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

1. At a Glance

• The Index of Industrial Production (IIP) is a monthly index of the volume of industrial production. The Ministry of Statistics & Programme Implementation (MoSPI) publishes it. It is the main short-term gauge of how fast industry is growing. [1]
• In September 2026, IIP grew 6.7% year-on-year. Manufacturing (+7.6%) and Electricity & Gas Supply (+11.2%) led the growth, while Mining & Quarrying contracted (-6.2%). [1]
• This is one of the first full-year runs of the new series (base 2022-23), which replaced base 2011-12. Its coverage, weights and deflator have all been redone. Expect questions on base-year revision and statistical reform. [2][4]
• The Use-Based Classification groups output by end use rather than by industry. This lets you read demand and investment signals: capital goods point to investment, consumer durables and non-durables point to consumption. [1]

2. Why in the News

• 28 October 2026: MoSPI released the Quick Estimate for September 2026 (IIP +6.7%) and the final revision for August 2026. [1]
• Mid-2026: MoSPI changed the IIP base to 2022-23. The first release of the new series came out on 1 June 2026. It was then revised to use Output PPI as the deflator in place of WPI. [2][3]

3. Background & Evolution

• Rationale for the base revision: The Technical Advisory Committee (TAC) was asked to align the IIP base year with other macro indicators such as GDP and WPI. It unanimously endorsed 2022-23 as the new base. [4]
• Planned schedule: MoSPI announced new series of CPI (12 Feb 2026), GDP (27 Feb 2026) and IIP (May 2026) as part of a combined base-year overhaul. [6]
• 1 June 2026: The first release of the new IIP series (base 2022-23) was published, covering April 2026. General IIP grew 4.9% and manufacturing 6.2%. WPI was used as the deflator for now. [2]
• 15 June 2026: DPIIT released the Output PPI series (base 2022-23). [3]
• June 2026: In the May 2026 release (IIP +5.1%), MoSPI revised the whole 2022-23 IIP series using Output PPI. This superseded the WPI-based series of 1 June 2026. [3]
• Predecessor: the IIP series with base 2011-12. [2][4]

4. Core Static Facts

September 2026 numbers [1]

• General IIP: +6.7%. August 2026 figure as given: +8.0%.
• Manufacturing +7.6%, Electricity & Gas +11.2%, Mining -6.2%.
• 17 of 23 NIC 2-digit manufacturing groups grew. The top contributors were motor vehicles, electrical equipment, and rubber & plastics.
• Use-based: the top contributors were Intermediate, Primary and Capital goods. Consumer durables grew +6.0% and non-durables +1.4%.

5. Multi-Dimensional Analysis

Economic

• Manufacturing has a weight of 76.062, so it largely sets the headline number. Its 7.6% growth explains most of the 6.7% headline. [1][2]
• The mining contraction (-6.2%) pulls the index down. Mining's lower weight in the new series (11.053) makes that drag smaller than it would have been under the old weights. [1][2]
• Capital and intermediate goods leading growth suggests that investment and the production pipeline are driving output. [1]

Social / Consumption signal

• Durables grew 6.0% while non-durables grew only 1.4%. This gap points to uneven consumption: higher-income demand looks firm, while mass-consumption goods (FMCG-type) are weak. Rural demand is worth examining in Mains answers. [1]

Scientific / Statistical methodology

• The switch from WPI to Output PPI measures real output more accurately for value-based items, because PPI has a more granular price structure. [3]
• The weighted response rate shows how reliable the first estimate is. A lower rate means a larger revision later (86.5% for the September Quick Estimate vs 92.0% for the final August figure). [1]

Governance / Administrative

• Aligning the base years of GDP, CPI, WPI and IIP to 2022-23 makes India's macro indicators comparable with each other. [4][6]
• Replacing a just-released series within weeks (WPI → PPI) raises questions about how revisions are communicated and about data credibility. [3]

6. Recent Developments (last 12-18 months)

• 2026 (pre-release): MoSPI scheduled the new GDP, CPI and IIP series. [6]
• 1 June 2026: First release of the new IIP series (base 2022-23), for April 2026 (+4.9%). [2]
• 15 June 2026: DPIIT released the Output PPI (base 2022-23). [3]
• June 2026: May 2026 IIP grew 5.1%, and the whole series was revised to the PPI deflator. [3]
• 28 October 2026: September 2026 Quick Estimate (+6.7%) and final August 2026 figures. [1]

