UPSC Key: UPI free for citizens, Caste census format, and Uranium mining

Preliminary Examination: Current events of national importance and economic development. 

Mains Examination: General Studies-II, III: Government policies and interventions for development in various sectors, Indian Economy and issues relating to planning, mobilization of resources, growth, Awareness in the fields of IT.

What’s the ongoing story: Allaying user concerns, the Ministry of Finance “categorically” stated Saturday that consumers making UPI payments will not face any transaction charges, and all person-to-person transactions will continue to be free of charge. 

Key Points to Ponder:

— What is Unified Payments Interface (UPI)?

— Who developed the Unified Payments Interface?

— What are the key features of UPI?

— What is the Merchant Discount Rate?

— What achievements has UPI made?

— Know in detail about Payments Council of India (PCI) and National Payment Corporation of India (NPCI)

— Read about the Taxation and Other Laws (Amendment) Bill, 2026. 

Key Takeaways:

— It, however, said as and when MDR (Merchant Discount Rate) charges are introduced, they will apply at a nominal rate only above a certain threshold, and on a limited set of merchant transactions. “It would be far lower than debit or credit card MDRs,” the statement said.

— MDR is a fee levied on merchants by banks to help meet costs related to processing of transactions, settlement and infrastructure. Credit cards face an MDR of 1-3% of transaction value while it is up to 0.9% for debit cards.

— The Finance Ministry’s statement comes amid a raging debate over a potential fee on UPI payments after the government introduced The Taxation and Other Laws (Amendment) Bill, 2026 in Parliament.  Passed by the Lok Sabha on Thursday, the Bill proposes changes to the Payment and Settlement Systems Act, 2007, which open the door for banks and payment system providers to charge fees on UPI and RuPay debit card payments.

— The Bill led to fears that merchants which may face MDR charges in the future will pass on the cost to consumers. On Friday, the Payments Council of India (PCI) had clarified that consumers will not have to pay extra while making UPI transactions to large merchants.

— Since its launch in April 2016, UPI has democratised finance in India with QR codes replacing complex bank details for money transfers. In 2025-26, there were more than 24,000 crore transactions (30% more than the previous year) worth Rs 314 lakh crores (21% more). Today, it is the world’s largest real-time payment system.

— In its statement, the Finance Ministry said to expand UPI further into rural and semi-urban areas and maintain competitiveness, it must be self-sustainable and affordable.

— The Taxation and Other Laws (Amendment) Bill, 2026, seeks to amend Section 10A of the Payment and Settlement Systems Act, 2007, such that the exemption from any bank charges to electronic payments under section 269SU of the Income-tax Act, 1961 is removed.

— Section 269SU applies to every person having an annual business turnover of over Rs 50 crore. It is this threshold that may be used to determine which merchants face an MDR, said payments industry executives. Some experts, however, said it could be lower at Rs 1 crore-Rs 1.5 crore.

— Section 10A of the Payment and Settlement Systems Act, 2007 says no bank or system provider can impose any charge on payments made through electronic modes prescribed under Section 269SU. These modes are RuPay debit cards, BHIM-UPI, and UPI-QR code.

Do You Know:

— Launched in 2016, UPI is a system developed by the National Payments Corporation of India (NPCI) and regulated by the RBI. It allows users to send and receive money instantly using just their phone numbers or unique identifiers called UPI IDs. IT has become the backbone for digital payments in India. It is authorised under the Payment and Settlement Systems Act, 2007. 

— Unlike other payment methods, such as NEFT and IMPS, UPI also lets users or merchants request money from others by sending a simple message through their bank app.

— 12 countries have adopted India’s digital payment system. NPCI International Payments Ltd. (NIPL), a wholly owned subsidiary of the NPCI was set up in April 2020 to work with foreign institutions and expand NPCI’s payment platforms, including UPI and the RuPay card network, to international markets.

