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Home > Current Affairs > 29 July 2025 Current Affairs: India-Maldives Reset, Indian Economy Outlook, PMFBY Reforms, NCMC Gets Legal Status

29 July 2025 Current Affairs: India-Maldives Reset, Indian Economy Outlook, PMFBY Reforms, NCMC Gets Legal Status

July 28, 2025

 🇮🇳 Reset in India-Maldives Relations 🇲🇻

International Relation

(Explained in Simple Way for UPSC and Students)

Source:-IE



📰 Why in News?

  1. India’s Prime Minister was the chief guest at Maldives’ 60th Independence Day celebration in July 2025.

  2. This visit marks a fresh start in the India-Maldives relationship, which was a bit disturbed earlier.

  3. Maldives’ current President earlier promoted an "India Out" campaign, but now he seems to be changing his tone.

🤝 What Happened in the Visit?

1. Strategic Talks

  • Both nations discussed their 2024 Economic and Maritime Security Partnership.

  • India reaffirmed its dedication to the MAHASAGAR policy and "Neighbourhood First."

2. Economic and Digital Boost

  • India and Maldives talked about signing a Free Trade Agreement (FTA) and a Bilateral Investment Treaty (BIT) soon.

  • Agreements were signed for:

    • UPI

    • RuPay Card

    • Trade in Local Currency

    • This will help in easy tourism and faster digital payments.

3. Financial Help

  • India gave a $550 million Line of Credit (loan) to build things in Maldives.

  • India also agreed to cut Maldives’ yearly loan repayment by 40%, making things easier for them.

4. Infrastructure and Social Projects

  • New roads, drainage systems, and housing units (3,300 homes) were inaugurated.

  • 6 local community projects were started to help the Maldivian people.

5. Health and Emergency Support

  • India gave 2 special emergency kits called BHISHM (Aarogya Maitri Health Cubes).

  • These can treat up to 200 people during disasters or health emergencies.

💸 Why Maldives is Changing Its Attitude?

1. Big Economic Problem

  • Maldives had only $440 million foreign exchange left – which is very low.

  • Moody’s (a credit rating agency) gave it a bad rating, saying it might not be able to pay back its debts.

2. They Need Indian Tourists

  • When relations got bad, Maldives lost $150 million, as fewer Indian tourists came.

  • Indian tourists are very important for their economy.

3. Dependence on Indian Goods

  • Maldives needs food, medicine, and building materials from India.

  • If India stops, Maldives will face big problems.

4. India’s Help in Emergencies

  • India helped Maldives in many crises:

    • Operation Cactus: India prevented a military takeover in 1988.

    • 2014 – Operation Neer: Gave drinking water during shortage.

    • COVID-19 – Sent vaccines, medicine, etc.

  • Maldives realized India is always there in tough times.

5. Balancing Between India and China

  • Maldives wants to stay friendly with both India and China.

  • But now, it's showing more realistic approach and giving India more priority.

🤔 Why This Reset is So Important?

🌊 Importance of Maldives for India

  1. Strategic Location

    • Maldives lies near important international sea routes in the Indian Ocean.

    • Approximately 80% of India's oil and 50% of its trade pass through these waterways.

  2. Countering China’s Influence

    • China wants to increase its influence in the Indian Ocean.

    • India needs Maldives to keep the region safe and limit China’s influence.

  3. Indian Ocean is Our “Backyard”

    • India sees Indian Ocean as its area of influence.

    • A friendly Maldives helps in keeping the region peaceful and secure.

🇮🇳 Importance of India for Maldives

  1. Security Partner

    • India helped in 1988 with Operation Cactus.

    • Conducts regular military exercises like:

      • Ekuverin

      • Dosti

      • Ekatha

  2. Tourism Support

    • In 2023, 11.2% of visitors to the Maldives were Indian—that's a significant percentage!

  3. Education Help

    • Many Maldivian students study in India.

    • India gives scholarships and access to good colleges.

  4. Climate Change Help

    • Maldives is a small island nation, facing sea-level rise.

    • India is helping them with climate projects and disaster readiness.

  5. Humanitarian Help

    • India always sends help during tsunamis, water shortages, and health emergencies.

🔧 What More Can Be Done?

1. More Trade and Projects

  • Finish the Free Trade Agreement (FTA) fast.

  • Use local currency instead of dollar to reduce cost.

  • Complete big projects like Greater Malé Connectivity Project (GMCP) and undersea internet cables to reduce dependency on China.

