Context:

According to the Ministry of Statistics and Program Implementation (MoSPI), the Index of Industrial Production (IIP) recorded a growth of 3.5% in October 2024.

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The IIP growth rate rose to 3.5% in October from 3.1% in September 2024. In absolute terms, the IIP was at a four-month high with the IIP at 149.9. 

Among the major industries, manufacturing saw the highest growth of 4.1%. Mining and electricity growth remained low at 0.9% and 2% respectively. 

Within the manufacturing sector, 18 out of 23 industry groups have recorded a positive growth in October over the same month of the previous year.

• The top three positive contributors are – “Manufacture of basic metals” (3.5%), “Manufacture of electrical equipment” (33.1%) and “Manufacture of coke and refined petroleum products” (5.6%).

Consumer durables grew at 5.9% in October, compared to 6.5% in September. This is linked to increased production for the festive season. Consumer non-durables grew at 2.7%. 

Other end-use segments also showed growth, which includes primary goods (2.6%), intermediate goods (3.7%), and infrastructure goods (4%). 

Capital good output also grew at 3.1% but is 6.1% below September levels. 

Overall industrial output growth is at a low 4%, compared to 2023-24 when it had risen 7% in the first seven months of the year.  

What is the Index of Industrial Production (IIP)?

The IIP is an index that shows the growth rates in different industry groups of the economy in a stipulated period.

It is computed and published by the Central Statistics Office (CSO) under the Ministry of Statistics and Programme Implementation (MoSPI) monthly.

The CSO chooses a basket of industrial products, creates an index by giving different weights to each sector, and then tracks the production every month.

It measures the growth rate of industry groups as per:

• Sectoral classification: Mining, Manufacturing, and Electricity.
• Use-based classification: Basic Goods, Capital Goods, Intermediate Goods, Infrastructure/Construction, Consumer durables, and Consumer non-durables.

Currently, IIP figures are calculated considering 2011-2012 as the base year. 

The Eight Core Sector industries comprise 40.27% of the weight of items included in the IIP, also performed well in October, expanding by 3.1% in October, with four experiencing accelerated growth.

• The weights of the industries in the Index of Eight Core Industries are as follows: Petroleum Refinery Products - 28.04% > Electricity - 19.85% > Steel - 17.92% > Coal - 10.33% > Crude Oil - 8.98% > Natural Gas - 6.88% > Cement - 5.37% > Fertilizers - 2.63%.