India’s retail inflation eased to 4.29 per cent in the of April on decline in food prices. CPI for April is the lowest in three months, compared with 5.52 percent in March and is well within the RBI Monetary Policy Committee’s medium-term inflation target range of 4 (+/-2 per cent), official data showed on May 12.

Note that this is the fifth consecutive month that CPI inflation is within the MPC’s target range. On March 31, the Centre gave the MPC an unchanged inflation target for 2021-22 to 2025-26. Data by the National Statistical Office shows that Consumer Food Price Index (CFPI) inflation dropped to 2.02 percent in April from 4.87 percent in March.

The month-on-month fall in the food basket was led by the softening of vegetable prices which fell 14.18 per cent in April, while cereals and products slipped 2.96 per cent, the data showed. Sugar and confectionery items too fell 5.99 per cent.

On the other hand, prices of oils and fats rose a whopping 25.91 per cent, while that of meat and fish rose 16.68 per cent. Non-alcoholic beverages gained 15.20 per cent while pulses and products segment also witnessed a rise of 7.51 per cent and egg prices too rose 10.55 per cent.

Index of Industrial Production (IIP)

Separately, the country’s factory output, measured in terms of the Index of Industrial Production (IIP), witnessed a 22.4 per cent growth in March on low base effect.

According to IIP data, the manufacturing sector output surged 25.8 percent in the month of March while mining output climbed 6.1 percent and power generation increased by 22.5 percent. The IIP had shrunk by 18.7 percent in March 2020.

During 2020-21, IIP contracted 8.6 percent compared to 0.8 percent contraction in 2019-20. Industrial production has been hit due to the COVID-19 pandemic since March last year when it contracted by 18.7 percent. The IIP had registered a growth of 5.2 percent in February last year