Скачать или смотреть Indian Economy | Lecture 6 | Monetary Policy | *UPSC 2025*

Telegram Channel: https://t.me/theIASLab
Email id: [email protected]

Indian Economy Lecture series for UPSC Prelims 2025

   • Indian Economy | Lecture 1 | Microeconomic...  
   • Indian Economy | Lecture 2 | Economic Syst...  
   • Indian Economy | Lecture 3 | National Inco...  
   • Indian Economy | Lecture 4 | Economic Grow...  
   • Indian Economy | Lecture 5 | Money and Ban...  
   • Indian Economy | Lecture 6 | Monetary Poli...  

Prelims Economics Syllabus for UPSC
Indian Economy syllabus for UPSC prelims/UPSC Economics syllabus for prelims/syllabus of Economics for UPSC prelims:
Economic and Social Development: sustainable development, poverty, inclusion, demographics, social sector initiatives, etc.
Here, you must cover topics such as economic growth and development, finance, banking, budget, balance of payments, poverty and related issues, population composition and related characteristics, social sector initiatives related to education, health and sanitation, and international financial institutions.
Important area to focus in the UPSC economy syllabus:
• Economic growth and development – basic concept and definition of economy and economics, uses and transfer of resources, distributive effects, macro and micro economic policy, micro-macro balance, distributive impact of economic policies, development versus growth, determinant of growth and development, concepts such as HPI/MPI, HDI, PQLI, GEM, GDI/GII, TAI, Green index, sustainable development, India’s ranking in the various indices.
• Poverty – definitions, causes, distribution-deprivation, income versus calories, measurement of poverty, status of poverty, eradication programmes, poverty and resource policy, tribal rights and issues, livelihood mission.
• Inclusion – definition, relevance, types, financial inclusion, recent initiatives.
• Demographics – census data, populations by gender, by state, by age group, socio-economic status, caste, religion, literacy levels, etc. Trends in human development – interstate comparison, etc.
• Fiscal policy – definition, component, receipts, revenue and capital account, tax revenue, expenditure, budget.
• Social issues – financing health policy, education policy, sanitation, drinking water, social security, infrastructure policy, international trade issues, regional cooperation.
• Also, focus on issues currently in news related to the above topics – MNERGS, MSMEs, Make in India, industrial corridors, NITI Ayog, black money, international treaties and organisations, India’s policies with neighbours.
What is Monetary Policy?
It is a macroeconomic policy tool used by the Central Bank to influence the money supply in the economy to achieve certain macroeconomic goals. It involves the use of monetary instruments by the central bank to regulate the availability of credit in the market to achieve the ultimate objective of economic policy.
Objectives of Monetary Policy

Some of its major objectives are as follows:

Accelerating the growth of the economy.
Maintaining price stability.
Generating employment.
Stabilizing the exchange rate.
Types of Monetary Policy

Broadly, there are two types of monetary policy – Expansionary Monetary Policy, and Contractionary Monetary Policy.
What is Expansionary Monetary Policy?

It is also called Accommodative Monetary Policy.
Its primary purpose is to increase the money supply in the economy through measures such as:
Decreasing interest rates – It makes it less expensive for consumers to borrow money, thus increasing the money supply in the market.
Lowering reserve requirements for banks – It leaves commercial banks with more money to lend to the public, thus infusing more money into the economy.
Purchasing government securities by central banks – The RBI buys government securities by paying cash. This means that money available in the market increases.
It is aimed at fueling economic growth by stimulating business activities and consumer spending and also helps to lower unemployment rates.
However, it may have an adverse effect of occasional hyperinflation.

What is Contractionary Monetary Policy?

It is used to decrease the amount of money supply in the economy through measures such as:
Raising interest rates – It makes it more expensive for consumers to borrow money, thus reducing the money supply in the market.
Increasing the reserve requirements for banks – It leaves commercial banks with less money to lend to the public, thus reducing the money supply in the economy.
Selling government bonds – The buyers of government securities pay cash to the RBI. This means that money available in the market decreases.
It is aimed at reducing inflation.