Economy Current Affairs

Indian Economy Current Affairs, important for Competitive Exams.

RBI has maintained the policy repo rate at 6.5% for the fifth consecutive time

RBI Governor Shaktikanta Das, in the bi-monthly monetary policy announcement on 8 December 2023 informed following decision of committee.

  • The Reserve Bank of India (RBI) has maintained the policy repo rate at 6.5% for the fifth consecutive time.
  • The decision to keep the policy rate unchanged was influenced by the observed decline in inflation.
  • In the recent Monetary Policy Committee meeting, the RBI revised the Gross Domestic Product (GDP) growth forecast for the financial year 2023-24 to 7%, up from the previous estimate of 6.5%.
  • Governor Shaktikanta Das announced a proposal to increase the limit of UPI transactions in hospitals and educational institutions from one lakh to 5 lakh rupees.

Q: What proposal did Governor Shaktikanta Das announce regarding UPI transactions during the Monetary Policy Committee meeting in December 2023?

a. Limit reduction to one lakh rupees
b. No change in the transaction limit
c. Increase to 2.5 lakh rupees for all users
d. Increase to 5 lakh rupees in hospitals and educational institutions

d. Increase to 5 lakh rupees in hospitals and educational institutions

42nd India International Trade Fair (IITF) from 14 to 27 November at Pragati Maidan in New Delhi

The 42nd India International Trade Fair (IITF) commenced on November 14 at Pragati Maidan in New Delhi and will run until November 27, 2023.

  • Minister of State for Commerce and Industry, Anupriya Patel, inaugurated the fair, noting the significant participation of over 3500 exhibitors, showcasing global confidence in India.
  • The fair’s theme, “Vasudhaiva Kutumbakam,” underscores the importance of interconnectedness and cooperation in trade for sustainable growth and well-being.
  • The first five days are reserved for the business category, with the fair open to the general public from November 19th.
  • Partner States are Bihar and Kerala, and Focus States include Delhi, Jammu and Kashmir, Jharkhand, Maharashtra, and Uttar Pradesh.
  • Representatives from 13 countries are participating in the fair, showcasing its international character.
  • Fair timings are from 10 A.M. to 7.30 PM, and tickets can be purchased online or at select metro stations. Entry is free for Divyang (disabled individuals) and senior citizens.

Q.: What is the theme of the 42nd India International Trade Fair?

  • a) Sustainable Growth and Well-being
  • b) Global Confidence in India
  • c) Vasudhaiva Kutumbakam
  • d) Trade and Investment for Economic Development

Ans : c) Vasudhaiva Kutumbakam

Tata To Make iPhones In India For Global Market

The Tata Group is set to become India’s first homegrown iPhone manufacturer. This development follows the acquisition of an assembly plant near Bengaluru from Apple supplier Wistron Corp for approximately $125 million.

  1. Tata Group’s plan is to produce Apple iPhones for both the domestic and global markets.
  2. Production is expected to commence within two and a half years.
  3. The move signifies India’s increasing production capabilities.
  4. Apple’s previous strategy primarily relied on selling devices made in China to customers worldwide.

Question: TATA Group acquired an assembly plant for Apple phones near Bengaluru from which group?

Options:
a) Apple Inc.
b) Samsung Electronics
c) Wistron Corp
d) LG Electronics

Ans : c) Wistron Corp

American Professor Claudia Goldin awarded Nobel Prize in Economics 2023 for research on women’s contributions to the labor market

American Professor Claudia Goldin has been awarded the 2023 Nobel Economics Prize for her research on women’s contributions to the labor market. The Royal Swedish Academy of Sciences made the announcement, officially known as The Sveriges Riksbank Prize in Economic Sciences.

  1. Claudia Goldin’s research provides a comprehensive account of women’s earnings and labor market participation over centuries, highlighting the causes of change and the remaining gender gap.
  2. Her research indicates that female participation in the labor market follows a U-shaped curve, with a decline during the transition from agrarian to industrial society, followed by an increase in the service sector.
  3. Claudia Goldin is a professor at Harvard University and is the 55th recipient of the Nobel Economics Prize, only the third woman to receive it since its inception in 1969.
  4. The Nobel Prize announcements for various fields, including economics, began on October 2nd and concluded with the economics prize.
  5. Nobel Prizes are awarded in ceremonies held in December in Oslo and Stockholm, with a cash award of 11 million Swedish kronor (approximately $1 million), along with an 18-carat gold medal and diploma.

