The August 2026 MPC minutes show growing concern over rising inflation. Although the repo rate was kept unchanged at 5.25%, some members see a possible rate hike later in 2026-27 as inflation is projected to peak at 5.9% in Q3.
MPC: Key Prelims Facts
Legal basis: RBI Act, 1934, amended in 2016.
Composition: 6 members
3 from RBI
3 external members appointed by the Central Government.
Chairperson: RBI Governor.
Voting: One vote per member; Governor has a casting vote in case of a tie.
Minutes: Published on the 14th day after the meeting.
Mandate: Set the policy repo rate to achieve the inflation target.
August 2026 Policy Review
Repo rate: 5.25%, unchanged.
Growth forecast: Raised from 6.6% to 6.7%.
Inflation forecast: Lowered from 5.1% to 5%.
Q3 inflation projection:5.9%.
Inflation is expected to decline after the Q3 peak, supporting the decision to wait rather than tighten immediately.
Core Inflation
Core inflation = CPI inflation excluding food and fuel.
It captures relatively persistent, demand-driven price pressures that monetary policy can influence.
Core excluding precious metals additionally removes gold and silver, preventing bullion price movements from distorting the underlying inflation signal.
Second-Round Inflation Effects
A first-round shock, such as higher oil prices, can spread through the economy:
Higher oil prices → higher input costs → higher production costs → higher prices of goods/services → broader inflation
This transmission is called a second-round effect.
De-Anchoring of Inflation Expectations
When households and firms stop believing inflation will return to the 4% target, they may:
Changing CPI basket: Changes in CPI weights can affect historical comparisons.
“[2024, GS3, 10 marks] 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.”
[2017]Which of the following statements is/are correct regarding the ‘Monetary Policy Committee (MPC)? 1. It decides the RBI’s benchmark interest rates. 2. It is a 12-member body including the Governor of RBI and is reconstituted every year. 3. It functions under the chairmanship of the Union Finance Minister. Select the correct answer using the code given below:
China has completed the first phase of construction on Antelope Reef in the Paracels archipelago, building a man-made island in the disputed South China Sea that analysts say will form part of its largest military base. The tension it exposes is that Chinese state media describe the feature as serving civilian needs such as weather forecasting and scientific research, while satellite imagery shows a wharf, a deep water harbour, a helicopter pad and the first excavation for a runway.
What has China built on Antelope Reef?
The feature: Antelope Reef is a reef in the Paracels archipelago in the northern South China Sea, now reclaimed into a man-made island.
The stage reached: The first phase of construction is complete, with barges and dredgers having left after at least six months of work in the waterway.
What is visible: Satellite images reviewed by Reuters show the reclaimed feature in outline for the first time, with building work started in the southeast corner including a helicopter pad.
The imagery source: The images showing the southeast corner construction were taken on 19 July by Vantor, a commercial provider of satellite images.
What is the Paracels archipelago?
What it is: The Paracels are a group of islands, reefs and banks in the northern South China Sea, distinct from the Spratlys archipelago further south.
Who holds them: China has occupied all the Paracels since 1974, when it forced off the navy of the former South Vietnam, and Vietnam claims the entire grouping as its own.
What is a naval bastion?
The concept: A bastion is a protected ocean area close to home ports within which a navy shields its nuclear-armed ballistic missile submarines from rival attack.
Why it matters here: Antelope could help support any Chinese bid to create bastions in the South China Sea, avoiding the need to send submarines out into the western Pacific where they are exposed.
What do the satellite images actually show?
Island dimensions: The reclaimed island is nearly 6 km long, with a straight line of coast longer than 3 km that some analysts see as a potential runway.
Runway work under way: A study published this week by the Washington-based Center for Strategic and International Studies (CSIS) found that the first excavation work for a new runway appeared to have already started.
Harbour infrastructure: A wharf stretching 680 m fronts a deep water harbour, with one satellite image showing a coast guard ship alongside.
Aviation infrastructure: Construction of buildings has started in the southeast corner of the island, including a helicopter pad.
The timeline of the work: An open source intelligence tracker first highlighted dredging at the reef in early January and reported spotting initial signs of work in December, with dredgers and barges departing after at least six months.
