A double whammy

Worsening inflation, factory output point to policy challenges

On Wednesday, two important sets of data emerged about the economy: The consumer price index-based inflation for March and the index for industrial production (IIP) for February. Retail inflation reached a five-month high at 3.8 per cent, inching up from 3.7 per cent in the month before, while the IIP contracted by 1.2 per cent immediately after growing by 3.3 per cent in January. The uptrend in inflation shows, yet again, how prescient the Reserve Bank of India’s (RBI’s) monetary policy committee was in February, when, much against market expectations, it ended the easy money policy, started in January 2015,