Indian Economy Current Affairs Archives

BHAVYA Rasayan Scheme 2026: Important Chemical Parks Approval

Why in News?

The BHAVYA Rasayan scheme has been approved by the Union Cabinet — the Bharat Audyogik Vikas Yojana Rasayan (BHAVYA Rasayan) scheme worth ₹3,030 crore to set up three dedicated chemical parks across the country, aimed at strengthening India’s chemical manufacturing ecosystem.

Key Facts for Prelims: BHAVYA Rasayan Scheme

Full form: Bharat Audyogik Vikas Yojana Rasayan
Total outlay of the BHAVYA Rasayan scheme: ₹3,030 crore — ₹3,000 crore for common infrastructure/utilities and ₹30 crore for administrative expenses
Number of parks: Three dedicated chemical parks
Implementation period: Five years, from FY 2026-27 to FY 2030-31
Centre’s contribution: Up to ₹1,000 crore per park as financial assistance
State’s contribution: Minimum ₹500 crore per park
Land requirement: At least 2,000 acres (8 sq. km.) of contiguous, encumbrance-free land per park
Selection process: Challenge-based selection of state governments to develop the parks
Common infrastructure: Includes Common Effluent Treatment Plants and hazardous waste management facilities

Static Exam Link: Chemical Sector & Industrial Parks

The BHAVYA Rasayan scheme is similar in design to earlier industrial-park models such as PCPIR (Petroleum, Chemicals and Petrochemicals Investment Region) policy, which also promotes clustered chemical/petrochemical investment
Common Effluent Treatment Plants (CETPs) are a standard requirement in chemical clusters to manage hazardous industrial waste and meet environmental norms
The chemicals and petrochemicals sector is treated as a priority manufacturing sector under India’s broader industrial and Atmanirbhar Bharat push, alongside sectors like electronics and pharmaceuticals
Centre-state cost-sharing models (grant plus mandatory state share) are a common structure used across recent central sector/centrally sponsored infrastructure schemes

Quick Revision Table: BHAVYA Rasayan Scheme

Parameter	Detail
Full Form	Bharat Audyogik Vikas Yojana Rasayan
Total Outlay	₹3,030 crore
Number of Parks	Three
Implementation Period	FY 2026-27 to FY 2030-31 (5 years)
Centre’s Grant per Park	Up to ₹1,000 crore
Minimum State Contribution	₹500 crore per park
Minimum Land per Park	2,000 acres (8 sq. km.)
Selection Method	Challenge-based process

Trap / Confusing Points

Confusion	Correct Fact
The BHAVYA Rasayan scheme is 100% Centre-funded	States must contribute a minimum ₹500 crore per park; it is a shared-funding model
₹3,030 crore is the Centre’s grant for one park	₹3,030 crore is the total scheme outlay for all three parks plus admin cost
Land requirement is exactly 2,000 acres	2,000 acres (8 sq. km.) is the minimum requirement, not a fixed figure
States are selected on a first-come-first-served basis	States are selected through a challenge-based (competitive) process
BHAVYA Rasayan funds are disbursed as loans	The Centre’s support is a grant, not a loan

Practice MCQs

1. BHAVYA Rasayan stands for:

a. Bharat Audyogik Vikas Yojana Rasayan
b. Bharat Advanced Yojana for Rasayan
c. Bharat Aushadhi Vikas Yojana
d. Basic Hazardous Value Yojana

Ans: A
BHAVYA Rasayan stands for Bharat Audyogik Vikas Yojana Rasayan.

2. How many dedicated chemical parks will be set up under the BHAVYA Rasayan scheme?

a. Two
b. Three
c. Four
d. Five

Ans: B
The BHAVYA Rasayan scheme provides for setting up three dedicated chemical parks across the country.

3. What is the minimum contribution required from a state government per chemical park under the BHAVYA Rasayan scheme?

a. ₹1,000 crore
b. ₹500 crore
c. ₹3,030 crore
d. No contribution required

Ans: B
States must contribute a minimum of ₹500 crore per park, in addition to the Centre’s grant of up to ₹1,000 crore.

