Current Affairs, 1 January 2026

Implementing agency

The Department of Financial Services runs the scheme through the National Credit Guarantee Trustee Company Limited (NCGTC).

Size of support

Additional collateral-free credit of up to Rs 20,000 crore to direct and indirect exporter MSMEs through eligible lenders.

Loan limit per exporter

Working capital loan of up to 20% of existing export credit or working capital limits.

Uptake by 31 Dec 2025

1,788 applications worth Rs 8,599 crore were received; 716 worth Rs 3,141 crore were sanctioned.

Don’t confuse with CGSE vs ECGC: CGSE is a Finance Ministry credit guarantee run via NCGTC. ECGC is a separate export credit insurer under the Commerce Ministry.

Don’t confuse with CGSE vs CGTMSE: CGTMSE guarantees collateral-free loans to micro and small enterprises generally. CGSE is a time-bound scheme for exporters.

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.

1. 2017Mains GS3 · Q2Failure of manufacturing in labour-intensive exports; measures to promote them
2. 2023Mains GS3 · Q1Government policies for MSMEs and manufacturing share in GDP
3. 2002Prelims Q85Objectives of Export Credit Guarantee Corporation of India Limited
4. 2026Prelims Q93M1xchange's role in MSME financing: collateral loans, invoice discounting

UPSC’s own questions that come close to this issue, from our Prelims and Mains banks.

Maximum rated speed

Rule 12 takes the maximum achievable speed of the machine, whatever speed it is actually run at.

CCTV requirement

CCTV must cover all packing machines and manual units. Footage is kept for 24 months and given to officers within 48 hours of a request.

Legal basis

The goods are notified under Section 3A of the Central Excise Act, 1944, which allows duty on the basis of annual production capacity.

Basis of duty

Duty rests on the deemed quantity from the machine's maximum rated capacity, not actual production.

Who determines capacity

The Deputy or Assistant Commissioner of Central Excise fixes annual capacity after physical inspection and verification of technical specifications. Annual capacity is the monthly deemed quantity multiplied by 12.

Scope

The Rules apply to manufacturers of pouches. Those making other forms such as tins pay duty on assessable value.

Don’t confuse with HSNS Cess vs Section 3A capacity-based excise: Both tax machine capacity, not output. The tobacco levy is excise under Section 3A of the Central Excise Act, 1944. The HSNS cess is a separate cess under its own Act, on pan masala and similar goods.

Don’t confuse with Abatement vs refund: Abatement is a pro-rata adjustment against later cess, claimed machine-wise. It is not a cash refund.

Don’t confuse with Capacity-based vs value-based excise: Normal excise is charged on assessable value or actual production. Under Section 3A, duty is charged on the machine's deemed capacity.

Don’t confuse with Excise vs GST: These goods attract central excise under this scheme. GST is a separate tax on supply.

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.

1. 2019Mains GS3 · Q1Which indirect taxes subsumed in GST, and revenue implications since 2017

UPSC’s own questions that come close to this issue, from our Prelims and Mains banks.

Body and purpose

SAARG is the Committee for Strategic Asset Allocation and Risk Governance. It is meant to review, recommend and modernise the NPS investment framework.

Chair

Narayan Ramachandran, former Country Head and CEO of Morgan Stanley India, chairs the committee. Members come from capital markets, asset management and securities law.

Timeline

The committee has nine months to examine and submit its report with recommendations to PFRDA.

Scope: portfolio stability

It will look at holding a portion of G-Secs under Held-to-Maturity, the feasibility of Securities Lending & Borrowing, and Triparty Repo arrangements.

Scope: alternatives and sustainability

It will recommend valuation principles for Alternate Investment Funds and assess embedding climate transition risks and net-zero pathways in asset selection.

Legal basis of PFRDA

PFRDA is a statutory body under the PFRDA Act, 2013, and regulates the NPS.

