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GS Paper: GS3

  • NPS Equity Exposure Increased to 25% by FY27

    Why in the News?

    The Chairperson of the Pension Fund Regulatory and Development Authority announced that the National Pension System (NPS) will raise its equity exposure to 25 percent by FY2027, and that pension funds may begin investing in Alternative Investment Funds (AIFs) by March 2026.

    About the National Pension System

    • Launched in 2004 for government employees and extended to all citizens in 2009
    • Regulated by PFRDA
    • Defined contribution pension scheme
    • Market-linked returns
    • Two types:
      • Tier I: Mandatory retirement account
      • Tier II: Voluntary savings account

    Key Announcements

    • Increase in Equity Exposure

      • Equity cap in the Government Composite Scheme raised from 15 percent to 25 percent
      • Current equity exposure around 19 percent
      • Corporate bond exposure has reduced slightly
      • G Sec share remains largely stable
      • Objective: Improve long term returns while maintaining prudent risk levels.
      • Investment in AIFs: NPS to allow exposure to Alternative Investment Funds (AIFs) by March 2026

    • MARS Committee

      • PFRDA has constituted the Minimum Assured Return Scheme (MARS) committee
      • Exploring a pension product offering a guaranteed minimum return
    [2017] Who among the following can join the National Pension System (NPS)? (a) Resident Indian citizens only 

    (b) Persons of age from 21 to 55 only 

    (c) All State Government employees joining the services after the date of notification by the respective State Governments 

    (d) All Central Government Employees including those of Armed Forces joining the services on or after 1st April, 2004

  • [13th February 2026] The Hindu OpED: Farmers’ pulse: On India and its demand for pulses

    PYQ Relevance

    [UPSC 2017] Mention the advantages of the cultivation of pulses because of which the year 2016 was declared as the International year of Pulses by the United Nations.

    Linkage: It links to the pulses debate as it highlights their nutritional, ecological, and income-support role, strengthening arguments for procurement reform and crop diversification.

    Mentor’s Comment

    Pulses policy reflects a structural tension between consumer price stabilization and farmer income security. Weak procurement architecture, import dependence, and trade commitments intersect with federal politics and food security imperatives.

    Why in the News?

    India’s pulses policy is back in focus after reports of possible import commitments under a trade deal with the United States. This appears to clash with the government’s Mission for Aatmanirbharta in Pulses, raising fresh concerns among farmers about the gap between self-reliance goals and trade decisions.

    Why Are Pulses Crucial to India’s Food and Farm Economy?

    1. Protein Dependence: Pulses supply nearly 25% of non-cereal protein intake.
    2. Livelihood Base: Around five crore farmers depend on pulse cultivation.
    3. Persistent Demand Gap: Production ~2.5 crore tonnes; demand ~3 crore tonnes; imports fill deficit.
    4. Food Security Linkage: Dependence on imports exposes vulnerability to global price fluctuations.

    How Do Imports Create Immediate Market Distortions?

    1. Centralized Decision Impact: A single central decision to import can immediately lower domestic prices.
    2. Household Spending Relief: Imports reduce consumer expenditure when supply is tight.
    3. Farmer Income Shock: Price depression directly hurts domestic producers.
    4. Market Absorption Constraint: Domestic markets cannot always absorb “extra” supply, worsening price collapse.
    5. Political Sensitivity: Trade commitments perceived as favouring foreign producers revive post-2020 protest anxieties.

    Why Is the Procurement Regime Considered Structurally Weak?

    1. Limited Coverage: Procurement under the Price Support Scheme ranged between 2.9%-12.4% (2019-24).
    2. MSP Without Guarantee: Absence of reliable procurement undermines MSP credibility compared to rice and wheat.
    3. Organised Neglect: Weak procurement mechanisms, cereal bias, and institutional design collectively marginalize pulses.
    4. Distress Sales: Inadequate procurement centres force farmers to sell below MSP to private traders.
    5. Investment Disincentive: Uncertain returns discourage productivity-enhancing investments.

    What Structural Constraints Affect Pulse Cultivation?

    1. Rain-fed Cultivation: Pulses largely grown in rain-fed regions, increasing climate risk.
    2. Lower Yields: Productivity remains below international competitors.
    3. Underinvestment Cycle: Weak price assurance leads to low investment, perpetuating low yields.

