Why in News?

India's eight core sector industries showed a robust growth of 8.4% in April compared to 4.9% in March 2022.

• The eight core sector industries 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 are: Refinery Products> Electricity> Steel> Coal> Crude Oil> Natural Gas> Cement> Fertilizers.

What is the Index of Eight Core Industries?

• About:

  • Index of Eight Core Industries (ICI) refers to the production volume index.

  • It evaluates the combined as well as individual performance of production in selected eight core industries.

  • The current weightage (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%).

• ICI is compiled and released by the Office of Economic Adviser (OEA), Department for Promotion of Industry and Internal Trade (DPIIT), Ministry of Commerce and Industry.

• Significance:

  • ICI provides advance indication on production performance of industries of ‘core’ nature prior to the IIP release by the National Statistical Office, NSO.

  • General economic activities and industrial activities are likely to get impacted by the eight core industries.

What is the Index of Industrial Production?

• About:

  • 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 National Statistical Office (NSO), Ministry of Statistics and Programme Implementation.

  • It is a composite indicator that measures the growth rate of industry groups classified under:

    • Broad sectors, namely, Mining, Manufacturing, and Electricity.

    • Use-based sectors, namely 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 Gross Domestic Product (GDP) estimates.