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GS Paper 3: ECONOMY
INTERNATIONAL
RELATIONS
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PAPER-VI: GENERAL STUDIES-III (200 MARKS)

UNIT–I
SUB UNIT–1

• Characteristics of Indian Economy:

• Demographic Profile, Demographic Dividend and Population Policy.
• Sectoral Composition with respect to contribution to Gross Domestic Product (GDP) and
• Employment.
• Poverty and Inequality, Unemployment, Inflation in India.
• Industrial Growth in India.
• Regulatory framework for money and banking: Reserve Bank of India (RBI), Commercial
• banks and Regional Rural Banks.
• Monetary policy, Foreign exchange, Balance of Payment Scenario.
• Foreign Trade: Policy, Composition and Direction, Impact of Liberalization / Privatization and
Globalization.

UNIT–I
SUB UNIT–2

• Economic Planning in India.

• Five Year Plans: strategies and outcomes, Public / Private / Joint Sectors.

• Fiscal Policy, Fiscal Responsibility and Budget Management Act, 2003, Debt and
• Investment in India: Current Status, Growth and Development experience including Natural
Resource Management.
• Sustainable development and Inclusive growth.
• Measurement of economic development: Physical Quality of Life Index (PQLI),
• Millennium Development Goals, Human Development Index (HDI) / Gender
• Development Index (GDI) / Gender Empowerment Measure (GEM).

• Latest / Current Development Schemes / Initiatives / Institutional Changes (e.g. Swachh

Bharat Mission, Make in India, Digital India, Mahatma Gandhi National Rural Employment
Guarantee Scheme (MGNREGS), National Institution for Transforming India (NITI) Aayog
etc.).

• International Financial and Economic Organizations: International Monetary Fund (IMF),

• World Trade Organization (WTO), International Bank for Reconstruction and Development
(IBRD), International Development Association (IDA), United Nations Conference on Trade
and Development (UNCTAD), Organization for Economic Cooperation and Development
(OECD), Brazil, Russia, India, China and South Africa (BRICS).
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UNIT–I
SUB UNIT–3
• Economy of Himachal Pradesh:
• Demographic profile and Human resource, Sectoral distribution of Gross State
• Domestic Product (GSDP).
• Diversification in Agriculture and allied activities, Land tenure and size of land
• holdings.
• Industrialization in the state.
• Skilled / Unskilled labour.
• Revenue generation with special reference to hydro potential, tourism, flora and fauna.
• Cottage and Small-Scale Industries.
• Tax base, Pros and Cons of Special Category status.
• Appraisal of education, Health, Physical and Financial Infrastructure Development.

➢ Note: —All the topics / subjects covered under SUB UNIT-3 are relevant to the State of
Himachal Pradesh.
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Q1. A good part of the world’s population is growing older, and India mirrors this trend as well.
Examine the issues India has to face due to the shift in its population structure. What steps has the
government taken to address them? 20 Marks

Understanding of question:

Directive Explain in detail

Introduction ➢ Ageing is a natural stage of human life. Population

ageing is a global phenomenon, with the number of
elderly increasing across the world, India is no
exception.
➢ The global population is growing as well as ageing as
observed in a report by the United Nations Population
Fund (UNFPA).

Main Body

Conclusion

➢ Intro-
• Ageing is a natural stage of human life. Population ageing is a global phenomenon, with the
number of elderly increasing across the world, India is no exception.
• The global population is growing as well as ageing as observed in a report by the United
Nations Population Fund (UNFPA).
• Data on elderly population
▪ Worldwide: There are more older people on the globe now than ever before in the
history of humanity. In 2022, the number above 60 was 1.1 billion, comprising 13.9 %
of the population. By 2050, the number of older people is expected to increase to 2.1
billion, constituting 22%.
▪ India: India is not far behind. It had 149 million older adults (10.5%) in 2022, this figure
will grow to 347 million (20.8%) by 2050 according to projections.

