UPSC current affairs · Sunday

Current Affairs, 1 February 2026

7 issues picked from 69 PIB releases · about 2 minutes each · written by UPSC Grade, each fact checked against its PIB release or by a second model

How to readRead “Why in news” and “What it is” for every issue. Open For Prelims or For Mains for the exam you’re preparing for, then Test yourself at the foot of each card. Half the news questions in Prelims are answered from background, not the news itself.

In 60 seconds

Sixteenth Finance Commission. Centre accepts 16th Finance Commission: states' tax share stays 41%; ₹1.4 lakh crore grants.
Fiscal Deficit and Debt-to-GDP Glide Path. Budget 2026-27 targets 4.3% fiscal deficit and debt-to-GDP of 50±1% by 2030-31.
Biopharma SHAKTI. Budget 2026-27 proposes ₹10,000 crore Biopharma SHAKTI to boost domestic biologics and biosimilars production.
Semicon 2.0 (India Semiconductor Mission). Budget 2026-27 launches ISM 2.0 for chip equipment, materials, IP and skills; ECMS outlay raised.
Khelo India Mission. Budget 2026-27 launches Khelo India Mission; Rs 500 crore for sports goods manufacturing; ministry outlay rises.
Income-tax Act, 2025. New Income Tax Act, 2025 takes effect 1 April 2026, with Budget tax tweaks.
Integrated Programme for the Textile Sector. Budget 2026–27 bundles textile support into one five-part programme, plus mega parks and export relief.

Law and statutory body

Sixteenth Finance Commission

GS2 Federalism and Finance CommissionGS3 Public financePrelims and Mains

Why in news: On 1 February 2026, in the Union Budget 2026-27, the Finance Minister said the Government accepted the 16th Finance Commission's advice to keep the states' share of the divisible pool at 41 percent, with ₹1.4 lakh crore as grants for 2026-27.
What it is: The Finance Commission is a constitutional body under Article 280, set up every five years by the President. It recommends how Union tax proceeds are shared between the Centre and states (vertical) and among states (horizontal), and what grants-in-aid states get. The 16th Commission's report covers the period starting 2026-27.

Vertical share: The Government accepted the Commission's recommendation to keep the states' share of devolution at 41 percent.
Report submission: The Commission gave its report to the President on 17 November 2025.
Article 281: Article 281 requires the President to lay the Commission's recommendations, with an explanatory memorandum on action taken, before Parliament.
Article 280: Article 280 provides for the Finance Commission, constituted by the President every five years or earlier. It has a chairman and four other members.
Previous share: The 15th Finance Commission also fixed the states' share at 41 percent (reduced from 42 percent under the 14th, owing to the creation of the Union Territories of J&K and Ladakh).

Don’t confuse with Finance Commission vs NITI Aayog: The Finance Commission is a constitutional body that recommends tax devolution and grants. NITI Aayog is a non-statutory policy think tank.

Don’t confuse with Article 280 vs Article 281: Article 280 creates the Commission; Article 281 requires its recommendations to be laid before Parliament.

Laws, judgments and statutory bodies: 30 Prelims questions since 2013 (what the law says, who chairs, legal basis). In Mains, 44 news-triggered questions, most in GS2, asking for provisions and challenges.

Test yourselfMains

Source: PIB, Ministry of Finance, 1 Feb, 12:40 IST · Release 283137

Issue page →

Worth revising until Prelims 2027: most news questions come within two years of the event.

Economy

Fiscal Deficit and Debt-to-GDP Glide Path

GS3 Fiscal policyPrelims and Mains

Why in news: On 1 February 2026, the Finance Minister presented Union Budget 2026-27 in Parliament. It set the fiscal deficit at 4.3% of GDP and put India on a path to a debt-to-GDP ratio of 50±1% by 2030-31.
What it is: The fiscal deficit is the gap between the Centre's total expenditure and its total receipts excluding borrowings. The government now uses the debt-to-GDP ratio as the main anchor, and the fiscal deficit is the yearly tool to reach it. Annual budget numbers are given as Budget Estimates (BE) and Revised Estimates (RE).

Fiscal deficit 2026-27: The fiscal deficit is estimated at 4.3% of GDP in BE 2026-27.
Debt-to-GDP: Debt is estimated at 55.6% of GDP in BE 2026-27, against 56.1% in RE 2025-26.
Legal basis: The FRBM Act, 2003 is the law that sets fiscal deficit and debt targets for the Centre.

