Economy

Current Affairs
UPSC Prelims 2025
Adil Baig AM
 Gross Fixed Capital Formation
➢ Sluggish growth of private Gross Fixed ➢ From 2011-12 onwards, however, private investment began to drop
Capital Formation (GFCF) as a percentage and hit a low of 19.6% of the GDP in 2020-21. And again started
rising
of GDP has been a significant challenge for
➢ Despite being a high saving economy, capital formation may not
the Indian economy. result in significant increase in output due to high capital-output ratio.
GFCF (also called Investment): ➢ Gross Fixed Capital Formation (GFCF) refers to growth in size of fixed
➢ From independence to LPG, investment capital in economy
remained slightly below/above 10% of ➢ Capital formation refers to process by which resources are invested
GDP. in assets like plants, equipment, machinery, etc. as well as in human
capital through education, health, skill, etc.
➢ It rose from around 10% of GDP in the ➢ Presently, Estimates of Gross Fixed Capital Formation are prepared
1980s to around 27% in 2007-08. with base year 1999-2000.
 Preston Curve
➢ India’s growth story is often analyzed
through the prism of Preston Curve.
➢ It was first proposed by American
sociologist Samuel H. Preston in 1975.
➢ It highlights that an increase in per
capita income of a country does not
cause much of a rise in the life
expectancy of its population beyond a
point.
➢ When a poor country begins to grow,
its per capita income rises and causes
increase in life expectancy initially due
to nutrition, sanitation and access
better healthcare.
➢ However, it begins to flatten out after a
certain point.
 WPI vs PPI
WPI Base Year Revision
➢ The Government has constituted a Working Group for base revision of the current series of
Wholesale Price Index (WPI) from base 2011-12 to 2022-23.
➢ Working Group will be chaired by Prof. Ramesh Chand, Member, NITI Aayog.
➢ It will also suggest improvement in compilation and presentation and recommend roadmap for
switch over from WPI to Producer Price Index (PPI).
Producer Price Index (PPI)
➢ The Producer Price Index measures the average change in prices received by producers for goods
and services sold domestically or exported.
➢ Types:
➢ Output PPI, which measures the prices of goods and services leaving production sites.
➢ Input PPI, which measures the prices of goods and services entering production processes.
➢ Advantages: It examines inflation from the perspective of industry and business, measuring price
changes before consumers purchase final goods and services.
➢ It has supplanted WPI in many countries because it aligns conceptually with the internationally
recognized System of National Accounts (SNA) for compiling measures of economic activity.
➢ It addresses issue of double counting, includes exports/imports, includes services
 Fiscal Health Index
➢ Recently, NITI Aayog released Fiscal Health Index (FHI) Report 2025 to
throw light on fiscal status at the sub national level and guide policy
reforms for sustainable and resilient economic growth.
➢ Index ranks States on the basis of composite fiscal index, which is based
on five major sub-indices and nine minor sub-indices
➢ States have been classified on the basis of the FHI score:
➢ Achiever: Greater than 50
➢ Front Runner: Greater than 40 & less than equal to 50.
➢ Performer: Greater than 25 & less than equal to 40
➢ Aspirational: Less than equal to 25
➢ Report analyses 18 major states using CAG data, excluding special
category and Himalayan states
➢ Period of the analysis: Financial Year 2022-23.
➢ Top Performing States: Odisha, Chhattisgarh and Goa.
➢ Non-tax revenue: Odisha, Jharkhand, Goa, and Chhattisgarh
demonstrated strong non-tax revenue generation, accounting for 21% of
their total revenue.
➢ Capital expenditure: Madhya Pradesh, Odisha, Goa, Karnataka, and UP
demonstrated stronger capital investment by allocating 27% of their
development funds to capital expenditure
➢ Debt Sustainability: West Bengal and Punjab showed concerning fiscal
trends with increasing debt-to GSDP ratios, raising serious questions
about their long-term debt sustainability.
 Variable Repo Rate (VRR)
➢ June 2024 - RBI injected ₹25,000 crore through Variable Rate Repo to address liquidity deficit in
the banking system abd a 56-day Variable Repo Rate (VRR) auction of ₹50,000 crore in Jan 2025
➢ The Variable Repo Rate is a type of liquidity adjustment tool used by RBI, where banks can borrow
funds for the short term at market-determined interest rates through an auction mechanism.
➢ Term "variable" means the rate is not fixed. It adjusts over time, often in response to changes in the
economy, inflation, or monetary policies and allows market forces to decide the borrowing
cost.
➢ VRR is a market-determined rate is generally lower than the Repo Rate (but not below the Reverse
Repo Rate) and applies to loans with durations exceeding one day usually up to 14 days or more
➢ When the RBI wants to infuse liquidity but banks are reluctant to borrow at the Repo Rate due to
lower market interest rates, it allows banks to borrow at the Variable Rate Repo (VRR).
Key Features of VRR:
➢ Flexible Tenure: 1-day to 14-days or even longer, depending on market needs.
➢ Auction-based: Encourages competition and transparency.
➢ Effective Tool: Balances short-term liquidity needs and monetary stability.
➢ Linked to LAF Corridor: Ensures rates remain within the repo-reverse repo band.
 Variable Rate Reverse Repo (VRRR)
➢ The Reserve Bank of India’s 14-day variable reverse repo rate (VRRR) auction in November saw
muted response from banks, predictably as it was announced at a time when the banking system
liquidity had slipped into deficit
➢ Banks parked only ₹2,476 crore of funds with the RBI, amounting to less than 10% of the notified
amount worth ₹25,000 crore.
➢ In November alone, RBI has conducted 13 VRRRs auctions of different tenures, most of which
received lukewarm response.
➢ VRRR represents the interest rate at which the RBI borrows funds from commercial banks for
varying durations, typically in the slots of 7, 14 and 28 days.
➢ The RBI sets the VRRR higher than the reverse repo rate but lower than the repo rate to attract
surplus funds from banks, thereby regulating the liquidity in the market.
➢ The central bank conducts periodic VRRR auctions, where banks submit bids indicating the amount
they wish to lend to the RBI and the desired interest rate.
➢ The RBI then determines the cut-off rate and the amount to be absorbed based on these bids,
with banks whose bids meet or exceed the cut-off rate being awarded the funds at the interest
rate determined by market dynamics.
Priority Sector Lending Norms
RBI revised Priority Sector Lending (PSL) guidelines to promote small loan in economically
disadvantaged districts with low average loan sizes.
Revised Priority Sector Lending Norms
➢ Incentive framework: It establishes an incentive framework for districts with lower credit flow
starting from FY25. More weight (125%) will be given to fresh priority sector loans in districts
where loan availability is low (less than Rs 9,000 per person).
➢ Disincentive framework: In districts with high loan availability (more than Rs 42,000 per person),
the loans will have a weight of 90%.
➢ MSME loans: All bank loans to MSMEs shall qualify for classification under PSL.
➢ Higher Loan Limits for Education: The RBI has increased the loan limit under PSL for education
from Rs 20 lakh to Rs 25 lakh per individual.
➢ Renewable Energy Loans: Loan limits for renewable energy projects like solar power, biomass,
and micro-hydel plants raised from Rs 30 crore to Rs 35 crore per borrower.
➢ Loans for individual households for renewable energy remain capped at Rs 10 lakh per borrower.
➢ PSL Targets for Urban Cooperative Banks (UCBs): Revised PSL target for UCBs reduced to 60%
(from 75%) of Adjusted Net Bank Credit (ANBC) or Credit Equivalent of Off-Balance Sheet
Exposure (CEOBE), whichever is higher.
