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DAILY CURRENT AFFAIRS, 17 MAY 2025

IMF BAILOUT

 

1. Context

Stating that Pakistan has started to rebuild its terror infrastructure destroyed by India, Defence Minister Rajnath Singh on Friday questioned the International Monetary Fund (IMF) assistance for Pakistan, which, he said, would be directly or indirectly used to fund terrorism.

2. Why are Sri Lanka and Pakistan facing major macroeconomic risks?

  • Sri Lanka's macroeconomic landscape has been characterized by fiscal dominance-high deficits and public debt.
  • This has manifested in a high degree of macroeconomic volatility, evidenced by its frequent balance-of-payments crises and instability.
  • Macroeconomic risks also remain high as Pakistan faces challenges associated with a large current account deficit, high public debt, and lower demand from its traditional export markets amid subdued global growth.

3. How do currency devaluation and price rise affect an economy?

A devaluation means there is a fall in the value of a currency. The main effects are:
  • Exports are cheaper to foreign customers
  • Imports are more expensive.
  • In the short term, a devaluation tends to cause inflation, higher growth, and increased demand for exports.

4. Effects of Devaluation

 
Image Source: Economics help

5. International Monetary Fund (IMF)

  • The International Monetary Fund (IMF) is an organization of 189 member countries, each of which has representation on the IMF's executive board in proportion to its financial importance so that the most powerful countries in the global economy have the most voting power.
  • The IMF, also known as the Fund, was conceived at a UN conference in Bretton Woods, New Hampshire, United States, in July 1944.
  • The 44 countries at that conference sought to build a framework for economic cooperation to avoid a repetition of the competitive devaluations that had contributed to the Great Depression of the 1930s.
  • Countries were not eligible for membership in the International Bank for Reconstruction and Development (IBRD) unless they were members of the IMF.

6. Functions of IMF

  • Regulatory functions: IMF functions as a regulatory body and as per the rules of the Articles of Agreement, it also focuses on administering a code of conduct for exchange rate policies and restrictions on payments for current account transactions.
  • Financial functions: IMF provides financial support and resources to the member countries to meet short-term and medium-term Balance of Payments (BOP) disequilibrium.
  • Consultative fun­ctions: IMF is a center for international cooperation for the member countries. It also acts as a source of counsel and technical assistance.

7. Special Drawing Rights (SDR)

  • Special Drawing Rights (SDRs) are supplementary foreign exchange reserve assets defined and maintained by the International Monetary Fund (IMF).
  • SDR is not a currency, instead represents a claim to currency held by IMF member countries for which they may be exchanged.
  • The value of an SDR is defined by a weighted currency basket of four major currencies- the US dollar, the Euro, the British Pound, the Chinese Yuan, and the Japanese Yen.
  • Central Bank of member countries held SDR with IMF which can be used by them to access funds from IMF in case of financial crises in their domestic market.

8. Why do nations seek an IMF bailout?

  • Countries seek help from the IMF usually when their economies face a major macroeconomic risk, mostly in the form of a currency crisis.
  • For instance, in the case of Sri Lanka and Pakistan, both countries have witnessed domestic prices rise rapidly and the exchange value of their currencies drop steeply against the U.S. dollar.
  • Such currency crises are generally the result of gross mismanagement of the nation's currency by its central bank, often under the covert influence of the ruling government.
  • A rapid unpredictable fall in the value of a currency can destroy confidence is said currency and affect economic activity as people may turn hesitant to accept the currency in exchange for goods and services.
  • Foreigners may also be unwilling to invest in an economy where the value of its currency gyrates in an unpredictable manner.
  • In such a scenario, many countries are forced to seek help from the IMF to meet their external debt and other obligations, purchase essential imports, and also to prop up the exchange value of their currencies.

9. How does the IMF help Countries?

  • The IMF basically lends money, often in the form of special drawing rights (SDRs), to troubled economies that seek the lender's assistance.
  • SDRs simply represent a basket of currencies namely the U.S. dollar, the euro, the Chinese Yuan, the Japanese Yen, and the British Pound.
  • The IMF carries out its lending to troubled economies through a number of lending programs such as the extended credit facility, the flexible credit line, the standby agreement, etc.
  • Countries receiving the bailout can use the SDRs for various purposes depending on their individual circumstances.
  • Currently, both Sri Lanka and Pakistan are in urgent need of U.S. dollars to import essential items and also to pay their foreign debt.
  • So any money that they receive from the IMF is likely to go towards addressing these urgent issues.

10. IMF Lending Instruments

  • The IMF's various lending instruments are tailored to different types of balance of payments need as well as the specific circumstances of its diverse.
  • All IMF members are eligible to access to Fund's resources in the General Resources Account (GRA) on non-concessional terms.
  • The IMF also provides concessional financial support (currently at zero interest rates through June 2021) through the Poverty Reduction and Growth Trust which is better tailored to the diversity and needs of low-income countries.
  • Historically, for emerging and advanced market economies in crises, the bulk of IMF assistance has been provided through stand-by agreements (SBAs) to address the short-term or potential balance of payments problems.
  • The Standby Credit Facility (SCF) serves a similar purpose for low-income countries.
  • The External Fund Facility (EFF) and the corresponding Extended Credit Facility (ECF) for low-income countries are the Fund's main tools for medium-term support to countries facing protracted balance of payments problems.
  • To help prevent or mitigates crises and boost market confidence during periods of heightened risks, members with already strong policies can use the Flexible Credit Line (FCL)  or the Precautionary and Liquidity Line (PLL).
  • The Rapid Financing Instrument (RFI) and the corresponding Rapid Credit Facility (RCF) for low-income countries provide rapid assistance to countries with urgent balance of payments needs, including commodity price shocks, natural disasters, and domestic fragilities.

11. Why does the IMF impose certain conditions before lending money to countries?

  • The IMF usually imposes conditions on countries before it lends any money to them.
  • For example, a country may have to agree to implement certain structural reforms as a condition to receive IMF loans.
  • The IMF's conditional lending has been controversial as many believe that these reforms are too tough on the public.
  • Some have also accused the IMF's lending decisions. which are taken by officials appointed by the governments of various countries, to be influenced by international politics.
  • Supporters of the IMF's lending policies, however, have argued that conditions are essential for the success of IMF lending.

