Daily News Capsules
1. X acts on obscene Grok content after govt notice
Microblogging platform X removed about 3,500 pieces of content and deleted over 600 accounts after the company accepted its mistake in handling objectionable content generated by its AI chatbot Grok and committed to complying with Indian law, officials aware of the matter said on Sunday. The development came roughly a week after the ministry of electronics and information technology (MeitY) first raised concerns over obscene and sexually explicit content linked to the chatbot. India’s move was part of a widening international crackdown that has already seen Indonesia order a suspension of access to Grok and investigations by the European Union and UK. The AI chatbot Grok, developed by Musk’s xAI and integrated into X, has come under intense global scrutiny after users used its image-generation and editing capabilities to create and share non consensual, sexualised deepfake images of real people, including women and minors. These images, often depicting undressed or sexually suggestive content, spread widely on X and alarmed regulators and rights groups. Governments in Europe, Asia and beyond have criticised the tool’s safeguards and opened inquiries, while X has partly restricted the feature to paying users amid widespread backlash.
Possible Question
India has begun using its IT Act and intermediary rules to regulate generative-AI platforms for harmful and obscene content. Examine how existing digital-platform liability and “due diligence” frameworks can be applied to AI chatbots and deep-fake generators.
2. Born in India, still not a citizen? SC to examine citizenship law, issues notice to Union govt
The Supreme Court has agreed to examine whether India’s citizenship law can be interpreted liberally to ease the path to citizenship for children born in India to foreign nationals, including whether such children can be treated as “persons of Indian origin” (PIO) or otherwise granted citizenship by registration. A two-judge bench issued notice on January 8 to the Union government on a petition filed by 18-year-old girl Rachita Francis Xavier, born and raised in Andhra Pradesh to parents who were US citizens at the time of her birth, though they were residing in the country as Overseas Citizens of India (OCI) cardholders. Under the citizenship framework, while those born in India before July 1, 1987 are citizens by birth, children born after December 3, 2004 acquire citizenship only if at least one parent is an Indian citizen. In 2024, a single judge of the high court, justice Prathiba M Singh, ruled in Rachita’s favour, holding that she was eligible for citizenship by registration under Section 5(1)(a) of the Citizenship Act. That provision allows citizenship by registration to a “person of Indian origin” who has been ordinarily resident in India for seven years and is not an “illegal migrant”. Justice Singh further held that Rachita qualified as a person of Indian origin because her mother was born in Andhra Pradesh in 1958. Following the ruling, the Union home ministry granted Rachita Indian citizenship but the government strongly contested the reasoning of the single judge and appealed. On July 14, a division bench of the Delhi high court overturned the single judge’s interpretation of “person of Indian origin”, holding it to be a “misreading” of the statute. It relied on an intervening Supreme Court judgment delivered in October 2024, which gave a definitive interpretation of the phrase “undivided India” used in the Citizenship Act. The Supreme Court had clarified that “undivided India” refers to India as defined under the Government of India Act, 1935 — meaning pre-Partition India before August 15, 1947. It was then Rachita that approached the Supreme Court.
Possible Question
Discuss how the Citizenship Act, 1955 balances jus soli (birth-based citizenship) and jus sanguinis (citizenship by descent). How does the Supreme Court’s interpretation of “person of Indian origin” affect children born in India to foreign nationals?
3. Trump weighs Iran strikes as Israel on alert
US President Donald Trump has been briefed on a range of military options targeting Iran as Israel remains on high alert following a phone call in which Prime Minister Benjamin Netanyahu and US Secretary of State Marco Rubio discussed the possibility of US intervention in the country, with Iran’s protest death toll climbing to at least 538, according to US-based Human Rights Activists News Agency, ANI, Reuters, AP and The NYT reported. Trump is scheduled to be briefed again on Tuesday on specific options to respond to the protests in Iran, the Wall Street Journal reported, citing US officials. The meeting will be a discussion about possible next steps including military strikes, deploying secretive cyber weapons against Iranian military and civilian sites, placing more sanctions on Iran’s government and boosting anti-government sources online, the Journal reported. The NYT and WSJ, citing anonymous US officials, said on Saturday night that Trump had not made a final decision. Inside Iran, President Masoud Pezeshkian struck a harder tone even as he claimed officials were willing to listen to public grievances. “People have concerns, we should sit with them and if it is our duty, we should resolve their concerns,” Pezeshkian said. “But the higher duty is not to allow a group of rioters to come and destroy the entire society.” Iran’s parliament speaker warned the US military and Israel would be “legitimate targets” if America strikes the Islamic Republic, as threatened by Trump.
