Index of Industrial Production(IIP)

News:India’s industrial sector production(IIP) has contracted by 1.1% in August when compared to the production in the same month in 2018.

Facts:

About IIP:

• The Index of Industrial Production (IIP) is a composite indicator that measures changes in the volume of production of a basket of industrial products.
• The index is compiled and published monthly by the Central Statistical Organisation (CSO),Ministry of Statistics and Programme.
• It is implemented six weeks after the reference month ends, i.e a lag of six weeks.
• The Base Year of the Index of Eight Core Industries has been revised from the year 2004-05 to 2011-12 from April, 2017.

There are two ways in which IIP data can be viewed:

• Broad sectors: The first is to look at sectoral performance.In this the whole industrial economy is divided into three sectors; manufacturing (with a weight of 77.63 % in the index), mining (14.37 %) and electricity (7.99 %).
• Use-based sectors: The second way is to look at the way such industrial products are used namely Basic Goods, Capital Goods and Intermediate Goods.

Core industries:

• Core industry can be defined as the main industry which has a multiplier effect on the economy.
• The Eight Core Industries comprise 40.27% of the weight of items included in the Index of Industrial Production (IIP).
• The eight Core Industries in decreasing order of their weightage are(a) Refinery Products (b)Electricity (c)Steel (d)Coal (e)Crude Oil (f)Natural Gas (g)Cement and (h)Fertilizers.

Additional information:

About CSO:

• The Central Statistics Office(CSO) is a governmental agency in India under the Ministry of Statistics and Programme Implementation.
• It is responsible for coordination of statistical activities in India and evolving and maintaining statistical standards.