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  • Special Intensive Revision of electoral rolls leaves about 20 lakh names flagged in Punjab

    Why in the News

    The first phase of the Special Intensive Revision (SIR) of electoral rolls in Punjab ended with about 20 lakh names flagged as uncollectable. Authorities cited permanent relocation, absence, death and duplicate entries, and opened a claims and objections window.

    What is the Special Intensive Revision (SIR)?

    1. Roll purification drive: SIR is an Election Commission of India (ECI) exercise of house to house enumeration to update and cleanse the electoral roll of ineligible or dead entries.
    2. Fresh verification: Electors submit enumeration forms and are mapped afresh, unlike a routine summary revision that only adds or deletes on application.

    What did the first phase in Punjab find?

    1. Scale of enumeration: Against 2,14,61,043 registered electors as of 9 June, about 1,93,94,408 submitted enumeration forms by 3 August across all 23 districts and 117 constituencies.
    2. Uncollectable forms: A total of 20,66,635 forms, or 9.63% of electors, were categorised as absent, shifted, dead or duplicate.
    3. Breakdown: These include 5,74,568 dead, 4,12,715 untraceable or absent, 9,44,131 permanently shifted, and 1,19,145 enrolled elsewhere.
    4. Mapping: About 93.40% of electors in the draft roll have been mapped.

    Why does the ECI conduct an intensive revision?

    1. Purity of rolls: Removing dead, shifted and duplicate entries reduces the scope for impersonation and bogus voting.
    2. Universal inclusion: House to house verification aims to capture genuine electors missed by application based revision.

    What are the challenges to the SIR exercise?

    1. Wrongful exclusion: Genuine electors who are temporarily absent risk deletion, as seen in disputes over detention and citizenship claims.
    2. Burden of proof: Placing the onus on electors to submit forms can disadvantage migrants, the poor and the less literate.
    3. Enumerator capacity: House to house coverage depends on adequate, trained booth level officers within a tight timeline.
    4. Data reconciliation: Matching shifted and duplicate entries across constituencies and states is error prone.
    5. Political contestation: Large deletions invite allegations of targeted disenfranchisement, straining trust in the roll.

    Conclusion

    The SIR is at the draft roll stage in Punjab, with about 20 lakh names flagged for removal after house to house enumeration. Any person inadvertently left out can file claims and objections between 13 August and 12 September, and notices to unmapped electors will be issued from 13 August, after which the final roll will be published.

    Back2Basics:

    Electoral roll revision

    1. Electoral rolls are prepared and revised under the Representation of the People Act, 1950 and the Registration of Electors Rules, 1960.
    2. The Election Commission of India superintends preparation and revision of rolls.
    3. Revisions may be intensive, involving fresh house to house enumeration, or summary, involving updates on claims and objections.
    4. Eligibility requires Indian citizenship, age of 18 years and ordinary residence in the constituency.

    PYQ Relevance

    [UPSC 2017] For election to the Lok Sabha, a nomination paper can be filed by
    (a) Anyone residing in India.
    (b) A resident of the constituency from which the election is to be contested.
    (c) Any citizen of India whose name appears in the electoral roll of a constituency.
    (d) Any citizen of India.
    Answer: (c)

  • Supreme Court extends Section 498A cruelty protection to live in relationships

    Why in the News

    The Supreme Court held that protection against cruelty under Section 498A of the Indian Penal Code (IPC), 1860 extends to women in live-in relationships, provided the partners share a genuine intent to marry. The ruling is based on Article 14 (Right to Equality).

    What is Section 498A?

    • Penalized cruelty by a husband or his relatives against a woman.
    • Now corresponds to Section 85 of the Bharatiya Nyaya Sanhita (BNS), 2023.
    • Traditionally applied only to legally valid marriages.

    Supreme Court Ruling

    • Adopted a purposive interpretation to address changing social realities.
    • Extended protection to women in live-in relationships where there is: A relationship in the nature of marriage, and A genuine intent to marry.
    • Held that denying such protection violates Article 14.

    Why is the Domestic Violence Act Not Enough?

