Notwithstanding the gloomy prognosis, IIP numbers for February 2013 are a surprise, with the Index registering a 0.6% growth. Even though the Index actually registered a decline in Y-O-Y growth in Feb from the earlier month (2.4% in Jane '13), the Y-O-Y growth in capital goods at use-based level at 9.5% was unexpected. At this rate, the weighted contribution of capital goods to IIP growth was the highest since, Feb 2012. Based purely on past trends / base and sequential effects (recall Mar '12 - Sep '12, capital goods registered a continuous de-growth and March numbers are always higher M-o-M), the overall IIP growth now will be better than earlier.

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Soumya Kanti Ghosh

Soumya Kanti Ghosh

Page 4 - Soumya Kanti Ghosh

IIP numbers are a surprise