India's industrial output index to be revamped next week

India's industrial output index to be revamped next week

India's Ministry of Statistics is planning a major overhaul of the Index of Industrial Production (IIP), the key measure of industrial output next week.

The changes, recommended by a technical advisory panel, include widening sector coverage and adopting a chain-linked framework.

The base year will also be revised from 2011-12 to 2022-23 to better reflect the current industrial structure.

Renewable energy and utilities to be tracked separately

The proposed changes also include tracking renewable power generation separately, and adding utilities such as gas supply, water supply, sewerage, and waste management.

The IIP basket will expand from 407 item groups to 463.

This expansion is part of a broader strategy to provide a more accurate picture of India's evolving industrial landscape.

Changes in mining and manufacturing categories

The manufacturing basket will see 120 new item groups added while 64 will be dropped.

Electricity generation will also be divided into renewable and non-renewable categories to better capture India's energy transition.

Minor minerals and rare earth minerals will be included in mining output, reflecting their growing role in infrastructure, clean energy, and high-tech manufacturing.

Addressing emerging trends in manufacturing

The proposal also calls for retaining "not elsewhere classified" (n.e.c.) items in the manufacturing basket.

This is aimed at improving representation of emerging products and industries.

A formal framework for substituting and augmenting factories to replace closed or outdated units has also been suggested, reflecting changing production patterns in the industrial sector.