UPSC Mains Current Affairs for 11 September 2026

by Vajiram & Ravi - 11 September 2026

Vajiram & Ravi provides Daily UPSC Mains Current Affairs for 11 September 2026, tailored for aspirants. We cover all relevant news and events crucial for the exam, ensuring you stay updated & well-prepared.

Registered Unrecognised Political Parties: Fixing Political Funding Gaps

September 11, 2026
Registered Unrecognised Political Parties

Registered Unrecognised Political Parties Latest News

  • A recent media investigation has revealed that six Registered Unrecognised Political Parties (RUPPs), all based in Gujarat, received donations of around Rs 1,700 crore in 2023-24. This is more than the combined donations of five nationally recognised parties, excluding the BJP, which received Rs 1,480 crore in the same period. 
  • The revelation has raised serious concerns about opaque political funding and the misuse of tax exemptions by non-serious parties.

What Are Registered Political Parties

  • Political parties are associations or bodies of individuals formed by citizens. 
  • Section 29A of the Representation of the People Act, 1951 (RP Act) lays down the requirements for registering a political party with the Election Commission (EC). 
  • After scrutiny of the documents submitted, the EC registers the party as RUPP.
  • RUPPs enjoy three key benefits:
    • Tax exemption on donations received under Section 12 of the Income Tax Act, 2025.
    • A common symbol for contesting general elections to the Lok Sabha or State Assemblies.
    • Twenty "star campaigners" during election campaigns.
  • In return, RUPPs must fulfil certain obligations:
    • Maintain details of individual donors contributing more than Rs 20,000 in a financial year and submit them to the EC annually. 
    • Under Section 29C of the RP Act, failure to do so leads to loss of income tax exemption.
    • Accept donations above Rs 2,000 only through cheque or bank transfer, as required by the Income Tax Act, 2025.

The Problem of "Letter Pad Parties"

  • As per the EC notification, India had more than 2,800 RUPPs as of July, but only around 750 contested the 2024 general elections. 
  • The rest have earned the moniker "letter pad parties", existing largely on paper.
  • The core issue is the EC's limited power. The RP Act does not explicitly empower the EC to de-register a party that fails to contest elections, conduct inner-party elections or file required returns. 
  • In Indian National Congress vs Institute of Social Welfare & Ors (2002), the Supreme Court held that the EC cannot de-register a political party under the RP Act, except in exceptional circumstances:
    • Registration obtained by fraud.
    • The party ceasing to owe allegiance to the Constitution.
    • The party being declared unlawful by the government.
  • The EC periodically publishes lists of de-listed RUPPs. The October 2025 notification contained over 800 such parties.

Why the Six Gujarat Parties Remain Active

  • The six parties named in the investigation are Aam Janmat Party, Bharatiya National Janata Dal, Garib Kalyan Party, New India United Party, Satyawadi Rakshak Party and Swatantrata Abhivyakti Party. 
  • All remain on the EC's active list as of October 2025 because they collectively fielded 15 candidates in the 2024 Lok Sabha elections. 
  • Contesting a token number of seats allows them to retain their registration and tax benefits.

Poor Compliance and Lack of Transparency

  • The Association for Democratic Reforms (ADR) periodically publishes reports on RUPP compliance. 
  • Its July 2025 report, analysing annual reports for 2022-23, found that reports of only 26 per cent of RUPPs were available in the public domain. 
  • Poor compliance with statutory requirements, combined with weak transparency, allows these parties to function as opaque channels for tax evasion and money laundering.

Way Forward

  • Empower the EC to de-register parties. The Law Commission, in its 255th report, recommended amendments to allow de-registration of a party that fails to contest elections for ten consecutive years. 
    • The EC, in its 2016 memorandum on electoral reforms, also sought powers to de-register parties. 
    • These reforms would enable action against non-serious parties that serve merely as a front for illegal financial transactions.
  • Strengthen enforcement. Even if de-registration powers are granted, parties may contest a few seats simply to meet the statutory requirement while continuing to misuse tax exemptions. 
    • In today's digital environment, the Income Tax Department and other enforcement agencies can easily monitor the transactions of such parties. 
    • Strict action against wrongdoing would act as a deterrent.
  • Introduce a vote threshold for tax exemptions. The EC had earlier suggested that tax exemptions be given only to parties that win seats in the Lok Sabha or State Assemblies. 
    • Analysts consider this undemocratic and extreme, since many parties contest elections consistently without winning. 
    • Instead, they propose a vote percentage threshold, similar to the 1 per cent vote threshold used for allotting common symbols to RUPPs. 
    • Only parties crossing this threshold should be eligible for tax exemptions on donations.

