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Subject: Economics

  • Swipe, Tap, Spend: How UPI is a decisive step towards formalization of Indian Economy

    Introduction

    India’s journey towards a cash-lite economy has been marked by a staggering rise in UPI transactions, reflecting a decisive shift in household and business payment patterns. From groceries to loans, from investments to utility bills, UPI has emerged as the backbone of everyday economic life. This transformation is not merely technological but a structural change towards the formalisation of the economy, reducing cash-dependency while boosting transparency and traceability in transactions.

    Why is UPI making news now?

    1. Staggering growth: In April–June 2025, 34.9 billion person-to-merchant transactions occurred through UPI, worth ₹20.4 lakh crore, equal to 40% of private final consumption expenditure, up from 24% two years ago.
    2. Shift from ATMs: Cash withdrawals, once dominant, have halved despite the economy doubling in size—falling from ₹2.6 lakh crore (2018) to ₹2.3 lakh crore (2025).
    3. Wider impact: UPI is now used not only for routine consumption but also for debt repayments, investments, and financial services, signalling a major step in economic formalisation.

    How has household spending been transformed?

    1. Digital dominance: Household payments, earlier cash-heavy, are increasingly routed through UPI across income classes.
    2. Food & beverages: In April–June 2025, households spent ₹3.4 lakh crore on food and beverages via UPI—17% of all UPI transactions and 21% of household expenditure.
    3. Non-food items: Payments include utilities, medicines, petrol, taxi rides, and electronics, accounting for two-thirds of person-to-merchant transfers.

    What about precautionary savings and cash usage?

    1. Decline in cash holdings: Household currency holdings fell from 12.5% of gross savings (2020–21) to just 3.4% in 2023–24.
    2. Changing behaviour: While cash remains important for land, gold, and election financing, its share in household savings has been on a consistent decline.

    How is UPI impacting financial formalisation?

    1. Formalisation of firms and workers: Increased traceable transactions complement reforms like GST registrations and EPFO contributions, enhancing formalisation.
    2. Beyond consumption: UPI in July 2025 facilitated ₹93,857 crore debt repayments and ₹61,080 crore investments into securities—indicating a structural integration of households into formal financial markets.

    What are the larger implications for the economy?

    1. Scaling up formal economy: Digital payments extend across small, medium, and big-ticket transactions, shrinking the space for the informal sector.
    2. Global context: Countries like Germany also have high cash usage despite digitisation—India’s transformation is striking in scale.
    3. Policy question: With the public currency-to-GDP ratio falling from 12.9% (2022) to 10.9% (2025), the debate is whether India has reached an inflection point towards becoming a sustained cash-lite economy.

    Conclusion

    UPI’s ascendancy reflects not just a technological success but a social and economic restructuring of India. By shifting transactions from cash to traceable platforms, it has enhanced formalisation, reduced leakages, and encouraged financial inclusion. The challenge ahead lies in ensuring this transformation is sustainable while safeguarding against risks like digital divides, cybersecurity threats, and over-dependence on electronic infrastructure.

    PYQ Relevance:

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

    Linkage: This PYQ is important as UPSC often tests themes of digitalisation, financial inclusion, and formalisation of the economy under GS3. The article helps answer it by showing UPI’s role in reducing cash reliance and formalising payments, while also pointing to persisting challenges like cash use in land, gold, and elections.

    Value Addition

    Benefits of UPI

    • Digitalisation of the Economy: 
      1. UPI has made India the world’s largest real-time digital payments ecosystem (over 50% of global real-time transactions, as per the ACI Worldwide 2023 report).
      2. Strengthens transparency, traceability, and reduces black money circulation.
    • Financial Inclusion:
      1. UPI transactions span urban malls to rural kirana stores, enabling low-cost access for the unbanked.
      2. Integration with Aadhaar, Jan Dhan, and mobile numbers creates a seamless financial ecosystem.
    • Globalisation × Formal & Informal Economy:
      1. Shifts large segments from cash-heavy informal sector to traceable, formal payments.
      2. Helps MSMEs and street vendors gain access to credit as digital history substitutes collateral.
    • Economic Growth and Development:
      1. Boosts consumption visibility, enabling better policy targeting.
      2. Encourages formal lending and investments—e.g., ₹93,857 crore in debt repayments via UPI (article data).

  • [pib] Logistics Ease Across Different States (LEADS), 2025

    Why in the News?

