19 June 2026 Current Affairs for UPSC

Why in News?

The Union government has told a court that the messaging platform Telegram has “evolved into the new dark web”, arguing that its large channels, anonymity features and weak takedown response make it a conduit for unlawful content. The framing puts a fresh spotlight on Section 69A of the Information Technology Act, 2000, the State’s principal legal tool to block public access to online information.

As The Hindu reported, the dispute is less about one app and more about how India regulates powerful intermediaries while honouring free-speech limits. It revives the constitutional architecture from Shreya Singhal v. Union of India (2015), the blocking rules of 2009, the safe-harbour principle under Section 79, and the due-diligence duties imposed by the IT Rules, 2021.

• The Centre characterised Telegram as the “new dark web”, citing encrypted, high-volume channels used for piracy, scams and harmful content.
• The matter foregrounds Section 69A, which empowers the government to direct blocking of information in the interest of sovereignty, security, public order and friendly foreign relations.
• It tests how intermediary liability and safe harbour apply to platforms that host channels reaching lakhs of users.
• Courts and commentators have invoked Shreya Singhal (2015), which upheld 69A but read in procedural safeguards against arbitrary blocking.
• The episode connects to ongoing debates over the IT Rules, 2021 and proposals under the upcoming Digital India Act framework.

The development matters in the context of:

• Relevant to the balance between Article 19(1)(a) free speech and the reasonable restrictions of Article 19(2).
• Relevant to platform governance, traceability of originators, and cyber-security of the information ecosystem.

UPSC Relevance

Prelims Relevance

• Section 69A, IT Act 2000 — power to block public access to information
• Section 79, IT Act — conditional safe harbour for intermediaries
• Section 66A — struck down as unconstitutional in Shreya Singhal (2015)
• Shreya Singhal v. Union of India (2015) — landmark on online free speech
• IT (Procedure and Safeguards for Blocking of Access) Rules, 2009
• IT (Intermediary Guidelines and Digital Media Ethics Code) Rules, 2021
• Definition of an intermediary and a significant social media intermediary
• Article 19(1)(a) and reasonable restrictions under Article 19(2)
• Concept of the dark web versus surface and deep web
• Grievance Appellate Committee (GAC) under the 2021 Rules

Mains Relevance

GS Paper 2

• Government policies and regulation of fundamental rights — free speech online versus content blocking under Section 69A.
• Role of the judiciary: how Shreya Singhal shaped procedural safeguards and proportionality in blocking orders.
• Transparency and accountability in executive blocking powers, including secrecy of blocking orders.

GS Paper 3

• Internal security challenges through communication networks — misuse of encrypted platforms for crime and radicalisation.
• Role of media and social-networking sites in internal-security challenges; basics of cyber security and intermediary due diligence.

Essay

• Liberty and security in the digital age: who guards the gatekeepers of speech?
• Technology is a tool; regulation decides whether it builds or breaks trust.

Background and Context

What Section 69A actually says

Section 69A is the statutory hinge of the entire debate, so its scope matters.

• Inserted by the 2008 amendment to the IT Act, 2000, it lets the Central Government direct any agency or intermediary to block public access to information.
• Permitted grounds mirror parts of Article 19(2): sovereignty and integrity of India, defence, security of the State, friendly relations with foreign states, public order, and preventing incitement to a cognisable offence.
• Non-compliance by an intermediary can attract imprisonment up to seven years plus fine, making the duty to comply legally serious.
• Reasons for blocking must be recorded in writing, but orders are usually kept confidential under the 2009 rules, a recurring transparency concern.

Shreya Singhal and the safeguards

The constitutional benchmark for 69A came from a 2015 verdict that reshaped online speech law.

• In Shreya Singhal v. Union of India (2015), the Supreme Court struck down Section 66A for being vague and overbroad, a chilling effect on speech.
• The Court upheld Section 69A, but read it as narrowly tailored, with reasoned orders and a review committee acting as checks.
• It clarified that intermediaries must act on actual knowledge via a court order or government notification, not on private complaints alone.
• The judgment remains the lodestar for proportionality whenever the State seeks to restrict online content.

Safe harbour under Section 79

Why platforms are usually shielded, and when that shield drops, is central to the Telegram clash.

• Section 79 grants intermediaries conditional immunity from liability for third-party content they host or transmit.
• Protection holds only if the intermediary plays a passive role, follows due diligence, and removes content on receiving a valid court or government order.
• If a platform fails takedown duties or actively abets unlawful content, it can lose safe harbour and face liability.
• The Centre’s “new dark web” framing is effectively an argument that Telegram is not behaving like a neutral, compliant intermediary.

The IT Rules, 2021 layer

A second regulatory layer sets the day-to-day obligations platforms must meet.

• The IT Rules, 2021 impose due-diligence duties, time-bound grievance redressal and a Grievance Appellate Committee for unresolved complaints.
• Significant social media intermediaries must appoint a Chief Compliance Officer, a nodal contact and a resident grievance officer in India.
• For messaging platforms, a contested traceability requirement seeks the first originator of certain messages, raising privacy and encryption questions.
• Compliance gaps, such as a thin India presence, weaken a platform’s claim to safe harbour and invite stricter scrutiny.

Why Telegram draws fire

The platform’s design features explain why regulators single it out.

• Public channels can broadcast to very large audiences, blurring the line between private chat and mass publishing.
• Features like large file sharing, pseudonymity and limited proactive moderation can be exploited for piracy, scams and harmful material.
• The label “new dark web” signals that ordinary, easily accessible apps may now carry risks once associated with hidden networks.
• Globally, Telegram has faced rising legal pressure, including the 2024 detention of its founder in France over moderation failures, raising platform-accountability questions.

The speech-versus-security balance

Every blocking decision sits on a constitutional fault line between two legitimate goods.

• Free expression under Article 19(1)(a) covers the right to receive and share information online, not just to speak.
• Restrictions must satisfy the proportionality test: legitimate aim, suitable means, least-restrictive option and a fair balance.
• Over-broad blocking risks collateral censorship; under-regulation risks crime, fraud and threats to internal security.
• Transparency, reasoned orders and judicial review are the mechanisms that keep the balance legitimate.

Way Forward

Make blocking transparent and reasoned

• Publish anonymised, aggregate data on 69A orders and offer notice to content originators where feasible.
• Strengthen the review committee so each order meets the proportionality standard from Shreya Singhal.

Calibrate platform obligations

• Tie graded duties to a platform’s reach and risk, with faster takedown for clearly illegal content and safeguards for lawful speech.
• Insist on a real India compliance presence and responsive grievance redress before invoking blunt blocking.

Build a modern legal framework

• Move debates toward a clear, rights-respecting successor law (the proposed Digital India Act) that defines intermediary classes and due process.
• Protect encryption and privacy while improving lawful, accountable cooperation on genuine security cases.

Conclusion

The Telegram dispute is a stress test for India’s digital-governance toolkit, not a verdict on one app. Section 69A, safe harbour under Section 79 and the IT Rules, 2021 each carry power and risk, which is why the Shreya Singhal safeguards remain essential.

A durable answer lies in proportionate, transparent regulation: platforms held to genuine accountability, citizens protected from both crime and censorship, and blocking powers exercised under reasoned, reviewable orders rather than rhetoric.

UPSC Practice Questions

Prelims MCQ 1

With reference to Section 69A of the Information Technology Act, 2000, consider the following statements:

1. It empowers the Central Government to direct blocking of public access to information on specified grounds.
2. The grounds for blocking broadly correspond to the reasonable restrictions under Article 19(2) of the Constitution.
3. It was struck down as unconstitutional by the Supreme Court in Shreya Singhal v. Union of India.

How many of the above statements are correct?

(a) Only one (b) Only two (c) All three (d) None

Answer: (b) Only two

Explanation:

Statements 1 and 2 are correct. Section 69A allows the Centre to order blocking on grounds tracking Article 19(2). Statement 3 is wrong: Shreya Singhal (2015) struck down Section 66A but upheld Section 69A.

Prelims MCQ 2

The concept of ‘safe harbour’ for online intermediaries in India is primarily provided by which provision?

(a) Section 66A of the IT Act, 2000 (b) Section 69A of the IT Act, 2000 (c) Section 79 of the IT Act, 2000 (d) Article 19(2) of the Constitution

Answer: (c) Section 79 of the IT Act, 2000

Explanation:

Section 79 grants intermediaries conditional immunity from liability for third-party content, provided they observe due diligence and act on valid court or government orders. Section 66A was struck down; 69A deals with blocking; Article 19(2) sets restriction grounds.

UPSC Mains Questions

1. The power to block online content under Section 69A must be balanced against the freedom of speech and expression. Critically examine the safeguards laid down by the judiciary and their adequacy in the present digital ecosystem. (250 words)
2. Encrypted messaging platforms pose new challenges to internal security and intermediary regulation in India. Discuss the legal framework governing intermediary liability and suggest a proportionate way forward. (250 words)

Sources: The Hindu and The Hindu (Sci-Tech).

Frequently Asked Questions

Why in News?

India is facing a roughly 41% all-India rainfall deficit in the early weeks of the 2026 southwest monsoon, after the seasonal rains stalled over Maharashtra and failed to advance on schedule into central and northern India. The Hindu’s national monsoon tracker reported that the monsoon’s northward progress has paused, leaving large swathes of the country waiting for rain at the very start of the kharif season.