2. Stronger Security Ties

  • Do joint naval patrols, donate drones, and patrol boats.

  • Work together under Colombo Security Conclave to keep Indian Ocean safe.

3. Better Cultural & People Ties

  • India should talk more with Maldivian youth and media to clear misunderstandings.

  • Make movies and student exchange programs to create friendly feelings.

4. Diplomatic Talks

  • India should keep doing high-level visits, and also use Track-II Diplomacy (talks between universities, experts, etc.).

  • Avoid public arguments and respect each other's concerns.

✅ Final Thoughts – Why This All Matters?

  • India and Maldives are natural friends – same region, same interests.

  • A good relation helps in:

    • Peace in Indian Ocean

    • Stopping China’s growing power

    • Better economy and tourism

  • India must act smartly – finish projects on time, give timely help, and use culture, youth and technology to stay close with Maldives.

✨Prelims Box (Terms to Remember):

  1. MAHASAGAR – India's Indian Ocean diplomacy vision

  2. FTA – Free Trade Agreement

  3. BIT – Bilateral Investment Treaty

  4. BHISHM – Aarogya Maitri Health Cube for emergencies

  5. Operation Neer (2014) – Sent water to Maldives

  6. Operation Cactus (1988) – Saved government from coup

  7. EEZ – Exclusive Economic Zone

  8. Colombo Security Conclave — India’s security forum with Maldives, Sri Lanka, Mauritius

📌 FAQs on India-Maldives Relations Reset 2025

❓1. Why were India-Maldives relations strained before?

Answer:
Because the current Maldives President had run a campaign called "India Out", where some people criticized India’s role in the Maldives. Even some of his officials posted bad comments about India on social media.

❓2. What changed now? Why Maldives became friendly again?

Answer:
Maldives is facing a big economic crisis, losing tourists and facing loan issues. So, they realized that India is a strong friend who helps during emergencies and supports development.

❓3. What is the MAHASAGAR policy?

Answer:
MAHASAGAR stands for India's focus on the Indian Ocean region. India wants to be a leader and protect peace in this area by helping small island countries like Maldives.

❓4. What is the importance of Maldives for India?

Answer:

  • It lies near important sea trade routes.

  • Helps counter China's growing presence.

  • It’s a part of India’s security and trade zone in the Indian Ocean.

❓5. What did India give to Maldives during the recent visit?

Answer:

  • $550 million loan

  • UPI and RuPay digital payment access

  • 2 health emergency kits (BHISHM)

  • Help in infrastructure and housing projects

🇮🇳 Indian Economy Outlook 

Tag: GS Paper 2 & 3 | Source:IE 

🌟 Why in News?

RBI (Reserve Bank of India) published a report called “State of the Economy”, giving a hopeful but careful picture of India’s economy. The world is going through many problems (like wars, trade issues), but India is still doing quite okay.

🔍 Present Situation of Indian Economy

1. 📊 Inflation (महंगाई)

  • In June 2025, retail inflation dropped to 2.1%, the lowest level since January 2019, from 5.4% in 2023–2024.

  • But core inflation (like education, self-care) is up at 4.4%.

  • In villages (rural), inflation is lower (1.7%) than in cities (urban) (2.6%).

➡️ Means overall prices are stable now, but some services are still costly.

2. 💰 Balance of Payments & Current Account

  • India got more money from exports than it spent, so Current Account Surplus = 1.3% of GDP in last quarter of FY25.

  • Current Account Deficit also came down to just 0.7% of GDP in FY24.

➡️ Good news – India is earning more from abroad than it is spending.

3. 🧾 Fiscal Health of Government

  • Gross Fiscal Deficit (GFD) was only 0.8% of the budget target in 2025-26 (was 3.1% last year).

  • Govt already got 21% of total budget money till May 2025.

  • Spent only 14.7%, mostly on capital things (like roads, railways).

➡️ Govt is spending wisely and earning well.

4. 🌍 India’s Trade Status

  • Trade deficit reduced by 30% in May 2025 – due to cheaper oil and good service exports.

  • Exports grew 2.8%, imports fell 1%.

  • Services exports (like IT, finance) went up by 9.4%.

🛳️ Top Export Items:

  • Coffee, Tobacco, Rice, Electronics, Medicines

🌍 Top Export Countries:

  • USA, UK, Japan, UAE, France

🌏 Top Import Countries:

  • UAE, China, Thailand, US, Russia

➡️ India exporting more, importing smartly – that’s good.

