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Core Sector Output

Created on: 

June 3, 2022 at 11:44:21 AM

Why in News?

India's eight core sector industries showed a robust growth of 8.4% in April compared to 4.9% in March 2022.

  • The eight core sector industries comprise 40.27% of the weight of items included in the Index of Industrial Production (IIP).

  • The eight core sector industries in decreasing order of their weightage are: Refinery Products> Electricity> Steel> Coal> Crude Oil> Natural Gas> Cement> Fertilizers.

What is the Index of Eight Core Industries?

  • About:

    • Index of Eight Core Industries (ICI) refers to the production volume index.

    • It evaluates the combined as well as individual performance of production in selected eight core industries.

    • The current weightage (April 2021), of eight core industries is given below:

      • Petroleum Refinery production (28.04%), Electricity (19.85%), Steel (17.92%), Coal production (10.33%), Crude Oil (8.98%), Natural Gas production (6.88%), Cement production (5.37%), Fertilizer production (2.63%).

  • ICI is compiled and released by the Office of Economic Adviser (OEA), Department for Promotion of Industry and Internal Trade (DPIIT), Ministry of Commerce and Industry.

  • Significance:

    • ICI provides advance indication on production performance of industries of ‘core’ nature prior to the IIP release by the National Statistical Office, NSO.

    • General economic activities and industrial activities are likely to get impacted by the eight core industries.

What is the Index of Industrial Production?

  • About:

    • Index of Industrial Production (IIP) is an indicator that measures the changes in the volume of production of industrial products during a given period.

    • It is compiled and published monthly by the National Statistical Office (NSO), Ministry of Statistics and Programme Implementation.

    • 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.

  • Base Year for IIP is 2011-2012.

  • Significance of IIP:

    • It is used by government agencies including the Ministry of Finance, the Reserve Bank of India, etc, for policy-making purposes.

    • IIP remains extremely relevant for the calculation of the quarterly and advance Gross Domestic Product (GDP) estimates.


IIP, India's eight core sector industries

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