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  • Derivatives trader base falls for first time in four years in FY26

    Why in the News

    The number of individual traders participating in the equity derivatives market fell 19% to 78.6 lakh in 2025-26 from 98.1 lakh a year earlier, according to data released by the Securities and Exchange Board of India (SEBI) on 20 August 2026. A smaller market has not turned into a safer one, since the average loss carried by each loss-making trader rose to its highest level since the analysis began.

    What are equity derivatives?

    1. About: Equity derivatives are contracts whose value is derived from an underlying share or share index, settled at or before a stated expiry date rather than by delivery of the underlying at the time of trade.
    2. Futures and options: A futures contract obliges both sides to transact at an agreed price on expiry. An option gives the buyer the right without the obligation, in exchange for a premium paid upfront.
    3. Why losses concentrate here: A small premium controls a large notional exposure, so a modest adverse price move can erase the entire amount committed.
    4. Contract value: Each contract carries a minimum notional value fixed by the regulator, which sets the smallest position an individual can take.

    What is the extreme loss margin?

    1. About: The extreme loss margin is an additional margin collected over and above the standard margin, calibrated to cover losses outside the range that normal margining assumes.
    2. How it was used here: SEBI increased the extreme loss margin for expiry-day trading by 2%, raising the cost of holding a position on the day price movement is sharpest.

    What is a weekly expiry?

    1. About: A weekly expiry is a contract that settles at the end of a given week rather than at the end of a month, which multiplies the number of short-dated, low-premium contracts available to trade.
    2. How it was restricted: SEBI limited weekly expiries to one index per exchange, cutting the number of high-turnover expiry events in a week.

    What do SEBI’s two studies show about participation and losses?

    1. Participation: The individual trader base fell 19% to 78.6 lakh in 2025-26 from 98.1 lakh in 2024-25, the first fall in four years, against 42.74 lakh in 2021-22 when the analysis began.
    2. Share of losing traders: The proportion of traders who incurred losses declined marginally to 87.7% in 2025-26 from 90.9% in 2024-25, the lowest level recorded since 2021-22.
    3. Aggregate losses: Aggregate losses fell 18% year-on-year to Rs 91,685 crore in 2025-26, and still remained higher than the levels recorded between 2021-22 and 2023-24.
    4. Loss per trader: The average loss per loss-making trader rose to Rs 1.16 lakh from Rs 1.13 lakh in 2024-25, the highest average loss recorded since 2021-22.
    5. Who remains the largest cohort: Individual traders continued to account for the largest cohort in the derivatives market despite the decline in participation.
    6. What the studies are: The two studies cover the profitability and the trading behaviour of individual derivatives traders, and were released on 20 August 2026 by SEBI’s Department of Economic and Policy Analysis II.

    Why does a smaller trader base not amount to a safer market?

    1. The averages moved in opposite directions: Aggregate losses fell 18% while the average loss per loss-making trader rose to a five-year high, so the burden concentrated rather than eased.
    2. The improvement in the loss ratio is marginal: A fall from 90.9% to 87.7% still leaves close to nine in ten participants losing money.
    3. The remaining participants are the more exposed ones: Those who stayed after the curbs are the traders willing to meet a higher minimum contract value and a higher expiry-day margin.
    4. Aggregate losses are still above the pre-boom level: Even after an 18% decline, losses in 2025-26 exceeded the levels recorded between 2021-22 and 2023-24.

    What explains the fall in participation?

    1. Fewer weekly expiry events: SEBI limited weekly expiries to one index per exchange, removing several of the short-dated contracts that carried the highest retail turnover.
    2. A higher entry ticket: The minimum contract value was raised to Rs 15 lakh to Rs 20 lakh, which prices out the smallest participants.
    3. A costlier expiry day: The extreme loss margin for expiry-day trading was increased by 2%, raising the capital required to hold the most volatile positions.
    4. The regulator’s own caveat: SEBI cautioned against attributing the decline entirely to the regulatory measures, stating that participation had already begun moderating before their implementation.

    What does the persistence data reveal about trader behaviour?

    1. Losses do not by themselves deter continuation: The second study found that incurring losses did not necessarily discourage traders from continuing to participate in derivatives.
    2. Persistence weakened this year: Only about 57% of the traders who formed the 2024-25 cohort continued trading in 2025-26, against a long-term average of around 65%.
    3. Nearly half stopped: 43% of that cohort stopped trading during the year.
    4. Experience does not improve outcomes: In 2023-24, 91.6% of traders who had reported losses in both 2021-22 and 2022-23 also reported losses in 2023-24.
    5. The probability holds across the experience range: The probability of making losses remained above 90% across traders with one to five years of experience.

    What challenges does retail investor protection in the derivatives market face?

    1. Curbs raise the entry price without changing the odds: A higher minimum contract value screens out small participants rather than improving the outcomes of those who remain. Eg. The probability of making losses stayed above 90% across traders with one to five years of experience.
    2. Losses do not teach: Repeated loss-making does not reliably drive exit, so a behavioural remedy cannot be assumed. Eg. 91.6% of traders who lost money in both 2021-22 and 2022-23 lost money again in 2023-24.
    3. Unregistered advisers and finfluencers: Trading advice reaches retail participants through channels outside the registered investment adviser framework. Eg. SEBI has issued repeated orders against unregistered persons offering stock recommendations on social media platforms.
    4. Migration to unregulated venues: Tightening a regulated segment can push activity to opaque alternatives rather than out of speculation altogether. Eg. SEBI and the Reserve Bank of India have repeatedly warned against unauthorised electronic trading platforms offering leveraged contracts.
    5. Exchange revenue tied to the volumes being curbed: Transaction charges and the derivatives segment are a significant part of exchange income, which creates a tension with tighter product rules. Eg. Weekly index expiries generated the highest turnover days on Indian exchanges before being limited to one index per exchange.
    6. Investor grievance redress capacity: Losses from a legitimate but unsuitable product are not a grievance, so the redress machinery does not reach the harm being measured. Eg. Aggregate losses of Rs 91,685 crore in 2025-26 arose from lawful transactions on regulated exchanges.
    7. Measurement lag on a fast-moving market: Behaviour is analysed a full financial year after it occurs, so remedies address a market that has already changed. Eg. The studies released in August 2026 report on the year ended March 2026.

    “[2025] Consider the following statements:

    I. India accounts for a very large portion of all equity option contracts traded globally, thus exhibiting a great boom.

    II. India’s stock market has grown rapidly in the recent past, even overtaking Hong Kong’s at some point in time.

    III. There is no regulatory body either to warn small investors about the risks of options trading or to act on unregistered financial advisors in this regard.

    Which of the statements given above are correct?

    (a) I and II only

    (b) II and III only

    (c) I and III only

    (d) I, II and III

  • BNP’s Alamgir elected new President of Bangladesh

    Why in the News

    Mirza Fakhrul Islam Alamgir, long time secretary general of the ruling Bangladesh Nationalist Party, was elected President of Bangladesh on 20 August 2026 in the first contested poll for the office in 35 years. He secured 255 of the 343 votes cast in Parliament against 88 for the nominee of the Jamaat-e-Islami led opposition alliance. The contest itself is the significant fact, since the office has been filled by consensus and uncontested polls for decades.

    How is the President of Bangladesh elected?

    1. Who votes: The President is elected indirectly by the members of Parliament, so the outcome reflects the composition of the House rather than a popular vote.
    2. Who conducts it: The Chief Election Commissioner acts as the Election Returning Officer and declares the result after counting.
    3. The vacancy rule: Under the Constitution, a new President is required to be elected within 90 days of the office falling vacant.
    4. What the office holds: The presidency is largely ceremonial, with executive authority resting with the Prime Minister and the Cabinet.

    What is the Jatiya Sangsad?

    1. What it is: The Jatiya Sangsad is Bangladesh’s unicameral Parliament, which both elects the President and provides the Prime Minister and Cabinet. Its composition therefore determines the presidential outcome in advance of the vote.

    What is Bangabhaban?

    1. What it is: Bangabhaban in Dhaka is the official residence and workplace of the President of Bangladesh. Its Darbar Hall is the venue at which the President takes the oath of office.

    What did the vote actually show about the balance in Parliament?

    1. The electorate: Of the total 349 registered voters, 343 voted in the election, and six lawmakers did not vote.
    2. The result: Mirza Fakhrul Islam Alamgir secured 255 votes and Oli Ahmed secured 88 votes.
    3. The losing candidate: Oli Ahmed, aged 84, is a retired Colonel and chairman of the Liberal Democratic Party, and was the nominee of the Jamaat-e-Islami led eleven party opposition alliance.
    4. The winning candidate’s standing: Alamgir, aged 78, is a long time secretary general of the Bangladesh Nationalist Party and a close ally of former Prime Minister Khaleda Zia.
    5. What the margin reflects: The ruling party and its allies hold a two thirds majority in Parliament following the general election that returned them to power.
    6. The break with recent practice: It was the first contested presidential election in Bangladesh since 1991, the office having largely been filled through consensus and uncontested polls in recent decades.

    Why did the presidency fall vacant?

    1. The resignation: Mohammed Shahabuddin resigned last month on health grounds before completing his five year tenure.
    2. His political association: He was a close aide of the deposed Prime Minister Sheikh Hasina, whose government fell in 2024.
    3. The constitutional consequence: The vacancy triggered the 90 day requirement for electing a successor.
    4. Why it became contested: With a changed parliamentary composition following the transition, the consensus mechanism that had filled the office in recent decades no longer held.

    What does a ceremonial presidency mean in Bangladesh’s system?

    1. Head of state, not head of government: The President is the head of state, while executive authority is exercised by the Prime Minister and the Cabinet.
    2. The formal military role: The President is designated supreme commander of the defence services, a title exercised on the advice of the government.
    3. Where discretion survives: The President’s independent discretion is confined to the appointment of the Prime Minister and the Chief Justice, and otherwise the office acts on advice.
    4. The order of succession: The Speaker of Parliament acts as President when the office falls vacant, until a successor is elected.
    5. The oath: The President elect will take the oath as Bangladesh’s 23rd President on Friday evening at the Darbar Hall of Bangabhaban.

    Why does the return of contested presidential politics matter?

    1. What consensus polls concealed: Uncontested elections meant the office was allocated by the ruling party rather than won, which removed any parliamentary test of the nominee.
    2. What a contest introduces: A recorded vote of 255 to 88 registers the size and composition of the opposition bloc inside Parliament.
    3. The opposition’s new configuration: The Jamaat-e-Islami led eleven party alliance fielded a joint candidate, which formalises an opposition grouping that had previously been fragmented.
    4. The signal of the abstentions: Six lawmakers declined to vote, which records dissent that a consensus procedure would have absorbed silently.
    5. The continuity of the office: The presidency remains ceremonial, so the contest changes the politics of the office without changing its powers.

    What does the change in Dhaka alter for India’s neighbourhood policy?

