Economy

 

Indian Economy Current Affairs, important for Competitive Exams.

India’s Industrial Growth Slows to 2.9% in February 2025: Mixed Sector Performance Noted

India’s Index of Industrial Production (IIP) rose 2.9% year-on-year in February 2025, showing moderate growth compared to 5.0% in January, as per the Ministry of Statistics and Programme Implementation.

Sector-wise:

  • Manufacturing (highest weight in IIP) grew 2.9%
  • Electricity generation rose 3.6%
  • Mining increased by 1.6%

Overall IIP stood at 151.3 in February, up from 147.1 last year.

Within manufacturing, 14 of 23 industry groups posted gains, led by:

  • Basic metals: 5.8%
  • Motor vehicles, trailers, and semi-trailers: 8.9%
  • Other non-metallic mineral products: 8%

Key drivers: auto components, alloy steel, cement, and prefabricated concrete blocks.

Use-based trends:

  • Capital goods: +8.2%
  • Infrastructure/construction goods: +6.6%
  • Primary goods: +2.8%
  • Consumer durables: +3.8%
  • Consumer non-durables: -2.1%

The report included revised figures for January 2025 (first revision) and November 2024 (final), with 94% and 95% response rates respectively.

March 2025 IIP data will be released on April 28.

RBI Cuts Repo Rate to 6% in April 2025 Monetary Policy Review

On April 9, 2025, the Reserve Bank of India’s Monetary Policy Committee (MPC) unanimously cut the policy repo rate by 25 basis points to 6%, marking the second consecutive rate reduction this year. The Standing Deposit Facility (SDF) was adjusted to 5.75%, while the Marginal Standing Facility (MSF) and Bank Rate were set at 6.25%.

The MPC also shifted its policy stance from neutral to accommodative, citing evolving economic conditions and the need for close monitoring. RBI Governor Sanjay Malhotra mentioned that unless shocks arise, the committee will consider either maintaining rates or further cuts in future.

Inflation data showed food inflation dropped to a 21-month low of 3.8% in February 2025, while core inflation rose to 4.1%, driven by higher gold prices. The RBI projects CPI inflation at 4% for 2025–26, noting positive signs like falling crude oil prices, but also warning of risks from global uncertainties and weather-related disruptions.

The Governor also addressed global trade tensions, including tariff uncertainties, which he said could hurt both global and domestic growth, though exact impacts are hard to quantify. He added that all central banks are adopting a cautious approach due to weakening US dollar, lower bond yields, and falling oil prices.

The next MPC meeting is scheduled for June 4–6, 2025.

Govt Merges 26 Regional Rural Banks Under ‘One State, One RRB’ Plan

On 8 April 2025, the Department of Financial Services (DFS) under the Ministry of Finance announced the amalgamation of 26 Regional Rural Banks (RRBs) as part of the fourth phase of consolidation, following the principle of “One State, One RRB.” This move aims to improve operational efficiency, rationalize costs, and enhance rural financial inclusion.

The merger, based on stakeholder consultations since November 2024, covers RRBs in 10 states and one union territory. With this move, the number of RRBs is now reduced from 43 to 28, operating over 22,000 branches across 700 districts, with 92% branches in rural and semi-urban areas.

The government has been implementing RRB mergers in phases:

  • Phase 1 (2006–2010): RRBs reduced from 196 to 82
  • Phase 2 (2013–2015): Reduced to 56
  • Phase 3 (2019–2021): Reduced to 43
  • Phase 4 (2025): Now 28 RRBs remain

The reform is expected to boost the scale and efficiency of RRB operations and support India’s broader financial inclusion goals.

RBI Begins Bi-Monthly Policy Review, Repo Rate Cut Expected

On April 7, 2025, the Reserve Bank of India (RBI) began its three-day bi-monthly monetary policy review meeting, with a key focus on deciding the benchmark repo rate. The meeting is led by RBI Governor Sanjay Malhotra and includes six members of the Monetary Policy Committee (MPC). The final decision is scheduled to be announced on April 9, 2025.

This session is significant as it marks the first MPC meeting of the new financial year and follows the Union Budget 2025, which aimed to boost consumer spending through changes in income tax slabs.

