Commerce Current Affairs for Boards: GST, Repo Rate and Budget Terms in One Revision Sheet
Quick Answer: What Are GST, Repo Rate and Key Budget Terms?
Quick answer: GST (Goods and Services Tax) is India’s single destination-based indirect tax on supply of goods and services, governed by the GST Council. The repo rate is the rate at which the RBI lends short-term funds to banks, and it is the Reserve Bank of India’s main tool to control inflation. Key Budget terms — fiscal deficit, revenue deficit and primary deficit — measure how much the government overspends relative to its income. This one-page revision sheet covers all of them with current examples for Class 12 boards, CUET, UPSC and SSC exams.
- Quick Answer: What Are GST, Repo Rate and Key Budget Terms?
- Why Commerce Current Affairs Matter for Boards, CUET and Competitive Exams
- GST Explained: Slabs, Council and Recent Rate Changes
- CGST vs SGST vs IGST: The Confusion Students Face
- Repo Rate, Reverse Repo and MSF: RBI’s Policy Tools
- How Repo Rate Changes Impact the Common Citizen and Economy
- Budget Basics: Fiscal Deficit, Revenue Deficit and Primary Deficit
- Union Budget Terms Often Confused: Disinvestment vs Divestment, Direct vs Indirect Tax
- CPI vs WPI: Measuring Inflation for Exams
- Current Affairs Examples to Quote in Board and CUET Answers
- One-Page Revision Table: All Terms at a Glance
- Practice Questions: Board-Style and MCQ Format
- Frequently Asked Questions
- Q: What is the current GST slab structure?
- Q: Who decides the repo rate in India?
- Q: Is fiscal deficit always bad for the economy?
- Q: How is GST different from the old tax system?
- Q: Which is better to quote in exams: CPI or WPI inflation?
- Related reading
Why Commerce Current Affairs Matter for Boards, CUET and Competitive Exams
Examiners increasingly frame economics questions around news. A board question on “objectives of GST” becomes easier to answer with a concrete rate change from a recent GST Council meeting. A CUET question on inflation targeting becomes simple if you know the RBI’s current repo rate stance. UPSC and SSC papers regularly ask who publishes CPI, what the fiscal deficit target is, or how a repo rate cut affects EMIs. Reading commerce current affairs as linked concepts — not isolated news — is the fastest way to convert headlines into marks.
GST Explained: Slabs, Council and Recent Rate Changes
GST was rolled out on 1 July 2017 through the 101st Constitutional Amendment Act, 2016. It subsumed taxes like excise duty, service tax, VAT, CST and octroi into a single tax levied at every stage of supply with input tax credit, collected at the point of consumption (destination-based).
The GST Council — chaired by the Union Finance Minister with state finance ministers as members — decides rates, exemptions and thresholds. Article 279A of the Constitution created the Council.
The main GST slabs are nil, 5%, 12%, 18% and 28%, with 28% reserved for luxury and sin goods plus cess. In its September 2025 meeting (56th session), the GST Council recommended moving to two principal slabs — 5% and 18% — with a 40% rate for sin and luxury goods, effective 22 September 2025. Health and life insurance premiums were exempted. Always verify the latest decisions at the official GST portal, gst.gov.in, and the Ministry of Finance, finmin.nic.in.
CGST vs SGST vs IGST: The Confusion Students Face
This is a guaranteed one-mark or assertion-reason question. The distinction is simple:
- CGST — Central GST, collected by the Centre on intra-state supply.
- SGST/UTGST — State GST, collected by the state on intra-state supply.
- IGST — Integrated GST, collected by the Centre on inter-state supply and imports; shared with the destination state.
Example: A trader in Delhi sells goods worth ₹1,00,000 to a buyer in Delhi at 18% GST: ₹9,000 CGST + ₹9,000 SGST. If the same sale goes to a buyer in Maharashtra: ₹18,000 IGST to the Centre, later apportioned to Maharashtra.
Repo Rate, Reverse Repo and MSF: RBI’s Policy Tools
Repo rate is the rate at which the RBI lends to commercial banks against government securities for the short term. Reverse repo rate (now the SDF — Standing Deposit Facility rate) is the rate at which banks park surplus funds with the RBI. The Marginal Standing Facility (MSF) is the rate at which banks can borrow overnight above their repo limit, typically 25 basis points above the repo rate. Check current rates on the RBI website, rbi.org.in.
The repo rate is the policy rate under the Liquidity Adjustment Facility (LAF); the corridor is set by the SDF rate (floor) and MSF (ceiling).
How Repo Rate Changes Impact the Common Citizen and Economy
Transmission mechanism: When inflation is high, the RBI raises the repo rate. Borrowing becomes costlier for banks, which raise lending rates — home, car and personal loan EMIs rise, demand cools, and inflation eases. Deposit rates also rise, encouraging savings. A repo rate cut works in reverse: cheaper loans, higher credit offtake, boost to investment and consumption.
Exam framing: “Repo rate ↑ → cost of credit ↑ → aggregate demand ↓ → inflation ↓.” India’s flexible inflation targeting framework (4% CPI ± 2%) is the mandate under which the MPC acts.
Budget Basics: Fiscal Deficit, Revenue Deficit and Primary Deficit
Boards test these every year in the Money and Banking / Government Budget chapters:
- Fiscal deficit = Total expenditure − Total receipts excluding borrowings. It shows total government borrowing requirement.
- Revenue deficit = Revenue expenditure − Revenue receipts. It signals dissaving — the government is borrowing to run day-to-day operations.
- Primary deficit = Fiscal deficit − Interest payments. It shows the deficit excluding the burden of past debt.
A zero primary deficit means current borrowing is only servicing past interest liabilities.
