Topic: Indian Economy and issues relating to planning, mobilization, of resources, growth, development and employment.
4. What is Index of Industrial Production (IIP)? How is it calculated? Is it losing its relevance as measures of economic growth? Analyse. (250 words)
Difficulty level: Tough
Reference: Live Mint
Why the question:
An issue with the current Index of Industrial Production series is that it doesn’t account for improvements in capacity or technological changes.
Key Demand of the question:
To bring out the evolution of cryptocurrencies and the need for a regulation of the same.
Directive word:
Analyse – When asked to analyse, you must examine methodically the structure or nature of the topic by separating it into component parts and present them in a summary.
Structure of the answer:
Introduction:
Begin by defining IIP.
Body:
First, write about the mechanism of calculation of IIP – process involving the selection of representative items, data collection, and the application of a weighted formula.
Next, write about its shortcomings – include limited coverage, changing industrial structures, data quality issues, globalization impacts, and the emergence of new sectors.
Conclusion:
Conclude by giving a way forward.
