The Ministry of Statistics and Programme Implementation (MoSPI) has revised the base year of the All India Index of Industrial Production (IIP) from 2011–12 to 2022–23 with the objective of making the index more representative of the current structure and dynamics of the industrial sector.
The index’s coverage, components and their weights have been updated to reflect structural economic changes –incorporating new industries and products, and technological advancement.
The coverage has been expanded to 463 groups from 407.
120 new items have been included like gas supply, water supply, sewerage & waste management, credit/debit cards, parts of aircraft and spacecraft, CCTV cameras, and vaccines, among others.
Sub-indices have been introduced to provide additional information, particularly on electricity (that contains renewable and non-renewable generation) and mining and quarrying (to consist of fuel minerals, metallic minerals to include rare earth minerals, and non-metallic minerals to include minor minerals).
On the other hand, 64 outdated items including kerosene, sewing machines, tubes for bicycle and rickshaw tyres have been removed.
This growth was enabled by the heavy-weight manufacturing sector that grew 6.2 per cent, followed by electricity & gas supply and water supply category. However, mining & quarrying contracted by 5.1 per cent, Megha Arora, Director, India Ratings and Research, said.
Within the manufacturing sector, 17 out of 23 industry groups grew on yoy basis in the month. Like previous month, motor vehicles, trailers and semi-trailers, and machinery and equipment continued to lend upward support with growth rates of 12.7 per cent and 12.9 per cent enabled by passenger cars and cranes, respectively, along with growth in electrical equipment of 19.2 per cent (driven by small transformers, circuit breakers, and others), she added.
Within electricity & gas supply, growth was driven by renewable sources, while the impact of West Asia crisis was visible through sharp contraction of 11.2 per cent recorded by gas supply, Arora said.
Notwithstanding higher crude prices and its passthrough to consumers from mid-May 2026, India Ratings expects IIP growth to improve to 5.5% in May 2026 as base effect will help in maintaining the growth momentum.
Government’s continued capex is likely to keep capital goods and infrastructure/construction goods growth momentum in FY27 as well, while electricity generation is expected to further accelerate in May 2026 due to increased demand amidst high summer temperatures, Arora said.
Industrial production could remain subdued in the months ahead due to weaker global demand and supply chain disruptions, Dipti Deshpande, Principal Economist, Crisil Ltd, said.
The larger risk, though, is rising costs. The energy supply shock caused by the conflict in West Asia has morphed into a price shock, with the costs of fuel, transport and other imported inputs increasing, she said.
Cost pressures are already visible, with wholesale inflation jumping to a 42-month high of 8.3 per cent in April, along with consecutive increases in retail prices of diesel and petrol, Deshpande added.
While government capital expenditure and other fiscal support measures such as rationalisation of goods and services tax rates and unconditional cash transfers by states should aid the economy, some moderation in activity is expected. Net-net, we expect gross domestic product (GDP) growth at 6.6 per cent in this fiscal as against 7.6 per cent last fiscal, she added.
For more details: https://www.pib.gov.in/PressReleaseDetail.aspx?PRID=2267531®=3&lang=1