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
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.
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.
The Reserve Bank of India (RBI) has extended export realisation timelines and credit facilities due to geopolitical tensions in West Asia and global supply chain disruptions affecting Indian exporters.
What is Export Realisation?
Export realisation refers to:
Receiving payment for exported goods/services
Exporters must bring foreign currency earnings back to India within RBI timeline
Export Realisation Timeline Extended
Earlier timeline: 9 months
Extended to: 15 months
Applies to:
Goods exports
Software exports
Services exports
This relaxation continues due to ongoing global disruptions.
Export Credit Period Extended
Export credit period: 450 days
Earlier validity: Up to March 31, 2026
Now extended to: June 30, 2026
Applies to: Pre-shipment credit and Post-shipment credit
[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.
India’s Index of Industrial Production IIP grew 5.2 percent in February 2026, driven mainly by manufacturing and capital goods sectors, indicating investment led industrial recovery.
What Is Index of Industrial Production IIP?
Index of Industrial Production
• Measures industrial activity in India • Released by Ministry of Statistics and Programme Implementation MOSPI • Covers three sectors: Manufacturing, Mining, and Electricity
What Are the Latest IIP Growth Numbers?
• February 2026 IIP Growth 5.2 percent • January 2026 Revised Growth 5.1 percent • January earlier estimate 4.8 percent
Which Sectors Drove Growth?
Manufacturing Sector
• Growth increased to 6 percent • Previous month 5.3 percent • February 2025 growth 2.8 percent • Key drivers: Basic metals, Automobiles, and Machinery
Capital Goods Sector
• Growth surged to 12.5 percent • Nine month high • Previous month 4.1 percent • Indicates Investment and Capex growth
[2012] In India, in the overall Index of Industrial Production, 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 4 Gas 5 Refinery products 6 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
India’s energy security concerns have changed due to tensions in West Asia. A surprising reality is that Liquefied Petroleum Gas (LPG) has become a bigger risk than Liquefied Natural Gas (LNG). Earlier, crude oil and LNG were seen as the main concerns. Now, India imports 60% of its LPG, and about 90% of it passes through the Strait of Hormuz, making it highly vulnerable to disruptions at this key route.
Why is LPG a greater energy security concern than LNG for India?
Import Dependence: LPG import dependence stands at 60%, compared to LNG at ~50%.
Chokepoint Risk: Nearly 90% of LPG imports pass through the Strait of Hormuz, compared to ~60% for LNG.
Effective Share: LPG contributes 54% to India’s total energy supply dependence, while LNG contributes ~30%.
Household Dependency: LPG is the primary cooking fuel, affecting millions of households directly.
Limited Substitutability: LNG has alternatives (PNG, industrial fuels), while LPG substitution is limited in rural areas.
How do LPG and LNG differ in terms of production, storage, and distribution?
Chemical Nature: LPG consists of propane and butane; LNG is methane-based natural gas.
Storage Mechanism: LPG is stored in cylinders under moderate pressure; LNG requires cryogenic storage at -160°C.
Transport Infrastructure: LPG is transported via cylinders and road networks, LNG requires pipelines and regasification terminals.
Distribution Reach: LPG reaches remote areas without pipelines; LNG requires pipeline connectivity.
Safety Concerns: LPG is heavier than air and prone to explosion risks; LNG disperses faster.
What structural vulnerabilities exist in India’s LPG ecosystem?
High Import Exposure: Domestic LPG production meets only 40% of demand.
Geographic Concentration: Heavy reliance on a single maritime route (Hormuz).
Household Dependence: LPG is used by crores of households, making disruptions socially sensitive.
Infrastructure Limitation: Lack of PNG penetration in rural and semi-urban regions
Storage Constraints: Limited buffer storage compared to crude oil reserves.
Why is LNG relatively less vulnerable despite similar import dependence?
Diversified Sources: LNG imports come from Qatar, USA, and others, reducing concentration risk.
Flexible Usage: LNG is used in power generation, industries, and transport, allowing demand adjustments.
Lower Household Dependence: LNG impacts industries more than households directly.
