Daily Current Affairs for IAS PCS (UPSC CSE)

Stay updated with the latest Daily current affairs for IAS PCS (UPSC CSE) preparation. Our blog covers detailed analyses of national and international events, government schemes, economic policies, environmental issues, cultural heritage, and global relations. We provide crisp insights, MCQs, and mains practice questions to enhance your preparation strategy. Whether it’s daily news, PIB summaries, or editorial breakdowns, our content is designed for effective learning.

Friday, February 21, 2025

Maldives: Economic Challenges and Geopolitical Significance

Context

The International Monetary Fund (IMF) has issued a warning to the Maldives, stressing the urgent need for stronger fiscal consolidation to address the nation's rising economic challenges. The country faces a growing fiscal deficit and increasing reliance on external borrowing, making financial stability a key concern for policymakers.

About the Maldives

Geographical Location & Features

Location: The Maldives is an island nation located in the Indian Ocean, southwest of Sri Lanka and India, approximately 750 km from the Asian mainland.
Capital: The capital city, Malé, is the political, economic, and cultural hub of the Maldives. Historically known as the "King’s Island", it has played a central role in governance.
Composition: The Maldives consists of 1,190 coral islands grouped into 26 atolls arranged in a double chain.
Unique Island: Addu Atoll is the only Maldivian atoll that extends south of the equator, making it geographically distinct from the rest of the country.
Natural Channels: The islands are separated by oceanic channels, locally termed “Kandu”, which facilitate marine biodiversity and oceanic flow.
Topography: The Maldives is one of the flattest countries in the world, with no rivers or mountains. Some islands, like Hithadhoo (Addu Atoll), feature small sand dunes.

Economic Challenges & IMF Warning

The Maldives’ economy is heavily dependent on tourism, contributing to over 30% of its GDP. However, the IMF has raised concerns about:

Rising National Debt: High borrowing for infrastructure projects has led to fiscal imbalances.
Budget Deficit: Increased government spending without sufficient revenue generation is widening the fiscal gap.
Tourism Dependence: A slowdown in global travel due to geopolitical tensions and climate change could significantly impact revenue.
Need for Fiscal Consolidation: The Maldives must diversify its economy, reduce reliance on external borrowing, and implement stronger financial regulations to ensure long-term sustainability.

Strategic Importance & India's Relations with the Maldives

India-Maldives Military Exercises

India and the Maldives engage in multiple defense collaborations to ensure regional maritime security:

Exercise Ekuverin – Bilateral military training exercise to strengthen defense cooperation.
Exercise Dosti – A trilateral coast guard exercise involving India, the Maldives, and Sri Lanka for maritime security.
Exercise Ekatha – Focuses on anti-piracy and counter-terrorism operations.
Operation Shield – A security partnership aimed at disaster response and humanitarian assistance.

Geopolitical Importance

The Maldives’ location in the Indian Ocean makes it crucial for regional trade routes and maritime security.
India and China are competing for strategic influence in the region, with India supporting infrastructure projects and defense partnerships.

Cultural & Linguistic Aspects

Official Language: Dhivehi is the national language, spoken exclusively by the Maldivian people.
Equatorial Presence: The Equator passes through the Maldives, with Ihavandhippolhu Atoll in the north and Addu Atoll in the south marking the country’s boundaries.

Way Forward for the Maldives

Economic Diversification – Reducing dependency on tourism and investing in fisheries, renewable energy, and digital infrastructure.
Debt Management – Implementing strict fiscal policies to control borrowing and ensure sustainable economic growth.
Maritime Security Partnerships – Strengthening defense collaborations with regional allies like India, Sri Lanka, and the US.
Climate Adaptation – Developing policies to tackle rising sea levels, which pose an existential threat to the Maldives.
Investment in Infrastructure – Promoting sustainable development projects to boost economic growth without environmental degradation.

Conclusion

The Maldives faces economic and geopolitical challenges, but strategic reforms in fiscal management, economic diversification, and regional cooperation can ensure long-term stability. Strengthening partnerships with India and other global players will be crucial in maintaining economic resilience and security in the Indian Ocean region.

