Index: IIP vs WPI vs CPI
Survey: OBICUS vs ASI
Industrial Licensing
Industries reserved:
IEM
Boosting Industrial sector
Textile related
PMEGP
PSU: delegation
Misc facts
Measures to boost MSME sector
CHALLENGES & OUTLOOK
Mock Questions

Index: IIP vs WPI vs CPI

What is IIP, already discussed in earlier article click me.

	IIP	WPI	CPI
What?	Index of Industrial Production	Wholesale price index	Consumer price index
Who calculates?	Central Statistical Organization (CSO)	Economic advisor	Central Statistical Organization (CSO)
Under Which Ministry?	Statistics & Programme Implementation	Commerce	Statistics & Programme Implementation
Base year?	2004	2004	2010
Items?	682 items clubbed in 399 groups: 1 in Mining, 1 in Electricity and 397 in Manufacturing	676	200
Categories	Based on sector: mining, manufacturing electricity Based on use: basic goods capital goods intermediate goods consumer goods: i) durable (ii)non-durable	Primary articles Fuel, power, light, lubricants Manufactured products.	Entire urban population Entire rural population Urban + Rural (consolidate from above two)
Measures the increase/decrease in	Production	Price	Price

Survey: OBICUS vs ASI

What	OBICUS	ASI
Full form	Order Books, Inventories & Capacity Utilization Survey	Annual survey of industries
Who releases?	RBI	NSSO under Ministry of Statistics & Programme Implementation
Timeframe	Quarterly	Annually
Use?	Assessing the consumption and investment demand outlook.	organized manufacturing sector’s growth, composition, structure
Who is surveyed?	Approximately 2,500 public and private limited companies in the manufacturing sector.	Entire manufacturing sector employing 10 or more workers.

Industrial Licensing

As per the Industries Development Regulation Act 1951, you need to get license to operate in following industries

Distillation and brewing of alcoholic drinks.
Cigars and cigarettes of tobacco and manufactured tobacco substitutes;
Electronic Aerospace and defense equipment: all types;
Industrial explosives, including detonating fuses, safety fuses, gun powder, nitrocellulose and matches;
Hazardous chemicals;
1. Hydrocyanic acid and its derivatives
2. Phosgene and its derivatives
3. Isocyanates and di-isocyanates of hydrocarbon, not elsewhere specified (example: Methyl Isocyanate).

These five industries require industrial licensing because of security, strategic and environmental concerns.

Example of De-licensed industries are: cement, paint, photo goods, Paper industry, air conditioners, bicycle, food processing etc.
Although the entrepreneur does need to file an IEM (Industrial entrepreneur’s memorandum to the Secretariat for industrial assistance ->> Department of Industrial Policy and Promotion (DIPP)->>Ministry of Commerce and industries.

Let’s get some info about those Chemicals

Nitrocellulose	known as guncotton. Originally used in film reels but stopped due to explosive nature. Used in pregnancy tests
Hydrocyanic acid	HCN Also known as prussic acid. used in gas chambers for judicial execution in some U.S. states.
Phosgene	COCl₂ as a chemical (gas) weapon in WW1. Also used for making plastics and pesticides. Phosgene –> Methyl Isocyanate (MIC) –>pesticides.
Methyl Isocyanate (MIC)	CH₃NCO Union Carbide ltd. Bhopal plant. They used Methyl Isocyanate (MIC) is used for making pesticides. (Brand name Sevin) This gas was the cause for Bhopal gas tragedy happened on 3rd Dec 1984.

Industries reserved:

For small scale sector	20
For public sector	Atomic energy Rail transport

IEM

Industrial entrepreneurs memoranda
Entrepreneurs have to fill these to Dept. of Department of Industrial Policy and Promotion
1. Industrial undertakings that are exempted from obtaining an industrial license
2. For expanding existing industrial undertaking.
IEM Provides info. On

likely investment flows to industry.
Sectoral preferences of investors,
perception of entrepreneurs.

Boosting Industrial sector

Govt has done following things

DMIC
FDI relaxation
NMP 2011
e-Biz Project

DMIC and FDI relaxation already discussed in earlier articles, hence skipping here. Let’s check the remaining:

National Manufacturing Policy (NMP) 2011: Objectives

Increase share of manufacturing in GDP to 25% within a decade.
create additional 100 million jobs over
special focus to industries that are employment intensive
give vocational skill/training to rural youth
industrial growth in partnership of states
industrial regulation will be simplified and rationalized

National investment & manufacturing zones (NIMZs)

provided under National manufacturing policy 2011.
Out of twelve NIMZs so far announced, eight are along the DMIC.
Besides, four other NIMZs have been given in-principle approval

Nagpur in Maharashtra,
Tumkur in Karnataka,
Chittoor district AP
Medak district AP

Manufacturing industry promotion board (MIPB)

Provided under National manufacturing policy 2011.
Chairman = Commerce minister.

