Economy: April 2021 Current Affair Notes | EduRev

UPSC Mains: International Relations, Social Issues & others

UPSC : Economy: April 2021 Current Affair Notes | EduRev

 Page 1


	
3.	ECONOMY	
3.1.	WHOLESALE	PRICE	INDEX	
Why in News? 
The annual rate of Wholesale Price Index (WPI) stood 
at 7.39% for the month of March, 2021 over March, 
2020 which is the highest wholesale inflation rate 
since October 2012. 
About WPI 
• The Wholesale Price Index (WPI) reflects 
changes in the average prices of goods at the 
wholesale level — that is, commodities sold in 
bulk and traded between business or entities 
rather than goods bought by consumers. 
• It does not consider the price of services and 
does not reflect the consumer price situation in 
the country. 
• Released by: Economic Advisor in the Ministry of 
Commerce and Industry 
• Base year: Its base year is 2011-12 (revised in 2017 from 2004-05)  
• Components of WPI: The index is based on the wholesale prices of a basket of 697 commodities categorised 
under three groups — Primary articles, Fuel and power and Manufactured products. 
 
Wholesale Price Index (WPI)  vs. Consumer Price Index (CPI) 
 WPI CPI 
Indicates Change in average prices for bulk sale of 
commodities at the first stage of transaction 
Average change in prices at retail level paid by the 
consumer 
Covers Goods only Both Goods and Services 
Base Year 2011-12 2011-12 
Published by Office of Economic Advisor (Ministry of 
Commerce and Industries) 
National Statistical Office (Ministry of Statistics and 
Programme implementation) 
Reasons for surge in WPI 
• Supply disruptions: Pandemic induced local lockdowns and supply disruptions have resulted into supply 
disruptions causing rise in prices. 
Significance of WPI 
• Used as a deflator of various nominal macroeconomic 
variables including Gross Domestic Product (GDP). 
• Used for the purpose of escalation clauses in the supply 
of raw materials, machinery and construction work. 
• Global investors track WPI as one of the key macro 
indicators for their investment decisions. 
• WPI based inflation estimates serve as an important 
determinant, in formulation of trade, fiscal and other 
economic policies by the Government. 
• WPI also has sub-index called WPI Food Index (aggregate 
of WPI for Food Products under Manufactured Products 
and Food Articles under Primary Article) which along 
with Consumer Price Index (CPI) Food Price Index 
published by Central Statistics Office (CSO) helps to 
monitor the food inflation effectively. 
Page 2


	
3.	ECONOMY	
3.1.	WHOLESALE	PRICE	INDEX	
Why in News? 
The annual rate of Wholesale Price Index (WPI) stood 
at 7.39% for the month of March, 2021 over March, 
2020 which is the highest wholesale inflation rate 
since October 2012. 
About WPI 
• The Wholesale Price Index (WPI) reflects 
changes in the average prices of goods at the 
wholesale level — that is, commodities sold in 
bulk and traded between business or entities 
rather than goods bought by consumers. 
• It does not consider the price of services and 
does not reflect the consumer price situation in 
the country. 
• Released by: Economic Advisor in the Ministry of 
Commerce and Industry 
• Base year: Its base year is 2011-12 (revised in 2017 from 2004-05)  
• Components of WPI: The index is based on the wholesale prices of a basket of 697 commodities categorised 
under three groups — Primary articles, Fuel and power and Manufactured products. 
 
Wholesale Price Index (WPI)  vs. Consumer Price Index (CPI) 
 WPI CPI 
Indicates Change in average prices for bulk sale of 
commodities at the first stage of transaction 
Average change in prices at retail level paid by the 
consumer 
Covers Goods only Both Goods and Services 
Base Year 2011-12 2011-12 
Published by Office of Economic Advisor (Ministry of 
Commerce and Industries) 
National Statistical Office (Ministry of Statistics and 
Programme implementation) 
Reasons for surge in WPI 
• Supply disruptions: Pandemic induced local lockdowns and supply disruptions have resulted into supply 
disruptions causing rise in prices. 
Significance of WPI 
• Used as a deflator of various nominal macroeconomic 
variables including Gross Domestic Product (GDP). 
• Used for the purpose of escalation clauses in the supply 
of raw materials, machinery and construction work. 
• Global investors track WPI as one of the key macro 
indicators for their investment decisions. 
• WPI based inflation estimates serve as an important 
determinant, in formulation of trade, fiscal and other 
economic policies by the Government. 
• WPI also has sub-index called WPI Food Index (aggregate 
of WPI for Food Products under Manufactured Products 
and Food Articles under Primary Article) which along 
with Consumer Price Index (CPI) Food Price Index 
published by Central Statistics Office (CSO) helps to 
monitor the food inflation effectively. 
	
