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Archives (PRELIMS  Focus) Sovereign Gold Bonds Category: Economy Context: Budget clarified that capital gains tax exemption on sovereign gold bonds will not apply to investors who purchase them in the secondary market and hold them to maturity. About Sovereign Gold Bonds: Nature: These bonds are government securities denominated in grams of gold. Launch: The Sovereign Gold Bond (SGB) Scheme was first launched by the Government of India (GOI) on October 30, 2015. Significance: They are substitutes for holding physical gold. Investors have to pay the issue price, and the bonds will be redeemed upon maturity. Issuance: The bond is issued by the Reserve Bank on behalf of the GOI. Eligibility: The bonds will be restricted for sale to resident Indian entities, including individuals, Hindu Undivided Family (HUF), Trusts, Universities and Charitable Institutions. Investment limits: The bonds are issued in denominations of one gram of gold and in multiples thereof. The minimum investment in the bond shall be one gram, with a maximum subscription limit of 4 kg for individuals, 4 kg for HUFs, and 20 kg for trusts. Term: The term of the bond will be for a period of 8 years, with an exit option in the 5th, 6th, and 7th years, to be exercised on the interest payment dates. Selling: Bonds are sold through offices or branches of Nationalised Banks, Scheduled Private Banks, Scheduled Foreign Banks, designated Post Offices, Stock Holding Corporation of India Ltd. (SHCIL), and the authorised stock exchanges either directly or through their agents. Source: The Hindu Businessline   Guru Ravidas Category: History and Culture Context: The Prime Minister recently inaugurated the Adampur Airport in Punjab and renamed it after Sri Sant Guru Ravidas Ji to honour the revered saint on his birth anniversary. About Guru Ravidas: Time period: Guru Ravidas (1377-1527 C.E.) was a renowned saint known for his contributions to the Bhakti movement. His devotional songs and verses made a lasting impact upon the Bhakti Movement. Other names: Guru Ravidas is also known as Raidas, Rohidas, and Ruhidas. Birth: Ravidas was born in a village called Sir Gobardhanpur, near Varanasi in Uttar Pradesh, India. Today, his birthplace is a special place known as Shri Guru Ravidass Janam Asthan. His birthday is celebrated as Ravidas Jayanti. Contemporaries: Ravidas is traditionally seen as a student of the bhakti-poet Ramananda. He is also thought to have lived around the same time as Kabir, another famous poet-saint. Contributions: He was a well-known poet. His poems, written in local languages, inspired many people. 41 of his devotional songs and poems are found in the Sikh holy book, the Guru Granth Sahib. Many of his poems are also in the Panch Vani text of the Dadu Panthi tradition within Hinduism.  Philosophy and teachings: The core of Guru Ravidas’s philosophy was the rejection of the caste system and the promotion of human rights and dignity. He envisioned a society called ‘Beghumpura’ (a city without sorrow), where there is no suffering, no fear, and no discrimination. Symbolism: He also became a symbol of opposition to untouchability in society by the higher caste people for the lower caste people. He emphasised the philosophy of spiritual freedom. Nirguna saint: He abandoned the saguna (with attributes, image) forms of supreme beings and focussed on the nirguna (without attributes, abstract) form of supreme beings. Disciple: Meera Bai, a revered figure in Hindu spiritualism, is said to have considered Guru Ravidas as her spiritual Guru. Ravidassia religion: The Guru’s teachings now form the basis of the Ravidassia religion. Ravidassias believe that Guru Ravidas should be treated as a saint just like the other gurus, as he lived before the first Sikh Guru, and his teachings were studied by the Sikh Gurus. Holy book: The Ravidassia community adopted the Amrit Bani Guru Ravidass as its holy book and established its own symbols and rituals. Source: India Today Carbon Capture Utilisation and Storage Category: Environment and Ecology Context: Recently, the Finance Minister proposed an outlay of Rs 20,000 crore over the next five years in Carbon Capture Utilisation and Storage (CCUS) technologies. About Carbon Capture Utilisation and Storage (CCUS): Definition: CCUS refers to technologies designed to capture CO2 emissions from large point sources and either reuse them or store them permanently underground to prevent atmospheric release. Objective: It aims to mitigate carbon dioxide (CO2) emissions from sources like power plants, refineries and other industrial facilities. Process: It involves a three-stage process: Capture: This involves separating CO₂ from other gases. Methods include post-combustion (after burning