1. Farm Loan Waivers in India — Fiscal Tool or Electoral Strategy?

Introduction

Farm loan waivers represent one of India's most contentious policy interventions at the intersection of agrarian distress, fiscal federalism, and electoral politics. Tamil Nadu's recent announcement of a full waiver of cooperative crop loans up to Rs 75,000—against a backdrop of mounting state debt exceeding Rs 13.18 lakh crore—exemplifies the recurring dilemma: whether such measures constitute genuine welfare interventions or politically expedient electoral strategies masquerading as fiscal tools.

Background

India's tryst with farm loan waivers began systematically with the Agricultural and Rural Debt Relief Scheme (ARDRS, 1990), which provided relief up to Rs 10,000 per farmer at a total cost of Rs 10,000 crore. This was followed by the landmark Agricultural Debt Waiver and Debt Relief Scheme (ADWDRS, 2008), a massive pre-election intervention costing Rs 52,500 crore targeting small and marginal farmers holding up to 5 acres.

The policy landscape transformed dramatically post-2014, with state governments increasingly deploying waivers as electoral instruments. States including Andhra Pradesh, Telangana, Uttar Pradesh, Maharashtra, Karnataka, Punjab, Madhya Pradesh, Chhattisgarh, and Jharkhand announced waivers totaling approximately Rs 2.5 lakh crore—equivalent to 1.4% of India's 2016-17 GDP. This proliferation reflects both genuine agrarian distress and the political economy of competitive populism in India's federal structure.

Recent Development

Tamil Nadu's latest waiver announcement occurs amid revelations of severe fiscal stress. The state's White Paper on Fiscal Management disclosed debt liabilities of Rs 13.18 lakh crore, raising critical questions about fiscal sustainability. This pattern mirrors national trends where waivers have become recurring features coinciding with electoral cycles.

Significantly, the RBI Internal Working Group (2019) documented a high correlation between loan waiver announcements and state election cycles, providing empirical evidence of their political rather than distress-driven deployment. This timing pattern undermines claims that waivers represent emergency responses to agrarian crises, revealing instead their strategic electoral utility.

Significance

For Farmers: Waivers provide immediate liquidity relief to distressed farmers facing crop failures, natural disasters, or price crashes. They prevent asset liquidation and reduce immediate debt burden, potentially preventing farmer suicides in acute crisis situations.

For Banking Sector: While governments compensate banks, waivers disrupt credit discipline and institutional confidence. They create uncertainty about repayment culture and complicate credit risk assessment models.

For State Finances: Waivers represent massive fiscal commitments that crowd out capital expenditure on agricultural infrastructure, irrigation, research, and extension services—investments with longer-term productivity impacts.

For Political Economy: Waivers have become bargaining chips in competitive federalism, with opposition parties promising larger waivers, creating a race to the bottom in fiscal prudence.

Challenges

Exclusion Error: The most fundamental flaw is that waivers benefit only farmers with formal institutional credit access. Tenant farmers, sharecroppers, and landless agricultural laborers—often the most vulnerable—remain entirely excluded as they depend on informal moneylenders charging usurious rates. This structural exclusion undermines the equity rationale for waivers.

Moral Hazard: Routine waivers incentivize strategic defaults, with borrowers anticipating future relief. This destroys credit culture, penalizes honest borrowers, and rewards willful defaulters. Banks consequently become reluctant to extend fresh agricultural credit, defeating the purpose of financial inclusion.

Fiscal Unsustainability: Repeated waivers strain state finances, diverting resources from productive capital expenditure. States already burdened with power subsidies, MGNREGA commitments, and seventh pay commission liabilities find their fiscal space severely constrained.

Temporary Relief, Permanent Problems: Waivers address symptoms without resolving underlying causes—inadequate irrigation, fragmented landholdings, price volatility, climate risks, and market access constraints. Without structural reforms, distress recurs cyclically.

Electoral Timing: The RBI Working Group's findings confirm that electoral cycles drive waiver announcements rather than genuine distress assessments, undermining their credibility as policy instruments.

Way Forward

Direct Income Support: Transition toward predictable, universal income transfers like PM-KISAN provides dignity, choice, and regular support without disrupting credit culture. Such transfers are fiscally quantifiable and don't create moral hazard.

Comprehensive Crop Insurance: Strengthen Pradhan Mantri Fasal Bima Yojana (PMFBY) with better claim settlement mechanisms, wider coverage, and technology-driven assessment to protect farmers against production risks.

