Context:

• The 2015 Paris Agreement on climate change includes Article 6, which sets the framework for international carbon markets—allowing countries to trade emissions reductions.

• After long negotiations, Article 6 rules were finalized at COP29 (Baku, 2024).

• A National Designated Authority (NDA) is a mandatory national body required under Article 6 for each country to manage its participation in these carbon markets.

India’s NDA Structure:

• Composition: 21-member committee

• Head: Secretary of the Ministry of Environment, Forest and Climate Change

• Members: Officials from Ministries of External Affairs, Steel, Renewable Energy, NITI Aayog, and other relevant departments

Key Roles and Responsibilities of the NDA:

• Recommend to the government a list of eligible activities/projects for trading emission reduction units under Article 6.

• Modify the list periodically according to national priorities and sustainable development goals.

• Receive, evaluate, approve, and authorize emission reduction projects for participation in carbon trading.

• Authorize the use of emission reduction units toward achieving India’s Nationally Determined Contributions (NDCs).

India’s NDC Commitments:

• Reduce emission intensity of GDP by 45% by 2030 (from 2005 levels).

• Achieve 50% electric power capacity from non-fossil fuel sources by 2030.

• Create an additional carbon sink of 2.5 to 3 billion tonnes of CO₂ equivalent by 2030 through afforestation.

Significance:

• The NDA will facilitate India’s participation in global carbon markets, ensuring projects align with national climate goals.

• It supports transparent and accountable trading of carbon credits, helping India meet its climate commitments efficiently.

• The establishment of NDA is a critical step in operationalizing the market mechanisms under the Paris Agreement’s Article 6.

• What: A large-scale multinational joint military exercise to improve interoperability, build trust, and enhance collective readiness among partner nations' armed forces.

• Origin:

  • Started in 2006 as a bilateral exercise between Indonesia and the U.S., called Garuda Shield.

  • Expanded in 2022 to include more countries, renamed Super Garuda Shield.

• Location:

  • Held annually in Jakarta, Indonesia.

• Scale in 2025:

  • Over 4,100 Indonesian troops and 1,300 American troops participating — the largest edition to date.

  • Participating countries: Australia, Brazil, Canada, France, Germany, Indonesia, Japan, Netherlands, New Zealand, Singapore, South Korea, UK, USA.

  • Observers: Cambodia, India, Papua New Guinea.

• Training Activities:

  • Maritime and field training

  • Engineering construction

  • Staff training

  • Airborne operations

• Significance:

  • Strengthens defense cooperation in the Indo-Pacific region.

  • Enhances collective military readiness and builds trust among partner nations.

The CAG’s 2023-24 review of the FRBM Act highlights that India is progressing steadily toward long-term macroeconomic stability

Key Highlights of the CAG Review of the FRBM Act for FY 2023-24:

• Central Government Debt: Declined to 57% of GDP in March 2024 from 61.38% in FY 2020-21, indicating an improvement in managing debt levels.

• General Government Debt (GGD): Declined slightly from 83% of GDP in March 2022 to 81.3% in March 2023, but still remains well above the FRBM target of 60%.

• Debt Sustainability Analysis (DSA): This analysis assesses the government's ability to service its debt, with the debt-to-GDP ratio being the key indicator. A sustainable fiscal policy requires this ratio to be stable or declining over time.

• The Centre’s debt-to-GDP ratio, after peaking at 61.38% in FY 2020-21, has declined steadily to 57% in FY 2023-24, showing progress towards fiscal sustainability.

• Unrealised Taxes: At the end of FY 2023-24, unrealised tax revenues stood at Rs 31.11 lakh crore, which is an increase of Rs 9.81 lakh crore compared to the previous year (2022-23), indicating challenges in tax collection or realization.

What is the FRBM Act, 2003?

• Purpose: The FRBM Act was enacted to reduce fiscal deficits, promote long-term macroeconomic stability, and ensure inter-generational equity (so future generations are not burdened by excessive debt).

• Amendments: The Act has been amended several times — in 2004, 2012, 2015, and 2018 — to revise deficit targets, set new debt reduction goals, and provide flexibility in managing fiscal policy during crises like the pandemic.

Key Provisions of the FRBM Act:

1. Fiscal Responsibility:

   • Requires the Finance Minister to review fiscal trends and present half-yearly reports to both Houses of Parliament.

2. Medium-Term Fiscal Policy (MTFP):

   • Mandates the presentation of an MTFP statement outlining rolling three-year targets for key fiscal indicators:

     • Revenue Deficit

     • Fiscal Deficit

     • Central Government Debt as a percentage of GDP

3. Implementation and Review:

   • The Comptroller and Auditor General (CAG) conducts annual reviews to assess government compliance with FRBM targets.

