Daily Current Affairs and News Analysis 01-08-2025

AIF Investment Rules

• RBI Tightens Investment Norms in AIFs: The Reserve Bank of India (RBI) has introduced new rules for regulated entities (REs) investing in Alternative Investment Funds (AIFs).
• Why: To prevent “evergreening” of loans, reduce concentration risk, and improve financial risk management by REs.
• Investment Cap:
  • Total investment by all REs in an AIF scheme is capped at 20% of the AIF’s corpus.
  • No single RE can invest more than 10% of an AIF scheme’s corpus.
• Stricter Provisioning: If an RE invests over 5% in an AIF that has downstream exposure to its own debtor (excluding equity), it must set aside 100% of its investment as a provision.
• Covered REs: Includes commercial banks (including SFBs, RRBs), co-operative banks, all-India financial institutions, and NBFCs (including housing finance companies).
• Alignment with SEBI: The new norms align RBI’s regulations with SEBI’s standards for due diligence and investment practices in AIFs.
• Effective Date: The new rules come into effect from January 1, 2026, or earlier if decided by the RE.

Kerala: Literate but Jobless

• Kerala’s Literacy-Unemployment Paradox: Kerala, known for near-universal literacy and strong education systems, faces a high graduate unemployment rate (42.3%), questioning the link between education and employability.

  • Why: This highlights a systemic misalignment between curriculum and job market needs.

• Dominance of General Streams: Around 70% of Kerala’s higher education courses are in humanities and pure sciences, with minimal focus on industry-specific or emerging sectors.

  • Why: This limits graduates’ relevance to current job demands, unlike countries with strong vocational systems like Germany.

• Lack of Industry Linkages: Kerala’s colleges and universities have weak ties to industries and job markets, unlike states like Tamil Nadu and Karnataka which foster sector-focused skilling and tech ecosystem collaborations.

  • Why: This results in graduates lacking practical skills and relevant experience.

• Limited Vocational Training: Only a small percentage of Indian youth, including in Kerala, receive formal vocational training, reflecting cultural inertia against these pathways.

  • Why: This widens the skills gap compared to countries like the US and Germany.

• Outward Migration of Educated Youth: High numbers of educated Keralites migrate abroad for jobs, indicating a failure in domestic job creation and talent retention.

  • Why: This shows that even highly educated individuals cannot find suitable employment within the state.

• Policy Recommendations: The need for robust career guidance, mainstreaming vocational education (e.g., German Berufsschule model), and establishing employment-linked metrics for educational institutions.

  • Why: To bridge the gap between education and job market requirements, ensuring educational utility over mere enrolment numbers.

India-Maldives Ties

• Reset in India-Maldives Ties: PM Modi’s visit signals an improvement after a strain caused by President Muizzu’s “India Out” stance and seeking Indian troop withdrawal.
  • Why: Historic friendly and strategic partnership, crucial location for India, and past security cooperation.
• Strategic Importance of Maldives: Lies near crucial International Sea Lanes (ISLs) vital for India’s trade and energy supplies, aiding maritime surveillance and regional stability.
  • Why: Over 80% of India’s trade by volume passes through these waters.
• Historical Cooperation: India was the third nation to establish diplomatic ties. Both nations have engaged in defense exercises (DOSTI, Ekuverin) and cooperate in regional security initiatives like the Colombo Security Conclave.
  • Why: Geographical proximity, cultural ties, and shared security interests.
• Challenges Post-Muizzu’s Election: Maldives adopted an “India-Out” stance and inked agreements with China, raising Indian concerns about Chinese influence.
  • Why: Perceived challenge to India’s strategic dominance in the Indian Ocean region.
• Recent Initiatives for Improvement: Discussions on a Free Trade Agreement, India’s line of credit and debt relief for Maldives, and establishment of an India-Maldives Parliamentary Friendship Group.
  • Why: To rebuild trust and deepen bilateral engagement beyond short-term politics.
• Past Indian Assistance: India’s intervention in the 1988 coup attempt (“Operation Cactus”) and humanitarian aid underscore the deep-rooted relationship.
  • Why: Demonstrates India’s commitment to Maldives’ stability and well-being.

CAMPA CEC Report

• 85% Afforestation Target Met: India has achieved 85% of its compensatory afforestation target, raising 1,78,261 hectares against a goal of 2,09,297 hectares between 2019-20 and 2023-24.
  • Why: This indicates progress in compensating for forest land diverted for non-forest uses. Gujarat, Chandigarh, Mizoram, and Madhya Pradesh fully met their targets.
• 67.5% CAMPA Fund Utilisation: Only 67.5% of the approved CAMPA funds (₹26,001 crore out of ₹38,516 crore) have been utilized by states.
  • Why: This signifies a significant gap between funds collected and their actual deployment for afforestation and ecological restoration, undermining the mechanism’s effectiveness.
• Varied State Performance: Fund utilization shows significant disparity across states, with some like Manipur and Andhra Pradesh reaching 100% utilization, while others like Delhi (26.9%) and West Bengal (39.2%) lag considerably.
  • Why: Highlights inefficiencies in fund management and implementation at the state level.
• Implementation Challenges: The CEC report identifies delays in annual plan submission, late fund release, lack of dedicated CAMPA offices, weak monitoring of survival rates, and multi-layered fund release processes as key hindrances.
  • Why: These systemic issues prevent timely and effective execution of afforestation projects.
• Purpose of CAMPA: Established under the CAF Act, 2016, CAMPA manages funds collected from user agencies diverting forest land for non-forest purposes. Funds are meant for afforestation, degraded forest regeneration, wildlife protection, and ecological restoration.
  • Why: Understanding CAMPA’s role is crucial to assessing the impact of the CEC report on India’s forest governance and environmental balance.
• Underlying Issue: The report warns that gaps in plantation survival and underutilisation of funds weaken the compensatory afforestation mechanism’s core purpose.
  • Why: This directly impacts the goal of ecological restoration and maintaining forest cover in India.

Bank Law Amend 2025

• Effective Date: Key provisions of the Banking Laws (Amendment) Act, 2025, come into effect from August 1, 2025.
• Substantial Interest Threshold Revised: Increased from ₹5 lakh to ₹2 crore or 10% of paid-up capital (whichever is lower) to enhance transparency and update disclosure norms.
• Director Tenure in Cooperative Banks: Maximum tenure raised from 8 to 10 years (excluding chairpersons/full-time directors) to align with the 97th Constitutional Amendment.
• Unclaimed Assets to IEPF: Public Sector Banks (PSBs) and SBI must transfer unclaimed dividends, shares, and bond amounts to the Investor Education and Protection Fund (IEPF) after 7 years.
• Audit Reforms in PSBs: PSBs can now fix auditor remuneration independently, aiming to strengthen audit independence and attract top professionals.
• Legal Coverage: Amendments impact the RBI Act, 1934, Banking Regulation Act, 1949, SBI Act, 1955, and Banking Companies Acts of 1970 and 1980.
• Overall Aim: To enhance bank governance, safeguard depositors, improve PSB audits, and align cooperative banks with constitutional norms.

Contaminated Sites Rules

• Legally Codifies Contaminated Site Management: The Environment Protection (Management of Contaminated Sites) Rules, 2025, notify a process for identifying, assessing, and remediating chemically contaminated sites under the EPA, 1986, filling a long-standing regulatory gap.

• Defined Contaminated Sites: Locations with historical hazardous waste dumping causing soil, groundwater, or surface water contamination (e.g., old landfills, spill sites) are defined.

• Clear Identification & Reporting: District administrations report suspected sites, followed by preliminary and detailed assessments by State Pollution Control Boards or expert bodies within strict timelines. Sites exceeding safe limits for 189 listed hazardous chemicals are declared contaminated and publicized with access restrictions.

