UPSC Daily Current Affairs: 14th August 2025 | Current Affairs & Hindu Analysis: Daily, Weekly & Monthly PDF Download

GS2/Polity

Expansion of SC/ST Scholarships

Why in the News?

The Centre is contemplating an increase in the parental income limits for SC/ST scholarships starting from FY 2026-27 in order to broaden access to these vital financial schemes, amidst a decline in the number of beneficiaries.

Key Takeaways

• The government is considering significant revisions to eligibility criteria for SC/ST scholarships.
• Proposed changes include raising the parental income limit to enhance accessibility.
• There has been a notable decline in the number of beneficiaries under these scholarship programs.

Additional Details

• About SC/ST Scholarships: These scholarships are centrally sponsored schemes that receive joint funding from the Union and State governments in a 60:40 ratio (90:10 for Northeastern states). They aim to provide financial assistance to students from marginalized communities.
• Types of Scholarships:
  • Pre-Matric Scholarships: Available for students in Classes IX and X, with specific provisions for SCs from Classes I to X if their parents are engaged in "unclean or hazardous" occupations.
  • Post-Matric Scholarships: Designed to support education beyond Class X.
• Current Eligibility: The annual parental income limit stands at Rs. 2.5 lakh.
• Proposed Revisions:
  • For STs, the Ministry of Tribal Affairs is considering raising the income limit to Rs. 4.5 lakh for both pre-matric and post-matric scholarships.
  • Similar discussions are ongoing for SCs, OBCs, and DNTs, with suggestions to double the income ceiling for OBC scholarships.
• Budgetary Allocation:
  • For FY 2025-26, scholarships for SCs, OBCs, EBCs, and DNTs constitute 66.7% of the Social Justice Ministry's Rs. 13,611 crore budget.
  • For STs, scholarships account for 18.6% of the Tribal Affairs Ministry's Rs. 14,925.81 crore allocation.
• Declining Beneficiary Trends:
  • SC pre-matric beneficiaries decreased by 30.63% from 2020-21 to 2024-25, while post-matric beneficiaries fell by 4.22%.
  • OBCs, EBCs, and DNTs saw a drop from 58.62 lakh pre-matric beneficiaries in 2021-22 to 20.25 lakh in 2023-24.
• Recommendations from Parliamentary Committees:
  • The OBC Welfare Committee suggested doubling the income limit for OBC scholarships and expanding pre-matric coverage to start from Class V.
  • The panel on Tribal Affairs emphasized the need to revise income limits for ST scholarships to include more families in need.
• Socio-Economic Impact:Raising the parental income ceiling could:
  • Expand coverage to include more lower-middle-income families.
  • Reduce dropout rates by enabling continued education.
  • Bridge educational inequality and provide access to competitive careers.

If approved, the new income limits will be implemented in FY 2026-27, marking the beginning of a new five-year financial planning cycle. The government faces the challenge of ensuring that these scholarships are both inclusive and fiscally sustainable while preventing resource leakages.

GS2/Polity

Returning Sterilised Dogs: The Cornerstone of ABC Programme Success

Why in News?

The Supreme Court recently criticized the practice of returning sterilised stray dogs to their original locations under the Animal Birth Control (ABC) programme, calling it “unreasonable and absurd.” This perspective resonated with individuals affected by aggressive packs of stray dogs. However, many experts highlight that the return of sterilised dogs is essential to the effectiveness of the ABC programme. This approach aims to stabilize stray populations by ensuring that sterilised dogs occupy their territories, which prevents unsterilised dogs from moving in and breeding, thereby gradually reducing overall numbers.

Key Takeaways

• Returning sterilised dogs is vital for controlling stray dog populations.
• The Supreme Court's directive to shelter thousands of stray dogs poses significant challenges in Delhi.
• Irresponsible pet ownership exacerbates the stray dog crisis.

Additional Details

• Importance of Returning Sterilised Dogs: This practice prevents unsterilised dogs from entering and breeding in territories occupied by sterilised dogs, ensuring population control.
• Crisis of Capacity: The Supreme Court's order to shelter 5,000-6,000 stray dogs uncovered Delhi's lack of infrastructure and resources, as there are insufficient shelters to accommodate the required number of dogs.
• Irresponsible Pet Ownership: The absence of mandatory dog registration and sterilization leads to a rise in unwanted stray dogs, as many pet owners abandon or neglect their pets.
• Feeding Strays: Feeding stray dogs can inadvertently increase their territorial behavior and aggression, resulting in conflicts with humans.

