Retail inflation edges up, factory production rises

With inflation remaining at an elevated level and above the 5 per cent mark, the central bank’s next monetary policy review in August would be keenly watched

NEW DELHI: Retail inflation inched up to a 22-month high level of 5.77 per cent in June on increase in food prices including that of key kitchen staples like vegetables and cereals.

Industrial production also grew by 1.2 per cent in May after seeing a contraction in the previous month, mainly due to uptick in consumer durables output. Factory output, measured in terms of the Index of Industrial Production (IIP), had expanded by 2.5 per cent in May last year, the data released by the Central Statistics Office showed on Tuesday.

With inflation remaining at an elevated level and above the 5 per cent mark, Reserve Bank of India’s next monetary policy review in August would be keenly watched as inflation targetting has been the main objective of the apex bank. The retail inflation measured on Consumer Price Index (CPI) was marginally lower at 5.76 per cent in the previous month, while it was 5.40 per cent in June last year.

In August 2014, consumer inflation was at 7.8 per cent.

The overall food inflation moved up to 7.79 per cent in June from 7.47 per cent in the previous month, a government data showed on Tuesday. Inflation in vegetables was up at 14.74 per cent against 10.77 per cent in May and in cereals and related products was 3.07 per cent compared to 2.59 per cent in the previous month.

Pulses

However, the rate of price rise in pulses declined to 26.86 per cent during the month while it stood at 31.57 per cent in May. Protein rich items, like meat, fish, eggs, milk saw a marginal decline in comparison to May.

Inflation in fuel and light bas- ket was 2.92 per cent in June as against 2.94 per cent in the previous month. The Ministry of Statistics and Programme Implementation collects data from selected towns and villages to calculate CPI-based retail inflation.

In its bi-monthly policy released last month, Reserve Bank of India (RBI) had maintained status quo in key policy rate citing higher upside risks to ‘inflation trajectory’. The retail inflation in rural areas was at 6.2 per cent and in urban areas it was 5.26 per cent in June, showed the data.

The manufacturing sector that constitutes over 75 per cent of the index saw a growth of 0.7 per cent in May compared to 2.1 per cent a year ago.

– File COSTLY: Inflation in vegetables was up at 14.74 per cent against 10.77 per cent in May and in cereals and related products was 3.07 per cent compared to 2.59 per cent in the previous month.