Third Quarter Review of Monetary Policy 2009-10

What is Monetary Policy?

• Monetary policy is a tool used by the central bank to manage money supply in the economy in order to achieve a desirable growth. The central bank controls the money supply by increasing and decreasing the cost of money, the rate of interest.

What is Fiscal Policy? How is it different from Monetary Policy?

• The fiscal policy is used to monitor the economy. Two major tools of the fiscal policy are revenue spending and collection by government.

• So, while the monetary policy aims to stabilize the economy by controlling the money supply and interest rates, the fiscal policy uses government spending and taxation to achieve the same goal.

• A fiscal policy can be of three kinds — neutral, expansionary and contractionary.

When the revenue collection and spending of the government is equal it is called a neutral policy. An expansionary fiscal policy means higher government spending than tax collection, whereas, contractionary fiscal policy indicates lower spending than tax collections. While the former may lead to a budget deficit, the latter can result in budget surplus.

• During slowdown, the government uses expansionary fiscal policy and pumps in huge amount of money as stimulus packages and decreases the tax rates so that people have more money to spend. This is mainly to revive demand in the economy. On the contrary, when the economy becomes overheated and inflation goes up, the government increases the tax rates and decreases the spending to squeeze the money from the system.

• Central bank has two sets of tools - quantitative and qualitative - to signal easing or tight money conditions, depending on its policy objective.

While quantitative tools would include imposing cash reserve requirements (CRR) for banks, fixing the repo or reverse-repo rates, the bank rate and prescribing the level of statutory liquidity ratio (SLR) to signal the level of growth in the financial markets, pursuant with its growth objective for the economy.

Popular qualitative measures would include imposing margins on certain loans and moral suasion. However, RBI often tweaks only the repo or reverse-repo rates and CRR.

Changes in Third Quarter Review of Monetary Policy 2009-10:

• RBI has increased the cash reserve ratio (CRR) of scheduled banks by 75 basis points from 5.0 per cent to 5.75 per cent of their net demand and time liabilities.

• As a result of the increase in the CRR, about Rs. 36,000 crore of excess liquidity will be absorbed from the system.

• However key interest rates remain unchanged; Repo Rate (4.75%), Reverse Repo rate (3.25%), Bank Rate (6%).

Source: RBI, ET.

Latest Current Affairs Quiz 2010 - 48

1.      Who is the Chief Guest in the 61st Republic Day of India?

a)Mohammad Nasheed    b)Vladimar Putin   c)Nursultan Nazarbayev    d)Lee Myung-bak   e)none of these

2.      Who is the new National Security Advisor for India?

a)Meera Shankar    b)K Shankarnarayanan     c)P Chidambaram     d)Shiv Shankar Menon   e)none of these

3.      Which state government has proposed to make voting compulsory in all local bodies elections?

a)Andhra Pradesh    b)Tamilnadu    c)Gujarat    d)Rajasthan    e)Karnataka

4.      A/c to National Crime Records bureau, which state records most number of farm suicides during 2003-08?

a)Andhra Pradesh    b)Maharashtra     c)Karnataka   d)Madhya Pradesh   e)Bihar

5.      According to Central Government, how many educational institutes in India failed to meet the standards and norms set by the University Grants Commission (UGC)?

a)25   b)36    c)44   d)45   e)51

6.      Recently which country tested its biggest and most powerful rocket motor called S-200?

a)India    b)US   c)Russia    d)North Korea   e)Israel

7.      Who has been honoured as ‘Order of Diplomatic Service Merit’ in recognition of his contribution in promoting India-Korea bilateral relations?

a)Narayana Murthy    b)Shashi Tharoor   c)Venu srinivasan   d)Azim Premji   e)S Ramadorai

8.      Who is the President of Confederation of Indian Industry (CII)?

a)Shyamala Gopinath    b)Venu Srinivasan    c)Chandrajit Banerjee    d)Y V Reddy   e)R Seshasayee

9.      The six core industries registered a growth of ____ in December 2009 as against a growth of 0.7% in the same month of previous year?

a)3.1%    b)4.0%     c)5.5%   d)6.0%   e)none of these

10. ONGC is planning to set-up a bio-diesel plant at vodalarevu, to meet the energy requirements. Vodalarevu is in which state?

a)Andhra Pradesh    b)Karnataka    c)Tamilnadu   d)Kerala    e)none of these.

