Core Sector Growth in India

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 Core Sector Growth in India: An Overview

India's core sector growth refers to the performance of eight key industries that significantly impact the country's economic health and industrial development. These core sectors include ¹ ²:

- *Coal*: Production of coal, a major source of energy for power generation and industrial processes (weightage: 10.33%)

- *Crude Oil*: Production and refining of crude oil, essential for various industries, transportation, and energy production (weightage: 8.98%)

- *Natural Gas*: Exploration, production, and distribution of natural gas, used as a source of energy for power generation, industries, and households (weightage: 6.88%)

- *Petroleum Refining*: Refining of crude oil to produce various petroleum products such as petrol, diesel, and other fuels (weightage: 28.04%)

- *Electricity Generation*: Generation of electrical power, critical for industrial production, household consumption, and overall economic activity (weightage: 19.85%)

- *Steel Production*: Production of alloy and non-alloy steel, pivotal for construction, manufacturing, and infrastructure development (weightage: 17.92%)

- *Cement Production*: Production of cement, essential for construction and infrastructure development (weightage: 5.37%)

- *Fertilizer Production*: Production of fertilizers, crucial for agriculture and crop yields (weightage: 2.63%)


Significance of Core Sector Growth

The core sector growth is a vital indicator of India's economic health, as these industries ³:

- *Drive Infrastructure Development*: Steel and cement production are fundamental for building roads, bridges, and other critical infrastructure.

- *Support Energy Production*: Coal, crude oil, natural gas, and electricity generation are essential for meeting the country's energy demands.

- *Influence Industrial Output*: Core sector products like steel, cement, and petroleum products are used as inputs in various industries.

- *Create Employment Opportunities*: Core sectors provide jobs to a large number of people, contributing to economic growth and development.


Recent Trends in Core Sector Growth

India's core sector growth has been fluctuating in recent months, influenced by factors like high base effects, changes in global commodity prices, and domestic demand ⁴:

- *April 2024*: Core sector growth slowed to 6.9%, with varying rates across coal, oil, steel, and other sectors.

- *February 2024*: Core sector growth rose to 6.7%, driven by significant increases in coal, natural gas, and cement production.

- *April 2025*: Core sector growth plunged to an eight-month low of 0.5%, due to contraction in refinery and fertilizer output, and high base effect.


Index of Eight Core Industries (ICI)

The ICI is a monthly economic indicator that tracks the performance of India's eight core industries. It is released by the Office of the Economic Adviser, Ministry of Commerce & Industry, and provides insights into the overall industrial health of the economy ¹ ².


The ICI is used by policymakers, economists, and businesses to assess the growth and performance of these core industries and make informed decisions. The index is calculated using the Laspeyres formula of weighted arithmetic mean of quantity relatives ².

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