Agricultural Infrastructure Investment: Redirect waiver expenditure toward irrigation, cold storage, rural connectivity, and market linkages—investments that enhance productivity and income sustainably.

Tenant Farmer Recognition: Legal recognition and formal credit access for tenant farmers and sharecroppers through institutional mechanisms would address the exclusion challenge.

Distress Protocol: Establish transparent, rule-based criteria for debt relief triggered by objective distress indicators (rainfall deficiency, crop loss thresholds) rather than electoral calendars.

Credit Restructuring: Instead of blanket waivers, offer interest subvention, tenure extension, and structured rescheduling preserving credit culture while providing relief.

Fiscal Responsibility: Integrate waiver decisions within FRBM frameworks requiring legislative scrutiny and long-term fiscal impact assessments.

Conclusion

Farm loan waivers inhabit the uncomfortable intersection of political expediency and genuine welfare intent. While they provide immediate relief, their structural flaws—exclusion of the most vulnerable, moral hazard, fiscal unsustainability, and electoral timing—undermine their efficacy as development instruments. India's agricultural distress demands comprehensive solutions: investment in infrastructure, market reforms, climate adaptation, and predictable income support. Only by transcending the waiver trap can India build sustainable agrarian prosperity that empowers rather than merely relieves its farming communities.

Mains Practice Question

"Farm loan waivers in India have increasingly become electoral instruments rather than genuine welfare tools, creating moral hazard while excluding the most vulnerable agricultural stakeholders." Critically examine this statement, and suggest alternative mechanisms to address agrarian distress without compromising fiscal sustainability and credit culture. (250 words, 15 marks)

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2. FRBM Review Committee (2019) — State Debt Benchmarks

High-level committee that revised fiscal consolidation roadmap for Centre and States — set benchmark debt-to-GDP ratios for sustainable public finance.

Why in News

Tamil Nadu's mounting debt burden of Rs 13.18 lakh crore and simultaneous farm loan waiver announcement has rekindled focus on FRBM limits and state debt sustainability benchmarks recommended by the FRBM Review Committee (2019).

Key Facts

• FRBM Act: Fiscal Responsibility and Budget Management Act enacted in 2003 to institutionalize fiscal discipline and reduce public debt. (UPSC Mains Usage: GS3 — Government Budgeting — Fiscal Consolidation)
• FRBM Review Committee (2019): Chaired by K. Singh, submitted comprehensive recommendations on fiscal consolidation roadmap.
• State Debt Benchmark: Committee recommended States maintain debt-to-GDP ratio at 20% for sustainable fiscal health.
• Current State Debt Levels: Outstanding debt of states currently hovering around 27–29% of GDP, significantly above the 20%
• Fiscal Deficit Ceiling: States bound by FRBM limits capping fiscal deficit at 3% of GSDP (Gross State Domestic Product).
• Revenue vs. Capital Expenditure: To accommodate sudden waiver expenditures (classified as revenue expenditure), states invariably slash capital outlays — often by nearly 1/3rd. (UPSC Mains Usage: GS3 — Public Finance — Capital vs. Revenue Expenditure trade-offs)
• Off-Budget Borrowings: To circumvent strict FRBM ceilings, states resort to opaque borrowings through Special Purpose Vehicles (SPVs) or public sector undertakings.

Quick Revision Box

Term	Detail
FRBM Act	Enacted 2003, institutionalizes fiscal discipline and public debt reduction
FRBM Review Committee	Chaired by N.K. Singh, submitted report in 2019
State Debt Benchmark	Recommended 20% of GDP for state debt sustainability
Current State Debt	Hovering around 27–29% of GDP, above recommended threshold
Fiscal Deficit Ceiling	3% of GSDP for state governments
Off-Budget Borrowings	Opaque borrowings via SPVs to bypass FRBM limits

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3. PM-KISAN (Pradhan Mantri Kisan Samman Nidhi) — Direct Income Support Scheme

Central sector scheme providing direct income support of Rs 6,000 per year to all landholding farmer families — cited as equitable alternative to loan waivers.

Why in News

Economists and policy experts recommend PM-KISAN and similar direct income support schemes as sustainable alternatives to farm loan waivers, which disrupt credit culture and state finances.