    1. A new majority to work with: The Bangladesh Nationalist Party and its allies hold a two thirds majority, which gives India a single interlocutor with the parliamentary strength to conclude agreements.
    2. A pending water file: The India Bangladesh Ganga Water Treaty of 1996 expires on 31 December, and its renewal must be negotiated with the new dispensation.
    3. The unresolved Teesta question: The Teesta water sharing agreement drafted in 2011 remains unsigned and has been Dhaka’s standing demand across governments.
    4. Connectivity projects in progress: Rail, road and port links built over the previous decade, including the Akhaura Agartala rail link and the Maitri Setu bridge, require continuity of commitment on both sides.
    5. The security file: Border management, insurgent sanctuaries in the northeast and the safety of minority communities are the standing items on which India seeks assurances from any government in Dhaka.

    Challenges to Bangladesh’s political transition

    1. A ceremonial head of state elected on party lines: A partisan presidency strains the office’s role as a neutral arbiter in disputes over government formation. Eg. The outgoing President was a close aide of the deposed Prime Minister and resigned before completing his tenure.
    2. Consolidation of power under a two thirds majority: A supermajority removes the parliamentary check on constitutional amendment. Eg. The ruling party and its allies hold a two thirds majority in the Jatiya Sangsad after the general election.
    3. An opposition organised around a religious party alliance: The main opposition bloc is led by a party with a contested constitutional history. Eg. The eleven party opposition alliance that fielded the losing presidential candidate is led by Jamaat-e-Islami.
    4. Institutional damage from the previous transition: Administrative and judicial appointments made under the earlier government remain politically contested. Eg. The presidency itself fell vacant through the resignation of an appointee of the deposed government.
    5. Economic pressure on a garment dependent economy: External demand shocks translate directly into employment and foreign exchange stress. Eg. Bangladesh’s export earnings are concentrated in ready made garments, which leaves the current account exposed to a single sector.
    6. Security of minority communities: Political transitions in Bangladesh have historically been followed by attacks on minorities. Eg. The period following the fall of the previous government in 2024 saw reported attacks on Hindu households and temples.
    7. Restoring routine electoral practice: A single contested election does not by itself re-establish competitive norms. Eg. It took 35 years for a contested presidential poll to recur after 1991.

    Conclusion

    Bangladesh has elected a new head of state through its first contested presidential poll in 35 years, with the ruling party’s nominee securing 255 votes against 88 for the opposition alliance’s candidate, from 343 of 349 registered voters. The office remains ceremonial, so the outcome registers the parliamentary balance after the political transition rather than shifting executive power. The next milestone is the oath of office as Bangladesh’s 23rd President on Friday evening at the Darbar Hall of Bangabhaban.

    About India Bangladesh Relations

    1. The border: India and Bangladesh share a land boundary of 4,096.7 km, India’s longest with any neighbour, running along West Bengal, Assam, Meghalaya, Tripura and Mizoram.
    2. The rivers: The two countries share 54 common rivers, and water sharing is the most persistent item on the bilateral agenda.
    3. Trade: Bangladesh is India’s largest trade partner in South Asia, and India is among the largest sources of Bangladesh’s imports.
    4. Connectivity: Rail links, inland waterway protocol routes, bus services and port access arrangements have been progressively restored since 2015 after decades of disuse.
    5. Energy: India supplies electricity to Bangladesh across the interconnection at Bheramara and through cross border transmission links, and the two countries operate a diesel pipeline between them.
    6. Development partnership: India has extended three Lines of Credit to Bangladesh totalling about $7.862 billion, its largest such commitment to any single country.

    Constitutional Framework Governing the Presidency in Bangladesh

    1. Article 48: Provides for a President elected by the members of Parliament, and requires the President to act on the advice of the Prime Minister except in appointing the Prime Minister and the Chief Justice.
    2. Article 50: Fixes the President’s term at five years from the date of entering office, and bars any person from holding the office for more than two terms.
    3. Article 54: Provides that the Speaker of Parliament shall act as President when the office is vacant or the President is unable to discharge functions.
    4. Article 55: Vests the executive power of the Republic in the Prime Minister and the Cabinet, which is the provision that makes the presidency ceremonial.
    5. Article 123: Governs the timing of elections to the office, including the requirement that a vacancy be filled within a fixed period of its occurrence.
    6. Presidential Election Act, 1991: Provides the procedure for nomination, polling and declaration of the result, with the Chief Election Commissioner acting as Returning Officer.

    India Bangladesh Cooperation Initiatives

    1. Maitri Setu: A bridge over the Feni river connecting Sabroom in Tripura with Ramgarh in Bangladesh, inaugurated in March 2021, giving the northeast access to Chattogram port.
    2. Akhaura Agartala rail link: A cross border rail connection commissioned in November 2023 that shortens the route between Agartala and Kolkata through Bangladeshi territory.
    3. Port access agreement: An arrangement permitting the use of Chattogram and Mongla ports for the movement of Indian goods to and from the northeastern States.
    4. India Bangladesh Friendship Pipeline: A cross border diesel pipeline from Siliguri to Parbatipur, inaugurated in March 2023, supplying high speed diesel to northern Bangladesh.
    5. Maitree Super Thermal Power Project: A joint venture coal fired power project at Rampal in Bangladesh, developed by an Indian and Bangladeshi partnership.
    6. Border Haats: Designated markets along the boundary allowing residents of nearby villages on both sides to trade specified local goods without formal customs procedures.

    Key Facts about Bangladesh and its Relations with India

    1. Independence: Bangladesh became independent in 1971, and India was among the first countries to recognise it.
    2. Land Boundary Agreement: The 1974 agreement was operationalised through the 100th Constitutional Amendment Act, 2015, under which India transferred 111 enclaves to Bangladesh and received 51.
    3. Maritime boundary: A Permanent Court of Arbitration tribunal delivered its award on the maritime boundary between the two countries in July 2014, which both accepted.
    4. Kushiyara agreement: The withdrawal of water from the Kushiyara river was agreed in September 2022, the second water sharing instrument after the Ganga treaty.
    5. Population: Bangladesh has a population of about 173 million people.
    6. Presidential history: The office being filled on 21 August 2026 is that of Bangladesh’s 23rd President.
    7. Joint river institution: The Joint Rivers Commission has functioned since 1972 as the standing bilateral mechanism on shared rivers.

    Back2Basics: Bangladesh Nationalist Party

    1. Founded: The party was founded in 1978 by Ziaur Rahman, then the country’s military ruler and later President.
    2. Ideology: It is built around Bangladeshi nationalism, which defines national identity by territory and religion rather than by the language based Bengali nationalism of its principal rival.
    3. Leadership: It has been led since 1984 by Khaleda Zia, widow of the founder, who served as Prime Minister on three occasions.
    4. Principal rival: Its long standing opponent is the Awami League, and the two parties have alternated in power for most of the country’s competitive electoral history.
    5. Electoral boycotts: The party boycotted the general elections of 2014 and 2024, which kept it out of Parliament for extended periods.
    6. Current position: It returned to power in the general election held in February 2026, and holds a two thirds majority in Parliament with its allies.

    Challenges in India Bangladesh Relations

    1. The unresolved Teesta agreement: The most contested river sharing file has remained unsigned for over a decade. Eg. The Teesta draft agreed in 2011 was not signed after West Bengal withheld support.
    2. Border killings: Fatalities along the boundary remain the most publicly damaging irritant in the relationship. Eg. Incidents involving the Border Security Force and Bangladeshi nationals along the fenced boundary recur and draw formal protests from Dhaka.
    3. Illegal migration and its domestic politics: Migration questions feed into Indian State level politics and produce friction with Dhaka. Eg. The National Register of Citizens exercise in Assam produced sustained diplomatic concern in Bangladesh.
    4. Trade imbalance: Bangladesh runs a large deficit with India, which sustains a domestic constituency against closer economic integration. Eg. Indian exports to Bangladesh far exceed Bangladeshi exports to India despite duty free access under the South Asian Free Trade Area.
    5. Competition from external partners: Infrastructure and defence offers from other powers reduce India’s relative weight. Eg. Chinese financing has funded major Bangladeshi infrastructure including bridges, power plants and port projects.
    6. The Rohingya caseload: More than a million refugees in Cox’s Bazar constrain Bangladesh’s policy space and create a shared security concern. Eg. Repatriation attempts to Myanmar have repeatedly failed since the influx of 2017.
    7. Security of minority communities: Attacks on minorities during political transitions generate pressure on Indian policy. Eg. The 2024 transition was followed by reported attacks on Hindu households and places of worship.
    8. Insurgent sanctuaries and connectivity security: Northeast Indian connectivity through Bangladesh depends on continued cooperation against insurgent groups. Eg. Transit corridors through Bangladeshi territory to the northeast require sustained security cooperation to remain viable.

    Way Forward

    1. Open the Ganga treaty renewal early: Begin the final round of renewal talks well before the 31 December expiry so that the instrument does not lapse during a political transition.
    2. Separate the Teesta from the Ganga negotiation: Handle the two rivers on independent tracks so that a stalled file does not hold a functioning one hostage.
    3. Institutionalise engagement beyond the ruling party: Maintain contact across the political spectrum in Dhaka so that the relationship does not have to be rebuilt at each change of government.
    4. Correct the trade asymmetry: Expand duty free access, remove non tariff barriers and complete the proposed comprehensive economic partnership so that the deficit ceases to be a political argument.
    5. Complete connectivity projects on schedule: Deliver the remaining rail, road and inland waterway links so that the economic case for cooperation is visible to the Bangladeshi public.
    6. Reduce border fatalities to zero: Shift to non lethal means and joint patrolling protocols along the boundary, since this single issue does the most reputational damage.
    7. Coordinate on the Rohingya question: Support repatriation diplomacy with Myanmar and continue humanitarian assistance to Cox’s Bazar, which addresses a Bangladeshi priority at limited cost.

  • EOI for data centre project on islands withdrawn

    Why in the News

    The Andaman and Nicobar Islands administration has withdrawn an Expression of Interest seeking feasibility proposals for a private sector-led green artificial intelligence data centre on the islands, days after publishing it. The withdrawal follows reports that the Nicobarese population on Great Nicobar Island had not been informed of any plan to set up a data centre in the sea areas around the island.

    What is an Expression of Interest in a public project?

    1. About: An Expression of Interest is a pre-tender notice through which a government body invites interested parties to indicate willingness and capability to undertake a project, before a formal tender is issued.
    2. Purpose: It is used to test market interest and technical feasibility for a project whose scope, cost or technology is not yet fixed, so the responses shape the later tender document.
    3. Legal effect: It creates no contractual obligation and can be withdrawn or modified by the issuing authority at any stage before award.

    What is a green artificial intelligence data centre?

    1. About: A data centre is a facility housing servers and networking equipment, and an artificial intelligence data centre is optimised for the high power and cooling demands of large model training and inference.
    2. Why green: The green label refers to powering the facility with renewable energy and using low-water or seawater-based cooling, since artificial intelligence workloads consume far more electricity and cooling water than conventional server hosting.

    Who are the Nicobarese?

    1. About: The Nicobarese are the largest indigenous community of the Nicobar group of islands, a Scheduled Tribe living in village-based settlements across the Nicobar archipelago including Great Nicobar.
    2. Why they matter here: Their traditional lands and coastal commons fall within the footprint of island infrastructure projects, so their prior information and consent is the legal and administrative test for any such proposal.

    Why has the withdrawal drawn attention to consultation?

