Industrial data published by the Central Statistical Organisation (CSO) have been refined, to a large extent, over the years to capture appropriately the trends and fluctuations in the economy. However, the dependence on a variety of sources and departments to furnish relevant micro data on time is still a problem. As a result, the monthly analysis of industrial production becomes erroneous, distorting trend analysis at any given point.

Somewhat more authentic data are available after 3-4 months. For instance, the CSO data on IIP for December 2013 raised hopes of stable growth for manufacturing, electricity and mining, But the just-released figures for January 2014 don’t support the optimism. It appears that the retrieval of production data at the micro level takes that much longer to furnish and compile. So, often the previous month?s figures are revised by CSO to minimise the distortion of results at the end of the 12-months period.

For individual entrepreneurs, business managers and analysts, the revision of figures tends to enhance the inability to take quick business decisions with regard to inventory, working capital and pricing. It also chips away at the credibility of the plethora of business surveys and outlook, which weigh heavily on the movement of monthly figures.

On the other hand, a sudden upsurge in industrial output data after a few months? gap boosts the pseudo feel-good factor, which is detrimental to the interests of various user segments.

Even accepting the non-reliability of monthly production figures, the indisputable fact remains that there is a definite slowdown in industrial activity, which may sustain for the next three months ? before major policy decisions are translated into actions. As IIP for the whole year can still exhibit annual growth of around 4% over the previous year (assuming monthly growth of 5% in February 2014 and March 2014 over last year’s low base), the onus lies with the manufacturing sector, which has plunged into the negative zone.

The health of the manufacturing sector is shaped by a variety of sub-sectors such as base metals, chemical products, food products and beverages, coke and refined petroleum, textiles, motor vehicles, machinery and equipment and furniture. Demand in each of these sub-sectors is driven by a host of factors, mostly economic, and related to enabling policy prescriptions by the new government.

Now that food prices are down significantly, mainly due to improved supply and strong growth in agricultural production, it is an inescapable situation for the RBI and the government ? interest rates must be cut, stalled projects commenced and fresh investments made to bridge the infrastructure deficit by drastically cutting down on non-essential subsidies and imports.

Creating a sector-specific policy framework that encompasses monetary, fiscal and trade measures, and plugging loopholes in government-sponsored funding schemes should be the prime focus areas of the new government. With some of our major industrial segments in abysmal depths, growth can only be revived by quickly implementing reform- enablers.

The author is DG, Institute of Steel Growth and Development. The views expressed are personal