India undergoing pronounced economic slowdown: Ambit

Data released by the government in December had shown pickup in activity in 2QFY16

The India is undergoing a pronounced economic slowdown, says domestic brokerage Ambit Capital based on the reading on its 'Ke-qiang Index'. The index is based on real economic indicators such as auto sales, cargo volumes handled, capital goods' imports and power demand. Contrary to the government data, the Ke-qiang index for September 2015 quarter showed weakness in economic activity. Data released by the government in December had shown pickup in activity in Q2FY16.

As per the Ke-qiang index, the GDP estimate for Q1FY16 was 6.3 per cent year on year growth and 6 per cent for Q2FY16. As per the government's new GDP series data, GDP grew at 7 per cent and 7.4 per cent in Q1FY16 and Q2FY16 respectively. The brokerage believes the benchmark Sensex could decline to 22,000-levels due to the ongoing weakness in the global economy.