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  • Renaming of Fort William

    Why in the News?

    In a move to eliminate colonial practices and symbols from the Indian Armed Forces, Fort William in Kolkata, the headquarters of the Eastern Army Command, has been renamed Vijay Durg.

    About the Vijay Durg (Fort William)

    • It was originally built by the British in 1773, Fort William was named after King William III of England.
    • It is located on the eastern bank of the Hooghly River in Kolkata, West Bengal.
    • It served as a key British military stronghold during colonial rule.
    • The first version of Fort William was built by the English East India Company in 1696.
    • It had an inner bastion used as a prison, leading to the term “Black Hole of Calcutta”.
    • The Black Hole of Calcutta Incident (1756) refers to the alleged imprisonment of British prisoners by Nawab Siraj-ud-Daulah, where many reportedly suffocated to death due to overcrowding and lack of ventilation.
    • After the Battle of Plassey in 1757, Robert Clive ordered its demolition, and a new fort was built, completed in 1773.
    • Fort William College was established by Lord Wellesley in 1800 to train Company civil servants in Indian languages and customs, but it was closed in 1802.
    • The present-day fort is octagonal in shape, made of brick and mortar, covering 70.9 acres.
      • It is now owned by the Indian Army and serves as the headquarters of the Eastern Command.

    Do you know?

    Fort St. George (Chennai, Tamil Nadu) 

    • It was the first fort built by the British in 1644, marking the beginning of British rule.
    • It served as the headquarters of the Madras Presidency.
    • It included St. Mary’s Church, the oldest Anglican Church in India.
    • Current Use: Tamil Nadu Legislative Assembly & Secretariat.

    Significance of Renaming

    • The new name is inspired by Vijay Durg Fort in Maharashtra, one of the oldest and most significant naval forts under Chhatrapati Shivaji.
    • Vijay Durg served as a naval base for the Marathas, highlighting India’s indigenous military history.
    • The renaming aligns with India’s broader initiative to remove colonial influences and promote native military traditions.
      • In September 2022, the Indian Navy replaced its British-era ensign with a new octagonal design inspired by Chhatrapati Shivaji’s royal seal.

    PYQ:

    [2018] With reference to educational institutions during colonial rule in India, consider the following pairs: 

    Institution: Founder

    1. Sanskrit College at Benaras: William Jones
    2. Calcutta Madarsa: Warren Hastings
    3. Fort William College: Arthur Wellesley

    Which of the pairs given above is/are correct?
    (a) 1 and 2 only
    (b) 2 only
    (c) 1 and 3 only
    (d) 3 only

     

  • Article 22 of the Indian Constitution

    Why in the News?

    The Supreme Court ruled that informing an arrested person of the grounds of arrest is a mandatory constitutional obligation, not a mere formality. Failure to comply makes the arrest illegal, violating Articles 22(1) and 21, which protect fundamental rights and personal liberty.

    About Article 22 of the Indian Constitution:

    • Article 22 of the Indian Constitution ensures protection to individuals against arbitrary arrest and preventive detention.
    • It has two parts:

    1. Article 22(1) & 22(2) – Protection in Ordinary Arrests:

    • The arrested person must be informed of the grounds of arrest as soon as possible.
    • The person has the right to consult and be defended by a lawyer of their choice.
    • They must be produced before a magistrate within 24 hours.

    2. Article 22(3) to 22(7) – Preventive Detention Provisions:

    • Preventive detention without trial cannot exceed 3 months, unless approved by an Advisory Board.
    • The government may deny disclosure of reasons if it affects public interest.
    • Parliament can extend detention beyond 3 months in special cases.

    Key Highlights of Supreme Court’s Recent Judgment:

    • The Supreme Court ruled that informing an arrested person of the grounds of arrest is a fundamental right.
    • Non-compliance violates both Articles 22(1) and 21 (Right to Liberty), rendering the arrest invalid.
    • Grounds of arrest must be clearly conveyed in an effective manner.
    • Providing the grounds in writing is the best practice (as suggested in Pankaj Bansal vs Union of India).
    • As per Section 50A of CrPC, the accused’s family or nominated person must also be informed to allow legal representation.
    • Magistrates must ensure compliance. If Article 22(1) is not followed, the arrest is illegal, and the accused must be released.
    • Violation of Article 22(1) is a ground for Bail. Even if statutory restrictions on bail exist, courts can grant bail if fundamental rights are violated.
    • If the accused claims non-compliance, the Investigating Officer must prove that Article 22(1) was followed.