11. Recently Election Commission of India celebrated ___________?

a)Silver Jubilee   b)Golden Jubilee   c)Diamond Jubilee   d)Platinum jubilee  e)none

12. Who is the author of the book ‘The Rediscovering of India’?

a)Jawaharlal Nehru   b)Meghnath Desai    c)Mithi Mukherjee   d)V.S.Naipaul   e)Indira Gandhi

13. How many crores the Union government is expecting from the 3G auction?

a)10,000    b)20,000    c)28,000    d)35,000    e)40,000

14. The Under-19 Cricket world Cup 2010 is held at _______________?

a)India    b)Australia    c)New Zealand    d)South Africa   e)West Indies

15. How many persons were awarded for the first “Tagore Literature Awards 2009’?

a)one    b)two    c)three   d)five   e)eight

16. Recently government has decided to come up with the Whole Price Index (WPI) on the monthly basis. What is the base year for computing this data?

a)1993-94    b)2000-01    c)2004-05   d)2008-09   e)none of these

17. Which country unveiled a record of $1 trillion budget for the fiscal year 2010-11?

a)US   b)China    c)Japan    d)South Korea   e)UK

18. Who is the winner of CNN-IBN Indian of the Year 2009?

a)A R Rehman    b)Venkataraman Ramakrishnan    c)Jyothi Basu    d)Manmohan Singh   e)none of these

19. Lionel Messi is the FIFA World Player of year 2009. He belongs to which country?

a)Brazil    b)Germany    c)Spain    d)Argentina    e)Italy

20. Recently which Country’s Airlines has filed for bankruptcy?

a)US   b)UK   c)Germany   d)Germany   e)Japan

FDI in India 2009

Foreign Direct Investment:

Foreign Direct Investment occurs with the purchase of the “physical assets or a significant amount of ownership (stock) of a company in another country in order to gain a measure of management control” (Or) A foreign company having a stake in other Country’s Company.

Advantages of FDI in India:

The Indian government made several reforms in the economic policy of the country in the early 1990s. This helped in the liberalization and deregulation of the Indian economy and also opened the country's markets to foreign direct investment. 

As a result of this, huge amounts of foreign direct investment came into India through non- resident Indians, international companies, and various other foreign investors. The growth of FDI in India boosted the economic growth of the country.

Major advantages of FDI in India have been in terms of -

§   Increased capital flow.

§   Improved technology.

§   Management expertise.

§   Access to international markets.

Here is the limit of FDI inflows in various sectors in India:

1.         Defence: 26%.

2.         Insurance: 49%.

3.         PSU: 49%

4.         Single brand Retail: 51%.

5.         Telecom: 74%.

6.         Private Banking: 74%.

7.         Civil Aviation: 74%.

8.         Power: 100%.

9.         Education: 100%.

10.     Hospitals: 100%

11.     Trading Companies: 100%.

12.     Housing & Real Estate: 100%.

13.     Drugs & Pharmaceuticals: 100%.

14.     Roads, Highways, Ports & Harbors: 100%.

15.     Pollution Control: 100%.

16.     Call Centers & BPOs: 100%.

17.     Small scale industries: 100%.

18.     Oil Exploration: 100%.

19.     Hotel & Tourism: 100%.

According to UNCTAD's World Investment Report 2009, India is among the world's 15 largest FDI recipient in 2008.

According to UNCTAD's World Investment Prospects Survey 2009-11, India has slipped by one notch to third position as the most preferred foreign direct investment (FDI) country. However, "These two largest emerging economies (China and India) ranked numbers one and three, respectively, as the most preferred FDI locations.

United States of America tops the list of FDI inflows in the world followed by United Kingdom.

Padma Awards 2009

Padma Awards, the country’s highest civilian awards, are conferred in three categories, namely, Padma Vibhushan, Padma Bhushan and Padma Shri.  The awards are given in all disciplines/ fields of activities, viz. art, social work, public affairs, science and engineering, trade and industry, medicine, literature and education, sports, civil service, etc. 

‘Padma Vibhushan’ is awarded for exceptional and distinguished service.

‘Padma Bhushan’ for distinguished service of high order.

‘Padma Shri’ for distinguished service in any field.

 This year (2009) the President has approved 130 awards including 13 in the category of Foreigners/ NRIs/ PIOs. These comprise 6 Padma Vibhushan, 43 Padma Bhushan and 81 Padma Shri awards.  There are 17 ladies among the awardees.

List of Padma Vibhusan 2009 awardees:

1.      Shri Ebrahim Alkazi (Arts) from Delhi.

2.      Shri Umayalpuram K.Sivaraman (Arts) from Tamilnadu.

3.      Smt. Zohra Segal (Arts) from Delhi.

4.      Dr. Yaga Venugopal Reddy (Public Affairs) from Andhra Pradesh.

5.      Dr. Venkatraman Ramakrishnan (science & Engineering) from UK.

6.      Dr. Prathap Chandra Reddy (Trade & Industry) from Tamilnadu.

For complete list of Padma Bhusan & Padma Shri awardees download here.

