GS Analyst: Daily Current Affairs

In January, India’s Foreign Secretary Vikram Misri visited China and held meetings with key Chinese officials. This visit reflects the complexity of China’s foreign policy, where both state and Communist Party structures play crucial roles. Unlike India, where government bodies function independently from political parties, China’s Communist Party (CPC) dominates all state institutions, including foreign policy.

Who Makes Foreign Policy Decisions in China?

• Politburo Standing Committee (PBSC) - The Supreme Authority: PBSC sets the overall foreign policy direction. It is led by President Xi Jinping, who has ultimate control over decisions.
• Central Foreign Affairs Commission (FAC) - Core Policy Body: It manages foreign policy coordination and inter-departmental communication. It is headed by Xi Jinping with Premier Li Qiang as Deputy Head. The FAC Office gathers intelligence, sets the agenda, and recommends policy actions to top leaders.
• Key Institutions Handling China’s Foreign Relations
  • International Liaison Department (IDCPC) - CPC’s Global Outreach: It engages with political parties in 150+ countries, including India.
• It is organized into regional bureaus (e.g., South & Southeast Asian Affairs).
• It aims to enhance CPC’s legitimacy and supplement traditional diplomacy.
  • United Front Work Department (UFWD) - Influence Operations: It manages relations with Chinese diaspora, Hong Kong, and Taiwan.
• It influences global narratives on Tibet and Xinjiang.
• It engages with foreign intellectuals to shape China’s international image.
  • Ministry of Foreign Affairs (MFA) - The Official Diplomatic Arm: It functions under the State Council, but with lower hierarchy than CPC organs. It is responsible for executing foreign policy decisions.

Key Takeaways for India’s Diplomacy

• Engaging China requires dealing with both party and state actors.
• CPC plays a central role in shaping China’s foreign policy.
• Xi Jinping’s leadership has strengthened the role of CPC bodies over traditional state institutions.
• Indian policymakers need to understand CPC’s structures like IDCPC and UFWD to navigate bilateral relations effectively.

The Supreme Court of India directed the Solicitor General (SG) Tushar Mehta to suggest regulatory measures to curb the use of "filthy language" and "vulgarity" in online content, particularly in comedy shows and podcasts. The court emphasized the need to differentiate between humour and perversity while maintaining freedom of speech.

Regulation of Online Content: The Legal Debate

• Balancing Free Speech and Regulation: Article 19(1)(a) of the Indian Constitution guarantees freedom of speech and expression. However, Article 19(2) allows reasonable restrictions on grounds like public order, morality, and decency.
• The Court aims to avoid censorship while ensuring content creators maintain ethical standards.
• Role of the Government: The Centre has been asked to propose regulatory mechanisms for online content.
• The Information Technology (Intermediary Guidelines and Digital Media Ethics Code) Rules, 2021 already regulate OTT platforms and social media, but their implementation needs strengthening.
• The Supreme Court indicated the need for a balanced approach rather than outright censorship.

A report jointly published by TransUnion CIBIL, NITI Aayog’s Women Entrepreneurship Platform (WEP), and MicroSave Consulting (MSC) highlights a significant increase in women borrowers in India. Between 2019 and 2024, credit demand from women tripled, with a 22% compounded annual growth rate (CAGR) in retail credit uptake. This surge indicates a shift in financial behavior, where more women, particularly from semi-urban and rural areas, are leveraging credit for personal and professional needs.

Key Findings of the Report

• Surge in Credit Demand & Borrowers' Profile
  • Women borrowers’ retail credit demand grew threefold from 2019 to 2024.
  • Around 60% of women borrowers availing credit are from semi-urban and rural areas.
  • Women under 30 account for 27% of retail credit uptake, lower than men (40%).
  • Women’s participation in business loans increased fourfold in the past six years.
• Sector-Wise Credit Distribution
  • Personal finance loans (home, vehicle, consumer durables, etc.): 3 crore loans worth Rs 4.8 lakh crore were availed in 2024. 42% of all loans availed by women.
  • Gold loans: 4 crore loans worth Rs 4.7 lakh crore were availed in 2024. 36% of all loans availed by women, up from 19% in 2019 (5.1x growth).
  • Business loans & commercial credit (including loans against property): 37 lakh new loan accounts opened by women. Rs 1.9 lakh crore in disbursements. Number of business loan accounts opened has grown 4.6x since 2019. However, business loans still constitute only 3% of total loans availed by women.
• Growing Awareness of Credit Health
  • 42% growth in women monitoring their credit scores, from 94 million (Dec 2023) to 26.92 million (Dec 2024).
  • Gen Z women (born mid-1990s–2010s) lead credit monitoring, with a 56% YoY increase.
  • Millennial women (born 1981–1996) recorded a 38% YoY increase, making up 52% of self-monitoring women.
  • Challenges: Despite the rise in financial awareness, barriers like credit aversion, poor banking experience, lack of collateral, and guarantor constraints

