Q. In the ‘Index of Eight Core Industries’, which one of the following is given the highest weight?
- Coal production
- Electricity generation
- Fertilizer production
- Steel production
Answer: (b) Electricity generation
Notes:
- The Core sectors of an economy are the primary or important industries. Eight core sectors in India are considered key sectors.
- The Core Sector of India includes Coal, Crude Oil, Natural Gas, Refinery Products, Fertilizers, Steel, Cement, and Electricity.
- It comprises 40.27 percent of the weight of items included in the Index of Industrial Production (IIP).
- The Office of the Economic Adviser (OEA), Department of Industrial Policy and Promotion (DIPP), and Ministry of Commerce and Industry compile and publish the index.
- The Index of Key Industries evaluates the performance of the eight core industries of coal, crude oil, natural gas, refinery products, fertilisers, steel, cement, and power in aggregate and individual production terms. These industries serve as the foundation for all other industries.
- The current year’s production of these industries is computed using the 2011-2012 base year.
Weight of Core Industries in IIP
- The Eight Core Industries accounts for 40.27 percent of the products in the Index of Industrial Production (IIP).
- The eight Core Industries in decreasing order of their weightage: Refinery Products> Electricity> Steel> Coal> Crude Oil> Natural gas> Cement> Fertilizers.
| Sector | Description | Weightage |
|---|---|---|
| Coal | Coal production, excluding Coking coal. | 10.33 % |
| Electricity | generation of thermal, nuclear, hydro | 19.85 % |
| Crude Oil | Total crude oil production. | 8.98 % |
| Cement | Production in large plants and mini plants. | 5.37 % |
| Natural Gas | Total production of natural gas. | 6.88 % |
| Steel | Production of alloy and non-alloy steel only. | 17.92 % |
| Refinery Products | Total refinery production. | 28.04 % |
| Fertilizer | Urea, ammonium sulfate, calcium ammonium nitrate, complex grade fertilizer, and single superphosphate, among others. | 2.63 % |
Index of Industrial Production (IIP)
- 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 GDP (Gross Domestic Product) estimates.
- IIP is an important economic indicator for the manufacturing industry.