    Relevant Supreme Court Judgments:

    • Pankaj Bansal vs Union of India (2023): SC advised that grounds of arrest should ideally be provided in writing.
    • Maneka Gandhi vs Union of India (1978): “Procedure established by law” must be fair, just, and reasonable.
    • DK Basu vs State of West Bengal (1997): Established guidelines to prevent custodial abuse and ensure due process.
    • Ram Manohar Lohia vs State of Bihar (1965): Distinguished between law and order (individual impact) and public order (societal impact).

     

    PYQ:

    [2021] With reference to India, consider the following statements:

    1. Judicial custody means an accused is in the custody of the concerned magistrate and such an accused is locked up in a police station, not in jail.
    2. During judicial custody, the police officer in charge of the case is not allowed to interrogate the suspect without the approval of the court.

    Which of the statements given above is/are correct?

    (a) 1 only
    (b) 2 only
    (c) Both 1 and 2
    (d) Neither 1 nor 2

     

  • Economic Capital Framework (ECF) of the RBI

    Why in the News?

    The Reserve Bank of India (RBI) has initiated an internal review of its Economic Capital Framework (ECF) to assess the contingency risk buffer (CRB) and overall capital reserves.

    What is Economic Capital Framework (ECF)?

    • The ECF is the risk management policy used by the RBI to determine:
    1. How much capital and reserves the central bank should maintain for financial stability.
    2. How much surplus the RBI can transfer to the government under Section 47 of the RBI Act, 1934.
    • Key Components
    1. Contingency Risk Buffer (CRB): A financial safeguard for monetary, fiscal, credit, and operational risks.
    2. Total Economic Capital: Includes capital, reserves, risk provisions, and revaluation balances.
    • Surplus Transfers:
      • FY24: ₹2.11 lakh crore (highest-ever surplus).
      • FY23: ₹87,416 crore | FY22: ₹30,307 crore | FY21: ₹99,122 crore.

    Review of ECF and Its Significance

    • The Bimal Jalan Committee’s recommendations (valid till June 2024) required a periodic reassessment.
    • As of March 31, 2024, the CRB stands at 6.5%, and the RBI is evaluating whether changes are needed.
    • Potential Impact
      • Higher CRB → More financial stability, but lower surplus transfers to the government.
      • Lower CRB → More funds available for government spending, but with potential financial risks.
    • Impact on Budget: RBI’s surplus plays a major role in fiscal planning for infrastructure & welfare programs.
    • The RBI must ensure financial resilience while also supporting economic development.

    About Bimal Jalan Committee (2018)

    • Objective: To review RBI’s reserve management and surplus transfer policy.
    • Key Recommendations:
      • CRB should be between 5.5% – 6.5% of the balance sheet.
      • Periodic ECF review every 5 years.
      • Only realized surplus (net income) should be transferred to the government.
      • Revaluation reserves should not be used for operational losses.
    • Impact:
      • Led to higher surplus transfers and a structured capital policy.
      • Strengthened transparency & financial governance in RBI’s operations.

     

    PYQ:

    [2017] Which of the following statements is/are correct regarding the Monetary Policy Committee (MPC)?

    1. It decides the RBI’s benchmark interest rates.
    2. It is a 12-member body including the Governor of RBI and is reconstituted every year.
    3. It functions under the chairmanship of the Union Finance Minister.

    Select the correct answer using the code given below:

    (a) 1 only
    (b) 1 and 2 only
    (c) 3 only
    (d) 2 and 3 only

     

  • [pib] SASCI Scheme

    Why in the News?

    The Government of India has sanctioned 40 projects across 23 states, allocating ₹3295.76 crore under the ‘Special Assistance to States for Capital Investment (SASCI) Scheme for the Financial Year 2024-25.

    What is the SASCI Scheme?

