Index of Industrial Production (IIP)
- 14 Apr 2025
In News:
The Index of Industrial Production (IIP), a key barometer of industrial activity in India, registered a growth of just 2.9% in February 2025, the slowest pace in six months. This was below market expectations of around 4% and reflects broad-based slowdown across sectors.
About the IIP
- Published by: Central Statistics Office (CSO), Ministry of Statistics and Programme Implementation (MoSPI)
- Base Year: 2011–12
- Purpose: Measures the short-term changes in volume of production in industrial sectors.
Sectoral Composition and Weights
Sector Weight in IIP No. of Items
Manufacturing 77.63% 809
Mining 14.37% 29
Electricity 7.99% 1
Sector-wise Performance (YoY in February 2025)
Sector Feb 2025 Growth Feb 2024 Growth
Mining 1.6% 8.1%
Manufacturing 2.9% 4.9%
Electricity 3.6% 7.6%
Use-Based Classification Performance
Category Feb 2025 Growth Feb 2024 Growth
Capital Goods 8.2% 1.7%
Intermediate Goods 1.5% —
Consumer Non-Durables -2.1% -3.2%
Observation: Capital goods were the only category to show robust growth. All other segments registered deceleration.
Eight Core Industries (Weight in IIP: 40.27%)
In decreasing order of weight:
- Refinery Products
- Electricity
- Steel
- Coal
- Crude Oil
- Natural Gas
- Cement
- Fertilisers
Key Concerns Highlighted
- Slowing growth across mining, manufacturing, and electricity sectors
- A high base effect from the previous year
- A decline in month-on-month output after five months of sustained growth
- Consumer non-durables in continued contraction, indicating weak rural/household demand
Index of Eight Core Industries (ICI) increases by 7.8% (provisional) in Nov 2023 as compared to the Index of Nov 2022 (PIB)
- 30 Dec 2023
Why is it in the News?
The combined Index of Eight Core Industries (ICI) increased by 7.8 per cent (provisional) in November 2023 as compared to the Index of November 2022.
About the Index of Industrial Production (IIP):
- The IIP is a comprehensive index that assesses the growth rate of industry groups, categorized into:
- Broad sectors: Mining, Manufacturing, and Electricity.
- Use-based sectors: Basic Goods, Capital Goods, and Intermediate Goods.
- In India, the initiation of computing the IIP predates international recommendations. The Central Statistical Organization, now known as the National Statistics Office (NSO), assumed the responsibility for compilation and publication in 1951.
- The Ministry responsible for this process is the Ministry of Statistics and Programme Implementation.
Key Information:
- Base Year: The base year was changed to 2011-12 from 2004-05 in the year 2017.
- Sources of Data: The NSO compiles the IIP using secondary data from 14 source agencies across various Ministries/Departments and their attached/subordinate offices.
- The Department of Industrial Policy and Promotion (DIPP) contributes a significant portion of the data for the calculation.
- Utilization of IIP Data: The Industrial Production Index (IIP) is a valuable resource employed by several entities, including government bodies like the Ministry of Finance and the Reserve Bank of India (RBI), as well as private firms and analysts.
- It serves as a critical tool for analytical purposes.
- Additionally, the data is instrumental in computing the quarterly Gross Value Added (GVA) of the manufacturing sector within the Gross Domestic Product (GDP).
About the Index of Eight Core Sectors:
- The Index of Eight Core Industries (ICI) assesses the combined and individual production performance of eight vital industries.
- Together, these sectors account for 40.27% of the items measured in the Index of Industrial Production (IIP).
- Listed in descending order of their weightage, the eight core industries are:
- Refinery Products, Electricity, Steel, Coal, Crude Oil, Natural Gas, Cement, and Fertilizers.