For Prelims & Mains

For Prelims: International Monetary Fund (IMF), Macroeconomic risk, Balance of payments, Economic bailout, Currency devaluation, International Bank for Reconstruction and Development (IBRD), Special Drawing Rights (SDR), Standby Credit Facility (SCF), External Fund Facility (EFF), General Resources Account (GRA), Extended Credit Facility (ECF), Flexible Credit Line (FCL)  or the Precautionary and Liquidity Line (PLL), Rapid Financing Instrument (RFI) and Rapid Credit Facility (RCF).
For Mains: 1. What is International Monetary Fund (IMF) and explain the role of IMF in extending the support of economic bailout to Srilanka and Pakistan.
 
Source: The Hindu

Previous year Questions

1. Recently, which one of the following currencies has been proposed to be added to the basket of IMF’s SDR? (UPSC 2016)
A. Rouble
B. Rand
C. Indian Rupee
D. Renminbi
Answer: D
 
2. Rapid Financing Instruments" and "Rapid Credit Facility" are related to the provisions of lending by which one of the following? (UPSC 2022)
A. Asian Development Bank
B. International Monetary Fund
C. United Nations Environment Programme
D. Finance Initiative World Bank
Answer: B
 
Source: The Hindu
 

GOVERNOR VS STATES

 
 
1. Context
 
The Centre, through the means of a Presidential Reference, has questioned the Supreme Court’s decision in the Tamil Nadu Governor case to “impose” a three-month timeline for the President to decide on State legislations reserved for consideration under Article 201 by Governors.
 
2. Appointment and qualification of the Governor
 
  • The Indian Constitution outlines the framework for appointing a Governor. According to Article 153, each state must have a Governor. Article 155 provides that the Governor is appointed by the President through an official warrant bearing the President's signature and seal.
  • As per Article 156, although the Governor typically serves a five-year term, they remain in office at the discretion of the President.
  • This means that the President can ask the Governor to resign before the term ends. However, since the President acts based on the counsel of the Prime Minister and the Union Cabinet, it is effectively the central government that controls both the appointment and removal of a Governor.
  • Articles 157 and 158 describe the eligibility criteria and terms for holding the office. The Governor must be an Indian citizen and at least 35 years old.
  • Additionally, the individual must not be a sitting member of either Parliament or any state legislature, and cannot hold any position that offers financial gain
 
3. Roles of Governor
 
  • The Constitution mandates that the Governor must generally act in accordance with the advice provided by the state's Council of Ministers. Article 163 clarifies this by stating that a Council of Ministers, led by the Chief Minister, shall assist and guide the Governor in carrying out his duties—except in cases where the Constitution allows the Governor to act independently at his discretion.
  • Furthermore, the Governor holds constitutional authority to summon, prorogue, or dissolve the State Legislative Assembly. However, these powers are to be exercised only after consulting the Council of Ministers.
  • In his role as the ceremonial head of the state, the Governor also holds several important responsibilities, such as appointing the Chief Minister, members of the Council of Ministers, the Advocate General, the State Election Commissioner, heads of state universities, and members and the Chairman of the State Public Service Commission, among others
Infographics
 
 
4. Recent judgments by top courts
 
 

The Constitution grants the Governor certain legislative powers, including the authority to approve or reject a Bill passed by both Houses of the State Legislature. Article 200 outlines the choices available to the Governor:

  • Approve the Bill,

  • Withhold approval,

  • Send it back to the Legislature for reconsideration (provided it is not a Money Bill), or

  • Forward the Bill to the President for a decision.

While the proviso to Article 200 mentions that the Governor should return the Bill "as soon as possible," it does not define a specific time frame, which has occasionally led to significant delays.

To address such delays, the Supreme Court recently issued clear, time-bound directions for Governors regarding action on Bills:

  • Assent must be given within one month,

  • The Governor cannot withhold assent against the advice of the Council of Ministers,

  • If returning the Bill, it must be done within three months,

  • If the Governor chooses to reserve the Bill for the President, this must also be done within three months, and

  • Should the Legislature pass the Bill again after reconsideration, the Governor is required to grant assent within one month.

 
 
5. Committees on the Governor's role
 

The powers, responsibilities, and overall role of the Governor have frequently come under review, drawing attention from both central government-appointed committees and the Supreme Court of India.

Starting with the Administrative Reforms Commission in 1969 and extending to the Punchhi Commission in 2007, numerous expert bodies set up over the years have proposed comprehensive reforms concerning various aspects of the Governor's office, including the method of appointment, scope of authority, duration of tenure, procedure for removal, and other related issues

The Sarkaria Commission, in its 1988 report on Centre-State relations, proposed reforms concerning the Governor's role, especially in the context of Articles 200 and 201 of the Constitution.

The National Commission to Review the Working of the Constitution (2001), chaired by M.N. Venkatachaliah and initiated during Prime Minister Atal Bihari Vajpayee’s tenure, noted that Governors often function as representatives of the Central Government, leading to perceptions of bias and political controversy in their decisions.

In 2007, the Punchhi Commission re-evaluated the Centre-State dynamic and recommended that a Governor should be appointed only after consulting the Chief Minister of the respective state. It also emphasized the importance of prompt action by the Governor on legislative bills.

Over time, the impartiality of the Governor’s office has been questioned, prompting judicial intervention. The Supreme Court has, through a series of landmark judgments, clarified the scope and limitations of the Governor’s powers:

  • Shamsher Singh vs State of Punjab (1974): The court ruled that the Governor must act based on the advice of the Council of Ministers.

  • Raghukul Tilak vs State of Haryana (1979): The judgment emphasized that Governors are not subordinate to the Centre, but occupy a vital constitutional role within the state.

  • S.R. Bommai vs Union of India (1994): A milestone ruling, it held that the Governor’s recommendation for imposing President’s Rule under Article 356 must be backed by a floor test, and such decisions are open to judicial review.

  • Rameshwar Prasad vs Union of India (2006): Addressing the dissolution of the Bihar Assembly, the Supreme Court stated that the Governor’s personal opinion cannot justify invoking President’s Rule in a state.

