Question

Q. Consider the following statements about IIP(Index of Industrial Production):

Select the correct answer using the code given below:

• A. 1 only
• B. 2 only
• C. Both 1 and 2
• D. Neither 1 nor 2

Answer 1

The correct option is B 2 only

Explanation:

• Statement 1 is incorrect. 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.
• Statement 2 is correct. It is also used for estimating the Gross Value Added to the manufacturing sector quarterly.
• Note: GVA can be defined as output produced after deducting the intermediate value of consumption. This can also be mentioned as :

GVA= Gross Domestic Product + Subsidies on products – Taxes on products.