The President gave assent to the Prevention of Insults to National Honour (Amendment) Bill, 2026, making it law. The amendment criminalises intentional disruption or prevention of the singing of the National Song Vande Mataram, extending to it the legal protection currently accorded to the National Anthem.
What is the Prevention of Insults to National Honour (Amendment) Bill, 2026?
Core provision: The Prevention of Insults to National Honour (Amendment) Bill, 2026, criminalises intentional disruption or prevention of the singing of the National Song Vande Mataram.
Parent statute: It amends the Prevention of Insults to National Honour Act, 1971, which already penalises insults to the National Flag, the Constitution, and the National Anthem.
Equal status: The legislation grants Vande Mataram the same legal protection as the National Anthem, Jana Gana Mana.
Legislative passage: The Lok Sabha passed the Bill on 30 July and the Rajya Sabha cleared it a day earlier, with Presidential assent completing enactment.
What are the concerns raised on implementation?
Practicality of enforcement: A senior Opposition member questioned whether respect and patience for the song can be legislated.
Duration burden: A full rendition of Vande Mataram lasts about three minutes and ten seconds, against roughly 52 seconds for Jana Gana Mana.
Standing time: Where a State Song precedes both, audiences could be expected to stand for nearly six minutes before and after every official function.
Counterproductive risk: The stated concern is that mandating full rendition could reduce rather than promote respect for the National Song.
About National Symbols in India
National Anthem: Jana Gana Mana, adopted by the Constituent Assembly on 24 January 1950, protected under the Prevention of Insults to National Honour Act, 1971.
National Song: Vande Mataram, composed by Bankim Chandra Chatterjee, given equal status with the National Anthem by the Constituent Assembly on 24 January 1950.
National Flag: The Tiranga, governed by the Flag Code of India, 2002, and the Prevention of Insults to National Honour Act, 1971.
Legal duty: Article 51A(a) makes it a fundamental duty of every citizen to respect the Constitution, the National Flag, and the National Anthem.
Statutory Framework Governing National Honour
Prevention of Insults to National Honour Act, 1971: Penalises insults to the National Flag, the Constitution, and the National Anthem.
2026 Amendment: Extends protection to the National Song Vande Mataram against intentional disruption.
Flag Code of India, 2002: Consolidates conventions and instructions on display and use of the National Flag.
Emblems and Names (Prevention of Improper Use) Act, 1950: Restricts improper use of national emblems and names.
Back2Basics: Vande Mataram
Author: Bankim Chandra Chatterjee, who composed it and later included it in the novel Anandamath.
Historical role: It became a rallying song of the freedom movement, first sung at the 1896 session of the Indian National Congress.
Constitutional status: The Constituent Assembly resolved on 24 January 1950 that it shall have equal honour with the National Anthem, Jana Gana Mana.
Original language: Composed largely in Sanskritised Bengali.
Full rendition: A complete rendition runs about three minutes and ten seconds.
A Parliamentary Standing Committee flagged a major gap between training and employment under the Deen Dayal Upadhyaya Grameen Kaushalya Yojana (DDU-GKY), highlighting low wages, poor retention and distress migration.
What is DDU-GKY?
Ministry: Ministry of Rural Development.
Launched: 2014.
Target: Poor rural youth aged 15–35 years.
Nature: Placement-linked skill development scheme.
Training providers are assessed on training, placement and post-placement retention.
Implemented through Project Implementing Agencies (PIAs).
Key Findings of the Committee
18.38 lakh youth trained and 11.94 lakh placed as of March 2026.
Low wages and relocation costs lead to early job exits.
9.65 lakh women trained and 6.03 lakh placed.
PIAs focus more on initial placement than sustained employment.
Major Challenges
Skill-training does not match labour market demand.
Poor training quality and infrastructure.
Low wages reduce job retention.
Migration creates financial and social pressures.
Weak post-placement tracking.
Committee Recommendations
Near 100% placement tracking.
Mandatory industry linkages and local placement drives.
District-level placement cells.
Migration assistance, mentorship and retention support.
Assess PIAs on sustained employment, not just initial placement.
Set and monitor minimum wage employment targets.
Skill Development Initiatives
Pradhan Mantri Kaushal Vikas Yojana (PMKVY)
DAY-NRLM
Rural Self Employment Training Institutes (RSETIs)
Startup Village Entrepreneurship Programme (SVEP)
Skill India Digital
[2023, GS2, 15 marks] Skill development programs have succeed in increasing human resources supply to various sectors. In the context of the statement analyze the linkages between education, skill and employment.”
[2018] With reference to Pradhan Mantri Kaushal Vikas Yojana, consider the following statements:
It is the flagship scheme of the Ministry of Labour and Employment.
It, among other things will also impart training in soft skills, entrepreneurship, financial and digital literacy.
It aims to align the competencies of the unregulated workforce of the country to the National Skill Qualification Framework.
Which of the statements given above is/are correct?
Parliament passed the Tribunals Reforms Bill, 2026, which establishes a National Tribunals Commission to oversee the selection and administration of tribunals. The Bill responds to a Supreme Court direction, yet it retains executive control over the commission’s appointments and finances. This exposes the tension between insulating tribunals from the ministries they review and preserving the government’s grip over the same bodies.
What is the National Tribunals Commission (NTC)?
Definition: The National Tribunals Commission (NTC) is a proposed statutory body to oversee the appointment, service conditions, and administration of tribunals under a common framework covering 16 tribunals.
Composition: It is to be headed by a former Supreme Court judge or a former chief justice of a High Court, supported by two judicial members and two technical members.
Selection method: Appointments to member tribunals are to be made through a search cum selection system run by the commission, supported by a dedicated NTC Secretariat.
Origin: The Supreme Court first recommended an independent statutory commission of this kind in the Rojer Mathew judgment of 2019.
Why were tribunals created in the first place?
