Union Budget 2019-20: What is Index of Industrial Production and how it helps govt chart future course of action

IIP is a composite indicator that measures the changes in the volume of production of a basket of industrial products during a given period with respect to the volume of production

FP Research June 21, 2019 14:33:36 IST
Union Budget 2019-20: What is Index of Industrial Production and how it helps govt chart future course of action
  • The IIP is computed and published by the Central Statistical Organisation (CSO) on a monthly basis

  • The CSO revised the base year of IIP from 2004-05 to 2011-12 to reflect changes in the industrial sector

  • For the month of April, India's IIP expanded at 3.4 percent in April from 0.3 percent a month ago, data released by NSO showed

The Index of Industrial Production (IIP) is a composite indicator that measures the changes in the volume of production of a basket of industrial products during a given period with respect to the volume of production in a chosen base period.

The IIP is computed and published by the Central Statistical Organisation (CSO) on a monthly basis. The CSO revised the base year of IIP from 2004-05 to 2011-12 to reflect changes in the industrial sector. It is now aligned with the base year of other indicators like the Wholesale Price Index (WPI) and Gross Domestic Product (GDP).

For the month of April, India's IIP expanded to 3.4 percent in April from 0.3 percent a month ago, according to data released by the National Statistical Office. In February, India's slowed to a 20-month low of 0.1 percent in February, mainly due to a contraction in the manufacturing sector.

Union Budget 201920 What is Index of Industrial Production and how it helps govt chart future course of action

Representational image. Reuters

Factory output, as measured in terms of the Index of Industrial Production (IIP), had grown by 6.9 percent in February 2018, according to data released by the Central Statistics Office (CSO)

During April-February 2018-19, industrial output grew at 4 percent as against 4.3 percent in the same period of the previous fiscal.

Commerce and Industry Minister Piyush Goyal has taken a number of decisions to boost industrial growth.

President Ram Nath Kovind said on Thursday said the government will soon announce a new industrial policy aimed at promoting the growth of industries and creation of jobs.

The new policy will replace the industrial policy of 1991 which was prepared in the backdrop of balance of payment crisis. This will be the third industrial policy after the ones released in 1956 and 1991.

The proposed policy aims at promoting emerging sectors and modernising existing industries. It will also look to reduce regulatory hurdles and encourage adoption of frontier technologies such as robotics and artificial intelligence.

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