Retail inflation, measured by the Consumer Price Index (CPI), eased to 4.06 per cent in January 2021. Separately, the country’s factory output, measured in terms of the Index of Industrial Production (IIP), witnessed growth of 1 per cent in December 2020, according to two separate data released by the Ministry of Statistics and Programme Implementation.

The retail inflation during December 2020 was at 4.59 per cent. This is the second consecutive month that the CPI data has come within the Reserve Bank of India’s (RBI) upper margin of 6 per cent. The decline in retail inflation was mainly due to easing of food prices. The government has mandated the central bank to keep retail inflation within the range of 4 per cent with a margin of 2 per cent on either side.

IIP, in the meanwhile, witnessed growth of 1 per cent year on year to 135.9 during December 2020. The IIP had grown by 0.4 per cent in December 2019. The industrial growth so far in 2020-21 (April-December) has contracted -13.5 per cent, compared to a 0.3 per cent rise in the corresponding period a year ago.

The growth in IIP during December last year is primarily on account of electricity and manufacturing sectors. The mining sector saw a contraction of -4.8 per cent to 115.1 in December. However, the manufacturing sector witnessed growth of 1.6 per cent to 137.5, and the electricity sector rose 5.1 per cent to 158.0.