Index of Industrial Production (IIP): Definition, Composition

To measure economic performance of industrial sector of economy, the Index of Industrial Production (IIP) was first released with 1937 as base year. IIP measures the growth of mainly three sectors of economy viz Manufacturing, Mining and Electricity. It is published six weeks after the reference month ends. It is calculated and released on monthly basis. it measures the short term changes in the volume of production of basket of industrial goods during the given period.

Who publishes Index of Industrial Production (IIP)?

The first official series of IIP with base year 1937 was published by the Office of the Economic Advisor, Ministry of Commerce and Industry. But since the establishment of Central Statistical Organization (CSO) in 1951, the responsibility for compilation and publication of IIP has been vested with CSO. It compiles data from 16 different departments/organisations/ministries that are responsible for collection of data from manufacturing organisations.

What is the current base year of IIP?

The current base year of IIP is 2011-12. Earlier the base year was 2004-05. It was also suggested to switch to new base year after every five year.

Number of items in IIP

There are total of 809 items considered in IIP which are further sub-divided into 405 item groups.

Weightage of Various Sectors in IIP

The sectoral composition of the IIP is:

  • Manufacturing – 77.63%
  • Mining – 14.37%
  • Electricity – 7.99%

Index of Industrial Production

The eight core industries comprises of 40.27% of items included in IIP.

IIP uses the National Industrial Classification (NIC) 2008 for the purpose of classification of industrial production. It covers entities in the organized sector units registered under the Factories Act, 1948.

Current Trends

The country’s index of industrial production (IIP) grew 3.6 per cent to 128.5 in the month of October, according to the data released by the Ministry of Statistics & Programme Implementation (MoSPI)..


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