Daily Current Affairs 26 August 2026 – IAS Current Affairs

Current Affairs 26 August 2026 focuses on the Prelims-Mains perspective. Major events are :

India-Nepal Relations: LDC Graduation And Economic Cooperation

Source: Indian Express
GS II: International Relations- India and its neighborhood

Why in the News?

Nepal is scheduled to graduate from the UN’s Least Developed Country (LDC) category on November 24, 2026.

News in Brief

• Nepal has sought a three-year deferral, citing delays in its transition process.
• In 2024, it adopted a Smooth Transition Strategy (STS) to manage the shift from LDC status.
• The development provides an opportunity for India and Nepal to deepen economic and technological cooperation and help Nepal move from a remittance-dependent, low-investment economy towards more sustainable, investment- and export-led growth.

Nepal’s Economic Situation

• Nepal has maintained relatively stable macroeconomic conditions despite its structural weaknesses.
• The country has recorded around 4% annual economic growth over the past three decades and benefits from relatively low public debt and substantial foreign-exchange reserves.
• Remittances, which are around $15 billion annually, remain a major source of foreign exchange.
• The fixed exchange-rate arrangement with the Indian rupee, along with bilateral tariff arrangements with India, has also provided some stability.
• These buffers helped Nepal withstand shocks such as the 2008 global financial crisis, the 2013 Taper Tantrum and the COVID-19 pandemic.
• However, the deeper concern is Nepal’s low-investment trap.
• Remittances largely support household consumption, imports and foreign-exchange reserves, but have not generated sufficient domestic investment, industrialisation or export diversification.
• Nepal therefore needs to gradually move from a remittance-dependent model towards an economy driven by productive investment, manufacturing, services and exports.

India–Nepal Economic Relationship

• This transition creates an important opportunity for India.
• Nepal and India share one of South Asia’s closest relationships, based on geography, history, culture, social connections and an open border.
• Their economic relationship extends beyond trade to energy, water resources, railways, customs, digital payments and cross-border infrastructure.
• India can support Nepal’s post-LDC transition by providing predictable market access, encouraging investment and joint ventures, strengthening supply chains and expanding energy cooperation.
• Hydropower and cross-border electricity trade are particularly important because Nepal can earn export revenue while India can benefit from additional clean-energy supplies.
• Cooperation in railways, roads, integrated check posts and transmission lines can further improve connectivity and reduce the cost of trade.

Technology as a New Area of Cooperation

• The cooperation should not be limited to traditional infrastructure.
• Technology can become the second major pillar of India–Nepal cooperation.
• Optical-fibre connectivity, interoperable digital public infrastructure, digital payments, space technology and technology-based disaster management can help Nepal improve productivity and access to markets.
• The existing cooperation between UPI and Nepal’s digital payment system shows how such integration can directly benefit citizens and businesses.
• The broader objective should be to create a two-track partnership based on economics and technology.
• Such cooperation can help Nepal become more competitive while also creating greater economic interdependence between the two countries.

Nepal’s Search for Economic Diversification

• Nepal has also attempted to diversify its external economic partnerships.
• It joined China’s Belt and Road Initiative in 2017, partly because of concerns about excessive dependence on India.
• However, connectivity through the Himalayan region faces serious geographical and climatic constraints.
• Difficult terrain, landslides and weather-related disruptions make northern connectivity expensive and vulnerable.
• Some China-backed projects have also faced delays, including debates over grants, loans and debt sustainability.
• India therefore needs to understand Nepal’s desire for strategic autonomy rather than viewing every effort at diversification as competition.
• At the same time, India has legitimate concerns about security, connectivity and the possibility of external infrastructure creating new vulnerabilities in the region.

Challenges in India–Nepal Relations

• The biggest challenge is to maintain the benefits of close economic integration without creating a perception of Indian dominance.
  • Nepal’s economic dependence on India has sometimes generated concerns over trade asymmetry and the unequal nature of the relationship.
  • India should therefore move from a relationship perceived as dependence towards one based on partnership and mutual benefit.
• The open border presents another challenge.
  • Excessive securitisation could disrupt legitimate movement, trade and the lives of communities living along the border.
  • At the same time, the border cannot remain vulnerable to illegal activities.
  • A better approach would be technology-enabled border management, supported by intelligence sharing, modern customs systems and coordinated monitoring.
• Public perception is equally important.
  • Economic dependence can become politically sensitive if Nepalese citizens feel that closer ties with India reduce their policy choices.
  • India can address this through greater cooperation in tourism, education, cultural exchanges, media, technology and people-to-people contacts.
  • This would make the relationship broader than simply trade and infrastructure.

