THE sharp deceleration in the growth rate of index of industrial production (IIP) is a signal for the government to take a re-look at consumer spending and loosen money supply a bit, commerce & industry minister Kamal Nath has said, indicating the need for a possible reduction in interest rates. The minister, however, stressed on the need to guard against inflation and said the calibration has to be done carefully. “It is tight-rope walking,” he said. Speaking to reporters on the sidelines of a function, the commerce minister said the sharp drop in IIP growth rate to 5.3% in November 2007 from 15.8% in November 2006 indicated a deceleration in industrial growth, but things would improve. “I am confident that on an annual basis it (IIP) will go up,” he said. Mr. Nath said the government will have to ensure that consumer spending is not completely deflated. At the same time, inflation has to be guarded against as the country “did have a bout of inflation”, he said. “There has to be a balance. Calibration has to be done carefully,” he added. The government has been concerned for a while over deceleration in manufacturing. Prime Minister Manmohan Singh recently formed a group to be headed by National Manufacturing Competitiveness Council chairman V Krishnamurthy to devise a strategy for reviving growth.