On December 8th, the South Asian Association for Regional Cooperation (SAARC) marked 39 years since its establishment. 

About South Asian Association for Regional Cooperation (SAARC)

• Establishment: Established with the signing of the SAARC Charter in Dhaka in December 1985. 
• Secretariat: Set up in Kathmandu in 1987.
• Members: Afghanistan, Bangladesh, Bhutan, India, Maldives, Nepal, Pakistan and Sri Lanka. 
• Observers: Australia, China, European Union, Iran, Japan, South Korea, Mauritius, Myanmar, and the United States of America.
• Authority: The Meetings of the Heads of State or Government of Member States is the highest decision making authority under SAARC. 
• Hosts: Summits are usually held biennially hosted by a Member State in alphabetical order. 
  • The Member State hosting the Summit assumes the Chair of the Association.
• SAARC’s Specialised Bodies: SAARC Development Fund, SAARC Arbitration Council, South Asian Regional Standards Organization.

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Achievement of SAARC

• South Asian Free Trade Area (SAFTA): SAFTA, Signed in 2004, is a free trade agreement between the members SAARC.
• SAARC Development Fund (SDF): SDF is the financial institution for SAARC to fund projects and programs in social sectors, such as poverty alleviation and development. 
  • The SDF was established in 2010 during the 16th SAARC Summit in Thimphu, Bhutan. 
• South Asia Preferential Trading Agreement (SAPTA): SAPTA was signed in Dhaka in 1993, to promote trade amongst the member countries and came into effect in 1995.
• South Asian Regional Standards Organization (SARSO): SARSO, established in 2011, is a Specialized Body to achieve and enhance coordination and cooperation among SAARC member countries in the fields of standardization and conformity assessment.
• Trade in services agreements: The Agreement has been ratified by all Member States and has entered into force in 2012.  
• Double taxation avoidance agreement: it was signed in 2005 by all members to avoid double taxation. India ratified in 2011.
• South Asian Association For Regional Cooperation University: Establish a SAARC university in India, a food bank and also an energy reserve in Pakistan.
• SAARC Disaster Management Centre (SDMC): It is an intergovernmental organization that helps member states reduce disaster risk, manage disaster risk, and promote regional cooperation.
• SAARC Social Charter: The SAARC Charter aims to accelerate social progress through collaboration and mutual assistance among member states.
• Linking South Asian economies with Southeast Asia: This will boost economic integration and prosperity in India, especially in the services sector. 

Ambitious Goals of SAARC

• South Asian Economic Union (SAEU): SAARC envisioned the formation of a South Asian Economic Union (SAEU).
  • It  included objectives such as the adoption of common trade policies, a unified external trade policy, and ultimately the introduction of a single currency for the region.
• Functional and dynamic free trade area: The organization aimed to establish a functional and dynamic free trade area.
  • To achieve this, the South Asian Free Trade Area (SAFTA) agreement was signed in 2006, and the SAARC Agreement on Trade in Services was introduced to enhance intraregional trade in services.

Importance of SAARC

• Promotes Regional Cooperation: SAARC provides a platform for eight South Asian nations to address shared challenges, such as poverty, illiteracy, and health crises. 
  • For instance, initiatives like the SAARC Tuberculosis and HIV/AIDS Centre aim to address public health concerns regionally.
• Facilitates Economic Growth: Agreements like the South Asian Free Trade Agreement (SAFTA) aim to boost trade among member states. 
  • Although implementation has been slow, the potential for enhanced intra-regional trade (currently at ~5%) remains significant for economic growth.
• Addresses Common Issues: South Asia faces shared challenges such as terrorism, climate change, and natural disasters. SAARC facilitates dialogue and cooperation to address these transnational issues. 
  • For example, the SAARC Disaster Management Centre fosters collaborative disaster preparedness.
• Encourages Cultural and People-to-People Exchanges: SAARC promotes cultural integration through events like the SAARC Film Festival and SAARC Literary Awards, which help foster mutual understanding and respect among the diverse cultures in the region.
• Strengthens Collective Bargaining Power: As a bloc, SAARC can enhance its bargaining position in international forums like the WTO or climate negotiations, ensuring that the region’s collective interests are represented on the global stage.
• Enhances Connectivity and Integration: Initiatives like the SAARC Motor Vehicle Agreement and the SAARC Satellite Project aim to improve regional connectivity. 
  • Although stalled, these projects have the potential to boost economic and social integration across South Asia.
• Fosters Regional Stability: By bringing countries like India and Pakistan to the same table, SAARC acts as a confidence-building mechanism to reduce tensions and foster dialogue. 
  • For example, SAARC summits have often facilitated bilateral meetings on the sidelines.

