INDEX OF INDUSTRIAL PRODUCTION (IIP)

• IIP Overview:

            o IIP measures changes in industrial production volume.
            o Published monthly by the National Statistical Office (NSO).

• Composition of IIP:

            o Composites include Mining, Manufacturing, and Electricity sectors.
            o Also categorized by use-based sectors: Basic Goods, Capital Goods, Intermediate Goods.

• Base Year: 2011-2012.
• Significance of IIP:
  o Used for policymaking by government agencies like Ministry of Finance and Reserve Bank of India.
  o Crucial for calculating quarterly and advance GDP estimates.
• Eight Core Sectors (with weightage):
  Weightage based on higher to lower
  o Refinery Products
  o Electricity
  o Steel
  o Coal
  o Crude Oil
  o Natural Gas
  o Cement
  o Fertilizers
  o These sectors constitute 40.27% of the IIP’s weighted items.
• In simple points, IIP is a monthly indicator measuring industrial production changes, important for economic policy and GDP estimation, with eight core sectors holding significant weightage in the index.