Official silence: China’s defence ministry did not immediately respond to a request for comment, and China has yet to acknowledge construction of a new military base.
Why is the northern South China Sea strategically different from the Spratlys?
The Taiwan linkage: The northern part of the South China Sea would be particularly important in a Taiwan conflict scenario, which places Antelope Reef in an ideal position.
Command priority raised: The importance of the South China Sea and of the Southern Theater Command has been elevated in the last year by the Central Military Commission, China’s top military panel, largely in relation to Taiwan.
Defensibility: Antelope could prove one of the Chinese military’s most important features in the South China Sea, larger than neighbouring Woody Island and easier to defend than the network of bases further south in the Spratlys.
Basing for strategic assets: Chinese military planners might prefer to keep weapons such as H-6 strategic bombers in the Paracels and closer to the Chinese mainland rather than on the Spratlys.
The existing Paracels network: Woody Island has served as the traditional administrative centre for China in the South China Sea and has at times housed jet fighters and surface-to-air missiles, while Triton Island, also in the Paracels, hosts extensive long-range surveillance devices.
What does the build-up mean for submarine operations and nuclear deterrence?
The bastion function: Antelope could support Chinese efforts to create protected ocean areas in the South China Sea to defend its nuclear-armed ballistic missile submarines.
The protection logic: Bastions close to home ports shield submarines from exposure to rival attack, removing the need to send them into the western Pacific.
The surveillance role: The island build-up is likely to house extensive surveillance equipment.
The effect on rivals: That surveillance could complicate submarine operations by the United States and Vietnam, both of which are active in the area.
The escalation implication: A feature that protects a second-strike capability changes the risk calculus of any confrontation, since attacking it touches nuclear deterrence rather than only conventional assets.
Why do China’s stated purpose and the observed build-out point in different directions?
The official account: Chinese state media have said Antelope will serve civilian needs such as weather forecasting and scientific research.
The scholarly framing: A Chinese South China Sea scholar described the construction work as “modest” in an opinion piece published in the official China Daily in June, arguing that rather than militarisation the purpose is peaceful and constructive, making the waters safer for everyone who depends on them.
The precedent for that framing: The same explanation mirrors China’s previous accounts of its build-up in the Spratlys, in waters also claimed by Vietnam, the Philippines, Malaysia, Taiwan and Brunei.
The professional reading: Regional security analysts and military attaches say the feature is more likely to strengthen China’s military hold on the northern part of the vital waterway.
What the physical evidence supports: A 680 m wharf on a deep water harbour, a helicopter pad, a 3 km straight coastline and runway excavation are assets of military utility, not of weather forecasting.
The unresolved point: China has not acknowledged constructing a military base, so the gap between the stated purpose and the observed capability remains formally unclosed.
Which states contest these waters and on what basis?
Vietnam, the Paracels claim: Vietnam claims the entire Paracels grouping as its own, and China took full control of the group in 1974 by forcing off the navy of the former South Vietnam.
Vietnam, the specific protest: Vietnam’s Foreign Ministry has previously asserted its sovereignty claim to Antelope, saying in March that it resolutely opposes such actions and has made representations.
Vietnam, the counter build-up: Vietnam has moved in recent years to expand its own network of bases in the Spratlys archipelago.
The Philippines, Malaysia, Taiwan and Brunei: All four join Vietnam in claiming waters in the Spratlys where China has previously built up features.
The United States, the outside actor: The completion shows the South China Sea as an increasingly militarised arena of contest between China and the United States and its allies, as both jostle for advantages that could prove critical in any future conflict over Taiwan.
“[2022] Which one of the following statements best reflects the issue with Senkaku Islands, sometimes mentioned in the news?
(a) It is generally believed that they are artificial islands made by a country around South China Sea.
(b) China and Japan engage in maritime disputes over these islands in East China Sea.
(c) A permanent American military base has been set up there to help Taiwan to increase its defence capabilities.
(d) Though International Court of Justice declared them as no man’s land, some South-East Asian countries claim them.
India’s buffalo meat exports rose 25.6% to $5.1 billion in 2025-26, with unit value rising to $3,591 per tonne. Exports grew another 66.6% in Q1 2026-27.
Meat Export Development Fund
Purpose: Export promotion fund for meat, financed through an exporter levy.