Union Budget Terms Often Confused: Disinvestment vs Divestment, Direct vs Indirect Tax
Disinvestment vs divestment: Disinvestment is the government selling a minority stake in a public sector undertaking while retaining control (e.g., strategic disinvestment of Air India, completed 2022, was a full transfer). Divestment implies selling a substantial or controlling stake. In Indian budget documents, “disinvestment” is the standard term; exam answers should use it.
Direct vs indirect tax:
| Feature | Direct Tax | Indirect Tax |
|---|---|---|
| Burden | Cannot be shifted (income tax, corporate tax) | Shifted to consumer (GST, customs) |
| Impact and incidence | On the same person | On different persons |
| Nature | Progressive | Generally regressive |
CPI vs WPI: Measuring Inflation for Exams
CPI (Consumer Price Index) is released monthly by the National Statistical Office (NSO), MoSPI, with base year 2012. It measures retail prices of a basket of goods and services consumed by households. WPI (Wholesale Price Index) is released by the Office of the Economic Adviser, DPIIT, Ministry of Commerce and Industry, base year 2011-12, and covers goods only — no services. The RBI’s inflation target (4% ± 2%) is based on CPI-Combined. Verify data at mospi.gov.in.
Current Affairs Examples to Quote in Board and CUET Answers
- GST Council’s 56th meeting (September 2025): two-slab rationalisation (5% and 18%), 40% for sin/luxury goods; health and term life insurance premiums exempted.
- RBI’s Monetary Policy Committee cut the repo rate in 2025 to support growth while keeping the neutral stance — quote the exact figure from the latest policy at rbi.org.in.
- Union Budget’s fiscal deficit glide path towards the FRBM target of below 4.5% of GDP by 2025-26.
- CPI-based flexible inflation targeting: 4% with a 2–6% tolerance band, reviewed every five years.
One-Page Revision Table: All Terms at a Glance
| Term | Meaning | Exam Point |
|---|---|---|
| GST | Destination-based indirect tax on supply | Introduced 1 July 2017; Article 279A creates GST Council |
| CGST/SGST/IGST | Intra-state split / inter-state unified | IGST goes to Centre, shared with destination state |
| Repo rate | RBI lends to banks against securities | Policy rate; set by MPC, chaired by RBI Governor |
| Reverse repo/SDF | Banks park funds with RBI | Corridor floor |
| MSF | Overnight borrowing above repo limit | Corridor ceiling, repo + 25 bps |
| Fiscal deficit | Total expenditure − receipts excluding borrowings | Total borrowing need |
| Primary deficit | Fiscal deficit − interest payments | Zero means borrowing only for past interest |
| CPI | Retail inflation, base 2012 | Published by NSO; RBI’s target measure |
| WPI | Wholesale goods inflation, base 2011-12 | Published by DPIIT; excludes services |
Practice Questions: Board-Style and MCQ Format
- Board: Distinguish between revenue deficit and fiscal deficit. Give one implication of each. (Hint: dissaving vs total borrowing requirement.)
- Board: How does an increase in the repo rate affect inflation? Explain the transmission chain.
- MCQ: IGST is collected on — (a) intra-state supply (b) inter-state supply (c) imports only (d) services only. (Answer: b)
- MCQ: Primary deficit equals — (fiscal deficit − interest payments).
- MCQ: Which index forms the basis of RBI’s inflation targeting? (CPI-Combined).
- CUET: Which body decides GST rates? (GST Council).
Frequently Asked Questions
Q: What is the current GST slab structure?
Following the September 2025 GST Council decision, the principal slabs are 5% and 18%, with 40% for sin and luxury goods, plus a nil rate for essentials. Earlier slabs were 5%, 12%, 18% and 28%. Always check the latest GST Council decisions at gst.gov.in before the exam, as rates are revised periodically.
Q: Who decides the repo rate in India?
The RBI’s Monetary Policy Committee (MPC) — six members headed by the RBI Governor — decides the repo rate in its bi-monthly policy reviews. Decisions are made by majority vote, with the Governor holding a casting vote.
Q: Is fiscal deficit always bad for the economy?
No. A moderate fiscal deficit can fund infrastructure and capital expenditure that boosts long-run growth. But a persistently high deficit raises government borrowing, crowds out private investment, and can fuel inflation — which is why the FRBM Act sets deficit targets.
Q: How is GST different from the old tax system?
GST replaced multiple cascading indirect taxes (excise, service tax, VAT, CST) with a single destination-based tax. It allows input tax credit across stages, removes tax-on-tax, and creates “one nation, one tax” with a common national market.
Q: Which is better to quote in exams: CPI or WPI inflation?
Quote CPI. It is the headline measure for households and the basis of RBI’s inflation targeting mandate. WPI tracks wholesale prices of goods only and excludes services, so it understates consumer-level inflation.
Related reading
- Current Affairs One-Liners: September 14, 2026 — Quick Revision Points for UPSC, SSC, Banking and CLAT
- Daily Current Affairs September 24, 2026: Top 10 Exam-Ready Headlines for UPSC, SSC & Banking
Quick revision
- CGST: — Central GST, collected by the Centre on intra-state supply.
- SGST/UTGST: — State GST, collected by the state on intra-state supply.
- IGST: — Integrated GST, collected by the Centre on inter-state supply and imports; shared with the destination state.
- Fiscal deficit: = Total expenditure − Total receipts excluding borrowings. It shows total government borrowing requirement.
- Revenue deficit: = Revenue expenditure − Revenue receipts. It signals dissaving — the government is borrowing to run day-to-day operations.
- Primary deficit: = Fiscal deficit − Interest payments. It shows the deficit excluding the burden of past debt.
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