
• Spending intentions softened in both segments, especially on discretionary (non-essential) expenditure.
• Rural households were especially cautious on non-essential spending, where future spending sentiment fell significantly.

What is the Urban Consumer Confidence Survey (UCCS)?

• A bi-monthly RBI survey of urban households across major Indian cities.
• Captures perceptions and expectations on the economy, employment, prices, income, and spending.
• Generates two key indices:
  • Current Situation Index (CSI): How households see things today vs a year ago.
  • Future Expectations Index (FEI): How households expect things a year from now.
• An index above 100 indicates optimism; below 100 indicates pessimism.

What is the Rural Consumer Confidence Survey (RCCS)?

• A bi-monthly RBI survey of rural households.
• Conducted to measure sentiment in rural India, which makes up about two-thirds of India’s population.
• Tracks the same parameters as the UCCS (general economic conditions, employment, prices, income, spending), but among rural respondents.
• Helps the RBI understand the divergence between urban and rural India.

What is the Inflation Expectations Survey of Households (IESH)?

• A bi-monthly RBI survey that captures households’ perceptions of current inflation and their expectations of inflation in the next 3 months and 12 months.
• It includes both urban and rural households.
• Important because inflation expectations feed into wage demands, consumption decisions, and pricing behaviour, and therefore future actual inflation.
• The RBI uses these expectations to guide monetary policy.

Why is There an Urban-Rural Divergence?

• Urban households are more exposed to fuel prices, services inflation, housing costs, and global price shocks.
• Rural households depend more on food prices and agricultural incomes, which can shift with the monsoon, MSP, and rural employment programmes.
• Urban inflation perceptions (7.8 per cent) are higher than rural (5.9 per cent), partly because urban basket has more services and non-food items.

What is the Net Response in the Survey?

• A statistical measure showing the balance of opinions.
• Calculated as: (percentage of respondents reporting “increase” or “improvement”) minus (percentage reporting “decrease” or “deterioration”).
• A positive number means net optimism; a negative number means net pessimism.
• A figure like -90 on current prices suggests most households report prices have risen, NOT fallen.

Key Terms

• Consumer Confidence Survey: A survey that measures households’ perceptions and expectations about the economy, jobs, prices, income, and spending.
• Current Situation Index (CSI): How households see their current situation compared to a year ago.
• Future Expectations Index (FEI): How households expect the situation to be one year ahead.
• Inflation Expectations Survey of Households (IESH): A bi-monthly RBI survey that captures households’ perceptions of current inflation and expectations for the next 3 months and 1 year.
• Median Inflation Perception: The middle value of inflation perceptions across all surveyed households, less affected by extreme values.
• Anchored Inflation Expectations: A situation where expectations of future inflation remain close to the central bank’s target, regardless of short-term fluctuations.
• Headline CPI Inflation: The overall consumer price inflation rate, including all categories like food, fuel, housing, and services.
• Net Response: The balance between positive and negative responses in a survey, used as a summary indicator.
• Discretionary Spending: Spending on non-essentials like leisure, electronics, dining out, travel.
• Essential Spending: Spending on food, fuel, housing, healthcare, transport-to-work, that households cannot easily cut.

Practice MCQs

Q1. With reference to the RBI’s May 2026 Urban Consumer Confidence Survey, consider the following statements:

1. The Current Situation Index (CSI) fell to 90.7 from 95.7 in March, the third consecutive decline.
2. The Future Expectations Index (FEI) slipped to 118.7, the lowest level since September 2023.
3. An index value above 100 indicates optimism, while below 100 indicates pessimism.
4. The May 2026 UCCS reading showed sharp optimism on the current economic situation.

How many of the above statements are correct?

(a) Only one (b) Only two (c) Only three (d) All four (e) None

(Statement 4 is wrong; the survey showed pessimism, NOT sharp optimism, on the current economic situation.)