    1. The sequence: The Expression of Interest was published on 10 August, and a notice issued days later withdrew it with immediate effect due to administrative reasons.
    2. Location of the proposal: The data centre was proposed for the sea areas around Great Nicobar Island, which places it directly in the coastal zone the resident community depends on.
    3. The information gap: The local Nicobarese population on Great Nicobar Island had not been informed of any plan to set up a data centre in those waters.
    4. The wider protest: Local people are already protesting against the government’s proposed Rs 91,000-crore mega-infrastructure project on the same island.
    5. What the reason given does not settle: The notice cites administrative reasons without specifying whether the withdrawal responds to the consultation failure, the technical feasibility or the wider protest.

    What is at stake in the Great Nicobar mega project?

    1. Scale: The proposed mega-infrastructure project on Great Nicobar Island carries an estimated cost of Rs 91,000 crore.
    2. Components: The Great Nicobar Island Project comprises a transhipment port at Galathea Bay, an international airport, a power plant and a greenfield township.
    3. Strategic rationale: The transhipment port is intended to rival Colombo and Singapore for container transhipment, capturing traffic that currently bypasses Indian ports.
    4. Ecological setting: Great Nicobar hosts the Great Nicobar Biosphere Reserve, along with the Galathea Bay leatherback turtle nesting site and the Campbell Bay and Galathea National Parks.
    5. Community setting: The island is home to the Nicobarese and to the Shompen, a Particularly Vulnerable Tribal Group living in the interior forests.
    6. The consultation question: The data centre withdrawal repeats the question already raised about the mega project, which is whether affected communities are informed before proposals enter the public domain.

    Challenges to Island Infrastructure Development

    1. Prior informed consent: Project proposals reach the public domain before the resident community is told, which converts consultation into a post-facto formality. Eg. The Nicobarese on Great Nicobar were not informed of the data centre proposal in the waters around their island.
    2. Ecological irreversibility: Island ecosystems are small, endemic and cannot absorb clearance at the scale mainland projects assume. Eg. The Great Nicobar project involves diversion of a large tract of tropical forest and construction at the Galathea Bay leatherback turtle nesting beach.
    3. Seismic and tsunami exposure: The islands sit on an active subduction zone, so heavy coastal infrastructure carries a hazard the mainland does not face. Eg. The 2004 Indian Ocean tsunami devastated the Nicobar group and permanently submerged parts of the coastline near Indira Point.
    4. Water and power for data infrastructure: Artificial intelligence data centres demand continuous power and cooling that island grids cannot supply without new generation. Eg. The Andaman and Nicobar Islands depend substantially on diesel generation and an undersea optical fibre link commissioned in 2020.
    5. Rehabilitation of tribal populations: Displacement from customary land cannot be compensated in cash terms for communities whose livelihood is tied to a specific coastal ecology. Eg. Nicobarese families displaced by the 2004 tsunami were resettled in intermediate shelters, and return to original villages remained incomplete for years.
    6. Regulatory clearance layering: Island projects require forest, coastal zone, wildlife and tribal clearances from separate authorities, which invites piecemeal appraisal of a single project. Eg. The Great Nicobar project’s clearances have been challenged before the National Green Tribunal and reviewed by a high-powered committee.
    7. Strategic and civilian conflict: The islands host India’s only tri-service command, so security requirements limit civilian access and complicate transparent public consultation. Eg. Access to several Nicobar islands remains restricted under tribal reserve and defence notifications.

    “[2019] Consider the following statements about Particularly Vulnerable Tribal Groups (PVTGs) in India:

    1. PVTGs reside in 18 States and one Union Territory.

    2. A stagnant or declining population is one of the criteria for determining PVTG status.

    3. There are 95 PVTGs officially notified in the country so far.

    4. Irular and Konda Reddi tribes are included in the list of PVTGs.

    Which of the statements given above are correct?

    (a) 1, 2 and 3

    (b) 2, 3 and 4

    (c) 1, 2 and 4

    (d) 1, 3 and 4

  • Former SC judge-led panel to probe ‘police excesses’ against protesters

    Why in the News

    The Supreme Court has constituted a five member High-Powered Enquiry Committee headed by a former Supreme Court judge to examine alleged excesses and disproportionate use of force by police and security personnel at Jantar Mantar and other locations during last month’s protests over the National Eligibility cum Entrance Test (Undergraduate) paper leak. The Court framed twelve issues for the inquiry, covering both police conduct and violence by protesters. The order therefore turns a policing controversy into an examination of the constitutional limits on how the State may respond to assembly.

    What is the High-Powered Enquiry Committee?

    1. What it is: The High-Powered Enquiry Committee (HPEC) is a fact finding body constituted by the Supreme Court to examine allegations of excessive force by police and security personnel during the protests, and to report back to the Court.
    2. Who heads it and who sits on it: It is headed by former Supreme Court judge R Subhash Reddy. Its members are former Punjab and Haryana High Court Chief Justice Ravi Shankar Jha, former Delhi High Court judge Justice Shalinder Kaur, former Central Bureau of Investigation Director Rishi Kumar Shukla, and retired Director General of Police of Meghalaya L R Bishnoi.
    3. How it must function: The inquiry is not to be a one time exercise. The Committee is to undertake a continuous and periodic assessment of the enumerated issues and submit interim findings periodically, so the Court can issue directions as warranted.
    4. What it does not displace: The Court clarified that the constitution of the Committee shall in no way deter or debar police authorities or security forces from taking administrative or disciplinary action against officers found in contravention of the rules governing their conduct.

    What is the current status of the right to protest in India?

    1. The right itself: The right to protest is drawn from Article 19(1)(a), the freedom of speech and expression, and Article 19(1)(b), the right to assemble peaceably and without arms, read together.
    2. The condition built into the text: The assembly must be peaceable and without arms, so the protection falls away for an assembly that turns violent or armed.
    3. The limits on the right: Restrictions may be imposed under Article 19(2) on speech and Article 19(3) on assembly, and the restriction must be reasonable and imposed by law rather than by executive discretion alone.
    4. No right to occupy a public space indefinitely: The Supreme Court in Amit Sahni v Commissioner of Police (2020) held that public ways and public spaces cannot be occupied indefinitely, and that demonstrations must take place in designated areas.
    5. A blanket ban on a protest site is not permissible: In Mazdoor Kisan Shakti Sangathan v Union of India (2018) the Court set aside an absolute prohibition on demonstrations at Jantar Mantar and directed that guidelines be framed regulating rather than eliminating protest there.
    6. Force must be proportionate and compensable: In Anita Thakur v State of Jammu and Kashmir (2016) the Court held that use of excessive force by police against demonstrators violates Article 21 and awarded compensation to the injured.
    7. The operative statutory levers: Prohibitory orders are issued under Section 163 of the Bharatiya Nagarik Suraksha Sanhita, 2023, and speech and assembly prosecutions have been brought under Section 152 of the Bharatiya Nyaya Sanhita, 2023.

    Constitutional Provisions Related to the Right to Protest and Police Accountability

    1. Article 19(1)(a): Guarantees to all citizens the freedom of speech and expression, from which the right to voice dissent is drawn.
    2. Article 19(1)(b): Guarantees the right to assemble peaceably and without arms.
    3. Article 19(1)(c): Guarantees the right to form associations or unions, under which protest organisations operate.
    4. Article 19(2): Permits the State to impose reasonable restrictions on the freedom of speech and expression on enumerated grounds.
    5. Article 19(3): Permits reasonable restrictions on the right of assembly in the interests of the sovereignty and integrity of India or public order.
    6. Article 21: Guarantees that no person shall be deprived of life or personal liberty except according to procedure established by law, the provision under which bodily harm caused by disproportionate force is examined.
    7. Article 22: Provides safeguards on arrest and detention, including the right to be informed of the grounds of arrest and to consult a legal practitioner.
    8. Article 20(3): Protects a person accused of an offence against being compelled to be a witness against himself.
    9. Article 32 and Article 226: Provide the remedies before the Supreme Court and the High Courts through which protest related grievances and monitored inquiries are brought.
    10. Seventh Schedule, State List Entry 1 and Entry 2: Place public order and police within the legislative and executive competence of the States, which is why a national inquiry into police conduct proceeds through the Court rather than through a central department.

    What is Section 163 of the Bharatiya Nagarik Suraksha Sanhita, 2023?

    1. What it does: Section 163 empowers a District Magistrate, a Sub-divisional Magistrate or an Executive Magistrate to issue a written order directing a person or the public generally to abstain from a specified act, where there is an apprehension of obstruction, annoyance, danger to human life or a disturbance of public tranquillity.
    2. Its limits: An order under the section is temporary and cannot ordinarily remain in force beyond two months, and it corresponds to the power earlier exercised under Section 144 of the Code of Criminal Procedure, 1973.

    What is Section 152 of the Bharatiya Nyaya Sanhita, 2023?

    1. What it criminalises: Section 152 punishes acts that excite secession, armed rebellion, subversive activities or separatist feelings, or that endanger the sovereignty, unity and integrity of India, with punishment extending to life imprisonment or seven years with fine.
    2. What it replaced: It came into force on 1 July 2024 in place of Section 124A of the Indian Penal Code, 1860, the sedition provision inserted in 1870, and its constitutional validity is under challenge on grounds of vagueness and overbreadth.

    What are metallic kinetic projectiles?

    1. What they are: Metallic kinetic projectiles, commonly called pellets, are small metal shot fired in a scattering pattern from pump-action rifles or projectile-action guns, used as a crowd control weapon.
    2. Why they are contested: The scatter pattern makes the point of impact uncontrollable, so injuries to the eyes and upper body are common and the resulting harm is often irreversible.

    What are the twelve issues the Committee will examine?

    1. Issue 1, excessive force: Alleged use of excessive force and violence against protesters by police authorities and other agencies, including deployment of pellet guns, electric batons, lathi charges and tear gas without adequate warning or proportionality, resulting in severe bodily harm and injuries, some alleged to be of a grievous and lasting nature.
    2. Issue 2, proportionality of response: Ensuring a proportionate and measured police response during protests, public gatherings and peaceful assemblies, so as to strike an appropriate balance between maintaining public order and exercising the constitutional right to peaceful dissent.
    3. Issue 3, banning pellets: The desirability of banning the use of metallic kinetic projectiles or pellets fired from pump-action rifles or projectile-action guns, having regard to the grave and at times irreversible bodily harm they cause.
    4. Issue 4, identification of officers: The necessity of ensuring that police and security personnel wear proper uniforms and visible nameplates while effecting arrests or using force during crowd control operations, to secure accountability and enable identification of individual officers.
    5. Issue 5, surveillance: Allegations of monitoring and surveillance of protesters by police personnel, and the extent to which such measures were consistent with the protesters’ constitutional rights to privacy and free assembly.
    6. Issue 6, female protesters: Alleged incidents of targeted violence, harassment, molestation and secondary victimisation directed against female protesters, which warrant a focused and expeditious enquiry.
    7. Issue 7, medical support and compensation: The provision of medical and other requisite support, including award of compensation, to victims of alleged police abuse, and the manner and adequacy of the support extended so far.
    8. Issue 8, prohibitory orders: Regulation of the issuance of blanket prohibitory orders under Section 163 of the Bharatiya Nagarik Suraksha Sanhita, 2023, to prevent their use as a routine or pre-emptive measure that forecloses peaceful assembly rather than as a proportionate response to a real and imminent threat to public order.
    9. Issue 9, thresholds for Section 152: The establishment of strict constitutional thresholds and safeguards to prevent Section 152 of the Bharatiya Nyaya Sanhita, 2023 from being invoked to stifle political dissent and peaceful protest, so that it is not permitted to operate as a chilling restraint on constitutionally protected speech and assembly.
    10. Issue 10, violence by protesters: Alleged use of force and violence by protesters against police officers and other security personnel.
    11. Issue 11, damage to property: Damage to public property caused by the actions of protesters, including destruction of and injury to government installations, vehicles and other assets belonging to the State and to private citizens alike.
    12. Issue 12, injuries to police: The injuries sustained by police forces in the course of discharging their duties, and the consequent mental and emotional trauma borne by their families.