MCQs for UPSC CSE

Q1: What is the primary economic sector of the Maldives?

a) Agriculture
b) Fisheries
c) Tourism
d) Manufacturing

Answer: c) Tourism

Q2: The Maldives shares maritime borders with which of the following countries?

India
Sri Lanka
Bangladesh
China

a) 1 and 2 only
b) 2 and 3 only
c) 1, 2, and 4
d) 1, 3, and 4

Answer: a) 1 and 2 only

Q3: Which military exercise is a trilateral maritime security cooperation involving India, Sri Lanka, and the Maldives?

a) Exercise Ekuverin
b) Exercise Dosti
c) Exercise Ekatha
d) Operation Shield

Answer: b) Exercise Dosti

Q4: Which Maldivian atoll extends south of the Equator?

a) Ihavandhippolhu Atoll
b) Thiladhunmathi Atoll
c) Addu Atoll
d) Malé Atoll

Answer: c) Addu Atoll

Q5: Which international organization recently issued an economic warning to the Maldives?

a) World Bank
b) International Monetary Fund (IMF)
c) United Nations Development Programme (UNDP)
d) Asian Development Bank (ADB)

Answer: b) International Monetary Fund (IMF)

Mains Question

“The Maldives’ economic and geopolitical position makes it a crucial player in the Indian Ocean. Discuss the challenges faced by the Maldives in economic management and regional security and suggest ways to strengthen its partnership with India.” (250 words)

Manikaran: A Geothermal Marvel

Introduction

Manikaran, located in the Parvati Valley of Kullu district, Himachal Pradesh, is a renowned pilgrimage site for Hindus and Sikhs. Known for its hot springs, scenic beauty, and religious significance, Manikaran has recently become the center of controversy due to a proposal to transfer its hot spring water to Kasol for tourism development. This move has sparked protests from local communities and religious groups, raising concerns over environmental impact and spiritual sanctity.

Historical and Religious Significance of Manikaran

Manikaran is considered sacred in both Hinduism and Sikhism, with rich mythological and historical roots:

Hindu Beliefs

Hindu scriptures suggest that Manu, the first man according to Hindu mythology, recreated human life here after the Great Flood.
The region is associated with Lord Shiva and Goddess Parvati, who are believed to have meditated in the valley.
The hot springs are considered divine and are used for cooking food in temples, believed to be blessed with spiritual energy.

Sikh Significance

Guru Nanak, the first Sikh Guru, visited Manikaran during his third Udasi (spiritual journey) in 1574 Bikrami.
According to Sikh lore, Guru Nanak's companion Bhai Mardana lost food grains in the river, and Guru Nanak miraculously created hot springs, allowing the grains to be cooked without fire.
The Gurudwara Manikaran Sahib, established in his honor, remains a major pilgrimage center.

Geographical Features of Manikaran

Manikaran is nestled in the Parvati Valley, surrounded by Himalayan mountains. The area is known for:

Hot Springs: Geothermal springs with temperatures ranging between 65-80°C, rich in sulfur and known for their healing properties.
Mountain Passes:
- Pin Parvati Pass (connects to Spiti Valley).
- Sara Umga La Pass (leads to Lahaul).
- Debsa Pass (discovered in 1995).
Scenic Beauty: Snow-capped peaks, lush greenery, and river valleys make it a popular tourist destination.

About the Parvati River

The Parvati River, a tributary of the Beas River, originates from the Man Talai Glacier near Pin Parvati Pass. Key features include:

Flows entirely through Himachal Pradesh, following a north-northwest to west-southwest trajectory.
Joins the Beas River at Bhuntar, playing a crucial role in the region's ecosystem and hydroelectric projects.
Supports agriculture, tourism, and local livelihoods in the Parvati Valley.

Current Controversy: The Hot Spring Water Transfer Proposal

The government has proposed diverting Manikaran’s hot spring water to Kasol for a tourism project.
Local Hindu and Sikh communities oppose this move, citing religious sanctity and environmental concerns.
Activists argue that altering the natural ecosystem could lead to long-term damage to Manikaran’s geothermal balance.

