Index of Core Industries set to get an upgrade with revised base year and weights

The Ministry of Commerce and Industry will on July 20 release an updated Index of Core Industries (ICI) with a new base year of 2022-23 and recalibrated industries and weightages. 

With this, all of India’s main economic metrics — capturing its national accounts, inflation levels, and industrial performance — will have been updated and upgraded.

The revised series will replace the existing ICI series which has a base year of 2011-12. The release on July 20 will include the provisional ICI for June 2026 along with the back series from April 2023 to May 2026.

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“As per the established methodology, the weights for the ICI (2022-23) series have been derived from the weights of the Index of Industrial Production (IIP) 2022-23 series released by the Ministry of Statistics and Programme Implementation (MoSPI),” the Commerce Ministry said in a statement. 

“The weights of the ICI basket items, drawn from the IIP, have been redistributed on a pro-rata basis to total 100 for finalising the weights of the ICI item basket,” it added.

The current ICI includes eight sectors — coal, crude oil, natural gas, refinery products, fertilisers, steel, cement, and electricity. The new series will include nine sectors. 

The Ministry also explained that, in view of the extensive use of iron ore in industrial production and its significant contribution to industrial development, iron ore has been included as a core industry in the revised ICI series. 

As far as methodological changes are concerned, the statement added that the revised ICI series will use gross production data for compiling the steel index, replacing the net production data used in the 2011-12 series of the ICI.

Further, for the coal sector, only raw coal has been retained in the revised ICI series. That is, coal middlings and washed coal have been excluded to eliminate double counting, as both are derived from raw coal, the government said.