Context:
- Growth in the output of eight core infrastructure sectors scaled a 13-month peak of 18.1% in May from a year earlier.
- This was reflected by the data released by the Department for Promotion of Industry and Internal Trade (DPIIT).
This article discusses:
- All about Index of industrial production (IIP)
- News Summary
Index of industrial production (IIP)
- The IIP number is an indicator which measures the industrial production for the period under review (usually a month) as against the reference period.
- It is compiled and published on monthly basis by the National Statistical Office (NSO), Ministry of Statistics and Programme Implementation.
- Base year – 2011-12
- Components of IIP:
- Broad sectors – Mining (14.4%), Manufacturing (77.6%) and Electricity (8%)
- Use-based sectors – Basic Goods, Capital Goods and Intermediate Goods etc.
- Eight core sectors in the IIP
- The eight core sectors in the IIP are: Coal, Crude Oil, Natural Gas, Refinery Products, Fertilizers, Steel, Cement and Electricity.
- Together these eight core industries carry 40.27 percent of the weight of items included in the IIP.
- Following represents the sequence of the eight core sectors arranged in decreasing order of their weightage in IIP:
- Refinery Products> Electricity> Steel> Coal> Crude Oil> Natural Gas> Cement> Fertilizers.
- Importance of IIP
- It tracks manufacturing activity in different sectors of an economy.
- It remains extremely relevant for the calculation of the quarterly and advance GDP (Gross Domestic Product) estimates.
News Summary
- Growth in India’s core sector spanning eight industries rose an annual 18. 1% in May 2022 compared with 9. 3% in the previous month and 16. 4% in May 2021.
- This growth was led by strong performance in coal, cement, electricity and fertilizer sectors and helped by a low base during the second Covid wave.
- The data released by the government showed the core index grew at a decent pace of 8.1% in May from the pre-pandemic level (same month of 2019).