Expect total of 125 bps rate hike in 2011: HSBC

Industrial growth, as measured by the index of industrial production (IIP), slumped to an 18-month low of 2.71% in November 2010. The performance of the manufacturing sector, which constitutes almost 80% of the headline index, was particularly worrisome.

Speaking to CNBC-TV18, Leif Eskesen, chief economist for India and ASEAN at HSBC said there is a technical explanation behind the IIP blip. "The base from 2009 was high relative to the base in 2010 and that in a technical sense brought down the growth number," he explained.  However, he reinstated that the overall momentum in the economy remained strong.  However, Eskesen acknowledged that inflation will remain a concern. He informed that demand-led price pressure is getting more prominent.