Conclusion

  • The RUPP framework was designed to nurture political participation, but weak statutory provisions and poor compliance have turned it into a loophole for opaque funding. 
  • Empowering the EC to de-register non-serious parties, strengthening enforcement and linking tax exemptions to a reasonable vote threshold would restore integrity to political funding without stifling genuine small parties.

Source: TH | BL

Registered Unrecognised Political Parties FAQs

Q1: What are Registered Unrecognised Political Parties?

Ans: Registered Unrecognised Political Parties are political associations registered with the Election Commission under Section 29A of the Representation of the People Act.

Q2: Why are RUPPs facing scrutiny over political funding?

Ans: RUPPs face scrutiny because some receive substantial donations despite limited electoral activity, raising concerns about opaque funding and misuse of tax exemptions.

Q3: What are “letter pad parties”?

Ans: “Letter pad parties” are RUPPs that largely exist on paper, with only around 750 of more than 2,800 parties contesting the 2024 elections.

Q4: Why can’t the Election Commission easily deregister RUPPs?

Ans: The Representation of the People Act does not explicitly empower the Election Commission to deregister parties for failing to contest elections or comply.

Q5: How can political funding through RUPPs be made more transparent?

Ans: The framework could empower deregistration, strengthen enforcement and link donation tax exemptions to a reasonable vote threshold rather than mere registration.

BRICS at 20: Why India Should Steer BRICS Beyond Confronting the West

September 11, 2026
BRICS at 20

BRICS at 20 Latest News

  • India hosts the 18th BRICS Summit in New Delhi on September 12–13, 2026, as the grouping marks 20 years since its formalisation in 2006. 
  • In this context, this article assesses what BRICS has achieved, the tensions within it, and how India can give it a practical developmental agenda instead of an anti-West posture.

BRICS vs G7: The Numbers

  • In 2000, Brazil, Russia, India and China together held roughly 23 per cent of global GDP (PPP), while the G7 held nearly 52 per cent. 
  • By 2024, the positions had reversed. The expanded 11-member BRICS accounted for about 36.8 per cent, while the G7's share fell below 29 per cent. 
  • Other key comparisons:
    • Population: BRICS ~3.7 billion (49.5 per cent of world); G7 ~771 million (10 per cent)
    • Nominal GDP: BRICS ~$28.5 trillion; G7 ~$46.6 trillion
    • Land area: BRICS ~39.7 million sq km; G7 ~21.7 million sq km
    • Oil production: BRICS ~43.6 per cent of global output
    • Natural gas: BRICS ~36 per cent of global production
    • Rare-earth reserves: BRICS ~72 per cent of global reserves
    • Agriculture: BRICS produces 42 per cent of world wheat, 52 per cent of rice, 46 per cent of soybeans
    • Growth: BRICS projected at 3.8 per cent in 2025 and 3.7 per cent in 2026, over three times the G7 average
  • BRICS accounts for roughly a quarter of global trade. 
    • Intra-BRICS merchandise trade reached $1.17 trillion in 2024, a 13-fold rise from $84 billion two decades ago. 
    • The bloc holds $5.2 trillion in foreign reserves and produces 78.2 per cent of global mineral coal.
  • However, per capita GDP tells a different story: the G7 averages around $53,000 while BRICS averages roughly $8,200. 
  • The bloc's weight comes from population and resource scale, not individual prosperity.

