Index of Eight Core Industries
The Index of Eight Core Industries (ICI) is a key monthly economic indicator that measures the performance of eight crucial sectors forming the backbone of India’s industrial economy. These sectors together contribute 40% of the Index of Industrial Production (IIP) and strongly influence economic growth, employment, infrastructure creation, and resource demand.
What is the ICI?
The ICI tracks growth rates and production trends in eight major industries. It helps assess the health of the industrial sector and is widely used in policy planning, economic analysis, and UPSC preparation.
How is the Index Calculated?
Calculated using the Laspeyres formula (weighted arithmetic mean).
Published with a 1-month time lag.
Current base year: 2011–12.
Each sector’s monthly growth rate = (Current production ÷ Base production) × 100
Combined Index = Weighted average of all eight sectors.
Eight Core Sectors (with weightage)
Refinery Products – 28.04%
Electricity – 19.85%
Steel – 17.92%
Coal – 10.33%
Crude Oil – 8.98%
Natural Gas – 6.88%
Cement – 5.37%
Fertilizers – 2.63%
Why is the ICI Important?
Indicates industrial and economic health.
Helps track business cycles (expansion or contraction).
Guides policymakers and investors.
Inputs for WPI, CPI, and inflation analysis.
Strongly linked to industrial employment trends.
Recent Update (Nov 2023)
Core sectors grew 7.8% YoY.
Coal, electricity, fertilizers, natural gas, refined petroleum, and steel showed strong growth.
Cement saw a minor dip but remained higher overall.
Conclusion
The Index of Eight Core Industries is an essential tool for understanding India’s industrial performance. As these sectors form the foundation of infrastructure and manufacturing, the ICI is a critical indicator for economists, policymakers, and UPSC aspirants.
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