CSB IAS ACADEMY

UPSC - CSE
APPSC& TSPSC
INDIAN ECONOMY
QUICK REVIEW
VINAY KUMAR BAVANDLA
NO. OF QUESTIONS ASKED FROM “INDIAN ECONOMY”
SECTION OVER THE YEARS
2013 18 CSP-2021 Break-up
2014 10 Current+ Contemporary 04
2015 21 Theory 10
2016 29 Misc., --
2017 29 CSP-2022 Break-up
2018 25 Current+ Contemporary 08
2019 28 Theory 08
2020 23 Misc., 02
2021 14 CSP-2023 Break-up
2022 18 Current+ Contemporary 0
Theory 0
2023 15 Misc., 0
 Money, Banking
Financial
Intermediation

HRD Budget
Education, Health, Taxation
Poverty, hunger, Fiscal Policy
Presented By: VINAY KUMAR

Presented By: VINAY KUMAR

Women, SDG Resources
Production
Distribution
Consumption

INFRASTRUCTURE
EXTERNAL SECTOR
Energy, transport,
Communications BoP, Trade, WTO

Sectors of Economy
Agri, Mfg, Services
GDP, Inflation, IIP
 TOPIC-WISE
2023 2022 2021 2020 2019 2018 2017
BREAK-UP
Banking& Finance 02 08 06 09 07 07 06
Fiscal Policy 05 03 01 01 01 04 03
External Trade/
01 03 02 07 07 04 04
BoP
Sectors of
03 02 05 03 08 03 08
Economy
Infrastructure 02 -- -- 01 03 01 04
HR Development 02 02 -- -- 02 06 04
Note: This topic-wise break up is not intended to discern any particular
pattern/ trend. As an aspirant one should give equal importance to all topics.
Presented By: VINAY KUMAR
 TRINITARIAN APPROACH

Basic Current Previous

Concepts Affairs Questions

Presented By: VINAY KUMAR

What will we discuss in this
Crash Course?

1. • Concepts

2. • Trends

3. • Reports, Indices
 CS (P) -2023
Consider the following statements: Consider the following statements: Consider the following statements:
Statement-1: Interest income from Statement-1: In the post- Statement-1: India accounts for
the deposits in Infrastructure pandemic recent past, many 3·2% of global export of goods.
Investment Trusts (InviTs) distributed Central Banks worldwide had Statement-2: Many local
to their investors is exempted from carried out interest rate hikes. companies and some foreign
tax, but the dividend is taxable. Statement-2: Central Banks companies operating in India have
Statement-2: InviTs are recognized generally assume that· they have taken advantage of India's
as borrowers under the the ability to counteract the rising 'Production-linked Incentive'
“Securitization and Reconstruction consumer prices via monetary
of Financial Assets and·
scheme.
policy means.
Enforcement of Security Interest Act, Which one of the following is
Which one of the following is
2002”. correct in respect of the above
correct in respect of the above
Which one of the following is correct statements?
statements?
in respect of the above statements? (a) Both Statement-1 and
(a) Both Statement-1 and
(a) Both Statement-1 and Statement-2 are correct and
Statement-2 are correct and
Statement-2 are correct and Statement-2 is the correct Statement-2 is the correct
Statement-2 is the correct explanation for Statement-1 explanation for Statement-1
explanation for Statement-1 (b) Both Statement-1 and (b) Both Statement-1 and
(b) Both Statement-1 and Statement-2 are correct and Statement-2 are correct and
Statement-2 are correct and Statement-2 is not the correct Statement-2 is not the correct
Statement-2 is not the correct explanation for Statement-1 explanation for Statement-1
explanation for Statement-1 (c) Statement-1 is correct but
(c) Statement-1 is correct but
(c) Statement-1 is correct but Statement-2 is incorrect
Statement-2 is incorrect
Statement-2 is incorrect (d) Statement-1 is incorrect but
(d) Statement-1 is incorrect but
(d) Statement-1 is incorrect but Statement-2 is correct
Statement-2 is correct
Statement-2 is correct
Consider the following statements: Consider the following markets:
Statement-1: Carbon markets are likely to be one of 1. Government Bond Market
the most widespread tools in the fight against 2. Call Money Market
climate change. 3. Treasury Bill Market
Statement-2: Carbon markets transfer resources 4. Stock Market
from the private sector to the State. How many of the above are included in capital
Which one of the following is correct in respect of markets?
the above statements? (a) Only one (b) Only two (c) Only three (d) All four
Which one of the following is correct in respect of
the above statements? Consider the following statements:
(a) Both Statement-1 and Statement-2 are correct 1. The Government of India provides Minimum
and Statement-2 is the correct explanation for Support Price for niger seeds.
Statement-1 2. Niger is cultivated as a Kharif crop.
(b) Both Statement-1 and Statement-2 are correct 3. Some tribal people in India use niger seed oil
and Statement-2 is not the correct explanation for cooking.
for Statement-1 How many of the above statements are correct?
(c) Statement-1 is correct but Statement-2 is (a) Only one
incorrect (b) Only two
(d) Statement-1 is incorrect but Statement-2 is (c) All three
correct (d) None
Which one of the following activities of the Reserve Bank of India is considered to be part of
'sterilization'?
(a) Conducting 'Open Market Operations'
(b) Oversight of settlement and payment systems
(c) Debt and cash management for the Central and State Governments
(d) Regulating the functions of Nonbanking Financial Institutions
Which one of the following best describes the Consider the following:
concept of ‘Small Farmer Large Field’? 1. Demographic performance
(a) Resettlement of a large number of people, 2. Forest and ecology
uprooted from their countries due to war, by 3. Governance reforms
giving them a large cultivable land which they 4. Stable government
cultivate collectively and share the produce 5. Tax and fiscal efforts
For the horizontal tax devolution, the Fifteenth
(b) Many marginal farmers in an area organize
Finance Commission used how many of the above
themselves into groups and synchronize and
as criteria other than population area and income
harmonize selected agricultural operations
distance?
(c) Many marginal farmers in an area together (a) Only two (b) Only three (c) Only four (d) All five
make a contract with a corporate body and
surrender their land to the corporate body for Consider the following infrastructure sectors:
a fixed term for which the corporate body 1. Affordable housing
makes a payment of agreed amount to the 2. Mass rapid transport
farmers 3. Health care
(d) A company extends loans, technical 4. Renewable energy
knowledge and material inputs to a number On how many of the above does UNOPS
of small farmers in an area so that they Sustainable Investments in Infrastructure and
produce the agricultural commodity required Innovation (S3i) initiative focus for its
by the company for its manufacturing process investments?
and commercial production. (a) Only one (b) Only two (c) Only three (d) All four

Consider the investments in the following assets:

1. Brand recognition 2. Inventory 3. Intellectual property 4. Mailing list of clients
How many of the above are considered intangible investments?
(a) Only one (b) Only two (c) Only three (d) All four
Consider the following statements with reference to In the context of finance, the term 'beta'
India : refers to:
1. According to the ‘Micro, Small and Medium (a) the process of simultaneous buying and
Enterprises Development (MSMED) Act, 2006’, selling of an asset from different
the 'medium enterprises' are those with platforms.
investments in plant and machinery between ₹15 (b) an investment strategy of a portfolio
crore and ₹25 crore. manager to balance risk versus reward
2. All bank loans to the Micro, Small and Medium (c) a type of systemic risk that arises where
Enterprises qualify under the priority sector. perfect hedging is not possible
Which of the statements given above is/are correct? (d) a numeric value that measures the
(a) 1 only (b) 2 only (c) Both 1 and 2 (d) Neither 1 nor 2 fluctuations. of a stock to changes in the
With reference to Central Bank digital currencies, overall stock market.
consider the following statements: Consider the following statements:
1. It is possible to make payments in a digital 1. The Self-Help Group (SHG) programme
currency without using US dollar or SWIFT was originally initiated by the State Bank
system. of India by providing microcredit to the
2. A digital currency can be distributed with a financially deprived.
condition programmed into it such as a 2. In an SHG, all members of a group take
timeframe for spending it. responsibility for a loan that an individual
Which of the statements given above is/are member takes.
correct? 3. The Regional Rural Banks and Scheduled
(a) 1 only Commercial Banks support SHGs.
(b) 2 only How many of the above statements are
(c) Both 1 and 2 correct?
(d) Neither 1 nor 2 (a) Only one (b) Only two (c) All three (d) None
 MONEY-EVOLUTION, TYPES/FORMS, MONEY SUPPLY

FUNCTIONS OF MONEY Currency The form in which money is circulated in the

economy by the monetary authority.
PRIMARY FUNCTIONS: • It is only one component of Money.
• Medium of Exchange
Liquidity The ability of an asset to be converted into money
• Measure of Value
Presented By: VINAY KUMAR

(or direct medium of exchange).

SECONDARY FUNCTIONS:
• Standard of Deferred Payments Near Money Highly liquid assets which are not accepted as
• Store of Value money, but can be converted to money within a
short period.
• Transfer of Value
CONTINGENT FUNCTIONS: Legal Tender It is a coin or a banknote that is legally tenderable
• Basis of Credit for discharge of debt or obligation.
• Distribution of Social Income Fiat money is a currency that lacks intrinsic value and is
• General Form of Capital established as a legal tender by government
• Maximum Benefit regulation.
Mobile Aided Note Identifier (MANI) is a mobile application launched by the Reserve Bank for
aiding visually impaired persons to identify the denomination of Indian Banknotes.
 WHERE ARE BANK NOTES AND COINS PRODUCED/MINTED?
BANK NOTES COINS
At four currency presses: At the following four mints owned by SPMCIL.
• Nasik (Western India)
• Dewas (Central India). 1. Mumbai
Owned by the Government of India through its 2. Hyderabad
Corporation, Security Printing and Minting 3. Kolkata and
Corporation of India Ltd. (SPMCIL). 4. NOIDA.

• Mysuru (Southern India) In respect of coins, the role of RBI is limited to

• Salboni (Eastern India) distribution of coins that are supplied by
Owned by the Reserve Bank, through its wholly Government of India.
owned subsidiary, Bharatiya Reserve Bank Note
Mudran Private Ltd. (BRBNMPL).
In terms of Section 22 of the RBI Act, 1934, RBI has The Government of India is responsible for the
the sole right to issue banknotes in India. designing and minting of coins in various
denominations as per the Coinage Act, 2011.
All banknotes issued by RBI are backed by assets such as gold, Government Securities and Foreign
Currency Assets, as defined in Section 33 of RBI Act, 1934.
Which one of the following statements correctly describes the meaning of legal tender money? (CSP-2018)
(a) The money which is tendered in courts of law to defray the fee of legal cases
(b) The money which a creditor is under compulsion to accept in settlement of his claims
(c) The bank money in the form of cheques, drafts, bills of exchange etc.
(d) The metallic money in circulation in a country
Presented By: VINAY KUMAR
 MONEY SUPPLY-MONETARY AGGREGATES
Total value of money available in an economy at a point of time
RBI measures and publishes it on a weekly or fortnight basis.
Monetary aggregates- Very often, the money supply in the economy is represented using a monetary
aggregate called ‘broad money’, also denoted as M3.
Reserve/ High-Powered Money/Monetary Base
M0
Currency in circulation + Bankers’ deposits with RBI + Others deposits with RBI
Narrow Money
M1 Currency with public + Demand deposits (CASA) in all banks + Other deposits with RBI

M2 M1 + Post office savings*

Broad Money/ Money Aggregate
M3 M1 + Time deposits with commercial banks (Fixed deposits, Recurring deposits).
(M3 captures the complete balance sheet of the banking sector)
Broad Money
M4
M4= M3 + Total Post office deposits.
Order of Liquidity: M1 >> M2 >>M3 >>M4
If you withdraw Rs. 1,00,000 in cash from your Demand Deposit Account at your bank,
the immediate effect on aggregate money supply in the economy will be
CSP (a) To reduce it by Rs. 1,00,000
(b) To increase it by Rs. 1,00,000
2020 (c) To increase it by more than Rs. 1,00,000
(d) To leave it unchanged Presented By: VINAY KUMAR
 MONEY CREATION BY BANKS& MONEY MULTIPLIER
The money multiplier in an economy
increases with which one of the
following?
A. Increase in the cash reserve ratio
B. Increase in the banking habit of
the population
C. Increase in the statutory liquidity
ratio
D. Increase in the population of the
country

How many times the total deposits would be of the initial

deposit is determined by the LRR.
The multiple called the money or deposit multiplier, is:
Money multiplier = 1/LRR
In our above illustration the LRR is 0.2 therefore,
Money multiplier = 1/0.2 = 5
The total money creation is thus:
Money creation = initial deposit x 1/LRR = 100x1/0.2 = 500

Note: Lower the LRR, higher the money multiplier and more the money creation.
If the LRR = 0.1, the money multiplier is 10(=1/0.1).
If the LRR is 0.4, the money multiplier is 2.5(=1/0.4) Presented By: VINAY KUMAR
Definition Satoshi Nakamoto- a new electronic cash system that’s fully peer-to-peer with no trusted
third party.
Cryptocurrencies have an extra layer of security, in the form of encryption algorithms.
Examples Bitcoin, Ethereum, Ripple, Monero, Litecoin, Dash, Dogecoin, Ven
Characteristics  No central regulator (like RBI) for virtual currencies
 Have no intrinsic value; Not backed by any underlying asset like Gold etc.,
 Placed in a globally visible distributed ledger& accessible to all the users
Blockchain Using Distributed Ledger Network (DLN) technology digital databases are created which
Technology actually makes the virtual currency transferable and incorruptible.
Mining The process through which cryptocurrencies are created
Legal Status of Despite inter-ministerial committee recommendations to ban private cryptocurrencies, and
DC in India warnings by institutions such as the RBI about the problematic nature of their payment and
exchange methods, the use of virtual currencies over the Internet continues to remain legal
in India.
Concerns (or) Lack of any underlying fiat; Excessive volatility in their value; Anonymous;
Limitations Conducive for illegal activities such as money laundering, illegal arms trade etc.;
Risks and concerns about data security and consumer protection;
Potential impact on the effectiveness of monetary policy;
No control and potentially no taxation on virtual currency
Cryptojacking Process by which digital coin miners illegally gain access to computers and stealthily drop
malware, which turns devices into cryptocurrency-mining botnets.
e-RMB (or) People’s Bank of China, China's central bank has stepped up its development of the e-RMB,
Digital Yuan which is set to be the first digital currency operated by a major economy.
China began pilot scale payments in its new digital currency in 4 major cities.
Countries like Senegal, Marshal Islands, Tunisia, Venezuela have already adopted CBDC.
Presented By: VINAY KUMAR
• Introduction of Digital Rupee
• By the RBI
• in 2022-23
• Specific tax regime for virtual digital assets
introduced.
• Any income from transfer of any virtual
digital asset to be taxed at the rate of 30%
• No deduction in respect of any expenditure
or allowance to be allowed while
computing such income except cost of
acquisition.
• Loss from transfer of virtual digital asset
cannot be set off against any other income.
• To capture the transaction details, TDS to be
provided on payment made in relation to
transfer of virtual digital asset at the rate of
1% of such consideration above a monetary
threshold.
• Gift of virtual digital asset also to be taxed
in the hands of the recipient.
Presented By: VINAY KUMAR
 CENTRAL BANK DIGITAL CURRENCY (CBDC)
• Central Bank Digital Currency (CBDC) is a digital form of currency notes issued by a central bank.
• Reserve Bank India defines CBDC as the legal tender issued by a central bank in a digital form.
• It is akin to sovereign paper currency but takes a different form, exchangeable at par with the existing
currency and shall be accepted as a medium of payment, legal tender and a safe store of value.
• CBDCs would appear as liability on a central bank’s balance sheet.
• CBDC, being a sovereign currency, holds unique advantages of central bank money viz. trust, safety,
liquidity, settlement finality and integrity.

Types of CBDC Why CBDC?

CBDC can be classified into two broad types: The key motivations for exploring the issuance of
1. General purpose or retail (CBDC-R) CBDC in India among others include
2. Wholesale (CBDC-W) • Reduction in operational costs involved in
physical cash management
• Retail CBDC would be potentially available
• Fostering financial inclusion
for use by all viz. private sector, non-
• Bringing resilience, efficiency, and innovation in
financial consumers and businesses while payments system
wholesale CBDC is designed for restricted • Adding efficiency to the settlement system
access to select financial institutions. • Boosting innovation in cross-border payments
• While Wholesale CBDC is intended for the • Providing public with uses that any private
settlement of interbank transfers and virtual currencies can provide, without the
related wholesale transactions, Retail CBDC associated risks.
is an electronic version of cash primarily • To push the informal economy into the formal
meant for retail transactions. zone
• To ensure better tax and regulatory compliance .
Presented By: VINAY KUMAR
 Issues related to CBDC What is Digital Rupee – Retail (e₹-R)?
Anonymity and Privacy: The RBI launched the first pilot of Digital Rupee- Retail
• The first issue to tackle is the heightened risk to the segment (e₹-R) on December 01, 2022.
privacy of users—given that the central bank could • The pilot is covering select locations (currently in five
potentially end up handling an enormous amount cities of Mumbai, New Delhi, Bengaluru,
of data regarding user transactions. Bhubaneswar and Chandigarh) in closed user group
• This has serious implications given that digital (CUG) of participating customers and merchants.
currencies will not offer users the level of privacy • The RBI issues only one digital currency on behalf of
and anonymity offered by transacting in cash. Government of India, CBDC, which is a liability of the
Cyber Security: Central Bank.
• CBDC ecosystems may be at a similar risk of cyber- • The CBDC pilot has components based on blockchain
attacks that the current payment systems are technology.
exposed to. • The e₹-R is in the form of a digital token that
• Compromise of credentials is another major issue. represents legal tender.
Digital divide and financial illiteracy: • It is being issued in the same denominations that
• NFHS-5: Only 48.7% of rural males and 24.6% of the paper currency and coins are currently issued.
rural females have ever used the internet. So, CBDC • It is being distributed through financial
may wide gender-based hurdle in financial inclusion intermediaries, i.e., banks.
along with digital divide. • The e₹-R offers features of physical cash like trust,
Disintermediation of Banks: safety and settlement finality.
• If sufficiently large and broad-based, the shift to • As in the case of cash, it will not earn any interest
CBDC can impinge upon the bank’s ability to plough and can be converted to other forms of money, like
back funds into credit intermediation. deposits with banks.
• Faster obsolescence of technology could pose a • A separate e₹ wallet has been conceived in the pilot
threat to the CBDC ecosystem calling for higher considering that e₹ forms part of the currency
costs of Upgradation. system while other digital wallets form part of the
Presented By: VINAY KUMAR payments system.
With reference to ‘Bitcoins’, sometimes seen in the news, Consider the following liquid assets:
which of the following statements is/are correct? (1) Demand deposits with the banks
1) Bitcoins are tracked by the Central Banks of the
(2) Time deposits with the banks
countries.
2) Anyone with a Bitcoin address can send and receive (3) Savings deposits with the banks
Bitcoins from anyone else with a Bitcoin address. (4) Currency
3) Online payments can be sent without either side The correct sequence of these
knowing the identity of the other. decreasing order of Liquidity is
Select the correct answer using the code given below. (a) 1-4-3-2;
(a) 1 and 2 only; (b) 4-3-2-1;
(b) 2 and 3 only;
(c) 3 only
(c) 2-3-1-4;
(d) 1, 2 and 3 (d) 4-1-3-2

In the context of Indian economy; which of the following is/are the

purpose/purposes of ‘Statutory Reserve Requirements’?
1) To enable the Central Bank to control the amount of advances the banks can
create
2) To make the people’s deposits with banks safe and liquid
3) To prevent the commercial banks from making excessive profits
4) To force the banks to have sufficient vault cash to meet their day-to-day
requirements
Select the correct answer using the code given below.
(a) 1 only; (b) 1 and 2 only; (c) 2 and 3 only (d) 1, 2, 3 and 4
Presented By: VINAY KUMAR
 MONEY SUPPLY- INFLATION
Inflation A sustained/ persistent rise in the general level of prices in an economy

Presented By: VINAY KUMAR

It is indicative of the decrease in the purchasing power of a unit of country’s currency.

Deflation A decrease in general price levels throughout an economy.

Disinflation A temporary slowdown in price inflation.

while disinflation is considered good for the economy (as it brings comfort to the consumers), deflation
is not considered good (as it invites the risks of slowdown and even recession in the economy)
Presented By: VINAY KUMAR

• Inflation and unemployment have an inverse relationship.

The Phillips Curve
• Higher inflation is associated with lower unemployment and vice versa.
Stagflation Inflation and unemployment both are at higher levels in an Economy
 Inflation- Terminology Who gains from Inflation? Who loses from inflation?
• Creeping Inflation (< 3% p.a.) • Debtors/ Borrowers • Creditors/ Depositors
• Walking/Trotting Inflation (3-10% p.a.) • Producers • Who depend on fixed
• Running Inflation (> 10% p.a.) • Owners of real assets income/ wage earners
• Galloping Inflation (< 1000% p.a.) • People who anticipate • Owners of financial
• Hyper Inflation (> 1000% p.a.) inflation assets
• Headline Inflation • Taxpayers • Government
• Core Inflation Consider the following statements: (a) 1 only;
• Imported Inflation (1) Inflation benefits the debtors. (b) 2 only;
• Inflation Premium (2) Inflation benefits the bond-holders. (c) Both 1 and 2;
Which of the statements given above is/are correct? (d) Neither 1 nor 2
Demand-Pull Inflation Cost-Push Inflation
• A mismatch between demand and supply pulls • An increase in factor input costs (i.e., wages
up prices. and raw materials), therefore increased
• ‘too much money chasing too little output’ production cost pushes up prices.
• Creation of extra money
• Increased spending power of people
• To tackle demand, spending has to be cut • controls on prices and incomes
• by increasing taxes • Cutting Taxes (short-run)
• By reducing government expenditure. • ‘moral suasions’- Promoting austerity
• Import of the goods in short supply • measures to reduce the monopoly power of
• Increasing the interest on loans trade unions - Wage revisions
• Wage revisions • Reducing excise and custom duties on raw
• Promoting austerity materials
Presented By: VINAY KUMAR
 WHOLESALE PRICE INDEX (WPI) CONSUMER PRICE INFLATION (CPI)
• It measures the changes in the prices of • It measures price changes from the
goods sold and traded in bulk by wholesale perspective of a retail buyer.
businesses to other businesses. • Published by the National Statistical Office
Presented By: VINAY KUMAR

• Published by the Office of Economic (NSO), MoSPI. (Base Year for CPI is 2012)
Adviser, Ministry of Commerce and Industry. • Four types of CPI are as follows: CPI (IW), CPI
• It is the most widely used inflation indicator (AL), CPI (RL), CPI (Combined); Of these, the
in India. first three are compiled by the Labour Bureau
• Major criticism for this index is that in the Ministry of Labour and Employment.
the general public does not buy products at Fourth is compiled by the NSO.
wholesale price. • Recently, Labour Bureau released new series
• Base year for WPI: 2011-12 of CPI (IW) with base year 2016.
WPI does not capture changes in the prices of No Item Weightage
services, which CPI does.
BASE YEAR= 2012 R U C
No Item Weightage
1 Food& Beverages 54.18 36.29 45.86
BASE YEAR= 2011-12
2 Pan, Tobacco etc., 3.26 1.36 2.38
1 Primary Articles 22.62 3 Clothing, Footwear 7.36 5.57 6.53
2 Fuel& Power 13.15 4 Housing -- 21.67 10.07
3 Manufactured Products 64.23 5 Fuel& Light 7.94 5.58 6.84
TOTAL 100.00 6 Miscellaneous 27.26 29.53 28.32

Food Index 24.38 TOTAL 100.0 100.0 100.0

 A rise in general level of prices may be caused by
(1) an increase in the money supply
(2) a decrease in the aggregate level of output
(3) an increase in the effective demand
Select the correct answer using the codes given
below.
(a) 1 only;
(b) 1 and 2 only;
(c) 2 and 3 only;
(d) 1, 2 and 3
Which one of the following is likely to be the most
inflationary in its effect?
(a) Repayment of public debt
(b) Borrowing from the public to finance a budget
deficit
(c) Borrowing from banks to finance a budget
deficit
(d) Creating new money to finance a budget deficit
Which of the following brings out the ‘Consumer Supply of money remaining the same when there is
Price Index Number for Industrial Workers’? an increase in demand for money, there will be
(a) a fall in the level of prices
(a) The RBI; (b) an increase in the rate of interest
(b) The Department of Economic Affairs; (c) a decrease in the rate of interest
(c) The Labour Bureau; (d) an increase in the level of income and
(d) The DoPT employment
Presented By: VINAY KUMAR
With reference to the Indian economy, demand-pull Which among the following steps is most likely to
inflation can be caused/increased by which of the be taken at the time of an economic recession?
following? a) Cut in tax rates accompanied by increase in
1. Expansionary policies interest rate
2. Fiscal stimulus b) Increase in expenditure on public projects
3. Inflation-indexing wages c) Increase in tax rates accompanied by
4. Higher purchasing power reduction of interest rate
5. Rising interest rates d) Reduction of expenditure on public projects
Select the correct answer using the code given below. Consider the following statements :
a) 1, 2 and 4 only (1) The weightage of food in Consumer Price
b) 3, 4 and 5 only Index (CPI) is higher than that in Wholesale Price
c) 1, 2, 3 and 5 only Index (WPI).
d) 1, 2, 3, 4 and 5 (2) The WPI does not capture changes in the
prices of services, which CPI does.
Which one of the following is likely to be one of the (3) The Reserve Bank of India has now adopted
most inflationary in its effects? WPI as its key measure of inflation and to decide
a) Repayment of public debt on changing the key policy rates.
b) Borrowing from the public to finance a budget deficit Which of the statements given above is/are
c) Borrowing from the banks to finance a budget deficit correct?
d) Creation of new money to finance a budget deficit (a)1 and 2 only; (b)2 only; (c) 3 only; (d) 1, 2 and 3
With reference to inflation in India, which of the following statements is correct?
(a) Controlling the inflation in India is the responsibility of the Government of India only
(b) The Reserve Bank of India has no role in controlling the inflation
(c) Decreased money circulation helps in controlling the inflation
(d) Increased money circulation helps in controlling the inflation
Presented By: VINAY KUMAR
• The primary objective of monetary policy is to MONETARY POLICY COMMITTEE (MPC)
maintain price stability while keeping in mind the
objective of growth. MPC constituted by the Central Government
• Price stability is a necessary precondition to under Section 45ZB determines the policy interest
sustainable growth. rate required to achieve the inflation target.
• 2016: Flexible Inflation Targeting framework.
• Inflation target to be set by the Government of
India, in consultation with the Reserve Bank, once
in every five years.
• Accordingly, the Central Government has notified
4 per cent Consumer Price Index (CPI) inflation as
the target for the period from August 5, 2016 to
March 31, 2021 with the upper tolerance limit of
6 per cent and the lower tolerance limit of 2 per
cent.
• Monetary Policy Framework based on CPI level
of 4% with tolerable limit of +/- 2% has now been
extended for five more years.
Factors that constitute failure to achieve the inflation
target if the average inflation is more than or less
than tolerance level (4+/-2) for any three consecutive
quarters.
Presented By: VINAY KUMAR
Monetary Policy Section 45ZB of the amended RBI Act, 1934 provides for an empowered six-member
Committee monetary policy committee (MPC) to be constituted by the Central Government.
(MPC) Such MPC comprises:
 Three members from the RBI
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 to be nominated by the Central Board –
Member, ex officio
 Three members nominated by the Central Government and they hold office for a period
of 4 years or until further orders, whichever is earlier. No reappointment
Functioning of  MPC determines the policy interest rate required to achieve the inflation target.
MPC  The MPC is required to meet at least four times in a year. (However, MPC has been
conducting meeting for every TWO months and releasing bi-monthly policy statements)
 The quorum for the meeting of the MPC is four members.
 Each member of the MPC has one vote, and in the event of an equality of votes, the
Governor has a second or casting vote.
 The resolution adopted by the MPC is published after conclusion of every meeting of the
MPC in accordance with the provisions of Chapter III F of the Reserve Bank of India Act,
1934.
 On the 14th day, the minutes of the proceedings of the MPC are published which
include:
o the resolution adopted by the MPC;
o the vote of each member on the resolution, ascribed to such member; and
o the statement of each member on the resolution adopted.
 Once in every six months, the Reserve Bank is required to publish a document called the
Monetary Policy Report to explain:
o the sources of inflation; and
o the forecast of inflation for 6-18 months ahead. Presented By: VINAY KUMAR
 MONETARY POLICY INSTRUMENTS
Cash Reserve Ratio • The average daily balance that a bank is required to maintain with the RBI as a share of such
(CRR) (% of NDTL) per cent of its NDTL that the RBI may notify from time to time.
Statutory Liquidity • The share of NDTL that a bank is required to maintain in safe and liquid assets, such as,
Statutory Reserve Ratio (SLR) unencumbered government securities, cash and gold.
Ratios (% of NDTL) • Changes in SLR often influence the availability of resources in the banking system for lending
to the private sector.
• Scheduled Commercial Banks (including RRBs), Local Area Banks, Small Finance Banks,
Payments Banks, Primary (urban) co-operative banks and State and central co-operative
banks.
Bank Rate • It is the rate at which the RBI is ready to buy or rediscount bills of exchange or other
commercial papers. This rate has been aligned to the MSF rate and, therefore, changes
automatically as and when the MSF rate changes alongside policy repo rate changes.
Liquidity Adjustment • The LAF consists of overnight as well as term repo auctions.
Presented By: VINAY KUMAR