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Failures of SAARC

• Postponed or Cancelled Summits: Over the past three decades, SAARC summits have been postponed more than 10 times due to political disagreements.
  • Example: The 2016 SAARC Summit in Islamabad was canceled after India, Bangladesh, Bhutan, and Afghanistan refused participation following the Uri terrorist attack.
• Weaker Organisation: South Asia’s regional cooperation has historically been weaker compared to other regions like ASEAN, the EU, and Africa.
  • African Continental Free Trade Area: Demonstrates the importance of regional trade integration.
  • MERCOSUR: Latin America’s regional integration project has outperformed South Asia.
• Inadequate Economic Integration: Despite the implementation of the South Asian Free Trade Agreement (SAFTA) in 2006, intra-regional trade remains at a mere 5% of the region’s global trade.
  • The potential for economic collaboration has not been realized due to limited trade liberalization and non-tariff barriers.
• Stalled Regional Initiatives: Key initiatives like the SAARC Motor Vehicles Agreement and SAARC Satellite Project have failed to materialize, primarily due to lack of consensus among member states.
  • This stalling reflects SAARC’s inability to deliver on regional connectivity and infrastructure projects.
• Failure to Address Regional Security Issues: SAARC has not been able to develop a collective security framework.
  • Example: Terrorism remains a divisive issue, with no consensus on addressing cross-border terrorism due to conflicting national interests.
• Underutilization of Resources: SAARC institutions, such as the SAARC Development Fund (SDF), have failed to meet their potential due to inadequate funding and a lack of impactful projects.
  • These institutions remain largely ineffective in promoting sustainable development across the region.
• Ineffectiveness in Crisis Management: SAARC’s response to regional crises, such as the COVID-19 pandemic, was minimal compared to other regional groupings.
  • Although India proposed a COVID-19 Emergency Fund in 2020, broader regional collaboration under SAARC was lacking.
• Shift to Alternative Platforms: The rise of BIMSTEC (Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation) as a more active and functional organization highlights SAARC’s inability to remain relevant.
  • BIMSTEC’s success in fostering regional cooperation contrasts sharply with SAARC’s stagnation.
• Perceived Irrelevance: Many member states prioritize bilateral relations or other regional groupings over SAARC, reducing its significance in addressing regional issues.
  • Example: India’s increasing engagement with BIMSTEC and the Quad demonstrates a shift in focus away from SAARC.

Challenges and Limitations Faced by SAARC

• Political Rivalries: The India-Pakistan rivalry, particularly over terrorism and Kashmir, obstructs cooperation.
  • Example: The cancellation of the 2016 Islamabad Summit due to the Uri terrorist attack highlights the impact of bilateral tensions on SAARC’s functioning.
• Lack of Trust among Member States: Distrust, especially between larger and smaller nations, hampers regional cohesion.
  • Pakistan’s frequent opposition to India-led initiatives, such as the SAARC Satellite and Motor Vehicles Agreement, demonstrates this issue.
• Weak Economic Integration: Intra-regional trade within South Asia remains at a mere 5.6% of the region’s total trade, far below ASEAN’s 25%. Non-tariff barriers, protectionist policies, and inadequate connectivity infrastructure exacerbate the problem.
  • Example: The South Asian Free Trade Area (SAFTA) has had limited success since its inception in 2006.
• Structural and Decision-Making Weaknesses: SAARC’s requirement for unanimity in decision-making often leads to deadlocks.
  • Important agreements, such as the SAARC Motor Vehicles Agreement and Regional Railways Agreement, remain unsigned due to lack of consensus.
• Limited Scope under the SAARC Charter: The charter restricts SAARC to dealing only with multilateral issues, excluding bilateral disputes.
  • This limits its ability to address pressing issues like India-Pakistan conflicts or cross-border terrorism.
• Perception of India’s Dominance: Smaller member states perceive India as a dominant “Big Brother,” creating apprehension and resistance to cooperation.
  • This sentiment undermines trust and makes smaller countries hesitant to engage fully in SAARC initiatives.
• Prioritizes bilateral relation: India’s foreign policy traditionally prioritizes bilateral relations with its neighbors.
• Low Intra-Regional Investment: According to the World Bank (2021), intraregional investments account for only 0.6% of global inward FDI in South Asia, the lowest among developing regions.
  • This lack of economic interdependence weakens SAARC’s relevance.
• Security Challenges: Differing threat perceptions among member states hinder security cooperation.
  • Example: India’s concerns over cross-border terrorism from Pakistan remain unresolved, stalling progress in regional security initiatives.
• Rise of Alternative Regional Platforms: The emergence of BIMSTEC as a viable alternative has shifted focus away from SAARC.
  • BIMSTEC’s focus on connectivity and shared objectives among its members has garnered more political and economic commitment.
• External Influences: China’s increasing influence in South Asia through initiatives like the Belt and Road Initiative (BRI) creates divisions within SAARC.
  • Pakistan’s alignment with China contrasts sharply with India’s cautious approach, adding to the discord.
• Internal Instability in Member States: Political instability within member states diverts attention from regional commitments.
  • Example: Afghanistan’s uncertain participation after the Taliban takeover in 2021.
• Logistical Inefficiencies: According to the Brookings Institution, Owing to protectionist policies, high logistics cost, lack of political will and a broader trust deficit, intra-regional trade in South Asia remains well below its potential at 5% of the region’s global trade. 
  • Initiatives like the South Asia Free Trade Agreement (SAFTA), though implemented in 2006, have seen minimal success in fostering trade and investment in the region.
  • Example: It is 20% cheaper for India to trade with Brazil than with neighboring SAARC countries.

