Wednesday brought double delight for the economy with the retail inflation dipping to a record low of 5.52 per cent in October and factory output surging by 2.5 per cent in September.
Continuing its downward trend, Consumer Price Index-based inflation hit a new low of 5.52 per cent in October on softening prices of food items. This is the lowest since January 2012 when the new series of data for computing CPI was introduced.
Overall food and beverages inflation was 5.68 per cent in October compared to 7.67 per cent in the previous month.
This has revived expectations of a rate cut by the Reserve Bank of India, which considers CPI-based inflation its monetary policy anchor.
Powering up Showing signs of recovery, industrial production grew 2.5 per cent in September. The index for industrial production comes with a lag of a month.
Growth in electricity generation and manufacturing pushed up the IIP. The power sector growth was 3.9 per cent while manufacturing grew at 2.5 per cent, a Ministry of Statistics and Programme Implementation statement said. Manufacturing accounts for a weight of over 75 per cent in the index and the power sector for 10.32 per cent.
The mining sector, which accounts 14.6 per cent in the IIP, had a relatively slower growth at 2.5 per cent.
“The upturn in industrial production underpins the perception that the growth momentum is positive for industry and the economy is showing signs of revival based on the ‘feel good’ factor and positive investor sentiment,” said Chandrajit Banerjee, Director-General of CII.
According to use-based classification, basic goods grew 5.1 per cent in September 2014, over the same month last year, while capital goods and intermediate goods posted an increase of 11.6 per cent and 1.8 per cent respectively. Consumer durables contracted by 11.3 per cent while consumer non-durables grew 1.5 per cent.