UPSC Daily News Summaries: Essential Current Affairs, Key Issues and Important Updates for Civil Services Preparation

A quick look at all the current affairs topics making headlines on October 2, 2025 and the possible questions for the exam.

1. RBI holds repo rate, keeps stance neutral

The Reserve Bank of India’s monetary policy committee (MPC) on Wednesday decided to maintain the status quo in terms of its two key monetary policy decisions: the policy rate and its monetary policy stance. The former continues to be at 5.5% and the latter will continue to be neutral. While holding rates constant was decided unanimously, two external MPC members asked for changing the policy stance from neutral to accommodative. However, RBI Governor Sanjay Malhotra made it clear that a rate cut in the next MPC meeting scheduled for December could well be a possibility as inflation continues not to be a risk, even as “growth continues to be below our aspirations”. Experts believe that RBI’s wait and watch mode in the October MPC is meant to assess the impact of tariff disruptions and GST boost to consumption during the festive season.

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Possible Question

Explain the role of the Monetary Policy Committee in balancing inflation and growth. How do changes in the repo rate and policy stance affect investment, consumption, and overall economic stability?

2. SC upholds scope of CCI’s deterrent measures

The Supreme Court last week upheld the power of the Competition Commission of India (CCI) to impose both structural and behavioural penalties on violators, clarifying that such deterrent measures are intrinsic to the mandate of the Competition Act, 2002. A two-judge bench of the court restored penalties imposed by CCI on the Kerala Film Exhibitors Federation (KFEF) and two of its office-bearers, who were found guilty of anti-competitive conduct by

boycotting the screening of films at Crown Theatre in Thrissur. The court held that the remedies imposed, which included restraining KFEF leaders from associating with the federation for two years in addition to financial penalties, were proportionate and essential to protect consumer interest and preserve market freedom.

Possible Question

Discuss the importance of competition law in ensuring consumer welfare and market efficiency. How do structural and behavioural remedies help curb anti-competitive practices in India?

3. SC ends ‘essential’ exemption, all vehicles to pay green cess for Delhi

The Supreme Court has removed a decade-old exemption on commercial vehicles carrying essential commodities from paying the environment

compensation cess (ECC) before entering the Capital, a decision that could ease the pollution load and traffic congestion at Delhi’s borders. In an order passed last Friday, a three-judge bench, headed by Chief Justice of India BR Gavai, directed all commercial vehicles entering Delhi to uniformly deposit ECC after the court found that its order granting exemption to essential goods carriers posed a “genuine” difficulty. First imposed in 2015, ECC is a fee levied on commercial vehicles entering Delhi to offset the Capital’s severe air

pollution. ECC was not levied on vehicles carrying essential commodities such as vegetables, fruits, milk, grains, egg, ice, among other items. As a result, all commercial vehicles had to stop for physical verification before they were allowed to enter, resulting in serpentine queues at the border gates.

Possible Question

Evaluate the effectiveness of fiscal instruments such as environment compensation cess (ECC) in tackling urban air pollution. What are the challenges in implementation and enforcement?

4. Cabinet approves 6-yr plan to boost pulses production

The Union Cabinet has approved a six-year plan to ratchet up the production of pulses, achieve self-sufficiency and end dependence on imports, clearing an outlay of ₹11,440 crore. The ‘Mission for Aatmanirbharta (self-sufficiency) in Pulses’, which will span from 2025-26 to 2030-31, was announced in the Union Budget in February, and the Cabinet’s approval of the proposal will kick off a series of steps to increase output through research on better technologies, higher yields and area expansion, according to an official statement. India, which is the world’s largest producer and consumer of pulses, has had to import up to a fifth of its total domestic demand. According to data from the Directorate General of Commercial Intelligence and Statistics, imports rose sharply to a record 6.7 million tonnes in 2024-25, from 4.7 million tonnes in 2023-24. Total output in 2024-25 stood at 25.23 million tonnes. While pulses consumption has increased over the years, domestic production has not kept pace with demand, leading to a 15–20% spurt in imports.

Possible Question

India is the largest consumer and producer of pulses, yet remains import dependent. Analyse the structural constraints in pulses production and suggest policy measures to achieve nutritional and farm-level self-sufficiency.