• Depreciation of Rupees: The rupee has been depreciating because of the Reserve Bank of India (RBI)’s 
measures to keep the interest rate on government bonds low. Also, the outflows by foreign portfolio investors 
have placed an additional pressure on the rupee. 
o A decline in the external value of rupee makes India’s imports, particularly crude oil, metals and edible oils 
more expensive. 
• Rise in price of commodities: The prices of crude oil, petroleum products and basic metal substantially 
increased in March 2021 as compared to the corresponding month of last year. 
• Seasonalilty of products: As summer sets in, perishable products (especially vegetables) usually sees higher 
inflation. 
• Unreliability of data: The sharp rise in annual rate in March can be attributed to the low base as data for 
March 2020 was computed with a low response rate that could have given lop-sided results.  
o Month-on-month (March 2021 over February 2021) rate of inflation stood at 1.57 %. 
Implications 
• Increase in retail inflation: There are concerns that the higher inflation on the wholesale side could eventually 
spill over to the retail level in the following months, especially if the new lockdowns and restrictions hit supply 
chain. 
o Retail inflation has already climbed to 5.52% in March as fuel and transportation costs increased alongside 
some categories within the food basket. 
• Policy rate cuts: Although WPI numbers are not the Reserve Bank of India’s main metric for the purpose of 
setting monetary policy; the sharp spike may result in Monetary Policy Committee looking at precautionary 
rate cuts.  
• Higher inflationary expectations: The apprehensiveness about future inflation may result in people making 
purchases earlier than planned and cause a rise in actual current inflation. 
• Dual pressure on economy: Higher inflation and restrictions due to COVID-19 may weaken Indian economy 
further resulting into various disruptions such as higher unemployment. 
Conclusion 
Though CPI gives much clearer picture of Inflation than WPI, it is important not to overlook the surge in WPI. The 
rise in WPI may be indicative of the real inflation rise in future which may have disruptive effects on the economy.  
3.2.	PRADHAN	MANTRI	AWAAS	YOJANA-GRAMIN	(PMAY-G)	
Why in News? 
Ministry of Rural Development has recently informed that 92% of the target has been achieved in the 1st phase 
of Pradhan Mantri Awaas Yojana – Gramin (PMAY-G). 
 
About Pradhan Mantri Awaas Yojana – Gramin (PMAY-G) 	
• PMAY-G was launched in 2016 by restructuring Indira Awaas Yojana (IAY). 
o IAY was launched during 1985-86 as a sub-scheme of RLEGP (Rural Landless Employment Guarantee 
Programme).  
Page 3


	
3.	ECONOMY	
3.1.	WHOLESALE	PRICE	INDEX	
Why in News? 
The annual rate of Wholesale Price Index (WPI) stood 
at 7.39% for the month of March, 2021 over March, 
2020 which is the highest wholesale inflation rate 
since October 2012. 
About WPI 
• The Wholesale Price Index (WPI) reflects 
changes in the average prices of goods at the 
wholesale level — that is, commodities sold in 
bulk and traded between business or entities 
rather than goods bought by consumers. 
• It does not consider the price of services and 
does not reflect the consumer price situation in 
the country. 
• Released by: Economic Advisor in the Ministry of 
Commerce and Industry 
• Base year: Its base year is 2011-12 (revised in 2017 from 2004-05)  
• Components of WPI: The index is based on the wholesale prices of a basket of 697 commodities categorised 
under three groups — Primary articles, Fuel and power and Manufactured products. 
 
Wholesale Price Index (WPI)  vs. Consumer Price Index (CPI) 
 WPI CPI 
Indicates Change in average prices for bulk sale of 
commodities at the first stage of transaction 
Average change in prices at retail level paid by the 
consumer 
Covers Goods only Both Goods and Services 
Base Year 2011-12 2011-12 
Published by Office of Economic Advisor (Ministry of 
Commerce and Industries) 
National Statistical Office (Ministry of Statistics and 
Programme implementation) 
Reasons for surge in WPI 
• Supply disruptions: Pandemic induced local lockdowns and supply disruptions have resulted into supply 
disruptions causing rise in prices. 
Significance of WPI 
• Used as a deflator of various nominal macroeconomic 
variables including Gross Domestic Product (GDP). 
• Used for the purpose of escalation clauses in the supply 
of raw materials, machinery and construction work. 
• Global investors track WPI as one of the key macro 
indicators for their investment decisions. 
• WPI based inflation estimates serve as an important 
determinant, in formulation of trade, fiscal and other 
economic policies by the Government. 
• WPI also has sub-index called WPI Food Index (aggregate 
of WPI for Food Products under Manufactured Products 
and Food Articles under Primary Article) which along 
with Consumer Price Index (CPI) Food Price Index 
published by Central Statistics Office (CSO) helps to 
monitor the food inflation effectively. 
	