Priority Sector Lending Norms
➢ Housing sector: Loans limits are increased to boost
affordable housing, particularly in Tier-III to Tier-VI
cities.
➢ Expansion of the ‘Weaker Sections’ Category: The
list of eligible borrowers under the ‘Weaker Sections’
category has been expanded, it now includes
transgenders, promoting financial inclusion and better
credit access for underprivileged groups.
Priority Sector Lending Norms
 Alternative Reference Rates
➢ The Reserve Bank of India (RBI) has issued an advisory to banks and other RBI-regulated entities asking them
to take steps to ensure a complete transition away from the London Interbank Offered Rate (LIBOR)
➢ LIBOR and the Mumbai Interbank Forward Outright Rate (MIFOR) will be phased out.
➢ MIFOR is a domestic interest rate benchmark presently published by Financial Benchmarks India Pvt Ltd
➢ Banks / Financial Institutions (FIs) have been advised to ensure that no new transactions undertaken by them, or
their customers rely on or are priced using the U.S. Dollar LIBOR or MIFOR.
➢ The global transition from LIBOR was necessitated after British financial authorities decided to phase it out in
2017 after discovering that some large banks manipulated the reference rate up or down by providing false
data
➢ LIBOR is a global benchmark interest rate at which major global banks lend to one another in the
international interbank market for short-term loans.
➢ Financial Benchmarks are indices, values, or reference rates for the purpose of pricing, settlement and
valuation of financial contracts.
➢ Regulation: Before 2014, LIBOR was administered by the British Bankers’ Association (BBA).
➢ Later, the maintenance of the benchmark was brought under the purview of the U.K. Financial Conduct
Authority (FCA).
➢ Calculation: Before 2021, LIBOR was calculated for five currencies (U.S. dollar, Euro, Pound, Swiss Franc and
Japanese Yen) for seven tenors. o After the announcement of its phased rollback in March 2021, only U.S.-
dollar LIBOR was allowed to be published.
 Alternative Reference Rates
➢ Alternative Reference Rates (ARRs): The RBI has established a system of Alternative Reference
Rates (ARRs) that allows banks to choose rates from a basket of currencies
➢ RBI has added Modified MIFOR to the list of significant benchmarks administered by FBIL.
➢ In 2017, the U.S. The Federal Reserve introduced the Secured Overnight Financing Rate (SOFR) as
an alternative to LIBOR.
➢ SOFR, is based on observable repo rates. These rates reflect the cost of borrowing cash overnight
and are collateralized by U.S. Treasury securities.
➢ Unlike LIBOR, which relied on expert judgment, SOFR is derived from actual transactions,
making it less susceptible to market manipulation.
➢ MMIFOR, on the other hand, incorporates the adjusted SOFR rates, which are compounded
retrospectively for different time periods. These rates are obtained from the Bloomberg Index
Services, among other components.
➢ MIFOR is a benchmark rate used by banks for setting financial contracts such as forward rate
agreements, interest rate swaps, and other derivative instruments.
➢ The MIFOR is published for five tenors, i.e., 1 month, 2 months, 3 months, 6 months, and 1 year,
along with an overnight rate at 5 PM IST daily and is used for interbank transactions only.
 Alternative Reference Rates
➢ Reserve Bank of India set up a Committee on Financial Benchmarks in June 2013 to review the existing
systems governing major financial benchmarks in India.
➢ The Committee headed by Shri Vijaya Bhaskar, the then Executive Director, Reserve Bank of India made
wide-ranging recommendations to reform the benchmark administration in India.
➢ These were accepted by the Reserve Bank of India in early 2014, who identified FIMMDA and FEDAI as the
benchmark administrators for the Indian rupee interest rates and Forex benchmarks respectively.
➢ It was suggested that these associations may jointly or independently form a separate entity to administer the
benchmarks.
➢ This is the first major step for formation of Financial Benchmark India Pvt. Ltd (FBIL) as an independent
benchmark administrator for interest rates and foreign exchange.
Credit-Deposit Ratio
➢ RBI raised concerns over bank’s high CD Ratio and asked them to reduce it.
➢ CD Ratio is a financial metric representing the percentage of loans a bank has issued relative to
its total deposits.
➢ It is the ratio of how much a bank lends out of the deposits it has mobilised.
➢ A higher CD Ratio suggests that a significant portion of the bank's resources are allocated to loans.
➢ It could potentially stimulate economic growth but also implies higher risk.
➢ According to the RBI’s Financial Stability Report: CD ratio peaked at 78.8% (highest since 2005) in
December 2023 and Over 75% of the banks with CD ratios above 75% are private sector banks.
➢ Guidelines: No specific benchmark set by the RBI ; banks manage the ratio based on liquidity and
profitability considerations.
Factors Influencing Credit-Deposit Ratio (CD ratio)
➢ Increased Loan Demand: Higher demand for loans can raise the CD ratio.
➢ Deposit Mobilization: Increased deposits can lower the CD ratio if lending does not increase
proportionately.
➢ Economic Conditions: Booms or recessions impact both loan demand and deposit growth,
influencing the CD ratio.
Credit-Deposit Ratio
Implications of High Credit-Deposit Ratio on Banks
➢ Profitability: Indicates active lending, which may enhance profitability if loans are serviced on time.
➢ Risk Exposure: Higher credit exposure could lead to non-performing assets (NPA) if repayments are
not met.
➢ Liquidity Risks: Banks may face challenges in meeting sudden payment obligations or withdrawals
due to low liquidity reserves.
Implications of Low Credit-Deposit Ratio on Banks
➢ Profitability Impact: Reflects insufficient lending, potentially affecting the bank’s revenue streams.
➢ Cautious Lending: May indicate economic uncertainty or lack of suitable lending opportunities.
SFBs → Universal Banks
➢ RBI sets Eligibility Criteria for Small Finance Banks (SFB) to transit into Universal banking under
on-tap licensing.
About Universal banks
➢ ‘Universal banks (UBs) are banks that offer a wide range of financial services, beyond commercial
➢ banking and investment banking, such as insurance.
➢ Until now, SFBs were allowed to primarily undertake basic banking activities of acceptance of
deposits and lending to unserved and underserved sections
➢ On-tap licensing: It was introduced in 2016 for allowing banks to apply for banking licenses with the
RBI throughout the year.
➢ Prior to this, banking licenses were granted upon invitation of applications by RBI to prospective
players.
Eligibility for SFBs to transitioning into UBs
➢ Net Worth: SFBs must have a minimum net worth of Rs 1,000 crore.
➢ Status: SFBs must be scheduled banks with a satisfactory track record of performance for a
minimum of 5 years.
SFBs → Universal Banks
Financial Health:
➢ Profitability: Should have net profits in the last two Financial Years.
➢ Asset Quality: Gross non-performing assets (G-NPA) and net NPA (N-NPA) must be less than or
equal to 3% and 1%, respectively, over the last two FYs.
➢ Stock Listing: Shares must be listed on a recognized stock exchange.
➢ Promoter Requirements: No addition of new promoters or changes to existing promoters is
permitted during the transition.
➢ o No changes are allowed to the promoter shareholding dilution plan previously approved by the
RBI.
➢ Preference: SFBs with a diversified loan portfolio will be preferred.
About SFBs:
➢ Regulated by the RBI under the RBI Act of 1934 and the Banking Regulation Act of 1949.
➢ An SFB is established as a private limited company under the Companies Act of 2013.