    The Union Minister for Commerce and Industry has released Logistics Ease Across Different States (LEADS), 2025 Report.

    What is Logistics Ease Across Different States (LEADS)? 

    • Overview: It is a national index benchmarking logistics performance across States and Union Territories of India.
    • Origin: Conceived in 2018, modelled on the World Bank’s Logistics Performance Index (LPI).
    • Authority: Prepared by the Department for Promotion of Industry and Internal Trade (DPIIT), Ministry of Commerce and Industry.
    • Methodology: Combines objective indicators (infrastructure, regulatory support, enablers) with perception-based feedback from stakeholders on cost, efficiency, and services.
    • Purpose: Promotes healthy competition, identifies best practices, and guides policy interventions to improve logistics efficiency.

    About LEADS 2025:

    • Launch: Released by the Union Minister for Commerce and Industry in New Delhi.
    • Framework: Built on 4 pillars – Infrastructure, Services, Operating & Regulatory Environment, and Sustainable Logistics.
    • New Features:
      • Corridor-level assessment of major national and regional corridors (journey time, truck speed, waiting periods).
      • API-enabled evaluation of section-wise truck speeds using real-time data.
    • Classification: States/UTs ranked as Leaders, Achievers, and Aspirers.
    • Alignment: Supports Make in India, Atmanirbhar Bharat, and Viksit Bharat 2047.

    Key Highlights of LEADS 2025:

    • Top States: Gujarat (1st), Karnataka (2nd), Maharashtra (3rd), Tamil Nadu (4th), Rajasthan (5th).
    • Parameters: Journey time, logistics costs, infrastructure quality, service reliability, waiting times, and sustainability practices.
    • Strategic Outcomes: Identifies bottlenecks, promotes evidence-based policymaking, reduces logistics costs, and enhances supply chain competitiveness.

  • [22nd September 2025] The Hindu Op-ed: Uranium unrest: On uranium mining in Meghalaya

    PYQ Relevance

    [UPSC 2018] Policy contradictions among various competing sectors and stakeholders have resulted in inadequate ‘protection and prevention of degradation’ to the environment. Comment with relevant illustration

    Linkage: The uranium mining push in Meghalaya illustrates a clear policy contradiction, India’s strategic and energy security imperatives versus constitutional safeguards for Scheduled/Tribal Areas and environmental sustainability. The Centre’s OM exempting uranium from public consultation shows how national security priorities often override local consent and ecological concerns, leading to inadequate protection. Thus, it serves as a live illustration of competing sectoral interests producing environmental degradation risks.

    Mentor’s Comment

    India’s renewed push for uranium mining in Meghalaya, despite strong tribal opposition, has reopened debates on resource governance, environmental justice, and constitutional safeguards. For UPSC aspirants, this case is not only about Meghalaya but about how India manages its uranium reserves, balances national security with sustainability, and navigates the tensions between state imperatives and community consent. This article integrates the editorial’s concerns with a broader analysis of uranium mining in India and its implications.

    Introduction

    The Union Environment Ministry’s office memorandum (OM) exempting uranium and other strategic minerals from public consultation has intensified unrest in Meghalaya. Tribal Khasi groups, opposing uranium extraction since the 1980s, see this as a denial of their constitutional and cultural rights. At the same time, India’s nuclear ambitions make uranium strategically vital. This tension between energy security and indigenous consent places India at a crucial crossroads of democratic governance and resource management.

    Why is this in the news?

    The Centre’s attempt to mine uranium in Meghalaya, against the backdrop of decades-long opposition, is a landmark moment in India’s mineral politics. For the first time, an executive order (OM) has bypassed community consultations for uranium mining. Given the toxic environmental footprint of uranium mining and its irreversible impact on tribal lands, the issue has become both a governance crisis and an ecological flashpoint.

    What is the history of uranium mining resistance in Meghalaya?

    1. Khasi opposition since the 1980s: Resistance in Domiasiat and Wahkaji has endured for four decades.
    2. Distrust from Jharkhand experience: Singhbhum mines faced protests due to radiation exposure and livelihood loss.
    3. Procedural unfairness: Hearings often conducted in unfamiliar languages, ignoring objections.

    Why is the new Office Memorandum controversial?

    1. Exempts strategic mineral mining from public consultation, silencing affected communities.
    2. Issued without parliamentary scrutiny, showing executive overreach.
    3. Weakens constitutional safeguards, turning stewards of the land into bystanders in decisions affecting their survival.

