15th May 2025-Current Affairs

by | May 15, 2025 | Current Affairs

1. Education Without Employment in India – Governance

Why in News?

India is grappling with a persistent employability crisis, where despite a growing number of educated graduates, their ability to secure meaningful employment remains alarmingly low. This issue persists even after the introduction of reforms like the National Education Policy (NEP) 2020, raising serious concerns about the effectiveness and direction of India’s educational strategies.

Key Concepts & Analysis

1. Employability vs. Education

  • Definition: Employability refers to the skills, competencies, and attributes that make graduates suitable for employment.
  • Current Scenario: Despite a rise in educational attainment, employability remains low. In 2025, the employability rate is projected to be just 42.6%.
  • Implication: A clear mismatch between what is taught in educational institutions and what is demanded by the job market.

2. National Education Policy (NEP) 2020 – Gaps in Implementation

  • Vision: NEP 2020 aimed to overhaul the education system by introducing flexible learning, multidisciplinary education, and vocational integration.
  • Reality Check:
    • Limited success in aligning education with industry needs.
    • Policies have unintentionally fed the gig economy with low-skill jobs, rather than producing skilled professionals for high-value sectors.
    • Lack of coordination between policy makers, educational institutions, and industries.

3. Structural and Governance Issues

  • Transparency Deficit: Many large-scale government initiatives lack accountability, leading to poor outcomes.
  • Policy Execution Gap: Strong policy intentions often fail at the implementation stage, due to:
    • Bureaucratic inefficiencies
    • Inadequate monitoring
    • Lack of stakeholder engagement

4. Need for Industry-Academia Collaboration

  • Current Gap: Weak integration of real-world, job-relevant skills into academic curricula.
  • Way Forward:
    • Strengthen vocational education and skill training at both secondary and tertiary levels.
    • Foster public-private partnerships to co-design curriculum and offer internships/apprenticeships.
    • Encourage outcome-based funding models, where institutions are rewarded for employment success of their graduates.

Broader Implications

  • Economic Consequences: An unskilled workforce impedes productivity, affects GDP growth, and limits innovation.
  • Social Impact: Rising youth unemployment can lead to frustration, migration, and even social unrest.
  • Global Competitiveness: Without a future-ready workforce, India’s demographic dividend risks becoming a demographic disaster.

Summary

India’s education system is undergoing reforms, especially under the NEP 2020, but these changes have not effectively improved employability. The core issue lies in the disconnect between academic learning and job market demands, exacerbated by poor implementation and lack of industry participation. Unless educational policies are practically aligned with employment outcomes, the country risks having a large population of educated but unemployed youth. Addressing this requires greater accountability, skills-based learning, and stronger industry-academia collaboration.

Exam Connect – Possible Questions

Prelims

  1. Which of the following is a feature of the National Education Policy 2020?
    a) Focus on rote learning
    b) Promotion of single-stream education
    c) Introduction of flexible learning pathways
    d) Centralization of higher education
    Answer: c) Introduction of flexible learning pathways

  2. As per current projections, the employability rate of Indian graduates in 2025 is expected to be around:
    a) 68.4%
    b) 50.2%
    c) 42.6%
    d) 75.1%
    Answer: c) 42.6%

  3. Which of the following is NOT a challenge in improving employability in India?
    a) Lack of industry collaboration
    b) Inadequate focus on vocational skills
    c) Surplus of jobs in the market
    d) Inefficient implementation of educational policies
    Answer: c) Surplus of jobs in the market

Mains

1. “The National Education Policy 2020 aims to transform Indian education, yet fails to address the core issue of employability.”
Critically examine this statement with suggestions for bridging the education-employment gap.

2. Discuss the implications of low graduate employability on India’s economic growth and demographic dividend. What policy measures are necessary to reverse this trend?

3. Evaluate the challenges faced in implementing large-scale educational reforms in India. What institutional reforms are required to ensure better accountability and outcomes?


2. Digital Banking Units (DBUs) – Economy

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Why in News?

In October 2022, 75 Digital Banking Units (DBUs) were launched across various remote districts in India to commemorate the 75th year of Independence (Azadi Ka Amrit Mahotsav). However, the momentum has slowed in the past two years, raising concerns about long-term sustainability and outreach.