➢ Body
• The age structure of the population is changing owing to demographic transition with
increasing levels of life expectancy and decreasing levels of fertility in almost all countries,
leading to an increase in both the share and number of older persons across the world.
• According to the United Nations Population Fund’s India Ageing Report 2023, the population
above 60 years will double from 10.5% or 14.9 crore (as on July 1, 2022) to 20.8% or 34.7 crore
by 2050.
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• The report 2023 also points out that access to social security schemes for older persons with
disability remains far less. According to the report around 32% of the elderly with hearing and
vision impairments availed the social insurance scheme. Of the total elderly population,
around 2.5% have hearing impairment and 3.7% have vision impairment.

• With one in five individuals set to be a senior citizen, there will be challenges/implications
that are listed below-

✓ Three aspects of ageing that create significant challenges are:

a) women living longer than men (feminization) resulting in higher levels of widowhood
and associated socio-cultural and economic deprivations and dependencies-
• Gender disparities exist at all ages but when women become old, the
consequences become more acute. Poverty is inherently gendered in
old age when older women are more likely to be widowed, living alone,
with no income and with fewer assets of their own, and fully dependent
on family for support.
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b) High proportion of rural population among the elderly (ruralization)-

• According to Census of India 2011, on an average, 71 percent of older persons
live in rural areas. Large parts of rural India are still remote with poor road and
transport access.
• Income insecurity, lack of access to adequate and quality healthcare and
isolation are, therefore, more acute for the rural elderly than their urban
counterparts.
• Rural–urban differentials indicate that ageing is more pronounced in rural areas
in these regions with more than 10 percent of the rural population being 60+
years in 2011.
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c) Ageing of the aged persons-

• During 2000–2022, the total population of the country grew by 34 percent,
while the population of 60+ years grew by 103 percent.
• The population growth of older persons aged 80+ years has been even higher
at 128 percent during the same period, therefore, policies and programmes
must especially focus on the special needs of these very old women.

➢ Steps in this regard-

• The Madrid International Plan of Action on Ageing (MIPAA), 2002 is a point of reference for
policy and programme interventions and related institutional arrangements to address
population ageing issues. It lays down 3 priority areas:
1. Mainstreaming ageing in public policy in general and poverty reduction strategies.
2. Health and well-being among the elderly.
3. Enabling a supportive environment involving housing, living environment and care for
the elderly, and generating favourable attitudes towards ageing without any “neglect,
abuse and violence”.
• Steps taken by the government-
▪ Under its Article 41, the Indian Constitution mandates the well-being of senior citizens.
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▪ Social Security and Welfare Schemes-

• Atal Pension Yojana.
• Pradhan Mantri Vaya Vandana Yojana.
• Pradhan Mantri Suraksha Bima Yojana.
• Senior Citizens’ Savings Scheme (SCSS).
• Rashtriya Vayoshri Yojana.
▪ Ministry of Railways
• Separate ticket counters for older persons at Passenger Reservation System
Centres
• Provision of lower berth quota in air-conditioned and sleeper classes.
▪ Ministry of Finance
• Income tax exemption limit;
• Exemption from e-filing of income tax return; super senior citizens can file their
tax returns using Sahaj (ITR1) or Sugam (ITR4) forms;

➢ Conclusion-
• The UN has declared 2020-2030 as the Decade of Healthy Ageing that underscores caring for
elders requires a whole-of-society approach as the ageing of the population not only impacts
health systems but also many other aspects of society, including labour and financial markets
and the demand for goods and services, such as education, housing, long-term care, social
protection, and information.
• In our society, parents or senior citizens have always been revered, next to Almighty. It is
rightly said in Sanskrit that a person who respects and serves senior citizens every day, his
age, educational qualifications, fame and strength enhance day-by-day. Thus, we must adapt
to these developments.
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Q2. What are various approaches to poverty measurement? Also, list out any shortcomings in it?
20 Marks
Understanding of question:

Directive

Introduction Poverty is “pronounced deprivation in well-being”. The poor are

those who do not have enough income or consumption to put them
above some adequate minimum threshold.

Main Body

Conclusion

➢ Intro- check above.

