New Delhi, January 10: At a time when policymakers are working around the clock to pull off a robust economic recovery, financial experts believe the revival remains elusive on two major grounds - industry and services. As uncertainty looms large over the economy, industrial production is unlikely to get back to a healthy pace before the Lok Sabha polls, said observers.
According to industry experts, the industrial growth data for November, to be released on Friday, is likely to show a rise of only 1-1.5 per cent, Business Standard reports. "By our estimate, the rise in industrial production will likely be around 1.5 per cent, subdued growth," Aditi Nayar, senior economist at ICRA Ratings was quoted as saying to the publication. Industrial production had narrowed down to 1.8 per cent in October and then remained flat during the first half of the financial year.
It should also be noted that the eight infrastructural industries that contribute 38 per cent to the Index of Industrial Production expanded by 1.7 per cent in November against 5.8 per cent the previous year. The Purchasing Managers' Index (PMI) also signaled a low expansion at 51.3 points in November.
"There are no signs which point to that and I expect stagnation in industries for this year," Madan Sabnavis, chief economist at CARE Ratings, said to Business Standard. He said a comeback can only be expected in the second quarter of the next year. As the union budget for 2014-15 would come late, there would be uncertainty even on the monetary policy of the Reserve Bank of India.
Service, which was the biggest let-down in the second quarter of this financial year, is also expected to grow at low rates in the second half of 2013-14.