Definition
Index of Industrial Production (IIP) is an official indicator used to measure the level of industrial activity in the country over time.
Exam-ready points
- IIP is compiled and released every month by the National Statistics Office (NSO) under the Ministry of Statistics and Programme Implementation (MoSPI).
- The current base year for IIP series is 2011-12.
- It covers three broad sectoral components: Manufacturing (weight roughly 77.63%), Mining (14.37%), and Electricity (7.99%).
- It is also classified by use-based categories: Primary Goods, Capital Goods, Intermediate Goods, Infrastructure/Construction Goods, Consumer Durables, and Consumer Non-durables.
- For revision, remember that IIP measures short-term volume changes, not total financial profits or nominal values.
Common mistakes
- Do not confuse IIP with the Consumer Price Index (CPI), which tracks inflation rather than production volume.
- Do not forget that Manufacturing carries the overwhelming majority of the index weight.
- Do not treat IIP as an annual GDP estimate; it is a monthly volume index.
Difficulty
Foundation
Revision time
About 10 minutes
Self-check questions
- Which agency compiles and releases the monthly IIP data in India?
- What is the current base year for India’s IIP calculation?
- Which three broad sectors form the sectoral classification of IIP, and which one has the highest weight?
Source metadata
Authority: Press Information Bureau / Ministry of Statistics and Programme Implementation (MoSPI)
Official source: https://www.pib.gov.in/PressReleasePage.aspx?PRID=2290419&lang=1®=3