In conclusion, returning sterilised dogs to their original locations is crucial for the long-term success of the ABC programme. Not only does it help maintain territorial stability, but it also supports the social structure of local dog populations. Addressing the challenges posed by inadequate shelter capacity and irresponsible pet ownership is essential for sustainable stray dog population management.

GS3/Defence & Security

India’s Drone Diplomacy: Seizing the Indo-Pacific Advantage

Why in News?

The 2020 second Nagorno-Karabakh conflict marked a pivotal moment in modern warfare, positioning drones as key components in combat operations. This trend was evident during Operation Sindoor (May 7–10), where unmanned aerial vehicles (UAVs) and unmanned combat aerial vehicles (UCAVs) transitioned from reconnaissance roles to executing precise strikes. This article discusses the evolution of drone warfare, India's modernization efforts regarding its UAV fleet, and the strategic opportunities in the Indo-Pacific drone market amidst diminishing U.S. dominance.

Key Takeaways

• India is modernizing its UAV capabilities following the lessons learned from recent conflicts.
• The Indo-Pacific region presents significant opportunities for India to expand its drone market presence.
• India's evolving procurement strategy reflects a shift towards incorporating American components while enhancing domestic production capabilities.
• India aims to develop and export UAVs tailored to regional partners’ needs, bolstering its defense diplomacy.

Additional Details

• UAV Modernization: In 2024, India acquired 31 MQ-9B Reapers from the U.S., including the SkyGuardian and SeaGuardian variants, to enhance maritime surveillance and strategic partnerships. However, these acquisitions only partially address India's diverse defense requirements across contested borders with Pakistan and China.
• Drone Procurement Strategy: India is shifting its approach to drone procurement by prioritizing American components over complete systems, as it seeks to fill capability gaps through imports, joint ventures, and domestic production, particularly with Israeli and select European suppliers.
• China's Influence: Several Indo-Pacific nations face ongoing tensions with China, necessitating enhanced Maritime Domain Awareness (MDA) to counter China's coercive tactics. India can leverage its UAV development to meet these nations' operational needs.
• Strategic Opportunity: With the decline of U.S. dominance in the drone market, India has the potential to fill this gap, enhancing its geopolitical influence while addressing its own defense needs through technology-sharing frameworks and joint capabilities.

In conclusion, India's focus on developing and exporting customized UAVs can not only secure its strategic interests but also help counter China's influence in the Indo-Pacific, positioning India as a significant defense partner in the region.

GS2/Polity

IBC Amendment Bill 2025 - Strengthening Insolvency Resolution in India

Why in News?

The Insolvency and Bankruptcy Code (Amendment) Bill, 2025 was introduced in the Lok Sabha by Finance Minister Nirmala Sitharaman. This bill aims to tackle ongoing delays in the insolvency process, enhance stakeholder value, and align India's insolvency framework with global best practices.

Key Takeaways

• The Bill seeks to reform admission procedures and introduce out-of-court resolution methods.
• It aims to implement group and cross-border insolvency mechanisms.

Additional Details

• Background: The Insolvency and Bankruptcy Code (IBC), introduced in 2016, aimed to establish a time-bound mechanism for the rescue and restructuring of distressed companies.
• Achievements: The IBC has fostered a culture of accountability and discipline among debtors, though it faces challenges such as procedural delays and a high backlog of cases.
• Faster Admission of Insolvency Cases: The Bill mandates the admission of cases if a default is proven and procedural compliance is met, with a strict 14-day timeline for the National Company Law Tribunal (NCLT) to decide on admission.
• Out-of-Court Resolution: The Creditor-Initiated Insolvency Resolution Process (CIIRP) targets genuine business failures, requiring 51% creditor consent for initiation and allowing corporate debtors to retain management.
• Group Insolvency Framework: This provision aims to coordinate the resolution process for companies within the same corporate group to minimize value loss.
• Cross-Border Insolvency Framework: This facilitates the recognition of Indian insolvency proceedings abroad and aligns with the UNCITRAL Model Law.
• Liquidation Process Enhancements: The Committee of Creditors (CoC) is empowered to supervise liquidation processes, and a moratorium under corporate insolvency resolution processes extends to the liquidation stage.
• Notable Provisions: The Bill expands the definition of resolution plans, limits the withdrawal of CIRP applications after specific stages, and introduces measures to prevent fraudulent transactions.