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Significance of SAARC for India

• Strengthening Neighborhood First Policy: SAARC aligns with India’s focus on fostering stronger ties with its immediate neighbors, promoting regional cooperation and development.
  • It provides a structured platform to address shared challenges, such as poverty and climate change, in collaboration with South Asian countries.
• Soft Power Projection: SAARC enables India to exert its influence as a dominant regional player. Initiatives like the South Asian University in Delhi enhance India’s cultural and educational appeal across member states.
• Countering China’s Influence: Reviving SAARC allows India to balance China’s growing influence through the Belt and Road Initiative by fostering economic and infrastructure collaborations within the region.
• Boosting Regional Stability: Through SAARC, India can promote trust-building measures, particularly with Pakistan, ensuring that regional interests take precedence over bilateral disputes.
  • It can help foster a stable environment essential for economic growth and regional peace.
• Economic Opportunities: Revitalizing SAARC could open up larger regional markets for Indian companies, especially in sectors like agriculture, pharmaceuticals, and services.
  • The full implementation of SAFTA can lower trade barriers, boosting India’s exports and reducing trade deficits with neighbors.
• Boost to Act East Policy: By linking South Asian economies with Southeast Asia, SAARC can further India’s Act East Policy, promoting economic integration and growth, particularly benefiting India’s underdeveloped eastern regions.

Way Forward for Reviving SAARC

• Reforming Decision-Making: Replace the consensus-based approach with majority voting to ensure that vital regional projects and initiatives are not stalled by bilateral disagreements.
• Foster India-Pakistan Dialogue: Initiate confidence-building measures and create a neutral platform for dialogue between India and Pakistan to address critical issues like terrorism and trade barriers.
• Focus on Economic Cooperation: Prioritize regional connectivity projects such as cross-border energy grids, railways, and road networks to enhance trade and interdependence among member states.
• Promote People-to-People Ties: Expand cultural, academic, and tourism exchanges to build trust and goodwill, reducing political tensions indirectly.
• Conflict Resolution Platform: Use SAARC as a forum for confidence-building measures, keeping dialogue open even amid political conflicts, particularly between India and Pakistan.
• Leverage Climate Cooperation: Develop collective strategies to address climate change, focusing on disaster management, renewable energy projects, and sustainable development.
• Cultural Affinity: SAARC represents the shared cultural, linguistic, religious, and historical identity of South Asia, emphasizing the region’s natural geographic and social connections.
• Integrate with Larger Goals: Align SAARC’s agenda with India’s Act East Policy by linking South Asia with Southeast Asia, fostering greater regional economic and strategic integration.

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Conclusion

SAARC’s challenges are deeply rooted in political conflicts, structural inefficiencies, and economic underperformance. Comprehensive reforms, such as flexible decision-making, prioritizing regional trade, and resolving political disputes, are necessary to revive SAARC’s relevance and fulfill its mandate. It shall not only be in moments of crisis that SAARC nations build consensus. A unified approach to achieving peace, stability and growth shall be the compass guiding future SAARC meetings and reaping benefits of the Asian Century. 

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December 5, 2024, marked the 10th World Soil Day, with the theme “Caring for Soils – Measure, Monitor, and Manage.”

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About World Soil Day

• Proposed By: The idea for an international day to celebrate soil was proposed by the International Union of Soil Sciences (IUSS) in 2002.
• Key Institutions : Led by the Kingdom of Thailand and supported by the Global Soil Partnership framework, the Food and Agriculture Organization (FAO) played a pivotal role in formally establishing World Soil Day (WSD).
• Formal Establishment of World Soil Day: The FAO Conference unanimously endorsed World Soil Day in June 2013 and requested its official adoption at the 68th UN General Assembly.
• Official Recognition of World Soil Day: In December 2013, the UN General Assembly designated 5 December 2014 as the first official World Soil Day.

Soil Health Crisis in India

• According to recent estimates, nearly 115 to 120 million hectares (Mha) i.e. roughly 33% of the country’s total geographic area (TGA) is affected by soil degradation, including water erosion, wind erosion, salinity, and vegetation loss.
• Desertification and Land Degradation Atlas of India (Space Applications Centre Report)

• • Land degradation and desertification in the country has been estimated to be 97.84 million hectares in 2018-19.
  • Water Erosion as the Major Contributor: Water erosion is the most significant cause of land degradation, affecting 11.01% of India’s land area.
  • Other Major Degradation Processes
    • Vegetation degradation: 9.15% of land affected.
    • Wind erosion: 5.46% of land affected.

