PYQ Relevance:
Q) One of the intended objectives of Union-Budget 15-18 is to ‘transform, energize and clean India’. Analyze the measures proposed in the Budget 15-18 to achieve the objective. (UPSC CSE 2017)
Q) Distinguish between Capital Budget and Revenue Budget. Explain the components of both these Budgets. (UPSC CSE 2021) |
Mentor’s Comment: UPSC mains have always focused on Sustainable Development (2016, 2017, 2018 and 2022), and Budget Initiatives (2017 and 2021).
The Union Budget 2024-25 presents a strategic framework aimed at fostering economic growth while addressing the needs of various sectors, particularly the middle class, agriculture, and employment. While efforts to streamline tax structures and reduce compliance burdens are positive, they must be accompanied by robust strategies to ensure sustainable growth and equitable distribution of resources.
The editorial emphasizes the urgent need for decisive and equitable action in addressing inclusive and sustained growth. This content can be used to present challenges/criticism for the present Budget 2025-26 in your Mains Answers for Economy and Infrastructure.
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Let’s learn!
Why in the News?
The Union Finance Minister presented the Union Budget on February 1, addressing significant economic challenges while outlining an ambitious plan for ‘Viksit Bharat’ that focuses on various sectors, which although requires careful evaluation.
What are the key highlights from Budget 2025 that would raise the questions?
- Fiscal Consolidation Target: This target aims to reduce the fiscal deficit from the previous year’s estimate of 4.9% and reflects the government’s commitment to managing public debt while balancing necessary public expenditures and economic growth challenges.
- The Budget sets a Fiscal Consolidation Target of 4.4% of GDP for FY26, relying on optimistic revenue projections, including 11.2% growth in total tax revenues and 14.4% in income tax revenues, despite significant tax cuts and economic challenges.
- Second Asset Monetisation Plan (2025-30): This plan aims to generate ₹10 lakh crore by monetizing government-owned assets. The proceeds from this monetization will be reinvested into new infrastructure projects.
- Success of Second Asset Monetisation Plan (2025-30) after previous underperformance raises concerns, and ₹11.54 lakh crore in net market borrowings may crowd out private capital amid weak credit demand.
- Additionally, the government has proposed ₹1.5 lakh crore in interest-free loans to states to further support capital expenditure and infrastructure reforms.
- Personal Income Tax: The revisions in income tax rates that exempt incomes up to ₹12 lakh can lead to a loss of ₹1 lakh crore in direct tax revenue due to the following reasons:
- Increased Exemptions: By exempting incomes up to ₹12 lakh, more individuals will not be liable to pay income tax, significantly reducing the overall tax base.
- Reduced Tax Rates: The new tax regime includes lower tax rates for various income brackets, which means that even those who do pay taxes will contribute less than they would under the previous regime.
- Impact on Government Revenue: The expected loss of ₹1 lakh crore in direct tax revenue will limit the government’s financial resources, constraining its ability to fund developmental initiatives and public services.
- Declining Household Savings: As the government foregoes this revenue, it may struggle to maintain or increase public investments, which could exacerbate the already declining household savings rate, impacting long-term economic stability.
- India’s Manufacturing Sector: The Budget aims to bolster India’s manufacturing sector, which currently contributes only 17% to the GDP, through various initiatives. However, significant challenges remain that could hinder the sector’s growth and competitiveness.
- Regulatory Inefficiencies: By enhancing access to credit for MSMEs, the government aims to foster growth, but the existing regulatory framework often hampers business operations, leading to delays and increased costs that undermine competitiveness.
- Low Innovation Capacity: The government has introduced PLIs targeting various sectors to encourage domestic production and attract foreign investment. However, the investment in R&D is critically low, currently at just 0.64% of GDP. This lack of focus on innovation limits the ability of Indian manufacturers to compete effectively.
- Structural Weaknesses: The manufacturing sector has been plagued by structural weaknesses such as high costs of raw materials and logistics, which make it less competitive compared to other nations.
- For example, steel prices in India are reported to be 20-30% higher than those in China.
What are the gaps highlighted by the budget that need to be recognized in the Agricultural Sector?
Significant Agricultural Initiatives taken by the Government in Budget 2025-26:
1. Prime Minister Dhan-Dhaanya Krishi Yojana:
- Objective: To enhance agricultural productivity and promote sustainable farming practices in 100 districts characterized by low productivity, moderate crop intensity, and below-average credit access.
- The initiative is expected to benefit approximately 1.7 crore farmers by providing them with better financial support and resources. The program will be executed in partnership with state governments, leveraging existing schemes and specialized measures to drive focused reforms.
- Key Focus Areas:
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- Introduce advanced farming techniques and modern equipment.
- Encourage farmers to grow a variety of crops instead of relying on a single crop.
- Develop storage facilities at the panchayat and block levels to reduce crop wastage.
- Enhance irrigation infrastructure to increase agricultural output.
- Facilitate easier access to both short-term and long-term credit for farmers.
2. National Mission on High-Yielding Seeds:
- Objective: This mission aims to improve the availability and use of high-yielding seed varieties to boost agricultural productivity across the country.
- The mission emphasizes research and development in seed technology, ensuring that farmers have access to superior quality seeds that can lead to better crop yields.
- It will work in conjunction with other agricultural programs, such as the Dhan-Dhaanya Krishi Yojana, to maximize the impact on food security and farmer income.
3. Increased Kisan Credit Card (KCC) Limit:
- The loan limit for KCC has been raised from ₹3 lakh to ₹5 lakh, along with targeted support in 100 low-productivity districts, indicating a shift from blanket subsidies to more precise financial assistance for farmers.
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- Short-Term Loan Focus: The emphasis on credit enhancements primarily through short-term loans may perpetuate farmers’ dependency on debt without resolving underlying issues.
- Systemic inefficiencies in agricultural markets remain unaddressed, particularly regarding price volatility and market access.
- Missed Export Opportunities: The lack of concrete measures to promote agricultural exports, especially as India aims to lead in millets and natural farming, represents a significant missed opportunity.
- Services exports, particularly in IT and business process outsourcing, are growing robustly at a 10.5% CAGR, but efforts to diversify the export portfolio are lacking.
- While initiatives like Bharat Trade Net (BTN) and export credit support for MSMEs are positive, they lack the scale necessary to effectively address India’s ongoing trade deficits.
- The depreciation of the rupee and declining foreign exchange reserves highlight the need for a more ambitious export strategy.
- A fiscal push toward value-added sectors such as pharmaceuticals, electronics, renewable energy, and high-value agricultural products could enhance India’s position in global supply chains and improve export competitiveness.
What are the questions raised on other transformative and sustainable pushes?
- Lithium-Ion Battery Recycling: Ace Green Recycling plans to establish India’s largest lithium iron phosphate (LFP) battery recycling facility in Gujarat, with a capacity of 10,000 metric tons per year by 2026.
- Incentives for Clean Tech Manufacturing: The Budget introduces tax benefits and policy extensions aimed at supporting electric vehicle (EV) startups and clean tech manufacturing. This includes exemptions on cobalt powder and lithium-ion battery scrap from basic Customs Duty, which is expected to strengthen India’s battery recycling ecosystem.
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- Despite these initiatives, the transition to a low-carbon economy remains fragmented due to insufficient investment in essential areas like grid modernization and energy storage.
- To achieve a successful transition to a low-carbon economy, India needs a more integrated approach that includes substantial investments in energy infrastructure alongside the current recycling initiatives.
- For example, enhancing energy storage capabilities is crucial for managing the intermittent nature of renewable energy sources like solar and wind power.
Way Forward:
- While the Budget lays a promising foundation for economic progress, it requires a comprehensive approach that not only focuses on immediate tax relief but also addresses long-term challenges in productivity, innovation, and market access.
- The success of these initiatives will be measured by their ability to create lasting benefits for all segments of society, driving India toward its vision of a prosperous and inclusive economy.
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Note4Students
From UPSC perspective, the following things are important :
Mains level: Uniform Civil Code;
Why in the News?
