Index of Core Industries: New Base Year 2022-23 for UPSC
Why in News?
The Office of the Economic Adviser (OEA) under the Department for Promotion of Industry and Internal Trade (DPIIT) released the revised Index of Core Industries series with 2022-23 as the new base year, replacing the 2011-12 series. Core industries output grew 5% in June 2026 under the new series.
Key Facts for Prelims: Index of Core Industries
- Compiled and released by: Office of the Economic Adviser (OEA), DPIIT, Ministry of Commerce and Industry
- New Base Year: 2022-23 (earlier 2011-12)
- Number of sectors: Raised from eight to nine
- New sector added: Iron Ore — added for its extensive use in industrial production
- Nine core sectors: Coal, Crude Oil, Natural Gas, Refinery Products, Fertilisers, Steel, Cement, Electricity and Iron Ore
- Highest weight: Electricity (~30.93%), followed by Refinery Products and Steel
- Coal definition narrowed: Only Raw Coal retained; Coal Middlings and Washed Coal excluded to remove double counting
- Steel data: Gross production data now used, replacing net production data of the 2011-12 series
- Back series: Released for April 2023 to May 2026
Index of Core Industries and the Index of Industrial Production
The Index of Core Industries is a sub-set of the Index of Industrial Production (IIP). The eight core industries earlier carried a combined weight of about 40.27% in the IIP, which makes the Index of Core Industries an early indicator of industrial momentum, released ahead of the IIP.
- IIP is compiled by: National Statistical Office (NSO), MoSPI — not by DPIIT
- IIP base year: 2011-12; IIP has three broad sectors — Mining, Manufacturing, Electricity
- Base year revision purpose: Capture structural changes in the economy, new products and improved data sources; a more recent base year makes growth rates more representative
- Related indices: Index of Services Production (NSO), WPI (OEA, DPIIT), CPI (NSO)
Why the Index of Core Industries Revision Matters
A base year is simply the reference point against which current output is compared. As an economy changes, an old base year quietly distorts the picture: goods that were important in 2011-12 may matter less today, while newer products may not be captured at all. Revising the Index of Core Industries to 2022-23 realigns the index with the present structure of Indian industry and with the data systems now available, including GST-linked reporting.
The addition of iron ore is the substantive change. Iron ore sits at the very start of the industrial value chain, feeding steel, construction, machinery and automobiles. Tracking it separately gives policymakers an earlier signal of industrial turning points than steel output alone. At the same time, restricting coal to raw coal corrects a genuine measurement flaw, because washed coal and middlings are processed forms of the same tonnage and counting them again inflated the index.
For prelims, the safest preparation is to fix in memory the compiling agency, the base year, the number of sectors, the highest-weight sector and the relationship with the IIP. Examiners frequently pair this index with the Wholesale Price Index, which the same office compiles, and with the Index of Industrial Production and Index of Services Production, which the National Statistical Office compiles.
Quick Revision Table: Index of Core Industries
| Parameter | Detail |
|---|---|
| Released By | Office of the Economic Adviser, DPIIT |
| New Base Year | 2022-23 |
| Previous Base Year | 2011-12 |
| Number of Sectors | Nine (earlier eight) |
| Newly Added Sector | Iron Ore |
| Highest Weight Sector | Electricity (~30.93%) |
| Coal Coverage | Raw Coal only |
| Steel Data Basis | Gross production |
| Parent Index | Index of Industrial Production (IIP) |
Trap / Confusing Points
| Confusion | Correct Fact |
|---|---|
| It is released by MoSPI/NSO | The Index of Core Industries is released by the Office of the Economic Adviser, DPIIT. The IIP is released by NSO, MoSPI |
| Steel has the highest weight | Electricity (~30.93%) has the highest weight; Refinery Products and Steel follow |
| Iron and Steel are one sector, so nothing changed | Iron Ore is a separate, newly added ninth core sector, distinct from Steel |
| Washed coal and middlings are counted | Only Raw Coal is counted now, to avoid double counting |
| ICI and IIP have the same base year | ICI has shifted to 2022-23; the IIP series continues on 2011-12 |
Practice MCQs
1. The Index of Core Industries is compiled and released by which of the following?
a. National Statistical Office, MoSPI
b. Office of the Economic Adviser, DPIIT
c. Reserve Bank of India
d. NITI Aayog
Ans: B
The Office of the Economic Adviser under DPIIT compiles it, as well as the Wholesale Price Index.
2. Which sector was newly added to the revised index, taking the count to nine?
a. Iron Ore
b. Aluminium
c. Copper
d. Automobiles
Ans: A
Iron Ore was added in view of its extensive use in industrial production.
3. What is the base year of the revised series?
a. 2011-12
b. 2017-18
c. 2022-23
d. 2024-25
Ans: C
The base year was shifted from 2011-12 to 2022-23 to reflect the current structure of the economy.
4. Which sector carries the largest weight in the revised index?
a. Steel
b. Coal
c. Refinery Products
d. Electricity
Ans: D
Electricity has the highest weight at roughly 30.93%.
5. In the revised series, coal has been restricted to raw coal. The main reason is:
a. To reduce import dependence
b. To avoid double counting
c. To exclude captive mines
d. To align with global coal classification
Ans: B
Coal middlings and washed coal are derived from raw coal, so counting them would double count the same output.
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