• Depreciation of Rupees: The rupee has been depreciating because of the Reserve Bank of India (RBI)’s 
measures to keep the interest rate on government bonds low. Also, the outflows by foreign portfolio investors 
have placed an additional pressure on the rupee. 
o A decline in the external value of rupee makes India’s imports, particularly crude oil, metals and edible oils 
more expensive. 
• Rise in price of commodities: The prices of crude oil, petroleum products and basic metal substantially 
increased in March 2021 as compared to the corresponding month of last year. 
• Seasonalilty of products: As summer sets in, perishable products (especially vegetables) usually sees higher 
inflation. 
• Unreliability of data: The sharp rise in annual rate in March can be attributed to the low base as data for 
March 2020 was computed with a low response rate that could have given lop-sided results.  
o Month-on-month (March 2021 over February 2021) rate of inflation stood at 1.57 %. 
Implications 
• Increase in retail inflation: There are concerns that the higher inflation on the wholesale side could eventually 
spill over to the retail level in the following months, especially if the new lockdowns and restrictions hit supply 
chain. 
o Retail inflation has already climbed to 5.52% in March as fuel and transportation costs increased alongside 
some categories within the food basket. 
• Policy rate cuts: Although WPI numbers are not the Reserve Bank of India’s main metric for the purpose of 
setting monetary policy; the sharp spike may result in Monetary Policy Committee looking at precautionary 
rate cuts.  
• Higher inflationary expectations: The apprehensiveness about future inflation may result in people making 
purchases earlier than planned and cause a rise in actual current inflation. 
• Dual pressure on economy: Higher inflation and restrictions due to COVID-19 may weaken Indian economy 
further resulting into various disruptions such as higher unemployment. 
Conclusion 
Though CPI gives much clearer picture of Inflation than WPI, it is important not to overlook the surge in WPI. The 
rise in WPI may be indicative of the real inflation rise in future which may have disruptive effects on the economy.  
3.2.	PRADHAN	MANTRI	AWAAS	YOJANA-GRAMIN	(PMAY-G)	
Why in News? 
Ministry of Rural Development has recently informed that 92% of the target has been achieved in the 1st phase 
of Pradhan Mantri Awaas Yojana – Gramin (PMAY-G). 
 
About Pradhan Mantri Awaas Yojana – Gramin (PMAY-G) 	
• PMAY-G was launched in 2016 by restructuring Indira Awaas Yojana (IAY). 
o IAY was launched during 1985-86 as a sub-scheme of RLEGP (Rural Landless Employment Guarantee 
Programme).  
	
o It was made an independent scheme from 1996.  
• Objective: Scheme aims at providing a pucca house, with basic amenities, to all homeless and those 
households living in kutcha and dilapidated 
house, by 2022. 
• Eligibility: Identification of beneficiaries as per 
the housing deprivation parameters and 
exclusion criteria prescribed under Socio 
Economic Caste Census (SECC) 2011 after due 
verification by Gram Sabha.  
• The Criteria for Automatic Inclusion is as follows 
(refer infographics).  
• Unit Size: Minimum size of the unit is 25 sq. mt. 
which includes a dedicated area for hygienic 
cooking. 
• Unit Assistance: Rs. 1.20 lakh in plains and 
Rs.1.30 lakh in hilly states, difficult areas and IAP 
districts. 
• Sharing Pattern: 60:40 between Centre and State 
in plain areas, 
o 90:10 for North Eastern States, 2 Himalayan 
states, 1 U.T. of Jammu & Kashmir (subject to 
change), and 
o 100 % Central Share for Union Territories 
including the UT of Ladakh. 
• Other Features: 
o Single State Nodal Account & 100 % 
Direct Benefit Transfer.  
o AwaasSoft: Workflow and transaction-
based Service Delivery Platform to 
facilitate e-governance of PMAY-G. 
ü AwaasApp: a mobile application used 
to monitor real time progress of 
house construction through date and 
time stamped and geo referenced 
photographs of the house. 
o Evidence based Monitoring:  progress of 
construction through geo-tagged photographs. 
o Convergence with other programmes for basic amenities. 
ü Provision of toilets at Rs. 12000/- (through Swachh Bharat Mission (G ramin)) and 90/95 days of 
unskilled wage labour under MGNREGA over and above the unit cost. 
o Quality of house construction: Rural Mason Training, House Design typologies etc. 
o Sensitization of the Beneficiaries:  Awaas Diwas (Housing day) is conducted in every block / group of 
panchayats for the sensitization of the beneficiaries. 
 