 

 

 

 

For Prelims: Governor, Center-state relations, Article 200

For Mains: 
1. In the context of recent disputes, examine the relationship between Governors appointed by the Centre and state governments led by opposition parties. How can this relationship be strengthened to ensure smooth functioning of the federal structure? (250 Words)
2. Explain the roles of the Governor and the President in the legislative process as outlined in the Constitution of India, focusing on their powers related to assenting to Bills passed by state legislatures. (250 Words)
3. Discuss Ethical Considerations and Constitutional Provisions Regarding Governor Running for Elections.  (250 Words)
 
 
Previous Year Questions
 
1.  With reference to the Legislative Assembly of a State in India, consider the following statements: ( UPSC 2019)
1. The Governor makes a customary address to Members of the House at the commencement of the first session of the year.
2. When a State Legislature does not have a rule on a particular matter, it follows the Lok Sabha rule on that matter.

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

 

2. Consider the following statements: ( UPSC 2018)

1. No criminal proceedings shall be instituted against the Governor of a State in any court during his term of office.
2. The emoluments and allowances of the Governor of a State shall not be diminished during his term of office.

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

 
3.Which of the following are the discretionary powers given to the Governor of a State? (2014)
1. Sending a report to the President of India for imposing the President’s rule
Appointing the Ministers
2. Reserving certain bills passed by the State Legislature for consideration of the President of India
3. Making the rules to conduct the business of the State Government

Select the correct answer using the code given below.

 A. 1 and 2 only          B. 1 and 3 only                   C.  2, 3 and 4 only        D. 1, 2, 3 and 4
 
 
4. Which one of the following suggested that the Governor should be an eminent person from outside the State and should be a detached figure without intense political links or should not have taken part in politics in the recent past? (UPSC CSE 2019)
A.First Administrative Reforms Commission (1966)
B.Rajamannar Committee (1969)
C.Sarkaria Commission (1983)
D.National Commission to Review the Working of the Constitution (2000)
 
Answers: 1-C, 2-C, 3-B, 4-C
Source: The Indian Express
 

ENVIRONMENTAL IMPACT ASSESSMENT (EIA)

 
 
 
1. Context
 
An expert panel of the Ministry of Environment, Forest and Climate Change has granted preliminary permissions to carry out an environmental impact assessment (EIA) study for a proposed 1,000 MW Upper Bhavani pumped hydropower project in the Nilgiri Hills, located in the ecologically fragile Western Ghats.
 
2. What is Environment Impact Assessment (EIA)?

Environmental Impact Assessment (EIA) is a systematic process used to evaluate the potential environmental consequences or impacts of a proposed project, plan, or program before it is approved or implemented. The goal of EIA is to ensure that decision-makers and stakeholders have a comprehensive understanding of the environmental implications of a particular undertaking, allowing them to make informed choices and mitigate adverse effects on the environment.

The EIA process involves a series of studies, assessments, and consultations to identify, predict, and evaluate the potential impacts of a project on the environment. This includes examining various aspects such as air and water quality, biodiversity, soil health, noise levels, and the socio-economic aspects of the affected communities. The information gathered during the EIA is then used to develop measures and strategies to minimize, mitigate, or offset any adverse effects on the environment.

Key components of the Environmental Impact Assessment process typically include:

  • Screening: Determining whether a proposed project requires a detailed EIA based on its scale and potential environmental significance.

  • Scoping: Identifying the key environmental concerns and defining the scope and boundaries of the assessment.

  • Baseline studies: Gathering information about the existing environmental conditions in the project area.

  • Impact prediction: Assessing the potential environmental impacts of the project based on various scenarios.

  • Mitigation and alternatives: Proposing measures to avoid, minimize, or compensate for adverse impacts. Exploring alternative project designs or locations that could have lesser environmental consequences.

  • Public participation: Involving the public and relevant stakeholders in the decision-making process, seeking their opinions and addressing their concerns.

  • Environmental Impact Statement (EIS): Compiling and presenting the findings of the assessment in a comprehensive report that includes all relevant information.

  • Decision-making: Providing the EIA report to decision-makers who use the information to make informed choices about whether to approve, modify, or reject the proposed project

3. Environmental Impact Assessment (EIA) and Environment Protection Act, 1986
 

The Environmental Impact Assessment (EIA) and the Environment Protection Act, 1986, are closely related in the context of environmental governance in India. The Environment Protection Act serves as the overarching legal framework, while the EIA process is a mechanism established under this act to assess and manage the environmental impacts of developmental activities.

  • Environment Protection Act, 1986:

    • The Environment Protection Act is a comprehensive legislation enacted in India to provide for the protection and improvement of the environment. It empowers the central government to take measures to address environmental issues, regulate activities that may have adverse impacts on the environment, and prescribe standards for emissions or discharges.
    • The act grants the government the authority to lay down procedures and safeguards to prevent environmental pollution and conserve natural resources.
    • It enables the government to take punitive actions against those who violate environmental laws and regulations.
  • Environmental Impact Assessment (EIA):

    • The EIA is a process mandated under the Environment Protection Act, 1986. It is a systematic evaluation of the potential environmental impacts of proposed projects, policies, or programs before they are approved or implemented.
    • The EIA process is designed to ensure that decision-makers have comprehensive information about the environmental consequences of a project, allowing them to make informed decisions and take necessary measures to minimize adverse impacts.
    • The EIA process involves screening, scoping, baseline studies, impact prediction, alternatives assessment, public participation, and the preparation of an Environmental Impact Statement (EIS).
  • Relationship between EIA and Environment Protection Act:

    • The EIA process is explicitly mentioned in the Environment Protection Act, and it is through this act that the government has the authority to establish procedures for carrying out EIAs.
    • Section 3(2)(v) of the Environment Protection Act empowers the central government to take measures to conduct environmental impact assessments, and Section 3(2)(i) gives the government authority to set standards for emissions or discharge of environmental pollutants.
    • The EIA Notification of 1994 and subsequent amendments provide the procedural details for conducting EIAs in various sectors. These notifications are issued under the powers conferred by the Environment Protection Act.
    • The Environment Impact Assessment process, therefore, operates within the legal framework established by the Environment Protection Act, ensuring that proposed projects are evaluated for their environmental impacts and that appropriate measures are taken to protect the environment
4. Why Environmental Impact Assessment (EIA) is Important?
 
Environmental Impact Assessment (EIA) is important for several reasons as it serves as a crucial tool in ensuring sustainable development and responsible decision-making in various sectors.
 
