Revisions in Economic Indicators by the Ministry of Statistics and Programme Implementation (Mospi)
The Ministry of Statistics and Programme Implementation (Mospi) is revising key economic indicators to better reflect current economic realities. This includes updates to national accounts, the consumer price index, and soon, the index of industrial production (IIP).
Updates to the Index of Industrial Production (IIP)
- The IIP base year is being revised from 2011-12 to 2022-23.
- Significant changes in industrial activity over the past decade include growth in renewable energy, electronics manufacturing, digital technologies, and critical minerals.
- The new series adds rare-earth minerals, minor minerals, and categories like gas and water supply, while removing items such as kerosene and sewing machines.
- The number of item groups has increased from 407 to 463.
- In manufacturing, 64 item groups have been removed, and 120 new ones added, increasing the total from 405 to 455.
Methodological Improvements
- The Technical Advisory Committee (TAC) aimed to modernize industrial measurement using international best practices.
- Recommendations include using chain-linked indices to reflect dynamic industrial changes and prevent outdated weightings.
Challenges and Recommendations
- India's statistical system faces issues with delayed surveys, uneven state reporting, and weak digital data systems.
- A significant portion of manufacturing is outside the organized sector and difficult to track.
- TAC recommends developing indices for the unincorporated sector, although implementation is pending.
- Tracking service-oriented activities like machinery repair remains challenging due to a lack of reliable metrics.
Strategic Importance and Gaps
- The inclusion of rare-earth minerals aligns with India’s technology and energy ambitions, yet domestic processing capacity is limited despite large reserves.
- The absence of a producer price index (PPI) is a crucial gap in converting value-based data to volume-based estimates.
The revised IIP series is a step toward a modern industrial-measurement system. Priorities include improving data quality, enhancing digital reporting, refining deflators, and capturing data from informal sectors. Continued reform and methodological advancement are essential for IIP to become a credible indicator of India's industrial transformation.
