SYLLABUS

GS-3: Indian Economy and issues relating to planning, mobilization of resources, growth, development and employment.

Context:The combined Index of Eight Core Industries (ICI) recorded a provisional growth of 0.5% in May 2026 compared to May 2025. 

About the Index of Eight Core Industries (ICI)

• The Index of Eight Core Industries (Base Year: 2011-12 = 100) measures the combined and individual performance of eight infrastructure-related industries, namely Coal, Crude Oil, Natural Gas, Petroleum Refinery Products, Fertilizers, Steel, Cement and Electricity.

• These eight industries together account for 40.27% of the total weight in the Index of Industrial Production (IIP), making the ICI a crucial leading indicator of industrial activity and economic growth.

• The cumulative growth during April–May 2026-27 stood at 1.1% (provisional), while the final growth rate for April 2026 was placed at 1.8%.

• The final growth rate of the ICI for April 2026 stood at 1.8%, while the cumulative growth rate during April–May 2026–27 was provisionally recorded at 1.1%.

• Remember the descending order of weights: Petroleum Refinery Products > Electricity > Steel > Coal > Crude Oil > Natural Gas > Cement > Fertilizers ( 28.04 > 19.85 > 17.92 > 10.33 > 8.98 > 6.88 > 5.37 > 2.63).

Performance of Core Industries in May 2026

• Industrial performance remained subdued, with only Steel, Cement and Electricity registering positive growth, while the remaining five sectors recorded contraction.

• Coal: Coal production (weight: 10.33 per cent) decreased by 9.3 per cent in May 2026 over May 2025. Its cumulative index declined by 9.1 per cent during April to May 2026-27 over corresponding period of the previous year.

• Crude Oil: Crude Oil production (weight: 8.98 per cent) declined by 4.6 per cent in May 2026 over May 2025. Its cumulative index declined by 4.2 per cent.

• Natural Gas: Natural Gas production (weight: 6.88 per cent) declined by 4.9 per cent in May 2026 over May 2025. Its cumulative index declined by 4.5 per cent.

• Petroleum Refinery Products: Petroleum Refinery production (weight: 28.04 per cent) declined by 8.7 per cent in May 2026 over May 2025. Its cumulative index declined by 4.7 per cent.

• Fertilizers: Fertilizer production (weight: 2.63 per cent) declined by 0.9 per cent in May 2026 over May 2025. Its cumulative index declined by 4.5 per cent.

• Steel: Steel production (weight: 17.92 per cent) increased by 5 per cent in May 2026 over May 2025. Its cumulative index increased by 5.2 per cent.

• Cement: Cement production (weight: 5.37 per cent) increased by 8.4 per cent in May 2026 over May 2025. Its cumulative index increased by 8.3 per cent.

Key Takeaways

• The overall 0.5% growth in ICI was primarily supported by strong performance in Electricity, Cement and Steel. 

• However, the contraction in Coal, Crude Oil, Natural Gas, Petroleum Refinery Products and Fertilizers, particularly the decline in the heavily weighted refinery sector, moderated overall growth.

• The robust growth in Electricity and Cement indicates continued momentum in infrastructure and construction activities, whereas weakness in energy-related sectors points to challenges in the extractive and refining segments of the economy.