Current Affair



1. Context
The maker of the indigenous coronavirus vaccine, Covaxin, Bharat Biotech International Limited (BBIL), has admitted to an “inadvertent error” in patent filings to protect the vaccine’s Intellectual Property Rights (IPR). One of India’s leading biotechnology companies, it had failed to include scientists from the Indian Council of Medical Research (ICMR) as co-inventors in the Covaxin patent filings.

2. What are Intellectual Property Rights (IPR)?


Intellectual Property Rights (IPR) refer to legal rights granted to creators and owners of intellectual property, which are intangible assets resulting from human creativity and innovation. These rights provide creators and owners with exclusive control over the use and distribution of their intellectual creations, allowing them to benefit financially and protect their works from unauthorized use by others.

The main types of intellectual property rights include

  • Patents protect inventions and technological innovations, granting the inventor exclusive rights to manufacture, use, and sell their invention for a limited period, typically 20 years from the date of filing the patent application.
  • Copyrights protect original works of authorship, such as literary, artistic, musical, and dramatic works, as well as software, films, and other creative expressions. Copyright holders have exclusive rights to reproduce, distribute, perform, and display their works for a specified period, usually the lifetime of the author plus 50 to 70 years.
  • Trademarks protect distinctive signs, symbols, logos, names, or slogans used to distinguish the goods or services of one business from those of others. Trademark owners have the exclusive right to use their mark in commerce and prevent others from using similar marks that may confuse consumers.
  • Trade secrets protect confidential business information, such as formulas, processes, techniques, or customer lists, which provide a competitive advantage to a business. Unlike patents, trade secrets do not require registration and can potentially last indefinitely as long as they remain secret.
  • Industrial designs protect the visual appearance or aesthetic aspects of a product, such as its shape, configuration, pattern, or ornamentation. Design rights grant exclusive rights to the owner to use and prevent others from using their design for a limited period.
  • Geographical indications identify goods as originating from a specific geographical location, where a particular quality, reputation, or other characteristic of the product is essentially attributable to its geographical origin. GI rights protect the unique identity and reputation of products associated with specific regions.

3. About generic medicines


Generic medicines are pharmaceutical products that contain the same active ingredients, dosage form, strength, and route of administration as brand-name drugs. However, they are typically sold under their chemical or non-proprietary name instead of a brand name. Generic medicines are bioequivalent to their brand-name counterparts, meaning they have the same therapeutic effect and safety profile when administered to patients under the same conditions.

The key characteristics of generic medicines

  • Generic medicines contain the same active pharmaceutical ingredients (APIs) as brand-name drugs. These active ingredients are responsible for the therapeutic effects of the medication.
  • Generic medicines have the same dosage form (e.g., tablet, capsule, injection) and strength as the corresponding brand-name drug, ensuring consistency in dosing.
  • Generic medicines are required to demonstrate bioequivalence to the brand-name drug through rigorous testing. This means that the rate and extent of absorption of the active ingredient into the bloodstream are similar to that of the brand-name drug when administered at the same dose.
  • Generic medicines must meet the same quality, safety, and efficacy standards as brand-name drugs. Regulatory authorities, such as the Food and Drug Administration (FDA) in the United States or the European Medicines Agency (EMA) in Europe, review and approve generic medicines before they can be marketed.
  • One of the primary advantages of generic medicines is their lower cost compared to brand-name drugs. Generic manufacturers do not incur the same research and development expenses as brand-name companies, allowing them to offer their products at a lower price.
  • In many countries, including the United States, generic medicines are considered interchangeable with their brand-name counterparts. This means that pharmacists can substitute a generic version for the brand-name drug if it is available, as long as it meets certain regulatory requirements.


4. The Trade-Related Aspects of Intellectual Property Rights (TRIPS) Agreement?


The Trade-Related Aspects of Intellectual Property Rights (TRIPS) Agreement is an international treaty administered by the World Trade Organization (WTO). It sets out minimum standards for the protection and enforcement of intellectual property rights (IPRs) among WTO member countries. The TRIPS Agreement was negotiated during the Uruguay Round of multilateral trade negotiations and came into effect on January 1, 1995.

Key features of the TRIPS Agreement include

  • The TRIPS Agreement covers various forms of intellectual property, including patents, copyrights, trademarks, geographical indications, industrial designs, and trade secrets.
  • The agreement establishes minimum standards of protection and enforcement for each type of intellectual property. These standards require member countries to provide adequate and effective protection for intellectual property rights, ensuring that they are enforceable through civil and criminal procedures.
  • The TRIPS Agreement requires WTO member countries to treat foreign intellectual property rights holders no less favourably than domestic rights holders. This principle, known as national treatment, prevents discrimination against foreign intellectual property rights holders in terms of protection and enforcement.
  • Member countries are also required to grant the most favoured nation treatment to intellectual property rights holders from other WTO member countries. This means that any advantages, privileges, or exemptions granted to the intellectual property rights holders of one WTO member country must be extended to the rights holders of all other WTO member countries.
  • The TRIPS Agreement allows member countries to adopt certain flexibilities and exceptions to intellectual property rules to promote public health, access to medicines, and other public policy objectives. These flexibilities include compulsory licensing, parallel importation, and limitations and exceptions to copyright and patent rights.
  • The TRIPS Agreement provides for a dispute settlement mechanism to address disputes between WTO member countries regarding the interpretation and application of the agreement's provisions. This mechanism allows countries to bring complaints against each other and seek resolution through WTO adjudication procedures.


5. The patent criteria in India


In India, the criteria for granting a patent are outlined in the Patents Act, 1970, and its subsequent amendments. To qualify for a patent, an invention must meet the following criteria.

  • The invention must be new and not disclosed to the public anywhere in the world before the date of filing the patent application. Any prior publication, use, or disclosure of the invention would jeopardize its novelty.
  • The invention must involve an inventive step or non-obvious advancement over existing knowledge or technology for a person skilled in the relevant field. In other words, it must not be obvious to someone with ordinary skills in the field.
  • The invention must be capable of being made or used in an industry. It should have practical utility or industrial application and be capable of being manufactured or used in some kind of business or industrial activity.
  • Certain subject matters are excluded from patentability under Indian patent law. These include inventions that are frivolous, contrary to public order or morality, mere discoveries of a scientific principle or method, schemes, rules, or methods of performing mental acts or doing business, computer programs per se, and methods of agriculture or horticulture.
  • The patent application must disclose the invention in a manner sufficiently clear and complete for it to be carried out by a person skilled in the relevant field. The application must include a description of the invention, claims defining the scope of protection sought, and any necessary drawings or diagrams.
  • The invention must not have been disclosed to the public in any manner, including through publication, before the filing date of the patent application. Public disclosure before filing can undermine the novelty and patentability of the invention.