Bank-sponsored pension funds

The board approved in principle a framework for scheduled commercial banks to independently set up pension funds to manage NPS.

Eligibility criteria

Eligibility will rest on net worth, market capitalisation and prudential soundness in line with RBI norms. Detailed criteria will be notified separately and will cover both new and existing pension funds.

NPS Trust chair

Dinesh Kumar Khara, former SBI Chairman, is among the three new trustees and has been designated Chairperson of the NPS Trust Board.

Annual Regulatory Fee

The Annual Regulatory Fee of 0.015 per cent stays unchanged. Of this, 0.0025 per cent of AUM goes to the Association of NPS Intermediaries for outreach and financial literacy.

Statutory basis

PFRDA became a statutory body through the PFRDA Act, 2013.

Don’t confuse with PFRDA vs SEBI: PFRDA regulates pension funds and the NPS. SEBI regulates securities markets and mutual funds, and AIFs fall under SEBI rules.

Don’t confuse with Held-to-Maturity vs mark-to-market: HTM securities are carried at cost and not revalued with market prices. This gives stability in reported value, unlike mark-to-market holdings.

Don’t confuse with PFRDA vs NPS Trust: PFRDA is the regulator. The NPS Trust is a separate trust, set up under PFRDA's oversight, that holds NPS assets for subscribers.

Don’t confuse with Investment Management Fee vs Annual Regulatory Fee: The IMF is charged by pension funds for managing money. The ARF is paid by pension funds to PFRDA.

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.

1. 2013Mains GS2 · Q8Justify merging SEBI and IRDA given overlapping financial products and services.
2. 2015Mains GS2 · Q16Discuss whether regulatory institutions must remain independent and autonomous, using recent experience.
3. 2017Prelims Q29Who is eligible to join the National Pension System (NPS)?

UPSC’s own questions that come close to this issue, from our Prelims and Mains banks.

What changes

KYV is discontinued for car, jeep and van category FASTags newly issued from 1 February 2026.

Existing FASTags

KYV is no longer routine for existing car FASTags. It is needed only when a complaint is received, such as loose FASTag, incorrect issuance or misuse.

VAHAN validation

Activation is allowed only after the vehicle details are validated from the VAHAN database.

No post-activation validation

The earlier provision allowing validation after activation has been discontinued.

RC fallback

If details are not on VAHAN, issuer banks must validate using the Registration Certificate before activation.

Who runs it

FASTag is implemented by NHAI, under the Ministry of Road Transport and Highways, and issued by banks.

Don’t confuse with VAHAN vs Sarathi: VAHAN is the national database of vehicle registration. Sarathi is the corresponding database for driving licences.

Don’t confuse with FASTag vs ETC by ANPR: FASTag uses RFID tags on the windscreen. Number-plate-reading (ANPR) tolling is a camera-based system and needs no tag.

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.

1. 2024Mains GS3 · Q6Electronic toll collection technology: advantages, limitations, proposed changes, hazards
2. 2004Prelims Q144Which statements on smart cards and digital technology are correct?

UPSC’s own questions that come close to this issue, from our Prelims and Mains banks.

Recommending body

The change followed review by the Ministry, the High Level Committee on Non-Financial Regulatory Reforms (HLC-NFRR) recommendation and stakeholder suggestions.

Uses of the new form

The simpler form covers KYC compliance, updating mobile number, email or residential address, and re-activation of DIN. Digital-signature verification by the director and certification by a professional are needed only for updating mobile number, email or address.

Next due date

Directors who have completed KYC so far are covered, and their next KYC filing is due by 30 June 2028.

Notification

The notification is G.S.R. 943(E) dated 31 December 2025.

Don’t confuse with DIN vs KYC: DIN is the unique identification number given to a director. KYC is the periodic verification of the DIN holder's details.

Don’t confuse with Rule vs Act: Rule 12A is subordinate legislation under the Companies Act, 2013, so the Ministry could change it by notification without amending the Act.

