DAILY CURRENT AFFAIRS IAS | UPSC Prelims and Mains Exam – 2nd March 2026

Category: Defence and Security

Context:

• Recently, the President of India undertook a sortie in the indigenous Light Combat Helicopter PRACHAND at Air Force Station Jaisalmer, Rajasthan.

About Light Combat Helicopter Prachand:

• • Nature: It is an indigenously developed Light Combat Helicopter (LCH).

• Development: It is developed by state-run aerospace major Hindustan Aeronautics Ltd.

• • Uniqueness: It is the only attack helicopter in the world that can land and take off at an altitude of 5,000 metres (16,400 ft).
  • Engine: It is fitted with a 5.8-tonne twin-engine named Shakti engine, primarily designed for deployment in high-altitude areas. 

• Speed: Its maximum speed is 268 kilometres per hour.

• • Range: It has a range of 550 kilometres and endurance of over three hours.
  • Stealth features: It has the best stealth features, armored-shield systems, and dark-mode attack capability. It is equipped with a countermeasure dispensing system that protects it from enemy radars or infrared seekers of enemy missiles.
  • Crash resistant landing: Its crash-resistant landing gear gives it an added edge for better survivability, among other technologies like radar and IR signature.

• Protection: A pressurised cabin offers protection from nuclear, biological, and chemical contingencies.

• • Customisation: The multi-role attack helicopter has been customised as per the requirements of the Indian armed forces to operate both in desert terrains and high-altitude sectors. 

• Weaponry: The weapon complement includes a 20mm nose gun in the front, capable of firing 800 rounds per minute from a range of up to 2 km. It is also integrated with Mistral 2 (Air-to-Air) and planned integration for Dhruvastra (Helina) Anti-Tank Guided Missiles.

Source:

• PIB

Category: Government Schemes

Context:

• Union Minister of State for Development of NE Region distributed football at PM SHRI Kendriya Vidyalaya, Dakshin Dinajpur, as part of the Football for Schools initiative.

About Football for Schools (F4S) Programme:

• Partnering agencies: It is run by Fédération Internationale de Football Association (FIFA) in collaboration with UNESCO.

• • Launch: It was launched in mid-2019 with pilot projects in Puerto Rico and Lebanon. The F4S Programme will be re-launched in other regions in 2021.
  • Objective: It seeks to make football more accessible to both boys and girls around the world by incorporating football activities into the education system, in partnership with relevant authorities and stakeholders.
  • Implementation: In India, the programme is implemented by the Department of School Education and Literacy, Ministry of Education (DoSEL), with support from the All India Football Federation (AIFF) and the Sports Authority of India (SAI).

• Global reach: It aims to contribute to the education, development and empowerment of around 700 million children globally.

• Life skills integration: It uses football to teach values such as teamwork, discipline, resilience, and fitness, aligning with the United Nations’ Sustainable Development Goals (SDGs).

• Inclusivity: It focuses on providing equitable access to both boys and girls, regardless of their background.
• Capacity building: It includes structured training for Physical Education teachers and coach-educators to ensure sustainable integration into school curricula. 
• Alignment: The F4S Programme is aligned with global sport, education and health policies, including UNESCO’s Kazan Action Plan, the Education 2030: Incheon Declaration and Framework of Action, and the World Health Organization (WHO) Global Action Plan on Physical Activity (GAPPA).

Source:

• PIB

Category: Environment and Ecology

Context:

• Recently, in Kuno National Park in Madhya Pradesh forest owl has been spotted 113 years after it was last seen.

About Forest Owlet:

• Family: It is a member of the typical owl family, Strigidae.

• Rediscovery: It was first described in 1873. As it was not sighted after 1884, it was considered extinct for many years. In 1997, it was rediscovered.

