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  • [29th August 2026] The Hindu OpED: Unkind cuts: On the Telangana and Karnataka electoral rolls

    [29th August 2026] The Hindu OpED: Unkind cuts: On the Telangana and Karnataka electoral rolls

    Question (2018, GS2): “In the light of recent controversy regarding the use of Electronic Voting Machines (EVM), what are the challenges before the Election Commission of India to ensure the trustworthiness of elections in India?
    Linkage: The core of the current news is the concern over potential wrongful disenfranchisement vs. genuine roll clean-up. When the ECI implements large-scale deletions (up to 50% in some urban constituencies) without releasing verifiable metrics like the elector-to-population ratio, it creates a transparency deficit. This directly mirrors the challenge of maintaining public trust in the electoral process, similar to the EVM debate.

    Mentor Comment:

    The Election Commission of India’s Special Intensive Revision (SIR) has struck off nearly a fifth of the electoral rolls in Telangana and Karnataka, about 22 per cent and 19.5 per cent respectively, with some Bengaluru and Hyderabad constituencies losing more than 40 to 50 per cent of their electors. The revision has proceeded after the Supreme Court of India permitted the SIR process to continue, and follows the Bihar SIR, where the Court had questioned why political parties filed so few objections to wrongful deletions. The Commission has not published the elector-to-population ratio, the only test of under-enrolment, for any state during the revision, making it impossible to verify whether the deletions reflect genuine bloat or wrongful disenfranchisement.

    What is the Special Intensive Revision (SIR)?

    1. What it is: The SIR is an intensive revision of electoral rolls conducted by the Election Commission of India, distinct from its routine summary revision process.
    2. How it works: It places the onus on electors and political parties to file objections against wrongful deletions.
    3. Its template: The Bihar SIR set the process the Commission has since extended to other states, including Telangana and Karnataka.

    What does the scale of deletions in Telangana and Karnataka show?

    1. High deletion rates: Telangana lost about 22 per cent and Karnataka about 19.5 per cent of electoral roll names, among the highest deletion rates in the country.
    2. Sharpest cuts in capital cities: Five Bengaluru constituencies lost more than half their electors, and nine of Hyderabad’s 15 constituencies saw deletions of more than 40 per cent.
    3. Implausible as genuine bloat: Both states have high net in-migration from the rest of India, and a deletion is justified only if the elector left the state altogether, since a move within the state would only relocate a name on the same roll rather than remove it.

    Why is the Commission’s justification hard to verify?

    1. Mandatory ratio withheld: The Commission has not published the elector-to-population ratio for any state during the revision, though doing so is mandatory and is the only test of under-enrolment.
    2. Opaque data release: Karnataka’s Chief Electoral Officer has not released a gender-wise breakdown of deletions and has scattered lists across Google Drive links without the old booth numbers, making verification difficult.
    3. A precedent of wrongful exclusion: A similar “logical discrepancy” process in West Bengal disenfranchised lakhs of electors; a Right to Information request found barely 82,000 of nearly 38 lakh appeals before 19 tribunals had been decided months after the state’s elections, with more than 90 per cent of decided appeals restoring the elector.

    Challenges to the SIR process

    1. Onus on electors invites under-objection: Requiring electors and parties to actively contest wrongful deletions means low awareness and the infrequent use of a voter identity card lead to few objections being filed. Eg. During the Bihar SIR, the Supreme Court itself asked why political parties had filed so few objections. Fix. Shift the burden to the Commission by requiring it to proactively verify a deletion against updated residence or migration data before finalising it.
    2. Opacity defeats verification: Withholding the elector-to-population ratio and publishing deletion lists without booth numbers or gender breakdowns prevents independent scrutiny of whether cuts are justified. Eg. The Karnataka Chief Electoral Officer scattered deletion lists across Google Drive links without old booth numbers. Fix. Mandate publication of the elector-to-population ratio and a standardised, booth-wise deletion list for every state before a revision is finalised.

    Conclusion

    Unless the Commission publishes the verification data it is required to release, the scale of the Telangana and Karnataka deletions will remain unexplained, and the West Bengal experience suggests a substantial share of those struck off may eventually prove to have been wrongly excluded.

  • OBC creamy layer income test issue stuck between Ministries, says House panel chief

    Why in the News

    The chairperson of the House Committee on the welfare of Other Backward Classes (OBCs) has said the OBC creamy layer income test issue is stuck between the Department of Personnel and Training (DoPT) and the Ministry of Social Justice and Empowerment, with the Social Justice Ministry yet to formulate the policy needed to place the matter before the Cabinet. The issue follows a Supreme Court judgment in March that found the DoPT was practising “hostile discrimination” by applying the income test differently to OBC candidates whose parents worked in posts without an established equivalence to government service, and directed the government to exclude salaries from the test for that category and create supernumerary posts for wrongly denied candidates. The government had six months to implement the directions but has instead approached the Supreme Court arguing retrospective implementation is “extremely difficult.” Nearly six months on, the two Ministries continue to pass responsibility for the equivalence-of-posts policy to each other, leaving the Court’s directions unimplemented.