E-Biz Project	a mission mode project under the National e-Governance Plan (NeGP) provides online registration and filling payment services to investors and businessmen.
Invest India	a joint-venture company between the Department of Industrial Policy & Promotion & FICCI. Provides inputs on all aspects of doing business in India. Guides investors on all policy and regulatory issues. Handholding services to foreign investors.

Circular 1 of 2013

Since 1991, government had been revising the FDI limits via press notes. But later they consolidated all such press notes and other regulation into one document.
This document was released as “Circular 1 of 2010.”
Govt. updates it every six months.
Latest is Circular 1 of 2013. Effective from 1^st April 2013
The Department of Industrial Policy and Promotion (DIPP), Ministry of Commerce & Industry, makes policy pronouncements on FDI through Press Notes/ Press Releases
But these FDI limits come into effect only after RBI notifies them under FEMA Act 2000. (recall capital account convertibility topic under economic survey ch.6 BoP)

IPR initiatives

The Madrid Protocol

Administered by World Intellectual Property Organisation (WIPO)
provides for a system for international registration of trade marks.
Madrid protocol will help Indian companies register their trade-marks in all member countries under this protocol via single application in one language and one time fees in one currency.

Trademark Amendment Act 2010

Was passed to accede India to Madrid Protocol

I-Mark

I-Mark= Indian Design Mark
By Indian design council under Department of Industrial policy and promotion (DIPP) –> Ministry of Commerce and Industries.
I-Mark is the Indian equivalent of the Japanese G-Mark, the highest quality marking for industrial design in Japan.

Geographical indicators

Already covered in earlier article click me

JK and Hill Areas

Transport Subsidy Scheme	1971	For industrialization in hill, remote and inaccessible areas.Provides subsidy on transport cost for transporting raw material and finished products to and from the location.
Jammu and Kashmir	2002	100% exemption from income tax, central excise (expired in 2012)
Himachal, Uttarakhand	2003	Similar to above but scheme was valid till Jan 2013.
North East Industrial Development and promotion policy	2007	Incentives for new and old units: excise duty exemption, income tax exemption, insurance etc..

National Electric Mobility Mission Plan (NEMMP) 2020

approved by the National Council for Electric Mobility (NCEM)
for increasing the use of electric vehicle (including hybrid cars) in India. Because they’re energy efficient and environmentally friendly.
Government will provide R&D support, subsidies, tax reliefs to automobile industries involved in this segment.

National Council for Electric Mobility

Apex body for mattres related to electric and hybrid vehicles.
Chairman= Minister (Heavy Industries & Public Enterprises).
Members= Ministers from the key Central Ministries/Departments, eminent representatives from the industry and academia.

Textile related

TUFS

Technology upgradation fund scheme’ 1999
To provides financial support to textile industry (including powerlooms).
government provides interest subsidy to textile units if they take loans for implementing new technology.
Not region specific
Demand driven (just like MNREGA)

Technical Textiles

Technical textiles are used in aerospace, shipping, sports, agro, defence, medicine etc.
Scheme and for growth and Development of technical textiles (SGDTT)

Textile research association (TRA)	Under SGDTT, they are centre for excellence for
Bombay	Geotech
Syntehtic & art silk mills research association (SASMIRA)	Agrotech
South Indian textile research association (SITRA)	Meditech
North Indian textile research association (NITRA)	Protech

SITP

Scheme for integrated textile parks
Cost cover for common infrastructure (drainage,roads, water supply, telecom lines), buildings etc for textiles industry

Jute

Known as Golden fiber
States ranking (in terms of no. of Jute mills): 1) WB, 2) Andhra, 3) Bihar and UP

Jute Technology Mission

Under Agro ministry (and not under textile ministry)

Jute Geo textile (JGT)

Rural Development ministry will use it to construct about 1000 km of rural roads
Indian railways also uses it for track repair and new tracks.

Silk

India produces all 4 commercially known varieties of Silk

Mulberry
Tasar
Eri
Muga

In Budget 2013, Chindu raised the duty on raw silk from 5% to 15%.