• • Habitat: It is mainly found in tropical and subtropical moist lowland woods, dense deciduous woodlands, open dry deciduous teak woods,and tropical and subtropical dry forests.
  • Distribution: It is endemic to the forests of central India. It was observed in Odisha, Chhattisgarh, Madhya Pradesh, Maharashtra, and Gujarat, and at a few locations in the Melghat Tiger Reserve in Maharashtra.
  • Appearance: It is a typical owlet with a rather unspotted crown, presence of full throat collar, thickly feathered legs, heavily banded wings, and a tail.

• Diurnal: These birds are diurnal and have been observed to hunt during the day.

• • Diet pattern: They eat rodents, reptiles such as lizards and skinks, and insects.
  • Unique behaviour: It is known for its distinctive habit of lateral tail flicking when perched.

• Conservation Status

• • • IUCN Red List: Endangered (Downlisted from Critically Endangered in 2018 due to new population discoveries).
    • Wildlife Protection Act (1972): Listed under Schedule I (highest legal protection in India).

• CITES: Appendix I.

Source:

• The Times of India

Category: Society

Context:

• The Amondawa tribe in Brazil’s Amazon lives without clocks, calendars, or numerical age, organising life by natural cycles and identity changes, as revealed by researchers.

About Amondawa Tribe:

• Location: They are an indigenous community living deep inside Brazil’s Amazon rainforest.

• First contact: They were first contacted by the outside world in 1986.

• • Size of community: They are a small community of approximately 150 individuals who sustain themselves through traditional hunting, fishing, and small-scale farming (manioc and maize).
  • Uniqueness: They live without any concept of time as understood by modern civilisation. They have no linguistic or cultural equivalent for words such as “time”, “week”, “month” or “year”.
  • Event-based living: They do not view time as a separate “container” that events happen in; instead, they organize life around natural cycles (day/night, rainy/dry seasons) and sequential events.
  • No numerical age: They do not track birthdays or use numbers to calculate age. Instead, individuals change their names at different life stages to reflect their evolving social identity.

• Limited number system: Their native counting system typically only goes up to four.

• Linguistic relativity: This serves as a prime example of the Sapir-Whorf Hypothesis, suggesting that the language one speaks influences how they perceive reality.
• Threats to culture: The tribe faces modern challenges such as deforestation, exposure to outside diseases, and potential cultural erosion as younger generations learn Portuguese and adopt modern concepts like calendars for administrative purposes.
• Comparison with other tribes: Unlike the Jarwa or Sentinelese of India, who are relatively isolated, the Amondawa are increasingly interacting with government systems for identity documents.

Source:

• The Times of India

Category: Science and Technology

Context:

• CERT-In and the Satcom Industry Association of India (SIA-India) have jointly released comprehensive guidelines for cyber security across the country’s space ecosystem.

About Indian Computer Emergency Response Team (CERT-In):

• • Nature: It is the national nodal agency for responding to computer security incidents as and when they occur.
  • Nodal ministry: It is a functional organisation of the Ministry of Information & Electronics Technology, Government of India.
  • Objective: It primarily aims to secure Indian cyberspace. The constituency of CERT-In is the Indian cyber community.
  • Establishment: CERT-In has been operational since January 2004. 

• Legal Mandate: It has been designated as the national agency under Section 70B of the Information Technology Act, 2000.

• Focus areas:

• • • Collection, analysis, and dissemination of information on cyber incidents.
    • Forecasts and alerts of cybersecurity incidents.
    • Emergency measures for handling cybersecurity incidents.
    • Coordination of cyber incident response activities.
    • Issue guidelines, advisories, vulnerability notes, and white papers relating to information security practices, procedures, prevention, response, and reporting of cyber incidents.
    • Such other functions relating to cyber security as may be prescribed.
  • Powers: To perform these functions, CERT-In is empowered to call for information and issue directions to service providers, intermediaries, data centres, body corporates, and any other person. 
  • Services: CERT-In provides services to organizations in the Government, Public, and Private sectors. In addition, CERT-In provides services to individuals and home users as well.
  • Collaboration: CERT-In collaborates with international counterparts to share information regarding emerging threats, vulnerabilities, and malware.

