{"id":3995,"date":"2026-02-17T07:02:41","date_gmt":"2026-02-17T07:02:41","guid":{"rendered":"https:\/\/arkreflectionsias.com\/studentportal\/?p=3995"},"modified":"2026-02-23T05:01:40","modified_gmt":"2026-02-23T05:01:40","slug":"current-affairs-17th-february-2026","status":"publish","type":"post","link":"https:\/\/arkreflectionsias.com\/studentportal\/2026\/02\/17\/current-affairs-17th-february-2026\/","title":{"rendered":"Current Affairs 17th February 2026"},"content":{"rendered":"

1. NGT Gives clearance to Great Nicobar project<\/span> <\/strong><\/h2>\n

GS PAPER III-Environment <\/strong><\/p>\n

Context :<\/strong> A special six-member NGT bench upheld the project’s environmental clearance.<\/p>\n

    \n
  • Strategic Approval:<\/strong> The tribunal cited “adequate safeguards” and the “strategic national importance” of the project.<\/li>\n
  • Ongoing Legal Battle:<\/strong> Despite the NGT ruling, opposition remains high, with activists looking to the Calcutta High Court.<\/li>\n<\/ul>\n

    What is the Great Nicobar Project?<\/strong><\/p>\n

      \n
    • Mega Infrastructure:<\/strong> A \u20b981,000 crore “Holistic Development” plan by NITI Aayog for Great Nicobar Island.<\/li>\n
    • Major Components:<\/strong> Includes a Transshipment Port, a Greenfield International Airport, and a modern township.<\/li>\n
    • Strategic Hub:<\/strong> Aims to leverage the island\u2019s location near the Malacca Strait to rival Singapore’s port.<\/li>\n
    • Power & Energy:<\/strong> Features a 450 MVA gas and solar-based power plant to support the new urban center.<\/li>\n<\/ul>\n

      Role of National Green Tribunal (NGT)<\/strong><\/p>\n

        \n
      • Judicial Oversight:<\/strong> The NGT reviewed petitions alleging violations of coastal and forest regulations.<\/li>\n
      • High-Powered Committee:<\/strong> It mandated a committee to investigate concerns like coral reef destruction.<\/li>\n
      • Final Ruling:<\/strong> Concluded that the project could proceed if all environmental conditions are strictly followed.<\/li>\n
      • Balance of Interests:<\/strong> The NGT sought to balance national security\/economic growth with ecological protection.<\/li>\n<\/ul>\n

        Environmental Concerns Risked<\/strong><\/p>\n

          \n
        • Massive Deforestation:<\/strong> Requires felling nearly 10 lakh trees in a UNESCO Biosphere Reserve.<\/li>\n
        • Biodiversity Loss:<\/strong> Threatens the Leatherback Sea Turtle, Nicobar Megapode, and endemic macaques.<\/li>\n
        • Coral Reef Damage:<\/strong> Dredging and construction could destroy vital marine ecosystems at Galathea Bay.<\/li>\n
        • Seismic Vulnerability:<\/strong> The island sits on a major fault line, making it highly prone to tsunamis.<\/li>\n<\/ul>\n

          Tribal and Local Opposition<\/strong><\/p>\n

            \n
          • Indigenous Rights:<\/strong> The Shompen (a PVTG) and Nicobarese tribes face loss of ancestral lands.<\/li>\n
          • Consent Issues:<\/strong> Tribal councils withdrew earlier consent, claiming they were pressured or misinformed.<\/li>\n
          • Genocide Warnings:<\/strong> Experts warned that the population influx could wipe out the isolated Shompen tribe.<\/li>\n
          • Health Risks:<\/strong> Outside contact could introduce diseases to which the tribes have no immunity.<\/li>\n<\/ul>\n