Here are some key reasons why EIA is considered important:
 
  • EIA helps in systematically identifying and evaluating potential environmental impacts of proposed projects, policies, or programs. This includes impacts on air quality, water resources, biodiversity, ecosystems, and the overall environment
  • EIA provides decision-makers, including government authorities, project developers, and the public, with comprehensive and scientifically sound information about the potential environmental consequences of a proposed activity. This enables informed decision-making and allows for the consideration of environmental concerns in the decision-making process
  • Through the EIA process, potential adverse environmental impacts are identified, and mitigation measures are proposed. These measures aim to avoid, minimize, or compensate for negative effects, ensuring that the project is designed and implemented in a way that reduces environmental harm
  • EIA involves public participation, allowing local communities and stakeholders to voice their concerns and opinions regarding proposed projects. This ensures that the decision-making process is transparent, inclusive, and considers the perspectives of those directly affected by the project
  • Many countries have regulations that require the conduct of EIAs for certain types of projects. EIA, therefore, helps in ensuring compliance with environmental laws and regulations. Failure to comply may result in legal consequences for project developers
  • EIA is a key instrument for promoting sustainable development by integrating environmental considerations into the planning and execution of projects. It helps strike a balance between developmental needs and environmental conservation, ensuring that economic growth does not come at the expense of environmental degradation
  • Conducting an EIA at the early stages of project planning allows for the early detection of potential environmental issues. This proactive approach helps in avoiding costly and challenging environmental problems that might arise if issues are identified only after project implementation has begun
  • EIA is often required for projects that may have transboundary environmental impacts. It facilitates international cooperation by providing neighboring countries with information about potential cross-border environmental effects, fostering collaboration in addressing shared environmental concerns
5.Environmental Impact Assessment (EIA) and India
 
In India, Environmental Impact Assessment (EIA) is a crucial process mandated by law for assessing the potential environmental impacts of proposed projects, policies, or activities before they are approved or implemented.
 
Here are some key aspects of EIA in India:
 
  • EIA in India is governed by the Environment (Protection) Act, 1986, and the EIA Notification issued under this act. The EIA Notification provides the procedural framework for conducting EIAs and specifies the categories of projects that require clearance from the Ministry of Environment, Forest and Climate Change (MoEFCC) before they can proceed
  • The EIA process in India applies to a wide range of projects, including industrial, mining, infrastructure, and urban development projects, among others. The EIA Notification categorizes projects into various categories based on their potential environmental impacts and establishes different clearance procedures for each category
  • The EIA process in India typically involves several stages, including screening, scoping, baseline data collection, impact prediction, alternatives assessment, public consultation, preparation of the Environmental Impact Assessment report, and decision-making by regulatory authorities
  • Public participation is a key component of the EIA process in India. The EIA Notification requires project proponents to conduct public consultations to gather feedback and address concerns from affected communities and stakeholders. Public hearings are held to provide an opportunity for the public to express their views on proposed projects.
  • Projects that are subject to EIA in India require environmental clearance from the MoEFCC or State Environment Impact Assessment Authorities (SEIAAs) before they can proceed. The clearance is granted based on the findings of the EIA report and compliance with environmental conditions and mitigation measures
 
For Prelims: General issues on Environmental ecology, Bio-diversity and Climate Change
For Mains: General Studies III: Conservation, environmental pollution and degradation, environmental impact assessment.
 
 
Source: Indianexpress
 

INTERNATIONAL ATOMIC ENERGY AGENCY (IAEA)

 
 
1. Context
 
The global nuclear watchdog, the International Atomic Energy Agency (IAEA), has said that there has been “no radiation leak” from any nuclear facility in Pakistan after the escalated military engagement with India. During Operation Sindoor, Sargodha, one of Pakistan’s biggest air bases, near Kirana Hills, was targeted by India. Kirana Hills is reported to house some nuclear installations. 
 
2. International Atomic Energy Agency (IAEA)
 
 
  • The International Atomic Energy Agency (IAEA) was founded in 1957 in response to growing global concerns and hopes regarding the expansion of nuclear technology. Its establishment was inspired by U.S. President Dwight D. Eisenhower’s landmark “Atoms for Peace” speech delivered to the United Nations General Assembly on December 8, 1953.

  • In recognition of its significant contributions to global peace and safety, the IAEA and its Director General at the time, Mohamed ElBaradei, were awarded the Nobel Peace Prize in 2005. The award acknowledged their efforts to prevent the military use of nuclear energy while promoting its safe application for peaceful purposes.

  • IAEA safeguards are rooted in binding international agreements, which countries voluntarily accept upon entering into treaties with the agency. These safeguards are crucial in ensuring states adhere to nuclear non-proliferation commitments through independent monitoring and verification.

  • The IAEA categorizes its safeguards into three primary types, all of which can be supplemented by an Additional Protocol (AP):
    (a) Comprehensive Safeguards Agreements, applicable to non-nuclear-weapon states under the Nuclear Non-Proliferation Treaty (NPT);
    (b) Voluntary Offer Agreements, involving nuclear-weapon states that are parties to the NPT;
    (c) Item-Specific Safeguards Agreements, which are applied to countries outside the NPT framework.

  • In 2014, India officially ratified the Additional Protocol, enhancing the IAEA’s ability to monitor its civilian nuclear facilities. India, along with Pakistan and Israel, has signed item-specific safeguard agreements with the IAEA. These nations, although nuclear-capable, are not part of the Nuclear Suppliers Group (NSG).

  • The IAEA created the Incident and Emergency Centre in 2009 to manage international cooperation and provide assistance in the event of nuclear or radiological emergencies, irrespective of their origin or magnitude

 
3. Nuclear Suppliers Group (NSG)
 
 
  • After India conducted its nuclear tests in 1974, the United States advocated for the creation of the Nuclear Suppliers Group (NSG), a coalition of 48 countries that establishes and enforces common guidelines for the export of nuclear technology and materials. The primary objective of this group is to prevent nuclear proliferation, and decisions on membership require unanimous agreement.

  • Since 2008, India has actively sought membership in the NSG. Gaining entry would allow India to participate in shaping the rules of global nuclear trade and eventually enable it to engage in the sale of nuclear equipment.