In February 2025, the MPC cut the repo rate by 25 basis points, bringing it to 6.25%—its first rate cut in nearly three years (since May 2020).

Experts predict another 25 bps rate cut in this meeting as a response to global economic uncertainties, including the US announcement of reciprocal tariffs, which could impact trade and inflation.

Impact of Donald Trump’s 26% Reciprocal Tariff on Indian Economy

Donald Trump’s announcement of a 26% reciprocal tariff on Indian goods has significant implications for India’s economy and trade relations. This tariff, effective from April 9, 2025, is aimed at countering what Trump described as India’s high tariffs on American goods, which he claimed were as high as 52%.

The sectors most affected include automobiles, IT, and pharmaceuticals, with potential declines in export revenues. For instance, Indian automobile companies like Tata Motors, which exports vehicles to the US, have already seen a drop in stock value. On the other hand, pharmaceutical exports are currently exempt from this tariff, offering some relief to Indian companies.

India is reportedly considering reducing tariffs on $23 billion worth of US imports to mitigate the impact, but no agreement has been finalized yet. The broader economic effects will depend on how long these tariffs remain in place and whether India and the US can negotiate a trade deal to ease tensions.

This move underscores the complexities of global trade and the challenges emerging economies like India face in balancing domestic interests with international trade dynamics.

RBI Reports 98.21% Return of ₹2000 Notes

The Reserve Bank of India (RBI) announced that 98.21% of ₹2000 banknotes have been returned to the banking system as on March 31, 2024. On May 19, 2023, the RBI declared the withdrawal of ₹2000 notes from circulation. At that time, ₹3.56 lakh crore worth of ₹2000 notes were in circulation, which has now reduced to ₹6,366 crore as of March 31, 2024.

The deposit and exchange facility at bank branches was available until October 7, 2023, but remains open at 19 RBI issue offices. People can also send ₹2000 notes via India Post for credit to their bank accounts. Despite withdrawal, ₹2000 notes remain legal tender.

Unified Pension Scheme (UPS) for Central Government employees came into effect on April 1, 2025

The Unified Pension Scheme (UPS) for Central Government employees came into effect on April 1, 2025, as an option under the National Pension System (NPS). The Pension Fund Regulatory and Development Authority (PFRDA) has issued regulations for its implementation, covering three categories of employees:

  1. Existing central government employees under NPS as of April 1, 2025.
  2. New recruits joining the service on or after April 1, 2025.
  3. Retired employees under NPS who retired on or before April 30, 2025, through regular or voluntary retirement.

Approximately 23 lakh employees are expected to benefit from the scheme. Employees who joined on or after January 1, 2004, can choose to switch from NPS to UPS. Eligible employees can enroll and submit claims through the Protean CRA portal starting April 1.

The UPS offers 50% of the average basic pay drawn in the last 12 months before retirement, provided the employee has completed a minimum of 25 years of service. In the case of the employee’s demise, the family will receive 60% of the pension. The scheme also guarantees a minimum pension of ₹10,000 per month for those with at least 10 years of service.

Union Cabinet Approves 2% Increase in Dearness Allowance for Employees and Pensioners

The Union Cabinet on 28 March 2025 approved a 2% increase in dearness allowance (DA) for central government employees and dearness relief (DR) for pensioners, effective from January 1, 2025, raising it from 53% to 55% of basic pay or pension.

This decision will benefit around 48.66 lakh employees and 66.55 lakh pensioners, with an estimated financial burden of Rs. 6,614.04 crore per year.

The increase follows the 7th Central Pay Commission’s recommendations to provide financial support against inflation.

ATM Withdrawals to Cost More Starting May 1, 2025

The Reserve Bank of India (RBI) has raised interchange fees, making ATM transactions more expensive across the country from May 1,2025.

Key points:
👉 Financial transactions beyond the free limit will now cost Rs 19 per transaction, up from Rs 17.
👉 Non-financial services like balance inquiries will cost Rs 7 per transaction, a Rs 1 hike.

