SYLLABUS

GS-3: Indian Economy and issues relating to planning, mobilization of resources, growth, development and employment. Effects of liberalization on the economy, changes in industrial policy and their effects on industrial growth.

Context: The Ministry of Statistics and Programme Implementation (MoSPI) has released the first All India Index of Industrial Production (IIP) estimates under the revised 2022–23 base year series, with industrial output growing 4.9% in April 2026.

Key Highlights

• Industrial Growth: India's industrial output grew by 4.9% year-on-year in April 2026. 

• The Quick Estimate of IIP stood at 118.9 compared to 113.4 in April 2025.

• Manufacturing Drives Growth: Manufacturing, which carries the highest weight in the index (76.06%), grew by 6.2% and emerged as the principal driver of industrial expansion.

• Sector-wise Performance: Electricity & Gas Supply recorded growth of 4.9%, while Water Supply, Sewerage & Waste Management expanded by 6.6%. 

• Mining & Quarrying contracted by 5.1% during the month.

• Manufacturing Sector Performance: Seventeen out of twenty-three manufacturing industry groups recorded positive growth in April 2026. 

• The strongest contributors were electrical equipment (19.2%), machinery and equipment n.e.c. (12.9%), and motor vehicles, trailers and semi-trailers (12.7%).

• Other Fast-Growing Manufacturing Industries: Other transport equipment grew by 18.9%, textiles by 15.6%, paper and paper products by 13.8%, fabricated metal products by 11.7%, and basic metals by 5.8%.

• Use-Based Classification: Capital Goods recorded the highest growth of 16.0%, followed by Intermediate Goods (7.7%) and Infrastructure/Construction Goods (7.1%). 

• Consumer Durables and Consumer Non-Durables grew by 4.3% and 2.8%, respectively.

• Major Contributors to Industrial Growth: Intermediate Goods, Capital Goods and Infrastructure/Construction Goods were the largest contributors to overall industrial growth during April 2026.

• Revised Historical Growth Rates: According to the revised IIP series, industrial growth stood at 6.7% in 2023–24, 6.4% in 2024–25, and 4.3% in 2025–26, higher than the corresponding estimates under the previous series in most years.

About the Index of Industrial Production (IIP)

• The Index of Industrial Production (IIP) measures changes in the volume of industrial production with respect to a base year. 

• It is compiled and released monthly by the National Statistics Office (NSO) under the Ministry of Statistics and Programme Implementation (MoSPI). 

• It is a key indicator of industrial sector performance and overall economic activity. 

• Base Year Revision (2011-12 to 2022-23)

• MoSPI has revised the IIP base year from 2011-12 to 2022-23 under the recommendations of the Technical Advisory Committee for Base Year Revision of All India IIP (TAC-IIP). 

• The revision aims to capture structural changes in the economy, technological progress, and the emergence of new industries and products. 

• FY 2022-23 was chosen as the base year as it aligns with the base year of other macroeconomic indicators such as GDP and WPI. 

• This is the 10th revision of the IIP base year since the first series with base year 1937. 

• Expanded Sectoral Coverage: The new series retains Mining & Quarrying, Manufacturing, and Electricity, while adding Gas Supply and Water Supply, Sewerage & Waste Management activities. 

• The Mining sector now includes minor minerals and rare earth minerals in addition to major minerals. 
• Separate indices are released for renewable and non-renewable electricity generation, fuel minerals, metallic minerals, non-metallic minerals, gas supply, and water supply & waste management activities. 

• Expanded Product Basket: The new IIP series covers 1,042 products under 463 item groups, compared to 839 products under 407 item groups in the previous series. 

• A total of 120 new item groups have been added, including CCTV cameras, aircraft and spacecraft parts, non-woven textile products, stents, and vaccines. 
• 64 obsolete item groups such as kerosene, fluorescent tubes, CFLs, printing machinery, and sewing machines have been removed. 
• The revised basket better reflects current industrial production patterns. 

• Revised Weighting Structure: Sectoral weights are based on the share of sectors in Gross Value Added (GVA) for 2022-23. 

• The Manufacturing sector carries the highest weight of 76.06%. 
• Manufacturing weights are based on ASI 2022-23 data, while electricity and mining weights are based on revenue shares and mineral-wise GVA contributions. 

• Methodological Improvements: The revised series adopts National Industrial Classification (NIC) 2025 and increases value-based item groups from 109 to 234. 

• It includes provisions for replacing non-operational factories and handling missing data more effectively. 
• The index continues to be compiled using the Laspeyres fixed-base method. 

• New Data Sources: Four new agencies have been added: 

• IREL (India) Limited. 
• State Directorates of Economics and Statistics. 
• Ministry of Housing and Urban Affairs. 
• Department of Drinking Water and Sanitation. These agencies support the expanded coverage of the revised IIP. 

• Use-Based Classification: The six use-based categories remain unchanged: Primary Goods, Capital Goods, Intermediate Goods, Infrastructure/Construction Goods, Consumer Durables, and Consumer Non-Durables.