    What Does the Mission for Aatmanirbharta in Pulses Seek to Achieve?

    1. Financial Allocation: ₹11,440 crore outlay.
    2. Area Expansion: Target of 310 lakh hectares.
    3. Production Goal: 350 lakh tonnes by 2030-31.
    4. Strategic Objective: Reduce import dependence and achieve self-sufficiency.
    5. Credibility Challenge: Past unfulfilled promises create farmer scepticism.
    6. Policy Contradiction Risk: Import commitments contradict mission objectives.

    Why Does This Issue Trigger Political Sensitivity?

    1. Farm Protest Context: Post 2020-21 protests, trade and agri-reform decisions face scrutiny.
    2. Federal Dimension: Central trade decisions affect state-level agriculture.
    3. Trust Deficit: Perception of favouring foreign producers undermines domestic policy legitimacy.
    4. Food Security Vulnerability: Continued import dependence sustains long-term strategic risk.

    Way Forward

    1. Stronger Procurement: Expand procurement centres in pulse-growing areas to ensure MSP reaches farmers and reduce distress sales.
    2. MSP Credibility: Ensure timely and predictable procurement to build farmer confidence and encourage investment.
    3. Stable Import Policy: Align imports with domestic production cycles to prevent sudden price crashes.
    4. Higher Productivity: Promote improved seeds, irrigation support, and climate-resilient varieties to raise yields.
    5. Crop Diversification: Reduce policy bias toward rice and wheat and incentivise pulses through procurement and subsidies.

    Conclusion

    Pulses policy reflects the tension between consumer price stability and farmer income security. Import dependence without strong procurement weakens domestic incentives and deepens vulnerability. Long-term food security requires credible MSP implementation, higher productivity, and a trade policy aligned with self-reliance goals.

  • The hidden cost of insurance distribution

    Why in the News?

    India’s life insurance industry paid ₹60,799 crore in commissions in FY2025, yet premium growth stood at only 6.7% while commission payouts increased by 18%. This divergence signals a structural imbalance between distribution costs and value creation. The Life Insurance Corporation (LIC) reduced its commission ratio from 5.45% to 5.17% despite premium growth of 2.8%, whereas private insurers increased commission ratios sharply to 7.21%-8.95%, leading to a 38.8% surge in commission payouts to ₹35,491 crore. Insurance penetration declined from 4% of GDP in FY2020 to 3.7% in FY2024. The issue marks a shift from episodic compliance concerns to a structural distribution faultline affecting financial stability and consumer welfare.

    Public-Private Structure of India’s Insurance Sector

    1. Life Insurance Composition: LIC, the sole public-sector life insurer, contributes 57.07% of total new business premiums (FY2024-25). The sector comprises 27 life insurers, including 26 private companies.
    2. General (Non-Life) Market Distribution: Private insurers hold approximately 64-66% market share, while Public Sector General Insurance Companies (PSGICs) account for 31-32%. The industry includes 34 non-life insurers, 6 public and 28 private (including standalone health and specialised insurers).
    3. Health Segment Significance: Health insurance constitutes 41.42% of gross direct premiums in FY2024-25, emerging as the largest non-life segment. Public sector general insurers’ premiums increased from ₹80,000 crore (2019) to approximately ₹1.06 lakh crore (early 2025).

    What Is the Structural Difference Between Public and Private Insurers?

    1. Channel Composition: LIC derives 95% of business from agency channels, enabling tighter commission control.
      1. Agency channels are individual agents appointed by an insurance company to sell its policies directly to customers.
    2. Commission Ratio Reduction: LIC reduced commission ratio from 5.45% to 5.17% despite 2.8% premium growth.
    3. Alternate Channel Dependence: Private insurers rely heavily on bancassurance, brokers, and marketing firms.
      1. Bancassurance is a distribution model where banks sell insurance products to their existing customers.
    4. Sharp Commission Escalation: Private commission ratios rose from 7.21% to 8.95% (174 basis points increase).
    5. Commission Outgo Surge: Private insurer commission payouts increased 38.8% to ₹35,491 crore from ₹25,564 crore.

    Why Does Distribution Cost Escalation Reflect Structural Market Imbalance?

