Why in news?

• India is set to revise the base year of the Index of Industrial Production (IIP) to 2022–23.
• This revision aims to provide more accurate and timely industrial data that better reflects India’s evolving economic structure, technological advancements, and new industries.
• The Ministry of Statistics and Programme Implementation (MoSPI) has formed a Technical Advisory Committee which recommended this alignment with the new GDP base year to capture recent economic and industrial changes effectively.

Key Reasons for Revision

• Industrial production significantly contributes over one-fifth of India's output and has extensive linkages with other sectors.
• The old base year (2011–12) no longer captures the rapid technological shifts, product diversification, and market dynamics.
• Updating the base year helps in removing outdated product categories and adding new ones like laptops, vaccines, aerospace components, and minor minerals.
• The revision aligns the IIP with international standards (IRIIP 2010) and includes methodological improvements like a dynamic factory substitution mechanism and de-seasonalized IIP for better trend analysis.

Expected Improvements

• Expanded coverage to include new products and sectors, removing obsolete items.
• Enhanced data accuracy by reclassifying previously non-specified items.
• Potential integration of GST data to provide near real-time industrial production insights.
• Greater precision in capturing structural shifts in India’s industrial landscape.

Download Pdf