    • The SASCI Scheme was launched in FY 2020-21 to support state capital expenditure and drive economic growth.
    • Initially introduced as a post-COVID recovery measure, it has been expanded in FY 2023-24 with an allocation of ₹1.3 lakh crore.
    • The scheme funds infrastructure projects, urban reforms, tourism development, and sustainability initiatives.
    • Structural Mandate: The scheme has eight parts based on states’ share of central taxes:
    1. General Capital Assistance (₹1 lakh crore): Allocated based on states’ share of central taxes.
    2. Vehicle Scrappage & Testing Facilities:  Incentives for phasing out old vehicles & setting up automated testing centers.
    3. Urban Planning Reforms: Encourages modern land-use planning & governance improvements.
    4. Urban Finance Reforms:  Strengthens municipal revenue models & financial sustainability.
    5. Housing for Police Personnel: Funds residential units for police & their families.
    6. Cultural & Economic Development (Unity Malls):  Promotes One District One Product (ODOP), Make in India & local entrepreneurship.
    7. Digital Libraries at Panchayat/Ward Levels: ₹5,000 crore for library infrastructure & digital learning access.
    8. Development of Iconic Tourist Centres:  Global-scale branding & infrastructure for major tourism hubs.

    Features & Significance:

    • Boosts capital investment to stimulate demand and job creation.
    • Encourages reforms in urban governance, infrastructure, and sustainability.
    • Promotes responsible tourism and global branding of iconic destinations.
    • Strengthens local industries through One District One Product (ODOP).
    • Improves public services like policing, water supply, and rural roads.

    PYQ:

    [2016] Which of the following is/are included in the capital budget of the Government of India?

    1. Expenditure on acquisition of assets like roads, buildings, machinery, etc.
    2. Loans received from foreign governments
    3. Loans and advances granted to the States and Union Territories

    Select the correct answer using the code given below:

    (a) 1 only

    (b) 2 and 3 only

    (c) 1 and 3 only

    (d) 1, 2 and 3

     

  • How has the Budget allocated funds for urban development?

    Why in the News?

    The 2025 Budget has set up a ₹1 lakh crore Urban Challenge Fund to help cities grow and develop.

    What was the allocation for urban India?

    • Increased Allocation but Underutilization: The Housing and Urban Affairs Ministry received ₹96,777 crore for FY 2025-26, a 17% increase from the previous year. However, the Revised Estimate for 2024-25 stood at ₹63,669.93 crore, indicating significant underutilization of funds.
    • Urban Challenge Fund and PMAY Focus: A ₹1 lakh crore Urban Challenge Fund has been proposed for city redevelopment and water & sanitation projects, with ₹10,000 crore allocated for FY 2025-26. Additionally, ₹78,126 crore has been allocated to both rural and urban PMAY for housing development.
    • Support for Urban Workers and Street Vendors: The government aims to uplift urban workers through PM SVANidhi, which has benefited 68 lakh street vendors. The scheme will be revamped with enhanced bank loans, UPI-linked credit cards (₹30,000 limit), and capacity-building support to reduce reliance on informal sector loans.

    How has the reduction happened?

    • Decline in Direct Transfers to Urban Local Bodies (ULBs): With the abolition of octroi and the implementation of GST, ULBs lost a key revenue source, expecting compensation through central devolution. However, the central share for ULBs declined from ₹26,653 crore (last year) to ₹26,158 crore in 2025-26, increasing financial pressure on local bodies.
    • Cuts in Key Centrally Sponsored Schemes (CSS):
      • PMAY (Urban) faced a drastic cut, with its allocation reduced from ₹30,170.61 crore to ₹13,670 crore in the Revised Estimate (RE) for 2024-25.
      • AMRUT and Smart Cities Mission allocations fell below ₹10,400 crore, with almost no new funds for the Smart Cities Mission.
      • Swachh Bharat Mission (Urban) retained ₹5,000 crore, but RE shows only ₹2,159 crore was spent—a 56% underutilization.
    • Shift in Priorities Toward Capital-Intensive Metro Projects: While many urban development schemes saw cuts, metro rail projects received increased funding.
      • Metro projects’ allocation rose from ₹21,335.98 crore to ₹24,691.47 crore in RE (2024-25) and is further proposed to increase by 46% to ₹31,239.28 crore in 2025-26.
      • This shift prioritizes large infrastructure over comprehensive urban mobility, employment generation, and local governance funding.

    Does the Union Budget focus on capital-intensive projects? 

    • Priority to Large Infrastructure Projects: The budget significantly increases funding for metro rail projects (₹31,239.28 crore, up 46%), while allocations for urban schemes like PMAY (Urban), AMRUT, and Smart Cities Mission have been reduced or underutilized.
    • Reliance on Private Investment for Urban Development: The ₹1 lakh crore Urban Challenge Fund requires 50% private sector participation, which may slow implementation, shifting focus from government-driven urban welfare programs to capital-intensive projects.

