| Consider the following actions. |
| 1. Increasing interest rates. |
| 2. Introduction of Inflation-Indexed National Saving Securities (IINSSs) for retail investors. |
| 3. Increasing excise duty on gold. |
| 4. Permitting FBI in multi-brand retail trading. |
| Which of the above are the steps taken by RBI to counter inflation? |
A) 1 and 4
B) 1, 3 and 4
C) 1 and 2
D) 2, 3 and 4
Correct Answer: C
Solution :
[c] Increasing interest rates and Introduction of Inflation- Indexed National Saving Securities (IINSSs) for retail investors are the steps taken by RBI. RBI on consultation with the government plans to launch a 10 year savings instrument 'Inflation-Indexed National Saving Securities (IINSSs) for retail investors' that will offer inflation-linked returns to small investors as an alternative to investing in gold. IINSS will be linked to the new (combined) Consumer Priee Index (CPI). The interest on these securities would comprise a fixed rate plus inflation. Interest would be compounded half-yearly and paid cumulatively at redemption. These securities will be distributed through banks to reach out to the masses (Eligible investors individuals, Hindu undivided families, trusts and charitable institutions). Increasing or decreasing taxes, duties permitting FDI in retail are the steps taken by the Finance Ministry (not RBI)to curb inflation.
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