Speed and specialisation: Tribunals allow specialists to settle technical disputes faster than regular courts, in areas such as taxation, company law, securities, and the environment.
Complementary role: They do not replace constitutional courts but supplement the judicial system with specialised adjudication.
Economic stake: Timely resolution frees locked capital and restores investor confidence, linking ease of justice to ease of doing business.
Constitutional basis:Articles 323A and 323B provide for administrative tribunals on service matters and tribunals on specified subjects respectively.
How has tribunal jurisprudence developed?
S.P. Sampath Kumar, 1987: Upheld tribunals but held that their decisions remain subject to review by constitutional courts.
L. Chandra Kumar, 1997: Held that judicial review by High Courts under Article 226 is part of the basic structure and cannot be ousted by tribunals.
Rojer Mathew, 2019: Recommended an independent statutory National Tribunals Commission and held that defining who is qualified to exercise judicial power is an essential legislative function that cannot be left to executive rulemaking.
Madras Bar Association, 2025: Struck down provisions Parliament had reenacted, restored the earlier framework, and gave the government four months to establish the commission.
Structural flaw addressed: Tribunals had historically been administered by the same ministries whose decisions they were meant to review.
What are the other major changes the Bill introduces?
Five year terms: Restores five year terms for tribunal members in place of shorter tenures the courts had rejected.
Uniform service conditions: Introduces uniform service conditions across tribunals to end variation between ministries.
National Tribunals Data Grid: Provides for a data grid to track pendency and disposal across tribunals.
Pending appointments protected: Does not disturb appointments already in the pipeline.
Rationalisation retained: Follows the earlier reduction of tribunals from 26 to 19 and then to 16.
Where does the genuine tension in the Bill lie?
Autonomy versus executive control: The commission is meant to insulate tribunals from executive control, yet the Centre still appoints its members and retains substantial influence over its finances and administration.
Delegation to executive rules under Section 14: Qualifications, manner of selection, salaries, and service conditions of members are left to future executive rules, the very delegation the Rojer Mathew reasoning had resisted.
Ministerial screening under Section 16: A ministry first screens a complaint against a member before it passes to the commission for inquiry.
Consultation, not concurrence: The Centre consults the Chief Justice of India only for the chairperson and judicial members, retaining the decisive voice.
Representation gap: Members flagged that very few tribunal members come from Scheduled Caste and Scheduled Tribe communities, with only one tribal judge recorded so far.
What are the challenges to the tribunal system?
Executive dependence: Funding, staffing, and infrastructure of many tribunals still flow from the parent ministry whose orders they review.
Vacancies and pendency: Delayed appointments leave benches vacant and cases pending, defeating the promise of speedy justice.
Inconsistent service conditions: Divergent tenures and salaries across tribunals weaken independence and deter qualified members.
Access barriers: Concentration of benches in a few cities makes tribunals hard to reach for litigants from distant areas.
Weak enforcement: Tribunal orders are sometimes not implemented, as seen in inter State water sharing disputes.
Conclusion
The Tribunals Reforms Bill, 2026, creates the long directed National Tribunals Commission and restores protections the Supreme Court had earlier upheld. The central weakness is that a body designed to insulate tribunals from executive control remains subject to executive appointment, removal, and finance. Genuine autonomy will require the government to surrender its power to appoint or remove members at will, a change the current text does not make.
Back2Basics
What is Judicial Review?
About: Judicial review is the power of constitutional courts to examine the validity of legislative and executive action against the Constitution.
Rationale: It protects fundamental rights and the separation of powers by preventing any organ from exceeding constitutional limits.
Basic structure: In L. Chandra Kumar, the Supreme Court held that judicial review by the High Courts and the Supreme Court is part of the basic structure and cannot be excluded, including over tribunal decisions.
Constitutional Framework Governing Tribunals
Article 323A: Empowers Parliament to establish administrative tribunals for disputes over recruitment and service conditions of public servants.
Article 323B: Empowers appropriate legislatures to set up tribunals for specified matters such as taxation, industrial and labour disputes, and elections.
Article 226: Preserves the High Courts’ writ jurisdiction, which tribunals cannot oust.
Article 227: Preserves the High Courts’ power of superintendence over tribunals within their territory.
Article 136: Preserves the Supreme Court’s discretionary appellate jurisdiction over tribunal decisions.
Way Forward
Full commission autonomy: Vest appointment, removal, and finance of the commission in an independent process free of executive dominance.
Statutory qualifications: Fix member qualifications and service conditions in the parent statute rather than delegated rules.
Timely appointments: Ensure a search cum selection cycle that fills vacancies before benches fall idle.
Inclusive representation: Widen the pool so that Scheduled Caste, Scheduled Tribe, and other under represented groups are considered for tribunal membership.
Enforcement mechanism: Provide a clear route to enforce tribunal orders, including in inter State disputes.
PYQ Relevance
[UPSC 2025] Comment on the need for administrative tribunals as compared to the court system. Assess the impact of the recent tribal reforms through rationalisation of tribunals made in 2021.
Linkage: The PYQ directly relates to the need, role and rationalisation of tribunals as an alternative to regular courts. The NTC debate highlights concerns of tribunal independence, executive control, vacancies and effective administration of justice.
The government agreed to move a resolution referring the Foreign Contribution (Regulation) Amendment Bill, 2026, to a Joint Parliamentary Committee after protests from the Opposition, State Assemblies, and Christian institutions. The referral exposes the core tension in the Bill: the State’s power to take over foreign funded assets when a registration lapses, set against the property and autonomy of charitable, educational, and religious institutions built partly on foreign donations.
What is the Foreign Contribution (Regulation) Act, 2010 (FCRA)?
Core function: The Foreign Contribution (Regulation) Act, 2010 (FCRA) regulates the acceptance and use of foreign contributions and foreign hospitality by individuals, associations, and companies to ensure such funds do not harm national interest.
