UPSC Daily Current Affairs: 2026-02-17
GS2/Governance
Urban Challenge Fund (UCF)
Why in News?
The Union Cabinet, led by the Prime Minister of India, has recently approved the initiation of the Urban Challenge Fund (UCF), aimed at fostering resilient and sustainable urban development across the nation.
Key Takeaways
- The UCF is a new centrally sponsored scheme under the Ministry of Housing and Urban Affairs.
- It aims to enhance urban resilience, productivity, inclusivity, and climate responsiveness.
- A total financial assistance of ₹1 lakh crore has been allocated for this initiative.
- The scheme will operate from FY 2025-26 to FY 2030-31, with a possible extension until FY 2033-34.
Additional Details
- Financing Mechanism: A minimum of 50% of project funding must be sourced from market avenues, such as municipal bonds, bank loans, and Public-Private Partnerships (PPPs). The remaining funds can be contributed by States, Union Territories (UTs), Urban Local Bodies (ULBs), or other sources.
- Project Selection: Projects will be chosen through a transparent and competitive challenge mode, focusing on high-impact and reform-oriented proposals.
- Focus Areas: The UCF emphasizes reforms in Urban Governance, Market & Financial systems, Operational efficiency, and Urban Planning.
- Emphasis on Tier-II and Tier-III Cities: A dedicated corpus of ₹5,000 crore will be available to improve the creditworthiness of 4,223 cities, particularly assisting Tier-II and Tier-III cities in accessing market financing for the first time.
- Coverage: The fund will be applicable to all cities with a population of 10 lakh or more (2025 estimates), State and Union Territory capitals not included above, and major industrial cities with populations of 1 lakh or more. Additionally, all ULBs in hilly States, North-Eastern States, and smaller ULBs with populations below 1 lakh will be eligible for support under the Credit Repayment Guarantee Scheme.
The Urban Challenge Fund represents a significant investment in India's urban future, promoting sustainable development and resilience in cities across the country.
GS3/Economy
Central Bank Digital Currency (CBDC)
Why in News?
The Union Minister of Cooperation has recently introduced a modern Public Distribution System (PDS) utilizing Central Bank Digital Currency (CBDC) in Gandhinagar, Gujarat, highlighting the growing significance of digital currencies in enhancing financial systems.
Key Takeaways
- CBDCs are digital versions of fiat currencies, regulated by central banks.
- They aim to modernize financial systems, increase financial inclusion, and improve payment efficiency.
- India's e-Rupee is a key step towards adopting digital currency.
Additional Details
- Definition of CBDC: Central Bank Digital Currencies (CBDCs) are digital forms of a country's official currency issued and regulated by the central bank, providing a government-backed option for transactions.
- Uses: CBDCs facilitate daily transactions, cross-border payments, and enhance financial inclusion, offering a secure and efficient digital money alternative.
- Global Adoption: The Bahamas pioneered CBDCs with the Sand Dollar in 2020, followed by China's e-CNY, marking significant progress in digital currency initiatives.
- Types of CBDCs:They are categorized into wholesale and retail:
- Wholesale CBDCs: Designed for financial institutions, facilitating large-scale transactions.
- Retail CBDCs: Aimed at public use, allowing consumers and businesses to conduct transactions.
- Comparison with Cryptocurrencies: CBDCs are centralized, stable, and legal tender, whereas cryptocurrencies operate on decentralized networks, are volatile, and lack official recognition in many jurisdictions.
- Significance:
- Financial Inclusion: CBDCs can integrate unbanked populations into the formal financial system.
- Reduced Transaction Costs: They can lower transaction costs by eliminating intermediaries.
- Enhanced Monetary Policy: Central banks can implement policies more effectively through direct control over digital currencies.
- Security: CBDCs provide greater security against counterfeiting and fraud, with traceable transactions.
- Challenges:
- Privacy Concerns: The digital nature of CBDCs raises issues regarding government surveillance and user privacy.
- Cybersecurity: Increased digital reliance makes CBDCs vulnerable to cyberattacks, necessitating robust security measures.
- Infrastructure and Accessibility: Implementing CBDC systems requires significant technological infrastructure, posing challenges for developing nations.
- Impact on Banking: The widespread use of CBDCs might disrupt traditional banking models and reduce the role of commercial banks in credit distribution.
In conclusion, CBDCs represent a transformative step in modernizing financial systems, with the potential to enhance financial inclusion and improve transaction efficiency, while also presenting unique challenges and considerations for governments and financial institutions.
