Core sectors’ growth skids to 6-month low in November

What’s in today’s article?

• Why in news?
• What is Index of Core Industries (ICI)?
• What is Index of Industrial Production (IIP)?
• News Summary: Core sectors’ growth skids to 6-month low in November

Why in news?

• The output of eight core infrastructure sectors expanded 7.8% in November.
  • That is the slowest pace of growth recorded since May, when the eight sectors cumulatively grew 5.2%.
• The Index of Core Industries (ICI) was down 3.34% from October levels, and stood at 150.3, its lowest level since March 2023.

Index of Core Industries (ICI)

• About
  • ICI is a production volume index which is released on monthly basis.
  • The index measures combined and individual performance of production in selected eight core industries.
  • The base year of the ICI has been revised to 2011-12 from 2004-05.
• Institutions involved
  • The Office of Economic Adviser, Department for Promotion of Industry and Internal Trade under Ministry of Commerce & Industry is mandated with releasing the Index.
• Eight Core Industries of the Index
  • The eight core industries are: Coal, Crude Oil, Natural Gas, Refinery Products, Fertilizers, Steel, Cement and Electricity.
  • Weight carried by individual industries are:
    • Coal (weight: 10.33%), Crude Oil (weight: 8.98%), Natural Gas (weight: 6.88%), Petroleum Refinery (weight: 28.04%),
    • Fertilizers (weight: 2.63%), Steel production (weight: 17.92%), Cement production (weight: 5.37%), Electricity generation (weight: 19.85%)

Index of Industrial Production (IIP)

• About
  • The IIP number measures the industrial production for the period under review, usually a month, as against the reference period.
  • There is a lag of six weeks in the publication of the IIP index data after the reference month ends.
  • It is currently calculated using 2011-2012 as the base year.
• Institution involved
  • National Statistical Organisation (NSO) under the Ministry of Statistics and Programme Implementation (MoSPI) releases the IIP data.
• IIP Index Components
  • IIP is a composite indicator that measures the growth rate of industry groups classified under:
    • Broad sectors, namely, Mining (14.4%), Manufacturing (77.6%) and Electricity (8%)
    • Use-based sectors, namely Basic Goods, Capital Goods and Intermediate Goods etc.
  • These Eight Core Industries mentioned in above section comprise 40.27 percent of the weight of items included in the IIP.

News Summary: Core sectors’ growth skids to 6-month low in November

• The output of eight key infrastructure industries slowed to a six-month low of 7.8 per cent in November on the back of a high base and festival holidays.
• According to data released by the Ministry, growth in the output of refinery products (12.4 per cent) accelerated in September vis-à-vis the preceding month, while output of crude oil (-0.4 per cent) and cement (-3.6 per cent) contracted.
• Output growth in all other sectors, including coal (10.9 per cent), natural gas (7.6 per cent), fertilisers (3.4 per cent) steel (9.1 per cent), and electricity (5.6 per cent) decelerated.

Q1) What is National Statistical Organization (NSO)?

The National Statistical Organization (NSO) is a government entity that collects, compiles, and releases official statistics. NSO consists of the Central Statistics Office (CSO) and National Sample Survey Office (NSSO).

Q2) What are Core sectors? 

Core sectors are the primary or important industries of an economy. In India, the eight core sectors are: Electricity, Steel, Refinery products, Crude oil, Coal, Cement, Natural gas, Fertilizers. These eight core industries make up 40.27% of the weight of items in the Index of Industrial Production (IIP).

Source: Core sectors’ growth skids to 6-month low in November | Office of Economic Adviser | Livemint