28.9.15

IIP basket to be revamped

Mobile phones, which have almost become the first consumer electronic item of purchase for Indians, will find a prominent place in the official industrial production data, which is being revamped. Mobile phones and accessories will be pulled out as a separate category from telephone instruments as part of large-scale changes in consumer purchases of durables in a comprehensive revamp of the Index of Industrial Production (IIP).
The Central Statistics Office (CSO) is expected to launch a new series of IIP with effect from April 2016. The revised IIP is expected to have a new category for LED and LCD television sets instead of the existing classification called colour TV sets, the official said. Laptops, notebooks and netbooks are also likely to be made into a separate category as against the present electronics category called `computers'.
“A lot of changes are happening in the electronics segment and we have made new categories besides removing obsolete items form the index,“ the official said. “We have added almost 100 new products in the IIP basket.“
The `ready to eat' category could also find a bigger representation in the index given the increasingly larger space they occupy in stores, the person said. The changes are part of the periodic rejig in the IIP basket as part of the base year revision exercise for the index. The current IIP has a base year of 200405, which does not capture the vast changes in usage and the corresponding changes in the industrial set up to deliver those goods.
Mobile phones call for a separate category in the industrial index given the booming demand. India is the world's fastest growing smartphone market and, as per research firm IDC, of the 59.4 million units shipped in the country in the quarter ended June, 26.5 million were smartphones. Though India doesn't produce electronics and mobile phones, the official said that if 60% of the product is made here, it is considered Indian manufactured. Apart from revising the base year, the ministry of statistics and programme implementation is rejigging the existing categories of commodities to make them relevant in today's context.

The panel in its report submitted last year called for an overhaul of the index to correct inaccuracies and suggested guidelines for 16 source agencies to improve data collection and reporting. It recommended the base year of IIP to be revised from 2004-05 to 2011-12. The existing series replaced their earlier indices, which had 1993-94 as base year, from July 2011 onwards. The exercise is expected to lead to lesser volatility and a spurt in growth in the IIP . The IIP suffers from volatility issues as the Chaudhuri report had said. In the first four months of the current financial year, for which data is available, it has shown growth ranging from 2.7% to 4.2%.

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