1. NOTE ON THE HISTORICAL DEVELOPMENT OF THE ALL INDIA INDEX OF
INDUSTRIAL PRODUCTION (IIP) AND SALIENT FEATURES OF THE CURRENT
SERIES OF IIP (BASE 1993-94=100)
Introduction
Index of Industrial Production (IIP) is an abstract number, the magnitude of which represents the
status of production in the industrial sector for a given period of time as compared to a reference
period of time It is a statistical device which enables us to arrive at a single representative figure
to measure the general level of industrial activity in the economy. Strictly speaking the IIP is a
short term indicator measuring industrial growth till the actual result of detailed industrial
surveys become available. This indicator is of paramount importance and is being used by
various organisations including Ministries/Departments of Government of India, Industrial
Associations, Research Institutes and Academicians.
Origin & History
2. In India, the first official attempt to compute regularly the Index of Industrial Production was
made much earlier than even the recommendations on the subject at the international level by
UNSO. The Office of Economic Advisor, Ministry of Commerce and Industry made the first
maiden attempt of compilation and release of Index of Industrial Production with base year 1937
covering 15 important industries accounting for more than 90% of the total production of the
selected industries. Subsequently, the base year were revised twice, viz., in 1946 and 1951.With
the inception of Central Statistical Organisation (CSO) in 1951, the responsibility for
compilation and publication of the Index of Industrial Production (IIP) was vested with this
office. The general scope of the index of industrial production as recommended by the United
Nations Statistical Office (UNSO), is defined to include mining, manufacturing, construction,
electricity and gas sectors. But due to constraints of the data availability, the present general
index of industrial production compiled in India has in its scope mining, manufacturing and
electricity only.
3. As the structure of industrial sector changes over time, it becomes necessary to revise the IIP
periodically, so as to measure the real growth in the industrial sector. UNSO recommends that
the base year of the IIP may be revised quinquennially. It has been revised from time to time by
shifting the comparison base to a recent period, by reviewing the coverage of items and
industries and by improving as far as practicable, the technique of construction with a view to
reflect adequately the industrial growth and structure. When the index was commenced in India,
the base year adopted was 1937 and this was revised successively to 1946, 1951, 1956, 1960,
1970 ,1980-81 and 1993-94.
Base Year : 1937
4. Initially the base year adopted was 1937 comprising mining manufacturing and electricity
covering 15 industries accounting for more than 90% of the total production of these industries.
The weights were allocated based on the total value of output during the base year. The index
termed the Interim Index of Industrial Production was a quantum index and was computed

2. using weighted arithmetic average with fixed base. The various industries and their
corresponding weights were as under:
Industry
Weight
1. Cotton Textiles ...............42
2. Jute Manufacture.............18
3. Steel................................ 8
4. Chemicals.........................1
5. Paper................................2
6. Cement.............................4
7. Matches............................2
8. Paints................................1
9. Wheat Flour.......................1
10. Distilleries and breweries....1
11. Sugar..............................10
12. Petrol................................1
13. Kerosene...........................1
14. Coal..................................4
15. Electricity..........................4
Total...................................100
The index was discontinued since 1949.
(Ref. Statistical Abstract 1952 –53)
Base Year : 1946
5. Subsequently, the base year was shifted to 1946 by the then O/o Economic Adviser, Ministry
of Commerce & Industry. The scope of the index was restricted to mining and manufacturing
sectors, comprising of 20 industries with 35 items. The ‘value added by manufacture’ in the base

3. year obtained from the First Census of Manufactures, India 1946 was used for determining the
weights to be assigned to different items. In the case of coal, the gross ex-factory value at pithead of the coal mined was taken as an estimate of value added. The industries and their
respective weights are as under :-
Industry
Weight
Coal
11.95
Sugar
3.54
Paints and Varnishes
0.61
Cement
0.67
Glass
0.55
Refractories (Ceramics)
0.48
Plywood
Chests)
(Commercial
and
Tea
0.15
Paper and paper board
1.46
Matches
1.21
Cotton Textiles
43.49
Woollen manufactures
1.38
Jute
16.53
Chemicals
3.10
Non-ferrous metals
2.14
Steel
7.16
Bicycles
0.11
Sewing machines
0.02
Electric Lamps
0.04
Electric Fans
0.35

