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Subject: Economics

  • Port economy will drive India’s growth: PM

    Why in the News?

    Prime Minister Narendra Modi said on Friday that coastal states and port cities will play a major role in India’s growth as it becomes more developed. He was speaking after the launch of the ₹8,800 crore Vizhinjam International Deepwater Multipurpose Seaport in Kerala’s capital.

    What is the significance of the Vizhinjam International Deepwater Multipurpose Seaport for India’s maritime trade?

    • Strategic Global Location: Located close to the international East-West shipping route, making it ideal for global container traffic. Eg: Ships passing through the Suez Canal–Malacca route can now directly dock at Vizhinjam without diversion, saving cost and time.
    • India’s First Dedicated Transshipment Port: Will handle transshipment of containers that earlier went to foreign ports like Colombo (Sri Lanka), Dubai, or Singapore. Eg: Around 75% of India’s transshipped cargo is currently handled abroad; Vizhinjam aims to reverse this trend and retain revenue domestically.
    • Natural Deep Draft for Large Vessels: With a natural draft of nearly 20 metres, it can host Ultra Large Container Vessels (ULCVs) without the need for expensive dredging. Eg: Ports like Colombo or Rotterdam require regular dredging, while Vizhinjam offers cost-effective long-term operations.
    • Boost to Logistics and Trade Efficiency: Reduces logistics costs, cargo handling time, and dependence on intermediate ports, increasing India’s ease of doing business. Eg: Indian exporters from hinterland states can now ship directly via Vizhinjam, avoiding time-consuming rerouting through foreign ports.
    • Economic Multiplier Effect and Self-Reliance: Encourages Make in India, builds maritime self-reliance, and fuels coastal economy development. Eg: Encourages investments in warehousing, ship repair, and allied services around the port zone—generating local employment and GDP growth.

    Why is private sector participation considered crucial in developing port infrastructure in India?

    • Mobilization of Capital and Faster Project Execution: The private sector brings in large-scale investments that the government alone may not be able to allocate promptly. Eg: The ₹8,800 crore Vizhinjam Port was developed through a public-private partnership (PPP) with Adani Ports, accelerating infrastructure delivery.
    • Technological Innovation and Operational Efficiency: Private companies often introduce modern technologies and international best practices, improving service quality and turnaround time. Eg: Mundra Port, operated by Adani Ports, has emerged as one of India’s most efficient ports due to automation and smart logistics.
    • Risk Sharing and Long-Term Sustainability: PPP models allow for shared risks between the public and private sectors, reducing the financial burden on the government and ensuring long-term commitment. Eg: The collaboration between Kerala’s state government and Adani Group in Vizhinjam port demonstrates how risk-sharing enables execution even in ideologically diverse environments.

    Where is the new shipbuilding and repair cluster being set up?

    • Strategic Location in Kochi, Kerala: Kochi has been selected for its existing maritime infrastructure and strategic coastal position. The cluster aims to enhance India’s shipbuilding and repair capabilities, reducing reliance on foreign facilities. Eg: The cluster is being developed through a collaboration between Cochin Shipyard Limited and Drydocks World, aiming to create world-class ship repair facilities in Kochi.
    • Public-Private Partnerships Driving Development: The project leverages public-private partnerships to combine government support with private sector efficiency and investment. This approach is expected to bring in advanced technologies and best practices. Eg: Cochin Shipyard Limited, a government-owned entity, has signed an MoU with Drydocks World to jointly develop the ship repair cluster in Kochi.
    • Economic Growth and Employment Opportunities: The cluster is anticipated to generate substantial employment, particularly benefiting the local population in Kerala. It will also contribute to the growth of ancillary industries and services. Eg: The establishment of the shipbuilding and repair cluster in Kochi is expected to create numerous new employment opportunities, providing Kerala’s local talent and youth with a platform for growth.

    What opportunities is it expected to create?

    • Job Creation and Skill Development: The new shipbuilding and repair cluster in Kochi is expected to create thousands of direct and indirect jobs, particularly benefiting the local population by providing employment opportunities in shipbuilding, repair, and ancillary services.  
    • Boost to India’s Maritime and Manufacturing Sectors: The cluster will significantly enhance India’s shipbuilding capabilities, reducing dependence on foreign facilities and positioning India as a key player in global shipbuilding and repair.  

    Way forward: 

    • Strengthen Port Connectivity and Infrastructure: Enhance hinterland connectivity to ensure seamless movement of goods between ports and key industrial zones. Eg: Develop efficient road, rail, and inland waterways to complement the Vizhinjam Port and Kochi shipbuilding cluster.
    • Focus on Skill Development and Innovation: Invest in specialized maritime education and training programs to create a skilled workforce. Eg: Collaborate with global institutions to bring advanced shipbuilding technologies and best practices to India, fostering innovation and sustainability in the maritime sector.