Related Reading for GS3: Central Bank Digital Currency
GS2/Governance
Institutionalising Scientific Expertise: The Case for an Indian Scientific Service (ISS)
Why in News?
The administrative framework in India, established post-Independence, was primarily centered around a generalist civil service model. However, with the increasing complexity of governance driven by scientific and technological challenges, India's lack of a dedicated scientific cadre has become evident. This gap creates a mismatch between the demands of scientific inquiry and the bureaucratic norms under which government scientists operate.
Key Takeaways
- India's governance is evolving but lacks a structured scientific cadre.
- Current scientists operate under outdated administrative rules not tailored for scientific inquiry.
- The proposed Indian Scientific Service could bridge the gap between science and policy-making.
Additional Details
- Structural Mismatch: Civil servants are trained for governance, while scientists focus on specialized education and domain expertise, leading to differing professional pathways.
- Absence of Tailored Career Frameworks: Scientists often lack structured training and clear career progression within governance.
- Governance Complexity Expansion: Areas like climate change and biotechnology require ongoing scientific involvement in policy-making.
- Comparative International Experience: Countries such as the US and UK have successful models of dedicated scientific services that enhance policy credibility and public trust.
- Proposed Structural Framework: The ISS could include various specialized services focusing on critical areas like public health, environmental regulation, and disaster management.
In conclusion, establishing the Indian Scientific Service would modernize the governance framework, ensuring that scientific expertise is integrated into policy-making processes, thus enabling India to address contemporary challenges effectively and enhance democratic accountability.
GS2/International Relations
African Union
Why in News?
The Thirty-Ninth Ordinary Session of the Assembly of the African Union (AU) recently concluded at the AU Headquarters in Addis Ababa, Ethiopia, marking significant developments in the organization.
Key Takeaways
- The African Union (AU) consists of 55 member states across the African continent.
- Established in 2002, the AU succeeded the Organisation of African Unity (OAU) founded in 1963.
- The AU aims to enhance unity, cooperation, and development among African nations.
- It was recently granted permanent membership in the G20 under India's presidency in 2023, amplifying Africa's voice in global economic governance.
Additional Details
- Establishment: The African Union was formally launched in Durban, South Africa, in 2002, transitioning from the OAU to better address contemporary challenges.
- Headquarters: The AU's administrative operations are managed from its headquarters in Addis Ababa, Ethiopia.
- Significance: The AU emphasizes the involvement of African citizens and civil society through institutions like the Pan-African Parliament and the Economic, Social & Cultural Council (ECOSOCC).
- Governance Structure:The AU's governance includes:
- Assembly: The highest decision-making body, comprising heads of state and government from member countries.
- Executive Council: Composed of foreign affairs ministers, it addresses policy matters and provides recommendations to the Assembly.
- AU Commission: It acts as the administrative arm, responsible for implementing the Assembly's and Executive Council's decisions.
- Peace and Security Council: This body focuses on maintaining peace and security across the continent.
- Strategic Frameworks and Key Projects:
- Agenda 2063: An extensive strategic framework adopted in 2015 aimed at achieving Africa's socio-economic and political transformation over 50 years.
- AfCFTA: The African Continental Free Trade Area seeks to establish a single market for 1.3 billion people, enhancing intra-African trade and industrialization.
- Peacekeeping Missions: The AU engages in various peacekeeping operations, such as the African Union Support and Stabilization Mission in Somalia (AUSSOM) and previously the African Union Mission in Somalia (ATMIS).
The African Union plays a crucial role in fostering collaboration and development among African nations, advocating for their interests on the global stage, and addressing pressing regional challenges through various strategic initiatives.
GS3/Economy
Fertiliser Industry in India
Why in News?
The Uttar Pradesh government has imposed a ban on the sale of non-subsidised fertilisers by urea manufacturers and suppliers, raising concerns about excessive regulatory controls in the Indian fertiliser industry.
Key Takeaways
- The fertiliser sector is heavily regulated, crucial for food security in India.
- Maximum retail prices (MRP) for urea have remained unchanged since 2012.
- The Uttar Pradesh ban restricts the sale of non-subsidised fertilisers, impacting market dynamics.
Additional Details
- Structure of the Fertiliser Industry: The industry is characterized by regulated pricing and distribution controls. Urea is sold at a fixed MRP of Rs. 266.5 per 45-kg bag, while other fertilisers like DAP are partially decontrolled but still receive subsidies based on capped prices.
