2025 for January 1970

Nine Years After Demonetisation: Why Cash in Circulation Remains High

November 10, 2025

Demonetisation Latest News

Currency with the public has risen from ₹17.97 lakh crore in November 2016 to ₹37.29 lakh crore in October 2025, more than doubling since demonetisation.
Although cash holdings surged, the rapid economic growth of over 6% annually has kept the currency-to-GDP ratio below pre-demonetisation levels, indicating that India’s expanding economy has absorbed the rise in currency circulation.

Demonetisation of November 2016

On November 8, 2016, Prime Minister Narendra Modi announced the demonetisation of ₹500 and ₹1,000 notes, which made up 86% of the currency in circulation.
Effective from midnight of November 9, the move aimed to eliminate black money, curb fake currency, promote digital payments, and formalise the Indian economy.

Economic Disruption and Lasting Cash Dependence After Demonetisation

The 2016 note ban caused a sharp liquidity crisis, reducing demand and GDP growth by about 1.5%.
Many small businesses shut down amid cash shortages, and long queues formed at banks and ATMs.
Though new notes were introduced later, a mix of cash hoarding and continued reliance on currency pushed the money in public hands above pre-demonetisation levels, showing India’s enduring preference for cash.

Pandemic Led to Surge in Cash Holdings

During the Covid-19 lockdown (2020–21), people rushed to keep cash on hand for essentials such as groceries and medicines.
This precautionary behaviour drove a sharp rise in cash with the public, reversing the earlier post-demonetisation decline.

Understanding Currency with the Public and India’s Cash Usage Trends

According to the RBI, “currency with the public” is the total currency in circulation (CIC) minus the cash held by banks.
CIC includes all notes and coins issued by the central bank used in daily transactions.
As of October 17, 2025, cash with the public rose by ₹30,709 crore fortnightly and ₹3.13 lakh crore year-on-year.

Currency-to-GDP Ratio Trends

While the absolute amount of currency has increased, strong GDP growth—7.8% in Q1 FY2026—has stabilised the CIC-to-GDP ratio.
The ratio climbed from 8.7% (2016–17) to 14.5% (2020–21) during the pandemic, then fell to 11.11% in 2025, indicating a gradual shift towards digital payments.
A lower ratio signifies better monetary transmission, reduced cash dependence, and stronger inflation control.

Global Comparison

India’s 11.11% currency-to-GDP ratio remains higher than major economies—Japan (9–11%), Eurozone (8–10%), China (9.5%), Russia (8.3%), and the U.S. (7.96%).
The higher ratio in India reflects its large informal economy, cash preference, and slower—but improving—digital payment adoption.

Cash Still Dominates Despite Digital Growth

Despite efforts to build a “less-cash society,” India’s cash usage remains high.
The Unified Payments Interface (UPI) has revolutionised digital payments, processing 185.9 billion transactions in FY25 and growing at a 49% CAGR between FY23–FY25.
UPI’s deep penetration in tier-2 and tier-3 cities signals a strong digital shift, yet cash remains deeply entrenched in daily economic activity.

Conclusion

India’s cash dependency remains significant despite record digital payment growth. A stable currency-to-GDP ratio reflects the coexistence of cash comfort and digital confidence in the evolving Indian economy.

Source: IE | ToI

Demonetisation FAQs

Q1: How much has cash with the public increased since 2016?

Ans: Currency rose from ₹17.97 lakh crore in November 2016 to ₹37.29 lakh crore in October 2025, more than doubling since demonetisation.

Q2: What caused the rise in cash during the pandemic?

Ans: Lockdowns in 2020–21 led people to hoard cash for essentials like food and medicines, sharply increasing cash holdings despite digital options.

Q3: What is India’s current currency-to-GDP ratio?

Ans: It stands at 11.11% in 2025, down from 14.5% during the pandemic, showing steady digitalisation and better monetary policy efficiency.

Q4: How does India compare globally in cash use?

Ans: India’s ratio (11.11%) is higher than the US (7.96%), Eurozone (8–10%), and China (9.5%) due to its large informal, cash-dependent economy.

Q5: Is India becoming a less-cash economy?

Ans: While UPI transactions surged to 185.9 billion in FY25, widespread cash preference persists, reflecting coexistence of digital growth and cash dependence.

Soil Organic Carbon (SOC) Decline Due to Unscientific Fertiliser Use and Climate Change

November 10, 2025

Soil Organic Carbon (SOC) Latest News

A six-year-long comprehensive study (2017–2023) by the Indian Council of Agricultural Research (ICAR), and coordinated by the Indian Institute of Soil Science (IISS), Bhopal, has highlighted serious degradation of soil organic carbon (SOC) in India’s arable lands.
The study, covering 254,236 soil samples from 620 districts across 29 States, was published in the international journal Land Degradation & Development.