Possible Question
Examine the implications of potential US military intervention in Iran for West Asian stability, India’s energy security, and India’s strategic autonomy in foreign policy.
4. Police bust gang that preyed on Indians with terror probe threat
Delhi Police have busted an international cybercrime syndicate that defrauded victims across India of nearly ₹100 crore by impersonating anti-terror officers and placing them under “digital arrest”, arresting seven people including a Taiwanese national who served as the operation’s technical backbone. The arrests mark a rare victory in what has become a transnational game of whac-a-mole for law enforcement: such networks shift operations across Cambodia, Myanmar, and parts of West Asia as quickly as authorities shut down one hub. Indian agencies busted a ₹1,000-crore syndicate in December 2025, yet thousands of fraud complaints continue to flood the National Cyber Reporting Platform. The latest syndicate routed international scam calls from Cambodia into India using illegal sim box installations that masked them as domestic numbers, enabling fraudsters to evade detection while threatening victims with fake terror charges linked to the Pahalgam attack and Delhi blasts, police said on Saturday. The breakthrough came when investigators identified I-Tsung Chen (30), a Taiwanese national who police say supplied, installed and configured the sim box hardware across multiple Indian cities. Chen was arrested at Delhi’s international airport on December 21 when he arrived in the country, purportedly to troubleshoot one of the systems police had intercepted. During interrogation, Chen allegedly admitted to smuggling sim box devices into India and deploying them across multiple locations, police said. Investigators linked him to a Taiwan-based organised crime network allegedly headed by gangster Shang Min Wu, with a history of kidnapping for ransom, large-scale fraud and money laundering across countries.
Possible Question
Transnational cyber-fraud networks increasingly exploit telecom and digital infrastructure. Analyse how SIM box fraud, digital impersonation and cross-border syndicates pose challenges to India’s internal security and cyber governance.
5. Clean slate in IBC as govt accepts proposals
The Centre has accepted all recommendations, barring one, of a Lok Sabha panel proposing changes to India’s bankruptcy law, setting the stage for sweeping changes to the eight-year-old legislation. This paves the way for the Insolvency and Bankruptcy Code (Amendments) Bill, 2025 to be passed in the upcoming budget session of Parliament starting 28 January. The bill, introduced in Parliament in the monsoon session by finance and corporate affairs minister Nirmala Sitharaman, was referred to a select committee of the Lok Sabha led by MP Baijayant Panda. The Centre has backed a wide ranging set of reforms recommended by the committee, the people said, aimed at speeding up resolutions, reducing litigation, and improving outcomes for creditors— including changes to insolvency timelines, voting thresholds, liquidator appointments, and decriminalisation of certain offences. What it has not endorsed is a clarification from the committee that granting a “clean slate” to new investors in corporate debt resolution plans—under proposed amendments to section 31 of the bankruptcy code—should apply retrospectively from the inception of the IBC in 2016. The government’s reasoning for opposing this recommendation is that several bankruptcy cases are currently before the courts, and applying the amendment retrospectively could have “unfathomable consequences” that cannot be anticipated at this stage. Clause 19 of the bill, dealing with amending section 31 of IBC—seeks to strengthen protections for new investors by wiping out past liabilities of companies rescued under the bankruptcy process, giving incoming owners a “clean slate”. Once a resolution plan is approved, existing recovery proceedings cannot continue, and fresh claims related to past dues cannot be initiated.
Possible Question
What does the principle of a “clean slate” under the Insolvency and Bankruptcy Code (IBC) mean? Examine how it affects investor confidence, creditor rights and resolution of stressed assets.