➢ Small Finance Banks offer basic banking services such as Savings Accounts, Current Accounts, Fixed
Deposits, Recurring Deposits, Loans, etc.
➢ SFBs are subject to all prudential norms and regulations of RBI applicable to existing commercial
banks, including maintenance of Cash Reserve Ratio (CRR) and Statutory Liquidity Ratio (SLR).
SFBs → Universal Banks
About SFBs:
➢ The minimum paid-up equity capital requirement is INR 200 crores, except for SFBs converted
from Urban Cooperative Banks, which require only INR 100 crore.
➢ SFBs can be promoted by individuals, corporates, trusts, or societies.
➢ SFBs are required to extend 75% of the credit to sectors eligible for classification as priority sector
lending by the RBI (Commercial bank 40%).
➢ At least 25% of the branches of any small finance bank should be located in rural areas where
banking services are absent or not prevalent.
➢ 50 % of loans extended by them are to be less than INR 25 lakhs.
➢ SFBs can undertake non-risk-sharing financial services such as the distribution of mutual fund units,
insurance products, pension products, etc.
➢ SFBs can set up dealerships in the foreign exchange business.
 Dividend Equalisation Fund
➢ The RBI asked Urban Cooperative Banks (UCBs) to
stop the practice of setting up a Dividend
Equalisation Fund (DEF).
➢ DEF are set up by UCBs through appropriation of
profits to pay dividends in future years, when
profits are insufficient or where the bank has
posted a net loss.
➢ However, current rules distinctly prohibit making
such payments from previously accumulated profits
or reserves.
➢ As a one-time measure, RBI also permitted UCBs
to transfer the money in the DEF to general
reserves/free reserves to provide better treatment
of these balances for regulatory capital purposes.
➢ RBI rules specifically mandate that dividends can
only be paid from the net profit of the current
year after making all statutory and other
provisions and after adjustment for accumulated
losses in full.
Dividend Equalisation Fund
➢ The RBI asked Urban Cooperative Banks (UCBs) to stop the practice of setting up a Dividend
Equalisation Fund (DEF).
➢ DEF are set up by UCBs through appropriation of profits to pay dividends in future years, when
profits are insufficient or where the bank has posted a net loss.
➢ However, current rules distinctly prohibit making such payments from previously accumulated
profits or reserves.
➢ As a one-time measure, RBI also permitted UCBs to transfer the money in the DEF to general
reserves/free reserves to provide better treatment of these balances for regulatory capital
purposes.
➢ RBI rules specifically mandate that dividends can only be paid from the net profit of the current
year after making all statutory and other provisions and after adjustment for accumulated losses
in full.
 Urban Cooperatives – Umbrella Organisation
➢ Ministry of Cooperation constituted the National Urban Cooperative Finance and
Development Corporation Limited (NUCFDC), an Umbrella Organisation (UO) for
UCBs.
➢ 2006: The need for an Umbrella Organisation (UO) for India's UCB sector was first
emphasized by an RBI Working Group chaired by Shri N.S. Viswanathan.
➢ 2009: RBI’s Working Group under the chairmanship of Shri V.S. Das recommended a
model of a national level UO i.e., NUCFDC.
➢ 2019: RBI accorded regulatory approval to the NAFCUB (National Federation of
Urban Cooperative Banks and Credit Societies Ltd) for the formation of NUCFDC.
➢ UO can serve as a gateway for resolving the issues of UCBs
➢ UO will be helpful to modernize and strengthen around 1,502 UCBs in the
country.
➢ Legal status - NUCFDC is a UO registered with RBI as a Type II –Non-Banking
Financial Company-Non deposit (NBFC-ND).
➢ It will be allowed to operate as a Self-Regulatory Organization (SRO) for the sector.
➢ Cooperative banks are financial institutions that are owned and operated by their
members, who are also the bank's customers.
➢ In India, they are registered under the Cooperative Societies Act of the State
concerned or the Multi-State Cooperative Societies Act, 2002.
➢ The Reserve Bank regulates the banking functions of Urban Cooperative Banks under
the provisions of Sections 22 and 23 of the Banking Regulation Act, 1949.
 Advance Pricing Arrangements
➢ Central Board of Direct Taxes (CBDT) has signed highest ever record 125 APAs (including Unilateral
and Bilateral APAs) in FY 2023-24 with Indian taxpayers.
➢ APAs are an agreement between a taxpayer and tax authority. They endeavor to provide certainty
to taxpayers in domain of transfer pricing by specifying methods of pricing.
➢ APAs allow businesses to reduce the risk of their transaction prices being challenged by tax
authorities.
➢ Transfer Pricing is the price of goods and services exchanged between companies that are under
common ownership or control.
➢ APA helps determine arm’s length price (ALP) of international transactions in advance for a
maximum of 5 future years.
➢ Arm's Length Principle of Pricing states that price agreed in a transaction between 2 related
parties must be same as price agreed in a comparable transaction between 2 unrelated parties.
➢ Taxpayer has option to roll back APA for 4 preceding years, as a result of which, tax certainty is
provided for 9 years. (Retrospective)
 DTAA
➢ India & Mauritius signed (not yet ratified) a protocol amending the Double Taxation Avoidance
Agreement (DTAA).
➢ Amendment included Principal Purpose Test (PPT) to avail tax benefits under the DTAA to plug the
abuse of treaty for tax evasion and avoidance.
➢ PPT lays out the condition that tax benefits under treaty will not be applicable if obtaining that duty
benefit was the principal purpose of any transaction or arrangement.
➢ Amendment to DTAA made it compliant with Base Erosion and Profit Shifting (BEPS) Minimum
Standards.
➢ Article 27B: A new article, Article 27B, is included in the treaty, defining the 'entitlement to benefits.'
➢ This article specifies conditions under which treaty benefits, such as reduced withholding tax on
interest, royalties, and dividends, are denied.
➢ By incorporating the PPT, the revised treaty seeks to ensure that tax benefits are not misused for
improper purposes.
➢ Uncertainty Regarding Past Investments: Despite the amendment, clarity is lacking regarding the
treatment of past investments made under the previous provisions of the DTAA.
➢ The Ministry of Finance is yet to issue clarification regarding the applicability of the new provisions to
existing investments.
DTAA
 DPI
➢ The ‘Report of India’s G20 Task Force on DPI’ was released by ‘India’s G20 Task Force on Digital
Public Infrastructure for Economic Transformation, Financial Inclusion and Development
➢ The report defines DPI and outlines a three-part framework for global DPI advancement.
➢ Digital public infrastructure (DPI) refers to blocks or platforms such as digital identification,
payment infrastructure and data exchange solutions that help countries deliver essential services
to their people, empowering citizens and improving lives by enabling digital inclusion.
 DPI
➢ DPIs mediate the flow of people, money
and information. ➢ These three sets become the foundation for
➢ First, the flow of people through a developing an effective DPI ecosystem.
digital ID System. (Aadhar) ➢ Each DPI layer fills a clear need and generates
➢ Second, the flow of money through considerable value across sectors.
a real-time fast payment system ➢ India, through India Stack, became the first country to
(UPI) develop all three foundational DPIs,
➢ third, the flow of personal
information through a consent-
based data sharing system to
actualize the benefits of DPIs and to
empower the citizen with a real
ability to control data. Data
Empowerment Protection
Architecture (DEPA).
➢ DEPA creates a digital framework that
allows users to share their data on
their own terms through a third-party
entity, who are known as Consent
Mangers.
