Economy

 

Indian Economy Current Affairs, important for Competitive Exams.

Government allows 100% FDI in space sector

The Centre has approved an amendment in the Foreign Direct Investment, FDI policy, allowing 100% foreign investment in the space sector.  

The liberalized entry routes under the amended policy are aimed to attract potential investors to invest in Indian companies in space.

FDI up to 100% under the Automatic route will be allowed for the manufacturing of components and systems or sub-systems for satellites, ground segments, and user segments.

Q: What recent change has been approved by the Centre regarding Foreign Direct Investment (FDI) in space sector?

a) Increased restrictions on FDI in space sector
b) 100% foreign investment allowed in the space sector
c) Limiting FDI to 50% in space sector
d) Complete ban on foreign investment space sector

Answer: b) 100% foreign investment allowed in the space sector

RBI extended the deadline for Paytm Payments Bank services to March 15, 2024

RBI extended the deadline for Paytm Payments Bank services to March 15, 2024, from the initial date of February 29.

  1. The decision was made considering larger public interest, including the interests of merchants, as stated in a press release by the apex bank.
  2. Customers are allowed to make deposits, credit transactions, prepaid services, wallets, FASTags, and National Common Mobility Cards until March 15, 2024.
  3. After March 15, 2024, no further deposits, credit transactions, or top-ups will be allowed in any customer accounts, according to the RBI.
  4. Earlier, the RBI had prohibited the Paytm subsidiary from accepting additional deposits or accounts starting from February 29.
  5. The RBI imposed business restrictions on Paytm Payments Bank Ltd, operated by One97 Communications, exercising its powers under Section 35A of the Banking Regulation Act, 1949.

Q: Who is the company operating Paytm Payments Bank?

  • a) Paytm
  • b) One97 Communications
  • c) Reserve Bank of India
  • d) National Payments Corporation of India (NPCI)

Ans : b) One97 Communications

RBI retains repo rate at 6.5 percent for sixth consecutive time

  • The Reserve Bank of India (RBI) has maintained the repo rate at 6.5 percent for the sixth consecutive time.
  • The decision was made by a 5:1 majority vote of the six-member monetary policy committee (MPC) due to retail inflation persisting above the 4 percent target.
  • The repo rate is the interest rate at which banks borrow funds from the RBI to address short-term liquidity gaps.
  • Other key interest rates include the Standing Deposit Facility rate at 6.25 percent, Marginal Standing Facility (MSF) rate at 6.75 percent, and the Bank Rate at 6.75 percent.
  • RBI Governor Shaktikanta Das projected retail inflation based on the Consumer Price Index (CPI) at 5.4 percent for the current fiscal year and 4.5 percent for the next financial year.

Q: What is the primary purpose of the repo rate?

A) To regulate the money supply in the market and combat price inflation.
B) To determine the operating bank rates.
C) To enhance the availability of funds for banks.
D) To stimulate consumer demand.

Answer: A) To regulate the money supply in the market and combat price inflation

Interim budget for FY 2024-25 : Main Points

Finance Minister Smt Nirmala Sitharaman presented the interim budget for FY 2024-25 on February 1, 2024 in Parliament. Since it’s an interim budget, it focuses on essential expenditures until the regular budget is presented after general elections. Here are some key points:

Fiscal Consolidation:

  • Fiscal deficit target: 5.1% of GDP, aimed at reaching 4.5% by FY 25-26.
  • Revenue receipts: Estimated at ₹30.03 lakh crore, reflecting economic growth.
  • Total expenditure: Projected to be ₹47.66 lakh crore, a 6.1% increase.

Capital Expenditure:

  • Increased by 11.1% to ₹11.11 lakh crore, prioritizing infrastructure development.
  • Represents 3.4% of GDP and 23.31% of total expenditure.
  • Continuation of the 50-year interest-free loan scheme for states with a total outlay of ₹1.3 lakh crore.

Social Welfare:

  • Expansion of Ayushman Bharat health insurance scheme to cover ASHA workers.
  • Launch of housing schemes for middle class, slum dwellers, and rural population.
  • Increase in coverage of “Lakhpati Didi” skill development program to 3 crore women.
  • Cervical cancer vaccination for girls aged 9-14 years.

Other Key Initiatives:

  • 1 crore households to receive free solar power.
  • Focus on promoting electric vehicles and e-buses.
  • No changes in income tax slabs or rates.

Q: What is the fiscal deficit target set in the interim budget for FY 2024-25?

a. 3.5% of GDP
b. 4.5% of GDP
c. 5.1% of GDP
d. 6.0% of GDP

Ans : c. 5.1% of GDP

Q: What is the status of income tax slabs or rates in the interim budget 2024-2025?

a. Increased rates
b. Decreased rates
c. No changes
d. Abolished

Ans : c. No changes

RBI imposes restrictions on Paytm Payments Bank

  • RBI imposes restrictions on Paytm Payments Bank from March 2024.
  • Action taken due to concerns about regulatory norm breaches and persistent non-compliance.
  • Paytm Payments Bank prohibited from accepting deposits, credit transactions, or top-ups after February 29, 2024.
  • Interest, cashback, and refunds allowed, but unrestricted withdrawal and utilization of balances permitted.
  • No provision of banking services, BBPOU, and UPI facilities after February 29, 2024, except for fund transfers, utilization, or withdrawal.
  • Nodal accounts of parent companies to be terminated by February 29, 2024.
  • Settlement of pipeline transactions and nodal accounts related to transactions initiated before February 29, 2024, must be completed by March 15, 2024.

