1. What is the difference between fiscal and monetary policy?

Fiscal policy refers to the government’s use of taxation and expenditure to influence the
economy. It’s managed by the Finance Ministry. Monetary policy, on the other hand, is
controlled by the Reserve Bank of India (RBI) and uses tools like repo rate or CRR to
manage liquidity and inflation.

As someone from a technical background and having worked in Infosys, I understood how
large government projects and spending (fiscal tools) can boost sectors like IT and
infrastructure. Meanwhile, when RBI adjusts interest rates, it impacts not just the corporate
world but also household savings and loans—something I observed personally during my
time in the workforce.

Both policies must align to steer economic growth. For example, in a recession, fiscal
stimulus and lower interest rates together can revive demand.

2. What are the tools RBI uses to control inflation?

To control inflation, the RBI uses several monetary policy tools, including:

● Repo rate: The rate at which banks borrow from RBI. Higher repo = costlier loans =
less inflation.

● Reverse Repo rate: Rate at which RBI borrows from banks.

● CRR (Cash Reserve Ratio): Percentage of funds banks must keep with RBI.

● SLR (Statutory Liquidity Ratio): Minimum amount of liquid assets banks must
maintain.

● Open Market Operations: Buying/selling govt securities to control liquidity.

As someone who has cleared competitive exams and worked in IT, I appreciate how policy
tools directly affect interest rates, EMIs, and even hiring in sectors like real estate or IT. An
informed citizen must know how inflation control protects both the poor and investment.

3. What does a rising fiscal deficit imply?

A rising fiscal deficit means the government is spending more than it earns, excluding
borrowings. While moderate deficits are acceptable to fund welfare and infrastructure,
persistent high deficits can lead to inflation, higher borrowing, or reduced private investment
(crowding out effect).
As a defense aspirant and former Infosys employee, I see both sides—defense needs heavy
public funding (a reason for deficits), but uncontrolled spending can delay private sector
reforms. The key is to balance growth with sustainability. India’s capital investments, if
well-targeted, can justify temporary fiscal stress.

4. Explain India’s current economic position post-COVID.

Post-COVID, India has shown a strong V-shaped recovery in GDP, but with uneven growth.
The formal sector (tech, finance) recovered quickly, but informal and MSMEs still struggle.
Inflation is sticky due to global oil prices, while unemployment among youth is still high.

As someone who left a job to pursue government services and saw both formal employment
and volunteer work, I understand the gap in opportunity. India’s digital and startup ecosystem
is thriving, but rural income and skill mismatches need attention. For long-term growth,
skilling, health, and infrastructure must be priorities.

5. How does Make in India impact GDP and jobs?

Make in India aims to boost domestic manufacturing and reduce dependence on imports. It
impacts GDP positively through increased investment, FDI, and job creation in core sectors
like electronics, defense, and textiles.

Given my engineering background and experience in the IT sector, I see this policy as a
major opportunity. Tech companies can partner with manufacturers for automation and smart
solutions. If properly implemented, Make in India can help solve India’s job crisis by moving
surplus labor from agriculture to skilled manufacturing.

However, red tape, infrastructure, and skill gaps are challenges that need attention.

6. What are the risks of privatization?

Privatization can improve efficiency and innovation, especially in sectors where the
government is not the best operator (e.g., telecom, airlines). But risks include:

● Job loss due to cost-cutting

● Loss of social responsibility in profit-driven firms

● Monopolies if regulation is weak

● Potential neglect of strategic sectors like defense or railways

During defense prep, I realized the value of state-run services like DRDO or HAL, which
serve national interests. While I support privatization in sectors like banking or retail, it must
be strategic, not sweeping, and with strong regulatory oversight.

7. How is unemployment measured and tackled in India?

India uses several methods:

● Periodic Labour Force Survey (PLFS) by NSSO

● Unemployment Rate = (Unemployed / Labour Force) × 100

● Types include: open, disguised, educated, underemployment

Schemes like PMKVY (skill training), MGNREGA (rural jobs), and Startup India are tackling
this issue.

As someone who has experienced both private sector work and public service aspirations, I
understand how educated youth face underemployment. The solution lies in matching skills
with demand, improving education, and promoting entrepreneurship, especially in Tier-2/3
cities.

1.

Is India ready to become a $5 trillion economy?

India has set an ambitious target to become a $5 trillion economy. While progress is evident
in sectors like IT, digital payments, and renewable energy, challenges persist—especially in
informal employment, infrastructure, and education.

With reforms like GST, Make in India, and PLI schemes, the foundations are being laid.
However, structural issues such as low female workforce participation, income inequality,
and skills mismatch remain.

As someone from a technical and defense-prep background, I believe India’s young

population is its biggest strength—but only if we invest in their skill development and health.
India is on the right track, but sustained political will, public-private coordination, and
inclusive growth are essential for reaching the $5 trillion goal in a meaningful way.

2.

