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INTEGRATED MAINS AND PRELIMS MENTORSHIP (IMPM) KEY (08/03/2025)

INTEGRATED MAINS AND PRELIMS MENTORSHIP (IMPM) 2025 Daily KEY

 
 
 
 
Exclusive for Subscribers Daily: Quantum Computing and Space Debris for the UPSC Exam? Why are topics like Delimitation Commission  , Paris agreement important for both preliminary and main exams? Discover more insights in the UPSC Exam Notes for March 08, 2025

 

🚨 UPSC EXAM NOTES presents the March edition of our comprehensive monthly guide. Access it  to enhance your preparation. We value your input - share your thoughts and recommendations in the comments section or via email at Support@upscexamnotes.com 🚨

Critical Topics and Their Significance for the UPSC CSE Examination on March 08, 2025

Daily Insights and Initiatives for UPSC Exam Notes: Comprehensive explanations and high-quality material provided regularly for students

 

NITI Aayog’s report on quantum computing

For Preliminary Examination:  Current events of national and international importance

For Mains Examination: GS III - Science & Technology

Context:

To accelerate India’s transition into a frontier Tech nation, NITI Aayog has, recently, established the NITI Frontier Tech Hub (NITI-FTH). In partnership with the Data Security Council of India, NITI-FTH has released a strategic paper on the rapid evolution of Quantum Computing, and its implications on National Security and provides strategic perspectives to help India navigate and lead in a transformative era

 

Read about:

What is Quantum Computing?

National Quantum Mission

Key takeaways:

 

Quantum Technology and Its Significance

Quantum technology is a broad term encompassing advancements that are fundamentally based on the principles of quantum mechanics. It involves the development of essential hardware, software, algorithms, and protocols to design and build quantum computing devices such as quantum computers.

This technology leverages quantum mechanical principles like superposition, entanglement, and interference to significantly enhance computational efficiency, particularly in large-scale problem-solving.

Key Concepts in Quantum Computing

  • Superposition: Unlike classical bits, quantum computing operates using quantum bits or "qubits," whose stability is critical for computational performance. Superposition allows qubits to exist in multiple states simultaneously until they are measured. Once observed, a qubit collapses into a definite state, losing its ability to be in multiple locations at once.

  • Entanglement: This phenomenon occurs when two or more particles that have interacted remain linked, meaning that measuring one particle instantly determines the state of the other, regardless of distance. Entanglement is particularly useful in secure quantum communication, as it enables secure transmission of information between a sender and a receiver.

  • Interference: Quantum interference arises from the superposition of quantum states, influencing the probability of different outcomes. While entanglement links two particles, interference occurs among multiple particles. This principle helps refine quantum algorithms by amplifying the most probable solutions while suppressing less likely ones, thereby improving computational accuracy.

Quantum Computing’s Role in National Security

According to the NITI Frontier Tech Hub’s Quarterly Insight, quantum technologies are transforming national security in several ways:

  • Cryptography and Cybersecurity: Traditional public-key encryption methods are vulnerable to quantum attacks, especially from cryptanalytically relevant quantum computers (CRQCs). The report recommends the adoption of Post-Quantum Cryptography (PQC)—new cryptographic techniques designed to withstand quantum-based threats—to ensure robust data protection.

  • Intelligence and Surveillance: Quantum computing is set to revolutionize Signals Intelligence (SIGINT) by enabling nations to intercept, analyze, and decode communication on a massive scale. This will provide intelligence agencies with unprecedented capabilities in espionage and counterintelligence.

  • Military Applications: Quantum technologies will optimize logistics, battlefield decision-making, and resource allocation, making defense strategies more effective. Quantum AI will enhance autonomous military drones and robotic systems, while topological qubits—which promise scalable qubit systems—could enable advanced stealth detection and improve control mechanisms for autonomous weapon systems.

  • Economic and Financial Security: The ability of quantum computers to break modern encryption could disrupt global financial systems, expose banking networks to cyber threats, and compromise digital payment infrastructures. Additionally, quantum technology could be weaponized for economic espionage, allowing nations to steal sensitive corporate and governmental data.

