Hi, welcome to the BOOKED CLUB! Your daily dose of key updates on news, finance, and everything shaping our world. Whether you're a student prepping for interviews or just looking to stay informed, we break down the latest developments, trends, and insights to keep you ahead. Dive into today’s report, and let’s stay connected on what matters most.
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RBI's Monthly Bulletin
Let's summarise RBI's Monthly Bulletin for December 2024:
- The Monetary Policy Committee (MPC) kept the policy repo rate unchanged at 6.5%, maintaining a neutral stance to balance inflation and growth concerns.
- India’s GDP growth for FY 2024-25 is projected at 6.6%, with Q3 growth estimated at 6.8% and Q4 at 7.2%.
- Inflation surged above the 6% tolerance level in October 2024, driven by food prices, but is expected to moderate by Q4:2024-25.
- A record kharif foodgrain production of 164.7 million tonnes (5.7% higher year-on-year) is expected to stabilize food inflation.
- High-frequency indicators showed domestic economic activity rebounding in Q3, aided by festive demand and rural sector growth.
- Global economic resilience is evident, with GDP growth forecasted at 3.2% for 2024 by both the IMF and OECD.
- India's services sector showed robust expansion, with a PMI of 58.4 in November 2024.
- Merchandise exports grew 17.2% year-on-year in October 2024, supported by resilient external demand.
- The government’s revenue expenditure surged by 47.1% in October 2024, boosting domestic consumption and investments.
- Retail inflation for FY 2024-25 is projected at 4.8%, with risks from global commodity prices and adverse weather events.
- The Gross NPA ratio of Scheduled Commercial Banks fell to 2.54% as of September 2024, the lowest since March 2011.
- Banking system liquidity remained in surplus, supported by higher government spending and variable-rate repo operations.
- Cash Reserve Ratio (CRR) was reduced by 50 basis points to 4% of NDTL, releasing ₹1.16 lakh crore into the banking system.
- Non-food credit growth stood at 12.4% year-on-year in November 2024, reflecting strong credit demand.
- The RBI introduced "MuleHunter" an AI model to detect mule accounts and mitigate financial fraud.
- Collateral-free agricultural loan limits were increased from ₹1.6 lakh to ₹2 lakh per borrower, aiding small and marginal farmers.
- The RBI launched a "Connect 2 Regulate" program to enhance regulatory engagement with stakeholders.
- Pre-sanctioned credit lines through UPI were extended to Small Finance Banks, promoting financial inclusion.
- The Secured Overnight Rupee Rate (SORR) was introduced as a new benchmark for interest rate derivatives.
- India’s forex reserves acted as shock absorbers, maintaining an 11-month import cover, with exchange rate volatility among the lowest for emerging market currencies.
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Election System in India: A Quick Overview
In India, citizens participate in various elections at the national, state, and local levels. Each type of election serves to elect different representatives for various government positions. Below is a breakdown of the types of elections and the electoral process.
- Lok Sabha Elections (General Elections)
Frequency: Every 5 years
Eligibility to Vote: All citizens aged 18 and above
- Vidhan Sabha Elections (State Legislative Assembly Elections)
What it is: Elects Members of Legislative Assembly (MLAs) in states and union territories
Frequency: Every 5 years
Eligibility to Vote: Residents of the respective state aged 18 and above.
- Local Body Elections
What it is: Elects representatives for local governance bodies like Municipal Corporations, Municipalities, Panchayats, and Zilla Parishads
Frequency: Every 5 years
Eligibility to Vote: Residents of the respective local area aged 18 and above
- Rajya Sabha Elections
What it is: Elects Members of Parliament (MPs) to the Rajya Sabha, the upper house of Parliament
Voters: Elected by MLAs, not by the general public
Tenure of Elected Representatives: 6 years, with one-third of members retiring every 2 years
- Presidential Elections
What it is: Elects the President of India
Voters: Elected by an electoral college comprising MPs and MLAs
Tenure of the President: 5 years
- Vice-Presidential Elections
What it is: Elects the Vice-President of India
Voters: Elected by MPs of both the Lok Sabha and Rajya Sabha
Tenure of the Vice-President: 5 years
- By-Elections
What it is: Held to fill vacancies arising due to death, resignation, or disqualification of a representative in the Lok Sabha, Vidhan Sabha, or local bodies
How the Prime Minister and Chief Minister Are Elected?
- Prime Minister (PM)
Elected From: Lok Sabha Elections (General Elections)
Process: The public votes for MPs. The party with the majority of MPs in the Lok Sabha forms the government. The leader of this majority is appointed as the Prime Minister by President of India
- Chief Minister (CM)
Elected From: Vidhan Sabha Elections (State Legislative Assembly Elections)
Process: The public votes to elect MLAs. The party with the majority of MLAs in the state assembly forms the government. The leader of this majority is appointed as the Chief Minister by the Governor of the state.
Recent Developments:
- In the 2024 Indian general elections, the National Democratic Alliance (NDA), led by the Bharatiya Janata Party (BJP), secured a majority in the Lok Sabha, winning 293 out of 543 seats. This victory enabled Narendra Modi to continue as Prime Minister, marking his third term in office having first assumed office in 2014.
- For the 2024 Lok Sabha elections, the overall poll expenditure is estimated to be a staggering Rs 1.35 lakh crore.
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What's One Nation, One Election?
Now that you know a fair deal about elections, this topic will make more sense to you. One Nation, One Election proposes that all elections - national, state, and local - be held on the same day, ideally every five years. This initiative aims to streamline the electoral process and reduce the frequency of election cycles.
Advantages: Simplifies the electoral timeline, Reduction of Election-Related Costs, More Focused Governance, Political Stability, Economic Boost (estimated upto 1.5% of GDP)
Challenges: Constitutional Amendments, Logistical Complexities, Varying Regional Preferences
Bill Proposal:
The Constitution (One Hundred and Twenty-Ninth Amendment) Bill, 2024 was introduced in the Lok Sabha for this purpose. This bill proposes the insertion of Article 82(A) to synchronize elections and fix the tenure of the Lok Sabha, aligning it with state assemblies.
Additionally, the bill amends Articles 83, 172, and 327, with the proposed changes set to take effect after the 2029 general elections, initiating simultaneous elections in 2034.
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