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Core industry’s growth – Shanmugam IAS Academy
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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