The Government e-Marketplace (GeM) completed 10 years, connecting around 1.37 lakh government buyers with 25 lakh sellers/service providers and achieving nearly ₹20 lakh crore cumulative Gross Merchandise Value (GMV).
What is GeM?
GeM: Government e-Marketplace.
Launched on 9 August 2016.
A digital platform for government procurement of goods and services.
Replaced the Directorate General of Supplies and Disposals (DGS&D).
Integrates product discovery, bidding, contract award and payment.
How does GeM Improve Procurement?
End-to-end digitisation: Covers the complete procurement cycle.
Transparency: Creates an auditable digital trail.
Reduced discretion: Limits face-to-face interaction and scope for favouritism.
Single window: Simplifies registration and standardises procurement.
Inclusion: Gives Micro and Small Enterprises (MSEs), start-ups and women-led firms direct access to government buyers.
What Does the Data Show?
Cumulative GMV: About ₹20 lakh crore.
Buyers: 1.37 lakh.
Sellers/service providers: 25 lakh.
Categories: 10,644 product and 350 service categories.
MSEs: Around 60% of orders by volume and over 45% of GMV.
Measured benefit: IIT Delhi study estimated ₹86,571.69 crore in benefits over the last three financial years through price and process efficiencies.
What Problems Does GeM Address?
Reduces corruption and procurement discretion.
Improves Ease of Doing Business (EoDB) for suppliers.
Expands opportunities for MSMEs and start-ups.
Enables faster procurement.
Promotes competitive prices and better use of public funds.
Supports domestic manufacturing and Atmanirbhar Bharat.
What is Public Procurement?
Public procurement is the process through which government bodies purchase goods, works and services using public funds.
Core principles: Transparency, Fair competition, Non-discrimination, Value for money, and Accountability
Challenges
Quality assurance: Risk of substandard products in a large digital catalogue.
MSME payment delays: Delayed payments affect working capital.
Bid rigging: Cartelisation can undermine competition.
Digital divide: Smaller sellers may lack connectivity or digital skills.
Grievance redress: Delays in resolving quality, delivery and payment disputes.
Cybersecurity: Concentration of procurement data increases cyber risks.
Back2Basics: GeM
Full form: Government e-Marketplace.
Launch: 9 August 2016.
Nodal Ministry: Ministry of Commerce and Industry.
Predecessor: DGS&D, Directorate General of Supplies and Disposals.
Purpose: Transparent and efficient government procurement.
Users: Government buyers, sellers and service providers.
Focus: Particularly beneficial for MSMEs, start-ups and women entrepreneurs.
Government Initiatives
Public Procurement (Preference to Make in India) Order, 2017: Preference for domestically manufactured goods.
Public Procurement Policy for MSEs, 2012: Procurement preference for Micro and Small Enterprises.
Vivad se Vishwas for MSMEs: Relief mechanism for eligible MSME contractual disputes.
Person-days under the Viksit Bharat Guarantee for Rozgar and Ajeevika Mission (Gramin) (VB-G RAM G) fell 49.94% year-on-year in July 2026, its first month of implementation, compared with Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA). The decline has raised concerns about moving from a demand-driven legal guarantee to a more centralised, technology-dependent model.
What is the Viksit Bharat Guarantee for Rozgar and Ajeevika Mission (Gramin)?
About: VB-G RAM G is the central rural employment and livelihood scheme that replaced MGNREGA. It is administered by the Union Rural Development Ministry.
Design shift: Access is made increasingly dependent on technology and biometric authentication, and the scheme is centralised rather than run through gram panchayats.
Key change: Critics state it removes the legal guarantee of employment that defined MGNREGA, converting an entitlement into a discretionary programme.
What is a person-day and why is the July figure significant?
Person-day: A person-day is a unit that measures the amount of work done by one person in a working day, the standard metric for employment generated under rural works schemes.
The fall: Person-days generated in July 2026 were 49.94% lower than those generated under MGNREGA in July of the previous year, roughly halving recorded rural work in the first implementing month.
Why has the Opposition attacked the new scheme?
Loss of guaranteed work: The scrapping of MGNREGA stripped millions of families of their “right to work”, replaced by a scheme that wiped out around 50% of labourer employment in the first month.
Centralisation: The scheme centralises delivery and imposes a heavy financial burden on State governments, weakening the earlier panchayat-led model.
Technology gating: Making access dependent on technology and biometric authentication makes it harder for workers to claim their rights.
Loss of local autonomy: MGNREGA had empowered gram panchayats and freed workers from dependence on the political whims of the government of the day.
Pending dues: Rs 17,144 crore in pending MGNREGA funds to the States was flagged as unpaid.
What wider distress does the data point to?
Kharif shortfall: There is a 26.50% shortfall in sowing for the kharif crop, raising the demand for rural wage work at the very moment the scheme has contracted.
Drought assistance gap: The Opposition questioned whether any assistance had been provided to drought-affected States.
Funding pattern dispute: Even BJP-ruled States had demanded a review of the funding pattern of VB-G RAM G, indicating cross-party concern over State fiscal burden.
Conclusion
The near-halving of person-days in the first month captures the core risk of replacing a demand-driven legal guarantee with a centralised, technology-gated scheme, that the guarantee itself, not the branding, was what protected rural workers in distress. The data release coincides with a kharif sowing shortfall and State demands to review the funding pattern. The next test is whether the government revises the funding model and restores enrolment before the lean agricultural season deepens rural unemployment.
