UPSC Key: FII bond tax exemption, Nilgiri Tahr, and BS-VI transition in NCR

Preliminary Examination: Current events of national and international importance

Mains Examination: General Studies-II, III: Government policies and interventions for development in various sectors and issues arising out of their design and implementation; Indian Economy and issues relating to planning, mobilisation of resources, growth, development and employment.

What’s the ongoing story: Amid pressure to attract foreign funds and also stabilise the rupee, the Centre on Friday scrapped the capital gains tax, both long-term and short-term, on investment by Foreign Institutional Investors (FIIs) in government bonds as well as the withholding tax they must pay on their interest income from these debt instruments.

Key Points to Ponder:

— What are capital gains tax and withholding tax?

— What are government bonds?

— What are FIIs? Why does the government need FIIs?

— What has been the recent trend around foreign investment in India?

— What is the Balance of payment (BoP) deficit? What does high BoP tell about that economy?

— How BoP impacts the rupee value?

— What are double taxation avoidance agreements?

— What is GDP (gross domestic product)?

— How does the current geopolitical situation affect GDP growth?

— What is the role of RBI’s Monetary Policy Committee (MPC)?

— What is the flexible inflation-targeting framework of MPC?

Key Takeaways:

— At present, FIIs pay 12.5% tax on long-term capital gains, 30% on short-term capital gains, and around 20% withholding tax on interest income.

— The decision, taken after at least two months of internal discussions, is expected to bring tens of billions of dollars in foreign fund into government debt over the coming years, and bridge to some extent the looming balance of payments (BoP) deficit that economists estimate could even touch $60 billion in 2026-27.

— FII investment in government bonds stands at Rs 3.75 lakh crore, or just 3.34% of the available amount of Rs 112.42 lakh crore, under the so-called General Route and Fully Accessible Route (FAR). These are the two ways in which foreign investors invest in Indian government securities.

— A BoP deficit exerts pressure on the rupee to weaken. While the rupee has gained some ground since nearly breaching the 97-per-dollar mark last month, it is down 5% since the war began on February 27 and has slumped 10.3% in the last one year.

— As such, the removal of the two taxes on Indian government bonds could boost inflows at a time when Foreign Portfolio Investors (FPIs) have pulled out $28 billion from Indian stock markets so far in 2026.

Bond Yield vs Bond Price: The Inverse Relationship Explained

What is a Bond? Price vs Yield Interest Rates Link Yield Curves

THE BASICS

A bond is a loan you give to the government

Government Securities (G-Secs) are tradable instruments issued by the Central or State Governments to borrow from the public. The government pays you annual interest (coupon) and returns your principal at maturity. G-Secs carry practically no default risk — they are called risk-free gilt-edged instruments.

◆

Face Value

The original price of the bond — typically ₹100. The government repays this exact amount at the end of the bond's tenure.

₹

Coupon Payment

Fixed annual interest paid by the government. Example: ₹5 per year on a ₹100 bond = 5% coupon rate. This amount never changes regardless of market conditions.

%

Yield (Effective Return)

Yield = Coupon ÷ Market Price. Unlike the coupon, yield is not fixed — it changes as the bond's market price changes in response to demand.

THE INVERSE RULE

As bond price rises, yield falls — and vice versa

A 10-year G-Sec with face value ₹100 pays a fixed coupon of ₹5. If two buyers compete for this bond, the market price gets bid up. The coupon stays fixed at ₹5 — but as the price rises, the effective yield falls. At ₹125, the ₹5 coupon delivers exactly 4% yield.

₹100

Face value price → Yield = 5%

₹110

Demand pushes price up → Yield = 4.5%

₹125

Equilibrium price → Yield = 4%

THE MECHANISM

Bond yields track the prevailing interest rate in the economy

If the economy's prevailing rate is 4% and a new G-Sec offers 5% yield, investors rush to buy it. Demand pushes the price up and yield down — until yield converges with the 4% market rate at a bond price of ₹125.

①

G-Sec yield exceeds market rate

Investors spot a better return than what the economy offers. Demand for the bond surges.

②

Rising demand pushes price up

Competitive bidding raises the bond's market price above its face value of ₹100.

