Economy Current Affairs - Current Affairs 2025

The Indian economy is one of the most dynamic and frequently covered topics in current affairs 2025, especially for students preparing for competitive exams like UPSC, SSC, Banking, Railways, Defence, and State PSCs. Questions related to economic growth, government schemes, Union Budget, RBI policies, inflation, GDP, taxation, and international trade are regularly asked in the general awareness section. Staying updated with the latest economic current affairs helps aspirants understand India’s financial progress, policy decisions, and global economic relations, all of which are essential for scoring well in competitive exams.

In this article, we have compiled the most important Economy Current Affairs 2025 MCQs with Answers and Explanations to help students strengthen their preparation. Each multiple-choice question is based on the latest updates in economic policies, financial institutions, banking reforms, budget announcements, and global economic reports. Practicing these economy current affairs questions and answers 2025 will not only enhance your knowledge of India’s economic landscape but also improve your accuracy and confidence in the general knowledge and current affairs sections of upcoming competitive exams.

Economy Current Affairs - Current Affairs 2025

1. Which country has India recently surpassed to become the world’s 4th largest economy?

1. Germany
2. United Kingdom
3. Japan
4. France

Answer: C) Japan

Explanation: As per the latest data from the International Monetary Fund (IMF) and the World Bank (2025), India has overtaken Japan to become the world’s 4th largest economy in nominal GDP terms. The U.S., China, and Germany occupy the top three spots. India’s nominal GDP (2025): Over $4.1 trillion. This achievement reflects India’s robust economic growth, strong domestic demand, rising exports, and successful policy reforms under initiatives like “Make in India” and “Digital India”.

Trusted Source: News On Air, Business Standard, The Economic Times

2. By how many basis points did the RBI cut the policy repo rate in its June 6, 2025 review?

1. 25 basis points
2. 50 basis points
3. 75 basis points
4. 100 basis points

Answer: B) 50 basis points

Explanation: In its June 6, 2025 Monetary Policy Committee (MPC) meeting, the Reserve Bank of India (RBI) reduced the repo rate by 50 basis points (0.50%) to boost economic growth amid easing inflation trends. This marks the first major rate cut since 2023, signaling a shift toward a more accommodative monetary stance. Aim: Encourage investment and liquidity in the economy. Inflation (May 2025): Around 4.2%, within the RBI’s comfort zone (2–6%).

Trusted Source: News On Air, PIB (Press Information Bureau), DD News

3. Which trend was highlighted by the Ministry of Coal based on this May 2025 data?

1. Decline in captive mine production
2. Increase in coal imports
3. Reduction in coal dispatch volumes
4. Growing contribution of captive/commercial mines to total output

Answer: D) Growing contribution of captive/commercial mines to total output

Explanation: The Ministry of Coal reported in May 2025 that captive and commercial mines have significantly increased their contribution to India’s overall coal production. This reflects the success of coal sector reforms, allowing private players to operate mines and enhance domestic output. Aim: Reduce dependence on imports and achieve self-sufficiency in coal production.

Trusted Source: PIB (Press Information Bureau), The Hindu, The Indian Express

4. Which three segments were the top contributors to Index of Industrial Production (IIP) growth in April 2025?

1. Capital Goods, Consumer Durables, Intermediate Goods
2. Primary, Infrastructure Goods, Mining
3. Manufacturing, Electricity, Mining
4. Capital Goods, Primary Goods, Consumer Non-Durables

Answer: A) Capital Goods, Consumer Durables, Intermediate Goods

Explanation: The Index of Industrial Production (IIP) data for April 2025 showed robust growth driven by strong performance in Capital Goods, Consumer Durables, and Intermediate Goods. This indicates rising industrial demand and investment in the manufacturing sector. Consumer Durables: Boosted by strong domestic consumption and festival demand.

Trusted Source: Hindustan Times, The Indian Express, India Today

5. Which sector received the highest share of Foreign Direct Investment (FDI) equity in FY 2024–25?

1. Computer software & hardware
2. Services
3. Manufacturing
4. Trading

Answer: B) Services

Explanation: The Services Sector remained the top recipient of FDI inflows during FY 2024–25, followed by computer software & hardware and manufacturing. The sector includes finance, insurance, business services, and telecommunications. Total FDI inflow (FY 2024–25): $71 billion. Services sector share: 16%. Major FDI sources: Singapore, USA, and Mauritius.

