The Press Information Bureau (PIB) organised a ‘Varta’ workshop on “Creating a Future-Ready Workforce for India’s Creative Economy” in Nagpur.
Key Highlights
India currently contributes ~3% to the global Orange Economy and aims to increase it to 12 to 15% over the next decade.
IICT: Indian Institute of Creative Technology is the National Centre of Excellence for the AVGC-XR sector.
AVGC-XR: Animation, Visual Effects, Gaming, Comics and Extended Reality.
Kaushal Bodh curriculum, developed by IICT in collaboration with NCERT (National Council of Educational Research and Training), will promote creativity and skill development from an early stage.
Proposal to establish AVGC Content Creator Labs in 500 colleges and 15,000 schools.
IICT will offer industry-oriented courses through a Hub-and-Spoke model, extending training beyond Mumbai to regional and semi-urban centres.
Focus on leveraging India’s storytelling tradition and indigenous knowledge systems to strengthen the creative economy.
About Orange Economy
Refers to the creative economy based on creativity, culture, intellectual property, and digital content.
Includes sectors such as animation, films, gaming, music, publishing, design, advertising, media, and digital arts.
[2019] In the context of digital technologies for entertainment, consider the following statements: 1. In Augmented Reality (AR), a simulated environment is created and the physical world is completely shut out. 2. In Virtual Reality (VR), images generated from a computer are projected onto real-life objects or surroundings. 3. AR allows individuals to be present in the world and improves the experience using the camera of smart-phones or PC. 4. VR closes the world, and transposes an individual, providing complete immersion experience. Which of the statements given above is/are correct?
The Ministry of Textiles released a PIB article, “Weaving Sustainability into India’s Textile Future”, highlighting initiatives to promote a circular economy across India’s textile value chain.
Key Highlights
India’s textile sector contributes about 2% of GDP, 11% of manufacturing Gross Value Added (GVA), employs 45 million+ people, and accounts for ~4% of global textile exports.
Over 70% of the 7.8 million tonnes of textile waste generated annually is recovered through recycling, upcycling, downcycling, or reuse.
Circular economy activities support 40 to 45 lakh livelihoods, especially women in collection and sorting.
Major recycling hubs include Panipat (Haryana), Navi Mumbai (Maharashtra), and Mongolpuri (Delhi).
Major Government Initiatives
PM MITRA (Prime Minister Mega Integrated Textile Region and Apparel) Parks with Common Effluent Treatment Plants (CETPs) and sustainable infrastructure.
NPOP (National Programme for Organic Production) for certified organic fibres.
Jute ICARE (Improved Cultivation and Advanced Retting Exercise) for scientific and sustainable jute cultivation.
NTTM (National Technical Textiles Mission) supports conversion of textile waste into advanced materials.
RAMP (Raising and Accelerating MSME Performance) through:
MSE GIFT (Micro and Small Enterprise Green Investment and Financing for Transformation)
MSE SPICE (Micro and Small Enterprise Scheme for Promotion and Investment in Circular Economy)
CCTS (Carbon Credit Trading Scheme) under the ICM (Indian Carbon Market) includes the textile sector.
Eco Mark Scheme, 2024 promotes eco labelled textile products.
Bharat Tex showcases sustainable and circular textile innovations.
Significance
Promotes resource efficiency, recycling, and green manufacturing.
Reduces waste, water use, energy consumption, and hazardous chemicals.
Enhances export competitiveness and supports India’s climate goals.
Creates green jobs and strengthens the circular economy.
[2025] Consider the following statements: Statement I: Circular economy reduces the emissions of greenhouse gases. Statement II: Circular economy reduces the use of raw materials as inputs. Statement III : Circular economy reduces wastage in the production process. Which one of the following is correct in respect of the above statements?
[A] Both Statement II and Statement III are correct and both of them explain Statement I
[B] Both Statement II and Statement III are correct but only one of them explains Statement I
[C] Only one of the Statements II and III is correct and that explains Statement I
[D] Neither Statement II nor Statement III is correct
LIC’s March 2025 regulatory filings and RBI/IRDAI data confirm that life insurers collectively hold close to a quarter of India’s outstanding central government dated securities, a share that has remained stable even as total sovereign debt expanded by around 40 per cent in three years. This scale of sovereign financing has never featured in budget speeches or parliamentary debate, even as three regulatory interventions between 2023 and 2024 compressed new insurance business and, with it, the household savings pipeline that feeds this funding base.
Why do life insurers function as a stable, counter-cyclical source of financing for government debt?
