 Alright, so the plan for the session is we have taken 30 questions to discuss the current events in economics, but I'm sure that all of you guys know that it is not possible to discuss the entire economics current affairs for the year 2020-23 within these 30 questions. It's not possible to have just a single session to cover this as well. So if your expectation is that you have not studied current affairs throughout the year and this session is going to help you get the current affairs that you require for the exam, unfortunately that is not going to happen. So there are some key analysis with respect to current events which is not any information that is available. So I have taken about 15 odd questions which are like that. So the current affairs which are not something that you will directly see in the news but we have to interpret out of various information that is there. So a lot of times the question that comes is where do we get the data from? So data based questions is what is going to be the focus of what we have plus there are a couple of or a few concepts not a couple of a few concepts which I have taken up which there is some relevance to current events. So concepts related to that are included plus some other often repeated area or something that to my understanding it is something that is has been prominent in the news also sometimes which is confusing in nature to similar kind of things which creates confusion. So the mechanism that I adopted is most of you guys have my contact information the telegram ID that is there or my email ID. So if you have been a student of mine you have that with you. So you guys text me saying I don't understand the difference between this particular term and this particular term. So based on various questions that have come up. So I have done an analysis of what is a little hard to differentiate between and if there is some relevance of that sort that is also a logic which I have used. So this is a series of sessions that we have had you already we are done with a few subjects but you would have already noticed that more two subjects are actually done in a similar way it is very individually designed according to the subject and the faculty who is taking the particular subject. So that is how this session is also going to be it is going to be a very specific area that or a set of specific areas that I have picked up. So we have as I told you 30 questions so each question I will display it on the screen then I will give you a timeline of about 45 seconds. I want you to give me an answer you can just send the answer to the host panelists whatever it is I will be able to take a look at the answer as well simultaneously as and when you send and then we will discuss what is the answer what is the explanation what is any associated logic that is concerned with it. In addition to that if you happen to have any doubt with respect to a particular concept if it is directly related you can ask me there I will give you an answer to that as well with respect to explaining the concept itself I can do that if it is something completely unrelated to this I can take it up at the end of the session. So after we finish 30 questions maybe we will dedicate the last 15 minutes or so to answering areas that I have not taken up especially concepts more than current affairs concepts okay if there is anything. So this is the plan that I have shall we start with the first question I am just checking if you are able to answer me the question and answering is working properly so just to know that shall we start that is the question that I am starting with okay so yes yes yes good getting answers properly which is perfect okay alright so we will start with the first question then there is a timer which will run on the top okay so first question you can see a timer running on the top once it runs out I will stop you have to send me the answer A B C D choose the right one send it across to me okay so sorry I didn't realize that we ran out of time happens it takes a little bit of time for me to get used to this as well alright so I have a series of answers so I have people who have answered A I have people who have answered B I have people who have answered C I have people who have answered D if I were to just glance through and look at what is the most common answer the most common answer seems to be A okay so this is a question which you can very generically answer okay at least one of the statements so I am going into the explanation part now so look at the statement the tertiary which of the following statements about the trends in sectoral classification of the Indian economy is or are correct so trend is what the question is about it is not one year's current affairs but it is current affairs of the over the last decade because the question itself is over the last decade okay so look at the first statement there the tertiary sector has been contributing around half of India's GBA consistently over the last decade if you have been in my class towards the end of the first chapter we do an analysis of the sectoral classification of the economy how much does primary sector contribute how much does secondary and how much does tertiary contribute so this is a question with respect to the generic trend okay and we have seen in class that roughly 50 percentage of India's GDP or GBA is contributed by the service sector so the remaining 50 percentage is distributed between your primary sector in fact 55 percentage is roughly is what we say with respect to the service sector the remaining 45 is distributed between your secondary sector which contributes about 25 and the primary sector which contributes about 20 roughly is what we say but the question is this is that data applicable across the last 10 years and they are not very specific in the first statement and they are not saying that the tertiary sector has been contributing more than half or anything around half so 49 percentage is also around half 47 percentage is also around half 55 percentage is also around half so 45 to 55 is arranged that is acceptable for the definition of around half okay so that is the first statement okay the second statement is this is the tricky statement primary sector is the only sector which has recorded consistent positive growth rate of GBA over the last decade which means that every single year over the last 10 years the rate of growth should have been greater greater than 0 in the sense the rate of growth should have been positive and this becomes tricky see in under other circumstances it would not be tricky but with a year of COVID in between where the Indian economy itself went into negative there was a recession there was a contraction of GDP there was a negative GDP growth rate how realistic is it to imagine that primary sector recorded positive okay now the answer to that you can also apply a little bit of logic when there is a lockdown you can shut down an industry when there is a lockdown you can shut down an IT firm you can shut down all other tertiary sectors but when there is a lockdown can you shut down the farm can you say that okay the farm sector is going to be shut down are you going to tell nature that okay don't grow because we are shutting down that's not likely to happen right so one of the bright spots during the COVID itself among the various sectors was that primary sector continued to grow well in fact primary sector's contribution which is usually around 70 percentage of the GDP grew to around 20 percentage of the GDP during COVID because of a drop in the other sectors okay which means primary continue to do well with respect to the nation's GDP so the second statement is the dicey statement the second statement is correct the first statement is also correct the answer here is see both one and two now let's look at the data which substantiates okay so let yeah so this is the data which substantiates so this is as you know I have shown this in class as well this is the press information bureau where the national statistics organization or national statistics office they publish their data okay when I say this I don't think you are able to see the screen that I'm sharing you're still seeing the okay data is not as great so I'll have to in that case go to PPT I think yeah so now I think it should be visible or maybe not or just hold on for a moment I close this yeah I know in I realized I'll share it now okay now it's visible so this is the usual document that I share in class with respect to press information bureau their data on the MOSFIS data on national income accounting so they have given an introduction this is quite an elaborate note this particular note if possible I would suggest you to download this and keep it because it's a very unique kind of a document not like the usual documents that I that we see previously because the information inside it is very very limited the second advanced estimate that is given the document published on 28th February 2023 comparatively recent okay so this particular document is quite long and has a lot of information that we require okay but let's focus on the question at hand right now and let's try to answer that first so I'm scrolling down I'm scrolling down all the usual information is done now we go to this data look at the data it starts from 2011 12 and it has data until 2021 22 with hasn't had the rate because it is the first revised estimate now the question is this just take a look at the data wonder sector wise GV at current prices sector wise GVA growth rate is what is given so what matters for us is the first this in percentage this is what we are going to look at not the growth rate because if you just remember the question that was asked the question was so the question was tertiary sector has been contributing around half of India's GVA so it's not the rate of growth it is the contribution of that particular sector which we focused on okay so just going take a look at the data that we have over here tertiary sector 2011 so this is the first one okay so 49% age 50% age 50.6 51.8 52.3 52.6 52.5 53.3 54.8 52.4 and 52.5 okay so this is the data with respect to tertiary sector which means that tertiary sector over the last decade has indeed been contributing around half of India's GVA GDP you can look at it either way doesn't make much of a difference only the taxation and the subsidies are the difference between them still the data will hold for whether it is given as GDP or GVA doesn't matter okay the tertiary sector which is contributing around 30% age has actually sort of sort of reduced and brought it to around 25% so roughly 25 26% age every year it has been contributing primary has been contributing roughly 20% age every year okay so this is the database on which we are going this is the trend that we need to observe this is the trend the base which is not just one year but across the years okay so this is the source of the data once again let me see if I probably share the screen itself so that let's see if this works it becomes easy for me to shut so that is the answer to the first question do you guys have any queries with respect to this okay yeah there is a second question that comes second part that comes in which I didn't address I'm sorry about that primary sector is the only sector which has recorded consistent positive growth rate of GVA okay so that is something that needs addressing as well so the data necessary for that is over here again the second set of columns that we have over here the first one is the sector wise share in GVA is the sector wise share in GVA but the second statement is with respect to growth in GVA okay growth in GVA now when it comes to growth in GVA take a look at it primary secondary tertiary all of them are impositives 2019 we had a recession or we had a sort of a slowdown in growth or reduction in growth in secondary in 2021 we had a reduction in growth in both secondary as well as tertiary due to covid but if you look at the primary sector throughout from 2000 say 1213 to 2021-22 every year you will find a positive sign whether it is 1.2 percentage growth or whether it is 4.8 percentage growth or whatever is the rate of growth it has been a positive rate of growth that we have had for the last decade so this is again the interpretation from the data just so that there is or just because there is a minus sign over here it is something that you should be observing whenever you find something unique in a list of data everything is positive just one or two are negative everything is moving up something alone is falling down as you will see subsequently with respect to graphs those are worth noting service sector throughout it has been positive but just one year alone it is showing a negative and that's why it has been very high positive so 678 percentage is what is growing by and there is a drop to minus 4.2 percentage so this is of significance there right so that is the second part of the statement all right great so please show the document name again so what I would suggest is I would just suggest you to type press information bureau so what I did is I'll just show you the way I searched itself just search for GDP PIB I have tied and the second at once estimates in the PIB website just click on that you will get to this particular area so this has all the information with respect to the data you can find it in the Mosby website itself but this is the easier way to access this data okay all right so there is a request that I should be sharing the PPT with respect to this PPT is just the questions none of this is PPT I am just sharing the screen from my laptop my you look at it it's a browser that I'm sharing let's see I'll try to share a PDF I'll tag it somewhere and try to share it with you guys PDF of the PPT that we have but there is nothing in the PPT assets I don't see don't assume that these are questions that are going to be asked as it is in the UPC exam the questions are not the focus here the information that we take out of is it is what is the focus over here so don't know get to attach these questions something that this is going to appear as it is I don't have that level of you know knowledge to predict what is the UPC question going to be nowhere close to being close to making such cases anyway moving to the second question which is again a continuation Indian economy trends so we are starting the timer now okay so again sorry time ran out I didn't realize anyway so the overwhelming answer I was looking at the answer that's why I was not able to I have the answer on the side in a different device I'm looking at the chat box over there so that's the reason why I keep losing track of the fact that time has run out anyway so the overwhelming answer seems to be D one and two there's one statement which you can reasonably eliminate the third statement which says for the first time in a decade exports outperformed imports which means exports is greater than imports if that does happen just know that it will be all over the news there is no way that you will miss such a news have you seen a news like that that exports have outperformed imports don't have to you don't even have to think have I seen it in some remote corner no it will definitely be there as a big thing in the news if it happens it hasn't happened so you would not have seen it in the news so third is wrong again the moment three is wrong you eliminate C now the question is is it a is it B is it D which is why most people went for a D seems like correct the answer is actually A the first statement quite a few people have answered the correct one as well have given me the correct answer as well so once again we go to the same document for the data that we require so the data is in a different part of this document okay so this is one year it is not over a decade or anything it is just one year's data we will take a look at the current price date okay okay so what is the question about now if you know the aggregate demand formula so I am not able to zoom it any further for some reason so I am able to zoom out really really small but it is not zooming in sadly okay so again the same data if you want you can access it in your device but I can point it out to you let me just see if there is an option for me to zoom it from here yeah so it is not very frequently that my technical skills work accidentally it happened to work now so good good for me so the question once again let us go back to the question the question states household consumption expenditure contributes more than half of India's GDP so the moment you see the word expenditure and in the context of GDP you have to think in your mind expenditure method of calculating GDP c plus i plus g plus x minus m c is the household consumption expenditure i is the investment expenditure and x minus m is what is the third statement about it g is the only thing which we have not asked over here okay so c plus i plus g plus x minus m look at the examples that we have used in class the examples that we have used in class says in the example on the circular flow of income that we discussed in class the first thing that I use is 60 percentage is household consumption expenditure 30 percentage is investment expenditure then the remaining 10 percentage goes towards government and then we have exports and imports that come in and maybe I have mentioned maybe I have not mentioned but that is representative of what is the reality in the economy as well take a look at this data this is the share in GDP private final consumption expenditure as we see over here okay I am not able to choose parts of it but share in GDP the column that is highlighted here you will find a number 57.258.3 58.5 that is what is c the one next to it government final consumption expenditure roughly 10 that is g c plus g then the gross fixed capital formation plus change in stock plus valuables which technically is referred to as gross capital formation or more commonly referred to as investment it contributes roughly around 30 35 percentage roughly because there is an exports and imports also or 30 percentage is something that you can assume it as okay you cannot expect a perfect 100 as such it will eventually appear but there are discrepancies as well and exports you will notice that exports are lesser imports are greater it has been the case as a percentage of GDP or in absolute terms also you can take a look at the previous one the table that is given above but the question is with respect to percentages so this is the source of the information based on which the question is set okay going back to the question household consumption expenditure contributes more than half of India's GDP it contributes roughly around 60 percentage of India's GDP and you don't need to know all of this you can simply go by the common statements that here you hear India is the consumption oriented economy you go back to the previous question you hear India is a service sector oriented economy tertiary sector contributes around half of India's GDP consistently over the decade or not is a different thing that's a general statement that we know this is also a general statement that we know okay what is the general statement that we know India is a consumption oriented economy so more than half of India's GDP is contributed by household consumption correct investment expenditure contributes less than a quarter less than a quarter means less than 25 percentage that is not true it contributes more than 30 percentage of India's GDP okay so always try to remember data in round numbers 50 percentage greater lesser 25 percentage greater than greater lesser one third one fourth try to remember the data with respect to some you hear you some come across the data of 28 percentage somewhere very hard to remember the 28 percentage because remember it has one four greater than one four around one four some way to remember it okay so that is what you should be looking at doing so the answer here is a one only any queries okay we have run out of time for a change I noticed it okay so I think a lot of people have given me the correct answer the correct answer here is a one and two only so it's good it's you are familiar with this particular index the reason why I pick this particular index is it's an index which extends from the first chapter about production whether production is likely to happen or not so it is a growth oriented indicator or index that is there not something that we discussed in class so I thought we'd pick it up so that we can get familiar we can familiarize ourselves with it first question who publishes it there is not a standard one globally there are these are global index but calculated regionally in every country there are multiple organizations which are involved in it there is an organization called as INS market tool there is S&P global there are such different organizations so in India's case if I'm not wrong it is INS market tool so that is the organization that is involved you also find S&P global that is mentioned over there so the first statement let's take a look at it one by one it is an indicator of business activity both in the manufacturing and service sectors so there are three types of purchasing managers index which are actually published there is a separate purchasing