Industrial production shrinks 0.3% in December
In news:
- The Index of Industrial Production (IIP) had grown by 2.5% in December 2018.
- India’s industrial production growth turned negative in December, contracting by 0.3%, mainly on account of a decline in manufacturing sector output
- According to the National Statistical Office (NSO) data, the manufacturing sector output contracted by 1.2% in December 2019 as against a growth 2.9%
From Prelims Point of View:
Index of Industrial Production
- Growth rates in different industry groups of the economy in a fixed period of time.
- It is compiled and published monthly by the Central Statistical Organization (CSO), Ministry of Statistics and Programme Implementation.
Composite indicator rate of industry groups classified under:
- Broad sectors, namely, Mining, Manufacturing, and Electricity.
- Use-based sectors, namely Basic Goods, Capital Goods, and Intermediate Goods.
Core industries of India represent about 40% of the weight of items that are included in the IIP.
Significance of IIP :
- IIP is the only measure on the physical volume of production.
- It is used by government agencies including the Ministry of Finance, the Reserve Bank of India, etc, for policy-making purposes.
- IIP remains extremely relevant for the calculation of the quarterly and advance GDP estimates.
