Core comfort – On growth in the India’s Eight Core Industries | 2 August 2023 | UPSC Daily Editorial Analysis

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What's the article about?

  • It talks about the growth in India's Eight Core Industries due to the Government’s sustained efforts.


  • GS3: Indian Economy and issues relating to Planning, Mobilization of Resources, Growth, Development and Employment;
  • Prelims

What are the India's Eight Core Industries?

  • The Eight Core Industries in India are: Coal, Crude Oil, Natural Gas, Refinery Products, Fertilizers, Steel, Cement and Electricity
  • These industries are considered the core sectors of the Indian economy due to their significant impact on general economic activities and other industrial activities. They play a crucial role in driving the overall growth and development of the country.
  • The Eight Core Industries together account for a substantial share in the Index of Industrial Production (IIP), which measures the growth rates of different industry groups in the economy over a specified period.

Index of Industrial Production (IIP):

  • It is a composite indicator that measures the growth rate of industry groups classified as Broad sectors, namely, Mining, Manufacturing, and Electricity and Use-based sectors, namely Basic Goods, Capital Goods, and Intermediate Goods.
  • It is compiled and published monthly by the Central Statistical Organization (CSO), Ministry of Statistics and Programme Implementation.
  • Base Year for IIP is 2011-2012.

Eight Core Industries:

  • The eight core sector industries in decreasing order of their weightage: Refinery Products> Electricity> Steel> Coal> Crude Oil> Natural Gas> Cement> Fertilizers.
  • They comprise 40.27% of the weight of items included in the Index of Industrial Production (IIP).


  • India's eight core sectors saw a year-on-year growth in production of 8.2% in June, which is the highest in five months.
  • Seven of the sectors, including steel, cement, and electricity, saw significant growth. Steel was the standout performer, with output surging 21.9%. Cement posted an almost double-digit increase, reflecting the continuing momentum in demand.
  • Steel and cement led the cross-sectoral advance over the April-June period, growing 15.9% and 12.2%, respectively, in the fiscal first quarter.
    • Steel and Cement: Steel and cement are the two construction essentials that continue to see a rise in demand due to the infrastructure sector. The government's efforts to boost outlays, including on affordable housing, urban renewal, and transportation networks, are providing a palpable tailwind.
    • Electricity: Electricity, which makes up a fifth of the core index, also posted its strongest increase in four months despite a cyclonic storm that impacted highly industrialized Gujarat the most, dampening demand.
    • Coal: Coal output rose 9.8% in June, lifting the first-quarter’s production by 8.7%. Output in July surged more than 14%, which is another positive augury given that coal demand extends beyond the electricity sector to other industrial segments, including metal making and process industries where it is used in furnaces and boilers.
    • Crude Oil: Crude oil production remained in the doldrums for a 13th straight month, contracting 0.6%. Along with refinery products, which have the heaviest weight of 28% on the index, crude oil also registered a sequential slide, underlining the difficulties the oil sector as a whole continues to face because of regulatory inconsistencies.

Way Forward:

  • This growth is a welcome step. However, more needs to be done to ensure the sustainable Atmanirbharta in all sectors of the economy. Thus, Policymakers have their task cut out to ensure the policy environment remains supportive, especially at a time when global demand remains particularly uncertain.

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