4. The BHAVYA Rasayan scheme will be implemented over which period?

a. FY 2025-26 to FY 2029-30
b. FY 2026-27 to FY 2030-31
c. FY 2027-28 to FY 2031-32
d. FY 2024-25 to FY 2028-29

Ans: B
The scheme is to be implemented over five years, from FY 2026-27 to FY 2030-31.

5. Under the BHAVYA Rasayan scheme, states will be selected to develop chemical parks through:

a. Direct nomination by the Centre
b. A challenge-based selection process
c. Random lottery
d. Seniority of application

Ans: B
The chemical parks will be developed by state governments chosen through a challenge-based (competitive) selection process.

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AAY Ration Entitlement 2026: Important NFSA Amendment

Why in News?

AAY ration entitlement rules are set for a major change: the government is considering a shift in the Antyodaya Anna Yojana (AAY) foodgrain entitlement — from a fixed 35 kg per household per month to 7 kg per person per month, capped at 35 kg — through the draft National Food Security (Amendment) Bill. The change would benefit larger poor families who currently get a lower per-capita share.

Key Facts for Prelims: AAY Ration Entitlement, NFSA & Priority Households

National Food Security Act (NFSA), 2013: Marks a shift from a welfare-based to a rights-based approach to food and nutritional security
Coverage under NFSA: Up to 75% of the rural population and 50% of the urban population (around 67% of India’s total population)
Current AAY ration entitlement: Poorest-of-the-poor households get a flat 35 kg of foodgrain per family per month, regardless of family size
Priority Households (PHH): Get 5 kg of foodgrain per person per month
Proposed AAY ration entitlement: 7 kg per person per month, subject to a 35 kg per household cap
Why the change: The flat household quota gives smaller AAY families a higher per-head share and larger families a lower one — sometimes even less than what Priority Households get

Static Exam Link: Food Security & PDS Architecture

Antyodaya Anna Yojana was launched to identify and support the poorest of the poor among BPL families, ahead of being folded into the NFSA framework
NFSA operates through the Targeted Public Distribution System (TPDS), administered jointly by the Centre and states
Under NFSA, foodgrains are provided at subsidised issue prices, and states bear implementation responsibility including identification of eligible households
The One Nation, One Ration Card (ONORC) scheme allows portability of NFSA benefits across states and is a related reform under the same food security architecture

Quick Revision Table: AAY Ration Entitlement vs Priority Households

Parameter	Current Rule	Proposed Rule
AAY Entitlement	35 kg per household (flat)	7 kg per person, capped at 35 kg
Priority Households (PHH)	5 kg per person	No change proposed
Basis of NFSA	Rights-based approach (replacing welfare-based approach)
NFSA Coverage	75% rural + 50% urban (~67% overall)

Trap / Confusing Points

Confusion	Correct Fact
AAY entitlement is currently per person	Currently it is a flat 35 kg per household, irrespective of size; the per-person model is only proposed
Priority Households get more than AAY households	AAY households (7 kg/person proposed) remain the more heavily subsidised category compared to PHH (5 kg/person)
NFSA covers the entire population	NFSA covers only about 67% of the population (75% rural, 50% urban)
NFSA is a welfare scheme	NFSA is built on a rights-based approach, replacing the earlier welfare-based model

Practice MCQs

1. Under the current National Food Security Act rules, an Antyodaya Anna Yojana (AAY) household is entitled to:

a. 5 kg of foodgrain per person per month
b. 7 kg of foodgrain per person per month
c. 35 kg of foodgrain per household per month
d. 25 kg of foodgrain per household per month

Ans: C
Currently, AAY households get a flat 35 kg of foodgrain per family per month, regardless of household size.

