 Welcome to all of you in this next lecture on economic survey. Right, so we have already given you a brief introduction about the economic survey in our last video. और जो ये वीडियो है, this will be a highly in-depth video जहांपे हम लोग हरे एक aspect से economic survey के बारे में, discussion करेंगे. Not only from prelims, but also from the mains perspective. जो भी relevant information है, economic survey से, all those informations will be taught to you in very basic manner. And also the short notes of the entire survey will be provided to you in the PDF form. So, अगर अप सरवे नहीं भी पर का रहे है, because of scarcity of time or because of any other reason, then you can simply rely on this lecture. And then after that आप उस जाके PDF को पर सकते है, your entire survey will be covered. Because we have taken out all those relevant points, which are relevant for your exam. Although economic survey is the best book, which someone should refer to in their exam preparations, but some information is not relevant for our syllabus part, for our exam part. So, only some information we have left out, which are not relevant as of now. And whatever exam point of perspective you want, there is no compromise in it. All those things are put over here. And whatever PDF you will be provided, that will be the best PDF, that has been written in the best concise manner. In that you will get everything in the detailed manner. So, we will do chapter wise, this whole economic survey. You know that there are 12 chapters in our economic survey. So, every video will include one chapter and then there will be 12 lectures will be taken by me. And we will cover every chapter from every aspect. And finally, we will try to include or summarize all the 12 chapters, so that you understand the essence of that whole survey. So, in today's lecture, we are going to start with chapter number 1, which basically gives you a basic summary about the world economy and then about the Indian economy. As you know, from so many years, the whole economy has gone through doldrums. There are one-to-one problems. In this context, chapter 1 of the survey basically gives you the details of the world economy and the status of the Indian economy. What is the future for the world economy? What is the future for the Indian economy? So, basically the chapter 1 is a kind of introduction about the state of economy at the global and at the domestic level. So, see, so first of all, we will talk about the world economic overview. ये पुरे वोल्ड में क्या चल रहा है? ये क्या? इसको समजने के पहले, let me give you a brief introduction की हो क्या रहा है, ये पुरे एक होड में? कर अब 2020 से देखोगे, when the pandemic hit the world, उसके बाथ से एक पे एक problem आरहा है, and the problem is not about to end. The problems are coming and coming, and this is happening for the first time. Survey basically, it says that this is happening for the first time. This is happening for the first time. इसके पहले भी बहुत सारे economic problems आइत है, which the world faced. भी असादान, अब आन्टी कि बटिँता है, from the 1990s, यहे सब द़ेवाब तब कि यहे सब देखे, and the Asian financial crisis, वहृत भड़ी अभ इप द़ेवाब यहे, In 2008, this Global Financial Crisis came to mind. अब यहे द़ी एक मी पहात का औ़ब आप उstones पीटे करईसी लेक है, in India, in 1991, during all this time gap was there. for example, in 1991 the indian economy crisis came. In 1997 the asian financial crisis came. In 2008 the global financial crisis came. But between all these crisis there was a time lag. So the time lag that is there, economy has a lot of time to recover from that. But this is for the first time that all the crisis are coming without the any time gap. तो आप देखे 2020 में the world was hit by the pandemic. 2020 में the world was hit by a black swine event इसी को कहते है black swine event का मतलग, the event which happens very rarely and when it happens it destroys everything so the pandemic struck the world in the year 2020 and it was considered as a black swine event आपको पता होगा पूरे दून्या में लोक्डान लग चुका था every economy was come to a shutdown and there was no growth or in fact India's economy आप पूरे गलोबर लेवल की economy rather than to expand वो पूरी economy contract की है so 2020 में पहला चलज आया पूरे world economy को that the pandemic hit the entire world. then came in 2022 the conflict in Europe so in 2020 when the pandemic came economy contracted growth गुरोथ लुक्चुका था now the economy was about to recover so see this is the increasing rate of the economy the economy is about to recover the loss we were trying to recover the income loss we were trying to recover the unemployment now again the people are getting employed so all these things were happening and in the midst of that the next big crisis came was the Russia-Ukraine war so Russia-Ukraine war आया और जो economy इंक्रीज करी राता the baby was about to walk again the baby was hit so again the world economy started to come to a stagnation and some economy started to decline 2020 conflict in Europe जब हुआ तो आपको पता है इसके impact क्या हुआ इसका सबसे बरा impact था inflation inflation का मतलब क्या होता है basic things का दाम बरना for example, spend का दाम बरना this white digital board का दाम बरना this is inflation तो जब ये वार हूँआ तो आपको पता होगा की जो गलोबल एनरजी प्राइसिस है जो नाचुरल गास की दाम है जो पेट्रोल का दाम है all those prices shut up साती सात वरतिलाईजास का क्राइसिस साती सात फुट सेक्यरूटी आपको पता वीट प्रोडक्षन वीट वीट क्राइसिस होगया था many countries were dependent on the wheat which were imported from Russia and Ukraine उःके ख़ए गूद प्रोडक्षन लूब आस्पेक तेच अमजेगे कियोग आपको सब इसिस? इक एक कर के सब को अस्पक समजेंगे तीके क्यो इंफ्रेशिन बड़ा and what for the factors and other things बड़ अभी आप एक में ब्रीफ इंट्रोडक्शन देरा हो किस तरीके से world economy में एक एक crisis आया और जिसका cumulative impact अभी देखने को बहुत बड़ा मिला है तीके सो 2020 में pandemic आया तो जो सपलाई है वो कम है और जो demand है वो जाडा है तो उसे क्या होगा तो the cost of this pen will go up तो आप किस तरीके से inflation को लोगोगे आप लोगो के पस पैसा ही मतरखो अगर लोगो के पस पैसा आप कम कर दोगे आप economy में पैसा कम कर दोगे तो people will not be able to demand if i was earning 10,000 and now i am earning 500 then i will be consuming less i will be demanding less तो inflation कम होगा इसी लिये तुरे दून्या के सारे central banks ने interest rate को hike करना start किया और इसकी बजे से inflation or interest rate तो