Core Industries Growth in Dec 23 is the slowest in 14 months

 According to a press release from the Commerce Ministry, the Index of Eight Core Industries (ICI) increased by 3.8% in December 2023 compared to the previous year. The release also stated that the production of coal, natural gas, steel, fertilizers, refinery products, cement, and electricity increased in December 2023

However, the growth of India's eight core sectors slowed to 3.8% in December 2023, which is a 14-month low. This is a significant decline from the 8.3% recorded in the same period the previous year

The eight core industries in India make up 40.27% of the weight of items in the Index of Industrial Production (IIP). The IIP is a measure of the growth of various sectors of an economy, such as mineral mining, power, and manufacturing

The eight core industries in decreasing order of their weightage are:

1. Refinery products
2. Electricity
3. Steel
4. Coal
5. Crude oil
6. Natural gas
7. Cement
8. Fertilizers                                                                                                                                                                                                                                                                                The rest of the IIP is dependant on Exports growth for incremental growth and Manufacturing of Consumer non-durables and Consumer durables etc. which in turn will depend on disposable income on hand.                                                                                  When Private Final Consumption Expenditure is languishing especially in Rural areas(Refer "State of the Economy-Jan 24" -RBI), the growth of GDP may be impacted in the months to come, when fiscal stimulus steroids through deficit gets curtailed.