Facility (LAF) • LAF consists of Repo auctions (for injection of liquidity) and reverse repo auctions (for
Key Rates absorption of liquidity) conducted by the Reserve Bank.
(or) Repo rate • The (fixed) interest rate at which the RBI provides overnight liquidity to banks against the
Policy Rates collateral of government and other approved securities under the LAF.
Reverse Repo Rate • The (fixed) interest rate at which the RBI absorbs liquidity, on an overnight basis, from banks
against the collateral of eligible government securities under the LAF.
Standing Deposit • a collateral-free liquidity absorption mechanism implemented by the RBI with the intention of
Facility (SDF) transferring liquidity out of the commercial banking sector and into the RBI. It will replace the
fixed rate reverse repo (FRRR) as the floor of the liquidity adjustment facility corridor.
Margin Standing • A facility under which SCBs can borrow additional amount of overnight money from the RBI by
Facility (MSF) dipping into their Statutory Liquidity Ratio (SLR) portfolio up to a limit at a penal rate of interest.
This provides a safety valve against unanticipated liquidity shocks to the banking system.
Open Market • These include both, outright purchase and sale of government securities, for injection and
Market Operations Operations (OMO) absorption of durable liquidity, respectively.
Market Stabilization • This instrument was introduced in 2004. Surplus liquidity of a more enduring nature arising
Scheme (MSS) from large capital inflows is absorbed through sale of short-dated G-Secs and T-Bills. The cash
so mobilized is held in a separate government account with the Reserve Bank.
• Headline inflation is measured by year-on-year changes in the all-India consumer
price index (CPI) produced by the National Statistical Office (NSO).
• Core CPI, i.e., CPI excluding food and fuel is worked out by eliminating the groups
‘food and beverages’ and ‘fuel and light’ from the headline CPI.
Presented By: VINAY KUMAR
 Open Market Operations (OMO) Monetization of Deficit
Both monetization and OMOs involve printing of currency by RBI and therefore result in expansion of
money supply.
RBI purchases treasury bills/government bonds from RBI prints currency and credits to the government’s
the secondary market and pumps money into the account against new government bonds issued by it.
economy. (through primary market)
This is basically a monetary policy tool aimed at It is a way of financing the fiscal deficit with the
adjusting liquidity in the system. quantum and timing of money supply determined by
the government’s borrowing rather than the RBI’s
monetary policy.
OMO is said to be a lesser evil than direct Expansion in the central bank’s balance sheet is
monetization because the former is a ‘temporary’ relatively ‘permanent’.
expansion in the central bank’s balance sheet.
MONETARY POLICY TRANSMISSION Q. Consider following statements about
Monetary Policy Committee: (CSP-2017)
• As per Economic Survey 2019-20, the
1. It decides RBI’s benchmark interest rates.
difference between Repo Rate and the
Weighted Average Lending Rate is the highest 2. It is a 12-member body including the
during the decade. Governor of RBI and is reconstituted every
• It indicates lack of proper monetary year.
transmission (in other words, Lending Rate 3. It functions under the chairmanship of the
Reduction is not commensurate with Repo Union Finance Minister.
Rate) Find Correct Statements:
• During the past two years, repo rate has been (a) 1 only; (b) 1 and 2 only; (c) 3 only;
reduced by around 250 basis points. (d) 2 and 3 only Presented By: VINAY KUMAR
 EXTERNAL BENCHMARKING OF LENDING RATES
Marginal Cost External
Benchmark
Administered of Funds based Benchmarking
Prime Lending Base Rate
Rates Lending Rate of Interest
Rate [BPLR]
[MCLR] Rates

RBI’s Internal Study Group had recommended a switchover to an external benchmark in a time-bound
manner.
Based on the consultations with stakeholders, RBI decided to link all new floating rate personal or retail
loans (housing, auto, etc.) and floating rate loans to Micro and Small Enterprises extended by banks
with effect from October 01, 2019 to external benchmarks.
(a) All new floating rate personal or retail loans (housing, auto, etc.) and floating rate loans to Micro and
Small Enterprises extended by banks from October 01, 2019 shall be benchmarked to one of the
following:
• Reserve Bank of India policy repo rate
• Government of India 3-Months Treasury Bill yield published by the Financial Benchmarks India
Private Ltd (FBIL)
• Government of India 6-Months Treasury Bill yield published by the FBIL
• Any other benchmark market interest rate published by the FBIL.
(b) Banks are free to offer such external benchmark linked loans to other types of borrowers as well.
(c) In order to ensure transparency, standardization, and ease of understanding of loan products by
borrowers, a bank must adopt a uniform external benchmark within a loan category; in other words,
the adoption of multiple benchmarks by the same bank is not allowed within a loan category.
(d) Banks are free to decide the spread over the external benchmark.
(e) The interest rate under external benchmark shall be reset at least once in three months.
Presented By: VINAY KUMAR
 Monetary Tightening is the Trend across all major economies!
• The year 2022 marked the return of high
inflation, especially in advanced economies,
after nearly four decades.
• These developments led to an
unprecedented, synchronous, and sharp
cycle of monetary tightening across
countries.
• Major central banks have implemented
sharp increases in policy rates, with the
Federal Reserve’s rate hikes being the
steepest since the 1970s.
• While the Federal Reserve has raised policy US Fed Interest rate hike and potential Impact
rates by 425 basis points (bps), the
European Central Bank (ECB) and the Bank India becomes less attractive market for
of England (BoE) have implemented 300 bps Investments and Currency Trade
and 250 bps rate increases, respectively. • Out flow of FIIs
• The RBI initiated its monetary tightening • Depreciation of INR (₹)
cycle in April 2022 and has since • Inflation
implemented a policy repo rate hike of 225 • Increased cost of borrowing from abroad, for
bps. Indian companies from (ECBs)
• Consequently, domestic financial conditions • Forces the RBIs to increase interest rate to
began to tighten, which was reflected in the arrest the flight of Investments
lower growth of monetary aggregates. Presented By: VINAY KUMAR
If the RBI decides to adopt an expansionist What is/are the purpose/purposes of the
monetary policy, which of the following would it ‘Marginal Cost of Funds based Lending Rate
not do? (MCLR)’ announced by RBI?
(1) Cut and optimize the Statutory Liquidity Ratio (1)These guidelines help improve the transparency
(2) Increase the Marginal Standing Facility Rate in the methodology followed by banks for

Presented By: VINAY KUMAR

(3) Cut the Bank Rate and Repo Rate determining the interest rates on advances.
(2)These guidelines help ensure availability of
Select the correct answer using the code given
bank credit at interest rates which are fair to the
below:
borrowers as well as the banks.
(a) 1 and 2 only; Select the correct answer using the code given
(b) 2 only; below.
(c) 1 and 3 only (a) 1 only; (b) 2 only; (c) Both 1 and 2;
(d) 1, 2 and 3 (d) Neither 1 nor 2
The terms ‘Marginal Standing Facility Rate’ and ‘Net With reference to the Indian economy, consider
Demand and Time Liabilities’, sometimes appearing in the following
news, are used in relation to (1) Bank rate; (2) Open market operations
(a) banking operations (3) Public debt; (4) Public revenue
(b) communication networking Which of the above is/ are component/s of
(e) military strategies Monetary Policy?
(d) supply and demand of agricultural products (a) 1 only; (b) 2, 3 and 4; (c) 1 and 2; (d) 1, 3 and 4
When the Reserve Bank of India reduces the Statutory Liquidity Ratio by 50 basis points, which of the
following is likely to happen?
(a) India’s GDP growth rate increases drastically
(b) Foreign Institutional Investors may bring more capital into our country
(c) Scheduled Commercial Banks may cut their lending rates
(d) It may drastically reduce the liquidity to the banking system
 FINANCIAL INTERMEDIATION
BANKS& FINANCIAL MARKETS

• Financial intermediaries transmute funds

between savers who lend and investors
who borrow.
• They mobilise savings and channel them
into the hands of investors who need
more funds than they have on hand.
• In other words, they are conduits through
which savers can lend their excess funds
to investors.
• The process by which allocation of funds
is done is called financial intermediation. FUNCTIONS OF FINANCIAL MARKET
• Banks and financial markets are
1. Mobilisation of Savings and Channeling them into
competing intermediaries in the financial
the most Productive Uses.
system, and give households a choice of 2. Facilitating Price Discovery
where they want to place their savings. 3. Providing Liquidity to Financial Assets
Presented By: VINAY KUMAR 4. Reducing the Cost of Transactions
 FINANCIAL INTERMEDIATION ECOSYSTEM IN INDIA
Insurance
Pension
Forex
Banks Non-Banking Financial Market
Financial Mutual
Funds
Institutions
Money Capital Derivatives
Market Market Market
Call Money Options
NBFCs AIFIs
T-bills Primary Secondary
NABARD Market Market Futures
Primary Certificate of
Dealers Deposit (CD)
NHB Debt
Commercial
Papers (CP)
EXIM Equity
G-Secs/
Dated
SIDBI Securities
State
NaBFID Development
Loans (SDLs)

Presented By: VINAY KUMAR

 RESERVE BANK OF INDIA

Non-Scheduled Banks
Scheduled Banks Development Banks (DFIs)

NABARD
Commercial Banks Cooperative Banks

SIDBI
Public Sector Banks
Urban Co-op Banks
MUDRA
Private Banks
State Co-op Banks
EXIM
Foreign Banks
District Co-op Banks
Regional Rural Banks NHB

Local Area Banks PACs IFCI/IDBI

Presented By: VINAY KUMAR

 Domestic Systemically Important
Banks (D-SIBs)
• The banks considered as too big to
fail by RBI due to their size, cross-
jurisdictional activities, complexity
and lack of substitute and
interconnection.
• Banks whose assets exceed 2% of
GDP are considered D-SIBs
• SBI, ICICI Bank, HDFC Bank
continues to remain D-SIB.
• As per the framework, from 2015,
the central bank has to disclose
names of banks designated as D-
SIB.

Presented By: VINAY KUMAR

 Which Banks are insured by the DICGC? What does the DICGC insure?
• All commercial banks including branches of • The DICGC insures all deposits such as savings,
foreign banks functioning in India fixed, current, recurring, etc. deposits except
• Local Area Banks the following types of deposits
• Regional Rural Banks • Deposits of foreign Governments;
• All co-operative banks (State, Central and • Deposits of Central/State Governments;
Primary cooperative banks, also called urban • Inter-bank deposits;
cooperative banks) • Deposits of the State Land Development Banks
Note: Primary cooperative societies are not with the State co-operative bank;
insured by the DICGC. • Any amount due on account of and deposit
received outside India
What is the maximum deposit amount • Any amount, which has been specifically
insured by the DICGC? exempted by the corporation with the previous
approval of Reserve Bank of India
Each depositor in a bank is insured up to a
maximum of Rs. 5,00,000 (Rupees Five Lakhs) The deposits kept in different branches of a
for both principal and interest amount held by bank are aggregated for the purpose of
him. insurance cover and a maximum amount of up
Presented By: VINAY KUMAR to ₹5,00 000 is paid.
 PRIORITY SECTOR LENDING (PSL)
PSL applicable Sectors PSL norms applicable to:
The idea behind this is to
• Agriculture • Every Commercial Bank ensure that adequate
• MSMEs [including Regional Rural institutional credit reaches
• Export Credit Bank (RRB), Small Finance some of the vulnerable
Bank (SFB), Local Area Bank] sectors of the economy,
• Education
• Primary (Urban) Co- which otherwise may not
• Housing operative Bank (UCB) other
• Social Infrastructure be attractive for banks from
than Salary Earners’ Bank
• Renewable Energy, and the profitability point of
licensed to operate in India
• Others., by the RBI.
view.

Categories Domestic scheduled commercial banks and Foreign banks Foreign banks with less than
with 20 branches and above 20 branches
Total PSL Target 40% of Adjusted Net Bank Credit or Credit Equivalent 40% of ANBC to be achieved in
Amount of Off-Balance Sheet Exposure, whichever is a phased manner by 2020.
higher.
Agriculture 18% of ANBC or Credit Equivalent Amount of Off-Balance Not applicable
Sheet Exposure, whichever is higher.
 Within the 18% target for agriculture, a target of 8% is
prescribed for Small and Marginal Farmers.
Micro Enterprises 7.5% of ANBC or Credit Equivalent Amount of Off-Balance Not applicable
Sheet Exposure, whichever is higher.
Advances to 10% of ANBC or Credit Equivalent Amount of Off-Balance Not applicable
Weaker Sections Sheet Exposure, whichever is higher
Presented By: VINAY KUMAR
 NON-PERFORMING ASSETS (NPAs)
PCA – Three Parameters

Presented By: VINAY KUMAR

1. Capital
2. Asset Quality
3. Leverage
PCA is applicable to all banks
operating in India including foreign
banks, excluding SFBs and Payment
Banks. Now, PCA framework will be
applicable to all deposit-taking
NBFCs, all non-deposit taking
NBFCs.

PROMPT CORRECTIVE ACTION (PCA)

• PCA is a framework under which financial
institutions (Banks and NBFCs) with weak
financial metrics are put under watch by
the RBI.
• It was first introduced in 2002 as a
structured early-intervention mechanism
for banks.
• It was last reviewed in 2017 based on the
recommendations of the FSDC and FSLRC.
• The Capital-to-Risk Weighted Assets
Ratio (CRAR) remains healthy at 16.0
and well above the regulatory
requirement of 11.5.
• The GNPA ratio decreased from 8.2% in
March 2020 to a seven-year low of 5.0%
in September 2022, while Net Non-
Performing Assets (NNPA) have dropped
to a ten-year low of 1.3% of total assets.
• The health of NBFCs has continued to
improve as well.
 IBC- 4 PILLARS

Insolvency Professionals
(IPs)

Information Utilities (IU)

Regulator- IBBI

Adjudicating Authorities
Individuals- DRT
Companies- NCLT
Presented By: VINAY KUMAR
 Basel-III Standards
Basel-III standards mainly seek to raise
the quality and level of capital to ensure
that financial entities are better able to
absorb losses on both a going concern
and a gone concern basis. In 2021, RBI
extended Basel-III Capital Framework to
AIFIs. Presented By: VINAY KUMAR

• For Payment Banks, Enhancement of limit of maximum

balance per customer at end of the day from ₹1 lakh to ₹2 lakh.
• Payments Banks can apply for conversion to Small Finance
Banks after five years of operation.
• Existing NBFCs, MFIs, local area banks and payments banks can
be converted to Small Finance Banks, and the capital
requirement is ₹200 Crore.
• RBI allowed Primary (Urban) Cooperative Banks to convert into
SFBs, provided, they comply with the on-tap licensing guidelines.
• For cooperative banks, the minimum net worth should be
₹100 Cr and should be increased to ₹200 Cr, within five
years from the commencement of business.
RESERVE BANK OF INDIA (RBI)
The Reserve Bank of India was

Presented By: VINAY KUMAR

established on April 1, 1935 in
accordance with the provisions of the
RBI Act, 1934.
In 1949, the RBI was nationalised.
RBI as Banker to banks
As Banker to banks, the Reserve Bank provides short-term
loans and advances to select banks, when necessary, to
facilitate lending to specific sectors and for specific
purposes.
RBI as ‘lender of the last resort’
• RBI can come to the rescue of a bank that is solvent but
faces temporary liquidity problems by supplying it with
much needed liquidity when no one else is willing to
extend credit to that bank.
• RBI extends this facility to protect the interest of the
depositors of the bank and to prevent possible failure of
the bank, which in turn may also affect other banks and
institutions and can have an adverse impact on financial
stability and thus on the economy.
• Monetary authority: Formulate, operationalize and monitor the implementation of monetary policy
in order to maintain price stability while keeping in mind the objective of growth.
• Regulator and supervisor of the financial system: Maintain public confidence in the system, protect
depositors' interest and provide cost-effective banking services to the public.
• Regulator and supervisor of the Payment and Settlement Systems: Regulate and oversee all the
payment and settlement systems in the country.
• Fostering of financial stability: Effecting macro-prudential policy; acting as the LoLR; developing
and strengthening the deposit insurance framework within the country.
• Manager of foreign exchange: Administers the Foreign Exchange Management Act, 1999 (FEMA),
which aims at facilitating external trade and payment and promote orderly development and
maintenance of foreign exchange market in India.
• Reserve management: Acts as the custodian of foreign exchange reserves and manages them to
calm volatility in the forex markets and provide adequate liquidity for ‘sudden stop’ or reversals in
capital flows.
• Issuer of currency: The RBI Act confers RBI with the sole right to issue bank notes in India. The RBI’s
objective is the supply and distribution of adequate quantity of currency and ensuring the quality of
banknotes in circulation by continuous supply of clean notes and timely withdrawal of soiled notes.
• Developmental functions: Consumer protection, financial inclusion& development of institutions.
• Banker to the government: Banker to the Central Government vide statutory stipulations under the
RBI Act, and to the state governments through various agreements.
• Debt manager to central and state governments: As the debt manager of central and state
governments, RBI works to minimize the long-term borrowing costs, ensure sustainability of debt,
and to deepen and widen the market for Government securities.
• Banker to banks: Maintains banking accounts of all scheduled banks and provides an efficient
means of transferring funds for banks and settling inter-bank transactions. Presented By: VINAY KUMAR
 FINANCIAL INCLUSION
Ensuring access to an array of basic formal financial services and products and scaling up financial
awareness initiatives.

Pradhan Mantri Jeevan Jyothi Bima Yojana

Pradhan Mantri Suraksha Bima Yojana

Atal Pension Yojana

The Lead Bank Scheme State Level Bankers' Committees

• Introduced towards the end of 1969 • SLBCs are formed in all the States for inter-
• It envisages assignment of lead roles to institutional coordination and joint
individual banks (both in public sector and implementation of programs and policies by
private sector) for the districts allotted to all the financial institutions operating in the
them. State.
• The lead bank acts as a leader for coordinating • Responsibility for convening SLBC meetings is
the efforts of all credit institutions in the assigned to various commercial banks.
allotted districts to increase the flow of credit • SLBC meetings, held quarterly, provide for
to agriculture, small-scale industries and other interaction among the various banks in the
economic activities included in the priority State, and between the banks and the State
sector in the rural and semi-urban areas. Government authorities.
 National Payment
Corporation of India (NPCI)
ABOUT NPCI (2008): 6 PSBs, 4 private sector banks, RBI and Indian Banks Association setup
NPCI as a consortium of these banks. Which one of the following links all the ATMs in India?
• It is the umbrella entity for digital payments. a) Indian banks’ Association
• It is not-for-profit entity. It is not under the RTI Act. b) National Securities Depository Limited
• It devised several digital payment initiatives. c) National Payments Corporation of India
d) Reserve Bank of India
Other services offered by NPCI
• National Financial Switch (NFS) – provides e-commerce
transactions with interbank payment gateway and shared ATMs.
• Immediate Payments Service (IMPS) – provides electronic fund
transfer payment mechanics through the usage of mobile
phones, internet banking and ATM
• *99# – provides banking services to common man which works
on USSD channel.
• National Automated Clearing House (NACH)- facilitates high
volume interbank transactions which occur repetitively.
• Cheque Truncation System (CTS)- clearing cheques using online
image basis
• Aadhaar Enabled Payment System (AEPS)- provides a point of
sales transactions with an Aadhar enabled number.
• Bharat Bill Payment System (BBPS) – a unified platform for bill
payment system in the country. Presented By: VINAY KUMAR
The National Payments Corporation of India (NPCI), which
oversees the digital payments ecosystem in India, has launched
e-RUPI, a voucher-based payments system to promote cashless
transactions.

It has been developed in collaboration with the Department of Financial Services (DFS), Ministry of
Health & Family Welfare (MoHFW) and National Health Authority (NHA).

• e-RUPI is a person and purpose-specific

cashless digital payment solution.
• a contactless instrument for digital payment.
• It is basically a prepaid voucher that can be
issued directly to citizens after verifying
mobile number and identity.
• It is based on a QR code or SMS string-based
e-voucher, which is delivered to the mobile
of the beneficiaries.
• The beneficiary can redeem the voucher
without a card, digital payments app, or
internet banking access, at the service
provider.
• e-RUPI is expected to play a major role in
strengthening Direct-Benefit Transfer (DBT)
and making it more transparent.
Presented By: VINAY KUMAR
 RBI takes supervisory action on Card Networks – American Express Banking
Corp. and Diners Club International Ltd
Presented By: VINAY KUMAR
• RBI circular on Storage of Payment System Data
• These two entities have been found non-
Dt.06/04/2018
• All Payment System Providers were directed to compliant with the directions on Storage of
ensure that within a period of six months the Payment System Data. This order will not
entire data (full end-to-end transaction details / impact existing customers.
information collected / carried / processed as part • American Express Banking Corp. and Diners
of the message / payment instruction) relating to Club International Ltd. are Payment System
payment systems operated by them is stored in a Operators authorised to operate Card
system only in India. Networks in the country under the Payment
• They were also required to report compliance to and Settlement Systems Act, 2007.
RBI and submit a Board-approved System Audit • The supervisory action has been taken in
Report (SAR) conducted by a CERT-In empanelled exercise of powers vested in RBI under
auditor within the timelines specified therein. Section 17 of the PSS Act.
The Reserve Bank of India’s recent directives relating to ‘Storage of Payment System Data’, popularly
known as data diktat command the payment system providers that : (CSP-2019)
1. They shall ensure that entire data relating to payment systems operated by them are stored in a
system only in India.
2. They shall ensure that the systems are owned and operated by public sector enterprises.
3. They shall submit the consolidated system audit report to the comptroller and Auditor General of
India by the end of the calendar year.
Which of the statements given above is/are correct:
(a) 1 only (b)1 and 2 only (c) 3 only (d) 1,2 and 3 only
• Principal development financial institution Functions of NaBFID
(DFIs) for infrastructure financing.
• DFIs are set up for providing long-term finance (i) Loans and advances for infrastructure
for such segments of the economy where the projects,
risks involved are beyond the acceptable limits (ii) taking over or refinancing existing loans,
of commercial banks and other ordinary FIs. (iii) attracting investment from private sector
investors and institutional investors for
• DFIs do not accept deposits from people.
infrastructure projects,
• NBFID will be set up as a corporate body with
(iv) organising and facilitating foreign
authorised share capital of ₹1 lakh crore.
participation in infrastructure projects,
• Shares of NBFID may be held by:
(v) facilitating negotiations with various
(i) central government,
government authorities for dispute
(ii) multilateral institutions resolution in the field of infrastructure
(iii) sovereign wealth funds, financing, and
(iv) pension funds, (vi) providing consultancy services in
(v) insurers, infrastructure financing.
(vi) financial institutions,
(vii) banks, and NaBFID may borrow money from: (i) central
(viii) any other institution prescribed by the government, (ii) RBI, (iii) SCBs (iv) mutual funds,
central government. and (iv) multilateral institutions such as World
• Initially, the central government will own 100% Bank and Asian Development Bank.
shares of the institution which may • The Bill also provides for any person to set up
subsequently be reduced up to 26%. a DFI by applying to RBI.
Presented By: VINAY KUMAR • RBI may grant a license for DFI.
 Financial Services Institutions Bureau (FSIB)
It is set up under the Department of Financial Composition of FSIB:
Services (DFS), Ministry of Finance, to: • Chairperson of FSIB, to be nominated by GoI who shall
• Recommend persons for appointment as be a retired official from the banking sector (or) a
whole-time directors and non-executive
businessperson of repute with sufficient knowledge of
chairpersons on the Boards of financial
the financial sector, (or) a person with at least 25 years
services institutions (including public sector
of experience in public administration with experience
banks (PSBs), public sector insurers (PSIs) and
financial institutions (FIs)). in banking and the financial sector.
• Advise on certain other matters relating to • Ex officio members: Secretary in charge of DFS,
personnel management in these institutions. Department of Public Enterprises, Chairperson of the
• Promote excellence in Corporate Governance IRDAI, Deputy Governor of RBI.
in Public Sector FIs. • 3 persons with subject matter knowledge relating to
Other major functions of FSIB include: PSBs and FIs and 3 persons with subject matter
To advise the Government on matters relating to knowledge relating to PSIs (to be nominated by the
appointments, transfer or extension of term of GoI) as part time members.
office and termination of services of the directors.
• To advise the Government on the desired
management structure at the Board level for
PSBs, FIs and PSIs.
• To build a databank containing data related to
the performance of PSBs, FIs and PSIs.
• To advise the Government on formulation and
enforcement of a CoE/ CoC for whole-time
directors in PSBs, FIs and PSIs.
• To help PSBs, Fls and PSIs in terms of
developing business strategies and capital
raising plan etc. Prepared by: Vinay Kumar Bavandla
With reference to the governance of public sector banking in India, consider the following statements:
1. Capital infusion into PSBs by the Government of India has steadily increased in the last decade.
2. To put the public sector banks in order, the merger of associate banks with the parent State Bank of India
has been affected.
Which of the statements given above is/are correct?
(a) 1 only (b) 2 only (c) Both 1 and 2 (d) Neither 1 nor 2

What was the purpose of Inter-Creditor agreement signed by Indian banks and financial institutions
recently?
(a) To lessen the Government of India’s perennial burden of fiscal deficit and current account deficit.
(b) To support the infrastructure projects of Central and State Governments
(c) To act as independent regulator in case of application for loans of Rs. 50 core or more
(d) To aim at faster resolution of stressed assets of Rs. 50 crore/ more which are under consortium lending

The Service Area Approach was implemented under the purview of

(a) Integrated Rural Development Programme
(b) Lead Bank Scheme
(c) Mahatma Gandhi National Rural Employment Guarantee Scheme
(d) National Skill Development Mission