• Remediation Planning & Liability: Expert bodies will create site-specific remediation plans. Polluters identified will bear clean-up costs (polluter pays principle); if untraceable or unable to pay, costs will be shared between the Centre and States.

• Criminal Liability: Loss of life or environmental damage due to contamination will attract penalties under the Bharatiya Nyaya Sanhita, 2023.

• Exclusions: Rules do not cover radioactive waste, mining operations, marine oil pollution, and solid waste dumps, as these have separate specific laws.

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Why in News:

• These rules provide a legal framework for managing chemically contaminated sites, a process that was previously lacking despite decades of identified sites across India.
• They address the challenge of remediation where polluters are defunct or unable to afford clean-up, and formalize the process of identifying and declaring contaminated locations.
• The notification formalizes existing practices, ensuring a more systematic approach to environmental protection for these sites.

NHAI Sustain Report 23-24

• NHAI released its 2nd Sustainability Report for FY 2023-24: This report details NHAI’s progress in incorporating Environmental, Social, and Governance (ESG) principles into its operations.

• Aligns with India’s Mission LiFE and circular economy: Demonstrates a commitment to sustainable living and resource efficiency.

• Decoupled Growth from Emissions: Despite a 20% increase in highway construction, NHAI reduced GHG emission intensity from 1.0 to 0.8 MTCO₂e/km. This signifies growth without proportionally increasing environmental harm.

• Promoted Circular Economy: Utilized over 631 lakh metric tonnes of recycled materials (fly ash, plastic waste, reclaimed asphalt) in FY 2023-24, reducing waste and improving resource efficiency.

• Water Body Rejuvenation: Developed 467 water bodies under the Amrit Sarovar Mission, recovering 2.4 crore cubic meters of soil and saving an estimated ₹16,690 crore in construction material costs.

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• Reduced Water Use Intensity: Achieved a 74% reduction in water use intensity in water-stressed regions, highlighting strong water conservation efforts.

• Synergy between Infrastructure and Sustainability: Emphasizes adopting green infrastructure principles (permeable pavements, green roofs), integrating EIA at the planning stage, using sustainable materials, promoting green cover, water conservation, wildlife corridors, and low-carbon transport.

• Strategic Shift to “Build Green”: The report signifies a move towards integrating climate consciousness with infrastructure expansion, advocating for “concrete with conscience.”

State Language Restructuring

• Governor’s Criticism: Tamil Nadu Governor R.N. Ravi criticized the linguistic reorganization of states, stating it created “second-class citizens” by dividing people based on language.
• Historical Context: Before 1956, India’s states were classified under Part A, B, C, and D, a structure based on colonial legacy and integration. Post-Independence, administrative and linguistic demands pushed for restructuring.
• Formation of Andhra State (1953): Widespread protests, including Potti Sriramulu’s fast, led to the formation of Andhra State for Telugu speakers, the first linguistic state.
• States Reorganisation Commission (SRC) 1953: Formed due to ongoing demands, the SRC recommended reorganization primarily based on language, but also emphasized administrative viability and national unity.
• States Reorganisation Act, 1956: Implemented SRC recommendations, abolishing the A/B/C/D classification and reorganizing India into 14 states and 6 union territories, largely along linguistic lines.
• Subsequent Reorganizations: Since 1956, several states have been reorganized based on linguistic and administrative considerations, including the formation of Maharashtra and Gujarat (1960), Haryana (1966), and Telangana (2014).

P17A

• INS Himgiri Delivered: The Indian Navy received INS Himgiri, the third ship of Project 17A, on July 31, 2025, at GRSE, Kolkata.

  • Why in News: This marks a significant step in India’s self-reliance in warship design and construction, particularly for advanced stealth frigates. It’s the first of its kind built by GRSE.

• Project 17A Overview: This project involves building seven advanced stealth frigates (Nilgiri-class) at a cost of approximately ₹45,000 crore, with four being built by MDL and three by GRSE.

