Current Affairs for 27 January 2026

RBI Pushes for BRICS Digital Currency Linkage to Reshape Cross-Border Payments

Why in News ?

The Reserve Bank of India (RBI) has advised the Indian government to encourage BRICS countries to collaborate on using digital currencies for cross-border payments. Such a move could reduce transaction costs, speed up settlements, and lower dependence on the US dollar.

However, in the near term, it also poses risks related to financial stability, regulatory coordination, cyber security, and differences in digital infrastructure among BRICS members, which would require careful management.

Background: Understanding CBDCs and Global Payment Systems

Global cross-border payments are currently dominated by:

• The US dollar,
• The SWIFT messaging system,
• Correspondent banking networks.

These systems are often:

• Costly,
• Slow,
• Opaque,
• Vulnerable to geopolitical sanctions and financial exclusion.

In response, many countries are exploring Central Bank Digital Currencies (CBDCs) as a sovereign, digital alternative to cash and traditional banking instruments, with the potential to modernise both domestic and international payments.

RBI’s Push for BRICS CBDC-Based Cross-Border Payments

The RBI has reportedly proposed that India use its BRICS chairmanship in 2026 to encourage member countries to adopt their CBDCs for cross-border payments.

Key elements of the proposal include:

• Creation of a common payments framework using CBDCs.
• Coverage not only of the five founding BRICS members—Brazil, Russia, India, China, and South Africa—but also newer members such as Egypt, Ethiopia, Iran, the UAE, and Indonesia, with more countries likely to join.
• Integration of national CBDC systems into a shared settlement architecture to enable:
  • Faster settlements,
  • Lower transaction costs,
  • Reduced dependence on intermediary currencies like the US dollar.

Although not formally announced, the RBI is reported to have conveyed this idea to the Ministry of Finance, signalling a strategic push to reshape cross-border payment infrastructure.

About Central Bank Digital Currencies (CBDCs)

CBDCs are legal tender issued by a central bank in fully digital form.

Key features:

• In India, the e-rupee is the CBDC, functioning like physical currency but existing only digitally.
• Stored in digital wallets, not bank accounts.
• Transactions occur directly between wallets, with records maintained on a blockchain-based or distributed digital ledger.
• Unlike payment systems such as UPI, which transfer money between bank accounts, CBDCs transfer value itself.
• Unlike private cryptocurrencies (e.g., Bitcoin), CBDCs are:
  • Centrally issued,
  • Regulated,
  • Backed by the central bank,
  • Have a fixed value (1 e-rupee = 1 rupee).

Benefits of Using CBDCs for Cross-Border Payments

1. Greater Transparency and Traceability

• CBDCs operate on immutable digital ledgers.
• Once recorded, transactions cannot be altered or deleted.
• Enhances detection of money laundering, terror financing, and black-money flows, especially across borders.

2. Programmable Money with Policy Use-Cases

• CBDCs can be programmed with conditions such as:
  • Time limits (expiry dates),
  • Geographic restrictions,
  • Merchant category controls,
  • Purpose-specific usage.
• Additional metadata (payer–payee identity, transaction purpose) can be embedded, improving accountability and policy targeting.

3. Curbing Illicit Cross-Border Financial Flows

• Cross-border payments are a major channel for illegal money movement.
• CBDC-based systems provide authorities with stronger monitoring and enforcement tools than traditional correspondent banking.

4. Geopolitical and Strategic Advantages

• CBDCs can help India manage international payment challenges arising from sanctions and exclusion from dollar-dominated systems, as seen in trade with Iran and Russia.
• A CBDC-based framework offers a more sustainable alternative to settling trade purely in national currencies.
• Strengthens cooperation and financial autonomy within groupings such as BRICS.

Risks and Challenges of Using CBDCs for Cross-Border Payments

1. Regulatory and Technical Harmonisation

• Aligning legal, regulatory, and technical frameworks across multiple countries is complex and time-consuming.
• Differences in:
  • Financial laws,
  • Data protection regimes,
  • Cybersecurity standards,
  • Digital infrastructure,

may delay tangible benefits.

2. Financial Stability Risks

• Large-scale CBDC adoption could alter:
  • Capital flows,
  • Bank deposit structures,
  • Cross-border liquidity patterns, posing risks to financial stability if not carefully managed.