The India Meteorological Department (IMD) flagged sharp regional variation in the rainfall departure from normal. The Indian Express Explained desk asked why the monsoon’s advance stalled mid-June and when the rains are likely to resume, framing the pause as a classic monsoon break with implications for sowing, drinking water and the rural economy.

• All-India deficit of about 41% below the Long Period Average (LPA) in the season’s opening phase.
• Region-wise IMD departure: central India ~67% deficit, the worst-hit zone covering Maharashtra and Madhya Pradesh.
• East and northeast India ~42% deficit, despite usually being among the wettest regions early in the season.
• Southern peninsula ~22% deficit and northwest India ~6% deficit, the least affected.
• Monsoon’s onward march has stalled over Maharashtra, delaying coverage of the core kharif belt.

The development matters in the context of:

• Matters for kharif sowing: paddy, soybean, cotton and pulses depend on timely June-July rain.
• Matters for reservoir storage and drinking-water security ahead of the dry months.
• Matters for rural demand and inflation, since a weak start can dent farm incomes and push food prices.

UPSC Relevance

Prelims Relevance

• Long Period Average (LPA): 50-year average rainfall (1971-2020 baseline) used to define a ‘normal’ monsoon.
• Normal monsoon band: seasonal rainfall within 96-104% of LPA.
• Southwest monsoon season runs June to September; onset over Kerala is the official start.
• Two branches: the Arabian Sea branch and the Bay of Bengal branch.
• Inter-Tropical Convergence Zone (ITCZ) and its seasonal shift drive monsoon circulation.
• Monsoon break: a spell when the rain belt weakens or shifts to the Himalayan foothills.
• Madden-Julian Oscillation (MJO): an eastward-moving tropical disturbance that pulses monsoon rain.
• El Nino / La Nina (ENSO) and the Indian Ocean Dipole (IOD) modulate monsoon strength.
• IMD rainfall categories: deficient (below 90% LPA), below normal, normal, above normal, excess.
• Kharif crops are sown with the southwest monsoon and harvested in autumn.

Mains Relevance

GS Paper 1

• Mechanism of the Indian monsoon: ITCZ shift, differential heating, the two moisture branches and the role of the Tibetan Plateau.
• Spatial variability of rainfall across India and how monsoon failure produces regional droughts.
• Influence of global teleconnections (ENSO, IOD, MJO) on the timing and intensity of the southwest monsoon.

GS Paper 3

• Monsoon dependence of Indian agriculture, kharif cropping and the link to food security and inflation.
• Water-resource and reservoir management under variable monsoon onset and break spells.
• Disaster management and drought preparedness: contingency cropping, crop insurance and irrigation buffers.

Essay

• Climate variability and the fragile foundations of an agrarian economy.
• When the rains fail: nature, livelihoods and the limits of planning.

Background and Context

What the southwest monsoon is

The southwest monsoon is the seasonal reversal of winds that brings India most of its annual rainfall between June and September.

• Driven by differential heating: the landmass heats faster than the surrounding oceans, creating a low-pressure zone over northwest India that pulls in moist sea winds.
• The Inter-Tropical Convergence Zone (ITCZ) shifts north over the subcontinent in summer, anchoring the rain belt.
• Moisture arrives in two streams: the Arabian Sea branch feeding the west coast and central India, and the Bay of Bengal branch feeding the east and northeast.
• The season delivers around 75% of India’s annual rainfall, making its timing decisive for farming and water supply.

Onset, advance and the LPA benchmark

IMD measures monsoon performance against a long-term average and tracks how the rains advance across the country.

• Onset over Kerala (normal date around June 1) marks the official start; the monsoon then advances north and west over several weeks.
• The Long Period Average (LPA) is the 50-year mean seasonal rainfall used as the ‘normal’ reference.
• A season is normal when rainfall lands within 96-104% of the LPA; below 90% is deficient.
• A stalled advance means large areas stay rain-free past their normal coverage dates, as seen with the stall over Maharashtra this year.

Reading the 2026 deficit numbers

The 41% all-India shortfall hides sharp regional contrasts in the IMD departure data.

• Central India carries the deepest gap at about 67% below normal, hitting Maharashtra and Madhya Pradesh hardest.
• East and northeast India sit near 42% deficit, unusual for an early-season period that is normally wet.
• The southern peninsula is closer to normal at roughly 22% below, and the northwest at about 6% below.
• Early-season percentages swing widely because the base rainfall is small, so a few missed spells can show up as a large shortfall.

Why the monsoon stalled: the break phase

A monsoon break is a natural lull when the rain-bearing systems weaken, and several factors can trigger one.

• In a monsoon break, the rain belt shifts toward the Himalayan foothills, leaving the plains dry.
• The Madden-Julian Oscillation (MJO), an eastward-moving band of cloud and rain, can suppress convection over India when it sits in an unfavourable phase.
• A lack of low-pressure systems and depressions over the Bay of Bengal slows the inland push of moisture.
• Weak monsoon trough activity and dry mid-level winds can hold up the northward advance, exactly the pattern that paused the rains over Maharashtra.

The teleconnections: ENSO, IOD and the global picture

India’s monsoon is shaped not just by local systems but by ocean-atmosphere patterns across the Pacific and Indian Oceans.

• El Nino (warm central Pacific) usually weakens the monsoon, while La Nina tends to strengthen it.
• A positive Indian Ocean Dipole (IOD) generally favours stronger monsoon rain, a negative IOD does the opposite.
• These are seasonal modulators, not switches; a favourable ENSO-IOD setup can still coincide with shorter dry breaks.
• Forecasters watch these indices together to judge whether a stall is a passing break or a sign of a weaker overall season.

Agriculture and the kharif risk

The early-season deficit lands precisely when farmers depend on rain to begin sowing.

• Kharif crops such as paddy, soybean, cotton, maize and pulses are sown with the June-July rains.
• A delayed or patchy start can push back sowing windows, shorten the growing period and lower yields.
• Roughly half of India’s net sown area remains rain-fed, so monsoon timing directly drives output for millions of small farmers.
• A weak start raises the case for contingency cropping plans and short-duration seed varieties.

Water, reservoirs and the wider economy

Beyond the fields, a stalled monsoon strains water storage and ripples through prices and demand.

• Low early rain delays reservoir refilling, tightening irrigation and drinking-water buffers for the dry season.
• Weak farm incomes can soften rural demand for goods, denting consumption-led growth.
• Supply shortfalls in vegetables, pulses and cereals can stoke food inflation.
• Hydropower generation and groundwater recharge also depend on a healthy, well-spread monsoon.

Way Forward

Forecasting and early warning

• Strengthen IMD’s extended-range and district-level forecasts so farmers get usable lead time on break and revival spells.
• Push agro-advisories through Krishi Vigyan Kendras and mobile alerts tied to local rainfall.

Building agricultural resilience

• Promote short-duration and drought-tolerant varieties and ready-made contingency cropping plans for delayed onset.
• Expand micro-irrigation and watershed work to cut dependence on a single good monsoon.

Water and safety-net management

• Prioritise reservoir and groundwater conservation early in the season to hedge against a weak finish.
• Keep crop insurance and rural employment schemes ready to absorb income shocks in deficit districts.

Conclusion

A 41% early-season deficit is a reminder that the Indian monsoon is a system of starts and stops, not a steady tap. A stall over Maharashtra in mid-June can still be followed by a strong revival, and seasonal totals often recover once the break ends and low-pressure systems return over the Bay of Bengal.

The deeper lesson for an agrarian economy is preparedness over panic. Better forecasting, resilient cropping, careful water storage and ready safety nets turn a difficult monsoon from a crisis into a manageable risk, even as climate variability makes each season harder to predict.

UPSC Practice Questions

Prelims MCQ 1

With reference to the Indian southwest monsoon, consider the following statements:

1. The Long Period Average (LPA) is the basis on which IMD defines a normal monsoon.
2. A monsoon break occurs when the rain belt shifts towards the Himalayan foothills, leaving the plains dry.
3. El Nino conditions are generally associated with a stronger-than-normal Indian monsoon.

How many of the above statements are correct?

(a) Only one (b) Only two (c) All three (d) None

Answer: (b) Only two

Explanation:

Statements 1 and 2 are correct: IMD measures rainfall against the LPA, and a break phase pushes the rain belt to the foothills. Statement 3 is wrong: El Nino is usually linked to a weaker monsoon, while La Nina tends to strengthen it.

Prelims MCQ 2

A season is classified by IMD as a ‘normal’ monsoon when seasonal rainfall lies within which band of the Long Period Average?

(a) 90-110% (b) 96-104% (c) 80-120% (d) 98-102%

Answer: (b) 96-104%

Explanation:

IMD defines a normal monsoon as seasonal rainfall between 96% and 104% of the LPA. Below 90% is deficient and above 110% is excess; the 96-104% band is the official ‘normal’ range.

UPSC Mains Questions

1. Explain the mechanism of the Indian southwest monsoon, including the role of the ITCZ and its two moisture branches. How do global teleconnections such as ENSO and the Indian Ocean Dipole modulate its strength? (250 words)
2. A large early-season rainfall deficit poses serious risks to an agrarian economy. Discuss the implications of a stalled monsoon for kharif agriculture, water security and rural incomes, and suggest measures to build resilience. (250 words)

Sources: The Hindu and Indian Express Explained.

