CPI inflation falls to record levels, IIP at 3-month low: Will RBI cut rates?

Pressure mounts on central bank to cut rates; food deflation persists amid farmer distress

Growth in industrial production fell to a three-month low in May while consumer price index (CPI)-based inflation declined below a stipulated floor of 2 per cent in June, providing the Reserve Bank of India leeway to cut the policy interest rate in August. Pulled down by capital goods, consumer durables and manufacturing, and mining, the index of industrial production expanded 1.7 per cent in May, lower than the revised 2.8 per cent rate in April. CPI inflation was down to a record low of 1.5 per cent in June from 2.2 per cent in the previous month.

Food items continued