Index of Industrial Production:
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IIP is an indicator that measures the changes in the volume of production of industrial products during a given period.
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It is compiled and published monthly by the National Statistical Office (NSO), Ministry of Statistics and Programme Implementation.
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It is a composite indicator that measures the growth rate of industry groups classified under:
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Broad sectors, namely, Mining, Manufacturing, and Electricity.
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Use-based sectors, namely Basic Goods, Capital Goods, and Intermediate Goods.
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The weights of sectors are :
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Manufacturing – 77.63%,
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Mining – 14.37%,
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Electricity – 7.99%
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Base Year for IIP is 2011-2012.
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Significance of IIP:
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It is used by government agencies including the Ministry of Finance, the Reserve Bank of India, etc, for policy-making purposes.
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IIP remains extremely relevant for the calculation of the quarterly and advance GDP estimates.
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Eight Core Sectors:
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These comprise 40.27% of the weight of items included in the Index of Industrial Production (IIP).
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The eight core sector industries in decreasing order of their weightage: Refinery Products> Electricity> Steel> Coal> Crude Oil> Natural Gas> Cement> Fertilizers.
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