2. Priority Households under the NFSA are entitled to:

a. 5 kg per person per month
b. 7 kg per person per month
c. 35 kg per household per month
d. 10 kg per person per month

Ans: A
Priority Households (PHH) receive 5 kg of foodgrain per person per month under NFSA.

3. The National Food Security Act, 2013 is best described as marking a shift towards a:

a. Welfare-based approach
b. Rights-based approach
c. Market-based approach
d. Charity-based approach

Ans: B
The NFSA, 2013 marks a paradigm shift from a welfare-based to a rights-based approach to food security.

4. As per NFSA coverage norms, what share of the rural and urban population is covered respectively?

a. 50% rural, 75% urban
b. 75% rural, 50% urban
c. 60% rural, 40% urban
d. 100% rural, 75% urban

Ans: B
NFSA covers up to 75% of the rural population and 50% of the urban population, roughly 67% of India’s total population.

5. The proposed change to the AAY ration entitlement under the draft NFSA amendment is:

a. Removing AAY category altogether
b. A flat 50 kg per household
c. 7 kg per person per month, capped at 35 kg per household
d. Merging AAY with Priority Households at 5 kg per person

Ans: C
The draft amendment proposes revising the AAY ration entitlement to 7 kg of foodgrain per person per month, capped at 35 kg per household.

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Index of Services Production (ISP)

Leave a Comment / Daily Current Affairs, Indian Economy Current Affairs / PSC Chronicles Team

Why in News?

The Ministry of Statistics and Programme Implementation (MoSPI) released trial data for the Index of Services Production (ISP), India’s first high-frequency macroeconomic indicator to measure the performance of the formal services sector. The trial ISP covers 19 sub-sectors, together accounting for nearly 60% of India’s total services output.

Key Facts for Prelims: Index of Services Production (ISP)

Released by: National Statistical Office (NSO), under MoSPI
Nature: Monthly, high-frequency macroeconomic indicator
Base Year: 2024-25
Coverage: 19 sub-sectors of the formal services sector, accounting for ~60% of total services output
Compilation Formula: Fixed-weight Laspeyres volume index
Weights: Based on sectoral contribution to Gross Value Added (GVA)
Highest-weight sub-sector: IT services (22.47%), followed by retail trade (16.4%)
Data Sources: Administrative data (air transport, railways, banking, insurance); GST outward-supply data (bulk of market services); ASISSE survey (health and education, to be added later)
Release Lag: ~60 days, on the 29th of every month
TAC-ISP Chair: Ms. Debjani Ghosh, Distinguished Fellow, NITI Aayog

Static Exam Link: ISP vs Index of Industrial Production (IIP)

The Index of Industrial Production (IIP) measures short-term output only of the industrial sector (mining, manufacturing, electricity) and has no counterpart for services. Since the services sector contributes over 50% of India’s Gross Value Added (about 52.9% in 2024-25) and nearly 30% of employment, the absence of a similar short-term services indicator was a long-standing statistical gap. The ISP fills this gap and complements the IIP for full-economy monitoring.

ISP excludes: Public administration and defence, non-market financial services, personal services, government-run health/education, and gambling activities
ISP is formal-sector only: It draws on GST outward-supply data, so informal/unregistered services are not captured
Deflators used: WPI for wholesale trade; sector-specific CPI where available; general CPI for banking, insurance and other services
Quantity-based sub-sectors: Only Air Transport and Railways (measured in physical units, e.g., passenger-km); all others are value-based

Quick Revision Table: Index of Services Production

Parameter	Detail
Released By	NSO, MoSPI
Base Year	2024-25
Sub-sectors Covered	19 (nearly 60% of services output)
Compilation Method	Fixed-weight Laspeyres volume index
Counterpart Index	IIP (Index of Industrial Production)
Highest Weight Sub-sector	IT services (22.47%)
TAC-ISP Chairperson	Debjani Ghosh, NITI Aayog
Data Sources	Administrative data, GST, ASISSE