Way Forward and Conclusion

India should support Nepal’s post-LDC transition through investment, trade facilitation, energy cooperation, connectivity and digital infrastructure. Both countries should strengthen supply chains, cross-border movement and water cooperation while addressing trade imbalances and regulatory concerns.

Greater policy stability, faster implementation and institutional continuity can deepen bilateral ties. A partnership based on trust, technology and mutual economic interests can support Nepal’s development and strengthen regional integration.

UPSC Prelims and Mains Practice Question

Consider the following statements,

1. India and Nepal share an open border that facilitates movement of people and economic exchanges.
2. India and Nepal cooperate in areas such as hydropower, railway connectivity and digital payments.
3. Nepal’s LDC graduation may affect its access to preferential tariffs and concessional financing.

Which of the statements given above is/are correct?

(a) 1 and 2 only
(b) 2 and 3 only
(c) 1 only
(d) 1, 2 and 3

Answer: d)

Mains Practice Question

Q. Discuss the significance of Nepal’s graduation from the LDC category for its economy and examine how India can support Nepal’s smooth economic transition. (250  words)

NITI Aayog Report On India’s Graduate Job Crisis And Skilling Gap

Source: Indian Express
GS III: Indian Economy- Employment

Why in the News?

NITI Aayog has highlighted the weak connection between India’s higher-education system and labour-market requirements, particularly for general degrees such as BA, B.Sc. and B.Com.

News in Brief

• Outdated curricula and limited practical exposure have contributed to poor employability and educated unemployment among graduates.
• The report points to the need for stronger industry-academia linkages, apprenticeships and specialized, job-oriented courses.
• It recommends shifting from supply-driven skilling to demand-driven, industry-linked training and promoting alternative vocational pathways.

Key Findings

Mismatch between Education and Employment

• In ‘Reimagining Skilling for Viksit Bharat’ Report, NITI Aayog highlighted,
  • India’s higher and technical education system faces a fundamental disconnect between what is taught and what the labour market demands.
  • Curricula in most institutions remain outdated and misaligned with evolving industry needs, resulting in degrees, diplomas and certificates that do not consistently translate into employability.
  • Over 90% of graduates in India are employed in roles not aligned with their qualifications.
  • NITI Aayog has therefore called for specialized, job-linked programmes, greater apprenticeship opportunities and skill development aligned with emerging sectors such as green industries and electric vehicles.

Educated Unemployment and NEET Youth

• Educated unemployment remains a major concern, with graduate unemployment significantly higher than the overall unemployment rate, particularly among women graduates.
• At the same time, a large number of young people fall under the NEET (Not in Education, Employment or Training) category.
• NITI Aayog clarified that the NEET category in the report refers to those not seeking employment, therefore, it cannot be read as a measure of joblessness or as an addition to the unemployment rate.
  • The unemployed represent an entirely separate category, drawn from a different population base than that used for the NEET estimate.
• The findings highlight the need for better alignment between education, skills and employment opportunities.
• The State of Working India report by Azim Premji University also highlights the persistent problem of unemployment among educated youth.
• The trend points to a growing gap between higher education and labour-market opportunities, strengthening the case for better skilling, vocational training and industry-linked education.

Social Stigma around Skilling

• The NITI Aayog highlights that vocational education and alternative learning pathways continue to face social stigma in India, with ITIs, diploma courses and technical training often viewed as second-tier options.
• Career decisions are often shaped by constraints such as examination scores, family preferences, or the perceived cost of investing in additional skills, rather than by aptitude, interests, or long-term career possibilities.
• The problem is further worsened by a lack of awareness about suitable courses and training opportunities, preventing many young people and workers from accessing relevant skilling programmes.

Salary Gap due to Lack of Skilling

• Skilling can significantly improve the earning potential of graduates.
• Data cited by NITI Aayog shows that graduates who undertake additional skilling tend to earn higher starting salaries than those with only generic degrees.
• This income advantage can widen over time, highlighting that skilling is not only important for employability but also for long-term income growth.
• For women in particular, these constraints are intensified by concerns around trust, social permission, safety, time availability, and uncertainty about employment outcomes.
  • Even where the desire to work or upskill exists, trusted support systems are often missing.