A new study published in Nature Climate Change highlights a 240% increase in marine heatwave (MHW) days during the summers of 2023-24, compared to historical records. MHWs affected every ocean region, causing extreme weather events, ecosystem collapses, and economic losses.

Key Findings from 2023-24 Marine Heatwaves

• Sea Surface Temperature (SST) Records: 10% of global oceans recorded highest-ever SSTs. SSTs were four times higher than the annual historical average.
• Extreme Weather Events Triggered:
  • United Kingdom, North America & Japan: Heatwaves
  • Ecuador, Libya, Japan, Australia: Severe flooding
• Atlantic Hurricane Season: Near-record number of storms (cyclones)
  • Cyclone Gabrielle (New Zealand)
  • Cyclone Mocha (Bay of Bengal, May 2023)
  • Cyclone Remal (Bay of Bengal, May 2024)
• Long-Term Projections for the Indian Ocean
  • Past Warming Rate (1950-2020): 2°C per century
  • Future Warming Rate (2020-2100): 7°C - 3.8°C per century
• Regions at Highest Risk: Northwestern Indian Ocean (Arabian Sea)

What are marine heat waves?

• A marine heat wave is an extreme weather event.
• It occurs when the surface temperature of a particular region of the sea rises to 3 or 4 degree Celsius above the average temperature for at least five days.
• MHWs can last for weeks, months or  even years.
• Factors contributing to Marine Heat Waves:
  • Global Warming:Rise in temperatures due to Anthropogenic events, has led to an increase in global temperatures which ultimately contributes to ocean warming.
  • El Nino:Winds can enhance or suppress the warming in a marine heatwaves, and climate models like El Niño can change the likelihood of events occurring in certain regions.
  • Ocean currents:The most common drivers of marine heatwaves include ocean currents which can build up areas of warm water and air-sea heat flux, or warming through the ocean surface from the atmosphere.

Impact of MHWs in 2023-24

• Physical & Climatic Impacts: 23 records of extreme events. Cyclones, flooding, heatwaves, heavy rainfall, dam collapses
• Biological & Ecological Impacts: 43 records of ecosystem damage. Coral bleaching in Japan, Peru, and other regions
  • Fish die-offs in the Gulf of Thailand & Gulf of Mexico
  • Food web disruptions (lower phytoplankton ? decline in fish/seabird populations)
  • North Atlantic species moving to the Arctic (Oct 2023)
  • Whale & dolphin strandings (South Pacific, Jan 2024)
  • Fan mussel (Mediterranean) threatened with extinction
• Destroying kelp forest: MHWs destroy kelp forests and fundamentally altered the ecosystem of the coast.
• Disturbs food web: MHWs also fuel the growth of invasive alien species, which can be destructive to marine food webs.

As blockchain technology and digital economies expand, global governments are working to classify, regulate, and tax Virtual Digital Assets (VDAs). In response, India’s Income Tax Bill, 2025 introduces a comprehensive tax framework for VDAs, aligning with global taxation policies followed in the U.K., U.S., Singapore, Australia, New Zealand, and the UAE.

What Are Virtual Digital Assets (VDAs)?

• Virtual Digital Assets (VDAs) include:
  • Cryptocurrencies such as Bitcoin and Ethereum
  • Non-Fungible Tokens (NFTs)
  • Other blockchain-based digital assets

What Does the Income Tax Bill, 2025 Say About VDAs?

• VDAs Are Now Classified as Property & Capital Assets
  • Section 92(5)(f) treats VDAs as taxable property, similar to real estate or stocks.
  • Section 76(1) ensures that profits from selling VDAs are taxed like capital gains.
• This classification aligns with global practices:
  • In the United Kingdom, HM Revenue & Customs (HMRC) recognizes crypto as property, subject to Capital Gains Tax.
  • New Zealand’s tax department treats crypto as taxable property.

How Are VDAs Taxed?