Conclusion

Manikaran stands as a unique blend of spirituality, nature, and history. While tourism development is essential for economic growth, it must be balanced with ecological sustainability and cultural preservation. The government must engage with local stakeholders to ensure that the sacred and natural heritage of Manikaran remains intact for future generations.

MCQs for UPSC CSE

1. What is the primary religious significance of Manikaran for Sikhs?

A) It is believed to be the birthplace of Guru Nanak.
B) Guru Nanak performed a miracle by creating hot springs.
C) Guru Gobind Singh established the first Gurudwara here.
D) It was the first capital of the Sikh Empire.
Answer: B) Guru Nanak performed a miracle by creating hot springs.

2. Which river flows through Manikaran and is a tributary of the Beas River?

A) Ravi River
B) Sutlej River
C) Parvati River
D) Chenab River
Answer: C) Parvati River

3. What is the origin of the Parvati River?

A) Rohtang Pass
B) Man Talai Glacier
C) Pir Panjal Range
D) Kinner Kailash
Answer: B) Man Talai Glacier

4. Which mountain pass connects the Parvati Valley to Spiti Valley?

A) Nathu La Pass
B) Pin Parvati Pass
C) Zojila Pass
D) Jalori Pass
Answer: B) Pin Parvati Pass

5. Why is the proposed diversion of Manikaran’s hot spring water to Kasol controversial?

A) It affects the region’s hydroelectric projects.
B) It is feared to impact religious sanctity and environmental balance.
C) The project is expected to decrease tourism.
D) The water temperature is too high for commercial use.
Answer: B) It is feared to impact religious sanctity and environmental balance.

Mains Question

Q: Discuss the religious, geographical, and ecological significance of Manikaran. Evaluate the potential impact of the proposed hot spring water transfer to Kasol on the region’s socio-cultural and environmental balance. (250 words)

Kalyani Chalukyas

Introduction

The Kalyani Chalukyas, also known as the Western Chalukyas, ruled over the Deccan Plateau between the 10th and 12th centuries CE. Recently, archaeologists discovered 900-year-old Kannada inscriptions from this era in Kankal village, Vikarabad district, Telangana. These inscriptions, dating 1129-1132 CE, highlight temple construction and land donations during the reign of Emperor Someswara III Bhulokamalladeva.

Who Were the Kalyani Chalukyas?

The Kalyani Chalukyas were a major dynasty that controlled present-day Karnataka, Maharashtra, Andhra Pradesh, and Telangana. They succeeded the Rashtrakutas and were instrumental in shaping Deccan culture, administration, and temple architecture.

Dynastic Lineage and Origin

The Chalukyan dynasty is divided into three main branches:

Chalukyas of Badami (6th-8th century CE)
Eastern Chalukyas of Vengi (7th-12th century CE)
Western Chalukyas (Kalyani Chalukyas) (10th-12th century CE)

The Kalyani Chalukya dynasty was founded by Tailapa II (973 CE) after he defeated the Rashtrakutas. They made Kalyani (modern-day Bidar, Karnataka) their capital, from which they ruled over a vast region.

Major Rulers of Kalyani Chalukyas

Vikramaditya VI (1076-1126 CE) –
- Greatest ruler of the dynasty.
- Introduced the Chalukya Vikrama era in 1076 CE.
- Expanded the empire through military conquests.
Someswara I & Someswara III –
- Known for territorial expansion and cultural growth.
- Someswara III authored Manasollasa, an encyclopedia on various topics.
Jayasimha II –
- Stabilized the empire after Rashtrakuta decline.
- Strengthened administrative policies.

Religious & Cultural Contributions

The Kalyani Chalukyas were patrons of Shaivism, Vaishnavism, and Jainism. They contributed significantly to temple-building and cultural developments.

