Why is it in the News?

The combined Index of Eight Core Industries (ICI) increased by 7.8 per cent (provisional) in November 2023 as compared to the Index of November 2022.

About the Index of Industrial Production (IIP):

• The IIP is a comprehensive index that assesses the growth rate of industry groups, categorized into:
  • Broad sectors: Mining, Manufacturing, and Electricity.
  • Use-based sectors: Basic Goods, Capital Goods, and Intermediate Goods.
• In India, the initiation of computing the IIP predates international recommendations. The Central Statistical Organization, now known as the National Statistics Office (NSO), assumed the responsibility for compilation and publication in 1951.
• The Ministry responsible for this process is the Ministry of Statistics and Programme Implementation.

Key Information:

• Base Year: The base year was changed to 2011-12 from 2004-05 in the year 2017.
• Sources of Data: The NSO compiles the IIP using secondary data from 14 source agencies across various Ministries/Departments and their attached/subordinate offices.
• The Department of Industrial Policy and Promotion (DIPP) contributes a significant portion of the data for the calculation.
• Utilization of IIP Data: The Industrial Production Index (IIP) is a valuable resource employed by several entities, including government bodies like the Ministry of Finance and the Reserve Bank of India (RBI), as well as private firms and analysts.
  • It serves as a critical tool for analytical purposes.
  • Additionally, the data is instrumental in computing the quarterly Gross Value Added (GVA) of the manufacturing sector within the Gross Domestic Product (GDP).

About the Index of Eight Core Sectors:

• The Index of Eight Core Industries (ICI) assesses the combined and individual production performance of eight vital industries.
• Together, these sectors account for 40.27% of the items measured in the Index of Industrial Production (IIP).
• Listed in descending order of their weightage, the eight core industries are:
  • Refinery Products, Electricity, Steel, Coal, Crude Oil, Natural Gas, Cement, and Fertilizers.