UPSC GS Economy by CA Rahul Kumar

Mock Panel Interview Preparation

Special focus on optional specific preparations

Strategy Session by Toppers & Interview Appeared Students

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* Commerce & Accountancy
* ⁠Management
* ⁠History
* ⁠English Literature
* ⁠Sociology
* ⁠Anthropology

-Team DIADEMY IAS

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1. Bikanervala's Growth: Expanded from two to seven manufacturing units, with a major plant along Yamuna Expressway.


2. Yamuna Expressway's Appeal: Strategic location, robust infrastructure, and facilities like logistics hubs and Asia's largest airport attract industries.


3. Efficient Leadership: YEIDA CEO Dr. Arun Vir Singh's proactive approach resolved land allotment issues swiftly.


4. Investment & Employment: Rs. 400-500 crore facility employs 300 workers, producing 80 metric tons daily.


5. Attracting Big Players: Infosys, Patanjali, and international investors choose Yamuna Expressway.


6. Future Vision: Transforming Uttar Pradesh into a premier industrial and commercial hub.

1. Manmohan Singh’s Economic Vision: Known for liberalizing India’s economy, Singh diverged from Nehruvian policies, advocating for market-oriented reforms early in his career.


2. Critique of Central Planning: Singh recognized the flaws of excessive regulation and corruption, advocating for balanced public-private roles.


3. Reforming License Raj: He emphasized reducing licensing restrictions and promoting industrial growth through incentives.


4. Tackling Inequality: Singh warned against both extreme inequality and populist “soak the rich” policies.


5. Trade Openness: He highlighted export potential neglected by early planners.


6. Public Sector Challenges: Singh called for autonomy, accountability, and depoliticization of public enterprises.


7. Human Development Focus: Education, health, and sanitation were central to Singh’s vision for productivity and growth.

• The RBI has established an eight-member committee, chaired by Prof. Pushpak Bhattacharyya of IIT Bombay, to create a Framework for Responsible and Ethical Enablement of AI (FREE-AI) in the financial sector.

• The committee will assess AI adoption globally and in India, analyze regulatory approaches, and identify risks.

• It will recommend frameworks for governance, compliance, and ethical AI use in banks, NBFCs, fintechs, and PSOs.

• Members include experts from academia, government, and industry, such as Debjani Ghosh, Balaraman Ravindran, Abhishek Singh, and Rahul Matthan.

1. Economic Slowdown Factors: RBI’s monetary policy and macroprudential measures contributed to the economic slowdown in H1 FY24, alongside structural issues and subdued corporate hiring.


2. Future Growth Outlook: Growth in H2 FY24 is expected to improve due to low inflation, rate cuts, and increased capital spending.


3. Global Risks: Elevated stock market risks, global trade uncertainties, and strong US dollar pressure emerging economies.


4. FY26 Challenges: Uncertainties loom for FY25-26 with global tightening policies.


5. India’s Q2 FY24 GDP: Growth slowed to 5.4%.

1. Lowest GNPA in 13 Years: Gross NPA ratio of banks dropped to 2.5% in September 2024, the lowest since FY11.


2. Agricultural Sector Highest GNPA: GNPA for agriculture was the highest at 6.2%, while it was lowest for large industries at 1.2%.


3. Improved Financial Health: Net NPA ratio also fell to a decade-low of 0.62% by March 2024.


4. Recovery Boost: Strong recoveries and upgrades drove the decline.


5. Slippage Decline: Slippage ratio of banks decreased for the third consecutive year.


6. Resilience of Industrial Loans: GNPA for industrial loans reduced to 2.9%.

1. Decline in Domestic Migration: Domestic migration in India decreased by 17.8% from 2011 to 2023, per the EAC-PM report.