  • Geopolitical Influence: A country’s dominance in quantum research and development will provide a strategic advantage in shaping global technology standards and international regulations. The stability and scalability of topological qubits will further consolidate the power of leading quantum nations, strengthening their geopolitical standing.

National Quantum Mission

  • The National Quantum Mission (NQM) was launched in 2023 to bolster India's capabilities in quantum science and technology. It focuses on four major areas: Quantum Computing, Quantum Communication, Quantum Sensing & Metrology, and Quantum Materials & Devices.

  • The mission has an allocated budget of ₹6,003.65 crore, funding scientific and industrial research initiatives over eight years (2023-2031). Four Thematic Hubs (T-Hubs) will be set up, each dedicated to one of the key focus areas. The Union Budget for the current financial year saw a revision in estimated expenditure, reducing it from ₹427 crore to ₹86 crore, with a projected increase to ₹600 crore for 2025-26

 

Follow Up Question

1.Which one of the following is the context in which the term "qubit" is mentioned? (UPSC 2022)

A. Cloud Services

B. Quantum Computing

C. Visible Light Communication Technologies

D. Wireless Communication Technologies

 

Answer (B)
 
A qubit (quantum bit) is the fundamental unit of information in quantum computing. Unlike classical bits, which can be either 0 or 1, qubits can exist in multiple states simultaneously due to superposition, making quantum computers far more powerful for certain types of computations
 
 
 
For Preliminary Examination:  Current events of national and international importance
 
For Mains Examination: GS III - Science & Technology
 
Context:
 
Despite being a critical issue in space governance, space debris lacks a universally accepted legal definition; thus, legal disputes often hinge on whether a piece of debris qualifies as a ‘space object’ under the Convention for International Liability for Damage Caused by Space Objects of 1972
 
Read about:
 
What is Space debris?
 
Conventions on Space debris
 
Key takeaways:
 
  • Space debris, also known as space junk, refers to the collection of defunct objects that orbit Earth. These objects include abandoned satellites, spent rocket stages, fragments from collisions, and even tiny particles such as paint chips or metal shards.
  • Since the beginning of space exploration, numerous satellites and spacecraft have been launched into orbit, and many of them have either completed their missions or broken apart, leaving behind a cluttered environment in space.
  • The problem of space debris arises because these objects continue to travel at extremely high speeds—often exceeding 27,000 kilometers per hour. At such velocities, even a small fragment can cause significant damage to operational satellites or space stations if they collide. This has led to concerns about the safety of space missions and the sustainability of Earth's orbital environment.
  • One of the most alarming risks associated with space debris is the Kessler Syndrome, a scenario where collisions between debris create even more fragments, leading to a chain reaction of destructive impacts. If left unchecked, this could make certain orbits unusable for future missions.
  • Efforts are being made to mitigate the issue through various strategies, such as designing satellites with de-orbiting mechanisms, using robotic arms or nets to capture debris, and exploring technologies like laser systems to push small fragments out of critical orbits.
  • However, with an increasing number of satellites being launched, especially for commercial and communication purposes, space debris remains a growing challenge that requires international cooperation and innovative solutions
 
 
 Laws regarding Space debris
 
  • Although space debris is a crucial concern in space governance, it lacks a universally recognized legal definition in international treaties. Instead, commonly referenced definitions are provided by the Inter-Agency Space Debris Coordination Committee and the UN Committee on the Peaceful Uses of Outer Space (COPUOS).
  • According to COPUOS, space debris encompasses all human-made objects—including fragments and components—that exist in Earth’s orbit or are re-entering the atmosphere without any functional purpose.
  • Due to the absence of a clear definition, legal disputes often revolve around whether a particular piece of debris qualifies as a “space object” under the 1972 Convention on International Liability for Damage Caused by Space Objects.
  • This classification is significant because the convention assigns liability to space objects, but if debris is no longer under a state’s control, enforcing responsibility becomes more complex.
  • A fundamental principle of international space law is outlined in Article VI of the 1967 Outer Space Treaty, which holds states accountable for all national space activities, regardless of whether they are conducted by government agencies or private entities.
  • Additionally, the 1972 Liability Convention introduced the concept of “absolute liability” for damage caused by space objects on Earth.
  • Unlike fault-based liability, absolute liability does not require proof of negligence—launching states are automatically held accountable for any damage resulting from their space debris
 
