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Subject: Economics

  • What are Strategic Petroleum Reserves (SPR)?

    Why in the News?

    India is planning to establish six new Strategic Petroleum Reserve (SPR) sites to boost energy security amid rising global oil risks.

    About Strategic Petroleum Reserves (SPR):

    • Overview: SPRs are emergency stockpiles of crude oil maintained by the government to manage supply disruptions caused by events like wars, embargoes, or price shocks.
    • Purpose: To ensure national energy security and reduce vulnerability to external supply shocks.
    • Historical Context: India realised the need for SPRs after the 1990 Gulf War, which caused supply cuts and spiking oil prices and ultimately the Balance of Payment (BoP) Crisis.
    • Foundation: The SPR project began in the early 2000s based on advice from the Planning Commission’s Integrated Energy Policy.
    • Governing Body: In 2004, the government set up Indian Strategic Petroleum Reserves Limited (ISPRL) as a Special Purpose Vehicle under the Oil Industry Development Board (OIDB).
    • India’s three-pronged oil security framework:
      1. Commercial oil stocks by public and private oil marketing companies (OMCs).
      2. Strategic reserves by ISPRL for emergencies.
      3. Equity oil assets abroad through companies like ONGC Videsh Ltd. (OVL).
    • Storage: Unlike commercial stocks, SPRs are stored in underground rock caverns, which are safer, more secure, and suited for long-term preservation.

    Current SPR Infrastructure:

    • SPR Locations: India has three active SPR sites:
      • Visakhapatnam (Andhra Pradesh)
      • Mangaluru (Karnataka)
      • Padur (Karnataka)
    • Total Capacity: The combined SPR capacity is 5.33 MMT or roughly 39 million barrels.
    • Coverage Duration: This reserve can meet about 9.5 days of India’s daily oil requirement (≈5.5 million barrels/day).
    • Distinction from OMC Stocks: These strategic stocks are separate from commercial stocks held by companies like IOCL, HPCL, and BPCL.

    Planned Expansion of SPRs in India:

    • Goal: India aims to double SPR capacity due to rising geopolitical risks and import dependence.
    • New Facilities Planned:
      • Chandikhol (Odisha) – 4 MMT (in two phases)
      • Padur Phase II (Karnataka) – 2.5 MMT
    • 6 new SPR locations are being planned at various sites, including Mangalore SEZ (Karnataka) and salt caverns in Bikaner (Rajasthan).
    • Future Capacity: After expansion, India’s total SPR stock will be 11.83 MMT, covering around 22 days of national demand.
    • Strategic Vision: The long-term objective is to build up 90 days of oil reserves, in line with International Energy Agency (IEA) guidelines.

  • [pib] Price Support Scheme (PSS) for Moong and Urad

    Why in the News?

    The Union Ministry of Agriculture has approved the procurement of Moong and Urad in Madhya Pradesh and Urad in Uttar Pradesh under the Price Support Scheme (PSS).  

    Back2Basics:

    Moong (Green Gram):

    • Moong is a high-protein pulse grown mainly in the Kharif season (June–July) and also in summer (March–April) and limited Rabi areas.
    • It thrives in well-drained loamy to sandy-loam soils with a temperatures of 25–35°C.
    • Fits well into crop rotations like Moong–Wheat or Summer Moong–Kharif Moong–Raya due to its short duration (60–75 days).
    • Major producers are Rajasthan, Maharashtra, MP, Andhra Pradesh, and UP.

    Urad (Black Gram):

    • Urad is grown mainly in the Kharif season (June–July) and also as a Rabi crop in southern India, needing a warm, humid climate.
    • Prefers well-drained loamy soils, unsuitable for waterlogged or saline areas; ideal temperature is 25–35°C.
    • Often sown in rotations with cereals like rice or wheat and widely used in intercropping/mixed cropping systems.
    • Key producing states include UP, MP, Andhra Pradesh, and Tamil Nadu.

