As economic activity picks up, inflation steady at 6.26%; industrial production grows over 29%

As the covid concerns are on the decline, the retail inflation remained steady at 6.26 per cent in June as compared to 6.30 per cent in the previous month, the Ministry of Statistics & Programme Implementation data released on Monday showed. 

For the second straight month, the inflation based on the Consumer Price Index (CPI), however, remained above the Reserve Bank’s comfort level. The RBI has been mandated by the government to keep retail inflation at 4 per cent with a margin of 2 per cent on either side. 

According to the data released by the National Statistical Office (NSO), Except rural, inflation in all other internal has grown in June as compared to May. While core inflation rate saw an improvement of 6.2 per cent as compared to 6.4 per cent in May.

Fuel and light inflation stood at 12.68 per cent as compared to 11.58 per cent month-on-month (MoM) basis, followed by cereals and pulses at 10.1 per cent in June as against 9.39 per cent in May 2021.

Despite negative growth, an easing in vegetable prices was visible as in June it reported a 0.7 per cent decline as compared to a 1.92 per cent fall in May. Similarly, clothing and footwear, housing, urban too reported marginally higher inflation in June as compared to previous month. 

On the other hand, India's industrial production grew 29.3 per cent in May 2021 versus negative 33.4 per cent in the same month a year ago, the official data of MOSPI showed on Monday. 

Industrial production has been hit due to the coronavirus pandemic since March last year when it had contracted 18.7 per cent. It shrank 57.3 per cent in April 2020 amid weak economic activities in the wake of the lockdown to curb the spread of coronavirus infections. 

According to the Index of Industrial Production (IIP) data, manufacturing sector output surged 34.5 per cent in May 2021 as compared to negative 37.8 per cent, while mining output climbed 23.3 per cent versus declined by 20.4 per cent in May 2020 and power generation increased 7.5 per cent in May.

Similarly, consumer durables almost grew 100 per cent, while capital goods grew over 85 per cent in May 2021 as compared to a decline in both internals in the same month a year ago. The IIP had registered a growth of 5.2 per cent in February last year.