- Distribution Controls: The government regulates the allocation and movement of subsidised fertilisers, creating a structured supply chain that companies must adhere to.
- Non-Subsidised Fertilisers: Companies also offer non-subsidised speciality nutrients, which, despite being more efficient and used in high-value crops, represent a small market compared to subsidised products.
- The Uttar Pradesh Ban: Issued in January 2026, it prohibits the sale of non-subsidised fertilisers to prevent alleged coercive practices in sales.
- Implications of the Ban: This restriction could lead to decreased nutrient use efficiency and worsen the reliance on cheap urea, which already contributes to excessive nitrogen application in agriculture.
- Structural Challenges: The industry faces issues like overdependence on subsidies, imbalanced nutrient use, and restrictive policy frameworks that hinder market flexibility.
In conclusion, the fertiliser industry is vital for India's food security, but excessive government controls may stifle innovation and hinder sustainable agricultural practices.
GS3/Science and Technology
AI-Powered Distributed Renewable Energy (DRE) - Building India's Citizen-Centric Energy Future
Why in News?
At the India AI Impact Summit held at Bharat Mandapam, senior policymakers and global experts discussed the theme 'Global Mission on AI for Energy Scaling through citizen-centric India Energy Stack'. Highlighting the global interest in India's AI-energy convergence model, the Indian government emphasized how Artificial Intelligence (AI) can significantly impact India's rapidly growing Distributed Renewable Energy (DRE) sector.
Key Takeaways
- AI's role in enhancing Distributed Renewable Energy (DRE) systems.
- India's commitment to integrating AI in energy management.
- Focus on citizen-centric energy solutions.
Additional Details
- Understanding Distributed Renewable Energy (DRE): DRE represents small-scale, decentralized renewable power systems, such as rooftop solar panels and small wind turbines, located near points of consumption. This model encourages energy decentralization and local generation, promoting consumer participation.
- India's Renewable Energy Landscape: As of now, 52% (approximately 272 GW) of India's total installed power capacity comes from non-fossil fuel sources, with around 140 GW from solar energy and 38 GW from DRE systems. Significant public expenditure, approximately $9 billion on rooftop solarisation and $4 billion on PM-KUSUM, supports this growth.
- Importance of AI in Energy Transition: AI addresses structural challenges in energy grids, such as managing the increased complexity from 'prosumers' and enabling demand response management. Applications include predictive analytics for solar generation and grid stability management.
- AI as Development Infrastructure: AI is viewed as essential infrastructure for development, aligning with India's digital public infrastructure approach. This involves creating a comprehensive India Energy Stack similar to the financial technology sector.
- Governance and Regulation: As energy transitions increase system complexity, governance principles such as open standards and local solutions become vital to prevent monopolization by global AI firms.
In conclusion, India stands at a crucial juncture where energy transition meets digital transformation. With a significant portion of its energy capacity already from non-fossil sources, the focus will shift towards smart management of renewable energy systems. The successful integration of AI and DRE will determine whether India can lead in sustainable, citizen-centric energy solutions or merely follow global trends.
GS3/Science and Technology
Bharat EduAI Stack and the Future of Digital Learning in India
Why in News?
The Indian government has announced the integration of AI tools in the education sector, set to begin from the next academic session. This initiative is supported by the launch of Bodhan AI and the Bharat EduAI Stack.
Key Takeaways
- AI is being integrated into education to enhance personalized learning and assessment.
- The Bharat EduAI Stack aims to create a Digital Public Infrastructure for education in India.
- Focus on multilingual education to cater to India's diverse linguistic landscape.
Additional Details
- AI in Education: Artificial Intelligence has become a crucial tool across various sectors, including healthcare and governance. In education, it facilitates personalized learning, real-time assessments, and data-driven decision-making.
- National Education Policy 2020: This policy supports technology-enabled learning, emphasizing foundational literacy, numeracy, and adaptive learning systems.
- Centre of Excellence: The initiative is anchored at IIT Madras, with a budget allocation of ₹500 crore to develop AI infrastructure tailored for Indian needs.
- Digital Public Infrastructure (DPI): The Bharat EduAI Stack will serve as a foundational layer for various AI applications in education, focusing on scalable digital systems.
- AI Tools: The initiative will include tools for personalized learning, teacher assistance, and administrative support at various educational levels.