Don’t confuse with Fiscal deficit vs revenue deficit: Fiscal deficit is total spending minus non-debt receipts. Revenue deficit is revenue spending minus revenue receipts.

Don’t confuse with BE vs RE: BE is the estimate for the coming year. RE is the updated estimate for the current year.

Economy terms and data: 42 Prelims questions since 2013, rising in recent years; they test what a term or instrument means. In Mains, 12 news-triggered questions.

Test yourself

Source: PIB, Ministry of Finance, 1 Feb, 12:42 IST · Release 283139

Issue page →

Worth revising until Prelims 2027: most news questions come within two years of the event.

Scheme

Biopharma SHAKTI

GS3 Science and Technology: BiotechnologyGS2 HealthPrelims and Mains

Why in news: On 1 February 2026, the Union Budget 2026-27 proposed Biopharma SHAKTI, a ₹10,000 crore, 5-year strategy to make India a global biopharma manufacturing hub.
What it is: Biopharma SHAKTI stands for Strategy For Healthcare Advancement Through Knowledge, Technology And Innovation. It aims to build an ecosystem for making biologics and biosimilars in India. Biologics are medicines made from living cells, and biosimilars are near-copies of approved biologics.

Outlay and period: Biopharma SHAKTI has an outlay of Rs 10,000 crore over five years, announced in Union Budget 2026-27.
NIPERs: Three new NIPERs are to be set up and seven existing NIPERs upgraded to supply specialised biopharma manpower.
Clinical trial sites: The plan is to develop over 1,000 accredited clinical trial sites across the country.
Regulator capacity: CDSCO is to be strengthened by inducting specialised scientific and technical staff, for faster approvals of complex products.
PRIP: PRIP was launched in 2023 by the Department of Pharmaceuticals with Rs 5,000 crore outlay.
Aim: It builds the ecosystem for domestic production of biologics and biosimilars.
Regional Medical Hubs: A scheme will support States in setting up five Regional Medical Hubs with the private sector, to promote medical tourism.
Allied health professionals: Existing AHP institutions will be upgraded and 100,000 AHPs added over 5 years, covering 10 disciplines.
Caregivers: NSQF-aligned programmes will train multi-skilled caregivers; 1.5 lakh are to be trained in the coming year.
Mental health: A NIMHANS-2 will be set up and the National Mental Health Institutes in Ranchi and Tezpur upgraded as Regional Apex Institutions.

Don’t confuse with Biologics vs biosimilars: Biologics are medicines made from living cells; biosimilars are near-copies of an already approved biologic.

Don’t confuse with NBM vs BioE3 vs Bio-RIDE: NBM (2017) funds biopharma product development via BIRAC; BioE3 is a 2024 policy for biomanufacturing; Bio-RIDE is a 2024 DBT umbrella scheme.

Schemes: 52 Prelims questions since 2013, 10 in Prelims 2026 alone. They test features, the period and who funds it. In Mains, 33 news-triggered questions, mostly GS3.

Test yourself

True or false?

1 of 13

Statements the way Prelims prints them. Say first, then see the fact.

1.Biopharma SHAKTI has an outlay of Rs 10,000 crore over five years.
2.Under the initiative, three new NIPERs are to be established and seven existing ones upgraded.
3.It includes strengthening CDSCO, the drug regulator, by inducting specialised scientific and technical personnel.
4.The National Biopharma Mission is implemented by the Indian Council of Medical Research.
5.The National Biopharma Mission is co-funded by the World Bank.
6.The PRIP scheme is run by the Department of Biotechnology.
7.Biopharma SHAKTI has an outlay of ₹10,000 crore over the next 5 years.
8.Biopharma SHAKTI is meant to build an ecosystem for domestic production of biologics and biosimilars.
9.The Budget proposes a scheme to support States in setting up ten Regional Medical Hubs in partnership with the private sector.
10.The proposed Regional Medical Hubs are to include AYUSH Centres and Medical Value Tourism Facilitation Centres.
11.The Budget proposes to add 1,00,000 allied health professionals over the next 10 years.
12.The WHO Global Traditional Medicine Centre to be upgraded under the Budget proposals is located at Jamnagar.
13.The Budget proposes to upgrade the National Mental Health Institutes at Ranchi and Tezpur as Regional Apex Institutions.

