Improved IIP could mark end of slowdown: Montek

Encouraged by around 6% industrial growth in November, the Planning Commission today exuded confidence that it would help improve the business sentiment and hopefully indicates an end to the slowdown.

"Clearly, the industrial growth of almost 6% is a good change. I think it hopefully indicates that the slowdown in industry will basically come to an end during the third quarter (October to December) of the financial year," Planning Commission Deputy Chairman Montek Singh Ahluwalia said.

Led by a recovery in manufacturing output, industrial production grew by 5.9% in November, 2011, after witnessing a contraction of 4.74% in the previous month.

Asked whether it would reverse the negative sentiment, Ahluwalia said, "I don't believe any one indicator affects sentiments, but there is no doubt that this is a positive move... Taken with other developments, (it) should lead to improvement in sentiments over the next several weeks."

The Plan panel deputy chief, however, said improvement in the Index of Industrial Production (IIP) in November will not change the whole picture for 2011-12.

"The likely GDP growth this year will be around 7% and not 8%. It could be little bit more. It depends on what the last quarter (January-March) is like," Ahluwalia added.

The Indian economy grew by 8.5% in 2010-11. However, in the first half of the current fiscal, the economic growth was 7.3%, down from 8.6% in the corresponding period a year ago. The GDP growth rate was 6.9% in the quarter ending September, 2011.

Prime Minister Manmohan Singh had earlier said economic growth could slip to 7% in the current fiscal.