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  • How excessive police force turns peaceful marches into medical crises 

    Why in the News

    An analysis examines how crowd control weapons meant to be non lethal cause serious injury during protests. The tension is between the state’s duty to maintain order and its obligation to protect the right to protest safely.

    What are less lethal weapons?

    1. Non lethal intent: Less lethal weapons are meant to disperse crowds without killing, but can cause serious harm.
    2. Common types: They include tear gas, pepper and PAVA spray, lathis, pellet guns, and shock batons.
    3. Chemical agents: Tear gas is a riot control agent that irritates the eyes and respiratory tract.

    Which are the types of less lethal weapons?

    1. Tear Gas: A chemical riot-control agent that causes intense eye irritation, tearing, coughing, breathing difficulty, and temporary disorientation. Its main chemical compounds include CS Gas (2-chlorobenzalmalononitrile), CN Gas (Chloroacetophenone), OC Gas (Oleoresin Capsicum), CR Gas (Dibenzoxazepine) and Chloropicrin (PS).
    2. Pepper Spray: An oleoresin capsicum (OC)-based spray that causes severe burning of the eyes, skin, and respiratory tract, leading to temporary incapacitation.
    3. PAVA Spray: A synthetic pepper spray (Pelargonic Acid Vanillylamide) that causes intense eye irritation and pain with a more controlled and consistent effect than natural pepper spray.
    4. Lathi: A wooden or polycarbonate baton used by police for crowd control through physical force.
    5. Pellet Guns: Firearms that discharge multiple small pellets to disperse crowds; they can cause serious injuries, particularly to the eyes. They are loaded with cartridges containing hundreds of small metal sub-projectiles.
    6. Shock Batons (Stun Batons): Handheld electroshock devices that deliver a brief electric shock to temporarily immobilise a person through pain and muscle disruption.

    Why do these weapons cause medical crises?

    1. Misuse at range: Pellet guns fired at close range or at the head cause blinding injuries.
    2. Enclosed spaces: Tear gas used in confined areas raises the risk of asphyxiation.
    3. Vulnerable groups: Children and people with respiratory illness face higher harm.

    What do international and domestic norms say?

    1. Chemical Weapons Convention: Under the Organisation for the Prohibition of Chemical Weapons rules, the Chemical Weapons Convention bans tear gas in warfare while permitting it for domestic policing.
    2. UN guidance: The United Nations Guidance on Less Lethal Weapons sets limits on their use.
    3. Precedent: The 2016 pellet gun injuries in Jammu and Kashmir left many with permanent vision loss.

    Conclusion

    The weapons are lawful for policing yet routinely cause disproportionate harm in practice. The unresolved gap is enforceable standards on how and when they are deployed.

    Back2Basics

    The United Nations Guidance on Less Lethal Weapons

    The United Nations Human Rights Guidance on the Use of Less-Lethal Weapons in Law Enforcement, released by the UN Human Rights Office (OHCHR), provides international standards for the lawful design, testing, training, and deployment of less-lethal equipment to prevent unnecessary harm, abuse, and human rights violations during policing and assemblies.

    Core Principles

    1. Legality: Use must be strictly authorized by domestic and international law.
    2. Necessity: Force is applied only when strictly necessary to achieve a legitimate law enforcement objective.
    3. Proportionality: Harm caused must not outweigh the objective; excessive force is prohibited.
    4. Accountability: States and agencies must track, record, and review every deployment of less-lethal systems.

    Scope and Covered Equipment

    1. Chemical Irritants: Regulations on tear gas and pepper spray deployment parameters.
    2. Kinetic Impact Projectiles: Standards for rubber bullets and beanbag rounds to avoid lethal head or torso strikes.
    3. Electric-Shock Weapons: Protocols for Tasers and other projectile stun systems.
    4. Area-Effect Tools: Oversight on water cannons and acoustic disruption gear.

    PYQ Relevance

    [UPSC 2021] Though the Human Rights Commissions have contributed immensely to the protection of human rights in India, yet they have failed to assert themselves against the mighty and powerful. Analyzing their structural and practical limitations, suggest remedial measures.

