1 Restoration of Statehood to Jammu and Kashmir
Why in the news
The Chief Minister of Jammu and Kashmir moved a resolution in the Legislative Assembly seeking the immediate restoration of full Statehood. The resolution stated that it was in addition to the Assembly resolutions of 26 June 2000 and 6 November 2024. Opposition members objected to the reference to the 2000 autonomy resolution, while several regional parties supported the Statehood demand.
| Exam lens | Relevance |
| Prelims | Article 3; Jammu and Kashmir Reorganisation Act 2019; distinction between Statehood, autonomy and special status |
| Mains | Asymmetric federalism, democratic representation, security and governance, role of Parliament and the Union |
| Essay | Unity through accommodation; constitutionalism in conflict-affected regions |
Background and timeline
| Period | Development |
| 1947 | The princely State acceded to India through an Instrument of Accession. |
| 1950 onwards | Article 370 provided a special constitutional arrangement; Article 35A later operated through a Presidential Order. |
| 26 June 2000 | The J&K Legislative Assembly adopted a resolution seeking greater autonomy. The Union government rejected the proposal. |
| 5 to 6 August 2019 | Constitutional changes made Article 370 inoperative in effect and Parliament enacted the Jammu and Kashmir Reorganisation Act 2019. |
| 31 October 2019 | The former State was reorganised into the Union Territory of Jammu and Kashmir with a legislature and the Union Territory of Ladakh without a legislature. |
| December 2023 | The Supreme Court upheld the 2019 constitutional action and recorded the Union’s assurance that Statehood would be restored at the earliest. |
| 6 November 2024 | The J&K Assembly adopted a resolution concerning restoration of the special constitutional status and dialogue with elected representatives. |
| 26 September 2026 | A fresh Assembly resolution sought immediate restoration of full Statehood. |
Constitutional framework
Article 3: Parliament may form a new State, alter the area, boundaries or name of an existing State, or reorganise territories by law. A Bill may be introduced only on the President’s recommendation. Where a State is affected, the President refers the Bill to its legislature for expressing its views within a specified period; those views are not binding on Parliament.
Article 4: A law made under Articles 2 or 3 may contain supplemental and consequential provisions and is not treated as a constitutional amendment under Article 368.
Union Territory with legislature: A Union Territory may have an elected legislature, but its constitutional position and division of powers differ from those of a State. Parliament retains wider authority, while the Lieutenant Governor exercises powers assigned by the Constitution and parliamentary law.
Statehood versus special status: Restoring Statehood concerns the federal status of the territory. Restoring Article 370-type special status or adopting an autonomy arrangement is a separate constitutional and political question. The terms should not be used interchangeably.
Why Statehood matters
- Democratic accountability: an elected State government ordinarily exercises wider responsibility over administration than a Union Territory government.
- Federal voice: Statehood strengthens participation in federal institutions and political ownership of policy decisions.
- Administrative responsiveness: closer control over local administration can improve policy adaptation and grievance redress.
- Political confidence: restoration can serve as a trust-building measure after prolonged central administration and constitutional reorganisation.
- Development and investment: predictable institutions, political stability and accountable administration can improve the investment climate.
Competing concerns
| Argument favouring early restoration | Concern requiring attention |
| Fulfils a public commitment and reinforces democratic normalisation. | Security threats and cross-border terrorism require sustained coordination. |
| Places more policy authority with elected representatives. | The exact distribution of powers during transition must be unambiguous. |
| May reduce alienation and strengthen public trust. | Political consensus is complicated by the separate debates on autonomy and Article 370. |
| Brings J&K closer to the ordinary federal framework. | Institutional capacity, policing and inter-agency mechanisms must remain effective. |
Analytical distinctions for Mains
1. Statehood is a question of federal status; autonomy refers to the degree of self-government; special status refers to constitutionally differentiated treatment.
2. An Assembly resolution carries political and representative weight, but restoration of Statehood requires parliamentary legislation under the constitutional framework.