Should RBI be independent of political influence?

The RBI plays a critical role in managing inflation, interest rates, and currency stability. It
must remain independent and apolitical to maintain credibility and investor confidence.

While coordination with the government is necessary for fiscal-monetary alignment, political
interference can distort long-term financial stability. For instance, excessive pressure to
lower interest rates before elections might worsen inflation.

During my professional career and exam prep, I’ve seen how decisions like repo rate cuts
affect loans, investments, and even job markets. Hence, I believe the RBI’s autonomy must
be preserved, while maintaining a consultative relationship with the government for holistic
policymaking.

3.

Make in India – A real booster or just a slogan?

Make in India began with great ambition—to boost domestic manufacturing, generate jobs,
and reduce imports. While FDI inflows and PLI schemes show some success, challenges
like red tape, skill gaps, and logistics still limit full impact.

As an engineer with corporate experience, I saw how India’s digital potential could integrate
well with manufacturing, especially with AI and automation. If executed with strong
infrastructure and vocational skilling, Make in India can indeed become a game-changer, not
just a slogan.

It’s a booster—but it needs fuel: policy stability, ease of doing business, and consistent
long-term focus.

4.

Is fiscal deficit harmful or necessary?

A moderate fiscal deficit is often necessary to fund infrastructure, welfare schemes, and
economic recovery, especially during crises like COVID-19. However, a persistent high
deficit may lead to inflation, crowding out of private investment, and reduced
creditworthiness.

As someone who has studied public finance and seen its real-world effects during economic
slowdowns, I feel deficits are tools—neither good nor bad by themselves. It’s how they’re
used that matters. Productive investment in health, education, and digital infrastructure
justifies a deficit. But populist spending without long-term returns can be damaging.

5.
Role of startups in reshaping India’s economy

Startups are transforming India’s economy by solving local problems with innovative
solutions—in health, fintech, education, and logistics. They create jobs, attract foreign
capital, and promote digital inclusion.

India is the world’s third-largest startup ecosystem. Government initiatives like Startup India
and easier compliance norms have helped, but funding winter and regulatory clarity are
ongoing concerns.

Coming from a tech and entrepreneurial exposure, I view startups as a crucial link between
youth potential and national growth. They’re not just wealth creators—they’re ecosystem
builders that foster self-reliance, innovation, and resilience in India’s economic journey.

6.

The impact of AI on employment and productivity

AI has the potential to drastically improve productivity across sectors—automating repetitive

tasks, improving decision-making, and optimizing logistics. However, it also threatens routine
jobs, especially in BPOs, transport, and low-skill industries.

India needs a dual approach: upskilling and re-skilling of the workforce, along with ethical AI
governance. AI can create new jobs in data science, robotics, and design—but only if
education aligns with future needs.

With a background in IT and pageant participation where soft skills matter, I see AI as a
collaborator, not a competitor—if we learn how to use it effectively.

7.

Should India remove all subsidies?

Subsidies ensure social equity—supporting the poor in food, fuel, and education. But
indiscriminate subsidies also burden the fiscal budget and may lead to inefficiencies or
misuse.

Instead of removing all subsidies, India should shift to targeted, direct benefit transfers (DBT)
and sunset clauses. Subsidies in sectors like LPG or electricity can be restructured based on
income levels.

As someone who has seen rural and urban divides during NGO work, I feel well-designed
subsidies empower the poor and promote social justice. But blanket subsidies without review
hinder innovation and drain national resources.
8.

Does economic growth always mean social progress?

Not necessarily. GDP growth may increase national wealth, but without equitable
distribution, it can widen the gap between rich and poor.

True progress includes education, health, gender equality, and environmental sustainability.
For example, high GDP with high child malnutrition doesn’t reflect real progress.

Having worked in both the private sector and social causes, I believe we must look beyond
numbers. India’s growth should be inclusive and human-centered—where no one is left
behind in the name of development.

9.

Digital economy: Empowering or excluding?

The digital economy has empowered millions through UPI, e-commerce, online education,
and telemedicine. It has increased transparency and financial inclusion.

However, it also risks excluding those without digital literacy or internet access, especially in
rural areas. The digital divide can worsen social inequalities if not addressed.

From a tech and volunteer perspective, I believe the digital economy must be designed to
include—not just expand. Government and private players must invest in infrastructure,
vernacular content, and skilling to make digital truly inclusive.

10.

Should India adopt Universal Basic Income (UBI)?

UBI offers every citizen a fixed income regularly, regardless of employment. It could simplify
welfare systems, reduce poverty, and give people the freedom to upskill or innovate.

But implementation challenges include high fiscal cost, inflation risk, and the need to phase
out inefficient subsidies. UBI must be piloted and refined before nationwide adoption.

As someone who has prepared for defense and understands rural hardships, I see UBI as a
promising idea—but not a silver bullet. India should experiment cautiously and focus on
digital DBT to move in that direction.