If implemented effectively, the IBC Amendment Bill 2025 has the potential to transform India's insolvency framework into a more efficient, transparent, and globally competitive system, thereby improving investor confidence and facilitating corporate restructuring.

GS2/International Relations

Africa is Challenging China’s Mining Hegemony

Why in News?

For the past two decades, China has dominated Africa's mining sector, acquiring significant stakes in minerals such as cobalt, lithium, copper, and iron ore. However, African governments and civil society are now contesting issues surrounding opaque contracts, environmental degradation, and a lack of value addition, signaling a shift from the traditional "raw resources for infrastructure" model to a demand for local processing, transparency, and economic sovereignty.

Key Takeaways

• China's dominance in African mining is facing challenges for the first time in decades.
• Nations like the DRC, Namibia, and Zimbabwe are renegotiating deals and enforcing environmental standards.

Additional Details

• Significance: In 2024, the DRC lost $132 million due to tax exemptions for Chinese companies, highlighting the financial impact of these shifts.
• Control over Critical Minerals: The DRC produces 80% of the world’s cobalt, with China controlling around 80% of that output through agreements like Sicomines.
• Infrastructure-for-Resources Model: Chinese firms have historically exchanged infrastructure development for mining rights, often yielding minimal local benefits.

As African nations assert their rights, the landscape of global supply chains for cobalt and lithium essential to the green economy could be significantly reshaped.

Drivers of the Pushback Against Chinese Projects

• Civil Society Pressure: Activist groups such as Congo Is Not for Sale have highlighted significant revenue losses.
• Market-Linked Risks: Contracts tied to commodity prices may leave nations vulnerable during downturns.
• Government Renegotiations: The DRC has increased its stake in joint ventures, such as with Sinohydro and China Railway Group.

African Nations Taking Assertive Measures

• DRC: Cancelled the sale of Chemaf Resources to China’s Norin Mining after pushback from the state miner Gecamines.
• Namibia: Allegations of a $50 million bribe by Xinfeng Investments and failure to deliver promised processing facilities.
• Huayou Cobalt Lithium Plant: A $300 million investment that may benefit China without adequate local safeguards.

Environmental and Social Concerns from Chinese Mining

• Pollution Incidents: An acid spill in Zambia contaminated the Kafue River.
• Biodiversity Protection: The coal permit in Hwange National Park was blocked for ecological reasons.
• Community and Heritage Impacts: The Lobé-Kribi Iron Ore Project in Cameroon faced opposition from NGOs due to health and cultural threats.

Policy Shifts for Economic Sovereignty

• Export Bans: Zimbabwe (2022) and Namibia (2023) have banned unprocessed lithium exports to encourage local beneficiation.
• Retention of Value: Policies aim to bolster domestic processing, although risks of elite capture persist without broader reforms.

While China remains Africa’s largest mining partner, the continent is increasingly asserting control through renegotiations, environmental enforcement, and local value addition. If these trends continue, Africa may transition from being a mere supplier of raw materials to a significant player in global supply chains for the green economy.

China’s Role in Mining in Africa (2000–2024)

• Scale of Presence: China is the largest external mining partner, operating in over 15 African countries.
• Dominance in Cobalt & Lithium: China controls about 80% of DRC’s cobalt output and holds substantial stakes in lithium mines in Zimbabwe and Namibia.
• Investment Model: Infrastructure-for-resources deals, such as the Sicomines agreement in DRC, involve trading mining rights for infrastructure development.

Strategic Objectives

• Securing Supply for EV & Battery Industries: Critical minerals are directed towards Chinese manufacturing hubs.
• Vertical Integration: Ownership spans from extraction to processing facilities, primarily located in China.

Criticism & Concerns

• Limited Local Benefits: There is minimal skills transfer and inadequate job creation for local populations.
• Environmental Damage: Incidents, such as the acid spill in Zambia, raise significant ecological concerns.
• Opaque Contracts: Alleged bribery and a lack of transparency in revenue flows have been major points of contention.

Shifts & Resistance

• Renegotiations and Policy Pushback: The DRC is increasing its stakes in ventures, and export bans are being implemented in Zimbabwe and Namibia.
• Activist Coalitions: Groups are exposing revenue losses and advocating for fairer contracts.

