DAILY NEWS ANALYSIS
08 January, 2020
6 Min Read
Syllabus subtopic: Indian Economy and issues relating to planning, mobilization of resources, growth, development and employment.
Prelims and Mains focus: about SCES: mandate and significance; About IIP
News: The newly constituted Standing Committee on Economic Statistics (SCES), chaired by former Chief Statistician of India Pronab Sen, in its first meeting on Tuesday decided to form three sub-groups.
What are the functions of the three sub-groups?
One sub-group will look into the details of the Periodic Labour Force Survey and time use survey; the second group will look into the Index of Industrial Production (IIP) and Annual Survey of Industries (ASI), and the third group will look into details of Annual Survey of unincorporated sector enterprises and services sector data.
Minutes of the 1st meet
About the SCES
Mandate of SCES
About Index of Industrial Production (IIP)
Importance of IIP
Index of Industrial Production (IIP) – New series
Any index is to be updated regularly by including new items, updating the base year, changing the methodology in the estimation of index to reflect the changing environment. Here, the CSO brought a new IIP by incorporating certain new elements. This is needed to accommodate the changes happening in the financial sector. Latest changes were made on 12th May 2017.
Modification of the Index of Industrial Production
Following are the main changes brought in the new series of IIP:
Data collection for IIP
Components of IIP
Following are the three sectors of the IIP as per the revision based on 2011-12 series.
(i) Mining,
(ii) Manufacturing and
(iii) Electricity as in the old series.
Table: Sectors, number of item groups and weight as per the 2011-12 IIP series
Sector |
Number of item groups |
Weight (%) |
1. Mining |
1 |
14.373 |
2. Manufacturing |
405 |
77.633 |
3. Electricity |
1 |
7.994 |
Total |
407 |
100 |
Use-based classification of industries under Index of Industrial Production
Besides the main classification of the index into three sectors ie., mining, manufacturing and electricity sectors, the IIP is also prepared based on Use based classification. Here, the industries are divided into six use-based sectors:
Table: Weights of the different sectors under the used based classification – 2011-12 series
Sector |
Number of groups |
Weights |
Primary Goods |
15 |
34.05 |
Capital Goods |
67 |
8.22 |
Intermediate Goods |
110 |
17.22 |
Infrastructure/ Construction goods |
29 |
12.34 |
Consumer durables |
86 |
12.84 |
Consumer nondurables |
100 |
15.33 |
Total |
407 |
100 |
Core industries in the IIP
Coal, Crude Oil, Natural Gas, Refinery Products, Fertilizers, Steel, Cement and Electricity.
Industry |
Weight |
Coal |
10.33 |
Crude oil |
8.98 |
Natural Gas |
6.88 |
Refinery Products |
28.04 |
Fertilisers |
2.63 |
Steel |
17.92 |
Cement |
5.37 |
Electricity |
19.85 |
Total |
100 |
The table here shows the eight core industries and their weights. Refinery products has the largest weights among the core industries.
Source: Indian Express
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