Trusted Source: PIB (Press Information Bureau), News On Air, The Times of India

6. What is the primary purpose of the Financial Fraud Risk Indicator (FRI) system?

1. To rank telecom operators based on financial fraud incidents
2. To track international money transfers to India
3. To provide advance actionable intelligence for cyber fraud prevention
4. To monitor data usage of mobile subscribers

Answer: C) To provide advance actionable intelligence for cyber fraud prevention

Explanation: The Financial Fraud Risk Indicator (FRI), launched in 2025, is a data-driven platform designed to detect and prevent cyber fraud. It enables banks, payment platforms, and regulators to receive real-time risk alerts about suspicious transactions. Developed by: RBI and National Payments Corporation of India (NPCI). Uses AI and machine learning for fraud detection.

Trusted Source: News On Air, PIB (Press Information Bureau), The Economic Times

7. At its 8th Incorporation Day, Government e-Marketplace (GeM) was recognized as what?

1. India’s largest retail marketplace
2. Largest cloud service provider
3. Biggest logistics portal
4. World’s largest public e-procurement platform

Answer: D) World’s largest public e-procurement platform

Explanation: In 2025, on its 8th anniversary, the Government e-Marketplace (GeM) was recognized as the world’s largest public e-procurement platform. GeM enables transparent and efficient government procurement of goods and services from registered vendors. Operated under the Ministry of Commerce and Industry.

Trusted Source: News On Air, PIB (Press Information Bureau), DD News

8. Which government initiatives are expected to bolster India's manufacturing sector in 2025-26, as per the RBI report?

1. Production Linked Incentive (PLI) scheme and National Manufacturing Mission
2. Startup India and Digital India
3. Skill India and Swachh Bharat
4. Make in India and Atmanirbhar Bharat

Answer: A) Production Linked Incentive (PLI) scheme and National Manufacturing Mission

Explanation: The RBI’s annual report for 2025 highlights that the Production Linked Incentive (PLI) scheme and the National Manufacturing Mission are major drivers of India’s manufacturing growth. These initiatives promote domestic production, reduce import dependence, and enhance global competitiveness. PLI covers 14 key sectors, including electronics, pharmaceuticals, and automotive. National Manufacturing Mission aims to raise manufacturing share to 25% of GDP by 2030. Expected to create over 1 crore jobs in coming years.

Trusted Source: PIB (Press Information Bureau), The Hindu, The Indian Express

9. According to the RBI's annual report, what is the projected real GDP growth rate for India in the fiscal year 2025-26?

1. 5.5%
2. 6.0%
3. 6.5%
4. 7.0%

Answer: C) 6.5%

Explanation: The RBI’s Annual Report (May 2025) projects India’s real GDP growth at 6.5% for FY 2025–26, supported by strong domestic demand, investment, and a stable macroeconomic environment. Key growth drivers: Infrastructure spending, manufacturing, and exports. Inflation expected to average around 4.5% in FY 2025–26.

Trusted Source: News On Air, PIB (Press Information Bureau), DD News

10. What external risks does the RBI identify that could impact India's economic growth outlook?

1. Stable global trade and geopolitical harmony
2. Global financial market volatility, geopolitical tensions, and trade protectionism
3. Increased foreign investments and technological advancements
4. Strengthening global supply chains and commodity price stability

Answer: B) Global financial market volatility, geopolitical tensions, and trade protectionism

Explanation: The RBI cautioned that external headwinds like financial market fluctuations, geopolitical conflicts (particularly in Europe and West Asia), and global trade restrictions could pose risks to India’s growth momentum. Global oil prices and currency volatility remain major concerns. RBI stresses maintaining adequate forex reserves (over $640 billion as of mid-2025). Domestic resilience and policy flexibility are key to mitigating these risks.

Trusted Source: Business Standard, The Times of India, The Economic Times

11. Which bank has launched Aadhaar-based face authentication for digital transactions?

1. SBI YONO
2. India Post Payments Bank
3. State Bank of India
4. Paytm Payment Bank

Answer: B) India Post Payments Bank

Explanation: In 2025, the India Post Payments Bank (IPPB) introduced Aadhaar-based face authentication for secure and seamless digital transactions. This innovation enhances security and accessibility, especially for senior citizens and rural users who face challenges with OTP or fingerprint authentication. Technology support: Unique Identification Authority of India (UIDAI). Enables services like fund transfer, balance inquiry, and bill payments.

Trusted Source: News On Air, PIB (Press Information Bureau), The Economic Times