The Chairman of public sector banks are selected Which of the following is not included in the assets
by the of a commercial bank in India?
(a) Banks Board Bureau (a) Advances
(b) Reserve Bank of India (b) Deposits
(c) Union Ministry of Finance (c) Investments
(d) Management of concerned bank (d) Money at call and short notice
Presented By: VINAY KUMAR
With reference to Urban Cooperative Banks in What is the importance of the term “Interest
India, consider the following statements: Coverage Ratio” of a firm in India?
1. They are supervised and regulated by local 1. It helps in understanding the present risk of a
boards set up by the State Governments. firm that a bank is going to give a loan to.
2. They can issue equity shares and preference 2. It helps in evaluating the emerging risk of a
shares. firm that a bank is going to give a loan to.
3. They were brought under the purview of the 3. The higher a borrowing firm’s level of Interest
Banking Regulation Act, 1949 through an Coverage Ratio, the worse is its ability to
Amendment in 1996. service its debt.
Which of the statements given above is/are Select the correct answer using the code given
correct/ below:
a) 1 only; b) 2 and 3 only; c) 1 and 3 only; d) 1,2,3 (a) 1 and 2 only; (b) 2 only; (c) 1 and 3 only (d) 1, 2, 3
In India, the Central Bank’s function as the Consider the following statements:
“lender of last resort” usually refers to which of 1. The Governor of the Reserve Bank of India (RBI) is
the following? appointed by the Central Government.
1. Lending to trade and industry bodies when 2. Certain provisions in the Constitution of India give
they fail to borrow from other sources. the Central Government the right to issue directions
2. Providing liquidity to the banks having a to the RBI in the public interest.
temporary crisis 3. The Governor of the RBI draws his power from the
3. Lending to governments to finance budgetary RBI Act.
deficits Which of the above statements are correct?
Select the correct answer using the code given a) 1 and 2 only
below b) 2 and 3 only
a) 1 and 2; b) 2 only c) 1 and 3 only
c) 2 and 3; d) 3 only d) 1, 2 and 3
Presented By: VINAY KUMAR
With reference to digital payments, consider the following What is the purpose of setting up Small Finance
statements: Banks (SFBs) in India?
(1) BHIM app allows the user to transfer money to anyone
(1) To supply credit to small business units
with a UPI-enabled bank account.
(2) While a chip-pin debit card has four factors of
(2) To supply credit to small and marginal farmers
authentication, BHIM app has only two factors of (3) To encourage young entrepreneurs to set up
authentication. business particularly in rural areas.
Which of the statements given above is/are correct? Select the correct answer using the code given
(a) 1 only below:
(b) 2 only (a) 1 and 2 only
(c) Both 1 and 2
(b) 2 and 3 only
(d) Neither 1 nor 2
(c) 1 and 3 only
Which of the following is the most likely consequence of
(d) 1, 2 and 3
implementing the ‘Unified Payments Interface (UPI)’?
(a) Mobile wallets will not be necessary for online The term ‘Core Banking Solutions’ is sometimes seen in
payments. the news. Which of the following statements best
(b) Digital currency will totally replace the physical describes/describe this term?
currency in about two decades. (1) It is a networking of a bank’s branches that enables
(c) FDI inflows will drastically increase. customers to operate their accounts from any branch of
(d) Direct transfer of subsidies to poor people will become
the bank on its network regardless of where they open
very effective.
their accounts.
What is/are the purpose/purposes of the Government’s (2) It is an effort to increase RBI’s control over
‘Sovereign Gold Bond Scheme’ and ‘Gold Monetization commercial banks through computerization.
Scheme’? (3) It is a detailed procedure by which a bank with huge
(1) To bring the idle gold lying with Indian households non-performing assets is taken over by another bank.
into the economy Select the correct answer using the code given below.
(2) To promote FDI in the gold and jewellery sector (a) 1 only
(3) To reduce India’s dependence on gold imports (b) 2 and 3 only
Select the correct answer using the code given below. (c) 1 and 3 only
(a) 1 only;(b) 2 and 3 only; (c) 1 and 3 only; (d) 1, 2 and 3 (d) 1, 2 and 3
 NON-BANKING FINANCIAL COMPANIES (NBFCs)
How NBFCs are • NBFC cannot accept demand deposits;
• NBFCs do not form part of the payment and settlement system
different from • NBFCs cannot issue cheques drawn on itself;
Banks? • Deposit insurance facility of DICGC is not available to depositors of NBFCs
Category of NBFC Regulation, Surveillance, Supervision& Enforcement
NBFCs registered under Section 45-IA of the RBI
Act, 1934 subject to certain conditions

Presented By: VINAY KUMAR

 Asset Finance Companies
 Investment Companies Reserve Bank of India
 Loan Companies
 Infrastructure Finance Companies
 Core-Investment Companies (CIC-ND-SI)
 Infrastructure Debt Fund
 Mortgage Guarantee Companies
 NBFC-Factors
Housing Finance Companies (HFCs) National Housing Bank (NHB)
Now, They would come under RBI’s regulation
Merchant Banker/Venture Capital Fund Company/ Securities and Exchange Board of India (SEBI)
stock-exchanges/ stock brokers
Insurance companies Insurance Regulatory and Development Authority of India
Chit Fund Companies are regulated by the and respective State Governments
Nidhi Companies, Mutual Benefit Companies Ministry of Corporate Affairs
Non- Banking Non-Financial Companies Regulation: Ministry of Corporate Affairs
Enforcement: respective State Governments
 The Factoring Regulation (Amendment) Act, 2021
The act was amended in line with the recommendations of UK Sinha Committee on MSMEs.
The key changes brought about are: • Factoring is an important source of liquidity
• Removal of principal business criteria has for MSMEs.
significantly increased the number of eligible NBFCs • Factoring is a transaction where an entity
that can undertake factoring business. sells its receivables (dues from a customer)
• The time period for registration of invoice and to a third party (a ‘factor’ like a bank or
satisfaction of charge upon it may be specified by NBFC) for immediate funds.
the Government by rules to streamline the process • All or part of invoice can be sold to a factor
and prevent frauds through dual financing. for getting money immediately at
• The amended Act and new Rules and Regulations competitive interest rate.
allow the concerned TReDS platform to register • The factor then collects payments from the
charge directly with Central Registry of buyer of goods and earns a commission in
Securitization Asset Reconstruction and Security the form of some interest.
Interest(CERSAI) on behalf of the factors using the • This is different from bill discounting. In
platform, so as to promote the use of TReDS and bill discounting, a bank or NBFC gives a
reduce procedural burden on factors. certain percentage of the total outstanding
• Definitions of “assignment”, “factoring business” value of invoices to seller and in most cases
and “receivables” have been amended. the seller has to take on the responsibility
• Regulation making power was given to RBI for the for payment of invoices by the buyer to the
manner of granting certificate of registration and factor.
the manner of filing of particulars of transactions • However, in case of factoring, the factor
with the CERSAI by TReDS entities on behalf of takes on the responsibility for the
factors. collection of invoices.
 FINANCIAL INTERMEDIATION ECOSYSTEM IN INDIA
Insurance
Pension
Forex
Banks Non-Banking Financial Market
Financial Mutual
Funds
Institutions
Money Capital Derivatives
Market Market Market
Call Money Options
NBFCs AIFIs
T-bills Primary Secondary
NABARD Market Market Futures
Primary Certificate of
Dealers Deposit (CD)
NHB Debt
Commercial
Papers (CP)
EXIM Equity
G-Secs/
Dated
SIDBI Securities
State
NaBFID Development
Loans (SDLs)

Presented By: VINAY KUMAR

Presented By: VINAY KUMAR
Presented By: VINAY KUMAR
 PRIMARY MARKET

Equity Debt Hybrids REITS

IPO Public Issue Convertibles InvITs

FPO Private
Placement
QIP

Rights
Issue
Preferential
Issue
 G-sec/Gilt securities Tradeable debt instrument issued
BONDS& G-SECs by the Central Govt./ State Govt.
Bond is a debt instrument in which an investor Cash Management Less than 91 days
loans money to an entity (Central Government Bills (CMB)
or State Government or Municipality or T-bills 91-day/182-day/364-days
Dated Securities or 1 year to 40 years
Corporate) which borrows the funds for a Government Bonds
defined period of time at a variable or fixed State Development 1 year to 10 years (40)
interest rate. Loans (SDL)

Par Value/ Face Value: The amount that is returned to the investor when the bond matures.
Coupon rate/ Interest Rate: Interest rate that the issuer of the bond promises to pay the bondholder
Yield: The annual percentage rate of return earned on a security.
• Yield is a function of a security’s purchase price and coupon interest rate.
Yield to maturity (YTM): It is the total return one would expect to receive if the security is being held
until maturity.
Yield Curve: The graphical relationship between yield and maturity among bonds of different
maturities and the same credit quality.
Points to remember:
• The yield of a bond is inversely related to its price.
• When the market price of the bond is less than its face value, i.e., the bond sells at a discount,
YTM > > coupon yield
• When the market price of the bond is more than its face value, i.e., the bond sells at a premium,
coupon yield > > YTM
• When the market price of the bond is equal to its face value, i.e., the bond sells at par,
YTM = coupon yield. Presented By: VINAY KUMAR
 CS(P)-2023

Benefits of joining global bond indices:

• Attract foreign inflows in the debt market,
reducing pressure on commercial banks to
absorb government bonds and build
goodwill for the Indian bond markets.
• Give strength and stability to Rupee and
help government in its market borrowing
programme.

RBI governor, in response to a

question on whether the RBI had
any reservations on the inclusion of
G-Secs in a global bond index,
admitted that inclusion could be a
double-edged sword.
Presented By: VINAY KUMAR
 NEW INITIATIVES IN G-SEC MARKET
INITIATIVE OBJECTIVE/ SIGNIFICANCE/ IMPACT
RBI Retail Direct • For individual investors
• to bid in primary auctions and buy and sell government bonds.
• The bonds on offer are G-Secs, SDLs, and sovereign gold bonds.
• No fee will be charged for any of the services provided under the scheme.
• Broaden Investor Base; channelize the domestic savings into Financial markets.
(Note: Unlike small saving schemes of the Union government such as the PPF/ NSSC, there
are no special tax benefits on direct purchase of government bonds.)
G-Sec Acquisition • It is intended to purchase government securities worth Rs 1 lakh crore in the first
Programme quarter of FY22.
(G-SAP) • It will ensure financial stability and prevent crowding out.
• Decline in bond yield acts as a fillip for the equities markets.
Long-term repo • To provide one-year to three-year money to banks at the prevailing repo rate, accepting
operations government securities with matching or higher tenure as the collateral.
(LTROs) • Provide longer duration funds to banks as compared to the short-term liquidity by
Liquidity Adjustment Facility (LAF) and the Marginal Standing Facility (MSF).
• 1-year and 3-year loans to banks at interest rate similar to the overnight repo.
Operation Twist • To bring down long-term bond yields.
• With inverse relationship between bond prices and yields, bonds purchase from RBI
pushes prices upwards and the yield comes down.
• Lower longer-term yields will make savings less desirable due to lower interest rates and
boost economy by making loans for home, vehicles etc., less expensive.
Presented By: VINAY KUMAR
 Sovereign Gold Bond Scheme Social Stock Exchanges (SSE)
• Introduced in the year 2015 to help reduce India’s SSE is a separate segment of the existing Stock
over dependence on gold imports. Exchange that can help Social Enterprise(s) to
• It also aims at changing the habits of Indians from raise funds from public through the stock
saving in physical form of gold to a paper form exchange mechanism.
with Sovereign backing. SSE identifies social enterprises as the ones
Eligibility: The bonds will be restricted for sale to engaged in creating positive impact in the
resident Indian entities, including individuals, HUFs, society.
trusts, universities and charitable institutions. These are the following two forms of social
Denomination and tenor: The bonds will be enterprises:
denominated in multiples of gram(s) of gold with a • Not-for-profit organization
basic unit of 1 gram. The tenor will be for a period of • For profit social enterprise
It provides a mechanism to preserve the social
8 years with exit option from the 5th year to be
and environmental mission of the organizations,
exercised on the interest payment dates.
giving the investors opportunities to mitigate
Minimum and Maximum limit: The minimum
socio-economic problems through investments
permissible investment limit will be 1 gram of gold,
that also have the potential to produce financial
while the maximum limit will be 4 kg for individual, 4
returns.
kg for Hindu Undivided Family and 20 kg for trusts and • Target population refers to underserved or less
similar entities per FY notified by the government privileged population segments or regions.
from time to time. Eligible activities: Eradicating hunger, poverty,
Collateral: malnutrition, inequality; Promoting education,
• Bonds can be used as collateral for loans. employability; livelihoods; Disaster
• The loan-to-value (LTV) ratio is to be set equal to management, including relief, rehabilitation and
ordinary gold loan mandated by the Reserve Bank reconstruction activities; Protection of national
from time to time. heritage, art etc.
• Insurance penetration is measured as the percentage of insurance premium to GDP
• Insurance density is calculated as the ratio of premium to population (measured in US$)
• While India is at par with international average in terms of insurance penetration for life
insurance, we lag behind in terms of non-life insurance.
• Globally, insurance penetration was 3.3% for the life segment (India 3.1%) and 4.1% for the
non-life segment (India 1%) in 2020.
Presented By: VINAY KUMAR
Consider the following statements: With reference to the Indian economy, consider the following
1. The Reserve Bank of India manages and statements :
services Government of India Securities 1) Commercial Paper is a short-term unsecured promissory
but not any State Government Securities. note.
2. Treasury bills are issued by the 2) Certificate of Deposit is a long-term Instrument issued by
Government of India and there are no RBI to a corporation.
treasury bills issued by the statement 3) ‘Call Money’ is short-term finance used for interbank
Governments. transactions.
3. Treasury bills offer are issued at a discount 4) “Zero-Coupon Bonds’ are the interest-bearing short-term
from the par value. bonds issued by the Scheduled Commercial Banks to
Which of the statements given above is/are corporations.
correct? Which of the statements given above is/are correct?
(a) 1 and 2 only (a) 1 and 2 only;
(b) 3 only (b) 4 only;
(c) 2 and 3 only (c) 1 and 3 only
(d) 1, 2 and 3 (d) 2, 3 and 4 only
Indian Government Bond yields are With reference to India, consider the following statements:
influenced by which of the following? 1) Retail investors through Demat account can invest in
1. Actions of the United States Federal Treasury Bills and Government of India Debt Bonds in the
Reserve primary market
2. Actions of the Reserve Bank of India 2) The “Negotiated Dealing System-Ordering Matching” is a
3. Inflation and short-term interest rates. government securities trading platform of the Reserve
Select the correct answer using the code Bank of India.
given below 3) The “Central Depository Services Ltd” is jointly promoted
a) 1 and 2 only; by the Reserve Bank of India and the Bombay Stock
b) 2 only; Exchange.
c) 3 only Which of the statements given above is/are correct?
d) d) 1, 2 and 3 Presented By: VINAY KUMAR a) 1 only; b) 1 and 2; c) 3 only; d) 2 and 3
In the context of the Indian economy, non-financial Despite being a high saving economy, capital formation
debt includes which of the following? may not result in significant increase in output due to
(1) Housing loans owed by households (a) weak administrative machinery;
(2) Amounts outstanding on credit cards (b) Illiteracy
(3) Treasury bills (c) high population density;
Select the correct answer using the code given below : (d) high capital-output ratio
(a) 1 only Consider the following statements:
(b) 1 and 2 only (1) Capital Adequacy Ratio (CAR) is the amount that
(c) 3 only banks have to maintain in the form of their own funds
(d) 1, 2 and 3 to offset any loss that banks incur if the account-
holders fail to repay dues.
Which of the following is issued by registered foreign
(2) CAR is decided by each individual bank.
portfolio investors to overseas investors who want Which of the statements given above is/are correct?
to be part of the Indian stock market without (a) 1 only; (b) 2 only; (c) Both 1 and 2;
registering themselves directly? (d) Neither 1 nor 2
(a) Certificate of Deposit
(b) Commercial Paper The establishment of ‘Payment Banks’ is being
(c) Promissory Note allowed in India to promote financial inclusion. Which
(d) Participatory Note of the following statement is correct in this context?
(1) Mobile telephone companies and supermarket chains
If the interest rate is decreased in an economy, it will that are owned and controlled by residents are eligible to
(a) decrease the consumption expenditure in the be promoters of Payment Banks.
(2) Payment Banks can issue both credit cards and debit
economy
cards.
(b) increase the tax collection of the Government (3) Payment Banks cannot undertake lending activities.
(c) increase the investment expenditure in the Select the correct answer using the code given below.
economy (a) 1 and 2 only; (b) 1 and 3 only; (c) 2 only;
(d) increase the total savings in the economy (d) 1, 2 and 3
 QUESTIONS IN CSP-2022
With reference to the Indian economy, consider the With reference to the ‘Banks Board Bureau (BBB)’,
following statements: which of the following statements are correct?
1) If the inflation is too high, Reserve Bank of India 1) The Governor of RBI is the Chairman of BBB.
(RBI) is likely to buy government securities. 2) BBB recommends for the selection of heads for
2) If the rupee is rapidly depreciating, RBI is likely to Public Sector Banks.
sell dollars in the market. 3) BBB helps the Public Sector Banks in developing
3) If interest rates in the USA or European Union were strategies and capital raising plans.
to fall, that is likely to induce RBI to buy dollars. Select the correct answer using the code given below:
Which of the statements given above are correct? (a) 1 and 2 only
(a) 1 and 2 only (b) 2 and 3 only
(b) 2 and 3 only (c) 1 and 3 only
(c) 1 and 3 only (d) 1, 2 and 3
(d) 1, 2 and 3 With reference to Non-Fungible Tokens (NFTs),
With reference to the Indian economy, what are the consider the following statements:
advantages of "Inflation-Indexed Bonds (IIBs)"? 1) They enable the digital representation of physical
1. Government can reduce the coupon rates on its assets.
borrowing by way of IIBs. 2) They are unique cryptographic tokens that exist on
2. IIBs provide protection to the investors from a blockchain.
uncertainty regarding inflation. 3) They can be traded or exchanged at equivalency
3. The interest received as well as capital gains on IIBs and therefore can be used as a medium
are not taxable. transactions. of commercial
Which of the statements given above are correct ? Which of the statements given above are correct?
(a) 1 and 2 only (a) 1 and 2 only
(b) 2 and 3 only (b) 2 and 3 only
(c) 1 and 3 only c) 1 and 3 only
(d) 1, 2 and 3 (d) 1, 2 and 3
 QUESTIONS IN CSP-2022
Consider the following statements: With reference to Convertible Bonds, consider the
following statements:
1. In India, credit rating agencies are
1. As there is an option to exchange the bond for
regulated by Reserve Bank of India. equity, Convertible Bonds pay a lower rate of
2. The rating agency popularly known as interest.
ICRA is a public limited company. 2. The option to convert to equity affords the
bondholder a degree of indexation to rising
3. Brickwork Ratings is an Indian credit
consumer prices.
rating agency. Which of the statements given above is/are correct?
Which of the statements given above are (a) 1only;
correct. (b) 2 only;
(c) Both 1 and 2;
(a) 1 and 2 only
(d) Neither 1 nor 2
(b) 2 and 3 only
(c) 1 and 3 only With reference to the Indian economy,
consider the following statements:
(d) 1, 2 and 3
1. A share of the household financial savings
In India, which one of the following is goes towards government borrowings.
responsible for maintaining price stability by 2. Dated securities issued at market related
controlling inflation? rates in auctions form a large component
(a) Department of Consumer Affairs of internal debt.
(b) Expenditure Management Commission Which of the above statements is/are correct ?
(c) Financial Stability and Development Council (a) 1 only (b) 2 only (c) Both l and 2 (d) Neither
(d) Reserve Bank of India 1 nor 2
 FISCAL POLICY
BUDGETING& TAXATION

Presented By: VINAY KUMAR

 Ministry of Finance

Department Department of
Department Investment and
of
of Revenue Public Asset
Expenditure
Management

Department Department Department

of Economic of Financial of Public
Affairs Services Enterprises

The Budget division of the department of economic affairs (DEA) in the Finance Ministry is the
nodal body responsible for producing the budget.
 BUDGET & RELATED DOCUMENTS
1. Annual Financial Statement (AFS) – Article 112
2. Demands for Grants (DG) – Article 113
3. Finance Bill – Article 110 (a)
4. Fiscal Policy Statements mandated under FRBM Act, 2003:
• Macro-Economic Framework Statement
• Medium-Term Fiscal Policy cum Fiscal Policy Strategy Statement
5. Expenditure Budget
6. Receipt Budget
7. Expenditure Profile
8. Budget at a Glance
9. Memorandum Explaining the Provisions in the Finance Bill
10.Output Outcome Monitoring Framework
11.Key Features of Budget 2023-24
12.Implementation of Budget Announcements, 2022-2023
The documents shown at Serial Nos. 5 to 12 are in the nature of explanatory
statements supporting the mandated documents with narrative in a user-
friendly format suited for quick or contextual references.
Union Budget 2017-18; 3 Changes:
• Advancement of date of presentation
(1st February)
• Merger of Railway budget with general
budget
• It has done away with Plan and non-
Plan expenditure.
• Fiscal Deficit (FD) is the adverse fiscal
balance which is a difference between the
Revenue Receipts Plus Non-Debt Capital
Receipts (NDCR) i.e. total of the non-debt
receipts and the total expenditure.
• Fiscal Deficit is reflective of the total
borrowing requirement of Government.
• Revenue Deficit (RD) refers to the excess of
revenue expenditure over revenue receipts.
• Effective Revenue Deficit (ERD) is the
difference between Revenue Deficit and
Grant-in-Aid for Creation of Capital Assets.
• Primary Deficit (PD) is measured as Fiscal
Deficit less interest payments.
• Effective Capital Expenditure (Eff-Capex)
refers to the sum of Capital Expenditure and
Grants-in-Aid for Creation of Capital Assets.
• The total expenditure in BE 2023-24 is
estimated at ₹45,03,097 crore of which total
capital expenditure is ₹10,00,961 crore.
• An increase in capital expenditure by 37.4
per cent over RE 2022-23.
• Effective Capital Expenditure, at
₹13,70,949 crore in BE 2023-24, shows an
increase of 30.1 per cent over RE 2022-23.
Nominal GDP for BE2023-2024 has been
projected at ₹3,01,75,065 crore assuming 10.5
% growth over the estimated Nominal GDP of
₹2,73,07,751 crore of FAE of FY 2022-23.
RUPEE COMES FROM
RUPEE GOES TO
 DISINVESTMENT
Policy of Strategic Disinvestment of Public Sector Enterprises:
Existing CPSEs, Public Sector Banks and Public Sector Insurance
Companies to be covered under it.
Two fold classification of Sectors to be disinvested:
Strategic Sector: Bare minimum presence of the public sector
enterprises and remaining to be privatised or merged or subsidiarized
with other CPSEs or closed.
The 4 sectors to come under it:
• Atomic energy, Space and Defence;
• Transport and Telecommunications;
• Power, Petroleum, Coal and other minerals;
• Banking, Insurance and financial services
Non- Strategic Sector: In this sector, CPSEs will be privatized,
otherwise shall be closed. A revised mechanism will be put in place
that will ensure timely closure of sick or loss making CPSEs.

In the Union Budget for 2023-24, the government has set a

disinvestment target of ₹51,000 crore, down nearly 21% from
the budget estimate for the current year and just ₹1,000 crore
more than the revised estimate. It is also the lowest target in
seven years.

2021-22 1,75,000 15,440 9%

Presented By: VINAY KUMAR 2022-23 65,000 31,050 48%
 DISINVESTMENT

Presented By: VINAY KUMAR

Presented By: VINAY KUMAR
 Asset Monetization
• The National Infrastructure Pipeline (NIP): infrastructure investment of Rs. 111 lakh crores during
FY 2020 to FY 2025.
• The NIP task force report has estimated that about 15-17 per cent of this outlay is to be met
through innovative and alternative initiatives such as asset monetisation, funding through a new
Development Finance Institution (DFI).
• The National Monetisation Pipeline (NMP) has been developed by NITI Aayog in consultation
with infrastructure line ministries.
• It is envisaged to serve as an essential roadmap for the asset monetisation of various brownfield
infrastructure assets across roads, railways, shipping, aviation, power, telecom, oil & gas, and
warehousing sectors.
• The NMP estimates aggregate monetisation potential of Rs.6 lakh crore through core assets of the
Central Government, over a four-year period, from FY 2022 to FY 2025.
• The top 5 sectors which capture around 83 per cent of the aggregate pipeline value include:
Roads (27 per cent) followed by Railways (25 per cent), Power (15 per cent), oil & gas pipelines
(8 per cent) and Telecom (6 per cent).
• The assets and transactions identified under the NMP are expected to be rolled out through a
range of instruments including direct contractual instruments such as public private partnership
concessions and capital market instruments such as Infrastructure Investment Trusts (InvIT) among
others.
• Monetization of core assets is steered by the NITI Aayog
• Monetization of non-core assets is steered by the DIPAM (Ministry of Finance)
• SPV: National Land Monetisation Corporation (NLMC) is being incorporated as a 100 per cent GoI
owned entity with an initial authorized share capital of Rs.5000 crore and subscribed share capital
of Rs. 150 crore.
Presented By: VINAY KUMAR
 Government Debt Profile

