CAPF AC 2023 Q27: Indian Economy – National Income & Economic Growth
- (a) 1 only
- (b) 1 and 2 only
- (c) 2 and 3 only
- (d) 1, 2 and 3
Answer: (d) 1, 2 and 3
Explanation
High Frequency Indicators
How to think: GDP figures come only once a quarter and with a delay.
High frequency indicators are numbers that come out daily, weekly or monthly.
They show quickly which way the economy is moving.
All three items in the question are such numbers.
| Indicator | How often | What it signals |
|---|---|---|
| Power consumption | Daily and monthly | Industrial and household activity |
| IIP General Index | Monthly | Factory output |
| 10-year G-sec yield | Daily | Interest rates and borrowing cost |
Other examples: GST collections, e-way bills, PMI for manufacturing and services, rail freight, port cargo, fuel sales, vehicle sales and UPI transactions.
Where they appear: the Economic Survey and the Finance Ministry's Monthly Economic Review carry a table of them.
Answer: (d) 1, 2 and 3.
Why each option is right or wrong
- (a) Incorrect. The IIP and G-sec yields are high frequency indicators too.
- (b) Incorrect. The 10-year G-sec yield, available every day, is also one.
- (c) Incorrect. Power consumption is among the best-known such indicators.
- (d) CORRECT. All three are high frequency indicators.
Key point
High frequency indicators: power consumption, IIP, core sector output, PMI, GST collections, e-way bills, rail freight, port traffic, fuel and vehicle sales, UPI volumes, G-sec yields, bank credit. IIP: monthly, base 2011-12, released by the NSO.
Remember
High frequency = monthly or faster data on the economy.
Common mistakes
- Thinking a financial market number like the G-sec yield is not an economic indicator.
- Confusing high frequency indicators with quarterly GDP estimates.
- Assuming the IIP is released yearly; it comes every month.
Exam tip
Educated guess: ask of each item: is it published monthly or more often? Power use, factory output and bond yields all are, so all three qualify.
Sources
- Economic Survey 2022-23 — State of the Economy (table of high frequency indicators)
- Department of Economic Affairs, Ministry of Finance — Monthly Economic Review