  • Why in News: Demonstrates the scale and ambition of India’s indigenous defense manufacturing capabilities, highlighting the collaboration between public sector undertakings.

• Advanced Design and Capabilities: The Himgiri is a 149-meter long frigate with a displacement of 6,670 tons, featuring a stealth design with 75% indigenous content.

  • Why in News: Showcases a “quantum leap” in naval design, stealth, firepower, automation, and survivability, reflecting a generational advancement over previous classes.

• Propulsion and Weaponry: Equipped with a CODOG propulsion system for speeds over 28 knots and a range of 5,500 nautical miles. It’s armed with BrahMos missiles, Barak-8 LR-SAMs, a 76mm gun, CIWS, and advanced radar and sonar systems.

  • Why in News: Underscores India’s ability to integrate sophisticated indigenous and imported weapon systems into its naval platforms, enhancing its combat effectiveness.

• Strategic Significance: Enhances India’s blue-water naval capabilities and maritime self-reliance, while also generating significant employment (4,000 direct, 10,000 indirect jobs) through the involvement of over 200 MSMEs.

  • Why in News: Connects national security objectives with economic development, promoting indigenous industries and job creation under the ‘Aatmanirbhar Bharat’ initiative.

• Commissioning: INS Himgiri is expected to be commissioned by August 2025, alongside sister ship INS Udaygiri.

  • Why in News: Indicates the nearing operational readiness of these advanced naval assets for deployment.

Himgiri Frigate Project

• Project 17A Frigate Himgiri Delivered: The third ship of the Nilgiri Class (Project 17A), named Himgiri, has been delivered to the Indian Navy.

  • Why: Marks a significant milestone in India’s pursuit of self-reliance in warship design and construction. It’s the first of the class built by Garden Reach Shipbuilders & Engineers (GRSE).

• Advanced Capabilities: Himgiri is a modernized version of the former INS Himgiri and is equipped with advanced weapons and sensors.

  • Why: It represents a generational leap in naval design, stealth, survivability, and combat capability. Key armament includes BrahMos, Barak 8, supersonic surface-to-surface missiles, medium-range surface-to-air missiles, and rapid-fire Close-in Weapon Systems.

• Indigenous Design and Construction: The frigate embodies “Aatmanirbharta” (self-reliance) in warship building, with an indigenous content of 75%.

  • Why: Highlights the nation’s design, ship construction, and engineering prowess, and involves over 200 MSMEs, generating significant employment.

• Multi-mission Platform: Project 17A frigates are versatile, designed to handle current and future maritime challenges.

  • Why: Equipped with advanced technology like CODOG propulsion and an Integrated Platform Management System (IPMS) for enhanced performance.

NCDC Grant-in-Aid

• Scheme Approved: The Union Cabinet has approved a Central Sector Scheme titled “Grant in aid to National Cooperative Development Corporation (NCDC)”.

• Outlay and Duration: The scheme has an outlay of ₹2000 crore for four years, from 2025-26 to 2028-29, with ₹500 crore allocated annually.

• Purpose: The grant will enable NCDC to raise ₹20,000 crore from the open market to provide loans to cooperatives.

• Fund Utilization: These funds will be used for new cooperative projects, expansion of existing units, and meeting working capital needs.

• Beneficiaries: Approximately 2.9 crore members from 13,288 cooperative societies across sectors like dairy, fisheries, sugar, textile, food processing, storage, and women-led cooperatives will benefit.

• NCDC’s Role: NCDC, with a strong recovery rate and zero NPAs, will act as the executing agency, managing disbursement, monitoring, and loan recovery.

• Impact: The scheme aims to create income-generating assets, improve liquidity for cooperatives, boost modernization and profitability, and generate employment, thereby enhancing the economic conditions of farmer members.

• Context: The cooperative sector significantly contributes to the Indian economy and socio-economic upliftment, with over 8.25 lakh cooperatives and 29 crore members. This support is crucial for weaker sectors within the cooperative framework.

