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India's Index of Industrial Production (IIP) recorded a 5.2% growth in February 2026.
The growth was primarily driven by robust performance in the manufacturing and capital goods sectors.
However, the data also highlighted a concerning weakness in consumer demand, with both durables and non-durables sectors experiencing contractions.
IIP is a key economic indicator released monthly by the National Statistical Office (NSO).
The Index of Industrial Production (IIP) is a composite indicator that measures the short-term changes in the volume of production of a basket of industrial products in India. It covers three broad sectors: Mining, Manufacturing, and Electricity. Compiled and published monthly by the National Statistical Office (NSO) under the Ministry of Statistics and Programme Implementation, IIP serves as a crucial indicator for assessing the health and growth trajectory of the industrial sector of the economy. The current base year for IIP calculation is 2011-12.
Simple Analogy: Think of IIP as a monthly report card for India's factories, mines, and power plants, showing how much they've produced compared to a baseline year. A higher percentage indicates more industrial activity.
IIP directly contributes to the industrial component of GDP, making it a leading indicator for overall economic growth.
The Reserve Bank of India (RBI) considers IIP data, especially trends in manufacturing and capital goods, when formulating its monetary policy decisions, such as interest rate adjustments.
Robust industrial growth, as indicated by IIP, often correlates with job creation in the manufacturing and allied sectors.
Supply-side dynamics reflected in IIP can influence inflationary pressures in the economy.
GS-III: Indian Economy and issues relating to planning, mobilization of resources, growth, development and employment.
General Awareness: Indian Economy, Economic Indicators.
General Awareness: Economic & Financial News, Key Economic Indicators.
General Science & General Awareness: Indian Economy.
General Knowledge: Current Affairs, Indian Economy.
Consider the following statements: Other things remaining unchanged, market demand for a good might increase if 1. price of its substitute increases 2. price of its complement increases 3. the good is an inferior good and income of the consumers increases 4. its price falls Which of the above statements are correct?
Answer: 1 and 4 only
Despite being a high saving economy, capital formation may not result in significant increase in output due to
Answer: high capital-output ratio
What does venture capital mean?
Answer: A long-term start-up capital provided to new entrepreneurs
High (regularly covered in economic news and frequently tested in competitive exams).
A composite indicator measuring the growth rate of industrial sectors in the economy.
Goods used to produce other goods, such as machinery, equipment, and tools, indicating future productive capacity.
Goods that do not need to be purchased frequently and have a long lifespan, like cars, refrigerators, and televisions.
Goods that are consumed quickly or have a short lifespan, such as food, beverages, and clothing.