India’s factory output for the month of May was reported at 1.7 percent, a steep fall from 3.1 percent in April. In May, the government had revised the base year to 2011-12, replacing from 2004-05. The change in baseline for the IIP was much needed, in order to map economic activities more accurately and project realistic data.
Factory output a gauge of the index of industrial production (IIP) is the closest approximation for measuring economic activity in the country’s business landscape.
In the new series, manufacturing sector's weightage has been increased to 77.6 percent from 75.5 percent. Electricity's share in the index witnessed a decline to 7.9 percent from 10.3 percent and includes data renewable energy sources. Infrastructure or construction goods are the new addition in the index, with a substantial rise in the number of consumer durables and non-durables.
Manufacturing sector, fell 1.2 percent in May compared with 2.6 percent in April. Consumer durables fell at 4.5 percent in May, compared with 6 percent growth in April. Mining production fell 0.9 percent during May compared to April’s 4.2 percent.
Retail inflation hit a"historically low" level of 1.54 per cent in June on dip infood items like vegetables, pulses and milk products, whichmay prompt the Reserve Bank to go in for rate cut next month. "The number of 1.54 per cent is historically low andreflects the firm and ongoing consolidation of macro economicstability," Chief Economic Adviser Arvind Subramanian toldreporters.
"The last time we saw such inflation -- according toslightly different CPI (IW) -- was in 1999 and before that inAugust 1978," he added. The latest series of Consumer Price Index (CPI) wasintroduced in January 2012. Inflation in the previous month - May this year - was2.18 per cent. On the other hand, in June last year, it was 5.77 percent.
As per the data released by Central Statistics Office,inflation in the food basket as a whole contracted further to2.12 per cent last month as compared to (-)1.05 per cent in May. Vegetables inflation declined to 16.53 and that of pulsesand products to 21.92 per cent. There was decline in rate of price in eggs (-0.08 percent). On the other hand, the protein rich meat and fishturned costlier as the inflation spiked to 3.49 per cent inJune from 1.87 per cent in May.
Fruits too were dearer on monthly basis. The retail inflation in the fuel and light segment slowed to 4.54 per cent as compared to 5.46 in May. The Reserve Bank, which mainly factors in retailinflation to arrive at its monetary policy, is slated to meetin early August to announce the next bi-monthly policy rate. In its last policy in June, the central bank had kept the key lending rate unchanged citing risk to inflation.Â
(With inputs from PTI)
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