③

Fixed coupon, falling yield

The ₹5 coupon stays unchanged. As market price rises, the effective yield (₹5 ÷ price) falls towards the market rate.

④

Equilibrium restored

Price settles at ₹125 — where yield equals the 4% prevailing rate. Excess demand stops.

"If market interest rate levels rise, the price of a bond falls. Conversely, if interest rates or market yields decline, the price of the bond rises."

— Reserve Bank of India

THE YIELD CURVE

A graph that reveals what the market expects from the economy

A yield curve plots yields of government bonds of equal credit rating across different maturities. Its shape — normal, flat, or inverted — signals the market's collective view on growth, inflation, and future risk.

↗

Normal Curve (Upward Sloping)

Longer-tenure bonds offer higher yields — investors demand more reward for longer lock-ins. Signals a growing economy. A steeper slope = faster expected growth.

→

Flat Curve

Short and long-term yields are nearly equal. Signals marginal or slowing growth — investors see little difference in risk across time horizons.

↘

Inverted Curve — Recession Warning

Longer-tenure yields fall below short-tenure yields. Investors expect sharp future growth decline and lower money demand. Historically a reliable predictor of recession.

Sources: Reserve Bank of India · Indian Express Explained · UPSC Essentials, April 2026

— As India is a net importer of goods, it suffers from a large merchandise trade deficit. While the surplus from India’s services trade can cover some of the merchandise trade deficit, it is not enough, resulting in what is called a current account deficit, or CAD.

— Until recently, India has been able to attract enough money from abroad in the form of Foreign Direct Investment (FDI) and FPIs to more than make up for the current account deficit.

— This results in a positive net number, or a BoP surplus, which is the difference between the money Indians send abroad to pay for imports and make investments and the money India receives from overseas for exports and in the form of remittances and what foreigners invest in India – be it in the stock market and bonds or direct investment in the form of factories on the ground.

— However, foreign investments into India on a net basis have slowed down sharply in recent years as interest rates across the world have risen, with net FDI in 2024-25 and 2025-26 combined being under $9 billion. This has led to the BoP being in deficit to the tune of $5 billion in 2024-25 and $31 billion in the first three quarters of 2025-26

From the Front page: RBI eases norms for PSUs, banks to get foreign fund inflows

— TO ENCOURAGE foreign capital inflows, the Reserve Bank of India on Friday eased norms for state-owned enterprises to borrow overseas and for banks to mobilise foreign current deposits.

— The RBI will provide a concessional foreign exchange swap facility until September 30, 2026 to encourage external commercial borrowings (ECBs) by public sector firms. At the core, the RBI is effectively lowering the hedging and funding cost of borrowing in foreign currency by PSUs, enabling them to raise cheaper funds abroad. This move has come at a time when investment in new projects has become sluggish and growth has declined.

— A Foreign Currency Non-Resident Bank account is a fixed deposit held in India by NRIs)or Overseas Citizens of India (OCIs). Unlike typical rupee accounts, it allows you to park your overseas earnings directly in foreign currencies (like USD, GBP, EUR, or CAD) to entirely avoid currency fluctuation risks.

From the Economy page: RBI trims FY27 growth forecast to 6.6%

— The Reserve Bank of India (RBI) on Friday cut its GDP (gross domestic product) growth forecast for the current financial year to 6.6% from 6.9%, and raised the inflation projection to 5.1% from 4.6%, cautioning that elevated energy prices and global supply constraints were having “adverse spillovers” on economic activity.

— The revised macroeconomic forecasts of the RBI were announced by Malhotra while detailing the Monetary Policy Committee’s (MPC) interest rate decision. The governor said that the global environment has deteriorated since the last policy meeting with the conflict lingering amidst a fragile truce.

From the Editorial Page: Between government and RBI, getting back the investor

— Aditi Nayar writes: The Monetary Policy Committee’s second bi-monthly meeting for the year unfolded in line with our expectations, with a unanimous status quo on the policy rates and stance.

— Interestingly, unlike the usual trend of balanced risks around its projections in the past, the MPC placed upside risks to inflation and downside risks to growth for the second consecutive policy review, with the outlook being mired by unpredictable nature of the conflict, the sustained global commodity price shock and supply disruptions as well as deficient rainfall in the southwest monsoon season.