FRBM Targets (As per 2018 Amendment):

• General Government Debt (Centre + States, excluding inter-governmental liabilities) to be reduced to 60% of GDP by FY 2024-25.

• Central Government Debt target is 40% of GDP by FY 2024-25.

• Fiscal Deficit (FD) target was originally set at 3% of GDP by March 2021 but deferred due to the COVID-19 pandemic.

• The government now commits to maintaining FD below 4.5% of GDP by 2025-26.

• In June 2025, India successfully met its fiscal deficit target of 4.8% of GDP for FY 2024-25.

• The government must not provide additional loan guarantees exceeding 0.5% of GDP in any financial year from the Consolidated Fund of India.

Automakers worldwide are increasingly reducing their reliance on rare earth magnets in electric vehicles (EVs) to mitigate supply chain vulnerabilities and environmental concerns. This shift is particularly pertinent as global supply chains face disruptions, notably due to export restrictions from China, a major supplier of rare earth materials.

Rare Earth Magnets

Definition:
Rare earth magnets are permanent magnets made from alloys of rare earth elements. They are known for their exceptional magnetic strength and compact size, outperforming other magnets in energy density and magnetic field generation.

Types of Rare Earth Magnets

• Neodymium Magnets (Nd-Fe-B):
  Composed mainly of neodymium, iron, and boron. These are the strongest type of permanent magnets available and widely used in many applications.

• Samarium Cobalt Magnets (SmCo):
  Made from samarium and cobalt, these magnets are also very strong and have excellent temperature stability and corrosion resistance.

Properties

• Extremely strong magnetic force

• High energy density

• Brittle and prone to corrosion (usually nickel-plated to prevent oxidation)

Uses

• Medical: MRI machines, X-rays, PET imaging

• Aviation and Defense: Precision instruments and defense equipment

• Electronics: Smartphones, hard drives, consumer electronics

• Automobiles: Electric vehicle motors and components

• Others: Jewelry, consumer goods

Global Supply Chain

• Dominated by China, which controls about 90% of processing capacity, making the supply chain vulnerable to geopolitical and export restrictions.

Context:

• Recently, the Union Home Minister and Minister of Cooperation inaugurated a two-day workshop on VVP in New Delhi.

• The event was organized by the Border Management Division of the Ministry of Home Affairs.

Type:
Centrally Sponsored Scheme (implemented from 2022-23 to 2025-26)

Objective:

• Comprehensive development of 2,967 villages in 46 blocks across 19 districts along the northern border.

• Focus states/UT: Arunachal Pradesh, Himachal Pradesh, Sikkim, Uttarakhand, and Ladakh.

• Encourage residents to stay in their native border villages and reverse outmigration.

• Improve border security by strengthening the socio-economic fabric of these areas.

Key Focus Areas:

• Infrastructure Development:

  • Road connectivity to previously unconnected villages

  • Housing and village infrastructure

  • Energy access, including renewable energy solutions

  • TV and telecom connectivity

• Livelihood Generation:

  • Promotion of tourism and cultural heritage

  • Skill development and entrepreneurship

  • Development of cooperative societies

  • Agriculture/horticulture support and cultivation of medicinal plants/herbs

Implementation Approach:

• Vibrant Village Action Plans prepared by district administrations with Gram Panchayat support.

• Ensures 100% saturation of central and state schemes in target villages.

• No overlap with the Border Area Development Programme (BADP) to avoid redundancy.

Vibrant Villages Programme-II (VVP-II)

• Type: Central Sector Scheme (100% funded by the Centre)

• Approved: April 2025 by the Union Cabinet

• Total Outlay: ₹6,839 crore

• Vision: Part of the broader vision of Viksit Bharat@2047 aiming for ‘Safe, Secured & Vibrant land borders’

Coverage:

• Focuses on strategic villages located in blocks abutting international land borders (ILBs) other than the northern border already covered under VVP-I.

• States/UTs included:
  Arunachal Pradesh, Assam, Bihar, Gujarat, Jammu & Kashmir (UT), Ladakh (UT), Manipur, Meghalaya, Mizoram, Nagaland, Punjab, Rajasthan, Sikkim, Tripura, Uttarakhand, Uttar Pradesh, and West Bengal.

• Timeline: To be implemented till FY 2028-29.

Objectives:

• Comprehensive development of border villages beyond the northern border.

• Make border villages self-reliant and vibrant.

• Continuation and expansion of the transformational goals of VVP-I.

Both VVP-I and VVP-II together aim to strengthen India’s border areas through infrastructure, livelihood opportunities, and enhanced security, supporting the vision of a developed and secure India by 2047.