February IIP contracts 3.6%; retail inflation rises to 5.5% in March

India’s retail inflation rose to a four-month high of 5.52 per cent in March, mainly on account of higher food and fuel prices, according to the government data released on Monday. The consumer price index (CPI)-based inflation was 5.03 per cent in the previous month (February 2021) and was 5.91 per cent in the same month last year (March 2020).

Food inflation rose steeply to 4.94 percent in March, as compared to 3.87 percent in February.

Within the food items, the rate of fall in vegetables prices was at 4.83 per cent in March, as against 6.27 per cent in the previous month. Meanwhile, the inflation rate in Food and beverages was very high at 5.24 per cent.

Inflation in ‘fuel and light’ category remained elevated at 4.50 per cent during March compared to 3.53 per cent in February.

Meanwhile, the Index of Industrial Production (IIP) contracted 3.6 per cent for February 2021, according to the data released by the Ministry of Statistics and Programme Implementation (MoSPI).

The industrial output contraced by 1.6 per cent in the previous month (January 2021) and expanded to 4.5 per cent in February 2020.

The manufacturing sector output contraced by 3.7 per cent in February, while the mining output declined by 5.5 per cent. Meanwhile, the power generation grew by 0.1 per cent in February.

The union government in consultation with the Reserve Bank of India (RBI) kept the inflation target of the monetary policy framework unchanged at 2-6 per cent for the next five years, until the financial year 2025-26.

The Central bank kept the rates unchanged at 4 per cent in its latest monetary policy and the stance accommodative amid concerns that rising coronavirus cases could derail the nascent recovery.

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