India's core sector output has reached a 14-month high, marking a significant boost to the country's economic activity. This surge in output justifies the Reserve Bank of India's Monetary Policy Committee's decision to maintain a policy rate of 6.5%.
The index of eight core industries shows promising signs, indicating robust IIP growth. Economists from Ind-Ra have noted a broad recovery in infrastructure, further bolstering the outlook for the Indian economy.
Aditi Nayar, an analyst from Icra, expects an IIP surge due to several factors. These include robust indicators, festive demand, and spending related to upcoming elections.
The buoyant growth in the cement and steel sectors has further strengthened the positive economic outlook. This growth is supported by a 10.8% rise in union government capital expenditure (capex), indicating increased investment in these sectors.
This recent development marks a period of strong economic performance and recovery for India. It also underscores the effectiveness of the Reserve Bank of India's monetary policy decisions in facilitating economic growth and stability.
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