Bank of India GK Paper 2010

1.      WTO summit held in- Geneva.

2.      Not related to Food items– Jute.

3.      Miss Earth 2009 – Larissa Ramos.

4.      Book by Chetan Bhagat – 2 states.

5.      Term related to Football – Cutback.

6.      Israel & Palestine war place – Gaza.

7.      India’s top export destination – UAE.

8.      RBI basis point is equal to – 1/100^th or 1%.

9.      Irina Bokova is associated with – UNESCO.

10. India buyed 200 tonnes of Gold from – IMF.

11. Stocks and bonds are trade – Capital Market.

12. Dorjee Khandu is CM of - Arunachal Pradesh.

13. Largest Producing Gas Company in India – RIL.

14. India is the 3^rd largest producer country in – Steel.

15. Service Tax is Shared by – Central Government.

16. First E-court in which state – Gujarat (Ahmedabad).

17. Dada Saheb Phalke award is given in the field – Films.

18. FTA released by – Ministry of Commerce & Industry.

19. Organization related to South Asia Nations – SAARC.

20. What is the target for fiscal deficit for 2010-11 – 5.5%.

21. What is the age group of New Pension Scheme – 18 to 60.

22. NTPC has explored projects in which country – Indonesia.

23. Reverse Mortgage scheme is related to – For Senior Citizens.

24. Which country has raised $7 billion loan to India – World Bank

25. Expand NREGA – National Rural Employment Guarantee Act.

26. In which place Commonwealth(CHOGM) Summit held – Trinidad.

27. For what Govt., is disinvesting PSE –Used against social Schemes.

28. Which cricketer completed 17,000 runs in ODI’s – Sachin Tendulkar.

29. Legend of Honor given to Lata Mangeshkar by which country – France.

30. Who is the PM of Nepal prior to Madhav Kumar – Pushpa kamal dahal.

31. Recently which of the following celebrated 20 years – Fall of Berlin Wall.

32. Which sector has recorded Highest growth in 2008-09 – Manufacturing Sector.

33. Rashtriya Swasti Bima Yojana is – Health insurance scheme for BPL families.

34. Organisation set up Committee under the Chairman of Narayana Murthy – SEBI

35. Who is represented for india in India – EU summit held in Delhi – Manmohan singh

36. World bank has given $4.3 Crores to India for Recapitalization of bank s is a – Soft loan.

37. Which country central bank has given $115 billion to its country to fight against crisis – Japan.

38. China has objected road construction in domchek, is in which state – Jammu &Kashmir.

39. World bank has given 500 Crores for Rural Poverty Reduction programme to which state – Andhra Pradesh.

40. Question related to Core banking Solutions - ?

41. Question BRIC nations – ?

42. Question on Sub Prime Crisis – ?

43. Question regarding IIP - ?

44. Question on Derivatives - ?

Note: Questions are incomplete. If you know more post in a comment box.

Current Affairs (PTR) - 2010

56^th National Film awards:

The National Film Awards is the most prominent film award ceremony in India presented by Directorate of Film Festivals under Govt. of India.The Awards was first presented in 1954.

List of National Film Award Winners:

Best Actor -  Upendra Limaye for Jogwa (Marathi)

Best Actress - Priyanka Chopra for Fashion (Hindi)
Best Director -  Bala for Naan Kadavul (Tamil)
Best Film – Antaheen (Bengali)

Best Music Direction – Ajay Atul for Jogwa (Marathi)

Best Popular Film Providing Wholesome Entertainment – Oye Lucky! Lucky Oye!

Best Children's Film – Gubbachigalu (Kannada)

Best Supporting Actor – Arjun Rampal for Rock On!! (Hindi)

Best Supporting Actress – Kangana Ranaut for Fashion (Hindi)

Best Child Artist – Shams Patel

Special Jury Award (Feature Film) – Bioscope (Malayalam)

Go for 55^th National Film Awards.

New Governors:

Recently Central government has made huge changes in governors of Sates. The New Governors are:

1.      Andhra Pradesh : E.S.L Narismhan

2.      Chhattisgarh : Shekar Duth

3.      Himachal Pradesh : Urmila Singh

4.      Maharashtra : K.Shankaranarayan

5.      Punjab : Shivraj Patel

6.      West Bengal : M.K Narayanan

7.      Rajasthan : Prabha Rao

8.      Jharkhand : Mohsina Kidwai.

For Complete list of Governors visit Governors of state.