Indian Economy - General Knowledge Questions

Correct Answer :   $2.1 Billion

According to recent data released by the Reserve Bank of India (RBI), In January 2024, India’s outward foreign direct investment (FDI) commitments surged by 25.7% year-on-year to $2.09 billion. However, there was a sequential decline from December 2023 figures.

Equity Commitments :

* In January 2024, equity commitments surged to $760.9 million, marking a substantial increase from $597.4 million recorded in January 2023.
* However, this figure was slightly lower than the equity commitments of $834.7 million reported in December 2023.

Debt Commitments :

* Debt commitments rose to $306.2 million in January 2024 from $215.6 million in January 2023, reflecting a notable increase.
* Nevertheless, there was a significant decrease from $687.9 million recorded in December 2023, more than halving within a month.

Guarantees for Overseas Units :

* Guarantees for overseas units witnessed a significant rise to $1.02 billion in January 2024 from $854.1 million in January 2023.
* Additionally, there was a marginal increase compared to $988.4 million reported in December 2023.

Overall Trends :

* On a year-on-year (Y-o-Y) basis, India’s outward FDI commitments in January 2024 rose by 25.7% to $2.09 billion, compared to $1.66 billion in January 2023.
* However, there was a sequential decline from $2.5 billion reported in December 2023, indicating fluctuating trends in outward FDI.

Correct Answer :   $44.9 Billion

India’s services trade surplus reached an unprecedented $44.9 billion in the October-December quarter of FY24, marking a 16% year-on-year increase. This surge in surplus, amidst challenging global conditions, is anticipated to alleviate the current account deficit (CAD) for the period.

Key Statistics and Outlook :

Services Export Growth : Services exports expanded by 5.2% to $87.7 billion during Q3, while services imports saw a 4.3% contraction, totaling $42.8 billion for the same period.

CAD Trends : The CAD has moderated to 1% of GDP in the first half of FY24, down from 2.9% in FY23, driven by a lower merchandise trade deficit and higher net services receipts.

Projections : Fitch Ratings forecasts a further narrowing of CAD to 1.4% of GDP in FY24 and 2024-25, compared to 2% in FY23, while IDFC Bank revises its estimate to 1.2% of GDP, incorporating the increased monthly services surplus.

Contributors to Services Exports Growth :

IT Dominance : India’s services exports, led by software exports, encompass a broad spectrum ranging from IT services to medical professionals’ services abroad.

Emerging Sectors : “Other business services” exports, notably Global Capability Centers (GCCs), have witnessed significant growth, constituting 26.4% of total services exports in H1 FY24, up from 19% in 2013-14.

Government Targets and Global Position :

Export Goals : The Indian government aims for combined goods and services exports to reach $2 trillion by 2030, leveraging the resilience of the services sector.

Global Trade Share : India holds a 4% share in global commercial services exports and a 3.52% share in global commercial services imports for 2021, while its merchandise trade accounts for 1.77% of world exports and 2.54% of world imports.

Correct Answer :   5.1%

In January 2024, India’s retail inflation reached a three-month low of 5.1%, while the Index of Industrial Production (IIP) exhibited a growth of 3.8% in December 2023, showcasing a favorable trend in both sectors.

Retail Inflation at 3-Month Low :

* Consumer Price Index (CPI) indicates a 5.1% year-on-year (Y-o-Y) retail inflation rate in January 2024, down from 5.69% in December and 6.52% in January last year.
* Notable decline attributed to moderation in prices of cereals, milk, and fruit, while vegetables, pulses, and spices sustain double-digit inflation.
* Protein-rich items like meat and eggs experience slight price acceleration.

Industrial Growth Resilience :

* Index of Industrial Production (IIP) grows by 3.8% Y-o-Y in December 2023, up from 2.4% in November, with manufacturing sector leading at 3.9% growth.
* Mining sees 5.1% growth, while electricity lags at 1.2%, down from December 2022’s 5.1% growth.
* Despite some sectors contracting, overall IIP indicates a revival in both urban and rural demand.

Sectoral Performance :

* Manufacturing : Majority of industries witness growth, only 11 out of 23 report contraction.
* Use-Based Segment : Sequential moderation observed in primary and intermediate goods, while infrastructure, capital goods, and consumer durables witness acceleration, signaling demand revival in both urban and rural areas.

