India, May 26 -- The Government of India has issued a release:
Summary
Item Basket
Item group in IIP 2011-12 series
Item groups in IIP 2022-23 series
Mining and Quarrying
1 (29)
3 (44)
Manufacturing
405
455
Electricity & Gas supply
1
3
Water supply, Sewerage & Waste Management
--
2
Number of total item groups
407
463
The Ministry of Statistics and Programme Implementation (MoSPI) is undertaking the revision of base year of the All India Index of Industrial Production (IIP) from 2011-12 to 2022-23 and plans to release the new series on 1st June, 2026. The MoSPI has compiled and is releasing, through this press release, the FAQs to assist users and other stakeholders in understanding the various aspects of compilation of IIP series.
FAQs on New IIP Series with Base year 2022-23
Ans: The Index of Industrial Production (IIP) is a composite indicator designed to measure the changes in the volume of the production of Item basket over a period of time with respect to its base year.
Ans: The Index of Industrial Production (IIP) is compiled and released by the National Statistics Office (NSO), Ministry of Statistics and Programme Implementation (MoSPI).
Ans: The IIP will be released every month with a time lag of 28 days from the reference month.
Ans: The base year is a chosen year taken as a reference point (index 100) to compare production over time. It is important because by comparing current data with the base year, we can know whether production has increased or decreased. Thus, the base year serves as a standard reference.
Ans: The base year should represent a relatively stable economic period and align with the base year of other macroeconomic indicators such as GDP and WPI. Accordingly, the FY 2022-23 has been selected as the base year.
Ans: The IIP base year is revised to reflect structural changes in the economy, technological progress, and the growth of new industries and products. Revising the base year ensures that the index accurately represents current production patterns and provides more reliable data for economic analysis and policy-making.
Ans: This is the 10th revision of base year of All India IIP. The first IIP was prepared with base year 1937 and thereafter the base year has been revised successively to 1946, 1951, 1956, 1960, 1970, 1980-81, 1993-94, 2004-05 and 2011-12.
Ans: The new IIP series (2022-23) keeps the existing sectors of Mining, Manufacturing, and Electricity. However, it expands the scope by including Gas Supply and Water Supply, Sewerage & Waste Management activities, giving a broader and more accurate picture of industrial production. In the Mining sector, the new series also includes minor minerals and rare earth mineral along with major minerals, making the index more comprehensive.
Ans: The item basket for the Manufacturing sector is selected from the Annual Survey of Industries (ASI) data, focusing on items that significantly contribute to industrial output. For the new IIP series (base year 2022-23), ASI 2021-22 and ASI 2022-23 data have been used, and a structured methodology is followed to ensure representativeness and robustness.
This methodology ensures that the Item basket is comprehensive, representative, and aligned with current industrial structure.
Ans: The Item basket for sectors other than Manufacturing is selected based on the nature of activities and key measurable outputs of each sector. In certain cases, consultation with concerned Ministries/Departments is also undertaken-for example, MCDR minerals were identified with inputs from the Indian Bureau of Mines. Following are the sector wise details of the item/s identified:
Ans: The "n.e.c." categories refer to "not elsewhere classified" product groups under National Product Classification for Manufacturing Sector (NPCMS) 2011 classification. These categories generally contain miscellaneous or non-specific products.
Annual Survey of Industries (ASI) is the basis for Item basket selection for manufacturing sector of the IIP. In ASI, NPCMS, 2011 is used for collecting item wise output and has a provision of n.e.c. category for reporting miscellaneous or non-specific product
Ans: As mentioned, since the n.e.c. items do not represent a specific product, the items were removed for the selection frame for the Item basket in 2011-12 series. The outputs of these items were then distributed proportionately among other items in the industry group. However, their exclusion as distinct items may lead to partial underrepresentation of certain niche or innovation-driven segments of manufacturing. The redistribution of the output also leads to increasing the impact of some items that would otherwise be having lower weights.
In new series, n.e.c. items are retained for the selection of the Item basket for All India IIP with base year 2022-23. To operationalize this, once n.e.c. item selected, corresponding factories reporting it, were revisited by field officers to identify specific items that fall under n.e.c. categories and include them appropriately in the Item basket. Overall, incorporating these items strengthens the IIP by ensuring that emerging, diversified and previously under-represented products are now part of measurement system.
