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India’s retail inflation rises marginally to 4.48% in Oct; IIP grows 3.1% in Sep

By Priyanka Verma 
Updated Date
India’s retail inflation rises marginally to 4.48% in Oct; IIP grows 3.1% in Sep

The country’s retail inflation, measured by the Consumer Price Index (CPI), rose marginally to 4.48 per cent in the month of October. Separately, India’s factory output, measured in terms of the Index of Industrial Production (IIP), witnessed a year-on-year growth of 3.1 per cent in September, two separate data released by the Ministry of Statistics & Programme Implementation (MoSPI) showed on Friday.

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The retail inflation during the month of September was at 4.35 per cent.

This is the fourth successive month that the CPI data has come below the Reserve Bank of India’s (RBI) upper margin of 6 per cent. The government has asked 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 month, the Monetary Policy Committee (MPC) of the central bank kept the repo rate unchanged for the eighth time in a row at 4 per cent, slashed the inflation target for 2021-22 to 5.3 per cent, and indicated the unwinding of the accommodative policy as the economy shows signs of emerging from the impact of the Covid-19 pandemic.

The Consumer Food Price Index (CFPI) or the inflation in the food basket inched higher on-month during October to 0.85 per cent, from 0.68 per cent in September, the data revealed.

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The marinal hike in the food basket was mainly due to a sharp rise in prices of oils and fats which surged 33.50 per cent on-year in October. Apart from this, meat and fish prices segment saw a rise of 7.12 per cent while that of pulses and products gained 5.42 per cent and milk and products rose 3.19 per cent. Non-alcoholic beverages climbed 11.40 per cent. On the other hand, the vegetables segment slipped (-)19.43 per cent and egg prices declined (-)1.38 per cent.

Apart from food and beverages, the fuel and light segment rose 14.35 per cent in October, while clothing and footwear gained 7.53 per cent and the housing segment inched up 3.54 per cent.

Index of Industrial Production (IIP)

In a separate data released by MoSPI, the country’s factory output witnessed a growth of 3.1 per cent on-year to 127.9 during the month of September.

The IIP had risen 1.0 per cent on-year to 124.1 in September 2020, the data showed.

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So far in the fiscal year 2021-22 (April-September), the industrial sector has seen a rise of 23.5 per cent, compared to a (-)20.8 per cent contraction in the corresponding period a year ago, the data showed.

The growth in IIP during September was led by the mining sector followed by manufacturing and electricity sectors. The mining sector saw a growth of 8.6 per cent on-year to 95.1 in September, while the manufacturing sector saw a rise of 2.7 per cent to 129.9. The electricity sector too rose 0.9 per cent to 167.9, the MoSPI data showed.

In the corresponding month year ago, the manufacturing sector had grown 0.4 per cent, the mining sector had witnessed a rise of 1.4 per cent and the electricity sector had risen 4.9 per cent.

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