RAJ IAS ACADEMY 16th February, 2026 Page 1

RAJ MALHOTRA’S IAS ACADEMY, CHANDIGARH

PRELIMS BOOSTER 2
Industrial Relations Code (Amendment) Bill 2026 2
BNP’s Victory in Bangladesh 3
SC Reconsiders Gender Stereotype Handbook 4
India-U.S.-Bangladesh Textile Trade Dynamics 6
Urban Challenge Fund 7
India’s Power Sector 8
AI Content Labelling Norms 10
Startup India Fund of Funds 2.0 12
PM RAHAT Scheme 12
Lead Bank Scheme (LBS) 12
Combined Maritime Forces 13
PM-DAKSH scheme 13
Semaglutide 14
Dornier 228 Aircraft 14
Chennakeshava Temple 14
Chincha Kingdom 15
Phoenicia 15
MCQs 16
EDITORIAL SIMPLIFIED 18
The Labour Codes 18
India tested in Indo-U.S. relationship 20
 RAJ IAS ACADEMY 16th February, 2026 Page 2

PRELIMS BOOSTER
Industrial Relations Code (Amendment) Bill 2026
Recently, the Lok Sabha passed the Industrial Relations Code (Amendment) Bill 2026, aimed at
preventing potential legal confusion regarding the repeal of older labour laws replaced by the
Industrial Relations Code, 2020.
The amendment seeks to reinforce legal certainty around the repeal and continuity provisions
embedded in the Code.
The debate once again brought the larger issue of labour reforms labour rights to the forefront —
a recurring theme in contemporary Indian polity and governance.

Background -
• The Industrial Relations Code, 2020 is one of the four Labour Codes enacted to consolidate and
rationalise India’s labour laws.
• It subsumed three major legislations:
• The Trade Unions Act, 1926 (dealt with trade union recognition)
• The Industrial Employment (Standing Orders) Act, 1946 (conditions of employment)
• The Industrial Disputes Act, 1947 (industrial dispute resolution)
• The objective was to streamline labour regulations under a uni ed framework and promote
ease of doing business (EoDB) while protecting worker rights.

Why the Amendment?

• Issue of repeal and legal clarity —
• Section 104 of the 2020 Code already provides for repeal of the above Acts. However,
concerns emerged that there could be future legal challenges claiming that repeal power
was improperly delegated to the executive.
• Confusion may arise over whether repeal occurred automatically or via government
noti cation.
• The 2026 amendment —
• It clari es that repeal occurred by operation of Section 104 itself.
• Reinforces savings provisions ensuring continuity of actions taken under old laws.
• Prevents “future unwarranted complications.”
• In essence — This is a legal housekeeping exercise, but one with constitutional implications
relating to delegated legislation and legislative competence.

Government’s Position -
• The Union Labour Minister defended the amendment and the broader labour codes as reforms
for labour welfare.
• Key claims: These
• Guarantee of minimum wages
• Mandatory issuance of appointment letters
• Uniform wages irrespective of gender (equal pay for equal work)
• Greater transparency and formalisation of labour relations
• Commitment to balancing worker welfare and industrial growth
• The government framed the reform as a historic structural change aimed at protecting labourers
while enhancing economic e ciency.

Opposition’s Criticism -
• Opposition parties raised sharp concerns calling reforms as anti-labour.
• Major objections —
• The Code allegedly enables “ease of ring” without “ease of hiring.”
• This results in weakening of job security, potential increase in working hours, favouring
corporates over workers.
• Retrospective amendment re ects complete failure of government, as this repealing of the
old Act should have been done before the new law was passed.
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• The Opposition also linked labour unrest and strike calls to dissatisfaction with the
government’s approach.

Challenges and Way Forward -

• Trust de cit: Persistent suspicion among trade unions and opposition parties. Structured
dialogue with trade unions.
• Implementation gap: Ensuring uniform enforcement across states. Transparent rule-making at
state level.
• Balancing act: Promoting investment while protecting labour rights. Clear communication on
safeguards against arbitrary termination. Strengthening labour inspection and compliance
systems.
• Judicial scrutiny: Possibility of constitutional challenges. Judiciary must balance labour rights
and EoDB.
• Industrial unrest: Strikes and labour mobilisation. Periodic review mechanisms to assess
impact on employment and industrial relations. A reform of this scale must be both
economically rational and socially sensitive.

Conclusion -
• The Industrial Relations Code (Amendment) Bill 2026 may appear technical, but it underscores a
larger debate: How should India modernise its labour regime in a fast-changing economy?
• The amendment primarily seeks to eliminate legal ambiguity regarding repeal of older labour
laws.
• However, the political contestation around it reveals deeper anxieties about worker protections,
job security, and the balance between capital and labour.
• For a country aspiring to become a global manufacturing hub, labour reform is inevitable.
• The real test lies not in legislative consolidation alone, but in ensuring that reform translates into
industrial harmony, social justice, and inclusive growth.

BNP’s Victory in Bangladesh

The Bangladesh Nationalist Party (BNP), led by Tarique Rahman, secured a decisive victory in
the recent elections, emerging on course for a two-thirds majority in the 300-member Parliament.
The polls, the rst since Sheikh Hasina’s ouster in August 2024, also saw a signi cant rise in seats
for the Jamaat-e-Islami.
Prime Minister Narendra Modi congratulated Rahman on his “decisive victory.” The outcome
marks a turning point for India–Bangladesh relations, which have faced uncertainty since Hasina’s
removal, and will shape the trajectory of bilateral ties in the coming years.

India and the BNP: A Complex Political Legacy -

• India’s engagement with the Bangladesh Nationalist Party (BNP) dates back to its founding in
1978 by General Ziaur Rahman.
• After his assassination, Khaleda Zia led the party for decades, shaping its ideology.
• Tarique Rahman assumed leadership after her death and returned to Bangladesh following 17
years in self-exile.
• Strained Ties During 2001–2006 —
• Relations between India and Bangladesh were tense during the BNP-Jamaat coalition
government (2001–2006).
• India raised concerns over insurgent and terror groups operating from Bangladeshi soil,
allegedly with protection from Jamaat leaders, posing security challenges for India’s
Northeast.
• When Sheikh Hasina returned to power in 2008, her government launched a crackdown on
insurgent groups, strengthening counter-terror cooperation with India.
• While New Delhi welcomed the improved security environment, Hasina also used anti-terror
measures to target political opponents, including BNP and Jamaat leaders.
• Post-Hasina Political Realignment —
• Following Hasina’s removal amid protests in 2024, the political landscape shifted rapidly.
• With the Awami League barred from contesting and Hasina in India, the BNP and Jamaat-e-
Islami have emerged as dominant forces in Bangladesh’s current political environment.
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India’s Diplomatic Pivot After BNP’s Victory -

• PM Modi quickly congratulated Tarique Rahman on his victory, even before o cial results were
declared.
• The prompt message signalled India’s readiness to engage constructively with the incoming
BNP government.
• India had earlier extended diplomatic outreach after Khaleda Zia’s death, with EAM S.
Jaishankar visiting Dhaka in December to convey condolences—helping stabilise bilateral ties.
• Conciliatory Tone from BNP —
• During the campaign and after his return from exile, Rahman avoided anti-India rhetoric and
adopted an inclusive tone, emphasising safety and unity across religious communities.
• This moderation has been positively received in both Delhi and Dhaka.
• The BNP’s manifesto outlines a foreign policy centred on “Bangladesh Before All” and
stresses equality and self-dignity in external relations—phrased as “Friend Yes, Master No,”
an indirect assertion of balanced ties with India.
• The BNP manifesto also emphasises non-interference in internal matters—interpreted as
a signal of zero tolerance for anti-India activities within Bangladesh, while also safeguarding
its sovereignty.
• Jamaat’s Position and Regional Focus —
• Jamaat-e-Islami has similarly adopted conciliatory language, advocating peaceful and
cooperative relations with neighbouring countries, including India.
• Notably, neither party’s manifesto mentions Pakistan, despite recent diplomatic engagement
during the interim government.
• However, both BNP and Jamaat stress strengthening ties with the “Muslim world,” signalling
a broader strategic orientation alongside regional diplomacy.

