Analysts expressed concern at the revision in the January Index of Industrial Production numbers (IIP) from 6.8 per cent to 1.1 per cent, and the fall in February numbers.
Expectations of a rate cut from the RBI in its policy announcement next week have increased, experts say.
Mr Sudhakar Shanbhag, Chief Investment Officer, Kotak Mahindra Old Mutual Life Insurance Ltd, said, "The release of February IIP at 4.1 per cent is far below the market consensus of about 6.7 per cent. Also, the rate and degree of revision of previous month’s data is increasingly making reliance on the data a challenge.
"From growth inflation dynamic perspective it is increasingly getting clear that focus has to shift to growth and hence the market expectation of rate cut from the RBI has increased post this data release and bond yields and equity markets are reflecting the expectation."
Mr Anis Chakravarthy, Senior Director, Deloitte in India, said, "The IIP data released today for February are on expected lines. It is clear that the base effect has had a role to play. Mining continues to suffer and electricity sector numbers are below the levels achieved over the past two quarters. It is good to see that capital goods output has picked up and we hope the volatility shown in this sector will decrease. We expect that the IIP numbers will continue to remain muted till core manufacturing and mining data show consistent improvement. “