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.

1. 2013Mains GS3 · Q1Challenges in implementing indirect mandatory CSR under Companies Bill 2013

UPSC’s own questions that come close to this issue, from our Prelims and Mains banks.

Wage floor

No notified daily wage anywhere in the country will be below ₹300.

National average wage

The national average notified wage rose from ₹298.8 to ₹327.4 per day, an increase of over 10 per cent.

Interim allocation

The Centre has released an interim allocation of ₹95,692.31 crore to States and UTs.

Launch venue

The National Launch Programme is on 2 July 2026 at Mukkavaripalle Village, Tirupati District, Andhra Pradesh.

Ministry

The Act is administered by the Ministry of Rural Development.

Days of guaranteed work

The statutory guarantee rises from 100 to 125 days for every eligible rural household.

Commencement date

The Act comes into force across rural India from July 1, 2026.

Role of Gram Panchayats

The Act places Gram Panchayats at the centre, stressing durable assets, water conservation, SHGs and convergence with other rural programmes.

State readiness

29 States/UTs have made budget provisions and 24 States have notified the VB-G RAM G State Scheme.

Job card transition

Existing e-KYC verified job cards stay valid until new Gramin Rozgar Guarantee Cards are issued.

Commencement

The Act is to be rolled out nationwide from 1 July 2026, notified on 11 May 2026.

Repeal of MGNREGA

MGNREGA, 2005 stands repealed from the date the new Act commences.

Guarantee

Each rural household whose adult members volunteer for unskilled manual work is entitled to 125 days of wage employment every financial year.

Unemployment allowance

If work is not given within the prescribed time after demand, workers are entitled to unemployment allowance.

Funding pattern

Centrally Sponsored Scheme under Section 22. Sharing is 90:10 for North-Eastern States, Himalayan States and UTs (Uttarakhand, Himachal Pradesh, J&K), and 60:40 for all other States and UTs with legislature.

State scheme

Under Section 3(1), each State must notify a Scheme consistent with the Act within six months of its commencement.

Normative allocation

The Central Government decides State-wise normative allocation on objective parameters it prescribes (Section 22(4)).

Type of scheme

Section 22 makes the scheme a Centrally Sponsored Scheme.

Fund sharing

The Centre-State ratio is 90:10 for North-Eastern and Himalayan States and the UT of Jammu and Kashmir, and 60:40 for all other States and UTs with legislature.

State-wise allocation

Under Section 22(4), the Centre decides each State's normative allocation on objective parameters it prescribes.

Special relaxations

In disasters or pandemics, States may recommend relaxations. The Centre can allow wider permissible works, relaxed documentation and temporarily more employment.

Plan approval

The Gram Panchayat prepares the Viksit Gram Panchayat Plan and the Gram Sabha approves it (Schedule I, para 5(2)).

50% works through Gram Panchayats

At least half of the total works, by cost, must be implemented through Gram Panchayats.

Gati Shakti link

Village plans are integrated with PM Gati Shakti, use geospatial systems, and are aggregated at Block, District, State and National levels.

Guaranteed days

At least 125 days of wage employment per rural household per financial year, up from 100 days.

Women's participation

At least one-third participation of women is mandatory, with special job cards for women-headed households and single women.

Crèche

A crèche is to be provided at worksites where five or more children under five accompany working women.

Councils

One-third women representation is mandatory in the Central and State Rojgar Guarantee Councils.

Work themes

Works are prioritised under four themes: water security, core rural infrastructure, livelihood infrastructure and mitigation of extreme weather events.

Nature of scheme

The scheme under the Act is a Centrally Sponsored Scheme.

Allocation

The Centre fixes State-wise normative allocation on objective parameters, under Section 22(4).

Planning

Works are chosen through Viksit Gram Panchayat Plans approved by the Gram Sabha and aggregated up to the national level, in four thematic domains.

