India to revamp IIP with new base year, wider coverage from June 1

New Delhi: India will release a revamped Index of Industrial Production (IIP) on June 1, updating the base year to 2022-23 and expanding coverage to include sectors such as minor minerals, rare earth minerals, gas supply, water supply and sewerage, and waste management.

The new series will also introduce more granular tracking of industrial activity, including separate indices for renewable and non-renewable electricity generation, the statistics and programme implementation ministry (MoSPI) said Monday.

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According to a Technical Advisory Committee (TAC) report, the index will cover 1,042 products across 463 item groups, and will be aligned with the National Industrial Classification (NIC-2025) framework.

The manufacturing basket will be restructured, with 120 new item groups added and 64 removed.

At present, the IIP tracks three broad sectors: mining, manufacturing and electricity. The report recommended retaining the existing six use-based classification categories in the revised series, which includes primary goods, capital goods, intermediate goods, infrastructure and construction goods, consumer durable goods and consumer non-durable goods.

"The new series also introduces greater granularity through sub-indices, including separate indices for electricity generated from renewable and non-renewable sources. Similarly, the mining and quarrying sector is now divided into three sub-indices covering fuel minerals, metallic minerals (including rare earth minerals), and non-metallic minerals (including minor minerals)," the ministry said in a statement.

The report proposed using tap connections to track water supply, sewerage/septage connections in 500 AMRUT cities for sewerage, and urban waste collected and processed for waste management.

The new series will adopt the geometric mean method for linking the existing 2011-12 series with the 2022-23 series. "The linking factors will be computed at aggregated levels, namely for the general index and the sectoral indices," the ministry said.

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The TAC recommended introducing a chain-linked IIP alongside the fixed base index, allowing periodic updates of weights, and publishing IIP data for all 36 states and union territories. The panel also proposed developing a separate industrial index for the unincorporated sector and releasing seasonally adjusted IIP data.

Other methodological proposals include retaining 'not elsewhere classified (nec)' items within manufacturing to better reflect emerging products and industries.