    1. Bargaining Concentration: Twenty-six life insurers compete for access to banks operating over 4,00,000 branches, strengthening distributor leverage.
    2. High Switching Power: Banks and brokers control infrastructure and customer base, increasing negotiation power over insurers.
    3. Channel Dependence: Greater reliance on alternate channels directly increases commission payouts.
    4. Incentive Distortion: Competitive pressures push insurers to offer higher commissions to secure partnerships.
    5. Persistent Pattern: Rising commission ratios despite regulatory changes indicate systemic, not temporary, escalation.

    How Effective Have Regulatory Reforms Been?

    1. Product-Wise Caps: IRDAI introduced product-level commission ceilings to contain rising distribution payouts.
    2. Expense of Management (EOM) Consolidation: The regulatory framework later shifted to a unified Expense of Management structure, embedding commissions within overall expense limits.
    3. Competitive Structuring: Marketing tie-ups, infrastructure arrangements, and distribution negotiations limited the restraining effect of reforms.
    4. Structural Persistence: Commission escalation continued despite regulatory redesign, indicating unchanged bargaining asymmetry.

    What Changed in Expense of Management (EOM) Norms?

    1. Unified EOM Framework: 2023-24 reform merged management, acquisition, and commission expenses.
    2. Embedded Leverage: Commission expenses remained embedded within overall expense limits.
    3. Institutional Assertiveness: Institutions with bargaining power demanded higher payouts.
    4. Agent Retention Share: Agents retain approximately 35-40% of headline commissions after overrides and deductions.
    5. Concentration of Gains: Nearly ₹26,000 crore in FY2025 accrued to corporate intermediaries and large marketing firms.

    What Are the Consumer and Macroeconomic Implications?

    1. Limited Consumer Benefit: High distribution costs do not proportionately enhance policyholder value.
    2. Low Visibility Incentives: Informal rebates push transactions outside regulatory transparency.
    3. Penetration Decline: Insurance penetration declined from 4% (FY2020) to 3.7% (FY2024).
    4. Middle-Income Impact: High costs restrict sustainable inclusion for middle-income households.
    5. Financial Stability Concern: RBI flagged distribution cost sustainability concerns in the Financial Stability Report (December 2025).

    What Policy Correction Is Proposed?

    1. Outcome-Based Regulation: Focus on retention, service quality, and claim settlement ratios.
    2. Joint Oversight: IRDAI and RBI coordination on bancassurance governance.
    3. Commission Rebalancing: Shift from upfront commissions toward renewal-based income streams.
    4. Incentive Redesign: Align commissions with persistence and servicing metrics.
    5. Rational Cost Containment: Ensure sustainable penetration expansion.

    Conclusion

    Rising distribution costs signal a structural imbalance in India’s insurance ecosystem rather than a temporary market distortion. Regulatory recalibration under the amended IRDAI framework must prioritise cost efficiency, persistence-based incentives, and balanced public-private participation. Sustainable insurance penetration depends on correcting bargaining asymmetries while safeguarding financial stability and consumer interest.

    Value Addition

    Insurance Density 

    Key Figures & Trends: 

    1. Recent Density: Around $97 per person for 2024-25.
    2. Life Density: Increased to $72 in 2024-25.
    3. Non-Life Density: Stable at $25 in 2024-25.
    4. Growth: Gradual, steady increase observed since 2016-17.
    5. Comparison with Global Averages (Approximate):  India’s density ($97) is a fraction of the global average (around $874 in 2021-22).

    Insurance penetration 

    1. It in India stood at approximately 3.7% in FY25, remaining relatively stagnant and well below the global average of 7.3%. 
    2. Life insurance penetration dipped to 2.7%, while non-life insurance remained flat at 1.0%.

    PYQ Relevance

    [UPSC 2013] The product diversification of financial institutions and insurance companies, resulting in overlapping of products and services strengthens the case for the merger of the two regulatory agencies, namely SEBI and IRDA. Justify.

    Linkage: Recent amendments to the Insurance Regulatory and Development Authority Act have renewed focus on insurance sector reforms, making regulatory architecture and governance in insurance a high-priority area for GS II and GS III. The article’s discussion on distribution costs and bargaining asymmetry highlights why regulatory design under the revised IRDAI framework remains central to sectoral stability.