Four thematic domains

Water security works, core rural infrastructure, livelihood infrastructure, and special works for extreme weather events and disaster preparedness.

Allocation to States

The Central Government determines State-wise normative allocation on objective parameters it prescribes (Section 22(4)).

Planning link

Works are planned through Viksit Gram Panchayat Plans, integrated with PM Gati Shakti and aggregated at Block, District, State and National levels.

Wage payment

Wages must be paid within one week. If payment is delayed beyond 15 days, workers get 0.05 percent extra as interest on dues.

Role of Gram Sabha

The Gram Sabha takes the decision on which village-related works are to be undertaken.

Women's share

33 percent of the work under the scheme is reserved for women.

Farm work window

State governments can notify deployment of workers for agricultural operations for a maximum of 60 days during sowing and harvesting.

Administrative expenditure

Administrative expenditure is raised from 6 percent to 9 percent to avoid delays in payments to employment assistants.

Don’t confuse with VB-G RAM G vs MGNREGA: MGNREGA, 2005 guaranteed 100 days of work per household. VB-G RAM G raises the entitlement to 125 days and adds a focus on durable assets and livelihoods.

Don’t confuse with VB-G RAM G Act vs earlier rural employment guarantee law: The new Act raises the guarantee from 100 to 125 days and replaces the earlier framework; the 100-day figure belongs to the old one.

Don’t confuse with Interim allocation vs final allocation: The ₹95,692.31 crore is an interim sum for a smooth start, not the full annual allocation.

Don’t confuse with VB–G RAM G vs MGNREGA: MGNREGA, 2005 gave 100 days and is repealed; VB–G RAM G gives 125 days from 1 July 2026.

Don’t confuse with Notification vs commencement: The notification was on 11 May 2026; the Act applies from 1 July 2026.

Don’t confuse with VB-G RAM G vs earlier 100-day framework: The new Act raises the guarantee to 125 days, makes the scheme Centrally Sponsored with normative allocation, and adds an off-season employment guarantee.

Don’t confuse with VB-G RAM G vs the earlier rural employment guarantee: The earlier framework gave 100 days of work. The 2025 Act guarantees 125 days.

Don’t confuse with VB-G RAM G vs MGNREGS: MGNREGS gave 100 days of work; VB-G RAM G gives 125 days and adds Viksit Gram Panchayat Plans linked to PM Gati Shakti.

Don’t confuse with Gram Panchayat vs Gram Sabha: The Gram Panchayat is the elected village body that prepares plans and executes works; the Gram Sabha of village voters approves plans and conducts social audits.

Don’t confuse with VB-G RAM G Act vs MGNREGA: The new Act gives 125 days of guaranteed work; the earlier framework gave 100 days.

Don’t confuse with VB-G RAM G Act vs earlier MGNREGA: The earlier framework guaranteed 100 days of work; VB-G RAM G guarantees 125 days and adds thematic works and a digital governance layer.

Don’t confuse with Centrally Sponsored vs Central Sector Scheme: Centrally Sponsored Schemes share cost with States; Central Sector Schemes are fully funded by the Centre.

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.

1. 2025Mains GS4 · Q11Describe MGNREGA's legal wage employment guarantee and its objective for rural households.
2. 2013Mains GS2 · Q12Critically evaluate restructuring of Centrally sponsored schemes for vulnerable sections
3. 2020Mains GS2 · Q17Evaluate SHGs' role in asset creation and income security for rural poor.
4. 2020Mains GS4 · Q9Tribal youth migration and inadequate welfare programmes in a poor district; suggest remedies.
5. 2006Prelims Q73Whether 100-day employment is a fundamental right and women get half priority under NREGA.
6. 2011Prelims Q41Who is eligible to benefit under MGNREGA employment guarantee?
7. 2006Prelims Q22Whether NREGA requires paying state statutory minimum agricultural wages to workers.

UPSC’s own questions that come close to this issue, from our Prelims and Mains banks.