Describing the 2.4% industrial growth rate in January as an indication of "very good turnaround", Planning Commission deputy chairman Montek Singh Ahluwalia on Tuesday said growth would show improvement in subsequent months.
"The turnaround is very good. I wouldn't call it strong growth, but it does bear out...that the economy has bottomed out and is now on the way out. But I would hope that in the subsequent months it will show more robust growth," Ahluwalia told reporters on the sidelines of an event here.
He said the positive growth in industrial production indicates that the economy has bottomed out and is back on track.
"...it suggests that the bottoming out is over and we are hopefully getting back. But I wouldn't call it a strong recovery yet. In our own estimates of 2012-13, obviously they did not anticipate that there would be a strong recovery in the third and the fourth quarter. So, it's really in the next quarter that the hope is that we would see some response," he said.
The industrial output measured by the Index of Industrial Production (IIP) grew by 2.4% in January on account of better performance by manufacturing and power sector. IIP showed contraction in November and December.
When asked if the industrial output growth in January was the outcome of recent government initiatives, he said impact of those steps are yet to be fully felt.
"You know it's almost impossible to judge that. But there is no doubt that a lot of the impact would be the result of steps taken really from last September. But I don't think that the impact of those steps is fully felt yet."
He said many of the steps taken by the government, particularly for unclogging infrastructure projects, will show impact now.
"The cabinet committee on investment has met, they have discussed certain things. I believe that progress is being made. It is really in the next few weeks that we will see the result of that...Quite a lot of impact of intitiavtives taken so far is yet to be seen and will be seen," Ahluwalia said.