Economy / Retail inflation eases to 4.06% in January

NEW DELHI: Retail inflation based on consumer price index (CPI) eased to 16-month low of 4.06 per cent in January, mainly due to a sharp decline in food prices, , government data showed on Friday.

The inflation number stood within the Reserve Bank of India's (RBI's) target of 2-6% for the second consecutive month.

The figure stood at 4.59 per cent in December last year.

The rate of price rise in the food basket was 1.89 per cent in January, significantly down from 3.41 per cent in December.

The central bank, which mainly factors in retail inflation while arriving at key policy rates, has been mandated by the government to keep inflation at 4 per cent (+, - 2 per cent).

The central bank had maintained status quo in the policy rate earlier this month due to high inflation.

In another set of data released by the government, industrial production grew by 1 per cent in December.

According to the Index of Industrial Production (IIP) data, the manufacturing sector output grew by 1.6 per cent in December 2020. While, mining output declined by 4.8 per cent, and power generation grew 5.1 per cent in December 2020.

The industrial production had plunged 18.7 per cent in March last year following the Covid-19 outbreak and remained in the negative zone till August 2020.

With the resumption of economic activities, factory output posted growth of one per cent in September. The IIP had grown by 4.2 per cent in October. In November 2020, the factory output contracted by 2.1 per cent, a tad higher than the provisional estimates of 1.9 per cent decline.