Core Sectors Growth

GS Paper III Indian Economy

Context:

In June 2023, seven out of the eight core sectors, which make up the Index of Industrial Production, experienced an increase in their performance.

About Index of Industrial Production (IIP):

IIP is an index which shows the growth rates in different industry groups of the economy in a stipulated period of time.
Publication: It is published monthly by the National Statistical Office (NSO), Ministry of Statistics and Programme Implementation.
Base Year: 2011-12
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.

Eight Core Sectors:

The eight core sector industries comprise 40.27% of the weight of items included in the Index of Industrial Production (IIP) which includes (in decreasing order of weightage) :
- Refinery Products> Electricity> Steel> Coal> Crude Oil> Natural Gas> Cement> Fertilizers.

Significance of IIP:

It is used by government agencies, the Reserve Bank of India, etc, for policy-making decisions.
It helps in the calculation of the quarterly and advance GDP (Gross Domestic Product) estimates.

Index of Industrial Production vs Annual Survey of Industries (ASI)

While the IIP is a monthly indicator, the Annual Survey of Industries (ASI) is the prime source of long-term industrial statistics.
The ASI is used to track the health of the industrial activity in the economy over a longer period. The index is compiled out of a much larger sample of industries compared to IIP.

News Source : The Hindu