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GS Paper: GS3

  • Expert Committee recommends ending mandatory Flue Gas Desulphurisation (FGD) 

    Why in the News?

    A high-powered committee chaired by Principal Scientific Advisor (PSA) Ajay Sood has proposed that India should discontinue the mandatory use of Flue Gas Desulphurisation (FGD) units in most coal-fired Thermal Power Plants (TPPs).

    Why mandatory FGDs are opposed?

    • Low SO₂ Levels: India’s SO₂ levels (10–20 µg/m³) are already below the permissible limit of 80 µg/m³.
    • Low Sulphur Coal: Indian coal naturally has low sulphur content.
    • Minimal Impact: Studies show no major air quality difference between plants with and without FGDs.
    • Limited PM Reduction: FGDs have minimal effect on particulate matter levels.
    • Environmental Trade-Offs:
      • CO₂ Increase: Installing FGDs would add 69 million tonnes of CO₂ emissions (2025–2030).
      • SO₂ Reduction: Emissions would fall by 17 million tonnes, but the climate cost outweighs the benefit.

    About Flue Gas Desulphurisation (FGD):

    • Purpose: FGD is a technology used to remove sulphur dioxide (SO₂) from flue gases produced by burning coal and oil, especially in thermal power plants.
    • Environmental Benefit: It helps prevent acid rain, which harms crops, buildings, soils, and aquatic ecosystems.
    • Chemicals Used: Common absorbents include limestone (CaCO₃), lime (CaO), and ammonia (NH₃).
    • Types of Systems:
      1. Dry Sorbent Injection: Cost-effective, but less efficient.
      2. Wet Limestone-Based: Effective and used in large plants, produces gypsum.
      3. Seawater-Based: Uses alkaline seawater, ideal for coastal areas.

    FGD Mandate in India:

    • Current Status: FGD units are being installed in 537 coal-based thermal power units, but 92% of India’s 600 plants still lack them.
    • Committee Recommendation: An expert panel advised exempting 80% of plants from FGD requirements due to feasibility issues.
    • Implementation Barriers: Limited vendors available; High costs and risk of increased electricity tariffs.
    [UPSC 2023] Consider the following:

    1. Carbon monoxide 2. Nitrogen oxide 3. Ozone 4. Sulphur dioxide Excess of which of the above in the environment is/are cause(s) of acid rain?

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

     

  • PM to launch Aravalli Green Wall Project

    Why in the News?

    On June 5, World Environment Day, Prime Minister Narendra Modi is expected to launch the Aravalli Green Wall Project.

    PM to launch Aravalli Green Wall Project

    About the Aravallis:

    • Geology: The Aravalli Range is one of the oldest fold mountain ranges in the world, formed during the Proterozoic era.
    • Spread: It stretches for about 692 km, from Gujarat to Delhi, passing through Rajasthan and Haryana.
    • State-Wise Coverage: Around 80% of the range lies in Rajasthan, with the rest spread across Haryana, Delhi, and Gujarat.
    • Highest Peak: The tallest point is Guru Shikhar in Mount Abu, Rajasthan, with an elevation of 1,722 meters.
    • Natural Barrier Function: Acts as a green wall, preventing the spread of the Thar Desert into eastern Rajasthan and the Gangetic plains.
    • River Origins: Important rivers such as the Banas, Sahibi and Luni originate from the Aravallis.
    • Minerals: Rich in minerals like copper, zinc, lead, and marble.
    • Biodiversity: Home to 300+ bird species and key wildlife such as leopards, hyenas, jackals, wolves, civets, and Nilgai.
    • Prehistoric Significance: Contains cave art and tools from the Lower Palaeolithic period.

    What is the Aravalli Green Wall Project?

    • Project Goal: To build a green corridor from Delhi to Gujarat combating desertification and ecological degradation.
    • States Involved: Includes Delhi, Rajasthan, Haryana, and Gujarat, focusing on restoring degraded landscapes.
    • Vegetation Strategy: Focus on removing Prosopis juliflora (invasive species) and planting native trees like:
      • Khair (Indian Gum Arabic)
      • Ronjh (White-barked Acacia)
      • Dhau (Axlewood)
      • Salai (Indian Frankincense)
      • Pilkhan, Neem, Amaltas, Goolar, Peepal
    • Buffer Zone Creation: A 6.45 million hectare buffer zone will be established around the Aravallis.
    • Phase 1 Focus:
      • Delhi: 3,010 ha in South Delhi
      • Haryana: 25,000 ha in Gurugram, Faridabad, Mahendragarh
    • Global Commitments supported:
      • Paris Agreement: Target to create 2.5–3 billion tonnes CO₂ sink
      • Bonn Challenge: Restore 26 million hectares of land by 2030
    [UPSC 2001] The approximate age of the Aravallis range is.

    Options: (a) 370 million years (b) 470 million years (c) 570 million years* (d) 670 million years

     

  • ​Monsoon woes: On the southwest monsoon and the northeast

    Why in the News?