3. A durable settlement must combine democratic legitimacy, security coordination, constitutional clarity and protection of regional diversity.
Mains answer framework
| Part | What to write |
| Introduction | Mention the 2019 reorganisation and the latest Assembly resolution. |
| Body 1 | Explain Article 3 and why Statehood differs from autonomy or special status. |
| Body 2 | Discuss democracy, federalism, development, security and institutional concerns. |
| Conclusion | Recommend a time-bound, consultative transition with clear safeguards and accountable governance. |
2 UPI Merchant Discount Rate and Public Subsidy
Why in the news
According to the supplied report, a Merchant Discount Rate on UPI transactions is scheduled to take effect on 15 October 2026. The Finance Ministry intends to consult the Indian Banks’ Association on the level and design of continuing subsidy because MDR collections may not fully cover the cost of the UPI ecosystem. The government has budgeted Rs 2,000 crore in 2026-27 for incentives promoting RuPay debit cards and low-value BHIM-UPI transactions.
Core concepts
Unified Payments Interface: An instant, interoperable retail-payment system operated by the National Payments Corporation of India. It enables bank-to-bank transfers through mobile applications using identifiers such as a UPI ID, mobile number or QR code.
Merchant Discount Rate: A fee associated with enabling and processing a merchant’s digital payment acceptance. It is generally borne by the merchant and distributed across entities that provide acquiring, issuing, switching and technology services.
Zero MDR policy: A policy under which prescribed payment modes do not levy a merchant charge. It lowers the immediate cost of acceptance but requires the ecosystem’s operating and investment costs to be met through other revenue or public support.
Public subsidy: Budget support can compensate participating banks and payment providers, especially for low-value transactions, to sustain acceptance and infrastructure while protecting inclusion.
How a UPI merchant payment works
| Stage | Function |
| Customer app | Initiates the payment and authenticates the payer. |
| Payer payment service provider and bank | Routes the instruction and debits the customer’s account. |
| NPCI switch | Provides interoperable switching and transaction routing within the UPI framework. |
| Payee service provider and acquiring bank | Receives the instruction, supports merchant acceptance and credits the merchant. |
| Settlement and support systems | Reconcile transactions, manage disputes, fraud controls, cybersecurity and uptime. |
The policy dilemma
| Objective | Policy challenge |
| Keep payments affordable | A visible fee may discourage small merchants or be passed to customers. |
| Ensure ecosystem sustainability | Banks and payment providers incur recurring costs for technology, fraud management, customer support and compliance. |
| Advance inclusion | Uniform pricing may affect micro-merchants more severely than large organised merchants. |
| Maintain innovation | Weak revenue can reduce incentives to invest in resilience and new services. |
| Protect fiscal space | An open-ended subsidy transfers private transaction costs to the public budget. |
Arguments around MDR
| For a calibrated MDR | For continued zero or subsidised MDR |
| Creates a direct revenue stream for infrastructure and service quality. | Preserves frictionless adoption among small merchants and consumers. |
| Reduces indefinite dependence on budget support. | Digital payments generate positive externalities such as formalisation and lower cash-handling costs. |
| Allows commercial incentives for acquiring and innovation. | A fee may be passed through indirectly even when formally charged to the merchant. |
| Can be differentiated by merchant size and transaction value. | Simple zero-cost messaging supports trust and behavioural adoption. |
GST dimension
The report notes that MDR is consideration for a payment service and may therefore attract GST. Any exemption or rate change falls within the GST framework and requires a recommendation of the GST Council rather than unilateral action by the Union Finance Ministry.