Written by us from the release, not by UPSC; checked by a second model.

Source: PIB, Ministry of Finance, 1 Feb, 13:03 IST · Release 283156

Issue page →

Worth revising until Prelims 2027: most news questions come within two years of the event.

Scheme

Semicon 2.0 (India Semiconductor Mission)

GS3 Science and technologyGS3 EconomyPrelims and Mains

Why in news: In Budget 2026-27, presented on 1 February 2026, the Finance Minister announced India Semiconductor Mission (ISM) 2.0 and raised the ECMS outlay to Rs 40,000 crore.
What it is: The India Semiconductor Mission (ISM) is the programme under MeitY to build a domestic chip ecosystem. ISM 1.0 began in 2021 and backed fabs, ATMP/OSAT units and chip design. ISM 2.0 is the next phase and widens support to materials, machines, research and talent.

Six pillars of ISM 2.0: Design; Machines and Materials; more fabs; ATMP/OSAT industry; R&D; and Talent Development.
ISM 1.0 timeline: Planned as a six-year programme, it met its objectives in four years.
Plants under ISM 1.0: Twelve plants were approved under ISM 1.0, and five have started commercial production.
Expected design companies: The Minister estimated at least 200 chip design companies would emerge under ISM 2.0.
Nodal ministry: ISM sits under the Ministry of Electronics and Information Technology.
Approval and outlay: The Union Cabinet approved Semicon 2.0 on 15 July 2026 with an outlay of Rs 1,27,500 crore.
Semicon 1.0 outlay: Semicon 1.0 was approved in December 2021 with an outlay of Rs 76,000 crore.
Semicon 1.0 units: Twelve units were approved: one silicon fab, one silicon carbide fab, one GaN Micro LED display fab and nine ATMP/OSAT units. Five have begun commercial production.
Concentration of production: Taiwan produces over 60% of global chips and nearly 90% of advanced chips.
Six pillars: Design; Machines and Materials; more Fabs; ATMP/OSAT; R&D; Talent Development.
Nodal agency: ISM invites applications, appraises them, recommends applicants and oversees implementation.
C-DAC role: ISM may implement the design and deployment categories with C-DAC's help.
Duration: Projects generally run up to six years. Applications stay open initially for three years.
Funding and review: MeitY makes budget provisions; a mid-term assessment follows three years of implementation.
Design incentive: Pillar 1 includes a Deployment-Linked Incentive (DLI) for chips, IPs and SoCs.
Outlay: Semicon 2.0 has a total budget outlay of Rs.1,27,500 crore.
ISM 1.0 manufacturing: Twelve manufacturing units were approved with over Rs.1.64 lakh crore investment: one silicon fab, one SiC fab, one GaN Micro LED display fab and nine packaging units.
Commercial production: Micron, Kaynes and CG Semi have started commercial production.
Projects approved: Two new projects, both in Gujarat, were cleared. One is a compound semiconductor fab with ATMP at Dholera; the other is an OSAT unit at Surat.
Crystal Matrix Limited, Dholera: It will make Mini/Micro-LED display modules and offer GaN foundry services, including epitaxy on 6-inch wafers.
Suchi Semicon, Surat: An OSAT facility for discrete semiconductors, with capacity of 1033.20 million chips a year.
ISM tally: Approved projects under ISM now total 12, with cumulative investment of about Rs 1.64 lakh crore.
Design support: Government design infrastructure support covers 315 academic institutions and 104 start-ups.
OSAT meaning: OSAT stands for Outsourced Semiconductor Assembly and Test: firms that package and test chips made by fabs.
Talent target: The 10-year target is to train 85,000 engineers in semiconductor design, and the minister says good progress was made in four years.
EDA tool access: EDA tools backed by firms such as Synopsys, Cadence and Siemens are available in 315 academic institutions.
Fabrication of student chips: Student-designed chips are fabricated and tested at the Semiconductor Laboratory (SCL), Mohali.
Expansion under Semicon 2.0: The programme will grow from 315 to 500 universities.
EDA tools: 350 universities have been given access to EDA tools, used by 65 thousand engineers.
ISM 2.0 aims: It targets production of equipment and materials, design of full-stack Indian IP, and stronger supply chains.