• Total liabilities of the Central Government include debt contracted against the Consolidated Fund of India,
technically defined as Public Debt, as well as liabilities in the Public Account.
• These liabilities include external debt (end-of-the financial year) at current exchange rate but exclude part of
NSSF liabilities to the extent of States’ borrowings from the NSSF and investments in public agencies out of the
NSSF, which do not finance Central Government deficit.
• At end-March 2021, Public Debt accounted for 89.9 per cent of total liabilities, while Public Account Liabilities,
which include National Small Savings Fund, State Provident Funds, Reserve Funds and Deposits and other
Accounts, constituted the remaining 10.1 per cent.
Of the Union Government's total net liabilities in end-March 2021, 95.1% were denominated in domestic
currency, while sovereign external debt constituted 4.9% implying low currency risk. Further, sovereign external
debt is entirely from official sources, which insulates it from volatility in the international capital markets.
Cess: It is a form of tax levied or collected by the Surcharge: It is an additional charge or tax levied on an
government for the development or welfare of a existing tax.
particular service or sector. • Unlike a cess, which is meant to raise revenue for a
• It is charged over and above direct and indirect taxes. temporary need, surcharge is usually permanent in
• Cess collected for a particular purpose cannot be nature.
used for or diverted to other purposes. • It is levied as a percentage on the income tax
• It is not a permanent source of revenue for the payable as per normal rates. In case no tax is due
government, and it is discontinued when the purpose for a financial year, then no surcharge is levied.
levying it is fulfilled. • The revenue earned via surcharge is solely retained
• Currently, the cess and surcharge collected by the by the Centre and, unlike other tax revenues, is not
Centre are not part of the tax devolution. shared with States.
• Examples: Education Cess, Swachh Bharat Cess, Krishi • Collections from surcharge flow into the
Kalyan Cess etc. Consolidated Fund of India.
Which among the following steps is most likely to be taken Consider the following statements
at the time of an economic recession? 1. The Fiscal Responsibility and Budget
a) Cut in tax rates accompanied by increase in interest rate Management (FRBM) Review Committee
b) Increase in expenditure on public projects Report has recommended a debt to GDP ratio
c) Increase in tax rates accompanied by reduction of of 60% for the general (combined)
interest rate government by 2023, comprising 40% for the
d) Reduction of expenditure on public projects
Central Government and 20% for the State
In the context of the Indian economy, non-financial debt Governments.
includes which of the following? 2. The Central Government has domestic
(1) Housing loans owed by households liabilities of 21% of GDP as compared to that
(2) Amounts outstanding on credit cards of war of GDP of the State 2 Governments.
(3) Treasury bills 3. As per the Constitution of India, it is
Select the correct answer using the code given below : mandatory for a State to take the Central
(a) 1 only; (b) 1 and 2 only; (c) 3 only; (d) 1, 2 and 3 Government’s consent for raising any loan if
Consider the following statements: the former owes any outstanding liabilities to
(1) Tax revenue as a percent of GDP of India has steadily the latter.
increased in the last decade. Which of the statements given above is correct?
(2) Fiscal deficit as a percent of GDP of India has steadily (a) 1 only;
increased in the last decade. (b) 2 and 3 only;
Which of the statements given above is/are correct ? (c) 1 and 3 only
(a) 1 only; (b) 2 only; (c) Both 1 and 2; (d) Neither 1 nor 2 (d) 1, 2 and 3
With reference to ‘Financial Stability and Development Council’, consider the following statements:
(1) It is an organ of NITI Aayog;
(2) It is headed by the Union Finance Minister;
(3) It monitors macroprudential supervision of the economy.
Which of the statements given above is/are correct?
(a) 1 and 2 only; (b) 3 only; (c) 2 and 3 only; (d) 1, 2 and 3
The term ‘Base Erosion and Profit Shifting’ is Which of the following is/are included in the
sometimes seen in the news in the context of capital budget of the Government of India?
(a) mining operation by multinational companies in (1) Expenditure on acquisition of assets like
resource-rich but backward areas roads, buildings, machinery, etc.
(b) curbing of the tax evasion by multinational (2) Loans received from foreign governments
companies (3) Loans and advances granted to the States and
(c) exploitation of genetic resources of a country by
Union Territories
multinational companies
Select the correct answer using the code given
(d) lack of consideration of environmental costs in the
planning and implementation of developmental projects below.
(a) 1 only;
‘Global Financial Stability Report’ is prepared by the (b) 2 and 3 only;
(a) European Central Bank (c) 1 and 3 only+
(b) International Monetary Fund (d) 1, 2 and 3
(c) International Bank for Reconstruction and
Development ‘Basel III Accord’ or simply ‘Basel III’, often seen in
(d) Organization for Economic Cooperation and the news, seeks to
Development (a) develop national strategies for the conservation
There has been a persistent deficit budget year after and sustainable use of biological diversity
year. Which action/actions of the following can be (b) improve banking sector’s ability to deal with
taken by the Government to reduce the deficit? financial and economic stress and improve risk
(1) Reducing revenue expenditure management
(2) Introducing new welfare schemes (c) reduce the greenhouse gas emissions but
(3) Rationalizing subsidies places a heavier burden on developed countries
(4) Reducing import duty (d) transfer technology from developed countries
Select the correct answer using the code given below. to poor countries to enable them to replace the
(a) 1 only; (b) 2 and 3 only use of chlorofluorocarbons in refrigeration with
(c) 1 and 3 only; (d) 1, 2, 3 and 4 harmless chemicals
There has been a persistent deficit budget year after year. If a commodity is provided free to the public by the
Which of the following actions can be taken by the Government, then
government to reduce the deficit? (a) the opportunity cost is zero.
(1) Reducing revenue expenditure (b) the opportunity cost is ignored.
(2) Introducing new welfare schemes (c) the opportunity costs is transferred from the
(3) Rationalizing subsidies consumers of the product to the tax-paying
(4) Expanding industries public.
Select the correct answer using the code given below. (d) the opportunity cost is transferred from the
(a) 1 and 3 only consumers of the product to the Government.
(b) 2 and 3 only
(c) 1 only With reference to Union Budget, which of the
(d) 1,2,3 and 4 following is/are covered under Non-Plan
Expenditure?
A decrease in tax to GDP ratio of a country indicates (1) Defence expenditure
which of the following? (2) Interest payments
(1) Slowing economic growth rate (3) Salaries and pensions
(2) Less equitable distribution of national income (4) Subsidies
Select the correct answer using the code given below. Select the correct answer using the code given
(a) 1 only; below.
(b) 2 only; (a) 1 only; (b) 2 and 3 only; (c) 1, 2, 3 and 4
(c) Both 1 and 2 (d) None
(d) Neither 1 nor 2
In India, deficit financing is used for raising
If the interest rate is decreased in an economy, it will resources for
(a) decrease the consumption expenditure in the economy (a) economic development
(b) increase the tax collection of the Government (b) redemption of public debt
(c) increase the investment expenditure in the economy (c) adjusting the balance of payments
(d) increase the total savings in the economy (d) reducing the foreign debt
EXTERNAL SECTOR

Presented By: VINAY KUMAR

 Component of FOREX reserve USD($)
(as on 28.04.2023) billions
1. Foreign Currency Assets (FCA) 519.5
2. Gold 45.7
3. Special Drawing Rights (SDR) 18.5
4. Reserve Tranche Position (RTP) 5.1
Total FOREX reserve (1+2+3+4) 588.8

As of end November 2021, India was the fourth largest FOREX reserves holder in the world after China,
Japan, and Switzerland.
FCAs comprise major currencies like USD, Yen, Euro, Pound Sterling etc., and valued in terms of USD.
• FCAs include the effect of appreciation or depreciation of non-US units like the EUR, GBP and JPY held in
the FOREX reserves.
Reserve Tranche Position (RTP) is a portion of the required quota of currency each member country must
provide to the IMF that can be utilized for its own purposes w/o service fee or economic reform conditions.
The SDR is an international reserve asset created to supplement its member countries’ official reserves.
Contributions to the IMF are made up of a combination of national currency and SDRs.
• IMF denominates its members' quotas in terms of SDRs, which is an IMF creation backed by a
specified basket of currencies. (2016: The SDR basket includes the USD, EUR, JPY, GBP and CNY)
• Together, the USD and EUR make up 70% of the basket’s value. SDR basket is reviewed every 5 yrs.
The foreign exchange reserves as a ratio to external debt crossed 100 percent after 11 years
since 2010, and stood at 107.1 per cent as at end-September 2021. Presented By: VINAY KUMAR
How do high levels of Forex reserves help a International Monetary Fund (IMF)
country’s economy?
1. World Economic Outlook (WEO)
• High levels of reserves reflect the strength and 2. Global Financial Stability Report
resilience of an economy. 3. Fiscal Monitor
• High levels of reserves are equivalent to India’s one
year of import bill (Import Cover). Which of the following organizations brings out
• High levels of reserves provide stability to rupee. the publication known as ‘World Economic
• They help to maintain liquidity in case of economic Outlook’?
crises. a. The International Monetary Fund
b. The United Nations Development Programme
• They will be helpful in meeting external obligations
c. The World Economic Forum
like international payments, commercial debts,
d. The World Bank
financing of imports and to absorb any unexpected
capital movements. Presented By: VINAY KUMAR Both Foreign Direct Investment (FDI) and
• A sizeable accretion in reserves led to an Foreign Institutional Investor (FII) are related to
investment in a country. Which one of the
improvement in external vulnerability indicators
following statements best represents an
such as foreign exchange reserves to total
important difference between the two?
external debt, short-term debt to foreign a) FII helps bring better management skills and
exchange reserves, etc. technology, while FDI only brings in capital
• India’s external sector is resilient to face any b) FII helps in increasing capital availability in
unwinding of the global liquidity arising out of the general, while FDI only targets specific
likelihood of faster normalisation of monetary sectors
policy by systemically important central banks, c) FDI flows only into the secondary market,
including the Federal Reserve, in response to while FII targets primary market
elevated inflationary pressures. d) FII is considered to be more stable than FDI
 Balance of It is a statistical statement that summarizes economic transactions between
Payment (BoP) residents and non-residents during a specific time period, usually one year.

Current Account Capital Account Financial Account

It includes flows of: It comprises credit and debit It reflects net acquisition and
 Goods and services transactions under non- disposal of financial assets and
 Primary income produced non-financial assets liabilities during a period.
 Secondary income between and sales of leases and licenses • It shows how the net lending to
residents and non-residents and capital transfers between or borrowing from the rest of
residents and non-residents. the world has occurred.
Goods/ Merchandise  Gross acquisition/disposal of Foreign Investment
Services non-produced, non-financial  Direct Investment (FDI)
 Travel assets o Equity/Debt
 Transportation  Capital Transfers  Portfolio Investment (FPI)
 Construction o Equity/Debt
 Insurance& Pension Financial Derivatives and Employee
 Software services Stock options
 Business services Other Investment
 Financial services  Loans- External assistance,
 Tele Communication services External Commercial Borrowings
Primary Income (ECB), Banking Capital
 Compensation of Employees  Other Equity- ADRs/GDRs
 Investment Income  Currency and Deposits
Secondary Income  Trade Credit and Advances
 Personal transfers/ Remittances  Special Drawing Rights (SDR)
 Financial/ Non-Financial Reserve Assets
Corporations, Households
Presented By: VINAY KUMAR
The BoP includes all transactions showing:
 Transactions in goods, services and income between an economy and the rest of the world,
 Changes of ownership and other changes in that economy’s monetary gold, special drawing
rights (SDRs), and financial claims on and liabilities to the rest of the world, and
 Unrequited transfers.
BALANCE OF PAYMENT (BOP)
CURRENT ACCOUNT CAPITAL ACCOUNT
I. Merchandise I. Foreign Investment
II. Invisibles A. Foreign Direct Investment (FDI)
A. Services B. Foreign Portfolio Investment (FPI)
B. Transfers II. Loans
C. Income A. External assistance
B. Commercial Borrowings
C. Short term Credit

Presented By: VINAY KUMAR

III. Banking Capital
IV. Rupee Debt Services
V. Other capital
Consider the following actions which the Government can take:
1) Devaluing the domestic currency.
2) Reduction in the export subsidy.
3) Adopting suitable policies which attract greater FDI and more funds from FIIs.
Which of the above action/actions can help in reducing the current account deficit?
(a.) 1 and 2; (b.) 2 and 3; (c.) 3 only; (d.) 1 and 3
 • Pro-active support of export
promotion agencies including Export
Inspection Council (EIC), Agricultural
India’s merchandise exports touched a record $418
billion in 2021-22, exceeding the government’s target & Processed Food Products Export
($ 400 billion) by about 5% and recording a 40% Development Authority (APEDA) and
growth over the previous year. export facilitating measures like
online issuance of certificates
required for exports, aided growth of
agricultural exports during the
pandemic.
• Under Transport and Marketing
Assistance (TMA) for specified
agriculture products scheme, the
rates of assistance were increased.
• Ministry of Civil Aviation launched
the Krishi UDAN (Ude Desh ka Aam
Nagarik) scheme in August 2020 to
Engineering goods, petroleum products, gems assist farmers in transporting
and jewellery, chemicals and readymade agricultural products on international
garments of all textiles were the top and national routes to improve their
five commodities exported from India value realisation
 Foreign Trade Policy (FTP) 2023 (w.e.f April 1, 2023)
FTP-2023 is a policy document which is based on Four Pillars of the Policy
continuity of time-tested schemes facilitating
Incentive to Remission,
exports as well as a document which is nimble and •
• Export promotion through collaboration:
responsive to the requirements of trade.
Exporters, States, Districts, Indian Missions
• It is based on principles of ‘trust’ and
• Ease of doing business, reduction in transaction
‘partnership’ with exporters.
cost and e-initiatives
The new FTP is introducing a one-time Amnesty • Emerging Areas: e-Commerce; Developing
Scheme for exporters to close the old pending Districts as Export Hubs and streamlining Special
authorizations and start afresh. Chemicals, Organisms, Materials, Equipment,
and Technologies (SCOMET) policy.
• One of the key objectives of the FTP 2023 is to
process re-engineering and automation to
facilitate ease of doing business for exporters.
• The policy emphasizes the use of automated IT
systems with risk management systems for
various approvals and codifies implementation
mechanisms in a paperless, online environment.
• The policy also reduces fee structures and IT-
based schemes to make it easier for MSMEs and
others to access export benefits.
 Initiatives to enhance Trade
Focus on Agricultural Agricultural exports achieved the highest ever export in FY22 reaching US$ 37.8 billion; FY 23
Products during April-November exports of US$ 26.8 billion; Effective agriculture export policy; Pro-active
support of export promotion agencies including Export Inspection Council, Plantation Boards,
APEDA, and export facilitating measures like online issuance of certificates required for exports,
aided growth of agricultural exports.
Interest Equalisation To give benefit in the interest rates being charged by the banks to the exporters on their pre- and
Scheme post-shipment rupee export credits.
Remission of Duties The scheme seeks remission of Central, State and Local duties/taxes/levies at different stages at
and Taxes on the Central, State, and local level, which are incurred in the process of manufacturing and
Exported Products distribution of exported products, but are currently not being refunded under any other duty
(RoDTEP) scheme remission scheme.
Export Credit Export Credit Guarantee Corporation (ECGC) supports Indian exporters and banks by providing
Guarantee export credit insurance services. ECGC provides insurance cover on the export consignment to
protect exporters from the consequences of the payment risks. It also provides Export Credit
Insurance to Banks (ECIB) to protect the Banks from losses on account of export credit given to
exporters due to the risks of insolvency and/or protracted default of the exporter borrower.
Krishi Udan Scheme Launched in 2020 on international and national routes to assist farmers in transporting
agricultural products so that it improves their value realisation. Krishi Udan 2.0 was launched in
2021 enhancing the existing provisions, mainly focusing on transporting perishable food products
from the hilly areas, North-Eastern states, and tribal areas.
Trade Infrastructure Since FY18; to assist Central and State Government Agencies in the creation of appropriate
for Export Scheme infrastructure for the growth of exports from the States. The Scheme provides financial assistance
in the form of grant-in-aid to Central/State Government owned agencies for setting up or for up-
gradation of export infrastructure as per the guidelines of the Scheme.
Districts as Export DEH-ODOP is aimed at targeting export promotion, manufacturing, and employment generation at
Hubs (DEH) – One the grassroots level, making the States and Districts meaningful stakeholders and active
District One Product participants. India as an export powerhouse; AatmNirbhar mission; Vocal for Local.
 EXTERNAL SECTOR- SOME POINTS TO NOTE!
1. Supply Chain Resilience Initiative (SCRI): India and Australia are partners in the trilateral arrangement
along with Japan which seeks to enhance the resilience of supply chains in the Indo-Pacific Region.
2. 2022: India signed Free Trade Agreements (FTAs) with UAE and Australia. This aims to provide greater
market access with reduction in tariff/ non-tariff barriers on goods and services and make the exporters
competitive.
3. Export Preparedness Index: By NITI Aayog (in partnership with the Institute of Competitiveness), to
evaluate States’ potentials and capacities. It will guide all stakeholders towards strengthening the export
ecosystem at both the national and sub-national levels. The index entails four pillars (Policy; Business
Ecosystem; Export Ecosystem; Export Performance), eleven sub pillars (Export Promotion Policy;
Institutional Framework; Business Environment; Infrastructure; Transport Connectivity; Access to Finance;
Export Infrastructure; Trade Support; R&D Infrastructure; Export Diversification; and Growth Orientation)
and sixty indicators and covers across 28 states and 8 UTs (Coastal, Land-locked, Himalayan and UT/City-
states).
4. India has so far concluded 13 FTAs and 6 Preferential Trade Agreements (PTAs). The most recent in the list
are the India-UAE Comprehensive Economic Partnership Agreement (CEPA) which was signed on 18
February 2022 and officially entered into force on 1 May 2022 and the India-Australia Economic
Cooperation and Trade Agreement (Ind-Aus ECTA), which was signed on 2 Apr 2022 and entered into
force on 29 Dec 2022.
5. India is presently engaged in FTA negotiations with some of its trading partners, notable among these FTAs
are – (i) India-UK FTA, (ii) India-Canada CEPA/ Early Progress Trade Agreement (EPTA), (iii) India-EU FTA.
6. India has also initiated action to review some of the existing FTAs, namely, India-Singapore CECA, India-
South Korea CEPA, and India-ASEAN Trade in Goods Agreement and initiated discussions on scoping for the
CECA with Australia, as envisaged under Ind-Aus ECTA
 Remittances

While India tops the list of countries benefitting from remittances, its
$100 billion received amounts to only 2.9% of its 2022 GDP.
• Remittances are the second largest major source of external financing after service export,
which contribute to narrowing the CAD and has always been a stable constituent of the BoP.
• India has the largest emigrant population and is the top remittance recipient country with
remittances anticipated to reach a milestone of US$100 billion in 2022 according to the
World Bank.
• Remittances have benefitted from a gradual structural shift in Indian migrants’ key
destinations from largely low-skilled, informally employment in the Gulf Cooperation Council
(GCC) countries to a dominant share of high-skilled jobs in high-income countries such as the
United States, the United Kingdom, and East Asia (Singapore, Japan, Australia, New Zealand).
 FOREIGN INVESTMENT IN INDIA- FDI/FPI
• Foreign investments into India come via Foreign Direct Investment (FDI) and the foreign portfolio
investment (FPI) route.
• While FDI is regulated by the DPIIT under the ministry of Commerce and Industry, FPI comes
through the stock market and is regulated by Securities and Exchange Board of India (SEBI).
• Arvind Mayaram panel (2014) has suggested the following definition for FDI/FPI, which was
approved by the Government.
FDI  Foreign investment of 10 per cent or more in a listed company will now be treated as FDI.
 FDI reflects a lasting interest and long—term relationship, while under FPI the relationship
between the investor and the company remains largely anonymous.

FPI  If the stake is not raised to 10 per cent or above, then the investment can be treated as FPI.
 It further said that any investment by way of equity shares, compulsorily convertible
preference shares/debentures less than 10 per cent should treated as FPI.
 FPI includes portfolio investors like foreign institutional investors (FIIs) and qualified foreign
investors (QFIs).

1. Foreign institutional investors are allowed to invest in all equity securities traded in the primary
and secondary markets.
2. Foreign institutional investors have also been permitted to invest in Government of India treasury
bills and dated securities, corporate debt instruments and mutual funds.
3. The NRIs have the flexibility of investing under the options of repatriation and non-repatriation.
4. Similarly, Indian entities can also make investment in an overseas joint venture or in a wholly-
owned subsidiary abroad up to a certain limit.
Presented By: VINAY KUMAR
 FDI ENTRY ROUTES INTO INDIA

Automatic Route Government Route

Under the Automatic Route, the non-resident Prior to investment, approval from the GoI is
investor or the Indian company does not required. Proposals for foreign investment under
require any approval from Government of India Government route are considered by respective
for the investment. Administrative Ministry/ Department.

FDI-Prohibited sectors Sectors Not Open To Private Sector

1. Lottery Business including Government/ Investment
private lottery, online lotteries, etc.*
1. Atomic energy
2. Gambling and Betting including casinos*
3. Chit Funds 2. Railway operations (other than
4. Nidhi Company permitted activities mentioned under
5. Trading in Transferable Development Rights the Consolidated FDI policy)
6. Real Estate Business/ Construction of farm
Pakistan is not allowed to invest in sensitive
houses (doesn’t include development of
town shops, construction of residential or sectors such as defence, space and atomic
commercial premises, roads or bridges and energy.
REITs registered and regulated under the
Countries such as Bangladesh and Pakistan
SEBI)
7. Manufacturing of cigars, cheroots, could invest only after government approvals
cigarillos& cigarettes, of tobacco/ of and only in select sectors.
tobacco substitutes. Presented By: VINAY KUMAR
 FDI& STAKEHOLDERS
1. The Foreign Investment Facilitation Portal (FIFP):
• It is the online single point interface of the GoI for investors to facilitate FDIs.
• This portal is being administered by the DPIIT, Ministry of Commerce & Industry.
• This portal will continue to facilitate the single window clearance of applications which are through
approval route.
2. The Department for Promotion of Industry and Internal Trade (DPIIT)
Functions of DPIIT:
 Formulation and implementation of industrial policy and strategies for industrial development in
conformity with the development needs and national objectives;
 Monitoring the industrial growth, in general, and performance of industries specifically assigned to
it, in particular, including advice on all industrial and technical matters;
 Formulation of FDI Policy and promotion, approval and facilitation of FDI;
 Encouragement to foreign technology collaborations at enterprise level and formulating policy
parameters for the same;
 Formulation of policies relating to Intellectual Property Rights in the fields of Patents, Trademarks,
Industrial Designs and Geographical Indications of Goods and administration of regulations, rules
made there under;
 Promoting industrial development of industrially backward areas and the North Eastern Region
including International Co-operation for industrial partnerships and
 Promotion of productivity, quality and technical cooperation.
3. Concerned Ministry or Department
4. RBI- for FEMA, 1999 compliance
5 Ministry of Home affairs- for FDI from Pakistan& Bangladesh need approval its approval
6. Cabinet Committee on Economic Affairs (CCEA) - FDI exceeding INR 50bn (approx. $ 775 million) shall
be placed before CCEA for approval.
Presented By: VINAY KUMAR
 Recent Changes to India’s FDI Policy
Coal and Lignite Mining 100% FDI under the automatic route has been permitted in:
 Indian entities engaged in coal and lignite mining for captive
consumption for power projects, iron and steel and cement units and
for other activities.
 Indian entities engaged in the sale of coal, coal mining activities
including associated processing infrastructure.
The rationale behind this amendment is to attract international players to
create a competent and efficient coal market in India.
Manufacturing& FDI in manufacturing and Contract Manufacturing is under the 100%
Contract Manufacturing automatic route.
Single Brand Retail Trade All FDIs in SBRT are permitted 100% under the automatic route.
(SBRT) Mandatory ‘Local Sourcing’ (30%) norms have been relaxed.
Digital Media FDI policy permits 26% FDI under the government approval route in
entities that are engaged in uploading / streaming of news & current
affairs through digital media.
Defence Manufacturing Government increased FDI in Defence manufacturing under the automatic
route from 49 per cent to 74 per cent.

Presented By: VINAY KUMAR

Recently Government dropped FDIs from neighbours from automatic approval list!
• People’s Bank of China raised it stake in HDFC Co. (Housing Finance Development
Corporation) from 0.8% to 1.01% in the March quarter.
• Heeding to the concerns raised by many that India's systemically-important companies
could be susceptible to takeover by foreign investors, Indian government took this
decision.
• "An entity of a country, which shares land border with India or where the beneficial
owner of an investment into India is situated in or is a citizen of any such country, can
invest only under the government route," government said.
• The move is mainly intended to prevent opportunistic takeovers of Indian companies
by Chinese government entities or private corporations.

Presented By: VINAY KUMAR

• The real effective exchange rate (REER) compares a nation's currency value against the weighted
average of the currencies of its major trading partners.
• It is an indicator of the international competitiveness of a nation in comparison with its trade
partners.
• The formula is weighted to take into account the relative importance of each trading partner to
the home country.
• An increasing REER indicates that a country is losing its competitive edge.
• A nation's nominal effective exchange rate (NEER), adjusted for inflation in the home country,
equals its real effective exchange rate (REER).
 NEW SERIES OF REER WITH BASE YEAR 2015-16
The RBI released new series of REER with base year 2015-16.
WHAT IS REAL EFFECTIVE EXCHANGE RATE?
•It is the standard measure used globally to gauge the
value of the home currency against the weighted average
value of the currencies of its trading partners divided by a
price deflator or index.
•REER above 100 denotes that the home currency is
overvalued and more expensive compared to its
competitors.
•The 36-currency trade weighted REER computed by the
RBI has been well above the 100 mark, moving close to 120
in 2017-18.
WHAT WAS THE PREVIOUS PRACTICE?
• RBI disseminated 6-currency and
• 36-currency based trade weighted and export weighted REER and NEER.
• NEER is Nominal Effective Exchange Rate, which is REER not adjusted for inflation.
• The previous series had 2004-05 as the base year.
WHAT CHANGED NOW?
• The new series of REER released in January 2021 has the base year as 2015-16.
• The basket has been expanded from 36 to 40 currencies.
• The computation of trade weights has also been improved.
• The new basket represents 88% of India’s total trade as against 84% in the earlier 36-currency
basket. Presented By: VINAY KUMAR
The indices NEER and REER are used as indicators of external competitiveness. NEER is the
weighted average of bilateral nominal exchange rates of the home currency in terms of foreign
currencies, weights being based on the average of India’s bilateral trade (exports plus imports)
with countries/regions represented by the 6/40 currencies during the preceding three years.
The REER, defined as a weighted average of nominal exchange rates adjusted for relative price
differential between the domestic and foreign countries, relates to the PPP hypothesis.
Commercial borrowings are the largest component of external debt (US$ 218.8 billion). The NRI
deposits, the second largest component (US$ 141.6 billion). The short-term trade credit, the third
largest component (US$ 97.4 billion). Together, these three components constitute 77.2 percent of
total external debt as at end-September, 2021.

Currency composition of external debt: US dollar denominated debt remained the

largest component of India’s external debt, with a share of 51 per cent at end-September
2021, followed by the Indian rupee.
 UNCTAD - World Investment Report
As per the report, India jumped from 12th position in 2018 to 9th in 2019 in the list of the world’s
largest FDI recipients.
What is World Investment Report?
The World Investment Report is an annual report released by UNCTAD and it focuses on trends in
foreign direct investment (FDI) worldwide, at the regional and country levels and emerging measures
to improve its contribution to development.
Details of the Report:
• Foreign direct investment (FDI) into India may decline sharply in 2020 because of the impact of the
coronavirus pandemic and the consequent lockdown measures, supply chain disruptions and
economic slowdown.
• FDI inflows to India, Asia’s third largest economy, jumped over 20% to $51 billion in 2019.
• The report said India’s most sought-after industries, which include professional services and the
digital economy, could see a faster rebound as global venture capital firms and technology
companies continue to show interest in India’s market through acquisitions.

United Nations Conference on Trade and Development (UNCTAD):

UNCTAD is a permanent intergovernmental body under the UN. HQ: Geneva, Switzerland.
UNCTAD promotes the development-friendly integration of developing countries into the world
economy.
UNCTAD fulfils this mandate through three key functions:
• Providing a forum for intergovernmental deliberations.
• Undertaking research, policy analysis and data collection to inform these deliberations
• Providing technical assistance to developing countries.
Presented By: VINAY KUMAR
 NIMZ vs. SEZ UNION BUDGET 2022-23
• National Investment & Manufacturing Zones Export Promotion
(NIMZs) are one of the important instruments
Special Economic Zones Act to be replaced
of National Manufacturing Policy, 2011.
• NIMZs are envisaged as large areas of developed with a new legislation to enable States to
land with the requisite eco-system for promoting become partners in ‘Development of
world class manufacturing activity. Enterprise and Service Hubs’
• So far, three NIMZs namely Prakasam (Andhra
Pradesh), Sangareddy (Telangana) and • To incentivize exports, exemptions
Kalinganagar (Odisha) have been accorded being provided on items such as
final approval and 13 NIMZs have been embellishment, trimming, fasteners,
accorded in-principle approval. buttons, zipper, lining material,
• Besides these, eight Investment Regions along specified leather, furniture fittings and
the Delhi Mumbai Industrial Corridor (DMIC)
packaging boxes.
project have also been declared as NIMZs.
• The main objective of Special Economic Zones • Duty being reduced on certain inputs
is promotion of exports, while NIMZs are required for shrimp aquaculture - to
based on the principle of industrial growth in promote its exports
partnership with States and focuses on
manufacturing growth and employment
generation.
• NIMZs are different from SEZs in terms of size,
level of infrastructure planning, governance
structures related to regulatory procedures,
and exit policies.
Presented By: VINAY KUMAR
 WORLD TRADE ORGANIZATION (WTO)

 WTO is the only global international organization dealing with the rules of trade between nations.
 At its heart are the WTO agreements, negotiated and signed by the bulk of the world’s trading
nations and ratified in their parliaments.
 The goal is to help producers of goods and services, exporters, and importers conduct their business.
Presented By: VINAY KUMAR
 Most-Favoured Nation (MFN) and Non-discriminatory Treatment
Binding tariffs should be applied equally to all trading partners and Imported products should not be
subjected to internal taxes or other changes in excess of those imposed on domestic goods, and should
be accorded treatment no less favourable than domestic goods under domestic laws and regulations.
WTO compliant contingent Trade protection measures
1. Anti-Dumping Duties • Article VI of GATT and ‘the Anti-Dumping Agreement’ of WTO
• Actions taken against dumping (selling at an unfairly low price)
2. Countervailing Duties • Agreement on Subsidies and Countervailing Measures [SCM Agreement]
• special “countervailing” duties to offset the subsidies
3. Emergency Safeguard • The Agreement on Safeguards (“SG Agreement”) and Article XIX of GATT.
Measures • “emergency" actions with respect to increased imports of particular products,
where such imports have caused or threaten to cause serious injury to the
importing Member's domestic industry.
• Suspension of concessions or obligations, can consist of quantitative import
restrictions or of duty increases to higher than bound rates.
Directorate General of Trade Remedies (DGTR)
 It is an integrated single window agency for providing comprehensive and swift trade defence
mechanism in India.
 DGTR deals with Anti-dumping, CVD and Safeguard measures.
 It also provides trade defence support to our domestic industry and exporters in dealing with increasing
instances of trade remedy investigations instituted against them by other countries.
 DGTR provides a level playing field to the domestic industry against the adverse impact of the unfair
trade practices like dumping and actionable subsidies from any exporting country in a transparent and
time bound manner.
 DGTR functions as an attached office of Department of Commerce, Ministry of Commerce and Industry.
Presented By: VINAY KUMAR
 Free Trade Agreement (FTA)
• FTAs are arrangements between two or more
countries or trading blocs that primarily agree to
reduce or eliminate customs tariff and non-tariff
barriers on substantial trade between them.
• FTAs, normally cover trade in goods (such as
agricultural or industrial products) or trade in services
(such as banking, construction, trading etc.), but can
also cover other areas such as intellectual property
rights (IPRs), investment, government procurement etc.