global inflation was increasing इसको tackle करने के लिए interest rate को बरहना start किया और इसकी बजे से the growth started to stagnate तो जैसे ही आपका interest rate बरता है जब लोगो के लिए पैसा लेना मुष्किल होगाता है for example आप समजो आप जारेव गर करीते and you have to take a loan of 50 lakhs आपकी अपर पहले interest rate लगाता 5% तो आपको लगा थीक है i will be giving 5% of interest rate so that is affordable to me but now the central bank has raised the interest rate to some extent now it has got double so in that case you might cancel your plan to buy a house आपको इसे क्या होगा अगर house की demand कम होगाएगी तो new houses come बनेगे अगर new houses come बनेगे तो growth कम होगा यही होता है जब interest rate को increase की आजाता है तो जब interest rate को decrease की आजाता है पैसा लेना असान होगाता है तो जब आजाता होगाता है तो लोग पैसा जाडा लेते है और अगर लोग जाडा पैसा लेएगे तो आप ने गारी कर दोगे आप उस सस्टे EMI पे नया आप आईख बुक लोगे आप house कर दोगे यह जीप money तो वनेवे देखे देखाएगे अगर आप आजाडा लोग लोग रहेballे खोगे और घरा हप कर रहें और जो दोगाड़ा मेवे तोवर देखे खीगर रहाआगे आप बाहर मेंगा कनपिड़़ तोगी रहा है कि अईड़मिय को थी तो लोगक बास से ओँ रहा ही इंपैशिन को रोकने के लिए गलोबली हरे एक बाग ते इंप्रेश प्रेट हाँ किया उसकी वजे से आज ग्रोथ पे उपर काफी जादा इंपाक देखने को मिल रहा है तो यही सरभे कहता है कि दिस is the continuous problem which hold economy spacing one problem is going to settle down, the another problem is coming up the second problem settles down, the third problem comes up and this is happening for the first time कि इतने सारे problems एक सात मिल के सारे इकोनमी के उपर इंपाक पहचा रहे है तीके, तो now this is the brief introduction about what is happening at the world stage now इसको एके कर के समजते हैं, इंदेख समजते हैं प्रिलम्स के परस्प्रक्टिफ से कि कैसे इंप्रेश्टेद को बहने से in fact growth stagnate होगा किस तरीके से पान्डमिक का इंपाक इंपाक इंपाक इंपाक इंपाक इंपाक देखने को मिले तीके, सो all those things we will be understanding. So see, first the introduction. So in introduction क्या कहता है सरवे, I have given a summary of that. तो आपको पुड़ा इंप्रटक्चन पहडने के सबड़ते है, यही एसेंस कह रहा है, तीके, तो आप दस इसको समझे क्या कहता है, in production में. In past the global economic shocks did occur but not at the same time. Example, world war, spanish flu, great depression, 2008 global financial crisis. तो आसे बहुत सब यहें तुए है, but इंके बीच में ताईं गआप था, वोता ना कि यहार सफ्रिंग from one disease you recover from that and after 10 years suppose you have got another disease, then you have enough time so that your body can gain immunity from that but suppose you have been infected by 3-4 diseases at one point of time your body's immunity will collapse because you don't have the time to recover from that and this is what happened. आब यहां देखे, these incidents of global economic turbulence were spaced out, बतदोनो की बीच में ताईं गआप था, allowing the economies, the breathing time to recover before preparing for the next challenge before preparing for the next challenge but this is not the case this time इस वर कोई ताईं गआप नहीं ता, इस लिए कोई भी एकोनमी के पास, लिकवर करने का एक सपेस नहीं मिला, और इसी की बजे से, आज एकोनमी क्रिसिस काफी जाडा बरी हो गए है. ना, जो हम ने क्रोलोगी बात की आप पान्डमिक, वोर, अर इंप्रे स्वेट काई करना, तो वही सरभे लिए जिसकस करता है, उसी मैनर में. वो तेस करोलोगी अग़े एवन्त किस तरीके से, उझुक। तब छबरा, Jun. सो दस्रोपे के एकोन्मी होगा ये मारी विस्तिल ये दिस ग्रोएग, बाद दे रेट अप इंक्रीज ये दिख्लाएग तो तो तो तो तो स्लोडाएग, स्लोडाएग is again not a good thing but not very much problematic तो तो तो तो खुन्प्रक्षन, तो पहले आपारे एकोन्मी ग्रोग करा तो 6% से अपसोलुट तमस में हमारा जीडीपी कोंट्रक्त किया, वहापे अपसोलुट तमस में हमारा जीडीपी इंक्रीज किया बगड जो इंक्रीज करने का रेट है, वो दिकलाएग किया तो पहले भीज से बडहाग, अप दस से बडहाग, अप ख़ुन्प्रक्षन में भहुट, पहले एकोन्मी सोर्ब है दा, अब एकोन्मि कितना गड़के होगया, असती रुपए, आब economy कितना गतके हो गया आस्टी डुपे तो absolute value में economy खचन्ट्रकट्ःरता है तो this is the first difference, जिस طर आप सब को confused नहीं करना है वचनेवा you hear these terms, you should be clear आप को सब दिखरे चब कोई आप दिखॉना ? prolongs & economy खचन्ट्रक्ट्ःर्ट्ःर्ट्ःर्ठु अफहात इकणेपादि में रहाने सब यह दर्चाया आपके ख्रत्ट में आपको साप ओगादाई दर यहान बहुत्चा अब विखन्टें के चाजनाग इक्चाके लागदाई आब घरेग करत्टे क्सदाउ punishment. नाँ थे अपका हो गया पहला इवशंद सेचम कर � sandha khvach. आदा इन्चा पहला एवन्थ ज़ेम एक चलता। आद श्व्या जोगा। आप बआआट और ब्यग ब्रक्सूव आब ज़ेम आ वोगाषत्य उआदाई कच्यर धेशीखा अस्णाऊद। अापहम सरुवगर पने सुबटमद के सुप्यट़ुईों,अफको च्याईा फरीरने मुत्तरुन,सुबटमद के सुप्यट़ुईन भी अब आप भाईखा पुट्नान। अंघे लोगडान्श गी बज़े सप्यठ्यें द्स्ध्छो उता कोई चीस चाइना में बन रहा है उसके बआत को जारे सिन्गाखवोर में उसके बात गरा है अव चारा इन दें तो और वालेझी efficiently अवडिषन करे क्यम कहाम वैज्धेश लें। तो हरे एक प्रड़क कैसी सप्रड़ई चूनोता, यो आप तर गलोबलाईशेचन तो सप्रड़़ई has been scattered across the globe, तो आपको पता है, कि आई पाप्पल का, तेकनोलगी वहाँ से आता है, उसको असेmbolल क्या जाता है, चाईना में, तो प्रन्टमी के समे हुए क्या, कि पूरी गलोबल एकोन्मी आपकी तब परी है, the global economy has come to a halt. तर जगा लोबड़ूंस लगे हुए है, एकोन्मी में कुछ गुरोथ रही है, unemployment बर रही है, लोबो का इंकम, सालरी हाएक नहीं हो रहा है, तीके, तो इस की वजे से क्या होगा, economy काफी जाता, problem में आचाएगा, as a problems के समे है, to tackle such problems, to tackle such problems, government and the central banks, जो की इंडिया में होगा हो लोग, RBI. तीके, to tackle such problems, government and the central bank, कलेक्तिवली कम तुगेधर, to revive the state of economy. तीके, सु जब पन्द्मिक आया, economy कुन्फ्रक्त किया, तो इस से आप बचेगे कैसे, इसके बचने के लिए कों दो लोग बचाएगा, economy को, the government and the central bank, that is the RBI. तीस पीपल आप दिस्पोन्षिबल, for the economy, these people comes into action. तुई दुनिया में, not only about India, रहें कन्त्री के, government and central bank दोनो मिलके, एक साथ, economy को, revive को, कैसे करेंगे? तो, government क्या करती है? Government adopts a fiscal policy. आपको पते, government का, fiscal policy होता है, और, central banks का एक, monetary policy होता है. तीके, so the government adopts a fiscal policy. अप मेशा सोनगल, fiscal deficit इतना हो गया, fiscal deficit इतना हो ना चाही है, fiscal deficit को हमें कट करना है, so this is known as a fiscal policy. And who adopts a fiscal policy, it is the government. और, जो monetary policy होता है, आप देखोगे, monetary