 DPI
➢ Digital public infrastructure (DPI) refers to blocks or platforms such as digital identification,
payment infrastructure and data exchange solutions that help countries deliver essential services
to their people, empowering citizens and improving lives by enabling digital inclusion.
➢ DPIs mediate the flow of people, money and information.
➢ First, the flow of people through a digital ID System. (Aadhar)
➢ Second, the flow of money through a real-time fast payment system (UPI)
➢ third, the flow of personal information through a consent-based data sharing system to
actualize the benefits of DPIs and to empower the citizen with a real ability to control data. Data
Empowerment Protection Architecture (DEPA).
➢ DEPA creates a digital framework that allows users to share their data on their own terms
through a third-party entity, who are known as Consent Mangers.
➢ These three sets become the foundation for developing an effective DPI ecosystem.
➢ Each DPI layer fills a clear need and generates considerable value across sectors.
➢ India, through India Stack, became the first country to develop all three foundational DPIs,
 mBRIDGE
➢ As per Bank for International Settlements (BIS), Project mBridge reached minimum viable
product (MVP) stage in mid-2024.
➢ Launched in 2021, mBridge is a cross-border, decentralised, multiple central bank digital
currency (mCBDC) platform
➢ A platform based on a new blockchain ‘the mBridge Ledger’ was also built to support real-time,
peer-to peer, cross-border payments and foreign exchange transactions. o It is built on distributed
ledger technology (DLT) - a decentralized ledger network that uses the resources of many nodes to
ensure data security and transparency.
➢ Participants led by the BIS Innovation Hub, in collaboration with the other four central banks of
China, Thailand, the United Arab Emirates (UAE) and Hong Kong.
➢ Saudi Central Bank joined in 2024.
➢ There are more than 31 observing members including Reserve Bank of India
➢ Similar Global Initiatives
➢ BRICS Bridge: Proposed payment system by BRICS nations.
➢ Project Nexus: Bank for International Settlements (BIS) initiative that aims to connect multiple
domestic instant payment systems (IPS) globally.
 Project Nexus
➢ Reserve Bank of India (RBI) joins Project Nexus
➢ Project Nexus is a multilateral international initiative to enable instant cross-border retail
payments by interlinking domestic Instant Payments Systems (IPS).
➢ An IPS is an electronic payments system which facilitates inter-bank fund transfer and sends
confirmation of payment to the receiver and originator within a minute or less. E.g. Unified
Payments Interface (UPI).
➢ Conceptualized by the Innovation Hub of the Bank for International Settlements (BIS).
➢ BIS was established in 1930 with its head office in Basel, Switzerland and is owned by 63 central
banks, including RBI.
➢ It will connect IPS of four ASEAN countries (Malaysia, Philippines, Singapore, and Thailand) and
India and is expected to go live by 2026.
➢ It aims to achieve G20 targets of enabling cheaper, faster, more transparent and accessible cross-
border payments.
 Basel IV
➢ Basel IV is the informal name for a set of proposed
➢ New Banking Capital Requirement Parameters
banking reforms building on the international
Introduced by Basel III
banking accords known as Basel I, Basel II, and Basel
III. It is also referred to as Basel 3.1. ➢ Capital Conservation Buffers to RWAs: 2.5 %.
➢ It began implementation on Jan. 1, 2023, although its ➢ Leverage Ratio: Banks have to maintain a
full adoption is expected to take until 2025 leverage ratio of 3%.
➢ Basel IV, also known as the finalization of Basel III ➢ Counter Cyclical Buffer: A buffer ranging
reforms, introduces changes to how risk-weighted from 0 % to 2.5%.
assets (RWAs) are calculated, focusing on restoring ➢ Minimum Liquidity Coverage Ratio: It should
credibility and improving comparability of banks' be ≥100%.
capital ratios. ➢ Minimum Net Stable Funding Ratio: NSFR
➢ It includes stricter guidelines for credit risk, should be ≥100%.
operational risk, market risk, and credit valuation
adjustment, along with limitations on the use of
internal model approaches.
About Basel III Endgame
➢ Potential impact of Endgame includes Globally
Systemically Important Banks (G-SIBs) experiencing
an increase of 21% in capital requirements.
Recent Initiatives of SEBI
Recent Initiatives of SEBI
 Capital Markets
Colocation:
➢ Securities and Exchange Board of India (SEBI) disposed of proceedings against the National Stock
Exchange (NSE) in the alleged co-location case.
➢ Allows brokers to place their servers on the premises of stock exchanges (equipped with suitable
infrastructure) for a fee.
➢ Due to their proximity with stock exchange servers, they provide faster price feeds, quicker
execution of trades leading to significant profits.
➢ Guidelines for co-location were released by SEBI in 2015. Further, measures to strengthen the
Algorithmic Trading and Co-location framework were announced in 2018.
Derivatives:
➢ Derivatives are financial contracts whose value is derived from an underlying asset.
➢ These could include stocks, indices, commodities, currencies, exchange rates, or interest rates.
➢ These financial instruments allow you to profit by betting on the underlying asset's future value.
As a result, their value is derived from the underlying asset
➢ Types of Derivatives: Forwards, Futures, Options, Swaps
➢ Trading in Derivatives is regulated under the Securities Contracts (Regulation) Act (SCRA), 1956
and the Securities and Exchange Board of India Act, 1992.
 Derivatives
Forwards
➢ It is a customized contract between two parties to buy or sell an asset, product, or commodity at
a predetermined price at a later date.
➢ forwards are not traded on central exchanges but rather over-the-counter, and they are not
standardized to be regulated.
Futures​
➢ Futures are financial contracts that are fundamentally similar to forwards, with the main difference
being that features can be traded on exchanges and are thus standardised and regulated. They
are frequently used in commodity speculation.
Options​
➢ Options contracts are financial contracts in which the buyer or seller has the right but not the
obligation to buy or sell a security or financial asset.
➢ Options are similar to futures in that they are a contract or agreement between two parties to buy
or sell any type of security at a predetermined rate in the future.
Swaps​
➢ Swaps are used to exchange one type of cash flow for another.
➢ Swaps are private agreements between parties that are mostly traded over-the-counter and are
not traded on exchanges.
➢ Currency swaps and interest rate swaps are the most common types of swaps.
 Capital Markets
➢ CareEdge became the first Indian credit rating agency to enter the global scale ratings space,
including sovereign ratings.
➢ Credit ratings are forward-looking opinions on the relative ability of an entity to meet its financial
commitments, i.e., credit risk or relative creditworthiness of a borrower.
➢ A CRA is different from Credit Bureau as CRA provides an opinion relating to future debt
repayments by borrowers while CB provides information on past debt repayments by borrowers.
➢ In India, CRAs are primarily regulated by SEBI.
➢ Seven CRAs are registered with SEBI namely, Acuite, CRISIL, ICRA, CARE, India Ratings,
INFOMERICS and Brickwork.
➢ However, certain other regulatory agencies, RBI, IRDA, and PFRDA also regulate certain aspects of
CRAs under their respective sectoral jurisdiction.
➢ RBI issues accreditation to CRAs as External Credit Assessment Institutions for rating bank loan/
facilities.
➢ Except Brickwork Ratings, all six CRAs are RBI accredited domestic CRAs.
➢ SEBI (Credit Rating Agencies) Regulations, 1999 provide the agencies are required to disclose their
rating criteria, methodology, default recognition policy, and guidelines on dealing with conflict of
interest.