managers index published for the manufacturing sector manufacturing PMI there is a separate manufacturing purchasing managers index published for the service sector services PMI and then through a mathematical combination these two are brought together and a composite purchasing managers index for the entire production is also published which means it is an indicator of business activity for both manufacturing as well as service sector the question doesn't specifically say manufacturing PMI it just generally says PMI so the first statement is correct the second statement PMI is calculated based on sub indices such as new orders output employment suppliers delivery times stocks of items purchased these are some of the indices that are there because we have separate purchasing managers index for manufacturing and services and a composite one we cannot say specifically these are the exact sub indices that are there these are some of the sub indices which are used it is correct it's a very generic kind of a statement there is nothing obviously wrong about it so you will have to naturally assume it to be right okay and just giving you a logic there so how exactly is this does this calculation work look at the name of the index it says purchasing managers index which means when the survey is conducted they go to the purchasing managers in these organizations in various manufacturing and service sectors and they go and ask specific question as to how much of new orders are they placing in the upcoming period it's a monthly index published every month so in the upcoming month how many new orders are you placing okay how what does the target output that you have how many people are you employing in the upcoming period so all these are the information that is quantitatively gathered from the purchasing managers and they are also asked for their subject opinion as to what they believe is going to be the situation in the next one month in their industry not in the economy as such in their industry so their opinion is also something that they provide so all of this is brought together so weightages are provided for it and finally an index is released where if you get a score of 50 one month it's 50 next month it is 50 it means that there is no growth or there is no contraction that is going to happen if the number is greater than 50 it indicates an expansion in the business activity if the number falls below 50 it is an indication of contraction that is what is the error of the third statement a figure of above 50 denotes a contraction in business activity that's wrong a few figure above 50 in denotes an expansion in the business activity one below 50 indicates a contraction 50 exactly as it is means that there is no expectation of change that is going to happen so the answer is a one and two one and two only so let's take a look at the next question if you do have any questions immediately send it across so I will take a look at it and address okay great moving on okay time ran out sorry again lost it all right skipped one person who is it skipped okay fair enough at least you're honest with it nothing to lose but still no random guesses that's good preparation for UPS anyway so um the next five questions including this one this one and the next four questions are going to be an analysis of the budget okay so um what are the trends that are observed in the budget um decadal probably uh decadal is there plus yearly is also there so this was in the news a lot last year also it was in the news this year also it is in the news because the government has been proclaiming or not no just proclaiming they are being they have made it very obvious that capital expenditure has been significantly increased in the budget overall budget estimates that are provided there is a significant increase in capital expenditure compared to previous periods there is no doubt about it but the question is only about what is the extent of the increase now I personally don't expect a question or a statement like the first one where it says 37 percentage and all those things that is not the UPS style of questioning so they might replace it with say uh roughly one third or whatever is the number that the whatever is the way that they want to represent the data or they may not go for data itself but this is something that you should be knowing because because look at this is the budget document all I have done is there is a document called as budget at a glance you're all familiar with the um budget the government's budget website Indian budget just type Indian budget you will go to this website you can download this document called as budget at a glance look for the full document there is a document called as budget budget at a glance full complete document about 26 pages just take a look at that in the first page of the document itself they have highlighted or the second page they have highlighted these particular info this particular information okay so what is the information that they are trying to convey the total expenditure in the budget estimate for the upcoming year is estimated at 45 lakh crore uh of which total capital expenditure is 10 lakh crore you have already got the answer to the second statement in this total expenditure is 45 lakh crore capital expenditure is 10 lakh crore what is going to be the remaining 35 lakh crore the remaining 35 lakh crore is going to be revenue expenditure because total expenditure is equal to capital plus revenue plus capital capital is only going to be 10 which means the remaining 35 is revenue the second statement is capital has out for capital expenditure is greater than revenue expenditure clearly not true now let's look at the following one budget of the upcoming year reflects or in our case the present year reflects continuing strong commitment of the union government to boost economic growth by investing in infrastructure development leading to an increase in capital expenditure of by 37.4 percentage over the revenue or sorry revise estimates of 2022-23 okay then they have mentioned something called as effective capital expenditure I'll explain what is effective capital expenditure to you but this particular paragraph itself conveys to us what is the attempt at conveying the information that is to be conveyed over here I will run through the budget document entirely after the five questions are over because if I scroll down I have a feeling that maybe I'll give you the answer to one upcoming question one or two upcoming questions that are there so I'm refraining from doing that we'll take it question by question so this is the data based on which this particular question is given what is the difference between budget estimate and revise estimate I will give you an answer to that as well okay just give me one moment I I will let's get back to the question and then we'll take it okay so the statement here is capital expenditure and budget estimate 2023-24 is roughly 37.37 percentage more than revise estimate that's correct cap X in budget for the first time is greater than revenue expenditure nowhere close okay so 43 lakh crore of which 10 lakh crore or 45 lakh crore of which 10 lakh crore is capital the remaining 35 still revenue revenue still is a huge huge huge component of the overall expenditures so second statement is wrong the first statement is correct okay again when you have statements like for the first time it is greater it should have been there prominently in the news if you have read the news on the days after the publication of the budget or the announcement of presentation of the budget you should have come across it if you have actively read the news okay so the answer here is a one only okay moving on to the next question the first question all right so time has run out I am still getting varied kind of answers there are two trickeries in this two things to observe for in this first thing to observe is arrange the above in the order of increasing value of deficits which means the first deficit should be the least deficit the last deficit should be the highest deficit you can apply simple logic to eliminate a couple of options what is the simple logic of all deficits fiscal deficit is going to be the highest deficit without a doubt fiscal deficit means total money which the government will have to borrow that is how much is the how much is the total shortfall for the government that is the maximum deficit why do I say so because that is the deficit for the entire budget itself when it comes to revenue deficit that is budget only for sorry deficit only for one part of the budget which logically has to be lesser than fiscal deficit okay if you look at the formula for primary deficit itself it says fiscal deficit minus interest payments which means this primary deficit is going to be definitely lesser than fiscal deficit and effective revenue deficit is equal to revenue deficit minus grants for creation of capital assets which means effective revenue deficit has to be lesser than revenue deficit if this is the case then fiscal deficit is going to be the highest value which means in our options that should be the last one if that is the last one option a is ruled out option d is ruled out so two options are ruled out right away okay so these are certain logics that you have to know so if you are going to choose between b and c then you don't have to worry about revenue deficit because in both b and c 3 1 3 1 that is the last two which means the highest is fiscal deficit the second highest is revenue deficit okay now the question is revenue is primary deficit in second place or is primary deficit is the least deficit or is effective revenue deficit the least deficit this is the only question that needs to be answered this is not easy this is not easy at all only if you know you will be able to answer why do I say so because of the data that I am going to show right now to you okay I am looking for this particular graph okay so what does this graph say this graph saves the darker line which is on top that is a fiscal deficit clearly fiscal deficit is greater logically it has to be greater fiscal deficit is a percentage of GDP fiscal deficit in absolute terms it won't matter it will still be the same because everything is a percentage of GDP which means that in absolute terms also the pattern will hold true okay followed by it comes revenue deficit in the reverse order is what I am saying if you notice carefully till 2021-22 effective revenue deficit was in in that reverse order in third place which means the second highest deficit and primary deficit was the least deficit sorry second lowest deficit was effective revenue deficit and primary deficit was the least deficit that our budget had that was there as per the budget but you will notice that from 2021-22 there has been a change in trend and the green line has come down the whatever is the other color that that line has actually gone up which means that effective revenue deficit since 2021-22 is the least deficit that is there okay the ideal value of effective revenue deficit is actually zero because look at the formula effective revenue deficit is equal to revenue deficit minus grants used for asset creation ideal situation the entire revenue deficit should be used for asset creation it should be in the form of grants used for asset creation which means if we have a revenue deficit the entire money is used indirectly but productively okay it becomes an effective capital expenditure okay now in that case it is a good trend to notice that effective revenue deficit is going down because effective revenue deficit should ideally be zero when it comes to primary deficit primary deficit is equal to fiscal deficit minus interest payments which means if primary deficit is equal to zero it is a bad situation to be in because when will it be zero when the fiscal deficit and interest payments are equal which means every single money that is borrowed is being used for paying interest itself which means primary deficit being zero is a bad situation to be in okay so in a way you can say in terms of arranging it in terms of logic this is a better scenario that we are in it's an it's an observation of something which can be interpreted a positive you can't say you can't make such judgments just because there is a change in positioning but i'm trying to explain the logic that is associated okay so this is what you take away if you see a graph like this now what is observable here if let's say all the graphs throughout the journey has been in the way where fiscal is highest revenues next effective revenues next primary is next there is nothing to observe but in 2020 2022 there has been a change in trend it is worth observing it is worth making a note okay so this is the concept that is there now comes another part which i told you earlier i told you i'll answer it what has been the effective capital expenditure so there is this component called as which based on which your effective revenue deficit concept itself works effective revenue deficit is what revenue deficit minus grants used for asset creation similarly effective capital expenditure is equal to capital expenditure plus grants used for asset creation because effectively those grants are being used as capital expenditure though not by the union government the union government is ensuring that that fund is used for capital expenditure purposes so that is what is called as effective capital expenditure we came across that earlier in the introduction when which i showed you in this paragraph towards the end you will notice that this part effective capital expenditure at 13,70,949 shows an increase of 30.1 percentage over the revenue expenditure okay so that 30 point more than 30.1 the cons the point is the government is trying to convey a concept called as effective capital expenditure you may come across that concept as well effective capital expenditure okay all right moving on then i still haven't answered one of the questions which are which was asked earlier about what is the difference between re and ve i will take it up after the series of questions on the budget is over okay because i don't want to show any question without intention yeah so i i notice that i notice your question earlier itself okay so once more about capital effective capital expenditure yes effective capital expenditure is nothing but capital expenditure plus grants for asset creation if you remember the formula for effective revenue deficit effective revenue deficit is equal to revenue deficit minus grants for asset creation right that same terminology because you are subtracting it from revenue expenditure you need to add somewhere right so you're adding it as part of capital expenditure in and the government is claiming it to be effective capital expenditure because that grant is used in use for asset creation so effective capital expenditure is that effective revenue deficit effective capital expenditure okay this year all deficits are showing grants used for state assets um mithilesh it is not explicitly said that it is for state asset creation but it is simply said grants used for asset creation the government class visit that way effective capital i'll repeat effective capital expenditure is equal to capital expenditure plus grants used for asset creation grants are usually part of revenue or grants are always part of revenue expenditure there is no doubt about it but there is a component of revenue expenditure which is indirectly resulting in asset creation and the central government is ensuring that asset is getting created as a result of those grants because it is a conditional expenditure the central government gives it to the states and says you must use it for creating assets otherwise they'll take the money back from you which means central government is ensuring that assets are getting created for the money that is being provided all right so that is why it is called as effective capital expenditure i repeat effective capital expenditure is equal to capital expenditure the usual capital expenditure plus grants provided for creating assets grants for asset creation okay great moving on to the next question time starts we're out of time let's take a look at the answers okay the previous one i think i didn't give the answer the previous one the answer was v4231 okay 4231 now coming to this one okay so uh market borrowings contribute the most towards total borrowing so what are market borrowings borrowings of the government in the form of gsec in the form of t-bills in the form of all everything else that conventionally that they borrow within india so that is market borrowing okay so what else is there other than market borrowing the government borrows from rb in the form of recent means advances the government borrows from your state governments in the form of treasury bills then the government borrows from uh say your small savings fund and all those things those are outside of market borrowings okay market borrowings contribute the most towards total borrowing without a doubt you should be uh knowing that this is to be knowing this to be true so that is correct then external borrowing contribute more than one fourth of the total borrowings we have discussed this in class that external borrowing is not a major uh contributor to indias borrowing indias no advantage you could say with respect to borrowings is that uh most of our liabilities are internal in nature so the second statement is wrong the first statement one only is correct so let's take a look at the data to substantiate this so this is the data okay sources of financing fiscal deficit so what is meant by market borrowing market borrowing refers to look at the number two over here market borrowing vj h3 you can take a look at it now this is what i'm explaining the first point the market borrowings is gsec plus tables gsec plus tables okay so this is market borrowing the total debt receipts in the budget estimates is this much so roughly 18 lakh crore roughly 18 lakh crore of 18 lakh crore 12 crore or 12.3 lakh crore is in the form of market borrowings which is close to 70 percentage close to because assume it to be 18 lakh and 12 lakh 12 lakh out of 18 lakh is two third right so two third is 66 66 and half percentage so roughly 70 percentage of the total borrowing that the government does is in the form of market borrowings okay in terms of borrowing that is a major source look at external debt it is not even in lakhs it is 22 thousand crore which is actually roughly only one percentage one point two percentage or something like that so that is all that the government is borrowing from external sources what did the question say the question said one fourth what did the question say the question said external borrowings contribute more than one fourth more than one fourth mean 25 percentage this is nowhere close to 24 percent it's only around one percentage that is the borrowing from external sources so this is the data to be observed what else are the other sources securities against small savings so there is a lot of small savings that people deposit in post office funds and all those things right so those are what are called as small savings so how does the government how do how is interest provided on that the government so people put it in the small savings account the government issues securities to them to those organizations like post office and all those things and the government borrows money from there not directly from the public not from the market but from the small savings organizations post office deposits and all those things that is the second biggest source of borrowing then you have other receipts which is internal debt from other organizations government owned organizations itself any internal borrowing that comes in or borrowing from the public account of India all of that contributes around 5,40,000 state provident fund money is a very very comparatively again a very small percentage less than the external debt okay all right so it's a very interesting question when did my math skills improve and what can I say a little bit of preparation probably help I'm still not sure my math skills have improved so you don't know how much of calculation goes on in my mind before I actually utter something thank you for that anyway I think I'll have a sleepless night tonight because someone appreciated by math skills anyway moving on so that is the source of this particular question that is the area from which we asked a question so one only is the correct answer the second one is wrong okay moving on to the next question I think two more questions from budget we start time starts all right so we ran out of time okay so what is the answer here net tax revenue accounts for less than half of the total receipts debt receipts account for around 40 percentage of the total receipts which of the statements are correct let's take a look at the data okay so there are some round round things that you will see this is rupee goes to this expenditure this is the receipt part so rupee comes from which means where is the money coming from they are given a compilation over here data is not exactly the precise one that we want but take a look at it corporation tax contributes 15 percentage of the overall receipts of the