Economy Current Affairs

Indian Economy Current Affairs, important for Competitive Exams.

RBI keep Repo Rate unchanged at 6.5%, Ups FY25 GDP forecast to 7.2%

The Reserve Bank of India (RBI) decided to keep the policy repo rate unchanged at 6.50% for the eighth consecutive time. The Monetary Policy Committee (MPC) met on 5th, 6th, and 7th June 2024.

The standing deposit facility (SDF) rate remains at 6.25%, and the marginal standing facility (MSF) rate and the Bank Rate at 6.75%.

RBI Governor Shaktikanta Das stated the inflation-growth balance is favorable and monetary policy must stay disinflationary, aiming for a 4% inflation target.

The RBI raised the growth projection to 7.2% from an earlier estimate of 7% for the current financial year.

Q: What is the current policy repo rate (unchanged at 6.50% for the eighth consecutive time) as decided by the Reserve Bank of India on 7 June 2024?

a) 6.25%
b) 6.50%
c) 6.75%
d) 7.00%

Answer: b) 6.50%

RBI approve the transfer of Rs 2.11 Lakh Crore as surplus to the Government

The Reserve Bank of India (RBI) approved transferring Rs 2,10,874 crore as surplus to the Central Government for the accounting year 2023-24. This decision was made during the 608th meeting of the Central Board of Directors of the RBI on 22 May 2024 in Mumbai.

  • The Board, chaired by RBI Governor Shaktikanta Das, decided to increase the Contingent Risk Buffer (CRB) to 6.50% for FY 2023-24.
  • The CRB was previously maintained at 5.50% during 2018-19 to 2021-22 and increased to 6% in 2022-23.
  • The meeting was attended by RBI Deputy Governors Dr. Michael Debabrata Patra, Mr. M. Rajeshwar Rao, Mr. T. Rabi Sankar, Mr. Swaminathan J., and other Central Board Directors.

Q. What amount did the Reserve Bank of India (RBI) approve to transfer as surplus to the Central Government for the accounting year 2023-24?

A. Rs 1.5 Lakh crore
B. Rs 1.85 Lakh crore
C. Rs 2.11 Lakh crore
D. Rs 2.82 Lakh crore

Ans : C. Rs 2.11 Lakh crore

97.76% of Rs 2000 Currency Notes Returned to Banking System : RBI

The Reserve Bank of India (RBI) has provided an update on the withdrawal of Rs 2000 denomination banknotes from circulation.

  1. As of April 30, 2024, the total value of Rs 2000 banknotes in circulation has significantly decreased from Rs 3.56 lakh crore on May 19, 2023, to Rs 7961 crore.
  2. This decrease indicates that 97.76% of the Rs 2000 banknotes in circulation as of May 19, 2023, have been returned.
  3. The withdrawal process was initially announced through a press release dated May 19, 2023, with periodic updates from the RBI.
  4. Initially, the facility for deposit and/or exchange of Rs 2000 banknotes was available at all bank branches until October 7, 2023.
  5. Subsequently, the exchange facility has been available at the 19 Issue Offices of the Reserve Bank (RBI Issue Offices) since May 19, 2023.
  6. Starting from October 9, 2023, these offices also started accepting Rs 2000 banknotes from individuals/entities for deposit into their bank accounts.
  7. Additionally, members of the public have been able to send Rs 2000 banknotes through India Post from any post office within the country to any RBI Issue Office for credit to their bank accounts.
  8. Despite the withdrawal process, Rs 2000 banknotes continue to be legal tender.

Question: Despite the withdrawal process, what is the status of Rs 2000 banknotes?

a) They are no longer legal tender
b) They can only be used for specific transactions
c) They are still legal tender
d) They can only be exchanged at specific locations

Ans : c) They are still legal tender

Kotak Mahindra Bank to stop issuing new credit cards and online customer immediately : RBI

The Reserve Bank of India (RBI) has instructed Kotak Mahindra Bank to stop issuing new credit cards immediately. The RBI has also limited the bank’s ability to acquire new customers through online and mobile banking channels.

