A key feature of the new series is the expansion of coverage beyond the traditional mining, manufacturing and electricity sectors. For the first time, the revised IIP is proposed to include gas supply and water supply, sewerage and waste management, while also broadening mining coverage to minor minerals and rare earth minerals. It will also offer greater granularity by publishing separate indices for renewable and non-renewable electricity generation, fuel minerals, metallic minerals, non-metallic minerals, gas supply, and water and waste services.
Revising the base year ensures that IIP accurately represents current production patterns and provides more reliable data for economic analysis and policy-making, according to the statistics ministry. The revision aligns it with other major macroeconomic indicators like
gross domestic product (GDP) and
wholesale price index (WPI) that share FY23 as the anchor year. The move comes months after the GDP and WPI series were overhauled earlier this year.
The basket has been expanded to 463 item groups from 407 in the old series. It added 120 new item groups and dropped 64.
New additions include cards with magnetic stripes, closed circuit television (CCTV) cameras, non-woven textiles, parts of aircraft and spacecraft, stents and vaccines other than veterinary. Kerosene, fluorescent tubes and compact fluorescent lamps (CFLs), and certain tyre tubes have been removed from the basket.
In a major methodological shift, the new series includes manufacturing items from the NEC (not elsewhere classified)
category. This is unlike the FY12 series which excluded such items from the selection frame and redistributed their output across other items in the industry group.
In the new IIP series, NEC items have been retained, with field officers revisiting factories to identify the specific products falling under these categories. This will make the index coverage more representative.
Mospi has also tightened the logic of item selection. For manufacturing, the basket has been drawn using Annual Survey of Industries (ASI) data for FY22 and FY23. For other sectors, the basket is based on measurable outputs and consultations with relevant agencies, including the Indian Bureau of Mines for minerals.
On deflators, the committee behind the revision — Technical Advisory Committee for base year revision of All India IIP (TAC-IIP) has called for eventually replacing WPI-based deflators with the Output Producer Price Index (PPI) once it becomes operational. To be sure, WPI will continue as an interim measure.
The committee recommended a linking factor at the sectoral level using the geometric mean method, periodic factory substitution to address closures and line changes, and later consideration of chain-linked and seasonally adjusted versions once the time series becomes sufficiently long and stable.
The committee has recommended that state level IIP should be aligned with the all-India series in scope, methodology and classification to enable meaningful comparison across states and Union territories (UTs).
IIP is one of India’s earliest high-frequency indicators. It is widely used for measuring short-term industrial performance, policy formulation, GDP estimation, and economic analysis. By widening the basket, revising the weights and bringing in newer sectors and products, the new series ensures that the metric continues to accurately reflect evolving economic realities.
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