CURRENT AFFAIRS 08 February, 2025

CURRENT AFFAIRS 08 February, 2025

1. REPO RATE CUT AND ITS IMPLICATIONS –

• The Monetary Policy Committee (MPC) of Reserve Bank of India cut the repo rate to 6.25% from 6.5% (25 basis points (bps)) for the first time in 5 years (since 2020).
• After the Union Budget 2025-26 reduced personal income tax to spur consumption, this step aims to revive economic growth amid a slowdown.
• Growth-Stimulating Budget: The Union Budget 2025-26 introduced a personal income tax cut and revised TDS limits, increasing disposable income.
• The RBI’s repo rate cut supports the government’s tax reductions by lowering borrowing costs and sustaining demand.
• Declining Inflation: Consumer Price Index (CPI) eased to 5.22% in December 2024, a four-month low, down from 5.48% in November that provides room for monetary easing.
• Market Liquidity Enhancement: The RBI recently introduced measures to improve liquidity in the banking system by injecting Rs 1.5 trillion.
• Liquidity injection eased tight credit markets, while the repo rate cut ensured liquidity and lower rates to boost growth.
• Global Economic Uncertainty: The recent US tariffs on Canada, Mexico, and China sparked trade war fears, weakening the rupee to 87.29 per dollar and raising inflation risks.
• A repo rate cut could help cushion the impact of external shocks and support domestic growth.

2. UNION BUDGET 2025-26 MEASURES TO BOOST MSMES –

• The Union Budget for 2025-26 has introduced a series of significant measures to enhance the Micro, Small, and Medium Enterprises (MSME) sector, recognising its vital role in driving India’s economic growth.
• Increased Investment and Turnover Limits: Investment limits raised by 2.5 times and turnover limits by 2 times to allow MSMEs to scale operations and adopt better technology.
• This will enable more businesses to qualify as MSMEs and avail government incentives.
• Enhanced Credit Availability: Credit guarantee cover increased from Rs 5 crore to Rs 10 crore for micro and small enterprises, unlocking Rs 1.5 lakh crore in additional credit over five years.
• Startups’ guarantee cover doubled from Rs 10 crore to Rs 20 crore, with a reduced fee of 1% for loans in 27 priority sectors.
• Exporter MSMEs eligible for Rs 20 crore term loans with enhanced guarantee cover, encouraging international trade.
• MSME Credit Cards: The 2025 budget introduces MSME credit cards to boost growth and streamline loan access, with experts urging reduced bureaucratic hurdles.
• Rs 5 lakh credit facility will be provided for micro-enterprises registered on the Udyam portal, with 10 lakh cards to be issued in the first year.

3. DELHI ELECTION RESULTS 2025 –

• The Delhi Assembly Elections 2025 have begun, and as the counting of votes takes place, the citizens of the capital are eager to see who will form the government for the next five years.
• The competition in Delhi is fierce, with the Aam Aadmi Party (AAP), led by Arvind Kejriwal, and the Bharatiya Janata Party (BJP), seeking to reclaim power after 27 years, as the primary contenders. Below, we provide a detailed list of the leading candidates, their respective parties, and constituencies in the Delhi Vidhan Sabha.

4. INDIA ACHIEVES 100 GW SOLAR POWER CAPACITY –

• India has achieved a major milestone in its renewable energy journey by reaching 100 gigawatts (GW) of installed solar power capacity. This achievement is a crucial step in the country’s goal of transitioning to cleaner energy sources and reducing its dependence on fossil fuels.
• The milestone, announced by Union Minister Pralhad Joshi, highlights India’s progress in meeting its renewable energy commitments.
• India had set a target of installing 100 GW of solar power capacity by 2022. However, due to multiple challenges such as land acquisition issues, financing difficulties, and supply chain disruptions, the target was delayed.
• As of June 2023, India had installed 70.10 GW of solar power, with an additional 55.90 GW in various stages of implementation.

5. HIMACHAL SETS STAGE FOR NORTH INDIA’S FIRST GREEN HYDROGEN FACILITY –

• In a significant step toward green energy transition, Himachal Pradesh has initiated North India’s first Green Hydrogen Plant at Dabhota in Nalagarh, situated in the state’s industrial belt of Baddi-Brotiwala and Nalagarh near Chandigarh.
• Chief Minister Sukhwinder Singh Sukhu laid the foundation stone for the 1 MW plant, which aligns with the state’s goal of becoming India’s first green state by March 31, 2026.
• The Himachal Pradesh Power Corporation Limited (HPPCL), in collaboration with Oil India Limited, will develop this project at a cost of ₹9.04 crore. The plant is expected to be operational within a year and will contribute to reducing carbon emissions by utilizing renewable energy sources for hydrogen production.

MCQ QUIZ

Q1.  Which country has developed Iskander-M tactical ballistic missile ?

1. a) Russia
2. b) China
3. c) Japan
4. d) South Korea

Q2.  PRASAD Scheme was launched by which ministry?

1. a) Ministry of Culture
2. b) Ministry of Tourism
3. c) Ministry of Defence
4. d) Ministry of Home Affairs

Q3.  Which Indian city is home to Fort William, recently renamed Vijay Durg ?

1. a) Mumbai
2. b) Chennai
3. c) Hyderabad
4. d) Kolkata

Q4.  Which of the following statements is/are correct regarding the Monetary Policy Committee (MPC) ?

1. It decides the RBI’s benchmark interest rates.
2. It is a 12-member body including the Governor of RBI and is reconstituted every year.
3. It functions under the chairmanship of the Union Finance Minister.

          Select the correct answer using the code given below :

1. a) Only 1
2. b) Only 1 and 2
3. c) Only 3
4. d) 2 and 3 only

Explanation-

          First statement is correct. The MPC is responsible for setting the benchmark interest rates (repo rate) to achieve the inflation target set by the Government of India.

          Second statement is incorrect. The MPC consists of only six members: three RBI officials and three external members nominated by the Government of India. The RBI Governor is the ex-officio Chairperson, and the committee is not reconstituted every year.

          Third statement is incorrect. The MPC functions under the chairmanship of the RBI Governor, not the Union Finance Minister.

Q5.  Which of the following is the most likely implication of the U.S. President’s memorandum to modify or rescind sanctions waivers related to Chabahar Port ?

1. India may lose access to a key trade route, resulting in increased dependence on Pakistan for trade with Afghanistan and Central Asia.
2. India’s diplomatic relations with the U.S. may become more strained, given the continued partnership with Iran over Chabahar, which contradicts U.S. sanctions.
3. Afghanistan’s trade and economic stability could significantly improve, as the port will be fully under U.S. sanctions, boosting its own domestic economy.
4. India might strengthen its ties with regional powers like China and Russia.

          Select the correct answer using the code given below:

1. a) 1 and 2 only
2. b) 2 and 3 only
3. c) 1, 2, and 4 only
4. d) 2 and 4 only

Explanation-

          Statement 1 is correct. If Chabahar Port access is lost, India will be dependent on Pakistan for trade with Afghanistan and Central Asia, as Chabahar serves as an alternative route.

          Statement 2 is correct. India’s continued involvement in Chabahar may strain its relations with the U.S. due to the ongoing conflict with U.S. sanctions on Iran.

          Statement 3 is incorrect. The sanctions on Chabahar Port could hurt Afghanistan’s trade and economic stability, as it relies on India’s access to the port for growth.

          Statement 4 is correct. If India loses access to Chabahar, it may seek to strengthen its ties with other regional powers like China and Russia while leveraging multilateral platforms like BRICS and the SCO to mitigate the loss.

Answer Key