Retail inflation eased slightly to 6.26 per cent in June but stayed above the RBI’s tolerance range (2-6 per cent) for the second straight month, the government data released on Monday showed. It was 6.3 per cent in May. 

Inflation based on Consumer Price Index (CPI) remained elevated due to soaring fuel prices and costlier items in the food basket. Food inflation in June accelerated to 5.15 per cent from 5.01 per cent in May. 

Within the food items, the rate of fall in vegetables prices was at (-) 0.7 per cent in June as against (-) 1.92 per cent in the previous month. Meanwhile, the inflation rate in food and beverages was at 5.58 per cent. Inflation in fuel and light category stayed high at 12.68 per cent during the month as against 11.58 in the previous month. The minutes of RBI’s June policy meeting showed that while it continued to focus on growth, the Monetary Policy Committee (MPC) would remain watchful on inflation. 

Meanwhile, industrial output for May rose by 29.3 per cent due to a low-base effect when compared with the figures of the year-ago month, according to the data released by the Ministry of Statistics and Programme Implementation (MoSPI). The factory output, as measured by the Index of Industrial Production (IIP) had contracted by 33.4 per cent in the same period last year as Coronavirus-led lockdown had wiped out economic activity. 

Almost all the sectors under the IIP category registered sharp growth in May again due to the low-base effect. Manufacturing sector output, which accounts for more than three-fourths of the entire index, registered growth of 34.5 per cent as against de-growth of (-) 37.8 per cent in the year-ago period. Similarly, mining activity, which has a weight of over 14 per cent in the overall index, saw 23.3 per cent growth compared to a 20.4 per cent contraction in the same month last year. Electricity generation growth stood at 7.5 per cent in May as against a fall of (-) 14.9 per cent in the year-ago month.