Follow Up Question
 
1.Which of the following pairs is/are correctly matched? (UPSC 2014)
               Spacecraft                                                         Purpose
1. Cassini-Huygens:                                 Orbiting Venus and transmitting data to theEarth   
2. Messenger:                                            Mapping and investigating the Mercury
3. Voyager 1 and 2:                                   Exploring the outer solar system
Select the correct answer using the code given below:
A. 1 only           
B. 2 and 3 only           
C. 1 and 3 only                     
D. 1, 2 and 3
 
Answer (B)
 

  • Cassini-Huygens: This spacecraft was a collaborative mission between NASA, ESA (European Space Agency), and ASI (Italian Space Agency). It was designed to study Saturn and its largest moon, Titan, not Venus. Therefore, this pair is incorrect.

  • Messenger: This NASA mission was launched to study Mercury, becoming the first spacecraft to orbit the planet. It mapped Mercury's surface and investigated its magnetic field and composition, making this pair correct.

  • Voyager 1 and 2: These NASA spacecraft were launched to explore the outer solar system, including Jupiter, Saturn, Uranus, and Neptune. They continue to transmit data from the outer reaches of the solar system, making this pair correct.

Hence, the right option is B. 2 and 3 only
 
 

 

What are the issues around delimitation?

For Preliminary Examination:   Current events of national and international importance

For Mains Examination: GS II - Polity & Governance

Context:

There has been a renewed debate about delimitation after the issue was raised by the Chief Minister of Tamil Nadu. The delimitation of constituencies for the Lok Sabha and State Legislative Assemblies is to be carried out on the basis of the first Census after 2026.

Read about: 

What is a Delimitation Commission?

Census Exercise

 

Key takeaways:

 

  • Delimitation refers to the process of determining the number of seats and defining the boundaries of territorial constituencies in each state for both the Lok Sabha and Legislative Assemblies.
  • This task is undertaken by the Delimitation Commission, which is established through an act of Parliament. Past delimitation exercises were conducted based on the Census figures of 1951, 1961, and 1971.
  • The total number of Lok Sabha seats was fixed at 543 following the 1971 Census, when the population stood at 54.8 crores. Since then, this figure has remained unchanged to promote population control initiatives.
  • However, a revision is scheduled to take place after the first Census conducted post-2026. With the 2021 Census delayed due to the COVID-19 pandemic, discussions have emerged linking it to the upcoming delimitation process.

Key Issues in Delimitation

Over the past five decades, India's population growth has been uneven across states. Northern states such as Uttar Pradesh, Bihar, Madhya Pradesh, and Rajasthan have experienced significantly higher growth rates compared to southern states like Kerala, Tamil Nadu, Karnataka, and Andhra Pradesh. Two possible approaches to delimitation are being considered:

  1. Retaining the current number of 543 seats while redistributing them among states.
  2. Expanding the Lok Sabha to 848 seats, proportionally increasing representation across states.

Union Home Minister Amit Shah recently assured that no state would lose its existing seat share and that any increase would be implemented on a pro-rata basis. However, the criteria for this proportional allocation—whether based on the current seat distribution or projected population—is unclear.

If future seat allocation follows projected population figures, southern states, along with smaller northern states like Punjab, Himachal Pradesh, and Uttarakhand, as well as northeastern states, may receive fewer seats compared to larger northern states. This could potentially disrupt the federal balance, diminishing political influence for regions that have successfully controlled their population. Currently, southern states hold a 24% share of Lok Sabha seats, which could drop by 5% under such a system.