➢ Body-
• The various approaches to poverty measurement-
▪ Monetary Measures (Income and Consumption)
▪ Consumption-based Approach: This method measures poverty based on spending on
consumption by the people. This has been the traditional method of measuring poverty
in India. Expert committees under Lakdawala, Tendulkar and Rangarajan have drawn
‘poverty lines’ based on certain criteria. Data collected from expenditure surveys are used
to estimate the level of poverty.
▪ Income-based Approach: In this approach poverty is assessed by determining the amount
of money required for a subsistence diet or a minimum standard of living. However,
collecting comprehensive data on income is a major challenge.

▪ Multidimensional Approach (Based on ‘Capabilities’ or ‘Deprivations’)

▪ The multidimensional approach offers a more comprehensive view of poverty, looking
beyond just income or consumption. It measures deprivations across multiple dimensions
like health and nutrition, education, and standard of living.
▪ Consumption and income-based methods provide direct financial measures of poverty.
Multidimensional approach offers a holistic view, capturing a wider range of deprivations.
• Different countries and organizations might prefer one method over the other based on the
availability of data and the prioritized dimensions of poverty.

• Shortcomings/challenges in the approaches to poverty measurement-

▪ Monetary Measures: Income Approach
• There are difficulties in assessing the incomes of self-employed people, daily wage
labourers, etc.
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• There are large fluctuations in income due to seasonal factors, and additional side
incomes.
• Income data are difficult to collect in largely rural and informal economy.

▪ Monetary Measures: Consumption Approach

• Subjectivity of Poverty Line: The setting of poverty line based on consumption
expenditure is subjective and might not accurately reflect the diversity of living
conditions across regions.
• Price Variations: The cost of essential items varies across regions. Consumption
approach does not always account for these price differentials, leading to
inconsistencies in poverty assessment. There’s been a growing gap between
consumption estimates from National Accounts Statistics (NAS) and National Sample
Survey (NSS) data, which is concerning.
• Lack of Updated Data: India hasn’t had official consumer expenditure data post-2011-
12, making direct comparisons challenging. The 2017-18 survey data hasn’t been
officially released, leading to indirect methods and diverse conclusions on poverty
trends.

▪ Multidimensional Poverty Index (MPI)

• Holistic but Complex: MPI offers a broader view of poverty by considering factors
beyond just income, such as health, education, and standard of living. India’s MPI
measures deprivations in 12 variables, including maternal health and bank account
access.

• Comparative Analysis: India’s adaptation of the MPI differs from the Global MPI. The
inclusion of two additional variables in India’s MPI (maternal health and bank account)
can create challenges in making direct comparisons (with other countries).
• Data Availability, Comparison and Aggregation: Data for parameters like child
mortality are not available at household level but for groups (like at District or State
level). There are challenges in aggregating data e.g., data related to parameters like
access to clean drinking water and child mortality can’t be aggregated together.
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Q3. Write a note on the UDAN scheme, listing out its different phases. 08 Marks

Understanding of question:

Directive

Introduction regional connectivity scheme launched by the Government of

India, as a part of the National Civil Aviation Policy

Main Body

Conclusion

➢ Introduction-
▪ Ude Desh Ka Aam Naagrik (UDAN) is a regional connectivity scheme launched by the
Government of India, as a part of the National Civil Aviation Policy in 2016.
➢ Body-
• UDAN will be in operation for a period of 10 years (2016-26) & envisages providing connectivity
to un-served and underserved airports through revival of existing airports and air strips.
• The objective of the scheme is to take flying to the masses by improving air connectivity for tier-
2 and tier-3 cities, and subsidising air travel on these routes.
• The routes are awarded after a bidding process, and the winning airlines are given certain
incentives, along with viability gap funding (or a subsidy) equivalent to 50% of the seating
capacity on their aircraft.
▪ In return, the airlines sell 50% of their seats at a flat rate of Rs 2,500 per hour of flight, in
order to make air travel affordable.