Registration regime: Any association receiving foreign funds must register with the Union Home Ministry or take prior permission, with registration renewable every five years.
Restricted recipients: Election candidates, judges, government servants, legislators, and political parties are barred from receiving foreign contributions.
Administering authority: The Act is administered by the Ministry of Home Affairs, not the Finance Ministry, which distinguishes it from foreign investment law.
What is a Joint Parliamentary Committee (JPC)?
Definition: A Joint Parliamentary Committee (JPC) is an ad hoc committee constituted to examine a specific Bill or matter in detail, with members drawn from both the Lok Sabha and the Rajya Sabha.
Distinction from a Select Committee: A Select Committee is constituted by a single House and consists only of members of that House, while a JPC draws members from both Houses through motions adopted separately by each.
Powers: A JPC can examine a Bill clause by clause, hear the government and stakeholders, seek evidence, and suggest amendments, though its recommendations are not binding.
Precedent: Bills earlier sent to a JPC include the Waqf (Amendment) Bill, the Personal Data Protection Bill, and the One Nation One Election Bill.
What are the major changes the Bill proposes on asset vesting?
New Chapter IIIA: The Bill inserts a new chapter providing for the vesting of foreign contributions and assets created from them in a government Designated Authority in certain circumstances.
Cessation of certificate under Section 14B: A certificate is deemed to have ceased if an organisation does not apply for renewal, its renewal is refused, or it is not renewed before expiry.
Provisional vesting under Section 16A: On cessation, the organisation’s foreign contribution and assets created from it provisionally vest in the Designated Authority, which may take possession and manage the activities in public interest.
Permanent vesting and disposal: If a fresh or restored certificate is not obtained within the prescribed period, assets permanently vest in the authority and may be transferred to a government body or sold, with proceeds credited to the Consolidated Fund of India.
Whole asset coverage: An asset created partly from foreign contribution and partly from other sources vests in its entirety, with the organisation left to apply for return of a distinct or ascertainable domestic portion.
Why do Church and civil society groups oppose the Bill?
Penalising past investments: Church bodies and non governmental organisations fear that the vesting rules, read with the cessation concept, could reach assets of organisations whose registrations lapsed in the past.
Retrospective reach under Section 16B: The contested Section 16B provided that assets already vested under the existing Section 15 would be deemed provisionally vested under the new regime from the date the amendment takes effect.
Minority institutions at risk: The Tamil Nadu Assembly resolution warned the provisions could affect the autonomy and functioning of educational and social welfare institutions run by minority communities.
Absence of judicial oversight: The Council of Churches in Mizoram objected that a designated authority would gain sweeping powers over land, buildings, and funds without judicial oversight.
Federal concern: The Tamil Nadu resolution urged that any amendment preserve natural justice, proportionality, property rights, legitimate expectation, and federalism.
Where does the genuine tension in the Bill lie?
Regulating funds versus regulating recipients: Opposition members argue the Bill does not regulate the use of foreign contributions but instead regulates the organisations receiving them, shifting the target from misuse to the institution itself.
Public interest versus property rights: The State frames vesting as plugging gaps in managing foreign funded assets when registration is cancelled, while institutions frame it as expropriation of property built over decades.
Place of worship safeguard: For a place of worship, the authority must preserve its religious character while entrusting management to an eligible person, a safeguard critics see as insufficient against loss of control.
A law outliving the government: Critics note that a law passed by Parliament will outlive the government of the day and carry far reaching consequences regardless of present assurances.
What are the challenges to the FCRA framework
Compliance burden: Frequent renewal cycles, bank account restrictions, and reporting requirements impose heavy administrative costs on small organisations.
Chilling effect on civil society: Cancellation and suspension of registrations have reduced the funding available to advocacy and research bodies.
Definitional vagueness: Terms such as activities prejudicial to national interest lack precise statutory definition, widening administrative discretion.
Concentration of executive power: The Home Ministry combines the power to register, inspect, suspend, and cancel, with limited independent review.
Federal friction: State governments and minority institutions argue they are not consulted before changes that affect welfare institutions within their jurisdiction.
Conclusion
The government has signalled willingness to refer the Foreign Contribution (Regulation) Amendment Bill, 2026, to a Joint Parliamentary Committee, while the Opposition continues to demand full withdrawal. The referral defers rather than resolves the central dispute over retrospective vesting and the fate of assets built from mixed foreign and domestic funds. The monsoon session is due to end on 13 August, and the JPC examination will determine whether the vesting provisions survive in their present form.
Back2Basics:
Statutory Framework Governing Foreign Funding of Associations
FCRA, 2010: Primary statute governing acceptance and utilisation of foreign contribution by associations and individuals.
FCRA (Amendment) Act, 2020: Barred transfer of foreign funds between registered entities, capped administrative expenses at 20 percent, and mandated a designated FCRA account at the State Bank of India main branch in New Delhi.
Article 19(1)(c): Guarantees the right to form associations, the freedom that receipt of foreign funds engages.
Section 25 of the Foreign Exchange Management Act, 1999: Distinguishes foreign investment routes from foreign contribution, which FCRA governs separately.
FCRA Regulatory Framework
Governing Act: Foreign Contribution (Regulation) Act, 2010, which replaced the earlier FCRA, 1976.
Administering ministry: Ministry of Home Affairs, Foreigners Division.
Jurisdiction: Covers all persons and associations in India receiving foreign contribution, including for definite cultural, economic, educational, religious, or social programmes.
Registration validity: Five years, renewable, with prior permission route for one time or project specific receipts.
Designated account: Foreign contribution must first be received in a single designated FCRA account at the State Bank of India, New Delhi main branch.
Way Forward
Statutory consultation: Undertake comprehensive consultation with State governments, minority institutions, and non governmental organisations before finalising vesting provisions.