Central silk board

Central Silk board is a Statutory body under textile ministry. (coir board is also a statutory).
For developing silk industry in India
For providing basic seed material
R&D, training of personnel, monitoring export, prices etc.

SMOI

Silk mark organization of India
Silk in India faces unfair competition from man-made substitute like viscose, polyester, nylon etc.

National textile corporation ltd

Central public sector undertaking under Textile ministry
Earlier, Government had nationalized certain sick textile mills.
National textile corp. looks after their affairs, revises the viable mills and shuts down the unviable ones.

Cotton

India is the only country to grow all 4 species of cultivated cotton viz

Asian (2 species)
Egyptian (1)
American Upland (1)

2002: Government released BT-cotton seeds for commercial cultivation. BT variety is resistant to cotton insects = farmers need to less insectides.
for foodgrains, Government operates Minimum support price (MSP) via FCI
But MSP of Cotton implemented via Cotton Corporation of India (CCI)

PMEGP

PM’s employment generation scheme
Launched in 2008 by merging
- PM’s Rojgar Yojana
- Rural Employment generation program
To general employment opportunities in both rural + urban areas
Any individual above 18 years age
No income ceiling for assistance.

PSU: delegation

1997	Navratna and Miniratna
2009	Maharatna

Under these schemes, the profit making central public sector enterprises are given extra powers and freedom.
Matter falls under Department of Public Enterprises
Feb 2013: Bharat Heavy Electricals Limited (BHEL) and Gas Authority of India Ltd.(GAIL) were given Maharatna Status.

Misc facts

Following are given directly / mentioned/ hinted in the industries chapter under India 2013 Yearbook, hence important for MCQs. (otherwise there is no end to stupid misc. facts).

India’s rank in production

Sponge Iron	1^st
Jute	1^st
Tractors	1^st
Silk	2^nd after China
Cement	2^nd after China
Cotton	2^nd after China. Note: Wool is the only natural fiber which India is deficient and has to import it to meet production demand.
Two wheeler	2^nd after China
Bicycle	2^nd After China. (Punjab and TN major producers within India.)
Salt	3^rd (China is 1^st, USA is 2^nd)
Nitrogenous fertilizers	3^rd (China is 1^st, USA is 2^nd)
Crude Steel	4^th
Foundry	5^th

For boilers, BHEL is the largest manufacturer in India
DDT: Hindustan Insecticides ltd is largest producer of DDT in wor. The only other producer is China.

Refrigerators: DC vs FF

Direct Cool (DC)	Frost Free (FF)
Cheaper, consumes less energy	More, although price gap is declining between DC and FF given the R&D advancements and competition among companies.
Direct cool refrigerators use natural convection, resulting in instant cooling capabilities, but that leads to frost build up. You’ve to manually defrost it.	do not require any deicing or defrosting through manual means. It is handled automatically.
Less	better at maintaining consistent temperatures, and keeping food items fresh for a longer period of time.
Rural areas=frequent power cuts. Hence villagers prefer direct cool refrigerators.	Preferred by urban junta.

BEE labelling

Bureau of energy efficiency under Ministry of Power
More details already given on: https://mrunal.org/2012/09/econ-bee.html

Batteries: Lead acid vs Dry cell

Lead Acid storage	Dry cell
UPS Vehicles (car batteries)	Mobiles Laptops Electronic toys
Gaston Planté (France)	Georges Leclanché (France)
All lead acid storage batteries are rechargeable.	Usually non-rechargeable- just use and throw. (although rechargeable varieties are also available)
Lead sulfate and Sulfuric acid	Zinc–carbon Alkaline (zinc and manganese dioxide) rechargeable Lithium-Ion (Li-Ion) Nickel/Cadmium (NiCd)

Alkaline batteries in India

In developed countries, alkaline batteries constitute 90% of primary battery market. While in India only 2%
while Alkaline is more efficient than Zinc Carbon, but also more expensive.
For example Duracell (pink bunny ad) is an alkaline battery. While it runs longer but expensive compared to the zinc carbon version of Nippon, everyready and other Chinamade cells.

Foundry clusters

Cluster	Famous for ___ Castings
Coimbatore, TN	Pumpsets
Kolhapur, Belgaum	Automobile
Rajkot	Diesel Engine
Batala, Jalandhar	Machinary parts and agro implements

Water treatment plant

Primary treatment	Remove pollutants that settles or floats
Secondary	Degrade the biological content of seweage Clarifiers, oil-water separator devices
Tertiary	Remove waste that was missed in primary and secondary treatment stage. Filtration, carbon absorption.

