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Industrial production in November grows by 5.9 per cent.
New Delhi: The industrial output (IIP) for November has made a handsome growth, swinging a full circle from a negative 4.7 per cent (revised upwards from -5.1 per cent) in October to 5.9 per cent in November.
The improvement has mainly come in from manufacturing, consumer durables and consumer non-durables. Manufacturing output, which constitutes about 76 per cent of the industrial production, grew an annual 6.6 per cent.
During April-November, industrial production expanded 3.8 per cent. Output grew 7.8 per cent in the 2010-11 fiscal year that ended in March, slower than 10.5 per cent clocked in the year before.
Industrial production in November grows by 5.9 per cent
Capital Goods and Mining index remain the laggards. "We do not expect capital goods sector to have a great outlook for the next two-three years," Venugopal Dhoot of Videocon told CNBC-TV18.
Meanwhile, this near 6 per cent growth in November may have again shroud hopes of a rate cut, including the much-expected CRR cut.
"I think the RBI will take comfort from the industrial output number as it shows growth is shaky but not negative. It also allows the central bank to continue to focus on inflation," said Madan Sabnavis, chief economist with CARE Ratings, who does not expect any monetary easing before the end of March.
India's economy has been hurt by a combination of feeble growth in the United States and Europe, a prolonged spell of monetary tightening to quell high inflation, and decision-making paralysis in the federal government.
The central bank has said growth concerns are back on its radar, but that the actual easing of policy would depend on the inflation momentum.
Bond yields and swap rates rose following the release of the data, which disappointed hopes that the Reserve Bank of India would begin monetary easing sooner rather than later, before quickly retreating to earlier levels.
The October figure was revised to annual contraction of 4.7 per cent from the previously reported 5.1 per cent.
Headline annual inflation is expected to have slowed to 7.5 per cent in December, after running above 9 per cent for a year, as food prices eased. The data will be released on January 16.
RBI's next move
Prime Minister Manmohan Singh said on Sunday that the economy would likely grow about 7 per cent in the fiscal year ending March 31, below a revised government forecast of about 7.5 per cent and sharply lower than 8.5 per cent growth last fiscal year.
The RBI, which has raised interest rates by a total of 375 basis points since March 2010 to stem inflation, will next review policy on January 24.
Some analysts expect the RBI to cut the cash reserve ratio, or the proportion of deposits that banks must keep as cash with it, to ease a cash crunch in the banking system.
The RBI has been buying government securities from the open market to inject liquidity and has bought Rs 49,700 crore of the government debt since late November.
"The central bank is also likely to prefer bond buybacks to a cut in the cash reserve ratio since a CRR cut will look contradictory to current monetary stance," CARE's Sabnavis said.
While private economists predict more pain for the economy in coming months, officials in New Delhi are betting on a modest rebound beginning in the current quarter, on hopes for an improvement in the external environment, slowing inflation and lower interest rates at home.
Early signs of that recovery came as manufacturing surged to a six-month high in December while services grew at their fastest pace in five months.
Car sales, after falling for four months, rose for a second month in December, climbing 8.5 per cent from the same month a year earlier.
Collections of excise duty, a tax levied at the factory gate, rose an annual nearly 10 per cent in December indicating a possible rebound in manufacturing activity in Asia's third largest economy. Excise collections had recorded an annual decline in November.
(With additional information from Reuters)
Industrial production in November grows by 5.9 per cent - Business News - IBNLive
New Delhi: The industrial output (IIP) for November has made a handsome growth, swinging a full circle from a negative 4.7 per cent (revised upwards from -5.1 per cent) in October to 5.9 per cent in November.
The improvement has mainly come in from manufacturing, consumer durables and consumer non-durables. Manufacturing output, which constitutes about 76 per cent of the industrial production, grew an annual 6.6 per cent.
During April-November, industrial production expanded 3.8 per cent. Output grew 7.8 per cent in the 2010-11 fiscal year that ended in March, slower than 10.5 per cent clocked in the year before.
Industrial production in November grows by 5.9 per cent
Capital Goods and Mining index remain the laggards. "We do not expect capital goods sector to have a great outlook for the next two-three years," Venugopal Dhoot of Videocon told CNBC-TV18.
Meanwhile, this near 6 per cent growth in November may have again shroud hopes of a rate cut, including the much-expected CRR cut.
"I think the RBI will take comfort from the industrial output number as it shows growth is shaky but not negative. It also allows the central bank to continue to focus on inflation," said Madan Sabnavis, chief economist with CARE Ratings, who does not expect any monetary easing before the end of March.
India's economy has been hurt by a combination of feeble growth in the United States and Europe, a prolonged spell of monetary tightening to quell high inflation, and decision-making paralysis in the federal government.
The central bank has said growth concerns are back on its radar, but that the actual easing of policy would depend on the inflation momentum.
Bond yields and swap rates rose following the release of the data, which disappointed hopes that the Reserve Bank of India would begin monetary easing sooner rather than later, before quickly retreating to earlier levels.
The October figure was revised to annual contraction of 4.7 per cent from the previously reported 5.1 per cent.
Headline annual inflation is expected to have slowed to 7.5 per cent in December, after running above 9 per cent for a year, as food prices eased. The data will be released on January 16.
RBI's next move
Prime Minister Manmohan Singh said on Sunday that the economy would likely grow about 7 per cent in the fiscal year ending March 31, below a revised government forecast of about 7.5 per cent and sharply lower than 8.5 per cent growth last fiscal year.
The RBI, which has raised interest rates by a total of 375 basis points since March 2010 to stem inflation, will next review policy on January 24.
Some analysts expect the RBI to cut the cash reserve ratio, or the proportion of deposits that banks must keep as cash with it, to ease a cash crunch in the banking system.
The RBI has been buying government securities from the open market to inject liquidity and has bought Rs 49,700 crore of the government debt since late November.
"The central bank is also likely to prefer bond buybacks to a cut in the cash reserve ratio since a CRR cut will look contradictory to current monetary stance," CARE's Sabnavis said.
While private economists predict more pain for the economy in coming months, officials in New Delhi are betting on a modest rebound beginning in the current quarter, on hopes for an improvement in the external environment, slowing inflation and lower interest rates at home.
Early signs of that recovery came as manufacturing surged to a six-month high in December while services grew at their fastest pace in five months.
Car sales, after falling for four months, rose for a second month in December, climbing 8.5 per cent from the same month a year earlier.
Collections of excise duty, a tax levied at the factory gate, rose an annual nearly 10 per cent in December indicating a possible rebound in manufacturing activity in Asia's third largest economy. Excise collections had recorded an annual decline in November.
(With additional information from Reuters)
Industrial production in November grows by 5.9 per cent - Business News - IBNLive
