<?xml version="1.0" encoding="UTF-8"?><root available-locales="en_US," default-locale="en_US"><static-content language-id="en_US"><![CDATA[<p>We are slowing down. The index of industrial production (IIP) for May grew at a slower rate of 5.6 per cent as against 5.8 per cent in May 2010. There is nothing new to it, but the problem is we could be taking the wrong measure for it. Just look at the revisions made.<br><br>Growth in capital goods for April stood revised at 7.3 per cent from 14.5 per cent; for basic goods, it was 6.9 per cent (7.3 per cent); consumer non-durables were at 4.9 per cent (21 per cent); the IIP itself at 5.8 per cent is a revision from 6.3 per cent. There is to be another revision this month. <br><br>"Analytically bewildering" is how Reserve Bank of India governor D. Subbarao described the poor quality of data at the central bank's disposal.<br><br>Now, there is nothing to suggest that it is only IIP data that can be misleading; it can hold true for inflation too. Headline inflation rose to 9.44 per cent for June 2011 compared to 9.06 per cent in May. The April figure at 9.70 is a revised one — up from 8.7 per cent or a difference of 100 basis points. "There is nothing you can do about it. The RBI governor has picked holes in the data, but that is all we have to work with," says a bank economist.<br><br>Of course, there is a better way to look at how the economy is doing — by looking at specific numbers. Citi says on a year-on-year basis (April 2011-10), sales of two-wheelers grew by 23 per cent, cars (12.9 per cent) and commercial vehicles (10.3 per cent). This, when over April 2010-09, two-wheelers grew at 40.6 per cent, with cars at 19.9 per cent. The verdict: we are slowing down.<br><br>(This story was published in Businessworld Issue Dated 25-07-2011)</p>