7. Prelims Hooks

• IIP is compiled and released by MoSPI. [1]
• The current IIP base year is 2022-23; the previous base was 2011-12. [2]
• IIP Quick Estimates come out on the 28th of each month. [1]
• The new IIP series has four sectors, including the newly added Water Supply, Sewerage & Waste Management. [1][2]
• Gas supply is now part of the IIP, under "Electricity & Gas Supply". [1][2]
• Manufacturing weight = 76.062, the largest of any sector. [2]
• Mining & Quarrying weight fell from 14.372 to 11.053. [2]
• The item basket grew from 407 to 463 item groups. [2]
• The IIP deflator is now Output PPI, not WPI, for value-based items: 234 items, 36.02% of weight. [3]
• Output PPI (base 2022-23) is released by DPIIT and was launched on 15 June 2026. [3]
• IIP is released under NIC 2025 through a concordance with NIC 2008. [4]
• The weighted response rate was 86.5% for the September 2026 Quick Estimate. [1]
• The top contributors to September 2026 manufacturing growth were motor vehicles, electrical equipment, and rubber & plastics. [1]

8. What the 6.7% Leaves Out: Small and Unregistered Units

• The IIP mostly counts registered factories, not small workshops
• MoSPI's own Technical Advisory Committee (TAC) says the IIP "primarily captures the organised sector" [4].
• Most small, unregistered (unincorporated) manufacturing units are left out. These units are small, spread out and keep opening and closing, so a fixed list of reporting units does not work for them [4].

• So 6.7% describes larger, registered industry. It does not tell you how small producers did, and they employ many more workers.

• A fix has been proposed but not built yet

• The TAC suggested a separate index for unincorporated units. It would be built on an industry-level measure from ASUSE (Annual Survey of Unincorporated Sector Enterprises) [4].

• The TAC itself calls this "forward-looking". It wants data quality and method tested first [4].

• Why this matters for the consumption story

• The note reads weak non-durables (+1.4%) as weak mass demand [1].
• But many mass-consumption goods are made by small units the IIP does not see. So the index can show demand moving from small makers to large ones and make it look like a fall. Use this caveat in Mains.

9. Why an Ageing Factory List Makes Growth Look Smaller

• The old series was slowly losing track of real industry
• IIP follows a fixed panel (a set list) of factories chosen in the base year [4].
• By the end of the 2011-12 series, factories that had closed carried about 8.9% of the index weight [4]. Those weights were filled with estimates, not real output.

• The TAC says the closure of old firms and the rise of new ones ("creative destruction") gives output measurement a downward bias: growth looks lower than it really is [4].

• New rule: replace factories that go silent

• If a factory reports zero output, or no data, for three months in a row, the source agency checks its status [4].
• If the factory has closed or switched products, a similar factory producing the same item replaces it [4].

• The catch: the new factory must report for a 12-month overlap before it is properly linked in. Until then, zero or estimated figures are used [4].

• Big new plants still find it hard to get in

• Under the Laspeyres method (weights fixed at the base year), a large plant opened after 2022-23 cannot normally be added [4].
• The TAC allows it only "on rarest of rare occasions" [4].
• So fast-growing new capacity, for example in PLI sectors like electronics, may be under-counted as the series gets older.

10. How a Thin First Estimate Gets Filled In

• 13.5% of the September weight was not reported in time
• The September Quick Estimate had a weighted response rate of 86.5%, against 92.0% for the final August figure [1].

• For a factory missing for less than six months, MoSPI fills the gap using the average growth of the factories that did report, or the average of the past 3 or 12 months [4].

• Why this can push the first estimate up or down

• The method assumes silent factories did as well as the ones that reported.
• Factories that report late are often the ones in trouble. If so, the Quick Estimate can look better than the final number.
• How to read it: treat the Quick Estimate as a first draft. Compare it with the final figure a month later before you call it a trend.

11. Why You Cannot Simply Compare Old and New Series

• The two series are joined only at the top level
• The 2011-12 and 2022-23 series are linked with a linking factor, a multiplier that rescales old index values so they fit the new base [4].
• It uses the geometric mean (an average of ratios, which suits an index better than the simple average) [4].
• The TAC said linking factors should be worked out only for the General Index and the broad sectors [4].

• So you get a long, comparable history for headline IIP and Manufacturing, but not for an industry like motor vehicles at NIC 4-digit level.

• The basket itself changed

• Mining now includes one rare earth mineral and nine minor minerals, alongside 34 fuel and major minerals [4].
• Electricity is split into renewable and non-renewable generation [4].
• A sector's growth in 2026 is therefore measured on a different set of goods than in 2019. Say this whenever you quote long-run trends.

12. What Other Countries Do: Weights Updated Every Year

• The rich-country method: chain-linking
• The United States, United Kingdom, Australia and EU members publish chain-linked indices, where weights are updated roughly every year [4].
• International manuals back this: IRIIP 2010 (UN's International Recommendations for the Index of Industrial Production) and the OECD [4].

• India's fixed-base IIP keeps weights unchanged for about a decade. In that time, the weights of industries like coke and refined petroleum (NIC 19) and basic metals (NIC 24) moved a lot between 2011-12 and 2021-22 [4].

• Chain-linking has real costs too, which is why India adds it alongside the old method

• Not additive: the sub-indices no longer add up exactly to the total. NIC 4-digit figures will not sum neatly to NIC 2-digit [4].
• Drift: if output rises and then falls back to where it began, a chained index may not return to its starting value [4].
• So the TAC recommended a chain-linked IIP in addition to the fixed-base index, not in place of it [4].