Ans: The item groups were formed by aggregating products based on similarity within the industry group to ensure consistency, comparability, and operational feasibility in monthly data reporting.
Ans: Yes, electricity generation through renewable sources has been separately identified in the new IIP series.
Ans: Weights indicate the relative importance of sectors, industry groups, or items in the overall industrial production based on their contribution to Gross Value Added (GVA) or Gross Value of Output (GVO).
Ans: The sectoral level weights in the IIP are derived based on the share of each sector in the total Gross Value Added (GVA) at current prices in FY 2022-23, as per the National Accounts Statistics with base year 2022-23.
Ans: The total weight of the Manufacturing sector is distributed across NIC 2-digit industry groups in proportion to their respective GVA in ASI 2022-23. The weights derived at the NIC 2-digit level are further distributed to the 3-digit in proportion to their respective GVA figures in ASI 2022-23. The NIC 3-digit level weights are then distributed among the NIC 4-digits using their shares in GVA figures in ASI 2022-23.
Ans: The 4-digit industry weights are distributed among the selected items in proportion to their Gross Value of Output (GVO) contribution within the respective 4-digit industry group as per ASI 2022-23.
Ans: Below is the comparison in the Item basket of IIP new series with old series:
Ans: In the new IIP series, a total of 120 new item groups have been added. Few examples are Cards with a magnetic stripe (e.g. Debit card, Credit card), CCTV camera, Articles of non-woven textiles, Parts of aircraft and spacecraft, Stents, Vaccine (other than veterinary).
Ans: In the new IIP series, a total of 64 item groups have been dropped. Few examples are Kerosene, Fluorescent tubes and CFLs, Tubes for bicycle/ tricycle/ rickshaw tyres. Tubes for LMV tyres, Printing machinery, Sewing machines.
Ans: An expanded Item basket improves representativeness, captures diversification in industrial production, and reflects emerging industrial products and technologies.
Ans: Yes. At the time of launching the new series of the IIP with base year 2022-23, a linking factor will be released at the sectoral level to link the previous series with the new series.
The linking factor is calculated using the Geometric Mean (GM) method as follows:
Linking Factor GM of the old series during new base yearGM of the new series during new base year
Ans: The six use-based categories of the 2011-12 series will continue in the new series of IIP. Though, the categories themselves were not changed; individual item classifications were reviewed in detail and updated under the use-based classification. The six use-based categories are as under:
Ans: Similar to previous series 2011-12, a hybrid approach in capturing the industrial output will be used. Volume measures are used for capturing output of homogeneous item groups and Value-based indicators are used where products are heterogeneous or where quality variations make quantity comparisons difficult. For items where the period of production is more than a month, the "work in progress" in value terms is to be taken as the measure of output.
Ans: Yes. To address the challenges of prolonged non-response or closed factory, provision of substitution of the factories has been kept in the new series of IIP.
Ans: The Laspeyres fixed based type index formula will be used to compile the Index:
Where,
Wi Weight assigned to item i in the base year
Ri Production relative of item i, calculated as
Pi,t Production of item i in the current period (t)
Pi,0 Production of item i in the base period
Ans: The latest version of NIC i.e. NIC 2025 will be used to disseminate the Index in the new series of IIP.
Ans: At present the Wholesale Price Index (WPI) is being used as deflator for value-based items. After release of Output Producer Price Index (Output PPI) the same will be utilized after examining its stability.
Ans: If a factory is non-responsive for less than 6 months, imputation methodology as recommended by the TAC-IIP will be used.
Ans: The terms of reference of the TAC-IIP included carrying out in-depth examination of the existing IIP framework and recommending necessary methodological and structural changes for base year revision.
Ans: The methodology for compilation of chain-linked indices has been examined and recommended by the TAC-IIP. It has also been recommended that these indices may be brought out internally and a pilot may be released only after observing their stability and resilience.
Ans: Seasonal adjustment requires a sufficiently long and stable time series to reliably identify and estimate recurring seasonal patterns. In the new IIP series, seasonal adjustment would be taken up once sufficient years' time series data becomes available.
Ans: The IIP data is released through official press release and publication of the Ministry of Statistics and Programme Implementation (MoSPI). The IIP data can be accessed from the e-Sankhyiki Portal (MoSPI) at: https://esankhyiki.mospi.gov.in
Disclaimer: Curated by HT Syndication.
