Index of Industrial Production

• The Index of Industrial Production (IIP) is an index for India which details out the growth of various sectors in an economy such as mineral mining, electricity and manufacturing. The all India IIP is a composite indicator that measures the short-term changes in the volume of production of a basket of industrial products during a given period with respect to that in a chosen base period. It is compiled and published monthly by the Central Statistical Organisation (CSO) six weeks after the reference month ends.

• Under Central Statistics Office (CSO), Ministry of Statistics and Programme Implementation

• REVISED BASE YEAR OF ALL-INDIA INDEX OF INDUSTRIAL PRODUCTION FROM 2004-05 TO 2011-12

• With the release of the new series of IIP (base 2011-12), an institutional mechanism has been established for facilitating dynamic revision of the item list of products and the panel of factories, through a Technical Review Committee, chaired by Secretary, Ministry of Statistics & PI. This Committee will meet at least once a year for identifying new items that need to be included in the item basket and removing those that have lost its relevance in the industrial sector or are no longer being produced.

• Selection of items has been done at 3-digit level of NIC-2008 from the Annual Survey of Industries (ASI) data by ensuring that the selected items cover at least 80 percent of the output of each 3 digit group. In comparison, the items in 2004-05 series were selected at 2-digit level of NIC-2004. The selection at more disaggregated level will make the index more representative.

• In the revised IIP basket, data for 109 item groups is being collected in value terms. Many of these item groups have production span of more than one month for which data will now be reported on ‘work in progress’ to better represent the growth of capital goods and to avoid reporting of production figures in bulk after the completion of production and so that continuous production is accounted for and will address the fluctuations in production data

• The new series has a total of 809 items occurring in the manufacturing sector in the item basket (405 item groups), where 149 new items like Steroids and hormonal preparations, Cement clinkers, Medical/ surgical accessories, Pre-fabricated concrete blocks, refined Palm Oil have been added and 124 items such as Biaxially Oriented Polypropylene (BOPP) Films, Calculators, Colour TV picture tubes, Gutka have been deleted from the 2004-05 series which had 620 items (397 item groups) in the manufacturing sector.

• Mining and Electricity sectors will be represented by a single item index. In comparison, the 2004-05 series basket comprised of one item each for Mining and Electricity sectors. The basket of Mining Sector will now comprise of 29 minerals (Appendix II) identified by the Indian Bureau of Mines (IBM) as opposed to 62 minerals in the Mining basket of 2004-05 series. The decline in number of items is on account of 27 non-metallic minerals in the existing basket being declared as minor minerals in the MCDR Amendment Rules, 2016.

• Weights at the sectoral level for the new series of IIP have been computed using the sectoral Gross Value Added (GVA) figures from National Accounts Statistics with base 2011-12.

• The sectoral composition of the IIP is as follows-



• To reflect the increasing significance of electricity generation from renewable sources, it has been decided to include data on electricity generation figures from these sources in the new series.

• The number of source agencies reporting data for compilation of IIP in the new series will be 14 as compared to 15 in the current series. This is on account of the fact that data on ‘Iodised Salt’ in the new series will be provided by the Department of Industrial Policy and Promotion (DIPP) as O/o Salt Commissioner is not in a position to supply Salt production data after abolition of Salt Cess Act, 1953 in Finance Bill 2016.

(1) Indian Bureau of Mines (IBM),
(2) Directorate of Sugar & Vegetable Oils,
(3) Tea Board,
(4) Coffee Board,
(5) O/o the Textile Commissioner,
(6) O/o the Jute Commissioner,
(7) O/o the Coal Controller,
(8) M/o Petroleum & Natural Gas,
(9) Joint Plant Committee (Iron & Steel),
(10) Railway Board,
(11) D/o Industrial Policy & Promotion,
(12) D/o Chemicals & Petrochemicals,
(13) D/o Fertilizers and
(14) Central Electricity Authority.

• In the Mining Sector the coverage has undergone a change on account of the MCDR Amendment Rules, 2016 resulting in 27 non-metallic minerals being designated as minor minerals and which are no longer monitored by Indian Bureau of Mines.

• The re-framed Use-based classifications (UBCs) to be adopted in the new series are as follows:

i. Primary goods- consisting of Mining, Electricity, Fuels and Fertilizers. This category will replace the existing category ‘Basic goods’;
ii. Capital goods- e.g. Machinery items;
iii. Intermediate goods- e.g. yarns, chemicals, semi-finished steel items, etc.;
iv. Infrastructure/ Construction goods - e.g. paints, cement, cables, bricks and tiles, rail materials, etc. This category has been constituted to categorize items which were neither part of Consumer durables nor Intermediate goods. This categorization assumes significance in wake of growing importance of infrastructure sector;
v. Consumer durables- e.g. garments, telephones, passenger vehicles, etc.; and
vi. Consumer nondurables- e.g. food items, medicines, toiletries, etc.




• As in the 2004-05 series, the practice of using Wholesale Price Index (WPI) to deflate items for which data is reported in value terms will continue. However the number of items in the new series for which data will be captured in value terms will be 109 instead of 54 in the existing series.



Index of Eight Core Industries - Base: 2011-12

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

Industries Weight
Refinery Products 28.04%
Electricity 19.85%
Steel 17.92%
Coal 10.33%
Crude Oil 8.98%
Natural Gas 6.88%
Cement 5.37%
Fertilizers 2.63%