Retail Inflation Eases To 4.06% In Jan; IIP Sees 1% Growth In Dec

On Friday, data released by the Ministry of Statistics and Programme Implementation (MoSPI) showed that the Consumer Price Index (CPI), the measure for India's retail inflation, eased to 4.06% in the month of January, when compared to 4.59% seen in December.

In a separate release, the ministry's data showed that the Index of Industrial Production (IIP) grew 1% for December 2020. In comparison, the factory output in the country had contracted 1.9% in November and grew 0.4% in December 2019.

IIP data showed that the manufacturing sector output grew by 1.6% in December 2020, mining output declined by 4.8%, while power generation grew 5.1%.

CPI data has come within the Reserve Bank of India's (RBI) upper margin of 6% for the second consecutive month. The retail inflation data is one of the important factors that is taken into consideration by the government in its bi-monthly monetary policy. The central bank has been mandated by the central bank to keep retail inflation within the range of 4% with a margin of 2% on either side.

Meanwhile, industrial production has been hit due to the COVID-19 since March last year when IIP contracted by 18.7% in the month.