UPSC Syllabus Mapping

GS Paper: GS-III
Subject: Indian Economy
Topic: Industrial Growth, Official Statistics & Economic Indicators

Index of Core Industries is one of India’s most important high-frequency economic indicators. In July 2026, the government revised the index by adopting 2022-23 as the new base year and expanding the basket from eight to nine core industries through the inclusion of iron ore. The revision improves the index’s ability to reflect the current industrial structure and strengthens its role as an early indicator of economic activity.

Key Dimensions of Index of Core Industries

What is ICI?
The Index of Core Industries (ICI) measures the monthly production performance of India’s key infrastructure industries. It is compiled by the Office of Economic Adviser under DPIIT.

Nine Core Industries: Coal, Crude Oil, Natural Gas, Refinery Products, Fertilisers, Steel, Cement, Electricity and Iron Ore.

Major Changes in 2026:

• Base year revised from 2011-12 to 2022-23.
• Iron ore added as the ninth core industry.
• Weights updated to reflect the latest industrial structure.
• Steel index now uses gross production data.
• Coal index excludes washed coal and middlings to avoid double counting.

Why is ICI Important?

• Acts as an early indicator of industrial growth.
• Contributes 32.88% weight in the Index of Industrial Production (IIP).
• Supports GDP forecasting and policy formulation.
• Helps monitor supply-side inflation and infrastructure performance.

Index of Services Production (ISP)

India also launched the trial Index of Services Production (ISP) with base year 2024-25. It provides the country’s first monthly official measure of formal services-sector output using GST and administrative data, complementing the IIP.

Prelims Practice Corner

1. Which organisation releases the Index of Core Industries?
   A. RBI
   B. NSO
   C. OEA under DPIIT
   D. NITI Aayog
   Answer: C. Office of Economic Adviser under DPIIT.
2. Which industry was added in the revised ICI?
   A. Aluminium
   B. Iron ore
   C. Copper
   D. Telecom
   Answer: B. Iron ore.
3. The revised ICI uses which base year?
   A. 2011-12
   B. 2015-16
   C. 2020-21
   D. 2022-23
   Answer: D. 2022-23.
4. ICI contributes approximately what share to IIP?
   A. 18%
   B. 25%
   C. 32.88%
   D. 45%
   Answer: C. 32.88%.
5. Which index is regarded as the services counterpart of IIP?
   A. CPI
   B. WPI
   C. ISP
   D. PMI
   Answer: C. Index of Services Production.

Mains Practice Questions

1. Discuss the significance of the revised Index of Core Industries in assessing India’s industrial performance.
   Structure: Introduction → Need for revision → Key changes → Economic significance → Conclusion.
2. Examine how the Index of Services Production complements the Index of Industrial Production in measuring India’s economy.
   Structure: Introduction → Features of ISP → Comparison with IIP → Benefits → Way Forward.

FAQs

What is the Index of Core Industries?
A monthly index measuring production in India’s key infrastructure industries.

Why was iron ore added?
Its growing importance in industrial production and manufacturing justified its inclusion.

Why is the base year revised?
To ensure the index reflects the latest structure and composition of the Indian economy.