Recently, the Uttarakhand government introduced new rules under the Uniform Civil Code to regulate live-in relationships. These rules require couples to complete a 16-page form and, if they wish to marry, obtain a certificate from a religious leader confirming their eligibility.
What has Uttarakhand’s Uniform Civil Code mandated with respect to the registration of live-in relationships?
- Mandatory Registration: Couples in live-in relationships must register their relationship with the government within 30 days of entering into it. This requirement applies to all residents of Uttarakhand, including those living outside the state.
- Documentation Required: Couples must complete a 16-page registration form and provide various documents, which include: Proof of age, Proof of residency, Details of any previous relationships (marital or live-in) and a certificate from a religious leader confirming eligibility to marry if they choose to do so.
Should the parents of the individuals be notified by the registrar?
- Yes, under Uttarakhand’s Uniform Civil Code (UCC), the registrar is required to notify the parents of individuals in live-in relationships if either partner is under 21 years of age.
- This notification is part of the registration process aimed at ensuring parental awareness and consent for younger individuals entering such relationships. For those above 21, their information will be kept confidential, and parents will not be notified.
Are there penalties for concealing the relationship?
- Failure to Register: Couples who do not register their live-in relationship within the specified time frame may face penalties, including:
- A jail term of up to three months or a fine up to ₹10,000 for failing to register within 30 days.
- If a notice is issued by the registrar and the individual fails to comply, they could face a jail term of up to six months or a fine up to ₹25,000.
- False Information: Providing false information during registration can also lead to penalties, including imprisonment and fines.
What about privacy?
- Intrusive Registration Process: The UCC requires couples to provide extensive personal information during the registration of their live-in relationships, which many individuals find intrusive. Critics argue that this process compromises their privacy by mandating the disclosure of sensitive details about their relationships, including previous partnerships and eligibility for marriage.
- Parental Notification: The requirement to notify parents if either partner is under 21 years old adds another layer of intrusion into personal lives. This provision can lead to unwanted scrutiny from family members, particularly for couples seeking to maintain privacy from their families.
- Potential for Misuse: The UCC allows third parties to raise complaints about live-in relationships, which could lead to moral policing and harassment. This aspect raises fears of social scrutiny and the possibility of individuals facing backlash or pressure from their communities or families based on their relationship status.
- Data Security Risks: Concerns have been voiced about the security of the data collected through the UCC’s online registration portal, especially in light of recent cyberattacks that have impacted Uttarakhand’s IT infrastructure. Residents question how their personal information will be protected and what measures are in place to prevent unauthorized access or breaches.
Way forward:
- Safeguard Privacy & Data Protection – The government should implement stringent data security measures and ensure that personal details remain confidential, limiting access only to authorized personnel. The provision of parental notification for those under 21 should be reconsidered to balance individual rights with social concerns.
- Simplify Registration & Reduce Intrusiveness – The registration process should be streamlined with minimal documentation requirements, avoiding unnecessary personal disclosures. Instead of a blanket mandate, an opt-in registration system or voluntary declaration could be considered to respect personal choices.
Mains PYQ:
Q Discuss the possible factors that inhibit India from enacting for its citizen a uniform civil code as provided for in the Directive Principles of State Policy. (UPSC IAS/2017)
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Note4Students
From UPSC perspective, the following things are important :
Mains level: Citizenship; Indian and US Constitution;
Why in the News?
Recently, U.S. President Donald Trump issued an order stating that, in the future, only children whose parents are U.S. citizens or green card holders will be eligible for U.S. citizenship.
What are the two different principles which govern citizenship laws in various countries?
- Jus Soli (Right of Soil): This principle grants citizenship based on the place of birth. A child born within the territory of a country automatically acquires citizenship, regardless of the nationality of their parents.
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- Countries such as the United States, Canada, and many Latin American nations follow this principle, allowing for what is often referred to as birthright citizenship.
- Jus Sanguinis (Right of Blood): Under this principle, citizenship is determined by the nationality or citizenship of one or both parents. A child inherits citizenship from their parents, irrespective of where they are born.
