IIP sees mild uptick, retail inflation inches up

Retail inflation inches up, but declines in rural areas

Industrial production, measured through the Index of Industrial Production (IIP), in volume terms continued to show signs of weakness even as it recovered to grow 1.2 per cent in May, after a 0.8-per cent contraction in the previous month, data released on Tuesday showed.

However, the Consumer Price Index (CPI)-based inflation revealed a contrasting picture in urban and rural areas in June.

CPI inflation inched up to a 22-month high of 5.77 per cent in June, from 5.76 per cent in May. However, inflation in rural areas declined from 6.45 to 6.20 per cent, while urban areas witnessed a rise from 4.89 to 5.26 per cent. Food inflation, too, reduced to 7.61 per cent from 7.67 per cent in rural areas, but rose to 8.16 per cent from 7.24 per cent in urban areas. Combined food inflation rose to 7.79 per cent from 7.47 per cent in this period.

Lacklustre industrial growth and variable inflation would provide mixed signals to the Reserve Bank of India for its policy review next month.

Growth in electricity generation fell from 14.5 to 4.7 per cent. Manufacturing recovered to grow 0.7 per cent in May against 3.7-per cent fall of in April. However, not all segments of factory production grew. Capital goods production contracted for the seventh month, falling 12.4 per cent, though it came down from 25 per cent in April. Fast moving consumer goods also saw a decline in production by 2.2 per cent.