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Subject: Economics

  • Kalpakkam Fast Breeder Reactor Attains Criticality

    Why in the news?

    India’s first indigenous Fast Breeder Reactor (FBR) at Kalpakkam, Tamil Nadu has attained criticality, marking a major milestone in India’s three stage nuclear programme.

    What is Criticality

    Criticality means:

    • Self sustaining nuclear chain reaction begins
    • Reactor core working as designed
    • Step before electricity generation
    • Capacity: 500 MWe reactor

    What is Fast Breeder Reactor (FBR)

    • Produces more fuel than it consumes
    • Uses:
      • Uranium plutonium MOX fuel
      • Uranium 238 blanket to produce more fuel
    • This process called: Nuclear transmutation

    India’s Three Stage Nuclear Programme

    • Stage 1
      • Pressurised Heavy Water Reactors (PHWR)
      • Fuel: Natural uranium
    • Stage 2
      • Fast Breeder Reactors (FBR)
      • Produces plutonium
    • Stage 3
      • Thorium based reactors
      • India has large thorium reserves

    Why This is Important

    • India to become 2nd country after Russia
    • Indigenous nuclear technology
    • Strengthens energy security
    • Moves India toward thorium based energy
    [2022] With reference to India, consider the following statements: 
    1. Monazite is a source of rare earths. 
    2. Monazite contains thorium. 
    3. Monazite occurs naturally in the entire Indian coastal sands in India. 
    4. In India, Government bodies only can process or export monazite.” 
    Which of the statements given above are correct? 
    [A] 1, 2 and 3 only [B] 1, 2 and 4 only [C] 3 and 4 only [D] 1, 2, 3 and 4

  • BRO Project Chetak Completes 47 Years

    Why in News

    Project Chetak of the Border Roads Organisation (BRO) celebrated its 47th Raising Day on 4 April 2026 at Bikaner, Rajasthan.

    About Project Chetak

    • Launched: 1980
    • Implemented by: Border Roads Organisation (BRO)
    • Area: Western border region
      • Rajasthan
      • Punjab
      • Northern Gujarat

    Objectives

    • Strengthen border infrastructure
    • Ensure all weather connectivity
    • Support troop movement
    • Promote regional development

    Key Features

    • Maintains 4,000 km+ roads
    • 214 km Ditch Cum Bund (DCB) for: Border security and Flood control
    • Upgrading feeder roads to:
      • National Highway double lane standard

    About Border Roads Organisation (BRO)

    • The Border Roads Organisation (BRO), established on May 7, 1960, is a premier statutory construction force under India’s Ministry of Defence. 
    • It develops and maintains road networks, bridges, tunnels, and airfields in border regions and friendly neighboring countries. 
    • Primarily serving the armed forces, the BRO plays a critical role in enhancing national security and regional connectivity in challenging terrains.
    [2024] What are the duties of the Chief of Defence Staff (CDS) as Head of the Department of Military Affairs? 1 Permanent Chairman of Chiefs of Staff Committee. 2 Exercise military command over the three Service Chiefs. 3 Principal Military Advisor to Defence Minister on all tri-service matters. Select the correct answer using the code given below: (a) 1, 2, 3 (b) 1 and 2 only (c) 2 and 3 only (d) 1 and 3 only

  • [6th April 2026] The Hindu OpED: Transforming India’s nuclear power landscape 

    PYQ Relevance[UPSC 2018] With growing energy needs should India keep on expanding its nuclear energy programme? Discuss the facts and fears associated with nuclear energy.Linkage: The article directly addresses the expansion of nuclear energy to 100 GW by 2047, highlighting its role in energy security and net-zero goals. It also reflects the “facts vs fears” dimension through issues like high costs, liability concerns, and safety challenges alongside baseload advantages.

    Mentor’s Comment

    India’s nuclear power sector is at a decisive inflection point. The announcement of scaling nuclear capacity from 8,180 MW to 100 GW by 2047, along with the proposed SHANTI Act (2025), signals a structural shift from a state-controlled model to a mixed public-private framework. This marks a departure from decades of institutional rigidity and reflects the urgency of achieving energy security and net-zero commitments amid rising electricity demand.

    Why is nuclear energy critical for India’s energy transition?