    Mains PYQ:

    [UPSC 2021] “Investment in infrastructure is essential for more rapid and inclusive economic growth.”Discuss in the light of India’s experience.

    Linkage: Coastal states and port cities will be key growth centres and that strengthening the maritime sector through infrastructure is essential for driving economic power and achieving the full potential of the port economy. Thus, this question aligns with the core idea that ports, as critical infrastructure, are drivers of growth.

  • PM inaugurates Vizhinjam Port

    Why in the News?

    Prime Minister has formally commissioned India’s first deep-sea transshipment port at Vizhinjam in Kerala.

    About Vizhinjam Port

    • Vizhinjam Port is India’s first deep-sea transshipment port located near Thiruvananthapuram.
    • Developed under a Public-Private Partnership (PPP) model, the port cost ₹8,900 crore to build.
    • It is operated by Adani Vizhinjam Port Pvt. Ltd., with a 61.5% stake held by Kerala’s government and 9.6% by the Central government.
    • Commercial operations began in December 2024, following a trial run in July 2024.
    • The port has handled 285 ships and processed 5.48 lakh TEUs since its operational launch.
    • Positioned just 10 nautical miles from a major international shipping route, it provides quick access to global trade lanes.

    Notable Features of the Port:

    • It is India’s first semi-automated port, utilizing AI-powered control rooms and the Indigenous Vessel Traffic Management System (VTMS).
    • Its deep natural draft (up to 24 meters) allows it to accommodate Ultra Large Container Vessels (ULCVs).
    • The current infrastructure includes a 3,000-meter breakwater and an 800-meter container berth, with full capacity expected by 2028–29 at 6.2 million TEUs annually.
    • The port is designed as a multi-purpose, green port, ensuring year-round operations.
    • Positioned 20 kilometers from Trivandrum International Airport, it offers seamless air-sea connectivity.
    [UPSC 2023] Consider the following pairs:

    Port—–Well known as

    1. Kamarajar Port—-First major port in India registered as a company

    2. Mundra Port—–Largest privately owned port in India

    3. Visakhapatnam—-Largest container port in India

    Options: (a) Only one pair  (b) Only two pairs*  (c) All three pairs  (d) None of the pairs

     

  • Centre hikes Fair and Remunerative Price (FRP) of Sugarcane for 2025-26

    Why in the News?

    The Cabinet Committee on Economic Affairs has approved an increase in the Fair and Remunerative Price (FRP) of sugarcane for the 2025-26 sugar season, raising it from ₹340 per quintal to ₹355 per quintal.

    About Fair and Remunerative Price (FRP):

    • The FRP for sugarcane is set under the Sugarcane Control Order, 1966.
    • It replaced the Statutory Minimum Price (SMP) in 2009-10 to better align with economic conditions and improve farmers’ welfare.
    • It represents the minimum price sugar mills must pay to farmers for sugarcane.
    • It is determined by the central government based on Commission for Agricultural Costs and Prices (CACP) recommendations, with discussions involving state authorities and sugar industry associations.
    • Factors Influencing FRP:
      1. Cost of production: ₹173 per quintal for 2025-26.
      2. Return from alternative crops: Comparison of potential earnings from other crops.
      3. Consumer sugar prices: Affects sugar production costs.
      4. Sale price of sugar: Influences the FRP.
      5. Sugarcane-to-sugar recovery rate: Efficiency of conversion.
      6. Income from by-products: Including molasses and bagasse.
      7. Profit margins for farmers: Ensures financial viability.
    • State Agreed Price (SAP): States can set SAP, often higher than the FRP, based on local conditions.
    • Minimum Selling Price (MSP) for sugar was introduced in 2018 to protect farmers, including FRP and conversion costs.

    Sugarcane Cultivation in India:

    • Sugarcane is India’s highest production-value crop, key for producing sugar, jaggery, and khan sari.
    • Major states: Uttar Pradesh (contributes 50% of total production), Maharashtra, Karnataka, Tamil Nadu, and Andhra Pradesh.  
    • Sugarcane thrives in a tropical climate (21°C – 27°C), with 75cm-150cm rainfall. It needs well-drained soil and a cool, dry winter for ripening.
    • India has the largest global sugarcane cultivation area after Brazil.
    • The ratooning method reduces costs by allowing a second crop from the same roots.
    [UPSC 2015] The Fair and Remunerative Price (FRP) of sugarcane is approved by the:

    Options: (a) Cabinet Committee on Economic Affairs* (b) Commission for Agricultural Costs and Prices (c) Directorate of Marketing and Inspection, Ministry of Agriculture (d) Agricultural Produce Market Committee

     

  • Growth pangs: On industrial activity

    Why in the News?

