CORE INDUSTRIES OUTPUT CONTRACTS

Subject : Economy

Context: Contracting for the ninth consecutive month, the output of eight core infrastructure sectors dropped by 2.6 per cent in November, 2020.

Concept :

The production of eight core sectors had recorded a growth of 0.7 per cent in November 2019, data released by the commerce and industry ministry showed.
Barring coal, fertiliser and electricity, all sectors — crude oil, natural gas, refinery products, steel and cement — recorded negative growth in November 2020.

Core Industries

Core industry can be defined as the main industry which has a multiplier effect on the economy.
In most countries, there is particular industry that seems to be backbone of all other industries and it qualifies to be the core industry.
The Eight Core Industries comprise 40.27% of the weight of items included in the Index of Industrial Production (IIP).
The eight Core Industries in decreasing order of their weightage: Refinery Products> Electricity> Steel> Coal> Crude Oil> Natural Gas> Cement> Fertilizers.
Weightage for Industries (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.

Additional Information

Index of Industrial Production

The Index of Industrial Production (IIP) is an index which details out the growth of various sectors in an economy such as mineral mining, electricity, manufacturing, etc.
It is compiled and published monthly by the Central Statistical Organisation (CSO), Ministry of Statistics and Programme Implementation six weeks after the reference month ends, i.e a lag of six weeks.
The Base Year of the Index of Eight Core Industries has been revised from the year 2004-05 to 2011-12 from April, 2017.