Quick Estimates of Index of Industrial Production and Use- Based Index for the Month of August 2026 (Base 2022-23=100)

1. At a Glance

• Index of Industrial Production (IIP) is a composite indicator that measures changes in the volume of production of a fixed item basket, compared with a base year [2].
• It is compiled and released by the National Statistics Office (NSO), MoSPI, every month with a 28-day lag from the reference month [2].
• The August 2026 Quick Estimate shows 8.0% growth in industrial output. This is the fastest growth so far in FY27 and is driven by capital goods (+16.9%) and electricity (+12.3%). Mining is the weak spot at (-)5.6% [1].
• It matters for UPSC because it covers the new 2022-23 base series (released 1 June 2026), its restructured sectors, use-based categories, and questions about how reliable high-frequency data is [1][2].

2. Why in the News

• 28 Sep 2026: MoSPI released the IIP Quick Estimate for August 2026. Growth was 8.0%, up from 6.7% in the July 2026 Quick Estimate [1].
• The same release carried the final revision for July 2026. July growth was revised up from 6.7% to 7.4% [1].
• This is one of the first monthly releases under the new 2022-23 base series, which was launched on 1 June 2026 [2][3].

3. Background & Evolution

• First IIP: base year 1937 [2].
• Base-year revisions: 1946 → 1951 → 1956 → 1960 → 1970 → 1980-81 → 1993-94 → 2004-05 → 2011-12 → 2022-23. The 2022-23 revision is the 10th [2].
• Why revise the base: to capture structural change, new technology and new industries and products. The base year is also aligned with GDP and WPI [2].
• Early 2026: MoSPI scheduled the new series of CPI (12 Feb 2026), GDP (27 Feb 2026) and IIP (May 2026) [5].
• 25 May 2026: The report of the Technical Advisory Committee on base-year revision of IIP (TAC-IIP) was released [2].
• 1 June 2026: The new IIP series was released. Its first print was for April 2026, with IIP at 118.9 against 113.4 in April 2025 [2][3].
• Related index: The Index of Core Industries also moved to base 2022-23. The number of core industries went from 8 to 9, with iron ore added. Its first release was for June 2026 (+5.0%) [4].

4. Core Static Facts

Six use-based categories (unchanged from 2011-12) [2]:

• Primary goods: ores, fuels, electricity
• Capital goods: boilers, tractors, transformers, commercial vehicles. This category tracks the capex cycle.
• Intermediate goods: yarn, steel pipes, auto parts
• Infrastructure/construction goods: cement, paints, cables
• Consumer durables: ACs, mobile phones, passenger cars, two-wheelers
• Consumer non-durables: edible oil, milk, medicines

August 2026 numbers [1]:

• Cumulative index, Apr–Aug: 122.8 against 115.1 [1]. That works out to about 6.7% growth. I calculated this figure myself because the excerpt is cut off before the official number.
• Weighted response rates: 88.0% for the August Quick Estimate and 93.4% for the July final revision [1].

5. Multi-Dimensional Analysis

Economic

• Capital goods grew 16.9% and intermediate goods 13.7%. This suggests that investment and supply-chain demand, rather than household consumption, is driving industrial growth [1].
• Consumer non-durables grew only 2.1%, compared with 11.1% for durables. This split suggests uneven consumption: better-off urban buyers are spending on durables, while mass and rural demand for everyday goods is weak [1].
• 18 of the 23 NIC 2-digit manufacturing groups grew. The biggest contributors were motor vehicles (+25.2%), electrical equipment (+30.9%) and other transport equipment (+25.3%) [1].
• Mining contracted for a second month: (-)0.9% in July and (-)5.6% in August. Last year's high base (+15.8% in August 2025) and the monsoon season both play a part [1].

Scientific / Technological

• Among electrical equipment, the item groups driving growth were switchgear, optical-fibre connectors and UPS/solid-state drives. This points to demand from electronics, data centres and grid build-out [1].
• The new series publishes a separate index for renewable electricity, which helps track energy-transition goals [2].