Q2. With reference to the RBI’s May 2026 Rural Consumer Confidence Survey, consider the following statements:

1. The rural CSI declined to 95.2 from 98.0 in March.
2. The rural FEI fell sharply to 119.3 from 125.1.
3. Rural households were especially cautious on non-essential spending.
4. Rural households reported a net response of -90.0 on current price levels, suggesting most felt prices had risen.

How many of the above statements are correct?

(a) Only one (b) Only two (c) Only three (d) All four (e) None

Q3. With reference to the RBI’s Inflation Expectations Survey of Households (May 2026), consider the following statements:

1. Urban households raised their median inflation perception to 7.8 per cent in May from 7.2 per cent in March.
2. Urban one-year-ahead inflation expectations rose to 9.3 per cent, up 50 basis points.
3. Rural households’ one-year-ahead inflation expectations rose to 7.2 per cent from 6.8 per cent.
4. Inflation perceptions and expectations fell sharply in both urban and rural households in May 2026.

Which of the above are correct?

(a) 1, 2 and 3 only (b) 1, 3 and 4 only (c) 2 and 4 only (d) 1 and 4 only (e) All four

(Statement 4 is wrong; inflation perceptions and expectations rose, NOT fell, in both segments.)

Q4. With reference to the role of inflation expectations in monetary policy, consider the following statements:

1. If households expect higher inflation, they may spend now rather than later, pushing up demand and inflation.
2. Firms may pass on higher input costs faster if they believe inflation is here to stay.
3. Anchored inflation expectations help keep actual inflation closer to the central bank’s target.
4. Inflation expectations of households have no influence on monetary policy decisions.

Which of the above are correct?

(a) 1, 2 and 3 only (b) 1, 3 and 4 only (c) 2 and 4 only (d) 1 and 4 only (e) All four

(Statement 4 is wrong; inflation expectations are an important input into monetary policy decisions.)

Answer Key

1. (c), Statements 1, 2, 3 are correct; Statement 4 is wrong because the survey showed pessimism, not optimism.
2. (d), All four statements are correct.
3. (a), Statements 1, 2, 3 are correct; Statement 4 is wrong because inflation perceptions and expectations rose in both segments.
4. (a), Statements 1, 2, 3 are correct; Statement 4 is wrong because inflation expectations influence monetary policy decisions.

Exam Relevance

Context

The Central Government will nudge commercial banks to step up deposit mobilisation through the Foreign Currency Non-Resident (Bank) or FCNR(B) route, after the Reserve Bank of India announced it would bear the full hedging cost on fresh 3- to 5-year FCNR(B) deposits till 30 September 2026. Industry estimates suggest banks could raise up to USD 40 billion through this route, while PNB’s Managing Director Ashok Chandra sees overall inflows of USD 50 to 60 billion along with the concessional FX swap facility for PSUs. Banks are expected to reach out to NRI/OCI customers through both local and overseas branches in mission mode.

The Plan

• Centre to nudge banks to aggressively mobilise FCNR(B) deposits.
• Outreach will happen through local and overseas branches of Indian banks.
• Industry estimate: Banks may raise up to USD 40 billion through the FCNR(B) route.

What is an FCNR(B) Account?

• Full form: Foreign Currency Non-Resident (Bank) account.
• It is a term deposit (fixed deposit) held in India.
• The deposit is maintained in foreign currency, not in Indian rupees.
• It can be opened only by Non-Resident Indians (NRIs) and Persons of Indian Origin (PIOs) or Overseas Citizens of India (OCIs).
• It is a bank-level liability, not a sovereign borrowing.

Currencies Allowed

• USD (US Dollar), GBP (British Pound), EUR (Euro), JPY (Japanese Yen), AUD (Australian Dollar), CAD (Canadian Dollar), and a few others as permitted by the RBI.
• The depositor chooses one of the allowed currencies.

Maturity Range

• Minimum: 1 year.
• Maximum: 5 years.
• The RBI’s current swap window focuses on 3- to 5-year FCNR(B) deposits.

Tax Treatment

• Interest earned on an FCNR(B) account is tax-free in India for the NRI/OCI depositor.
• This is one of its biggest attractions for NRIs.

