Economy remains in a trough, RBI must step in

Though August IIP has grown a better-than-expected 2.7%, as compared to a decline of 0.2% in July and minus 1.8% in June, the number has been puffed up a bit by inexplicably high growth in food products/apparel/radio-TV equipment. According to CLSA research, the three add up to 1.5 percentage points, taking away from the headline number considerably.

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