    What constitutional and legal protections are at stake?

    1. Sixth Schedule: Khasi Hills Autonomous District Council may invoke its autonomy.
    2. Judicial precedents: Niyamgiri (2013) recognized the primacy of tribal consent.
    3. Fifth and Sixth Schedules: Provide a strong legal basis for resistance.
    4. Global principle of FPIC (Free, Prior, and Informed Consent): Ignored in this decision.

    Why is uranium mining a risky proposition?

    1. Environmental hazards: Radioactive waste and contamination of water sources.
    2. Human health risks: Increased cases of radiation-linked illnesses reported in Singhbhum.
    3. Cultural disruption: Tribal communities lose ancestral land and cultural heritage.
    4. Short-term security vs long-term sustainability: Overemphasis on uranium undermines renewable energy pathways.

    Uranium Mining in India – An Overview

    Where is uranium mined in India?

    1. Jharkhand (Singhbhum district): Oldest uranium mines; key hub of Uranium Corporation of India Limited (UCIL).
    2. Andhra Pradesh (Tummalapalle, Kadapa district): Estimated to be one of the world’s largest uranium reserves (~150,000 tonnes).
    3. Telangana (Nalgonda district): Lambapur-Peddagattu reserves.
    4. Meghalaya (Domiasiat, Wahkaji): Rich reserves but stalled due to tribal opposition.
    5. Rajasthan (Rohil in Sikar district): Exploratory work underway.

    What are the requirements and process of uranium mining?

    1. Requirement of Environmental Clearances: Normally includes public consultation, impact assessments, and Forest Rights Act compliance (bypassed in the new OM).
    2. Mining process:
      • Open-cast mining: Surface excavation, highly polluting.
      • Underground mining: Safer but expensive.
      • Processing: Crushing ore, followed by leaching (acid/alkaline) to extract uranium oxide (yellowcake).
      • Radiation management: Requires robust safeguards in waste disposal, tailing ponds, and worker protection—areas where India has faced criticism.

    India’s standing in global uranium context

    1. Global reserves: Australia, Kazakhstan, Canada, Russia dominate.
    2. India’s share: About 1-2% of world reserves, modest compared to global leaders.
    3. Import dependence: Despite domestic efforts, India imports uranium from Kazakhstan, Russia, Uzbekistan, Canada.
    4. Nuclear energy contribution: Currently ~3% of India’s electricity; goal is 9-10% by 2040.

    Implications for India

    1. Energy security: Indigenous uranium critical for India’s nuclear power expansion under India’s three-stage nuclear program.
    2. Geopolitical leverage: Imports expose India to supply shocks and diplomatic constraints.
    3. Environmental justice: Mining projects risk alienating tribal populations and worsening ecological fragility.

    How should the state respond?

    1. Withdraw the OM to restore procedural legitimacy.
    2. Respect community consent to prevent democratic erosion.
    3. Explore alternatives like thorium-based nuclear energy (where India has rich reserves) and renewable energy strategies.
    4. Promote dialogue, not coercion, to avoid long-term alienation of tribal groups.

    Conclusion

    The uranium debate in Meghalaya is about much more than mining, it is about the soul of Indian democracy. By sidelining constitutional protections and environmental concerns, the state risks sacrificing long-term legitimacy for short-term gains. India’s future energy security cannot come at the cost of tribal survival, ecological stability, and democratic consent. A sustainable pathway lies in inclusive governance, diversified energy strategies, and respect for constitutional safeguards.

  • Why low inflation is the problem

    Introduction

    Inflation in India has sharply declined in recent months, with CPI inflation at 2.27% (Aug 2024) and WPI inflation at just 0.52%. While households welcome subdued prices, this development has unsettled the government’s fiscal math. Nominal GDP growth, which forms the base for budget projections, has weakened. As a result, targets for revenue, deficit, and debt are under stress. This shift highlights the complex relationship between inflation, nominal GDP, and fiscal sustainability.

    The Problem with Low Inflation

    Why is low inflation in the news?

    India is currently witnessing one of the weakest inflation trajectories in recent years, with both CPI and WPI at historic lows. This is striking because inflation had been consistently higher earlier, often troubling households and RBI alike. Now, for the first time in years, inflation is falling so low that it is below the government’s own expectations, threatening fiscal stability. While consumers benefit from cheaper goods, the government risks losing lakhs of crores in projected revenue.

