Daily Current Affairs - 4th October 2025

Preparing for UPSC 2026 or State PCS? This 4th October 2025 Current Affairs edition consolidates exam-focused updates with GS linkages, Prelims facts, and Mains insights.

Key highlights include NITI Aayog’s Working Paper on Permanent Establishment (PE) & Profit Attribution—proposing presumptive taxation, dispute resolution strengthening, and clarity on SEP in digital taxation.

Health and science updates track Rajasthan’s ban on cough syrups with Dextromethorphan amid DEG/EG toxicity concerns, the rise of stablecoins in global finance, and NASA Cassini’s evidence of life-building organics on Saturn’s Enceladus.

Geography and environment highlights include the eruption of India’s only Mud Volcano in Baratang Island, IUCN’s call for protected area–climate integration, and the 150th anniversary celebrations of ‘Vande Mataram.’

In international and defence relations, note Poland’s integration into NATO’s Pipeline System, the dissolution of UNEP FI’s Net-Zero Banking Alliance, and India’s Tribal Village Vision 2030 empowering 1 lakh villages through Adi Karmayogi Abhiyan.

Use this compact, structured sheet to sharpen Prelims 2026 recall and enrich Mains-ready comparative analysis—integrating economy, governance, environment, S&T, and IR with The PRESS Pad.

 Click Here to read the Monthly Current Affairs Pointers (CAP).

NITI Aayog Working Paper on Permanent Establishment (PE) and Profit Attribution for Foreign Investors

1. NITI Aayog has released a Tax Policy Working Paper focusing on Permanent Establishment (PE) and profit attribution issues faced by foreign investors in India.

2. The paper highlights that complexities in PE rules affect the inflow of both Foreign Direct Investment (FDI) and Foreign Portfolio Investment (FPI) into India.

About Permanent Establishment (PE)

1. A Permanent Establishment (PE) is defined as a fixed place of business through which the business activities of an enterprise are wholly or partly carried out.

2. The concept of PE is crucial as it determines a country’s right to tax the business income of a non-resident enterprise.

3. The source state (i.e., the country where the PE is located) has the authority to tax only those profits which are attributable to the PE within its territory.

4. In India, the Income Tax Act, 1961, uses the term "Business Connection" to determine the existence of a PE.

5. Specific definitions of PE are also detailed under India’s Double Taxation Avoidance Agreements (DTAAs) with other countries.

6. India has broadened the scope of PE by introducing the concept of Significant Economic Presence (SEP).

7. Significant Economic Presence (SEP) refers to situations where digital businesses earn income in India without having a physical presence, and are still considered to have a PE for taxation purposes.

Key Issues with PE Rules in India

1. There is ambiguity in the definition of PE, which creates uncertainty and tax risks for foreign investors.

2. The lack of clarity also results in a heavy compliance burden on businesses operating in India.

3. Disputes often arise between companies and tax authorities over how profits should be attributed to a PE.

4. There is an inconsistent application of the Arm’s Length Principle, which is a standard method used in transfer pricing to ensure fair profit allocation among related entities.

Key Recommendations of the Working Paper

1. The paper recommends introducing an Optional Presumptive Taxation Scheme.

2. Under this scheme, a pre-defined fair profit rate would be applied to determine taxable income, offering certainty to taxpayers and tax authorities.

3. It suggests providing legislative clarity by codifying the definitions and principles of PE and profit attribution.

4. The proposed legislation should align with international standards, particularly those of the OECD and United Nations (UN) model conventions.

5. The working paper advocates for maintaining a policy stance against retrospective taxation, which refers to taxing past transactions under new laws.

6. To reduce litigation, the paper recommends strengthening dispute resolution mechanisms.

7. It proposes expanding the Advance Pricing Agreement (APA) program, which allows businesses to pre-agree on transfer pricing methods with tax authorities.

8. It also suggests enhancing the Mutual Agreement Procedure (MAP), a process under DTAAs for resolving cross-border tax disputes between countries.

9. The working paper emphasizes mandatory stakeholder engagement in tax policymaking.

10. It recommends public consultations on all major tax policy changes to enhance transparency and predictability.

11. It also stresses the need to enforce the Taxpayer Charter, which ensures the rights and responsibilities of taxpayers are clearly communicated and upheld.

