Index of Eight Core Industries
The Office of the Economic Adviser (OEA) in the Department of Industrial Policy and Promotion (DIPP), Government of India compiles and releases the production index of core industries.
The rationale of the Index of Core Industries
The Central Statistics Office (CSO) of the Government of India brings out monthly Index of Industrial Production (IIP). Industrial Production in the IIP comprises three distinct groups of industry, (a) Mining, (b) Manufacturing and (c) Electricity. The quick estimate of IIP pertaining to a month is released after approximately six weeks (on 12th of the Month, or if 12th is a Gazetted Holiday, on the previous working day).
Among the industries that go into the IIP basket, in order to provide an indication of how the industries whose production performance was ‘core’ in nature because of their likely impact on general economic activity as well as other industrial activity, the exercise of bringing out an Index of Core Industries was initiated in the Office of the Economic Adviser, with six industries, viz. Coal, Cement, Electricity, Crude Oil, Refinery products, and Steel. The Index of Six Core industries had a combined weight of 26.7 per cent in the earlier series of the IIP with base year 1993-94.
Present Status
When the base year for IIP was revised to 2004-05, the base year for the Index of Core Industries was also revised to 2004-05, along with a revised weighting diagram. In the new series, two new additions, i. e. of Natural Gas and Fertilizers weremade to make it an Index ofEight Core Industries accounting for 37.9 percent weight in the Index of Industrial Production (IIP). This Index is available since 2007-08 and is available in the Official Website of the OEA.
The Eight Core Industries areCoal, Cement, Electricity, Crude Oil, Refineryproducts, Steel, Fertilizers and Natural Gas, which have the following weights in IIP.
Coal | Crude Oil | Natural Gas | Refinery Products | Fertilizers | Steel | Cement | Electricity | Total Weight | |
---|---|---|---|---|---|---|---|---|---|
Weights | 4.379 | 5.216 | 1.708 | 5.939 | 1.254 | 6.684 | 2.406 | 10.316 | 37.903 |
The Index of Eight Core Industries is released on the last day of the month following the month for which the Index pertain. If the last day of the month is a Gazetted Holiday, then it is released on the next working day. The Index of Eight Core Industries released about two weeks prior to the IIP release provides an advance indication of performance of more than one third of the IIP basket.