Governance & Accelerated Livelihoods (GOALS) project 
• In partnership with the Ministry of Rural Development (MoRD), UNDP (United Nations Development Programme), 
through the GOALS project, helps promote affordable housing for the rural poor.  
o The first component of this has been to provide beneficiary households with a wider range of choices in terms 
of housing designs, materials and construction technologies.  
o These choices are tailored to local conditions, aim to enhance user benefits and reduce the environmental 
footprint of housing.  
PMAY-G during COVID-19 Pandemic 
• In the FY 20-21, less than 6% of houses sanctioned under 
the scheme have reached completion, with COVID-19 
stalling progress. 
• Nationwide, the Ministry’s target was to sanction 63 lakh 
houses in 2020-21. Only 34 lakh were actually sanctioned, 
and only 1.9 lakh of those had reached completion at the 
end of January. 
o Implementation was affected at the ground level due to 
unavailability of construction materials, labour, delay 
in inspection of stages of house construction and so on. 
o However, states like Odisha and Jharkhand which are 
the source of large migrant worker populations saw 
some progress by engaging migrant workers in house 
construction activities in the rural areas. 
Page 4


	
3.	ECONOMY	
3.1.	WHOLESALE	PRICE	INDEX	
Why in News? 
The annual rate of Wholesale Price Index (WPI) stood 
at 7.39% for the month of March, 2021 over March, 
2020 which is the highest wholesale inflation rate 
since October 2012. 
About WPI 
• The Wholesale Price Index (WPI) reflects 
changes in the average prices of goods at the 
wholesale level — that is, commodities sold in 
bulk and traded between business or entities 
rather than goods bought by consumers. 
• It does not consider the price of services and 
does not reflect the consumer price situation in 
the country. 
• Released by: Economic Advisor in the Ministry of 
Commerce and Industry 
• Base year: Its base year is 2011-12 (revised in 2017 from 2004-05)  
• Components of WPI: The index is based on the wholesale prices of a basket of 697 commodities categorised 
under three groups — Primary articles, Fuel and power and Manufactured products. 
 
Wholesale Price Index (WPI)  vs. Consumer Price Index (CPI) 
 WPI CPI 
Indicates Change in average prices for bulk sale of 
commodities at the first stage of transaction 
Average change in prices at retail level paid by the 
consumer 
Covers Goods only Both Goods and Services 
Base Year 2011-12 2011-12 
Published by Office of Economic Advisor (Ministry of 
Commerce and Industries) 
National Statistical Office (Ministry of Statistics and 
Programme implementation) 
Reasons for surge in WPI 
• Supply disruptions: Pandemic induced local lockdowns and supply disruptions have resulted into supply 
disruptions causing rise in prices. 
Significance of WPI 
• Used as a deflator of various nominal macroeconomic 
variables including Gross Domestic Product (GDP). 
• Used for the purpose of escalation clauses in the supply 
of raw materials, machinery and construction work. 
• Global investors track WPI as one of the key macro 
indicators for their investment decisions. 
• WPI based inflation estimates serve as an important 
determinant, in formulation of trade, fiscal and other 
economic policies by the Government. 
• WPI also has sub-index called WPI Food Index (aggregate 
of WPI for Food Products under Manufactured Products 
and Food Articles under Primary Article) which along 
with Consumer Price Index (CPI) Food Price Index 
published by Central Statistics Office (CSO) helps to 
monitor the food inflation effectively. 
	
• Depreciation of Rupees: The rupee has been depreciating because of the Reserve Bank of India (RBI)’s 
measures to keep the interest rate on government bonds low. Also, the outflows by foreign portfolio investors 
have placed an additional pressure on the rupee. 
o A decline in the external value of rupee makes India’s imports, particularly crude oil, metals and edible oils 
more expensive. 
• Rise in price of commodities: The prices of crude oil, petroleum products and basic metal substantially 
increased in March 2021 as compared to the corresponding month of last year. 
• Seasonalilty of products: As summer sets in, perishable products (especially vegetables) usually sees higher 
inflation. 
• Unreliability of data: The sharp rise in annual rate in March can be attributed to the low base as data for 
March 2020 was computed with a low response rate that could have given lop-sided results.  
o Month-on-month (March 2021 over February 2021) rate of inflation stood at 1.57 %. 
Implications 
• Increase in retail inflation: There are concerns that the higher inflation on the wholesale side could eventually 
spill over to the retail level in the following months, especially if the new lockdowns and restrictions hit supply 
chain. 
o Retail inflation has already climbed to 5.52% in March as fuel and transportation costs increased alongside 
some categories within the food basket. 
• Policy rate cuts: Although WPI numbers are not the Reserve Bank of India’s main metric for the purpose of 
setting monetary policy; the sharp spike may result in Monetary Policy Committee looking at precautionary 
rate cuts.  
• Higher inflationary expectations: The apprehensiveness about future inflation may result in people making 
purchases earlier than planned and cause a rise in actual current inflation. 
• Dual pressure on economy: Higher inflation and restrictions due to COVID-19 may weaken Indian economy 
further resulting into various disruptions such as higher unemployment. 
Conclusion 
Though CPI gives much clearer picture of Inflation than WPI, it is important not to overlook the surge in WPI. The 
rise in WPI may be indicative of the real inflation rise in future which may have disruptive effects on the economy.  
3.2.	PRADHAN	MANTRI	AWAAS	YOJANA-GRAMIN	(PMAY-G)	
Why in News? 
Ministry of Rural Development has recently informed that 92% of the target has been achieved in the 1st phase 
of Pradhan Mantri Awaas Yojana – Gramin (PMAY-G). 
 