Evolution of BRICS

  • BRIC (Brazil, Russia, India, China) began in 2006, following a Goldman Sachs projection identifying these economies as future growth engines.
  • It evolved from a foreign ministers' dialogue into a leaders' forum. The first summit was held in Yekaterinburg, Russia, in 2009.
  • South Africa joined in 2010.
  • In 2024, Egypt, Ethiopia, Iran, Saudi Arabia and the UAE were added.
  • Indonesia became the 11th member in January 2025.
  • BRICS has grown from an economic grouping into a geopolitical entity presenting itself as the voice of the Global South. 
  • Yet its central grievance remains unchanged: global institutions have not kept pace with the shift in economic and political power. 

India's Strategic Engagement

  • India's participation reflects multi-alignment underpinned by strategic autonomy. New Delhi engages simultaneously with BRICS, the G20, the Quad and the SCO without alliance commitments. 
  • For India, multi-alignment is about creating room for manoeuvre, not choosing between power centres.
  • India's institutional contribution is significant. At the 2012 New Delhi summit, India proposed a BRICS development bank, which became the New Development Bank (NDB). 
    • By mid-2026, the NDB had approved about $44 billion across 141 projects.

Divergences: Anti-West Bloc or Economic Forum?

  • The most fundamental tension is over purpose. China and Russia position BRICS as a counterweight to Western dominance and the dollar. 
  • Beijing has driven expansion to project leadership of the Global South. Moscow, excluded from SWIFT and under sanctions, sees BRICS as an economic lifeline.
  • India and Brazil view BRICS as an economic and reform-oriented grouping. India does not share the enthusiasm for confronting the West. 
  • Two episodes illustrate this:
    • In 2023, Russia demanded payment for oil in yuan. India refused, insisting on dollars or rupees.
    • In February 2026, India signed a framework trade agreement with the US, reportedly agreeing to halt Russian oil purchases in exchange for reduced tariffs, prioritising national interest over bloc solidarity.

Expansion and the Consensus Problem

  • Expansion has introduced sharp contradictions. At the BRICS Foreign Ministers' meeting in New Delhi in May 2026, members failed to agree on a joint declaration because of a direct confrontation between Iran and the UAE, who are on opposite sides of an active conflict. 
  • India, as host, issued a chair's statement noting "differing views" on West Asia. Since BRICS works on consensus, expansion has made agreement on geopolitical crises far harder.

The Dollar Question

  • US President Donald Trump has threatened 100 per cent tariffs on BRICS nations if they create a new currency. This has largely shelved the idea of a single BRICS currency. 
  • Members have instead moved towards bilateral settlement in national currencies:
    • Russia and China settle over 90 per cent of trade in ruble and yuan.
    • Russia and India have moved about 90 per cent of direct payments to national currencies through Special Rupee Vostro Accounts authorised by the RBI.
    • India and the UAE have run a rupee-dirham system since July 2023.
    • India and Indonesia operationalised a rupee-rupiah framework in July 2026, with local-currency trade rising 163 per cent to $8.45 billion in the first two months of 2026.
  • The BRICS Pay system, to be unveiled at the New Delhi summit, will link Russia's SPFS, China's CIPS, India's UPI and Brazil's Pix, allowing settlement without dollar correspondent banks. 
  • India favours interoperable central bank digital currencies over a supranational currency, reflecting its UPI experience. 
  • Yet the dollar still holds 57.13 per cent of global central bank reserves (Q1 2026), and no BRICS member is building rupee, yuan or rand reserves at scale.

Pakistan's Membership Bid

  • Pakistan applied for membership in November 2023, but its bid remains contentious due to recurring balance-of-payments crises, IMF dependence, its record on terrorism, political instability and weak policy continuity. 
  • Its dependence on China could increase Beijing's influence, and it has limited capacity to contribute to the BRICS agenda.

Conclusion

  • The Iran-Israel-US conflict and the Russia-Ukraine war will test India's ability to secure a joint declaration. Visits by Xi Jinping and Vladimir Putin offer scope for high-level consultations. 
  • Beyond geopolitics, the summit will focus on resilient supply chains, reform of global financial institutions, strengthening the NDB and expanding intra-BRICS trade. 
  • Over the next decade, India can preserve the reform agenda while adding digital public infrastructure, climate finance, health cooperation, critical minerals, local-currency payments and inclusive connectivity.

