11th May 2025-Current Affairs

1. India Abstains from IMF Vote on Pakistan Aid – International Relations

Why in the News?

India abstained from voting on the International Monetary Fund’s (IMF) decision to release:

• $1 billion under the Extended Fund Facility (EFF)
• $1.3 billion under the Resilience and Sustainability Facility (RSF)

India expressed serious concerns about:

• Pakistan’s poor track record in implementing structural reforms
• The IMF’s adherence to procedural norms
• Pakistan’s unsustainable debt and lack of accountability, especially regarding military influence and support for terrorism

Key Concepts Explained

1. International Monetary Fund (IMF)

A global financial institution that:

• Supports countries facing balance of payments problems
• Provides financial assistance with conditionality (reform-based support)
• Operates through facilities like the EFF and RSF

2. Extended Fund Facility (EFF)

• Purpose: Helps countries with long-term balance of payments problems.
• Eligibility: All IMF member nations.
• Conditionality: Structural reforms and performance benchmarks.
• Process: Phased disbursement after IMF Executive Board approval.

3. Resilience and Sustainability Facility (RSF)

• Purpose: Targets climate-related and long-term sustainability challenges.
• Beneficiaries: Low-income and vulnerable middle-income countries.
• Features: Affordable financing, often for climate resilience and economic sustainability.

India’s Position and Rationale

1. Abstention, Not Opposition

• IMF voting allows only “Yes” or “Abstain”, not “No”
• India’s abstention was a symbolic dissent

2. Debt Sustainability Concerns

• Repeated IMF bailouts to Pakistan have not resulted in meaningful reforms
• Risk of creating a dependency cycle, increasing long-term IMF risk

3. Military’s Role in Economy

• India criticized the Pakistani military’s dominance in economic decision-making
• Called for greater civilian oversight and transparency

4. Terrorism and Regional Stability

• India opposes financial assistance to a country that:
  • Supports cross-border terrorism
  • Threatens regional peace
  • Undermines international financial integrity

Broader Implications

• Global Financial Governance: Raises questions on how IMF ensures accountability.
• India-Pakistan Relations: Reflects deep mistrust and geopolitical tensions.
• Institutional Integrity: India presses IMF to uphold norms and conditionality.
• Precedent for Future Aid: Could influence how international aid is scrutinized based on political and security contexts.

Summary

India abstained from an IMF vote to release $2.3 billion to Pakistan, citing concerns about debt sustainability, reform failures, military interference, and terrorism. The abstention, though not a formal opposition, highlights India’s broader strategic and financial reservations. It calls into question the effectiveness and credibility of IMF disbursements to countries with persistent governance and accountability issues.

Exam Connect – Possible Questions

Prelims

1. Which of the following is true about the IMF’s Extended Fund Facility (EFF)?
   A. It provides short-term loans without conditions
   B. It is designed for countries with temporary liquidity needs
   C. It supports long-term structural reforms with phased disbursement
   D. It is available only to low-income countries
   Answer: C
   
   
2. India abstained from the IMF vote to aid Pakistan primarily because:
   A. It lacked voting rights in the IMF
   B. It opposed IMF assistance to any developing country
   C. It was concerned about Pakistan’s debt sustainability and military influence
   D. It supports direct military aid instead of financial aid
   Answer: C
   
   
3. The Resilience and Sustainability Facility (RSF) primarily aims to:
   A. Fund military modernization in developing countries
   B. Promote global trade
   C. Support macroeconomic resilience and sustainability in vulnerable economies
   D. Provide budgetary support to G20 economies
   Answer: C
   

Mains

1. GS2 – International Relations
   “Critically examine India’s abstention from the IMF vote on financial assistance to Pakistan in light of geopolitical and economic considerations.”
2. GS2 – International Institutions
   “Discuss the effectiveness of IMF lending programs like the EFF and RSF in promoting structural reforms in developing countries. Use Pakistan as a case study.”
3. GS3 – Internal Security / Economy
   “Evaluate the implications of international financial aid to countries accused of supporting terrorism. Should financial institutions incorporate security considerations into their lending criteria?”

2. Protecting India’s Informal Workers from Heat Stress – Environment

Why in the News?

• In April 2025, Delhi recorded temperatures exceeding 41°C, marking an early and intense start to the summer.
• This event underscores the growing threat of heatwaves in Indian cities.
• Urban informal workers, who work outdoors with little protection, are particularly vulnerable to heat stress.

Core Concepts and Analysis

1. Heatwaves and Urban Vulnerability

• Heatwaves are prolonged periods of excessively hot weather, often with high humidity.
• India is increasingly experiencing urban heat islands, where cities are significantly warmer due to concrete, pollution, and lack of vegetation.
• Urban populations, especially outdoor workers, suffer from:
  • Heatstroke
  • Dehydration
  • Reduced work productivity
  • Increased mortality risk

2. Informal Workers: Key but Unprotected

• Who are informal workers?
  Street vendors, construction laborers, delivery agents, sanitation workers, etc.
• They:
  • Make up a large share of India’s urban economy
  • Often work in high-exposure environments without social protection
  • Are excluded from formal labour laws and health safety measures

3. Heat Action Plans (HAPs): Gaps and Critiques

• What are HAPs?
  Local-level government frameworks to mitigate heat-related impacts, e.g., early warnings, public awareness campaigns, emergency cooling centers.
• Issues in India:
  • Often view heatwaves as short-term crises, not a chronic urban hazard
  • Fail to include informal workers’ needs
  • Lack inter-agency coordination across ministries (health, labour, urban development)

4. Global Best Practices

• California and Oregon (USA):
  • Mandated rest breaks, shade, and hydration for outdoor workers
• Lessons for India:
  • Enforce labour protections tied to climatic conditions
  • Develop community cooling infrastructure
  • Legally mandate protections during extreme heat events

5. Way Forward: A Comprehensive Urban Heat Strategy

• Paradigm Shift Needed:
  Move from reactive to preventive and inclusive climate planning
• Key Elements:
  • Worker-centric protocols: Legal mandates for rest, water, shaded areas
  • Urban redesign: Cool roofs, tree plantations, shaded public spaces
  • Cross-sectoral governance: Coordinate health, labour, urban development, and disaster management agencies
  • Community involvement: Local stakeholders must help design and implement HAPs

Summary

India’s rising temperatures are a chronic urban issue that disproportionately affects informal workers. Despite their crucial role in the urban economy, these workers are largely excluded from current Heat Action Plans. With cities like Delhi hitting 41°C early in the season, India must adopt inclusive, long-term strategies inspired by international best practices. This means legally protecting workers from heat stress, integrating them into climate planning, and redesigning cities for resilience.

Exam Connect – Possible Questions

Prelims

1. Which of the following best describes the purpose of Heat Action Plans (HAPs)?
   A. To manage forest fire risks in urban areas
   B. To reduce industrial carbon emissions
   C. To mitigate the health impacts of heatwaves
   D. To improve air quality monitoring systems
   Answer: C
   
   
2. Why are informal workers more vulnerable to extreme heat in India?
   A. They typically work indoors
   B. They have access to private healthcare
   C. They lack legal and social protections
   D. Their work is seasonal and rural
   Answer: C
   
   
3. Which of the following is a feature of heat protection laws in California and Oregon?
   A. Free electricity for workers
   B. Ban on outdoor work
   C. Mandatory rest, shade, and hydration breaks for workers
   D. Guaranteed paid leave during summers
   Answer: C

Mains

1. GS3 – Environment
   “Extreme heat is no longer a temporary environmental event but a chronic urban challenge. Critically examine the need for heat-inclusive urban policies in India with reference to informal workers.”
2. GS1/GS3 – Urbanisation & Climate Change
   “Discuss how urban planning in Indian cities can be redesigned to protect vulnerable populations from climate-induced heat stress.”
3. GS2/GS3 – Governance and Labour
   “Evaluate the role of labour governance and inter-ministerial coordination in addressing climate risks faced by informal sector workers.”

3. Credit Guarantee Scheme for Startups (CGSS) – Economy

Why in the News?

• The Department for Promotion of Industry and Internal Trade (DPIIT), under the Ministry of Commerce & Industry, has announced an expansion of the Credit Guarantee Scheme for Startups (CGSS).
• The scheme aims to improve access to credit for startups without the burden of collateral, fostering innovation and entrepreneurship.

Key Features of the CGSS

1. Launch & Purpose

• Launched: October 6, 2022
• Part of: Startup India Action Plan
• Objective: Provide collateral-free credit to eligible startups via financial institutions.

