Retail inflation, based on the consumer price index (CPI), stood at 7.01 per cent in June, above Reserve Bank of India’s (RBI’s) tolerance limit for the sixth straight month, government data showed on Tuesday. The inflation number was at 7.04 per cent in May.
Surging global commodity prices due to the Russia-Ukraine war and high crude oil prices have kept inflation above RBI’s 6 per cent upper tolerance range.
In June 2022, inflation in the food basket came at 7.75 per cent, compared to 7.97 per cent in the preceding month, as per the National Statistical Office (NSO) data.
The inflation figure in vegetables eased to 17.37 per cent during the month from 18.26 per cent in May, while for ‘pulses and products’ it slowed to (-) 1.02 per cent against (-)0.42 per cent.
The rate of price rise in ‘cereals and products’ moved up to 5.66 per cent, from 5.33 per cent in the preceding month. Inflation in the ‘fuel and light’ category rose to 10.39 per cent as against 9.54 per cent, while that for fruits increased to 3.10 per cent from 2.33 per cent.
RBI has raised interest rates by 90 basis points (bps) so far this year to 4.9 per cent and is set to add more in the coming months. RBI Governor Shaktikanta Das said that inflation may not fall within the top end of its mandated target band until December this year.
The Reserve Bank factors in the retail inflation print in its bi-monthly monetary policy. The government has tasked the central bank to ensure inflation remains at 4 per cent with a margin of 2 per cent on either side.
Another set of government data showed that India’s industrial production rose 19.6 per cent in May this year against a surge of 27.6 per cent in May 2021 on account of low base effect.
The manufacturing sector’s output, which comprises 77.63 per cent of the index of industrial production, grew 20.6 per cent in May 2022.
In May this year, the mining output climbed 10.9 per cent, and power generation jumped 23.5 per cent.