Source: IE

BRICS at 20 FAQs

Q1: Why is BRICS at 20 significant for India?

Ans: BRICS at 20 provides India an opportunity to steer the grouping towards practical development, institutional reform, resilient supply chains and inclusive Global South cooperation.

Q2: How has BRICS evolved since its formation?

Ans: BRICS began with four economies in 2006, became a leaders’ forum in 2009, expanded further and emerged as a broader geopolitical grouping.

Q3: What is India’s strategic approach towards BRICS?

Ans: India follows multi-alignment and strategic autonomy, engaging simultaneously with BRICS, G20, Quad and SCO without committing itself to any alliance.

Q4: Why does India oppose turning BRICS into an anti-Western bloc?

Ans: India views BRICS primarily as an economic and reform-oriented grouping and does not support transforming it into a platform for confronting Western powers.

Q5: What should India prioritise during its BRICS chairship?

Ans: India should prioritise digital infrastructure, climate finance, health cooperation, critical minerals, local-currency payments, resilient supply chains and inclusive connectivity.

Mapping India’s Informal Economy

September 11, 2026
Informal Economy

Informal Economy Latest News

  • For the first time, the Ministry of Statistics and Programme Implementation (MoSPI) has released district-level estimates on the informal economy, drawing on the Annual Survey of Unincorporated Sector Enterprises (ASUSE), 2025. 
  • The data covers the unincorporated non-agricultural sector—broadly, establishments engaged in manufacturing, trade and other services.
  • The district-level estimates provide a more granular picture of women’s participation, wages, enterprise ownership and the geographical concentration of informal economic activity, which can help improve evidence-based policymaking.

Women’s Share in Informal Work

  • The data reveals a striking geographical divide in women’s participation among informal workers.
    • Highest women’s participation: Nirmal, Telangana (78% of all its informal workers are women); Imphal East, Manipur (70%); Nizamabad, Telangana (70%); Jagtial, Telangana (69%); and Bishnupur, Manipur (66%).
    • Lowest women’s participation: Srinagar, J&K (11%); Hathras, Uttar Pradesh (11%); Banaskantha, Gujarat (11%); Marigaon, Assam (9%); and Rudraprayag, Uttarakhand (7%).
  • All the top 10 districts for women’s share are located in eastern or northeastern India.  22 of the 25 districts with the highest female participation are from the region, with the remaining three in Jharkhand and Odisha. 
  • At the other end, Rudraprayag records just 7%. The all-India average is around 29%, while women constitute at least one-third of the informal workforce in 237 districts.
  • Telangana’s presence among the leading districts also highlights the importance of state- and district-specific socio-economic factors.

The Pay Divide

  • High female participation does not necessarily translate into uniformly higher earnings.
  • Among districts where women constitute at least half of the informal workforce, South West Khasi Hills, Meghalaya, is identified as the best-paying district.
  • Here, annual emoluments per hired worker is around ₹1.71 lakh, compared with an all-India average of about ₹1.3 lakh.
  • This underlines the need to examine both participation and the quality of employment, including remuneration, productivity and access to better economic opportunities.

Women’s Enterprise Ownership

  • The district-level data also reveals a strong relationship between women’s participation in the workforce and women’s ownership of enterprises.
  • Districts with high female participation tend to have a high proportion of female-owned proprietary establishments. 
  • Nirmal, which tops the female workforce participation ranking, also has nearly 80% of proprietary establishments owned by women.
  • This suggests that women’s economic participation in some regions is not confined to being workers; it also extends to entrepreneurship and ownership of informal enterprises.

Economic Activity Is Highly Concentrated

  • The distribution of informal economic activity is very different when measured by the absolute number of workers and establishments rather than women’s participation.
  • North 24 Parganas, West Bengal has the largest number of informal workers—about 21.3 lakh—and around 16.6 lakh establishments.
  • The top 10 districts by number of establishments account for around 11% of the total Gross Value Added (GVA) generated by the sector. The top 50 districts account for almost one-third of the sector’s GVA.
  • Thus, while women’s participation is particularly high in several northeastern districts, the scale of informal economic activity is concentrated in a relatively smaller set of districts across India.

