PIB TrackerCore industries grew 7.9%, and the index still fell from August
The Index of Core Industries rose 7.9 per cent year-on-year in September against a weak September 2025 - but the index level dropped from 120.4 to 118.3, and three of the nine sectors are still contracting.
What happened
- The Index of Core Industries (base 2022-23) grew 7.9 per cent year-on-year in September 2026 (provisional), against 5.9 per cent in August 2026 (final).
- Gainers: iron ore 18.4, electricity 11.4, coal 10.7, refinery products 10.3, cement 9.8 and steel 4.9 per cent. Contractions: fertilisers -11.7, natural gas -4.6, crude oil -1.4.
- Cumulative growth for April-September 2026 was 5.1 per cent against 2.5 per cent a year earlier.
- August 2026 was revised from a provisional index of 119.2 to a final 120.4, raising its growth from 4.8 to 5.9 per cent.
- From the annexures: the index stands at 118.3 in September against 120.4 in August and 109.6 in September 2025; weights are electricity 30.932, refinery 22.572, steel 17.584, with fertilisers at 2.731. October's index is due on 20 November 2026.
For Prelims
- What the index is: the Index of Core Industries tracks production in the economy's basic industries and is compiled by the Office of the Economic Adviser, DPIIT, Ministry of Commerce and Industry - the same office that compiles the WPI. The IIP, by contrast, comes from the NSO under MoSPI.
- The nine sectors on the 2022-23 base are coal, crude oil, natural gas, refinery products, fertilisers, steel, cement, electricity and iron ore - the ninth, added with the new base; the older series on the 2011-12 base was the Index of Eight Core Industries, which accounted for 40.27 per cent of the weight of the IIP.
- Why weights decide the headline: contribution to growth is roughly weight multiplied by sector growth, so electricity (30.932) at 11.4 per cent adds about 3.5 percentage points while iron ore (4.905) at 18.4 per cent adds about 0.9. Sector growth rates alone mislead.
- Base effect: a year-on-year rate compares with the same month a year earlier, so a weak month in the previous year inflates the current rate. Checking the index level against the previous month is the standard correction - and here the level fell.
- Provisional versus final: the provisional index for a month is released on the 20th of the following month and revised when final data arrive; the August revision of 4.8 to 5.9 per cent is a live example of why one month's print is not a trend.
- Refinery products measure crude processed into fuels, which can grow while crude oil production falls - the gap is imported crude, and it is why India's refining and extraction numbers move in opposite directions.
- Fertiliser production is sensitive to feedstock gas supply, imports of urea and DAP, and the Nutrient Based Subsidy regime; a double-digit fall against a rabi sowing season is the item worth watching in any question on agricultural inputs.
- Electricity's 30.9 weight makes the core index substantially a power index; generation in turn reflects coal despatch, hydro conditions and demand - so a hot or wet month moves the headline for reasons unrelated to industry.
For UPSC: The monthly number most likely to appear as an economy data question, with the weights printed in the same release so contribution can be computed. Deploy it on industrial growth, on energy and infrastructure performance, and on the limits of year-on-year comparisons.
What it is NOT: No month-on-month or seasonally adjusted series, so the sequential decline from 120.4 to 118.3 has to be derived from the annexure rather than read off the release. No explanation for the fertiliser contraction, no reason given for thirteen straight months of falling crude and gas output, and no capacity utilisation or demand data to say whether electricity growth reflects industry or weather. Nothing on why August was revised up by more than a percentage point.
For Mains
Syllabus: GS3.1 · GS3.9 · Linkage L1
Anchor
Core industries grew 7.9 per cent year-on-year in September 2026, up from a revised 5.9 per cent in August, with cumulative growth of 5.1 per cent for April-September against 2.5 per cent a year earlier.
Substantiation (data)
Iron ore grew 18.4 per cent, electricity 11.4, coal 10.7, refinery products 10.3, cement 9.8 and steel 4.9, while fertilisers fell 11.7 per cent, natural gas 4.6 and crude oil 1.4. Weights are electricity 30.932, refinery products 22.572 and steel 17.584, so electricity and refining together supply about 5.9 of the 7.9 percentage points. The index level was 118.3 in September against 120.4 in August and 109.6 in September 2025, and August was revised from 119.2 provisional to 120.4 final.
Position
The composition is healthier than it looks in one respect: coal, electricity and refining growing together with cement in high single digits is consistent with real construction and power demand rather than a statistical artefact, and a cumulative 5.1 per cent against 2.5 per cent is a genuine improvement over last year's first half.
Counterpoint
But the headline overstates it. The index fell from August to September, so the 7.9 per cent is measured against a weak September 2025, and three-quarters of it comes from two sectors. Crude oil and natural gas have contracted in each of the last thirteen months, which is an import-dependence story that no amount of refining growth fixes, and a 11.7 per cent fall in fertiliser output as rabi sowing begins is the number a policymaker should be asked about.
Way forward
Publish a seasonally adjusted month-on-month series alongside the year-on-year rate, and explain the fertiliser contraction against rabi requirements. On hydrocarbons, the thirteen-month decline belongs in the public discussion of import dependence rather than in an annexure.
Conclusion
A good month on the headline, a mixed one in the detail. Read the index level before the growth rate, and read the weights before the sector rankings.
Deploys into: Industrial growth and the core index · Energy and infrastructure performance · Reading base effects in data · Fertiliser and hydrocarbon dependence
Ministry of Commerce & Industry · 2026-10-21 · PRID 2326038 · PIB source ↗