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Informist, Wednesday, Jan. 28, 2026

 

NEW DELHI – The Ministry of Statistics and Programme Implementation Wednesday released a discussion paper outlining the proposed methodology for a seasonal adjustment of Index of Industrial Production as part of the new series. The ministry bas sought comments on the methodology by Feb. 12.

 

The ministry is currently working of the revision of IIP. A new series for IIP with 2022-23 (Apr-Mar) as the base year is scheduled to be released on May 28. The current IIP base year is FY12. The revision of the IIP series will follow similar exercise for the CPI and GDP, whose new series will be released on Feb. 12 and Feb. 27, respectively.

 

"Although, industrial production is significantly influenced by seasonality and calendar effects, India has not attempted to publish seasonally adjusted IIP series so far and users were expected to undertake such analysis separately using methods and tools of their choice," the ministry said in a release. "However, in light of an increasing demand for a seasonally adjusted IIP among users, MoSPI has prepared a Discussion Paper 3.0: Seasonal Adjustment of Index of Industrial Production which outlines the proposed methodology for seasonal adjustment of IIP."

 

IIP in India is significantly influenced by calendar-related effects such as days in the month, change in holidays and festivals. This poses unique challenges for the seasonal adjustment of industrial production data and their influence on production cannot be overlooked, the ministry said. Statistical organisations of countries such as the US, China, France, the UK, South Africa, and members of the European Union regularly release seasonally adjusted IIP of their countries.

 

Earlier, it was left to users to calculate seasonally adjusted IIP on their own using methods and tools of their choice. "This, however, was beyond the realms of ordinary users who are not equipped with sophisticated econometric skills to do this on their own," the ministry said. But demand for such data has increased and multilateral institutions have also made explicit recommendations in favour of this practice. "Therefore, the issue was deliberated at length in the Technical Advisory Committee for Base Year Revision of All-India Index of Industrial Production (TAC-IIP)."

 

If the ministry decides to release seasonally-adjusted IIP with base year FY23, the exercise would only be undertaken after obtaining five years of data, the ministry said. Data released Thursday by the statistics ministry showed IIP growth rose to 7.8% in December, the highest since October 2023.

 

The ministry carried out an exercise to calculate seasonal adjustment on past IIP data, the monthly data for the base year FY12 up to March was used. Seasonal adjustment was done at the sectoral and general indices level and all gazetted holidays of the government since April 2012 till March were plotted. This list was also supplemented by major regional holidays like Ganesh Chaturthi, Onam, and Gudi Padwa that may have affected the production for the month.

The results from the seasonal adjusted exercise showed that there was no statistically significant calendar effect in any of the components but there was significant calendar effect when Diwali was taken as the only calendar variable. The quality of seasonal adjustment performed was found to be good, the ministry said.

 

"Most of the outliers in the series correspond with the COVID 19 period which experienced significant disruptions in industrial activity of the country," the ministry said. "Hence, there are economic reasons for the outliers and they cannot be attributed to data errors."

 

The ministry is seeking stakeholders feedback on the use of software for seasonal adjustment, identifying important holidays for the construction of calendar regressors, treatment of COVID-19 period in the process, dissemination process of the seasonally adjusted series, and the minimum length of time series for seasonal adjustment.  End

 

Reported by Shubham Rana

Edited by Akul Nishant Akhoury

 

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