- Funding Model: Initial funding comes from the Union Budget, with plans for self-sustainability through contributions from state governments and partnerships with edtech firms.
- Data Protection: Emphasis on securing personal data of students, aligning with India's digital governance framework.
- Equity and Access: Addressing challenges in rural areas will be crucial for effective implementation.
The Bharat EduAI Stack represents a significant shift in the integration of technology into public education. If executed effectively, it has the potential to enhance learning outcomes, mitigate regional disparities, and position India as a leader in educational technology innovation.
GS3/Economy
A Budgetary Signal as Banks Cannot Bear It All
Why in News?
The Union Budget 2026 of India introduces several initiatives aimed at reforming the financial sector, including creating a market-making framework for corporate bonds. These measures reflect a significant shift in policy that addresses deeper structural imbalances in India's financial system.
Key Takeaways
- The Indian government is moving from a bank-dominated system to a more market-oriented financial structure.
- Indian banks face long-term credit risks that financial markets in mature economies typically absorb.
- The corporate bond market in India is underdeveloped, creating a reliance on banks for funding large projects.
Additional Details
- Structural Imbalance: Indian banks hold 60-65% of non-financial corporate debt, compared to about 30% in the US and 40% in Europe, due to a lack of a robust corporate bond market.
- Public discussions often link banking distress to governance issues, political interference, and risk management, but the fundamental problem lies in institutional design.
- Maturity Mismatch: Banks primarily fund themselves through short-term deposits, creating a mismatch when financing long-term infrastructure projects. This leads to financial fragility.
- The government has injected over ₹3.2 lakh crore into public sector banks since 2017, highlighting the fiscal burden of transferring corporate losses to taxpayers.
- Impact on Monetary Policy: The concentration of risk within banks disrupts the transmission of monetary policy, as banks are hesitant to adjust lending rates in response to policy changes.
The Budget 2026 reforms aim to redistribute credit risk beyond banks and enhance the corporate bond market. By encouraging participation from institutional investors and creating a more functional corporate debt market, these measures seek to transform the financial system. Ultimately, the success of these initiatives will determine whether India can transition to a resilient, market-based financial structure or continue relying on banks as the primary risk-bearers.
GS2/Polity
India's Federalism is in Need of a Structural Reset
Why in News?
The debate surrounding India's federal structure has gained traction as experts argue for a recalibration of power between the Centre and the states. This discussion is rooted in the historical context of India's formation and the evolving political landscape, which now calls for a reassessment of centralization and autonomy.
Key Takeaways
- India's federal system, initially designed for stability, now risks inefficacy due to excessive centralization.
- The historical context of post-Independence necessitated strong central authority, which has since become entrenched.
- Decentralization is essential for improving governance and policy responsiveness to regional diversity.
Additional Details
- Historical Context: The immediate environment post-1947, including Partition and the integration of princely states, led to a concentration of power in New Delhi as a defensive mechanism. This centralization was meant to ensure national stability but has evolved into a persistent administrative structure.
- Theoretical Foundations: Federalism balances the allocation and restraint of authority. Effective governance requires decisions to be made closer to the citizens, which enhances accountability and responsiveness.
- Political Practice: The dominance of a single national party historically reinforced central authority, but the emergence of regional parties has started to restore balance without undermining unity.
- Institutional Mechanisms of Centralisation: Central authority has expanded through constitutional amendments, legislation, and financial dependencies, which can undermine state autonomy.
- Judicial Doctrine: The Supreme Court's recognition of federalism as part of the Basic Structure underscores the constitutional autonomy of states, yet practice often contradicts this principle.
- Functional Argument: India's diversity necessitates decentralized governance, allowing for policy experimentation and flexibility to address regional needs effectively.
In conclusion, India's federal framework requires a structural reset to align authority with responsibility. A recalibrated relationship between the Union and the states can enhance governance, accountability, and ultimately reinforce national unity through cooperation rather than control.
GS3/Science and Technology
Bio-Based Chemicals
Why in News?
India has identified bio-based chemicals and enzymes as a crucial focus area under the Department of Biotechnology's BioE3 policy, highlighting the nation's commitment to sustainable industrial practices.
Key Takeaways
- Bio-based chemicals are derived from renewable biological materials.
- They offer a sustainable alternative to conventional chemicals sourced from fossil fuels.
- India aims to reduce reliance on costly petrochemical imports and support rural economies through bio-based production.