2. Eligible Lenders

Credit guarantees cover loans from:

• Scheduled Commercial Banks
• All India Financial Institutions (AIFIs)
• Non-Banking Financial Companies (NBFCs)
• SEBI-registered Alternative Investment Funds (AIFs)

3. Types of Guarantee Coverage

• Transaction-based guarantee: For individual startup borrowers
• Umbrella-based guarantee: For Venture Debt Funds providing credit to startups

4. Eligible Instruments

Startups can avail funding via:

• Working capital
• Term loans
• Venture debt

5. Implementing Agency

• Managed by the National Credit Guarantee Trustee Company Limited (NCGTC)
• Supervised by:
  • Management Committee
  • Risk Evaluation Committee

Recent Changes (Expansion of CGSS)

Importance and Impact

• Promotes financial inclusion of startups
• Encourages risk-taking and innovation in early-stage ventures
• Supports the growth of domestic manufacturing and services
• Strengthens India’s push toward economic self-reliance and job creation

Conceptual Clarification: MSMEs

Common Confusion

Statement: According to the MSMED Act, 2006, medium enterprises are defined as those with investments between ₹15–25 crore.
Reality (Post-2020 Revision):

• The MSMED Act was amended in 2020:
  • Micro: Investment ≤ ₹1 crore, Turnover ≤ ₹5 crore
  • Small: Investment ≤ ₹10 crore, Turnover ≤ ₹50 crore
  • Medium: Investment ≤ ₹50 crore, Turnover ≤ ₹250 crore
    So, Statement 1 is incorrect.

Bank Loans to MSMEs under Priority Sector?

Yes, all bank loans to MSMEs qualify under the Priority Sector Lending (PSL) norms.
Statement 2 is correct.

Summary

The Credit Guarantee Scheme for Startups (CGSS) provides collateral-free credit support to startups through institutional channels. Recently expanded, it now offers higher coverage limits and reduced guarantee fees, especially in champion sectors aligned with the ‘Make in India’ initiative. Managed by NCGTC, it reflects the government’s focus on fostering innovation, entrepreneurship, and self-reliant economic growth.

Exam Connect – Possible Questions

Prelims

1. Consider the following statements:

1. According to the ‘Micro, Small and Medium Enterprises Development (MSMED) Act, 2006’, the ‘medium enterprises’ are those with investments in plant and machinery between ₹15 crore and ₹25 crore.
2. All bank loans to the Micro, Small and Medium Enterprises qualify under the priority sector.

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 : (b)

2. Under the Credit Guarantee Scheme for Startups (CGSS), which of the following is true?

(a) Only Public Sector Banks can offer credit
(b) Startups must provide land as collateral
(c) Venture Debt Funds are eligible under umbrella-based guarantee
(d) The guarantee is applicable only to companies listed on stock exchanges
Answer: (c)

Mains

1. “Credit Guarantee Schemes are essential to reduce the financial risk of lending to startups.” Discuss the role and effectiveness of the Credit Guarantee Scheme for Startups (CGSS) in promoting entrepreneurship in India.
2. “In the absence of collateral, credit guarantee becomes the key enabler for startup financing.” Evaluate the recent reforms in CGSS and suggest further measures to support high-risk early-stage ventures.
3. “Access to credit remains a major hurdle for Indian startups.” Critically analyse how the CGSS addresses this issue, especially in the context of the Make in India initiative.

4. PMFME Scheme (Pradhan Mantri Formalisation of Micro Food Processing Enterprises) – Economy

Why in the News?

• Bihar has emerged as the top-performing state in implementing the PMFME scheme during FY 2024–25.
• The state has assisted over 2 lakh (200,000) micro food processing units under the scheme.

Scheme Overview

1. Launch & Objective

• Launched: June 29, 2020
• By: Ministry of Food Processing Industries (MoFPI)
• Outlay: ₹10,000 crore over 5 years (2020–2025)

2. Key Goals

• Support unorganized micro food processing enterprises (MFPEs)
• Enhance credit access, branding, marketing, and infrastructure
• Formalize 2 lakh existing enterprises
• Strengthen value chains and integrate into the formal economy

Core Objectives

Financial Assistance

1. For Individual Micro-Enterprises

• Subsidy: 35% of eligible project cost (max ₹10 lakh)
• Contribution: Minimum 10% by beneficiary; balance through credit

2. For SHGs / Cooperatives / FPOs

• Seed Capital: ₹4 lakh per SHG for tools and working capital
• Capital Subsidy: 35% for common infrastructure (limit ₹3 crore)
• Branding/Marketing Grants: Based on ODOP and product strategy

Eligible Beneficiaries

• Existing individual entrepreneurs in the food processing sector
• New units (must align with ODOP guidelines)
• Farmer Producer Organizations (FPOs)
• Self-Help Groups (SHGs)
• Cooperatives

