India's Industrial Output Reaches 16-Month High

New Delhi: Showing the resilience of Indian economy, the country's industrial output growth stood at a 16-month high of 11.7 per cent in October 2023, while the headline retail inflation, based on the Consumer Price Index or CPI in November 2023, increased to 5.55 per cent, according to two latest government data released separately on Tuesday.

Despite the spike in the retail inflation, it stayed within the Reserve Bank of India's (RBI) tolerance band of 2-6 per cent for the third month in a row in the month of November. However, it has now been above the medium-term target of 4 per cent for 50 consecutive months.

As per the data, the retail inflation was recorded at 4.87 per cent in October, which was the lowest level in five months. "Till October, the retail inflation rate had declined for the second consecutive month to a five-month low. Rural inflation was 5.85 per cent in November as against 5.12 per cent in October. Food inflation came in at 8.70 per cent for November, as against 6.61 per cent in October," the data showed.

However, Reserve Bank of India (RBI) governor Shaktikanta Das in his recent Monetary Policy Committee (MPC) announcement had said that the inflation figures may show an uptick in November and December owing to food output pressures. The central bank  had retained the retail inflation projection for the current financial year at 5.4 per cent.

"Taking into account these factors and on the assumption of normal monsoons, CPI inflation is projected at 5.4 per cent for 2023-24, with Q3 at 5.6 per cent and Q4 at 5.2 per cent. The ongoing rabi sowing progress for key crops like wheat, spices and pulses needs to be closely monitored," Das had said.

Meanwhile,  the quick estimates of index of industrial production or IIP growth came a 16-month high of 11.7 per cent in October, as against -4.1 per cent a year ago in the same month. "The output growth has been attributed due to the good performance in manufacturing, mining and electricity sectors. The mining production rose 13.1 per cent during the month under review, while power output rose 20.4 per cent. The IIP grew by 6.9 per cent in April-October 2023 compared to 5.3 per cent growth a year ago," the data showed.

As per Use-based classification, the indices stand at 146.1 for primary goods, 106.9 for capital goods, 157.8 for intermediate goods and 173.9 for infrastructure/ construction goods for the month of October 2023. "Further, the indices for consumer durables and consumer non-durables stand at 123.0 and 141.5 respectively for the month of October 2023," it showed.