Critical Minerals Geopolitics

• Strategic Importance: Minerals like cobalt, lithium, and copper are crucial for EV batteries, renewable energy storage, and electronics manufacturing.
• Global Competition: Control over supply chains influences technological dominance in the clean energy transition.
• China’s Leverage: With significant control over cobalt and lithium reserves, China holds a strategic advantage over competitors such as the US, EU, and Japan.

Resource Nationalism

• Definition: A policy approach where nations assert control over natural resources to maximize domestic benefits and minimize foreign dependency.
• African Examples: Zimbabwe and Namibia's bans on unprocessed lithium exports; DRC’s efforts to renegotiate mining contracts for greater state ownership.
• Implications: Could enhance domestic processing industries but might deter foreign investment if not aligned with stable policy frameworks.

In conclusion, Africa's policy shifts in mineral governance could significantly alter global supply chains for critical minerals, positioning the continent as a key player in the ongoing transition to a green economy.

Practice Mains Question

Examine how Africa’s policy shift in mineral governance could alter global supply chains for critical minerals.

GS2/Governance

The Ceding of Academic Freedom in Universities

Why in News?

The discussion surrounding academic freedom in Indian universities has gained prominence, particularly in light of increasing over-regulation and political interference. This has been linked to the core theme of whether premier institutions like IITs and IIMs should maintain academic independence in course design and student selection.

Key Takeaways

• Academic freedom is essential for fostering innovation and critical thought in higher education.
• Over-regulation and political interference threaten the autonomy of universities, impacting their ability to contribute to societal progress.
• Reforms are necessary to enhance institutional accountability while safeguarding academic independence.

Additional Details

• Academic Freedom: This concept is crucial for encouraging questioning and debate within universities, allowing both students and faculty to explore diverse perspectives without fear of repercussion.
• Institutional Autonomy: Universities should have the freedom to determine their curriculum and pedagogical approaches independently, without external pressures that could dilute intellectual rigor.
• Impact on Innovation: Restrictions on academic discourse can stifle creativity and innovation, adversely affecting societal and economic development.
• Global Context: Comparisons with other democracies reveal a worrying trend of academic freedom erosion, highlighting the need for vigilance and reform.

In conclusion, safeguarding academic freedom is not merely a privilege but a necessity for national growth. Restrictions on this freedom undermine the foundations of innovation, democratic engagement, and societal advancement.

GS2/Governance

Animal Birth Control (ABC) Program

Why in News?

The Supreme Court has recently deemed the practice of returning sterilized stray dogs to the streets under the Animal Birth Control (ABC) Program as “unreasonable and absurd,” mandating their relocation to shelters instead.

Key Takeaways

• The ABC Program is a humane method aimed at controlling stray dog populations and reducing rabies.
• It is legally supported by the Animal Birth Control (Dogs) Rules, 2001, and updated as the Animal Birth Control Rules, 2023.

Additional Details

• Purpose: The ABC Program is a scientifically proven method designed to manage stray dog populations while also addressing rabies control.
• Legal Basis: Initially established under the Animal Birth Control (Dogs) Rules, 2001, it has been updated to comply with the Animal Birth Control Rules, 2023.
• Core Method: The program employs a “Catch–sterilise–vaccinate–release” model, which prohibits both relocation and culling of stray dogs.
• Implementation: The program is managed by municipalities, municipal corporations, and panchayats, ensuring local governance and accountability.
• Authorization: Only organizations recognized by the Animal Welfare Board of India (AWBI) can undertake ABC programs.
• Key Features:
  • Sterilization Target: A minimum of 70% of stray dogs in an area must be sterilized within one reproductive cycle (approximately 6 months).
  • Focus: Emphasis on female sterilization with a target ratio of 70:30 (female-to-male).
  • Rabies Control: Mandatory rabies vaccination (ABC–ARV) for every sterilized dog.
  • Infrastructure: Requires kennels, veterinary facilities, vehicles, and hygienic shelters.
  • Recordkeeping: Detailed records must be maintained for catching, surgery, vaccination, and release processes.
  • Monitoring: State and local committees oversee compliance and address any complaints related to the program.
• Legal Protection: The mass relocation or killing of stray dogs is prohibited under the Prevention of Cruelty to Animals (PCA) Act, 1960.

Overall, the ABC Program aims to effectively manage stray dog populations while prioritizing their welfare and reducing public health risks associated with rabies.

GS3/Economy

Trumponomics: Defying the Doom Predictions—for Now

Why in News?