    What is the OBC creamy layer income test?

    1. What it does: The creamy layer income test excludes wealthier or higher-status members of Other Backward Classes from non-creamy-layer OBC reservation benefits, based on parental income and the equivalence of a parent’s post with government service.
    2. Where the dispute lies: The test has been applied differently depending on whether a parent’s post has an established equivalence with a government post.
    3. Its legal basis: The equivalence determination has rested on the DoPT’s interpretation of a 2004 letter.

    What did the Supreme Court’s ruling require?

    1. Finding of hostile discrimination: The Court held that the DoPT was practising hostile discrimination by applying the income test differently based on equivalence status.
    2. Salary exclusion direction: The Court directed the exclusion of salary income from the test for candidates whose parent’s post had no established equivalence with government service.
    3. Supernumerary posts direction: The Court directed the creation of supernumerary posts for OBC candidates wrongly denied non-creamy-layer status.

    Why has implementation stalled between the two Ministries?

    1. Policy not yet formulated: The Social Justice Ministry has not formulated the equivalence-of-posts policy needed before the matter can go to the Cabinet.
    2. Government contests retrospective application: The government told the Supreme Court that retrospective implementation is “extremely difficult” and argued that some cases must still count salary income.
    3. Responsibility passed back and forth: In 2025 committee hearings, the DoPT told the House panel the equivalence responsibility lay with the Social Justice Ministry, which has yet to respond to the committee on the issue.

    Conclusion

    The dispute is procedural rather than substantive, over which Ministry must act first, and until the Social Justice Ministry frames the equivalence policy, the Supreme Court’s correction to the OBC income test remains unimplemented well past its six-month deadline.

    Matching Previous Year Question

    No direct PYQ traced in the provided files.

  • 57 lakh active workers await e-KYC under new job scheme

    Why in the News

    The e-KYC verification rate of active rural employment guarantee workers stands at 94.88 per cent, two months after the launch of the Viksit Bharat Guarantee for Rozgar and Ajeevika Mission, Gramin (VB-G RAM G), leaving 57 lakh active workers unverified. The Union Rural Development Minister had assured, ahead of the scheme’s rollout, that existing e-KYC verified job cards under the Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS) would remain valid until new Gramin Rozgar Guarantee Cards are issued, and states had been asked to complete verification of all remaining active workers by the end of February, a deadline that was missed. e-KYC verification has now been made a condition for availing work under the new scheme, raising questions about whether unverified workers can access employment despite the Ministry’s assurance that no eligible worker will be left behind.

    What is the Viksit Bharat Guarantee for Rozgar and Ajeevika Mission, Gramin (VB-G RAM G)?

    1. What it replaces: VB-G RAM G is the new rural employment guarantee scheme that has replaced MGNREGS.
    2. Access condition: e-KYC verification of job cards is a condition for availing work under the new scheme.
    3. Transition safeguard: The Ministry has allowed exceptions in a few cases and assured that existing verified job cards remain valid until new cards are issued.

    What does the data show about the verification gap?

    1. Overall registration lags active workers: The e-KYC rate is 71 per cent among all registered workers against 94.88 per cent among active workers, those who availed work at least once in the last three years, leaving 57 lakh active workers unverified.
    2. Employment generation has fallen sharply: Person-days generated under VB-G RAM G in July, 7.67 crore, were 49.94 per cent lower than the 15.33 crore person-days generated under MGNREGS in July of the previous year.
    3. Wide state variation: Tamil Nadu has the highest e-KYC rates among large states, 99.32 per cent for active workers and 84.89 per cent overall, followed by Rajasthan at 95.66 per cent and 69.45 per cent, Uttar Pradesh at 94.21 per cent and 58.89 per cent, and Andhra Pradesh at 90.4 per cent and 82.32 per cent, while Bihar’s overall rate of 58.05 per cent is among the lowest for large states.

    Why did States miss the e-KYC deadlines?

    1. First deadline missed: The Rural Development Ministry asked States on 30 January to complete e-KYC verification of all remaining active workers within a week, as revealed by a Right to Information application filed by the National Campaign for People’s Right to Information.
    2. Second deadline also missed: States were again asked on 12 February to complete verification by the end of February, and nearly seven months later the target remains unmet.