What is a demand-driven employment guarantee?
About: It is a legal framework under which the state must provide wage employment on demand to any eligible household, making work an enforceable entitlement rather than a target-based programme.
Rationale: It exists to provide a rural safety net during agricultural distress and to set a wage floor, with the guarantee acting as automatic stabiliser when other work dries up.
Distinguishing feature: Provision is triggered by the worker’s demand, not by a fixed budget or administrative ceiling, so contraction in person-days signals suppressed or unmet demand.
Wage payment delays: Chronic delays in wage disbursal erode the entitlement’s value and deter workers.
Fund devolution to States: Centralised control and delayed release strain State finances and stall works.
Technology exclusion: Biometric and app-based attendance systems exclude workers with poor connectivity or authentication failures.
Suppressed demand: Administrative rationing and closed muster rolls understate genuine demand for work.
Back2Basics: MGNREGA
Full name: Mahatma Gandhi National Rural Employment Guarantee Act, 2005, a UPA-era law.
Ministry: Union Ministry of Rural Development.
Aim: Guaranteed at least 100 days of wage employment in a financial year to every rural household whose adult members volunteer to do unskilled manual work.
Beneficiaries: Adult members of any rural household, without a poverty-line or caste restriction.
Design features: Legal right to work, demand-driven provision, works planned and executed through gram panchayats, and an unemployment allowance if work is not provided in time.
Government Initiatives / Schemes for Rural Livelihoods
VB-G RAM G: The current central rural employment and livelihood mission that replaced MGNREGA.
Deendayal Antyodaya Yojana – National Rural Livelihoods Mission (DAY-NRLM): Promotes self-help groups and self-employment for rural poor women.
The Lok Sabha passed the Tribunals Reforms Bill, 2026 by voice vote without debate, creating a National Tribunals Commission (NTC) to select chairpersons and members of various tribunals. The Bill follows the Supreme Court striking down parts of the Tribunals Reforms Act, 2021 for violating separation of powers and judicial independence. It reopens the settled question of who controls tribunal appointments, the executive that the tribunals adjudicate against, or an independent body insulated from it.
What is the National Tribunals Commission (NTC)?
Purpose: The NTC is a proposed statutory body to conduct the selection of chairpersons and members of tribunals through a single, uniform process. It centralises appointments that were earlier run separately for each tribunal.
Composition: It will have a chairperson and four members, two judicial and two technical. A retired Supreme Court judge or a retired Chief Justice of a High Court will be eligible to head it.
Seat and scope: It will be headquartered in New Delhi and will prescribe qualifications, selection, appointment, salaries, allowances, tenure, resignation, removal, and other service conditions of tribunal members.
Origin: The Supreme Court itself directed the creation of an independent commission with professional expertise, transparent selection, and an oversight mechanism for appointments.
What is the current status of tribunal appointments in India?
Statutory basis: Tribunals were introduced through the 42nd Constitutional Amendment, 1976, which added Part XIV-A and Articles 323A and 323B. They function as specialised adjudicatory bodies outside the regular court hierarchy.
Bodies covered by the Bill: The selection process applies to the Central Administrative Tribunal, Armed Forces Tribunal, National Green Tribunal, Income Tax Appellate Tribunal, and the National Consumer Disputes Redressal Commission.
Rationalisation drive: The Union government began rationalising tribunals in 2015 and Parliament passed the Tribunals Reforms Act, 2021 to that end. Parts of that Act were struck down by the Supreme Court.
Existing safeguard: Judicial review of tribunal decisions by High Courts under Articles 226 and 227 remains, since the Court has held this power to be part of the basic structure.
Constitutional Provisions Related to Tribunals
Article 323A: Empowers Parliament to establish administrative tribunals for service matters of public servants.
Article 323B: Empowers appropriate legislatures to set up tribunals for other matters such as taxation, land reforms, and industrial disputes.
42nd Amendment, 1976: Inserted Part XIV-A and the two tribunal Articles into the Constitution.
Article 226 and Article 227: Vest High Courts with writ jurisdiction and power of superintendence over tribunals, a check the Supreme Court has ruled cannot be ousted.
Article 136: Retains the Supreme Court’s power to grant special leave to appeal against tribunal orders.
Article 50: Directive Principle requiring separation of the judiciary from the executive, the value the appointment dispute turns on.
Why did the Supreme Court strike down parts of the 2021 Act?
Separation of powers: The Court held that several provisions were contrary to separation of powers, as they gave the executive dominant control over appointments to bodies that adjudicate against the executive.
Judicial independence: Provisions were found to undermine the independence of tribunal members whose tenure and removal the executive influenced.
Conflict with precedent: The provisions were inconsistent with earlier judgments laying down standards for the appointment, tenure, and functioning of tribunal members.
Short tenures and search committees: Earlier versions prescribed a four-year term and search-cum-selection committees weighted towards government nominees, which the Court repeatedly rejected as diluting judicial character.
How does the Bill respond to the Court’s concerns?
Uniform process: The Law Minister stated the Bill brings uniformity to selection and appointment and improves efficiency, transparency, and independence.
Judicial presence: A retired Supreme Court judge or retired High Court Chief Justice heading the commission answers the Court’s demand for professional and judicial expertise in selection.