Long-duration liability match: Life insurance policies carry tenures of twenty to forty years. Government securities are the only asset class that absorbs funds of this scale at matching tenures without distorting the market.
Counter-cyclical behaviour: Insurers buy and hold securities. They do not exit when oil prices rise or when a geopolitical event triggers reassessment of emerging-market exposure, unlike foreign portfolio investors (FPIs).
Reduced rollover risk: A steady domestic base of long-horizon holders lowers the risk that maturing government debt cannot be refinanced on favourable terms.
Lower borrowing costs: Stable demand across the maturity spectrum moderates the government’s overall cost of borrowing.
Structural, not discretionary: This behaviour is not a policy choice. It is the structural consequence of insurers writing long-duration promises to millions of policyholders.
How large and entrenched is LIC’s role as a financier of the sovereign?
Sector concentration: LIC carries the dominant share of the insurance sector’s sovereign exposure, a consequence of its scale, its predominantly participating product mix, and the duration of its in-force book.
Regulatory filing confirmation: LIC’s Form L-26 filing with IRDAI (March 2025) shows sovereign paper accounts for nearly 63 per cent of its non-linked policyholder corpus, well above the regulatory minimum.
Absolute scale: LIC’s March 2025 IRDAI filings show ₹20.2 lakh crore held in central government securities alone, and ₹32.3 lakh crore in total government and government-guaranteed securities across all funds.
Single largest holder: These figures make LIC the single largest institutional holder of Indian government debt. LIC holds approximately 19 per cent of all outstanding central government dated securities (RBI Public Debt Management Quarterly Report, FY24).
Official systemic recognition: IRDAI designates LIC a Domestic Systemically Important Insurer (D-SII) every year, meaning its distress would cause significant dislocation in the financial system.
Private insurers’ limited but rising role: Private insurers, with a higher share of unit-linked and shorter-tenure products, contribute a smaller fraction of sovereign holdings today. Their sovereign allocation will rise as they deepen traditional, longer-duration offerings.
Does global practice confirm that insurers hold sovereign debt because of liability structure rather than regulatory mandate?
Japan: Japanese insurers are cited among the largest holders of the government’s long-dated securities. The source gives no institution-level detail.
United Kingdom: UK insurers are similarly cited as large holders of long-dated government securities. No institutional specifics are given.
South Korea: South Korean insurers are cited as large holders of long-dated sovereign debt. No further detail is provided.
Claimed common driver: The source attributes this pattern across all three jurisdictions to liability-profile demand rather than regulatory mandate, and states India’s insurance sector is following the same path.
Why could recent regulatory actions on the insurance sector pose a longer-term risk to the sovereign borrowing programme?
Declining penetration: India’s life insurance penetration stood at 2.7 per cent of GDP in FY25, a third consecutive annual decline from a pandemic-era peak of 3.2 per cent, and below the global life insurance average of 3.0 per cent.
Three simultaneous interventions: Between 2023 and 2024, regulators restructured distribution economics, imposed taxation on certain high-value policies, and mandated product repricing.
Cumulative effect exceeded individual impact: Each intervention was defensible in isolation. Their simultaneous effect compressed new business across the sector.
Sector currently recovering: New business has begun recovering after this compression episode.
Deferred risk to sovereign funding: Compression of new business diverts household savings away from insurance-linked government debt purchases toward shorter-duration instruments elsewhere.
Lagged visibility: This effect on the sovereign borrowing programme may not be visible in the short term. It would surface over a decade.
Why has insurance’s role as a sovereign financier remained absent from public policy discourse despite its scale?
Asymmetric policy attention: Banking receives policy attention in proportion to its systemic importance. Insurance, holding close to a quarter of outstanding central government dated securities, does not receive comparable attention.
Discourse framed only around households: The case for deeper insurance penetration is made almost entirely in the language of household financial protection — the uninsured family, inadequate sum assured, mis-selling, or unsettled claims.
Missing fiscal-stability framing: A parallel case, framed in the language of sovereign fiscal stability, has not been fully articulated in public policy discourse.
Consequence for regulatory design: Regulatory interventions aimed narrowly at consumer protection did not account for their cumulative effect on the sovereign funding base.
Conclusion
Life insurers, led by LIC, function as India’s most stable institutional financiers of government debt, holding close to a quarter of outstanding central government securities through structurally long-duration, counter-cyclical demand. This sovereign-financing function has never entered public policy discourse, which frames insurance regulation almost exclusively around household protection. Regulatory interventions between 2023 and 2024 that compressed new insurance business exposed this gap, since their cumulative fiscal-stability cost went unweighed at the time. Insurance regulation must begin accounting for its sovereign-funding dimension alongside consumer protection, or the effect will surface only years later as higher government borrowing costs.
