The Index of Industrial Production (IIP) is a monthly indicator of changes in the volume of industrial output. It uses 2022-23 = 100 as its base year.
What the Index Shows
Industrial output: It tracks whether production has increased or decreased compared with the same month of the previous year.
Early signal: It gives an early view of industrial activity before full quarterly Gross Domestic Product estimates are released.
Major Sectors
Manufacturing: It covers factory production and is the largest part of the index.
Mining and quarrying: It covers extraction of minerals and fuels.
Electricity and gas supply: It covers power generation and gas supply.
Water supply and waste management: It covers water services, sewerage, and waste management.
Why It Matters
Policy signal: The Reserve Bank of India and the government use IIP trends to assess industrial conditions.
GDP input: The National Statistical Office uses IIP as an input for quarterly GDP estimates.