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Economy Update: November IIP – Bounced back into positive zone

Economy Update: November IIP – Bounced back into positive zone. The index of industrial production (IIP) for November 2008 increased 2.4%, as compared to 4.9% growth in November 2007.
Mining, manufacturing and electricity grew at 0.5%, 2.4% and 3.1%, respectively during November, 2008.The capital goods declined 2.3%, whereas intermediate good and consumer goods rebounded into positive zone by growing at 2.6% and 4.4%, respectively.
The cumulative growth for April-November 2008-09 stands at 3.9% over the corresponding period of the previous year. At the same time, IIP growth for October 2008 has been revised upwards to 0.3% decline from the previously reported decline of 0.4%.
The recent fall in inflation would provide greater leeway to RBI for taking
softer monetary stance, going forward. In our view, further fiscal stimulus
by the government is less likely, given their fiscal position.