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- Many countries in Europe, Africa, and Asia, including Germany, India, and Egypt, adopt this principle, meaning that a child’s citizenship is based on their parents’ nationality rather than their birthplace.
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What was the system in the U.S.?
- Historically, the United States has operated under the jus soli principle, as established by the 14th Amendment to the Constitution in 1868. This amendment states that “all persons born or naturalized in the United States, and subject to the jurisdiction thereof, are citizens of the United States”. The U.S. Supreme Court reaffirmed this interpretation in 1898, confirming that all children born on U.S. soil are entitled to citizenship regardless of their parents’ immigration status.
- However, President Trump’s recent executive order seeks to alter this long-standing practice by restricting citizenship to children born in the U.S. only if at least one parent is a U.S. citizen or lawful permanent resident (green card holder).
- This order has faced legal challenges, with critics arguing it contradicts constitutional protections established over a century ago.
How are India’s citizenship laws different?
| Aspect |
U.S. Citizenship |
Indian Citizenship |
| Principle |
Jus Soli (by birth) |
Jus Sanguinis (by descent) since 1987 |
| Law |
14th Amendment (1868) |
Citizenship Act, 1955 (Amended in 1987, 2004, and 2019) |
| Recent Changes |
Attempt to limit birthright citizenship (stayed by court) |
Citizenship Amendment Act (CAA), 2019 grants selective citizenship |
| Religious Criteria |
No religious discrimination |
CAA 2019 excludes Muslims from fast-track citizenship |
What would be the impact on India?
- The executive order creates uncertainty for many families within the Indian-American community, especially those on temporary visas such as H-1B. Children born in the U.S. to these parents have traditionally been granted citizenship automatically.
- This change could potentially affect thousands of Indian families who may now face challenges regarding their children’s citizenship status if they are born in the U.S.
What are the challenges for the executive order of the president?
- Legal Challenges: A coalition of four states—Washington, Arizona, Illinois, and Oregon—has filed a lawsuit seeking to temporarily suspend the executive order while the court examines its legality.
- This request is part of a broader legal challenge involving 18 Democratic-led states and various civil rights organizations, including the ACLU, which argue that the order violates the 14th Amendment of the U.S. Constitution that guarantees citizenship to anyone born on U.S. soil.
- Judicial Response: A federal judge in Seattle has already issued a temporary restraining order against Trump’s executive order, labelling it “blatantly unconstitutional.”
Way forward:
- Judicial Review & Constitutional Adherence: The U.S. judiciary should ensure that any changes to citizenship laws align with the 14th Amendment and established Supreme Court precedents, preventing unconstitutional restrictions on birthright citizenship.
- Policy Reforms & Legislative Clarity: Instead of executive orders, any significant change to citizenship laws should go through Congress with bipartisan consultation, ensuring legal stability and safeguarding the rights of affected families.
PYQ:
[2021] With reference to India, consider the following statements :
- There is only one citizenship and one domicile.
- A citizen by birth only can become the Head of State.
- A foreigner once granted the citizenship cannot be deprived of it under any circumstances.
Which of the statements given above is/are correct?
(a) 1 only
(b) 2 only
(c) 1 and 3 only
(d) 2 and 3 only
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Note4Students
From UPSC perspective, the following things are important :
Mains level: Indian Agriculture;
Why in the News?
A budget reflects how a government addresses the challenges in the economy. The Economic Survey 2024-25 tried to present a positive view of Indian agriculture’s situation.
What are the specific budget allocations for agriculture?
- Total Allocation: The Union Budget for 2025-26 has allocated ₹1.71 lakh crore for agriculture and allied activities, an increase from ₹1.51 lakh crore in the previous fiscal year.
- Prime Minister Dhan-Dhaanya Krishi Yojana: This new initiative aims to enhance agricultural productivity in 100 districts with low productivity, targeting 1.7 crore farmers through sustainable practices and improved irrigation facilities.
- Kisan Credit Card (KCC) Expansion: The loan limit under the Modified Interest Subvention Scheme for KCCs will be raised from ₹3 lakh to ₹5 lakh, facilitating better access to credit for farmers.