Frequently Asked Questions

Why in News?

Net direct tax collections have grown by over 14% to cross Rs 5.21 lakh crore in the early weeks of the current fiscal, lifted mainly by stronger advance-tax payments after the first-quarter instalment fell due on 15 June. The Hindu reported the provisional numbers drawn from data released by the Central Board of Direct Taxes (CBDT).

For UPSC, the headline is less about the rupee figure and more about what it signals: tax buoyancy, the health of corporate profits and household incomes, and whether the government’s Budget direct-tax targets are on track. Advance tax is an early, forward-looking read on how firms expect the year to unfold, which is why each quarter’s instalment is watched closely.

• Net direct tax collections up over 14% to above Rs 5.21 lakh crore so far this fiscal, on CBDT provisional data.
• Advance tax drove the rise, with the first instalment of the year due by 15 June.
• Gross collections grew in double digits, with refunds rising only marginally, so the net figure stayed strong.
• Growth was led by corporate tax, with non-corporate (personal) tax also adding steadily.
• The trend marks a recovery from the comparatively tepid growth seen in the same period of the previous year.

The development matters in the context of:

• Matters as a real-time fiscal-health indicator for the Union Budget’s revenue arithmetic.
• Feeds into debates on tax buoyancy, the tax-to-GDP ratio, and the shift toward direct over indirect taxes.

UPSC Relevance

Prelims Relevance

• Direct vs indirect taxes: incidence and burden fall on the same person for direct taxes.
• Components of direct tax: corporate tax, personal income tax, and Securities Transaction Tax (STT).
• Advance tax: ‘pay-as-you-earn’ in four instalments (15 June, 15 Sep, 15 Dec, 15 March).
• TDS (Tax Deducted at Source) and self-assessment tax as collection modes.
• Gross vs net collections: net = gross minus refunds issued.
• CBDT administers direct taxes; it is a statutory body under the Central Boards of Revenue Act, 1963.
• Tax buoyancy: ratio of % change in tax revenue to % change in nominal GDP.
• Tax-to-GDP ratio: total tax revenue as a share of GDP, a measure of fiscal capacity.
• Income-Tax Act, 2025 replaced the 1961 Act as the framework law for direct taxation.
• The Department of Revenue (Ministry of Finance) oversees both CBDT and CBIC.

Mains Relevance

GS Paper 3

• Government Budgeting: mobilisation of resources, the role of direct taxes in financing the Budget, and the reliability of advance-tax data as a fiscal indicator.
• Indian Economy and issues relating to resource mobilisation: improving the tax-to-GDP ratio, widening the tax base, and the equity case for progressive direct taxation.
• Effects of tax buoyancy and revenue growth on fiscal-deficit management and the fiscal-consolidation path.

Essay

• Sound taxation as the price of a functioning state and the foundation of fiscal self-reliance.

Background and Context

Direct vs indirect taxes: where this number sits

Direct tax collection is one half of the Centre’s tax revenue, and its rise carries a specific economic meaning.

• Direct taxes are levied on income or wealth and are paid directly to the government by the person who bears them, so the burden cannot be shifted.
• Indirect taxes (mainly GST, customs, excise) are levied on goods and services, where the seller collects and the consumer ultimately bears the cost.
• Direct taxes are inherently progressive: higher incomes pay a higher share, which aids redistribution and equity.
• A rising direct-tax share within total revenue is generally read as a sign of a maturing, more equitable tax system.
• Read alongside the wider economy in our note on measuring growth beyond GDP.

What the latest CBDT data shows

The provisional figures point to a broad-based pick-up rather than a one-off spike.

• Net direct tax collection rose over 14% to cross Rs 5.21 lakh crore in the early part of the fiscal year.
• Gross collection grew in double digits, while refunds issued rose only slightly, keeping the net number buoyant.
• Corporate tax led the gains, indicating firmer company profits and advance-tax estimates.
• Non-corporate (personal income) tax added steadily, reflecting salary growth, capital-market gains and wider compliance.
• The CBDT releases such data periodically through the financial year as a running tally against the Budget estimate.

Advance tax: why 15 June matters

The jump is anchored to a calendar event, the first advance-tax instalment of the year.

• Advance tax is income tax paid in the year the income is earned, instead of a lump sum at year-end, on a ‘pay-as-you-earn’ basis.
• It applies to taxpayers whose tax liability for the year is Rs 10,000 or more (after TDS).
• It is paid in four instalments: 15% by 15 June, 45% by 15 September, 75% by 15 December, and 100% by 15 March.
• The first-quarter instalment makes June a key month, so collections rise sharply and offer an early read on the year ahead.
• Because firms self-estimate, advance tax reflects business expectations, not just past performance.

Components and collection machinery

Direct-tax revenue flows in through several distinct channels.

• Corporate tax: levied on company profits, historically the largest single component of direct tax.
• Personal income tax: levied on individuals, HUFs and firms, and now rivalling corporate tax in size.
• Securities Transaction Tax (STT): a small levy on trades in listed securities, sensitive to stock-market activity.
• Collection modes include TDS (deducted at source on salaries, interest and contracts), advance tax, and self-assessment tax filed with the return.
• CBDT, under the Department of Revenue, frames policy and administers collection through the Income Tax Department.

Tax buoyancy and tax-to-GDP

The deeper exam concepts behind a ‘collections jump’ are buoyancy and tax-to-GDP.

• Tax buoyancy measures how responsive tax revenue is to economic growth: a buoyancy above 1 means tax revenue grows faster than nominal GDP.
• Direct-tax growth running ahead of GDP growth signals healthy buoyancy and a widening, better-complying base.
• Tax-to-GDP ratio captures how much of national income the state can mobilise; India’s has been rising but stays modest by developed-country standards.
• A higher ratio gives the government more fiscal space for capital spending and welfare without excessive borrowing.
• Strong collections ease the fiscal-deficit path and reduce reliance on disinvestment or extra market borrowing.

Budget targets and the policy backdrop

Early collections are judged against the year’s Budget targets and a changing tax-law landscape.

• The Union Budget sets a direct-tax revenue target; quarterly data shows whether actual receipts are tracking ahead or behind.
• Strong early growth gives the government room on the fiscal-consolidation glide path it has committed to.
• The Income-Tax Act, 2025 replaced the six-decade-old 1961 Act, simplifying language and structure; see our explainer on the New Income-Tax Act, 2025.
• Recent reforms have widened the base and rationalised rates, including measures such as the abolition of angel tax for startups.
• Robust direct-tax buoyancy complements other external-sector buffers covered in our note on the RBI’s forex reserves.

Way Forward

Widen the base, deepen compliance

• Use data analytics, AIS and pre-filled returns to bring more taxpayers into the net without raising rates.
• Sustain faceless assessment and faster refunds to keep voluntary compliance high.

Raise the tax-to-GDP ratio

• Lift India’s tax-to-GDP closer to peer levels by curbing exemptions and plugging evasion.
• Shift the revenue mix gradually toward more equitable direct taxation.

Protect buoyancy through stable policy

• Keep tax rules predictable so corporate advance-tax estimates stay confident.
• Avoid reading a single quarter’s spike as a durable trend; track all four instalments.

Conclusion

A 14%-plus rise in net direct tax collections on the back of strong advance tax is, at heart, a confidence signal: companies and individuals are estimating higher incomes and paying ahead. For the fiscal arithmetic, it widens the government’s room to spend and consolidate at the same time.

The exam takeaway is to look past the headline rupee figure to the structural story, tax buoyancy, a rising tax-to-GDP ratio, and a gradual tilt toward equitable direct taxation under the new Income-Tax Act, 2025. Sustained collection growth is most useful when it reflects a wider, better-complying base rather than a one-off market or profit surge.

UPSC Practice Questions

Prelims MCQ 1

With reference to advance tax in India, consider the following statements:

1. It is paid in the financial year in which the income is earned.
2. The first instalment of advance tax for a financial year falls due on 15 June.
3. It is a form of indirect tax administered by the CBIC.

How many of the above statements are correct?

(a) Only one (b) Only two (c) All three (d) None

Answer: (b) Only two

Explanation:

Statements 1 and 2 are correct: advance tax is paid in the year income is earned, on a ‘pay-as-you-earn’ basis, with the first instalment due by 15 June. Statement 3 is wrong, advance tax is a mode of collecting direct (income) tax, administered by the CBDT, not an indirect tax under the CBIC.

Prelims MCQ 2

Which of the following best describes ‘tax buoyancy’?

(a) The ratio of direct taxes to indirect taxes in total revenue (b) The responsiveness of tax revenue to changes in nominal GDP (c) The share of total tax revenue in GDP (d) The gap between gross and net tax collections

Answer: (b) The responsiveness of tax revenue to changes in nominal GDP

Explanation:

Tax buoyancy is the ratio of the percentage change in tax revenue to the percentage change in nominal GDP; a value above 1 means tax revenue grows faster than the economy. Option (c) describes the tax-to-GDP ratio, a different concept.

UPSC Mains Questions

1. Early-year direct-tax collections, driven by advance tax, are often treated as a barometer of economic health. Critically examine how reliable such data is as a fiscal indicator, and what it reveals about tax buoyancy in India. (250 words)
2. Discuss the significance of raising India’s tax-to-GDP ratio and shifting the revenue mix toward direct taxes. What reforms can widen the direct-tax base without raising rates? (250 words)

Sources: The Hindu (Business) and Income Tax Department / CBDT.