policy कमीटी है, और आपो दे, decide करती है, and other things like that. आप मेशा सोनगल, monetary policy कमीटी होता है, it is decided by the central bank. तो, इनहीं दोनो, policy की बजज़ से, आप अपने, economy को, revive कर सकतें, आप अपने, economy को, revive कर सकतें. तो पहने समझते है, fiscal policy के बारे में, let us understand, fiscal policy क्या होता है. तो, fiscal policy को, simple में में समझों, आपको पता सरकार करझ करती है, सरकार नैने, schemes लाती है, सरकार, infrastructure creation कर वाती है, रोड, railway, highways बनाती है, ऐर्द बच पनाती है, डब बचनी लाती है. तो यसके, तो, यसके लिसकार को पैसा चाहीहे होता है, थिके, कुझ सरकार के पस पैसा की तोता है, कुछ सर्कार लोन लेती है तो फोर इक्छामपल सर्कार पहले सुर पे खरज कर रही थी देखे, पहले सर्कार वर स्पन्टीं 100 रुपीज बट नाउ दे एक्वान मी क्राइसिस हैस कब और जब एक्वान मी क्राइसिस आगा तो से क्या वा आपकी एक्वान मी क्रो करेगी बाई दे सपोर्ट अप गवर्वेंट तो एनी ताईं गवर्वेंट क्राइसिस जैन्रली देगवर्वेंट एडवाप्स एक्वानश्टरी पहले स्पन्ट्टीं और इसी का उल्टा होता है आपके पास तो ख़्ट्राक्ष्टरी फिस्खल पोलिसी में जब सलतार को लगता है कि आलीट प्रवेड पीपल आर एंवेस्टिं लोग प्रवेड पीपल रिलायन सब भानी ये सब लोग इन्वेस करी रहें तो हम क्यो इन्वेस करे फिप तो उस क्योईस में तेदवोमनग सटान्स तो शपन्ड़ लगता है दवोमनग सटान्स तो सपन्ड़ा है ये सब आपके आपके पाशाता है थी वाँ प्रवक सब पुटिग अन अप लगता है परसाव फिस्धा है तो वरी ल्दे कोईसा वेड़ आपके but during this whole pandemic, this policy was adopted. Expansory fiscal policy. This is the same thing. RBI also does the same. RBI also does the same. And we call the policy of the RBI monetary policy. We will see the monetary policy in the future. But what is the monetary policy? Monetary policy, not police. Monetary policy. So RBI, RBI is the only institution in India which has the power to pump the liquidity into the economy. Means, in this whole economy, if someone will print money and put it in the economy, then it is only the RBI. Means what kind of liquidity you need? That is decided by RBI. How much money will be left in the economy? This is decided by RBI. Because what is the work of RBI? If we will see, the work of RBI is to maintain macroeconomic stability. Basically to maintain inflation. So to maintain inflation, the special body of RBI is monetary policy committee. So this is the work of the monetary policy committee. That inflation has to be controlled between 2-6%. So RBI is a very big body. It has a small body which we call monetary policy committee. This monetary policy committee has only one work to ensure that inflation in India is 2-6%. Lower limit is 2% and 6% is upper limit. This inflation has to be controlled by RBI monetary policy committee. Because inflation is a very problematic thing. It is not the problem for rich people. But it is a problem for the poor people. Because when the price of onion increases, then a poor person cannot buy it. So that's why inflation acts like a tax on the poor. Inflation acts like a tax on the poor. So inflation doesn't matter to rich people. It is the problem of the poor people. This is why controlling inflation is a very important thing. That's why monetary policy committee has the most important work to control inflation between 2-6%. And till inflation is in it, then focus on growth. That is GDP. So till inflation is between 2-6%, then it's okay. Then monetary policy committee focuses on its second priority. That is GDP. Now let's take one case. First, inflation is at 3%. India's inflation is 3%. Then is monetary policy committee's work being fulfilled? It has to be in between 2-6%. Inflation is 3%. Well and good, there is no problem with that. So now the monetary policy committee focuses on its second priority area. That is GDP. Till inflation is in control, then it can focus on its second priority. Because inflation is in its tolerance band, then the MPC focuses on its second priority. Its second priority, that is growth, GDP. Now it will focus on its second priority, that is GDP. So now GDP has to be increased. Because GDP is increasing, that's a good thing. Every country wants to increase its GDP. So on the monetary policy committee, its priority is to increase growth. Because inflation is in control, then it can increase growth. It has no problem, then how will growth be increased? How will growth increase? For example, I am an industrialist. I want to build a new factory. Suppose I want to build a factory for my car. You know that every industrialist wants loan. He will have to take a loan from the bank. Now if I was getting a loan from the bank, then I was getting a loan of 5%. And now I am getting a loan of 2%. That is a very good thing for me. I am getting a loan of 2%. In that case, I will be incentivized to build a new factory. If the interest rate in the market is lower, then it is beneficial for an industrialist. Earlier I was getting a loan of 5%, now I am getting a loan of 2%. So I will build a new factory, I don't have any problem. Now let's take your exam. You had to buy a new expensive phone. You had to pay the EMI of 7%. Now the banks have reduced the interest rate on EMI. Now you have to pay the cable of 5%. Now you will say, okay. That is under my pocket. I can buy it. So whenever the interest rate in the economy comes down, whenever the money becomes cheap, whenever the loans become cheaper, then in that case, the investment made by industrialists, the demand made by the consumers, that also increases. So that is why, when RBI Monetary Policy Committee stays under inflation control, then RBI Monetary Policy Committee reduces its interest rate, which we technically call Reporate. Reporate decreases. Means RBI, Reporate means basically that RBI loans to banks in small banks. Because we don't get loans from RBI, we get loans from banks. It is easy to get loans for banks. How will banks get loans from RBI? So if banks are getting loans cheap, then banks will also see loans cheap. So this is what Monetary Policy Committee does. When its inflation is under control, it focuses on GDP. And when it has to focus on GDP, it has to ensure that money availability for the public increases. And for that, it has to lower its reporate. That means the amount which it charges from the bank to lend the money, it reduces so that banks can lend more and more money to the public, to the industries, to the consumers like you and me. So this is how Monetary Policy Committee works. So Monetary Policy Committee's most