Key Challenges for India in the Post-Hasina Era -

• The Hasina Extradition Question — Sheikh Hasina’s continued presence in India is politically
sensitive. The BNP leadership may face pressure, especially from Jamaat, to seek her
extradition and prevent politically provocative statements from Indian soil.
• Preserving Economic Interdependence — Bangladesh is India’s largest trading partner in
South Asia, with strong ties in textiles, energy, and other sectors. Sustaining stable trade
relations is vital for economic and political stability on both sides.
• Preventing Security Deterioration — India remains concerned about any resurgence of anti-
India insurgent or extremist activity reminiscent of earlier BNP tenures. Maintaining security
cooperation is a priority, with communication channels open even with Jamaat leaders.
• Connectivity and Development Projects — Delhi seeks continuity in infrastructure and
connectivity projects linking Northeast India to Bangladesh. However, anti-India sentiment in
Bangladesh requires sensitive handling of these initiatives.
• Strengthening People-to-People Ties — Bangladeshis frequently travel to India for healthcare
and tourism. Expanding long-term and multiple-entry visa systems and improving service
infrastructure can deepen goodwill.
• Managing Migration Sensitively — Economic migration from Bangladesh remains politically
charged in several Indian states. The issue requires cooperative, non-confrontational
management to avoid bilateral strain.
• Preventing Extremist and Anti-Minority Trends — India is wary of any extremist or anti-
minority shift in Bangladesh. Ultimately, safeguarding pluralism depends on domestic leadership
in Bangladesh, beyond external statements of concern.
• Avoiding Strategic Realignment — Strong bilateral cooperation can help prevent Bangladesh
from drifting towards Pakistan or China, preserving regional stability.

SC Reconsiders Gender Stereotype Handbook

The Supreme Court has signalled a shift in its approach to gender sensitivity by moving beyond
the 2023 Handbook on Combating Gender Stereotypes, issued under former CJI D Y
Chandrachud. Current Chief Justice Surya Kant described the handbook as overly academic and
stressed the need for more practical, ground-level judicial training.
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The observations arose during a suo motu hearing of an Allahabad High Court ruling that had
controversially termed certain acts—such as grabbing a victim’s breasts and loosening her
pyjama string—as mere “preparation” rather than an “attempt” to rape. The Supreme Court had
earlier stayed the judgment and, later, formally set it aside.
The bench directed the trial court to proceed with attempt-to-rape charges, underscoring the
judiciary’s commitment to a more sensitive and legally sound interpretation in sexual assault
cases.

Shift from Handbook to Institutional Training -

• During the hearing, the Supreme Court questioned the practical utility of the 2023 Handbook on
Combating Gender Stereotypes.
• The bench observed that the handbook relied on “forensic meanings” — technical or clinical
interpretations — which may not re ect survivors’ lived realities or common social
understanding.
• CJI Surya Kant described the document as “too Harvard-oriented,” suggesting it was overly
theoretical and disconnected from India’s ground realities.
• The Court noted that merely issuing a handbook to guide High Court judges “serves no
purpose” if it does not translate into meaningful change.
• Instead of relying on advisory texts, the bench emphasised the need for structured institutional
reform.
• Role of the National Judicial Academy —
• The Court directed the National Judicial Academy (NJA), Bhopal, to constitute a committee
of domain experts, academics, and lawyers to draft practical training guidelines.
• These will become part of the NJA’s curriculum for High Court judges.
• Once nalised, judges will undergo batch-wise training focused on handling sexual assault
cases with sensitivity and legal clarity.
• Senior advocates have been engaged to assist in re ning the new guidelines, ensuring they
balance legal precision with survivor-centric sensitivity.

Inside the 2023 Gender Stereotypes Handbook -

• Released in August 2023, the 35-page Handbook on Combating Gender Stereotypes aimed to
eliminate patriarchal language and biased reasoning from judicial decisions.
• In his foreword, then CJI D.Y. Chandrachud emphasised that language shapes justice, warning
that stereotypes distort the law’s application to women.
• Reforming Courtroom Language —
• A major section of the handbook provided a glossary identifying “Incorrect” (stereotype-
promoting) terms and suggesting “Preferred” alternatives.
• Examples of Suggested Changes
• “Adulteress” → “Woman who has engaged in sexual relations outside marriage”
• “Eve teasing” → “Street sexual harassment”
• “Child prostitute” → “Child who has been tra cked”
• “Housewife” → “Homemaker”
• Avoiding terms like “fallen woman” or “woman of easy virtue”
• On “survivor” vs “victim,” it stated that both are valid but the individual’s preference should
be respected.
• Challenging Judicial Reasoning Patterns —
• Beyond vocabulary, the handbook sought to dismantle stereotypes in judicial thinking,
particularly in sexual o ence cases.
• Inherent Characteristics - It rejected assumptions such as:
• Women are overly emotional or illogical
• All women want children
• Young women cannot take major life decisions
• The handbook clari ed that gender does not determine rationality or autonomy.
• Gender Roles - It challenged beliefs that:
• Working women are negligent mothers
• Women must be submissive
• rea rmed constitutional guarantees of equality and dignity.
It
• Approach to Sexual Violence Cases —
• The handbook addressed evidentiary misconceptions in rape trials:
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• Clothing, alcohol consumption, or lifestyle do not imply consent.
• Lack of physical resistance does not equal consent.
• Absence of injuries does not invalidate testimony.
• Judicial Precedents Cited —
• The handbook grounded its guidance in Supreme Court rulings, including:
• State of Punjab v. Gurmit Singh (1996) — Survivor testimony is inherently credible.
• State of Jharkhand v. Shailendra Kumar Rai (2022) — Banned the “two- nger test”.

India-U.S.-Bangladesh Textile Trade Dynamics

The U.S.-Bangladesh reciprocal trade agreement, granting zero reciprocal tari s on select
apparel, has triggered concerns for Indian textile exporters.

Background of the U.S.-Bangladesh Textile Deal -

• The United States has agreed to establish a mechanism under which certain textile and apparel
goods from Bangladesh will receive a zero reciprocal tari rate.
• However, this bene t is conditional. The zero reciprocal tari will apply only to a speci ed
volume of imports and will be linked to the use of U.S.-produced cotton and man-made bre
(MMF) textile inputs.
• This development is signi cant because Bangladesh is one of the largest exporters of garments
to the U.S., competing directly with India, China, and Vietnam.

Structure of Bangladesh’s Textile Industry -

• Bangladesh exported garments worth $50.9 billion globally in 2024, with $7.4 billion going to the
U.S.
• Its industry model is heavily dependent on imported textile inputs. In 2024, Bangladesh
imported textile inputs worth $16.1 billion, of which $3.1 billion came from India.
• Bangladesh imports around 85 lakh bales of cotton annually from Brazil, India, and African
countries. India alone exported 12-14 lakh bales of cotton and $1.47 billion worth of cotton yarn
to Bangladesh in 2024-25.
• This indicates that Bangladesh’s garment exports are deeply integrated with Indian raw material
supply chains.