  • DAC Grants AoN Worth ₹3.6 Lakh Crore for Rafale, P-8I and Major Defence Modernisation Push

    Why in the News?

    The Defence Acquisition Council chaired by Rajnath Singh has granted Acceptance of Necessity for defence procurement proposals worth about ₹3.6 lakh crore, including 114 Rafale fighter jets and six P-8I aircraft.

    About Defence Acquisition Council

    • Apex decision making body for capital procurement in the Ministry of Defence after the Kargil War of 1999.
    • Headed by the Defence Minister
    • Grants Acceptance of Necessity, which is the first formal step in defence procurement
    • Functions under the framework of the Defence Acquisition Procedure 2020

    Composition 

    • The council is chaired by the Defence Minister (Raksha Mantri). Key members include the Chief of Defence Staff, the three Service Chiefs (Army, Navy, Air Force), and the Defence Secretary, with the Deputy Chief of Defence Staff (Planning & Procurement) as Member Secretary.

    Key Points: Recent procurement proposals: 

    • Acceptance of Necessity (AoN): First stage of capital procurement approval under Defence Acquisition Procedure 2020.
    • Indian Air Force: 114 Rafale Multi Role Fighter Aircraft, combat missiles, and High Altitude Pseudo Satellite for ISR and ELINT roles.
    • Indian Navy: Six P-8I long range maritime reconnaissance aircraft for anti submarine warfare and maritime strike capability.
    • Indian Army: Procurement of Vibhav anti tank mines and overhaul of T-72, BMP II and armoured recovery vehicles.
    [2024] Consider the following aircraft: 1. Rafael 

    2. MiG-29 

    3. Tejas MK-1 

    How many of the above are considered fifth generation fighter aircraft? 

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

  • New CPI Inflation Series (Base Year 2024): Food Weight Reduced to 37%

    Why in the news?

    India’s new Consumer Price Index (CPI) series with base year 2024 will reduce the weight of food and beverages from 45.86% to 36.75%, aligning the inflation basket with updated household consumption patterns from the 2023–24 Household Consumption Expenditure Survey (HCES).

    What is CPI?

    The Consumer Price Index (CPI) measures retail inflation by tracking changes in prices of goods and services consumed by households.

    It is:

    • The headline inflation measure in India
    • Used by the Reserve Bank of India for monetary policy
    • Based on periodic base year revision to reflect current consumption patterns

    Key Changes in the New CPI Series

    • Food Weight Reduced
      • From 45.86% → 36.75%
      • Reflects decline in food expenditure share
      • Based on Engel’s Law: As income rises, share of food expenditure falls
    • HCES Findings:
      • Rural food share: 52.9% (2011–12) → 47.04% (2023–24)
      • Urban food share: 42.62% → 39.68%
    • Housing Weight Increased
      • From 10.07% → 17.66%
      • Now includes: Water, Electricity, Gas and Other fuels
      • Methodological change: Employer provided accommodation excluded
      • This may exert upward pressure on inflation.
    • Basket Expansion
      • Items increased from 299 → 358
      • Reclassification of categories
      • Linking factor to be released for back series comparison

    Why Was High Food Weight a Concern?

    • Food inflation is often supply driven.
    • Monetary policy cannot control vegetable or cereal supply in short run.
    • High food weight caused:
      • Excess volatility in headline inflation
      • Constraints on repo rate decisions

    Example:

    • October 2025 CPI: 0.25%
    • Food inflation: (-)5.02%
    • Food price fall dragged headline inflation sharply lower

    Implications for RBI

    • The RBI follows Flexible Inflation Targeting (FIT):
      • Target: 4%
      • Tolerance band: 2–6%
      • Mandated under RBI Act amendment (2016)
    • Lower food weight may:
      • Reduce volatility
      • Give clearer signal of core inflation
      • Improve monetary policy transmission
      • However, higher housing weight may increase measured inflation.
    [2020] Consider the following statements: 1. The weightage of food in Consumer Price Index (CPI) is higher than that of Wholesale Price Index (WPI). 

    2. The WPI does not capture changes in the prices of services, which CPI does. 

    3. Reserve Bank of India has now adopted WPI as its key measure of inflation and to decide on changing the key policy rates. 

    Which of the statements given above is/are correct? 

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

  • Supreme Court Stays Haryana’s Aravalli Zoo Safari Project

    Why in the news?