    Breaking Down the Fiscal Arithmetic

    What is the link between inflation and government finances?

    1. GDP measure: Nominal GDP = monetary value of goods/services at current prices, before adjusting for inflation.
    2. Government’s reliance: Budget estimates are framed on nominal GDP, not real GDP.
    3. Importance: Nominal GDP forms the denominator for deficit and debt ratios, making it central to fiscal health.

    How is low inflation disrupting budget math?

    1. Union Budget FY25-26 assumption: Nominal GDP growth at 10.5%, implying GDP of ₹357 lakh crore.
    2. Reality: Q1 nominal GDP growth just 8%, well below target.
    3. Revenue impact: FY26 central govt. net tax revenue projected at ₹33.1 lakh crore; lower inflation could cut receipts by ₹57,314 crore.

    Why is nominal GDP growth so crucial?

    1. Fiscal deficit & debt ratio: Targets (fiscal deficit 4.4%, debt-GDP ratio 56.1%) are achievable only if nominal GDP grows as expected.
    2. Current scenario: With weak inflation, nominal GDP falls, making deficit/debt appear larger relative to GDP.
    3. Result: Fiscal stress and need for adjustments in spending or borrowing.

    Is low inflation always bad?

    1. Positive side: Consumers enjoy stable prices, reduced cost of living, relief from food price spikes.
    2. Negative side: Weak inflation = lower nominal GDP = poor revenue realization for the government.
    3. RBI view: Deputy Governor (May 2024) warned that while lower prices help consumers, oversupply and weak pricing power can dampen private investment and industrial margins.

    What are the long-term risks?

    1. Corporate health: Lower pricing power can affect profits, discouraging capex.
    2. Employment: Weak demand growth can limit job creation.
    3. Cycle of slowdown: Weak inflation → lower nominal GDP → fiscal squeeze → reduced spending → slower growth.

    Conclusion

    Low inflation, though a blessing for households, poses structural challenges for India’s fiscal health. When inflation falls below government assumptions, it erodes revenue potential and distorts deficit ratios, threatening fiscal sustainability. Policymakers thus face the paradox of balancing consumer welfare with fiscal prudence. For India, the task ahead is not merely curbing inflation but maintaining it at an optimal, stable level to sustain growth, revenue, and investment.

    PYQ Relevance

    [UPSC 2019] Do you agree with the view that steady GDP growth and low inflation have left the Indian economy in good shape? Give reasons in support of your arguments.

    Linkage: The question assumes that low inflation alongside steady GDP growth indicates economic strength. However, as the article shows, low inflation with weak nominal GDP growth can actually strain fiscal math, reduce revenues, and slow investment. Thus, while consumers benefit, the economy may not necessarily be in “good shape” if fiscal sustainability and growth momentum are undermined.

  • Centre to simplify Quality Control Order (QCO) framework

    Why in the News?

    A NITI Aayog panel has proposed easing India’s Quality Control Orders (QCOs) by simplifying certification, assessments, and inspections to support MSMEs amid domestic and global criticism.

    About Quality Control Orders (QCOs):

    • Overview: Issued under the Bureau of Indian Standards (BIS) Act, 2016, QCOs make Indian Standards compulsory for specific products in public interest (health, environment, security, fair trade).
    • Voluntary vs. Mandatory: Normally BIS certification is voluntary, but under QCOs manufacturers/importers must obtain a BIS licence or Certificate of Conformity before production, imports, or sales.
    • Standard Mark: Products under QCOs carry the ISI mark (or Hallmark for jewellery) to indicate conformity.
    • Legal Backing: Governed by BIS (Conformity Assessment) Regulations, 2018; violation punishable with fines or imprisonment.
    • Imports: Applies equally to foreign manufacturers via the Foreign Manufacturers Certification Scheme (FMCS).
    • Coverage: Of ~23,000 BIS standards, only 187 QCOs covering 770 products exist; 84 QCOs covering 343 products issued in the last three years.
    • Example: QCOs for compressors & ACs (2023) boosted compressor output from <2 million (2021–22) to 8 million (2023–24); ACs to 12 million+ units.

