Core Sector Growth

According to the recently released official data by the Ministry of Commerce and Industry, India’s core sector output grew by 6.1% in July, down from 8.5% a year ago. 

Crucial Insights on the Released Data

The core sector comprises coal, crude oil, natural gas, refinery products, fertilisers, steel, cement, and electricity.

Summary of the Index of 8 Core Industries:

• Growth: Despite an unfavourable base effect, the core sector output grew better than the previous month. The growth rate is up from 5.1% in June.
  • In June 2024, the growth in IIP was at a five-month low of 4.2%. It was 4% in June last year.
• Reason for Growth is Rise in Infrastructure Activity: 
  • Infra activity on the government side picked up, which resulted in steel and cement growing. This came over high base year growth rates.
  • Post election, there has been a pick up in road construction in particular. The good performance of housing and auto also added to the demand for steel.
  • Growth in fertilisers indicates that companies are building stocks for both kharif and rabi seasons.
  • Higher refinery products growth can be attributed to higher industrial activity as well as exports.

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About Core Sector Growth in India

The main or the key industries constitute the core sectors of an economy. In India, there are eight sectors that are considered the core sectors. 

• Impact of Core Sector: These sectors have a major impact on the Indian economy and significantly affect most other industries as well.
• Share of Eight Core Sectors: The eight industries have a combined share of 40.27% in the Index of Industrial Production (IIP), which gives the growth rates of different industry groups in a specified period.
• Published by: The Index of Eight Core Industries (ICI) is prepared every month and released by the Office of the Economic Adviser (OEA), Department for Promotion of Industry and Internal Trade (DPIIT), and Ministry of Commerce & Industry.

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