The purchasing managers’ index (PMI) data for December showed its fastest pace of growth since July with all round improvement in new orders, exports and hiring. Additionally, the latest report from the Centre for Monitoring the Indian Economy (CMIE) shows a surge in new projects, new investment announcement and a 81 percent drop in stalled projects. So, does this signal a revival in growth?

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To discuss this in detail CNBC-TV18 spoke with Mahesh Vyas, MD and CEO of CMIE and Samiran Chakraborty chief economist of Citi.

Vyas said, “The numbers were a good reason to cheer. We were very happy to note that there is an increase in all the capex metrics, there is a sharp increase in new investment announcements, there is increase in projects getting completed, there is a fall in projects getting stalled and there is an increase in the project that were stalled getting revived now. So, all the broad metrics are indicating that there is an improvement."

According to Chakraborty, for both coal and power – the December numbers are somewhat better than the run rate that they were having for the rest of the year. The cement number have also showed some improvement, he said. "So coal, power, cement and hopefully now steel will catch up. I am cautious that this improvement is from an extremely low base helped by favourable base but I am hopeful that if this core sector numbers start improving then that follows-on for the rest of the economy. Also there is some signs that rural demand might be finally getting some benefit from higher food prices. So these are the two things that I would be very closely watching,” he added.

Speaking about PMI numbers, Chakraborty said, “PMI numbers historically has been a bit volatile in a sense that while we were talking about a deep slowdown in India, the PMI numbers consistently stayed above 50 and did not show that kind of a big decline. So. I would be looking less at the PMI number but more at the other indicators.”

When asked if this recovery was sustainable for infrastructure as a whole, Vyas said, “One doesn’t draw a strong influence from just one data point. This is not a strong enough indicator that there is a turnaround and this will be sustained.". However, he further added, "Even if I remove the airline number, there is an increase in the new investment. There is a small increase, so I will say that maybe we will have a period of new investment announcement, which will not fall any further. That is the best we can say. For this to pick up and convert into new capacity creation, I think it is a long way still."

"We shouldn’t fool ourselves to believe that capacity utilisation is good enough for people to go out and create new capacities unless the government puts money on the table and gets serious about building infrastructure, I don’t think I am very optimistic of a turnaround in investments,” Vyas noted.

With regards to revival of stalled projects, Vyas said, “There have been lots of projects that have been stalled and it is possible sometimes one or two to come back and gets revived. We are working from a very low base. So from a very low base, this looks okay but the long-term, we need to wait for a few quarters to see that the revival means a lot.”