New Delhi. Retail inflation fell to 3.54 percent in July due to softening of food prices and comparative base effect. This information was given in the official data released on Monday. This is the first time in nearly five years that inflation has come below the Reserve Bank of India’s target of four percent. Inflation has remained below six percent since September 2023.
The Consumer Price Index based retail inflation was 5.08 percent in June this year. Whereas it was 7.44 percent in July last year. According to the data of the National Statistical Office (NSO), inflation of food items was 5.42 percent in July. It was 9.36 percent in June. Earlier, retail inflation was below four percent in September 2019.
The government has given the responsibility to the Reserve Bank to keep the retail inflation at 4 percent with a variation of 2 percent. According to the data, the annual inflation of milk and milk products was 2.99 percent and in the case of fruits it was 3.84 percent. At the same time, there was a decline of 1.43 percent in spices while oil and fat declined by 1.17 percent. The NSO said that the rate of price increase of vegetables was 6.83 percent and that of cereals and cereals and products was 8.14 percent. Inflation rate in the fuel and light segment declined by 5.48 percent.
The NSO data also showed that inflation in rural India was higher than the national average at 4.1 per cent, while in urban areas it was 2.98 per cent. Among the states, Bihar had the highest inflation at 5.87 per cent and Jharkhand had the lowest at 1.72 per cent. Commenting on the data, ICRA Chief Economist Aditi Nair said that the Consumer Price Index-based inflation in July saw an expected softening, mainly due to the base effect. This is slightly lower than ICRA’s estimate for this month. He said that the forecast of above normal rainfall during August-September 2024 is good for kharif crops, although heavy rains and floods in some states may damage standing crops.
Industrial production grew 4.2 percent in June, a five-month low
The country’s industrial production (IIP) fell to a five-month low of 4.2 percent in June 2024 due to poor performance of the manufacturing sector. However, the power and mining sectors continue to perform well. According to official data released on Monday, the Index of Industrial Production, which measures industrial activity, grew at a rate of 4.2 percent in June this year, while it was 4 percent in the same period a year ago.
However, on a monthly basis, the performance of IIP has been the lowest in the last five months. This year it grew by 6.2 percent in May, five percent in April, 5.5 percent in March and 5.6 percent in February. With this, IIP growth in the April-June period of the current financial year was 5.2 percent as against 4.7 percent in the same period of the previous financial year. The Ministry of Statistics and Program Implementation said in a statement that the growth of mining production increased to 10.3 percent in June, while in the same month a year ago it had increased by 7.6 percent.
However, the growth rate of the manufacturing sector, which has an important place in industrial production, declined to 2.6 percent in June, while it had grown by 3.5 percent in the same month a year ago. Electricity generation grew by 8.6 percent in the month under review, while the growth of this sector was 4.2 percent in the same month last year.
According to the use-based classification, the growth of the capital goods segment declined to 2.4 percent in June 2024 as against a growth of 2.9 percent in the same period a year ago. The production of durable consumer goods grew by 8.6 percent in June this year as against a decline of 6.8 percent in June 2023.
The production of non-durable consumer goods declined by 1.4 per cent in the month under review, while it had increased by 0.5 per cent in May 2023. According to the data, the growth rate of infrastructure and construction goods declined to 4.4 per cent in June from 13.3 per cent in the same period a year ago. The data also showed that the production of primary goods registered a growth of 6.3 per cent in June this year, as against 5.3 per cent a year ago. The intermediate goods segment grew by 3.1 per cent in the month under review, which is lower than the figure of 5.2 per cent recorded a year ago.