According to government statistics, India’s annual core sector growth slowed to a decade low of 2.7 per cent in 2015-16, slower than the 4.5 per cent pace in the previous financial year.
The growth was pulled down by steel and crude oil, both of which saw output contracting by 1.4 per cent and natural gas that dropped 4.2 per cent.
Eight core industries:
1. crude oil,
3. refinery products
4. natural gas
These account for 38 per cent of India’s industrial output. The index for industrial production (IIP) has grown at 2.7 per cent in the first 11 months of 2015-16, lower than the 2.8 per cent recorded in the previous year.
Electricity sector contribution was the maximum to growth.
The previous lowest growth rate registered by core sectors (under the present data series that uses 2004-05 as a base year) was in 2008-09 when output rose 2.8 per cent amidst the global financial crisis.
The core sector comprises of industries which constitute the basic industries. The core sector not only enables other industries, it also provides basic infrastructure for other two sectors, i.e. Primary and Tertiary .
The growth or slowdown in core sector is an indication of the economy of the country.
Its constituent sectors like crude oil, coal, refinery products, electricity and fertilizers also impact inflation.