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17 Aug 2026
Economy Affairs
India's macroeconomic outlook remains strong, driven by steady real GDP expansion, active fiscal consolidation through infrastructure Capex, and well-capitalized commercial banks with declining bad loans (GNPAs). Concurrently, retail inflation management via the RBI’s Flexible Inflation Targeting framework and robust foreign exchange reserves ensure external stability and price control.

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Monetary Policy & Inflation: RBI benchmarks the repo rate

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11
What is the primary purpose of Mudra Loans launched under Pradhan Mantri Mudra Yojana?
Answer: To provide collateral-free institutional credit up to specified limits to non-corporate, non-farm small micro enterprises
12
What does 'Gross Value Added (GVA)' measure in national economic accounts?
Answer: The value of output minus the value of intermediate consumption, measuring sector-wise contribution to the economy
13
Which tax is levied directly on the income earned by individuals and corporate entities?
Answer: Direct Tax (e.g., Income Tax and Corporate Tax)
14
What does 'Disinvestment' refer to in the context of public sector enterprises in India?
Answer: The sale or liquidation of government stake in public sector undertakings (PSUs)
15
Which institution acts as the central banking authority of the United States, analogous to the RBI in India?
Answer: Federal Reserve (The Fed)
16
What is 'Stagflation' in macroeconomic terminology?
Answer: A combination of stagnant economic growth, high unemployment, and high inflation
17
Which financial document presents the estimated receipts and expenditures of the Government of India for a financial year?
Answer: Annual Financial Statement (Union Budget)
18
What does 'SENSEX' represent in the Bombay Stock Exchange (BSE)?
Answer: A benchmark stock index comprising 30 well-established financially sound companies
19
Which international financial institution is headquartered in Washington, D.C. and focuses on global poverty reduction and development lending?
Answer: The World Bank
20
What is the primary purpose of Kerala's 'K-FON' (Kerala Fibre Optic Network) project from an economic and digital infrastructure perspective?
Answer: Providing high-speed internet connectivity as a basic right to households and government offices, bridging the digital divide
21
What does 'Venture Capital' typically fund in the financial ecosystem?
Answer: High-risk, high-potential startup companies and early-stage entrepreneurs
22
Which national body in India regulates and supervises cooperative banks alongside the RBI?
Answer: NABARD
23
What does 'GSDP' stand for in regional Indian economic statistics?
Answer: Gross State Domestic Product
24
Which economic concept explains that the value of money goes down when too much money chases too few goods?
Answer: Inflation caused by excess money supply
25
What is the primary purpose of the 'Production Linked Incentive (PLI)' scheme launched by the Government of India?
Answer: To boost domestic manufacturing capacity and attract foreign investments by rewarding companies based on production output
26
Which index is released by the World Bank to measure the ease of doing business across various economies (historically)?
Answer: Ease of Doing Business Index
27
What does 'Angel Tax' refer to in the Indian taxation framework for startups?
Answer: Income tax levied on funding received by unlisted startups from angel investors if the share price exceeds the fair market value
28
Which organization manages India's foreign exchange reserves and ensures orderly development of the forex market?
Answer: Reserve Bank of India
29
What is the primary economic significance of 'Remittances' for Kerala's economy?
Answer: Inflows of money sent by Keralites working abroad, significantly boosting household consumption and state income
30
What does 'Open Market Operations (OMOs)' conducted by the RBI involve?
Answer: The buying and selling of government securities in the open market to regulate rupee liquidity
31
What is GDP?
Answer: Value of final goods and services produced within a country
32
Which institution issues most currency notes in India?
Answer: Reserve Bank of India (RBI)
33
Which is an indirect tax in India?
Answer: Goods and Services Tax (GST)
34
What does inflation mean?
Answer: A sustained rise in the general price level
35
Which body formulates monetary policy in India?
Answer: Monetary Policy Committee (MPC)
36
What is the repo rate?
Answer: Rate at which RBI lends short-term funds to banks against eligible securities
37
Which institution replaced India's Planning Commission?
Answer: NITI Aayog
38
What is fiscal deficit?
Answer: Excess of total expenditure over total receipts excluding borrowings
39
Which sector includes farming and fishing?
Answer: Primary sector
40
Which sector includes banking and transport services?
Answer: Tertiary sector
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