Key Facts

• Launch Year: February 2019 by the Government of India.
• Coverage: All landholding farmer families irrespective of size of holdings.
• Financial Assistance: Rs 6,000 per year paid in three equal installments of Rs 2,000 each every four months. (UPSC Mains Usage: GS2 — Government Policies — Welfare schemes for farmers)
• Implementation: 100% funded by Central Government, transferred directly to farmers' bank accounts via Direct Benefit Transfer (DBT).
• Inclusivity: Unlike loan waivers, PM-KISAN does not exclude tenant farmers from benefits (though implementation challenges persist).
• State-Level Equivalents: Odisha's KALIA (Krushak Assistance for Livelihood and Income Augmentation), Telangana's Rythu Bandhu provide similar direct cash transfers.
• Non-Disruptive: Provides unconstrained cash transfers without disrupting the formal credit ecosystem or encouraging strategic defaults.

Quick Revision Box

Term	Detail
PM-KISAN	Pradhan Mantri Kisan Samman Nidhi, launched February 2019
Financial Assistance	Rs 6,000 per year in three installments of Rs 2,000 every 4 months
Coverage	All landholding farmer families irrespective of holding size
Funding	100% Central Government, transferred via Direct Benefit Transfer (DBT)
KALIA (Odisha)	State-level direct income support scheme equivalent to PM-KISAN
Rythu Bandhu (Telangana)	State-level direct cash transfer scheme for farmers

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4. PMFBY (Pradhan Mantri Fasal Bima Yojana) — Crop Insurance Scheme

Flagship crop insurance scheme providing financial support to farmers against crop failures and natural calamities — recommended as preventive alternative to ex-post loan waivers.

Why in News

Policy experts advocate expanding coverage and streamlining payout processes of PMFBY to protect farmers against climate risks before they fall into debt traps necessitating loan waivers.

Key Facts

• Launch Year: February 2016, replacing earlier schemes NAIS and MNAIS.
• Objective: Provide financial support to farmers suffering crop loss/damage from unforeseen events (droughts, floods, pests, diseases). (UPSC Mains Usage: GS3 — Agriculture — Risk mitigation and agricultural insurance)
• Premium Rates: Farmers pay maximum 2% of sum insured for Kharif crops, 5% for Rabi crops, and 5% for horticultural/commercial crops.
• Subsidy: Balance premium subsidized 50:50 by Centre and State governments (90:10 for North-Eastern states).
• Coverage: All food crops (cereals, millets, pulses), oilseeds, and annual commercial/horticultural crops.
• Technology Use: Leverages remote sensing, drones, smartphones for yield estimation and faster claim settlement.
• Implementation Challenges: Delayed claim settlements, exclusion of tenant farmers, and low awareness limit effectiveness as preventive tool against agrarian debt.

Quick Revision Box

Term	Detail
PMFBY	Pradhan Mantri Fasal Bima Yojana, launched February 2016
Premium (Kharif)	Maximum 2% of sum insured paid by farmer
Premium (Rabi)	Maximum 1.5% of sum insured paid by farmer
Subsidy Sharing	50:50 Centre:State (90:10 for North-Eastern states)
Coverage	Food crops, oilseeds, annual commercial/horticultural crops
Technology	Uses remote sensing, drones, smartphones for yield estimation and claims

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5. e-NAM (National Agriculture Market) — Digital Trading Platform

Pan-India electronic trading portal integrating 1,361+ APMCs across states — cited as structural reform for better price realization and market access for farmers.

Why in News

Experts recommend strengthening the e-NAM platform as a structural alternative to farm loan waivers, enabling farmers to realize better prices and enhance incomes through transparent market linkages.

Key Facts

• Launch Year: April 2016 under the aegis of the Ministry of Agriculture and Farmers Welfare.
• Objective: Create a unified national market for agricultural commodities by integrating existing Agricultural Produce Market Committees (APMCs) onto a common electronic platform. (UPSC Mains Usage: GS3 — Agriculture — Agricultural marketing and reforms)
• Coverage (as of 2026): Integrates 1,361+ mandis across 23 states and 4 UTs.
• Features: Real-time price discovery, online trading, electronic auction, unified trading license, single-point levy of market fee.
• Benefits: Eliminates information asymmetry, reduces intermediaries, enhances farmers' bargaining power, and provides access to nationwide buyers.
• Technology Use: Mobile app, SMS alerts, online payment and settlement mechanisms.
• Challenges: Low digital literacy, inadequate internet connectivity in rural areas, resistance from traditional intermediaries, and incomplete integration of all mandis.