13. Fixes MoSPI Has Promised but Not Yet Delivered

• MoSPI should publish a seasonally adjusted IIP
• Today's year-on-year growth figures carry festival timing and holiday effects. Diwali falling in October in one year and November in the next can swing the numbers.
• The TAC asked MoSPI to set up a deseasonalisation unit and release seasonally adjusted data "as soon as may be possible" [4].

• It warned that a long, clean series is needed first, and that COVID-19 months must be treated as outliers [4].

• MoSPI should test a GST-based register of businesses

• The panel goes out of date because MoSPI only learns about new or closed factories through ASI, which comes with a lag [4].

• The TAC said a business register built from GST data could "significantly improve" the IIP. It asked for a trial over one or two years first [4].

• States should move to the same method

• The TAC wants State IIPs to use the all-India method, NIC 2025 and the same use-based groups. MoSPI would share factory data and train state staff [4].
• Without this, state numbers cannot be compared with each other or with the national figure.

14. Anchors for Answers

• Data: Factories that had closed carried ~8.9% of the weight in the old 2011-12 IIP panel, a sign of the downward bias from a fixed factory list [4]
• Data: Weighted response rate 86.5% (Sept 2026 Quick Estimate) vs 92.0% (Aug 2026 final). This shows how much of the first estimate is filled in by imputation [1]
• Data: IIP release moved two weeks earlier, so the MPC now gets IIP with a one-month lag instead of two [4]
• Report/Committee: Technical Advisory Committee on Base Revision of IIP (TAC-IIP), chaired by Dr. Mridul K. Saggar, report dated 15 May 2026. It recommended chain-linking, factory substitution, Output PPI deflator, ASUSE-based index and a GST business register [4]
• Comparison: USA, UK, Australia and EU publish chain-linked industrial indices with weights updated about every year. India still runs a fixed-base Laspeyres index [4]
• Comparison: IRIIP 2010 (UN) and OECD guidance recommend chain-linked volume indices for short-term indicators [4]
• Scheme: AMRUT. Sewerage connections in its 500 cities are now the measure used for the sewerage part of the IIP [4]

15. Mains Relevance

• GS-III: Indian Economy — growth, development, mobilisation of resources, and industrial policy and its effect on industrial growth.
• GS-II (secondary): Governance — how reliable and credible official statistics are.
• Question stems: 1. "Revising base years of macroeconomic indicators is essential but not sufficient for credible statistics." Discuss with reference to the new IIP series (2022-23). 2. What does the use-based classification of IIP reveal about the drivers of India's industrial growth? Explain the significance of the gap between consumer durables and non-durables. 3. Examine why the Producer Price Index is replacing the WPI as a deflator in India's statistical system.

16. Related Topics to Study Next

• Index of Eight Core Industries (ICI): compiled by DPIIT, and a leading indicator of IIP. Its releases were still on base 2011-12 as of 2025. [7]
• Output / Input Producer Price Index: the new deflator for IIP; shows the move away from WPI.
• New GDP series (base 2022-23): part of the same base-year alignment.
• CPI new series (2024 base): part of the coordinated revision of macro indicators.
• Annual Survey of Industries (ASI): the source of the IIP weights.
• National Industrial Classification (NIC 2025): the classification used for releasing IIP.
• PLI schemes and the manufacturing share of GVA: links IIP trends to industrial policy.

17. NCERT Concepts to Revise

• Index of Industrial Production (Economy): The whole note is about IIP: what it measures, who compiles it, and how its sectors and weights work.
• Base year revision (Economy): The shift from 2011-12 to 2022-23 changed coverage, weights and deflator, and is the note's main exam theme.
• Use-based classification of IIP (Economy): Groups output by end use, so it shows investment versus consumption signals, such as durables outpacing non-durables.
• Producer Price Index (Economy): Output PPI replaced WPI as the deflator for value-based items, a likely question on statistical reform.
• Wholesale Price Index (Economy): WPI was the earlier deflator; knowing it explains why switching to PPI matters.
• Creative destruction (Economy): Closure of old firms and rise of new ones biases a fixed-panel index downward, as the note explains.

18. Common Errors / Trap Areas

• Wrong ministry: IIP is compiled by MoSPI. ICI and Output PPI are released by DPIIT (Ministry of Commerce & Industry).
• Wrong deflator: the new IIP series now uses Output PPI, not WPI. The 1 June 2026 WPI-based version has been superseded. [3]
• Sector count: the new series has four sectors. "Three sectors (Mining, Manufacturing, Electricity)" describes the old series.
• NIC version: the basket and weights are based on NIC 2008, and only the release uses NIC 2025 through a concordance. [4]
• Classification confusion: sectoral classification is by industry of origin; use-based classification is by end use. Intermediate goods (inputs) are not the same as capital goods (machinery).