Daily Current Affairs and News Analysis 16-08-2025

Dramatic Decline: Affected districts reduced from 126 to ~38; incidents down ~70%; fatalities at multi-decade lows.

• Why: Security dominance (FOBs, grid policing), leadership attrition/surrenders, and weakened political messaging.

Shift from Movement to Fragments: Naxalism is now regional, tactically violent cells, not pan-India ideological insurgency.

• Why: Continuous decapitation of leadership and reduced recruitment pools.

Security Dominance & Governance Entry: Forward operating bases enable civil administration and welfare.

• Why: Allows for greater reach and implementation of government schemes.

Challenges Persist: Governance deficits (land/forest rights, slow justice), resource conflicts (mining, displacement), inter-state mobility, and cadre sustenance via extortion.

• Why: Underlying socio-economic grievances remain unresolved.

Emerging Challenges: Technology diffusion (IEDs, drones, encrypted comms), micro-cells with urban facilitators, perception risks from heavy-handed operations, and post-clearance vacuums.

• Why: Adaptability of extremist groups and potential for backlash from security operations.

Way Forward:

• Security: Expand specialized units (Greyhounds/CoBRA model), enhance tech capabilities (counter-drone, SIGINT), seam management, and targeted finance choke.
• Governance & Rights: Fast-track FRA, value chains for forest produce, transparent benefit-sharing in extractives, last-mile state capacity, and justice/accountability mechanisms.
• Socio-economic: Youth diversion programs, linking surrenderers to jobs.
• Narrative & Legal Clarity: Differentiate lawful dissent, protect civil society, and ensure proactive communication/grievance redressal.
• Why: A holistic approach combining security with rights-anchored development and accountable governance is crucial for durable peace.

Launch of State Health Regulatory Excellence Index (SHRESTH): Union Health Ministry has introduced SHRESTH.

• Why in News: This is a significant initiative by the central government to enhance drug safety and quality nationwide.

Purpose of SHRESTH: It’s a virtual gap assessment tool developed by CDSCO to help states evaluate their progress towards maturity certification for drug regulation.

• Why in News: It provides a standardized method for states to identify and address shortcomings in their regulatory systems.

Key Assessment Areas: SHRESTH evaluates states on human resources, lab testing, licensing, surveillance, and grievance redressal.

• Why in News: This comprehensive assessment ensures a holistic view of regulatory capabilities across different states.

Categorization of States: States are classified as Manufacturing or Primarily Distribution States/UTs.

• Why in News: This allows for tailored assessments and targeted improvements based on the specific roles of each state in the drug supply chain.

Monitoring and Accountability Mechanism: States submit monthly data to CDSCO, which compiles scores and shares them.

• Why in News: This establishes a system of continuous monitoring and holds states accountable for their regulatory performance.

Alignment with Global Standards: SHRESTH aims to align with WHO’s Global Benchmarking Tool (GBT) Maturity Level 3 (ML3).

• Why in News: This reinforces India’s aspiration to be the “Pharmacy of the World” by ensuring its regulatory system meets international quality benchmarks, building on India’s achievement of ML3 in 2024.

Why in News: Wildfires have ravaged several Mediterranean countries, including Albania, Greece, Italy, Portugal, Spain, and Turkey, causing fatalities and widespread evacuations.

What are Wildfires? Uncontrolled fires in vegetated areas (forests, grasslands, etc.) spread by wind and terrain, fueled by dry matter, oxygen, and heat.

Types of Wildfires:

• Surface Fire: Burns along the ground.
• Underground/Zombie Fire: Burns organic matter beneath the surface, slow and undetected.
• Canopy/Crown Fire: Spreads through treetops, intense and difficult to control.
• Controlled Deliberate Fire: Planned burns for fuel reduction.

Key Causes:

• Geography: Mediterranean climates with hot, dry summers and dry winds.
• Climate Change: Droughts, heatwaves, and El Niño dry vegetation.
• Human Factors: Slash-and-burn agriculture, tourism, waste mismanagement.
• Weak Management: Inadequate surveillance, outdated response systems.
• Flammable Vegetation: Dry forests, pine needles, bamboo.
• Deforestation: Habitat degradation and fragmentation.

Major Impacts:

• Air Pollution: Release of CO₂, PM2.5, and toxic gases.
• Biodiversity Loss: Wildlife deaths and habitat destruction.
• Human Health: Respiratory problems, heat injuries, mental stress.
• Economic Damage: Property loss, firefighting costs, agricultural damage.
• Soil & Water Degradation: Erosion and water pollution.

Wildfires in India: Over 36% of India’s forest cover is prone to fires, with significant surges in incidents in mountain regions.