Don’t confuse with Fab vs fabless: A fab makes chips on wafers. A fabless firm only designs chips and uses a foundry to make them.

Don’t confuse with ATMP vs OSAT: ATMP is Assembly, Testing, Marking and Packaging; OSAT is Outsourced Semiconductor Assembly and Test. Both handle the post-fabrication stage.

Don’t confuse with Fab vs ATMP/OSAT: A fab makes the chip on wafers; ATMP/OSAT packages and tests the finished chip.

Don’t confuse with ISM 1.0 vs Semicon 2.0: ISM 1.0 (2021) backed fabs, packaging and design. Semicon 2.0 adds machines, materials, advanced R&D and deeper talent building.

Don’t confuse with Compound vs silicon semiconductors: Compound semiconductors like GaN combine elements and suit power, RF and optoelectronics. Silicon is a single-element material used in most logic chips.

Don’t confuse with ISM vs SCL Mohali: ISM is the national programme under MeitY. SCL Mohali is a government fab laboratory used to make the student chips.

Don’t confuse with C2S vs fab incentives: C2S is about design talent and startups. Fab and ATMP/OSAT subsidies are separate parts of ISM.

Don’t confuse with EDA tools vs tapeout: EDA tools are software used to design chips. Tapeout is the final design submission for fabrication.

Don’t confuse with ISM vs ECMS: ISM backs chip fabs, packaging, design, equipment and materials. ECMS supports electronic components and sub-assemblies manufacturing.

Don’t confuse with ISM vs PLI for electronics: ISM is a semiconductor-specific mission. PLI schemes give production-linked incentives on sales across electronics products.

Schemes: 52 Prelims questions since 2013, 10 in Prelims 2026 alone. They test features, the period and who funds it. In Mains, 33 news-triggered questions, mostly GS3.

Why it matters

Support across the whole value chain can cut import dependence and build strategic resilience in chips.
Design strength and talent can move India from design services to owning chip IP and products.
Cuts import dependence, as India spent about USD 150 billion on chip imports in FY17-FY25.
Builds the full value chain and supports supply chain resilience and strategic autonomy.
Creates high-value jobs and supports strategic sectors such as space and defence.
Strengthens supply-chain resilience and national security in a critical technology.
Covers the full value chain, including equipment, materials and talent, not just fabs.
Can create 50,000-60,000 direct jobs, according to the Minister.
Cuts import dependence and strengthens supply chain resilience and national security.
Builds upstream capacity in materials, machines and design IP, not just assembly.
Supports growth across sectors such as automobiles, telecom, electronics and aerospace.
Adds compound semiconductor and display capability, reducing import dependence in a strategic technology.
Creates skilled jobs and builds a Gujarat cluster at Dholera and Surat.
Builds a skilled design workforce, which is a key gap in India's chip ecosystem.
Open-access EDA tools lower cost for students and startups across the country.
Reduces import dependence in a strategic input for electronics, defence and autos.
Builds jobs and a full chain from design to packaging, and spreads units across states.
Reduces import dependence in chips and strengthens supply chains.
Equipment, materials and IP move India beyond assembly into deeper value chains.

Problems

Fabs need heavy capital, steady power and ultra-pure water, and depend on imported machines and materials.
Only five of twelve approved plants are producing, and the talent trained is below the design target of 85,000.
Chip manufacturing is highly complex, capital-intensive and needs long, steady policy support.
Production is concentrated in a few economies, so India depends on trusted partners for tools and technology.
Only five of twelve approved units were producing by 2026, so execution and talent remain gaps.
Chip fabs need very large capital, water, power and skilled staff.
India depends on imported equipment and materials, and global competition for subsidies is heavy.
Projects take years to deliver, and fiscal support is large.
Fabs need huge capital, water, power and ultra-pure inputs, with long gestation.
India's current nodes (28nm-110nm) lag leading-edge global technology.
Dependence on foreign technology partners and a shortage of skilled engineers.
Chip fabs need heavy capital, water, power and skilled workers, and face global competition.
Dependence on imported materials, equipment and technology persists.
Trained designers may leave for foreign firms, so retention is a risk.
Training must be matched by fabs and industry jobs to be useful.
Fabs need large capital, water, power and scarce skilled talent.
Most approved projects are packaging, and India depends on foreign technology partners.
Fabs need heavy capital, water, power and a mature supplier base.
Shortage of skilled chip designers and process engineers.

