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Informist, Monday, May 25, 2026

 

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--MoSPI: New IIP series to include minor minerals, rare earth minerals 
--MoSPI: New IIP series to include gas supply, water supply 
--CONTEXT: MoSPI to release new IIP series with FY23 base year on Jun 1 
--MoSPI: New IIP basket consists of 1,042 products mapped to 463 item groups 
--MoSPI: New IIP to continue with six use-based classification categories 
--MoSPI: New IIP to cover 4 broad sectors vs 3 in previous series 
--MoSPI: Expert panel recommended introducing chain-linked IIP 

 

NEW DELHI – The new Index of Industrial Production, with 2022-23 (Apr-Mar) as the base year, will have a wider scope and a higher number of tracked items, helping the government better monitor the health of the industrial sector. 

 

According to the Ministry of Statistics and Programme Implementation, the new IIP series will for the first time track production in minor minerals, rare earth minerals, gas supply, water supply, and sewerage and waste management. The new series will cover four broad sectors: mining and quarrying, manufacturing, electricity and gas supply, and water supply, sewerage, and waste management. The FY12 series only covered mining, manufacturing, and electricity sectors.

 

The revised basket will consist of 1,042 products mapped to 463 item groups, against 839 items tracked in the last series, which had FY12 as the base year. The revision of the IIP follows similar exercises carried out earlier this year for the CPI and GDP, key indicators to track prices and activity in the economy. 

  

The IIP measures short-term industrial performance and is used for policy formulation, GDP estimation, and economic analysis. The index is being released as a monthly series since 1950. The base year adopted for the first IIP series was 1937, which has since been revised on multiple occasions.  

 

Industrial output, as measured by the FY12 series IIP, grew 4.1% in March. The ministry will release IIP data for April based on the new series on Jun. 1 at 1600 IST.

 

"Generation of electricity and distribution of gaseous fuels may be included in the new series of IIP," the Technical Advisory Committee for IIP base year revision said in the report. "The generation of electricity by non-renewable and renewable sources may be disseminated separately."

 

In terms of the use-based classification, the committee recommended continuing with the six categories: primary goods, capital goods, intermediate goods, infrastructure and construction goods, consumer durable goods, and consumer non-durable goods. 

 

The committee recommended that the output Producer Price Index, once available, should be adopted as the preferred deflator for the new IIP series. "Until then, the WPI may continue to be used as an interim measure," the committee said. 

The committee also recommended the introduction of chain-linked IIP in addition to the fixed base index. A chain-linked IIP would provide annual weights which are more up to-date and more relevant for capturing extant industrial structure, the committee said. This will also reduce the need for frequent rebasing revisions, and allow introduction of new items and factories on an annual basis to capture the intermittent changes in the product basket or factory panel, it said. 

 

"During the deliberations, the Committee noted that in a rapidly evolving industrial environment, characterised by technological change, product diversification, and shifting demand patterns, which the fixed weights may not adequately capture," the report said. "In this context, the chain-linked approach was recognised as a conceptually superior method, as it allows for periodic updating of weights and better reflects recent changes in industrial activity."

 

Certain recommendations of the committee are forward-looking that may take time to implement, including development of seasonally-adjusted IIP. The panel also suggested developing business registries through the use of goods and services tax data, which has a potential to significantly improve IIP, the panel said.  End

 

IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT

 

Reported by Shubham Rana

Edited by Vandana Hingorani

 

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