• UDAN 1.0: 5 airlines companies were awarded 128 flight routes to 70 airports.
• UDAN 2.0:
▪ In Phase 2, helipads were also connected.
▪ In this phase, Central government awarded contracts to 15 airliners to operate in 325
routes across hilly, remote areas.
▪ It involved connecting 56 new airports and helipads to 36 existing aerodromes, as per
the Ministry of Civil Aviation.
• UDAN 3.0:
▪ Inclusion of Tourism Routes under Phase 3 in coordination with the Ministry of Tourism.
▪ Inclusion of Seaplanes for connecting Water Aerodromes.
▪ Bringing in a number of routes in the North-East Region under the ambit of UDAN.
• UDAN 4.0: Phase 4 of the scheme was launched in December 2019 with a special focus on
North-Eastern Regions, Hilly States, and Islands.
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• UDAN 4:
▪ Launched in March 2021, the UDAN 4.1 round is focused on connecting smaller airports,
along with special helicopter and seaplane routes.
▪ In addition to these, some new routes have been proposed under the Sagaramala
Seaplane Services in consultation with the Ministry of Ports, Shipping, and Waterways.

• UDAN 5.0:
▪ Launched in April 2023, the UDAN 5.0 round is focused on Category-2 (20-80 seats) and
Category-3 (>80 seats) aircrafts.
▪ There is no restriction on the distance between the origin and the destination of the
flight.
▪ Airlines would be required to commence operations within 4 months of the award of the
route; earlier this deadline was 6 months.

• Since the launch of modern civil aviation in India in 1911, only 76 airports had been connected
by scheduled commercial flights.
▪ The number of operational airports has gone up to 141 from 76 in 2014.
• With 479 new routes initiated, UDAN Scheme has provided air connectivity to more than 29
States/ UTs across the country.
• More than one crore passengers have availed the benefits of this scheme.

➢ Way forward/conclusion:
• The lives of the middle class are being transformed and their aspirations are increasing.
Earlier aviation was considered to be a domain of the select few. That has changed now.
• UDAN comes with benefit from enhanced air services , better traffic that will generate
more revenue and is a big step towards making flying affordable for citizens in sync with
the vision of ‘New India’.
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Q4. Recognising the need to switch from the ‘take-make-dispose’ to ‘reduce-reuse-recycle’ model,
India prioritised ‘Resource Efficiency and Circular Economy’ as one of the three core themes for
deliberations in the G-20 forum.
Explain the theme and initiatives taken to further it. 08 Marks

Understanding of question:

Directive

Introduction circular economy is a model of production and consumption,

which involves reusing, repairing, refurbishing and recycling
existing materials and products for as long as possible.

Main Body

Conclusion

Introduction-
• A circular economy is a model of production and consumption, which involves reusing, repairing,
refurbishing and recycling existing materials and products for as long as possible.

Body-
• The Resource efficiency and circular economy are powerful strategies that can effectively minimise
dependence on natural resources, curtail waste and encourage sustainable design practices.

• India’s Priority Areas for the Circular Economy During its G-20 Presidency.
▪ Circularity in the Steel Sector-
• In order to ensure growing resource consumption in an environmentally responsible
manner, there is a need to raise the current recycling rates of 15%-25%.
• Given the crucial role of steel in infrastructure development, its efficient utilisation is
important.
• The demand for steel is only going to grow especially in growing economies such as
India. Globally, about 7% of energy sector emission is attributed to iron and steel
production.
• Transitioning towards a circular steel sector is a key strategy to tackle steel sector
emissions.
• The key lies in ensuring collaboration among the G-20 member countries for
knowledge sharing, technology co-development and technology transfer.
• The presidency document for knowledge exchange on the ‘Circular Economy in [the]
Steel Sector’ is a potential blueprint for a net zero pathway for the steel industry,
reducing resource utilisation and minimising wastage.
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▪ Extended Producer Responsibility (EPR)

