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Type: Prelims Only

  • India’s Power Demand, Solar Push and Coal Use amid El Niño 

    Why in the News

    India is preparing to meet rising summer power demand and possible El Niño conditions by relying on a mix of augmented solar capacity and coal based thermal power.

    Key Highlights

    • Peak power demand reached around 256 GW (April 2026)
    • Thermal power share: about 66.9 percent
    • Solar contribution increased to about 21.5 percent
    • Record addition of 44.61 GW solar capacity in 2025–26

    Role of Solar Energy

    • Rapid increase in installed capacity
    • Solar share in generation rising steadily:
      • Around 5.6 percent (2022)
      • Around 9 percent (2025)
    • Limitations:
      • Intermittent nature
      • Lack of sufficient battery storage
      • Grid stability concerns

    Role of Coal Based Thermal Power

    • Continues to be dominant source of electricity
    • Ensures base load supply during peak demand
    • Current coal stock: ~200 million tonnes
    • Sufficient for about 80 plus days

    What is El Niño?

    • A climate phenomenon involving warming of Pacific Ocean waters
    • Leads to:
      • Weaker monsoon in India
      • Longer dry spells and heatwaves
    [2023] Consider the following statements: 
    Statement-IIndia, despite having Uranium deposits, depends on coal for most of its electricity production. 
    Statement-II:Uranium, enriched to the extent of at least 60%, is required for the production of electricity. 
    Which one of the following is correct in respect of the above statements 
    [A] Both Statement-I and Statement – II are correct and Statement- II is the correct explanation for Statement- I 
    [B] Both Statement I and Statement II are correct and Statement-II is not the correct explanation for Statement-I. 
    [C] Statement- I is Correct but Statement-II is incorrect. 
    [D] Statement-I incorrect but Statement-II is correct.

  • RBI’s New Bad Loan Norms (ECL Framework) 

    Why in the News

    The Reserve Bank of India has introduced a new framework based on Expected Credit Loss (ECL) for provisioning of bad loans, which may lead to a short term increase in costs for banks.

    What is Expected Credit Loss (ECL)

    • A forward looking approach to estimate loan losses
    • Considers future risk of default rather than past defaults
    • Aligns with global standard IFRS 9

    Key Features of New Norms

    Three Stage Classification of Loans

    • Stage 1: Low or no credit risk
      • Provision based on 12 month ECL
    • Stage 2: Significant increase in credit risk
      • Provision based on lifetime ECL
    • Stage 3: High credit risk or default
      • Provision based on lifetime ECL

    Important Changes

    • Borrower Level NPA Classification: If one loan becomes NPA, all loans of the borrower become NPA
    • NPA Definition: Loan classified as NPA if overdue for more than 90 days
    • Upgrade Rule: Borrower must repay all dues to become a standard asset again

    Impact on Banks

    • Possible increase in provisioning requirements
    • Short term reduction in profits
    • Impact on capital (CET 1 ratio)
    • Higher impact on:
      • Microfinance lending
      • Unsecured retail loans

    Key Terms

    • Non Performing Asset (NPA): Loan where repayment is overdue beyond 90 days.
    • Provisioning: Setting aside funds by banks to cover potential loan losses.
    • CET 1 (Common Equity Tier 1): Core capital of banks used to absorb losses.
    [2021] Consider the following statements: 
    1.Capital Adequacy Ratio (CAR) is the amount that banks have to maintain in the form of their own funds to offset any loss that banks incur if any account-holders fail to repay dues. 
    2.CAR is decided by each individual bank. 
    Which of the statements given above is/are correct? 
    [A] 1 only [B] 2 only [C] Both 1 and 2 [D] Neither 1 nor 2

  • Komagata Maru Incident (1914) 

    Why in the News

    The Komagata Maru incident (1914) has resurfaced in public discourse after references in global media, highlighting racist immigration policies under colonial rule and its role in India’s freedom movement.

