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What is a Core Sector Growth?
The main or the key industries constitute the core sectors of an economy. In India, there are eight sectors that are considered the core sectors. The eight-core sectors of the Indian economy are electricity, steel, refinery products, crude oil, coal, cement, natural gas and fertilizers.
These sectors have a major impact on the Indian economy and significantly affect most other industries as well. The eight industries have a combined share of 40.27 per cent in the Index of Industrial Production (IIP), which gives the growth rates of different industry groups in a specified period.
Before the IIP is released, the Index of Eight Core Industries (ICI) is prepared every month and released by the Office of the Economic Adviser (OEA), Department for Promotion of Industry and Internal Trade (DPIIT), and Ministry of Commerce & Industry.
The ICI gives an indication of the production performance of the industries which are of a ‘core’ nature and measures the individual and collective performances of the production in these eight core industries.
Components to calculate the ICI:
• Coal – Coal production, excluding Coking coal.
• Electricity – Electricity generation of thermal, nuclear, hydro, imports from Bhutan.
• Crude Oil – Total crude oil production.
• Cement – Production in large plants and mini plants.
• Natural Gas – Total production of natural gas.
• Steel – Production of alloy and non-alloy steel only.
• Refinery Products – Total refinery production.
• Fertilizer – Urea, ammonium sulfate, calcium ammonium nitrate, complex grade fertilizer, and single superphosphate, among others.
In December 2020, the eight-industry core sector dropped by 1.3 per cent, as against the contraction of 2.6 per cent in October and 0.1 per cent in September.