    • The Protection of Women from Domestic Violence (PWDV) Act, 2005 covers women in relationships in the nature of marriage.
    • However, it provides civil remedies such as: Protection orders, Residence orders, and Maintenance
    • Section 85, BNS provides criminal punishment, offering stronger deterrence.

    Challenges

    • Difficulty in proving intent to marry.
    • Limited documentary evidence in live-in relationships.
    • Possibility of misuse.
    • Overlap between civil remedies under the PWDV Act and criminal proceedings.

    Important Constitutional Provisions

    • Article 14: Equality before law.
    • Article 21: Right to life and personal liberty, including dignity and autonomy.

    Landmark Judgments

    • D. Velusamy v. D. Patchaiammal (2010): Defined “relationship in the nature of marriage.”
    • Indra Sarma v. V.K.V. Sarma (2013): Laid down factors for determining live-in relationships under the PWDV Act.

    [2019] Which Article of the Constitution of India safeguards one’s right to marry the person of one’s choice?

    (a) Article 19

    (b) Article 21

    (c) Article 25

    (d) Article 29

  • What is the Public Examinations (Prevention of Unfair Means) Amendment Bill

    Why in the News?

    Repeated crises in NEET 2024, UGC NET 2024 and NEET 2026 have exposed a gap in how examination breaches are defined and prevented. Despite the Public Examinations (Prevention of Unfair Means) Act, 2024, closure reports found no prosecutable conventional paper leak, raising the deeper question of institutional accountability.

    What is the Public Examinations (Prevention of Unfair Means) Act, 2024?

    1. Anti cheating law: It criminalises organised cheating, paper leaks and impersonation in public examinations conducted by central agencies.
    2. Penalties: It prescribes stringent imprisonment and fines and targets service providers and organised gangs, not candidates alone.

    What counts as a paper leak?

    1. Traditional meaning: A paper leak is the unauthorised disclosure of a printed question paper before the exam, during printing, storage or transport.
    2. Broader compromise: Confidential material can leak at question setting, moderation, translation or digitisation, disclosing selected questions without any printed paper being recovered.

    Why do repeated crises yield no prosecutable evidence?

    1. Investigation focus: Probes trace physical papers, so a compromise at the source may never produce recoverable evidence of a conventional leak.
    2. Closure reports: The Central Bureau of Investigation (CBI) filed closure reports in the 2024 cases, reportedly finding no prosecutable leak under the Bharatiya Nyaya Sanhita (BNS), 2023 or this Act.
    3. Detection failure: In NEET 2026, official action followed a whistleblower’s complaint rather than the exam’s own security or intelligence systems.

    Where does primary accountability lie?

    1. Examination authority: Prevention rests with the examination body, here the National Testing Agency (NTA), not with the CBI, police or courts that act only after a crisis.
    2. Lifecycle safeguards: Accountability must run from selection of question setters and translators to centres, digital systems, evaluation and result processing.

    What is the proposed way forward?

    1. White Paper: A committee headed by the former Unique Identification Authority of India (UIDAI) chairman is to document the full spectrum of breaches across the three examinations.
    2. Integrity framework: This should underpin a Public Examination Integrity Framework (PEIF) prescribing standardised end to end standard operating procedures, conflict of interest management and cybersecurity audits.

    What are the challenges to examination integrity?

    1. Insider access: A small number of individuals with privileged access at setting and moderation are the hardest risk to police.
    2. Coaching ecosystems: Organised coaching networks create demand and channels for leaked or guided material.
    3. Cybersecurity: Digitised question banks and candidate data widen the attack surface beyond physical papers.
    4. Scale: Examinations covering millions of candidates across thousands of centres magnify any single point of failure.
    5. Attribution and prosecution: Source compromises leave little physical evidence, making conviction under penal law difficult.
    6. Conflict of interest: Repeated engagement of the same experts and vendors without rotation weakens independent oversight.

    Conclusion

    The central issue is not the absence of a law but the failure to detect and prevent breaches early. Public confidence will be restored by an examination system with lifecycle safeguards and clear institutional accountability, not by harsher penalties or more logistics after the fact.

