Orange Economy 

 

Introduction and Explanation

• The Orange Economy, also referred to as the creative economy, encompasses economic phenomena which are derived from culture, art, media, innovation, and intellectual property rights.
• The sectors this economy covers include film, music, design, video games, publishing, the performing arts, advertising, and digital content creation. 

 

Key Features

• The Orange Economy is culturecentric where it leverages a nation’s unique heritage, art, and language as its primary drivers.
• It is a talentdriven economy that significantly depends on individual creativity, enhanced and shared through digital mediums.
• The Orange Economy also heavily focuses on intellectual property, generating revenue through copyrights, trademarks, and digital intellectual property.
• Lastly, it presents an industry with high potential for job creation, offering vast employment opportunities in sectors such as media, design, and technology.

 

Significance and Potential Impact

• The Orange Economy can significantly boost the soft power of a country, in this case, India’s cultural influence on a global scale, through entertainment and storytelling.
• The global creative economy is estimated to be valued at over $2.25 trillion (UNCTAD, 2023) which presents a huge potential for supporting GDP growth. India’s Media and Entertainment (M&E) sector alone is already valued at $28 billion (2025) with projections for growth up to $100 billion.
• Additionally, the Orange Economy provides dynamic career paths for India’s young workforce, catering to their creativity and technological skills.

 

Current Event  World Audio Visual and Entertainment Summit

• At the recent World Audio Visual and Entertainment Summit (WAVES) 2025 in Mumbai, the Prime Minister of India advocated for the Orange Economy.
• He called for global companies to tap into India's burgeoning creative economy with the clarion call to “Create in India, Create for the World.” This highlights the country's intent to become a significant player in the global Orange Economy scene.

 

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Framework for Standardising Regulation Formulation & Public Feedback Process

 

Introduction and About

• The Reserve Bank of India (RBI) has introduced an allencompassing Framework for the Formulation of Regulations, which is designed to standardise regulatory procedures.
• This framework brings uniformity, transparency, and responsibility in creating and revising regulatory mechanisms.
•  It includes all sorts of regulations, including directions, guidelines, notifications, policies, and standards issued by the RBI.

 

Public Consultation and Impact Assessment

• The new framework involves a public consultation process where draft regulations are to be published on the RBI's website alongside a Statement of Particulars and set open for public responses for a minimum of 21 days.
• Additionally, the draft needs to mention its objective, an impact analysis, in addition to reference to international best practices and global standards.

 

Feedback and Reviews

• The RBI is required to publish a general response to the public comments received, accompanying the final regulations.
• Existing regulations will also undergo periodic reviews based on supervisory feedback, global practices, and its relevance in the everchanging environment.

 

Importance and Benefits

• This framework promotes regulatory transparency and inclusivity by involving the public and other experts in its policymaking process.
• Because it combines public and expert input with evidencebased policymaking, it aligns Indian regulatory governance with global benchmarks.
• By eliminating unnecessary overlaps and updating regulations according to current needs, it attempts to enhance regulatory efficiency.

 

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The International Monetary Fund (IMF)

 

Introduction and About IMF

• The International Monetary Fund (IMF) is a leading financial institution at global level.
• Its primary objective is to promote international monetary cooperation, economic stability, and trade expansion.
• The IMF was established as a component of the Bretton Woods Agreement with a mandate to establish a global economic order postWorld War II.
• The institution was established in 1945 and has been operational since 1947. 
• The head office of IMF is situated in Washington D.C., United States.

 

Functioning of the IMF

• The IMF carries out its duties in three key ways: Surveillance, Capacity Building, and Lending.
• The 'Surveillance' involves monitoring both global economy and national economic developments, presenting information through significant reports such as the 'World Economic Outlook' and 'Global Financial Stability Report'.
• Through 'Capacity Building', the IMF provides policy advice and technical training in areas such as public finance, monetary policy, data analytics, and governance.
• In 'Lending', the IMF offers both short and longterm financial support to help countries manage balanceofpayment crises.

 

IMF and its Funding

• The IMF's primary source of funding is member country quotas which are determined by each country’s significance in the world economy.
• The Special Drawing Rights (SDRs) further supplement reserves, boosting liquidity in the global financial system.

 

IMF Loan Instruments

• The IMF has various loan instruments available to support countries in different scenarios.
• The Extended Fund Facility (EFF) is designed to aid structural economic reforms.
• The Resilience and Sustainability Facility (RSF) focuses upon the improvement of longterm economic sustainability.
• The Standby Arrangements (SBA) provides swift support during times of financial crisis.
• The loans provided by IMF often carry conditionality, known as 'Structural Adjustment Programs', which necessitate recipient countries initiating economic reforms.

 

Current IMF News Regarding India and Pakistan

• Recently, India abstained from the IMF vote that approved new financial assistance measures for Pakistan.
• India conveyed concerns over Pakistan’s repeated misuse of IMF funds and its poor reform actions tied to crossborder terrorism risks.

