The Ministry of Statistics and Programme Implementation (MoSPI) released the new series of the All India Index of Industrial Production (IIP) with base year 2022–23 on 29th June 2026.
IIP data stands for the Index of Industrial Production data. It is a vital macroeconomic indicator released on monthly basis that measures the short-term changes in the physical volume of production across various industrial sectors in Bharat compared to a specific base year. It is published monthly by the National Statistical Office (NSO) under the Ministry of Statistics and Programme Implementation (MoSPI). Government bodies like the Ministry of Finance and Reserve Bank of India (RBI) use IIP figures for policy making and calculating quarterly GDP estimates.
These IIP Data also reflects a significant portion (roughly 40%) of Eight Core Industries. These eight cores are coal, crude oil, natural gas, refinery products, fertilizers, steel, cement, and electricity. IIP data is complete basket representing the entire industrial economy, while the Eight Core Industries represent the heavy, foundational base of that basket.
Key Highlights:-
1. The IIP growth rate for the month of May 2026 is 5.1 percent as compared to May 2025.
2. The growth rates of the Four sectors are as follows:-
Mining & Quarrying – (1.6%)
Manufacturing – 5.5%
Electricity & Gas Supply – 9.9%
Water Supply, Sewerage & Waste Management – 5.5%
3. The Quick Estimate of IIP stands at 122.7 against 116.7 in May 2025. The indices of Industrial Production for Mining & Quarrying, Manufacturing, Electricity & Gas Supply and Water Supply, Sewerage & Waste Management for the month of May 2026 stand at 112.9, 122.6, 129.6 and 145.1 respectively.
Important Changes:
Govt has decided to adopt Output PPI as Deflator in place of WPI for item groups for which output is collected in value terms. This affects 234 out of the 463 item groups in the IIP basket, representing 36.02 per cent of the total index weight because 234 item groups reports value and not the quantity and output PPI will be used for these 234 items only.
What Does this mean ?
Lets understand this with an example.
Simple TV Factory Example
Imagine a television factory.
Year 2025
- TVs produced: 100
- Factory-gate price per TV: ₹20,000
- Value of output = 100 × ₹20,000 = ₹20 lakh
Year 2026
The factory again produces 100 TVs. However, due to inflation, the factory-gate price increases to ₹22,000
Now,
- TVs produced: 100
- Factory-gate price: ₹22,000
- Value of output = ₹22 lakh
If we simply compare ₹20 lakh with ₹22 lakh, it appears that production has increased by 10%.
But has production actually increased? NO
The factory still produced exactly 100 TVs. The increase is entirely due to higher prices, not higher production.
To solve this, Govt uses a tool known as Deflator.
A deflator is simply a tool that removes the effect of price changes (inflation) from data, so that we can measure actual production, not just higher prices.
To remove the impact of inflation, statisticians calculate:
Real Output = Nominal Output ÷ (Output PPI / 100)
Therefore, Deflator = Output PPI/100 = 1.10
₹22 lakh ÷ 1.10 = ₹20 lakh
After removing the price effect, the real value of production remains ₹20 lakh.
This tells us that:
- Nominal output increased by 10%
- Real production increased by 0%
The factory did not produce more TVs; prices simply became higher.
Earlier, the Index of Industrial Production (IIP) used the Wholesale Price Index (WPI) as the deflator for industries that report production in value terms.
However, WPI is a broad wholesale price index. It does not always capture the actual prices at which manufacturers sell their products.
The Output Producer Price Index (Output PPI) is specifically designed to measure producer (factory-gate) selling prices for the industries which reports value and not the quantity.
Therefore, Output PPI provides a much more accurate measure for removing the effect of price changes from production values. Adoption of output PPI is in line with international best practices and the recommendation of the Technical Advisory Committee (TAC) on the base revision of IIP.
Govt has now revised and released the entire IIP 2022-23 series with Output PPI and it supersedes the earlier WPI based IIP 2022–23 series released on 1st June 2026.
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