Context:
Core Sector Growth: The 4.6% drop in January 2025 was slowly creeping down from the 4.8% in December 2024.
Sector wise Performance:
- Cement: Fastest growth at 14.5%.
- Electricity: The growth slowed to 1.3% (from 6.2% in December).
- Crude Oil & Natural Gas: Declined by 1.1% and 1.5%, respectively.
- All Other Sectors: managed to grow with a significant magnitude.
Broader Effects
- Contribution to IIP: The eight core industries weigh in at about 40.27% of the Index of Industrial Production (IIP), which serves as a primary gauge of industrial growth.
- Factors in Growth Moderation
- Base effects were the main cause as stated by Bank of Baroda Chief Economist Madan Sabnavis.
- A slow sector, particularly energy based industries, impeded the overall momentum.
Core Sector in India
In India, the “core sector” refers to eight key industries considered crucial to the overall health of the economy, including: coal, crude oil, natural gas, refinery products, fertilizers, steel, cement, and electricity.
Key points about the core sector in India
- Eight industries: These eight industries are considered the core sectors in India.
- Economic indicator: The growth rate of the core sector is used as a significant indicator of the overall health of the Indian economy.
- Index of Industrial Production (IIP): The performance of these core industries is often measured through the Index of Industrial Production (IIP).