Trap / Confusing Points

Confusion	Correct Fact
ISP covers the entire services sector	ISP covers only 19 sub-sectors (~60%) of the formal services sector; informal and several non-market activities are excluded
ISP and IIP are compiled the same way	IIP uses physical production quantities; ISP is mostly value-based (GST/turnover), deflated to real output, except Air Transport and Railways which are quantity-based
Health and education are covered in ISP now	These two sub-sectors will be added later, based on ASISSE survey results, not GST data
Retail trade has the highest weight in ISP	IT services (22.47%) has the highest weight, ahead of retail trade (16.4%)

Practice MCQs

1. The Index of Services Production (ISP) has been launched by which organisation?

a. RBI
b. NITI Aayog
c. National Statistical Office (NSO), MoSPI
d. Department of Economic Affairs

Ans: C
The ISP is compiled and released by the National Statistical Office under the Ministry of Statistics and Programme Implementation.

2. What is the base year of the Index of Services Production?

a. 2011-12
b. 2022-23
c. 2023-24
d. 2024-25

Ans: D
The ISP uses 2024-25 as its base year, aligned with the base year of the revised CPI series.

3. The Index of Services Production is best described as a short-term counterpart of which index?

a. Consumer Price Index (CPI)
b. Index of Industrial Production (IIP)
c. Wholesale Price Index (WPI)
d. Human Development Index (HDI)

Ans: B
ISP complements the IIP, which measures only industrial output, by tracking short-term services sector performance.

4. Which sub-sector carries the highest weight in the trial Index of Services Production?

a. Retail trade
b. Accommodation and food services
c. IT services
d. Real estate

Ans: C
IT services has the highest weight at 22.47%, ahead of retail trade at 16.4%.

5. Which formula is used to compile the Index of Services Production?

a. Paasche price index
b. Fisher’s ideal index
c. Fixed-weight Laspeyres volume index
d. Chain-weighted index

Ans: C
ISP is compiled as a fixed-weight Laspeyres volume index, with weights based on sectoral GVA contribution.

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AITIGA: India Hosts 13th ASEAN-India Joint Committee Meeting

Leave a Comment / Daily Current Affairs, Indian Economy Current Affairs, International Current Affairs / PSC Chronicles Team

AITIGA Joint Committee meeting hosted by India — AITIGA review talks aim to make the pact more business friendly

Why in News?

India hosted the 13th ASEAN-India Trade in Goods Agreement (AITIGA) Joint Committee meeting to advance the review of the ASEAN-India trade pact.

Key Facts for Prelims: AITIGA

Full form: ASEAN-India Trade in Goods Agreement
Meeting: 13th Joint Committee, hosted by India
Purpose of the review: Make the agreement more business-friendly through simpler trade procedures, better market access and stronger supply-chain resilience
ASEAN’s share: Around 11% of India’s global trade
Bilateral trade (2025-26): USD 128 billion
Sub-committees: Eight under the Joint Committee, including Rules of Origin, Customs Procedures and Trade Facilitation, and National Treatment and Market Access

Key Facts for Prelims: ASEAN

Full form: Association of Southeast Asian Nations
Established: 8 August 1967 at Bangkok, through the Bangkok Declaration
Motto: One Vision, One Identity, One Community
Secretariat: Jakarta, Indonesia
Founding members (5): Indonesia, Malaysia, Philippines, Singapore, Thailand
Later members: Brunei, Vietnam, Laos, Myanmar, Cambodia and Timor-Leste, the newest
India is NOT a member of ASEAN — it is a dialogue partner

Static Exam Link: India-ASEAN Engagement

The Look East Policy (1991) was upgraded to the Act East Policy (2014), with ASEAN at its core
India is a Strategic Partner and summit-level dialogue partner; the East Asia Summit and ASEAN Regional Forum are ASEAN-led platforms India participates in
AITIGA entered into force in 2010 as part of the ASEAN-India Free Trade Area; separate services and investment agreements followed
India is not an RCEP member — it walked out in 2019 over concerns about trade deficits and import surges
Rules of Origin prevent third countries from routing goods through member states to claim tariff concessions

