Core Sector growth declined

• The growth of eight core sectors slowed down to a five-month low of 3.4 per cent in January mainly due to contraction in output of refinery products, fertiliser and cement.
• The growth rate of eight infrastructure sectors of coal, crude oil, natural gas, refinery products, fertilisers, steel, cement and electricity was 5.7 per cent in January 2016.
• Infrastructure sectors' expansion in January this year is the lowest since August 2016, when the segments had recorded a growth of 3.2 per cent.
• The core sectors, which contribute 38 per cent to the total industrial production, expanded 4.8 per cent in April - January this fiscal compared with 2.9 per cent growth in the same period previous financial year.
• The output of refinery products, fertiliser and cement contracted by 1.5 per cent, 1.6 per cent and 13.3 per cent, respectively during the month under review.
• Both coal and electricity expanded at 4.8 per cent in January as against 7.9 per cent and 11.6 per cent expansion respectively in January 2016.
• However, crude oil, natural gas and steel output reported positive growth.
• Crude oil output grew by 1.3 per cent in January 2017 against 4.7 per cent contraction in the same month of previous year.
• Similarly, natural gas and steel output rose by 11.9 per cent and 11.4 per cent respectively.

About IIP and Core sectors:

• The Central Statistics Office (CSO) of the Government of India brings out monthly Index of Industrial Production (IIP).
• Industrial Production in the IIP comprises three distinct groups of industry, (a) Mining, (b) Manufacturing and (c) Electricity.
• The quick estimate of IIP pertaining to a month is released after approximately six weeks (on 12th of the Month, or if 12th is a Gazetted Holiday, on the previous working day).
• Among the industries that go into the IIP basket, in order to provide an indication of how the industries whose production performance was ‘core’ in nature because of their likely impact on general economic activity as well as other industrial activity, the exercise of bringing out an Index of Core Industries was initiated in the Office of the Economic Adviser, with six industries, viz. Coal, Cement, Electricity, Crude Oil, Refinery products, and Steel. The Index of Six Core industries had a combined weight of 26.7 per cent in the earlier series of the IIP with base year 1993-94.
• When the base year for IIP was revised to 2004-05, the base year for the Index of Core Industries was also revised to 2004-05, along with a revised weighting diagram.
•  In the new series, two new additions, i. e. of Natural Gas and Fertilizers weremade to make it an Index of Eight Core Industries accounting for 37.9 percent weight in the Index of Industrial Production (IIP). This Index is available since 2007-08
• The Eight Core Industries :  Coal(weight 4.38 %), Cement(weight: 2.41%), Electricity(weight: 10.32%), Crude Oil(weight: 5.22 %), Refinery products(weight: 5.94%), Steel(weight: 6.68%), Fertilizers(weight: 1.25%) and Natural Gas(weight: 1.71 %), which have the following weights in IIP.
   

By: Vishal