INDEX OF INDUSTRIAL PRODUCTION (Syllabus: GS Paper 3 – Economy)

News-CRUX-10     30th April 2024        
Samadhaan

Context: Economists predict a recent slowdown in factory output growth, projecting it to drop to approximately 4.7% in FY25 from an estimated 6.1% in FY24 due to the statistical impact of a high base and diminishing pent-up demand.


Index of Industrial Production (IIP)

  • About: IIP is an indicator that measures the changes in the volume of production of industrial products during a given period.
  • Published by: National Statistical Office (NSO), Ministry of Statistics and Programme Implementation.
  • It is a composite indicator that measures the growth rate of industry groups classified under:

oBroad sectors: Mining, Manufacturing, and Electricity.

oUse-based sectors: Basic Goods, Capital Goods, and Intermediate Goods.

oBase Year: 2011-2012.

  • Significance of IIP: It is used by government agencies including the Ministry of Finance, the Reserve Bank of India, etc, for policy-making purposes.
  • IIP remains extremely relevant for the calculation of the quarterly and advance GDP (Gross Domestic Product) estimates.
Samadhaan