    Which issues has the Court told the Committee to take up first?

    1. The two priority issues: The Committee is to address Issue 1 on excessive force and Issue 6 on targeted violence against female protesters on a priority basis, bearing in mind the sensitivity attendant on them.
    2. The first deliverable: The Committee has been asked to complete its inquiry and deliberations on those two issues and submit its First Interim Report at the earliest.
    3. The additional head opened: The Committee may also examine the grant of interim compensation to those injured on either side, whether police personnel or protesters.
    4. The reporting design: Interim findings are to be submitted periodically rather than a single report at the end, so the Court can issue directions while the inquiry continues.
    5. When the order was made: The order is dated 19 August 2026 and was released on 20 August 2026.

    Why does the Court’s framing place police conduct and protester conduct on the same list?

    1. The list is symmetrical by design: Nine issues concern police and State conduct and three concern protester conduct, so the inquiry is not framed solely as an investigation of the police.
    2. The compensation head runs both ways: Interim compensation is opened for those injured on either side, which places an injured constable and an injured student within the same remedial frame.
    3. Trauma is recognised on the police side: Issue 12 extends to the mental and emotional trauma borne by the families of injured police personnel, a head rarely written into an inquiry mandate.
    4. Symmetry is not equivalence: The two issues marked for priority treatment are both allegations against the police, so the sequencing signals which set of allegations the Court treats as most urgent.
    5. The disciplinary channel stays open in parallel: The Court expressly preserved the power of police authorities to take administrative or disciplinary action against their own officers, so the inquiry does not become a reason to suspend departmental accountability.
    6. The tension the design carries: A committee asked simultaneously to judge police excess and protester violence must apply one standard of proportionality to an armed disciplined force and another to an unorganised crowd, without a settled test for either.

    Major debates surrounding the right to protest and the use of force

    1. Regulation against prohibition: One position holds that designated protest sites and prior permission are reasonable regulation of a public space, and the other holds that permission requirements convert a right into a licence.
    2. Two rulings pulling in opposite directions: Mazdoor Kisan Shakti Sangathan (2018) struck down a blanket prohibition at a protest site, and Amit Sahni (2020) held that public ways cannot be occupied indefinitely, so the boundary between the two remains contested.
    3. The proportionality standard for lethal and less lethal weapons: There is no settled judicial test fixing when tear gas, water cannon, batons or pellets may be used, so proportionality is assessed after the event rather than fixed in advance.
    4. Whether pellet weapons can be regulated or must be banned: One position accepts them as a less lethal alternative to firearms, and the other holds that an uncontrollable scatter pattern makes proportionate use impossible in principle.
    5. Prohibitory orders as prevention against pre-emption: Section 163 is defended as a preventive power against imminent threats and contested as a routine instrument that forecloses assembly before any threat materialises.
    6. Whether the narrowing of sedition survives its replacement: The Kedar Nath Singh (1962) requirement of incitement to violence narrowed the old sedition provision, and whether that narrowing automatically transfers to Section 152 of the Bharatiya Nyaya Sanhita, 2023 is unsettled.
    7. Command responsibility against individual liability: Accountability for crowd control failures is contested between the individual officer who used force and the supervising officer who ordered the deployment.
    8. The evidentiary gap the dispute turns on: Without uniforms carrying visible identification, body worn cameras and a contemporaneous record of orders, allegations on both sides rest on competing testimony rather than on documented fact.

    Challenges to the inquiry delivering accountability

    1. A fact finding committee is not a prosecuting authority: The Committee reports to the Court and cannot itself frame charges or convict, so accountability depends on what follows the report. Eg. The Court has separately preserved the departmental power to take disciplinary action, which sits outside the Committee’s control.
    2. Evidence degrades with time in crowd control cases: Injury records, video footage, control room logs and deployment orders have to be secured early or they cease to be reliable. Eg. Issue 4 arises precisely because officers using force were allegedly not identifiable by uniform or nameplate.
    3. Prosecution of police officers requires sanction: Proceeding against a public servant for acts done in the discharge of official duty depends on prior sanction from the government that employs him. Eg. The requirement of prior sanction has historically been the reason many custodial and encounter cases do not reach trial.
    4. Police is a State subject and the incidents spanned States: The Committee’s findings must be implemented by multiple State governments, each of which controls its own force. Eg. The mandate covers Jantar Mantar and other locations across the country during the same protest wave.
    5. Compensation without a fixed scale invites disparity: Interim compensation awarded case by case, on both sides, has no published scale to anchor it. Eg. In Anita Thakur (2016) compensation was fixed by the Court itself in the absence of any statutory schedule for excessive force.
    6. Monitored inquiries lose momentum once attention moves: A periodic assessment mandate depends on the Court continuing to list and act on interim reports over years. Eg. The Prakash Singh directions on police reform were issued in 2006 and remain incompletely implemented across States two decades later.
    7. The unresolved statutory questions sit outside the Committee’s power: Issues 8 and 9 ask for constitutional thresholds on Section 163 and Section 152, which only the Court or Parliament can settle. Eg. The constitutional challenge to Section 152 of the Bharatiya Nyaya Sanhita, 2023 is pending separately before the Supreme Court.

    Conclusion

    The Committee stands constituted with five members under an order dated 19 August 2026, and its immediate task is a First Interim Report on excessive force and on targeted violence against female protesters. The mandate is unusually wide, covering not only what the police did but also the statutory instruments through which protest was restricted, namely prohibitory orders under Section 163 of the Bharatiya Nagarik Suraksha Sanhita, 2023 and prosecutions under Section 152 of the Bharatiya Nyaya Sanhita, 2023. The constitutional question the order raises is whether the State can be held to a proportionality standard in crowd control when no such standard exists in written form. Until that standard is fixed in advance, each episode will continue to be judged after the fact by a fresh committee.

    “[2013, GS2, 10] Discuss Section 66A of IT Act, with reference to its alleged violation of Article 19 of the Constitution.”

  • Transaction fees on UPI in 2 weeks

    Why in the News

    A merchant discount rate of 0.3% on Unified Payments Interface (UPI) transactions of Rs 2,000 and above is expected to be announced within two weeks. Six years of zero pricing built a network that now carries most of India’s digital payment volume without generating the revenue to maintain it, and restoring a fee moves that cost onto merchants while keeping the transaction free for consumers.

    What is the merchant discount rate?

    1. About: The merchant discount rate (MDR) is a fee paid by businesses to payment processors for accepting digital payments, deducted from the amount the merchant receives.
    2. Who it is shared among: The fee funds the banks, payment service providers and network operators that carry a transaction between the payer and the merchant.
    3. Its history on UPI: An MDR of up to 0.3% of the transaction value applied to UPI person-to-merchant transactions until December 2019.
    4. Zero MDR: Zero MDR was introduced in January 2020 to accelerate digital payment adoption and encourage a shift from cash to digital payments.

    What is the UPI and Services Steering Committee?

    1. About: It is the body headed by the National Payments Corporation of India that will determine the merchant discount rate on UPI, its scope and its structure.

    What is Section 10A of the Payment and Settlement Systems Act, 2007?

    1. About: Section 10A is the provision granting statutory protection from charges to specified electronic payment modes, which is what prevented a fee being levied on UPI.
    2. What changed: The Taxation and Other Laws (Amendment) Bill, 2026 amended Section 10A to pave the way for an MDR on UPI transactions above a certain threshold.

    How will the fee actually be brought into effect?

    1. Step one, the gazette notification: The Department of Financial Services will likely issue a gazette notification within a week specifying which electronic payment modes continue to receive statutory protection from charges.
    2. Step two, the rate decision: The UPI and Services Steering Committee will then determine the MDR, its scope and its structure.
    3. The consumer assurance: The government assured during the parliamentary debate on the amending Bill that UPI transactions will remain free for consumers.

    Why is a fee being restored after six years of zero pricing?

    1. Volume outgrew the funding model: UPI transactions jumped sharply after the Covid-19 pandemic, and banks and payment intermediaries ramped up investment in payment infrastructure to carry that load.
    2. Industry pressure for sustainability: The scale of that investment produced industry calls for the restoration of charges to make the system financially sustainable.
    3. The interim substitute was a subsidy: The government introduced an incentive scheme providing banks and other ecosystem participants an incentive equivalent to 0.15% MDR on UPI transactions up to Rs 2,000.
    4. The parliamentary committee’s warning: The Parliamentary Standing Committee on Finance called for early implementation of a tiered MDR framework, warning that delays could leave payment service providers dependent on inadequate government subsidies and weaken investment in payment infrastructure.

    How does 0.3% compare with the cost of other payment instruments?

    1. Credit cards: The prevailing MDR on credit card transactions is 1% to 3% of transaction value.
    2. Debit cards: The prevailing MDR on debit card transactions runs up to 0.9%.
    3. UPI at the proposed rate: A reintroduced MDR of 0.3% above a threshold would still be substantially lower than either.
    4. The subsidy benchmark: The proposed rate is double the implicit rate the exchequer already bears through the incentive scheme on small-value payments.
    5. The volume the rate applies to: UPI processed 241.62 billion transactions worth Rs 314.23 lakh crore in 2025-26, so even a fraction of a percent applied above a threshold is a large revenue pool.

    Why does a free-to-consumer network still have to be paid for by someone?

    1. The cost does not disappear when the price is zero: Switching, settlement, fraud monitoring and dispute resolution have running costs, and zero MDR moved them from merchants onto banks and the exchequer.
    2. Subsidy funding is discretionary and can lapse: An incentive scheme depends on an annual budgetary allocation, which is what the Parliamentary Standing Committee on Finance identified as inadequate and unreliable.
    3. Merchants now bear what consumers do not: Keeping the consumer free means the fee lands on the acceptance side, on the same small merchants whose adoption zero MDR was designed to secure.
    4. The threshold is doing the distributive work: Applying the fee only at Rs 2,000 and above protects the low-value transactions that dominate UPI by count, and captures the higher-value transactions that dominate by value.

    What challenges does reintroducing MDR on UPI face?