government including capital and revenue both of them because you will find borrowings also as a part of the same thing rupee comes from overall in the budget so this is revenue receipt plus capital receipt okay so corporation tax 15 percentage income tax 15 percentage roughly is what they are saying okay customs duty 4 percentage union xs duty 7 percentage goods and services tax 17 percentage take a look at add all of them up 30 34 plus 7 okay I think yeah 41 thank you 41 48 58 so roughly 60 percentage thank you Rajasthri Mohan was looking for someone to help me out with respect to the addition but yeah 58 percentage is contributed by purely tax receipts but please note this is gross tax receipts not the net tax receipts the question is about net tax receipts but even if it comes to net tax receipts what is the difference between gross and net tax receipts out of the gross some amount of money although the center collects it it has to give it to the state it collects it on behalf of the state I'm not talking about the devolution of funds certain taxes like IGST half of IGST belongs to the states right so that part has to go towards the states so even when it comes to net tax revenue it is still more than 50 percentage that is why the first statement is correct when that happens borrowings and liabilities become close to 40 percentage because that is what the statement says right it does not here it says borrowings and liabilities are 34 percentage and the statement says roughly account for 40 percentage of the total receipts so just to take a look at that data let's go to some numbers okay yeah so here it is of the total receipts of 45 lakh crore which is given over here 45 lakh crore okay so 23 lakh crore is in the form of net tax receipts which is greater than 50 percentage okay 46 half of it is 23 so 45 more than 23 is there which means more than half is in the form of tax receipts borrowings and other liabilities are roughly 18 lakh crore which is again around that roughly 40 percentage mark so that is why the data given there is right okay so the reason why this data is important is because look at it 50 percentage is contributed by tax revenue receipts 40 percentage is contributed by borrowing DCR look at the components of receipts there is tax revenue receipts non tax revenue receipts non debt capital receipts and debt capital receipts where tax revenue receipts and DCR it's not contributes 90 percentage of the total receipts of the government which means your non tax revenue receipts and non debt capital receipts are a very negligible part of the overall money that the government receipts receives okay cumulatively it accounts for only 10 percentage that is an important observation that tax and borrowing contributes 90 percentage of the government's receipts but that is a very important cumulatively roughly 90 percentage of the receipts more than 90 percentage actually okay so the it shows the comparative insignificance of non tax revenue receipts and non debt capital receipts comparator i'm not saying it's insignificant but in the context of the other receipts it loses its significance okay so that is the basis of the question that we had the answer here is the first statement is wrong the second statement is correct b2 only is the answer moving to the next question time starts almost run out of time yeah so we have run out of time what's the answer let me take a look at the choices that have been given it's a bit of a tricky question to guess let me see if there's anyone who has given the correct answer not initially okay so there is signage babu roast and mignesh babu one person what only one person is given the correct answer okay okay fine finally someone else too okay so the answer here is c 2 and 3 are the correct statements 2 and 3 c is the correct answer so let's again okay after i gave answer i'm getting an answer saying c which is very interesting i don't know you could know that okay anyway consider the following statements about the trends of tax receipts over the last decade based on the union budget of 2023-24 last decade based on the latest data tax to GDP ratio has been consistently increasing what is this concept of tax to GDP ratio are you familiar with the concept called as tax buoyancy there is a term called as tax buoyancy which is nothing but increase in the rate increase in tax revenue percentage increase in tax revenue as a proportion of percentage increase in GDP tax revenue growth rate divided by GDP growth rate okay so that is what is called as tax buoyancy in a system where taxation is buoyant buoyant means floating doing well the tax revenue grows by a greater extent than the GDP itself grows so that is tax buoyancy that is what is tax to GDP ratio let's take a look at the data okay let's also take a look at the other two statements net tax receipts have been great net okay sorry direct tax receipts have been greater than indirect tax receipts during most years it's a very generic statement during most years okay and centers net tax revenue has been consistently increasing so two words to focus in the first statement one or three words to focus in the first statement tax to GDP ratio has been consistently increasing so there are two things that you could be asked in the exam over the last decade tax to GDP ratio has increased if they have simply said tax to GDP ratio has increased over the last decade it means that 10 years ago versus today if today the value is greater than what was 10 years ago then you can say it has increased over the decade but it says consistently increasing which means not only should it be greater now when compared to 10 years ago every intervening year should have had an increase in trend every year first year second year should be greater third year should be greater fourth should be greater tens years should be greater than ninth year and so on okay so that is consistently increasing in the third statement also you will find consistently increasing so that's a very important information usually in UPC exams when you come across the term consistently increasing the likelihood of such a statement being correct is very very low because something and economic information being consistently high the chances are very low except if you are talking about absolute numbers absolute numbers are likely to increase because take governments borrowing fiscal deficit although as a percentage of GDP it may decrease from one year to another because the GDP is increasing the actual amount borrowed itself is going to increase is most likely going to increase although fiscal deficit as a percentage of GDP may have decreased so if the question is about fiscal deficit as a percentage of GDP or growth rate or something like that the chances of consistent increase are less so the first statement being correct is less likely whereas the third statement is not about growth rate it's not about percentage it's an absolute value centers net tax revenue amount of money has been consistently increasing the chances of such a statement being correct are quite high and the next important word to focus is direct tax receipts have been greater than indirect tax receipts during most years it means every single year over the last decade it doesn't matter what has happened more than five years over the decade over the last decade if it's greater than direct tax is greater than indirect tax that's good enough most means majority more than half that is all that is necessary okay all right so let's take a look at the data now all right so before I answer this there's a question about doubts regarding subject how can I communicate I can I couldn't contact the telegram so don't ask me these these sort of questions during the session that is happening ask me at the end of it when I ask you is there something else make a note of it and ask me later the reason I say so is because I will miss your chat I even if I've read it I forget it by the time we come back because all the people are answering over here 100 answers per question it means that your query will get lost so keep this aside and ask me this in the end when I ask you if you have any further questions we'll find a way I don't know what is the solution but we'll find a solution okay so tax to GDP ratio uh let's scroll down I think this is the last question from uh budget so I can freely show you the entire uh graph okay this is deficit trends I think it's on no I'm sorry I will take a look at the data uh here it is okay trends and tax receipts okay this is a percentage of GDP this is what is called as tax to GDP ratio because look at what is given over here tax receipts as a percentage of GDP tax to GDP ratio how much is the tax to GDP ratio is given over here roughly around 10 percentage tax to GDP ratio we know that already remember in the government expenditure part you remember your consumption expenditure is uh consumption expenditure is 60 percentage investment expenditure 30 percentage 10 percentages in the form of government expenditure so if the government has to spend they get money in the form of taxes right so only through taxes they'll be able to spend so how much should be the taxes of percentage of GDP roughly around 10 percentage that will hold true but the question is has it been increasing take a look at the red line is it a straight upward moving line no it is not a straight upward moving line it is moving in all directions 10.1 10 10.6 11.2 11.2 10.9 9.8 10.3 it is moving all over the place as a percentage the likelihood of a consistent change is very very low okay so the first statement is negative first statement is wrong what was the second statement the second statement said uh direct tax receipts have been greater than indirect tax receipts during most years now this data is not about the direct tax receipts itself it's as a percentage of GDP but because it's both as a percentage of GDP we can take a look at this data itself and we can come in I will show you the other data also so in in let's say 2013 14 5.6 4.4 direct tax the yellow one is the direct tax direct tax is greater next year 5.2 4.4 greater 2015 5.4 5.2 greater but 2016 5.6 5.5 which means indirect tax is greater than direct tax there is one year where indirect tax is greater than direct tax then it comes back to normalcy 2017 18 18 19 19 20 is normal 2021 again direct tax is 4.8 indirect taxes 5.5 percentage in in terms of percentage of GDP which is applicable throughout also then once again normalcy is restored 2021 22 6 5.4 5.5 or 6 5.1 6 5.1 but 8 out of 10 years direct tax is greater than indirect tax the statement says direct tax receipts have been greater than indirect tax receipts during most years statement is correct 8 out of 10 is most there is no question about okay so you can also take a look at absolute numbers here rupees in lakh crore okay how much is the lakh crore you will notice that okay this is just direct tax they have not split it as direct and indirect okay total tax so third statement centers net tax revenue has been consistently increasing look at the blue with every passing year is there any year where the blue is lesser than the previous year no 8.2 lakh 9 lakh 9.4 lakh 11 lakh 12.4 lakh 13.2 13.6 14.3 18.19.20 23 every year in absolute terms it has been increasing as a percentage of GDP it would not consistently increase but the question is not as a percentage of GDP the question is in absolute terms net centers tax revenue has been consistently increasing correct okay so that is how we can look at it but take a look at the other receipts also other than borrowing everything they have given non tax revenue there is no consistent increase 2 2.5 2.7 1.9 2.4 3.3 2.1 it is varying look at non debt capital receipts 0.4 0.5 0.6 0.7 1.2 but in 1.1 0.7 0.6 so it keeps varying okay so there is no consistent trend but with tax revenue receipts there is a consistent trend that is there again something to be observed so when you come across data like this this is what you need to observe patterns trends are what you have to observe all right okay so now I will take up any question that you have with respect to budget document because I finished all the questions that is there with respect to budget document so there's a question which Arun is asking nowadays GST revenue has been increasing how can I infer it sir so GST I mean with respect to direct tax revenues higher than indirect taxes yeah so I don't understand the connection that you're trying to ask Arun can you make some connection and ask me that question rephrase that question very open ended what you're saying what would be the correct statement for the first option first option what will be the correct statement tax GDP ratio has been consistently increasing you can't say so it does not that is wrong itself what do you mean how can we put it into a correct statement tax GDP ratio has been growing inconsistently over the last decade that's probably correct if you want it to be kirti that document I don't need to share government shared it with me your government has shared it with you also everyone can access the document I just go to okay I'll show you what I do so let's take okay I'll just you're able to see what I'm doing right okay so what am I doing I'm simply typing uh okay Indian budget Indian budget what's the first website that I get Indian budget India budget or GOV.in open I'm teaching you how to download a document of okay budget at a glance you'll notice right in the center budget at a glance budget at a glance full that's it download the document this is the document that we have been referring to okay I hope that helps this is the same place from which you can download the economic survey as well if you want so economic survey you can either go click over this over here there is a field here great or you can just simply type economic survey it will take you to the exact economic survey it will take you to this page where you can download the chapters you can download a list of tables and charts statistical appendix everything that you require you have it over here okay all right uh moving on to the budget document itself I have a few queries I'll answer it one by one um we'll feel a boiled dead thumb under GSQ because once it you're asked in a test series I don't know I don't know I don't have that information ready with me sorry okay um Arun I'm just wondering if you have rephrased yes you have rephrased the question I'm taking a look at it in that question second option is mentioned about direct tax revenues higher than indirect tax revenue nowadays GSQ revenue has been increasing okay so GSQ revenue has been increasing without doubt that's the case but if you have been noticing the news uh your income tax revenue has also been increasing corporate tax revenue has also been increasing okay it it has been the case now how do I how do we know that so there is a table here take I'm just checking if what I'm showing is visible yes what I'm showing is visible Arun so take a look at this uh look at the trends that are witnessed over here corporation tax look at the trend so this is the estimates uh taxes on income which is taxes on income other than corporate tax so it is also showing an increasing trend GST showing an increasing trend all of these are showing an increasing trend okay so um that answers your question so GST has been increasing but why is GST making so much of a news because GST was recently introduced then I say recently 2017 five six years ago it was introduced but in the larger scheme of things that is still a new concept we still haven't completely stabilized with respect to GST there are still states claiming that give us support give us compensation because we are getting used to the new system okay which is why GST is frequently in the news not because it has overtaken corporate tax or other sources of taxes okay I hope that answers your question Arun okay so let me uh take a look at some other uh yeah I will I will I will come I'll come to it uh that's the next thing that I want to discuss uh RE versus BE so it is here here itself uh take a look at it gross can vignesh babu I don't know that's that's your name okay so every year when the government announces the budget okay this is very basic information every year when the government announces the budget the government says what is going to be the expenditure pattern on February 1 2023 few months ago when the government announced the budget their main budget that they announced is for what is going to happen in the upcoming year what is going to be the taxes how much is going to be the borrowing so that is for the financial year starting from April 1 2023 which will go till March 31 2024 that is what is called as budget estimates you will notice that the government announced a very similar budget estimate for 2020 to 2023 one year ago on February 1 2023 the government had announced the budget estimate sorry 2022 February 1 2022 the government had announced the budget estimate for 2021 sorry 2022 23 on February 1 2022 for the upcoming year that is budget estimate so these are this is budget estimate from one year ago this is budget estimate at present okay this is budget estimate at present okay now coming to what is revised estimate now when the budget is presented for the year 2022 2020 sorry 23 24 which is the upcoming year they also have to say how they have done with respect to the last budget so they had announced their budget one year ago right did they do well did they stick to the budget because remember budget estimate is a prediction for the future it is not a fact it is what is likely to happen you are saying that next month I am going to spend this much towards the end of April now you will sit and create a budget for me but towards the end of May you have to know whether you stuck to your budget or not otherwise there is no accountability there so what do they do they want to find out what actually happened but unfortunately the year is going to end 2022 2023 is going to end only on March 31 2023 but they are already presenting the budget on February 1st which means they don't have the complete information so what do they do they look at the half year data from April to September or maybe till December and they publish a revised estimate for the last for the present year present year in the sense February 1 when they present the they are still in the year 2022 2023 they revise the budget presented one year ago and they represent it okay so that is the revised estimate and then they will present the actual data for one year before that so there are three data that is given there a data for the upcoming year budget estimate a data which revises the current estimate which is revised estimate and the data for the last year which is actual estimates or actuals I hope that clarifies your question perfect all right so let me take a look at a couple of other questions as well I don't I'm not going to take up I have got a boiled egg answer to the boiled egg question but I don't know authentically so I think I'll have to leave it to you please figure it out because I don't know that very specific information uh so this long document of a budget at glance is not showing the google search kindly assess I think I have shown it to you Saskata I have not watched video of economic analysis of budget documents okay and in fact this budget at a dog yes that is heretic I think you analyze this particular document I think that should be enough in the question second option okay done regarding uh tax buoyancy does tax collection will tax collection increase with better buoyancy an increase in tax collection as a proportion of GDP is an indication of tax buoyancy when the GDP increases by let's say six percentage if the tax revenue increases by more than six percentage that is buoyant tax but if the GDP increases by six percentage but the tax revenue increases but only by three percentage taxation system is not buoyant so just because tax collection increases you cannot claim the taxation system to be buoyant Rajasthri hope that clarifies your question all right I have answered all the question that is there is it necessary to tell you the previous budget estimate and revenue expenditure see there is a concept please make a note of this there is a concept called as fiscal marksmanship marksmanship m a r k s m a n s h i p marksmanship so what is meant by so in general English what is the meaning of the word marksman who's a marksman marksman is someone who looks at a target and either shoots or bow and arrow so that is the person who's called as a marksman someone who who aims at a target and hits it that's a good marksman fiscal marksmanship means that whatever is the fiscal data presented by the government for example for in on February 1 2023 the government has presented the data for the upcoming year fiscal marksmanship means the government being accurate with respect to their projection they have projected a data if the actual the reality is as close to their projection the government is a good marksman or their budgeting is as good marksmanship associated with it it need not always be the case a lot of times there are variations take a look at the variation here the budget estimate for gross tax revenue was 27 lakh 50 sorry 27 lakh 57000 crore