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India’s Jan IIP reported at -1.5% MoM; Dec data revised to -1.2%

India’s Index of Industrial Production (IIP) for the month of January has come in at -1.5. December IIP has been revised to -1.2 percent against -1.3 percent reported earlier. 

According to a CNBC-TV18 poll, January data was expected at around -0.15 percent.

This is the third consecutive month of decline led by manufacturing which slipped to -2.8 percent vs -2.4 percent month-on-month (MoM).

Further, the April-January IIP data has slipped to 2.7 percent against 3.1 percent (YoY).

Electricity sector output is the only savior this time, and it has come in at 6.6 percent versus 3.2 percent (MoM).

Speaking to CNBC-TV18, Aditi Nayar of ICRA is ‘less optimistic’ of the Gross Domestic Product (GDP) and Gross value added (GVA) growth forecast. With rising risks of inflation, Nayar says GDP may come in at around 7.2 percent for the year.

Backing Nayar, Rupa Rege Nitsure of L&T Finance Holdings says there are no signs of improvement in the FY16 GDP growth and that she does not expect it to touch the estimated 7.3-7.4 percent. She is of the view that the Reserve Bank of India may have to consider a 25 basis points rate cut if deflationary conditions intensify post monsoon.

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