    Back2Basics:

    Public Examinations (Prevention of Unfair Means) Act, 2024

    1. Central legislation to prevent unfair means in public examinations conducted by bodies like the NTA, UPSC, SSC, railways and banking recruitment.
    2. Defines offences including paper leaks, impersonation and tampering with computer systems.
    3. Provides for imprisonment of three to ten years and fines up to one crore rupees for organised crimes.
    4. Makes offences cognisable, non bailable and non compoundable.

    Defined Unfair Means

    1. Unauthorized access to or leakage of question papers or answer keys.
    2. Assisting candidates physically or via communication devices inside exam halls.
    3. Tampering with computer networks, hardware, or customized software resources.
    4. Creation of fake examination authorities or issuance of bogus admit cards to cheat

    PYQ Relevance

    [UPSC 2024] What are the aims and objects of the recently passed and enforced, The Public Examination (Prevention of Unfair Means) Act, 2024? Whether University/State Education Board examinations, too, are covered under the Act?

    Linkage: The question tests the objectives, scope and limitations of the Public Examinations (Prevention of Unfair Means) Act, 2024. The article evaluates the Act’s implementation, showing that institutional safeguards and accountability remain as important as legal penalties in ensuring examination integrity.

  • Parliamentary panel flags that only 30% of urban households under AMRUT have sewerage

    Why in the News

    The Parliamentary Standing Committee on Housing and Urban Affairs reported that only about 30% of urban households under the Atal Mission for Rejuvenation and Urban Transformation (AMRUT) have a sewerage connection. It flagged slow progress and inter state gaps in sanitation infrastructure.

    What is AMRUT?

    1. Flagship civic scheme: AMRUT is the Union government’s flagship urban civic infrastructure mission, providing water supply, sewerage, septage, stormwater drains and green spaces.
    2. Two phases: AMRUT (2015 to 2021) covered 500 cities, and AMRUT 2.0 (from 2021) covers all statutory towns with a focus on universal water and sewerage coverage.

    What did the parliamentary panel find?

    1. Low sewerage coverage: Of 11.32 crore urban households, only 3.44 crore had sewerage connections and 2.84 crore relied on septage systems, per the City Water Balance Plans (2025).
    2. Inter state variation: Madhya Pradesh, Tamil Nadu, West Bengal, Odisha, Jharkhand and Bihar depend more on septage than on sewer networks.
    3. Network gap: Of 59,261 km of approved sewer network, only 27,418 km has been laid so far.

    Why does the sewerage gap persist?

    1. Small share of projects: Of 8,743 projects approved under AMRUT 2.0, only 594 (about 6.79%) relate to sewerage and septage management.
    2. Slow completion: Only 104 of those 594 sewerage projects (17.51%) are complete, while 398 (67%) remain under implementation.
    3. Funds pending: Only Rs 22,762 crore of the Rs 66,059 crore committed as central assistance has been released.

    What did the committee recommend?

    1. Database and audit: The Ministry should build a database of existing sewer networks, functional status and household connectivity gaps and carry out periodic assessments.
    2. End manual cleaning: Manual cleaning of sewers and septic tanks should be eliminated.

    Challenges to urban sanitation delivery

    1. Weak urban local bodies: Municipal bodies often lack the finances and technical staff to build and operate sewage treatment plants.
    2. Trunk versus last mile: Laying trunk sewer lines without household connections leaves treatment capacity underused.
    3. Cost recovery: User charges for sewerage are politically difficult, so operation and maintenance is chronically underfunded.
    4. Land and legacy: Retrofitting sewer networks into dense, unplanned settlements is slow and expensive.
    5. Faecal sludge gap: Cities dependent on septic tanks lack faecal sludge treatment plants, so untreated waste re enters water bodies.

    AMRUT

    1. Launched in 2015 by the Ministry of Housing and Urban Affairs.
    2. Aims at universal household water supply and sewerage or septage coverage in urban areas.
    3. AMRUT 2.0, launched in 2021, targets all statutory towns and water body rejuvenation.
    4. Beneficiaries are urban households, with a stated focus on the urban poor.

    [2022] Consider the following statements
    1. The India Sanitation Coalition is a platform to promote sustainable sanitation and is funded by the Government of India and the World Health Organization.
    2. The National Institute of Urban Affairs is an apex body of the Ministry of Housing and Urban Affairs in Government of India and provides innovative solutions to address the challenges of Urban India.
    Which of the statements given above is/are correct?