4. General and Electrical Engineering
Total
5.06
100.00
(Ref. Statistical Abstract 1952-53)
6. The index, viz., Interim Index of Industrial Production from 1947, was compiled using simple
weighted arithmetic mean. The adjusted indices, after allowing for variations in the number of
days in the month for all industries except sugar were also compiled using suitable formulae. For
sugar, the seasonal variation adjusted indices were compiled.
Base Year : 1951
7. The Interim Index of Industrial Production was discontinued in April 1956 due to certain
shortcomings and was replaced by the revised index with 1951 as the base year covering 88
items compiled by CSO. The items in this index were classified according to the International
Standard Industrial Classification (ISIC) 1948 of all economic activities. The various industries
included in the index were categorised as 2, 17 and 1 major groups for the mining and quarrying,
manufacturing and electricity sectors respectively. The index was computed using the weighted
arithmetic mean of quantity relatives with weights being allotted to various items in proportion to
‘value added by manufacture’ in the base year 1951. The weights for the mining, manufacturing
and electricity sectors were 7.16, 90.68 and 2.16 respectively. These indices were adjusted for
variations in the number of days in the month for all the industries except for sugar, salt and tea
industries. For the three seasonal industries, the seasonal variations were adjusted by the method
of moving averages. The indices were compiled from 1952 to 1961 and are given in the
following table.
Revised Index of Industrial Production
(BASE : 1951 = 100)
Year
General
Index
(Weight)
Mining and
Quarrying
(7.16)
Manufacturing
Electricity
(90.68)
(2.16)
(100.00)
1952
103.6
105.6
103.4
104.5
1953
105.6
104.2
105.5
113.1
1954
112.9
107.2
113.0
127.0
1955
122.4
111.7
122.7
144.5
1956
132.6
115.0
133.3
164.1

5. 1957
137.3
126.8
136.9
184.9
1958
139.7
133.7
138.5
209.0
1959
152.1
142.3
150.6
248.5
1960
169.7
159.9
167.9
280.5
1961
181.2
171.8
178.5
326.2
(Ref: Statistical Abstract 1962)
Base Year : 1956
8. The index was further revised to base year 1956 on the recommendation of the working group
constituted by Central Statistical Organisation. The series was revised in July 1962 covering 201
items of production, classified according to the Standard Industrial and Occupational
Classification of All Economic Activities published by CSO in 1962. The weights were assigned
to the various items on the basis of ‘value added by manufacture’, in the base year as per Census
of Manufactures 1956. The number of items alongwith sectoral weights are as follows :
Sectoral Weights and number of items in IIP with base 1956
Sector
No. of items
Mining
Manufacturing
Electricity
Total
Weight
2
7.47
198
88.85
1
3.68
201
100.00
(Ref: Statistical Abstract 1963 & 1964)
9. The indices were compiled using the weighted arithmetic mean. No adjustments were made
for variation in the number of days of the month and the seasonal variations were adjusted on the
basis of overall indices rather than confining to only three industries viz. sugar, tea and salt. The
monthly series of index numbers from January 1951 to December 1961 was the basis for
estimating the seasonal indices using the method of moving averages.
Base Year : 1960
10. The index with 1960 as base year, is based on (i) regular monthly series for 312 items and
(ii) annual series including 124 additional items as compared to 201 items covered by the

