ECONOMY by VIVEK SINGH

2024-04-11 12:34:18 Question of the Day:

Consider the following statements:

1. Under the Old Pension Scheme (OPS), the monthly pension is exempt from tax

2. Under the New Pension Scheme (NPS), the lump sum amount that some one gets at maturity (60 years) is taxable Open / Comment

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2024-04-04 06:03:42 The issue of Kerala Govt. Borrowing

[As per article 293 of the Constitution: A State may not without the consent of the Government of India raise any loan if there is still outstanding any part of a loan which has been made to the State by the Government of India]

Kerala in its 'Fiscal Responsibility Act 2003' has put a limit of fiscal deficit of 3% (of GSDP) and in some cases it can go to 3.5%. The fact is, Kerala Govt. has already borrowed from Centre (there are certain pending dues which Kerala owe to Centre).

Now, Kerala wants to borrow more from the market (in which case its fiscal deficit will increase beyond 3% or 3.5% which Kerala may do by amending its Fiscal Responsibility Act) for expenditure on social sectors. But since Kerala has already (pending) debt from Centre, So centre is not giving permission to Kerala for further borrowing because centre wants Kerala to keep its fiscal deficit limit to 3% of GSDP.

The above issue is being debated in Supreme Court. Now, Supreme Court on Monday referred the case to a Constitution Bench.

https://bit.ly/3SdghTR Open / Comment

2024-04-04 05:49:23 Source: Indian Express
A good Comparison of Indian and Chinese Economy.
https://bit.ly/3SdghTR Open / Comment

2024-04-01 05:51:32 The dependence of an economy on another economy is calculated as the ratio of their bilateral trade over the total trade of the dependent economy.

For example if we want to calculate the dependence of India on China then it can be calculated as:

Bilateral trade of India with China/India's total trade

= $136 billion/$1660 billion = 0.08 = 8% Open / Comment

2024-03-30 09:03:39 The answer to the above question is (a) i.e. only 1 statement is correct

Explanation:
If a foreign investor is coming to India for making investment that means he is going to purchase Land and machinery and other materials in India to set up business/factory.

Now if rupee is depreciating (in nominal terms without increase in inflation) then the foreign investor will get more rupees per dollar and he will be able to purchase more land/machinery/material in the same dollar, so he will get attracted to invest in India. But if rupee depreciates in nominal terms because of higher inflation then the gain from the rupee depreciation (for the investor) will cancel out because of the higher inflation as the price of land/machinery/materials will also increase.

Now if rupee is depreciating in real terms that means our goods (land/machinery/materials) are becoming relatively cheaper so it will attract foreign investors for investment in India.
If rupee is depreciating in real terms that means after taking into account the effect of inflation, rupee is actually depreciating which makes our goods relatively cheaper and attracts investment in India.

If rupee depreciates in nominal terms let us say by 10% and inflation also is higher in India proportionately then both will cancel out and rupee will not depreciate in real terms. But if rupee depreciates in nominal terms by 10% and inflation is higher in India just by 2% then rupee will depreciate in real terms which makes our products competitive i.e. investment in India will be attractive.

https://bit.ly/3SdghTR Open / Comment

2024-03-29 09:04:21 Question of the Day

Which of the following will make Foreign Direct Investment (FDI) inflow attractive in a country:

1. If that country's Real Effective Exchange Rate (REER) depreciates

2. If that country's Nominal Effective Exchange Rate (NEER) depreciates (because of higher inflation) Open / Comment

2024-03-29 07:49:19 Co-branded Credit Cards
Source: LiveMint
https://bit.ly/3SdghTR Open / Comment

2024-03-28 17:53:27 *ABHYAN 2024* - Countdown Begins . .
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2024-03-24 11:17:11 Govt. of India has brought Rice and Wheat under Price Stabilization Fund (PSF) Scheme.

Earlier Potato, Onion, Pulses were included under the PSF scheme which NAFED and NCCF used to procure from farmers (at harvest time) and release in the (retail) market if the prices used to increase. Now, NAFED and NCCF will purchase Wheat and Rice from Food Corporation of India (FCI) and release it in the market ( under Bharat Atta, Bharat Rice brad). Open / Comment