💥UPSC 2026, 2027, 2028 UAP Mentorship (March Batch) + Access XFactor Notes & Microthemes PDF
Talk to mentor

Civilsdaily

Login

Type: DOMR

  • Innovation Ecosystem in India

    National Manufacturing Innovation Survey (NMIS), 2021-22

    DOMR | Economics | Mains Paper 3: Effects Of Liberalization On The Economy, Changes In Industrial Policy and their effects on Industrial Growth

    Note4Students

    From UPSC perspective, the following things are important:

    Prelims level: National Manufacturing Innovation Survey (NMIS)

    Mains level: Read the attached story

    Central Idea: The Department of Science and Technology under the Ministry of Science & Technology has released the National Manufacturing Innovation Survey (NMIS) 2021-22.

    About National Manufacturing Innovation Survey

    Details
    Undertaken by DST and United Nations Industrial Development Organization (UNIDO)
    History First National Innovation Survey in 2011
    Focus Manufacturing competitiveness
    Purpose Innovation performance of Indian manufacturing firms
    Insights Enabling activities and identifying barriers to innovation
    Processes Examines innovation processes, outcomes, and barriers faced by firms
    State/Sector Evaluates performance of states and sectors in producing new products, services, and business processes
    Key manufacturing sectors 5 sectors: textiles; food & beverage; automotive; pharma; ICT.

     

    Components of the survey

    (1) Firm-level survey

    innovation

    • It captured data related to types of innovations and innovative measures taken by firms.
    • Includes: the process of innovation, access to finance, resources, and information for innovation, besides also recording the factors impacting the innovation activities in a firm.
    • One in four firms have successfully implemented an innovation in the observation period.
    • Over 80% of these firms benefitted significantly in expanding markets and production and reducing costs.

    (2) Sectorial System of Innovation survey

    innovation

    • It mapped the manufacturing innovation system and its role in achieving innovations in firms.
    • It measures the interactions between stakeholders of the innovation ecosystem, barriers to innovation, and the convergence or divergence of policy instruments in select 5 key manufacturing sectors important to the Indian economy.

    Key highlights

    • Karnataka is the most “innovative” State, followed by Dadra and Nagar Haveli, Daman and Diu (DNH&DD), Telangana, and Tamil Nadu.
    • Telangana, Karnataka, and Tamil Nadu had the highest share of innovative firms at 46.18% ,39.10% and 31.90%, respectively.
    • Odisha, Bihar, and Jharkhand reported the lowest share of such firms at 12.78%, 13.47% and 13.71%, respectively.
    • Nearly three-fourths of the 8,000-odd firms surveyed, most of them micro, small, and medium enterprises (MSME), neither made any innovative product nor process innovation.
    • However, nearly 80% of the firms that did report significant gains such as expanding markets and reducing production costs.

    Barriers identified

    • The most frequent “barriers to innovation” were the lack of internal funds, high innovation costs, and lack of financing from external sources.
    • Gujarat and DNH&DD reported the highest frequencies of barriers to innovation, despite being among India’s most industrialised States.

    Significance of the survey

    • It will help in the Make-in-India programme, specifically the Production Linked Incentive (PLI) schemes.
    • It will help to boost manufacturing in a variety of sectors, including electronics, pharmaceuticals, and automobiles.

     

     

    Get an IAS/IPS ranker as your personal mentor for UPSC 2024 | Schedule your FREE session and get the Prelims prep Toolkit!

    Get an IAS/IPS ranker as your 1: 1 personal mentor for UPSC 2024

    Attend Now

  • Goods and Services Tax (GST)

    Lok Sabha clears forming GST Appellate Tribunal

    DOMR | Economics | Mains Paper 2: Statutory, Regulatory & Various Quasi-Judicial Bodies

    Note4Students

    From UPSC perspective, the following things are important:

    Prelims level: GSTAT

    Mains level: Disputes resolution under GST regime

    The Lok Sabha passed Finance Bill, 2023 with some amendments, including one that seeks to set up the much-awaited GST Appellate Tribunal (GSTAT), which will deal with tax disputes.

    What is GST Appellate Tribunal?

