Core Sectors Output

• 30 Jul 2022

Why in News?

India’s eight core sectors’ output growth moderated to 12.7% in June, 2022 from 18.1% in May, 2022 with all sectors except crude oil registering an uptick in production.

What are Core Sectors?

• Eight Core Sectors:
  • Coal, Crude Oil, Natural Gas, Refinery Products, Fertiliser, Steel, Cement, Electricity
• About:
  • These comprise 40.27% of the weight of items included in the Index of Industrial Production (IIP).
  • The eight core sector industries in decreasing order of their weightage:
    • Refinery Products> Electricity> Steel> Coal> Crude Oil> Natural Gas> Cement> Fertilizers.
• Index of Industrial Production:
  • IIP is an indicator that measures the changes in the volume of production of industrial products during a given period.
  • It is compiled and published monthly by the Central Statistical Organization (CSO), Ministry of Statistics and Programme Implementation.
  • It 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.
  • Significance of IIP:
    • 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 (Gross Domestic Product) estimates.

UPSC Civil Services Examination, Previous Year Questions (PYQs)

Prelims

Q. In the ‘Index of Eight Core Industries’, which one of the following is given the highest weight? (2015)

(a) Coal production
(b) Electricity generation
(c) Fertilizer production
(d) Steel production

Ans: (b)

Explanation:

• In 2015, Electricity was having the highest weightage in the index of 8 core industries.
• The Eight Core Industries comprise 40.27% of the weight of items included in the Index of Industrial Production (IIP).
• The current weight (April 2021), of eight core industries is given below:
  • Petroleum Refinery production (28.04%), Electricity (19.85%), Steel (17.92%), Coal production (10.33%), Crude Oil (8.98%), Natural Gas production (6.88%), Cement production (5.37%), Fertilizer production (2.63%).
• 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.
• Therefore, option (b) is the correct answer.

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Mains

Q. Account for the change in the spatial pattern of the Iron and Steel industry in the world. (2014).

Source: TH