Architectural Contributions

The Kalyani Chalukyas developed the Vesara (Karnata-Dravida) style of temple architecture. Their architectural style is seen in:

Mahadeva Temple (Itagi, Koppal, Karnataka)
- Known as the “Emperor among temples”.
- Intricate carvings, symmetrical design, and grandiosity.
Kasivisvesvara Temple (Lakkundi, Gadag, Karnataka)
- A fine example of symmetrical Western Chalukya architecture.
Sarasvati Temple (Gadag, Karnataka)
- Showcases elaborate stone carvings and stepped wells.
Dodda Basappa Temple (Dambal, Gadag, Karnataka)
- Unique star-shaped plan and intricate sculptures.

Their temples and inscriptions significantly influenced later architectural developments, including Vijayanagara and Hoysala styles.

Recent Archaeological Discovery: 900-Year-Old Inscriptions

Key Highlights of the Inscriptions Found in Telangana:

Date: 1129-1132 CE
Location: Kankal village, Vikarabad district, Telangana
Language: Kannada
Significance:
- Mentions temple construction and land grants during the reign of Someswara III Bhulokamalladeva.
- Provides insights into social, political, and religious life during the Western Chalukya period.

Decline of Kalyani Chalukyas

The decline of the dynasty began in the late 12th century due to:

Frequent Wars – Continuous battles weakened the kingdom.
Rise of Hoysalas & Yadavas – These emerging powers eroded Chalukyan influence.
Internal Conflicts – Struggles among regional feudal lords led to instability.

By the end of the 12th century, the Hoysalas, Seuna Yadavas, and Kalachuris took over their territories, marking the end of Kalyani Chalukya rule.

Conclusion

The Kalyani Chalukyas played a crucial role in shaping medieval Deccan history. Their contributions to art, architecture, and literature left a lasting legacy. The recent discovery of 900-year-old inscriptions in Telangana highlights their continued relevance in historical research.

MCQs on Kalyani Chalukyas

1. Who founded the Kalyani Chalukya dynasty?

A) Vikramaditya VI
B) Tailapa II
C) Someswara III
D) Jayasimha II
Answer: B) Tailapa II

2. Which temple is known as the “Emperor among temples”?

A) Sarasvati Temple, Gadag
B) Kasivisvesvara Temple, Lakkundi
C) Mahadeva Temple, Itagi
D) Dodda Basappa Temple, Dambal
Answer: C) Mahadeva Temple, Itagi

3. What was the capital of the Kalyani Chalukyas?

A) Badami
B) Lakkundi
C) Kalyani (modern Bidar)
D) Pattadakal
Answer: C) Kalyani (modern Bidar)

4. Which of the following rulers introduced the Chalukya Vikrama era?

A) Someswara I
B) Vikramaditya VI
C) Jayasimha II
D) Pulakeshin II
Answer: B) Vikramaditya VI

5. The recently discovered 900-year-old inscriptions in Telangana belong to which period?

A) Eastern Chalukyas
B) Rashtrakutas
C) Kalyani Chalukyas
D) Vijayanagara Empire
Answer: C) Kalyani Chalukyas

Mains Question:

Q: Discuss the contributions of the Kalyani Chalukyas to temple architecture and administration. How did their rule influence medieval Deccan politics? (250 words)

Asia Economic Dialogue (AED) 2025

Source: DD News

Context

The 9th edition of the Asia Economic Dialogue (AED) 2025 is scheduled to take place in Pune, Maharashtra, from February 20 to February 22, 2025. This high-profile geoeconomic conference will serve as a crucial platform for discussing regional and global economic challenges, fostering cooperation, and addressing emerging issues in the international economy.

What is the Asia Economic Dialogue (AED)?

The Asia Economic Dialogue (AED) is an annual international conference that brings together policymakers, economists, business leaders, and academicians to discuss Asia's economic landscape, policy challenges, and global market trends.

Host & Organizers

Hosted by: Ministry of External Affairs (MEA), Government of India
Co-organized by: Pune International Centre (PIC), a leading think tank working on policy research and international relations.

Key Objectives

Facilitate Policy Dialogue: Address economic challenges, global financial risks, and trade policies impacting Asia.
Strengthen Global Economic Cooperation: Enhance India’s role in shaping global economic discussions and trade frameworks.
Discuss Emerging Economic Challenges: Topics such as artificial intelligence (AI), cybersecurity, climate change, and digital trade are central to AED 2025.
Promote Economic Resilience: Share strategies for recovery from financial crises, trade disruptions, and global economic fragmentation.

