OFFICIAL STATISTICS SPECIALLY DESIGNED FOR INDIAN STATISTICAL SERVICE (ISS) AND OTHER GOVERNMENT & PRIVATE SECTOR STATISTICAL EXAMINATIONS
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When the news says "industrial output grew 4.9% in April 2026," that number comes from the Index of Industrial Production (IIP). It is one of the most important high-frequency indicators of the Indian economy, and a favourite of the Indian Statistical Service (ISS) paper setters. It also shows up in RBI, NABARD, SSC and university statistics exams. Since MoSPI has just launched a new series with base year 2022-23, this topic is more exam-relevant than ever. This guide gives you the concept, the methodology and three exam-style questions.
1. What is the Index of Industrial Production?
The IIP measures the short-term change in the volume of production of a basket of industrial products, compared with a chosen base period. If the index for a month is 118.9 and the base year is 100, industrial output is 18.9% higher than the base-year level.
Why examiners love this topic
IIP links index number theory, weighting schemes, deflation and national accounts in one place. It is also a timely topic: the base year has just moved from 2011-12 to 2022-23, so a question can be theoretical, numerical or a comparison of the two series.
2. Who compiles IIP in India and how?
The National Statistics Office (NSO) under the Ministry of Statistics and Programme Implementation (MoSPI) compiles and releases the IIP every month, with a time lag of about 28 days. The current series uses 2022-23 as the base year, the same base as the new GDP series. Production data comes from 16 source agencies such as the Indian Bureau of Mines, the Central Electricity Authority and the Ministry of Steel.
Basket
1,042 products grouped into 463 item groups, up from 839 items in 407 groups in the old series.
Weights
Based on Gross Value Added from National Accounts and the Annual Survey of Industries for 2022-23.
Sectors
Four sectors now: Mining, Manufacturing, Electricity & Gas Supply, and Water Supply, Sewerage & Waste Management.
Exam tip
The new series was first released on 1 June 2026 (April 2026 data). Papers set before that date may still refer to the 2011-12 series with three sectors. Always read the question for the base year, and check the latest MoSPI press release before your exam.
3. The formula behind IIP
IIP is a Laspeyres-type quantity index: weights are fixed at the base period, and only production volumes change.
Here Ii is the production index of the i-th item group or sector, Wi is its weight, and Qi0, Qi1 are base and current production. Where production is reported in value terms, it is first converted to volume by deflating with the Wholesale Price Index (WPI).
- Strength: simple, timely, and needs only production data plus fixed weights.
- Weakness: fixed weights become outdated as new products appear and old ones fade, which is exactly why the base year is revised.
- Property to remember: it is a quantity (volume) index, not a price index.
4. IIP weights at a glance (Use-based classification)
Notice that primary and intermediate goods carry more than half the total weight. This is why the mix of basic industrial inputs drives the headline number.
Weights are for the 2022-23 base series (total = 100). By sector: Manufacturing 76.06, Mining 11.05, Electricity & Gas 10.87, Water & Waste 2.02. Verify against the latest MoSPI release before quoting.
5. Old series vs new series: the comparison that keeps coming up
| Basis | Old series | New series |
|---|---|---|
| Base year | 2011-12 | 2022-23 |
| Sectors | Mining, Manufacturing, Electricity | Adds Gas Supply and Water Supply, Sewerage & Waste Management |
| Item basket | 839 items, 407 item groups | 1,042 products, 463 item groups |
| Manufacturing weight | 77.63 | 76.06 |
| Mining weight | 14.37 | 11.05 (now includes minor and rare earth minerals) |
| Electricity | Total generation as one indicator | Split into renewable and non-renewable sources |
6. Common mistakes students make
- Writing that IIP covers only mining, manufacturing and electricity. The new series has four sectors.
- Saying IIP is compiled by DPIIT. It is compiled by NSO, MoSPI. DPIIT compiles the Index of Eight Core Industries.
- Quoting 77.63% as the manufacturing weight for the current series. That is the old 2011-12 figure.
- Calling IIP a price index. It measures changes in production volume.
- Mixing up sectoral and use-based classification. The six use-based categories are unchanged in the new series.
7. Three important questions on IIP
Try each one on your own first, then tap the answer.
What does the Index of Industrial Production measure, and which four sectors does the new series (base 2022-23) cover?
Show answer
IIP measures short-term changes in the volume of production of a fixed basket of industrial products relative to a base period. It is a Laspeyres-type index with fixed base-year weights. The four sectors are Mining and Quarrying, Manufacturing, Electricity and Gas Supply, and Water Supply, Sewerage and Waste Management. The last one, along with gas supply, is new in the 2022-23 series.
The sector weights in the new series are 11.053 (Mining), 76.062 (Manufacturing), 10.865 (Electricity and Gas) and 2.020 (Water and Waste). For April 2026 the sector indices are 104.6, 119.3, 125.5 and 146.1. Compute the general IIP. If the index for April 2025 was 113.4, find the growth rate.
Show answer
ΣWiIi = (11.053×104.6) + (76.062×119.3) + (10.865×125.5) + (2.020×146.1)
= 1156.14 + 9074.20 + 1363.56 + 295.12 = 11889.02
ΣWi = 100, so IIP = 11889.02 / 100 = 118.9 (approx.)
Growth rate = (118.9 − 113.4) / 113.4 × 100 = 4.85%, about 4.9% over April 2025.
The base year of the All India IIP has been revised from 2011-12 to 2022-23. Explain why periodic base revision is necessary and discuss the major changes in the new series.
Show answer
Write your answer in four parts. (a) Need: IIP uses fixed weights, so over time new products emerge, old ones become obsolete and the industrial structure shifts. The index then becomes less representative. A new base year also aligns IIP with GDP and WPI, which now use 2022-23. (b) Coverage and basket: gas supply and water supply, sewerage and waste management are added; minor and rare earth minerals enter mining; the basket grows from 839 items (407 groups) to 1,042 products (463 groups). (c) Weights and method: weights come from Gross Value Added (National Accounts) and ASI for 2022-23; electricity is split by renewable and non-renewable sources; value-based item groups rise from 109 to 234 and are deflated with WPI; a provision for substituting closed factories is added; NIC-2025 and 16 source agencies are used. (d) Comparability: because of these changes, the two series are not strictly comparable; a general linking factor of 1.3834 (geometric mean method) is provided, but MoSPI leaves the choice of linking method to users. Conclude that the new series is more representative and closer to international standards.
Key takeaways
- IIP is a volume index of industrial output, compiled monthly by NSO, MoSPI.
- The current series has base year 2022-23 and four sectors, with manufacturing at about 76% of the weight.
- It follows the Laspeyres approach: fixed base-year weights from GVA data.
- Know the old vs new series comparison cold. It is a likely exam question this year.
Everything on Official Statistics, in one book
CPI is just one chapter of the syllabus. If you want the complete picture, this book is built for you.
- Indian official statistical system: MoSPI, NSO, NSC and the data they produce
- National accounts, GDP, IIP, price indices and labour statistics
- NSS surveys, sampling designs and data quality concepts
- Written specially for the ISS exam, and useful for other government and private sector statistical exams
- Concept-focused notes to revise quickly before the exam
Official Statistics for ISS and other Government & Private Sector Statistical Examinations