    Challenges to VB-G RAM G’s rollout

    1. Verification bottleneck denying access: Making e-KYC mandatory before the backlog is cleared risks excluding otherwise eligible workers from guaranteed work. Eg. 57 lakh active workers remain unverified two months into the rollout. Fix. Extend the grace period for unverified active workers until states clear the backlog, rather than making verification a hard gate from the outset.
    2. State capacity variation: The wide gap between states, Bihar’s 58.05 per cent overall rate against Tamil Nadu’s 84.89 per cent, points to weak last-mile administrative capacity in some states. Eg. Bihar remains among the lowest performing large states despite repeated Ministry deadlines. Fix. Direct targeted central enumerator support to the lowest-performing states rather than applying a uniform national deadline.

    Conclusion

    The transition to VB-G RAM G is proceeding despite an unresolved verification backlog. The Ministry’s next milestone is closing the gap for the 57 lakh unverified active workers before its assurance of uninterrupted access is tested against actual demand for work.

    Matching Previous Year Question

    PrelimsPYQ.csv: “Among the following who are eligible to benefit from the “Mahatma Gandhi National Rural Employment Guarantee Act”? … (d) Adult members of any household” Answer: (d) — “MGNREGA benefits any adult member of a rural household, regardless of caste or economic status, providing 100 days of guaranteed work annually.” (2011, Microtheme: SchemeXRural/Agri, Subject: Governance)

  • Govt. track record on free coaching plan is poor: Congress

    Why in the News

    The Congress has questioned the Centre’s decision to launch free online coaching for students, citing the government’s poor implementation record under an existing coaching scheme. The criticism follows a Parliamentary Standing Committee on Social Justice and Empowerment report, tabled on 10 August, showing the Ministry of Social Justice and Empowerment enrolled only 2,790 of a targeted 10,500 candidates, about 26 per cent, under its existing free coaching scheme over three years, with the scheme’s allocation declining every year. It also follows the Leader of the Opposition’s remarks at a Kota event on 17 June that Indian families spend 2.5 times more on coaching centres than the Union government invests in education. The Congress has termed the free online coaching announcement an “accountability-evading gimmick,” questioning the government’s capacity to deliver at scale.

    What is the Social Justice Ministry’s free coaching scheme?

    1. Administering ministry: The scheme is run by the Ministry of Social Justice and Empowerment for candidates from Scheduled Castes, Scheduled Tribes, Other Backward Classes and other disadvantaged groups.
    2. Enrollment target: It had set a target of enrolling 10,500 candidates over three years.
    3. Funding trend: Its budgetary allocation has declined each year since.

    What does the committee’s report reveal about the scheme’s implementation?

    1. Sharp enrollment shortfall: Only 2,790 of the targeted 10,500 candidates, about 26 per cent, were enrolled over three years.
    2. Declining allocation: Funding for the scheme fell each year even as the shortfall persisted.
    3. Political context of the new announcement: The Congress says the Prime Minister’s Independence Day announcement of free online coaching followed public pressure after the Opposition Leader’s remarks on coaching dependence at Kota.

    Conclusion

    The dispute centres on whether the Centre can execute a new free online coaching commitment given its own record on the existing scheme. The government has not yet released implementation details for the new initiative, and the enrollment and funding data for the existing scheme remain the yardstick against which its rollout will be judged.

    Matching Previous Year Question

    No direct PYQ traced in the provided files.

  • Economy weathered West Asia shock. Now, reform for sustained growth (Op-ed by Sajjid Chinoy)

    Why in the News

    India’s gross domestic product (GDP) growth for the last quarter is expected to print close to 8 per cent, defying fears that the West Asia conflict had dented the economy. This follows a joint fiscal, monetary and regulatory stimulus through 2025, direct tax cuts, a Goods and Services Tax (GST) rationalisation, and an effective 150 basis point policy rate cut, combined with a swift diversification of energy imports during the conflict. The pickup is largely cyclical, and the investment rate, corporate capital expenditure (capex) and structural export and employment growth remain too weak to sustain the expansion once the stimulus fades.

    What explains India’s growth resilience through the West Asia conflict?

    1. A joint stimulus in 2025: Direct taxes were cut in February, GST was rationalised in September, and policy rates were cut by an effective 150 basis points along with regulatory easing in the financial sector.
    2. Non-oil export acceleration: Exports have picked up on the back of a near 15 per cent depreciation of the real effective exchange rate (REER), the trade weighted, inflation adjusted value of the rupee against a basket of currencies, since 2025, a reduction in United States tariffs, and resilient global growth.
    3. Swift energy diversification: India sourced crude from Russia and liquefied natural gas from the United States and Oman to prevent shortages, importing 17 per cent more energy than normal last quarter, while the government absorbed the bulk of the oil price shock through the fisc to insulate the private sector.