fuel), pre-combustion (before full combustion), oxy-fuel combustion (burning in pure oxygen), and Direct Air Capture (DAC). Transport: Captured CO₂ is compressed and moved via pipelines, ships, or trucks. Utilisation or storage: CCU converts CO₂ into products like Green Urea or building materials, or uses it for Enhanced Oil Recovery (EOR). CCS involves injecting CO₂ into geological formations such as depleted oil/gas fields or saline aquifers for permanent storage. Capturing methods: The main methods for capturing CO2 are: post-combustion; pre-combustion; and oxy-fuel combustion. Post-combustion technology: It separates CO2 from the flue gas, by using a chemical solvent for instance, after the fuel is burnt. Pre-combustion methods: It involves converting the fuel into a gas mixture consisting of hydrogen and CO2 before it is burnt.  Oxy-fuel Combustion: Oxy-fuel technology involves burning a fuel with almost pure oxygen to produce CO2 and steam, with the released CO2 subsequently captured. Policy: NITI Aayog released a policy framework in 2022 emphasizing CCUS for sustainable development and an “Atmanirbhar Bharat”. Challenges: These include high capital cost, technological maturity, and infrastructural requirements for transport and storage. Significance: CCUS can play a strategic role in global decarbonisation efforts in a number of ways. Reducing emissions in ‘hard-to-abate’ industries Producing low-carbon electricity and hydrogen, this can be used to decarbonise various activities Removing existing CO2 from the atmosphere. Source: The Indian Express Biopharma SHAKTI Category: Science and Technology Context: Recently, the Union Minister for Finance announced the launch of Biopharma Shakti initiative in budget 2026-27. About Biopharma SHAKTI: Full form: SHAKTI stands for Strategy for Healthcare Advancement through Knowledge, Technology & Innovation. Objective: It is designed to develop India into a global biopharmaceutical manufacturing hub. Ecosystem: This will build the ecosystem for domestic production of biologics and biosimilars. It will include a Biopharma-focused network with 3 new National Institutes of Pharmaceutical Education and Research (NIPER) and upgrading 7 existing ones. Network: It will also create a network of over 1000 accredited India Clinical Trials sites. Financial outlay: It involves Rs. 10,000 crore over the next five years. Significance: This initiative will catalyse investments in advanced biomanufacturing infrastructure, promote innovation and enhance India’s capabilities in high-value, next-generation therapies. Focus areas: It will focus on building a biopharma-centric innovation and manufacturing network, responding to India’s rapidly changing disease profile marked by a rising burden of non-communicable diseases such as diabetes, cancer and autoimmune disorders. About Biologics and Biosimilars: Biologics: These are complex medicines derived from living organisms. Their complex manufacturing processes have traditionally limited their availability, primarily serving high-income countries. Biosimilars: These are highly similar versions of biologic medicines, developed through comprehensive analytical studies and rigorous clinical trials to ensure therapeutic equivalence. These products offer equally effective and safe alternatives thereby increasing market competition and reducing the costs of biologic therapies. Source: PIB Mahatma Gandhi Gram Swaraj Initiative Category: Government Schemes Context: In the Union Budget, Finance Minister announced the launch of the Mahatma Gandhi Gram Swaraj Initiative aimed at strengthening Khadi, handloom, and handicrafts. About Mahatma Gandhi Gram Swaraj Initiative (MGGSI): Launch: It was announced in the Union Budget 2026-27 to strengthen India’s traditional craft sectors.   Objective: It is aimed at making traditional rural industries more competitive while ensuring sustainable livelihoods for artisans and weavers. Focus areas: It is a major initiative to strengthen the khadi, handloom, and handicrafts sector by improving global market access, branding, and market linkages. Beneficiaries: The programme mainly targets weavers, village industries, beneficiaries of the One District One Product (ODOP) initiative, and rural youth, and MGGSI aims to address structural challenges. Preservation of traditional craftsmanship: MGGSI encourages artisans to adopt modern production methods, while preserving traditional craftsmanship. The initiative also focuses on improving market access by better branding and marketing to enable artisans to reach organised retail, export markets, and online platforms. Atmanirbhar Bharat: It aligns with the “Vocal for Local” philosophy and efforts to strengthen micro, small, and medium enterprises (MSMEs). By reinforcing traditional