​Core upgrade, Pg8

Key Highlights:

• The Index of Core Industries (ICI) has been updated with 2022-23 as the new base year, replacing the 2011-12 series.
• The number of core industries has increased from eight to nine with the inclusion of iron ore.
• Electricity now holds the highest weight in the ICI at 30.93%, while coal and natural gas weights have nearly halved.
• The ICI recorded a five-month high growth of 5% in June 2026, significantly driven by iron ore and electricity.
• Crude oil and natural gas sectors have shown continuous contraction for 18 and 24 months, respectively.

Detailed Insights:

• The updated ICI aligns with other revised economic metrics such as National Accounts, Consumer Price Index (CPI), Wholesale Price Index (WPI), and Index of Industrial Production (IIP), all now using 2022-23 as the common base year.
• Methodological improvements include using gross production data for steel and retaining only raw coal to eliminate double-counting of coal products.
• The ICI is compiled and released by the Office of the Economic Adviser (OEA) under the Department for Promotion of Industry and Internal Trade (DPIIT), Ministry of Commerce & Industry.
• The article suggests transferring the responsibility for WPI and ICI to the Ministry of Statistics and Programme Implementation (MoSPI) for a broader statistical reorganization.
• The strong growth in iron ore (43.9%) and electricity (9.8%) in June 2026 was partly attributed to a base effect, as these sectors had contracted in the corresponding period of the previous year.
• The nine core industries now include Coal, Crude Oil, Natural Gas, Refinery Products, Fertilizers, Steel, Cement, Electricity, and Iron Ore.

Key Concepts Involved:

• Index of Core Industries (ICI): A monthly economic indicator measuring the combined and individual production performance of nine foundational industrial sectors in India.
• Base Effect: A statistical phenomenon where a high or low growth rate is observed due to comparison with an unusually low or high base period in the previous year.
• Index of Industrial Production (IIP): An index that measures the overall industrial output and growth rates of various industrial sectors in the economy.
• Wholesale Price Index (WPI): A key inflation indicator that measures the average change in the prices of goods at the wholesale level.