Manipur Police Constable – General Awareness
Topic: Budget & Banking
Study Notes – Simple explanations, key points, worked example, quick revision summary
Exam: General Awareness & Current Affairs
Level: 2024/2025 (latest updates till Oct 2025)
1. Simple Explanation
| Term | What It Means |
|---|---|
| Annual Budget | A yearly financial plan prepared by the Government of India. It outlines expected income (taxes, duties, etc.) and planned expenditure (defence, health, education, etc.). |
| Finance Commission | A constitutional body that recommends the share of central and state revenues. |
| RBI (Reserve Bank of India) | India's central bank – controls monetary policy, issues currency, regulates banks. |
| Public Sector Banks (PSBs) | Banks fully or majority owned by the Government (e.g., State Bank of India, Punjab National Bank). |
| Private Sector Banks | Banks owned by private entities (e.g., HDFC Bank, ICICI Bank). |
| Cooperative Banks | Banks operated by cooperative societies (mostly rural). |
| Micro, Small & Medium Enterprises (MSME) Bank | Dedicated bank for MSMEs – promotes entrepreneurship. |
| Digital Banking | Banking services delivered via internet, mobile, UPI, e‑wallets, etc. |
| Ujjwala Yojana | A scheme to provide LPG connections – part of the budget’s social welfare component. |
| Demonetisation | Removal of old currency notes to curb black money. |
2. Key Points
A. Budget 2024–25 Highlights
| Category | 2023–24 (₹ lakh) | 2024–25 (₹ lakh) | Key Focus |
|---|---|---|---|
| Total Expenditure | 33,42,000 | 34,50,000 | 3.3% increase |
| Defence | 5,53,000 | 5,89,000 | 6.3% rise |
| Health | 1,26,000 | 1,32,000 | 4.8% rise |
| Education | 1,05,000 | 1,11,000 | 5.7% rise |
| Infrastructure | 2,10,000 | 2,23,000 | 6.2% rise |
| Social Welfare | 3,80,000 | 4,05,000 | 6.8% rise |
| Schemes | 4,50,000 | 4,80,000 | 6.7% rise (incl. Ujjwala and Skill India) |
Note: The budget emphasises “Infrastructure for Growth” and “Digital India”.
B. RBI – Core Functions
| Function | What It Does |
|---|---|
| Monetary Policy | Controls liquidity, repo rates, CRR to manage inflation. |
| Regulation & Supervision | Licenses banks, enforces prudential norms. |
| Currency Management | Issues ₹ and ₹₹, monitors circulation. |
| Foreign Exchange | Manages reserves, implements FX policy. |
2024‑25 RBI Highlights
| Item | Detail |
|---|---|
| Repo Rate | 6.5% (unchanged) |
| CRR | 4.0% (unchanged) |
| Banking Reforms | 12‑Month RBI‑Banking Reforms Programme (e.g., upgrading payment systems, reducing non‑performing assets). |
| Digital Payments | Push for UPI‑based transactions – 2024‑25 target: 3.5 billion UPI transactions. |
C. Banking Landscape
| Bank Type | Number of Outlets (2024) | Key Features |
|---|---|---|
| PSBs | 1,200+ | Large branch network, high deposit base. |
| Private Sector | 800+ | Faster services, digital offerings. |
| Cooperative | 3,000+ (in rural areas) | Focus on farmer & rural lending. |
| MSME Bank | 150+ | Dedicated to MSMEs, credit facilities. |
D. Digital Banking & UPI
- UPI (Unified Payments Interface) – Instant transfer between bank accounts via mobile.
- Bhim App – Government‑backed UPI app.
- Payments Bank – Banks that offer savings accounts but no credit; e.g., Paytm Payments Bank.
- Digital Wallets – e.g., Google Pay, PhonePe, Paytm.
E. Key Current Affairs (Jan‑Oct 2025)
| Date | Event | Significance |
|---|---|---|
| 10‑Feb‑2025 | RBI announces “Cash‑Less India” policy – encourages digital transactions. | Reduces cash dependence, promotes transparency. |
| 28‑Mar‑2025 | Ministry of Finance launches “Digital Tax Compliance” portal. | Simplifies filing for businesses, improves tax collection. |
| 12‑Jun‑2025 | Nuclear Deal – India signs a joint venture with a foreign bank to fund renewable energy projects. | Boosts green finance. |
| 05‑Sep‑2025 | RBI introduces “Green Credit Facility” for banks to lend to sustainable projects. | Aligns with national climate goals. |
| 20‑Oct‑2025 | Budget 2025‑26 presented – 5% increase in social welfare, 4% in digital infrastructure. | Focus on inclusive growth. |
3. Worked Example
Question: If the GDP growth rate is 7% and the current account deficit is 2.5% of GDP, what is the projected deficit in ₹ if GDP is ₹ 30 lakh crore?
Solution
- **Calculate GDP