Other types of trade agreements:

• Preferential Trade Agreement (PTA): In a PTA, two or more partners agree to reduce tariffs on agreed
number of tariff lines. For example, India MERCOSUR PTA.
• Comprehensive Economic Cooperation Agreement (CECA) and Comprehensive Economic Partnership
Agreement (CEPA): These terms describe agreements which consist of an integrated package on goods,
services and investment along with other areas including IPR, competition etc. E.g., India Korea CEPA.
• Custom Union: In a Customs union, partner countries may decide to trade at zero duty among
themselves, however they maintain common tariffs against rest of the world. An example is Southern
African Customs Union (SACU).
• Common Market: A common market is a Customs Union with provisions to facilitate free movements of
labour and capital, harmonize technical standards across members etc. E.g., European Common Market
• Economic Union: Economic Union is a Common Market extended through further harmonization of
fiscal/monetary policies and shared executive, judicial & legislative institutions. European Union (EU) is
an apt example of this type. Presented By: VINAY KUMAR
 World Bank publishes:
• Global Financial Development Reports
• World Development Reports
• Global Economic Prospects.
Note: WB discontinued the Ease of Doing Business Index, recently.
The International Bank for The International Bank for Reconstruction and Development (IBRD)

WORLD BANK
Reconstruction and Development lends to governments of middle-income and creditworthy low-
income countries.
The International Development The International Development Association (IDA) provides interest-
Association free loans — called credits — and grants to governments of the
poorest countries.
The International Finance The International Finance Corporation (IFC) is the largest global
Corporation development institution focused exclusively on the private sector.
We help developing countries achieve sustainable growth by
financing investment, mobilizing capital in international financial
markets, and providing advisory services to businesses and
governments.
The Multilateral Investment The Multilateral Investment Guarantee Agency (MIGA) was created
Guarantee Agency in 1988 to promote foreign direct investment into developing
countries to support economic growth, reduce poverty, and improve
people’s lives. MIGA fulfills this mandate by offering political risk
insurance (guarantees) to investors and lenders.
The International Centre for The International Centre for Settlement of Investment Disputes
Settlement of Investment Disputes (ICSID) provides international facilities for conciliation and
arbitration of investment disputes. Presented By: VINAY KUMAR
 Asian Development Asian Infrastructure New Development
Bank (ADB) Investment Bank (AIIB) Bank (NDB)
• Founded in 1966. • Established in Dec’ 2015 • NDB is an initiative of
• Headquarters: Manila, • Commenced operation in Jan’ BRICS countries signed into
Philippines 2016 Agreement during the sixth
• It has 67-member countries, • Headquarters: Beijing. BRICS summit in Fortaleza
including - 48 from the Asian • Currently it has 93 approved in 2014 and it came into
region. members with India as a existence as a legal entity
• India was a founding founding member. in Ufa Summit in 2015.
member of ADB but • India is the second largest • The 5 member states
operations in the country shareholder in AIIB with 7.5% (Brazil, Russia, India, China
began only in 1986, when voting shares while China and South Africa) have an
India opted to become a holds 26.06% voting shares equal share.
borrowing member. being the largest. • NDB to mobilize resources
• It also proposed to invest for infrastructure and
Top 5 shareholders: USD200 million in the sustainable development
• Japan (15.6%), National Investment and projects in BRICS and other
• USA (15.6%), Infrastructure Fund (NIIF). emerging market
• China (6.4%) economies and to
• India (6.3%) complement the existing
• Australia (5.8%). efforts of multilateral/
regional financial
institutions.
Presented By: VINAY KUMAR • Headquarter: Shanghai.
With reference to the International Monetary and With reference to Balance of Payments, which of
Financial Committee (IMFC), consider the following the following constitutes/constitute the Current
statements : Account?
(1) IMFC discusses matters of concern affecting the (1) Balance of trade
global economy and advises the International (2) Foreign assets
(3) Balance of invisibles
Monetary Fund (IMF) on the direction of its work.
(4) Special Drawing Rights
(2) The World Bank participates as an observer in
Select the correct answer using the code given
IMFC’s meetings. below.
Which of the statements given above is/are correct? (a) 1 only; (b) 2 and 3; (c) 1 and 3; (d) 1, 2 and 4
(a) 1 only
(b) 2 only Which one of the following effects of creation of
(c) Both 1 and 2 black money in India has been the main cause of
(d) Neither 1 nor 2 worry to the Government of India?
a) Diversion of resources to the purchase of real
Which of the following best describes the term estate and investment in luxury housing
b) Investment in unproductive activities and
‘import cover’, sometimes seen in the news?
purchase of precious stones, jewellery, gold
(a) It is the ratio of value of imports to the Gross etc.
Domestic Product of a country c) Large donations to political parties and growth
(b) It is the total value of imports of a country in a of regionalism
year d) Loss of revenue to the State Exchequer due to
(c) It is the ratio between the value of exports tax evasion
and that of imports between two countries
Recently, which one of the following currencies has
(d) It is the number of months of imports that been proposed to be added to the basket of the
could be paid for by a country’s international IMF’s SDR?
reserves (a) Rouble (b) Rand (c) Indian Rupee (d) Renminbi
Presented By: VINAY KUMAR
Q. Consider the following: If another global financial crisis happens in the near
1. Foreign currency convertible bonds future, which of the following actions/policies are most
2. Foreign institutional investment with certain likely to give some immunity to India?
conditions (1) Not depending on short-term foreign borrowings
3. Global depository receipts (2) Opening up to more foreign banks
4. Non-resident external deposits (3) Maintaining full capital account convertibility
Which of the above can be included in Foreign Select the correct answer using the code given below :
Direct Investments? (a) 1 only; (b) 1 and 2 only; (c) 3 only; (d) 1, 2 and 3
a) 1, 2 and 3; b) 3 only; c) 2 and 4; d) 1 and 4 Which one of the following is not the most likely
Q. Consider the following statements: measure the Government/RBI takes to stop the slide of
The effect of the devaluation of a currency is Indian rupee?
that it necessarily a) Curbing imports of non-essential goods and
1. Improves the competitiveness of the promoting exports
domestic exports in the foreign markets b) Encouraging Indian borrowers to issue rupee-
2. Increase the foreign value of the domestic denominated Masala Bonds
currency c) Easing conditions relating to external commercial
3. Improves the trade balance borrowing
Which of the above statements is/are d) Following an expansionary monetary policy
a) 1 only; b) 1 and 2; c) 3 only; d) 2 and 3 In the context of India, which of the following factors
Which of the following is issued by registered is/are contributors to reducing the risk of a currency
foreign portfolio investors to overseas investors who crisis?
want to be part of the Indian stock market without (1) The foreign currency earnings of India’s IT sector
registering themselves directly? (2) Increasing the government expenditure
(a) Certificate of Deposit (3) Remittances from Indians abroad
(b) Commercial Paper Select the correct answer using the code given below.
(c) Promissory Note (a) 1 only; (b) 1 and 3 only; (c) 2 only; (d) 1, 2 and 3
(d) Participatory Note Presented By: VINAY KUMAR
Convertibility of rupee implies Which of the following constitute Capital Account?
a) being able to convert rupee notes into gold (1) Foreign Loans
b) allowing the value of the rupee to be fixed by (2) Foreign Direct Investment
market forces (3) Private Remittances
c) freely permitting the conversion of rupee to (4) Portfolio Investment
other currencies and vice versa Select the correct answer using the codes given
d) developing an international market for below.
currencies in India (a) 1, 2 and 3
(b) 1, 2 and 4
With reference to Balance of Payments, which of the (c) 2, 3 and 4
following constitutes/constitute the Current (d) 1, 3 and 4
Account?
(1) Balance of trade Which one of the following groups of items is
(2) Foreign assets included in India’s foreign-exchange reserves?
(3) Balance of invisibles a) Foreign-currency assets, Special Drawing Rights
(4) Special Drawing Rights (SDRs) and loans from foreign countries
Select the correct answer using the code given b) Foreign-currency assets, gold holdings of the RBI
below. and SDRs
(a) 1 only; (b) 2 and 3; (c) 1 and 3; (d) 1, 2 and 4 c) Foreign-currency assets, loans from the World
Bank and SDRs
The balance of payments of a country is a systematic d) Foreign-currency assets, gold holdings of the RBI
record of and loans from the World Bank
(a) all import and transactions of a during a given
period normally a year With reference to Asian Infrastructure Investment Bank
(b) goods exported from a country during a year (AIIB), which of the statements given above is/are correct?
1. AIIB has more than 80 member nations.
(c) economic transaction between the government 2. India is the largest shareholder in AIIB.
of one country to another 3. AIIB does not have any members from outside Asia.
(d) capital movements from one country to another (a) 1 only (b) 2 and 3 only (c) 1 and 3 only (d) 1, 2 and 3
Presented By: VINAY KUMAR
 QUESTIONS IN CSP-2022
"Rapid Financing Instrument" and "Rapid Credit With reference to the Indian economy, consider the
Facility" are related to the provisions of lending by following statements :
which one of the following? 1. An increase in Nominal Effective Exchange Rate
(a) Asian Development Bank (NEER) indicates the appreciation of rupee.
(b) International Monetary Fund 2. An increase in the Real Effective Exchange Rate
(c) United Nations Environment Programme Finance (REER) indicates an improvement in trade
Initiative competitiveness.
(d) World Bank 3. An increasing trend in domestic inflation relative to
inflation in other countries is likely to cause an
Which one of the following situations best reflects increasing divergence between NEER and REER.
"Indirect Transfers" often talked about in media Which of the above statements are correct?
recently with reference to India? (a) 1 and 2 only
(a) An Indian company investing in a foreign enterprise (b) 2 and 3 only
and paying taxes to the foreign country on the (c) 1 and 3 only
profits arising out of its investment (d) 1, 2 and 3
(b) A foreign company investing in India and paying
taxes to the country of its base on the profits arising With reference to the "G20 Common Framework",
out of its investment consider the following statements:
(c) An Indian company purchases tangible assets in a 1. It is an initiative endorsed by the G20 together with
foreign country and sells such assets after their the Paris Club.
value increases and transfers the proceeds to India 2. It is an initiative to support Low Income Countries
(d) A foreign company transfers shares and such shares with unsustainable debt.
derive their substantial value from assets located in Which of the statements given above is/are correct?
India (a) 1 only (b) 2 only (c) Both 1 and 2 (d) Neither 1 nor 2
‘Indirect transfers’ refer to situations where when foreign entities own shares or assets in India, the shares
of such foreign entities are transferred instead of a direct transfer of the underlying assets in India.
 QUESTIONS IN CSP-2022
With reference to the expenditure made by an Consider the following statements:
organisation or a company, which of the following 1. Tight monetary policy of US Federal Reserve
statements is/are correct? could lead to capital flight.
1. Acquiring new technology is capital expenditure. 2. Capital flight may increase the interest cost of
2. Debt financing is considered capital expenditure, firms with existing External Commercial
while equity financing is considered revenue Borrowings (ECBs).
expenditure. 3. Devaluation of domestic currency decreases the
Select the correct answer using the code given currency risk associated with ECBs.
below: Which of the statements given above are correct?
(a) 1 only (a) 1 and 2 only
(b) 2 only (b) 2 and 3 only
(c) Both 1 and 2 (c) 1 and 3 only
(d) Neither 1 nor 2 (d) 1, 2 and 3

Capital expenditure includes

money spent on the following:
• Acquiring fixed and
intangible assets
• Upgrading an existing asset
• Repairing an existing asset
• Repayment of loan
CIRCULAR FLOW OF INCOME

Presented by: VINAY KUMAR

 3 Sectors of Economy

Primary Sector Secondary Sector Tertiary Sector

AGRICULTURE&
INDUSTRY SERVICES
ALLIED ACTIVITIES

Agriculture Manufacturing Trade, Hotels,

Livestock Transport,
Mining and Quarrying Communication and
Forestry& Logging
Services related to
Fisheries & Aquaculture Construction Broadcasting
Electricity Financial, Real Estate
Gas and
Water Supply Professional Services
&
other Utility Services Public Administration,
Defence and
other Services
Presented by: VINAY KUMAR
 PRODUCTION CONSUMPTION

SUPPLY DEMAND

PRODUCTION (or)
INCOME EXPENDITURE
VALUE ADDED
METHOD METHOD
METHOD
∑GVA= Final Gross Value Added
--------------------------------- GDPFC = W+I+P+R GDPMP = C+G+I+ (X-M)
GVAbp = GVAfc
+ Production Taxes GDP= PFCE + GFCE + GFCF + (X-M)
– Production Subsidies
---------------------------------
GDPmp = GVAbp
+ Product Taxes
– Product Subsidies

Presented by: VINAY KUMAR

 KEY TERMINOLOGY TO NOTE

GROSS DEPRECIATION NET

Factor Income Factor Income to NFIA

From Abroad Abroad

DOMESTIC NFIA NATIONAL

NET INDITECT MARKET PRICE

FACTOR COST TAXES

Real GDP = Nominal GDP adjusted for

Inflation

Presented by: VINAY KUMAR

 NATIONAL INCOME (or) NNPfc
GDPmp Depreciation NDPmp NFIA

GDP (Market Prices) = GVA (Basic Prices) + Product Taxes –

product Subsidies NNPmp

INDIRECT TAXES
0
GVA (Basic Prices) = GVA (Factor Cost) + Production SUBSIDIES
0
Taxes – Production Subsidies

GVA (factor Cost) = NNPfc

Rent + Interest + Wages + Profit (or)
NATIONAL INCOME
Start Here
Presented by: VINAY KUMAR
 Various Concepts of National Income
• GDP = C+I+G+(X-M); C=Consumption, I=Investment, G=Government expenditure; (X-M)= Net exports
• Gross National Product (GNP): Is market value of goods and services that the country's citizens produce
regardless of their location.
• GNP=GDP+NFIA or GNP=C+I+G+(X-M) +NFIA; where, C=Consumption, I=Investment, G=Government
expenditure, (X-M) = Net Exports and NFIA= Net factor income from abroad.
• Net National Product (NNP) at MP: Is market value of net output of final goods and services produced
by an economy during a year and net factor income from abroad.
• NNP=GNP-Depreciation (or) NNP=C+I+G+(X-M)+NFIA-IT-Depreciation; where, C=Consumption,
I=Investment, G=Government expenditure, (X-M) = Net Exports, NFIA= Net factor income from abroad
and IT= Indirect Taxes
• National Income (NI): Is also known as National Income at factor cost which means total income earned
by resources for their contribution of land, labour, capital and organisational ability. Hence, the sum of
the income received by factors of production in the form of rent, wages, interest and profit is called
National Income.
• NI=NNP+ Subsidies- Indirect Taxes (or) GNP- Depreciation+ Subsidies- Indirect Taxes (or) NI=C+G+I+(X-
M) +NFIA-Depreciation-Indirect Taxes +Subsidies
• Personal Income (PI): Is the total money income received by individuals and households of a country
from all possible sources before direct taxes.
• PI=NI-Corporate Income Taxes-Undistributed Corporate Profits- Social Security Contribution
+Transfer Payments.
• Disposable Income (DI): It is the income left with the individuals after the payment of direct taxes from
personal income. It is the actual income left for disposal or that can be spent for consumption by
individuals.(DI=PI-Direct Taxes)
• Per Capita Income (PCI): It is calculated by dividing the national income of the country by the total
population of a country. (PCI=Total National Income/Total National Population)
Presented by: VINAY KUMAR
Presented by: VINAY KUMAR
The national income of a country for a given period Economic growth is usually coupled with
is equal to the
(a) Deflation (b) Inflation
(a) total value of goods and services produced by
the nationals (c) Stagflation (d) Hyperinflation
(b) sum of total consumption and investment
Increase is absolute and per capital real GNP do
expenditure
not connote a higher level of economic
(c) sum of personal income of all individuals
(d) money value of final goods and service produced
development, if
(a) industrial output fails to keep pace with
Consider the following statements: Human capital agricultural output.
formation as a concept is better explained in terms of (b) agricultural output fails to keep pace with
a process which enables industrial output.
1. individuals of a country to accumulate more (c) poverty and unemployment increase.
capital. (d) imports grow faster than exports
2. increasing the knowledge, skill levels and
capacities of the people of the country. Consider the following statements:
3. accumulation of tangible wealth. 1. Purchasing Power Parity (PPP) exchange rates
4. accumulation of intangible wealth.
are calculated by comparing the prices of the
Which of the statements given above is/are correct?
same basket of goods and services in different
(a) 1 and 2 (b) 2 only (c) 2 and 4 (d) 1, 3 and 4
----------------------------------------------------------------------
countries.
Macro Despite being a high saving economy, capital 2. In terms of PPP dollars, India is the sixth largest
formation may not result in significant increase in economy in the world.
output due to Which of the statement given above is/are correct?
(a) weak administrative machinery (a) 1 only
(b) illiteracy (b) 2 only
(c) high population density (c) Both 1 and 2
(d) high capital-output ratio (d) Neither 1 nor 2 Presented by: VINAY KUMAR
AGRICULTURE
& ALLIED ACTIVITIES

Presented by: VINAY KUMAR

 AGRICULTURE- A SNAPSHOT!
INPUTS PRODUCTION TRANSPORT
LAND/ SOIL & WAREHOUSING
SEEDS MARKETING
IRRIGATION
PROCESSING
FERTILIZERS
&
PESTICIDES EXPORTS

EXTENSION INSURANCE

Presented By: VINAY KUMAR

Presented by: VINAY KUMAR

CREDIT
Allied Activities

Livestock Apiculture
Horticulture Dairying Sericulture Fisheries Forestry
Presented by: VINAY KUMAR
Presented by: VINAY KUMAR
 FDI Policy in Agricultural Sector
As per the present FDI Policy, 100% FDI is allowed in the following activities of agriculture through
automatic route:
 Floriculture, Horticulture, Apiculture and Cultivation of Vegetables & Mushrooms under
controlled conditions;  Development and Production of seeds and planting material;
 Animal Husbandry (including breeding of dogs), Pisciculture, Aquaculture, under controlled
conditions; and
 Services related to agro and allied sectors
100% FDI is also permitted in plantation sector namely tea, Coffee, Rubber, Cardamom, Palm Oil and
Olive oil tree plantations through automatic route.
As per Fourth Advance Estimates for 2020-21, total food grain production in the
country is estimated at a record 308.65 million tonnes which is 11.15 million tonnes
higher than that during 2019-20.
 Oil seeds& Edible Oil Production
India is the world’s second largest consumer and number one importer of vegetable oil.
• As urbanisation increases in developing countries, dietary habits and traditional meal patterns are
expected to shift towards processed foods that have a high content of vegetable oil. Vegetable oil
consumption in India is, therefore, expected to remain high due to high population growth and
urbanisation.
The Government is promoting the
production and productivity of
oilseeds through the centrally
sponsored scheme of National
Food Security Mission: Oilseeds
(NFSM-Oilseeds) from 2018-19
onwards in all districts of India.

August, 2021: National Mission

on Edible Oils-Oil Palm (NMEO-
OP) has been launched to
augment the availability of
edible oil in the country by
harnessing area expansion and
through price incentives.
additional area of 6.5 lakh
hectares for oil palm till 2025-26
(10 lakh ha ultimately) and
production of CPO up to 28 lakh
tonnes by 2029-30.
 Water and Irrigation • Climate-Smart Farming Practices: This is slowly gaining
acceptance with farmers using clean energy sources like
• Agriculture accounts for about 80% of the current solar for irrigation. The farmers have been incentivised
water use in the country. The share of net irrigated to transfer electricity generated through solar to the
area accounts for about 49 per cent of the total net local grid. Crop yield prediction models using artificial
sown area in the country and out of the net intelligence and drones for monitoring soil and crop
irrigated area, about 40 per cent is irrigated health have been initiated. Smart farming also enables
crop diversification, which will help farmers reduce their
through canal systems and 60 per cent through
dependence on monsoons for water.
groundwater.
Millets in India: 50.9 MMT per year; 80% of Asia’s and 20%
of global production; Global average yield is 1229 kg/ha,
whereas India has a higher average yield of 1239 kg/ha. In
India, millets are primarily a Kharif crop mostly grown in
rainfed conditions, requiring less water and agricultural
inputs than other staple crops.
• National Food Security Mission (NFSM), millets have
been introduced to provide nutritional support.
• Sub-mission on Nutri-cereals is being implemented since
2018-19 in 212 districts of 14 States.
• Rashtriya Krishi Vikas Yojana – Remunerative
Approaches for Agriculture and Allied Sectors
Rejuvenation (RKVYRAFTAAR)
• Increased coverage under micro irrigation can be the most effective mode of water conservation. With the
Micro Irrigation

objective of facilitating the States in mobilising resources for expanding coverage of micro irrigation, a
Micro Irrigation Fund (MIF) with corpus of ₹ 5000 crore was created with National Bank for Agriculture
and Rural Development (NABARD) during 2018-19. Projects with loans under MIF amounting to ₹ 3970.17
crore have been approved for 12.81 lakh ha of Micro Irrigation area. GoI is promoting micro irrigation viz.
Drip and Sprinkler Systems in the Country for enhancing water use efficiency at farm level under the Per
Drop More Crop component of Pradhan Mantri Krishi Sinchayee Yojana (PMKSY-PDMC) from 2015-16.
• Under PMKSY-PDMC, total area of 59.37 lakh ha. covered under micro irrigation from 2015-16.
Agricultural Credit

The Government of India in 2018-

19 extended the facility of Kisan
Credit Card (KCC) to fisheries and
animal husbandry farmers to help
them meet their working capital
needs.
• PM KISAN Scheme: It is a Central Sector Scheme to supplement the financial needs of land-holding farmers.
The financial benefit of ₹6,000 per year is transferred into the bank accounts of farmer families through DBT.
• Agriculture Infrastructure Fund (AIF): AIF is a financing facility operational from the year 2020-21 to 2032-33 for
the creation of post-harvest management infrastructure and community farm assets, with benefits including 3
per cent interest subvention and credit guarantee support. Under this, a provision of ₹1 lakh crore for 2020-21
to 2025-26 has been made.
• Pradhan Mantri Fasal Bima Yojana (PMFBY): PMFBY is currently the largest crop insurance scheme in the world
in terms of farmer enrolments, averaging 5.5 crore applications every year and the third largest in terms of the
premium received. The scheme promises minimal financial burden on the farmer, with farmers paying only 1.5
per cent and 2 per cent of the total premium for the Rabi and Kharif seasons, respectively, with Centre and
State Governments bearing most of the premium cost.
• Mission for Integrated Development of Horticulture (MIDH): Several expert groups have identified horticulture
as a high-growth area and a source of buoyant income and improved resilience for farmers. The scheme to
promote horticulture covering fruits, vegetables, root and tuber crops, spices, flowers, plantation crops etc., was
introduced in 2014-15.
 CROP INSURANCE
Pradhan Mantri Fasal Bima Yojana PMFBY to PMFBY 2.0 (overhauled PMFBY)
• Launched in 2016, PMFBY replaced National • Completely Voluntary: It has been decided to
Agricultural Insurance Scheme (NAIS) and make enrolment 100% voluntary for all
Modified National Agricultural Insurance farmers from 2020 Kharif.
Scheme (MNAIS). • Limit to Central Subsidy: The Cabinet has
• PMFBY covers all Food & Oilseeds crops and decided to cap the Centre’s premium subsidy
Annual Commercial/Horticultural Crops for under these schemes for premium rates up to
which past yield data is available. 30% for unirrigated areas/crops and 25% for
Objectives: irrigated areas/crops.
1. To provide insurance coverage and financial • More Flexibility to States: Option to select any

Presented by: VINAY KUMAR

support to the farmers in the event of failure of number of additional risk covers/features like
any of the notified crops as a result of natural prevented sowing, localised calamity, mid-
calamities, pests & diseases. season adversity, and postharvest losses.
2. To stabilise the income of farmers to ensure • Penalising the Pendency: If states don’t
their continuance in farming. release their share before March 31 for the
3. To encourage farmers to adopt innovative and Kharif season and September 30 for rabi, they
modern agricultural practices. would not be allowed to participate in the
4. To ensure flow of credit to the agriculture scheme in subsequent seasons.
sector. • Investing in ICE Activities: Insurance
The prescribed premium is 2% to be paid by companies have to now spend 0.5% of the
Premium

farmers for all Kharif crops and 1.5% for all total premium collected on information,
rabi crops. In the case of annual commercial education and communication (IEC) activities
and horticultural crops, the premium is 5%. MAHARASHTRA: ‘Beed’ Model of Crop Insurance
 MINIMUM SUPPORT PRICE (MSP)
• MSP assures the farmers of a fixed price for their crops
• The Commission for Agricultural Costs & Prices (CACP) in
the Ministry of Agriculture would recommend MSP.
• Cabinet Committee on Economic Affairs (CCEA) headed by
Prime Minister would decide and announce MSP before
each sowing season.

Kerala has become the first state in the country to fix the
minimum support price (MSP) for vegetables.

VFC Tobacco

• ‘A2’ covers all paid-out costs directly incurred by the farmer in cash and kind on seeds, fertilisers,
pesticides, hired labour, leased-in land, fuel, irrigation, etc.
• ‘A2+FL’ includes A2 plus an imputed value of unpaid family labour. (MSP= (A2+ FL) X1.5)
• ‘C2’ is a more comprehensive cost that factors in rentals and interest forgone on owned land and
fixed capital assets, on top of A2+FL.
Presented by: VINAY KUMAR
 Sugarcane-Fair and Remunerative Price (FRP)
With the amendment of the Sugarcane (Control) SUGAR PRICING POLICY
Order, 1966 on 22.10.2009, the concept of Statutory
• Price of sugar are market driven & depends
Minimum Price (SMP) of sugarcane was replaced
on demand & supply of sugar.
with the ‘Fair and Remunerative Price (FRP)’ of
• However, with a view to protect the interests
sugarcane for 2009-10 and subsequent sugar
of farmers, concept of Minimum Selling Price
seasons.
(MSP) of sugar has been introduced in 2018

Presented by: VINAY KUMAR

The cane price announced by the Central
so that industry may get at least the
Government is decided on the basis of the
minimum cost of production of sugar, so as to
recommendations of the Commission for
enable them to clear dues of farmers.
Agricultural Costs and Prices (CACP) in consultation
• In exercise of the powers conferred by the
with the State Governments& other stakeholders.
Essential Commodities Act, 1955,
FRP is linked to a basic recovery rate of sugar, with a Government has notified Sugar Price
premium payable to farmers for higher recoveries of (Control) Order, 2018.
sugar from sugarcane. • Under the provisions of said order,
Government fixes the Minimum Selling Price
(MSP) of white/refined sugar.
• EBP programme was launched in year 2003 with the vision to boost agricultural economy,
(EBP)
ETHANOL BLENDED

to reduce dependence on imported fossil fuel, to save foreign exchange on account of

crude oil import bill, to reduce the air pollution and to support sugar sector and in the
interest of sugarcane farmers.
PROGRAMME

• Keeping in view the various benefits of EBP Programme, Government has advanced the
target of achieving 20% blending to 2025, which was earlier scheduled to be achieved in
PETROL

2030. However, the ethanol production capacity in the country is not sufficient at present
to achieve 20% blending by 2025. Sugar Industry is country’s second largest agro-based industry, next to cotton
 Agricultural Marketing
Scheme Description
e-NAM • 2016: with the objective of creating online transparent competitive bidding
system to facilitate farmers with remunerative prices for their produce.
• Government is providing free software and assistance of ₹ 75 Lakh per APMC
mandi for related hardware including quality assaying equipment and creation of
infrastructure like cleaning, grading, sorting, packaging and compost unit etc.,
• 1000 mandis of 18 States& 3 UTs have been integrated with e-NAM platform.
GrAMS 22,000 rural haats are to be upgraded and provided with marketing infrastructure

FPOs • Central Sector Scheme of “Formation and Promotion of 10,000 Farmer Producer
Organizations (FPOs)” to form and promote 10,000 new FPOs till 2027-28.
• While adopting cluster-based approach, formation of FPOs focuses on “One
District One Product” to enable product specialization.
Objectives: to enhance productivity through efficient, cost-effective and sustainable
resource use and realize higher returns through better liquidity and market linkages
for their produce and to become sustainable through collective action.
• AIF is intended to further strengthen the infrastructure in APMC mandis.
Infrastructure Fund

• All loans under the AIF have interest subvention of 3 per cent per annum up to a limit of ₹
Agriculture

2 crores. This subvention is available for a maximum period of 7 years.