Other Important Articles Covering the same topic:

📍The hidden Trump factor in India’s proposed new UPI transaction levy

📍UPI transactions surge over 5 years; 12 countries adopt India’s digital payment system

Previous year UPSC Prelims Questions Covering similar theme:

(1) Which of the following is a most likely consequence of implementing the ‘Unified Payments Interface (UPI)’? (UPSC CSE 2017) 

(a) Mobile wallets will not be necessary for online payments.

(b) Digital currency will totally replace the physical currency in about two decades.

(c) FDI inflows will drastically increase.

(d) Direct transfer of subsidies to poor people will become very effective. 

(2) Consider the following statements: (UPSC CSE 2017)

1. National Payments Corporation of India (NPCI) helps in promoting the financial inclusion in the country.

2. NPCI has launched RuPay, a card payment scheme.

Which of the statements given above is/are correct? 

(a) 1 only

(b) 2 only

(c) Both 1 and 2

(d) Neither 1 nor 2 

No drop-down options, caste census format to be open-ended

Syllabus:

Preliminary Examination: Current events of national importance, Indian Polity and Governance-Constitution and  Rights Issues, etc.

Mains Examination: General Studies-II: Indian Polity and Governance- Constitution of India, Public Policy, Rights Issues, Population and Associated Issues, Government Policies & Interventions, Welfare schemes for vulnerable sections of the population.

What’s the ongoing story: The Registrar General of India (RGI) has decided to use an “open-ended question on caste” rather than a drop-down menu of castes for the caste census to be conducted alongside the population enumeration phase of the Census.

Key Points to Ponder:

— History of census in India: Know in detail.

— What are the Constitutional Provisions related to census in India?

— What is caste and its historical basis in India?

— What is caste census?

— What is the objective of caste census?

— What is the significance of caste census?

— What is the difference between caste census and socio economic caste census?

— Registrar General of India: Know about its role and functions. 

— What are the advantages and disadvantages of caste census?

Key Takeaways:

— This format is likely to produce results similar to the 2011 exercise when the Socio-Economic and Caste Census (SECC) was conducted.

— Sources in the Ministry of Home Affairs (MHA) said enumerators will simply ask people to state their caste and record the answer verbatim, without attempting to classify surnames, sub-castes or other responses into broader caste categories.

— Population enumeration, along with the caste census, will be conducted across the country in February next year. However, in hilly and snow-bound areas, the exercise will begin from September 1 this year to avoid difficulties during the winter months.

— The decision comes after the RGI considered using a drop-down menu drawing from the Central and State lists of castes, particularly for Other Backward Classes (OBCs). The Census already uses a drop-down menu for recording notified Scheduled Caste (SC) and Scheduled Tribe (ST) communities.

— The “open-ended question on caste” method was exactly how the 2011 Socio-Economic and Caste Census (SECC) was conducted. The exercise failed to produce usable caste data largely because of poor data quality, the absence of a standardized caste registry and flaws in operational design. Since respondents could self-report caste names without verification, the exercise generated an administrative nightmare.

— The final dataset contained nearly 46.7 lakh distinct caste names, compared with the 4,147 castes recorded in the last comprehensive caste census in 1931. The Union government eventually withheld the raw caste data.

— The government, however, maintains that an open-ended response is the only way to conduct the exercise without the State itself becoming an arbiter of caste identities.

— Under the proposed system, an enumerator will record what a respondent says rather than determine whether the answer corresponds to a recognised caste, sub-caste or category.

— The choice of an open-ended format, however, leaves the government with the problem that had complicated the 2011 exercise: how to convert millions of individual responses into reliable, standardised caste data without appearing to determine or alter what respondents have reported.

Do You Know:

— The first non-synchronous, nationwide census in India was done in 1872. This census involved counting individuals across most parts of the country; however, it did not include all territories under British control. 

— The first synchronous census of India was conducted in 1881. It was conducted by W.C. Plowden. The Census of 1881 marked a significant advancement towards a modern and synchronized census. This census emphasized not only complete coverage but also the classification of demographic, economic, and social characteristics.

— Every Census in independent India from 1951 to 2011 has published data on Scheduled Castes and Scheduled Tribes, but not on other castes. Before that, every Census until 1931 had data on caste. 

