New core industries index to have iron ore, Pg15

Key Highlights:

• The Ministry of Commerce & Industry will release an updated Index of Core Industries (ICI), increasing the number of core industries from eight to nine.
• Iron ore has been included as the ninth core industry, recognizing its extensive use and contribution to industrial development.
• The revised ICI series will adopt a new base year of 2022-23, replacing the previous 2011-12 base year.
• The updated index for June will be released along with a back-series covering data from April 2023 to May 2026.
• The core sector's growth in May was recorded at a seven-month low of 0.5%.

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Detailed Insights:

• The ICI serves as a crucial lead indicator for the overall industrial performance in India, preceding the release of the Index of Industrial Production (IIP).
• The Office of the Economic Adviser (OEA) under the Department for Promotion of Industry and Internal Trade (DPIIT) compiles and releases the ICI.
• The existing eight core industries are coal, crude oil, natural gas, refinery products, fertilisers, steel, cement, and electricity.
• These eight industries collectively account for over 40% of the total weight of items included in the Index of Industrial Production (IIP).
• The revision also includes methodological changes, such as using gross production data for steel and retaining only raw coal to avoid double counting.
• This overhaul is part of the government's broader effort to update India's official statistics, including previous revisions to CPI, GDP, WPI, and IIP.

Key Concepts Involved:

• Index of Core Industries (ICI): A monthly production volume index measuring the performance of key infrastructure sectors in India.
• Index of Industrial Production (IIP): A composite indicator that measures the short-term changes in the volume of production of a basket of industrial goods.
• Base Year: A reference period used for comparison in economic indices, set to 100, against which changes in other periods are measured.