Environmental / Urban

• Adding water supply, sewerage and waste management (using AMRUT city data) brings urban services into industrial statistics for the first time. This is relevant to SDG 6, SDG 11 and Swachh Bharat [2].
• Kerosene and CFLs were dropped from the basket, which reflects a shift in the fuel and lighting mix [2].

Governance / Statistical integrity

• Quick Estimates are made from incomplete data (88% response rate) and are revised later. The July figure moved by 0.7 percentage points, so policy calls based on the first print need caution [1].
• The new series keeps n.e.c. ("not elsewhere classified") items. Field officers identified the specific products behind them, which improves coverage of niche and innovative goods [2].
• The base year is aligned with the new GDP and CPI series, so the major macro indicators are consistent with each other [2][5].

Administrative

• The source-agency model depends on how promptly factories report. The new series adds substitution of factories and imputation of missing data to improve coverage [2].
• WPI is still used as the deflator until an Output PPI exists. This matters for items reported by value, where the choice of deflator affects measured growth [2].

6. Recent Developments (last 12-18 months)

• Early 2026: MoSPI announced a revision calendar covering CPI, GDP and IIP [5].
• 27 Feb 2026: New GDP series with base 2022-23 released [5].
• 25 May 2026: TAC-IIP report released [2].
• 1 Jun 2026: New IIP series launched. The April 2026 Quick Estimate was 118.9, with mining at (-)5.1% and manufacturing at +6.2% [2][3].
• 2026: First Index of Core Industries in the new series (June 2026, +5.0%). It now covers 9 industries, with iron ore added [4].
• 28 Sep 2026: August 2026 Quick Estimate: 8.0%. July was finalised at 7.4% [1].
• 28 Oct 2026 (Wednesday): Next release, covering the September 2026 IIP [1].

7. Prelims Hooks

• IIP is compiled by the NSO, MoSPI. It is not compiled by DPIIT or the RBI [2].
• The IIP Quick Estimate comes out on the 28th of every month [1].
• The current IIP base year is 2022-23, which was the 10th base revision. The first IIP had a base of 1937 [2].
• The new IIP series was launched on 1 June 2026 [2].
• The new series has 463 item groups: 120 new and 64 dropped [2].
• The new series has four sectors: Mining & Quarrying, Manufacturing, Electricity & Gas Supply, and Water Supply, Sewerage & Waste Management [1].
• Manufacturing carries the largest weight at 76.062. Water/Sewerage/Waste carries the smallest at 2.020 [1].
• The index uses the Laspeyres fixed-base formula [2].
• Industries are classified under NIC-2025 [1][2].
• Items reported by value are deflated using WPI, with a planned move to Output PPI [2].
• The new series has no seasonally adjusted IIP yet [2].
• There are 6 use-based categories. Infrastructure/construction goods covers items like cement, paints and cables [2].
• In August 2026, capital goods grew fastest by use-based category (16.9%), and electrical equipment grew fastest among manufacturing industry groups (30.9%) [1].
• The Index of Core Industries in the 2022-23 series has 9 industries; iron ore is the new addition [4].

8. Why 8% Is a First Draft, Not the Final Word

• The number is built from incomplete returns
• The August figure uses data from factories covering only 88% of the weight. The July final used 93.4% [1].
• When a factory misses reporting for less than 6 months, MoSPI fills the gap. It uses the average growth of the factories that did report, or the factory's own average for the previous 3 or 12 months [6].

• So a factory that is silent because it is in trouble is counted as if it grew like the others. The first print stays uncertain until late returns come in.

• Revisions are large compared with the monthly signal

• July moved from 6.7% to 7.4% between the Quick Estimate and the final figure [1].

• A 0.7-point swing is bigger than many month-to-month changes. Do not call August a "turning point" from the first print alone.

• The faster release is why this uncertainty exists

• The TAC says the release was brought forward by two weeks. The MPC (Monetary Policy Committee of RBI, which sets the repo rate) now gets IIP data with a one-month lag instead of two [6].
• Earlier data means fewer factories have reported by release day. Faster numbers come with bigger revisions later.

