The Central Statistics Office (CSO) is working on an overhaul of key macro-economic indices, including the wholesale price index and the index of industrial production, to better capture growth in production and is also preparing a system to capture production and prices of services.
“The present frame of the IIP is based on the annual survey of industries. This is now being expanded to ensure that deficiencies are taken care of and the IIP becomes a good indicator of manufacturing activities in the country,” said Ashish Kumar, director general, CSO. The exercise, which is part of the base revision of the IIP to the base year 2011-12 from 2004-05, is also expected to lead to lesser volatility and more importantly a spurt in growth in the IIP, which has recorded muted expansion in factory output.
“At present, the IIP is only representative of the largest production units. However, growth is not taking place there, growth is taking place in small and medium units that have more capacity for growth. These are the industries that will be included for data collection,” said Kumar at a conference organised by the ministry of statistics and programme implementation.
About 450 items would be included in the IIP basket as against 399 in the current series and data from at least eight factories per item (in the DIPP list) would be collected to ensure lesser volatility. The new series of IIP is expected to be launched from April 2016, by when the CSO is also hopeful of launching the new series of WPI, which too will have a revised base year of 2011-12.
“Collection of prices for the base year for the new items has to be done for the WPI series and fieldwork is on,” said Kumar.
Meanwhile, stressing on the importance of the services sector, which contributes more than 50 per cent of the share of the national accounts, Kumar said that the government is also considering proposals for an index of service production on the lines of the IIP, an index of service prices as well as an Annual Survey of Services.
“In India, the only route to get a vague understanding of service production is via the national account statistics and the consumer price index for service prices. But many services don’t even enter the consumer basket and are sometimes captured through the various surveys by the National Sample Survey Organisation,” said Kumar.