Quick Revision Box

Term	Detail
e-NAM	National Agriculture Market, launched April 2016
Implementing Ministry	Ministry of Agriculture and Farmers Welfare
Coverage (2026)	Integrates 1,361+ mandis across 23 states and 4 UTs
Core Feature	Pan-India electronic trading portal for agricultural commodities
Unified License	Single trading license valid across all integrated mandis
Benefit	Real-time price discovery, reduced intermediaries, enhanced farmer bargaining power

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6. Kisan Credit Card (KCC) — Agricultural Credit Instrument

Credit delivery mechanism providing farmers timely and adequate institutional credit for cultivation and allied activities — recommended for reducing dependence on informal moneylenders.

Why in News

Experts advocate expanding low-interest Kisan Credit Card access as a sustainable alternative to loan waivers, enabling farmers to access formal credit instead of high-interest informal loans.

Key Facts

• Launch Year: August 1998 by NABARD in consultation with RBI and Government of India.
• Objective: Provide farmers with timely and hassle-free credit for cultivation, post-harvest expenses, and allied agricultural activities. (UPSC Mains Usage: GS3 — Agriculture — Institutional credit and financial inclusion)
• Credit Limit: Based on land holding, cropping pattern, and scale of finance — covers short-term cultivation credit plus term loan for allied activities.
• Repayment: Flexible repayment linked to harvest cycles; concessional interest rates for timely repayment.
• Coverage: Over 7 crore active KCC holders (as of 2026), covering small and marginal farmers, tenant farmers (in some states), and allied sector workers (dairy, fisheries, poultry).
• Interest Subvention: Government provides 2% interest subvention on short-term crop loans; additional 3% prompt repayment incentive — effective rate 4% per annum for timely repayment.
• Digital Integration: Linked with RuPay debit card, enabling ATM withdrawals and cashless transactions.

Quick Revision Box

Term	Detail
KCC	Kisan Credit Card, launched August 1998
Initiating Bodies	NABARD, RBI, Government of India
Coverage (2026)	Over 7 crore active KCC holders
Interest Subvention	2% interest subvention plus 3% prompt repayment incentive
Effective Interest Rate	4% per annum for timely repayment
Digital Feature	Integrated with RuPay debit card for ATM and cashless transactions

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7. India-Russia RELOS Logistics Pact

Reciprocal Exchange of Logistics Support agreement enabling mutual military facility access — strategic defence cooperation instrument.

Why in News

India and Russia signed the RELOS (Reciprocal Exchange of Logistics Support) agreement in June 2026, expanding India's logistics pact network beyond Western partners to include a major strategic ally.

Key Facts

• RELOS: Bilateral agreement for reciprocal access to military facilities including ports, airbases, and maintenance stations.
• Strategic significance: First major logistics pact with Russia — India's largest defence equipment supplier (60% of inventory Russian-origin). (UPSC Mains Usage: Links to India's strategic autonomy and multi-alignment policy in GS2 IR)
• Existing pacts: India has similar agreements — LEMOA (USA, 2016), ACSA (Japan, 2020), MLA (Australia, 2020), France (2018).
• Scope: Covers fuel, spare parts, berthing, food, medical support — does NOT imply automatic military alliance or basing rights.
• Payment mechanism: Services provided on reimbursable basis or through reciprocal provision — not free access.
• No permanent base: Agreement explicitly states no permanent military presence or overseas bases on either territory.
• Arctic access: Potentially enables Indian Navy access to Russian Arctic ports and Northern Sea Route for strategic presence.
• Defence exercises: Expected to facilitate smoother logistics for Indra (tri-service) and SIMBEX-equivalent bilateral exercises.

Quick Revision Box

Term	Detail
RELOS	Reciprocal Exchange of Logistics Support (India-Russia)
Signing Year	June 2026
Similar Pacts	LEMOA (US), ACSA (Japan), MLA (Australia)
Coverage	Fuel, spares, berthing, medical support
Payment Mode	Reimbursable or reciprocal provision
Strategic Angle	Access to Russian Arctic ports and Northern Sea Route

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8. BGP Hijacking in Cybersecurity

Cyber attack exploiting Border Gateway Protocol vulnerabilities to redirect internet traffic — critical internet infrastructure threat.

Why in News

A major BGP hijacking incident in June 2026 redirected traffic from Indian banking networks through malicious routing, exposing vulnerabilities in India's internet infrastructure security.

