Excerpts from CNBC-TV18's exclusive interview with PN Vijay

Q: First one word on those IIP numbers yesterday optically looked quite bad, then got put down to the base effect. Would you be worried about the pace at which it’s been moving for the first quarter of this year?

A: The IIP numbers were unsettling of course, the government’s spokesperson was quick to clarify that there is a huge base effect because March ’07 was the best IIP number that India ever had for a long time. Having said that two points about the IIP like inflation we need to focus a little bit more on the sequential Month to Month (MoM) and we need to get a bit tight about it. The IIP growth between February and March has been impressive at about 8.5%. The other thing is that IIP is very old and outmoded. It doesn’t take into account the new India. For example the consumer durables have high weightage for VCRs and Black & White Televisions, which nobody buys these days, so it needs a little bit of war calling. Like inflation, the IIP numbers are under control but you need something extra to get people excited again.

Q: What about the market itself. Talk has begun again of it going back and testing the lows that we have seen earlier this year. Is May turning from being a rangebound month to  possibly being the dangerous one?

A: I take a contrarian view on this. I took this view in the market of 4,500 in early April and I say this again, that at 5,000 we are probably at the beginning of a totally new bull market. Inflation is definitely petering out Week to Week we are seeing that. IIP numbers in the first quarter of the last year was very weak, so we are getting a base effect acting out in our favour just like inflation. The rupee has slipped to 42, it may not slip more than that.