    1. Baseload Stability: Ensures continuous electricity supply unlike renewables dependent on weather conditions; nuclear contributed 57 TWh vs thermal 1,363 TWh (2024-25)
    2. Net-Zero Alignment: Supports decarbonisation as coal remains inconsistent with climate goals
    3. Energy Demand Surge: Requires >2000 GW capacity for Viksit Bharat; renewables alone insufficient
    4. Low Carbon Intensity: Emits significantly lower CO₂ compared to fossil fuels

    What structural changes are proposed under the SHANTI Act, 2025?

    1. Private Sector Participation: Enables private companies to build, own, and operate nuclear plants
    2. Regulatory Autonomy: Grants statutory status to Atomic Energy Regulatory Board (AERB) ensuring oversight independence
    3. Liability Reform: Replaces Civil Liability for Nuclear Damage Act (CLNDA) of 2010 to attract foreign and domestic investment
    4. Legal Overhaul: Repeals Atomic Energy Act 1962, marking a systemic shift

    What are the major constraints in scaling nuclear power?

    1. High Capital Costs: Example: 700 MW PHWR costs ~$2 million per MW
    2. Project Delays: Example: Fleet mode reactors approved in 2017 yet not operational
    3. Financing Challenges: Requires $200+ billion investment over two decades
    4. Regulatory Complexity: Issues in tariffs, insurance, fuel ownership, and waste management
    5. Public Opposition: Safety concerns and land acquisition challenges

    How does nuclear compare with renewables in India’s energy mix?

    1. Installed Capacity vs Output: Renewables ~50% capacity but only 22% generation
    2. Intermittency Issue: Solar and wind depend on time-of-day and climate variability
    3. Storage Limitation: Requires large investments in battery storage
    4. Baseload Advantage: Nuclear ensures stable supply unlike renewables

    What technological pathways are being explored?

    1. Pressurized Heavy-Water Reactor (PHWR) Expansion: Indigenous 220 MW PHWR (15 operational) scalable to 540 MW and 700 MW
    2. Small Modular Reactors (SMRs): Government allocated ₹20,000 crore for 5–200 MW designs by 2033
    3. Foreign Collaboration: Westinghouse, GE-Hitachi designs under consideration
    4. Advanced Fuels: Thorium with HALEU to leverage India’s reserves

    What is the three-front strategy for achieving 100 GW?

    1. Indigenisation: Reduces cost through domestic manufacturing (example: China’s $2 billion per MW benchmark)
    2. R&D Acceleration: Focus on SMRs and molten salt reactors
    3. Private Sector Integration: Enables financing and scaling through industry participation

    What role can private industry play in nuclear expansion?

    1. Captive Power Plants: Industries already operate 10-200 MW fossil-based plants (~90 GW capacity)
    2. Sectoral Demand: Steel, cement, data centres show interest in nuclear energy
    3. Economies of Scale: Modular construction reduces time from first pour to commissioning to ~40 months

    Conclusion

    India’s nuclear expansion marks a shift from state monopoly to a mixed ecosystem driven by reforms, private participation, and technological innovation. Achieving 100 GW by 2047 depends on aligning regulatory clarity, financial viability, and public trust while integrating nuclear energy into a broader low-carbon strategy.

  • CERC Delays Stricter Grid Rules for Wind and Solar Generators

    Why in the News?

    The Central Electricity Regulatory Commission (CERC) has delayed stricter grid stability rules for wind and solar generators by one year, giving renewable energy companies more time to adapt.

    About the Central Electricity Regulatory Commission (CERC)

    • Central Electricity Regulatory Commission, a key regulator of the power sector in India, is a statutory body functioning with quasi-judicial status under sec – 76 of the Electricity Act 2003.

    Key Decision

    • Stricter deviation norms postponed
    • Earlier implementation: April 2026
    • New implementation: April 2027

    What Are Deviation Norms

    • Power generators must: Declare electricity supply in advance
    • If actual generation differs:
      • Grid stability disturbed
      • Operators impose deviation charges (penalties)

    Why Renewable Energy Gets Relaxation

    • Wind and solar power:
      • Depend on weather
      • Hard to predict output
      • More variability
    • Hence: Relaxed deviation norms

    Deviation Limits 

    Deviation band = Allowed variation between scheduled power and actual generation without penalty.