Applicants seeking a patent in India must ensure that their invention satisfies these criteria and file a patent application with the Indian Patent Office. The patent application will undergo examination to determine whether the invention meets the statutory requirements for patentability. If the application meets all criteria, a patent will be granted, providing the inventor with exclusive rights to the invention for a specified period, typically 20 years from the date of applying.


6. The theme of the World Intellectual Property Day, 2024


  • World Intellectual Property Day was established by the World Intellectual Property Organization (WIPO) in 2000 to promote awareness about intellectual property rights and their importance in fostering innovation, creativity, and economic development.
  • The date of April 26th was chosen for World Intellectual Property Day because it marks the anniversary of the entry into force of the Convention establishing the World Intellectual Property Organization in 1970.
  •  2024 Theme: "IP and the SDGs: Building our common future with innovation and creativity." This year's theme focuses on how IP rights can be used to advance the UN's Sustainable Development Goals (SDGs), which aim to address global challenges like poverty, inequality, and climate change.


7. The Way Forward


Addressing concerns related to intellectual property rights and access to medicines requires a comprehensive and collaborative approach involving multiple stakeholders and policy domains. By engaging in dialogue, advocacy, and policy reform efforts, stakeholders can work towards ensuring that intellectual property rights support innovation while also promoting access to essential medicines for all.


For Prelims: Intellectual Property Rights, SDGs, Patient, TRIPS Agreement, WTO

For Mains: 
1. Discuss the potential implications of the amended rules to the Patent Act on access to medicines and patient welfare, highlighting the balance between intellectual property rights and public health concerns. (250 Words)
Previous Year Questions
1. With reference to the 'National Intellectual Property Rights Policy', consider the following statements: (UPSC 2017) 
1. It reiterates India's commitment to the Doha Development Agenda and the TRIPS Agreement.
2. Department of Industrial Policy and Promotion of the nodal agency for regulating intellectual property rights in India.
Which of the above statements is/are correct?
A. 1 only         B.  2 only          C. Both 1 and 2           D. Neither 1 nor 2
2. Consider the following statements (UPSC 2016)
1. The Sustainable Development Goals were first proposed in 1972 by a global think tank called the 'Club of Rome
2. Sustainable Development goals has to be achieved by the year 2030
Which of the statements given above is/ are correct
A. 1 Only            B. 2 Only                   C. Both 1 and 2                 D. Neither 1 Nor 2
3. Consider the following statements: (UPSC 2019)
1. According to the Indian Patents Act, a biological process to create a seed can be patented in India.
2. In India, there is no Intellectual property Appellate Board. 3. Plant varieties are not eligible to be patented in India.
Which of the statements given above is/are correct?
A. 1 and 3 only    B.  2 and 3 only       C. 3 only      D. 1, 2 and 3
4. TRIPS Agreement pertains to: (CDS GK 2017) 
A. International tariff regime
B. Intellectual property protection
C. International practices on trade facilitation
D. International taxation of property
Answers: 1-C, 2-B, 3-C, 4- B
Source: The Indian Express


1. Context
The Department of Commerce has extended the Interest Equalisation Scheme for pre- and post-shipment rupee export credit for Micro, Small and Medium-scale (MSME) exporters till August 31 2024
2. Definition of 'MSME'
Micro, Small, and Medium Enterprises (MSMEs) are businesses that are characterized by their relatively small size in terms of employees, assets, and revenue. These enterprises play a crucial role in economies around the world, contributing to employment generation, economic growth, and innovation. The definitions of MSMEs can vary from country to country, but there are general guidelines provided by international organizations like the World Bank and the United Nations.

The definition of MSME varies from country to country. In India, an MSME is defined as a business with:

  • Micro enterprise: Up to 10 employees and an investment of up to INR 1 crore (approximately USD 130,000)
  • Small enterprise: Up to 50 employees and an investment of up to INR 10 crore (approximately USD 1.3 million)
  • Medium enterprise: Up to 200 employees and an investment of up to INR 50 crore (approximately USD 6.5 million)
3. Importance of MSME's

The importance of MSMEs in an economy includes:

  • Employment Generation: MSMEs are significant contributors to employment, especially in economies with limited opportunities for large-scale industrial employment.

  • Local Economic Development: MSMEs often operate at a local level, contributing to the development of local communities and economies.

  • Innovation and Entrepreneurship: Many innovative ideas and entrepreneurial ventures start as MSMEs. They have the flexibility to adapt quickly to changing market demands and experiment with new business models.

  • Diversity and Resilience: A diverse ecosystem of MSMEs can contribute to a more resilient economy by reducing dependence on a few large corporations.

  • Contributions to GDP: The combined contributions of MSMEs to a country's Gross Domestic Product (GDP) can be significant, even if individual businesses are relatively small.

4. New Criteria for MSME's

The new criteria for the classification of micro, small and medium enterprises (MSMEs) in India was notified by the Ministry of Micro, Small and Medium Enterprises (MSME) on June 1, 2020. The new criteria are based on the investment in plant and machinery or equipment and the annual turnover of the enterprise.

The following are the new criteria for the classification of MSMEs:

  • Micro enterprise: An enterprise with:
    • Investment in plant and machinery or equipment not more than Rs.1 crore (approximately USD 130,000)
    • Annual turnover not more than Rs. 5 crore (approximately USD 650,000)
  • Small enterprise: An enterprise with:
    • Investment in plant and machinery or equipment not more than Rs.10 crore (approximately USD 1.3 million)
    • Annual turnover not more than Rs. 50 crore (approximately USD 6.5 million)
  • Medium enterprise: An enterprise with:
    • Investment in plant and machinery or equipment not more than Rs.50 crore (approximately USD 6.5 million)
    • Annual turnover not more than Rs. 250 crore (approximately USD 3.25 million)
5. Challenges faced by MSME's

Micro, small, and medium enterprises (MSMEs) play a vital role in the Indian economy, accounting for over 90% of all enterprises and employing over 40% of the workforce. However, MSMEs face a number of challenges, including:

  • Access to finance: MSMEs often find it difficult to obtain loans from banks and other financial institutions due to their lack of collateral and track record. This can make it difficult for them to expand their businesses or invest in new technologies.
  • Lack of skills: MSMEs often lack the skills and knowledge needed to compete in the global market. This can make it difficult for them to develop new products and services, or to adopt new technologies.
  • Competition from large businesses: MSMEs often face competition from large businesses, which have more resources and economies of scale. This can make it difficult for MSMEs to compete on price or quality.
  • Bureaucracy: MSMEs often face a number of bureaucratic hurdles, such as obtaining licenses and permits. This can be time-consuming and costly, and can discourage entrepreneurs from starting or expanding their businesses.
  • Infrastructure constraints: MSMEs often face infrastructure constraints, such as poor roads and electricity supply. This can make it difficult for them to transport their goods and services, or to operate their businesses efficiently.
  • Unstable government policies: MSMEs are often affected by unstable government policies, such as changes in tax rates or import duties. This can make it difficult for them to plan for the future and make investment decisions.
6. Government Schmes for MSME's

