The Index of Core Industries (ICI) has finally joined the country’s other economic metrics in becoming up-to-date and representative of the economy. The other metrics such as the national accounts, Consumer Price Index (CPI), Wholesale Price Index (WPI), and the Index of Industrial Production (IIP) were updated earlier this year, although even those were after considerable delays. The ICI has now joined their ranks with the June data being based on a new series with an updated base year, an additional sector being covered, and revised weights and methodologies. This is a welcome upgrade. The performance of these core industries is a vital barometer of the state of the economy. In the new series, the previous eight sectors have become nine, with the vital inclusion of the iron ore sector. Improvements have also been made to how the steel and coal sectors are measured in order to remove the previous double-counting that was taking place. The addition of a sector would naturally change the distribution of weights of the sectors in the index, but the final weights also reflect a broader shift in economic activity. The coal and natural gas sectors have seen their weights nearly halve to about 5.6% and 3.8%, respectively. On the other hand, the electricity sector now makes up more than 30% of the index from less than 20% in the previous series. All of this perhaps reflects the rising share of renewables in electricity generation, even as demand for electricity itself surges.

The performance of the index in June 2026, with a five-month-high growth of 5%, would suggest that Indian industry is shrugging off the slump induced by the West Asia crisis. However, two of the strong growth numbers — iron ore by 43.9% and electricity by 9.8% — were due to a statistical base effect since both sectors had contracted in June last year. It remains to be seen whether the numbers will remain this positive once that base effect wears off in the months ahead. The new series highlights some of the systemic issues that the old series did, such as the persistent contraction of the crude oil and natural gas sectors. They have contracted continuously for 18 and 24 months, respectively. If India does not have these resources, that is one thing. But if it has them and still is not able to extract them economically, then that is a serious shortcoming. The update of the ICI and the recent upgrade of the WPI would have been a good time for a broader statistical reorganisation. With the Ministry of Statistics and Programme Implementation handling the CPI and the IIP, it only makes sense for the WPI and ICI to move to it from their current home in the Ministry of Commerce and Industry. That change can still be made.

India’s latest industrial growth figures show that, contrary to global trends and overall perception, the country’s industrial output is getting stronger. Notably, the data show a quick bounce-back in industrial performance after the initial hit from the West Asia crisis. However, the new data also raise some important concerns about the composition of the growth, the systems behind the recent data upgrades, and the need for further improvements. Growth in the Index of Industrial Production hit a five-month high of 5.1% in May 2026, up from the 4.9% growth seen in April, which itself was a substantial improvement over the performance in March — the first full month after the West Asia crisis began. Within this, the manufacturing sector grew at a relatively robust 5.5% in May, albeit slower than in April. One view is that this is due to a revival in domestic consumption, since the consumer durables and non-durables sectors also grew at multi-month highs. Consumer durables, especially, have done well in April and May. However, the contrary argument is that domestic demand is in fact not doing well, and it is export growth that is leading to higher production. This is bolstered by the fact that GST revenues from domestic transactions have grown slower over the last six months than in 2025-26 and the year before that. Merchandise exports, on the other hand, hit a four-year high in April followed by an all-time high in May. It would certainly be welcome if India’s industry has global demand to fill, but the fact that more of this demand is not coming from within the country is a cause for concern. The economy is already hostage to world events.

The May IIP data were also accompanied by a note from the Ministry of Statistics and Programme Implementation (MoSPI) stating that it had made a major change to the methodology for computing growth for some sectors. It had abandoned the Wholesale Price Index as its chosen deflator to estimate the value of production in favour of the new Producer Price Index. This is a more accurate approach. But it did not, however, answer why this change was implemented belatedly and not when the new series of data was introduced on June 1. It suggests an unusually unsystematic approach by MoSPI. The strong growth in the IIP also does not reconcile with the fact that the Index of Eight Core Sectors — a separate government measure of industrial growth — grew at its second-lowest rate in 21 months in May. The core sector index is still outdated while the other major indices have been recently updated, but such a discrepancy nevertheless raises questions about what exactly is being measured.

The government has, in recent months, implemented several long-overdue but welcome upgrades to India’s statistical databases. Wide-ranging, they cover the way the country measures Gross Domestic Product (GDP), industrial production, and price changes at the retail, wholesale, and producer levels. These updates have not only made India’s key economic statistics more representative of reality, but have also brought them in line with international best practices. The most basic change across all indices has been the updating of base years. Until recently, the base years for GDP, the Consumer Price Index (CPI), Wholesale Price Index (WPI), and Index of Industrial Production (IIP) were either 2011 or 2012. As such, these measures were significantly outdated and less reflective of reality with each passing year. In February, the Ministry of Statistics and Programme Implementation (MoSPI) released the new series of national accounts data, including GDP, with a base year of 2022-23. The new series incorporates methodological improvements and new data sources, making it more granular and robust. Some of these, such as the double-deflator approach, have long been demanded by statisticians and international bodies, including the IMF.