Key Facts

• BGP (Border Gateway Protocol): Core routing protocol that enables data packet exchange between Autonomous Systems (AS) on the internet — the "postal service" of the internet.
• BGP Hijacking: Malicious announcement of unauthorized IP address prefixes by an AS, causing traffic to be misdirected through attacker-controlled networks.
• Attack types: Prefix hijacking (announcing exact prefix), Sub-prefix hijacking (announcing more specific route), AS path manipulation.
• Detection difficulty: BGP operates on trust-based routing with no built-in authentication — hijacks can remain undetected for hours or days. (UPSC Mains Usage: Links to GS3 Cybersecurity and Critical Infrastructure Protection)
• Impact: Enables traffic interception (espionage), denial-of-service attacks, cryptocurrency theft, censorship bypass.
• Notable incidents: Pakistan Telecom vs YouTube (2008), China Telecom routes (2010, 2017), Russian AS hijacks (2017–2020).
• RPKI solution: Resource Public Key Infrastructure (RPKI) provides cryptographic validation of route announcements — adoption rate globally only 35% as of 2026.
• India's vulnerability: Only 12% of Indian AS networks have implemented RPKI Route Origin Validation (ROV) as of June 2026.

Quick Revision Box

Term	Detail
BGP	Border Gateway Protocol — internet routing backbone
BGP Hijacking	Malicious IP prefix announcement to redirect traffic
Trust Model	BGP operates on trust without authentication
RPKI	Resource Public Key Infrastructure — cryptographic validation
Global RPKI Adoption	Only 35% as of 2026
India RPKI Adoption	Only 12% of Indian AS networks (June 2026)
Famous Case	Pakistan Telecom hijacked YouTube routes (2008)

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9. US Pacific Command (USPACOM)

Restored unified combatant command for US military operations in Indo-Pacific — major strategic restructuring reflecting China focus.

Why in News

US restored the Pacific Command (USPACOM) designation in June 2026, reverting from Indo-Pacific Command (INDOPACOM) to signal sharper focus on Pacific theatre amid rising China tensions.

Key Facts

• Establishment: Originally established as Far East Command (1947), renamed Pacific Command (1957–2018), then Indo-Pacific Command (2018–2026).
• 2026 restoration: Reverted to USPACOM on 1 June 2026 — reflects strategic shift from broad Indo-Pacific concept to focused Pacific deterrence.
• Geographic scope: Covers Pacific Ocean from US West Coast to Indian Ocean, spanning 36 nations and 50% of world's population.
• Headquarters: Camp H.M. Smith, Honolulu, Hawaii.
• Force strength: Commands 375,000+ military personnel, ~200 ships, ~1,100 aircraft — largest US combatant command. (UPSC Mains Usage: Links to GS2 Indo-Pacific geopolitics and Quad dynamics)
• Component commands: US Pacific Fleet, US Army Pacific, US Pacific Air Forces, US Marine Forces Pacific.
• Strategic focus: China containment, Taiwan Strait security, South China Sea freedom of navigation, alliance strengthening (Japan, South Korea, Australia).
• India angle: Restored USPACOM designation may reduce emphasis on Indian Ocean, potentially affecting India-US maritime cooperation under INDOPACOM framework.

Quick Revision Box

Term	Detail
Original Name	Far East Command (1947)
Pacific Command Era	1957–2018
Indo-Pacific Command	2018–2026 (emphasised India ties)
2026 Restoration	Reverted to USPACOM on 1 June 2026
Headquarters	Camp H.M. Smith, Honolulu, Hawaii
Force Strength	375,000+ personnel, ~200 ships, ~1,100 aircraft
Primary Focus	China containment, Taiwan, South China Sea

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10. Positive Indigenisation Lists (PILs) in Defence

Policy instrument banning import of specified military items to promote domestic manufacturing

Why in News

The Ministry of Defence has enacted five PIL tracks by June 2026, halting imports on 5,012 specialized parts and generating ₹9,782 crore in domestic orders via the Srijan Portal, reversing India's historical 65–70% import dependency.

Key Facts

• PILs are lists of defence items for which imports are banned to promote indigenous manufacturing.
• Five PIL tracks have been notified between 2020 and 2026.
• Covers 5,012 specialized parts and sub-systems across categories.
• Generated domestic procurement orders worth ₹9,782 crore through the Srijan Portal.
• Part of broader strategy to achieve 65% indigenous content in defence inventory.
• (UPSC Mains Usage: Links to GS3 — Defence Manufacturing, Self-Reliance; Industrial Policy)
• Administered by the Department of Defence Production (DDP).
• Timeline-based implementation — each list has specific year-wise import embargo dates.