▪ OECD defines EPR as an environmental policy approach in which a producer’s responsibility
for a product is extended to the post-consumer stage of a product’s life cycle.
▪ An EPR policy is characterised by
• The shifting of responsibility (physically and/or economically; fully or partially)
upstream toward the producer and away from municipalities
• The provision of incentives to producers to take into account environmental
considerations when designing their products.
▪ Under India’s G-20 presidency, there is an emphasis on the significance of the EPR
framework in integrating circularity throughout the value chain.
▪ As different countries have implemented different EPR models, it is necessary that G-20
member-countries share best practices to accelerate the transition to a circular economy.
▪ Effective implementation of EPR plays a pivotal role in promoting the growth of the recycling
infrastructure and establishing a streamlined waste collection system.
▪ With over 20,000 registered Producers, Importers, and Brand Owners (PIBOs) and over
1,900 plastic waste processors on the centralised EPR portal, India boasts one of the largest
frameworks for EPR.
▪ The combined EPR obligation of registered PIBOs crosses 3.07 million tons.
▪ India has also notified comprehensive rules for e-waste and battery waste management.
• Adopting a Circular Bio-economy and Biofuels Approach
▪ Since 1970, the consumption of biological resources in G-20 member countries has risen 2.5
times.
▪ Biowaste such as municipal and industrial waste and agricultural residue has become a
global issue as much of it is burned, causing pollution, biodiversity loss and global warming.
▪ Combined with crops well-suited for degraded lands, biowaste can serve as valuable primary
raw materials and viable substitutes for mineral resources.
▪ Adopting a circular bio-economy approach will reduce the need for extracting virgin
resources and provide an effective waste disposal solution.

• Initiatives Taken by the GoI in the Field of Bio-Economy and Bio Fuels
▪ Pradhan Mantri JI-VAN Yojana provides financial support to integrated bio-ethanol projects
to set up second generation (2G) ethanol projects.
• India has also made it mandatory for coal-burning thermal power plants to use a 5%
blend of biomass pellets along with coal.

▪ Galvanizing Organic Bio-Agro Resources (GOBAR) Dhan scheme was launched to convert
cattle dung and other organic waste into compost, biogas, and biofuels to promote
sustainable agriculture and reduce pollution.
• With over 500 functional biogas plants, the scheme has also helped create rural
livelihoods and ensured improved sanitation.
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▪ Sustainable Alternative Towards Affordable Transportation (SATAT) Scheme, launched in

2018 to promote the use of Compressed BioGas (CBG) as an alternative green transportation
fuel.

➢ Way forward/conclusion:
• Resource efficiency and circular economy have emerged as key solutions in fighting the
planetary challenges such as Climate Change, Air Pollution, and Biodiversity Loss.
• India’s G-20 presidency has focused extensively on these approaches which offer promising
pathways towards a more sustainable and resilient future.

➢ Extraaaaaa Reading-
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Q5. Elaborate on District Central Co-operative Banks. 04 Marks

Understanding of question:

Directive

Introduction Cooperative banks are not-for-profit entities & their primary focus is
to serve the financial needs of their members.

Main Body

Conclusion

Introduction-
• RBI recently said District Central Co-operative Banks (DCCB) are allowed to close their un-
remunerative branches without prior permission of the central bank.

Body-
• DCCB is a rural cooperative bank operating at the district level in various parts of India.
• It is established to provide banking to the rural hinterland for the agricultural sector, with the
branches primarily established in rural and semi-urban areas.
• DCCB provides finance to all the co-operative societies in the district, conducts activities, and
provides banking services according to the provisions of the co-operative act and banking act.
• They act as a link between the primary credit co-operative society and the State Co-operative Bank.
• At the district level, DCCB works as a banker of state government. Educational institutions, Zilla
Parishad, Panchayat Samiti, Gram Panchayat, cooperative societies, etc have accounts in this bank.
• All the financial transactions of co-operative sector are conducted through DCCBs.

Q6. India aims of becoming USD 30 trillion economy by 2030. Explain in detail the vision for
India@2047 and the challenges associated with it? 20 Marks
Understanding of question:

Directive

Introduction
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Main Body

Conclusion

Introduction-
• Centre's vision document - The Vision India@2047, by the NITI Aayog portrays that India is
estimated to be a $30 trillion developed economy by 2047.

