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.
- 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.
Weight (In percentage)
|Petroleum & Refinery production
|Crude Oil production
|Natural Gas production
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: