COMPILATION OF COMPARABLE STATE LEVEL INDICES OF
INDUSTRIAL PRODUCTION
I. Background
The CSO currently compiles
and releases an all-India series on monthly IIP with base 1993-94, using the
data supplied by the 15 source agencies. Apart from CSO, a number of State
Directorates of Economics .& Statistics are also engaged in compilation of
State level Indices of Industrial Production (IIP). However, the Indices
compiled by State/UT Governments prior to current series as base year with
1993-94 lacked comparability due to differences in the choice of base year,
item basket, periodicity for releasing indices, methodology, data sources used
etc.
2. Need for Comparable State level IIPs to facilitate
comparative studies on State-wise performance of industrial sector was felt for
quite some time. Recognising the need, the Hon’ble Prime Minister gave an
Assurance to the Parliament in April,1993 that efforts would be made to make
available Comparable State level IIPs.
3. A Technical Advisory
Committee (TAC) was constituted on 16 June, 1995 for an in-depth examination of
various technical issues relating to compilation of State-wise Comparable IIPs
and to make suitable recommendations on the subject. Subsequently, the terms of
reference of the committee were extended to include the examination of all
issues and provide technical guidance for shifting the base year of all-India
IIP to the new base 1993-94.
4. The committee primarily considered three major issues,
namely: (i) Compilation of Comparable State level IIPs and (ii)Compositing of
comparable State level IIPs into an all-India IIP (iii) Revision of the series
of all-India IIP with base 1980-81 to new base year 1993-94.
5. The base
year of All-India IIP was shifted from 1980-81 to 1993-94 and the new series has
come into force w.e.f. May 27, 1998.
II. Compilation of
Comparable State level IIPs
Major Recommendations of
TAC.
6. The major recommendations of TAC were
that:-
-All States/UTs should compile State level IIPs using uniform
methodology.
-The base year may be chosen as 1993-94.
-The item basket should be selected in such a manner that about 80% of
the value of output of the respective States manfacturing sector is captured by
the selected items.
-The weighting diagram should take into account the total production of
both organised as well as unorganised sectors.
-As the GVA in electricity sector in many States and also in some
2-digit industry groups of manufacturing sector in some States/UTs was
negative, it was not possible to allocate weights based on GVA. As such, for allocation of weights GVO may
be used uniformly from sectoral to item level.
-The revised series would follow NIC- 1987.
-Data for the unorganised sector would be made available by DCSSI.
-CSO would make available the relevant ASI data and also provide
technical guidance.
Uniformity of Methodology:
7. Uniformity of methodology was defined to mean that (i)
The procedure for selection of items in the item basket and for preparation of
weighting diagram; (ii) Periodicity for release of indices; and (iii) choice of
base year should be the same in all states.
Choice of Base Year :
8. It was initially proposed to adopt 1984-85 as the common
base year for State IIPs as well as Composite all-India IIP. The choice for
1984-85 was motivated by the ready availability of ASI data and the then
decision of shifting the base year of current series of all-India IIP to 1985-86. The committee later
recommended the adoption of 1993-94 as
the base year for State IIPs.
Selection of Item Basket :
9. Requisite production data dased on ASI:1993-94 were
supplied to all States/UTs by CSO. Different criteria were examined and the
committee recommended that the items selected in the State’s item basket should
be such that about 80% of the value of output of State’s manufacturing sector
is captured.
Weighting Diagram :
10. Like in all-India IIP, three major sectors viz. Mining &
Quarrying, Manufacturing & Electricity of State economy were recommended
for inclusion in the State IIP. While preparing the weighting diagram, some of
the 3/4 digit sub-groups exhibited negative/zero GVA which would have resulted in ignoring the items from such
sub-groups. Therefore, the committee
considered the following alternatives:
(i)
To
ignore the items selected, if the corresponding GVA is negative or zero.
(ii)
Allocate
the weights using the value of factors of production instead of GVA and GVO.
After considering various
alternatives, the TAC recommended that
GVO may be used for allocation of weights from sectoral to item level for State
IIPs.
Unorganised Sector
11. The contribution of the unorganised manufacturing sector for
1993-94 has been estimated by interpolating the follow-up survey of economic
census for the years 1989-90 & 1994-95. The estimation was done separately
for DME ,NDME & OAME of NSSO.
Collection of Data for State
IIPs
12. The State Govts. wanted that data may be collected by FOD and
supplied to them. The committee was not at all in favour of a Central agency
for collection of production data on behalf of the States. The step will be
detrimental, infact, hazardous for development of State Statistical System.
Therefore, the Committee recommended that States/UTs should make necessary
augmentation in infrastructure for
collection of regular data. It was decided that for the mining sector, the
requisite data for the preparation of the weighting diagram and regular
production data for compilation of index may be made available to the States by
IBM, Nagpur and for electricity sector the necessary data may be sent to the
States by CSO after procuring from Central Electricity Authority.
III. Present position regarding compilation of
comparable State level IIPs
Some of the States have started compilation of monthly
IIPs with base 1993-94. Tamil Nadu has released indices from April, 1994 to March,
2006. Andhra Pradesh has released the provisional indices from April, 1998 to
March, 2006. West Bengal has released the provisional indices from January,
1999 to March, 2006. Goa has compiled
monthly IIPs for 1994-95 to 2001-2002. Delhi has compiled monthly IIPs for
1999-2000 to 2005-06. Haryana has compiled provisional monthly IIPs for the
years 1996-97 to 2001-02. Assam has compiled indices for January, 01 to March,
2006. Rajasthan has compiled indices for Jan., 2001 to Deember, 2005.
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