    What next?

    • Urban Challenge Fund Implementation Risks: The government has introduced a ₹1 lakh crore Urban Challenge Fund, but 50% of the funding is expected from private investments.
      • Given the limited private sector participation in past urban initiatives like the Smart Cities Mission, relying on private funding could slow implementation.
    • Balancing Infrastructure with Livability and Sustainability: The budget favors metro expansion but lacks a broader focus on comprehensive urban mobility, employment generation, and sustainable urban planning.
      • Future policies must integrate green jobs, affordable housing, and local governance empowerment to create more inclusive cities.
    • Strengthening Financial Autonomy for Urban Local Bodies (ULBs): The decline in direct transfers and devolution post-GST has weakened ULB finances, forcing cities to raise taxes or cut essential services.
      • Strengthening municipal revenue sources, revising property tax frameworks, and ensuring timely fund disbursal can help cities plan better for growth.

    Conclusion: Need to Strengthen municipal revenue sources through property tax reforms, land monetization, and timely fund transfers, reducing dependency on central allocations. The government should ensure equitable investment in metro expansion, affordable housing, sanitation, and employment generation, fostering livable, sustainable, and inclusive urban growth.

    Mains PYQ:

    Q What are ‘Smart Cities’? examine their relevance for urban development in India. Will it increase rural-urban differences? Give arguments for ‘Smart Villages’ in the light of PURA and RURBAN Mission. (UPSC IAS/2018)

  • SEBI proposed Retail Algo Trading Framework

    Why in the News?

    Initially exclusive to institutional investors, Securities and Exchange Board of India (SEBI) now has proposed to allow retail participation in Algorithmic trading (algo trading) to ensure market stability and allow retail participation.

    What is Algo Trading?

    • Algo Trading, or Algorithmic Trading, is the process of using computer programs and pre-defined rules to execute financial market trades at high speed and efficiency.
    • It eliminates human intervention and emotions, allowing trades based on mathematical models, historical data, and market conditions.
    • How Does Algo Trading Work?
      • It follows pre-coded algorithms to identify trading opportunities and execute orders.
      • It uses technical indicators, price movements, volume, and other data to determine trade entry and exit points.
      • The system can scan multiple markets simultaneously and execute trades in milliseconds.
      • High-Frequency Trading (HFT) is a subset of algo trading that involves executing thousands of trades per second.
      • It reduces market impact, transaction costs, and slippage compared to manual trading.

    Key Highlights of Regulatory Framework:

    • Broker Responsibility: Only registered brokers can offer algo trading services to retail investors. Direct retail algo trading without broker approval is not permitted.
    • Market Surveillance: Exchanges must monitor algorithmic trades to prevent market manipulation and excessive order placement.
    • Latency and Co-location Rules: SEBI has set rules to ensure fair access to low-latency trading infrastructure and avoid unfair advantages.
    • Risk Management: Traders must maintain adequate margins, and there are circuit breakers to prevent excessive market volatility.
    • Pre-Approval for Strategies: Algo trading strategies must be tested and approved before deployment to minimize market disruption.
    • Algo vs. Non-Algo Identification: SEBI mandates separate tagging of algo trades for better transparency and oversight.
    • Ban on Self-Trading: Algorithms must not execute self-trades to manipulate market prices.

    PYQ:

    [2019] Which of the following is issued by registered foreign portfolio investors to overseas investors who want to be part of the Indian stock market without registering themselves directly?

    (a) Certificate of Deposit

    (b) Commercial Paper

    (c) Promissory Note

    (d) Participatory Note

     

  • Article 200 of the Indian Constitution

    Why in the News?

    The Supreme Court has criticized Tamil Nadu Governor for creating an “impasse” by withholding assent to state bills and later referring them to the President, questioning his handling of state bills under Article 200 of the Constitution. The Governor has withheld 12 Bills, primarily concerning higher education and the appointment of Vice-Chancellors in State universities.

    Judicial Precursor: Rameshwar Prasad Case (2005)

    • Article 361 provides immunity to Governors from court proceedings for actions taken in their official capacity.
    • However, in Rameshwar Prasad & Ors. vs Union of India & Anr., the Supreme Court ruled that:
      • Immunity under Article 361 does not prevent judicial review of the Governor’s actions.
      • If a Governor withholds assent with malicious intent, the decision can be deemed unconstitutional.
      • Governors must provide valid reasons for withholding assent, as they cannot act arbitrarily.