• Operation: CERT-In creates awareness on security issues through dissemination of information on its website (https://www.cert-in.org.in) and operates a 24×7 incidence response help desk. 

• Review committee: To ensure effective governance, a Review Committee oversees CERT-In’s operations. This committee includes but is not limited to representatives from various government ministries, such as:

• • Ministry of Law and Justice
  • Department of Telecommunications
  • Ministry of Home Affairs
  • Group Coordinator for Cyber Law and e-Security

Source:

• DD News

General Studies Paper II (International Relations – India and its Neighbourhood; Effect of policies and politics of developed and developing countries on India’s interests)

General Studies Paper III (Infrastructure – Energy; Security Challenges; Indian Economy & External Sector)

Introduction

The Strait of Hormuz, a narrow waterway between Iran and Oman, is one of the world’s most critical energy chokepoints. At its narrowest, it is just 33 kilometres wide, with shipping lanes only about 3 kilometres across in each direction. Its strategic significance is immense: approximately 20-25% of the world’s oil consumption and a substantial share of liquefied natural gas (LNG) passes through it daily.

Recent, severe escalations in the conflict involving Iran, Israel, and the United States have brought the strait back into focus. Following military strikes, Iran’s Islamic Revolutionary Guards Corps (IRGC) sent messages to vessels, leading to a de facto suspension of shipments as insurers, trading houses, and shipping companies halted operations, with hundreds of tankers anchoring in the Gulf. This situation has sharply increased “war risk” premiums, directly linking regional geopolitics to global economic stability and energy security.

Main Arguments

1. The Strait as an Indispensable Energy Artery: Any disruption or increased risk in the Strait of Hormuz directly impacts global energy prices and supply chains, with Asia—particularly China, India, Japan, and South Korea—being the most vulnerable due to their heavy reliance on Gulf imports.
2. “War Risk” Premiums as a Geopolitical Barometer: The cost and availability of war risk insurance serve as a real-time, market-driven indicator of perceived conflict levels. The current crisis has triggered a “risk avoidance” scenario, effectively closing the strait to commerce even without a formal blockade.
3. A Multi-Dimensional Impact on India: As the world’s third-largest crude consumer with over 88% import dependency, India faces a three-fold challenge: potential supply disruptions, a higher import bill from rising prices, and increased costs for its exports.

The Strategic Importance of the Strait of Hormuz

• Geographical Significance: The strait connects the Persian Gulf producing states (Saudi Arabia, Iran, UAE, Kuwait, Iraq, and Qatar) to the Gulf of Oman, the Arabian Sea, and global markets.
• Volume and Flow of Trade:
  • An estimated 15-20 million barrels per day (bpd) of crude oil and condensates pass through the strait.
  • Qatar sends nearly all of its LNG exports, with 83% heading to Asia.
  • Major OPEC producers, including Saudi Arabia, Iran, and the UAE, depend on this route for their exports.

Understanding “War Risk” Insurance

• Definition and Scope: War risk insurance covers losses from perils excluded from standard marine policies, such as war, capture, seizure, mines, terrorism, piracy, and civil commotion.
• How Premiums are Set: The cost is determined by the perceived danger of a voyage. In high-risk areas, underwriters charge an Additional Premium (AP). The cover is often subject to short-term cancellation clauses, allowing insurers to re-price risk quickly in escalating situations. The current crisis has led insurers to deem the strait a “no-go” area, forcing a halt to shipments.

