Core sector growth rises to 4.9% in August 2017

According to Ministry of Commerce & Industry, eight core sectors grew by 4.9% in August 2017, the highest growth rate since April 2017. It was higher than 3.1% in August 2016 and 2.6% in July 2017
The growth was recorded on account of robust performance of coal, natural gas and electricity segments. But, growth in Crude oil, cement and fertiliser segments declined.

Key Facts

Coal production recorded 15.3% growth in August 2017, up from a low base of -9.7% contraction in August 2016. Electricity output grew by 10.3% in August 2017 from a low base of 2.2% growth in August 2016. Steel production registered 3% growth in August 2017, down from 16.7% in August 2016. Cement sector growth fell to -1.3% in August from 3.1% growth in August 2016.
Fertilizer output contracted by -0.7% in August 2017 as against 2.5% growth in August 2016. Natural gas registered a 4.2% growth in August 2017 from a low base of -5.9% fall in August 2016. Refinery products output stayed almost at same level with 2.4% growth in August 2017 as against 2.5% growth in August 2016. Crude oil production shrunk by -1.6% in August 2017 from negative growth of -3.9% in 2016.

Eight core sectors

Core industry can be defined as the main industry. In most countries, there is particular industry that seems to be the backbone of all other industries and it qualifies to be the core industry. In India, there are eight core sectors comprising of coal, crude oil, natural gas, refinery products, fertilisers, steel, cement and electricity.
The electricity has the maximum weight of 10.32% followed by Steel (6.68%), Petroleum Refinery (5.94%), Crude Oil production (5.22 %), Coal production (4.38 %), Cement (2.41%), Natural Gas production (1.71 %) and Fertilizer production (1.25%).
Healthy growth in core sectors have positive implications on Index of Industrial Production (IIP) as these segments account for about 40.27 % of the weight of items in the total factory output.

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