current account deficit. Archives

June 17, 2026June 18, 2026

What explains the persistence of India’s merchandise trade deficit despite growth in exports? Analyse the structural factors involved. Suggest corrective measures.

Topic: Indian Economy and issues relating to planning, mobilization of resources, growth, development and employment. Q6. What explains the persistence of India’s merchandise trade deficit despite growth in exports? Analyse the structural factors involved. Suggest corrective measures. (15 M) Difficulty Level: Medium Reference: IE Why the question India’s rising exports alongside a persistent merchandise trade …

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June 13, 2026June 13, 2026

UPSC Editorial Analysis: India’s Gold Dependency

General Studies-3; Topic: Indian Economy and issues relating to planning, mobilization of resources, growth, development and employment. Introduction In India, gold is not just a luxury item; it is an asset class tied to social rituals, religious trust, and emergency savings. Indian households hold between 25,000 and 28,000 tonnes of gold. This massive volume exceeds the …

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June 12, 2026

“A Balance of Payments surplus does not necessarily indicate underlying external sector strength”. Evaluate the vulnerabilities that may persist despite a favourable BoP position.

Topic: Indian Economy and issues relating to planning, mobilization of resources, growth, development and employment Q5. “A Balance of Payments surplus does not necessarily indicate underlying external sector strength”. Evaluate the vulnerabilities that may persist despite a favourable BoP position. (10 M) Difficulty Level: Medium Reference: IE Why the question India’s recent Balance of Payments …

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June 9, 2026June 9, 2026

Discuss the significance of capital account inflows in addressing external sector imbalances. Evaluate the risks associated with their use as a policy instrument.

Topic: Indian Economy and issues relating to planning, mobilization of resources, growth, development and employment. Q5. Discuss the significance of capital account inflows in addressing external sector imbalances. Evaluate the risks associated with their use as a policy instrument. (10 M) Difficulty Level: Medium Reference: IE Why the question Recent policy measures by the Government …

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June 5, 2026June 5, 2026

“Currency management is increasingly becoming a balancing act between exchange rate stability, growth objectives and external sector sustainability.” Discuss.

Topic: Indian Economy and issues relating to planning, mobilization of resources, growth, development and employment. Q5. “Currency management is increasingly becoming a balancing act between exchange rate stability, growth objectives and external sector sustainability.” Discuss. (15 M) Difficulty Level: Medium Reference: IE Why the question Recent debates surrounding rupee depreciation, foreign capital flows and RBI …

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May 22, 2026

Discuss the role of foreign-exchange reserves in protecting an economy against external shocks. Analyse their limitations during periods of sustained currency pressure. Suggest ways to enhance external-sector resilience.

Topic: Indian Economy and issues relating to planning, mobilization of resources, growth, development and employment. Q5. Discuss the role of foreign-exchange reserves in protecting an economy against external shocks. Analyse their limitations during periods of sustained currency pressure. Suggest ways to enhance external-sector resilience. (15 M) Difficulty Level: Medium Reference: TH Why the question Recent …

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May 13, 2026May 13, 2026

Discuss the economic significance of foreign exchange reserves for a developing economy like India. Examine the factors responsible for pressure on India’s forex reserves in recent years. Evaluate the limitations of reserve depletion as a strategy to defend the rupee.

Topic: Indian Economy and issues relating to planning, mobilization of resources, growth, development and employment. Q5. Discuss the economic significance of foreign exchange reserves for a developing economy like India. Examine the factors responsible for pressure on India’s forex reserves in recent years. Evaluate the limitations of reserve depletion as a strategy to defend the …

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May 5, 2026May 7, 2026

UPSC Editorial Analysis: The UAE’s Strategic Exit from OPEC/OPEC+

General Studies-2; Topic: Effect of policies and politics of developed and developing countries on India’s interests, Indian diaspora. Introduction The announcement that the United Arab Emirates (UAE) will exit OPEC (Organization of the Petroleum Exporting Countries) and the OPEC+ alliance, effective May 1, 2026, represents a seismic shift in global energy politics. For the first time, …

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April 30, 2026May 1, 2026

Analyse the causes behind the widening current account deficit in India. Explain its implications for the Balance of Payments. Suggest structural reforms to improve external sector sustainability.

Topic: Indian Economy and issues relating to planning, mobilization of resources, growth, development Q5. Analyse the causes behind the widening current account deficit in India. Explain its implications for the Balance of Payments. Suggest structural reforms to improve external sector sustainability. (10 M) Difficulty Level: Medium Reference: NIE Why the question Rising concerns over current …

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April 28, 2026April 29, 2026

Explain the causes of divergence between benchmark oil prices and actual transaction prices. Discuss its economic implications.

Topic: Indian Economy and issues relating to planning, mobilization of resources. Q4. Explain the causes of divergence between benchmark oil prices and actual transaction prices. Discuss its economic implications. (10 M) Difficulty Level: Medium Reference: IE Why the question Recent global energy disruptions have exposed distortions in oil pricing, making it important to understand market …

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December 16, 2025December 19, 2025

Trade deficit

Source: ANI Subject: Economics Context: India’s trade deficit fell sharply to $6.6 billion in November 2025, driven by a strong rise in merchandise exports and a decline in merchandise imports (notably lower gold imports). About Trade deficit: What it is? A trade deficit occurs when the value of a country’s imports exceeds the value of …

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July 8, 2025

Explain the growing role of invisible receipts in India’s Balance of Payments. Assess their impact on the sustainability of the current account.

Topic: Indian Economy and issues relating to planning, mobilization of resources, growth, development and employment Q6. Explain the growing role of invisible receipts in India’s Balance of Payments. Assess their impact on the sustainability of the current account. (10 M) Difficulty Level: Medium Reference: IE Why the question: India’s Balance of Payments is increasingly being …

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May 1, 2025

What are the global economic and geopolitical factors influencing gold prices? How do these impact India’s macroeconomic stability? Suggest policy approaches to insulate the economy from external gold shocks.

Topic: Indian Economy and issues relating to planning, mobilization of resources, growth, development and employment Q5. What are the global economic and geopolitical factors influencing gold prices? How do these impact India’s macroeconomic stability? Suggest policy approaches to insulate the economy from external gold shocks. (15 M) Difficulty Level: Medium Reference: IE Why the question …

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March 27, 2025

Gold Monetisation Scheme (GMS)

Source: TOI Context: The Finance Ministry has discontinued the Gold Monetisation Scheme (GMS) for medium- and long-term deposits from March 26, 2025. RBI has clarified that existing deposits will continue until maturity; however, no fresh mobilisations or renewals will be allowed. About Gold Monetisation Scheme (GMS): What is GMS? A scheme to mobilise idle gold …

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October 25, 2022October 25, 2022

Oil and the dollar: India’s twin challenges

GS Paper 3 Syllabus: Indian Economy and issues Source: Indian Express Direction: This is an editorial explainer, detailing the implications of Oil and Dollar fluctuation on the Economy. Context: Russia-Ukrain crisis and US Fed monetary tightening have impacted import-dependent countries like India. Correlation Between Oil and US Dollar: The U.S. dollar is …

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August 4, 2022August 4, 2022

Define trade deficit and current account deficit. What are the reasons for expanding trade and current account deficits of India? Examine its implications on the Indian economy.

Topic: Indian Economy and issues relating to planning, mobilization, of resources, growth, development and employment. 4. Define trade deficit and current account deficit. What are the reasons for expanding trade and current account deficits of India? Examine its implications on the Indian economy. (250 words) Difficulty level: Moderate Reference: The Hindu Why the question: July’s …

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