— As anticipated, the MPC acted within its flexible inflation-targeting framework mandate, and appropriately kept the repo rate unchanged, despite the weakness in the rupee. But, alongside, the RBI governor made several announcements to attract capital flows, in line with our expectations that the RBI and not the MPC would address the issues surrounding the currency.

Do You Know:

— The Balance of Payments (BoP) is essentially a ledger of a country’s transactions with the rest of the world. As Indians trade and transact with the rest of the world, money flows in and out of the country.

— The BoP shows how much money went out of the country and how much money came in. All the money coming into the country is marked positive and all the money going out is marked negative. The BoP matters because it captures the relative demand of the rupee vis-à-vis the demand for foreign currencies.

India's Balance of Payments — UPSC Explainer

What is BoP? Current Account Capital Account Key Data Now 1991 Crisis

THE BASICS

India's national ledger with the world

The Balance of Payments records every financial transaction between India and the rest of the world. Money coming in is marked positive. Money going out is marked negative. It captures the relative demand of the rupee vs foreign currencies — a critical indicator of economic health.

◆

Two main accounts

BoP has two components — the Current Account (day-to-day trade in goods and services) and the Capital Account (investment flows like FDI and FII).

↕

Exchange rate link

If Indians demand more dollars than Americans demand rupees, the dollar gets more expensive. BoP data reflects this push-pull between currencies in real time.

★

RBI's role in a surplus

When India runs a BoP surplus, the RBI absorbs excess dollars into forex reserves — preventing the rupee from over-appreciating and undermining export competitiveness.

BoP = Current Account + Capital Account

CURRENT ACCOUNT

Day-to-day trade in goods and services

The Current Account records ongoing transactions — trade in physical goods and 'invisible' services. It has two key sub-divisions: the Balance of Trade (goods) and Invisible Trade (services, transfers, income).

Current Account = Balance of Trade + Invisibles

◆

Balance of Trade — Goods

Export and import of physical goods — cars, wheat, gadgets. A trade deficit (imports > exports) raises demand for dollars and puts downward pressure on the rupee.

◆

Services — Invisibles

Trade in IT, banking, and tourism. Called 'invisible' because no physical good crosses the border. India consistently runs a surplus here, led by IT and software exports.

◆

Transfers & Income — Invisibles

Transfers include remittances sent home by Indians working abroad — a major inflow for India. Income covers returns earned from overseas investments.

CAPITAL ACCOUNT

Investment flows, not day-to-day consumption

The Capital Account captures cross-border investment activity. Unlike the Current Account, these transactions are about ownership of assets and financial instruments — not purchase of goods or services.

◆

FDI — Foreign Direct Investment

Long-term investment in Indian businesses, factories, and assets. More stable and sticky — less likely to exit suddenly during periods of global stress.

◆

FII — Foreign Institutional Investment

Shorter-term portfolio flows into Indian stocks and bonds. More volatile — FII outflows can rapidly weaken the rupee during global uncertainty.

!

Recent rupee slide: a capital account story

India's recent rupee depreciation — amid oil price fears and the West Asia conflict — has been driven more by capital account pressures (FDI/FII outflows) than by the current account deficit.

Current Account Deficit (CAD)

$30.1bn

CAD, Apr–Dec 2025

1%

of GDP — down from 1.3% a year ago

$36.6bn

CAD, Apr–Dec 2024

Forex Reserves — Mar 13, 2026

$709.75bn

Total reserves (RBI data) — FCA, Gold, SDRs, IMF RTP

12 mo.

Import cover vs 8–10 month global threshold

STRUCTURAL PATTERN

India has almost always run a deficit

In 25+ years, India recorded a current account surplus in only four fiscal years: 2001-02 ($3.4bn), 2002-03 ($6.3bn), 2003-04 ($14.1bn), and 2020-21 ($23.9bn). Every other year has been in deficit.

HISTORICAL CONTEXT

The crisis that remade India's economy

The 1991 BoP crisis is India's most consequential economic turning point — from near-default to a $709bn forex buffer today. Here is how it unfolded.

AUG 1990

Oil prices spike sharply after Iraq invades Kuwait. India's import bill surges, stressing forex reserves.

