Watch out next monetary policy

The October industrial production performance sent shivers down the spine of the central bank and the government as poor set of numbers contributed to the 4.7% fall in the index. So much so that the RBI started worrying about the impact of higher interest rates on growth and maintained status quo in its latest monetary policy. So a much stronger show in November has certainly given the RBI something to cheer about. The Index of Industrial Production (IIP) grew by 5.9% during the month. What contributed to this growth was the strong show put up by consumer goods. This category grew by 13.1%, with durables rising 11.2% and non-durables by 14.8%. But capital goods remained a dampener with the sector contracting for the third straight month and highlighting the fact that the investment climate in the country has probably reached its lowest point. Overall, whether this positive trend can be sustained in the coming months remains to be seen though. More important will be what the RBI chooses to do with this data. Will it begin a series of rate cuts or will it continue to maintain the same rates in its forthcoming monetary policy? That will be the event to watch out for.