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Retail inflation eases to 4.35% in September; IIP grows 11.9% in August – Times of India

NEW DELHI: Retail inflation based on consumer price index (CPI) for the month of September eased to 4.35 per cent as against 5.3 per cent recorded in August, data released by government showed on Tuesday.
The moderation in inflation figure is mainly on account of moderating food prices that offset a surge in the cost of crude oil and fuel.
The inflation number stayed within the Reserve Bank of India’s (RBI) comfort zone for the third straight month.
The RBI mainly factors in the retail inflation while arriving at its bi-monthly monetary policy.
Reserve Bank’s monetary policy committee (MPC) has been tasked by the government to tame retail inflation based on consumer price index (CPI) at 4 per cent (+,-2 per cent).
RBI’s projection on inflation
In its October bi-monthly monetary policy meet, the Reserve Bank of India (RBI) projected substantial softening in retail inflation in the near term on the back of easing food prices and favourable base effect.
Accordingly, it projected CPI-based inflation to be at 5.3 per cent for 2021-22 with risks evenly balanced.
This is lower than 5.7 per cent inflation projected in its August policy meet.
On a quarterly basis, the CPI for Q2 has been projected at 5.1 per cent: Q3 at 4.5 per cent and Q4 at 5.8 per cent. CPI inflation for Q1:2022-23 is projected at 5.2 per cent.
What RBI governor said
Headline inflation continues to be significantly influenced by very high inflation in select items such as edible oils, petrol and diesel, LPG and medicines, central bank governor Shaktikanta Das had said while announcing the policy outcome.
“The CPI headline momentum is moderating with the easing of food prices which, combined with favourable base effects, could bring about a substantial softening in inflation in the near-term,” Das had said.
According to him, improvement in monsoon in September, the expected higher kharif production, adequate buffer stock of foodgrains and lower seasonal pickup in vegetable prices are likely to keep food price pressures muted.
IIP up nearly 12% in August
In another set of data released by the government, industrial production grew 11.9 per cent in August mainly due to a low-base effect and good performance by manufacturing, mining and power sectors that surpassed the pre-Covid level.
The manufacturing sector, which constitutes 77.63 per cent of the Index of Industrial Production (IIP), grew 9.7 per cent in August, according to the data released by the National Statistical Office (NSO).
The mining sector output rose 23.6 per cent in August, while power generation increased 16 per cent.
The data showed that industrial production recovered and surpassed the pre-pandemic level of August 2019.
(With inputs from agencies)