    1. Merchant resistance at the acceptance point: Small merchants may refuse UPI above the threshold or steer customers to cash to avoid the fee. Eg. Cash-on-delivery persists across Indian e-commerce despite a decade of digital payment incentives.
    2. Transaction splitting to stay below the threshold: A hard cut-off gives both sides a reason to break one payment into two. Eg. A payment of Rs 2,500 broken into two of Rs 1,250 falls below the threshold and carries no fee.
    3. Erosion of the adoption gains zero MDR bought: The zero-price regime was introduced specifically to shift users from cash, and reversing it risks reversing part of that shift. Eg. Zero MDR was introduced in January 2020 for the stated purpose of accelerating digital payment adoption.
    4. Concentration risk in the underlying network: A small number of third-party applications carry most UPI volume, so pricing decisions transmit through a narrow set of intermediaries. Eg. The National Payments Corporation of India has repeatedly deferred its own market share cap on third-party application providers.
    5. Outage and reliability exposure at national scale: A single network carrying most retail payments makes any downtime a systemic event rather than a service failure. Eg. UPI accounted for 85% of India’s digital payment transactions by volume in 2025-26.
    6. Fraud and mule account misuse growing with volume: Higher-value transactions attract more sophisticated fraud, and the cost of investigation falls on the same intermediaries the fee is meant to fund. Eg. The Reserve Bank of India has repeatedly directed banks to tighten controls on accounts used to route proceeds of digital payment fraud.
    7. Cross-subsidy questions across instruments: Pricing UPI below cards while both run on shared bank infrastructure distorts the choice of instrument at the counter. Eg. Credit card MDR at 1% to 3% funds reward programmes that UPI cannot match at 0.3%.

    Conclusion

    Zero MDR delivered adoption at a scale no other retail payment system has reached, and it did so by placing the cost of the network on banks and on the exchequer rather than on its users. Restoring a 0.3% fee above Rs 2,000 converts that subsidy into a price, keeps consumers unaffected and tests whether merchants will absorb the cost at the acceptance point. The measure currently stands at the stage where Section 10A of the Payment and Settlement Systems Act, 2007 has been amended, and the next milestones are a gazette notification from the Department of Financial Services within a week and the rate decision by the UPI and Services Steering Committee within two weeks.

    “[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

  • Why Sergio Gor’s words in Srinagar are noteworthy

    Why in the News

    The United States Ambassador to India visited Srinagar on 19 August 2026 and described Jammu and Kashmir as an important part of India, on his first visit to the Valley and immediately after meeting the elected Chief Minister of Jammu and Kashmir. Seventy three years earlier American emissaries had come to the same Valley to raise the possibility of independence with Sheikh Abdullah, whose grandson now stood beside the ambassador. The distance between those two moments is the measure of how far the American position on Jammu and Kashmir has travelled since 1947.

    What is the Instrument of Accession?

    1. What it was: The legal document by which the ruler of a princely state acceded to either India or Pakistan at the end of British paramountcy in 1947, ceding defence, external affairs and communications to the acceding dominion.
    2. Its statutory basis: It was executed under the Government of India Act, 1935 as adapted by the Indian Independence Act, 1947, which gave rulers the choice of accession.
    3. In the case of Jammu and Kashmir: The Maharaja signed it on 26 October 1947 following the tribal invasion, which brought Indian forces into the state.
    4. Why it is contested in this story: American assessments questioned whether the Instrument by itself finally settled the state’s future, which is the legal proposition the ambassador’s statement now cuts against.

    What is Sadr-i-Riyasat?

    1. What it was: The title of the constitutional head of Jammu and Kashmir between 1952 and 1965, elected by the state legislature in place of a hereditary ruler. The office was replaced by a Governor appointed by the President through the Constitution (Sixth Amendment) to the Jammu and Kashmir Constitution in 1965.

    What is a demarche?

    1. What it is: A formal diplomatic representation made by one government to another, delivered in writing or in a scheduled meeting, recording a position or a protest. It ranks above an ordinary statement of protest because it is placed on the record between foreign ministries.

    What was the Kashmir Conspiracy Case?

    1. What it was: The prosecution launched against Sheikh Abdullah and his associates after his dismissal in 1953, alleging a conspiracy against the state and dealings aimed at detaching Jammu and Kashmir from India. It ran for years before being withdrawn, and it framed the political atmosphere around his contacts with foreign interlocutors.

    What exactly did the United States envoy say, and why does the venue matter?

    1. The statement: Visiting Srinagar, the ambassador declared that this is an important part of India.
    2. The setting: It was his first visit to the Valley, and he had just finished meeting the Chief Minister of Jammu and Kashmir, who is Sheikh Abdullah’s grandson.
    3. The follow up: He suggested that the United States travel advisory could be reviewed by Washington because of improvements in the security situation.
    4. The date: The statement was made on 19 August 2026.
    5. Why the location carries weight: The venue mattered as much as the words, since the same Valley was where American interlocutors had once raised the prospect of independence.
    6. The reaction: Pakistan did not merely protest, but lodged a formal demarche.

    Why is an ambassador’s sentence not the same as a change in policy?

    1. What it is not: A statement by an ambassador is not a treaty, a presidential proclamation, or a formal repudiation by the State Department of every position Washington has espoused since 1947.
    2. Why it still counts: Diplomacy operates through vocabulary, and a shift in the words a mission uses in public registers a shift in position even without a formal instrument.
    3. The measure applied: No objective student of Kashmir can fail to notice how far America has come between the language of the early 1950s and the language used in Srinagar.
    4. What remains open: Nothing in the statement withdraws or replaces the underlying documentary record of American legal assessments.

    How did American diplomacy engage the idea of an independent Kashmir in the early 1950s?

    1. The 1950 meetings: Loy Henderson, the American ambassador to India, secretly met Sheikh Abdullah in Kashmir twice in 1950.
    2. What the record shows: Henderson’s secret telegram records the Sheikh making a strong case for Kashmiri independence from both India and Pakistan.
    3. The condition Abdullah attached: He told Henderson that an independent Kashmir could survive only if it had the friendship of both India and Pakistan and economic assistance from the United States, directly or through the United Nations.
    4. How it entered Indian politics: American interest in Kashmir took on such political overtones that even Henderson’s wife entered Indian political mythology, and Indian leaders suspected that Americans were holding out the prospect of independence to Abdullah.
    5. The Stevenson visit: Adlai Stevenson, twice the Democratic Party’s candidate for the presidency and one of the most influential American internationalists of his era, visited Kashmir in May 1953 and talked to Abdullah.
    6. The effect in New Delhi: Those meetings sent shockwaves of suspicion through New Delhi, and American diplomatic records show that the then Prime Minister believed Stevenson’s conversations had encouraged Abdullah’s growing intransigence.
    7. What the episode establishes: An independent Kashmir was then conceivable enough in American diplomatic parlance for the Indian Prime Minister to worry that Washington might act to encourage it.

    What did those contacts cost Sheikh Abdullah inside Jammu and Kashmir?

    1. The dismissal: On 9 August 1953, Sheikh Abdullah was dismissed as prime minister of Jammu and Kashmir by the Sadr-i-Riyasat.
    2. The stated grounds: The dismissal came amid mounting suspicions in New Delhi about his commitment to the accession and his growing interest in an independent Kashmir.
    3. The role of the American contacts: His contacts with prominent Americans fed those suspicions directly.
    4. The legal aftermath: Those contacts later became part of the political atmosphere surrounding what came to be known as the Kashmir Conspiracy Case.
    5. The symmetry with 2026: Almost exactly seventy three years separate that dismissal from the ambassador’s statement in Srinagar.

    How did United Nations Security Council Resolution 47 shape the international framing of the dispute?

    1. American support: The United States supported Resolution 47 in 1948, which was adopted on 21 April that year.
    2. What it did: It placed the dispute in an international context and anticipated a plebiscite after a process of demilitarisation.
    3. The prescribed sequence: The sequence required Pakistan first to secure the withdrawal of the tribal invaders from the territory under its occupation.
    4. What happened to it: That prescribed sequence was never implemented.
    5. What it gave Pakistan: For years afterwards the resolution provided Pakistan with the diplomatic scaffolding it wanted, namely that Jammu and Kashmir was not an Indian question alone but an international dispute to be settled.
    6. America’s place in it: America was at the centre of that scaffolding.

    How far did the American legal position on the accession go?

    1. The document: A State Department memorandum of February 1950 set out the American legal assessment of the accession.
    2. Its characterisation: The memorandum described Jammu and Kashmir’s accession to India as contested.
    3. Its conclusion: It concluded that in the American legal assessment at the time, the Maharaja’s Instrument of Accession could not by itself have finally settled the state’s future.
    4. Why this matters: The position was not confined to the plebiscite procedure but went to the legal sufficiency of the accession instrument itself.

    Why did the position persist after the Cold War?

    1. The 1993 statement: In October 1993, Robin Raphel, freshly appointed assistant secretary of state for South Asian affairs in the Clinton administration, called Kashmir a disputed territory.
    2. The legal claim made: She said Washington did not recognise the legal validity of the Instrument of Accession as meaning that Kashmir was forever part of India.
    3. India’s reaction: India was aghast, and the then Prime Minister described such efforts at diplomatic suasion as pinpricks and minor mischief.
    4. The larger fact it revealed: Nearly five decades after 1947, the United States remained unwilling to couch its discussion of Jammu and Kashmir in terms that accepted India’s political description of the state without qualification.
    5. Why 2026 stands out against it: Measured against that record, the ambassador’s description in Srinagar marks the closing of an ambiguity that had survived the end of the Cold War.

    Why should a favourable American statement not produce triumphalism in New Delhi?

    1. Where the case was actually made: India’s case in Kashmir has ultimately been made most strongly by the people of Jammu and Kashmir themselves, not by shifts in foreign vocabulary.
    2. The standing test: The test has always been India’s ability to deepen constitutionalism, expand democracy and political reconciliation, deliver development, and ensure civil liberties for all citizens.
    3. Why the elected government matters: Srinagar’s elected government is what gives the Indian position its domestic foundation, which is why the ambassador’s meeting with the Chief Minister carried weight.
    4. What remains outstanding: A return to normal democratic politics and the restoration of statehood is essential, and no external statement substitutes for it.
    5. What has genuinely changed: The historical arc reflects India’s own transformation and the gradual exhaustion of the idea that Jammu and Kashmir is best handled through international mechanisms conceived in the bloodshed of Partition.
    6. The precise nature of the shift: America has not overwritten history but has accepted reality, having for decades dealt with Kashmir as a problem in search of a permanent political resting place, and having now implicitly acknowledged that history had already made a choice.

    Challenges to India’s position on Jammu and Kashmir

    1. Statehood has not been restored: The state’s downgrade to Union Territory status remains unreversed, which weakens the constitutionalism argument India rests on. Eg. Jammu and Kashmir became a Union Territory on 31 October 2019 under the Jammu and Kashmir Reorganisation Act, 2019.
    2. Diplomatic language can reverse with an administration: Positions expressed by an envoy carry no continuity guarantee across governments. Eg. The assistant secretary of state’s 1993 characterisation of Kashmir as disputed territory came four decades after the 1950 State Department memorandum and repeated its underlying reasoning.
    3. The plebiscite framing survives in the record: Resolutions never formally rescinded remain available for citation. Eg. Resolution 47 of 1948 remains on the Security Council record even though its prescribed sequence was never implemented.
    4. Pakistan retains a formal diplomatic channel: Every Indian gain in framing is met with a counter representation. Eg. Pakistan lodged a formal demarche after the ambassador’s statement in Srinagar.
    5. Security perception governs external normalisation: Third country advisories track incidents rather than political statements. Eg. The ambassador tied any review of the United States travel advisory to improvements in the security situation, not to political developments.
    6. Political reconciliation remains incomplete: Electoral revival does not by itself settle questions of autonomy and representation. Eg. The elected Chief Minister heads a government whose legislative competence is that of a Union Territory rather than a State.
    7. Third country hyphenation persists in crises: External powers revert to treating India and Pakistan as a pair during military escalation. Eg. External calls for restraint are directed at both countries simultaneously during every India Pakistan military exchange.