    Solar & Hybrid Projects

    • Earlier: ±10%
    • Now: ±5%
      • Must generate closer to committed power
    • Example:
      • Scheduled 100 MW
      • Earlier allowed: 90 to 110 MW
      • Now allowed: 95 to 105 MW

    Wind Projects

    • Earlier: ±15%
    • Now: ±10%
    • Example:
      • Scheduled 100 MW
      • Earlier: 85 to 115 MW
      • Now: 90 to 110 MW
    [2018] With reference to solar power production in India, consider the following statements: 
    1 India is the third largest in the world in the manufacture of silicon wafers used in photovoltaic units. 
    2 The solar power tariffs are determined by the Solar Energy Corporation of India. 
    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

  • Great Nicobar Project: Tribal Relocation Plan Raises Concerns

    Why in the News

    A draft relocation plan for Nicobarese tribal communities linked to the ₹92,000 crore Great Nicobar Island (GNI) mega project has triggered fresh concerns and protests.

    Great Nicobar Infrastructure Project

    • Location: Great Nicobar Island
    • Project Cost: ₹92,000 crore
    • Objective:
      • Infrastructure development
      • Strategic maritime hub
      • Port and airport development

    Project is strategically important for:

    • Indo Pacific presence
    • Maritime trade routes
    • National security

    Tribes of Andaman & Nicobar 

    Major tribes:

    • Nicobarese
    • Shompen
    • Jarawa
    • Sentinelese
    • Onge
    • Great Andamanese
    [2014] Which one of the following pairs of islands is separated from each other by the ‘Ten Degree Channel’? (a) Andaman and Nicobar (b) Nicobar and Sumatra (c) Maldives and Lakshadweep (d) Sumatra and Java

  • Government Exempts Customs Duty on 40 Petrochemical Products

    Why in the News?

    The Government of India has exempted Customs Duty on 40 petrochemical products till June 30, 2026, to reduce supply disruptions and cost pressures caused by the West Asia conflict.

    Key Highlights

    • Customs duty exemption for 40 petrochemical products
    • Valid till: June 30, 2026
    • Notification issued: April 1, 2026
    • Objective: Ensure supply stability and reduce input costs

    Major Products Covered

    Important petrochemical items include:

    • Polypropylene
    • Polystyrene
    • Polyols
    • Polybutadiene
    • Styrene Butadiene
    • Anhydrous Ammonia
    • Purified Terephthalic Acid (PTA)
    • Mono Ethylene Glycol (MEG)
    [2018] Consider the following statements: 
    1 The quantity of imported edible oils is more than the domestic production of edible oils in the last five years. 
    2 The Government does not impose any customs duty on all the imported edible oils as a special case. 
    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

  • Manufacturing PMI Drops to 53.9 Amid West Asia Crisis

    Why in the News?

    India’s Manufacturing Purchasing Managers’ Index (PMI) fell sharply to 53.9 in March 2026, the lowest level in nearly 4 years, mainly due to West Asia conflict, rising costs, and weaker demand.

    Key Highlights

    • March 2026 PMI: 53.9
    • February 2026 PMI: 56.9
    • Lowest since: June 2022
    • Source: HSBC India Manufacturing PMI

    What is PMI

    Purchasing Managers’ Index (PMI) measures business activity based on:

    • New orders
    • Output
    • Employment
    • Supplier delivery times
    • Inventory levels

    PMI Interpretation

    • Above 50 → Expansion
    • Below 50 → Contraction
    • India’s PMI at 53.9 still indicates growth, but at slower pace.
    [2012] In India, in the overall Index of Industrial Production (IIP), the Indices of Eight Core Industries have a combined weight of 37.90%. Which of the following are among those Eight Core Industries? 
    1 Cement 
    2 Fertilizers 
    3 Natural 
    3 Gas 
    4 Refinery products 
    5 Textiles 
    Select the correct answer using the code given below: 
    (a) 1 and 5 only (b) 2, 3 and 4 only (c) 1, 2, 3 and 4 only (d) 1, 2, 3, 4 and 5

  • Why is India pushing piped gas now?

    Why in the News?

    India is accelerating the expansion of Piped Natural Gas (PNG) connections as part of its energy transition strategy. The push gains prominence because India already has ~33 crore LPG connections, yet domestic natural gas production alone can potentially cater to ~30 crore households if switched to PNG. This signals a possible large-scale substitution of LPG, a system historically dependent on imports and logistics-heavy distribution. 