    Why does India’s investment rate remain a structural concern?

    1. Fixed investment stagnant: Fixed investment remains near its decadal average of 32 per cent of GDP and has not lifted despite rising public investment and real estate capex.
    2. Corporate capex has not picked up: Corporate capex continues to languish around 10 to 11 per cent of GDP, and balance sheets of the top 1,000 listed companies show no discernible pickup in 2025-26.
    3. Central capex is slowing: Central capex grew 30 per cent between 2020 and 2023, then slowed to 11 per cent in 2024 and just 1.6 per cent in 2025, as tax cuts absorbed fiscal space.
    4. State capex under pressure: Cash transfers on demand are pushing state capex growth below nominal GDP growth.
    5. Weak demand visibility: Capacity utilisation has stayed in the 75 to 76 per cent range for a decade, and rising Chinese overcapacity is discouraging corporate investment.

    Why are consumption and export growth not yet structural?

    1. Weaker growth than the earlier export led cycle: Post-pandemic private consumption and exports grew at about 5 per cent, against the 16 per cent export growth between 2003 and 2012 that had crowded in private capex.
    2. Service export growth has halved: Service export growth in nominal dollars has fallen to 8 per cent over the last year from 16 per cent over the previous four years, and employment across major IT firms has stayed flat.
    3. Employment mix is shifting toward self-employment: The Periodic Labour Force Survey shows India’s employment rate rising, but a significant share of new jobs are self-employed rather than salaried, even as the mix improved in 2025.
    4. Consumption is credit fuelled: Non-Banking Financial Company lending to households is growing at 20 per cent and unsecured personal lending momentum has risen to 25 per cent, on the back of rising household leverage.

    What must change for the growth cycle to become structural?

    1. Labour must become more competitive against capital: India’s capital-labour ratio has risen for over two decades, and reversing this needs education, skilling and health investment, alongside rationalising labour laws that raise the cost of labour.
    2. Exports need structural competitiveness: Goods exports have fallen from 17 per cent of GDP a decade ago to 11 per cent, and further gains need tariffs and non-tariff barriers rationalised and overregulation reduced.
    3. Private capex is the real crowding-in mechanism: Structurally higher consumption and exports are what would draw in a sustained private capex cycle, which in turn would crowd in foreign direct investment and stabilise the balance of payments.

    Conclusion

    The current cyclical strength, backed by clean corporate and financial balance sheets and a sustained agricultural surplus, is a bridge over the West Asia shock, not a destination. Unless investment, exports and employment turn structural, the growth cycle will not sustain once the fiscal and monetary stimulus fades, and the piece warns there is little time left to act given global automation, trade fragmentation and a fraying international order.

    Matching Previous Year Question

    No direct PYQ traced in the provided files.

  • FCNR(B) deposits push forex reserves to all-time high of $729 bn in August

    Why in the News

    The Reserve Bank of India’s concessional swap window for Foreign Currency Non-Resident (Bank), or FCNR(B), deposits has propelled India’s foreign exchange reserves to a record $729.33 billion as of 21 August, surpassing the previous all-time high of $728.49 billion recorded on 27 February, just a day before the United States and Israel struck Iran and touched off the West Asia conflict that drove global energy prices sharply higher. Reserves rose by $12.42 billion in the week ended 21 August alone, with FCNR(B) inflows of $65.4 billion accounting for most of the $72.85 billion that has entered India since three concessional swap windows opened on 8 June.

    What is driving reserves to a record, and what does the FCNR(B) window actually do?

    1. Scale of inflows: FCNR(B) deposits outstanding rose from $34.04 billion at the end of May to $65.4 billion by 21 August, since the window opened on 8 June, and reserves themselves jumped $12.42 billion in the week ended 21 August.
    2. Mechanism: Under the FCNR(B) scheme the central bank bears the full exchange rate risk on these non-resident deposits, since the money is held in foreign currency rather than converted into rupees, which let banks offer interest rates as high as 7.4 percent.
    3. Leveraged NRI participation: Non-resident Indians have also borrowed at lower interest rates abroad to deposit the proceeds into FCNR(B) accounts, earning returns of as much as 15 percent on the resulting spread.

    Why did reserves need rebuilding in the first place?

    1. The rupee was already under stress before the record: The rupee came under intense pressure from large foreign portfolio outflows, with $19 billion leaving Indian markets in 2025 and a further $24 billion in the first five months of 2026, pushing the currency to near 97 per dollar in mid-May.
    2. The West Asia conflict added an oil import shock: Since roughly 85 percent of India’s crude oil needs are met through imports, the conflict’s closure-driven spike in global energy prices raised the country’s import bill and added further pressure on the rupee just as reserves were near their earlier February high.
    3. The rupee remains down year-on-year despite the record reserves: The rupee closed at 95.39 per dollar on Friday, little changed from its 95.79 level on 4 June and still 8.1 percent weaker than a year earlier, showing the reserve build has stabilised rather than reversed the currency’s decline.