5. US govt shuts down amid partisan divide

The United States entered a government shutdown on Wednesday with President Donald Trump and Democrats in an acrimonious stand-off and banking on the other side to blink first in what could be a prolonged crisis. With the government out of money after Trump and Congress failed to agree on a funding deal, federal agencies — except for essential services — stopped work from midnight. Around 750,000 public sector workers are expected to be placed on furlough — a kind of enforced leave, with pay withheld until they return to work. Essential workers such as the military may be forced to work without pay. Shutdowns are a periodic feature of gridlocked Washington and are unpopular because multiple services used by ordinary voters, from national parks to permit applications, become unavailable. Democrats are withholding Senate votes to fund the government as leverage to try and force negotiations, on the back of grassroots anger over expiring health care subsidies and Trump’s dismantling of government agencies.

Possible Question

Government shutdowns are a recurring feature in the United States. Compare this with India’s budgetary and fiscal processes. How does India’s constitutional design safeguard against such executive-legislative deadlocks?

Editorial Snapshots

A. Need for caution amid the optimism around economy

The Reserve Bank of India (RBI) now believes that the Indian economy will grow at 6.8% this year, which is higher than its 6.5% projection made in August. It has also made a downward revision to its inflation forecast for the current fiscal year from 3.1% in August to 2.6% now. Both numbers paint a very good picture for the macro economy, with growth taking place without triggering inflation. But there is good reason to exercise some caution while drawing such a conclusion. It is very likely that some of the upward revision in growth forecast is on account of indexation issues — inflation ending up lower than expected — rather than a discernible rise in actual economic momentum. It does mean that the nominal growth rate — it is not the monetary policy committee’s mandate to project these – will likely end up lower than the budgetary forecast of 10.1%, leading to a squeeze in the fiscal room available to the Government. Given this, its decision in not cutting interest rates in October is justified. It is best that RBI waits for clarity on the impact of both the headwinds (tariff- and trade-related) and tailwinds (from GST reduction and the income tax reductions announced in the budget) on economic activity before cutting rates once again.

Possible Question

Distinguish between real and nominal GDP growth. Why is nominal growth crucial for fiscal planning, and what risks arise when real growth improves but nominal growth slows?

B. Towards a durable peace in West Asia

Donald Trump believes his peace plan for Gaza could lead to “eternal peace” in West Asia. The hyperbole aside, his 20-point plan seems the only bet yet to end the two-year war in Gaza. That, perhaps, is why most of the Islamic world, including Fatah, which heads the Palestinian National Authority in the West Bank, as well as India and Pakistan, have backed the plan. Among the proposals are: release of Israeli hostages in Hamas’s custody, disarmament of Hamas, a phased withdrawal of Israeli Defence Forces, an international stabilisation force in Gaza, and a government of technocrats, reporting to a “Board of Peace,” which in turn reports to Trump. The US president convinced Israeli PM Benjamin Netanyahu to back the plan, but it is unclear if the latter’s hardline associates are on board. Qatar and Saudi Arabia are invested in the plan, but Hamas is yet to commit to it. Questions about the future of an independent Palestine, an idea now endorsed by a large number of countries, and the agency of Palestinians in deciding their government, beg answers. The prospects of reconstructing Gaza as an international city may be alluring, but its distinct character as a Palestinian homeland will need to be preserved.

Possible Question

Critically examine India’s West Asia policy in light of ongoing conflicts in Gaza. How should India balance its energy security interests, diaspora concerns, and strategic partnerships with the US, Israel, and Arab states?

Fact of the day

Delhi has breathed its cleanest air in nearly a decade through the first nine months of 2025, barring the unusual respite during the Covid lockdowns. Data from the Central Pollution Control Board (CPCB) shows the city’s air quality index (AQI) between January and September has been better than in any comparable period since at least 2018, offering rare respite in a city where millions are accustomed to toxic skies nearly throughout the year. The Commission for Air Quality Management (CAQM), which released the data on Wednesday, credited both favourable weather conditions and regulatory efforts. Delhi’s average AQI for January to September 2025 stood at 164, according to CPCB. This is an improvement from 178 in 2024 and 167 in 2023, and significantly better than 193 in 2018. Only the Covid-hit year of 2020, when lockdowns brought life and emissions to a halt, recorded a lower figure of 144. Officials clarified that comparisons are made from 2018 onward, as data from 2016 and 2017 contained some inconsistencies and missing values.