MCQs

Q.: Who was awarded the 2023 Nobel Economics Prize for her research on women’s contribution to the labor market?

A) Claudia Goldin
B) Marie Curie
C) John Smith
D) Albert Einstein

Ans : A) Claudia Goldin

Q.: What is the official name of the Nobel Prize in Economics?

A) The Nobel Prize in Economic Sciences
B) The Sveriges Riksbank Prize in Economic Sciences
C) The Nobel Prize in Earth Studies
D) The Prize in Gender Economics

Ans : B) The Sveriges Riksbank Prize in Economic Sciences

RBI Monetary Policy Committee keeps repo rate unchanged at 6.5 percent

The RBI Governor, Shaktikanta Das, announced on October 6, 2023, that the monetary policy committee (MPC) has unanimously decided to maintain the policy repo rate at 6.50 percent.

  • The MPC meeting took place from October 4 to October 6, 2023, and this decision marks the fourth consecutive time the repo rate has remained unchanged.
  • The standing deposit facility (SDF) rate remains at 6.25 percent, while the marginal standing facility (MSF) rate and the Bank Rate remain at 6.75 percent.
  • The MPC, with a majority vote of 5 out of 6 members, focuses on withdrawing accommodation to align inflation with the target while supporting economic growth.
  • Headline inflation experienced a surge in July, primarily due to tomato and vegetable prices, but corrected somewhat in August and is expected to ease further in September.
  • Core inflation (CPI excluding food and fuel) is declining.
  • The overall inflation outlook is uncertain due to factors such as reduced kharif sowing for key crops, low reservoir levels, and volatile global food and energy prices.
  • The projected real GDP growth for 2023-24 is 6.5 percent, with specific growth rates for each quarter mentioned.
  • The MPC remains vigilant and ready to take necessary policy measures to align inflation with the target and anchor inflation expectations.

MCQs

Q.: What was the decision of the Monetary Policy Committee (MPC) regarding the policy repo rate on October 6, 2023?

a) Increased it by 0.25 percent
b) Decreased it by 0.25 percent
c) Maintained it at 6.50 percent
d) Maintained it at 7.00 percent

Ans : c) Maintained it at 6.50 percent

Q.: What is the projected real GDP growth by RBI Monetary Policy Committee for Q1:2024-25 ?

a) 5.7 percent b) 6.0 percent c) 6.5 percent d) 6.6 percent

Ans : c) 6.5 percent

RBI extends last date to exchange 2,000 rupee notes till 7th October 2023

The Reserve Bank of India (RBI) has extended the last date for the exchange of 2,000 rupee denomination banknotes to October 7, 2023. This decision was made after a review of the withdrawal process, as the initial period specified for withdrawal had ended.

  1. As of May 19, 2023, data from banks indicated that there were Rs 3.56 lakh crore worth of Rs 2000 banknotes in circulation.
  2. Out of this total, Rs 3.42 lakh crore has been received back by banks, leaving only Rs 0.14 lakh crore in circulation as of September 29, 2023.
  3. This means that 96 percent of the Rs 2000 banknotes in circulation as of May 19, 2023, have been returned to the banks.
  4. The RBI had previously announced the withdrawal of the Rs 2,000 banknote from circulation on May 19 but clarified that these notes would continue to be legal tender until the extended date.

Q.: When did the RBI initially announce the withdrawal of the Rs 2,000 banknote from circulation?

a) September 29, 2023
b) October 7, 2023
c) December 9, 2022
d) May 19, 2023

Ans : d) May 19, 2023

M. Rajeshwar Rao has been reappointed as Deputy Governor of RBI

M. Rajeshwar Rao has been reappointed as Deputy Governor of the Reserve Bank of India (RBI). The reappointment is for a period of one year, starting from the 9th of the next month or until further orders, whichever comes earlier.

  1. This announcement was made by the RBI in a press release from Mumbai.
  2. Mr. Rao is responsible for overseeing various departments, including Regulation, Communication, Enforcement, Legal, and Risk Monitoring.
  3. He holds an economics degree and a Master of Business Administration from the University of Cochin.
  4. Mr. Rao began his career at the RBI in 1984 and has held various positions, including serving as the Banking Ombudsman in New Delhi and working in the RBI’s regional offices in Ahmedabad, Hyderabad, Chennai, and the national capital.