Why is the RBI Bearing the Hedging Cost?

• Banks raising dollar deposits in India have to hedge the currency risk because they will pay back in dollars in 3 to 5 years, but use the funds in rupees in the meantime.
• The hedging cost (about 3 per cent) usually eats into the bank’s spread.
• By absorbing this cost, the RBI effectively subsidises the bank, allowing it to offer attractive rates to NRIs while still being profitable.
• This is a rerun of the 2013 strategy, when about USD 30 billion was raised through a similar swap window during the taper tantrum.

Why Is This So Important Right Now?

• The rupee has been under pressure, with depreciation linked to FPI outflows, rising oil prices, and the West Asia conflict.
• India’s FCNR(B) mobilisation collapsed in FY26, with banks raising only about USD 946 million versus USD 7 billion in FY25.
• A fresh inflow surge can stabilise the rupee, shore up reserves, and ease pressure on the banking system.
• It is also a non-debt-creating capital flow that does not raise external sovereign debt.

How Does an FCNR(B) Inflow Help the Rupee?

• When NRIs deposit dollars in FCNR(B) accounts, dollars flow into India, boosting forex reserves.
• This increases dollar supply, which tends to strengthen the rupee against the dollar.
• It also gives the RBI more ammunition to intervene in the forex market if needed.

Key Terms

• FCNR(B) (Foreign Currency Non-Resident Bank) Account: A term deposit in India held by NRIs and OCIs in foreign currencies, with no rupee depreciation risk to the depositor.
• NRI (Non-Resident Indian): An Indian citizen residing abroad for tax or stay-related reasons.
• OCI (Overseas Citizen of India): A foreign citizen of Indian origin granted lifelong visa and certain rights in India (excluding voting).
• CRR (Cash Reserve Ratio): The share of deposits banks must keep with the RBI in cash, currently 3.0 per cent.
• SLR (Statutory Liquidity Ratio): The share of deposits banks must invest in government securities and approved instruments, currently 18.0 per cent.
• Hedging Cost: The cost of protecting against currency-rate movements, typically through swaps and forwards.
• Forex Swap: A contract to exchange currencies now and reverse the deal later at a pre-agreed rate, used by banks to manage currency risk.
• Net Interest Margin (NIM): The difference between a bank’s interest income and interest expense, as a percentage of interest-earning assets.
• Forex Reserves: A country’s stock of foreign currency, gold, IMF reserve position, and SDRs, held by the central bank, used to manage exchange rates and BoP needs.
• External Commercial Borrowings (ECBs): Foreign currency loans raised by Indian entities (including PSUs) from foreign lenders, subject to RBI rules.

Practice MCQs

Q1. With reference to the latest push for FCNR(B) deposit mobilisation, consider the following statements:

1. The Centre will nudge banks to step up FCNR(B) deposit mobilisation through local and overseas branches.
2. Industry estimates suggest banks could raise up to USD 40 billion through the FCNR(B) route.
3. The RBI will bear the full hedging cost for fresh 3- to 5-year FCNR(B) deposits till 30 September 2026.
4. The hedging cost typically borne by banks is around 3 per cent.

How many of the above statements are correct?

(a) Only one (b) Only two (c) Only three (d) All four (e) None

Q2. With reference to FCNR(B) accounts, consider the following statements:

1. FCNR(B) accounts can be opened only by NRIs and OCIs.
2. The deposits are held in foreign currencies like USD, GBP, EUR, JPY, AUD, and CAD.
3. The depositor does not bear rupee depreciation risk on FCNR(B) deposits.
4. Interest earned on FCNR(B) deposits is taxable in India for NRIs and OCIs.

Which of the above are correct?

(a) 1, 2 and 3 only (b) 1, 3 and 4 only (c) 2 and 4 only (d) 1 and 4 only (e) All four

(Statement 4 is wrong; interest on FCNR(B) deposits is tax-free in India for NRIs and OCIs.)

