Industrial output contracts by 3.8% in October; November CPI at 5.54%

Industrial production shrank by 3.8 per cent in October, mainly due to poor performance by power, mining and manufacturing sectors, according to official data released on Thursday. Factory output, as measured in terms of Index of Industrial Production (IIP), had expanded 8.4 per cent in October 2018.

Slowdown in manufacturing sector

A slowdown was witnessed in the manufacturing sector, which declined by 2.1 per cent in October as compared to 8.2 per cent growth a year ago. Power generation dipped sharply by 12.2 per cent in October, compared to 10.8 per cent growth in the year-ago period. Mining output too fell 8 per cent in the month under review as against 7.3 per cent growth in the corresponding period last fiscal.

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Retail inflation rises

Meanwhile, retail inflation rose significantly to an over three-year high of 5.54 per cent in November, mainly on account of higher food prices. The inflation based on the Consumer Price Index (CPI) was 4.62 per cent in October, and 2.33 per cent in November 2018. As per the data released by the National Statistical Office (NSO), the inflation in the food rose to 10.01 per cent. This compares with 7.89 per cent October and (-) 2.61 per cent in the year ago-month. The previous high of CPI was 6.07 in July 2016. The Reserve Bank of India has been mandated by the government to contain inflation in the range of 4 per cent, with a margin of 2 per cent on either side.

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