Way forward

Localise materials and equipment and keep strong partnerships with trusted countries.
Link research, industry and academia so design talent leads to products and IP.
Sustain long-term funding and speed up approvals and execution of approved units.
Build the machines, materials and talent base while deepening trusted international partnerships.
Link R&D to industry so design work grows into products made in India.
Build equipment and materials suppliers alongside fabs.
Link talent training to industry needs and speed up approvals.
Use the mid-term review to correct design and funding gaps.
Develop advanced nodes through R&D tie-ups with leading centres in India and abroad.
Build supplier clusters for gases, chemicals and equipment alongside fabs.
Align training in universities with industry needs such as clean room and fab skills.
Build the supply chain of materials, gases and equipment through ISM 2.0.
Link design, talent and manufacturing so projects reach commercial scale.
Link academic training with industry internships and local fabs.
Support design startups to turn student chips into products.
Build materials, equipment and talent base, as ISM 2.0 intends.
Speed up project execution and anchor demand through domestic chip design.
Build industry-linked research and training centres with steady funding.
Develop local equipment and materials clusters alongside fabs.

Put in your answer

ISM 1.0 execution record: Five of twelve approved plants are in commercial production, and the first phase ended ahead of schedule.

Semicon 1.0 progress: Twelve units approved with over Rs 1.64 lakh crore investment; five are producing.

Design talent: India employs nearly 20% of the global chip design workforce.

Talent target: India reached its target of 85,000 semiconductor engineers in four years against a 10-year plan; a further one lakh is targeted.

Design by students: Students from Tier-II and Tier-III cities have designed more than 250 chips.

Market share: Close to 10% of the global semiconductor market is expected to be in India in the coming years.

ISM 1.0 investment: Twelve approved manufacturing units carry over Rs.1.64 lakh crore of investment.

Design ecosystem: 24 design projects approved for support; 105 start-ups/MSMEs given EDA tool access.

Talent pipeline: About 68,000 students trained on EDA tools across 315 universities.

ISM scale: 12 approved projects with about Rs 1.64 lakh crore investment show the mission's progress.

Execution status: Two projects have begun commercial shipments from India, and two more are expected to follow soon.

EDA programme scale: Over 1.85 crore hours of EDA tool use recorded; called the world's largest open-access EDA programme.

Jobs demand: As the global industry reaches USD 2 trillion, about 2 million skilled professionals will be needed.

Investment scale: 10 approved projects carry about Rs 1.6 lakh crore of envisaged investment.

ECMS: ECMS has drawn investment commitments at double its target, with outlay now proposed at Rs 40,000 crore.

Test yourself

True or false?

1 of 19

Statements the way Prelims prints them. Say first, then see the fact.

1.Semicon 2.0 was approved by the Union Cabinet in July 2026 with an outlay of Rs 1,27,500 crore.
2.The Semiconductor Laboratory (SCL), which develops flight-grade chips for satellites and launch vehicles, is located in Mohali.
3.Silicon, the most widely used semiconductor material, is obtained from silica found in sand.
4.The India Semiconductor Mission is the nodal agency for Semicon 2.0.
5.ISM may implement the design and deployment categories with the assistance of the Centre for Development of Advanced Computing.
6.Semicon 2.0 will initially accept applications for ten years.
7.The scheme's mid-term assessment will be conducted after five years of implementation.
8.Semicon 2.0 has a total budget outlay of Rs.1,27,500 crore.
9.The India Semiconductor Mission functions under the Ministry of Electronics and Information Technology.
10.The Semicon India Programme has a total outlay of Rs 76,000 crore.
11.Of the 10 projects approved under the programme, 8 are fabs and 2 are packaging units.
12.The India Semiconductor Mission is the nodal agency for appraisal and recommendation of semiconductor projects under the programme.
13.The Tata Electronics fab in Gujarat is being set up in technology partnership with a company from South Korea.
14.The Micron facility in Gujarat is meant for assembly and test of both DRAM and NAND products.
15.The India Semiconductor Mission functions under the Ministry of Commerce and Industry.
16.ISM 2.0 is meant to produce equipment and materials and design full-stack Indian IP.
17.The Electronics Components Manufacturing Scheme was launched in April 2025.
18.The ECMS outlay is proposed to be increased to Rs 40,000 crore.
19.The India Semiconductor Mission is an independent body set up by an Act of Parliament.

