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IIP: Consumer non-durables drive industrial output growth

CRISIL Research has come out with its report on Index of Industrial Production (IIP), January 2012.

March 12, 2012 / 06:25 PM IST

CRISIL Research has come out with its report on Index of Industrial Production (IIP), January 2012.


Industrial output growth accelerated to 6.8 per cent in January 2012 as compared to a low of 2.5 per cent in the previous month. This is the highest IIP growth witnessed in the last 7 months and is a bit surprising as the main thrust to industrial output growth in January 2012 came from consumer non-durable sector which grew at 42 per cent. As industrial output has followed a highly volatile growth trajectory so far this fiscal, it has become extremely difficult to draw any meaningful conclusion about the strength of the industrial activity. Therefore, we believe that the unexpected increase in IIP growth this month is unlikely to pave way for interest rate cuts in the forthcoming mid-quarter policy meeting. Moreover, this high growth in January 2012 seems unsustainable as the industrial sector is still beset with a number of domestic and global headwinds.

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