India's IIP grows 3% in March

Sector-wise Performance

Sector

March Growth

February (Revised)

Manufacturing

3.0%

2.8%

Mining

0.4%

1.6%

Electricity

6.3%

3.6%

So, while electricity generation was strong (likely due to increased demand), mining slowed significantly, pulling down the overall number.

Fact Box: Industrial Output

• Industrial output refers to the total production of industrial goods in the country—mainly from manufacturing, mining, and electricity sectors.
• In India, this is measured using the Index of Industrial Production (IIP), which acts as a crucial economic indicator.
• IIP is a monthly economic indicator that measures the growth rate and performance of various industrial sectors in an economy over a given period.
• In simple terms, it tracks how much industrial production (like goods from factories, mines, and power plants) has increased or decreased compared to a reference point (called the base year). Base year = 2011-12.
  • A higher IIP suggests industrial activity is expanding, which typically supports job creation, GDP growth, and better income levels.
  • Conversely, slow growth can signal stress in the real economy, especially in manufacturing-heavy sectors like automobiles, electronics, etc.
• Broad sectors covered under IIP: Manufacturing, Mining, Electricity
• The National Statistical Office (NSO) under the Ministry of Statistics and Programme Implementation (MoSPI) releases the IIP data every month.
• The data is now released on the 28th of every month (starting from 2025), earlier than the previous schedule.
• Before the IIP is released, the Index of Eight Core Industries (ICI) is prepared every month and released by the Office of the Economic Adviser (OEA), Department for Promotion of Industry and Internal Trade (DPIIT), and Ministry of Commerce & Industry.
• Components to calculate the ICI:
  • Coal – Coal production, excluding Coking coal.
  • Electricity – Electricity generation of thermal, nuclear, hydro, imports from Bhutan.
  • Crude Oil – Total crude oil production.
  • Cement – Production in large plants and mini plants.
  • Natural Gas – Total production of natural gas.
  • Steel – Production of alloy and non-alloy steel only.
  • Refinery Products – Total refinery production.
  • Fertilizer – Urea, ammonium sulfate, calcium ammonium nitrate, complex grade fertilizer, and single superphosphate, among others.

PYQ

Q. In India the overall Index of Industrial Production, the Indices of Eighth Core Industries have combined weight of 37.90%. Which of the following are among those Eight Core Industries? (2012)

1. Cement
   
2. Fertilizers
3. Natural Gas
4. Refinery products
5. Textiles

Select the correct answer using the codes given below:

1. 1 and 5 only
2. 2, 3 and 4 only
3. 1, 2, 3 and 4 only
4. 1, 2, 3, 4 and 5

Solution: (c)

Q. In the ‘Index of Eight Core Industries’, which one of the following is given the highest weight? (2015)

1. Coal production
2. Electricity generation
3. Fertilizer production
4. Steel production

Solution: (b)