1990–91

Gulf War deepens the crisis. Massive capital outflows accelerate. The BoP situation turns unmanageable.

MID-1991 — CRISIS PEAK

Reserves hit rock bottom. Forex cover drops to barely 2–3 weeks of imports. India faces risk of sovereign default and a full crisis of confidence.

1991 — THE REFORMS

PM Narasimha Rao & FM Manmohan Singh announce landmark reforms: New Industrial Policy, abolition of trade licences, rupee convertibility on current account, and opening of FDI.

MAR 2026 — TODAY

Reserves at $709.75bn — covering 12+ months of imports. A complete reversal from the 2–3 weeks of cover recorded in 1991.

Sources: Reserve Bank of India · The Indian Express (Harish Damodaran) · UPSC CSE PYQs 2011 & 2014

— G-secs, or government securities or government bonds, are tradable instruments issued by the Central Government or the State Governments. It is used by the government to borrow money from the public.

— Under Section 45ZB of the amended RBI Act, 1934, the central government is empowered to constitute a six-member Monetary Policy Committee (MPC) to determine the policy interest rate required to achieve the inflation target. The first such MPC was constituted on September 29, 2016.

Other Important Articles Covering the same topic:

📍Knowledge Nugget | BoP basics for your UPSC exam: Current account, capital account and rupee dynamics

📍Knowledge nugget of the day: RBI’s Monetary Policy Committee (MPC)

📍Government securities, T-bills, and bond yields explained

Previous year UPSC Prelims Question Covering similar theme:

(1) With reference to Balance of Payments, which of the following constitutes/constitute the Current Account? (UPSC CSE 2014)

1. Balance of trade

2. Foreign assets

3. Balance of invisibles

4. Special Drawing Rights

Select the correct answer using the code given below:

(a) 1 only

(b) 2 and 3

(c) 1 and 3

(d) 1, 2 and 4

(2) Consider the following actions which the Government can take: (UPSC CSE 2011)

1. Devaluing the domestic currency.

2. Reduction in the export subsidy.

3. Adopting suitable policies which attract greater FDI and more funds from FIIs.

Which of the above action/actions can help in reducing the current account deficit?

(a) 1 and 2

(b) 2 and 3

(c) 3 only

(d) 1 and 3

Previous year UPSC Mains Question Covering similar theme:

Though India allowed foreign direct investment (FDI) in what is called multi brand retail through joint venture route in September 2012, the FDI ,even after a year, has not picket up. Discuss the reasons. (UPSC CSE 2013)

NATION

Nilgiri Tahr population rises to 1,364 in TN, 4.68% rise over ’25

Syllabus:

Preliminary Examination: Current events of national and international importance

Mains Examination: General Studies-III: Conservation, environmental pollution and degradation, environmental impact assessment

What’s the ongoing story: Tamil Nadu’s Nilgiri Tahr population has recorded a steady rise with the third synchronised population estimation conducted in April 2026, putting the count at an estimated 1,364 individuals, showing a 4.68 per cent increase over last year.

Key Points to Ponder:

— What is the conservation status of Nilgiri Tahr?

— How does the Wildlife Protection Act help in the conservation of animals?

— Where is Mudumalai Tiger Reserve?

— What is the ecological significance of Nilgiri Tahr?

— What are the threats to the Nilgiri Tahr population?

— What are the efforts taken to conserve it?

— Is it an official state animal of which state?

Key Takeaways:

— The ungulates, or hoofed animals are an endangered species found exclusively in the Southern Western Ghats.

— The Nilgiri Tahr inhabits the verdant sub-alpine grasslands of the Western Ghats in Tamil Nadu and Kerala, and it plays a vital role in nutrient cycling in the high-altitude mountain ecosystem. It has been accorded the highest protection status under the Wildlife Protection Act.

Nilgiri Tahr (Photo: Wikipedia)

— In the last two estimation exercises, the state had recorded 1,303 and 1,031 individuals in 2025 and 2024, respectively, thus signalling a positive recovery trend. The results carry a 95% confidence interval of 869 to 2,465 individuals.

— Age and sex data revealed that adult females constituted 38.4% of the observed population and adult males 34.6%, with a male-to-female ratio of 55:100. Yearlings accounted for 15.5% and young animals for 11.5%.