Judicial oversight: Provide for independent or judicial review before an asset permanently vests in the authority.
Protect mixed assets: Frame a clear mechanism to segregate and return the domestically funded portion of institutions built from combined donations.
Narrow retrospective reach: Confine the new regime to prospective lapses rather than registrations that ended before the amendment.
Proportionate enforcement: Distinguish genuine diversion of funds from procedural lapses in renewal so that welfare institutions are not penalised for administrative delays.
PYQ Relevance
[UPSC 2015] Examine critically the recent changes in the rules governing foreign funding of NGOs under the Foreign Contribution (Regulation) Act (FCRA), 1976.
Linkage: The PYQ directly relates to regulation of foreign funding and the functioning of NGOs under FCRA. The proposed Bill extends this debate to executive powers, asset vesting, civil society autonomy and property rights.
The defeat of the Trinamool Congress in the 2026 West Bengal Assembly elections and a wave of defections across regional parties have raised questions about their future. Lokniti CSDS data shows regional parties have retained a consistent one third vote share across four Lok Sabha elections, exposing that their challenge is organisational renewal rather than declining voter support.
How are national and regional parties classified?
What it is: The Election Commission of India classifies parties as national, state (regional), or registered unrecognised, based on vote share and seats won in general and state elections.
Why vote share matters: Vote share is the best indicator of a party’s underlying support base, because India’s first past the post system magnifies both victories and defeats in seat terms.
What do the Lok Sabha vote share figures show, 2009 to 2024?
National parties combined: 63.59 per cent in 2009, 60.04 per cent in 2014, 68.15 per cent in 2019, and 62.72 per cent in 2024.
Regional parties combined: 31.22 per cent in 2009, 35.85 per cent in 2014, 28.1 per cent in 2019, and 33.53 per cent in 2024.
National seats: National parties won 376 seats in 2009, 342 in 2014, 397 in 2019, and 346 in 2024.
BJP trajectory: The Bharatiya Janata Party (BJP) rose from 116 seats and 18.8 per cent in 2009 to 282 seats and 31 per cent in 2014, 303 seats and 37.3 per cent in 2019, and 240 seats and 36.56 per cent in 2024.
Congress trajectory: The Congress fell from 206 seats and 28.55 per cent in 2009 to 44 seats and 19.31 per cent in 2014, then 52 seats and 19.46 per cent in 2019, and 99 seats and 21.19 per cent in 2024.
Stable one third: Regional parties have consistently secured around one third of total votes, the only dip being 2019 at 28.1 per cent, held down by the Balakot air strike backdrop.
What does the state wise picture show?
Assembly preference: Voters display a much stronger preference for regional parties in Assembly elections than in Lok Sabha elections, underscoring the enduring pull of state level identities.
Replacement within the regional camp: In Tamil Nadu, when the Dravida Munnetra Kazhagam faced a setback, it was replaced by another regional party rather than by a national one.
Persistent strength: Regional parties retain significant vote share across several states despite fluctuations in seats won.
Why do defections not signal shrinking support?
Trinamool: The Trinamool Congress witnessed several defections following its West Bengal defeat.
Aam Aadmi Party: The Aam Aadmi Party saw many of its Rajya Sabha members defect.
Nationalist Congress Party (Sharad Pawar): It saw defections in Maharashtra.
Distinction: These point to organisational vulnerabilities, but defections by themselves do not indicate a shrinking electoral support base.
What is the governance footprint of regional parties?
Independent rule: Regional parties independently govern four states, the lowest number in nearly two and a half decades, down from nine states independently governed between 2015 and 2020.
Dominant coalition partners: Regional parties are the dominant partners in four states, namely Andhra Pradesh, Meghalaya, Nagaland, and Puducherry.
Junior partners: The BJP leads coalitions with regional allies in Bihar, Uttar Pradesh, Assam, Goa, Maharashtra, and Tripura, while the Congress is a junior partner in Jharkhand, Jammu and Kashmir, and Tamil Nadu.
Fewer governments, stable votes: The decline in the number of governments headed by regional parties does not imply a corresponding decline in their electoral support.
Setback versus survival, the real challenge
Not declining votes: The challenge before regional parties is not declining voter support but organisational renewal.
FPTP distortion: The first past the post system magnifies seat swings even when vote share stays broadly stable.
Too early for an obituary: A consistent one third vote share shows it is premature to write the obituary of regional parties.
One Nation One Election context
The proposal: The proposed One Nation One Election framework would synchronise Lok Sabha and state Assembly elections.
Concern for regional parties: Regional parties fear that simultaneous polls could let national issues and better resourced national parties overshadow state level concerns where regional parties are strongest.
What are the challenges to regional parties?
Organisational decay: Weak cadre structures and dependence on single leaders leave parties fragile.
Defections and poaching: Loss of legislators erodes bargaining power even when vote share holds.
Leadership succession: Founder centric parties struggle with generational transition.
Resource asymmetry: National parties command far greater funding and media reach.
Simultaneous elections risk: One Nation One Election could dilute the salience of state issues.
Coalition dependence: Falling numbers of independent governments push parties into junior roles.
Conclusion
Regional parties continue to retain a substantial and consistent support base despite electoral setbacks and defections. The evidence shows their difficulty is organisational renewal, not shrinking voter preference, since vote share has stayed near one third across four Lok Sabha elections. Both national and regional parties hold stable places in India’s party system.
India’s Party System (Foundational Context)
About: India has a multi party system with recognised national parties, recognised state parties, and registered unrecognised parties.
Rationale: Party recognition governs privileges such as reserved election symbols, free broadcast time, and star campaigner allowances.
Classification basis: The Election Commission of India recognises parties based on thresholds of vote share and seats won in Lok Sabha and Assembly elections.
Key Concerns Regarding the Party System
Intra party democracy deficit: Many parties lack transparent internal elections and leadership accountability.
