India / Retail inflation rises to 3-month high of 5.03% in February

NEW DELHI: Retail inflation based on consumer price index (CPI) rose to three-month high of 5.03 per cent in February from 4.06 per cent in January, government data showed on Friday.

The earlier high was in November 2020 at 6.93 per cent.

The rate of price rise in the food basket jumped to 3.87 per cent in February, as against 1.89 per cent in the preceding month, as per the NSO data.

Inflation in 'fuel and light' category remained elevated at 3.53 per cent during the month vis-a-vis 3.87 per cent in January.

The inflation print in 'oil and fats' moved up to 20.78 per cent from 19.71 per cent.

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

The RBI mainly factors in the retail inflation while arriving at its bi-monthly monetary policy.

The RBI's monetary policy committee (MPC) has been tasked by the government to tame retail inflation based on consumer price index (CPI) at 4 per cent (+,-2 per cent).

In a separate set of data, industrial production re-entered the negative territory by contracting 1.6 per cent in January, mainly on account of the decline in output of capital goods, manufacturing and mining sectors.

While manufacturing sector output contracted by 2 per cent, mining declined 3.7 per cent.

Meanwhile, power generation grew 5.5 per cent during the period under consideration.

The IIP had grown by 2.2 per cent in January 2020.

The worst performance was witnessed by the capital goods sector, which recorded a contraction of 9.6 per cent during the month under review, compared to a 4.4 per cent decline a year ago.