— The Nilgiri Tahr is primarily found in Tamil Nadu and Kerala with its distribution stretching from the southern tip of Kanyakumari to the Nilgiri Hills in the north.

Do You Know:

— The Nilgiri Tahr (Nilgiritragus hylocrius) is a distinctive, mountain-dwelling ungulate endemic to the Western Ghats of southern India. It is one of only three extant Tahr species globally – alongside the Himalayan Tahr (Hemitragus jemlahicus) and the Arabian Tahr (Arabitragus jayakari) – and the only one restricted entirely to the Indian subcontinent. With its specialized adaptation to grasslands close to crags and sheer cliffs, the Nilgiri Tahr servesas a flagship species for the high-elevation habitats of the Western Ghats.

Other Important Articles Covering the same topic:

📍IAS officer shares Tamil Nadu’s conservation project on saving Nilgiri tahr, the state animal

Previous year UPSC Prelims Question Covering similar theme:

(3) Consider the following statements about Rhynchostylis retusa (Foxtail orchid): (UPSC CSE 2026)

1. It is an epiphytic orchid.

2. The species is endemic to North-east India.

3. It is the State flower of Arunachal Pradesh and Assam.

Which of the statements given above is/are correct?

(a) 1 only

(b) 1 and 3

(c) 2 and 3

(d) 3 only

EXPLAINED

Can scheme to replace NCR’s old trucks and buses curb pollution?

Syllabus:

Preliminary Examination: Current events of national and international importance

Mains Examination: General Studies-III: Conservation, environmental pollution and degradation, environmental impact assessment

What’s the ongoing story: The Union Cabinet on Wednesday (June 3) approved a two-year clean mobility scheme to reduce air pollution in the Delhi-National Capital Region (NCR) that will incentivise replacement of older trucks and buses with BS-VI or stricter emission-compliant vehicles. Government vehicles will be excluded from this scheme.

Key Points to Ponder:

— What are the reasons for air pollution in Delhi-NCR?

— What are BS-VI norms?

— What are the challenges in implementing BS-VI norms?

— What is the difference between BS-IV and BS-VI?

— What are the efforts taken by the government to curb air pollution?

— What are the harmful impacts of air pollution on human health?

— What are the major sources of air pollution in Delhi?

— What is the National Clean Air Program?

— What is the Commission for Air Quality Management (CAQM)?

Key Takeaways:

— BS refers to Bharat Stage, a set of emission standards to regulate and reduce vehicular air pollution. While BS-IV regulated tailpipe pollutants like nitrogen oxides (NOx), carbon monoxide (CO), and particulate matter (PM), BS-VI introduced stricter limits on such tailpipe emissions besides pushing cleaner fuels and advanced onboard diagnostics

— There have been Union government and Delhi government schemes introduced and implemented in the past few years to incentivise a transition to electric vehicles or BS-VI vehicles, including for buses, such as the PM-eBus Sewa. The new scheme, however, specifically targets BS-IV vehicles as well as older trucks and buses compliant with BS-IV emission norms in Delhi-NCR.

— Delhi-NCR suffers from extreme air pollution and the predominant sources of pollution are transport sector, dust, industrial pollution, and biomass burning. These sources are both local as well as regional within a broader geographical airshed.

— Vehicular emissions remain a key concern as Delhi-NCR’s vehicle fleet is high at 2.98 crore vehicles and it is growing at 7% per annum, as per government data. Earlier this year, a meta-analysis of multiple emission source apportionment studies from 2015 and 2010 by a panel of air quality experts attributed 23% of winter PM2.5 pollution and 19% of summer PM2.5 emissions to the transport sector.  This expert panel was tasked by the Commission for Air Quality Management (CAQM) in Delhi-NCR to assess reasons behind the worsening of air quality in the region.

— Even as the share of trucks and buses compliant with older emission norms is only 3% of the total fleet, their emission load is disproportionate to their stock. It is estimated that one pre-BS norms heavy-duty vehicle pollutes as much as 14 times of the modern, BS-VI compliant vehicles.

— The official government note on the Cabinet decision stated that even a BS-IV vehicle emits 2.7 times more than its BS-VI counterpart, making the transition to cleaner technology an important step to reduce air pollution.

