India is revising the base year of the Index of Industrial Production (IIP) to 2022-23 to better capture structural and technological shifts in the industrial sector.

What is IIP?

• The Index of Industrial Production (IIP) is a monthly statistical measure of changes in the volume of production of a basket of industrial products.
• As per International Recommendations for the Index of Industrial Production (IRIIP) guidelines, the IIP should include sectors like Mining and Quarrying, Manufacturing, Electricity, Gas, Water Supply, and Waste Management
• IIP data serves as a crucial input for calculating quarterly Gross Value Added (GVA) and aids policymakers, researchers, and businesses.

About All-India IIP

• The All-India IIP tracks industrial output across the country.
• Origin: The compilation started in 1937 with 15 major industries, covering over 90% of selected industry production.
  • Since 1950, it has been released as a monthly series. 
• Compiled by: Central Statistics Office (CSO), which operates under the Ministry of Statistics and Programme Implementation (MoSPI)
• Updated list: Currently IIP Covers over 830 Items.
  • Removing outdated items (e.g., CFLs, kerosene) and adding modern items (e.g., laptops, vaccines, aircraft components).
  • Inclusion of minor minerals, gas supply, and other emerging sectors.
  • Systematic substitution of closed or altered factories, seasonal adjustments, and integration of GST and digital data sources for better accuracy.
• Need for Revision: With a market-oriented economy and fast-evolving industries, the statistical system must capture accurate and timely data.
  • Base year revision ensures the IIP reflects new products, obsolescence of old items, sectoral weights, and structural changes in the economy.

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About IIP Base Year

• The base year is the reference year against which current industrial output is measured.
• India has revised the IIP base year nine times since 1937, with the latest revision aligning with the GDP base year 2022-23. 

These changes aim to provide realistic, timely, and comprehensive insights into India’s industrial performance, supporting informed policy decisions and investment planning.

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