The Central Statistics Office (CSO), Ministry of Statistics and Programme Implementation, does the Base Year Revision of the macroeconomic indicators, as a regular exercise, to capture structural changes in the economy and improve the quality and representativeness of the indices.
In this direction, the base year of the all-India Index of Industrial Production (IIP) has also been revised from 2004-05 to 2011-12 to not only reflect the changes in the industrial sector but to also align it with the base year of other macroeconomic indicators like the Gross Domestic Product (GDP), Wholesale Price Index (WPI).
Highlights | Base Year Revision
- Revisions in the IIP are necessitated to maintain representativeness of the items and producing entities and also address issues relating to the continuous flow of production data.
- In the past, such changes were effected at the time of a revision in the base year. With the release of the new series of IIP (base 2011-12), an institutional mechanism has been established for facilitating dynamic revision of the item list of products and the panel of factories, through a Technical Review Committee, chaired by Secretary, Ministry of Statistics & PI. This Committee will meet at least once a year for identifying new items that need to be included in the item basket and removing those that have lost its relevance in the industrial sector or are no longer being produced.
- Based on the recommendations of the Working Group, the Use-Based Classification (UBC) has been re-framed by replacing “Basic Goods” with “Primary Goods” and introducing a new “Infrastructure/ Construction goods” category. The former change is to improve clarity on the movement of IIP of Primary Goods in the industry and the latter aims to address the linkage of production with Infrastructure and Construction sector.
- As in the 2004-05 series, the practice of using Wholesale Price Index (WPI) to deflate items for which data is reported in value terms will continue. However, the number of items in the new series for which data will be captured in value terms will be 109 instead of 54 in the existing series. Wholesale Price Index (WPI) with base 2011-12 has been used for deflation.
Conclusion | Base Year Revision
IIP in the revised series will continue to represent the Mining, Manufacturing and Electricity sectors. The revised series uses the National Industrial Classification (NIC) 2008 for the purpose of classification of industrial production. The unit coverage of IIP will, as before, cover entities in the organized sector units registered under the Factories Act, 1948.