New series of data shows, IIP grew 6.3% in April

Business

oi-Shoaib MD

By Shoaib Md

Published: Friday, June 10, 2011, 13:06 [IST]

The industrial output figure for April showed rise of 6.3% over the corresponding month of the previous year, government data showed on Friday. Central Statistics Organisation said that, manufacturing output that constitutes approximately 80% of the industrial production, went up by 6.9 percent.

This is the first time that the data from the new series with a different base year of 2004-05, new components and weightings have been used.

The old series of the annual industrial output growth shows that in April witnessed 4.4%.

Industrial output in FY10, ending in March, grew by 10.5% but the same saw an increase of 7.8% for the FY11.

The new Index of Industrial Production (IIP) has an updated base of 2004-05 starting from the month of April.

The new index was launched by Ministry of statistics and programme implementation (Mospi) with data points from 2005 onwards. This completes the process of updating the three most widely followed macroeconomic indicators released by the government. The other two were GDP series and WPI series, they had been shifted to the new base (2004-05) earlier.

The new series saw the number of goods and manufactured items go up from 281 to 410. The total number of items under the series has increased from 538 earlier to 695.

Many experts believe that the older older series showed high degree of volatility because it captured less processes and data. It is expected that the new series will capture the industrial production process accurately, thus, increasing its reliability.

On concerns from by various ministries on how the output growth was depicted. The series was further modified to better reflect the status of the economy.

For the first time the finance minister has raised concerns on revenue. Earlier, Pranab Mukherjee has pegged that growth projection at 8.75% plus/minus 0.25%.

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