Eight core sectors growth slips to 3.6% in May 2017
The growth of eight core sectors slowed to 3.6% in May 2017 due to fall in output of coal and fertilisers. It was 5.2% in May 2016. In April 2017, these eight sectors had recorded a growth rate of 2.8%.
Core industry can be defined as the main industry. In most countries, there is a particular industry that seems to be the backbone of all other industries and it qualifies to be the core industry.
In India, there are eight core sectors comprising of coal, crude oil, natural gas, refinery products, fertilisers, steel, cement and electricity. The electricity has the maximum weight of 10.32% followed by Steel (6.68%), Petroleum Refinery (5.94%), Crude Oil production (5.22 %), Coal production (4.38 %), Cement (2.41%), Natural Gas production (1.71 %) and Fertilizer production (1.25%).
These eight Core Industries comprise nearly 38% of the weight of items included in the Index of Industrial Production (IIP), which measures factory output.
- In May 2017, Coal and fertiliser productions recorded negative growth of 3.3% and 6.5%, respectively. Steel sector growth dipped to 3.7% as against 13.4% in May 2016.
- Slow growth in these key sectors may also have implications on the Index of Industrial Production (IIP) number as these segments account for about 41% to the total factory output.
- However, growth in refinery products and electricity output grew by 5.4% and 6.4% in May 2017 as against 3.3% and 6.2%, respectively in the same period last year.
- Natural gas production too grew by 4.5% in May 2017 as against a negative growth rate of 6.5% a year earlier.
Categories: Business & Economy Current Affairs 2017