A sharp spurt in food and fuel prices pushed India`s annual retail inflation in November over the RBI`s median level of 4%, even as factory output growth in October contracted to 2.2% official data showed on Tuesday.

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According to the data from the Ministry of Statistics & Programme Implementation, consumer price index (CPI) inflation in November rose to 4.88% from 3.58% reported for October.

The rate of retail food inflation during November stood at 4.41% on a year-on-year basis, as compared 1.90% the previous month owing to a rise in the prices of items like vegetables, milk-based products, cereals, meat and fish.

The "fuel and light` segment`s inflation rate accelerated to 7.92% in November.

Vegetables during the month became costlier by a staggering 22.48%, while prices of milk-based products rose by 4.52%.

Meanwhile, data on Tuesday also showed the country`s factory output growth slipped to 2.2% in October, from 4.14% in September, mainly on account of a deceleration in manufacturing and mining outputs.

As per the Index of Industrial Production (IIP) data released by the Central Statistics Office, on a year-on-year basis, the manufacturing sector expanded by 2.5%, whereas mining output was a mere 0.2% and electricity generation expanded by 3.2%.

The Reserve Bank of India (RBI) has a medium-term target for consumer price index (CPI) inflation of 4% with a range band of 2% either way. At its fifth bi-monthly monetary policy review of the fiscal earlier the month, the RBI kept its key lending rate unchanged at 6% for the third time in a row, citing concerns over the rising trajectory of inflation.

Commenting on the IIP data, industry chamber Assocham said manufacturing activity slowed in October as inflows of new orders stagnated "even as negative effects from implementation of Goods and Services Tax (GST) continued to dampen demand levels."

"Demand side scenario for intermediate and basic goods is not encouraging and needs attention to identify factors and remedial measures for revival," Assocham Secretary General D.S. Rawat said in a statement here.

"We at Assocham expect that domestic conditions for growth will improve gradually, mainly driven by consumption demand, which is expected to strengthen with implementation of the Seventh Pay Commission and government stimulus package to revive the economy," he added.