Daily Current Affairs- 24th May 2025

Daily Current Affairs- 24th May 2025

Supreme Court Stays ED’s Investigation into Tamil Nadu’s TASMAC

In the News: On May 22, 2025, the Supreme Court of India stayed the Enforcement Directorate’s (ED) money laundering investigation into the Tamil Nadu State Marketing Corporation (TASMAC), the state-run liquor retailer. The apex court criticized the ED for overreaching its authority, stating that the agency had "crossed all limits" in its probe.

Key Points:

• Background of the Investigation: The ED initiated a probe into TASMAC following allegations of a ₹1,000 crore scam involving corruption in liquor shop licenses and overpricing. The agency conducted raids on TASMAC's headquarters in Chennai between March 6 and 8, 2025.
• Supreme Court's Intervention: The Tamil Nadu government and TASMAC challenged the ED's actions, arguing that the agency was overstepping its jurisdiction. The Supreme Court, led by Chief Justice BR Gavai and Justice Augustine George Masih, stayed the ED's investigation, questioning the legality of prosecuting a state-run corporation without a predicate offense.
• Criticism of ED's Actions: The court expressed concern over the ED's conduct, stating that the agency was "violating the federal structure" by targeting a state entity. The bench emphasized that while individuals can be prosecuted, initiating criminal proceedings against a corporation like TASMAC without clear evidence is problematic. 

Supreme Court Recognizes CAPF as Organised Services, Ensuring Career Progression

In the News: On May 23, 2025, the Supreme Court of India delivered a landmark judgment declaring that Group A officers of the Central Armed Police Forces (CAPFs) are to be recognized as part of the Organised Group A Services (OGAS) for all service-related purposes. This decision aims to address longstanding issues of career stagnation and limited promotion avenues within the CAPFs.

Key Points:

• Background of the Issue:
  • CAPF officers have historically faced challenges in career progression due to a significant number of senior positions being filled by Indian Police Service (IPS) officers on deputation.
  • This practice led to delays in promotions, with officers often waiting 25–30 years to attain ranks like Commandant or Deputy Inspector General (DIG), exceeding standard timelines.
• Supreme Court's Directives:
  • The Court mandated that Group A officers of CAPFs from batches dating back to 1986 be treated as part of OGAS for all service-related matters.
  • It directed a comprehensive cadre review and restructuring to be completed within six months to facilitate timely promotions.
  • The number of IPS officers on deputation in CAPFs, particularly at the Senior Administrative Grade (SAG) and Inspector General (IG) levels, is to be progressively reduced within two years.
• Implications for CAPF Officers:
  • Approximately 13,000 Group A CAPF officers are expected to benefit from this ruling.
  • Officers will now be eligible for Non-Functional Financial Upgradation (NFFU), a system that provides financial benefits even if they are not promoted, as long as a batchmate is promoted in another organization.
• Government's Response:
  • The Central Government had previously accepted the inclusion of CAPFs in OGAS through a Department of Personnel and Training (DoPT) Office Memorandum dated July 12, 2019.
  • However, the Supreme Court emphasized that all benefits associated with OGAS status must be extended to CAPF officers and cannot be selectively applied. 

RBI Transfers Record ₹2.69 Lakh Crore Surplus to Centre for FY25

In the News: On May 23, 2025, the Reserve Bank of India (RBI) announced a record surplus transfer of ₹2.69 lakh crore to the Government of India for the financial year 2024–25. This marks a 27% increase over the previous year's transfer of ₹2.11 lakh crore and surpasses the Union Budget's projection of ₹2.56 lakh crore in dividend receipts from the RBI and public sector financial institutions.

Key Points:

• Record Surplus Transfer: The ₹2.69 lakh crore transfer is the highest-ever annual surplus transferred by the RBI to the central government. This substantial payout is expected to significantly bolster the government's fiscal position, providing additional resources for public spending and aiding in achieving the fiscal deficit target of 4.4% for FY25.
• Revised Economic Capital Framework (ECF): The surplus transfer was determined based on the revised ECF, which now stipulates a Contingent Risk Buffer (CRB) range of 4.5% to 7.5% of the RBI's balance sheet. For FY25, the CRB was set at the upper limit of 7.5%, up from 6.5% in the previous year. This adjustment aims to enhance the RBI's financial resilience amid global and domestic uncertainties.
• Sources of Increased Surplus: The significant surplus is attributed to robust earnings from the RBI's foreign exchange operations, including substantial dollar sales to support the rupee, and higher interest income from foreign assets due to elevated global interest rates. The RBI's gross dollar sales surged to $399 billion in FY25 from $153 billion in FY24.
• Impact on Government Finances: The surplus transfer provides the government with additional fiscal space, potentially allowing for increased capital expenditure or reducing the need for additional borrowing. Analysts suggest that this could lead to a reduction in the fiscal deficit by approximately 20 basis points, bringing it down to around 4.2% of GDP. 

