Don't expect economy to recover until H2FY13: Pronab Sen

March Index of Industrial Production (IIP) at - 3.5% is a shocker, says Pronab Sen of Planning Commission. However, according to him, things are starting to bottom out. “When you have cycles, the bottom can be there for four-five quarters. It is a process. It is not a turning point as such. We are in a downturn and the recovery itself is going to be gradual,” he adds.

He doesn’t expect a recovery till the second half of FY13. "I don’t think anybody was looking at an industrial recovery in the first half of the calendar year," he asserts. Expert views: March industrial output drops (-)3.5% YoY Below is the edited transcript of his interview on CNBC-TV18. Also watch the accompanying video. Q: This is a bit of a shocker, -3.5%. Is there any hope that it will be revised? A: Yes, it is. Last year this time, the base effect was very strong. But that apart, it is a shock. The numbers on the capital goods in particular, capital goods have always been volatile, but -21% is really very worrying. Q: Does this mean that any hopes of an industrial recovery in atleast the first half of FY13 now become bleak? A: I don’t think anybody was looking at an industrial recovery in the first half of the calendar year. You can look at the third quarter of calendar year, I personally think that certainly is feasible. My sense of it is that things are starting to bottom out, but it takes time. Q: The October-December average comes to about 1%. We were all under the impression that we will at least come to 2-3% in the January-March quarter. Now, the January-March quarter is also about 1% after this -3.5%. We were working with 1.8% and 4% in January and February. So, we are down to 1% average. Where is the bottom, unless you are saying we are going to remain at 1% for some time now? A: When you have cycles, the bottom can be there for four-five quarters. It is a process. It is not a turning point as such. We are in a downturn and the recovery itself is going to be gradual. That is why this is a bit of a surprise, a negative surprise. One would have expected a low positive. So, the negative comes as a bit of a shock. Q: In your own estimate you don’t expect a recovery perhaps till the second half of FY13? A: Yes. That was my original expectation and I would stand by that.