 Capital Markets
Front Running
➢ Recently, a Mutual Fund was alleged to have indulged in Front- Running
➢ Front Running refers to usage of non-public information to directly or indirectly buy or sell
securities, or enters into options or futures contracts, in advance of a substantial order.
➢ It is illegal in India. - It undermines confidence in the financial markets and creates an uneven playing
field for other investors.
➢ In 2022, Securities and Exchange Board of India (Mutual Funds) Regulations, 1996 was amended to
incorporate provisions to counter front running.
INDIA VOLATILITY INDEX (VIX)
➢ Recently, India VIX surged above the critical threshold of 21, indicating heightened volatility in
India’s stock market.
➢ It is a measure of the amount by which an underlying Index is expected to fluctuate, in the near
term (30 calendar days). Given the nature of the index, it is also known as ‘fear gauge’ or ‘fear index’.
➢ Higher the India VIX values, higher the expected volatility and vice-versa.
➢ It is based on index option prices of NIFTY.
➢ Uses computation methodology of Chicago Board of Options Exchange (CBOE).
➢ CBOE was first to introduce a volatility index for US markets in 1993.
 Capital Markets
INDIA VOLATILITY INDEX (VIX)
➢ The India VIX was launched by National Stock Exchange (NSE) in 2010
➢ India VIX indicates the Indian market’s volatility from the investor’s perception.
➢ Volatility and the value of India VIX move parallel. i.e a spike in the VIX value means the market is
expecting higher volatility in the near future and vice versa.
➢ India VIX also has a strong negative correlation with Nifty. i.e every time India VIX falls, Nifty rises
and when India VIX rises, Nifty falls.
➢ VIX value is among the important parameters that are taken into account for pricing of options
contracts, which are one of the most popular derivative instruments.
PERPETUAL BONDS
➢ India's first additional Tier I (AT-1) perpetual bond was issued after recent rule changes to make
them more appealing.
➢ They are fund-raising instruments that do not carry any maturity date as bonds usually do
➢ Instead, they offer to pay their buyers a coupon or interest at a fixed date for perpetuity.
➢ Investors can get the principal back by selling the bond in the secondary market, or when the
issuer decides to redeem the bonds. (only Call option by issuer)
➢ These bonds have an obligation only to pay interest and are not required to repay the debt.
 Capital Markets
Carry Trade
➢ A carry trade is an investment strategy most often associated with foreign currency trading.
➢ In a carry trade, an investor borrows in a low interest-rate currency to buy a currency or asset
earning a higher interest rate.
➢ It is a high-risk strategy due to volatile currencies or changes in interest rates.
Gold-Backed Currency
➢ Recently, Zimbabwe launched the gold-backed currency called ZiG.
➢ Gold backed currency has fixed value directly linked to gold, and is convertible into gold.
➢ Money supply is limited by available gold reserves.
➢ It has its inherent value and has potential for stability in long run.
 FDI vs FPI
➢ The RBI in consultation with the Government of India and SEBI finalised rules for Foreign
Portfolio Investors (FPIs) whose investments would be reclassified as Foreign Direct Investment
(FDI) the moment it breaches the 10% stake threshold in an Indian company, under the Foreign
Exchange Management (Non-debt Instruments) Rules, 2019.
➢ “Investment made by foreign portfolio investor along with its investor group (hereinafter referred to
as ‘FPI’) shall be less than 10% of the total paid-up equity capital on a fully diluted basis.
➢ Further, FPI investing in breach of the prescribed limit shall have the option of divesting their
holdings or reclassifying such holdings as FDI,” the RBI said in a circular.
➢ In case the FPI intends to reclassify its FPI into FDI, the FPI shall follow the operational framework
as given below.
➢ The facility of reclassification shall not be permitted in sectors prohibited for FDI. E.g., Chit funds,
gambling, etc.
➢ FPI investments require government approvals, especially from land-bordering countries, and need
Indian investee company's concurrence.
➢ Also, investment should be in adherence to entry route, sectoral caps, investment limits, pricing
guidelines, and other attendant conditions for FDI under the rules.
➢ FPI reclassification will be guided by Foreign Exchange Management (Mode of Payment and
Reporting of Non-Debt Instruments) Regulations, 2019.
 WTO
➢ The WTO Agreement on Fisheries Subsidies, adopted at the 12th Ministerial Conference on 17 June
2022, marks a major step forward for ocean sustainability by prohibiting harmful fisheries
subsidies, which are a key factor in the widespread depredation of the world’s fish stocks.
➢ The new disciplines will have important, positive effects on the sustainability of marine fish stocks
and fisheries:
➢ By curbing subsidies to illegal, unreported and unregulated fishing, the Agreement creates a
powerful new weapon in the global fight against such fishing.
➢ By prohibiting subsidies to fishing on overfished stocks, the Agreement puts important
protections in place where management measures are ineffective.
➢ By prohibiting subsidies to fishing on the unregulated high seas, the Agreement also puts
important protections in place where management measures do not exist. Improving the
sustainability of fisheries is critical to the development of the sustainable blue economy, and
especially to the millions of mostly poor people who make their living by fishing.
➢ The new Agreement thus delivers on the mandates of SDG Target 14.6 and the 11th Ministerial
Conference (MC11), which mirrors the language of Target 1
 WTO
➢ The meaning of “subsidy” in the Agreement on Fisheries Subsidies is the same as in the WTO Agreement on
Subsidies and Countervailing Measures (SCM Agreement).
➢ Subsidy: if there is a financial contribution/ income/ price support by a government or any public body
(including through entrustment or direction of a private body), or
➢ there is any form of income or price support, and a benefit is thereby conferred.
➢ The term “financial contribution” is defined in broad terms, encompassing direct transfers of funds, such as
grants and loans, and potential direct transfers of funds such as guarantees, as well as revenue foregone, and
provision of goods or services and purchase of goods, by or on behalf of a government or a public body
 WTO
➢ India's proposals at the World Trade Organization (WTO) advocating for the establishment of
regulations on fisheries subsidies have garnered substantial backing from numerous developing
nations and least developed countries (LDCs).
Transition Period Allowance:
➢ Under the Special and Differential Treatment (S&DT), Developing Countries and Least
Developed Countries (LDCs) have been allowed a transition period of two years from the date of
entry into force of this Agreement.
➢ They will have no obligation to implement disciplines for the specified period.
Exempted Areas:
➢ the scope does not extend to aquaculture, inland fisheries, or payments under government-to-
government access agreements.
➢ No prohibition has been imposed on a WTO Member regarding granting or maintaining subsidy
to its vessel or operator as long as it is not carrying out IUU.
➢ No prohibition on providing subsidies has been imposed for fishing regarding overfished stocks as
long as such subsidies are implemented to rebuild the stock to a biologically sustainable level.
➢ Negotiations on this issue have been going on in the second phase of FSA.
 WTO
Benefits:
➢ It will check large-scale IUU fishing which deprives coastal countries like India of fisheries resources,
thereby significantly impacting the livelihoods of our fishing communities.
Issues:
➢ Large-scale commercial fishing operations often deplete fish stocks, leading to reduced catches
for small fishermen.
➢ Large fishing corporations often receive substantial government subsidies that small fishermen do
not, creating an uneven playing field.
➢ The sustainability exemption clause in FSA is problematic as it permits advanced fishing nations,
which have better monitoring capabilities, to evade commitments to reduce harmful subsidies,
thereby disadvantage poorer countries that may fish sustainably but lack similar capacities.
 Agriculture
➢ Union Cabinet approved the Digital Agriculture Mission, an umbrella scheme based on Digital Public
Infrastructure (DPI) to improve farmers' lives.