    • The Supreme Court of India has refused to allow the Haryana government to proceed with its proposed Aravalli Zoo Safari Project until the definition of the “Aravalli Range” is scientifically clarified by experts.
    • The Court observed that no one will be allowed to “touch the Aravallis” until the matter is conclusively settled.

    About the Aravalli Range

    • One of the oldest fold mountain ranges in the world
    • Extends across Gujarat, Rajasthan, Haryana and Delhi
    • Acts as:
      • Natural barrier against desertification from the Thar Desert
      • Groundwater recharge zone
      • Biodiversity hotspot
      • Climate regulator for North India

    What is the Zoo Safari Project?

    • Proposed by Haryana Government
    • Initially planned over 10,000 acres, later reduced to 3,300 acres
    • Envisioned as the world’s largest zoo safari
    • Includes:
      • Big cat zones
      • Enclosures for birds, reptiles and butterflies
    • Located in Gurgaon and Nuh districts
    • Petitioners, including retired Indian Forest Service officers and NGO “People for Aravallis”, argued that the project could further degrade the ecologically fragile region.
    [2012] When you travel in Himalayas, you will see the following: 1. Deep gorges 

    2. U-turn river courses 

    3. Parallel mountain ranges 

    4. Steep gradients causing land sliding 

    Which of the above can be said to be the evidence for Himalayas being young fold mountains? 

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

  • [12th Februrary 2026] The Hindu OpED: The CPI base revision exercise measures a slice of life

    PYQ Relevance[UPSC 2023] Most of the unemployment in India is structural in nature. Examine the methodology adopted to compute unemployment in the country and suggest improvements. Linkage: Unemployment and inflation are core GS-3 macro indicators influencing growth and monetary policy. Just as CPI base revision affects inflation measurement, unemployment estimates depend on survey methodology (PLFS), shaping policy credibility and reform design.

    Why in the News?

    The Ministry of Statistics and Programme Implementation (MoSPI) has decided a comprehensive exercise for revision of the base year of Gross Domestic Product (GDP), Index of Industrial Production (IIP) and Consumer Price Index (CPI) to enhance their relevance, accuracy and international comparability. The proposed new base year for the GDP and IIP is 2022-23, and for CPI the proposed base year is 2024. The revision of CPI will be done using findings from the latest Household Consumption Expenditure Survey (HCES). The revision recalibrates expenditure weights to reflect structural shifts in consumption patterns over the past decade. Since CPI is the anchor for inflation targeting and monetary policy, changes in its composition directly influence measured inflation and policy response. The exercise also gains significance after gaps in consumption data, making representativeness and credibility central concerns.

    What is CPI and Why is it Important?

    Consumer Price Index (CPI) measures the average change over time in the retail prices of a fixed basket of goods and services consumed by households. It reflects retail inflation and serves as the nominal anchor under India’s inflation targeting framework.

    1. Retail Inflation Measure: Tracks price changes at the consumer level across goods and services.
    2. Inflation Target Anchor: Forms the basis of RBI’s flexible inflation targeting framework.
    3. Cost-of-Living Indicator: Reflects purchasing power of households.
    4. Policy Benchmark: Guides interest rate decisions, wage revisions and welfare indexation.
    5. Macroeconomic Signal: Influences investor expectations and economic outlook.

    Why Was Base Year Revision Necessary?

    1. Outdated Consumption Weights: 2012 basket no longer reflects current spending behaviour.
    2. Structural Economic Shift: Expansion of services sector and urbanisation since 2012.
    3. Consumption Diversification: Rising share of telecom, transport and service expenditures.
    4. Reduced Food Share: Relative decline in food and clothing weight in total expenditure.
    5. Data Discontinuity Concern: Delay in updated consumption data affected representativeness.

    How Does the CPI Basket Reflect Structural Changes in Society?

    1. Shift from Goods to Services: Higher expenditure on communication, transport and service-based consumption.
    2. Urbanisation Impact: Changing food habits, mobility patterns and housing expenditure.
    3. Changing Aspirations: Rising discretionary spending relative to subsistence consumption.
    4. Technology Integration: Inclusion of modern consumption categories such as telecom services.
    5. Rural-Urban Convergence: Updated survey captures evolving rural consumption patterns.
    6. Declining Engel Ratio: Reduced proportional spending on food indicates income progression.

