ECONOMY by VIVEK SINGH

2023-08-15 06:39:27 Wish you all a very Happy Independence Day. Open / Comment

2023-08-14 13:34:55 Source: Indian Express

India is the top recipient of Remittances in the world. It received $112.5 billion in remittances in FY 2022-23.

USA was the top source with a share of 23.4% in total remittances followed by UAE (18%), UK (6.8%), Singapore (5.7%), Saudi Arabia (5.1%). Open / Comment

2023-08-14 13:33:50 The answer to the above question is (b).

As per FRBM Act 2003,

The following statements should be laid before both the houses of the parliament along with the budget document:
1. Medium Term Fiscal Policy Statement
2. Fiscal Policy Strategy Statement
3. Macroeconomic Framework Statement

And 'Medium-Term expenditure Framework Statement’ should be laid in the session immediately following the session of the Parliament in which the budget has been presented Open / Comment

2023-08-11 06:20:19 For FY 2023-24:
Economic Growth projection: 6.5%
Inflation (Retail) projection: 5.4%

RBI kept the repo rate unchanged at 6.5% as inflation has again started inching up due to vegetable and food prices.

Going forward RBI will be focussing on 'withdrawal of accomodation' i.e. the easy money policy which RBI had followed post Covid, RBI will keep on withdrawing that policy which means RBI will reduce money supply to bring the inflation under target (4%) but it will keep 'economic growth in mind'.

Because of the deposition of Rs. 2000 currency note in banks... liquidity in banks have increased, so RBI has asked banks to maintain an 'Incremental CRR' of 10%. So, whatever money banks have received from public deposit (called Net Demand and Time Liabilities) between May 19 to July 28, on that deposit 10% CRR needs to be maintained, otherwise it is 4.5%.


Additional measures announced by RBI

Conversational Payments and Off-line Capability on UPI; Enhancement in Transaction Limit of Small Value Off-line Digital Payments
With the objective of harnessing new technologies for enhancing the digital payments experience for users, it is proposed to (i) enable “Conversational Payments” on UPI, which will enable users to engage in conversation with AI-powered systems to make payments; (ii) introduce offline payments on UPI using Near Field Communication (NFC) technology through ‘UPI-Lite’ on-device wallet; and (iii) enhance the transaction limit for small value digital payments in off-line mode from ₹200 to ₹500 within the overall limit of ₹2000 per payment instrument. These initiatives will further deepen the reach and use of digital payments in the country. Open / Comment

2023-08-11 06:07:42 Source: The Hindu Open / Comment

2023-08-10 17:18:27 Source: Budget 2023-24 Open / Comment

2023-08-09 18:05:12 The above is list of 11 Nationalized Banks which were Nationalized in1969 (14 banks) and 1980 (6 banks) through "THE BANKING COMPANIES (ACQUISITION AND TRANSFER OF UNDERTAKINGS) ACT, 1970 and 1980 (Also referred as Bank Nationalization Act)". Later on various Nationalized banks were merged together, so now only 11 Nationalized Banks exist.

Nationalization means (forceful) acquisition of a private entity by Government.

Imperial Bank was created in 1921 by merging three Presidency banks viz. Bank of Bengal, Bank of Bombay and Bank of Madras. This Imperial Bank was converted into State Bank of India [Through State Bank of India Act 1955] where Govt. of India owned majority of the stake/shares through RBI. So, SBI ownership was transferred to RBI and RBI was owned by Govt. of India. In 2007-08, the entire shareholding (around 60%) of RBI in SBI was transferred to Govt. of India so as to remove any conflict of interest as the RBI is the country's banking regulatory authority.

So, SBI is a Public Sector Bank, but RBI does not list it under 'Nationalized Banks', rather it writes it separately may be because Govt. of India did not directly acquired SBI, rather RBI took control of the SBI in1955. Although we generally say that SBI is a nationalized Bank and it is also mentioned on SBI website, but RBI declares only those banks as 'Nationalized Banks' which were acquired by Govt. through the Bank Nationalization Act.

This was just for your information and clarification. Open / Comment

2023-08-09 17:43:15 Source: RBI Open / Comment

2023-08-08 15:21:03 Terms of the day: Trade Creation and Trade Diversion

Trade creation occurs when a Free Trade Agreement (bilateral or between a group of countries) leads to an increase in trade between member countries, resulting in overall economic benefits for the group.

Trade diversion occurs when because of the signing of a Free Trade Agreement (FTA) there is a shift in trade patterns away from more efficient producers outside the group (trade block) towards less efficient producers within the group. In other words, trade diversion occurs when a country or group replaces more efficient producers from non-member countries with less efficient producers from member countries, resulting in overall economic inefficiencies. For example, earlier India was importing some product from Germany but now we started importing from UAE because we signed a trade deal/FTA with UAE and the customs duty exemption offered to traders from UAE resulted in cheaper imports from UAE. Open / Comment

2023-08-07 11:36:44 Economy Mains Questions and Model Answers 2023.

I have added draft answers of 10 more questions. This is all from my side. Rest questions are straightforward and you can do on your own. Open / Comment