➢ It is the consistent application of methods of ‘Precision agriculture’ and ‘Smart farming’, internal and external
farm networking and use of web-based data platforms & Big Data analytics.
➢ Examples: Use of drones to fight locusts in India, Yuktix GreenSense (remote monitoring solution),
Key features of the Mission
➢ Agri Stack (Kisan ki Pehchaan): A farmer-centric DPI
to streamline services and scheme delivery to farmers
with 3 key components:
➢ Farmers' Registry: Issuance of ‘Farmer IDs’, which
will act as a trusted digital identity for farmers.
➢ Geo-referenced village maps: Linking of the
Farmer IDs to farmer-related data such as Land
records.
➢ Crop Sown Registry: Digital Crop Survey.
➢ Krishi Decision Support System (DSS): will integrate
remote sensing data on crops, soil, weather, and water
resources into a comprehensive geospatial system
 Agriculture
➢ Developed using RISAT-1A and Visualization of Earth observation Data and Archival System
(VEDAS) of the Department of Space.
➢ Soil Profile Mapping: Digital General Crop Estimation Survey (DGCES) will provide yield estimates.
➢ Key Targets: Create digital identities for 11 crore farmers over three years and launch nationwide
Digital Crop Survey in 2 years.
Livestock Sector:
 White Revolution
➢ Ministry of Cooperatives released Standard Operating Procedures (SOPs) on ‘White Revolution
2.0’ during diamond jubilee celebration of National Dairy Development Board (NDDB).
➢ NDDB was founded by Dr. Verghese Kurien (father of white revolution) in 1965.
➢ It is declared as an institution of national importance.
➢ It developed and implemented Operation Flood program (1970 to 1996), which led to White
Revolution.
➢ White Revolution in India refers to the successful implementation of Operation Flood, a dairy
development program launched in 1970 to make India self-dependent in milk production.
➢ Spearheaded by India's National Dairy Development Board (NDDB), it is the most extensive dairy
development initiative globally.
➢ Every year, on November 26th, India observes National Milk Day in commemoration of the birth
anniversary of Dr. Verghese Kurien.
White Revolution 2.0 Key Objectives:
➢ Increase milk procurement by 50% from the present level over next five years by providing
market access to dairy farmers in uncovered areas and increasing the share of dairy cooperatives in
organised sector.
➢ Increasing the milk procurement by Dairy Cooperatives to 1,000 lakh kilograms per day by 2029.
 White Revolution
➢ National Programme for Dairy Development (NPDD) 2.0:
➢ Targets have been subsumed under the Central Sector Scheme NPDD 2.0.
➢ Financial assistance under NPDD is provided for setting up of village level milk procurement
system, milk chilling facilities for quality milk procurement to strengthen dairy infrastructure
➢ Financial Inclusion: Announcement of nationwide expansion of the ‘Cooperation among
Cooperatives’ Initiative, which has been successfully piloted in Gujarat.
➢ interest-free cash credit to dairy farmers through RuPay-Kisan Credit Cards and distribute
micro-ATMs to dairy cooperative societies, bringing banking services to farmers’ doorsteps.
➢ Launch of Margdarshika (SOPs): Margdarshika (SOPs) has been launched to form 200,000 new
multipurpose primary agricultural cooperatives (MPACs).
➢ It will foster new cooperatives in panchayats that don’t have one for agricultural activites
➢ It has been prepared by the Ministry of cooperation in collaboration with NABARD, and National
Dairy Development Board (NDDB).
➢ The initiative will empower women by absorbing them in formal employment as the money will be
deposited in their bank accounts.
 White Revolution
Current Status of Milk Production in India?
➢ Global Ranking: India is the world’s top milk producer, with production having reached 231 million
tonnes during 2022-23. In 1951-52, the country produced just 17 million tonnes of milk.
➢ Top Milk-Producing States: As per the Basic Animal Husbandry Statistics (BAHS) 2023, the top five
milk producing states are UP (15.72%), Rajasthan (14.44%), Madhya Pradesh (8.73%), Gujarat
(7.49%), and Andhra Pradesh (6.70%), contribute 53.08% of the country’s total milk production.
➢ Per Capita Availability of Milk: The national per capita availability of milk is 459 grams/ day, which
is higher than the global average of 323 g/day.
➢ However, it varies from 329 g in Maharashtra to 1,283 g in Punjab.
➢ Milk Production by Animal Type: Almost 31.94% of the total milk production comes from
indigenous buffaloes, followed by 29.81% from crossbred cattle.
➢ The share of goat milk is 3.30%, and that of exotic cows, 1.86%.
➢ Contribution of Dairy to the Agriculture and Livestock Sector: The milk group (milk, ghee, butter,
and lassi) contributed approximately 40% of the total output value from agriculture, livestock,
forestry, and fishing sectors in 2022-23.
➢ This amounted to Rs 11.16 lakh crore, making it a much larger contributor than cereals to the
agricultural sector.
 White Revolution
Current Status of Milk Production in India?
➢ Global Ranking: India is the world’s top milk producer, with production having reached 231 million
tonnes during 2022-23. In 1951-52, the country produced just 17 million tonnes of milk.
➢ Top Milk-Producing States: As per the Basic Animal Husbandry Statistics (BAHS) 2023, the top five
milk producing states are UP (15.72%), Rajasthan (14.44%), Madhya Pradesh (8.73%), Gujarat
(7.49%), and Andhra Pradesh (6.70%), contribute 53.08% of the country’s total milk production.
➢ Per Capita Availability of Milk: The national per capita availability of milk is 459 grams/ day, which
is higher than the global average of 323 g/day.
➢ However, it varies from 329 g in Maharashtra to 1,283 g in Punjab.
➢ Milk Production by Animal Type: Almost 31.94% of the total milk production comes from
indigenous buffaloes, followed by 29.81% from crossbred cattle.
➢ The share of goat milk is 3.30%, and that of exotic cows, 1.86%.
➢ Contribution of Dairy to the Agriculture and Livestock Sector: The milk group (milk, ghee, butter,
and lassi) contributed approximately 40% of the total output value from agriculture, livestock,
forestry, and fishing sectors in 2022-23.
➢ This amounted to Rs 11.16 lakh crore, making it a much larger contributor than cereals to the
agricultural sector.
Coffee
 Basic Animal Husbandry Statistics
➢ ‘Basic Animal Husbandry Statistics 2024’ of Department of Animal Husbandry and Dairying on
the occasion of National Milk Day celebrated in New Delhi today.
➢ The BAHS - 2024 is based on the outcomes of the Integrated Sample Survey conducted for the
period from 1st March 2023 to 29th February 2024.
Meat Production:
➢ The total Meat production in the country is estimated as 10.25 million tonnes during 2023-24 and
registered a growth of 4.85 % over the past 10 years as compared to the estimates of 6.69 million
tonnes in 2014-15.
➢ It is further stated that the Major contribution in the total meat production comes from West
Bengal with 12.62 % share and followed by Uttar Pradesh (12.29%), Maharashtra (11.28 %),
Telangana (10.85 %) and Andhra Pradesh (10.41 %). In terms of annual growth rate, the highest
Annual Growth Rate (AGR) has recorded in Assam (17.93%) followed by Uttarakhand (15.63%) and
Wool Production:
➢ The Major contribution in the total Wool production comes from Rajasthan with a share of 47.53%
followed by Jammu & Kashmir (23.06%), Gujarat (6.18%), Maharashtra (4.75%) and Himachal Pradesh
(4.22%). In terms of annual growth rate, the highest AGR has recorded by Punjab (22.04%) followed
by Tamil Nadu (17.19%) and Gujarat (3.20%).