2. Improved Opportunities: Smaller cities offering better economic opportunities are cited as a reason for the slowdown.


3. Key Data Sources: The study used railway ticketing, telecom, and banking data to analyze trends.


4. Migration Rate: Migration fell from 37.64% in 2011 to 28.88% in 2023.


5. Challenges in Data Analysis: Delayed and restricted datasets hinder detailed conclusions.


6. Urban Dynamics: Major urban clusters like Delhi, Mumbai, and Chennai still attract migrants.


7. State Trends: Uttar Pradesh, Maharashtra, and Madhya Pradesh saw the highest outmigration.

1. Record IPO Earnings: Investors and promoters earned ₹1 lakh crore in 2024 through IPOs, the highest in a decade.


2. Fresh Share Sales: ₹64,300 crore came from fresh share issuance, driving growth and repaying debt.


3. Retail Investor Role: Retail appetite fueled ₹1.6 lakh crore mop-up in the primary market.


4. Startup Boom: 13 tech startups raised ₹29,250 crore in 2024 IPOs.


5. Sustained Momentum: IPO trend to continue with more companies planning listings.

1. CPI Revision: MoSPI is revising the Consumer Price Index (CPI) base, seeking expert input.


2. PDS Dilemma: Including free PDS items and social transfers in CPI is challenging due to zero cost implications.


3. Global Standards: Exclusion aligns with IMF guidelines and international best practices.


4. Impact Assessment: Redistribution methods for weights are under consideration.


5. Approaches: Options include assigning minimum value or excluding such items altogether.


6. Focus on Monetary Transactions: CPI should reflect monetary-based consumption only.


7. Proposed Base: Updates derive from Household Consumption Expenditure Survey (2022-23).

1. Understanding MSP: Minimum Support Price (MSP) ensures farmers receive a guaranteed price for crops to protect against market fluctuations.


2. Current Issues: Farmers face high costs of production, debt, and exploitation due to inadequate MSP coverage.


3. Groundwater Depletion: Paddy cultivation strains groundwater, with Punjab's supply potentially lasting only 20 years.


4. Crop Diversification: Guaranteed MSP for 23 crops can reduce dependency on rice and paddy.


5. Economic Savings: Diversifying crops reduces import reliance on oilseeds and pulses, saving national resources.


6. Public Health: MSP promotes sustainable farming, reducing chemical use and related health hazards.


7. Global Insights: OECD studies link MSP-like policies to rural development and reduced farmer suicides.


8. Urgency: The government must implement guaranteed MSP to safeguard livelihoods, conserve resources, and ensure food security.

1. Merger Plan: Honda and Nissan aim to finalize a merger by June 2025, creating a common holding company for August 2026 listing.


2. Economies of Scale: Combined, they will become the third-largest automaker globally, competing with Toyota and VW.


3. China Factor: Collaboration addresses losses in the EV-dominated Chinese market.


4. Cost Sharing: Joint platforms and R&D for hybrids and EVs reduce costs.


5. Nissan’s Struggles: Financial instability drives the merger for sustainability.


6. India Impact: Both companies seek improved market presence but face competition.


7. Battery EV Push: Nissan’s EV expertise complements Honda’s growing electric ambitions.

1. GDP Forecast: RBI downgraded India's GDP growth forecast for FY 2024-25 to 6.6% from 7.2%, citing a temporary slowdown.


2. MSME Recovery: Micro, Small, and Medium Enterprises (MSMEs) show signs of recovery, but private investments and credit growth remain weak.


3. Global Context: India’s growth is steady compared to global slowdowns, with China and the US contributing to uncertainties.


4. Inflation Challenges: Prolonged disinflation and food inflation pressures pose concerns despite a good rabi season.


5. Income Transfers: ₹1.9 trillion in FY25 transfers may boost rural demand.


6. Sliding Credit Growth: Credit growth has been declining, affecting private sector expansion.


7. Policy Shifts: Monetary easing is limited globally, influencing domestic growth policies.


8. Investment Gap: Sluggish private investments highlight structural economic issues.

1. Inflation Targeting: Raghuram Rajan criticizes focusing on headline inflation instead of core inflation, highlighting the impact of high food prices on affordability.


2. Growth Challenges: India’s growth post-COVID improved but remains below potential; real GDP is yet to reach pre-2019 levels of 6-8%.


3. Employment Issues: Structural issues in job creation persist, with capital-intensive industries overshadowing labor-intensive ones.