    What is Article 200?

    • Article 200 governs the Governor’s options when a Bill passed by the State Legislature is presented for approval.
    • It outlines the Governor’s discretionary powers regarding assenting, withholding, returning, or reserving Bills.

    Provisions and Features:

    • The Governor has four options when presented with a State Legislature Bill:
    1. Assent to the Bill: The Bill becomes law.
    2. Withhold Assent: The Governor can refuse approval.
    3. Return the Bill: If it is NOT a Money Bill, the Governor can send it back to the State Legislature for reconsideration.
    • Reserve the Bill for the President’s Consideration:  If the Bill-
      • Violates the Constitution or a Central law.
      • Affects national interests or is ultra vires.
      • Opposes the Directive Principles of State Policy (DPSP).
      • Concerns compulsory property acquisition under Article 31A.
      • Endangers the position of the State High Court (mandatory reservation).
    • Article 201 deals with Bills reserved for the President’s approval, granting the President the power to:
      • Assent to the Bill or withhold assent.
      • Return the Bill for reconsideration by the State Legislature.
    • Key Constitutional Debates:
      • No time limit exists for the Governor to act, leading to delays and constitutional challenges.
      • Judicial scrutiny has questioned prolonged withholding of assent, as seen in recent Supreme Court cases.

    PYQ:

    [2014] Which of the following are the discretionary powers given to the Governor of a State?

    1. Sending a report to the President of India for imposing the President’s rule
    2. Appointing the Ministers
    3. Reserving certain bills passed by the State Legislature for consideration of the President of India
    4. Making the rules to conduct the business of the State Government

    Select the correct answer using the code given below:

    (a) 1 and 2 only

    (b) 1 and 3 only

    (c) 2, 3 and 4 only

    (d) 1, 2, 3 and 4

     

  • [pib] NITI Aayog launches Swavalambini Initiative

    Why in the News?

    The NITI Aayog has launched Swavalambini Women Entrepreneurship Programme in collaboration with the Ministry of Skill Development and Entrepreneurship (MSDE).

    About Swavalambini Women Entrepreneurship Programme:

    • It is a program to foster entrepreneurial skills among female students in higher education institutions across Assam, Meghalaya, and Mizoram.
    • Aims and Objectives:
      • Empowerment: To inspire and equip young women to become job creators and leaders, thereby contributing to economic development in Northeast India.
      • Skill Development: To provide structured training that covers essential business aspects, enhancing participants’ entrepreneurial competencies.
    • Provisions and Features:
      • Entrepreneurship Awareness Programme (EAP): A two-day session introducing 600 female students to the fundamentals of entrepreneurship.
      • Entrepreneurship Development Programme (EDP): An intensive 40-hour training for 300 selected participants, covering topics such as financial planning, market access, legal compliance, and business networking.
      • Mentorship: Six months of dedicated mentorship to assist participants in transforming their business ideas into viable enterprises.
      • Faculty Development Programme (FDP): A 5-day training for faculty members to enhance their ability to mentor aspiring entrepreneurs effectively.

    PYQ:

    [2010] Two of the schemes launched by the Government of India for Women’s development are Swadhar and Swayam Siddha. As regards the difference between them, consider the following statements:

    1. Swayam Siddha is meant for those in difficult circumstances such as women survivors of natural disasters or terrorism, women prisoners released from jails, mentally challenged women etc., whereas Swadhar is meant for holistic empowerment of women through Self Help Groups.
    2. Swayam Siddha is implemented through Local Self-Government bodies or reputed Voluntary Organizations whereas Swadhar is implemented through the ICDS units set up in the states.

    Which of the statements given above is/are correct?

    (a) 1 only

    (b) 2 only

    (c) Both 1 and 2

    (d) Neither 1 nor 2

     

  • Gold Investments in India Surge by 60% in 2024: World Gold Council Report

    Why in the News?

    According to the World Gold Council, Gold investments in India increased by 60% in 2024, reaching $18 billion (around Rs 1.5 lakh crore), compared to the previous year.

    What are the Key highlights of the Report?