Theme of AED 2025

The theme for Asia Economic Dialogue 2025 is:

“Economic Resilience and Resurgence in an Era of Fragmentation”

This theme reflects the post-pandemic economic recovery, challenges posed by global trade wars, and the need for strategic collaborations in an era of geopolitical uncertainties.

Significance of AED 2025

1. High-Level Participation

AED 2025 will host ministers, policymakers, and industry leaders from Japan, Australia, Egypt, Indonesia, Singapore, South Africa, Sri Lanka, the Netherlands, and other global economic powerhouses.

2. Focus on Global Economic Issues

AED 2025 will focus on:

Trade and Economic Resilience: Strategies for boosting economic growth, digital trade, and cross-border investments.
Artificial Intelligence (AI) & Cybersecurity: Impact of AI-driven economies and the challenges of data security in global trade.
African Economic Transformation: Addressing economic opportunities and investment potential in Africa.
Micro, Small, and Medium Enterprises (MSMEs): The role of MSMEs in global supply chains and digital trade.
Climate Change & Blue Economy: Promoting sustainable economic models and ocean-based economic opportunities.
The International Monetary System: Discussing reforms in global financial institutions and the role of digital currencies.

3. Strengthening India’s Global Economic Leadership

AED 2025 positions India as a strategic economic player in shaping Asia’s trade policies, digital economy, and financial systems.
Enhances India’s diplomatic and economic ties with key Asian and Western economies.
Strengthens India’s leadership in digital trade, AI governance, and sustainable finance.

4. Blueprint for Economic Recovery

AED 2025 will provide actionable economic strategies to tackle:

Global trade fragmentation
Financial instability
Supply chain disruptions
Regulatory challenges in digital trade

Challenges in Asia’s Economic Landscape

1. Economic Fragmentation

U.S.-China trade tensions and global sanctions have disrupted supply chains and financial markets.
Regional trade agreements such as RCEP and Indo-Pacific Economic Framework (IPEF) need policy coherence.

2. Technology and Cybersecurity Risks

AI-driven economies require new regulations on data governance, digital trade, and cybersecurity frameworks.
Rising cyber threats pose risks to financial institutions and trade networks.

3. Climate and Sustainable Development

Climate-related economic risks such as extreme weather events impact agriculture, infrastructure, and energy security.
The Blue Economy is an emerging focus area for sustainable maritime trade and fisheries management.

4. MSME Growth Barriers

Micro, Small, and Medium Enterprises (MSMEs) struggle with access to finance, digital transformation, and global trade competitiveness.
AED 2025 will emphasize financial inclusion and digital tools to empower MSMEs.

Way Forward: India’s Role in Economic Resilience

1. Strengthening Trade Alliances

India must leverage AED 2025 to enhance its role in regional and global trade agreements.
Strengthening economic ties with Africa, Southeast Asia, and European markets is critical.

2. Promoting AI & Digital Economy

India should lead AI governance frameworks to regulate digital trade, cybersecurity, and data sovereignty.
Investment in AI-driven startups will boost India’s digital economy.

3. Climate Finance & Sustainable Investments

India should focus on climate financing mechanisms such as green bonds and carbon credit markets.
Developing the Blue Economy through sustainable fisheries, marine tourism, and ocean-based industries is vital.

4. MSME Development & Financial Inclusion

AED 2025 should emphasize access to capital for MSMEs through digital lending platforms.
Promoting cross-border MSME trade will boost India’s global supply chain integration.

Conclusion

The Asia Economic Dialogue (AED) 2025 is a critical event for shaping Asia’s economic future in the face of global challenges. By fostering economic resilience, promoting digital innovation, and strengthening trade alliances, India can position itself as a key leader in global economic policymaking.

As the world navigates through an era of economic uncertainty, trade disruptions, and technological transformations, AED 2025 will serve as a strategic platform for designing policies that drive inclusive and sustainable growth.

