Understanding ‘The index of Industrial Production (IIP)’ & Eight Core Industries

Performance of Eight Core Industries Yearly Growth Rate India 2014 Chart

The index of Industrial Production (IIP) conveys the status of production in the industrial sector of an economy in a given period of time, in comparison with a fixed reference point in the past. The IIP numbers, in India use 2004-05 as the base year for comparison.

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The current Index of Industrial Production (IIP) with base 2004-05 has a broader coverage of 682 items comprising 61 from Mining & Quarrying, 620 from Manufacturing and 1 from Electricity Sector having the weightage of 14.16%, 75.53% and 10.32% respectively in the all-India IIP.

IIP is compiled using data received from 16 source agencies viz. Department of Industrial Policy & Promotion (DIPP); Indian Bureau of Mines; Central Electricity Authority; Joint Plant Committee; Ministry of Petroleum & Natural Gas; Office of Textile Commissioner; Department of Chemicals & Petrochemicals; Directorate of Sugar; Department of Fertilizers; Directorate of Vanaspati, Vegetable Oils & Fats; Tea Board; Office of Jute Commissioner; Office of Coal Controller; Railway Board; Office of Salt Commissioner and Coffee Board.

The Eight Core Industries comprise nearly 38 % of the weight of items included in the Index of Industrial Production (IIP). They are Coal, Crude Oil, Natural Gas, Petroleum Refinery Products,Fertilizers,Steel, Cement & Electricity.

The combined Index of Eight Core Industries stands at 172.7 in December,2014, which is 2.4 % higher compared to the index of December, 2013. Its cumulative growth during April to December, 2014-15 was 4.4 %.

 

Coal production (weight: 4.38 %) increased by 7.5 % in December, 2014 over December, 2013. Its cumulative index during April to December, 2014-15 increased by 9.1 % over corresponding period of previous year.

Crude Oil production (weight: 5.22 %) declined by 1.4 % in December, 2014 over December, 2013. The cumulative index of Crude Oil during April to December, 2014-15 declined by 0.9 % over the corresponding period of previous year.

Natural Gas production (weight: 1.71 %) declined by 3.5 % in December, 2014. Its cumulative index during April to December, 2014-15 declined by 5.1 % over the corresponding period of previous year.

Refinery Products (0.93% of Crude Throughput)
Petroleum Refinery production (weight: 5.94%) increased by 6.1 % in December, 2014. Its cumulative index during April to December, 2014-15 increased by 0.2 % over the corresponding period of previous year.

Fertilizer production (weight: 1.25%) declined by 1.6 % in December, 2014. Its cumulative index during April to December, 2014-15 declined by 1.4 % over the corresponding period of previous year.

Steel (Alloy + Non-Alloy)
Steel production (weight: 6.68%) declined by 2.4 % in December, 2014. Its cumulative index during April to December, 2014-15 increased by 1.6 % over the corresponding period of previous year.

Cement production (weight: 2.41%) increased by 3.8 % in December, 2014. Its cumulative growth during April to December, 2014-15 was 7.9 % over the corresponding period of previous year.

Electricity generation (weight: 10.32%) increased by 3.7 % in December, 2014 and it registered a cumulative growth of 9.7 % during April to December, 2014-15 over the corresponding period of previous year.

 

Source: Release of the Ministry of Commerce & Industry, 02-February-2015 , Press Information Bureau, Government of India & MOSPI (Ministry of Statistics & Programme Implementation)