Core Sector Grows in August

Output from India’s eight core sectors accelerated for the second successive month in August, rising 11.6%, compared to a 6.9% contraction recorded a year ago, with four sectors registering strong double-digit growth although crude oil and fertilisers output declined.

 

Important Highlights

  • The August output was 3.9% higher than pre-COVID levels, compared to July which recorded a 1.1% uptick above 2019 levels. Cement production jumped 36% as compared to a 14.5% contraction in August 2020, while coal and natural gas registered a 20.6% surge. Electricity and refinery products grew by 15.3% and 9.1%, and Steel output grew 5.1%.
  • All sub-sectors except refinery products and crude oil were above pre-COVID levels.
  • Core sectors’ output had grown 9.9% in July and 9.3% in June. The growth rate of the Index of eight Core industries for May has been revised to 16.4% from its earlier provisional level of 16.8%.
  • The uptick in steel and cement can be attributed to higher government spending and construction activity. Higher power production is reflective of general buoyant activity in the economy and would have driven up output in mining as well.
  • On the whole, core sector growth is encouraging as it points to further acceleration during the course of the year as the government gets down to spending more as indicated to all ministries.

 

Core Sectors of the Economy

Core sectors of an economy are the main or the key industries in the economy.

The eight-core sectors of the Indian economy are:

  1. Electricity
  2. Steel
  3. Refinery products
  4. Crude oil
  5. Coal
  6. Cement
  7. Natural gas
  8. Fertilizers
  • These 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: Refinery Products> Electricity> Steel> Coal> Crude Oil> Natural Gas> Cement> Fertilizers.
  • 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.