Green shoots: October IIP soars to 8.2% on manufacturing rebound
The rebound in the October Index of Industrial Production (IIP) estimate, released on Wednesday, was attributed in part to a low base a year earlier. The surge in the October industrial output data that touched a 16-month high growth of 8.2 per cent, viewed in the context of a worrisome jump in retail inflation at 9.90 per cent in November, could queer the pitch for a rate cut by the RBI in its mid-quarterly review on December 18.
“I am very encouraged by the indications of the green shoots in economy in terms of production. IIP figures are very encouraging,” finance minister P Chidambaram told reporters while commenting on the data. However, as to the impact of October growth on GDP for the fiscal, he said, “One swallow doesn’t make a summer. There are signs of green shoots. Let us be happy about the moment. But let us see how we go forward in the next four months... Let’s see what the next four months bring us. Investments are taking place, capacity is being created and consumption is happening in consumer durables and non-durables”.
The IIP, an indicator of industrial activity in the country, which recorded a contraction of