Key Concepts & Analysis

1. What are Digital Banking Units (DBUs)?

  • Definition: DBUs are specialized fixed-location banking outlets that provide digital financial services using advanced infrastructure.
  • Objective: Enhance accessibility, convenience, and financial inclusion, particularly in semi-urban and rural areas.

2. Core Features of DBUs

FeatureDescription
Mode of OperationOperate in both self-service (kiosks, ATMs) and assisted service modes (with staff support)
Availability24×7 access to core digital banking services
Establishment CriteriaCan be set up by commercial banks (with digital banking experience) in Tier I to Tier VI centres without prior RBI approval (subject to conditions)
ExclusionRRBs, Payment Banks, and Local Area Banks are currently not permitted to establish DBUs
InfrastructureMust operate from separate premises, ensure physical and cybersecurity protocols, and offer automated cash machines
RBI OversightDBUs must comply with RBI guidelines on digital banking operations, grievance redressal, and data privacy

3. Services Offered by DBUs

  • Account opening and servicing
  • Digital passbook updates
  • Debit/Credit card issuance and applications
  • Mobile/Internet banking setup
  • UPI QR-based merchant onboarding
  • Loan applications and EMI services through digital interfaces

4. Benefits and Significance

  • Financial Inclusion: Extends banking to underserved and remote populations
  • Cost-Effectiveness: Reduces operational costs compared to traditional branches
  • Digital Empowerment: Encourages citizens to adopt digital financial literacy
  • Convenience: Enables access to banking services 24/7
  • Support to Government Initiatives: Aids schemes like Jan Dhan Yojana, Digital India, and PM SVANidhi

5. Challenges

  • Reduced Momentum: After initial launch, expansion and utilization have slowed.
  • Infrastructure Gaps: Many rural areas face internet connectivity issues.
  • Digital Literacy: Low awareness and digital skills limit usage, especially among the elderly and less-educated populations.
  • Security Concerns: Digital platforms are vulnerable to cyber frauds and phishing without robust protection.
  • Exclusion of Smaller Banks: RRBs and cooperative banks, which are key to rural banking, are excluded from DBU eligibility.

Summary

Digital Banking Units (DBUs) are a flagship initiative aimed at expanding digital banking in remote and underserved areas. They operate 24/7, offering essential banking services through self-service and assisted modes. While DBUs are designed to boost financial inclusion and modernize banking infrastructure, their impact has been limited by operational challenges, digital illiteracy, and lack of momentum post-launch. For DBUs to truly succeed, India must address infrastructure, awareness, and inclusivity concerns—especially involving local and small-scale banking institutions.

Exam Connect – Possible Questions

Prelims

  1. Which of the following institutions are eligible to set up Digital Banking Units (DBUs)?
    a) Regional Rural Banks
    b) Payment Banks
    c) Scheduled Commercial Banks with digital experience
    d) Local Area Banks
    Answer: c) Scheduled Commercial Banks with digital experience

  2. What is the primary objective of setting up Digital Banking Units in India?
    a) To replace physical bank branches
    b) To improve tax compliance
    c) To enhance financial inclusion and digital banking penetration
    d) To promote cryptocurrency usage
    Answer: c) To enhance financial inclusion and digital banking penetration

  3. Which of the following services is NOT typically offered by a Digital Banking Unit (DBU)?
    a) Opening a bank account
    b) UPI merchant onboarding
    c) Physical disbursal of agricultural seeds
    d) Issuance of debit/credit cards
    Answer: c) Physical disbursal of agricultural seeds

Mains

1. “Digital Banking Units (DBUs) are a step towards democratizing access to banking, but their success depends on inclusion and digital literacy.”
Discuss the potential and limitations of DBUs in achieving financial inclusion in rural India.

2. Critically evaluate the role of Digital Banking Units in strengthening the digital financial infrastructure of India. What reforms are needed to make DBUs sustainable and inclusive?

3. “Technological infrastructure alone cannot ensure financial inclusion.”
Examine this statement in the context of India’s Digital Banking Units initiative.


3. India’s Right to Repair Movement – Economy

Why in News?

The Department of Consumer Affairs (DoCA) has submitted a report proposing a “Framework on Repairability Index (RI)” for the mobile and electronics sector. This initiative is part of the growing Right to Repair movement in India, aiming to enhance consumer rights and reduce environmental harm from e-waste.

Key Concepts & Analysis

1. What is the Right to Repair Movement?

  • Definition: A global consumer rights movement advocating for laws and policies that ensure consumers can freely repair the products they buy — from smartphones and laptops to appliances and farm equipment.
  • Goal: Reduce dependence on manufacturers, extend product life, and promote sustainability.

2. Repairability Index (RI): A Core Element

  • The Repairability Index is a score assigned to electronic products based on how easily they can be diagnosed, repaired, and restored.
  • Parameters include:
    • Availability of spare parts
    • Pricing and access to repair components
    • Availability of repair manuals and documentation
    • Software support (e.g., updates, patching)
    • Cost-effectiveness and repair time

A higher index = easier to repair
A lower index = more difficult to repair

3. Why Is This Important for India?

a. Consumer Empowerment

  • Currently, many electronic items are designed to be difficult or costly to repair, pushing consumers to replace rather than repair.
  • The RI will provide transparency at the point of purchase, allowing informed decisions.

b. Environmental Sustainability

  • India is the 3rd-largest producer of e-waste globally.
  • RI supports the circular economy by promoting:
    • Longer product lifecycles
    • Reuse and recycling
    • Reduction in planned obsolescence

c. Boost to Repair Ecosystems

  • May help formalize the local repair economy (small technicians and service providers).
  • Encourages the development of third-party repair services and skill development in electronics maintenance.

4. Global Context

  • France has already implemented a mandatory Repairability Index for smartphones, laptops, etc.
  • EU and US are also advancing Right to Repair legislation.
  • India’s initiative aligns with SDG 12 (Responsible Consumption and Production) and the Paris Climate Goals.

5. Challenges Ahead

ChallengeExplanation
Manufacturer ResistanceOEMs often cite IP and safety concerns to restrict third-party repairs.
Economic DisincentiveManufacturers may lose revenue from frequent replacements.
Policy BalancingMust balance consumer rights with industry innovation and R&D.
Repair InfrastructureIndia lacks widespread, formal repair networks—especially in rural areas.

Summary

The Right to Repair Movement in India, through the introduction of a Repairability Index, represents a progressive step in empowering consumers, reducing e-waste, and promoting a circular economy. It encourages durability, transparency, and accountability in the electronics sector. However, its success will depend on the implementation of standards, manufacturer cooperation, and building repair infrastructure nationwide.

Exam Connect – Possible Questions

Prelims

  1. Which of the following best describes the Repairability Index proposed by the Department of Consumer Affairs?
    a) An index for ranking software usage in devices
    b) A score indicating the market value of digital gadgets
    c) A score measuring ease of product repairability
    d) A scheme to subsidize smartphone purchases
    Answer: c) A score measuring ease of product repairability

  2. Which of the following parameters are included in India’s proposed Repairability Index?
    1. Availability of spare parts
    2. Time required for repair
    3. Software update support
    4. Mobile network coverage
    Select the correct answer:
    a) 1 and 2 only
    b) 1, 2, and 3 only
    c) 2, 3, and 4 only
    d) 1, 3, and 4 only
    Answer: b) 1, 2, and 3 only

  3. Which Sustainable Development Goal (SDG) does the Right to Repair movement most closely align with?
    a) SDG 5 – Gender Equality
    b) SDG 12 – Responsible Consumption and Production
    c) SDG 3 – Good Health and Well-being
    d) SDG 8 – Decent Work and Economic Growth
    Answer: b) SDG 12 – Responsible Consumption and Production

Mains

1. “The Right to Repair movement in India is a step toward both consumer empowerment and environmental conservation.”
Discuss the significance of the Repairability Index in this context. What challenges could hinder its success?

2. Evaluate how initiatives like the Repairability Index can help India transition towards a circular economy.
Suggest measures to improve their implementation.

3. “Ensuring repairable products is as important as promoting digital access.”
Critically analyze this statement with reference to digital inclusion and sustainability in India.


4. Mera Yuva Bharat (MY Bharat) – Governance

Why in News?

Mera Yuva Bharat (MY Bharat) has launched a selection process for civil defense volunteers, signaling its growing role in empowering India’s youth to participate in disaster management and other nation-building activities.

Key Concepts & Analysis

1. What is MY Bharat?

  • Full Form: Mera Yuva Bharat
  • Type: Autonomous body under the Department of Youth Affairs, Ministry of Youth Affairs and Sports.
  • Launched to: Promote youth-centric development through structured engagement, skill-building, and service-oriented opportunities.

2. Core Objectives

  • Empower youth (ages 15–29) by integrating them into:
    • Volunteering and community service
    • Disaster response and civil defense
    • Skill development and capacity building
  • Serve as a centralized platform for youth participation in government and NGO-led initiatives.
  • Focus on youth-led development, where young people are active contributors to societal change.

3. Phygital Platform – The MY Bharat Portal

FeatureDescription
Phygital ApproachCombines physical engagement (on-ground programs) with digital connectivity via the online portal
FunctionsYouth can register, participate in events, access training modules, and track volunteering hours
CollaborationsWorks with Police, Urban Local Bodies (ULBs), and various ministries to offer opportunities
AccessibilityNationwide access, promoting inclusivity across urban and rural areas

4. Target Demographic

  • Primary Focus: Youth aged 15–29 years, as per the National Youth Policy.
  • Adolescent Outreach: Some initiatives also target adolescents aged 10–19 years, to build early civic responsibility.

5. Importance in Governance and Disaster Management

  • By recruiting civil defense volunteers, MY Bharat:
    • Enhances community resilience
    • Promotes grassroots disaster preparedness
    • Empowers youth with real-world experience in public service
  • Encourages participatory governance by enabling youth to take leadership in solving local problems.

Broader Implications

a. Youth Empowerment

  • Recognizes youth as partners in development, not just beneficiaries.
  • Builds civic values and leadership skills among the next generation.

b. Digital Governance

  • Demonstrates how technology can enable outreach and civic engagement at scale.

c. Policy Innovation

  • Reflects a shift from isolated youth schemes to an integrated, data-driven platform for engagement.

Summary

Mera Yuva Bharat (MY Bharat) is a transformative initiative that positions India’s youth as key agents of nation-building. Through its phygital platform, it enables young people to access volunteer roles, skill programs, and disaster response training. It promotes youth-led development and strengthens the government’s capacity to mobilize its demographic dividend. However, sustained impact will depend on continuous outreach, inter-agency coordination, and local-level engagement.

Exam Connect – Possible Questions

Prelims

  1. Mera Yuva Bharat (MY Bharat) is an initiative under which of the following Ministries?
    a) Ministry of Education
    b) Ministry of Youth Affairs and Sports
    c) Ministry of Labour and Employment
    d) Ministry of Skill Development
    Answer: b) Ministry of Youth Affairs and Sports

  2. Which age group is primarily targeted by the Mera Yuva Bharat initiative?
    a) 6–14 years
    b) 10–19 years
    c) 15–29 years
    d) 18–35 years
    Answer: c) 15–29 years

  3. Which of the following correctly describes the “phygital” approach used in MY Bharat?
    a) A new method for biometric verification
    b) Physical volunteering integrated with digital access to opportunities
    c) Use of holograms in online education
    d) Distribution of digital devices to students
    Answer: b) Physical volunteering integrated with digital access to opportunities

Mains

1. “Mera Yuva Bharat represents a shift from youth welfare to youth-led development.”
Critically evaluate the role of MY Bharat in reshaping India’s approach to youth engagement and nation-building.

2. Discuss how initiatives like MY Bharat can strengthen community-based disaster preparedness and response in India.

3. Examine the potential of “phygital platforms” like MY Bharat in transforming youth governance and participatory democracy in India.


5. SAMRIDH Scheme (Startup Accelerator for Product Innovation, Development and Growth) – Economy

Why in News?

Two individuals, including a chartered accountant, were recently arrested for allegedly defrauding over ₹3 crore from the Ministry of Electronics and Information Technology (MeitY) by misusing the SAMRIDH scheme, which is intended to support startups through acceleration and funding.

Key Concepts & Analysis

1. What is the SAMRIDH Scheme?

  • Full Form: Startup Accelerator for Product Innovation, Development and Growth
  • Launched by: Ministry of Electronics and Information Technology (MeitY)
  • Aim: To accelerate IT-based startups and help them scale by providing funding support, mentorship, and market access through selected accelerators.

