India - Industrial Production

Concept: Index of Industrial Production (IIP) is an abstract number, the magnitude of which represents the state of production of items individually and collectively as industry group for a given period of time. The inputs and technology used in the production of items under reference may or may not be the same. Strictly speaking, the IIP is a short-term indicator of industrial growth for the organized sector till the results from the Annual Survey of Industries (ASI) becomes available. This indicator is of paramount importance to the Government for planning purposes and is also being extensively used by various organizations, including Industry, Research, and Academic Institutions.

Definition: The Index of Industrial Production is a quantitative index, the production of the items being expressed in physical terms. The Index is compiled by taking into account the quantities of items produced during the current month, vis-à-vis the average monthly production in the base year.

Classification: The current series of IIP (base 2011-12) follows the National Industrial Classification 2008 (NIC-2008) which is based on ISIC-Rev. 4 published by UNSD.

Data Collection Methods: The manufacturing sector's data for compilation of IIP is supplied regularly on monthly basis by 14 source agencies located in various Ministries/ Departments/ Subordinate Offices of the Government of India. For Mining Sector the index is compiled by the Indian Bureau of Mines (IBM), Ministry of Mines. IBM collects data in respect of metallic and non-metallic minerals under the MCDR act, 2016. For the Electricity Sector, the monthly production data are collected by the Central Electricity Authority, Ministry of Power under the Electricity Act, 2003. These organisations collect the data through various methods including mail, questionnaires, paper forms at the level of individual establishments. Only item-wise total production of all the units and not the production of individual factories/ establishments is reported by the source agencies to CSO for compilation of IIP.

Nature of Indicators Used: The basic data used for compilation of the index is the production in terms of quantity. However, there are certain items especially capital goods such as Machinery, Machine Tools, Ship Building etc. on which the production data is furnished in value terms. In order to remove the effect of price rise from the index, the production figures of such items are deflated on the basis of Wholesale Price Indices (Base 2011-12), compiled by the Office of Economic Adviser, Ministry of Commerce and Industry, before compilation of index.

Data is subject to revisions.

For more information, please follow: http://mospi.nic.in/new-series-iip-2011-12