industries, the initiative seeks to generate sustainable employment, and reduce rural distress, thereby aligning with the broader vision of Atmanirbhar Bharat. Constitutional link: While the 73rd Constitutional Amendment Act 1992 provided the political framework for Panchayati Raj, schemes like MGGSI aim to provide the economic foundation necessary for true self-rule. Source: The Indian Express (MAINS Focus) Wetlands as a National Public Good (GS Paper III – Environment, Conservation, Climate Change)   Context (Introduction) India’s wetlands, central to water security, biodiversity and disaster resilience, are rapidly declining despite legal protection. World Wetlands Day 2026 underscores the urgency of integrating traditional knowledge with science-based governance to safeguard these fragile ecosystems. Current Status of Wetlands in India Rapid Decline: Nearly 40% of India’s wetlands have disappeared in the last three decades, while about 50% of the remaining wetlands are degraded, reducing their ecological and economic value. Ecological & Economic Role: Wetlands support fisheries, agriculture, groundwater recharge, flood control and livelihoods, especially for rural and coastal communities, acting as both ecological buffers and local economic assets. Global Commitments: India has designated 98 Ramsar sites, reflecting international recognition, but designation alone has not ensured on-ground protection or restoration. Urban Wetland Stress: Urban wetlands are overburdened with sewage inflows, stormwater, solid waste and encroachments, often without legal buffers or hydrological protection. Climate Vulnerability: Coastal wetlands such as mangroves face a dual threat from sea-level rise and development pressure, limiting their ability to migrate or regenerate. Key Issues and Challenges Weak Implementation: Although the Wetlands (Conservation and Management) Rules, 2017 exist, poor notification, demarcation and enforcement have diluted their impact. Encroachment & Land Conversion: Infrastructure, real estate and road projects have replaced wetlands, treating them as “spare land” rather than active ecological systems. Hydrological Disruption: Dams, embankments, sand mining and groundwater over-extraction alter natural water flows, degrading wetland functions, especially floodplains and riparian zones. Pollution Load: Untreated sewage, industrial effluents and agricultural runoff cause eutrophication, biodiversity loss and public health risks. Institutional Capacity Gaps: State Wetland Authorities are often underfunded and understaffed, lacking expertise in hydrology, ecology, GIS and community engagement. Government Efforts So Far Regulatory Framework: The Wetlands Rules, 2017 mandate identification, notification and restriction of harmful activities in wetlands. NPCA Guidelines: The National Plan for Conservation of Aquatic Ecosystems (NPCA) promotes structured planning, monitoring and outcome-based wetland management. CRZ Regulations: The Coastal Regulation Zone framework seeks to protect coastal wetlands like mangroves and lagoons from unregulated development. Technology Use: Increasing use of remote sensing, GIS and satellite monitoring to track encroachment, water spread and vegetation change. Community-linked Models: Pilot projects by research institutions and NGOs demonstrate participatory wetland management linked to local livelihoods.   Way Forward  From Projects to Programmes: Shift from isolated beautification projects to long-term, basin-level wetland programmes focused on ecological functionality. Boundary Notification & Transparency: Ensure clear demarcation, public maps, grievance redress mechanisms and community-led ground verification of wetland boundaries. Treat Wastewater at Source: Urban wetlands must receive only treated effluents; wetlands cannot substitute for sewage treatment plants. Catchment & Connectivity Protection: Manage wetlands as part of entire watersheds by restoring feeder channels and preventing physical blockages. Nature-based Infrastructure: Recognise wetlands as disaster risk reduction assets, comparable to grey infrastructure, especially for floods and cyclones. Capacity Building: Launch a national training mission for wetland managers in hydrology, restoration ecology, GIS, environmental law and participatory governance. Conclusion Wetlands are not wastelands but national public goods vital for India’s water security, climate resilience and livelihoods. Aligning science, policy and community stewardship—while scaling from cosmetic interventions to ecosystem-based governance—is essential to restore wetlands as living, working systems for a sustainable future.   