- PM-Kisan Scheme: The allocation for the PM-Kisan scheme remains at ₹63,500 crore, consistent with the revised estimates from the previous year, aimed at providing direct income support to farmers.
- The PM-Kisan scheme provides annual income support of ₹6,000 to eligible farmers, distributed in three instalments, which is crucial for enhancing their financial stability.
- Pradhan Mantri Fasal Bima Yojana: This crop insurance scheme has seen a significant reduction in funding, with allocations decreasing from ₹14,600 crore in previous estimates to ₹12,242.27 crore for 2025-26.
- Makhana Board: A new Makhana Board in Bihar has been allocated ₹100 crore, while other missions include ₹100 crore for hybrid seeds and ₹500 crore for cotton technology.
- National Mission on Natural Farming: The mission received a significant allocation of ₹516 crore, emphasizing sustainable agricultural practices and increasing the adoption of natural farming methods.
- Support for Pulses and Oilseeds: The government is launching a six-year mission focused on self-sufficiency in pulses and edible oils, with procurement support from agencies like NAFED and NCCF, aiming to enhance domestic production.
What measures are being proposed to support farmers and enhance agricultural productivity?
- Prime Minister Dhan-Dhaanya Krishi Yojana: This new scheme aims to target 100 districts with low productivity, focusing on improving crop intensity and credit parameters. However, concerns exist regarding its centralized governance approach.
- Investment in Sustainable Practices: The government emphasizes sustainable agriculture practices through initiatives like the Pradhan Mantri Krishi Sinchayi Yojana (PMKSY) aimed at enhancing irrigation efficiency.
- Post-Harvest Infrastructure Investment: The Agriculture Infrastructure Fund (AIF) is highlighted as a mechanism to improve post-harvest infrastructure, although specific allocations remain unclear.
Does the budget reflect the broader economic context and challenges?
- Addressing Farmer Distress: The budget reflects the urgent need to address farmer distress by extending support measures such as lower loan interest rates and increased PM-KISAN assistance.
- Investment in Sustainable Practices: The budget emphasizes the importance of sustainable agriculture, with recommendations for increased investment in climate-resilient seeds and agricultural research.
- Post-Harvest Management Improvements: Recognizing significant post-harvest losses, the budget allocates funds to improve cold storage and processing facilities. This investment is crucial for reducing waste and enhancing the value chain, which is vital for improving farmers’ profitability and food security.
- Focus on Technological Adoption: There is a push for greater adoption of agri-tech solutions to tackle issues like low mechanization and inadequate access to quality seeds. This reflects an understanding that modernizing agriculture is essential for boosting productivity and competitiveness in a challenging economic environment.
- Long-Term Structural Reforms: The budget indicates a need for transformational changes rather than incremental adjustments, advocating for a shift from subsidy-heavy approaches to investment-driven growth.
- This strategic direction aims to make Indian agriculture more resilient and globally competitive by 2047.
Way forward:
- Increased Investment in Agricultural R&D and Infrastructure – The government should prioritize higher allocations for agricultural research, modern irrigation techniques, and post-harvest infrastructure to enhance productivity and climate resilience.
- Targeted Financial Support and Market Reforms – Strengthening direct income support, improving crop insurance schemes, and ensuring better price realization through MSP reforms and enhanced market linkages will help stabilize farmers’ incomes and boost rural demand.
Mains PYQ:
Q Explain various types of revolutions, took place in Agriculture after Independence in India. How these revolutions have helped in poverty alleviation and food security in India? (UPSC IAS/2017)
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Inland Mangrove of Guneri
Why in the News?
The Gujarat government has declared the Guneri Inland Mangrove in Kutch as the state’s first Biodiversity Heritage Site (BHS) under The Biological Diversity Act, 2002.
Quick Facts about Mangroves in India:
- “Red List of Mangrove Ecosystems” report released on May 22 (International Day for Biodiversity), 2024.
- India holds 3% of South Asia’s total mangrove cover.