    Linkage: The PYQ examines India’s human rights protection framework and institutional accountability. The article highlights excessive use of less-lethal weapons and the need for stronger human rights safeguards and accountability.

  • India and Sri Lanka advance a slate of bilateral projects

    Why in the News

    A high level visit produced concrete movement across trade, finance, energy, and connectivity between India and Sri Lanka. The development adds to the standing bilateral dossier rather than resolving a single dispute.

    What is the 13th Amendment context?

    1. Devolution law: The 13th Amendment to Sri Lanka’s Constitution created Provincial Councils to devolve power, including to Tamil majority areas.
    2. India’s interest: India has consistently pressed for its full implementation and Provincial Council elections.
    3. Pending status: Implementation has remained incomplete for decades.

    What was agreed on this visit?

    1. Trade and social security: Both sides agreed to advance the free trade agreement update and a social security pact.
    2. Rupee credit: Agreements were exchanged on Indian Rupee denominated Lines of Credit worth $350 million within a $450 million Cyclone Ditwah reconstruction package.
    3. Energy and connectivity: Talks covered grid interconnection, the Sampur solar project, the Trincomalee energy hub, and Kankesanthurai harbour.
    4. Digital identity: A Unique Digital Identity project modelled on India’s system was discussed.

    Why does the relationship matter for India?

    1. Neighbourhood first: Sri Lanka is central to India’s regional policy.
    2. Strategic location: Its position astride Indian Ocean sea lanes shapes maritime security.
    3. China factor: Deeper Indian engagement counters competing external influence.

    Conclusion

    The visit deepens a multi sector partnership without a single headline pact. The next milestone is the finalisation of the free trade agreement update and the social security pact.

    [2022, GS2, 10 marks] India is an age-old friend of Sri Lanka.’ Discuss India’s role in the recent crisis in Sri Lanka the light of the preceding statement.”

  • [6th August 2026] The Hindu OpED: A climate resilience pathway between India and China

    PYQ Relevance
    [UPSC 2024]     The West is fostering India as an alternative to reduce dependence on China’s supply chain and as a strategic ally to counter China’s political and economic dominance.’ Explain this statement with examples.
    Linkage: The PYQ examines India-China strategic competition and the scope for selective cooperation amid geopolitical rivalry. The article shows how climate resilience and disaster management can provide a limited, low-risk avenue for India–China engagement despite strategic distrust.

    Mentor’s Comment

    El Niño delayed India’s monsoon, followed by intense rainfall that caused severe flooding in Mumbai, Surat, Assam, and Odisha. Similar extreme weather also affected Guangxi, Shaanxi, and Gansu in China, highlighting the increasing frequency of climate-related disasters. Shared exposure to extreme climate events is proposed as a low risk avenue for India China cooperation. The tension is between deep strategic rivalry and a narrow band of mutual interest in disaster resilience.

    How do India and China face similar climate challenges?

    1. Urbanisation: Wetlands, forests and permeable land are replaced by concrete, reducing natural water absorption.
    2. Drainage Deficit: Outdated drainage systems and poor waste management aggravate urban flooding.
    3. Loss of Green Spaces: Shrinking green cover increases runoff and weakens climate resilience.
    4. Coastal Risks: Coastal megacities face extreme rainfall, storm surges and sea-level rise.
    5. Inland Extremes: Inland cities experience recurring heatwaves, droughts and flash floods.
    6. Economic Costs: Climate disasters disrupt supply chains, reduce productivity and cause economic losses.
    7. Health Impacts: Frequent floods and heat events increase disease burden and public health risks.

    Past Engagement: How have India and China cooperated on climate resilience?

    1. Climate Frameworks: Since the early 1990s, summit-level joint statements, MoUs and agreements have promoted practical climate cooperation.
    2. Disaster & Data Cooperation: Collaboration covered floods, earthquakes, droughts, extreme weather, along with hydrological, oceanic and seismic data sharing, joint R&D and governance exchange.
    3. Strategic Economic Dialogues: Six dialogues focused on sustainable urban planning, waste management, sewage treatment, water efficiency and capacity building.
    4. Sister City Agreements: Delhi-Beijing, Mumbai-Shanghai and Chennai-Chongqing were created to implement joint urban resilience projects, but diplomatic tensions limited execution.
    5. Mutual Learning: China offers data-driven planning (transport, housing, drainage), while India contributes early warning systems, Heat Action Plans, cool roofs, nature-based solutions and community-led adaptation.
    6. Future Cooperation: Scope exists for sponge cities, resilient agriculture, hydrological modelling, Himalayan glacier monitoring and revival of shared water agreements (which ceased in 2022).