About Pradhan Mantri Awaas Yojana – Gramin (PMAY-G) 	
• PMAY-G was launched in 2016 by restructuring Indira Awaas Yojana (IAY). 
o IAY was launched during 1985-86 as a sub-scheme of RLEGP (Rural Landless Employment Guarantee 
Programme).  
	
o It was made an independent scheme from 1996.  
• Objective: Scheme aims at providing a pucca house, with basic amenities, to all homeless and those 
households living in kutcha and dilapidated 
house, by 2022. 
• Eligibility: Identification of beneficiaries as per 
the housing deprivation parameters and 
exclusion criteria prescribed under Socio 
Economic Caste Census (SECC) 2011 after due 
verification by Gram Sabha.  
• The Criteria for Automatic Inclusion is as follows 
(refer infographics).  
• Unit Size: Minimum size of the unit is 25 sq. mt. 
which includes a dedicated area for hygienic 
cooking. 
• Unit Assistance: Rs. 1.20 lakh in plains and 
Rs.1.30 lakh in hilly states, difficult areas and IAP 
districts. 
• Sharing Pattern: 60:40 between Centre and State 
in plain areas, 
o 90:10 for North Eastern States, 2 Himalayan 
states, 1 U.T. of Jammu & Kashmir (subject to 
change), and 
o 100 % Central Share for Union Territories 
including the UT of Ladakh. 
• Other Features: 
o Single State Nodal Account & 100 % 
Direct Benefit Transfer.  
o AwaasSoft: Workflow and transaction-
based Service Delivery Platform to 
facilitate e-governance of PMAY-G. 
ü AwaasApp: a mobile application used 
to monitor real time progress of 
house construction through date and 
time stamped and geo referenced 
photographs of the house. 
o Evidence based Monitoring:  progress of 
construction through geo-tagged photographs. 
o Convergence with other programmes for basic amenities. 
ü Provision of toilets at Rs. 12000/- (through Swachh Bharat Mission (G ramin)) and 90/95 days of 
unskilled wage labour under MGNREGA over and above the unit cost. 
o Quality of house construction: Rural Mason Training, House Design typologies etc. 
o Sensitization of the Beneficiaries:  Awaas Diwas (Housing day) is conducted in every block / group of 
panchayats for the sensitization of the beneficiaries. 
 
Governance & Accelerated Livelihoods (GOALS) project 
• In partnership with the Ministry of Rural Development (MoRD), UNDP (United Nations Development Programme), 
through the GOALS project, helps promote affordable housing for the rural poor.  
o The first component of this has been to provide beneficiary households with a wider range of choices in terms 
of housing designs, materials and construction technologies.  
o These choices are tailored to local conditions, aim to enhance user benefits and reduce the environmental 
footprint of housing.  
PMAY-G during COVID-19 Pandemic 
• In the FY 20-21, less than 6% of houses sanctioned under 
the scheme have reached completion, with COVID-19 
stalling progress. 
• Nationwide, the Ministry’s target was to sanction 63 lakh 
houses in 2020-21. Only 34 lakh were actually sanctioned, 
and only 1.9 lakh of those had reached completion at the 
end of January. 
o Implementation was affected at the ground level due to 
unavailability of construction materials, labour, delay 
in inspection of stages of house construction and so on. 
o However, states like Odisha and Jharkhand which are 
the source of large migrant worker populations saw 
some progress by engaging migrant workers in house 
construction activities in the rural areas. 
	
3.3.	SWAMITVA	SCHEME	
Why in News? 
Recently, Prime Minister of India launched the distribution of e-
property cards under the SWAMITVA scheme on National 
Panchayati Raj Day. 
About SWAMITVA Scheme 
• It is a Central Sector Scheme that aims to provide an 
integrated property validation solution for rural India, 
engaging the latest Drone Surveying technology, for 
demarcating the inhabitant (Aabadi) land in rural areas. 
o It aims to update the ‘record-of-rights’ in the 
revenue/property registers and issue property cards 
to the property owners in rural areas.  
• It is a collaborative effort of the Ministry of Panchayati Raj (MoPR) (Nodal Ministry for implementation of the 
scheme), State Panchayati Raj Departments, State Revenue / Land Records Departments and Survey of India 
(technology partner for implementation). 
	
