New series: Jun core sector growth 5%, iron ore output jumps 44%, Pg15

Key Highlights:

• India's Index of Core Industries (ICI) recorded a five-month high growth of 5% in June.
• The revised index now includes iron ore as the ninth sector, which saw a 43.9% jump in output.
• The new data series uses 2022-23 as the base year, replacing the previous 2011-12 base.
• This revision is part of a broader government initiative to overhaul India's official statistics.

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Detailed Insights:

• The significant growth in iron ore production was largely attributed to a low base effect from the previous year.
• Iron ore was added to the index due to its extensive industrial use and substantial contribution to industrial development.
• The other eight sectors comprising the Index of Core Industries are coal, crude oil, natural gas, refinery products, fertilisers, steel, cement, and electricity.
• The new series downgraded core sector growth for 2024-25 to 4.3% from 6.9% but upgraded 2025-26 to 3% from 1.1%.
• Other changes include using gross production data for the steel index and only 'raw coal' for the coal index.
• Electricity generation increased by 9.8% in June, driven by high temperatures and a rainfall deficit boosting demand.
• Coal output rose by 1.4% after three consecutive months of decline, also influenced by the sub-par monsoon.

Key Concepts Involved:

• Index of Core Industries (ICI): An indicator of the output of eight (now nine) key infrastructure sectors in India.
• Base Year: A reference year for calculating an index, used to compare economic data over time.
• Base Effect: The impact of the choice of base period on the rate of growth of an index or economic indicator.
• Gross Production Data: Total output produced by an industry or sector before accounting for any deductions.