Quick Revision Table: ASEAN and AITIGA

Parameter	Detail
ASEAN Founded	1967, Bangkok Declaration
ASEAN Secretariat	Jakarta, Indonesia
ASEAN Motto	One Vision, One Identity, One Community
Founding Members	Indonesia, Malaysia, Philippines, Singapore, Thailand
Newest Member	Timor-Leste
India’s Status	Dialogue partner, not a member
ASEAN Share in India’s Trade	About 11%
India-ASEAN Trade (2025-26)	USD 128 billion
Sub-committees	Eight

Trap / Confusing Points

Confusion	Correct Fact
India is a member of ASEAN	India is a dialogue partner, not a member
The ASEAN Secretariat is in Bangkok	ASEAN was founded in Bangkok, but the Secretariat is in Jakarta
Timor-Leste is a founding member	It is the newest member
AITIGA covers goods, services and investment	AITIGA covers trade in goods only
India is part of RCEP because of AITIGA	India is not an RCEP member; AITIGA is a separate ASEAN-India arrangement

Practice MCQs

1. AITIGA stands for:

a. ASEAN-India Trade in Goods Agreement
b. Asia-India Trade and Investment General Agreement
c. ASEAN-Indo Pacific Trade in Goods Arrangement
d. ASEAN-India Technical and Investment Growth Accord

Ans: A
AITIGA is the ASEAN-India Trade in Goods Agreement, currently under review.

2. The Secretariat of ASEAN is located at:

a. Bangkok
b. Jakarta
c. Manila
d. Singapore

Ans: B
ASEAN was founded in Bangkok but its Secretariat is at Jakarta.

3. Which of the following is NOT a founding member of ASEAN?

a. Indonesia
b. Philippines
c. Brunei
d. Thailand

Ans: C
Brunei joined after the five founding members.

4. Consider the following statements:
1. India is a member of ASEAN.
2. ASEAN accounts for around 11% of India’s global trade.
Which of the above is or are correct?

a. 1 only
b. 2 only
c. Both 1 and 2
d. Neither 1 nor 2

Ans: B
India is a dialogue partner, not a member, but ASEAN does account for roughly 11% of India’s global trade.

5. The newest member of ASEAN is:

a. Cambodia
b. Myanmar
c. Timor-Leste
d. Laos

Ans: C
Timor-Leste is the most recent country to join ASEAN.

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Investment Friendliness Index 2026: Gujarat Tops NITI Aayog List

Leave a Comment / Daily Current Affairs, Indian Economy Current Affairs / PSC Chronicles Team

Investment Friendliness Index 2026 released by NITI Aayog — Gujarat topped the first Investment Friendliness Index

Why in News?

Gujarat has topped NITI Aayog‘s first-ever Investment Friendliness Index (IFI) 2026, followed by Maharashtra and Tamil Nadu.

Key Facts for Prelims: Investment Friendliness Index

Released by: NITI Aayog — first edition
Coverage: All 28 States and 8 Union Territories
Purpose: Assesses the ability of states to attract and sustain investment, rather than being a mere ranking exercise
Top three: Gujarat, Maharashtra, Tamil Nadu
Number of pillars: Eight, with differing weightages

Eight Pillars and Weightages

Pillar	Weightage
Infrastructure	25%
Business Climate	20%
Resources	15%
Regulatory Ease	12%
Government Policy	10%
Financial Health	7%
Institutional Environment	6%
Environmental Resilience	5%

Four Categories of States

Top Performers: Five states
Frontrunners: 15 states, including Delhi, Uttar Pradesh, Andhra Pradesh
Emerging Performers: Eight states and UTs, including Punjab, West Bengal, Bihar, Jammu and Kashmir
Aspiring States: Eight, including Mizoram, Arunachal Pradesh, Manipur

