According to the Index of Industrial Production (IIP) data from the Ministry of Statistics and Programme Implementation, which indices experienced significant growth in Financial Year 2023 ?

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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.

Why the other options are wrong — (a) 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 — 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 — 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.

Concept: 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.

State PCS 2024 Q30 — Economy PYQ with Answer

State PCS 2024 Q30 — Economy PYQ with Answer