    In 2025, the Southwest Monsoon, which plays a vital role in India’s farming economy, brought heavy and destructive rains. Instead of simply starting the farming season, it has caused widespread damage across the northeastern states.

    Why is the northeastern region particularly vulnerable to monsoon-related disasters?

    • Geographical Terrain and River Systems: The Northeast has a complex topography of steep hills and fast-flowing rivers like the Brahmaputra and Barak. These rivers often overflow during monsoon, causing floods and erosion. Eg: In Assam, over 10 major rivers flowed above danger level in June 2025, affecting over 3 lakh people across 19 districts.
    • High and Prolonged Rainfall: The region receives one of the highest average monsoon rainfalls in India, making even a “below normal” monsoondestructive. Eg: Despite IMD predicting lower-than-normal rainfall, Assam, Tripura, and Sikkim faced flash floods and landslidesin May–June 2025.
    • Dual Monsoon Exposure and Fragile Ecology: The region experiences both the southwest monsoon (June–September) and a retreating monsoon (October–December), increasing disaster exposure. The fragile ecology, including deforestation and slope instability, worsens risks. Eg: In North Sikkim, landslides in early June 2025 marooned 1,500 tourists and blocked arterial roads due to incessant rain.

    What is the Dual Monsoon Pattern? 

    Dual Monsoon Pattern refers to the occurrence of two distinct monsoon phases in a year that affect a region, particularly the Northeastern States of India. These are:

    • Southwest Monsoon (June to September):
      This is the primary monsoon season for most of India. The Bay of Bengal branch of the southwest monsoon brings heavy rainfall to the Northeastern States like Assam, Meghalaya, and Arunachal Pradesh.
    • Retreating/Post-Monsoon (October to December):
      This secondary phase brings additional rainfall, especially to Nagaland, Manipur, Mizoram, and Tripura (NMMT region). This is often accompanied by cyclonic storms originating from the Bay of Bengal.

    How does the dual monsoon pattern affect the disaster preparedness of northeastern States?

    • Extended Vulnerability Period: The presence of both the southwest monsoon (June–September) and the retreating/post-monsoon (October–December) leads to a prolonged rainy season, increasing the duration for which states must stay alert and prepared. Eg: In 2023, flash floods affected parts of Meghalaya in both July and November, stretching disaster response capacities.
    • Recurring Strain on Resources: The back-to-back monsoon cycles put continuous pressure on relief infrastructure, emergency services, and budgetary resources, often without adequate recovery time between events. Eg: In Assam, flood shelters and boats used during June floods had to be reactivated again during October rains, delaying repairs and replenishment.
    • Challenges in Long-term Planning: The dual monsoon system makes it harder to plan and execute infrastructure repair, agricultural recovery, and resettlement efforts, as damage may recur within months. Eg: In Arunachal Pradesh, roads repaired after July landslides were again washed away during October rains in 2022, disrupting connectivity repeatedly.

    Why has infrastructure development lagged in the northeastern States compared to the rest of India?

    • Challenging Geographical Terrain: The region is dominated by mountainous landscapes, dense forests, and seismic zones, which make construction of roads, bridges, and railways technically difficult and cost-intensive. Eg: In Sikkim, frequent landslides and narrow mountain roads delay road-widening and highway projects.
    • Security and Strategic Concerns: The presence of international borders with countries like China, Myanmar, and Bangladesh and historical instances of insurgency have led to delays in project execution due to security concerns and administrative restrictions. Eg: The construction of the India-Myanmar-Thailand Trilateral Highway through Manipur has faced repeated delays due to local unrest and law-and-order issues.
    • Low Political and Economic Prioritisation: Compared to other regions, the Northeast has received less investment in infrastructure due to lower population density, limited industrial base, and less political influence at the national level. Eg: States like Nagaland and Mizoram have limited railway connectivity even today, unlike the rapid expansion seen in western and southern India.

    What are the steps taken by the Indian government? 

    • Strengthened Disaster Response and Early Warnings: The government has deployed NDRF units across the Northeast and enhanced IMD’s region-specific alerts for floods and landslides in states like Assam, Sikkim, and Arunachal Pradesh.
    • Infrastructure Development in Vulnerable Areas: Schemes like NESIDS support critical infrastructure such as flood protection embankments and all-weather roads in remote regions of Manipur and Mizoram.
    • Integration into National Disaster Management Frameworks: NDMA conducts capacity building, mock drills, and implements region-specific guidelines for urban flooding and landslide risk in cities like Gangtok and Guwahati.