PYQ Relevance
[UPSC 2019] The public expenditure management is a challenge to the Government of India in the context of budget making during the post-liberalization period. Clarify it.
Linkage: The PYQ examines fiscal management and financing of government expenditure. The article shows that India’s life insurance sector acts as a major domestic financier of government borrowing by channelising long-term household savings into government securities, thereby strengthening fiscal stability and reducing dependence on volatile capital flows.
The Ministry of Statistics and Programme Implementation (MoSPI) released the report of the Technical Advisory Committee (TAC) on compiling the Index of Services Production (ISP) with base year 2024-25. The trial ISP series will be released on 14 July 2026.
Key Highlights
ISP will be India’s first monthly indicator to measure short-term performance of the services sector.
Services contribute about 53% of India’s Gross Value Added (GVA).
It will complement the Index of Industrial Production (IIP).
Data Sources
GST aggregated data for market-based services.
Administrative data from Railways, Aviation, Banking and Insurance.
ASISSE data for Health and Education.
Technical Features
Base Year: 2024-25
Index Type: Laspeyres Volume Index
Classification: 2-digit NIC 2025
Weights: Gross Value Added (GVA)
Release: Monthly, within 60 days of the reference month.
Significance
Provides a high-frequency indicator for the services sector.
Improves economic policymaking and monitoring.
Enhances India’s statistical system using GST-based data.
[2020] With reference to the international trade of India at present, which of the following statements is/are correct?
1. India’s merchandise exports are less than its merchandise imports. 2.India’s imports of iron and steel, chemicals, fertilisers and machinery have decreased in recent years. 3.India’s exports of services are more than its imports of services. 4.India suffers from an overall trade/current account deficit. Select the correct answer using the code given below: a) 1 and 2 only b) 2 and 4 only c) 3 only d) 1, 3 and 4 only
Union Minister of Commerce, at a London business conference, accused global sovereign credit rating agencies of being “unfair to India” while praising India-headquartered CareEdge Ratings as “objective.” The remark reopens a standing government charge that international agencies keep India’s rating just above junk grade by over-weighting subjective, opinion-based judgments of “willingness to repay” over India’s stronger, verifiable “ability to repay” data.
What are sovereign credit ratings?
A sovereign credit rating is an independent evaluation of a country’s creditworthiness.
It measures a government’s ability and willingness to repay its debt obligations, helping global investors assess the risk of investing in that nation’s bonds or lending it money.
Working: Ratings are assigned by independent credit rating agencies, most notably Standard & Poor’s (S&P), Moody’s, and Fitch Ratings.
High Ratings (e.g., AAA, Aaa): Signal strong economic stability, low risk of default, and allow the government to borrow money at lower interest rates.
Low Ratings (e.g., BB+, Ba1): Indicate higher credit risk and are typically labeled as “speculative” or “junk” grade, forcing the country to pay higher interest to compensate investors for the increased risk.
How do rating agencies define and measure sovereign creditworthiness?
Rating universe: India is rated by seven international sovereign credit rating agencies, S&P, Moody’s, Morningstar DBRS, Fitch, Japanese Credit Rating Agency (JCRA), Rating and Investment Information (R&I), and CareEdge Ratings. The three most widely accepted globally are S&P, Fitch, and Moody’s.
Rated entities: The same alphabet-scale logic applies not only to sovereigns but to companies, municipal corporations, and state governments.
Scale mechanics: Fitch and S&P run from AAA downward through AA+, AA, AA-, A+, A, A- into the B-grade band, ending at D for default. Moody’s follows an identical structure using different letters, starting at Aaa.
Price-of-risk function: The rating fixes the interest rate at which an entity can borrow. AAA signals zero default risk and the lowest borrowing cost; each downward notch raises the rate to compensate lenders for higher perceived risk.
The dual metric: Ability to repay is quantitative, drawn from hard, verifiable macroeconomic data. Willingness to repay is qualitative, resting on an agency’s opinion of intent rather than capacity. This distinction structures India’s later grievance against the agencies.
What has India’s rating trajectory looked like?
Persistent floor: Across most agencies, India has stayed at the lowest rung of investment grade, a grade or two above junk status, the threshold at which institutions stop lending for fear of default.
Long stagnation: Until recently, this rating stayed unchanged for more than a decade, and in some cases for nearly two decades.
