Expect 25 bps rate cut in May: experts

Say RBI unlikely to take any major steps as weakness persists in industrial production

India's industrial production growth slowed to 0.6% in February from a year earlier, government data showed on Friday.

Revised data for January showed production at factories, mines and utilities remained unchanged at 2.4%.

Separately, annual consumer price inflation slowed to 10.39% in March from an annual 10.91% in February.

Food prices for consumers rose 12.42% on year in March, slower than an annual rise of 13.73% in February.

Experts view:

Anjali Verma, Economist at Phillipcapital, Mumbai

"I don't think the numbers are anything to feel very happy about. IIP is still showing a fairly small amount of growth. The growth is still sluggish and there is no substantial improvement in industrial activity except for the base effect. CPI is only showing a marginal improvement.

"I have lowered my FY14 GDP forecast to 5.5% from 6.3%. I expect a 25 basis point cut in the repo rate on May 3."

Rupa Rege Nitsure, Chief economist, Bank of Baroda, Mumbai

"The data clearly shows that weaknesses continue in industrial production. Food articles inflation as expected is sticky but given the disproportionate increase in risks to growth I think the Reserve Bank of India will continue with its baby step approach and cut rates by 25 bps at its upcoming annual policy on May 3."