30 December 2025 Current Affairs (With PDF)

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Financial Asymmetry in Political Funding in India

Why in News

Ahead of successive electoral cycles, renewed concerns have emerged over transparency and equity in political funding, with evidence suggesting that unequal access to private donations skews electoral competition and entrenches financial dominance of a few parties.

Political Funding Framework in India

1. Individual Donations:

• Permitted under Section 29B of the Representation of the People Act (RPA), 1951.
• Disclosure norm: Donations above ₹20,000 must be reported to the Election Commission of India (ECI) as per transparency guidelines.

2. State / Public Funding:

• Involves financial support from the government to parties or candidates to reduce dependence on private money.
• Forms of State Funding:
  - Direct: Cash assistance for campaign expenditure.
  - Indirect: Subsidised media access, tax exemptions, free public spaces, security, transport, and utilities.

3. Corporate Funding:

• Regulated by Section 182 of the Companies Act, 2013.
• Key conditions: Company must be at least three years old.
  - Donations capped at 7.5% of average net profits of the preceding three years.
  - Contributions must be disclosed in the profit and loss account.
• Corporate political donations were banned (1969–1985) and later re-introduced with safeguards.

Challenges in the Existing Political Funding System

1. Concentration of Political Finance:

• A disproportionate share of funding flows to incumbent or dominant parties, undermining a level electoral playing field.

2. Weak Transparency:

• Disclosure norms are poorly enforced.
• Donor–party linkages often remain opaque, limiting informed public scrutiny.

3. Lack of Internal Party Accountability:

• Most parties lack Enforceable internal democracy, Transparent financial audits, Institutionalised decision-making norms

4. Escalating Election Costs:

• Unlimited party expenditure fuels increasingly professional, media-heavy campaigns, raising barriers for smaller parties.

Electoral Trust Scheme

1. Overview

• Introduced in 2013 as a structured channel for political donations.
• Gained prominence in 2024–25 after the Supreme Court struck down the Electoral Bonds Scheme (2024).

2. Eligibility

• Formation: Any company registered under the Companies Act.
• Donors: Indian citizens, Indian companies, firms, HUFs, or associations of persons residing in India.

3. Dominance of Few Trusts

• Prudent Electoral Trust, Progressive Electoral Trust, and New Democratic Electoral Trust together accounted for 98% of contributions in 2024–25.

Functioning of Electoral Trusts

1. Regulatory Features:

• Renewal: Mandatory every three financial years.
• Beneficiaries: Only parties registered under Section 29A of RPA, 1951.
• Mandatory Disbursement: Minimum 95% of annual receipts must be donated to political parties.
  - Remaining 5% capped for administrative expenses.

2. Disclosure & Oversight:

• PAN mandatory for resident donors; passport number for NRIs.
• Trusts must maintain audited accounts and report of Donors, Recipient parties, Disbursement details to CBDT and ECI.

Recommendations on State Funding of Elections

1. Constituent Assembly (1948):

• Advocated public funding of elections to ensure regulated, economical, and fair contests.

2. Indrajit Gupta Committee (1998):

• Supported state funding to reduce disparities among political parties.

3. Law Commission of India (1999):

• Proposed total state funding, conditional on parties refraining from private donations.

4. Second Administrative Reforms Commission (2008):

• Recommended partial state funding to curb undue financial influence.

Reforms Needed in Political Funding

1. Comprehensive Political Finance Law:

• To ensure equity, transparency, and accountability across parties.

2. Enhanced Disclosure by Electoral Trusts:

• Mandatory public disclosure of donor–party linkages for meaningful citizen oversight.

3. Transparency of Political Parties:

• Bringing political parties under the Right to Information (RTI) Act to strengthen financial and organisational accountability.

India’s Gains from RCEP Without the China Risk

Why in News

Despite opting out of the Regional Comprehensive Economic Partnership (RCEP) in 2019, India has strategically secured many of the agreement’s economic benefits through bilateral and minilateral trade arrangements—without exposing itself to risks arising from China’s market dominance or surrendering policy autonomy.

About RCEP

• Members: 10 ASEAN countries + China, Japan, South Korea, Australia, New Zealand.
• Accounts for nearly 30% of global GDP and population, making it the world’s largest trade bloc.

