Syllabus:

GS3: Indian Economy and issues relating to planning, mobilization, of resources, growth, development and employment.

Context: 

The combined index of eight core industries increased by 0.5% year-on-year in April 2025, according to data released by the Ministry of Commerce & Industry.

Key Highlights of the Index of Eight Core Industries (ICI) for April 2025:

• The final growth rate of Index of Eight Core Industries for January 2025 was observed at 5.1 per cent. 
• The cumulative growth rate of ICI during April to March, 2024-25 is 4.5 per cent (provisional) as compared to the corresponding period of last year. 
• However, at 0.5 per cent in April, the growth of the eight core sectors was not only well below 4.6 per cent in March, but was the lowest in eight months.
• Growth hasn’t been this low since August 2024, when these sectors posted a collective contraction of 1.5%. 

The cause of low growth

• The bad start to the new financial year seems to have been partially driven by the “unprecedented economic uncertainty” caused by the US’ ‘tariff tantrums’
• These tariffs sparked widespread uncertainty among exporting nations, though they were suspended for a 90-day period just one week later.

• The IIP is a monthly index that measures the performance of India's industrial sectors. 
• The Central Statistical Organisation (CSO), under the National Statistical Office (NSO), Ministry of Statistics and Programme Implementation (MoSPI) is responsible for the compilation and publication of the Index of Industrial Production (IIP) in India since 1950. 
• The IIP is calculated using Laspeyre's formula, which is a simple weighted arithmetic mean of production relatives. 
• Currently, IIP figures are calculated considering 2011-2012 as the base year.  
• The current IIP basket covers 839 representative items under three sectors – 
• Mining – 14.37%
• Manufacturing – 77.63%
• Electricity – 7.99% 
• The Eight Core Sector Industries comprise 40.27% of the weight of items included in the IIP.
• The weights of the industries in the Index of Eight Core Industries are as follows: Petroleum Refinery Products - 28.04% > Electricity - 19.85% > Steel - 17.92% > Coal - 10.33% > Crude Oil - 8.98% > Natural Gas - 6.88% > Cement - 5.37% > Fertilizers - 2.63%.