Here are some of the prominent schemes and programs for MSMEs by the Union Government of India:

  1. Micro Units Development and Refinance Agency (MUDRA) Yojana:

    • MUDRA Yojana aims to provide financial support to small and micro enterprises by offering loans through various financial institutions. It consists of three categories: Shishu, Kishor, and Tarun, based on the loan amount.
  2. Pradhan Mantri Mudra Yojana (PMMY):

    • PMMY is a scheme to provide financial assistance for the establishment, expansion, and modernization of MSMEs. It offers loans without collateral security up to a certain limit.
  3. Credit Linked Capital Subsidy Scheme (CLCSS):

    • CLCSS provides capital subsidy to MSMEs for technology upgradation, modernization, and replacement of their plant and machinery to improve competitiveness.
  4. Zero Defect Zero Effect (ZED) Certification Scheme:

    • ZED certification encourages MSMEs to adopt best practices and quality standards to enhance product quality while minimizing environmental impact.
  5. Make in India Initiative:

    • The Make in India campaign encourages domestic and foreign companies to manufacture products in India, fostering the growth of the manufacturing sector and MSMEs.
  6. Stand Up India Scheme:

    • This scheme aims to promote entrepreneurship among women and Scheduled Caste/Scheduled Tribe communities by providing loans for starting new enterprises.
  7. Technology Upgradation Support for MSMEs (TEQUP):

    • TEQUP focuses on supporting MSMEs in adopting modern technology and upgrading their production processes to improve quality and competitiveness.
  8. National Manufacturing Competitiveness Programme (NMCP):

    • NMCP includes various components such as Lean Manufacturing Competitiveness Scheme, Design Clinic Scheme, and more, aimed at enhancing the competitiveness of the manufacturing sector, including MSMEs.
  9. Entrepreneurial and Managerial Development of SMEs (EMD-SME):

    • EMD-SME focuses on providing training, capacity-building, and skill development to entrepreneurs and managers of MSMEs.
  10. Skill India Initiative:

    • While not exclusively for MSMEs, the Skill India program aims to provide skill training to individuals, including those in the MSME sector, to improve employability and entrepreneurship.
  11. Export Promotion Capital Goods (EPCG) Scheme:

    • The EPCG scheme allows MSMEs to import capital goods for the purpose of upgrading technology and enhancing export competitiveness with certain duty benefits.
  12. Udyog Aadhaar Registration:

    • The Udyog Aadhaar registration process simplifies the process of registering and obtaining various benefits for MSMEs, such as easier access to credit and government schemes.
7. Way forward
Addressing these challenges often requires a combination of government support, industry initiatives, access to finance, skill development programs, technology adoption, networking opportunities, and tailored solutions that take into account the unique needs of MSMEs.

Previous year Questions

1. Consider the following statements with reference to India: (UPSC 2023)
1. According to the 'Micro, Small and Medium Enterprises Development (MSMED) Act, 2006', the 'medium enterprises' are those with investments in plant and machinery between Rs. 15 crore and Rs. 25 crore.
2. All bank loans to the Micro, Small, and Medium Enterprises qualify under the priority sector.
Which of the statements given above is/are correct?
A. 1 only
B. 2 only
C. Both 1 and 2
D. Neither 1 nor 2
Answer: B
2. Which of the following can aid in furthering the Government's objective of inclusive growth? (UPSC 2011)
1. Promoting Self-Help Groups
2. Promoting Micro, Small and Medium Enterprises
3. Implementing the Right to Education Act
Select the correct answer using the codes given below:
A. 1 only
B. 1 and 2 only
C. 2 and 3 only
D. 1, 2 and 3
Answer: D
 Source: The Hindu


1. Context
Prime Minister Narendra Modi’s visit to Moscow for a standalone state visit on July 8 and 9 to meet Russian President Vladimir Putin will reverse the perception of a “drift” in relations, experts say. The visit is expected to focus on strategic, economic, and military ties

2. How is Indo-Russia Relations?


  • India and Russia have traditionally enjoyed a close relationship, characterized by cooperation across political, security, economic, and cultural spheres, it's important to avoid oversimplification. Examining the relationship through a nuanced lens reveals a more complex story.
  • The India-Russia partnership boasts a strong foundation, cemented by the "Declaration on the India-Russia Strategic Partnership" in 2000 and rooted in Cold War-era ties between India and the Soviet Union. This historical depth and shared strategic interests continue to hold value for both nations.
  • However, the post-Cold War landscape has introduced new complexities. Russia's close links with China and Pakistan, both considered geopolitical rivals of India, have caused friction. Additionally, India's diversifying foreign policy and growing engagement with the West create further strains.
  • The COVID-19 pandemic and Russia's invasion of Ukraine have further complicated the picture. While India has maintained a neutral stance on the Ukraine war, it faces increasing pressure to condemn Russia. This adds to the growing perception of a potential "downfall" in relations.
  • Instead of painting a solely negative picture, it's crucial to recognize the multifaceted nature of the relationship. Areas of cooperation still exist, particularly in defence, energy, and space exploration. Moreover, public opinion in India largely remains supportive of the partnership, highlighting its continued relevance despite the challenges.

3. Important Areas of Cooperation


  • The highest institutionalized dialogue mechanism in the strategic partnership between India and Russia is the Annual Summit meeting between the Prime Minister of India and the President of the Russian Federation.
  • Prime Minister Narendra Modi and President Vladimir Putin held their first informal Summit in Sochi, Russia, in 2018.
  • In 2019, President Putin awarded PM Narendra Modi Russia’s highest state decoration, The Order of St Andrew the Apostle, for his distinguished contribution to the development of a privileged strategic partnership between Russia and India.
  • Two Inter-Governmental Commissions – on Trade, Economic, Scientific, Technological, and Cultural Cooperation (IRIGC-TEC) and Military-Technical Cooperation (IRIGC-MTC) – meet annually.
  • India-Russia military-technical cooperation has evolved from a buyer-seller framework to joint research, development, and production of advanced defence technologies.
  • Joint military programs include the BrahMos cruise missile, 5th generation fighter jet, Sukhoi Su-30MKI, Ilyushin/HAL Tactical Transport Aircraft, KA-226T twin-engine utility helicopters, and some frigates.
  • India has acquired military hardware from Russia, including the S-400 Triumf, Kamov Ka-226 (made in India under Make in India), T-90S Bhishma, INS Vikramaditya aircraft carrier, and submarines.
  • Russia is a crucial partner for India in peaceful nuclear energy use, with cooperation in the Kudankulam Nuclear Power Plant (KKNPP) in India and the Rooppur Nuclear Power Project in Bangladesh.
  • Cooperation in outer space includes satellite launches, the GLONASS navigation system, and joint activities in the field of the Human Spaceflight Programme.
  • Institutional mechanisms for bilateral Science and Technology cooperation include the Working Group on Science and Technology, the Integrated Long-Term Programme (ILTP), and the Basic Science Cooperation Programme.
  • Cultural ties involve the teaching of Hindi and other Indian languages in Russian institutions, as well as the promotion of Indian dance, music, yoga, and Ayurveda in Russia.

