The numbers were better than expected with the manufacturing sector seeing a robust growth at at 8.5% in January 2012, against 1.8% in December, 2011.

The Mining sector growth was as expected a disappointing -2.7%. Electricity growth was seen up at 3.2%, while basic goods growth was up at 1.6%. The growth rate was deterred by the slow growth seen in few sectors like crude oil, refinery products, steel and cement.

The encouraging data IIP data may prompt the RBI to hold rates, rather than go ahead with a cut in the forthcoming Monetary Policy Review slated for March 15.

The Reserve Bank of India on Friday cut the CRR by 0.75 basis points to ease liquidity in the economy, which will inject Rs 48, 000 Crore in the economy.

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