(AIF)

• APMCs are eligible for multiple projects (of different infrastructure types) within their
designated market area. In such cases, interest subvention for a loan up to ₹ 2 crores will
be provided for each project of different infrastructure types e.g. cold storage, sorting,
grading and assaying units, silos, etc. within the designated market area of the APMC.
 Agriculture Export Policy 2018
• The Central Government has notified the guidelines of the
Central Sector Scheme for implementation of Agriculture
Export Policy in 2020.
• This Policy was framed with a focus on agriculture export
oriented production, export promotion, better farmer
realization and synchronization within policies and
programmes of Indian Government.
• The Policy aims to double agricultural exports from present
value to USD 60 Billion by 2022 and reach USD 100 Billion
after that.
• It aims to diversify the export basket, destinations and boost
high value and value added agricultural exports including the
perishables.
• Strategic Recommendations: Structural changes required;
Robust infrastructure like Mega Food Parks, state-of-the-art
testing laboratories and Integrated Cold Chains; Greater
involvement of State Governments in Agriculture Exports
• Operational Recommendations: Involvement of small and
medium farmers for entire value chain as group enterprises
within cluster of villages at the block level for select produces.
• Marketing and promotion of ‘Brand India’.
• Attract private investments in export oriented activities and
infrastructure.
• Agricultural R&D led by the participation of private sector
 Natural Farming Organic Farming
• The main aim for promotion of Natural Farming is
elimination of chemical fertilisers and pesticides
usage and promotion of good agronomic
practices.
• Natural Farming also aims to sustain agriculture
production with eco-friendly processes in tune
with nature to produce agricultural produce free
of chemicals.
• Soil fertility & soil organic matter is restored by
natural farming practices.
• Natural farming systems require less water and
are climate friendly.
• Natural farming in India is being promoted
through a dedicated scheme of Bharatiya Prakritik
Krishi Paddhati Programme (BPKP).
• The scheme promotes on-farm biomass recycling
with major stress on biomass mulching, use of on-
farm cow dung-urine formulations, periodic soil
aeration and exclusion of all synthetic chemical Certification of Organic Products: Two (2)
inputs. systems of certification i.e. Participatory
• Under BPKP, financial assistance of Rs 12200/ha Guarantee System (PGS) implemented
for 3 years is provided for cluster formation, by Ministry of Agriculture and Farmers
capacity building and continuous handholding by Welfare and National Programme for Organic
trained personnel, certification and residue Production (NPOP) implemented by Ministry
analysis. of Commerce and Industry.
 Sweet Revolution SWAMITVA scheme
• Keeping in view the importance of beekeeping • Survey of Villages and Mapping with
as part of the Integrated Farming System (IFS) in Improvised Technology in Village Areas
the country, government approved the • On Panchayati Raj Diwas i.e.,April 24th, 2020
allocation of ₹ 500 crore for National • By the Ministry of Panchayati Raj
Beekeeping & Honey Mission (NBHM) for three • Launched 9 states, now it is It was extended
years (2020-21 to 2022-23). (as a part of ANB) to all states.
• NBHM aims for the overall promotion & • The scheme aims to revolutionize property
development of scientific beekeeping in the record maintenance in India.
country to achieve the goal of ‘Sweet • Under the scheme, residential land in
Revolution’ which is being implemented through villages will be measured using drones to
National Bee Board (NBB). create a non-disputable record.
• Beekeeping is an agro-based activity undertaken • Property card for every property in the
by farmers/ landless labourers as part of the IFS. village will be prepared by states using
• Beekeeping has been useful in pollination of accurate measurements delivered by drone-
crops, thereby, increasing income of the mapping.
farmers/beekeepers by way of increasing crop • These cards will be given to property owners
yield and providing honey and other high value and will be recognised by the land revenue
beehive products, viz. bee wax, bee pollen, records department.
propolis, royal jelly, bee venom, etc. • To prepare digital 3D maps of all villages
• Diversified agro climatic conditions of India Benefits of the scheme:
provide great potential and opportunities for • Property rights through an official document
beekeeping/honey production and exports. • enable villagers to access bank finance using
• India’s export of honey has increased by about their property as collateral.
110 per cent between 2013-14 to 2019-20. • collection of property taxes becomes easy
Presented by: VINAY KUMAR
• Dairy is the single largest agricultural commodity contributing 5 per cent of the national
economy and employing more than 8 crore farmers directly.
• India is ranked 1st in milk production contributing 23 per cent of global milk production.
 FISHERIES Pradhan Mantri Matsya Sampada
• India is the second largest fish producing Yojana (PMMSY)
country in the world accounting for 7.56 per
cent of global production.
• ₹ 20,050 crores
• It contributes about 1.24% to the country’s • Key interventions include enhancing fish
GVA and over 7.28% to the agricultural GVA. production and productivity, modernizing and
• Fisheries sector has demonstrated an strengthening the value chain, creating
outstanding double-digit average annual fisheries and post-harvest infrastructure and
growth of 10.87 per cent since 2014-15. developing robust management and
regulatory frameworks.
National Animal Disease Control Programme • Emphasis is laid on addressing critical gaps in
(NADCP) the value chain through technology infusion,
• The largest ever vaccination programme optimal water management to achieve ‘more
carried out either for human or animal crop per drop’, improved quality and hygiene
vaccination in the world. of fish and fish products, insurance, value
• To control and eradicate the Foot & Mouth addition, demand-based branding and
Disease (FMD) and Brucellosis by 2030. marketing and promotion of initiatives
bringing economic returns for stakeholders.
Animal Husbandry Infrastructure Development
• PMMSY prioritizes sustainability and
Fund (AHIDF)
traceability from ‘catch to consumer’ for
• ₹15000 crore- AHIDF facilitates investments augmenting fisheries exports and maintaining
in the establishment of infrastructure for competitiveness in the global markets.
dairy and meat processing and establishment • To create a conducive environment for private
of animal feed plants by the FPOs, individual sector participation and viable business
entrepreneur, MSME, Sec8 companies and models in the fisheries sector.
private Agri& Food Management companies.
 FOOD PROCESSING

Prime Minister-Formalization of Micro Pradhan Mantri Kisan SAMPADA Yojana

Food Processing Enterprises (PM-FME) (PMKSY)
• Ministry of Food Processing Industries Under the umbrella central sector scheme PMKSY,
(MoFPI) has launched a new Centrally the Ministry is implementing various component
Sponsored Scheme, PM-FME with a total schemes, inter-alia, including (i) Mega Food Parks,
outlay of ₹ 10,000 crore over the period (ii) Integrated Cold Chain and Value Addition
2020-2025. Infrastructure, (iii) Infrastructure for Agro-
• Under the scheme, One District One Product processing Clusters, (iv) Creation of Backward and
(ODOP) status for 137 unique products in Forward Linkages (v) Creation / Expansion of Food
710 districts of 35 States/ UTs has been Processing & Preservation Capacities, (vi) Operation
approved by the Ministry. Greens and (vii) Food Testing Laboratories.
In India, which of the following can be considered as Which of the following factors/policies were affecting
public investment in agriculture? the price of rice in India in the recent past?
(1) Fixing Minimum Support Price for agricultural (1) Minimum Support Price
produce of all crops (2) Government’s trading
(2) Computerization of Primary Agricultural Credit (3) Government’s stockpiling
Societies (4) Consumer subsidies
(3) Social Capital development Select the correct answer using the code given below:
(4) Free electricity supply to farmers (a) 1, 2 and 4 only
(5) Waiver of agricultural loans by the banking system (b) 1, 3 and 4 only
(6) Setting up of cold storage facilities by the (c) 2 and 3 only
governments. (d) 1, 2, 3 and 4
In India, which of the following can be considered as ----------------------------------------------------------------------
public investment in agriculture?
Under the Kisan Credit Card scheme, short-term credit
Select the correct answer using the code given below:
support is given to farmers for which of the following
(a) 1, 2 and 5 only; (b) 1, 3, 4 and 5 only
purposes ?
(c) 2, 3 and 6 only; (d) 1, 2, 3, 4, 5 and 6
(1) Working capital for maintenance of farm assets
Consider the following statements: harvesters,
(1) In terms of short-term credit delivery to the (2) Purchase of combine tractors and mini trucks
agriculture sector, District Central Cooperative Banks requirements of farm
(DCCBs) deliver more credit in comparison to (3) Consumption households
Scheduled Commercial Banks and Regional Rural (4) Post-harvest expenses
Banks. (5) Construction of family house and setting up of
(2) One of the most important functions of DCCBs is village cold storage facility
to provide funds to the Primary Agricultural Credit Select the correct answer using the code given below:
Societies. (a) 1, 2 and 5 only
Which of the statements given above is/are correct? (b) 1, 3 and 4 only
(a) 1 only; (b) 2 only (c) 2,3,4 and 5 only
(c) Both 1 and 2; (d) Neither 1 nor 2 (d) 1, 2, 3, 4 and 5
Presented by: VINAY KUMAR
 Consider the following statements The Fair and Remunerative Price (FRP) of sugarcane
(1) The quantity of imported edible oils is more than the is approved by the
domestic production of edible oils in the last five years. (a) Cabinet Committee on Economic Affairs
(2) The Government does not impose any customs duty on (b) Commission for Agricultural Costs and Prices
all the imported edible oils a special case. (c) Directorate of Marketing and Inspection,
Which of two statements given above is/are correct Ministry of Agriculture
(a) 1 only; (b) 2 only; (c) Both 1 and 2; (d) Neither 1 nor 2 (d) Agricultural Produce Market Committee

In India, markets in agricultural products are regulated Priority Sector Lending by banks in India
under the constitutes the lending to
(a) Essential Commodities Act, 1955 (a) agriculture; (b) micro and small enterprises
(b) APMC Act enacted by States (c) weaker sections (d) All of the above
(c) Agricultural Produce (Grading and Marking) Act, 1937
An objective of the National Food Security
(d) Food Products Order, 1956 and Meat and Food Products Order, 1973
Mission is to increase the production of certain
Which of the following grants/ grant direct credit crops through area expansion and productivity
assistance to rural households? enhancement in a sustainable manner in the

Presented by: VINAY KUMAR

(1) Regional Rural Banks identified district of the country. What are those
(2) National Bank for Agriculture and Rural Development crops?
(3) Land Development Banks (a) Rice and wheat only
Select the correct answer using the codes given below: (b) Rice, wheat and pulses only
(a) 1 and 2 only; (b) 2 only; (c) 1 and 3 only; (d) 1, 2 and 3 (c) Rice, wheat, pulses and oil seeds only
(d) Rice, wheat, pulses, oil seeds and vegetables
Consider the following statements:
1. The Union Government fixes the Statutory Minimum In India, which of the following have the highest
Price of sugarcane for each sugar season. share in the disbursement of credit to agriculture
2. Sugar and sugarcane are Essential Commodities Act. and allied activities?
Which of the statements given above is/are correct? (a) Commercial Banks (b) Cooperative Banks
(a) 1 only (b) 2 only (c) Both 1 and 2 (d) Neither 1 nor 2 (c) Regional Rural Banks (d) MFIs
With what purpose is the Government of India promoting With referene to ‘Pradhan Mantri Fasal Bima
the concept of “Mega Food Parks”? Yojana’, consider the following statements:
1. To provide good infrastructure facilities for the food 1. Under this scheme, farmers will have to pay a
processing industry. uniform premium of two percent for any crop
2. To increase the processing of perishable items and
they cultivate in any reason of the year.
reduce wastage.
3. To provide emerging and eco-friendly food processing 2. This scheme covers post-harvest losses
technologies to entrepreneurs. arising out of cyclones and unseasonal rains.
Select the correct answer using the codes given below: (a) 1 Which of the statements given above is/are correct?
only (b) 1 and 2 only (c) 2 and 3 only (d) 1, 2 and 3 (a) 1 only (b) 2 only (c) Both 1 and 2 (d) Neither 1 nor 2

With reference to organic farming in India, consider the With reference to the provisions made under
following statements: the National Food Security Act, 2013, consider
1. 'The National Programme for Organic Production' the following statements:
(NPOP) is operated under the guidelines and directions 1. The families coming under the category of
of the Union Ministry of Rural Development.
'below poverty line (BPL)' only are eligible to
2. 'The Agricultural and Processed Food Products Export
Development Authority' (APEDA) functions as the receive subsidies food grains.
Secretariat for the implementation of NPOP. 2. The eldest woman in a household, of age 18
3. Sikkim has become India's first fully organic State. years or above, shall be the head of the
Which of the statements given above is/are correct? household for the purpose of issuance of a
(a) 1 and 2 only (b) 2 and 3 only (c) 3 only (d) 1, 2 and 3 ration card.
3. Pregnant women and lactating mothers are
Consider the following:
1.Areca nut 2. Barley 3. Coffee 4. Finger millet
entitled to a 'take-home ration' of 1600
5. Groundnut 6. Sesamum 7. Turmeric calories per day during pregnancy and for
The Cabinet Committee on Economic Affairs has six months thereafter.
announced the MSP for which of the above? Which of the statements given above is/are correct?
(a) 1, 2, 3 and 7 only (b) 2, 4, 5 and 6 only (a) 1 and 2 (b) 2 only (c) 1 and 3 (d) 3 only
(c) 1, 3, 4, 5 and 6 only (d) 1, 2, 3, 4, 5, 6 and 7 Presented by: VINAY KUMAR
As per the NSSO 70th Round "Situation Assessment The economic cost of food grains to the Food
Survey of Agricultural Households", consider the Corporation of India is Minimum Support Price and
following statements: bonus (if any) paid to the farmers plus
1. Rajasthan has the highest percentage share of (a) transportation cost only
agricultural households among its rural (b) interest cost only
households. (c) procurement incidentals and distribution cost
2. Out of the total agricultural households in the (d) procurement incidentals& charges for godowns
country, a little over 60 percent belong to OBCs. Among the agricultural commodities imported by
3. In Kerala, a little over 60 percent of agricultural India, which one of the following accounts for the
households reported to have received maximum highest imports in terms of value in the last five
income from source other than agricultural years?
activities. (a) Spices (b) Fresh fruits (c) Pulses (d) Vegetable oils
Which of the statements given above is/are correct?
(a) 2 & 3 only (b) 2 only (c) 1 and 3 only (d) 1, 2 and 3 With reference to land reforms in independent India,
which one of the following statements is correct?
Among the following which one is the largest exporter (a) The ceiling laws were aimed at family holdings

Presented by: VINAY KUMAR

of rice in the world in the last five years? and not individual holdings.
(a) China (b) India (c) Myanmar (d) Vietnam (b) The major aim of land reforms was providing
Which one of the following best describes the main agricultural land to all the landless.
objective of 'Seed Village Concept'? (c) It resulted in cultivation of cash crops as a
(a) Encouraging the farmers to use their own farm seeds predominant form of cultivation.
and discouraging them to buy the seeds from others (d) Land reforms permitted no exemptions to the
(b) Involving the farmers for training in quality seed ceiling limits.
production and thereby to make available quality seeds
The terms 'Agreement on Agriculture', Agreement on
to others at appropriate time and affordable cost
(c) Earmarking some villages exclusively for the production the Application of Sanitary and Phytosanitary
of certified seeds Measure' and 'Peace Clause' appear in the news
(d) Identifying the entrepreneurs in villages and providing frequently in the context of the affairs of the
them technology and finance to set up seed companies (a) FAO (b) UNFCCC (c) WTO (d) UNEP
INDIAN ECONOMY
INDUSTRY
SERVICES
INNOVATION
Presented by: VINAY KUMAR
 INDEX OF INDUSTRIAL PRODUCTION
(BASE: 2011-12 = 100)

• 8 core sector industries account for 40.27%

of the weight of items included in the IIP.
• IIP is released by CSO on monthly basis).
In India, in the overall index of Industrial Production, the Indices of
Eight Core Industries have a combined weight of 37.90%. Which of • Since these 8 industries are the essential
the following are among those Eight Core Industries? basic and/or intermediate ingredient in
1. Cement 2. Fertilizers 3. Natural Gas 4.Refinery products 5. functioning of the broader economy,
Textiles
Select the correct answer using the codes given below: mapping their health provides a fundamental
(a) 1 and 5 only (b) 2, 3 and 4 only understanding of state of the economy
(c) 1, 2, 3 and 4 only (d) 1, 2, 3, 4 and 5 Presented by: VINAY KUMAR
• PMI is a survey-based measure that asks the respondents about changes in their perception of
some key business variables from the month before.
• It is calculated separately for manufacturing and services sectors and then composite index is
constructed.
• PMI is a number from 0 to 100. PMI above 50 represents an expansion, under 50 represents a
contraction, and reading at 50 indicates no change.
• Earlier compiled by Japanese firm Nikkei, it is now compiled by IHS Markit for more than 40
countries including India.
Presented by: VINAY KUMAR
• The gross value addition at constant prices (GVA) in the industrial sector grew at the compound
annual growth rate (CAGR) of 4.53 percent between 2011-12 and 2019-20 while total GVA grew by
CAGR of 5.63 percent over the same period.
• The share of the industrial sector in the nominal GVA(current prices) was 25.9 percent in 2020-21.
• With the industrial sector recovering and expected to grow at 11.8 percent, as per advance
estimates for 2021-22 by National Statistical Office, industry’s share is expected to increase to 28.2
percent.

Presented by: VINAY KUMAR

RECENT REFORMS IN FDI POLICY

Presented by: VINAY KUMAR

 NEW PUBLIC SECTOR ENTERPRISE (PSE) POLICY
• The Government notified the new Public Sector Enterprise (PSE) Policy on 4 February
2021.
• The new PSE Policy envisages classification of CPSEs into Strategic and Non-Strategic
Sectors and exempts certain CPSEs such as those setup as not-for-profit companies
under the Companies Act, 2013 or those supporting vulnerable and weaker sections
of society, from the scope of the Policy.
• The strategic sectors as per the policy are as under:

Presented by: VINAY KUMAR

• Atomic energy
• Space and defense
• Transport and telecommunication;
• Power;
• Petroleum;
• Coal and other minerals;
• Banking, insurance, and financial services.
• Under the 4 broad baskets in which the strategic sectors are classified-i.e., national
security, critical infrastructure, energy and minerals and financial services- only a
bare minimum presence of CPSEs in the aforesaid strategic sectors is to be maintained.
• The non-strategic CPSEs will be privatized or otherwise shall be closed.
• Thus, the policy on public sector enterprises provides a clear path for disinvestment in
all nonstrategic and strategic sectors and strengthens the idea of Minimum
Government - Maximum Governance.
 MICRO, SMALL AND MEDIUM ENTERPRISES (MSME)
MSMEs, introduced by the Government via Micro, Small & Medium Enterprises Development (MSMED)
Act, 2006, are entities engaged in the production, manufacturing, processing or preservation of goods
and commodities subject to investment limits.

• Micro, Small & Medium Enterprises(MSMEs) contribute significantly to the economic and
social development of the country by fostering entrepreneurship and by generating
employment opportunities.
• The relative importance of MSMEs can be gauged from the fact that the share of MSME
GVA in total GVA (current prices) for 2019-20 was 33.08 per cent.
• They contribute to:
• 30% of the country’s GDP;
• 45% of manufacturing output and
• about 40% of overall exports.
• There are approximately 6.3 crore MSMEs employing 110 million people.
Presented by: VINAY KUMAR
 Recent Government Initiatives to support MSMEs
• New Definition: In 2020, the Government has revised the definition of MSMEs by eliminating the
distinction between manufacturing and services enterprises.
• Investment criteria for such enterprises have been revised upwards, with introduction of
additional criterion of turnover.
• It will give MSMEs the confidence to grow and remove MSMEs fear of losing benefits of
MSMEs if they outgrow in size.
• Improved Credit Access by extension of the Emergency Credit Line Guarantee Scheme (ECLGS),
allowing fully guaranteed and collateral-free additional credit support for Covid-hit MSMEs.
• Overall cap of admissible guarantee under ECLGS is now expanded to ₹4.5 lakh crore.
• Addressing Delayed Payments by passing of the Factoring Regulation (Amendment) Act, 2021 to
help MSMEs by providing them added avenues for getting credit facility, especially through Trade
Receivables Discounting System (TReDS).
• TReDS is an electronic platform where receivables of MSMEs drawn against buyers (large
corporates, PSUs, Government departments) are financed through multiple financiers at
competitive rates.
• It will add to the MSME Samadhaan Portal which empowers micro and small entrepreneurs
to directly register cases relating to delayed payments by Central Ministries/
Departments/CPSEs/State Governments.
• Portal “Champions” was launched to cover many aspects of e-governance including grievance
redressal and handholding of MSMEs.
• Global level market for MSMEs by the Ministry of MSMEs through its MSME-Development
Institutes (DI), facilitating MSMEs to export from Domestic Tariff Area (DTA) and SEZ.
• International Cooperation Scheme (ICS) is also implemented to facilitate participation of the
MSMEs in International Exhibitions, Trade Fairs etc. to help them become global.
Presented by: VINAY KUMAR
MINING INDUSTRY

Presented by: VINAY KUMAR

 MINING INDUSTRY
Mineral Conservation and Development
(Amendment) Rules, 2021
• The Mines and Minerals (Development and Regulation) Act, 1957 regulates the mining
sector in India and mandates the requirement for granting leases for mining operations.
• Section 18 of the MMDR Act, 1957 empowers Central Government to frame rules for
conservation and scientific development of minerals and protection of environment from
mining operations.
• Accordingly, Mineral Conservation and Development Rules (MCDR) were framed
(amended from time to time).
• Comprehensive Reforms in MMDR Act, 1957 in 2015:
• Mandating online auction of mineral concessions for transparency.
• Establishment of District Mineral Foundation
• Establishment of National Mineral Exploration Trust.
• Stringent penalty for illegal mining
• Create a new category of mining license i.e., the prospecting license-cum-mining
lease, a two stage-concession for the purpose of undertaking prospecting
operations (exploring or proving mineral deposits), followed by mining operations
etc.
• Empowers central government to increase the area limits for mining and mining
leases shall be granted for a period of 50 years for all minerals other than coal,
lignite, and atomic minerals. Presented by: VINAY KUMAR
 DISTRICT MINERAL FOUNDATION
Recently, Centre took complete control of the District Mineral Foundation (DMF) funds, negating
states’ right to sanction or approve any expenditure out of the funds accrued from mandatory
contribution from mining lease holders.
About District Mineral Foundation (DMF) funds:
• DMF is conceptualized as a benefit-sharing mechanism with mining-affected communities,
recognizing them as partners in natural resource-led development.
• It is set up as a non-profit trust in all mining districts of India, with objective to ‘work for the
interest and benefit of people and areas affected by mining’, through a participatory process.
• Mandated by the Mines and Minerals (Development & Regulation) Amendment Act, (MMDRA)
2015, it is funded through the contributions from miners.
• In 2015, the Government aligned DMF with the Pradhan Mantri Khanij Kshetra Kalyan Yojana
(PMKKKY) scheme, mandating 60% of the funds to be utilized for high priority areas, such as
• Drinking water/ environment preservation and pollution control/ Health care/education/ skill
development/ welfare of women, children, aged and disabled people/ sanitation,
National Mineral Policy, 2019

• Rest 40% of the funds to be utilized for other priority - roads & physical infrastructure/
irrigation/ watershed development.
National Mineral Policywas launched to boost mining sector and prevent illegal mining, such as:
• Encouraging private sector to take up exploration, merger and acquisition of mining entities,
transfer of mining leases and creation of dedicated mineral corridors to boost private sector
participation.
• A three-pronged strategy for prevention of illegal mining including the constitution of task
force by the State Governments at State and District Level; Framing of rules under Section 23C
of the MMDR Act, 1957; and Furnishing of quarterly returns on illegal mining for review to the
Central Government Presented by: VINAY KUMAR
PRODUCTION-LINKED INCENTIVE (PLI) FOR 14 CHAMPION SECTORS
Objectives of the Scheme
• Make domestic manufacturing
competitive and efficient.
• Create economies of scale.
• Make India part of global supply
chain.
• Attract investment in core
manufacturing& cutting edge tech.
• Competitive manufacturing would
in turn lift exports.
• incentive of 4% to 6% on
incremental sales (over base year)
of goods manufactured in India and
covered under target segments, to
eligible companies, for a period of

Presented by: VINAY KUMAR

five (5) years with financial year
(FY) 2019-20 considered as the
base year for calculation of
incentives.
PLI has the potential to create 60 lakh
new jobs, and an additional
production of Rs.30 lakh crore during
next 5 years.
Presented by: VINAY KUMAR
 NATIONAL AUTOMOBILE SCRAPPAGE POLICY
• The policy is launched to give a new
identity to the auto sector and to
mobility of New India.
• It will help scrap and phase out unfit and
polluting vehicles in an environment
friendly manner to create a viable
circular economy (recycle and reuse).

