India’s Core Sectors

In Context

• The growth of eight core infrastructure sectors rose by 12.7% in June against 9.4% in the year-ago period.

What are the Core Sector Industries?

• These core industries are considered as main or key industries of the economy and serve as the backbone of all other industries
• The eight-core sector industries include coal, crude oil, natural gas, refinery products, fertiliser, steel, cement and electricity
• The eight Core Industries in decreasing order of their weightage: Refinery Products> Electricity> Steel> Coal> Crude Oil> Natural Gas> Cement> Fertilizers.
• The eight core industries comprise 40.27% of the weight of items included in the Index of Industrial Production (IIP).

Index of Industrial Production (IIP)

• It is an index that tracks manufacturing activity in different sectors of an economy.
• It is a composite indicator that measures the growth rate of industry groups classified under:
  • Broad sectors, namely, Mining, Manufacturing, and Electricity.
  • Use-based sectors, namely Basic Goods, Capital Goods, and Intermediate Goods.
• It is the only measure of the physical volume of production.
• It is compiled and published monthly by the Central Statistics Office (CSO), Ministry of Statistics and Programme Implementation.
• The base year of the index has been revised to 2011-12 from 2004-05 in alignment with the new series of IIP.

Significance of IIP

• Shows the growth rates in different industry groups of the economy in a stipulated period of time.
• The Index is used by government agencies and departments such as the Finance Ministry and the RBI.
• Useful for the projection of advance GDP estimates.

Source: ET