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Challenges to Soil Health In India

• Nutrient Deficiency: 
  • Nitrogen Deficiency: Less than 5% of Indian soils have sufficient nitrogen.
  • Phosphate Deficiency: Only 40% of soils have sufficient phosphate.
  • Potash Deficiency: 32% of soils are adequate in potash.
  • Organic Carbon Deficiency: Just 20% of soils have sufficient organic carbon.
  • Micronutrient Deficiencies: Soils also suffer from moderate to severe deficiencies in micronutrients like sulfur, iron, zinc, and boron.
• Soil Degradation:
  • Erosion:  Water Erosion is the most widespread form of degradation and occurs widely in all agroclimatic zones of India.
    • Wind erosion basically involves displacement of soil particles by the action of wind. 
    • Accelerating Factors: Intensive farming practices, deforestation, and rapid urbanization contribute significantly to soil erosion. 
  • Loss of Organic Matter: Excessive use of chemical fertilizers depletes organic content, reducing soil fertility.
  • Acid Soils: These soils develop in humid and per-humid areas due to excessive leaching of cations with high rainfall, resulting in lowering of pH and loss of soil fertility.
• Pollution:
  • Agrochemicals: Overuse of Chemical Fertilisers and Pesticides without considering long-term soil health, driven by the need for higher yields, has degraded soil quality by disrupting its natural nutrient balance and harming beneficial soil organisms.
  • Industrial Effluents: Toxic pollutants from industries degrade soil quality.
• Climate Change:
  • Altered Rainfall Patterns: Increased erosion and waterlogging reduce soil fertility.
  • Temperature Extremes: Impact microbial activity, crucial for nutrient cycling.
• Overexploitation:
  • Monocropping: Monoculture refers to the practice of growing the same crop year after year.
    • Reduces biodiversity and depletes specific nutrients.
  • Overgrazing: Compacts soil and leads to loss of vegetative cover.
  • Over Extraction of Groundwater: Over-extraction of groundwater and unsustainable irrigation practices has led to soil salinisation, reducing the land’s fertility.
• Socio Economic Changes: 
  • Land Fragmentation: The increase in land fragmentation, driven by inheritance laws and population pressures, makes it difficult for farmers to invest in soil health, as they lack economies of scale and access to capital for sustainable practices.
  • Urbanisation and Land Use Changes: Rapid urbanisation is leading to the conversion of agricultural lands into urban areas, reducing the availability of fertile land. 
    • This change disrupts traditional farming systems and leads to the loss of soil health in former agricultural zones.
    • Examples: Conversion of agricultural land for mining and industrial purposes, leads to soil degradation and the creation of wastelands, making soil regeneration challenging.
• Lack of Awareness: Limited access to education, resources, and technology in rural areas prevents farmers from adopting soil conservation practices, further degrading the soil.

Role of Fertiliser Industry In The Soil Health and Agricultural Productivity of India

• The fertiliser industry plays a critical role in providing essential nutrients like nitrogen (N), phosphate (P), potash (K), and micronutrients, ensuring higher agricultural productivity.
• Nutrients are either produced domestically or imported and distributed to farmers on time.
• India is the world’s largest exporter of rice.
• From 2020-21 to 2022-23, India exported about 85 million tonnes of cereals, despite providing nearly free rice and wheat to over 813 million people.

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Challenges Arising In the Fertiliser Sector

• Subsidisation:
  • The country’s fertiliser subsidy budget for the FY’ 2023–24 is Rs. 175103 Crores 
  • The fertilizer sector is heavily subsidised, amounting to Rs 1.88 lakh crore, nearly 4% of the Union budget.
  • Urea, subsidized by two-thirds, remains the cheapest in the world, which has remained constant for over a decade.
• Imbalanced Fertiliser Use: Heavy Subsidisation of Fertilisers  has led to imbalanced usage of fertilisers, especially in major agricultural states like Punjab and Telangana, where nitrogen (N) is overused and phosphorus (P) and potash (K) are underused.
  • Overuse of nitrogen (N) and underuse of potassium (K) and phosphorus (P) result in suboptimal crop yields.
• Impact of Fertiliser Mismanagement
  • Pollution: Nutrient Use Efficiency (NUE) is only 35-40%, with excess nitrogen turning into harmful nitrous oxide, contributing to atmospheric pollution.
  • Diversions and Leakages: Around 20-25% of urea is diverted to non-agricultural uses or leaks to neighboring countries.
• Health Hazards:
  • Nitrate contamination from excessive fertiliser use poses a significant challenge, leading to health issues like “blue baby syndrome,” a condition affecting infants due to the ingestion of water contaminated with high levels of nitrates.