Possible Solutions

  • Democracy is based on the principle of one citizen, one vote, one value. However, this principle has already been adjusted since 1976, when delimitation was first postponed to encourage population control.
  • In contrast, the United States has maintained a fixed number of 435 seats in its House of Representatives since 1913, despite its population nearly quadrupling from 9.4 crores in 1911 to an estimated 34 crores in 2024.
  • The primary role of a Member of Parliament (MP) is to legislate on matters in the Union List and oversee the functioning of the Union Government, while most central schemes are executed by state administrations.
  • Despite India's population rising from 55 crores to 145 crores over the past five decades, the Lok Sabha has functioned effectively with 543 MPs. With the country’s population expected to peak at 165-170 crores in the next three decades before gradually declining, maintaining the current number of Lok Sabha seats could be a viable option. This would preserve existing state-wise representation and uphold the federal structure.
  • To safeguard regional political interests, MPs and political leaders from southern states, smaller northern states, and the northeastern region should advocate for capping Lok Sabha seats at 543. Meanwhile, to ensure adequate local representation, state assemblies could increase the number of MLAs in proportion to projected population growth
 
Follow Up Question
 
1.With reference to the Delimitation Commission, consider the following statements: (UPSC 2012)
1. The orders of the Delimitation Commission cannot be challenged in a Court of Law.
2. When the orders of the Delimitation Commission are laid before the Lok Sabha or State Legislative Assembly, they cannot effect any modifications in the orders.
Which of the statements given above is/are correct? 
A. 1 only             
B. 2 only           
C. Both 1 and 2               
D. Neither 1 nor 2
 
Answer (C)
 

  • The orders of the Delimitation Commission cannot be challenged in a Court of Law – Correct.

    • The Delimitation Commission is established under an act of Parliament and its orders have the force of law.
    • As per the provisions of the Delimitation Act, the final orders of the Commission cannot be questioned or challenged in any court.

  • When the orders of the Delimitation Commission are laid before the Lok Sabha or State Legislative Assembly, they cannot effect any modifications in the orders – Correct.

    • Once the Delimitation Commission finalizes its orders, they are laid before the Lok Sabha and the respective State Legislative Assemblies. However, these bodies have no power to amend or modify the orders.
    • The orders are considered final and automatically come into effect
 

 

What did the HC rule about arresting women at night?

For Preliminary Examination:  Current events of national and international importance

For Mains Examination: GS II - Governance

Context:

The Madurai Bench of the Madras High Court in Deepa versus S. Vijayalakshmi and Others ruled that the legal provision in the Bharatiya Nagarik Suraksha Sanhita (BNSS), 2023, which restricts the arrest of a woman after sunset and before sunrise, is directory and not mandatory

 

Read about:

First Information Report (FIR)

Bharatiya Nagarik Suraksha Sanhita (BNSS), 2023

 

Key takeaways:

  • The Madurai Bench of the Madras High Court, in the case of Deepa vs. S. Vijayalakshmi & Others, ruled that the legal provision in the Bharatiya Nagarik Suraksha Sanhita (BNSS), 2023, which restricts the arrest of women between sunset and sunrise, is directory rather than mandatory.
  • The case involved a woman arrested at 8 PM, where a single judge initially held that the arrest violated Section 46(4) of the CrPC. However, upon appeal, a two-judge bench determined that this provision is not absolute.
  • Section 43(5) of BNSS, corresponding to Section 46(4) of the CrPC, includes two safeguards:
  1. Women should not be arrested at night, except under exceptional circumstances.
  2. In such cases, a woman police officer must obtain prior approval from a jurisdictional magistrate through a written request.
  • This provision aims to protect women but does not clearly define what constitutes an exceptional situation. Furthermore, Section 46(1) of the CrPC states that a male officer should not touch a woman unless a female officer is unavailable, or the situation demands it.
  • The Madras High Court emphasized that Section 46(4) of the CrPC does not specify consequences for non-compliance. If the provision were meant to be mandatory, the legislature would have outlined penalties for violating it.
  • The Court also noted that in cases where a serious crime is committed at night, strict adherence to the procedure could allow the accused to escape, which may compromise public interest.
  • The Law Commission of India, in its 135th (1989) and 154th (1996) reports, recommended that women should not be arrested at night unless necessary approvals were obtained.
  • Section 46(4) of the CrPC was added in 2005, incorporating these recommendations with modifications. The Nagpur Bench of the Bombay High Court also ruled that no woman should be detained without a female constable, and never at night. However, the Supreme Court later acknowledged that strict enforcement of this rule might cause practical challenges.
  • The Madras High Court clarified that while Section 46(4) of the CrPC is not mandatory, police officers must justify any deviation from the rule. Although failure to comply does not necessarily invalidate an arrest, the officer may be required to explain the reasons for non-compliance. The Court also directed police authorities to establish clear guidelines defining what qualifies as exceptional circumstances for arrests of women during restricted hours