  • The NSG operates in alignment with the broader global nuclear non-proliferation framework, which is centered around the 1968 Nuclear Non-Proliferation Treaty (NPT). The NPT only recognizes countries that tested nuclear weapons before January 1, 1967, as nuclear-weapon states. As India conducted its tests later, it does not qualify under this definition and, like Pakistan and Israel, has not signed the treaty.

  • Although nuclear energy was seen as a potential area for international collaboration, India's non-membership in the NPT meant it was excluded from access to nuclear technology. The signing of the US-India Civil Nuclear Agreement helped break this deadlock.

  • Under this agreement, India committed to separating its military and civilian nuclear facilities, placing the latter under the oversight of the International Atomic Energy Agency (IAEA). India also aligned its export control policies with those of the NSG and three other major non-proliferation regimes — the Missile Technology Control Regime (MTCR), the Wassenaar Arrangement, and the Australia Group.

  • In February 2025, both India and the United States reaffirmed their commitment to fully implement the US-India 123 Civil Nuclear Agreement. They also agreed to advance cooperation on the development of American-designed nuclear reactors in India, emphasizing large-scale domestic manufacturing and potential transfer of technology

 
4. Nuclear Export Control Regime
 
 
  • Missile Technology Control Regime (MTCR): Formed in 1987, the MTCR is a voluntary association of countries committed to preventing the spread of missiles and related technologies capable of delivering weapons of mass destruction. It currently includes 35 member nations. India became a member in June 2016, while China remains outside the group.
  • Australia Group: This is an informal coalition of countries working together to ensure that exports of chemical and biological materials do not aid in the development of weapons. By coordinating export control policies, the group seeks to prevent the misuse of these materials. India officially joined as the 43rd member on January 19, 2018.
  • Wassenaar Arrangement (WA): Established in 1996, the Wassenaar Arrangement promotes openness and responsible behavior in the trade of conventional weapons and dual-use technologies to prevent excessive stockpiling and to keep such items out of the hands of terrorists. India became the 42nd member state of the WA in 2017
 
 
For Prelims: Non-Proliferation Treaty (NPT), Nuclear Suppliers Group (NSG), Wassenaar Arrangement (WA)
 
For Mains: GS III -International Atomic Energy Agency (IAEA)
 
Previous Year Questions
 

1.In India, why are some nuclear reactors kept under “IAEA safeguards” while others are not? (2020)

(a) Some use uranium and others use thorium

(b) Some use imported uranium and others use domestic supplies

(c) Some are operated by foreign enterprises and others are operated by domestic enterprises

(d) Some are State-owned and others are privately owned

Answer (b)

2.In the Indian context, what is the implication of ratifying the ‘Additional Protocol’ with the ‘International Atomic Energy Agency (IAEA)’? (UPSC CSE 2018)

(a) The civilian nuclear reactors come under IAEA safeguards.

(b) The military nuclear installations come under the inspection of IAEA.

(c) The country will have the privilege to buy uranium from the Nuclear Suppliers Group (NSG).

(d) The country automatically becomes a member of the NSG.

Answer (a)

 
 
Source: Indianexpress
 

WEATHER BALLOON

 
 
1. Context
 
In the wake of budget cuts by the Trump administration, a Silicon Valley startup will soon start to replace the National Oceanic and Atmospheric Administration’s (NOAA’s) weather balloons with AI-powered alternatives, which are supposed to be much cheaper
 
2. Old tradition and practice
 
  • The practice of observing the upper atmosphere dates back to the 18th century. It began in 1749 when two students in Glasgow, Scotland, used kites to measure temperatures at higher altitudes.
  • This approach evolved as meteorologists began attaching instruments—known as meteorographs—to kites to record atmospheric parameters such as pressure, temperature, and humidity.
  • Around the 1780s, the invention of hot air balloons in France opened new possibilities. Scientists used these balloons to ascend to higher altitudes, carrying barometers, thermometers, and other tools for atmospheric research.
  • Despite these advances, early balloon flights posed significant risks. A notable example occurred in 1862 when two British scientists ascended to nearly 11 kilometers and narrowly survived due to severe cold and oxygen deprivation.
  • As a result, kites remained a preferred method for upper air data collection, despite their limitations. They couldn’t rise above roughly 3 kilometers (about 9,800 feet), and the data could only be analyzed after the kite was retrieved and the instruments were recovered.
  • By 1899, the U.S. Weather Bureau had established 17 kite observation stations, each capable of lifting instruments up to 8,000 feet using multiple kites connected in sequence
 
3. History of weather balloon
 
  • French meteorologist Léon Teisserenc de Bort was a pioneer in the use of weather balloons, beginning around 1896. He conducted hundreds of balloon launches and is credited with discovering the tropopause and the stratosphere.
  • These balloon-based observations enabled scientists to gather data from altitudes that were previously inaccessible. As the balloon rose, it would eventually burst, allowing the attached meteorograph to descend gently back to Earth, safeguarding the recorded data for later retrieval.
  • Despite these advances, there were still drawbacks. Meteorological data collected this way wasn’t immediately available for forecasting, and if the meteorograph wasn’t recovered, the data could be lost entirely.
  • These limitations were overcome with the development of radiosondes—also known as radio-meteorographs—in the early 1930s. These compact devices, roughly the size of a coffee cup, could not only measure atmospheric conditions but also transmit the data in real time to ground stations.
  • By 1937, the U.S. Weather Bureau had implemented a nationwide network of radiosonde stations, a system that remains in operation today. India has also established a similar network, comprising 56 stations across the country.
  • Over the years, radiosondes have become more efficient—they’re now lighter, have longer battery life, and utilize GPS technology for improved tracking and wind measurement
 
