New series propels June core sector growth to 5%, iron ore debuts with 43.9% rise

📌 Summary:

• The commerce ministry's revised Index of Core Industries (ICI) rose to a five-month high of 5% in June 2026

• Iron ore was added as the ninth core sector; its output was 43.9% higher than June 2025, though a low base effect drove much of this outsized growth

• The new series shifts the base year from 2011-12 to 2022-23, continuing the government's overhaul of official statistics — in 2026 alone updated series have been released for GDP, CPI, IIP and WPI, plus the inaugural Output Producer Price Index, trial input PPI numbers and an Index of Services Production

• Revisions: core sector growth for 2024-25 is downgraded sharply to 4.3% from 6.9%; 2025-26 is upgraded to 3% from 1.1%; May 2026 revised up to 3.2% from 1%

• Iron ore is only 4.9% of the new index by weight, but its 43.9% jump was key to the headline five-month high. It was included for its extensive industrial use and contribution to industrial development

• Other methodological changes: gross production data now used for the steel index; the coal index now counts only raw coal, excluding coal middlings and washed coal to eliminate double counting

• Sectoral performance in June: electricity generation up 9.8% (high temperatures and rainfall deficit boosted power demand); coal up 1.4% after three months of decline, helped by the sub-par monsoon; steel up 4.6%; cement up 9.8%

• Petroleum-related sectors all contracted: crude oil down 4.2% (18th consecutive monthly fall), natural gas down 7.4% (24th consecutive fall), refinery products down 4.7% (third straight fall), fertilisers down 3.3% (fourth straight fall)

• Madan Sabnavis, Chief Economist at Bank of Baroda, attributed the petroleum-sector fall to higher imports as global crude prices declined, added that refinery product exports slowed, and noted fertiliser imports tended to increase

🎯 UPSC Relevance: GS3 — industrial growth and infrastructure, interpretation of economic indicators, and the ongoing reform of India's statistical system (base-year revision, new indices). Useful for questions on how index construction shapes reported growth.

📝 Prelims Facts:

• The Index of Core Industries now has nine sectors: coal, crude oil, natural gas, refinery products, fertilisers, steel, cement, electricity and (new) iron ore
• New ICI base year: 2022-23 (earlier 2011-12); ICI is released by the commerce ministry
• Iron ore weight in the new index: 4.9%
• The base effect is a statistical phenomenon in which growth appears outsized because the comparison period was unusually low

🔑 Key Term: Base effect — the distortion in a year-on-year growth rate caused by an unusually high or low value in the comparison (base) period, rather than by any change in underlying activity.