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    Indian Economy Current Affairs, important for Competitive Exams.

    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).

    Maldivian President decides to introduce India’s UPI in Maldives

    President Dr. Mohamed Muizzu has decided to introduce India’s Unified Payment Interface (UPI) in the Maldives, based on a cabinet recommendation. This initiative is expected to boost the Maldivian economy by promoting financial inclusion, improving transaction efficiency, and strengthening digital infrastructure. Indian tourists will be able to use UPI apps to make payments in Indian rupees without converting currency.

    A consortium, including banks, telecoms, state-owned companies, and fintech firms, will be set up to implement UPI in the Maldives. The move follows a Memorandum of Understanding (MoU) signed in August 2024 between India and the Maldives, as part of India’s efforts to share developmental tools with partner nations. UPI is already in use in several countries, including the UAE, Sri Lanka, and Singapore.

    Noel Tata appointed chairman of Tata Trusts

    Noel Tata has been appointed as the chairman of Tata Trusts, following the passing of his half-brother, Ratan Tata, on October 9, 2024. Ratan Tata, who led the Tata Group for decades and shaped its future, left behind a significant legacy in Indian industry.

    Noel Tata, the son of Naval and Simone Tata, takes on this role at a critical time for the Tata Group and its trusts. With extensive experience in leadership roles within the Tata Group, he is expected to uphold the values and principles established by Ratan Tata.

    RBI Kept Repo rate remains unchanged at 6.50% for tenth time in a row

    On October 9, 2024, the Reserve Bank of India (RBI) kept the policy repo rate steady at 6.5% for the tenth consecutive time. Five out of six members of the Monetary Policy Committee (MPC) supported the decision. Other key rates, such as the Standing Deposit Facility (SDF) rate at 6.25% and both the Marginal Standing Facility (MSF) rate and the bank rate at 6.75%, also remained unchanged.

    RBI Governor Shaktikanta Das announced a shift in the central bank’s monetary policy stance from “withdrawal of accommodation” to “neutral.” This change allows the RBI to balance inflation control with economic growth support. Despite risks from rising global crude oil prices and geopolitical tensions, India’s inflation rate eased to 3.65% in August, within the RBI’s target range of 2-6%, though food inflation remained high at 5.65%.

    The neutral stance provides the RBI with flexibility to respond to inflationary pressures and growth objectives without rushing policy decisions.

    India’s foreign exchange reserves reached a record high, crossing the USD 700 billion mark for the first time

    India’s foreign exchange reserves reached a record high, crossing the USD 700 billion mark for the first time. As of September 27, 2024, the reserves surged by USD 12.588 billion to USD 704.885 billion, according to the Reserve Bank of India (RBI). This is a significant increase from the previous high of USD 692.296 billion, offering a robust economic buffer against global financial uncertainties.

    The largest part of the reserves, Foreign Currency Assets (FCA), stood at USD 616.154 billion, with the country’s gold reserves valued at USD 65.796 billion. These reserves now cover more than a year’s worth of projected imports, showcasing India’s economic resilience. In 2023, India added around USD 58 billion to its reserves, contrasting with the USD 71 billion decline in 2022.

    Foreign exchange reserves, held in currencies like the US Dollar, Euro, Yen, and Pound, are vital for managing currency volatility. The RBI has been managing the rupee’s stability by buying dollars when the rupee strengthens and selling when it weakens, making the rupee one of Asia’s most stable currencies. This stability enhances the attractiveness of Indian assets to international investors.

    Reconstitution of Monetary Policy Committee

    The Indian government has reconstituted the Monetary Policy Committee (MPC) on 1 October 2024, under the Reserve Bank of India (RBI) Act, 1934. This committee plays a crucial role in setting the country’s monetary policy, including interest rates. The MPC’s decisions directly impact inflation rates, economic growth, and overall financial stability in India.

    The reconstituted MPC consists of six members:

    1. Governor of the Reserve Bank of India – Chairperson, ex officio.
    2. Deputy Governor of the Reserve Bank of India, in charge of Monetary Policy – Member, ex officio.
    3. One officer of the Reserve Bank of India, nominated by the Central Board – Member, ex officio.
    4. Prof. Ram Singh, Director, Delhi School of Economics, University of Delhi – Member.
    5. Saugata Bhattacharya, Economist – Member.
    6. Dr. Nagesh Kumar, Director and Chief Executive, Institute for Studies in Industrial Development, New Delhi – Member.

    The members appointed by the Central Government will hold office for a period of four years or until further orders, whichever is earlier. 

    Rising Cash Circulation Despite Surge in Digital Transactions in India

    India leads in digital financial transactions, but cash in circulation has more than doubled in the last eight years. According to RBI, the currency in circulation increased significantly after the 2016 demonetization of Rs 1000 and Rs 500 notes. The cash in circulation stood at Rs 34.70 lakh crore as of September 6, 2024, up from Rs 16.5 lakh crore before demonetization.

