NEW DELHI: In order to cut the time lag in publishing the index of industrial production (IIP) data, the ministry of statistics and programme implementation (MoSPI) has now advanced the release date of the monthly-IIP print. Experts say the quickness in data release was much-needed, but warn that this may in turn affect data quality unless remedial measures are taken.
According to the ministry’s advance release calendar for 2025-26, the IIP figure for any month (say April) would be published on the 28th day of the next month (May), as against the current practise of releasing the data on 12th of the month after (June). This would reduce the time-lag of the IIP data to about 30 days from 42-days at present.
However, the data quality is likely to take a hit, and subsequent revisions may be of a higher degree, say experts. Pronab Sen, former chief statistician of India, explains the IIP is an estimate based on a fixed number of firms, which submit their production data to the government, within a set timeline.
“If you set a deadline for the firms to submit their data, then normally by that time, the government would receive about 40% of the data, based on which IIP will be released. But now if you cut the cut-off date, only 30% of the data will come in,” he explained.
MoSPI has mentioned on its website that the National Statistical Office, the agency that compiles IIP, “expects to have at least 60% response in terms of production for release of the ‘quick estimate’ (first print) and 80% response at the time of final revision of the IIP.”
“The data would now be probably-worse, because your cut-off date will reduce. So revisions may be higher. Regardless, the IIP is a high-frequency data, the quicker it comes out the better it is,” Sen said.
For perspective, the IIP data for September 2024, when first released in November, showed a growth rate of 3.1% in year-on-year terms, but was revised lower to 2.2% in the subsequent months.
PC Mohanan, former acting chairman, National Statistical Commission, said: “There is a possibility the data quality may suffer due to this, and revisions will be drastic. However, I feel MoSPI (Ministry of Statistics and Programme Implementation) would have done due-diligence before advancing the date. They may have spoken to the companies to furnish their data before the due date.”
According to MoSPI, the 2011-12 IIP series comprises 839 items. Statistically, among the three sectors–‘mining’ constitutes 29 items, ‘manufacturing’–809 items, and ‘electricity’, just one. The ministry collects data from 14 source agencies to compile the IIP. About 50-55% of the data of IIP is sourced from the core sector data, compiled by the commerce ministry’s office of the economic adviser.
TCA Anant, former secretary, MoSPI doesn’t expect data quality to be compromised much as majority of IIP is based on core sector data. “The core-sector indicators come from the same sources as of the IIP, which comes with a 30-day lag,” Anant said.
Source: The Financial Express
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