UPSC Practice Questions

Prelims-Based Multiple Choice Questions (MCQs)

1. The Asia Economic Dialogue (AED) is organized by:
a) Reserve Bank of India
b) Ministry of Finance
c) Ministry of External Affairs (MEA) & Pune International Centre (PIC)
d) World Bank

Answer: c) Ministry of External Affairs (MEA) & Pune International Centre (PIC)

2. What is the theme of Asia Economic Dialogue (AED) 2025?
a) "Future of Trade & Technology"
b) "Economic Resilience and Resurgence in an Era of Fragmentation"
c) "Financial Inclusion and Global Growth"
d) "Sustainable Finance & MSME Development"

Answer: b) "Economic Resilience and Resurgence in an Era of Fragmentation"

3. Which sector is a key focus in AED 2025?
a) Cryptocurrency Regulation
b) AI & Cybersecurity
c) Space Exploration
d) Traditional Handicrafts

Answer: b) AI & Cybersecurity

Mains Practice Question

"Economic resilience is crucial for sustaining Asia’s growth in a fragmented global economy." Discuss the significance of the Asia Economic Dialogue (AED) in shaping India’s economic policies and trade strategies. (250 words)

Microsoft Majorana 1

Introduction

Quantum computing is set to revolutionize industries by solving complex problems far beyond the reach of classical computers. Microsoft has taken a significant leap forward with the launch of Majorana 1, its first quantum computing chip. This innovative chip uses Majorana particles and topoconductors to enhance stability, scalability, and efficiency, addressing some of the biggest challenges in quantum computing.

What is Majorana 1?

Majorana 1 is a quantum computing chip developed by Microsoft, designed to minimize computational errors and improve the stability of quantum processors. Unlike traditional quantum chips, which suffer from decoherence and instability, Majorana 1 utilizes Majorana fermions, exotic quantum states that enhance fault tolerance.

Key Features of Majorana 1

Error-Resistant Qubits: Uses Majorana particles to reduce errors in quantum calculations.
Topoconductors: A new class of materials that stabilize quantum information.
Scalability: Can scale up to one million qubits, enabling practical quantum applications.
Faster Problem-Solving: Capable of handling complex computations exponentially faster than classical computers.
Industry Applications: Can revolutionize drug discovery, cybersecurity, AI, and material science.

How Does Majorana 1 Work?

Majorana 1 leverages topological superconductors (topoconductors) to create highly stable quantum states. These materials allow qubits to store and process information with minimal loss.

Technical Innovations

Majorana Particles: Special quantum states that reduce error rates.
Topological Superconductors: Provide resistance-free current flow, ensuring better qubit stability.
Engineered Nanowires: Trap and manipulate quantum information efficiently.
Compact Qubit Design: Qubits are 1/100th of a millimeter, making the chip highly compact and efficient.

Why Majorana 1 is a Game-Changer

Enhanced Stability: Overcomes the challenge of quantum decoherence, improving performance.
Faster Computation: Enables quantum processors to solve problems that classical computers would take centuries to complete.
Global Quantum Leadership: Strengthens Microsoft's position in the race against Google, IBM, and other quantum computing giants.
Potential for AI & Cybersecurity: Can be used for AI training, cryptographic security, and material simulation.

About Topoconductors: The Foundation of Majorana 1

What are Topoconductors?
Topoconductors are a revolutionary class of materials that exhibit topological superconductivity, allowing them to support Majorana fermions. These materials are crucial in developing error-resistant qubits.

Key Advantages of Topoconductors

Error Resistance: Significantly reduces computational errors.
Quantum Stability: Protects qubits from environmental disturbances.
Scalability: Makes it possible to create large-scale quantum processors.
Compact and Efficient: Qubit sizes are minimized, increasing processor efficiency.

Significance of Majorana 1 in Quantum Computing

Boosts Global Quantum Research: Contributes to the development of real-world quantum applications.
Strengthens Cybersecurity: Quantum encryption could revolutionize data protection.
Accelerates Scientific Discoveries: Helps in simulating complex molecules for drug discovery.
Energy Optimization: Could revolutionize energy grid optimization and climate modeling.