— Census 2027 is the 16th census overall and the eighth since Independence. The first phase of Census 2027, the Houselisting and Housing Census, began on April 1 this year. The second phase of the Census, population enumeration, will take place in February 2027. 

Other Important Articles Covering the same topic:

📍Knowledge Nugget | Census 2027 and Registrar General of India: A must-know for UPSC Exam  

📍UPSC Issue at a Glance | From Caste to its Census: What you must know for UPSC Exam

UPSC Prelims Previous Year and Practice Questions Covering similar theme:

(3) Consider the following statements: (UPSC CSE, 2009)

1. Between Census 1951 and Census 2001, the density of the population of India has increased more than three times.

2. Between Census 1951 and Census 2001, the annual growth rate (exponential) of the population of India has doubled.

Which of the statements given above is/are correct?

(a) 1 only

(b) 2 only

(c) Both 1 and 2

(d) Neither 1 nor 2

(4) Which of the following articles of the Constitution of India provides for promotion of educational and economic interests of Scheduled Castes, Scheduled Tribes and other weaker sections?

(a) Article 45

(b) Article 47

(c) Article 48

(d) Article 46

OPINION 

On rural jobs, the 60:40 dilemma

Syllabus:

Preliminary Examination: Current events of national importance and economic development.

Mains Examination: General Studies-II: Government policies and interventions for development in various sectors and issues arising out of their design and implementation.

What’s the ongoing story: P Vaidyanathan Iyer writes- “No state likes it when the Centre asks it to share a burden it never did in the past. More so in these times, when political parties have, in a race to the bottom, made fiscally unsustainable promises to win Assembly elections.”

Key Points to Ponder:

— Viksit Bharat-Guarantee for Rozgar and Ajeevika Mission (Gramin), or VB–G RAM G 2025: Know its key features.

— Read about the evolution of Rural Employment Programmes in India.

— How is VB-G RAM G different from Mahatma Gandhi National Rural Employment Guarantee Act 2005?

— How VB-G RAM G is funded?

— What is meant by ‘normative allocation’ under the VB-G RAM G Bill?

— How VB-G RAM G Act will affect state exchequer?

— What is a centrally sponsored scheme? What is the difference between a centrally sponsored and central scheme?

— How does the shift from a demand-driven to a top-down allocation model affect the scheme?

— How does the new Centre-State funding pattern for the scheme impact cooperative federalism?

— What are the challenges associated with the scheme?

Key Takeaways:

— “Naturally then, states, particularly those ruled by the Opposition, threw a fit after the Centre suddenly changed the rules of the game and asked them this year to partly provide for the big-ticket National Rural Employment Guarantee Scheme. For 20 long years, all states were happy when it was fully funded by the Centre — in the first 10 years by the UPA government after it launched the scheme in 2006, and later by the NDA government.”

— “Under the scheme, now rechristened as Viksit Bharat – Guarantee for Rozgar and Ajeevika Mission (Gramin) or VB-G RAM-G, if a state requires Rs 100 crore in a year, the Centre will give Rs 60 crore from the Union Budget, and the state will give Rs 40 crore from the state Budget.”

— “For Himalayan and Northeastern states, the Centre-state split is 90:10; for Union Territories without legislatures, the Centre will fully fund the scheme. Earlier, the Centre provided the entire amount of wages for all states.”

— “It is not just the Opposition, but also those where the BJP is in power, which feel the fiscal stress of the change in rules. They, too, complain, but in private, because the resource kitty is limited, significant expenditure remains sticky and inflexible, and they, too, have to make tough choices on how and where to spend the scarce revenues they earn.”

— “The opposition to the Centre’s move is not just political, but social, economic and fiscal too. Political, understandably, because this was a flagship scheme introduced by the Congress but never seen as transformative by the BJP. Social, since it offered livelihood and a minimum income security to poor farmers and labourers who could not get any other job. Economic, because the NREGA wage acted like a floor, and NREGA job card holders leveraged it to deny work offers with wages lower than this. Fiscal, because states are perpetually strapped for cash.”

