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Questions and Answers
What concern did the Reserve Bank of India Governor raise regarding deposit mobilisation?
What has hindered private investment in India as noted in the content?
How much did the share of private non-financial corporations in GFCF increase between FY19 and FY23?
Which factor is a reason for the forecasted decline in year-on-year credit growth by S&P Global?
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What was the year-on-year credit growth forecast for the current financial year?
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What is the current youth unemployment rate in India as highlighted by the World Bank?
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What action has the RBI taken to moderate loan growth in the unsecured lending segment?
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What is the trend observed in private Gross Fixed Capital Formation (GFCF) in Q4FY24?
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Which factor is NOT mentioned as contributing to the structural issues in the economy?
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Study Notes
Economic Concerns in India
- Reserve Bank of India Governor Shaktikanta Das expressed concerns about deposit growth lagging behind credit growth, risking structural liquidity issues.
- India ranks among the fastest-growing large economies, driven by high government spending on infrastructure development.
Youth Unemployment
- Youth unemployment in India has reached 17%, a significant concern highlighted by the World Bank.
- Despite infrastructure investments, job creation remains a critical challenge.
Private Investment Trends
- Private Gross Fixed Capital Formation (GFCF) decreased to 6.46% in Q4FY24, the lowest in four quarters, down from 9.7% in the previous quarter.
- Between FY19 and FY23, the share of private non-financial corporations in overall GFCF increased marginally by 0.8 percentage points (from 34.1% to 34.9%).
Credit Growth Projections
- S&P Global predicts a decline in year-on-year credit growth to 14% in the current financial year, down from 16% the previous year.
- The reduction in banks' risk appetite for private sector lending, crucial for job creation, is a primary factor in this decline.
Regulatory Impact on Lending
- Regulatory measures aimed at controlling unsecured lending are contributing to the slowdown in credit growth.
- The RBI has increased risk weights on unsecured loans, further moderating growth in this lending segment.
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Description
This quiz examines the key economic concerns in India, including issues related to deposit and credit growth, youth unemployment, and trends in private investment. You'll explore the impacts of government spending and the challenges faced in job creation despite significant infrastructure investments.