    What is the proposed cooperation pathway?

    In April 2026, the visit by a Chinese delegation led by China’s Special Envoy for Climate Change to New Delhi suggests that climate cooperation remains a priority.

    1. Shared exposure: Both countries face recurring monsoon floods and urban flooding disasters.
    2. Low risk domain: Disaster mitigation and urban resilience avoid the sensitivities of border and trade disputes.
    3. Existing channels: An April 2026 visit by a Chinese Special Envoy and past sister city agreements offer a base.

    What models could underpin it?

    1. Sponge cities: China’s urban water absorption model is cited as a resilience approach.
    2. Glacier concerns: Shared Himalayan glacier risks link both countries’ water security.
    3. City linkages: Past agreements between major cities offer a template for exchange.

    Why is the pathway limited?

    1. Strategic distrust: Border tensions constrain deeper engagement.
    2. Asymmetry: Cooperation must manage a large power imbalance.
    3. Narrow scope: Resilience cooperation cannot resolve the core rivalry.

    How can India and China bridge the climate finance gap?

    1. Public Funding Dependence: Climate adaptation is financed mainly through public funds in both countries.
    2. Private Capital: Expand blended finance, municipal bonds and credit enhancement to mobilise private investment.
    3. Ecosystem Gaps: Climate finance markets remain nascent, constrained by weak local capacity and regulatory gaps.
    4. Knowledge Exchange: Share evidence-based practices on innovative climate finance models.
    5. Global South Leadership: Develop common standards, metrics and fiscal frameworks for climate resilience financing.
    6. Win-Win Cooperation: Climate finance collaboration offers a low-risk pathway to strengthen India–China engagement and resilience.

    Conclusion

    Climate resilience offers a contained space for engagement without touching the strategic core. The unresolved question is whether either side will invest political capital in so narrow a domain.

  • Special Intensive Revision of electoral rolls sees mass deletions

    Why in the News

    A large intensive revision of electoral rolls has removed millions of names across States, with objection windows now open. The tension is between cleaning the rolls of ineligible entries and the risk of wrongful deletion of genuine voters.

    What is the Special Intensive Revision (SIR)?

    1. Roll revision: The Special Intensive Revision (SIR) is a house to house re verification of electoral rolls by the Election Commission of India.
    2. ASDD categories: Names are marked under absent, shifted, duplicate, and dead (ASDD) categories for deletion.
    3. Claims window: Deletions are provisional until the claims and objections period closes.

    What is the scale of deletion?

    1. Jharkhand: About 43.6 lakh names, or 16.5%, were removed from the draft roll.
    2. Karnataka: The State projects deletions of about 20% of electors.
    3. Correction route: Voters can seek restoration through Booth Level Officers and Form 6.

    Why is the revision contested?

    1. Wrongful removal: Genuine voters risk deletion through data errors.
    2. Compressed timeline: The claims and objections window runs only to 4 September 2026.
    3. Legal challenge: The revision faces litigation over its process and scale.

    “[2017] Consider the following statements:
    1. The Election Commission of India is a ‘ five-member body.
    2. Union Ministry of Home Affairs decides the election schedule for the conduct of both general elections and bye-elections.
    3. Election Commission resolves the disputes relating to splits/mergers of recognized political parties.
    Which of the statements given above is/are correct ?
    (a) 1 and 2 only
    (b) 2 only
    (c) 2 and 3 only
    (d) 3 only

  • Government summons Meta as Parliament flags limits of intermediary immunity

    Why in the News

    A parliamentary panel warned a large social media company that its legal immunity could be withdrawn after a content takedown and content safety failures. The tension is between platform safe harbour and the state’s demand for accountability.

    What is intermediary immunity under Section 79 of the IT Act, 2000?