• A flat 30 percent tax is applied to income from VDA transfers.
• No deductions are allowed except for the cost of acquisition.
• A one percent Tax Deducted at Source (TDS) applies on all transactions, including peer-to-peer transactions.
• The TDS exemption limit is set at Rs 50,000 for small traders and Rs 10,000 for others.
  • Expenses such as mining costs, platform fees, and gas fees cannot be deducted from taxable income.
• In comparison with other countries: The United Arab Emirates allows a zero percent personal tax on VDA gains under certain conditions. The United Kingdom applies Capital Gains Tax on crypto profits.
• Undisclosed Income & Asset Seizure
  • Section 301 states that unreported VDAs will be classified as undisclosed income and taxed accordingly.
  • Section 524(1) allows the government to seize VDAs in tax raids, similar to gold or cash.
  • This aligns with global practices, such as in the United Kingdom, where courts can freeze or seize crypto assets in legal disputes.
• Mandatory Reporting of VDA Transactions
  • Section 509 mandates that crypto exchanges, wallet providers, and traders report transactions in a prescribed format to prevent money laundering and ensure transparency.
  • VDAs must be included in Annual Information Statements (AIS), which allows tax authorities to automatically track all crypto transactions.

Why Is This Important (Significance)?

• Brings VDAs under a legal and tax framework.
• Prevents misuse of digital assets for tax evasion.
• Aligns India’s tax policies with international standards.
• What’s missing?
  • There is no clear investor protection law for VDA holders.
  • A structured market regulation framework has not been introduced.
  • There are no standardized guidelines for compliance and enforcement.

India’s agricultural exports increased by 6.5 percent in April-December 2024 compared to the same period in 2023. However, agricultural imports grew much faster—by 18.7 percent—leading to a decline in India’s trade surplus in farm products. This means that while India still exports more farm goods than it imports, the gap between exports and imports is narrowing.

What is happening?

• Agricultural exports grew from 2 billion to USD37.5 billion in April-December 2024.
• Agricultural imports rose sharply from 6 billion to USD29.3 billion in the same period.
• As a result, India’s agricultural trade surplus fell from USD10.6 billion to USD8.2 billion in just one year.

Why is the Trade Surplus Shrinking?

• Exports Are Fluctuating
  • Global Prices Matter: When international food prices were high after COVID-19 and the Ukraine war, India’s exports boomed. But now that prices have fallen slightly, exports have also declined.
  • Government Policies: India restricted exports of wheat and sugar to protect domestic supply, which reduced export earnings.
  • Some Commodities Still Growing:
    • Basmati rice, spices, coffee, and tobacco are doing well due to strong global demand.
    • Marine exports (shrimp and seafood) have declined, especially in the US and China.
    • Sugar exports have dropped significantly due to government limits.
• Imports Are Rising
  • Edible Oils: India depends heavily on imported cooking oils like palm oil and soybean oil.
  • Pulses (Lentils, Chickpeas, etc.): Due to a poor domestic harvest, imports have surged.
  • Cotton: Once an exporter, India is now importing more cotton than it sells abroad.

What This Means for India

• India remains a net agricultural exporter, but rising imports are a concern.
• Government policies play a key role in balancing exports and domestic supply.
• Future trends will depend on global commodity prices and India’s agricultural production.

Prime Minister Narendra Modi questioned why a colonial-era law allowing the arrest of people for dancing in public places had remained for 75 years after Independence. He was referring to the Dramatic Performances Act, 1876, which was repealed in 2018.

What Was the Dramatic Performances Act, 1876?

• The Act was enacted by the British government to suppress nationalist sentiments after the visit of Prince of Wales Albert Edward (1875-76).
• It allowed authorities to ban public plays, pantomimes, and dramas that were:
  • Scandalous or defamatory
  • Seditious (likely to create disaffection against the government)
  • Obscene or corrupting public morality
• Punishment: Up to 3 months imprisonment, fine, or both.
• Search and Seizure: Any Magistrate could issue a warrant to search, seize, and prohibit performances.

What Happened to the Law After Independence?

• Article 372 of the Constitution allowed British-era laws to remain in force unless repealed.
• Legally Invalid Since 1956: The Allahabad High Court (May 10, 1956) struck it down in State vs. Baboo Lal & Others, ruling it violated Article 19(1)(a) (freedom of speech & expression).
• Regional Adaptations:
  • Some states like Madhya Pradesh, Karnataka, Tamil Nadu, and Delhi enacted their own versions of the law.
  • The Madras High Court struck down the Tamil Nadu version in 2013.
• Formally Repealed in 2018: The Parliament repealed it through the Repealing and Amending (Second) Act, 2017, as part of the Modi government’s drive to remove obsolete colonial laws.

