According to the report published by the Confederation of Indian Industry in February 2025, the share of pharmaceutical sector of Madhya Pradesh in terms of gross fixed capital formation in India is:
- (a)2.9%
- (b)1.0%
- (c)1.9%
- (d)2.2%
Correct — C, 1.9%. The CII report 'Envisioning Madhya Pradesh Economy@2047', released in February 2025 around the Bhopal Global Investors Summit, benchmarks each of MP's key sectors against the all-India sector using Annual Survey of Industries (MoSPI) data for 2022-23. In its table on the pharmaceutical sector, Madhya Pradesh's share of India's pharma sector on gross fixed capital formation — the capital actually invested in plant, machinery and buildings — is 1.9 per cent. In rupee terms MP's pharma GFCF rose to Rs 594 crore in 2022-23 from Rs 311 crore in 2019-20, which is 3.3 per cent of all investment happening in MP's industry but still only 1.9 per cent of the country's pharmaceutical capex.
- (a)2.9% — A real number from the same table, but a different indicator — 2.9 per cent is MP's share of India's pharmaceutical factories (158 units in 2022-23), not of gross fixed capital formation.
- (b)1.0% — Also from the same table: 1.0 per cent is MP's share of India's pharmaceutical real output (Rs 5,772 crore in 2022-23). Output and investment are different columns — a state can invest more than it currently produces.
- (d)2.2% — Again a genuine figure from the same block, but for net profit — MP accounts for about 2.2 per cent of the Indian pharmaceutical sector's net profit (Rs 1,911 crore in 2022-23). The question asks specifically about capital formation.
Gross fixed capital formation (GFCF) is the national-accounts measure of investment: spending on fixed assets such as plant, machinery, buildings and equipment, net of disposals. Because it is forward-looking — you build capacity before you produce — GFCF is the indicator analysts watch to judge whether a sector is expanding. Sector benchmarking reports therefore report a state's share of a national industry separately for factories, output, capital formation, profits and employment; the four options in this question are simply four of those columns. For Madhya Pradesh's pharmaceutical sector the picture in 2022-23 is a small but capital-hungry industry: factory count and output falling, capex and profit rising sharply.
The trap is beautifully constructed — every option is a true statistic about MP's pharma sector from the same report; only one belongs to the GFCF column. So the discipline the question rewards is reading the indicator name, not recognising the number. If you must reason it out, remember the report's own narrative: MP's pharma capex nearly doubled between 2019-20 and 2022-23 even as its output share stayed at the 1 per cent level, so the investment share should be higher than the output share (1.0) and lower than the factory share (2.9).
- CII report 'Envisioning Madhya Pradesh Economy@2047' (February 2025) projects Madhya Pradesh as a USD 2.1 trillion economy by 2047-48
- MP's pharmaceutical GFCF: Rs 594 crore in 2022-23, up from Rs 311 crore in 2019-20 — 3.3% of all investment in MP's industry and 1.9% of India's pharma sector
- Other 2022-23 shares of the national pharma sector: factories 2.9%, real output 1.0%, net profit 2.2%, workers employed 2.4%
- MP ranked 5th among Indian states in pharmaceutical exports in 2023-24; pharma made up 23.4% of MP's exports that year, against 16% in 2022-23
- Pharma clusters in MP: Pithampur SEZ (Dhar), Indore, Gwalior, Ujjain, Sagar, Jabalpur, Dewas; a dedicated medical devices park at Vikram Udyogpuri, Ujjain
- Reading GFCF as output or turnover — it measures investment in fixed assets, not production
- Confusing a state's share of national factories with its share of national capital formation
- Assuming a low share means a shrinking sector — MP's pharma capex nearly doubled between 2019-20 and 2022-23 even while its output share stayed near 1 per cent
MPPSC lifts a single figure straight out of the newest state-economy report and surrounds it with the neighbouring figures from the same table; UPSC asks the underlying concept instead — what capital formation is and why high saving need not translate into output.
Despite being a high saving economy, capital formation may not result in significant increase in output due to
- (a) weak administrative machinery
- (b) illiteracy
- (c) high population density
- (d) high capital-output ratio
Answer(d) high capital-output ratio — more capital is needed per unit of extra output.
The same variable, capital formation, tested conceptually — UPSC asks why investment need not translate into output, which is exactly the gap the MP pharma figures illustrate (capex share 1.9%, output share 1.0%).
- practice — not a real PYQ
In national accounting, Gross Fixed Capital Formation (GFCF) measures:
- (a)Total household consumption expenditure
- (b)Additions to fixed assets such as plant, machinery and buildings
- (c)The government's total tax revenue
- (d)Net exports of goods and services
Answer(b) Additions to fixed assets — it is the standard measure of investment in the economy.
- practice — not a real PYQ
The Annual Survey of Industries (ASI), the principal source of India's factory-sector data, is conducted by:
- (a)NITI Aayog
- (b)Reserve Bank of India
- (c)Ministry of Statistics and Programme Implementation
- (d)Department for Promotion of Industry and Internal Trade
Answer(c) Ministry of Statistics and Programme Implementation — through the National Statistical Office.