important priority is inflation. When inflation is under control, then it will go here. When you imagine the whole pandemic, our inflation was under this. Because why inflation? People are not demanding. Why inflation will increase? Generally our retail inflation CPI, which is our consumer price index CPI, there are two types of inflation CPI or WPI. We target Monetary Policy Committee CPI, consumer price. There is one consumer price, and there is one wholesaler price. So CPI is what we have to pay exactly. For example, you go and buy a pen. So we will buy one pen, but wholesaler buys 100 pens. So CPI is a different thing. It measures the price on the wholesale level. And CPI basically measures the price on the consumers' level. So Monetary Policy Committee's inflation, which inflation is it? So it is consumer price inflation combined. So inflation because it was under control, RBI has constantly declined its repo rate. So during the whole pandemic, we will see in the future, how Monetary Policy Committee has declined its repo rate. This is what we call Accommodative Monetary Policy. This is what we call Accommodative Monetary Policy. Ok. Accommodative Monetary Policy, when RBI reduces its repo rate and starts to increase the availability of money in the economy. So during the pandemic, this was the situation. There was no problem. That is why we recovered growth. The rate of repo rate was greatly declined. And in the Indian Indies, globally, every country did that. So the economy was very expensive. So this is known as Monetary Policy. Now if inflation is the same as if you consider that your 6% your inflation will be 9%. Now if your inflation is 9%, then what is the level of inflation? And if the level of inflation is more than the level of tolerance, same policy committee ko pade be problem agya hai because usko sapse pal inflation control karna hai so now the MPC not focus on GDP now MPC wants to bring this below 6% it ho MPC ka kami hai wahan hi kaami kar par hai to throw fail hoga apne kama se so now the MPC puts all its energy to control the inflation below 6% hum inflation control karne ke liy kya sk emotions साचा लेना महंगा कर देगी अपको EMI पाच पे था, अपको EMI दसपने मिलेगा अपको प्रे फोल कप्लन ख़न्सल कर दो इंटर्स्टीट अप इंटर्स्टीट कर प्लन्खंख्ल देगा इक्ण्वी में पाचा कम होजाएगा तुस केस में क्या होगा rate increase the interest rate increase the reporate to take bank of RBI more expensive तो जब तक inflation control में है, तब वो GDP पोखस करती है लिकिन जैसे inflation उपर जाता है, तो RBI monetary policy committee को पहले inflation control करना परेगा देन इद कन गो तो think about GDP. तो इसे देखो problem क्या होता है जैसे ही आप 6% से कम करने के लिए क्या करते हो, तो आप क्या करोगे तो इसका एक problem होता है, तिक आप का inflation control में आ रहा है, लिकिन एक problem यह देखने को मिलेगा कि जब एक industrialist, इंट्रस्टी लगाने का सोच रहा था, लिकिन आप आप आप आप इंट्रस्टीट महंगा कर दिया है, तो बोला इतना मेंगा तो लगाने कर दे नहीं सकते है, अब आब आप प्रोफिट क्या होगा, अगर वितना EMI देते रहेंगे, लोन ता एंट्रस देते रहेंगे, तो उस केस में the industrialist cancel the plan of building new industry. तो इस से एक problem यह होता है, कि जैसे यह रेप रेप रेप होता है, although my inflation comes under control, my GDP suffers. My GDP suffers. GDP बैंपाक परतता है. तुकि GDP क्या है, ग्रोथ कम अतम नहीं खक्फी काना, ग्रोथ कम अतम लोगो का जाड़ा दिमान करना, लेकिन लोग अप दिमान करेंगे नहीं, because बोख मेंगा होगे है पैसा लेना, तुकि रेप तुकि तुर दुत मेंदिक जाड़ा, भी सादी करना दिम तुमनिखा और सब लगा। तुमनी च्छ की सब में लोग और सब की बहूँत सब वोप भोग, तु आप यही भोराखा क्ची तुर है. तुकि जो जो वोग ठीखा, the whole fiscal policy and monetary policy force the fiscal policy's first priority target is the monetary policy is first priority is inflation the second priority is growth but the fiscal policy is more focused on growth the more focus is on growth the government wants GDP is better the monetary policy committee wants inflation control so they work together fiscal policy and monetary policy so no problem when economy comes so globally governments and banks have these two tools to revive economy so government adjusts its fiscal policy to increase growth so government wants to spend more during crisis because government's priority is growth but if RBI thinks that growth is increasing then RBI takes that extra money from market so we have to understand this because we will study this so fiscal policy is decided by government what is fiscal policy? it is the policy by which government decides how much money it has to take and how much money it has to spend so basically it is about how much government intends to spend what is the focus? GDP let's come to monetary policy who decides monetary policy committee what is the target inflation? 2-6% if the inflation is under control then it thinks about GDP so during the time of crisis generally every government adopts or central bank any economy adopts these kind of two policies now let's come back to our pdf so what was it? first let's understand that by massive fiscal stimuli and accommodative monetary policy undertaken since those are plus since 2020 every country every government was trying to put more money into the economy so expansionary fiscal policy every central bank was reducing the accommodative monetary policy because inflation was not used people were not demanding so that is why from both the things money was being invested government was also investing army had also made it cheaper so because of this a lot of money came into the economy growth was increasing but what will happen? when so much money comes then there will be pressure on inflation first people had 100 rupees now everyone has 500 rupees so everyone is demanding inflation was getting more pressure it was not coming it was coming but then what happened? there was a conflict in 2022 so the inflation due to this policy it was increasing it got stranded because of the conflict because of the conflict because of the energy price and fertilizer so the pressure on inflation now it got pumped up now we got a lot of pressure on inflation so this stranded the inflationary pressure which inflationary pressure created because of this thing after the pandemic and it got a further push because of this conflict because of this inflation increased inflation see every country is becoming inflation just see the US see the US inflation now it is about 10% now it has come to