    • The GST Appellate Tribunal is a quasi-judicial body proposed to be established to resolve disputes related to the Goods and Services Tax (GST) in India.
    • It will function as an independent body to hear appeals against orders passed by the GST authorities or the Appellate Authority.
    • The tribunal will be composed of a national bench and various regional benches, headed by a chairperson appointed by the central government.
    • The proposed tribunal is expected to help expedite the resolution of disputes related to GST and reduce the burden on the judiciary.

    Under GST, if a person is not satisfied with the decision passed by any lower court, an appeal can be raised to a higher court, the hierarchy for the same is as follows (from low to high):

    1. Adjudicating Authority
    2. Appellate Authority
    3. Appellate Tribunal
    4. High Court
    5. Supreme Court

    Composition of GSTAT

    • GSTAT will have a “Principal Bench” in New Delhi.
    • It would have the President (probably a former Supreme Court judge), a judicial member, a technical member (centre), and a technical member (state).
    • It will also have state benches.
    • Appeals pertaining to disputes of less than Rs. 50 lakh that don’t deal with a question of law could be decided by a single-member bench, as per the norms approved by the GST Council.

    Why need such Tribunal?

    • Unburden judiciary: GST Appellate Tribunal will help resolve the rising number of disputes under the 68-month old indirect tax regime that are now clogging High Courts and other judicial fora.
    • Improve the efficiency of GST System: Overall, the establishment of the GST Appellate Tribunal is expected to improve the efficiency and effectiveness of the GST system in India.
    • Independent mechanism: The proposed Tribunal will provide an independent and efficient mechanism for resolving disputes related to GST.
    • Avoid tax evasion: It will help to expedite the resolution of disputes, reduce the burden on the judiciary, and promote greater certainty and predictability in the GST system.

    Issues with present litigation

    • Compliance issues: The GST system is relatively new in India, having been implemented in 2017, and there have been several issues with compliance and interpretation of rules and regulations.
    • Complex adjudication hierarchy: The current dispute resolution mechanism involves multiple layers of adjudication, starting with the GST officer and as mentioned above.
    • Time-consuming process: This process can be time-consuming, costly, and burdensome for taxpayers, especially small and medium-sized enterprises.

    Back2Basics: Finance Bill

    • A Finance Bill is a proposed legislation that is introduced by the government to implement the financial proposals of the Union Budget for the upcoming financial year in India.
    • It is a comprehensive document that outlines the government’s revenue and expenditure for the year, including changes in tax laws, tariffs, customs duties, and other fiscal measures.
    • Since the Union Budget deals with these things, it is passed as a Finance Bill.

    Types of Finance Bills

    • There are different kinds of Finance Bills — the most important of them is the Money Bill. The Money Bill is concretely defined in Article 110.
    • In India, there are three types of Finance Bills that can be introduced in the Parliament:
    1. Annual Finance Bill: This is the most common type of Finance Bill and is introduced by the government every year to give effect to the tax proposals announced in the Union Budget. It contains provisions related to taxation, expenditure, and revenue collection for the upcoming financial year.
    2. Finance Bill (Money Bill): A Money Bill is a type of Finance Bill that contains only provisions related to taxation and expenditure, but does not include any other matter. Money Bills are deemed to be passed by the Lok Sabha, the lower house of Parliament, and do not require approval from the Rajya Sabha, the upper house of Parliament.
    3. Finance Bill (Non-Money Bill): This type of Finance Bill contains provisions related to taxation and other matters, such as changes in the structure of regulatory bodies or the introduction of new policies. Unlike Money Bills, Non-Money Bills must be passed by both the Lok Sabha and the Rajya Sabha to become law.

    How is money bill different from Finance Bill?