    About Komagata Maru

    • Ship: Komagata Maru (also called Guru Nanak Jahaz)
    • Chartered by: Gurdit Singh
    • Origin: Hong Kong
    • Destination: Vancouver, Canada
    • Passengers: 376 Indians
      • Majority Sikhs, along with Muslims and Hindus

    Timeline of Events

    • April 1914: Ship leaves Hong Kong
    • May 1914: Arrives at Vancouver
    • Only 24 passengers allowed entry
    • Remaining passengers denied entry and kept on ship for 2 months
    • July 1914: Ship forced to return to India

    Reason for Denial of Entry

    • Canadian law: Continuous Journey Regulation (1908)
      • Required migrants to travel directly without stops from their country
    • Aimed to restrict Asian immigration
    • Influenced by racist groups like the Asiatic Exclusion League

    Events on Return to India

    • Ship reached Budge Budge (near Kolkata)
    • British authorities tried to send passengers to Punjab
    • Passengers resisted
    • Police opened fire
      • 20 people killed
      • Many injured
    [2014] The Ghadr (Ghadar) was a: 
    (a) revolutionary association of Indians with headquarters at San Francisco. 
    (b) nationalist organization operating from Singapore. 
    (c) militant organisation with headquarters at Berlin. 
    (d) Communist movement for India’s freedom with headquarters at Tashkent.

  • FDI Inflows in India 

    Why in the News?

    India’s Foreign Direct Investment (FDI) inflows are expected to cross 90 billion dollars in FY 2025–26, according to the Department for Promotion of Industry and Internal Trade (DPIIT).

    Key Facts

    • FDI inflows (April–February 2025–26): 88 billion dollars
    • Expected total for FY 2025–26: over 90 billion dollars
    • Indicates strong investor confidence in India

    What is Foreign Direct Investment (FDI)

    • Investment by a foreign entity in:
      • Business operations
      • Assets in another country
    • Involves long term interest and control

    Key Drivers of Rising FDI

    • Economic reforms by the government
    • Expansion of Free Trade Agreements (FTAs)
    • Strong economic growth prospects
    • Improved ease of doing business

    Types of FDI

    • Greenfield Investment: Setting up new business operations
    • Brownfield Investment: Investment in existing companies or assets

    Role of DPIIT

    • Works under the Ministry of Commerce and Industry
    • Responsible for:
      • FDI policy formulation
      • Promotion of industrial development
      • Facilitating investment inflows

    Significance

    • Boosts economic growth and employment
    • Brings technology and expertise
    • Strengthens infrastructure and manufacturing
    • Improves balance of payments position
    [2020] With reference to Foreign Direct Investment in India, which one of the following is considered its major characteristic? 
    (a) It is the investment through capital instruments essentially in a listed company. 
    (b) It is a largely non-debt creating capital flow. 
    (c) It is the investment which involves debt-servicing. 
    (d) It is the investment made by foreign institutional investors in the Government securities.

  • FII Outflows and Rupee Depreciation 

    Why in the News

    Foreign investors have withdrawn ₹60,847 crore from Indian equity markets in April 2026, leading to a sharp depreciation of the Indian rupee, which touched nearly ₹95 per dollar.

    Foreign Institutional Investor (FII)

    While the terms FPI and FII are often used interchangeably, there is a technical distinction based on the 2014 SEBI regulations which merged several categories into the FPI regime.

    • Definition: FIIs are large entities (like Pension Funds, Mutual Funds, Investment Trusts) registered in a country outside India that propose to invest in Indian financial markets.
    • Consolidation: Previously, there were FIIs and QFIs (Qualified Foreign Investors). To simplify the process, SEBI introduced the Foreign Portfolio Investor (FPI) Regulations, 2014, effectively making FIIs a part of the broader FPI category.
    • Key Distinction: FPI is the investment, whereas FII is the institutional entity that performs the investment.
    FeatureFDIFPIFII
    Primary GoalManagement control & long-term growthCapital gains & dividendsInstitutional portfolio diversification
    Investment AssetPhysical assets (factories, land)Financial assets (stocks, bonds)Financial assets (stocks, bonds)
    DurationLong-termShort to Medium-termShort to Medium-term
    ComplexityHigh (involves legal & operational setup)Low (easy to trade via exchanges)Low (but requires regulatory registration)
    VolatilityVery LowHighHigh
    Who Invests?Multinational corporationsIndividuals or InstitutionsLarge organizations (e.g., Pension Funds)
    [2022] Consider the following statements: 
    1 Tight monetary policy of US Federal Reserve could lead to capital flight. 
    2 Capital flight may increase the interest cost of firms with existing External Commercial Borrowings (ECBs). 
    3 Devaluation of domestic currency decreases the currency risk associated with ECBs. 
    Select the correct answer using the code given below: 
    (a) 1 and 2 only (b) 2 and 3 only (c) 1 and 3 only (d) 1, 2 and 3

  • India’s First Green Methanol Plant 

    Why in the News

    India is set to establish its first green methanol plant at Kandla using the invasive plant Prosopis juliflora as feedstock. The project aims to produce clean marine fuel and support India’s transition to green shipping.

