Citi's Chakraborty on India's Economy

The video discusses the impact of global economic slowdown on India, highlighting opposing effects on GDP growth and inflation. It explores the Reserve Bank of India's (RBI) monetary policy response, including interest rate adjustments to control inflation. The discussion extends to inflation's impact on food, energy, and wages, emphasizing the need for joint policy actions. The video also examines the formalization of India's economy, noting a shift in market share towards larger companies during the pandemic. Finally, it addresses the rupee's valuation amidst external sector pressures and RBI's intervention strategies.

What are the two opposing effects of the global slowdown on India?

• Reduced export growth and increased GDP

• Increased export growth and reduced GDP

• Increased export growth and higher commodity prices

• Reduced export growth and benefits from lower commodity prices

What is the current policy rate set by the RBI?

• 4.0%

• 4.9%

• 5.5%

• 6.0%

What is one limitation of the RBI in controlling inflation?

• It cannot adjust interest rates

• It cannot control food and energy prices alone

• It cannot control wage growth

• It cannot affect inflation expectations

What has been the impact of formalization on larger companies in India?

• Decreased profitability and employment

• Increased market share and profitability

• Decreased wage growth

• Increased competition from smaller companies

What is the expected current account deficit as a percentage of GDP?

• 2.5%

• 4.0%

• 3.4%

• 5.0%

How does the RBI manage the rupee against other currencies?

• By allowing it to float freely

• By pegging it to the US dollar

• By keeping it within a narrow band against a basket of currencies

• By fixing it to the Euro

What range is the RBI currently maintaining for the rupee against the dollar?

• 70 to 72

• 80 to 82

• 75 to 77

• 77 to 79