 Agri Exports
➢ Agricultural exports in India registered 8% decline this year (2023 – 24) and fell short of the
ambitious target of $ 60 billion by 2022 (set by India’s Agricultural Export Policy, 2018)
➢ Rice constitutes 21% of total exports followed by Marine products (15%), spices (9%) etc.
➢ Vegetable oil constitutes 45% of imports, followed by pulses (11%), fruits & vegetables (8%) etc.
➢ The share of India’s agricultural exports and imports in world agriculture trade in 2022 were 2.4%
and 1.9%, respectively (WTO’s Trade Statistical Review, 2023)
➢ India was ranked 9th in ranking of the global Agri exporters.
 SPICED Scheme
➢ The Union Ministry of Commerce and Industry approved SPICED (Sustainability in spice sector
through Progressive, Innovative and Collaborative interventions for Export Development)
➢ Aim: To expand the area under cardamom and increase productivity of small and large cardamom,
export promotion, capacity building & skill development of stakeholders, etc.
➢ Major components of the scheme:
➢ Improving productivity, post-harvest quality upgradation, market expansion efforts, trade
promotion, technology interventions, research and capacity building, and skill development.
➢ Implemented in remaining period of 15th Finance Commission
➢ The SPICED scheme is expected to facilitate value addition and drive innovation and sustainability
in the spice sector by introducing new sub-components/programs like
➢ the Mission Value Addition, Mission Clean and Safe Spices, promotion of GI (Geographical
Indication) spices, and support for entrepreneurship through Spice Incubation Centres.
➢ The scheme emphasizes farmers' groups, FPOs (Farmer Producer Organizations), farmer clusters
identified under ODOP (One District One Product) and DEH (District Export Hub), as well as SC/ST
communities, exporters from the NE region, and SMEs (Small and Medium Enterprises).
➢ About Cardamom • Cardamom is commercially cultivated for its dried fruits (capsules).
➢ The largest spice-producing states are Madhya Pradesh, Rajasthan, Gujarat, Andhra Pradesh,Tel, Ktaka
 SPICED Scheme
➢ Small Cardamom:
➢ Native: Indigenous to the evergreen forests of Western Ghats of South India.
➢ Major producers of small cardamom: Kerala, Karnataka and Tamil Nadu
➢ Favorable conditions for Small Cardamom –
➢ Thick shady areas with loamy soil which are usually acidic are ideal.
➢ Elevation: 600 to 1500 m.
➢ Adequate drainage must be provided.
➢ Large Cardamom
➢ Distribution: Sub-Himalayan region of North Eastern India, Nepal and Bhutan.
➢ Favorable conditions average precipitation of 3000-3500 mm spread over about 200 days.
➢ Temperature ranging from 6–30-degree C.
➢ Spices Industry of India
➢ India is the world’s largest producer, consumer and exporter of spices.
➢ Chilli, cumin, turmeric, ginger and coriander makeup about 76% of the total production.
➢ During 2022-23, the export of spices stood at US$ 3.73 billion
➢ (major export destination were china, USA, and Bangladesh)
 Agriculture: Prices & Marketing
Commodity Boards:
➢ Tea Board – Tea board Act, 1953, Kolkatta, Dubai, Moscow, London,
➢ Coffee Board - “Coffee Act VII of 1942” - Bengaluru
➢ Spice Board – Spice Board Act, 1986 – Kochi
➢ Silk Board – Central Silk Board Act, 1948 - Bengaluru
➢ Rubber Board – Rubber Act, 1947 – Kottayam
➢ Coir board - Coir Industry Act, 1953 – Kochi, Azhapuzha
➢ Tobacco Board – Tobacco board Act, 1975 - Guntur
In News:
➢ Turmeric Board
➢ Makhana Board
 Silk Board
➢ Platinum jubilee of the Central Silk Board was celebrated
➢ It is a Statutory Body established during 1948, by an Act of Parliament.
➢ It functions under the administrative control of the Ministry of Textiles, Government of India.
➢ The Board comprises 39 members appointed as per the powers and provisions conferred by Sub-
Section 3 of Section 4 of the CSB Act 1948, for a period of 3 years.
➢ The Chairperson of the Board to be appointed by the Central Government.
Functions
➢ It advises the Central Government on all matters relating to production, supply, distribution, trade
and commerce in silk-worm seed, the development of the silk industry and its products including
export and import.
➢ It has established 6 Regional Offices at New Delhi, Mumbai, Kolkata, Hyderabad, Bhubaneshwar
and Guwahati.
➢ Headquarters: Bengaluru
➢ About Silk Production in India
➢ India is 2nd largest silk producer in the world with 42% of global production (2023)
➢ Karnataka contributed around 32% of the total silk production, followed by Andhra Pradesh
➢ Silk Produced: India produced all varieties of Mulberry, Eri, Tasar and Muga.
 Silk Board
➢ Sericulture is the cultivation of silk rearing of silkworms. It is an
agro-based industry.
➢ It involves the raising of food plants for silkworm, rearing of silkworm
for production of cocoons, reeling and spinning of cocoon for
production of yarn, etc. for value-added benefits such as processing
and weaving.
➢ Moriculture – the cultivation of mulberry leaves.
➢ Amongst species of silkworms, Bombyx mori is the most widely used.
➢ Silk is known as the queen of textile and “BIOSTEEL” because of its
strength.
➢ India has the distinction of producing all the four types of silk i.e.
(a) Mulberry silk (91.7%); (b) Tasar silk (1.4%); (c) Eri silk (6.4%); and (d)
Muga silk (.5%)
➢ Mulberry silk is produced extensively in the states of Karnataka, West
Bengal and Jammu & Kashmir.
➢ Similarly, Tasar silk worms are reared traditionally by the tribes of
Madhya Pradesh, Bihar, Orissa and Jharkhand; Muga and Eri silk
are produced exclusively in Assam.
➢ The food plant of silkworms is Mulberry for producing Mulberry
silk.
 Rubber
➢ The initiatives iSNR (Indian Sustainable Natural Rubber) and INR Konnect were unveiled on the occasion of
the platinum jubilee celebrations of the Rubber Act, 1947.
➢ iSNR: Aims at aligning Indian rubber production with the stringent European Union Deforestation
Regulation (EUDR) standards.
➢ A key feature of iSNR is its traceability certification (guarantees the rubber’s origin and certifies its
compliance).

➢ INR Konnect (web-based platform): Designed to

connect growers of untapped rubber holdings with
interested adopters to maximise plantation productivity.
➢ First rubber plantations in India were established in
Kerala in 1895.
➢ India is the third-largest producer and the fourth-
largest consumer of natural rubber globally.
➢ Kerala accounts for 90% of India’s rubber production.
➢ Other producing states: Tamil Nadu, Karnataka,
Andaman and Nicobar Islands, Tripura & Garo hills of
Meghalaya.
➢ Smallholdings dominate rubber cultivation accounting
for 88% of the area and production.
Coffee
 ICAR - NISA
➢ Indian Council of Agricultural Research (ICAR)-National Institute of Secondary Agriculture (NISA)
celebrated 100 years of establishment.
➢ ICAR-NISA was established in 1924 as Indian Institute of Natural Resins and Gums, in Ranchi,Jk
➢ Secondary Agriculture • Secondary agriculture includes the value addition of primary agricultural
products as well as other agriculture-related activities like beekeeping, poultry farming,
agricultural tourism etc.