No jurisdictional change: The Minister clarified the legislation does not alter the jurisdiction of any tribunal, keeping the substantive powers of each body intact.
Institutional oversight: A permanent commission replaces ad hoc, tribunal-by-tribunal appointment machinery, matching the oversight mechanism the Court directed.
Major debates surrounding tribunalisation in India
Curtailment of ordinary courts: Tribunals divert cases from High Courts, raising the concern that they curtail the jurisdiction and constitutional role of the regular judiciary.
Executive control versus independence: The core dispute is whether the government, a frequent litigant before tribunals, should dominate the appointment and service conditions of members who judge it.
Effectiveness versus multiplicity: Tribunals were meant to reduce pendency, yet vacancies, poor infrastructure, and appeals routed back to constitutional courts have blunted that promise.
Competing rulings: The line of Madras Bar Association cases and Rojer Mathew (2019) repeatedly set standards on tenure and composition that successive laws failed to meet, driving the current Bill.
Access to justice: Whether specialised, low-cost adjudication genuinely widens access, or whether weak tribunals leave litigants worse off than in ordinary courts.
Challenges to the National Tribunals Commission
Composition balance: Two technical members alongside two judicial members can still tilt selection towards executive preference if the technical members are serving or retired bureaucrats.
Vacancy backlog: A new selection body does not by itself clear the large pending vacancies that have crippled tribunals such as the National Green Tribunal and Debt Recovery Tribunals.
Infrastructure and funding: Tribunals depend on the parent ministry for premises, staff, and budget, which the commission does not address.
Fresh litigation risk: Any residual executive dominance in the composition invites another round of constitutional challenge, extending the cycle of struck-down laws.
Uniformity versus specialisation: A single commission for bodies as varied as the Armed Forces Tribunal and the consumer commission may struggle to weigh domain-specific expertise.
Independence of secretariat: Day-to-day functioning still routes through executive-controlled staff, which can dilute the intended insulation.
Conclusion
The central question is not whether tribunals should exist but who controls the people who staff them, since executive dominance over appointments compromises the independence that specialised adjudication requires. The 2026 Bill responds to the Supreme Court’s direction by creating a judicially headed National Tribunals Commission with a uniform process. Its success depends on whether the composition genuinely insulates members from the executive they adjudicate against, and on whether vacancies and infrastructure gaps are addressed alongside the appointment reform.
What is the Separation of Powers Doctrine?
About: It is the principle that legislative, executive, and judicial functions are distributed among distinct organs so that no single organ concentrates power.
Rationale: It exists to prevent tyranny and protect liberty through mutual checks, and in India it underpins judicial independence as part of the basic structure.
Indian form: India follows a functional, not rigid, separation, with checks and balances rather than watertight compartments, reinforced by Article 50 and judicial review.
Key Concerns Regarding Separation of Powers in India
Executive encroachment on judiciary: Control over appointments, tenure, and funding of tribunals lets the executive influence bodies meant to be independent.
Delegated legislation: Wide rule-making powers transfer effective law-making to the executive with limited legislative scrutiny.
Judicial overreach: Expansive judicial activism blurs the line between adjudication and policy-making.
Appointment tussles: Recurring friction between the executive and judiciary over the collegium and tribunal selections reflects an unsettled balance.
Statutory Framework Governing Tribunals
Article 323A: Basis for administrative tribunals in service matters.
Article 323B: Basis for tribunals in taxation, land reforms, and other listed matters.
Administrative Tribunals Act, 1985: Established the Central Administrative Tribunal and State Administrative Tribunals.
Tribunals Reforms Act, 2021: Rationalised tribunals and set service conditions, parts of which the Supreme Court struck down.
Tribunals Reforms Bill, 2026: Proposes the National Tribunals Commission and repeals the 2021 Act once enacted.
Back2Basics: Landmark rulings on tribunals
L. Chandra Kumar v. Union of India (1997): Held that judicial review by High Courts under Articles 226 and 227 is part of the basic structure and cannot be excluded; tribunals are supplementary, not substitutes, for courts.
Union of India v. R. Gandhi (Madras Bar Association, 2010): Laid down that tribunal members must have judicial character and that executive dominance in selection is unconstitutional.
Rojer Mathew v. South Indian Bank (2019): Struck down rules on tribunal appointments and service conditions for compromising independence.
Madras Bar Association v. Union of India (2021): Reaffirmed minimum tenure and search committee composition standards, directly shaping the 2026 Bill.
Way Forward
Insulated composition: Weight the selection body towards judicial members and independent experts rather than serving bureaucrats.
Fill vacancies promptly: Use the commission to clear the standing backlog of member vacancies across tribunals on a time-bound basis.
Single nodal ministry: Route tribunal administration and funding through a single, arm’s-length authority to end dependence on the litigating ministry.
Fixed tenure and security: Guarantee tenure, salary, and removal protections consistent with the Supreme Court’s standards to prevent renewed litigation.
Periodic performance audit: Institute an independent review of tribunal pendency, disposal, and infrastructure to keep them a genuine complement to courts.
“[2018, GS2, 15 marks] How far do you agree with the view that tribunals curtail the jurisdiction of ordinary courts? In view of the above, discuss the constitutional validity and competency of the tribunals in India.”
The Reserve Bank of India (RBI) has issued a comprehensive set of rules governing how commercial banks recover unpaid loans, coming into force on January 1, 2027. The framework introduces India’s first detailed regulation of technology-based restrictions on mobile phones financed through bank loans, balancing lenders’ recovery rights against borrower protection.