Written by us from the release, not by UPSC; checked by a second model.

Source: PIB, Ministry of Electronics & IT, 1 Feb, 14:27 IST · Release 283166

Issue page →

Worth revising until Prelims 2028: most news questions come within two years of the event.

Scheme

Khelo India Mission

GS2 Sports and youth schemesPrelims and Mains

Why in news: On 1 February 2026, the Union Budget 2026-27 announced the launch of a Khelo India Mission to transform the sports sector over the next decade, with Rs 500 crore for sports goods manufacturing.
What it is: Khelo India is the Central government's flagship programme to nurture sports talent and build sports culture, run by the Ministry of Youth Affairs and Sports. The new Mission is meant to give it a decade-long structure covering talent pathways, coaches, sports science, leagues and infrastructure.

Mission focus areas: Five areas: three-level training centres, coach development, sports science and technology, competitions and leagues, and sports infrastructure.
Sports goods initiative: Rs 500 crore is allocated to promoting sports goods manufacturing.
Targets: India aims to be among the Top 10 sporting nations by 2036 and the Top 5 by 2047.
Time horizon: The Mission is meant to transform the sports sector over the next decade.

Don’t confuse with Khelo India Mission vs Khelo India programme: The programme began earlier and nurtured talent; the Mission, announced in Budget 2026-27, is a decade-long framework built on it.

Don’t confuse with BE vs RE: BE is Budget Estimate for the coming year; RE is Revised Estimate for the current year.

Schemes: 52 Prelims questions since 2013, 10 in Prelims 2026 alone. They test features, the period and who funds it. In Mains, 33 news-triggered questions, mostly GS3.

Test yourself

Source: PIB, Ministry of Youth Affairs and Sports, 1 Feb, 17:09 IST · Release 283177

Issue page →

Worth revising until Prelims 2027: most news questions come within two years of the event.

Law and statutory body

Income-tax Act, 2025

GS3 Economy: taxationGS2 LawsPrelims and Mains

Why in news: On 1 February 2026, while presenting Union Budget 2026-27, the Finance Minister said the Income Tax Act, 2025 will come into effect from 1 April 2026. Budget also proposed changes to TCS, buyback tax, STT and MAT.
What it is: The Income-tax Act, 2025 is India's new direct tax law. It rewrites and replaces the Income-tax Act, 1961 in simpler language and a cleaner structure. It is meant to ease compliance and does not change the underlying tax policy.

Act replaced: It replaces the six-decade-old Income-tax Act, 1961.
Passage and assent: Parliament passed the Bill on 12 August 2025. The President gave assent on 21 August 2025.
Rules: The CBDT notified the Income-tax Rules, 2026 on 20 March 2026 to operationalise the Act.
Commencement: The Act came into force on 1 April 2026.
Constitutional basis: Parliament taxes income under Entry 82 of the Union List (taxes on income other than agricultural income). Agricultural income is a State subject.
Who runs the campaign: PRARAMBH is an Income Tax Department outreach run through CBDT, expanded as Policy Reform and Responsible Action for Mission Viksit Bharat.
Kar Saathi: An AI-enabled chatbot to help taxpayers with queries on the new Act, Rules and Forms.
Outreach scale: The campaign includes over 300 workshops, and seeks stakeholder feedback.
Simultaneous overhaul: The FM said direct and indirect tax systems are being overhauled together, a first for independent India.
Governing schedule: Recognized provident funds fall under Schedule XI of the Income Tax Act, 2025.
Exemption condition: Tax recognition is now open only to provident funds that have exemption under Section 17 of the EPF and Miscellaneous Provisions Act, 1952.
Investment ceiling removed: The fixed statutory cap of 50% on investment in Government securities has been removed. Investment norms follow the EPF framework.
Reason for change: Differences between the two laws caused confusion and avoidable litigation.
Effective date: The Act is slated to come into force on 1 April 2026.
Rules and forms: Simplified rules and redesigned forms will be notified later, giving taxpayers time to prepare.
Law it replaces: It replaces the Income-tax Act, 1961.
ICDS and IndAS: A joint committee of the Ministry of Corporate Affairs and CBDT will fold ICDS requirements into IndAS. Separate ICDS-based accounting ends from tax year 2027-28.

