India is set to significantly revamp its macroeconomic data reporting with the introduction of a new series for the Index of Industrial Production (IIP) on June 1. This updated series, with a base year of 2022-23, aims to provide more accurate and comprehensive estimates of the nation's factory output, following earlier updates to GDP and Consumer Price Index (CPI) calculations.
Expanded Coverage Reflects Modern Economy
The new IIP series will broaden its scope to better reflect the evolving Indian economy. While maintaining coverage of mining, manufacturing, and electricity, it will now include minor minerals, rare earth minerals, gas supply, water supply, sewerage, and waste management sectors. This expansion ensures a more holistic view of industrial activity.
A key enhancement is the inclusion of 120 new item groups, designed to keep pace with contemporary economic demands and consumer trends. These additions range from high-tech products like CCTV cameras, credit and debit cards, and parts of aircraft and spacecraft, to medical items such as stents and non-veterinary vaccines, and articles of nonwoven textiles.
Conversely, 64 item groups that are no longer commonly used have been removed from the basket. These include products like kerosene, fluorescent tubes and CFLs, bicycle and tricycle tubes, tubes for light motor vehicle tyres, as well as printing machinery and sewing machines, reflecting shifts in industrial production and consumption patterns.
Greater Granularity and Methodology Updates
The revamped IIP will offer greater granularity in its reporting. It will provide separate indices for electricity generation through renewable and non-renewable sources, distinct categories for fuel minerals, metallic minerals, and non-metallic minerals, and specific indices for water supply, sewerage, and waste management. In total, the item basket for the new series will comprise 463 item groups, an increase from the previous 407.
The Ministry of Statistics and Programme Implementation, responsible for this update, has indicated that the Wholesale Price Index (WPI) will initially serve as the deflator for value-based items. However, there are plans to transition to the Output Producer Price Index (Output PPI) once it is released, further refining the accuracy of the industrial output measurements.
The first release of the new IIP series on June 1 will present data for May 2026, offering an immediate and clearer picture of India's industrial performance under the updated methodology.