Benchmark 10-year bond yield settled at around 6.77%, sharply higher than the previous session with its highest close since mid-Jan 2025.
About Bond Yields
- It represents the annual return an investor earns by holding a security until maturity, taking into account both interest payments and the principal repayment relative to the purchase price.
- It has inverse relations with bond prices. A rise in yields translates into lower bond prices in the secondary market.
- Impact of Higher bond yields: Reduce the market value of existing bond; raise borrowing costs for companies, etc.
Researchers reported that Albert Einstein’s General Theory of Relativity has passed the most rigorous test conducted.
About General Theory of Relativity
- Published in 1915, expanding the theory of Special Relativity published 10 years earlier by Albert Einstein.
- The theory explains gravity as the curvature of space-time caused by mass and energy, not as a force.
- It showed that gravitation has a speed, same as the speed of light and it is understood as how mass wraps around space and time.
- The bigger the mass, the more it wraps things.
- Significance: Understanding gravity; predicts merger of black holes, etc.
Astronomers have identified rare "time-warped" supernovas whose light, split by gravitational lensing, has partially reached Earth while the rest is delayed by decades due to space-time distortion.
- A supernova is when a star has reached the end of its life and explodes in a brilliant burst of light.
- Significance: It provides critical data to measure the expansion rate of the universe and study early cosmic history.
About Gravitational Lensing
- It occurs when a massive object such as a galaxy cluster behaves like a lens and warps space and time causing light to bend, distort, and magnify as it passes around the massive object.
Economic Survey 2025-26 cited the Power Gap Index to show that India is operating below its full strategic potential.
About Power Gap Index
- It is a secondary analysis derived from the Asia Power Index, an annual index produced by the Australia-based Lowy Institute.
- It measures resources and influence to rank the relative power of states in Asia.
- Ranks 27 countries and territories through 131 indicators across 8 thematic measures:
- Military capability and defence networks, Economic capability and relationships, Diplomatic and cultural influence, as well as Resilience and Future resources.
- As per 2025 Edition, India is operating below its full strategic potential with a power gap score of -4.0.
The 16th Finance Commission has recommended that heatwaves and lightning strikes be included in India’s list of nationally notified disasters.
About Nationally Notified Disasters
- They are specific disaster categories that are recognised under the Disaster Management Act, 2005 for the purpose of relief, response, and funding support from government disaster funds (State Disaster Response Fund (SDRF) and National Disaster Response Fund (NDRF)).
- Currently it includes cyclones, droughts, earthquakes, fires, floods, tsunamis, hailstorms, landslides, avalanches, cloudbursts, pest infestations, frost and cold waves.
Supreme Court emphasises the ‘polluter pays’ principle, urging higher environmental penalties for large corporations.
Key Highlights of Judgment
- Deterrence over Tokenism: Emphasised that penalties must act as a real deterrent, especially for large corporations for whom small fines are inconsequential.
- Held that penalties must be proportionate to the financial capacity of violators, as uniform fines fail to deter large corporations.
- Reiterated the Polluter Pays Principle, mandating that entities causing environmental harm must bear the cost of remediation.
- Linked environmental protection to Article 21, underscoring the need for stringent enforcement to uphold sustainable development.
India is on track to reach debt-to-GDP ratio of 50±1 percent by 2030-31 as debt-to-GDP ratio is estimated to be 55.6 percent of GDP in BE 2026-27.
- Debt-to-GDP ratio is being increasingly used as the primary policy target instead of fiscaldeficit–GDP ratio used under Fiscal Responsibility and Budget Management Act, 2003.
- FRBM Act aims to guide the government's fiscal policy towards a sustainable path, thereby promoting economic stability.
About Debt-to-GDP ratio
- It is a financial metric that compares a country's public debt to its gross domestic product (GDP), indicating the nation's ability to repay its debt.
- The higher the debt-to-GDP ratio, the less likely it becomes that the country will pay back its debt and the higher its risk of default.
Union Budget rationalises Advance Pricing Agreement (APA) rules etc., indicating a more investor-friendly tax regime.
Key Changes for IT sector
- Consolidation of IT services into a single category of Information Technology Services with a uniform safe harbour margin to reduce disputes and litigation.
- Threshold for safe harbour eligibility raised (₹300 crore to ₹2,000 crore); automated, rule-based approvals.
- Advance Pricing Agreement (APA) process fast-tracked to be completed within 2 years (extendable 6 months).
- APA is a pre-emptive arrangement between a taxpayer and tax authorities that determines transfer pricing methodology for specified transactions in advance, ensuring tax certainty and reducing disputes.
- Transfer Pricing means fixing fair prices for transactions between related companies so that profits are not shifted to avoid tax.