Q.: Which departments does M. Rajeshwar Rao handle in his role as Deputy Governor of RBI?

a) Finance and Accounts
b) Human Resources and Administration
c) Regulation, Communication, Enforcement, Legal, and Risk Monitoring
d) Research and Policy Analysis

Ans : c) Regulation, Communication, Enforcement, Legal, and Risk Monitoring

Sovereign Gold Bond Scheme 2023-24 Series II opens until 15 September

Sovereign Gold Bonds (SGB) are open for subscription until September 15th, marking the second series of the scheme for the fiscal year 2023-24.

  1. The Reserve Bank of India (RBI) has set the price of the gold bonds at 5,923 rupees per gram.
  2. Online applicants will receive a discount of 50 rupees per gram less than the nominal value when paying digitally, making the issue price for online investors 5,873 rupees per gram.
  3. The minimum investment allowed in a gold bond is one gram, while the maximum subscription limit is set at 4 kg for individuals and 20 kg for trusts and similar entities per fiscal year.
  4. SGB offers a safer alternative to physical gold and an additional income source, making it an attractive investment option.
  5. The Sovereign Gold Bond Scheme was initiated by the government in November 2015, under the Gold Monetisation Scheme.

Q.: Which government scheme introduced the Sovereign Gold Bond Scheme in November 2015?

a) Gold Reserve Scheme
b) Gold Monetisation Scheme
c) Gold Investment Initiative
d) Gold Security Program

Ans : b) Gold Monetisation Scheme

RBI Gradually Reduces Incremental Cash Reserve Ratio (ICRR) to Manage Liquidity

The Reserve Bank of India (RBI) will gradually reduce its requirement for banks to park an additional 10% of their fresh deposits with the central bank. The reduction of this requirement, known as the incremental cash reserve ratio (ICRR), will occur in stages.

  • Starting on 9 September 2023, 25% of the ICRR will be released.
  • Another 25% will be released on 23 September.
  • The remaining 50% of the ICRR will be released on 7 October.
  1. The ICRR was initially introduced to address a surge in liquidity resulting from the return of 90% of ₹2,000 notes into the banking system.
  2. The RBI aims to release the ICRR gradually to prevent sudden shocks to system liquidity and to maintain orderly money market functioning.
  3. RBI Governor Shaktikanta Das had mentioned that withdrawing the ICRR could remove approximately ₹1 trillion in liquidity from the banking system.
  4. The current surplus liquidity in the system is ₹76,000 crore, which is lower than the earlier surplus of ₹3.5 trillion.
  5. The RBI’s objective is to control liquidity to prevent excess liquidity from contributing to inflation, aiming to keep system liquidity at around ₹1 trillion.
  6. The reduction in ICRR is designed not to significantly impact system liquidity, with other factors like currency in circulation and forex intervention compensating for the incremental money from the ICRR reduction.

Q.: What is the primary reason for the Reserve Bank of India (RBI) gradually reducing the incremental cash reserve ratio (ICRR) requirement for banks?

A) To encourage banks to deposit more funds with RBI.
B) To address a shortage of liquidity in the banking system.
C) To prevent excess liquidity from contributing to inflation.
D) To generate more revenue for the central bank.

Answer: C) To prevent excess liquidity from contributing to inflation.

New UPI Payment Options Launched by NPCI for Inclusive Digital Payments

On September 7, 2023, the National Payments Corporation of India (NPCI) introduced several new payment options on the Unified Payment Interface (UPI). RBI Governor Shaktikanta Das announced these options at the ongoing Global Fintech Festival in Mumbai. The new options are :

  1. Hello! UPI for voice-enabled payments.
  2. Credit Line on UPI for instant loans.
  3. UPI LITE X for low-cost smartphones.
  4. Tap & Pay for contactless payments.

These additions aim to create an inclusive, resilient, and sustainable digital payments ecosystem and contribute to UPI’s goal of achieving 100 billion transactions per month.

Question: Which organization introduced new payment options on the Unified Payment Interface (UPI)?

A) Reserve Bank of India (RBI)
B) National Payments Corporation of India (NPCI)
C) Indian Ministry of Finance
D) State Bank of India (SBI)

Answer: B) National Payments Corporation of India (NPCI)

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