National Income

Statement 1 is correct. The Ministry of Statistics and Programme Implementation has two wings, one relating to Statistics and the other Programme Implementation.
The Statistics Wing called the National Statistical Office (NSO) consists of the Central Statistical Office (CSO), the Computer center and the National Sample Survey Office (NSSO).
NSO, among other its functions, prepares national accounts as well as publishes annual estimates of national product, government and private consumption expenditure, capital formation, savings, estimates of capital stock and consumption of fixed capital, as also the state level gross capital formation of supra-regional sectors and prepares comparable estimates of State Domestic Product (SDP) at current prices.
Statement 2 is correct. India’s economy contracted by a historic 23.9% in the June quarter, marking the sharpest drop in the country’s growth numbers in more than 40 years. Data released by the National Statistical Office recently shows that manufacturing, construction and trade sectors experienced massive contraction at 39.3%, 50.3%, 47%, respectively.
The last contraction of the economy occurred in 1979-80, when GDP shrank 5.2%.

Reserve Bank of India in its monthly bulletin stated that India has entered a technical recession in the first half of 2020-21 for the first time in its history with Q2:2020- 21 likely to record the second successive quarter of GDP contraction.
A technical recession is a term used to describe two consecutive quarters of decline in output. In the case of a nation’s economy, the term usually refers to back-to-back contractions in real GDP.
The difference between a ‘technical recession’ and a ‘recession’ is that while the former term is mainly used to capture the trend in GDP, the latter expression encompasses an appreciably more broad-based decline in economic activity.

Statement 1 is correct. Base effect is often a term used in relation to economic indicators such as inflation and GDP data which are primarily based on the base effect of last year.
For inflation, Base effect refers to the distortion in monthly inflation figures from a sudden spike or decline in them during a short period of time. They are caused by seasonal or monthly variations.
Statement 2 is incorrect. It is usually a result of volatility rather than consistency in an economy.

Explanation:

The traditional argument is that the lower the interest rate, the better for businesses as it brings down the cost of capital, making investments more attractive.
 Any government would love this as the country would then draw higher investments leading to higher growth and more job creation.
 Governments abhor higher interest rates as, theoretically, these push up project costs and keep investors away.
 Capital is one of the three main factors of production, which are critical to the growth of a commercial entity, the other two being land and labour.
 But capital is only a necessary, not sufficient, condition. Land, unless allocated by the local government, is too costly for investors seeking to set up shop.
 On labour, even if adequate hands are available for a job, the skill quotient is still low. Training graduates to be job-ready is a form of tax that companies pay.
 Also to be taken into account is the market environment and demand. If end users are seeing lesser money in hand than earlier, demand will certainly be impacted.
 Therefore, in an environment where the other factors of production are not favourable for an investor, low interest rates by themselves may not prove attractive enough.
 Any revival of economic activity will be contingent on joint efforts by the government on the fiscal front to stimulate demand, and the RBI, to keep interest rates low.

Statement 1 is correct. Real GDP measures an economy’s total goods and

services in a given year, taking into account changes in price levels. It allows GDP

comparison year by year because it takes into account inflation.

Statement 2 is incorrect. Nominal GDP is also referred to as the current prices GDP. Real

GDP takes into consideration adjustments for changes in inflation. This means that if

inflation is positive, real GDP will be lower than nominal, and vice versa.

# GDP deflator is a measure of the level of prices of all new, domestically produced, final

goods and services in an economy. It is calculated by computing the ratio of nominal GDP to

the real measure of GDP.

Statement 1 is correct. The Ministry of Statistics and Programme Implementation has two wings, one relating to Statistics and the other Programme Implementation.

The Statistics Wing called the National Statistical Office (NSO) consists of the Central Statistical Office (CSO), the Computer center and the National Sample Survey Office (NSSO).

NSO, among other its functions, prepares national accounts as well as publishes annual estimates of national product, government and private consumption expenditure, capital formation, savings, estimates of capital stock and consumption of fixed capital, as also the state level gross capital formation of supra-regional sectors and prepares comparable estimates of State Domestic Product (SDP) at current prices.

Statement 2 is correct. India’s economy contracted by a historic 23.9% in the June quarter, marking the sharpest drop in the country’s growth numbers in more than 40 years. Data released by the National Statistical Office recently shows that manufacturing, construction and trade sectors experienced massive contraction at 39.3%, 50.3%, 47%, respectively.

The last contraction of the economy occurred in 1979-80, when GDP shrank 5.2%.

Reserve Bank of India in its monthly bulletin stated that India has entered a technical recession in the first half of 2020-21 for the first time in its history with Q2:2020- 21 likely to record the second successive quarter of GDP contraction.

A technical recession is a term used to describe two consecutive quarters of decline in output. In the case of a nation’s economy, the term usually refers to back-to-back contractions in real GDP.

The difference between a ‘technical recession’ and a ‘recession’ is that while the former term is mainly used to capture the trend in GDP, the latter expression encompasses an appreciably more broad-based decline in economic activity.

The Quick Estimates of Index of Industrial Production (IIP) are released

on 12th of every month (or previous working day if 12th is a holiday) with a six weeks lag

and compiled with data received from source agencies, who in turn receive the data from

the producing factories/ establishments.

Statement 1 is correct. The weightage of Manufacturing, Mining and Electricity

production in overall Index of Industrial Production (IIP) is 77.63 per cent, 14.37 per cent

and 7.99 per cent respectively.

Statement 2 is correct. There have been nine revision of base year of all-India IIP since the

beginning of its dissemination with first being 1937. Currently base year for IIP calculations is 2011-12.

Fisheries and aquaculture are an important source of food, nutrition, employment and income in India. The sector provides livelihood to about 16 million fishers and fish farmers at the primary level and almost twice the number along the value chain.

Statement 1 is incorrect. The Gross Value Added (GVA) of fisheries sector in the national economy during 2018-19 stood at Rs 2,12,915 crores (current basic prices) which constituted 1.24% of the total National GVA and 7.28% share of Agricultural GVA.

Statement 2 is incorrect. The PMMSY is an umbrella scheme with two separate Components namely (a) Central Sector Scheme (CS) and (b) Centrally Sponsored Scheme (CSS). The Centrally Sponsored Scheme (CSS) Component is further segregated into Non- beneficiary oriented and beneficiary orientated sub-components/activities under the following three broad heads:

–Enhancement of Production and Productivity

–Infrastructure and Post-harvest Management

–Fisheries Management and Regulatory Framework

Statement 1 is correct. The Private final consumption expenditure (PFCE) is defined as the expenditure incurred by the resident households and non-profit institutions serving households (NPISH) on final consumption of goods and services, whether made within or outside the economic territory.

Statement 2 is correct. The Private Final Consumption Expenditure formed more than 57 percent of the Real Gross Domestic Product (At 2011-12 Prices) of India in 2019-20.

Fisheries and aquaculture continue to be an important source of food, nutrition, income and livelihood to millions of people. Export earnings from the Fisheries sector has been Rs.46,662.85 crores during 2019-20.

The sector provides livelihood support to about 280 lakh people at the primary level and almost twice the number along the value chain and the annual average growth rate in the Fisheries sector has been 7% over the last few years. Fish being an affordable and rich source of animal protein, is one of the healthiest options to mitigate hunger and nutrient deficiency.

Statement 1 is incorrect. India is the second largest fish producing country in the world accounting for 7.56% of global production after China.

Statement 2 is incorrect. Fisheries sector is contributing about 1.24% to the country’s Gross Value Added (GVA) and over 7.28% to the agricultural GVA.