6. earlier index (base : 1956=100). Though the published index is based on regular monthly
series for 312 items, weights have been allotted on the basis of the total 436 items with a
view to use the same set of weights for the regular monthly index and the annual index
covering the additional items as well. If any item, for which regular monthly series are
not available, occurs in a group, the weight of that group, is adjusted by dropping the
weight of that item, while calculating the monthly group index. No such adjustment in
weight is made while computing the major group index for such groups. The crude
general index of every month is adjusted for seasonality by appropriate seasonal index
calculated by using the method of moving averages of the crude general index. The index
is a simple weighted arithmetic mean, the weights being proportional to ‘value added by
the manufacture in the base year.
11. The Mining and Quarrying index was specially worked out by the Indian
Bureau of Mines and excludes gold, salt, petroleum and natural gas.
Base Year : 1970
12. The series of index numbers with base 1970, which takes into account the structural changes
that have taken place in the industrial activity of the country since 1960, was released in March
1975 covering 352 items comprising 61 items for mining 290 for manufacturing and 1 for
electricity respectively of the earlier series. The weighting diagram for the manufacturing sector
was based on the results of ASI 1970, whereas for the mining sector, the net value added by that
sector as estimated by Indian Bureau of Mines was used. In case of electricity, the net value
added in 1970 as available from the White Paper on National Income published by CSO. The
weights were assigned to different industry groups according to the summary tabulations of
Annual Surveys of Industries (ASI)-1970, while the item level weights within an industry group
were based on the detailed tabulation of ASI-1968, since the detailed results for the base year
1970 were not available at that time. The allocation of weights to sectors, major-groups, groups
and sub-groups were done on the basis of ‘net value added’. The selection of items for the
manufacturing group was made on a objective criteria viz. (a) availability of regular monthly
report of production, and (b) importance of the item, judged by the value of gross annual
production/value added. Following the above selection criteria, a number of items were dropped
from the earlier series and several new items were included in the revised series so as to reflect
the latest industrial pattern.
13. The year 1970 was chosen as the comparison base on account of its nearness to the reference
period chosen for a number of other official indices, like the wholesale price index, consumer
price index etc. apart from satisfying the other criteria of selecting a base year.
14. In the Manufacturing Sector, weights upto 3-digit level of Industrial Classification was
allotted on the basis of value added by manufacture covering the entire factory sector of ASI
1970. Since estimates of net value added were not available beyond 3-digit level of classification
for the Sample Sector of ASI, the weights to the industries beyond the 3-digit level were based
on value added by the manufacture of Census Sector alone of ASI 1970. The weights at the item
level were allocated on the basis of the results of 1968 only as item-wise data on value of
production for ASI 1970 were not available at that time. In the case of Cotton Textiles, the value

7. added by manufacture for yarn and cloth was computed separately for weighting purposes. The
value added per unit of yarn produced in spinning mills was first computed and applied to the
total production at spindle points. The value added thus arrived at for yarn was then subtracted
from the total value added for Cotton Textile Industry to obtain the value added for cloth. In case
of few other items, however, the gross value of production was not available from ASI and the
relevant data of these items was collected from concerned sources.
15. For compiling the index monthly production reports were received by CSO from as many as
17 source authorities, who in turn collects data from the production units. In terms of the number
of items covered, the largest source was the then Directorate General of Technical Development,
who supplied monthly production data on as many as 261 out of 290 items included in the
manufacturing sector. The data relating to mining and quarrying and electricity sectors were
furnished to CSO by Indian Bureau of Mines and Central Electricity Authority respectively.
Base Year : 1980-81
16. The Government of India felt that the continued adoption of 1970 as the base year was
leading to inadequate reflection in the IIP of the changes that have taken place in the industrial
structure and set up a Working Group in 1978 under the Chairmanship of the then Director
General of CSO, to consider the change of the base year and recommend modifications in the
weighting diagram. The working group first explored the possibility of adopting 1975-76 as the
base year for the revised IIP and finally decided to shift the base to 1980-81, to accommodate
adequately items from the small-scale sector.
17. For selection of items for the 1980-81 series, the following criteria were adopted :i.
ii.
iii.
regular monthly report of production should be available in respect of the selected items.
each items should generally account for either a gross annual production of Rs.5 crore or
of gross value added of Rs.1.25 crore. This requirement was, however, been waived in
the case of industry groups which are not represented by sufficient number of items or in
case of important items in respect of which the developing agencies are kept to watch the
growth movement.
if the industry group is represented by many qualifying items, only those items with a
relatively larger share of production in terms of value, should be included in the index,
which together account for most of the group weight.
18. The Working Group gave its report in January 1986. The salient features of the changes are
as under :
i.
ii.
new items were included, while 95 items of the 1970 index were dropped. The Working
Group also clubbed together or sub-divided a few items of the 1970 index. However, the
total number of items covered by the manufacturing sector in the 1980-81 series,
continued at 290 after these changes.
items, generally those contributing atleast 25% to the total production of the item in the
base year, have been recommended for inclusion of production by the small-scale sector