India’s Exposure to the U.S. Market -

• India exports approximately $16 billion worth of garments annually, with nearly one-third going
to the U.S.
• Both India and Bangladesh primarily produce cotton-based apparel. Therefore, any preferential
access granted to Bangladesh directly a ects Indian exporters competing in the same market
segment.
• Currently, Indian goods face an 18% reciprocal tari in the U.S., while Bangladeshi goods will
face 19%, reduced from 20%.
• Thus, the tari di erential between India and Bangladesh has narrowed signi cantly.

India-U.S. Cotton Trade -

• India imports around ve lakh bales of U.S. cotton annually, including 2.5 lakh bales of extra-
long staple (ELS) cotton such as American PIMA.
• India levies an 11% import duty on cotton, except for ELS cotton. Indian mills are already
nominated by American brands to supply yarn made from U.S. cotton.
• The Union Commerce Ministry has stated that Indian garment exporters will receive similar
access bene ts to the U.S. market as Bangladesh.
• However, operational clarity on this promise is still awaited.

Possible Shift in Trade Dynamics -

• Bangladesh may replace Indian cotton with U.S.-produced cotton to qualify for zero reciprocal
tari s.
• If this happens, the immediate impact will be on Indian cotton and yarn exporters supplying
Bangladesh.
• However, analysts note that over 63% of Bangladesh’s garment exports go to the European
Union duty-free.
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• Since its supply chains are oriented toward European buyers, restructuring production to use
U.S. cotton may require signi cant investment in spinning and fabric processing capacity.

Key Concerns for Indian Exporters -

• Several practical concerns remain —
• Whether India will waive the 11% import duty on U.S. cotton to ensure competitiveness?
• How the U.S. will determine the quantity of U.S. cotton content in garments?
• Whether increased demand will push up U.S. cotton prices, reducing cost competitiveness?
• Whether bene ts apply only to reciprocal tari s or also to basic duties?
• Both India and Bangladesh exporters will get relief only from the reciprocal tari if they use U.S.
cotton, not from the basic duty.
• If U.S. cotton becomes expensive due to higher demand, garments made from it may not
remain competitive compared to those made from cheaper global cotton.

Broader Strategic Implications -

• The development highlights three structural issues:
• Growing importance of rules-of-origin conditions in trade agreements.
• Increasing integration of trade with supply-chain geopolitics.
• Need for India to align domestic tari policy with export competitiveness.
• India’s textile industry is the largest employment generator after agriculture.
• Hence, any shift in global trade patterns has serious economic and employment implications.

Urban Challenge Fund

The Union Cabinet has approved the launch of the Urban Challenge Fund (UCF). The fund will
provide ₹1 lakh crore in central assistance to drive urban development initiatives.
According to the government, the UCF is expected to catalyse a total investment of ₹4 lakh crore
over the next ve years in the urban sector, signi cantly boosting city infrastructure and
development.
The approval comes alongside the Centre’s clearance of projects worth about ₹1.6 trillion ($18
billion) focused on infrastructure, urban development, and startup ecosystems.

Urban Challenge Fund (UCF): Budget Announcement and Allocations -

• The UCF was rst announced in the Union Budget 2025–26 by Finance Minister Nirmala
Sitharaman.
• The fund, with a proposed corpus of ₹1 lakh crore, aims to support projects focused on cities as
growth hubs, creative urban redevelopment, and improvements in water and sanitation
infrastructure.
• An initial allocation of ₹10,000 crore was proposed for 2025–26, though operational rules were
still pending at the time.
• In the Union Budget 2026–27, another ₹10,000 crore was allocated to continue the rollout of the
fund.

About Urban Challenge Fund -

• It is a new centrally sponsored scheme of the Ministry of Housing and Urban A airs.
• The Fund aims to build resilient, productive, inclusive and climate-responsive cities,
positioning those as key driver of the country’s next phase of economic growth.
• Features of the Urban Challenge Fund —
• A minimum of 50 per cent of project nancing have to be mobilised from market
sources, including municipal bonds, bank loans and Public–Private Partnerships (PPPs).
The remaining share may be contributed by States, Union Territories (UTs), Urban Local
Bodies (ULBs) or other sources.
• Projects will be selected through a transparent and competitive challenge mode, ensuring
support to high-impact and reform-oriented proposals.
• Focus area — A strong thrust on reforms across Urban Governance, Market & Financial
systems, Operational e ciency, and Urban Planning
• The Fund will cover —
• All cities with a population of 10 lakh or more (2025 estimates);
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• All State and Union Territory capitals not covered above; and
• Major industrial cities with a population of 1 lakh or more
• Additionally, all ULBs in hilly States, North-Eastern States, and smaller ULBs with
population below 1 lakh will be eligible for support under the Credit Repayment
Guarantee Scheme.

Objectives and Vision of the Urban Challenge Fund -

• The UCF aims to mobilise market nancing, encourage private sector participation, and
promote citizen-centric reforms to build high-quality urban infrastructure.
• It seeks to create resilient, productive, inclusive, and climate-responsive cities, positioning urban
centres as engines of India’s next phase of economic growth.
• The initiative represents a shift from traditional grant-based funding to a market-linked, reform-
driven, and outcome-oriented model of urban development.
• The UCF will operate from FY 2025–26 to FY 2030–31, with a possible extension of
implementation up to FY 2033–34.

Coverage and Target Cities Under the Urban Challenge Fund -

• The UCF will cover all cities with a population above 10 lakh, all State capitals, and major
industrial cities with populations exceeding 1 lakh.
• In addition, the Centre will place special emphasis on Tier-II and Tier-III cities, as well as cities in
the North Eastern and hilly regions, ensuring balanced and inclusive urban development across
the country.

Project Focus Areas Under the Urban Challenge Fund -

• The Urban Challenge Fund (UCF) will support projects across three key verticals aimed at
strengthening urban infrastructure and sustainability.
• Cities as Growth Hubs — This vertical focuses on green eld and semi-green eld development,
along with trunk infrastructure creation. It includes projects along transit and economic
corridors, as well as the development of counter-magnets to improve urban mobility and reduce
congestion.
• Creative Redevelopment of Cities — This component emphasises retro tting and upgrading
legacy infrastructure, promoting pedestrian-friendly mobility, and rejuvenating Central Business
Districts and heritage cores. It also supports regeneration of brown eld areas and removal of
negative externalities.
• Water and Sanitation — Under this segment, projects will upgrade water supply, sewerage,
and stormwater systems, and establish water grids. The focus includes Swachhata initiatives,
solid waste management, legacy waste remediation, and integrated water processing systems.

Funding Structure of the Urban Challenge Fund -

• Under the UCF, the Centre will provide 25% of a project’s cost as central assistance, provided
that at least 50% of the funding is raised through market sources.
• The remaining 25% will be contributed by States, Union Territories, urban local bodies, or other
external stakeholders, ensuring shared nancial responsibility and market participation.

India’s Power Sector

A new study by NITI Aayog titled “Scenarios Towards Viksit Bharat and Net Zero” outlines
possible pathways for India’s electricity transition up to 2070.
While coal currently dominates India’s electricity generation, the report projects a long-term
structural shift toward renewable energy (RE).
This shift will be supported by nuclear expansion, storage technologies, and possible
decarbonisation of coal through Carbon Capture, Utilisation and Storage (CCUS).
The study examines two pathways: Current Policy Scenario (CPS) – Continuation of existing
policies, and Net Zero Scenario (NZS) – Accelerated pathway aligned with India’s 2070 net-zero
target.

