In News:

• According to data released by the Commerce Ministry, the output of Eight Core Industries increased year-on-year by 5. 8% in February 2021, representing a four month high growth.
  
  

What’s in today’s article:

• About Core Industries
  
  
• About Index of Eight Core Industries (ICI)
  
  
• News Summary
  
  

About: Core Industries

• The core sector is an aggregate of 8 core sectors that are fundamental to the Indian economy.
  
  
• These are Coal, Crude oil, Natural gas, Refinery products, Fertilisers, Steel, Cement and Electricity.
  
  
• The output of the Core Industries is measured by the Index of Eight Core Industries (ICI).
  
  
• These 8 sectors constitute the core sector are important because they comprise 40.27 percent of the weight of items included in the Index of Industrial Production (IIP).
  • 
    
    
  
  
  
• The growth of the country’s eight core sectors is a lead indicator of the monthly industrial performance, as it is released about 12 days prior to the release of IIP for the reference month.
  
  
• The core sector performance has long term repercussions for corporate profit growth as well as for the overall GDP growth.
  
  

About: Index of Eight Core Industries (ICI)

• The Index of Eight Core Industries (ICI) measures collective and individual performance of production in the eight core industries.
  
  
• Publisher: ICI is published every month by the Office of the Economic Adviser, Department for Promotion of Industry and Internal Trade (DPIIT) in the Ministry of Commerce and Industry.
  
  
• Lag: ICI for a reference month is released with a time lag of one month, on last day of the next month. For example, the ICI data for February is published on the last day of March.
  
  
• Data used: The data for ICI is sourced from six different government agencies and departments.
  
  
• Base Year: ICI is currently calculated using 2011-2012 as the base year.
  
  

News Summary:

• The Office of Economic Adviser, DPIIT, has released the combined Index of Eight Core Industries data for February, 2021.
  
  
• As per the data, the output of Eight Core Industries increased year-on-year by 5. 8% in February 2021, representing a four month high growth.
  • 
    
    
  
  
  
• Most segments recorded growth, with oil and fertilisers being the only sectors which witnessed contraction.
  
  

Reasons for growth:

• One reason for the strong year-on-year growth is the low base effect from 2021.
  
  
• In February 2021, ICI showed core sector growth in the negative, i.e. a contraction of 3.3%.
  
  
• Besides, strong performances was recorded in the segments of steel (5. 7%), cement (5%), coal, natural gas, refinery products and electricity .