4. Stagflation Risks: India faces risks of low growth and high inflation, requiring urgent reforms in labor and productivity.


5. Reforms Needed: Rajan stresses the need for investments in education, infrastructure, and labor-intensive sectors to achieve "Viksit Bharat" by 2047.

1. FPIs Net Sellers: Foreign Portfolio Investors (FPIs) withdrew ₹976 crore from Indian equities (Dec 16–20) amid rising US bond yields and a strong dollar.


2. Initial Investments: FPIs invested ₹3,126 crore in early sessions but reversed with ₹4,102 crore outflows later.


3. Market Sentiment: US Fed policy uncertainty and higher yields impacted investor confidence.


4. December Net Positive: Despite the reversal, FPIs infused ₹21,789 crore in December.


5. Cautious Approach: FPIs await US Fed outcomes before further investment decisions.

1. Exchange Rate Basics: The exchange rate reflects how much of one currency is needed to buy another (e.g., ₹85 per USD in December 2024).


2. Key Factors: Demand for dollars increases with higher US imports, services, or investments, strengthening the dollar.


3. Impact of Trade: If India imports more from the US, demand for USD rises, depreciating the rupee.


4. Investment Flows: US-bound investments weaken the rupee, while reverse flows strengthen it.


5. Inflation Role: High domestic inflation reduces rupee value, making imports costlier (e.g., ₹105 needed for future purchases).

📣Announcement of Interview preparation session at 'ZERO COST'📣

LIVE INTERVIEW 2024 Strategy & Guidance Session by Team of Expert of DIADEMY IAS

23rd December (Monday) at 8.30 PM

Theme of today’s session - DAF 2 filling approach + Overall interview preparation strategy

Session will be taken by CA Rahul Kumar Sir of DIADEMY IAS

Exclusive Session for Interview 2024 Appearing Students

For joining link send your DAF 1 @diademyiase on telegram or send via email to [email protected] and we will share joining credentials to participate in the meeting

1. Agricultural Heritage: Indian agriculture dates back to 7000 BC, employing 45.76% of the workforce and contributing 15% to the GDP.


2. Global Leadership: India is the second-largest producer of food grains and key crops globally.


3. Technological Integration: Tools like AI, GIS, and precision farming enhance productivity.


4. Sustainability Push: Organic farming and eco-friendly practices are promoted for environmental security.


5. Kisan Diwas: Celebrates farmers' contributions and raises awareness of their challenges.


6. Policy Support: Initiatives by leaders like Chaudhary Charan Singh aim to empower farmers and modernize agriculture.

1. Economic Slowdown: India’s GDP growth has slowed from over 8% to less than 5.5% in recent quarters, signaling structural challenges, not a temporary trend.


2. Export-led Growth Strategy: India must focus on boosting exports, particularly goods, to match its global economic share of 4%.


3. Policy Reform: Consistent trade policies, reduced tariffs, and removal of export bans are needed to enhance competitiveness and tap global markets.


4. Trade Liberalization: Reforms in trade regimes, which have become protectionist, can strengthen market access and exports.


5. Manufacturing Push: Encouraging foreign direct investment (FDI) in manufacturing is vital for long-term growth.


6. Learning from China: China’s export success shows the need for a predictable, pro-business environment.

India’s agriculture faces climate threats, soil degradation, and skewed subsidies favoring nitrogen-based fertilizers. Diversifying towards fruits, vegetables, and dairy, removing export controls are essential to ensure farmers' fair income and nutritional security.

1. Climate Change Challenges: Rising temperatures and declining rainfall threaten agricultural output. Resilient farming needs investment in R&D.

2. Improved Soil Health: Policies must encourage balanced fertilization, as current subsidies favor nitrogen-heavy fertilizers, depleting soil nutrients.


3. Technological Interventions: Innovations like bio-fortified crops and efficient fertilizers can boost productivity and sustainability.


4. Agri-Diversity Focus: Prioritize fruits, vegetables, and dairy, which yield higher returns and better nutrition than staples like rice and wheat.

