The Combined Index of Eight Core Industries (ICI) in India recorded a growth of 2.0 percent (provisional) in September 2024 on a year-on-year basis. The ICI serves as an essential barometer of the production performance across eight key sectors: Coal, Crude Oil, Natural Gas, Refinery Products, Fertilizers, Steel, Cement, and Electricity. Together, these sectors constitute 40.27 percent of the total weight of items that are factored into the Index of Industrial Production (IIP), making them significant contributors to the overall industrial performance of the nation. The final growth rate of the Eight Core Industries Index for June 2024 was 5.0 percent, and the cumulative growth rate for the period from April to September 2024-25 stands at 4.2 percent (provisional), compared to the corresponding period of the previous year.
As India aims to achieve a 7 percent plus GDP growth in FY25, the performance of these core industries is pivotal for maintaining momentum. In September 2024, five of the eight sectors – Cement, Coal, Petroleum Refining, Fertilizers, and Steel—reported positive growth. On the other hand, Crude Oil, Natural Gas, and Electricity registered a decline in production. This mixed performance highlights a need for targeted policy interventions to ensure sustained growth across sectors.
Cement production exhibited strong growth, increasing by 7.1 percent in September 2024 compared to September 2023. Cumulatively, the cement sector’s index grew by 1.6 percent during the April-September 2024-25 period compared to the same period last year. This positive trend in cement production is indicative of rising construction activities, signalling increased infrastructure investment.
The coal industry also performed well, with production growing by 2.6 percent in September 2024 compared to the previous year. The cumulative index for coal increased by 5.9 percent from April to September 2024-25, reflecting the robustness of energy-related industrial activities and ensuring a reliable supply of raw materials for power generation and other critical applications.
Petroleum refinery products grew 5.8 percent in September 2024 over September 2023. Cumulatively, this sector grew by 2.3 percent from April to September 2024-25 compared to the corresponding period of the prior year. The growth in refinery output indicates improved demand for fuel, consistent with higher economic activity across sectors, and aligns with the government’s drive toward enhancing energy security.
Fertilizer production increased by 1.9 percent year-on-year in September 2024, and its cumulative index rose by 1.7 percent during the first half of FY25. Growth in fertiliser production suggests stability in the agricultural sector, which remains a critical component of the Indian economy. Sustained growth in this sector is essential to support the rural economy and manage food inflation.
Steel production grew by 1.5 percent in September 2024 compared to September 2023, while its cumulative index rose by 6.1 percent from April to September 2024-25. Growth in steel output indicates that construction and manufacturing activities are on the rise, which is promising for capital formation and infrastructure development needed to propel the economy toward the 7 percent plus GDP target.
Conversely, some core sectors struggled in September 2024. Crude Oil production saw a decline of 3.9 percent compared to September 2023, with a cumulative decline of 2.1 percent during April-September 2024-25. The persistent decline in crude oil output calls for enhanced exploration and investment to reduce import dependence and mitigate risks associated with global price volatility.
Natural Gas production declined by 1.3 percent in September 2024 compared to the same month in 2023. However, its cumulative index increased by 2.0 percent during April-September 2024-25. The mixed performance in natural gas indicates the need for continued investments in extraction technology and infrastructure to maintain consistency in output.
Electricity generation experienced a marginal decline of 0.5 percent in September 2024 compared to the same month last year, although the cumulative index rose by 5.9 percent during April-September 2024-25. Electricity remains a critical enabler of industrial activity, and the decline may hint at demand-side variations or supply disruptions.
Overall, the Eight Core Industries’ cumulative growth rate of 4.2 percent for April-September 2024-25 provides a mixed yet cautiously optimistic outlook. With the government’s emphasis on achieving a 7 percent plus GDP growth in FY25, further growth in these core industries will be vital. Policy measures should focus on boosting productivity, ensuring adequate investment, and addressing supply-side constraints in the underperforming sectors, specifically Crude Oil, Natural Gas, and Electricity.
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