• The Scheme is divided into two Phases:  
o Phase I - Pilot Scheme (April 2020-March 2021) Six pilot States (Haryana, Karnataka, Madhya Pradesh, 
Maharashtra, Uttar Pradesh and Uttarakhand) covering approx. 1 lakh villages and CORS network 
establishment in Punjab and Rajasthan  
o Phase II (April 2021 – march 2024) -Complete survey of remaining villages. 
• Components of the scheme 
o Establishment of CORS network: Continuously Operating Reference Stations (CORS) is a network of 
reference stations that supports establishment of Ground Control Points, which is an important activity 
for accurate Georeferencing, ground truthing and demarcation of Lands. 
o Large Scale Mapping (LSM) using Drone: Rural inhabited (abadi) area would be mapped by Survey of India 
using drone Survey to generate high resolution and accurate maps based on which, property cards would 
be issued to the rural household owners. 
o Information, Education and Communication: Awareness program to sensitize the rural population about 
the surveying methodology and its benefits. 
o Enhancement of Spatial Planning Application “Gram Manchitra”: The digital spatial data/maps created 
under drone survey shall be leveraged for creation of spatial analytical tools to support preparation of 
Gram Panchayat Development Plan (GPDP). 
o Online Monitoring and reporting dashboard would monitor the progress of activities. 
o Program Management Units: The scheme will be implemented through the regular departmental 
mechanisms, which will be assisted by Programme Management Units at the National and State level. 
 
About Survey of India 
• It is the National Survey and Mapping 
Organization of the country under the 
Department of Science & Technology. 
• It was set up in 1767 and is the oldest 
scientific department of the Govt. of India.  
• It takes a leadership role in providing user 
focused, cost effective, reliable and quality 
geospatial data, information and intelligence 
for meeting the needs of national security, 
sustainable national development, and new 
information markets. 
Page 5


	
3.	ECONOMY	
3.1.	WHOLESALE	PRICE	INDEX	
Why in News? 
The annual rate of Wholesale Price Index (WPI) stood 
at 7.39% for the month of March, 2021 over March, 
2020 which is the highest wholesale inflation rate 
since October 2012. 
About WPI 
• The Wholesale Price Index (WPI) reflects 
changes in the average prices of goods at the 
wholesale level — that is, commodities sold in 
bulk and traded between business or entities 
rather than goods bought by consumers. 
• It does not consider the price of services and 
does not reflect the consumer price situation in 
the country. 
• Released by: Economic Advisor in the Ministry of 
Commerce and Industry 
• Base year: Its base year is 2011-12 (revised in 2017 from 2004-05)  
• Components of WPI: The index is based on the wholesale prices of a basket of 697 commodities categorised 
under three groups — Primary articles, Fuel and power and Manufactured products. 
 
Wholesale Price Index (WPI)  vs. Consumer Price Index (CPI) 
 WPI CPI 
Indicates Change in average prices for bulk sale of 
commodities at the first stage of transaction 
Average change in prices at retail level paid by the 
consumer 
Covers Goods only Both Goods and Services 
Base Year 2011-12 2011-12 
Published by Office of Economic Advisor (Ministry of 
Commerce and Industries) 
National Statistical Office (Ministry of Statistics and 
Programme implementation) 
Reasons for surge in WPI 
• Supply disruptions: Pandemic induced local lockdowns and supply disruptions have resulted into supply 
disruptions causing rise in prices. 
Significance of WPI 
• Used as a deflator of various nominal macroeconomic 
variables including Gross Domestic Product (GDP). 
• Used for the purpose of escalation clauses in the supply 
of raw materials, machinery and construction work. 
• Global investors track WPI as one of the key macro 
indicators for their investment decisions. 
• WPI based inflation estimates serve as an important 
determinant, in formulation of trade, fiscal and other 
economic policies by the Government. 
• WPI also has sub-index called WPI Food Index (aggregate 
of WPI for Food Products under Manufactured Products 
and Food Articles under Primary Article) which along 
with Consumer Price Index (CPI) Food Price Index 
published by Central Statistics Office (CSO) helps to 
monitor the food inflation effectively. 
	