    India’s average Index of Industrial Production (IIP) for fiscal year 2025 has dropped to 4%, the lowest level in the past four years, showing a clear slowdown in industrial growth.

    What are the main factors contributing to the slowdown in India’s Index of Industrial Production (IIP) in FY25?

    • Global Economic Uncertainty: The global economic outlook remains uncertain, affecting India’s external trade and exports. This slowdown in global demand impacts industrial growth. Eg: India’s goods exports grew at a slower pace in FY25, which strains industrial output as global demand weakens.
    • Lower Domestic Consumption Demand: Slower-than-expected growth in domestic consumption has affected industries that rely on the domestic market, such as consumer goods and durable products. Eg: Consumer non-durables showed a negative growth of -1.6% in FY25, reflecting weak demand despite a fall in retail inflation.
    • Reduced Private Capital Expenditure (Capex): A decline in private sector investment (capital expenditure) impacts industrial growth, especially in infrastructure and manufacturing. Eg: The dip in capex lending rates, though lower, did not spark sufficient investment, reflecting cautious private sector sentiment in an uncertain economic environment.
    • Decline in Key Industrial Sectors: Sectors like mining, manufacturing, and electricity witnessed slower growth in FY25 compared to FY24, contributing to the overall slowdown in industrial production. Eg: Mining’s growth plummeted from 7.5% in FY24 to 2.9% in FY25, and manufacturing also saw a decline, affecting overall industrial output.
    • Weak Goods Exports: India’s goods exports, particularly in the MSME sector, showed limited growth due to strained trade relations, especially with major trading partners like the United States. Eg: The flat growth in FY25’s goods exports, especially from MSMEs, highlights the challenges faced by small businesses and the manufacturing sector in expanding their global market share.

    Why has rural consumption remained strained despite a drop in retail inflation?

    • Lingering Effects of High Food Inflation: Although retail inflation dropped, the high food inflation experienced in the last fiscal year (October to December) continues to affect rural households, leaving them with reduced disposable income. Eg: In FY24, the spike in food prices, particularly for essential items like pulses and vegetables, strained rural budgets, and recovery from this shock has been slow.
    • Reduced Farm Incomes: Despite lower retail inflation, farm incomes have been negatively impacted by factors like erratic weather, reduced crop yields, and rising input costs, which affects rural consumption. Eg: Poor monsoon and drought in some regions led to crop failures, reducing farmers’ incomes and limiting their purchasing power.
    • Limited Impact of Inflation Reduction: While overall retail inflation decreased, the price drops were not significant enough in rural areas to translate into meaningful gains in consumption, especially for low-income families. Eg: The fall in vegetable prices towards the end of FY25 helped urban consumers, but rural households still struggled due to stagnant or low farm output and income.
    • Structural Economic Challenges: Rural India still faces structural challenges like inadequate infrastructure, low wages, and high dependence on agriculture, which limits overall consumption despite lower inflation. Eg: Many rural households rely on agriculture, which remains vulnerable to climate change and market volatility, restricting their ability to consume more even when prices drop.

    How has the performance of different industrial sectors (like mining, manufacturing, and electricity) changed in FY25 compared to FY24?

    Sector FY24 Growth (%) FY25 Growth (%) Conclusion with example
    Mining 7.5% 2.9% Mining sector saw a significant decline. This slowdown could be due to reduced demand for raw materials and lower production in key mining areas. Eg: A dip in coal mining output due to lower power demand during certain months.
    Manufacturing 5.5% 4% Manufacturing growth slowed down slightly, likely due to lower consumer demand and sluggish export growth. Eg: Lower production in sectors like automobiles and textiles, impacted by weaker global demand.
    Electricity 7% 5.1% Electricity sector growth showed a slight decline, though power production still surged during peak summer months. Eg: Increased power generation in March (6.3%) due to seasonal demand, but overall growth reduced for the year.

    What steps can the government take to boost private investment and protect MSME jobs?

    • Enhance Domestic Demand through Targeted Public Spending: The government can invest in rural infrastructure, housing, and public services to stimulate consumption, which in turn will encourage private sector production and investment. Eg: Increased spending under schemes like PM Awas Yojana or rural roads (PMGSY) can boost demand for cement, steel, and consumer goods produced by MSMEs.
    • Strengthen Trade and Market Access for MSMEs: By finalizing beneficial trade agreements and easing export procedures, the government can open more markets for MSMEs. Eg: Concluding a bilateral trade deal with the US could reduce tariffs and give India’s 60 million MSMEs better access to one of the world’s largest markets.
    • Expand Credit Support and Reduce Compliance Burden: Provide low-interest loans and simplify regulatory procedures to ease doing business for small enterprises. Eg: Extending the Emergency Credit Line Guarantee Scheme (ECLGS) and digitizing compliance through platforms like Udyam Assist can help micro-industries scale up with less red tape.