Key highlights
De-registrations of vehicles • Vehicle scrapping is the
• Commercial vehicles: After 15 years in case of failure to process in which End of
get fitness certificate.
life – vehicles are disposed
• Private Vehicles: After 20 years if found unfit or failure to
renew registration certificate.
off and its parts are
• All government vehicles: To be de-registered and recycled.
scrapped after 15 years from date of registration. • India has 51 lakh light
• The policy provides incentives to owners of old vehicles to motor vehicles that are
scrap unfit vehicles through registered scrapping centres. more than 20 years old
• Setting up specialized Registered Vehicle Scrapping and 34 lakh over 15 years
Facilities (RVSFs) across India. old.
Presented by: VINAY KUMAR
 Textile Industry
Textile industry is the second largest employment Production-Linked Incentive (PLI) Scheme
generator in the country, next only to agriculture.
• Production-Linked Incentive (PLI)
In the last decade, close to Rs. 203,000 crores Scheme for Man Made Fiber (MMF)
have been invested in this industry with direct segment and technical textiles,
and indirect employment of about 105 million notified in September 2021.
people, a major part of which is women. • For enhancing India’s manufacturing
capabilities and enhancing exports
will focus on promotion of 40 MMF
apparel and 10 Technical textiles
lines and create global champions.
• It is estimated that over the period
of five years, the PLI Scheme for
Textiles will lead to fresh investment
of more than Rs.19,000 crore,
cumulative turnover of over Rs.3
lakh crore will be achieved under
this scheme and, will create
additional employment
opportunities of more than 7.5 lakh
Presented by: VINAY KUMAR jobs in this sector.
TECHNICAL TEXTILES PM MEGA INTEGRATED TEXTILES
REGION AND APPAREL PARK (MITRA)
• To enhance the competitiveness of the
Textile Sector, to further the vision of
AtmaNirbhar Bharat and to position India
strongly on the global textiles map.
• With a total outlay of Rs. 4,445 crore.
• PM MITRA inspired from 5F’s -farm to
fibre; fibre to factory; factory to fashion;
fashion to foreign-will strengthen the
textile sector by developing integrated
large scale and modern industrial
infrastructure facility for entire value-chain
of the textile industry.
• It is expected to reduce the logistics cost
and will help India in attracting
investments, and boosting employment
generation.
• Competitiveness Incentive Support (CIS) of
₹300 Crore will also be provided to each
PM MITRA Park.
• PM MITRA Park will be developed, by a
SPV which will be owned by the State
Government and Government of India, in a
Public Private Partnership (PPP) Mode.
Presented by: VINAY KUMAR
Presented by: VINAY KUMAR
Presented by: VINAY KUMAR
Amendments proposed to Consumer Protection (E-commerce) Rules, 2020
Competition Commission of India (CCI) In the ‘Index of Eight Core Industries’, which one of
• Apple has asked Competition Commission of the following is given the highest weight?
India (CCI) to dismiss a antitrust case alleging (a) Coal production (b) Electricity generation
abuse of market power in the apps market. (c) Fertilizer production (d) Steel production
• Antitrust refers to a field of economic policy Consider the following statements:
and laws dealing with monopoly and 1. Coal sector was nationalized by the
monopolistic practices. Government of India under Indira Gandhi.
• Competition Act, 2002 which is India’s 2. Now, coal blocks are allocated on lottery
antitrust law monitors any economic activity basis.
that monopolizes competition within the 3. Till recently, India imported coal to meet the
market. shortages of domestic supply, but now India is
• Act guarantees that no enterprise self-sufficient in coal product.
abuses their ‘dominant position’ in a Which of the statements given above is/are
market through the control of supply, correct?
manipulating purchase prices, etc. (a) 1 only (b) 2 and 3 only (c) 3 only (d) 1, 2 and 3
• CCI has been setup under 2002 act to
regulate anticompetitive activity in the With reference to ‘Stand Up India Scheme’, which
country. of the following statements is/are correct?
1. Its purpose is to promote entrepreneurship
CCI is a statutory body under the Competition
among SC/ST and women entrepreneurs.
Act, 2002.
2. It provides for refinance through SIDBI.
The duty of the Commission is to eliminate
Select the correct answer using the code given
practices having adverse effects on competition,
below.
promote and sustain competition, protect the
(a) 1 only (b) 2 only
interests of consumers and ensure freedom of
(c) Both 1 and 2 (d) Neither 1 nor 2
trade in the markets of India. Presented by: VINAY KUMAR
 INTELLECTUAL PROPERTY RIGHTS (IPR)
Intellectual property rights are the India enacted the Geographical Indications of
exclusive rights given to people Goods(Registration and Protection) Act, 1999
in order to comply with the obligations to
over the creations of their minds.
Patents (a) ILO (b) IMF (c) UNCTAD (d) WTO

Geographical
Trademarks

Presented By: VINAY KUMAR

Indications
Presented by: VINAY KUMAR

IPRs

Copyrights
Industrial
Designs

Plant
Varieties These rights have been outlined
in Article 27 of Universal
Declaration of Human Rights.
 IPR Type Description
Patent • An exclusive statutory right granted for an invention – a product or process that provides a new
(Product) way of doing something or that offer a new technical solution to a problem.
(Process) • Patent gives Monopoly right for a limited period of time.
• 3 conditions should be satisfied before applying for patent - Utility for the society
(USEFULNESS); Must have an element of ‘NOVELTY‘; NON-OBVIOUSNESS
• Legal Basis – It is protected under The Patents Act-1970.
• Valid Time Period - generally 20 years.
Trade Mark  TM is a distinctive sign that identifies certain goods or services produced or provided by an
individual or a company.
 TM is allocated to a visual symbol such as name, label, numerals, combination of colours, logo
 Legal Basis –It is protected under The Trade marks Act-1999.
 Time period – renew indefinitely with payment of fees for every 10 years.
Presented by: VINAY KUMAR

Industrial  It refers to the ornamental or aesthetic aspects of an article – 3D features such as shape or 2D
Design features like patterns, lines colours and technical features are not protected.
 Industrial Design must be new or original.
 Legal basis – It is protected under The Designs Act-2000.
 Time period – generally 5 years + maximum renewal to 15 years
Copyright  Copyright is given to authors of literary and artistic works for their artistic creations such as
books and other writings, musical composition, paintings, sculptures, films, computer
programmes.
 Legal Basis- It is protected under The Copyright Act-1957.
 Copyright doesn’t cover Names, titles or short phrases, Ideas, Facts and works lacking originality
Trade Secret  Trade secret covers any confidential business information that provides a competitive edge to
an enterprise. It includes Manufacturing or industrial secrets or commercial secrets.
 It is being protected without registration; Time period – unlimited
 There is no specific law. But cases for violation can be filed under The Contract Act-1872.
 ECONOMIC SURVEY ON INDIA’s PATENTS REGIME
• Most of India’s startups are in the IT/ knowledge-based sector.
• Intellectual property, specifically patents are key to this knowledge-based economy.
• There has been gradual increase in the filing and granting of patents in India.
• The number of patents filed in India has gone up from 39,400 in 2010-11 to 45,444 in 2016-17 to
58,502 in 2020-21 and the patents granted in India has gone up from 7,509 to 9,847 to 28,391 during
the same time period.
• The number of patents application are increasingly coming from Indian residents rather than MNCs.
• The share of Indian residents in total applications has increased from 20 per cent in 2010-11 to
around 30 per cent in 2016-17 and 40 per cent in 2020-21.
• Consequently, India’s ranking in Global Innovation Index has climbed 35 ranks, from 81st in 2015-16
to 46th in 2021.
• This is a remarkable progress, but the number of patents granted in India is still a fraction compared
to patents granted in China, USA, Japan, and Korea.
• According to World Intellectual Property Organization (WIPO), the number of patents granted in
China, USA, Japan, Korea stood at 5.30 lakh, 3.52 lakh, 1.79 lakh, 1.35 lakh respectively for 2020.
• One of the key reasons for relatively low patents in India vis-a-vis USA, China, etc is India’s low
expenditure on Research and Development (R&D) activities, which was 0.7 per cent of its GDP in
2020. However, this is not the only reason.
• The procedural delays and complexity of the process is another cause for low patents in India.
• The average pendency for final decision in acquiring patents in India is 42 months as of 2020.
• This is much higher than 20.8, 20, 15.8 and 15 months respectively for USA, China, Korea and Japan.
• Average pendency for final decision in acquiring patents has reduced in India from 64 months in 2017
to 52 months in 2019 and further to 42 months in 2020.
• Delay in India’s patent application is also due to the low number of patent examiners in India.
Presented by: VINAY KUMAR
 QUESTIONS IN CSP-2022
With reference to foreign-owned e-commerce Which of the following activities constitute real sector
firms, operating in India, which of the following in the economy?
statements is/are correct? 1. Farmers harvesting their crops
1. They can sell their own goods in addition to 2. Textile mills converting raw cotton into fabrics
offering their platforms as market - places. 3. A commercial bank lending money to a trading
company
2. The degree to which they can own big sellers on
4. A corporate body issuing Rupee Denominated
their platforms is limited.
Bonds overseas.
Select the correct answer using the code given below: Select the correct answer using the code given below:
(a) 1 only (a) 1 and 2 only
(b) 2 only (b) 2, 3 and 4 only
(c) Both 1 and 2 (c) 1, 3 and 4 only
(d) Neither 1 nor 2 (d) 1, 2, 3 and 4
INFRASTRUCTURE
Presented by: VINAY KUMAR
 INFRASTRUCTURE
What is ‘Social Infrastructure’?
Roads, Highways
Social infrastructure includes the
construction and maintenance of
facilities that support social services.
Railways • In other words, it is a subset of the
infrastructure sector and typically
includes assets that accommodate
Ports, Waterways social services.
These can include:
• Healthcare (medical facilities and
Airports, Civil Aviation ancillary infrastructure)
• Education (schools, universities and
student accommodation)
• Housing
Energy, Storage • water supply
• Sanitation
• Justice Delivery, Civil Administration
Communication • Other Civic Utilities (Community Halls,
Shelter Homes etc.,)
Presented by: VINAY KUMAR
 INFRASTRUCTURE- INITIATIVES TAKEN BY THE GOVERNMENT

NIP (FY 2020-25) PPP

₹111 lakh Crore
NaBFID REITS National Digital India
PM GatiShakti (AIFI) InvITS Model Concession Logistics Policy Digital Public
Agreements Infrastructure

NMP Viability Gap

₹6 lakh crore Funding
• The dedicated programs for road connectivity (Bharatmala), port infrastructure (Sagarmala), electrification,
railways upgradation, and operationalising new airports/ air routes (UDAN) have significantly improved the
physical infrastructure in the last few years
• With the National Infrastructure Pipeline (NIP) in 2019 and the National Monetization Pipeline in 2021, a
strong baseline for infrastructure creation and development has been put in place, providing a multitude of
opportunities for foreign investment and engagement.
• The NIP was launched with 6,835 infrastructure projects with a projected infrastructure investment of ₹111
lakh crore. This has expanded to over 9,000 projects across 35 sub-sectors and covers economic and social
infrastructure projects jointly funded by the Central Government, State Governments, and the private sector.
• With its strong forward and backward linkages, physical infrastructure will enhance the economy’s productivity
in the medium term.
 Public Digital Infrastructure
Besides the push to physical infrastructure, the government’s emphasis on developing public digital infrastructure
during last few years has been a game changer in enhancing the economic potential of individuals and businesses.
• Digital Public Infrastructure (DPI) refers Digital Public Infrastructure – India Stack-Benefits
to a set of shared digital building blocks,
such as applications, systems, and • Aadhaar-JAM Trinity-DBT: reduction in leakages; less corruption;
platforms, powered by interoperable enhanced coverage. (Up to March 2021, about 1.1 percent of
open standards or specifications. GDP in expenditure was saved due to the digital infrastructure)
• India Stack is the collective name of a • India Stack: A platform to foster innovation and competition;
set of commonly used DPIs in India. expand markets; close gaps in financial inclusion; boost
• It consists of three different layer government revenue collection; and improve public expenditure
o unique identity (Aadhaar) efficiency.
o complimentary payments • Digital payments: Ubiquitous; UPI accounts for 68% of all
systems (Unified Payments payment transactions by volume.
Interface, Aadhaar Payments • The use of digital payments has expanded the customer base of
Bridge, Aadhaar Enabled Payment smaller merchants, documenting their cash flow and improving
Service) access to finance.
o data exchange (DigiLocker and • Roughly 4.5 million individuals and companies have benefited
Account Aggregator) from easier access to financial services through the Account
• Together they enable online, paperless, Aggregator, since it was first launched in August 2021.
cashless, and privacy-respecting digital • Digitalization has also supported formalization of the economy,
access to a variety of public and private with around 8.8 million new taxpayers registered for the GST
services. between July 2017 and March 2022, contributing to buoyant
government revenues in recent years.
RBI: India’s core digital economy has • The India Stack has digitized and simplified Know Your Customer
grown at 2.4 times the overall economic procedures, lowering costs; banks that use e-KYC lowered their
growth between 2014 and 2019. cost of compliance from USD 12 to US 6 cents.
 ROAD TRANSPORT

• World Bank Signs $500 Million Project to develop green, resilient and safe
highways in India.
• The Green National Highways Corridors Project will support Ministry of
The Green Road Transport and Highways (MoRTH) construct 783 km of highways in
National various geographies.
Highways • The project will integrate safe and green technology designs such as local
and marginal materials, industrial byproducts, and other bioengineering
Corridors solutions.
• The $500 million loan will have a maturity of 18.5 years including a grace
period of five years. Presented by: VINAY KUMAR
Presented by: VINAY KUMAR
 CIVIL AVIATION- AIR PORTS, AIR CONNECTIVITY
Government Initiatives Disinvestment of Air India
• Disinvestment of Air India • The process commenced in June 2017 with the ‘in-
• Privatization and modernization and principle’ approval of CCEA.
expansion of airports • CCEA also approved creation of an Air India Specific
• Boost to the Regional Connectivity Alternative Mechanism (AISAM) for the
Scheme-UDAN disinvestment process.
• Incentivization of maintenance, repair& • The AISAM decided the strategic disinvestment of
overhaul (MROs) operations 100% stake of Government of India in Air India.
• M/s Talace Pvt Ltd, a wholly owned subsidiary of
UDAN M/s Tata Sons Pvt. Ltd, was awarded 100% equity
• It is a regional airport development shareholding in Air India.
program and it is part of the Regional
Connectivity Scheme (RCS) of upgrading Privatization of Airports
underserviced air routes. • To improve efficiency and performance, service
• Till launching of UDAN in 2016, India had quality, encourage greater investment and to
74 airports having scheduled operations. reduce government influence
But, within 4 years under UDAN, four • Airports Authority of India (AAI)
rounds of bidding under RCS-UDAN have • Six (6) airports: Ahmedabad, Jaipur, Lucknow,
taken place and 153 RCS airports have Guwahati, Thiruvananthapuram and Mangaluru
been identified for operation of RCS • For Operations, Management and Development
flights. under Public Private Partnership (PPP) mode.
• NMP: 25 AAI airports have been earmarked for asset monetization over the years 2022 to 2025
Presented by: VINAY KUMAR
 PORTS, INLAND WATERWAYS
Sagarmala • The Major Port Authorities Act 2021 was
notified on 18.2.2021.
• It is a National Programme aimed at
• This act provides for inter alia regulation,
accelerating economic development in the
operation and planning of major ports in
country by harnessing the potential of
India and vests the administration, control
India’s 7,500 km long coastline and 14,500
and management of such ports upon the
km of potentially navigable waterways.
Boards of Major Port Authorities.
• The Sagarmala projects include:
• Port modernization& new port
development
• Connectivity enhancement
• Port-led industrialization
• Coastal community development
• coastal shipping and
• Inland water transport.
• Currently, there are 802 projects worth
investment of Rs. 5.54 lakh crore for
implementation under the Sagarmala
Programme by 2035.

A new Captive Policy for Port Dependent

Industries has been prepared to address the
challenges of renewal of concession period,
scope of expansion, and dynamic business
environment. Presented by: VINAY KUMAR
 Inland Waterways (or) Inland Water Transport Sector
• Regulatory amendment through the Inland The Maritime India Vision 2030
Vessels Act, 2021, replaced the over 100 years
old Inland Vessels Act, 1917 (1 of 1917) and • The Maritime India Vision 2030 (MIV
ushered in a new era in the inland water 2030) is a blueprint to ensure
transport sector. coordinated and accelerated growth of
• The objective of the Act is to promote India’s maritime sector in the next
economical, safe transportation and trade decade was released on March 2021.
through inland waters. • The objective is to develop world-class
• It will ensure transparency and accountability in mega ports, transshipment hubs and
the administration of inland water ensure infrastructure modernization.
transportation and promote the ease of doing • MIV 2030 estimates that development of
business. Indian ports will drive cost savings of
• Augmentation in navigation capacity of National ₹6,000 to ₹7,000 crore per annum for
Waterway-1 (NW-1) is being implemented since EXIM clients.
2018 through the Jal Marg Vikas Project from • Further, the augmented operations are
Varanasi to Haldia stretch of Ganga-Bhagirathi- estimated to create an additional
Hooghly River System to enable large barge ~700,000-1,000,000 jobs in the sector.
movements. • MIV 2030 estimates the investment
• Construction of multi-modal terminals at requirement for capacity augmentation
Varanasi and Sahib Ganj have been completed
and development of world class
and that of the multimodal terminal at Haldia
infrastructure at Indian Ports to be to the
and the Navigational Lock at Farakka have
achieved substantial progress.
tune of ₹1,00,000 to ₹1,25,000 crore.
Presented by: VINAY KUMAR
Presented by: VINAY KUMAR
 LOGISTICS The Logistics Performance Index-2018
• India ranks 44 in the LPI-2018
LEADS (LOGISTICS EASE ACROSS DIFFERENT • World Bank releases it on the basis of a
STATES) 2021 REPORT worldwide survey of global freight
• Ministry of Commerce and Industry (2018). forwarders and express carriers
• It is the 3rd edition (no report in 2020) • LPI measures performance along the logistics
• The objective of LEADS is ranking States and UTs supply chain within a country.
on the efficiency of their logistics ecosystem. • The World Bank conducts the survey every
• It aims to enhance focus on improving logistics two years.
performance across states which is key to • The six main indicators of the international
improving the country's trade and reducing part of the LPI summarize on a five-point
transaction cost. scale the assessments of logistics
• LEADES 2021 focuses on both international and professionals.
domestic trade. • For countries, logistics performance is key to
• While LEADS 2018 and 2019 editions were economic growth and competitiveness
perception-based, 2021 report has introduced
‘Infrastructure’ Status For Convention Centres
objective parameters in the index formulation
by engaging with all the 36 States/UTs for the • Department of Economic Affairs (Ministry of
first time. Finance)
• The 2021 index is based on twenty-one • Exhibition-cum-Convention Centres (with a
indicators including seventeen perception minimum built-up floor area of 1,00,000 sq.
indicators and four objective indicators. m.) are included in the Harmonised Master
List of Infrastructure subsectors by insertion
Top 5 States: Gujarat, Haryana, Punjab, Tamil of a new item in the category of ‘Social and
Nadu, and Maharashtra. Commercial Infrastructure’.
Presented by: VINAY KUMAR
 • Grant of Infrastructure status to Logistics sector for easy long-term credit at competitive
rates.
• Taxation reforms like GST and creation of Logistics Division in the Department of Commerce.
Logistics Sector

• Integrated approach to Logistics infrastructure under Gati Shakti, development of 35 Multi

Initiatives

Modal Logistics Parks (MMLPs) under Bharatmala Pariyojana, a number of port connectivity
projects under Sagarmala, etc.
• National Logistics Excellence Awards to catalyse systematic transformation in the sector.
• Proposed National Logistics Law under consultation with stakeholders to provide an agile
regulatory environment through a unified legal framework for “One Nation-One Contract”
paradigm (single bill of lading across modes) supporting “One Nation-One Market” agenda.
• Draft National Logistics policy with aim to promote seamless movement of goods across
the country and is at the near-finalization stage.
As per the Economic Survey 2017-18, a 10%
decrease in indirect logistics cost could lead to an
export growth of 5-8%.
• The Logistics Division of the Ministry of
Commerce and Industry has unveiled plans for
developing 10 cities as ‘Freight Smart cities’.
• State governments identify the cities and the
list will be further expanded to include 75
cities.
• Further, an institutional mechanism involving
the Government, private stakeholders like
**Logistics cost in India is 14-15% of GDP, and for logistics services providers, users and citizens
advanced countries it is 6% of GDP. will be set up.
Presented by: VINAY KUMAR
 ENERGY
Generation Transmission Distribution
POWER GENERATION
INSTALLED GENERATION CAPACITY
(SECTOR WISE) AS ON 31.03.2023
Sector MW % of Total
Central Sector 1,00,055 24%
State Sector 1,05,726 25.4%
Private Sector 2,10,278 50.5%
Total 4,16,059
 POWER DISTRIBUTION
1 Integrated Power • Strengthening of sub-transmission and distribution network
Distribution Scheme • Metering
(IPDS) • lT application-ERP and Customer Care Services
• Provisioning of Solar Panels
2 DDUGJY • Deen Dayal Upadhyaya Gram Jyoti Yojana
• Separation of agricultural, non-agricultural feeder channels
• Strengthening and augmentation of sub-transmission and distribution
network in rural areas
• Rural electrification
3 Saubhagya • Free metered connection for economically poor households
• Last mile connectivity and electricity connection to all remaining
economically poor un electrified households in urban areas. Non-poor
urban households are excluded from this scheme;
• Solar Photovoltaic (SPV) based standalone system for un-electrified
households located in remote and inaccessible villages/habitations,
where grid extension is not feasible or cost effective.
4 UDAY • Ujjwal Discom Assurance Yojana
• For Financial Turnaround of Discoms
• Applicable for State Discoms

Presented by: VINAY KUMAR

MINISTRY OF NEW AND RENEWAL ENERGY (MNRE)

Presented by: VINAY KUMAR

 INDIAN STRATEGIC PETROLEUM RESERVE PROGRAM (ISPRP)
India is the 3rd largest consumer
of energy and also 3rd largest
importer of crude oil in the world.
It will help India to move
towards 90 days mandated
storage by International Energy
Agency for member countries
and mitigate supply side
disruptions.
ISPRL is a Special Purpose Vehicle
created in 2004, wholly-owned
subsidiary of Oil Industry
Development Board (OIDB),
under the Ministry of Petroleum
and Natural Gas. Presented by: VINAY KUMAR

To leverage private sector resources, GoI introduced PPP mode in Strategic Oil Reserve.
• Under Phase-I, Strategic Petroleum Reserves facilities of crude oil at 3 locations- Visakhapatnam,
Mangaluru and Padur have been established.
• Abu Dhabi National Oil Company and National Oil Company from UAE joined Phase-I to store its oil
in Mangalore.
• Under Phase-II, Chandikhol in Odisha and Padur in Karnataka will have two additional SPR facilities.
With reference to ‘National Investment and On which of the following can you find the
Infrastructure Fund’, which of the following Bureau of Energy Efficiency Star Label?
statements is/are correct? (1) Ceiling fans
(1) It is an organ of NITI Aayog. (2) Electric geysers
(2) It has a corpus of Rs. 4, 00,000 crore at present. (3) Tubular fluorescent lamps
Select the correct answer using the code given Select the correct answer using the code
below: given below.
(a) 1 only (a) 1 and 2 only
(b) 2 only (b) 3 only • Standards& Labeling Program
• Voluntary& Mandatory
(c) Both 1 and 2 • DEA, Ministry of Finance (c) 2 and 3 only • BEE
(d) Neither 1 nor 2 • Rs. 40, 000 crore (d) 1, 2 and 3 • Ministry of Power

The Global Infrastructure Facility is a/an

a) ASEAN initiative to upgrade infrastructure in Asia and financed by credit from the
Asian Development Bank.
b) World Bank collaboration that facilitates the preparation and structuring of
complex infrastructure Public-Private Partnerships (PPPs) to enable mobilization of
private sector and institutional investor capital.
c) Collaboration among the major banks of the world working with the OECD and
focused on expanding the set of infrastructure projects that have the potential to
mobilize private investment.
d) UNCTAD funded initiative that seeks to finance and facilitate infrastructure
development in the world. Presented by: VINAY KUMAR
 INDIAN ECONOMY
SOCIAL SECTOR
POVERTY-INEQUALITY
EDUCATION, HEALTH, EMPLOYMENT
SUSTAINABLE DEVELOPMENT
 • NITI Aayog was formed via a resolution of the Union Cabinet on 1st
January, 2015. It is the premier policy think tank of the Government of
India, providing directional and policy inputs.
• Apart from designing long-term policies and programmes for the
Government of India, NITI Aayog also provides relevant strategic and
technical advice to the Centre, States, and Union Territories

It is supported by two attached offices— Atal Innovation

PRIME MINISTER Mission (AIM) and Development Monitoring and Evaluation
(Chairperson) Office (DMEO)—and an autonomous body, National Institute
of Labour Economics Research and Development (NILERD).

Vice Chairperson Presented by: VINAY KUMAR NITI Aayog’s entire gamut of activities can be divided into
four main heads:
1. Policy and Programme Framework
3 Full-time 2. Cooperative Federalism
Members 3. Monitoring and Evaluation
4. Think Tank, and Knowledge and Innovation Hub

CEO The Governing Council of NITI Aayog comprises Chief

Ministers of all the States and Union Territories with
legislatures and Lt. Governors of other Union Territories.
NITI Aayog has been driving national efforts towards the
4 Ex-Officio 5 Special
widespread adoption of a methanol economy and
Members Invitees
development of Hydrogen Economy in India.
Aspirational Districts Programme (ADP) Geographic Information System (GIS) Energy
• 112 Aspirational Districts Map of India
• 3 C’s: Convergence, Collaboration, Competition • NITI Aayog, in collaboration with the Indian Space
• Five thematic categories: Research Organization (ISRO), has developed a
1. Health and Nutrition comprehensive Geographic Information System (GIS)
2. Education
Energy Map of India, with the support of the Energy

Presented by: VINAY KUMAR

3. Agriculture and Water Resources
Ministries.
4. Skill Development and Financial Inclusion
5. Basic Infrastructure
• The GIS map provides a holistic picture of all the
energy resources of the country, which enables
• ‘The Champions of Change’ dash board
visualization of installations such as power plants, oil
and gas wells, petroleum refineries, coal fields and
National Monetisation Pipeline (NMP) coal blocks, District-wise data on renewable energy
• Pursuant to the announcement made in the power plants, etc., through 27 thematic layers.
Union Budget, 2021– 22, NITI Aayog prepared
the National Monetisation Pipeline (NMP). Atal Innovation Mission (AIM) - 2016
• The NMP plans to raise ₹6 lakh crore through
core assets of the Central Government. • Flagship initiative to promote a culture of innovation
• It will unlock value from brownfield and entrepreneurship in the country.
• AIM has taken a holistic approach to nurture a problem-
infrastructure assets and serve as a medium-
solving innovative mindset among schoolchildren and
term roadmap for identifying potential
create an ecosystem of entrepreneurship in universities,
monetisation-ready projects across various
research institutions, private sector and MSME.
infrastructure sectors, including roads, • Atal Tinkering Labs (ATLs) is a flagship initiative of AIM
railways, aviation, power, oil and gas, and to nurture an innovative mindset amongst high-school
warehousing. students.
• NMP serves as roadmap for monetisation • Atal Incubation Centres (AICs) aim to foster the
of assets over a four-year period, from FY entrepreneurial spirit while creating a supportive
2022–25. ecosystem for start-ups and entrepreneurs in India.
 PROJECT SATH-E NO. Index
Project SATH-E, ‘Sustainable Action for Transforming Human 1. STATE : ENERGY & CLIMATE
Capital-Education’, was launched in 2017 to identify and build INDEX
three ‘role model’ States for the school education sector. 2. Healthy States, Progressive India:
• Jharkhand, Odisha and Madhya Pradesh were chosen. Health Index
NATIONAL MISSION ON TRANSFORMATIVE MOBILITY 3. National Multidimensional
AND BATTERY STORAGE Poverty Index (MDPI)
• To drive clean, connected, shared, sustainable, and 4. India Innovation Index (III)
holistic mobility initiatives in India, the National Mission 5. Export Preparedness Index (EPI)
on Transformative Mobility and Battery Storage was set
6. School Education Quality Index
up in NITI Aayog in March 2019.
• Phase II of the Faster Adoption and Manufacturing of (SEQI)
(Hybrid and) Electric Vehicles (FAME) scheme was 7. Composite Water Management
launched with an outlay of Rs 10,000 crore to promote Index (CWMI)
the manufacture of electric and hybrid vehicles and the
development of technology in this area PLI scheme
E-Amrit Portal • The PLI scheme is designed to
incentivize incremental production
• web portal on EVs, launched at the COP26 Summit.
for a limited number of eligible
• E-Amrit is a one-stop destination for all information on
EVs—their purchase, investment opportunities, policies,
anchor entities in the selected
subsidies, etc. sectors.
• The portal has been developed and hosted by NITI Aayog • These entities are required to invest
under a collaborative knowledge exchange programme with in technology, plant and machinery,
the UK government. Presented by: VINAY KUMAR
as well as R&D.
 EMPLOYMENT AND UNEMPLOYMENT
Labour Force Participation Rate (LFPR) Labour force: Part of the population which supplies
or offers to supply labour for pursuing economic
National Statistical Office (NSO), working activities for the production of goods and services
under MoSPI, launched Periodic Labour Force and therefore, includes both ‘employed’ and
Survey (PLFS) on April 2017. ‘unemployed’ persons.
Estimates of labour force indicators: Labour Force Participation Rate (LFPR) is the
• Labour Force Participation Rate (LFPR) percentage of population in the labour force.
• Worker Population Ratio (WPR) Worker Population Ratio (WPR) is defined as the
• Unemployment Rate (UR) percentage of workers in the population.
• Distribution of workers by broad status in Unemployment rate (UR) is defined as the
employment (CWS) in Urban areas percentage of unemployed persons in the labour
• Distribution of workers by broad status in force. Presented by: VINAY KUMAR
industry of work (CWS) in Urban areas
• Employment and unemployment indicators
in both ‘Usual Status’ (principal activity
status + subsidiary economic activity
status) and CWS in both rural and urban
areas annually

