Topic: Indian Economy and issues relating to planning, mobilization, of resources, growth, development and employment.
4. Examine the macroeconomic impact of the Repo Rate hike. Do you think the Reserve Bank of India’s (RBIs) recent decision to raise the Repo rate – a good move in the current global economic scenario? Examine. (250 words)
Difficulty level: Moderate
Reference: Insights on India
Why the question:
The question is part of the static syllabus of General studies paper – 3 and mentioned as part of Mission-2023 Secure timetable.
Key Demand of the question:
To write about Repo rates, macroeconomic impact of its hike and opinion regarding the recent hike.
Directive word:
Examine – When asked to ‘Examine’, we must investigate the topic (content words) in detail, inspect it, investigate it and establish the key facts and issues related to the topic in question. While doing so we should explain why these facts and issues are important and their implications.
Structure of the answer:
Introduction:
Begin by defining Repo rate.
Body:
First, write in detail about the various macroeconomic impact of raising Repo rates – inflation, lending rate, saving and Forex etc.
Next, write about rationale behind raising of Repo rate in the current global economic scenarios. Examine as to how it seeks to address the various issues and also mention any potential shortcomings.
Conclusion:
Conclude with a balanced opinion regarding the hike in Repo rate by RBI.