    Way forward: 

    • Stimulate Demand and Investment: Boost domestic consumption through targeted rural and infrastructure spending while incentivizing private capital expenditure with tax benefits and interest subvention.
    • Empower MSMEs for Global Competitiveness: Strengthen MSME access to credit, simplify compliance, and finalize trade deals to expand their global market footprint and protect employment.

    Mains PYQ:

    [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: High food prices, mentioned in the article, are putting pressure on rural spending and slowing down the economy.

  • High temperatures and mango production

    Why in the News?

    There has been a decrease in mango harvests. Mangoes don’t taste as sweet as before. They are also getting more expensive. Mangoes are arriving in the market too early. Mango pickles aren’t lasting the whole year. The mango trees are flowering earlier than usual. These are some of the common concerns people have been talking about regarding mangoes in India recently.

    What are the observed effects of rising temperatures on mango production and quality in India?

    • Early Flowering and Fruiting: Rising temperatures cause mango trees to flower earlier than usual, disrupting natural growth cycles. Eg: Farmers report mangoes arriving too early in the market, affecting planned harvest timelines and market dynamics.
    • Reduced Sweetness and Shelf Life: Heat stress can reduce sugar accumulation in fruits, making them less sweet, and also affect pickle shelf life. Eg: Anecdotal reports mention that mango pickles don’t last through the year and mangoes don’t taste as sweet.
    • Fruit Drop and Uneven Ripening: High temperatures lead to premature fruit drop and uneven ripening, lowering fruit quality. Eg: In varieties like Alphonso, issues like spongy tissue disorder are increasingly observed.
    • Sun Scalding and Physical Damage: Intense heat can cause sunburn-like damage on mango skins, reducing market value. Eg: Farmers note sun scalding of mangoes during heatwaves, making them less visually appealing.
    • Disruption of Pollination and Budding Cycles: Extreme weather events (dry spells, heavy rains, hail) disrupt budding, pollination, and fruit setting. Eg: Farmers report fluctuating weather is altering the timing of flowering, which negatively impacts yield consistency.

    Why is there a contrast between anecdotal reports and official productivity data regarding mango yields?

    • Regional Variations in Climate Impact: While official productivity data presents a national average, anecdotal reports come from specific regions that may have experienced harsher climate conditions. Eg: A farmer in Uttar Pradesh may experience fruit drop due to untimely rains, whereas other regions may report normal or high yields, balancing the national figures.
    • Difference in Measuring Parameters: Official data focuses on total output in tonnes per hectare, whereas farmers often talk about quality—taste, sweetness, shelf life, or physical appearance. Eg: Mangoes may appear in large quantities, but may not taste sweet or store well, leading to dissatisfaction among consumers and producers alike.
    • Time Lag in Reporting: Anecdotal reports are immediate and reflect real-time experiences during flowering or harvesting, while official data is compiled and released after the season. Eg: Farmers might report poor flowering due to early summer heat, but yield data may still show good figures after accounting for recovery measures.
    • Improved Farming Practices Masking Stress: Advancements like drip irrigation, better grafting, and fertilizers may help maintain or even boost yields despite climate-related stress. Eg: A farmer using hybrid varieties may achieve good productivity even during erratic weather, skewing overall data upward.
    • Sampling and Data Limitations: Official data often relies on sampling or estimates that may not fully capture smaller orchards or severely affected areas. Eg: Small-scale mango growers hit by hailstorms might not be reflected in state-level yield reports that depend on broad sampling zones.

    What does research suggest about the resilience and adaptability of mango trees in the face of global warming?

    • High Genetic Diversity Enables Adaptation: Mango trees exhibit significant genetic variation across different cultivars, which enhances their capacity to survive under changing climatic conditions. Eg: Varieties like Dasheri and Banganapalli show better resilience to heat stress compared to others like Alphonso.
    • Physiological Mechanisms Support Stress Tolerance: Mango trees possess physiological traits—such as deep root systems and efficient water usage—that help them cope with drought and high temperatures. Eg: In regions like Telangana, mango trees withstand prolonged dry spells better than other fruit crops.
    • Compatibility with Heat and Drought Conditions: Mangoes can thrive in tropical climates with long dry seasons, making them naturally suited to certain aspects of climate change. Eg: Research from Egypt and India shows mango cultivation persists even as rainfall becomes erratic.
    • Potential for Climate-Resilient Breeding: The genetic resources available in mangoes make them a strong candidate for breeding programs to develop climate-resilient varieties. Eg: Scientists are working on cross-breeding varieties that combine drought tolerance with disease resistance.
    • Long Lifespan and Adaptive Growth Patterns: As perennial trees, mango plants can adjust flowering and fruiting cycles over time in response to climatic shifts. Eg: In some regions, trees are now flowering earlier, and though it affects timing, it shows their capacity to adapt development stages.