    Why is India pushing for PNG expansion now?

    1. Import Dependence Reduction: LPG imports remain high; natural gas offers relatively diversified sourcing including domestic production.
    2. Domestic Resource Utilisation: Domestic gas production can cater to ~30 crore PNG connections.
    3. Infrastructure Push: Expansion of pipeline network by ~50,000 km alongside existing 25,000 km.
    4. Policy Mandates: New housing approvals require PNG connections; ~6 million LPG households expected to transition.
    5. Energy Transition Goals: Cleaner fuel shift aligned with lower emissions compared to LPG.

    How do Liquefied Petroleum Gas (LPG), Liquefied Natural Gas (LNG), Piped Natural Gas (PNG), and Compressed Natural Gas (CNG) differ structurally?

    1. LPG Composition: Derived from crude oil refining and natural gas processing; consists mainly of propane and butane. Stored as a liquid under moderate pressure in cylinders, making it portable but dependent on refining output and physical distribution networks.
    2. LNG Processing: Natural gas cooled to around –160°C to convert it into liquid form, reducing its volume by nearly 1000 times. Enables long-distance transportation via ships and storage in cryogenic tanks before regasification for use.
    3. CNG Use: Natural gas compressed to high pressure (200–250 kg/cm²) to reduce volume. Stored in cylindrical tanks and primarily used as an automobile fuel due to its efficiency and lower emissions.
    4. PNG Delivery: Natural gas (mainly methane) supplied directly through a network of pipelines to households, industries, and commercial establishments. Eliminates the need for storage cylinders and ensures uninterrupted supply.
    5. Key Structural Difference: LPG relies on cylinder-based, last-mile physical delivery, whereas PNG depends on fixed pipeline infrastructure for continuous supply; LNG and CNG act as transport and storage forms of natural gas enabling distribution across distances and sectors. 

    Can PNG replace LPG effectively in households?

    1. Energy Efficiency: PNG delivers marginally higher calorific value than LPG.
    2. Ease of Transition: Minimal changes in cooking equipment required.
    3. Cost Competitiveness: Comparable pricing makes PNG a viable substitute.
    4. Adoption Constraint: Awareness gaps and technical familiarity limit uptake.
    5. Conclusion: PNG is a functional drop-in replacement, but behavioural barriers persist.

    What structural constraints hinder PNG expansion?

    1. Pipeline Connectivity Gaps: Limited reach beyond urban clusters; Tier-2/3 cities under development.
    2. Last-Mile Challenges: ~90% households still not connected to trunk pipelines.
    3. Geographic Limitations: Network concentrated in western and southern India; uneven national coverage.
    4. Industrial Prioritisation: Pipelines aligned more for industrial demand than household use.
    5. Infrastructure Approval Delays: Land acquisition and regulatory approvals slow expansion.

    How is the government accelerating PNG adoption?

    1. Policy Mandates: PNG connections mandatory in new residential projects.
    2. City Gas Distribution (CGD): Licensing expansion to private entities for faster rollout.
    3. Pipeline Expansion Targets: Network planned to cater to 12 crore PNG connections by 2034-35.
    4. Institutional Framework: Petroleum and Natural Gas Regulatory Board (PNGRB) oversight.
    5. Integrated Energy Planning: Linking LNG terminals, pipelines, and city distribution networks.

    Will PNG reduce India’s energy import burden?

    1. Partial Substitution: LNG imports still required due to limited domestic production.
    2. Domestic Boost: ONGC projects increase in output (e.g., KG-DWN 98/2 basin).
    3. Supply Mix Diversification: Multiple LNG sourcing countries reduce single-source dependency.
    4. Infrastructure Dependency: Import benefits contingent on pipeline network efficiency.
    5. Conclusion: PNG reduces LPG import dependency but does not eliminate overall energy imports.

    What sectoral trade-offs emerge with PNG expansion?

    1. Fertiliser Sector: ~30% natural gas currently used; critical for urea production.
    2. Power Sector: ~13% allocation; ensures grid stability.
    3. Industrial Use: ~35% gas consumption in refineries and industries.
    4. Reallocation Challenge: Household consumption increase may require diversion from industrial sectors.
    5. Policy Implication: Balancing sectoral demand becomes critical. 