This move comes after requests from white-label ATM operators citing rising operational costs. Smaller banks, reliant on larger institutions for ATM infrastructure, are expected to feel the pinch.

📉 The Shift to Digital:
ATMs, once the backbone of banking convenience, face challenges as digital wallets and UPI take center stage. Digital transactions in India have skyrocketed, growing from Rs 952 lakh crore in FY14 to Rs 3,658 lakh crore in FY23.

💡 What This Means for You:
Prepare for higher costs if you rely on ATMs for cash withdrawals. This may encourage further adoption of cashless alternatives, aligning with India’s growing digital economy. 🚀

IRCTC and IRFC Granted ‘Navratna’ Status by the Government of India

The Indian Railway Catering and Tourism Corporation (IRCTC) and the Indian Railway Finance Corporation (IRFC) have achieved a significant milestone by being granted ‘Navratna’ status by the Government of India on March 3, 2025. This prestigious recognition elevates them to the elite group of Central Public Sector Enterprises (CPSEs) with enhanced financial and operational autonomy.

IRCTC: Established in 1999, IRCTC is responsible for online ticket booking, catering, and tourism services for Indian Railways. For the financial year 2023-24, IRCTC reported an annual turnover of ₹4,270.18 crore, a net worth of ₹3,229.97 crore, and a profit after tax (PAT) of ₹1,111.26 crore.

IRFC: Founded in 1986, IRFC plays a crucial role in raising funds for Indian Railways’ expansion and modernization projects. For the financial year 2023-24, IRFC reported an annual turnover of ₹26,644 crore, a net worth of ₹49,178 crore, and a PAT of ₹6,412 crore.

Benefits of Navratna Status:

  • Financial Independence: Both IRCTC and IRFC can now invest up to ₹1,000 crore or 15% of their net worth on a single project without needing government approval.
  • Operational Autonomy: The new status allows these companies to expand their operations, enter new business areas, and form joint ventures with greater ease.
  • Enhanced Competitiveness: The Navratna status is aimed at making public sector enterprises more competitive and self-sufficient in their operations.

List of Navratna Companies in India:

  1. Bharat Electronics Limited (BEL)
  2. Container Corporation of India Limited (CONCOR)
  3. Engineers India Limited (EIL)
  4. Hindustan Aeronautics Limited (HAL)
  5. Mahanagar Telephone Nigam Limited (MTNL)
  6. National Aluminium Company Limited (NALCO)
  7. National Buildings Construction Corporation Limited (NBCC)
  8. National Mineral Development Corporation Limited (NMDC)
  9. Neyveli Lignite Corporation Limited (NLC India)
  10. Oil India Limited (OIL)
  11. Power Finance Corporation (PFC)
  12. Rashtriya Ispat Nigam Limited (RINL)
  13. Rural Electrification Corporation (REC)
  14. Shipping Corporation of India Limited (SCI)
  15. Rail Vikas Nigam Limited (RVNL)
  16. RITES Limited
  17. IRCON International Limited
  18. ONGC Videsh Limited (OVL)
  19. Rashtriya Chemicals & Fertilisers Limited (RCF)
  20. National Fertilizers Limited (NFL)
  21. Bharat Petroleum Corporation Limited (BPCL)
  22. Hindustan Petroleum Corporation Limited (HPCL)
  23. Mangalore Refinery and Petrochemicals Limited (MRPL)
  24. Balmer Lawrie & Co. Limited
  25. Indian Railway Catering and Tourism Corporation (IRCTC)
  26. Indian Railway Finance Corporation (IRFC)

This recognition is a testament to the exceptional financial and operational performance of IRCTC and IRFC. It is expected to accelerate their growth and contribute significantly to the development of India’s railway sector.

India’s economy grew by 6.2% in real terms during the October-December quarter of 2024-25

India’s economy grew by 6.2% in real terms during the October-December quarter of 2024-25, according to official data released on 28 February 2025. This growth was higher than the 5.6% recorded in the previous quarter but below the 6.8% forecast by the Reserve Bank of India (RBI). The weaker-than-expected growth is attributed to sluggish consumption and stock market performance.