    About Price Support Scheme (PSS):

    • Overview: PSS is a component of the Pradhan Mantri Annadata Aay Sanrakshan Abhiyan (PM-AASHA), launched in 2018 to ensure remunerative prices for farmers.
    • Objective: It ensures procurement at the Minimum Support Price (MSP) for oilseeds, pulses, and cotton when market prices fall below MSP.
    • Nodal Agency:  It is implemented by the Department of Agriculture & Cooperation through:
      • National Agricultural Cooperative Marketing Federation of India (NAFED) (Central nodal agency)
      • Food Corporation of India (FCI) (in specific cases)
    • How PSS Works:
      • MSPs are announced before each cropping season based on recommendations from the Commission for Agricultural Costs and Prices (CACP).
      • If the market price falls below MSP, central and state nodal agencies procure the produce directly from farmers.
      • Only crops meeting the Fair Average Quality (FAQ) standards are procured.
      • Procurement continues until market prices stabilise at or above MSP.
    • Eligibility and Access:
      • All farmers cultivating notified crops are eligible to benefit under PSS.
      • They must sell their produce at designated procurement centres, such as APMCs.
      • Government employees are typically excluded from the scheme’s benefits.

    What is the PM-AASHA Scheme?

    • Launch: PM-AASHA, launched in September 2018, is an umbrella scheme by the Government of India designed to ensure fair prices for farmers’ produce, specifically for pulses, oilseeds, and copra.
    • Goal: It complements the government’s policy of setting MSP at 1.5 times the cost of production.
    • Components: The scheme aims to translate increased MSPs into actual income gains through three implementation pathways:
      1. Price Support Scheme (PSS): Physical procurement at MSP by central agencies like NAFED.
      2. Price Deficiency Payment Scheme (PDPS): Farmers receive the difference between MSP and actual selling price directly into their bank accounts; no physical procurement.
      3. Private Procurement and Stockist Scheme (PPSS): Pilot scheme allowing private players to procure at MSP to supplement government efforts.
    • Nodal Agency: It is implemented by the Ministry of Agriculture and Farmers Welfare, with procurement agencies operating at both central and state levels.

     

    [UPSC 2020] With reference to pulse production in India, consider the following statements:

    1. Black gram can be cultivated as both kharif and rabi crop. 2. Green-gram alone accounts for nearly half of pulse production. 3. In the last three decades, while the production of kharif pulses has increased, the production of rabi pulses has decreased. Which of the statements given above is/are correct?

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

     

  • India breaks into top 100 of SDG Index for the first time

    Why in the News?

    In a major milestone, India has ranked 99th out of 167 countries in the 2025 edition of the Sustainable Development Report (SDR), released by the UN Sustainable Development Solutions Network.

    What are Sustainable Development Goals (SDGs)?

    • Definition: SDGs are 17 global goals adopted by all UN member states in 2015 to end poverty, protect the planet, and promote peace and prosperity by 2030.
    • Core Focus: They balance economic growth, social inclusion and environmental sustainability for a better future.
    • Scope: The goals cover health, education, gender equality, clean water, economic growth, climate action, and governance.
    • Global Framework: They are part of the 2030 Agenda for Sustainable Development adopted by the UN.

    About Global SDG Rankings:

    • Report Publisher: The Sustainable Development Report is released annually by the UN Sustainable Development Solutions Network, led by Jeffrey Sachs.
    • Methodology: It ranks 167 countries using an SDG Index score out of 100 based on performance across all 17 goals.
    • Score Interpretation: A score of 100 means full achievement of all SDGs; lower scores show partial or poor implementation.
    • Data Sources: Rankings are based on a mix of social, economic, environmental, and governance indicators.
    • Global Patterns: European countries dominate top ranks; countries with conflict or debt rank lower.
    Note: In India, we also have our own SDG India Index released by NITI Aayog.

    Key Highlights of the Rankings:

    • India’s Rank 2025: India ranks 99th with a score of 67—its first time in the top 100.
    • Major Countries’ Ranking: China ranks 49th (74.4); the US ranks 44th (75.2) but is 193rd in SDG policy support.
    • Neighbourhood Comparison: Bhutan ranks 74th (70.5), Nepal 85th (68.6), Bangladesh 114th (63.9), Pakistan 140th (57), Sri Lanka 93rd, and Maldives 53rd.
    • Top Performers: Finland, Sweden, and Denmark lead the world in SDG achievement.
    • Areas of Progress: Global gains include access to electricity, mobile broadband, internet, and lower child mortality.
    • Major Setbacks: Challenges include rising obesity, declining press freedom, biodiversity loss, and growing corruption.
    • Target Gaps: Only 17% of SDG targets are on track to be achieved by 2030.
    [UPSC 2016] Consider the following statements:

    1. The Sustainable Development Goals were first proposed in 1972 by a global think tank called the ‘Club of Rome’.

    2. The Sustainable Development Goals have to be achieved by 2030.

    Which of the statements given above is/are correct?