5. 🏭 Foreign Direct Investment (FDI)

  • FDI grew 14% in FY25 vs FY24.

  • Compared to FY14, it's 125% higher!

  • Top Sectors: Services (19%), Software/Hardware (16%), Trading (8%)

  • Manufacturing FDI grew 18%.

  • Maharashtra got most investment (39%).

  • Top FDI Source: Singapore (30%), then Mauritius, then USA.

➡️ India is attracting lot of foreign companies to invest.

6. 💼 Foreign Portfolio Investment (FPI)

  • Total FPI inflows = $44.1 billion in FY24.
    ➡️ This is hot money (stocks, bonds), showing investor trust.

7. 💸 External Debt & Forex Reserves

  • India’s external debt rose 10% in 2025.

  • Debt to GDP = 19.1% (a bit more than 18.5% last year).

  • Foreign Exchange Reserves = $696 billion, enough to cover:

    • 11 months of imports

    • 95% of total debt

➡️ India is safe – has money to pay debts and import needs.

🚧 Problems Affecting Indian Economy

8. 🌐 Global Challenges

a. Geopolitical Tensions:

  • Iran-Israel tensions, US trade problems – creates risk.

  • Tariffs might go up like in 1930s – bad for exports/imports.

b. Weak Global Sentiment:

  • People and companies abroad not spending much.

  • Reduces demand for Indian products.

c. Global Inflation:

  • Inflation high in rich (US) & developing (Brazil, Russia) countries.

  • May lead to tight money policies, which reduces investments in India.

➡️ Global problems are not in our control but they affect us badly.

9. 🇮🇳 Domestic Challenges

a. Industrial Slowdown:

  • Factory output (IIP) grew just 1.2% in May 2025 – slowest in months.

  • Less growth means fewer jobs.

b. Credit Slowdown:

  • Banks giving fewer loans to NBFCs & Industry.

  • NBFC loans down 13%, urban loan sanctions down 23%.

  • Education loans and business loans down too.

c. GST Revenue Growth Slow:

  • GST grew only 6% in June 2025, lowest in 4 years.

  • Shows weak business activity.

d. Rural Labour Stress:

  • Unemployment = steady at 5.6%, but rural jobs down due to heat and no farm work.

  • Less jobs = less spending in villages.

e. State Government Pressure:

  • Freebies (like loan waivers, free power) eating state budget.

  • Less money left for roads, schools, hospitals.

➡️ Our internal system also facing heat – growth slowing, jobs not rising fast.

🔑 Way Forward

10. 🚢 Fast Trade Deals

  • Sign Free Trade Agreements (FTAs) fast – like with USA.

  • Improve ports, testing labs, quality checks to help exports grow.

11. 🌾 Help Rural Economy

  • Increase MGNREGA or similar programs in summer/hot season.

  • Train rural youth in jobs beyond farming.

  • Improve cold storage, irrigation and market link for farmers.

12. 📉 Keep Inflation & Deficit Under Control

  • Control prices by improving supply, not just interest rates.

  • Follow fiscal discipline (don’t overspend).

  • Keep investor-friendly policies.

➡️ Balance is key – don’t overspend, but don’t stop development.

✅ Conclusion

India's economy is showing signs of strength, but there are global and local problems.

"We need balance – not just give free things, but also invest in future. Growth + Welfare = Real Development."

🧠 Quick Summary in 10 Points

  1. Inflation low, but services cost more.

  2. The fact that India enjoys a current account surplus is encouraging.

  3. Government spending wisely, focusing on capital work.

  4. Exports growing, imports falling = trade balance improving.

  5. FDI & FPI inflow rising – world trusts Indian economy.

  6. Forex reserves very strong – we can handle crisis.

  7. Global tensions, inflation hurt exports and investments.

  8. Factory growth, loans, GST – all growing slowly.

  9. Rural jobs falling due to heat and farming off-season.

  10. We need to balance inflation control + rural support + investment focus.

🧾 FAQ: Indian Economy Outlook – 2025 Edition

1. Q: What is the current state of India's inflation in 2025?

A:At the moment, inflation is very low. In June 2025, retail inflation (CPI) fell to 2.1%, the lowest level since January 2019. However, other expenses, such as personal care and education, remain high (core inflation at 4.4%)..

2. Q: What is the meaning of Current Account Surplus?

A: It means India earned more from foreign trade (exports, services) than it spent on imports. India had a 1.3% surplus of GDP in Q4 FY25 – a very good sign.

