SYLLABUS:
GS-3: Indian Economy and issues relating to planning, mobilization, of resources, growth, development and employment.
Context: Recently, the Ministry of Statistics and Programme Implementation (MoSPI) released the Quick Estimates of the Index of Industrial Production (IIP) for September 2025, showing a 4.0% year-on-year growth in industrial output.
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• The overall industrial output grew by 4.0% year-on-year, unchanged from the previous month’s quick estimate.
• The manufacturing sector led the growth with a 4.8% expansion, while the mining sector contracted by 0.4%, and electricity generation increased by 3.1%
• The general index stood at 152.8, compared to 146.9 in September 2024.
• Industrial activity moderated to a three-month low, down from 4.3% in July 2025.
• Cumulative IIP growth for April–September 2025–26 stood at 3.0%, the slowest first-half expansion in the last five years.
• In the same period of the previous years, growth was 4.1% (2024–25), 6.3% (2023–24), 7% (2022–23), and 24% (2021-22).
Sectoral and Industry-wise Performance
• Within the manufacturing sector, 13 out of 23 industry groups registered positive growth in September 2025.
• The highest contributors were:
- Manufacture of basic metals (12.3%)
- Manufacture of electrical equipment (28.7%)
- Manufacture of motor vehicles, trailers, and semi-trailers (14.6%)
• The basic metals industry saw strong output from MS slabs, HR coils and sheets of mild steel, and flat alloy steel products.
• Growth in electrical equipment was driven by electric heaters, small transformers, and switchgear and circuit protection apparatus.
• The automobile segment saw increased production of auto components, commercial vehicles, and axles in preparation for the festive season.
About the Index of Industrial Production (IIP)
• The Central Statistical Organisation (CSO), under the National Statistical Office (NSO), Ministry of Statistics and Programme Implementation (MoSPI), is responsible for the compilation and publication of the Index of Industrial Production (IIP) since 1950.
• The IIP is compiled as a simple weighted arithmetic mean of production relatives by using Laspeyre’s formula.
• The base year is always given a value of 100. The current base year for the IIP series in India is 2011-12. So, if the current IIP reads as 116, it means that there has been 16% growth compared to the base year.
• The current IIP basket covers 839 representative items under three sectors –
- Mining – 14.37%
- Manufacturing – 77.63%
- Electricity – 7.99%
• The Eight Core Industries represent 40.27% of the total weight of items incorporated in the Index of Industrial Production (IIP).
• Their performance significantly impacts overall industrial activity and economic growth.
UPSC Mains Practice Question
Q. The Index of Industrial Production (IIP) serves as a key barometer of India’s industrial and economic health. Discuss the recent trends in industrial growth as per the IIP Quick Estimates for September 2025, highlighting the sectoral and industry-wise performance. Also, explain the methodological framework used for compiling the IIP in India.