Levy: APEDA charges ₹250 per tonne on frozen and chilled buffalo meat exports since 29 October 2025.
A Lancet Planetary Health study finds that older adults in India, China, Pakistan and Bangladesh could face dangerous heat for up to 3 months at 3°C warming. Using age-specific heat tolerance thresholds shows previous estimates may have underestimated risk by at least two-fold.
Key Concepts
Heat Stress
Occurs when the body cannot shed enough heat to maintain normal core temperature.
Depends on temperature + humidity + duration, not temperature alone.
High humidity reduces sweat evaporation and increases risk.
Wet-Bulb Temperature
Measures the lowest temperature achievable through evaporative cooling.
Combines heat and humidity.
Around 35°C wet-bulb temperature is the theoretical survivability limit for a healthy person at rest, while vulnerable groups face risk at lower levels.
Heat Action Plan
City/State-level system covering:
Early warnings and colour-coded alerts
Changes in work/school timings
Cooling shelters and water
Hospital preparedness
Study Findings
Examined 15-39, 40-59 and 60+ age groups.
Modelled warming from 1°C to 4°C.
At 3°C warming, over 80% of India’s older population could experience at least 180 hours of intolerable heat annually.
Delhi and the Indo-Gangetic Plain could see nearly 1,000 hours at 1.5°C warming and over 2,000 hours at 3°C.
Heat exposure is concentrated mainly between May and September and increasingly extends into nights.
From 1 September, eligible City Gas Distributors (CGDs) will receive an additional 200 Standard Cubic Metres (SCM) of cheaper Administered Price Mechanism (APM) gas for every new billed domestic Piped Natural Gas (PNG) connection.
APM Natural Gas
Administered Price Mechanism (APM): Domestic gas from nomination fields of national oil companies, priced by the government.
Generally cheaper than imported Liquefied Natural Gas (LNG).
Piped Natural Gas (PNG) and Compressed Natural Gas (CNG) receive priority allocation.
Price is linked to the Indian crude basket, with a floor and ceiling.
City Gas Distribution
City Gas Distribution (CGD): Pipeline network supplying gas to households, industries, commercial users and vehicles.
Geographical areas are awarded through competitive bidding by the Petroleum and Natural Gas Regulatory Board (PNGRB).
Piped Natural Gas
Piped Natural Gas (PNG): Natural gas supplied directly through pipelines and metered like a utility.
Provides an alternative to Liquefied Petroleum Gas (LPG) cylinders for households.
New Incentive
200 SCM of APM gas for every incremental billed domestic PNG connection.
Effective 1 September.
Aims to reduce LNG sourcing costs and accelerate household PNG adoption.
Benefit is linked to actual billed connections, not merely network expansion.
Key Challenges
Right-of-way and road-cutting permissions
High household connection costs
Competition from subsidised LPG
Limited domestic APM gas availability
Volatile imported LNG prices
Natural gas remains outside Goods and Services Tax (GST)
Low viability in remote and low-demand areas
Foundational Context: The Natural Gas Sector in India
Share in the energy mix: Natural gas accounts for roughly 6 percent of India’s primary energy mix, against a stated national target of raising it to 15 percent by 2030.
Import dependence: India imports about half of its natural gas requirement in the form of liquefied natural gas, delivered through regasification terminals on the west and east coasts.
Two price regimes: Domestically produced gas from nomination fields is sold at the administered price, while gas from deepwater, ultra deepwater and high pressure high temperature fields and imported gas are sold at market linked prices.
Allocation priority: Domestic piped natural gas for households and compressed natural gas for transport hold first priority in the allocation of administered price gas.
Network build out: Successive bidding rounds by the sector regulator have authorised city gas distribution networks covering the overwhelming majority of India’s population across more than 300 geographical areas.
National gas grid: Trunk transmission pipelines are being extended into the eastern and north eastern regions to create a single national gas grid with a unified tariff.
Statutory Framework Governing the Gas Sector
Petroleum and Natural Gas Regulatory Board Act, 2006: Establishes the sector regulator and gives it authority over downstream refining, processing, storage, transportation, distribution and marketing of petroleum products and natural gas.
