Industrial output data in October saw a sharp de-growth of 5.1% compared to a growth of 1.9% in September due to poor capital expansion. Experts have been raising concerns over the disappointing IIP numbers and have been blaming the government for this de-growth.
However, R Seshasayee, Executive Vice Chairman of Ashok Leyland cautions against overreaction to the IIP results as there is still hope left for some growth because we are not heading to the recessionary cycle.
The auto sector has lately been under a lot of pressure due to the weakening of retail demand materially in recent weeks, rising dealer inventories and rising discounts in the market. Moreover, Seshasayee indicated that the consumption buoyancy has continued to support growth. Ashok Leyland made a very good recovery in the November sales.
Seshasayee mentioned that the government needs to move on policy to restore confidence.
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