Q3. With reference to the regulatory treatment of FCNR(B) deposits, consider the following statements:

1. FCNR(B) deposits are exempt from Cash Reserve Ratio (CRR) requirements.
2. FCNR(B) deposits are exempt from Statutory Liquidity Ratio (SLR) requirements.
3. The CRR is currently 3.0 per cent.
4. The SLR is currently 18.0 per cent.

How many of the above statements are correct?

(a) Only one (b) Only two (c) Only three (d) All four (e) None

Q4. With reference to the macroeconomic impact of the FCNR(B) push, consider the following statements:

1. The new inflows are expected to bolster India’s forex reserves.
2. Bigger forex reserves can support the RBI’s ability to fight rupee depreciation pressures.
3. PNB MD Ashok Chandra estimated combined FCNR(B) and PSU forex inflows of USD 50 to 60 billion.
4. FCNR(B) inflows are classified as external sovereign debt and significantly raise India’s external debt burden.

Which of the above are correct?

(a) 1, 2 and 3 only (b) 1, 3 and 4 only (c) 2 and 4 only (d) 1 and 4 only (e) All four

(Statement 4 is wrong; FCNR(B) deposits are non-sovereign, bank-level liabilities and do not significantly raise India’s external sovereign debt burden in the way sovereign borrowings do.)

Answer Key

1. (d), All four statements are correct.
2. (a), Statements 1, 2, 3 are correct; Statement 4 is wrong because interest on FCNR(B) deposits is tax-free for NRIs and OCIs.
3. (d), All four statements are correct.
4. (a), Statements 1, 2, 3 are correct; Statement 4 is wrong because FCNR(B) deposits are not classified as external sovereign debt.

Context

India has slipped to the 7th spot in global market capitalisation rankings in June 2026, with a total market valuation of USD 4.84 trillion, overtaken by South Korea which has moved to the 6th spot with USD 5.01 trillion. Earlier, in May 2026, India had already lost the 5th rank to Taiwan. The slide is attributed to heavy foreign selling, weak earnings growth, and India’s limited exposure to AI-linked stocks. Foreign investors have pulled out USD 26.4 billion from Indian stocks so far in 2026, and India’s weight in the MSCI Global Standard Index has dropped from 21 per cent (September 2024) to 12.3 per cent.

Current Global Market Cap Ranking (June 2026, Bloomberg data)

• 1st: United States with about USD 79.1 trillion.
• 2nd: China with about USD 16.3 trillion.
• 3rd: Japan with about USD 8.9 trillion.
• 4th: Hong Kong (SAR of China) with about USD 7.6 trillion.
• 5th: Taiwan with about USD 5.15 trillion.
• 6th: South Korea with about USD 5.01 trillion.
• 7th: India with about USD 4.84 trillion.

India’s Slide

• Earlier in May 2026, India was pushed to the 6th spot by Taiwan.
• In June 2026, India was pushed further down to the 7th spot by South Korea.
• India’s market valuation: USD 4.84 trillion.
• South Korea’s market valuation: USD 5.01 trillion.

Main Reasons for the Slide

• Heavy foreign selling: FPIs withdrew USD 26.4 billion from Indian stocks so far in 2026.
• Weak earnings growth in Indian-listed companies.
• Limited exposure to AI-linked stocks, where global investors are concentrating capital.

India’s Weight in MSCI Global Standard Index

• September 2024: about 21 per cent.
• Latest: down sharply to 12.3 per cent.

Why Does Global Market Cap Matter?

• It reflects the total value of all listed companies in a country, in US dollar terms.
• A rising market cap signals investor confidence, strong corporate earnings, and economic growth prospects.
• A falling market cap can signal foreign investor pullback, weak earnings, or sector exposure mismatches.
• It is a rough yardstick of a country’s financial market depth and global investor interest.
• Rankings shift due to stock prices, currency moves, IPOs, delistings, and macro sentiment.

Why Are AI Stocks Driving Global Rankings?

