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Core Sectors In India

Core Sectors In India

What are core sectors?

  • Core industry can be defined as the main industry which has a multiplier effect on the economy.
  • In most countries, there is particular industry that seems to be backbone of all other industries and it qualifies to be the core industry.
  • The Eight Core Industries comprise 40.27% of the weight of items included in the Index of Industrial Production (IIP).

Eight core sectors in Indian economy

  • Electricity
  • Steel
  • Refinery products
  • Crude oil
  • Coal
  • Cement
  • Natural gas
  • Fertilizers

Weight of Core Industries in IIP Industry (Weight in %) | Core Sectors In India

  • Coal 10.33
  • Electricity 19.85
  • Crude oil 8.98
  • Cement 5.37
  • Natural gas 6.88
  • Steel 17.92
  • Refinery products 28.04
  • Fertilizers 2.63

The Index of Eight Core Industries (ICl)

  • The monthly Index of Eight Core Industries (ICI) is a production volume index. ICI measures collective and individual performance of production in selected eight core industries viz. Coal, Crude 0il, Natural Gas, Refinery Products, Fertilizers, Steel, Cement and Electricity.
  • The Index is compiled and released by Office of the Economic Adviser (OEA), Department of Industrial Policy & Promotion (DIPP), Ministry of Commerce & Industry.
  • The inter-se weights of these eight industries are largely in alignment with the respective weight of these industries in the Index of Industrial Production (IIP).
  • The base year of the ICI has been revised to 2011-12 from 2004-05 in alignment with the new series of 1IP. Combined weight of these eight core industries is 40.27 percent of IIP with base 2011-12. The Index is calculated by using the Laspeyres formula of weighted arithmetic mean of quantity relatives.
  • ICI for a reference month is released with a time lag of one month on last day of the next month, which is about twelve days prior to the release of IIP for the reference month. The monthly index is released on the last working day of every month at 5.00 PM. If last day happens to be a holiday then it is released on the first working day of the next month. The index is released through Press Information Bureau (PIB) as well as on website of the Office of the Economic Adviser.

Effect of COVID-19 on core sectors | Core Sectors In India

  • In view of nationwide lockdown during April & May 2020 due to COVID-19 pandemic, various industries viz. Coal, Cement, Steel, Natural Gas, Refinery, Crude Oil etc.experienced substantial loss of production. However, the rate of fall in the Index of Eight Core Industries decelerated on a sequential basis on account of partial opening of economic activities during September 2020.
  • The combined Index of Eight Core Industries stood at 119.7 in September, 2020, which declined by 0.8% (provisional) as compared to the Index of September, 2019. Its cumulative growth during April to September, 2020-21 was -14.9%.
  • Final growth rate of Index of Eight Core Industries for June’ 2020 is revised at -12.4%.

 

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