India’s retail inflation rose marginally to 9.75 per cent in October, from 9.73 per cent in September while indicating sustained sluggishness in the economy, Index of Industrial Production (IIP) contracted by 0.4 per cent in September, as against growth of 2.5 per cent in the same month last year.
India’s exports also contracted by 1.63 per cent to $23.2 billion in October on year-on-year basis, for the six month in a row, mainly due to the slowdown in demand from the US and european markets.
Inflation based on the consumer price index rose on account of a sharp increase in prices of sugar, pulses and vegetables, government data showed on Monday.
Sugar became costlier by 19.61 per cent year-on-year. Prices of pulses jumped by 14.89 per cent and vegetables became costlier by 10.74 per cent. The CPI-based inflation for rural areas increased 9.98 per cent in October as compared to 9.79 per cent in the previous month. However, for urban areas consumer price inflation moderated to 9.46 per cent in October as compared to 9.72 per cent in the previous month. Inflation has remained at an elevated level despite a tight monetary policy adopted by the Reserve Bank of India.
In the second quarter review of monetary policy for 2012-13 announced at the end of last month, the RBI kept key lending and borrowing rates unchanged, saying inflation remained sticky and might rise further in the third quarter of the current financial year.
The RBI has revised upward its projection for wholesale price index based inflation to 7.5 per cent from its earlier estimate of 7 per cent announced in July.
The wholesale price index based inflation had risen to 10 month high of 7.81 per cent in September, according to the latest official figures.
Industrial output dragged down by deceleration in production in manufacturing, capital and consumer durables sectors, government data showed on Monday.
Eight core industries that have a combined weight of 37.90 per cent in the index of industrial production (IIP) logged a negative 0.4 per cent growth year-on-year in September. In the corresponding month of 2011, these industries had registered a growth of 2.5 per cent.
The eight core industries are coal, crude oil, natural gas, petroleum refinery products, fertilisers, steel, cement and electricity. These had logged a 5.1 per cent growth in August, led by double-digit growth in coal and petroleum refinery products.
A benchmark index for Indian equities markets closed flat Monday on disappointing industrial production data. The Sensex, which opened at 18,691.02 points, closed at 18,670.34 points, down 0.07 percent or 13.34 points from its previous close at 18,683.68 points.
From Gulf Today