India’s Consumer Price Inflation rose to 3.36% in August, as against 2.36% in July 2017, data released by the Central Statistics Office showed on Tuesday. Meanwhile, the Index of Industrial Production grew by 1.2% in July, after falling to -0.2% in June, reported Mint. The publication attributed the low increase in manufacturing output to the continuing influence of the Goods and Services Tax, which had disrupted production activity.
India’s Gross Domestic Product growth slowed to 5.7% in the first quarter of 2017 from 7.9% in the corresponding period last year. A number of sectors, including manufacturing, electricity and construction, saw a decline in growth, which pulled the overall figure down in the April-June quarter.
The Reserve Bank of India had on August 2 cut its benchmark policy rates by 25 basis points to 6% from 6.25%, in order to reinvigorate private investment, remove infrastructure bottlenecks and provide a major thrust to the Pradhan Mantri Awas Yojana for people’s housing needs. “If states choose to implement salary and allowance increases similar to the centre in the current financial year, headline inflation could rise by an additional estimated 100 basis points above the baseline over 18-24 months,” Mint quoted the RBI as saying said. The bank added that prices of vegetables and animal proteins could rise in the coming months.