UPSC Daily Current Affairs: 2026-02-02
GS3/Economy
Highlights of Union Budget 2026-27-I
Why in News?
The Union Minister for Finance presented the Union Budget for 2026-27 in Parliament, marking the first budget prepared in Kartavya Bhawan. This budget is structured around three key "kartavyas" or duties, designed to enhance economic growth, fulfill people's aspirations, and ensure inclusive access to resources and opportunities.
Key Takeaways
- The budget focuses on accelerating and sustaining economic growth.
- It aims to fulfill people's aspirations by strengthening capacities.
- The budget promotes inclusive access to resources, aligning with the vision of "Sabka Saath, Sabka Vikas."
Additional Details
- Fiscal Estimates: Non-debt receipts are estimated at ₹36.5 lakh crore, while total expenditure is projected at ₹53.5 lakh crore. The Centre's net tax receipts are estimated at ₹28.7 lakh crore.
- Borrowings: Gross market borrowings are pegged at ₹17.2 lakh crore, with net borrowings from dated securities estimated at ₹11.7 lakh crore.
- Fiscal Deficit: The fiscal deficit for 2026-27 is estimated at 4.3% of GDP, with the previous year's estimate remaining unchanged at 4.4% of GDP.
- Debt Position: The debt-to-GDP ratio is projected to decrease to 55.6% in 2026-27, indicating a gradual fiscal consolidation.
This budget underscores a commitment to enhancing productivity and resilience in the face of global uncertainties while ensuring that every section of society can participate in India's growth journey.
GS3/Economy
Union Budget 2026 and Urban India - Spending Cuts and Policy Signals
Why in News?
The Union Budget 2026 has reduced central allocations for urban development by 11.6%, raising questions about the government's dedication to enhancing urban areas in India.
Key Takeaways
- Urban development funding has seen a significant cut, indicating a shift in fiscal priorities.
- Major urban welfare schemes have faced budget reductions, affecting the quality of urban services.
- Inadequate funding could undermine urban growth and governance in India.
Additional Details
- Urban Development: Urban India is crucial for economic transformation, contributing nearly two-thirds of India's GDP while facing challenges such as housing shortages and infrastructure stress.
- Financing Framework: Urban development relies on a complex mix of central allocations, state budgets, municipal revenues, and borrowing. Central schemes like PMAY-Urban and AMRUT are vital for urban service provision.
- Union Budget 2026 Cuts: The total urban development outlay has decreased from Rs. 96,777 crore to Rs. 85,522 crore, a nominal cut of 11.6%, which translates to a more severe real decline when adjusted for inflation.
- Spending Priorities: Despite overall cuts, a disproportionate amount of funding is directed towards metro rail projects, overshadowing essential services like bus transport and non-motorised transport.
- Impact on Flagship Schemes: Major urban initiatives such as PMAY-U and SBM-U have seen budget cuts, raising concerns about the sustainability of urban sanitation and housing efforts.
- Implications for Urban Governance: The budget does not enhance the fiscal powers of urban local bodies (ULBs), limiting their ability to address local infrastructure needs and undermining India's growth potential.
The budgetary reductions signal a concerning trend where urban development is viewed as a cost rather than an investment in growth, potentially jeopardizing long-term urban governance and quality of life in cities.
GS3/Economy
Highlights of Union Budget 2026-27 - II
Why in News?
The Union Finance Minister Nirmala Sitharaman presented the Union Budget for the fiscal year 2026-27 in Parliament. She characterized the budget as a Yuva Shakti-driven initiative, emphasizing the government's commitment to prioritizing the needs of the poor, underprivileged, and disadvantaged segments of society.
Key Takeaways
- Introduction of a new Income Tax framework effective from April 2026.
- Significant reforms in Direct and Indirect Taxes aimed at simplifying the tax process.
- Enhanced support for cooperatives and the IT sector.
- Reforms in Customs duties to bolster domestic manufacturing and ease of doing business.
Additional Details
- New Income Tax Framework: The New Income Tax Act, 2025 is set to simplify rules and forms, ensuring easier compliance for taxpayers.
- Relief and Ease for Taxpayers:
- TCS on overseas tour programs reduced from 5%-20% to 2% without any threshold.
- TDS simplification for manpower services, with rates fixed at 1% or 2%.
- Return Filing Reforms: Time limits for revising returns extended, and staggered timelines introduced.
- Tax Support for Cooperatives: Expanded deductions for cooperatives supplying various agricultural products.
- IT Sector Reforms: A simplified tax regime for IT services with a common safe harbor margin of 15.5%.