    Conclusion

    The American position on Jammu and Kashmir has moved from a February 1950 State Department memorandum calling the accession contested, through the plebiscite framing of Resolution 47 and the 1993 refusal to accept the Instrument of Accession as final, to an ambassador standing in Srinagar in August 2026 and calling it an important part of India. That arc closes an ambiguity but settles nothing that India itself must settle, since the case in Kashmir has been carried by the people of the region and by the quality of Indian constitutional practice there. The unfinished work is the return to normal democratic politics and the restoration of statehood, which no shift in foreign vocabulary can supply.

    “[2019, GS2, 15] “What introduces friction into the ties between India and the United States is that Washington is still unable to find for India a position in its global strategy, which would satisfy India’s National self-esteem and ambitions” Explain with suitable examples.”

  • The ‘Vimal Elaichi’ promotion question

    Why in the News

    The Maharashtra Food and Drugs Administration (FDA) has issued notices to actors Shah Rukh Khan, Ajay Devgn and Tiger Shroff over their endorsement of Vimal Elaichi, alleging that the advertisements could amount to surrogate promotion of Vimal Pan Masala, a prohibited tobacco-related product in the State. The action moves enforcement from the manufacturer to the celebrity endorser, using food safety, consumer protection and tobacco-control law together.

    What is surrogate advertising?

    1. About: Surrogate advertising promotes a prohibited or restricted product indirectly, by advertising a legally permitted product that carries the same brand name, packaging identity and visual grammar.
    2. How it works: The permitted product acts as a carrier for brand recall, so consumer attraction built around the prohibited product is maintained without the prohibited product ever appearing in the advertisement.
    3. Why it exists: Direct advertising of tobacco products is prohibited by law, so a manufacturer extends the brand to a permitted category such as cardamom, mineral water or music to keep the name in circulation.
    4. The legal test applied: The question is whether the communication is an advertisement for an independent product or whether it is intended to maintain, reinforce or enhance the brand identity associated with the prohibited product.

    What is the Central Consumer Protection Authority?

    1. About: The Central Consumer Protection Authority is the regulator created under the Consumer Protection Act, 2019 to protect and enforce the rights of consumers as a class, with powers over false or misleading advertisements and unfair trade practices.

    Why does the FDA treat this advertisement as surrogate promotion?

    1. The eight elements weighed: The notice assesses the nature of the advertisement, the identity of the brand, its presentation, its visual elements, the dialogue, the product name, the market identity of the brand and the context in which the advertisement is presented.
    2. The brand identity test: The notice asks whether the use of the Vimal brand under the name of Elaichi or a similar product is intended to maintain, reinforce or enhance the brand identity and consumer attraction associated with pan masala and tobacco-related products.
    3. The consequence if the test is met: Such communication would not merely constitute an advertisement for an independent product, but would amount to indirect or surrogate promotion of a prohibited or restricted product.
    4. Status of the underlying product: Vimal Pan Masala is a prohibited tobacco-related product in the State, which is what makes the brand extension legally significant.
    5. Interim direction issued: The FDA has directed the removal of all content associated with the advertisement, alongside the notices to the endorsers.

    Where does the tension lie between a brand extension and a prohibited promotion?

    1. The manufacturer’s position in law: Cardamom is a lawful food product, and advertising a lawful product under a lawful trademark is ordinarily protected commercial activity.
    2. The regulator’s position: Legality of the advertised product does not settle the question, since the advertisement’s function may be to sustain recall for a different product that cannot be advertised at all.
    3. The shift in the enforcement target: The notices proceed against the endorsers rather than the manufacturer, which places liability on the person lending recognition to the brand.
    4. Pan masala’s regulatory position: Pan masala is a regulated food product under the Food Safety and Standards Authority of India framework, so compliance with all provisions relating to its manufacture, marketing, sale and advertisement is mandatory.
    5. What remains unsettled: The notice frames the surrogate question as a serious question that arises rather than as a finding, so the determination follows the actors’ response.

    Which laws does the notice say the advertisement violates?

    1. Food Safety and Standards Act, 2006: The notice invokes various sections of the Act and the rules and regulations framed thereafter, including Section 24, which restricts advertisements and prohibits unfair trade practices relating to food, including misleading advertisements.
    2. Food Safety and Standards (Advertising and Claims) Regulations, 2018: Food Business Operators and marketers must ensure that their advertisements are truthful, unambiguous and not misleading, and are prohibited from making claims that encourage excessive consumption of a particular food.
    3. Food Safety and Standards (Prohibition and Restrictions on Sales) Regulations, 2011: These pertain to substances that may be injurious to health, and are the route through which States prohibit tobacco-bearing pan masala.
    4. Central Consumer Protection Authority guidelines, 2022: The advertisement is said to violate the 2022 guidelines on the prevention of misleading advertisements and endorsements for misleading advertisements.
    5. Cigarettes and Other Tobacco Products Act, 2003: The Cigarettes and Other Tobacco Products (Prohibition of Advertisement and Regulation of Trade and Commerce, Production, Supply and Distribution) Act, 2003 is invoked for its provisions prohibiting tobacco advertisements.

    What penalty can follow a misleading endorsement?

    1. Statutory basis: Section 21 of the Consumer Protection Act, 2019 governs action against false or misleading advertisements and against the endorsers of such advertisements.
    2. Direction power: The Central Consumer Protection Authority can direct the discontinuation or modification of a false or misleading advertisement.
    3. First penalty: It can impose a penalty of up to Rs 10 lakh on the endorser.
    4. Repeat penalty: For subsequent contraventions, the penalty may extend to Rs 50 lakh.
    5. Endorsement ban: The authority can prohibit the endorser from endorsing any product for up to one year, and for subsequent contraventions the ban may extend to three years.

    What procedure must the endorsers now follow?

    1. Response window: The notices ask the actors to respond within 15 days.
    2. Mode of response: They need not appear in person and may submit a written explanation either in person or through a duly authorised representative, along with documentary evidence.
    3. Personal hearing: If they wish to be heard in person they may indicate it in the written explanation, and an opportunity of personal hearing, in person or through a duly authorised representative, is to be afforded in accordance with the principles of natural justice.
    4. Consequence of silence: Failure to respond within the stipulated period, or an unsatisfactory response, may attract action under the Food Safety and Standards Act, 2006 without any further reference or notice.
    5. The presumption: In the absence of a satisfactory explanation, it shall be presumed that the endorser has nothing to state in the matter.

    Challenges to Enforcement Against Surrogate Advertising

    1. Proving intent: Regulators must show that a lawful product’s advertisement was intended to promote a prohibited one, which turns on inference from brand identity rather than on a direct statement. Eg. Notices in this case rest on presentation, dialogue and market identity rather than on any reference to pan masala in the advertisement itself.
    2. Split jurisdiction: Food safety, tobacco control, consumer protection and broadcasting law sit with different regulators, so a single advertisement attracts overlapping and slow proceedings. Eg. The present notices invoke the Food Safety and Standards Act, 2006, the Consumer Protection Act, 2019 and the Cigarettes and Other Tobacco Products Act, 2003 simultaneously.
    3. State variation in prohibition: A product prohibited in one State is lawfully sold in another, so a national advertisement cannot be uniformly assessed. Eg. Gutkha and tobacco-bearing pan masala have been banned by successive State notifications under the 2011 sales regulations, with renewal cycles differing across States.
    4. Penalty scale against advertising budgets: A ceiling of Rs 10 lakh on the endorser is small relative to the value of a national campaign, which weakens deterrence. Eg. Pan masala brands are among the largest advertisers during high-viewership sporting events.
    5. Digital and influencer channels: Enforcement designed for television and print struggles with content distributed through social platforms and regional influencers. Eg. The Central Consumer Protection Authority had to issue separate endorsement disclosure guidelines for social media influencers in 2023.
    6. Cross-border and streaming content: Advertisements and product placement travel through streaming services and platforms hosted outside the regulator’s reach. Eg. Anti-tobacco warning requirements had to be extended to over-the-top streaming content through separate rules notified in 2023.
    7. Health burden after prohibition: Prohibition of sale has not removed consumption, since smokeless tobacco moves through informal retail. Eg. Smokeless tobacco use remains widespread in States where gutkha has been banned for more than a decade.

    Conclusion

    The notices turn on a single legal question: whether an advertisement for a lawful cardamom product functions as indirect promotion of a prohibited tobacco-related product carrying the same brand identity. The FDA has invoked food safety, consumer protection and tobacco-control law together and directed the removal of the associated content. The actors have 15 days to file a written explanation with documentary evidence, and may seek a personal hearing.

    “[2018] Consider the following statements:

    1. The Food Safety and Standards Act, 2006 replaced the Prevention of Food Adulteration Act, 1954.

    2. The Food Safety and Standard Authority of India (FSSAI) is under the charge of Director General of Health Services in the Union Ministry of Health and Family Welfare.

    Which of the statements given above is/are correct?

    (a) 1 only

    (b) 2 only

    (c) Both 1 and 2

    (d) Neither 1 nor 2

  • Panel to review nuclear liability caps every 5 years

    Why in the News

    Draft rules released by the Department of Atomic Energy on 14 August 2026 require an expert group to review the graded caps on nuclear operators’ civil liability once every five years. The review reaches only the operator’s cap, and leaves untouched the removal of the supplier’s statutory liability that is now the subject of a challenge in the Supreme Court.

    What is the Sustainable Harnessing and Advancing Nuclear Energy for Transitioning India (SHANTI) Act, 2025?

    1. About: The SHANTI Act, 2025 replaces both the Atomic Energy Act, 1962 and the Civil Liability for Nuclear Damage Act, 2010 (CLNDA) in a single unified statute, and is the first comprehensive overhaul of India’s nuclear power regime since independence.
    2. What it opens: The Act allows private entities to own and operate nuclear power plants for the first time, covering construction, transport, storage, import, export and handling of nuclear material, with mandatory authorisation from the Atomic Energy Regulatory Board for every activity.
    3. What it retains for the State: The government keeps an exclusive monopoly over enrichment, isotope separation, spent fuel reprocessing and radioactive waste management, so the fuel cycle remains entirely in the public sector.
    4. What it changed on liability: The Act’s Second Schedule introduced graded liability caps based on the size of a nuclear installation, replacing the earlier flat cap of Rs 1,500 crore under the CLNDA.

    What is an operator’s right of recourse?

    1. About: A right of recourse is the operator’s ability, after paying compensation for nuclear damage, to recover that amount from another party responsible for the incident.
    2. Why it is contested: The scope of this right decides whether the financial consequence of a defective component rests with the plant operator or travels back to the equipment supplier.

    What does Rule 78 of the draft rules provide?