decline similarly you see in India or emerging market economies see the inflation of every country was constantly increasing okay so inflation growth a huge challenge was seen in 2022 because after the inflation after the pandemic when there was a conflict inflation was brought to a new level so now to stop inflation to increase the growth to increase the inflation because of this the inflation started to increase so the most important target in 2022 was to stop inflation growth increased inflation decreased we have come so what will you have to do to reduce inflation you will have to increase your interest rate you will have to reduce your interest rate so what will you have to do to increase your interest rate and what will you have to do the government was giving a fiscal push you were putting more money you will reduce it so the same thing was happening led by so globally so globally inflation was increasing so globally every bank US Federal Reserve central banks have been hiking the policy rate increasing the reporate and rolling back the liquidity that is to remove liquidity from the economy this is known as contractory monetary policy we had seen an accommodative monetary policy when the money is depleted when the money is depleted now that inflation is full you are increasing the reporate you have to suck the liquidity from the economy so what will you have to do contractory monetary policy the pace of this tightening cycle has been rapid with a lot of pace rate you see this is US Federal Reserve i.e. reporate we don't call it reporate there but we have to believe in it so what happened when the pandemic came when the pandemic came the reporate happened you have to give it in a cheap way so you have to remove the reporate after that you keep the reporate here but what happened here what is happening in February 2022 there is a war here and along with that you have put a lot of money in front of the pandemic so now people are demanding because people have not spent during the pandemic so people had some savings and they also had money for free so now people are demanding because of this they say pent-up demand pent-up demand is only those demands which we didn't demand during the pandemic we were staying in the home we wanted to go to a shop to buy a phone we cancelled the plan we thought that after the pandemic we will go and buy so all those demands were accumulated and once the lockdown ended once the economy was opening up all those demands started to happen so this is called pent-up demand so because of inflation and because of the war inflation ran faster that is why the reporate you are constantly seeing is increasing when are we talking about the US US Fed, US Central Bank globally every bank has done the same so the US also did the same okay so now its impact what will happen, you understand this comes for the problems if the US has increased the inflation so all those informations all those logic you should understand because then only you will be able to answer your question in prelims so let us see now US Fed has raised the interest rate by 425 basis points 100 basis points is equal to 1% so 425 is 4.25% so 4.25% so if the interest rate was 2% now 2% plus 4.25% that means 6.25% of the interest rate is expensive since March 2022 okay now what will be the impact what will be the impact so we understand the points you will get the points in the survey but first understand so what I am trying to understand what I am trying to tell you is that what happens when US Fed that is the US central bank raises its interest rate okay what happens when US Fed increases its interest rate so let us take an example what was this before this is your US and this is your India okay so in US your interest rate first understand and in India your interest rate 6% means if you go to any US bank and collect money you will get 4% interest and if you go to India and if you get your money deposited in India you will get a money or interest of 6% for you this is the interest rate generally developing countries have more interest rate as compared to developed countries generally but what happened during the pandemic we saw that US increased its interest rate and increased it at a very high rate so 4% is 8% it is just an example these are not exact figures so US's first interest rate was 4% now it has increased to 8% meaning 8% lending rate and deposit rate they are the same now if you go to any US bank and deposit money you will get 8% and in India also increased the deposit rate in India also increased 6% but the rate to increase in India was not as high as in US because US's inflation had increased because US must have known that during the pandemic because US is a very advanced economy they don't have the problem of money because of the amount of dollars as much as India as India had a package India had invested a lot of money during the pandemic but US had invested a lot so US had a lot of inflation as compared to India so US central bank increased the interest rate at a very high rate as compared to India so India also increased the interest rate but in India it was 7.5% ok so these are the new interest rate now if you go because to stop inflation inflation is increasing in the world so the central bank of the world is hiking its reporate but in US because the inflation was very high so US has hiked its reporate at a very high rate as compared to India so India also hiked it at 7.5% now just imagine suppose you are an investor you have a lot of money where will you invest suppose you invested in India because in India you were getting 6% interest rate so if you don't invest in India then you will get more money because US was getting 4% but now what has happened time has changed now US is paying you 8% and India is only paying you 7.5% so generally what happens we call it interest rate differential whenever in US because US is the most advanced economy US is considered as the one of the country where your investment is the most safe if you invest in the safest way then you should invest in US because the probability that US economy will collapse is much more lower than the probability of any other economies collapsing generally any investor prefers to invest in US but because developing economy gives more interest then a lot of people invest because there is more interest so let's take some risk so countries will collapse but still we are