- Mangrove cover increased by 54 sq km (1.10%), reaching 4,975 sq km (0.15% of India’s total area).
- West Bengal leads (42.45%), followed by Gujarat (23.66%) and Andaman & Nicobar Islands (12.39%).
- South 24 Parganas, West Bengal, alone contributes 41.85% of India’s mangrove cover, including Sundarbans National Park.
- Gujarat recorded the highest increase, adding 37 sq km of mangrove cover.
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About Guneri Inland Mangroves:
- Guneri Inland Mangroves (32.78 hectares) are a rare and unique mangrove ecosystem located in Kutch district, Gujarat.
- It is India’s last remaining inland mangrove site and one of only eight such sites globally.
- Unlike coastal mangroves, which thrive in tidal zones, Guneri mangroves exist inland without direct seawater contact.
- These mangroves have historical and ecological significance, possibly originating after the Miocene marine transgression or forming along the banks of the ancient Saraswati River in the Great Rann of Kutch.
Geographical Features:
- It is located about 45 km from the Arabian Sea and 4 km from Kori Creek.
- Terrain:
- Flat land, unlike coastal mangroves that grow in muddy, tidal zones.
- Devoid of sludge, making it resemble a forest rather than a typical mangrove swamp.
- Water Source:
- Thrives on limestone deposits, which help retain groundwater to sustain the mangroves.
- No direct tidal water influx, relying entirely on underground water connectivity.
- Biodiversity:
- Home to 20 migratory bird species and 25 resident migratory avifaunal species.
- Functions as a vital habitat for local and seasonal wildlife.
PYQ:
[2015] Which one of the following regions of India has a combination of mangrove forest, evergreen forest and deciduous forest?
(a) North Coastal Andhra Pradesh
(b) South-West Bengal
(c) Southern Saurashtra
(d) Andaman and Nicobar Islands |
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: National Manufacturing Mission (NMM)
Why in the News?
The Union Finance Minister, while presenting the Union Budget 2025-26, announced the launch of the National Manufacturing Mission (NMM) to boost India’s manufacturing sector under the Make in India initiative.
What is the National Manufacturing Mission?
- The NMM was announced in Union Budget 2025-26 to boost India’s manufacturing sector under the Make in India initiative.
- It covers small, medium, and large industries and aims to strengthen domestic production capabilities, enhance competitiveness, and create jobs.
- The mission provides policy support, execution roadmaps, and governance frameworks for both central ministries and state governments.
- It promotes Clean Tech manufacturing and focuses on developing an ecosystem for critical industrial components such as solar PV cells, EV batteries, wind turbines, and high-voltage transmission equipment.
- Aims and Objectives:
- Boost domestic production to reduce import dependence.
- Enhance MSME sector growth with credit expansion (₹10 crore from ₹5 crore).
Key Features & Significance:
- Infrastructure & Industrial Clusters to strengthen supply chains.
- National Action Plan for Toys to make India a global toy hub.
- New footwear & leather industry scheme to create 22 lakh jobs and boost exports.
- National Institute of Food Technology in Bihar to increase farmer incomes through food processing.
Back2Basics: National Manufacturing Policy (NMP)
- Launched in 2011 to boost India’s manufacturing sector.
- Aims to increase GDP share to 25% and create 100 million jobs in a decade.
- Focuses on National Investment and Manufacturing Zones (NIMZs) to attract investment and enhance productivity.
- Promotes technology advancement, skill development, and sustainable growth with fiscal & infrastructure incentives.
- Key areas: Ease of doing business, labor law reforms, export growth, and global competitiveness.
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PYQ:
[2012] What is/are the recent policy initiative(s) of Government of India to promote the growth of manufacturing sector?
1. Setting up of National Investment and Manufacturing Zones
2. Providing the benefit of ‘single window clearance’
3. Establishing the Technology Acquisition and Development Fund
Select the correct answer using the codes given below:
(a) 1 only
(b) 2 and 3 only
(c) 1 and 3 only
(d) 1, 2 and 3 |
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Bharatiya Bhasha Pustak Scheme
Why in the News?
