BPSC 70th CCE Prelims General Studies · Question 30 of 143

Correct — C, Capital goods and infrastructure/construction goods. The numbers are in the National Statistical Office's own release, the Quick Estimates of the Index of Industrial Production for March 2023 published on 12 May 2023, whose Statement III sets out use-based growth for the full April-to-March period of 2022-23. Reading across that row: Primary goods grew 7.4 per cent, Capital goods 12.9 per cent, Intermediate goods 3.7 per cent, Infrastructure/Construction goods 8.0 per cent, Consumer durables 0.5 per cent and Consumer non-durables 0.5 per cent. Capital goods is the runaway leader at almost thirteen per cent, and Infrastructure/Construction goods is the strongest of the remaining categories the option list offers, at eight per cent. What settles the question completely is the other end of the same row. Both consumer categories grew by half a per cent — the weakest figures in the whole table — and three of the four options contain consumer goods, so all three fall together. Option (d) has a second defect worth noticing: manufacturing is a sectoral head rather than a use-based one, and Statement I of the same release puts its April-to-March growth at 4.5 per cent, below the general index at 5.1, and well below electricity at 8.9. The economics behind the table is the part worth carrying: 2022-23 was a year in which investment demand, driven heavily by government capital expenditure, ran far ahead of household consumption demand, and the use-based classification exists precisely to make that divergence visible.

• (a)Consumer goods and capital goods — Consumer goods and capital goods — half right, and the most attractive of the wrong options for that reason. Capital goods genuinely did lead the table at 12.9 per cent. But consumer durables and consumer non-durables each grew 0.5 per cent in the same period, the weakest of the six use-based categories, so this option pairs the best performer with the worst. Any option that puts consumer goods among the fast growers of FY2023 is wrong on the data.
• (b)Consumer goods and infrastructure/construction goods — Consumer goods and infrastructure/construction goods — the same error made with the other genuine performer. Infrastructure and construction goods did grow 8.0 per cent, which is a strong figure, but the consumer half of the pairing again fails at 0.5 per cent. A candidate who remembers that infrastructure did well and assumes consumption must have followed it will mark this.
• (d)Manufacturing and consumer goods — Manufacturing and consumer goods — wrong on both halves and, in addition, mixing two different classifications, which is itself a tell. Manufacturing belongs to the IIP's sectoral classification, not to its use-based one, and its April-to-March growth for 2022-23 was 4.5 per cent, below even the general index at 5.1. Consumer goods grew 0.5 per cent. When an option list is otherwise drawn from one table, an entry from a different table is usually a decoy.

The Index of Industrial Production measures the volume of industrial output rather than its value, is compiled by the National Statistical Office under the Ministry of Statistics and Programme Implementation on a base of 2011-12 equal to 100, and is released as Quick Estimates on the twelfth of each month with a lag of about six weeks. It is published under two classifications and confusing them is the commonest error on this topic. The sectoral classification has three heads with fixed weights — manufacturing at 77.63 per cent, mining at 14.37 and electricity at 7.99 — and answers the question of where output came from. The use-based classification has six heads — primary goods at 34.05 per cent, intermediate goods at 17.22, consumer non-durables at 15.33, consumer durables at 12.84, infrastructure and construction goods at 12.34, and capital goods at 8.22 — and answers the analytically more interesting question of what the output was for. That second table separates investment demand, which shows up in capital goods and in infrastructure and construction goods, from consumption demand, which shows up in the two consumer categories. Capital goods carries the smallest weight of all six, yet it is watched most closely of any, because month to month it is the nearest available proxy for what is happening to investment in the economy.

There is a single observation that answers this question without any recall of the table. Three of the four options contain consumer goods, and in 2022-23 consumer goods was the weakest part of the whole index — durables and non-durables both grew by half a per cent, against 12.9 for capital goods. So if you know only one thing about that year, namely that consumption lagged while investment surged, you can eliminate three options at once and arrive at the fourth. That one fact is also the standard characterisation of FY2023 in every commentary on the period, so it is not obscure. A second, purely structural check backs it up: the option list is drawn from the use-based classification, and option (d) slips in 'manufacturing', which belongs to the sectoral classification instead. An entry imported from a different table is nearly always a decoy. On the honest limits of this answer: the stem asks which indices saw 'significant' growth without defining the word, and the release itself labels nothing significant — the ranking has to be read off the growth row and judged. That imprecision is why our two independent derivations recorded this question at medium rather than high confidence, even though the table itself points cleanly in one direction.

• Quick Estimates of the IIP for March 2023, released by the NSO on 12 May 2023, Statement III (use-based), April-to-March growth for 2022-23: Primary goods 7.4 per cent, Capital goods 12.9, Intermediate goods 3.7, Infrastructure/Construction goods 8.0, Consumer durables 0.5 and Consumer non-durables 0.5.
• Statement I of the same release gives sectoral growth for the same period: Mining 5.8 per cent, Manufacturing 4.5, Electricity 8.9, and the general index 5.1.
• The IIP is compiled by the National Statistical Office under the Ministry of Statistics and Programme Implementation, with base 2011-12 equal to 100, and Quick Estimates are released on the twelfth of each month with about a six-week lag.
• Sectoral weights in the index: manufacturing 77.63 per cent, mining 14.37 and electricity 7.99.
• Use-based weights: primary goods 34.05 per cent, intermediate goods 17.22, consumer non-durables 15.33, consumer durables 12.84, infrastructure and construction goods 12.34, and capital goods 8.22.
• Capital goods has the smallest weight of the six use-based categories but is followed most closely, because it is the nearest monthly proxy available for investment demand in the economy.

• Assuming consumption grew because the economy grew. In 2022-23 both consumer durables and consumer non-durables grew by only 0.5 per cent, the weakest figures in the use-based table.
• Mixing the two classifications. Manufacturing is a sectoral head and cannot be compared like for like with use-based categories such as capital goods.
• Reading the largest weight as the largest growth. Primary goods carries a third of the index but grew 7.4 per cent, while capital goods carries only 8.22 per cent and grew 12.9.

BPSC asks the statistical releases by their headline pattern rather than their exact numbers — which categories rose, which fell — and expects a candidate to have read the year's economic commentary closely enough to know the shape of the data, filling the wrong options with pairings that mix one true performer with one weak one. UPSC asks the architecture of the same indices instead: what the Eight Core Industries are and what they weigh inside the IIP, or which institution publishes which price index, so the ministry-and-methodology side matters as much for it as the year's figures do for BPSC.

• practice — not a real PYQ

  The Index of Industrial Production in India is compiled and released by

  • (a)the Reserve Bank of India
  • (b)the National Statistical Office under the Ministry of Statistics and Programme Implementation
  • (c)the Office of the Economic Adviser, Ministry of Commerce and Industry
  • (d)the Labour Bureau

  Answer(b) the National Statistical Office under the Ministry of Statistics and Programme Implementation, on a base of 2011-12 equal to 100, with Quick Estimates released on the twelfth of each month. The Office of the Economic Adviser compiles the Wholesale Price Index and the Labour Bureau the CPI for Industrial Workers.

• practice — not a real PYQ

  In the use-based classification of the Index of Industrial Production, which category carries the largest weight ?

  • (a)Capital goods
  • (b)Primary goods
  • (c)Consumer non-durables
  • (d)Infrastructure/construction goods

  Answer(b) Primary goods, at about 34 per cent. Capital goods carries the smallest weight of the six, about 8.2 per cent, even though it is the category most closely watched as a proxy for investment.