The RBI’s GDP growth projection for 2024-25 is 6.6%, with the economy expected to grow by 7.2% in the January-March quarter. India’s real GDP growth for 2024-25 is estimated at 6.5%, lower than the 8.2% growth in 2023-24. Nominal GDP is projected to grow at 9.7% in 2024-25.

India remained the fastest-growing major economy, with 8.2% growth in 2023-24, following 7.2% in 2022-23 and 8.7% in 2021-22. The World Bank emphasized the need for 7.8% average growth over the next 22 years for India to become a developed nation by 2047, requiring bold reforms and effective execution.

Sensex Crashes 1,414 points, Amid Global Trade Tensions

The Indian stock market experienced a sharp decline on February 28, 2025, due to weak global cues and escalating trade tensions. The Sensex plunged 1,414 points (1.9%) to close at 73,198, marking a monthly loss of 4,303 points (5.6%) and a 15% drop from its all-time high. Similarly, the Nifty 50 fell 420 points (1.86%) to settle at 22,125, recording a 5.9% decline in February and a 16% drop from its peak.

The downturn followed U.S. President Donald Trump’s announcement of tariffs on Canada, Mexico (starting March 4), and an additional 10% on China, triggering fears of a global trade war. The sell-off was broad-based, with all sectoral indices closing in the red. IndusInd Bank (-7%) led the losses, followed by Tech Mahindra, Tata Motors, Infosys, and Nestle India (-4% to -6%). Only HDFC Bank (+2%) managed to gain.

IT and auto stocks suffered the most, falling 4% each, while FMCG, healthcare, and capital goods declined over 2%. The BSE MidCap and SmallCap indices dropped over 2%, with the SmallCap index recording its steepest monthly fall in five years.

Investor sentiment remained highly negative, with 3,248 stocks declining out of 4,081 traded, and 476 hitting lower circuit limits. Analysts predict Nifty support at 21,800-22,000, with further downside risks if breached.

Advantage Assam 2.0 Summit 2025 held on February 25-26, 2025, in Guwahati

The Advantage Assam 2.0 Investment and Infrastructure Summit 2025 was held on February 25-26, 2025, in Guwahati, Assam. This summit aimed to position Assam as a premier investment destination in India and Southeast Asia, showcasing the state’s potential across various sectors.

Key Highlights:

Investment Proposals: The summit concluded with investment proposals worth Rs 10,785 crore signed across multiple sectors, including infrastructure, healthcare, manufacturing, mining, hospitality, and green energy.

Major Announcements: The Adani Group announced a massive Rs 50,000 crore investment in Assam, focusing on airports, aero-cities, city gas distribution, power transmission, cement, and road projects. Additionally, the Central government pledged Rs 1 lakh crore for infrastructure development in sectors such as road transport, railway connectivity, waterways enhancement, and air connectivity.

Memorandums of Understanding (MoUs): A total of 164 MoUs were signed across 15 sectors, reflecting the growing confidence of industry leaders in Assam’s economic potential. Notable agreements included investments in data centers, super-specialty hospitals, cement plants, hydrogen and steam generation plants, eco-resorts, and manufacturing plants.

International Collaborations: The summit also saw several international collaborations, including an MoU with the Bill & Melinda Gates Foundation for developmental support in health and agriculture. Singapore’s Ministry of Trade and Industry signed an agreement to cooperate on nursing talent skills, while Japanese companies committed to establishing skill training institutes and language centers.

Government Support: Prime Minister Narendra Modi inaugurated the summit, emphasizing Assam’s strategic importance and its role in India’s growth story. He highlighted the state’s dynamic workforce, rapid growth, and the government’s commitment to promoting industry and ease of doing business.

RBI imposes monetary penalty on Citibank, Asirvad Micro Finance, and JM Financial

On 21st February 2025, the Reserve Bank of India (RBI) imposed monetary penalties on three financial institutions for regulatory non-compliance:

Citibank was fined ₹39 lakh for violating directions related to the Large Exposures Framework and Furnishing of Credit Information to Credit Information Companies.

Asirvad Micro Finance Limited was fined ₹6.2 lakh for failing to report borrowers’ household income, not providing factsheets to certain gold loan customers, and lacking an auto-escalation system for rejected complaints.

