Detailed Information With Charts and Stats
The Index of Industrial Production (IIP) is the indicator for the industrial products with respect to their production in a specific period. All the eight vital industrial sectors come in the jurisdiction of IIP. As of now, the IIP base year is 2011-12. Moreover, all the data given here are calculated since May 2017. The Index of Industrial Production is a major concern for the country as a major chunk of the national economy depends on it. It acts as a combined indicator, and each sector has a specific index number. A basket tally of IIP occurs in a months period. Depending on the IIP data, the industrial sectors decide the level of production that must be aimed at a segment of time.
IIP Data: Who Releases It?
The CSO (broadly known as Central Statistical Organization/ Office) is responsible for releasing the IIP data. This body works under the MoSPI, which is broadly known as the Ministry of Statistics and Programme Implementation.
The Works of the Organization Include the Following Apart from Releasing the IIP Report:
Co-ordination of every statistical activity in the country
To check and maintain the statistical standards in the country
Carry out the economic censuses of the country and oversee the follow-up surveys
Calculating the National Income of the country
Work as related to trade
Apart from those mentioned above, the CSO has many other duties. It aims to keep the statistical field clear. This actually helps the ministries to be sure that they are fruitfully working.
CSO: Organizational Structure
When knowing about the IIP, it is important to know about the CSO as it is responsible for releasing the report. The CSO has got a Director-General as the head. There are five other people holding the assistantship of the DG.
These five people are called additional DGs. There are six persons as Joint Directors too. Under these joint directors work the thirty deputy directors and 7 task officers. A total of 48 assistant directors are also present in the CSO.
The headquarters of CSO is located in Delhi, and these people have the responsibility to release the report named Index of Industrial Production.
Eight Core Sectors Included in the IIP
There are eight core sectors that are included in the IIP. Short notes about all such sectors are given below:
Crude Industry: The crude industry deals with natural gas and petroleum. It is overseen by the Ministry of Petroleum and Natural Gas. The net weightage of the crude industry in the IIP is 8.98%. It is considered a core sector.
Coal Industry: The coal industry of India is controlled by the Mistry of Coal. It also comes in the list of core sectors in the IIP, and the weightage is 10.33%.
Natural Gas Industry: The Natural Gas industry is controlled by the Ministry of Petroleum and Natural Gas. Its weightage in the IIP is 6.88% and in the care sector.
Cement: The cement industry is quite large in India, and it comes under the Ministry of Heavy Industries. As a core sector, the weightage of cement is 5.37% when it comes to IIP.
Refinery Products Industry: The industry of refinery products also comes under the jurisdiction of the Ministry of Petroleum and Natural Gas. As you know about IIP, the weightage is 28.04% at present.
Steel: The Steel industry is looked after by the Ministry of Steel in the country. The current weightage of this industry in the case of IIP is 17.92%.
Fertilizers: Fertilizers also come in the sectorial composition of IIP. As far as the ministry is concerned, it comes under chemicals and fertilizers. The current weightage of fertilizers in the IIP is 2.63%.
Electricity: The industrial sector of electricity is controlled by the Ministry of Power. It is one of the major sectors given a large and developing country like India. The present weightage of this sector in IIP is 19.85%.
Information About The Combined Index
As per the Index of Industrial Production, the above sectors stand at the combined percentage of 40.27. On the other hand, the combined index of the IIP with all the above sectors is 128.4. This data is strictly made according to the study held in December 2019.
Sources Referred by the CSO to Make the IIP report
There are 16 agencies that act as the sources for CSO as they analyze the data and create the Index of Industrial Production. Here are the names of the agencies:
Indian Bureau of Mines
Department of Policy and Promotion
Joint Action Committee
Central Electricity Authority
Office of Textile Commissioner
Ministry of Petroleum and Natural Gas
Department of Chemicals and Petrochemicals
Office of Textile Commissioner
Department of Fertilizers
Directorate of Fats, Vegetable oils, and Vanaspati
Directorate of Sugar
Railway Board
Coffee Board
Office of Salt Commissioner
Office of Jute Commissioner
Office of Textile Commissioner
The Meaning of Base Year in IIP
Now, as you already know about the sources where CSO refers for the data in the case of IIP, it is time to know about the base year. Here are all the facts related to the base year and its importance when it comes to the making of IIP. When the CSO analyses the IIP, it gives a total of 100 marks to the base year. So, 100 is the value on which the entire statistical index is calculated.
As per the present date, the newly revised year of IIP is 2011-12. It was done in the month of May. The data was shown on the IIP to make the GDP in-lieu with the IIP data that is published. The base year acts as a mean, and it forms the base of every data which is published in the years to come. Now, this thing is a bit tricky, and you need to understand it with a case study.
Case Study Related to the Base Year
As the base year for IIP in India is 2011-12, you need to calculate the value of a recent year in respect to it. Say, in a particular sector, the reading of IIP for Jan 2019 was 130. So, you can consider that the industrial activity in that sector has increased by 30% from what it was in 2011-12.
The Study of IIP
The study of IIP is one of the major sections for the students who study higher economics and statistics. It is an exclusive chapter that helps statisticians to understand the process of measuring the productivity of a specific industry in a given period of time.
Statisticians actually use several methodologies to reach a specific conclusion. Later they publish it in the form of a chart. The IIP chart is published on a monthly basis. Since independence, there have been several changes in the base year. Now, this has been done to rightly judge the development of India with respect to the field of industries.
As you already know the current base year of IIP, it is time for you to know about the past base years. The base year of IIP was considered as the years of 1936, 47, 51, 56, 60, 70. 8-81, 1993-94 and 2004-05. So, it is clear that the IIP system has been running since the pre-independence era. Later, many governments changed, but the statistics always showed optimistic results.
FAQs on Index of Industrial Production
1. Why should every statistician learn about the process of IIP?
Every statistician should learn about the process of IIP because it is one of the main procedures by which the industrial condition of the country can be derived and understood. It is a long process and contains a lot of methodologies. The students of economics and statistics can actually study this chapter in high standards. The in-depth study can come in during the undergraduate or postgraduate courses. Knowledge about IIP and the way it is derived is important for people who are about to appear for the UPSC exams. Moreover, there are many more finance relate examinations where questions related to IIP are asked. The best you can do to study is to visit the official website of CSO and read about IIP in detail.
2. What are the data needed to create the IIP chart?
There are a lot of data needed to create an IIP chart. However, the executives have access to a lot of resources. They work very hard to implement all the methodologies over the data they get. Here, you can see the sixteen agencies from which the IIP chart is created by the CSO task officers. All the reports related to IIP go to the ministries of the Government of India as the official records. Plan making and decision-making take place according to the reports of the IIP. You can also access the reports of IIP easily as they are well available on the internet after they are published. However, if you can’t get it, you can try for an RTI.