Quick Revision Box

Term	Detail
PIL	Positive Indigenisation List — items banned for import
Total PIL Tracks	Five notified by June 2026
Items Covered	5,012 specialized parts and sub-systems
Domestic Orders Generated	₹9,782 crore via Srijan Portal
Strategic Objective	Reduce import dependency from 70% to 35%
Administering Body	Department of Defence Production (DDP)

 

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11. Mission Divyastra — India's MIRV Capability

India's strategic missile test demonstrating Multiple Independently Targetable Re-entry Vehicle (MIRV) technology

Why in News

In 2024, India successfully tested Mission Divyastra, a long-range strategic missile system equipped with Multiple Independently Targetable Re-entry Vehicles (MIRV), joining an exclusive club of nations with this advanced nuclear deterrence capability.

Key Facts

• Mission Divyastra tested in 2024 by DRDO.
• Features MIRV technology — allows a single missile to carry multiple warheads targeting different locations.
• Enhances India's second-strike capability and strategic deterrence.
• Only six countries globally possess operational MIRV technology: USA, Russia, China, France, UK, and now India.
• (UPSC Mains Usage: Links to GS3 — Science & Technology, Internal Security; Strategic Affairs)
• Based on Agni-V missile platform with intercontinental range.
• Demonstrates advancement in precision guidance, re-entry vehicle design, and payload deployment.
• Strengthens India's nuclear triad (land, air, sea-based deterrence).

Quick Revision Box

Term	Detail
Mission Divyastra	India's MIRV technology test (2024)
MIRV	Multiple Independently Targetable Re-entry Vehicle
Missile Platform	Based on Agni-V intercontinental ballistic missile
Capability	Multiple warheads, different targets, single launch
Global Status	6th country with operational MIRV capability
Strategic Value	Enhanced second-strike and deterrence capability

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12. Mission Shakti — India's ASAT Demonstration

India's anti-satellite missile test establishing space warfare capability

Why in News

In March 2019, India conducted Mission Shakti, successfully destroying a target satellite in low earth orbit (LEO), demonstrating anti-satellite (ASAT) weapon capability and joining an elite group of space powers.

Key Facts

• Mission Shakti conducted on 27 March 2019.
• DRDO-developed ASAT missile destroyed a live satellite in LEO (Low Earth Orbit).
• Target satellite was Microsat-R at an altitude of approximately 283 km.
• India became the 4th country after USA, Russia, and China to demonstrate ASAT capability.
• (UPSC Mains Usage: Links to GS3 — Science & Technology, Space, Defence; Strategic Affairs)
• Operation completed in under 3 minutes.
• Demonstrates India's capability to defend space assets and counter space-based threats.
• Part of India's integrated space-defence architecture.

Quick Revision Box

Term	Detail
Mission Shakti	India's ASAT test (27 March 2019)
ASAT	Anti-Satellite weapon system
Target	Microsat-R satellite at 283 km altitude
Global Status	4th country with demonstrated ASAT capability
Execution Time	Under 3 minutes
Strategic Significance	Space warfare capability, defence of space assets

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13. Project 75 — Kalvari-Class Submarines

Indigenous submarine construction program under Make in India

Why in News

In 2025, India completed delivery of all six Kalvari-class Scorpene submarines built indigenously by Mazagon Dock Shipbuilders Limited (MDL) in collaboration with France, marking a milestone under Project 75.

Key Facts

• Project 75 is India's diesel-electric submarine construction program.
• Six Kalvari-class Scorpene submarines delivered by 2025.
• Built by Mazagon Dock Shipbuilders Limited (MDL), Mumbai.
• Technology collaboration with Naval Group (France).
• Submarines: INS Kalvari, INS Khanderi, INS Karanj, INS Vela, INS Vagir, INS Vagsheer.
• (UPSC Mains Usage: Links to GS3 — Defence Manufacturing, Maritime Security; India-France Relations)
• Features Air Independent Propulsion (AIP) technology for extended underwater endurance.
• Part of 30-year submarine building plan announced in 1999.