Frequently Asked Questions

Why in News?

The National Stock Exchange (NSE), the country’s biggest bourse by trading volume, has filed its draft prospectus with the Securities and Exchange Board of India (SEBI) to launch an Initial Public Offering. As the Indian Express reported, the offering could become one of the largest public issues in the country’s history.

An exchange going public is unusual because NSE is itself a frontline regulator of the very market it wants to list in. The filing reopens long-running questions on self-listing, conflict of interest and how SEBI governs Market Infrastructure Institutions, making it a clean test-case for the capital-markets section of the UPSC GS3 economy syllabus.

• NSE filed a Draft Red Herring Prospectus (DRHP) with SEBI to take the exchange public.
• The issue is being described as potentially the largest IPO in Indian history, though the exact size is not yet finalised.
• The listing had been stalled for years, partly due to the unresolved co-location case and SEBI clearances.
• Because NSE regulates trading on its own platform, the share sale raises a structural conflict-of-interest and self-listing question.

The development matters in the context of:

• An IPO is a one-time event in the primary market; subsequent buying and selling of those shares happens in the secondary market.
• NSE is classified as a Market Infrastructure Institution (MII) alongside stock exchanges, depositories and clearing corporations.

UPSC Relevance

Prelims Relevance

• IPO — first sale of shares by a company to the public in the primary market.
• DRHP — Draft Red Herring Prospectus, the preliminary offer document filed with SEBI for review.
• Red Herring Prospectus — offer document that omits final price/issue size, used in book-building.
• Book building — price-discovery process where investors bid within a price band.
• Primary vs secondary market — new issuance vs trading of existing securities.
• Market Infrastructure Institution (MII) — exchanges, depositories, clearing corporations.
• SECC Regulations, 2018 — SEBI rules governing ownership and listing of stock exchanges and clearing corporations.
• SEBI — statutory capital-market regulator under the SEBI Act, 1992.
• Depositories — NSDL and CDSL hold securities in dematerialised (demat) form.
• Anchor investor — large institutional investor allotted shares ahead of an IPO opening.

Mains Relevance

GS Paper 3

• Capital markets as a source of long-term financing; role of equity markets in mobilising household savings for investment.
• Regulation of Market Infrastructure Institutions and the governance challenge of a regulator-like entity seeking a public listing.
• Financial inclusion and market deepening through rising demat accounts, retail participation and SIP inflows.
• Conflicts of interest in self-regulatory and market-infrastructure bodies, and how disclosure-based regulation mitigates them.

Essay

• Markets reward trust: how the credibility of institutions underpins economic growth.

Background and Context

What an IPO actually is

Strip away the headline and an IPO is simply a company selling ownership to outside investors for the first time.

• An Initial Public Offering (IPO) is the first sale of a company’s shares to the general public, after which the shares list on a stock exchange.
• It happens in the primary market, where securities are created and capital flows directly to the issuer (a fresh issue) or to existing shareholders (an offer for sale).
• Once listed, the shares trade among investors in the secondary market; the company itself does not raise new money from those trades.
• Most large IPOs use the book-building route: the company files a Red Herring Prospectus with a price band, investors bid, and the final price is discovered from demand.
• The document NSE has filed is a Draft Red Herring Prospectus (DRHP) — the preliminary version submitted to SEBI for examination before the issue opens.

Why the NSE listing is unusual

The NSE is not an ordinary company; it is a piece of market plumbing that polices the market it wants to join.

• NSE is India’s largest stock exchange by traded volume and a Market Infrastructure Institution (MII) — the category that also covers BSE, depositories and clearing corporations.
• An MII runs the rails of the financial system: matching trades, surveilling for manipulation and enforcing listing norms on the companies that trade on it.
• When such a frontline regulator lists, it must answer to investors for profit while still policing the market neutrally, creating a conflict of interest.
• The classic worry is self-listing — an exchange supervising the trading of its own shares; the established fix is to list the shares on the rival exchange, so NSE shares would trade on BSE.
• BSE itself listed back in 2017, which set the template and weakened the argument that an exchange cannot be publicly held.

SEBI and the rulebook for exchanges

How an exchange can be owned and listed is tightly scripted by the capital-market regulator.

• SEBI is the statutory regulator under the SEBI Act, 1992, charged with protecting investors and developing and regulating the securities market.
• Ownership and listing of exchanges are governed by the Securities Contracts (Regulation) (Stock Exchanges and Clearing Corporations) Regulations, 2018, commonly called the SECC Regulations.
• The SECC framework caps shareholding by any single entity, mandates that a majority of the board be public-interest directors, and ring-fences the regulatory functions of an MII.
• SEBI must clear the DRHP, satisfy itself on disclosures and pending litigation, and approve the governance safeguards before the issue can proceed.
• Further detail on the regulator’s mandate is available on the official site, sebi.gov.in.

Why the listing took so long

NSE has wanted to go public for nearly a decade; legacy litigation kept the door shut.

• NSE first attempted to list around 2016, but the plan was derailed by the co-location case, which alleged that some brokers got unfair, faster access to the exchange’s trading servers.
• The episode raised governance and surveillance concerns and led to regulatory action, penalties and prolonged scrutiny of the exchange’s controls.
• Resolving the regulatory overhang — including SEBI’s no-objection and settlement of pending matters — was a precondition for any credible IPO.
• The fresh DRHP signals that NSE believes those clearances and governance reforms are now substantially in place.

Could it really be India's largest IPO?

The scale claim rests on the value the market puts on a near-monopoly franchise, not on a published number.

• NSE handles the overwhelming share of India’s cash-equity and derivatives turnover, giving it a dominant, fee-generating franchise.
• A high valuation multiplied by even a modest share of stock on offer can translate into a very large absolute issue size, which is what drives the talk of a record-setting IPO.
• The actual issue size and price band are not yet finalised and will be set closer to launch through book-building; no figure should be assumed.
• If priced as reported, the offering would test the market’s appetite to absorb a very large issue without crowding out other listings.

India's deepening equity culture

The IPO arrives against a backdrop of unprecedented retail participation in Indian markets.

• The number of demat accounts has surged into the hundreds of millions, widening the base of individual investors.
• Steady SIP (Systematic Investment Plan) inflows into mutual funds have become a stable, domestic counterweight to volatile foreign flows.
• Deeper participation raises both opportunity and risk: more households are exposed to market swings, sharpening the case for strong regulation and investor protection.
• A landmark exchange listing is a visible symbol of this market deepening and of growing confidence in domestic capital markets.

Way Forward

Safeguards for a credible listing

• Keep the regulatory and commercial arms of NSE firmly ring-fenced, with independent oversight of surveillance and listing functions.
• List the shares on a competing exchange and define clear protocols for any regulatory action that touches NSE’s own securities.
• Strengthen disclosure-based regulation so investors can fairly price governance and litigation risks.
• Use the rising retail base as a reason to expand investor-awareness and grievance-redressal, not just market turnover.

Conclusion

The NSE filing is more than a big-ticket share sale. It is a stress-test of whether a market-infrastructure institution can be commercially owned without compromising its role as a neutral referee.

For UPSC purposes the durable takeaways are the mechanics of an IPO, the SEBI-anchored governance of exchanges, and the self-listing safeguard. Whether or not it sets a record, the offering captures India’s broader story of a deepening, increasingly retail-driven capital market that now demands sturdier institutions to match.

UPSC Practice Questions

Prelims MCQ 1

With reference to capital markets in India, consider the following statements:

1. An Initial Public Offering raises capital for a company in the secondary market.
2. A Red Herring Prospectus does not contain the final issue price or issue size.
3. Stock exchanges and depositories are both classified as Market Infrastructure Institutions.

How many of the above statements are correct?

(a) Only one (b) Only two (c) All three (d) None

Answer: (b) Only two

Explanation:

An IPO raises capital in the primary market, not the secondary market, so statement 1 is wrong. A Red Herring Prospectus omits the final price and size, used in book-building, so statement 2 is correct. Exchanges, depositories and clearing corporations are all Market Infrastructure Institutions, so statement 3 is correct. Two statements are correct.

Prelims MCQ 2

Consider the following with respect to the regulation of stock exchanges in India. Which one of the following is the regulator that must approve a stock exchange’s draft offer document and governs its ownership through the SECC Regulations?

(a) Reserve Bank of India (b) Ministry of Corporate Affairs (c) Securities and Exchange Board of India (d) Insolvency and Bankruptcy Board of India

Answer: (c) Securities and Exchange Board of India

Explanation:

SEBI, the statutory capital-market regulator under the SEBI Act, 1992, vets the DRHP and governs the ownership and listing of stock exchanges and clearing corporations through the SECC Regulations, 2018. The RBI regulates banking and money markets, the MCA administers company law, and the IBBI handles insolvency.

UPSC Mains Questions

1. An exchange that regulates the market in which it seeks to list raises a structural conflict of interest. Examine the safeguards available to reconcile the commercial and regulatory roles of a Market Infrastructure Institution in India. (250 words)
2. Rising demat accounts and SIP inflows reflect a deepening equity culture in India. Discuss the opportunities and risks this creates, and the role of SEBI in protecting retail investors. (250 words)

Sources: Indian Express Explained and Securities and Exchange Board of India.

