To lessen distortions brought on by changing holidays like Diwali and changes in working days, India’s statistics ministry has suggested implementing seasonally adjusted versions of the Index of Industrial Production (IIP). The intention is to use monthly industrial output statistics to provide more precise economic signals.
India currently releases raw, unadjusted IIP numbers, which frequently exhibit significant fluctuations due to calendar effects, seasonal patterns, and festival timing. The data is often revised as a result of these circumstances. The ministry said in a discussion paper published on Wednesday that a revamped methodology might help distinguish underlying trends from transient fluctuations and irregular shocks, thereby increasing the index’s usefulness without requiring unnecessary modifications.
The plan is a component of a larger initiative to update important economic metrics. In order to better represent India’s changing industrial structure, the IIP’s base year will be changed from 2011–12 to 2022–2023 in May as part of this revision.
The ministry pointed out that, in line with recommendations from multilateral organisations, a number of international statistical organisations now release seasonally adjusted industrial data. Stakeholder input on the suggested approach, including how to handle COVID-era disruptions and choose holidays for modifications, is requested by February 12.
India’s industrial output grew by 7.8% in December, its fastest growth in more than 2 years, according to the country’s latest IIP data.