Additional Details
- Definition: Bio-based chemicals are industrial chemicals produced from biological feedstocks such as sugarcane, corn, starch, or biomass residues.
- Production Methods: These chemicals are typically produced through fermentation or enzymatic processes, leading to products such as organic acids (like lactic acid), bio-alcohols, solvents, surfactants, and intermediates used in plastics, cosmetics, and pharmaceuticals.
- Difference with Conventional Chemicals: Unlike conventional chemicals, which primarily rely on fossil fuels, bio-based chemicals provide a sustainable solution through renewable feedstocks.
- Types: Bio-based chemicals can be categorized as drop-in (chemically identical to fossil-based versions like Bio-PET) or novel (offering functionalities not achievable with petrochemicals, such as certain bioplastics like PLA).
- Ecological Benefits:
- Reduced reliance on fossil fuels through the use of renewable feedstocks.
- Lower production of harmful byproducts compared to traditional petroleum-based methods.
- Minimized carbon footprint due to generally lower energy requirements in production.
- Supports waste minimization and promotes a circular economy by utilizing organic waste resources.
- Challenges and Risks:
- Cost disadvantage due to higher production costs compared to petrochemical alternatives, creating entry barriers.
- Availability of reliable feedstocks and necessary infrastructure for large-scale production of bio-based chemicals.
- Market adoption challenges related to the acceptance of bio-based chemicals as substitutes for fossil fuel-based products.
- Strategic Significance for India:
- Import substitution: India imported approximately $480 million worth of acetic acid in 2023, and transitioning to bio-alternatives can reduce reliance on expensive petrochemical imports.
- Climate goals: Bio-based chemicals typically have a lower carbon footprint and contribute to a circular bioeconomy by utilizing waste as feedstock.
- Industrial efficiency: Many bio-based processes leverage enzymes that function at lower temperatures and pressures, significantly decreasing energy consumption.
- Rural growth: This sector can create new markets for agricultural produce and crop residues, potentially enhancing rural incomes.
In summary, the development and adoption of bio-based chemicals present a promising avenue for sustainable industrial practices in India, aligning with ecological benefits and economic growth potential.
GS3/Environment
White-Bellied Sea Eagle
Why in News?
The recent annual nest monitoring survey has documented 17 active nesting sites of the White-bellied Sea Eagle in the Kannur and Kasaragod districts this season.
Key Takeaways
- The White-bellied Sea Eagle is a large diurnal bird of prey belonging to the family Accipitridae.
- It is classified as 'Least Concern' by the IUCN Red Data List, indicating a stable population.
Additional Details
- Scientific Name: The scientific name for the White-bellied Sea Eagle is Haliaeetus leucoryphus.
- Appearance: Adults are characterized by a striking white head, neck, and underparts, complemented by dark grey to brown wings and a short, wedge-shaped tail.
- Habitat: This species primarily inhabits terrestrial areas near oceans, including coasts, islands, and estuaries, as well as forested regions with access to smaller water bodies.
- Distribution: The White-bellied Sea Eagle can be found across various countries, including India, Sri Lanka, Andaman Islands, southern China, the Philippines, Wallacea, New Guinea, Australia, and Tasmania.
- Uniqueness: Notably, this species exhibits sexual dimorphism, with females being larger than males, having a wingspan that can reach up to 2.2 meters.
- Communication: They primarily communicate through vocalizations.
- Diet: As carnivorous birds, they mainly prey on aquatic animals, including fish, eels, and crustaceans.
- Behaviour: These eagles are monogamous and territorial, known for their impressive aerial courtship displays that involve cartwheeling while locked in talons.
- Indicator Species: As an apex predator in coastal ecosystems, the White-bellied Sea Eagle serves as an important indicator of the health of marine and coastal environments.
In conclusion, the White-bellied Sea Eagle plays a significant role in the ecosystem and its monitoring is crucial for understanding the health of coastal habitats.
FAQs on UPSC Daily Current Affairs: 2026-02-17
| 1. What is the Urban Challenge Fund (UCF) and its significance? |  |
| 2. What is the purpose of Central Bank Digital Currency (CBDC) in India? | |
| 3. How does the proposal for an Indian Scientific Service (ISS) aim to institutionalise scientific expertise? | |
| 4. What challenges does the fertiliser industry in India face? | |
| 5. How does AI-Powered Distributed Renewable Energy (DRE) contribute to India's energy future? | |