Section 16 of the Petroleum and Natural Gas Regulatory Board Act, 2006: Provides for authorisation of entities to lay, build, operate or expand city gas distribution networks.
Section 32 of the Petroleum and Natural Gas Regulatory Board Act, 2006: Provides that appeals against the regulator’s decisions lie to the Appellate Tribunal for Electricity, with a statutory disposal timeline of 90 days.
Oilfields (Regulation and Development) Act, 1948: Governs the regulation of oilfields and the grant of mining leases for petroleum and natural gas.
Petroleum and Natural Gas Rules, 1959: Prescribe the terms for grant of exploration licences and mining leases for petroleum and natural gas.
Petroleum Act, 1934 and the Petroleum Rules, 2002: Govern the import, transport, storage and production of petroleum and the safety conditions attached to them.
Back2Basics: Petroleum and Natural Gas Regulatory Board (PNGRB)
Governing Act: The Petroleum and Natural Gas Regulatory Board Act, 2006.
Established: Constituted in 2007 under that Act, functioning under the Ministry of Petroleum and Natural Gas.
Jurisdiction: Regulates downstream activities only, covering refining, processing, storage, transportation, distribution, marketing and sale of petroleum products and natural gas.
Exclusion from its remit: It does not regulate upstream exploration or production, which falls to the Directorate General of Hydrocarbons and the Ministry directly.
Core functions: Protecting consumer interest, ensuring competitive markets for gas, authorising city gas distribution networks and pipelines, and fixing transportation tariffs.
First instance adjudication: The Board is the first instance forum for disputes on tariffs, access and authorisation.
Appellate forum: Appeals lie to the Appellate Tribunal for Electricity (APTEL) under Section 32 of the Act.
Government Initiatives
City Gas Distribution bidding rounds: Successive rounds conducted by the regulator to authorise distributors for new geographical areas, with minimum work programme commitments on domestic connections, compressed natural gas stations and pipeline length.
Pradhan Mantri Urja Ganga: The Jagdishpur to Haldia and Bokaro to Dhamra pipeline project extending the gas grid to eastern India.
North East Gas Grid: A capital grant supported trunk pipeline network connecting the eight north eastern States to the national gas grid.
Sustainable Alternative Towards Affordable Transportation (SATAT): Promotes compressed biogas production and its sale through the existing fuel retail network as a substitute for compressed natural gas.
Unified tariff for natural gas pipelines: A zonal tariff structure that lowers the delivered cost of gas for consumers located far from the source, aiding the eastern and southern build out.
Hydrocarbon Exploration and Licensing Policy and Open Acreage Licensing Policy: Provide a uniform licence for all hydrocarbons and allow bidders to carve out their own exploration blocks, aimed at raising domestic production.
Key Facts about India’s Gas Sector
Nodal ministry: The Ministry of Petroleum and Natural Gas.
Regulator: The Petroleum and Natural Gas Regulatory Board, constituted in 2007.
Upstream technical arm: The Directorate General of Hydrocarbons, which oversees exploration and production.
Administered price basis: Since April 2023 the administered price has been set at a fixed percentage of the Indian crude basket price, subject to a floor and a ceiling, following the recommendations of the Kirit Parikh Committee.
Gas in the primary energy mix: About 6 percent, against the target of 15 percent by 2030.
Compressed natural gas and domestic piped gas: Both receive 100 percent of their requirement from administered price gas under the priority allocation policy.
“[2019] Consider the following statements: 1. Petroleum and Natural Gas Regulatory Board (PNGRB) is the first regulatory body set up by the Government of India. 2. One of the tasks of PNGRB is to ensure competitive markets for gas. 3. Appeals against the decisions of PNGRB go before the Appellate Tribunals for Electricity. Which of the statements given above are correct? (a) 1 and 2 only (b) 2 and 3 only (c) 1 and 3 only (d) Neither 1 nor 2
Punjab’s Governor assented in April 2026 to the Jaagat Jot Sri Guru Granth Sahib Satkar (Amendment) Act, which provides punishment up to life imprisonment for sacrilege. The Act also covers words, signs, visible representations and electronic means, raising debate over the boundary between sacrilege and blasphemy.
What is the Act?
Applies to wilful and deliberate desecration of the Guru Granth Sahib.