2. Core Objectives

  • Provide early-stage startups with:
    • Access to funding (up to ₹40 lakh)
    • Exposure to domestic and global markets
    • Mentorship and capacity-building
    • Investor and customer connect
  • Enhance India’s position as a global startup hub, especially in tech-led innovation.

3. Key Features of the Scheme

FeatureDetails
Implementing AgenciesMeitY Start-up Hub (MSH) & Digital India Corporation (DIC)
Funding SupportUp to ₹40 lakh per eligible startup (on a matching fund model with private investors)
Initial Cohort22 accelerators across 12 states supporting 175 startups
Sectors CoveredHealth-tech, Agri-tech, Ed-tech, Fin-tech, SaaS, Consumer-tech, Sustainability
Startup SelectionDone via rigorous screening by accelerators (5–10 startups per accelerator)

4. Role of Accelerators

  • Selected accelerator partners (academic institutions, private entities, and incubators) offer:
    • Mentorship & legal advisory
    • Market diagnostics & research
    • Investor connections (VCs, angels)
    • Support for pitching and business scaling
  • Ensure accountability and quality engagement through periodic progress reviews.

5. Significance of the Scheme

Strengthens Startup Ecosystem – By reducing early-stage funding and knowledge barriers
Boosts Innovation – Especially in cutting-edge digital technologies
Public-Private Collaboration – Uses government funds to leverage private capital and expertise
Decentralized Support – Involves institutions across 12 states, spreading startup activity beyond metros
Global Market Access – Focus on helping startups build globally scalable solutions

6. Challenges and Concerns

IssueExplanation
Fraud and MisuseRecent arrest shows gaps in funding oversight and verification mechanisms
Accountability of AcceleratorsNeed to ensure consistent quality control and ethical standards
Compliance BurdenSmall startups may find compliance with funding rules and reporting challenging
Impact MeasurementNeed for transparent evaluation metrics to assess real-world startup outcomes

Linkages with Broader Government Goals

  • Supports Digital India, Startup India, and Atmanirbhar Bharat initiatives
  • Enhances India’s ability to export tech solutions globally
  • Aligns with the vision to make India a $5 trillion economy

Summary

The SAMRIDH Scheme, launched by MeitY, is a key initiative to accelerate digital startups by providing financial support, mentorship, and access to global markets. It works through a network of vetted accelerators and aims to nurture technology-based startups in diverse sectors like ed-tech, agri-tech, and fin-tech. Despite its strong framework, oversight challenges and recent fraud cases highlight the need for better monitoring and transparency. Nonetheless, SAMRIDH plays a vital role in strengthening India’s innovation ecosystem and supporting economic growth through entrepreneurship.

Exam Connect – Possible Questions

Prelims

  1. The SAMRIDH Scheme is implemented by which of the following?
    a) NITI Aayog
    b) Ministry of Skill Development and Entrepreneurship
    c) MeitY Start-up Hub and Digital India Corporation
    d) Department for Promotion of Industry and Internal Trade (DPIIT)
    Answer: c) MeitY Start-up Hub and Digital India Corporation

  2. Under the SAMRIDH Scheme, eligible startups can receive funding support of up to:
    a) ₹10 lakh
    b) ₹25 lakh
    c) ₹40 lakh
    d) ₹1 crore
    Answer: c) ₹40 lakh

  3. Which of the following sectors is not directly supported under the SAMRIDH Scheme?
    a) Health-tech
    b) Ed-tech
    c) Real estate development
    d) Fin-tech
    Answer: c) Real estate development

Mains

1. “SAMRIDH Scheme plays a crucial role in fostering a resilient and innovation-driven startup ecosystem in India.”
Discuss the design and implementation of the scheme in light of recent controversies regarding misuse.

2. Evaluate how government-backed accelerator schemes like SAMRIDH contribute to India’s digital economy. What improvements are needed to ensure transparency and scalability?

3. “Public-private collaboration is essential for accelerating innovation in India’s startup ecosystem.”
Analyze with reference to initiatives like the SAMRIDH Scheme.


6. Centralised Information Management System (CIMS) – Economy

Why in News?

The Reserve Bank of India (RBI) has mandated that all Regulated Entities (REs) must report information about their Digital Lending Applications (DLAs) through the Centralised Information Management System (CIMS) portal. This move aims to enhance regulatory oversight and data-driven governance in the financial sector.