Don’t confuse with Income-tax Act vs Rules: The Act is passed by Parliament; the Rules and Forms are subordinate legislation notified by the CBDT.

Don’t confuse with Passage vs assent vs commencement: Passed 12 Aug 2025, assent 21 Aug 2025, in force 1 Apr 2026.

Don’t confuse with CBDT vs CBIC: CBDT administers direct taxes such as income tax; CBIC administers indirect taxes such as GST and customs. Both sit under the Department of Revenue.

Don’t confuse with EPF Act, 1952 vs Employees' Provident Funds Scheme, 1952: The Act is the parent law. The Scheme is framed under it and lays out the working rules.

Don’t confuse with Income-tax Act, 2025 vs Finance Bill: The Act is a standing rewrite of the direct tax law. The Finance Bill carries the year's rate and rule changes, such as TCS, STT and MAT.

Don’t confuse with MAT vs ICDS: MAT is a minimum tax on companies with low taxable income. ICDS are standards for computing taxable income.

Why it matters

Replaces a six-decade-old law with simpler language and structure, easing compliance.
Reduces litigation arising from complex wording while keeping tax policy unchanged.
Supports a more modern, predictable tax administration.
Simpler language and structure can ease compliance and cut disputes.
Multilingual outreach and digital tools improve taxpayer access.
Aligning the two laws reduces confusion and litigation for employers and fund trusts.
It makes EPF exemption depend on one framework, which eases compliance.
Simpler language and structure can cut disputes and ease compliance for ordinary taxpayers.
Aligning tax accounting (ICDS) with IndAS reduces duplicate record-keeping for companies.

Problems

Taxpayers and officials must adjust to new section numbers and Forms, causing transition costs.
Old case law is tied to 1961 Act provisions, which may create interpretive uncertainty.
Simplifying language alone does not remove complexity in rates, exemptions and disputes.
Frequent amendments could undo the simplicity; the FM warned against repeating past patterns.
Officers need training and uniform on-ground implementation.
Removing the 50% cap on government securities gives trusts more investment freedom, which needs sound oversight to protect members' savings.
Taxpayers and professionals need time to learn the new sections, rules and forms.
Transition from old provisions may cause litigation and uncertainty.

Way forward

Give clear guidance, FAQs and training for taxpayers, professionals and officers.
Map old provisions to new ones to preserve legal continuity.
Move next to rationalising exemptions and speeding up dispute resolution.
Keep the law stable with minimal amendments.
Use technology to reduce human interface while keeping an empathetic, trust-based approach.
Keep investment norms under the EPF framework clear and watch fund performance and member safety.
Notify clear rules and forms on time, with guidance and training.
Monitor early implementation and issue clarifications quickly.

Put in your answer

Constitutional basis: Entry 82, Union List gives Parliament power to tax non-agricultural income.

Stability of law: FM stressed that the new law must remain stable, simple and comprehensible, avoiding excessive amendments.

Capacity building: Over 300 workshops are planned under the outreach to seek stakeholder feedback.

Budget 2026-27 alignment: Example of harmonising tax law with labour and social security law to cut disputes.

MAT shift to new regime: Set-off of brought-forward MAT credit is allowed only in the new regime, up to one-fourth of tax liability, to push companies to the new regime.

Test yourself

Source: PIB, Ministry of Finance, 1 Feb, 12:53 IST · Release 283148

Issue page →

Worth revising until Prelims 2027: most news questions come within two years of the event.

Scheme

Integrated Programme for the Textile Sector

GS3 IndustryPrelims and Mains

Why in news: On 1 February 2026, the Union Budget 2026–27 announced an Integrated Programme for the Textile Sector with five sub-components, along with Mega Textile Parks and export and liquidity measures.
What it is: The Integrated Programme for the Textile Sector is a Budget 2026–27 proposal to support the textile value chain from fibre to fashion under one framework. It combines fibre self-reliance, cluster modernisation, handloom and handicraft support, green manufacturing and skilling. It is run by the Ministry of Textiles.