    • A Money Bill is certified by the Speaker as such — in other words, only those Financial Bills that carry the Speaker’s certification are Money Bills.
    • Article 110 states that a Bill shall be deemed to be a Money Bill if it contains only provisions dealing with all or any of the following matters:

    (a) the imposition, abolition, remission, alteration or regulation of any tax;

    (b) the regulation of the borrowing of money or any financial obligations undertaken

    (c) the custody of the consolidated Fund or the Contingency Fund of India, the payment of moneys into or the withdrawal of moneys from any such Fund;

    (d) the appropriation of moneys out of the consolidated Fund of India;

    (e) the declaring of any expenditure to be expenditure charged on the Consolidated Fund of India or the increasing of the amount of any such expenditure;

    (f) the receipt of money on account of the Consolidated Fund of India or the public account of India or the custody or issue of such money or the audit of the accounts of the Union or of a State; or

    (g) any matter incidental to any of the matters specified in sub clause (a) to (f)

     

     

     

    Get an IAS/IPS ranker as your 1: 1 personal mentor for UPSC 2024

    Attend Now

  • Economic Indicators and Various Reports On It- GDP, FD, EODB, WIR etc

    [pib] Social Progress Index (SPI) for states and districts

    DOMR | Economics | Mains Paper 3: Inclusive Growth & Issues

    Note4Students

    From UPSC perspective, the following things are important:

    Prelims level: Social Progress Index (SPI)

    Mains level: Read the attached story

    Economic Advisory Council to Prime Minister (EAC-PM) will release the Social Progress Index (SPI) for states and districts of India on December 20, 2022.

    Social Progress Index (SPI) Report

    • SPI is a comprehensive tool intended to be a holistic measure of the Social Progress made by the country at the national and sub-national levels.
    • The report has been prepared by Institute for Competitiveness, headed by Dr Amit Kapoor and the Social Progress Imperative, headed by Michael Green.
    • It was mandated by Economic Advisory Council to the Prime Minister of India.

    Objectives of the report

    • With state and district-wise rankings and scorecards, the report aims to provide a systematic account of the social progress made at all levels in the country.
    • The report also sheds light on the achievements of the districts that have performed well on the index and the role of the states in achieving social progress.
    • A special section of the report provides an analysis of the Aspirational Districts of India, leading to a broader understanding of the social progress at the grassroots level.
    • The report will act as a critical enabler and tool for policymakers in the coming years for achieving sustained socio-economic growth.

    Components of SPI

    SPI assesses the performance of states and districts on three dimensions of social progress:

    1. Basic Human Needs: It assesses the performance of states and districts in terms of Nutrition and Basic Medical Care, Water and Sanitation, Personal Safety and Shelter.
    2. Foundations of Wellbeing: It evaluates the progress made by the country across the components of Access to Basic Knowledge, Access to Information and Communication, Health and Wellness, and Environmental Quality.
    3. Opportunity: It focuses on aspects of Personal Rights, Personal Freedom and Choice, Inclusiveness, and Access to Advanced Education.

    (This newscard will be updated once the report is published.)

    Need for SPI

    • GDP is not a holistic measure of a nation’s development: It would be incorrect to state that the economic progress is completely divorced from progress made in areas mentioned above.
    • Social outcomes of developmental economics: The primary goal of the SPI is to provide a rigorous tool to benchmark progress and stimulate progress within countries.
    • No single holistic parameter available: Several indicators, like GHI and HDI, go beyond GDP, but none captures social progress as finely as SPI.
    • Doing away with biased reports: India does not display a respectable position in the index, as even the small neighbours like Nepal have a better rank. India is also the lowest rank holder in BRICS.

     

    Click and get your FREE Copy of CURRENT AFFAIRS Micro Notes

    (Click) FREE 1-to-1 on-call Mentorship by IAS-IPS officers | Discuss doubts, strategy, sources, and more

    Get an IAS/IPS ranker as your 1: 1 personal mentor for UPSC 2024

    Attend Now

  • Primary and Secondary Education – RTE, Education Policy, SEQI, RMSA, Committee Reports, etc.

    What is Mother Tongue Survey of India (MTSI)?

    DOMR | Governance | Mains Paper 2: Health & Education

    Note4Students

    From UPSC perspective, the following things are important:

    Prelims level: MTSI

    Mains level: Mother tounges as a medium of education

    mother

    The Ministry of Home Affairs (MHA) has completed the Mother Tongue Survey of India (MTSI) with field videography of the country’s 576 languages.

    What is the MTSI?