Frequently Asked Questions

Why in News?

The Prime Minister is set to disburse around Rs 2,400 crore in incentives to new employees and employers under the Employment Linked Incentive (ELI) Scheme, marking the first round of payouts since the scheme was rolled out. PIB releases from the Ministry of Labour and Employment describe the transfers as going to first-time formal workers and to firms creating additional jobs, routed through the Employees’ Provident Fund Organisation (EPFO).

For UPSC, the news is a hook into a durable debate, how to convert headline GDP growth into formal, productive jobs. ELI was announced in the Union Budget 2024-25 as part of a wider employment-and-skilling package. Its design, incentivising both first-time workers and the firms that hire them, makes it a textbook case of a demand-side, formalisation-linked labour policy worth knowing in detail.

• First disbursal of around Rs 2,400 crore to new employees and employers under the ELI Scheme.
• Payouts routed through EPFO and credited via Direct Benefit Transfer (DBT) to Aadhaar-seeded accounts.
• Scheme was announced in Union Budget 2024-25 with a total outlay of about Rs 99,446 crore.
• Stated aim is to support roughly 3.5 crore jobs over a two-year window.
• Eligibility is tied to EPFO registration, so the scheme doubles as a formalisation drive.

The development matters in the context of:

• Sits within the broader jobs vs jobless-growth debate central to GS3 economy.
• Uses EPFO payroll data as both a delivery channel and a proxy for formal-job creation.

UPSC Relevance

Prelims Relevance

• ELI Scheme: announced in Union Budget 2024-25 under the employment-and-skilling package; implemented by the Ministry of Labour and Employment.
• Three parts: Part A (first-timers), Part B (manufacturing job creation), Part C (support to employers).
• Part A: one month’s wage (up to Rs 15,000) in instalments to first-time EPFO-registered employees.
• Part C: reimbursement of employer’s EPFO contribution (up to Rs 3,000/month) for two years for additional hiring.
• Delivery is through EPFO via DBT to Aadhaar-seeded accounts and the Universal Account Number (UAN).
• EPFO: a statutory body under the Employees’ Provident Funds and Miscellaneous Provisions Act, 1952.
• PLFS (Periodic Labour Force Survey): official source for unemployment, LFPR and worker-population ratio.
• Formal vs informal employment: formal jobs carry social-security cover such as EPF and ESI.
• LFPR (Labour Force Participation Rate) and the unemployment rate as key labour indicators.
• Total scheme outlay roughly Rs 99,446 crore, targeting about 3.5 crore jobs.

Mains Relevance

GS Paper 3

• Inclusive growth and employment: ELI as a tool to translate growth into formal job creation, and the limits of incentive-led schemes.
• Resource mobilisation and government budgeting: design and fiscal cost of a Rs 99,446 crore wage-subsidy programme and its expected returns.
• Effects of policies on the formalisation of the workforce, social-security coverage, and the reliability of EPFO data as a jobs proxy.

Essay

• Decent work and dignity: jobs as the bridge between economic growth and social justice.

Background and Context

Why employment is the policy fault line

ELI exists because growth alone has not delivered enough quality formal jobs.

• India’s demographic dividend needs millions of new jobs each year, yet much of the workforce remains in informal, low-productivity work.
• The jobless-growth critique argues that output can rise without a matching rise in formal, secure employment.
• Formal jobs bring social-security cover (EPF, ESI), written contracts and stable incomes, unlike most informal work.
• Raising the Labour Force Participation Rate, especially for women, is a parallel structural challenge.
• ELI is a demand-side response: it pays to create and take up formal jobs, rather than only training workers.

What the ELI scheme is

ELI is a wage-and-contribution incentive announced in Union Budget 2024-25 to spur formal hiring.

• Announced as one of the Prime Minister’s package of schemes for employment and skilling, alongside an internship initiative.
• Implemented by the Ministry of Labour and Employment, with EPFO as the delivery backbone.
• Total outlay is about Rs 99,446 crore, with a stated aim of supporting close to 3.5 crore jobs over two years.
• Benefits are credited through DBT into Aadhaar-seeded accounts, reducing leakage and middlemen.
• Eligibility hinges on EPFO registration, so each beneficiary also enters the formal social-security net.

The three parts, decoded

ELI works through three components, each targeting a different actor in the labour market.

• Part A (first-timers): one month’s wage, up to Rs 15,000, paid in instalments to employees newly registered with EPFO, subject to a wage ceiling.
• Part B (job creation in manufacturing): incentives to both employees and employers for additional employment, with a focus on the manufacturing sector.
• Part C (support to employers): reimbursement of the employer’s EPFO contribution, up to Rs 3,000 per month, for two years for each additional worker hired.
• Part A rewards workers entering the formal fold; Parts B and C cut the cost of hiring for firms.
• By splitting incentives across worker and employer, the scheme tries to lift both labour supply and demand.

EPFO as channel and as a jobs proxy

EPFO sits at the centre of ELI, both as a payment route and as a measuring stick.

• EPFO administers the provident fund for organised-sector workers under the EPF and MP Act, 1952.
• Routing benefits through EPFO ensures each beneficiary holds a UAN and a verifiable formal-employment record.
• Monthly EPFO payroll additions are widely cited as a proxy for net formal-job creation.
• The proxy has limits: it captures formalisation of existing jobs and re-joiners, not only brand-new employment.
• ELI is likely to boost EPFO enrolment, which makes payroll data more useful but also harder to read in isolation.

Reading the data: PLFS and the jobs debate

ELI must be assessed against the wider labour statistics, not its own disbursal numbers alone.

• The Periodic Labour Force Survey (PLFS) is the official survey for unemployment, LFPR and the worker-population ratio.
• Headline unemployment can look modest while underemployment and low-quality informal work remain widespread.
• Real success means a rising share of formal, social-security-covered jobs, not just a one-time subsidy outlay.
• Critics warn wage subsidies may fund hiring that would have happened anyway, the deadweight problem.
• Supporters argue the formalisation nudge and lower hiring costs can shift firm behaviour at the margin.

How ELI fits the wider policy stack

ELI is one piece of a layered strategy spanning skilling, manufacturing and social security.

• It complements supply-side efforts such as Skill India and apprenticeship and internship schemes.
• Part B’s manufacturing tilt aligns with the Make in India and production-linked push to grow factory jobs.
• Formalisation through EPFO dovetails with the labour-code agenda on social security and the e-Shram registry for unorganised workers.
• The scheme leans on existing DBT and Aadhaar plumbing, keeping delivery costs low.
• Its fiscal cost must be weighed against the Budget’s wider resource-mobilisation and consolidation goals.

Way Forward

Target net new jobs, not churn

• Tie incentives tightly to verifiable additional employment to limit deadweight and re-labelling of existing jobs.
• Audit EPFO additions against PLFS trends to confirm genuine formal-job creation.

Pair demand-side cash with supply-side skills

• Sequence ELI with skilling and apprenticeship so subsidised hires are job-ready and stay employed.
• Extend attention to women’s participation and to MSMEs that generate the bulk of jobs.

Build in evaluation and sunset clauses

• Set clear outcome metrics and independent evaluation before scaling or extending the outlay.
• Plan a credible exit so firms do not become permanently dependent on wage subsidies.

Conclusion

The first ELI payouts turn a Budget announcement into cash in workers’ and employers’ accounts, and that is the real test of any scheme. By rewarding first-time formal employees and the firms that hire additional staff, ELI attacks two problems at once: weak formal-job creation and a workforce still largely outside the social-security net.

For the exam, the durable lesson is to read ELI as a demand-side, formalisation-linked labour policy and to judge it against PLFS and EPFO data rather than disbursal headlines. Its success will depend on whether the incentives create genuinely new, lasting formal jobs, and whether they are matched by skilling, women’s participation and a credible exit plan.

UPSC Practice Questions

Prelims MCQ 1

With reference to the Employment Linked Incentive (ELI) Scheme, consider the following statements:

1. It was announced in the Union Budget 2024-25 as part of an employment-and-skilling package.
2. Its benefits are delivered through the Employees’ Provident Fund Organisation (EPFO).
3. It provides incentives only to employers and not to employees.

How many of the above statements are correct?

(a) Only one (b) Only two (c) All three (d) None

Answer: (b) Only two

Explanation:

Statements 1 and 2 are correct: ELI was announced in the Union Budget 2024-25 and is delivered through EPFO via DBT. Statement 3 is wrong, the scheme incentivises both employees (Part A pays first-time formal workers) and employers (Parts B and C), so it is not employer-only.

Prelims MCQ 2

The ‘first-timers’ component of the ELI Scheme primarily provides which of the following?

(a) A pension to retired organised-sector workers (b) One month’s wage, subject to a ceiling, to newly EPFO-registered employees (c) An interest subsidy on education loans for new graduates (d) A capital subsidy to set up new manufacturing units

Answer: (b) One month's wage, subject to a ceiling, to newly EPFO-registered employees

Explanation:

Part A of ELI gives first-time EPFO-registered employees one month’s wage (up to Rs 15,000) in instalments, subject to a wage ceiling. The other options describe pension, education-loan and capital-subsidy measures that are not the first-timers benefit.