    Challenges Related to QCOs:

    • High Costs: Certification involves inspections, documents, and assessments—burdening MSMEs.
    • Non-Tariff Barrier Issues: US, EU, UK, NZ claim India’s QCOs exceed global norms. USTR (2025) flagged BIS marks even for chemicals, requiring site visits.
    • Industry Pushback: MSMEs fear inflationary costs; imports of cheaper raw materials/components restricted.
    • Limited Enforcement: Only 187 of 23,000 standards notified, mainly steel, electronics, chemicals.
    • Implementation Delays: Licence approvals slow; procedures disrupt production and supply chains.
    • Conflicting Views: Some MSMEs benefit (e.g., Birla Aircon turnover jumped ₹7 crore to ₹42 crore after QCO on water coolers), others call it “malign intervention” (NITI Aayog VC Suman Berry).

    Steps Taken by Government:

    • Digitisation: Simplified certification covering 750+ products; licences granted in 30 days.
    • MSME Outreach:
      • Jan Sunwai: Online open-house thrice weekly.
      • Manak Manthan: BIS field initiative for MSME support.
      • Regional Conferences: Led by Department of Consumer Affairs to resolve issues.
    • Capacity Building: Of 50,753 BIS certifications, ~40,000 (≈80%) issued to MSMEs; 24,625 voluntarily obtained for credibility/exports.
    • Trade Readiness: Govt projects QCOs as tools to raise quality and global competitiveness.
    • WTO Consistency: Justified if linked to health, safety, environment, deceptive trade, or security, in line with WTO Technical Barriers to Trade (TBT) Agreement.
    [UPSC 2017] With reference to `Quality Council of India (QCI)’, consider the following statements:

    1. QCI was set up jointly by the Government of India and the Indian Industry.

    2. Chairman of QCI is appointed by the Prime Minister on the recommendations of the industry to the Government.

    Which of the above statements is/are correct?

    Options: (a) 1 only (b) 2 only (c) Both 1 and 2* (d) Neither 1 nor 2

     

  • [19th Septmeber 2025] The Hindu Op-ed: Equalising Primary Food Consumption in India

    PYQ Relevance

    [UPSC 2019] What are the reformative steps taken by the Government to make food grain distribution system more effective?

    Linkage: The article’s proposal to restructure the PDS by trimming excess cereal entitlements and expanding pulse distribution directly links with UPSC 2019’s question. It highlights how reformative steps—like targeted subsidies, rationalised stocking by FCI, and focus on nutritional security beyond cereals—can make the food grain distribution system more effective. Thus, it connects poverty reduction with sustainable and equitable food security reforms.

    Mentor’s Comment

    The recent NSS household consumption survey, coupled with World Bank estimates, has painted a contrasting picture of India’s poverty and food deprivation. While global narratives celebrate the near-eradication of extreme poverty, ground-level consumption data tells a more sobering story, half of rural India still struggles to afford two simple thalis a day. This article unpacks the deeper meaning of food security beyond calorie intake, critiques the existing Public Distribution System (PDS), and explores how restructuring subsidies, especially towards pulses, can equalise food consumption in India. For UPSC aspirants, the debate is not only about statistics but also about welfare priorities, distributional justice, and the role of the state in ensuring dignified living standards.

    Introduction

    India has long battled poverty and hunger, but the release of the 2024 NSS Household Consumption Survey and the World Bank’s Poverty and Equity Brief (2025) has reshaped the debate. The World Bank report claims that extreme poverty has fallen from 16.2% in 2011-12 to just 2.3% in 2022-23, a historic achievement if true. Yet, when food consumption is measured through the “thali index” rather than calorie-based poverty lines, stark disparities emerge: 50% of rural India and 20% of urban India could not afford two thalis a day in 2023-24. This contradiction raises a crucial policy question—how can India ensure not just calorie intake but nutritional adequacy and equal access to primary food consumption?

    The contrasting narratives of poverty in India

    1. World Bank Estimate: Extreme poverty has “virtually disappeared,” with only 2.3% living below $2.15/day.
    2. Thali Index Reality: Despite rising incomes, half of rural India could not afford two balanced meals (thalis) daily in 2023-24.
    3. Deprivation Gap: The difference arises because food is residual expenditure after households spend on essentials like rent, health, and transport.

    Why measure poverty through the thali meal?