    • The Mother Tongue Survey of India is a project that surveys the mother tongues, which are returned consistently across two and more Census decades.
    • It also documents the linguistic features of the selected languages.
    • The category “mother tongue” is a designation provided by the respondent, but it need not be identical with the actual linguistic medium.
    • The NIC and the National Film Development Corporation (NFDC) will be documenting and preserving the linguistic data of the surveyed mother tongues in audio-video files.
    • Video-graphed speech data of Mother Tongues will also be uploaded on the NIC survey for archiving purposes.

    How many “mother tongues” does India have?

    • As per an analysis of 2011 linguistic census data in 2018, more than 19,500 dialects are spoken in India as mother tongues.
    • They are grouped into 121 mother tongues.
    • According to the 2011 linguistic census, Hindi is the most widely spoken mother tongue, with 52.8 crore people or 43.6 per cent of the population declaring it as the mother tongue.
    • The next highest is Bengali, mother tongue for 9.7 crore individuals, and accounting for 8 per cent of the population.

    Where does the mother tongue feature in the education of children?

    • The new National Curriculum Framework (NCF) has recommended that mother tongue should be the primary medium of instruction in schools for children up to eight years of age.
    • The new NCF, which deals with pre-school and classes I-II, emphasises the virtues of the mother tongue as the primary medium of instruction.
    • It says that by the time children join pre-school, they acquire significant competence in the “home language”.
    • This push has come after repeated policy articulations in its favour from PM and Home Minister.

    Why emphasize more on mother tongue?

    • According to the NCF, evidence from research confirms the importance of teaching children in their mother tongue during the foundational years and beyond.
    • Children learn concepts most rapidly and deeply in their home language.
    • Hence the primary medium of instruction is optimally the child’s home language/ mother tongue/ familiar language in the Foundational Stage.

    What is the status of the population census?

    • The forthcoming decennial population census will be the 16th since the first exercise was conducted in 1872.
    • It will be the eighth census since independence.
    • The census was supposed to take place in 2021, but was postponed due to the outbreak of the Covid-19 pandemic.

    Updates in the new census

    • To ensure efficient processing and quick release of data, the Home Ministry has adopted some new initiatives, which include digital data processing and the use of geospatial technology.
    • According to the report, pre-census mapping activities like preparation and updation of maps that show administrative units will be carried out.
    • Census results will be disseminated via web-based interactive maps.

     

    Click and get your FREE Copy of CURRENT AFFAIRS Micro Notes

    Get an IAS/IPS ranker as your 1: 1 personal mentor for UPSC 2024

    Attend Now

  • Industrial Sector Updates – Industrial Policy, Ease of Doing Business, etc.

    What is Purchasing Managers Index (PMI)?

    DOMR | Economics | Mains Paper 3: Effects Of Liberalization On The Economy, Changes In Industrial Policy and their effects on Industrial Growth

    Note4Students

    From UPSC perspective, the following things are important:

    Prelims level: Manufacturing Purchasing Managers’ Index (PMI)

    Mains level: India's manufacturing sector slowdown

    India’s manufacturing sector experienced its slowest expansion in September since June, the S&P Global India Manufacturing Purchasing Managers’ Index (PMI) indicated, with the index easing to 55.1 from August’s 56.2.

    PMI improves

    • A PMI reading above 50 indicates an increase in firms’ activity levels, and September marked the 15th straight month of growth in manufacturing activity.

    Purchasing Managers’ Index (PMI)

    • PMI is an indicator of business activity — both in the manufacturing and services sectors.
    • It is a survey-based measure that asks the respondents about changes in their perception of some key business variables from the month before.
    • It is calculated separately for the manufacturing and services sectors and then a composite index is constructed.
    • The PMI is compiled by IHS Markit based on responses to questionnaires sent to purchasing managers in a panel of around 400 manufacturers.

    How is the PMI derived?

    • The PMI is derived from a series of qualitative questions.
    • Executives from a reasonably big sample, running into hundreds of firms, are asked whether key indicators such as output, new orders, business expectations and employment were stronger than the month before and are asked to rate them.

    How does one read the PMI?

    • A figure above 50 denotes expansion in business activity. Anything below 50 denotes contraction.
    • Higher the difference from this mid-point greater the expansion or contraction. The rate of expansion can also be judged by comparing the PMI with that of the previous month data.
    • If the figure is higher than the previous month’s then the economy is expanding at a faster rate.
    • If it is lower than the previous month then it is growing at a lower rate.