— “As engines age, components undergo severe wear-and-tear, causing incomplete combustion and massive release of emissions. Replacing old vehicles that met weaker emissions standards compared to the current BS-VI vehicles standards highlights the critical importance of this targeted phase-out,” CSE said.

Do You Know:

— Bharat Stage emission norms are India’s standards for regulating pollution from motor vehicles. They set legal limits on exhaust emissions of pollutants such as carbon monoxide, hydrocarbons, nitrogen oxides and particulate matter. Each successive BS tightens these limits, pushing manufacturers to adopt cleaner engine technologies, better exhaust treatment systems and cleaner fuel.

— The main difference between BS-IV and BS-VI (which is comparable to Euro 6) is in the amount of sulphur in the fuel. BS-VI fuel is estimated to bring around an 80% reduction in sulphur content — from 50 parts per million (ppm) to 10 ppm.

— The Commission was constituted through the CAQM Act, 2021, which came into force in the same year on April 13.

— The air quality monitoring body is tasked with better coordination, research, identification, and resolution of problems surrounding the air quality index and related matters in NCR and adjoining areas. It has the power to take measures, issue directions and entertain complaints to protect and improve the air quality in the region.

Other Important Articles Covering the same topic:

📍Knowledge Nugget: No entry for Non-BS-VI vehicles in Delhi. Why understanding BS norms matters for UPSC Exam

UPSC Prelims Practice Question Covering similar theme:

(4) Consider the following statements about the Bharat Stage (BS) norms:

1. India first implemented the BS norms in 2000.

2. The use of non-BS VI vehicles is banned all over India.

3. The Sulphur content under BS-IV is maximum permissible at 80 Parts Per Million (ppm).

Which of the statements mentioned above is/are correct?

(a) 1 and 2 only

(b) 2 and 3 only

(c) 1, 2 and 3

(d) None of the above

Previous year UPSC Mains Question Covering similar theme:

What are the key features of the National Clean Air Programme (NCAP) initiated by the Government of India? (UPSC CSE 2020)

Behind Kerala’s poor finances: high borrowings, low capital spend

Syllabus:

Preliminary Examination: Current events of national and international importance

Mains Examination: General Studies-III: Indian Economy and issues relating to planning, mobilisation, of resources, growth, development and employment

What’s the ongoing story: A report recently unveiled by new Kerala Chief Minister V D Satheesan presents a grim picture of the state’s financial health, showing that it trails the national average across most crucial parameters.

Key Points to Ponder:

— Understand these different models of state development: Delhi model, sushashan in Bihar, and Gujarat model

— What are the reasons for rising state deficits in India?

— What are capital expenditure and revenue expenditure?

— How these deficits are being funded by the state?

— What are the steps taken by the central government to reduce state non-capital expenditure?

— What is the purpose of NITI Aayog’s fiscal health index?

— What is the recommendation of the Fiscal Responsibility and Budget Management (FRBM) Review Committee Report on debt to GDP ratio?

Key Takeaways:

— Long before Arvind Kejriwal’s “Delhi model”, Nitish Kumar’s “sushashan” (good governance) in Bihar and Narendra Modi’s “Gujarat model”, there was the Kerala model of economic development.

— In the 1950s, it had the country’s highest population growth rate. By the 1970s, it became one with the lowest.

— Over the next two decades, Kerala achieved levels of social and economic development — better health, education and quality of life — that not only surpassed other states but rivalled influential countries.

— What’s more, Kerala achieved all this with much lower levels of income. In 1996, its per capita income was one-hundredth of the US’s. Despite this, it had a Human Development Index (HDI) score of 0.775, close to the US’s 0.925 and well above India’s 0.45 — and without the kind of coercion that countries such as China employed.

— However, over the past several years, Kerala’s model has lost its sheen. The telltale sign has been the worsening state of the state government’s finances.

— Simply put, with each passing year, the state has had to borrow more just to meet the gap between its expenses and its revenues. What’s worse is that the bulk of this money goes towards paying salaries and pensions.

— This means very little is left to spend on developmental areas (such as health and education) or building the state’s productive capacity (also called capital expenditure).

Kerala’s fiscal position has slid relative to the national average on some of the most important metrics.