    What are the steps taken by the Indian government? 

    • Promotion of Climate-Resilient Agricultural Practices: The Indian government promotes the adoption of climate-smart agricultural practices through schemes like the National Mission on Sustainable Agriculture (NMSA). This includes water-efficient irrigation methods like drip irrigation and rainwater harvesting, which help mango farmers cope with erratic weather and water scarcity.
    • Support for Agro-Weather Advisory and Early Warning Systems: The Indian government has implemented agro-weather advisory services through the Indian Meteorological Department (IMD) and state-level agricultural departments.
    • Research and Development for Climate-Resilient Varieties: The government supports research through agencies like the Indian Council of Agricultural Research (ICAR) to develop heat-resistant and drought-tolerant mango varieties.

    Way forward: 

    • Develop Climate-Resilient Mango Varieties: Focus on breeding heat-resistant and drought-tolerant mango varieties to ensure consistent yield and quality under changing climate conditions.
    • Promote Climate-Smart Agricultural Practices: Expand the use of efficient irrigation systems, water conservation techniques, and post-harvest infrastructure to improve resilience and reduce losses.

    Mains PYQ:

    [UPSC 2023] Discuss the consequences of climate change on the food security in tropical countries.

    Linkage: The anecdotal observations about mangoes to higher temperatures and climate change. Mangoes are a tropical crop, and changes in their productivity and characteristics due to rising temperatures are a direct consequence of climate change potentially impacting food security in tropical regions like India.

  • CSR Spending in India

    Why in the News?

    In 2023-24, India’s listed companies spent Rs 17,967 crore on Corporate Social Responsibility (CSR), 16% higher than Rs 15,524 crore in 2022-23.

    As per the PRIME Database report, this increase was due to an 18% rise in the companies’ net profits.

    CSR Spending in India

    About Corporate Social Responsibility (CSR) and Obligations Under It

    • CSR is a self-regulating business model through which companies become socially accountable to themselves, stakeholders, and the public.
    • It includes initiatives that assess and take responsibility for the company’s social and environmental impact.
    • India is the first country to mandate CSR spending w.e.f. April 1, 2014, through Section 135 of the Companies Act, 2013.
    • It provides a structured framework for CSR activities.
    • CSR provisions apply to companies that, in the preceding financial year, have:
      • Net worth ≥ ₹500 crore, or
      • Turnover ≥ ₹1,000 crore, or
      • Net profit ≥ ₹5 crore
    • CSR Spending Obligation:
      • Companies must spend at least 2% of their average net profits of the last 3 financial years on CSR.
      • Newly incorporated companies should calculate it based on profits of previous years.
    • Eligible CSR Activities:
      1. Eradicating hunger and poverty
      2. Promoting education, gender equality
      3. Combating diseases (e.g., HIV/AIDS)
      4. Environmental sustainability
      5. Contributions to relief funds (e.g., PM CARES, PM Relief Fund)
      6. Welfare of disadvantaged groups
    • If CSR spend > ₹50 lakh, companies must constitute a CSR committee with at least three board members, one being independent.
    [UPSC 2024] Consider the following statements with reference to Corporate Social Responsibility (CSR) rules in India:

    1. CSR rules specify that expenditures that benefit the company directly or its employees will not be considered as CSR activities.

    2. CSR rules do not specify minimum spending on CSR activities.

    Which of the statements given above is/are correct?

    Options: (a) 1 only* (b) 2 only (c) Both 1 and 2 (d) Neither 1 or 2

     

  • Bio-Input Resource Centres (BRCs) to Promote Natural Farming

    Why in the News?

    The Union Ministry of Agriculture and Farmers’ Welfare has come up with the guidelines for setting up of bio-input resource centres (BRC) under the National Mission on Natural Farming (NMNF).

    What are Bio-Input Resource Centres (BRCs)?

    • BRCs are part of the National Mission on Natural Farming (NMNF), aimed at promoting chemical-free and sustainable agriculture.
    • BRCs will produce, store, and supply bio-inputs like Jeevamrit, Beejamrit, and Neemastra using local livestock by-products and plant-based materials.
    • Key Functions:
      1. Local Production: Ensures availability of bio-fertilizers and bio-pesticides, reducing dependency on synthetic inputs.
      2. Training: Provides training on bio-input preparation and natural farming techniques.
      3. Entrepreneurship: Promotes local entrepreneurship, empowering self-help groups (SHGs) and farmers.
      4. Affordability: Aims to make sustainable farming practices accessible to small and marginal farmers.
    • Financial support of Rs 1 lakh per BRC are provided in two tranches of Rs 50,000, though experts raise concerns about its adequacy for infrastructure.

