CUET Preparation Today
Read the given paragraph carefully and answer the following questions. Government Budget The Indian economy is on a strong wicket and stable footing, demonstrating resilience in the face of geopolitical challenges. The Indian economy has consolidated its post-Covid recovery with policymakers - fiscal and monetary ensuring economic and financial stability. Nonetheless, change is the only constant for a country with high growth aspirations. For the recovery to be sustained, there has to be heavy lifting on the domestic front because the environment has become extraordinarily difficult to reach agreements on key global issues such as trade, investment and climate. The headline inflation rate is largely under control, although the inflation rate for some specific food items is elevated. The trade deficit was lower in FY24 than in FY23, and the current account deficit for the year is around 0.7% of GDP. In fact, the current account registered a surplus in the last quarter of the financial year. Foreign exchange reserves are ample. Public investment has sustained capital formation in the last several years even as the private sector shed its balance sheet blues and began investing in FY22. Now, it has to receive the baton from the public sector and sustain the investment momentum in the economy. The signs are encouraging. National income data show that non-financial private-sector capital formation, measured in current prices, expanded vigorously. |
Foreign exchange reserves are ample, means? |
Reserve is sufficient to purchase goods and services from abroad. Anticipated demand for foreign goods and services can be met through incumbent foreign exchange reserve. Supply of foreign reserves is more than demand of foreign reserves. Government is confident about present and future need of foreign reserve. |
Anticipated demand for foreign goods and services can be met through incumbent foreign exchange reserve. |
The correct answer is Option (2) → Anticipated demand for foreign goods and services can be met through incumbent foreign exchange reserve. "Foreign exchange reserves are ample" means that the reserves are more than sufficient to meet the country's needs. This statement captures the forward-looking nature of having ample reserves, indicating that the country can comfortably handle its international financial obligations and expected future demands without strain. |
