The Index of Industrial Production (IIP) is a monthly composite indicator measuring short-term quantitative changes in the volume of industrial output relative to a fixed baseline year.
Relevance: It serves as a primary macroeconomic indicator for industrial performance and acts as a key input for quarterly GDP estimations by National Accounts.
Publishing Agency: Economic Statistics Division (ESD) / National Statistical Office (NSO), Ministry of Statistics and Programme Implementation (MoSPI).
Historical Background
First compiled in India with 1937 as the base year.
Periodically updated across baseline years: 1970, 1980–81, 1993–94, 2004–05, 2011–12, and revised in 2026 to 2022–23 based on the Technical Advisory Committee (TAC-IIP) recommendations.
Key Components or Elements
Broad Sectoral Classification (4 Broad Sectors in 2022–23 Series):
Manufacturing Sector: Retains the highest weightage (~76%) in the IIP basket.
Mining & Quarrying Sector.
Electricity & Gas Supply Sector.
Water Supply, Sewerage & Waste Management Sector: Newly added/expanded broad category to broaden coverage.
Use-Based Classification (6 Categories):
Primary Goods: Natural raw materials and basic fuels.
Capital Goods: Physical machinery and plant equipment used in manufacturing.
Intermediate Goods: Semi-processed inputs for final goods production.
Infrastructure / Construction Goods: Building materials like steel, cement, and tiles.
Consumer Durables: Long-lasting manufactured consumer products.
Consumer Non-Durables: Daily FMCG products and non-durable goods.
Recent Changes and Updates
Structural and Policy Reforms:
Base Year Shift: Revised from 2011–12=100 to 2022–23=100.
Expanded Item Basket: Product basket expanded to 1,042 products mapped to 463 item groups (up from 839 items and 407 groups under 2011–12 series).
Deflator Upgrade: Adoption of Output PPI instead of WPI for 234 value-based item groups (comprising 36.02% total weight) to capture producer-level price structures accurately.