    Back2Basics: National Mission on Natural Farming (NMNF):

    • NMNF is a Centrally Sponsored Scheme was launched on November 2024 under the Ministry of Agriculture & Farmers’ Welfare, promoting chemical-free farming.
    • Objectives:
      • Focus on eco-friendly practices and organic methods.
      • Reduce input costs by minimizing chemical usage.
      • Restore soil health, promote biodiversity, and improve climate resilience.
    • Implementation Strategy:
      • Establish 15,000 clusters across Gram Panchayats.
      • Train 1 crore farmers and implement practices on 7.5 lakh hectares.
      • Establish 10,000 BRCs for bio-input accessibility.
      • Deploy 30,000 Krishi Sakhis for mobilization.
    • Financial Outlay: ₹2,481 crore until 2025-26.
    [UPSC 2021] How is permaculture farming different from conventional chemical farming?

    1.Permaculture farming discourages monocultural practices, but in conventional chemical farming, monoculture practices are predominant. 2.Conventional chemical farming can cause an increase in soil salinity, but this phenomenon is not observed in permaculture farming. 3.Conventional chemical farming is easily possible in semi-arid regions, but permaculture farming is not so easily possible in such regions. 4.The practice of mulching is very important in permaculture farming but not necessarily so in conventional chemical farming.

    Select the correct answer using the code given below:

    Options: (a) 1 and 3  (b) 1, 2, and 4* (c) 4 only (d) 2 and 3

     

  • RBI Launches ‘.bank.in’ Domain to Combat Digital Payment Frauds

    Why in the News?

    To tackle the increasing number of digital payment frauds, the Reserve Bank of India (RBI) has introduced the exclusive ‘.bank.in’ domain for Indian banks.

    About the ‘.bank.in’ Domain

    • The ‘.bank.in’ domain was introduced in February 2025 to provide Indian banks with a unique online address, reducing the risk of fraudulent websites mimicking bank domains.
    • It will be operationalised by the Institute for Development and Research in Banking Technology (IDRBT), under National Internet Exchange of India (NIXI) oversight.
    • The ‘.in’ Code Top-Level Domain (ccTLD) is India’s national identifier on the internet.
    • This domain adds an extra layer of trust, distinguishing legitimate banks from fraudulent entities.
    • The IDRBT, operating under MeitY, has been authorised as the exclusive registrar for this domain.
    • All banks in India must transition to this by October 31, 2025, with both old and new domains likely in use during the transition period.
    [UPSC 2019] Consider the following statements: The Reserve Bank of India’s recent directives relating to ‘Storage of Payment System Data’, popularly known as data diktat, command the payment system providers that

    1. they shall ensure that entire data relating to payment systems operated by them are stored in a system only in India

    2. they shall ensure that the systems are owned and operated by public sector enterprises

    3. they shall submit the consolidated system audit report to the Comptroller and Auditor General of India by the end of the calendar

    Which of the statements given above is/are correct?

    Options: (a) 1 only* (b) 1 and 2 only (c) 3 only (d) 1, 2 and 3

     

  • A chance for India’s creative ecosystem to make waves

    Why in the News?

    Despite global trade challenges and stock market fluctuations, India remains a strong and resilient economy. By using its young population and technological strengths, India has the potential to turn difficulties into opportunities. With its rich tradition of storytelling, India’s Media & Entertainment (M&E) sector aims to connect creators around the world through the vision of ‘Create in India, Create for the World.’

    What is the vision behind India’s Media & Entertainment (M&E) sector as outlined in the WAVES 2025 initiative?

    • Global Creative Leadership: India aims to emerge as a ‘Creative Powerhouse’, encouraging the creation of world-class content that resonates globally through the ‘Create in India, Create for the World’ vision. Eg: Namit Malhotra’s DNEG delivered Oscar-winning VFX for Dune 2, showcasing India’s global capability.
    • Fostering Innovation and Startups: The vision promotes a vibrant M&E startup ecosystem through WAVEX—offering funding, mentorship, and exposure in areas like gaming, AR/VR, animation, and AI. Eg: WAVEX supports startups like Erucanavis Technologies (AI-driven ads) and Amaze Studios (VR storytelling).
    • Cultural and Technological Synergy: It seeks to blend India’s rich cultural heritage with digital innovation, empowering young creators and expanding India’s influence in entertainment, education, and digital media. Eg: InscapeXR uses immersive media to transform learning experiences through storytelling.

    Who are some notable contributors and startups exemplifying India’s growing influence in the global creative industry?