    1. Definition of intermediary: An intermediary is any person or entity that receives, stores, or transmits an electronic record on behalf of another person, or provides any service with respect to that record. It includes, Internet and telecom providers, Web-hosting and cloud service providers, Search engines, Online marketplaces and e-commerce websites, Social media and messaging platforms, Online payment and auction sites and Cyber cafes.
    2. Safe harbour: Section 79 of the Information Technology Act, 2000 shields an intermediary from liability for third party content it hosts.
    3. Conditions: This protection applies only if their function is limited to providing access to communication, and they do not initiate, select, or modify the content, and they comply with due diligence requirements (such as removing unlawful content upon receiving actual knowledge or a court order).
    4. Intermediary test: The immunity depends on the platform qualifying as an intermediary rather than a content publisher.

    What triggered the summons?

    1. Video takedown: The platform briefly removed a video of the Prime Minister and later apologised.
    2. Harmful content: The government flagged child sexual abuse material and deepfake content on its platforms.
    3. Panel ultimatum: The Standing Committee on Information Technology sought testimony from the platform’s global head.

    Why is the immunity in question?

    1. Compliance failures: Officials argue the platform did not act on directives and grievances.
    2. Definition dispute: Officials contended it may not fall within the intermediary definition.
    3. Withdrawal threat: Loss of Section 79 cover would expose it to liability for user content.

    Conclusion

    The episode tests how far platform immunity survives repeated compliance failures. The next milestone is the platform’s response to the committee’s summons.

    Back2Basics

    Standing Committee on Communications and Information Technology

    It is a department-related parliamentary committee in India tasked with overseeing specific ministries, examining legislation, reviewing budget demands, and ensuring executive accountability. It was renamed from the Standing Committee on Information Technology in November 2021.

    Structure and Composition

    1. Total Members: 31 members (21 from Lok Sabha nominated by the Speaker and 10 from Rajya Sabha nominated by the Chairperson).
    2. Leadership: The Chairperson is appointed by the Lok Sabha Speaker.
    3. Tenure: The term of office for members does not exceed one year.
    4. Ministers: Sitting ministers are barred from holding membership on this committee

    Ministries under its Jurisdiction

    1. Ministry of Communications (including the Department of Telecommunications and Department of Posts)
    2. Ministry of Electronics and Information Technology (MeitY)
    3. Ministry of Information and Broadcasting (MIB)

    Core Functions

    1. Scrutinizing the annual Demands for Grants of the designated ministries.
    2. Examining Bills referred to it by the Lok Sabha Speaker or Rajya Sabha Chairperson.
    3. Considering national policy documents, performance reports, and long-term trends related to digital infrastructure, telecommunications, media regulations, and cyber security.

    PYQ Relevance

    [UPSC 2024] Social media and encrypting messaging services pose a serious security challenge. What measures have been adopted at various levels to address the security implications of social media? Also suggest any other remedies to address the problem.

    Linkage: The PYQ examines the regulatory and legal measures to address the security and accountability challenges posed by social media platforms. The article highlights the limits of intermediary immunity under Section 79 and the need for greater platform accountability for harmful content.

  • Government and faculty spar over the Indian Statistical Institute Bill, 2026

    Why in the News

    The Indian Statistical Institute (ISI) Bill, 2026 seeks to restructure the governance of the Indian Statistical Institute by converting it from a registered society into a government controlled statutory body corporate. The proposal has sparked concerns over institutional autonomy.

    What is the Indian Statistical Institute (ISI)?

    • Founded: Established in 1931 by Prasanta Chandra (P.C.) Mahalanobis.
    • Premier institution: A leading centre for statistics, mathematics, data science, computer science, quantitative economics and related research.
    • Institution of National Importance: Declared under the Indian Statistical Institute Act, 1959.
    • Administrative Ministry: Ministry of Statistics and Programme Implementation (MoSPI).
    • Current governance: Functions as a registered society managed by a representative Governing Council.

    What does the Bill propose?

