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After a high jump in the core sector numbers for September, the Index of Industrial Production (IIP) data to be released today will be eagerly tracked.
The eight infrastructure sectors, also known as the core sectors, grew by a year-high of 8% in September against 3.7% in the previous month. The core sector roughly contributes 38% to the IIP and experts said there could be some impact felt in the overall industrial output.
According to a Reuters poll of 24 economists, the industrial output expanded by 3.5% -- a rate which is the fastest this year.
However, Moody's Analytics project a rise in industrial output by 2% in September.
"Industrial activity in India remains weak, reflecting the parlous state of domestic confidence and demand", it said in its weekly Asia Pacific Preview. Due to low demand for consumer and capital goods, the firm said that manufacturing "is virtually flat from a year ago."
In August, IIP rose at a sluggish pace of 0.6% against 2.7% in July.
Economists exuberated confidence after looking at a healthy core sector numbers. "I feel that a spurt in infrastructure sector will definately have a positive impact on IIP as well in September", Madan Sabnavis, chief economist at CARE Ratings had said at the time when core sector data came out.
But experts were reluctant to term the core sector numbers as "green shoots of recovery" as they said that IIP data needed to be eyed. "We have to wait for IIP data for the coming months and there has to be some consistency”, Anis Chakravarty, senior director at Delloitt India had said.