Gaps in Existing Skilling Infrastructure

• NITI Aayog noted that many skilling programmes focus more on enrolment and course completion than actual outcomes such as placement, career progression and income improvement.
• Training programmes are also often inflexible and poorly suited to the needs of different learners.
• Awareness of government schemes, apprenticeships, and scholarships remains low, including initiatives such as Pradhan Mantri Kaushal Vikas Yojana (PMKVY), Deen Dayal Upadhyaya Grameen Kaushalya Yojana (DDU-GKY), and the PM Internship Scheme, making it harder for people to make informed choices.
• Strengthening outcome-based, flexible and easily accessible skilling pathways is therefore essential.

Suggested Policy Reforms

• NITI Aayog has called for a shift from top-down, supply-driven skilling programmes to demand-driven, outcome-based and industry-backed models.
• General employability skills such as digital literacy, financial literacy and workplace readiness should be expanded, while reskilling should support workers affected by technological and structural changes.
• Generic degrees such as B.A., B.Sc. and B.Com. should be redesigned into industry-aligned applied specializations, along with wider adoption of Apprenticeship Embedded Degree Programmes (AEDP) and Work-Integrated Degree Programmes (WIDP).
• The report also recommends,
  • Establish greenfield PPP skilling universities (like the World Skill Center in Odisha),
  • Place dedicated PPP skilling hubs inside existing public campuses,
  • Implement brownfield college reforms partnering with industry to co-design academic tracks,
  • Provide academic autonomy (to update trade offerings and courses based on local demand) and administrative autonomy (to contract trainers and simplify tool procurement) to ITIs under robust PPP governance frameworks.

Conclusion

India’s skilling challenge is not merely about creating more courses, but about making education relevant to employment and industry needs. If educated youth remain unemployed, underemployed or outside education and employment, India’s demographic advantage can turn into an economic challenge.

A shift towards industry-linked education, apprenticeships, flexible skilling and outcome-based programmes can improve and help India realize its demographic dividend.

UPSC Prelims and Mains Practice Question

Consider the following statements regarding India’s higher education and employment situation:

1. NITI Aayog has highlighted weak job linkages for several general undergraduate degrees.
2. NEET refers to people who are Not in Employment, Education or Training.
3. Apprenticeship Embedded Degree Programmes (AEDP) aim to integrate workplace exposure with higher education.

Which of the statements given above is/are correct?

(a) 1 and 2 only
(b) 2 and 3 only
(c) 1 and 3 only
(d) 1, 2 and 3

Answer: (d)

Mains Practice Question

Q. India’s problem is no longer merely inadequate access to higher education, but the weak linkage between education, skills and employment. Discuss the causes of this mismatch and suggest measures to make India’s higher-education system more employment-oriented. (250 words)

Gorkhaland Demand: From 1907 Movement To New Political Framework

Source: Indian Express

GS I: Post-independence Consolidation and Reorganisation within the country.

Why in the News?

The Union Ministry of Home Affairs (MHA) has constituted a high-level committee to prepare a framework for a “permanent political solution” to the Gorkha issue in West Bengal.

News in Brief

• The demand for a separate Gorkha state/Gorkhaland has evolved over more than a century, with roots going back to 1907.
• The movement is centred on Darjeeling and adjoining areas, including Kalimpong, Kurseong, Terai and Dooars, where Gorkha communities seek greater political and administrative recognition.
• Earlier institutional responses included the Darjeeling Gorkha Hill Council (DGHC) in 1988 and the Gorkhaland Territorial Administration (GTA) in 2011.
• The new committee will examine the Gorkha issue within the framework of the Constitution, including governance, financial assistance and a roadmap for ST status for 11 Gorkha communities.

Historical Evolution of Gorkhaland Demand

The Gorkhaland movement is a century-long political campaign by the Gorkha community in West Bengal seeking a separate state of their own.