but the actual data was greater than that okay so take a look at the size of the budget itself so total receipts the projection was only 39 lakh crore the reality 41 not even the reality because we will only know the reality one year later so it need not always be the same it need not only stally ideally it should if it does that's what is called as fiscal marksmanship if it doesn't we are deviating from the fiscal targets that we have slightly deviated which is not ideal okay lack of fiscal prudence is something that you might come across tables is one type of GSEC then why in the document they say GSEC and Teeble separately because what they refer to as GSEC is dated GSEC for convenience in their generally refer to as GSEC they might be referring to dated GSEC that is the reason why they separately refer they refer to GSEC and Teeble like that in general conversation colloquially when you use the word GSEC they are referring to dated GSEC long term Teeble is a short term invasion that's why okay hope that is clear Satish Kumar here it's actually a very very important relevant question that you ask technically Teeble is a GSEC it doesn't make sense if you look at any RBA document they will not randomly use the word GSEC when they say GSEC very inquire include all borrowings of the government through instruments but government uses it more gently that's why so the word actual means what is the actual data for the previous year previous year present year upcoming year upcoming year is an estimation of the budget what is likely to happen present year is a revision of the budget past year alone you can present the actual data next year you will find that the actual next year February 1 2024 you will find actuals for 2022-23 you will find the revised estimates for 2023-24 you will find budget estimates for 2024-25 that's what you will see in next year's document they don't need to give this data they are giving it so that we can look at it side by side and compare this data is not new this data is already there in last year's budget this data was presented here here in last year's budget they need not present it they have presented it so that you can read the budget estimate and revise estimate side by side for easy understanding hope that is clear okay all right perfect so I think we can proceed moving on next question take a look at it time starts all right we are out of time not a very easy kind of question because it's not very common knowledge there is a specific report called state finances a study of budgets consider the following observations and choose the correct ones as per the report okay it's not very common there is a reason why I ask this because this is something that has been in the news center state fighting with each other state center telling the states you are not doing a good job with respect to your finances only if you meet these targets we'll provide you loan all those things that the center is saying the rb itself flagged the financial position of many states rb said these these these states are in trouble it was there the news in the exam you may get a very simple statement saying states finances a study of budgets is published by which of the following organizations it's been a ministry of finance reserve bank of india so it may be something just making up a question it may be something as simple as that based on current affairs but we don't know so i have just taken up a random thing from the document just to convey to you that the document is important okay just a couple of interesting observations okay so states own tax is the major source of receipts and the aggregate receipts of all states and new days that's one statement second more than half the states failed to attain 14 percentage gst revenue growth what is the significance of 14 percentage that is a cutoff which was kept by the gst council and said if you fail to attain 14 whatever you failed by it will provide compensation to that extent okay that is what the gst council had promised that is where the 14 percentage cutoff is important so i need to take the document now so i'm doing it right in front of you so that you don't have to i mean again ask me where to find the document from so uh what what was the name of the report it said a study of budgets right state finances aid finances a study of budgets the most recent data rba directly go to whoever publishes rba data go to the document itself this is where you get the document from rb his website you have the entire document here state finances a study of budgets okay you have overview you have forward you have all of those things why bother about anything else just download get the entire document taking a little bit of time to load as you can see so this is the document now there is a very interesting part sometimes such questions are asked what is the theme capital formation in India the role of states that is the tagline associated but not sure u p c will go for that the role of capital formation so here is the one so we have major sources of receipts right so we have introduction key fiscal indicators receipts and expenditures both the statements here we're about receipts so let's go to page number four so that is where it's a big document i'm not going to look at all of them oh you don't have to look at all of it either so this is gross fiscal deficit of i think all states and ut is with the legislature what is it for the entire states all states put together deficit indicators for individual states you don't have to worry about this if there is something unique that is what you need to so this is the table based on which that that particular question is asked so there is revenue receipts of the revenue receipts the biggest share it is not given in percentage it's given in absolute terms it is given in lack proof okay off and what exactly was the statement of the statement is states own tax is the major source of receipts in the aggregate receipts so you have the entire receipts over here so revenue receipts separately non-capital receipts separately is given off which you will notice that revenue receipts is this much 23.1 or you look at the most recent one 38.57 off that 38.57 okay you will notice that 21.11 is states own revenue but our question is specifically about states own tax revenue states own tax revenue is still 17.87 not percentage lack proof look at any other number that is there central transfer is overall but inside central transfer there is shareable taxes which is actually the states own money and then grants in it individually it's only eight and nine percentage but if you look at states own tax it is a major source this is an important data because conventionally we think state has very less in the form of source of collecting taxes so their source of money in the form of taxes is going to be very very minimal not true in fact states own taxes is a big part of their own revenue their own receipts okay so to convey that which is which goes against our conventional knowledge okay which goes against our conventional knowledge so that is what is important over here everything else is very very small okay I told you a term earlier fiscal marksmanship you find the term over here okay and what are the two data which is compared budget estimate revised estimate so this is a measurement of statistically with not important for us this is a measurement of how far away they are from their projections okay so a lot of information like this is given then you have again receipts itself there is GST data which is given let me see where I can find it okay so maybe I will go for the simpler option and look for quite a lot of references okay so we have it here okay so 10 states are expected to fall short of 14 percentage GST growth as per their budget estimates okay the data is given here so why is that important because look at this there is an image that is associated with it states with less than 14 percentage growth in GST in 2022-23 okay so all that you need to know again don't memorize how many states and all those things look at it is it all the states in the country most of the states in the country no it is less than half of the states that is there so only 10 states out of not only but it is still not more than half so 10 states out of 28 are falling short 18 states are meeting the GST target that is there now let me reiterate this is not the specific data that is important we can't guess what UPC asks from I have just taken two readily available information which is in the news as well states center state conflict that is there states feeling that they are not getting enough money from the center so we ask a question so what is the major source of centers states revenue then the GST compensation is something that is again frequently the news so how many states are actually benefiting out of the GST compensation 10 states out of 28 are no imagine that 20 states out of 28 were having GST revenue less than 14 percentage it makes no sense to cancel the GST compensation and it makes all the sense to provide GST compensation for the further period of time because majority of states in that case assuming that let's say 20 out of 28 states were having a GST growth rate of less than 14 percentage then it makes sense to extend that now the center has not extended it why what is the logic associated because 10 states out of 28 are the ones which require okay so this is again certain observations it's a very big document 312 pages I don't expect you to go through or affect but take a look at the heading that is given over here the index that is there take a look at the index and ask yourself with a little bit of experience and preparation you will be able to you know give yourself certain parameters as to what you think is important so take a look at the entire heading just two or three pages look at what might be important among this 99 percentage of this document is going to be useless okay which means of 300 pages 99 percentage would be say let's say three pages other than three pages everything else is fairly useless so what are those three or maybe maybe 99 percentage is too much say 10 pages out of 312 might be important for you to go through but the question is which are those 10 pages take a look at the index index may certain parts of the document may interest you just go through see if there is any graph or image or data associated with it only when that is there it makes sense although I have shown the inside paragraph everything I show inside paragraph has a picture or an image associated with it okay so that becomes important how much is states borrowing how much is the cumulative deficit that they have those might be the major things that you need to know okay so that is with respect to this particular question that actually sorry that actually ends our entire part with respect to public finance I think that's a little bit more is there so we'll move on then Bharath Kumar you have sent something which I'm not able to see I'm only seeing it as a box so I told you the answer here is a okay one only moving on then time starts how come only two people have answered for very very less response time is out okay now I'm getting a lot of answers still very less only about 10 or 12 answer these are skip these are more like the current affairs that we expect from UPC okay all right great so one statement you should blindly assume it to be right look at the second statement the proceed look at the heading sovereign green bonds okay green bond that name is enough the proceeds are to be deployed in public sector projects which will help reduce economies carbon intensity reduce economies carbon intensity carbon intensity reduction means greening that there should be no doubt about it the next question is is it going to be used in public sector projects look at the name sovereign sovereign means government government is borrowing government is going to use the money for public sector projects most likely so that is a logical guess I don't think you should consider there is any logic for you tell me if there is any but I don't think there is any logic by which the second statement can be considered as wrong I don't know some people have answered a not a lot a few people have given a as answer which is surprising for me so two has to be correct now comes the type of trickery which UPC sometime follows SGV sovereign green bonds amounting 2604 are to be issued as a part of governments overall market borrowing in the fiscal year 2022-23 if you apply a little bit of logic you would know that 1600 floor is a very very small sum okay it's actually 16000 pro and this is precisely the type of mistakes that UPC makes in their question instead of 100 they'll give 1000 instead of 10,000 they'll give 100 instead of 10,000 they'll give 1000 so these are the kind of errors that they tend to make and that is precisely why I removed from some 10 and put it over there everything else about it is correct 1600 is not the correct one 16000 pro is what is the correct one okay so other than that everything else is correct the sovereign green bonds the intention of the government is to borrow money to be used for public sector projects which are green initiators so anything that has green initiative associated with it that is what the intention for the government is and this happened very recently only in 2023 January they actually issued it although it was announced in the last budget so it is very recent current affairs as well okay so please read up a little bit there is a framework on sovereign green bonds as well I'm not going to go through the entire document but there is something like that there's something called as sovereign green bonds there is a framework look at it department of economic affairs the government document itself I'm not expecting you to go through this 21 pages is not much but just the introduction of something like that you can read to get an idea so what what they have given insight is not necessarily related to green bond itself they have given up about nationally determined contribution goals and all those things and say that ultimately the objective is to meet some of these targets okay so that is all of the context this is where the actual document starts from here so this what it starts and they have said what are the core components of green bond principles how are they going to use it don't memorize any of this please don't it's not worth it just know have a general idea what is the amount what is the general philosophy that they are going to adopt that is enough okay and without even studying all these things you can understand green means it has to be some equal ecologically or environmentally friendly objective only thing just do a normal google search you will know the amount of money that they are trying to raise and all those things just some basic information is enough you don't have to come to this document and just showing you because there is an official source nothing wrong with coming here always rely on the best source but you can also rely on PAB also let's see if there is a PAB document I'm not sure green bonds yeah so PAB sovereign green bonds 16,000 crore what more do you need everything is there amounting to 16,000 crore 8,000 has already been issued 6th of February 2023 very recent news okay resources go governments overall borrowing deployed in public sector okay from verbatim whatever I have asked reduce economies carbon intensity okay maybe I should not have shown the source I got using the same words okay let's move on quickly from this area I think that answers the question the first statement alone is wrong okay next question external sector almost done which is correct let me see a lot of people have said a a a a okay since so many people are saying a I have to go with a a is the correct answer India has so far concluded 13 free trade agreements and six preferential trade agreements that's correct it's a factual thing second and third is almost correct because you have heard news that India signed an agreement UAE India signed an agreement with Australia both are free trade agreements the only error is it is interchanged the SEPA has been signed with UAE comprehensive economic partnership agreement and ECTA economic cooperation and trade agreement has been signed with Australia CEPA from my understanding has a much wider scope because it includes investment it includes mobility of workers all those things are included services are included inside that with the UAE one which is which was in the news much more than what was in with respect to Australia so that does interchange CEPA is with UAE and ECTA is with Australia so both the statements because they are interchanged they are wrong a one only is the correct answer over here okay the correct answer is a one only now where do we get this particular data from again the same logic that you apply is don't go looking for this data just look for let's say trade agreements and why am I why are we looking for it because UAE agreement was signed because the australia agreement was signed looking for PAB so FTAs with refer to check here it is heading itself as in 2022 july which is still part of our information in India has signed 13 RTS regional trade agreements or free trade agreements with various countries that is given over here okay at least it does not work back so what are the various countries with which we have trade agreements it is given over here so we have trade agreements these entities we have trade agreements that list is given over here what are the 13 countries okay so as of the publishing of this this was not implemented so with UAE and australia but subsequently it's been in addition India also signed six preferential trade agreements including Asia Pacific trade agreement so that is also given there so you will have another other places where you have the entire data that is given there now look at this CEPA comprehensive economic partnership agreement is with united arab Emirates and ECTA economic cooperation and trade agreement is with australia so this one itself conveys all the information that is necessary for us PAB has all the data that is necessary let's also take a look at this yeah so here is the 13 plus six the 13 is given over here what are the various countries with which we have and the six is given over here with which we have preferential trade agreements okay so I am not waiting for you to make notes or anything because you can find the source on your own so what is the difference between free trade and preferential trade agreement so preferential trade agreement means it's much limited in scope so if you are going into economic theory preferential trade agreement is the starting point building up on top of that we'll get to free trade agreements then we have common markets customs union and so on economic integration and all those things that happen later but more commonly you will have you will find preferential trade and free trade agreements what is the difference when two countries enter into preferential trade agreement they agree that on certain commodities alone they will have free trade so restricted free trade agreement so indian let's say india and some country signs a preferential trade agreement they say on this five commodities these five commodities or these 10 commodities alone we will do the trading so this is what is called as creating a positive list so preferential trade agreements are associated or have a positive list associated with them what is a positive list a list of items on which preferential trade or free trade would happen okay on all other items it is normal no free trade no preferences on these select items alone there will be preferential trade or free trade between the two countries whereas when it comes to a free trade agreement their agreement is like this on all the goods and services that the goods and services it depends sometimes it's goods only sometimes it's services also like we saw with CEPA and ECT so on all the commodities there will be free trade except a list of items on these items we are not going to allow because we want to protect our domestic industry okay so though that is what is called as a negative list where everything is under free trade except this list of items okay so negatives preferential trade agreement has a positive list associated with that free trade agreement has a negative list associated okay so conceptually this is something for us to note as well okay the answer here is a one only moving to the next question so we are going to have a series of external secret questions time starts okay time out a lot of people have given me the correct answer the correct answer here is B two only B is correct not C B so let's take a look at the data associated with it economic survey external sector and made a few markings which is so how did I get to this I showed you earlier right I went to just type external sector scroll down you will find external sector chapter over there so you will find the document over there okay so first basic information that you have is during this fiscal India's exports have displayed resilience on the back of record levels of exports what are the key export items that we have petroleum products gems and dwellers organic and