— Outstanding liabilities refers to all the debt that the state government has to pay back. Kerala’s outstanding liabilities as a percentage of its total economic output (gross state domestic product, or GSDP) is at 35%. The national average is around 29%.

— Part of the solution is to address the wastage in expenditure and to make the administration more efficient. Some of the solutions discussed in the report include raising the retirement age to the same level as the Union government. This move is expected to cut down on the pension bill.

— Public-sector enterprises (PSE) will also come under stringent review. The report finds that Kerala has the largest number of PSEs among the Indian states and “the majority of them are making losses”.

Do You Know:

— The public debt of all 28 states combined trebled in 10 years — from Rs 17.57 lakh crore in 2013-14 to Rs 59.60 lakh crore in 2022-23 — according to a first-of-its-kind report (September 2025) by the Comptroller and Auditor General of India (CAG) that provides a decadal analysis on fiscal health of states.

— According to the report, the total public debt (internal debt and loans and advances from the Centre) of the 28 states was Rs 59,60,428 crore at the end of FY 2022-23 — or 22.96 per cent of their combined Gross State Domestic Product of Rs 2,59,57,705 crore. GSDP is the value of all finished goods and services produced within a state’s geographical boundaries.

— Observing that the “golden rule of borrowing” suggests that the government should borrow only to invest or capitalise and not to meet its operating cost/ current spending, the report highlighted that 11 states used borrowed money to finance their current expenditures.

— NITI Aayog released the Fiscal Health Index (FHI) 2026 for the Financial Year 2023-24. It serves as a comprehensive framework for assessing and comparing the fiscal performance of Indian states.

— The FHI continues to use the five fiscal pillars to measure the fiscal health of states. The five pillars are: quality of expenditure, revenue mobilisation, fiscal prudence, debt index, and debt sustainability.

— Odisha remains the top performer, improving its score over the previous year, with Goa and Jharkhand also featuring among the top Achiever states. Gujarat and Maharashtra continue in the top five.

Other Important Articles Covering the same topic:

📍Knowledge Nugget | Fiscal Health Index 2026: Key highlights for UPSC and other competitive exams

📍Exclusive: India’s 28 states’ debt balloons to Rs 59.6 lakh crore, trebled in 10 years: CAG Report

Previous year UPSC Prelims Question Covering similar theme:

(5) Which one of the following correctly represents the three key sub-indices of the Financial Inclusion Index (FI-Index) of the Reserve Bank of India (RBI)? (UPSC CSE 2026)

(a) Credit access, Insurance depth, and Pension coverage

(b) Banking access, GDP contribution, and Financial literacy

(c) Access, Usage, and Quality

(d) Access, Affordability, and Transparency

Previous year UPSC Mains Question Covering similar theme:

Explain how the Fiscal Health Index (FHI) can be used as a tool for assessing the fiscal performance of states in India. In what way would it encourage the states to adopt prudent and sustainable fiscal policies? (UPSC CSE 2025)

AI-enabled ball for better decisions, fewer surprises

Syllabus:

Preliminary Examination: Current events of national and international importance.

Mains Examination: General Studies-III: Science and Technology- developments and their applications and effects in everyday life.

What’s the ongoing story: Every four years when the FIFA World Cup comes around, official sponsor Adidas creates a new iteration of the ball that will be used. This time, as the world further integrates artificial intelligence (AI) models into everyday use-case scenarios, the humble football now finds itself an AI-enabled entity, loaded with a sensor specifically built to track its movements.

Key Points to Ponder:

— How is AI transforming sports and its understanding?

— Know about the FIFA World Cup

— Know about the history of football.

— Where is the FIFA World Cup being played?

— Has India qualified for the World Cup?

— What is connected ball technology?

— What is the virtual assistant referee (VAR) system?

Key Takeaways:

— But the Trionda, this edition’s ball, is notable for more than its modern sensor. It has the lowest number of panels ever used to make a football. And, unlike the mercurial Jabulani ball used during the 2010 World Cup, it promises far fewer surprises than what many players had to contend with in South Africa.

— The Telstar ball was created for the 1970 FIFA World Cup. Made of 32 panels, it was coloured black and white so that it would be more clearly visible to television audiences in a pre-colour TV era.