    What long-term measures are needed to ensure sustainable disaster management in the Northeast? (Way forward)

    • Region-Specific Infrastructure Planning and Investment: Develop climate-resilient infrastructure suited to the region’s fragile ecology, such as landslide-resistant roads, flood-resistant housing, and robust early warning systems. Eg: The installation of a real-time flood monitoring system in the Brahmaputra basin has improved early evacuation in parts of Assam.
    • Integrated Inter-State and Central Coordination Mechanism: Establish a permanent regional disaster coordination body with participation from all Northeast states and the Centre to plan, share resources, and respond collectively to disasters. Eg: A joint task force involving Assam, Arunachal Pradesh, and Meghalaya could improve flood response across shared river systems like the Barak and Brahmaputra.

    Mains PYQ:

    [UPSC 2024] Flooding in urban areas is an emerging climate-induced disaster. Discuss the causes of this disaster. Mention the features of two such major floods in the last two decades in India. Describe the policies and frameworks in India that aim at tackling such floods.

    Linkage: The Bay of Bengal branch of the monsoon reaches the northeastern States first. These areas usually get a lot of rain during the monsoon, even in years when rainfall is lower than normal. Because of this, the region is naturally more prone to problems like flooding, which often comes with such heavy rain. 

  • Why has net FDI inflow plummeted?

    Why in the News?

    The RBI Bulletin (May 2025) reports that India received a record-breaking $81 billion in gross FDI inflows in FY 2024-25, but retained only $353 million in net FDI, revealing a dramatic divergence in the investment narrative.

    What do gross and net FDI trends indicate about India’s investment climate?

    • Gross FDI inflows are high: India received a record $81 billion in gross FDI in 2024-25, indicating strong headline interest from foreign investors. Eg: Media and government reported this as a sign of a robust investment climate.
    • Net FDI is drastically low: Net FDI dropped to only $353 million, showing that much of the incoming investment is offset by capital outflows, weakening the real impact on the economy. Eg: Rising outward FDI and disinvestment reduced net foreign capital retained in India.
    • Declining FDI-to-GDP ratio: The gross inflow-to-GDP ratio fell from 3.1% (2020-21) to 2.1% (2024-25), and net FDI-to-GDP fell from 1.6% to near zero, reflecting a slowing domestic investment environment despite high gross inflows. Eg: This signals tepid corporate investment and cautious investor sentiment in India.

    What is  Private Equity (PE) and Venture Capital (VC)?

    • Private Equity (PE) refers to investment funds that buy existing companies or large stakes in businesses, often to improve their performance and later sell them for profit. PE typically invests in more mature companies.
    • Venture Capital (VC) is a type of financing that supports early-stage startups and small businesses with high growth potential. VC investors take higher risks in exchange for potentially high returns.

    Why is the rise in Private Equity (PE)/Venture Capital (VC) driven FDI a concern for long-term investment?

    • PE/VC-driven FDI focuses on brownfield investments: These funds mainly acquire existing firms rather than creating new production capacity, limiting contributions to capital formation and technology acquisition. Eg: Investments by Blackstone in Care Hospitals and ChrysCapital in Lenskart.
    • Short investment horizon: PE/VC funds typically have a 3-5 year exit strategy, often selling holdings during stock market booms, which leads to disinvestment rather than sustained growth. Eg: The spike in disinvestment in FY25 was partly due to PE/VC funds liquidating their positions.
    • Limited impact on long-term industrial growth: Since these funds focus on services like fintech and retail rather than manufacturing or infrastructure, they contribute less to enhancing India’s productive capacity. Eg: The declining share of FDI in greenfield projects shows limited greenfield capital formation.

    How does outward FDI suggest India is used for tax arbitrage?

    • High correlation between inward and outward FDI: India shows a strong link between the money flowing in and out, suggesting that funds often enter and exit quickly rather than being invested long-term. Eg: Similar volumes of FDI both coming into and going out of India.
    • Use of tax havens as intermediaries: A significant portion of both inward and outward FDI involves countries like Singapore and Mauritius, known for tax concessions and treaty benefits. Eg: Many Indian companies route investments through these jurisdictions to reduce tax liabilities.
    • ‘Treaty shopping’ for tax benefits: Global investors move capital through India to exploit variations in tax laws, a practice called tax arbitrage, which may not contribute to domestic economic growth. Eg: Research shows India ranked 6th among emerging markets for such correlated FDI flows, indicating use as a conduit for tax optimization.

    What are the effects of declining FDI-to-GDP and GFCF ratios?

    • Reduced contribution to economic growth: Declining FDI-to-GDP and FDI-to-GFCF (Gross Fixed Capital Formation) ratios indicate that foreign investments are becoming a smaller part of India’s overall economy and capital investment, potentially slowing down industrial expansion and technology adoption. Eg: Gross FDI inflows peaked at 7.5% of GFCF in FY21 but have declined sharply since then.
    • Weakening investor confidence: The downward trend signals tepid domestic corporate investment and reduced foreign investor interest, which can affect job creation and long-term economic stability. Eg: Net FDI relative to GDP has declined from 1.6% in 2020-21 to nearly zero in 2024-25, showing declining investor enthusiasm.

    Why should India reform its foreign capital regulations?

