INDEX OF INDUSTRIAL PRODUCTION
- October 30, 2020
- Posted by: admin1
- Category: DPN Topics
Context: India’s eight core industry sectors shrank just 0.8% in September on a year-on-year basis, recording their lowest contraction since March 2020.
Index of Industrial Production
- The Index of Industrial Production (IIP) is an index that shows the growth rates in different industry groups of the economy in a fixed period of time.
- It is compiled and published monthly by the Central Statistical Organization (CSO), Ministry of Statistics and Programme Implementation.
- IIP is a composite indicator that measures the growth rate of industry groups classified under:
Broad sectors: Mining, Manufacturing, and Electricity.
Use-based sectors: Basic Goods, Capital Goods, and Intermediate Goods.
- Base Year for IIP is 2011-2012.
- The eight core industries of India represent about 40% of the weight of items that are included in the IIP.
Significance of IIP:
- IIP is the only measure on the physical volume of production.
- It is used by government agencies including the Ministry of Finance, the Reserve Bank of India, etc, for policy-making purposes.
- IIP remains extremely relevant for the calculation of the quarterly and advance GDP estimates.