March IIP Declines most in 21 months whereas on a yearly basis it stood at its lowest in 3 years time. And the figures are likely to provide more room for a rate cut by the RBI's MPC in its third bi-monthly policy review meet in June. Also, this may further nudge banks to lower or pass on monetary policy rates who have just witnessed a decline in lending rates by 10 or 20 bps while there has been a together decline in key rate by 50 bps.
The lowest IIP figure is led by a decline in growth in the manufacturing sector, which is of primary importance when it comes to job creation and a contraction therein indicates poor job situation in the country. For the March month, the decline in IIP is to the tune of 0.1%. In June last year, the growth in IIP declined by 0.3%
Sequentially, only the electricity sector witnessed growth for March month at 2.2%.