"Base-year revisions are essential but not sufficient for credible macroeconomic statistics." Examine this with reference to the 2022-23 IIP series.

The Index of Industrial Production (IIP), compiled by NSO-MoSPI, moved to a 2022-23 base on 1 June 2026. This is its 10th revision since the first IIP of 1937 [2][3]. The August 2026 print shows 8.0% growth [1]. The new series is clearly better, but whether the index is credible depends on more than a new base year.

Why base revision is essential

• Updated basket: 463 item groups. 120 were added (stents, vaccines, CCTV cameras) and 64 dropped (kerosene, CFLs) [2].
• Wider coverage: two new sectors, gas supply and water, sewerage & waste management. Sewerage data comes from AMRUT cities [2].
• Consistency: weights come from 2022-23 NAS GVA and ASI. The base now matches GDP and WPI, and industries are classified under NIC-2025 [2].
• Timeliness: the release was brought forward by two weeks. The MPC now gets IIP data with a one-month lag instead of two [6].

Why it is not sufficient

• Large revisions: the August Quick Estimate is based on only 88% weighted response. July was revised from 6.7% to 7.4% [1], so first prints need caution.
• No seasonally adjusted series: the monsoon and festivals shift output between months, so comparing one month with the next is unreliable [2][6].
• Fixed-weight drift: Laspeyres weights stay frozen until the next revision. The TAC notes that "creative destruction" of firms and products biases output downward. Chain-linking is backed by the OECD and UN IRIIP 2010, but India runs it only as an internal pilot [2][6].
• Informal-sector blind spot: the IIP mainly captures the organised sector [6]. So weak consumer non-durables growth (2.1%) [1] cannot on its own show whether mass demand is weak.
• Weak proxies: water and sewerage are measured by connections, not by service delivered. Items reported by value are deflated by WPI rather than an Output PPI [6].

Way forward

• Publish seasonally adjusted and chain-linked indices alongside the fixed-base index [6].
• Build a GST-based business register that tracks factories opening and closing [6].
• Create an ASUSE-based unincorporated-sector indicator and move to an Output PPI deflator once it is stable [6].

The 2022-23 rebasing updates what the IIP measures. Continuous upgrades to method will decide how well it measures. Acting on the TAC's recommendations would make the IIP a timely, reliable and consistent guide for evidence-based policy and a stronger national statistical system.