JM Financial Home Loans Limited was fined ₹1.5 lakh for not disclosing the approach for risk gradation and the rationale behind different interest rates for different borrower categories.

RBI clarified that these penalties are due to regulatory deficiencies and do not question the validity of transactions or agreements with customers.

RBI Lifts Business Restrictions on Kotak Mahindra Bank

The Reserve Bank of India (RBI) has lifted the business restrictions imposed on Kotak Mahindra Bank Limited. These restrictions, which were imposed on April 24, 2024, barred the bank from onboarding new customers through its online and mobile banking channels and issuing fresh credit cards.

The RBI’s decision to lift these restrictions comes after Kotak Mahindra Bank implemented remedial measures to address the supervisory concerns raised by the central bank. The bank also commissioned an external audit, approved by the RBI, to validate the compliance.

With the restrictions lifted, Kotak Mahindra Bank can now resume its digital customer acquisition and credit card issuance. This move is expected to positively impact the bank’s net interest margin (NIM) and fee income growth.

RBI Cuts Repo Rate After 5 Years, Announces Financial and Digital Security Measures

On 7 February 2025, the Reserve Bank of India (RBI) reduced the policy repo rate by 25 basis points, from 6.50% to 6.25%, marking the first rate cut in nearly five years. RBI Governor Sanjay Malhotra made the announcement after a three-day Monetary Policy Committee (MPC) meeting in Mumbai. As a result:

  • Standing Deposit Facility (SDF) rate is now 6.00%
  • Marginal Standing Facility (MSF) rate and Bank Rate remain at 6.50%
  • The MPC has maintained a ‘neutral’ stance, focusing on controlling inflation while supporting growth

The last rate cut was in May 2020, and the most recent revision was in February 2023, when the repo rate was raised to 6.50%.

Economic and Inflation Projections

  • Real GDP growth for FY 2024-25 is projected at 6.4% (earlier 6.6%)
  • Real GDP for FY 2025-26 revised from 6.9% to 6.7% due to global uncertainties
  • CPI Inflation for FY 2024-25 estimated at 4.8%, with Q4 at 4.4%
  • CPI Inflation for FY 2025-26 projected at 4.2% (assuming normal monsoon)

Key Announcements

Banking Security Measures: RBI will launch ‘bank.in’ as an exclusive Internet domain for Indian banks, starting April 2025. A ‘fin.in’ domain for the financial sector will follow

Additional Factor of Authentication (AFA) to be extended to international digital payments : Banks and NBFCs advised to strengthen cybersecurity measures and incident response mechanisms

Financial Literacy & Market Reforms: Financial Literacy Week (starting 24 February 2025) will focus on women’s financial decision-making with the theme “Financial Literacy: Women’s Prosperity”

A working group will review trading and settlement timings for RBI-regulated markets and submit a report by 30 April 2025

This repo rate cut signals RBI’s confidence in moderating inflation while ensuring sustained economic growth.

Main Highlights of Budget 2025

Finance Minister Nirmala Sitharaman presented the Union Budget 2025 in Parliament on February 1, 2025. This was her eighth consecutive budget presentation, making her the first Finance Minister to achieve this milestone.

Here are the main highlights of Budget 2025:

Income Tax Reforms: No income tax payable up to ₹12 lakh under the new tax regime.

Capex Increase: Capital expenditure (Capex) rises to ₹11.21 lakh crore for FY2025-26.

Agriculture Initiatives: Launch of Prime Minister Dhan-Dhaanya Krishi Yojana targeting 100 districts with low productivity.

Nuclear Energy Mission: Aim to develop 100 GW of nuclear power by 2047, with ₹20,000 crore allocated for Small Modular Reactors (SMRs).

MSME Support: Customized credit cards for MSMEs, enhanced investment and turnover limits, and a new fund of funds.

Urban Development: ₹1 lakh crore Urban Challenge Fund to transform cities into growth hubs.

Employment Generation: Plans to generate 22 lakh jobs through various schemes.

Regional Connectivity: Modified UDAN Scheme to enhance regional connectivity to 120 new destinations.