Money and elections: Rising campaign expenditure entrenches resource rich parties.
Defections: Frequent defections weaken mandate stability despite anti defection law.
Personality centric organisation: Dependence on individual leaders undermines institutional continuity.
Back2Basics: Representation of the People Act, 1951
What it is: The Representation of the People Act, 1951 governs the conduct of elections to Parliament and state legislatures.
Coverage: It covers qualifications and disqualifications of members, registration of parties, and corrupt practices and offences.
Party recognition: Party recognition and symbol allotment operate under this Act and the Election Symbols (Reservation and Allotment) Order, 1968.
Regulator: It is administered by the Election Commission of India, a constitutional body under Article 324.
Constitutional and Statutory Framework Governing Elections
Article 324: Vests superintendence, direction, and control of elections in the Election Commission of India.
Article 325: Provides a single general electoral roll and bars exclusion on grounds of religion, race, caste, or sex.
Article 326: Provides for elections on the basis of adult suffrage.
Representation of the People Act, 1950: Governs preparation of electoral rolls and allocation of seats.
Representation of the People Act, 1951: Governs the actual conduct of elections and party registration.
Way Forward
Strengthen internal democracy: Institutionalise leadership succession and cadre building within regional parties.
Reform party finance: Improve transparency to reduce resource asymmetry.
Enforce anti defection: Tighten timelines and disqualification processes to deter defections.
Protect federal representation: Design electoral reforms, including any simultaneous elections proposal, to safeguard state level voice.
PYQ Relevance
[UPSC 2024] Examine the need for electoral reforms as suggested by various committees with particular reference to “one nation-one election” principle.
Linkage: The PYQ directly relates to electoral reforms and the One Nation-One Election proposal. The article highlights how simultaneous elections could affect regional parties, state-level issues and India’s federal party system.
Government approved 1 billion polymer notes each of ₹10 and ₹20 for field trials, following an RBI proposal under Section 25 of the RBI Act, 1934.
What are Polymer Banknotes?
Made from a thin plastic film instead of cotton-paper.
More durable, moisture-resistant and hygienic.
Offer enhanced anti-counterfeiting features.
Have a longer circulation life, reducing replacement needs.
Government Approval
Denominations: ₹10 and ₹20.
Quantity: 1 billion each.
Will circulate alongside paper notes.
Regular issuance will depend on successful field trials.
Procurement is at an initial stage, so cost and timeline are not yet fixed.
Why Polymer Notes?
Longer life → lower replacement costs.
Higher security → difficult to counterfeit.
Better durability → resistant to dirt, water and wear.
Global precedent → used by several countries.
Currency Management: Key Facts
RBI: Sole issuer of banknotes, except ₹1 note.
Government of India: Issues coins and ₹1 note.
Section 22, RBI Act: RBI’s sole right to issue banknotes.
Section 24: Specifies permissible denominations.
Section 25: Design, form and material require Central Government approval on RBI recommendation.
Coinage Act, 2011: Governs coins and ₹1 note.
Back2Basics: RBI
Established under RBI Act, 1934; began operations in 1935.
Nationalised in 1949.
Functions as India’s central bank and monetary authority.
Manages currency, monetary policy, banking and payment systems.
[2025] Which of the following are the sources of income for the Reserve Bank of India? I. Buying and selling Government bonds II. Buying and selling foreign currency III. Pension fund management IV. Lending to private companies V. Printing and distributing currency notes Select the correct answer using the code given below.
The Centre has extended the PM Electric Drive Revolution in Innovative Vehicle Enhancement (PM E-DRIVE) Scheme for electric two wheelers till 31 March 2028 and halved the per unit incentive to Rs 2,500 per kilowatt hour from Rs 5,000 earlier. The move signals a planned tapering of demand support as electric two wheeler costs fall and the market matures.
What is the PM E-DRIVE Scheme?
What it is: PM E-DRIVE is the central scheme providing demand incentives and support infrastructure for electric mobility, administered by the Ministry of Heavy Industries. It succeeds the earlier FAME programme as the main demand side push for electric vehicles.
Outlay and duration: It carries an outlay of Rs 11,900 crore and is implemented from 1 April 2024 till 31 March 2028.
Two wheeler support: For electric two wheelers, the scheme sets a total fund support of Rs 2,767 crore from the Ministry of Heavy Industries.
What has changed?
Timeline extended: The electric two wheeler segment has been extended till 31 March 2028.
Incentive halved: The per unit incentive is cut to Rs 2,500 per kilowatt hour from Rs 5,000 per kilowatt hour earlier.
Per vehicle cap lowered: The incentive is capped at Rs 5,000 per vehicle, down from Rs 10,000 per vehicle in FY 2024-25.
Eligibility window: Registered electric two wheelers can avail the Rs 2,500 per kilowatt hour incentive for the period between 1 April 2025 and 31 March 2028.
Price ceiling: The maximum ex factory price for an electric two wheeler to qualify is Rs 1.5 lakh.
Lower of two limits: The incentive is limited to the specified cap or 15 per cent of the ex factory price of the electric two or three wheeler, whichever is lower, and is subject to periodic review as vehicle costs fall.
Back2Basics: PM E-DRIVE Scheme
Ministry: Ministry of Heavy Industries.
Launch year: 2024, implemented from 1 April 2024 to 31 March 2028.
Outlay: Rs 11,900 crore.
Aim: Accelerate adoption of electric vehicles and build charging and testing infrastructure.
Beneficiaries: Buyers of electric two, three, and heavier vehicles, state transport undertakings, and charging infrastructure providers.
Government Initiatives for Electric Mobility
FAME India (Phase I and II): Earlier demand incentive scheme for electric and hybrid vehicles.
PLI Auto Scheme: Production Linked Incentive for advanced automotive technology products.