4. Significance
 
  • At present, approximately 900 weather stations across the globe release weather balloons twice daily as part of a coordinated international initiative to monitor upper atmospheric conditions. These launches occur at 0000 and 1200 UTC (Coordinated Universal Time), which translates to 5:30 AM and 5:30 PM in Indian Standard Time (IST).
  • The synchronized timing of these launches enables meteorologists to compile a global snapshot of atmospheric conditions, which is vital for accurate weather prediction.
  • Modern weather balloons are typically made from latex and inflated with helium. They can ascend as high as 115,000 feet (about 35 kilometers), with each flight lasting up to two hours. A radiosonde is attached roughly 66 feet below the balloon, collecting and transmitting atmospheric data.
  • These measurements are stored in a global database and are accessible to researchers worldwide. The data is invaluable for studying weather systems, climate change, and phenomena like El Niño.
  • Despite advancements in satellite technology, weather balloons remain crucial. While satellites provide broad overviews and surface data, balloons offer detailed insight into the atmospheric layer where most weather events occur.
  • They supply essential information about temperature and humidity in the lower atmosphere—factors that significantly influence storm development and intensity. As former U.S. National Weather Service Director Elbert “Joe” noted in an interview with EuroNews, this data is key to determining the potential for and severity of extreme weather.
  • Furthermore, radiosonde readings are instrumental in validating and calibrating satellite-derived measurements, ensuring their accuracy.
  • Due to this importance, the decision by NOAA to reduce weather balloon launches has sparked global concern among experts, who fear it may undermine the quality of weather forecasts
5. Way Forward
 
When Russia tried to cut its radiosonde launches in half, between January 2015 and April 2015, European forecasters saw a decline in their model’s forecast quality, according to a report by American Meteorological Society
 
 

 

For Prelims: Indian and World Geography – Physical, Social, Economic geography of India and the World.

For Mains:  GS-I, Important Geophysical phenomena such as earthquakes, Tsunami, Volcanic activity, cyclones. etc., geographical features and their location-changes in critical geographical features (including water-bodies and ice-caps) and in flora and fauna and the effects of such changes

 
 
Source: Indianexpress
 
 

AKASH MISSILES

 
 
1. Context
 
Akash (“sky” in Sanskrit) is a mobile short-to-medium-range surface-to-air missile system developed by the Defence Research and Development Organisation (DRDO), and currently in service with the Indian Air Force (IAF) and the Indian Army.
 
2. About Akash Missiles
 
  • Akash is developed to safeguard strategic locations and high-value assets by providing air defence capabilities. It is capable of tracking and engaging several airborne threats at once, including hostile aircraft, missiles, and drones.
  • The project was initiated in the late 1980s under the Integrated Guided Missile Development Programme (IGMDP) by DRDO. Initial testing phases, such as system evaluations and live-fire exercises, took place during the late 1990s and early 2000s.
  • These were followed by comprehensive user evaluations by the Indian Air Force (IAF) and the Indian Army. The IAF officially inducted the Akash system in 2014, with the Army following suit in 2015.
  • Presently, both services operate several units equipped with the system. According to DRDO, Akash is approximately 96% indigenously developed, making it one of the most locally produced advanced defence systems in India.
  • Over 250 companies contribute to the manufacturing and supply chain, with Bharat Electronics Limited (BEL) and Bharat Dynamics Limited handling key production responsibilities
 
3. Working of the Akash missile
 
 
  • An integrated 3D Central Acquisition Radar monitors the skies for incoming aerial threats. As per Bharat Electronics Limited (BEL), this radar delivers three-dimensional target information—including distance, direction, and height—with a detection range of up to 120 km in all directions.
  • The Akash missile system is supported by an advanced multifunctional fire control radar called Rajendra, which can detect targets within an 80 km range. This radar is capable of simultaneously tracking several threats and guiding multiple missiles at once.
  • The radar's accurate tracking inputs are relayed to the command and control unit, which calculates the missile’s interception path.
  • The missile is launched from a mobile platform, each of which can carry up to three missiles. Weighing over 700 kilograms and powered by a ramjet engine, the Akash missile can achieve speeds up to Mach 2.5.
  • As the missile nears its target, an onboard seeker activates to ensure it locks onto and follows the moving threat. The Akash system is known for its high agility in flight, allowing it to adjust course mid-air, which enhances interception success rates.
  • In addition, it carries a 55 kg pre-fragmented warhead triggered by a proximity fuse. This allows the missile to inflict substantial damage even without a direct collision
 
4. Significance of Akash missile
 
 
  • PRECISION: The Akash missile system is known for its high accuracy and overall effectiveness in neutralizing targets. This performance stems from a combination of its advanced guidance system, agile missile design, and rapid reaction from detection to interception. Notably, the Rajendra radar is capable of tracking low-flying targets—a task that many traditional radar systems find challenging—throughout their flight path.
  • MOBILITY: The Akash system is fully mobile, with all components—including the missile launcher, command center, onboard guidance systems, C4I (command, control, communications, and intelligence) units, ground support gear, and the Rajendra radar—mounted on mobile platforms. This allows for swift transport, deployment, and repositioning by road or rail, enabling rapid adaptability in various operational scenarios.
  • ELECTRONIC RESISTANCE: The Akash system is equipped with electronic counter-countermeasure (ECCM) capabilities, providing strong resistance against enemy electronic warfare tactics. According to BEL, the system is highly resistant to both active and passive jamming. While electronic countermeasures (ECM) aim to disrupt or mislead detection systems like radar or infrared sensors, ECCM technologies are specifically designed to protect against such interference and maintain operational integrity
 
5. Future of Akash missile
 
  • The initial version of the Akash missile had a range of approximately 27 to 30 kilometers and was capable of reaching altitudes up to 18 kilometers. To enhance performance, the DRDO has been working on upgraded versions with improved range and capabilities.
  • Akash Prime: Although it maintains the same range as the original, Akash Prime is significantly more reliable under low-temperature conditions and at higher altitudes. This version was developed in response to operational feedback from the Indian Air Force (IAF) and the Army, who sought a system suitable for high-altitude defense of vital assets. It also features an indigenous active radio frequency seeker, which increases targeting precision. The missile’s first test flight took place in September 2021.
  • Akash-NG (New Generation): The DRDO has also developed and tested the Akash-NG, intended for the IAF to engage highly agile airborne threats that have a low radar cross-section (RCS). RCS measures how visible an object is to radar—lower values indicate greater stealth, as seen in fifth-generation fighter jets designed with radar-evading materials and shapes.
  • Akash-NG offers an extended range of up to 70 kilometers. It is lighter, more compact, and has a reduced logistics footprint. The missile is canisterized, meaning it is stored and launched from sealed containers, which enhances its shelf life and simplifies handling and deployment
 
6. Way Forward
 
In December 2020, the Union Cabinet approved the export of Akash after many friendly nations showed interest during international exhibitions. The export version, however, will be different from what is in service of the Indian armed forces
 
 
 
 
For Prelims: Current events of national and international importance.
For Mains: General Studies III: Achievements of Indians in science & technology; indigenization of technology and developing new technology
 
Previous Year Questions
 
1.Consider the following statements :(UPSC CSE 2023)
 
1. Ballistic missiles are jet-propelled at subsonic speeds throughout their flights, while cruise missiles are rocket-powered only in the initial phase of flight.
2. Agni-V is a medium-range supersonic cruise missile, while BrahMos is a solid-fuelled intercontinental ballistic missile.
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
Answer (D)
Source: Indianexpress
 
FOREIGN EXCHANGE RESERVES
 
 
1. Context
 

Indias foreign exchange (forex) reserves rose by $4.5 billion in the week ended May 9 to touch $690.6 billion, on the back of rising gold reserves, data released by the Reserve Bank of India (RBI) showed.

