Moody's blames RBI policy for negative IIP figures

"Despite global market turmoil, India's central bank continued to tighten monetary policy until July...the moderation in demand is a result of the tight monetary policy settings in the first nine months," said Moody's Economy .com, a subsidiary of Moody's group. Pointing out that loosening cycle of monetary policy by RBI began only in October, Moody's said, it might not have led to an immediate rebound in domestic consumption. "As such, manufacturing orders from the domestic sector likely remained modest in November and December," it said. However, the RBI had yesterday stated that monetary measures taken by it were "appropriate". Industrial growth turned negative in October for the first time in 15 years, as manufacturing, which comprises around 80 per cent of the industry, shrank to 1.2 per cent growth in October from a whopping 13.8 per cent a year ago.