5. Farm-to-Consumer System: Build value chains to ensure farmers earn more than one-third of consumer spending.

Session about to start

"Live Free Ancient Indian History : High Impact revision (HIR) Series for CSE 2025 - Lec 3"

Session will be conducted by Soma Sekhar Sir (2 UPSC Interviews) of DIADEMY IAS

Revision Classes at ZERO COST

Book Your Date on 20th November (Wednesday) at 9 PM

Zoom Class Link: https://us02web.zoom.us/meeting/register/tZwpdOqrqz0jGNfTCX6yilsTJl8kat7ebn1L

Meeting ID: 884 3335 6923

Passcode: 099553

Please register yourself in order to join the meeting. After registration please check email inbox for joining details**

"Live Free Ancient Indian History : High Impact revision (HIR) Series for CSE 2025 - Lec 2"

Session will be conducted by Soma Sekhar Sir (2 UPSC Interviews) of DIADEMY IAS

Revision Classes at ZERO COST

Book Your Date on 19th November (Tuesday) at 9 PM

Zoom Class Link: https://us02web.zoom.us/meeting/register/tZwpdOqrqz0jGNfTCX6yilsTJl8kat7ebn1L

Meeting ID: 884 3335 6923

Passcode: 099553

Please register yourself in order to join the meeting. After registration please check email inbox for joining details**

"Live Free Ancient Indian History : High Impact revision (HIR) Series for CSE 2025 - Lec 2"

Session will be conducted by Soma Sekhar Sir (2 UPSC Interviews) of DIADEMY IAS

Revision Classes at ZERO COST

Book Your Date on 19th November (Tuesday) at 9 PM

Zoom Class Link: https://us02web.zoom.us/meeting/register/tZwpdOqrqz0jGNfTCX6yilsTJl8kat7ebn1L

Meeting ID: 884 3335 6923

Passcode: 099553

Please register yourself in order to join the meeting. After registration please check email inbox for joining details**

"Live Free Ancient Indian History : High Impact revision (HIR) Series for CSE 2025 - Lec 1 "

Session will be conducted by Soma Sekhar Sir (2 UPSC Interviews) of DIADEMY IAS

Revision Classes at ZERO COST

Book Your Date on 18th November (Monday) at 9 PM

Zoom Class Link: https://us02web.zoom.us/meeting/register/tZwpdOqrqz0jGNfTCX6yilsTJl8kat7ebn1L

Meeting ID: 884 3335 6923

Passcode: 099553

Please register yourself in order to join the meeting. After registration please check email inbox for joining details**

Revise GS Ancient History in 15 Hrs (Live online)

Ancient Indian History : High Impact revision (HIR) Series for CSE 2025

At “ZERO” cost

By Shekhar Sir (History optional Faculty, UPSC interview appeared, Faculty in Shankar IAS)
-----------------------
1. Remember with maps & images
2. PYQs of UPSC (Pre & Mains) and State PCS exams
3. 15 hrs. Hight impactful hours.
4. ⁠Hitting the pain points easy your preparation.

Program start date - 18th November, 2024 (Monday)

Timing - 9 PM to 10 PM

Join the telegram channel below mentioned to get the class link: https://t.me/gshistorydiademy

Team DIADEMY IAS, ORN Delhi

Revise GS Ancient History in 15 Hrs (Live online)

Ancient Indian History : High Impact revision (HIR) Series for CSE 2025

At “ZERO” cost

By Shekhar Sir (History optional Faculty, UPSC interview appeared, Faculty in Shankar IAS)
-----------------------
1. Remember with maps & images
2. PYQs of UPSC (Pre & Mains) and State PCS exams
3. 15 hrs. Hight impactful hours.
4. ⁠Hitting the pain points easy your preparation.

