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Index of Industrial Production (IIP)
Why is it in the news?
- As per data released by Central Statistics Office (CSO), factory output growth based on Index of Industrial Production (IIP) fell to 3.1% in May.
- It was 4.3% in April.
- The drop is mainly due to subdued performance of mining and manufacturing sectors.
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Possible Causes:
- Expansion in the mining sector was merely 3.2 per cent in May, as compared to 5.8 per cent in the year-ago month.
- There was a slowdown in the manufacturing sector, which grew at 2.5 per cent in May compared to 3.6 per cent a year ago.
- The capital goods output, which is a barometer of investment, at 0.8 per cent compared to May last year which was 6.4 per cent.
- In terms of industries, 12 out of the 23 industry groups in the manufacturing sector have shown positive growth in May over the same month last year.
Index of Industrial Production (IIP):
- IIP is the number denoting the condition of industrial production during a certain period.
- IIP shows the status of industrial activity, you can find out if the industrial activity has increased, decreased or remained same.
- It is important for the IIP to reflect true industrial trends, which in turn has an impact on the policy decision-making.
- These figures are calculated in reference to the base year. Currently the base year is 2011-12.
- Index of Industrial Production (IIP) is released by the Central Statistics Office (CSO) of the Ministry of Statistics and Programme Implementation.
- It dose not consider measuring of informal sector activity . Same with the PMI.
Source
Indian Express