 

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Gaps in India's Bankruptcy Resolution Process as Flagged by Supreme Court

 

Introduction and About

• The Supreme Court (SC) of India recently raised concerns over the efficacy of the Insolvency and Bankruptcy Code (IBC), 2016.
• The SC invoked Article 142 to reject a resolution plan under the IBC and ordered liquidation of a debtladen company.
• This raises questions about the capability of the IBC to facilitate timely and constructive resolutions.

 

Key Issues Highlighted by the Supreme Court

• The resolution plan for Bhushan Power & Steel Ltd. did not comply with Section 30(2) of the IBC, thereby not acting in the best interests of the creditors.
• The Resolution Professionals (RPs) displayed lack of diligence and enabled a flawed resolution plan to move forward.
• The Committee of Creditors (CoC), while evaluating the resolution plan, failed to exercise business acumen and adequate scrutiny, consequently compromising creditors' interests.
• The National Company Law Tribunal’s inability to reject the flawed resolution plan revealed oversight gaps in the judicial process.

 

Insolvency and Bankruptcy Code (IBC), 2016

• The IBC, 2016 is a unified law for the restructuring and insolvency resolution of corporate bodies, partnership firms, and individuals in India.
• It was designed based on the recommendations of the T.K. Vishwanathan Committee (Bankruptcy Law Reforms Committee) 2015.
• The key objective of IBC is to expedite the resolution process, instil credit discipline, efficiently handle stressed assets, and boost the overall business environment.
• The IBC is overseen by the Insolvency and Bankruptcy Board of India (IBBI). The adjudicating authority for corporate bodies is the National Company Law Tribunal (NCLT), and for individuals and firms, it is the Debt Recovery Tribunal (DRT).
• The IBC also provides a structured, timebound Corporate Insolvency Resolution Process (CIRP) for companies that default on repayments.

 

Key Achievements of IBC

• Since its inception, the IBC has facilitated the resolution of over Rs 3.16 lakh crore of debt in 808 cases.
• The effectiveness of the IBC has led to lower NonPerforming Assets (NPAs) ratios, with a 12year low of 0.6% reported in June 2024.
• The IBC has significantly contributed to India's improved position in the World Bank's Doing Business Report (DBR), from 142nd in 2014 to 63rd in 2019.

 

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India's Wholesale Price Index (WPI) 

 

Introduction and About WPI 

• The Wholesale Price Index (WPI) is a measure of the average change in prices of goods traded in bulk by wholesalers to other businesses.
• It is a reflection of inflation at the producer level before the goods reach the end consumer.
• WPI is published monthly by the Office of Economic Adviser, under the Department for Promotion of Industry and Internal Trade (DPIIT), Ministry of Commerce and Industry.
• The index serves the purpose of tracking price movements in wholesale markets and assessing cost pressures faced by producers and industries, thereby aiding in understanding supplydemand dynamics across primary, energy, and manufacturing sectors.

 

WPI Calculation and Features

• The base year for calculation of the WPI has been updated to 2011–12 from 2004–05 to align with GDP and IIP data.
• The calculation method used for WPI is a weighted average of prices from a basket of 697 items, across three main groups: Primary Articles, Fuel and Power, and Manufactured Products.
• WPI covers only goods and does not include services.
• It reflects price trends that occur before the retail level, in contrast to the Consumer Price Index (CPI) which tracks consumer prices. 

 

Current Situation

• In recent news, India’s WPI inflation eased to a 13month low of 0.85% in April 2025, sharply down from 2.05% in March 2025, primarily driven by falling fuel and primary article prices.

 

Importance and Significance of WPI in India

• WPI serves as an early indicator of inflation trends and helps in analysing input cost pressures on producers.
• It is particularly essential for fiscal planning, business forecasting, and policymaking.
• WPI provides valuable insights into sectorspecific inflation, which is crucial for sectors like agriculture, mining, energy, and industry.
• It complements the CPI in macroeconomic analysis; however, the Reserve Bank of India (RBI) relies more on the CPI for its interest rate decisions.

 

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India Ascends to World’s 4th Largest Economy

 

Introduction

• India now stands as the world’s 4th largest economy, outpacing Japan.
• This announcement came at the 10th Governing Council Meeting of NITI Aayog (National Institution for Transforming India). 
• The GDP of India has now crossed USD 4 trillion.

 

India's Economic Growth

• India has maintained the stance of being the fastest expanding major economy worldwide. 
• Within the next two years, it is the only nation expected to record over 6% annual growth.
• This consistent economic expansion is forecasted to elevate India's GDP to USD 5.58 trillion by 2028.
• This would enable India to exceed Germany and become the thirdlargest economy globally.

