India revises Core Industries Index with new 2022-23 base year

The Indian government will release a revised Index of Core Industries on July 20 with a new 2022-23 base year. This update expands the index to nine industries by adding Iron Ore and aligns data compilation methods with the broader IIP.

The Office of Economic Adviser, Department for Promotion of Industry and Internal Trade, will release the revised series of the Index of Core Industries with the base year 2022-23 on July 20. The new framework will replace the long-standing Index of Core Industries series that used 2011-12 as its base year.

The Ministry of Commerce & Industry stated that the upcoming publication will feature the provisional core sector data for June 2026. The department will also publish the historical back series spanning 38 months, from April 2023 to May 2026.

Major Revisions to Core Industries Index

According to the Ministry, the restructuring brings structural adjustments to the composition and tracking metrics of India's key industrial sectors. A primary change includes the expansion of the index basket itself.

Iron Ore Joins Core Sector Basket

"In view of the extensive use of iron ore in industrial production and its significant contribution to industrial development, Iron Ore has been included as a core industry in the revised ICI series," the Ministry stated. This addition officially shifts the total number of monitored core industries from eight to nine.

Methodology Aligned with IIP

The formulation of the new series directly connects with broader industrial tracking metrics managed by the central government. "As per the established methodology, the weights for the ICI (2022-23) series have been derived from the weights of the Index of Industrial Production (IIP) 2022-23 series released by the Ministry of Statistics and Programme Implementation (MoSPI)," the Commerce & Industry Ministry detailed.

The Ministry further explained the statistical adjustment required for the core index: "The weights of the ICI basket items, drawn from the IIP, have been redistributed on a pro-rata basis to total 100 for finalising the weights of the ICI item basket."

Data Compilation Refined for Steel and Coal

Statistical alignments also changed how individual sectors report their output. To ensure consistency with the broader Index of Industrial Production, the revised core index utilises gross production data for compiling the Steel Index. This administrative shift replaces the net production data that the government utilised under the older 2011-12 series.

Refinements hit the energy sector components as well, specifically aimed at improving data accuracy. In the Coal sector, the department retained only Raw Coal within the revised index parameters. "Coal Middlings and Washed Coal have been excluded to eliminate double counting, as both are derived from Raw Coal," the Ministry stated. (ANI)

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