24 April 2025 Current Affairs

Pahalgam Terror Attack – Key Developments and Government Response

In the wake of a heinous terror attack in Pahalgam, Jammu & Kashmir, which claimed 26 lives and injured several others, the Union Government of India has initiated multiple diplomatic and security-related responses. A high-level all-party meeting has been scheduled, and several stringent actions have been taken against Pakistan in response to its alleged cross-border involvement.

Major Political and Government Responses

• All-Party Meeting Called: The Union Government has convened an all-party meeting on April 24, 2025. Home Minister Amit Shah and Defence Minister Rajnath Singh are reaching out to political leaders.
• Congress’ Demand: The Indian National Congress has urged Prime Minister Narendra Modi to personally chair the meeting to build a united political front.
• Suspension of Indus Water Treaty (IWT): India has placed the IWT “in abeyance” with immediate effect as part of its five-pronged diplomatic strategy.
• Expulsion of Pakistani Personnel: Pakistan’s military attachés have been expelled, and visas issued to Pakistani nationals cancelled.
• Closure of Transit Point: The Attari land-transit post has been shut down immediately.

Domestic Reactions and Appeals

• Mehbooba Mufti’s Appeal: Urged Union Home Minister Amit Shah to ensure safety of Kashmiris across India amid threats from right-wing elements.
• Punjab on High Vigil: Punjab CM Bhagwant Mann ordered heightened security measures post-attack.
• Evacuation of Tourists:

- Maharashtra: DCM Eknath Shinde oversaw the safe return of 65 tourists to Mumbai.

- Karnataka: Mortal remains of two victims reached Bengaluru with solemn state reception.

Victims and Their Stories

• IAF Corporal Tage Hailyang (Arunachal Pradesh): His mortal remains arrived in Guwahati; tribute paid by Assam Minister Jayanta Malla Baruah.
• IB Officer Manish Ranjan (Jharkhand): On vacation with family, his remains reached Ranchi; family demands justice.
• Neeraj Udhwani (Rajasthan): A CA from Jaipur working in Dubai, killed during vacation in Pahalgam.
• Karnataka Victims: Manjunath Rao and Bharath Bhushan’s mortal remains received in Bengaluru.

Background on Indus Water Treaty

1. Signed:

• In 1960, between India and Pakistan, brokered by the World Bank.

2. Key Provisions:

• Control of the eastern rivers (Ravi, Beas, Sutlej) was given to India.
• Control of the western rivers (Indus, Jhelum, Chenab) was given to Pakistan, with India retaining limited rights.

3. Current Action:

• The treaty is now suspended by India citing a “fundamental change of circumstances.”
• Legal Backing: Article 62 of the Vienna Convention on the Law of Treaties allows treaty repudiation under significant changed conditions.

Gold Surges to Record Highs Amid Global Economic Uncertainty

Gold prices have witnessed a historic rally, crossing the ₹1 lakh per 10 gram mark for the first time, driven by escalating global trade tensions and a weakening U.S. dollar. Investor sentiment has shifted strongly towards safe-haven assets, especially following U.S. President Donald Trump’s announcement to overhaul the Federal Reserve. The surge comes ahead of key buying festivals and the wedding season, boosting domestic demand.

Key Highlights:

1. Record-Breaking Prices on MCX:

• August contract on MCX surged ₹2,048 (2.1%) to hit ₹1,00,000 per 10 grams.
• October contract jumped ₹2,016 (2.04%) to a fresh high of ₹1,00,500 per 10 grams.
• Most-traded June contract rose ₹2,079 (2.14%) to ₹99,358 per 10 grams.

2. Spot Gold Hits Lifetime Peak in Delhi:

• In the national capital, gold of 99.9% purity rose ₹1,800 to ₹1,01,600 per 10 grams.
• Gold of 99.5% purity surged ₹2,800 to ₹1,02,100 per 10 grams.

3. International Market Trends:

• Gold futures touched a record $3,509.06/oz before settling at $3,491.25/oz, up $65.95 or 1.93%.

4. Rationale Behind the Surge:

• Driven by U.S. monetary policy concerns following Trump’s Fed overhaul plan.
• Ongoing U.S.-China tariff tensions and weakening dollar spurred safe-haven demand.

5. Seasonal and Domestic Factors:

• Anticipation of strong demand during Akshaya Tritiya and the wedding season.
• Since December 2024, gold has gained ₹22,650 per 10 grams (nearly 29%).

Note: Silver remained stable at ₹98,500/kg, not following gold’s bullish trend.

World Bank lowers India's FY26 growth forecast to 6.3%

The World Bank, in its latest South Asia Development Update released on April 23, 2025, has revised India’s GDP growth forecast for FY25 downward to 6.3%. This comes amid growing global economic uncertainty and weaker-than-expected domestic investment trends. The revised estimate marks a 0.4 percentage point drop from its previous projection of 6.7%.

Key Highlights in 5 Points

1. India’s Growth Forecasts Revised Downwards

• World Bank: Revised India’s FY25 growth to 6.3%, down from the earlier 6.7%.
• IMF: Also cut its projection to 6.2% from 6.5% estimated in January 2025.
• EY Report: Predicts a slight rise to 6.5% in FY26.

2. Reasons for Downgrade

• Slower private investment and unmet public capital expenditure targets.
• Global economic weakness and domestic policy uncertainty.
• Export demand impacted by shifting trade policies and slowing global growth.

3. Domestic Economic Drivers

• Private consumption expected to improve due to tax cuts.
• Better implementation of public investment plans could stimulate government spending.

4. Regional Economic Outlook

• South Asia’s growth projection for 2025 is 5.8%, revised down by 0.4 percentage points.
• Regional rebound projected at 6.1% in 2026, subject to global and domestic risks.

5. Country-Specific Insights in South Asia

• Bangladesh: Growth expected to fall to 3.3% in FY25, then rebound to 4.9%.
• Pakistan: Forecasted to grow by 2.7% in FY25 and 3.1% in FY26.
• Sri Lanka: Growth recovery projected at 3.5% in 2025, before moderating to 3.1% in 2026.

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