    [A] 1 only

    [B] 2 only

    [C] Both 1 and 2

    [D] Neither 1 nor 2

  • Rajya Sabha clears the Registration of Births and Deaths (Amendment) Bill, 2026

    Why in the News

    The Rajya Sabha passed the Registration of Births and Deaths (Amendment) Bill, 2026, after the Lok Sabha cleared it earlier. The amendment requires an order from a Judicial Magistrate First Class for any birth or death registered more than two years after the event, tightening the civil registration system toward universal registration.

    What is the Registration of Births and Deaths Act, 1969?

    1. Legal basis: The Registration of Births and Deaths Act, 1969 makes recording of every birth and death compulsory and lays down the machinery of registrars for the Civil Registration System.
    2. Vital statistics: Registration data feeds official birth and death rates and underpins the issue of legal identity documents.

    What does the amendment change?

    1. Stricter delayed registration: It amends sub section (3) of Section 13 so that registrations delayed beyond two years need an order from a Judicial Magistrate First Class.
    2. Existing tier retained: Delays of up to two years will continue to require an order from a district, sub divisional or authorised executive magistrate.

    Why tighten delayed registration?

    1. Curbing misuse: The government stated that late registration beyond two years was being misused to create fraudulent records.
    2. Guarding the rolls: Ministers argued the change stops fictitious entries from becoming voters and prevents registration of persons born elsewhere.
    3. Universal registration: The stated aim is that every child born is registered and every death recorded, encouraging timely reporting.

    What concerns were raised?

    1. Overburdened magistrates: Members warned that judicial magistrates are already overburdened, so the requirement could delay genuine registrations.
    2. Uneven capacity: The number of judicial magistrates varies sharply across states, creating disparity in access.
    3. Ease of registration: Some urged easier registration through camps and door to door drives and removal of penalties rather than added judicial steps.

    What are the challenges to universal civil registration?

    1. Rural and remote reach: Home births and deaths in remote areas often go unreported because families lack awareness of the reporting window.
    2. Migrant populations: Mobile and migrant families struggle to register events at their place of residence, producing gaps and duplicate records.
    3. Institutional coordination: Registration depends on hospitals, panchayats and municipal registrars whose reporting discipline varies widely.
    4. Cause of death recording: Medical certification of cause of death remains weak outside large hospitals, limiting the quality of vital statistics.
    5. Added judicial load: Routing older registrations through magistrates can create backlogs where courts are already understaffed.

    Conclusion

    The amendment tightens the civil registration system by making very late registration a judicial act rather than an administrative one. It now proceeds to receive the President’s assent, after which state rules and registrar capacity will determine whether it improves accuracy without excluding the genuinely late.

    Back2Basics:

    Registration of Births and Deaths Act, 1969

    1. Central legislation administered through the Registrar General of India and state Chief Registrars.
    2. Makes registration of births, deaths and stillbirths compulsory across the country.
    3. Provides for the Civil Registration System that generates continuous vital statistics.
    4. Amended in 2023 to enable a national database and use of birth certificates as a single document for various services.

    The Registrar General and Census Commissioner of India (RGI)

    1. It is the top government authority under the Ministry of Home Affairs responsible for conducting the country’s decennial Census, managing demographic surveys, and overseeing civil registration.

    Key Functions and Responsibilities

    1. Census Operations: Plans, conducts, and analyzes India’s large-scale population censuses.
    2. Civil Registration: Implements the Registration of Births and Deaths Act (1969), maintaining national vital statistics via the Civil Registration System.
    3. Linguistic & Demographic Surveys: Conducts linguistic surveys and tracks socio-economic and population indicators

  • Supreme Court extends mandatory third party motor insurance and floats a no-insurance, no fuel pilot

    Why in the News

    The Supreme Court extended mandatory Third-Party Motor Insurance to 4 years for new cars and 6 years for new two-wheelers. It also proposed a “No Insurance, No Fuel” pilot to improve compliance.

    What is Third-Party Motor Insurance?

    • Mandatory under Section 146 of the Motor Vehicles Act, 1988.
    • Covers compensation for injury, death, or property damage caused to a third party.
    • Does not cover damage to the insured vehicle or owner.