Challenges and Future Prospects

While Majorana 1 is a significant step forward, quantum computing still faces:

High Costs: Developing quantum hardware remains expensive.
Limited Practical Applications: Large-scale commercial use is still in its infancy.
Competition: Google, IBM, and China’s quantum research teams are racing to build the first fully operational quantum computer.

Conclusion

Microsoft’s Majorana 1 is a groundbreaking achievement that brings us closer to scalable, error-resistant quantum computing. By harnessing Majorana particles and topoconductors, it lays the foundation for a future where quantum processors can solve problems beyond the capabilities of today’s computers.

UPSC CSE: Multiple Choice Questions (MCQs)

What is the key advantage of Majorana 1 over traditional quantum chips?
a) Uses classical bits instead of qubits
b) Utilizes Majorana particles for improved stability
c) Does not require superconductors
d) Works at room temperature
Answer: b) Utilizes Majorana particles for improved stability
What are topoconductors used for in Majorana 1?
a) They replace superconductors in classical computing
b) They create stable and scalable qubits
c) They eliminate the need for quantum error correction
d) They are used for cooling quantum chips
Answer: b) They create stable and scalable qubits
Which organization validated Microsoft’s Majorana 1 chip?
a) NASA
b) DARPA
c) ISRO
d) CERN
Answer: b) DARPA
Which industry is expected to benefit the most from Majorana 1?
a) Textile Industry
b) Food Processing
c) Cybersecurity and AI
d) Construction
Answer: c) Cybersecurity and AI
Which of the following best describes the function of Majorana fermions?
a) They improve power efficiency in classical computers
b) They help reduce computational errors in quantum processors
c) They eliminate the need for superconductors
d) They are used for traditional binary computation
Answer: b) They help reduce computational errors in quantum processors

UPSC CSE: Mains Question

Q. Discuss the significance of Microsoft’s Majorana 1 chip in advancing quantum computing technology. How does the use of Majorana particles and topoconductors enhance stability and scalability? What are the potential real-world applications and challenges of quantum computing in the future?

Dinesh Khara Committee

Introduction

The Insurance Regulatory and Development Authority of India (IRDAI) has formed a high-powered committee under the leadership of former SBI Chairman Dinesh Khara. The primary objective of this committee is to review and modernize the Insurance Act, 1938 to align with contemporary market needs.

This move is expected to bring major reforms in India's insurance sector, including policyholder protection, foreign direct investment (FDI) changes, and the introduction of composite insurance companies.

Why Was the Dinesh Khara Committee Established?

The insurance sector in India has grown significantly in recent years, yet several legal and regulatory bottlenecks persist. To address these challenges, the Dinesh Khara Committee has been set up to:

Key Objectives of the Committee

Review & Modernize the Insurance Act, 1938
- Identify outdated provisions that need amendments.
- Propose updates to meet evolving global insurance standards.
Examine 100% Foreign Direct Investment (FDI) in Insurance
- Assess whether allowing full FDI can help attract global investments.
- Study potential risks and benefits associated with higher FDI.
Evaluate the Introduction of Composite Insurance Companies
- Consider permitting one company to offer life, non-life, and health insurance together.
- Enhance market competition and consumer choices.
Strengthen Policyholder Protection Measures
- Improve transparency in insurance claim settlements.
- Ensure policyholder-friendly regulations to avoid exploitation.
Increase Insurance Penetration & Financial Inclusion
- Suggest measures to make insurance accessible to rural populations.
- Focus on digital transformation in the insurance sector.
Revenue Retention & Legislative Recommendations
- Ensure that revenue generated in India remains within the domestic economy.
- Propose amendments to the Union Finance Ministry for legislative changes.

Understanding IRDAI: India's Insurance Regulator

The Insurance Regulatory and Development Authority of India (IRDAI) is the apex body regulating the insurance sector in India. It ensures financial stability, policyholder protection, and compliance with legal provisions.