3. Cybersecurity and Operational Risks

• CBDC systems are high-value digital infrastructure and therefore attractive targets for cyberattacks.
• Ensuring resilience, redundancy, and system integrity across jurisdictions is a major challenge.

4. Geopolitical and Trade Risks

• Past statements by U.S. leadership suggest that efforts by BRICS to reduce reliance on the dollar could invite retaliatory measures, including higher tariffs.
• A shift toward CBDC-based payments could therefore expose India to:
  • Additional trade penalties,
  • Strategic pushback,
  • Compounded tariff pressures.

India will need to balance these near-term risks against the long-term gains in monetary sovereignty, financial efficiency, and strategic autonomy.

India’s March Towards Malaria Elimination: Progress, Pitfalls, and the 2030 Target

Why in News ?

Under the National Framework for Malaria Elimination (2016–2030), India aims to eliminate malaria by 2030, with an interim target of stopping indigenous transmission nationwide by 2027.

By the end of 2025, sustained surveillance and interventions had yielded major gains, with 160 districts across 23 States and Union Territories reporting zero indigenous malaria cases between 2022 and 2024—marking a significant milestone toward nationwide elimination.

Background: Understanding Malaria Elimination and Assessment

The World Health Organization (WHO) defines malaria elimination as the interruption of local transmission of all human malaria parasites nationwide for at least three consecutive years, supported by a robust surveillance and response system.

Based on this criterion:

• 47 countries or territories had been officially certified malaria-free by WHO as of mid-2025.
• Elimination does not imply the absence of risk; instead, it requires sustained vigilance to prevent re-establishment.

Malaria remains a major global public health challenge, especially in tropical and subtropical regions, making elimination a complex, long-term governance and health systems task.

India’s Current Status in the Fight Against Malaria

India has made substantial progress in reducing malaria burden over the past decade:

• According to the World Malaria Report 2025, India exited the WHO’s “High Burden to High Impact (HBHI)” group in 2024, reflecting sustained improvements in high-endemic States.
• Malaria cases declined by around 80% between 2015 and 2023.
• India is on track to meet the WHO Global Technical Strategy (2016–2030) target of a 75% reduction in incidence by 2025, having already achieved over 70% reduction by 2024.

However, challenges remain:

• India still accounted for 73.3% of the estimated 2.7 million malaria cases in the WHO South-East Asia Region in 2024.
• Localised transmission, population mobility, and cross-border importation continue to threaten elimination gains.

India’s Strategy for Eliminating Malaria

India’s elimination drive is guided by two key national policy frameworks:

1. National Framework for Malaria Elimination (2016–2030)
   • Sets the long-term vision and phased national targets.
2. National Strategic Plan (NSP) for Malaria Elimination (2023–2027)
   • Operationalises the framework with district-level strategies and time-bound interventions.

Key pillars of India’s strategy include:

• Transforming surveillance into a core intervention, ensuring real-time detection and response.
• Universal access to timely diagnosis and treatment through a “test, treat, and track” approach.
• Strengthening vector control through insecticide-treated nets, indoor residual spraying, and environmental management.
• Enhancing community participation and inter-sectoral coordination.

Key Challenges in India’s Malaria Elimination Drive

1. Migration and Mobility

• Migration from malaria-endemic neighbouring States increases the risk of reintroduction in areas that have achieved low or zero transmission.

2. Urban Malaria

• Urban settings present distinct challenges due to:
  • High population density,
  • Informal settlements,
  • Water storage practices,
  • Rapid construction and infrastructure expansion.

3. Hard-to-Reach and Vulnerable Areas

According to India’s NSP, elimination requires special focus on:

• Forest and tribal regions,
• Border districts,
• Large infrastructure project zones,
• Migrant populations and remote rural areas.

Regional and Cross-Border Transmission Risks

The World Malaria Report 2025 acknowledges significant progress in the WHO South-East Asia Region but highlights persistent challenges:

• Plasmodium vivax, responsible for nearly two-thirds of regional malaria cases, hinders elimination due to its ability to cause relapses.
• Localised transmission in India and Nepal, driven by cross-border movement, underscores the need for:
  • Sub-national strategies,
  • Regional cooperation,
  • Cross-border surveillance and response mechanisms.

Rising Drug and Insecticide Resistance

A growing concern is antimalarial drug resistance:

• WHO has warned of partial resistance to artemisinin derivatives, the backbone of current malaria treatment.
• There are also signs of declining efficacy of partner drugs and insecticides used for vector control.