 Follow-Up Question

 

1.Which of the following statements regarding the arrest of women under the Bharatiya Nagarik Suraksha Sanhita (BNSS), 2023, and the Code of Criminal Procedure (CrPC) is/are correct?

  1. Section 43(5) of BNSS (corresponding to Section 46(4) of CrPC) strictly prohibits the arrest of women after sunset and before sunrise under all circumstances.
  2. In exceptional cases, the prior permission of the jurisdictional magistrate must be obtained for such an arrest.
  3. The Madras High Court ruled that the provision restricting nighttime arrests of women is mandatory, and any violation renders the arrest illegal.
  4. The Supreme Court has acknowledged that strict enforcement of this rule may create practical difficulties in certain cases.

Select the correct answer using the codes below:

 (a) 1 and 3 only
(b) 2 and 4 only
(c) 1, 2, and 3 only
(d) 1, 2, 3, and 4

 

Answer (b)
 
  • Statement 1 is incorrect: The provision does not absolutely prohibit the arrest of women at night; rather, it allows for exceptions under specific conditions.
  • Statement 2 is correct: In exceptional situations, a woman police officer must seek prior approval from the jurisdictional magistrate before making an arrest at night.
  • Statement 3 is incorrect: The Madras High Court ruled that the provision is directory, not mandatory, meaning a violation does not automatically invalidate an arrest.
  • Statement 4 is correct: The Supreme Court has noted that strict adherence to this rule may pose practical challenges, particularly in cases involving serious offenses

 

 

Paris Agreement

For Preliminary Examination:  Current events of national and international importance

For Mains Examination: GS II - International relations and Environment

Context:

The White House has confirmed that President Donald Trump will once again withdraw the United States from the Paris climate agreement. He has repeatedly referred to climate change as a “hoax” and seeks to free US oil and gas industries from environmental regulations.

 

Read about:

Paris agreement

All conventions related to Climate Change

 

Key takeaways:

  • The White House has announced that President Donald Trump intends to withdraw the United States from the Paris Agreement on climate change. Trump has consistently dismissed climate change as a "hoax" and aims to relieve the US oil and gas industries from environmental restrictions.
  • The Paris Agreement's central objective is to significantly reduce greenhouse gas (GHG) emissions to keep global warming this century "well below" 2 degrees Celsius above pre-industrial levels, while striving to limit warming to 1.5 degrees.
  • The 1.5-degree target is based on a report indicating that exceeding this threshold could expose certain regions and vulnerable ecosystems to heightened risks over an extended period.
  • Under the agreement, participating countries are required to update their plans to combat climate change—referred to as nationally determined contributions (NDCs)—every five years. Each updated NDC must reflect greater ambition than the previous version, as outlined by the United Nations Framework Convention on Climate Change (UNFCCC).