The Union Budget 2026-27 aims to create a more equitable tax structure while fostering growth in critical sectors, ultimately enhancing the economic landscape with a focus on inclusivity and compliance.
GS3/Economy
India's Budgetary Blueprint for Resilience - Governing Growth in a Fragmented World
Why in News?
The Union Budget 2026-27 is being analyzed in the context of increasing geopolitical uncertainty, trade fragmentation, and macroeconomic constraints. It represents a significant shift towards leveraging trade, capital formation, technology, and export competitiveness as primary drivers of growth while striving to maintain macroeconomic stability in a turbulent global environment.
Key Takeaways
- The Budget emphasizes trade as an essential engine of growth amidst a fragmented global order.
- There is a focus on balancing self-reliance with deeper integration with trusted international partners.
- Fiscal credibility and discipline are highlighted as crucial for sustaining investment and economic growth.
Additional Details
- Changing Global Order: The global economy is experiencing a shift characterized by tariffs, export controls, and technology restrictions, prompting discussions on inflation, growth, and India's investment attractiveness.
- Trade as an Engine of Growth: The Finance Minister's focus on capital, technology, and export competitiveness is evident through new trade agreements and customs duty rationalization.
- Macroeconomic Constraints: The Economic Survey indicates that a Current Account Deficit (CAD) of 1.3% of GDP can be managed without depleting foreign exchange reserves, as India has previously navigated higher CADs.
- Fiscal Discipline: The government has reduced the deficit from 9.2% in FY21 to projected figures of 4.4% in FY26, emphasizing the need for fiscal credibility to encourage private investment.
- Private Investment: The Centre's additional grants aim to boost state capital expenditure, but private investment must lead growth to ensure macroeconomic stability.
- Urban Transformation: The Budget addresses urban infrastructure and governance, recognizing cities as crucial for economic output and growth, while also emphasizing the need for improved municipal finance.
- Challenges Ahead: The Budget outlines the necessity to build agile alliances, manage high capital costs, maintain fiscal credibility, and integrate climate policy with industrial strategies.
In conclusion, the Union Budget not only aims to accelerate growth but also to govern it with a resilient and judicious approach. It reflects a moment of creative transformation, creating opportunities for new investments, technologies, and partnerships while aligning fiscal prudence with trade openness and climate competitiveness.
GS3/Economy
Union Budget 2026 Bets Big on Industrial Growth
Why in News?
The Union Budget 2026-27 has been introduced in a unique context marked by strong economic performance, characterized by significant growth and relatively low inflation rates. India's position as the fourth-largest global economy fosters optimism, but there are underlying vulnerabilities such as geopolitical tensions and supply chain disruptions that could hinder long-term growth.
Key Takeaways
- The Budget aims to balance optimism with realism, maintaining a long-term vision while providing short-term growth interventions.
- Fiscal discipline is emphasized, with a fiscal deficit target set at 4.3% of GDP, while public investment remains a key growth driver.
- A strategic push towards manufacturing, particularly in seven key sectors, aims to enhance industrial capability.
- Concerns regarding revenue assumptions and the impact of automation on job creation are highlighted.
Additional Details
- Fiscal Discipline: The Budget has increased capital expenditure (capex) to ₹12.2 lakh crore for FY27, signaling ongoing infrastructure-led expansion while committing to lower public debt.
- Manufacturing Focus: The government has prioritized manufacturing and announced support for sectors such as semiconductors and electronics, aiming to build deeper industrial capabilities.
- Challenges: Despite its strategic focus, there are concerns over optimistic revenue forecasts, ongoing automation trends that may reduce job opportunities, and a lack of attention to domestic demand and infrastructure for energy supply.
In conclusion, the Union Budget 2026-27 reflects a balance of ambition and caution, prioritizing infrastructure and manufacturing while maintaining macroeconomic stability. However, the effectiveness of its ambitious strategies will depend on addressing structural gaps and ensuring that growth translates into widespread economic benefits.
GS2/ Indian Polity
Personality Rights in India
Why in News?
Recently, the Delhi High Court issued notices regarding a case involving Salman Khan 's personality rights. This came after a foreign Artificial Intelligence (AI) voice-generation platform requested to lift an interim injunction that was protecting Khan's name, image, and voice from unauthorized use.
Personality Rights
Definition: Personality rights safeguard an individual's public persona, which includes their name, voice, image, and mannerisms. This is part of their broader right to privacy or property. These rights give individuals control over the commercial use of their name, image, or likeness.
Types of Personality Rights:
- Right of Publicity: This right protects an individual's image and likeness from unauthorized commercial use. It is similar to trademark rights.