inorganic chemicals drugs and pharmaceuticals were among leading export items please make a note what are the leading export items of India okay similarly do we have anything about imports apart from elevated crude oil prices the revival of economic activity contribute to increase okay petroleum crude and imports petroleum crude and products electronic goods coal coke and briquettes etc missionary electrical non-electrical gold where among the top import items please make a note of that as well okay very generally balance of payments encountered pressures during the year under review which means balance of payments did not do particularly well okay sharp rise in oil prices resulted in widening current account deficit not cushioned by invisible receipts policy tightening by federal reserve we are going to discuss that and strengthening of US dollar led to SPI outflows okay as I said surplus in capital account was lower than current account deficit leading to depletion of forex on BOP basis forex has been reducing we have been seeing that in the news as well so this is just from the first phase the italicized one all our key information has taken off that's it you don't have to go any deeper into the economic survey in general but let's take a look at what is given over here as well with respect to trade the merchandise trade what exactly is the question that we have asked the question is exports of petroleum oil and lubricants constitutes lubricants constitute about half of the total exports in terms of value petrol oil and lubricants exports constitute around 20 percentage and non-POL exports petroleum oil lubricants constitute around 80 percentage of exports during that particular year okay it continued to be the most exported commodity moving to the rise in global crude prices petroleum products continue to be the most exported commodity in India's context followed by gems and jewelers organic chemicals drugs and pharmaceuticals but still to say that it contributes half of India's exports is an exaggeration so we know petroleum oil lubricants is a significant part it is the highest it occupies the number one position when it comes to exports also crude oil we import refined petroleum we export petroleum products we export we also import petroleum products some kinds of petroleum products but it's not half half is an exaggeration half is too much so that is what makes the first statement wrong second statement is correct it contributes one third or it accounts for one third of the value energy demand may be pushing India's imports yes so petroleum so energy demand may be pushing India's imports for fuel including coal and petroleum oil lubricants who share rows to 37.1 percentage it says more than one third more than 33 percentage other principle imports included electronic goods coal coke briquettes machinery whatever we saw earlier okay so that is what is of significance roughly so look at how the question is framed one third not 37 percentage around one third more than one third so that is how the question is looked at so petroleum we know you would have heard of a concept called as windfall taxes which was in the news that is again in the context of the same thing now because of the global rise in fuel prices when we bought we bought at a lower price before the war broke out we bought at a lower price then we were refining when we sold the petroleum prices have gone so high that the petroleum companies were making huge profits this unexpected unanticipated sudden gains is what is called as windfall gains w i n d f a l windfall windfall means something that is unexpected and huge okay sudden huge gains is windfall windfall gains windfall profits when the petroleum companies got those windfall profits the government introduces introduced a new tax called as windfall gains tax or windfall tax which means you are making unexpected gains on those unexpected gains I'm going to tax you more than what I usually do but once your gains normalize we will not collect those taxes anymore only because you are getting windfall gains we are collecting windfall tax so windfall tax is also something that you saw in the news in the context of that they may not ask a question about windfall tax they may ask a question about the data that is related or they may ask a windfall gains or tax question itself we don't know okay but that is how we interpret data that is why p o l becomes very important because there is global there is war with Russia or sorry not war with Russia Russia and Ukraine is war is going on Russia has become the major supplier of petroleum products or petroleum crude petroleum for India replacing other your Gulf nations and some other nations that were there so all these are of significance this is what you see in the news the question may be about any of this okay so let me take a look at if there's any question that is left or left unanswered moving on so the answer here is first one is wrong second one is right to only be is the answer moving to the next one time starts I've got only two answers out of hundred odd people now it's four answers slowly increasing time has run out you wait for a few more seconds so I know at this point some of you are thinking why are all the questions so much about data and all those things I told you in the beginning of the session itself my intention is not to cover everything that is there in current affairs my intention is to cover those areas which you may otherwise miss out on you may not focus on these areas only not only those areas those are some of the areas which I picked up and this interpretation of data or collecting data is something that you may not ready be it may not be readily available with you which is why I'm picking these areas and I'm explaining it to you okay don't think that this is what see some of you especially we are preparing for the first time you would have prepared so much of concepts and then now you come here in the session and everything is all data is that how UPC is going to ask no that is not how UPC is going to ask these are just to help you fill in those areas which you may not have covered already this one session is not sufficient to cover the entire current affairs I told you that in the beginning itself so I'm picking on areas which I feel that you might have missed out on okay anyway so the answer here is let's take a look at the statement consider the following statements about external debt of India based on the data from economic survey short-term debt accounts for around one-fifth of the total debt okay so that is again a very data-driven question short-term debt means debt that we have to repay in a period of one year within one year so it's an external debt analysis kind of question UPC has asked such questions in the past in what currency is most of India's dollar denominated those kind of questions short term versus long term something that is asked then second India's total external debt obligations is in excess of foreign exchange reserves which is very hard to believe but that is true in fact both the statements here are true 13 the answer is C both one and two we will take a look at the data that is associated with it same external sector chapter economic survey we'll go to debt capital account is where we have debt so we have reached debt all the epic debt don't focus on debt alone you have FDA net FDA is it showing an increasing trend decreasing trend you have a capital account balance you have composition of capital account what is the direction all those are observations that you can make net FPA it is showing a negative trend during certain parts but all of these are quarterly just make a note of this all these are also important I just happened to have picked up about this is forex resource about debt that's all okay so did I cross debt I think I might have crossed that no external debt is here okay external debt there are two data two tables okay this is the table that based on which the question is okay this is how much our external debt is across the sorry over the years this table external debt this is the table external debt in us a billion that is how usually it is denominated not in rupees usually it is in US dollars so end the September so somewhere around 600 billion US dollars ratio of external debt to GDP roughly around 20 percentage okay debt service ratio our capability to service and the amount that we have to pay during a given period of time ratio of forex reserves to external debt so 96.5 or 87.3 or 98 there's only one period where you will find a number greater than 100 what does greater than 100 mean look at the heading ratio of forex to total debt forex on top total debt at the bottom only when forex is greater than total debt will be will it be greater than 100 based on the latest data the most recent data that we have it is lesser than 100 for most years you will notice that it is lesser than 100 which means most of the times forex is lesser than what is our total debt which means we don't have enough money in our reserves to repay all our loan however look at this this is where the first statement becomes important ratio of short-term debt to forex reserves ratio of short-term debt is only around 20 percentage so ratio of short-term debt to total debt it's only around 20 percentage which means our immediate repayment obligations we have enough money in our forex reserves even if nothing else works we can take our forex reserves 20 percentage of our forex reserves we pay our short-term debt is done short-term that means within one year what we have to repay everything else is long-term obligation so we have signed a contract with japan let's say where they are giving us money which we have to repay over 30 years they cannot come next year and suddenly say no no we need money give it back no loan agreement is signed there is no way that they can ask us the money before time it is not possible which means that having long-term debt is good it is sustainable debt having high short-term debt is troublesome so what was our question here our question was short-term debt accounts for around one source of the total debt 20 percentage if the total external debt that is there the question itself is about external debt so one source of 20 percentage is correct see kirthik the question is consider the following statements so what is the what is kirthik's question here is here short-term debt accounts for around one source of the total debt right so total sorry total debt the question is is it total debt of the country as a whole or is it total external debt alone you don't have to worry about that because look at the question the question says consider the statements about external debt of india which means both the statements are about external debt which means what they refer to as total debt here is total external debt of the country if it is am because this is how you have to make sense of it okay but okay so i'll answer there is one more question that has come in i'll answer that also so this is short-term debt accounts for around one source of the total debt that is correct indias total external debt obligation is an excess of 4x reserves that is also correct we just saw as per the data from the economics away most recent data so both the statements are correct now there is a question which rajashaykan also now i think that clarifies your question the question itself says about external debt of india so it is about external debt even when we say total debt the question larger question is about external debt okay hope that clarifies that particular inquiry and now satish kumar's question sir but our external debt is only 10 percentage we saw before no it is not 10 percentage it is one percentage satish kumar not 10 percentage of the total borrowing of the government of india governments borrowing from outside india was only one percentage that is governments borrowing governments external debt is different our country's external debt is different again to convey that point take a look at this table the table that is given before what are the sources of or who is the one who's borrowing external debt outstanding as the total outstanding external debt general government borrowing between center plus state how can state borrow center borrows on behalf of the states for these developmental projects metro construction all those things central bank borrowing corporations but if you look at it the most important contributor towards this borrowing is financial corporations private entity entities external commercial borrowings that is what is a big big percentage of the borrowing okay so the question satish kumar earlier was about governments internal and external debt this question is about external debt in general what is the difference between governments external debt and countries external debt carthagin if you as an individual happen to borrow from a foreign bank if it is possible then that was also a part of external debt in the balance of payments transaction look see for all of these things what you have to understand is the definition of balance of payments so how do we define balance of payments balance of payments is a record of transactions of all residents of india with the rest of the world and vice versa all residents of india not only the government so in the balance of payments we have current account and capital account and in the capital account is what we have loans that loan is what is the external debt over here who all could be borrowing government could be borrowing but private corporations could also be borrowing okay sometimes it is easier to raise money from a foreign country why because we have we know this particular logic most of you know this logic we have discussed this in class many times okay same logic that i have discussed before i'll ask you a question which country is likely to have a higher rate of growth developed with country or developing country we have discussed this previously the answer is developing country is likely to have a higher rate of growth or has the potential to have a higher rate of growth why because a lot of untapped potential correct rajashekaran with leish correct okay sorry yeah karthik correct so they are the ones who are likely to have a higher rate of growth and because the rate of growth is going to be higher in developing countries the demand for money is going to be greater in developing countries because more businesses need money when the demand for money is higher the rate of interest is also going to be higher so if an indian company wants to borrow from india they have to pay a higher interest what is the report rate in india somewhere around six percentage six six and a half percentage what is the equivalent of the report rate in european countries and in america somewhere around one percentage or two percentage which means borrowing from foreign countries is much much cheaper so a lot of corporations in india there is i agree there is a risk of depreciating indian currency because the profits made by the indian companies in indian rupees when they have to repay they have to repay in foreign currency there is an exchange rate risk that is associated with it but if the exchange rate risk is not major then it is quite possible that a lot of indian corporations will try to borrow from foreign sources because the rate of interest is very very low so private corporations borrow external commercial borrowings government borrowing nra deposits that come into banks are also treated as loans all of these are other than government sources of borrowing so that is where external debt is different external debt is a much bigger concept government borrowing from outside india is a much smaller concept within it okay hope that clarifies it does government external borrowing is lesser than forex government external borrowing is lesser than forex yes sadesh kumar that is correct okay all right got it great i think i have answered the if there is any pending question please let me know moving on to the next question time starts okay why is the time not running out maybe i clicked something which made the time not run out okay time to run out okay so i happened to there is a q and a part here which where i happened to miss looking at the answers worry about that i'm right from the beginning i happened to have missed out on that okay so let's take a look at what's given consider the following statements about effective exchange rate effective exchange rate is summary indicator of movements of the home currency against a basket of currencies of trading partners rear is the near adjusted by relative prices captured by inflation differentials between home country and trading partners o e a office of the economic advisor compiles and disseminates both the trade and export weighted indices of near and rear okay so a lot of answers it says b a a is the dominant answer okay fair enough c is also given us an answer we mug up the country names uh summer i don't regarding the earlier question i don't think you need to mug up as such but you have a general idea with respect to so neighboring countries if you happen to have an agreement with the neighboring country it becomes important so don't just blindly memorize it have a general idea about it okay so the answer to this particular question now coming to the question at hand uh er er so the reason why we have this question are significant and last year also u k c had asked a question it's because the the rba recently a year back made a change with respect to the uh countries which are included in this basket of currencies so first of all there is a concept called as exchange rate uh exchange rate in general means the value of indian rupee in the indian context the value of indian rupee against one particular foreign country's currency uh comparison of two currencies is the conventional exchange rate that we have what is effective exchange rate so india wants to understand the competitiveness of the indian currency trade competitiveness or export competitiveness of indian rupee so what do we do we look at our major trading partners okay so indian rupee is compared with every single major trading partner let's say 40 countries i think the recent list has 40 countries inside it okay indian rupee versus the 40 major trading partners of india now each trading partner has their own relative importance right some country is more important some country is less important so indian rupee versus us dollar and usa has given assigned a certain weightage so based on that weightage their value would be a proportion of that weightage let's say 50 percentage is the assume 50 percentage of the weight is given for us dollar then value us dollars value would be reduced to half just like how our price index cpa wpa just like how those are calculated weightages are seen for the various trading partners of india and accumulative values arrived as one rupee is equal to this much value okay so that is what is called as effective exchange rate it is a summary indicator of movements of the home currency against the basket of trading partners the first statement is correct okay second one rear is near adjusted for relative prices adjusted by relative prices captured by inflation differentials between home country and trading partners it is something that you should be answering without even knowing what is near and react because it's only a question of real versus nominal real is equal to nominal adjusted for inflation is general logic that you should be knowing whenever you come across real and nominal what is the difference inflation is the difference nominal is adjusted for inflation you will get real value in inflation so the second statement is also correct okay so one and two are correct the only question is a stay or is it be office of the economic advisor is not the one which compiles and disseminates the data it is a reserve bank of india which disseminates both the data okay so that is the error over there so third statement is wrong one and two are correct okay hope that answers this particular question some people had answered see i don't know why you think a first statement is wrong logically okay explain near and rear oh i just did that no so indian rupee is there so indian rupee compared to a basket of currencies okay so this is what is effective exchange rate this effective exchange rate is what is called as near nominal effective exchange rate when see indian rupee versus us dollar inside that basket if you take into account indian rupee is sorry india's inflation versus the foreign countries usa's inflation and calculate that and similarly for every single country if you take india's price index versus their price index that will be called as rear near and rear is different simply that in rear nominal inflation is taken into consideration in near that is not taken into consideration okay for it is not very important to go into the mathematical details of this okay weightage is not assumed weightage is actually calculated rba does the calculation of weightage okay just take a look at this near er er rba there is this is how you search for things okay effective exchange rate of the indian rupee this was in january 21 2021 a couple of years ago now existing basket is expanded