The government would set up a committee to examine the Index of Industrial Production (IIP) and look into ways to “tighten” various sources of data collection, Prime Minister’s Economic Advisory Council Chairman C Rangarajan said on Thursday.
“I think the Government is now setting up a committee to examine the Index of Industrial Production,” he told reporters here when asked about concerns in some quarters about volatility of Index of Industrial Production data and whether the government would address them. The Index of Industrial Production growth has been revised downwards to 1.14 per cent for January, from the provisional estimates of 6.8 per cent, according to the official data released on Thursday.
Rangarajan pointed out that data relating to IIP comes from several sources, they are then put together by the Ministry and released. “Therefore, we really need to tighten the various sources from which the data are collected”.
The former Reserve Bank of India Governor said industrial production growth rate in February and the revised one for January certainly indicate that industrial productivity has not yet picked up.
“Therefore, overall growth rate of industrial production during the year (2011-12) will only be what we have been indicating earlier 3.8 per cent.” Showing persistent sluggishness in the economy, industrial production growth slowed to 4.1 per cent in February this year, mainly due to poor performance of manufacturing sector and consumer goods segment.
Output of the manufacturing sector, which constitutes over 75 per cent of the index, rose by just four per cent in February, compared to 7.5 per cent in the same month last year.