• Depreciation of Rupees: The rupee has been depreciating because of the Reserve Bank of India (RBI)’s 
measures to keep the interest rate on government bonds low. Also, the outflows by foreign portfolio investors 
have placed an additional pressure on the rupee. 
o A decline in the external value of rupee makes India’s imports, particularly crude oil, metals and edible oils 
more expensive. 
• Rise in price of commodities: The prices of crude oil, petroleum products and basic metal substantially 
increased in March 2021 as compared to the corresponding month of last year. 
• Seasonalilty of products: As summer sets in, perishable products (especially vegetables) usually sees higher 
inflation. 
• Unreliability of data: The sharp rise in annual rate in March can be attributed to the low base as data for 
March 2020 was computed with a low response rate that could have given lop-sided results.  
o Month-on-month (March 2021 over February 2021) rate of inflation stood at 1.57 %. 
Implications 
• Increase in retail inflation: There are concerns that the higher inflation on the wholesale side could eventually 
spill over to the retail level in the following months, especially if the new lockdowns and restrictions hit supply 
chain. 
o Retail inflation has already climbed to 5.52% in March as fuel and transportation costs increased alongside 
some categories within the food basket. 
• Policy rate cuts: Although WPI numbers are not the Reserve Bank of India’s main metric for the purpose of 
setting monetary policy; the sharp spike may result in Monetary Policy Committee looking at precautionary 
rate cuts.  
• Higher inflationary expectations: The apprehensiveness about future inflation may result in people making 
purchases earlier than planned and cause a rise in actual current inflation. 
• Dual pressure on economy: Higher inflation and restrictions due to COVID-19 may weaken Indian economy 
further resulting into various disruptions such as higher unemployment. 
Conclusion 
Though CPI gives much clearer picture of Inflation than WPI, it is important not to overlook the surge in WPI. The 
rise in WPI may be indicative of the real inflation rise in future which may have disruptive effects on the economy.  
3.2.	PRADHAN	MANTRI	AWAAS	YOJANA-GRAMIN	(PMAY-G)	
Why in News? 
Ministry of Rural Development has recently informed that 92% of the target has been achieved in the 1st phase 
of Pradhan Mantri Awaas Yojana – Gramin (PMAY-G). 
 
About Pradhan Mantri Awaas Yojana – Gramin (PMAY-G) 	
• PMAY-G was launched in 2016 by restructuring Indira Awaas Yojana (IAY). 
o IAY was launched during 1985-86 as a sub-scheme of RLEGP (Rural Landless Employment Guarantee 
Programme).  
	
o It was made an independent scheme from 1996.  
• Objective: Scheme aims at providing a pucca house, with basic amenities, to all homeless and those 
households living in kutcha and dilapidated 
house, by 2022. 
• Eligibility: Identification of beneficiaries as per 
the housing deprivation parameters and 
exclusion criteria prescribed under Socio 
Economic Caste Census (SECC) 2011 after due 
verification by Gram Sabha.  
• The Criteria for Automatic Inclusion is as follows 
(refer infographics).  
• Unit Size: Minimum size of the unit is 25 sq. mt. 
which includes a dedicated area for hygienic 
cooking. 
• Unit Assistance: Rs. 1.20 lakh in plains and 
Rs.1.30 lakh in hilly states, difficult areas and IAP 
districts. 
• Sharing Pattern: 60:40 between Centre and State 
in plain areas, 
o 90:10 for North Eastern States, 2 Himalayan 
states, 1 U.T. of Jammu & Kashmir (subject to 
change), and 
o 100 % Central Share for Union Territories 
including the UT of Ladakh. 
• Other Features: 
o Single State Nodal Account & 100 % 
Direct Benefit Transfer.  
o AwaasSoft: Workflow and transaction-
based Service Delivery Platform to 
facilitate e-governance of PMAY-G. 
ü AwaasApp: a mobile application used 
to monitor real time progress of 
house construction through date and 
time stamped and geo referenced 
photographs of the house. 
o Evidence based Monitoring:  progress of 
construction through geo-tagged photographs. 
o Convergence with other programmes for basic amenities. 
ü Provision of toilets at Rs. 12000/- (through Swachh Bharat Mission (G ramin)) and 90/95 days of 
unskilled wage labour under MGNREGA over and above the unit cost. 
o Quality of house construction: Rural Mason Training, House Design typologies etc. 
o Sensitization of the Beneficiaries:  Awaas Diwas (Housing day) is conducted in every block / group of 
panchayats for the sensitization of the beneficiaries. 
 
Governance & Accelerated Livelihoods (GOALS) project 
• In partnership with the Ministry of Rural Development (MoRD), UNDP (United Nations Development Programme), 
through the GOALS project, helps promote affordable housing for the rural poor.  
o The first component of this has been to provide beneficiary households with a wider range of choices in terms 
of housing designs, materials and construction technologies.  
o These choices are tailored to local conditions, aim to enhance user benefits and reduce the environmental 
footprint of housing.  
PMAY-G during COVID-19 Pandemic 
• In the FY 20-21, less than 6% of houses sanctioned under 
the scheme have reached completion, with COVID-19 
stalling progress. 
• Nationwide, the Ministry’s target was to sanction 63 lakh 
houses in 2020-21. Only 34 lakh were actually sanctioned, 
and only 1.9 lakh of those had reached completion at the 
end of January. 
o Implementation was affected at the ground level due to 
unavailability of construction materials, labour, delay 
in inspection of stages of house construction and so on. 
o However, states like Odisha and Jharkhand which are 
the source of large migrant worker populations saw 
some progress by engaging migrant workers in house 
construction activities in the rural areas. 
	
