As per the Index of Industrial Production (IIP) data, the manufacturing sector's output surged 2.7% in September 2021. In September, the mining output climbed 8.6%, and power generation increased 0.9%. The IIP had grown by one per cent in September 2020.
India’s retail inflation dropped to a five-month low of 4.35 %, down from 5.3 %, owing primarily to lower food costs, according to government data released on Tuesday.
The CPI inflation rate fell to 5.3% in August, a four-month low, owing to lower food costs and a large base impact. Retail inflation, on the other hand, had climbed to an eight-month high of 7.34% in September 2020, due to mostly rising food inflation.
The Index of Industrial Production (IIP) also increased 11.9 percent in August as per the official data.
Industrial output increased by 11.5% in July 2021, compared to a decrease of 10.5% in July 2020. This is due to strong development in the mining industry and growth in the electricity and manufacturing sectors.
In its monetary policy, the Reserve Bank of India (RBI) maintained the status quo in its bi-monthly Monetary Policy meeting for the eighth time. The RBI’s bi-monthly monetary policy is decided in a way that it manages the CPI.
“With the September number of 4.5%, CPI has averaged 5.1% in Q2 FY22 and is in line with the RBI’s latest downward-revised forecast. The main driver of the latest print is softer food and beverage prices at 1.6% y/y and 0.1% m/m, while core inflation continued to be at 5.8%. The food price trajectory will continue to remain important as some vegetable prices have reversed direction and sequentially picked up in October. Commodity price, particularly of crude oil and its partially offsetting impacts on inflation and consumption demand at a time when the economy’s aggregate demand is still below the pre-pandemic level will also be crucial,” said Sreejith Balasubramanian, Economist – Fund Management, IDFC AMC.
Published: October 12, 2021, 18:05 IST
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