Covers physical acts such as damage, defacement, burning, tearing and theft of Saroop.
Also covers certain spoken/written words, signs, visual representations and electronic acts.
Emerged against the backdrop of the 2015 Bargari and Burj Jawahar Singh Wala incidents.
Key Legal Provisions
Bharatiya Nyaya Sanhita, 2023 (BNS)
Replaced the Indian Penal Code, 1860 from July 2024.
Section 298: Offences involving injury/defilement of places of worship.
Section 299: Deliberate and malicious acts intended to outrage religious feelings, including through electronic means.
Section 299 carries forward the substance of former Section 295A, IPC.
Constitutional Provisions
Article 19(1)(a): Freedom of speech and expression.
Article 19(2): Permits reasonable restrictions, including for public order.
Article 25: Freedom of conscience and religion, subject to public order, morality and health.
Article 14: Equality before law.
Article 51A(e): Promotes harmony and common brotherhood.
Article 51A(h): Promotes scientific temper, inquiry and reform.
Secularism: Part of the basic structure of the Constitution.
Sacrilege vs Blasphemy
Sacrilege: Physical or conduct-based desecration of something sacred.
Blasphemy: Expressive acts showing contempt or irreverence towards religious beliefs.
Concern: Punjab’s law potentially merges the two by treating certain expressive acts as sacrilege.
Historical Background of Section 295A
Rangila Rasul pamphlet triggered controversy in Lahore in 1924.
Section 295A IPC was enacted in 1927 to criminalise deliberate and malicious acts intended to outrage religious feelings.
The Supreme Court upheld its constitutionality in Ramji Lal Modi v. State of Uttar Pradesh (1957) under the Article 19(2) public order exception.
Key Concerns
Chilling effect on speech, scholarship and satire.
Subjective interpretation of religious hurt.
Potential misuse by organised complainants.
Risk of vigilante violence despite criminalisation.
Digital communication expands the potential reach of the offence.
Different States may prescribe different levels of punishment.
The Reserve Bank of India (RBI) will close its concessional Foreign Currency Non-Resident Bank (FCNR(B)) deposit swap facility on 31 August, ahead of the original 30 September deadline. The facility has already mobilised $52.3 billion.
How does the facility work?
Dollar-rupee swap: Banks exchange foreign currency for rupees with RBI and reverse the transaction later at a pre-agreed rate.
RBI absorbs the hedging cost, making FCNR(B) deposits more attractive.
Helps banks manage exchange-rate risk while adding foreign currency resources to India.
What is FCNR(B)?
Foreign Currency Non-Resident Bank deposit: Term deposit held by a Non-Resident Indian (NRI) in a permitted foreign currency.
Principal and interest are repaid in the same foreign currency, so the depositor bears no exchange-rate risk.
Why was the facility closed early?
Announced on 5 June and operational from 8 June.
Mobilised $52.3 billion by 13 August.
Banks expect around $20 billion more by month-end.
RBI considered the response sufficient and further mobilisation unnecessary.
Key Risks
Asset-liability mismatch: Deposits may mature together while assets have different maturities.
Rollover risk: Banks need foreign currency when deposits mature.
Reversibility: FCNR(B) deposits are debt creating and can leave at maturity.
Currency risk: RBI assumes the hedging risk under the concessional swap.
Deployment mismatch: Foreign currency raised must find suitable foreign currency assets or be swapped.
Underlying external imbalance: Such inflows can temporarily ease pressure without addressing structural current account pressures.
“[2021] Consider the following: 1. Foreign currency convertible bonds 2. Foreign institutional investment with certain conditions 3. Global depository receipts 4. Non-resident external deposits Which of the above can be included in Foreign Direct Investments? (a) 1, 2 and 3 (b) 3 only (c) 2 and 4 (d) 1 and 4
The Ministry of Defence (MoD) signed a ₹1,943 crore contract with General Atomics Aeronautical Systems Inc. (GA-ASI) to lease two MQ-9B Sea Guardian aircraft to the Indian Navy for 30 months. This will increase the Navy’s leased HALE RPAS fleet from 2 to 4, enabling simultaneous surveillance of India’s eastern and western seaboards.
