Context
India’s Index of Industrial Production (IIP) recorded strong year-on-year growth in June 2026, driven mainly by capital goods and infrastructure-related production. However, consumer goods output remained weak, indicating subdued private consumption despite robust industrial growth.
Explanation
- The Ministry of Statistics and Programme Implementation (MoSPI) has revised the base year of the Index of Industrial Production (IIP) from 2011–12 to 2022–23.
- Index of Industrial Production (IIP) is a high-frequency economic indicator that measures changes in the volume of industrial production.
- It is compiled and released monthly by the National Statistics Office (NSO), MoSPI.
- IIP covers three sectors: Mining, Manufacturing, and Electricity, with Manufacturing carrying the highest weight.
- It uses Use-Based Classification: Primary, Capital, Intermediate, Infrastructure/Construction, Consumer Durables, and Consumer Non-durables.
- Base year revision updates weights, basket of items, and industrial structure to reflect current economic realities.
- IIP is widely used for economic policymaking, industrial performance assessment, GDP estimation, and monetary policy decisions by the RBI.
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