Gold reserves increased by $4.5 billion, while foreign currentt assets, the largest componentt of the forex kitty, increased by only $196 million.

2.Background

  • Foreign exchange reserves are assets denominated in a foreign currency that are held by a nation's central bank.
  • These may include foreign currencies, bonds, treasury bills, and other government securities.
  • Most foreign exchange reserves are held in U.S. dollars, with China being the largest foreign currency reserve holder in the world.
  • Economists suggest that it’s best to hold foreign exchange reserves in a currency that is not directly connected to the country’s own currency.
 

3.The reasons for holding reserves

  • Typically, official foreign exchange reserves are held in support of a range of objectives including to:
  • support and maintain confidence in the policies for monetary and exchange rate management including the capacity to intervene in support of the national or union currency;
  • limit external vulnerability by maintaining foreign currency liquidity to absorb shocks during times of crisis or when access to borrowing is curtailed and in doing so;
  • provide a level of confidence to markets that a country can meet its external obligations;
  • demonstrate the backing of domestic currency by external assets;
  • assist the government in meeting its foreign exchange needs and external debt obligations; and
  • maintain a reserve for national disasters or emergencies.

 

4.Objective of Reserve Management

Reserve management should seek to ensure that: 

  • adequate foreign exchange reserves are available for meeting a defined range of objectives; liquidity, market, and credit risks are controlled in a prudent manner; and 
  • subject to liquidity and other risk constraints, reasonable earnings are generated over the medium to long term on the funds invested.

 

5.India forex reserve include

  • India's foreign exchange reserves include:
    • Foreign Currency Assets
    • Gold Reserves
    • Special Drawing Rights (SDR)
    • Reserve position with International Monetary Fund (IMF)

 

6.What determines Rupee Value

    • The value of any currency is determined by demand for the currency as well as its supply. 
    • When the supply of a currency increases, its value drops. 
    • On the other hand, when the demand for a currency increases, its value rises. 
    • In the wider economy, central banks determine the supply of currencies, while the demand for currencies depends on the amount of goods and services produced in the economy.
  • Determining Rupee value in Forex Reserves
    • In the forex market, the supply of rupees is determined by the demand for imports and various foreign assets. 
    • So, if there is high demand to import oil, it can lead to an increase in the supply of rupees in the forex market and cause the rupee’s value to drop. 
    • The demand for rupees in the forex market, on the other hand, depends on foreign demand for Indian exports and other domestic assets. 
    • So, for instance, when there is great enthusiasm among foreign investors to invest in India, it can lead to an increase in the supply of dollars in the forex market which in turn causes the rupee’s value to rise against the dollar.

 

7.What’s causing the rupee to lose value against the dollar?

  • Since March 2022, the U.S. The Federal Reserve has been raising its benchmark interest rate causing investors seeking higher returns to pull capital away from emerging markets such as India and back into the U.S. 
  • This, in turn, has put pressure on emerging market currencies which have depreciated significantly against the U.S. dollar so far this year. 
  • Even developed market currencies such as the euro and the yen have depreciated against the dollar and the dollar index is up more than 8% so far this year. 
  • In fact, some analysts believe that the RBI’s surprise decision to raise rates earlier this month may have simply been to defend the rupee by preventing any rapid outflow of capital from India. 
  • In 2013, the rupee fell 15% against the dollar in about three months after investors were spooked by the U.S. Federal Reserve’s decision to trim down its bond purchase programme that had helped keep long-term interest rates low.
  • Moreover, India’s current account deficit, which measures among other things the gap between the value of imports and exports of goods and services, is expected to hit a 10-year high of 3.3% of gross domestic product in the current financial year as predicted by Morgan Stanly. 
  • This means that India’s import demand amid rising global oil prices is likely to negatively affect the rupee unless foreign investors pour sufficient capital into the country to fund the deficit. 
  • The rupee, it should also be noted, has consistently lost value against the U.S. dollar for several decades now. 
  • A major reason for this has been the consistently higher domestic price inflation in India. 
  • Higher inflation in India suggests that the RBI has been creating rupees at a faster rate than the U.S. Federal Reserve has been creating dollars. 
  • So, while capital and trade flows gain a lot of attention in discussions on the rupee’s value, the difference in the rates at which the U.S. Federal Reserve and the RBI regulate the supply of their currencies may play a much larger role in determining the value of the rupee over the long run.

 

 

8. Forex reserves of countries across the globe

Source - The Hindu

Reference- IMF, RBI.gov.in

 

Read about Special Drawing Rights(SDR)

 
 

BIOE3 POLICY

 
 
1. Context
 
Approved by the Union Cabinet and released by the Hon’ble Minister of Science & Technology, the BioE3 Policy aims to position India as a global leader in bio-based innovations. It focuses on promoting sustainable biomanufacturing in diverse thematic areas including Precision Therapeutics such as mRNA therapeutics, supporting economic growth while promoting affordable healthcare accessible to the Indian population
 
