• Core Sector Industries of the economy are the main or the key industries in the economy.
  • There are 8 such sectors in India. The industries included in the eight-core sectors are coal, crude oil, natural gas, refinery products, fertilizer, steel, cement, and electricity. 
  • These industries are termed as the core industries owing to their strong impact on the general economic activities and other industrial activities.
  • These are the most important sectors of the economy and constitute 40.27% of the weight of items included in the Index of Industrial Production (IIP).
  • The Index of eight core industries (ICI) is prepared every month by the Office of the Economic Adviser (OEA), the Department for Promotion of Industry and Internal Trade (DPIIT), and the Ministry of Commerce & Industry.
  • Core industries include eight sectors of the Indian economy that are mentioned below:
    • Coal – Coal production, excluding Coking coal.
    • Electricity – Electricity generation of thermal, nuclear, hydro, imports from Bhutan.
    • Crude Oil – Total crude oil production.
    • Cement – Production in large plants and mini plants.
    • Natural Gas – Total production of natural gas.
    • Steel – Production of alloy and non-alloy steel only.
    • Refinery Products – Total refinery production.
    • Fertilizer – Urea, ammonium sulfate, calcium ammonium nitrate, complex grade fertilizer, and single superphosphate, among others.
  • The Eight Core Industries in decreasing order of their weightage are Refinery Products> Electricity> Steel> Coal> Crude Oil> Natural Gas> Cement> Fertilizers.
Core Industries in India

Index of Eight Core Industries (ICI)

  • Index of Eight Core Industries (ICI) refers to a production volume index that measures the collective and individual production performances of eight selected core industries.
  • The compilation and releasing of the index are done by the Office of the Economic Adviser (OEA), Department of Industrial Policy and Promotion (DIPP), Ministry of Commerce and Industry.
  • 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 Oil, Natural Gas, Refinery Products, Fertilizers, Steel, Cement and Electricity.
  • Prior to the 2004-05 series six core industries namely Coal, Cement, Finished Steel, Electricity, Crude petroleum and Refinery products constituted the index basket.
  • Two more industries i.e. Fertilizer and Natural Gas were added to the index basket in 2004-05 series. The ICI series with base 2011-12 will continue to have eight core industries.

Index of Industrial Production (IIP)

  • The Index of Industrial Production (IIP) is an index for India which details out the growth of various sectors in an economy such as mineral mining, electricity and manufacturing.
  • The all India IIP is a composite indicator that measures the short-term changes in the volume of production of a basket of industrial products during a given period with respect to that in a chosen base period.
  • IIP is compiled and published monthly by the National Statistics Office (NSO), Ministry of Statistics and Programme Implementation six weeks after the reference month ends.

Importance of Core Sector Industries

  • The core sectors have a major impact on the Indian economy and significantly affect most other industries as well.
  • Their measures help account for the physical volume of production in India.
  • Their analysis offers a clearer and more realistic assessment of what’s happening in the economy
  • Their progress is used by government agencies for policy-making purposes.
  • They remain extremely relevant for the calculation of the quarterly and advanced Gross Domestic Product (GDP) estimates.
  • The core sector is also known as Infrastructure output as they represent the basic industries that form the base of the economy.

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