4. India's Significance for Russia


  • The border tensions in eastern Ladakh marked a turning point in India-China relations, highlighting the potential role of Russia in defusing such conflicts. Russia organized a trilateral meeting among the foreign ministers of Russia, India, and China, signalling a diplomatic effort to address the situation in the Galwan Valley.
  • Beyond traditional cooperation in weapons, hydrocarbons, nuclear energy, and diamonds, new avenues for economic engagement are emerging. Sectors like mining, agro-industrial activities, and high technology (robotics, nanotech, and biotech) are expected to play a significant role. India's expanding footprint in the Russian Far East and the Arctic is set to boost connectivity projects.
  • India and Russia are collaborating to address challenges in Afghanistan, emphasizing the need for the early finalization of the Comprehensive Convention on International Terrorism to strengthen their collective efforts against terrorism.
  • Russia lends support to India's aspirations for permanent membership in a reformed United Nations Security Council and membership in the Nuclear Suppliers Group, reflecting shared interests in global governance.
  • Russia has been a major arms exporter to India, even though its share in India's arms imports declined by over 50% in the last five years compared to the previous period (2011–2015). Over the past two decades, India has imported arms and weapons worth USD 35 billion from Russia, according to the Stockholm International Peace Research Institute, underscoring the enduring defence partnership between the two countries.

5. Russia's Significance for India


Strategic Partner

  • Military Powerhouse: Russia provides crucial access to advanced weapons and military technology, vital for India's security interests against regional rivals like China and Pakistan.
  • Nuclear Fuel Supplier: Russia is a key source of nuclear fuel for India's growing nuclear power program, ensuring energy security and independence.
  • Political Ally: Russia supports India's position on key issues like Kashmir and UN reform, offering diplomatic backing and counterbalancing Western pressure.
  • Counterbalance to the West: Russia's partnership helps India diversify its foreign relations and hedge against Western dominance, promoting a multipolar global order.

Economic Partner

  • Trade and Investment: Bilateral trade is growing, though below potential. Both nations aim to increase it significantly, offering mutual economic benefits.
  • Emerging Areas of Cooperation: New sectors like mining, agro-industrial, and high technology (robotics, nanotech, biotech) hold promising potential for collaboration and economic growth.
  • Connectivity Projects: India's participation in Russia's Arctic and Far East development initiatives can open up new avenues for trade and resource access.

Security Collaborator

  • Joint counter-terrorism efforts: Both nations face similar threats and collaborate on intelligence sharing, training, and operations to combat terrorism.
  • Afghanistan crisis: Both have concerns about the situation in Afghanistan and cooperate to promote stability and prevent the resurgence of extremist groups.
  • Space Exploration: Collaborative projects in satellite launches, navigation systems, and human spaceflight programs strengthen scientific and technological advancements.


6. Trade Between India and Russia


India-Russia Trade Relations

  • The two countries intend to increase bilateral investment to US$50 billion and bilateral trade to US$30 billion by 2025.
  • Bilateral trade during FY 2020 amounted to USD 8.1 billion.
  • From 2013 to 2016 there was a major decline in the trade percentage between the two countries. However, it increased from 2017 onwards and a constant increase was noticed in 2018 and 2019 as well.

Increasing Dependency on Russian Oil Imports

  • India's oil imports have shifted significantly towards Russia, surpassing traditional suppliers such as Saudi Arabia and Iraq.
  • Russia's geopolitical situation, including Western sanctions following the military operation in Ukraine, has prompted Moscow to offer steep discounts on its crude oil, finding a ready market in India.
  • India, unlike Western countries, has chosen not to impose formal sanctions on Russia, leading to a nearly 13-fold increase in crude oil imports from Russia in 2022-23, reaching over $31 billion.

Payment Challenges and Geopolitical Ramifications

  • India faces difficulties in paying for Russian oil due to breaching the $60 per barrel price cap set by the US and European nations, as Russia offers lower discounts on its crude.
  • Using currencies like the Chinese yuan for payments raises geopolitical concerns due to strained ties with Beijing.
  • Western sanctions have limited Russia's access to the global secure interbank system (SWIFT), making it challenging for Indian exporters to receive payments for goods already shipped to Russia.

The Rupee-Rouble Mechanism and Trade Deficit Concerns

  • Negotiations between India and Russia to reactivate the rupee-rouble trade arrangement, an alternative payment mechanism, have faced obstacles.
  • Concerns over the rouble's convertibility and volatility, along with India's ballooning trade deficit, have hindered the implementation of the rupee-rouble payment mechanism.
  • India's trade deficit with Russia reached $43 billion in 2022-23, leading to significant amounts of Indian rupees in Russian banks that cannot be utilized for Russia's war efforts.

De-Dollarisation Efforts and Alternative Payment Methods

  • The US sanctions have prompted countries to explore de-dollarisation, replacing the US dollar as the global reserve currency.
  • India has released a roadmap for the internationalization of the Indian rupee to enhance its acceptance globally.
  • Indian refiners have settled non-dollar payments for Russian oil using currencies like the Chinese yuan and the UAE dirham.


7. Challenges and Uncertainties



  • Ukraine War: Russia's invasion of Ukraine has strained its relations with the West, potentially impacting India's ties with both nations. India's neutral stance faces increasing pressure to condemn Russia, creating a delicate balancing act.
  • China's Shadow: Russia's close relationship with China, India's geopolitical rival, creates friction and uncertainty. While Russia played a mediating role in the Ladakh border tensions, its alignment with China raises concerns for India's security interests.
  • Diversifying Foreign Policy: India's growing engagement with the US and other Western powers could further complicate the relationship with Russia, potentially leading to strategic competition and conflicting interests.


  • Trade below potential: Bilateral trade between India and Russia remains below its potential, despite ambitious goals to increase it significantly. This could be due to factors like infrastructure limitations, lack of diversification, and competition from other trading partners.
  • Investment gaps: While both countries desire increased investment, attracting Russian investment to India remains a challenge. This could be due to concerns about regulatory hurdles, bureaucratic complexities, and competition from other investment destinations.
  • Energy dependence: India's reliance on Russia for critical resources like nuclear fuel and military equipment creates vulnerability to potential disruptions in supply or price fluctuations. Diversifying energy sources and arms imports is a long-term goal, but comes with its own challenges.