Present Electricity Landscape - Coal Still the Backbone -

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• Coal accounts for about 74% of electricity generation, providing low-cost base-load power, grid
stability, and round-the-clock reliability.
• Installed capacity (December 2025) —
• Total: 513 GW
• Fossil-based: 48%
• Renewable: 50%
• Nuclear: 1.7%
• However, despite renewables constituting 50% of installed capacity, their contribution to actual
electricity generation remains only about 22% (2024-25).

Structural Constraints in Renewable Energy -

• The gap between renewable capacity and actual generation is due to following structural
challenges -
• Low capacity utilisation factor (CUF): Solar and wind operate below maximum potential
output.
• Intermittency and variability: Solar and wind are weather-dependent, leading to
curtailment, dispatch challenges, and grid instability risks.
• Grid constraints: Limited transmission capacity, and inadequate system exibility.
• Storage de cit: Lack of large-scale long-duration energy storage.
• Because of these constraints, coal continues to provide essential balancing power.

Electricity Mix Projections up to 2070 -

• Under CPS —
• Renewable share in generation is expected to increase from 20% (2024-25) to over 80%
(2070). The respective share of coal and nuclear will be: coal share [74% → 6–10%], and
nuclear [3% → 5–8%].
• Coal capacity may rise from 268 GW (2025) to peak at 450–470 GW by 2050, and gradually
decline afterward.
• Under NZS —
• Coal-based generation could fall to zero by 2070, and coal capacity may peak earlier at
420–435 GW by 2045, and decline sharply thereafter.
• Renewables become the dominant backbone of the grid.

Massive Storage Expansion Required -

• A renewables-heavy grid demands unprecedented storage capacity.
• Battery Energy Storage Systems (BESS) to scale up from less than 50 GW in 2030 to about
1,300-1,400 GW under CPS and up to 2,500-3,000 GW under NZS by 2070.
• Pumped Storage Plants are also expected to play a crucial role in providing long-duration
storage and grid stability, growing from 13-19 GW in 2030 to about 110 GW in CPS and
150-165 GW in NZS.
• Storage becomes central to grid reliability, load balancing, and round-the-clock power supply.

Nuclear Power as Strategic Pillar -

• Targets —
• The study identi es nuclear energy as crucial in a renewable-dominated grid.
• It projects nuclear power capacity to grow from the current 8.18 GW in 2025 to 90-135 GW
by 2070 under CPS — an increase of 10 to 15 times.
• Under the NZS, nuclear capacity could touch 295-320 GW.
• Key roles of nuclear energy —
• Firm low-carbon base-load power
• Industrial high-temperature heat
• Power supply for green hydrogen electrolysers
• Grid balancing support
• The report recommends —
• Advanced reactors
• Small Modular Reactors (SMRs)
• Transition of captive coal plants to SMRs. This helps reuse existing land, transmission
connectivity, and industrial infrastructure.
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Coal’s Continuing Role in Transition -

• Despite the clean energy push, coal remains indispensable in the near to medium term
because storage remains expensive; nuclear projects have high capital cost, long gestation
period; and renewables face land and clearance challenges.
• In some pathways, coal continues even in 2070 with deep decarbonisation via:
• CCUS: Captures CO₂ from coal plants. Stores underground or reuses it. Prevents
atmospheric emissions.
• This pathway becomes relevant if nuclear expansion slows, renewable deployment faces
cost or grid barriers.

Alternative Pathway Risks -

• If nuclear growth remains limited, solar capacity may need to exceed 5,500 GW, storage
requirements would rise dramatically, and grid stability risks would intensify.
• This creates nancial stress, infrastructure bottlenecks, and land acquisition challenges

Challenges and Way Forward -

• Intermittency of renewables: Rapid scale-up of BESS and Pumped Storage. Improve market
mechanisms for exible dispatch.
• High storage costs: Develop domestic manufacturing ecosystem for storage technologies.
Promote CCUS research and pilot deployment.
• Grid infrastructure inadequacy: Accelerate grid modernisation and transmission expansion.
• Nuclear capital intensity: Fast-track nuclear expansion including SMRs. Encourage industrial
shift to nuclear-based captive power.
• Managing stranded coal assets: Strategic planning to avoid stranded coal assets.

Conclusion -
• India’s electricity transition will not be a simple coal-to-solar swap. It will require a carefully
calibrated mix of renewables, storage, nuclear expansion, grid reform, and transitional coal
support.
• Coal may remain the backbone in the medium term, but by 2070, renewables — supported by
large-scale storage and nuclear power — could decisively reshape India’s energy architecture.
• The real challenge lies not in installing capacity, but in ensuring reliability, exibility,
a ordability, and system stability in a net-zero compatible electricity grid.

AI Content Labelling Norms

The Ministry of Electronics and Information Technology (MeitY) has amended the Information
Technology (IT) Rules, 2021 to mandate labelling of AI-generated content by users and social
media platforms.
The amendment also signi cantly reduces the content takedown timeline — from the earlier 24–
36 hours to just 2–3 hours — for all types of online content, not limited to AI-generated material.
The revised rules will come into e ect from February 20.

AI-Generated Content Under the 2026 IT Rules -

• Mandatory Labelling of Synthetic Content —
• The Information Technology (Intermediary Guidelines and Digital Media Ethics Code)
Amendment Rules, 2026 require social media platforms to prominently label “synthetically
generated” or AI-generated images and videos.
• Platforms with over ve million users must obtain a user declaration for AI-generated
content and conduct technical veri cation before publishing it.
• According to MeitY, the measure aims to combat deepfakes, misinformation, privacy
violations, and threats to national integrity.
• The goal is to ensure users are clearly informed when content is AI-generated or inauthentic.
• Narrowed De nition and Exemptions —
• While the earlier draft had a broader de nition of “Synthetically Generated Information”
(SGI), the nal rules provide exemptions.
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• Automatically retouched smartphone photos and lm special e ects are excluded from
mandatory labelling.
• Prohibited Synthetic Content —
• The rules strictly prohibit certain types of AI-generated material, including:
• Child sexual exploitation and abuse content
• Forged documents
• Information on developing explosives
• Deepfakes falsely impersonating real individuals
• These provisions strengthen safeguards against harmful or unlawful AI use.

Detecting AI-Generated Content: Platform Responsibilities and Technical Standards -

• The government has directed large social media platforms to deploy “reasonable and
appropriate technical measures” to detect and prevent unlawful synthetically generated
information (SGI), while ensuring proper labelling, provenance tracking, and identi er
requirements for permissible AI-generated content.
• According to IT Ministry o cials, major platforms already possess sophisticated AI tools
capable of detecting synthetic content.
• The new rules formalise and mandate the consistent use of these detection systems rather
than introducing entirely new obligations.
• In addition, several AI companies and digital platforms are part of the Coalition for Content
Provenance and Authenticity (C2PA), which has developed technical standards to embed
invisible digital markers in AI-generated content.
• These markers can help other platforms identify such content if automated detection
systems fail.
• While the amended rules refer to “provenance/identi er requirements,” the government has
clari ed that it does not intend to endorse any single technological framework.
• Provenance and identi er requirements de ne the necessary, documented record of a
resource’s origin, ownership, and history, ensuring authenticity and trust.
• Instead, it seeks to institutionalise the broader objective of reliable AI content detection and
traceability through collaborative standards.

