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July 5, 2025 Current Affairs
Mains Analysis
Impact of US Remittance Tax on India: Minimal Volume Decline but Increased Costs Overview of the New US Remittance Tax The United States has introduced a 1% tax on specific outbound remittances as part of the One Big Beautiful Bill Act (OBBBA), effective from January 1, 2026. This move has raised concerns in countries like India that are heavily reliant on remittance income from their diaspora. While the tax is not expected to significantly reduce the volume of money sent to India, it could increase the cost of these transfers. Details and Exemptions Initially proposed at 5%, the tax rate was lowered to 1% after bipartisan discussions. Several key exemptions soften its scope:
These provisions are expected to shield a large segment of Indian-origin senders who primarily use digital and formal banking channels. Potential Impact on India’s Remittance Landscape According to estimates from the Center for Global Development, India might see a decline of just under $500 million in formal remittance inflows, with only Mexico expected to experience a larger loss. Despite this, the figure is small compared to the $124.31 billion India received in remittances in FY2024-25. However, the tax highlights growing regulatory hurdles to cross-border fund flows. In 2023-24, remittances from the US made up nearly 27.7% of India’s total inflows—about $32 billion. Even though cash-based transfers form a minor share, any disruption could affect rural households that depend on these funds. Timing and Distribution Effects Experts suggest that the immediate effects will be concentrated in the first three quarters of FY2025-26, as senders may expedite their transfers to avoid the tax. Nonetheless, the 1% rate is relatively modest, meaning that the long-term impact will likely manifest more in increased transaction fees rather than a drop in remittance volume. Trends in India’s Remittance Inflows India’s remittances have been on an upward trajectory:
These inflows were crucial in FY2024-25, offsetting the entire trade deficit of $98.39 billion and leaving a $26 billion surplus, underlining their macroeconomic relevance. Rising Costs of Sending Money Even prior to this tax, cross-border remittances to India incurred notable transaction fees. According to World Bank data, the average cost to send $200 to India in Q4 2024 was 5.3%, below the global average of 6.6%. The new tax could elevate these costs, particularly for non-bank or multi-intermediary channels. Additional charges and delays due to correspondent banking networks remain a concern, emphasizing the need for innovation in remittance systems. India’s Efforts to Improve Cross-Border Payment Systems India has taken proactive steps to make international money transfers more efficient:
These initiatives are expected to cushion the impact of external policy changes and make formal remittance channels more accessible for Indians abroad. |
India’s Strategic Drive to Boost Pulses Cultivation Amid Rising Imports In light of increasing domestic demand and a sharp surge in pulse imports, the Department of Consumer Affairs—part of the Ministry of Consumer Affairs, Food and Public Distribution—has launched a focused initiative to promote pulses cultivation, particularly arhar (tur) and urad, during the Kharif 2025 season. This effort forms a core part of the government''s broader strategy to enhance food security and curb reliance on imports. Key Measures and Government-Led Initiatives 1. Expansion of Pulses Cultivation Programme
2. Financial Backing and Assured Procurement
India’s Pulses Sector: Trends and Challenges Nutritional Significance and Production Profile
Trade Snapshot (in lakh tonnes):
This doubling of imports in 2023–24 underscores growing dependency risks.