Significance for Policy

  • The findings highlight three interconnected policy concerns -
    • Women’s labour-force participation: High female representation in informal work needs to be converted into productive and remunerative employment.
    • Women-led entrepreneurship: High female ownership of proprietary enterprises can be leveraged through credit, skilling, digitalisation and market access.
    • Regional targeting: Large inter-district variations demonstrate the need for granular, locally tailored policies rather than one-size-fits-all interventions.
  • Importance and challenges of the informal sector: It contributes significantly to employment, livelihoods and economic activity, while often operating outside the institutional protections available to formal workers.
  • Why district-level data matters:
  • The report covers 757 districts, although geographical coverage can vary because of administrative changes, including the creation of new districts and changes in district boundaries.
  • District-level data can help identify districts requiring focused measures for women’s employment, skilling, entrepreneurship, credit access and social protection.

Conclusion

  • The first district-level estimates of the informal economy provide an important statistical foundation for understanding India’s gendered and geographically uneven informal economy. 
  • Better granular statistics can strengthen cooperative and competitive federalism, outcome-based governance and evidence-based policymaking, particularly for achieving women-led development and inclusive growth.

Source: IE

Informal Economy FAQs

Q1: What does the first-ever district-level data on India’s informal sector reveal?

Ans: Sharp regional disparities in women employment, with Nirmal (Telangana) recording the highest female share at 78%.

Q2: Why is high female participation in informal work not necessarily synonymous with women’s economic empowerment?

Ans: Because participation must be assessed alongside wages, job quality, social security, productivity and enterprise ownership.

Q3: What is the significance of women’s ownership of informal enterprises for inclusive growth?

Ans: High female ownership of proprietary establishments indicates women’s role as economic decision-makers.

Q4: How can district-level data improve the governance of India’s informal economy?

Ans: Granular data can enable targeted, evidence-based interventions by identifying district-specific gaps in employment.

Q5: What does the geographical concentration of India’s informal economic activity imply for policymaking?

Ans: Policymaking should combine region-specific strategies with national measures to improve productivity, formalisation, etc.

FCNR(B) Deposits – Who Finally Bears the Foreign Currency Exchange Risk

September 11, 2026
FCNR(B) Deposits

FCNR(B) Deposits Latest News

  • Indian banks mobilised over $127 billion through FCNR(B) deposits under a special RBI swap facility, but with the window now closed, attention has turned to who bears the foreign exchange risk on the principal and interest.

About FCNR(B) Deposits

  • Foreign Currency Non-Resident (Bank) deposits, or FCNR(B) deposits, are term deposits that non-resident Indians can maintain with Indian banks in foreign currency rather than in rupees.
  • The key feature is that both the principal and interest are denominated in foreign currency, typically US dollars. 
  • This protects the depositor from rupee depreciation, a significant attraction for NRIs who would otherwise see the value of their savings erode if the rupee weakened.
  • These deposits are usually held for maturities of one to five years and are a long-standing instrument for attracting foreign currency into India's banking system.

The Special Swap Facility

  • The RBI introduced a special swap facility in June 2026 to encourage NRIs to place money in FCNR(B) deposits.
  • The context was pressure on the rupee from high oil prices and India's need to strengthen its foreign exchange reserves amid the West Asia conflict.
  • Response - the scheme attracted far more than anticipated:
    • Initial target: around $50 billion
    • Actual mobilisation: more than $127 billion
  • Given the scale of inflows, the RBI closed the window for fresh FCNR(B) deposits on August 31, 2026.
  • For banks, the scheme provided a relatively cheap source of foreign currency funding. For the country, it added substantially to foreign exchange reserves at a time of external pressure.