            Government Jurisdictions<\/strong><\/p>\n

              \n
            • Implementing Agency:<\/strong> The Andaman and Nicobar Islands Integrated Development Corporation (ANIIDCO).<\/li>\n
            • Central Oversight:<\/strong> NITI Aayog conceived the plan; MoEFCC provides the environmental clearances.<\/li>\n
            • Tribal Governance:<\/strong> Ministry of Tribal Affairs oversees rights under the Forest Rights Act (FRA).<\/li>\n
            • National Security:<\/strong> The Ministry of Defence views the project as vital for Indo-Pacific maritime security.<\/li>\n<\/ul>\n

               <\/p>\n

              2. Transitioning to green steel<\/span><\/h2>\n

              GS paper III-Environment<\/p>\n

              Context :<\/strong>The Ministry of Steel recently organized a high-level “Chintan Shivir” at NISST to accelerate green steel production in the secondary sector.<\/p>\n

                \n
              • Taxonomy Implementation:<\/strong> India’s Green Steel Taxonomy (introduced Dec 2024) is now operational, providing star ratings based on emission intensity.<\/li>\n
              • Carbon Market Launch:<\/strong> The Indian Carbon Market (CCTS) is set to begin trading in October 2026, imposing emission targets on the steel sector.<\/li>\n<\/ul>\n

                What is Green Steel?<\/strong><\/p>\n

                  \n
                • Low-Carbon Production:<\/strong> Steel manufactured without fossil fuels, aiming for near-zero $CO_2$ emissions.<\/li>\n
                • Indian Definition:<\/strong> Under India\u2019s taxonomy, steel is “green” if emission intensity is below 2.2 $tCO_2$ per tonne<\/strong> of finished steel.<\/li>\n
                • Key Technologies:<\/strong> It utilizes Green Hydrogen-based Direct Reduced Iron (H2-DRI) and Electric Arc Furnaces (EAF).<\/li>\n
                • Resource Circularity:<\/strong> It prioritizes scrap metal recycling and renewable energy (solar, wind) over coal-fired blast furnaces.<\/li>\n<\/ul>\n

                  Why Green Steel is Important for India<\/strong><\/p>\n

                    \n
                  • Net Zero 2070:<\/strong> Essential for achieving India\u2019s pledge to reach net-zero emissions by 2070.<\/li>\n
                  • Emission Hotspot:<\/strong> The steel sector accounts for roughly 12% of India\u2019s total $CO_2$ emissions<\/strong>.<\/li>\n
                  • Decoupling Growth:<\/strong> Allows India to reach its 300 MTPA production target by 2030<\/strong> without a massive surge in emissions.<\/li>\n
                  • Sectoral Leadership:<\/strong> Decarbonizing steel supports the greening of dependent sectors like automotive, construction, and infrastructure.<\/li>\n<\/ul>\n

                    Government Efforts & Policy Initiatives<\/strong><\/p>\n

                      \n
                    • National Green Hydrogen Mission:<\/strong> Allocated \u20b9455 crore for pilot projects using hydrogen in steelmaking.<\/li>\n
                    • National Steel Policy 2017:<\/strong> Aims for 300 MT capacity by 2030 while transitioning toward energy efficiency.<\/li>\n
                    • Greening Steel Roadmap:<\/strong> A comprehensive action plan by the Ministry of Steel to guide industry transition.<\/li>\n
                    • Steel Scrap Recycling Policy (2019):<\/strong> Promotes urban mining to increase scrap availability for low-carbon EAF production.<\/li>\n<\/ul>\n

                      Biggest Challenges: The “Green Premium”<\/strong><\/p>\n

                        \n
                      • High Production Cost:<\/strong> Green steel currently faces a significant “green premium” (extra cost) compared to traditional coal-based steel.<\/li>\n
                      • Hydrogen Prices:<\/strong> Green hydrogen must fall to $1.5\u2013$1.6\/kg<\/strong> (from current >$3\/kg) to be economically viable.<\/li>\n
                      • Capital Intensity:<\/strong> Transitioning requires massive upfront investment in new technology and renewable energy infrastructure.<\/li>\n
                      • Infrastructure Gaps:<\/strong> Limited availability of low-carbon hydrogen and reliable high-capacity renewable grids.<\/li>\n<\/ul>\n