What is the RBI’s new loan-recovery framework?
Comprehensive recovery rules: The framework governs the conduct of banks and outsourced recovery agents in recovering unpaid loans, and applies to all commercial banks.
Board-governed process: It makes recovery a board-governed process rather than a purely operational function, requiring a documented recovery policy.
Effective date: It comes into force on January 1, 2027.
Can banks now lock a financed phone?
Only for device loans: Technology-based restrictions can be used only where the loan specifically financed that smartphone, tablet or laptop.
Disclosure required: The loan agreement must clearly disclose these restrictions in advance.
30-day threshold: No restriction can be activated until the account is 30 days past due, despite notices to the borrower.
Gradual escalation: Restrictions must be introduced gradually.
60-day limit for full lock: Complete restrictions can be imposed only after 60 days of non-payment, and outgoing calls cannot be blocked before that.
Work not disrupted: Restrictions must not interfere with activities necessary for the borrower’s work or employment.
Visibility: Borrowers must be able to view the status of restrictions on their device at any time.
Fast restoration: Once overdue amounts are paid, functionality must be restored within one hour.
Compensation: Where restoration is delayed by the bank, compensation of Rs 250 per hour is payable until access is restored, subject to a ceiling equal to the loan amount.
Data protection: Banks and third-party technology providers are barred from accessing personal data stored on borrowers’ devices.
How are recovery agents regulated?
Fixed contact hours: Agents can contact borrowers only between 8 am and 7 pm, unless the borrower requests otherwise.
Identification: They must identify themselves through identity cards and authorisation letters and carry copies of notices issued by the bank.
Certification: Only certified individuals can undertake recovery work.
Background checks: Banks must conduct background verification before appointing agents and periodically thereafter.
How are banks held accountable?
Call recording: Banks must record recovery-related calls, keep records for at least six months and inform borrowers that conversations are recorded.
No aggressive incentives: Recovery targets and incentive structures should not encourage aggressive behaviour.
Grievance redressal: Every bank must set up a dedicated grievance redressal mechanism for recovery complaints, detailed in loan documents and communications.
Direct responsibility: Banks are made directly responsible for the conduct of outsourced recovery personnel.
Why were fresh directions issued?
Retail lending boom: India’s retail lending market has expanded rapidly, driven by digital loans, unsecured personal credit and Buy Now Pay Later products.
Device financing: Growth in financing for smartphones and consumer electronics raised the practice of remotely disabling devices.
Rising complaints: Complaints about harassment by recovery agents and aggressive collection practices have grown.
Conclusion
The RBI has converted loan recovery from an operational function into a board-governed, rights-based process, and for the first time regulated the remote disabling of financed devices. The framework takes effect on January 1, 2027, and its impact will depend on how banks build recovery policies, certify agents and enforce the device-restriction safeguards. The next milestone is compliance readiness across all commercial banks before the effective date.
Back2Basics: Reserve Bank of India (RBI)
Type: Central bank and monetary authority of India.
Established: 1935, nationalised in 1949.
Governing Acts: RBI Act, 1934 and Banking Regulation Act, 1949.
Headquarters: Mumbai.
Core functions: Monetary policy, currency issue, banker to the government, banking regulation and supervision, and management of foreign exchange.
What are the RBI’s Functions?
About: The RBI is India’s central bank, established in 1935, responsible for monetary policy, currency issuance and financial system regulation.
Rationale: It exists to maintain price stability, ensure adequate credit flow and safeguard the stability of the banking and payments system.
Regulatory scope: It regulates commercial banks on liquidity of assets, branch expansion, mergers, winding-up and, increasingly, conduct towards customers.
Statutory Framework Governing Bank Regulation
Reserve Bank of India Act, 1934: Establishes the RBI and its monetary and regulatory powers.
Banking Regulation Act, 1949: Empowers the RBI to license, supervise and regulate banks, including branch expansion, mergers and winding-up.
Payment and Settlement Systems Act, 2007: Provides for RBI regulation of payment systems, including digital lending rails.
Consumer Protection Act, 2019: Reinforces borrower rights against unfair practices.
Government and RBI Initiatives for Borrower Protection
Fair Practices Code for Lenders: Sets standards for transparency and conduct in lending.
RBI Integrated Ombudsman Scheme: Provides a single redressal window for customer complaints against banks and lenders.
Digital Lending Guidelines, 2022: Regulate loan disbursal, data use and recovery by digital lenders.
RBI Retail Direct and Financial Literacy programmes: Improve borrower awareness and protection.
Key Facts about RBI Regulation of Banks
Effective date of new recovery rules: January 1, 2027.
Compensation cap: Rs 250 per hour for delayed restoration, ceiling equal to the loan amount.
Recovery contact window: 8 am to 7 pm.
Record retention: At least six months for recovery calls.
Challenges in Loan Recovery and Retail Lending
Agent harassment: Aggressive and coercive collection practices remain widespread.
Digital coercion: Remote disabling of financed devices can cut borrowers off from work and emergencies.
Data misuse: Access to personal data on devices raises privacy risks.
Over-leverage: Rapid unsecured and Buy Now Pay Later lending raises default risk.
Enforcement gaps: Outsourced agents are hard to monitor and hold accountable.
Grievance delays: Weak redressal leaves borrowers without timely remedy.
