CriSidEx

RELEVANCE – UPSC GS PRELIMS

EXPECTED QUESTIONS

QUES 1 . Consider the following statements about CriSidEx-

1 . CriSidEx is India’s first sentiment index for Medium Scale Enterprises .

2 .It is developed jointly by CRISIL & SIDBI.

Which among the above statements is /are correct ?

a . 1 only

b . 2 only

c . both 1 & 2

d . none of the above

Answer – b

QUES 2 . Consider the following statements about micro and small enterprises ( MSEs) sector-

1 .It accounts for 50% of enterprises in India.

2 . It is the largest employer among all the sectors in India. 

Which among the above statements is /are correct ?

a . 1 only

b . 2 only

c . both 1 & 2

d . none of the above

Answer – d

QUES 3 . Consider the following statements about CriSidEx-

1 . CriSidEx is a composite index based on a diffusion index of 6 parameters 

2 .It measures MSE business sentiment on a scale of 0 (extremely negative ) to 100 ( extremely positive) .

Which among the above statements is /are correct ?

a . 1 only

b . 2 only

c . both 1 & 2

d . none of the above

Answer – d

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CriSidEx is India’s first sentiment index for micro and small enterprises ( MSEs) developed jointly by CRISIL & SIDBI .

Why an MSE sentiment index was needed?

1 . Limited representation of MSEs – which account for 90% of enterprises in India, and are the second-largest employers after agriculture – in macro and micro assessments.
2 . Existing business indices focus on predicting the direction of annual change of GDP but not the impact at micro level in each industry/sector.
3 . Policy makers unable to assess the impact of their decisions on MSEs.
4 . Lack of data on employment and production cycles, which can be the basis of estimation of employment and capital formation in the MSE sector
5 . Significant lag in availability of financial information of MSEs restricts lenders from taking timely credit decisions. Access to formal finance remains the key challenge for MSEs.
6 . MSEs are unable to assess how they are faring versus peers.
7 . There is no sector-specific index that projects changes in sentiment and which will help MSEs take important decisions.

Key Features of CriSidEx

CriSidEx is a composite index based on a diffusion index of 8 parameters and measures MSE business sentiment on a scale of 0 (extremely negative ) to 200 ( extremely positive) .

CriSidEx will have 2 indices , one for the ‘survey quarter’ and another for the ‘next quarter’.

Benefit or significance of CriSidEx

The crucial benefit of CriSidEx is that its readings will flag potential headwinds and changes in production cycles and thus help improve market efficiencies. And by capturing the sentiment of exporters and importers , it will also offer actionable indicators on foreign trade.