    • To curb tax arbitrage and ‘hot money’ flows: Current regulations allow large volumes of inward and outward FDIthrough tax havens, enabling tax optimization rather than genuine investment, which undermines domestic economic goals. Eg: High FDI flows involving Singapore and Mauritius reflect such practices.
    • To promote long-term, productive investments: Reform is needed to encourage FDI that contributes to capital formation, technology acquisition, and industrial growth rather than short-term PE/VC-driven disinvestment. Eg: The rising share of alternative investment funds in FDI has led to increased disinvestment, affecting sustainable growth.

    Way forward: 

    • Strengthen Regulatory Frameworks: Implement stricter rules to curb tax arbitrage and limit quick inflows and outflows via tax havens, ensuring FDI supports genuine, long-term economic growth.
    • Promote Greenfield and Productive Investments: Encourage FDI in new capacity building, manufacturing, and technology sectors over short-term PE/VC deals to boost capital formation, industrial growth, and sustainable development.

    Mains PYQ:

    [UPSC 2013] Though India allowed Foreign Direct Investment (FDI) in what is called multi-brand retail through the joint venture route in September 2012, the FDI, even after a year, has not picked up. Discuss the reasons.

    Linkage: The net FDI-to-GDP ratio has steadily fallen from 1.6% in 2020-21 to zero in 2024-25. This ongoing decline is worrying, even though policymakers continue to make optimistic claims.

  • ‘Bharat Gen’ AI-based multimodal LLM for Indian languages launched

    Why in the News?

    Union Minister of State for Science & Technology has launched ‘Bharat Gen’, India’s first indigenously developed AI-based Large Language Model (LLM) tailored for Indian languages.

    About Bharat Gen:

    • What is it: Bharat Gen is India’s first homegrown AI-based multimodal large language model (LLM) supporting 22 Indian languages.
    • Developed By: Created under the National Mission on Interdisciplinary Cyber-Physical Systems (NM-ICPS) and implemented by the TIH Foundation for IoT and IoE at IIT Bombay.
    • Key Features:
      • Understands text, speech, and image inputs.
      • Works across India’s diverse languages and cultures.
      • Designed to be ethical, inclusive, and culturally rooted.
    • Support and Collaboration: Backed by the Department of Science and Technology (DST) and developed in collaboration with top academic and AI institutions.
    • Bharat Data Sagar: A national effort to collect language data for lesser-known Indian languages to train future AI tools.
    • Real-World Use: In places like Udhampur, an AI doctor powered by Bharat Gen is helping patients in their native language.

    What are Large Language Models (LLMs)?

    • Large Language Models (LLMs) are advanced AI systems trained on massive amounts of text data to understand and generate human-like language. They use deep learning and the Transformer architecture to predict and produce text based on user prompts.

      Features:

      • Trained on huge datasets (process data through mathematical optimization to minimise prediction errors.)
      • Contain billions of parameters
      • Can answer questions, summarize, translate, write code, and generate content

      Examples:

      • GPT-4
      • LLaMA
      • Claude

      Limitations:

      • May generate inaccurate information
      • Can reflect biases in data
      • Lack true human understanding
    [UPSC 2020] With the present state of development, Artificial Intelligence can effectively do which of the following?(1) Bring down electricity consumption in industrial units (2) Create meaningful short stories and songs (3) Disease diagnosis (4) Text-to-Speech Conversion (5) Wireless transmission of electrical energy Select the correct answer using the code given below:Options: (a) 1, 2, 3 and 5 only (b) 1, 3 and 4 only* (c) 2, 4 and 5 only (d) 1, 2, 3, 4 and 5

  • SHUKR Gene in Flowering Plants

    Why in the News?

    Flowering plants appeared around 130 million years ago and rapidly diversified, puzzling scientists including Charles Darwin, who called it an “abominable mystery”.

    A new study by CSIR-CCMB, Hyderabad, has identified the SHUKR gene, which controls pollen development in flowering plants.

    SHUKR Gene in Flowering Plants

    About the SHUKR Gene in Flowering Plants

    • What is SHUKR? It is a newly discovered gene found in flowering plants like Arabidopsis thaliana. It plays a key role in forming pollen, which plants need to reproduce.
    • Function in the Plant Life Cycle: SHUKR is active during the sporophyte phase (the main plant body stage) and helps in producing healthy, viable pollen.
    • Effect of Gene Loss: If SHUKR is missing or not working, the plant fails to make good pollen, leading to poor or no reproduction.
    • How SHUKR Works: It controls F-box genes, which remove old proteins and replace them with new ones to help pollen grow well.
    • Adaptive Advantage: SHUKR and F-box genes evolve quickly, allowing plants to adjust to harsh conditions like heat, cold, or drought.
    • Evolutionary Origin: This gene first appeared 125 million years ago in eudicots, a plant group that now includes three-fourths of all flowering plants.
    • Why it matters: SHUKR shows that pollen-making is closely linked with the rest of the plant, challenging the earlier belief that these processes were separate.
    • Significance: Climate change causes heat-induced pollen damage in flowering plants, but genes like SHUKR could help develop climate-resilient crops.