    What other measures accompanied the FCNR(B) window?

    1. Two additional swap windows: Announced alongside FCNR(B) on 5 June, swap facilities for Overseas Foreign Currency Borrowings and External Commercial Borrowings have together brought in $4.86 billion and $2.59 billion respectively since 8 June.
    2. Tax relief for foreign portfolio investors: The government removed capital gains and withholding taxes on foreign portfolio investment in government securities as part of the same package meant to pull in capital and support the rupee.
    3. An accelerated closure timeline: Because inflows arrived faster than expected, the RBI moved the FCNR(B) window’s closing date to 31 August, a month earlier than the originally announced 30 September deadline.

    Challenges to relying on FCNR(B)-driven reserve accumulation

    1. Weak currency response relative to precedent: The rupee has barely moved during this swap window, compared with the 2013 episode when the rupee rose 10.3 percent, from 67.6 to 61.3 per dollar, in the first 40 days after the RBI’s then-Governor introduced a similar FCNR(B) swap facility. Eg. The rupee moved from 95.79 to 95.39 per dollar between 4 June and 29 August this year, a fraction of the 2013 currency response to a comparable scheme. Fix. Pair reserve accumulation with structural measures that improve the current account, such as diversifying energy import sources, rather than treating swap-driven capital inflows alone as sufficient to support the currency.
    2. Reversal risk from leveraged hot money: A meaningful share of FCNR(B) inflows has been driven by non-resident Indians borrowing cheaply abroad to arbitrage into high-yield deposits, a flow that can reverse quickly once interest rate differentials narrow or the window closes. Eg. The window’s early closure on 31 August, a month ahead of schedule, was itself driven by inflows arriving faster than expected, which cuts both ways once the scheme ends and deposits mature. Fix. Stagger FCNR(B) maturities and monitor the redemption schedule closely to avoid a sudden reserve drawdown when large deposit tranches come due.

    Conclusion

    The FCNR(B) swap window has pushed India’s foreign exchange reserves past their previous February high to a record $729.33 billion, giving the Reserve Bank of India greater capacity to defend the rupee after a period of heavy foreign portfolio outflows and an oil price shock from the West Asia conflict. The rupee’s limited appreciation despite the record inflow, unlike the sharper rupee gains seen after the comparable 2013 swap window, signals the current build is cushioning rather than reversing currency pressure.

    Back2Basics: What are FCNR(B) deposits?

    1. FCNR(B) deposits are foreign currency accounts that non-resident Indians can hold with Indian banks, where the deposit and its returns stay denominated in the foreign currency rather than in rupees.
    2. The scheme shifts exchange rate risk onto the Reserve Bank of India rather than the depositor or the bank, which lets banks offer higher interest rates to attract inflows during periods of currency pressure.
    3. India last used a similar concessional FCNR(B) swap window in 2013, under then RBI Governor Raghuram Rajan, to stabilise the rupee following a sharp depreciation.

    Matching Previous Year Question

    No direct PYQ traced in the provided files (Pass 1: FCNR(B), forex reserves record — no match; Pass 2: balance of payments, current account — matches found were conceptually unrelated to a record reserves event).

  • Govt. eases norms for defence exports, licences

    Why in the News

    The Defence Ministry has simplified its Defence Export Standard Operating Procedure (SOP) and overhauled the Open General Export Licence (OGEL) framework to help Indian defence manufacturers access global markets faster. Stakeholder consultation with concerned ministries and government agencies has been dispensed with for exports of non-lethal defence items to most destinations, though safeguards continue for sensitive countries, and the same consultation requirement has been removed altogether for exports linked to international tenders and exhibitions.

    What has changed under the revised Export SOP?

    1. Reduced consultation for non-lethal exports: Stakeholder consultation with concerned ministries and agencies is no longer required for exporting non-lethal defence items to most destinations, though safeguards remain in force for sensitive countries.
    2. No consultation for tenders and exhibitions: The same consultation requirement has been dropped for exports of all items meant for international tenders and exhibitions, letting Indian companies pursue overseas opportunities faster.

    How has the OGEL framework been restructured?

