Highlights
- Economy: The RBI Monetary Policy Committee cut the policy repo rate by 25 basis points to 6 per cent. The MPC adopted an accommodative stance, signalling further easing if inflation permits.
- Economy: March CPI inflation fell to a near six-year low of 3.2 per cent. Food inflation recorded its sixth consecutive monthly decline.
- Agriculture: India's coastline was recalculated to 11,098.81 km. Gujarat's coastline revised upward from 1,600 km to 2,340.62 km, making it the longest state coastline.
- Security: Preparations continued for anti-infiltration measures along the Line of Control following the BIMSTEC summit outcomes.
1. RBI MPC: 25 bps rate cut, accommodative stance
GS area: Economy
The Reserve Bank of India's Monetary Policy Committee unanimously cut the policy repo rate by 25 basis points at its April 2025 meeting, bringing it to 6 per cent.
- Rate cut: Repo rate reduced from 6.25 per cent to 6 per cent.
- Stance: The MPC adopted an "accommodative" stance, indicating readiness to cut rates further if inflation remains below target.
- GDP projection: Real GDP growth for 2025-26 is projected at 6.5 per cent.
- Inflation projection: CPI inflation for 2025-26 projected at 4.0 per cent. Quarterly estimates: 3.6 per cent (Q1), 3.9 per cent (Q2), 3.8 per cent (Q3), 4.4 per cent (Q4).
- MPC composition: Six members: three from the RBI and three external members appointed by the Central Government. The Governor has a casting vote in case of a tie.
- Statutory target: CPI inflation at 4 per cent with a tolerance band of plus or minus 2 percentage points.
Static linkage: Monetary policy, RBI, inflation targeting (GS-3 Economy).
2. March CPI at 3.2 per cent: near six-year low
GS area: Economy
March 2025 retail inflation (CPI) came in at 3.2 per cent year-on-year, the lowest in nearly six years.
- Food inflation: Recorded its sixth consecutive monthly decline. This drove the overall moderation.
- Vegetable prices: Sharp decline from their elevated October-November 2024 peaks.
- Pulses and cereals: Also contributed to the moderation.
- Who releases CPI: MoSPI (Ministry of Statistics and Programme Implementation) through the National Statistics Office. The RBI does not release CPI data; it only targets it.
- Significance: The reading comfortably below the 4 per cent midpoint gave the MPC room to cut rates.
Static linkage: Inflation, price indices (GS-3 Economy).
3. India's coastline recalculated: Gujarat leads
GS area: Geography
The Survey of India updated its measurement of India's coastline length using modern surveying technologies.
- New total: 11,098.81 km (revised from the earlier figure of approximately 7,516.6 km used for years).
- Gujarat's revision: From 1,600 km to 2,340.62 km, giving it the longest state coastline in India.
- Previously: Tamil Nadu and Andhra Pradesh were often cited as having the longest coastlines. The new measurement reorders this.
- Methodology change: Satellite imagery and GIS-based measurement captured intricate features like creeks, inlets, and estuaries that older land surveys missed.
Static linkage: Indian geography, coastline (GS-1 Geography).
4. One State One RRB: merger approaching
GS area: Economy, Banking
The One State One Regional Rural Bank policy, effective 1 May 2025, was being operationalised through merger processes in April.
- Policy: Consolidates RRBs within each state into a single bank.
- Outcome: 26 RRBs merged across 10 states and one Union Territory, reducing the total from 43 to 28 RRBs nationwide.
- Origin: Based on the Vyas Committee recommendations of 2005, which identified operational inefficiency and scale disadvantages in the fragmented RRB system.
- Supervision: RRBs are regulated by the RBI and supervised by NABARD.
- Ownership: Government of India (50 per cent), Sponsor Bank (35 per cent), State Government (15 per cent).
Static linkage: Banking sector, rural credit (GS-3 Economy).
5. India's current account and trade deficit management
GS area: Economy
With the RBI rate cut announced in April, commentary on India's trade deficit and current account management gained focus.
- Remittances as buffer: India's 118.7 billion dollars in remittances (2023-24) funds approximately 42 per cent of its trade deficit.
- Trade deficit drivers: High crude oil import bill (India imports over 80 per cent of its crude requirement), electronics imports, and gold.
- CAD projection: Current Account Deficit expected to remain manageable at 1 to 1.5 per cent of GDP in 2025-26.
Static linkage: Balance of payments, macroeconomics (GS-3 Economy).
6. Briefly noted
- Niveshak Didi Initiative (Phase 2): Launched in April 2025 by the Investor Education and Protection Fund Authority (IEPFA) with India Post Payments Bank (IPPB). Deploys 40,000 women postal workers as community educators across 4,000+ camps in rural, semi-urban, and tribal areas. Available in 13 Indian languages. Phase 1 showed 60 per cent of beneficiaries were women.
- Keeranatham Panchayat model: In Coimbatore, a village panchayat developed a plastic waste buyback scheme offering Rs 10 per kg. Cited as a Panchayati Raj Institution initiative on waste management.
Practice MCQs