    1. A standing review, not an occasional one: Rule 78 requires the Central government to constitute a group of experts to review the maximum limits of the operator’s civil liability for nuclear damage once every five years.
    2. Composition of the expert group: The group draws from nuclear science and engineering, actuarial science, insurance and law, together with public-interest representatives.
    3. What it can recommend: The group may propose amendments to the Second Schedule of the Act, which is where the graded caps sit.
    4. How this differs from the earlier law: Section 6 of the now-repealed CLNDA also allowed the Centre to periodically review the operator’s liability and notify a higher amount. The draft rules add a defined time period within which that review must happen.

    What are the graded liability caps under the Second Schedule?

    1. Above 3,600 Megawatt-electric (MWe): Operators of reactors above 3,600 MWe face a maximum liability of Rs 3,000 crore. MWe measures the electrical output of a reactor as distinct from its thermal output.
    2. 1,500 MWe to 3,600 MWe: Operators in this band face a cap of Rs 1,500 crore.
    3. 750 MWe to 1,500 MWe: The cap falls to Rs 750 crore.
    4. 150 MWe to 750 MWe: The cap falls to Rs 300 crore.
    5. Up to 150 MWe and other facilities: For reactors up to 150 MWe, for fuel-cycle facilities other than spent-fuel reprocessing plants, and for the transportation of nuclear material, liability is capped at Rs 100 crore.

    How has the operator’s right of recourse against suppliers changed?

    1. The three grounds under the old law: Section 17 of the CLNDA gave the operator a right of recourse where the right was expressly provided for in a written contract, where the incident resulted from an act of the supplier or the supplier’s employee including supply of equipment or material with patent or latent defects or sub-standard services, and where the incident resulted from an act or omission of an individual done with intent to cause nuclear damage.
    2. What survives: The new law retains the contractual ground and the intentional damage ground.
    3. What has been dropped: The supplier defect ground has been omitted, and it was the provision that exposed nuclear equipment vendors to long-term and uncertain liability risk in the event of an accident.
    4. What replaces it: Operators may now seek recourse from suppliers only through what they negotiate into a contract, which moves the question from statute to bargaining power.
    5. What it unblocks: Removing the statutory supplier exposure directly addresses the objection that kept foreign vendors out of Indian projects for over a decade.

    Why is the liability framework being challenged in the Supreme Court?

    1. The grounds pleaded: A petition challenges the Act for allowing private sector and foreign companies to operate nuclear power plants in India, for capping the liability of these operators at what it calls an absurdly low level, and for exempting the supplier from any liability, in violation of the Constitution.
    2. The accountability objection: Opening the sector to private operators while capping their exposure shifts residual risk from the operator to the exchequer and ultimately to victims.
    3. The five-yearly review does not answer it: Rule 78 allows the operator’s cap to be revised upward over time. It creates no mechanism to restore a supplier’s statutory liability, which the Act has removed from the framework entirely.
    4. The competing objective: Liability certainty is the precondition foreign vendors set for entering Indian projects, so the same provision that draws the petition is the one that makes the capacity expansion arithmetic feasible.

    What challenges does India’s civil nuclear liability framework face?

    1. A cap fixed in nominal terms erodes with inflation: A rupee figure written into a Schedule loses real value between revisions, so the five-year cycle sets the pace at which protection decays. Eg. The flat cap under the Civil Liability for Nuclear Damage Act, 2010 stood unrevised from 2010 until the SHANTI Act, 2025 replaced it with graded caps.
    2. Caps far below the actual cost of a severe accident: Graded caps measured in thousands of crores do not approach the cost of a major release. Eg. Cleanup and compensation costs after the 2011 Fukushima accident in Japan ran to tens of trillions of yen, orders of magnitude above any cap in the Second Schedule.
    3. Thin domestic insurance capacity for nuclear risk: Operators must place cover for the capped amount in a market with few underwriters willing to carry nuclear exposure. Eg. The India Nuclear Insurance Pool was created in 2015 precisely because individual insurers would not write the risk alone.
    4. Contractual recourse depends on bargaining power: With the statutory supplier ground removed, a smaller operator negotiating with a global vendor has little leverage to secure recourse in the contract. Eg. Jaitapur negotiations with the French vendor stalled for years over tariff and liability terms even while the statutory provision was in force.
    5. Regulatory independence still being built out: The Atomic Energy Regulatory Board has only now received statutory authority, having previously reported to the Department of Atomic Energy it was meant to regulate. Eg. The SHANTI Act, 2025 grants the Board statutory status for the first time and places its expenditure under the Comptroller and Auditor General.
    6. Claims machinery untested at scale: A dedicated claims commission exists on paper without a demonstrated record of settling mass claims quickly. Eg. The Act establishes a Nuclear Damage Claims Commission with appeals to the Electricity Appellate Tribunal, neither of which has adjudicated a nuclear damage claim.
    7. Public acceptance and siting resistance: Liability caps read as a transfer of risk to communities near installations, which hardens local opposition to siting. Eg. Sustained local protest at Kudankulam in Tamil Nadu delayed commissioning of the first units for years.

    Conclusion

    The five-yearly expert review converts a static Schedule of liability caps into a periodically revisable one, which is a real improvement on a flat figure left unrevised for fifteen years. It does not address the change that drew the litigation, since the supplier’s statutory exposure has been removed rather than capped, and no review clause can restore it. The measure currently stands at the draft rules stage, and the source states no date for the close of the comment window or for notification of the final rules, with the constitutional challenge to the Act pending before the Supreme Court.

    “[2018, GS3, 15] With growing energy needs should India keep on expanding its nuclear energy programme? Discuss the facts and fears associated with nuclear energy.”

  • Congress-ruled states to move court against new mines law

    Why in the News

    State governments where the Congress is in power are preparing to challenge the Mines and Minerals (Development and Regulation) Amendment Act, 2026 in the Supreme Court, on the ground that it undermines the rights of the States. The Act, passed by the House on 13 August 2026, seeks to curb the power of States to levy taxes on mineral rights and mineral bearing lands. That power was confirmed as belonging to the States by a nine judge Bench two years ago, so the dispute is over whether Parliament can legislate away a taxing entry the Court has read as independent.

    What is the Mines and Minerals (Development and Regulation) Act, 1957?

    1. What it is: The Mines and Minerals (Development and Regulation) Act, 1957, referred to as the MMDR Act, is the parent law governing every mineral in India except petroleum and natural gas.
    2. The core split it creates: The State Government owns the mineral in its territory. The Central Government decides the rules, fixes the royalty rate for major minerals and, for some categories, conducts the auction.
    3. How a block reaches a miner: Someone auctions the block, the State signs the lease, and the company mines. The State signs the lease in every case, including where the Centre ran the auction.
    4. Where the money goes: Royalty, dead rent and the auction premium go to the State in every case, with offshore blocks the only exception.

    What is the current status of State taxing power over minerals in India?

    1. The settled position since 2024: A nine judge Bench of the Supreme Court in Mineral Area Development Authority v Steel Authority of India, decided eight to one in 2024, held that States hold an independent power under Entry 50 of the State List to levy taxes on mineral rights, and that the MMDR Act does not take that power away.
    2. The distinction the ruling rests on: Royalty is not a tax. It is consideration paid to the State as the owner of the mineral, which is why a State levy on mineral rights is a separate and additional exercise of power.
    3. What the ruling overturned: India Cement v State of Tamil Nadu (1990), which had held royalty to be a tax and State cesses on royalty to be beyond State competence, stands overruled.
    4. The recovery window: States may recover past dues from 1 April 2005, in instalments spread over twelve years beginning 1 April 2026, without interest or penalty on the earlier period.
    5. What the ruling did not give the States: It conferred a power to tax mineral rights, not a power to fix the royalty rate. Royalty rates for major minerals continue to be set centrally under the Second Schedule to the MMDR Act.
    6. What the 2026 amendment now does to that position: The Act passed on 13 August 2026 seeks to curb the power of States to levy taxes on mineral rights and mineral bearing lands, which is the power the 2024 ruling had recognised.

    Constitutional Provisions Related to Mineral Rights and Legislative Competence

    1. Entry 54, Union List: Regulation of mines and mineral development, to the extent that Parliament by law declares such Union control to be expedient in the public interest.
    2. Entry 23, State List: Regulation of mines and mineral development, expressly made subject to the provisions of Entry 54 of the Union List.
    3. Entry 50, State List: Taxes on mineral rights, subject to any limitations imposed by Parliament by law relating to mineral development.
    4. Entry 49, State List: Taxes on lands and buildings, the entry under which States tax mineral bearing land.
    5. Entry 55, Union List: Regulation of labour and safety in mines and oilfields.
    6. Article 297: Vests in the Union all lands, minerals and other things of value underlying the ocean within the territorial waters, the continental shelf and the exclusive economic zone.
    7. Article 246: Distributes legislative power between Parliament and the State legislatures across the three Lists.
    8. Article 265: Provides that no tax shall be levied or collected except by authority of law.
    9. Article 131: Confers original jurisdiction on the Supreme Court in a dispute between the Government of India and one or more States, the route through which a State sues over a central statute.

    What is royalty on minerals?

    1. What it is: Royalty is the payment a lessee makes to the owner of the mineral for the mineral removed or consumed, calculated mostly on an ad valorem basis on the average sale price published by the Indian Bureau of Mines.
    2. Who sets it and who receives it: The Centre fixes the rate for major minerals through the Second Schedule to the MMDR Act, and the State fixes it for minor minerals. The State Government receives it in both cases.

    What is a minor mineral?

    1. The statutory definition: Section 3(e) of the MMDR Act names building stones, gravel, ordinary clay and ordinary sand as minor minerals, and allows the Centre to notify any other mineral as minor. Everything not notified as minor is a major mineral, defined negatively with no positive list.
    2. Who controls them: Section 15 gives States exclusive power to frame minor mineral rules and to fix minor mineral royalty, so the Centre’s power over minor minerals is limited to deciding what enters the category.

    What does the Mines and Minerals (Development and Regulation) Amendment Act, 2026 change?

    1. The core change: The Act seeks to curb the power of States to levy taxes on mineral rights and on mineral bearing lands.
    2. The scope claimed for it: The Centre states that it is seeking to regulate only major minerals such as coal, limestone, iron ore, copper and manganese.
    3. What is stated to be left untouched: The States would continue to have powers over 49 minor minerals.
    4. The stated purpose: The Union Minister of Mines told the Rajya Sabha that the legislation does not seek to interfere with the autonomy or revenue rights of States, and that it aims only to ensure uniform mineral rates across the country.
    5. The stage it has reached: The Act was passed by the House on 13 August 2026.

    Which States are challenging the Act and on what ground?

    1. The States on board: Karnataka, Telangana and Himachal Pradesh are already committed to challenging the amendment Act in the Supreme Court.
    2. The State still being negotiated: The Congress is in talks with its ally the Jharkhand Mukti Morcha to get the Jharkhand government to join the challenge.
    3. The stated ground: The party alleges that the law undermines the rights of the States.
    4. The demand short of litigation: The Karnataka Deputy Chief Minister urged the Centre to withdraw the amendment Act, objecting to its restrictive provisions.
    5. The federal framing from Kerala: The Kerala Chief Minister stated that the amendments to the Act are against federal principles.

    How can a State challenge a central law?