Q: Which payment bank faced restrictions from RBI for “Breach of regulatory norms and non-compliance”?

a. Airtel Payments Bank
b. Fino Payments Bank
c. Paytm Payments Bank
d. Jio Payments Bank

Answer: c. Paytm Payments Bank

Halwa ceremony for the Interim Union Budget 2024, took place at North Block

The Halwa ceremony, marking the final stage of the Budget preparation process for the Interim Union Budget 2024, took place at North Block on 24th January 2024.

  1. The Finance Ministry performs the customary Halwa ceremony every year before the lock-in process of Budget preparation begins.
  2. Union Finance Minister Nirmala Sitharaman, Minister of State for Finance Dr. Bhagwat Kisanrao Karad, and other senior officials were present during the ceremony.
  3. As part of the ceremony, Ms. Sitharaman took a round of the Budget Press, reviewed preparations, and extended her best wishes to the officials involved.
  4. Similar to the previous three full Union Budgets, the Interim Union Budget 2024 will be delivered in a paperless form.
  5. The Budget documents will be accessible on the Union Budget Mobile App after the completion of the Budget Speech by the Union Finance Minister in Parliament on the 1st of February.

Q: Halwa ceremony is associated with which of the following events?

a. Independence Day celebrations
b. Budget preparation process
c. National Women’s Day
d. Republic Day Celebration

Ans : b. Budget preparation process

Around 25 crore people have lifted themselves out of poverty in the last nine years : NITI Aayog

  1. According to NITI Aayog, nearly 25 crore people in India have lifted themselves out of poverty in the last nine years.
  2. The discussion paper released by NITI Aayog on 16 January 2024, focuses on Multidimensional Poverty in India from 2005 to 2006, analyzing the decline in poverty rates across various dimensions.
  3. The poverty rate has decreased from over 29 percent to around 11 percent in the mentioned nine-year period.
  4. Uttar Pradesh has witnessed the most significant reduction in poverty among Indian states, with nearly 6 crore people escaping poverty in the last nine years.
  5. Other states showing notable declines in poverty include Bihar, Madhya Pradesh, and Rajasthan.
  6. NITI Aayog predicts that India will achieve single-digit poverty rates this year, marking a substantial accomplishment given that over 50 percent of the population was in poverty around 2005.
  7. The Sustainable Development Goal (SDG) target of halving multidimensional poverty by 2030 is expected to be achieved by India much sooner than the set deadline.
  8. NITI Aayog CEO, B.V.R. Subrahmanyam, emphasized that reducing absolute poverty by half in 8 to 9 years is a remarkable achievement that will showcase India’s progress towards its SDG goals to the world.

Q: What is the reported decline in poverty rate in India over the last nine years according to NITI Aayog?

a) 27 percent to around 9 percent
b) 25 percent to around 17 percent
c) 29 percent to around 11 percent
d) 20 percent to around 15 percent

Answer: 29 percent to around 11 percent

Q: Who currently serves as the Chief Executive Officer (CEO) of NITI Aayog in India?

a) Narendra Modi
b) Amitabh Kant
c) Arvind Panagariya
d) B.V.R. Subrahmanyam

Answer: d) B.V.R. Subrahmanyam

ONGC starts oil production from its Cluster-2 project in Krishna Godavari basin in Bay of Bengal

  1. The Oil and Natural Gas Corporation (ONGC) has initiated oil production from its Cluster-2 project in the Krishna Godavari basin in the Bay of Bengal.
  2. The project is situated in the KG-DWN-98/2 block, characterized as a complex and challenging block.
  3. Initial production is expected to be 45 thousand barrels per day and over 10 million standard cubic metres per day of gas.
  4. The project, located offshore the Godavari river delta, is positioned 35 kilometres off the coast of Andhra Pradesh.
  5. Water depths in the project area range from 300 to 3,200 metres.
  6. The discoveries in the KG-DWN-98/2 block are divided into three clusters, with Cluster-2 being the first to be put into production.
  7. The anticipated impact of the project includes adding 7 percent to the current national oil production and 7 percent to national natural gas production.

Q: Where is the KG-DWN-98/2 block located, where the ONGC starts oil production from Cluster-2 project in January 2024 ?

a) Arabian Sea
b) Bay of Bengal
c) Indian Ocean
d) Andaman Sea

Answer: b) Bay of Bengal

Govt constitutes 16th Finance Commission with Dr Arvind Panagariya as its Chairman

The Sixteenth Finance Commission has been constituted by the Centre.

  1. Dr. Arvind Panagariya, former NITI Aayog Vice Chairman and current Columbia University Professor, will serve as the Chairman of the 16th Finance Commission.
  2. Ritvik Ranjanam Pandey, an IAS officer, will be the secretary of the Commission.
  3. The Commission’s recommendations will include matters related to the distribution of net proceeds of taxes between the Union and the States, and measures to augment the Consolidated Fund of a State to support Panchayats and Municipalities.
  4. The Commission may review current financing arrangements for Disaster Management initiatives, particularly funds under the Disaster Management Act, 2005, and make appropriate recommendations.
  5. The Finance Commission has been tasked with making its report available by October 31, 2025, covering a five-year period starting from April 1, 2026.

Q: Who has been appointed as the Chairman of the Sixteenth Finance Commission?

a) Dr. Arvind Panagariya
b) Ritvik Ranjanam Pandey
c) Nirmala Sitharaman
d) Dr Subramanyam Swami

Answer: a) Dr. Arvind Panagariya

Q: What is the role of Ritvik Ranjanam Pandey in the Sixteenth Finance Commission?

a) Chairman
b) Secretary
c) Financial Advisor
d) Member

Correct Answer: b) Secretary

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