Index of Industrial Production (IIP)

Subject – Economy

Context – Core sector logs 9.4% growth

Concept –

It is a composite indicator that measures the short-term changes in the volume of production of a basket of industrial products during a given period with respect to that in a chosen base period.
It is compiled and published monthly by the National Statistical Office (NSO), Ministry of Statistics and Programme Implementation six weeks after the reference month ends.
CSO revised the base year of the all-India Index of Industrial Production (IIP) from 2004-05 to 2011-12.
The IIP number measures the industrial production for the period under review, usually a month, as against the reference period.
IIP is a key economic indicator of the manufacturing sector of the economy.
There is a lag of six weeks in the publication of the IIP index data after the reference month ends.
Sectoral Composition of the IIP in decreasing order of weight: Manufacturing> Mining>Electricity.
Electricity, crude oil, coal, cement, steel, refinery products, natural gas, and fertilizers are the eight core industries that comprise about 40 per cent of the weight of items included in the IIP.
The eight core industries in decreasing order of their weightage: Refinery Products (28.04 %)> Electricity (19.85 %)> Steel (17.92 %) > Coal (10.33 %)> Crude Oil (8.98 %)> Natural Gas (6.88 %)> Cement (5.37 %)> Fertilizers (2.63 %).
Refinery Products has the highest weightage followed by electricity generation.