Retail Inflation Shoots Past 5%, Factory Output Slumps

Food prices rise nearly 4 per cent in February, while manufacturing activities contract 2 per cent in January

Retail Inflation Shoots Past 5%, Factory Output Slumps
Retail Inflation Shoots Past 5%, Factory Output Slumps
PTI - 12 March 2021

Retail inflation rose to 5.03 per cent in February mainly because of higher food prices. The consumer price index (CPI)-based retail inflation was at 4.06 per cent in January, when the country’s industrial production contracted 1.6 per cent.

The rate of price rise in the food basket accelerated to 3.87 per cent in February, as against 1.89 per cent in the preceding month, according to the data released by the National Statistical Office (NSO). Inflation in ‘fuel and light’ category remained elevated at 3.53 per cent during the month as against 3.87 per cent in January.

The Reserve Bank, which mainly factors in the retail inflation while arriving at its monetary policy, has been asked to keep the CPI inflation at 4 per cent with a margin of 2 per cent on either side.

India’s manufacturing sector output contracted 2 per cent in January 2020, driving the Index of Industrial Production (IIP) down from 2.2 per cent registered a year ago. Mining activities declined 3.7 per cent, while power generation grew 5.5 per cent during the month under review.

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