IIP seen at 3.6%: Why Indian economy looks poised, again!

The industrial growth data for the month of September will be announced later in the day.

As per ET Now poll estimates, the Index of Industrial Production ( IIP) grew at 3.6% versus 0.6% in August.

Consensus estimate for the same ranges from 1.3% to 5.8%.

Mining likely grew at 0.3% as against -0.2 in the previous month, manufacturing 3% as against -0.1% and electricity 12.6% as against 7.2%.

Concerns over tightening measures by the RBI remain thanks to high inflation figures, but analysts believe that GDP growth would be healthy.

"We are talking about the GDP number of 4.7% in this financial year and about 5.5-5.6 to be precise for the next one," says Siddhartha Sanyal, Barclays Bank.

Over the years, the government and analysts are seeing India’s growth story to return to 8%.

Apart from the stellar Q2 results, other domestic data so far has also been on the good side.

Trade deficit figure for the month of October, released yesterday, stood at $10.56 billion, as against $6.7 billion in the previous month. The number is about 50% seen in October 2013, and that was the highlighting point.

The latest reading of the country's services sector for October was higher than seen in the previous month. The HSBC Purchasing Managers' Index (PMI) for services saw a reading of 47.1 points in October, fourth consecutive month of contraction, but higher than the four-and-a-half year low of 44.6 in September.

A reading of 50 separates growth from contraction.

Infrastructure output data, released late last month, for September, was robust. Output rose an annual 8%, accelerating from the previous month's 3.7%.

"The core sector number had been quite decent ... On the other side, exports are doing relatively better," says Siddhartha Sanyal, Chief India Economist, Barclays Bank.

The bogey of rising current account deficit has somewhat been taken care of, largely due to the projections made by brokerages and the government. The current account deficit is now seen at around $45 billion for the current financial year, against the previous estimate of $70 billion. The new figure is supported from Standard Chartered as well as the government.

"In fact it (the CAD situation) has already improved. The fiscal Q3 current account deficit number will be very close to balance, and could be a small surplus," says Robert Prior-Wandesforde, Head of ASEAN, India Economics, Credit Suisse.