India’s economic activity remained wanting, as evident from the headline data point : the Index of Industrial Production (IIP), which showed a growth slow down to 3.6% on a year on year (yoy) basis in September 2015, which is a 4 month low. However, a deeper look does not suggest as much gloom as that suggested by the headline number since the trend figure still quite strong.
Inflation based on the Consumer Price Index (CPI) rose to 5% in October 2015, on a waning of a favourable base effect and promises to remain at these relatively levels for the remainder of the financial year.
Other activity indicators like crop under rabi sowing are also showing a disappointing trend so far, with a significant lag in area from the previous year. Foreign tourist arrivals have also grown very little in October compared to last year and foreign exchange earnings have actually fallen.
The centre encouraged the lagging investment cycle in the economy by further easing Foreign Direct Investments (FDI) across a spate of sectors including construction development and defence among others.
The Prime Minister’s (PM) visit to UK resulted in the signing of US$ 14bn worth of commercial deals in sectors like energy, finance and telecom, which should bring in more investments into India in the coming years.