With reference to the Capital Goods sector in India, which among the following observations is / are correct?
1. The demand and input costs in this sector is cyclical
2. Capital Goods Industry is one of the Eight Core Industries in India
Choose the correct option from the codes given below:

Answer: [A] Only 1

Cyclical demand and costs are those which changes in a regular way over time, depending on the part of the trade cycle that a country is in or the time of year. Kindly note that demand and input costs are cyclical for many sectors such as commodities, capital goods, real estate, construction and financial services. The second statement is not correct. Although the capital good sector has a weightage of 8.8% in the IIP, contributes 12% to the total manufacturing activity (which is about 15% of the GDP), yet it is spread in many sectors. The eight core industries include: Coal, Crude Oil, Natural Gas, Petroleum Refinery Products, Fertilizers, Steel, Cement and Electricity.

This question is a part of GKToday's Integrated IAS General Studies Module