CDS (II) 2020 General Knowledge · Question 33 of 120

Correct — A, primary goods. In the current Index of Industrial Production series, with base year 2011-12, the use-based classification splits industrial output into six baskets — primary goods, capital goods, intermediate goods, infrastructure and construction goods, consumer durables and consumer non-durables — and primary goods carries the heaviest weight of the six, 34.05 per cent. That is roughly a third of the whole index resting on one basket, which is why monthly IIP prints swing sharply with coal, crude, natural gas and electricity output. None of the other three options comes anywhere near a third; intermediate goods, consumer non-durables and consumer durables all sit far below it.

• (b)intermediate goods — A real category in the same classification, but a much lighter one. Intermediate goods are inputs that go on to be processed further; they carry well under half the weight of primary goods.
• (c)consumer durables — The lightest of the consumer baskets — cars, refrigerators, televisions and the like. It is the group that moves most in a boom, which makes it memorable, but memorability is not weight.
• (d)consumer non-durables — Bigger than consumer durables and closer to intermediate goods, but still short of primary goods. Food products, beverages and pharmaceuticals sit here.

The Index of Industrial Production measures the volume of industrial output against a base year, and is released monthly by the National Statistical Office. It can be cut two ways. The sectoral cut has three parts — mining, manufacturing and electricity. The use-based cut has six — primary, capital, intermediate, infrastructure and construction goods, consumer durables and consumer non-durables. Both cuts describe the same 100 per cent of the index, so their weights are not additive across cuts.

Questions on the IIP almost always ask for either the heaviest sector or the heaviest use-based category, and candidates mix the two answers up. In the sectoral cut manufacturing dominates; in the use-based cut it is primary goods. A useful cross-check sits alongside: the Eight Core Industries — coal, crude oil, natural gas, refinery products, fertilizers, steel, cement and electricity — together account for about 40.27 per cent of the IIP, which tells you how much of the index is basic, upstream output rather than finished consumer goods. That is the same story the 34.05 per cent figure tells. Anchor the whole thing to the 2011-12 base the paper was set against; the core-industries index has since been rebased to 2022-23 and widened to nine items with iron ore added.

• Primary goods carry a weight of 34.05 per cent in the use-based classification of the 2011-12 IIP series — the largest of the six categories.
• The six use-based categories are primary, capital, intermediate, infrastructure and construction goods, consumer durables and consumer non-durables.
• The three sectoral categories are mining, manufacturing and electricity, with manufacturing much the largest.
• The Eight Core Industries have a combined weight of about 40.27 per cent in the IIP.
• From July 2026 the core-industries index runs on a 2022-23 base with nine items, iron ore having been added to the original eight.

• Answering the sectoral question with the use-based answer, or the reverse.
• Assuming consumer goods must dominate an industrial index because consumption dominates GDP.
• Quoting old base-year weights — the 2004-05 series used a different set of use-based categories entirely, beginning with 'basic goods'.

Either as a straight 'largest weight' pick like this one, or as a statements item on what the Eight Core Industries contain and how much of the IIP they cover.

• practice — not a real PYQ

  In the sectoral classification of India's Index of Industrial Production, which one of the following carries the largest weight?

  • (a)Mining
  • (b)Manufacturing
  • (c)Electricity
  • (d)Construction

  Answer(b) Manufacturing — the sectoral cut has only three parts, mining, manufacturing and electricity, and manufacturing is much the largest. Construction is not a sector in the IIP at all.

• practice — not a real PYQ

  Which one of the following is not among the Eight Core Industries whose index feeds into the IIP?

  • (a)Fertilizers
  • (b)Cement
  • (c)Textiles
  • (d)Refinery products

  Answer(c) Textiles — the eight are coal, crude oil, natural gas, refinery products, fertilizers, steel, cement and electricity.