Withdrawal Process from the Paris Agreement

  • Article 28 of the Paris Agreement specifies the withdrawal procedure and timeline for member states. It allows any country to withdraw after three years from the agreement's entry into force (2016) by submitting written notification to the Depositary.
  • The withdrawal takes effect one year after the Depositary receives the notification or on a later date specified in the notice.
  • If a country chooses to exit, it must send the notification to the Office of Legal Affairs at the United Nations Headquarters in New York.
  • However, the withdrawal only becomes official one year after submission, during which the country remains bound by the agreement and must continue participating in its activities, as stated by the UNFCCC

COP and IPCC

Conference of the Parties (COP)

The Conference of the Parties (COP) is the annual gathering of members under the UN Framework Convention on Climate Change (UNFCCC), a global treaty formed in 1992 to guide climate negotiations. Currently, 198 parties, including 197 countries and the European Union, are signatories, reflecting near-universal participation.

Key Milestones from Previous COPs:

  • COP3, Kyoto, 1997: This meeting resulted in the adoption of the Kyoto Protocol, which required developed and industrialized nations to reduce their greenhouse gas emissions by specified amounts. However, it was short-lived due to dissatisfaction among powerful nations with its terms.
  • COP21, Paris, 2015: This summit produced the Paris Agreement, a landmark treaty aiming to limit global temperature rise to below 2°C, with efforts to stay below 1.5°C.
  • COP26, Glasgow, 2021: The Glasgow Pact included a pledge to “phase down” coal usage, a term softened from “phase out” during negotiations. It also committed to eliminating "inefficient fossil fuel subsidies," marking the first explicit mention of coal in a UN climate agreement.
  • COP28, Dubai, 2023: This conference saw the official launch of the Loss and Damage Fund, designed to provide financial assistance to nations affected by climate-related disasters.

Intergovernmental Panel on Climate Change (IPCC)

The Intergovernmental Panel on Climate Change (IPCC) is a UN organization tasked with evaluating the scientific basis of climate change. It was established in 1988 by the World Meteorological Organization (WMO) and the UN Environment Programme (UNEP).

Objectives of the IPCC:

  • To publish assessment reports, special reports, and methodology documents that analyze scientific data on climate change.
  • To suggest potential strategies for mitigating and adapting to climate change
 
Follow Up Question
 
1.With reference to the Agreement at the UNFCCC Meeting in Paris in 2015, which of the following statements is/are correct? (UPSC 2016)

1. The Agreement was signed by all the member countries of the UN and it will go into effect in 2017.

2. The Agreement aims to limit greenhouse gas emissions so that the rise in average global temperature by the end of this century does not exceed 2°C or even 1.5°C above pre-industrial levels.

3. Developed countries acknowledged their historical responsibility for global warming and committed to donate $1000 billion a year from 2020 to help developing countries cope with climate change.
 
Select the correct answer using the code given below
A. 1 and 3 only
B.  2 only
C.  2 and 3 only
D.  1, 2 and 3

 

Answer (B)
 

  • Statement 1: Incorrect.
    The Paris Agreement was adopted in 2015 and opened for signatures in 2016. It came into effect on November 4, 2016, after the required number of countries ratified it, not in 2017.

  • Statement 2: Correct.
    The Paris Agreement's main goal is to limit the global temperature increase to well below 2°C above pre-industrial levels, while striving to limit the increase to 1.5°C to mitigate the worst impacts of climate change.

  • Statement 3: Incorrect.
    Developed countries acknowledged their role in contributing to climate change and agreed to mobilize $100 billion per year by 2020 to assist developing countries. The figure mentioned in the statement, "$1000 billion," is inaccurate
 
 
 
 
For Preliminary Examination: Inflation, Consumer Price Index (CPI), Wholesale Price Index (WPI)
 
For Mains Examination: GS III - Economy
 
Context:
 
Trinidad and Tobago President Christine Carla Kangaloo will be the chief guest at the 18th Pravasi Bharatiya Divas (PBD) program to be held in Bhubaneswar from January 8 to 10, officials said on Friday. Notably, the Pravasi Bharatiya Divas is celebrated on 9th January since 2003 to mark the contribution of the Overseas Indian community in the development of India
 
 
Read about:
 
Retail Inflation
 
Food Inflation
 
Key takeaways:
 
