Revamping Industrial Production Index: A Shift to Chain-Based Method

The Ministry of Statistics and Programme Implementation is advocating for a chain-based method for the Industrial Production Index, moving away from the traditional fixed-base approach. This shift aims to reflect production shifts accurately. Stakeholders are encouraged to participate in a discussion open until January 25, 2026.

The Ministry of Statistics and Programme Implementation is proposing a transition to a chain-based method for calculating the Index of Industrial Production (IIP). This shift forms part of a broader base-revision effort aimed at aligning macroeconomic data with contemporary production realities, according to a government statement.

Traditionally reliant on a fixed-base Laspeyres framework, the IIP methodology faced limitations as evolving economic demands, technological advancements, and policy updates caused significant industry shifts. Under the current static model, outdated sectoral and industry weights hinder the accuracy of production measurements.

By adopting a chain-based method, the IIP could more accurately capture these dynamic changes, featuring annual adjustments in weights to reflect a current production structure. The ministry has laid out this plan in a newly released Discussion Paper 2.0, inviting a range of stakeholders to contribute feedback on the proposal by January 25, 2026.

(With inputs from agencies.)