The upcoming series of the Index of Industrial Production (IIP) will expand its scope to include rare earths, gas supply, and water supply, according to proposals by the Technical Advisory Committee on Base Year Revision (TAC-IIP). Aimed at creating a broader, more representative baseline for industrial activity, the government is set to unveil the revamped IIP series on June 1.
The new series will shift the IIP base year to 2022-23 from the current 2011-12. This marks the third major high-frequency economic indicator to undergo a base-year revision to ensure a more realistic economic reflection, following similar updates to Gross Domestic Product (base year 2022-23) and Consumer Price Index-based retail inflation (base year 2024).
According to the Statistics Ministry, TAC-IIP has recommended inclusion of rare earth and minor minerals under Mining and Quarrying. At the same time, generation of electricity and distribution of gaseous fuels may also be included in the new series. Generation of electricity by non-renewable and renewable sources may be disseminated separately.
Tap connection
Further under ‘Water supply, Sewerage, Waste Management’, the number of tap connection in rural and urban areas may be considered as the variable for tracking the water supply sub sector. Similarly, for sewerage sub sector, the number of Sewerage/septage connections (reported in 500 AMRUT cities) may be considered as the variable. For waste management, waste collected and processed in urban areas may be taken as the variable, it said.
The Committee recommended that the six Use-Based Classification categories adopted in the IIP with base year 2011-12 will continue in IIP with base year 2022-23. These include Primary Goods, Capital Goods, Intermediate Goods, Infrastructure & Construction Goods, Consumer Durable Goods and Consumer Non-Durable Goods.
In terms of price deflator, TAC-IIP recommended that the Output PPI (Producer Price Index) should be adopted as the preferred deflator for the new IIP series (base year 2022–23) once it becomes available. Until then, the WPI may continue to be used as an interim measure. It may be noted that PPI measures the average change over time in the selling prices received by domestic producers for their output.
In addition, methodological enhancements have been proposed in index compilation. These include the substitution of factories that are permanently closed or have significantly altered their production lines with comparable units, as well as the augmentation of panel of the factories by incorporating newly commissioned large-scale factories that begin producing relevant items during the currency of the IIP series.
New series
The new series will adopt the Geometric Mean method for linking the 2011–12 series with the new 2022–23 series. The linking factors will be computed at aggregated levels, namely for the General Index and the Sectoral Indices.
The first release will present index values starting from April 2023 onwards, including quick estimates of April 2026. Along with the All-India General Index of the IIP, the release will also include sector-wise indices for Mining and Quarrying, Manufacturing, Electricity & Gas Supply and Water Supply, Sewerage & Waste Management.
Published on May 25, 2026