DAILY CURRENT AFFAIRS IAS | UPSC Prelims and Mains Exam – 2 June – 2025

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  • June 2, 2025
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(PRELIMS Focus)

Government of India has successfully met its fiscal deficit target of 4.8% of GDP

Category: ECONOMICS

Context: The Government of India has successfully met its fiscal deficit target of 4.8% of GDP for the financial year 2024–25 (FY25)

The Government of India has successfully met its fiscal deficit target of 4.8% of GDP for the financial year 2024–25 (FY25), according to provisional data released by the Controller General of Accounts. The fiscal deficit stood at ₹15.77 lakh crore, representing 100.5% of the revised target announced in the Union Budget.

Key Highlights:

  • The fiscal deficit was reduced from 5.6% in the previous year to 4.8% of GDP, underscoring the government’s commitment to fiscal consolidation.
  • This achievement was driven by disciplined revenue expenditure, higher-than-anticipated non-tax revenues (including a significant dividend from the central bank), and robust capital expenditure that surpassed its revised goal.
  • Total government receipts reached ₹30.78 lakh crore, or 97.8% of the revised estimate, while total expenditure amounted to ₹46.56 lakh crore, or 98.7% of the revised estimate.
  • For FY26, the government has set a lower fiscal deficit target of 4.4%, aiming to bring the gap below 4.5% in line with its medium-term fiscal roadmap.

This outcome highlights the government’s ability to maintain fiscal discipline while continuing to invest in infrastructure and public services despite challenging economic conditions.

Learning Corner:

Fiscal Deficit

Fiscal Deficit is the gap between the government’s total expenditure and its total revenue (excluding borrowings). It indicates how much the government needs to borrow to meet its expenses.
Formula:
Fiscal Deficit = Total Expenditure – (Revenue Receipts + Non-debt Capital Receipts)

It reflects the total borrowings required by the government.

 

  1. Revenue Deficit

Revenue Deficit occurs when the government’s revenue expenditure exceeds its revenue receipts. It shows that the government is borrowing not only for capital investment but also to meet its regular operational expenses.

Formula:
Revenue Deficit = Revenue Expenditure – Revenue Receipts

A revenue deficit means the government is not generating enough revenue to cover its routine expenses.

 

  1. Primary Deficit

Primary Deficit is the fiscal deficit excluding interest payments on previous borrowings. It indicates the current year’s borrowing requirement, ignoring the cost of past borrowings.

Formula:
Primary Deficit = Fiscal Deficit – Interest Payments

It helps assess the sustainability of government borrowing.

 

  1. Effective Revenue Deficit

Effective Revenue Deficit is the part of the revenue deficit that excludes grants given for capital assets. It measures the actual shortfall in revenue receipts compared to revenue expenditure on routine functions.

Formula:
Effective Revenue Deficit = Revenue Deficit – Grants for creation of capital assets

This gives a clearer picture of the government’s operational deficit.

Source : the hindu

Virtual Digital Assets

Category: ECONOMICS

Context The government is preparing to release a comprehensive discussion paper in June 2025 

Decoding the context: This marks a significant shift after years of regulatory ambiguity and piecemeal measures and reducing the regulatory cholesterol

Learning Corner:

Regulating India’s Virtual Digital Assets Revolution

India is currently at a pivotal moment in the regulation of virtual digital assets (VDAs), including cryptocurrencies and NFTs. The government is preparing to release a comprehensive discussion paper in June 2025, which is expected to outline a range of regulatory options and seek public input to shape the country’s future approach to crypto assets. This marks a significant shift after years of regulatory ambiguity and piecemeal measures.

Current Regulatory Landscape

  • Legal Status: Cryptocurrencies are not illegal in India, but they are not recognized as legal tender. Trading and holding crypto assets are permitted, but they lack comprehensive legal backing 
  • Taxation: Since 2022, India has imposed a 30% tax on gains from VDAs and a 1% TDS (Tax Deducted at Source) on transactions. However, taxation does not equate to legal recognition 
  • Compliance: All crypto exchanges operating in India must register with the Financial Intelligence Unit (FIU), aiming to increase transparency and prevent illicit activities 
  • Classification: The Income Tax Bill, 2025, explicitly categorizes VDAs as property and capital assets, aligning India’s tax structure with international standards and allowing authorities to seize VDAs during investigations or tax raids.