Strategic Buffering: LNG infrastructure allows storage in cryogenic tanks.
What is the government’s strategy to reduce LPG vulnerability?
Piped Natural Gas (PNG) Expansion: Promotes PNG to reduce LPG dependence.
PNG is a natural gas, primarily methane, transported through a network of underground pipelines directly to residential, commercial, and industrial consumers, providing a continuous, safe, and eco-friendly fuel alternative for cooking and heating.
It consists mainly of methane (CH4) and is considered a cleaner fuel.
PNG is lighter than air, meaning it disperses easily in the event of a leak, making it safer than LPG.
It is primarily used for domestic cooking, water heating, and in industrial settings like factories and restaurants.
Policy Push: Mandates PNG adoption in urban households.
Industrial Shift: Encourages industries to switch from LPG to LNG.
Supply Prioritization: Ensures LPG availability for households over commercial use.
Infrastructure Development: Expands pipeline networks and city gas distribution.
What are the broader implications of LPG vulnerability for India?
Energy Security Risk: High exposure to geopolitical disruptions.
Social Impact: Cooking fuel disruption affects welfare schemes like Ujjwala.
Strategic Weakness: Over-reliance on a single chokepoint reduces resilience.
Policy Urgency: Requires diversification and infrastructure expansion.
Conclusion
India’s energy security discourse must move beyond crude oil and LNG to address LPG vulnerabilities. Reducing import dependence, diversifying supply routes, and expanding PNG infrastructure are essential to ensure long-term resilience.
PYQ Relevance
[UPSC 2022] Do you think India will meet 50 percent of its energy needs from renewable energy by 2030? Justify.
Linkage: The PYQ tests India’s energy transition, sustainability goals, and long-term energy security strategy under GS3. LPG import vulnerability and dependence on the Strait of Hormuz highlight the urgency of reducing fossil fuel dependence and accelerating renewable energy adoption.
On March 17, 2026, the Ministry of Road Transport and Highways (MoRTH) implemented a new framework for the Multi-Lane Free Flow (MLFF) tolling system. These rules address unpaid user fees resulting from faulty FASTags or low balances, moving India closer to a barrierless (no boom barriers) highway experience.
Key Features of the New Toll Rules
Penalty Structure: If a toll is missed, the user is charged double the applicable fee.
72-Hour Grace Period: If the original fee is paid within 72 hours of the electronic notice (e-notice), the penalty is waived, and only the original amount is due.
Enforcement via VAHAN: If the fee remains unpaid after 15 days, the vehicle is flagged on the National Vehicle Registry (VAHAN). This leads to restrictions on vehicle-related services (like fitness certificates or ownership transfers) until dues are cleared.
Digital Integration: The system uses high-performance RFID readers and Automatic Number Plate Recognition (ANPR) cameras to record passages without requiring vehicles to stop.
[2022] Consider the following communication technologies: 1 Closed-circuit Television 2 Radio Frequency Identification Wireless 3 Local Area Network Which of the above are considered Short-Range devices/technologies? (a) 1 and 2 only (b) 2 and 3 only (c) 1 and 3 only (d) 1, 2 and 3
Gold prices, which usually rise during wars and crises, have instead fallen by about 15% to around $4,500 per ounce despite ongoing global tensions. This is unusual because gold is normally seen as a safe option in uncertain times. However, factors like high interest rates, a strong US dollar, investors booking profits, and changes in central bank strategies have pushed prices down. Even during conflicts like Iran tensions and the Ukraine war, demand for gold has weakened, showing a change in how global markets behave.
Why has gold behaved contrary to its safe-haven nature?
Safe-haven paradox: Gold prices fell despite geopolitical tensions like Iran conflict and Ukraine war, unlike past trends (e.g., 2022 surge during Russia-Ukraine war).
Historical contrast: Earlier crises saw initial price rise followed by decline, but current fall is sharper and earlier.
Market sentiment shift: Investors prefer liquidity and alternative assets, reducing gold’s traditional appeal.
How have interest rates and monetary policy impacted gold prices?
High interest rates: US Fed maintaining 3.5-3.75% rates reduces attractiveness of non-yielding assets like gold.
