Industrial output may have risen at its fastest pace in 3 months by 2.1% in November, reversing a sharp slowdown and making a strong case for central bank to delay rate cuts to next fiscal year when inflation cools.

A TickerNews poll showed 10 out of 15 economists forecast an uptick in the index of industrial production (IIP) from 5.1% fall in October and 2% expansion in September, due to robust infrastructure growth and demand for consumer goods.

But one-third of the respondents are still sceptic about the recovery and forecast a decline in the IIP. The median forecast for Nov IIP was for 2.1% growth while the average was for a 1.6% rise.

If the actual data scheduled on Jan 12, matches the median forecast, it will be fastest since August when industry grew 3.6%. Government?s chief economic adviser, Kaushik Basu said the IIP may have bottomed out in Oct and there will be a slow recovery going forward. ?I expect to see a slow pick up very very soon (November onwards). I certainly don?t expect a negative growth in IIP numbers,? he said in an interview. Economists say infrastructure or core sector, which contributes 37.9% to the IIP, grew 6.8% in Nov and this may offset the weakness in manufacturing.

?Mining sector has certainly disappointed but electricity sector has been better. The overall infrastructure performance has been better,? said Sunil Sinha, head of research at Crisil.

?Given this, the IIP number may not be as bad as October. It should be in the positive territory, maybe very low.? Bank of Baroda?s Rupe Rege Nitsure agreed. ?Our projection for industrial output growth in November factors in the robust data for core industrial output growth for Nov, 2011 and also adjusts for the volatility in manufacturing output,? she said. Economist said that industrial output is seen reviving on consumer demand in the domestic market due to festive season.

?Oct-Dec is festive season due to which consumer demand is expected to spurt. Some aberration was seen in October but that may not be the case in November,? said Sinha of Crisil. However, some economists point to downside risks emerging from slowing exports and disappointing mining activities. In November, exports growth slowed to 3.9% compared to 10.8% in October as global turmoil slashed demand for Indian merchandise. Imports growth also slowed to 24.55% from 31% as companies cut back expansion due to high borrowing costs. The subdued IIP may not be decisive factor RBI to reverse its stance as inflation remains elevated at 9.11% in Nov. Analysts expect a cut in cash reserve ratio first in Jan and rate cuts to come only in the first quarter of next fiscal year 2011-13 (Apr-Mar). ?Given that the slowdown in domestic growth has been more entrenched, together with an uncertain global growth environment, we expect the RBI to begin easing policy rates from Mar-Apr 2012,? Macquarie said in a recent report. On Dec 16, RBI has left policy rates unchanged and said it would focus on growth henceforth. The central bank had raised rates 13 times between Mar 2010 and Oct 2011.