8. iii.
as well. Development Commissioner, Small-Scale Industries (DC SSI) could line up
regular monthly production data for, only 18 items from July 1984.
The 1970 series of IIP is based on National Industrial Classification (NIC) 1970
published by CSO.
19. The weighting diagram upto the ultimate digit of NIC was compiled on the basis of gross
value added of the factory sector of ASI 1980-81. The weights for the selected items within each
industry were apportioned on the basis of value of output figures as available from ASI 1980-81.
While this method was followed for all the industries, in respect of Cotton Textiles
(decentralised sector) a different approach had to be adopted. The ASI returns relating to factory
sector units classified as ‘ cotton spinning other then in mills’ , ‘production of khadi’, ‘weaving
and finishing of cotton textiles in handlooms’, etc. were divided into two groups, viz. those
which reported only yarn as their main product and those which reported both yarn and cloth (or
only cloth) as their main product. The gross value added per kg. of yarn was obtained from the
set of returns and this was used to arrive at the gross value added per metre of cloth (in the
decentralised sector) from the second set of return. The gross value added per metre of cloth,
thus arrived, was then used to obtain the total gross value added in the decentralised sector for
1980-81, on the basis of the total production data in the decentralised sector as collected from the
Textile Commissioner’s Office. The gross value added estimated was then assigned to the NIC
group, jacking up the corresponding figures for the industry group 23 by the same amount. There
were a few items for which the value of production in ASI 1980-81 was less than the
corresponding value supplied by the DGTD, and was used for assigning the weights at item
levels. For some items where data were available from both DGTD and DCSSI, item level
weights were distributed using the total values from both the agencies.
20. The Index of Industrial Production is a quantitative index, the production of the items is
reported by the source agencies in physical terms. However, the unit of reporting in respect of
certain items like machinery, machine tools etc. is in value terms. In such cases, the monthly
figures of production value, is first deflated by the Wholesale Price Index (base 1981-82) for the
concerned category, issued by the O/o the Economic Adviser, Ministry of Industry.
21. The index is a simple arithmetic mean of production relatives computed using Laspayere’s
formula. The index is compiled in stages, initially for items, then for sub-groups, groups and
major groups, sectors and finally for all sectors combined. The index of monthly production
covering 61 items supplied by Indian Bureau of Mines is dovetailed with indices of
manufacturing and electricity sectors for compiling the general index of industrial production.
22. Till 1970 series the coverage of manufacturing sector was restricted to only large and
medium units due to non-availability of production information for small-scale units on regular
basis. For the first time in 1980-81 series, the small-scale sector was represented by 18 items in
the compilation of index. For these items no separate weight was assigned in the weighting
diagram. However, the production of these items is clubbed with the production figures of the
corresponding items supplied by the large and medium units. In cases where the production
figures from the two sources are in different units, restricting the clubbing of production, the
weight allocated to the item(s) is sub-divided on the basis of share of the two sectors in the base
year which is used for compilation of the index.

9. 23. The IIP series with base 1980-81 has been computed for each month from 1981-82 to March,
1998. The representation of the small-scale sector was included in the index from the month of
July, 1984, prior to which only DGTD production data was utilised.
Revised Series of IIP with Base Year 1993-94 :
Technical Advisory Committee
24. The changes in the structure of the industrial sector over time makes it necessary to revise the
IIP periodically so as to measure the real growth in the industrial sector. Accordingly, CSO
attempted an exercise of revision of base year from 1980-81 to 1985-86 and compiled indices for
the period April 1986 to May 1995 with base 1985-86. However, in an inter-ministerial meeting
held in CSO in November 1995, it was decided to abort this base year revision mainly due to its
delayed implementation. It was thought that as detailed results of ASI, 1993-94 would be
available shortly, it will be better to shift the base year to 1993-94. Incidentally, the year 1993-94
was also accepted by the Office of Economic Adviser, Ministry of Industry for shifting the base
year of WPI from 1981-82. The Technical Advisory Committee (TAC) which had been set up in
the Department of Statistics in June, 1995 to advise on Compilation of Comparable State IIPs
and Composite all-India IIP was also entrusted subsequently in November 1996 with the
responsibility of examining all the issues and providing technical guidance in the matter of
shifting the base year of all-India IIP to 1993-94. The salient features of the recommendations of
the TAC in this regard are as under:a. The current series of all-India IIP may be revised by shifting its base to 1993-94;
b. Recognising the contribution of the unorganised sector, the weighting diagram of the
revised series should take into account the total production of both the organised and
unorganised manufacturing sectors.
c. In view of the difficulties in lining up item-wise monthly production data for small scale
items, the selection of items may be based only on the detailed results of ASI 1993-94, as
has also been the practice in the past. At least 18 items of small scale sector included in
the present series may be considered for inclusion in the new series;
d. The item basket for the revised series of all-India IIP with base 1993-94 may be selected
in a similar manner as recommended for selection of State level item basket i.e., the
selected items should account for nearly 80% of the total output for the manufacturing
sector. However the criteria may be used with certain flexibility. For example, items not
accounting for a gross annual production of Rs. 80 crore may not necessarily be included
in the basket. The criteria may be relaxed, if necessary, to ensure that the provisionally
selected items in all the 2-digit industry groups captured at least 60 percent of the Value
of Output of the particular group. The over-riding criteria for finalisation of item basket
would be the regular flow of monthly production data from the source agencies.
e. The revised series would follow the National Industrial Classification (NIC) 1987.
f. Gross Value of Output (GVO) rather than Gross Value Added (GVA) may be used for
weighting purposes from sectoral (1-digit) to the ultimate (4-digit) levels of industry for
compilation of both the State IIPs as well as all-India IIP.

