- Index of Industrial Production (IIP) with Base year 2011-12

The weights for the three sectors (mining, manufacturing, and electricity) are based on share of the sector in total domestic production in the base year. The overall weight of the
manufacturing sector is apportioned to the industry groups at the 2-digit, 3-digit- and 4-digit level of the National Industrial Classification (NIC) 2008, on the basis of the Gross Value Added (GVA). The weighting diagram for the current series of IIP is prepared on the basis of GVA up to the 2-digit, 3 and 4 digit level of NIC based on the results of ASI 2011-12. At the final level (i.e. 5 digit level of NIC), weights to items have been distributed on the basis of Gross Value of Output (GVO). The weights of selected items within an industry group are apportioned on the basis of the value of output. Period of Current Index Weights: The current index weights are based on the value of production of the industries during the base year period viz. April, 2011 to March 2012 as reported in the Annual Survey of Industries for the year 2011-12. The same weights are used until the revision of the base year is done.
Frequency of Weight Updates: The weights are revised with every revision of the base year. The base year was revised to 2011-12 from 2004-05 in May 2017. Efforts would be made to revise the base year once in every five years as per UNSD's recommendations (the previous base years of the index were 2004-05, 1993-94, 1980-81, 1970, 1956, 1951
and 1946).
-- Computation of lowest level indices: The lowest level, for which an index is prepared, is the item group. It is compiled as the ratio of production quantity in the current month with
respect to its average monthly production quantity in the base year.
-- Aggregation: The IIP is calculated using the Laspeyres formula as a weighted arithmetic average of production relatives. The index is primarily quantity based, although for some
item groups the quantity relatives are obtained by price deflation.

The index at group level/ 2-digit level of NIC is compiled by using the Laspeyeres' formula, i.e.: I =uppercase sigm (Wi*Ri)/ uppercase sigm(Wi) where Ri is the production relative and Wi is the weight of an item. The index is prepared for each two-digit level of NIC. Also the index is prepared on the basis of the following use-based classification: Primary Goods, Capital Goods, Intermediate Goods, Infrastructure/ Construction Goods, Durable Consumer Goods and Non-Durable Consumer Goods.

-- Alignment of Value of Weights and Base Period: No alignment of the weights is required as the weights as well as the base year production relate to the same reference period viz. April, 2011 to March 2012.

-- Linking of Re-weighted Index to Historical Index: Whenever there is change in the base year, the new series can be linked with the old series by preparing linked series. For the common period, the index series are available with both old weights & new weights for linking the two series.

-- Reference Period: The reference period for the current index of industrial production in India is 2011-12, when the index=100.
-- Seasonally Adjusted Indices: Not being done at present.