New Delhi: India’s industrial production grew by 5.1 per cent in May, up from 4.9 per cent in April, supported by robust performance in the manufacturing sector and a sharp rise in electricity and gas supply, according to the latest Index of Industrial Production (IIP) data released by the Ministry of Statistics and Programme Implementation (MoSPI).
Manufacturing, which contributes more than three-fourths of the IIP, expanded by 5.5 per cent compared to May last year. Out of 23 manufacturing industry groups, 16 recorded positive growth. The biggest contributors included motor vehicle manufacturing, which rose by 14.5 per cent, electrical equipment manufacturing with a 20.8 per cent increase, and basic metals, which grew by 4.6 per cent.
The electricity and gas supply segment recorded a strong 9.9 per cent growth during the month, while the water supply, sewerage and waste management sector expanded by 5.5 per cent. In contrast, the mining sector contracted by 1.6 per cent.
Among use-based industries, capital goods production surged by 12.9 per cent, indicating healthy investment activity across the economy. Consumer durables, including electronic appliances, refrigerators and televisions, registered a 7.2 per cent increase, reflecting sustained consumer demand. Production of consumer non-durables, such as soaps and cosmetics, also grew by 3.6 per cent.
The infrastructure and construction goods segment posted a 5.9 per cent rise, supported by continued government investment in highways, railways and port infrastructure.
Meanwhile, MoSPI announced a significant methodological change in the IIP calculation. The ministry has adopted the Output Producer Price Index (Output PPI) as the deflator instead of the Wholesale Price Index (WPI) for value-based production data. The revision affects 234 of the 463 item groups in the IIP basket, representing 36.02 per cent of the total index weight.
The ministry has revised and reissued the entire IIP series with the 2022–23 base year using the Output PPI, replacing the earlier WPI-based series released on June 1. The change follows the release of the Output PPI series by the Department for Promotion of Industry and Internal Trade (DPIIT) on June 15.
According to MoSPI, the adoption of the Output PPI will provide a more accurate measure of real industrial output by capturing producer-level prices in greater detail. The ministry said the move aligns India’s industrial statistics with international best practices and recommendations made by the Technical Advisory Committee on the IIP base revision.
Since the IIP is a key input in estimating quarterly Gross Domestic Product (GDP), the transition to the Output PPI is also expected to improve the accuracy of national accounts and volume-based economic estimates. With this revision, the ministry has officially discontinued the use of the Wholesale Price Index as the deflator for the new IIP series based on 2022–23.
With inputs from IANS