                        Administrative & Policy Changes<\/strong><\/p>\n

                          \n
                        • Green Certification:<\/strong> NISST is now the nodal agency for green steel certification, already certifying 76 industries.<\/li>\n
                        • Star Rating System:<\/strong> A 3-to-5 star system now identifies and rewards low-emission steel products.<\/li>\n
                        • National Mission for Sustainable Steel:<\/strong> A proposed \u20b915,000 crore mission focusing on the secondary steel sector.<\/li>\n
                        • Mandatory Disclosures:<\/strong> Shifting from voluntary to mandatory emission reporting under the new carbon credit framework.<\/li>\n<\/ul>\n

                          Global Economic Pressure on India<\/strong><\/p>\n

                            \n
                          • CBAM Impact:<\/strong> The EU\u2019s Carbon Border Adjustment Mechanism penalizes carbon-intensive imports, risking billions in Indian exports.<\/li>\n
                          • Global Supply Chains:<\/strong> International brands (automotive\/electronics) are increasingly demanding green materials to meet their own ESG goals.<\/li>\n
                          • Trade Barriers:<\/strong> Failure to decarbonize could lead to Indian steel being locked out of high-value Western markets.<\/li>\n<\/ul>\n

                            Strategic Importance for India<\/strong><\/p>\n

                              \n
                            • Indo-Pacific Competitiveness:<\/strong> Ensures Indian industry remains a competitive global manufacturing hub in a carbon-conscious world.<\/li>\n
                            • Avoid Carbon Lock-in:<\/strong> Prevents new plants from being “locked” into coal technology for the next 30-40 years.<\/li>\n
                            • Energy Security:<\/strong> Reducing coking coal imports by shifting to domestic renewable energy and green hydrogen.<\/li>\n
                            • Building the Future:<\/strong> 70-75% of the infrastructure needed for “Viksit Bharat 2047” is yet to be built, requiring green materials.<\/li>\n<\/ul>\n

                              Public Procurement as a Solution<\/strong><\/p>\n

                                \n
                              • Draft GPP Policy:<\/strong> Proposes mandating 25-37% green steel usage<\/strong> in all public infrastructure projects.<\/li>\n
                              • Demand Aggregation:<\/strong> Bulk government orders can provide the scale needed to drive down production costs.<\/li>\n
                              • Market Signal:<\/strong> Public procurement creates a guaranteed market, encouraging private investment in green technology.<\/li>\n<\/ul>\n

                                Way Forward<\/strong><\/p>\n

                                  \n
                                • Scale Renewables:<\/strong> Rapidly integrate the 9 GW of announced captive renewable capacity into steel plants.<\/li>\n
                                • Enhance Scrap Infrastructure:<\/strong> Formalize the scrap collection sector to ensure raw material for secondary steelmakers.<\/li>\n
                                • CCUS Deployment:<\/strong> Pilot Carbon Capture, Utilization, and Storage for existing blast furnaces that cannot shift immediately to hydrogen.<\/li>\n
                                • Financial Support:<\/strong> Introduce production-linked incentives (PLI) and credit guarantee facilities for green transitions.<\/li>\n<\/ul>\n

                                   <\/p>\n

                                  3. Copper is pricing scarcity at a time of plenty<\/span><\/h2>\n

                                  GS paper I-Geography<\/p>\n

                                  CONTEXT :Projections indicate a refined copper shortfall of approximately 330,000 tons<\/strong> this year, the largest gap in recent history.<\/p>\n

                                    \n
                                  • Prices surged above $6.00 per pound<\/strong> in January 2026 due to acute supply disruptions and low global inventories.<\/li>\n
                                  • Critical Mineral Status:<\/strong> In late 2025, the United States<\/strong> officially added copper to its “critical minerals” list, following the EU\u2019s earlier 2023 designation.<\/li>\n
                                  • Supply Shocks:<\/strong> Major output losses at the Grasberg mine (Indonesia)<\/strong> and disruptions in Chile\/Peru have severely tightened the market.<\/li>\n<\/ul>\n

