India’s retail inflation rises to 4.87% in May; industrial production rises 4.9% in April

India’s retail inflation rose to a four-month high in May, led by rising prices of food items. Inflation based on consumer price index (CPI) stood at 4.87 per cent in May against 4.58 per cent in April, according to data released by the Central Statistics Office.

Food inflation rose to 3.10 per cent last month as compared to 2.80 per cent in April.

In the case of fuels, the inflation for the month worked out to 5.8 per cent compared with 5.2 percent in April. Oil is India’s biggest import item and an increase in oil prices push inflation up and widens the trade deficit, putting pressure on the rupee.

May is the seventh month in a row in which retail inflation is higher than RBI’s medium-term target of 4 per cent.

The RBI had earlier this month raised key policy rate by 25 basis points, anticipating higher inflation. One basis point is one-hundredth of a percent.

Meanwhile India’s industrial activity gained pace in April after moderating in the previous month led by manufacturing and mining activity.

Growth as measured by the Index of Industrial Production (IIP) was 4.9 per cent in April compared with 4.5 per cent in March, data released by the statistics office show. The industrial growth was 3.2 per cent in April 2017.

As per the released data, the manufacturing sector, which constitute more than 77 per cent of the index, recorded a growth of 5.2 per cent in April, up from 2.9 per cent in the same month, a year ago.

The mining sector too expanded by 5.1 per cent, up from 3 peer cent in April 2017. The growth in power generation however slipped to 2.1 per cent in April 2018, from 5.4 per cent in the year-ago month.

Shekhar Ghosh is consulting editor, He has edited and written for publications like Business India, Business Standard, Business Today, Outlook and many other international publications. He can be reached at


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