In response, India is:

• Strengthening drug and insecticide resistance monitoring systems.
• Emphasising strict compliance with the 14-day radical treatment regimen for Plasmodium vivax to prevent relapses.
• Updating treatment guidelines based on surveillance data.

The Road Ahead for Malaria Elimination in India

India has reached an advanced stage in its malaria elimination journey:

• 34 States and Union Territories recorded an Annual Parasite Incidence (API) of less than one in 2023, according to the Ministry of Health and Family Welfare.
• Only Tripura and Mizoram remain above this threshold, indicating that malaria transmission is now geographically concentrated.

Experts emphasise that the next phase depends on:

• Data accuracy and robust surveillance, including mandatory reporting of even suspected malaria cases—especially by private healthcare providers.
• Intensified control measures in high-burden districts.
• Strengthened diagnostic capacity and rapid response systems.

Urban malaria remains a critical concern. Rapid urbanisation, expanding infrastructure, and household water storage practices in cities like Chennai create breeding grounds for mosquitoes. Addressing this requires:

• Strong municipal governance,
• Community engagement,
• Household-level behavioural change to prevent mosquito breeding.

As India targets zero indigenous malaria cases by 2027 and prevention of re-establishment thereafter, sustained political commitment, scientific vigilance, and community participation will be crucial to achieving and sustaining malaria elimination.

EPFO 3.0 Ushers in a Citizen-Centric, Tech-Enabled Social Security Architecture

Why in News ?

The Employees’ Provident Fund Organisation (EPFO), India’s premier retirement fund body, is undertaking a new phase of digital and institutional reforms under EPFO 3.0. These reforms aim to simplify access, enhance portability, and prepare the institution for expanded social security coverage under the Labour Codes.

EPFO is in the final stages of floating a tender for IT platform implementation and has shortlisted firms such as Wipro, Infosys, and TCS. Meanwhile, EPFO 2.0 is nearing completion, with only pension, claim, and annual accounts modules pending.

Background: Understanding EPFO and Its Role

Nature of the body: EPFO is a statutory organisation under the Ministry of Labour and Employment, established in 1952 to provide social security to the organised workforce.

Functions: It administers three major schemes:

• Employees’ Provident Fund (EPF), 1952 – retirement savings,
• Employees’ Pension Scheme (EPS), 1995 – post-retirement pension,
• Employees’ Deposit Linked Insurance (EDLI), 1976 – insurance cover for employees.

Scale and coverage:

• Nearly 8 crore active members,
• Manages a corpus of around ₹28 lakh crore,
• Coverage is mandatory for establishments with 20 or more employees, now extending across sectors under the Social Security Code.

With growing labour mobility, digitisation, and expansion of social security to new categories of workers, EPFO’s legacy systems have increasingly required structural and technological upgrades—prompting reforms under EPFO 2.0 and now EPFO 3.0.

EPFO 3.0 – Key Reforms Proposed

1. Centralised Core Banking Solution

• Introduction of a nationwide, centralised system similar to banking operations.
• Members can access accounts and resolve grievances at any EPFO office across India.
• Enhances portability for migrant and inter-State workers.
• Replaces fragmented, regionalised databases with a single unified platform.

2. New User-Friendly Digital Portal

• Revamped EPFO website with improved navigation and simplified interfaces.
• Integration of AI-backed language translation tools using BHASHINI (a MeitY initiative).
• Enables access in vernacular languages, promoting inclusivity and reducing language barriers for workers across regions.

3. Preparation for Labour Codes Implementation

• EPFO is likely to administer social security funds for unorganised workers.
• A separate fund is envisaged for gig and platform workers, aligning with provisions of the Social Security Code.
• This reform anticipates a significant expansion in the scale, scope, and diversity of EPFO’s beneficiary base.

EPFO 2.0 – Ongoing and Completed Reforms

1. Liberalisation of Withdrawal Norms

• Withdrawal categories streamlined from 13 to 3:
  • Essential needs (illness, education, marriage),
  • Housing needs,
  • Special circumstances.
• Minimum unemployment period for premature final settlement increased from 2 months to 12 months, discouraging premature depletion of retirement savings.