Opportunity cost: Rising yields (e.g., US 10-year bond yield ~4.05% to 4.33%) shift investments toward bonds.
Delayed rate cuts: Only 8% probability of rate cut earlier, later expectations, sustaining downward pressure.
What role has the US dollar and global financial flows played?
Strong US dollar: Dollar appreciation reduces gold demand globally as gold becomes expensive in other currencies.
Capital flight to USD assets: Investors prefer US treasury securities, increasing dollar strength.
Exchange rate effect: Strengthened dollar index directly correlates with fall in commodity prices including gold.
How have central banks and institutional investors influenced demand?
Central bank diversification: Post-Ukraine war, central banks reduced dependence on USD but later shifted strategy, weakening gold demand.
Record purchases earlier: Central banks bought ~2,000 tonnes in 2024, but momentum slowed.
What explains the ‘FOMO effect’ and retail investor behaviour?
Retail surge: Late 2024-25 saw retail investors rushing to gold fearing price rise.
Profit booking: Subsequent fall triggered mass selling to secure gains, accelerating decline.
Psychological factors: Fear-driven entry followed by panic exit, amplifying volatility.
How has inflation and energy crisis interacted with gold prices?
Energy shock: Iran conflict disrupted Strait of Hormuz (20% global oil flow), raising energy prices.
Inflation expectations: Higher energy prices lead to inflation which further leads to interest rate tightening, indirectly hurting gold.
Inflation paradox: Gold failed to act as an inflation hedge due to strong monetary tightening.
What is the significance of recent economic indicators?
Purchasing Managers’ Index (PMI) decline: S&P Global PMI indicates sharp contraction in manufacturing and services, reducing demand.
Global slowdown signals: Weak demand from EU and India, impacting industrial gold usage.
Data lag: Inflation data lagging ; markets reacting to forward-looking indicators instead of current data.
Conclusion
The decline in gold prices reflects a structural shift in global financial behaviour, where monetary policy, strong dollar, and investor psychology outweigh traditional safe-haven dynamics. It signals evolving market priorities and reduced reliance on conventional hedges.
PYQ Relevance
[UPSC 2018] How would the recent phenomena of protectionism and currency manipulations in world trade affect macroeconomic stability of India?
Linkage: This PYQ is relevant as the article highlights how strong US dollar and global capital shifts (currency dynamics) affect gold prices, similar to currency manipulation impacts on macroeconomic stability. It also reflects how global economic policies and trade conditions influence domestic financial markets and investor behaviour.
India’s 10-year government bond yield has risen to 6.94%, increasing by 26 basis points in one month. This is due to rising inflation fears, high crude oil prices (above $100/barrel), and expectations of RBI increasing interest rates. The rise marks a shift from earlier low yields and shows that markets expect higher interest rates, continued inflation, and fiscal pressure, with yields possibly crossing 7%, an important psychological level.
What is Bond Yield?
Bond Yield: Return earned on a bond investment; reflects the effective interest rate received by the investor.
Government Bond Yield: Benchmark indicator of economy-wide interest rates and inflation expectations (e.g., India’s 10-year G-Sec yield at 6.94%).
Inverse Relationship: Bond prices and yields move in opposite directions; falling prices increase yields.
Why are bond yields rising sharply in India and globally?
Wage-Price Spiral Risk: Persistent inflation may lead to higher wages and further inflation.
What is the global dimension of rising bond yields?
US Federal Reserve Policy: Rates at 3.50-3.75% reflect tight monetary stance.
Synchronized Tightening: Major economies facing inflation are raising rates simultaneously.
Capital Flow Volatility: Higher US yields may trigger capital outflows from emerging markets like India.
Conclusion
The sharp rise in bond yields reflects inflationary pressures, global monetary tightening, and fiscal vulnerabilities, signalling a challenging macroeconomic environment. Sustained crude price volatility and currency weakness may further complicate RBI’s balancing of growth and inflation objectives.
