The base financial year for the calculation of the all India Index of Industrial Production (IIP) is:
2011-2012
Understanding the Index of Industrial Production (IIP) Base Year
The Index of Industrial Production (IIP) is a crucial economic indicator that measures the changes in the volume of production of a country's industrial sector. It is compiled and published monthly by the National Statistical Office (NSO) of the Ministry of Statistics and Programme Implementation (MoSPI) in India. The IIP reflects the short-term changes in the volume of production in key industrial sectors.
What is a Base Year for IIP?
In statistics, especially when calculating indices like the IIP, a base year is chosen as a reference point. The production level in the base year is assigned an index value, usually 100. The production levels in subsequent years are then compared to this base year, and the index values are calculated accordingly. This allows for easy comparison of production changes over time.
Choosing an appropriate base year is important. The base year should ideally be a normal year, free from significant economic fluctuations like recessions or booms, so that it serves as a stable benchmark for comparison.
Determining the Current IIP Base Year
The base year for calculating the All India Index of Industrial Production (IIP) is revised periodically to reflect the structural changes in the economy and update the basket of items and their weights. The question asks for the current base financial year used for this calculation.
Previously, the base year for IIP was 2004-2005. However, this was revised.
The current base year for the All India Index of Industrial Production (IIP) is the financial year 2011-2012. This revision was implemented to provide a more accurate and representative picture of the industrial sector's performance based on more recent production patterns and technologies.
Significance of the 2011-2012 Base Year for IIP
Using 2011-2012 as the base year means that the industrial production levels in 2011-2012 are set to an index value of 100. The IIP values for subsequent months and years show the percentage change relative to this base level. For example, an IIP of 110 in a particular month means that industrial production is 10% higher than the average monthly production in the base year 2011-2012.
| Aspect | Details for IIP |
|---|---|
| What it measures | Volume changes in industrial production |
| Published by | NSO (MoSPI) |
| Frequency | Monthly |
| Current Base Year | 2011-2012 |
| Previous Base Year | 2004-2005 |
Revision Table: Key Facts on IIP Base Year
| Metric | Description |
|---|---|
| Index Name | Index of Industrial Production (IIP) |
| Compilation Authority | National Statistical Office (NSO) |
| Measurement | Volume of production in industries |
| Current Base Year | 2011-2012 |
| Importance | Economic growth indicator |
Additional Information on IIP and Base Years
The IIP covers three broad sectors:
- Mining
- Manufacturing
- Electricity
Within manufacturing, it covers various industry groups. The selection of items and their weights in the IIP basket is crucial and is updated when the base year is revised to reflect the current structure of the industrial sector.
Revising the base year helps in:
- Including new products and industries that have become significant.
- Excluding old products that are no longer relevant.
- Updating the weights of different items and sectors to reflect their current contribution to overall industrial production.
- Providing a more accurate measure of industrial growth relative to a recent period.
The 2011-2012 base year was chosen because it was considered a relatively stable economic year following the global financial crisis and before major policy changes. This makes it a suitable benchmark for measuring subsequent industrial performance.
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2. This integration aims to improve fraud prevention and complaint management.
3. The system was developed solely by the Reserve Bank of India.
Mark the correct statement from the above using the codes given below:
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