There have been indications that the Indian economy could be in hot water due to an industrial slowdown.
But, on the contrary, the Indian Industrial Production (IIP) numbers for the month of September, which would be released on Wednesday, are actually expected to show a temporary rebound in the industry, mainly due to seasonality.
However, the longer-term trend seems to remain negative.
The furnaces seem to be cooling and assembly lines slowing down as the country grapples with a slowdown.
Over the past few months, the industry has borne the brunt of the meltdown, but the IIP for September could bring in some respite, though for a brief time period.
After a sharp dip in growth in August, the IIP is expected to rebound marginally in September to an estimated 3.2 per cent.
However, some economists predict an upward surprise pegging growth at over five per cent, hoping that a seasonal revival in sectors like commercial vehicles and cement will push growth. They feel that this would help to maintain the growth forecast.
Suresh Tendulkar of the PM economic advisory council, said, "Growth should be close to government’s estimate of around 7.5 per cent.”
There are others that believe that even if there is a minor rebound in September numbers, the foundations for a longer-term slowdown have been laid.
While Morgan Stanley estimates that growth in the financial year, 2010 will dip to 5.7 per cent, Goldman Sachs, too, mirrors those projections.
Moreover, ratings agency Fitch also expects growth to slip below 6 per cent.