Steps taken by the Government To Improve Soil Health

• Reclamation of Problem Soils (RPS): The Government under Reclamation of Problem Soils (RPS), a sub-scheme of Rashtriya Krishi Vikas Yojana (RKVY), is providing assistance for reclamation of lands affected by alkalinity, salinity and acidity.
• Soil Health Card Scheme: Soil Health Card (SHC) is a printed report which contains nutrient status of soil with respect to 12 nutrients: pH, Electrical Conductivity (EC), Organic Carbon (OC), Nitrogen (N), Phosphorus (P), Potassium (K), Sulphur (S), Zinc (Zn), Boron (B), Iron (Fe), Manganese (Mn) and Copper (Cu) of farm holdings.
  • According to the National Productivity Council (NPC), the Soil Health Card scheme has led to a decline of 8-10% in the use of chemical fertilisers and also increased productivity by 5-6%.
• Neem Coating of Urea (NCU): The Department of Fertilizers (DoF) has mandated that all domestic urea production must be 100% Neem Coated Urea (NCU).
  • Benefits of NCU:
    • Enhances soil health and boosts nitrogen use efficiency (NUE).
    • Reduces the need for plant protection chemicals and pest attacks.
    • Minimises diversion for non-agricultural purposes.
    • Ensures slower nitrogen release, resulting in reduced fertiliser consumption.
• Nutrient Based Subsidy (NBS) Scheme: The NBS scheme was introduced to ensure a balanced and efficient use of fertilizers by providing subsidies based on the actual nutrient content rather than the price of the fertiliser.
  • The scheme aims to promote balanced fertilizer use, enhance agricultural productivity, support the indigenous fertilizer industry, and reduce subsidy burden.
• Paramparagat Krishi Vikas Yojana (PKVY): The Pradhan Mantri Krishi Vikas Yojana (PKVY) promotes organic farming to reduce dependence on chemical fertilizers and pesticides.
  • This approach encourages natural replenishment of soil nutrients and organic matter, ultimately fostering healthier soil.
• Initiatives by ICAR: The Indian Council of Agricultural Research has developed location specific bio-engineering soil & water conservation measures, watershed management interventions, soil reclamation measures for saline, alkali, waterlogged and acid soils, selection of suitable crops including agroforestry interventions to prevent and manage land degradation.
• One Nation, One Fertiliser Scheme: All subsidised soil nutrients such as urea, di-ammonium phosphate (DAP), Muriate of Potash (MoP), and NPK will be marketed under the single brand Bharat across the nation.
  • With the launch of this scheme, India will have a common bag design across the country like Bharat urea, Bharat DAP, Bharat MOP, Bharat NPK, etc

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Way Forward

• Fertilisers: 
  • Deregulation of Fertiliser Prices: The fertiliser sector should be deregulated from price controls, similar to sectors like cement and diesel.
    • This would drive innovation, increase efficiency, and ensure better nutrient balance (N, P, K) usage.

• • Direct Income Transfers to Farmers: Farmers could receive digital coupons as direct income transfers to purchase fertilizers.
    • This would empower farmers to choose fertilisers based on need and promote balanced use.
  • Use of AgriStack For Balanced Fertiliser Use: Encourage balanced application of N, P, and K  by using Agri Stack, a digital platform to integrate stakeholders and improve agricultural outcomes. 
• Sustainable Agricultural Practices: 
  • Farming Practices: Promote organic and regenerative farming methods alongside chemical fertilisers to ensure long-term soil health.
    • Invest in research and extension services to help farmers transition to more sustainable practices.
    • Promotion of Micro-Nutrients: Encourage the use of micro-nutrients to improve soil health, productivity, and farmers’ profits.Use of Agricultural Waste: Promote the use of crop residues, farmyard manure, and other organic waste as soil amendments to enhance soil organic content and structure.
  • Nutrient circularity: It refers to the process of collecting, processing, and returning nutrients from urban organic waste back into agricultural soil.
    • This strategy addresses both soil nutrient replenishment and waste management.
  • Minimal Tillage: Promote minimal tillage practices that preserve soil structure, reduce erosion, and increase organic matter.
  • Crop Rotation and Diversification: Advocate for crop rotation and intercropping to break pest cycles, reduce soil degradation, and improve soil fertility.
  • Drip Irrigation and Rainwater Harvesting: Encourage efficient water use through drip irrigation systems and rainwater harvesting to prevent waterlogging and soil salinization.
  • Reduce Over-extraction: Regulate groundwater extraction to prevent soil compaction and salinity buildup.
• Addressing Soil Erosion:
  • Erosion Control Measures: Implement soil conservation techniques such as terracing, windbreaks, and check dams to prevent soil erosion, particularly in vulnerable regions.
  • Afforestation and Agroforestry: Promote afforestation and agroforestry practices to reduce soil erosion, increase soil fertility, and enhance biodiversity.

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Conclusion

• Soil health is crucial for enhancing agricultural productivity, achieving food security, and promoting sustainable farming practices. 
• Achieving sustainable soil management in India requires coordinated reforms in fertiliser usage, technology integration, and farmer-focused policies.

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The Centre announced the appointment of Revenue Secretary Sanjay Malhotra as the 26th Governor of the Reserve Bank of India as the six-year term of incumbent Governor Shaktikanta Das came to an end.

RBI Governors

• RBI Governors are appointed by the Government of India and serve as the top leaders of the Reserve Bank of India (RBI).
• The Governor acts as the CEO of the RBI and the head of its Central Board of Directors.
• Indian Rupee currency notes issued by the RBI bear the Governor’s signature.
• Sir Osborn Smith was the first RBI Governor appointed after the inception of RBI in 1935.

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Appointment of RBI Governor

• The RBI Governor is appointed under the authority of the RBI Act, 1934. 
• The Central Government is responsible for the appointment.
• The Financial Sector Regulatory Appointment Search Committee includes the Cabinet Secretary, the current RBI Governor, the Financial Services Secretary, and two independent members.
  • This committee prepares a list of eligible candidates.
  • Shortlisted candidates are interviewed, and the list is sent to the Cabinet Committee on Appointments, headed by the Prime Minister, for final confirmation.
• Tenure: The Governor holds office for a term not exceeding five years, with the term determined by the government at the time of appointment.
  • The RBI Governor’s term is initially set at three years but can be extended by two more years if required.
• The term may end in two ways:
• • If the President of India decides to remove the Governor.
  • If the Governor chooses to resign and submits their resignation to the President.
• The Governor is eligible for reappointment or extension of their tenure.
• The RBI Act, 1934, does not specify any particular qualifications for the Governor.
• The Central Government can issue directions to the RBI in the public interest after consulting the Governor.