2.Benefits of biotechnology
 
  • Biotechnology, which involves manipulating living organisms and biological processes to create specific products or applications, is an expansive and diverse field. It encompasses areas such as genomics, genetic modification, synthetic biology, bioinformatics, and gene therapy.
  • Advancements in these fields have led to breakthroughs like treatments for genetic diseases or the development of crop varieties with enhanced traits. Historically, biotechnology solutions have been primarily applied in healthcare and agriculture.
  • However, recent progress in gene-editing techniques, protein production, and the cultivation of enzymes using genetically altered microorganisms, alongside enhanced data processing and artificial intelligence, has broadened the potential of biotechnology.
  • Traditional goods like synthetic fabrics, plastics, meat, milk, and fuel now have eco-friendly alternatives created through modern biological methods. For example, biological processes can replace chemical industrial methods, offering cleaner and more sustainable solutions.
  • Precision fermentation, for instance, allows for the production of animal-free milk, which mirrors the taste, texture, and nutrition of natural milk, but with a lower carbon footprint, enhanced accessibility, and higher nutritional value.
  • Environmentally harmful conventional plastics can be replaced by biodegradable bioplastics like polylactic acid, which is produced from renewable materials such as corn starch or sugarcane, rather than petroleum-based hydrocarbons.
  • Additionally, certain microorganisms like bacteria and algae can be utilized for atmospheric carbon capture, a critical bioprocess in mitigating climate change. Traditional carbon capture and storage methods, which rely on chemical processes, have faced challenges such as high costs and the need to store captured CO2 underground indefinitely. Biological processes, however, allow microorganisms to convert CO2 into useful byproducts, including biofuels, eliminating the need for storage.
  • In synthetic biology, entirely new organisms can be engineered to perform specific tasks, such as producing proteins or enzymes. Organs for transplantation can also be grown in laboratories through organogenesis, potentially reducing the reliance on human donors.
  • The potential applications of biotechnology are just beginning to emerge. While some products, like animal-free milk, are already available in select markets, many other technologies are still in the development stage, facing challenges related to scalability, cost, or regulatory approval
3.BioE3 Policy benefits for India
 
  • In the coming years, these emerging technologies are projected to reshape the economy and existing industrial practices.
  • Biomanufacturing, which involves using biological organisms or processes for industrial production, is expected to generate an economic impact of $2-4 trillion within the next decade, according to government projections. This is just one aspect of the broader shift towards integrating biology into economic activities.
  • India’s BioE3 policy aims to prepare the country for this future. Although it may not yield immediate economic benefits, the policy focuses on building expertise, promoting research, training young talent, and participating in technology development, positioning India to take advantage of these advancements when they mature.
  • This policy aligns with other government initiatives, such as the Artificial Intelligence Mission, Quantum Mission, and Green Hydrogen Mission, which aim to equip India with cutting-edge technologies that are expected to become essential to the global economy and address key challenges like climate change and energy security.
  • The BioE3 policy proposes establishing several biomanufacturing hubs across India. These hubs will provide a space for industry partners and start-ups to create specialized chemicals, smart proteins, enzymes, functional foods, and other bio-based products and services.
  • The hubs will concentrate on six areas: bio-based chemicals and enzymes, functional foods and smart proteins, precision biotherapeutics, climate-resilient agriculture, carbon capture and utilization, and advanced marine and space research.
  • The latter focuses on developing life support systems for astronauts that can recycle waste, produce oxygen, and grow food using specialized plants or microorganisms like algae in space environments.
  • Additionally, research on marine ecosystems could lead to the production of novel compounds and enzymes by marine organisms, with potential applications in sectors such as pharmaceuticals and cosmetics.
  • The BioE3 policy is spearheaded by the Department of Biotechnology, but its scope is so broad that it will require the collaboration of at least 15 other government departments for successful implementation
4. BioE3 Policy
 

The BioE3 policy refers to India's strategic initiative aimed at fostering a bio-economy by leveraging biotechnology to address various industrial, environmental, and societal challenges. This policy is designed to prepare India for a future where biological processes and technologies play a central role in economic development. The key focus of the BioE3 policy includes the promotion of biomanufacturing, where biological organisms or processes are used for industrial production, and creating a framework to harness the potential of biotechnology in sectors such as healthcare, agriculture, and environmental sustainability.

Objectives of BioE3 Policy:

  • Establishing biomanufacturing hubs where industries and start-ups can develop bio-based products like specialized chemicals, enzymes, smart proteins, functional foods, etc.
  • Developing competencies by promoting research, education, and talent development in biotechnology fields.

  • Supporting the development of advanced biotechnologies, including gene editing, bioinformatics, and precision biotherapeutics, to stay at the forefront of global innovation.
  • Utilizing biotechnology to address challenges like climate change, carbon capture, and creating eco-friendly alternatives to traditional industrial processes.
  • Ensuring that multiple government departments work together to implement the policy effectively, reflecting its broad impact on various sectors

 

For Prelims: Global Biofuel Alliance (GBA), G-20 summit, E10 (10% ethanol) or E85 (85% ethanol), Electric vehicle (EV), and International Energy Agency (IEA).

For Mains: 1. Discuss the role of biofuels in the global transition to sustainable energy sources, considering their environmental impact, economic implications, and potential for reducing greenhouse gas emissions. (250 words).

 

Previous year Question

1. According to India's National Policy on Biofuels, which of the following can be used as raw materials for the production of biofuels? (UPSC 2020)

1. Cassava

2. Damaged wheat grains

3. Groundnut seeds

4. Horse gram

5. Rotten potatoes

6. Sugar beet

Select the correct answer using the code given below:

A. 1, 2, 5 and 6 only

B. 1, 3, 4 and 6 only

C. 2, 3, 4 and 5 only

D. 1, 2, 3, 4, 5 and 6

Answer: A

2. It is possible to produce algae-based biofuels, but what is/are the likely limitation(s) of developing countries in promoting this industry? (UPSC 2017)

1. Production of algae-based biofuels is possible in seas only and not on continents.

2. Setting up and engineering the algae-based biofuels production requires a high level of expertise/technology until the construction is completed.

3. Economically viable production necessitates the setting up of large-scale facilities which may raise ecological and social concerns.

Select the correct answer using the code given below:

A. 1 and 2 only

B. 2 and 3 only

C. 3 only

D. 1, 2 and 3

Answer: B

3. With reference to the Neem tree, consider the following statements: (UPSC 2014)

1. Neem oil can be used as a pesticide to control the proliferation of some species of insects and mites.

2. Neem seeds are used in the manufacture of biofuels and hospital detergents.

3. Neem oil has applications in the pharmaceutical industry.

Which of the statements given above is/are correct?

A. 1 and 2 only

B. 3 only

C. 1 and 3 only

D. 1, 2 and 3

Answer: C

 

Source: Indianexpress

 

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