India's Retail Inflation Falls To 6.71 Per Cent In July As Food Prices Soften: Govt Data

India's industrial growth, as per the Index of Industrial Production, in June increased to 12.3 per cent, supported by a low base

India's retail inflation, as measured by the Consumer Price Index (CPI), dropped to a five-month low of 6.71 per cent in July, according to data released on Friday by the Ministry of Statistics and Programme Implementation, mainly on account of moderation in food prices.

In June, retail inflation was at 7.01 per cent and it stood at 5.59 per cent in July 2021.

According to the data, food inflation in July 2022 moderated to 6.75 per cent as against 7.75 per cent in June.

The CPI-based retail inflation, however, remained above the Reserve Bank of India's (RBI's) upper tolerance level of 6 per cent. It has remained above the 6 per cent mark for the past seven months. In the first three months of the current fiscal year, retail inflation remained above 7 per cent. 

Despite inflation declined to a five-month low in July, it has now spent 34 consecutive months above the central bank's  medium-term target of 4 per cent, while seven straight months outside the RBI's 2-6 per cent tolerance band.

In its last monetary policy committee meeting on Friday, the RBI had raised the rates by 50 bps to 5.4 per cent--higher than the pre-pandemic level. Rates have increased 140 bps since June.

On the other hand, India's industrial growth, as per the Index of Industrial Production (IIP), in June increased to 12.3 per cent, supported by a low base, a separate data released on Friday by the Ministry of Statistics and Programme Implementation revealed.

According to the Index of Industrial Production (IIP) data by the National Statistical Office (NSO), the manufacturing sector's output grew 12.5 per cent in June 2022. The mining output climbed 7.5 per cent, and power generation increased 16.4 per cent in June 2022. The IIP had grown by 13.8 per cent in June 2021.

The index grew 12.7 per cent April-June 2022 compared to a growth of 44.4 per cent in the same period a year ago. Industrial production has been hit due to the coronavirus pandemic in March 2020, when it had contracted 18.7 per cent.

It shrank 57.3 per cent in April 2020 due to a decline in economic activities in the wake of the lockdown imposed to curb the spread of coronavirus infections.