Healthcare: Enhanced credit limits for farmers and inclusion of gig economy workers in welfare schemes.

Education: 50,000 Atal Tinkering Labs to be set up in government schools over the next five years.

MCQs on Budget 2025:

Q.: How many consecutive budgets has Finance Minister Nirmala Sitharaman presented as of 2025?

A) Six
B) Seven
C) Eight
D) Nine

Ans: C) Eight
Finance Minister Nirmala Sitharaman presented the Union Budget 2025 in Parliament on February 1, 2025. This was her eighth consecutive budget presentation, making her the first Finance Minister to achieve this milestone.

Q.: Up to what amount is no income tax payable under the new tax regime in Budget 2025?

A) ₹10 lakh
B) ₹11 lakh
C) ₹12 lakh
D) ₹13 lakh

Ans: C) ₹12 lakh
Income Tax Reforms: No income tax payable up to ₹12 lakh under the new tax regime.

Q.: As per Budget 2025, How many Atal Tinkering Labs are planned to be set up in government schools over the next five years?

A) 40,000
B) 45,000
C) 50,000
D) 55,000

Ans: C) 50,000
Education: 50,000 Atal Tinkering Labs to be set up in government schools over the next five years.

Economic Survey Projects India’s Real GDP to Grow by 6.4% in FY 2025

The Economic Survey, presented by Union Finance Minister Nirmala Sitharaman on 31 Jan 2025, estimates India’s real GDP to grow by 6.4 percent in the financial year 2025, with growth likely ranging between 6.3 and 6.8 percent in FY 2026.

The survey highlights that the fundamentals of the domestic economy remain robust, with steady growth supported by the agriculture and services sector. Rural demand is improving due to record Kharif production and favorable agricultural conditions. The manufacturing sector faced challenges due to weak global demand and seasonal conditions, but private consumption remained stable.

Fiscal discipline and strong external balance contributed to macroeconomic stability, supported by a services trade surplus and healthy remittance growth. The survey stresses the importance of improving global competitiveness through grassroots-level structural reforms and deregulation.

In Q1 of FY 2025, GDP grew by 6.7 percent, while Q2 saw a 5.4 percent growth, resulting in a real GDP growth of 6 percent in the first half of the fiscal year. The agriculture sector maintained steady growth, recording a 3.5 percent growth rate in Q2. The industrial sector grew by 6 percent in the first half of FY 2025, with a notable 8.3 percent growth in Q1. The services sector performed well, achieving a 7.1 percent growth in the first half of FY 2025.

Fiscal discipline has progressively improved, and retail headline inflation, measured by the Consumer Price Index, softened from 5.4 percent in FY 2024 to 4.9 percent from April to December 2024. Food inflation is expected to ease in Q4 of FY 2025. The unemployment rate for individuals aged 15 years and above has steadily declined from 6 percent in 2017-18 to 3.2 percent in 2023-24, according to the 2023-24 annual Periodic Labour Force Survey (PLFS) report.

RBI Announces Rs 1.1 Lakh Crore Liquidity Injection to Ease Tight Conditions

On January 27, 2025, the RBI announced a plan to inject Rs 1.1 lakh crore into the banking system via open market purchases of securities, a variable rate repo auction, and a $5 billion dollar-rupee swap auction. The RBI will purchase Rs 60,000 crore in government securities in three tranches (Jan 30, Feb 13, Feb 20). A Rs 50,000 crore repo auction is scheduled for Feb 7, and a $5 billion swap auction on Jan 31.

Liquidity remains tight with a deficit of over Rs 3 lakh crore. The RBI also introduced new liquidity coverage norms requiring banks to set aside funds for risks, especially due to mobile and internet banking usage. Banks are concerned these norms may impact credit growth.

This initiative is under the tenure of RBI Governor Sanjay Malhotra, who succeeded Shaktikanta Das in December.

Bharat Mobility Global Expo 2025 from January 17 to January 22, 2025

Prime Minister Narendra Modi inaugurated the Bharat Mobility Global Expo 2025 on January 17, 2025, at Bharat Mandapam, New Delhi. The six-day event, held across multiple venues in the National Capital Region, including Bharat Mandapam, Yashobhoomi, and the India Expo Centre in Greater Noida, runs from January 17 to January 22, 2025.

