Thu. Mar 28th, 2024
InflationSource: BusinessNewsDaily

For April 2021, Consumer Price Index-based inflation (CPI) was calculated at 4.29 per cent, the lowest in the past three months. In March, it stood at 5.52 per cent and ranges within the Monetary Policy Committee’s medium-term inflation target range of 4 (+/-2 per cent), as the official data showed on May 12.

Consecutively for 5 months, CPI inflation is falling under the ambit of MPC’s target range. On March 31, the Centre kept the inflation target unchanged for 2021-22 to 2025-26.

Data by the National Statistical Office (NSO) shows that Consumer Food Price Index (CFPI) inflation reduced to 2.02 per cent in April from 4.87 per cent in March. It said, the inflation in the ‘fuel and light’ category remained uplifted at 7.91 per cent in April, while the tobacco, pan, and intoxicants category marked an inflation rate of 9.01 per cent.

While a cost push inflation is still operating through petroleum prices, lower demand for food and beverages, clothing and footwear, transport and communications and miscellaneous goods have driven the overall inflation down,” DK Srivastava, Chief Policy Advisor at EY India told Moneycontrol.

The Monetary Policy Committee led by the RBI Governor Shaktikanta Das anticipated the gross domestic product (GDP) growth to be at 10.5 per cent for FY 2021-22.

Meanwhile, separate government data released on Wednesday showed that the factory output measured by the Index of Industrial Production (IIP) every year rose 22.4 per cent in March 2021, mostly due to the growth in the manufacturing sector.

“After hitting a four-month high in March, the CPI inflation for April eased to 4.29 per cent, near the central point of the RBI target. The inflation figure is a result of the low base recorded last year, coupled with softening of food prices and stable fuel prices. The softening of inflation is a positive development for RBI, though the risk of inflation spike remains on the back of rising global commodity prices,” said Mr Nish Bhatt, Founder & CEO, Millwood Kane International.

By Harshita Sharma

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