• On April 4, 2025, after an extensive 14-hour discussion in the Rajya Sabha, Parliament approved the controversial Waqf (Amendment) Bill, 2025. The Bill was passed in the Upper House with 128 votes in favour and 95 against, reflecting a tighter margin compared to the Lok Sabha, which passed it with a 56-vote lead. Initially tabled the previous year, the legislation was reviewed by a Joint Parliamentary Committee (JPC) led by BJP MP Jagdambika Pal. The JPC submitted its findings to both Houses on February 13, 2025.
• Under Islamic tradition, waqf refers to property permanently dedicated for religious or charitable activities, such as maintaining mosques, supporting education, or aiding the poor.
• Once classified as waqf, the property becomes inalienable—it cannot be sold, inherited, or gifted. The original Waqf Act of 1995, along with its 2013 amendments under the UPA government, provided the legal foundation for managing waqf assets and established State Waqf Boards for their administration.
• The 2025 amendment rebrands the law as the Unified Waqf Management, Empowerment, Efficiency and Development Act and introduces significant changes. It expands the government’s regulatory role and dispute resolution authority concerning waqf properties.
• The government has defended these changes as steps toward greater transparency, while critics and opposition parties contend that they infringe upon the Muslim community’s religious rights.
• One of the key modifications is the restriction on who may create a waqf: only individuals who have practiced Islam for a minimum of five years are now eligible. This departs from the previous provision, which allowed anyone, regardless of religious affiliation, to dedicate property.
• Critics, including Dr. Faizan Mustafa, Vice-Chancellor of Chanakya National Law University, have argued that this discriminates against recent converts and violates Article 14 of the Constitution, which guarantees equality before the law.
• The Bill also addresses the doctrine of “waqf by user”—a principle from Islamic law that recognizes properties used continuously for religious or charitable purposes as waqf, even without formal documentation.
• Although the government had initially proposed eliminating this doctrine entirely, the JPC advised caution, warning that such a move could destabilize the status of many long-standing waqf properties managed informally. The revised version of the Bill preserves waqf-by-user properties registered before the law’s enactment, unless contested as government-owned land.
• Other key changes include transferring the responsibility of waqf property surveys from specialized commissioners to District Collectors. The repeal of Section 40, which allowed Waqf Boards to independently assess whether a property qualifies as waqf, has also drawn attention.
• Responding to the JPC’s recommendations, the new law requires that such surveys, particularly in cases involving government land, be conducted by officers above the rank of Collector.
• One of the most debated provisions involves the inclusion of non-Muslims in waqf governance bodies. The Bill mandates that both Central and State Waqf Boards must include at least two non-Muslim members, and removes the requirement for the Chief Executive Officer of a Waqf Board to be a Muslim.
• Additionally, it specifies that the State government’s representative on the Waqf Board must be a joint secretary-level officer responsible for waqf affairs. While critics argue these provisions undermine the community’s autonomy in managing its religious institutions, Dr. Mustafa welcomed the changes as a reflection of India’s diversity, noting the inclusion of women, non-Muslims, and OBCs as a progressive step—though he also questioned whether similar reforms would be applied to temple boards.
• To strengthen financial oversight, the Bill introduces a centralized digital portal for waqf property registration. Muttawalis (custodians) are required to upload details of waqf properties within six months of the law taking effect, and all future registrations must go through this portal.
• Lastly, the Bill seeks to repeal Section 107 of the 1995 Act, which had exempted waqf properties from the Limitation Act, 1963. This exemption allowed Waqf Boards to reclaim encroached land beyond the typical 12-year limitation period. Critics warn that removing this protection could legitimize illegal occupations through adverse possession, posing risks to the integrity of waqf land

1.The Waqf (Amendment) Bill, 2025 seeks to enhance transparency and efficiency in waqf property management, but also raises concerns about religious autonomy and constitutional rights." Critically examine the key provisions of the Bill and discuss their implications on minority rights and secular governance in India. (250 words)

The impacts of rupee weakening

For Preliminary Examination:  Current events of national and international importance

For Mains Examination: GS III - Indian Economy

Context:

The sharp devaluation of the Indian rupee is driven by capital outflows, higher import costs, and a policy shift by the RBI; structural issues such as rising domestic prices and real exchange rate appreciation further complicate the recovery of net exports

Read about:

Power Purchasing Parity (PPP)

Foreign Exchange Management Act (FEMA)

Key takeaways:

The Indian rupee has recently experienced a significant devaluation against the US dollar, following a period of relative stability for over two years. What are the underlying reasons for this shift, and what implications does it hold? This discussion explores India’s exchange rate policy and highlights key structural challenges within the Indian economy in recent years.

