Tag: Monetary Policy

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“Monetary easing without adequate liquidity is like pressing the accelerator with the handbrake on”. Analyse India’s recent experience of rate cuts with tight liquidity. Suggest measures to strengthen monetary transmission.

Topic: Indian Economy and issues relating to planning, mobilization of resources, growth, development and employment Q4. “Monetary easing without adequate liquidity is like pressing the accelerator with the handbrake on”. Analyse India’s recent experience of rate cuts with tight liquidity. Suggest measures to strengthen monetary transmission. (15 M) Difficulty Level: Medium Reference: IE Why the …

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Economic Survey 2025-26: Complete Highlights and Summary for UPSC

Official Resource Economic Survey of India 2025–26 Download PDF UPSC Economy Special Economic Survey 2026 Highlights: Complete Summary The Economic Survey 2025–26 signals India’s transition towards becoming a systemically indispensable global power, combining strong growth with historically low inflation. Economic Survey 2025-26 Highlights | UPSC GS3 Economy | Nikhil Sir Insights IAS The Union Ministry …

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The stability of a modern economy depends less on the quantity of money and more on its credibility. Examine how these shapes monetary management in India.

Topic: Money and Banking Q5. The stability of a modern economy depends less on the quantity of money and more on its credibility. Examine how these shapes monetary management in India. (10 M) Difficulty Level: Medium Reference: InsightsIAS Why the question Because current monetary debates emphasise expectations, trust and institutional credibility over sheer money supply, …

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Explain the concept of demand psychology in inflationary cycles. Describe how it differs from conventional demand-pull inflation. Assess how monetary and fiscal authorities can respond when prices rise faster than fundamentals justify.

Topic: Indian Economy and issues relating to planning, mobilization of resources, growth, development and employment. Q5. Explain the concept of demand psychology in inflationary cycles. Describe how it differs from conventional demand-pull inflation. Assess how monetary and fiscal authorities can respond when prices rise faster than fundamentals justify. (15 M) Difficulty Level: Medium Reference: TH …

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Analyse the phenomenon of stagflation in advanced economies. Evaluate the effectiveness of monetary policy in such contexts. What lessons can India draw for macroeconomic management?

Topic: Indian Economy and issues relating to planning, mobilization of resources, growth, development and employment Q6. Analyse the phenomenon of stagflation in advanced economies. Evaluate the effectiveness of monetary policy in such contexts. What lessons can India draw for macroeconomic management? (15 M) Difficulty Level: Medium Reference: NIE Why the question The US Fed’s 2025 …

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What role can monetary and fiscal policies play in safeguarding tariff-affected sectors? Analyse the limitations of RBI interventions. Suggest long-term institutional reforms for external sector stability.

Topic: Indian Economy and issues relating to planning, mobilization of resources, growth, development and employment Q5. What role can monetary and fiscal policies play in safeguarding tariff-affected sectors? Analyse the limitations of RBI interventions. Suggest long-term institutional reforms for external sector stability. (15 M) Difficulty Level: Medium Reference: NIE Why the question RBI Governor assures …

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Inflation targeting and the test of credibility

Syllabus: Indian Economy Source:  IE Context The Reserve Bank of India (RBI) released its discussion paper (August 2025) on reviewing the flexible inflation targeting (FIT) framework. With the current 4% CPI target within a 2–6% tolerance band expiring in March 2026, the RBI has cautioned that raising the target could dilute credibility and reverse policy …

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Bear Market

Source:  FE Context: The S&P 500 briefly entered bear market territory, dropping over 20% due to escalating US tariffs under President Trump. This is the first such decline since 2022, triggering global recession fears and investor panic. About Bear Market: What is a Bear Market? A bear market refers to a situation where a stock …

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The ‘last mile’ of disinflation is becoming increasingly challenging in the current global economic environment. Discuss the implications of this phenomenon for India’s monetary policy.

Topic: Indian Economy and issues relating to planning, mobilization of resources, growth, development and employment Q5. The ‘last mile’ of disinflation is becoming increasingly challenging in the current global economic environment. Discuss the implications of this phenomenon for India’s monetary policy. (10 M) Difficulty Level: Medium Reference: TH Why the question As per RBI Bulletin- …

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Monetary and Fiscal Policy

Source:  TOI Context: A finance ministry report cited monetary policy, macroprudential measures, and structural factors as possible contributors to the demand slowdown, highlighting differing views with the RBI on growth and inflation. About Fiscal Policy: Definition: Fiscal policy refers to the government’s use of taxation, spending, and borrowing to influence economic activity. Tools of Fiscal …

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RBI vs Centre

Syllabus: Economy Source:  IE Context: The RBI-government relationship has often seen conflicts over autonomy and policy. As Shaktikanta Das’ tenure as RBI Governor ends, disputes over monetary policy echo past tensions. Laws Governing RBI-Centre Relations: RBI Act, 1934: Establishes the RBI’s role and functions. Section 7: Empowers the central government to issue directions to the …

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RBI keeps REPO RATE unchanged

Syllabus: Indian Economy Source: TH Context: The Reserve Bank of India (RBI) has refrained from cutting the repo rate despite stable inflation rates. The repo rate, which influences loan EMIs, has remained unchanged since February 2023.   RBI Monetary Policy Meeting Summary: Repo Rate: Held steady at 6.5% for the ninth consecutive time. Inflation Drivers: Core inflation is moderate, but …

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Explain the concept of open market operations (OMO) in order to manage liquidity and financial conditions in the country. What is its impact on various macroeconomic parameters?

Topic: Indian Economy and issues relating to planning, mobilization, of resources, growth, development and employment. 5. Explain the concept of open market operations (OMO) in order to manage liquidity and financial conditions in the country. What is its impact on various macroeconomic parameters? (250 words) Difficulty level: Easy Reference: Insights on India Why the question: …

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Given the current situation, for a developing country like India, what should be the primary objective of monetary policy – accelerate growth or price stability? Critically examine.

Topic: Indian Economy and issues relating to planning, mobilization, of resources, growth, development and employment. 5. Given the current situation, for a developing country like India, what should be the primary objective of monetary policy – accelerate growth or price stability? Critically examine.  (250 words) Difficulty level: Tough Reference: Insights on India Why the question: …

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Elaborate upon the various qualitative tools available with the RBI to accelerate growth and stability by controlling the credit supply in the economy.

Topic: Indian Economy and issues relating to planning, mobilization, of resources, growth, development and employment. 4. Elaborate upon the various qualitative tools available with the RBI to accelerate growth and stability by controlling the credit supply in the economy. (250 words) Difficulty level: Easy Reference: Insights on India Why the question: The question is part …

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Examine the impact of RBI’s various quantitative instruments of credit control on achieving the objectives of monetary policy.

Topic: Indian Economy and issues relating to planning, mobilization, of resources, growth, development and employment. 5. Examine the impact of RBI’s various quantitative instruments of credit control on achieving the objectives of monetary policy.  (250 words) Difficulty level: Tough Reference: Insights on India Why the question: The question is part of the static syllabus of …

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