1. 16th Finance Commission Proposes 41% Vertical Devolution
SUBJECT: POLITY & GOVERNANCE
- The 16th Finance Commission, chaired by Dr. Arvind Panagariya, has recommended maintaining the states’ share in the divisible pool of central taxes at 41% for the period 2026–31.
- A major shift in the horizontal devolution formula includes the introduction of “Contribution to GDP” with a 10% weightage, rewarding states with higher economic productivity.
- The Commission has significantly increased grants for Urban Local Bodies (ULBs) to 45% (up from 36%), totaling ₹3.56 lakh crore to address rapid urbanization.
- Fiscal Performance criteria have been revised, reducing the weightage of “Income Distance” to 42.5% to balance equity with efficiency.
- The report highlights a massive 400% increase in specific allocations for Kerala and a 300% rise for Maharashtra based on the new population-performance metrics.
- Concepts: Article 280 – Mandates the Finance Commission; Cooperative Federalism – The balance of fiscal powers between Centre and States.
2. India Revises GDP Base Year to 2022-23; FY26 Growth Pegged at 7.6%
SUBJECT: ECONOMY
- The National Statistical Office (NSO) has officially revised the base year for GDP calculation from 2011-12 to 2022-23 to better reflect the post-pandemic economic structure.
- Following the revision, India’s real GDP growth for FY25-26 is estimated at a robust 7.6%, driven by a 12.5% surge in the manufacturing sector.
- The Secondary Sector (Manufacturing and Construction) is expected to grow at 9.5%, outpacing the primary sector’s 2.8% growth.
- New data sources, including GSTN records and e-Vahan vehicle registration data, have been integrated into the measurement framework for higher accuracy.
- The government launched the Government Bank Dashboard to enable real-time monitoring of public funds and transition to proactive fiscal oversight.
- Concepts: Real vs. Nominal GDP – Adjusted for inflation; Base Year Revision – Necessary to capture structural changes in consumption and production.
3. “Vikko Sat-1”: Tamil Nadu Students Launch Stratospheric Mini-Satellite
SUBJECT: NATIONAL ISSUES (TAMIL NADU)
- Students from Ariyakudi Government Higher Secondary School in Sivagangai, Tamil Nadu, successfully launched Vikko Sat-1, a 600-gram mini-satellite.
- The satellite reached an altitude of 22 km in the stratosphere via a helium balloon to study the behavior of fungal spores in thin air.
- This indigenous project aims to provide real-time data on how stratospheric spores affect agricultural health and crop cycles when they descend.
- In a separate development, INS Anjadip, the third of eight Anti-Submarine Warfare Shallow Water Crafts (ASW SWC), was commissioned in Chennai.
- The Tamil Nadu government announced a new “District Innovator Fellowship” to identify and support grassroots innovators across all 38 districts.
- Concepts: Science and Tech in Education – Aligning with NEP 2020; Maritime Security – Enhancing coastal surveillance via the “Make in India” initiative.
4. India and Canada Reset Ties During PM Carney’s Mumbai Visit
SUBJECT: INTERNATIONAL RELATIONS
- Canadian Prime Minister Mark Carney arrived in Mumbai for a four-day state visit, marking a “vital reset” in India-Canada bilateral relations.
- Discussions are centered on the Comprehensive Economic Partnership Agreement (CEPA) and enhancing cooperation in critical minerals and green energy.
- India and Germany also launched a Climate Resilience Initiative to collaborate on urban heat-mapping and sustainable water management.
- The India-Israel Strategic Partnership reached a new milestone with a reported $8.6 billion defense deal for 2026, focusing on semiconductors and AI.
- PM Narendra Modi is scheduled to visit Israel to finalize the acquisition of the Sky Sting, a 6th-generation Beyond-Visual-Range Air-to-Air Missile (BVRAAM).
- Concepts: Strategic Autonomy – Balancing ties between Western and Middle Eastern partners; CEPA – A bilateral treaty to loosen trade restrictions.
5. DRDO Conducts Successful Trials of VSHORAD System
SUBJECT: DEFENCE
- The Defence Research and Development Organisation (DRDO) successfully conducted flight trials of the indigenous Very Short-Range Air Defence (VSHORAD) system.
- VSHORAD is a Man-Portable Air Defence System (MANPAD) designed to neutralize low-altitude aerial threats at ranges up to 8 km.
- The Indian Army secured the Team Championship title at the 6th Khelo India Winter Games 2026 held in Gulmarg, Jammu & Kashmir.
- The President of India undertook a historic sortie in the LCH Prachand, the indigenous Light Combat Helicopter, at Jodhpur Airbase.
- The Ministry of Defence confirmed that indigenization lists have now reached a stage where 100% of sub-components for certain missile systems are domestic.
- Concepts: Atmanirbhar Bharat – Reducing reliance on defense imports; VSHORAD – Critical for frontline troops against drones and tactical aircraft.