 

IMF 2025 World Economic Outlook Report

• The International Monetary Fund (IMF), in its 2025 World Economic Outlook Report, projected that India would be the fourthlargest economy in 2025.
• India's nominal GDP was predicted to reach USD 4.187 trillion, surpassing Japan’s USD 4.186 trillion.

 

About NITI Aayog

• Replacing the Planning Commission of India, NITI Aayog came into existence on 1st January 2015. 
• Serving as India's top policy think tank, this institution focuses on cooperative federalism and sustainable territorial development via a bottomup approach.
• The Chairperson of NITI Aayog is the Prime Minister of India, while the ViceChairperson is appointed by the Prime Minister.
• The Governing Council includes Chief Ministers of all Indian states and Lieutenant Governors of Union Territories, thus capturing diversified representation from across the country. 

 

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Key Highlights of the RBI Annual Report 202425

 

Introduction 

• The Reserve Bank of India released its Annual Report 2024-25, delivering a thorough appraisal of India's monetary policy, regulatory initiatives, economic updates, and emphasising financial stability.

 

Global and Indian Economic Overview

• Global growth in 2024 hit a low of 3.3%, lower than the historical average. However, an increase to 2.8% and 3.0% in 2025 and 2026, respectively, is anticipated.
• Inflation worldwide softened to 5.7% in 2024 from 6.6% the previous year, though services inflation persisted in leading advanced economies.
• Despite a dip in GDP growth to 6.5% in 202425, India held its position as the fastestgrowing major global economy.
• Record foodgrain production and agreeable weather conditions boosted the Agricultural GVA by 4.6%, while industrial growth slowed to 4.3%, and services sector’s robust 7.5% growth accounted for 64.1% of the GVA. 

 

RBI Balance Sheet Status

• The RBI’s balance sheet expanded by 8.2% yearonyear, and its income rose by 22.77% due to an approx 33% surge in forex transaction yields and greater returns from investments, whereas expenditure grew by 7.76%.
• This resulted in a record surplus of Rs 2.68 lakh crore, which was 27.37% more than the previous year’s Rs 2.11 lakh crore.
• With increased notes issued, revaluation accounts and other liabilities, the liabilities side also saw an expansion.
• As of March, 2025, foreign assets (including gold and loans) composed 74.27% of total assets, with domestic assets at 25.73%, while gold holdings increased by 57.48 metric tonnes to 879.58 metric tonnes. 

 

Inflation Trends and Monetary Policy 

• Headline inflation eased to 4.6% in 202425 from 5.4% in 202324, with core inflation at 3.5% and food inflation decreasing to 2.9% by March 2025.
• The Monetary Policy Committee maintained the repo rate at 6.50% throughout much of 2024-25 but shifted the stance from “withdrawal of accommodation” to “neutral” in October 2024, with the cash reserve ratio reduced to 4% in December 2024 to alleviate liquidity pressures.

 

External Sector and Fiscal Situation 

• Despite a modest 0.1% growth in merchandise exports, an increase in imports by 6.2% widened the trade deficit to USD 282.8 billion.
• The Gross Fiscal Deficit (GFD) of the central government decreased to 4.7% of GDP in 2024-25 from 5.5% in 2023-24.
• An increase in both capital and revenue expenditure   5.2% and 5.8% respectively  was noted.

 

The State of Indian Banking and Financial Sector 

• Net household savings rose to 5.1% of Gross National Disposable Income in FY24.
• Bank credit growth surpassed deposit growth, enhancing the credittodeposit ratio marginally.
• Gross NonPerforming Assets (NPA) ratio and Net NPA ratio declined further. 

 

Digital Payments, Financial Inclusion and Technological Initiatives 

• In 2024-25, the volume of digital payments grew by 34.8%, its value by 17.9%. 
• The Financial Inclusion Index of the RBI increased from 60.1 in 2023 to 64.2 in 2024, indicating a deeper usage of financial services.

 

Outlook for 2025-26

• The report projected a sustained GDP growth at 6.5% for India, with risks balanced and expected inflation at 4.0%.
• The central government intending to reduce the fiscal deficit to 4.4% of GDP in 2025-26, and aim for a reducing public debttoGDP ratio reaching 50% by 2031.

 

Challenges Highlighted in RBI Annual Report 2024-25 

The annual report underscored challenges including a marked rise in counterfeit note detection, a surge in bank fraud amounts, global uncertainties, inflation management issues, balancing fiscal consolidation, and capital expenditure, and climate change factors.

 

Proposed Measures for Economic Growth and Financial Stability 

The report proposed measures such as bolstering agrilogistics to control food inflation, fraud detection and prevention to enhance financial sector resilience, scaling the CBDC pilot to harness digital innovation and improve transaction efficiency, diversifying external sector to reduce vulnerability, increasing capital expenditure for longterm productivity gains and integrating climate risk assessment into banking supervision to reduce systemic risks.

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