  • Shifting military landscape: India's efforts to diversify its arms imports and develop its own defence capabilities could gradually reduce its dependence on Russian military technology. This could potentially weaken the strategic partnership in the long run.
  • Differing priorities: While both nations share some strategic interests, their priorities may not always align perfectly. This could lead to disagreements on issues like regional security, international sanctions, or global governance.
  • Domestic politics: Internal political dynamics in both countries can also impact the relationship. Changes in leadership or shifts in public opinion could lead to changes in priorities or policies, potentially creating uncertainty and instability.


8. The Way Forward


Indo-Russia relations are a complex tapestry woven with historical ties, strategic interests, and evolving geopolitical realities. While facing challenges, the partnership holds significant value for both sides and is likely to continue adapting to the changing global landscape.


For Prelims: India-Russia, Kudankulam Nuclear Power Plant, Cold War, Russia-Ukraine War, Covid-19 Pandemic

For Mains: 

1. Discuss the challenges and opportunities for increasing bilateral trade and investment between India and Russia. What specific initiatives can be undertaken to overcome existing obstacles and achieve the set goals? (250 Words)
2.  Critically evaluate the impact of Russia's invasion of Ukraine on its relations with India, considering both geopolitical implications and domestic public opinion.  (250 Words)
Previous Year Questions

1. Recently, India signed a deal known as ‘Action Plan for Prioritization and Implementation of Cooperation Areas in the Nuclear Field’ with which of the following countries? (UPSC 2019)

(a) Japan
(b) Russia
(c) The United Kingdom
(d) The United States of America

Answer: B

2. Consider the following pairs: (UPSC 2014)

Region often in news            Country

1. Chechnya                         Russian Federation

2. Darfur                               Mali

3. Swat Valley                      Iraq

Which of the above pair is/are correctly matched?  

A. 1 only         B. 2 and 3 only        C. 1 and 3 only          D. 1, 2 and 3

Answers: 1-B, 2-A


1. What is the significance of Indo-US defence deals over Indo-Russian defence deals? Discuss with reference to stability in the Indo-Pacific region. (UPSC 2020)


Source: The Indian Express


1. Context
The silicon semiconductor chip, which sits at the heart of every new technology, is a device that Taiwan has an absolute mastery over. Its biggest manufacturer, the Taiwan Semiconductor Manufacturing Company (TSMC), is the ninth-most valuable business in the world and has a virtual stranglehold over the fabrication of high-end chips that even major American tech majors such as Intel, Nvidia or Apple depend on
2. What are Semiconductors?

Semiconductors constitute a unique category of materials exhibiting electrical characteristics that blend those of conductors and insulators. Analogous to a faucet regulating water flow, semiconductors offer precise control over electric currents.

Among semiconductors, the transistor holds paramount importance. In the early stages of modern electronics, integrated circuits featured a mere four transistors, enabling basic arithmetic operations. Presently, single chips accommodate billions of transistors.

The intricate process of integrating numerous transistors onto a minuscule chip, comparable in size to a fingernail, demands meticulous precision akin to dividing a strand of human hair into a thousand segments, each with specific width, and further subdividing each segment into a hundred parts. Consequently, semiconductor fabrication necessitates cutting-edge technological and scientific expertise

3. How are Semiconductors made?

  • The process commences with an engineer meticulously selecting a silicon wafer as the base upon which the semiconductor will be constructed.
  • A dedicated team subjects the silicon, derived from sand, to an elaborate purification procedure to isolate it from other substances, resulting in an ultra-pure wafer with impurity levels as minimal as a few parts per billion.
  • This proportion is akin to an error margin of merely one centimeter when measuring the Earth's diameter.
  • Subsequently, the photolithography process ensues—a pivotal stage wherein the circuit pattern is etched onto the wafer.
  • The wafer is coated with a light-sensitive substance known as a photoresist. A mask is then positioned in front of the wafer, and light is directed onto it. The mask features small apertures corresponding to the circuit pattern.
  • Light passes through these apertures, eroding the underlying sections of the photoresist. Consequently, the photoresist on the wafer adopts the configuration of the transistor circuits.
  • After photolithography, engineers employ chemical and/or physical methods to eliminate the unetched portions of the photoresist, leaving the circuit's framework on the silicon substrate intact.
  • Next, they introduce impurities into specific areas of the semiconductor—a process known as doping—to modify its electrical properties deliberately.
  • Thin layers of materials such as metals or insulators are then deposited onto the wafer's surface to establish electrical connections or insulate components.
  • Subsequently, the resultant product undergoes packaging—individual chips are segregated, encapsulated, and subjected to testing to ensure functionality and reliability—before integration into the electronic device
4. Semiconductor Fabrication
  • Every stage of semiconductor production necessitates exceptionally precise techniques and draws upon a variety of scientific principles. For instance, in crafting cutting-edge transistors, the photolithography process demands a light source emitting electromagnetic radiation with a wavelength of 13.5 nm.
  • To achieve this, the High NA EUV machine developed by the Dutch company ASML employs a unique method: a cannon propels a 50-micrometer droplet of liquid tin at 300 km/hr through a vacuum chamber, where laser beams impart sufficient energy to generate a plasma emitting the required wavelength of radiation.
  • Semiconductor manufacturing is characterized by specialization, resulting in an oligopoly dominated by companies specializing in specific areas. ASML, originally a spin-off of Philips, holds a monopoly on photolithography machines essential for cutting-edge semiconductor production worldwide.
  • In the realm of software tools for circuit design, American firms Synopsys and Cadence reign supreme, while Japan's Shin Etsu leads in silicon wafer production.
  • Taiwan's TSMC leads the market in fabrication, utilizing equipment from U.S.-based Applied Materials and Lam Research. The bulk of intellectual property rights are owned by the British company Arm.
  • India plays a significant role in chip design, particularly centered in Bengaluru. However, ownership of most intellectual property rights necessary for executing these designs lies with parent companies or with Arm, relegating India to a consumer rather than a proprietor of these products.
  • This dynamic mirrors the business model of McDonald's: while India may host numerous McDonald's outlets, the recipe and supply chain are controlled by a parent company headquartered elsewhere
5. Benefits of Semiconductors
  • Smartphones and computers epitomize the apex of semiconductor technology, yet the impact of semiconductors permeates nearly every aspect of daily life. These components power not only the sophisticated functions of electronic devices but also enable the operation of "smart" air conditioners for temperature regulation and facilitate space telescopes in capturing both captivating and scientifically significant images from the depths of the universe, among various other applications.
  • The solutions to many of the pivotal challenges of the 21st century, encompassing realms such as artificial intelligence, electric vehicles, space exploration, robotics, personalized healthcare, and environmental monitoring, hinge upon a reliable supply of advanced semiconductors. This underscores their critical importance for humanity's survival and pursuit of fairness, sustainability, and justice.
  • The establishments dedicated to semiconductor technology not only foster innovation and generate high-income employment opportunities but also cultivate the potential for startups specializing in cutting-edge technologies.
  • Furthermore, they contribute to and benefit from advancements in fields such as materials science, computer engineering, big data, optics, chemical engineering, and chip design, among others.
  • Given their significance in sectors like defense and automotive industries, semiconductors have become focal points of geopolitical interest. Countries vie to establish semiconductor fabrication facilities domestically, offering various incentives to attract industry leaders. Notably, the United States has imposed sanctions on Chinese technology companies, including bans on acquiring advanced ASML equipment and high-end design software, citing similar reasons.
  • In response, China has intensified efforts to bolster its domestic semiconductor production capabilities to meet internal demand.
  • India, on the other hand, has been leveraging its expertise in design to establish semiconductor manufacturing plants domestically. It is hoped that this strategic initiative, coupled with the potential for continued innovation and collaboration, will enhance India's position in the semiconductor industry
6. Way Forward
While the physical realm of human activity contains an array of languages, the digital realm is founded on just one fundamental binary language: the 1s and 0s, also called the bits of data. Computers represent these bits as electrical signals and this forms the foundation of modern computing, communication, social media, robotics, and artificial intelligence. The 0s and 1s constantly shape the way we interact with technology and with each other — and the beating heart of this binary revolution is the semiconductor device
For Prelims: Semiconductor, intellectual property rights, India Semiconductor Mission, Semicon India Program
For Mains: 
1. Discuss the potential of India's semiconductor industry to reduce the country's dependence on imported chips and contribute to the "Make in India" initiative. (250 Words)
Source: The Hindu