    What are its implications for the economy?

    • The PMI is usually released at the start of the month, much before most of the official data on industrial output, manufacturing and GDP growth becomes available.
    • It is, therefore, considered a good leading indicator of economic activity.
    • Economists consider the manufacturing growth measured by the PMI as a good indicator of industrial output, for which official statistics are released later.
    • Central banks of many countries also use the index to help make decisions on interest rates.

     

    UPSC 2023 countdown has begun! Get your personal guidance plan now! (Click here)

    Get an IAS/IPS ranker as your 1: 1 personal mentor for UPSC 2024

    Attend Now

  • Terrorism and Challenges Related To It

    MHA bans PFI for five years under UAPA

    DOMR | Security Issues | Mains Paper 3: Organized Crime & Terrorism

    Note4Students

    From UPSC perspective, the following things are important:

    Prelims level: UAPA

    Mains level: Terror financing and money laundering

    The Union Home Ministry has declared the Popular Front of India (PFI) and its front organizations as an “unlawful association” under the Unlawful Activities (Prevention) Act (UAPA).

    PFI under the Unlawful (Activities) Prevention Act (UAPA)

    • The UAPA is aimed at the effective prevention of unlawful activity associations in India.
    • Its main objective was to make powers available for dealing with activities directed against the integrity and sovereignty of India
    • It is an upgrade on the Terrorist and Disruptive Activities (Prevention) Act TADA, which was allowed to lapse in 1995 and the Prevention of Terrorism Act (POTA) was repealed in 2004.
    • It was originally passed in 1967 under the then Congress government led by former Prime Minister Indira Gandhi.
    • Till 2004, “unlawful” activities referred to actions related to secession and cession of territory. Following the 2004 amendment, “terrorist act” was added to the list of offences.

    What are Unlawful Activities and Associations?

    • The UAPA lays down the definitions and rules for designating an organization as an “unlawful association” if it is engaged in certain types of activities.
    • Under Section 3 of the UAPA Act, the government has powers to declare an association “unlawful”.
    • The government can then issue a notification designating such an organization as a terrorist organization if it believes that the organization is part of “terrorist activities.”

    (1) Unlawful Activites

    • Under section 2(o) of the UAPA, an unlawful activity in relation to an individual or association means – Any action taken by such an individual or association (whether by committing an act or by words, either spoken or written, or by signs or by visible representation or otherwise), –
    1. Works for the Cession of a part of the territory of India or the secession of a part of the territory of India from the Union
    2. Disclaims, questions, disrupts or is intended to Disrupt the sovereignty and territorial integrity of India; or
    3. which causes or is intended to cause Disaffection against India;
    • Related and ancillary acts, including financing, support or promotion of any such activities are also “unlawful activity”.

    (2) Unlawful Association

    The UAPA also defines an “Unlawful Association” under section 2(p) as meaning any association,–

    1. which has for its object any unlawful activity, or which encourages or aids persons to undertake any unlawful activity, or of which the members undertake such activity or
    2. which encourages or aids persons to undertake any such activity, or of which the members undertake any such activity

    Reading the ban on PFI

    • At present, the MHA notification published has said that the PFI and its affiliated organisations are being notified as “Unlawful Associations” with immediate effect.
    • The charges against PFI are-
    1. Pursuing a secret agenda to radicalize a particular section of society
    2. Working towards undermining the concept of democracy and
    3. Showing sheer disrespect towards the constitutional authority and constitutional set up of the country
    4. Gathering funds and ideological support from outside the country
    5. Money laundering

    Immediate trigger for PFI’s ban

    • The PFI is accused of engaging in violent and barbaric acts.
    • Criminal violent acts carried out by PFI include chopping off the limb of a college professor, cold-blooded killings of persons associated with organisations espousing other faiths.
    • It has been allegedly involved in obtaining explosives to target prominent people and places and destruction of public property.

    What does the ‘ban’ mean?

    • The notification means that the membership of, support or financing to the PFI and the allied banned organizations, is now ILLEGAL.
    • Any person who is a member of these organisations can face arrest, and joining membership of these organisations is a criminal offence.
    • The government can also seize the properties, bank accounts and offices connected to these organisations.