    Back2Basics: Darwin’s “Abominable Mystery”

    • Darwin’s Confusion: Charles Darwin was puzzled by the sudden appearance and rapid spread of flowering plants about 130 million years ago — calling it an “abominable mystery”.
    • Mismatch with Evolutionary Pace: According to standard evolution theory, species change slowly over time, but flowering plants diversified very quickly, showing great variety.
    • Genetic Explanation: The SHUKR gene may solve this mystery by showing how flowering plants gained molecular tools to adapt and reproduce faster.
    • New Insight: This discovery offers a genetic explanation for the rapid rise of flowering plants and helps clarify Darwin’s long-standing puzzle.

     

    [UPSC 2017] Consider the following statements:

    1. Genome sequencing can be used to identify genetic markers for disease resistance and drought tolerance in various crop plants.

    2. This technique helps in reducing the time required to develop new varieties of crop plants.

    3. It can be used to decipher the host-pathogen relationships in crops.

    Select the correct- answer using the code given below:

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

     

  • [2nd June 2025] The Hindu Op-ed: Regulating India’s virtual digital assets revolution 

    PYQ Relevance:

    [UPSC 2021] What is Cryptocurrency? How does it affect global society? Has it been affecting Indian society also?

    Linkage: India’s leadership in grassroots crypto adoption and the significant investment by retail investors, indicating its presence and potential impact on Indian society. Understanding this impact is a foundational aspect of the broader discussion on regulating VDAs.

     

    Mentor’s Comment:  The Supreme Court’s recent observation questioning the absence of comprehensive crypto regulation highlights the urgent need for India to replace punitive taxation with structured oversight. Between December 2023 and October 2024, Indian investors traded over ₹2.63 trillion worth of crypto on offshore platforms, causing the country to miss out on substantial tax revenues and governance control. The article emphasizes this contradiction—a rapidly growing industry at the grassroots level and a fragmented, reactionary policy at the top.

    Today’s editorial will talk about the comprehensive crypto regulation. This content would help in GS Paper II ( Governance) and GS Paper III (Science & Technology).

    _

    Let’s learn!

    Why in the News?

    India has kept its top position in grassroots crypto adoption for the second year in a row, according to the 2024 Chainalysis Geography of Crypto report. But this achievement comes at a time when clear regulations are missingand government policies on crypto remain confusing and inconsistent.

    What drives India’s lead in grassroots crypto adoption?

    • High Retail Investor Participation: Indian retail investors have shown strong enthusiasm, investing $6.6 billion into crypto assets (NASSCOM report). Eg: A large number of small-ticket retail trades contribute to India topping Chainalysis’ 2024 grassroots crypto adoption index.
    • Growing Web3 Developer Ecosystem: India hosts one of the fastest-growing Web3 developer communities, driving innovation and ecosystem engagement. Eg: Startups and developers building decentralized apps (dApps) and blockchain solutions across Tier-2 and Tier-3 cities.
    • Youthful Demographic and Digital Penetration: A young, tech-savvy population, high smartphone usage, and digital literacy foster wide crypto experimentation. Eg: College students and freelancers using stablecoins and crypto wallets for micro-transactions and cross-border payments.
    • Lack of Traditional Investment Access and Inflation Hedge: Limited access to formal investment channels and search for inflation-resistant assets prompt people to explore crypto. Eg: Young earners in semi-urban areas using crypto as an alternative to gold or fixed deposits for wealth storage.

    Why did the Supreme Court flag regulatory gaps in 2025?

    • Absence of a Comprehensive Legal Framework: The Court noted the lack of clear and cohesive legislation for Virtual Digital Assets (VDAs), which hampers effective regulation and enforcement. Eg: In May 2025, the Supreme Court remarked, “Banning may be shutting your eyes to ground reality,” highlighting the disconnect between policy and practice.
    • Overreliance on Prohibitive Taxation Instead of Regulation: India imposed heavy taxes (30% capital gains, 1% TDS) as a stop-gap, without establishing regulatory clarity or investor safeguards. Eg: Despite taxation, crypto users shifted to offshore platforms, leading to over ₹60 billion in uncollected TDSand loss of oversight.
    • Risk of Pushing Activity Underground: The absence of regulation combined with enforcement gaps drove users towards non-compliant and unregulated exchanges, increasing systemic risk. Eg: The Court observed that without enabling regulation, users bypassed restrictions via VPNs and mirror sites, undermining regulatory intent.

    Who ensures compliance in India’s crypto ecosystem?