RBI Announces Measures to Promote Internationalisation of the Indian Rupee (INR)

1. The Reserve Bank of India (RBI) has introduced new measures aimed at promoting the international use of the Indian Rupee (INR).

2. The objective is to expand the Rupee’s role in global trade and cross-border financial transactions.

   • Internationalisation of the Rupee refers to the widespread use of INR in global trade, investment, and finance, reducing dependence on foreign currencies like the US Dollar.

Benefits of Rupee Internationalisation

1. It helps reduce the requirement for maintaining large foreign exchange (forex) reserves, which are traditionally used to support the national currency.

2. It lowers exchange rate risk by insulating the economy from fluctuations in US Dollar value and global liquidity pressures.

3. It enhances India’s economic autonomy by minimizing vulnerability to external monetary policies and currency volatility.

4. It boosts India’s trade influence by positioning the Rupee as a stable regional currency, increasing India’s footprint in global trade.

Key Measures Announced by RBI

1. RBI has permitted authorised dealer banks in India and their overseas branches to extend loans in Indian Rupees to non-residents.

2. This facility applies to persons residing in Bhutan, Nepal, and Sri Lanka, including foreign banks operating in these countries.

3. RBI has announced the development of transparent reference rates for INR against major global currencies.

4. These reference rates will be developed by Financial Benchmarks India Limited (FBIL), an independent benchmark administrator.

5. As of now, the RBI publishes reference rates for USD, Euro, Japanese Yen, and British Pound Sterling.

6. RBI has widened the permissible uses of Special Rupee Vostro Accounts (SRVAs) to include investments in corporate bonds and commercial papers.

7. Previously, surplus balances in SRVAs were allowed to be invested only in central government securities.

What is a Special Rupee Vostro Account (SRVA)?

1. A Special Rupee Vostro Account (SRVA) is an account that a foreign bank maintains with an Indian bank.

2. The SRVA is used to settle bilateral trade transactions in Indian Rupees (INR), avoiding the need to convert currencies into US Dollars or other foreign currencies.

India Wins ISSA Award 2025 for Outstanding Achievement in Social Security

1. India has been conferred the International Social Security Association (ISSA) Award for 2025.

2. The award was presented at the World Social Security Forum 2025, organized by the ISSA.

3. The award recognizes India's remarkable expansion in social security coverage over the last decade.

4. Social security coverage in India has increased from 19% in 2015 to 64.3% in 2025.

5. This expansion now covers over 940 million citizens, reflecting a significant social inclusion milestone.

6. Two key institutions, the Employees’ Provident Fund Organisation (EPFO) and the Employees’ State Insurance Corporation (ESIC), played a pivotal role in achieving this progress.

Understanding Social Security and Its Importance in India

1. Social security refers to the protection a society offers to individuals and families to ensure access to healthcare and guaranteed income security.

2. It is recognized globally as a basic human right, essential for inclusive development.

3. In India, social security is especially critical due to a predominantly unorganized labour force.

4. The decline of the traditional joint family system, which historically offered support through shared resources, has increased the need for formal social protection.

5. As per the World Bank (2022–23), 5.25% of India's population lives below the poverty line, defined under the updated $3.00 PPP/day standard.

How Has India Expanded Social Security Coverage?

1. Simplifying Legislations

• India implemented the Social Security Code, 2020, to consolidate and rationalize existing laws.

• The code amalgamated nine different labour laws to ensure protection for all workers, including those in the unorganized sector.

2. Building Digital and Financial Foundations

• Schemes like Pradhan Mantri Jan Dhan Yojana facilitated universal access to financial services.

• Direct Benefit Transfer (DBT) mechanisms ensured transparent and efficient delivery of welfare benefits.

3. Securing Informal and Unorganised Workers

• The launch of the e-Shram Portal created a national database for unorganized workers.

• Schemes like the Atal Pension Yojana (APY) provided retirement income security to informal workers.

• The PM Vishwakarma Yojana supported traditional artisans and craftspeople with social and financial assistance.

4. Expanding Health and Food Security

• Ayushman Bharat offered free health insurance coverage up to ₹5 lakh per family per year.

• The Pradhan Mantri Garib Kalyan Anna Yojana (PMGKAY) ensured free food grain distribution during crises like the COVID-19 pandemic.

5. Insurance and Pension Schemes

• The Pradhan Mantri Suraksha Bima Yojana (PMSBY) offered affordable accidental insurance to the vulnerable sections of society.