— Its iconic design is what immediately comes to mind when you think of a football. It is from this foundation that the modern football has evolved.

— Trionda is like an electronic appliance — it needs to be charged for 90 minutes for six hours of play. This is because it contains a sensor inside — something Adidas first adopted with the Al Rihla ball used at the 2022 World Cup in Qatar.

— This is how this “connected ball technology” works. The Trionda has a 500 hz ‘inertial measurement unit’ motion sensor inside one of its four panels, with counterbalances placed on all other panels as well to ensure that its flight remains true. An inertial measurement unit measures and reports an object’s specific force, orientation, and how fast it rotates or revolves around an axis.

— Football authorities are attempting to cut down the often prolonged decision-making time that has followed the introduction of the virtual assistant referee (VAR) system. The sensor chip inside the Trionda sends razor-sharp ball-movement data to officials and hastens the process of making offside decisions.

— The sensor will be complemented by pitchside sensors, which track player movements. FIFA has also chosen to scan each footballer at the tournament, and VAR will also use a 3D digital avatar of the player.

— Combine all this information gathered — add AI to the mix — and FIFA and Adidas believe there lies a path to issuing lightning-fast offside calls and other VAR checks like accidental handballs and accurate player tracking.

— Many countries have found themselves on the losing end of a match based on a decision that went against them. World Cups have famously amplified those calls — be it Diego Maradona’s handball against England in 1986 or Frank Lampard’s ghost goal against Germany in 2010. FIFA is hoping to minimise such incidents.

— The 2026 FIFA World Cup will be the first time three countries will host the tournament. Keeping that in mind, the Trionda is made on a white base, with red, blue, and green-coloured graphics across the four panels of the ball.

Do You Know:

— The 2026 edition will take place across the vast expanse of the United States of America, Canada and Mexico. It will be a 39-day affair – a week longer than the longest FIFA World Cup ever and will have 40 matches more than the 2022 edition in Qatar.

— But if FIFA were to be asked, the biggest teams to miss out would be China and India. An unwritten goal of the 48-team World Cup was to welcome the two countries, and their combined populations of over three billion, into the fold – a pipe dream for now.

— A 48-team World Cup reduces the likelihood of a group stage where three teams of roughly similar strength are pooled together to create some jeopardy. This iteration of the World Cup, with its 12 groups, will see two of the best teams from each group progressing to the Round-of-32.

Other Important Articles Covering the same topic:

📍Will biggest be the best? How 48-team draw changes dynamics of the FIFA World Cup

ALSO IN NEWS

• India’s ‘partner-less’ population shrinks but TN, Kerala buck national trend

At a time when there is a conversation around rising divorce rates and changing family structures, fresh demographic data suggests a different reality. The proportion of Indians who are widowed, divorced or separated has declined over the past decade, even as a handful of southern states have moved in the opposite direction.

According to the Sample Registration System Statistical Report 2024, 3.5 per cent of India’s population is currently classified as widowed, divorced or separated (W/D/S), down from 4.1 per cent in 2014.

The critical takeaway from the 2024 data is that living without a partner in India remains overwhelmingly a female reality. The figures lay bare a severe structural disparity: men who divorce or lose a spouse are highly likely to remarry, while women overwhelmingly bear the social and economic burden of living out their lives with the W/D/S status.

A decade ago, a massive 6.5 per cent of the total female population was classified as W/D/S, compared to a mere 1.9 per cent of males. While the overall numbers have improved, the gender chasm remains firmly intact. Today, 5.4 per cent of all Indian females carry this status, compared to just 1.6 per cent of males.

• Maulana Barkatullah: ‘First PM of India’ whose name varsity wants to drop

The executive council of Bhopal’s Barkatullah University has passed a proposal to change its name to Vagdevi Bhojpal University. The university got its current name in 1988, before which it was called Bhopal University.

Maulana Barkatullah Bhopali was a freedom fighter and the ‘first prime minister of independent India’, as he along with some associates, most notably Raja Mahendra Pratap, set up India’s first ‘government in exile’ in Kabul in 1915.

PRELIMS ANSWER KEY

1. (c)    2. (d)    3. (b)    4. (d)    5. (c)

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