Tightened Takedown Timelines Under Amended IT Rules -

• The amended IT Rules signi cantly shorten the timelines for removing unlawful content.
• Government- and Court-Ordered Takedowns: Platforms must now comply within 2–3 hours,
instead of the earlier 24–36 hours.
• User Complaints (General Categories): For issues such as defamation and misinformation,
response time has been reduced from two weeks to one week.
• Sensitive Content Reports (Rule 3(2)(b)): The deadline has been cut from 72 hours to 36
hours.
• The government justi ed these changes by arguing that longer timelines previously allowed
harmful content to cause signi cant damage before removal, making stricter response windows
necessary.

Stricter User Noti cations and Liability Warnings -

• The amended IT Rules introduce tighter obligations for platforms to inform and caution users.
• More Frequent Policy Reminders — Platforms must now notify users of their terms and
conditions every three months, instead of once a year. These noti cations must clearly explain
consequences of non-compliance and reporting obligations.
• Explicit Warnings on AI Misuse —
• Users must be warned that posting harmful deepfakes or other illegal AI-generated content
may lead to:
• Immediate content removal
• Suspension or termination of accounts
• Disclosure of identity to law enforcement agencies
• These changes aim to strengthen accountability and deter misuse of AI-generated content
online.
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Startup India Fund of Funds 2.0

Recently, the Union Cabinet chaired by the Prime Minister of India approved the establishment of
the Startup India Fund of Funds 2.0 (Startup India FoF 2.0).

About Startup India Fund of Funds 2.0 -

• It is launched under the Startup India initiative.
• It is designed to accelerate the next phase of India’s startup journey by mobilising long-term
domestic capital, strengthening the venture capital ecosystem, and supporting innovation-
led entrepreneurship across the country.
• Features of the Scheme: It will have a targeted, segmented funding approach to support:
• Deep tech and tech-driven innovative manufacturing: Prioritising breakthroughs in high-
tech areas that require patient, long-term capital.
• Empowering early-growth stage founders: Providing a safety net for new and innovative
ideas, reducing early-stage failures caused by lack of funding.
• National reach: Encouraging investment beyond major metros so that, the innovation
thrives in every corner of the country.
• Designed to address high‑risk capital gaps: Directing greater capital to priority areas
which are important for self-reliance and boosting economic growth.
• Strengthen India’s domestic venture capital base, particularly smaller funds to further
boost the domestic investment landscape.

PM RAHAT Scheme
Recently, government of India launched the PM RAHAT (Road Accident Victim Hospitalisation and
Assured Treatment) Scheme.

About PM RAHAT Scheme -

• It has prioritised life-saving intervention, nancial certainty for hospitals, and a structured
emergency response system for accident victims.
• Features of PM RAHAT Scheme —
• It will be integrated with the Emergency Response Support System (ERSS) enabling
victims, Good Samaritans to locate the nearest designated hospital and request
ambulance assistance.
• Under the Scheme, every eligible road accident victim on any category of road will be
entitled to cashless treatment up to ₹1.5 lakh per victim.
• It is implemented through amalgamating the Electronic Detailed Accident Report
(eDAR) platform of the Ministry of Road Transport and Highways with the Transaction
Management System (TMS 2.0) of the National Health Authority.
• Reimbursement: To hospitals will be made through the Motor Vehicle Accident Fund
(MVAF).
• In cases where the o ending vehicle is insured, payment will be drawn from
contributions made by General Insurance Companies.
• In uninsured and Hit & Run cases, payment will be made through budgetary allocation
by Government of India.
• Grievance Redressal: Grievances will be addressed by a Grievance Redressal
O cer nominated by the District Road Safety Committee chaired by the District
Collector / District Magistrate.

Lead Bank Scheme (LBS)

The Reserve Bank of India (RBI) recently issued the draft circular on the revised guidelines for the
Lead Bank Scheme (LBS) for public comments.

About Lead Bank Scheme (LBS) -

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• On the recommendations of the Nariman committee, the LBS was introduced by the
Reserve Bank of India in 1969.
• Aim — Coordinating the activities of banks and other developmental agencies in order to
achieve the objective of enhancing the ow of bank nance to the priority sector and other
sectors and to promote banks' role in the overall development of the rural sector
• For coordinating the activities in the district, a particular bank is assigned ‘Lead Bank’
responsibility of the district.
• The Lead Bank is expected to assume a leadership role for coordinating the e orts of the credit
institutions and the Government.
• For the preparation of District Credit Plans and monitoring their implementation, a Lead
bank O cer (LBO), now designated as Lead District Manager was appointed in 1979.

Combined Maritime Forces

Recently, the Indian Navy has assumed command of Combined Task Force (CTF) 154, a key
multinational training task force under the Combined Maritime Forces (CMF).

About Combined Maritime Forces -

• It is a multinational maritime partnership that upholds the International Rules Based Order
(IRBO) by countering illicit non-state actors on the high seas.
• It promotes security, stability and prosperity across international waters, which encompass
some of the world’s most important shipping lanes.
• Mandate — Its main focus areas are counter-narcotics, counter-smuggling, suppressing
piracy, encouraging regional cooperation, and engaging with regional and other partners to
strengthen relevant capabilities and promote a safe maritime environment free from illicit non-
state actors.
• CMF has ve Combined Task Forces —
• CTF 150(Maritime Security Operations outside the Arabian Gulf)
• CTF 151(Counter-Piracy)
• CTF 152(Maritime Security Operations inside the Arabian Gulf)
• CTF 153(Red Sea Maritime Security)
• CTF 154(Maritime Security Training)
• Member Countries — It comprises 47 nations including India.
• The member countries are not bound by either a xed political or military mandate.

PM-DAKSH scheme
Recent data released in the Lok Sabha revealed that Less than half of the students trained under
the PM-DAKSH scheme between 2021 and 2024 were placed.

About PM-DAKSH scheme -

• The Pradhan Mantri Dakshata Aur Kushalata Sampanna Hitgrahi (PM-DAKSH) Yojana, is a
Central Sector Scheme.
• Aim — To provide skills through good quality institutions so that candidates from its target
group can nd employment.
• There are four types of skill development training programmes under this namely, Up-
skilling/Re-skilling, Short Term Training Programmes, Long Term Training Programmes,
and Entrepreneurship Development Programme.
• Target Group: Scheduled Castes, Other Backward Castes, Economically Weaker Sections,
and the De-noti ed Tribes in India (DNTs), ‘Safai Karamcharis’ or waste pickers.
• Eligibility —
• Age: 18-45 years
• OBC and EWS candidates must have a family income below Rs. 3 lakh, while there is no
income limit for SC, DNT, or Safai Mitras/Waste Pickers.
• It has been merged with the Pradhan Mantri Kaushal Vikas Yojana of Ministry of Skill
Development and Entrepreneurship.
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Semaglutide
Hyderabad-based Natco Pharma recently received approval from the Central Drugs Standard
Control Organisation (CDSCO) to manufacture and market generic semaglutide injection in India.