Static Exam Link: NITI Aayog and Other Indices

NITI Aayog: Established 1 January 2015, replacing the Planning Commission. Created by an executive resolution — neither constitutional nor statutory
Chairperson: Prime Minister, with a Vice-Chairperson and a CEO
Other NITI Aayog indices: SDG India Index, Composite Water Management Index, India Innovation Index, Health Index, Export Preparedness Index, Fiscal Health Index, National Multidimensional Poverty Index
Distinguish: The Business Reform Action Plan (BRAP) state ranking is by DPIIT; the country-level Ease of Doing Business ranking was by the World Bank (discontinued in 2021)

Why the Investment Friendliness Index Matters

The Investment Friendliness Index is best understood as a competitive federalism instrument. Since land, electricity, labour administration and local clearances are largely state subjects or concurrent matters, the real determinants of where a factory is built lie with state governments rather than the Union. Publishing a comparative index creates reputational pressure on states to fix the specific bottlenecks that investors report.

The choice of pillars is itself instructive. Giving infrastructure the highest weight reflects evidence that reliable power, road and port connectivity and ready industrial land matter more to investors than headline incentives. Including environmental resilience, even at a small weight, acknowledges that climate risk now affects the viability of industrial locations. Financial health captures whether a state has the fiscal room to honour the commitments it makes.

Aspirants should be careful to distinguish this index from similar-sounding exercises. The Business Reform Action Plan ranking is a DPIIT exercise focused on implementation of specific reform measures. The World Bank’s Ease of Doing Business ranking was a country-level exercise, discontinued in 2021. NITI Aayog’s own family of indices, covering SDGs, water, innovation, health, exports and fiscal health, follows the same design philosophy of ranking states to spur reform.

Quick Revision Table: Investment Friendliness Index

Parameter	Detail
Released By	NITI Aayog (first edition)
Coverage	28 States and 8 UTs
Number of Pillars	Eight
Highest-weight Pillar	Infrastructure (25%)
Lowest-weight Pillar	Environmental Resilience (5%)
Rank 1	Gujarat
Rank 2 and 3	Maharashtra, Tamil Nadu
Categories	Top Performers, Frontrunners, Emerging Performers, Aspiring States

Trap / Confusing Points

Confusion	Correct Fact
The Investment Friendliness Index is released by DPIIT	It is a NITI Aayog report; DPIIT releases the BRAP state rankings
Business climate carries the highest weight	Infrastructure (25%) is highest; business climate is second at 20%
Only major states were assessed	All 28 states and 8 UTs were assessed
Andhra Pradesh and Delhi are top performers	They are Frontrunners; only five states are Top Performers
NITI Aayog is a constitutional body	It was created by an executive resolution in 2015

Practice MCQs

1. The Investment Friendliness Index has been released by:

a. DPIIT
b. NITI Aayog
c. Ministry of Finance
d. Reserve Bank of India

Ans: B
It is NITI Aayog’s first-ever index of state-level investment readiness.

2. Which state topped the index?

a. Maharashtra
b. Tamil Nadu
c. Gujarat
d. Karnataka

Ans: C
Gujarat ranked first, followed by Maharashtra and Tamil Nadu.

3. Which pillar carries the highest weightage?

a. Business climate
b. Regulatory ease
c. Infrastructure
d. Government policy

Ans: C
Infrastructure carries 25%, the highest of the eight pillars.

4. States and UTs are classified into how many categories?

a. Three
b. Four
c. Five
d. Six

Ans: B
Top performers, frontrunners, emerging performers and aspiring states.

5. Consider the following statements about NITI Aayog:
1. It is a constitutional body.
2. It replaced the Planning Commission in 2015.
Which of the above is or are correct?

a. 1 only
b. 2 only
c. Both 1 and 2
d. Neither 1 nor 2

Ans: B
NITI Aayog was set up by an executive resolution on 1 January 2015 and is not a constitutional or statutory body.

