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 National Statistical Office (NSO), Ministry of Statistics and Programme
  • IIP is a composite indicator that measures the growth rate of industry groups classified under:
    • Broad sectors, namely, Mining, Manufacturing, and
    • Use-based sectors, namely Basic Goods, Capital Goods, and
Intermediate Goods.
  • The eight core sector industries represent about 40% of the weight of items that are included in the
    • 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 %).
  • Base Year for IIP calculation is 2011-2012.
Significance of IIP:
  • IIP is the measure on the physical volume of
  • It is used by government agencies including the Ministry of Finance, the Reserve Bank of India, etc, for policy-making
  • IIP remains extremely relevant for the calculation of the quarterly and advance Gross Domestic Product (GDP)
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