1. Context
During the fiscal ended March 31, 2024, the listed private non-financial companies recorded double digit growth in profits and improved margins at the aggregated level, the (RBI) data showed
 PM Modi launches 2 RBI schemes. All about the central bank initiatives -  Hindustan Times
2. Establishment of the Reserve Bank of India
  • The Reserve Bank of India (RBI) was established on April 1, 1935, when it was established by the Reserve Bank of India Act of 1934.
  • Initially based in Calcutta, it serves as the apex monetary authority, regulator, and supervisor of India's financial system, exercising control over monetary policy, managing foreign exchanges, and overseeing payment and settlement systems.
  • The establishment of the RBI was influenced by Dr. B.R. Ambedkar's seminal work, "The Problem of the Rupee – Its Origin and its Solution," and was founded based on the recommendations of the Hilton Young Commission in 1926.
  • Beyond its regulatory functions, the RBI also plays a developmental role, acts as the issuer of currency, and functions as the banker to the Government of India.

The significant events in the history of the Reserve Bank of India

  • The British government enacted the Reserve Bank of India Act in 1934, laying the foundation for the central bank's establishment.
  • On April 1st 1935, the Reserve Bank of India commenced operations in Calcutta.
  • In 1937 The RBI's headquarters were permanently relocated to Mumbai, where it continues to be situated.
  • 1949 Following India's independence, the RBI underwent nationalization, transitioning from private ownership to being held by the Government of India. Before this, the bank had private stakeholders.
3. The preamble of the RBI

The preamble of the Reserve Bank of India (RBI) outlines the fundamental objectives and functions of the central bank. The preamble of the RBI Act 1934 states

"An Act to constitute a Reserve Bank for India to regulate the issue of Bank notes and the keeping of reserves to secure monetary stability in India and generally to operate the currency and credit system of the country to its advantage."

This preamble highlights the key roles and responsibilities of the RBI, which include:

  • The RBI is responsible for regulating the issuance of currency notes in India. It ensures the stability and integrity of the currency system.
  • The RBI is mandated to maintain adequate reserves to support monetary stability. This includes managing foreign exchange reserves and gold reserves.
  • One of the primary objectives of the RBI is to secure monetary stability in India. This involves controlling inflation, managing interest rates, and promoting economic stability.
  • The RBI operates and oversees the currency and credit system of the country. It plays a crucial role in managing liquidity, credit flow, and overall financial stability.
4. The objectives of RBI

The objectives of the Reserve Bank of India (RBI) encompass a range of crucial functions aimed at ensuring the stability, growth, and integrity of India's financial and economic systems. These objectives include

  • The RBI is tasked with overseeing and regulating the nation's currency and credit system to ensure smooth financial operations and effective credit flow throughout the economy.
  • One of the primary goals of the RBI is to safeguard monetary stability in India by managing reserves effectively and implementing policies that control inflation and stabilize the value of the currency.
  • The RBI holds the responsibility of issuing banknotes, maintaining their quality, and managing their circulation across the country to facilitate efficient financial transactions.
  • The RBI works diligently to maintain financial stability by engaging in prudent activities and insulating itself from undue political influences. This independence allows it to make decisions based on economic considerations rather than political pressures.
  • Through its policies and interventions, the RBI aims to support economic growth and contribute to the planned advancement of the country's economy, fostering a conducive environment for sustainable development.
  • The RBI acts as the banker to commercial banks, providing them with essential services such as clearing and settlement. It also serves as the banker to the government, managing its accounts, facilitating transactions, and helping in debt management. Additionally, it serves as the primary authority for issuing currency notes, ensuring the smooth functioning of the monetary system.
5. The Structure of RBI

The structure of the Reserve Bank of India consists of various components that work together to fulfil the central bank's functions and responsibilities.

Central Board of Directors

  • The Central Board of Directors is the supreme decision-making body of the RBI.
  • It comprises official directors, including the Governor, Deputy Governors, and other senior officials, as well as non-official directors appointed by the Government of India.
  • The Central Board oversees the overall functioning of the RBI, including formulating policies, supervising operations, and managing key functions.


  • The Governor is the highest-ranking official in the RBI and is appointed by the Government of India.
  • The Governor plays a crucial role in setting monetary policy, representing the RBI in various forums, and managing the day-to-day operations of the central bank.
  • The Governor chairs meetings of the Central Board and is responsible for executing RBI's policies and decisions.

Deputy Governors

  • The RBI typically has four Deputy Governors, each responsible for specific areas such as monetary policy, banking regulation, currency management, and internal operations.
  • Deputy Governors assist the Governor in policy formulation, decision-making, and overseeing key functions of the RBI.

