Inflation based on Consumer Price Index, or retail inflation, for the month of December 2020 eased to 4.59%, from 6.93% in November, showed government data released on Tuesday. Retail inflation, an indicator of price rise has now come down for the second straight month, since peaking to a 7.61% in October last year – a high of more than six years. The figures for December also mean that retail inflation is now within the Reserve Bank of India’s mandated range of 4% to 6%.
The dip in inflation came primarily on the back of food inflation, which came down from 9.50% in November, to 3.41% in December, the data showed. However, prices of another important component, fuel and light, witnessed a slight uptick.
Meanwhile, India’s Index of Industrial Production contracted by 1.9% in November, another set of data released by the government showed. The figure had come at 2.1% in the corresponding month, last year.
The IIP data comes as a dampener to hopes of an economic revival, as factory output in the country had grown 3.6% in October, the highest since a countrywide lockdown was imposed due to the coronavirus lockdown in March last year. The industrial output had contracted in each of the months between March and August, before registering growth in September and October.
The November data for IIP showed that the manufacturing sector witnessed contraction of 1.7% as compared to growth of 3% a year ago, while the mining sector saw contraction of 7.3% in November 2020 as against growth of 1.9% in November 2019.