Do You Know:

— The VB-G RAM G Act, 2025 came into effect on July 1 replacing the two-decade-old Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA), 2005. The Centre on June 30 also notified wage rates for unskilled manual workers under the VB-G RAM G. 

— The Union government has allocated Rs 95,692.31 crore for the VB-G RAM G scheme for this financial year (2026-27). Here are the key features of VB-G RAM G.

#1 Increased guaranteed wage employment days: The VB-G RAM G Act increases the number of working days from 100 to 125.

#2 Pause in employment guarantee during agriculture season: VB-G RAM G provides for a 60-day pause in the scheme during the peak agricultural sowing and harvesting seasons to ensure the availability of farm labour.

#3 States to share funding burden: Departing from MGNREGA, the VB–G RAM G Act proposes a higher share of states in the funding of the rural job programme. Unlike MGNREGS, where the Centre paid 100% of the wage bill, VB-G RAM G shifts 40% of the funding burden onto states. The exceptions to this are the northeastern and Himalayan states as well as Union Territories (UTs) with a legislature, where the Union government will bear 90% of the funding burden. As for UTs without a legislature, the Centre will bear the complete funding burden.

#4 Top-down resource allocation approach: It also flips the MGNREGS model of Central allocations based on state labour budgets, with the Centre now determining the devolutions.

#5 Normative allocation to states: According to the draft Objective Parameters for Normative Allocation Rules, 2026: “The Central Government shall, for each financial year, determine the normative allocation of the funds, for every State, based on the objective parameters specified in these rules.”

— According to the rules, the Centre will use the Sixteenth Finance Commission’s horizontal devolution recommendations to determine the normative allocation to states.

Other Important Articles Covering the same topic:

📍Knowledge Nugget | VB-G RAM G comes into effect: What changes under India’s new rural employment scheme?

UPSC Prelims Practice Question Covering similar theme:

(5) With reference to the Viksit Bharat – Guarantee for Rozgar and Ajeevika Mission (Gramin) (VB–G RAM G) scheme, consider the following statements:

1. It replaces the Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS).

2. The scheme proposes a higher share of states in the funding of the rural job programme.

3. The horizontal devolution will be applicable for the Union Territories.

How many of the statements given above are correct?

(a) Only one

(b) Only two

(c) All three

(d) None

THE WORLD

Yemen on brink of civil war as regional tensions mount

Syllabus:

Preliminary Examination: Current events of international importance.

Mains Examination: General Studies-II: Effect of policies and politics of developed and developing countries on India’s interests, Indian diaspora. 

What’s the ongoing story: The internationally recognized government of Saudi Arabia said its forces had retaliated on Saturday against Iran-backed Houthi rebels after days of attacks on the military, the latest in a surge of fighting that threatens to tip the country back into full-scale civil war.

Key Points to Ponder:

— Read about the Houthis. 

— How has the role of the Houthi group evolved throughout the Yemen Civil War? 

— What is the “axis of resistance”?

— What role do the Houthis play in the broader Iranian “axis” against Israel and other regional adversaries?

— What are the major causes of the conflict in Yemen? 

— What are the implications of conflict in Yemen for regional stability and security? 

— What is the strategic importance of Yemen in the geopolitics of West Asia?

— Map work: Locate Yemen, Iran, Israel on map. 

Key Takeaways:

— The escalation reflected how the stability of the Middle East now hangs in the balance across multiple fronts. Despite a lull in fighting between the United States and Iran, the region is waiting to learn whether a deal can be finalized to reopen the Strait of Hormuz and stave off another round of conflict. 

— The Yemeni government’s counteroffensive follows a rapid escalation that began two days ago, when the Houthis struck military positions in the oil- and gas-rich provinces of Marib and Hadramout, killing at least 17 soldiers.

— On Saturday, Majed al-Nuzaili, a spokesman for the Yemeni military, said that its forces had “carried out military action against terrorist elements” of the Houthi militia in several areas. He did not provide further details. 

— The Yemeni government, backed by Saudi Arabia, has been at war with the Houthis since 2014, when the group seized Yemen’s capital, Sanaa, with Iranian support. A year later, Saudi Arabia led a military coalition in support of the government, but its devastating bombing campaign ultimately failed to oust the Houthis from power.