Key Findings of the ICAR Study

Soil organic carbon (SOC) and soil health:
- SOC is the foundation of soil chemistry, physics, and biology, influencing fertility and productivity.
- The study establishes that low organic carbon leads to higher micronutrient deficiency, while higher SOC improves soil quality.
- Imbalanced fertiliser use and climate change are major causes of SOC depletion.
Influence of climate and geography (Elevation and temperature):
- SOC is positively correlated with elevation — higher altitudes (hill regions) show higher organic carbon.
- SOC is negatively correlated with temperature — hotter regions like Rajasthan and Telangana show lower SOC levels.
- Rainfall, temperature, and elevation are the three primary natural determinants of SOC concentration.
Cropping patterns and fertiliser use:
- Role of cropping systems: Rice-based and pulse-based systems retain higher SOC due to microbial activity enhanced by irrigation. Wheat and coarse-grain systems show lower SOC accumulation.
- Fertiliser practices: Imbalanced use of urea and phosphorus, especially in Haryana, Punjab, and Western UP, has degraded SOC. States like Bihar, where balanced fertiliser application is practiced, maintain relatively healthier soil carbon levels.
Development of agri-ecological base map:
- Scientists developed an agro-ecological base map covering 20 agro-ecological regions to assess SOC variations.
- The map can guide policy decisions related to land degradation assessment, carbon credit, and sustainable agriculture planning.

Impact of Climate Change on SOC

SOC shows a strong negative correlation with rising temperatures, while rainfall variations have minimal impact.
Declining SOC reduces soil heat absorption and increases surface heat reflection, aggravating greenhouse gas effects.
Hence, SOC degradation directly links to climate change acceleration and carbon cycle imbalance.

Policy Implications and Recommendations

Promoting organic carbon sequestration: Identify soils with SOC less than 0.25% and promote organic carbon enrichment through improved cropping systems and irrigation facilities.
Incentivising carbon credit mechanisms: Introduce carbon credit schemes to reward farmers who sequester higher carbon through sustainable practices.
Expanding vegetative cover: Encourage perennial plantations and cover crops to maintain soil organic matter and prevent degradation.
Climate-smart crop management: Develop region-specific crop management practices to mitigate temperature effects and enhance SOC resilience.

Way Forward

Shift towards balanced fertiliser application, incorporating organic manures and bio-fertilisers.
Promote integrated nutrient management (INM) and climate-resilient agriculture under national missions like the National Mission for Sustainable Agriculture (NMSA).
Enhance soil health monitoring through digital soil maps and farmer awareness campaigns.

Conclusion

The ICAR study serves as a scientific wake-up call for India’s agricultural policy.
It establishes that unsustainable fertiliser use and rising temperatures are critically eroding soil organic carbon, the lifeline of soil fertility and climate stability.
Addressing this requires integrated soil-carbon management, carbon credit incentives, and climate-resilient farming systems — essential for achieving India’s goals of sustainable agriculture and carbon neutrality.

Source: TH

Soil Organic Carbon (SOC) FAQs

Q1: What are the findings of the recent ICAR study on soil organic carbon (SOC) degradation in India?

Ans: It found that unscientific fertiliser use and rising temperatures are causing significant loss of soil organic carbon across India’s arable lands.

Q2: How do climatic and geographical factors influence soil organic carbon distribution in India?

Ans: SOC is positively correlated with elevation and rainfall but negatively correlated with temperature.

Q3: What is the role of cropping systems and fertiliser practices in determining SOC content?

Ans: Rice and pulse-based cropping systems enhance SOC through higher microbial activity, while imbalanced fertiliser use depletes SOC.

Q4: What policy measures have been recommended by ICAR scientists to address soil carbon degradation?

Ans: ICAR suggests promoting organic carbon sequestration in low-carbon soils, incentivising farmers through carbon credits, adopting climate-smart crop management, etc.

Q5: Why is maintaining SOC crucial for sustainable agriculture and climate change mitigation?

Ans: SOC improves soil fertility, nutrient cycling, and heat absorption, while preventing greenhouse gas emissions.

India Pulls Out of Ayni Airbase in Tajikistan: Strategic Impact Explained

November 10, 2025

Ayni Airbase Latest News

India has withdrawn its personnel and equipment from the Ayni airbase in Tajikistan, its only full-fledged overseas military base, which it had developed and maintained for nearly two decades.
The base had provided strategic access to Central Asia and a geopolitical advantage over Pakistan, while symbolising India’s growing influence in a region shaped by Russia and China.

The withdrawal marks a significant shift in India’s regional military presence and strategic outreach in Central Asia.