                                    The “Near Perfect Lockstep”: EVs vs. Copper Demand<\/strong><\/p>\n

                                      \n
                                    • Copper Intensity:<\/strong> Battery Electric Vehicles (BEVs) require roughly 83 kg of copper<\/strong>, compared to only 23 kg<\/strong> for traditional internal combustion engines.<\/li>\n
                                    • Elasticity Linkage:<\/strong> Between 2016 and 2024, copper demand elasticity relative to EV sales exceeded 1.0<\/strong>, meaning copper consumption grew faster than adoption.<\/li>\n
                                    • No Substitutes:<\/strong> Despite research into aluminum, copper remains irreplaceable for EV motor windings, battery cell connections, and inverters due to conductivity.<\/li>\n
                                    • Infrastructure Multiplier:<\/strong> Every EV sale triggers secondary demand for charging stations and grid upgrades, both of which are copper-intensive.<\/li>\n<\/ul>\n

                                      Explosive EV Growth vs. Slow Copper Supply<\/strong><\/p>\n

                                        \n
                                      • Unprecedented Sales:<\/strong> Global EV sales expanded from 0.75 million units in 2016 to nearly 20 million units by 2025<\/strong>.<\/li>\n
                                      • Mining Lag:<\/strong> It takes 7 to 10 years<\/strong> (and sometimes up to 17 years) to bring a new copper mine from discovery to production.<\/li>\n
                                      • Declining Ore Grades:<\/strong> Average ore grades have fallen to below 0.6%<\/strong>, requiring miners to process twice as much rock to extract the same amount of metal.<\/li>\n
                                      • Underinvestment:<\/strong> A decade of subdued capital expenditure in mining has left the industry unable to meet the 600,000-ton annual new supply requirement.<\/li>\n<\/ul>\n

                                        Shifting Global Power Balance: China\u2019s Dominance<\/strong><\/p>\n

                                          \n
                                        • Consumption Lead:<\/strong> China currently absorbs approximately 60% of the world\u2019s refined copper<\/strong> to fuel its manufacturing base.<\/li>\n
                                        • Integrated Supply Chain:<\/strong> China controls over 70% of global battery cell production<\/strong>, effectively dictating copper flow in the EV market.<\/li>\n
                                        • Strategic Stockpiling:<\/strong> In February 2026, China moved to aggressively expand its national copper inventories to hedge against supply risks.<\/li>\n
                                        • Smelter Control:<\/strong> While most mining occurs in Latin America, China dominates the smelting and refining<\/strong> stage of the value chain.<\/li>\n<\/ul>\n

                                          Broader Policy & Governance Implications<\/strong><\/p>\n

                                            \n
                                          • Resource Nationalism:<\/strong> Countries like Chile and Peru are introducing higher royalties and stricter environmental regulations, affecting global output.<\/li>\n
                                          • Energy Security:<\/strong> Copper is no longer viewed as a mere commodity but as a national security asset<\/strong> vital for defense and power grids.<\/li>\n
                                          • Tariff Wars:<\/strong> The US implementation of Section 232 tariffs<\/strong> on refined copper has created disjointed global inventory pools and price premiums.<\/li>\n
                                          • Social License Challenges:<\/strong> Indigenous rights and water scarcity concerns are increasingly stalling project approvals in major mining jurisdictions.<\/li>\n<\/ul>\n

                                            Way Forward<\/strong><\/p>\n

                                              \n
                                            • Recycling Acceleration:<\/strong> Expanding “urban mining” is crucial, though currently, scrap only covers roughly 30% of global needs<\/strong>.<\/li>\n
                                            • Permitting Reform:<\/strong> Governments are under pressure to compress the 15-year permitting timeline for critical minerals to meet climate goals.<\/li>\n
                                            • Supply Diversification:<\/strong> Western nations are launching programs like “Project Vault” to build strategic reserves and reduce dependence on single-source chains.<\/li>\n
                                            • Technological Innovation:<\/strong> Incentivizing mining technologies that can process low-grade ores or seawater-cooled extraction methods.<\/li>\n<\/ul>\n