     

     

    Get an IAS/IPS ranker as your 1: 1 personal mentor for UPSC 2024

    Attend Now

  • Police Reforms – SC directives, NPC, other committees reports

    NCRB releases ‘Crime in India’ Report

    DOMR | Governance | Mains Paper 2: Governance, Transparency & Accountability, Citizens Charters

    Note4Students

    From UPSC perspective, the following things are important:

    Prelims level: NCRB

    Mains level: Crime in India

    A new edition of ‘Crime in India’, the annual report of the National Crime Records Bureau (NCRB), was released on August 29, for crime-related statistics in 2021.

    Why in news?

    • NCRB reports have been a valuable compilation of statistics over the years on offences ranging from crimes against women to economic and financial crimes.
    • It has provided honest and credible sets of crime related data in India.

    Crime in India: Key highlights

    • Overall, 2021 saw a 6 per cent decline in the number of crimes registered, as compared to 2020.
    • The crime rate per lakh population declined from 487.8 in 2020 to 445.9 in 2021.
    • However, crime statistics do not always tell the full story, and lower crimes reported in an area do not necessarily mean it is safe.
    • Crimes against women rose 15 per cent in India in 2021 and Delhi is the most unsafe metropolitan city.
    • Rajasthan reported the highest number of rape cases and Maharashtra topped the list when it comes to most suicides.
    • Around 1.73 lakh people died in traffic accidents. Uttar Pradesh saw the highest number of deaths (24,711) in traffic accidents.
    • Jammu and Kashmir registered the most Unlawful Activities (Prevention) Act (UAPA) cases under the ‘special and local laws’ in 2021, as per NCRB data.
    • Of the total 814 cases under the UAPA in India, J&K lodged 289 cases last year, followed by Manipur (157), Assam (95), Jharkhand (86) and Uttar Pradesh (83).
    • Jharkhand and Maharashtra filed the highest cases of communal riots last year with 100 and 77 cases respectively.

    Who publishes the NCRB report?

    • The NCRB was established in January 1986 with the aim of establishing a body to compile and keep records of data on crime.
    • It functions under the Union Home Ministry.
    • Apart from publishing annual reports, its functions include “Collection, coordination and exchange of information on inter-state and international criminals to the respective states”.
    • NCRB also acts as a “national warehouse” for the fingerprint records of Indian and foreign criminals, and assists in locating interstate criminals through fingerprint search.

    How does the NCRB collect information for its report?

    • The NCRB report contains data received from the 36 states and Union Territories across the country.
    • Similar data is furnished for 53 metropolitan cities, or those having a population of more than 10 lakh as per the 2011 census, by respective state-level crime records bureaus.
    • This information is entered by state/UT police at the police station/ district level, and is then validated further at the district level, then the state level, and finally by the NCRB.

    Issues with NCRB data

    • By its own admission, the NCRB says there are limitations to its data.
    • Since the publication caters to the ‘Principal Offence Rule’ for classification of crime, the actual count of each crime head may go under-reporting.
    • The Principal Offence Rule states that in a case where multiple offences are registered, only the “most heinous crime”, carrying the most stringent punishment, is considered when counting.
    • For example, ‘Murder with Rape’ is accounted as ‘Murder’, leading to undercounting of the crime of rape.
    • Vacancies or a shortage of police officers at the local level may hinder the collection of data.
    • Also the data record the incidence of registered crime rather than of actual crime.

    Antithesis to NCRB data

    • Reported crimes against women in Delhi rose significantly in the aftermath of the 2012 Nirbhaya Gangrape case.
    • This is not because the heinous crimes got trivialized.
    • It may have been a reflection of increased awareness about the need for registering crimes, both among those affected and the police, rather than an actual increase in the incidence of crime against women.

     

    UPSC 2023 countdown has begun! Get your personal guidance plan now! (Click here)

    Get an IAS/IPS ranker as your 1: 1 personal mentor for UPSC 2024

    Attend Now

  • Industrial Sector Updates – Industrial Policy, Ease of Doing Business, etc.