Six months after US President Donald Trump’s significant tariff increases, the anticipated economic downturn has not occurred. The S&P 500 index has risen by approximately 10% since "Liberation Day," and although the dollar initially weakened, it has recently regained strength. Despite imposing tariffs on nearly all major trading partners, consumer prices in the US have not shown a substantial increase. This raises an important question: will these tariffs result in a one-time price hike or lead to ongoing inflationary pressures?

Key Takeaways

• The US has implemented significant tariffs on nearly all trading partners, including 15% on the EU, Japan, and South Korea, and 35-50% on Canada, Switzerland, Brazil, and India.
• Current average tariffs could range between 15-20%, which is inherently inflationary, even if some costs are absorbed by retailers.
• The US economy has shown resilience due to a strong foundation of over 2% GDP growth, near full employment, and low inflation prior to the tariffs.
• Stock markets have been buoyed by growth in the artificial intelligence sector, positively impacting tech company earnings.

Additional Details

• Tariff Impact: Importers increased shipments before tariffs took effect, meaning many goods currently available are not subject to the higher duties yet.
• Trump's frequent waivers and deadline extensions have postponed the full effects of the tariffs.
• Warning signs in the labor market indicate potential weaknesses, with non-farm payrolls rising only by 73,000 in July and previous months being revised downward.
• Despite stable inflation rates so far, higher import costs are expected to influence prices, potentially reducing consumer demand and hindering job growth.

In conclusion, while the US economy appears stable for the moment, the future remains uncertain as inflationary pressures from tariffs may begin to manifest, particularly with the upcoming holiday season. This could significantly affect voter sentiment before the midterm elections, leading to broader economic implications as the Federal Reserve navigates these challenges.

GS1/Geography

1950 Assam Earthquake and Future Seismic Risks in the Himalayas

Why in News?

On August 15, 1950, a devastating earthquake with a magnitude of 8.6 struck Northeast India and its surrounding regions, marking it as the strongest recorded earthquake on land.

Key Takeaways

• Magnitude: 8.6, the highest recorded earthquake on land.
• Impact Area: Tremors felt over 3 million sq. km across India, Myanmar, Bangladesh, Tibet, and South China.
• Casualties: Over 1,500 deaths in India and more than 4,000 in Tibet, along with significant livestock loss and infrastructure damage.
• Secondary Disasters: Triggered landslides that blocked rivers, leading to devastating flash floods.

Additional Details

• Epicentre: Located 40 km west of Rima (Zayu), near the India-Tibet border within the Mishmi Hills.
• Tectonic Context: Positioned on the Indian-Eurasian Plate boundary within the Eastern Himalayan Syntaxis (EHS), influenced by the Sunda Plate.
• Fault Type: Characterized by strike-slip motion with thrust faulting, which is atypical for Himalayan earthquakes.
• Plate Convergence: The Eastern Himalayas converge at a rate of 10-38 mm/year compared to approximately 20 mm/year elsewhere.
• Aftershocks: Indicated activation of multiple faults from the Syntaxial bend to Himalayan thrust faults in Arunachal Pradesh.

Lessons and Future Risks

• Magnitude Potential: Confirms that segments of the Himalayan region can generate earthquakes of magnitude 8.6 or higher.
• Central Himalayan Risk: Identified as a potential site for similar future seismic events.
• Vulnerability Today: Increased due to urbanization and significant infrastructure developments in seismic zones.
• Infrastructure Safety: Necessitates stringent norms for dams and high-risk projects in the Eastern Himalayas.
• Preparedness: Emphasizes the importance of seismic hazard mapping and disaster readiness.

This information highlights the critical need for awareness and preparedness concerning seismic risks in the Himalayas, especially considering the historical context of the 1950 Assam earthquake.

Consider the following statements:

1. In a seismograph, P waves are recorded earlier than S waves.
2. In P waves, the individual particles vibrate to and fro in the direction of wave propagation whereas in S waves, the particles vibrate up and down at right angles to the direction of wave propagation.

Which of the statements given above is/are correct?

Options: (a) 1 only (b) 2 only (c) Both 1 and 2* (d) Neither 1 nor 2

GS2/Polity

Jammu and Kashmir: Lieutenant-Governor’s Assembly Member Nominations

Why in News?

