Data doubts: On the latest IIP dataset
The Index of Industrial Production (IIP) is a critical macroeconomic indicator used to monitor the performance of India's industrial sector. This article highlights growing concerns regarding the volatility, reliability, and methodological inconsistencies in the latest IIP data release. Ensuring the accuracy of such high-frequency data is vital for robust monetary and fiscal policy formulation.
Read source at The Hindu — Editorial →Mains Practice Question
Reliable and timely macroeconomic data is the cornerstone of effective policymaking. In light of the ongoing debates regarding the volatility of the Index of Industrial Production (IIP) datasets, critically analyze the challenges in measuring industrial growth in India and suggest measures to improve data quality.
150 words
Practice this in the exam hall →Prelims Practice MCQ
With reference to the Index of Industrial Production (IIP) in India, consider the following statements: 1. It is compiled and published monthly by the Office of the Economic Adviser, Ministry of Commerce and Industry. 2. The Eight Core Industries comprise more than 40% of the weight of items included in the IIP. 3. The current base year for the calculation of IIP is 2011-12. Which of the statements given above are correct?
- A.1 and 2 only
- B.2 and 3 only
- C.3 only
- D.1, 2 and 3
Statement 1 is incorrect: The Index of Industrial Production (IIP) is compiled and published monthly by the National Statistical Office (NSO), Ministry of Statistics and Programme Implementation (MoSPI). Statement 2 is correct: The eight core industries (Coal, Crude Oil, Natural Gas, Refinery Products, Fertilizers, Steel, Cement, and Electricity) comprise 40.27% of the weight of items included in the IIP. Statement 3 is correct: The current base year for IIP calculation is 2011-12.
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