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

     

  • Inflation falls but not unemployment

    Why in the News?

    Despite headlines celebrating India’s less than 3% inflation rate in May 2025, deeper economic indicators tell a more troubling story. The same month saw a rise in unemployment from 5.1% to 5.8%, and GDP growth has slowed sharply from 9.2% in 2023-24 to 6.5% in 2024-25.

    What caused the recent fall in inflation despite rising unemployment?

    • Faster Agricultural Growth Narrowed Supply-Demand Gap: In 2024-25, agriculture grew faster than non-agricultural sectors, leading to an increased supply of food items. E.g., higher food production reduced scarcity, stabilising prices and easing inflationary pressure.
    • Sharp Decline in Food Inflation: Food-price inflation fell from nearly 11% in October 2024 to less than 1% in May 2025. Eg: This drop significantly pulled down the overall Consumer Price Index (CPI).

    Why is the RBI’s inflation control strategy being questioned?

    • Mismatch Between Interest Rates and Inflation Trends: The RBI’s key tool—repo rate hikes—did not align with the sharp fall in inflation, especially food inflation. Eg: Despite no major repo rate hike since June 2022, inflation fell from ~11% in Oct 2024 to <1% in May 2025.
    • Inflation Expectations Remain Unchanged: Household inflation expectations remained high and stable, even as actual inflation dropped, undermining the theory that RBI can anchor inflation through expectations. Eg: RBI’s own surveys (Mar 2024–May 2025) show expectations stayed well above the 4% target.
    • Policy Reactivity, Not Proactivity: The RBI’s approach appears reactive, adjusting repo rates after inflation changes instead of steering inflation proactively. Eg: RBI Governor stated repo rates may be reduced if inflation continues to fall—indicating policy follows rather than leads inflation.

    How does sectoral growth affect inflation?

    • Balanced Sectoral Growth Reduces Supply-Demand Gaps: When agriculture and non-agriculture sectors grow at similar rates, it narrows the supply-demand gap, especially for essentials like food. Eg: In 2024–25, agriculture grew faster than non-agriculture, helping reduce food shortages and lowering food inflation.
    • Agricultural Growth Directly Lowers Consumer Prices: A rise in farm output increases food availability, leading to a direct fall in food prices, which are a major part of the Consumer Price Index (CPI). E.g., food inflation fell from nearly 11% in Oct 2024 to under 1% in May 2025 due to a strong agricultural season.
    • Wage Effects Spill into Non-Agricultural Prices: Lower food inflation slows down wage growth demands, especially for rural labour, which indirectly eases price pressures in services and manufacturing. Eg: Cheaper food reduces pressure on industrial wages, helping contain broader inflation in non-farm sectors.

    What does the data say about interest rates and managing inflation?

    • Weak Link Between Interest Rates and Inflation Control: Econometric studies show no conclusive evidence that interest rate hikes directly reduce inflation in India. Eg: Despite a repo rate increase of over 10% in June 2022, food inflation fell in 2025 largely due to improved agricultural supply, not rate changes.
    • Sectoral Growth Differences Matter More: Inflation responds more to the relative growth of agriculture and non-agriculture sectors than to interest rate tweaks. Eg: In 2024–25, faster agricultural growth narrowed the supply-demand gap, lowering inflation, independent of any monetary policy shift.
    • Inflation Expectations Remain High Despite Rate Hikes: Even with a tighter monetary policy, household inflation expectations remained above the 4% RBI target, questioning the effectiveness of interest rate-driven expectations control. E.g., from March 2024 to May 2025, inflation expectations stayed high despite stable repo rates.

    Why should inflation and unemployment be assessed together?

    • Inflation Control Alone Doesn’t Reflect Economic Well-being: Focusing only on low inflation can hide deeper problems like joblessness, which directly affects livelihoods. Eg: In May 2025, inflation dropped to 2.8%, but unemployment rose to 5.8%, showing a weak job market despite price stability.
    • Policy Trade-offs Require Balanced Assessment: Sometimes policies that lower inflation may slow economic growth and reduce employment opportunities. Eg: Growth fell from 9.2% in 2023–24 to 6.5% in 2024–25, aligning with rising unemployment—highlighting that price stability came at the cost of jobs.