| Institution or provision | Role |
| Article 279A | Provides for the GST Council, a federal body comprising the Union and the States. |
| GST Council | Makes recommendations on rates, exemptions, model laws and other GST matters. |
| Union and State governments | Exercise legislative and executive functions within the constitutional GST structure. |
Stakeholder impact
| Stakeholder | Likely concern |
| Consumers | Risk of surcharge, reduced acceptance or hidden pass-through. |
| Micro and small merchants | Thin margins and limited bargaining power. |
| Banks and payment firms | Recovery of infrastructure, fraud and service costs. |
| Petroleum dealers | High transaction volumes but regulated or compressed dealer margins. |
| Government | Balancing inclusion, competition, resilience and fiscal cost. |
3 AFSPA Extension in Parts of the Northeast
Why in the news
The Union Home Ministry extended the Armed Forces Special Powers Act for another six months in specified areas of Manipur, Nagaland and Arunachal Pradesh. In Manipur, the Act applies across the State except the jurisdiction of 13 police stations in five valley districts. In Nagaland and Arunachal Pradesh, the extension remains geographically limited to notified districts and police-station areas.
About AFSPA
| Provision | Meaning |
| Section 3 | The competent government may declare an area disturbed when the use of armed forces in aid of civil power is considered necessary. |
| Section 4 | Special powers include use of force subject to statutory conditions, arrest without warrant, search without warrant and destruction of specified arms-related positions or shelters. |
| Section 5 | A person arrested must be handed over to the nearest police station with the least possible delay, together with a report of the circumstances. |
| Section 6 | Prosecution, suit or other legal proceeding for acts purportedly done under the Act requires prior sanction of the Union government. |
Important clarification
AFSPA does not create an unlimited licence to use lethal force. Statutory powers remain subject to conditions, proportionality, judicial review and constitutional protections. Operational necessity and individual accountability must be assessed together.
Who can declare a disturbed area
Under the 1958 Act, the Governor of a State, the Administrator of a Union Territory, or the Central Government may issue a disturbed-area notification for the whole or part of a State or Union Territory. The deployment of armed forces and the declaration of an area as disturbed are legally related but distinct decisions.
Judicial safeguards
| Decision | Principle relevant to UPSC |
| Naga People’s Movement of Human Rights v Union of India 1997 | The Supreme Court upheld the Act but required periodic review of disturbed-area declarations and adherence to safeguards and operational instructions. |
| Extra Judicial Execution Victim Families Association v Union of India 2016 | The Court stressed that allegations of excessive or retaliatory force are not insulated from investigation merely because an area faces insurgency or is under AFSPA. |
Why governments invoke AFSPA
- Persistent insurgency, armed groups, illicit weapons and cross-border movement may exceed ordinary policing capacity.
- The Act supplies a uniform legal framework for armed forces operating in aid of civil power.
- It can support area domination, protection of vital infrastructure and coordinated counter-insurgency operations.
- A geographically differentiated notification allows withdrawal where security improves while retaining coverage in vulnerable pockets.
Major concerns
- Civil liberties: broad arrest, search and force provisions create risk of disproportionate action.
- Accountability gap: prior sanction requirements may delay or obstruct prosecution and weaken public confidence.
- Alienation: prolonged exceptional law can deepen mistrust and reduce cooperation with security agencies.
- Federal friction: disagreement can arise between the Union, State governments and affected communities over necessity and territorial extent.
- Normalisation of exception: repeated six-month extensions may substitute for a measurable political and policing strategy.
Security and rights are mutually reinforcing
| Security requirement | Rights-compatible safeguard |
| Rapid response to armed threats | Clear rules of engagement, body-worn or operational records where feasible, and command supervision. |
| Intelligence-led operations | Verification, minimisation of civilian harm and prompt handover to police. |
| Protection of personnel | Fair investigation and due process rather than blanket impunity. |
| Continuity of operations | Periodic, area-specific review using transparent security indicators. |
Mains answer framework
| Part | What to write |
| Introduction | Define AFSPA and refer to the latest geographically limited extension. |
| Body 1 | Explain operational rationale and Sections 3 to 6. |
| Body 2 | Discuss rights, accountability, federalism and judicial safeguards. |
| Conclusion | Recommend a criteria-based, area-specific exit supported by stronger civil institutions. |
