Industrial output expanded for the first time in three months in January on the back of better performance on manufacturing, mining and power sectors.
The Index of Industrial Production (IIP) of 2.4 per cent in January 2013 was better than the one per cent growth seen in same month last year.
The January growth has come on the back of revised contraction level of 0.5 per cent in December 2012 and 0.8 per cent (contraction) in November 2012. Contraction refers to decline in output.
Markets unimpressed
But the stock markets were not much enthused by the better-than-expected IIP performance in January.
The spike in retail inflation to 10.91 per cent in February (as per data released on Tuesday) prompted traders to scale back rate cut hopes, which led to some slide in benchmark Sensex, it is learnt.
India Inc cautious
Corporate India did not see this as green shoots of recovery and felt that it was too early to conclude that slowdown has bottomed out.
Both apex industry chambers and Finance Ministry quickly said there was a case for RBI to further cut policy rates on March 19.
There is certainly a case for RBI to give further push to growth (through a rate cut), Arvind Mayaram, Department of Economic Affairs Secretary, told reporters here.
Confederation of Indian Industry (CII) President Adi Godrej expressed hope that RBI would respond to the fiscal consolidation measures announced in the Budget and reduce policy rates by at least 50 basis points.
Assocham President Rajkumar Dhoot urged RBI not to get unduly influenced by the consumer price index data.
FICCI President Naina Lal Kidwai pointed out IIP growth in January came over a low base.
Policy rate cuts by RBI can help revive investments and also the demand for consumer durable goods.
Srivats.kr@thehindu.co.in