PIB 1st June 2021

INDEX OF EIGHT CORE INDUSTRIES FOR APRIL 2021

 Focus: GS III-Indian Economy

About Index of Eight Core Industries:

• The Eight Core Industries comprise 40.27% of the weight of items included in the Index of Industrial Production (IIP).

Index of Industrial Production (IIP):

• The Index of Industrial Production (IIP) is an index that shows the growth rates in different industry groups of the economy in a fixed period of time.
• It is compiled and published monthly by the Central Statistical Organization (CSO), Ministry of Statistics and Programme Implementation (MOSPI).
• The Central Statistics Office (CSO) revised the base year of the all-India Index of Industrial Production (IIP) from 2004-05 to 2011-12 on 12 May 2017.
• IIP is a composite indicator that measures the growth rate of industry groups classified under broad sectors, namely, Mining, Manufacturing, and Electricity.
• Use-based sectors, namely Basic Goods, Capital Goods, and Intermediate Goods.

Released by: The Office of the Economic Adviser, Department for Promotion of Industry and Internal Trade releases the Index of Eight Core Sector Industries.

Base year: 2011-12

• Coal- 10.33 percent, decreased by 46.0 percent in April 2021 compared to March 2021 while year on year basis production increased by 9.5 per cent in April 2021 compared to April 2020.

• Crude Oil- 8.98per cent, decreased by 4.6 percent in April 2021 compared to March 2021 while year on year basis production declined by 2.1 per cent in April 2021 compared to April 2020.

• Natural Gas- 6.88per cent, decreased by 1.1 percent in April 2021 compared to March 2021 while year on year basis production increased by 25.0 per cent in April 2021 over April 2020.

• Petroleum Refinery Products- 28.04per cent, decreased by 8.2 percent in April 2021 compared to March 2021 while year on year basis production increased by 30.9 per cent in April 2021 over April 2020.

• Fertilizers-2.63 per cent,  decreased by 5.3 percent in April 2021 compared to March 2021 while year on year basis production increased by 1.7 per cent in April 2021 over April 2020.

• Steel- 17.92per cent, decreased by 20.7 percent in April 2021 compared to March 2021 while year on year basis production increased by 400.0 per cent in April 2021 over April 2020.

• Cement-5.37per cent,  decreased by 15.2 percent in April 2021 compared to March 2021 while year on year basis production increased by 548.8 per cent  in April 2021 over April 2020.

• Electricity- 19.85per cent,  decreased by 3.3 percent  in April 2021 compared to March 2021 while year on year basis production increased by 38.7 per cent  in April 2021 over April 2020. 

Below image attached Eight Core Industries based on their weightage.

Significance of IIP:

• IIP is the only measure on the physical volume of production.
• It is used by government agencies including the Ministry of Finance, the Reserve Bank of India, etc., for policy-making purposes.
• IIP remains extremely relevant for the calculation of the quarterly and advance GDP estimates.

EMERGENCY CREDIT LINE GUARANTEE SCHEME

Focus: GS III-Indian Economy

Why in news?

Emergency Credit Line Guarantee Scheme (ECLGS) has expanded – ECLGS 4.0 for onsite oxygen generation, wider coverage of ECLGS 3.0 and increase in tenor for ECLGS 1.0

Details:

• ECLGS 4.0:100% guarantee cover to loans up to Rs.2 crore to hospitals/nursing homes/clinics/medical colleges for setting up on-site oxygen generation plants, interest rate capped at 7.5%;
• Borrowers who are eligible for restructuring as per RBI guidelines of May 05, 2021 and had availed loans under ECLGS 1.0 of overall tenure of four years comprising of  repayment of interest only during the first 12 months with repayment of principal and interest in 36 months thereafter will now be able to avail a tenure of five years for their ECLGS loan i.e. repayment of interest only for the first 24 months with repayment of principal and interest in 36 months thereafter;
• Additional ECLGS assistance of upto 10% of the outstanding as on February 29, 2020 to borrowers covered under ECLGS 1.0, in tandem with restructuring as per RBI guidelines of May 05, 2021;
• Current ceiling of Rs. 500 Cr. of loan outstanding for eligibility under ECLGS 3.0 to be removed, subject to maximum additional ECLGS assistance to each borrower being limited to 40% or Rs.200 crore, whichever is lower;
• Civil Aviation sector to be eligible under ECLGS 3.0
• Validity of ECLGS extended to 30.09.2021 or till guarantees for an amount of Rs.3 lakh crore are issued. Disbursement under the scheme permitted up to 31.12.2021.

About Emergency Credit Line Guarantee Scheme (ECLGS)

• Under the Emergency Credit Line Guarantee Scheme (ECLGS) 100% guarantee coverage to be provided by National Credit Guarantee Trustee Company Limited (NCGTC) for additional funding of up to Rs. 3 lakh crore to eligible MSMEs and interested MUDRA borrowers.
• The credit will be provided in the form of a Guaranteed Emergency Credit Line (GECL) facility.
• Tenor of the loan under Scheme shall be four years with a moratorium period of one year on the principal amount.
• No Guarantee Fee shall be charged by NCGTC from the Member Lending Institutions (MLIs) under the Scheme.
• Interest rates under the Scheme shall be capped at 9.25% for banks and FIs, and at 14% for NBFCs.

Aims and objectives of ECLGS

• The Scheme aims at mitigating the economic distress faced by MSMEs by providing them additional funding in the form of a fully guaranteed emergency credit line.
• The main objective is to provide an incentive to Member Lending Institutions (MLIs), i.e., Banks, Financial Institutions (FIs) and NBFCs to increase access to, and enable the availability of additional funding facility to MSME borrowers.
• It aims to provide a 100 per cent guarantee for any losses suffered by them due to non-repayment of the GECL funding by borrowers.

Benefits of the ECLGS

• The scheme aims to mitigate the distress caused by COVID-19 and the consequent lockdown, which has severely impacted manufacturing and other activities in the MSME sector.
• The scheme is expected to provide credit to the sector at a low cost, thereby enabling MSMEs to meet their operational liabilities and restart their businesses.
• By supporting MSMEs to continue functioning during the current unprecedented situation, the Scheme is also expected to have a positive impact on the economy and support its revival.