UPSC Mains Questions

1. The Employment Linked Incentive scheme seeks to use wage and contribution subsidies to spur formal job creation. Critically examine its design and the challenges in ensuring it creates genuinely new, lasting jobs. (250 words)
2. Discuss how EPFO payroll data and the Periodic Labour Force Survey can be used together to assess the success of employment schemes such as ELI. What are the limitations of each? (250 words)

Sources: PIB, Ministry of Labour & Employment and The Hindu (National).

Frequently Asked Questions

Why in News?

Union Agriculture Minister Shivraj Singh Chouhan announced that the Centre has approved procurement of pulses and oilseeds in four states under the Price Support Scheme (PSS), a step framed as protecting farmer incomes and stabilising prices during the marketing season.

The move sits inside the wider PM-AASHA umbrella and the government’s twin goals of aatmanirbharta in pulses and reduced dependence on imported edible oils, making it a useful peg for the agriculture and economy sections of the syllabus.

• Centre sanctioned PSS procurement of pulses and oilseeds in four states, as announced by Minister Shivraj Singh Chouhan via PIB.
• Procurement happens at the notified Minimum Support Price (MSP) through central nodal agencies NAFED and NCCF.
• PSS is a sub-scheme of the PM-AASHA framework covering oilseeds, pulses and copra.
• Action ties into the push for pulses self-sufficiency by around 2027-28 and lower edible-oil import reliance.
• Procurement ceilings for tur, urad and masur have been relaxed to encourage acreage and assure farmers of an exit at MSP.

The development matters in the context of:

• India imports roughly 57-60% of its edible oil, one of the largest food-import bills in the economy.
• Pulses output has risen but domestic demand still leaves a recurring gap met partly through imports.

UPSC Relevance

Prelims Relevance

• PSS is a component of the PM-AASHA umbrella scheme for oilseeds, pulses and copra.
• NAFED and NCCF are the central nodal agencies for PSS procurement.
• MSP is recommended by the Commission for Agricultural Costs and Prices (CACP), an attached office of the Agriculture Ministry.
• MSP is announced for 23 crops each season.
• PM-AASHA has three legs: PSS, Price Deficiency Payment Scheme (PDPS) and a private procurement pilot.
• Market Intervention Scheme (MIS) covers perishable horticultural and other commodities outside MSP.
• Standard PSS procurement ceiling is 25% of state production, since relaxed to 100% for tur, urad and masur.
• NMEO-Oilseeds targets higher domestic oilseed output to cut edible-oil imports.
• India imports about 57-60% of edible oil needs.

Mains Relevance

GS Paper 3

• MSP-linked procurement as an instrument of farmer income support and price stabilisation, and its fiscal and market-distortion trade-offs.
• Strategies for aatmanirbharta in pulses and edible oils, linking PSS, NMEO-Oilseeds and crop diversification.
• Role of buffer stocking and nodal agencies (NAFED, NCCF) in stabilising volatile pulse and oilseed prices.

Essay

• Food security and the farmer: balancing assured prices with market efficiency.
• Self-reliance in a globalised food economy.

Background and Context

What the Price Support Scheme is

PSS is the government’s instrument to buy notified crops directly from farmers when market prices slide toward or below the MSP.

• PSS covers oilseeds, pulses and copra, with procurement at the announced MSP when market prices fall below it.
• Procurement is carried out by central nodal agencies NAFED and NCCF, on behalf of the Department of Agriculture and Farmers Welfare.
• States must request PSS and share part of the operational responsibility, which is why approvals are issued state by state and crop by crop.
• The aim is to give farmers an assured floor price, discourage distress sales, and keep growers planting pulses and oilseeds.

Where PSS sits in PM-AASHA

PSS is one leg of the broader PM-AASHA architecture rolled out to make MSP support more effective for non-cereal crops.

• PM-AASHA (Pradhan Mantri Annadata Aay SanraksHan Abhiyan) is the umbrella for protecting producer incomes in oilseeds, pulses and copra.
• It has three components: PSS (physical procurement), PDPS (cash payment of the price gap without buying the crop), and a private procurement and stockist pilot.
• Under PDPS, the farmer sells in the open market and the government pays the difference between MSP and the sale price, so no physical stock is built.
• A state typically opts for either PSS or PDPS for a given oilseed in a season, not both.

MSP and the CACP framework

All these schemes rest on the MSP, the announced floor price that anchors farmer expectations each season.

• MSP is recommended by the Commission for Agricultural Costs and Prices (CACP) and notified by the government for 23 crops.
• The crop basket spans cereals, pulses, oilseeds and commercial crops across the kharif and rabi seasons.
• MSP is announced before sowing to guide cropping choices, but it becomes meaningful only when backed by actual procurement.
• For pulses and oilseeds, market prices often dip below MSP, which is exactly where PSS procurement steps in.

The relaxed procurement ceiling for pulses

A recent design change sharply raised how much of a state’s pulse crop the Centre will buy.

• The usual PSS limit was about 25% of a state’s production of the notified crop in a season.
• For tur (arhar), urad and masur, the government has relaxed this to 100% procurement to push self-sufficiency.
• Assured full buyback signals farmers that expanded acreage in these pulses will not be punished by a price crash.
• The relaxation is a clear policy nudge toward aatmanirbharta in pulses, targeted around 2027-28.

Edible-oil dependence and NMEO-Oilseeds

The oilseeds half of the announcement matters because India’s edible-oil import bill is among its largest food vulnerabilities.

• India imports an estimated 57-60% of its edible oil, leaving consumers exposed to global price swings.
• The National Mission on Edible Oils-Oilseeds (NMEO-Oilseeds) aims to lift domestic oilseed output and crushing capacity.
• PSS procurement of oilseeds at MSP complements NMEO by assuring growers a market, encouraging a shift toward soybean, mustard, groundnut and sunflower.
• Reducing import dependence is framed as both a food-security and a current-account concern.

PSS versus PDPS versus MIS

Aspirants frequently confuse the three intervention tools, so it helps to keep their scope distinct.

• PSS: physical procurement of pulses, oilseeds and copra at MSP by NAFED and NCCF.
• PDPS: no procurement; the government pays farmers the gap between MSP and the actual sale price for select oilseeds.
• MIS (Market Intervention Scheme): covers perishable and horticultural commodities outside MSP, such as onion, potato and certain fruits, when prices crash.
• All three protect farmer incomes but differ in commodity coverage and method of support.

Way Forward

Make procurement reach the small farmer

• Expand registration and procurement centres so smallholders, not just large growers, can sell at MSP.
• Use digital portals and direct benefit transfer to cut delays in payment and reduce middleman leakage.

Pair price support with productivity

• Combine PSS with quality seed, irrigation and crop-diversification incentives so support raises output, not just prices.
• Strengthen buffer-stock management by NAFED and NCCF to release pulses during price spikes and stabilise consumer markets.

Sustain the self-sufficiency drive

• Keep the 100% buyback for key pulses credible season after season to anchor farmer confidence.
• Align NMEO-Oilseeds with PSS so the edible-oil import bill falls without distorting cropping patterns.

Conclusion

PSS procurement of pulses and oilseeds in four states is a routine-sounding administrative step that carries real strategic weight. It connects the day-to-day assurance of MSP to the larger objectives of farmer income protection, pulses self-sufficiency and a smaller edible-oil import bill.

For the exam, the value lies in placing this news inside its durable framework: PSS as a leg of PM-AASHA, the role of NAFED and NCCF, the distinction from PDPS and MIS, and the policy logic of relaxed procurement ceilings. Whether the scheme delivers will depend on how widely procurement actually reaches the small farmer and how well it is paired with productivity gains.

UPSC Practice Questions

Prelims MCQ 1

With reference to the Price Support Scheme (PSS) and PM-AASHA, consider the following statements:

1. PSS provides for physical procurement of pulses, oilseeds and copra at the Minimum Support Price.
2. The Price Deficiency Payment Scheme (PDPS) involves direct procurement of crops by central agencies.
3. NAFED and NCCF act as central nodal agencies for PSS procurement.

How many of the above statements are correct?

(a) Only one (b) Only two (c) All three (d) None

Answer: (b) Only two

Explanation:

Statements 1 and 3 are correct. PSS is physical procurement of pulses, oilseeds and copra at MSP, with NAFED and NCCF as nodal agencies. Statement 2 is wrong: under PDPS there is no procurement; the government pays farmers the gap between MSP and the actual sale price.

Prelims MCQ 2

Which of the following commodities is typically supported through the Market Intervention Scheme (MIS) rather than the Price Support Scheme?

(a) Tur (arhar) (b) Mustard (c) Onion (d) Copra

Answer: (c) Onion

Explanation:

MIS covers perishable and horticultural commodities outside the MSP framework, such as onion and potato, when prices crash. Tur, mustard and copra are pulses/oilseeds/copra supported under PSS at MSP.

UPSC Mains Questions

1. Examine how the Price Support Scheme, as a component of PM-AASHA, advances India’s goals of farmer income protection and self-sufficiency in pulses and edible oils. What are its key limitations? (250 words)
2. Distinguish between the Price Support Scheme, the Price Deficiency Payment Scheme and the Market Intervention Scheme, and assess which model best protects small and marginal farmers. (250 words)

Sources: PIB, Ministry of Agriculture & Farmers Welfare and Ministry of Agriculture & Farmers Welfare.

Frequently Asked Questions

Why in News?