    What Are the Macroeconomic Implications of CPI Base Year Revision?

    1. Inflation Recalibration: Weight changes can alter headline and core inflation trends.
    2. Monetary Policy Adjustment: RBI policy stance depends on CPI trajectory.
    3. Real Interest Rate Impact: Changes in measured inflation affect real returns.
    4. Fiscal Planning Effect: Influences subsidy indexation and welfare transfers.
    5. Market Signalling: Alters inflation expectations in financial markets.
    6. Credibility Enhancement: Strengthens confidence in official inflation statistics.

    Conclusion

    CPI base revision updates inflation measurement to reflect contemporary consumption patterns. It strengthens accuracy, improves macroeconomic signalling and supports effective monetary policy.

  • Taxpayer base more than doubled in the last decade

    Why in the News?

    India’s direct tax system has recorded sustained expansion in both individual and non-individual taxpayers. India’s taxpayer base has more than doubled over the last decade, with individual taxpayers rising from 3.26 crore in AY2013-14 to nearly 7.26 crore in AY2024-25, while the total base expanded to about 4.8 crore. Simultaneously, the cost of collecting direct taxes declined to 0.41% in FY2024-25 (provisional), the lowest in available data.The increase reflects administrative reforms, digitalisation of filing systems, and structural strengthening of compliance mechanisms.

    What is the scale of expansion in the taxpayer base?

    1. Individual taxpayers: Increased from 3.26 crore (AY2013-14) to nearly 7.26 crore (AY2024-25), more than doubling in a decade.
    2. Total taxpayer base: Expanded from about 2.9 crore in AY2013-14 to nearly 4.8 crore in AY2024-25.
    3. Growth rate: Registered a CAGR of approximately 5% over the period.
    4. Peak annual growth: 7.89% CAGR observed during the period.
    5. Pandemic disruption: Growth slowed sharply in FY2020-21 due to COVID-19-related economic disruption.
    6. Recovery phase: Growth rebounded in subsequent years, indicating durability of expansion.

    How has the composition of taxpayers evolved?

    1. Dominance of individuals: Individual taxpayers continue to dominate the system.
    2. Non-individual taxpayers: Includes firms, companies, LLPs, Association of Persons (AOPs), Body of Individuals (BOIs), local authorities, and artificial juridical persons.
    3. Steady growth in non-individuals: Growth remained more stable compared to individuals, without major pandemic volatility.
    4. Broader base expansion: Evidence suggests increasing formalisation across business entities.

    What institutional changes supported this expansion?

    1. Digital filing systems: Increased reliance on online return filing.
    2. Pre-filled returns: Reduced compliance burden and errors.
    3. Expanded third-party reporting: Strengthened information matching.
    4. Reduced face-to-face interactions: Enhanced transparency and minimised discretion.
    5. Compliance friction reduction: Enabled smoother onboarding of taxpayers.
    6. Administrative strengthening: Indicated by consistent year-on-year improvements.

    What does the cost of collection indicate?

    1. Declining cost of collection: Reduced from 0.61% of gross direct tax collections (FY2000-01) to 0.41% (FY2024-25 provisional).
    2. Lowest in available data series: Reflects sustained administrative efficiency.
    3. Pandemic spike: Temporary rise in FY2020-21 due to disruptions.
    4. Post-pandemic correction: Returned to declining trajectory.
    5. Efficiency gain: Indicates improved revenue mobilisation per rupee spent.

    What does this imply for fiscal capacity and governance?

    1. Structural strengthening: Evidence suggests durable expansion, not a one-time compliance surge.
    2. Formalisation of economy: Broader cross-section of taxpayers entering formal net.
    3. Revenue resilience: Supports fiscal planning and long-term budgeting.
    4. Administrative modernisation: Reflects digital governance success.
    5. Compliance culture: Indicates deeper tax participation.

    Conclusion

    The sustained expansion of the taxpayer base alongside declining cost of collection signals structural strengthening of India’s direct tax system. The evidence suggests institutional reform, digitalisation, and broader formalisation have enhanced fiscal resilience and administrative efficiency.

    PYQ Relevance

    [UPSC 2019] Enumerate the indirect taxes which have been subsumed in the goods and services tax (GST) in India. Also, comment on the revenue implications of the GST introduced in India since July 2017.

