Updated: April 12, 2021 6:08:01 pm
India CPI Inflation, IIP Growth Rate: India’s retail inflation, measured by the Consumer Price Index (CPI), rose to 5.52 per cent in the month of March. Separately, the country’s factory output, measured in terms of the Index of Industrial Production (IIP), witnessed a contraction of (-)3.6 per cent in February, two separate data released by the Ministry of Statistics & Programme Implementation (MoSPI) showed on Monday.
The retail inflation during the month of February was at 5.03 per cent.
According to a recent Reuters poll, retail inflation was expected to have risen to 5.40 per cent in March from a year earlier.
This is the fourth consecutive month that the CPI data has come within the Reserve Bank of India’s (RBI) upper margin of 6 per cent. At the end of last month, the government asked the RBI to maintain retail inflation at 4 per cent with a margin of 2 per cent on either side for another five-year period ending March 2026.
The retail inflation data is primarily factored in by the RBI while making its bi-monthly monetary policy. Last week, the Monetary Policy Committee (MPC) of RBI kept the repo rate unchanged for the fifth time in a row at 4 per cent while maintaining an ‘accommodative stance’ as long as necessary to mitigate the impact of the COVID-19 pandemic.
The rise in retail inflation last month can be attributed to the rise in food prices. The Consumer Food Price Index (CFPI) or the inflation in the food basket rose to 4.94 per cent in the month of March, up from 3.87 per cent in February, the data revealed.
The month-on-month rise in the food basket was led by a rise in prices of oils and fats which rose a whopping 24.92 per cent in March, while that of meat and fish rose 15.09 per cent, the data showed. Non-alcoholic beverages gained 14.41 per cent while pulses and products segment also witnessed a rise of 13.25 per cent and egg prices too rose 10.60 per cent. Vegetable prices, however, slipped -4.83 per cent on-year in March.
Index of Industrial Production (IIP)
India’s factory output witnessed a contraction of (-)3.6 per cent on-year to 129.4 during the month of February, separate data released by the MoSPI showed.
According to the data, the IIP had grown 5.2 per cent in February 2020.
So far in the fiscal year 2020-21 (April-February), the industrial sector has seen a contraction of (-)11.3 per cent, compared to a 1.0 per cent growth in the corresponding period a year ago, the data showed.
The contraction in IIP during February is primarily on account of the manufacturing and mining sectors. The manufacturing sector saw a contraction of -3.7 per cent on-year to 129.3 in February, while the mining sector witnessed a fall of -5.5 per cent to 116.5. The electricity sector on the other hand rose 0.1 per cent to 153.9, the MoSPI data showed.
In the corresponding month year ago, the manufacturing sector had risen of 3.8 per cent, the mining sector had witnessed a rise of 9.6 per cent and the electricity sector had gained 11.5 per cent.
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