    1. Consolidated procedures: Three separate OGEL SOPs, covering major platforms and equipment, parts and components, and intra-company technology transfer, have been merged into a single framework.
    2. Longer validity and wider country coverage: OGEL validity has been extended from two years to three, and its country coverage expanded from 41 countries to all countries except those designated negative or sensitive.
    3. A new licence category for long-term contracts: Indian companies with long-term contracts or agreements with foreign original equipment manufacturers can now obtain an OGEL for eligible items tied to that specific manufacturer, with validity aligned to the underlying contract.
    4. Expanded item coverage: OGEL eligibility now extends to civil-end-use exports of specified small-calibre arms components and protective equipment.

    Challenges to the liberalised export and licensing regime

    1. Diversion risk from wider country coverage: Extending OGEL coverage to all countries except a negative list raises the risk that dual-use or sensitive items reach unintended end users through re-export or transhipment. Eg. Widened general licensing regimes elsewhere have previously required retrofitted end-use verification systems after initial liberalisation exposed gaps, as seen in tightened United States Commerce Control List enforcement following early Export Administration Regulations liberalisation. Fix. Pair the wider OGEL coverage with mandatory post-export end-use certification audits for a sample of shipments to non-treaty destinations.
    2. Consultation removal versus oversight continuity: Dispensing with stakeholder consultation for non-lethal exports speeds approvals but removes a cross-ministry check that previously caught destination-specific concerns before shipment. Eg. Non-lethal classification itself can be contested, since components with civil and military dual use, such as certain protective equipment, may be misclassified at the exporter’s discretion. Fix. Retain a post-facto sampling audit by the Department of Defence Production even where pre-export consultation is waived.

    Conclusion

    The Defence Ministry’s overhaul of the Export SOP and the OGEL framework liberalises licensing timelines, validity and country coverage for Indian defence exporters while explicitly retaining safeguards for sensitive countries and technologies. The stated intent is to let Indian manufacturers respond faster to international tenders and deepen co-production ties with foreign original equipment manufacturers.

    Back2Basics: What is an Open General Export Licence (OGEL)?

    1. An OGEL is a standing, one-time authorisation that lets an eligible exporter self-generate export authorisations for multiple consignments of specified defence items without seeking a separate approval for every individual shipment.
    2. It is administered by the Defence Ministry’s Department of Defence Production and covers major platforms and equipment, parts and components, and intra-company technology transfers.
    3. Its use remains subject to end-destination safeguards, so items bound for negative or sensitive countries continue to require case-by-case authorisation outside the OGEL route.

    Matching Previous Year Question

    No direct PYQ traced in the provided files.

  • Problem with ethanol blending isn’t sugar — it’s reliance on grains; the way forward (Op-ed by Harish Damodaran)

    Why in the News

    India’s ethanol blended petrol (EBP) programme, an arrangement under which oil marketing companies blend ethanol into petrol to progressively raise the blending ratio, was designed primarily to help sugar mills earn an additional revenue stream so they could pay cane farmers on time. For the current supply year ending October 2026, grain based feedstock accounts for 759.8 crore litres, or 72.5 percent, of the 1,048.3 crore litres of ethanol allocated among distilleries, against 288.5 crore litres, or 27.5 percent, from sugarcane based feedstock. What began as a sugar-support programme has become a grain-dependent one, and the article argues this reversal, not sugar diversion, is the programme’s real problem.

    What is the Ethanol Blended Petrol (EBP) programme?

    1. About: The EBP programme requires oil marketing companies to blend ethanol into petrol at a rising target ratio, currently 20 percent under the E20 standard, to cut crude oil imports and support farm incomes.
    2. Feedstock: Ethanol can be produced from sugarcane derived molasses and juice, or from cereal grains such as maize and rice, through milling, starch extraction, fermentation, distillation and dehydration to 99.9 percent pure alcohol.
    3. Original design: The programme was conceived to give sugar mills a secondary revenue stream so they could clear cane payment dues to farmers, and was later extended to maize farmers as an additional demand source.

    How did the feedstock mix shift from sugarcane to grain?

    1. The molasses-only phase, till 2017-18: All ethanol supplied to oil marketing companies came from C-heavy molasses, the final byproduct of cane juice processing left after mills had recovered all economically extractable sugar.
    2. The B-heavy and direct-juice phase, from 2018-19: Mills began producing ethanol from intermediate B-heavy molasses and directly from cane juice or syrup, incentivised by higher government-set prices for ethanol from these routes, which let mills divert sucrose before it was even crystallised into sugar. Ethanol supplies to oil marketing companies rose from 38 crore litres in 2013-14 to 190 crore litres in 2018-19, and blending rose from 1.6 percent to 4.9 percent over the same period.
    3. The grain takeover, 2018-19 onward: Standalone grain-based distilleries, running on maize or on surplus and damaged rice sourced from the Food Corporation of India (FCI) or the open market, expanded independently of the sugar season. By 2023-24, grain-based feedstock supplied 402 crore litres, or 59.7 percent, of the 673 crore litre total that helped achieve 14.6 percent average blending, a reversal the article calls the tail wagging the dog.
    4. Current supply year, 2025-26: Of the 1,048.3 crore litres allocated to hit the E20 target, 759.8 crore litres, or 72.5 percent, is from grains and only 288.5 crore litres, or 27.5 percent, is from sugarcane-based feedstock, against a backdrop of September-ending sugar stocks projected at a 17-year low.