Departments and Wings

The RBI operates through various departments and wings, each focusing on specific functions and responsibilities. Some of the major departments include
  • Monetary Policy Department Formulates and implements monetary policies, manages interest rates and monitors economic indicators.
  • Department of Banking Regulation Regulates and supervises banks and financial institutions, enforces prudential norms, and ensures financial stability.
  • Department of Currency Management Manages currency issuance, circulation, and coinage operations.
  • Foreign Exchange Department Manages foreign exchange reserves, formulates exchange rate policies, and regulates foreign exchange transactions.
  • Financial Stability Unit Monitors systemic risks, assesses financial stability, and coordinates efforts to maintain a stable financial system.
  • Information Technology (IT) Department Manages IT infrastructure, digital banking initiatives, and cybersecurity measures.
These departments work in coordination to achieve the RBI's objectives related to monetary policy, financial regulation, currency management, and economic stability.

Regional Offices

  • The RBI has regional offices located in major cities across India.
  • These regional offices play a vital role in implementing RBI policies at the grassroots level, supervising regional banks, and addressing regional banking and financial issues.

Committees and Advisory Groups

  • The RBI forms various committees and advisory groups to provide expert advice, conduct research, and make recommendations on specific areas such as monetary policy, financial inclusion, risk management, and regulatory reforms.
  • Examples include the Monetary Policy Committee (MPC), Board for Financial Supervision (BFS), and Internal Working Groups (IWGs) on various policy matters.

Autonomous Boards and Subsidiaries

  • The RBI also oversees autonomous boards and subsidiaries that focus on specialized functions such as regulation of non-banking financial companies (NBFCs), development finance, and financial inclusion.
  • Examples include the National Bank for Agriculture and Rural Development (NABARD), National Housing Bank (NHB), and Bharatiya Reserve Bank Note Mudran Private Limited (BRBNMPL).
6. Functions of the RBI
The Reserve Bank of India (RBI) performs a wide range of functions that are essential for the functioning of India's monetary and financial system. These functions can be broadly categorized into the following

Monetary Policy Formulation and Implementation

  • The RBI formulates and implements monetary policy to achieve price stability and promote sustainable economic growth.
  • It sets key policy rates such as the repo rate, reverse repo rate, and marginal standing facility (MSF) rate to influence liquidity conditions and interest rates in the economy.
  • The RBI also conducts open market operations (OMOs) to manage liquidity in the financial system.

Currency Issuance and Management

  • The RBI is responsible for issuing currency notes and coins in India. It ensures an adequate supply of currency to meet the demand for cash transactions.
  • It manages the distribution, circulation, and withdrawal of currency to maintain its integrity and prevent counterfeiting.
Regulation and Supervision of Banks and Financial Institutions
  • The RBI regulates and supervises banks, non-banking financial companies (NBFCs), payment banks, small finance banks, and other financial institutions.
  • It sets prudential norms, capital adequacy requirements, and risk management guidelines to ensure the stability and soundness of the financial system.
  • The RBI conducts regular inspections, audits, and surveillance to assess compliance with regulatory standards and address potential risks.

Foreign Exchange Management

  • The RBI manages India's foreign exchange reserves to support external trade, maintain exchange rate stability, and meet international payment obligations.
  • It formulates policies and regulations governing foreign exchange transactions, capital flows, and external borrowings.
  • The RBI intervenes in the foreign exchange market to stabilize the rupee and prevent excessive volatility in the exchange rate.

Developmental Role

  • The RBI plays a developmental role by promoting financial inclusion, expanding access to banking services, and fostering the development of the financial sector.
  • It implements initiatives such as priority sector lending, microfinance, and financial literacy programs to address the needs of underserved segments of the population.
  • The RBI also supports the development of financial infrastructure, including payment systems, credit information bureaus, and regulatory frameworks for emerging sectors such as fintech.

Regulation of Payment and Settlement Systems

  • The RBI regulates and oversees payment and settlement systems in India to ensure efficiency, safety, and reliability in financial transactions.
  • It operates and manages key payment systems such as the Real-Time Gross Settlement (RTGS) system, National Electronic Funds Transfer (NEFT), and Unified Payments Interface (UPI).
  • The RBI sets standards, guidelines, and regulations for participants in payment systems and monitors their compliance to mitigate systemic risks.

Financial Stability and Systemic Risk Management

  • The RBI monitors and assesses systemic risks in the financial system to maintain financial stability.
  • It conducts stress tests, risk assessments, and scenario analyses to identify vulnerabilities and take preventive measures.
  • The RBI collaborates with other regulatory authorities and participates in international forums to address global financial stability issues.
7. Acts Administered by the RBI

The Reserve Bank of India (RBI) administers several key acts and regulations that govern various aspects of the banking, financial, and monetary system in India.

  • The Reserve Bank of India Act, 1934 establishes the RBI as India's central bank and outlines its functions, powers, and governance structure.
  • Public Debt Act, 1944/Government Securities Act, 2006 regulate the issuance, management, and trading of government securities in India. They provide the legal framework for government borrowing and debt management.
  • Government Securities Regulations, 2007 supplement the Government Securities Act, 2006, and provide detailed guidelines for the issuance, trading, and settlement of government securities.
  • Banking Regulation Act, 1949 empowers the RBI to regulate and supervise banks and banking activities in India. It covers aspects such as licensing, operations, governance, and resolution of banking crises.
  • Foreign Exchange Management Act, 1999 (FEMA) governs foreign exchange transactions, capital flows, and external trade-related payments. The RBI administers FEMA and issues regulations to manage India's foreign exchange reserves and control cross-border transactions.
  • Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (Chapter II) deals with the securitization and reconstruction of financial assets and enforcement of security interests by banks and financial institutions. The RBI oversees compliance with Chapter II of this act.
  • Credit Information Companies (Regulation) Act, 2005 regulates credit information companies (CICs) that collect and disseminate credit-related information. The RBI supervises CICs and ensures compliance with data protection and consumer rights standards.
  • Payment and Settlement Systems Act, 2007 provides the legal framework for regulating payment and settlement systems in India. The RBI administers and supervises payment systems to ensure their safety, efficiency, and reliability.
  • Payment and Settlement Systems Regulations, 2008 regulations supplement the Payment and Settlement Systems Act, 2007, and provide detailed rules and procedures for payment system operators, participants, and settlement processes.
  • Factoring Regulation Act, 2011 regulates and promotes factoring services, which involve the purchase and management of receivables or invoices. The RBI oversees compliance with the Factoring Regulation Act.
8. Initiatives taken by RBI

The Reserve Bank of India (RBI) undertakes various initiatives to promote financial stability, inclusion, and economic growth in India. 

Financial Inclusion

  • The RBI encourages banks to provide microloans to small businesses and low-income individuals.
  • Initiatives like Pradhan Mantri Jan Dhan Yojana (PMJDY) are supported to expand bank accounts and financial services in rural areas.
  • The RBI simplifies regulations and promotes digital banking to make financial services more accessible.