PLI ACC Battery Scheme: Incentive for domestic advanced chemistry cell battery manufacturing.
Vehicle Scrappage Policy: Phasing out unfit vehicles to spur cleaner replacements.
e-AMRIT portal: A one stop information platform on electric vehicles.
Key Facts about PM E-DRIVE
Successor scheme: PM E-DRIVE succeeds FAME II as the flagship electric mobility scheme.
Incentive metric: Support is calculated per kilowatt hour of battery capacity.
Segment coverage: Covers electric two wheelers, three wheelers, buses, trucks, and ambulances, plus charging infrastructure.
Challenges to Electric Vehicle Adoption
Charging infrastructure gap: Public charging networks remain thin outside major cities.
Battery import dependence: Reliance on imported cells and critical minerals raises cost and supply risk.
High upfront cost: Purchase prices stay above comparable petrol vehicles despite incentives.
Range and grid strain: Range anxiety and grid readiness limit uptake in some segments.
Recycling burden: End of life battery disposal needs robust recycling systems.
Incentive dependence: Demand remains sensitive to the level and continuity of subsidies.
“[2023, GS3, 15 marks] The adoption of electric vehicles is rapidly growing worldwide. How do electric vehicles contribute to reducing carbon emissions and what are the key benefits they offer compared to traditional combustion engine vehicles?”
[2025] With reference to India, consider the following pairs: Organization Union Ministry 1. The National Automotive BoardMinistry of Commerce and Industry 2. The Coir BoardMinistry of Heavy Industries 3. The National Centre for Trade InformationMinistry of Micro, Small and Medium Enterprises How many of the above pairs are correctly matched?
India’s electric mobility transition is gathering momentum as adoption rises and circular economy principles enter industrial policy. India’s policy has advanced the recycling tier of circularity through scrappage but neglected the higher priority reuse tier, exposing a gap where structurally sound vehicles are scrapped rather than retrofitted.
What is the circular economy hierarchy?
Definition: The circular economy is built on a hierarchy that prioritises reducing resource consumption, then reusing existing assets, and only recycling materials once products have genuinely reached the end of their useful life.
Reuse versus recycle: Recycling recovers materials after a product becomes waste, while reuse preserves functionality before the asset becomes waste. Reuse sits higher in the hierarchy.
What is vehicle retrofitment?
What it is: Retrofitment replaces the internal combustion engine, fuel system, and related components of an existing vehicle with an electric powertrain, while retaining the core vehicle structure.
Why it counts as reuse: By keeping a structurally sound chassis and body in service, it preserves and extends the value already embedded in the asset rather than recovering value only after the vehicle becomes waste.
How far has India progressed on recycling?
Rules framework: The Motor Vehicles (Registration and Functions of Vehicle Scrapping Facility) Rules, 2021, and the Environment Protection (End of Life Vehicles) Rules, 2025, strengthened responsible vehicle recycling and material recovery.
Facilities on ground: As of January 2026, 129 Registered Vehicle Scrapping Facilities were operational across 21 States and Union Territories.
Vehicles processed: About 4.3 lakh vehicles had been processed through these facilities, building a formal ecosystem for recycling and resource recovery.
Why does retrofitment matter?
Per vehicle waste: A single two wheeler generates approximately 90 kilograms of recyclable material and 18 kilograms of landfill waste when scrapped.
Fleet scale burden: Scaled across India’s fleet of about 30 crore vehicles, a scrap first approach would generate 2.7 crore tonnes of recyclable material and 0.54 crore tonnes of landfill waste.
SDG alignment: Retrofitment supports United Nations Sustainable Development Goal 12 on responsible consumption and production by reducing material demand and waste.
Old but sound: A vehicle can be old yet retain a strong chassis, intact body, and years of service life, making retrofitting more circular than scrapping.
What is the three pathway vehicle hierarchy?
First pathway, continued use: Vehicles that remain safe, compliant, and efficient should keep operating with routine maintenance, since age alone should not trigger removal.
Second pathway, retrofitment: Vehicles with sound structure but ageing or polluting powertrains can be converted to electric through certified processes, extending life while cutting emissions.
Third pathway, scrappage: Vehicles with compromised safety, severe structural degradation, accident damage, or significant corrosion proceed to scrappage and recycling.
The missing middle path
Not a competition: Retrofitment is not a competing strategy to scrappage but the missing middle path that policy has not focused on yet.
Condition over age: Treating every ageing vehicle as a disposal candidate overlooks the chance to extend asset life while accelerating electrification.
Public acceptance: A condition assessed transition would make scrappage more acceptable, as citizens would see that older vehicles are assessed for transformation rather than dismissed indiscriminately.
What are the challenges to a reuse led EV transition?
Certification gap: Retrofitment needs robust certified conversion technology and testing standards to ensure safety.
Cost and financing: Conversion costs can rival buying a new two wheeler, limiting uptake without incentives.
Battery supply dependence: Electric powertrains depend on imported cells and critical minerals, a supply chain vulnerability.
Policy bias toward scrappage: Existing incentives favour scrappage and new vehicle purchase, leaving reuse unsupported.
Skilled workforce shortage: A trained network of certified retrofit workshops is largely absent at scale.
End of life battery waste: Retrofitted vehicles eventually generate battery waste requiring recycling infrastructure.
Conclusion
India’s transport transition is a question of resource efficiency, not a contest between new electric vehicles and older ones. Adopting an age assessed pathway that distinguishes continued use, retrofitment, and scrappage would align the transition with genuine circular economy principles. This would prevent waste before it is created and confine recycling to vehicles that have truly reached the end of their useful life.
What is Circular Economy? (Foundational Context)
About: A circular economy keeps materials and products in use for as long as possible, extracting maximum value before recovery and regeneration, in contrast to the linear take, make, dispose model.
Rationale: It exists to cut resource extraction, greenhouse gas emissions, and waste while sustaining economic value.