                                               <\/p>\n

                                              4. Creative Industries as Growth Engines: The Rise of the Orange Economy<\/strong><\/span><\/h2>\n

                                              Context :<\/strong>Creative industries, often called the “Orange Economy,” gained prominence in the\u00a0Union Budget 2026-27<\/strong>\u00a0and\u00a0Economic Survey 2025-26<\/strong>.<\/p>\n

                                                \n
                                              • These documents spotlight their potential as growth drivers, projecting\u00a02 million jobs<\/strong>in the Animation, Visual Effects, Gaming, and Extended Reality (AVGC-XR) sector by 2030.<\/li>\n
                                              • The Budget also allocated funds for\u00a015,000 Content Creator Labs<\/strong>in schools to nurture young talent.<\/li>\n<\/ul>\n

                                                Understanding the Orange Economy<\/strong><\/p>\n

                                                The\u00a0Orange Economy<\/strong>\u2014coined by Iv\u00e1n Duque and Felipe Buitrago\u2014captures the ecosystem fueled by\u00a0creativity, culture, and intellectual property (IP)<\/strong>. It links traditional elements like arts, crafts, and festivals with cutting-edge digital fields such as gaming, VFX, and OTT platforms. In India, it’s emerging as a way to turn imagination into a globally traded asset.<\/p>\n

                                                Vital Statistics on India’s Creative Sector (2024-26)<\/strong><\/p>\n

                                                  \n
                                                • Market Size<\/strong>: Media and entertainment (M&E) hit\u00a0\u20b92.5 trillion ($30 billion)<\/strong>\u00a0in 2024, eyeing\u00a0\u20b93.06 trillion<\/strong>\u00a0by 2027.<\/li>\n
                                                • Job Impact<\/strong>: Sustains over\u00a010 million jobs<\/strong>, with creative roles offering\u00a088% higher pay<\/strong>\u00a0than average.<\/li>\n
                                                • Export Surge<\/strong>: Creative services exports jumped\u00a020%<\/strong>\u00a0in 2023, broadening India’s services beyond IT.<\/li>\n
                                                • Gaming Boom<\/strong>: Revenue at\u00a0\u20b9232 billion<\/strong>, serving\u00a0500 million gamers<\/strong>.<\/li>\n
                                                • VFX Spend<\/strong>: Blockbusters now dedicate\u00a025-30%<\/strong>\u00a0of budgets to visual effects.<\/li>\n<\/ul>\n

                                                  Driving Economic Growth Through Creativity<\/strong><\/p>\n

                                                    \n
                                                  • Youth Employment Boost<\/strong>: AVGC-XR draws talent from smaller cities; e.g., studios booming in Pune and Indore to meet 2 million job targets by 2030.<\/li>\n
                                                  • Cultural Influence Abroad<\/strong>: Content exports enhance soft power and tourism; e.g.,\u00a0RRR<\/em>\u00a0and\u00a0Project K<\/em>\u00a0turned filming sites into global hotspots.<\/li>\n
                                                  • Local Economic Ripple<\/strong>: Events like 2025 stadium concerts in Ahmedabad spiked hotel bookings and gigs by\u00a040%<\/strong>.<\/li>\n
                                                  • Tech Innovations Spillover<\/strong>: Gaming tools like Unreal Engine aid medical training and defense simulations.<\/li>\n
                                                  • Inclusive Access<\/strong>: Platforms empower rural creators; e.g., DD National’s Creator\u2019s Corner integrates micro-influencers into ads.<\/li>\n<\/ul>\n