    • DNEG (Namit Malhotra): India’s presence in high-end global cinema has grown significantly. Eg: DNEG, led by Namit Malhotra, delivered Oscar-winning VFX for Dune 2, showcasing India’s prowess in visual effects and animation.
    • Erucanavis Technologies: Innovation in ad-tech is pushing the boundaries of user interaction. Eg: Erucanavis is developing AI-driven playable ads, transforming digital advertising formats globally.
    • Lapwing Studios: Women-led creative startups are gaining recognition and scale. Eg: Lapwing Studios is supported under WAVEX, promoting inclusivity in India’s Media & Entertainment sector.
    • Amaze Studios: New-age storytelling formats are reshaping viewer experiences. Eg: Amaze Studios focuses on immersive storytelling through VR and animation, enhancing narrative depth.
    • InscapeXR: Ed-tech is merging with creative media to revolutionize learning. Eg: InscapeXR uses extended reality (XR) to create immersive educational content, blending creativity with pedagogy.

    How does WAVEX aim to support and scale startups in India’s creative economy?

    • Mentorship: WAVEX connects startups with industry leaders for strategic guidance and capacity building Eg: Startups like Vygr Media gain mentorship on scaling content for global audiences.
    • Funding Access: It facilitates financial support to overcome capital barriers for creative ventures. Eg: Women-led startups such as Lapwing Studios receive funding through WAVEX platforms.
    • Global Exposure: WAVEX offers international visibility and networking with global investors and buyers. Eg: Over 5,900 buyers at the WAVES Bazaar help startups like Amaze Studios find global partners.
    • Tech Integration: It supports innovation in tech-driven media fields like AR/VR, AI, and the metaverse. Eg: Erucanavis Technologies is leveraging WAVEX support to expand AI-based playable ads.
    • Inclusive Ecosystem: WAVEX promotes diversity by uplifting women-led and regional startups in M&E. Eg: Initiatives like Vision Impact promote inclusive ed-tech innovation through immersive storytelling.

    Why is India uniquely positioned to become a global creative powerhouse?

    • Demographic Dividend: India has a large, young population that fuels creativity and innovation across media sectors. Eg: WAVEX connects this youthful energy with global platforms to scale creative startups.
    • Technological Capability: India has strong digital infrastructure and IT expertise that power cutting-edge content creation. Eg: DNEG, led by Namit Malhotra, delivered Oscar-winning VFX in Dune 2, showcasing India’s tech strength.
    • Cultural Heritage: A rich legacy of storytelling, arts, and performance adds depth to creative expression. Eg: From classical dance to comics, Indian creators blend tradition with modern formats.
    • Government Support: Policy initiatives like WAVES 2025 foster a robust startup ecosystem for M&E. Eg: WAVEX provides funding, mentorship, and exposure to startups in AR/VR and AI-driven media.
    • Global Vision: India is aiming to create content not just for domestic audiences, but for the world. Eg: The ‘Create in India, Create for the World’ initiative positions India as a content export hub.

    What are the challenges? 

    • Access to Capital and Funding: Many startups in India’s creative sector face difficulty in securing adequate funding and investment. Despite government support through initiatives like Start-up India, access to venture capital and global investors remains a challenge for emerging companies. Eg: Small animation studios or VR companies, such as Amaze Studios, often struggle to scale due to limited financial resources.
    • Infrastructure Gaps: While the government has made significant strides in developing digital infrastructure, there are still gaps in areas like high-quality production facilities, broadband connectivity, and tech training centers. Smaller cities and rural areas, in particular, face challenges in accessing the necessary resources to contribute to the global creative industry. Eg: The lack of advanced digital infrastructure in tier-2 cities restricts the growth of tech-driven creative startups.

    Way forward: 

    • Enhanced Funding Support and Investment Channels: Strengthen access to venture capital and government-backed funding, especially for emerging creative startups, through dedicated investment platforms and incentives. Eg: Expanding initiatives like Start-up India to include sector-specific funding for M&E startups in animation, AR/VR, and AI.
    • Improved Infrastructure and Regional Connectivity: Invest in high-quality production facilities, fast-track broadband connectivity, and tech training programs across tier-2 cities and rural areas to bridge the infrastructure gap. Eg: Setting up regional M&E hubs outside major cities to create localized opportunities for tech-driven creative startups.

    Mains PYQ:

    [UPSC 2023] What is the status of digitalization in the Indian economy? Examine the problems faced in this regard and suggest improvements.

    Linkage: The “A chance for India’s creative ecosystem to make waves” text highlights the shift from traditional film-making to digital production and the role of technology like AI and VR/AR in the M&E sector. This PYQ on digitalisation is relevant as the growth of the creative ecosystem is heavily reliant on digital infrastructure and technologies.

  • Food prices may remain low if IMD’s prediction holds true

    Why in the News?

    According to the India Meteorological Department’s first forecast for 2025, the country may receive around 105% of the average rainfall, with a possible variation of 5% more or less.

    What is the India Meteorological Department’s (IMD) forecast for the 2025 monsoon?