    Supreme Court Directions

    • Mandatory third-party cover:
      • 4 years for new cars.
      • 6 years for new two-wheelers.
    • Link Automatic Number Plate Recognition (ANPR) cameras with:
      • Insurance Information Bureau of India (IIB)
      • VAHAN portal.
    • Enable police to verify insurance in real time through mobile applications.
    • Explore a “No Insurance, No Fuel” pilot.

    Why is Enforcement Needed?

    • Around 56% of vehicles reportedly operate without valid third-party insurance.
    • Victims face delays in compensation.
    • Insurance often lapses after the initial mandatory period.

    Challenges

    • Lack of integration among IIB, VAHAN, and police databases.
    • Low renewal rates, especially for two-wheelers.
    • Concerns over denying fuel as an essential service.
    • Weak penalties and limited rural enforcement.

    Comprehensive vs Third-Party Insurance

    • Third-Party Insurance: Mandatory; covers third-party losses only.
    • Comprehensive Insurance: Optional; covers both third-party liability and damage to the insured vehicle.

    Key Platforms

    • VAHAN: National vehicle registration database managed by Ministry of Road Transport and Highways (MoRTH).
    • ANPR: Automatic Number Plate Recognition technology for vehicle identification.
    • IIB: Insurance Information Bureau of India, maintains insurance-related databases.

    Insurance Regulatory and Development Authority of India (IRDAI)

    • Established under: Insurance Regulatory and Development Authority Act, 1999.
    • Headquarters: Hyderabad.
    • Functions: Regulates insurance companies and intermediaries. Protects policyholders’ interests. Prescribes solvency, pricing, and disclosure norms.

  • Op ed asks why mineral rich districts stay poor, spotlighting the District Mineral Foundation Trust

    Why in the News

    Jharkhand holds nearly 40% of India’s mineral wealth, yet many of its mining districts remain among the least developed. The gap exposes the failure of the District Mineral Foundation Trust (DMFT) to channel mining revenue to affected communities.

    What is the District Mineral Foundation Trust (DMFT)?

    1. Origin: The DMFT is a trust established in 2015 in every district affected by mining to reinvest a share of mining revenue in local welfare.
    2. Rationale: It was set up because mining affected communities bear the greatest social and environmental costs of extraction but receive the least share of its benefits.
    3. Funding: It is financed by contributions that mine lease holders pay as a proportion of royalty.

    Why do mineral rich districts stay poor?

    1. Auction delay: Jharkhand delayed auctions after leases expired, while Odisha auctioned promptly.
    2. Production stagnation: Delayed auctions cut production, which stayed near 23 million tonnes in Jharkhand.
    3. Royalty shortfall: Lower production means lower royalty collections.
    4. Fund starvation: Lower royalties translate into reduced DMFT contributions, so affected villages receive fewer resources.
    5. Spillover decline: As mines shut and leases expired, transport operators, eateries and shops lost business and youth migrated for work.

    How do Jharkhand and Odisha compare?

    1. Auctions: Since 2019-20 India auctioned 434 mineral blocks, Odisha 45 and Jharkhand only three, despite Jharkhand being the richest mineral bearing state.
    2. Production: Between 2018-19 and 2024-25 Odisha’s iron ore output rose from about 120 to nearly 180 million tonnes, while Jharkhand stayed near 23 million tonnes.
    3. Revenue: In 2025-26 Odisha earned nearly Rs 46,000 crore in mining revenue against Jharkhand’s Rs 22,000 crore, though its deposits are less than half of Jharkhand’s.
    4. DMFT accumulation: Nearly Rs 3,700 crore accumulated under West Singhbhum’s DMFT between 2016 and 2026 with little visible welfare gain.

    Why has the money not reached communities?

    1. Missing disclosures: DMFT Rules require every district to publish annual reports, budgets, approved works and beneficiary details.
    2. Opaque records: Across Jharkhand these disclosures are missing, outdated or inaccessible.
    3. Accountability gap: Communities have little means of knowing how thousands of crores collected in their name were spent.