Way Forward
Enforce certification: Ensure only verified, certified agents undertake recovery.
Audit device restrictions: Independently audit compliance with the 30-day and 60-day safeguards.
Strengthen redressal: Make grievance mechanisms accessible and time-bound.
Protect data: Enforce the bar on accessing personal data with strict penalties.
Promote responsible lending: Tighten underwriting for unsecured and device-linked credit.
PYQ Relevance
[2013] The Reserve Bank of India regulates the commercial banks in matters of
(1) liquidity of assets
(2) branch expansion
(3) merger of banks
(4) winding-up of banks.
Select the correct answer using the codes given below:
Youth unemployment protests and the passage of the Micro, Small and Medium Enterprises Development (Amendment) Bill, 2026, have refocused attention on the Micro, Small and Medium Enterprises (MSME) sector as a job engine. The central argument is that industrial strength comes not from supporting isolated firms but from building clusters, dense ecosystems where suppliers, labour, research institutions and capital reinforce one another.
What is a cluster-based development model?
Definition: A cluster is a geographic concentration of firms in a related activity, together with their suppliers, workers, research institutions and finance, located close enough to reinforce one another.
Core idea: Proximity generates shared benefits that an isolated firm cannot capture on its own.
What is the “Little Giant” programme?
Chinese niche-firm scheme: The Little Giant programme is a Chinese policy that supports technically strong small firms operating in narrow specialised niches.
Support offered: It provides these firms with financing, tax support and research and development assistance.
How significant is the MSME sector in India?
Number of firms: India has 63 million MSMEs.
Employment: They employ more than 320 million people.
Output share: They contribute about 31% of Gross Domestic Product (GDP) and 35% of manufacturing output.
Exports: They account for 49% of exports.
Structural weakness: The sector remains largely informal, fragmented and concentrated in low-value activities.
What does the MSME Development (Amendment) Bill, 2026, address?
Delayed payments: It seeks to tackle the problem of delayed payments to smaller firms.
Dispute resolution: It aims to ease dispute resolution for MSMEs.
Compliance burden: It reduces some compliance burdens on the sector.
Limits: It does not by itself resolve the deeper problems of credit access and the burden of Goods and Services Tax (GST), labour, environmental and tax compliance.
Why do clusters work?
Knowledge spillovers: Technical know-how spreads quickly through worker mobility, informal interaction and shared service providers.
Talent pooling: A cluster creates a real labour market that attracts and retains specialised workers, which an isolated firm struggles to hire.
Lower fixed costs: Firms share infrastructure such as testing labs, effluent-treatment plants, cold storage and logistics hubs.
What do global cluster models demonstrate?
United States, Research Triangle: In North Carolina, universities such as Duke, the University of North Carolina at Chapel Hill and North Carolina State anchored biotechnology and pharmaceutical ecosystems by connecting research with industry.
China, Guangdong: Industrial zones with land, tax incentives and infrastructure created thick supplier networks, letting firms design, fabricate and prototype quickly.
China, Little Giant programme: Dedicated support to technically strong small firms in narrow niches through financing, tax support and research assistance.
Why have India’s existing cluster schemes underperformed?
Infrastructure grants, not ecosystems: India already runs the MSME Cluster Development Programme and PM MITRA textile parks, but many function more like infrastructure grants than true ecosystem builders.
Firm-level lending: Banks still assess firms individually despite a large MSME credit gap, ignoring cluster-level ties.
Disconnected universities: Top Indian universities often remain disconnected from nearby industry, unlike US and Chinese models.
What policies can make clusters engines of jobs?
Specialised hubs: Move from generic industrial estates to sector-specific clusters, such as auto components in Pune and electronics in Sriperumbudur.
An Indian Little Giant scheme: Identify hidden champions in fields like precision castings and defence components, and give them dedicated credit lines, faster patent processing, research support and priority procurement.
Cluster-level financing: Assess shared collateral, buyer-supplier ties and collective performance, expanding the Tiruppur textile model through the Small Industries Development Bank of India (SIDBI) and cluster-focused non-banking financial companies.
University-industry links: Place universities at the centre of the ecosystem as suppliers of talent, lab infrastructure and innovation.
Conclusion:
MSMEs can become engines of jobs, productivity and exports only if policy shifts from isolated firm support to ecosystem building. The Amendment Bill helps with payments, disputes and compliance, but the binding constraints of fragmented finance and weak knowledge networks are addressed only at the cluster level. Strong specialised clusters, cluster-based finance and closer university-industry ties are the missing preconditions.
Back2Basics:
About MSMEs in India
Definition: MSMEs are enterprises classified by investment in plant and machinery or equipment and by annual turnover.
Classification: Micro (investment up to Rs 1 crore, turnover up to Rs 5 crore), Small (up to Rs 10 crore and Rs 50 crore), Medium (up to Rs 50 crore and Rs 250 crore).
Economic role: MSMEs are the second-largest employer after agriculture and a backbone of manufacturing and exports.
Registration: Firms register on the Udyam portal for formal recognition and scheme access.
Statutory Framework Governing MSMEs
Micro, Small and Medium Enterprises Development Act, 2006: Provides the legal definition and framework for MSMEs and for tackling delayed payments.
MSME Development (Amendment) Bill, 2026: Strengthens provisions on delayed payments, dispute resolution and compliance.
Governing Act: Micro, Small and Medium Enterprises Development Act, 2006.
