Production dips, inflation shoots

Industrial production contracts, inflation too highest since May 2014
IIP growth contracts 0.3% in Dec 2019, inflation rises to 7.59% in Jan 2020

New Delhi: The country’s factory output, which is measured in terms of Index of Industrial Production (IIP) witnessed a contraction of 0.3 per cent on-year to 133.5 during the month of December 2019, according to the latest data released by the Ministry of Statistics & Programme Implementation (MoSPI).
The IIP had grown by 2.5 per cent in December 2018.

The industrial growth during the period of April-December 2019 rose 0.5 per cent from the corresponding period year ago. The IIP growth was 4.7 per cent during the same period last year, the data showed.

As per the data, the manufacturing sector output declined by 1.2 per cent on-year to 134.2, and the electricity generation slipped by 0.1 per cent to 150.2. Mining sector output, however, grew by 5.4 per cent on-year to 120.6.
Retail inflation (CPI) spikes 7.59 per cent.

The retail inflation, which is measured by the Consumer Price Index (CPI) climbed to a 68-month high after it rose 7.59 per cent in the month of January 2020, a separate data by MoSPI showed.

The CPI was 7.35 per cent in December 2019 and 1.97 per cent in January last year.

For the second month in a row, the retail inflation data exceeded the Reserve Bank of India’s (RBI) upper margin of 6 per cent. The government has mandated the central bank to keep inflation within the range of 4 per cent with a margin of 2 per cent on either side.

Prior to this high, retail inflation had witnessed a spike of 8.33 per cent in May 2014.

The Consumer Food Price Index (CFPI) or the inflation in the food basket rose to 13.63 per cent in January 2020 against 14.19 per cent in the preceding month.

In January 2019, the CFPI saw a negative growth of (-)2.24 per cent, the MoSPI data showed.

In its bi-monthly monetary policy meeting held last week, the RBI had kept its key interest rates unchanged while maintaining an “accommodative stance”.

The retail inflation has risen primarily due to a spike in vegetable prices that saw a 50.19 per cent year-on-year rise in January 2020.

This apart, the pulses and products segment saw a rise of 16.71 per cent, while that of meat and fish rose 10.50 per cent and egg prices gained 10.41 per cent.

Capitalisation of 3 Public Sector Insurance Companies
The Union Cabinet on Wednesday approved the capitalisation of three Public Sector Insurance Companies– National General Insurance, United India Insurance and Oriental Insurance Company with Rs 2,500 crore.

LPG cylinder prices hiked by over Rs 100
The state-run Indian Oil on Wednesday raised the prices of non-subsidised liquefied petroleum gas (LPG) cylinders across metro cities in the country. The new rates are applicable from Wednesday. The last price hike of non-subsidised liquefied petroleum gas (LPG) happened on January 1, 2020. As it stands, a 14.2 kg Indane gas cylinder will now cost Rs 858.50 which was previously priced at Rs 714, recording a spike of Rs 144.50.