NEW DELHI: Steadily rising fuel and food prices saw retail inflation hit a 15-month high of 4.88 per cent in November, while factory output for October slowed to a three-month low.
What drove factory output down was GST-related teething troubles.
Index of Industrial Production (IIP) slowed to 2.2 per cent, from 4.14 per cent in September and 4.5 per cent in August. In October, most major sectors grew at a muted rate.
According to data released by the Central Statistics Office, mining output was stagnant, while manufacturing and electricity grew at 2.47 per cent and 3.2 per cent, respectively.
The consumer goods sector even saw a sharp contraction in factory output, dropping 6.9 per cent -- the second consecutive month of decline.
Capital goods production, an indicator of investment, grew 6.8 per cent.
The numbers for cumulative industrial output for the April-October period also indicate that a lack of demand and uncertainty on tax rates under the GST regime has resulted in depressed factory output -- standing at a meagre 2.5 per cent compared to 5.5 per cent during the same period in 2016-17.
Meanwhile, data for consumer price inflation showed that price rise for November stood at 4.88 per cent – above the Reserve Bank’s median target of 4 per cent – due to firming global crude prices reflecting on Indian domestic fuel rates and rising food prices.
According to CSO data, fuel and light segment saw prices rise 7.92 per cent, against 6.36 in October, and vegetable prices rise by 22.48 per cent.
While pulses continued their deflationary trend, contracting by 23.53 per cent, overall food inflation still rose 4.42 per cent compared to 1.9 per cent in the previous month.
RBI’s Monetary Policy Committee had red-flagged risks to inflation during its policy review meeting last week, stating that the recent rise in international crude oil prices might sustain, especially due to the Organization of the Petroleum Exporting Countries’ decision to maintain production cuts through next year.
“In such a scenario, any adverse supply shock due to geopolitical developments could push up prices even further,” RBI had said.