Why India Withdrew (2019)

India declined to join RCEP “in its present form” due to unresolved concerns:

• Unrestricted Chinese imports, threatening domestic manufacturing.
• Insufficient safeguards for agriculture and MSMEs.
• Weak provisions on services trade and data localisation.
• Risk to economic sovereignty due to uniform tariff commitments.

India’s Alternative Strategy: RCEP Without Formal Membership

1. Shift to Bilateral and Minilateral Trade:

• Instead of multilateral integration, India pursued a targeted FTA-driven strategy.
• Objective: Market access without automatic tariff liberalisation, especially vis-à-vis China.

2. Effective Integration Minus China:

• India now has trade agreements with 14 of the 15 RCEP members, excluding only China.
• This enables India to plug into regional value chains while retaining control over tariffs and trade remedies.

India’s FTA Network with RCEP Members

Key Agreements

• ASEAN–India Trade in Goods Agreement (AITIGA) – Operational since 2010
• Currently under renegotiation to address India’s widening trade deficit.
• India–South Korea CEPA – 2010
• India–Japan CEPA – 2011
• India–Australia ECTA – 2022
• India–New Zealand FTA – Negotiations concluded (December 2025)

Together, the Australia and New Zealand deals complete India’s RCEP-minus-China framework.

Strategic Decoupling from China

1. Avoiding Tariff Shock:

• Staying out of RCEP prevents automatic tariff reductions on Chinese goods, protecting domestic industries from import surges.

2. Alignment with China+1 Strategy:

• India’s approach complements global efforts to diversify supply chains away from China, amid geopolitical and economic uncertainties.

Focus on Trusted and Resilient Supply Chains

• India is part of the Supply Chain Resilience Initiative (SCRI) with Japan and Australia.
• Emphasis on diversification, reliability, and strategic trust.
• These efforts reinforce domestic initiatives such as Production-Linked Incentive (PLI) schemes, aimed at boosting manufacturing and exports.

Limited Engagement with China: APTA Route

• India and China remain members of the Asia-Pacific Trade Agreement (APTA).
• APTA offers selective and limited tariff concessions, far narrower than an FTA.
• This allows India to manage trade exposure while preserving policy flexibility.

India’s Trade Strategy: A Calculated Trade-Off

1. What India Foregoes:

• Formal RCEP benefits such as: Bloc-level dispute resolution & Deep regulatory harmonisation

2. What India Gains:

• Market access through tailored bilateral FTAs.
• Policy autonomy to protect sensitive sectors.
• Geopolitical leverage by avoiding China-centric trade rules.
• Strategic balance between openness and caution.

Green Hydrogen to Reshape India’s Renewable Energy (RE) Sector

Why in News

Over next five years, energy storage and green hydrogen technologies are expected to fundamentally transform India’s renewable energy ecosystem, enabling deep decarbonisation and strengthening energy security.

What is Green Hydrogen?

• Green hydrogen is hydrogen produced using renewable electricity (solar/wind) through electrolysis of water.
• Considered “green” if lifecycle emissions are ≤ 2 kg CO₂e per kg of hydrogen.
• Can also be produced from biomass conversion, provided emissions remain within the same threshold.
• Key advantage: Zero carbon at point of use, unlike grey (natural gas-based) hydrogen.

National Green Hydrogen Mission (NGHM), 2023

Launched as an umbrella programme to build a comprehensive green hydrogen ecosystem.

1. Key Targets:

• 5 Million Metric Tonnes (MMT) of green hydrogen production annually by 2030.
• Hydrogen mobility pilots across 10 routes using 37 fuel-cell & hydrogen-ICE vehicles.
• Position India as a global green hydrogen hub.

2. Four Pillars of the Mission:

• Policy & Regulatory Framework
• Demand Creation
• Research, Development & Innovation
• Enabling Infrastructure & Ecosystem Development

Role of Green Hydrogen in India’s Climate Goals

India aims for Net Zero by 2070, with interim targets:

• 500 GW renewable capacity by 2030
• 50% energy from renewables
• 1 billion tonne reduction in cumulative emissions by 2030
• 45% reduction in emissions intensity of GDP (from 2005 levels)

Green hydrogen helps decarbonise hard-to-abate sectors: steel, fertilisers, refining, shipping, heavy transport.

