Central government’s response to the COVID-19 pandemic (Apr 13-20, 2020)
Distilled Policy Brief
- The Reserve Bank of India reduced the reverse repo rate to 3.75%, announced targeted long-term repo operations of Rs 50,000 crore, and increased Ways and Means Advances limits for states and UTs by 60% to combat economic stress.
🎯 Prelims High-Yield Examination Points
Ways and Means Advances (WMA) are temporary loan facilities provided by the Reserve Bank of India to state governments to bridge interval mismatches in cash flows.
⚖️ Mains Analytical & Syllabus Linkages
Evaluate the role of fiscal and monetary policy coordination between the central government and the RBI in managing macroeconomic shocks during public health emergencies like the COVID-19 pandemic.
🎯 UPSC Prelims Practice Drill
Consider the following measures taken by the Reserve Bank of India (RBI) during the COVID-19 pandemic response (April 2020): 1. Reduced the reverse repo rate. 2. Announced targeted long-term repo operations (TLTRO). 3. Increased the Ways and Means Advances (WMA) limits for states and union territories. Which of the above measures were undertaken by the RBI to combat economic stress during this period?
- [A] 1 and 2 only
- [B] 2 and 3 only
- [C] 1 and 3 only
- [D] 1, 2 and 3
▶ Reveal Official Answer & Analytical Explanation
During the pandemic response in April 2020, the Reserve Bank of India undertook multiple measures to ease economic stress, which included reducing the reverse repo rate to 3.75%, announcing targeted long-term repo operations (TLTRO) of Rs 50,000 crore, and increasing the Ways and Means Advances (WMA) limits for states and UTs by 60%. Therefore, all three statements are correct.
🏛️ Historical Twin PYQ Anchor (2021)
Consider the following statements regarding the "National Clean Air Programme (NCAP)": 1. It is implemented by the Ministry of Environment, Forest and Climate Change. 2. Central Pollution Control Board acts as the sole regulatory executive body.