Index of Eight Core Industries Current Affairs - 2020

Eight Core Industries in India include Electricity , steel, refinery products, crude oil, coal, cement, natural gas and fertilizers. The Index of Eight Core Industries is a monthly production index released by CSO and is considered to be the lead indicator of the monthly industrial performance in India.

23.4 % decline in Growth Rate of Eight Core Industries in May 2020

Index of the Eight Core Industries for the month of May 2020 was released on 30th June 2020. The index was released by the Office of Economic Affairs (under the Department for Promotion of Industry and Internal Trade). Out of the total items included in the Index of Industrial Production, the Eight Core Industries comprises of 40.27 percent weight of the total.

The Eight Core Industries are: (i) Coal (ii) Crude Oil  (iii) Natural Gas (iv) Refinery Products  (v)Fertilizers (vi) Steel  (vii)Cement  (viii) Electricity

Highlights from the Index

Growth Rate of the Eight Core Industries has improved from a -37 percent in April 2020 to -23.4 percent in May 2020. The negative Growth Rate is due to the effects of Nationwide Lockdown in the months of April and May 2020.

Growth Rate of the Eight Core Industries in 2020:

  • January: +2.2 percent
  • February: +6.4 percent
  • March: -9.0 percent
  • April: -37 percent
  • May: -23.6 percent

Among the Eight Core Industries, only the Fertilizers Industry has been able to register an increase in growth rate in the month of May 2020 when compared to May 2019. Rest all 7 Industries have witnessed a decline.

In May 2020, when compared with May 2019, the Steel Industries have registered the highest decline of 48.4 percent among the Eight Core Industries.

Core sector Growth of India hit due to Lock Down

The core sectors of India include crude oil, steel, natural gas, refinery product, cement, fertilizer, electricity and coal. According to the figures released by the Ministry of Commerce recently, the production of core industries of India shrank in March, 2020 due to lock down.

Highlights

The output of the core industries has reduced by 6.5% in the month of March. This is the sharpest reduction since 2012.

  • The petroleum sector slid by 0.5% as the transportation sector was completely halted
  • The demand of electricity decreased by 7.2%. The production was relatively reduced.
  • With the construction sector coming to a complete halt, cement industry saw 25% drop.
  • The steel production demand reduced by 13%.
  • The only sector that saw a positive figure was coal.

Significance

The eight crore industries have a weight of 40.27% in the Index of Industrial Production. With these industries contracting in their output, the country is to face very low economic output.

Index of Industrial Production

The Index of Industrial Production is published by the Central Statistical Organization. It shows the growth rate of different industrial groups. The IIP is calculated with 2011-12 as the base year.

The IIP indicator measures broad sectors namely mining, electricity and manufacturing. It also measures use-based sectors namely capital goods and intermediate goods and basic goods.