from 36 to 40 countries with the inclusion of eight new currencies and exclusion of four currencies that is why it was in the news okay so what are the weightages that are assigned export trade based weightage the weightage is given over here this is to answer sudarshan export weight waste weightage is given over here okay in the previous and the present so the two things are given over here what are the 40 currencies that are there eventually a value the formula for calculating near nominal effective exchange rate so this is how it is calculated let's take one particular country let's take usa so e is the exchange rate of let's say what is given as e over here so e is indian currencies exchange rate in comparison to so it is always a comparison so what they are using as the reference point is im of currency im of has a currency called as special drawing rights it's almost like a currency for them so e is the exchange rate of rupee against the sdr divided by the exchange rate of the foreign currency against the sdr so it is between that e by ei and then there is it is there is a square root in terms of the weightage that is assigned to that particular country this mathematics is not important i'm just trying to convey to you it is a comparison between two currencies and a basket of that look at this it is given as i is equal to 1 to n 1 to n refers to the 40 countries i is equal to 1 to 40 for every single country we do this and cumulatively everything is added and that is what is referred to as near now what is the difference between near and rear the formula is almost identical we only have p p is the price index in india p i is the price index in the foreign country so when you take that also into consideration the comparison of the prices in the two countries then that becomes real real effective exchange rate so if you want if you are mathematically oriented it's not important for upc exam if you want to really really understand this concept you can probably go through this or just simply read up the basics of it and that should be enough okay so someone is asking without any name u s e upc prep it says sir the recent news on moving away from us dollar being global exchange currency and looking at the agenda of countries like russia and china being pro u1 and bangladesh agreeing to get on to trade with russia and in u1 for new plant installation if at all there is a pandemonium sorry predominant shift considering in the exchange currency and relationship with china russia with respect to india as contrasting one is a close friend and another is a close aggressive neighbor how will india's position of stance in the case how will it affect our global trade um yeah so we don't see i'll give you a one-line answer so the question is essentially if us dollar ceases to be a global currency and if russian currency or chinese currency becomes a global currency what is its implications on india simple answers we don't know we can't guess what might happen we don't know whether we'll continue to have a poor relationship with china forever yesterday you saw and use india china have agreed to sort out the differences once our border agreements are our disagreements are sorted out if and there is nothing which cannot be sorted if it is sorted out okay then india and china may not be you know aggressive enemies once again we it could become indochini bye bye like we believed it was prior to the 1961 war you never know there are never permanent allies or enemies us a try to negotiate with north korea no it almost seemed like there was some result that is going to happen did not happen but you can never know so you can never guess what can happen it's a very hypothetical question which won't lead us anywhere okay don't be worried about the time i know the time is till eight o'clock i know we have finished only half the number of remaining questions doesn't go into this much of detailed analysis and all those things much simpler questions are in store okay welcome nameless person okay moving on next question time starts has started okay so we are out of time what is nostro nostro in the news because of precise issue that the person was addressing the answer here is d all three statements given here are correct it is just an explanation concept i wanted you to know what it is so this is how it works okay imagine two banks are there there is state bank of india and let's say there is an equivalent bank in australia or let's take russia itself there is a russian bank because russia and india is where the context of the news is okay so what is a nostro account it is one that a domestic bank holds sba in india holds an account for a foreign bank the russian bank holds an account in india okay in indian rupee for example an indian oil company buys oil from russia so we have to pay them but now us dollar is not allowed us is saying that we won't allow anyone to transact with russia in us currency so we are in an advantageous position we tell russia we repay in indian rupee russia says okay fine as long as you buy it's okay so what will russia do with indian rupee absolutely nothing so russia says you keep it in your account in india later when we buy something from you you can take that money from there rather than russia paying us separately they'll see detected from this account so sba holds an account for the russian bank okay where the russian money is kept inside sba's account that is a vostro account a vostro account is one that a domestic bank holds for a foreign bank in domestic bank's currency we call this account as vostro what will the russian bank call this account as the russian bank will call the same account as a nostro account now look at the same account from the russian bank's perspective nostro account is one that a foreign bank for russia sba's foreign bank agreed from russian perspective from russian perspective the same account that sba is holding as sba is a foreign bank now held for a domestic bank the russian bank is the domestic bank in the foreign bank's currency indian rupee it is maintained so the same account is what is referred to as vostro as well as nostro from the account holder's perspective india holds the account indian bank holds the account india will call it as a vostro account the same account russia will refer to as a nostro account let's say we buy something from russia and sorry russia buys something from us and instead of paying in u s dollar they are saying we'll pay in russian currency what will we do with russian currency no other country may accept it so we say keep the money with them yourself so then we'll call that account to be vostro they will call sorry nostro they'll call it to be vostro so it is just interchange it's the same account when we call it we refer to as vostro when they refer to the same account they'll call it as nostro okay so the first two statements are explanations in the indian context more usage of vostro account helps in internationalization of rupee more vostro means that more and more people or more and more countries are okay with transacting in rupee look at the first statement vostro account foreign bank holds an account in the domestic bank in domestic bank's currency so if more vostro account is opened in india it means that more and more countries are accepting indian currency for transactions which means greater international use of rupee that is what we refer to as internationalization of rupee or usage of rupee in international transactions so all three statements are correct in a very similar sense we have one more question coming up take a look at it time starts so time done let's take a look at it it is a process internationalization of rupee it is a process that involves increasing the use of local currency in cross-border transactions it's correct it increases the exchange rate risk on domestic traders in fact it is the opposite when does the exchange rate risk come in when we are dealing in foreign currency if there is an if there is a depreciation of indian currency then payment in foreign currency becomes that much harder okay so the exchange rate risk on domestic traders is greater if you are dealing in foreign currency whereas if you are dealing in indian currency the risk is reduced to a large extent so second statement is wrong it decreases the exchange rate risk on domestic traders is the correct answer then 16 it may limit sorry third statement it may limit india's ability to anchor monetary policy to its domestic economic landscapes now this is a problem which a country like usa also faces their currency is internationally used for transactions they cannot arbitrarily reduce or increase the money supply without considering international implications so similarly if indian currency becomes broadly used outside or widely used outside then we have to not just look at the domestic conditions we have to look at the international impact of changing our money supply as well okay because it will have a great impact globally so it limits our ability to anchor monetary policy to domestic landscapes because international aspects will also come into the picture third statement is correct answer is b 1 and 3 only second statement is wrong okay so it is an extension of the previous question in that sense okay so earlier there was a question that year is equal to year minus inflation am i right it does not minus inflation adjusted for inflation is the right now anonymous attendee hope that clarifies i know i'm answering it a little late still okay so 17th question time starts we are moving on to the last i think in exchange rate okay we have run out of time so if i didn't mention answer to the previous one 16th one the answer is b 1 and 3 second one is wrong i had said okay anyway 17 now again a very conceptual kind of a question but based on current affairs us federal reserve had actually interest increase interest rates what would happen you you saw that in the external sector document that i showed as well the economic survey document on external sector also had this in the paragraph highlighted paragraphs so us federal reserve increases the interest rate so foreign investors are thinking we came to india thinking india is providing higher returns now us itself is providing comparatively higher returns let's go back to us a capital flight happens so when they take their foreign currency outside there is a greater demand for foreign currency because they are asking they are investing and doing everything indian currency when they go back they want their foreign currency back so there is an increased demand for foreign currency within india when the demand for foreign currency is greater than the supply what happens indian currency starts depreciating previously people were willing to pay only 80 rupees to get a dollar but because of the high demand they are having to pay 85 or 90 or 95 rupees depreciation of indian rupee happens to prevent this situation what is rb is likely reaction when federal reserve raises the interest rates india has to offer an even higher return for the investors to prevent the capital flight so rb is also likely to raise the repo rate in as a reaction to the federal reserve action so all four are possibilities over here most people have answered the given the correct answer for 17 which is which shows that you have good hold over the concept all four are correct 16 sorry 18 you are moving on to inflation very good sali give us a given from may be sali are you i wonder great i have a friend from there okay so 18 yeah so time out 18 the answer is correct a again most people have answered it i think you guys are quite strong most of you are attending are quite strong with your concepts because concept questions you are getting it right it is part of liquidity adjustment facility yes there are two main tools of liquidity adjustment in india right now repo rate and standing deposit facility but as a corridor when you look at it there is a third thing also which is added which is the marginal standing facility okay so if you are looking at it as a corridor there is a repo rate in the middle 0.25 percentage points greater than that is the marginal standing facility 0.25 percentage points lesser than that is the standing deposit facility if repo rate is 6 percentage msf is 6.25 sdfs 5.75 that's how it is linked so it acts as the floor of the laf corridor msf acts as the ceiling of it repo rate is in the middle it is the anchor okay so it is a part of the framework acts as flow it's correct it is a collateral based tool for absorbing excess liquidity from the economy reverse repo rate was a collateral based tool but because this the standing facility which means rb says it is available at any time you want whenever you want you can come and deposit money with rba rb says we will not give any collateral to you so it is a collateral free tool not collateral based it is a tool without collateral as someone has rightly explained as well or even has rightly explained does not need collateral correct it's regular operation review the discretion of rba repo rate reverse repo rate works on the discretion of rba reverse repo rate is not used anymore msf sdf look at the word standing standing means available at all times rba doesn't have to explicitly make it available so it's a standing facility both the standing facilities are not at the discretion of rba because rba is the one which introduces it but once it introduces it it is available for the banks at any point of time till the rba makes any change to this so it's a standing facility it's a regular operation will not be at the discretion of rba banks decide whether to deposit money or not only the first statement is correct okay so a one only moving on 19 time starts sdf recently shabas it replace reverse repo rate as the flow sdf replace reverse repo rate repo is still there right in the middle if i said something wrong please forgive me in a flow i might have said if i said sdf replace repo that is a mistake from my part during brief at all time of monetary transmission mechanism so what is monetary transmission mechanism so still getting answers first one the introduction of external benchmark based lending rate was aimed at improving the transmission of monetary policy through the economy okay repo rate is a better tool at regulating economy white money supply while omo helps in immediate regulation of money supply okay so the answer here is both the statements are correct c is the answer a lot of people initially answered it correct some people later said b is correct and i have got one person no all the answers are either c or b so c is the correct answer so let's look at what is monetary transmission mechanism rba introduces monetary policy which is repo rate but what is repo rate it is a rate of interest at which rba lends money to banks so it's a relationship between rba and bank through it we think rba can only adjust the money supply in the banking system that is not cool because when the repo rate changes the rate of interest at which banks borrow from other places including from the public also raises the rate of interest at which bank lends money to the people also increases when rb reduces the repo rate all the other interest rates are also likely to go down this is called as transmission of monetary policy to the rest of the economy okay so when monetary transmission mechanism monetary policy is transmitting properly to the economy then rba's policies are a success the whole idea of repo rate is to transmit the monetary policy to the economy when that was not happening properly prior to 2019 the rba it was there in the economic survey as well the rba had reduced the repo rate by 135 basis points but the banks had only reduced their lending rate by 40 basis points or something like that that is poor monetary transmission to overcome that rba said we have a system called as marginal cost of funds based lending rate mclr for certain kinds of loans rba replaced mclr with ebla external benchmark based lending rate mclr was based on internal factors of the bank like their cost of borrowing and all those things their operational cost and all those things external benchmark is based on the repo rate and a couple of other external factors like that so once it is based on repo rate when repo rate changes external benchmark based lending rate also raises by the same extent uh repo rate falls by the same extent ebla also falls so it was aimed at improving the transmission of monetary policy through the economy so first statement is correct linking the rate at which banks give loan to the common people with an external factor like repo rate was intended to improve the monetary policy transmission of monetary policy second open market operation rba announces next week friday we are going to borrow 10000 rupees from your market or sell g6 worth 10000 crores from the market immediately they can reduce the money supply or increase the money supply in the economy through open market operation but most of the people who deal with securities are limited very few people are actually dealing with it so commercial banks deal with it or non banking financial companies deal with it very few people deal with government securities which means that they can immediately reduce the money supply but only from select segments of the economy not an economy wide change for an economy wide change repo rate changes repo rate increases banks lending rate increases banks deposit rate also increases as a result more people deposit common people also deposit more more money into the banks they borrow less money from the bank so a greater economy wide impact can be seen through repo rate so the second statement is also correct that's why both the statements here are okay i hope uh that answer uh that answer is clear moving to the 20th question ebla mclr is confusing so satish kumar the idea is very simple ebla okay external benchmark based lending rate could be a typo i think so ebla is very simple so mclr bank looks at their internal factors so how much at what rate did i borrow how much salary do i have to pay to my staff how much is there end on the building all those are the factors which determine mclr internal factors of bank it is you can also understand mclr as internal benchmark based lending rate but now rb is saying if i leave it to you to decide what is the lending rate you are not doing it properly you are not passing on the monetary policy properly so we are going to do something you decide a margin this much more you want you fix that margin and after that the interest rate will change according to repo rate so repo rate becomes the uh indicator whatever is the repo rate plus four percentage will be the lending rate okay repo rate increases lending rate also increases same way repo rate decreases lending rate also decreases the same that is external benchmark for a bank repo rate is external for a bank their cost is internal that is the external and internal concept over here satish kumar hope that is clear next question 20 time starts simple question for most people late satish all right so surprisingly i'm getting a lot of wrong answers i'm out right so yeah the answer here is uh one and uh one and two c is the correct answer over here a lot of people seem to have missed out on this statuation means stagnation accompanied by inflation there is stagnation in the economy there is inflation in the economy simultaneously the philips kerb theory or a general theory with respect to inflation is that inflation is likely to provide more profits as a result more production would happen so when inflation happens gdp is likely to grow which is why india is also targeting we need minimum four percentage inflation so that our gdp rises accordingly so that businesses produce more but the scenario where you have high levels of inflation but it is happening because of increasing cost of production and the cost of production is rising businesses are saying sorry we don't have money to produce more so an inflation accompanied by a stagnation or a drop in gdp growth or a stagnation gdp growth is called as stagnation so inflation accompanied by a lack of gdp growth is correct skew inflation skewed inflation in some sectors alone there is inflation while other sectors are largely remaining unaffected let's say food prices alone are rising all other areas are remaining low fuel prices alone are rising all other sectors are remaining fairly uh stable that is skew inflation skewed inflation skew inflation so it is correctly matched inflation specific to only some sectors then you have this inflation this inflation is different deflation is different what is the definition given there is deflation decrease in the prices of goods and services deflation what is disinflation decrease in the rate of inflation let's say india in india there is inflation of eight percentage but we want inflation to be brought down to four percentage if we bring down the rate of inflation it is it doesn't mean that the price is falling it means that the rate of growth of the price of the commodity is falling not the price of the commodity itself so all the the reparate increase that the rb is doing when they're increasing the reparate from six to six point five or whatever it is those are measures