Named hierarchy: It rests on reduce, reuse, and recycle in that order of priority, with reduce and reuse ranked above recycling.
Key Concerns Regarding the Circular Economy
Recycling bias: Policy attention concentrates on recycling while the higher value reduce and reuse tiers are neglected.
Informal sector dominance: Much recycling occurs in the informal sector with poor environmental and safety standards.
Extended producer responsibility gaps: Enforcement of producer take back obligations remains weak.
Data deficits: Weak material flow data limits measurement of circularity outcomes.
Back2Basics: Sustainable Development Goal 12
What it is: SDG 12 is the goal on responsible consumption and production within the 2030 Agenda for Sustainable Development.
Adopted: It was adopted by United Nations member states in 2015.
Focus: It targets sustainable consumption patterns, resource efficiency, and reduced waste generation.
Relevance: Vehicle retrofitment directly advances its call for better resource efficiency and reduced waste.
Government Initiatives for EVs and Circularity
PM E-DRIVE Scheme: Provides demand incentives for electric two and three wheelers and other electric vehicles.
FAME India Scheme: Faster Adoption and Manufacturing of Electric Vehicles, supporting demand and charging infrastructure.
Vehicle Scrappage Policy: Encourages phasing out of unfit and polluting vehicles through registered scrapping facilities.
PLI schemes: Production Linked Incentives for advanced chemistry cell batteries and automobiles.
Way Forward
National vehicle hierarchy: Adopt a framework treating vehicles by condition rather than age alone.
Certified retrofit ecosystem: Standardise conversion technology and expand certified workshops.
Incentivise reuse: Extend fiscal support to retrofitment on par with scrappage and new purchase.
Strengthen battery circularity: Build reverse logistics and recycling for end of life batteries.
Skilling: Train technicians for certified electric powertrain conversion.
“[2025] Consider the following statements:
Statement I: Circular economy reduces the emissions of greenhouse gases.
Statement II: Circular economy reduces the use of raw materials as inputs. Statement III: Circular economy reduces wastage in the production process.
Which one of the following is correct in respect of the above statements?
(a) Both Statement II and Statement III are correct and both of them explain Statement I
(b) Both Statement I and Statement II are correct and Statement I explains Statement II
(c) Only one of the Statements II and III is correct and that explains Statement I
(d) Neither Statement II nor Statement III is correct
Question (2023, GS3): “The adoption of electric vehicles is rapidly growing worldwide. How do electric vehicles contribute to reducing carbon emissions and what are the key benefits they offer compared to traditional combustion engine vehicles?
The Union Minister of Petroleum and Natural Gas stated that 67 per cent of India’s liquefied petroleum gas (LPG) now comes from the United States, a drastic shift from an earlier decision to source about 10 per cent of cooking gas there. The pivot, driven by the crisis in the Strait of Hormuz, exposes that LPG security cannot be anchored to a single geography while dependence on the United States carries risks of its own.
What is Liquefied Petroleum Gas (LPG) and how is India’s supply structured?
What it is: LPG is a mix of propane and butane used mainly as cooking gas in India. It is a politically volatile fuel because shortages carry direct social and political consequences.
Import dependence: India, the world’s second largest importer of LPG, imports about 60 per cent of the LPG it consumes, with nearly 90 per cent of that passing through the Strait of Hormuz.
Sourcing shift: State run refiners signed a long term deal for 2.2 million tonnes of United States LPG in 2026, raising the United States share to two thirds of imports.
Why did India pivot to United States LPG?
Hormuz disruption: Disruptions in the narrow Strait of Hormuz threatened the Gulf supply route through which most Indian LPG passes.
Collapse in West Asian flows: India’s LPG imports from West Asia fell almost 85 per cent between February and June 2026.
Partial offset: India replaced the lost flows by lifting imports from other sources, including the United States, from where June imports reached 0.77 million metric tonnes.
Availability over price: Because cooking gas is politically sensitive, the priority is making it available rather than optimising cost, so costlier United States cargoes became attractive during the crisis.
Why is overdependence on the United States risky?
Energy as leverage: Relying more on a partner that views ties through the lens of national interest risks energy being used as a bargaining tool in bilateral trade talks.
History of coercive tools: The United States has historically used financial sanctions, export controls, and technology denial as foreign policy tools, seen in Iran, Iraq, Cuba, North Korea, Syria, Russia, Venezuela, Myanmar, Libya, Sudan, and Afghanistan.
Third country reach:The Lindsey O. Graham Sanctioning Russia and Iran Act of 2026, proposing tariffs of up to 100 per cent on the top five buyers of Russian oil and natural gas, is a non tariff trade barrier that can influence third country transactions.
Monetary spillover: Import dependence complicates monetary policy, as elevated United States inflation could keep the Federal Reserve’s rates higher for longer, strengthening the dollar and raising the rupee cost of each cargo.
Why does proximity pricing matter?
Definition: Proximity pricing is a market benefit where goods cost less when bought from a nearby place. Shorter travel distance means lower shipping costs and faster delivery.
Loss of distance advantage: United States shipments take 25 to 35 days against 5 to 10 days from the Gulf, so India loses the advantage of proximity pricing.
Two price benchmarks: United States LPG is Mont Belvieu propane based, while West Asian supply follows the Saudi Aramco Contract Price, and the Gulf fuel is usually cheaper at the disembarking point due to the shorter distance.
Temporary reversal: Geopolitical risk has temporarily inflated West Asian supply costs, with the Saudi Contract Price rising from about 543 dollars per tonne in February to around 790 dollars in June, making United States cargoes competitive despite the longer voyage.
How does India balance availability with cost optimisation?
The core trade off: For a politically volatile fuel, ensuring supply outweighs cost optimisation, so India accepted higher priced United States cargoes to cut supply risk.