Key Concepts & Analysis

1. What is CIMS?

  • Full Form: Centralised Information Management System
  • Developed by: Reserve Bank of India (RBI)
  • Purpose: To collect, manage, and analyze large-scale financial and regulatory data submitted by banks and non-banking financial companies (NBFCs).

2. Key Objectives

  • Create a centralized digital repository for all data submitted by regulated financial entities.
  • Enhance efficiency, accuracy, and timeliness of regulatory reporting.
  • Improve monitoring of financial risks through advanced data analytics.
  • Provide transparent and accurate data to policymakers, financial institutions, and the public.

3. Key Features of CIMS

FeatureDescription
Data WarehouseCIMS acts as a centralized storage facility for regulatory, fiscal, corporate, and real sector data.
Big Data CapabilityUses advanced technology to handle high-volume, high-velocity data from multiple financial sources.
Data Analytics ToolsSupports data mining, text mining, visual analytics, and trend forecasting.
Cloud-Based SystemImproves scalability, reduces data handling burden on banks and NBFCs, and allows real-time access.
Electronic SubmissionEnables digital submission of all required reports, eliminating manual and paper-based systems.

4. Relevance to Digital Lending

  • All Digital Lending Applications (DLAs) used by REs must be registered and reported via CIMS.
  • Helps the RBI monitor:
    • Use of unauthorized apps
    • Consumer protection standards
    • Risk of fraud and mis-selling

5. Significance of CIMS

Stronger Regulatory Oversight – Helps RBI identify risks early and respond faster
Efficiency & Transparency – Improves data flow between regulators and institutions
Reduced Compliance Burden – Standardized digital interface simplifies data reporting
Consumer Protection – Better monitoring of digital lending curbs predatory practices
Policy Innovation – Reliable data helps evidence-based decision-making

6. Challenges and Considerations

ChallengeDescription
Data Security and PrivacyHandling vast sensitive data necessitates strong cybersecurity frameworks
Integration IssuesBanks and NBFCs must adapt their internal systems to CIMS standards
Data QualityEnsuring accuracy and consistency across diverse data sources
Training & Capacity BuildingFinancial entities must train staff to use the system efficiently

Linkages with Broader Financial Reforms

  • Supports Digital India and FinTech regulation goals
  • Aligns with RBI’s Vision 2025 for tech-driven financial supervision
  • Complements other digital initiatives like Account Aggregator Framework, Public Credit Registry, and Digital Lending Guidelines

Summary

The Centralised Information Management System (CIMS) is a strategic RBI initiative designed to streamline and digitize the regulatory data management process. By serving as a central warehouse for financial data and enabling real-time analytics, CIMS enhances the RBI’s ability to monitor systemic risks, regulate digital lending, and promote data-driven governance. Its success hinges on seamless integration by banks, data security, and ongoing capacity development across the financial sector.

Exam Connect – Possible Questions

Prelims

  1. What is the primary function of the Centralised Information Management System (CIMS)?
    a) Conduct monetary policy reviews
    b) Provide digital banking to rural customers
    c) Manage, analyze, and aggregate regulatory data
    d) Issue bonds and government securities
    Answer: c) Manage, analyze, and aggregate regulatory data

  2. Which of the following technologies are used in CIMS?
    1. Cloud computing
    2. Data mining and text analytics
    3. Blockchain ledger management
    4. Visual analyticsSelect the correct answer:
    a) 1 and 2 only
    b) 1, 2, and 4 only
    c) 2 and 3 only
    d) 1, 3, and 4 only
    Answer: b) 1, 2, and 4 only

  3. The CIMS portal is primarily used for reporting details of which of the following?
    a) Foreign exchange reserves
    b) Bank branch expansions
    c) Digital lending applications
    d) Mutual fund investments
    Answer: c) Digital lending applications

Mains

1. “Data-driven governance is key to managing the complexities of India’s fast-evolving financial sector.”
Discuss this statement in the context of the RBI’s Centralised Information Management System (CIMS).

2. Evaluate the significance of CIMS in regulating digital lending in India. What are the potential benefits and risks of such centralised data systems?

3. How can digital platforms like CIMS enhance transparency, accountability, and efficiency in regulatory institutions? Illustrate with examples.