Similarly, MoSPI had in February also released the new series of the CPI with an updated base year of 2024, a more inclusive basket of items measured, and more accurate weightages. This has enabled a more realistic reading of retail inflation, a key metric in interest-rate decisions. In early June, MoSPI then released the new series of the IIP as well. The base year was updated to 2022-23 and the index’s data collection was strengthened. This, too, eventually feeds into more accurate GDP data. The other factor to be highlighted is that the data upgrades have not been limited to just MoSPI. The Ministry of Commerce and Industry also updated its WPI, releasing the new series on Monday. A more accurate WPI and CPI yield a more accurate GDP deflator, which strengthens the way that statisticians derive real GDP growth after having adjusted for inflation. The Commerce Ministry also released a new Producer Price Index (PPI), which is to replace the WPI in five years. A PPI is the standard among developed economies and provides more information about both goods and service price levels at the producer stage. With all these, the IMF is sure to improve the recurring ‘C’ grade it has given India’s national accounts data. These, it is hoped, will also be capped off by a time-bound release of the new Census with no further delays.

Earlier this week, the Ministry of Statistics and Programme Implementation released the latest Index of Industrial Production (IIP), a key barometer of India’s industrial health. The April 2026 print assumes added significance as it is the first release under the new 2022-23 base series and the second full month following the U.S.-Israeli war on Iran. Industrial output grew 4.9% year-on-year in April. While direct comparisons with earlier data should be treated with caution given the extensive revisions to the index’s basket, weights and methodology, the numbers suggest that India’s industrial fundamentals have remained relatively resilient despite disruptions to global oil and gas supply chains. A granular reading, however, reveals that this resilience is far from broad-based. Capital goods output expanded by a robust 16% year-on-year, reflecting the continuing effects of elevated public capital expenditure and infrastructure spending. By contrast, consumer durables output grew only 4.3%, while consumer non-durables expanded by a modest 2.8%, suggesting that rising fuel and energy costs may be exerting pressure on household consumption.

More significant than the headline growth number, however, is the extensive overhaul of the IIP itself. The revised series seeks to better reflect the structure of a rapidly changing economy. New products and sectors have been incorporated and several obsolete items dropped. A fourth major sector — water supply, sewerage and waste management — has been introduced with a weight of 2.02%. The electricity category has been expanded into Electricity and Gas Supply, with its weight rising to 10.87% from 7.99% earlier. Manufacturing remains the dominant component of the index, though its weight has declined marginally to 76.06% from 77.63%. More notable is the reduction in the weight of mining and quarrying to 11.05% from 14.37%. These shifts suggest that the importance of value-added infrastructure and utility services in gauging industrial activity has expanded, while the relative significance of primary resource extraction has diminished. Together, these changes better capture India’s emergence as a components and value-added manufacturing hub integrated into global supply chains. Most importantly, the government has indicated its intention to move towards a chain-linked framework with more frequent updates to sectoral weights. Such a system would allow official statistics to better keep pace with structural changes in the economy, making the IIP a more accurate and timely gauge of industrial health.

The retail inflation data for October once again underscore the fact that the update of the Consumer Price Index (CPI) cannot happen fast enough. The data show that the rate of overall inflation fell to just 0.25%, the lowest it has been since at least January 2012. On the face of it, this would be cause for celebration, but a deeper look reveals this drastic fall to be a statistical anomaly rather than an actual fall in price levels. The food and beverages category saw prices falling 3.7% in October, the largest in the history of the CPI’s current series. However, the main reason for this contraction was not so much that food prices have fallen, but because food inflation in October last year was a blistering 9.7%. This high base ensured that food inflation in October 2025 was negative, even though vegetable prices in markets have been on the rise recently. With the food and beverages category enjoying a weightage of nearly 46% in the overall CPI basket, this statistical anomaly in food inflation was responsible for pulling the entire index down. Indeed, inflation in nearly every other major sub-group — fuel and light, housing, tobacco, and the miscellaneous category — was higher this October than last. The impact of the GST rate cuts has, so far, been seen only in the clothing and footwear category — the only one apart from food to see inflation lower than last year. All of this shows just how skewed the inflation measure is. Not only is it outdated, with the base year set as 2012, but the weightages are no longer accurate and more often obscure rather than clarify. The disconnect between the CPI and reality can perhaps best be shown by the fact that people the Reserve Bank of India (RBI) had surveyed in September had said that their perceived inflation rate was 7.4% — a far cry from what the CPI reported.