Regulatory Authorities

  • Reserve Bank of India (RBI): Remains skeptical of decentralized digital assets and is developing a Central Bank Digital Currency (CBDC) as a safer alternative.
  • Ministry of Finance: Focuses on tax policy and curbing illicit activities through measures like the Prevention of Money Laundering Act (PMLA) 
  • Securities and Exchange Board of India (SEBI): May play a larger role if crypto assets are classified as securities.

Upcoming Developments

  • Discussion Paper: The government’s forthcoming discussion paper will draw from global best practices, including recommendations from the IMF and Financial Stability Board (FSB). It will invite stakeholder feedback and is expected to address key risks, compliance, and potential frameworks for regulation.
  • Public Consultation: The paper will be open for public comment, allowing industry players, investors, and other stakeholders to influence the final regulatory framework.
  • Global Alignment: India’s evolving approach seeks to balance innovation with economic and financial stability, aiming to align with international standards while addressing local challenges.

Industry and Judicial Pressure

  • The Supreme Court of India has called current crypto laws “obsolete” and urged the government to provide clearer regulations.
  • Industry leaders are hopeful that the new discussion paper will lead to actionable guidelines, tax relief, and broader adoption, though caution remains until concrete regulations are enacted.

Conclusion

India’s regulatory approach to virtual digital assets is moving from ambiguity to a more structured and consultative process. While crypto trading and investment are allowed and taxed, comprehensive legal recognition and regulation are still pending. The upcoming discussion paper in June 2025 is expected to be a major step toward clarity, but the final outcome will depend on stakeholder input and the government’s willingness to translate policy proposals into law.

Source :  the hindu

Kheer Bhawani Mela

Category: CULTURE

Context : Kheer Bhawani Mela amid security concerns in Jammu and Kashmir

Learning Corner:

Kheer Bhawani Mela – Key Facts

  • Deity: Goddess Ragnya Devi, a form of Durga, worshipped mainly by Kashmiri Pandits.
  • Location: Tulmulla, Ganderbal district, Jammu & Kashmir.
  • Temple Feature: Built over a natural spring; water is believed to change color as an omen.
  • Sacred Offering: Devotees offer kheer (sweet rice pudding), symbolizing purity and devotion.
  • Festival Timing: Celebrated on Jyeshtha Ashtami (May–June), with fasting and prayers.

 

Historical Highlights

  • Mentioned in Kalhana’s Rajatarangini (12th century).
  • Believed to be brought to Kashmir by Hanuman from Sri Lanka.
  • Patronized by Dogra kings like Maharaja Pratap Singh.
  • Worship includes barefoot circumambulation of the spring.

 

Modern Context & Revival

  • The temple remained intact during the 1990s insurgency; seen as a symbol of divine protection.
  • Mela resumed post-2000s with participation of returning Kashmiri Pandits and local Muslim support.
  • Now a symbol of faith, resilience, and interfaith harmony.

Source: the hindu

India the world’s fourth largest economy

Category: ECONOMICS

Context : As of mid-2025, India is recognized as the world’s fourth-largest economy by nominal GDP, having overtaken Japan.

Decoding the context: Official announcements, such as from the NITI Aayog and various economic analyses, confirm that India now ranks behind only the United States, China, and Germany in terms of economic size.

Learning Corner:

Is India the world’s fourth largest economy?

Yes, as of mid-2025, India is recognized as the world’s fourth-largest economy by nominal GDP, having overtaken Japan. This milestone is supported by multiple sources, including the International Monetary Fund’s (IMF) World Economic Outlook for 2025, which projects India’s GDP at approximately $4.19 trillion, marginally ahead of Japan’s.However, it is important to note that this ranking refers to total GDP, not GDP per capita, where India still ranks much lower globally.

