NEWS 1:India’s industrial output growth decelerates to 4% in August impacted by consumer durables slowdown and GST effects.
GS-3 economy
- India’s industrial output growth slowed to 4% in August from 4.3% in July.
- The Index of Industrial Production (IIP) growth in August was faster than the 0% recorded in August of the previous year.
- Mining activity grew by 6% in August, marking a 14-month high.
- The consumer non-durables sector contracted by 6.3%, its worst performance in eight months.
The Index of Industrial Production (IIP) is an important short-term indicator of the performance of India’s industrial sector. It measures the changes in the volume of production of a basket of industrial products over a given period of time, compared to a chosen base year.
- A composite indicator that tracks the growth rate of industrial production in the economy.
- Compiled and published monthly by the National Statistical Office (NSO), Ministry of Statistics and Programme Implementation (MoSPI).
- The base year currently used is 2011–12.
🔹 Components of IIP
The IIP is divided into two main classifications:
- Sectoral Classification (based on industries):
- Mining (14.4% weight)
- Manufacturing (77.6% weight)
- Electricity (8.0% weight)
- Use-Based Classification (based on end-use of goods):
- Primary goods
- Capital goods
- Intermediate goods
- Infrastructure/Construction goods
- Consumer durables
- Consumer non-durables
🔹 Weightage
- The weights are based on the value-added share of each sector in the industrial output, taken from the base year.
- Manufacturing carries the highest weight, making IIP highly sensitive to manufacturing sector performance.
🔹 Importance of IIP
- Policy tool: Helps government, RBI, and policymakers to assess industrial growth and adjust policies.
- Economic indicator: Used in calculating quarterly and annual GDP (industry sector).
- Business cycle tracker: Gives early signals of industrial slowdown or revival.
- Investor insights: Important for stock markets, industry analysis, and forecasting.
NEWS 2:Wassenaar Arrangement faces calls for reform to address cloud service export loopholes amid surveillance and human rights concerns.
GS-2 international relation
- The Wassenaar Arrangement, a multilateral export control regime, aims to prevent the proliferation of weapons of mass destruction by controlling the export of sensitive goods and technologies.
- The arrangement, conceived for physical exports, struggles to regulate cloud services and Software-as-a-Service (SaaS) models, leading to regulatory gaps.
- India joined the Wassenaar Arrangement in 2017, but the regime still needs to address technologies misused for surveillance and repression.
- Reforms are needed to expand the scope of controlled technologies, treat remote enablement as equivalent to export, and adopt binding obligations with mandatory minimum standards.
The Wassenaar Arrangement (WA) is an international export control regime that focuses on conventional arms and dual-use goods and technologies. Here’s a structured overview:
📌 Background
- Established: July 1996, in Wassenaar (a suburb of The Hague, Netherlands).
- Predecessor: Replaced the Cold War–era Coordinating Committee for Multilateral Export Controls (COCOM).
- Headquarters: Vienna, Austria.
- Members: 42 participating states (including USA, Russia, most EU members, Japan, India etc.).
📌 Objectives
- Promote transparency and greater responsibility in transfers of conventional arms and sensitive technologies.
- Prevent destabilizing accumulations of arms.
- Complement UN arms control measures by encouraging national policies on responsible exports.
- Prevent proliferation of dual-use technologies that could aid terrorism or regional instability.
NEWS 3:US tariffs threaten Indian marine exports especially shrimp impacting coastal economies; India seeks FTAs for market diversification.
GS-2 international relation
- The U.S. imposed higher tariffs on Indian goods, particularly affecting marine exports.
- A 50% duty implemented in August significantly impacts India’s shrimp exports, leading to an effective levy exceeding 58%.
- The Commerce Ministry informed the Public Accounts Committee (PAC) about the long-term impact of these tariffs.
- India is actively pursuing Free Trade Agreements with blocs like the European Free Trade Association (EFTA) and the U.K. to counter the impact.
the Public Accounts Committee (PAC):
- Established: 1921, under the provisions of the Government of India Act, 1919 (Montagu-Chelmsford Reforms).
- It is one of the three Financial Committees of Parliament (others: Estimates Committee, Committee on Public Undertakings).
📌 Composition
- Total Members: 22
- 15 from Lok Sabha
- 7 from Rajya Sabha
- Elected annually by proportional representation (single transferable vote system).
- Tenure: 1 year.
- Chairperson: Appointed by the Speaker of Lok Sabha; traditionally from the Opposition (since 1967).
📌 Functions
- Examines the Appropriation Accounts and Audit Reports of the CAG of India.
- Ensures public money is spent in accordance with Parliament’s decision.
- Scrutinises waste, extravagance, loss, or irregularities in government expenditure.
- Keeps a check on autonomous bodies and public undertakings (but limited scope compared to COPU).
- Reports its findings to Parliament, which are then discussed.
MAINS MOCK QUESTION
The Index of Industrial Production (IIP) is a critical indicator of India’s economic health, yet it faces several limitations. Discuss the significance of IIP in policymaking and economic analysis, and suggest measures to make it a more robust tool.