    About Prosopis juliflora

    • A Mexican-origin invasive species
    • Known locally as:
      • Vilayati Keekar (North India)
      • Gando Baval (Gujarat)
    • Introduced in India:
      • 1920s by British
      • Later in 1961 in Gujarat to check desertification
    • Problem:
      • Replaces native grasses
      • Harms biodiversity in Banni grasslands (Kutch)

    About Green Methanol

    • Methanol produced using renewable biomass instead of fossil fuels
    • Used as marine fuel replacing bunker oil
    • Helps reduce emissions significantly

    Key Features of the Project

    • Location: Deendayal Port Authority
    • Production capacity: 5 tonnes per day
    • Developed by: Thermax and Ankur Scientific
    • Feedstock:
      • Prosopis juliflora
      • Other biomass like bagasse and cotton stalk
    [2018] Why is a plant called Prosopis juliflora often mentioned in news? 
    (a) Its extract is widely used in cosmetics. 
    (b) It tends to reduce the biodiversity in the area in which it grows. 
    (c) Its extract is used in the synthesis of pesticides. 
    (d) None of the above.

  • Revenue Deficit and Fiscal Stress in States 

    Why in the News

    The Ministry of Finance in its Monthly Economic Review (April 2026) has warned that several Indian States with revenue deficits and high debt burdens may face fiscal stress, especially during economic shocks.

    What is Revenue Deficit

    • Occurs when revenue expenditure exceeds revenue receipts
    • Revenue expenditure includes:
      • Salaries
      • Pensions
      • Subsidies
      • Interest payments
    • Revenue receipts include:
      • Taxes
      • Fees
      • Non tax revenues

    Key Findings

    • Out of 18 major States analysed:
      • 9 States projected to have revenue deficit
      • 7 States projected to have revenue surplus
      • 1 State in revenue balance

    States with Revenue Deficit (Important)

    • Himachal Pradesh, Punjab, Kerala, Andhra Pradesh, Rajasthan, Haryana, Karnataka, Maharashtra, and Chhattisgarh.
    • Punjab has highest interest burden (22.8 percent of revenue receipts)

    States with Revenue Surplus

    • Odisha, Jharkhand, Uttar Pradesh, Goa, Gujarat, Uttarakhand, Telangana, and Bihar

    Key Concept

    • Golden Rule of Fiscal Policy
      • Governments should borrow only for capital expenditure
      • Revenue deficit should ideally be zero

    Fiscal Concerns

    • High interest payments reduce fiscal flexibility
    • Revenue deficit States may:
      • Cut productive expenditure (capital spending)
      • Seek higher central transfers
    • Limited ability to respond to economic shocks
    [2025] Suppose the revenue expenditure is ₹ 80,000 crores and the revenue receipts of the Government are ₹ 60,000 crores. The Government budget also shows borrowings of ₹ 10,000 crores and interest payments of ₹ 6,000 crores. Which of the following statements are correct? 
    I. Revenue deficit is ₹ 20,000 crores. 
    II. Fiscal deficit is ₹ 10,000 crores. 
    III. Primary deficit is ₹ 4,000 crores. 
    Select the correct answer using the code given below. 
    [A] I and II only [B] II and III only [C] I and III only [D] I, II and III

  • Supreme Court on Abortion Law for Minor Rape Victims 

    Why in the News

    The Supreme Court of India has asked the Union government to consider removing the time limit on abortion in cases involving minor rape survivors, while hearing a case allowing termination of a 30 week pregnancy of a 15 year old survivor.

