With sharp rise of food prices, starting from fruit and vegetables to cereals and products, retail inflation soared to 5.39 per cent in April from 4.83 per cent in March, while the country’s factory output growth turned flat in March, marginally plunging to 0.1 per cent due to poor performance of manufacturing and mining sectors, according to the data released by the Ministry of Statistics and Programme Implementation (MoSPI) on Thursday.
The annual rate of price rise, based on consumer price index, in the previous month stood at 4.83 per cent, the lowest in six months. In April 2015, the rate of price rise was at 4.87 per cent. Such movement of inflation may play a spoilsport to any further interest rate cut by Reserve Bank of India (RBI), even as a sharp plunge in industrial output may still add to clamour for easing of monetary policy.
As for inflation, food prices rose to 6.32 per cent in April against 5.21 per cent in March. The rate of price rise in vegetables quickened to 4.82 per cent while fruits turned costlier by 1.66 per cent in April. Generally, prices of fruits, vegetables and prepared food rise during summer season due to less availability. Inflation in cereals and products remained flat at 2.43 per cent, but rose for ‘meat and fish’ category at 8.07 per cent and also for oil and fats at 5.04 per cent.
For the country’s industrial production, dashing hopes of recovery the growth plunged to 0.1 per cent in March due to poor performance of manufacturing and mining sectors coupled with sharp decline in output of capital goods. Industry had grown by 2.5 per cent in March 2015. The output data showed marginally down due to poor performance of manufacturing and mining sectors coupled with sharp decline in output of capital goods.
The IIP had registered a growth of about 2 per cent in February this year. For the entire 2015-16 fiscal, the factory output grew at 2.4 per cent, down from 2.8 per cent in the previous fiscal.
However, India Inc is hopeful that the Government should addresses the issues related to manufacturing sector with institutional mechanism. Responding the IIP data, FICCI President Harshavardhan Neotia said, “The growth in manufacturing may take more time to pick up. It’s therefore important that the Government holistically addresses the issues related to manufacturing by a high level institutional mechanism involving all departments and States.”
The manufacturing sector, that accounts for over 75 per cent of the index, declined by 1.2 per cent in March against a growth of 2.7 per cent in same month a year ago. The sector has not done well in 2015-16 as it grew at meager rate of 2 per cent compared to 2.3 per cent in previous year. Also, the mining sector output too contracted by 0.1 per cent in March compared to a growth of 1.2 a year ago. In 2015-16, the sector grew at 2.2 per cent up from 1.1 per cent in previous fiscal.