    • Repeals the 1959 Act: Introduces the Indian Statistical Institute Bill, 2026.
    • Body corporate: Converts ISI from a society into a statutory body corporate with perpetual succession.
    • New governance structure: Replaces the Governing Council with an 11 member Board of Governors.
    • Greater government role: The Board will have a majority of government nominated members, increasing the Centre’s role in administration.

    Why are faculty members concerned?

    • Reduced academic autonomy: Faculty argue that greater government control may affect academic freedom and institutional independence.
    • Lack of consultation: They claim the Bill was drafted without adequate consultation with ISI’s academic community.
    • Demand for scrutiny: Opposition members have sought referral of the Bill to the Standing Committee on Finance for detailed examination.

    Prelims Pointers

    • Indian Statistical Institute (ISI) was founded in 1931 by P.C. Mahalanobis.
    • P.C. Mahalanobis developed the Mahalanobis Distance and played a key role in India’s statistical system and economic planning.
    • ISI is an Institution of National Importance under the Ministry of Statistics and Programme Implementation (MoSPI).
    • The Indian Statistical Institute Bill, 2026 proposes replacing the Governing Council with an 11 member Board of Governors.

    [2023] Consider the following organizations/bodies in India:
    1. The National Commission for Backward Classes
    2. The National Human Commission Rights
    3. The National Law Commission
    4. The National Consumer Disputes Redressal Commission
    How many of the above are constitutional bodies?

    [A] Only one

    [B] Only two

    [C] Only three

    [D] All four

  • Rajya Sabha passes the Supreme Court (Number of Judges) Amendment Bill, 2026 as a Money Bill

    Why in the News

    Parliament passed the Supreme Court (Number of Judges) Amendment Bill, 2026, increasing the sanctioned strength of the Supreme Court through the Money Bill route, triggering debate over the constitutional validity of bypassing the Rajya Sabha.

    What is a Money Bill?

    • Constitutional basis: Defined under Article 110 of the Constitution.
    • Scope: A Bill is a Money Bill only if it deals exclusively with matters such as:
      • Taxation, Government borrowing, Custody or withdrawal of money from the Consolidated Fund of India, Contingency Fun, and Appropriation of public money
    • Speaker’s certification: The Speaker of the Lok Sabha decides whether a Bill is a Money Bill, and the certification is endorsed on the Bill.
    • Limited role of Rajya Sabha: The Rajya Sabha can only recommend amendments within 14 days, which the Lok Sabha may accept or reject.

    What does the Bill provide?

    • Higher judicial strength: Increases the sanctioned strength of the Supreme Court from 34 to 38 judges, including the Chief Justice of India (CJI).
    • Replaces an Ordinance: Substitutes the Ordinance promulgated in May 2026.
    • Government’s objective: Reduce case pendency, improve judicial efficiency, and strengthen access to justice.

    Why is the Money Bill route controversial?

    • Constitutional issue pending: The validity of certifying certain laws as Money Bills is under consideration by a larger Constitution Bench of the Supreme Court.
    • Concern over precedent: In the Aadhaar judgment (2018), the dissenting opinion described the use of the Money Bill route for substantive legislation as a “fraud on the Constitution.”
    • Reduced parliamentary scrutiny: Since the Rajya Sabha has only an advisory role, critics argue that the route weakens bicameral legislative oversight.

    “[2014] The power to increase the number of judges in the Supreme Court of India is vested in?
    (a) The President of India.
    (b) The Parliament.
    (c) The Chief Justice of India.
    (d) The Law Commission.

  • FCRA Amendment Bill, 2026 and powers to take over foreign funded assets

    Why in the News

    FCRA Amendment Bill, 2026 will amend the foreign funding law would let a designated authority take over the assets of organisations that lose their registration. The tension is between the state’s control over foreign money and the autonomy of civil society and religious bodies.

    What is the Foreign Contribution (Regulation) Act, 2010?

    1. Governing law: The Foreign Contribution (Regulation) Act, 2010 (FCRA) regulates the acceptance and use of foreign donations by individuals and organisations.
    2. Registration: Bodies receiving foreign funds must register and route money through a designated bank account.
    3. Home Ministry: The Union Home Ministry administers registration, renewal, and cancellation.

