For Kashmir to Grow, the rest of India needs to grow first. IIP for June in at 2% vs 3.1% in May and it put forth what we knew all along - the economy is slowing down and slowing down fast. With the auto sector almost gutted, realty also down in the dumps, these numbers of industrial production, at least as of now seem merely symbolic. The sharp degrowth in capital goods and consumer durables shows the reality we experience. Manufacturing too at 1.2% shows sure signs of slowdown.
Internals of IIP:
Manufacturing 1.2% vs 2.5%
Capital goods -6.5% vs 0.8%
Primary goods 0.8% vs 2.5%
Intermediate goods 12.4% vs 0.6%
Consumer durables -5.5% vs -0.1%
Consumer non-durables 7.8% vs 7.7%
Electricity 8.2% vs 7.4%
Mining 1.6% vs 3.2%
RBI on Wednesday did what it could do the best and now the onus now lay on the Govt, a rate cut can only do so much beyond that, structural issues needs to be sorted out and smoothened by the Govt. Also there is a lot of uncertainity, especially on the global front and till that settles, growth will continue to struggle. At this junture, to say that RBI cutting rates will boost the sagging consumption story would be too far-fetched.
The markets are currently in the positive zone after days of consistent battering and this is on the hope that the FM will soon announce the clarification on the surcharge issued inadvertently on the FII/FPIs in the budget, and after that FII have turned aggresive sellers.
FM has assured that all the action will be taken "very soon" to boost the sagging economy. So once again the market and the indian industry will wait and watch. Hope the sense of nationalism now gives way to boost the sagging economy.
Internals of IIP:
Manufacturing 1.2% vs 2.5%
Capital goods -6.5% vs 0.8%
Primary goods 0.8% vs 2.5%
Intermediate goods 12.4% vs 0.6%
Consumer durables -5.5% vs -0.1%
Consumer non-durables 7.8% vs 7.7%
Electricity 8.2% vs 7.4%
Mining 1.6% vs 3.2%
RBI on Wednesday did what it could do the best and now the onus now lay on the Govt, a rate cut can only do so much beyond that, structural issues needs to be sorted out and smoothened by the Govt. Also there is a lot of uncertainity, especially on the global front and till that settles, growth will continue to struggle. At this junture, to say that RBI cutting rates will boost the sagging consumption story would be too far-fetched.
The markets are currently in the positive zone after days of consistent battering and this is on the hope that the FM will soon announce the clarification on the surcharge issued inadvertently on the FII/FPIs in the budget, and after that FII have turned aggresive sellers.
FM has assured that all the action will be taken "very soon" to boost the sagging economy. So once again the market and the indian industry will wait and watch. Hope the sense of nationalism now gives way to boost the sagging economy.
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