Iip Index To Be Updated, 1993-94 To Be Base Year

The department of statistics has decided to substantially expand the list of manufactured goods to chart the monthly index of industrial production (IIP). At least 200 new items will be added to the present list of 352 items being used to determine overall industrial productivity.

The department has drawn up a provisional list of 670 items for the purpose. Many of these items will have to be taken off the list because it may not be possible to access primary data on all of them on a regular basis. We might end up with 450-500 items, department sources said.

The departments latest exercise also involves changing the base year for the IIP from 1980-81 to 1993-94 to give a fuller and more accurate idea of the industrial scenario. A system of announcing state-wise IIPs is also being worked out in order to reflect the imbalances in industrial growth more accurately.

Sources said several new items from the computer, electronics, readymade garment, food processing, petro-chemicals and plastic industries will be added to the list because of the widespread expansion in these sectors since the list was last drawn up using 1980-81 as the base year.

A technical advisory committee headed by M S Maulik, a senior official in the department, has been set up to work out the methodology for allocating weightage to both the existing items and the new ones. The committee is expected to complete its work in about a months time while the department will take another three months to actually allocate the weightage to different items.

With new items being added to the basket, the weightage given to different items in determining the IIP will also undergo drastic changes.

At present, 77 per cent weightage is given to manufacturing while mining and electricity are allocated a weightage of 11.5 per cent each.

In view of the move to change the base year of the IIP to 1993-94, the new IIP is expected to reflect the sea change that has taken place in the quality and diversity of industrial production in the country in a more reliable manner than it does at present.

Some of the items on the existing list may be scrapped while a new set of weightage accorded to the remaining ones.

The current list of items has 290 under manufactured goods and 61 minerals and electricity which is regarded as one item. Weightage is allocated to each item according to its contribution to overall industrial production in the country.

The department will formulate the methodology for charting state IIPs and passing them on to the state governments. The state governments, on their part, are expected to collect and process primary data to arrive at their respective IIPs.