    Linkage: This question tests understanding of how tax reforms expand the revenue base and strengthen fiscal capacity, a core GS3 theme. The article shows how widening the taxpayer base and improving compliance are part of the same structural shift that GST triggered in India’s tax ecosystem.

  • Carbon Capture to Drive India’s Green Steel Transition

    Why in the News

    The Prime Minister shared an article highlighting the role of Carbon Capture, Utilisation and Storage in decarbonising India’s steel sector, aligning with India’s Net Zero 2070 commitment.

    India’s Steel Sector at a Glance

    • India is the world’s second largest crude steel producer.
    • Production: Around 152 million tonnes in FY 2024-25.
    • Target under National Steel Policy 2017:
      • 300 million tonnes by 2030-31
      • 500 million tonnes by 2047

    Note: Steel production contributes nearly 10 to 12 percent of India’s total greenhouse gas emissions due to coal based blast furnace and direct reduced iron routes.

    What is CCUS

    Carbon Capture, Utilisation and Storage involves:

    • Capturing carbon dioxide from industrial processes
    • Utilising it for industrial applications or
    • Storing it underground to prevent atmospheric release

    It helps address process emissions that cannot be eliminated through energy efficiency or renewable power alone.

    Government Measures

    • Green Steel Taxonomy:Defines emission intensity benchmark: Less than 2.2 tonnes of CO2 equivalent per tonne of finished steel
      • Introduces star rating framework
    • National Green Hydrogen Mission: ₹455 crore allocated for pilot projects in steel sector
    • Union Budget Allocation: ₹20,000 crore for piloting CCUS across five sectors including steel

    Significance

    • Helps decarbonise existing steel plants without immediate asset replacement
    • Enhances global competitiveness amid carbon border measures
    • Supports Net Zero 2070 target
    • Encourages industrial ecosystems around carbon transport and storage
    [2023] Consider the following heavy industries: 1. Fertilizer plants 

    2. Oil refineries 

    3. Steel plants 

    Green hydrogen is expected to play a significant role in decarbonizing how many of the above industries? 

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

  • Global warming and pollution are stripping vibrant colors from nature

    Why in the news?

    A 2024 study in Ecology and Evolution reports that insects such as ladybirds and dragonflies in temperate regions are turning lighter due to frequent heatwaves. Over half of the world’s oceans have become greener in the last two decades. Forests are turning browner. Coral reefs, including those in Gulf of Mannar and Lakshadweep, are facing repeated bleaching. These visible colour changes reflect large-scale climate stress on ecosystems.

    What is Ecological discolouration?

    Ecological discolouration refers to measurable changes in the natural colour patterns of ecosystems caused by environmental stress. It can be caused by:

    1. Pigment Alteration: Changes in the concentration or type of biological pigments like chlorophyll (green in plants/algae), melanin (darker tones in animals), and carotenoids (yellow/orange) often due to UV exposure or nutrient shifts.
    2. Symbiotic Loss: The most prominent example is coral bleaching, where corals expel their colorful symbiotic algae (zooxanthellae) due to thermal stress, leaving behind a white skeleton.
    3. Species Composition Shifts: The replacement of native species with others such as invasive toxic dinoflagellates or algae blooms can physically change the color of water bodies or forests.
    4. Biogeochemical Disruptions: Alterations in cycles (like nitrogen or carbon) can lead to soil or water changes, such as the formation of dark terra preta soils or anaerobic “black spots” in marine sediments.

    Functions in Ecology

    1. Early-Warning Indicator: Visible fading or darkening provides an immediate signal of ecosystem instability.
    2. Stress Proxy: It serves as a measurable metric for temperature stress, chemical pollution, and habitat degradation.
    3. Biodiversity Marker: Mapping color variations across a landscape helps scientists track the loss or gain of biodiversity in real-time

    How is climate change altering ocean colour?

    1. Ocean Greening: Over 50% of global oceans have become greener in the last two decades.
    2. Algal Proliferation: Greener waters indicate increased algal presence.
    3. Sunlight Blockage: Algae reduce water clarity and limit sunlight penetration.
    4. Oxygen Depletion: Decomposition of algal blooms lowers oxygen levels, harming marine organisms.