S&P upgrade: S&P raised India’s long-term sovereign rating to BBB from BBB- in August 2025, its first upgrade of India in 18 years.
Moody’s upgrade: Moody’s raised India to Baa2 (equivalent to BBB) from Baa3 in 2017, its first upgrade of India in 13 years.
Other 2025 movements: R&I upgraded India to BBB+ from BBB in September 2025; Morningstar DBRS upgraded India to BBB in May 2025.
Why does the government call the ratings agencies’ methodology unfair to India?
Persisting grievance despite upgrades: Even after the 2025 upgrades, India’s rating remains just above junk grade. India argues that agencies have not credited India’s growth story, its fundamentals, or its sovereign capabilities as a rating agency should.
Official continuity: The Finance Minister of India has separately called for reform of the agencies’ methodologies, establishing this as a standing government position rather than a one-off remark.
Economic Survey precedent: The 2020-21 Economic Survey devoted a full chapter to the issue. It noted this was the first time the world’s fifth-largest economy had been assigned such a low rating.
Ability case made: The Survey argued India’s macroeconomic fundamentals were strong enough to demonstrate ability to repay debt.
Willingness case made: It also argued India’s record of never defaulting on sovereign debt despite multiple crises should establish willingness to repay.
Core allegation: The central charge is that agencies weigh the qualitative willingness metric (grounded in the opinions of a small group of experts and prone to subjectivity) more heavily than the quantitative ability metric, on which India performs comparatively well but which carries lower weightage.
Why is CareEdge Ratings being held up as the corrective model?
Origin and perception: CareEdge is the first sovereign ratings agency headquartered in India, feeding the perception that it can better capture the ground realities of the Indian economy.
Methodological difference: CareEdge’s own methodology note assigns primary importance to quantitative factors, directly inverting the qualitative-heavy approach India accuses the major agencies of using.
Political endorsement: Goyal singling out CareEdge as “objective” aligns with the government’s broader argument that a quantitative-first method would rate India more favourably.
Conclusion
India’s persistently sub-BBB sovereign rating, despite improving fundamentals, stems from ratings agencies’ structural preference for qualitative, opinion-driven assessments of willingness to repay over quantitative measures of ability to repay. This is a metric on which India performs well. The government’s promotion of CareEdge Ratings, a domestic agency that weights quantitative factors more heavily, functions less as a technical fix than as an assertion that India deserves to be rated on its own terms. This does not resolve who sets the criteria for creditworthiness: India’s grievance can only be addressed if the major agencies alter their own weighting, a decision outside New Delhi’s control. Until then, India’s rating will likely continue to lag its economic weight.
PYQ Relevance
[UPSC 2017] Among several factors for India’s potential growth, the savings rate is the most effective one. Do you agree? What are the other factors available for growth potential?
Linkage: Sovereign credit ratings directly influence investment flows and borrowing costs, which affect capital formation and India’s long-term growth potential. The article argues that global rating agencies undervalue India’s macroeconomic strengths and growth prospects, thereby increasing borrowing costs despite strong economic fundamentals.
India completed 9 years of GST on 1 July 2026. The government highlighted the impact of GST 2.0 (2025 reforms) in simplifying taxation and improving compliance.
GST at a Glance
Introduced on 1 July 2017 under the 101st Constitutional Amendment Act, 2016.
Destination based tax on the supply of goods and services.
Replaced 17 taxes and 13 cesses under the One Nation, One Tax framework.
Constitutional Provisions
Article 246A: Power to levy GST.
Article 269A: IGST on inter-State supplies.
Article 279A: GST Council.
GST Council
Constitutional body promoting cooperative federalism.
Chaired by the Union Finance Minister.
Recommends tax rates, exemptions and GST policies.
GST 2.0 (2025)
Simplified rate structure with 5% and 18% as primary slabs.
40% GST on luxury and sin goods.
Faster registration, refunds and simplified return filing.
MSME Support
Registration threshold increased to ₹40 lakh.
Composition Scheme limit raised to ₹1.5 crore.
QRMP Scheme for taxpayers with turnover up to ₹5 crore.
[2017] What is/are the most likely advantages of implementing ‘Goods and Services Tax (GST)’? 1. It will replace multiple taxes collected by multiple authorities and will thus create a single market in India. 2. It will drastically reduce the ‘Current Account Deficit’ of India and will enable it to increase its foreign exchange reserves. 3. It will enormously increase the growth and size of economy of India and will enable it to overtake China in the near future. Select the correct answer using the code given below:
