💥Join UPSC 2027,2028 Mentorship (August Batch) + XFactor Notes & Microthemes PDF
Talk to Mentor

Civilsdaily

Login

Search results for: “”

  • Government summons Meta as Parliament flags limits of intermediary immunity

    Why in the News

    A parliamentary panel warned a large social media company that its legal immunity could be withdrawn after a content takedown and content safety failures.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

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

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

    What triggered the summons?

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

    Why is the immunity in question?

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

    Conclusion

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

    Back2Basics

    Standing Committee on Communications and Information Technology

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

    Structure and Composition

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

    Ministries under its Jurisdiction

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

    Core Functions

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

    PYQ Relevance

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

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

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

    Why in the News

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

    What is the Indian Statistical Institute (ISI)?

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

    What does the Bill propose?

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

    Why are faculty members concerned?

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

    Prelims Pointers

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

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

    [A] Only one

    [B] Only two

    [C] Only three

    [D] All four

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

    Why in the News

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

    What is a Money Bill?

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

    What does the Bill provide?

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

    Why is the Money Bill route controversial?

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

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

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

    Why in the News

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

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

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

    Key Rules and Goals

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

    What does the amendment propose?

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

    Why is the Bill contested?

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

    What are the challenges to the FCRA framework?

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

    Conclusion

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

    Back2Basics

    The Foreign Contribution (Regulation) Amendment Bill, 2026:

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

    Key Provisions of the Bill

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

    PYQ Relevance

    [UPSC 2015] Examine critically the recent changes in the rule governing foreign funding of NGOs under the Foreign Contribution (Regulation) Act (FCRA), 1976.

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

    Why in the News

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

    What is an Urban Cooperative Bank (UCB)?

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

    What is RBI changing?

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

    Why was licensing suspended?

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

    Why has RBI resumed licensing?

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

    Prelims Pointers

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

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

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

    Why in the News

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

    What is the Merchant Discount Rate (MDR)?

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

    What does the Bill propose?

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

    Who should bear the cost of UPI?

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

    Prelims Pointers

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

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

  • Equity concerns in the 16th Finance Commission award

    Why in the News

    The 16th Finance Commission has retained the size of the tax pool for States but reshaped the grants that equalise between them. The tension is between fiscal efficiency and the constitutional intent of equity across unequal States.

    What is the Finance Commission?

    1. Constitutional body: The Finance Commission is set up under Article 280 every five years to recommend the sharing of taxes between the Union and the States.
    2. Vertical devolution: It fixes the share of central taxes that goes to States as a whole.
    3. Horizontal devolution: It sets the formula distributing that share among individual States.

    What are the Key Recommendations of the 16th Finance Commission?

    • Vertical devolution retained at 41%: The States’ share of the divisible pool stays at 41%, the same level as the 15th Finance Commission, giving continuity and predictability.
    • Income distance weight trimmed: The income distance weight in the horizontal formula is cut from 45% to 42.5%.
    • New GDP contribution weight: A 10% GDP contribution weight is introduced in the horizontal formula.
    • Revenue Deficit Grants eliminated: The Revenue Deficit Grants that plugged the gap for States unable to meet committed expenditure are discontinued.
    • Sector and State specific grants cut: Most sector specific and State specific grants are removed.
    • Grants in aid share halved: Grants in aid fall from 19.4% to 8.3% of total transfers.

    Why do the changes raise equity concerns?

    • Rewarding the prosperous: A GDP contribution weight favours already prosperous States that contribute more to national output.
    • Removing the equaliser: Revenue Deficit Grants had cushioned States that cannot meet committed expenditure from their own revenue.
    • Constitutional intent: Grants in aid under Article 275 are meant to lift weaker States, and a shrinking grant share works against that purpose.

    Conclusion

    The award tilts the transfer system toward fiscal performance and away from equalisation. The unresolved question is whether poorer States can meet their obligations once the grant cushion is withdrawn.

    What is Fiscal Federalism?

    • About: Fiscal federalism is the division of taxation powers, expenditure responsibilities, borrowing powers, and intergovernmental transfers among the different levels of government in a federal system.
    • Rationale: It is not merely a mechanism for dividing taxes, it ensures that a citizen’s access to essential public services does not depend excessively on the fiscal capacity of the State in which they live. Indian fiscal federalism reconciles three imbalances.
    • Vertical fiscal imbalance: The Union has access to buoyant, broad based taxes, while the States carry expenditure intensive responsibilities such as health, education, agriculture, police, and local infrastructure.
    • Horizontal fiscal imbalance: States differ widely in income, resources, geography, demographics, and revenue raising ability, so a lower income State cannot fund the same services as a richer one at similar tax rates.
    • Third tier fiscal imbalance: Panchayats and Municipalities carry substantial service delivery duties but have limited own source revenue and depend on transfers from the Union and the States.

    Constitutional Framework Governing Fiscal Federalism

    • Article 246 and the Seventh Schedule: Divides legislative and taxation powers through the Union, State, and Concurrent Lists, placing public order, health, agriculture, and local government largely in the State domain.
    • Article 246A: Inserted by the 101st Constitutional Amendment Act, 2016, gives Parliament and State Legislatures concurrent power over Goods and Services Tax, with Parliament exclusive over inter State GST.
    • Article 270: Defines the taxes forming the divisible pool shared with the States on the Finance Commission’s recommendation.
    • Article 271: Allows Union surcharges, which along with cesses are excluded from the divisible pool.
    • Article 275: Empowers Parliament to give grants in aid from the Consolidated Fund of India to States in need, including for Scheduled Tribes and Scheduled Areas.
    • Article 280: Requires the President to constitute a Finance Commission every five years to recommend vertical and horizontal devolution, the principles of grants in aid, and measures to augment State funds for local bodies.
    • Article 282: Permits the Union or a State to make grants for any public purpose, the constitutional basis for many discretionary and centrally sponsored transfers.
    • Articles 243-I and 243-Y: Require States to constitute State Finance Commissions every five years for Panchayats and Municipalities respectively.
    • Article 293: Lets States borrow within India, but a State indebted to the Union needs Union consent for further borrowing.
    • Article 279A: Establishes the GST Council, institutionalising cooperative Union State decision making on indirect taxes.

    [2023] Consider the following :
    1. Demographic performance
    2. Forest and ecology
    3. Governance reforms
    4. Stable government
    5. Tax and fiscal efforts
    For the horizontal tax devolution, the Fifteenth Finance Commission used how many of the above as criteria other than population area and income distance?
    (a) Only two
    (b) Only three
    (c) only four
    (d) All five

  • GST must be fuelled by domestic production, not inflation or imports

    Why in the News

    Record monthly Goods and Services Tax collection was driven more by imports and price rise than by domestic output. The tension is between a headline revenue high and a weak production base underneath it.

    What is the Goods and Services Tax (GST)?

    1. Indirect tax: The Goods and Services Tax (GST) is a destination based tax on the supply of goods and services, in force since July 2017.
    2. Dual structure: It has a Central component and a State component, with an Integrated GST (IGST) on inter state and import transactions.
    3. Council: Rates are set by the GST Council, a federal body of the Union and States.

    What does the latest collection actually show?

    1. Headline figure: July GST touched Rs 2.11 lakh crore, up 15.4% year on year.
    2. Import driven: Integrated GST (IGST) on imports grew 26.9%, against just 4.5% for the domestic component.
    3. Price effect: Rupee depreciation and high Wholesale Price Index manufacturing inflation of 7.18% inflated the nominal figure.

    Why is the revenue base narrow?

    1. Geographic concentration: Collection is heavily skewed toward a handful of industrialized or consumption-heavy regions. Only 16 States and Union Territories were above the national average collection.
    2. Weak domestic demand: Sluggish home production limits the tax base.
    3. Inflation illusion: A rising nominal collection can mask flat real activity. Rising nominal collection numbers can be deceptive, as high wholesale price inflation and currency depreciation artificially inflate transaction values.

    Conclusion

    Strong collection numbers are being read as growth when they partly reflect imports and inflation. A broad based GST 3.0 must widen the domestic production base rather than lean on price rise.

    Back2Basic

    GST 2.0

    Launched in 2025, GST 2.0 is a major overhaul of India’s indirect taxation system. It simplifies the multi-tier structure into core merit (5%) and standard (18%) slabs, eliminates the old 12% and 28% categories for most items, and introduces a 40% demerit rate for luxury and sin goods.

    Key Tax Slab Changes

    1. Nil / 0%: Life and health insurance, basic food staples (UHT milk, paneer, Indian breads), and 33 life-saving medicines.
    2. 5% (Merit Rate): Common household essentials, agricultural machinery (tractors, harvesters), gym/fitness services, and handicrafts.
    3. 18% (Standard Rate): Consumer durables (TVs, ACs), small cars, two-wheelers, and cement.
    4. 40% (Demerit Rate): Luxury cars, aerated drinks, pan masala, and tobacco products

    PYQ Relevance

    [UPSC 2019] Enumerate the indirect taxes which have been subsumed in the goods and services tax (GST) in India. Also, comment on the revenue implications of the GST introduced in India since July 2017.

    Linkage: The PYQ examines the revenue implications of GST and its impact on India’s indirect tax system. The article evaluates GST revenue quality, showing that recent collections are driven more by imports and inflation than broad-based domestic economic growth.

  • India may charge gas users to fund planned $42 billion fuel reserves, sources say

    Why in the News

    India proposed to fund an enlarged strategic fuel reserve through a small charge on cooking gas and natural gas. The move exposes the trade off between building energy insurance and raising the household fuel bill.

    What is a Strategic Petroleum Reserve?

    1. Emergency stockpile: A strategic petroleum reserve is a government held store of fuel to cushion supply shocks and price spikes.
    2. Current cover: India’s existing reserves hold crude oil at underground sites managed by the Indian Strategic Petroleum Reserves Limited (ISPRL).
    3. New feature: For the first time the buffer would extend beyond crude to cover LNG and LPG.

    How would the new reserve be funded?

    1. LPG charge: A levy of about Rs 1.29 per kg on cooking gas is proposed.
    2. Gas charge: A levy of about Rs 1.43 per standard cubic metre on natural gas is proposed.
    3. Annual pool: The charges would raise close to $1.5 billion a year.
    4. Cover target: The reserve would hold roughly two months of crude and LNG and six weeks of LPG.

    Why does energy security drive this now?

    1. Import dependence: India imports about 90% of its crude and is the third largest oil importer.
    2. Chokepoint risk: Disruption at the Strait of Hormuz has already forced diversification of LNG sources.
    3. Price volatility: A larger buffer reduces exposure to sudden price surges.

    Conclusion

    The proposal marks a shift from a crude only buffer to a broader fuel insurance system, paid for by consumers. The next milestone is the formal notification of the levy and the reserve’s expansion plan.

    Back2Basics

    Cooking gas and Natural gas

    Cooking gas (Liquefied Petroleum Gas or LPG) and natural gas (Piped Natural Gas or PNG) differ primarily in chemical composition, how they are stored, and how they are delivered to homes.

    Key Differences in Composition and Properties

    1. Chemical Makeup: Cooking gas (LPG) is made of propane and butane (C₃H₈ and C₄H₁₀), while natural gas is primarily methane (CH₄).
    2. Energy Output: LPG has a higher calorific value, meaning it produces more heat per unit and cooks food faster than natural gas.
    3. Behavior in Leaks: LPG is heavier than air and settles near the floor during a leak, whereas natural gas is lighter than air and rises/disperses quickly upward.

    PYQ Relevance

    [UPSC 2025]“Energy security constitutes the dominant kingpin of India’s foreign policy, and is linked with India’s overarching influence in Middle Eastern countries.” How would you integrate energy security with India’s foreign policy trajectories in the coming years?

    Linkage: The PYQ examines the role of energy security in shaping India’s foreign policy and strategic interests. The article highlights India’s plan to expand strategic fuel reserves to reduce import risks and strengthen long-term energy security.

  • RBI Monetary Policy Committee holds the repo rate at 5.25%

    Why in the News

    The Monetary Policy Committee (MPC) of the Reserve Bank of India (RBI) has kept the policy repo rate unchanged at 5.25%, balancing inflation risks against the need to support economic growth amid global uncertainties.

    What is the Monetary Policy Committee (MPC)?

    • Statutory body: Constituted under the Reserve Bank of India Act, 1934 (amended in 2016).
    • Composition: Six members:
      • Three RBI members: Governor (Chairperson), Deputy Governor in charge of Monetary Policy, and one RBI nominee.
      • Three external members: Appointed by the Central Government.
    • Decision-making: Each member has one vote; in case of a tie, the Governor has a casting vote.
    • Mandate: Maintain Consumer Price Index (CPI) inflation at 4%, with a tolerance band of 2% to 6%.

    What did the MPC decide?

    • Repo rate unchanged: Retained at 5.25%.
    • Policy stance: Continues to remain neutral.
    • Liquidity corridor:
      • Standing Deposit Facility (SDF): 5.0%
      • Marginal Standing Facility (MSF): 5.5%
      • Bank Rate: 5.5%
    • Growth outlook: Real GDP growth projected at 6.7%.
    • Inflation outlook: CPI inflation rose to 4.4% in June 2026, crossing the 4% target after remaining below it for 16 months.

    Why did the MPC maintain the status quo?

    • Global uncertainties: Rising crude oil prices and geopolitical tensions in West Asia pose inflation risks.
    • Monsoon concerns: An El Nino driven deficient monsoon could increase food inflation.
    • Data dependent approach: The MPC prefers to wait for clearer inflation and growth signals before changing policy rates.

    Back2Basics: Reserve Bank of India (RBI)

    • Established: 1935 under the Reserve Bank of India Act, 1934.
    • Functions: Monetary authority of India, Banker to the Government, Banker to banks, Regulator and supervisor of the banking system, and Manager of foreign exchange reserves.
    • Major monetary policy instruments: Repo Rate, Standing Deposit Facility (SDF), Marginal Standing Facility (MSF), Cash Reserve Ratio (CRR), Statutory Liquidity Ratio (SLR), Open Market Operations (OMOs)

    “[2017] Which of the following statements is/are correct regarding the Monetary Policy Committee (MPC)?
    1. It decides the RBI’s benchmark interest rates.
    2. It is a 12-member body including the Governor of RBI and is reconstituted every year.
    3. It functions under the chairmanship of the Union Finance Minister.
    Select the correct answer using the code given below:
    (a) 1 only
    (b) 1 and 2 only
    (c) 3 only
    (d) 2 and 3 only

More posts