News: Indian rupee hit an all-time low exchange rate of 77.6 against the US dollar. Contents1 What is the exchange rate?2 How an exchange rate is determined?3 What are the factors determining the supply and demand of currency?4 What is RBI’s role in exchange rate determination? What is the exchange rate? The exchange rate tells… Continue reading Explained: Making sense of exchange rate
Tag: gs paper 3
Equating states’ off-budget borrowings with their debt will clarify extent of indebtedness
News: This year, off-budget borrowings by the states will be equated with the states’ own debt. What are off-budget borrowings? Off-budget borrowings refer to loans taken by state govt. entities, special purpose vehicles, etc. These loans are serviced through the state government’s own budget, instead of revenues generated by the borrowing entity. As per the… Continue reading Equating states’ off-budget borrowings with their debt will clarify extent of indebtedness
Powering up after the power crisis shock
News: India is currently going through a power crisis. Consequentially, the government has cancelled passenger trains to allow the Indian Railways to transport more coal to power plants. In addition, the directives have been issued to use more imported coal to tide over the supply shortfall. Contents1 Structure of India’s power sector 2 How did the… Continue reading Powering up after the power crisis shock
The reasons behind the slow disinvestment pace
Context: The government aims to earn ₹65,000 crore through the sale of its stakes in various central public sector enterprises (CPSEs) in FY23. However, privatization is still on the slow track. Contents1 What is the Centre’s disinvestment plan?2 What is responsible for these delays?3 How important is disinvestment?4 Has the Govt met its disinvestment targets?… Continue reading The reasons behind the slow disinvestment pace
It is time for our corporate sector to work on export performance
Context: In fiscal year 2021-22, India’s exports did rather well. They were nearly $420 billion, raising hopes that India was putting behind it a decade of export under-performance. For India to be a $5 trillion economy by 2024-25, we need to export at least $1 trillion worth of goods and services, as exports contribute around… Continue reading It is time for our corporate sector to work on export performance
Double down on efforts to end internet poverty
Context: Lack of digital access today is no small measure of deprivation. The internet is not just a basic necessity, but has become fundamental to civic and economic life. What is the situation wrt digital connectivity in India? As per studies, little under half the country’s population are active on the internet, but users in… Continue reading Double down on efforts to end internet poverty
Explained: Behind low wheat procurement
News: From an all-time high last year, procurement of wheat is set to hit a 15-year low this season, falling below existing stocks for the first time. What has led to this, and will it impact availability? What are the reasons for the fall in procurement? There are two main reasons: 1) Rise in Export… Continue reading Explained: Behind low wheat procurement
How Indian banking has changed over the last decade
Context: Over the last decade, the nature of commercial banking in India has changed a lot. This has taken new form in various ways. What changes have taken place in commercial banking in India? (1) Industry vs Retail lending: Commercial banks in India broadly carry out four different kinds of lending: agricultural, industrial, services and… Continue reading How Indian banking has changed over the last decade
How to tackle food inflation – and how not to
News: Recently, The RBI raised the repo rate by 40 basis points (bps) and the cash reserve ratio (CRR) by 50 bps aimed to control inflation. Why has the repo rate and CRR rate been increased in India? Domestic Food Inflation India is seeing high food inflation in wheat, edible oils, maize etc. Global Food… Continue reading How to tackle food inflation – and how not to
The government is business
Context: In case of India, the only avenue for revenue generation seems to be taxes. However, like other countries, for instance, Singapore and China, markets, wealth management and dividends are not explored. If markets create wealth, why can’t the government create it and use it for creating prosperity for the public? Contents1 How are Singapore… Continue reading The government is business
