Background
The Index of Core Industries (ICI) measures the performance of India's core industrial sectors that form the backbone of the economy.
It serves as a high-frequency indicator of industrial growth and is released monthly.
The index is compiled by the Office of Economic Adviser (OEA), DPIIT.
It also acts as an important input for compiling the Index of Industrial Production (IIP).
Features
Revised ICI (Base Year 2022–23)
Base Year: 2022–23 (replaces 2011–12).
Compiled by: Office of Economic Adviser (OEA), DPIIT.
Frequency: Monthly.
Weights: Based on the Index of Industrial Production (IIP) 2022–23 released by MoSPI.
Major Changes
Iron Ore added as a new core industry, increasing the number of core sectors from 8 to 9.
Steel Index will now be compiled using gross production data instead of net production.
Coal Sector revised:
Only Raw Coal retained.
Coal Middlings and Washed Coal excluded to eliminate double counting.
Nine Core Industries (2022–23 Series)
Coal
Crude Oil
Natural Gas
Refinery Products
Fertilisers
Steel
Cement
Electricity
Iron Ore (Newly Added)
Challenges
Continuity and comparability with respect to the existing series.
Timely and accurate data collection in different sectors.
Structural changes in the economy might necessitate periodic reweighting and revision of methodology.
Standardisation of production data across different agencies.
Way Forward
Update the base year on a regular basis in line with changing economic conditions.
Develop strong data collection and validation systems based on digital technology.
Enhance coordination among agencies producing data.
Enhance transparency in methodology and publishing of industrial statistics.
Conclusion
The new ICI with base year 2022-23 is an improvement to India’s system of industrial statistics through the adoption of current weights, new methodology and the addition of Iron Ore. This will help improve accuracy, facilitate evidence-based policymaking, and boost the reliability of India’s economic indicators.