Correct Answer :   $14 Billion

India has taken a significant step towards the economic development of the Union Territory of Jammu and Kashmir by announcing an interim Budget of $14 billion for fiscal year 2024-25. This financial commitment is noteworthy, as it is approximately 4.5 times greater than the total amount Pakistan is seeking from the International Monetary Fund (IMF) to address its ongoing economic challenges. The allocation of such a substantial sum underscores India’s dedication to fostering growth and development in Jammu and Kashmir.

Pakistan’s IMF Bailout :

Meanwhile, Pakistan is navigating through its economic difficulties with the help of the IMF. In January, the Washington-based financial body approved a $3 billion bailout package for Pakistan, struggling with financial constraints. A recent tranche of $700 million was released under this bailout package after the IMF completed its first review of Pakistan’s economic reforms. This review focused on the country’s performance during the initial three months of the fiscal year, from July to September 2023, allowing for continued support from the IMF.

Comparison of Economic Commitments :

The disparity in financial commitments between India’s budget for Jammu and Kashmir and Pakistan’s IMF bailout highlights the contrasting approaches to economic development and support. India’s investment in Jammu and Kashmir is part of a broader strategy to promote decentralized governance, inclusive development, enhanced revenue generation, and infrastructure development within the Union Territory. These efforts have been made possible due to the path-breaking reforms undertaken since 2019.

Significance of the Budget Announcement :

Finance Minister Nirmala Sitharaman unveiled the interim budget on a symbolic day, as Pakistan observed “Kashmir Solidarity Day.” The timing of the announcement not only reflects India’s resolve to prioritize the economic upliftment of Jammu and Kashmir but also serves as a message of commitment to its integral territories.

Correct Answer :   ?1,72,129

In a commendable financial feat, the Centre reported a 10.4% surge in Goods and Services Tax (GST) revenue for January, reaching an impressive ?1,72,129 crore. This milestone represents the second-highest GST collection ever recorded, with the ?1.7 lakh crore benchmark surpassed for the third time in the fiscal year 2023-24.

The Ministry of Finance disclosed that the robust growth is indicative of a significant year-on-year increase, showcasing a notable rise from the ?1,55,922 crore collected in January 2023.

GST Collection Surges: January 2024 Records Second-Highest Ever at ?1.72 Lakh Crore :

Correct Answer :   $5 Trillion

* India will become the third largest economy by 2027-28, with a GDP of over $5 trillion, Finance Minister Nirmala Sitharaman said on Wednesday (10th Jan 2024).

* Even going by conservative estimates, the size of the Indian economy will be $30 trillion by 2047, she noted.

* “It is possible that we will be the third largest economy by 2027-28, and our GDP will cross $5 trillion by that time. By 2047, it is a conservative estimate that we will reach at least $30 trillion in terms of economy,” Sitharaman said at the Vibrant Gujarat summit.

* India, with a GDP of roughly $3.4 trillion, is currently the fifth largest economy in the world, after the US, China, Japan and Germany.

* Indian economy is projected to grow by 7.3% in the current fiscal, higher than 7.2% in 2022-23.

* Sitharaman said India has received $919 billion in foreign direct investment in 23 years till 2023. Of this, 65 per cent, or $595 billion, came in the last 8-9 years of the Narendra Modi government.

* Referring to financial inclusion, the minister said the number of people with bank accounts has increased from 15 crore in 2014 to 50 crore at present..


Source : Financial Express

Correct Answer :   ₹1.65-lakh crore

In a significant economic development, Goods and Services Tax (GST) collections for December 2023 reached ₹1,64,882 crore, marking a notable 10.28% surge compared to the ₹1,49,507 crore collected in the same month the previous year. This accomplishment underscores the seventh consecutive month in the fiscal year where average GST collections have exceeded ₹1.6-lakh crore. Notably, November 2023 witnessed GST collections at ₹1,67,929 crore, contributing to the overall positive trend.