The urgency behind the update is not just because of the vast gap between measured and perceived inflation. It is also because the RBI’s Monetary Policy Committee uses the CPI as its benchmark when deciding what to do with interest rates. Its next meeting is in December and it will have to decide whether to keep rates unchanged or to cut them. It will have to contend with growth data clouded by the temporary impact of the GST rate cut-related demand boost. Having to also parse through inflation data beset by statistical anomalies will only make accurate policymaking that much harder. The Ministry of Statistics and Programme Implementation has said that the new series of the CPI will be ready by the first quarter of the next financial year. The sooner it happens, the better.

The Ministry of Statistics and Programme Implementation is all set to conduct two key economic surveys — to measure household finances and to gauge the economic situation of India’s farmers — between July 2026 and June 2027, the Ministry announced on Thursday (September 11, 2025).

These are the All-India Debt and Investment Survey (AIDIS) and the Situation Assessment Survey (SAS) of Agricultural Households.

“Both of these nationally representative surveys are scheduled to be conducted from July 2026 to June 2027,” MoSPI said in a press release.

“The AIDIS is one of India’s most significant surveys on household finance,” it added. “The SAS of Agricultural Households, first launched in 2003, is designed to assess the economic conditions of farming communities.”

According to MoSPI, the AIDIS provides “critical” data on household indebtedness and asset ownership across both rural and urban areas. 

“Its findings are instrumental in shaping national accounts, assessing inequality in asset distribution, understanding credit markets, and informing policies of the Reserve Bank of India, MoSPI, and other government institutions,” it said.

The SAS of Agricultural Households, on the other hand, includes data on agricultural household income and expenditure, indebtedness and access to credit, land and livestock ownership, crop and livestock production, farming practices and the use of technology, and access to government schemes and crop insurance.

“The Ministry of Agriculture and Farmers Welfare, NITI Aayog, researchers, and financial institutions utilise the survey findings to shape policies and programmes aimed at agriculture and rural development,” MoSPI noted.

It added that it has uploaded the draft concept notes and schedules of both surveys on its website and has invited policymakers, researchers, farmer groups, financial institutions, and the general public to share their feedback.

The Index of Industrial Production (IIP), the nation’s monthly barometer of goods output, revealed a 10-month low growth rate in June, at 1.5%, largely due to the sharp contraction in mining activity, by –8.7% (10.3% in June 2024), and electricity output, by –2.6% (8.6% in June 2024). The early onset of the southwest monsoon, with its erratic and uneven distribution, led to water logging in large parts of the mining belts in Odisha, Jharkhand and West Bengal, hampering a key economic activity. Ranchi’s regional meteorological office has said that Jharkhand recorded 504.8 mm (against a normal of 307 mm) between June 1 and July 12 — but five districts were categorised as rain deficient. The resultant damage to the power distribution infrastructure and disruptions to supply chains may have contributed to the sluggish growth in industrial output at 3.9% in June, up from 3.5% a year ago. This in turn, is likely to have led to subdued power demand. While mining and power production collectively make up for almost a quarter (22.3%) of the IIP’s weightage, the rest is apportioned for manufacturing activities. The robust growth in capital (3.5%), intermediate (5.5%) and infrastructure (7.2%) goods output, indicates that much of industrial growth continues to hinge on the government’s infrastructure spends.

There has been a general reluctance, both institutionally and in public economic discourse in India, to explicitly correlate disruptions in economic activity with climate-related events, especially in official narratives such as the IIP or GDP data releases. The Ministry of Statistics and Programme Implementation and the Reserve Bank of India (RBI) tend to frame industrial and economic under-performance in terms of ‘high base effects; supply chain bottlenecks; input cost fluctuations; global demand softening; and domestic consumption contraction’. Climate-related disruptions, such as in mining belts, are rarely mentioned in IIP or national accounts commentary. Economic data agencies in India have been slow to integrate climate risk frameworks into routine macroeconomic reporting, unlike institutions such as the European Central Bank or the Bank of England which have begun mapping climate risk to output and financial stability. True, climate attribution is complex: linking a specific event such as waterlogging in a coal mine to broader climate change involves scientific rigour and probabilistic modelling. Policymakers often avoid this due to fear of politicising economic data. Indeed, the RBI’s Financial Stability Reports now include climate-related risks. But this has not yet filtered into production-side metrics such as the IIP. The time has come for India to make a systemic shift to integrate climate attribution to economic activity.