    1. The original suit route: A State may institute an original suit against the Government of India in the Supreme Court under Article 131, which is the route available where the dispute involves a question on which a legal right of the State depends.
    2. The writ route is not open to a State in the same way: Article 32 is a remedy for enforcement of fundamental rights, and a State is not a person entitled to fundamental rights, so a State ordinarily proceeds under Article 131 rather than Article 32.
    3. Why the choice of route matters here: An Article 131 suit frames the matter as a Centre State dispute over legislative competence rather than as a grievance of an affected mining company.
    4. The competence question that will be argued: The dispute turns on whether the 2026 Act is a limitation of the kind Entry 50 permits Parliament to impose, or an extinguishing of the entry itself.
    5. The precedent that will be relied on: The 2024 nine judge ruling held that the MMDR Act as it then stood did not take away the Entry 50 power, which leaves open whether a later Act can impose limitations that empty it.

    Major debates surrounding State taxation of mineral rights

    1. Ownership against regulation: The State owns the mineral and receives the royalty, while the Centre fixes the rate and writes the rules, so the party bearing the social and environmental cost of mining does not set the price of it.
    2. Competing readings of one entry: Entry 50 is read either as a State power with a boundary Parliament may draw, or as a power Parliament may narrow until nothing is left of it.
    3. A tax entry against a regulatory entry: Entry 54 of the Union List is a regulatory entry over mineral development, and the question is whether a regulatory power carries with it the power to restrict a taxing entry in the State List.
    4. Two landmark rulings in tension: India Cement (1990) treated royalty as a tax and denied State competence, and Mineral Area Development Authority (2024) treated royalty as consideration and affirmed it, so the sector has operated under opposite rules within one generation.
    5. Uniform rates against fiscal autonomy: Uniform mineral rates across the country lower input cost volatility for steel, aluminium, cement and power, and remove a revenue instrument from the States where those minerals lie.
    6. The retrospective recovery question: Permitting recovery of dues from 1 April 2005 in instalments from 1 April 2026 exposes mineral users to a large accumulated liability, which is the practical trigger for legislative intervention.
    7. The empirical gap the dispute turns on: There is no agreed estimate of what the recovered dues and future State levies would add to the delivered cost of coal, iron ore and limestone, so both the revenue claim and the input cost claim rest on projections.

    Challenges to the new mineral taxation framework

    1. A single change alters two revenue streams at once: Curbing taxes on mineral rights and on mineral bearing lands touches Entry 50 and Entry 49 together, so States lose both an activity based and a property based levy. Eg. Several mineral States had begun framing levies immediately after the 2024 ruling recognised the Entry 50 power.
    2. Litigation freezes revenue planning on both sides: States cannot budget on a levy under challenge, and miners cannot provide for a liability that may be extinguished. Eg. Karnataka, Telangana and Himachal Pradesh have already committed to moving the Supreme Court against the Act.
    3. Uniform national rates ignore differences in deposit quality: A single rate across States taxes a high grade and a low grade deposit identically, which penalises the State with the harder ore body. Eg. Iron ore grades differ sharply between Odisha, Karnataka and Goa, with different beneficiation costs.
    4. The retrospective window collides with the amendment: Recovery of dues from 1 April 2005 was to start in instalments from 1 April 2026, the same period in which the curbing Act was passed. Eg. The twelve year instalment schedule the Court allowed begins precisely when the new restriction takes effect.
    5. The distinction between royalty and tax remains contestable in practice: A State levy structured on the royalty amount can be characterised as a tax on mineral rights or as a levy on land, which invites classification disputes at every notification. Eg. District Mineral Foundation contributions are already computed on the royalty amount rather than on sale value.
    6. Mining States bear the externalities regardless of the tax outcome: Land degradation, dust pollution, groundwater disruption and displacement fall on the district whether or not the State can levy. Eg. The mineral belt overlaps the Fifth Schedule tribal belt almost exactly.
    7. Investment decisions stall while competence is unsettled: Long gestation mining projects require certainty on the total payment stack over a fifty year lease. Eg. A mining lease under the MMDR Act runs for fifty years, far longer than the litigation cycle over the levy.

    Conclusion

    The Mines and Minerals (Development and Regulation) Amendment Act, 2026 has been passed by the House on 13 August 2026 and seeks to curb State powers to tax mineral rights and mineral bearing lands. The next step is a challenge in the Supreme Court, with Karnataka, Telangana and Himachal Pradesh committed and Jharkhand still under negotiation, and the source states no date for filing. The dispute is not about who owns the mineral, which is settled, but about whether a taxing entry in the State List can be narrowed by a central law made under a regulatory entry in the Union List. Until that is answered, the sector operates with two revenue claims on the same rupee.

    “[2025] Consider the following statements:

    Statement I: In India, State Governments have no power for making rules for grant of concessions in respect of extraction of minor minerals even though such minerals are located in their territories.

    Statement II: In India, the Central Government has the power to notify minor minerals under the relevant law.

    Which one of the following is correct in respect of the above statements?

    (a) Both Statement I and Statement II are correct and Statement II explains Statement I

    (b) Both Statement I and Statement II are correct but Statement II does not explain Statement I

    (c) Statement I is correct but Statement II is not correct

    (d) Statement I is not correct but Statement II is correct |

  • This is not the end. They will be back

    Why in the News

    Students wound down a 36-day protest at Jantar Mantar a month after their attempted march on Parliament. The state conceded the movement’s central demand within days of a crackdown that left over 100 injured, which separates the state’s capacity to repress from its capacity to prevail.

    What is the Cockroach movement?

    1. About: A student movement that held a 36-day protest at Jantar Mantar in Delhi and attempted a march on Parliament, built around demands on examination integrity and employment.
    2. Origin of the name: The movement took its name from an insult directed at its participants, which landed because it confirmed a generational suspicion that the system discounts merit in favour of proximity to power and capital.
    3. Structure: It is a distributed structure of social-media accounts, campus unions and Left student federations moving in loose, non-hierarchical coordination.
    4. Founder and allies: Its founder is a young man skilled at communications rather than a moral authority, and its closest unifying figure, Sonam Wangchuk, was an ally who lent his hunger strike to a cause he did not create.

    How does its structure differ from earlier Indian mass movements?

    1. The older template: Every major mass movement in India over the last century organised itself around a moral authority, with Gandhi, Jayaprakash Narayan and Anna Hazare as the reference points.
    2. The inversion: The Cockroach movement inverted that template, since its organisational logic makes a singular leader almost unnecessary for mobilisation.
    3. Where a leader may still be needed: A single figure may eventually become necessary for consolidation, which is a different task from mobilisation.
    4. Resilience without a leader: The movement functions less as a single episode than as a recurring condition that has found a name and a shared vocabulary, which gives it a resilience no single leader could provide.

    What does a leaderless structure gain and what does it cost?

    1. The gain: A leaderless structure is hard for the state to decapitate, since there is no single node whose removal stops the movement.
    2. The three costs: Coalitions without a centre struggle to negotiate coherently, to discipline internal tactical disagreement, and to convert a moment of mobilisation into an institution.
    3. The precedent: India Against Corruption never built that institutional layer, unlike the Aam Aadmi Party it produced. The movement dissolved and the party it created persisted.
    4. The open question: Whether anyone is building an equivalent institutional layer beneath the surface of the Cockroach movement is the most important unresolved question about it.
    5. The untested capacity: Sustaining coherence and pressure over years is a capacity the movement has not yet had occasion to demonstrate.

    Why did coercive dominance not deliver the outcome it promised?

    1. The asymmetry of resources: The state fields cadre strength, a police and paramilitary apparatus, and financial resources that no youth movement funded by small donations can match.
    2. The crackdown: When protestors tried to march on Parliament, the police response left over 100 injured and dozens arrested, with the record showing violence running in one direction only.
    3. The concession: Within days of the crackdown, the government conceded the central demand.
    4. The distinction that follows: The episode separates the state’s capacity to repress from its capacity to prevail, and disproves any account in which coercive machinery automatically wins.
    5. The exposure of the machinery: The students left behind a dazed government, a confused leadership and a police machinery exposed as brutal and lacking the sensitivity the moment required.

    Why was the medical entrance examination leak a trigger rather than a cause?

    1. The distinction: The leak of the National Eligibility cum Entrance Test (NEET), the single national entrance examination for undergraduate medical admission, is a scandal rather than a structural condition. Only a movement fuelled by a structural condition survives the resolution of the immediate grievance.
    2. The labour market: Underneath the leak sits a labour market that cannot absorb the graduates it produces.
    3. The examination system: The examination and recruitment system is widely perceived as corruptible, which is a standing condition rather than a single episode.
    4. The rural crisis: A rural unemployment crisis draws less media attention than its urban counterpart and is arguably deeper and more intractable.
    5. What the insult confirmed: The name given to the movement stuck because it matched what a generation already believed about how selection actually works.

    What separates a low-cost concession from a structural demand?

    1. The cheap concession: A single resignation is a low-cost concession, which is why the government conceded it quickly.
    2. The expensive demands: Systemic examination reform, large-scale job creation and accountability for the crackdown are much harder fiscally and politically.
    3. The durability test: Extracting one concession through a low-cost demand is a different task from sustaining pressure on a structural condition with no single remediable trigger.
    4. What the movement has proved: The movement has already outperformed what its lack of centralised leadership would predict.
    5. What remains unproved: Whether a leaderless coalition can maintain coherence and pressure over years is the test the movement has not yet faced.

    Challenges to Sustaining the Movement

    1. Negotiating without a centre: A distributed coalition cannot make binding commitments across the table, since no faction can deliver the others. Eg. India Against Corruption fragmented once talks moved from street demands to draft legislation, with its constituent groups splitting over the text of the Lokpal Bill.
    2. Conversion into an institution: Movements that do not build an organisational layer dissolve when the immediate demand is met. Eg. The Aam Aadmi Party survived the collapse of India Against Corruption because it built an electoral machine, and the parent movement did not.
    3. State response confined to force: The government has shown no evident plan beyond force, and a ham-handed approach paired with the hope that pressure deters the youth is likely to misfire. Eg. Appointing a committee whose composition is unpalatable to the protestors solves nothing and hardens positions.
    4. Funding asymmetry: A movement funded by small donations cannot sustain legal defence, medical costs and logistics against a prolonged state response. Eg. Dozens arrested after the Parliament march face criminal proceedings that will run for years.
    5. Attention decay: A structural condition without a fresh scandal loses media attention, and rural distress attracts less coverage than its urban counterpart. Eg. Rural unemployment runs deeper than urban graduate unemployment and receives far less national coverage.
    6. Substituting identity for mobility: Where the economic route to status narrows, religion, nationalism, caste and online tribes supply the standing a salary does not, which fractures a common economic demand. Eg. Youth mobilisation in India has repeatedly shifted from employment demands to identity assertion within the same cohort.

    Conclusion

    The movement’s durability rests not on its leaderlessness but on whether a distributed coalition can convert a structural grievance into sustained institutional pressure. The state conceded a single resignation quickly and left the labour market, the examination system and rural unemployment untouched. What is needed on the government’s side is a return to the drawing board rather than force paired with a committee the protestors reject. The alternative is a long confrontation with a generation the state has not learned how to answer.

    “[2024, GS2, 15] What are the aims and objects of the recently passed and enforced, The Public Examination (Prevention of Unfair Means) Act, 2024? Whether University/State Education Board examinations, too, are covered under the Act?”

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