🌾 Pradhan Mantri Fasal Bima Yojana (PMFBY) – Simple Explanation

Tag:- GS Paper 2 , Government policies

Source:- FE

🔴 Why in News?

  1. Many states in India, like Andhra Pradesh and Rajasthan, didn’t pay their share of insurance money (about ₹6,450 crore) since 2020.

  2. Because of this, farmers didn’t get their money (claim) on time after crop loss.

  3. It is creating big problems for farmers who trust this scheme for their crop protection.

🧑‍🌾 What is PMFBY?

  1. PMFBY means Pradhan Mantri Fasal Bima Yojana – it is a crop insurance scheme started in 2016 by the government.

  2. If a farmer loses his crop due to flood, drought, pests, or diseases, then he can get money (compensation) under this scheme.

  3. The idea is to protect farmers' income and reduce their losses.

💸 Farmer's Premium (Money Farmer Pay)

  1. Farmer has to pay only a small part of the premium:

    • Kharif crops – 2%

    • Rabi crops – 1.5%

    • Commercial/Horticulture crops – 5%

  2. Rest of the premium is paid by Central + State governments.

  3. For North-Eastern States, Central Govt pays 90% and State only 10% (since Kharif 2020).

✅ Main Benefits of PMFBY

  1. Covers many risks – flood, drought, fire, pest attack, diseases, cyclone etc.

  2. Also covers post-harvest losses (e.g. crop destroyed by rain after harvesting).

  3. Fast claim process – Target is to give money within 2 months after harvest.

  4. Modern technology used – satellite, drones, mobile apps to check crop loss.

  5. Huge benefit – For every ₹100 paid by farmer, they got around ₹500 in claim.

  6. Since 2016, ₹1.78 lakh crore given to farmers in claims.

📢 Awareness Campaigns

  1. Govt started many campaigns like:

  • Fasal Bima Saptah

  • Meri Policy Mere Haath

  • Fasal Bima Pathshalas (at village level)

  1. These helped farmers know more about the scheme and how to apply.

⚠️ Major Challenges in PMFBY

🟡 1. State Government Not Paying

  1. Many states delay their share of premium.

  2. Because of that, insurance companies don’t get full money, and farmer’s claim also gets delayed.

  3. This makes farmers lose trust in the scheme.

🟡 2. Late Payouts to Farmers

  1. Even if farmers apply on time, sometimes they get their claim money late, which defeats the purpose of the scheme.

🟡 3. Bad Assessment System

  1. In many places, crop damage checking is done manually, which is slow and not accurate.

  2. Sometimes this leads to wrong claim amount or delay.

🟡 4. Private Insurance Companies Don’t Trust

  1. Private companies are worried because many claims come and state don’t pay premiums on time.

  2. So they don’t want to join the scheme in future.

🟡 5. Unequal Enrollment

  1. In 2024–25, 4.19 crore farmers joined.

  2. But only:

  • 6.5% were tenant farmers (who rent land)

  • 17.6% were marginal farmers (very small land)

  • While 48% were loanee farmers (who take loan)

  1. This shows small and landless farmers are still left behind.

🔧 What Govt Is Doing to Improve It?

💻 1. Digital Platforms

  1. National Crop Insurance Portal (NCIP) created – farmers can apply, track claims online.

  2. Digiclaim Module started from Kharif 2022 – it is connected with PFMS and insurers for faster claim payment.

  3. From Kharif 2024, if insurer delays payment, 12% penalty is charged automatically.

📱 2. Mobile App for Crop Checking

  1. CCE-Agri App used to collect data on crop cutting experiments (CCEs) directly.

  2. YES-TECH – A new tech-based method to estimate yield using satellites and remote sensing.

  3. From 2023 – YES-TECH is mandatory for paddy and wheat.

  4. In 2024 – soybean also added.

☁️ 3. Better Weather Info

  1. WINDS – A new network of weather stations and rain gauges at village level.

  2. It helps in rainfall data, drought tracking, and better insurance calculation.

🏦 4. New Premium Payment Rule

  1. From Kharif 2025–26, states must deposit premium in escrow account in advance, so that payment is ready on time.

🧾 5. New Rule for Claim Money

  1. Now, even if state govt doesn’t pay its part, farmer will still get Centre’s share of claim money. This is called Proportional Claim Disbursal.

🧠 Conclusion – Why PMFBY Still Important?