Water treatment processes

Biological	Biodegradation via bacteria, fungi, algaea and yeast: to breakdown organic matters.
Chemical	To remove organic/ inorganic matter that cannot be biodegraded. Done via Precipitation, oxidization, neutralization
Physical	Sedimentation, clarification

Air pollution control equipment

Classified into five types

Settling chambers
Ventury scrubber
Ionized scrubber
Electrostatic precipitator
Bag filters

Industrial Gears

Industrial Gears are used for two purposes

Rotation speed: increase / decrease
Power or torque: increase / decrease

They’re used in elevators, kilns, cranes etc.

Gearbox = metal casing in which a train of gears is sealed.

Switchgears

fuses or circuit breakers etc. to control and protect electrical equipment.

Measures to boost MSME sector

Public Procurement Policy for Goods= All the central ministries / departments / central public sector undertakings (CPSUs) shall procure a minimum of 20 per cent of their annual value of goods / services required by them from MSEs.
And out of that, 4 per cent procurement from MSEs owned by SC / ST entrepreneurs
Govt also provides guarantee cover for loans upto 100 lakh.
Capital Subsidy Scheme to help them upgrade their technology.
SIDBI set up the India Microfinance Equity Fund in 2011-12

CHALLENGES & OUTLOOK

Manufacturing

India is one of the top ten manufacturing countries though its share in total manufacturing value added (MVA) is only about 1.8 per cent. Due to
- low-level technology,
- higher input costs &
- poor quality infrastructure.
While India’s performance is good in labour-intensive sectors such as textiles, wearing apparel & leather products. But Even in these three sectors India’s share was low as compared to China.
Latest competitive industrial performance index (CIP) compiled by the United Nations Industrial Development Organization (UNIDO), ranks India 42nd out of 118 countries the same as in 2005. China is ranked 5th.

IIP problem

Last year, IIP has been either negative or very low growth because

Incoming Investment =decreased.
Corporate sector’s Profit margin= decreased (thanks to inflation)
Loan / credit = becoming expensive.
Global economy = not yet fully recovered.

Infra-bottlenecks

Low output of coal = low thermal power generation= electricity shortages.
rail, road, & ports projects= not finished in time bound manner.
therefore crucial to accelerate the output of core sectors & speed up implementation of crucial big ticket projects.

low level of R&D
inadequate availability of skilled manpower.
India has not improved significantly in terms of the ease of doing business & ranks very low in comparison to other industrial nations.
MSME sector = multiple approval & operational restrictions.
The process of setting up & exiting business is time consuming & complicated requiring expensive third party assistance.
Since states have the major role in administering MSME sector. There is need to create uniform rules, processes in all states.
The policy initiatives taken by the government in the recent months made the business sentiment buoyant & have generated some optimism. but there is room for lot of improvement.

