- Why in news
- On 1 June 2026, MoSPI released the first IIP figures on the new base year 2022-23, replacing 2011-12. It showed 4.9% growth for April 2026, led by 6.2% growth in manufacturing.
- What it is
- The Index of Industrial Production (IIP) is a monthly index that measures changes in the volume of industrial output against a base year. It is compiled and released by MoSPI. The base year is revised from time to time so that the item basket and weights match the current industrial structure.
- Base year change
- The base year of IIP moves from 2011-12 to 2022-23.
- Expanded scope
- Gas supply and water supply, sewerage and waste management are added. Minor and rare earth minerals are now in mining.
- Item basket
- The new basket has 1,042 products mapped to 463 item groups. The old one had 839 items in 407 groups.
- Deflator
- WPI continues to deflate item groups reported in value terms. The Output PPI will be used once it is released and found stable.
- Electricity split
- Electricity is split into renewable (hydro, wind, solar) and non-renewable (thermal, nuclear) sources, weighted by share of revenue in FY 2022-23.
Don’t confuse with IIP vs WPI: IIP measures change in the volume of industrial output. WPI measures wholesale price change and is used here only as a deflator.
Don’t confuse with Base year revision vs linking: Rebasing resets the base and weights. Linking factors help join old and new series, but MoSPI does not prescribe a linking method.
Economy terms and data: 42 Prelims questions since 2013, rising in recent years; they test what a term or instrument means. In Mains, 12 news-triggered questions.
Why it matters
- A current base year and weights make IIP a better guide to today's industrial structure, for policy and GDP estimates.
- Separate renewable and non-renewable electricity indices track the energy transition.
- Wider coverage and use of NIC and WPI align IIP better with global standards.
Problems
- Old and new growth rates are not strictly comparable, which breaks trend analysis.
- Water, sewerage and waste have no old series, so no linking factor can be computed.
- Quick estimates rely on timely reporting from 16 source agencies and on a panel of factories.
Way forward
- Switch to Output PPI deflators once it is released and tested for stability.
- Keep substituting closed factories so the panel stays representative.
- Improve timeliness and coverage of source-agency data.
Put in your answer
April 2026 IIP: Growth was 4.9%, with manufacturing at 6.2% and mining at -5.1%.
Capital goods: Capital goods rose 16.0% in April 2026, the fastest among use-based categories.
- 2017Mains GS3 · Q12Why industrial growth lagged GDP post-reform, and whether industrial policy changes can raise it
- 2021Mains GS3 · Q1Explain how India's GDP computation methodology changed after 2015
- 2012Prelims Q39Which items are among the Eight Core Industries with combined 37.90% IIP weight
- 2015Prelims Q8Which Eight Core Industries item carries the highest weight in the index
UPSC’s own questions that come close to this issue, from our Prelims and Mains banks.
Prelims practice · Statements
Ours, not from a UPSC paper
Consider the following statements:
- 1.The new IIP series with base year 2022-23 has widened its coverage to include Gas Supply and Water Supply, Sewerage and Waste Management, while keeping Mining, Manufacturing and Electricity.
- 2.In the new series, the Producer Price Index has replaced the Wholesale Price Index for deflating item groups whose production is reported in value terms.
- 3.The new series compiles the electricity index as a weighted index of electricity generated from renewable and non-renewable sources.
Which of the statements given above is/are correct?
True or false?
1 of 6
Statements the way Prelims prints them. Say first, then see the fact.
1.The new IIP series has 2022-23 as its base year, replacing 2011-12.
True. Base moved from 2011-12 to 2022-23.
2.The new IIP series adds Gas Supply and Water Supply, Sewerage and Waste Management to the existing sectors.
True. Coverage widened to include these activities.
3.The new series uses the Producer Price Index to deflate value-based item groups.
False. WPI continues to be used; Output PPI will be used only after release and a stability check.
4.The new item basket covers 463 item groups, up from 407 in the 2011-12 series.
True. 463 item groups versus 407.
5.The Use-Based Classification in the new series has the same six categories as the 2011-12 series.
True. The six categories continue; item classification within them was reviewed.
6.In the new series, the electricity index treats hydro power as a non-renewable source.
False. Renewable covers hydro, wind and solar; non-renewable covers thermal and nuclear.
Written by us from the release, not by UPSC; checked by a second model.
Mains practice
10 marks · 150 words
MoSPI has released the first Index of Industrial Production figures on the new base year 2022-23, replacing 2011-12, with wider coverage, a larger item basket and a revised weighting structure. Examine why base year revisions are needed for economic indicators such as the IIP. Discuss the challenges they create for comparing data across series.
Worth revising until Prelims 2028: most news questions come within two years of the event.