Revised Index of Eight Core Industries: Base Year Changed to 2022–23
Why in News?
The Government of India has revised the Index of Eight Core Industries (ICI) by updating its base year from 2011–12 to 2022–23.
The revised series aims to better reflect structural changes in India’s industrial economy. It updates the composition, weights and methodology of the index to capture newer production patterns and improve the measurement of core sector performance.
The revision is important because the Eight Core Industries have a major weight in the Index of Industrial Production (IIP).
What is the Index of Eight Core Industries?
The Index of Eight Core Industries (ICI) measures the collective and individual production performance of eight key infrastructure and industrial sectors.
It is compiled and released by the Office of the Economic Adviser (OEA) under the Department for Promotion of Industry and Internal Trade (DPIIT), Ministry of Commerce and Industry.
Eight Core Industries
The index covers:
- Coal
- Crude Oil
- Natural Gas
- Refinery Products
- Fertilizers
- Steel
- Cement
- Electricity
These industries are considered “core” because they have strong linkages with broader industrial and infrastructure activity.
Major Changes in Revised ICI Series
The new series uses 2022–23 as the base year, replacing the earlier 2011–12 base year.
Key Changes
- Number of items increased: From 40 to 58.
- New items added: 18 products, including Renewable Energy.
- Renewable Energy weight: Around 2.2%.
- Electricity sector: Continues to have the highest weight, at around 20%.
- Natural Gas: Receives the lowest weight among the eight core sectors.
- New weights are aligned with the Gross Value Added (GVA) structure of the economy.
The inclusion of renewable energy reflects India’s changing energy mix and growing clean-energy capacity.
Why is Base Year Revision Important?
A base year serves as the reference period against which changes in economic indicators are measured.
Periodic revision is necessary because:
- The structure of the economy changes over time.
- New industries and products become important.
- Relative importance of existing sectors changes.
- Technology and production patterns evolve.
The revised ICI therefore provides a more representative picture of India’s contemporary industrial economy.
Important Facts for Exams
- ICI: Index of Eight Core Industries.
- New Base Year: 2022–23.
- Previous Base Year: 2011–12.
- Number of core industries: 8.
- Number of items increased from 40 to 58.
- Renewable Energy has been included in the revised basket.
- Electricity has the highest weight in the revised ICI.
- ICI is released by the Office of the Economic Adviser, DPIIT.
- DPIIT functions under the Ministry of Commerce and Industry.
- The Eight Core Industries account for a significant share of the Index of Industrial Production (IIP).
- IIP measures changes in the volume of industrial production in India.
- Base-year revision improves the relevance and accuracy of economic indicators.
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