Mains Question Examine the importance of wetlands for India’s water security, climate resilience and livelihoods. Discuss the challenges in their conservation. (250 words) Source: The Hindu Next Phase of Rural Women Entrepreneurship in India GS Paper II (Social Justice) and GS Paper III (Inclusive Growth).   Context Women-led Self-Help Groups (SHGs) have emerged as one of India’s most effective instruments for poverty reduction, financial inclusion and grassroots democracy. Over the last decade, the rural economy has diversified beyond subsistence agriculture, raising aspirations among women for enterprise-led growth rather than mere income support.  As India enters the next planning cycle (2026–31), the question is how to transition rural women from collective micro-finance participants to independent, scalable entrepreneurs. Current Status: What DAY-NRLM Has Achieved Scale and Reach: Deendayal Antyodaya Yojana–National Rural Livelihoods Mission has mobilised 10 crore rural households into 91 lakh SHGs, federated into 5.35 lakh Village Organisations and 33,558 Cluster-Level Federations (CLFs). Financial Inclusion: SHGs have leveraged over ₹11 lakh crore bank credit with NPAs of just ~1.7%, far lower than conventional retail lending. Income Outcomes: The number of Lakhpati Didis has crossed 2 crore, reflecting successful livelihood diversification. Political and Social Capital: SHGs have strengthened women’s bargaining power, enabling States to use women collectives as delivery platforms for DBT schemes (e.g., Ladli Laxmi Yojana – MP, Jeevika – Bihar, Kudumbashree – Kerala). Institutional Backbone: CLFs function as sub-block institutions anchoring finance, livelihoods, training and social mobilisation. Key Challenges Limiting the Next Leap Weak Autonomy of CLFs: Many CLFs function under administrative control of officials, diluting their original vision as community-owned institutions; leadership decision-making remains constrained. Idle and Poorly Governed Funds: Over ₹56,000 crore of capitalisation support lies with community institutions, increasing risks of underutilisation and misuse in absence of strong social and statutory audits. Credit Ceiling for Mature Enterprises: SHG-bank linkage loans are often too small for enterprise expansion; most women lack individual credit histories or CIBIL scores, restricting access to larger loans. Overdependence on Debt Financing: Current financing is dominated by loans; there is limited access to equity, venture capital or blended finance, which constrains innovation and scaling. Fragmented Livelihood Support: Sub-schemes operate in silos (farm, livestock, non-farm), reducing cumulative impact despite availability of planning tools like Village Prosperity and Resilience Plans (VPRPs). Severe Marketing Bottlenecks: SHG products face weak branding, poor packaging, lack of logistics and minimal access to organised retail or e-commerce markets. Way Forward: Strategy for 2026–2031 Reclaim CLFs as Community Institutions: Strengthen CLFs as autonomous, professionally managed bodies on the lines of Kudumbashree (Kerala) and Jeevika (Bihar), insulated from routine bureaucratic interference. Robust Financial Governance: Institutionalise mandatory social audits, statutory audits and transparent MIS for CLFs to ensure accountable use of large community funds. Graduation to Individual Credit: Generate individual credit scores for SHG members and position CLFs as guarantor-cum-monitoring agencies to facilitate higher-value enterprise loans. Innovative Financing Models: Move beyond micro-credit to equity funding, blended finance and venture support, in partnership with SIDBI, NBFCs, fintechs and neo-banks, tailored to rural women entrepreneurs. Business Clinic Model: Transform CLFs into one-stop enterprise hubs offering training, finance facilitation, compliance support, technology access and mentoring. Institutionalised Convergence: Establish a Convergence Cell at NITI Aayog to align NRLM with schemes of agriculture, dairy, food processing and MSMEs, reducing duplication and ensuring scale. Dedicated Marketing Architecture: Create a National Marketing Vertical for SHG products focusing on branding, quality certification, logistics and partnerships with private players; select CLFs can act as regional logistics hubs. Professional Human Resources: Deploy trained professionals (finance, marketing, agri-business, digital commerce) while respecting the organic growth pace of community institutions. Conclusion The next phase of rural women entrepreneurship must shift from credit-led inclusion to enterprise-led transformation. If CLFs are empowered as autonomous institutions, finance is diversified beyond debt, and market access is professionalised, DAY-NRLM can evolve from a poverty alleviation programme into India’s largest platform for women-led rural economic growth, social leadership and resilient livelihoods.   Mains Questions Self-Help Groups have emerged as key institutions of economic and social empowerment in rural India. In this context, evaluate the role of Cluster-Level Federations (CLFs) in deepening women entrepreneurship and financial autonomy. What reforms are required to strengthen them? (250 words)   Source: The Hindu  