The Indian Coast Guard (ICG) has strengthened its operational reach by inducting an indigenously built Air Cushion Vehicle (ACV), commonly known as a hovercraft. The Press Information Bureau, releasing details through the Ministry of Defence, framed the induction as a step that deepens India’s coastal security architecture while advancing self-reliance in defence production.

An ACV rides on a cushion of air rather than displacing water, which lets it operate in shallow waters, creeks, mudflats and sandbanks where conventional patrol boats cannot venture. For UPSC, the story links a single platform to durable themes — Atmanirbhar Bharat in defence, the post-26/11 layered coastal-security grid, and the role of the ICG as the maritime force guarding India’s near-shore zone.

• The Indian Coast Guard inducted an indigenously built Air Cushion Vehicle (hovercraft), per PIB / Ministry of Defence.
• The ACV is an amphibious craft that operates over shallow water, mudflats, creeks and sandbanks unreachable by conventional vessels.
• Its roles include shallow-water surveillance, anti-smuggling patrol, search-and-rescue and policing inaccessible stretches of coastline.
• The induction reflects the Make in India and positive indigenisation push, with defence production at record levels.
• It reinforces the multi-layered coastal security framework built up after the 26/11 Mumbai attacks.

The development matters in the context of:

• India has a coastline of about 11,098 km (including island territories), much of it shallow and difficult to patrol.
• The ICG functions under the Ministry of Defence and is often called India’s fourth armed force.

UPSC Relevance

Prelims Relevance

• Air Cushion Vehicle (ACV) / hovercraft — amphibious craft riding on a cushion of air; works in shallow water and over land/mudflats.
• Indian Coast Guard — raised 1978; armed force under the Ministry of Defence.
• ICG mandate flows from the Coast Guard Act, 1978.
• 26/11 (2008) attacks triggered the overhaul of coastal security.
• Sagar Prahari Bal — Navy force for harbour and near-shore protection.
• IMAC (Information Management and Analysis Centre) — nerve centre of the NC3I coastal surveillance network.
• Coastal radar chain — static sensor network for near-shore domain awareness.
• Marine Police — first layer of the three-tier coastal security grid (Marine Police, Coast Guard, Navy).
• Positive Indigenisation Lists — items barred from import to push domestic manufacture.
• ICG motto: Vayam Rakshamah (We Protect).

Mains Relevance

GS Paper 3

• Indigenisation of defence manufacturing under Atmanirbhar Bharat — achievements, dependencies and gaps.
• Role of science and technology in strengthening internal and coastal security platforms.
• Coastal security challenges along India’s long shoreline — smuggling, infiltration, IUU fishing and disaster response.
• Inter-agency coordination among Navy, Coast Guard and Marine Police in the layered security grid.

Essay

• Self-reliance and national security: building capability at home.
• Technology as the frontier of a nation’s defence.

Background and Context

What an Air Cushion Vehicle is

An ACV is a hybrid craft that floats on a layer of pressurised air, making it amphibious in a way ordinary boats are not.

• It uses powerful fans to trap a cushion of air beneath the hull, held in by a flexible skirt, lifting the craft clear of the surface.
• Because it does not rely on buoyancy in deep water, it can move over shallow water, mud, sand and marsh with minimal friction.
• Propellers or ducted fans drive it forward, giving high speed across mixed terrain that mixes water and land.
• This amphibious quality is the core advantage: it reaches creeks, mudflats and sandbanks that beach conventional patrol boats.
• Limitations include sensitivity to high winds and rough seas, and higher noise and fuel demands than displacement hulls.

Operational role for the Coast Guard

The hovercraft fills a specific gap in near-shore patrolling that larger ships and small boats both miss.

• Shallow-water surveillance of creeks and tidal zones used by smugglers and traffickers.
• Anti-smuggling and anti-infiltration patrols in low-tide areas where conventional craft run aground.
• Search-and-rescue in flood-hit and marshy coastal belts where speed across mixed terrain saves lives.
• Reaching remote and inaccessible coastline, including island fringes and estuaries.
• Support during natural disasters — cyclones and floods — where amphibious mobility is decisive.

The Indian Coast Guard

The ICG is the maritime force charged with protecting India’s interests in its near-shore and exclusive economic zone.

• Raised in 1978 under the Coast Guard Act, 1978; functions under the Ministry of Defence.
• Often described as India’s fourth armed force, alongside the Army, Navy and Air Force.
• Mandate covers maritime law enforcement, search-and-rescue, marine environment protection and anti-smuggling.
• After the 26/11 Mumbai attacks (2008), the ICG was designated the agency responsible for overall coastal security in territorial waters.
• Its expansion of platforms — patrol vessels, aircraft and now ACVs — tracks the widening of its near-shore role.

Atmanirbhar Bharat in defence

An indigenously built ACV is a small but telling marker of India’s drive to make rather than import military hardware.

• Make in India and Atmanirbhar Bharat aim to cut import dependence and build a domestic defence industrial base.
• Positive Indigenisation Lists bar phased import of specified items, reserving them for Indian manufacturers.
• India’s annual defence production and defence exports have climbed to record highs in recent years.
• Domestic shipbuilding for the Navy and Coast Guard is a flagship of the indigenisation effort.
• Each home-built platform deepens design, integration and maintenance capability and shrinks lifecycle import costs.

The layered coastal security grid

India’s coastal defences are organised as concentric layers of agencies and sensors after the 2008 attacks exposed gaps.

• Three-tier patrolling: Marine Police close to shore, Coast Guard in territorial waters, Navy further out.
• Sagar Prahari Bal — a dedicated Navy force for harbour and base protection.
• NC3I network with the Information Management and Analysis Centre (IMAC) at Gurugram fusing maritime data.
• A nationwide coastal radar chain provides static surveillance of the near-shore zone.
• Vessel tracking, fishermen registration and biometric ID cards plug the human and small-craft gaps.

Why a long coastline raises the stakes

India’s geography makes coastal security a permanent, high-effort task rather than a one-time fix.

• A coastline of roughly 11,098 km spans nine states and several union territories, with island chains far offshore.
• Vast stretches of creeks and tidal flats create natural blind spots for conventional patrolling.
• Threats range from terror infiltration and arms or drug smuggling to illegal fishing and people trafficking.
• Climate-driven cyclones and floods add a recurring disaster-response burden along the coast.
• Amphibious platforms like the ACV directly address the shallow-water blind spots in this picture.

Way Forward

Build depth in indigenous platforms

• Scale domestic production of ACVs and patrol craft with a stable order pipeline for Indian yards.
• Invest in R&D for quieter, fuel-efficient and rough-sea-capable hovercraft designs.

Tighten the security grid

• Integrate ACV patrol data into the NC3I / IMAC common operating picture.
• Deepen joint drills among Coast Guard, Navy and Marine Police to close coordination gaps.

Leverage technology

• Pair near-shore craft with drones, radar and satellite surveillance for fuller coastal domain awareness.
• Strengthen maintenance and crew-training ecosystems so indigenous fleets stay mission-ready.

Conclusion

The induction of an indigenously built Air Cushion Vehicle is a modest headline that carries a larger story. A single amphibious craft closes a real operational gap — the shallow creeks and mudflats where conventional boats cannot follow — while signalling that India is increasingly building its security hardware rather than buying it.

For the Coast Guard, it extends a post-26/11 architecture that now stretches from marine police boats to radar chains and data-fusion centres. For the wider story of Atmanirbhar Bharat, it is one more proof point that self-reliance in defence is being assembled platform by platform, coastline included.

UPSC Practice Questions

Prelims MCQ 1

With reference to the Indian Coast Guard, consider the following statements:

1. It was raised in 1978 and functions under the Ministry of Defence.
2. It was designated the agency responsible for overall coastal security in territorial waters after the 26/11 Mumbai attacks.
3. It is a paramilitary force placed under the Ministry of Home Affairs.

How many of the above statements are correct?

(a) Only one (b) Only two (c) All three (d) None

Answer: (b) Only two

Explanation:

Statements 1 and 2 are correct: the ICG was raised in 1978 under the Coast Guard Act, 1978, functions under the Ministry of Defence, and was made the nodal agency for coastal security in territorial waters after 26/11. Statement 3 is wrong — the ICG is an armed force under the Ministry of Defence, not a paramilitary force under the Home Ministry.

Prelims MCQ 2

An Air Cushion Vehicle (hovercraft) is best described as a platform that:

(a) Operates only in deep open-sea waters (b) Is amphibious and rides on a cushion of air, enabling movement over shallow water and mudflats (c) Is a submersible designed for underwater surveillance (d) Relies solely on hull buoyancy like a conventional patrol boat

Answer: (b) Is amphibious and rides on a cushion of air, enabling movement over shallow water and mudflats

Explanation:

A hovercraft traps a cushion of pressurised air beneath a flexible skirt to lift clear of the surface, making it amphibious. This lets it cross shallow water, creeks, sand and mud where displacement-hull boats run aground. It is neither a deep-sea-only vessel nor a submersible.

UPSC Mains Questions

1. Indigenously built platforms such as the Coast Guard’s Air Cushion Vehicle are often cited as markers of Atmanirbhar Bharat in defence. Examine the achievements and persisting gaps in India’s defence indigenisation drive. (250 words)
2. Discuss the structure of India’s multi-layered coastal security architecture put in place after the 26/11 attacks, and assess how new platforms strengthen near-shore surveillance. (250 words)

Sources: Press Information Bureau (PIB), Ministry of Defence and Indian Coast Guard.