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Index of Core Industries: New Base Year 2022-23 for UPSC

Leave a Comment / Daily Current Affairs, Indian Economy Current Affairs / PSC Chronicles Team

Index of Core Industries revised base year 2022-23 — The Index of Core Industries now covers nine sectors

Why in News?

The Office of the Economic Adviser (OEA) under the Department for Promotion of Industry and Internal Trade (DPIIT) released the revised Index of Core Industries series with 2022-23 as the new base year, replacing the 2011-12 series. Core industries output grew 5% in June 2026 under the new series.

Key Facts for Prelims: Index of Core Industries

Compiled and released by: Office of the Economic Adviser (OEA), DPIIT, Ministry of Commerce and Industry
New Base Year: 2022-23 (earlier 2011-12)
Number of sectors: Raised from eight to nine
New sector added: Iron Ore — added for its extensive use in industrial production
Nine core sectors: Coal, Crude Oil, Natural Gas, Refinery Products, Fertilisers, Steel, Cement, Electricity and Iron Ore
Highest weight: Electricity (~30.93%), followed by Refinery Products and Steel
Coal definition narrowed: Only Raw Coal retained; Coal Middlings and Washed Coal excluded to remove double counting
Steel data: Gross production data now used, replacing net production data of the 2011-12 series
Back series: Released for April 2023 to May 2026

Index of Core Industries and the Index of Industrial Production

The Index of Core Industries is a sub-set of the Index of Industrial Production (IIP). The eight core industries earlier carried a combined weight of about 40.27% in the IIP, which makes the Index of Core Industries an early indicator of industrial momentum, released ahead of the IIP.

IIP is compiled by: National Statistical Office (NSO), MoSPI — not by DPIIT
IIP base year: 2011-12; IIP has three broad sectors — Mining, Manufacturing, Electricity
Base year revision purpose: Capture structural changes in the economy, new products and improved data sources; a more recent base year makes growth rates more representative
Related indices: Index of Services Production (NSO), WPI (OEA, DPIIT), CPI (NSO)

Why the Index of Core Industries Revision Matters

A base year is simply the reference point against which current output is compared. As an economy changes, an old base year quietly distorts the picture: goods that were important in 2011-12 may matter less today, while newer products may not be captured at all. Revising the Index of Core Industries to 2022-23 realigns the index with the present structure of Indian industry and with the data systems now available, including GST-linked reporting.

The addition of iron ore is the substantive change. Iron ore sits at the very start of the industrial value chain, feeding steel, construction, machinery and automobiles. Tracking it separately gives policymakers an earlier signal of industrial turning points than steel output alone. At the same time, restricting coal to raw coal corrects a genuine measurement flaw, because washed coal and middlings are processed forms of the same tonnage and counting them again inflated the index.

For prelims, the safest preparation is to fix in memory the compiling agency, the base year, the number of sectors, the highest-weight sector and the relationship with the IIP. Examiners frequently pair this index with the Wholesale Price Index, which the same office compiles, and with the Index of Industrial Production and Index of Services Production, which the National Statistical Office compiles.

Quick Revision Table: Index of Core Industries

Parameter	Detail
Released By	Office of the Economic Adviser, DPIIT
New Base Year	2022-23
Previous Base Year	2011-12
Number of Sectors	Nine (earlier eight)
Newly Added Sector	Iron Ore
Highest Weight Sector	Electricity (~30.93%)
Coal Coverage	Raw Coal only
Steel Data Basis	Gross production
Parent Index	Index of Industrial Production (IIP)

Trap / Confusing Points

Confusion	Correct Fact
It is released by MoSPI/NSO	The Index of Core Industries is released by the Office of the Economic Adviser, DPIIT. The IIP is released by NSO, MoSPI
Steel has the highest weight	Electricity (~30.93%) has the highest weight; Refinery Products and Steel follow
Iron and Steel are one sector, so nothing changed	Iron Ore is a separate, newly added ninth core sector, distinct from Steel
Washed coal and middlings are counted	Only Raw Coal is counted now, to avoid double counting
ICI and IIP have the same base year	ICI has shifted to 2022-23; the IIP series continues on 2011-12

Practice MCQs

1. The Index of Core Industries is compiled and released by which of the following?

a. National Statistical Office, MoSPI
b. Office of the Economic Adviser, DPIIT
c. Reserve Bank of India
d. NITI Aayog

Ans: B
The Office of the Economic Adviser under DPIIT compiles it, as well as the Wholesale Price Index.

