Bangalore: India's industrial production index rose at its fastest annual pace in nearly a year in October, after unexpectedly contracting in September, aided by a statistical spurt in infrastructure-related output, a Reuters poll found.
The index of industrial production (IIP) probably grew 4.5 percent annually in October, after contracting by 0.4 percent in September, according to a survey of 25 economists.
While such a positive number could bring much-needed relief to a battered economy, economists warn it would not imply a sustainable turnaround ahead.
Many analysts are attributing positive factory output growth in October to a weak statistical base from a year ago when it shrank 5 percent, rather than an improvement in actual production.
"To be completely frank, it is not that industry has recovered in a big way," said Vishnu Varathan, economist at Mizuho Corporate Bank.
"Its a very, very light incremental boost despite how the headline numbers look ? because base effects account for the lion's share there."
Industrial output has averaged a meagre 0.4 percent so far in 2012 and even the expected 4.5 percent growth for October would be a far cry from the double-digit rates witnessed before the onset of the global financial crisis in 2008.
"We are not looking at growth of more than 2 percent in the industrial sector for the entire year," said Madan Sabnavis, an economist at CARE Ratings.
"Growth has bottomed out, there will only be a gradual improvement."
A 6.5 percent year-on-year growth in India's October infrastructure output
... contd.
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