Updated: February 12, 2021 6:13:33 pm
India CPI Inflation, IIP Growth Rate: India’s retail inflation, which is measured by the Consumer Price Index (CPI), eased to 4.06 per cent in the month of January 2021. Separately, the country’s factory output, measured in terms of the Index of Industrial Production (IIP), witnessed a growth of 1 per cent in December 2020, two separate data released by the Ministry of Statistics & Programme Implementation (MoSPI) showed on Friday.
The retail inflation during the month of December 2020 was at 4.59 per cent.
This is the second consecutive month the CPI data has come within the Reserve Bank of India’s (RBI) upper margin of 6 per cent. The government has mandated the central bank to keep retail inflation within the range of 4 per cent with a margin of 2 per cent on either side.
The retail inflation data is primarily factored in by the RBI while making its bi-monthly monetary policy. In its bi-monthly monetary policy meeting held last week, the Indian central bank had kept its key interest rates unchanged and decided to maintain an ‘accommodative stance’ as long as necessary for the fourth time in a row.
The decline in retail inflation last month was mainly due to easing food prices. The Consumer Food Price Index (CFPI) or the inflation in the food basket eased to 1.89 per cent in the month of January, down from 3.41 per cent in December 2020, the data revealed.
The easing of the food basket was due to a fall in vegetable prices that slipped -15.84 per cent on-year in January. Apart from vegetables, other key segments were however positive. The oils and fats segment saw a rise of 19.71 per cent, while that of pulses and products rose 13.39 per cent and non-alcoholic beverages gained 13.15 per cent. Egg prices climbed 12.85 per cent and the meat and fish segment also witnessed a rise of 12.54 per cent.
Index of Industrial Production (IIP)
India’s factory output, which is measured in IIP witnessed a growth of 1 per cent on-year to 135.9 during the month of December 2020, separate data released by the MoSPI showed.
The IIP had grown 0.4 per cent in December 2019, the data showed.
The industrial growth so far in the fiscal year 2020-21 (April-December) has contracted -13.5 per cent, compared to a 0.3 per cent rise in the corresponding period a year ago, the data showed.
The growth in IIP during December last year is primarily on account of the electricity and manufacturing sectors. The mining sector saw a contraction of -4.8 per cent on-year to 115.1 in December. However, the manufacturing sector witnessed a growth of 1.6 per cent to 137.5 and the electricity sector rose 5.1 per cent to 158.0, the MoSPI data showed.
In December 2019, the manufacturing sector had witnessed a contraction of -0.3 per cent and the electricity sector had witnessed a fall of -0.1 per cent. However, the mining sector had risen 5.7 per cent during the same period, the data showed.
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