Retail inflation rises to 5.11% in January under new base year
Led by better manufacturing performance, factory output grew 1.7 per cent in December 2014.
This was substantially higher than 0.1 per cent growth recorded in December 2013.
Manufacturing output — which enjoys a weightage of 75 per cent in the IIP — grew 2.1 per cent in December 2014 as against contraction of 1.1 per cent in same month in previous year.
However, factory output growth declined sequentially when compared with the revised November IIP growth number of 3.9 per cent. The November IIP growth has now been revised upwards to 3.9 per cent from 3.8 per cent earlier. While mining sector output contracted 3.2 per cent (2.6 per cent), electricity generation grew 4.8 per cent (7.5 per cent).
For the April-December 2014 period, the index of industrial production (IIP) grew 2.1 per cent (0.1 per cent).
New calculation
Retail inflation — based on consumer price index — inched up to 5.11 per cent in January 2015 under the new revised base year of 2012.
In December, retail inflation was 4.28 per cent (under the new base year after recalculation).
Higher food and vegetable prices led to this spike in retail inflation in January.
The CPI inflation in December 2014 was 5 per cent under the old base year of 2010. FICCI Secretary General Didar Singh said it is encouraging to see positive growth in manufacturing for the second consecutive month.
However, there is a need to stimulate investments in the manufacturing sector to sustain any growth. Lowering of interest rates by RBI is needed to boost consumer and investment sentiment.
industry upbeat
CII Director-General Chandrajit Banerjee said the mood in the industry is positive and investments have come back to the agenda of corporate board meetings,
“The pro active measures taken by the government in the last eight months have contributed to this.
“The RBI has also started the easing cycle and CII expects that the RBI would reduce interest rates by another 100 bps in the course of the year.”