    What is Coral bleaching?

    It is when corals expel the colorful, nutrient-providing algae (zooxanthellae) living in their tissues due to stress, turning them white, but they aren’t dead yet. Prolonged stress from rising ocean temperatures (climate change) or other factors like pollution causes them to starve and potentially die, leading to reef ecosystem collapse.

    What happens during bleaching?

    1. Stress triggers expulsion: Corals are stressed by changes in water temperature (usually warming), light, salinity, or nutrients.
    2. Algae leave: Stressed corals expel the symbiotic algae (zooxanthellae) that live within them and provide food and color.
    3. Coral turns white: Without the algae, the coral’s transparent tissue reveals its white skeleton, making it appear “bleached”.

    How does coral bleaching reflect marine ecosystem stress?

    1. Indian Reef Impact: Bleaching reported in Gulf of Mannar, Palk Bay, Lakshadweep, Andaman & Nicobar Islands.
    2. Thermal Stress Mechanism: Corals expel symbiotic algae under heat stress, turning white.
    3. Mortality Risk: Repeated bleaching increases coral death probability.
    4. Ecosystem Disruption: Coral reefs support marine biodiversity and fisheries.

    What does forest browning indicate?

    1. Vegetation Stress: Forests are turning browner due to climate stress and habitat degradation.
    2. Pigment Reduction: Chlorophyll loss reflects reduced photosynthetic efficiency.
    3. Habitat Instability: Browning signals declining ecosystem resilience.

    How are insects adapting through pigmentation change?

    1. 2024 Study Finding: Ladybirds and dragonflies in temperate northern regions are becoming lighter.
    2. Heatwave Response: Lighter pigmentation reflects sunlight and prevents overheating.
    3. Melanin Composition:
      1. Eumelanin: Produces brown/black shades; absorbs more heat.
      2. Pheomelanin: Produces yellow/red tones.
    4. Reproductive Impact: Pigmentation shifts may affect mating patterns and reproductive timing.

    What historical example shows climate-driven colour adaptation?

    Climate-driven colour adaptation refers to the process where, in response to changing environmental conditions (temperature, humidity, UV radiation) caused by climate change, species evolve or plastically alter their body or flower pigmentation to improve survival, thermoregulation, or reproduction.

    1. Industrial Revolution Case: Soot darkened tree bark.
    2. Peppered Moth Shift: Dark variants survived due to improved camouflage; light variants declined.
    3. Adaptive Principle: Species become darker in colder climates and lighter in warmer conditions. 
    4. Butterflies (Colias meadii): A long-term study (1953-2012) showed that wing melanization in these butterflies decreased with increasing temperature, but this pattern varied by region, showing higher melanism in the hotter southern USA.

    How does deforestation affect species colour diversity?

    1. Amazon Study (Biodiversity and Conservation): Deforestation reduces bright colour displays in butterflies.
    2. Habitat Disturbance Effect: Disturbed forests show less diverse butterfly palettes.
    3. Regeneration Signal: Naturally regenerated Amazon forests show improvement in colour diversity.

    What are the ecological implications?

    1. Camouflage Disruption: Alters predator-prey balance.
    2. Thermoregulation Shift: Pigmentation change modifies heat absorption.
    3. Biodiversity Indicator: Colour variation reflects ecosystem health.
    4. Systemic Climate Signal: Large-scale discolouration indicates long-term environmental stress.

    Conclusion

    Ecological discolouration represents a visible manifestation of climate-induced ecosystem stress. Ocean greening, forest browning, coral bleaching, and pigmentation shifts in species indicate disruption in biological processes and habitat stability. These changes signal declining ecosystem resilience and rising vulnerability to extreme climatic events. Monitoring such colour shifts can function as an early warning tool for biodiversity loss and guide targeted climate adaptation and conservation strategies.

    PYQ Relevance

    [UPSC 2017] ‘Climate Change’ is a global problem. How India will be affected by climate change? How Himalayan and coastal states of India will be affected by climate change?

    Linkage: Climate change impact is a recurring GS-3 theme linking environment, disaster vulnerability, and sustainable development. Coral bleaching, ocean warming, and marine ecosystem stress are important for coastal impact analysis, while Himalayan glacier melt, altered monsoons, and extreme events are crucial dimensions when examining climate change effects in India.