Program start date - 18th November, 2024 (Monday)

Timing - 9 PM to 10 PM

Join the telegram channel below mentioned to get the class link: https://t.me/gshistorydiademy

Team DIADEMY IAS, ORN Delhi

• New Release Timing: The Ministry of Statistics and Programme Implementation (MoSPI) has changed the release time for the Consumer Price Index (CPI) and Index of Industrial Production (IIP) from 5:30 PM to 4:00 PM on the 12th of each month.
• Rationale for Change: This adjustment aims to provide more time for analysts and stakeholders to access and analyze CPI and IIP data, aligning the release with the closing hours of major financial markets in India to avoid disrupting trading activities.
• Market Sensitivity: While stock markets close at 4 PM, other financial markets, such as government bond and foreign exchange futures, remain open until 5 PM, meaning they may still react to data released at 4 PM.

• Niti Aayog's Position: BVR Subrahmanyam, CEO of Niti Aayog, emphasized that

India should join the Regional Comprehensive Economic Partnership (RCEP ) and the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) to enhance its economic growth.
 

• Economic Importance: Subrahmanyam highlighted that joining these trade agreements would benefit India's Micro, Small & Medium Enterprises (MSMEs), which contribute 40% of the country's exports.
• Global Value Chains: He noted that India has not fully capitalized on the 'China plus one' strategy, with other countries like Vietnam and Indonesia gaining more from this opportunity.
• Tariff Challenges: Subrahmanyam pointed out India's higher tariffs as a significant barrier to benefiting from global trade agreements, suggesting that tariff reductions are essential for increased competitiveness.

• Initiative Overview: The Department of Financial Services (DFS) has introduced a "One State, One Regional Rural Bank (RRB)" roadmap to streamline and enhance the efficiency of rural banking across India.
• Objective: The initiative aims to consolidate RRBs to improve financial inclusion and provide better banking services in rural areas, addressing the diverse needs of different states.
• Current Discontent & Stakeholder Concerns: The DFS acknowledges the concerns raised by state governments and RRB management about the influence of sponsor banks on operational efficiency and decision-making processes.
• Implementation Strategy: The roadmap will involve restructuring existing RRBs to ensure that each state has a single, unified RRB that caters specifically to its regional needs.
• Expected Benefits:
• Enhanced operational efficiency and accountability.
• Improved access to credit for rural populations.
• Strengthened financial stability of RRBs through better governance.

Completion Status: 

As of February 2024, about 90% of the Dedicated Freight Corridors (DFCs) have been commissioned, with a total route length of 2,557 km

Corridor Details:

Eastern Dedicated Freight Corridor (EDFC):
Fully operational, spanning 1,337 km from Ludhiana (Punjab) to Sonnagar (West Bengal).

Western Dedicated Freight Corridor (WDFC):
93.2% completed, running 1,506 km from Dadri (Uttar Pradesh) to Jawaharlal Nehru Port Terminal (Maharashtra)

Economic Impact:

• DFCs are expected to reduce logistics costs below 10% as per the National Logistics Policy.
• Transit times for coal transport have decreased from 35 hours to 20 hours.
• The DFCs are projected to enhance India's modal share in logistics from 28% to 44% by 2051.

Benefits

•Enhanced connectivity for agriculture and manufacturing sectors.
•Improved supply chain management and support for e-commerce.
•Development of Private Freight Terminals and Multi-Modal Logistics Parks along DFC routes.

If it is established that these dumplings have caused material injury to domestic players, the DGTR recommends the imposition of anti-dumping duty. The finance ministry takes the final decision to impose these duties.

Anti-dumping probes are conducted by countries to determine whether domestic industries have been hurt because of a surge in cheap imports.

As a countermeasure, they impose these duties under the multilateral regime of Geneva-based World Trade Organization (WTO). The duty is aimed at ensuring fair trading practices and creating a level-playing field for domestic producers vis-a-vis foreign producers and exporters.

Concerns Over AI in Banking and Systemic Risks

Increased AI Adoption

: Indian banks are rapidly integrating AI and machine learning tools to enhance customer experience and manage risks, with notable examples including chatbots like ICICI Bank's "iPal".
•

RBI's Warning

: The Reserve Bank of India (RBI) has expressed concerns about reliance on AI leading to concentration risks, emphasizing that failures could have widespread effects across the financial sector.

Systemic Risks:

The growing use of AI introduces vulnerabilities such as cyberattacks and data breaches, with opaque algorithms complicating decision-making transparency.