    • Reserve Bank of India (RBI): As the monetary authority, RBI oversees the impact of crypto on financial stability, capital controls, and payment systems. Eg: RBI issued circulars in 2013 and 2018 warning financial institutions against dealing with crypto-related entities.
    • Financial Intelligence Unit-India (FIU-IND): FIU-IND monitors suspicious transactions, enforces anti-money laundering (AML) and counter-terror financing (CFT) norms. Eg: Indian Virtual Asset Service Providers (VASPs) collaborated with FIU-IND to strengthen AML/CFT compliance, gaining positive feedback from FATF.
    • Virtual Asset Service Providers (VASPs): VASPs act as domestic intermediaries ensuring KYC norms, reporting standards, and overall ecosystem transparency. Eg: After the 2024 crypto hack ($230 million loss), Indian VASPs enhanced cybersecurity, created insurance funds, and implemented industry-wide security guidelines.

    Where are most Indian crypto assets traded?

    • Offshore, Non-Compliant Platforms: A significant portion of Indian crypto trading happens on offshore exchanges that do not comply with Indian regulations. Eg: Between July 2022 and December 2023, Indians traded over ₹1.03 trillion worth of VDAs on such platforms.
    • Limited Domestic Exchange Usage: Only about 9% of India’s estimated ₹1.12 trillion worth of crypto assets are held or traded on domestic exchanges. Eg: This limited use reflects investor preference for platforms with broader asset choices or less stringent controls.

    How have Indian Virtual Asset Service Providers (VASPs) improved security and compliance?

    • Strengthened Anti-Money Laundering (AML): Indian VASPs have collaborated closely with the Financial Intelligence Unit-India (FIU-IND) to enhance monitoring and reporting standards. Eg: This cooperation earned positive feedback from the Financial Action Task Force (FATF) for improved compliance.
    • Enhanced Cybersecurity Measures: After the 2024 crypto hack that resulted in a $230 million loss, many Indian exchanges implemented stronger security protocols and real-time risk monitoring. Eg: Exchanges set up dedicated insurance funds to protect users against future thefts.
    • Industry-Wide Standardization and Collaboration: Indian VASPs united to create and enforce common cybersecurity guidelines and best practices across the ecosystem. Eg: This collective effort has improved overall trust and resilience of India’s crypto platforms.

    Way forward: 

    • Formulate a Comprehensive, Risk-Based Regulatory Framework: India must develop clear, future-ready legislation that classifies, governs, and monitors Virtual Digital Assets (VDAs) in alignment with global standards (like FATF, IMF). Eg: A dedicated VDA Regulatory Authority or inclusion under SEBI/RBI oversight can ensure investor protection, AML enforcement, and innovation support.
    • Strengthen Domestic VASP Ecosystem Through Incentives and Integration: Encourage onshore compliance by lowering tax burdens, supporting innovation sandboxes, and integrating VASPs into India’s formal financial ecosystem. Eg: Offering tax rebates or compliance credits to VASPs adopting stringent KYC/CFT and cybersecurity norms can enhance trust and reduce offshore migration.

  • Growing pains: On economic performance, Viksit Bharat

    Why in the News?

    India’s economic data for 2024–25 shows a mixed picture: the economy grew strongly by 7.4% in the last quarter, which was better than expected, but the overall yearly growth dropped to 6.5% — the lowest in four years since the pandemic.

    What led to the higher-than-expected GDP growth in Q4 2024-25?

    • Robust Growth in Construction and Agriculture Sectors: The construction sector returned to double-digit growth, and agriculture performed strongly, both of which are key employment generators. Eg: Infrastructure expansion and favourable harvests boosted rural incomes and demand.
    • Strong Performance of Services Sector: The services sector maintained steady and strong growth, contributing significantly to the GDP rise. Eg: IT, finance, and hospitality services saw sustained recovery post-pandemic.
    • Statistical Boost from Higher Net Taxes: A 12.7% increase in net tax collections inflated the GDP figure, even though underlying economic activity was slower. Eg: Higher indirect tax revenues during the quarter pushed headline growth from ~6.8% to 7.4%.

    Why is 6.5% annual GDP growth seen as inadequate despite being the highest globally?

    • Below the Required Rate for ‘Viksit Bharat 2047’ Vision: To achieve the developed nation goal by 2047, India needs sustained annual growth of around 8% or more. Eg: The Economic Survey states that consistent 8% growth is essential to meet infrastructure, employment, and welfare needs by 2047.
    • Mismatch with India’s Domestic Demands and Aspirations: India’s population growth and development needs demand faster economic expansion, regardless of how the rest of the world is performing. Eg: Even though India outpaces global peers, a 6.5% rate may not create enough jobs or uplift per capita incomes sufficiently.
    • Limited Acceleration Potential Under Stable Growth Phase: While 6.5% reflects stability, it also signals a plateau, with low inflation but no signs of rapid acceleration in the near future. Eg: Chief Economic Adviser V. Anantha Nageswaran indicated India may not see major growth spurts soon, making it harder to catch up with long-term development targets.