This significant automotive industry expo showcases over 100 new launches in vehicles, components, and technologies, attracting more than 5,000 global buyers. Key participants include Ather Energy, Ola Electric, VinFast, and other prominent national and international brands. The expo also features 20+ conferences addressing sustainability, innovation, and technology in mobility.

The public can visit the event from January 19 to January 22, 10 am to 6 pm, with free entry requiring prior registration.

8th Pay Commission announces for Central government employees & pensioners

8th Pay Commission Announcement: The government announced the setting up of the 8th Pay Commission for central government employees and pensioners on 16 January 2025.

7th Pay Commission term ends in 2026.

The commission will benefit over 45 lakh employees and 68 lakh pensioners.

India’s GDP projected to grow at 6.4% in the fiscal year 2024-25

India’s Gross Domestic Product (GDP) is projected to grow at 6.4% in the fiscal year 2024-25, as per the first advance estimates by the National Statistics Office (NSO). Nominal GDP has witnessed a growth rate of 9.7%. In the previous fiscal year, GDP growth was 8.2%, while Nominal GDP growth was 9.6%.

Real Gross Value Added (GVA) has grown by 6.4%, compared to 7.2% in FY 2023-24. Nominal GVA growth rate is 9.3%, up from 8.5% in the previous year. The agriculture and allied sectors’ real GVA is estimated to grow by 3.8%, a significant increase from 1.4% the previous year. The construction sector’s real GVA is projected to rise by 8.6%, and the financial, real estate, and professional services sector is expected to grow by 7.3%.

Satya Nadella, Microsoft Chairman and CEO, Meets Indian Prime Minister Narendra Modi

On 6th January 2025, Microsoft Chairman and CEO Satya Nadella met with Prime Minister Narendra Modi in New Delhi. They discussed technology, innovation, and artificial intelligence.

Shri Modi expressed enthusiasm about Microsoft’s expansion and investment plans in India, calling the meeting a delightful and insightful discussion.

UPI transactions surge to record 16.73 bn in Dec 2024

National Payments Corporation of India (NPCI) has said that Unified Payments Interface (UPI) has:

  1. Record Transactions: Unified Payments Interface (UPI) processed nearly 16.73 billion financial transactions in December 2024.
  2. Transaction Value: The total value of these transactions was approximately 23.25 lakh crore rupees.
  3. Year-on-Year Growth: There was a 39 percent Year-on-Year growth in the transaction count.
  4. Growth in Transaction Value: The transaction value saw a 28 percent Year-on-Year growth.
  5. Daily Transactions: The average daily transaction amount reached 74,990 crore rupees in December last year.

NPCI Lifts UPI User Limit for WhatsApp Pay

WhatsApp Pay UPI User Limit Removed: On 31 December 2024, The NPCI has lifted the unified payments interface (UPI) user onboarding cap for WhatsApp Pay, allowing it to extend services to its entire Indian user base of over 500 million.

Previous Restrictions: WhatsApp Pay was previously limited to onboarding 100 million users, with expansion permitted in phases.

Compliance: WhatsApp Pay must adhere to existing UPI guidelines applicable to third-party app providers (TPAPs).

UPI Transaction Cap Deferred: The rule capping any single app’s UPI transaction share at 30% has been deferred until December 31, 2026.

UPI Growth: UPI processes over 13 billion monthly transactions, with Google Pay and PhonePe controlling over 85% of the market. Between January and November 2024, UPI recorded 15,547 crore transactions worth ₹223 lakh crore.

UPI’s Impact: Since its 2016 launch, UPI has transformed financial access in India, benefiting 300 million individuals and 50 million merchants.

NPCI Vision: NPCI continues to drive innovations in retail payment systems, aiming for a secure, accessible, and cost-effective digital economy aligned with India’s vision of becoming a fully digital society.