IRDAI Overview

Aspect	Details
Established	1999 under an Act of Parliament
Became Operational	2000 (when India opened its insurance market to private players)
Headquarters	Hyderabad, Telangana
Ministry	Ministry of Finance
Structure	10-member body (1 Chairman, 5 Full-time Members, 4 Part-time Members)

Role & Functions of IRDAI

1. Regulating the Insurance Industry

Ensures that insurance companies operate within legal guidelines.
Prevents fraudulent practices and protects policyholders’ rights.

2. Protecting Policyholders’ Interests

Ensures fair treatment for customers.
Oversees claim settlement transparency and dispute resolution.

3. Supervising Insurance Providers

Monitors companies to prevent unfair market practices.
Ensures compliance with FDI regulations in insurance.

4. Facilitating Market Growth

Encourages foreign investment while maintaining market discipline.
Introduces policies that help in expanding insurance penetration.

5. Strengthening Regulatory Framework

Ensures adherence to the Insurance Act, 1938 and other laws.
Regularly updates rules to align with global standards.

Potential Impact of the Dinesh Khara Committee’s Recommendations

1. Boost in Foreign Investment

If 100% FDI is allowed, it will increase capital flow into India's insurance sector.
This can lead to better insurance products, innovation, and competition.

2. Improved Consumer Experience

Policyholder rights will be better protected through transparency and accountability measures.
Faster claim settlement processes can be introduced.

3. Increased Insurance Penetration

More people, especially in rural areas, will gain access to insurance.
Digital and AI-driven solutions can make insurance affordable & accessible.

4. Introduction of Composite Insurance Companies

One company can offer life, health, and non-life insurance under a single entity.
Consumers will benefit from simplified policies and better choices.

5. Strengthened Economy

More insurance business will help in revenue retention within India.
A well-regulated industry will enhance India’s financial stability.

Challenges in Reforming the Insurance Sector

Regulatory Resistance
- Some stakeholders may oppose full FDI due to fears of foreign control.
Consumer Awareness & Financial Literacy
- Many Indians are still unaware of their insurance rights.
Rural Accessibility
- Insurance products must be tailored for low-income groups.
Implementation of Composite Insurance
- Merging life and non-life insurers requires new legal frameworks.
Policyholder Protection Enforcement
- Ensuring that companies follow fair practices remains a challenge.

Way Forward: Strengthening India's Insurance Sector

Policyholder-Centric Reforms
- Ensure transparent claim processes and stricter penalties for violations.
Encouraging Digital Insurance
- Leverage AI, machine learning, and blockchain for fraud detection and automation.
Balanced FDI Approach
- Allow foreign investment while safeguarding Indian interests.
Wider Public Awareness Campaigns
- Conduct financial literacy programs to educate people on insurance benefits.
Legislative Action
- Amend the Insurance Act, 1938 based on the Dinesh Khara Committee’s recommendations.

MCQs for UPSC CSE

What is the primary objective of the Dinesh Khara Committee?
a) To review India’s trade policies
b) To modernize the Insurance Act, 1938
c) To regulate stock market investments
d) To improve pension fund management
Answer: (b) To modernize the Insurance Act, 1938
Which organization regulates India’s insurance sector?
a) SEBI
b) RBI
c) IRDAI
d) NITI Aayog
Answer: (c) IRDAI
Where is the headquarters of IRDAI located?
a) New Delhi
b) Hyderabad
c) Mumbai
d) Bengaluru
Answer: (b) Hyderabad
Which ministry oversees the functioning of IRDAI?
a) Ministry of Commerce
b) Ministry of Finance
c) Ministry of Corporate Affairs
d) Ministry of Law and Justice
Answer: (b) Ministry of Finance
What is the main function of IRDAI?
a) Regulating stock exchanges
b) Supervising insurance companies
c) Managing India’s foreign exchange reserves
d) Formulating banking policies
Answer: (b) Supervising insurance companies

Mains Question for UPSC

"The Dinesh Khara Committee aims to modernize India's insurance sector by reviewing the Insurance Act, 1938. Discuss its significance in increasing FDI, consumer protection, and economic stability." (250 words)