Terming the 9.8 per cent growth in industrial production in October as “very good”, CEA Arvind Subramanian today said one has to be careful while interpreting the data as the spike could be on account of Diwali purchases.
“The latest October IIP is very good. It’s a high number, good number and encouraging number. But one has to be a little bit careful in interpreting this number… especially this month as there is a Diwali effect,” Chief Economic Advisor Arvind Subramanian told reporters here.
Buoyed by demand in consumer products and capital goods during the festive season, industrial output in October grew at 9.8 per cent, its fastest pace in five years.
The cumulative IIP growth for April-October 2015-16 over the corresponding period last year stands at 4.8 per cent.
“Good number, hope this continues, but one shouldn’t read too much into month to month number,” Subramanian said.
IIP growth for September has been revised upwards to 3.84 per cent while it was -2.7 per cent in October 2014.
Earlier in the day, Subramanian said the implementation of the GST will clean up the taxation regime and boost growth.
In an interview to NDTV, he said the GST will help in promoting ‘Make In India’ by making ‘One India’.
Subramanian, who headed a committee on suggesting GST rate, said the simplification and uniformity in the new indirect tax regime will help in boosting country’s growth and checking tax evasion and corruption.
The committee had suggested a 15-15.5 per cent revenue neutral GST rate. It has also suggested 17-18 per cent standard GST rate, 12 per cent on merit goods and 40 per cent on sin goods.
In principle, he said there should be no rise in prices post implementation of GST.
The Constitution Amendment Bill to roll out Goods and Services Tax is stuck in the Rajya Sabha due to stiff opposition by the Congress party. The ruling NDA does not have majority of its own in the Upper House of the Parliament.