  • India’s retail inflation likely saw a slight decrease from November’s 5.5% due to a modest rise in the prices of essential goods, although the average cost of home-cooked vegetarian and non-vegetarian meals increased by 6% and 12%, respectively, compared to the previous year.
  • According to Crisil’s monthly food plate tracker, the cost of a vegetarian meal dropped by 3% month-on-month in December, supported by a 12% decline in tomato and onion prices.
  • Meanwhile, the cost of a non-vegetarian meal rose by 3%, reaching a 16-month high of ₹63.3 due to an increase in broiler prices. Compared to December 2023, tomato prices surged by 22.4%, while potato prices saw a rise of over 52%.
  • Onions, on the other hand, became 1.2% cheaper, according to the Bank of Baroda (BoB) Essential Commodities Index, which tracks the prices of 20 food items. The index rose by 5.4% in December, slightly lower than the 5.5% increase in November. 
 
Food Inflation
 

Food inflation refers to the rate at which the prices of food items increase over time, which can significantly affect a country's overall inflation rate and the cost of living for its population. It is a critical economic indicator because food makes up a substantial portion of consumer spending, especially in developing countries.

Food inflation is influenced by various factors, including:

  • Supply and Demand: When food production is disrupted due to factors like weather conditions, natural disasters, or crop diseases, supply decreases while demand remains constant or increases, pushing prices up.
  • Government Policies: Policies such as subsidies, tariffs, or import/export regulations can affect food prices. For example, increasing tariffs on imported grains can raise local food prices.
  • Transportation and Labor Costs: Rising costs in transportation or labor can lead to higher prices for food items. If fuel prices increase, transportation costs rise, and this is often passed on to consumers in the form of higher food prices.
  • Global Trends: International factors, such as the global price of oil, exchange rates, and international demand for food commodities, can also affect domestic food inflation.
  • Monetary and Fiscal Policies: Central bank actions like interest rate changes and fiscal policies (such as changes in taxes or subsidies) can impact food prices by influencing the economy’s overall demand and supply dynamics
 
Follow Up Question
 

1.Consider the following statements: (UPSC CSE 2020)

  1. The weightage of food in Consumer Price Index (CPI) is higher than that in Wholesale Price Index (WPI).
  2. The WPI does not capture changes in the prices of services, which CPI does.
  3. Reserve Bank of India has now adopted WPI as its key measure of inflation and to decide on changing the key policy rates.

Which of the statements given above is/are correct?

(a) 1 and 2 only
(b) 2 only
(c) 3 only 
(d) 1, 2 and 3

Answer (a)
 

  • Statement 1: "The weightage of food in Consumer Price Index (CPI) is higher than that in Wholesale Price Index (WPI)."

    • This statement is correct. Food has a larger weight in the CPI compared to the WPI. The CPI includes a significant portion related to household consumption, including food, which constitutes a large part of a typical consumer's expenditure. In contrast, the WPI primarily tracks the prices of goods at the wholesale level and gives less weight to food.

  • Statement 2: "The WPI does not capture changes in the prices of services, which CPI does."

    • This statement is also correct. The WPI primarily tracks the prices of goods (manufactured goods, raw materials, etc.) and does not include services. On the other hand, the CPI includes both goods and services, reflecting a more comprehensive measure of inflation, especially in terms of what consumers pay for.

  • Statement 3: "Reserve Bank of India has now adopted WPI as its key measure of inflation and to decide on changing the key policy rates."

    • This statement is incorrect. The Reserve Bank of India (RBI) uses the CPI as its key measure of inflation for determining monetary policy and changes to key policy rates. The RBI shifted its focus to CPI inflation after it became the primary target for inflation targeting in 2016, not the WPI
 
 
 
 
 
For Preliminary Examination: FEMA, Rupee Exchange rate
 
For Mains Examination: GS III - Indian Economy
 
Context:
 
 The rupee is hitting fresh lows against the US dollar each day, yet its exchange rate has scaled an all-time-high in “real effective” terms.
 
Read about:
 

What is real effective exchange rate (REER)?

What is the difference between REER and Nominal Effective Exchange Rate (NEER)?

