data released by national statistics office ,NSO) showed inflation as measured by the Consumer Price Index (CPI) on Friday rose to 4.5%, slightly higher than the previous month’s 4.4% and lower than the 7.6% recorded in October 2020. Urban inflation was 5% while rural inflation has come down to a 10-month low of 4.1 percent.
Core inflation (that is, below food and fuel) remained stable at 6.1 per cent in October, up from 5.9% in the previous month. Vegetable prices declined by 19.4% during the month, while oil and fats rose 33.5% during the month.
“Measures such as reduction in excise duty on fuels, imposition of stock limits and relaxation of basic import duty on edible oils are expected to contain domestic inflation despite rising prices of fuel and edible oils in global markets. Inflation in the services sector is likely to increase as immunizations continue to pick up momentum and mobility reaches pre-pandemic levels,” Care Ratings said in a note.
The index of industrial production is shown in separate data released by NSO (IIP) grew at an annualized 3.1% in September, down from 11.9% in the previous month and more than the 1% recorded in September 2020. The manufacturing sector grew 2.7% in September, compared to 0.4% in the year-ago month, while mining grew by 8.6%. , The power sector grew 0.9% in September, down from 4.9% recorded in September 2020. The capital goods sector, seen as a barometer of industrial activity, grew 1.3%, compared to a contraction of 1.2% in the year-ago month.
“India’s IIP growth decelerated to a 7-month low of 3.1% on September 21 with both an unfavorable base and a gradual contraction in activity. This month was a testament to supply disruptions weighing on production, thankfully the downside is capped by a pick-up in the consumer durables sector ahead of the festive season,” according to the research firm. quantico,
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