    How do net taxes affect the true picture of GDP growth?

    • Artificial Boost to Headline GDP: A significant rise in net taxes (taxes minus subsidies) can inflate GDP figures without a corresponding increase in real economic activity. Eg: In Q4 2024–25, GDP growth was 7.4%, but without the 12.7% surge in net taxes, real growth would have been around 6.8%.
    • Distorts Sector-Wise Contribution Assessment: High net tax contributions may overshadow sluggish performance in core sectors like manufacturing or consumption, giving a misleading impression of overall health. Eg: Despite weak private consumption, GDP looked robust due to the statistical impact of increased tax revenue.

    Is stable growth enough for India’s transition?

    • Stability Reduces Risk but Limits Acceleration: While stable growth ensures low inflation and reduced economic volatility, it may not generate the momentum needed to transform India into a developed economy. Eg: As per the Chief Economic Adviser, India has entered a phase of low inflation and stable growth, but such stability might cap faster economic acceleration.
    • Inadequate for Meeting Rising Aspirations: India’s growing population and developmental needs require higher employment, infrastructure, and productivity, which stable but slow growth may not adequately support. Eg: A 6.5% GDP growth may not create enough jobs or income levels to match the goals of schemes like ‘Viksit Bharat 2047’.
    • Missed Opportunity in a Global Slowdown: In a “growth-scarce” global environment, India has the chance to become a key economic engine. Relying on stable growth without pushing for higher gains may lead to missed strategic opportunities. Eg: Despite outperforming other major economies, India’s slow capital investment pace until late FY25 indicates underutilization of its potential.

    Way forward: 

    • Accelerate Structural Reforms and Investments: India must boost productivity by investing in infrastructure, manufacturing, skilling, and digitalisation, while simplifying regulations to attract both domestic and foreign investment. Eg: Fast-tracking initiatives like Gati Shakti and PLI schemes can unlock higher economic momentum.
    • Enhance Domestic Demand and Job Creation: Policies should focus on reviving rural consumption, supporting MSMEs, and expanding labour-intensive sectors to ensure inclusive growth. Eg: Increasing public expenditure on health, education, and affordable housing can stimulate demand and generate employment.

    Mains PYQ:

    [UPSC 2024] Examine the pattern and trend of public expenditure on social services in the post-reforms period in India. To what extent this has been in consonance with achieving the objective of inclusive growth?

    Linkage: Inclusive growth is a core objective for a “transitioning economy” like India aiming for goals such as ‘Viksit Bharat’, and challenges in achieving it represent “growing pains”.

  • How the technology industry is trying to meet its climate goals

    Why in the News?

    A groundbreaking study by Microsoft and WSP Global, published in Nature, shows major progress in making data centres more environmentally friendly.

    What are Data centres? 

    Data centres are specialized facilities used to store, process, and manage data for organizations. They house large numbers of computer servers, network equipment, storage systems, and cooling systems, and form the backbone of the digital infrastructure that powers the internet, cloud computing, and various IT services.

    What are the environmental benefits of using cold plates and immersion cooling in data centres?

    • Lower Greenhouse Gas Emissions: These methods reduce emissions by 15–21% compared to traditional air cooling. Eg: Microsoft’s study showed that using immersion cooling in their data centres significantly reduced carbon emissions during peak operations.
    • Reduced Energy Consumption: They use 15–20% less energy, as liquid coolants transfer heat more efficiently than air. Eg: Alibaba’s deployment of cold plate cooling led to lower power usage effectiveness (PUE), cutting energy bills and environmental impact.
    • Significant Water Conservation: Water usage drops by 31–52%, helping conserve freshwater resources Eg: In water-stressed regions like Arizona, using cold plate cooling helps tech firms operate data centres without heavy reliance on water-based air conditioning systems.

    How does life cycle assessment aid in evaluating cooling technologies?

    • Measures Full Environmental Impact (Cradle to Grave): LCA evaluates emissions, energy use, and water consumption across a product’s entire lifecycle — from manufacturing to disposal. Eg: The Microsoft-WSP study assessed cold plates and immersion cooling from production to end-of-life, revealing their overall environmental benefits.
    • Identifies Trade-offs Between Technologies: LCA highlights sustainability trade-offs, helping compare the true impact of different cooling methods. Eg: It showed that while immersion cooling reduces emissions, the type of coolant used may raise separate ecological concerns.
    • Supports Informed Decision-Making for Climate Goals: LCA provides data-driven insights for industry and policymakers to adopt greener technologies that align with emissions targets. Eg: The ICT sector can use LCA results to choose cooling systems that help cut emissions by 42% by 2030, as per global climate goals.

    Why is renewable energy essential for sustainable data centre cooling?