What is MQ-9B Sea Guardian?
HALE: High Altitude Long Endurance
RPAS: Remotely Piloted Aircraft System
Maritime variant of the MQ-9B family.
Provides persistent ISR (Intelligence, Surveillance and Reconnaissance) over large maritime areas.
Equipped with advanced sensors and surveillance payloads.
Can also undertake precision strikes.
Strengthens MDA (Maritime Domain Awareness) in the Indian Ocean Region.
Key Concepts
Maritime Domain Awareness (MDA)
Understanding activities in the maritime environment affecting security, safety, economy and marine environment.
It integrates: Radar, Satellites, Coastal surveillance, AIS (Automatic Identification System), and Airborne sensors
HALE RPAS
An unmanned aircraft operated remotely from a ground control station.
High altitude: Wider sensor coverage.
Long endurance: Prolonged surveillance with fewer interruptions.
Why is India Leasing MQ-9Bs?
Bridges the surveillance gap until the 31 purchased MQ-9Bs are delivered.
Provides immediate long endurance maritime surveillance.
Allows crews and maintainers to gain experience with a configuration similar to the future fleet.
Builds on the Navy’s existing experience with leased MQ-9As since 2020.
How Does It Strengthen the Navy?
HALE systems increase from 2 to 4.
Enables simultaneous surveillance of eastern and western maritime regions.
Improves persistent monitoring of the Indian Ocean Region (IOR).
Strengthens early detection and response to maritime threats.
2024 India-US MQ-9B Agreement
31 MQ-9B systems for India’s armed forces.
Approximate value: $3.5 billion.
Includes a Global MRO (Maintenance, Repair and Overhaul) facility in India.
Provides for some assembly in India.
Includes indigenous sourcing of components.
Supports defence indigenisation and domestic manufacturing.
[2025] With reference to Unmanned Aerial Vehicles (UAVs), consider the following statements: I. All types of UAVs can do vertical landing. II. All types of UAVs can do automated hovering. III. All types of UAVs can use battery only as a source of power supply. Which of the statements given above are correct? (a) Only one (b) Only two (c) All the three (d) None
A Parliamentary panel report has highlighted the limited success of Khanij Bidesh India Limited (KABIL) in acquiring critical mineral assets overseas. So far, KABIL has completed acquisitions only in Argentina, while bids in Australia and Chile have failed or lapsed.
The issue highlights India’s challenge of securing critical minerals abroad without a sufficiently strong financial and domestic processing ecosystem.
What is KABIL?
Established: 2019
Purpose: Acquire and develop critical mineral assets overseas.
PSUs involved:
National Aluminium Company Limited (NALCO)
Hindustan Copper Limited (HCL)
Mineral Exploration and Consultancy Limited (MECL)
Ministry: Ministry of Mines
Major success: Five lithium brine blocks in Catamarca, Argentina, acquired in January 2024.
Key Terms
Spodumene Concentrate
Concentrated hard-rock lithium ore.
Must be processed into lithium carbonate or lithium hydroxide for battery applications.
Lithium Brine
Lithium dissolved in underground saltwater.
Extracted by pumping brine to the surface and concentrating it, traditionally through evaporation.
Non-Binding Offer
Indicative offer that does not legally commit the bidder to complete the transaction.
Allows access to the seller’s data room and due diligence stage.
Why did KABIL struggle?
Limited financial capacity: KABIL cannot independently match large international bids.
No domestic processing ecosystem: India lacks sufficient commercial-scale lithium conversion capacity.
Price volatility: Lithium prices fluctuate sharply, making valuation difficult.
Slow consortium decisions: Multiple PSUs can delay due diligence and bidding.
Strong global competition: Integrated companies can pay more because they already possess refining and battery-making capacity.
Exploration risk: Acquiring mineral acreage does not guarantee commercially viable reserves.
Australia: Why India Lost the Bid
Indian consortium initially offered $184 million.
Revised offer: $233 million.
South Korea’s POSCO eventually offered $765 million.
POSCO’s integrated mining and processing ecosystem allowed it to justify a much higher valuation.
Core lesson:Mine ownership without processing capacity provides less strategic value.
