October IIP jump could be because of Diwali effect: CEA

New Delhi: Terming the 9.8 percent growth in industrial production in October as "very good", CEA Arvind Subramanian Friday said one has to be careful while interpreting the data as the spike could be on account of Diwali purchases.

"The latest October IIP is very good. It's a high number, good number and encouraging number. But one has to be a little bit careful in interpreting this number... Especially this month as there is a Diwali effect," Chief Economic Advisor Arvind Subramanian told reporters here.

Buoyed by demand in consumer products and capital goods during the festive season, industrial output in October grew at 9.8 percent, its fastest pace in five years.

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The cumulative IIP growth for April-October 2015-16 over the corresponding period last year stands at 4.8 percent.

"Good number, hope this continues, but one shouldn't read too much into month to month number," Subramanian said.

IIP growth for September has been revised upwards to 3.84 percent while it was -2.7 percent in October 2014.

Earlier in the day, Subramanian said the implementation of the GST will clean up the taxation regime and boost growth.

In an interview to NDTV, he said the GST will help in promoting 'Make In India' by making 'One India'.

Subramanian, who headed a committee on suggesting GST rate, said the simplification and uniformity in the new indirect tax regime will help in boosting country's growth and checking tax evasion and corruption.

The committee had suggested a 15-15.5 percent revenue neutral GST rate. It has also suggested 17-18 percent standard GST rate, 12 percent on merit goods and 40 percent on sin goods.

In principle, he said there should be no rise in prices post implementation of GST.

The Constitution Amendment Bill to roll out Goods and Services Tax is stuck in the Rajya Sabha due to stiff opposition by the Congress party. The ruling NDA does not have majority of its own in the Upper House of the Parliament.