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Core industry - Shanmugam IAS academy in coimbatore
Core industry

REDUCED GROWTH OF CORE INDUSTRIES

What’s in news?

According to official data released by the government, Growth of eight core industries dropped to 2.1% in July.

Key data’s:

  • Growth in eight core sectors of India slipped to 2.1 per cent during July, in comparison to 7.3 per cent during the corresponding month last year.
  • Reason: Production of coal, Crude oil, Natural gas and Refinery products declined.
  • The eight core industries which have a 40.27% weight in the Index of Industrial Production (IIP), grew 3% in the April-July period compared with 5.9% in the year-ago period. 
  • Crude oil was the worst hit with a decline of 4.4 per cent.
  • Official data showed India’s GDP expanded at 5% in the first quarter, the slowest pace in over six years. 
  • The combined Index of Eight Core Industries stood at 131.9 in July, 2019, which was 2.1 per cent higher as compared to the index of July, 2018.
  • Eight core industries: Coal, Crude Oil, Natural Gas, Refinery Products, Fertilizer, Steel, Cement and Electricity.

What are Core Industries?

  • Core industry can be defined as the main industry which has a multiplier effect on the economy.
  • The Base Year of the Index of Eight Core Industries has been revised from the year 2004-05 to 2011-12 from April, 2017.
  • According to the Index of Eight Core Industries, March 2018, the maximum and minimum contribution to the IIP was from the Petroleum & Refinery production and Fertilizers production respectively.

Industry

Weight (In percentage)

Petroleum & Refinery production 28.04
Electricity generation 19.85
Steel production 17.92
Coal production 10.33
Crude Oil production 8.98
Natural Gas production 6.88
Cement production 5.37
Fertilizers production 2.63

 

Ninth core industry:

Recently a report by V.K Saraswat (NITI Aayog member) has recommended that the government should consider classifying the aluminum sector as India’s ninth core industry as the sector contributes to nearly 2 percent of manufacturing GDP.

 

Links to note:

https://www.iasipstnpsc.in/painted-stork/

https://www.businesstoday.in/current/economy-politics/growth-in-eight-core-sectors-falls-down-july/story/376843.html

https://economictimes.indiatimes.com/news/economy/indicators/growth-of-eight-core-industries-slows-down-to-2-1-per-cent/articleshow/70947976.cms?from=mdr

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