➢ It refers to all practices/processes that convert agricultural produce, residues and by-products into
high value commodities for pharmaceutical, industrial, medicinal and specified food uses.
➢ The Indian Council of Agricultural Research (ICAR) is an autonomous organisation under the
Department of Agricultural Research and Education (DARE), Ministry of Agriculture
➢ Formerly known as Imperial Council of Agricultural Research, it was established on 16 July 1929 as
a registered society under the Societies Registration Act, 1860 in pursuance of the report of the Royal
Commission on Agriculture. The ICAR has its headquarters at New Delhi.
➢ The Council is the apex body for co-ordinating, guiding and managing research and education in
agriculture including horticulture, fisheries and animal sciences in the entire country.
➢ With 113 ICAR institutes and 74 agricultural universities spread across the country this is one of
the largest national agricultural systems in the world.
 ICAR - NISA
➢ The ICAR has played a pioneering role in ushering Green Revolution and subsequent
developments in agriculture in India through its research and technology development that has
enabled the country to increase the production of foodgrains by 6.21 times, horticultural crops by
11.53 times, fish by 21.61 times, milk by 13.01 times and eggs by 70.74 times since 1950-51 to
2021-22, thus making a visible impact on the national food and nutritional security.
➢ It has played a major role in promoting excellence in higher education in agriculture.
➢ It is engaged in cutting edge areas of science and technology development and its scientists are
internationally acknowledged in their fields.
 PDS
➢ The Union Minister of Consumer Affairs, Food and Public Distribution launched the ‘Anna
Chakra’ PDS Supply Chain optimization tool and SCAN Portal to modernize the PDS system.
➢ Anna Chakra
➢ It is a Public Distribution System (PDS) Supply Chain optimization tool that leverages advanced
algorithms to identify optimal routes and ensure seamless movement of food grains.
➢ It is an initiative of the Department of Food Public Distribution developed in collaboration with
the World Food Programme (WFP) and IIT-Delhi.
➢ It is Integrated with the PM Gati Shakti platform and FOIS (Freight Operations Information
System) portal of the Railways through the Unified Logistics Interface Platform (ULIP).
➢ SCAN (Subsidy Claim Application for NFSA) portal - Aims to provide a single window submission
of subsidy claims by states, claim scrutiny and approval by DFPD facilitating expeditious settlement
process through end-to-end workflow automation.
 D-SII
➢ IRDAI identified Life Insurance Corporation of India, General Insurance Corporation of India and
New India Assurance Company as D-SIIs.
Domestic Systemically Important Insurers (D-SIIs)
➢ D-SIIs refer to insurers of such size, market importance, & domestic and global inter
connectedness, whose distress or failure would cause a significant dislocation in the domestic
financial system.
➢ D-SIIs are perceived as ‘too big or too important to fail’ (TBTF).
➢ D-SIIs are subject to additional regulatory measures.
➢ Given the nature of their operations and the systemic importance of the D-SIIs, these insurers have to
carry forward their efforts on the following:
➢ (i) Raise the level of Corporate governance;
➢ (ii) Identify all relevant risks and promote a sound risk management framework and culture.
 B-ready Index
➢ World Bank (WB) launches the first edition of its Business-Ready
(B-Ready) Index.
➢ B-Ready is in a three-year rollout phase, spanning 2024 to 2026.
➢ The assessment currently includes 50 economies (excluding India).
➢ It replaces the World Bank's Ease of Doing Business (EoDB)
rankings, which was discontinued in 2021 due to irregularities in
data and ethical concerns.
➢ The 2024 Business Reform Action Plan rankings prepared by the
Department for Promotion of Industry and Internal Trade will
include some of the indicators tracked by B-Ready index.
➢ It is a new data collection and analysis project of the world bank
group to assess the business and investment climate worldwide,
accompanied by an annual corporate report.
➢ It focuses on three main areas:
➢ Reform Advocacy: Encourages policy reforms by sharing
benchmarks and fostering dialogue among governments,
businesses, and the World Bank.
➢ Policy Guidance: Offers tailored recommendations for policy
changes based on data comparisons to global best practices.
➢ Analysis and Research: Supplies detailed data to support
research on private sector development factors.
 BHASKAR
➢ Ministry of Commerce and Industry launched Bharat Startup Knowledge Access Registry (BHASKAR)
initiative for India's Startup Ecosystem.
➢ BHASKAR initiative is a platform designed to centralize, streamline, and enhance collaboration among key
stakeholders within entrepreneurial ecosystem, including startups, investors, etc.
➢ Its primary goal is to build world’s largest digital registry for stakeholders within startup ecosystem.
➢ It is under Startup India program, which aims to build a strong ecosystem for nurturing innovation and
encouraging investments.
 WIPO Treaty on IPR
➢ The World Intellectual Property Organization (WIPO) adopted the Treaty on Intellectual
Property, Genetic Resources and Associated Traditional Knowledge
➢ This is the first WIPO Treaty to address the interface between intellectual property (IP), genetic
resources (GRs) and traditional knowledge (TK).
➢ Implementation: Adopted by consensus among more than 150 countries (including India), it will
come into force 3 months after ratified by 15 parties.
➢ Members: Any member states of WIPO may join.
➢ Aim:
➢ Enhance the efficacy, transparency and quality of the patent system.
➢ Prevent patents from being granted erroneously for not novel inventions.
➢ Treaty acknowledged the United Nations Declaration on the Rights of Indigenous Peoples
(UNDRIP) and its commitments
➢ UNDRIP is legally non-binding resolution, adopted by United Nations General Assembly in
2007.
 WIPO Treaty on IPR
Features:
➢ MANDATORY PATENT DISCLOSURE REQUIREMENT
➢ this requires patent applicants to disclose the country of origin of the genetic resources
and/or the Indigenous Peoples or local community providing the associated TK, if the claimed
inventions are 'based on' genetic resources and/or associated TK.
➢ SANCTIONS AND REMEDIES
➢ A failure to disclose the required information would be subject to appropriate, effective, and
proportionate measures.
➢ NON-RETROACTIVITY
➢ no obligations of the Treaty should be imposed in relation to patent applications filed prior to
the entry into force of this Treaty.
➢ INFORMATION SYSTEMS
➢ establishment of information systems (such as databases) of genetic resources and
associated TK, in consultation, where applicable, with Indigenous Peoples and local communities,
and other stakeholders, taking into account their national circumstances.
 Port
➢ Prime Minister laid the foundation stone for Vadhvan Port in Maharashtra's Palghar.
➢ Located near Dahanu town in Palghar district in Maharashtra, it will be established as the 13th
Major port in the country.
➢ It will be the country's largest container port and one of India’s largest deep-water ports.
➢ The port will be developed based on the landlord port model.
➢ Under it, private players take over the operational aspects, while the port authority acts as a
regulator and landlord.
➢ Mormugao Port Authority has been recognized globally as an incentive provider on the
Environmental Ship Index (ESI) platform.
➢ India’s first port to introduce Green Ship Incentives (Harit Shrey scheme) through the ESI.
➢ Harit Shrey scheme (2023) incentivises ships with favourable ESI scores; and it aims towards
decarbonization and green shipping.
➢ Environmental Ship Index (ESI) platform. - ESI is published by the International Association of Ports
and Harbors (IAPH) since 2011.
➢ It identifies ships that perform better in reducing air emissions than required by the current emission
standards of International Maritime Organization (IMO).