New Delhi: The Ministry of Statistics and Programme Implementation (MoSPI) has initiated consultations on adopting a chain-based Index of Industrial Production (IIP), a move that could significantly change how India measures industrial growth and reflects structural shifts in the economy.
In a Discussion Paper 2.0 released on Tuesday, the ministry said the current fixed-base IIP framework, which uses constant sectoral weights until a base-year revision, is increasingly misaligned with the fast-changing production landscape. As industries expand, contract or give way to new production lines, fixed weights tend to lose relevance over time, reducing the efficacy of the index.
A chain-based IIP, by contrast, allows weights to be updated annually, enabling the index to better capture changes in production structure driven by evolving demand, technological shifts and policy interventions. Officials said such an approach would improve accuracy and make the headline industrial output numbers more reflective of current economic realities.
The discussion paper forms part of the ongoing base revision exercise of the IIP, under which MoSPI is reassessing methodologies, exploring new data sources and incorporating feedback from experts, academicians and users of official statistics. The ministry has invited comments from central and state governments, financial institutions and other stakeholders on the proposed methodology by January 25, 2026.