Value Addition
What are the Types of Bond Yields?Coupon Yield: Fixed annual interest paid as a percentage of face value.Current Yield: Annual coupon divided by market price of the bond.Yield to Maturity (YTM): Total return if bond is held till maturity; includes coupon + capital gain/loss.Real Yield: Nominal yield minus inflation rate; reflects actual purchasing power.What is the Yield Curve?Definition: Graph showing relationship between bond yields and maturities.Normal Curve: Long-term yields > short-term yields – indicates growth expectations.Inverted Curve: Short-term yields > long-term yields – signals possible recession.What is Monetary Tightening?Definition: Policy action to reduce inflation by increasing interest rates.Tools: Repo rate hike, CRR increase, liquidity withdrawal
PYQ Relevance
[UPSC 2024] What are the causes of persistent high food inflation in India? Comment on the effectiveness of the monetary policy of the RBI to control this type of inflation.
Linkage: Rising bond yields reflect market expectations of persistent inflation and possible RBI tightening, directly linking to causes of inflation and policy response. It highlights limits of monetary policy in controlling supply-side inflation (like food, oil), as asked in the PYQ.
The Union Government reduced Special Additional Excise Duty (SAED) on petrol and diesel by ₹10 per litre each. However, fuel prices at petrol pumps remained unchanged because the benefit was not passed on to consumers.
Why Did Fuel Prices Not Decrease Despite Excise Duty Cut?
• Government reduced Special Additional Excise Duty (SAED) • Diesel duty reduced to Zero • Petrol duty reduced to ₹3 per litre • Oil Marketing Companies (OMCs) absorbed benefit instead of consumers • Objective was to reduce losses faced by OMCs • Government clarified cut not meant to lower retail prices
Why Are Oil Marketing Companies Facing Losses?
• Global crude oil prices surged above $111 per barrel • Public sector OMCs selling fuel below cost • Under recovery around ₹24 per litre petrol • Under recovery around ₹30 per litre diesel • Total losses around ₹2,400 crore per day
Why Did Government Increase Export Duties?
• Export duty on diesel increased to ₹21.5 per litre • Export duty on ATF increased to ₹29.5 per litre • Expected additional revenue ₹1,500 crore • Helps offset fiscal loss from excise duty cut
What Is the Fiscal Impact of the Decision?
• Excise duty cut cost around ₹7,000 crore • Export duty increase adds ₹1,500 crore • Net revenue loss around ₹5,500 crore per 15 days • Review every fortnight by government
What Other Measures Were Announced?
• Commercial LPG allocation increased by 20% • Total LPG allocation raised to 70% of pre crisis levels • Priority sectors where Piped Natural Gas (PNG) unavailable
[2025] Suppose the revenue expenditure is ₹80,000 crores and the revenue receipts of the Government are ₹60,000 crores. The Government budget also shows borrowings of ₹10,000 crores and interest payments of ₹6,000 crores. Which of the following statements are correct? I Revenue deficit is ₹20,000 crores. II Fiscal deficit is ₹10,000 crores. III Primary deficit is ₹4,000 crores. Select the correct answer using the code given below: (a) I and II only (b) II and III only (c) I and III only (d) I, II and III
India recorded highest electricity demand in five years during January February 2026, driven by unusual winter weather patterns, cold spells and early heat conditions.
Key Data
January 2026
• Electricity demand: 143 Billion Units • January 2025: 136 Billion Units • Peak demand: 245.4 GW • January 2022 peak: 193 GW • Five year increase: Nearly 28 percent
February 2026
• Electricity demand: 133 Billion Units • Peak demand: 244 GW • Highest February demand in five years • Nearly equal to summer demand
Long Term Trend
• January demand increased 28 percent since 2022 • February demand increased 23 percent since 2022 • Peak load increased 26 to 27 percent • Indicates structural growth in electricity demand
[2025] Consider the following statements: 1 Carbon dioxide (CO 2 ) emissions in India are less than 0.5 t CO 2 /capita. 2 In terms of CO 2 emissions from fuel combustion, India ranks second in Asia-Pacific region. 3 Electricity and heat producers are the largest sources of CO 2 emissions in India. Which of the statements given above is/are correct? (a) 1 and 3 only (b) 2 only (c) 2 and 3 only (d) 1, 2 and 3