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Core sector output rises 5.4% in uneven recovery

  • Published
    31st Dec, 2022
Context

The output growth of India’s eight core sectors rebounded to 5.4% in November against a 3.2 percent growth in the same month last year.


More about the news:

  • Sectors having Positive Growth: Coal, fertilizer, steel, cement, and electricity segment

Strategic Sectors:

  1. Atomic energy, space, and defence
  2. Transport and telecommunications
  3. Power, petroleum, coal, and other minerals and
  4. Banking, insurance, and financial services
  • Sectors having Negative Growth: Crude oil, natural gas, and refinery products

What are Core Sectors?

  • Eight Core Sectors: Coal, Crude Oil, Natural Gas, Refinery Products, Fertilizer, Steel, Cement, and Electricity.
  • These comprise 27% of the weight of items included in the Index of Industrial Production (IIP).
  • The eight core sector industries in decreasing order of their weightage:
  • Refinery Products> Electricity> Steel> Coal> Crude Oil> Natural Gas> Cement> Fertilizers.

Index of Industrial Production:

  • IIP is an indicator that measures the changes in the volume of production of industrial products during a given period.
  • It is compiled and published monthly by the Central Statistical Organization (CSO), Ministry of Statistics, and Programme Implementation.
  • The base year for IIP is 2011-2012.
  • It is a composite indicator that measures the growth rate of industry groups classified under:
    • Broad sectors: Mining, Manufacturing, and Electricity.
    • Use-based sectors: Basic Goods, Capital Goods, and Intermediate Goods.

Significance of IIP:

  • It is used by government agencies including the Ministry of Finance, the Reserve Bank of India, etc, for policy-making purposes.
  • IIP remains extremely relevant for the calculation of the quarterly and advanced GDP (Gross Domestic Product) estimates.

Government Initiatives for Growth of the Industrial Sector in India

  • Production-Linked Incentive (PLI) - To scale up domestic manufacturing capability.
  • PM Gati Shakti- National Master Plan - Multimodal connectivity infrastructure project.
  • Bharatmala Project - To Improve connectivity in North East India
  • Start-up India - To catalyze Startup culture in India
  • Make in India 2.0 - To transform India into a global design and manufacturing hub.
  • Atmanirbhar Bharat Campaign - To cut down import dependence
  • Disinvestment Plans - To support India’s economic recovery
  • Special Economic Zones- To create additional economic activity and boost the export of goods and services.
  • MSME Innovative Scheme- To promote the complete value chain from developing ideas into innovation through incubation and design interventions
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