    • The World Gold Council (WGC) was founded in 1987 by leading gold mining companies. Its purpose is to stimulate and sustain demand for gold. 
    • It aims to promote gold as a strategic asset and to advance a responsible, transparent, and accessible gold supply chain. 
    • The WGC has 32 members with mining operations in over 45 countries and is headquartered in London, UK.
    • Best Price Performance Since 2010: Gold recorded its strongest annual price rise since 2010, driven by geopolitical uncertainties and interest rate expectations.
    • Global demand: It grew by 25% whereas investment demand increased by 29% (2023). 
    • Global Supply: It increased by 1% mainly on account of mine production and recycling.  
      • India accounted for 20% of the global gold investment demand, which stood at 1,180 tonnes in 2024.
    • Outlook for 2025: Central banks and Gold Exchange Traded Funds are likely to drive demand.
    • India: RBI added 73 tonnes of gold to its forex reserves, raising gold’s share to a record 11%. 

     

    What are the reasons for the Increase in Gold Demand in India?

    • Cultural Significance: Gold is deeply ingrained in Indian culture, and its purchase is considered auspicious during festivals and weddings. For example, bridal jewelry alone accounts for at least half of the gold jewelry market share in India.
    • Investment and Hedge Against Uncertainty: Gold is seen as a safe haven investment, especially during times of economic and geopolitical instability. For instance, geopolitical tensions, such as the conflict between Israel and Hezbollah, have increased demand for gold as investors seek a safe-haven asset.
    • Inflation Hedge: Gold is considered a hedge against inflation, preserving wealth when the purchasing power of fiat currencies declines. For every 1% increase in inflation, gold demand increases by 2.6%.
    • Central Bank Buying: Central banks, including the Reserve Bank of India (RBI), increase their gold holdings to diversify forex reserves and hedge against external uncertainties. The RBI bought 19 tonnes of gold in the first quarter of 2024, already surpassing the 16 tonnes purchased in all of 2023.
    • Weakening Dollar: When the US dollar weakens, it becomes cheaper for investors holding other currencies to buy gold, increasing demand and driving prices up. A weaker dollar boosts demand, as seen with the US dollar easing by 0.2% and leading to an increase in gold prices.

    What is the present Status of Gold Resources?

    • In November 2024, central banks globally added 53 tonnes to their gold reserves. This indicates a continued recognition of gold as a stable and secure asset, particularly in emerging markets.
    • As of November 2024, the United States holds the largest gold reserves in the world, with 8,133.5 tonnes. India is among the top 10 countries in the world with the highest gold reserves.
    • As of April 1, 2015, India had an estimated 501.83 million tonnes of gold ore reserves. Approximately 17.22 million tonnes were categorized as reserves, with the remainder classified as remaining resources. 
      • The largest reserves of gold ore are located in Bihar (44%), followed by Rajasthan (25%), Karnataka (21%), West Bengal (3%), Andhra Pradesh (3%), and Jharkhand (2%). 
      • The remaining 2% of reserves are distributed among Chhattisgarh, Madhya Pradesh, Kerala, Maharashtra, and Tamil Nadu. 
    • The Geological Survey of India (GSI) is actively involved in geological mapping and mineral exploration to identify potential mineral-rich zones. 
    • To encourage private sector participation, the Indian government has amended the Minerals Evidence of Mineral Contents Rules for the exploration and mining of deep-seated minerals, including gold.

     

    What are the negatives of buying physical gold for the country? 

    • Increases Trade Deficit & Current Account Deficit (CAD): Countries with high gold imports, like India, see a widening trade deficit, as more foreign exchange is spent on gold rather than productive assets. Example: In 2023, India’s gold imports surged to over $43 billion, contributing to a rising CAD (Current Account Deficit) and putting pressure on the rupee.
    • Encourages Smuggling & Black Market Activities: High demand and import duties often lead to illegal gold smuggling, fueling the underground economy. Example: In 2022, 1,000+ kg of gold was smuggled into India, bypassing import duties and causing tax revenue losses for the government.
    • Non-Productive Asset & Storage Risks: Unlike stocks or bonds, gold does not generate income and remains idle in lockers, reducing capital available for economic growth. Example: In Turkey, during economic crises, citizens hoarded gold instead of investing in businesses, slowing economic recovery.

    Way forward: 

    • Promote Gold-Backed Financial Instruments: Encourage investments in Sovereign Gold Bonds (SGBs), Gold ETFs, and Digital Gold to reduce reliance on physical gold while ensuring capital appreciation and interest earnings.
    • Implement Smarter Import Policies & Monetization Schemes: Rationalize import duties to curb smuggling and expand gold monetization schemes to bring idle gold into the formal financial system, boosting liquidity and economic growth.