    Way forward: 

    • Adopt a Dual-Mandate Approach: Policymakers, especially the RBI, should consider both inflation and unemployment while framing monetary policy—moving beyond inflation targeting alone.
    • Promote Inclusive Growth through Sectoral Investment: Encourage job creation by investing in labour-intensive sectors like manufacturing, MSMEs, and services, while ensuring agricultural support to maintain price stability.

    Mains PYQ:

    [UPSC 2022] Besides the welfare schemes, India needs deft management of inflation and unemployment to serve the poor and the underprivileged sections of the society. Discuss.

    Linkage: This question is highly relevant because it explicitly mentions both “inflation and unemployment” together and the need for their effective management. This article talks about the inflation has fallen, unemployment has risen, and it criticizes the focus on inflation while neglecting unemployment.

  • [23rd June 2025] The Hindu Op-ed: Steering the Indian economy amidst global troubles 

    PYQ Relevance:

    [UPSC 2019] The economy is in a state of crisis due to global inflation. Critically examine whether this crisis and high inflation have left the Indian economy in good shape? Give reasons in support of your arguments.

    Linkage: This PYQ directly mentions a specific global economic “trouble” – global inflation – and asks about its impact on the Indian economy. This article talks about the “monetary policy should continue to remain accommodative” and that “inflation currently under control and projected to be lower” can help “propel growth,” indicating that managing inflation is a key part of steering the economy amidst global challenges.

     

    Mentor’s Comment:  The global trade order is witnessing a seismic shift amid renewed trade wars, evolving tariff regimes, and accelerating bilateral negotiations. In this flux, India’s exports of nearly one-fifth of its merchandise to the U.S., finds itself vulnerable, especially in sectors dominated by MSMEs like apparel, gems, and electronics. The uncertainty surrounding U.S. reciprocal tariffs, potential dumping threats, and the instability in trade negotiations pose a structural challenge. However, India also faces a rare geopolitical opportunity—to integrate into the reconfigured global supply chains, reduce dependency on traditional partners, and assert itself as a global manufacturing and export hub.

    Today’s editorial analyses the impact of new trade rules and ongoing political tensions between countries. This content would help in GS Paper II (International Relations) and GS Paper III (Indian Economy) in the mains Paper.

    _

    Let’s learn!

    Why in the News?

    The global economy is changing in a big way, mainly due to new trade rules and ongoing political tensions between countries.

    Why are current global trade dynamics creating uncertainty for Indian exporters?

    • Rise in protectionism and trade wars: Many countries are reviewing tariffs and adopting protectionist measures. This creates unpredictability in global trade flows, making it harder for Indian exporters to plan pricing and market strategies. Eg: The U.S. imposing or revising tariffs on Indian goods affects sectors like garments and pharmaceuticals.
    • Geopolitical tensions: Conflicts like the U.S.-China trade war or the Russia-Ukraine war are disrupting supply chains and altering trade alliances, impacting Indian exporters’ access to global markets and increasing costs. Eg: Indian exporters face delays or higher freight costs due to changes in trade routes.
    • Uncertain tariff regimes: Indian exporters face difficulty in decision-making due to fluctuating U.S. trade policies and lack of clarity on future duty structures, impacting pricing and margins. Eg: Sectors such as auto components and gems & jewellery, heavily reliant on the U.S., face profitability issues.
    • Losing competitive advantage: Competing countries like Bangladesh and Vietnam may benefit from early trade deals with the U.S., while India’s relative tariff advantage remains unclear. Eg: Indian textile exports could become costlier compared to Bangladesh’s duty-free access.
    • Planning uncertainty: Exporters hesitate to invest or plan for the long term in the absence of stable trade rules and policies. This impacts capacity expansion and export contracts, particularly for MSMEs. Eg: Indian MSMEs may cancel new orders or delay shipments due to lack of tariff clarity.

    What challenges do Indian MSMEs face due to potential U.S. tariff changes?