Residual exposure: India may have cut Hormuz risk, but remains exposed to commodity price, dollar, and freight risks.
Under recovery pressure: If domestic prices are held down while global prices rise amid rupee depreciation, oil companies’ under recoveries expand, worsening fiscal and external sector stress.
What are the challenges to India’s LPG security?
Single supplier concentration: Two thirds reliance on one country recreates the concentration risk the pivot was meant to solve.
Stagnant domestic output: LPG production has stayed nearly flat while consumption grows, widening the import gap.
Chokepoint vulnerability: Heavy dependence on the Strait of Hormuz leaves Gulf sourced volumes exposed to any regional conflict.
Fiscal drain: Accumulated under recoveries of state oil marketing companies exceeded Rs 59,000 crore as of 31 July 2026.
Currency and freight risk: Dollar denominated pricing and long shipping routes expose landed costs to exchange rate and freight swings.
Thin strategic reserves: India lacks large dedicated LPG strategic reserves to buffer sudden supply shocks.
Conclusion
Energy security is not about replacing one supplier with another but ensuring no single player holds all the cards. India must strengthen local production, bolster multiple supply chains, and build more strategic reserves. Australia offers a shorter Indo Pacific route outside Hormuz, though its export volumes remain small.
Back2Basics
Energy Security and LPG in India (Foundational Context)
About: Energy security means assured availability of energy at affordable prices with resilience against supply shocks. LPG security is a subset covering cooking gas access for households.
Scale: Public sector oil marketing companies serve 33.14 crore active domestic LPG customers, growing at a compound annual growth rate of 7.6 per cent between 2015 and 2026.
Consumption gap: LPG production was 4.3 million metric tonnes against consumption of 6.5 million metric tonnes in the first quarter of FY27, with the 2026-27 consumption estimate at 34,692 thousand metric tonnes.
Key Facts about India’s LPG Sector
Oil marketing companies: Indian Oil, Bharat Petroleum, and Hindustan Petroleum are the three public sector oil marketing companies distributing LPG.
PPAC: The Petroleum Planning and Analysis Cell tracks LPG consumption, customer base, and pricing data.
Crisis production ramp up: At the peak of the crisis, oil marketing companies raised cumulative daily LPG production from 34,000 metric tonnes to 55,000 metric tonnes.
Output jump: First quarter FY27 LPG production rose 35.73 per cent year on year to 4.26 million metric tonnes after refineries diverted propane and butane streams into the LPG pool.
Government Initiatives for LPG and Energy Security
Pradhan Mantri Ujjwala Yojana: Provides free LPG connections to women from below poverty line households to promote clean cooking.
PAHAL (DBTL): Directly transfers LPG subsidy to beneficiary bank accounts to curb diversion.
Strategic Petroleum Reserves: Underground crude storage to cushion supply disruptions.
Ethanol Blending Programme: Reduces import dependence in the broader energy basket.
Long term supply agreements: State refiner contracts diversifying LPG sourcing across geographies.
Way Forward
Boost domestic output: Maximise refinery LPG yield and invest in production capacity to narrow the import gap.
Diversify suppliers: Spread sourcing across the Gulf, the United States, Australia, and others to avoid single supplier dependence.
Hedge price and currency risk: Use financial instruments to manage commodity, dollar, and freight exposure.
Secure alternate routes: Develop supply chains outside the Strait of Hormuz to reduce chokepoint vulnerability.
PYQ Relevance
[UPSC 2025] “Energy security constitutes the dominant kingpin of India’s foreign policy, and is linked with India’s overarching influence in Middle Eastern countries.” How would you integrate energy security with India’s foreign policy trajectories in the coming years?
Linkage: The PYQ directly relates to energy security as a key driver of India’s foreign policy, especially in West Asia. India’s shift to US LPG highlights the need for supplier diversification, alternate routes and strategic autonomy in energy diplomacy.
UPI platforms have flagged rising cybersecurity costs, especially from AI-enabled fraud, renewing demands to allow Merchant Discount Rate (MDR) on UPI.
What is MDR?
MDR: Fee paid by merchants to banks/payment providers for processing digital payments.
UPI: MDR is currently zero, so merchants pay no transaction fee.
Costs are borne by banks, payment apps and government reimbursements.
Why are Security Costs Rising?
AI-enabled fraud can make sophisticated cyberattacks cheaper and easier.
Security accounts for 20%+ of UPI platform costs.
Security infrastructure costs around 10 to 20 paise per transaction.
Dependence on imported AI/cloud tools adds dollar and currency risks.
UPI infrastructure is not costless and someone must bear its cost.
Reduces dependence on uncertain government subsidies.
Provides dedicated funding for cybersecurity and system resilience.
Concerns
Fees on small-value transactions could push users back to cash.
Higher costs may disproportionately affect price-sensitive consumers.
Poorly designed MDR could weaken UPI’s role as a public digital infrastructure.
Foreign AI security tools create strategic and currency dependence.
UPI: Back2Basics
UPI: Real-time interbank payment system developed by NPCI.
Enables instant P2P and P2M payments.
NPCI: Umbrella organisation for India’s retail payment systems, established in 2008.
Key systems: UPI, RuPay, IMPS, BBPS and FASTag.
Regulated by RBI under the Payment and Settlement Systems Act, 2007.
“[2026] Which one of the following statements about Unified Payments Interface (UPI) and Central Bank Digital Currency (Digital Rupee) is NOT correct?
(a) UPI is a real-time payment system but Digital Rupee is akin to sovereign paper currency
(b) In case of UPI, settlement for end users happens instantly; in case of Digital Rupee, wallet balance gets transferred to another wallet (no traditional settlement)
(c) UPI transactions are recorded by banks and reflected in bank statements; in case of Digital Rupee, no data is captured in bank statements
(d) In both the cases (UPI and Digital Rupee), the liability lies with the users and their respective banks