Policy Framework Supporting Pulses Cultivation 1. PM-AASHA (Pradhan Mantri Annadata Aay Sanrakshan Abhiyan)
2. National Food Security Mission (NFSM)
3. Crop Diversification Programme (CDP)
4. Rashtriya Krishi Vikas Yojana (RKVY)
This coordinated effort underscores the government’s resolve to make India self-reliant in pulse production while protecting rural livelihoods and stabilizing market prices. The strategic blend of financial support, infrastructure investment, and policy backing is set to shape a more resilient pulses ecosystem in the years ahead. |
India Urged to Ease Emission Norms for Small Cars in Line with Global Standards A new study by Nomura researchers has recommended that India revise its Corporate Average Fuel Efficiency (CAFE) norms to better reflect global standards. The proposed reforms aim to introduce protection measures for small cars, which currently face disproportionately strict emissions targets despite being more fuel-efficient. Understanding India’s CAFE Norms What Are CAFE Norms? Introduced by the Bureau of Energy Efficiency (BEE) in 2017, India’s CAFE regulations set fleet-wide average fuel efficiency targets for all passenger vehicles weighing under 3,500 kg, including those powered by petrol, diesel, LPG, CNG, electric, and hybrid systems. Timeline:
Objectives:
2022–23 Compliance Targets:
Disproportionate Burden on Small Cars System Bias Against Small Vehicles Under the current linear weight-based model, heavier vehicles are allowed to emit more CO₂. This means:
This penalises smaller, more efficient cars while letting larger, more polluting models off the hook. Impact on Small Car Segment
What the Study Recommends Nomura researchers urge India to move away from a purely linear approach and adopt small car protection mechanisms, as seen in other major auto markets. These reforms could help preserve India''s affordable car segment while advancing decarbonisation goals. Global Best Practices: Protecting Small Cars United States
China
South Korea
Japan
European Union
Conclusion India’s current CAFE framework may inadvertently discourage the production of fuel-efficient small cars—a vital segment for both affordability and environmental impact. By adopting a more nuanced, globally-aligned approach, India can strike a better balance between sustainability, innovation, and consumer accessibility in its automotive policy. |
Delhi’s Ban on Fuel for Old Vehicles: Legal Framework, Challenges & Pollution Impact Amid growing public criticism, the Delhi Government has clarified that old vehicles will not be impounded solely for being denied fuel. Instead, a new framework for managing End-of-Life Vehicles (ELVs) is in the works. The ongoing measures stem from judicial orders and directives by the Commission for Air Quality Management (CAQM), aimed at curbing Delhi’s severe air pollution problem. Fuel Ban for Old Vehicles in Delhi Beginning July 1, 2025, fuel stations in Delhi have stopped dispensing fuel to:
This is the first phase of a broader CAQM directive that will extend to:
Tech-Based Enforcement Using ANPR Cameras To enforce the ban, Automatic Number Plate Recognition (ANPR) cameras have been installed at:
These cameras:
Operational Challenges and Government Concerns The Delhi Environment Minister has flagged serious concerns:
These issues have allowed banned vehicles to refuel in nearby areas, undermining the policy and causing public inconvenience. Why the Focus on Old Vehicles? Experts say older, pre-BS-VI vehicles contribute disproportionately to Delhi’s air pollution:
Legal and Regulatory Foundation The fuel ban is supported by multiple legal mandates:
Can This Solve Delhi’s Pollution Crisis? While the policy is legally sound and environmentally motivated, experts caution against over-reliance on a single solution:
The Need for a Holistic Strategy CSE and other experts recommend a multi-pronged approach, including:
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Draft Model Code of Conduct for College Teachers: Overview and Implications Context The Tamil Nadu Higher Education Department has released a draft Model Code of Conduct for college faculty, aiming to regulate professional ethics, especially in areas such as social media engagement, political neutrality, and classroom conduct. The initiative reflects a broader commitment to fostering ethical, inclusive, and accountable academic environments. Understanding a Code of Conduct A Code of Conduct is a set of actionable standards designed to regulate professional and ethical behavior within institutions. Unlike a Code of Ethics, which is rooted in moral values and philosophical ideals (e.g., virtue ethics, deontology), a Code of Conduct is more prescriptive, outlining specific behaviours and consequences for violations. Types of Code of Conduct
Key Features of the Draft Code
Implementation Strategies
Challenges and Limitations
Conclusion A thoughtfully constructed Code of Conduct is essential for cultivating ethical, inclusive, and professionally accountable academic spaces. However, its success relies on clarity, stakeholder participation, institutional backing, and respect for academic freedom. When implemented effectively, it not only protects institutional values but also strengthens the integrity of the higher education system. |
PM-POSHAN Scheme Context Over a century after the first school meal initiative in the Madras Presidency, the PM-POSHAN scheme continues to address child hunger and promote education in India. However, despite its longstanding importance, a new report points to ongoing ground-level issues such as delays in fund disbursal, caste-based discrimination, and rising implementation costs. About the Scheme
Key Features
Successes of PM-POSHAN in India
Key Challenges in Implementation
Way Forward
Conclusion The PM-POSHAN scheme remains an integral part of India’s strategy to tackle childhood hunger, improve educational participation, and ensure nutritional equity. While its goals and design are commendable, its full impact can only be realised through timely funding, local customisation, robust monitoring, and social inclusion measures. |
Status of Youth in Agrifood Systems Report – FAO Context The Food and Agriculture Organization (FAO) has released the “Status of Youth in Agrifood Systems” report, emphasizing that empowering youth in agriculture can significantly contribute to economic growth, address youth unemployment, and enhance global food security. The report estimates that improved youth engagement could add up to 1.4% to global GDP, equivalent to approximately $1.5 trillion, nearly half of which would stem from the agrifood sector. Key Findings 1. Declining Youth Employment in Agrifood Systems
2. Sharp Rise in NEET Youth
3. Significant Economic Potential
4. Rural-Urban Divide Widening
5. Climate Vulnerability
6. Growing Food Insecurity
FAO’s Key Recommendations 1. Inquire More
2. Include More
3. Invest More
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Prelims Bytes
Alaknanda River Current Context Due to intense rainfall in Rudraprayag, Uttarakhand, the Alaknanda River’s water level has surged, leading to flood-like conditions in the region. Geographical Profile
Origin and Course
Major Tributaries and Panch Prayag The Alaknanda is joined by several tributaries, five of which are considered sacred. These five confluences (Panch Prayag) are revered and serve as key pilgrimage sites:
Religious and Cultural Significance
Hydropower Projects in the Basin The river basin supports several hydroelectric power projects, including:
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Bukkapatna Chinkara Wildlife Sanctuary Recent Development
Location
Conservation Focus
Habitat and Vegetation
Fauna
Flora Prominent tree species in the sanctuary include:
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Mount Shinmoedake Recent Event
Location & Background
What is a Stratovolcano?