Mock Questions

Central Statistical organization is responsible for compilation of
1. IIP
2. CPI
3. Both
4. None
Economic advisor under Commerce Ministry, is responsible for compilation of
1. IIP
2. WPI
3. Both
4. None
IIP and CPI fall under the ministry of
1. Commerce
2. Finance
3. MSME
4. Statistics and program implementation
In terms of no. of items, what is the correct sequence (smaller to bigger)?
1. IIP, WPI, CPI
2. CPI, IIP, WPI
3. WPI, CPI, IIP
4. None of above
IIP includes ___ items groups
1. 399
2. 676
3. 200
4. 500
CPI includes ___ items
1. 399
2. 676
3. 200
4. 500
WPI includes ___ items
1. 399
2. 676
3. 200
4. 500
Which of the following is not a category of IIP?
1. Mining
2. Manufacturing
3. Electricity
4. Primary articles
What is common between WPI and IIP
1. Both have same no. of items
2. both are compiled under same ministry
3. both have same base year
4. none of above
What is common between CPI and IIP
1. Both have same no. of items
2. both are compiled under same ministry
3. both have same base year
4. none of above
OBICUS is compiled by
1. Environment ministry
2. Finance Ministry
3. SEBI
4. RBI
Annual survey of Industries is compiled by Ministry of
1. Finance
2. Commerce
3. MSME
4. Statistics and program implementation
Correct Statement about Phosgene
1. One has to obtain Industrial license to produce Phosgene
2. It can be used as a chemical weapon
3. Both
4. None
Which of the following element is present in Phosgene?
1. Phosphorus
2. Potassium
3. Chlorine
4. Zinc
Industrial license is necessary for
1. Brewing Alcoholic drinks
2. Electronic aerospace equipment
3. Matches
4. all of above
What is common between Methyl Isocyanate and Phosgene?
1. Both are used in pesticide industry
2. both require industrial licensing
3. both are extremely poisonous gases
4. all of above
Phosgene is used for making
1. matchsticks
2. film reels
3. pesticides
4. perfumes
In India which of the following areas are reserved for Public sector only
1. Defense, Railways
2. Nuclear Energy, Railways, Defense
3. Defence, Nuclear Energy
4. Nuclear Energy, Railways
Correct statements about Industrial entrepreneurs memoranda (IEM)
1. The Entrepreneurs have to file these to MSME Ministry
2. Entrepreneurs donot need to file IEM for industries that require industrial license.
3. Both
4. None
By 2022, National Mfg. Policy 2011 aims to
1. create additional 300 million jobs
2. increase share of manufacturing sector in GDP to atleast 25%
3. Both
4. None
Who is the chairman of Manufacturing industry promotion board?
1. FM
2. PM
3. Minister of Commerce and industries
4. Minister of MSME
E-biz project was designed by
1. TCS
2. Infosys
3. WIPRO
4. Satyam
E-Biz project falls under the ministry of
1. MSME
2. Finance
3. Commerce
4. Heavy industries
Invest India is a joint venture between ___ and ___
1. ASSOCHAM and FICCI
2. Dept of economic affairs and FICCI
3. Dept of MSME and ASSOCHAM
4. Department of Industrial Policy & Promotion & FICCI
Which department is responsible for FDI policy announcements?
1. Dept of economic affairs
2. Department of Financial Services
3. Dept of Industrial Policy and Promotion
4. Department of Expenditure
Under FEMA Act, who is empowered to notify the FDI limits?
1. SEBI
2. Finance Ministry
3. Commerce Ministry
4. RBI
Madrid protocol is related to
1. bilateral trade disputes
2. climate change and biodiversity
3. Trademarks
4. Chemical weapons
Madrid Protocol falls under
1. WTO
2. UN
3. WIPO
4. ILO
Minister of ____ is the chairman of National Council for Electric Mobility.
1. Environment and forest
2. Commerce and industries
3. fiance
4. Heavy industries and public enterprises
Who directly benefits from Technology upgradation fund scheme?
1. Steel and Cement industry
2. Heavy industries
3. Textile sector
4. Automobile sector
NITRA and SITRA are associations related to
1. automobiles
2. agriculture
3. textile
4. none of above
Jute Geo Textiles can be used in contruction of
1. Railway tracks
2. Rural Roads
3. Both
4. None
I-mark is associated with
1. IT industries
2. infrastructure projects
3. Industrial designs
4. None of above
Correct Statements
1. India produces all 4 commercially known varieties of silk
2. India is the only country to grow all 5 species of cultivated cotton
3. both
4. none
which of the following cotton variety is grown in India?
1. Asian
2. Egyptian
3. American Upland
4. All of Above
Correct statements on PM’s employment generation scheme
1. applicable to only rural areas
2. administered by PMO
3. Both
4. none
Two CPSE that were added in the Maharatna category recently
1. MTNL and BHEL
2. BHEL and GAIL
3. NALCO and BHEL
4. None of above
China enjoys first position in the production of
1. Jute
2. Tractors
3. Sponge Iron
4. Cotton
BEE Labelling falls under the ministry of
1. Power
2. environment and forest
3. commerce
4. renewable energy
Which of the following battery is rechargable
1. Lead Acid
2. Li-Ion
3. NiCd
4. All of above
Alkaline batteries use
1. Zinc-Carbon
2. Zinc Manganese Dioxide
3. Lead sulfate and Sulfuric Acid
4. None of above
Ventury scrubber and eletrostatic precipitator are examples of ____ pollution control equipments
1. air
2. water
3. noise
4. soil
Industrial Gears are used for
1. controlling speed
2. controlling torque
3. both
4. none
India Microfinance Equity fund is administered by
1. NABARD
2. SIDBI
3. Ministry of MSME
4. Ministry of Rural Development
Competitive industrial performance index is prepared by
1. OECD
2. UNIDO
3. World Bank
4. UNTCAD

100 Comments

Arpit 01/04/2014 at 11:18 pm

TUFS is 1991 and not 1999.
Yearbook 2014 page number 517
correction please
RAJIV 18/04/2014 at 3:44 pm

Mrunal sir i cannot find IIP article….Also bottom to up articles of economy…….You made it topic wise in economy archives but i want old type bottom to top articles..give topic headings so that i can surf and read. Pls sir.