Chile: Why the Opportunity Lapsed
KABIL’s proposed Chilean lithium investment required a large financial commitment. A joint bid with other PSUs could not complete due diligence within the available timeline.
This exposed two weaknesses:
Limited capital + slow decision-making = missed strategic opportunities.
How Other Countries Approach Critical Minerals
Japan: JOGMEC provides equity support and loan guarantees to Japanese companies.
China: Combines overseas mining acquisitions with strong domestic refining capacity.
South Korea: Vertically integrated companies such as POSCO connect mining with processing.
EU: Critical Raw Materials Act targets domestic extraction, processing and recycling.
USA: Minerals Security Partnership promotes joint financing of critical mineral projects.
At present, the missing midstream processing stage reduces the economic value India can derive from an overseas mine.
“[2025] Consider the following statements: I. India has joined the Minerals Security Partnership as a member. II. India is a resource-rich country in all the 30 critical minerals that it has identified. III. The Parliament in 2023 has amended the Mines and Minerals (Development and Regulation) Act, 1957 empowering the Central Government to exclusively auction mining lease and composite license for certain critical minerals. Which of the statements given above are correct? (a) I and II only (b) II and III only (c) I and III only (d) I, II and III
The 39th interim report of the Justice B.P. Katakey Committee has flagged Meghalaya’s failure to adopt a comprehensive policy for closing and fencing abandoned rat-hole coal mines. The issue has shifted from merely stopping illegal extraction to managing the dangerous legacy of thousands of abandoned mine pits.
What is Rat-Hole Mining?
A manual coal mining method involving a vertical pit and narrow horizontal tunnels.
Tunnels may extend 150 to 300 metres underground.
Side cutting: Tunnels follow exposed coal seams along hill slopes.
Box cutting: A vertical pit is dug first, followed by horizontal tunnels.
Meghalaya’s thin coal seams made this method economically attractive.
Why is Meghalaya’s Mine Closure Issue Important?
The NGT banned rat-hole coal mining in April 2014.
The Supreme Court in 2019 upheld the prohibition and held that the MMDR Act, 1957 applies to Meghalaya.
Thousands of abandoned pits remain uncovered and unfenced, creating risks to people and livestock.
East Jaintia Hills alone is reported to have around 60,000 mines across 360 villages.
Sulphur-rich coal contributes to acid mine drainage, affecting rivers such as the Lukha and Myntdu.
What is Mine Closure?
Mine closure means planned decommissioning of a mine after extraction, including:
Sealing and fencing mine openings
Backfilling and slope stabilisation
Land restoration
Water treatment
Revegetation
Post-closure monitoring
Indian mining regulations provide for both progressive closure during the life of a mine and final closure after mining ends. Financial assurance is maintained through an escrow mechanism for eligible mines.
Why is Meghalaya Different?
Meghalaya comes under the Sixth Schedule. Land and mineral resources are substantially associated with private and community ownership, creating a distinct governance framework compared with conventional state-leased mining.
Constitutional provisions to remember
Article 244(2): Administration of tribal areas under the Sixth Schedule.
Entry 23, State List: Regulation of mines and mineral development, subject to Entry 54.
Entry 54, Union List: Union regulation of mines and mineral development when Parliament declares it in public interest.
Article 21: Right to life includes the right to a clean and healthy environment.
Article 48A: State duty to protect the environment.
Article 51A(g): Fundamental duty to protect the environment.
Important Laws and Institutions
MMDR Act, 1957: Parent legislation governing mineral concessions, leases and mining regulation.
Mineral Conservation and Development Rules, 2017: Provide for progressive and final mine closure plans and financial assurance.
Mines Act, 1952: Deals with health, safety and working conditions in mines. The Directorate General of Mines Safety (DGMS) is the safety regulator.
National Green Tribunal Act, 2010: Created the National Green Tribunal (NGT), a specialised statutory environmental tribunal. Its 2014 order banned rat-hole mining in Meghalaya.
District Mineral Foundation: A non-profit trust in mining districts, funded through a levy on mining lessees, for the benefit of communities affected by mining.
“[2025, GS3, 15 marks] Mineral resources are fundamental to the country economy and these are exploited by mining. Why is mining considered an environmental hazard? Explain the remedial measures required to reduce the environmental hazard due to mining.”