About Semaglutide -
• It belongs to a class of medications known as glucagon-like peptide-1 receptor agonists, or
GLP-1 RAs.
• It mimics the GLP-1 hormone, released in the gut in response to eating.
• One role of GLP-1 is to prompt the body to produce more insulin, which reduces blood sugar
(glucose).
• For that reason, semaglutide is used for the following —
• to control blood sugar levels in certain patients with type 2 diabetes (a condition in which
blood sugar is too high because the body does not make or use insulin normally).
• to reduce the risk of a heart attack, stroke, or death in adults with type 2 diabetes, heart
and blood vessel disease, also in adults who are obese or overweight.
• to reduce the risk of worsening of kidney disease and death in certain adults with type 2
diabetes and kidney disease
• to assist with weight loss in certain people who are obese or overweight and have weight-
related medical problems.

Dornier 228 Aircraft

Recently, the Defence Ministry has signed a contract with Hindustan Aeronautics Limited (HAL),
Transport Aircraft Division, Kanpur, for the acquisition of eight Dornier 228 Aircraft.

About Dornier 228 Aircraft -

• It is a highly versatile multi-purpose light transport aircraft.
• It has been developed speci cally to meet the manifold requirements of utility and commuter
transport, third level services and air-taxi operations, coast guard duties and maritime
surveillance.
• Features of Dornier 228 Aircraft —
• It is powered by a pair of Garrett TPE331 turboprop engines and has a supercritical wing
that generates large amounts of lift at slow speeds.
• It is a twin-turboprop aircraft known for its reliable performance and short takeo and
landing (STOL) capabilities.
• The STOL capabilities, allows it to operate from unprepared, unpaved, and grass
surfaces and specialise in hot and high environments.
• It has the unique design of the TNT wing, capable of generating large amounts of lift at slow
speeds.
• The Dornier 228 is typically promoted for its versatility, low operational costs, and high
levels of dispatch reliability.

Chennakeshava Temple
The Prime Minister’s new o ce complex, Seva Teerth has been built in the Indian architectural
tradition inspired by the features of the 12th-century Chennakeshava Temple.

About Chennakeshava Temple -

• The Chennakeshava Temple, also referred to as the Keshava, or Vijayanarayana Temple of
Belur, is a 12th-century temple in Karnataka.
• It is a Hindu temple dedicated to Lord Vishnu.
• It was commissioned by King Vishnuvardhana in 1117 CE (after a major military victory in
1116 CE over the Cholas in the great battle of Talakkad), on the banks of the Yagachi River in
Belur, also known as Velapura.
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• The temple is listed as a UNESCO World Heritage Site.
• Architecture —
• It is a stunning example of Hoysala architecture.
• The Hoysalas used soft soapstone for their structures, as they were found suitable for
intricate carvings.
• Enclosed by a Prakara with a Gopura built in the Vijayanagar style, the temple stands on
a platform, or Jagati, and looks like a huge casket.
• The outer walls of the temple are adorned with intricate carvings, which depict various
gods, goddesses, and mythical creatures.
• There are Madanika sculptures in the temple, dancing, hunting, standing under canopies of
trees.
• One of the unique features of the Chennakeshava Temple is the stepped well, which is
located in the temple complex.

Chincha Kingdom
New archaeological evidence reveals that seabird guano – nutrient-rich bird droppings - may have
been a major factor in the rise of Peru’s precolonial Chincha Kingdom.

About Chincha Kingdom -

• The 'Chincha Kingdom,' which was established in the coastal region of modern-day Peru,
was a powerful ancient state that ourished before the rise of the Inca Empire.
• It ruled the Chincha Valley.
• The Chincha Kingdom and its culture were very strong between 900 CE and 1450 CE. This time
is known as the Late Intermediate Period in pre-Columbian Peru.
• It was organised into specialist communities such as sherfolk, farmers, and merchants.
• The Chinchas did not build enormous cities but left important marks in their religious and
administrative constructions.
• Their temples, palaces, and fortresses were built mainly with adobe, a technique they
mastered skillfully.
• They applied stucco to decorate walls, shaping gures of sh heads, gannets, and
seabirds.
• The dwellings of most of their inhabitants were built around these enclosures, made with
mats and reeds.
• An important old ruin linked to the Chincha is La Centinela, found near the city of Chincha
Alta.
• Decline —
• Conquered by the Inca Empire around 1476 CE.
• Later a ected by Spanish conquest in the 16th century.
The population drastically declined due to diseases and colonisation.
• A new analysis suggests that the secret to the Chincha Kingdom's prosperity was seabird
droppings (guano).
• The analysis indicates that the nutrient-rich droppings, high in nitrogen, acted as a fertiliser,
increasing corn yields and signi cantly contributing to the economic development of the
time.

Phoenicia
Archaeologists excavating near ruins on the island of Sardinia discovered an Iron Age scarab
amulet that originated from ancient Phoenicia.

About Phoenicia -
• Phoenicia was an ancient region at the eastern end of the Mediterranean Sea.
• It covered the land where the present day Lebanon is located.
• The Phoenicians lived on the seacoast and were skilled shipbuilders and navigators.
• Their trade routes reached as far as Spain and the British Isles.
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• The Phoenicians traded wood, linen, dyes, and wine.
• They also carved wood and ivory and worked with metals and glass.
• The art of glassblowing was probably invented in Phoenicia.
• The Phoenician alphabet was the source of the Greek alphabet and of the Latin alphabet,
which most people use today.
• They built the cities of Sidon, Tyre, and Berot (modern Beirut).
• The Phoenicians set up colonies all around the Mediterranean. Carthage, in North Africa,
was a very successful colony.
• Decline —
• Over the centuries a number of foreign powers controlled all or parts of Phoenicia. They
included Egypt, Assyria, Babylonia, and Persia.
• The Macedonians, led by Alexander the Great, conquered Phoenicia in 332 BCE.
• In 64 BCE Phoenicia became a part of the Roman Empire.

MCQs
1. With reference to the Urban Challenge Fund, recently seen in the news, consider the
following statements -
1. It is a Centrally Sponsored Scheme under the Ministry of Finance.
2. A key feature of the fund is that at least half of the project cost must be raised from market
sources.
3. All State and Union Territory capitals are eligible for coverage under the fund.

Which of the statements given above is/are correct?

A. 1 and 2 only
B. 2 and 3 only
C. 2 only
D. All of the above

Answer - C

Explanation - It is a new centrally sponsored scheme of the Ministry of Housing and Urban
A airs. The Fund aims to build resilient, productive, inclusive and climate-responsive cities,
positioning those as key driver of the country’s next phase of economic growth. Features of the
Urban Challenge Fund — A minimum of 50 per cent of project nancing have to be mobilised
from market sources, including municipal bonds, bank loans and Public–Private Partnerships
(PPPs). The remaining share may be contributed by States, Union Territories (UTs), Urban Local
Bodies (ULBs) or other sources. Projects will be selected through a transparent and competitive
challenge mode, ensuring support to high-impact and reform-oriented proposals. Focus area — A
strong thrust on reforms across Urban Governance, Market & Financial systems, Operational
e ciency, and Urban Planning The Fund will cover — All cities with a population of 10 lakh or
more (2025 estimates); All State and Union Territory capitals not covered above; and Major
industrial cities with a population of 1 lakh or more Additionally, all ULBs in hilly States, North-
Eastern States, and smaller ULBs with population below 1 lakh will be eligible for support under
the Credit Repayment Guarantee Scheme.

2. With reference to the 'Startup India Fund of Funds 2.0', consider the following statements
-
1. It is a new scheme launched exclusively to provide direct funding to individual early-growth
stage startups to prevent their failure.
2. One of its objectives is to strengthen India's domestic venture capital ecosystem, with a focus
on smaller funds.
3. The scheme adopts a targeted approach to mobilise long-term capital speci cally for deep
tech and tech-driven innovative manufacturing.
4. Its primary goal is to ensure that startup innovation and funding are concentrated only within
major metropolitan cities to create hubs of excellence.