getting more interest but generally any investor prefers investing in US because that is the most safest country to invest so what happens now because the US has increased the rate so this is what they call foreign portfolio investors they have their money where to invest so yesterday you must have invested in India yesterday you must have invested in Bangladesh then you must have invested in Brazil but now whenever in US the best country to invest now it has increased its rate to 8% so all this money all this money was invested in India was invested in Bangladesh was invested in Brazil where to invest all this money in US all those monies which they have invested abroad where to invest all this money because US is getting 8% interest they are very happy the best country the safest country they are giving interest so whenever US is going to increase its interest so this is the problem developing countries these FPI's when they keep sending this money they will take all this money from here to here so the exam will suggest that if US is going to increase its interest so what is the problem one problem you understood that all those monies which were invested they will take all this money so what will be the impact this is where the question will come what is the impact on the economy so the survey discussed this so let us understand the first impact the first impact what happens to the what happens to the bond yield what happens to the bond yield what is your impact impact so what is the bond yield what is a bond bond is an instrument a kind of paper which is used to raise money for example this is reliance and reliance feels that we need money so reliance can either go to the bank and ask for money to give me money or it can issue bonds these are the bonds these are nothing but 5 instruments in this it happens that if you give me 100 rupees after 1 year we will give Rs. 110 according to the interest rate so suppose I am there I bought a bond of 100 rupees and I said okay give me a bond of 100 rupees so what did reliance do he sold you a bond of 100 rupees after 1 year if you show this bond how much will reliance give you so what is your rupees this is called coupon rate this is called coupon rate so many people come from outside and buy such bonds many people come from outside and buy such bonds but what is the problem now what the US has done you have increased the interest rate so some fool will invest in India so what will I do you had a bond with me after 5 months I have a bond I will get Rs. 110 after 1 year but suppose I decide in 5 months to sell this bond so what will I do I will sell the bond I will sell the bond because I have got a better way to invest I will go to the US market and invest so I will sell the bond before 1 year so there will be many investors who will start selling this bond so what will happen will the supply of the bond increase will the supply of the bond increase so supply if it increases then the price increases so how much was the price of the bond Rs. 100 so what did you say I had a bond of Rs. 100 I said buy it in Rs. 95 so I sold this bond in Rs. 95 so supply of the bond so what will happen the price of the bond will go down the price of the bond will go down I sold the bond supply increased so the price will decrease for example this person has bought the bond this person bought this bond so how much was the price in Rs. 95 because supply is more so the price will go down so in Rs. 95 this person bought the bond so how much was the bond in Rs. 95 but now this bond because the initial price of the bond is still Rs. 100 because he has issued the bond but we were lucky that we got the bond in Rs. 95 so how much will we get after 1 year after 1 year how much I will get that is already decided so how much will we get after 1 year after 1 year so how much will we get in Rs. 110 because this bond is a fixed thing in secondary market you are exchanging so I bought it in Rs. 95 but the bond is still the same so that investor took a loss of Rs. 5 because he had got a good investment so he left he sold it because of some reason I was lucky I got the bond at Rs. 95 so now after 1 year because reliance is committed to pay Rs. 110 to any person who has the bond so how much will I get in Rs. 110 so how much interest I got I got Rs. 15 so this is known as yield this is known as bond yield so there is a difference between bond coupon rate and bond yield bond coupon rate is decided by the company and bond yield is decided by the market force that is decided by the supply and demand so this is decided in the primary market for example the first time I bought the bond after that I sold it to someone that is happening in secondary market so secondary market where 2 people are transacting not the company is transacting now deal is decided over there so bond yield can increase or decrease so what happened you see all people sold the bond so all people sold the bond so what will happen to bond yield will increase so this same thing happened with government bonds this same thing happened with government bonds how government takes this from market by issuing of the bonds so by issuing of the bonds the government takes the money so government bonds so what happened to government bonds yield increased because now people sold the bonds and will go to US so when the yield increases you know what the problem is the cost of borrowing the cost of borrowing to the government also increases the cost of the borrowing also increases because if your yield earlier how much was the profit in the last case 10% now how much is the yield now when people are getting profit of 15% now if the government has to issue a new bond to raise extra money then the government will have to give more than 15% only then no one will invest in your bond right so now when the yield increases then the new bonds issue in that the coupon rate will have to be more than this only then people will invest in your bond otherwise if you assume I issued a bond yesterday I issued 12% in the coupon rate then why will no one invest in my bond the old bond already has 15% return so if I have to issue my new bond and collect the money then I will have to give 18% you already had 15% then you invest in my bond now you will give 17% so because of this the cost of borrowing for the government increases so this is one of the very very important thing for your prelims whenever