• The global rally in AI stocks (US tech, Taiwan, South Korea, China) has lifted entire market caps.
• The United States benefits from AI giants like Nvidia, Microsoft, Alphabet, Apple, Amazon, and Meta.
• Taiwan rides on TSMC (Taiwan Semiconductor Manufacturing Company), the world’s leading chip foundry.
• South Korea has Samsung Electronics and SK Hynix, key players in memory chips and AI hardware.
• India’s tech sector is dominated by IT services (TCS, Infosys, Wipro), which are not direct AI-hardware plays.
• This sector composition mismatch has cost India in AI-driven valuations.

Why Are FPIs Pulling Out of India?

• Higher US bond yields (US 10-year above 4.5 per cent) make US assets more attractive.
• Strong dollar raises currency risk for Indian investments.
• Slower domestic earnings growth relative to expectations.
• High valuations in certain Indian segments after a multi-year rally.
• Geopolitical risks including the West Asia war and trade tensions.
• Better-priced opportunities in other emerging markets, including South Korea and Taiwan.

Practice MCQs

Q1. With reference to India’s slip in global market capitalisation rankings (June 2026), consider the following statements:

1. India has slipped to the 7th spot in global market cap rankings, with a valuation of about USD 4.84 trillion.
2. South Korea has overtaken India and moved up to the 6th spot with USD 5.01 trillion.
3. Earlier in May 2026, India was pushed to the 6th spot by Taiwan, which is now at the 5th spot.
4. The slide is attributed to heavy foreign selling, weak earnings growth, and limited exposure to AI-linked stocks.

How many of the above statements are correct?

(a) Only one (b) Only two (c) Only three (d) All four (e) None

Q2. With reference to the current global market cap rankings (June 2026), consider the following statements:

1. The United States holds the 1st spot with about USD 79.1 trillion.
2. China is at the 2nd spot with about USD 16.3 trillion.
3. Japan and Hong Kong are at the 3rd and 4th spots respectively.
4. India holds the 4th spot ahead of Hong Kong.

Which of the above are correct?

(a) 1, 2 and 3 only (b) 1, 3 and 4 only (c) 2 and 4 only (d) 1 and 4 only (e) All four

(Statement 4 is wrong; India is at the 7th spot, behind Hong Kong, Taiwan, and South Korea.)

Q3. With reference to FPI flows and MSCI index weight changes, consider the following statements:

1. Foreign investors have withdrawn about USD 26.4 billion from Indian stocks so far in 2026.
2. India’s weight in the MSCI Global Standard Index has fallen from about 21 per cent in September 2024 to about 12.3 per cent.
3. The MSCI Global Standard Index is published by Morgan Stanley Capital International (MSCI).
4. A fall in MSCI weight has no impact on passive global fund flows into Indian equities.

Which of the above are correct?

(a) 1, 2 and 3 only (b) 1, 3 and 4 only (c) 2 and 4 only (d) 1 and 4 only (e) All four

(Statement 4 is wrong; a fall in MSCI weight directly reduces passive global fund flows into Indian equities.)

Q4. With reference to why AI stocks are driving global rankings, consider the following statements:

1. The US benefits from AI giants like Nvidia, Microsoft, Alphabet, Apple, Amazon, and Meta.
2. Taiwan’s market is heavily lifted by TSMC, the world’s leading chip foundry.
3. South Korea benefits from Samsung Electronics and SK Hynix, key players in memory chips.
4. India’s tech sector is dominated by AI hardware companies and chip foundries.

Which of the above are correct?

(a) 1, 2 and 3 only (b) 1, 3 and 4 only (c) 2 and 4 only (d) 1 and 4 only (e) All four

(Statement 4 is wrong; India’s tech sector is dominated by IT services, not AI hardware companies or chip foundries.)

Answer Key

1. (d), All four statements are correct.
2. (a), Statements 1, 2, 3 are correct; Statement 4 is wrong because India is at the 7th spot.
3. (a), Statements 1, 2, 3 are correct; Statement 4 is wrong because a fall in MSCI weight reduces passive global fund flows.
4. (a), Statements 1, 2, 3 are correct; Statement 4 is wrong because India’s tech sector is dominated by IT services, not AI hardware.