10. 25. Most of the recommendations of the TAC were accepted. However, the use of GVO as
weights at industry group levels was not accepted for Compiling the All India IIP and GVA was
continued to be used as in the 1980-81 series.
Scope and coverage:
26. The scope of the index has been confined to mining, manufacturing and electricity sectors
and does not cover gas, water supply and construction. The distribution of items covered by the
index with 1980-81 and 1993-94 base year are as follows :No. of Items
Sector
1980-81
1993-94
Mining
61
64
Manufacturing
288
478
1
1
350
543*
Electricity
Total
*(clubbed into 287 item groups : Mining-1, Mfg. - 285, Electricity - 1)
Item basket:
27. Item basket:
In the revised IIP, the following criteria have been followed for selection of items for inclusion
in the item basket :
i. Each item should generally account for at least Rs. 80 crore of Gross Value of Output at
the item level and Rs. 20 crore of Gross Value Added at the ultimate digit level. The
criteria has, however, been applied with flexibility in the case of industry group which
were not represented by sufficient number of items;
ii.
iii.
To improve the representativeness , some of the important items of IIP series with base
1980-81 have also been included, and
Regular monthly flow of production data be available in respect of the selected items.
(iv) All the 18 items of small scale sector included in the current series of IIP with base 1980-81
have also been accounted for in the revised series with base 1993-94.
The item basket for the 1993-94 series contains 543 items as compared to 352 in the earlier
series, the addition being 3 items for mining sector and 188 for the manufacturing sector. To
retain the distinctive character and enable the collection of data, the source agencies proposed

11. clubbing of 478 items of the manufacturing sector into 285 item groups. 97 item groups were
dropped and 99 added apart from 187 being common with the 1980-81 series.
28. The item basket so identified captured about 80% of the output of the manufacturing sector.
The item basket has been finalised by having extensive discussions with source agencies
especially DIP&P, Textile Commissioner, Directorate of Vanaspati, Development Commissioner
(Iron & Steel), etc. keeping in view the distinctive character of the items
and the availability of regular flow of monthly production data. Also, to improve
representativeness at 2-digit level, some important items of the current series with base 1980-81
have also been included in the basket.
Weighting Diagram:
29. The Sectoral Weights have been allocated on the basis of Gross Value Added for 1993-94 as
published in the National Account Statistics For the first time, the weighting diagram of IIP with
base 1993-94 has taken into account the contribution of the unorganised manufacturing sector
alongwith that of Annual Survey of Industries (ASI). For estimating the 1993-94 Gross Value
Added for the unregistered sector, the data available in the follow-up Surveys of Economic
Census viz. Directory Manufacturing Establishments (DME), Non-Directory Manufacturing
Establishments (NDME) and Own-Account Manufacturing Enterprises (OAME), for the years
1989-90 and 1994-95 have been used. After interpolating the GVA at 2-digit level, the further
allocation at 3/4 digit levels of NIC has been done using the ratios of 1994-95 surveys, being in
close proximity to 1993-94. The consolidated contribution at 2/3/4 digit level of NIC have been
arrived at by super-imposing ASI data with unorganised data for the corresponding groups/sub
groups. Further allocation of weights to the items within 4-digit industry groups have been done
using Value of Output as available from ASI, 1993-94.
30. Following the recommendation of the TAC, the issue of using Gross Value Added and Gross
Value of Output as a criteria for allocation of weights in compilation of revised series of IIP was
deliberated in different forums including a Special Committee. It was recommended that GVA
may be used for allocation of weights at industry group level in the revised series of IIP with
base 1993-94, for the sake of continuity, consistency, the international practices and the UN
recommendations on the subject.
Formula:
31. The index is a simple weighted arithmetic mean of production relatives calculated by using
Laspeyre’s formula :
I= (Wi Ri)/ Wi
Where I is the Index, Ri is the production relative of the ith item for the month in question and
Wi is the weight allotted to it.