                                                    Major Government Steps Forward<\/strong><\/p>\n

                                                      \n
                                                    • WAVES Summit 2025<\/strong>: Launched WAVES Bazaar for global script and music trading.<\/li>\n
                                                    • IICT Mumbai<\/strong>: National hub for AVGC-XR training.<\/li>\n
                                                    • School Labs Initiative<\/strong>:\u00a0\u20b9250 crore<\/strong>\u00a0for 15,000 labs teaching digital storytelling.<\/li>\n
                                                    • Create in India Challenge<\/strong>: Talent contest linking winners to events in Tokyo and Madrid.<\/li>\n<\/ul>\n

                                                      Hurdles Facing the Sector<\/strong><\/p>\n

                                                        \n
                                                      • Algorithm Dependency<\/strong>: Global platforms’ changes caused\u00a030% revenue drops<\/strong>\u00a0for influencers.<\/li>\n
                                                      • Funding Shortfalls<\/strong>: MSMEs can’t collateralize IP; Bengaluru studios turn to costly private loans.<\/li>\n
                                                      • Talent Gaps<\/strong>: Graduates master tools but lack storytelling; noted at 2026 IGDC.<\/li>\n
                                                      • Tech Barriers<\/strong>: High rendering costs force outsourcing due to limited local HPC.<\/li>\n
                                                      • Event Red Tape<\/strong>: 10-15 clearances delay festivals, prompting 2026 cancellations.<\/li>\n<\/ul>\n

                                                        Path Forward for Sustainable Growth<\/strong><\/p>\n

                                                          \n
                                                        • IP-Based Loans<\/strong>: Partner RBI to accept copyrights as collateral.<\/li>\n
                                                        • Unified AVGC Policy<\/strong>: Roll out model state incentives.<\/li>\n
                                                        • Homegrown AI Tools<\/strong>: Cut costs for animation and dubbing.<\/li>\n
                                                        • Event Streamlining<\/strong>: Activate LEDC for single-window approvals.<\/li>\n
                                                        • Original Content Focus<\/strong>: Move from Hollywood outsourcing to global Indian IP licensing.<\/li>\n<\/ul>\n

                                                           <\/p>\n

                                                          5. PM Modi Launches PM RAHAT Scheme<\/strong><\/span><\/h2>\n

                                                          Government schemes <\/strong><\/p>\n

                                                          Context: <\/strong>India faces over 1.5 lakh road accident deaths yearly, with 50% preventable via Golden Hour treatment. Launched recently by the Ministry of Road Transport and Highways,\u00a0PM RAHAT<\/strong>\u00a0ensures cashless care up to\u00a0\u20b91.5 lakh<\/strong>\u00a0per victim, easing financial barriers and boosting emergency response.<\/p>\n

                                                          Core Purpose\"\"<\/strong><\/p>\n

                                                          PM RAHAT (Road Accident Victim Hospitalization and Assured Treatment) delivers\u00a0national cashless emergency coverage<\/strong>\u00a0up to \u20b91.5 lakh for 7 days post-accident. It prioritizes life-saving intervention within the critical first hour to cut fatalities.<\/p>\n

                                                          Implementing Agencies<\/strong><\/p>\n

                                                            \n
                                                          • MoRTH<\/strong>: Oversees policy and links via\u00a0eDAR<\/strong>\u00a0platform for accident reporting.<\/li>\n
                                                          • NHA<\/strong>: Manages claims through\u00a0TMS 2.0<\/strong>\u00a0system.<\/li>\n<\/ul>\n

                                                            Primary Goals<\/strong><\/p>\n

                                                              \n
                                                            • Prevent deaths from delayed medical aid.<\/li>\n
                                                            • Build robust emergency response networks.<\/li>\n
                                                            • Assure hospitals of quick payments for seamless care.<\/li>\n<\/ul>\n

