Index Of Industrial Production (IIP)

The Index of Industrial Production (IIP) is widely used in measuring the industrial growth of the State.
It is ashort-term micro economic indicator.
- Tll the results from Annual Survey of Industries (ASI) and National Accounts Statistics (Eg: GDP) are available.
It is an effective tool to measure the trend of current industrial production.
The Index measures the industrial production for the period under review, usually a month, as against the reference period.
There is a lag of six weeks in the publication of the IIP index data after the reference month ends.
It is currently calculated using 2011-2012 as the base year.
The index is released by the Central Statistics Office (CSO) of the Ministry of Statistics and Programme Implementation.

Index of Industrial Production (IIP) Index Components

IIP is a composite indicator that measures the growth rate of industry groups classified under,
- Broad sectors: Mining (14.4%), Manufacturing (77.6%) and Electricity (8%)
- Use-based sectors: Basic Goods, Capital Goods and Intermediate Goods etc.

It is used by government agencies including the Ministry of Finance, the Reserve Bank of India, etc, for policy-making purposes.
IIP is the only measure on the physical volume of production.
It forms a crucial input for compilation of Gross Value Added (GVA) of the manufacturing sector in the Gross Domestic Product (GDP) on a quarterly basis.
IIP remains extremely relevant for the calculation of the quarterly and advance GDP estimates.
It is also used extensively by financial intermediaries, policy analysts and private companies for various analytical purposes.

03 september 2022: India’s eight core sectors’ output growth dropped to a six-month low of 4.5% in July from 13.2% in June, with crude oil and natural gas output declining from a year ago and growth in sectors like cement and electricity dropping to around 2%.