Robust Fiscal Performance: April-December 2023 :

During the period of April-December 2023, Gross GST collections reached ₹14.97-lakh crore, exhibiting a commendable 12% increase from the ₹13.40-lakh crore recorded in the corresponding period of the previous fiscal year (April-December 2022). The first nine months of the current fiscal year demonstrated an average Gross GST collection of ₹1.66-lakh crore, reflecting a substantial 12% growth from the ₹1.49-lakh crore average reported in the same period of FY23.

Detailed Breakdown of December 2023 GST Collections :

Breaking down the December 2023 GST collections of ₹1,64,882 crore, the components include CGST at ₹30,443 crore, SGST at ₹37,935 crore, IGST at ₹84,255 crore (with ₹41,534 crore from goods import), and cess at ₹12,249 crore (including ₹1,079 crore from goods import).


Government Settlements and Total Revenue: December Highlights :

Government settlements in December 2023 amounted to ₹40,057 crore for CGST and ₹33,652 crore for SGST from IGST. Post settlements, the total revenue for the Centre and the States in December reached ₹70,501 crore for CGST and ₹71,587 crore for SGST, showcasing a robust fiscal scenario.

Correct Answer :   5.55%

India witnessed contrasting trends in its economic indicators in October and November, with the Index of Industrial Production (IIP) surging to a 16-month high while retail inflation experienced an uptick, reaching a three-month high. These developments have significant implications for GDP projections and monetary policy.

1. IIP Hits 16-Month High in October
* The IIP recorded an impressive 11.7% year-on-year growth in October, marking a substantial increase from the 6.8% reported in September.
* Key contributors to this growth were the electricity (20.4%), mining (13.1%), and manufacturing (10.4%) sectors, surpassing Bloomberg’s forecast of 10.5%.


2. Impact on GDP Estimates
* The robust performance of the IIP is expected to influence the first advance estimates of the gross domestic product (GDP) data for 2023-24, scheduled for release on January 5. This data will precede the Interim * Budget for FY25, set to be presented on February 1.


3. Retail Inflation Rises in November
* Retail inflation, measured by the Consumer Price Index (CPI), increased to 5.55% year-on-year in November, up from 4.87% in October.
* The upward trajectory was attributed partly to a seasonal spike in vegetable prices, contributing to a three-month high in overall inflation.

4. Inflation Drivers
* Food inflation saw a notable rise, reaching 8.7% in November, with vegetable prices accelerating sharply by 17.7%.
* Other contributors to increased inflation included fruits (10.95%), pulses (20.23%), and sugar (6.55%).


5. Sector-wise Performance in IIP
* Among the 23 manufacturing industries, only four, including apparel, wood, computers, and furniture, witnessed contraction in October.
* Strong double-digit growth was observed in primary goods (11.4%), capital goods (22.6%), infrastructure goods (11.3%), and consumer durables (15.9%), indicating a revival in both urban and rural demand.


6. Core Inflation and Monetary Policy
* Core inflation, excluding volatile food and fuel components, stood close to 4% in November.
* The Monetary Policy Committee (MPC) of the Reserve Bank of India (RBI) unanimously kept the repo rate unchanged at 6.5% for the fifth consecutive policy review, with the central bank retaining its forecast for retail inflation at 5.4% for FY24.

Correct Answer :   15%

The government's Goods and Services Tax (GST) collections climbed 15% year-on-year in November to Rs 1.68 lakh crore, the Ministry of Finance said on December 1, 2023.

* At Rs 1.68 lakh crore, the November GST collections is 2% lower than the Rs 1.72 lakh crore collected in October 2023.

* This is the 9th month in a row that the monthly GST collection has come in above the Rs 1.5-lakh-crore mark.

* The latest GST data takes the average monthly collection in 2023-24 to Rs 1.67 lakh crore. Monthly GST collections have risen over the years. From averaging under Rs 1 lakh crore per month in 2017-18 - its first year - collections rose rapidly after the pandemic-hit 20202-21 to average Rs 1.51 lakh crore in 2022-23.

* In November 2023, Central GST was Rs 30,420 crore, State GST was Rs 38,226 crore, Integrated GST was Rs 87,009 crore, and compensation cess was Rs 12,274 crore.

* Further, the government settled Rs 37,878 crore to Central GST and Rs 31,557 crore to State GST from Integrated GST. As a result, the total revenue for the month post settlement was Rs 68,297 crore for the Centre and Rs 69,783 crore for State GST.