Archives (PRELIMS  Focus) PM-POSHAN Scheme Category: Government Schemes Context: Recently, a total of 22 states and Union Territories asked the centre to hike the honorarium for PM-POSHAN scheme cooks and helpers. About PM-POSHAN Scheme: Other names: Formerly known as the Mid-Day Meal Scheme, it was renamed in September 2021. Nodal ministry: It is a Centrally Sponsored Scheme implemented by the Ministry of Education. Objective: It aims to provide one hot cooked meal per school day to children studying in Balvatikas (pre-primary), and Classes 1 to 8 across government and government-aided schools. Eligibility: The Scheme is implemented across the country covering all the eligible children without any discrimination of gender and social class. Proposal for breakfast: Several states (e.g., Kerala, Tamil Nadu) and the National Education Policy (NEP) 2020 have advocated for adding breakfast to the scheme. Inflation tracking: The Labour Bureau now uses the CPI-Rural Labourers (CPI-RL) to calculate inflation specifically for the PM-POSHAN food basket across 600 villages.  Focus areas: Enhancing nutritional status of school-going children Improving enrolment, retention, and attendance in schools, especially among disadvantaged children Nutritional norms: For Balvatika and Primary classes: 20g pulses, 50g vegetables, and 5g oil For Upper Primary classes: 30g pulses, 75g vegetables, and 7.5g oil Funding Pattern: 60:40 between Centre and States/UTs with legislature 90:10 for the Northeastern and Himalayan States 100% central funding for UTs without legislature. Source: The Indian Express                   Indian Coast Guard Category: Defence and SecurityContext: Prime Minister Narendra Modi recently extended greetings to the Indian Coast Guard (ICG) on its 50th Raising Day. About Indian Coast Guard (ICG): Nature: It is a multi-mission organization, conducting round-the-year real-life operations at sea. Nodal ministry: It is a maritime armed force operating under the Ministry of Defence, Government of India.  Objective: Raised on February 1, 1977, the ICG was envisioned to address emerging maritime challenges and safeguard India’s expanding marine interests. Establishment: It was formally established in 1978 by the Coast Guard Act, 1978 as an independent Armed force of India. Headquarters: The Headquarters of the ICG is located in New Delhi, and is under the command of the Director General Indian Coast Guard. Moto: Its motto is “VAYAM RAKSHAMAH” (WE PROTECT). Capability: From its humble beginnings in 1977 with just seven surface platforms, the ICG has evolved into a formidable maritime force comprising 155 ships and 80 aircrafts today. Focus areas: To protect our ocean and offshore wealth, including oil, fish, and minerals. To assist mariners in distress and safeguard life and property at sea. To enforce maritime laws with respect to the sea, poaching, smuggling, and narcotics. To preserve the marine environment and ecology and protect rare species. To collect scientific data and back up the Navy during war. Maritime Security Architecture (Layered Grid): In the post-26/11 security framework, the ICG is part of a three-tier grid:  Outer layer: Indian Navy (International Maritime Boundary Line). Intermediate layer: Indian Coast Guard (Territorial Waters and EEZ). Inner layer: State Marine Police (Shallow coastal areas) Source: News 18 United Nations Commission for Social Development Category: International OrganisationsContext: The Minister of State for Women and Child development to lead the Indian delegation at the 64th Session of the United Nations Commission for Social Development (CSocD). About United Nations Commission for Social Development (CSocD): Nature: It is a functional commission of the UN Economic and Social Council (ECOSOC). Evolution: Originally established in 1946 as the “Social Commission,” it was renamed in 1966 to better reflect its developmental focus.  Objective: It focuses on advancing international cooperation on social development issues, including social inclusion, equity, and welfare-oriented policies. Existence: It has been in existence since the very inception of the United Nations, advising ECOSOC and governments on a wide range of social policy issues and from the social perspective of development. Membership: Originally 18, membership has been increased several times, most recently in 1996, and now stands at 46. Members are elected by ECOSOC based on equitable geographical distribution for four-year terms.  