    Challenges to the DMFT

    1. Transparency deficit: Poor disclosure prevents communities from tracking fund use.
    2. Governance and political will: Delayed auctions reflect weak administrative resolve to run the mining economy.
    3. Fund underutilisation: Accumulated funds often stay unspent or are diverted to works unrelated to affected people.
    4. Elite capture: Weak beneficiary identification lets benefits bypass the poorest households.
    5. Cyclical dependence: Fund inflows fall whenever production and royalties decline, starving welfare when it is most needed.
    6. Weak grievance redress: Affected communities lack a clear channel to question spending decisions.

    Conclusion

    The DMFT debate is about restoring trust, not merely accounting. Before announcing new investment summits, Jharkhand must first show it can manage the mineral resources and welfare funds it already possesses.

    Back2Basics: District Mineral Foundation (DMF)

    1. Basis: established under the Mines and Minerals (Development and Regulation) Amendment Act, 2015.
    2. Nature: a statutory non profit trust in every mining affected district.
    3. Funding: contributions from mine lease holders as a percentage of royalty.
    4. Fund use: implemented through the Pradhan Mantri Khanij Kshetra Kalyan Yojana (PMKKKY) for welfare of mining affected people.
    5. Objective: to work for the interest and benefit of persons and areas affected by mining.

    Matching Previous Year Question

    “[2016] What is/are the purpose/purposes of ‘District Mineral Foundations’ in India?
    1. Promoting mineral exploration activities in mineral-rich districts
    2. Protecting the interests of the persons affected by mining operations
    3. Authorizing State Governments to issue licenses for mineral exploration
    (a) 1 and 2 only
    (b) 2 only
    (c) 1 and 3 only
    (d) 1, 2 and 3
    Answer: (b)”

  • RBI monetary policy explainer ahead of the MPC decision

    Why in the News

    The Monetary Policy Committee (MPC) of the Reserve Bank of India (RBI) is set to announce its bi-monthly monetary policy. Most analysts expect it to keep the repo rate unchanged amid global economic uncertainty.

    What is the Monetary Policy Committee (MPC)?

    • The MPC decides the policy repo rate to maintain price stability while supporting economic growth.
    • Constituted under: Reserve Bank of India Act, 1934 (amended in 2016).
    • It meets every two months to review inflation and growth.

    Repo Rate & Inflation Target

    • Repo Rate: The interest rate at which the RBI lends short-term funds to commercial banks.
    • Inflation Target: 4%, with a tolerance band of 2%-6% under the Flexible Inflation Targeting (FIT) framework.

    Factors Considered by MPC

    • Rising crude oil prices.
    • US-Iran geopolitical tensions.
    • Weak monsoon and El Niño increasing food inflation.
    • Mixed domestic growth indicators.
    • Policy stance of major central banks (US Fed, ECB, BoJ, BoE).

    Challenges

    • Time lag in monetary policy transmission.
    • Supply-side inflation (food and fuel) beyond RBI’s control.
    • Balancing inflation with economic growth.
    • External risks affecting capital flows and the rupee.
    • Uncertain global and domestic economic conditions.

    Value Addition

    • Flexible Inflation Targeting (FIT): Adopted in 2016 to maintain inflation at 4% ± 2%.
    • Monetary Policy Tools: Repo Rate, Standing Deposit Facility (SDF), Cash Reserve Ratio (CRR), Statutory Liquidity Ratio (SLR), and Open Market Operations (OMOs).

    “[2017] Which of the following statements is/are correct regarding the Monetary Policy Committee (MPC)?
    1. It decides the RBI’s benchmark interest rates.
    2. It is a 12-member body including the Governor of RBI and is reconstituted every year.
    3. It functions under the chairmanship of the Union Finance Minister.
    (a) 1 only
    (b) 1 and 2 only
    (c) 3 only
    (d) 2 and 3 only

  • FCNR (B) inflows of nearly $49 billion fail to lift the rupee

    Why in the News

    India received nearly USD 49 billion during June-July 2026 through the Foreign Currency Non Resident (Bank) [FCNR(B)] swap window, foreign loans, and bond investments. However, the Indian Rupee (INR) remained stable at around ₹95.38/USD, unlike the sharp appreciation seen under a similar scheme in 2013.

    What are FCNR(B) Deposits and the Swap Window?

