India CPI Inflation, IIP Growth Rate: The country’s retail inflation, which is measured by the Consumer Price Index (CPI), rose to an eight-year high of 7.79 per cent in the month of April. Separately, India’s factory output, measured in terms of Index of Industrial Production (IIP), witnessed a growth of 1.9 per cent in March, two separate data released by the Ministry of Statistics & Programme Implementation (MoSPI) showed on Thursday.
The retail inflation for the month of March was 6.95 per cent.
This is the fourth consecutive month that the CPI data has breached the Reserve Bank of India’s (RBI) upper margin of 6 per cent. The government has mandated the central bank to maintain retail inflation at 4 per cent with a margin of 2 per cent on either side for a five-year period ending March 2026.
The CPI data is mainly factored in by the RBI while making its bi-monthly monetary policy. Last week, in a sudden move, the Monetary Policy Committee (MPC) of the central bank held an off-cycle meeting where it hiked repo rate by 40 basis points to 4.40 per cent and the cash reserve ratio (CRR) by 50 basis points to 4.50 per cent.
RBI Governor Shaktikanta Das in his speech last week said the hike in repo rate and cash reserve ratio was aimed at reining in elevated inflation amid the global turbulence in the wake of the Ukraine war.
The Consumer Food Price Index (CFPI) or the inflation in the food basket also spiked on-month during April to 8.38 per cent, from 7.68 per cent in March, the data revealed.
The spike in the food basket was due to a sharp rise in prices of oils and fats which climbed 17.28 per cent on year in April. Apart from this, the vegetable prices saw a rise of 15.41 per cent while that spices gained 10.56 per cent and meat and fish rose 6.97 per cent. Prepared meals, snacks, sweets etc. spiked 7.10 per cent last month, cereals and products climbed 5.96 per cent and milk and products rose 5.47 per cent.
Apart from food and beverages, the fuel and light segment rose 10.80 per cent, clothing and footwear gained 9.85 per cent, housing segment inched up 3.47 per cent and the pan, tobacco and intoxicants climbed 2.70 per cent.
Industrial output (IIP)
India’s factory output, which is measured in terms of IIP witnessed a growth of 1.9 per cent year-on-year to 148.3 during the month of March, a separate data released by the MoSPI showed.
The IIP had surged 24.2 per cent in March 2021, the data showed.
The industrial growth in the fiscal year 2021-22 (April-March) climbed 11.3 per cent, compared to a contraction of (-)8.4 per cent a year ago, the data showed.
The growth in IIP data during March is on account of the electricity and mining sectors. The mining sector rose 4.0 per cent on-year to 144.6 in March. The electricity sector witnessed a growth of 6.1 per cent to 191.0. Apart from these, the key manufacturing sector saw a 0.9 per cent growth to 144.6, the MoSPI data showed.
In March last year, the manufacturing sector had witnessed a sharp growth of 28.4 per cent. During the same month, the mining sector had risen 6.1 per cent, while the electricity sector had witnessed a growth of 22.5 per cent, the data showed.