Context:
India’s industrial recovery slowed sharply in December, with output growing just 0.4% year-on-year, and manufacturing activity contracting 0.1%, as per official estimates for the Index of Industrial Production (IIP). Electricity output grew 2.8%, while mining activity rose 2.6%.
- Data shows capital goods, consumer durables output shrank signalling poor investment, consumption
Relevance:
GS-III: Indian Economy (Growth and Development of Indian Economy, Inflation)
Dimensions of the Article:
- What is Index of Industrial Production (IIP)?
- About Index of Eight Core Industries:
- Significance of IIP:
What is 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 National Statistical Office (NSO), Ministry of Statistics and Programme Implementation.
- Base Year for IIP is 2011-2012.
- 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
About Index of Eight Core Industries:
- The Eight Core Industries comprise 40.27% of the weight of items included in the Index of Industrial Production (IIP).
Released by: The Office of the Economic Adviser, Department for Promotion of Industry and Internal Trade
Base year: 2011-12
Below image attached Eight Core Industries based on their weightage.
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