RBI Sells Nearly $400 Billion in FY25

In the News: In the fiscal year 2024–25 (FY25), the Reserve Bank of India (RBI) executed a record gross sale of $398.71 billion in foreign exchange markets. This aggressive intervention aimed to stabilize the Indian rupee amid global economic uncertainties and significant capital outflows.

Key Points:

• Record Gross Forex Sales: The RBI's gross foreign exchange sales in FY25 amounted to $398.71 billion, significantly surpassing the previous records of $212.57 billion in FY23 and $153.03 billion in FY24.
• Net Forex Sales: Despite substantial purchases, the RBI's net forex sales stood at $34.51 billion for FY25, marking the highest net sale since the 2008–09 global financial crisis.
• Peak Monthly Intervention: December 2024 witnessed the highest monthly intervention, with the RBI selling $69.05 billion in foreign currency, accounting for approximately 73% of the total annual sales occurring in the latter half of FY25.
• Impact on Forex Reserves: India's foreign exchange reserves declined by about $80 billion between late September 2024 and mid-January 2025, dropping below $625 billion, reflecting the cost of defending the rupee.
• Rupee Depreciation: The Indian rupee reached an all-time low of ₹87.95 per U.S. dollar in February 2025, prompting the RBI's intensified market interventions.
• Forward Book Reduction: The RBI reduced its forward dollar position to $84.34 billion by March 31, 2025, down from $88.75 billion in February, indicating a strategic move to manage future currency obligations. 

Bitcoin Hits $110K as GENIUS Act Boosts Crypto Confidence

In the News: On May 22, 2025, Bitcoin surged past the $110,000 mark, reaching an all-time high of $111,816. This significant milestone is attributed to growing investor optimism fueled by the U.S. Senate's advancement of the Guiding and Establishing National Innovation for U.S. Stablecoins (GENIUS) Act, which aims to provide a comprehensive regulatory framework for stablecoins.

Key Points:

• GENIUS Act Overview:
  • The GENIUS Act seeks to establish clear regulations for stablecoins, including requirements for issuers to hold reserves of underlying assets, adhere to anti-money laundering protocols, and prioritize consumer protections in bankruptcy scenarios.
  • The bill passed a Senate procedural vote with a 66–32 margin and is expected to proceed to a full vote post-Memorial Day recess.
• Market Impact:
  • Bitcoin's price increase of over 33% in the past month is linked to institutional investments and ETF inflows, which exceeded $3.6 billion in May.
  • Analysts project that the stablecoin market could expand from its current $248 billion to $2.5 trillion by 2030, driven by the regulatory clarity provided by the GENIUS Act.
• Political Context:
  • While the GENIUS Act enjoys bipartisan support, some lawmakers express concerns over potential conflicts of interest, citing President Trump's involvement in crypto ventures like the "USD1" stablecoin and the "TrumpCoin" meme token.
  • Senator Elizabeth Warren has criticized the bill, warning that it could enable self-dealing and corruption within the crypto industry. 

Algeria Becomes New Member of BRICS’ New Development Bank

In the News: On May 19, 2025, Algeria officially joined the New Development Bank (NDB), the financial institution established by the BRICS nations (Brazil, Russia, India, China, and South Africa). This move signifies Algeria's commitment to enhancing its role in global development financing and diversifying its economic partnerships.

Key Points:

• Membership Confirmation: Algeria deposited its instrument of accession on May 19, 2025, completing the formal process to become a member of the NDB. The announcement was made by the bank's president, Dilma Rousseff, during the NDB's annual meeting.
• Strategic Significance: As Africa's leading natural gas exporter, Algeria's inclusion in the NDB is expected to bolster its economic growth and infrastructure development. The membership provides Algeria with access to funding for sustainable development projects and positions it as a key player in the global financial landscape.
• NDB Overview: Established in 2015, the NDB aims to mobilize resources for infrastructure and sustainable development projects in emerging economies. Headquartered in Shanghai, China, the bank has approved over 120 projects worth $40 billion, focusing on areas such as clean energy, transportation, and digital infrastructure.
• Expansion of Membership: Algeria joins a growing list of NDB members beyond the original BRICS countries, including Bangladesh, Egypt, the United Arab Emirates, and Uruguay. This expansion reflects the NDB's commitment to broadening its global reach and fostering inclusive development.