 
Key takeaways:
 

  • The real effective exchange rate (REER) index of the rupee reached a record high of 108.14 in November, reflecting a 4.5% increase during the current calendar year, as per the latest data from the Reserve Bank of India (RBI).

  • The REER gauges the rupee’s value not just against the dollar, but also against other global currencies. It is a weighted average of the rupee’s exchange rate against a basket of 40 currencies from countries that constitute about 88% of India’s annual trade. The REER also takes inflation differentials between India and these trading partners into account.

  • The rupee's REER, based on a 2015-16 base year and currency weights derived from the trade shares of individual countries with India, fell from 105.32 in January 2022 to 99.03 in April 2023. However, it has been appreciating since then, rising to 107.20 in October and 108.14 in November of this year.

  • The primary factor for this shift — the rupee’s occasional weakening and strengthening — is tied to the dollar’s performance over the past three months, particularly after Donald Trump’s victory in the U.S. presidential elections on November 5.

  • Essentially, the rupee isn’t weakening as much as the dollar is strengthening against all currencies. The dollar has strengthened due to Trump’s statements advocating for widespread tariff hikes (especially on Chinese imports), tax cuts financed by deficits, and large-scale deportations of illegal immigrants.

  • If the rupee was considered "fairly" valued in 2015-16, with the REER set at 100, any value above 100 indicates overvaluation, meaning the exchange rate hasn’t adjusted enough to counteract higher domestic inflation. Therefore, the rupee is currently overvalued, which makes imports cheaper and Indian exports less competitive. This likely explains why the RBI is now allowing the rupee to depreciate, particularly against the dollar.

  • The exchange rate refers to the rate at which one currency can be exchanged for another, such as how many rupees are needed to buy a dollar or a euro.

  • In the currency market, each currency behaves like a commodity, and its value relative to another currency is called the exchange rate. While exchange rates can remain stable, they typically fluctuate over time

 
Follow Up Question
 
1.Which one of the following groups of items is included in India's foreign exchange reserves? (UPSC CSE 2013)
A.Foreign-currency assets, Special Drawing Rights (SDRs) and loans from foreign countries B.Foreign-currency assets, gold holdings of the RBI and SDRs
C.Foreign-currency assets, loans from the World Bank and SDRs
D.Foreign-currency assets, gold holdings of the RBI and loans from the World Bank
 
Answer (B)
 

India's foreign exchange reserves consist of the following major components:

  1. Foreign-currency assets: These include the holdings of foreign currencies such as the U.S. dollar, euro, etc.
  2. Gold holdings of the RBI: The Reserve Bank of India (RBI) holds gold as part of the foreign exchange reserves.
  3. Special Drawing Rights (SDRs): These are international reserve assets created by the International Monetary Fund (IMF) and held by countries.
 
 
Subject and Subject Wise Notes for the Sunday Exam (Free)
 
Subject Topic Description
Polity Fundamental Duties Fundamental Duties
Environment & Ecology Biodiversity in India Biodiversity
History Modern Indian History Constitutional Development in India
History Modern Indian History Peasants, Tribal and other movements
 

 

UPSC EXAM NOTES will be conducting both Prelims and Mains exams every Sunday as part of the Integrated Mains and Prelims (IMPM) Program. This program provides a comprehensive approach to UPSC exam preparation, ensuring that candidates are well-prepared for both stages of the exam.

Program Highlights:

  • Daily Study Keys: Each day, we will provide keys that outline what to read, focusing on the most relevant topics and current affairs.
  • Subject Notes: In addition to daily keys, we will supply detailed subject notes to help you build a strong foundation in all necessary areas.
  • Sunday Exams: Every Sunday, a combined exam will be held, encompassing the daily keys' content and subject notes, along with a culmination of current affairs from various sources. These exams will cover both Prelims and Mains syllabi.
  • Format: Exams will be available in both online and offline formats to cater to different preferences and situations.

Duration: The IMPM plan is a one-year program, ensuring continuous and structured preparation over 12 months. With regular testing and consistent study guidance, this program is designed to maximize your chances of success in the UPSC exams
 
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