IIP Current Affairs

Industrial production grows 7.1% in February 2018: CSO

According to data released by the Central Statistics Office (CSO), factory output measured in terms of the Index of Industrial Production (IIP) had grown 7.1% in February 2017. It was mainly driven by robust performance of manufacturing sector coupled with higher offtake of capital goods and consumer durables. The IIP recorded growth of 8.54% in November 2017, 7.1% in December 2017 and 7.4% in January 2018. During April-February period, IIP has slowed to 4.3% from 4.7% compared to same period 2017-18 fiscal.

Sector wise IIP projection

Index of Industrial Production (IIP)

The IIP is composite indicator that measures short-term changes in volume of production of basket of industrial products during given period with respect to chosen base period. It is compiled and published monthly by Central Statistical Organization (CSO), Ministry of Statistics and Programme Implementation.

Base year: The CSO had revised the base year of the IIP from 2004-05 to 2011-12 in May 2017 to capture structural changes in economy and improves quality and representativeness of indices. The revised IIP (2011-12) reflects the changes in industrial sector and also aligns it with base year of other macroeconomic indicators like Wholesale Price Index (WPI) and Gross Domestic Product (GDP).

Sector wise items and weightages: It covers 407 item groups. Sector wise, the items included falls into 3 categories viz. Manufacturing (405 items), Mining (1 items) & Electricity (1 item). The weights of the three sectors are 77.63%, 14.37%, 7.9% respectively. The revised combined weightage of eight core Industries in the IIP is 40.27%.

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Core sector grows at 6.7% in January 2018

According to index of eight core industries released by Ministry of Commerce and Industry, Core sector growth has grown at faster pace of 6.7% in January 2018 against 3.4% in January 2017. The eight core sectors had grown by 4.2% in December 2017 and 7.4% in November 2017.

Key Facts

Cumulatively, the growth in eight core sectors during April-January this fiscal slowed to 4.3% as against 5.1% in the same period last fiscal. The growth in key sectors will have implications for Index of Industrial Production (IIP) as these eight segments account for about 41% of the total factory output.

Breakup of January performance:

  • Petroleum refinery production: It jumped up by 11%.
  • Cement output: It jumped up by 20.7%.
  • Electricity generation: Its growth rose to 8.2%.
  • Coal sector output: It improved by 3%.
  • Steel production: It grew by 3.7%.
  • Crude oil production: It dropped by 3.2%.
  • Fertiliser output: It dropped by 1.6%.
  • Natural gas: Its output fell by 1%.

Core Industry sector

Core industry can be defined as main industry of the economy. In most countries, there is particular industry that seems to be backbone of all other industries and it qualifies to be the core industry. In India, there are eight core sectors comprising of coal, crude oil, natural gas, petroleum refinery products, fertilisers, steel, cement and electricity.

Latest weightage in core sectors: Petroleum Refinery production (weight: 28.04%), Electricity generation (19.85%), Steel production (17.92%), Coal production (10.33%), Crude Oil production (8.98%), Natural Gas production (6.88%), Cement production (5.37%), Fertilizers production (2.63%)

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