In summary:

  • India is now the world’s fourth-largest economy by nominal GDP, just ahead of Japan.
  • This position is based on the latest IMF projections and government statements as of 2025.
  • India’s per capita income remains comparatively low, despite its high overall GDP.

Source : the hindu

Indian Summers: Rising Heat and the Challenge of Adaptation

Category: ENVIRONMENT

Context : Indian summers are undoubtedly getting hotter, with both scientific data and lived experiences confirming a long-term warming trend. Since the early 20th century

Learning Corner:

Indian summers are undoubtedly getting hotter, with both scientific data and lived experiences confirming a long-term warming trend. Since the early 20th century, India’s average land temperature has risen by nearly 0.8°C, and extreme heat events—such as the 50.5°C recorded in Churu, Rajasthan in 2024—are becoming more common. The India Meteorological Department (IMD) continues to forecast above-normal maximum and minimum temperatures, with longer and more frequent heatwaves expected across large parts of the country.

Are We Losing the Ability to Adapt?

Short-Term Adaptation:

  • Emergency measures like water stations, adjusted school/work hours, cooling centers, and hospital readiness for heatstroke are increasingly common in cities.
  • Public advisories and early warning systems have improved, raising awareness and helping vulnerable populations respond to immediate threats.

Long-Term Adaptation:

  • Despite these efforts, India’s long-term adaptive capacity is under strain. Many adaptation plans—such as Heat Action Plans (HAPs) in cities—are poorly implemented, lack legal or financial backing, and are inconsistently enforced.
  • Urban planning and infrastructure have not kept pace with the rising risks. Most homes, especially in low-income areas, are built with materials that trap heat, making indoor environments dangerously hot even at night.
  • There is limited inter-departmental coordination and a lack of robust, community-driven adaptation strategies.

Social and Economic Vulnerabilities:

  • The impact of heat is not uniform. Those working outdoors, living in slums, or lacking access to air conditioning face greater risks.
  • Slum dwellers can experience indoor temperatures up to 6°C higher than other city neighbourhoods, with severe health consequences.
  • The burden falls disproportionately on the poor, women, and outdoor workers, highlighting the need for targeted adaptation policies.

Evidence of Strained Adaptation

  • In 2024, heatstroke caused over 700 deaths in 17 states, despite increased awareness and emergency responses5.
  • Studies warn that without stronger, better-coordinated, and well-funded adaptation measures, India’s adaptive capacity could be overwhelmed by the frequency and intensity of future heatwaves.
  • While some grassroots and women-led initiatives are making a difference at the community level, these efforts are not yet widespread or systematic enough to offset the scale of the challenge.

Conclusion

India has not entirely lost the ability to adapt to hotter summers, but current adaptation efforts are falling short of what is needed to protect the most vulnerable. Emergency responses are improving, but long-term, systemic adaptation—especially in urban planning, housing, and public health—remains weak and inconsistently implemented. Without urgent investment in robust, community-driven, and well-coordinated adaptation strategies, rising temperatures threaten to outpace India’s capacity to cope, putting millions at risk.

.Source : the hindu

(MAINS Focus)

Urban Flooding and Drainage Challenges
Date: 2-06-2025 Mainspedia
TOPIC:  Urban Flooding and Drainage Challenges  GS Paper I – Indian Society |urbanization

GS Paper II – Governance
Introduction (Context)

