Economy

 

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.

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.

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