03 April, 2020
7 Min Read
Part of: GS Prelims and GS-III-Economic data
According to the data released by the Ministry of Commerce and Industry, the eight core sector industries recorded a growth of 5.5% in February, 2020 which is highest in 11-months.
Core Sector Industries
CORE INDUSTRIES AND WEIGHTAGE
Industry Weight (In percentage)
Petroleum & Refinery production 28.04
Electricity generation 19.85
Steel production 17.92
Coal production 10.33
Crude Oil production 8.98
Natural Gas production 6.88
Cement production 5.37
Fertilizers production 2.63
Index of Industrial Production
Official Definition – As given by CSO
“It is a composite indicator that measures the short-term changes in the volume of production of a basket of industrial products during a given period with respect to that in a chosen base period.”
IIP – Explanation
Index of Industrial Production Importance
IIP Latest Change
IIP 2004-05 covers 682 items!
We have already seen that IIP measures industrial growth. It measures the short term changes in the volume of production of a basket of industrial products. The current IIP basket covers 682 representative items.
Note: Even though United Nations Statistics Division suggests to also include Gas steam, Air conditioning supply, Water supply, Sewerage, Waste Management and Remediation activities in the IIP, due to data constraints Indian IIP only covers three sectors – mining, manufacturing and electricity. These three are called broad sectors.
Annual Survey of Industries (ASI) Vs Index of Industrial Production (IIP)
The Industrial Output data is captured and monitored, primarily, through two statistical activities – Annual Survey of Industries (ASI) and Index of Industrial Production (IIP).
Industry vs Manufacturing
Though often interchangeably used, the terms industry and manufacturing are different. The term industry is comprehensive and may be considered as a superset of manufacturing. Industry, in general, refers to an economic activity that is concerned with the production of goods, extraction of minerals and sometimes even for the provision of services. Thus we have iron and steel industry (production of goods), coal mining industry (extraction of coal) and tourism industry (service provider).
So what is manufacturing then?
Manufacturing: Production of goods in large quantities after processing from raw materials to more valuable products is called manufacturing.
Industry = Manufacturing + Mining + Electricity + much more.
Note: The share of Manufacturing in the GDP of India – 17%.
The share of Mining, quarrying, electricity and gas in the GDP of India – 10%.
Total share of Industrial Sector = 27%
Jai Hind Jai Bharat
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