IIP-Consumption revival to raise industrial growth in 2013-14: CRISIL Research
 

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Higher farm incomes (assuming a normal monsoon), increased pre-election welfare expenditure by the government, and lower interest rates are expected to improve household spending in 2013-14.

Overview: Industrial output fell by 0.1% in November 2012 on a relatively high base of 6.0 per cent growth a year earlier. Manufacturing output grew marginally by 0.3 per cent while mining and quarrying output fell by 5.5 per cent in November. The current weakness in industrial output however, should taper off in coming months.

Crisil expect industrial growth to pick up in 2013-14 aided by a revival in private consumption growth and a marginal increase in exports. Higher farm incomes (assuming a normal monsoon), increased pre-election welfare expenditure by the government, and lower interest rates are expected to improve household spending in 2013-14. 

Crisil expect the Reserve Bank of India to cut the repo rate by 75-100 basis points by March 2014, thereby helping to lower retail lending rates. Improved private consumption growth would benefit sectors such as consumer goods and automobiles.