There are two situations when RBI makes use of the LAF window.
1. If inflation is higher than required, meaning economy as a whole may have more liquidity or
money supply or cash with public is very high. So people purchase more goods and services,
hence demand goes up, prices start going up, inflation goes up.
So the RBI raises the repo rate. As the repo rate goes up, banks take less liquidity/cash from
banks since cash has become costlier (because repo has gone up). As banks take less money
from RBI because of higher repo rate, they increase their lending rate. As the lending rate goes
up, the people take less loans from banks as it becomes costly for them to get funds from
banks. So money supply (cash +deposits) goes down, people having less money demand
less...less mobiles,tvs, bikes etc are purchased, automatically demand comes down and inflation
comes down.
2. If GDP/country's income is not growing at a sufficient rate, that means RBI wants the
economy to grow faster, RBI will want people to increase their demand. That can happen if they
have more money. Clearly money supply has to go up. If banks start giving more loans, people
get more funds which they spend or invest resulting in demand going up. The banks take more
money from RBI when the repo rate comes down. Repo going down- means banks have to pay
less interest rate on the loans they take from RBI. If repo comes down, obviously banks will
take more loans from RBI and what will they do with the money- increase the amount of loans
they give- how? By decreasing the lending rates.... if lending rates at banks go down... economic
agents will take more cash/loans from the banks- people purchase and invest more- demand
goes up- GDP/income starts rising.
This is how RBI achieves the objectives of the monetary policy by managing liquidity through the
repo rate.

(07-04-2021)
How does the RBI make use of the Liquidity Adjustment Facility (LAF) or the repo window to achieve the objectives of monetary policy?  (250 words)
There are two situations when RBI makes use of the LAF window.
1. If inflation is higher than required, meaning economy as a whole may have more liquidity or
money supply or cash with public is very high. So people purchase more goods and services,
hence demand goes up, prices start going up, inflation goes up.
So the RBI raises the repo rate. As the repo rate goes up, banks take less liquidity/cash from
banks since cash has become costlier (because repo has gone up). As banks take less money
from RBI because of higher repo rate, they increase their lending rate. As the lending rate goes
up, the people take less loans from banks as it becomes costly for them to get funds from
banks. So money supply (cash +deposits) goes down, people having less money demand
less...less mobiles,tvs, bikes etc are purchased, automatically demand comes down and inflation
comes down.
2. If GDP/country's income is not growing at a sufficient rate, that means RBI wants the
economy to grow faster, RBI will want people to increase their demand. That can happen if they
have more money. Clearly money supply has to go up. If banks start giving more loans, people
get more funds which they spend or invest resulting in demand going up. The banks take more
money from RBI when the repo rate comes down. Repo going down- means banks have to pay
less interest rate on the loans they take from RBI. If repo comes down, obviously banks will
take more loans from RBI and what will they do with the money- increase the amount of loans
they give- how? By decreasing the lending rates.... if lending rates at banks go down... economic
agents will take more cash/loans from the banks- people purchase and invest more- demand
goes up- GDP/income starts rising.
This is how RBI achieves the objectives of the monetary policy by managing liquidity through the
repo rate.

(06-04-2021)
Agriculture in India suffers from inadequate infrastructure and extension services. Discuss (200 words)
The Indian agriculture sector accounts for 18% of India's GDP and provides employment to
nearly 50% of the country's workforce. However, inadequate infrastructure and extension
services are significant constraints to agriculture growth and productivity.
Agriculture Extension is the application of scientific research and knowledge to agriculture
practices through farmers education. In general, it is the delivery of information inputs to
farmers.
Reasons for inadequate infrastructure and extension services:
* Limited water resources for irrigation.
* lack of investment, power supply
* Inadequate funds
* Poor road connectivity (Transportation)
* Using outdated farming technologies
* lack of timely access, awareness, infrastructure.
* Digital illiteracy
Investment in infrastructure leads to reduced costs per unit of input, rural
employment, enhanced productivity, capacity building and poverty alleviation.
Government Policies for agriculture development:-
* Pradhan Mantri Gram Sadak Yojana,2000
* Agriculture Infrastructure Fund.
*PM Kisan Sampada Yojana (PMKSY)
*UP's Food Processing Industry Policy, 2017
*Deen Dayal Upadhyaya Gram Jyoti Yojana,2015
*New AGRI-UDAAN Programme
*Agri-Clinic & Agri-Business centres ( ACABC)
*E-Krishi Samvad , National Infrastructure pipeline
*Apps like Kisan Suvidhaa, Smart Gaon , M-kisan etc.
* Micro - irrigation
Way Forward :-
* promoting technologies and reforming agriculture research and extension management.
Ex:-ATMA mode in Assam & UP.
* Timely disbursement of funds for projects.
* encouraging Public-Private-Partnership models.
* Focus on post - harvest projects .
* provisions of warehouses, cold storage units, ripening chambers , e-marketing platforms etc.
* Water & rainfed agriculture development
* Soil- reclamation efforts.
* increasing Agricultural insurance, Rural credit.
* Time- bound implementation of policies even at local level and steps to reduce red Taoism will
go a long way improving the agricultural situation in India.

  (05-04-2021)
Discuss the prevalent prejudices and stereotypes existing in Indian Society against women. Also suggest remedial measures. (250 words)
India is a patriarchal society, where men are given more importance than women, since ages. This has
resulted in discrimination and deprived women for a long time, restricting them from achieving things
they could.
Often confused prejudices and stereotypes are two completely different topics.
Prevalent prejudices against women in Indian society include –
• Women have weak physique
• They lack leadership qualities
• They are weak at mathematics
• They are weak at technical/mechanical work
• In rural India women are considered financial burden on family
Prevalent stereotypes against women in Indian society include –
• All girls like pink and love to play with dolls
• Girls like to dance and paint
• Girls are more creative than boys
• Girls are more emotional and cry often
• Girls are understanding
• Girls are conscious about their appearance
The result of these stereotypes and prejudices are excruciating. Little things said to children have huge
impact on their lives throughout. Not being able to live their dreams to the fullest, living a dependent
life, not being able to learn what they wish to, burden of early marriage, not being able to express
themselves etc. This also hits hard on their morale and this reduces their confidence on themselves.
Women have proven all these stereotypes and prejudices wrong by achieving success in almost all the
fields they have entered. Personalities like Mary Kom, Bachendri Pal, Indira Nooyi, Indira Gandhi,
Karnam Malleshwari, Mother Teresa, Kalpana Chawala all of whom can be taken into consideration.
Women form half of the population and can play a crucial role in achieving India’s goal of $5 trillion
economy. This way we can radically bring change in our society and make India a better place for living.


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