The Supreme Court of India has agreed to hear a petition challenging the blocking of social media accounts and content without prior notice to the creator. The petition seeks to revoke Rule 16 of the Information Technology (Procedure and Safeguards for Blocking for Access to Information by Public) Rules, 2009, which permits the government to block content without informing the originator.

Key Issues Raised in the Petition

• Lack of Prior Notice to Content Creators: Under the 2009 Rules, only social media platforms like X (formerly Twitter) receive a notice, while the original content creators are not informed before their content is blocked.
  • This violates the principles of natural justice and the fundamental right to freedom of speech and expression (Article 19(1)(a)).
• Discretionary Power Under Rule 8 of the IT Rules, 2009: Rule 8 allows authorities discretionary power on whether or not to inform the originator. This creates "unguided discretion", leading to arbitrary blocking of content.
• Fundamental Rights Violation: Blocking content without notice infringes upon Article 19(1)(a) (freedom of speech) and Article 21 (right to life and personal liberty).
  • The lack of transparency leaves the content creator without legal recourse.

India launched the Cities Coalition for Circularity (C-3), a multi-nation alliance aimed at fostering city-to-city collaboration, knowledge-sharing, and private sector partnerships for sustainable urban development. The initiative focuses on waste management and resource efficiency, particularly in the Asia-Pacific region.

What is C-3?

• The Cities Coalition for Circularity (C-3) is a multi-nation alliance aimed at promoting sustainable urban development through city-to-city collaboration, knowledge-sharing, and private sector partnerships.
• It focuses on waste management, resource efficiency, and circular economy principles in urban areas, particularly in the Asia-Pacific region.
  • Objectives of C-3
• Facilitate city-to-city collaboration for sustainable urban practices.
• Promote circular economy principles (Reduce, Reuse, Recycle - 3R).
• Encourage private sector participation in waste management and resource efficiency.
• Share best practices and innovative solutions for urban sustainability.
• Support policy frameworks for cities to transition towards a circular economy.

For the first time, a comprehensive estimate of Gangetic dolphins, India's only riverine dolphins, has been conducted. The survey found 6,327 dolphins in the Ganga and its tributaries. However, due to differences in counting methods used in previous studies, this number does not indicate whether their population is increasing or decreasing.

Key Findings of the Survey

• Total dolphins recorded: 6,327
• Species count: 6,324 Ganges river dolphins and 3 Indus river dolphins
• State-wise distribution:
  • Most dolphins found in Uttar Pradesh, followed by Bihar, West Bengal, and Assam
• Regional distribution:
  • 3,275 in the Ganga main stem
  • 2,414 in Ganga tributaries
  • 584 in the Brahmaputra main stem
  • 412 in Brahmaputra tributaries
  • 101 in the river Beas

The survey began in 2021 and covered 8,507 km of river stretches.

The Indian Space Research Organisation (ISRO) has released the second set of scientific data from its Aditya-L1 solar mission. This dataset provides valuable insights into the Sun’s atmosphere and space environment at the first Earth-Sun Lagrange Point (L1).

Key Highlights of the Data Release

• It covers information on the Sun’s photosphere, chromosphere, and corona.
• It includes in-situ measurements of particles and magnetic fields at Lagrange Point L1.
• Direct access through the PRADAN portal after registration.

Importance of Aditya-L1 Data

• Helps in understanding solar activity and its effects on space weather.
• Provides insights into coronal mass ejections (CMEs), which can impact satellite operations and communications on Earth.
• Contributes to global solar research and space weather predictions.

The Time Use Survey 2024, released by the Ministry of Statistics and Programme Implementation, highlights the persistent gender disparity in unpaid domestic and caregiving work in India. Despite marginal improvement, women continue to spend significantly more time on household responsibilities, affecting their economic participation and workplace equality.

Gendered Division of Unpaid Work

• Disproportionate Burden: In 2024, women spent 289 minutes/day on unpaid domestic services, 201 minutes more than men. Additionally, they spent 140 minutes on caregiving, compared to 75 minutes for men.
• Limited Labour Participation: Women’s unpaid workload reduces time for paid employment, education, and skill development, restricting upward mobility.
• Reinforcement of Wage Gap: Women often work in low-paid, informal jobs due to time constraints, exacerbating income disparities with men.