Anti-defection Law

• Supreme Court Criticizes Delay in Disqualification Petitions: The Supreme Court has strongly criticized the Telangana Assembly Speaker for significant delays in deciding anti-defection petitions.

  • Why it’s news: This highlights a systemic issue where the anti-defection law, intended to curb political defection, is being undermined by procedural delays, making a mockery of the Tenth Schedule.

• Mandatory Resolution Timeline: The Supreme Court emphasized that anti-defection cases should be resolved within three months.

  • Why it’s news: This sets a precedent for timely action, aiming to prevent disqualification proceedings from “dying a natural death” due to prolonged inaction by Speakers.

• Judicial Review of Speaker’s Actions: The Court affirmed that Speakers are not immune from judicial review when acting under the Tenth Schedule.

  • Why it’s news: This clarifies the accountability of the Speaker’s office, ensuring their actions in disqualification matters are subject to scrutiny if they fail to act expeditiously as intended by Parliament.

• Tenth Schedule’s Purpose: The Tenth Schedule, introduced by the 52nd Amendment Act, 1985, aims to curb political defections by legislators.

  • Why it’s news: This contextualizes the current issue within the broader framework of the anti-defection law, underscoring the importance of its effective implementation.

Ocean Hot Spells

• Why in News:

  • 96% of the ocean surface affected by marine heatwaves (MHWs) in 2023.
  • Concerns about a permanent temperature shift disrupting life.

• Key Facts Regarding Marine Heatwaves:

  • Definition: Sea surface temperatures rise 3-4°C above average for at least five days.
  • Duration: Can last weeks, months, or years.
  • Causes:
    • Global Warming: Oceans absorb 90% of excess heat.
    • El Nino/PDO: Warms upper ocean layers, weakens upwelling.
    • Reduced Cloud Cover: Allows more sunlight to reach the ocean.
    • Changing Ocean Currents: E.g., weaker Gulf Stream causes regional warming.
    • Human-Induced Feedback Loops: Melting Arctic ice, reduced CO₂ absorption by coral.
  • Projected Trends: MHWs could become up to 50 times more frequent by 2100.

• Effects of Marine Heatwaves:

  • Climatic Impacts: Fuel extreme weather (hurricanes), disrupt water cycle (floods, droughts, wildfires).
  • Economic Impact: Harm aquaculture and fisheries, affecting local economies.
  • Ecological Consequences: Cause mass mortality, disrupt food webs, affect wildlife behavior, spread invasive species, damage key habitats (coral reefs, kelp).
  • Compounding Stressors: Coincide with ocean acidification, deoxygenation, and overfishing.

• Prevention and Mitigation:

  • Strengthen ocean monitoring and prediction.
  • Protect and restore marine ecosystems (MPAs, coastal zones).
  • Advance sustainable fishing and aquaculture.
  • Enhance global cooperation (Paris Agreement, UNCLOS).
  • Reduce greenhouse gas emissions.
  • Reduce local ocean stressors (pollution, cooling surfaces).

Primordial Waters

• Discovery: Scientists found travertine (calcium carbonate) deposits in Puga Valley hot springs, Ladakh.
  • Why: This is significant because travertine can trap organic molecules like amino acids and fatty acids.
• Support for Geothermal Origin of Life: The findings support theories that life may have originated in hot, geothermal environments.
  • Why: This provides evidence that such environments could have acted as “prebiotic reactors,” crucial for life’s beginnings on early Earth or other planets.
• Challenge to Silica-Based Theories: The study suggests calcium carbonate, not just silica, can preserve biosignatures.
  • Why: This expands our understanding of where and how early life’s chemical building blocks could have been preserved.
• Implications for Astrobiology: Findings could guide ISRO’s astrobiological missions.
  • Why: It helps identify potential biosignatures on Mars-like terrains, looking for similar carbonate formations.
• Puga Valley Hot Springs: Known for geothermal activity, sulphur springs, and energy potential.
  • Why: This location provided the real-world context for the scientific discovery.