    • Profit Margin Erosion: Increased U.S. tariffs make Indian goods costlier, reducing profit margins for MSMEs and making their exports uncompetitive. Eg: A carpet-exporting MSME in Uttar Pradesh may struggle to maintain orders if buyers shift to cheaper alternatives from Bangladesh.
    • Order Uncertainty and Planning Delays: Fluctuating tariff policies create hesitation among U.S. buyers, affecting long-term contracts and production planning for small businesses. Eg: An MSME manufacturing leather goods may face cancelled or delayed orders due to uncertainty over final landed prices.
    • Limited Ability to Absorb Costs: Unlike large firms, MSMEs lack the financial cushion to absorb increased costs from tariffs, logistics, or compliance. Eg: A small pharmaceutical exporter may not afford sudden freight hikes or additional duties, making exports unviable.

    How can bilateral and free trade agreements help India navigate global trade disruptions?

    • Ensure Preferential Market Access: FTAs allow Indian exporters to access foreign markets with lower or zero tariffs, making their goods more competitiveeven amid global disruptions. Eg: An FTA with the UK can benefit Indian apparel exporters by reducing tariff barriers, boosting exports.
    • Diversify Export Destinations: Bilateral trade deals reduce dependency on a single market like the U.S., helping India shift exports to Europe, Australia, or ASEAN during crises. Eg: The India-EU FTA under negotiation could open up multiple markets for Indian electronics and auto components.
    • Address Non-Tariff Barriers (NTBs): FTAs help resolve issues like customs delays, quality standards, or licensing hurdles, ensuring smooth trade flowduring uncertain times. Eg: A mutual recognition agreement (MRA) under a BTA with the U.S. could simplify pharmaceutical exports by accepting Indian drug certifications.

    What policies can boost India’s economic resilience?

    • Strengthening Public Capital Expenditure: Increased government spending on infrastructure boosts domestic demand, generates employment, and crowds in private investment during global slowdowns. Eg: The PM Gati Shakti scheme accelerates infrastructure development, improving logistics and economic stability.
    • Expanding Production-Linked Incentive (PLI) Schemes: Enhancing PLI coverage to include more sectors like IoT devices or battery raw materials promotes domestic manufacturing, attracts FDI, and reduces import dependency. Eg: PLI in electronics has boosted mobile phone exports and created supply chain resilience.
    • Maintaining Accommodative Monetary Policy: Ensuring low interest rates and easy liquidity through monetary support helps businesses manage costs and stimulate investment during global headwinds. Eg: RBI’s repo rate cuts post-COVID helped MSMEs access cheaper credit, aiding recovery.

    Why should India focus on foreign investment and PLI expansion?

    • Diversify Global Supply Chains: Global companies are looking to reduce dependency on China and Southeast Asia. India can attract them by offering stable policies and incentives. Eg: Apple has shifted part of its iPhone manufacturing to India due to the PLI scheme and policy support.
    • Boost Manufacturing and Employment: Expanding PLI coverage to sectors like wearables, batteries, and semiconductors can enhance local production, reduce imports, and generate jobs. Eg: The PLI for electronics has helped create thousands of direct jobs and increased exports.
    • Strengthen Export Competitiveness: Foreign investments bring technology transfer, better quality standards, and improved productivity, which are crucial for export growth. Eg: Investments in the automobile and pharma sectors under PLI have enhanced India’s global competitiveness.

    Way forward:

    • Accelerate FTA Negotiations and Ensure Tariff Stability: India should fast-track bilateral and multilateral trade agreements (e.g., with the EU, Australia) to ensure stable market access and reduce uncertainty for exporters.
    • Expand and Streamline PLI Schemes: Broaden the Production-Linked Incentive (PLI) schemes to include high-potential sectors (e.g., semiconductors, IoT), and simplify procedures to attract more foreign investment and boost domestic manufacturing.

  • PM Gram Sadak Yojana

    Why in the News?

    The Ministry of Rural Development (MoRD) asked states to add QR codes to Prime Minister Gram Sadak Yojana (PMGSY) rural road boards to boost public monitoring and streamline upkeep via the eMARG platform.