As monsoons intensify across India, cities like Mumbai, Delhi, Kolkata, and Hyderabad are increasingly experiencing frequent urban flooding. One of the primary reasons behind this crisis is India’s outdated and inefficient urban drainage infrastructure.
Urban Drainage System: How are they designed?
  • Drains are designed based on the city’s population, size, and slope. If rainfall stays within the expected limit, flooding should not occur. But when rains are heavier than planned or when land use changes over time, the drainage systems often fail, leading to floods.
  • Artificial drains were built to carry stormwater from Rooftops, streets, and roads to natural drains or nearby water bodies. The objective was to prevent local flooding by directing excess water away efficiently.
  • Drainage systems are usually designed to handle a certain amount of rainfall, known as the “design rainfall.” In India, most urban drains are designed for rainfall that occurs once every two years. This means that flooding is expected every alternate year if heavy rain occurs. The more the actual rainfall goes beyond this estimate, the more serious the flooding will be.
Current Issue
  • Poor Drainage Design: Many city drains are designed for a 1-in-2-year return period rainfall, meaning minor floods are expected every other year. However, rainstorms of much greater magnitude are now common.
  • Concretisation of Land: Unplanned urbanisation has led to extensive paving and loss of open land, lakes, and wetlands. This has drastically reduced natural water absorption, increasing surface runoff beyond drain capacities.
  • Clogging and Desilting Failure: Drains often remain clogged due to poor desilting practices. Many large drains are covered permanently, making maintenance impossible.
  • Sewerage Intrusion: In cities like Delhi, stormwater drains also carry sewage due to gaps in sewer networks or failure of sewer systems, further reducing drainage capacity.
  • Climate Change Effects: The increase in rainfall intensity and erratic weather patterns has rendered many older drainage systems obsolete.
  • Catchment Area Expansion: As cities grow, catchment areas expand, bringing more water into the same drainage channels, overwhelming them.
Challenges 
  • Poor Inter-Departmental Coordination: Multiple agencies (municipal bodies, urban development departments, water boards) often work in silos, leading to overlapping roles, delays, and poor execution of sewage projects.
  • Lack of Investment in Scientific Drainage Modelling: Urban drainage planning is rarely based on real-time data, rainfall patterns, or topography. Without scientific modelling, systems are poorly designed and easily overwhelmed during heavy rains.
  • Delay in Implementing Modern Drainage Masterplans: Even when comprehensive drainage plans are prepared, they face delays due to funding gaps, bureaucratic hurdles, or low political priority, leaving cities vulnerable to flooding and sewage overflows.
  • Absence of Robust Legal and Accountability Frameworks: There is often no clear legal mandate or performance accountability for sewage management, leading to poor service delivery, mismanagement, and limited citizen grievance redressal.
Value Addition

Government schemes

1. AMRUT 2.0 

  • Aims at ensuring universal coverage of water supply and sewerage systems in 500 cities.
  • Emphasises proper sewerage networks and septage (faecal sludge) management to reduce water pollution and improve sanitation.
  • Promotes data-driven project planning, capacity building of ULBs (Urban Local Bodies), and convergence with other schemes.

2. Swachh Bharat Mission (Urban)

  • Aims at making cities “Garbage-Free” and improve sanitation standards.
  • Stresses safe and scientific disposal of wastewater and faecal sludge through treatment plants and decentralised facilities.
Way forward
  • Strengthen urban drainage infrastructure with scientifically backed modelling and real-time data systems.
  • Mainstream climate resilience in all municipal drainage and urban planning frameworks.
  • Incorporate higher rainfall thresholds, GIS mapping, and hydraulic modelling in all future planning.
  • Rejuvenate waterbodies, develop green corridors, rooftop gardens, and rainwater harvesting.
  • Create underground tanks to store/detain water temporarily. Build large-scale stormwater tunnels where feasible.
  • Engage citizens in waste management to prevent drain blockage.
  • Cities must build separate and functional sewerage lines to avoid mixing with stormwater.
Conclusion

Urban flooding in Indian cities is not just a climate or monsoon issue it is a governance and infrastructure crisis. By modernising drainage design, reclaiming natural absorptive landscapes, and integrating real-time monitoring, cities can mitigate flood risks. A systemic approach involving citizens, engineers, urban planners, and governments is essential to build future-ready, flood-resilient urban spaces.

