Montek Singh predicts dip in industrial production in Q3

New Delhi, Feb 10 (ANI): The Deputy Chairman of the Planning Commission, Montek Singh Ahluwalia, on Friday predicted a dip in industrial production in the third quarter.

The Index of Industrial Production (IIP) dropped to its slowest pace in two months, adding to the pressure on the Reserve Bank of India (RBI) to start cutting interest rates to help stimulate an economy that is headed for its slowest growth in three years.

The IIP slumped to an annual rate of 3.4 percent in December, down from November's 5.9 percent, on the back of slowing infrastructure output and domestic demand.

Speaking to journalists in New Delhi, Ahluwalia said he anticipated a drop in numbers.

"I think I have been saying a lot of times that I thought the third quarter would be a kind of bottoming out quarter. We have to really see whether that works out," he said.

He added that figures were likely to pick up in the January to March period.

The notoriously volatile data comes days after the government cut its economic growth forecast to a three-year low of 6.9 percent for the fiscal year that ends in March.

Growth in the Indian economy, which grew 8.4 percent in the year to March 2011, has been slowing due to the euro zone crisis, the RBI's tight monetary policy, and government policy paralysis discouraging investment in the country. (ANI)