Topic: Indian Economy and issues relating to planning, mobilization, of resources, growth, development and employment.
4. Current covid-19 crisis has exposed limitations of central banking framework in the county. Analyze the statement. (250 words)
Reference: Indian Express
Why the question:
The current article presents to us in what way current crisis has exposed limitations of central banking framework.
Key Demand of the question:
Explain in detail how current covid-19 crisis has exposed limitations of central banking framework in the county.
Directive:
Analyze – When asked to analyse, you have to examine methodically the structure or nature of the topic by separating it into component parts and present them as a whole in a summary.
Structure of the answer:
Introduction:
Briefly present the context of the question.
Body:
Over the past few months, the Reserve Bank of India, along with the monetary policy committee, has undertaken a slew of measures to arrest the economic slowdown, and address the fallout of the COVID-19 pandemic.
Yet, their actions, guided by multiple considerations — inflation and growth management, debt management and currency management — have inadvertently exposed the limitations of and the inherent contradictions in the central banking framework in India.
Explain what the central bank must do.
Take hints from the article and explain what are the options available to the Bank.
Conclusion:
Conclude with way forward.