    Key Rules and Goals

    1. Main Goal: Stop foreign money from harming the country, public order, or politics.
    2. Who Cannot Get Funds: Politicians, judges, government workers, and news media cannot accept foreign money.
    3. Bank Routing: Groups must use a single, approved bank account to get these funds.

    What does the amendment propose?

    1. Cessation clause: A new provision defines cessation of an FCRA certificate on cancellation or lapse. A certificate stops working if an organization fails to apply for renewal, gets denied, or lets the 5-year validity expire. The Bill proposes to increase oversight into processes relating to the handling of assets upon cancellation, surrender, or cessation of a certificate of registration, the management of defunct organisations, and other administrative and compliance processes.
    2. Asset vesting: On cessation, foreign contributions and assets vest in a government appointed Designated Authority, with proceeds going to the government.
    3. Retrospective reach: A clause would apply the vesting to assets already acquired.

    Why is the Bill contested?

    1. Sweeping powers: Critics argue it lets the executive seize and sell the assets of non governmental organisations.
    2. Faith bodies: Christian and other religious institutions fear disproportionate impact.
    3. Constitutional concerns: Objections cite Articles 14, 25, 26 and 300A on equality, religious freedom, and property.

    What are the challenges to the FCRA framework?

    1. Funding squeeze: Foreign contribution inflows have already fallen sharply after earlier tightening. Amnesty International India had to freeze operations in 2020 after the government froze its bank accounts over FCRA compliance disputes.
    2. Compliance burden: Small organisations struggle with reporting and renewal requirements.
    3. Chilling effect: Advocacy and rights groups face uncertainty over registration.
    4. Discretion risk: Wide discretion in cancellation invites arbitrariness.
    5. Judicial overhang: Asset vesting is likely to face challenge in the courts.

    Conclusion

    The Bill shifts the balance from regulating foreign money toward controlling the organisations that receive it. The next milestone is whether the government refers it to a Select Committee before passage.

    Back2Basics

    The Foreign Contribution (Regulation) Amendment Bill, 2026:

    It was introduced in the Lok Sabha on March 25, 2026 and it establishes a framework for managing and disposing of assets and unutilised foreign contributions of organizations that lose their FCRA certification.

    Key Provisions of the Bill

    1. Designated Authority: Creates an official body to supervise, manage, and temporarily or permanently vest assets created using foreign funds if an organization’s certificate is cancelled, surrendered, or expires.
    2. Places of Worship: Requires the authority to preserve the religious character of any asset that functions as a place of worship.
    3. Rationalized Penalties: Reduces maximum imprisonment terms for minor or technical violations of the Act from five years down to one year.
    4. Investigation Coordination: Mandates that state-level agencies secure central government approval prior to launching independent FCRA-related investigations.

    PYQ Relevance

    [UPSC 2025] Civil Society Organizations are often perceived as being anti-State actors rather than non-State actors. Do you agree? Justify.

    Linkage: The PYQ examines the relationship between the State and civil society organisations, and the balance between regulation and autonomy. The article highlights how the proposed FCRA amendments expand state control over NGOs. This raises concerns about civil society autonomy and constitutional freedoms.

  • RBI to resume licensing of Urban Cooperative Banks after two decades

    Why in the News

    The Reserve Bank of India (RBI) has announced that it will resume issuing licences for new Urban Cooperative Banks (UCBs) on an on tap basis, ending a pause of more than two decades. The move follows regulatory reforms aimed at strengthening governance and supervision in the cooperative banking sector.

    What is an Urban Cooperative Bank (UCB)?

    • Cooperative bank: A UCB is a cooperative society that provides banking services primarily in urban and semi urban areas.
    • Ownership: Owned and managed by its members on the principle of one member, one vote.
    • Dual regulation:
      • RBI: Banking operations, licensing, prudential norms and supervision.
      • State/Central Registrar of Cooperative Societies: Management, elections and administration.
    • Size: India has around 1,457 Urban Cooperative Banks.

    What is RBI changing?

    • On tap licensing: New UCB licences will be granted throughout the year, instead of one time licensing windows.
    • Review of concentration norms: RBI will revisit concentration risk norms for rural cooperative banks.
    • Interest rate framework: Plans to rationalise the interest rate framework across regulated entities for greater consistency.