How the Risk Is Split

  • Because these deposits typically carry three-to-five-year maturities, the question of who bears currency risk when principal and interest fall due becomes important.
  • The answer is that the risk has been divided between the central bank and commercial banks.
  • The RBI Covers the Principal
    • Under the swap arrangement, the RBI shields banks from foreign exchange risk on the principal amount. The central bank bears the cost of hedging this exposure.
    • Estimates place this hedging cost at up to 3% annually.
    • In simple terms, the RBI is protecting the dollar value of the principal against movements in the rupee-dollar exchange rate, absorbing the cost of that protection itself.
  • Banks Handle the Interest
    • The swap facility does not cover the interest that banks must pay depositors in dollars.
    • This means banks have to arrange the dollars themselves for interest payments and manage that foreign exchange exposure independently.

The RBI's Cost-Benefit Position

  • The RBI's position is not purely a cost. The foreign currency received through these deposits adds to India's reserves, which can then be invested.
  • Recouping Reserves
    • By August 7, 2026, the RBI had recouped $31.2 billion of its foreign currency assets, equivalent to 55% of the amount mobilised at that point. 
    • Part of this may be invested in US securities, which offer higher yields.
  • Potential Returns
    • Estimates suggest the RBI could earn around 4.5% to 5% on the foreign exchange reserves generated through these deposits.
    • This could more than offset a hedging cost of up to 3%, assuming the foreign currency holdings are hedged for five years.
  • The Scale of the Cost
    • Research assuming FCNR(B) mobilisation of $65-70 billion and a 3% annual hedging cost calculated:
    • Annual notional cost: about $2.1 billion
    • Cumulative cost over five years: about $10.5 billion
    • Against current reserves of around $700 billion, this works out to roughly 1.45% of the reserve stock over five years, a modest figure in relative terms.

Unhedged Exposure Among Banks

  • Where the risk becomes more concerning is on the interest side.
  • Who Is Hedging - pattern varies by type of bank:
    • Foreign banks are largely hedging this exposure.
    • Most state-run banks and several private-sector Indian lenders have left it unhedged.
  • Why Banks Are Not Hedging
    • The main reason cited is cost. Hedging the foreign exchange risk on interest payments for three-to-five-year deposits costs banks about 3% a year.
    • Since interest on these deposits is paid at maturity rather than periodically, some banks have chosen to avoid that cost upfront. Their plan is to buy dollars in the spot market when the payment actually falls due, rather than locking in protection in advance.
    • One banker at a mid-sized state-run lender indicated the bank expected to handle payments through spot purchases when required.

What Happens If the Rupee Weakens

  • The consequences of leaving this exposure unhedged can be illustrated simply.
  • Consider a bank that must pay $1 million in interest:
    • If the dollar costs Rs. 95, the payment requires Rs. 9.5 crore.
    • If the rupee weakens and the dollar rises to Rs. 100 at maturity, the same payment requires Rs. 10 crore.
  • A bank that has hedged would be protected against this movement. A lender that has left the exposure unhedged absorbs the higher rupee cost directly.

The Broader Assessment

  • The FCNR(B) scheme achieved its immediate objective. It brought in substantially more foreign currency than targeted at a time when the rupee was under pressure and reserves needed strengthening.
  • The RBI has taken on the exposure associated with the principal through its swap, and appears likely to cover that cost through returns on invested reserves.
  • Banks continue to face currency risk on the interest payments, and a substantial share of that exposure remains unhedged by choice.
  • This means a portion of the currency risk has been deferred rather than removed, surfacing only when the deposits mature.

Source: TH

FCNR(B) Deposits FAQs

Q1: What are FCNR(B) deposits?

Ans: Foreign Currency Non-Resident (Bank) deposits are term deposits held by NRIs with Indian banks in foreign currency, protecting depositors from rupee depreciation.

Q2: How much was mobilised under the special swap facility?

Ans: More than $127 billion, against an initial target of about $50 billion. The window closed on August 31, 2026.

Q3: What does the RBI swap facility cover?

Ans: It shields banks from foreign exchange risk on the principal amount, with the RBI bearing the hedging cost of up to 3%.

Q4: Who bears the risk on interest payments?

Ans: Banks must arrange dollars for interest payments and manage that exposure themselves, as the swap does not cover interest.

Q5: Why have many Indian banks left the interest exposure unhedged?

Ans: Because hedging costs about 3% a year, and some banks prefer to buy dollars in the spot market when payments fall due at maturity.

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