Significance of Bihar’s Achievement

• Leading state in scheme implementation for 2024–25
• Successful support to 2 lakh micro units, showing efficient outreach
• Demonstrates model governance and state-level convergence
• Broader Implications
• Supports rural livelihoods and promotes local entrepreneurship
• Boosts food security and value addition across districts
• Encourages self-reliance (Atmanirbhar Bharat) in food processing
• Aligns with Doubling Farmers’ Income and Make in India

Summary

The PMFME Scheme is a flagship initiative aimed at formalizing and strengthening India’s unorganized micro food processing sector. With its focus on credit support, infrastructure, ODOP, and capacity-building, it plays a vital role in inclusive rural development. Bihar’s top performance under the scheme reflects effective grassroots-level implementation and showcases the scheme’s potential to uplift rural economies and empower food entrepreneurs.

Exam Connect – Possible Questions

Prelims

1. With reference to the Pradhan Mantri Formalisation of Micro Food Processing Enterprises (PMFME) Scheme, consider the following statements:

1. It provides a credit-linked subsidy of 35% up to ₹10 lakh for individual micro enterprises.
2. Only new enterprises are eligible for assistance under the scheme.
3. The scheme is implemented by the Ministry of Rural Development.

Which of the statements given above is/are correct?
(a) 1 only
(b) 1 and 2 only
(c) 2 and 3 only
(d) 1, 2 and 3

Correct Answer: (a) 1 only

Explanation:

• Statement 1 is correct
• Statement 2 is incorrect (existing and new units are eligible)
• Statement 3 is incorrect (implemented by Ministry of Food Processing Industries)

Mains

1. “Formalizing the informal sector is key to inclusive economic growth.” Examine the role of the PMFME scheme in addressing informality in India’s food processing sector.
2. “One District One Product (ODOP) and PMFME are complementary initiatives.” Discuss how convergence of such schemes can transform rural food economies in India.
3. “Financial and infrastructural support to micro food processing units is vital for doubling farmers’ income.” Analyze the effectiveness of the PMFME scheme in this context.

5. Methane Emissions in the Energy Sector (IEA 2025 Report) – Environment

Why in the News?

• The International Energy Agency (IEA) in its Global Methane Tracker 2025 reported that methane emissions from the energy sector reached ~145 million tonnes (Mt) in 2024.
• Oil and gas operations alone contributed over 80 Mt, making them the single largest source within the energy domain.

Key Concepts and Background

1. What is Methane?

• Chemical formula: CH₄
• Properties:
  • Colourless, odourless, flammable gas
  • Also known as marsh gas
• Short atmospheric lifespan: ~10 years
• Global Warming Potential (GWP):
  • ~80 times more potent than CO₂ over 20 years
  • Major contributor to short-term global warming

2. Sources of Methane Emissions

Human activities contribute ~60% of total atmospheric methane.

3. Breakdown: Energy Sector Methane Emissions (2024)

Traditional biomass use in developing countries is a significant, often overlooked, source.

4. Current Trends and Concerns

• Atmospheric methane levels are now 5x higher than in pre-industrial times.
• Methane is responsible for about 30% of global temperature rise since the Industrial Revolution.
• Emissions continue to rise despite available technologies to curb them.

Mitigation and Technology

IEA Estimates on Mitigation Potential:

• 70% of methane emissions from fossil fuels can be prevented with existing technologies
• In the oil & gas sector:
  • 75% of emissions can be avoided
  • Methods: Leak detection and repair (LDAR), plugging abandoned wells, use of vapor recovery units

Cost-effective measures:

• Many technologies are low-cost or pay for themselves through captured gas
• Regulatory enforcement and monitoring systems are key for success

Top Methane Emitters (Fossil Fuel Operations

• 🇨🇳 China
• 🇺🇸 USA
• 🇷🇺 Russia
• 🇮🇷 Iran
• 🇹🇲 Turkmenistan
• 🇮🇳 India

India is among the top methane emitters, largely from coal and bioenergy use

Environmental and Policy Significance

• Tackling methane emissions is one of the fastest and most effective ways to slow global warming.
• Supports goals under:
  • Paris Agreement
  • Global Methane Pledge (2021 COP26) – voluntary pledge to cut methane emissions by 30% by 2030

Summary

Methane emissions from the energy sector reached 145 Mt in 2024, with oil, gas, and coal activities being major contributors. Despite methane’s short lifespan, its high warming potential makes it a critical target for climate action. Although cost-effective technologies exist, implementation remains weak. India and other top emitters must act urgently to reduce leaks and phase out traditional bioenergy use to meet climate targets.