    About PM Gram Sadak Yojana (PMGSY):

    • Launch: It was launched on December 25, 2000, by then PM Atal Bihari Vajpayee as a Central Sector Scheme to provide all-weather road connectivity to unconnected rural habitations.
    • Objective: The scheme helps bridge the rural-urban divide and improves access to markets, healthcare, education, and public services.
    • Implementation: It is now a centrally sponsored scheme led by the Ministry of Rural Development (MoRD) and supported by state governments.
    • Monitoring: Progress is tracked using e-MARG, a digital platform for monitoring road construction and maintenance.
    • Implementation Phases:
      1. Phase I (2000): Focus on connecting unconnected habitations.
      2. Phase II (2013): Upgrading roads built in Phase I to enhance rural infrastructure.
      3. Phase III (2019–2025): Consolidation of 1.25 lakh km of rural roads connecting habitations to Gramin Agricultural Markets, Higher Secondary Schools, and Hospitals. Cost: ₹80,250 crore (2019-2025). Funding: 60:40 (Centre), 90:10 for North-East and Himalayan States.
      4. Phase IV (2024–2029): Aims at constructing 62,500 km of all-weather roads to provide connectivity to 25,000 unconnected habitations with a focus on Left-Wing Extremism (LWE) areas, tribal areas, and remote regions.

    Key Features of PMGSY:

    • Rural Connectivity Focus: Targets habitations based on population thresholds (e.g., 500+ in plains, 250+ in hill/NE areas).
    • Funding Pattern: Initially 100% central funding; since 2015–16, it follows a 60:40 split (90:10 for NE and Himalayan states).
    • Maintenance Period: Contractors are responsible for road upkeep for 5 years post-construction.
    • Quality Assurance: Involves routine inspections and geo-tagged photographs to evaluate maintenance performance.
    • Economic Impact: Improves rural livelihoods, reduces migration, and enhances access to markets and services.
    [UPSC 2001] Consider the following schemes launched by the Union Government: I. Antyodaya Anna II. Gram Sadak Yojana III. Sarvapriya IV. Jawahar Gram Samriddhi Yojana. Which of these were announced in the year 2000?

    Options: (a) I and II* (b) II and IV (c) III and IV (d) I, II and III

     

  • FASTag Annual Pass Scheme

    Why in the News?

    Union Transport Minister announced a new FASTag-based Annual Pass system for private non-commercial vehicles (cars, jeeps, vans) to ensure smoother travel across National Highways.

    What are FASTags?

    • FASTag is a contactless toll payment system that uses Radio Frequency Identification (RFID) technology to enable automatic toll collection at National Highway toll plazas.
    • Managed by the National Highways Authority of India (NHAI) and National Payments Corporation of India (NPCI), it was launched in 2014 and became mandatory in 2021 for all four-wheeled vehicles.
    • It is a sticker affixed on a vehicle’s windshield, linked to a prepaid wallet or savings account. Toll charges are automatically deducted when the vehicle passes through an electronic toll gate.
    • It enhances convenience, reduces traffic congestion, and promotes digital payments across India’s highway network.
    • As per the Motor Vehicles Rules, FASTags are mandatory for all new four-wheelers and necessary for renewal of fitness certificates and national permits.

    About the FASTag Annual Pass Scheme:

    • Overview: It is a new initiative announced by the Ministry of Road Transport and Highways to provide cost-effective and hassle-free travel for private non-commercial vehicles.
    • Implementation: The pass will be effective from August 15, 2025, and is optional, intended for cars, jeeps, and vans (not for commercial vehicles).
    • Objectives: The scheme is designed to reduce per-trip costs (as low as ₹15/toll) and provide savings of up to ₹7,000 annually for frequent travelers.
    • Benefits: It allows unlimited passage at National Highway (NH) and National Expressway (NE) toll plazas for either:
      • One year, or
      • 200 toll crossings, whichever is earlier.

    Key Features:

    • Eligibility: Applicable only for non-commercial private vehicles with a valid, active FASTag linked to a registered vehicle number.
    • Activation: Can be activated via the Rajmargyatra mobile app or NHAI website with a one-time payment of ₹3,000 for FY 2025–26.
    • Validity: Covers 200 trips or one year and then reverts to regular FASTag mode unless renewed.
    • Trip Count:
      • Point-based plazas: Each pass counts as one trip per crossing.
      • Closed toll systems: Entry and exit combined count as one trip.
    • Transfer Restrictions: The pass is non-transferable and valid only for the vehicle on which the FASTag is registered.
    • Coverage: Valid only at NH and NE toll plazas managed by the Centre. It does not apply to state highway or local toll plazas.
    • Fee Revision: The base fee may be revised annually starting April 1 every year.
    • Existing Users: No need for a new FASTag if one is already affixed and active. The pass can be added on top of the existing tag after eligibility verification.
    [UPSC 2023] With reference to India’s projects on connectivity, consider the following statements:

    1. East-West Corridor under Golden Quadrilateral Project connects Dibrugarh and Surat.

    2. Trilateral Highway connects Moreh in Manipur and Chiang Mai in Thailand via Myanmar.

    3. Bangladesh-China -India -Myanmar Economic Corridor connects Varanasi in Uttar Pradesh with Kunming in China. How many of the above statements are correct? Options: (a) Only one (b) Only two (c) All three (d) None*

     

  • What is Reverse-Flipping?

    Why in the News?

    SEBI has introduced key regulatory relaxations to ease IPO norms and incentivize startups to shift their legal base back to India through reverse-flipping.

    About Reverse-Flipping:

    • Reverse-flipping refers to the process by which Indian startups that were earlier incorporated abroad shift their domicile back to India, making India their legal and operational headquarters.
    • It allows Indian companies to access domestic capital markets, reduce compliance complexity, and align with the evolving global tax and regulatory environment.
    • This shift helps startups tap Indian stock exchanges, reduce reliance on foreign jurisdictions, and benefit from a favorable Indian regulatory ecosystem.

    Types of Reverse-Flipping

    1. Share Swap Arrangement:
      • In this structure, shareholders of the foreign parent company exchange their shares for shares in the Indian subsidiary.
      • This process may trigger capital gains tax under the Income Tax Act, 1961, especially for Indian shareholders.
    1. Inbound Merger (Cross-Border Merger):
      • The foreign parent company merges with its Indian subsidiary, with the Indian entity becoming the surviving legal structure.
      • If all conditions under the Foreign Exchange Management Act (FEMA), the Companies Act, 2013, and National Company Law Tribunal (NCLT) are met, this merger route can be tax-neutral.

    Key Features:

    • Domestic Listing Access: Startups gain access to Indian IPO markets and valuations.
    • Simplified Compliance: Reduced legal and regulatory complications from operating across jurisdictions.
    • Investor Incentives: SEBI now allows foreign venture funds and AIFs to be counted towards minimum promoter contribution in public issues.
    • ESOP Relaxation: SEBI has allowed promoters/founders to retain Employee Stock Option Plans (ESOPs) granted one year prior to the filing of the Draft Red Herring Prospectus (DRHP).
    • Capital Market Boost: The move supports India’s goal to become a global startup and financial hub by encouraging reverse-flipping.
    • Tax & Legal Alignment: Shifting domicile can help startups comply better with Indian tax and business laws.

    Note:

    Employee Stock Option Plans (ESOPs) are structured benefit schemes that grant employees the right to purchase shares of their company at a predetermined price—known as the exercise price—after completing a specific period.

     

    [UPSC 2025] Consider the following statements:

    Statement I: As regards returns from an investment in a company, generally, bondholders are considered to be relatively at lower risk than stockholders.

    Statement II: Bondholders are lenders to a company whereas stockholders are its owners.

    Statement III: For repayment purpose, bondholders are prioritized over stockholders by a company.

    Which one of the following is correct in respect of the above statements?

    (a) Both Statement II and Statement III are correct and both of them explain Statement I *

    (b) Both Statement I and Statement II are correct and Statement I explains Statement II

    (c) Only one of the Statements II and III is correct and that explains Statement I

    (d) Neither Statement II nor Statement III is correct

     

  • PM-WANI Scheme

    Why in the News?

    The TRAI ordered that public Wi-Fi hotspot operators under PM-WANI programme should not be charged more than twice what a residential broadband user paid for setting up a hotspot.

    What is the PM WANI Scheme?