National Fibre Scheme: It aims at self-reliance across natural fibres (silk, wool, jute), man-made fibres and new-age fibres, to cut import dependence.
Handloom and handicraft integration: Existing handloom and handicraft schemes will be merged into one national programme.
Mega Textile Parks: They will be set up in challenge mode and will also support technical textiles.
Export obligation period: The period is extended from 6 to 12 months for garment and leather exporters using duty-free imported inputs.
Mahatma Gandhi Gram Swaraj Initiative: A new initiative for khadi, handloom and handicrafts, focused on market linkage, branding and skilling, and supporting ODOP.

Don’t confuse with Samarth 2.0 vs Samarth: Samarth 2.0 is the upgraded textile skilling programme announced in the Budget; it builds on the existing Samarth skilling scheme of the Ministry of Textiles.

Don’t confuse with Tex-Eco vs Textile Expansion and Employment Scheme: Tex-Eco targets sustainable, globally competitive manufacturing; the Expansion and Employment Scheme modernises traditional clusters with machinery and testing centres.

Schemes: 52 Prelims questions since 2013, 10 in Prelims 2026 alone. They test features, the period and who funds it. In Mains, 33 news-triggered questions, mostly GS3.

No practice question for this one; the card may still help an answer. Why: New budget programme with five sub-components, a lasting topic. Little detail yet for statements or a debate question.

Source: PIB, Ministry of Textiles, 1 Feb, 14:01 IST · Release 283163

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Worth revising until Prelims 2027: most news questions come within two years of the event.

Quick facts

Gender Budget share in the Union Budget rose to 9.37% in 2026-27 from 8.86% in 2025-26.
Adampur Airport in Punjab is renamed Shri Guru Ravidass Maharaj Ji Airport.
Paradip Port handled a record 14.44 MMT of cargo in January 2026, beating 14.32 MMT in January 2024.
The Indian Coast Guard marked its 50th Raising Day on 1 February 2026.
Budget 2026-27 plans the first Global Big Cat Summit in India and Turtle Trails at nesting sites in Odisha, Karnataka and Kerala.

Source: PIB, 1 Feb

What we left out: 57 of 69 releases

Speeches without a decision (13)
Ceremonies and campaigns (5)
Same issue as another release (33)
Appointments and ceremonies (1)
Routine budget allocations (3)
Routine inspection drives (1)
Visit schedules (1)

Practise the day’s news

In UPSC’s formats, inside each issue. The answer and why come after you choose.

1Sixteenth Finance CommissionMCQ · 4 true or false
2Fiscal Deficit and Debt-to-GDP Glide PathMCQ · 6 true or false · Mains
3Biopharma SHAKTIMCQ · 13 true or false
4Semicon 2.0 (India Semiconductor Mission)MCQ · 19 true or false · Mains
5Khelo India MissionMCQ · 6 true or false
6Income-tax Act, 2025MCQ · 10 true or false · Mains

Mains question of the day

15 marks · 250 words

The Union Budget 2026-27 accepted the 16th Finance Commission's recommendation to retain the states' share in the divisible pool at 41 percent, with grants of ₹1.4 lakh crore for 2026-27. In this context, examine the constitutional provisions governing the Finance Commission and discuss the challenges it faces in balancing vertical and horizontal fiscal equity in Indian federalism.

From: Sixteenth Finance Commission

Write and get it marked

Keep reading

The day before

Saturday, 31 January 2026Ramsar Sites in India and Glaw Lake · Nutrient Based Subsidy (NBS) Scheme · Lakshya Zero Dumpsite (Dumpsite Remediation Accelerator Programme)

The day after

Monday, 2 February 2026Jal Jeevan Mission and Jal Arpan · Baggage Rules, 2026 and Customs Baggage Regulations, 2026 · Biopharma SHAKTI and 7 more

All days

Mains question of the day

15 marks

From: Sixteenth Finance Commission

Write and get it marked

Practice

1Sixteenth Finance CommissionMCQ · 4 true or false
2Fiscal Deficit and Debt-to-GDP Glide PathMCQ · 6 true or false · Mains
3Biopharma SHAKTIMCQ · 13 true or false
4Semicon 2.0 (India Semiconductor Mission)MCQ · 19 true or false · Mains
5Khelo India MissionMCQ · 6 true or false
6Income-tax Act, 2025MCQ · 10 true or false · Mains

Practice · 6 Mains question