Questions and Answers
What percentage of GDP did the current account surplus equivalent to during January–March 2024, and what climatic condition contributed to it?
The current account surplus was equivalent to 0.6% of GDP, attributed to climatic shocks.
By what amount did India’s foreign exchange reserves increase by the end of FY2024?
$646.4 billion.
How much was the deficit in the Southwest monsoon rainfall compared to the long period average rainfall?
5.6% deficit.
What was the percentage decrease in the first advance estimates of kharif foodgrains production for FY2024 compared to the previous year's estimates?
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What was the reported growth in agricultural gross value added (GVA) at 2011–12 prices as per the first advance estimates of national income?
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What percentage was the rainfall below normal during October–December 2023?
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What was the percentage of rainfall below normal during January–February 2024?
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What was the implication of low reservoir levels during the rabi cropping season?
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What was the primary driver of growth momentum in FY2024?
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How did inflation behave in FY2024 compared to FY2023?
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What measures did the government take to manage inflation during FY2024?
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What was the cumulative increase in the policy repo rate from May 2022 to February 2023?
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Which sectors experienced high growth rates during FY2024, and what were those rates?
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What effect did global food and energy prices have on inflation in FY2023?
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What was the status of core inflation during the last four months of FY2024?
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What impact did tightening monetary policy have on inflation in FY2024?
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What does MPCE stand for and why is it important in understanding urban versus rural consumption patterns?
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Based on the data from FY2000 to FY2023, what trend can be observed regarding Rural MPCE as a percentage of Urban MPCE?
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What was the Rural MPCE in FY2012, and how does it compare to the Urban MPCE in the same fiscal year?
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In FY2023, how much was the Rural MPCE, and what does this indicate about the trend over fiscal years?
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Analyze the FY2005 Rural MPCE figure and explain its significance in the broader trend observed until FY2023.
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Calculate the percentage of Rural MPCE in relation to Urban MPCE for FY2023, given the Rural MPCE is 1,430 and Urban MPCE is 6,459.
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Describe the significance of the MPCE data trend from FY2000 to FY2023 for policy-making in rural development.
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What was the difference in MPCE between Urban and Rural areas in FY2010, and what implications does this have for economic equality?
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How many additional connections are planned to be released under the PMUY scheme from FY2024 to FY2026?
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What has been the completion percentage of eligible habitations provided with all-weather road connectivity under PMGSY-I?
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As of December 2023, how many kilometers of road length have been sanctioned under PMGSY-II?
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What milestone was achieved by 28 April 2018 concerning electrification under DDUGJY?
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How many households have been electrified since the launch of the PM Sahaj Bijli Har Ghar Yojana?
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What was the total financial value involved in the sanction of roads and bridges under PMGSY until December 2023?
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What is the total kilometers sanctioned and completed under PMGSY-III as of December 2023?
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How many kilometers of road has been completed under the Road Connectivity Project for Left-Wing Extremism Affected Areas?
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How has sustained public-sector capital expenditure influenced private-sector investment in India?
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What role does improving rural demand play in the Indian economy's growth prospects?
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In what way has fiscal consolidation affected private sector capital costs in India?
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How has the moderation in inflation contributed to the economic environment in India?
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What effect do healthy balance sheets of corporates and banks have on risk aversion?
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What is the significance of the production-linked incentive scheme in boosting India's economy?
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How have geopolitical factors influenced India’s export landscape?
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What are the expected long-term benefits of enhancing logistics and ease of doing business in India?
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What initiative will be launched to enhance the socio-economic conditions of tribal communities in India?
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Which financial institution will facilitate funding for shrimp farming and exports?
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What is the purpose of establishing nucleus breeding centres for shrimp brood stocks?
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What specific programs will be organized to increase women's participation in the workforce?
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What policy will be formalized to ensure the systematic development of the cooperative sector?
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What factors contributed to India's robust growth during FY2024 despite global economic challenges?