    Demonetization aimed to eliminate black money and encourage digital payments. After demonetization, the value of banknotes in circulation fell by 20.2% by March 2017.

    UPI transactions increased tenfold, from 12.5 billion in 2019-20 to 131 billion in 2023-24, making up 80% of digital payment volumes. A PwC report predicts digital transactions will grow from 159 billion in 2023-24 to 481 billion by 2028-29. UPI payments grew by 45% annually, with transaction values exceeding Rs 20.65 trillion for three consecutive months. In July 2024, daily UPI transactions averaged Rs 66,590 crore.

    Experts suggest the rise in cash is due to economic growth and low-value transactions avoiding GST.

    India’s core sector output records 6.1 per cent growth in July 2024

    India’s core sector grew by 6.1% in July 2024. The Index of Eight Core Sector Industries measures key sectors like cement, coal, crude oil, electricity, fertilizers, natural gas, refinery products, and steel. These sectors have a 40% weight in the Index of Industrial Production.

    • Steel production growth reached a three-month high of 7.2%.
    • Cement output hit a four-month high of 5.5%, reflecting increased construction activity.
    • Petroleum production rose to an eight-month high of 6.6%.
    • Fertilizer output was at a seven-month high of 5.3%, supported by strong kharif sowing due to a better monsoon.
    • Coal output increased by 6.8%, and electricity generation rose by 7.0%.

    Q.: What percentage of the Index of Industrial Production is contributed by the Eight Core Sector Industries?

    (A) 30%
    (B) 50%
    (C) 35%
    (D) 40%

    Answer: (D) 40%
    The Index of Eight Core Sector Industries measures key sectors like cement, coal, crude oil, electricity, fertilizers, natural gas, refinery products, and steel. These sectors have a 40% weight in the Index of Industrial Production.

    Hurun India Rich List 2024: Gautam Adani replaces Mukesh Ambani as India’s Richest Person

    Hurun India Rich List 2024 was released on 27 August 2024, showcasing shifts in wealth rankings among India’s top business magnates.

    • Gautam Adani secured the top spot, surpassing Mukesh Ambani, with wealth increasing by 95% to approximately ₹11.6 lakh crore.
    • Mukesh Ambani held the second position with a total wealth of ₹10.1 lakh crore.
    • The Shiv Nadar family ranked third, followed by Cyrus S. Poonawalla and Dilip Shanghvi in the top five.

    Consistently in the Top 10 for the past five years: Gautam Adani, Mukesh Ambani, Shiv Nadar, Cyrus S. Poonawalla, Gopichand Hinduja, and Radhakishan Damani.

    The total number of Indian billionaires rose to 334, with combined wealth amounting to ₹159 lakh crore, exceeding the combined GDP of Saudi Arabia and Switzerland. 55 tech entrepreneurs appeared on the list, collectively holding ₹2,87,100 crore, with an average age of 40. India’s number of billionaires increased by 29% to a record 334, while China’s number of billionaires declined.

    • The youngest billionaire is 21-year-old Kaivalya Vohra, co-founder of Zepto.
    • The youngest self-made woman is Neha Bansal, co-founder of Lenskart.
    • The list includes 52 founders of 29 unicorns, highlighting India’s growth as a hub for wealth creation in Asia.

    The 2024 Hurun India Rich List includes 1,539 individuals, representing wealth creators from various sectors, including startups, family businesses, private equity, next-gen leaders, and film stars.

    Q.: Who is ranked as India’s Richest Person, as per the Hurun India Rich List 2024?

    A) Mukesh Ambani
    B) Shiv Nadar
    C) Cyrus S. Poonawalla
    D) Gautam Adani

    Answer: D) Gautam Adani
    Gautam Adani secured the top spot, surpassing Mukesh Ambani, with wealth increasing by 95% to approximately ₹11.6 lakh crore.

    RBI Governor Shaktikanta Das received an “A+” rating in the Global Finance Central Banker Report Cards for the second consecutive year

    Shaktikanta Das (RBI Governor) received an “A+” rating in the Global Finance Central Banker Report Cards for the second consecutive year. Das shares the top honor with Christian Kettel Thomsen of Denmark and Thomas Jordan of Switzerland. The RBI’s policies under Das’s leadership have been effective in managing inflation and economic growth in India.

    Global Finance magazine evaluates central bank governors from nearly 100 key economic regions worldwide. The grading system ranges from “A+” to “F”, assessing factors like inflation control, economic growth, currency stability, and interest rate management. The Central Banker Report Cards have been a tradition since 1994, recognizing leaders for originality, creativity, and tenacity. Global Finance magazine has a global readership across 193 countries, influencing major investment and strategic decisions.

    Q.: Who is the current Governor of the Reserve Bank of India (RBI) who received an “A+” rating in the Global Finance Central Banker Report Cards for the second consecutive year in Aug 2024?

    a) Urjit Patel
    b) Shaktikanta Das
    c) Raghuram Rajan
    d) D. Subbarao

    Answer: b) Shaktikanta Das

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