    Why is rice, not maize, now the likely mainstay feedstock?

    1. Maize supply risk: El Nino conditions are expected to persist through the first half of next year, raising doubts about maize availability for ethanol in 2026-27 even as sugarcane diversion is curtailed.
    2. Rising reliance on FCI rice: The government allocated 5.2 million tonnes of surplus FCI rice to ethanol distilleries for 2025-26, raised to 7.2 million tonnes in July; at 450 to 460 litres of ethanol per tonne, that yields only 325 to 330 crore litres, well short of the roughly 1,050 crore litres needed to sustain E20.
    3. Rice is water-intensive and underpriced for this use: FCI rice is sold to ethanol distilleries at Rs 23.2 per kg, with a reserve price of Rs 21 per kg for fully broken grains, against a retail market price of Rs 40 per kg for normal rice and Rs 30 per kg for broken rice, and rice is a water-guzzling crop to be diverting toward fuel at scale.
    4. Distillery capacity outpaces demand: Distillers have built an aggregate ethanol production capacity of nearly 2,000 crore litres, against 421 crore litres in 2014 and current annual offtake of 1,050 crore litres, and it is this installed capacity, not farmer need, that is driving the push for even higher blending standards such as E22, E25, E27 and E30.

    What effect has the programme had on maize farmers, and what is at risk if grain reliance deepens further?

    1. Maize price gains: With ethanol demand added to poultry and livestock feed demand, wholesale maize prices in India rose from a Rs 13.8 to Rs 17.8 per kg range in 2021 to a Rs 22.1 to Rs 24.5 range in 2024, benefiting maize growers the way the programme once benefited cane farmers.
    2. A rice-driven repeat of the same trade-off: Sustaining current blending targets without sugar or adequate maize would require earmarking still more FCI rice, a shift the article argues is difficult to justify given rice’s water footprint and its underpriced diversion from the food security stock.

    Way Forward

    1. Discourage standalone grain distilleries reliant on FCI rice: The government should end this diversion route and push distillers toward less water-intensive grains such as bajra and jowar, which carry 58 to 62 percent recoverable starch and can yield 380 to 400 litres of ethanol per tonne, comparable to maize, letting millet farmers gain the same price benefit maize growers have seen.
    2. Stop chasing blending targets ahead of schedule: The EBP programme was already succeeding at 10 to 15 percent blending, and the article notes the government’s own chief economic adviser has suggested reverting to the E10 standard, an argument the piece endorses as pragmatic rather than a retreat.

    Back2Basics: What is the E10/E20 standard?

    1. E10 and E20 denote the percentage of ethanol blended into petrol, so E20 petrol contains 20 percent ethanol against 80 percent petrol by volume.
    2. India crossed the E10 blending average in 2021-22 and reached the E20 national average in the current 2025-26 supply year, years ahead of the original 2030 target set for E20.
    3. Government notified fuel standards now extend beyond E20 to E22, E25, E27 and E30, reflecting distillery capacity built well beyond current ethanol offtake.

    Matching Previous Year Question

    PrelimsPYQ.csv: “In the context of alternative sources of energy, ethanol as a viable bio-fuel can be obtained from:” (2009, Microtheme: Biofertilizers/Fuels, Subject: Environment)

  • Policy mistakes, not ethanol, behind sugar price rise (Editorial)

    Why in the News

    Retail sugar prices have risen from an average of Rs 45 to Rs 65 per kg within a month, and the increase is being widely blamed on the ethanol blended petrol programme. Only 27.5 percent of the ethanol supplied by distilleries to oil marketing companies in 2025-26 came from sugarcane juice and molasses, with the balance from cereal grains, and the roughly 3 million tonnes of sugar diverted for ethanol is close to a tenth of the year’s 30.9 million tonne gross production. Similar or larger diversions in the four preceding sugar years did not cause comparable price spikes, which places the blame elsewhere.

    Is ethanol actually responsible for the price spike?

    1. Small diversion share: The estimated 3 million tonnes of sugar diverted to ethanol production is close to a tenth of the 30.9 million tonne gross sugar output for the year ending September 2026.
    2. No precedent for a price link: The four preceding sugar years saw diversions of 3.5 million tonnes, 2.4 million tonnes, 4.3 million tonnes and 3.6 million tonnes respectively, all without triggering a comparable price spiral.
    3. Feedstock mix has shifted away from sugar already: Only 27.5 percent of ethanol supplied to oil marketing companies in 2025-26 came from sugarcane juice and molasses, with the rest from cereal grains, so the programme is no longer primarily a sugar diversion story.