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In what ways did India's investment-led growth process impact its economic performance in FY2024?
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How did the global macroeconomic environment influence India's economic outlook in FY2024?
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What role did public expenditure quality improvements play in India's economic performance during FY2024?
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What are the implications of having a well-balanced external position for India’s economic stability?
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Discuss the impact of orderly financial markets on the Indian economy's performance in FY2024.
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What significance does India's status as the fastest growing major economy have for global economic dynamics?
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How did fiscal consolidation contribute to India's economic progress in FY2024?
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What are the projected growth rates for India in FY2025 and what implications does this hold for inflation management?
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How has agriculture's resilience to climate events influenced food production in India recently?
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What role does technology play in improving agricultural yields in India amidst climate change challenges?
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What role does the Mahatma Gandhi National Rural Employment Guarantee Act play in analyzing rural activity?
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Identify two significant risks that could affect growth and inflation in India going forward.
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Explain the challenges in addressing inflation within India's agricultural sector.
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How are nominal rural economic indicators adjusted for comparison over time?
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How might reducing dependence on agriculture for employment benefit India’s economic development?
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Why is it important to analyze the average values of indicators over a 12-month period?
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Discuss how softening CPI inflation and core inflation below 4% impact India's economic policy decisions.
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What does the terms of trade in rural activity indicate?
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Which indicators suggest a strengthening rural economy in FY2024?
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What are the implications of stagnant foodgrains production for India’s overall economic stability?
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Identify and explain one significant agricultural challenge stemming from climate change in India.
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What impact do reservoir levels have on the rural economy?
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What strategies are necessary for enhancing agricultural productivity in the face of climatic and economic challenges?
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How do high-frequency indicators relate to rural sentiments?
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What is the significance of comparing FY2024 indicators with FY2023?
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Why is it essential to monitor fertilizer and tractor sales as indicators of rural economic activity?
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In what way does bank credit flow to agriculture serve as an indicator of rural economic health?
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What has been the trend in India's agricultural exports since FY2022, particularly in FY2024?
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Which two commodities account for more than one third of total agricultural exports from India?
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What major initiative was launched to reduce post-harvest losses in agriculture?
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In FY2024, how did government measures impact agricultural exports despite curbs?
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What role do primary agricultural credit societies (PACS) play in farmers' economic activities?
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How did the government's initiatives aim to contain food inflation volatility?
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What was the value of India's agricultural exports in FY2023, and how does it compare to FY2024?
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Describe the impact of rice and sugar export curbs on agricultural exports in FY2024.
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What potential benefits does the WLGSP offer to farmers in India?
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What was the primary goal of the new initiatives introduced by the Government of India for the agricultural sector?
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Study Notes
Economic Growth and Investment
- Investment growth was robust at 9% in FY2024, driven by proactive fiscal policies emphasizing capital expenditure.
- Major sectors, specifically construction and manufacturing, experienced high growth rates of 9.9%.
Inflation Trends
- Average CPI inflation peaked at 6.7% in FY2023 due to rising global food and energy prices amid the Russia–Ukraine War, surpassing the inflation target.
- In FY2024, average inflation decreased to 5.4%, with core inflation falling below 4% in the last four months of the year.
- Proactive monetary policies included a cumulative increase of the policy repo rate by 250 basis points from May 2022 to February 2023.
Government Interventions
- Key supply-side measures included:
- Export restrictions to improve domestic food availability.
- Excise duty cuts on petrol and diesel.
- Market release of food grains from buffer stocks.
- Reduction of tariffs on specific food imports.
- Restrictions on sugarcane molasses for ethanol production.
Agriculture Resilience
- Despite a 5.6% deficit in the Southwest monsoon rainfall and erratic distribution, agricultural gross value added (GVA) continued to grow, albeit at a lower rate.
- Kharif food grain production estimates reflected a 0.9% decrease for FY2024.
- Low reservoir levels and below-normal rainfall during the rabi cropping season raised concerns about agricultural output.