Roles and Responsibilities of RBI Governors

• Monetary Policy Committee (MPC): The Governor chairs the MPC, which is responsible for setting benchmark interest rates and maintaining inflation within target levels.
  • The MPC consists of six members; three from the RBI (including the Governor) and three external members. Decisions are made by majority vote.
  • If there is a tie (3-3), the Governor, as the chairperson, has the power to cast the deciding vote, effectively breaking the deadlock.
• Appointments and Leadership: Oversees appointments of senior officials within the RBI and plays a crucial role in forming committees on critical financial matters.
• Regulation of Financial Institutions: Regulates banks, non-banking financial companies (NBFCs), and other financial institutions to ensure financial stability and compliance with RBI guidelines.
• Implementation of FRBM Act: Monitors and advises on the implementation of the Fiscal Responsibility and Budget Management (FRBM) Act, ensuring fiscal discipline in the economy.
• Currency Management: Manages the issuance of currency, ensuring the supply of clean and secure notes while withdrawing unfit ones.
  • The Governor ensures and monitors credit flow to small-scale industries, rural areas, and the agriculture sector.
• Advisory Role: Provides expert advice to the Central and State Governments on financial and economic policies, fostering coordinated economic planning.
• Crisis Management: Acts as the key decision-maker during financial crises, implementing measures to stabilize the economy.
• Policy Implementation: Ensures the execution of policies related to foreign exchange, financial inclusion, and developmental initiatives for various sectors, including rural and agricultural areas.

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RBI Governors Eligibility Criteria

• The RBI Act, 1934 does not mention any specific qualification for the governor.
  • People with different educational backgrounds were selected to head the institution.
  • However, the governor traditionally is either a civil services personnel or an economist.
• Candidates should have prior experience in areas such as:
  • Working with the International Monetary Fund (IMF) or World Bank.
  • Serving as Chairman or General Manager of a bank.
  • Holding significant positions in reputable financial or banking organizations.
  • Working in the Ministry of Finance of the Government of India.
• The candidate must be an Indian citizen aged 35 years or older.
• The candidate cannot be a member of Parliament, State Legislature, or hold any other office for profit

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Opposition parties plan to submit a notice for a no-confidence or impeachment resolution against Vice-President and Rajya Sabha Chairman.

Key Highlights of the Move

• The resolution must comply with the 14-day notice requirement.
  • The Winter Session of Parliament, ending December 20, provides limited time for its submission and processing.
  • On the prorogation, all pending notices except those relating to introduction of Bills lapse and fresh notices must be given for the next session.

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Removal of the Vice-President/ Chairman of the Rajya Sabha

Constitutional Provisions

• Article 67(b): Provides the procedure for the removal of the Vice-President of India.
  • The Vice-President, who also serves as the Chairman of the Rajya Sabha, can be removed through this process.
• Removal of Rajya Sabha Chairman: The Chairman of the Rajya Sabha (Vice-President) can only be removed if he/she is removed from the office of the Vice-President.

Process for Removal

• Introduction of Resolution: The removal resolution can only be introduced in the Rajya Sabha, not in the Lok Sabha.
• Notice Requirement: A 14-day advance notice is mandatory before moving the resolution.
• Majority Requirements:
  • Effective Majority in Rajya Sabha: The resolution must be passed by the majority of the then members of the Rajya Sabha, excluding vacant seats.
  • Simple Majority in Lok Sabha: The resolution must also be agreed to by a simple majority in the Lok Sabha.

Conduct During Resolution

• Restrictions on Chairman: When a resolution for the removal of the Chairman of the Rajya Sabha is under consideration, he/she cannot preside over the House.
• Participation in Proceedings: The Chairman can participate in the proceedings, speak in the House, and take part in discussions but cannot vote, even in the first instance.
• Contrast with Lok Sabha Speaker: The Speaker of the Lok Sabha can vote in the first instance but not in the case of a tie.

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Historical Precedents and Related Cases

• No-Confidence Against Deputy Chairman (2020): The Opposition submitted a no-confidence resolution against Rajya Sabha Deputy Chairman Harivansh in 2020 over his handling of contentious farm bills.
  • The resolution cited violations of parliamentary procedures and fair play.
• Impeachment Resolutions Against Speakers: Precedents include resolutions against Lok Sabha Speakers like G.V. Mavalankar (1951), Sardar Hukam Singh (1966), and Balram Jakhar (1987), all negated by the House after discussion.
• There is no precedence of a no-confidence or impeachment resolution being moved against the Rajya Sabha Chairman.

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A male markhor strayed into Noorkhah village, Baramulla, near the Kazinag National Park in north Kashmir, close to the Line of Control.