Exam Connect – Possible Questions

Prelims

1. Consider the following statements about methane:

1. Methane has a longer atmospheric lifespan than carbon dioxide.
2. Methane is responsible for nearly 30% of global warming since the Industrial Revolution.
3. Oil and gas operations are the largest contributors to anthropogenic methane emissions.

Which of the above statements is/are correct?
(a) 1 and 2 only
(b) 2 and 3 only
(c) 1 and 3 only
(d) 1, 2 and 3

Correct Answer: (b) 2 and 3 only

Explanation:

• Statement 1 is incorrect (Methane’s lifespan is ~10 years, CO₂ can persist for centuries)
• Statements 2 and 3 are correct.

2. Which of the following countries is NOT among the top methane emitters from fossil fuel operations?

(a) Turkmenistan
(b) Brazil
(c) Iran
(d) China

Correct Answer: (b) Brazil

Explanation: Brazil is a major emitter in agriculture, not fossil fuels.

Mains

1. “Methane emissions offer a window of opportunity for near-term climate mitigation.” Examine the sources of methane in the energy sector and suggest strategies for its reduction.
2. “India must act swiftly on methane mitigation to meet its climate commitments.” Discuss the technological and policy measures needed to reduce methane emissions from fossil fuels and bioenergy.
3. “Tackling short-lived climate pollutants like methane is critical for achieving long-term climate goals.” Analyze the role of international cooperation in addressing methane emissions.

6. 20th Session of UN Forum on Forests (UNFF20) – Environment

Why in the News?

India participated in the 20th session of the United Nations Forum on Forests (UNFF20) held at the UN Headquarters, New York, reiterating its commitment to sustainable forest management and the United Nations Strategic Plan for Forests (UNSPF) 2017–2030.

What is the UN Forum on Forests (UNFF)?

United Nations Strategic Plan for Forests (UNSPF) 2017–2030

• Provides a global framework to enhance the contribution of forests to the 2030 Agenda for Sustainable Development.
• Aims to achieve 6 Global Forest Goals and 26 associated targets, including:
  • Increasing forest area globally
  • Eradicating forest poverty
  • Sustainable forest product use

India at UNFF20: Key Highlights

1. Voluntary National Contributions (VNCs)

• India reaffirmed its commitment to the UNSPF through VNCs.
• Reported a 25.17% increase in forest and tree cover since baseline assessment.

2. Major National Initiatives

3. International Cooperation

• India invited global participation in the International Big Cat Alliance (IBCA) for big cat conservation.
• Supported outcomes of the Country-Led Initiative (CLI) on forest fire management hosted in Dehradun, 2023.

4. Scientific Contributions

India shared findings on:

• Carbon sequestration
• Water services
• Biodiversity monitoring
• Use of:
  • System of Environmental Economic Accounting (SEEA)
  • Millennium Ecosystem Assessment (MEA)

Emphasized mainstreaming of ecosystem valuation into policymaking.

Related Global Initiative: New York Declaration on Forests (NYDF)

Summary

India’s participation in UNFF20 reaffirmed its proactive approach toward global forest governance. Through national commitments such as the Green India Mission, Aravalli Green Wall, and active international engagement via IBCA, India has positioned itself as a key stakeholder in achieving the UN Strategic Plan for Forests 2030. The session also highlighted India’s efforts in environmental accounting and forest fire management, emphasizing science-backed policymaking.

Exam Connect – Possible Questions

Prelims

1. With reference to the ‘New York Declaration on Forests’, which of the following statements are correct?

1. It was first endorsed at the United Nations Climate Summit in 2014.
2. It endorses a global timeline to end the loss of forests.
3. It is a legally binding international declaration.
4. It is endorsed by governments, big companies, and indigenous communities.
5. India was one of the signatories at its inception.

Options:
(a) 1, 2, and 4
(b) 1, 3, and 5
(c) 3 and 4
(d) 2 and 5

Correct Answer: (a)

• Statement 3 is incorrect (it is not legally binding)
• Statement 5 is incorrect (India was not a signatory)

Mains

1. “India’s role in global forest governance is becoming increasingly significant.” Discuss India’s contributions to the United Nations Forum on Forests and its alignment with the UNSPF.
2. “Voluntary National Contributions (VNCs) reflect India’s proactive approach to forest sustainability.” Evaluate India’s initiatives in achieving its forest targets under UNSPF 2017–2030.
3. “Mainstreaming ecosystem services and environmental accounting is critical for sustainable development.” Examine the relevance of SEEA and MEA tools in India’s forest policy.