High food prices pushed up India’s annual retail inflation marginally to 5.77% in May, even as the country’s factory output rose marginally by 1.2% in June against a fall of 1.3% in the month before, official data showed yesterday.
As per data released by the Central Statistics Office (CSO) on Consumer Price Index (CPI), the annual food inflation for June moved up to 7.79% against 7.47% in May. In urban India, the annual food inflation was 8.16%, against 7.61% in rural areas.
What has also continued to hit people hard is high prices of pulses. The annual inflation for this category was as much as 26.86%. The similar annual inflation for vegetables was 14.74%, while that for sugar was 16.79%.
As regards the numbers on Index of Industrial Production (IIP), what should come as some respite is the marginal rise of 0.7% in the manufacturing index during the month under review. May had seen manufacturing index fall by 3.7%.
Otherwise, the other two major sub-indices – those for mining and electricity – also rose by 1.3% and 4.7% respectively. In April, though, the growth was lower at 1.1% for mining, but significantly higher at 14.6% for electricity.
“In terms of industries, 14 out of the 22 industry groups in the manufacturing sector have shown a positive growth during the month of May as compared to the corresponding month of the previous year,” an official statement said.
In the past six months, the general index has taken a drop on three occasions. October was the last month when there was a significant growth, with the general index rising by 9.87%, surprising stakeholders.
Among the six big industry groups, the growth rates were 3.9% in Basic goods, (-)12.4% in capital goods and 3.6% in intermediate goods 6% in consumer durables (-)2.2% in consumer non-durables and 1.1% in overall consumer goods.
As regards inflation, data also showed some major regional biases. The overall annual inflation rate was as high as 8.45% in Orisha, it was distinctly lower at 3.63% in Himachal Pradesh.
In terms of rural areas, Gujarat had the higher annual inflation of 8.91%, while the lowest was 3.25% in Assam. Among the urban areas, Telangana topped with 7.83%, even as the lowest was 2.91% in Jammu and Kashmir.
Reacting to factory output numbers, Assocham said as one month of decline is followed by another month of decline, the revival is fragile. The chamber asked policymakers to particularly address the structural issues, like mounting bank losses and limited availability of capital. In a similar vein, Ficci said the slow growth in manufacturing remains a concern. “Weak consumer and investment demand points to the fact that recovery is going to be slow in manufacturing and the need for addressing the more deep rooted structural issues.”