Economic and Social Impact

• Labour Force Disparity: Women’s Labour Force Participation Rate (LFPR) stands at 41.7% (PLFS 2023-24), while men’s LFPR is 78%, showing stark inequality.
• Macroeconomic Losses: A study estimates women’s unpaid work is valued at 15-17% of GDP, signifying a major unrecognized economic contribution.
• Structural Inequality: Societal norms glorify minimal male contribution to household work while devaluing women’s domestic roles, perpetuating discrimination.

Need for Policy and Cultural Transformation

• Investment in the Care Economy: The ILO report (October 2024) emphasizes strengthening childcare, elderly care, and education to ease women’s domestic burden.
• Shared Household Responsibilities: Encouraging equal distribution of domestic tasks through education, media campaigns, and workplace support policies.
• Formal Recognition of Unpaid Work: Policies like tax incentives, paid caregiving leaves, and social security benefits can help integrate unpaid labour into economic planning.

Practice Question

Q. The disproportionate burden of unpaid domestic and caregiving work on women is a key barrier to gender equality in India. Discuss its economic and social impact and suggest measures for formal recognition and redistribution of unpaid work.

India’s urban centres are facing severe challenges, including pollution, poor infrastructure, climate vulnerability, and weak governance. The Urban Challenge Fund (2025-26) aims to incentivize reforms, drawing inspiration from Singapore’s urbanisation model.

Key Challenges in Indian Cities

• Severe Pollution Crisis: India has 42 of the 50 most polluted cities, with air, water, and waste mismanagement costing $95 billion annually in lost productivity.
• Overburdened Infrastructure: By 2036, over 600 million people will live in cities, yet roads, public transport, and sanitation services are failing.
• Climate Vulnerability: Flooding, water scarcity, and heatwaves are worsening, increasing health risks and economic losses.

Governance and Planning Deficits

• Census Towns Issue: India’s 3,894 census towns lack urban governance, leading to unplanned growth and poor service delivery.
• Weak Institutional Framework: Cities struggle with corruption, poor coordination, and lack of municipal autonomy, affecting governance efficiency.
• Inadequate Financing: Limited urban development funds and poor revenue generation hinder infrastructure investment.

Potential Solutions and Global Best Practices

• Singapore Model: Integrated land-use planning, affordable housing, and smart urban policies offer lessons for India.
• Sustainable Infrastructure: Investment in mass transit, green spaces, modern drainage, and waste management can enhance livability.
• Urban Governance Reforms: Recognizing census towns, decentralizing power, and ensuring sustainable financing can improve city resilience.

Practice Question

Q. Indian cities are facing mounting challenges of pollution, overcrowding, and weak governance. Critically analyze the major urban issues and suggest solutions based on global best practices.

Former US President Donald Trump’s opposition to the UN tax convention threatens global efforts to tax multinationals fairly. His tariff threats and withdrawal from negotiations highlight US attempts to block global tax reforms, putting multilateral cooperation at risk.

Global Tax Reform and Its Importance

• UN Tax Convention Proposal: Aims to tax corporations where they operate, preventing profit shifting to tax havens.
• Tax Evasion Impact: Nations lose $492 billion annually, with the Global South suffering most due to weaker public funding.
• Shift from OECD Model: Proposal moves from the "arm’s-length principle" to unitary taxation, ensuring multinationals like Amazon, Google, and Apple pay fair taxes.

Trump’s Opposition and Its Consequences

• US Obstruction at the UN: Trump’s delegate walked out of negotiations, isolating the US.
• Tariff Threats on Allies: Trump targets Canada and the EU for taxing US firms, undermining global fiscal cooperation.
• America’s Diminishing Influence: Despite past control over OECD-led tax talks, 120+ nations are now backing independent UN reforms.

Global Response and the Way Forward

• Countries Rejecting US Pressure: No mass withdrawal followed Trump’s call to boycott negotiations.
• Precedents for Action Without the US: The Cluster Munitions Convention succeeded without US approval, proving global norms can shift.
• Strengthening Global Tax Governance: Nations must unite under the UN tax framework to ensure fair taxation, independent of US influence.

Practice Question

Q. Examine the challenges posed by multinational tax avoidance and evaluate the role of global tax reforms in ensuring fiscal justice. How should developing nations respond to US resistance in tax negotiations?