Mains Practice Question

Q “Frequent urban flooding in Indian cities reveals a chronic mismatch between urban planning and drainage infrastructure.” Critically examine the reasons and suggest a sustainable urban flood management framework. (250 words, 15 marks)

Green cooling for IT sector
Date: 2-06-2025 Mainspedia
TOPIC:  Green cooling for IT sector GS Paper III – Science and Technology 

GS Paper III –  Environment
Introduction (Context)

The Information and Communications Technology (ICT) industry is under growing pressure to cut its carbon footprint as data centres consume massive amounts of energy, largely due to cooling requirements. This has huge implications on environment.
Why data centres require cooling?
  • Cooling is essential in data centres because servers and networking equipment generate a significant amount of heat during operation. If this heat is not efficiently removed, it can cause system overheating, hardware failure, and service disruptions.

Data:

  • Nearly 40% of energy in data centres goes toward cooling.
  • Traditional air-cooling systems heavily rely on water; a critical concern in water-scarce regions.
  • Cooling accounts for up to 60% of operating costs in Indian facilities, especially in high-temperature zones like Hyderabad or Noida. NITI Aayog has recommended liquid-cooling adoption in its digital infrastructure strategy.
Environment Impact The ICT sector must cut emissions by 42% by 2030 to align with the 1.5°C Paris target.

Impact on environment are:

  • High Energy Use: Cooling systems, such as air conditioners and liquid cooling technologies, often consume as much energy as the IT equipment itself.
  • Carbon Emissions: Energy demand, especially when sourced from fossil fuels, leads to significant greenhouse gas (GHG) emissions.
  • Water Usage: Some cooling methods rely heavily on water, increasing water stress in local areas.
  • Urban Heat Island Effect: Heat discharged from data centres can elevate local temperatures, contributing to urban heat islands.
  • E-Waste and Refrigerants: Inefficient or outdated cooling systems may release harmful refrigerants and contribute to electronic waste.
Study by Microsoft and WSP Global
  • A recent study in Nature led by Microsoft and WSP Global shows that advanced cooling methods like cold plates and immersion cooling can significantly reduce emissions, energy use, and water consumption.
  • Cold plate and immersion cooling can reduce data centre greenhouse gas (GHG) emissions by 15–21%.
  • They cut energy use by 15–20% and water use by 31–52%.
About Cold Plate cooling
  • Cold plate cooling is a direct-to-chip liquid cooling technology.
  • It involves placing metal plates with internal microchannels directly on heat-generating components like CPUs or GPUs.
  • Coolants such as a glycol-water mixture circulate through these microchannels, absorbing heat and carrying it away to an external heat exchanger or radiator.
  • Achieves liquid-to-air heat transfer efficiency between 50%–80%, reducing the need for traditional air-conditioning and fans.

Advantages:

  • Low energy consumption.
  • More compact than traditional cooling.
  • Easier to retrofit into existing systems than immersion cooling.
About Immersion cooling
  • Immersion cooling involves submerging entire servers or electronic components in thermally conductive, non-electrically conductive liquids (special oils or fluorocarbons).
  • Single-phase immersion: Liquid absorbs heat and circulates to an external cooler without changing state.
  • Two-phase immersion: Liquid boils into vapor at a low temperature, carries heat away, condenses, and re-circulates.

Advantages:

  • Superior heat removal (up to 100% contact with heat source).
  • Reduces noise (no fans), improves reliability, and eliminates dust damage.
Way forward
  • Policy Push: Government must frame guidelines for green data centres and standardize liquid-cooling safety regulations.
  • Incentivize Adoption: Tax rebates, green bonds, or mandatory LCA-based ratings could encourage faster transition.
  • Public-Private Partnerships: Collaborations with research institutions and global ICT players can accelerate R&D.
  • Integration with Renewables: Cooling must go hand-in-hand with sourcing electricity from wind, solar, or green hydrogen.
Conclusion

Advanced cooling methods like cold plates and immersion cooling offer a real opportunity for the ICT industry to cut emissions, save water, and manage the thermal load of modern computing. However, they must be integrated into a broader policy push for better adaptation.

Mains Practice Question

Q Data centres are vital for digital infrastructure but are increasingly becoming climate liabilities. Discuss the role of advanced cooling technologies in making them sustainable.  (250 words, 15 marks)

Daily Practice MCQs

Daily Practice MCQs

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Answers- Daily Practice MCQs

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