12. Production data
Sources of data:
32. For the 1980-81 series, the Central Statistical Organisation used to receive monthly
production data from as many as 18 source agencies, who collect data from the production units.
For the revised series with base 1993-94 , the same set of 14 source agencies have been retained
except for Railways, for which the consolidated data will now be supplied by the Railway Board
instead of data being supplied earlier by 5 agencies. In terms of the number of items covered, the
largest source is the Department of Industrial Policy & Promotion(DIP&P), which supplies data
on as many as 213 out of 285 group of items in the manufacturing sector. The index relating to
Mining and Quarrying sector is being supplied by the Indian Bureau of Mines, Nagpur which is
dovetailed with manufacturing and electricity indices compiled by CSO to arrive at the General
Index of Industrial Production. The data on Electricity sector is furnished by the Central
Electricity Authority.
Use of Price Deflators:
33.
The Index of Industrial Production is a quantitative index, the production of items
being expressed in physical terms. However, the unit of reporting in respect of certain
items like Machinery, Machine Tools, Ship Building etc. is in value terms. The monthly
figure of production value, in such cases is first deflated by the Wholesale Price Index
(WPI) of the corresponding item/category, released by the Office of the Economic Advisor,
Ministry of Industry.
One time revision of Indices
34. The WPI figures with base 1981-82 were used for compilation of IIP upto the month
of March 2000. In the revised series of WPI (base 1993-94), certain items have been
dropped with the result that the item deflators for (i) Agarbatti, (ii) Industrial valves, (iii)
Laboratory & Scientific Instruments and (iv) Fountain pen are not available in the revised
series. Therefore, recently alternative item/sub-group deflators in the new series have been
identified and used in place of above deflators of the old series. Recently, the IIP series had
to be again recomputed from April 1994 onwards, taking into account the production of
Natural Gas by Private Sectors and Joint Venture Companies and the internal utilization
part of production of natural gas by the Public Sector Companies. Further, four items
namely Radio Receivers, Photosensitized Paper, Chassis (Assembly) for HCVs (Bus,
Truck) and Engines reported to DIPP by ‘Single Producers’ were also dropped from the
item basket from April 1998 onwards, their weights re-distributed amongst the remaining
items of the respective 2- digit categories of NIC 1987 and indices recomputed based on the
revised weighting diagram.One time revision of the indices from April 1994 onwards based
on revised WPI (Base 1993-94) deflators in place of the old WPI (Base 1981-82) deflators
were been incorporated in the Press Note for quick estimates of IIP for May 2000 issued
on 12th July 2000. The revised indices based on revised indices of mining sector and new

13. weighting diagram after deletion of four item groups have been incorporated in the Press
Release on Quick Estimates of IIP for November 2000 released on 12th January 2001
Use-based Indices
35. With switching over to the monthly quick estimates of IIP with base 1993-94, it was
necessary to categorise the items included in the new series of IIP into various use-based
categories i.e., Basic goods, Capital goods, Intermediate goods, Consumer durables and
Consumer non-durables. A comparison of a number of items alongwith their weights in the
use-based categories for 1980-81 and 1993-94 is as under
Comparison of number of items, weights in the use-based categories for 1980-81 and 199394 series of IIP
S.No.
1.
2.
3.
4.
5.
Use-based
Category
No. of items
Weight
1980-81
65
55
96
1993-94
63
50
90
1980-81
394.18
164.27
205.07
1993-94
355.12
96.87
264.39
26
25.50
51.15
58
210.98
232.47
Basic goods
Capital goods
Intermediate
goods
Consumer
22
durables
Consumer non- 50
durables
Official Release of New Series of IIP (Base:1993-94)
36. The provisional indices based upon the new series of IIP were compiled and discussed in
the meeting of important users viz, representatives from the Ministry of Industry, Planning
Commission, Ministry of Finance, RBI etc. and the revised series was officially released on 27 th
May 1998. The tables enclosed with the press release were subsequently updated by
incorporating data on 2-digit and use-based indices upto March 1998 and released on 8th June
1998. One time revision of the indices from April 1994 onwards based on revised WPI (Base
1993-94) deflators in place of the old WPI (Base 1981-82) deflators have been incorporated in
the Press Note for quick estimates of IIP for May 2000 and issued on 12th July 2000.