— Since then, Yemen has been effectively divided into two states, with the Houthis in control of large swaths of the north. Observers fear that a fragile truce hatched in 2022 has now all but collapsed.

— A sustained Houthi push into Yemen’s resource-rich eastern regions would threaten the government’s economic lifeline and risk triggering a fresh humanitarian crisis among millions of vulnerable Yemenis. 

— The fighting in Yemen has taken on broader significance amid the war that the United States and Israel launched against Iran in late February. The conflict prompted Iran’s allies in the region, like the Houthis in Yemen and Hezbollah in Lebanon, to mount their own attacks.

Do You Know:

— The Houthis are a large clan belonging to the Zaidi Shia sect, with roots in Yemen’s northwestern Saada province. Zaidis make up around 35 per cent of Yemen’s population.

— The Zaidis ruled over Yemen for over a thousand years until 1962, when they were overthrown and a civil war followed, which lasted until 1970. The Houthi clan began to revive the Zaidi tradition from the 1980s, resisting the increasing influence of the Salafists, who were funded by the state. The unprecedented success in the Red Sea and the renewed American focus on destroying them have raised the domestic profile of the Houthis.

— Iran is believed to back the Houthis, even as it has denied the charge. Its regional rival, the Sunni-majority Saudia Arabia (along with Western allies like the US) backs the Yemen government. Houthis’ support for Palestine is, therefore, also a manifestation of existing regional rivalries.

Other Important Articles Covering the same topic:

📍Who are the Shia Houthis, and why are they aligned with the Sunni Palestinian Hamas?

UPSC Prelims Practice Question Covering similar theme:

(6) Consider the following pairs:

1. Houthis: Yemen

2. Hezbollah: Lebanon

3. Hayat Tahrir al-Sham: Syria

Which of the pairs given above is/are correct?

(a) 1 and 2 only

(b) 2 and 3 only

(c) 1 and 3 only

(d) 1,2 and 3

ECONOMY 

Participation of mining operators sought to push uranium output

Syllabus:

Preliminary Examination: Current events of national importance and economic development. 

Mains Examination: General Studies-II, III: Government policies and interventions for development in various sectors, Energy.

What’s the ongoing story: The Centre should come up with a policy roadmap to ensure the participation of mine developer-cum-operator (MDO) in uranium mining, a Parliamentary committee has suggested, amid concerns that India’s domestic uranium production may not be enough to meet the future fuel requirements of its indigenous pressurised heavy water reactors (PHWRs). 

Key Points to Ponder:

— Read about uranium and its significance.

— What are pressurised heavy water reactors?

— What is the importance of uranium availability for India’s nuclear energy programme?

— From which countries does India currently import uranium?

— How does India’s dependence on imported uranium pose strategic challenges?

— What are the challenges related to uranium mining in India?

— Read about India’s nuclear energy programme.

— Why does India need to diversify its sources of uranium supply?

Key Takeaways:

— The panel also recommended that any MDO participation in the sector should remain under the strict oversight of the Department of Atomic Energy (DAE).

— An MDO is a contractor engaged by the mine owner, typically a government or public-sector entity, to develop and operate the mine and undertake mining activities on its behalf.

— The recommendation comes at a time when the country seeks to expand its civil nuclear power capacity from the current 8.7 gigawatt-electric (GWe) to 100 GWe by 2047. 

— India’s indigenous PHWRs use natural uranium.And their fuel requirements are currently met through a combination of domestic production from state-owned Uranium Corporation of India Ltd (UCIL) mines and imports. 

— Enriched uranium used in the two light water reactor (LWR) variants — Tarapur Nuclear Power Plant and Kudankulam Nuclear Power Plant — is entirely imported.

— UCIL, which alone has the mandate to mine and process uranium ore in the country, operates multiple underground and open-pit mines with processing plants in Jharkhand and Andhra Pradesh, and sends uranium concentrate to National Fuel Complex (NFC) for fuel fabrication for reactors operated by state-owned Nuclear Power Corporation of India Limited’s (NPCIL).