6. Empowering Women

• The Lakhpati Didi Initiative aimed to build women-led micro-enterprises and enhance income levels.

• The Pradhan Mantri Ujjwala Yojana provided free LPG connections to women from BPL households, promoting clean cooking fuel access.

7. Other Supportive Measures

• The National Career Service (NCS) portal was developed to connect job seekers with employment opportunities and skill-building services.

RBI Grants Self-Regulatory Organisation (SRO) Status to FIDC for Oversight of NBFCs

1. The Reserve Bank of India (RBI) has granted Self-Regulatory Organisation (SRO) status to the Finance Industry Development Council (FIDC).

   • FIDC is a representative body of Non-Banking Financial Companies (NBFCs) that are registered with the RBI.

2. Granting SRO status to FIDC aims to enhance governance and sectoral discipline within the NBFC ecosystem.

About Self-Regulatory Organisation (SRO)

1. A Self-Regulatory Organisation (SRO) is an entity that functions as an independent body to regulate and supervise members within a specific sector.

2. The primary objective of an SRO is to ensure the betterment of the sector it represents by addressing critical industry concerns and promoting sectoral advancement.

3. The legal backing for recognition of SROs comes from the RBI’s Omnibus Framework for recognising SROs for Regulated Entities (REs), 2024.

Eligibility Criteria for SROs (as per RBI Framework)

1. An SRO must be established as a not-for-profit company under Section 8 of the Companies Act, 2013.

2. The SRO must have adequate net worth to sustain operations effectively.

3. It should maintain a sufficiently diversified shareholding structure.

4. No single entity is allowed to hold 10% or more of the paid-up share capital of the SRO.

5. The SRO must represent the sector it intends to regulate, ensuring fair and broad-based representation.

Responsibilities of SROs

1. Towards Its Members

   • The SRO is required to frame a code of conduct for its member entities.

   • It must also establish a grievance redressal mechanism, including provisions for dispute resolution and arbitration.

     
     

2. Towards the Regulator (RBI)

   • The SRO should work to ensure regulatory compliance by its members.

   • It must also promote overall sector development through best practices and capacity building.

   • The SRO is responsible for fostering innovation and identifying early warning signals that may pose systemic risks.

     
     

3. Governance Framework of SROs

   • The functioning of the SRO must be outlined in its Articles of Association (AoA) or bye-laws.

   • The AoA should define the operational procedures of the Governing Body and specify the roles and responsibilities of the SRO.

   • At least one-third of the Board of Directors, including the Chairperson, must be independent members, ensuring unbiased decision-making.

About Non-Banking Financial Companies (NBFCs)

1. An NBFC is a financial institution registered under the Companies Act, 1956.

2. NBFCs are primarily engaged in lending, acquisition of shares, stocks, bonds, debentures, and securities issued by government or local authorities.

3. NBFCs do not include entities mainly engaged in agriculture, industrial activity, trading of goods (except securities), providing services, or real estate-related transactions like sale, purchase, or construction of immovable property.

4. NBFCs are different from banks, as they cannot accept demand deposits (they can only accept term deposits).

5. NBFCs are not part of the payment and settlement system, meaning they cannot issue cheques drawn on themselves.

6. As of 2024, more than 9,000 NBFCs are registered with the RBI, making them a significant segment of the Indian financial system.

Contaminants in Cough Syrups: Rajasthan Government’s Ban and Health Concerns

1. The Rajasthan government has banned the distribution of cough syrups containing Dextromethorphan.

2. Dextromethorphan is a synthetic opioid-based cough suppressant used to relieve dry cough.

3. It is not recommended for children below 5 years of age, due to safety concerns and risk of adverse effects.

4. In addition to this, there are rising concerns about the presence of Diethylene Glycol (DEG) and Ethylene Glycol (EG) in cough syrups.

About Diethylene Glycol (DEG) and Ethylene Glycol (EG)

1. DEG and EG are colourless industrial chemicals that are not intended for medicinal use.

2. These chemicals are commonly used in the manufacturing of brake fluids, antifreeze, paints, plastics, and various household products.

3. They are sometimes used as a cheaper substitute for Propylene Glycol, which is a safe pharmaceutical-grade solvent used to dissolve drugs in liquid form.