Meetings: The CSocD meets every year at the United Nations Headquarters in New York, typically in February. Focus areas: Its primary purpose is to advance social development and formulate policies and recommendations to address global social issues. It focuses on topics such as poverty eradication, social inclusion, and the promotion of equitable and sustainable development. Since the 1995 World Summit for Social Development in Copenhagen, the CSocD has been the key UN body in charge of the follow-up and implementation of the Copenhagen Declaration and Programme of Action. Recent developments: 63rd Session (2025): The theme focused on “Strengthening solidarity, social inclusion, and social cohesion” to accelerate the 2030 Agenda. 64th Session (2026): It is scheduled to take place from 2 to 11 February 2026 in New York. Source: PIB New Ramsar Sites Category: Environment and EcologyContext: Recently, Union Minister for Environment, Forest and Climate Change announced that Patna Bird Sanctuary and Chhari-Dhand have been included in the Ramsar sites list. About Patna Bird Sanctuary: Location: It is located in the state of Uttar Pradesh. Composition: It consists of freshwater marshes, woodlands and grasslands, and is surrounded by agricultural landscapes. Area: It is the smallest bird sanctuary in Uttar Pradesh, covering an area of approximately 1.09 sq. km (108 hectares). Status: Established in 1991, it is also designated as an Important Bird and Biodiversity Area (IBA) by BirdLife International. Wetland type: It is a natural, freshwater, rain-fed wetland (shallow depression) characteristic of the Gangetic plains. Cultural significance: The sanctuary houses an ancient Shiva temple, and the local religious sentiment against hunting has contributed to the “tameness” of the birds found there. Flora and fauna: It consists of 178 bird species and 252 plant species. About Chhari-Dhand Wetland: Location: It is located in Kutch, Gujarat. Nature: It is a seasonal saline wetland situated between the famous Banni grasslands and salt flats of Kutch. Nomenclature: “Chhari” means saline and “Dhand” means a shallow lake in the local language. Type: It becomes swampy during the monsoon, fed by north-flowing rivers and runoff from surrounding hills. Conservation status: It was declared Gujarat’s first Conservation Reserve in 2008. It is designated as a Ramsar Site in 2026, making it Gujarat’s 5th such site (alongside Nal Sarovar, Thol, Khijdia, and Vadhwana). Fauna: It supports species such as critically endangered sociable lapwing, the vulnerable common pochard, and, notably, common cranes (Grus grus) annually. Flora: It features unique arid-adapted plants like the Indian gum tragacanth and the critically endangered Indian bdellium-tree (Commiphora wightii). Source: PIB Open Acreage Licensing Policy (OALP) Category: EconomyContext: Oil India undertook a seismic study of the blocks it was awarded during the ninth round of the Open Acreage Licensing Policy to chart a bidding strategy for the tenth round. About Open Acreage Licensing Policy (OALP): Launch: It was introduced by the Government of India (GoI) as a part of the Hydrocarbon Exploration and Licensing Policy (HELP) on March 30, 2016. HELP replaced the New Exploration and Licensing Policy (NELP) regime, which was in existence for over 18 years.  Nature: OALP is a major reform that changed how companies can apply for oil & gas exploration blocks in India. Under the OALP, the company has the option to undertake prospecting for fuels in areas which are not notified by the GoI.  Difference from previous system: Until the OALP was introduced, exploration for hydrocarbons was allowed only in the case of areas covered by the tenders issued by the Government of India (GoI). Process: The OALP gives a company the opportunity to prospect for fuels in any area where the technical feasibility study indicates the presence of hydrocarbons. Once the feasibility study shows the presence of hydrocarbons, the company can proceed with the exploration after obtaining permission from the Directorate General of Hydrocarbons (DGH). If multiple requests for sanction are received for the same area, the DGH will make an allotment by conducting an auction.  