India's industrial production improves

Retail inflation raises its head

A better-than-expected performance in manufacturing and capital goods sector accelerated India’s industrial production (IIP) growth to 4.1 per cent in April, but retail inflation in May showed a mild uptick.

Retail food prices, however, did not flare up despite adverse weather conditions in the past months.

The manufacturing sector which constitutes over 75 per cent of the index of industrial output, grew at 5.1 per cent in April versus 2.2 per cent last month, official data showed.
The capital goods output, a barometer of demand in the economy, grew at 11.1 per cent versus 7.6 per cent in March. But the mining sector inched up by only 0.6 per cent in April against 0.9 per cent in March. Electricity segment was down 0.5 per cent in April, against a growth of 2 per cent in March.

The higher-than-expected IIP corroborated with the indirect tax growth figures released by the Finance Ministry, a couple of days ago.

Buoyed by a handsome industry output growth, industry body Assocham said, “IIP numbers seem to be healthy and encouraging and seem to provide stem to the underlying growth momentum.”

The retail inflation, however, inched up to a three-month high of 5.01 per cent in May. The food inflation, however, eased a bit to 4.80 per cent from 5.11 per cent in April. 

The food inflation was higher in the urban areas at 4.84 per cent as against 4.74 per cent in the rural areas.
Prices of pulses, however, rose by 16.62 per cent in May.