4. However, DEG and EG are highly toxic to humans, even in small quantities.

5. Consumption of these substances can lead to poisoning, acute kidney failure, and in severe cases, death.

Stablecoins: Transforming the Future of Money and Capital Flows

1. The Finance Minister highlighted that innovations like stablecoins are reshaping the global landscape of money and capital flows.

2. She warned that nations must adapt to new monetary architectures or risk being excluded from evolving financial ecosystems.

What are Stablecoins?

1. Stablecoins are a type of cryptocurrency that are pegged to stable assets to maintain a consistent value.

2. These assets can include fiat currencies like the US Dollar, a basket of currencies, or even precious metals like gold.

3. The main objective of stablecoins is to minimise price volatility, which is common in other cryptocurrencies such as Bitcoin.

Why are Stablecoins Significant?

1. Stablecoins offer a stable store of value, making them more suitable for daily transactions than volatile cryptocurrencies.

2. They are fast and easy to transact, especially in the case of cross-border money transfers.

3. This makes them an attractive tool for global remittances and digital financial inclusion.

What are the Potential Risks of Stablecoins?

1. Despite their benefits, stablecoins may pose risks to financial stability in the broader economy.

2. One key concern is the run risk, where large groups of investors simultaneously redeem their stablecoin holdings.

3. Such events can destabilize the issuer’s reserves and trigger panic in financial markets, similar to traditional bank runs.

Mud Volcano Erupts in Baratang Island, Andaman & Nicobar Islands

India’s only Mud Volcano, located in Baratang Island in the Andaman and Nicobar Islands, has erupted after 20 years.

What is a Mud Volcano?

1. A Mud Volcano is a geological formation that erupts a mixture of mud, water, and gases onto the Earth’s surface.

2. Unlike traditional volcanoes, mud volcanoes do not emit molten lava.

3. Instead, they create cone-like structures made of mud, which visually resemble lava volcanoes.

4. The gases released during an eruption are primarily methane, and may also include carbon dioxide or nitrogen.

Where and Why Do Mud Volcanoes Occur?

1. Mud volcanoes are typically found in regions with natural gas reserves, as they are linked to underground hydrocarbon activity.

2. Eruptions occur due to pressure from Earth’s tectonic forces, such as plate movements beneath the surface.

3. They can also be triggered by the accumulation of hydrocarbon gases that build up over time.

Cassini Detects Signs of Potential Life on Saturn’s Moon Enceladus

1. NASA’s Cassini spacecraft has provided fresh evidence that Saturn’s moon Enceladus may potentially host life.

2. The new findings are based on the detection of additional complex organic molecules in the icy plumes ejected from Enceladus.

   • These icy plumes originate from a subsurface ocean beneath Enceladus’s icy crust and are expelled into space.

3. The presence of complex organics in these plumes strengthens the possibility of biological activity or habitability.

About the Cassini Spacecraft

1. Cassini was a planetary exploration mission aimed at studying Saturn and its system in detail.

2. It was a joint mission of NASA (USA), ESA (European Space Agency), and ASI (Italian Space Agency).

3. Cassini carried a lander called Huygens, which was deployed to Saturn’s largest moon, Titan, as part of the mission.

4. The spacecraft studied Saturn’s rings, its moons, and its magnetosphere, providing groundbreaking data for over a decade.

About Enceladus – Saturn’s Icy Moon

1. Enceladus is one of Saturn’s moons, notable for its icy surface and internal ocean.

2. It is tidally locked with Saturn, meaning the same side always faces the planet, similar to Earth’s Moon.

3. Enceladus is also the brightest and most reflective object in the solar system due to its ice-covered surface.

150 Years of ‘Vande Mataram’: India’s National Song Celebrated Nationwide

1. The Union Cabinet has announced a nationwide celebration to mark the 150th anniversary of the national song ‘Vande Mataram’.

   • ‘Vande Mataram’ is a national song of India that inspires patriotism and unity among the citizens.

2. It was composed in Sanskrit by Bankim Chandra Chatterjee, a prominent Bengali writer and freedom fighter.

3. The song was first published in 1882 in the novel ‘Anandamath’, written by Bankim Chandra Chatterjee.

   • ‘Anandamath’ is a patriotic novel that played a significant role in inspiring the freedom movement.

4. On 24th January 1950, it was officially declared that ‘Vande Mataram’ would have equal status with the National Anthem.

   • India’s National Anthem is ‘Jana Gana Mana’, which was originally composed in Bengali by Rabindranath Tagore.