The Current Crisis: Escalation and Impact

• Trigger Events: Recent US and Israeli joint military strikes on Iran and retaliatory Iranian attacks on Gulf states have created an unprecedented security vacuum.
• Insurer Response: Faced with direct threats to vessels, the response has been decisive. “A large number of trading houses, insurers and vessels have suspended shipments through the maritime passage,” creating a blockade by risk aversion rather than by force.
• Economic Ripple Effects:
  • Freight and Insurance Costs: Exporters warn that prolonged disruption will push up both freight rates and marine insurance premiums, adding significantly to trade costs.
  • Global Inflation: A sustained oil price spike towards $100 per barrel could raise global inflation by nearly 0.7 percentage points, complicating monetary policies worldwide.

Implications for India

India’s exposure to the crisis is profound, affecting its energy security, trade, and overall economy.

Conclusion

The escalating tensions in West Asia and the subsequent freeze on shipments through the Strait of Hormuz underscore the fragile link between geopolitics and the global economy. The “war risk” insurance mechanism has acted as the critical circuit-breaker, translating military conflict into immediate commercial reality.

For India, the crisis is a stark reminder of its structural vulnerabilities. While a diversified crude sourcing strategy and available Russian barrels provide a short-term buffer for oil, the extreme dependence on Hormuz for LPG and LNG exposes a critical energy security gap. As experts note, even a short-lived disruption would create significant logistical backlogs and persistently higher prices. The situation reinforces the need for India to not only engage in robust diplomacy to de-escalate tensions but also to accelerate the diversification of its energy basket, enhance strategic storage for all critical fuels (including LPG), and secure more resilient supply contracts to safeguard its economy from future geopolitical shocks.

UPSC Mains Question:

1. “Rising geopolitical tensions in West Asia and instability in strategic maritime chokepoints like the Strait of Hormuz have significant economic and strategic implications for India.” Discuss the impact of such developments on India’s energy security, trade, and foreign policy. Suggest measures India can adopt to mitigate associated risks. (15 Marks | 250 Words)

1. How do disruptions in critical maritime chokepoints such as the Strait of Hormuz affect global oil markets and maritime insurance premiums? Examine the economic implications for India and suggest policy responses. (15 Marks | 250 Words)

GS Paper II – Polity & Governance (Functions of Finance Commission, Centre–State financial relations, fiscal federalism, constitutional provisions (Articles 270, 275, 280), devolution of taxes, grants-in-aid, cooperative federalism, equity vs efficiency debate in resource distribution)

Introduction

The Sixteenth Finance Commission, constituted under Article 280 of the Constitution, plays a pivotal role in shaping India’s fiscal federal architecture. It determines vertical devolution (Centre–State share of taxes) and horizontal devolution (distribution among States). While the Commission retained the 41% share of States in the divisible pool, its approach toward cesses and surcharges, grant architecture, and formula design has generated debate. The Commission reflects a transition from a predominantly equalisation-based framework toward a performance-sensitive model, raising critical questions about equity, efficiency, and cooperative federalism.

Vertical Devolution: Continuity with Structural Concerns

Retention of 41% Share

The Fourteenth Finance Commission had increased States’ share from 32% to 42%, citing the abolition of Plan grants and the need to strengthen fiscal autonomy. The Fifteenth Finance Commission reduced it to 41% after the reorganisation of Jammu and Kashmir.

The Sixteenth Finance Commission retained the 41% share, giving stability to the devolution framework. However, the headline percentage masks deeper fiscal shifts.

Expanding Role of Cesses and Surcharges

A core concern is the growing reliance of the Union government on cesses and surcharges, which are excluded from the divisible pool under Article 270.

Observations

• Rising cesses reduce the effective tax base shared with States.
• Many cesses have continued beyond their original time-bound purpose.
• They are often merged into general revenues instead of being strictly earmarked.

The Commission proposed a “grand bargain”:

• The Centre merges a substantial portion of cesses into shareable taxes.
• States accept a relatively smaller share in an enlarged pool.
• No net revenue loss to either side.

Critical Assessment

The Commission stopped short of explicitly cautioning against the structural expansion of cesses. From a constitutional perspective, excessive reliance on non-shareable taxes weakens fiscal federalism and reduces transparency.