About the Markhor (Capra falconeri)

• Markhor is considered the world’s largest wild goat, and is a highly endangered species.
• Habitat :Found in dense pine and birch forests of Kashmir and other mountain regions.

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• Distribution: In India, primarily found in Jammu and Kashmir, including areas such as Shopian, Banihal Pass, Shamsbari, Kazinag Uri, and Pir Panjal range in Poonch.
  • Global distribution includes Pakistan, Afghanistan, Uzbekistan, Turkmenistan, and Tajikistan.
• Conservation Status:
  • Schedule I of the Wildlife (Protection) Act, 1972 in India.
  • Schedule I of the Jammu and Kashmir Wildlife (Protection) Act, 1978.
  • Classified as ‘Near Threatened’ on the IUCN Red List.
  • Appendix I to the Convention on International Trade in Endangered Species (CITES) of Wild Fauna and Flora since 1992.
• Conservation Efforts: 
• • Kashmir Markhor Recovery Project by the Wildlife Trust of India: Focuses on protecting markhor habitats and mitigating human activity and livestock grazing.
    • Positive results observed in improving markhor population.
  • Protected Areas: Expansion of the Hirpora Wildlife Sanctuary and creation of the Tattakuti Sanctuary by the J & K government  to secure their habitats.
• Significance and Recognition: The UN General Assembly declared 24 May as the International Day of the Markhor starting in 2024, highlighting its ecological and cultural importance.

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India attracted over a trillion dollars in foreign direct investment between April 2000 and September 2024 as per data of the Department for Promotion of Industry and Internal Trade (DPIIT), Ministry of Commerce and Industry

More on India’s FDI

• Top Investors: Mauritius, Singapore, USA
  • Other Key Investors: Japan, the U.K., the UAE, Cayman Islands, Germany and Cyprus 
• Key Sectors: Services, software, and telecommunications.
• Performance of States: A state-wise analysis of the figures shows that Maharashtra received the highest inflow of $13.55 billion during April-September 2024-25. It was followed by Karnataka ($3.54 billion), Telangana ($1.54 billion) and Gujarat (about $4 billion).

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About FDI

• Foreign Direct Investment (FDI) refers to an investment by an individual or a company in one country into business interests located in another country.
• Allowed 100% FDI in some sectors- IT and Software Development, E-commerce, Renewable Energy, Automobile Sector, Food Processing
• FDI prohibited in certain sectors- Lottery and Gambling, Atomic Energy, Tobacco, Chit Funds
• Two routes of FDI:
  1. Automatic Route: No prior government approval is required. Investment is made directly in permitted sectors, subject to FDI policy regulations. Examples: Infrastructure, IT, and most manufacturing sectors.
  2. Government Approval Route: Requires prior approval from the relevant government authorities or ministries. Examples: Defense, media, and multi-brand retail sectors.

Difference Between Foreign Direct Investment and Foreign Portfolio Investment

Benefits of FDI

• Economic Growth: Boosts capital inflows, enhancing productivity and infrastructure.
• Employment Generation: Creates direct and indirect jobs in various sectors.
• Technology Transfer: Facilitates the introduction of advanced technology and expertise.
• Global Integration: Encourages stronger ties with global markets.
• Infrastructure Development: Promotes development in sectors like transportation, telecom, and energy. 

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Government Initiatives to Attract More FDI

• Ease of Doing Business: 
  • Simplified regulatory frameworks and procedures.
  • Implementation of the Insolvency and Bankruptcy Code (IBC).
• FDI Policy Reforms:
  • Increased FDI limits in key sectors like defense (74%), insurance (74%), and telecom (100%).
• National Single Window System (NSWS):
  • A single digital platform for investors to obtain approvals and clearances.
• Production-Linked Incentive (PLI) Schemes:
  • Offered in sectors like electronics, pharmaceuticals, and textiles to attract investment.
• Tax Reforms:
  • Reduced corporate tax rates for new manufacturing companies (15%).
• Infrastructure Development:
  • Initiatives like the National Infrastructure Pipeline and Gati Shakti Plan to attract investments.

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Investors are urging the Reserve Bank of India (RBI) to permit state government debt to be issued as zero-coupon bonds.

About Zero Coupon Bonds

• Zero-coupon bonds are financial instruments that do not pay periodic interest but are sold at a discount and redeemed at their full face value upon maturity. 
• Benefits of Zero-Coupon Bonds:
  • Simplified interest management since no periodic payments are required.
  • Attractive for investors seeking fixed returns over a specific period.
• Risks involved with Investing in Zero Coupon Bonds: 
  • They do not provide periodic interest payments.
  • The value of these bonds is inversely related to the interest rates. 
  • The longer a bond’s duration, the greater its sensitivity to interest rate changes. 
• State Government Borrowing Context:
  • State Development Loans (SDLs) are currently auctioned by RBI as part of managing state public debt. Issuance as zero-coupon bonds could reduce immediate financial pressures on states​.
• Regulatory Changes and Concerns:
  • Implementation would require adjustments in RBI’s current frameworks for government securities, as valuation and risk parameters for zero-coupon instruments differ from those of interest-bearing bonds​.