Ayni Airbase: India’s Strategic Outpost in Central Asia

The Ayni airbase in Tajikistan, located about 20 km from Afghanistan’s Wakhan Corridor near PoK and China’s Xinjiang, served as a key strategic hub for India.
Initially used during India’s support to the Northern Alliance against the Taliban, it also facilitated the evacuation of Indian nationals from Kabul in 2021.
Originally a Soviet-era base, Ayni was renovated by India at a cost of around $80 million under a 2002 bilateral agreement, with work led by the Border Roads Organisation (BRO).
India upgraded it with a 3,200-metre runway, hangars, fuel depots, and air traffic control systems.
At its peak, about 200 Indian Army and IAF personnel, along with Sukhoi-30 MKI jets, were stationed there.
After the agreement lapsed, India began withdrawing its troops and assets in 2022, marking the end of its two-decade military presence at this vital Central Asian outpost.

Why India Withdrew from the Ayni Airbase

India stated that its bilateral agreement with Tajikistan for the rehabilitation and use of the Ayni airbase had ended, and the facility was formally handed back in 2022.
The Tajik government reportedly declined to renew the lease, influenced by pressure from Russia and China, both of which have strong strategic interests in the region.
India’s withdrawal of personnel and equipment followed quietly, with the development becoming public only recently.

Strategic Implications of India’s Withdrawal from Ayni Airbase

The Ayni airbase was India’s only operational overseas military base, giving it a crucial strategic foothold in Central Asia.
Located near Afghanistan’s Wakhan Corridor—bordering China’s Xinjiang and Pakistan-occupied Kashmir—the base offered India valuable security and intelligence advantages in a geopolitically sensitive region.
India’s withdrawal marks a setback for its regional influence, as it loses a key vantage point for monitoring activities involving China and Pakistan.
It also ends two decades of significant investment in building and maintaining this strategic outpost.

India’s Overseas Military Presence: Limited but Strategically Expanding

With the withdrawal from Ayni airbase in Tajikistan, India currently does not operate any full-fledged overseas military base in another country.

Strategic Infrastructure in Mauritius

In 2024, India and Mauritius inaugurated an airstrip and jetty on Agaléga Island in the western Indian Ocean.
These facilities extend India’s maritime reach across the Indian Ocean and enhance surveillance over waters near Africa’s east coast, countering China’s growing influence.
The upgraded airstrip now allows operation of P-8I maritime reconnaissance aircraft, strengthening India’s naval capabilities.

Military Cooperation with Bhutan

India maintains a training team in Bhutan, responsible for training the Royal Bhutan Army (RBA) and the Royal Bodyguard (RBG), symbolising deep military cooperation.
India has previously operated overseas during specific missions — from Bangladesh and Sri Lanka during the 1971 war and the IPKF deployment, respectively.

Global Context

While India has a modest overseas footprint, China operates a base in Djibouti and is reportedly expanding in Tajikistan.
The United States, by contrast, maintains over 100 overseas bases across key regions like South Korea, Qatar, Germany, and Japan, underscoring the global disparity in military reach.

Source: IE | BS

Ayni Airbase FAQs

Q1: What is the Ayni airbase?

Ans: A Soviet-era airbase in Tajikistan renovated by India for $80 million, serving as India’s key strategic foothold near Afghanistan, China, and Pakistan.

Q2: Why did India withdraw from Ayni airbase?

Ans: India ended its operations after the bilateral agreement expired in 2022; Tajikistan reportedly declined renewal due to Russian and Chinese pressure.

Q3: Why was Ayni airbase strategically important?

Ans: It offered India a presence in Central Asia, proximity to the Wakhan Corridor, and valuable intelligence access near Pakistan-occupied Kashmir and Xinjiang.

Q4: What are the implications of the withdrawal?

Ans: India’s pullout reduces its influence in Central Asia and ends two decades of military investment in a region critical to its security strategy.

Q5: Does India have other overseas bases?

Ans: No operational base now; however, India operates facilities in Mauritius’s Agaléga Island and maintains military cooperation in Bhutan and the Indian Ocean region.

India’s Nutritional Transformation – Rise of Functional Foods

November 10, 2025

Nutritional Transformation Latest News

India is focusing on nutritional transformation by promoting functional foods and smart proteins to tackle malnutrition and build sustainable, protein-rich food systems.