    1. Beyond Calories: Traditional poverty lines only measure calorific intake, ignoring nutrition and satisfaction.
    2. Balanced Meal: A thali (rice, dal, roti, vegetables, curd, salad) represents a self-contained, nutritious unit of food consumption.
    3. Cost Factor: Crisil estimates a home-cooked thali costs ₹30. Many households fall short of affording even two thalis/day per person.

    How effective is the Public Distribution System?

    1. Food Deprivation with PDS: Even after including PDS food supplies, deprivation persists—40% rural and 10% urban cannot afford two thalis daily.
    2. Subsidy Distribution: In rural India, a person in the 90–95% expenditure class receives 88% of the subsidy given to the poorest 5%, despite much higher consumption capacity.
    3. Urban Progressivity: The PDS is more progressive in urban areas, but still, 80% receive subsidised or free food, including those not in need.

    Why are cereals not enough

    1. Equalised Cereal Consumption: Both the poorest and richest consume similar amounts of rice and wheat, showing PDS success but also its limits.
    2. Expenditure Share: Cereals now account for only 10% of average household expenditure, so increasing cereal subsidy has diminishing returns.
    3. Need for Protein: Pulses consumption is half in the poorest 5% compared to the richest 5%, highlighting protein inequality.

    Policy path: Equalising food consumption through pulses

    1. Expand PDS Coverage: Redirect subsidies towards pulses, the main protein source for many Indians.
    2. Rationalise Cereals Subsidy: Trim excess rice/wheat entitlements, especially for better-off groups, reducing stocking costs for FCI.
    3. Compact and Targeted PDS: By focusing on pulses and eliminating subsidies beyond the “two thali/day” norm, the system becomes both cost-effective and equitable.
    4. Global Significance: Achieving equalised food consumption across social classes would be a unique welfare success story worldwide.

    Conclusion

    The thali index reveals a hidden crisis of food deprivation that headline poverty numbers obscure. While cereal consumption has been equalised through decades of PDS efforts, the next frontier lies in ensuring protein security via pulses distribution. Rationalising subsidies and targeting them effectively can not only optimise public spending but also equalise primary food consumption across India, a feat that would stand as a benchmark in global welfare policy.

  • What is PM MITRA Park?

    Why in the News?

    Prime Minister recently laid the foundation stone for India’s first PM MITRA (Mega Integrated Textile Region and Apparel) Park in Dhar, Madhya Pradesh.

    About PM MITRA Scheme:

    • Overview: Introduced by the Ministry of Textiles in 2021, the scheme aims to strengthen India’s textile sector by creating 7 world-class integrated parks.
    • Concept: Designed on the vision “Farm to Fibre to Factory to Fashion to Foreign”, each park consolidates the entire textile value chain—spinning, weaving, dyeing, processing, printing, and garment-making—within a single ecosystem.
    • Sites Selected: Tamil Nadu (Virudhunagar), Telangana, Karnataka, Maharashtra, Gujarat, Madhya Pradesh (Dhar), and Uttar Pradesh (Lucknow).
    • Timeline: All parks are targeted to be established by 2026–27, with each covering around 1,000+ acres.
    • Implementation Structure:
      • Special Purpose Vehicle (SPV): Each park will be developed by an SPV jointly owned by the Centre and State Governments, operating in Public–Private Partnership (PPP) mode.
      • Development Capital Support (DCS): Up to ₹500 crore per park provided by the Centre to SPVs.
      • Competitive Incentive Support (CIS): Up to ₹300 crore per park offered to manufacturing units to encourage rapid implementation.

    Key Features and Benefits:

    • Integrated Value Chain: All stages of textile production are located in one hub, reducing transport costs, delays, and inefficiencies.
    • World-Class Infrastructure: Includes incubation centres, design/testing labs, effluent treatment plants, reliable utilities, logistics facilities, and worker hostels.
    • Employment Generation: Each park expected to create ~1 lakh direct and ~2 lakh indirect jobs, especially benefiting women and rural youth.
    • Investment Boost: Scheme aims to attract over ₹70,000 crore in investments in the textile sector.

  • Govt to push Geothermal Pilots under New Policy

    Why in the News?

    The Ministry of New & Renewable Energy (MNRE) has launched its first National Policy on Geothermal Energy, aiming to create a regulatory and developmental framework for tapping geothermal resources.