    • Above Normal Rainfall Predicted: IMD forecasts 105% of the Long Period Average (LPA) rainfall for 2025, with a margin of ±5%. Eg: In 2024, India received 108% of LPA, which was categorized as ‘above normal’ rainfall.
    • LPA Reference and Classification: The LPA for the period 1971–2020 is 87 cm. Based on this, rainfall is classified as: Above Normal: 105–110% of LPA. Eg: If the rainfall is 105% of LPA, it falls within the ‘above normal’ range.
    • Improved Forecasting Methodology: Since 2021, IMD uses a multi-model ensemble system, combining global climate models with IMD’s own models, improving forecasting accuracy. Eg: Forecasts since the adoption of this system have shown improved accuracy, reducing error margins from previous years.

    Why is rainfall distribution crucial for agriculture?

    • Impact on Crop Growth: Uneven or poor rainfall distribution can lead to crop stress or failure. Plants depend on consistent water supply during different growth stages. Eg: In 2024, excess rainfall in Maharashtra led to the destruction of onion crops, while deficient rainfall in Punjab delayed paddy sowing, driving up food costs.
    • Effect on Water Availability: Proper rainfall distribution ensures water availability throughout the growing season, which is essential for irrigation systems and groundwater recharge. Eg: If regions like Tamil Nadu receive excess rainfall while other areas like Uttar Pradesh experience drought, it can disrupt the balance, making water management challenging.
    • Geographical Variability and Crop Suitability: Different crops require specific rainfall amounts at different times, so spatial distribution of rainfall is essential for crop selection and yield maximization. Eg: In 2023, Telangana and Puducherry received excess rainfall, benefiting crops like rice, but Bihar faced a below-normal monsoon, impacting food grain production.

    When did IMD improve its forecasting model, and what changed?

    • Improvement Began in 2021: IMD improved its forecasting model by adopting a multi-model ensemble dynamical system in 2021. Eg: Prior to 2021, IMD primarily relied on statistical models, but the new system incorporates global climate models along with IMD’s own models for better accuracy.
    • Enhanced Accuracy with New Models: The introduction of the multi-model ensemble system improved forecast reliability, reducing errors in predictions. Eg: Forecasts post-2021 showed a significant improvement, with accurate predictions of rainfall in regions like Maharashtra and Tamil Nadu during the 2024 monsoon.
    • Reduction in Error Margins: The new approach resulted in reduced error margins, making the first forecasts closer to actual rainfall patterns. Eg: IMD’s first forecast for the 2024 monsoon had a relatively smaller error margin, improving the predictability of rainfall distribution across India compared to previous years.

    How do El Niño, La Niña, and IOD affect the monsoon?

    Weather Phenomenon Effect on Monsoon Example
    El Niño Weakens the monsoon due to warmer sea surface temperatures in the Pacific Ocean. This leads to reduced rainfall. Eg: 2014, El Niño conditions led to below-normal rainfall, causing droughts and poor crop production in India.
    La Niña Strengthens the monsoon due to cooler sea surface temperatures in the Pacific Ocean, which can lead to excessive rainfall in some areas. Eg: 2017, La Niña conditions contributed to above-normal rainfall, causing floods in some regions like Assam.
    Indian Ocean Dipole (IOD) Positive IOD can enhance rainfall, while a negative IOD can lead to drought conditions, especially if combined with El Niño. Eg: 2019, a positive IOD helped in normal rainfall despite El Niño, while 2020 had a negative IOD, exacerbating the impact of weak monsoon rainfall.

    Which regions saw abnormal rainfall in 2023, and what was the impact?

    • North and Northwest India: Excessive Rainfall: Heavy rainfall led to flash floods, landslides, and infrastructure damage. Eg: In Himachal Pradesh, intense rainfall triggered landslides and flash floods, resulting in at least 72 deaths and significant infrastructure damage.
    • Northeast India: Glacial Lake Outburst Floods (GLOFs): Sudden release of water from glacial lakes caused severe flooding, destruction of infrastructure, and loss of life. Eg: In Sikkim, a GLOF resulted in the deaths of at least 31 people, destruction of over 270 houses, and damage to 11 bridges.
    • Southern Peninsula: Deficient Rainfall: Reduced water availability affected agriculture, leading to crop stress and delayed sowing. Eg: In Tamil Nadu, deficient rainfall impacted the sowing of paddy, leading to concerns over food production.

    Way forward: 

    • Enhance Climate Resilience: Promote water management, drought-resistant crops, and crop diversification to mitigate impacts of uneven rainfall.
    • Improve Early Warning Systems: Strengthen forecasting and disaster preparedness to ensure timely responses to extreme weather events.

    Mains PYQ:

    [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.

    Linakge:  If the IMD’s prediction is accurate, a good monsoon could mitigate one of the key drivers of food inflation – erratic rainfall and lower agricultural output. This question asks about the causes of high food inflation; a good monsoon would work against these causes.