  1. PMFBY is one of India’s biggest crop insurance programs.

  2. It helps farmers fight crop loss, and protects them from going into debt.

  3. But the scheme needs better implementation – especially state governments must be more responsible.

  4. With new technology and rule changes, the scheme is slowly improving and giving hope to farmers.

📌 FAQs on PMFBY (Pradhan Mantri Fasal Bima Yojana)

❓1. What is PMFBY?

Ans: PMFBY is a crop insurance scheme launched by the Government of India in 2016. It helps farmers if their crops are damaged by rain, drought, pests, or diseases.

❓2. Who can apply for PMFBY?

Ans: All farmers can apply – whether they have their own land or they are tenants. It is voluntary for everyone.

❓3. How much premium does a farmer have to pay?

Ans:

  • 2% for Kharif crops

  • 1.5% for Rabi crops

  • 5% for commercial or horticultural crops
    Rest is paid by Centre and State.

❓4. What kind of crop losses are covered under this scheme?

Ans: It covers loss due to:

  • Natural calamities (like flood, drought)

  • Pests and diseases

  • Post-harvest damage

  • Localized events (like hailstorm)

❓5. How is the loss of crop measured?

Ans: Using modern tools like:

  • Drones

  • Satellite images

  • Mobile apps
    Also, government officials do Crop Cutting Experiments (CCEs).

🇮🇳 National Crisis Management Committee (NCMC) – Explained Simply

Source:-HT

🔥 Why It’s in News?

  1. The Government of India has now officially made the NCMC a legal body by amending the Disaster Management Act in 2025.

  2. This means the NCMC is now the main authority in charge of handling big disasters in the country.

🏛️ What is NCMC?

  1. Earlier this committee was working without any legal status. But now, under Section 8A(2) of the updated law, it is officially recognised.

  2. It was created by the Ministry of Home Affairs.

👥 Who are in this Committee? (Members)

  1. The head of the NCMC is the Cabinet Secretary (a very senior govt officer).

  2. Other members include:

    • Union Home Secretary

    • Defence Secretary

    • Secretary (Coordination)

    • A top member from NDMA (National Disaster Management Authority)

  3. The chairperson can also invite experts from any part of central/state govt or other organisations, based on what kind of disaster is happening.

🧭 What This Committee Does (Functions)

  1. NCMC checks if the country is ready to face disasters or not.

  2. It gives instructions to improve disaster preparedness.

  3. It works with central and state govts, NDMA, and other agencies to make sure everyone works together during disasters.

  4. They make sure there's no confusion and delay in response when something bad like a flood, earthquake or pandemic happens.

📜 What’s in the Disaster Management (Amendment) Act, 2025?

  1. This new law tries to remove confusion and overlap between different disaster-related authorities.

  2. It gives legal status to:

  • NCMC

  • High-Level Committee (another senior disaster-handling body)

  1. Now, NDMA and State Disaster Management Authorities (SDMAs) can make their own plans directly, instead of depending on the old executive committees like NEC or SEC.

  2. It also says that in big cities, states must set up Urban Disaster Management Authorities (UDMAs).

  3. States can now create their own State Disaster Response Forces (SDRFs) to deal with disasters like urban floods, fires, etc.

🧠 Small Real-Life Example:

Just imagine a big flood in Mumbai. Earlier, many departments got confused on who will do what. But now with NCMC in full legal control and proper teams in place, there will be faster, more organised help.

🪖 Exercise Bold Kurukshetra 2025 – India & Singapore Army Drill

Source:-PIB

📰 Why in News?

  1. The 14th edition of a joint army exercise between India and Singapore started on 28th July 2025 in Jodhpur.

  2. This training is called Exercise Bold Kurukshetra and it happens every year.

🎯 What is the Purpose of this Exercise?

  1. The main goal is to practice how both armies can work together.

  2. They also train for peacekeeping missions under the United Nations.

  3. These types of exercises help in building friendship, coordination, and sharing military knowledge.

👥 Who are Participating?

  1. From India – Mechanised Infantry Regiment.

  2. From Singapore – 42 Armoured Regiment of the 4 Singapore Armoured Brigade.

  3. Both sides bring tanks, vehicles, and other equipment to simulate real battle-like situations.

📘 What is UN Chapter VII?

  1. It is a rule under the United Nations Charter that allows countries to take military or non-military actions to protect peace worldwide.

  2. This includes things like sending peacekeeping troops, sanctions, or blockades if a country becomes violent or threatens world peace.

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