    • Drastically Reduces Carbon Emissions: Using renewable energy like solar or wind can cut emissions by 85–90%, regardless of the cooling technology used. Eg: A data centre powered by wind energy in Sweden showed near-zero emissions even with traditional air cooling.
    • Enhances the Impact of Green Cooling Technologies: When combined with cold plates or immersion cooling, renewables amplify environmental benefits by further lowering energy and water use. Eg: The Microsoft-WSP study found that with 100% renewables, water savings could increase up to 50%.
    • Ensures True Sustainability Across the System: Cooling innovations alone aren’t enough if the electricity source is polluting; renewables make the entire system eco-friendly. Eg: A server cooled efficiently but powered by coal-based electricity still carries a high carbon footprint.

    In what ways are liquid-cooling methods superior to air cooling?

    • Higher Cooling Efficiency and Performance: Liquid-cooling systems like cold plates and immersion cooling transfer heat more efficiently than air, reducing the risk of overheating and improving hardware performance. Eg: In Microsoft’s data centres, cold plate cooling reduced component temperatures significantly compared to air-cooled setups, boosting system reliability.
    • Lower Energy and Water Consumption: Liquid methods use 15–20% less energy and up to 52% less water, making them more sustainable and cost-effective in the long run. Eg: Alibaba’s immersion-cooled servers showed reduced electricity bills and water usage in high-demand operations.

    To what extent can cooling innovations help meet ICT emission targets by 2030?

    • Significant Reduction in Greenhouse Gas Emissions: Advanced cooling technologies like cold plates and immersion cooling can reduce ICT data centre emissions by 15–21%, directly contributing to the 42% emission cut target set for 2030 (from 2015 levels). Eg: Microsoft’s deployment of cold plate systems showed measurable emissions drops in large-scale data operations.
    • Supports Scalable, Energy-Efficient Data Centre Growth: As demand for cloud services increases, liquid cooling enables high-performance computing without a corresponding rise in energy and carbon footprint, helping the sector scale sustainably. Eg: Alibaba’s use of immersion cooling enabled expansion of AI and cloud infrastructure while keeping energy use in check.

    Way forward: 

    • Promote Policy Incentives for Green Cooling Technologies: Governments should provide tax breaks, capital subsidies, and faster approvals for data centres that adopt liquid-cooling systems and renewable energy integration. Eg: Extending schemes like India’s PLI (Production-Linked Incentive) to green tech in data centres can fast-track low-emission infrastructure adoption.
    • Mandate Life Cycle Assessments and Emission Reporting: Introduce mandatory Life Cycle Assessments (LCA) and carbon disclosure norms for large-scale data centres to encourage transparent, science-based decisions. Eg: Requiring firms to report environmental impact from cooling systems can guide smarter industry shifts aligned with ICT sector’s 2030 emission targets.

    Mains PYQ:

    [UPSC 2022] How will India achieve the target of 50% of its installed capacity from renewable energy by 2030? Justify your answer. How will the shift of subsidies from fossil fuels to renewables help achieve the above objective? Explain.

    Linkage: Switching to renewable energy is a more effective way for the tech industry to run energy-hungry data centers in a cleaner, more sustainable way. This helps them meet climate goals and support national environmental targets.

  • In news: Valley of Flowers National Park

    Why in the News?

    The Valley of Flowers in Uttarakhand opened to tourists on June 1 for its annual four-month window.

    Valley of Flowers National Park

    About the Valley of Flowers National Park:

    • Location: The park is in Chamoli district, Uttarakhand, within the Nanda Devi Biosphere Reserve.
    • Altitude and Size: It covers 87 square kilometres and lies at 3,352 to 3,658 metres above sea level.
    • Protected Status: Declared a National Park in 1980 and became a UNESCO World Heritage Site in 1988.
    • Natural Features: Known for its colourful meadows, dense forests, waterfalls, and snow-capped mountains.
    • Mountain Range: Lies in the transition zone between the Zanskar and Great Himalaya ranges.
    • River System: The Pushpawati River, from the Tipra Glacier, flows through the valley into the Alaknanda River.
    • Ecosystem: It is part of the Nanda Devi Biosphere Reserve, which was named a UNESCO Man and Biosphere (MAB) Reserve in 2004.

    Flora and Fauna of the Valley:

    • Plant Diversity: The valley has over 520–650 species of flowers like orchids, primulas, poppies, daisies, and the sacred brahmakamal.
    • Flora by Altitude Zones:
      1. Sub-alpine (3,200–3,500 m): Trees like maple, fir, birch, and rhododendron.
      2. Lower alpine (3,500–3,700 m): Shrubs like junipers, willows, and geraniums.
      3. Higher alpine (above 3,700 m): Mosses, lichens, and the blue Himalayan poppy.
    • Animal Life: Includes rare species like the Asiatic black bear, snow leopard, musk deer, brown bear, red fox, and the Himalayan monal bird.
    [UPSC 2019] Which one of the following National Parks lies completely in the temperate alpine zone?

    Options: (a) Manas National Park (b) Namdapha National Park (c) Neora Valley National Park (d) Valley of Flowers National Park*