7. Treasury Bills (T-Bills) – Economy

Why in News?

India has extended a USD 50 million Treasury Bill to the Maldives for another year through the State Bank of India (SBI). This financial support reflects India’s continued commitment to regional cooperation and the use of T-Bills as instruments of foreign aid and economic diplomacy.

Key Concepts & Analysis

1. What are Treasury Bills (T-Bills)?

  • Definition: Treasury Bills are short-term debt instruments issued by the Government of India to borrow funds for up to one year.
  • They are issued by the RBI on behalf of the central government.
  • Used for managing short-term liquidity and government cash flow needs.

2. Key Features of T-Bills

FeatureDescription
Tenure91 days, 182 days, and 364 days
FormZero-coupon instruments (no interest payments)
PricingIssued at a discount and redeemed at face value
Minimum Investment₹25,000 and in multiples thereof
IssuerReserve Bank of India on behalf of the Government of India
SafetyConsidered risk-free and highly liquid
Auction PlatformSold via RBI’s E-Kuber electronic auction platform

3. How Do T-Bills Work?

  • Example: A 91-day T-Bill with a face value of ₹100 may be issued at ₹98.
  • At maturity, the investor receives ₹100, resulting in a ₹2 return (implied yield).
  • Since there is no periodic interest, the return is the difference between issue price and maturity value.

4. Purpose and Applications

PurposeExplanation
Short-Term BorrowingHelps the government meet temporary fiscal deficits
Monetary Policy ToolRBI uses T-Bills under Open Market Operations (OMO) to regulate liquidity and control inflation
International CooperationAs seen with Maldives, T-Bills are also used as tools of bilateral financial assistance
Investment InstrumentUsed by banks and mutual funds for short-term investments and to maintain Statutory Liquidity Ratio (SLR) requirements

5. Who Can Buy T-Bills?

  • Banks and Financial Institutions
  • Corporate Bodies
  • Mutual Funds
  • Insurance Companies
  • Individuals (including through RBI Retail Direct Platform)
  • Foreign governments or entities, in certain cases like the Maldives example

6. Significance in the Current Context

  • India’s extension of T-Bills to the Maldives demonstrates:
    • Use of economic instruments in foreign policy
    • India’s soft power and regional influence
    • Flexible use of domestic financial tools for diplomatic support

Summary

Treasury Bills (T-Bills) are short-term, zero-coupon securities issued by the RBI on behalf of the Government of India to raise funds for up to one year. They are issued at a discount and redeemed at face value, making them a safe and liquid investment option. Apart from managing domestic liquidity, T-Bills can also serve as a tool of economic diplomacy, as demonstrated by India’s renewal of a USD 50 million T-Bill for the Maldives. Their importance lies in balancing fiscal needs, investment flows, and monetary policy objectives.

Exam Connect – Possible Questions

Prelims

  1. Which of the following statements about Treasury Bills is/are correct?
    1. They are long-term government securities.
    2. They are issued at a discount and redeemed at face value.
    3. They carry no interest.
    Select the correct answer:
    a) 1 and 2 only
    b) 2 and 3 only
    c) 1 and 3 only
    d) All of the above
    Answer: b) 2 and 3 only

  2. What is the minimum investment limit for purchasing Treasury Bills in India?
    a) ₹10,000
    b) ₹25,000
    c) ₹1,00,000
    d) ₹50,000
    Answer: b) ₹25,000

  3. Treasury Bills are issued by:
    a) Ministry of Finance
    b) Reserve Bank of India
    c) SEBI
    d) State Bank of India
    Answer: b) Reserve Bank of India

Mains

1. Discuss the role of Treasury Bills in India’s monetary policy framework. How do they help manage liquidity and inflation in the economy?

2. “Financial instruments like Treasury Bills can play a role in economic diplomacy.”
Examine this statement with reference to India’s financial assistance to the Maldives.

3. What are zero-coupon securities? Explain how Treasury Bills function as short-term funding instruments for the government.


8. Dirang Geothermal Project & Geothermal Energy in India – Science and Technology

Why in News?

India has successfully drilled its first geothermal production well in Dirang, located in West Kameng district, Arunachal Pradesh. This is a major milestone, as it positions Dirang to potentially become India’s first geothermal-powered town.