  1. These actions stem from significant concerns identified during the RBI’s IT examinations of the bank for 2022 and 2023.
  2. Over two consecutive years, the bank has been found deficient in IT risk management and information security governance, violating regulatory guidelines.
  3. Despite corrective action plans issued by the RBI in 2022 and 2023, the bank has been substantially non-compliant.
  4. Existing customers, including credit card holders, will continue to receive services from the bank despite these restrictions.

Question : Which bank has the Reserve Bank of India (RBI) instructed to stop issuing new credit cards and acquiring online customers immediately?

a) HDFC Bank
b) ICICI Bank
c) Kotak Mahindra Bank
d) State Bank of India

Correct answer: c) Kotak Mahindra Bank

IMF forecast India’s GDP growth projection to 6.8% for FY 2024-25

The International Monetary Fund (IMF), on 16 April 2024 raised India’s Gross Domestic Product (GDP) growth projection to 6.8 percent for the financial year (FY) 2024-25, up from its previous forecast of 6.5 percent.

  • India’s growth is attributed to strong domestic demand and a rising working-age population.
  • The global growth rate is estimated at 3.2 percent in 2023, projected to continue at the same pace in FY 2024-25 and FY 2025-26.
  • India remains the fastest growing economy globally, surpassing China’s growth projection of 4.6 percent during the same period.

Q: What is India’s revised GDP growth projection for the financial year 2024-25, according to the IMF forecast April 20204?

a) 6.5 percent
b) 6.8 percent
c) 7.0 percent
d) 6.2 percent

Ans : b) 6.8 percent

World’s largest power plant : Adani Green Energy Limited renewable energy plant in Khavda, Gujarat

Adani Green Energy Limited is developing a 30 GW renewable energy plant in Khavda, Gujarat, spanning an area of 538 sq km, making it the world’s largest power plant.

  1. The project area in Khavda is five times the size of Paris and almost as large as Mumbai.
  2. The first energy flow from the project to the national grid occurred on February 14, 2024, with an initial capacity of 551 MW solar.
  3. Adani Green Energy Limited plans to invest approximately Rs 1.5 lakh crore in the project.
  4. The Khavda project will generate both solar and wind energy, with 2,000 MW of solar energy already operationalized in March 2024.
  5. The company aims to reach 6 GW of power production by March 2025 and plans to expand by a minimum of 5 GW every year thereafter.
  6. Adani Green Energy Limited aims to produce 45,000 MW of renewable energy by 2030.
  7. The project site in Khavda is equipped with waterless cleaning robots to address dust accumulation on panels and conserve water in the arid Kutch region.
  8. India is expected to avoid about 58 million tonnes of CO2 emissions annually with this project.
  9. Adani Green’s renewable energy portfolio spans 12 states, with major production in Rajasthan and Gujarat.

Q: Where is the world’s largest power plant being developed by Adani Green Energy Limited?

a) Khavda, Gujarat
b) Jaipur, Rajasthan
c) Mumbai, Maharashtra
d) Chennai, Tamil Nadu

Correct answer: a) Khavda, Gujarat

Income Tax Returns (ITRs) for Assessment Year 2024-25 from April 1, 2024

CBDT allows taxpayers to file Income Tax Returns (ITRs) for Assessment Year 2024-25 from April 1, 2024, onwards.

  1. Commonly used ITR forms such as ITR-1, ITR-2, and ITR-4 are available on the e-filing portal from April 1.
  2. Companies can file their ITRs using ITR-6.
  3. Around 23 thousand ITRs for Assessment Year 2024-25 have already been filed.
  4. The facility to file ITRs 3, 5, and 7 will be made available soon.
  5. This initiative marks the first time in recent years that taxpayers can file their returns on the first day of the new financial year.

Q: When can taxpayers file their Income Tax Returns (ITRs) for Assessment Year 2024-25 according to the Central Board of Direct Taxes (CBDT)?

a) From January 1, 2024
b) From April 1, 2024
c) From July 1, 2024
d) From October 1, 2024

Ans : b) From April 1, 2024

Deposit cash through Cash Deposit Machines using Unified Payments Interface (UPI)

The Reserve Bank of India (RBI) will soon enable cash deposits through Cash Deposit Machines using Unified Payments Interface (UPI).