India becomes 3rd largest exporter of smartphones globally

India has become the 3rd largest exporter of smartphones globally, climbing from the 23rd rank in 2019. In November 2024, the country’s smartphone exports surpassed ₹20,000 crore in a single month, representing a 92% increase compared to November 2023 (₹10,634 crore).

This milestone exceeds the expectations set under the Production-Linked Incentive (PLI) scheme, which aimed to export 70-75% of production value in FY 2024-25. Union Minister Ashwini Vaishnaw celebrated this achievement, calling it a “Making Bharat Story.”

Sanjay Malhotra appointed new Governor of the Reserve Bank of India (RBI)

Sanjay Malhotra, the current Revenue Secretary at the Ministry of Finance, has been appointed as the new Governor of the Reserve Bank of India (RBI). His tenure will begin on December 11, 2024, and last for three years.

A 1990-batch IAS officer from the Rajasthan cadre, Malhotra is an Engineering graduate from IIT Kanpur and holds a Master’s degree in Public Policy from Princeton University. He has held various key positions across sectors such as finance, taxation, power, information technology, and mines. As Revenue Secretary, he has been pivotal in formulating tax policies.

Malhotra succeeds Shaktikanta Das, who has completed a successful six-year term as the RBI Governor. Das, recognized for his leadership during critical times, will conclude his term on December 10, 2024.

RBI keeps repo rate unchanged; Cuts Cash Reserve Ratio by 50 basis points to 4%;

The Reserve Bank of India (RBI), in its December monetary policy meeting, decided by a 4:2 majority to keep the policy repo rate unchanged at 6.50% for the 11th consecutive time since February 2023. The SDF rate remains at 6.25%, and the MSF rate and Bank Rate at 6.75%. The RBI also reduced the Cash Reserve Ratio (CRR) by 50 basis points to 4%, releasing ₹1.16 lakh crore to ease liquidity stress.

RBI Governor Shaktikanta Das emphasized the commitment to price stability amid inflationary pressures and revised the FY25 inflation forecast to 4.8% from 4.5%. The MPC retained its neutral stance, focusing on aligning inflation with the target while supporting growth. The policy meeting was held on December 4-6, 2024.

RBI Raises UPI Lite Wallet Limit to ₹5,000 and Offline Transaction Limit to ₹1,000

On 4 December 2024, the Reserve Bank of India (RBI) increased the UPI Lite wallet limit from ₹2,000 to ₹5,000 and raised the offline transaction limit from ₹500 to ₹1,000 per transaction. These changes are effective immediately, aiming to enhance convenience and security for digital payments.

Under the new guidelines, UPI Lite allows transactions of up to ₹1,000 per payment, with a total wallet cap of ₹5,000. Previously, the offline framework permitted a maximum of ₹500 per transaction and a wallet limit of ₹2,000. This update aligns with the RBI’s efforts to promote digital transactions and provide a more inclusive payment experience.

The changes are implemented under Sections 18 and 10(2) of the Payment and Settlement Systems Act, 2007. The announcement builds on an earlier update by RBI Governor Shaktikanta Das in October 2024, highlighting the growing significance of UPI in India’s economy.

In October 2024, UPI achieved a record-breaking 16.58 billion financial transactions in a single month, reflecting its pivotal role in revolutionizing India’s payment ecosystem since its launch in 2016 by the National Payments Corporation of India (NPCI).

43rd Edition of the India International Trade Fair (IITF) at Pragati Maidan, New Delhi from 14 to 27 November

The 43rd Edition of the India International Trade Fair (IITF) is set to take place at Pragati Maidan in New Delhi from November 14 to November 27, 2024. This annual event is one of the most prominent trade fairs in India, attracting businesses, exhibitors, and visitors from across the country and around the world.

The theme of this year’s fair is Viksit Bharat in 2047. The focus state this year is Jharkhand while Bihar and Uttar Pradesh are the partner states.

The fair is divided into two parts:

  • Business Days: November 14-18, exclusively for business visitors.
  • Public Days: November 19-27, when the fair opens to the general public.

The fair will be open daily from 9:30 AM to 7:30 PM.
Entry points are through Gates 3 and 4 (Bhairon Marg) and Gates 6 and 10 (Mathura Road).

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