14. 37. As per the norms laid down by Special Data Dissemination Standards (SDDS) of IMF, the
quick estimate of IIP of any month is being released within six weeks from the reference month
according to an advance released calendar. The press release on the quick estimate of IIP and the
advance release calendar are being disseminated in the website of the Ministry since May 1998.
PROVISIONAL NATURE OF THE INDEX SERIES
38. In order to achieve the norms of SDDS for release of IIP within six weeks, all the 15 source
agencies are required to furnish data to CSO within four to five weeks from the close of month.
As all the production data to be used in computing the index will not have become available at
the time the index for any month is being prepared, the provisional index for a given month is
compiled and released. This index subsequently revised twice, namely, in the next month and the
following third month.
Quality of Data :
39. In the absence of availability of regular monthly production data from the unorganised
manufacturing sector, the item basket has been identified on the basis of data from the registered
sector only. Further, the source agency responsible for the small scale sector could not line up the
production data for the items of the revised series. As such, the revised IIP has taken into account
only the data of 18 items of SSI sector included in the existing series. The new series of IIP
would be revised on availability of data on additional items of the small scale sector. Till such
time, the contribution of the unregistered sector, which is growing significantly as compared to
the registered sector will not be reflected in the compilation of the revised IIP for want of data
from this sector.
40. For the registered sector also, the quality of production data supplied by the major source
agencies suffer from substantial non-response on the part of manufacturing units and
consequential estimation resorted to by the sources agencies.
41. The industrial growth based on the revised IIP do not, therefore, seem to reflect the perceived
ground realities. The quality aspect will have to be improved. A public debate on this issue
would surely guide us in our efforts to improve the index.
Salient features of the Revised Series
42. The salient features of the Revised Series with base 1993-94 vis-a-vis the earlier series (Base:
1980-81) of IIP are :a. To have the wider coverage of items, the revised item basket with base 1993-94,
encompasses 543 items grouped into 287 item groups against 352 items in the earlier
series.
b. Recognising the importance of the unorganised sector which has grown significantly in
the recent past, for the first time the weighting diagram of the revised series has taken
into account the contribution of unorganised manufacturing sector alongwith the
organised manufacturing sector.

15. c. To start with the revised IIP has taken into account all the 18 items of earlier series from
the SSI sector. Unlike the earlier series, the SSI items have been allocated individual
weights. The source agency is gearing up to supply production data for some additional
items in the next 3-4 months, and the new series of IIP would be revised on availability of
such data for the SSI sector.
d. The Revised Series has followed the National Industrial Classification NIC-1987 instead
of NIC-1970.
e. As regards the timeliness, the current index of IIP is being released with a time lag of
about six weeks from the reference month. As per SDDS norms of the IMF.
43. In order to improve the quality of production data, the Department of Statistics is having
regular interactions with the source agencies to improve their system of data collection and
estimation procedures.
Data on Indices
44. Following Tables incorporating items included in the item basket for the IIP series with base
1993-94, arranged under various 2-digit categories of the NIC-1987, Use-based categories and
the time series data on 2-digit,sectoral and use-based indices for April'94 onwards are enclosed.
Table 1: 2- digit wise list of items included in the item basket of Index of
Industrial Production (Base 1993-94=100).
Table 2: Use-based classifications of items included in the item basket of
Index of Industrial Production (Base 1993-94=100).
Table 3: Monthly time series 2-digit level and sectoral indices growth
rates,
and
Table 4: Monthly time series Use-based indices and growth.
45. The following tables on the monthly time series 2-digit level and use-based
indices of industrial production with base 1980-81 are also enclosed.
Table 5: Monthly time series 2-digit level indices and growth rate (Base:1980-81)
and
Table 6: Monthly time series use-based level indices and growth rate (Base: 1980-81),