    Conclusion

    India’s push for PNG represents a systemic transformation in household energy consumption, driven by infrastructure expansion and import substitution goals. However, structural challenges such as pipeline connectivity, sectoral allocation, and domestic production constraints limit its immediate scalability. The success of PNG expansion depends on synchronized development of infrastructure, policy support, and demand-side adaptation.

    PYQ Relevance

    [UPSC 2018] Access to affordable, reliable, sustainable and modern energy is the sine qua non to achieve Sustainable Development Goals (SDGs). Comment on the progress made in India in this regard.

    Linkage: It highlights India’s transition towards cleaner fuels like PNG as part of ensuring affordable, reliable, and sustainable household energy access. It links directly to energy infrastructure expansion (CGD networks, pipelines) and reducing LPG import dependence within the SDG framework.

  • IRDAI Approves Ind AS Framework for Insurers From April 1, 2026

    Why in News

    The Insurance Regulatory and Development Authority of India (IRDAI) has approved Indian Accounting Standards (Ind AS) framework for insurers, effective April 1, 2026.

    What is Ind AS

    • Indian Accounting Standards (Ind AS):
    • Accounting rules for financial reporting
    • Based on International Financial Reporting Standards (IFRS)
    • Ensures:
      • Transparency
      • Comparability
      • Global alignment

    Who Will Follow Ind AS

    • Applicable to all insurers: Life insurance companies, General insurance companies, Standalone health insurers, and Reinsurers
    [2019] In India, which of the following review the independent regulators in sectors like telecommunications, insurance, electricity, etc.?
    1 Ad Hoc Committees set up by the Parliament 
    2 Parliamentary Department Related Standing Committees 
    3 Finance Commission 
    4 Financial Sector Legislative 
    5 Reforms Commission NITI Aayog 
    Select the correct answer using the code given below: 
    (a) 1 and 2 (b) 1, 3 and 4 (c) 3, 4 and 5 (d) 2 and 5

  • RBI Tightens Forex Rules, Bans Non Deliverable Rupee Contracts

    Why in the News?

    The Reserve Bank of India (RBI) has tightened foreign exchange rules and banned non deliverable rupee derivative contracts to curb speculation and stabilize the Indian rupee, which recently weakened amid West Asia conflict.

    What is Non Deliverable Derivative (NDF)

    • Non Deliverable Derivative:
      • Contract settled in cash
      • No actual currency exchange
      • Often used for speculation
    • Deliverable Derivative:
      • Actual currency exchange occurs
      • Used mainly for hedging

    Key RBI Decisions

    1. Ban on Non Deliverable Rupee Contracts

    • RBI directed Authorised Dealer (AD) banks to:
      • Stop non deliverable rupee derivative contracts
      • Applies to residents and non residents
    • Aim:
      • Reduce speculation
      • Increase transparency
      • Stabilize rupee

    2. Deliverable Contracts Allowed (With Conditions)

    Banks can offer: Deliverable forex derivatives

    But only if:

    • Used for genuine hedging purposes
    • Clients cannot hold opposite positions in non deliverable markets

    3. Documentation Requirement

    Authorised dealers can:

    • Ask for documents
    • Verify purpose of forex transactions
    • Ensure no speculative trading

    4. Ban on Rebooking of Contracts

    RBI also:

    • Prohibited rebooking of cancelled forex contracts
    • Applies to:
      • Deliverable contracts
      • Non deliverable contracts
    • Purpose: Prevent misuse and speculative loopholes

    5. Restrictions on Related Party Transactions

    • Banks cannot undertake forex derivatives with related parties
    • Definition based on: Ind AS 24 and IAS 24
    • What is Ind AS 24
      • Ind AS 24 is Indian Accounting Standard 24 that deals with Related Party Disclosures in financial statements.
      • Issued by: Ministry of Corporate Affairs and Based on International Accounting Standards
    • What is IAS 24
      • IAS 24 is International Accounting Standard 24 issued by:
      • International Accounting Standards Board (IASB)
    [2019] Which one of the following is not the most likely measure the Government/ RBI takes to stop the slide of Indian rupee? (a) Curbing imports of non-essential goods and promoting exports. (b) Encouraging Indian borrowers to issue rupee denominated Masala Bonds. (c) Easing conditions relating to external commercial borrowing. (d) Following an expansionary monetary policy.