Early Beginnings (1907–1947)

• 1907 Petition- Sonam Wangel Laden La led the Darjeeling Hillmen’s Association to submit the first formal petition to the Minto-Morley Reforms Committee, asking to separate Darjeeling and Jalpaiguri from Bengal.
• British Era Appeals- Groups like the Gorkha Officers’ Association and the Kurseong Gorkha Library joined the cause, presenting demands to the Simon Commission in 1929 and British leaders for direct rule under a Chief Commissioner’s Province.
• Gorkhasthan (1947)- The Communist Party of India submitted a formal memorandum for a separate region named “Gorkhasthan” to interim leaders Jawaharlal Nehru and Liaquat Ali Khan.

The 1980s and the Gorkha National Liberation Front 

• Subhas Ghising- In the 1980s, Subhas Ghising founded the Gorkha National Liberation Front (GNLF) and coined the specific term “Gorkhaland.”
• Violent Unrest- The demand turned into a high-profile, violent campaign for statehood.
• DGHC Creation (1988)- The intense unrest ended with an agreement to form the Darjeeling Gorkha Hill Council (DGHC), a semi-autonomous body that ran the hills for 23 years.

Revival and the Gorkha Territorial Administration (2007–2011)

• New Leadership- In 2007, Bimal Gurung formed the Gorkha Janmukti Morcha (GJM), which brought back the active demand for a separate state.
• GTA Formation (2011)- The movement led the government to replace the old council with a new semi-autonomous body called the Gorkha Territorial Administration (GTA).

Recent Protests (2013–2017)

• 2013 Telangana Effect- Agitations sparked again when the central government recommended carving out Telangana from Andhra Pradesh.
• 2017 Language Dispute- The hills saw their longest protest lasting 104 days after the state government made Bengali a mandatory school subject.
• Impact- The 2017 clashes resulted in 11 deaths, bomb blasts, military intervention, and a complete shutdown of local tourism.
• The episode significantly changed the political landscape of the hills.

Changed Political Landscape

• Following the 2017 protests, Bimal Gurung went underground, leading to a political rift in the Gorkha leadership.
• Anit Thapa and Binay Tamang formed a breakaway faction aligned with the Trinamool Congress (TMC), creating a divide between TMC-backed local administration and BJP-aligned national politics.
• In the 2022 GTA elections, held after a 10-year gap, the Bharatiya Gorkha Prajatantrik Morcha (BGPM), formed by Anit Thapa, won 27 of 45 seats, while the BJP and Bimal Gurung’s GJM boycotted the polls.
• The BJP continued to maintain a strong electoral presence, winning the Darjeeling Lok Sabha seat in 2019 and 2024, and all three hill Assembly constituencies- Darjeeling, Kalimpong and Kurseong in 2026.

New High-Level Committee: Mandate

The newly constituted committee will,

• Examine all dimensions of the Gorkha issue within the framework of the Constitution.
• Examine structural governance arrangements for the region.
• Assess financial assistance required for the region.
• Review a roadmap for granting Scheduled Tribe (ST) status to 11 Gorkha communities.
• Seek to develop a framework for a permanent political solution.

Significance of the New Committee and Challenges

• The committee scope for resolving the issue through dialogue and within the constitutional framework.
• It could address the political aspirations of the community without immediately creating a separate state, while improving local governance and financial support.
• Consideration of ST status may provide greater constitutional protection to eligible communities.
• A lasting settlement could also bring greater peace, stability and economic development, particularly by supporting tourism and employment in the hills.

Challenges

• Different Gorkha political groups have divergent demands and political alignments.
• Statehood versus autonomy remains a contentious question.
• Any special arrangement must balance regional aspirations with West Bengal’s territorial and administrative interests.
• Other communities in the region may also have concerns regarding representation and resource distribution.

Conclusion

The Gorkhaland issue reflects the need to balance regional aspirations with national unity and constitutional principles.

A lasting solution requires sustained dialogue, effective local governance, inclusive development, and protection of legitimate identity concerns while respecting the federal framework.

UPSC Prelims Practice Question

Consider the following statements regarding Gorkhaland Movement 

1. The Movement has primarily been centred in the Darjeeling hill region of West Bemgal.
2. The movement has been associated with demands relating to Gorkha identity, political representation and greater autonomy. 
3. The new high-level committee has been asked to examine a roadmap for granting ST status to 11 Gorkha communities.

Which of the statements given above are correct?

(a) 1 and 2 only

(b) 1, 3 and 4 only

(c) 2, 3 and 4 only

(d) 1, 2, 3 and 4

Answer: (d) 1, 2, 3 and 4

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