    What actually explains the price spurt?

    1. A large output shortfall: Gross sugar production for the year came in well below the initial 34.4 million tonne projection made at the start of crushing in November, a shortfall of 3.5 million tonnes.
    2. A late government response: Mills in Uttar Pradesh and Maharashtra were struggling to get cane and shutting down crushing operations by February, but the shortfall was not addressed until exports were banned only in mid-May.
    3. Panic measures after prices soared: From July, as a deficient June monsoon raised concerns about cane yields for 2026-27, the government imposed a 400 tonne stock limit with a 30 day holding cap on all dealers and ordered mills to furnish details of bulk buyers who purchased 500 tonnes or more.

    What should the government have done instead?

    1. Keep the import window open: Rather than banning exports, the government could have cut the tariff on raw and white sugar imports from 100 percent to zero by April, when most mills had stopped crushing.
    2. Rely on market intelligence over controls: The sugar industry runs on government-set controls, from cane pricing to how much a mill may sell in a given month, a control structure this crisis exposed as failing to anticipate and balance supply and demand.

    Conclusion

    The editorial’s central claim is that the sugar price rise is a policy failure, rooted in a delayed response to an anticipated output shortfall and a subsequent set of panic controls, not a consequence of the ethanol blending programme. The remedy it points to, opening the import window through tariff cuts rather than export bans and stock limits, remains untested by the government to date.

    Matching Previous Year Question

    PrelimsPYQ.csv: “Statement I: Of the two major ethanol producers in the world, i.e., Brazil and the United States of America, the former produces more ethanol than the latter. Statement II: Unlike in the United States of America, where corn is the principal feedstock for ethanol production, sugarcane is the principal feedstock for ethanol production in Brazil.” (2025, Microtheme: Biofertilizers/Fuels, Subject: Environment)

  • Government to introduce fortnightly sugar allocation

    Why in the News

    The Centre has decided to replace the existing monthly sugar quota system with a fortnightly allocation system from September. A physical verification of sugar stocks at mills found that many mills held stocks well beyond their declared monthly returns, that some mills engaged in short selling by selling less sugar than their monthly allocation, and that sugar sold at the start of a month was in some cases lifted by buyers only at the month’s end. The move tightens a monitoring system the government found could be gamed under a monthly cycle.

    Why did the government find the monthly quota system inadequate?

    1. Stock under-declaration: Physical verification showed many mills were holding stocks in excess of what they had declared in their monthly returns to the government.
    2. Short selling: Some mills sold less sugar than the quantity actually allocated to them under the monthly quota, without any monthly-cycle mechanism to catch the shortfall quickly.
    3. Delayed lifting by buyers: In some cases sugar sold by a mill early in the month was dispatched or lifted by the buyer only near the end of the month, defeating the purpose of a monthly release schedule.

    What does the new fortnightly system require?

    1. Split sale mandate: Mills must sell at least 40 percent of their fortnightly allocation in the first week and the remaining balance in the second week.
    2. Faster dispatch: Mills have been directed to dispatch sold sugar within a week of sale, closing the gap that allowed delayed lifting under the monthly system.
    3. Closer monitoring: A fortnightly cycle lets the government track the demand supply position more frequently, respond faster to market changes, and release additional quota where needed.

    Challenges to the fortnightly allocation system

    1. Compliance burden on mills: A fortnightly reporting and dispatch cycle roughly doubles the administrative and logistical load mills previously carried under a monthly system. Eg. Mills must now furnish dispatch proof and stock declarations twice as often, straining smaller mills with limited administrative staff. Fix. Phase in stricter reporting first for mills previously flagged for under-declaration or short selling, rather than applying the full compliance load uniformly from day one.
    2. Enforcement capacity: The scheme depends on the government’s ability to verify declarations at the mill level frequently enough to catch violations before the next cycle begins. Eg. The August verification exercise that triggered this shift was itself a one-time physical check, not a standing monitoring mechanism. Fix. Institutionalise periodic third-party stock audits rather than relying on ad hoc verification drives.

    Conclusion

    The fortnightly allocation system is a direct administrative response to mill-level under-declaration, short selling and delayed dispatch uncovered during stock verification. Crushing for the new sugar year begins on 15 October, with production of 10 lakh tonnes expected in October and 45 lakh tonnes in November, and mills are free to sell without restriction through October.

    Matching Previous Year Question

    No direct PYQ traced in the provided files.