    Why was licensing suspended?

    • Governance failures: Several UCBs suffered from weak governance, poor risk management and financial irregularities.
    • Bank failures: High profile failures raised concerns about depositor protection and financial stability.
    • Regulatory limitations: The dual control structure often hampered effective supervision.

    Why has RBI resumed licensing?

    • Stronger regulation: Amendments to the Banking Regulation Act, 1949 have enhanced RBI’s supervisory powers over cooperative banks.
    • Improved governance: Regulatory reforms have strengthened oversight and accountability.
    • Financial inclusion: New UCBs can expand access to affordable banking and credit in underserved urban and semi urban areas.

    Prelims Pointers

    • Urban Cooperative Banks (UCBs) operate mainly in urban and semi urban areas.
    • They are subject to dual regulation by the RBI and the Registrar of Cooperative Societies.
    • The Banking Regulation (Amendment) Act, 2020 strengthened RBI’s supervisory powers over cooperative banks.
    • On tap licensing allows eligible entities to apply for banking licences at any time instead of waiting for a specific licensing window.

    “[2021] With reference to ‘Urban Cooperative banks’ in India, consider the following statements:
    1.They are supervised and regulated by local boards set up by the State Governments.
    2.They can issue equity shares and preference shares.
    3.They were brought under the purview of the Banking Regulation Act, 1949 through an Amendment in 1966.
    Which of the statements given above is/are correct?
    (a) 1 only
    (b) 2 and 3 only
    (c) 1 and 3 only
    (d) 1, 2, and 3

  • Debate over who pays for UPI as the Taxation Bill enables charges on high value merchant transactions

    Why in the News

    The Taxation and Other Laws (Amendment) Bill, 2026 proposes to allow the government to impose Merchant Discount Rate (MDR) on selected Unified Payments Interface (UPI) transactions, reviving the debate over how India’s digital payments infrastructure should be financed.

    What is the Merchant Discount Rate (MDR)?

    • Transaction fee: The Merchant Discount Rate (MDR) is the fee charged to merchants by banks and payment service providers for processing digital payments.
    • Who pays? It is generally borne by the merchant, not the customer.
    • Current position: Since January 2020, UPI and RuPay debit card transactions have zero MDR, making them free for merchants and users.
    • Government support: The government has compensated service providers through incentive schemes to sustain the digital payments ecosystem.

    What does the Bill propose?

    • Enabling provision: The Taxation and Other Laws (Amendment) Bill, 2026 relaxes the existing restrictions on MDR.
    • Selective application: It empowers the government to notify specific UPI transactions on which MDR may be levied.
    • Likely scope: Discussions indicate the levy may apply to:
      • Merchants with high annual turnover, and
      • High value transactions above ₹2,000.
    • Objective: Ensure a financially sustainable digital payments ecosystem while protecting small merchants.

    Who should bear the cost of UPI?

    • Government funding: Continue compensating payment providers through budgetary support.
    • RBI surplus: The Reserve Bank of India’s surplus transfer could partly finance UPI infrastructure.
    • Banks and payment providers: Costs may be absorbed by financial institutions.
    • Merchants: Large merchants could bear MDR without affecting small businesses.
    • Policy challenge: Balance financial sustainability, merchant affordability, and continued digital payment adoption.

    Prelims Pointers

    • Merchant Discount Rate (MDR) is the fee paid by merchants for processing digital payment transactions.
    • UPI is operated by the National Payments Corporation of India (NPCI).
    • NPCI is an umbrella organisation for retail payment systems in India, established by the Reserve Bank of India (RBI) and the Indian Banks’ Association (IBA).
    • Zero MDR on UPI and RuPay debit card transactions has been in force since 2020.
    • The RBI periodically transfers its surplus to the Central Government under the provisions of the RBI Act, 1934.

    “[2025] Consider the following countries:
    I. United Arab Emirates
    II. France
    III. Germany
    IV. Singapore
    V. Bangladesh
    How many countries amongst the above are there other than India where international merchant payments are accepted under UPI?
    (a) Only two
    (b) Only three
    (c) Only four
    (d) All the five