Ministry: Ministry of Micro, Small and Medium Enterprises.
Development bank: SIDBI is the principal financial institution for the sector.
Registration portal: Udyam Registration.
Composite criteria: Classification uses both investment and turnover.
Government Initiatives for MSMEs
MSME Cluster Development Programme: Supports common facilities and infrastructure for firm clusters.
PM MITRA Parks: Integrated textile parks to build scale and supplier networks.
Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE): Provides collateral-free credit guarantees.
PM Vishwakarma: Supports traditional artisans and craftspeople.
Prime Minister’s Employment Generation Programme (PMEGP): Credit-linked subsidy for micro-enterprise creation.
Key Facts about the MSME Sector
Firm count: 63 million MSMEs.
Employment: More than 320 million people.
GDP share: About 31%.
Export share: 49%.
Manufacturing output share: 35%.
Challenges in the MSME Sector
Credit gap: Limited access to affordable formal credit, worsened by firm-level rather than cluster-level assessment.
Compliance burden: GST, labour, environmental and tax compliance weigh heavily on small firms.
Informality: Most MSMEs remain outside the formal system, limiting scale and finance.
Low value addition: Concentration in low-value activities caps productivity and wages.
Delayed payments: Late payments from buyers strain working capital.
Weak technology and skills: Limited access to research, testing and specialised labour.
Way Forward
Build specialised clusters: Concentrate resources in sector-specific hubs rather than generic estates.
Cluster-based lending: Reform credit appraisal to use collective performance and supplier ties.
Identify hidden champions: Support niche high-performers with dedicated finance and procurement.
Integrate universities: Anchor clusters with research institutions for talent and innovation.
Ease compliance: Simplify and consolidate regulatory requirements for small firms.
PYQ Relevance
[UPSC 2023] Faster economic growth requires increased share of the manufacturing sector in GDP, particularly of MSMEs. Comment on the present policies of the Government in this regard.
Linkage: Examines how MSMEs can drive manufacturing-led economic growth. The article highlights the shift from firm-level support to cluster-based MSME development. It shows how finance, infrastructure, skills and industry-university linkages can raise MSME productivity and jobs
The government is in the final planning stages of the third phase of the intra-state Green Energy Corridor (GEC) and has sent the scheme to the Union Cabinet for approval. The phase carries an outlay of more than Rs 50,000 crore and targets the evacuation of about 135 gigawatts (GW) of renewable energy, marking a shift towards strengthening transmission from renewable-energy rich States.
What is the Green Energy Corridor (GEC)?
Renewable evacuation network: GEC is a scheme to build transmission infrastructure that carries electricity from renewable-energy rich areas to demand centres.
Grid synchronisation: It links variable solar and wind generation with conventional power stations in the grid so that renewable power can be evacuated reliably from one location to another.
What does GEC Phase III propose?
Cabinet stage: The third phase has been sent to the Union Cabinet for final approval.
Outlay: The scheme carries an outlay of more than Rs 50,000 crore.
Evacuation target: The Ministry of New and Renewable Energy (MNRE) aims to evacuate about 135 GW of renewable energy in this phase.
Focus area: The phase concentrates on augmenting intra-state transmission lines in renewable-energy rich States.
Why have earlier phases faced delays?
Right of way: Difficulty in securing right of way for transmission lines held up Phase I.
Award delays: Delay in awarding project packages slowed progress.
Forest clearances: Delays in forest clearances stalled work.
Great Indian Bustard clearances: Clearances tied to the protection of the critically endangered Great Indian Bustard (GIB), whose habitat overlaps solar and wind zones in Rajasthan and Gujarat, delayed Phase I.
State and regulatory issues: Non-participation of States during tendering, tender consultation and regulatory issues affected Phase II.
Conclusion:
GEC Phase III awaits Cabinet clearance and, if approved, will extend intra-state transmission capacity to evacuate about 135 GW of renewable power. With most Phase II packages already awarded and expected to complete within two years, the next milestone is Cabinet approval and the resolution of recurring right-of-way, forest and GIB clearance bottlenecks that have delayed earlier phases.
Back2Basics: Green Energy Corridor (GEC) Scheme
Ministry: Ministry of New and Renewable Energy.
Objective: Build intra-state and inter-state transmission systems to evacuate renewable power.
Structure: Implemented in phases, with intra-state components handled by State transmission utilities.
Support: Funded through a mix of central grants, State contributions and multilateral loans.
Beneficiaries: Renewable-energy rich States and the wider grid.
About Renewable Energy Transmission in India
Definition: Renewable energy transmission moves power generated from solar, wind and other renewable sources to consumption centres across States.
Why it matters: Renewable generation is concentrated in a few resource-rich States, so evacuation infrastructure is essential to avoid stranded capacity.
India’s standing: India is among the world’s largest renewable energy markets and has set large capacity addition targets for 2030.
Structural feature: Variable renewable output requires grid balancing with conventional and storage capacity.
Government Initiatives for Renewable Energy
National Solar Mission: Promotes large-scale solar deployment under the National Action Plan on Climate Change.
PM-KUSUM: Supports solar pumps and grid-connected solar for farmers.
PM Surya Ghar: Muft Bijli Yojana: Promotes rooftop solar for households.
Production Linked Incentive for solar modules: Builds domestic solar manufacturing capacity.
Green Hydrogen Mission: Promotes production of green hydrogen using renewable power.