    Govt to push Geothermal Pilots under New Policy

    India’s Geothermal Policy, 2025: Key Highlights

    • Launch: India’s first National Policy on Geothermal Energy was officially notified in September 2025 by the Ministry of New and Renewable Energy (MNRE).
    • Alignment with Goals: The policy is designed to support Net Zero by 2070, dovetailing with India’s renewable energy targets.
    • Scope: Applies to both power generation and direct-use applications such as district heating, agriculture, aquaculture, spa tourism, and industrial cooling.
    • Implementation Agency: MNRE is the nodal agency; other ministries, state governments, oil & gas firms, and academic institutions will collaborate.
    • Financial & Regulatory Support:
      • Tax incentives, grants, concessional financing, long-term leases (up to 30 years).
      • Viability Gap Funding (VGF) to offset high upfront costs (₹36 crore per MW).
      • Open access waivers, must-run status, and parity with other renewables.
    • Repurposing Wells: A strong focus on repurposing abandoned oil & gas wells for geothermal energy; MNRE already working with ONGC, Vedanta Ltd’s Cairn Oil & Gas, Reliance.
    • Global Collaboration: Partnerships with Iceland, Norway, US, and Indonesia for R&D, Enhanced Geothermal Systems (EGS) and Advanced Geothermal Systems (AGS).
    • Pilot Projects: Five sanctioned projects for resource assessment and demonstration across multiple regions.

    Geothermal Energy Scenario in India:

    • Potential: Estimated at 10.6 GW (10,600 MW), as identified by the Geological Survey of India (GSI).
    • Mapping: Over 381 hot springs mapped with surface temperatures ranging 35°C – 89°C.
    • Global Context: According to the International Energy Agency (IEA), India, US, and China together account for 75% of global potential for next-gen geothermal.
    • Projects & Status:
      • NO grid-connected geothermal plants yet; focus is on pilot, demo, and R&D projects.
      • 20 kW pilot binary-cycle plant commissioned at Manuguru, Telangana.
      • Ongoing pilots: Puga (Ladakh), Chhumathang (Ladakh), Cambay (Gujarat), Barmer (Rajasthan).
      • IIT Madras + Vedanta project: retrofitting abandoned oil wells in Barmer to generate 450 kWh of electricity.
    • Future Roadmap:
      • 10 GW target by 2030, ~100 GW potential by 2045.
      • Vision 2047: Viksit Bharat, hybrid solar-geothermal projects, and heating for cold regions (Ladakh, NE, Andamans).

    Govt to push Geothermal Pilots under New Policy

    Major Geothermal Sites in India

    Region/State Site/Province Key Features & Notes
    Ladakh (Himalayan Province) Puga Valley High-temperature hot springs; identified by US ITA (2024) as most promising; pilot projects underway.
    Chhumathang Similar potential as Puga; targeted for power generation and direct heating applications.
    Himachal Pradesh Manikaran Popular hot spring zone; suitable for pilot geothermal plants and tourism-linked heating.
    Satluj, Beas, Spiti Valleys Multiple geothermal spots mapped by GSI; moderate-to-high potential.
    Uttarakhand Tapoban & Alaknanda Valley Himalayan geothermal systems; identified for research and pilot use.
    Gujarat Cambay Graben Abandoned oil wells available for repurposing (ONGC, Reliance, Vedanta pilots).
    Lasundra (Vadodara) Known hot spring site; potential for direct-use applications.
    Chhattisgarh Tattapani Field Well-studied geothermal site; suitable for direct heat use and demonstration projects.
    Jharkhand / West Bengal Damodar Valley Identified geothermal prospects; part of GSI mapping.
    Surajkund (Jharkhand) Among hottest springs in India (85–87°C).
    Andaman & Nicobar Islands Volcanic geothermal fields High geothermal promise; strategic as islands rely on costly power (₹30–32/unit → could drop below ₹10–11).
    Telangana Manuguru 20 kW pilot binary-cycle geothermal power plant commissioned.
    Other States Madhya Pradesh, Odisha, Maharashtra, Meghalaya Multiple small hot spring clusters mapped by GSI; low-to-moderate potential.

     

    [UPSC 2013] Consider the following:

    1. Electromagnetic radiation

    2. Geothermal energy

    3. Gravitational force

    4. Plate movements

    5. Rotation of the earth

    6. Revolution of the earth

    Which of the above are responsible for bringing dynamic changes on the surface of the earth?

    (a) 1, 2, 3 and 4 only (b) 1, 3, 5 and 6 only (c) 2, 4, 5 and 6 only (d) 1, 2, 3, 4, 5 and 6 *

     

  • Launch of Bima Sugam Portal

    Why in the News?

