Govt to release IIP data tomorrow: All you need to know about Index of Industrial Production, its eight core sectors

The index of eight core industries for December 2020 will be released on Friday. Every economy has a few core sectors featuring the main or key industries. In India, there are eight core sectors namely coal, crude oil, natural gas, refinery products, fertilisers, steel, cement, and electricity.

These industries have a major impact on the economic and industrial activities of the country representing the capital base of the economy. The eight core industries have a combined share of above 40 percent in the Index of Industrial Production (IIP) which gives the growth rates of different industry groups of the economy over a specified period.

According to a Press Information Bureau release, the last Index of Eight Core Industries was released by the Office of Economic Adviser, Department for Promotion of Industry and Internal Trade, for the Month of November 2020.

As per the press release, the combined Index of Eight Core Industries stood at 125.9 in November 2020, which declined by 2.6 (provisional) percent as compared to the Index of November 2019. Its cumulative growth during April to November 2020-21 was (-) 11.4 percent.

The weight of core industries in the IIP are as follows:

Coal: 10.335

Crude oil: 8.9833

Natural gas: 6.8786

Refinery products: 28.0376

Fertilisers: 2.6276

Steel: 17.9166

Cement: 5.3720

Electricity: 19.8530

The IIP is an index that tracks manufacturing activity in different sectors of an economy, according to a report in The Financial Express. The IIP number measures the industrial production for a certain period under review, which is usually a month, as against the reference period. The IIP is a key economic indicator of the manufacturing sector of the economy and is usually calculated using 2011.

The IIP is used by various government agencies such as the Ministry of Finance, the Reserve Bank of India, private firms, and analysts for analytical purposes. It is also used by the Gross Value Added (GVO) of the manufacturing sector in the Gross Domestic Product (GDP) on a quarterly basis.