The eight core sector industries of Indian Economy, comprising of coal, crude oil, natural gas, petroleum refining, fertilizers, steel, cement & electricity, contribute approx 42 percent of the weight of items in the Index of Industrial Production (IIP).
Any increase in production of crude oil and natural gas have been either non-existent or inconsequential in the last four years, adding more head winds to the overall growth of the Indian core sector story. The growth in electricity generation and fertilizer production have been found wanting for more and the reason may lie in the past and present Nehruvian thinking of socialism and culture of subsidies, which have been the major source of corruption and leakage of resources of Public Exchequer. The only saving grace in the Indian core sector story is uptick in production of steel and cement, which amply demonstrate the advantages of sustained infrastructure push by Central and State Governments.
If the Indian Economy is to be a miracle economy with decade long growth of 7 % plus, we need to have a clear outlook of how we can steer the core sector growth and align it with the aspirations of masses. It can be done with a mix of reforms, more private participation, effective and efficient use of resources so that the twin challenges of employment growth and poverty eradication could be achieved.
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