9. How to Read One Month Against the Trend

• Compare only with the same month last year
• The new series has no seasonally adjusted index (a version with the regular yearly ups and downs removed) [2].
• So you cannot fairly compare August with July. The monsoon reduces mining every year, and festival timing moves factory output between months.

• The TAC points out the difficulty: national and regional holidays in India together change production, so they must be modelled carefully [6].

• Why seasonal adjustment has to wait

• Reliable seasonal adjustment needs a long run of data [6].
• COVID-19 months have to be treated as outliers (unusual values kept out of the pattern). If they are not, they distort the seasonal pattern [6].

• The new series starts in April 2026. MoSPI has to use the old series, linked to the new one, until enough months build up [2].

• Use the cumulative figure along with the monthly one

• For April to August, growth is about 6.7%, against 8.0% for August alone [1].

• One strong month lifts the average only slowly. In an answer, quote both figures.

• Look at weight, not just the growth rate

• Water/sewerage/waste grew 6.3%, but it carries a weight of only 2.020 out of 100 [1].
• Manufacturing carries 76.062, so its 9.0% growth decides most of the headline figure [1].

10. What the Index Counts, and What It Leaves Out

• Small and informal factories are mostly outside the index
• The TAC itself says the IIP mainly captures the organised sector [6].
• Factories are picked from ASI (the survey of registered factories). Together they must cover 80% of the output of each item, with at least four factories per item [6].

• Small units are too scattered and change too often for a fixed factory list. So the TAC said they need a separate index [6].

• Why that matters for the consumption story

• Consumer non-durables grew just 2.1% [1]. That figure comes from bigger, registered producers.

• If demand moves between small and large producers, the IIP sees only the large side. So it cannot show on its own whether mass demand is weak.

• The new water and sewerage figures count connections, not service

• Water supply is measured by the number of tap connections. Sewerage is the number of sewerage or septage connections in 500 AMRUT cities. Waste is the waste collected and processed in urban areas [6].

• A connection is counted even if water comes for only an hour a day. So this sector's high index (147.6) [1] shows more connections being added, not better water supply.

• Many items are measured in rupees, not in tonnes or units

• For mixed items, or items whose quality varies a lot, output is recorded by value. For items that take more than a month to make, the value of "work in progress" is used [6].
• Value has to be divided by a price index to get volume. WPI (Wholesale Price Index) does not match each product's price closely. So the TAC wants Output PPI (Producer Price Index, the prices factories actually receive) [6].

11. Why a Fixed 2022-23 Basket Will Drift Out of Date

• Fixed weights age every year
• The Laspeyres index keeps 2022-23 weights until the next base revision [2]. The last base, 2011-12, stayed in use until 2026 [2].

• A fast-growing sector like electrical equipment (+30.9%) [1] still gets its small 2022-23 weight. Sectors that are shrinking keep their old, larger weight.

• Factories closing and products changing pull the index down

• The TAC says the "creative destruction" of firms and products (old ones dying, new ones arriving) gives a downward bias to measured output [6].
• A fixed factory list misses new plants. That is why the TAC set up formal substitution and augmentation (adding new factories) [6].

• Niche items made by fewer than four factories are kept for now. If those factories close, the item is dropped and its weight goes to other items in the same group [6]. New industries can therefore fall out of the index.

• Chain-linking is the standard fix, but India has kept it internal

• A chain-linked index updates weights every year. This reduces substitution bias (buyers and producers moving to newer goods) and stops weights going out of date [6].
• The OECD and the UN's IRIIP 2010 (International Recommendations for the Index of Industrial Production) support chain-linking for short-term indicators like the IIP [6].
• India recommended it but kept it as a pilot [2]. So the fixed-base drift will continue for now.

12. What MoSPI Still Has to Deliver

• MoSPI should set up the de-seasonalisation unit and publish a seasonally adjusted series
• The TAC listed this as a forward-looking recommendation, to be done "as soon as may be possible" [6].

