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, the generation of electricity and distribution of gaseous fuels may also be included in the new series. Generation of electricity from non-renewable and renewable sources may be separated.
Tap connection
Further, under ‘Water supply, Sewerage, Waste Management’, the number of tap connections in rural and urban areas may be considered a variable for tracking the water supply sub-sector. Similarly, for the 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 a base year of 2011-12 will continue in the IIP with a base year of 2022-23. These include Primary Goods, Capital Goods, Intermediate Goods, Infrastructure & Construction Goods, Consumer Durable Goods and Consumer Non-Durable Goods.
Regarding the price deflator, TAC-IIP recommended adopting the Output PPI (Producer Price Index) 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 permanently closed factories or factories with significantly altered production lines with comparable units, as well as the augmentation of the panel of factories by incorporating newly commissioned large-scale factories that begin producing relevant items during the currency of the IIP series.
The new series will use the Geometric Mean method to link the 2011–12 series to 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 from April 2023 onward, including quick estimates for 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, Water Supply, Sewerage & Waste Management.
Published on May 25, 2026