Although it declined to its lowest level since February this year, the CPI is still above the Reserve Bank of India’s (RBI) upper margin of 6% for the seventh consecutive month.
New Delhi: The retail inflation of the country, measured by the Consumer Price Index (CPI), eased to a 5-month low of 6.71% in July, down from 7.01% in June. Meanwhile, India’s factory output, measured through Index of Industrial Production (IIP), saw a growth of 12.3% in June, showed two separate data released by the Ministry of Statistics & Programme Implementation (MoSPI) showed on Friday.
The ministry said, “The Price data are collected from selected 1114 urban Markets and 1181 villages covering all States/UTs through personal visits by field staff of Field Operations Division of NSO, MoSPI on a weekly roster. During the month of July 2022, NSO collected prices from 99.7% villages and 97.6% urban Markets while the Market-wise prices reported therein were 89.5% for rural and 92.3% for urban.”
Although it declined to its lowest level since February this year, the CPI is still above the Reserve Bank of India’s (RBI) upper margin of 6% for the seventh consecutive month. The government has asked the central bank to maintain retail inflation at 4% with a margin of 2% on either side till March 2026.
The RBI mainly factors in the CPI data while making its bi-monthly monetary policy. The Monetary Policy Committee (MPC) of the central bank last week hiked the repo rate by 50 bps to 5.4% in order to check inflation.
The inflation in the food basket also showed a month-on-month fall in July to 6.75% from 7.75% in June. Vegetables prices rose 10.9% per cent on year in July. Spices saw a rise of 12.89% while cereals and products gained 6.9% and oils and fats rose 7.52%. Egg prices slipped (-)3.84%, however, fruits grew 6.41%. The fuel and light segment rose 11.76%, clothing and footwear gained 9.91% and the housing segment inched up 3.9%.
Meanwhile, India’s factory output saw a growth of 12.3% on year to 137.9 during June. The IIP had risen 13.8% in June 2021, the data showed. So far, the industrial growth in the fiscal year 2022-23 (April-June) has surged 12.7%, compared to a contraction of spike of 44.4% in the corresponding period a year ago, the data showed.
The manufacturing and electricity sectors led the growth of the IIP data. While the electricity sector rose 16.4 per cent on year to 196.9 in June, the manufacturing sector saw a growth of 12.5% to 136.3. The mining sector saw a 7.5% growth to 113.4.