New IIP, WPI series from tomorrow NEW DATA SERIES: WHAT TO EXPECT

New-age items such as smartphones, laptops and tablets are likely to enter the new series of the Index of Industrial Production (IIP), to be launched on Friday.

Similarly, chocolates, noodles, harmoniums, guitars, cricket bats and balls might be included in the new Wholesale Price Index (WPI).

Both indices will have a new base year of 2011-12, against the current 2004-05. This is to bring them at par with other macro economic data such as on gross domestic product (GDP) and the consumer price index.

Games and toys might be a separate WPI category, under which items such as dolls, cycles, carrom boards and playing cards, among others, could figure, an official said. Besides footballs, part of the current series, items such as tennis and badminton rackets would be added to the sports category list, he said.

While mobile phones have been on the IIP since the 199304 series, these are only the old models.

For long, economists and think tanks have been asking for new time series data on IIP and WPI, so that GDP numbers can be based on more accurate and realistic data.

Says commerce and industry minister Nirmala Sitharaman, “Many of the industries in the 2003-04 IIP and WPI indices are not even there now, as the nature of production has changed. Therefore, these have to solve the problem of relevant numbers | | | of industries, as well as relevant industries.”

The official quoted earlier said there had been repeated complaints regarding the list of items under IIP not being comprehensive. To that end, more items in the Fast Moving Consumer Goods category would be included.

“Items which figure significantly in the IIP database like cathode ray televisions are completely archaic,” says Devendra Pant, chief economist at India Ratings. These do not represent the manufacturing or buying pattern of today's consumers who have moved to other items, in these cases due to better technology, he added.

To address the issue of volatility which has come to describe the IIP, the new index might also include the value of production of some capital goods, apart from the whole product. The idea had originated from a committee on the issue, led by the late Saumitra Chaudhuri, economist and member of the erstwhile Planning Commission.

The value should be used for indexation in those capital goods which have a large gestation period or are difficult to aggregate, the committee had said.

IIP denotes the level of output in manufacturing, mining and power in physical volumes. There has often been criticism of its divergence from GDP growth data. The change in the base year to 2011-12 will blunt that criticism but variance between these two sets of data might remain. More focus on consumer goods across the board to better map consumer demand Tech items such as smartphones, tablets and laptops may be added Greater sample size for items