According to better economic data figures released in the month of June 2021, Indian economy, according to experts, had turned a corner and had started recuperating. Consequently, in another positive news for Indian economy, India’s retail inflation had reportedly eased to 6.26 per cent in June as compared to 6.3 per cent in May. This can be corroborated by the government data released by the MoSPI.
Given the constrained supply due to partial lockdown in states, retail inflation had ventured out of RBI’s tolerance margin for the month of May. But given latest data, retail inflation is plummeting due to easing of lockdowns in various states due to falling covid cases in the economy. The higher retail inflation in May can be attributed to soaring fuel prices and food items that got costlier. Additionally, government’s pursuit to raise taxes from the fuel can be blamed for soaring fuel prices in the economy.
According to the ministry of statistics and programme implementation data, food inflation rose to 5.15 per cent in June. Compared to economic data in May, it was up from 5.01 per cent. It is to be noted that the latest CPI figures are still way above the Reserve Bank’s tolerance level of 4 (+/- 2) per cent.
For evaluation, during the month of June 2021, NSO had collected prices from 99.6 per cent villages. Additionally, data was also collected from 98.6 per cent urban markets. The MoSPI stated that market-wise prices reported therein were 78.7 per cent and 82 per cent for rural and urban respectively.
picture credits- economic times
Industrial output
According to the data released on industrial output for the month of May, Index of Industrial Production (IIP) reportedly rose to 29.3 per cent in the month over a low-base effect last year. The industrial data was released by the National Statistical Office (NSO). The data shows manufacturing sector output surged by 34.5 per cent in the month of May. Additionally, mining output climbed 23.3 per cent and power generation increased by 7.5 per cent.
On the other hand, it is to be noted that the industrial output, had shrunk by 33.4 per cent in May last year. This was due to the stringent lockdown that was placed when Covid-19 had hit the Indian economy hard.
Industrial production has been hit due to coronavirus since March last year. It had shrunken 57.3 per cent in April 2020 due to decline in economic activities in the wake of the lockdown to curb the spread of coronavirus infections.