Conclusion

Balancing innovation with regulatory oversight is crucial as Indian banks adopt AI technologies to ensure financial stability and mitigate systemic risks.

Happy Diwali 🪔 Everyone

Challenges in Fertilizer Imports
1 High import Dependency: India relies on imports for about 20% of urea, 50-60% of Diammonium Phosphate (DAP), and 100% of Muriate of Potassium (MOP).
2 Stagnant Domestic Production
3 Rising Costs: The Ukraine conflict has increased prices for petroleum-based fertilizers, impacting import costs.
4 Supply Chain Vulnerabilities:• Rising oil prices due to the conflict increase fertilizer production costs, straining import dependencies.

Recommendations for India
• Increase Domestic Production: to reduce reliance on imports.
• Shift Farming Practices: Transition to natural farming and alternatives like nano urea to decrease dependency on imports.
• Policy Initiatives: Facilitate investments in fertilizer manufacturing and promote sustainable agricultural practices.

TOP Crops, Price Volatility & RBI

Current Inflation Context
• Inflation Rates: In September, overall inflation reached 5.5%, with food inflation exceeding 9.2%. Vegetable inflation is particularly concerning at 36%, contributing significantly to the Consumer Price Index (CPI).

Factors Influencing Inflation
1 Supply Chain Disruptions: Adverse weather has led to reduced yields of tomatoes, onions, and potatoes (TOP), exacerbating price volatility.
2 Historical Context: Since adopting the flexible inflation targeting framework in 2016, CPI inflation has exceeded the target of 4% about 72% of the time.

RBI's Role and Challenges
• Monetary Policy Constraints: RBI Governor Shaktikanta Das has expressed caution regarding lowering the repo rate due to persistent food price inflation.
• Food Weighting in CPI: Outdated weights assigned to food in the CPI basket complicate monetary policy effectiveness.
Structural Issues

The rise in vegetable prices reflects structural weaknesses, including:
• High post-harvest losses (up to 26% for potatoes).
• Limited storage capacity leading to supply shortages.
• Inefficient distribution networks.

Proposed Solutions
1 Policy Reforms: Updating CPI weights based on recent consumption data is essential for accurate inflation measurement.
2 Enhanced Processing Capabilities: Initiatives like converting surplus tomatoes into paste can stabilize prices.
3 Dedicated Agencies: Establishing agencies focused on managing TOP crops can streamline production and distribution.

India's reliance on imported oil and natural gas has increased, with oil import dependency reaching 88.2% in the first half of FY25, up from 87.6% the previous year. Natural gas import dependency also rose to 51.5% from 46.8%.
Key Factors
• Rising Energy Demand: Rapidly growing energy consumption is outpacing stagnant domestic production.
• Price Volatility Vulnerability: High import reliance exposes the economy to global oil price fluctuations, affecting trade deficits and inflation.
• Government Initiatives: Efforts to reduce oil imports include promoting electric mobility, biofuels, and boosting domestic production

Paddy Procurement Crisis in Punjab

Current Situation
Paddy procurement in Punjab is facing significant delays, with only 37.68 lakh tonnes procured as of October 23, compared to 49 lakh tonnes last year. Nearly 90% of the procured crop remains stuck in mandis due to logistical and bureaucratic issues, exacerbated by private millers refusing to store government paddy.

Key Factors Contributing to the Crisis
• Storage Issues: Private rice millers are hesitant to accept government paddy due to a lack of storage space, worsened by previous years' surplus.
• Hybrid Varieties: Non-recommended hybrid paddy varieties are yielding lower milling ratios, leading to financial losses for millers.
• Labor Demands: Increased demands from commission agents and laborers for higher compensation are further complicating procurement efforts.
Impact on Farmers
Delays in procurement are causing farmers to slow harvesting, risking crop quality and economic distress. Additionally, this disruption threatens the agricultural cycle, potentially leading to stubble burning and unrest among farmers.

Proposed Solutions
The government must find temporary storage solutions, enhance coordination among procurement agencies, and address millers' concerns regarding hybrid varieties. Long-term strategies include diversifying crops to prevent surplus issues.