Industrial output slips 0.4% in September

Nov 12 2012, 13:56 IST
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Revised government figures released on Monday showed August output growth was revised down to 2.3 percent from 2.7 percent.   (Reuters) Revised government figures released on Monday showed August output growth was revised down to 2.3 percent from 2.7 percent. (Reuters)
SummaryManufacturing, which constitutes about 76% of industrial production, fell by 1.5%.

Market is aware about it (muted IIP number) and therefore it will not get disturbed. To me, the biggest trigger would be policy decisions in winter session of parliament and rate easing by banks.

BACKGROUND

India's manufacturing growth inched up in October from September's 10-month low, supported by a pick up in new orders and an easing of price pressures.

India's services sector grew at its slowest pace in six months during October as weakness in the United States and Europe hurt orders and forced firms to hire fewer workers, suggesting the worst of the economic slump is not over yet.

The Reserve Bank of India may ease monetary policy as early as January, Governor Duvvuri Subbarao said, as price pressures ease in Asia's third-largest economy in the first part of next year on the back of slower growth.

The headline inflation likely accelerated to an 11-month high in October on costlier fuel and food, a headache for the government in a battle with the central bank over spending and high interest rates ahead of state elections.

The central bank left interest rates on hold last month but cut the cash reserve ratio for banks, defying pressure from the government to lower rates for the first time since April but also indicating it may ease policy in early 2013.

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