the US Fed increases the bond yield in India increases and because of that the cost of borrowing also increases so this is the first outcome that I got now comes the second thing so the first thing is what will be the impact on the bond yield now comes the second thing now assume what will happen these people want to go here so what will they invest in India in the form of rupees first I am an investor I invested 100 rupees in India I have invested 100 rupees now I want to go back to the US I want to invest there and give me my dollar suppose 1 rupee 1 dollar is equal to 50 rupees so I will take 2 dollar on 100 rupees I will go to the SBI and say give me my dollar, keep it on 100 rupees because I want to go to the US so because of this the demand of the dollar will increase because every investor will come and say keep these rupees give me my dollar give me my dollar so every investor will start to ask for dollar to go to the US so the demand of dollar will increase and when the demand of dollar will increase the rupee will depreciate so the rupee will depreciate rupee will depreciate so 1 dollar is equal to 50 1 dollar is equal to 55 or so because the demand of dollar increases so whenever the US Fed increases demand of the dollar also increases and the third impact is because of rupee depreciation the current account deficit we will read what is current account deficit now you just understand it as a summary because it is again an important topic so we will discuss it in a separate manner so current account deficit also increases because of other reasons also but one of the reason is when rupee depreciates your currency depreciates so your current account deficit also increases so these are the three things and one more thing the fourth thing is your inflation will increase so as you are depreciating your rupee let us take an example in economy everything nothing you have to remember everything you can deconstruct by using the right logic as we have seen how bond deal logic is used what is the inspiration for inflation let us understand it with logic how it will happen I will first assume I was importing 100 litres of oil I was importing 100 litres of oil from Saudi Arabia to India you know international transactions are in the dollar suppose 1 dollar is equal to 50 rupees and 1 liter is equal to 1 dollar 1 liter is equal to 1 dollar so how much India will have to give to import 100 litres we will have to give 100 dollars we will have to give 100 dollars 100 dollar means multiply 100 dollars with 50 rupees so this is done so this is done because we have seen how currency depreciates when people take money outside so now 1 dollar is equal to 60 rupees ok 1 dollar is equal to 60 rupees ok so now we will have to how much we will have to spend earlier India had to spend 100 dollars so how much of 100 dollars 5000 rupees 1 dollar is equal to 50 rupees so earlier we could have ordered oil by spending 5000 rupees now our currency has depreciated 1 dollar is equal to 60 rupees so how much India will have to spend again the 100 dollars only again 100 dollars but now 1 dollar is equal to 60 is equal to 6000 rupees ok so what happened for India now inflation will increase because now we have 6000 rupees so whenever your currency depreciates then your import becomes expensive so whenever the currency depreciates so the cost of import goes up ok but now what will happen to export when import becomes expensive so what will happen to export so this is clear whenever the currency depreciates the cost of import goes up so import cost becomes expensive but the opposite of this the cost of export goes down so import becomes difficult when the currency depreciates but it becomes easy to export why is this? first suppose we were exporting 100 dollars suppose India suppose for example this person lives in US and this person lives in India ok for example 100 dollars is equal to 50 rupees ok suppose this person has 100 dollars he has 100 dollars and he buys this pen suppose one pen is equal to 50 rupees one pen is equal to 50 rupees suppose he has 100 dollars he has 50 rupees so he will come to India he will convert his 100 dollars so how much will he convert and he will create 100 rupees so how much will he convert so how much money he can buy so that he can buy 100 rupees so he can buy 100 rupees so how much money he can buy now 100 rupees ok but suppose the currency depreciates one dollar is equal to 100 rupees let us see तब बदन तब ल़े रेके रहगे, अप करन्सी यब गबल देप्र शीएत गर ड़़े एक. तब अप यईंट्या में आइगा, उस तो, कित्ना मिलेगा, यईक दोलिज कोल तो सो. तो सो, अप पैंक अदाम कितना है, पचास, तो ना ही कन, रहीं 200 पैन्स, इंद्ुँखाचाद, इंद्ुखाचाद, अगर छ़ाद, लगागाचाद. तो ये कुछ सर्वे ने आपके बात किया है, राइट. तो ये देखों. तो दब U.S. Fed ने इंक्रीष क्या, तो तो तो तो प्यटल फ्लोज़ लिए तो सेप आप एं U.S. Markets. तेखें, this led to rising sovereign bond yields resulting in higher borrowing cost for the government. सही बात है. तो लिए लेथ से से सास्टे करन्ट से एदषारीक करन्टी से लोग प्यषा नेकाल के U.S. echo, it led to the depreciation of most currencies, साडे क्रन्टी से लोग प्यषा निकाल के U.S. पजारे, Because U.S. have seen a very steep way of acting for U.S. पहली बात टीमे लिए बात एक तोईगा है, So this has led to the widening of CAD, ौL deficit and increasing inflationary pressures in the net importing economies लआँ ळहाो, लँँ वोईकोंटीः इकोनेमी अखअईक्राद. लआँ वोईकोंटीः अन शबतबरarti is known as net importing economies. लआँ वोईकोनटीः लआँ वोईक्राद and monetary tightening has led to a slow down and gradual output. लआँ क्या झनी था? 2.