    • Overview: PM Modi launched the Prime Minister Wi-Fi Access Network Interface (PM WANI) in December 2020.
    • Nodal agency: It is an initiative under the Department of Telecommunications (DoT).
    • Objective: To democratize internet access, particularly in remote and underserved areas.
    • Goals: It takes forward the goal of the National Digital Communications Policy, 2018 (NDCP) of creating a robust digital communications infrastructure.
    • Implementation: Leverages Public Data Offices (PDOs) established in public spaces like railway stations, banks, post offices, and more. Users can access the internet via Wi-Fi at these locations without requiring a SIM card.
    • PM-WANI ecosystem consists of four parts: 
      1. Public Data Office (PDO): It establishes the Wi-Fi Hotspots and provides internet access to users
      2. Public Data Office Aggregator (PDOA):  It provides authorisation and accounting services to PDOs.
      3. App Provider: It displays the available hotspots in the phone’s proximity.
      4. Central Registry: This overseen by the Centre for Development of Telematics maintains details of App Providers, PDOs, and PDOAs.
    • How to Utilize PM WANI?
      • To access PM WANI services, users must install the Data PM WANI app on their smartphones.
      • Through the app, users can connect to nearby public Wi-Fi PDOs.
      • This application facilitates seamless connectivity to PM-WANI-compliant Wi-Fi hotspots, empowering users to access broadband services conveniently.

    Role of Public Data Offices (PDOs):

    • The PM-WANI scheme includes a provision for establishing Public Data Offices (PDOs) by rural entrepreneurs in remote regions.
    • These PDOs procure internet bandwidth from telecom service providers or ISPs to offer Wi-Fi services at minimal charges.
    • This model enables individuals to access the internet even in areas with limited or no data connectivity.
    [2018] Which of the following is/are the aim/aims of “Digital India” Plan of the Government of India?

    1. Formation of India’s own Internet companies like China did.
    2. Establish a policy framework to encourage overseas multinational corporations that collect Big Data to build their large data centres within our national geographical boundaries.
    3. Connect many of our villages to the Internet and bring Wi-Fi to many of our school, public places and major tourists.

    Select the correct answer using the codes given below:

    (a) 1 and 2 only

    (b) 3 only

    (c) 2 and 3 only

    (d) 1, 2 and 3

     

  • PRASHAD Scheme

    Why in the News?

    The long-awaited Chamundi Hills development project in Karnataka is finally gaining momentum under the Pilgrimage Rejuvenation and Spiritual Heritage Augmentation Drive (PRASHAD) scheme.

    About the PRASHAD Scheme:

    • Launch: It was launched in 2014–15 by the Ministry of Tourism.
    • Core Objective: It aims to revitalize pilgrimage sites and develop spiritual tourism infrastructure across India.
    • Scope and Mission: In 2017, PRASHAD was upgraded to a National Mission, integrating features of the HRIDAY scheme to create a unified heritage and spiritual site development model.
    • Cultural Focus: The scheme emphasises cultural preservation, community involvement, and promoting both domestic and international spiritual tourism.
    • Implementation:
      • Executing Agencies: Projects are executed by state-level agencies appointed by the respective state or union territory governments.
      • Funding Model: The scheme offers 100% central financial assistance for eligible infrastructure and development components.
      • Public-Private Support: It encourages Corporate Social Responsibility (CSR) contributions and Public-Private Partnerships (PPP) to expand sustainability and local ownership.
      • Centre-State Collaboration: Implementation is designed to ensure close cooperation between central and state governments while respecting local cultural and religious traditions.

    Key Features:

    • Infrastructure Development: Roads, drinking water, sanitation, solid waste management, lighting, and public conveniences at pilgrimage sites.
    • Connectivity Enhancement: Improved rail, road, and air links to facilitate easier access for pilgrims.
    • Pilgrim Facilities: Creation of accommodation, food courts, wayfinding systems, and security measures for safe and hygienic pilgrimages.
    • Cultural Conservation: Restoration of temples, monuments, ghats, and sacred lakes; integration of cultural traditions in tourism.
    • Community Empowerment: Skill training for locals, development of tourism-linked jobs, and stakeholder participation in project design and operation.
    • Sustainability Focus: Use of eco-friendly technologies, green energy, and promotion of responsible tourism to reduce environmental impact.
    [UPSC 2022] The Prime Minister recently inaugurated the new Circuit House near Somnath Temple at Veraval. Which of the following statements are correct regarding Somnath Temple?

    1. Somnath Temple is one of the Jyotirlinga shrines.

    2. A description of Somnath Temple was given by Al-Biruni.

    3. Pran Pratishtha of Somnath Temple (installation of the present day temple) was done by President S. Radhakrishnan.

    Select the correct answer using the code given below:

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