IIP suggests sub 5.0% GDP growth in Q1, 2013-14: CRISIL
Industrial GDP is likely to have grown at less than 0.5% in the first quarter of this fiscal. Even if one accounts for a normal monsoon and relatively resilient service sector, first quarter GDP growth is almost certain to be below 5.0% cent in 2013-14, says CRISIL Research.
August 13, 2013 / 13:37 IST
CRISIL Research's report on IIP data
Index of industrial production (IIP) fell by 2.2 per cent in June compared to a year ago. For the first quarter (April-June) of 2013-14, industrial output was 1.1 per cent lower than the corresponding period of the previous year. These figures suggest that even if construction maintained its growth rate of past few quarters (an optimistic scenario given the high base of 7 per cent growth Q1, 2012-13), industrial GDP is likely to have grown at less than 0.5 per cent in the first quarter of this fiscal. Even if one accounts for a normal monsoon and relatively resilient service sector, first quarter GDP growth is almost certain to be below 5.0 per cent in 2013-14.Weak domestic demand, supply-side bottlenecks and policy uncertainty, especially those related to fuel availability, land acquisition and environmental clearances have hurt private sector investments and dampened industrial activity. The adverse impact of the weak rupee on corporate balance sheets - according to a study by CRISIL Research, Nifty companies have around 40 per cent of their debt in foreign currency and according to RBI around half of corporate India’s forex exposure are unhedged - and caution on the upcoming elections can further delay investment decisions by the private corporate sector. With weak investment sentiments and rising concerns on external sector vulnerabilities, it is incumbent upon the government to kick-start recovery by speeding up clearances of stalled projects and resolving issues plaguing the mining sector.Disclaimer: CRISIL Limited has taken due care and caution in preparing this Report. Information has been obtained by CRISIL from sources, which it considers reliable. However, CRISIL does not guarantee the accuracy, adequacy or completeness of any information and is not responsible for any errors or omissions or for the results obtained from the use of such information. CRISIL Limited has no financial liability whatsoever to the subscribers / users / transmitters / distributors of this Report. The Centre for Economic Research, CRISIL (C-CER) operates independently of and does not have access to information obtained by CRISIL's Ratings Division, which may in its regular operations obtain information of a confidential nature that is not available to C-CER. No part of this Report may be published / reproduced in any form without CRISIL's prior written approval. 
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