- July 31, 2021
- Posted by: admin1
- Category: DPN Topics
Context: The output of eight core industries’ grew 8.9 per cent in June largely due to base effect, official data showed on Friday
- 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. The eight Core Industries in decreasing order of their weightage: Refinery Products> Electricity> Steel> Coal> Crude Oil> Natural Gas> Cement> Fertilizers.
Index of Industrial Production
- The Index of Industrial Production (IIP) is an index that shows the growth rates in different industry groups of the economy in a fixed period of time.
- It is compiled and published monthly by the Central Statistical Organization (CSO), Ministry of Statistics and Programme Implementation.
- IIP is a composite indicator that measures the growth rate of industry groups classified under:
- Broad sectors: Mining, Manufacturing, and Electricity.
- Use-based sectors: Basic Goods, Capital Goods, and Intermediate Goods.
- Base Year for IIP is 2011-2012.
- The eight core industries of India represent about 40% of the weight of items that are included in the IIP.
Significance of IIP:
- IIP is the only measure on the physical volume of production.
- It is used by government agencies including the Ministry of Finance, the Reserve Bank of India, etc., for policy-making purposes.
- IIP remains extremely relevant for the calculation of the quarterly and advance GDP estimates.