How many of the statements given above are correct?

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A. Only one
B. Only two
C. Only three
D. All four

Answer - B

Explanation - Only Statements 2 and 3 are correct. Startup India Fund of Funds 2.0 is launched
under the Startup India initiative. It is designed to accelerate the next phase of India’s startup
journey by mobilising long-term domestic capital, strengthening the venture capital ecosystem,
and supporting innovation-led entrepreneurship across the country. Features of the Scheme: It will
have a targeted, segmented funding approach to support: Deep tech and tech-driven innovative
manufacturing: Prioritising breakthroughs in high-tech areas that require patient, long-term
capital. Empowering early-growth stage founders: Providing a safety net for new and innovative
ideas, reducing early-stage failures caused by lack of funding. National reach: Encouraging
investment beyond major metros so that, the innovation thrives in every corner of the country.
Designed to address high‑risk capital gaps: Directing greater capital to priority areas which are
important for self-reliance and boosting economic growth. Strengthen India’s domestic venture
capital base, particularly smaller funds to further boost the domestic investment landscape.

3. Consider the following statements regarding the PM RAHAT Scheme -

1. It provides cashless treatment up to ₹1.5 lakh to road accident victims, regardless of whether
the o ending vehicle is insured.
2. The scheme is implemented by integrating the eDAR platform with the Transaction
Management System (TMS 2.0) under the National Health Authority.
3. The Motor Vehicle Accident Fund (MVAF) is used for reimbursement to hospitals only in cases
involving uninsured vehicles.

Which of the statements given above is/are correct?

A. 1 only
B. 1 and 2 only
C. 2 and 3 only
D. All of the above

Answer - B

Explanation - PM RAHAT Scheme has prioritised life-saving intervention, nancial certainty for
hospitals, and a structured emergency response system for accident victims. Features of PM
RAHAT Scheme — It will be integrated with the Emergency Response Support System (ERSS)
enabling victims, Good Samaritans to locate the nearest designated hospital and request
ambulance assistance. Under the Scheme, every eligible road accident victim on any category of
road will be entitled to cashless treatment up to ₹1.5 lakh per victim. It is implemented through
amalgamating the Electronic Detailed Accident Report (eDAR) platform of the Ministry of Road
Transport and Highways with the Transaction Management System (TMS 2.0) of the National
Health Authority. Reimbursement: To hospitals will be made through the Motor Vehicle Accident
Fund (MVAF). In cases where the o ending vehicle is insured, payment will be drawn from
contributions made by General Insurance Companies. In uninsured and Hit & Run cases, payment
will be made through budgetary allocation by Government of India. Grievance Redressal:
Grievances will be addressed by a Grievance Redressal O cer nominated by the District Road
Safety Committee chaired by the District Collector / District Magistrate.

4. With reference to the Lead Bank Scheme (LBS) in India, consider the following
statements -
1. It was established on the recommendations of the Narasimham Committee (1991) to address
banking sector reforms.
2. A primary objective of the scheme is to enhance the ow of bank nance to the priority sector,
particularly in rural areas.
3. Under the scheme, a speci c bank is assigned the 'Lead Bank' responsibility for a district to
coordinate the activities of credit institutions and the government.
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4. The o cer responsible for preparing and monitoring the District Credit Plan was originally
designated as the Lead Bank O cer (LBO).

Which of the statements given above are correct?

A. 1, 2 and 3 only
B. 1, 3 and 4 only
C. 2, 3 and 4 only
D. All of the above

Answer - C

Explanation - On the recommendations of the Nariman committee, the Lead Bank Scheme was
introduced by the Reserve Bank of India in 1969. Aim — Coordinating the activities of banks and
other developmental agencies in order to achieve the objective of enhancing the ow of bank
nance to the priority sector and other sectors and to promote banks' role in the overall
development of the rural sector For coordinating the activities in the district, a particular bank is
assigned ‘Lead Bank’ responsibility of the district. The Lead Bank is expected to assume a
leadership role for coordinating the e orts of the credit institutions and the Government. For the
preparation of District Credit Plans and monitoring their implementation, a Lead bank O cer
(LBO), now designated as Lead District Manager was appointed in 1979.

5. Which of the following statement(s) is/are correct about the ‘Combined Maritime Forces’?
1. Established in 2002, it is a US-backed counterterrorism coalition aimed at protecting
international waters.
2. It is headquartered in Washington DC.
3. India has recently joined the coalition as a full time member.

Select the correct codes from below -

A. 1 only
B. 1 and 2 only
C. 2 only
D. 2 and 3 only

Answer - A

Explanation - India formally commenced cooperation with the Bahrain-based multilateral

partnership, Combined Maritime Forces (CMF). At the India-U.S. 2+2 in April, India had
announced that it would join the CMF as an Associate Partner.
It is the US-backed counterterrorism coalition aimed at protecting international waters. It was
established in 2002 with only 12 members. The coalition was formed with like-minded partners
to counter the threat of international terrorism and uphold the international rules-based order. The
United States Naval Forces Central Command (NAVCENT) was tasked with leading the then
CMF in 2001. The coalition is headquartered in Bahrain.
The CMF-B is primarily tasked with ensuring stability and security across 3.2 million square
miles of international waters. It acts against illegal non-state actors operating in vital sea lines
of communication. Its scope has expanded from just counterterrorism to counter-narcotics,
counter-smuggling operations, and suppressing piracy.

EDITORIAL SIMPLIFIED
The Labour Codes
India’s new labour codes represent a major step toward strengthening nancial inclusion and
social security for workers.
By consolidating fragmented labour laws, they aim to modernise labour governance and embed
income protection, long-term safeguards, and social security into employment.
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Despite opposition and strike calls from some trade unions, the reforms seek to address historic
exclusions and integrate millions of workers into formal nancial and welfare systems, ensuring
more equitable sharing of economic growth.
This article highlights how India’s labour codes rede ne wages, expand social security, and
embed nancial inclusion within employment.

Reforming the Wage De nition: Expanding Social Security -

• Mandatory 50% Wage Threshold —
• A key reform under the labour codes is the revised de nition of “wage.”
• Employers must now ensure that wages (basic pay, dearness allowance, and retaining
allowance) form at least 50% of total remuneration.
• Earlier, many establishments kept this share as low as 30–35% to reduce social security
contributions.
• The new threshold increases contributions to Provident Fund (PF), pension, and gratuity,
strengthening long-term nancial security for workers.
• Gratuity for Fixed-Term Employees —
• Fixed-term employees are now eligible for gratuity after one year of service, re ecting
modern labour market realities.
• Previously, such workers often exited without terminal nancial bene ts despite productive
contributions.
• Extending gratuity coverage converts short-term employment into a tool for asset creation
and income stability.
• Enhancing Financial Inclusion —
• PF, pension, and gratuity now function not merely as retirement bene ts but as instruments
of nancial inclusion.
• They enable workers to accumulate savings, manage life-cycle risks, and cushion income
shocks during job transitions.
• Corporate Cost vs Worker Security —
• The reforms increase nancial liabilities for large corporations with sizeable workforces and
xed-term employment.
• However, these higher out ows directly translate into improved worker income security,
stronger purchasing power, and broader social security coverage.
• Broader Economic Impact —
• Enhanced social security bene ts contribute to:
• Increased household consumption
• Higher savings
• Reduced vulnerability
• The reform thus promotes fairer value distribution between capital and labour, reinforcing
dignity and long-term stability in employment relations.

Macroeconomic Impact: Labour Codes and Inclusive Growth -

• Expanding Social Security Coverage —
• The labour codes extend nancial inclusion beyond organised workers to gig, platform, and
unorganised workers.
• For the rst time, these groups are formally recognised under labour law, enabling access to
insurance, provident fund mechanisms, and welfare schemes.
• Portability of bene ts across States and jobs is particularly crucial for migrant and informal
workers historically excluded from stable nancial systems.
• Strengthening Income Security —
• The Code on Wages introduces a universal wage de nition, mandates statutory minimum
wages, limits arbitrary deductions, and ensures timely payments.
• These provisions stabilise incomes and enhance workers’ participation in the formal
economy.
• Boost to Consumption and Savings —
• Redistribution of income toward workers increases purchasing power, encouraging higher
consumption and improved savings behaviour.
• Unlike shareholder income, worker income largely circulates within the domestic economy,
supporting demand-led growth.
• Inclusive and Shock-Resilient Growth —
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• By expanding social security and income protection, the labour codes reduce economic
vulnerability and strengthen nancial stability.
• They serve as instruments of inclusive growth, reinforcing social cohesion and resilience
against economic shocks.

Labour Law Reform: Modernisation Amid Opposition -

• Outdated and Fragmented Legacy Framework —
• India’s earlier labour laws had become fragmented and outdated, ill-suited to a rapidly
evolving labour market.
• Consolidating them into four labour codes simpli es compliance, enhances transparency,
and creates a more predictable regulatory environment for both workers and employers.
• Opposition and Implementation Concerns —
• While trade unions have raised concerns and called strikes, blanket opposition often
overlooks the pro-worker provisions embedded in the codes.
• Legitimate implementation challenges exist, but resistance driven by rhetoric risks obscuring
tangible welfare gains.
• Structural Shift Toward Financial Inclusion —
• The labour codes represent more than regulatory restructuring.
• By extending gratuity, broadening social security coverage, and closing legal exclusions,
they promote nancial inclusion and gradually redistribute economic value toward labour.
• Aligning Growth with Social Justice —
• By strengthening income security and nancial dignity, the reforms aim to align economic
growth with social justice.
• Their long-term success will depend on e ective implementation that ensures every worker
bene ts from India’s growth trajectory.

Source - The Hindu

QUESTION - The integration of social security and nancial inclusion objectives within
India's new labour codes marks a signi cant, albeit contested, shift in labour governance.
In this context, critically analyse the potential of these codes to act as instruments of
inclusive growth. Examine the challenges in reconciling the goals of social security
expansion with the concerns of industry and the aspirations of workers.

India tested in Indo-U.S. relationship

The proposed India–United States Bilateral Trade Agreement has sparked intense political and
public
Although the agreement itself has not yet been nalised, discussions surrounding it have already
revealed important questions about India’s economic policy and foreign relations.
The Indian government’s primary objective is understandable: to ease the burden of high U.S.
tari s and to strengthen economic growth through expanded trade access.
The emerging framework suggests that the agreement may extend beyond commercial
cooperation and enter the realm of foreign policy alignment.

The Nature of the Negotiation Process -

• Unilateral Announcements —
• A striking feature of the negotiations is the imbalance in communication. Nearly all major
details about the agreement have been revealed by the United States rather than India.
• The rst indication of progress came from a public statement by the U.S. President, followed
by executive orders and o cial documents released in Washington.
• India’s responses, in contrast, were limited and delayed.
• This sequence creates the perception that India is reacting to developments rather than
shaping them.
• When a joint statement appears rst from one party, it raises a fundamental question: Is the
agreement being negotiated between equals, or is one side dictating the terms?
• Implications of Asymmetry —
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• The communication pattern suggests a power imbalance. Instead of a mutual negotiation,
the process resembles a situation in which India must adjust its policies to obtain tari relief.
• Such a precedent is signi cant because it may in uence the nature of future agreements
between the two countries, not only in trade but also in strategic and defence cooperation.

The Energy Security Question -

• Importance of Russian Oil —
• India has relied signi cantly on discounted Russian oil to ensure a ordable energy for its
population and industry.
• At one point, Russia accounted for approximately 40% of India’s oil imports.
• Recent Changes —
• Recent data indicate a decline in Russian oil purchases despite increasing discounts.
• The reduction appears inconsistent with earlier policy statements prioritising a ordable
energy for Indian consumers.
• The change suggests that political pressure, rather than economic logic, may be shaping
energy policy.
• Economic vs Political Choice —
• If India abandons cheaper energy sources due to external pressure, it may compromise
domestic economic interests.
• This situation raises a critical question: Should trade bene ts justify altering independent
energy decisions?

Diplomatic Consequences -
• Relations with Russia and Iran —
• Reducing engagement with Russia and Iran risks damaging India’s credibility as a reliable
economic partner.
• Countries that once considered India a stable and independent collaborator may reassess
their trust.
• Impact on the Global South —
• India has historically positioned itself as a leader among developing nations, often resisting
unilateral sanctions not authorised by international institutions.
• Compliance with external demands may weaken this image and reduce India’s diplomatic
in uence.
• Relations with Other Trade Partners —
• Preferential treatment toward the United States could also cause friction with other
economic partners, including the European Union and recently negotiated trade partners.
• This may complicate India’s broader trade strategy.

Strategic and Geopolitical Implications -

• Regional Balance of Power —
• Curtailing projects such as the Chabahar port and reducing engagement with Iran could
unintentionally strengthen China’s regional in uence.
• The agreement, therefore, has implications beyond economics and a ects regional
geopolitics.
• Future Agreements —
• If tari relief requires political alignment, future cooperation in defence, security partnerships,
counter-terrorism, and Indo-Paci c strategies may also involve similar conditions.
• The precedent could fundamentally reshape the India-U.S. partnership.

Strategic Autonomy and Historical Context -

• India’s Foreign Policy Tradition —
• Since independence, India has followed a policy of strategic autonomy, maintaining relations
with multiple powers without formally aligning with any single bloc.
• This approach allows exibility in diplomacy and protects sovereign decision-making.
• Comparison with RCEP Withdrawal —
• In 2019, India withdrew from the Regional Comprehensive Economic Partnership due to
concerns about economic dependence and policy constraints.
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• Accepting stronger conditions in the present agreement would appear inconsistent with that
earlier decision.
• Risk to Multi-Alignment —
• The proposed trade agreement may narrow India’s foreign policy options rather than expand
them.
• Instead of multi-alignment in a multipolar world, India could appear increasingly tied to one
major power.

Conclusion -
• The India-U.S. Bilateral Trade Agreement o ers clear economic bene ts, particularly relief from
punitive tari s and greater market access.
• The manner of negotiation, the linkage of trade with foreign policy, and the potential impact on
energy security and diplomatic relationships suggest that the agreement is far more than a
commercial arrangement.
• If economic gains come at the expense of independent decision-making, India risks
compromising its long-standing principles of strategic autonomy and diplomatic balance.

Source - The Hindu

QUESTION - The proposed India-U.S. Bilateral Trade Agreement, while o ering potential
economic bene ts, raises signi cant concerns regarding the nature of the negotiation
process and its wider implications for India's strategic autonomy. Critically analyse the
challenges posed by this agreement in the context of India's independent foreign policy,
energy security, and its role as a leader of the Global South.
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