Economics • Indian EconomyEasy
What does the 'Index of Industrial Production (IIP)' measure in the Indian economy?
A. The growth rate of the agricultural sector across different states
B. The short-term changes in the volume of production in various industrial sectors of the economy✓ Correct Answer
C. The total inflow of foreign portfolio investments in manufacturing industries
D. The level of retail price inflation experienced by urban industrial workers
💡 Solution & Explanation
The Index of Industrial Production measures short-term changes in the volume of industrial output across sectors like manufacturing, mining, and electricity in India, compiled monthly by the National Statistical Office. Alternative choices incorrectly point toward agricultural statistics, retail price inflation, or foreign portfolio flows. An important allied indicator for UPSC aspirants is the Core Industries Index, which comprises eight core infrastructure sectors.
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