Quick Revision Box

Term	Detail
Project 75	Diesel-electric submarine construction program
Submarines Built	Six Kalvari-class Scorpene submarines
Completion Year	2025
Shipyard	Mazagon Dock Shipbuilders Limited (MDL)
Foreign Partner	Naval Group (France)
Technology	Air Independent Propulsion (AIP)

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14. RBI's Economic Capital Framework and Record Surplus Transfer

Regulatory mechanism governing RBI's surplus distribution to Union Government — critical for fiscal federalism, central bank autonomy, and non-tax revenue.

Why in News

The Reserve Bank of India (RBI) approved a record ₹2.87 lakh crore surplus transfer to the Union Government for FY 2025–26 under its Economic Capital Framework (2019), sparking debate on central bank independence and fiscal federalism.

Key Facts

• Economic Capital Framework (2019): RBI framework mandating surplus earnings above risk buffers be transferred to government as non-tax revenue.
• ₹2.87 lakh crore: Record surplus transfer for FY26 — 4–5 times higher than traditional range of ₹30,000–65,000 crore.
• Balance sheet expansion: RBI's total balance sheet grew 6% to ₹91.97 lakh crore by March 2026.
• Gross income surge: RBI's gross income climbed over 26% in FY26 due to aggressive forex reserve management.
• Strategic gold sale: RBI sold approximately $12 billion worth of gold reserves and purchased $7.5 billion in foreign-currency assets to defend the rupee. (UPSC Mains Usage: Links to GS3 — Forex reserves management and exchange rate policy)
• Non-divisible revenue: Entire surplus flows exclusively to Union Government outside Finance Commission devolution formulas — zero automatic share to States. (UPSC Mains Usage: Links to Article 270 on tax devolution and fiscal federalism tensions)
• Article 293: Constitutional provision imposing strict borrowing ceilings on State governments, creating fiscal asymmetry with large Union windfalls.
• Risk buffer mandate: Framework requires RBI maintain conservative risk reserves before transferring surplus to protect balance sheet safety.

Quick Revision Box

Term	Detail
Economic Capital Framework	2019 RBI policy for surplus transfer above risk buffers
FY26 Surplus	₹2.87 lakh crore — record transfer to Union Government
Balance Sheet Size	₹91.97 lakh crore by March 2026 (20.6% growth)
Non-Tax Revenue	Surplus classified as this — not shared with States
Article 293	Constitutional provision imposing borrowing limits on States
Traditional Range	Previous payouts: ₹30,000–65,000 crore annually

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15. iDEX Initiative, Srijan Portal and DEEP Platform for Defence Innovation

Government initiatives to integrate MSMEs, start-ups into defence innovation ecosystem and ensure procurement transparency

Why in News

As part of the Defence Decade Transformation review (2014–2026), the iDEX initiative has signed 551 specific design contracts by March 2026, while the Srijan Portal facilitated ₹9,782 crore in domestic orders and DEEP Platform registered over 41,000 verified suppliers by June 2026, marking a comprehensive digital transformation in India's defence sector.

Key Facts

• iDEX (Innovations for Defence Excellence) is an ecosystem enabling MSMEs, start-ups, and innovators to participate in defence R&D.
• Operates under the Defence Innovation Organisation (DIO) with 551 specialized design contracts signed by March 2026.
• Srijan Portal facilitates indigenous procurement under Positive Indigenisation Lists (PILs), generating orders worth ₹9,782 crore by June 2026.
• DEEP (Defence Establishments and Entrepreneurs Platform) is a unified supplier registration portal with over 41,000 verified suppliers holding Unique Reference Numbers (URN).
• Represents strategic shift from top-down procurement to bottom-up innovation and co-managed development.
• Supports Atmanirbhar Bharat and Make in India by reducing foreign dependency in military technology.
• Managed by Department of Defence Production, ensuring supply chain transparency and vendor accountability.
• (UPSC Mains Usage: Links to GS3 — Science & Technology, Defence Manufacturing, E-Governance; GS2 — Government Policies)

Quick Revision Box

Term	Detail
iDEX	Innovations for Defence Excellence — defence innovation ecosystem
iDEX Contracts	551 design contracts by March 2026
Implementing Body	Defence Innovation Organisation (DIO)
Srijan Portal	Platform for indigenous defence procurement
Srijan Orders	₹9,782 crore by June 2026
DEEP Platform	Defence Establishments and Entrepreneurs Platform
DEEP Suppliers	Over 41,000 with URN (Unique Reference Number)
Strategic Goal	Atmanirbhar Bharat, supply chain transparency, indigenous innovation

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