Core industrial growth hits historic high of 7.9%

Why in the News

Core industrial growth hit 7.9% in September 2026, the highest since the new Index of Core Industries (ICI) series began in April 2024. Coal, refinery products and iron ore led the rise, but part of it comes from a low base (weak output a year earlier, which makes any rise look large).

What did the September reading show?

1. What the index tracks: The ICI measures monthly output of the industries that supply coal, fuel, power and building material. A reading of 7.9% means output is that much higher than a year earlier.
2. Short history: The new series has data only from April 2024, so the record is measured against a short history.
3. Old series: Against the old series it is the highest in nearly three years, though that comparison is not strictly sound because the two series use different base years.
4. The takeaway: Input industries sped up sharply, but a record on a short series is not yet a trend.

Which industries drove the rise?

1. Coal: Output grew 10.7%, the best in 13 months. Output also rose strongly over the previous month, and stocks at power plants were low.
2. Refinery products: Growth accelerated to 10.3% from 5.6% in August.
3. Iron ore: Growth of 18.4% continues double-digit growth that has lasted nearly a year.
4. Electricity: Growth of 11.4% eased from 13.1% in August.
5. Cement and steel: The two construction-linked sectors did well. Cement grew 9.8%, slower than in August, and steel quickened to 4.9%.

How durable is the pickup?

1. Base effect: Coal and iron ore output rose faster than in August, but the rise is aided by a low base, so part of it reflects weak output a year earlier.
2. Refinery output: Refinery products grew by only 1% on average in the first half of this financial year, so September’s 10.3% is a sharp break from the usual pace.

Challenges

1. Crude oil: Output contracted 1.4%, a smaller fall than 3.6% in August.
2. Natural gas: Output contracted 4.6%, against a 4.9% fall in August.
3. Fertilisers: Output fell 11.7%, the seventh straight monthly contraction.

Conclusion

Whether the pickup lasts is unproven. The next monthly release will show whether coal and refinery output keep growing.

Back2Basics: Index of Core Industries (ICI)

1. What it measures: Monthly output of nine core industries: coal, crude oil, natural gas, refinery products, fertilisers, steel, iron ore, cement and electricity.
2. Compiled by: The Office of the Economic Adviser in the Department for Promotion of Industry and Internal Trade (DPIIT), Ministry of Commerce and Industry.
3. New series: The new series uses 2022-23 as its base year, replacing 2011-12, and added iron ore as the ninth sector.
4. Link with the IIP: The core industries are also part of the Index of Industrial Production (IIP), which a different ministry, the Ministry of Statistics and Programme Implementation, compiles.

Matching Previous Year Question

“[2012] In India the overall Index of Industrial Production, the Indices of Eight Core Industries have combined weight of 37.90%. Which of the following are among those Eight Core Industries? 1. Cement 2. Fertilizers 3. Natural Gas 4. Refinery products 5. Textiles Select the correct answer using the code given below: (a) 1 and 5 only (b) 2, 3 and 4 only (c) 1, 2, 3 and 4 only (d) 1, 2, 3, 4 and 5 ANSWER: (c)”