Rural Development Initiatives
- As of July 2023, the PMUY scheme had reached approximately 9.6 crore beneficiaries, aiming for an extension to 10.4 crore beneficiaries by 2026.
- The PM Gram Sadak Yojana (PMGSY) sanctioned 1.9 lakh roads and over 11,000 bridges, significantly enhancing rural infrastructure connectivity.
Electrification Efforts
- The PM Sahaj Bijli Har Ghar Yojana (Saubhagya) achieved 100% household electrification, reaching 2.9 crore households.
- The Deen Dayal Upadhyaya Gram Jyoti Yojana (DDUGJY) focused on strengthening power distribution, achieving electrification of all inhabited un-electrified villages by April 2018.
Investment and Economic Outlook
- Public-sector capital expenditure and improved utilization of production capacity are expected to boost private-sector investment.
- The fiscal consolidation process has alleviated capital cost pressures for private sectors.
- Proactive measures in logistics, digitalization, renewables, and production-linked incentives for key sectors are enhancing growth potential.
- Services exports remain strong, and geopolitical shifts in global supply chains position India as an attractive low-cost production hub.
Global Economic Environment
- The global economy experienced a soft landing in FY2024, avoiding a recession despite aggressive monetary tightening by major central banks.
- Inflation moderated while global food and commodity prices declined, easing supply chain disruptions.
- Ongoing issues include geo-economic fragmentation, high debt levels, and climate risks, affecting near- to medium-term growth outlooks.
Indian Economic Performance
- India demonstrated resilience against global economic shocks, achieving robust growth surpassing expectations in FY2024.
- Key macro-financial conditions included moderated inflation, a sustainable external balance, financial stability, and healthy corporate balance sheets.
- Continuous reforms and an investment-led growth approach are expected to sustain India as the fastest-growing major economy globally.
Agricultural Sector Overview
- Agricultural exports remained stable, at around $50 billion since FY2022, despite government-imposed curbs on rice and sugar aimed at controlling domestic prices.
- Total agricultural exports in FY2024 amounted to $48.8 billion, slightly down from FY2023, with rice and sugar constituting over one-third of exports.
Agricultural Supply Chain Initiatives
- New initiatives launched by the Government of India aim to strengthen the agricultural supply chain and enhance farmers’ incomes.
- The World’s Largest Decentralised Grain Storage Plan (WLGSP) aims to minimize post-harvest losses and improve farmer pricing power.
Indicators of Rural Activity
- High-frequency indicators of rural economic activity showed positive trends in FY2024, including sales of scooters, tractors, and fertilizer, as well as agricultural and non-agricultural employment.
- Growth in rural activity is indicated by improvements in agricultural exports, bank credit flows to agriculture, and demand for rural employment programs.
Economic Projections and Challenges
- Growth for FY2025 is projected at 7.2%, expected to maintain a trend of over 7% growth for four consecutive years.
- Although CPI inflation softened and core inflation fell below 4%, risks from geopolitical factors and climate-related events threaten food price stability.
Agricultural Resilience and Structural Issues
- Indian agriculture has shown increased resilience to climate disturbances; however, growth in GVA and food production has stagnated.
- Structural impediments in the agriculture sector could exacerbate growth and inflation challenges, necessitating timely interventions and technological advancements.
Strategic Initiatives for Economic Development
- Plans to boost shrimp farming and enhance export capabilities through nucleus breeding centers for shrimp broodstocks.
- Launch of the Pradhan Mantri Janjati Unnat Gram Abhiyan for improving tribal communities' socio-economic conditions.
- Formalization of the National Cooperation Policy aimed at cooperative sector development.
- Programs to promote women’s participation in the workforce through specific skilling initiatives and market access for self-help groups.
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Description
Explore the dynamics of economic growth and inflation trends for the fiscal year 2024. Delve into how government interventions and monetary policies have influenced investment growth, changing inflation rates, and key supply-side measures implemented during this period.