Needed Steps:

• Integrated Fire Management: Prescribed burning, fuel reduction, safety regulations.
• Community Involvement: Training and incentives for local participation.
• Advanced Technology: AI prediction, satellite monitoring, real-time alerts.
• Ecosystem Restoration: Promoting fire-resistant species, resilient forestry.
• Policy Enforcement: Strict regulations on development and land use.

Record-Breaking Dives: Two Indian aquanauts, Cdr (Retd) Jatinder Pal Singh and R. Ramesh, reached depths of 5,002m and 4,025m in the Atlantic Ocean.

• Why: This surpasses previous Indian deep-sea dive limits (500m, deepest 670m) and serves as crucial preparation for the Samudrayaan Mission.

Samudrayaan Mission Advance: These dives are a significant step for India’s Samudrayaan Mission, scheduled for 2027.

• Why: The mission aims to explore deep-sea resources and develop advanced technologies, with aquanauts targeting depths of up to 6,000m in the MATSYA 6000 submersible.

International Collaboration: The Indian flag was unfurled underwater alongside the French flag.

• Why: Symbolizes India’s commitment to international cooperation in deep-sea exploration.

Mission Objectives: Key goals include exploring polymetallic nodules and minerals, developing deep-sea technologies (submersibles, mining systems, robotics), understanding biodiversity, and enhancing India’s Blue Economy and energy security.

• Why: These objectives are critical for resource utilization and scientific understanding of the deep ocean.

RBI Releases FREE-AI Report: The Reserve Bank of India has launched the Framework for Responsible and Ethical Enablement of Artificial Intelligence (FREE-AI) Committee Report.

• Why: To guide the responsible and ethical adoption of AI in India’s financial sector, balancing innovation with risk management.

Seven Guiding Sutras for AI Adoption: The report outlines seven key principles for responsible AI use:

• Trust: AI systems must be reliable, transparent, and foster public confidence.
• People First: AI should support human decision-making, prioritizing citizen welfare and dignity.
• Innovation over Restraint: Encourage responsible innovation without unnecessary restrictions.
• Fairness and Equity: AI outcomes must be non-discriminatory.
• Accountability: Entities deploying AI are responsible for its decisions and impacts.
• Understandable by Design: AI systems and their decisions should be interpretable.
• Safety, Resilience, and Sustainability: AI should be secure, adaptable, and long-term viable.

Significance of AI in Finance:

• Revenue Growth: Projected to drive significant revenue increase.
• Efficiency & Personalization: Streamlines tasks, enabling faster and more accurate data processing.
• Financial Inclusion: Uses alternative data to assess creditworthiness for underserved populations.
• Digital Infrastructure: Enhances India’s digital public infrastructure for personalized services.
• Risk Management: Improves fraud detection, early risk warnings, and decision-making.

Challenges of AI in Finance:

• Model Bias: Training data can lead to unfair decisions and make AI systems difficult to audit.
• Third-Party Risks: Reliance on vendors can lead to service disruptions or cyber vulnerabilities.
• Regulatory & Liability Concerns: Lack of transparency complicates liability allocation.
• Cybersecurity Threats: AI can introduce new attack vectors like data poisoning.
• Ethical & Consumer Protection: Algorithmic bias and privacy violations can erode trust.

RBI Recommendations:

• Innovation Enablement: Develop high-quality financial sector data infrastructure and an AI Innovation Sandbox for testing.
• Consumer Protection & Security: Conduct AI red teaming and implement incident reporting frameworks.
• Capacity Building: Develop training programs for AI governance and risk mitigation.
• AI Incident Reporting: Establish a framework for timely detection and disclosure of AI-related issues.

Freedom as Opportunity, Not Absence of Restraint: News emphasizes that true freedom means having the chance to question, reason, and disagree, not just being free from external control. This is crucial for a vibrant democracy.

Democracy Needs Critical Citizenship: The health of democracy depends on citizens actively challenging authority and holding institutions accountable. Without space for dissent, democracy risks becoming a mere formality.

Constitutional Basis of Freedoms: India’s Constitution, particularly Article 19, guarantees fundamental rights like freedom of speech and association. This establishes a framework for balancing state authority with citizen liberties.

Constitutional Morality is Key: Upholding constitutional morality, which involves respecting institutions while also questioning them, is essential for sustaining freedom, as highlighted by Dr. Ambedkar.

Civic Freedom is Active Participation: True civic freedom involves citizens being active participants in policy-making and challenging state actions, rather than being passive subjects. Pluralism and tolerance are seen as strengths.

Measuring Freedom by Civic Virtues: The quality of freedom in India should be judged by its protection of constitutional values, democratic dissent, and citizen autonomy, not just by military or economic strength.

• Why: This signifies a major legislative step towards modernizing India’s income tax laws.

• Why: This addresses the long-standing need for a more accessible and efficient tax framework, potentially reducing compliance burdens.

• Why: This expansion signals an attempt to bring digital activities and assets under the tax net, acknowledging the evolving economic landscape.

