The government has launched a new series of Index of Industrial Production (IIP) with a base year 2011-12 with an aim to map economic activities more accurately. Currently, the IIP is calculated on base year of 2004-05. The new IIP base year aligns with the base year of other macroeconomic indicators such as the Gross Domestic Product (GDP). The IIP gives a broad outlook on output of various types of goods like basic, consumer and capital ones, which helps in gauging the level of economic progress and investments in the economy.
Below are the key changes made in the IIP:
1. The new series has a total of 809 items in the manufacturing sector in the item basket (405 item groups). The 2004-05 series had 620 items (397 item groups).
2. A total of 149 new items like steroids and hormonal preparations, cement clinkers, medical/surgical accessories, pre-fabricated concrete blocks and refined palm oil have been added while 124 items such as biaxially oriented polypropylene (BOPP) films, calculators, colour TV picture tubes, gutka have been deleted.
3. The new series will include data on electricity generation from renewable sources too.
4. For capital goods, the data in the new series will now be captured in terms of ‘work in progress‘ to better represent the growth of capital goods and to avoid reporting of production figures in bulk after the completion of production.
5. The use-based classification has been re-framed by replacing ‘basic goods’ with ‘primary goods’ and introducing a new ‘infrastructure/construction goods’ category.
6. There has been an increase in number of factories in panel for reporting data. The closed factories have been removed.