National Data Repository (NDR): The OALP regime also allows companies access to seismic data at the National Data Repository (NDR). A crucial pillar of OALP, the NDR is a centralized online database providing geological and seismic data, allowing investors to make informed decisions before bidding. Significance: Quick exploration: Under the OALP the exploration can be made without waiting for an announcement from the GoI that an area is available for exploration. Ease of doing business: By removing “red-tapism” and administrative discretion, it aims to attract global energy giants. Energy security: The policy supports India’s goal of reducing crude oil import dependency (historically targeted at a 10% reduction) by boosting domestic production. Source: The Hindu (MAINS Focus) “ Budget 2026: Managing Growth Amid Global Uncertainty” (UPSC GS Paper III – Indian Economy: Growth, Budgeting, Manufacturing, Infrastructure, External Sector) Context (Introduction) Budget 2026 is framed amid heightened geopolitical and geoeconomic uncertainty, trade disruptions, tariff wars, and fragile global supply chains. Instead of headline reforms, it adopts a calibrated, multi-sector approach to sustain medium-term growth and economic resilience. Current Economic Situation Growth with fragility: India remains among the fastest-growing major economies (6.5–7%), but manufacturing share in GDP and employment has stagnated, indicating premature deindustrialisation. External shocks: U.S. tariffs on labour-intensive exports (textiles, leather, seafood) and China’s export curbs on critical minerals have heightened vulnerability. Investment slowdown: Fixed capital formation remains modest; net FDI inflows have fallen close to zero as a share of GDP. Import dependence: Rising reliance on imported capital goods, electronics components, rare earths, and intermediates, especially from China. Fiscal backdrop: Post-COVID fiscal consolidation has progressed, but global uncertainty limits space for aggressive deficit reduction. Key Budget 2026 Strategy and Rationale Shift from “Big Bang” to diffusion: Recognising uncertainty, the Budget avoids disruptive reforms and instead deploys multiple targeted interventions across sectors. Manufacturing-centric thrust: Seven strategic sectors identified — semiconductors, electronics, biopharma, chemicals, capital goods, textiles, rare earths — to address import dependence. Correcting inverted duty structures: Reduction in customs duties on capital and intermediate goods to improve domestic value addition and investment incentives. Labour-intensive focus: MSMEs, textiles, leather and seafood targeted to cushion export shocks and preserve employment. Public capex as anchor: With private investment hesitant, government-led infrastructure spending continues as the primary growth driver. Major Budgetary Interventions Capex push: Capital expenditure raised to ₹12.2 lakh crore (4.4% of GDP), highest in over a decade; freight corridors, logistics, rail and waterways prioritised. Semiconductor & electronics: India Semiconductor Mission 2.0 and ₹40,000 crore Electronics Component Manufacturing Scheme to deepen domestic supply chains. Biopharma SHAKTI: ₹10,000 crore over five years to position India as a global biopharma manufacturing hub. Rare earth corridors: Dedicated corridors across Odisha, Kerala, Andhra Pradesh and Tamil Nadu to counter China’s mineral choke points. MSME strengthening: ‘Champion MSMEs’, cluster modernisation, SME Growth Fund to address equity gaps; MSMEs account for ~49% of exports. Export facilitation: Indirect tax rationalisation for textiles, leather, marine exports; logistics support via coastal shipping and inland waterways. Fiscal discipline: Fiscal deficit targeted at 4.3% of GDP; debt-GDP consolidation path maintained despite calls for flexibility. Gaps and Concerns Weak private investment response: Budget relies heavily on public capex; limited measures to revive high-tech FDI or proprietary technology inflows. Manufacturing policy fragmentation: Absence of a comprehensive industrial policy risks sectoral measures remaining disjointed. Employment challenge: Manufacturing employment share continues to decline; services growth shows low employment elasticity amid AI disruption. SEZ dilution: Allowing SEZ units to sell domestically may weaken export orientation instead of addressing structural bottlenecks. Centre–State silence: Fiscal federal issues and upcoming Finance Commission recommendations largely unaddressed. Execution risks: Past delays (e.g., Export Promotion Mission) highlight implementation as the key determinant of success. Way Forward  Integrated industrial policy: Align tariffs, PLI, MSME support, logistics, and skill development under a unified manufacturing strategy. Crowd-in private investment: De-risk FDI through policy stability, faster clearances, and technology partnerships in semiconductors, EVs, and green tech. Domestic demand revival: Link manufacturing push with employment-intensive growth, wage expansion and consumption support. Centre–State coordination: Use capex-linked incentives and GST reforms to ensure States complement central manufacturing and logistics goals. Export diversification: Reduce overdependence on U.S. markets by fast-tracking EU FTA and strengthening trade ties with Global South. Execution-first governance: Time-bound implementation, monitoring dashboards and accountability to convert allocations into outcomes.   