2. UPI-Linked Withdrawal Facility

• Members can withdraw funds using the BHIM UPI app.
• Separate display of:
  • Total balance,
  • Balance eligible for withdrawal,
  • Minimum mandatory 25% balance.
• Initial transaction cap proposed at ₹25,000 per withdrawal, balancing ease of access with financial prudence.

3. Self-Correction of Personal Details

• Members can correct personal details without employer or EPFO approval, including:
  • Name, date of birth, gender, marital status,
  • Dates of joining and leaving.
• For UANs issued before 1 October 2017, employers can make corrections without EPFO approval.
• Impact: About 32.23 lakh profile corrections completed till December 2025, significantly reducing grievance pendency and processing time.

Challenges and Way Forward

1. Managing Scale Expansion

• Inclusion of unorganised, gig, and platform workers will dramatically increase membership.
• Leveraging Digital Public Infrastructure (DPI) such as UPI and BHASHINI will be essential for scalable service delivery.

2. Ensuring Data Security and Cyber Resilience

• Centralised systems heighten risks of cyber threats and data breaches.
• Requires robust:
  • Cybersecurity architecture,
  • Data protection frameworks,
  • Phased implementation with strong IT governance.

3. Addressing Digital Literacy Gaps

• Many workers, especially in informal sectors, face low digital literacy.
• Capacity-building of EPFO staff and awareness campaigns among beneficiaries are critical.

4. Smooth Transition from Legacy Systems

• Migration from decentralised legacy systems to a centralised core banking platform must be seamless.
• Requires coordination with States and other stakeholders for effective rollout of Labour Codes.

New Cadre Allocation Framework for All India Services: From Zonal Clusters to Alphabetical Groups

Why in News ?

The Union government has notified a revised cadre allocation policy for the IAS, IPS, and IFoS, replacing the earlier zonal system with a new grouping structure, aimed at improving transparency, fairness, and national integration.

Background of Cadre Allocation in All India Services

Cadre allocation is a crucial administrative process that determines the State or Joint Cadre in which officers of the:

• Indian Administrative Service (IAS),
• Indian Police Service (IPS),
• Indian Forest Service (IFoS),

will serve throughout their careers.

The system seeks to balance two core objectives:

• National integration: Through inter-State exposure and mobility.
• Regional familiarity: By allowing limited home-State representation.

Since 2017, cadre allocation was governed by a zonal system, where:

• States were grouped into five zones,
• Candidates ranked zones and then cadres within those zones.

Over time, several concerns emerged:

• Uneven cadre distribution,
• Lack of transparency,
• Rigid outcomes that limited inter-regional mobility.

These concerns prompted the government to redesign the framework.

Introduction of the New Grouping Structure

The revised policy replaces the zonal arrangement with four alphabetical groups of State and Joint Cadres.

According to the notification issued by the Department of Personnel and Training (DoPT):

• All cadres are arranged alphabetically and distributed into four groups,
• The objective is to simplify, standardise, and depoliticise the allocation process.

New Group Composition

Group I

AGMUT (Arunachal Pradesh–Goa–Mizoram–Union Territories), Andhra Pradesh, Assam-Meghalaya, Bihar, Chhattisgarh

Group II

Gujarat, Haryana, Himachal Pradesh, Jharkhand, Karnataka, Kerala, Madhya Pradesh

Group III

Maharashtra, Manipur, Nagaland, Odisha, Punjab, Rajasthan, Sikkim, Tamil Nadu

Group IV

Telangana, Tripura, Uttarakhand, Uttar Pradesh, West Bengal

This replaces the earlier five-zone model that relied on geographical clustering, which often resulted in regional concentration of officers.

Objectives of the Revised Policy

The new framework aims to achieve:

• Greater transparency: Alphabetical grouping removes ambiguity in zone preferences.
• Fairer officer distribution: Addresses State concerns about skewed vacancy patterns.
• Stronger national integration: Promotes wider inter-State exposure.
• Administrative efficiency: A simpler structure enables faster and more predictable outcomes.

Determination of Vacancies

Vacancies will now be determined annually by cadre-controlling authorities:

• IAS: Department of Personnel and Training (DoPT)
• IPS: Ministry of Home Affairs (MHA)
• IFoS: Ministry of Environment, Forest and Climate Change (MoEFCC)

Key procedural changes:

• Vacancies will be calculated based on the cadre gap as on January 1 of the year following the Civil Services Examination.
• States must submit requisitions by January 31.
• Late submissions will not be entertained.
• Vacancy details will be publicly notified, enhancing transparency.