to control inflation right their intention is not to bring about deflation their intention is to bring about disinflation in the economy reduce the rate of inflation from six percentage to four percentage so disinflation is different deflation is different so here the answer is c one and two only so how is it if petrol increases most of things okay with petrol yes if petrol price rises most of the prices will rise but not necessarily true with respect to food items if there is poor monsoon food items prices will rise it need not result in industrial products price rising also it is not common skew inflation is not common usually all sectors rise together but sometimes it may happen that one sector alone rises the other sector doesn't rise and also fuel price rise may not immediately result in other sector price rising for a short while it may be skew inflation it is possible high no in theory it is possible going on so 20 answer is c 21 time starts okay so time out I think I have only one or two people who have given me the wrong answer okay three now before now so except the second statement all of the statements are correct um so second statement is wrong because customer does not have to pay what is tokenization when we enter our card details on websites like amazon and all those things we are giving our card details to amazon itself which is bringing a risk associated with the with our financial instruments like that card debit card or credit card instead if we request a tokenization what will happen is amazon or flip card they don't maintain our detail they take this particular customer and they take it to the bank and they say please convert it into token form which is a representation the actual data is not given a representation a representation like an id card id number is provided so amazon will only get to see your flip card will only get to see the id number they don't get to see the actual information that is associated with so it provides protection for a customer it refers to a replacement of actual card details with alternate code called token so the process is called a tokenization it shall be unique for a combination of card token requester here token requester is not us it is the uh say amazon or an entity like that and the device in which we are transacting okay customer pays for the service is wrong customer doesn't have to pay it if there is a payment associated the token requester they will do it customer doesn't have to pay it is provided as a benefit to the customer itself so b 1 and 3 is the correct answer okay moving to 22 time starts okay we're done with the time right yeah it's quite a lengthy statement i'll just wait for a few more seconds all the statements are quite lengthy all right so we'll start i don't expect upc to ask questions in this detail or depth with respect to this concept it's a fairly new concept the questions are likely to be more superficial but i just asked it so that you are familiar with it in case it goes to that extent so all your conventional questions about cbdc you would have already seen with respect to uh the fact that it is rba launch pilot program and all those things basic thing it is a crypto kind of a technology which is there and all these things this is a little deeper into the concept so rb is long separate digital currency for retail and wholesale segment which is itself is not very common knowledge right um so um that is correct actually so the symbol is what i have given there e that rupee sign hyphen r for retail and hyphen w for wholesale it actually launched rb launched these two as two separate pilot programs i think it launched wholesale first and then it launched retail and there is a significant difference in how it works as well the wholesale is actually entirely governed by the rb itself the entire money is in the is a liability on the all the throughout the entire thing is a liability on the rba but the transactions are recorded by the rb itself so if you are dealing with the digital rupee wholesale it is directly with the rba that you're dealing you go to the rba you get that converted and rba acts like a bank in this case which is not common okay but when it comes to retail now you would have read from a lot of places that cbdc itself means the role of bank itself will be invalid because rba directly does it with retail that is not how it works the bank is involved in this process it is to the bank as a consumer as a retail consumer we go to the bank we convert our currency to digital currency and the bank is the one which keeps the account with wholesale rba keeps the account with retail bank keeps the account so the role of the bank continues to exist when it comes to cbdc retail now this question was meant just to give information all statements are correct d is the correct answer okay there is nothing no trickery here just to give you that information so wholesale digital rupee is now for now it is limited to use in settlement of secondary market transactions in g6 that is the only place where it is used okay so rba looks at it as a mechanism to introduce there are these directly dealing with that digital rupee wholesale where only g-sector transactions entire g-sector transactions are governed by rba itself so it becomes easier for them whereas in retail it is in the form of tokens it represents your rupee you give a 10 rupee note you can convert it into a digital currency of the equivalent value so it's completely the same as you could say our currency without there actually being a physical thing so it's in the form of digital tokens represent legal tender issued in the same denominations as paper currency and coins for most of us we are not practically familiar with this because it's still a pilot program sometime in the future it is something that we might end up using as well okay just just be aware of it this is purely informative d is the correct answer here all three statements are correct okay so we are going to have a series of questions now based on banking so maybe i expect another 15 minutes or so should be done let's see seven questions 15 might be a bit of a stretch but let's see time starts okay we are about to run out of time all right so the explanation itself conveys it dvu will provide a convenient access a lot of people are very sure that b is the answer let's see so dvu will provide convenient access and enhance digital experience in an efficient paperless secured and connected environment it's very generic in statement the whole idea of ease of living of common citizens digital banking units everything about the first statement is just generic explanation of the concept they're correct okay second statement is where the trick lies they provide all services offered by a physical bank so when we say that it provides a digital experience it reduces the human involvement over there or paper trail involvement ask a simple question can the issue checkbook they cannot issue dvu's cannot issue a checkbook what dvu can do in a dvu you can raise a request for a checkbook but the issue of the checkbook is not done there it will be given by the physical bank it will send your home address okay or you can go to the branch office and collect it a lot of activities you can do for now some activities you cannot do you actually have to move to a physical bank the idea is for all those activities where you don't require a physical bank this is an alternative that is given lesser investment for the bank also because manpower requirement is lesser more easy access for common people also so they don't provide all services offered by a physical bank but they do provide a lot of services that are provided by a physical bank which need not be in physical form so second statement is wrong now third question all the schedule commercial banks oh i should have mentioned it as schedule commercial banks i cannot use a direct short form just like that okay all the schedule commercial banks other than rrbs payment banks and local area banks can set up dvu's it's correct it's structural it's from the rba website so one and three are corrected d is the correct answer here second statement is wrong because they don't provide all the facilities for all the services moving on to 24 time starts you're done with the time now we are so someone said d and then said sorry a um so let's look at the statements uh per payment aggregator so this is where sometimes your digital banking payment aggregation could be sometimes confusing similar kind of these are areas where i've got questions saying what is the difference between these two so digital banking units means sba sb itself has a digital banking unit something which represents sb itself you can actually go there basic infrastructure would be there it is doesn't digital banking unit doesn't mean that doesn't physically exist it doesn't have physical manpower over there just like a chaos that you have like an atm or something like that where you can go and do certain activities it doesn't it has very limited uh physical presence but it is still physically there are entities which are set up but payment aggregator is a different concept altogether so payment aggregator means so when you go to a platform let's say you go to flipkart and you buy a commodity when the transaction is happening who provides the bank transactions and all those things who's providing that web page where you can do all the transactions so you would have uh seen come across this term called as razor pay or moby quicken there are different terms that you may have come across so they are what we call as payment aggregators okay they provide the service of completing financial transactions on behalf of say amazon or flipkart or any of these any other any other store say anyone else who has an online store so not just online it could be actual physical stores as well you have your point of sale machines who's providing your qr quotes they are all payment aggregators whoever is providing those qr cards and enabling those transactions that is what is called as payment aggregators their entities that facilitate e-commerce sites and merchants to accept various payment instruments from customers for a complete completion of not pf of their payment obligations correct they eliminate the need for merchants to create a separate payment uh integration system of their own if payment aggregators don't exist let's say i own a store i have to put in all the infrastructure necessary for creating a payment system of my own that is not necessary because they take care of all the infrastructure that is there okay and then finally banks as well as non-bank pa is required a separate authorization from rba this is where there is an error so the third statement is wrong answer is a one and two only non-bank payment aggregators require a separate authorization but banks are already a part of the payment and settlement system of rba they don't need a separate they already have the license of being payment aggregators it is only non-bank pa is which require a separate authorization from rba as a part of payments and settlement system previously only banks were allowed to do payment and settlement activities now don't non-bank entities are also given the permission to do that so the third statement is wrong because banks don't require a separate authorization only non-bank pa is required that so answer is a one and two moving on upi pay now linkage time has started arindhita if you could mention the question that you are referring to it would be easier for me to give you an answer somewhere skip 23 i'll get back to it after this question we are on 25 now all right so we are this is nearly an informative question so both the statements here are correct he is the answer both the statements are correct so this was in a way a landmark event because it's happening for the first time the second statement is correct singapore is the first country with which india has launched cross border person to person payment facilities fast payment system of the two countries is what is being linked the linkage is a project between rba and monetary authority of singapore to link the payment system fast payment systems india has upi which is fast payment system similarly singapore has a mechanism called as pay now the link between upi and pay now where you can now transact from upi to pay now there is a linkage so we can easily send money from india to singapore or singapore to india and india has a lot of extra population in singapore okay so that is why this becomes or this gains prominence transactions between the countries now become faster and much more efficient okay so 25 the answer is both the statements 25 see both one and two okay so previously someone had asked a question about 23 so 23 the answer is D one and three second statement is wrong because it doesn't provide all the services offered by a physical bank that's the error there okay 26 now time starts stumbled at a later point i can maybe at the end if you can stay back then maybe i am done okay financial service institutions bureau um as the first statement itself says previously we had bank both bureau but the issue with bank both bureau is that um based on certain controversies and issues that came up the appointments made by bank both bureau has raised a lot of questions sometimes some seniors have been bypassed and without proper explanation so question marks have been raised on the functioning of bank both bureau so it necessitated the government to introduce a replacement body which is the financial service institutions bureau so it is a replacement of vbb and what was vbb's main mandate to make recommendations towards filling critical posts okay so that is the first statement is correct in that sense okay so second one the bureau will also be involved in formulating and developing business strategies for state and banks and help them in their fundraising plans is just explanation that's correct it would also monitor and assist the performance of public sector banks government owned financial institutions and insurance companies not just banks because previously it was bank both bureau now it also includes other government owned financial institutions and insurance companies also so that is an addition that is there so the first statement you would assume to be true because insurance or other financial institutions are involved then the third also has to be correct so in this context all the three statements are correct merely informative in nature so all three statements are correct just do read up a little more about how the members are appointed themselves but right now that may not be as important just know what is the role of fsiv but if you can read up a little more about it it could be useful for you okay so that was 26 answer is d okay moving to the last four questions 27 now the time starts i see a raised hand by dj if you could uh send me a text okay so you're done most people have got the answer right uh almost everyone who has answered so the answer here is c again merely explanatory in nature sebi has approved ssc it's a stock exchange so sebi will have a key role to play in this has approved ssc for the purpose of fundraising by social enterprises it's there in the name itself right uh social enterprises eligible to participate in ssc should be entities having social intent and impact as their primary goal see now uh both the statements are correct see both one and two are correct explanatory nature the idea is this if you are working as a company who doesn't have profit as your primary motive so it is applicable for non-profit organizations also even profit-oriented organizations but profit is not the key motive okay when you are a company where profit is not the key motive you might find extremely difficult to raise money from the conventional share market because anyone who goes to the conventional share market is thinking okay dividend or profit i will get a share of the profit in the form of dividend so that is the logic of investing in shares now they might find it difficult to raise money from there so the government has thought of this concept in the budget it was announced a year or so ago year or two ago that has special stock exchange where the moment anyone who goes there they know that profit is not the key motive there are a lot of people who might be interested in investing towards socially relevant purposes but they don't have huge amounts of money to invest the whole idea of stock market is uh small amounts of money can be invested there right so uh from multiple sources huge sources so such companies to raise money from people who are not only working on profit motive who want to invest in socially small amounts but in socially relevant activities for them a separate social uh stock exchange called a social stock exchange has to be used but there are restrictions on the companies which are raising money from here because they cannot raise money from here and use it for whatever purpose that they want okay they have to show to the concerned organization that they are using the money in the right way as well there are certain guidelines that are associated with the task but this is the general idea of what is the social stock exchange both the statements are correct okay there's three more questions hit tight almost there time starts technical textiles i'll answer that uh before i explain this one so what are technical textiles let me look at the answers um p okay all right so a lot of people saying c some people saying d but most are most answers are c all right so there is a general logic by which you can eliminate one statement and that will help you arrive at the answer itself the one statement is the first statement technical textiles account for nearly 80 percentage of india's total textile and apparel market if you have a general idea of what is technical textile it just textile itself but used for uh your non uh conventional purposes or uh textiles of a particular type okay it does wide variety of use uses um so textiles made of uh let's say jute or certain types of uh you know you can't quite call it as uh plastic but similar kind of compounds that are there so that is what is the whole idea of technical textiles okay so it has application in manufacturing parachutes or sports appliances even defense appliances your bulletproof vests all these can be created out of technical textiles okay tens can be created out of technical textiles so that is the whole idea 80 percentage of india's textile market is technical textile you should have been hearing about texting technical textile for a very long period of time it is an evolving area evolving area cannot already have 80 percentage that's a logic that you can apply you eliminate one you're left with only one answer c is the correct answer first statement is wrong it is not 80 percentage it currently accounts for a much much smaller proportion of it if um um i forget the exact number that is there so i'll let you know meanwhile the second and the third statements are uh correct so there is they are very generic in nature um also i before i forget there are a couple of queries which came about the previous question i'll come back i am here to tell you what how much does it account for barat is asking does ssc come under the purview of fcr a uh unfortunately i don't know yet i with respect to fcr a i don't know first of all whether regulations have been put in place with respect to foreign contributions or not is there any particular reason why you ask this question is there a context to it please let me know when arvind is asking will it be effective as it has no returns no we can't say it has no returns even a company which doesn't work with profit as motive may make certain profits and sometimes philanthropic measures for example let's say you are an extremely rich person you can go and run some charitable organization like akshia patra or such non-profit organization what if you don't have that much money but out of your salary you believe that you want to contribute something towards charitable organizations so instead of randomly giving in and the problem with respect to giving money to charitable organizations sometimes is you don't know whether they're actually using it for charity this is where the government provides an opportunity saying if you want to be sure and the government is saying that we are regulating it properly we'll ensure that the money is used for charitable purposes or socially relevant purposes not just charity socially relevant purposes so rather than giving it to some random organization why don't you come and put the money over here small amounts of money that is where it is expected to raise money from those people who are putting their money with profit as the as not the motive over there so it can raise money in that sense okay so that is the answer to it but at please let me know as there is if there is a context to it to your question so I told you that with respect to technical textiles I'll let you know what is the contribution it contributes roughly around 10 percentage of India's total textile and apparel market okay so that is the number not 80 percentage the exact number is 13 percentage but roughly 10 percentage we can remember