Why in News?
India’s industrial growth rose to 3.5% in July 2025, the highest in four months, led by gains in manufacturing, capital goods, and consumer durables, while mining contracted (-7.2%) for the fourth straight month. Electricity output turned positive after two months of contraction.
Description:
- Purpose: IIP is a key indicator that measures the short-term changes in the volume of production of a basket of industrial products over a given period of time.
- Published by: It is compiled and published monthly by the Central Statistical Office (CSO) under the Ministry of Statistics and Programme Implementation (MoSPI).
- Base Year: The current base year for IIP in India is 2011–12, and an IIP value of 100 corresponds to the level of production in that base year.
- Formula Used: IIP is calculated using Laspeyres formula, which is a weighted arithmetic mean of production relatives, with weights derived from the base year.
- Deflation Method: To remove the effect of price changes, production values (for items reported in value terms) are deflated using the Wholesale Price Index (WPI) before inclusion in IIP.
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