Frequently Asked Questions

Why in News?

A fresh split inside a major regional party has put the spotlight back on the anti-defection law and one of its most contested questions: when does a group of legislators count as a valid merger rather than a defection? Indian Express, in its Explained section, set out what the law actually says about mergers and what it leaves unaddressed, while The Hindu tracked the political fallout of the breakaway faction.

The trigger is a split in the Trinamool Congress (TMC), where a section of legislators has moved away from the parent party. Because the Tenth Schedule no longer recognises a ‘split’ as a defence, the breakaway group’s survival now turns on whether it can satisfy the strict merger conditions, and on how quickly the presiding officer decides any disqualification petitions.

• A faction of TMC legislators has broken away, reopening debate on the merger exception under the Tenth Schedule.
• The Constitution dropped the ‘split’ defence in 2003, so one-third breakaways are no longer protected.
• Validity of any merger now hinges on the two-thirds rule and the role of the original political party.
• The case again exposes the problem of delay by the Speaker in deciding disqualification petitions.

The development matters in the context of:

• The anti-defection law was added to curb the ‘Aaya Ram, Gaya Ram’ culture of mass floor-crossing for office.
• Repeated splits and defections in state assemblies have made the merger clause a recurring legal flashpoint.

UPSC Relevance

Prelims Relevance

• Tenth Schedule inserted by the 52nd Amendment Act, 1985.
• 91st Amendment Act, 2003 deleted the ‘split’ provision (old Paragraph 3).
• Two grounds for disqualification: voluntarily giving up membership; defying the party whip.
• Merger exception under Paragraph 4 of the Tenth Schedule.
• Merger requires two-thirds of the legislature party to agree.
• The Speaker/Chairman is the adjudicating authority on defection.
• Kihoto Hollohan v. Zachillhu (1992) upheld the Schedule, allowed judicial review.
• Keisham Meghachandra Singh (2020) on delay and an independent tribunal.
• Recommendations: Dinesh Goswami Committee; Law Commission 170th Report.

Mains Relevance

GS Paper 2

• Tenth Schedule and the tension between party discipline and a legislator’s freedom of conscience.
• Role and neutrality of the Speaker as the adjudicating authority on defection petitions.
• Judicial review of presiding officers’ decisions and the problem of indefinite delay.
• Reform options: independent tribunal, fixed timelines, or shifting adjudication to the ECI/judiciary.

Essay

• Defection, opportunism and the erosion of trust in representative democracy.

Background and Context

What the anti-defection law is

The law sits in the Tenth Schedule of the Constitution and targets legislators who switch sides after election.

• The Tenth Schedule was inserted by the 52nd Amendment Act, 1985 to check the culture of frequent floor-crossing summed up in the phrase ‘Aaya Ram, Gaya Ram’.
• It applies to members of Parliament and of state legislatures, covering both elected and nominated members under defined conditions.
• A member can be disqualified on two main grounds: if they voluntarily give up the membership of their party, or if they vote (or abstain) against the party whip without prior permission and without the action being condoned within a set period.
• ‘Voluntarily giving up membership’ is read widely by courts and need not mean a formal resignation; conduct alone can amount to it.

Why the 'split' defence disappeared

The original law let one-third of a party break away as a ‘split’ without disqualification, but that loophole was closed.

• As originally enacted, Paragraph 3 protected a ‘split’ where at least one-third of a legislature party broke away.
• This was misused: groups engineered one-third breakaways to topple or prop up governments while escaping disqualification.
• The 91st Amendment Act, 2003 deleted the split provision entirely, so a one-third breakaway is no longer a defence.
• After 2003, the only safe exit for a group of legislators is a valid merger under Paragraph 4.

The merger exception explained

A merger is the one route by which legislators can change affiliation as a bloc and still keep their seats.

• Paragraph 4 of the Tenth Schedule exempts a merger from disqualification, but only when strict conditions are met.
• There must be a merger of the original political party with another party, and not less than two-thirds of the members of the legislature party must agree to that merger.
• Members who go with the merger, and those who stay with the old party, are both protected from disqualification.
• A practical dispute is whether the original political party must actually merge at the organisational level, or whether agreement by two-thirds of the legislature wing alone is enough. Several court rulings stress that a genuine merger of the parent party is required.
• This makes the merger clause hard to satisfy: a faction needs both the numbers and a real party-level merger to escape disqualification.

Who decides, and judicial review

Disqualification is decided not by a court in the first instance but by the presiding officer of the House.

• The Speaker of the Lok Sabha or Assembly, or the Chairman of the Council, is the adjudicating authority on defection petitions.
• In Kihoto Hollohan v. Zachillhu (1992), the Supreme Court upheld the Tenth Schedule but read down the clause that barred courts from intervening.
• The Court held that while acting under the Schedule, the Speaker functions as a tribunal, and the decision is open to judicial review on grounds such as mala fides, perversity or violation of natural justice.
• Courts generally do not intervene before the Speaker decides, which lets presiding officers control the timing of outcomes.

The problem of delay

Because the Speaker controls timing, petitions can be left undecided for years, defeating the law’s purpose.

• Speakers belong to the ruling side, raising doubts about neutrality when defectors support the government.
• Pending petitions can outlast a full Assembly term, so disqualification becomes meaningless even if it eventually comes.
• In Keisham Meghachandra Singh v. Speaker, Manipur (2020), the Supreme Court flagged this gap and suggested that Parliament consider an independent tribunal outside the Speaker’s office.
• The Court also indicated that defection petitions should ordinarily be decided within about three months, barring exceptional circumstances.

Reform proposals over the years

Several committees and commissions have suggested ways to make adjudication faster and more impartial.

• The Dinesh Goswami Committee on electoral reforms recommended that the decision on disqualification be taken by the President or Governor on the advice of the Election Commission rather than the Speaker.
• The Law Commission’s 170th Report and later work pushed for tighter rules and a more neutral deciding authority.
• Suggestions include shifting adjudication to the judiciary or a dedicated tribunal, and fixing a strict timeline for decisions.
• There is also debate about limiting whips to confidence motions and money bills, so that the law does not crush every dissenting vote.

Way Forward

Fix the deciding authority

• Move adjudication from the Speaker to an independent body such as a tribunal headed by a retired judge, or to the Election Commission, to reduce the partisanship problem.
• Make the deciding authority’s process transparent, with reasoned and published orders.

Enforce strict timelines

• Legislate a firm time limit for deciding petitions, in line with the Supreme Court’s suggested three-month benchmark.
• Treat unexplained delay as a ground for courts to step in earlier.

Clarify and calibrate the law

• Spell out clearly that a valid merger needs a genuine merger of the original political party, not just the legislature wing.
• Limit the binding force of the whip to crucial votes so genuine dissent is not penalised as defection.

Conclusion

The current split is a reminder that the anti-defection law has shifted, not removed, the politics of floor-crossing. By scrapping the split defence and leaving the narrow merger window, the 91st Amendment made bloc exits harder, yet the law’s real weakness now lies in who decides and how fast.

Genuine reform has to address the Speaker’s dual role and the chronic delay in adjudication. An independent authority bound by firm timelines, paired with a clearer merger test, would let the Tenth Schedule serve its original aim of stable, principled politics rather than becoming a tool that rewards whoever controls the clock.

UPSC Practice Questions

Prelims MCQ 1

With reference to the Tenth Schedule of the Constitution, consider the following statements:

1. It was inserted by the 52nd Constitutional Amendment Act, 1985.
2. The 91st Amendment Act, 2003 added a ‘split’ exception to protect one-third breakaways.
3. A merger is exempt from disqualification only if not less than two-thirds of the legislature party agree.

How many of the above statements are correct?

(a) Only one (b) Only two (c) All three (d) None

Answer: (b) Only two

Explanation:

Statements 1 and 3 are correct. The Tenth Schedule was added by the 52nd Amendment Act, 1985, and Paragraph 4 exempts a merger backed by at least two-thirds of the legislature party. Statement 2 is wrong: the 91st Amendment Act, 2003 deleted the ‘split’ provision, it did not add one.

Prelims MCQ 2

In which case did the Supreme Court hold that the Speaker, while deciding defection cases under the Tenth Schedule, acts as a tribunal whose decisions are subject to judicial review?

(a) S.R. Bommai v. Union of India (b) Kihoto Hollohan v. Zachillhu (c) Keisham Meghachandra Singh v. Speaker, Manipur (d) Indira Sawhney v. Union of India

Answer: (b) Kihoto Hollohan v. Zachillhu

Explanation:

In Kihoto Hollohan v. Zachillhu (1992), the Court upheld the Tenth Schedule, held that the Speaker functions as a tribunal while deciding defection petitions, and made that decision open to judicial review. The Keisham Meghachandra Singh case (2020) dealt mainly with delay and the case for an independent tribunal.

UPSC Mains Questions

1. The merger exception is the only surviving defence under the anti-defection law after 2003. Examine the conditions for a valid merger under the Tenth Schedule and the problems that arise in applying it. (250 words)
2. Delay by the Speaker in deciding defection petitions has weakened the anti-defection law. Critically evaluate the role of the presiding officer and suggest reforms to make adjudication fair and timely. (250 words)

Sources: Indian Express and The Hindu.

Frequently Asked Questions