Exchange Rate Frameworks

The nominal exchange rate represents the cost of acquiring one unit of foreign currency in terms of the domestic currency. Changes in the nominal exchange rate are influenced by the interplay between supply and demand in the foreign exchange market and the central bank’s exchange rate policy.

The real exchange rate reflects the relative cost of foreign goods in terms of domestic goods, taking into account price levels. It indicates the comparative affordability of domestic goods against foreign ones.

The demand and supply in the foreign exchange market are shaped by the flows in the current and capital accounts. A decline in the combined net flows of these accounts increases the demand for foreign currency, while an increase in net flows boosts its supply. Net current account flows are largely determined by net exports, whereas capital account flows depend on foreign investment inflows and outflows. Reduced net exports and greater capital outflows increase the demand for foreign currency and vice versa.

Central bank responses to market conditions define three primary exchange rate regimes: fixed, floating, and managed-floating.

• Fixed Exchange Rate: The central bank offsets higher foreign currency demand by selling foreign exchange reserves to maintain a fixed nominal exchange rate.
• Floating Exchange Rate: The central bank allows the currency to devalue to meet increased foreign currency demand, keeping reserves unaffected.
• Managed-Floating Exchange Rate: The central bank combines selling reserves and allowing devaluation to address higher demand.

India has predominantly followed a managed-floating exchange rate system over the last three decades. In the 2010s, the Reserve Bank of India (RBI) adopted a nuanced approach under this regime.

During periods of excess demand, it devalued the rupee and reduced foreign exchange reserves. Conversely, during excess supply, the RBI resisted nominal exchange rate appreciation by accumulating reserves to safeguard export competitiveness. This asymmetric policy resulted in a gradual rupee devaluation throughout the decade.

Post-COVID, particularly between late 2022 and November 2024, the RBI temporarily adopted a policy resembling a fixed exchange rate regime, maintaining a stable nominal exchange rate despite current account deficits and capital outflows by selling foreign reserves. However, the recent sharp rupee devaluation suggests a return to the managed-floating regime, driven by capital outflows, increased imports, and rising crude oil prices. This strategy aims to reduce pressure on foreign reserves by permitting rupee depreciation.

Consequences of Devaluation

A nominal exchange rate depreciation can have dual macroeconomic effects—favorable and adverse. The positive impact stems from the real exchange rate mechanism, while the negative effect arises from domestic price dynamics.

• Boosting Net Exports: Depreciation makes domestic goods cheaper relative to foreign goods, potentially enhancing net exports and economic output. For this to occur, two conditions must be met: net exports should respond positively to changes in the real exchange rate, and nominal depreciation must lead to real exchange rate depreciation. A rise in domestic prices at a constant nominal rate negates the benefit by making domestic goods costlier, while nominal depreciation at stable domestic prices enhances competitiveness.

• Rising Domestic Prices: Depreciation can inflate domestic prices by increasing firms' variable costs, particularly for imported raw materials. In markets with limited competition, businesses often adjust prices by marking up their variable costs, which rise with higher import costs. Consequently, this cost escalation is passed on to consumers, driving up domestic prices

Recent Challenges

• Since the mid-2010s, particularly from 2019 onward, a significant divergence has emerged between India’s nominal and real exchange rates. These rates represent the weighted average exchange rate of India with its various trading partners.
• According to their definitions, an increase (or positive change) in these indices indicates an appreciation, while a decrease (or negative change) signifies depreciation.
• While these indices moved in tandem until the mid-2010s, they began diverging thereafter, with the real exchange rate appreciating even as the nominal exchange rate depreciated. This trend sets India apart from most other countries.
• In this context, the horizontal and vertical axes represent the changes in the Nominal Effective Exchange Rate (NEER) and Real Effective Exchange Rate (REER), respectively, between January 2019 and November 2024.
• The vertical zero line denotes no change in the NEER, while the horizontal zero line indicates no change in the REER