Lower food prices eased India’s November retail inflation rate to 2.33 percent from 3.38 percent in the previous month, while higher manufacturing boosted industrial output growth in October to 8.1 percent, an official data showed on Wednesday, even as India Inc. welcomed the double bonanza for the economy.
On a year-on-year (YoY) basis, the Consumer Price Index (CPI), or retail inflation, fall was even sharper as compared to 4.88 percent registered in November 2017.
Central Statistics Office (CSO) showed that the Consumer Food Price Index (CFPI) deflated further to (-) 2.61 percent in November from (-) 0.86 percent in October 2018.
Product-wise, prices of milk-based products, meat and fish rose during the month under review on a YoY basis.
In contrast, deflation in the cost of eggs, vegetables, pulses and sugar helped lower the overall food price index.
On a sub-category basis, vegetable prices reduced on YoY basis in November by (-) 15.59 percent.
“Pulses and products” became cheaper by (-) 9.22 percent and that of “sugar and confectionery” by (-) 9.02 percent.
Food and beverages during the month under consideration recorded a fall of (-) 1.69 percent over the same period last year.
Among non-food categories, the “fuel and light” segment’s inflation rate accelerated to 7.39 percent in November.
Higher production in the manufacturing sector, especially of capital goods and consumer durables, accelerated India’s industrial output growth to 8.1 percent in October from a rise of 4.46 percent in September and 1.8 percent during the corresponding period of the previous fiscal.
“The cumulative growth for the period April-October 2018 over the corresponding period of the previous year stands at 5.6 percent,” the ‘Quick Estimates’ of IIP released by the Ministry of Statistics and Programme Implementation showed.
On a YoY (year-on-year) basis, the manufacturing sector’s output expanded at 7.9 percent, while mining production edged-up by 7 percent and the sub-index of electricity generation increased by 10.8 percent.
The output of primary goods, which has the highest weightage of 34.04, grew by 6 percent. The output of intermediate goods, which has the second highest weightage, inched up by 1.8 percent.
Similarly, the output of consumer non-durables rose during October by 7.9 percent, and that of consumer durables by 17.6 percent.
Infrastructure or construction goods’ output increased by 8.7 percent and capital goods by 16.8 percent.
Commenting on the numbers, Confederation of Indian Industry (CII) Director General Chandrajit Banerjee said in a statement: “The impressive rise of industrial output, which has bounced back sharply to record a growth of 8.1 percent in October is noteworthy and augers well for the narrative of economic strengthening, going forward. The uptick in manufacturing growth also shows the second half has started off on a positive note.”
“High double digit growth in capital goods at 16.8 percent in October 2018 is an indication of strengthening investment demand in the economy. Demand in the economy, especially in rural India, is reviving as consumer durables grew at the rate of 17.6 percent in the month of October 2018.
“Going ahead, decline in international crude oil prices and stability in rupee scenario is expected to further strengthen the macro-economic environment in the economy,” said PHD Chamber President Rajeev Talwar.