UPSC Prelims
Daily Digest
31 July 2026
Prelims Pinpointer: Daily UPSC Prelims Notes — 31 July 2026
Four high-yield Prelims topics from today’s news — the PM CARES Fund RTI ruling, cloudbursts across the Himalayan states, India’s surging gold ETF demand, and RBI’s new bulk deposit transparency norms.
Today’s Topics
SC Ruling
PM CARES Not a Public Authority
RTI Act does not apply
Cloudburst Threshold
100mm+ Rain in 1 Hour
Over a 10km x 10km area (IMD definition)
India’s Gold Demand (Q1 2026)
173.9 Tonnes (+21% YoY)
Per World Gold Council data
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PM CARES Fund
Polity / Governance
The Supreme Court dismissed a PIL seeking to declare PM CARES Fund a public authority under the RTI Act, 2005, upholding that it is a charitable trust and noting that the PMNRF already exists as an official fund for similar purposes.
PM CARES Fund: Key Facts
- PM CARES stands for Prime Minister’s Citizen Assistance and Relief in Emergency Situations Fund, established on 28 March 2020 during the COVID-19 pandemic.
- It is a public charitable trust, not a government fund; the Prime Minister is its ex-officio Chairman, with the Defence, Home and Finance Ministers as ex-officio Trustees.
- It accepts voluntary contributions from individuals, organisations and foreign entities, used for disaster management, emergency relief and public health crises.
RTI Act and PM CARES
- The RTI Act, 2005 applies to “public authorities” under Section 2(h) — bodies owned, controlled or substantially financed by the government.
- PM CARES is not substantially funded by the government, so RTI does not apply; the SC held it was privately managed without government control, and the CAG does not audit it, unlike government funds.
Tax & Funding Provisions
Tax Deduction100% under Section 80G of Income Tax Act
CSR EligibilityCompanies Act, 2013 compliant
Foreign DonationsAccepted under FCRA, prior MHA permission
PMNRF ComparisonEst. 1948, subject to Parliamentary scrutiny — unlike PM CARES
Source: The Hindu
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Cloudbursts in India
Geography / Disaster Mgmt
Multiple cloudbursts struck Himachal Pradesh, Uttarakhand and Jammu & Kashmir in July 2026, causing flash floods and deaths — including one over the Bhagirathi valley that washed away roads and bridges, prompting IMD red and orange alerts.
Cloudbursts: Key Facts
- A cloudburst is officially defined by IMD as rainfall exceeding 100 mm in one hour over a 10 km × 10 km area.
- They cause flash floods due to rapid surface runoff on steep terrain, most common in the Himalayas, Western Ghats and the northeast.
- Himachal Pradesh, Uttarakhand and J&K are the most cloudburst-prone states in India.
Formation & Forecasting Challenges
- Cloudbursts form when warm, moist air rapidly rises and cools; in mountains, orographic lift triggers intense convective activity involving cumulonimbus (thunderstorm) clouds.
- They are hyper-local, covering just a few square kilometres, making advance prediction difficult; climate change is increasing their frequency and intensity due to a warmer, moister atmosphere.
- Doppler radars are the most effective real-time detection tool; IMD’s BharatFS model (6 km resolution) has improved extreme rainfall prediction, alongside flash flood guidance systems using soil saturation data.
Source: The Hindu
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Gold ETFs and India’s Gold Demand
Economy
India’s gold demand in Q1 2026 rose to 173.9 tonnes, up 21% year-on-year per the World Gold Council, driven by record gold prices and safe-haven demand amid global uncertainty.
Gold ETF Market: Key Facts
Q1 2026 ETF Inflows₹7,693 crore — second-highest ever
ETF AUMCrossed ₹60,000 crore for the first time
ETF FoliosCrossed 80 lakh, rising retail participation
RegulatorSEBI, under mutual fund regulations
Gold ETF Concepts
- A Gold ETF tracks physical gold prices; each unit typically represents 1 gram of 99.5% purity gold held by a custodian, traded on exchanges like regular shares, and requires a demat account.
- Gold ETFs vs SGBs: Sovereign Gold Bonds earn 2.5% annual interest while Gold ETFs do not; no GST applies to Gold ETF transactions, unlike physical gold (3% GST).
World Gold Council
- The WGC is an international organisation representing the gold mining industry, headquartered in London, UK, publishing quarterly gold demand trends.
- The LBMA (London Bullion Market Association) sets international gold pricing standards and Good Delivery norms.
Source: IT
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RBI’s Bulk Deposit Rate Transparency Norms
Economy
RBI tightened disclosure norms for bulk deposit interest rates while allowing LCR-linked pricing, under the RBI (Commercial Banks: Interest Rate on Deposits) Second Amendment Directions, 2026, effective 1 October 2026.
Key Transparency Requirements
- Banks must publish interest rates applicable to all deposits, including bulk deposits, on their websites in advance.
- Interest rates paid on deposits must be uniform across all branches and for all customers, with no discrimination.
LCR-Linked Pricing Exception
- Banks can offer differential rates on deposits based on liquidity risks using the Liquidity Coverage Ratio (LCR) framework.
- Under the CAMS-ALMD Directions, 2025, banks can consider run-off rates for deposits or unsecured wholesale funding under LCR; during a liquidity crisis, banks may use the run-off rate to price deposits likely to leave the bank.
Liquidity Coverage Ratio: Key Concepts
LCR PurposeChecks if HQLA covers stressed outflows over 30 days
HQLA IncludesCash, government bonds, central bank reserves
Current Run-Off Rate12.5% (incl. 2.5% from digital retail deposits)
EffectHigher run-off rate → higher outflows → lower LCR → more liquid assets needed
Remember: LCR requirement serves as a transparency benchmark for regulators, auditors and depositors alike.
Source: Business Standard (BS)
