RRB NTPC Indian Economy Syllabus

What is the difference between demand-pull and cost-push inflation?

Demand-pull inflation occurs when aggregate demand exceeds supply; cost-push inflation occurs when rising production costs (wages, raw materials) push prices up.

What are the two main price indices used to measure inflation in India?

Wholesale Price Index (WPI), released by the Office of Economic Adviser, and Consumer Price Index (CPI), released by the NSO.

What is the inflation target set for the RBI under the flexible inflation targeting framework?

4% CPI inflation, with a tolerance band of +/- 2% (i.e., 2% to 6%).

What are the main functions of money?

Medium of exchange, measure of value (unit of account), store of value, and standard of deferred payments.

In which year was the Reserve Bank of India established and when was it nationalised?

Established on 1 April 1935; nationalised on 1 January 1949.

Who has the sole right to issue currency notes in India, and which note is issued by the government?

The RBI issues all currency notes except the one-rupee note (and coins), which are issued by the Government of India (Ministry of Finance).

What is the Repo Rate?

The rate at which the RBI lends short-term funds to commercial banks against government securities; raising it makes borrowing costlier and curbs inflation.

What is the difference between CRR and SLR?

CRR (Cash Reserve Ratio) is the share of deposits banks must keep as cash with the RBI; SLR (Statutory Liquidity Ratio) is the share they must keep in liquid assets like cash, gold or approved securities with themselves.

What is the Monetary Policy Committee (MPC) and how many members does it have?

A six-member committee headed by the RBI Governor that sets the policy repo rate to achieve the inflation target; three members are from the RBI and three are appointed by the government.

What is the Reverse Repo Rate?

The rate at which the RBI borrows money from commercial banks, absorbing excess liquidity from the system.

What is a Scheduled Bank?

A bank included in the Second Schedule of the RBI Act, 1934, meeting prescribed criteria; it is eligible for loans from the RBI and must maintain CRR.

What was the year of the first major nationalisation of banks in India and how many banks were nationalised?

1969; 14 major commercial banks were nationalised (6 more in 1980).

What is a Non-Performing Asset (NPA)?

A loan or advance for which the principal or interest payment remains overdue for 90 days or more.

What are 'Small Finance Banks' and 'Payments Banks'?

Differentiated banks licensed by RBI: Small Finance Banks lend to small/unserved borrowers; Payments Banks accept deposits (up to a limit) and offer payments/remittances but cannot lend or issue credit cards.

What is the Union Budget and under which Article of the Constitution is it presented?

The Annual Financial Statement of the government's estimated receipts and expenditure for a financial year, presented under Article 112 of the Constitution.

What is the difference between Revenue Budget and Capital Budget?

Revenue Budget covers revenue receipts and revenue expenditure (recurring); Capital Budget covers capital receipts and capital expenditure (asset creation/liabilities).

What is the Fiscal Deficit?

The excess of total government expenditure over total receipts excluding borrowings; it indicates the total borrowing requirement of the government.

What is the difference between direct and indirect taxes, with examples?

Direct taxes are levied on income/wealth and cannot be shifted (e.g., income tax, corporate tax); indirect taxes are levied on goods/services and can be shifted (e.g., GST, customs duty).

When was GST implemented in India and what type of tax is it?

1 July 2017; it is a destination-based, multi-stage indirect tax on the supply of goods and services, subsuming most central and state indirect taxes.

What is the difference between progressive, regressive and proportional taxes?

Progressive: rate rises as income rises (e.g., income tax); Regressive: burden falls more heavily on the poor; Proportional: same rate regardless of income.

What are the primary and secondary capital markets?

The primary market is where new securities are issued (e.g., IPOs); the secondary market is where existing securities are traded among investors (e.g., stock exchanges).

Which body regulates the securities and capital markets in India?

The Securities and Exchange Board of India (SEBI), established in 1988 and given statutory status in 1992.

What are the two major stock exchanges in India and their benchmark indices?

Bombay Stock Exchange (BSE) with the Sensex (30 stocks) and National Stock Exchange (NSE) with the Nifty 50.

What is the objective of the PM Jan Dhan Yojana (PMJDY)?

Launched in 2014 for financial inclusion—providing universal access to banking with zero-balance accounts, RuPay debit cards, overdraft facility and insurance cover.

What does the MGNREGA scheme guarantee?

At least 100 days of guaranteed wage employment in a financial year to every rural household whose adult members volunteer to do unskilled manual work.

What is the Pradhan Mantri Jan Arogya Yojana (Ayushman Bharat – PM-JAY)?

A health insurance scheme providing cover of up to Rs 5 lakh per family per year for secondary and tertiary hospitalisation to poor and vulnerable families.

What is the Balance of Payments (BoP)?

A systematic record of all economic transactions between residents of a country and the rest of the world in a year; it includes the current account and the capital account.

What is the difference between the current account and the capital account in the BoP?

The current account records trade in goods/services, income and transfers; the capital account records capital flows like foreign investment, loans and borrowings.

What is the difference between Balance of Trade and Balance of Payments?

Balance of Trade is only the difference between exports and imports of goods (visibles); Balance of Payments is broader, covering goods, services, income and capital flows.

What is the main purpose of the IMF and the World Bank, and where are they headquartered?

The IMF provides short-term assistance to correct BoP problems and ensure exchange-rate stability; the World Bank gives long-term loans for development. Both are headquartered in Washington, D.C.

In which year did India begin major economic reforms (LPG reforms) and what does LPG stand for?

1991; LPG stands for Liberalisation, Privatisation and Globalisation, initiated amid a balance of payments crisis under PM Narasimha Rao and FM Manmohan Singh.