    Bima Sugam, envisioned as the world’s largest online marketplace for insurance, was officially launched by the Bima Sugam India Federation (BSIF) at the IRDAI headquarters in Hyderabad.

    What is Bima Sugam?

    • Overview: World’s largest unified digital marketplace for insurance products and services, initiated by the Insurance Regulatory and Development Authority of India (IRDAI).
    • Coverage: Includes life, health, motor, travel, property, agricultural, and commercial insurance.
    • Function: Works like Unified Payments Interface (UPI) for insurance, providing common infrastructure for purchase, renewal, management, and claims.
    • Stakeholders: Brings together insurers, intermediaries, agents, brokers, banks, and customers on a single platform.
    • Governance: Operated by the Bima Sugam India Federation (BSIF) with equity participation from insurance companies.
    • Policy Goal: Forms part of India’s Digital Public Infrastructure (DPI), aligned with the vision of Insurance for All by 2047.
    • Working:  The simplified way for a user on the platform would be as follows:
      • Registration: A person can register using Aadhaar-based KYC or other valid ID.
      • e-Bima Account Creation: A secure, integrated insurance repository has been created.
      • Policy search and comparison: Products from all registered insurance companies are listed with standardized information for easy comparison.
      • Purchase: Policies can be purchased digitally with instant e-documentation and secure payments.
      • Service: Policyholders can renew, update, port, or cancel policies and receive real-time assistance.
      • Claims: Users can submit claims and track the process; insurance companies and TPAs will use backend access for faster verification and settlement.

    Key Features:

    • Phased Rollout: Begins as an information and guidance hub; full transactions enabled gradually.
    • Low-Cost Model: Minimal user charges, unlike private aggregators that rely on high commissions.
    • Centralised Database: Enables policy comparison, customer query resolution, and faster product adoption.
    • Secure Digital Storage: Provides safe policy storage with robust security and compliance standards.
    • Inclusive Ecosystem: All insurers mandated as members, ensuring transparency and fair access.
    [UPSC 2014] With reference to “Aam Admi Bima Yojana”. Consider the following statements:

    1. The member insured under the scheme must be the head of the family or earning member of the family in a rural landless household.

    2. The member insured must be in the age group of 30 to 65 years.

    3. There is a provision for free scholarship for up to two children of the insured who are studying between classes 9 and 12.

    Which of the statements given above is/are correct?

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

     

  • In news: Almatti Dam

    1. Why in the News?

    Karnataka govt. has approved Upper Krishna Project Phase-III to raise Almatti dam height, while Maharashtra warned of moving the Supreme Court against it.

    Why is Maharashtra opposing it?

    • Fears submergence of villages and agricultural land in its territory if water levels rise further.
    • Worries about reduced water availability downstream, affecting its irrigation and drinking water projects.

    About Almatti Dam:

    • Overview: It is a hydroelectric and irrigation project built on the Krishna River in North Karnataka.
    • Completion: July 2005, as part of the Upper Krishna Irrigation Project (UKP).
    • Dimensions: Height 52.5 m, length 3.5 km.
    • Power Generation: A 290 MW station using vertical Kaplan turbines (five of 55 MW and one of 15 MW).
    • Two separate powerhouses: Almatti I and II generate power before releasing water into the Narayanpur Reservoir.
    • Functions: Provides irrigation, potable water, hydroelectric power, and helps in flood management.

    Back2Basics: Krishna River

    In news: Almatti Dam

    • Origin: Near Mahabaleshwar (Satara, Maharashtra), in the Western Ghats.
    • Length: ~1,300 km, second-longest river in peninsular India after Godavari.
    • Course: Flows through Maharashtra (303 km), Karnataka (480 km), Telangana, and Andhra Pradesh, before emptying into the Bay of Bengal.
    • Major Tributaries:
      • Right-bank: Ghatprabha, Malprabha, Tungabhadra.
      • Left-bank: Bhima, Musi, Munneru.
    • Hydropower & Irrigation Projects: Includes Koyna, Tungabhadra, Srisailam, Nagarjuna Sagar, Almatti, Narayanpur, Bhadra.

     

    [UPSC 2005] The Almatti Dam is on the river:

    Options: (a) Godavari (b) Cauvery (c) Krishna* (d) Mahanadi