Quote on IIP by Dharmakirti Joshi, Chief Economist, CRISIL Ltd

The Index of Industrial Production growth slowed to 3.7% on-year in June compared with the upwardly revised estimate of 5.3% in May.

This was lower than market expectations and in contrast with the S&P Purchase Managers Index, which had printed a very positive 57.8 in June.

Going forward, two factors can swing the industrial performance — slowdown in the advanced economies, and inadequate monsoon in India.

Though the major Western economies have remained resilient in the first half of this year, S&P Global expects a shallower, but more protracted, slowdown as interest rates stay elevated for longer.

While overall monsoon has normalised now after a stuttering start in June, rains in August and September are a critical monitorable.

A weak El Niño has set in as expected, the timing and intensity of which will weigh on the performance of rains for the rest of this ongoing monsoon — and thereby rural performance.

Overall, we expect GDP growth at 6.0% this fiscal compared with 7.2% last fiscal.