                                                              Standout Features<\/strong><\/p>\n

                                                                \n
                                                              • Coverage Limit<\/strong>: \u20b91.5 lakh cashless per victim for 7 days.<\/li>\n
                                                              • Golden Hour Priority<\/strong>: Ties into\u00a0112 helpline<\/strong>\u00a0for fast hospital transfers.<\/li>\n
                                                              • Treatment Timeline<\/strong>: 24 hours (non-critical); 48 hours (life-threatening).<\/li>\n
                                                              • Digital Flow<\/strong>: eDAR-TMS integration for claims; police verifies in 24-48 hours.<\/li>\n
                                                              • Funding Source<\/strong>:\u00a0MVAF<\/strong>\u2014insured via premiums; others from budget.<\/li>\n
                                                              • Fast Payouts<\/strong>: State approvals lead to payments in 10 days.<\/li>\n
                                                              • Oversight<\/strong>: District Road Safety Committees (DM-led) handle grievances.<\/li>\n<\/ul>\n

                                                                Strategic Impact<\/strong><\/p>\n

                                                                  \n
                                                                • Tackles India’s high accident toll where timely aid saves half the victims.<\/li>\n
                                                                • Supports\u00a0Good Samaritan<\/strong>\u00a0efforts by streamlining aid without legal hassles.<\/li>\n
                                                                • Advances digital integration in health and road safety systems.<\/li>\n<\/ul>\n

                                                                   <\/p>\n

                                                                  6. A budgetary signal as bonds cannot bear it all<\/span><\/h2>\n

                                                                  GS paper III-Economy<\/p>\n

                                                                  Context :India’s Union Budget 2026 has introduced key financial reforms, such as a market-making framework for corporate bonds, signaling a strategic pivot toward a market-driven financial system.<\/p>\n

                                                                    \n
                                                                  • These measures address a core structural flaw where banks bear excessive long-term risks typically handled by bond markets in advanced economies.<\/li>\n
                                                                  • They gained prominence due to Budget 2026 announcements (presented in February 2026), aiming to deepen the corporate debt market amid ongoing efforts to reduce banking fragility and boost economic resilience.<\/li>\n<\/ul>\n

                                                                    Reasons in News<\/strong><\/p>\n

                                                                      \n
                                                                    • Budget 2026 Focus<\/strong>: Reforms like bond market liquidity enhancement, total-return swaps, partial credit guarantees for infrastructure, and REIT expansion were highlighted to rebalance India’s bank-heavy financing model.<\/li>\n
                                                                    • Persistent Banking Stress<\/strong>: Recurring crises (e.g., post-2017 recapitalizations exceeding \u20b93.2 lakh crore) underscore the need to shift long-term project funding from banks to markets.<\/li>\n
                                                                    • Global Benchmarks<\/strong>: India’s corporate bonds at 15-16% of GDP lag far behind the US (much higher), China, and Europe, prompting policy action for better risk distribution.<\/li>\n
                                                                    • Economic Imperatives<\/strong>: With infrastructure needs rising, these steps support monetary policy effectiveness and credit flow to SMEs, aligning with India’s growth goals.<\/li>\n<\/ul>\n

                                                                      Key Issues<\/strong><\/p>\n

                                                                        \n
                                                                      • Financial System Imbalance<\/strong>: Shallow corporate bond market (15-16% GDP) vs. robust G-Secs (90% GDP) forces banks to hold 60-65% of corporate debt, unlike 30% in US or 40% in Europe.<\/li>\n
                                                                      • Maturity Mismatch Risks<\/strong>: Banks use short-term deposits to fund 15-20 year projects (e.g., highways, power plants), leading to fragility when delays occur.<\/li>\n
                                                                      • Fiscal and Credit Distortions<\/strong>: Taxpayer-funded bank bailouts misallocate capital, starving SMEs despite ample total credit.<\/li>\n
                                                                      • Monetary Policy Hurdles<\/strong>: Bank-laden risks hinder interest rate pass-through, unlike fluid repricing in deep bond markets.<\/li>\n<\/ul>\n

                                                                        Reform Objectives<\/strong><\/p>\n