2. Which sector was newly added to the revised index, taking the count to nine?

a. Iron Ore
b. Aluminium
c. Copper
d. Automobiles

Ans: A
Iron Ore was added in view of its extensive use in industrial production.

3. What is the base year of the revised series?

a. 2011-12
b. 2017-18
c. 2022-23
d. 2024-25

Ans: C
The base year was shifted from 2011-12 to 2022-23 to reflect the current structure of the economy.

4. Which sector carries the largest weight in the revised index?

a. Steel
b. Coal
c. Refinery Products
d. Electricity

Ans: D
Electricity has the highest weight at roughly 30.93%.

5. In the revised series, coal has been restricted to raw coal. The main reason is:

a. To reduce import dependence
b. To avoid double counting
c. To exclude captive mines
d. To align with global coal classification

Ans: B
Coal middlings and washed coal are derived from raw coal, so counting them would double count the same output.

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Index of Services Production (ISP): 5 Critical UPSC Facts

Leave a Comment / Daily Current Affairs, Indian Economy Current Affairs / PSC Chronicles Team

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Key Facts for Prelims: Index of Services Production (ISP)

Released by: National Statistical Office (NSO), under MoSPI
Nature: Monthly, high-frequency macroeconomic indicator
Base Year: 2024-25
Coverage: 19 sub-sectors of the formal services sector, accounting for ~60% of total services output
Compilation Formula: Fixed-weight Laspeyres volume index
Weights: Based on sectoral contribution to Gross Value Added (GVA)
Highest-weight sub-sector: IT services (22.47%), followed by retail trade (16.4%)
Data Sources: Administrative data (air transport, railways, banking, insurance); GST outward-supply data (bulk of market services); ASISSE survey (health and education, to be added later)
Release Lag: ~60 days, on the 29th of every month
TAC-ISP Chair: Ms. Debjani Ghosh, Distinguished Fellow, NITI Aayog

Static Exam Link: ISP vs Index of Industrial Production (IIP)

ISP excludes: Public administration and defence, non-market financial services, personal services, government-run health/education, and gambling activities
ISP is formal-sector only: It draws on GST outward-supply data, so informal/unregistered services are not captured
Deflators used: WPI for wholesale trade; sector-specific CPI where available; general CPI for banking, insurance and other services
Quantity-based sub-sectors: Only Air Transport and Railways (measured in physical units, e.g., passenger-km); all others are value-based

Quick Revision Table: Index of Services Production

Parameter	Detail
Released By	NSO, MoSPI
Base Year	2024-25
Sub-sectors Covered	19 (nearly 60% of services output)
Compilation Method	Fixed-weight Laspeyres volume index
Counterpart Index	IIP (Index of Industrial Production)
Highest Weight Sub-sector	IT services (22.47%)
TAC-ISP Chairperson	Debjani Ghosh, NITI Aayog
Data Sources	Administrative data, GST, ASISSE

Trap / Confusing Points

Confusion	Correct Fact
ISP covers the entire services sector	ISP covers only 19 sub-sectors (~60%) of the formal services sector; informal and several non-market activities are excluded
ISP and IIP are compiled the same way	IIP uses physical production quantities; ISP is mostly value-based (GST/turnover), deflated to real output, except Air Transport and Railways which are quantity-based
Health and education are covered in ISP now	These two sub-sectors will be added later, based on ASISSE survey results, not GST data
Retail trade has the highest weight in ISP	IT services (22.47%) has the highest weight, ahead of retail trade (16.4%)