Understanding Functional Foods and Smart Proteins

Functional foods are those enriched with nutrients to promote health or prevent disease.
- Examples include vitamin-enriched rice, iron-fortified pearl millet, and omega-3-fortified milk.
- These foods are developed using cutting-edge technologies such as nutrigenomics, bio-fortification, bioprocessing, and 3D food printing.
- Their purpose is to enhance the nutritional value of foods already part of daily diets.
On the other hand, smart proteins represent a transformative shift in how proteins are sourced and produced.
They are developed through biotechnology to reduce dependence on conventional livestock-based production. Smart proteins can be:
- Plant-based proteins, derived from legumes and cereals to mimic meat and dairy.
- Fermentation-derived proteins, produced using microbial systems.
- Cultivated meat, grown directly from animal cells in bioreactors without slaughter.
These innovations aim to create sustainable, ethical, and climate-resilient protein alternatives while meeting rising consumer demand for healthier and environmentally responsible food options.

The Need for Nutritional Transformation in India

India’s nutritional imbalance is stark. Despite being one of the world’s largest food producers, over one-third of Indian children remain stunted, and micronutrient deficiencies are widespread.
While caloric intake has improved, protein deficiency remains a major concern, particularly in rural areas.
As India’s middle class expands and food habits evolve, people increasingly seek food that is not only filling but also nourishing.
This demands a transition from the current focus on calorie sufficiency to nutrient sufficiency.
Moreover, this transformation is essential to ensure that India’s food production systems remain sustainable and climate-conscious.
Traditional livestock farming contributes heavily to greenhouse gas emissions, land degradation, and water stress.
Functional foods and smart proteins, therefore, provide a scalable, sustainable, and health-oriented solution to India’s dual challenge of malnutrition and environmental sustainability.

India’s Progress in Functional and Smart Food Innovation

India’s biotechnology ecosystem is gradually aligning with this vision. Under the Biotechnology for Economy, Environment, and Employment (BioE3) Policy, the government has recognised functional foods and smart proteins as strategic innovation areas.
The Department of Biotechnology (DBT) and its public-sector partner Biotechnology Industry Research Assistance Council (BIRAC) have launched several funding programmes to support R&D in these domains.
- Research centres like the Indian Institute of Rice Research (IIRR) have developed zinc-enriched rice, while ICRISAT has pioneered iron-rich pearl millet.
- Private corporations such as Tata Consumer Products, ITC, and Marico are investing in fortified foods and health-oriented product lines.
The smart protein ecosystem is also expanding rapidly. As of 2023, India had more than 70 startups offering over 370 alternative protein products, including plant-based meat, eggs, and dairy substitutes.
However, challenges remain.
- India lacks a clear regulatory framework for novel foods such as cultivated meat and precision-fermented proteins.
- The Food Safety and Standards Authority of India (FSSAI) has yet to establish definitive guidelines for safety evaluation, labelling, and certification.
- Additionally, large-scale fermentation and biomanufacturing infrastructure remain underdeveloped.

Global Developments and India’s Opportunity

Globally, countries are racing ahead in this new food frontier. Japan pioneered functional foods regulation in the 1980s, while Singapore became the first country to approve cultivated chicken for commercial sale in 2020.
China has integrated alternative proteins into its national food-security strategy, and the European Union promotes sustainable protein production under its “Farm to Fork” initiative.
India, with its strong agricultural foundation, biotech capabilities, and large domestic market, is well-positioned to become a major global supplier of functional and smart protein products.
The global market for plant-based foods is projected to reach $85-$240 billion by 2030, creating opportunities for job creation, rural development, and export growth.

Way Forward

To harness the potential of functional foods and smart proteins, India needs a cohesive national framework that integrates food innovation with public health and sustainability goals. Key steps include:
- Developing regulatory clarity under FSSAI for safety, labelling, and certification of novel foods.
- Enhancing public-private partnerships to build fermentation and biomanufacturing infrastructure.
- Supporting farmer inclusion and skill development to connect traditional agriculture with biotechnology-driven food systems.
- Promoting consumer awareness to overcome scepticism around “lab-made” foods through transparent communication and education.
If executed effectively, India can achieve a nutritional revolution, one that ensures food is healthy, sustainable, and accessible to all.

Source: TH

Nutritional Transformation FAQs

Q1: What are functional foods?

Ans: Functional foods are fortified or enriched foods designed to enhance health or prevent diseases, such as vitamin-enriched rice or omega-3 milk.

Q2: What are smart proteins?

Ans: Smart proteins are sustainable protein sources developed through biotechnology, including plant-based, fermentation-derived, and cultivated proteins.

Q3: Why does India need nutritional transformation?

Ans: Despite progress, India faces malnutrition and protein deficiency, requiring a shift from food security to nutritional security.

Q4: Which country approved cultivated meat first?

Ans: Singapore became the first country to approve the commercial sale of cultivated chicken in 2020.

Q5: What challenges does India face in promoting functional foods?

Ans: Key challenges include lack of FSSAI guidelines, limited infrastructure, public scepticism, and the need for workforce upskilling.