Key Concepts & Analysis

1. What is Geothermal Energy?

  • Definition: Geothermal energy is heat derived from the Earth’s interior, primarily due to the natural decay of radioactive materials like uranium, thorium, and potassium.
  • Renewability: It is a renewable, non-intermittent (base load) source of energy.
  • Uses:
    • Electricity generation
    • Heating (space, greenhouses)
    • Industrial drying
    • Storage and refrigeration

2. Dirang Geothermal Project – Significance

FeatureDetails
LocationDirang, West Kameng district, Arunachal Pradesh
Lead AgencyCentre for Earth Sciences and Himalayan Studies (CESHS), with support from the Ministry of Earth Sciences (MoES)
Technology PartnersNorwegian Geotechnical Institute and Geotro ehf (Iceland)
Geological CharacteristicsMedium-to-high enthalpy zone (~150°C), located at a fault between quartzite and schist, ideal for drilling
ApplicationsElectricity, space heating, crop drying, and cold storage in Himalayan conditions

3. Why Dirang?

  • Based on two years of geological, geochemical, and structural surveys
  • Strategic location in the Himalayas
  • High subsurface temperature zones identified
  • Feasibility for low-to-medium-scale geothermal applications

4. Geothermal Energy Potential in India

  • Geothermal Atlas of India (2022) identifies 381 hot springs/thermally anomalous sites
  • Estimated capacity: 10,600 MW → enough to power 10 million+ homes
  • Major geothermal zones:
    • Puga Valley (Ladakh)
    • Tattapani (Chhattisgarh)
    • Manikaran (Himachal Pradesh)
    • Godavari Basin (Telangana)
    • Bakreswar (West Bengal)

5. Advantages of Geothermal Energy

Base-load Power – Continuous supply unlike solar/wind
Low Emissions – Minimal carbon footprint
Localized Use – Ideal for remote and hilly regions
Multipurpose – Heating, drying, cooling, electricity generation
High Efficiency – Energy output to input ratio is high

6. Challenges in Adoption

ChallengeExplanation
Exploration CostsHigh initial cost for geological and drilling surveys
Technological ExpertiseIndia lacks mature domestic geothermal technology
Infrastructure LimitationsRemote locations often lack grid connectivity
Funding & Policy SupportFew incentives compared to solar and wind sectors
Seismic RisksDrilling may cause minor tremors or trigger geological instability if not managed carefully

7. Other Indian Geothermal Projects

  • Manuguru (Telangana) – 20 kW pilot plant
  • Puga Valley (Ladakh) – 1 MW pilot project
  • Ongoing collaborations with Iceland, Norway, and Japan for technology transfer and feasibility studies

Summary

The Dirang Geothermal Project is a pioneering initiative that marks India’s entry into geothermal energy production. By successfully drilling its first geothermal well, India moves closer to diversifying its renewable energy mix, particularly in Himalayan and remote regions. With over 10,000 MW of estimated potential, geothermal energy can complement solar and wind by offering reliable base-load power. The project reflects India’s commitment to clean energy innovation, though scaling up will require policy, funding, and international collaboration.

Exam Connect – Possible Questions

Prelims

  1. Which of the following best describes geothermal energy?
    a) Energy derived from ocean waves
    b) Energy derived from the Earth’s magnetic field
    c) Energy derived from radioactive decay within the Earth
    d) Energy derived from atmospheric temperature differences
    Answer: c) Energy derived from radioactive decay within the Earth

  2. Dirang, recently in the news for geothermal energy, is located in which Indian state?
    a) Sikkim
    b) Himachal Pradesh
    c) Arunachal Pradesh
    d) Jammu and Kashmir
    Answer: c) Arunachal Pradesh

  3. Which of the following is a key advantage of geothermal energy over solar and wind?
    a) Requires more land area
    b) Intermittent in nature
    c) Can provide base-load power
    d) Produces more CO₂ emissions
    Answer: c) Can provide base-load power

Mains

1. “Geothermal energy offers India a consistent and clean power source, especially in Himalayan and remote regions.”
Discuss the scope and challenges of geothermal energy in India in the context of the Dirang project.

2. Examine the potential of geothermal energy in India’s energy mix. How can international partnerships enhance domestic geothermal capacity?

3. “India’s geothermal energy push can address both energy poverty and climate change.”
Evaluate the statement with reference to recent developments.