   • The Hindi version of ‘Jana Gana Mana’ was adopted by the Constituent Assembly on 24th January 1950.

     • The Constituent Assembly was the body responsible for drafting the Constitution of India.

5. The theme of ‘Vande Mataram’ is a tribute to Mother India, reflecting values of devotion, courage, and unity.

6. The song evokes the idea of Mother India as a goddess figure, symbolizing the nation itself.

7. Rabindranath Tagore first recited ‘Vande Mataram’ at the 1896 session of the Indian National Congress.

   • The Indian National Congress was the principal organization leading the Indian freedom struggle.

IUCN Report on Protected Areas

1. The IUCN World Commission on Protected Areas (WCPA) has released a report focused on integrating climate mitigation into protected area management.

   • The IUCN stands for the International Union for Conservation of Nature, a global authority on nature conservation.

   • Protected areas are regions designated to conserve nature and biodiversity by restricting human activity.

2. The report highlights that protecting 30% of strategically selected land could secure 500 billion tonnes of carbon stored in vegetation and soils.

   • Carbon stored in vegetation and soils refers to the carbon naturally captured and held by plants and the earth, helping reduce atmospheric carbon dioxide.

3. Additionally, protecting 30% of the oceans could contribute to 20% of the carbon emission reductions needed to meet the targets of the Paris Agreement.

   • The Paris Agreement is an international treaty aimed at limiting global warming to well below 2°C above pre-industrial levels.

4. These findings emphasize the crucial role of protected areas in climate change mitigation by preserving natural carbon sinks.

Poland Joins NATO Pipeline System to Support Military Fuel Supply

1. Poland is set to join the NATO Pipeline System (NPS), enhancing its role in NATO logistics.

   • The NATO Pipeline System (NPS) was established during the Cold War to supply NATO forces with fuel.

   • The Cold War was a period of geopolitical tension between the United States and Soviet Union from roughly 1947 to 1991.

2. The primary purpose of the NPS today is to ensure the supply and distribution of petroleum products for ongoing NATO operations.

   • Petroleum products include fuels like gasoline, diesel, and jet fuel essential for military and allied activities.

3. The NPS operates across 12 NATO countries, creating a vast network for fuel logistics.

4. This network links various critical infrastructure such as storage depots, military air bases, civil airports, refineries, pumping stations, and truck/rail loading stations.

5. These components collectively ensure efficient and reliable fuel supply to NATO forces in Europe and beyond.

Net-Zero Banking Initiative Under UNEP FI Officially Dissolved

1. The Net-Zero Banking Alliance has been dissolved after several member banks withdrew from the initiative.

   • The Net-Zero Banking Alliance was established in 2021 under the United Nations Environment Programme's Finance Initiative (UNEP FI).

   • The UNEP FI is a partnership between the United Nations and the financial sector to promote sustainable finance.

2. The Alliance aimed to encourage banks to reduce the carbon footprint of their loans and investments.

   • The carbon footprint refers to the total greenhouse gas emissions caused directly or indirectly by an activity or entity.

3. The initiative supported the transition towards a net-zero economy by 2050.

   • A net-zero economy means balancing the amount of greenhouse gases emitted with the amount removed from the atmosphere, aiming to limit global warming

Tribal Village Vision 2030 Declared in 1 Lakh Tribal-Dominated Villages

1. Special Gram Sabhas were held across 1 lakh tribal-dominated villages and Tolas, where the Tribal Village Vision 2030 Declaration was adopted.

   • A Gram Sabha is a village assembly consisting of all adult residents, serving as the basic unit of local self-governance in India.

2. The Tribal Village Vision 2030 Declaration was adopted as part of the Adi Karmayogi Abhiyan, launched by the Ministry of Tribal Affairs.

   • The Ministry of Tribal Affairs is a government body focused on the welfare and development of tribal communities in India.

3. The Declaration empowers villages to become active co-creators of their development, fostering accountability and ensuring every citizen’s voice shapes their community’s future.

4. It emphasizes community-led development with actionable goals in areas such as education, health, livelihood, social and financial inclusion, and infrastructure.

   • Community-led development means the local community takes charge of planning and implementing development activities.

5. The Declaration also envisions the establishment of Adi Sewa Kendras in every village, serving as single-window citizen service centres.

   • Adi Sewa Kendras are centralized locations where villagers can access multiple government services efficiently.

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