Ahead of Narendra Modi-led Government's final full Budget, country witnessed a mixed bag of news as industrial output brought cheers and the retail inflation brought tears for its citizens.
Driven by rising food prices and higher payout for Government employees, December month's retail inflation soared above the central bank's inflation target to 5.21 per cent as food items are set to become more expensive.
Meanwhile, factory output as measured by the Index of Industrial Production or IIP jumped up to a 25-month high of 8.4 per cent in November, showing signs of economic revival of the country, according to the Government data released by the Central Statistics Office (CSO) on Friday.
Based on consumer price index or CPI, the retail inflation was 4.88 per cent in November, while it was 3.41 per cent in December 2016. The Reserve Bank of India has been asked by the Government to keep inflation at 4 per cent, plus or minus 2 per cent, and its rise beyond the comfort zone will put pressure on the central bank not to cut interest rate or repo rate.
As per the data, inflation for the food basket increased to 4.96 per cent in December from 4.42 per cent in the preceding month.
“The data revealed that eggs, vegetables and fruits became costlier, while inflation moderated in case of cereals and pulses,” it said.
As far as industrial output is concerned, IIP zoomed to a 17-month high of 8.4 per cent in November 2017 on the back of robust performance of manufacturing and capital goods sectors. The factory output grew 5.1 per cent in November 2016, as per the Government data.
The previous high was recorded at 8.9 per cent in June, 2016. Meanwhile, the IIP growth for October 2017 has been revised downwards to 2 per cent from the provisional estimates of 2.2 released last month.
While analysing the reasons of growth, the data revealed that manufacturing sector, which constitutes 77.63 per cent of the IIP, recorded an impressive growth of 10.2 per cent in November as compared to 4 per cent a year ago.
The industry group — manufacture of pharmaceuticals, medicinal, chemical and botanical products — have shown the highest positive growth of 39.5 per cent, followed by 29.1 per cent in computer, electronic and optical products and 22.6 per cent in manufacture of other transport equipment.
Besides, capital goods output, which is a barometer of investment, grew by 9.4 per cent in November as against 5.3 per cent a year ago. Consumer non-durables, which are mainly fast moving consumer goods (FMCG), showed an output growth of 23.1 per cent as against 3.3 per cent in November 2016.
In negative zones, the mining sector production growth, however, slowed to 1.1 per cent from 8.1 per cent a year ago.
Electricity generation also slowed to 3.9 per cent in November from 9.5 per cent in the corresponding month a year ago. Production growth of consumer durables, mainly white goods like TVs, refrigerators and washing machines, also slowed to 2.5 per cent from 6.8 per cent.
As per use-based classification, the growth rates in November 2017 are 3.2 per cent in primary goods, 5.5 per cent in intermediate goods and 13.5 per cent in infrastructure/ construction goods.
In terms of industries, 15 of the 23 industry groups in the manufacturing sector have shown positive growth during November 2017 as compared to the same month a year ago.