    FCNR(B) Deposits

    • Foreign currency term deposits maintained by Non-Resident Indians (NRIs) with Indian banks.
    • Protect depositors from exchange rate risk.
    • Tenure: 1-5 years.

    Swap Window

    • A facility by the Reserve Bank of India (RBI) where banks swap FCNR(B) dollar deposits for rupees.
    • Since dollars go directly to the RBI, they do not increase dollar supply in the forex market.

    Why Didn’t the Rupee Strengthen?

    • Dollar inflows bypassed the open forex market.
    • RBI sold dollars to stabilize the rupee amid global uncertainty.
    • Banks hedged future foreign currency liabilities.
    • Higher crude oil prices and a stronger US dollar offset the impact of inflows.

    Challenges

    • Strong US dollar and geopolitical risks.
    • Lower Foreign Direct Investment (FDI) inflows.
    • Rising crude oil prices widening the Current Account Deficit (CAD).
    • Risk of reversal of FCNR(B) deposits after the swap window ends.

    Value Addition

    • Spot Market: Immediate currency exchange.
    • Forward Market: Currency exchange at a future date and predetermined rate.
    • Foreign Exchange Reserves comprise:
      • Foreign Currency Assets (FCA) (largest component)
      • Gold
      • Special Drawing Rights (SDRs)
      • IMF Reserve Position

    Back2Basics:

    • FCNR(B): Foreign Currency Non Resident (Bank) Deposit.
    • Eligible: NRIs and Overseas Citizens of India (OCIs).
    • Tenure: 1-5 years.
    • Exchange Rate Risk: Borne by the bank/RBI, not the depositor.

    “[2017] Which of the following has/have occurred in India after its liberalization of economic policies in 1991?
    1. Share of agriculture in GDP increased enormously.
    2. Share of India’s exports in world trade increased.
    3. FDI inflows increased.
    4. India’s foreign exchange reserves increased enormously.
    (a) 1 and 4 only
    (b) 2, 3 and 4 only
    (c) 2 and 3 only
    (d) 1, 2, 3 and 4

  • SEBI Closing Auction Session goes live and moves index closing values

    Why in the News

    The Closing Auction Session (CAS) became operational from 3 August 2026 for stocks with Derivative Contracts. During its initial days, the National Stock Exchange (NSE) Nifty 50 and Bombay Stock Exchange (BSE) Sensex recorded unusually large differences in their closing values.

    What is the Closing Auction Session (CAS)?

    • The Closing Auction Session (CAS) is a dedicated 20-minute trading block (3:15 PM to 3:35 PM) introduced by SEBI on August 3, 2026.
    • It pools end-of-day buy and sell orders for eligible stocks to discover a single equilibrium closing price, replacing the final 30-minute VWAP method.

    What is Volume Weighted Average Price (VWAP)?

    • The Volume Weighted Average Price (VWAP) is the average price of a stock weighted by the trading volume, giving greater importance to prices with higher traded volumes.

    Why did Nifty and Sensex Diverge?

    • Separate CAS order books on the NSE and BSE.
    • Different index composition (Nifty 50: 50 stocks; Sensex: 30 stocks).
    • Different weightages of constituent stocks.
    • Initial adjustment to the new auction mechanism.

    Challenges

    • Temporary benchmark divergence.
    • Higher tracking error for Exchange Traded Funds (ETFs) and index funds.
    • Residual risk of price manipulation.
    • Liquidity concerns in less-traded stocks.
    • Operational adaptation by brokers and investors.

    Key Concept:

    • Equilibrium Price: The price at which the maximum quantity of buy and sell orders can be matched during the auction.
    • Derivative Contracts: Financial instruments whose value is derived from an underlying asset such as stocks or indices. Examples: Futures Contracts and Options Contracts
    • Collectively known as the Futures and Options (F&O) segment.

    Securities and Exchange Board of India (SEBI)

    • Established: 1988 (Statutory status in 1992).
    • Governing Act: Securities and Exchange Board of India Act, 1992.
    • Headquarters: Mumbai.
    • Functions: Protect investors. Regulate and develop the securities market. Regulate stock exchanges, mutual funds, and market intermediaries.