    Manufacturing PMI hits 8-month high

    DOMR | Economics | Mains Paper 3: issues relating to planning, mobilization of resources

    Note4Students

    From UPSC perspective, the following things are important:

    Prelims level: PMI

    Mains level: Not Much

    India’s manufacturing sector rebounded in July, with sales and output growing at the fastest pace since November. The PMI quickened last month to 56.4, from June’s 9-month low of 53.9.

    Purchasing Managers’ Index (PMI)

    • PMI is an indicator of business activity — both in the manufacturing and services sectors.
    • It is a survey-based measure that asks the respondents about changes in their perception of some key business variables from the month before.
    • It is calculated separately for the manufacturing and services sectors and then a composite index is constructed.
    • The PMI is compiled by IHS Markit based on responses to questionnaires sent to purchasing managers in a panel of around 400 manufacturers.

    How is the PMI derived?

    • The PMI is derived from a series of qualitative questions.
    • Executives from a reasonably big sample, running into hundreds of firms, are asked whether key indicators such as output, new orders, business expectations and employment were stronger than the month before and are asked to rate them.

    How does one read the PMI?

    • A figure above 50 denotes expansion in business activity. Anything below 50 denotes contraction.
    • Higher the difference from this mid-point greater the expansion or contraction. The rate of expansion can also be judged by comparing the PMI with that of the previous month data.
    • If the figure is higher than the previous month’s then the economy is expanding at a faster rate.
    • If it is lower than the previous month then it is growing at a lower rate.

    What are its implications for the economy?

    • The PMI is usually released at the start of the month, much before most of the official data on industrial output, manufacturing and GDP growth becomes available.
    • It is, therefore, considered a good leading indicator of economic activity.
    • Economists consider the manufacturing growth measured by the PMI as a good indicator of industrial output, for which official statistics are released later.
    • Central banks of many countries also use the index to help make decisions on interest rates.

     

    UPSC 2022 countdown has begun! Get your personal guidance plan now! (Click here)

    Get an IAS/IPS ranker as your 1: 1 personal mentor for UPSC 2024

    Attend Now

  • Industrial Sector Updates – Industrial Policy, Ease of Doing Business, etc.

    Core Sector output expands by 12.7%

    DOMR | Economics | Mains Paper 3: Effects Of Liberalization On The Economy, Changes In Industrial Policy and their effects on Industrial Growth

    Note4Students

    From UPSC perspective, the following things are important:

    Prelims level: Core Industries

    Mains level: Read the attached story

    India’s eight core sectors’ output growth moderated to 12.7% in June, from 18.1% in May, with all sectors except crude oil registering an uptick in production.

    What are the Core Industries in India?

    • The main or the key industries constitute the core sectors of an economy.
    • In India, there are eight sectors that are considered the core sectors.
    • They are electricity, steel, refinery products, crude oil, coal, cement, natural gas and fertilizers.

    Index of Eight Core Industries (ICI) vs Index of Industrial Production (IIP)

    [A] Index of Eight Core Industries

    • The monthly Index of Eight Core Industries (ICI) is a production volume index.
    • ICI measures collective and individual performance of production in selected eight core industries viz. Coal, Crude Oil, Natural Gas, Refinery Products, Fertilizers, Steel, Cement and Electricity.
    • Prior to the 2004-05 series six core industries namely Coal, Cement, Finished Steel, Electricity, Crude petroleum and Refinery products constituted the index basket.
    • Two more industries i.e. Fertilizer and Natural Gas were added to the index basket in 2004-05 series. The ICI series with base 2011-12 will continue to have eight core industries.

    Components covered in these eight industries for the purpose of compilation of index are as follows:

    • Coal – Coal Production excluding Coking coal.
    • Crude Oil – Total Crude Oil Production.
    • Natural Gas – Total Natural Gas Production.
    • Refinery Products – Total Refinery Production (in terms of Crude Throughput).
    • Fertilizer – Urea, Ammonium Sulphate (A/S), Calcium Ammonium Nitrate (CAN), Ammonium chloride (A/C), Diammonium Phosphate (DAP), Complex Grade Fertilizer and Single superphosphate (SSP).
    • Steel – Production of Alloy and Non-Alloy Steel only.
    • Cement – Production of Large Plants and Mini Plants.
    • Electricity – Actual Electricity Generation of Thermal, Nuclear, Hydro, imports from Bhutan.