Centre for Monitoring Indian Economy

CMIE, or Centre for Monitoring Indian
Economy, is a leading business information
company. It was established in 1976, primarily
as an independent think tank.
 Quarterly Employment Survey (QES)
• The QES, conducted by the Labour • Results of four rounds of the QES have been released (Q1-Q4
Bureau, covers establishments with FY2022). The estimated total employment in the 9 selected
ten or more workers in nine major sectors according to the fourth round of QES (January to March
sectors viz. manufacturing, 2022) stood at 3.2 crore, which is nearly ten lakh higher than the
construction, trade, transport, estimated employment from the 1st round of QES (Apr-June 2021).
education, health, accommodation& • The increase in estimates of workers from Q1FY22 to Q4FY22 was
restaurants, IT/BPOs, financial services. driven by rising employment in sectors such as IT/BPO (by 17.6
• These nine sectors account for around lakh), health (7.8 lakh), and education (1.7 lakh), due to rising
83% of the total employment in digitisation and resurgence of services sector economy.
establishments with ten or more • Regular employees-86.4%, Contractual employees-formed a
workers as per the 6th Economic relatively small proportion of the workforce in these nine sectors,
Census (2013-14) conducted by MoSPI. except Manufacturing (12.4%) and Construction (19%).
 National Career Service (NCS) Project
• NCS Project was launched in July 2015, as a one-stop solution providing an array of employment and career-
related services.
• It works towards bridging the gap between candidates and employers; candidates seeking training and
career guidance and agencies providing training and career counselling.
• NCS portal has a job fair module to streamline the process of job fair activity on a single online platform by
engaging all stakeholders i.e. model career centres, nodal officers, job seekers and employers.
• It is also supported by a dedicated helpline (multi-lingual) for assisting users.
• As on 5 January 2023, 2.8 crore jobseekers and 6.8 lakh employers have registered in NCS portal, 2.5 lakh
active vacancies and 1.2 crore total vacancies have been mobilised, and more than 9,100 job fairs have
been organised as part of the Project.
• NCS has partnered with private sector under DigiSaksham programme to offer a free, self-paced
Online/Offline Training Programme on “Career Skills”, to equip the jobseekers with an array of soft and
digital skills with the mandate of improving their employability.
• This programme also includes advanced computing areas and is being provided free of cost.
• NCS is also working closely with Ministry of Education (AICTE/ AISHE) to ensure that its benefits are reaching
to prospective students/ candidates.
• Online integration with EPFO and ESIC has also been done to link the willing employers for enabling them to
shortlist right candidates through a countrywide database of workforce on NCS portal.
• NCS has also integrated with DigiLocker to enable candidates to upload their documents/ certificates and
make them available to the employers to quicken the hiring process.
• As per budget announcement of 2022-23, NCS portal has been successfully interlinked with e-Shram,
Udyam and Skill India portal (primary data source of ASEEM portal).
• More than 10 lakh candidates from e-Shram have registered on NCS out of which, more than 1.2 lakh
candidates have been shortlisted by employers for jobs. More than 46 lakh skilled candidates of Skill India
portal have been registered on NCS through data exchange. Integration between Udyam and NCS has
facilitated more than 4,76,650 MSME employers in getting seamless registration on NCS portal.
 POVERTY AND INEQUALITY
Poverty is a state or condition in which a person or community lacks the financial resources and
essentials for a minimum standard of living.
According to World Bank, Poverty is Absolute Poverty
pronounced deprivation in well-being, and
comprises many dimensions. A condition where household income is below a
It includes: necessary level to maintain basic living standards .
 Low incomes and the inability to acquire  This condition makes it possible to compare
between different countries and also over
the basic goods and services necessary
time.
for survival with dignity.
 It was first introduced in 1990, by the World
Poverty also encompasses: Bank, the “dollar a day” poverty line
 Low levels of health and education measured absolute poverty by the standards
 Poor access to clean water and of the world's poorest countries.
sanitation,  In October 2015, WB reset it to $1.90 a day.
 Inadequate physical security
 Lack of voice, and Relative Poverty
 Insufficient capacity and opportunity to
better one's life.  It is defined from the social perspective that is
living standard compared to the economic
• In India, 21.9% of the population lives below standards of population living in surroundings.
the national poverty line in 2011. Hence, it is a measure of income inequality.
In 2018, almost 8% of the world’s workers and  Usually, relative poverty is measured as the
their families lived on less than US$1.90 per percentage of the population with income less
person per day (international poverty line). than some fixed proportion of median income.
Presented by: VINAY KUMAR
 Poverty Rate/ Ratio
• Also known as ‘Headcount Ratio’.
• It is the percentage of population
earning income below the poverty
line.
• Previously Planning Commission
used to estimate HCR, and currently
NITI Aayog publishing MPI annually.

Poverty Line
The poverty line defines a threshold income
required to acquire the minimum needs of life.
Committee Rural Urban
Lakdawala 2400 kcal 2100 kcal
Suresh MPCE ₹673 MPCE ₹860
Tendulkar
C. Rangarajan ₹4800/ ₹7050/
Month/ Month/
Family of Five Family of Five Presented by: VINAY KUMAR
MULTI-DIMENSIONAL POVERTY
India's scale of multidimensional
poverty reduction over the decade from
2005-06 to 2015-16, from 635 million
persons to 364 million, indicates that
around 271 million people could come
out of Poverty.
According to Global MPI 2021, India’s
rank is 66 out of 109 countries.
• MPI score of 0.123
• 27.91% headcount ratio.
• For first time Global MPI is
disaggregated by ethnicity or race (for
40 countries with available
information), by caste (for India) and
by gender of the household head (for
108 countries)
• Top 5 countries with MPI: India
(2015/16) at 381 millions, followed by
Nigeria at 93 million, Pakistan, Ethiopia,
Democratic Republic of the Congo.
Presented by: VINAY KUMAR
NITI Aayog’s National Multidimensional
Presented by: VINAY KUMAR Poverty Index
 NITI Aayog’s National Multidimensional Poverty Index-2021

Presented by: VINAY KUMAR

 WORLD INEQUALITY REPORT-2022

Presented by: VINAY KUMAR

 Gini-Coefficient & Lorenz Curve Land Reforms,
• Gini coefficient is a popular tool to measure Irrigation, Inputs
income distribution inequalities globally.
• Lorenz curve is the graphical representation
of this inequality and intimately related to the Green Revolution, PDS

Poverty Alleviation Strategies

Gini coefficient.
• Gini coefficient ranges from 0 (or 0%) to 1 (or
100%), with 0 representing perfect equality Self-Employment
and 1 representing perfect inequality. Wage Employment, SHGs

Education, Health, Nutrition,

ICDS

Housing, Slums Upgradation

Presented by: VINAY KUMAR

Skilling, Reskilling, Up skilling

Social Security
Financial Inclusion
 POVERTY AND HUMAN DEVELOPMENT
Gross Domestic Product, or GDP, is a very
crude indicator of the economic
achievements of a nation.

The human development concept

emerged 30 years ago precisely as a
counterpoint to myopic definitions of
development.

Human development is about

empowering people to identify and
pursue their own paths for a meaningful
life, one anchored in expanding freedoms.

HDI is a summary measure of average achievement in key dimensions of human development:

a long and healthy life, being knowledgeable and have a decent standard of living. The HDI is
the geometric mean of normalized indices for each of the three dimensions.
Presented by: VINAY KUMAR
• In 2022, India saw improvements across all
HDI indicators — life expectancy, education,
and gross national income (GNI) per capita
and life expectancy rose from 67.2 to 67.7
years, expected years of schooling reached
12.6, mean years of schooling increased to
6.57 and GNI per capita saw an increase
from USD 6,542 to USD 6,951.
• Moreover, India demonstrated progress in
reducing gender inequality. The country’s GII
value of 0.437 is better than the global and
South Asian averages, according to the
report.
Global MPI India’s MPI
 24.82 crore Indians escape Multidimensional Poverty in last 9 years.
 Steep decline in Poverty Headcount Ratio from 29.17% in 2013-14 to 11.28% in
2022-23.
 All 12 MPI indicators show significant signs of improvement.
 Uttar Pradesh, Bihar, and Madhya Pradesh recorded largest decline in the
number of MPI poor between 2013-14 and 2022-23.
 Poorer states record faster decline in poverty – indicating reduction in
disparities
 India is likely to achieve SDG Target 1.2 (reducing multidimensional poverty by
at least half) much ahead of 2030.
 Drivers Helped in Declining MPI
 Initiatives like Poshan Abhiyan and Anemia Mukt Bharat have
significantly enhanced access to healthcare facilities, leading to a
substantial decrease in deprivation.
 Operating one of the world's largest Food Security programs,
the Targeted Public Distribution System under the National Food
Security Act covers 81.35 crore beneficiaries, providing food grains to
rural and urban populations.
 Recent decisions, such as extending free food grain distribution
under Pradhan Mantri Garib Kalyan Anna Yojana for another five years,
exemplify Government's commitment.
 Various programs addressing maternal health, clean cooking fuel
distribution through Ujjwala Yojana, improved electricity coverage via
Saubhagya, and transformative campaigns like Swachh Bharat
Mission and Jal Jeevan Mission have collectively elevated living
conditions and overall well-being of people.
 Additionally, flagship programs like Pradhan Mantri Jan Dhan
Yojana and PM Awas Yojana have played pivotal roles in financial
inclusion and providing safe housing for the underprivileged.
The Multi-dimensional Poverty Index developed by Which of the following can aid in furthering the
‘Oxford Poverty and Human Development initiative Government’s objective of inclusive growth?
with UNDP support covers which of the following? 1. Promoting Self-Help Groups
1. Deprivation of education, health, assets and 2. Promoting Micro, Small and Medium
services at household level. Enterprises
3. Implementing the Right to Education Act
2. Purchasing power parity at national level.
Select the correct answer:
3. Extent of budget deficit and GDP growth rate at
(a) 1 only (b) 1& 2 only (c) 2& 3 only (d) 1, 2 and 3
national level.
Select the correct answer: How does the National Rural Livelihood Mission
(a) 1 only (b) 2 and 3 only seek to improve livelihood options of rural poor?
(c) 1 and 3 only (d) 1, 2 and 3 1. By setting up a large number of new
manufacturing industries and agribusiness
How do District Rural Development Agencies (DRDAs) centres in rural areas.
help in the reduction of rural poverty in India? 2. By strengthening ‘self-help groups’ and
1. DRDAs act as Panchayati Raj Institutions in certain providing skill development.
specified backward regions of the country. 3. By supplying seeds, fertilizers, diesel pump-
2. DRDAs undertake area-specific scientific study of sets and micro-irrigation equipment free of
the causes of poverty and malnutrition and prepare

Presented by: VINAY KUMAR

cost to farmers.
detailed remedial measures. Select the correct answer:
3. DRDAs secure inter-sectoral and inter-departmental (a) 1& 2 only (b) 2 only (c) 1& 3 only (d) 1, 2 and
coordination and cooperation for effective
implementation of anti-poverty programmes. In a given year in India, official poverty lines are
4. DRDAs watch over and ensure effective utilization of higher in some States than in others because
the funds intended for anti-poverty programmes. (a) poverty rates vary from State to State
Which of the statements given above is/are correct? (b) price levels vary from State to State
(a) 1, 2 and 3 only (b) 3 and 4 only (c) GSDP varies from State to State
(c) 4 only (d) 1, 2, 3 and 4 (d) quality of PDS varies from State to State
 ECONOMIC SURVEY 2021-22 Sustainable Development Goals India Index
• India State of Forest Report-2021 • The SDG-India Index has been
• Plastic Waste Management Amendment Rules, ‘21 comprehensively documenting and ranking the
• Namami Gange- Nirmal, Aviral, Jan, Gyan Ganga progress made by the States and UTs towards
• National Mission for Clean Ganga achieving the Sustainable Development Goals.
• National Clean Air Programme (NCAP) • The third edition was released in June 2021.
• NAPCC- CCAP • This year, the top three States were Kerala;
• National Adaptation Fund on Climate Change Himachal Pradesh and Tamil Nadu (tied at the
• Nationally Determined Contributions (NDC) second position); Andhra Pradesh, Goa,
under the Paris Agreement Karnataka and Uttarakhand (tied at the third
• Lifestyle for Environment (LIFE) position), respectively.
• International Solar Alliance (ISA) • The SDG India Index 2020–21 is more robust
• Coalition for Disaster Resilient Infrastructure than the previous editions on account of wider

Presented by: VINAY KUMAR

(CDRI) coverage of targets and indicators.
• Leadership Group for Industry Transition • The 115 indicators incorporate 16 of the 17
(LeadIT Group). SDGs, with a qualitative assessment of Goal
• Green Grids Initiative-One Sun One World One 17, and cover 70 SDG targets.
Grid (GGI–OSOWOG)-World Leaders’ Summit • This is an improvement over the 2018–19 and
• National Hydrogen Mission 2019–20 editions of the index, which had
• 20 per cent ethanol blending in petrol by 2025 utilized 62 indicators across 39 targets and 13
(savings of USD 4 billion foreign exchange per Goals, and 100 indicators across 54 targets and
year in imports) 16 Goals, respectively.
• Pradhan Mantri Kisan Urja Suraksha evam SDG-Urban Index: Shimla, Coimbatore, and
Utthaan Mahabhiyan (PM-KUSUM)- (RBI) PSL Chandigarh and Thiruvananthapuram (tied at the third
• Development of Solar Parks and Ultra Mega position), respectively, were adjudged the top three
Solar Power Projects urban areas.
Presented by: VINAY KUMAR
Progress on Eight National Missions of the NAPCC
 SKILL DEVELOPMENT
Skill India Mission Pradhan Mantri Kaushal Vikas Yojana (PMKVY)
• Launched in 2015, Skill India Mission PMKVY has 2 training components, viz., Short Term
focuses on re-skilling and up-skilling in Training (STT)& Recognition of Prior Learning (RPL).
prominent trades. • Between 2016-17 and 2021-22 (as on 15 January
• Under the Mission government 2022 ), under PMKVY 2.0 about 1.10 crore persons
implements were trained.
o Pradhan Mantri Kaushal Vikas Yojana • Under Pradhan Mantri Kaushal Kendras (PMKKs),
Short term Skill

(PMKVY) from 2016- 17 to 2021-22, 16.35 lakh persons

Development

o Jan Shikshan Sansthan (JSS) Scheme were trained and over 78 percent of them were
o National Apprenticeship Promotion certified.
Scheme (NAPS) • Special project has been launched to revive the
o Craftsman Training Scheme (CTS), for traditional Namda craft of Jammu & Kashmir and
long term training, to the youth. upskilling of Weavers & Artisans of traditional
crafts of Nagaland and Jammu and Kashmir.
Jan Shikshan Sansthan (JSS) Scheme Recognition of Prior Learning (RPL): RPL’s objectives
• JSS aims to provide vocational skills to non- are
literate, neo-literates, persons with (i) to align the competencies of the unorganized
rudimentary level of education up to 8th workforce of the country with the standardized
and school dropouts up to 12th standard in National Skill Qualification Framework;
the age group of 15-45 years. (ii) To enhance the opportunities for employment
• The priority groups are women, SC, ST, and provide alternative means for higher
minorities, divyangjan and other backward education;
sections of the society. (iii) to provide opportunities for reducing inequalities
Presented by: VINAY KUMAR
National Apprenticeship Promotion Scheme India International Skill Centre (IISC) Network
• This Scheme promotes apprenticeship • IISC Network is catering to the needs of foreign
training and the engagement of apprentices countries where Indian manpower is in demand.
by providing financial support to industrial • The IISC Network is a fee-based market driven
establishments undertaking apprenticeship model; based on global workforce supply and
program under The Apprentices Act, 1961. demand dynamics.
• As on 31 October 2021, 4.3 lakh apprentices • It provides incremental skill training on
engaged under the scheme. international standards and assessment of skills
for overseas employment.
Craftsmen Training Scheme (CTS) • India has agreements with Germany, Belarus,
United Kingdom, France, Australia, Japan and
Craftsmen Training Scheme (CTS) CTS is for Qatar in the field of apprentices/training.
providing long-term training in 137 trades
through 14,604 Industrial Training Institutes (ITIs) Pradhan Mantri Dakshta Aur Kushalta Sampann
across the country. Hitgrahi Yojana (PM-DAKSH)
Aatmanirbhar Skilled Employees Employer • PM-DAKSH Yojana is a national action plan for
Mapping (ASEEM) portal skilling of marginalized persons including
scheduled castes, backward classes and safai
• ASEEM, a digital platform, created to match karamcharis.
supply of skilled workforce with the market • The eligible target group are being Social
demand, acts as a directory of skilled Infrastructure& Employment provided skill
workforce. development training programmes up-skilling/
As on 31.12.2021, 1.38 crore candidates have re-skilling, short term training programme, long
been registered on the portal including term training programme and entrepreneurship
candidates registered on Skill India Portal (SIP). development program. Presented by: VINAY KUMAR
Disguised unemployment generally means
(a) Large number of people remain unemployed
(b) Alternative employment is not available
(c) Marginal productivity of labour is zero
(d) Productivity of workers is low
With reference to ‘National Skills Qualification Framework (NSQF)’, which of the statements
given below is/are correct?
1. Under NSQF, a learner can acquire the certification for competency only through formal
learning.
2. An outcome expected from the implementation of NSQF is the mobility between vocational
and general education.
Select the correct answer using the code give below:
(a) 1 only (b) 2 only
(c) Both 1 and 2 (d) Neither 1 nor 2
With reference to Pradhan Mantri Kaushal Vikas Yojana, consider the following statements:
1. It is the flagship scheme of the Ministry of Labor and Employment.
2. It, among other things, will also impart training in soft skills, entrepreneurship, financial and
digital literacy.
3. It aims to align the competencies of the unregulated workforce of the country to the
National Skill Qualification Framework.
Which of the statements given above is/are correct?
(a) 1& 3 only (b) 2 only (c) 2& 3 only (d) 1, 2 and 3 Presented by: VINAY KUMAR
 EDUCATION
PM-eVIDYA PM e-Vidya unifies all efforts related to digital/online/ on-air education to enable coherent
(2020) multi-mode access to education. The four components of PM e-VIDYA for school education are:
One Nation, One Digital Education (DIKSHA) Platform; One Class, One TV channel through
Swayam Prabha TV Channels; Extensive use of Radio, Community Radio and Podcasts; and For
the differently-abled: One DTH channel is being operated specifically for hearing impaired
students in sign language. For visually and hearing-impaired students, study material has been
developed in Digitally Accessible Information System (DAISY) and in Sign Language; both are
available on the NIOS website/ YouTube.
National Digital A digital infrastructure for Education. It will be set up within the context of a Digital-First
Education Mindset where the Digital Architecture will not only support teaching and learning activities
Architecture but also educational planning, governance administrative activities of the Centre and the States
(NDEAR) Union Territories. It will provide diverse education eco-system architecture for development of
(2021) digital infrastructure, a federated but inter-operable system that will ensure autonomy of all
stakeholders, especially States and UTs
Vidyanjali To connect the Government and Government aided schools through a community/ volunteer
(2021) management program; Vidyanjali portal enables the community/volunteers to interact and
connect directly with schools of their choice to share their knowledge and skills as well as
contribute in the form of assets/material/equipment.
Unnat Bharat To cater the rural local needs by leveraging higher education; To engage reputed higher
Abhiyan educational institutions (central& state; public& private) to understand and work in rural areas.
As of now 2897 institutions are participating and they have adopted close to 14500 villages.
e-PGPathshala e-PGPathshala has been offered as an Online Gateway of Post Graduate Courses. 154
Universities have come on board for accepting credit transfer for courses offered through
SWAYAM platform till now, thereby boosting mainstreaming of Massive Online Open Courses
(MOOCs). 778 papers, with 23000 plus e-modules in 67 Subjects have been developed.
 PM Schools for Rising India (PM-SHRI) The National Curriculum Framework (NCF)
• The Government launched a Centrally • NCF for Foundational Stage has been launched as the
Sponsored Scheme (CSS) called PM Schools new 5+3+3+4 curricular structure which integrates
for Rising India (PM SHRI) on 7 Sept, 2022. early childhood care and education (ECCE) for all
• These schools will be equipped with modern children of ages 3 to 8.
infrastructure, showcase the implementation • As articulated in NEP 2020, the NCF uses ‘play,’ at the
of the NEP and emerge as exemplary schools core of the conceptual, operational, and transactional
approaches to curriculum organisation, pedagogy, time
over a period of time, while offering
and content organisation, and the overall experience of
leadership to other schools in the
the child.
neighbourhood. It will deal with the role of teachers as well as parents and
• Under the scheme, there is a provision for communities in enabling and enhancing the
setting up more than 14,500 PM SHRI Schools, developmental outcomes that are sought during this stage.
over the period FY23 to FY27 by strengthening
the existing schools from those managed by National Credit Framework (NCrF)
Central Government or State or Union
Territories Government or local bodies. NEP: NCrF is an umbrella framework for skilling, re-
• These schools will be equipped with modern skilling, up-skilling, accreditation, evaluation, seamlessly
infrastructure including labs, smart integrating the credits earned through school education,
classrooms, libraries, sports equipment, art higher education, and vocational and skill education by
encompassing the National Higher Education
room etc. which is inclusive and accessible.
Qualification Framework (NHEQF), National Skills
• They shall also be developed as green schools
Qualification Framework (NSQF) and National School
with water conservation, waste recycling, Education Qualification Framework (NSEQF).
energy-efficient infrastructure and integration This would open numerous options for further progression
of organic lifestyle in curriculum. of students, inter-mingling of school and higher education
• More than 20 lakh students are expected to be with vocational education and experiential learning, thus
direct beneficiaries of the scheme. mainstreaming skilling and vocational education.
Major initiatives from 2014 to 2022 for better overall health

• Eight states have already achieved the

SDG target to reduce MMR to less
than 70 per lakh live births by 2030.
• These include Kerala (19),
Maharashtra (33), Telangana (43)
Andhra Pradesh (45), Tamil Nadu (54),
Jharkhand (56), Gujarat (57), and
Karnataka (69).
 HEALTH Programmes and Schemes for Health Sector
• Vision of Ayushman Bharat is to achieve the universal health coverage.
and Wellness Centres (AB-
Ayushman Bharat Health

• It adopts a continuum of care approach, comprising of two inter-related components. The

first component is creation of 1,50,000 Health and Wellness Centres (HWCs) which cover
both, maternal and child health services and non-communicable diseases, including free
essential drugs and diagnostic services.
HWCs)

• These ABHWCs provide Comprehensive Primary Health Care (CPHC), by expanding and
strengthening the existing Reproductive & Child Health (RCH) services and Communicable
Diseases services and by including services related to Non-Communicable Diseases.
• It is also envisaged to incrementally add primary healthcare services for mental health, ENT,
Opthalmology, Oral health, Geriatric and Palliative health care and Trauma care as well as
Health promotion and wellness activities like Yoga. Presented by: VINAY KUMAR

• PM-JAY is being implemented by the National Health Authority (NHA) in partnership with
Mantri Jan Arogya Yojana (AB-

state governments.
Ayushman Bharat Pradhan

• The scheme provides a health cover of ₹5 lakhs per family per year for secondary and
tertiary care hospitalization to over 10.74 crores poor and vulnerable families in the
bottom 40 percent of the Indian population.
• As on 19th January 2022, total of 17.5 crore Ayushman Cards have been issued under AB
PMJAY)

PM-JAY. A total of 2.73 crore authorized hospital admissions worth ₹30673 crore have been
provided through a network of approximately 25000 hospitals.
• A massive information, education and communication drive “Aapke Dwar Ayushman” was
carried out in 2021 with the support of grassroot resources such as frontline workers,
healthcare workers and Panchayati Raj Institutions.
• This led to the identification and verification of more than 4 crore people under the
scheme.
 HEALTH PROGRAMMES AND SCHEMES FOR HEALTH SECTOR
PM-Ayushman Bharat It is a mission to develop the capacities of primary, secondary, and tertiary care health
Health Infrastructure systems, strengthen existing national institutions, and create new institutions, to cater
Mission (PM-ABHIM) to detection and cure of new and emerging diseases. It is the largest pan-India scheme
for public health infrastructure since 2005.
Pradhan Mantri It is being implemented to correct regional imbalances in the availability of affordable
Swasthya Suraksha reliable tertiary healthcare services and to augment facilities for quality medical
Yojana (PMSSY) education in the country. Under PMSSY, construction of 22 new AIIMS and 75
Government Medical College up-gradation Projects taken up for implementation. Six (6)
AIIMS at Bhopal, Bhubaneswar, Jodhpur, Patna, Raipur and Rishikesh are already fully
functional. Another Sixteen (16) AIIMS under various phases have been sanctioned.
Ayushman Bharat 2021; Aim to develop the backbone necessary to support the integrated digital health
Digital Mission (ABDM) infrastructure; To bridge the existing gap amongst different stakeholders of the
National Digital Health healthcare ecosystem through digital highways; Services like the issue of Health ID,
Mission (NDHM) Healthcare Professionals Registry (HPR), Health Facility Registry (HFR) and Health
Records (PHR) have been initiated
e-Sanjeevani An innovative, indigenous, cost-effective, integrated cloud-based telemedicine system
application to enable patient-to-doctor teleconsultation to ensure a continuum of care
and facilitate health services to all citizens in the confines of their homes, free of cost.
eSanjeevani–National Telemedicine Service of India has evolved into the world’s largest
outpatient services system.
National Deworming A fixed-day approach to treating intestinal worm infections in children aged 1-19 years
Day (NDD) -2015 with Albendazole tablets; It is held every year on 10 February and 10 August through
schools and Anganwadis, followed by mop-up days to cover those left out due to
absenteeism or sickness. Besides Government and Government-aided schools and
Anganwadis, special efforts are made to reach out-of-school children, and private schools
have also enthusiastically joined the programme.
 QUESTIONS IN CSP-2022
In India, which one of the following compiles With reference to Ayushman Bharat Digital Mission,
information on industrial disputes, closures, consider the following statements:
retrenchments and lay-offs in factories employing 1) Private and public hospitals must adopt it.
workers? 2) As it aims to achieve universal health coverage,
(a) Central Statistics Office every citizen of India should be part of it ultimately.
(b) Department for Promotion of Industry and 3) It has seamless portability across the country.
Which of the statements given above is/are correct?
Internal Trade
(a) 1 and 2 only
(c) Labour Bureau
(b) 3 only
(d) National Technical Manpower Information (c) 1 and 3 only
System (d) 1, 2 and 3

Employment:
• Annual Employment/Unemployment Survey
• Quarterly Employment Survey
Wages:
Index Numbers: • Occupation-wise Wages- All India
• CPI (Industrial Workers) • Rural Wage Rate
• CPI (Agricultural/ Rural Labourers) Publications:
• Wages Rate Index • Monthly: Wage Rates in Rural India
All India Survey: • Annual:
• Migrant Workers Survey  Report on the working of Maternity Benefit Act
• Domestic Worker Survey  Report in Statistics on Industrial Disputes,
• All India Quarterly Establishment-based Closures, Retrenchments and Layoffs in
Employment Survey Industries in India