Consumer price inflation eases to 2.99% in April

Economists expect the RBI to keep its policy rate unchanged this year

India's industrial output grew at a robust 2.7 percent in March from 1.9 percent in February, mainly due to a revision in the base year to 2011-12, replacing the current base of 2004-05.

The annual rate of inflation in April previous year had declined to (-) 1.09 per cent.

The retail inflation based on the Consumer Price Index (CPI), as well as gross domestic product (GDP) data is also calculated on the base year of 2011-12.

As per the data based on the new base year, the manufacturing sector output slowed to 1.2 per cent in March, from 5 per cent in the same month of the previous fiscal.

The Central Statistics Office (CSO), which releases the CPI data, has revised upwards the March inflation to 3.89 per cent from the earlier estimate of 3.81 per cent.

The March IIP data showed that electricity generation went up by 6.2 per cent, while that for mining rose by 9.7 per cent.

For IIP growth calculations; products like gutka, pan masala, leather shoes, fans, tooth brush, pens, calculators, and colour TV picture tubes among 124 items will no longer be taken.

As per the old series (2004-05), IIP grew by 2.5 per cent in March and 0.7 per cent in 2016-17.

Wholesale inflation in the fuel and power segment was 18.52 per cent, while that of manufactured products was 2.66 per cent in April.

In the new series, manufacturing sector's weightage has been increased to 77.6 percent from 75.5 percent.

India's industrial output growth dipped in April, the latest sign that the rising cost of credit and inflation are slowing the economy, which may compel.

Mosambi, pomegranate, jack fruit, pear, cucumber and carrot are the new fruits and vegetables added to calculate wholesale inflation (WPI) in country as the government on Friday revised inflation and industrial growth (IIP) base year to make it more relevant to the changing times. In March, the two items recorded a deflation of 12.42 and 7.24%.

The Federation of Indian Chambers of Commerce and Industry (FICCI) on Friday welcomed the data on WPI and IIP.

The change in baseline for the IIP and WPI is expected to bring in more accuracy in mapping the level of economic activity and calculating other numbers like national accounts. Also, since there was criticism regarding inclusion of tax data in price deflators for national accounts, the removal of taxes from data will help compliance with global standards on price deflators used in national accounts, he said.

Ideally, they should move in the same range, as value addition at constant prices could address the price factors and broadly reflect physical growth.

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