The global slowdown may have sent shudders across the Indian economy, but the festive season holds a key to the India Inc.
Beating estimates, the July Index of Industrial Production (IIP) has come in at 4.2 per cent, up from 3.8 per cent in June.
Core sector growth, which generally sets the trend for the IIP, slowed to 1.1 per cent in July as against 3 per cent in June. Country's eight core sectors- coal, crude oil, natural gas, refinery products, fertiliser, steel, cement and electricity have a combined weight of around 38 per cent in the Index of Industrial Production.
Continuing the declining trend, India's merchandise exports contracted for the eighth month in a row in July, however at the slowest pace in seven months. According to data released by the commerce ministry, the exports as well as imports declined 10.3 per cent in July, sending the trade deficit to an eight month high of $12.8 billion.
In an encouraging sign, domestic car sales rose by 17.47 per cent in July-- the highest in three months—to 1.62 lakh units. Car sales however grew by a modest 6.74 per cent in August to around 1.63 lakh units.
The IIP numbers are generally closely watched by the RBI for its monetary policy. The Central Bank next meets on September 29. The industry and the government are clamouring for a rate cut by the RBI to give a boost to the economy amid global slowdown.