Long road to revival

Indian economy remains in a weak spot

Global rating agency S&P has reaffirmed India’s sovereign ratings, noting that growth will gradually recover over two-three years. It has also said India is experiencing a cyclical, rather than a structural, economic slowdown. S&P’s optimism notwithstanding, the latest data on industrial production and inflation signals that the wait for revival will be longer than expected. Industrial output, as measured by the index of industrial production (IIP), declined by 0.3 per cent, year-on-year, in December. IIP growth during April-December was a meagre 0.5 per cent. While mining improved by 5.4 per cent in December, manufacturing output declined by 1.2 per cent,