Consumer Protection

  • The RBI conducts awareness campaigns and provides resources to educate citizens about financial products and safe banking practices.
  • The Integrated Ombudsman Scheme allows customers to file complaints against banks and financial institutions.
  • The RBI sets guidelines for bank charges to ensure transparency and fairness for consumers.

Financial Regulation and Development

  • The RBI uses monetary policy tools like interest rates to manage inflation and promote economic growth.
  • Regular inspections and regulations ensure the smooth functioning and financial stability of banks.
  • The RBI implements reforms to address emerging challenges and strengthen the financial system.

Digital Payments

  • The RBI supports initiatives like UPI (Unified Payments Interface) to facilitate cashless transactions and financial inclusion.
  • Guidelines and regulations are issued to enhance the security of digital banking platforms.
  • The RBI encourages innovation in the digital payments space to improve efficiency and convenience.

Other Initiatives

  • Financial Literacy Weeks-focused campaigns are organized to raise awareness on specific financial topics every year.
  • The RBI takes steps to promote the development of a healthy and efficient financial market ecosystem.
  • The RBI manages India's foreign exchange reserves to maintain a stable exchange rate.
9. Publications of RBI

The Reserve Bank of India (RBI) regularly publishes a wide range of reports, publications, and research papers covering various aspects of the economy, financial markets, banking sector, and monetary policy. 

  • The RBI's Annual Report provides a comprehensive overview of the Indian economy, monetary policy developments, financial stability assessments, and the central bank's operations and initiatives throughout the year. It includes financial statements, policy reviews, and analysis of economic indicators.
  • The RBI publishes bi-monthly Monetary Policy Reports, which contain detailed assessments of macroeconomic conditions, inflation projections, monetary policy decisions, and policy stance. These reports provide insights into the RBI's outlook and strategies for managing monetary policy.
  • The Financial Stability Report (FSR) is published bi-annually by the RBI and assesses the overall stability of the financial system, including banking sector health, asset quality trends, risk assessments, and policy recommendations to mitigate systemic risks.
  • The RBI releases various statistical publications, including the Handbook of Statistics on the Indian Economy, Monthly Bulletin, and Reports on Currency and Finance. These publications provide comprehensive data and analysis on key economic and financial indicators, monetary aggregates, and sectoral trends.
  • The RBI publishes occasional papers, research studies, and working papers on topics related to monetary economics, financial markets, banking regulation, payment systems, and economic policy. These publications contribute to the central bank's research agenda and policy formulation.
  • The RBI issues reports and guidelines on regulatory frameworks for banks, non-banking financial companies (NBFCs), payment systems, and other financial institutions. These include circulars, notifications, and reports on regulatory developments, prudential norms, and compliance requirements.
  • The RBI Governor, Deputy Governors, and senior officials deliver speeches, addresses, and presentations at various forums, conferences, and seminars. These speeches provide insights into the RBI's policy priorities, perspectives on economic issues, and guidance on financial sector developments.
  • The RBI conducts public awareness campaigns and educational initiatives to promote financial literacy, consumer protection, and awareness about banking services, digital payments, and financial products. These campaigns aim to empower individuals with knowledge and skills for informed financial decision-making.
10. The Way Forward
The RBI's future strategy should continue to prioritize financial stability, inclusive growth, technological advancements, regulatory effectiveness, and consumer welfare. Collaborative efforts with stakeholders across sectors and proactive measures in response to emerging trends and challenges will be key to achieving these objectives effectively.
For Prelims: RBI, Monetary Policy, Pradhan Mantri Jan Dhan Yojana, UPI
For Mains: 
1. The rise of digital payments has significantly transformed the financial landscape in India. Discuss the role of the RBI in facilitating and regulating digital payments. What are the key challenges associated with digital payments? (250 Words)
2. Analyse the relationship between the RBI and the Government of India. Discuss the importance of maintaining the central bank's independence for effective monetary policy implementation. (250 Words)
3. The RBI plays a crucial role in regulating and supervising banks and financial institutions. Explain the different functions performed by the RBI in ensuring financial stability. (250 Words)
Previous Year Questions
1. With reference to the Indian economy, consider the following statements: (UPSC 2022)
1. An increase in the Nominal Effective Exchange Rate (NEER) indicates the appreciation of the rupee.
2. An increase in the Real Effective Exchange Rate (REER) indicates an improvement in trade competitiveness.
3. An increasing trend in domestic inflation relative to inflation in other countries is likely to cause an increasing divergence between NEER and REER.
Which of the above statements are correct?
A. 1 and 2 only     B. 2 and 3 only       C. 1 and 3 only        D. 1, 2 and 3

2. With reference to Indian economy, consider the following statements: (UPSC 2015)

1. The rate of growth of Real Gross Domestic Product has steadily increased in the last decade.
2. The Gross Domestic Product at market prices (in rupees) has steadily increased in the last decade.

Which of the statements given above is/are correct?

(a) 1 only       (b) 2 only          (c) Both 1 and 2                (d) Neither 1 nor 2


3. Which one of the following activities of the Reserve Bank of India is considered to be part of 'sterilization’? (UPSC 2023)

(a) Conducting 'Open Market Operations'

(b) Oversight of settlement and payment systems

(c) Debt and cash management for the Central and State Governments

(d) Regulating the functions of Non-banking Financial Institutions


4. In India, which one of the following is responsible for maintaining price stability by controlling inflation? (UPSC 2022)

(a) Department of Consumer Affairs

(b) Expenditure Management Commission

(c) Financial Stability and Development Council

(d) Reserve Bank of India


 5. With reference to India, consider the following statements: (UPSC 2021)

1. Retail investors through demat account can invest in ‘Treasury Bills’ and ‘Government of India Debt Bonds’ in primary market.
2. The ‘Negotiated Dealing System-Order Matching’ is a government securities trading platform of the Reserve Bank of India.
3. The ‘Central Depository Services Ltd.’ is jointly promoted by the Reserve Bank of India and the Bombay Stock Exchange.

Which of the statements given above is/are correct?

(a) 1 only       (b) 1 and 2 only        (c) 3 only              (d) 2 and 3 only


6. Consider the following statements (UPSC 2021)

1. The Governor of the Reserve Bank of India (RBI) is appointed by the Central Government.
2. Certain provisions in the Constitution of India give the Central Government the right to issue directions to the RBI in public interest.
3. The Governor of the RBI draws his power from the RBI Act.

Which of the above statements are correct?

(a) 1 and 2 only    (b) 2 and 3 only   (c) 1 and 3 only           (d) 1, 2 and 3

Answers: 1-C, 2-B 3-A, 4-A, 5-B, 6-C

Source: The Indian Express

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