India's retail inflation rose to 10.09 percent in October due to higher food prices, while industrial output grew at a sluggish two percent in September, government data showed Tuesday, giving indication of continued woes in the Indian economy.
The Consumer Price Index (CPI) based inflation rose to 10.09 percent in October as compared to 9.84 percent recorded in the previous month.
Factory output measured in terms of the Index of Industrial Production (IIP) grew at a sluggish two percent in September as compared to 0.43 percent in August, according to data released by the Central Statistics Office (CSO) here.
Reacting on the monthly figure, Chairman of Prime Minister's Economic Advisory Council C. Rangarajan said rising of retail inflation into double-digit was a disturbing sign.
"CPI at over 10 percent is a disturbing sign. Growth in CPI is due to a rise in food inflation," Rangarajan said.
The cumulative growth of the industrial production for April-September period stands at 0.4 percent year-on-year, according data released by the Central Statistics Office (CSO) here.
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Manufacturing sector grew at a sluggish 0.6 percent. Mining output increased by 3.3 percent and electricity production rose by 12.9 percent in September.
As per "use-based" classification, basic goods sector posted a growth of 5.4 percent, intermediate goods 4.1 percent, and consumer non-durables 11.3 percent.
However, capital goods continue to be a big drag. Capital goods output slumped by 6.8 percent during the month under review, while consumer durables production fell by 10,8 percent.
On retail inflation front, prices of vegetables were up by 45.67 percent, cereals and products have gone up by 12.01 percent, egg, fish and meat went up by 11.78 percent and prices of food and beverages were up by 12.56 percent, the data showed.
"Both the industrial output and retail inflation prints are disappointing. The uptick in CPI inflation during October 2013 to 10.1 percent a seven month high can be attributed to both elevated food as well as core CPI inflation," said Bhupali Gursale, an economist at Angel Broking.
"At the same time, adding to the RBI's dilemma, IIP growth for September at a modest 2 percent has come in below market expectations largely owing to negative surprise from the manufacturing sector," she said.
Commenting on the latest data, FICCI president Naina Lal Kidwai said: "The positive growth in manufacturing shows some revival in manufacturing activity. However, we expect the growth in manufacturing to be subdued in the coming months also as a result of the current slowdown in domestic demand and a lack of investor optimism given the usual uncertainty that builds around elections."
Director general of Confederation of Indian Industry (CII) Chandrajit Banerjee said the modest increase in IIP for the month of September is not reason enough for us to conclude that industry has turned the corner and is on a path to recovery.
"A disaggregated analysis shows that while growth in the capital goods sector is still fragile, there are indications of an upturn in the production in intermediate goods," Banerjee said.
"However, the performance of consumer goods - particularly that of consumer durables, continues to be a cause for concern as it indicates very poor demand. And the robust performance of the electricity sector, evident this month would have to be sustained with the mining sector improving its performance," he added.