Context
- According to the National Statistics Office (NSO), India’s Index of Industrial Production (IIP) grew by 7.3% in June 2026, the highest growth recorded in the last 23 months.
- The growth was driven mainly by the Manufacturing, Electricity and Capital Goods sectors.
What is the Index of Industrial Production (IIP)?
- The Index of Industrial Production (IIP) is a monthly composite index that measures the change in the volume of industrial production in India. It is one of the most important high-frequency economic indicators, used to assess the short-term performance of the industrial sector and track the pace of economic activity.
Released By
- National Statistics Office (NSO)
- Under the Ministry of Statistics and Programme Implementation (MoSPI)
Base Year
- 2022–23
Sectors Covered
The IIP tracks production across three major industrial sectors:
- Mining
- Manufacturing
- Electricity
Why is it Important?
Industrial production is one of the earliest indicators of economic performance. A sustained rise in IIP generally indicates:
- Higher industrial output
- Rising investment activity
- Improving domestic demand
- Stronger economic growth
IIP vs GDP
| IIP | GDP |
| Measures industrial production only | Measures total economic output |
| Monthly indicator | Quarterly/Annual indicator |
| Covers only industry | Covers all sectors of the economy |
| Important Current To Concept from this article for UPSC Industrial Production (IIP) Capital expenditure |
Q. With reference to the Index of Industrial Production (IIP), consider the following statements:
1. It is compiled by the National Statistics Office (NSO).
2. It measures industrial production in Mining, Manufacturing and Electricity sectors.
3. Manufacturing has the highest weight in the index.
4. It measures the value of industrial production at current prices.
Which of the statements given above are correct?
(a) 1, 2 and 3 only
(b) 1 and 4 only
(c) 2 and 3 only
(d) 1, 2, 3 and 4
Answer: (a) 1, 2 and 3 only
Explanation:
• Statement 1 is Correct: The Index of Industrial Production (IIP) is compiled and released by the National Statistics Office (NSO) under the Ministry of Statistics and Programme Implementation (MoSPI).
• Statement 2 is Correct: IIP measures the volume of industrial production in the Mining, Manufacturing, and Electricity sectors.
• Statement 3 is Correct: Among the three sectors, Manufacturing has the highest weight in the IIP, making it the largest contributor to overall industrial growth.
• Statement 4 is Incorrect: IIP measures the volume (quantity) of industrial production, not the value of production at current prices. Therefore, it is a volume-based index, not a value-based indicator.