Smart things to know about Index of Industrial Production

Posted by: Labdhi Mehta on Aug 28, 2017, 06.30 AM IST

1. IIP is an index for India, which points out the growth of various sectors in an economy such as mineral mining, electricity and manufacturing.

2. It measures changes in the production of a basket of industrial products during a given time period, compared to a base year.

3. The CSO revised the base year of IIP from 2004-05 to 2011-12 to reflect changes in the industrial sector. It is now aligned with the base year of other indicators like the WPI and GDP.

4. Eight core industries comprise nearly 40.27% of the weight of items included in the IIP. These are electricity, steel, refinery products, crude, coal, cement, natural gas and fertilizers.

5. IIP is an excellent indicator of industrial activity, especially manufacturing. It is a lead indicator of corporate earnings as IIP numbers measure production and this translates into sales and revenues for companies.

(The content on this page is courtesy Centre for Investment Education and Learning (CIEL). Contributions by Girija Gadre, Arti Bhargava and Labdhi Mehta.) This article appeared in Economic Times dated Aug 28, 2017, 06.30 AM IST