Focus: GS-III Indian Economy, Industry and Infrastructure
Why in news?
The output of eight core infrastructure industries shrank by 23.4% in May 2020 due to the COVID-19 Lockdown.
- Barring fertiliser, all seven sectors — coal, crude oil, natural gas, refinery products, steel, cement, and electricity — had recorded negative growth in May.
- During April-May 2020-21, the sectors output dipped by 30% as compared to 4.5% in the same period previous year.
- These eight industries accounts for 40.27% in the Index of Industrial Production (IIP).
Index of Industrial Production (IIP)
- The Index of Industrial Production (IIP) is an index that shows the growth rates in different industry groups of the economy in a fixed period of time.
- It is compiled and published monthly by the Central Statistical Organization (CSO), Ministry of Statistics and Programme Implementation.
- IIP is a composite indicator that measures the growth rate of industry groups classified under:
- Broad sectors, namely, Mining, Manufacturing, and Electricity.
- Use-based sectors, namely Basic Goods, Capital Goods, and Intermediate Goods
The Eight Core industries of IIP are:
- Crude Oil
- Natural Gas
- Refinery Products
Significance of IIP :
- IIP is the only measure on the physical volume of production.
- 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 estimates.
-Source: The Hindu, Hindustan Times