Editorial Snapshots
A. Shoring up capex capacity of states
The Union budget is the most important economic policy event by a distance on the annual calendar. Without prejudice to its importance for the economy at large, it is worth underlining that the states, put together, spend more than the Centre in India. This makes the fiscal priorities of the states a very important driver of overall economic fortunes. It is in this context that the role of capital spending by the states cannot be overemphasized. Capital spending is necessary to plug supply side gaps in India’s infrastructural setup, which if done well, can unlock growth and give a boost to future incomes apart from driving present day demand. India’s fiscal federalism has made a gradual pivot away from the autonomy enjoyed by state governments in the post-GST era. Barring some heads such as excise and fossil fuel taxes, states don’t really have an option to tweak their tax rates. That makes fiscal capacity a largely predetermined variable for states, where revenue is just a function of higher growth or lower spending. This economic environment has developed along with a political environment where rising demands for schemes such as cash transfers are putting increased pressure on state finances from the revenue expenditure side. Given the fact that states face a far more stringent FRBM (fiscal regulation and budgetary management) framework than the Centre, it has led to a situation whether either debt or capital spending is likely to end up reflecting the adverse effects of the fiscal squeeze. It is here that the idea of interest free loans from the Centre to the states, for capex, was broached in the Union budget a couple of years ago — and then launched. In its purest and simplest form, the scheme helps safeguard capital spending across states with a relaxed debt overhang for state governments. An HT report published on Sunday says that a pre-budget consultation with state finance ministers reflected an overwhelming sentiment for this scheme to be continued in the forthcoming budget. While a lot of state governments in India are of the same political disposition as the government at the Centre, and therefore, some policy congruence is to be expected, states using this scheme to boost their capital spending is a heartening development. It will be a good idea for either the Union finance ministry or RBI to put together the facts on the kind of capex the states have undertaken using this scheme in the near future.
Possible Question
Why is capital expenditure by states critical for India’s growth? Analyse how interest free capex loans from the Centre affect fiscal federalism, state finances and infrastructure creation.
B. Iran’s crisis is not for the West to resolve
West Asia seems headed for another round of crisis and uncertainty as Tehran threatens to crush street protests against the government over rising unemployment and inflation. Unconfirmed reports — the regime has enforced an internet blackout — estimate that over a 100 deaths in police action since people started mobilising on the streets beginning late December. What can further complicate the situation is any US intervention; Washington has long seen the Islamic Republic as an ideological foe and a threat to its interests in the region. President Donald Trump posted Saturday on Truth Social that “Iran is looking at FREEDOM, perhaps like never before. The USA stands ready to help!!!” Tehran has already sought to malign the protests as instigated by the US and Israel, both countries that bombed Iran last year during the war in Gaza. Any military measure by the US or its allies has the potential to change the discourse in Iran and intensify action by the Islamic Revolutionary Guards. Iran has been rocked by protests over students’ concerns, women’s rights and jobs, over the decades. Washington’s attempt to appropriate the dissent in Iran has always helped the clerics who have dominated the Islamic republic since the revolution of the late 1970s, to rally conservative sections of the society and block the reformist tendencies even in the clergy. Any outside intervention can only strengthen their argument that the protests are a US-Israeli conspiracy and that the protestors have no agency. Left to itself, Tehran will have no option but to address the concerns flagged by the restive citizens or make way for new political forces. The history of external interventions in Iran — the 1953 coup instigated by the US and UK to depose Prime Minister Mohammad Mosaddegh, or the attempt to prop up the Shah in the 1970s — suggests that conservative forces stand to gain in the event of political uncertainty and economic distress. Iraq and Afghanistan taught the world that democracy is not an exportable commodity. And, one less conflict will be better for this chaotic time.
Possible Question
Using Iran as a case study, critically examine why external military or political intervention often weakens democratic movements rather than strengthening them.
Fact of the day
India invited to G7 meet on rare earths: US Treasury Secretary Scott Bessent said Australia and several other countries would join a meeting of finance ministers from the Group of Seven (G7) advanced economies that he is hosting in Washington on Monday to discuss critical minerals. Bessent said he had pressed for a separate meeting on the issue since last summer’s summit of G7 leaders, and finance ministers had already held a virtual meeting in December. India was also invited to attend the meeting, Bessent told Reuters in an interview after touring the Minneapolis-area engineering lab of RV and boat maker Winnebago Industries. He said he was unsure if it had accepted the invitation. It was not immediately clear which other countries had been invited. The G7 includes the US, Britain, Japan, France, Germany, Italy and Canada, as well as the European Union, most of whom are heavily dependent on rare earths supplies from China. The group last June agreed on an action plan to secure their supply chains and boost their economies. Australia signed an agreement with the US in October aimed at countering China’s dominance in critical minerals. It included an $8.5 billion project pipeline and leverages Australia’s proposed strategic reserve, which will supply metals like rare earths and lithium that are vulnerable to disruption. Canberra has said it has subsequently received interest from Europe, Japan, South Korea and Singapore. China dominates the critical minerals supply chain, refining between 47% and 87% of copper, lithium, cobalt, graphite and rare earths, according to the International Energy Agency. Monday’s meeting comes days after reports that China had begun restricting exports to Japanese firms of rare earths and powerful magnets containing them, as well as banning exports of dual-use items to the Japanese military.