- Right to Privacy: This right safeguards against the public representation of one's personality without their consent.
Constitutional and Legal Basis:
- Article 21: This article guarantees the right to life and personal liberty, which includes the right to privacy. This was affirmed in the K.S. Puttaswamy case in 2017.
- Copyright Act, 1957: This act grants moral rights to authors and performers, allowing them to prevent the distortion or misuse of their work.
- Trademarks Act, 1999: Section 14 of this act prohibits trademarks that falsely imply an association with a living person or someone deceased within 20 years, without their consent.
- Information Technology Act, 2000: Section 66C of this act provides punishment for identity theft involving the misuse of another person's electronic identity or credentials.
Key Judgements:
- In the case involving Aishwarya Rai Bachchan in 2025, the Delhi High Court restrained unauthorized impersonation, misuse of her name or image, and the circulation of AI-generated manipulated content.
Court Balancing: Courts balance personality rights with the freedom of trade and expression. They allow artistic or commercial use only when it does not mislead the public or imply endorsement. Additionally, foreign entities cannot invoke Article 19 rights in India.
GS3/ Indian Economy
RBI-ESMA Memorandum of Understanding
Why in News?
The Reserve Bank of India (RBI) recently signed a Memorandum of Understanding (MoU) with the European Securities and Markets Authority (ESMA) during the visit of the President of the European Council and the President of the European Commission to India.
About the MoU
- The MoU aims to formally recognize the Clearing Corporation of India Ltd. (CCIL) and other RBI-regulated Central Counterparties (CCPs) by ESMA.
- This recognition will facilitate smoother operations between these CCPs and European market participants.
Benefits of the MoU
- The agreement will simplify access for European banks and investors to India's financial markets by reducing regulatory and operational barriers.
- It will promote greater collaboration and integration between Indian and European financial markets.
Provisions of the MoU
- Both the RBI and ESMA will consult, cooperate, and exchange information to ensure that the covered CCPs comply with ESMA's recognition requirements.
- ESMA will depend on RBI's regulatory and supervisory framework, while RBI will be responsible for ensuring the resilience of CCPs in India.
Nature of the Agreement
- The MoU is a non-binding statement of intent, meaning it does not create legal obligations or enforceable rights and does not override domestic laws.
Significance of the MoU
- The agreement is effective from the date of signing and is intended to remain in place indefinitely, establishing a long-term foundation for cooperation between India and the EU in financial markets.
GS3/Environment and Ecology
Coking Coal Declared a Critical Mineral
Why in News?
The Government of India has classified Coking Coal as a Critical and Strategic Mineral under the Mines and Minerals (Development and Regulation) Act, 1957 (MMDR). This move aims to reduce import dependence and align with the goals of Aatmanirbhar Bharat and Viksit Bharat 2047.
By using Section 11C of the MMDR Act, 1957, the government amended its First Schedule to include "Coking Coal" within the definition of "Coal" in Part A and to list it separately as a Critical and Strategic Mineral in Part D.
Coking Coal
- About: Coking coal, also known as metallurgical coal, is a specific type of bituminous coal that is transformed into coke through a process called carbonization. Coke is a crucial material used in traditional blast furnace steelmaking to reduce iron ore to pig iron.
- Properties: Coking coal is valued for its unique caking properties, which involve softening and swelling when heated. Additionally, it has low impurity levels, including low ash, sulfur, and phosphorus content.
- Steel Production Link: The production of one tonne of steel requires approximately 780 kg of coking coal, highlighting its direct and strategic importance to the steel industry.
- Global Production: The leading producers of coking coal worldwide include China, Australia, Russia, the USA, and Canada.
- Indian Scenario: India, being the world's second-largest producer of crude steel, relies heavily on imported coking coal. Nearly 95% of the steel sector's coking coal requirement is met through imports, with a significant portion sourced from Australia.
Coking coal imports into India have been steadily increasing, reaching 57.58 million tonnes in 2024-25. This trend underscores India's growing dependence on imports despite having substantial domestic resources.
India is estimated to hold around 37.37 billion tonnes of coking coal resources, primarily located in Jharkhand. There are also significant reserves in Madhya Pradesh, West Bengal, and Chhattisgarh.
FAQs on UPSC Daily Current Affairs: 2026-02-02
| 1. What are the key spending cuts proposed in the Union Budget? |  |
| 2. How does the Union Budget signal policy changes for urban India? | |
| 3. In what ways is the Union Budget considered a turning point for the economy? | |
| 4. What are the implications of the Union Budget for industrial growth? | |
| 5. How does the Union Budget address the challenges of a fragmented world? | |