In the Union Budget 2025-26, Finance Minister, has introduced the Bharatiya Bhasha Pustak Scheme to provide digital textbooks in Indian languages.
What is Bharatiya Bhasha Pustak Scheme?
- Aims and Objectives:
- It will provide digital textbooks and study resources for students at the school and university levels, promoting regional languages in the education system.
- The scheme aims to bridge the language gap by providing digital textbooks and study materials in multiple Indian languages.
- It ensures that students from diverse linguistic backgrounds can study subjects in their mother tongue, improving comprehension and retention.
- It aligns with the NEP 2020 vision to promote multilingualism in education.
- It complements the ASMITA (Augmenting Study Materials in Indian Languages through Translation and Academic Writing) initiative.
- 22,000 books in Indian languages will be developed in the next five years under ASMITA.
Criteria and Provisions:
- The scheme will be implemented in schools, colleges, and universities across India.
- Institutions affiliated with UGC, AICTE, and other regulatory bodies will be part of the initiative.
- The scheme will focus on STEM (Science, Technology, Engineering, and Mathematics), Social Sciences, Commerce, and Humanities.
- Special emphasis on technical education in Indian languages.
- The digital books will be available on government-supported e-learning platforms like DIKSHA, e-PG Pathshala, and National Digital Library of India.
- AI-based tools will be used to facilitate translations, voice-assisted learning, and personalized study materials.
PYQ:
[2016] ‘SWAYAM’, an initiative of the Government of India, aims at:
(a) Promoting the Self Help Groups in rural areas
(b) Providing financial and technical assistance to young start-up entrepreneurs
(c) Promoting the education and health of adolescent girls
(d) Providing affordable and quality education to the citizens for free |
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Geo-Economic Fragmentation
Why in the News?
The Economic Survey 2024-25 highlights the shift from globalization to geo-economic fragmentation (GEF). Countries are now forming economic blocs, with concepts like “friend-shoring” gaining prominence.
What is Geo-Economic Fragmentation (GEF)?
- GEF refers to the breakdown of global economic integration, caused by strategic national policies.
- It involves disruptions in trade, capital flows, foreign direct investment (FDI), and migration.
- The shift resembles the Cold War era, with countries aligning into economic blocs.
- Western nations’ imposition of uniform environmental, labor, and social standards has fueled economic divisions.
- The World Trade Organization (WTO) Trade Monitoring Report (October 2024) recorded:
- 169 new trade-restrictive measures, affecting $887.7 billion worth of trade.
- A sharp rise from $337.1 billion in 2023, reflecting escalating protectionism.
- The IMF notes that trade fragmentation today is costlier than during the Cold War, when global trade was just 16% of GDP.
- Today, it is 45%, making economic isolation riskier.
Significance and Impacts of GEF:
- Decline of Global Trade: WTO reported 169 new trade restrictions covering $887.7 billion in 2023-24, making trade costlier.
- FDI Relocation: Friend-shoring is concentrating FDI among geopolitically aligned nations, reducing capital for emerging economies.
- China’s Economic Dominance: Controls 80% of solar panels, 80% of batteries, and 60% of wind energy, reshaping supply chains.
- Supply Chain Disruptions: Firms are shifting from China to India, Vietnam, and Mexico to diversify risks.
- Emerging Market Challenges: Increased trade barriers, inflation, and tech restrictions slow down growth.
- Rise in Economic Nationalism: Nations are prioritizing domestic industries, energy security, and localized production over global collaboration.
PYQ:
[2022] Elucidate the relationship between globalization and new technology in a world of scarce resources, with special reference to India.
[2017] Which of the following has/have occurred in India after its liberalization of economic policies in 1991?
1. Share of agriculture in GDP increased enormously.
2. Share of India’s exports in world trade increased.
3. FDI inflows increased.
4. India’s foreign exchange reserves increased enormously.
Select the correct answer using the codes given below:
(a) 1 and 4 only
(b) 2, 3 and 4 only
(c) 2 and 3 only
(d) 1, 2, 3 and 4 |
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