UPI, previously mainly used for money withdrawal or transfer, will now facilitate cash deposits, enhancing customer convenience and efficiency in currency handling at banks.

RBI is proposing to permit the use of third-party UPI apps for making UPI payments from Prepaid Payment Instruments (PPI) wallets, further boosting digital payment adoption for small-value transactions.

Q: What new functionality will the Reserve Bank of India (RBI) enable through Cash Deposit Machines (CDMs) using Unified Payments Interface (UPI)?

a) Money withdrawal
b) Money transfer
c) Cash deposits
d) Currency exchange

Ans : c) Cash deposits

RBI Keeps Repo Rates Unchanged at 6.5 Percent for Seventh Consecutive Time

The Reserve Bank of India’s Monetary Policy Committee (MPC) maintained the key repo rate at 6.5 per cent for the seventh consecutive meeting on April 5, 2024.

  1. The focus was on controlling retail inflation, which has remained above the 4 per cent target.
  2. The repo rate is the rate at which banks borrow funds from the RBI to address short-term liquidity gaps.
  3. The majority decision was 5:1 to keep the interest rate unchanged, with the Standing Deposit Facility rate at 6.25 per cent and the Marginal Standing Facility (MSF) rate and Bank Rate at 6.75 per cent.
  4. The MPC retained the stance of ‘withdrawal of accommodation’ with a majority of five votes.
  5. The MPC consists of six members, including three from RBI, including Governor Shaktikanta Das, and three appointed by the central government.
  6. The three-day review meeting of the MPC, which began on April 2, concluded on April 5, 2024.

Q: What decision did the Reserve Bank of India’s Monetary Policy Committee (MPC) make regarding the repo rate on April 5, 2024?

a) Increased it
b) Decreased it
c) Maintained it
d) Abolished it

Ans : c) Maintained it

Q: What is the repo rate?

a) The rate at which banks lend funds to the RBI
b) The rate at which RBI borrows funds from banks
c) The rate at which banks borrow funds from the RBI
d) The rate at which RBI lends funds to the government

Ans : c) The rate at which banks borrow funds from the RBI

Unified Payments Interface (UPI) Transactions Surge in India

In the second half of 2023, India witnessed a remarkable surge in Unified Payments Interface (UPI) transactions.

  1. Volume Growth: UPI payments volume in H2 2023 soared by 56% year-on-year (YoY), reaching 65.77 billion transactions—a substantial increase from the previous year’s 42.09 billion transactions.
  2. Transaction Value: The value of these UPI transactions surged by 44%, climbing from Rs 69.36 lakh crore to an impressive Rs 99.68 lakh crore.
  3. Person-to-Merchant Transactions: The growth of UPI payments was largely driven by person-to-merchant transactions. During this period, these transactions witnessed a 77% increase in volume and a 62% increase in value.
  4. Point of Sale Terminals: The number of point of sale (POS) terminals, used by merchants to receive payments, expanded by 26%, reaching 8.56 million. Private banks played a significant role, accounting for 73% of the market share in this segment.
  5. Dominant PlayersPhonePeGoogle Pay, and Paytm continued to dominate the UPI market both in terms of value and volume. In December 2023, these three platforms accounted for 95.4% of all transactions, emphasizing their stronghold in the digital payments landscape.
  6. Average Ticket Size: Interestingly, the average ticket size within UPI payments decreased by 8% YoY. This indicates a higher penetration of UPI for small and micro everyday payments, typically made to merchants. Categories such as groceries, eateries, telecom services, pharmacies, and utilities topped the list, reflecting their high volume but relatively low value.
  7. Debit and Credit Cards: While UPI surged, the issuance of debit and credit cards experienced modest growth. Credit card issuance jumped from 13% in June 2023 to 21% in December 2023, while debit cards grew by only 2%

Q: What does UPI stand for?

A) Unified Payment Interface
B) Unified Payments Integration
C) United Payment Interface
D) Ultrafast Payment Integration

Answer: A) Unified Payment Interface

Q: Which type of transactions drove the growth of UPI payments in Second half of 2023?

A) Person-to-person transactions
B) Person-to-merchant transactions
C) International transactions
D) Bank-to-bank transactions

Answer: B) Person-to-merchant transactions

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