    Background

    • Under the Medical Termination of Pregnancy Act, 1971 (amended in 2021):
      • Abortion allowed up to 24 weeks for special categories
        • Rape survivors
        • Minors
        • Women with disabilities

    Key Observations of the Court

    • State or doctors cannot decide for the survivor
    • Decision should rest with:
      • Survivor
      • Parents or guardians
    • Emphasised reproductive autonomy and dignity
    • Forcing continuation of pregnancy may cause lifelong trauma

    Court’s Suggestions

    • Amend law to:
      • Remove time limit for abortion in minor rape cases
      • Ensure speedy trial (within one week)
      • Provide compensation to victim (including property of accused)

    Legal and Constitutional Aspects

    Article 21

    • Right to life and personal liberty
    • Includes reproductive autonomy and bodily integrity
    • Reproductive Rights: Recognised as part of privacy and dignity

    Key Issues Highlighted

    • Conflict between: Foetal rights vs rights of the survivor
    • Importance of informed consent
    • Role of doctors: Provide medical guidance, not impose decisions

    Important Concepts

    • Medical Termination of Pregnancy (MTP): Legal framework governing abortion in India
    • Reproductive Autonomy: Right of a woman to make decisions about her body and pregnancy
    [2019] Which Article of the Constitution of India safeguards one’s right to marry the person of one’s choice? 
    (a) Article 19 (b) Article 21 (c) Article 25 (d) Article 29

  • Sabarimala Review and Religious Reform 

    Why in the News

    The Supreme Court of India, while hearing the Sabarimala review case, observed that courts cannot reform religion, even as debates continue on balancing religious freedom and constitutional rights.

    Background of the Case

    • Concerns entry of women aged 10 to 50 years into the Sabarimala Temple
    • 2018 judgment allowed entry, upholding right to worship
    • Review petitions challenge this verdict

    Key Observations by the Court

    • Courts cannot initiate religious reform
    • Reform must come from within religion or society
    • Need to balance:
      • Religious practices
      • Constitutional values

    Arguments Presented

    For Reform (Indira Jaising’s View)

    • Religion must evolve to remain relevant
    • Equality (Article 14) and dignity (Article 21) cannot be subordinate to religion
    • Religious practices must align with constitutional morality

    Concerns Raised by Judges

    • Reforms should not destroy core religious identity
    • Need to avoid excessive interference in doctrinal matters

    Key Constitutional Provisions

    • Article 14: Right to equality before law
    • Article 21: Right to life and dignity
    • Article 25: Freedom of religion and worship

    Important Legal Concepts

    • Essential Religious Practices Test
      • Determines which practices are essential to a religion
      • Only essential practices get constitutional protection
    • Constitutional Morality: Principles like equality, dignity, and justice guide interpretation of laws
    [2019] Which Article of the Constitution of India safeguards one’s right to marry the person of one’s choice? 
    (a) Article 19
    (b) Article 21
    (c) Article 25
    (d) Article 29

  • Supreme Court on Hate Speech 

    Why in the News?

    The Supreme Court of India, in an April 2026 judgment, highlighted that hate speech and rumour mongering threaten the constitutional value of fraternity, but declined to direct enactment of new laws, emphasizing effective enforcement of existing legal provisions.

    Key Observations of the Court

    • Hate speech arises from an “us versus them” mindset
    • It promotes exclusion and discrimination
    • Undermines fraternity and unity in a diverse society
    • Considered against constitutional morality and civilisational ethos
    • Linked to the idea of “Vasudhaiva Kutumbakam” (world is one family)

    Constitutional Provisions Involved

    • Article 19(1)(a): Guarantees freedom of speech and expression
    • Article 19(2): Allows reasonable restrictions on grounds like:
      • Public order
      • Decency
      • Morality
      • Sovereignty and integrity
    • Fraternity (Preamble): Ensures unity and sense of brotherhood among citizens

    Legal Position on Hate Speech

    • No single comprehensive law exclusively defining hate speech
    • Covered under various provisions:
      • Indian Penal Code sections related to
        • Promoting enmity
        • Public mischief
      • IT laws for online content

    Court’s Stand

    • Court cannot legislate new laws
    • Responsibility lies with: Legislature and Executive
    • Focus should be on better implementation of existing laws

    Key Concepts

    • Hate Speech: Speech that incites hatred, discrimination, or violence against groups
    • Fraternity: A constitutional value promoting unity, dignity, and brotherhood
    [2017] The mind of the makers of the Constitution of India is reflected in which of the following? 
    (a) The Preamble 
    (b) The Fundamental Rights 
    (c) The Directive Principles of State Policy 
    (d) The Fundamental Duties