3.3.	SWAMITVA	SCHEME	
Why in News? 
Recently, Prime Minister of India launched the distribution of e-
property cards under the SWAMITVA scheme on National 
Panchayati Raj Day. 
About SWAMITVA Scheme 
• It is a Central Sector Scheme that aims to provide an 
integrated property validation solution for rural India, 
engaging the latest Drone Surveying technology, for 
demarcating the inhabitant (Aabadi) land in rural areas. 
o It aims to update the ‘record-of-rights’ in the 
revenue/property registers and issue property cards 
to the property owners in rural areas.  
• It is a collaborative effort of the Ministry of Panchayati Raj (MoPR) (Nodal Ministry for implementation of the 
scheme), State Panchayati Raj Departments, State Revenue / Land Records Departments and Survey of India 
(technology partner for implementation). 
	
• The Scheme is divided into two Phases:  
o Phase I - Pilot Scheme (April 2020-March 2021) Six pilot States (Haryana, Karnataka, Madhya Pradesh, 
Maharashtra, Uttar Pradesh and Uttarakhand) covering approx. 1 lakh villages and CORS network 
establishment in Punjab and Rajasthan  
o Phase II (April 2021 – march 2024) -Complete survey of remaining villages. 
• Components of the scheme 
o Establishment of CORS network: Continuously Operating Reference Stations (CORS) is a network of 
reference stations that supports establishment of Ground Control Points, which is an important activity 
for accurate Georeferencing, ground truthing and demarcation of Lands. 
o Large Scale Mapping (LSM) using Drone: Rural inhabited (abadi) area would be mapped by Survey of India 
using drone Survey to generate high resolution and accurate maps based on which, property cards would 
be issued to the rural household owners. 
o Information, Education and Communication: Awareness program to sensitize the rural population about 
the surveying methodology and its benefits. 
o Enhancement of Spatial Planning Application “Gram Manchitra”: The digital spatial data/maps created 
under drone survey shall be leveraged for creation of spatial analytical tools to support preparation of 
Gram Panchayat Development Plan (GPDP). 
o Online Monitoring and reporting dashboard would monitor the progress of activities. 
o Program Management Units: The scheme will be implemented through the regular departmental 
mechanisms, which will be assisted by Programme Management Units at the National and State level. 
 
About Survey of India 
• It is the National Survey and Mapping 
Organization of the country under the 
Department of Science & Technology. 
• It was set up in 1767 and is the oldest 
scientific department of the Govt. of India.  
• It takes a leadership role in providing user 
focused, cost effective, reliable and quality 
geospatial data, information and intelligence 
for meeting the needs of national security, 
sustainable national development, and new 
information markets. 
	
 
Issues in implementation of the scheme 
• Reluctance in community: Land and boundaries are sensitive topics among rural people, which can discourage 
them to participate in such policy reforms. 
• Exclusion of vulnerable people:  Dalits, women, tenant farmers and tribal communities are often excluded 
from accessing land, even though they may legitimately have a claim.  
• Lack of functional market in rural areas for the using land as marketable collateral. 
• Regular updating of the created records: Different authorities for creation (Survey of India) and maintenance 
(States’ Revenue Department) of records may create impediments in regular updating of created records. 
• Center- State Coordination: With center being the nodal agency and states being the implementation agency 
there have been certain issues related to smooth implementation of the scheme especially related to 
monitoring and ownership of the scheme. 
• Legal loopholes: The Scheme places the responsibility of carrying out appropriate amendments to the revenue 
laws for its implementation on the respective state revenue departments. However, careless review of these 
laws can create legal loopholes. 
o For example, in Haryana, the scheme has been implemented under its Panchayati Raj Act. However, the 
Act only empowers the panchayat to prepare the maps and not to create the associated land records. 
Thus, there is a possibility of disputes.  
• Missed opportunity of women empowerment: Single women form a significant share of the population but 
are often devoid of property ownership. The scheme in its current design is missing an opportunity to enable 
recognition of women’s ownership rights as it issues property cards based on “possession” and not 
“inheritance”.  
Way Forward 
• Engaging the community from the beginning: Involving the community and ensuring high level of 
transparency can create an environment of greater acceptance of the process and reduce potential for 
disputes. 
• Protecting the most vulnerable people:  It would be important to build safeguards in the implementation 
process to ensure legitimate claims of the most vulnerable people are not crowded out. 
• Establish a grievance redressal system: A grievance redressal system will effectively addresses people’s 
concerns in a transparent and fair manner and will aid in smooth implementation of the program. 
• Enable markets to work:  States should simplify the legislative and regulatory procedures to build consumer 
confidence and encourage transactions in these areas. 
• Fostering healthy competition among states: It can expedite progress under the scheme. For this a credible 
system or an index to verify achievement and rank states should be implemented. 
Read More
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