The Union Ministry of Home Affairs (MHA) has informed the J&K High Court that the Lieutenant-Governor (L-G) possesses the authority to nominate five members to the Assembly without requiring the "aid and advice" of the elected government. This assertion has ignited a constitutional debate concerning democratic accountability in the politically sensitive Union Territory of Jammu and Kashmir, where such nominations could significantly influence the balance of power.

Key Takeaways

• The High Court is assessing whether the L-G's nomination powers undermine the Constitution's basic structure.
• The 2023 amendments to the J&K Reorganisation Act permit the L-G to nominate five members, potentially altering the Assembly's majority.

Additional Details

• Constitutional Question: The core issue is whether the 2023 amendments violate the Constitution's basic structure.
• Potential Impact: Nominated members could significantly influence governance stability by converting a minority government into a majority.
• Judicial Scope: The matter extends beyond mere statutory interpretation to the essence of democracy itself.
• Provisions of the 2023 Amendments: Sections 15A & 15B allow for the nomination of two Kashmiri migrants (including one woman), and one from Pakistan-occupied J&K, along with two additional women if inadequately represented, resulting in five nominated members in a 119-member Assembly. These nominees are granted full voting rights.
• Centre's Justification: The MHA justified these nominations as being outside the elected government's domain, referencing the K. Lakshminarayanan vs. Union of India (Puducherry) case.
• Concerns over Democratic Implications: There is a risk that nominees could distort the electoral mandate, particularly in a closely contested Assembly.
• Supreme Court Jurisprudence: Previous Supreme Court rulings emphasize that the L-G should act on the "aid and advice" of the elected government, except in specified matters of discretion, suggesting a contradiction in the MHA's stance.

The issue of nominations in Jammu and Kashmir underscores the tension between administrative authority and the democratic mandate. In a region of heightened political sensitivity, bypassing elected representatives in critical decisions risks eroding public trust and undermining the constitutional guarantee of representative governance.

GS3/Economy

New Income Tax Bill, 2025

Why in News?

Parliament has recently passed the Income-tax Bill, 2025, which replaces the outdated Income Tax Act of 1961. This new legislation aims to simplify tax laws by eliminating redundant provisions and archaic language, and it will become effective on April 1, 2026.

Key Takeaways

• The total number of sections has been reduced from 819 to 536.
• The number of chapters has decreased from 47 to 23.
• The word count has been cut from 5.12 lakh to 2.6 lakh, with the inclusion of 39 tables and 40 formulas for enhanced clarity.
• A new concept of a “tax year” has been introduced, defined as from April 1 to March 31.

Additional Details

• Refunds: The bill restores the ability to claim refunds on belated returns by removing previous restrictions.
• Tax Collected at Source (TCS) Clarification: There will be nil TCS for Liberalised Remittance Scheme (LRS) remittances intended for educational purposes funded by financial institutions.
• Corporate Tax: The bill corrects errors related to inter-corporate dividend deduction for companies choosing concessional tax rates.
• Alternate Minimum Tax (AMT) Alignment: Aligns AMT provisions for Limited Liability Partnerships (LLPs) with current rates.
• Nil-Tax Deducted at Source (TDS) Certificate: Allows taxpayers without tax liability to obtain a nil-TDS certificate.
• Transfer Pricing: Clarifies transfer pricing provisions, including the set-off of losses and alignment with Section 79 concerning “beneficial ownership.”
• Non-Profit Organisation (NPO) Benefit: Expands exemptions to include 5% of total donations, extending beyond just anonymous donations.
• House Property Income: Clarifies a 30% standard deduction applicable after municipal taxes.
• Search Definition: Retains the definition of “virtual digital space” to encompass cloud storage, email, and social media accounts.
• Data Handling: A Standard Operating Procedure (SOP) will be issued for managing personal digital data seized during searches.

This significant overhaul of the income tax framework is expected to enhance compliance, reduce litigation, and improve overall taxpayer experience.

UPSC 2025

Consider the following statements:

Statement I: In India, income from allied agricultural activities like poultry farming and wool rearing in rural areas is exempted from any tax.

Statement II: In India, rural agricultural land is not considered a capital asset under the provisions of the Income-tax Act, 1961.

Which one of the following is correct in respect of the above statements?

• (a) Both Statement I and Statement II are correct and Statement II explains Statement I
• (b) Both Statement I and Statement II are correct but Statement II does not explain Statement I
• (c) Statement I is correct but Statement II is not correct
• (d) Statement I is not correct but Statement II is correct