India’s Renewable Energy Status (2025)

• Total installed capacity: 500.89 GW
• Non-fossil fuel sources: 256.09 GW (~51%)
  - Solar: 127.33 GW
  - Wind: 53.12 GW
• India achieved its COP26 Panchamrit target (50% non-fossil capacity) five years early.

Why Green Hydrogen is a Game Changer

• Enables storage of surplus renewable energy.
• Provides round-the-clock clean energy when coupled with RE + storage.
• Reduces import dependence on fossil fuels.
• Creates new export opportunities in a low-carbon global economy.

Key Challenges

• High Production Cost: Green hydrogen remains significantly costlier than grey hydrogen.
• Infrastructure Deficit: No nationwide hydrogen pipelines; reliance on costly transport modes.
• Technology & Supply Chain Gaps: Limited domestic electrolyser manufacturing → import dependence.
• Grid & Power Integration Issues: Intermittent RE supply lowers electrolyser utilisation.
• Water Scarcity: Electrolysis needs high-purity water, stressing arid regions.
• Financing Constraints: Capital-intensive projects with long gestation periods.
• Global Competition: Competing hubs in Europe, Australia, Middle East.

Government Initiatives & Enablers

1. SIGHT Scheme:

• Strategic Interventions for Green Hydrogen Transition
• Financial incentives (till 2029–30) for electrolyser manufacturing and green hydrogen production.

2. Green Hydrogen Hubs (2025):

• Identified ports: Deendayal Port (Gujarat), V.O. Chidambaranar Port (Tamil Nadu), Paradip Port (Odisha)
• Act as integrated centres for production, consumption, and export.

3. Green Hydrogen Certification Scheme of India (GHCI), 2025:

• Certifies hydrogen as “green” based on full lifecycle emissions.
• Ensures transparency, traceability, and export credibility.
• BEE is the nodal authority for accrediting certification agencies.

4. Strategic Hydrogen Innovation Partnership (SHIP):

• Promotes public–private R&D collaboration.
• Focus on advanced, globally competitive hydrogen technologies.

Move Towards a Unified Anti-Terrorism Squad Framework in India

Why in News

Union Home Minister Amit Shah has advocated the creation of a standardised Anti-Terrorism Squad (ATS) framework across all States to strengthen India’s counter-terrorism preparedness and inter-State coordination.

Background

India’s internal security landscape is evolving rapidly due to the changing methods adopted by terrorist organisations. Fragmented institutional structures across States often limit swift intelligence-sharing and coordinated responses, necessitating a more integrated national approach.

Rationale for a Common ATS Structure

1. Evolving Terror Threats:

• Terror networks increasingly rely on: Encrypted digital communication, Drones and emerging technologies, Cyber tools and online radicalisation platforms
• This demands uniform technological capability and response protocols nationwide.

2. Standardised Capacity Building:

• Common ATS framework would ensure: Uniform training modules and operational drills, Consistent response timelines during terror incidents
• Minimises structural gaps that hostile actors could exploit.

3. Addressing Federal Coordination Gaps:

• Terror-related activities often transcend State boundaries.
• Diverse ATS structures lead to: Delays in intelligence exchange & Operational friction during joint missions
• A common structure can enable seamless inter-State and Centre-State cooperation.

4. Strengthening the National Security Grid:

• A unified ATS system contributes to:
  - A resilient and integrated counter-terrorism architecture
  - Enhanced preparedness for both current and emerging security challenges
• Supports the vision of a future-ready internal security ecosystem.

Magnetic Levitation (Maglev) Technology: Pushing the Frontiers of High-Speed Transport

Why in News

China has achieved a global milestone in magnetic levitation technology by propelling a one-ton superconducting maglev test vehicle from zero to 700 km/h in nearly two seconds on a 400-metre experimental track, setting a new speed benchmark.

What is Magnetic Levitation Technology?

Magnetic Levitation (Maglev) is an advanced transportation technology that enables vehicles to float above a track using magnetic forces, eliminating direct contact and friction.

1. Core Principles:

• Objects are suspended, guided, and propelled using strong magnetic fields.
• Absence of wheel-rail contact allows extremely high speeds and smooth motion.

2. Operating Mechanisms:

• Magnetic Repulsion: Like magnetic poles repel each other, lifting the vehicle.
• Magnetic Attraction: Electromagnets pull the vehicle upward toward the guideway.
• These forces are often combined with electromagnetic propulsion systems for stability and speed control.
   

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