Body-
• During the 2021 Independence Day speech, honourable Prime Minister paid homage to the
freedom fighters and shared his vision for Amrit Kaal and 2047, when the country would celebrate
100 years of independence.
• He had given a call to make India a developed nation by 2047 - Viksit Bharat@2047 - and had urged
CMs of states to work towards it with a Team India approach.
• Expounding on the PM’s vision, the Union Finance Minister (in her Budget 2022-2023 speech)
shared that during the Amrit Kaal (India at 75 to India at 100), the government aims to -
▪ Complement the macro-economic level growth focus with a micro-economic level all-
inclusive welfare focus.
▪ Promote digital economy and fintech, technology-enabled development, energy transition,
and climate action.
▪ Rely on a virtuous cycle starting from private investment with public capital investment
helping to crowd-in private investment.
• Elaborating more on the goals for 2047, the Union Budget 2023-2024 re-emphasised that Jan
Bhagidari through Sabka Saath, Sabka Prayas is essential and delineated the Saptarishi principles:
1. Inclusive Development;
2. Reaching the Last Mile;
3. Infrastructure and Investment;
4. Unleashing the Potential;
5. Green Growth;
6. Youth Power;
7. Financial Sector.

• Vision India@2047.
▪ The exercise to draw up the Vision India@2047 document was started in 2021.
▪ 10 groups of secretaries across sectors such as rural and agriculture, infrastructure, social
vision, welfare, technology, governance, security, foreign affairs, etc., were constituted for
the purpose.
▪ The document will outline the structural changes and reforms needed to reach the
objective of becoming a 30-trillion dollars developed economy by 2047 with a per-capita
income of $18,000-20,000.
▪ It will include government process re-engineering, reforms and cut down on duplication of
work by different ministries and departments.
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▪ It is also expected to have details about the country's global engagement on trade,
investment, technology, capital, research and development entities.
▪ The document is also expected to outline which Indian companies would be global leaders
and also the strategy for creating an ecosystem needed to achieve the goal.
▪ It will also have details about creating human capital to achieve the vision, how to leverage
the country's market size and how to address regional disparities.
▪ The vision document will also detail the roadmap where India will be in 2030 and in 2047.

.
• Challenges Ahead in Implementing the Vision India@2047:
▪ Aligning states’ vision documents with the national vision document:
• NITI Aayog is helping Gujarat and Andhra Pradesh prepare their vision documents.
• While other states like UP, Tamil Nadu, Goa, and Uttarakhand are preparing their
documents independently.
▪ Middle-income trap:
• The strategy will have measures to ensure that the economy does not fall into the
"middle-income trap".
• According to the World Bank the middle-income trap refers to a situation whereby a
middle-income country is failing to transition to a high-income economy due to
rising costs and declining competitiveness.

➢ Way forward/conclusion:
• India is well on the path to becoming one of the two largest economies in the world by
2047. To achieve the above-mentioned transformational objectives of Viksit Bharat
envisioned for 2047, the country must continue to focus on “Sabka Saath, Sabka Vikas,
Sabka Vishwas, and Sabka Prayas.” This Independence Day, let us pledge to make efforts,
individually and collectively.
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Extraaaaaa reading-
https://www.thehindu.com/news/national/pm-to-unveil-vision-2047-soon/article67473900.ece
https://timesofindia.indiatimes.com/business/30-trillion-economy-document-to-outline-reforms-
pitch/articleshow/104806581.cms?from=mdr
https://indianexpress.com/article/business/economy/vision-document-to-make-india-a-30-trillion-
economy-by-2047-in-final-stages-draft-to-be-ready-by-december-9005032/

Q7. List out the guidelines and the need for the Digital Crop Survey System. 04 Marks
Understanding of question:

Directive

Introduction

Main Body

Conclusion

Introduction-
• Highlighting that the present system of estimation of crop area and production is completely
manual, the Centre has asked states and Union Territories (UTs) to digitise the process by
adopting the Digital Crop Survey System from July next year.
• Previously the Central Government had launched a pilot Digital Crop Survey across a dozen states
earlier this year.

Body-
• Digital Crop Survey:
▪ As part of the Digital Crop Survey, the MoA&FW has asked states to collect information on
“basic parameters”, including -
▪ Village name, year, season, farmer ID, farm ID,
▪ Crop name (at farm plot level),
▪ Crop variety,
▪ Crop sown area (at farm plot level),
▪ Geotags of crop photos,
▪ Geotags of farm boundary where the crop is sown,
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▪ Sowing/planting date (at farm plot level), irrigation type (at farm plot level), and
▪ Irrigation source (at farm plot level).

