CDS (II) 2022 General Knowledge · Question 6 of 120

Correct — B, Electricity, gas, water supply and other utility services. The Economic Survey 2021-22 reproduces the National Statistical Office's sectoral growth of gross value added at constant 2011-12 prices, and for 2020-21 — the year of the national lockdown — utilities is the only one of these four that grew, at 1.9 per cent. Mining and quarrying fell 8.5 per cent, financial, real estate and professional services fell 1.5 per cent, and public administration, defence and other services fell 4.6 per cent. Total GVA contracted 6.2 per cent and GDP 7.3 per cent. The Survey gives the reason in a sentence: the utilities segment 'experienced a more muted cycle as basic services such as electricity and water supply were maintained even at the height of the national lockdown.' Only one other broad sector grew that year, agriculture and allied activities at 3.6 per cent, and it is not on the list.

• (a)Mining and quarrying — The worst performer of the four, contracting 8.5 per cent. Mines stopped, construction demand collapsed and transport of bulk minerals was disrupted; the sector had already shrunk 2.5 per cent in 2019-20.
• (c)Financial, real estate and professional services — Down 1.5 per cent. It is the mildest of the three falls, which is what makes it tempting — banking and software kept working from home — but a fall is still a fall, and property and professional services dragged it below zero.
• (d)Public administration, defence and other services — Down 4.6 per cent. Government salaries continued, but this head also carries education, health and other services delivered in person, and closed schools and colleges pulled the whole group down.

Gross value added is output minus the cost of inputs, measured activity by activity, and adding indirect taxes net of subsidies to it gives GDP. The National Statistical Office reports GVA under eight heads, and reading a crisis year means reading which heads moved which way. In 2020-21 the pattern was sharp: everything that needed people to gather in one place collapsed, everything essential and pipe-delivered held up.

You do not need to remember four percentages to answer this. Ask which of the four could not be switched off. Electricity, piped water and gas are supplied to homes as well as to factories, and household demand actually rose during a lockdown that kept everyone indoors, offsetting much of the industrial fall. Mining feeds construction and industry, both of which stopped. The other two heads are dominated by services delivered face to face. That reasoning gets you to utilities without a single figure. As of the 2022 exam these were the provisional estimates in the Economic Survey; the underlying series has since been rebased, with the National Statistical Office releasing a new GDP series on base year 2022-23 in February 2026, so the exact percentages quoted here belong to the 2011-12 series.

• GVA growth in 2020-21 at constant 2011-12 prices: agriculture and allied +3.6 per cent; electricity, gas, water supply and other utility services +1.9 per cent.
• The falls that year: manufacturing -7.2, construction -8.6, mining and quarrying -8.5, public administration, defence and other services -4.6, financial, real estate and professional services -1.5.
• Trade, hotels, transport, communication and broadcasting-related services were worst hit, at -18.2 per cent.
• GVA at basic prices fell 6.2 per cent and GDP fell 7.3 per cent in 2020-21.
• The Economic Survey 2021-22 attributes the utilities result to basic services such as electricity and water supply being maintained even at the height of the national lockdown.

• Assuming a sector is safe because its workers could work from home; the financial and professional services head still fell.
• Confusing GDP growth with GVA growth — the two differ by net indirect taxes and were -7.3 and -6.2 per cent that year.
• Quoting a 2020-21 figure from one vintage of estimates against a question set on another; provisional, revised and rebased numbers all differ.

As a which-sector-grew question anchored to a named year, as a ranking of sectoral growth rates, or as statements on the composition of GVA.

• practice — not a real PYQ

  Which one of the following broad sectors recorded the sharpest contraction in gross value added in India in 2020-21?

  • (a)Manufacturing
  • (b)Trade, hotels, transport and communication
  • (c)Mining and quarrying
  • (d)Construction

  Answer(b) Trade, hotels, transport and communication — it fell 18.2 per cent, far more than manufacturing at 7.2, mining at 8.5 or construction at 8.6.

• practice — not a real PYQ

  Gross domestic product at market prices is obtained from gross value added at basic prices by

  • (a)adding product taxes and subtracting product subsidies
  • (b)subtracting product taxes and adding product subsidies
  • (c)adding depreciation
  • (d)subtracting net factor income from abroad

  Answer(a) adding product taxes and subtracting product subsidies — GDP equals GVA at basic prices plus taxes on products less subsidies on products.