Key Facts about India’s Renewable Energy Sector
2030 target: India aims for 500 GW of non-fossil fuel electricity capacity by 2030.
Nodal ministry: Ministry of New and Renewable Energy.
Grid operator: Grid Controller of India manages national load dispatch.
Species overlap: The Great Indian Bustard is a critically endangered species whose habitat intersects renewable zones, driving clearance conditions.
Challenges in Renewable Energy Transmission
Land and right of way: Acquiring land and corridors for transmission lines is slow and contested.
Clearance delays: Forest and wildlife clearances, including GIB-related conditions, hold up projects.
State coordination: Uneven State participation in tendering and implementation delays intra-state work.
Fast-track clearances: Streamline forest and wildlife clearances with mitigation for GIB habitat, including undergrounding of lines where feasible.
Strengthen State participation: Improve incentives and coordination for State utilities in tendering.
Expand storage: Scale up battery and pumped-hydro storage alongside transmission.
Timely awards: Reduce delays in awarding and executing project packages.
Grid modernisation: Invest in smart grids and forecasting to manage variable generation.
PYQ Relevance
[UPSC 2022] Do you think India will meet 50 percent of its energy needs 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: The PYQ examines India’s transition towards renewable energy and the challenges in achieving its 2030 targets. GEC Phase III strengthens renewable energy evacuation and grid infrastructure. This supports India’s 2030 renewable-energy targets.
The unemployment rate for persons aged 15 years and above rose to 5.4% in April-June 2026, a four-quarter high, according to the Periodic Labour Force Survey (PLFS). Youth and urban women experienced the sharpest increase.
What is PLFS?
PLFS: Periodic Labour Force Survey.
Conducted by the National Statistical Office (NSO) under the Ministry of Statistics and Programme Implementation (MoSPI).
Launched in 2017.
Replaced the earlier quinquennial Employment-Unemployment Surveys.
Provides regular employment and unemployment estimates.
What did April-June 2026 PLFS Show?
Overall: 5.4% from 5.0% in the previous quarter.
Rural: 4.8% from 4.3%.
Urban: 6.7% from 6.6%.
Female: 5.7% from 5.3%.
Male: 5.3% from 4.8%.
Employed population: About 566 million, including 402 million males and 164 million females.
Where is Joblessness Concentrated?
Youth (15-29 years): 15.9%, the highest in the current PLFS series.
Female youth: 19.6%, a series high.
Urban females: 8.7% compared with 6.1% for urban males.
Rural females: 4.7%, close to rural males at 4.8%.
Key takeaway: The headline unemployment rate masks much higher youth and urban female unemployment, pointing to problems of job quality, skills and labour-market absorption.
About Unemployment
Unemployment refers to people in the labour force who are willing and able to work but do not have work.
Key Labour Indicators
Labour Force Participation Rate (LFPR): Labour force as a percentage of the working-age population.
Worker Population Ratio (WPR): Employed persons as a percentage of the population.
Unemployment Rate (UR): Unemployed persons as a percentage of the labour force.
Types of Unemployment
Structural: Skill or location mismatch with available jobs.
Frictional: Temporary unemployment while changing jobs.
Cyclical: Caused by economic downturns.
Disguised: More workers employed than required, common in agriculture.
Seasonal: Employment varies with seasons, especially agriculture.
Back2Basics: PLFS
Full form: Periodic Labour Force Survey.
Conducted by: National Statistical Office (NSO).
Ministry: Ministry of Statistics and Programme Implementation (MoSPI).
Launched: 2017.
Coverage: Rural and urban India.
Key measures:Usual Status and Current Weekly Status (CWS).
Youth: Persons aged 15-29 years.
Government Initiatives
MGNREGA: Mahatma Gandhi National Rural Employment Guarantee Act, providing up to 100 days of rural wage employment.
“[2023, GS3, 15 marks] Most of the unemployment in India is structural in nature. Examine the methodology adopted to compute unemployment in the country and suggest improvements.”
[2018] With reference to Pradhan Mantri Kaushal Vikas Yojana, consider the following statements :
1. It is the flagship scheme of the Ministry of Labour and Employment. 2. It, among other things, will also impart training in soft skills, entrepreneurship, financial and digital literacy. 3. 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 has passed the Taxation and Other Laws (Amendment) Bill, 2026, allowing a legal framework for possible charges on Unified Payments Interface (UPI) and RuPay debit card transactions. The debate centres on whether digital payments should remain free to promote inclusion or adopt a sustainable funding model.
What is UPI?
UPI: Unified Payments Interface.
Enables instant bank-to-bank payments through mobile applications.
Operated by the National Payments Corporation of India (NPCI).
Processed 23.6 billion transactions in July.
What is Merchant Discount Rate (MDR)?
MDR: Merchant Discount Rate.
A fee charged for processing digital payments, generally paid by merchants.
Credit-card MDR: around 1-3%.
Debit-card MDR: up to 0.9%.
UPI has followed a zero-MDR regime since 2020.
What Does the 2026 Bill Do?
Amends Section 10A of the Payment and Settlement Systems Act, 2007.
Creates legal space for the government to notify charges on specified electronic payment modes.
A proposed MDR of 0.25-0.5% has been discussed for UPI transactions above ₹2,000.
This could cover about 5% of transactions by volume but around 65% by value.
The government has stated that consumers and small merchants will not bear MDR and the final framework is yet to be decided.