Value Addition: Ideally, cesses should be temporary, purpose-specific, and sunset-bound. Institutionalising a cap or mandatory review mechanism could strengthen cooperative federalism.

Decline in Effective Transfers

Though 41% devolution continues, effective transfers (devolution + grants as % of Centre’s gross revenue receipts) show a declining trend:

• ~27–28% (11th–13th FCs)
• 35.6% (14th FC)
• 34.4% (15th FC)
• 32.7% projected in 2026–27 (16th FC)

Contributing factors:

• Higher share of cesses
• Discontinuation of revenue deficit grants
• No State/sector-specific grants

Additionally, optimistic GDP growth assumptions and underestimation of GST reform impacts may affect projections.

Thus, vertical balance appears stable numerically but tighter in operational terms.

Horizontal Devolution: Equity vs Performance Debate

1. Introduction of Contribution Criterion

The Commission introduced a new “contribution” criterion based on a State’s share in total Gross State Domestic Product (GSDP).

Conceptual Concerns

• GSDP reflects production concentration influenced by capital mobility and migration.
• It does not directly measure fiscal effort or administrative efficiency.
• Wealthier States structurally benefit from agglomeration effects.

This blurs the distinction between economic capacity and fiscal discipline.

Dual and Opposite Use of GSDP

GSDP was used in two contrasting ways:

• Income Distance Criterion: Lower per capita GSDP → Higher share (equalisation objective)
• Contribution Criterion: Higher GSDP → Higher share (performance objective)

To moderate extremes, the Commission used the square root of GSDP rather than its absolute value.

Implication

While technically moderating disparities, this shift tilts the formula toward rewarding economically stronger States. It represents a calibrated move from pure equalisation to mixed equity-performance logic.

Dropping Fiscal Discipline Criterion

Earlier Commissions included explicit criteria for tax effort and fiscal discipline. The Sixteenth Commission discontinued this.

Implications

• Weakens incentives for responsible fiscal management.
• Increases moral hazard risks.
• Reduces direct linkage between governance quality and transfers.

Value Addition: A balanced approach could have retained a calibrated fiscal discipline weight alongside the new contribution metric.

Discontinuation of Revenue Gap and State-Specific Grants

The Commission discontinued:

• Revenue deficit grants
• State-specific/sector-specific grants

Why Devolution Alone Is Insufficient

Formula-based devolution cannot capture:

• Cost disabilities (hilly terrain, sparse population)
• Infrastructure deficits
• Social sector backlogs
• Administrative constraints

Article 275 empowers grants-in-aid for addressing specific “needs,” distinct from revenue deficits.

Normative Perspective: Equalisation grants help ensure comparable standards of essential services (health, education) across States. Their absence may widen regional disparities.

1. Broader Federal Implications

1. Gradual shift from equalisation-centric to performance-sensitive model.
2. Rising vertical imbalance through expansion of non-shareable revenues.
3. Reduced fiscal flexibility for poorer States.
4. Strengthening of Union’s fiscal consolidation objective.

The Commission attempts to balance efficiency and equity but arguably prioritises fiscal stability over redistributive justice.

Conclusion

The Sixteenth Finance Commission preserves continuity in headline devolution but introduces subtle structural changes in India’s fiscal federalism. By retaining 41% tax devolution while accommodating rising cesses and altering horizontal weights, it shifts the balance toward a performance-linked model. However, equalisation remains the constitutional core of Finance Commission transfers. Stronger safeguards against excessive non-shareable taxation and calibrated equalisation grants under Article 275 could have better harmonised efficiency with equity. The long-term impact of these reforms will shape Centre–State fiscal relations and the trajectory of cooperative federalism in India.

UPSC Mains Question

Q. “Fiscal federalism in India is witnessing a subtle recalibration under the Sixteenth Finance Commission.” Critically examine this statement in the context of vertical and horizontal devolution and its impact on cooperative federalism. (250 words, 15 marks)