• Need for the Digital Crop Survey:

▪ Currently, the collection and compilation of crop statistics is completely manual except in a
few states, resulting in delay and manual errors.
• Only a few of the states like Karnataka, Telangana, and Andhra Pradesh have
established a digital data collection system in the form of GPS-enabled mobile
applications for crop area and CCEs data collection directly from the field.
• States like Maharashtra and MP have also developed such digital systems but only for
crop area recording.
▪ India suffers for want of reliable agricultural production estimates and stressing on the need
for “a real time assessment estimate” of crops.
▪ Therefore, a need was felt to reform the existing production estimation system through the
use of technological intervention.
• Guidelines for the Digital Crop Survey:
▪ According to sources, the Economics, Statistics and Evaluation Division (ESED) under the
Ministry of Agriculture and Farmers’ Welfare (MoA&FW), has finalised the guidelines.
▪ According to the guidelines, all states/ UTs shall automate/digitise the process of area
enumeration/girdawari of crops at field level, i.e., Digital Crop Survey, from 2024-25
Agricultural Year.
• In India, the agriculture year begins in July and ends in June, the following year.
▪ Under the guidelines, states and UTs shall use GPS enabled mobile application for collecting
crop sown data of each plot for each season and share the village level aggregated data with
DA&FW through API only.

Q8. What is the Balance of Payments and how it fared in 2022-23? 04 Marks
Understanding of question:

Directive

Introduction

Main Body

Conclusion
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Introduction-
• The Balance of Payments account reflects the transactions of a country with the rest of the world.

Body-
• It consists of the current account (exports of goods and services, remittances, and dividend
payments) and the capital account (flow of funds through equity investments and borrowings).
• India recorded a current account deficit of 2.7% of GDP in April-December 2022, as compared to
1.1% of GDP in April-December 2021.
• This was driven by an increase in merchandise trade deficit from USD 135 billion in April-December
2021 to USD 214 billion in April-December 2022.
• Foreign exchange reserves reduced by USD 14.7 billion in April-December 2022.

Q9. What is meant by the CPI and WPI? 04 Marks

Understanding of question:

Directive

Introduction

Main Body

Conclusion

Introduction-

Body-
• Consumer Price Index (CPI) measures the change in prices of items at the retail level.
• In 2022-23, CPI inflation averaged at 6.7% as compared to 5.5% in 2021-22.
• The CPI basket includes items commonly consumed by households such as food articles, fuel,
clothing, housing, and health services.
• Food and beverages have a share of 46% in the CPI basket. In 2022-23, food inflation averaged at
6.6% which was significantly higher than 3.8% in 2021-22.
• The Wholesale Price Index (WPI) measures the average change in the prices of commodities for
bulk sale at the level of the early stage of transactions.
• In 2022-23, WPI inflation averaged 9.4%, lower than 13% in 2021-22.
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Q10. Inflation has been a continuous challenge since 2022. Highlight the steps taken by the
Monetary Policy Committee (MPC) of RBI in this light. 04 Marks
Understanding of question:

Directive

Introduction Sustained rise in prices of goods and services in an economy

Main Body

Conclusion

Introduction-
• Define inflation’’..

Body-
• The Monetary Policy Committee (MPC) of RBI took the following decisions during 2022-2023:
▪ The repo rate (the rate at which RBI lends money to banks) was revised upwards six times
during 2022-23 from 4% in April 2022 to 6.5% in February 2023.4,5
▪ The standing deposit facility rate (the rate at which RBI borrows from banks without giving
collateral) was similarly increased from 3.75% in April 2022 to 6.25% in February 2023.
▪ The marginal standing facility rate (under which banks can borrow additional money) and
bank rate (at which RBI buys or rediscounts bills of exchanged) increased from 4.25% to
6.75%.
▪ The stance of the MPC shifted from remaining accommodative while focussing on withdrawal
of accommodation to only withdrawal of accommodation.6,7 This was aimed to keep inflation
within the target while also supporting growth.