* "During the month, the revenues from domestic transactions (including import of services) are 20% higher than the revenues from these sources during the same month last year," the finance ministry said in a statement.

* While total GST collections in November were marginally lower than that in October, the year-on-year growth of just over 15% is the highest so far in 2023-24. In fact, the YoY increase in GST collections in November is the highest in 11 months.

* As per the 2023-24 Budget, the Centre expects its GST collections to rise by 12% in the current financial year. So far in the first eight months of the year, the gross GST collected amounts to Rs 13.32 lakh crore, which is 11.9% higher from the same period last year.

* The PMI data comes a day after the statistics ministry said the Indian economy grew faster-than-expected at 7.6% in July-September period, with the manufacturing sector growing 13.9% year-on-year.

* According to Pratik Jain, Partner at Price Waterhouse & Co LLP, the upward trend in GST collections is likely to continue for the rest of 2023-24, with audits and investigations playing a role.

* "It's interesting to see that robust growth in GST (compared to last year) is seen in most of the manufacturing states, indicative of uplift in demand and consumption," Jain added..

Source : Money Control

Correct Answer :   $4 trillion

India has reportedly reached a historic milestone on Sunday, (19 November 2023), when its GDP surpassed the $4-trillion mark for the first time. Though there is no official word on this.

The milestone was hailed by billionaire and Adani Group Chairman Gautam Adani, two union ministers and Maharashtra Deputy Chief Minister Devendra Fadnavis on Sunday(19 November 2023).

An unverified screengrab from the live tracking GDP feed for all countries based on International Monetary Fund (IMF) data is being widely shared on social media. Many senior BJP leaders have also shared the post.


"Congratulations, India. Another two years to go before India becomes the 3rd largest nation in terms of Global GDP by overtaking Japan at $4.4 trillion and Germany at $4.3 trillion. The Tricolour surge continues! Jai Hind," Adani said on social media platform X.

Many political leaders, including Maharashtra Deputy CM Devendra Fadnavis hailed the achievement. Although the finance ministry and the National Statistical Office did not immediately comment on the viral social media post on India's GDP crossing $4 trillion.

"India's moment of global glory as our GDP crosses $4 Trillion.The rise of #NewIndia under PM @narendramodi ji's leadership is truly unparalleled," Jal Shakti Minister Gajendra Singh Shekhawat said in a post on X.

Another Cabinet minister, G Kishan Reddy in a post said, "Congratulations As The GDP Touches $4 Trillion For The First Time and Marches Ahead. On the course towards $5 Trillion Economy - Modi Ki Guarantee," Reddy is Union Minister for Culture, Tourism and Development of Northeast Region as well as Telangana BJP president.

Fadnavis further said: "This is what dynamic, visionary leadership looks like ! That's what our #NewIndia progressing beautifully looks like ! Congratulations to my fellow Indians as our Nation crosses the $ 4 trillion GDP milestone! More power to you, more respect to you Hon PM @narendramodi ji!."

D Purandeswari, BJP's Andhra Pradesh president said, "Congratulations BHARAT on becoming a 4 Trillion Dollar Economy ! This phenomenal achievement has been made possible by the path breaking reforms introduced and implemented by Prime Minister Shri @narendramodi Ji Government in the last 9.5 years."

It is very difficult to have live tracking of GDP numbers of all countries as numbers of various sectors of the economy are available with a lag.

India recorded GDP growth of 7.8 per cent during the April-June period of 2023-24, the highest in the past four quarters, on the back of double-digit expansion in the services sector, retaining its position as the world's fastest-growing major economy.

The 7.8 per cent GDP growth in the June quarter is higher than the 6.3 per cent recorded by China during the same period.

In July, an analysis by the PHD Chamber of Commerce and Industry, it has been predicted that the Indian economy will surpass the $4-trillion mark in the fiscal year 2024-25. It also said the per capita nominal GDP is expected to cross the threshold of $2800.

In August, an S&P Global report said India can become a $6.7 trillion economy by 2031 from $3.4 trillion currently, if the country clocks an average growth of 6.7 per cent for 7 years..

Source : Business Today