Insider and Outsider Allocation Rules

The revised policy reiterates strict norms:

• Insider allocation (home State cadre):
  • Based strictly on merit rank and vacancy availability.
  • Willingness to serve in the home State is now a mandatory condition.
• EWS category:
  • EWS vacancies will be treated as part of the unreserved category in cadre rosters.

These rules aim to curb discretionary interpretation and strengthen merit-based allocation.

Rotational Cycle System

A major procedural reform is the introduction of a rotational cycle system:

• Each cycle covers 25 candidates, corresponding to the total number of State and Joint Cadres.
• Within each cycle:
  • Higher-ranked candidates get priority.
  • Remaining candidates move to the next cycle.
• Outsider allocation follows insider placement.
• Priority is first given to Persons with Benchmark Disabilities (PwBD).

This system introduces predictability, objectivity, and procedural clarity into cadre placement.

Significance for Civil Services Administration

The revised cadre allocation policy is significant because it:

• Reduces litigation and grievances related to cadre postings.
• Strengthens cooperative federalism by addressing long-standing State concerns.
• Improves officer exposure to diverse administrative, cultural, and socio-political environments.
• Aligns recruitment practices with governance efficiency and broader public administration reforms.

Granth Kutir: A National Repository Showcasing India’s Classical Literary Heritage

Why in News ?

The President of India recently inaugurated Granth Kutir at Rashtrai Bhavan, marking a significant step toward preserving and promoting India’s classical literary and manuscript heritage.

Background: India’s Manuscript and Knowledge Tradition

India possesses one of the world’s richest manuscript traditions, spanning over two millennia and covering diverse domains such as:

• Philosophy, science, medicine, and governance,
• Literature, linguistics, and devotional traditions,
• Legal and constitutional thought.

However, a large portion of this heritage remains:

• Scattered across institutions and private collections,
• Vulnerable to physical decay,
• Underutilised for academic research and public awareness.

Recognising this, the Government of India has prioritised the documentation, conservation, and dissemination of manuscripts and classical texts as part of its broader cultural and educational policy.

About Granth Kutir

Nature of the Institution: Granth Kutir is a curated repository and knowledge centre located at Rashtrapati Bhavan, dedicated to showcasing India’s classical manuscripts and literary traditions.

Languages Covered: It houses manuscripts and books in major classical and regional languages of India, including:

• Tamil, Sanskrit, Kannada, Telugu, Malayalam, Odia, Marathi,
• Pali, Prakrit, Assamese, and Bengali.

Subject Coverage: The collection spans a wide range of disciplines:

• Epics and classical literature,
• Philosophy and linguistics,
• History and governance,
• Science and knowledge systems,
• Devotional and spiritual literature,
• The Constitution of India in these classical and regional languages.

Objectives and Significance of Granth Kutir

1. Cultural Awareness and Public Engagement

• The primary aim is to enhance citizens’ awareness of India’s rich cultural and literary heritage.
• It brings classical texts into the public domain, bridging the gap between scholarship and society.

2. Preservation and Conservation

• Granth Kutir contributes to safeguarding fragile manuscripts and rare texts by providing a curated, protected environment.

3. Educational and Research Value

• It serves as a resource hub for scholars, students, researchers, and cultural institutions.
• Encourages interdisciplinary research across history, linguistics, philosophy, and governance.

4. National Integration Through Knowledge

• By representing multiple languages and traditions, it reflects India’s pluralistic and civilisational unity.

Institutional Collaboration and Development

Granth Kutir has been developed through extensive collaboration involving:

• Central Government and State Governments,
• Universities and research institutions,
• Cultural organisations,
• Individual donors from across the country.

This collaborative model ensures:

• Diverse and representative collections,
• Academic credibility,
• National ownership of cultural heritage preservation.

Alignment with Gyan Bharatam Mission

Granth Kutir supports the vision of the Gyan Bharatam Mission, a comprehensive national initiative under the Ministry of Culture, Government of India, dedicated to:

• Systematic survey of manuscripts,
• Scientific documentation,
• Long-term conservation,
• Large-scale digitisation of India’s manuscript heritage.

By providing a physical and institutional anchor for manuscript heritage, Granth Kutir complements the Mission’s digital and conservation efforts, strengthening India’s knowledge ecosystem.