it that way that could be sufficient so that is the error with the first statement okay so there is this website called as invest India which all of you might be familiar with or some of you might be familiar with I do sometimes use it in class if it's relevant so this is the website invest India so this website has information on technical textiles because of the focus that is given there so this is the website this gives you a lot of information about FBA and all investments into Indian all those things invest India dot gov dot in but more specifically you can search just technical textiles and the best source of information that you have is from this website the future of textiles technical textiles important because the prime minister himself made a lot of comments about this and a lot of key government comments have been about focusing on technical textiles so it has an overview where are the various segments where it is used from a science and tech perspective itself these are the main segments and applications where it can be used so becomes very important just read up generally about this the numbers rate of growth and all those may not be as important more from a science and tech perspective than from an economic perspective okay all right so moving on to 29th question just two more time has started okay done so let me look at the answers so B is the dominant answer B is two only okay let's take a look at it scheme for promotion of bulk drug parks under which the ministry of Ayush claims aims to support the setting up of first of all if you are familiar with what is bulk drug the generic drugs that are manufactured what does that have to do with the ministry of Ayush ministry of Ayush is about your indigenous medical systems right so it is the department of pharmaceuticals ministry of pharmaceuticals which is involved in this not the ministry of Ayush that is where the first statement is wrong everything else about it is correct 3000 crore is set up three drug parks were proposed to be set up as per the budget recently the approval has been given to three states for setting up drug parks over there 3000 crore is the outlay 1000 crore per drug park bulk drug park scheme intends to reduce India's high dependence on imports for manufacturing bulk drugs so during COVID there was this problem India is a big huge pharmaceutical so we can pharmacy of the world we are defined as but we are dependent on Chinese imports for active pharmaceutical ingredients API we do produce a lot but we are also dependent on imports from there to reduce the import dependence and to make India truly atman urban in the context of pharmaceuticals is why this particular scheme was launched so the second statement is correct the first statement is wrong because it is not the ministry of Ayush pharmaceuticals ministry or the department of pharmaceuticals is the one which is involved in this D2 only is the correct answer okay so meanwhile to answer a previous question Bharat no Bharat's question was whether firms in social stock exchange have to be registered under FCRA it's a good question to know because I can give you some extra information SSC does not allow foreign investments as of now so you foreigners are not foreign portfolio investments or that side of investment is not allowed in social stock exchange so the question of FCRA doesn't even come into the picture I hope that answers your question moving to the last question that we have time starts welcome Bharat okay we are out of time so 29th I told you the answer is two only earlier someone asked me about 29th answer two only okay 30th 30th again a very general kind of informative kind of statement the answer is D12 and 3 the answer for 30 is D12 and 3 let's look at the statements one by one ONDC is an initiative aiming at promoting open networks for all aspects of exchange of goods and services over digital or electronic networks it will enable local commerce across segments such as mobility grocery food delivery and travel to be discovered and engaged by any network enabled application network enabled application being the important one it is an initiative of DEPIIT it is not actually actively run by them but it is an initiative of that department there's no doubt about it first of all what is open network for digital commerce ONDC the idea is that um we have let's say something like again I'm taking the similar kind of examples Amazon or Flipkart okay let's say I have an account in Amazon and there are some sellers who are registered on Amazon when I want to buy a particular product I want to buy a mobile phone I can buy only from those sellers who are registered on Amazon so it's only my options are limited to that there may be so many other sellers of the same mobile phone or some other object that I'm buying by who are not registered on Amazon who are registered on some other okay let's say Flipkart let's say some other local other e-commerce platform if there is any that that is there or there is no e-commerce platform if there is some other seller who's not registered on any e-commerce platform my options are restricted to those entities who are registered on the Amazon network alone similarly for a seller also they have to be registered with Amazon to sell on Amazon they have to be registered separately with Flipkart to sell on Flipkart or they have to be separately registered with some other entity to sell there so they need individual registrations everywhere otherwise there there might be some customer who says most of my products I'm buying from Flipkart I won't I don't even have an account in Amazon which means a producer who's registered or a seller who's registered on Amazon is missing out on a customer who's not registered on Amazon so this is a problem narrows down the buyers and sellers the contact between buyers and sellers so the government came up with an initiative where they said we are going to create something called as an open network for digital commerce where whoever is the interested seller can come and register there okay whoever is see even someone like something like an Amazon or Flipkart can go and register themselves with O and D C and a seller who's interested can go and look register themselves there which means that now if you access it through the open network for digital commerce any seller who's registered or any network enabled application network here is open network right network enabled application anyone can access any any seller can access any buyer any buyer can access any seller it need not be app specific okay which is why it is called as open network so that is the whole idea of it to you can say democratize the whole e-commerce segment is the whole idea behind the concept of open network for digital commerce okay there's a very interesting five minute video a seven minute video about explaining the concept of O and D C which you can download from their official website itself so O and D C just type O and D C it will give you a very good overview of their official website open network for digital commerce there is a video which is given where is the video no more and must be somewhere here maybe about or maybe you click on home there is a seven minute video I randomly popped up I think somewhere you click you will get the video I'm not able to it's not still very user friendly about I think learn about O and D C opens up that video I think I'm not sure but there is a video here I'm sure about that so this is a source from where you can access it okay so that brings us to an end of the 30 questions that I have yeah so to democratize only correct I think thank you for that that brings us to an end of the questions that I haven't had in mind so if there is something else that you would like to ask you can you're free to ask ask a thing meanwhile there is a question earlier asked about UPI 123 I'm looking for who to us who asked just to address the person okay Tamil asked me can I explain UPI 123 pay so the idea is for us to use UPI now we need a smartphone with internet connection all those right how about UPI for people who do not have an internet mobile phone who have a feature phone like our previous double and double zero kind of phones so UPI 123 pays an option by which they have a few alternatives they can type an IVR code or they can call and make transactions by giving a certain code that facility is called as in general terms that is what is called as UPI 123 pay for feature phone users how to use UPI okay so hope that answers your question Tamil how to cover economic surveys by see I think at this point you shouldn't focus on economic survey too much just focus on certain areas certain tables look at previous year UPC questions what are the trends like I took up today right trends data table patterns that is what you should focus on for means economic survey becomes even more important okay from a means perspective it you can take some information with respect to schemes and all those things from there and that is what you can that is how you can use that okay economic survey from problems perspective just now if you go and start reading everything it is a little two time consuming in nature I don't know how to share any communication mechanism can you write to Shankar Academy and ask for my information I'll my mail ID will be shared by them you can find Shankar Academy's communication because this video I think is shared on YouTube as well so I don't want to give any communication mechanism with such an open platform just write to if you have my mail ID you can write to me I'll respond to that if you have been a past student or just write to Shankar Academy they will find some communication there I will make sure that I'll ask them to reply individually to you on mail giving my email ID then we'll communicate okay I hope you understand my hesitation to share on an open platform any communication mechanism so anyway so Satish Kumar can I explain zero coupon bonds can we say T-Bills and CMV as zero coupon bonds yes we can call it as zero coupon bonds zero coupon bonds means bonds which have zero interest rate because your T-Bills and cash management bills do not work on the concept of interest rate they work on the concept of issued a discount and redeemed at par so how T-Bills works is government issues at T-Bills and says 91 days later I'll give you 1000 rupees they tell you how much they'll give you so what is the gain that you have government says okay I want minimum 900 rupees I'll give you 1000 rupees after three months minimum I want 900 rupees now auction starts to buy the T-Bills someone says I'll give you 910 someone says I'll give you 920 someone says I'll give you 930 finally they settle for 950 so the government gets 950 they'll give you 1000 so there is no interest rate the gap between 1000 and 950 is what is your gain so that is what is called as zero coupon bonds okay bond yield and inversely proportional to bond price please explain whether bond here denotes both G6 and T-Bills bond here denotes primarily G6 because T-Bills are short term but everything is a bond so data G6 is what is usually referred to in this case Mithilesh Ayur student of Shankar Academy do you have any contact information of mine if so drop a text so that I can explain in fact I think I have explained the link between bond yield and in one of the videos that's there on YouTube as well okay just okay a couple of questions have come I think maybe I'll answer it now it's a bond yield and bond price I'll explain the relationship welcome Priya Darshani Dave SAS welcome is there any zero coupon bond other than T-Bills and CMB here I think commercial papers and are also zero coupon bonds if I'm not wrong so those are government securities but private securities can be zero coupon bonds also yeah Mithilesh actually stay back because I think other people a couple of others are also asking so I think I'll explain bond yield and bond the relationship between bond yield and bond price now itself welcome Aravind Meena Priya what is crowding effect so there is nothing called as crowding effect it is either crowding in effect or crowding out effect if you're asking in the context of government expenditure so the idea is simple if the government were to increase their expenditure government increases their expenditure generally capital expenditure government increases their capital expenditure if it results in more and more investments coming in private investments coming in it is called as crowding in effect because government is building roads and infrastructure other investments are coming okay if the government were to increase their expenditure as a result of that increase the private investors are either looking at the government as competition or the private investors see government to spend money they have to borrow it when they borrow the interest rate tends to go up because government is borrowing others are also borrowing demand for money is increasing so government borrowing means private investors will now find borrowing costlier as a result they may not borrow so if the government increases expenditure as a result private investors go away that is called as crowding out effect so there is crowding in and crowding out effect crowding in means government investment is resulting in more investment crowding out means government investment is resulting in investment reducing private investments reducing so hope that clarifies it okay so crowding effect I have answered so what bond price and bond yield the idea is this this is primarily in the secondary market okay not in the primary market Satish I will answer that but let me finish this one so this is in the secondary market okay so there is imagine that there is a bond government issues a bond and borrows 1000 rupees government says they will pay 8% in return first year five year bond okay 8% is the return so 80 rupees is what the person will get at the end of year every year the person will get 18 rupees second year let us say there is inflation when there is inflation interest rates in the economy also go up okay so now in the second year when the government is trying to borrow money it is issuing a new bond it has to offer a higher interest rate because of inflation the interest rates have gone up so it has to offer higher interest rate so the government is offering 10 percentage as the interest rate on it instead of 8 percentage the government in the second year borrows 1000 rupees but is offering 10 percentage as the interest okay so there are two government bonds now first bond and second bond first bond has 8% in return second bond has 10% in return first bond offers 80 rupees on 1000 rupees second bond offers 100 rupees on 1000 rupees okay now the person who was the first bond in the second year when the person is trying to sell it no one is buying the bond why is no one buying the bond because there is already a bond which is offering much greater than the first bond so why would anyone buy the first bond so what will the first person do the first person will be forced to sell the bond at a lesser price because the person cannot alter the interest rate the person what they can do is they can sell their bond at a lesser price let us say they sell it at 20 rupees lesser than usual so they bought the bond at 9000 rupees they are now willing to sell it at 980 rupees which is a loss for them why are they doing it because they need immediate cash otherwise no one would do it they need immediate cash so they are willing to sell it at even 980 rupees when it is sold at 980 rupees is the 1000 rupee bond will still fetch 80 rupees so 980 rupees will fetch 1080 rupees so 980 rupees will fetch 100 rupees on top of it whereas there is another bond which which is 100 rupees on 1000 rupees this first bond is now fetching 100 rupees on 980 rupees okay so the bond price has gone down the yield of the bond which was previously 8 percentage is now more than 8 percentage 100 rupees on 980 is more than 8 percentage when the bond price goes down the rate of yield or the yield goes up so this is the inverse relationship between bond price and bond yield okay it is better explained if I could write it but then that will take a lot of time it will it is a bigger explanation if you can now communicate with me just find my email id or write to Shankar academy so I will get the information or you will be shared my mail id then I can share the written explanation of this I have a written explanation with me I can do that for you all right so if you want a further explanation of bond price and bond yield if not go to RBA's website so I will show you to understand the relation between bond price and bond yield itself I will show you a very good source just type G6 RBI FAQ okay so there is an FAQ on government securities that RBA has here you will find a discussion on yield where are you yield or is it not this one I think this is the one yeah here it is how is yield yield based option question number four price based auction wasn't there another one wait no maybe not this one so this yeah what are the basic mathematical concepts one should know for calculation involving bond prices and years it is very complicated probably so you can take a look at it but if you find it difficult to understand okay what is the relationship between yield and price of a bond how is yield of a bond calculated so an illustration is provided okay so this should help you if you are not able to communicate with me else communicate with me find a way hankara academy through that come to me I will help you out all right welcome with leish rajasri is asking how does the record rate affect bond yield and rate when the report when there is inflation report it increases when the report it increases logically bond yield also has to increase if the government is trying to borrow money if the report it is high they'll have to offer higher rates as well so bond yield tends to go up as well at least in the primary segment bond yield tends to rise along with repo is what is the general understanding but you'll have to be very specific in which direction we are talking inflation adjust bonds this scenario will be insignificant right inflation adjusted bonds yes to a large extent insignificant but inflation adjusted bonds forms a very small part of overall government borrowing so it is not significant enough for us to say that that is a big factor okay ninth question option a is it for all state own taxes revenue is a major no for not for every individual state not for every individual state so we have I had downloaded that page right so not for so take a look at this not for every single state that is there but for all states put together all the states put together the money that they receive here it is so this is for all states and ut's with their own legislation not for every single state that is hope that answers the question cumulatively for all states is what we're talking about I hope there is no unanswered question so I think we'll wind up the session with this hope you had a informative session 16th question due to internationalization of rupee will rupee appreciate and exports decrease so exchange rate will be affected see for rupee to appreciate exports decrease uh shrinath data are you a student of sia do you happen to have my mail id banglore pc much you have my mail id then right just contact the banglore office and they'll give you my email id or my telegram id tell them that you I told you to share the telegram id not the number please don't ask for number telegram id or just my mail id you ask them for my mail id I'll we can interact okay so 16th question due to internationalization will rupee appreciate and exports decrease so exchange rate will be affected did I say that exchange rate will be unaffected why do you ask this question 16th question it is a process that involves okay it is a process uh it increases the exchange rate risk uh is the part that I think you might have a question with um due to internationalization of rupee will rupee appreciate I know why would rupee appreciate because greater demand for rupee okay but appreciate with respect to which currency appreciation is a concept with respect to two currencies right with which currency are you talking you are still talking about the internationalization of rupee and talking about transacting in dollars your transaction itself is in rupee right so where is this concept coming which appreciation with respect to what currency that is a question that is raised now right so rupee in the global scenario gets appreciated no doubt about also um exports may reduce exchange rate may be affected exchange rate will stabilize it may have some benefits there may be some disadvantages for example developed countries they find it hard to export USA as a trade deficit with a lot of countries all that is true so in the long run maybe it is possible that it can have some impact to say that it increases the exchange rate risk on domestic traders is highly uh no it's very drastic to claim that okay so hope uh that gives you some clarity on that all right so I think we have gone way overboard we started a little late but still considering that also we have gone at least half an hour so we'll wind up the session with this thank you so much