• Why: This provision aims to curb tax evasion and under-reported income in the digital realm, though it raises privacy concerns.

• Why: This streamlines the tax calendar, making it easier for taxpayers to understand and comply with deadlines.

• Why: This provides relief for students pursuing education abroad, making it more affordable by removing an additional tax burden.

• Why: This simplifies the process for low-income earners and those with zero tax liability, preventing unnecessary tax deductions.

• Why: This ensures consistency in tax treatment for LLPs, promoting a fairer and more predictable tax environment.

High-Stakes US-Russia Summit in Alaska: President Trump and President Putin to meet, aiming to negotiate an end to the Ukraine war, the first such meeting since June 2021.

• Why: Crucial for Ukraine’s fate and European security, with significant global implications.

Trump Seeks “Win” and Global Image Boost: Aims for a ceasefire and recognition as a deal-maker, potentially linked to a Nobel Peace Prize.

• Why: To enhance his domestic and international standing.

Putin Demands Recognition and Security Guarantees: Seeks acknowledgment of annexed territories, a halt to NATO expansion, and sanctions relief while retaining occupied lands.

• Why: To consolidate gains and secure Russia’s strategic interests.

Zelenskyy Insists on Sovereignty and Continued Support: Demands no territorial concessions and ongoing Western military and financial aid for a lasting peace.

• Why: To preserve Ukraine’s independence and territorial integrity.

Europe Fears Marginalization: EU leaders emphasize unity but worry that US-Russia talks could overlook European interests, recalling historical precedents.

• Why: To ensure European security priorities are addressed and not bypassed.

India Concerned by Sanctions’ Impact: Affected by US tariffs on Russian oil and Indian exports, seeking a stabilizing outcome to protect its economy and geopolitical balance.

• Why: To mitigate economic damage and maintain stability for its own interests.

Why in News: Union Cabinet approved 4 new semiconductor projects in Odisha, Punjab, and Andhra Pradesh under India Semiconductor Mission (ISM), bringing total to 10 projects across 6 states.

Market Size & Growth: India’s semiconductor consumption market to reach USD 103.4 billion by 2030 (CAGR 13%). Mobile, IT, and industrial sectors are key, with automotive and industrial electronics offering significant scope.

Surging Imports: Imports of ICs, memory chips, and amplifiers surged by 2,000%–4,800% (FY16–24), with China as a major supplier.

Key Opportunities:

• Large Market Potential: India is the world’s second-largest 5G smartphone market.
• Domestic Demand: Growing consumption of digital devices, 5G rollout, and AI adoption drive demand.
• Global Partnerships: Collaborations with US and Japan facilitate technology transfer.
• Government Support: Semicon India Programme and ISM strengthen the ecosystem.

India Semiconductor Mission (ISM): Aims to establish India as a global manufacturing hub by supporting chip design startups, indigenous IP, R&D, and reducing import dependence.

Key Schemes: Include 50% fiscal support for Semiconductor Fabs, Display Fabs, Compound Semiconductors & ATMP/OSAT, and the Design Linked Incentive (DLI) Scheme for startups.

Key Challenges:

• Infrastructure & Innovation: High setup costs, need for advanced infrastructure, technology, and skilled talent; weak R&D and dependence on imported components.
• Skilled Workforce Gap: Projected shortfall of 250,000–350,000 skilled workers by 2027.
• Technology & Global Competition: Dominance of Taiwan, South Korea, ASML (Netherlands), Nvidia, and ARM in advanced technologies.
• Environmental & Regulatory: Hazardous material usage, high energy consumption, complex regulations, IP issues, and export controls.

Steps to Strengthen:

• Skill Development: Specialized training programs.
• Boost R&D & Indigenous IP: Increase investment, support product design.
• Incentives & Policy Support: Strengthen ISM and state policies.
• Chip Diplomacy & Niche Focus: International collaboration, focus on MEMS and sensors.
• Private Sector Participation: Encourage investment and collaborations (e.g., Tata-PSMC).

CAG Flags Shortfall: The Comptroller and Auditor General (CAG) has identified a Rs 3.69 lakh crore shortfall in the transfer of cess collections to their intended funds. This highlights issues with the utilization of these specific levies.

Cess Defined: A cess is an additional tax levied by the Union government on top of existing taxes for a specific, stated purpose.

Purpose-Driven Levy: Unlike general taxes, the proceeds from a cess are legally earmarked and must be used solely for the purpose for which they were collected. Cesses are named according to their intended use (e.g., Education Cess).

Union Finance Role: Cess collections are credited to the Consolidated Fund of India but are kept separate from the divisible pool of taxes shared with states, remaining under Union government control for their designated purpose.

Distinction from Taxes: While both are government levies, taxes can be used for general expenditure and are often shared with states. Cesses are strictly for specified purposes and generally not shared.