Sign up for Equitymaster's free daily newsletter, The 5 Minute WrapUp and get access to our latest Multibagger guide (2018 Edition) on picking money-making stocks.

This is an entirely free service. No payments are to be made.

Download Now Subscribe to our free daily e-letter, The 5 Minute WrapUp and get this complimentary report.
We hate spam as much as you do. Check out our Privacy Policy and Terms Of Use.
Indian Stock Market News, Equity Market and Sensex Today in India | Equitymaster
  • MyStocks


Login Failure
(Please do not use this option on a public machine)
  Sign Up | Forgot Password?  

What the New IIP Series Have in the Bag?
Thu, 18 May Pre-Open

The new Index of Industrial Production (IIP) for India has attracted much praise from the financial markets.

The base year for the new IIP has been changed to 2011-2012 from the earlier 2004-2005. This has been done to capture the changes in the industrial sector that have happened over a period of time.

The change is made also to align it with the base year of other macroeconomic indicators like the Gross Domestic Product (GDP), Wholesale Price Index (WPI), etc.

The new IIP brings some most awaited changes to the methodology and coverage of items.

What are these changes? And what value add do they bring in?

The new IIP comes with changes in weights in the IIP segments which include manufacturing, mining and electricity sectors. This is an apt development as these items need to be changed or relooked at from time to time to ensure that the IIP continues to maintain a representativeness of the current economy.

There is also an addition of new and rapidly growing sectors in the new IIP. The new IIP has a total of 809 items in the manufacturing sector. The earlier one had 620.

Just Released: Multibagger Stocks Guide
(2017 Edition)

In this report, we reveal four proven strategies to picking multibagger stocks.

Well over a million copies of this report have already been claimed over the years.

Go ahead, grab your copy today. It's Free.

NO-SPAM PLEDGE - We will NEVER rent, sell, or give away your e-mail address to anyone for any reason. You can unsubscribe from The 5 Minute WrapUp with a few clicks. Please read our Privacy Policy & Terms Of Use.

While some items have been removed, items like cement clinkers, medical and surgical accessories, refined palm oil etc., have been added. Along similar lines, the electricity sector now includes data from the renewable energy sector as well.

One of the significant changes in the new IIP is addition in the number of reporting factories. This will enable capturing of more meaningful data. Also, the closed factories have been removed from the calculations, which can help in depicting a fair picture.

Apart from the above, the new IIP series has introduced 'work-in-progress' concept to reduce volatility in the capital goods sector.

There's also an improvement in the use-based classification by bringing in a new class of "basic goods" in lieu of primary goods and introducing a new "infrastructure/construction goods" component.

In all, the new IIP will be a better representation of the Indian industry than the old one was.

The changes will mean more conformity between IIP and inflation figures. It will also mean accurate reporting of macro-economic data, and thereby aid in making crucial policy decisions.

For information on how to pick stocks that have the potential to deliver big returns, download our special report now!

Read the latest Market Commentary

Equitymaster requests your view! Post a comment on "What the New IIP Series Have in the Bag?". Click here!


Small Investments
BIG Returns

Zero To Millions Guide 2018
Get our special report, Zero To Millions
(2018 Edition) Now!
We will never sell or rent your email id.
Please read our Terms


Mar 22, 2018 11:47 AM