Context: Recently, the Office of Economic Adviser within the Department for Promotion of Industry and Internal Trade released the Index of Eight Core Industries for September 2020.

More on the news: In terms of cumulative growth in the first half of the current financial year, Index of Eight Core Sector Industries has contracted by 14.9 percent.

About the Index of Core Industries:

  • It is an index of the eight most fundamental industrial sectors of the Indian economy and it maps the volume of production in these industries.
    • This means, if these eight industries are not growing fast enough, the rest of the economy is unlikely to either.
  • These eight sectors are Coal, Natural Gas, Crude Oil, Refinery Products (such as Petrol and Diesel), Fertilisers, Steel, Cement and Electricity.
  • The eight core industries comprise 40.27% of the weight of items included in the Index of Industrial Production (IIP).
  • The Base Year of the Index of Eight Core Industries has been revised from the year 2004-05 to 2011-12 from April, 2017.
  • The eight Core Industries in decreasing order of their weightage: 


Weight (In percentage)

Petroleum & Refinery production


Electricity generation


Steel production


Coal production


Crude Oil production


Natural Gas production


Cement production


Fertilizers production


What does the latest data signify?

  • Meagre growth last year (1.3 percent): This points to a sustained period of industrial growth in the Indian economy.
  • Covid-19 pandemic and associated lockdowns.
  • Positive sign: While the index in September contracted but the rate of contraction was less than 1 percent, which is far less than the rate of contraction in any of the past 6 months. 
  • Next wave of Covid-19 infections: If there is a surge in the winter months - as is being witnessed in most Europe and the US - then India’s recovery will be affected negatively yet again.

Index of Industrial Production(IIP):

  • It is an index which details out the growth of various sectors in an economy such as mineral mining, electricity,manufacturing, etc.
  • It is compiled and published monthly by the Central Statistical Organisation (CSO), Ministry of Statistics and Programme Implementation six weeks after the reference month ends.

Image Source: IE