On July 16th, 2025, India & the world witnessed important developments across various sectors. India is constantly moving forward, with new developments shaping its future. From positive shifts in the economy with inflation reaching a new low, to important changes in environmental rules for power plants, and a significant role in major international military exercises, the nation is making headlines across various sectors.

Awareness regarding daily UPSC current affairs is crucial for cracking the UPSC Prelims, excelling in UPSC Mains. It helps perform well in the UPSC personality test, thus becoming an informed and effective UPSC civil servant.

Below are the current affairs and headlines of the day taken from The Hindu, Indian Express, Press Information Bureau & All India Radio as required for UPSC preparation:

Inflation Hits New Lows

Source: The Hindu

Syllabus: GS Paper III (Economy)

IN NEWS

• Retail inflation (CPI) fell to a 77-month low of 2.1% in June 2025, primarily due to falling food prices.

• Wholesale inflation (WPI) entered the deflationary zone after 20 months, with a rate of -0.13%.

• Food inflation declined for the eighth consecutive month, creating room for possible RBI rate cuts.

Key Economic Data Points

• CPI Inflation (June 2025): 2.1%
• WPI Inflation (June 2025): -0.13%
• RBI Target (Medium-Term CPI): 4% (with a range of 2% to 6%)
• Core Inflation (June 2025): 4.4% (This is the highest since September 2023, showing that prices of goods other than food and fuel are still rising.)
• CPI Rural Inflation: 1.72%
• Urban Retail Inflation: 2.56%

Reasons for the Fall in Inflation

• Falling Food Prices: Prices of vegetables (down 19% year-on-year), pulses (down 11.8%), and meat & fish (third month of decline) have contributed significantly.
• Better Farming: Good agricultural production has led to lower cereal inflation, which is at a 41-month low of 3.7%.
• Favourable Base Effect: This is a statistical effect where the current fall looks bigger because inflation was very high in the same period last year.
• Lower Global Oil Prices: Cheaper crude oil worldwide has reduced costs for businesses and transport.
• Good Monsoon Forecasts: Predictions of healthy monsoon rains have helped prevent traders from increasing food prices too much.
• Lower Mandi Prices: Prices at local agricultural markets (mandis) for fresh produce also fell in early July.

Ways to Control Inflation

• Monetary Measures (by RBI):
  • Interest Rate Changes: RBI can increase or cut interest rates (like the repo rate, currently 5.5% after a 100 basis points cut in June 2025) to control money supply.
  • Open Market Operations (OMO): RBI buys or sells government bonds to manage the amount of money in the market.
  • Cash Reserve Ratio (CRR) Changes: Adjusting the amount of money banks must keep with the RBI.
• Fiscal Measures (by Government):
  • Subsidies: Providing financial support for essential items like food, fuel, and fertilizers to keep their prices low.
  • Tax Adjustments: Reducing taxes (e.g., excise duty on fuel) to lower prices.
  • Controlling Hoarding: Setting limits on how much stock traders can hold to prevent artificial price increases.
• Supply-side Interventions (by Government):
  • Buffer Stock Management: Maintaining reserves of essential goods (like through Public Distribution System - PDS, or Minimum Support Price - MSP) to release them when prices rise.
  • Import/Export Rules: Controlling the import and export of key goods to ensure enough supply in the country.
  • Investing in Logistics: Improving roads, storage, and cold chains to reduce food waste after harvest.

Read the article on Inflation!

New Rules for Power Plant Emissions

Source: The Hindu

Syllabus: GS Paper III (Environment)

IN NEWS

• The Union Ministry of Environment, Forest and Climate Change (MoEFCC) recently exempted a majority of thermal power plants from installing Flue Gas Desulphurisation (FGD) units.

• The government justified the change as a "scientifically justified shift" aimed at cost-effectiveness and climate coherence.

• Critics view it as a rollback of environmental safeguards, as only 11% of India’s 600 thermal power units now need FGDs, despite an earlier 2015 mandate for universal compliance.

Why was FGD needed earlier?

• In 2015, the MoEFCC made it compulsory for coal-fired power plants to install FGDs because:
  • At that time, India was the world's largest emitter of SO2.
  • There were serious air pollution problems, especially in northern India.
  • SO2 greatly contributes to the formation of fine dust particles (PM2.5), which are very harmful to health.
• However, deadlines for installing FGDs were delayed many times due to high costs and problems with getting the equipment.

Government's New Norms (2025)

• Now, only 11% of thermal power units (not entire plants) must install FGDs. These are mainly units located near cities with bad air quality.
• Thermal power plants that are more than 10 kilometers away from cities with over 1 million people are now exempt from installing FGD.

Justification for the New Norms

• The government states that India's overall SO2 levels are declining.
• Indian coal naturally has a low sulphur content (around 0.5%).
• Installing FGDs is very expensive: about ₹1.2 crore per megawatt (MW), which would cost an estimated ₹2.54 lakh crore for all plants.
• The government argues that removing all SO2 might not bring huge additional benefits in reducing PM2.5.
• Reports from 2023 suggest that SO2 levels in 490 out of 492 cities in India are within safe limits.

Issues with the New Norms (Critics' View)

• Critics say these new rules weaken the environmental protections set in 2015.
• This goes against what developed countries usually do, where FGD installation is standard.
• It could make pollution control efforts less strict, especially as India's demand for electricity grows.
• Just looking at overall SO2 levels might not show the actual local pollution near power plants or how SO2 combines with other pollutants to cause harm.
• Making only a few plants install FGDs might seem unfair to them.
• India might face criticism from other countries for relaxing environmental standards during international climate talks.

Talisman Sabre Exercise Expands

Source: The Hindu

Syllabus: GS Paper II (International Relations)

IN NEWS

• Talisman Sabre 2025, the largest-ever edition of the biennial joint military exercise hosted by Australia.

• The exercise includes over 35,000 personnel from 19 nations, including India, marking a significant step in Indo-Pacific security cooperation.

Key Features of Talisman Sabre 2025

• Participants: More than 35,000 personnel from 19 countries, including:
  • Australia, USA, India, Japan, UK, Canada, France, Germany, South Korea, Indonesia, Singapore, Philippines, New Zealand, Fiji, Thailand, Tonga, Norway, the Netherlands, and Papua New Guinea.
• Locations:
  • The main training area is Shoalwater Bay, Queensland (Australia).
  • For the first time, part of the exercise is also being hosted in Papua New Guinea, expanding its geographical reach beyond Australia.
• Key Equipment Used:
  • HIMARS (High Mobility Artillery Rocket Systems), which Australia recently bought from the US.
  • The exercise involves working together with large military assets like aircraft carriers, submarines, fighter jets, and special forces.