Characteristics
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Chenab River and Sawalkot Hydroelectric Project (HEP) The Forest Advisory Committee has granted ‘in-principle’ approval for the diversion of forest land required for the construction of the Sawalkot Hydroelectric Project on the Chenab River. This project is one among six strategic hydropower developments planned to maximize India’s utilization of Indus water resources. About Chenab River: |
Girmitiyas Recent Context
Who Were the Girmitiyas?
Etymology
Conditions of Indentureship
Blackbirding Practices
Legacy and Impact
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Sarcoma Overview
Prevalence
Types of Sarcoma Sarcomas are broadly classified into:
There are over 70 known subtypes, making diagnosis and treatment complex. Risk Factors
Awareness
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Ham Radio Overview
Technology & Operation
Licensing in India
Why Ham Radio Matters
Notable Emergency Uses in India
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Asteroid Terrestrial-impact Last Alert System (ATLAS) Recent Update
About ATLAS
System Configuration
Primary Objectives
Other Applications While asteroid detection is its core mission, ATLAS also contributes to:
Design Focus
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Supernova Scientists have recently obtained photographic proof of a rare supernova event involving a unique type of star called a white dwarf, featuring a phenomenon known as double detonation. This observation was made using the Very Large Telescope, located at the European Southern Observatory in Chile. About Supernova: |
BHARAT Initiative Overview
Objectives
Key Components
Bharat Baseline
Types of Biomarkers Involved
What Are Biomarkers?
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India’s First Equine Disease-Free Compartment (EDFC) Context
Purpose
Established Under
Key Features
Functions and Significance
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Variable Rate Reverse Repo (VRRR) Context
What is VRRR?
Announced By
Objectives
How VRRR Works
Key Features
Implications of VRRR 1. Money Market
2. Bond Market
3. Banking Sector
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PNGRB Approves Second Amendment to Natural Gas Pipeline Tariff Regulations, 2025 Objective:
Key Reforms:
Role of PNGRB (Petroleum and Natural Gas Regulatory Board) Formation:
Key Functions:
Appeals:
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Alluri Sitarama Raju Context
Who Was He?
Early Life and Influences
Major Contribution: The Rampa Rebellion (1922–1924)
Martyrdom
Legacy
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Chautal Context
What is Chautal?
Key Characteristics
Instruments
Cultural and Musical Significance
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Argentina Context The Prime Minister of India is on an official visit to Buenos Aires, aiming to strengthen bilateral cooperation in defence, energy, agriculture, and trade. Geographical Overview
Physical Geography
Key Landforms:
India–Argentina Relations Diplomatic Relations
Trade & Economic Cooperation
Strategic Sectors
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India–Africa Relations: A Strategic Partnership Recent Development:
Key Dimensions of India-Africa Engagement:
Challenges in India-Africa Relations
Conclusion
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Special Intensive Revision (SIR) The Election Commission of India is set to begin a Special Intensive Revision (SIR) of the electoral rolls in Bihar. This process is backed by Article 324 of the Indian Constitution and Section 21 of the Representation of the People Act, 1950. About SIR: |
UMEED Portal The Union Ministry of Minority Affairs has launched the UMEED Central Portal as part of the Unified Waqf Management, Empowerment, Efficiency, and Development (UMEED) Rules, 2025. Purpose of UMEED Portal: Key Features:
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Unified Pension Scheme (UPS) The Finance Ministry has announced that all tax benefits available under the National Pension System (NPS) will be extended to the Unified Pension Scheme (UPS). About UPS: Important Features:
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