• Until then, month-to-month readings of the IIP will stay unreliable.

• MoSPI should publish the chain-linked index alongside the fixed-base one

• The TAC recommended both indices side by side, following OECD and IRIIP 2010 practice [6].

• If users can see the pilot, they can check how much the fixed weights distort growth.

• MoSPI should build a factory register from GST data

• The TAC says a business register using GST data could "significantly improve" the IIP. It suggested a one-to-two-year trial before relying on it [6].

• GST filings would show new and closing factories quickly. That fixes the list-ageing problem at its source.

• MoSPI should create an unincorporated-sector index from ASUSE

• The TAC proposed an industry-level indicator for unincorporated firms using ASUSE (Annual Survey of Unincorporated Sector Enterprises) [6].

• It warned that the data first needs careful testing for adequacy and stability [6].

• MoSPI and the Office of the Economic Adviser should move from WPI to Output PPI once it is stable

• This is the TAC's preferred deflator for items measured by value [6][2].

13. Anchors for Answers

• Data: IIP Quick Estimate for August 2026 is 8.0%, based on an 88.0% weighted response. July was revised from 6.7% to 7.4% [1]
• Data: The MPC now gets IIP data with a one-month lag instead of two, after the release was brought forward by two weeks [6]
• Report/Committee: Technical Advisory Committee on Base Revision of IIP (TAC-IIP), chaired by Dr Mridul K. Saggar (IIM Kozhikode). Report dated 15 May 2026, released 25 May 2026 [6][2]
• Comparison: The OECD and UN IRIIP 2010 back chain-linked (annually reweighted) indices for short-term indicators. India still publishes a fixed-base Laspeyres index [6]
• Scheme: AMRUT supplies the sewerage-connection data for 500 cities, which is the variable for the new sewerage sub-index [6]

14. Mains Relevance

• GS-III: Indian Economy and issues relating to planning, mobilisation of resources, growth, development and employment; Industrial policy and its effects on industrial growth; Infrastructure.
• GS-II (secondary): Government policies and interventions, and the institutional quality of the statistical system.
• Possible question stems: 1. "Base-year revisions are essential but not sufficient for credible macroeconomic statistics." Examine this with reference to the 2022-23 IIP series. 2. Recent IIP data shows strong capital-goods growth alongside weak consumer non-durables. What does this pattern say about the drivers of India's industrial growth? 3. Discuss why mining has lagged while manufacturing grows, and suggest reforms to revive the mining sector.

15. Related Topics to Study Next

• Index of Core Industries (base 2022-23): it tracks the core sectors that feed into IIP and was rebased at the same time, going from 8 to 9 industries [4].
• GDP new series (base 2022-23): IIP sector weights are taken from NAS 2022-23 GVA [2][5].
• WPI and the planned Output PPI: these are the IIP's deflators [2].
• Annual Survey of Industries (ASI): this is the source for the manufacturing item basket and weights [2].
• NIC-2025: the industrial classification used to publish IIP [1][2].
• AMRUT: its cities supply the sewerage data for the new sector [2].
• PLI schemes and capex push: background for the growth in electronics, autos and capital goods.
• MCDR and minor/rare earth minerals: these are now part of the mining coverage [2].

16. Common Errors / Trap Areas

• Wrong ministry: IIP is compiled by MoSPI (NSO). The Index of Core Industries is released by the Office of the Economic Adviser, DPIIT (Ministry of Commerce and Industry), not MoSPI [4].
• Old vs new numbers: Candidates often still quote 407 items, 3 sectors and base 2011-12. The current figures are 463 items, 4 sectors and base 2022-23 [1][2].
• Quick Estimate vs final: Monthly figures are revised. July 2026 was 6.7% as a Quick Estimate but 7.4% final [1].
• Sector index vs growth: The water/sewerage sector has the highest index (147.6) but not the highest growth. Mining has the lowest index (85.7) and is contracting [1].
• Seasonal adjustment and chain-linking: Neither is published in the new series yet. Don't assume either is available [2].