— The parliamentary panel noted that India currently imports uranium from Kazakhstan, Russia, Uzbekistan and Canada, with the long-term supply contract with Uzbekistan valid until 2026.

— The panel sought an update on the government’s plans to secure long-term uranium supplies from Uzbekistan beyond 2026.

— It also recommended expediting the proposed UCIL-NTPC joint venture to acquire stakes in overseas uranium assets to diversify supplies and reduce exposure to supply disruptions and market risks.

— The panel sought a comprehensive report from the DAE on the timelines for the UCIL–NTPC joint venture and plans for future fuel sourcing and the proposed framework for MDO participation in domestic uranium mining under DAE oversight.

— DAE also informed the panel that it is pursuing an amendment to the MMDR Act to allow a one-time extension of mining leases for uranium minerals by up to 10% of the existing lease area.

— The proposed change is aimed at addressing instances where newly identified or deeper extensions of ore bodies extend beyond existing lease boundaries. Under the current framework, such extensions require separate leases and clearances, which can affect the techno-economic viability of projects, particularly for deposits located at depths beyond 600 metres.

Do You Know:

— Uranium is a naturally occurring radioactive element. There are three natural isotopes of uranium — uranium-234 (U-234), uranium-235 (U-235) and uranium-238 (U-238). It is the fission of U-235 atoms, which produces nuclear energy. But natural uranium typically contains only 0.72 per cent of U-235 and most reactors need a higher concentration of this isotope in their fuel.

Other Important Articles Covering the same topic:

📍How India’s nuclear energy programme transitions from uranium to thorium

ALSO IN NEWS

• Typhoon Dolphin hits Okinawa; China shuts ports ahead of landfall

— Typhoon Dolphin lashed Japan’s ​southern Okinawa prefecture on Saturday, injuring six people and cutting power to more than 50,000 buildings, while China shut ports ‌and halted ferries ahead of the storm’s expected arrival on its east coast.

— The typhoon had maximum sustained winds of 162 kph (90 mph) with gusts reaching 216 ​kph.

— Okinawa and Amami island in Kagoshima prefecture are the main areas expected to be affected in Japan. In China, where the typhoon is expected to make landfall between late Sunday and early Monday, authorities have designated Dolphin ​as an orange-category typhoon — the second-highest level.

• Kerala govt makes cause of death medical certificate mandatory

— The Kerala government recently made Medical Certification Of Cause Of Death, or MCCD, mandatory for all deaths registered in the state.

— The MCCD is the official legal and medical document that states the exact sequence of medical conditions and events leading to a person’s death. 

— The MCCD is a key document that informs public health policy formation, disease surveillance, medical research and allied activities. 

— Under sections 10(2) and 10(3) of the Registration of Births and Deaths (Amendment) Act, 1969, it is stipulated that for all deaths occurring in medical institutions, the medical practitioner who treated the deceased must provide the registrar with a certificate regarding the cause of death in the prescribed format. In the case of deaths at home, the doctor who treated the persons during their terminal illness is required to report the cause of death.

— As per official data, Goa is the only state to achieve 100% implementation of MCCD.

• NBFC gold loan growth touches 69% in June, industry credit slows

— Credit against gold jewellery extended by non-banking financial companies (NBFCs) surged 69.3% year-on-year to Rs 3.41 lakh crore in June 2026, emerging as the fastest-growing major retail lending segment, according to data released by the Reserve Bank of India (RBI).

— Gold-loan growth by NBFCs accelerated sharply from 40.6% in June 2025, even as overall credit growth by NBFCs, including housing finance companies (HFCs), rose to 14.4% in June 2026 from 11.1% a year earlier.

— The surge in gold prices has prompted people to pledge gold holdings for the finance requirements. The RBI data show that outstanding credit extended by NBFCs stood at Rs 59.31 lakh crore at the end of June 2026, compared with Rs 51.86 lakh crore in June 2025.

PRELIMS ANSWER KEY 

1. (a), 2. (c), 3.(d), 4. (d), 5. (b), 6. (d)

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