íauٹ everywhere 3.and inflation 4.and to stop inflation 5.monetary policy 6.to tighten 7.how will impact come 8. growth 9.slowdown 9.AND growth output 10.now 10.you come 10 years bond deals 12.rath survey 13.in India 3.6 is 0.3 why is this happening because of monetary tightening fiscal tightening why do we have to do that to stop inflation and that has a negative impact on growth now apart from this there are some other small problems which the survey said other shockers first is trade protectionism in every country nationalism is increasing in India, in India, in India, in India in US, in America in every country nationalism is increasing every country is trying to restrict the trade globalization's goals are ending 2nd you know in China there are a lot of stringent lockdowns because of its 0 covid policy China is a big economy there will be global spillover effects that's what happened 3rd there is also social impact because of all these things education and people's learning opportunities have also been declined you will have to account for this for example 100 children were studying but because of the covid their family's income is over now only 80 people are studying 20 people are not studying what will happen in the future if you have a better economy then your economy is more contracted then what is measured now so these are the other shockers then it concludes in introduction it concludes what conclusion it gives on the world economy in the developed world inflationary pressures are abrating but they are still on higher side now inflation in 2022 in 2020 covid came in 2021 our growth was recovered in 2022 but the problem is inflation has increased for the whole year now in 2020 we have entered inflation has been controlled on a global level now inflation has gone far ahead now inflation is abating but they are still on higher side inflation is still revolving in 6% so it should be 2 to 6 but it is revolving in 6 it is still on upper limit but still it is on decline major central banks have reduced the pace of interest rates globally because inflation is coming so the interest rate the rate of interest rate has slowed down now it is strong employment data and lower inflation for december have raised the hope of US economy US economy is the most important economy so your employment data is good inflation is also in control similarly in Europe because you know in Europe because of conflict Europe will have an energy crisis because Europe has put sanctions now it is not taking the energy from Russia but Europe does not have that much cold in december in the US the cold in Europe during the winter period it did not happen that much so the crisis of energy did not happen in Europe so again it is a good point for the world economy however the possibility of escalation of war was a significant challenge to the global economic outlook but you still know as winter ends the probability of escalation is on rise so if this war is a spillover consider a NATO country because any time whenever the war happens the chances of miscalculations are also higher so tomorrow if there is any mistake any mistake any NATO member country if there is any mistake in the capital of Russia so you know that the chances of nuclear weapon the chances of conflict spilling over to the NATO countries so anything can happen so this is the biggest challenge in 2023 that how the war will stop the war will stop so after this the survey talks about the Indian economy so it talks about the Indian economy the same world economy that was going on the same in the Indian economy so how India has responded and how India has performed let us see the first graph of GDP so what happened in the GDP our economy was about 145 lakh crore 145 lakh crore in FY20 FY20 means 2019 to 2020 now the pandemic has come so what happened in the pandemic our economy contracted this is called contraction before it was 145 but now how much it has become about 135 lakh crore so our economy has decreased from 145 but in FY2022 that is in 2021-2022 what happened in our economy it recovered all this which we have lost so as much as we have lost now we have recovered all this ok so that is a good thing and come to the next year 2022-2023 our economy is still growing at 8-10% ok so so economic growth remains resilient in India which was lost in the economy we have recovered from that now so all these things were happening we were recovering we were on a good track but now what happened in Europe so due to that further impact so due to war in Europe we have seen high inflation so in India inflation started in January more than 6% so after January our inflation increased by more than 6% now the problem has been solved before that it was 5.5% but it was in January and from January till November inflation increased by more than 6% and the biggest headache for whom it will be for the Monetary Policy Committee because this is the work of it and it is failing in its own work so that is the problem so retail inflation that is the CPI has crept above the RBI's tolerance range from January 2022 to November 2020 what are the reasons for that rising international commodity price that means the energy price has increased second excessive heat and unseasonal same in that year our agriculture productivity was also very low because of the rainfall there was a lot of break so the rainfall had a lot of problems so because of that food production was also not that much that is why the price of agri-food commodities was also increasing third depreciation of rupee against US dollar how depreciation happens so it is very expensive to import oil so because of all these things inflation got shut up so what will the government do the government will cut its fiscal push the government will tighten the Monetary Policy this is what is happening so the government raised the reparates there is no problem the government cuts the excise and custom duties so the tax on the oil was reduced so that the price decreases and also restricted the exports so in agriculture there was a restriction so when you cannot export why are you stopping because you want the produced food grain to be sent in the domestic market not to be sent out so that the prices can be controlled by the government now so this is our sepai inflation see how sepai inflation is the upper limit of 6% right this 6% see it went up since when it has gone up from here it has to go up from february from january to february and it has always been above this 6% but now by december it has come down to 6% so now the inflation which was above 6% tolerance limit now it is coming under the control see the depreciation so how much is the depreciation in india 8.8% every country has depreciation and not only for india so every currency has depreciated but the survey says but the depreciation in india it is not that much as much as in other countries for example in south africa 3-4% so the survey says that it is not that much as much as in other countries so this is the graph survey we have discussed all this so if you have any problem go back and watch the video so that everything you can understand what we have discussed don't forget to like share and subscribe to our channel and press the bell icon to never miss an update