Exam Relevance

The Union Cabinet approved a two-year Rs 9,585 crore scheme to replace 2.07 lakh BS-IV and older trucks and buses in Delhi-NCR with BS-VI-compliant or electric vehicles. The initiative aims to reduce vehicular emissions, improve air quality, and modernize commercial transport fleets across Delhi, Haryana, Rajasthan, and Uttar Pradesh. The scheme offers interest subvention, fuel vouchers, tax concessions, registration fee waivers, and discounts from vehicle manufacturers.

Union Minister Jayant Chaudhary launched “Navachar Mantra”, a national initiative aimed at identifying, mentoring, and scaling grassroots innovators and early-stage entrepreneurs. Implemented by NIESBUD in collaboration with IIT Delhi’s FITT, the programme offers year-long mentorship, investor connections, innovation showcases, and support for commercializing innovative ideas.

The Government of India expanded QR code tagging of Food Corporation of India (FCI) foodgrain bags to Andhra Pradesh, Telangana, and Odisha. The initiative enables end-to-end tracking of foodgrain movement, enhances transparency, prevents bag recycling, and improves monitoring of procurement, storage, and distribution under the Public Distribution System (PDS).

Hyderabad-based T-Hub launched the third cohort of its ORBIT Space-Tech Accelerator Programme, inducting 13 startups working in areas such as propulsion systems, satellite intelligence, orbital servicing, space energy systems, and geospatial technologies. The programme provides mentorship from industry experts, investors, and former ISRO leaders.

The United Nations General Assembly elected Austria, Kyrgyzstan, Portugal, Trinidad and Tobago, and Zimbabwe as non-permanent members of the United Nations Security Council (UNSC) for the 2027–2028 term. Kyrgyzstan secured its first-ever seat on the UNSC since joining the United Nations in 1992.

The Asian Development Bank (ADB) and Standard Chartered Bank signed agreements to strengthen supply chain finance in India through risk-sharing mechanisms covering both US Dollar and Indian Rupee transactions. The partnership aims to improve access to trade finance and support domestic and international business operations.

The Organisation for Economic Co-operation and Development (OECD) increased India’s GDP growth forecast for FY27 to 6.3%, up from its earlier estimate of 6.1%. The report projects India’s economy to remain among the fastest-growing major economies despite global uncertainties and higher energy prices.

Argentine football legend Lionel Messi became the first footballer to receive the prestigious Princess of Asturias Award for Sports. He was recognised for his extraordinary sporting achievements, global influence, and philanthropic contributions supporting education and healthcare initiatives.

D. K. Shivakumar was sworn in as the 25th Chief Minister of Karnataka following the resignation of Siddaramaiah. The oath ceremony was administered by Governor Thawar Chand Gehlot at Raj Bhavan in Bengaluru.

Mette Frederiksen secured a third consecutive term as Prime Minister of Denmark after successfully forming a new centre-left coalition government following the 2026 parliamentary elections.

Visa appointed Shah Rukh Khan as brand ambassador for its new “Infinitely More” campaign in India. The campaign focuses on experience-led lifestyles, highlighting travel, dining, entertainment, and digital payment convenience.

American investment firm GQG Partners sold a 1.85% stake in GMR Airports Limited for Rs 1,906 crore through open market transactions. The stake was acquired by Fidelity International through its investment fund.

Vice-President C. P. Radhakrishnan released the book When Audit Matters: CAG Interventions That Made a Difference, edited by former CAG Vinod Rai. The book highlights the role of auditing in strengthening governance, accountability, and public trust.

The United Nations observed the International Day of Innocent Children Victims of Aggression on 4 June 2026 to raise awareness about the suffering of children affected by war, violence, exploitation, and armed conflict, while reaffirming commitments to child rights and protection.

The Government of Telangana signed a cooperation agreement with the German state of Thuringia to enhance collaboration in skill development, industrial growth, innovation, technology, workforce development, startups, and life sciences. The partnership also includes plans for a German Language Training Hub in Hyderabad to improve overseas employment opportunities.