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STRIPS Facility

• STRIPS (Separate Trading of Registered Interest and Principal of Securities) allow the splitting of a bond into its principal and interest components.
• Mechanism:
  • A 10-year bond with annual interest can be split into 10 interest payments (coupons) and one principal payment.
  • These components are traded separately in the secondary market as zero-coupon securities.
• Benefits:
  • Enhances liquidity and trading options.
  • Attracts investors with varying maturity needs.
• In India: The STRIPS facility is available for government securities but is underutilized due to limited awareness and technical challenges.

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Arunachal government deploys central forces to counter dam protestors in Siang Valley.

About Upper Siang Multipurpose Storage Project

• The Upper Siang project is a proposed 11,000 MW hydropower project on the Siang River in Arunachal Pradesh.

About Siang river

• The Siang, originating near Mount Kailash in Tibet (Tsangpo), flows over 1,000 km eastward, enters Arunachal Pradesh as the Siang, and later becomes the Brahmaputra in Assam.
• Initially proposed as two separate projects, it was consolidated into one larger project in 2017, to be built by the National Hydroelectric Power Corporation (NHPC), featuring a 300-metre high dam.
  • The Upper Siang Multipurpose Storage Project is exempt from environmental clearance requirements under the Forest (Conservation) Amendment Act of 2023.

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Strategic Importance

• Counter China’s hydel projects on the Tsangpo, particularly a 60,000 MW ‘super dam’ in Tibet’s Medog county poses significant threats, including flash floods and water scarcity.
• This super dam’s capacity is nearly 3x that of the Three Gorges Dam in China and is intended to divert water to northern China.

Environmental and Social Concerns: Anti-dam organizations express concerns about the project’s environmental and social impact.

• Threat to delicate ecosystems, wildlife habitats, and biodiversity in Arunachal Pradesh.
• Displacement of communities: The project could submerge over 300 villages of the Adi Tribe.
• In 2022, the Gauhati High Court cancelled all 44 dams proposed on the Siang river.
• • Despite the cancellation, there are still plans to build dams on the Siang river.

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Notre-Dame Cathedral

Context: Recently the Notre Dame de Paris or the Cathedral of Notre Dame was re-opened after a massive fire destroyed its roof and spire five years ago in 2019.

About Notre-Dame Cathedral

• Location: The Notre-Dame Cathedral is a medieval Catholic cathedral situated on an island in the Seine River in Paris, France.
• Religious Relics: The cathedral houses the Holy Crown of Thorns, regarded as one of the most sacred relics.
  • It also contains relics from the crucifixion of Jesus, including a piece of the cross and one of the nails used during the crucifixion.
• UNESCO Recognition: The Notre-Dame Cathedral is recognized as a UNESCO World Heritage Site, reflecting its cultural and historical significance.
• Architecture:
  • The cathedral is an iconic example of the French Gothic architectural style.
  • French Gothic architecture is characterized by features such as shutter windows, carved archways, and narrow street fronts.
  • This architectural style harmonizes well with the courtyards and backyard gardens of traditional Bengali homes which can be seen in Indo-French Architecture of  Chandernagor, West Bengal.
• Historical Significance: The Notre-Dame Cathedral hosted the coronation of Napoleon Bonaparte as Emperor in 1804.

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OpenAI launches Sora Turbo

Context: OpenAI has launched Sora Turbo, a new and faster version of Sora, the company’s text-to-video artificial intelligence (AI) model which it previewed in February.

About Sora Turbo

• Sora in Japanese means sky, an imagery that evokes ‘limitless creative potential’. 
• It is an advanced version of its text-to-video AI model, Sora.
• It can generate videos up to 20 seconds long with a resolution of 1080p, offering faster performance and improved features compared to its predecessor.
• Applications and Significance 
  • Sora Turbo can generate complex and high-quality videos from textual descriptions, providing dynamic tools for storytelling and visual content creation.
  • The model enables the creation of emotionally expressive characters and realistic scenes, enhancing creative possibilities for users.

About OpenAI

• OpenAI was established in 2015 as a non-profit AI research organization with a mission to develop Artificial General Intelligence (AGI) that benefits all of humanity.
• Key Innovations:
  • OpenAI introduced Generative Pre-trained Transformers (GPT) models, which revolutionized natural language processing (NLP).
  • The organization developed DALL-E, a text-to-image generation model, and later expanded its capabilities to video animation with the launch of Sora.

SC’s Plenary Power

Context: The Supreme Court (SC) exercised its plenary powers under Article 142 to provide  a relief to a woman Army officer and grant her permanent commission.

• Plenary power refers to the complete or absolute authority granted to a governing body over a specific area without limitations, enabling them to exercise significant control and discretion over relevant matters.

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About Article 142

Article 142 of the Constitution of India gives the Supreme Court of India the power to pass any order it deems necessary to achieve “complete justice” in a pending matter:         

• Pass decrees or make orders for complete justice
• Make orders to secure the attendance of a person
• Order the discovery or production of documents

Application of Article 142: Union Carbide case, relating to the victims of the Bhopal gas tragedy. Here, the Supreme Court deviated from existing law to bring relief to the thousands of persons affected by the gas leak.

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