Conclusion  Budget 2026 reflects strategic caution in uncertain times, prioritising resilience over spectacle. Its emphasis on public capex, manufacturing depth and supply-chain security is well-calibrated, but success hinges on execution, private investment revival and employment creation. If backed by coherent industrial policy and Centre–State alignment, the Budget can convert current headwinds into a platform for sustained, inclusive growth.   Mains Question Q. “Budget 2026 is a blueprint for reviving manufacturing sector. Critically examine (250 words, 15 marks) Source: The Hindu Budget 2026–27 and the Social Sector: A Quiet Retreat? (GS Paper II – Welfare Schemes, Social Justice, Federalism; GS Paper III – Inclusive Growth) Context (Introduction) Budget 2026–27 is presented amid global uncertainty and a strong domestic capex push. Unlike previous years, it introduces no new flagship welfare schemes, raising concerns about the priority accorded to human development and social protection.   Status of Social Sector Allocations Low nominal growth: Key schemes for vulnerable groups show marginal increases — NSAP (0.2%), Saksham Anganwadi (5.2%), SAMARTHYA, PALNA, PM POSHAN — implying real-term stagnation after inflation. Chronic underspending: Revised Estimates (RE) for 2025–26 are lower than Budget Estimates (BE) across most social sectors, signalling weak implementation capacity or reduced prioritisation. Health & education stagnation: BE 2026–27 increases of only 6.4% (health) and 8.3% (education), while RE 2025–26 fell below BE by 3.7% and 5.2%, respectively. Sharp RE cuts: Urban Development (-41%), Rural Development (-20%), North-East Development (-24%), Social Welfare (-17%) show major mid-year contraction. Flagship dilution: Jal Jeevan Mission RE plunged from ₹67,000 crore (BE) to ₹17,000 crore; PMAY-Grameen and PMAY-Urban REs fell sharply, though 2026–27 allocations merely restore earlier levels.   Key Issues and Structural Concerns Capex-first bias: Over ₹12 lakh crore allocated to capital expenditure without clear evidence of employment generation or private investment crowd-in. Neglect of demand-side: Budget continues supply-side focus despite persistent challenges — educated youth unemployment, low wages, weak purchasing power. Human capital blind spot: Education, nutrition, health and social security — critical for productivity and long-term growth — remain peripheral in fiscal prioritisation. CSS underspending: Centrally Sponsored Schemes fell from ₹5.41 lakh crore (BE 2025–26) to ₹4.20 lakh crore (RE), indicating systemic execution gaps.   Shift of Welfare Burden to States  Changing cost-sharing norms: Post-2015 reforms increased States’ contribution in most CSS; even wage-employment support now follows shared funding. VB-G RAM G example: ₹96,000 crore central allocation requires ~₹56,000 crore State share (60:40), straining State finances. Shrinking State fiscal space: States receive only ~34% of total tax revenue, far below the 41% recommended by the Finance Commission, due to rising cesses and surcharges. Declining grants: Finance Commission grants reduced from ₹1.32 lakh crore (BE 2025–26) to ₹1.29 lakh crore (BE 2026–27). Asymmetry risk: Centre legislates welfare norms while States bear implementation costs, potentially widening inter-State and intra-State inequalities.   Way Forward Rebalance growth strategy: Complement capex with targeted social spending to boost demand, employment and human capital formation. Protect core welfare: Index social sector allocations to inflation and demographic needs, especially for children, women, elderly and disabled. Improve utilisation: Strengthen last-mile delivery, reduce mid-year cuts, and enforce outcome-based monitoring for CSS. Restore fiscal federalism: Reduce cesses/surcharges, enhance untied transfers, and ensure predictable State finances. Integrate policy lens: Recognise education, health, nutrition and social security as economic investments, not residual expenditures.   Conclusion Budget 2026–27 signals continuity in infrastructure-led growth but consolidates a retreat of the Centre from welfare financing. By shifting social sector responsibility to fiscally constrained States and underfunding human development, it risks weakening inclusive growth. Sustained economic resilience requires restoring balance between physical infrastructure and social infrastructure.   UPSC Mains Question Critically analyse the trajectory of social sector expenditure in India since the 1991 economic reforms, with special reference to the priorities reflected in Budget 2026–27. (250 words, 15 marks)   Source: The Hindu   v