    Mains PYQ:

    Q Craze for gold in Indian has led to surge in import of gold in recent years and put pressure on balance of payments and external value of rupee. In view of this, examine the merits of Gold Monetization scheme.(UPSC IAS/2015)

  • Diagnostic sector requires Regulations

    Why in the News?

    India has around 3,00,000 diagnostic labs, and the number is increasing. However, the sector is largely unregulated, scattered, and concentrated in urban areas.

    What is the significance of India’s Diagnostics Sector?

    • Market Size and Growth: The Indian diagnostics market was valued at approximately US$13 billion in 2023 and is projected to reach US$25 billion by FY28. It is expected to grow at a CAGR of around 14%. Some projections estimate the market could reach US$40 billion by 2034.
    • Essential Component of Healthcare: Diagnostics play a crucial role in disease prevention, early detection, and effective management, making them an essential part of modern healthcare. Doctor recommendations drive a major part of the diagnostic business, with tests being conducted for most patients before prescribing medication.
    • Key Market Segments: The sector is primarily divided into pathology (60%) and radiology (40%). Pathology is further broken down into illness (acute and chronic) and wellness segments.
    • Drivers of Growth: Several factors contribute to the sector’s growth, including increasing life expectancy, a growing middle class, higher penetration of government insurance schemes, rising income levels, and increasing awareness of preventive testing. An aging population and the rise in chronic diseases also fuel the demand for diagnostic services.

    What are the challenges faced by the Diagnostics Sector?

    • Urban-Rural Divide: A significant portion of diagnostics revenue (76%) comes from urban areas, even though 70% of India’s population resides in rural areas.
    • Disparities in Infrastructure: Rural areas have fewer healthcare facilities, with only about 36.5% of the total hospital beds, leading to delayed treatments and poorer health outcomes
    • Regulatory Issues: The Kerala State Clinical Establishments Act faces resistance due to stringent space (300 sq. ft. in rural areas, 500-700 sq. ft. in urban areas) and educational requirements, making compliance unviable for many small labs.
    • Standardization Needs: Lack of uniform testing protocols leads to errors. Example: A government lab in Karnataka reported a platelet count of 0.47 lakh/cmm, but a private lab retest showed 2.2 lakh/cmm, highlighting the need for mandatory NABL accreditation and standard SOPs to ensure diagnostic accuracy.
    • Infrastructure Gaps in Public Sector: Lack of essential upgrades in government labs (e.g., Osmania and Gandhi Hospitals in Hyderabad). Limited operational hours and unavailability of specialists in government hospitals force patients to private facilities.

    What are the present Regulations implemented by the govt for this Sector?

    • Clinical Establishments Act, 2010: This act aims to regulate diagnostic centers but has been adopted by only 12 states and Union Territories, leading to inconsistent regulations across the country.  
    • Medical Devices Rules, 2017: These rules govern medical devices, an integral part of the diagnostics framework, focusing on manufacturing, import, sale, distribution, and quality and safety control. They provide risk-based categorization, establish product standards, and set timelines for obtaining licenses.
    • State-Specific Regulations: Some states like Karnataka and Kerala have separate regulatory frameworks, but enforcement remains inconsistent. Tamil Nadu’s Clinical Establishments (Regulations) Rules, 2018, mandate minimum space requirements for labs.
    • Pricing Regulations for Government-Led Diagnostic Schemes: Limits test costs to reduce out-of-pocket expenses for patients. Example: Telangana’s T-Diagnostics Programme has conducted 18.10 crore tests at subsidized rates, saving ₹1,100 crore for patients.
    • Mandatory Quality Control & External Audits: Enforces periodic inspections to maintain test accuracy. Example: Karnataka’s KPME Act mandates SOPs for sample collection, testing, and reporting, with penalties for non-compliance.

     

    Way forward: 

    • Expand Rural Diagnostic Infrastructure: Strengthen public-private partnerships (PPPs) to enhance diagnostic services in rural areas, improve affordability, and ensure equitable access through mobile labs and telemedicine integration.
    • Enforce Uniform Regulatory Standards: Implement a nationwide mandatory NABL accreditation and standard operating procedures (SOPs) for all diagnostic centers to ensure quality, accuracy, and compliance across states.

    Mains PYQ:

    Q What do you understand by nanotechnology and how is it helping in health sector? (UPSC IAS/2020)