Fraud prevention: Cybersecurity and fraud-control systems require funding.
Government support: ₹8,730 crore was provided through incentives during 2021-22 to 2024-25.
Funding gap: This covered only a limited share of industry costs.
Market concentration:PhonePe and Google Pay together account for around 80% of UPI transactions.
What is a Two-Sided Market?
A platform connecting two groups whose participation reinforces each other.
UPI: Consumers ↔ Payment platforms ↔ Merchants
More users attract more merchants, while more merchants attract more users. Therefore, imposing a charge on one side may reduce the network effect.
Why Could MDR Affect UPI?
Arguments for charges
Provides sustainable revenue for infrastructure.
Supports innovation and fraud prevention.
May attract more competitors into the UPI ecosystem.
Arguments against charges
Could discourage merchants and consumers from using digital payments.
Intermediaries may absorb the cost rather than pass it on.
Could weaken India’s financial inclusion and formalisation gains.
May encourage a shift back towards cash.
About India’s Digital Payments Ecosystem
RBI: Reserve Bank of India, the regulator.
NPCI: National Payments Corporation of India, operator of major retail payment rails.
Banks and fintechs: Participate as payment service providers.
UPI: Real-time account-to-account payment system.
RuPay: India’s domestic card payment network.
Statutory Framework
Payment and Settlement Systems Act, 2007: Regulates payment systems under RBI supervision.
Section 10A: Provides the framework for charges on specified electronic payment modes.
RBI Act, 1934: Establishes the Reserve Bank of India.
Information Technology Act, 2000: Provides legal recognition to electronic records and authentication.
Back2Basics: NPCI
Full form: National Payments Corporation of India.
Established: 2008.
Nature: Not-for-profit company.
Promoted by: Banks under the guidance of RBI and Indian Banks’ Association (IBA).
Key systems: UPI, RuPay, Immediate Payment Service (IMPS), FASTag and Bharat Bill Payment System (BBPS).
Government Initiatives
UPI Incentive Scheme: Supports the cost of low-value UPI transactions.
Digital India Programme: Expands digital infrastructure and inclusion.
BHIM: Bharat Interface for Money, NPCI’s UPI application.
RuPay: Domestic card network.
JAM: Jan Dhan-Aadhaar-Mobile trinity supporting digital transfers and financial inclusion.
“[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
Researchers have reported evidence of non-Mendelian inheritance in mice, involving DNA methylation, genomic imprinting and paramutation. Nanopore sequencing helped detect these epigenetic marks.
What is Epigenetic Inheritance?
Definition: Transmission of heritable changes in gene activity without altering the underlying DNA sequence.
Major mechanism: Chemical modifications such as DNA methylation can influence whether genes are switched on or off.
Non-Mendelian: Unlike classical Mendelian inheritance, the inherited information is not limited to changes in the DNA sequence.
Genomic imprinting: Expression of certain genes depends on whether they are inherited from the mother or father.
Paramutation: One allele can induce a heritable change in the expression of another allele without changing its DNA sequence.
Nanopore sequencing: Can detect certain DNA modifications, including methylation, while sequencing DNA.
Why does it matter?
Expands inheritance theory: Heritable information can involve regulatory/epigenetic states in addition to DNA sequence.
Environment and inheritance: Some environmental factors can influence epigenetic states, though not every acquired epigenetic change is necessarily inherited.
Disease relevance: Abnormal epigenetic regulation is associated with cancers and other diseases.
Biotechnology: Advanced sequencing can help identify epigenetic modifications alongside DNA sequences.
“[2021, GS3, 15 marks] What are the research and developmental achievements in applied biotechnology? How will these achievements help to uplift the poorer sections of society?
[2021]In the context of hereditary diseases, consider the following statements: 1. Passing on mitochondrial diseases from parent to child can be prevented by mitochondrial replacement therapy either before or after in vitro fertilization of egg. 2. A child inherits mitochondrial diseases entirely from mother and not from father. Which of the statements given above is/are correct?
A university team has developed Raygun, an AI tool that can redesign and miniaturise proteins while retaining their function. This could improve the delivery of protein-based therapies and accelerate drug development.
What is AI-based Protein Engineering?
Protein engineering: Designing or modifying proteins to obtain desired properties such as smaller size, stability or specific biological functions.
AI-based design: AI models trained on protein sequences can predict and generate redesigned protein structures.
Raygun: The tool can shrink proteins while attempting to preserve their function, potentially making them easier to deliver.
Why does it matter?
Gene therapy: Delivery vectors have limited cargo capacity. Smaller functional proteins can make therapeutic delivery easier.
Drug development: AI can reduce dependence on lengthy trial-and-error approaches in protein design.
Precision medicine: Engineered proteins could potentially be tailored for specific therapeutic functions.
Protein engineering: Modifies/designs the protein to alter its properties.
Gene editing: Directly modifies DNA sequences.
AI protein design: Uses computational models to predict or generate useful protein sequences/structures.
Gene therapy: Uses genetic material or biological mechanisms to treat disease.
[2026] Which of the following statements with regard to genetic medicine is/are correct ? 1. Genetic medicines correct/compensate for the faulty genes responsible for disease. 2. Engineered viruses and lipid nanoparticles are used as carriers of the genetic medicine. 3. Genetic medicines alter the entire DNA sequence. Select the answer using the code given below :