    [B] Index of Industrial Production

    • The Index of Industrial Production (IIP) is an index for India which details out the growth of various sectors in an economy such as mineral mining, electricity and manufacturing.
    • The all India IIP is a composite indicator that measures the short-term changes in the volume of production of a basket of industrial products during a given period with respect to that in a chosen base period.

    Difference between the two

    • IIP is compiled and published monthly by the National Statistics Office (NSO), Ministry of Statistics and Programme Implementation six weeks after the reference month ends.
    • However, ICI is compiled and released by Office of the Economic Adviser (OEA), Department of Industrial Policy & Promotion (DIPP), and Ministry of Commerce & Industry.
    • The Eight Core Industries comprise nearly 40.27% of the weight of items included in the Index of Industrial Production (IIP).
    • These are Electricity, steel, refinery products, crude oil, coal, cement, natural gas and fertilisers.

    Importance of Core Industries

    • The core sectors have a major impact on the Indian economy and significantly affect most other industries as well.
    • Their measures help account for the physical volume of production in India.
    • Their analysis offers a clearer and more realistic assessment of what’s happening in the economy
    • Their progress is used by government agencies for policy-making purposes.
    • They remain extremely relevant for the calculation of the quarterly and advanced Gross Domestic Product (GDP) estimates.
    • The core sector is also known as Infrastructure output as they represent the basic industries that form the base of the economy.

    Do you know about the Strategic Sectors?

    The government has identified four strategic sectors where the presence of state-run companies will be reduced to a minimum.

    1. Atomic energy, space and defence
    2. Transport and telecommunications
    3. Power, petroleum, coal and other minerals and
    4. Banking, insurance and financial services

     

    Try this PYQ:

    Q.In the ‘Index of Eight Core Industries’, which one of the following is given the highest weight?

    (a) Coal production

    (b) Electricity generation

    (c) Fertilizer production

    (d) Steel production

     

    Post your answers here.

     

    UPSC 2022 countdown has begun! Get your personal guidance plan now! (Click here)

    Get an IAS/IPS ranker as your 1: 1 personal mentor for UPSC 2024

    Attend Now

  • Economic Indicators and Various Reports On It- GDP, FD, EODB, WIR etc

    What is Household Consumption Expenditure Survey (HCES)?

    DOMR | Economics | Mains Paper 3: Indian Economy

    Note4Students

    From UPSC perspective, the following things are important:

    Prelims level: HCES

    Mains level: Not Much

    The Centre has kicked off the process for conducting the quinquennial Household Consumption Expenditure Survey (HCES) this month.

    What is the Household Consumer Expenditure Survey (CES)?

    • The HCES is traditionally a quinquennial (recurring every five years) survey conducted by the government’s National Sample Survey Office (NSSO).
    • It is designed to collect information on the consumer spending patterns of households across the country, both urban and rural.
    • Typically, the Survey is conducted between July and June and this year’s exercise is expected to be completed by June 2023.

    Why HCES?

    • The HCES is used to arrive at estimates of poverty levels as well as review key economic indicators like Gross Domestic Product (GDP).
    • The results of the survey are also utilised for updating the consumption basket and for base revision of the Consumer Price Index.
    • It helps generate estimates of household Monthly Per Capita Consumer Expenditure (MPCE) as well as the distribution of households and persons over the MPCE classes.
    • It is used to arrive at estimates of poverty levels in different parts of the country and to review economic indicators such as the GDP, since 2011-12.

    Why need this survey?

    • India has not had any official estimates on per capita household spending.
    • It provides separate data sets for rural and urban parts, and also splice spending patterns for each State and Union Territory, as well as different socio-economic groups.

    What about the previous survey?

    • The survey was last held in 2017-2018.
    • The government announced that it had data quality issues.
    • Hence the results were not released.

     

    UPSC 2023 countdown has begun! Get your personal guidance plan now! (Click here)

    Get an IAS/IPS ranker as your 1: 1 personal mentor for UPSC 2024

    Attend Now