NABARD Grade A Current Affairs — 14 October 2026

Global brokerages BofA, Goldman Sachs, and UBS forecast the RBI will hike the repo rate by approximately 75 basis points across MPC meetings in FY27, extending tightening into H1FY28. The forecast follows India's CPI inflation hitting a 23-month high of 5.54 per cent in September, driven by food inflation surging to 7.74 per cent. UBS projects FY27 headline inflation at 5.2 per cent, with El Niño and Middle East energy risks adding further upside pressure.

This article brings together two testable concepts: the monetary policy transmission mechanism and India's inflation measurement framework.

When CPI breaches or threatens to breach the RBI's upper tolerance band of 6 per cent (with a target of 4 per cent ± 2 per cent under the inflation targeting framework), the MPC is mandated to act. The instrument is the repo rate — the rate at which RBI lends overnight funds to commercial banks under the Liquidity Adjustment Facility (LAF). A repo rate hike raises the cost of borrowing for banks, which then transmit higher rates to loans, cooling credit demand and, eventually, aggregate demand and prices.

The transmission lag is critical: monetary policy effects on inflation typically materialise with a 6–18 month delay. This is why the article's reference to a 'tightening path through H1FY28' makes sense — a hike in FY27 MPC meetings will cool inflation by FY28.

El Niño is relevant here because it disrupts agricultural output through erratic monsoons, pushing food prices higher. Food has a weight of approximately 45.86 per cent in India's CPI basket, making it disproportionately influential on headline inflation. Rural CPI (6.08%) running hotter than urban CPI (4.88%) in September reflects this food-price channel more acutely in rural areas.

For NABARD aspirants: a rising repo rate lifts NABARD's refinancing rates too, raising the cost of agricultural credit. For RBI Grade B aspirants: the LAF corridor mechanics — repo rate as the floor signal, SDF as the actual floor — matter for precision answers.

The Union Cabinet has approved continuation of the PM-KISAN scheme beyond 2026, ensuring farmers keep receiving ₹6,000 per year in direct income support. Launched in February 2019, PM-KISAN transfers ₹2,000 in three equal instalments directly to eligible landholding farmers' bank accounts via Direct Benefit Transfer. The scheme is implemented by the Ministry of Agriculture and Farmers Welfare and covers small and marginal as well as larger landholding farmer families across India.

PM-KISAN (Pradhan Mantri Kisan Samman Nidhi) is India's largest direct income-support programme for farmers, launched on 24 February 2019 with retrospective effect from 1 December 2018. It uses Direct Benefit Transfer (DBT) to credit ₹6,000 annually in three instalments of ₹2,000 each directly into Aadhaar-linked bank accounts, bypassing intermediaries and minimising leakage — a core financial inclusion mechanism that RBI and NABARD examiners value.

The scheme initially targeted small and marginal farmers (holding up to 2 hectares), but was expanded in June 2019 to cover all farmer families irrespective of land size. Exclusion criteria matter for exams: institutional landholders, those who paid income tax in the last assessment year, constitutional post-holders, serving/retired government employees (above a salary threshold), and professionals like doctors, engineers, and lawyers are excluded.

From a NABARD perspective, PM-KISAN addresses the chronic problem of rural consumption smoothing — farmers receiving predictable cash before kharif and rabi seasons can reduce dependence on informal credit at exploitative rates. The scheme complements Priority Sector Lending norms and SHG-linkage programmes by improving the credit-worthiness and demand side of rural households.

The Cabinet's decision to continue the scheme post-2026 signals long-term fiscal commitment. For UPSC, the governance angle is critical: PM-KISAN is a centrally-sponsored scheme with 100% central funding, administered through a PM-KISAN portal with farmer registration, land verification through state governments, and Aadhaar authentication — a model of technology-driven welfare delivery.

Russia and the UAE have activated a Comprehensive Economic Partnership Agreement (CEPA), deepening bilateral trade ties. The deal covers goods, services, and investment flows between the two countries. Russia, under Western sanctions since 2022, has increasingly pivoted to Gulf partners. The UAE, already a major re-export and financial hub, becomes a key corridor for Russian trade. Both nations aim to raise bilateral trade volumes significantly beyond their existing levels through the new framework.

A Comprehensive Economic Partnership Agreement (CEPA) is a broad trade deal covering not just tariff reduction on goods but also services, investment protection, intellectual property, and regulatory cooperation — broader than a standard Free Trade Agreement (FTA).

The Russia–UAE CEPA matters in the current geopolitical context because Russia has been under extensive Western sanctions since its 2022 invasion of Ukraine, forcing it to reroute trade through non-Western partners. The UAE, despite being closely linked to Western financial systems, has maintained strategic neutrality, making it an attractive partner. Dubai functions as a major re-export hub, and the UAE's dirham has been used for settling some Russian transactions outside the dollar system.

For exam aspirants, the key static concepts here are: (1) the architecture of CEPAs versus FTAs — India itself has signed CEPAs with the UAE and others; (2) how sanctions reshape global trade corridors; and (3) the UAE's role in global financial flows. India's own UAE CEPA, signed in February 2022 and effective May 2022, is a benchmark comparison — it was India's fastest-ever negotiated trade deal. The Russia–UAE CEPA now adds another layer, potentially affecting India since India is a significant trade partner of both Russia and the UAE, and routes goods through Dubai.

India's farmer welfare framework rests on three interlocking pillars: PM-Kisan Samman Nidhi, which transfers ₹6,000 annually to landholding farmers; Pradhan Mantri Fasal Bima Yojana, which insures crops against natural risks; and a Minimum Support Price regime covering 23 crops. Together these aim to guarantee income support, risk coverage, and price assurance. The government has progressively expanded MSP margins above cost of production, with recent hikes framed as fulfilling the C2+50% principle.

India's agricultural safety net operates through three distinct mechanisms that together address income, risk, and price.

**PM-Kisan Samman Nidhi (2019):** Provides direct income support of ₹6,000 per year in three equal instalments of ₹2,000 to land-holding farmer families. Funded entirely by the Central Government. Over 11 crore farmers are registered. The scheme uses Aadhaar-linked accounts for direct benefit transfer, eliminating intermediaries.

**PM Fasal Bima Yojana (PMFBY, 2016):** Replaces earlier insurance schemes with a uniform, actuarial-premium-based model. Farmers pay a capped premium — 2% for Kharif, 1.5% for Rabi food and oilseed crops, 5% for commercial/horticultural crops — with the Centre and states sharing the residual actuarial premium. Coverage includes prevented sowing, mid-season adversity, post-harvest losses, and localised calamities. A restructured PMFBY from 2020 made it voluntary for all farmers.

**MSP Framework:** The Commission for Agricultural Costs and Prices (CACP) recommends MSPs for 23 crops. The government targets at least 50% returns over the all-India weighted average cost of production (A2+FL). Critics argue the C2 cost basis (which includes imputed land rent) gives higher support; the current policy uses A2+FL. Procurement happens through agencies like FCI (food grains) and NAFED (oilseeds, pulses).

The combined architecture attempts to delink farmer income from weather shocks and market volatility — a key policy design tested by examiners.