Retail inflation inches up to 7% in August on costlier food items

Retail inflation inched up to 7 per cent in August from 6.71 per cent in July mainly due to higher food prices, government data showed on Monday.

The consumer price index-based inflation is above the Reserve Bank’s comfort level of 6 per cent for the eighth month in a row. Food inflation, which accounts for nearly half the CPI (consumer price index) basket, shot up as prices of staple crops such as wheat, rice and pulses spiralled on account of a record heatwave.

The RBI factors in retail inflation while deciding on its monetary policy. According to the data released by the National Statistical Office (NSO), inflation in food basket was 7.62 per cent in August, up from 6.69 per cent in July and 3.11 per cent in August 2021.

The rate of price rise was in excess of 10 per cent in case of vegetables, spices, footwear, and fuel and light on annual basis. However, there was contraction in inflation in egg and almost flat in protein rich meat and fish during the month.

Inflation had reached a high of 7.79 per cent in April before decelerating in the next months to 6.71 per cent in July. The government has tasked the RBI to ensure CPI inflation remains at 4 per cent with a margin of 2 per cent on each side.

Industrial production rises in July

Also on Monday, official data revealed India’s industrial production rose 2.4 per cent in July. The IIP had grown 11.5 per cent in July 2021.

According to the Index of Industrial Production (IIP) data released by the NSO, the manufacturing sector’s output grew 3.2 per cent in July 2022.

The mining output contracted 3.3 per cent while power generation increased 2.3 per cent during the same period.

In April 2020, industrial production had contracted 57.3 per cent due to a decline in economic activities in the wake of the lockdown imposed to curb the spread of coronavirus infections.

With agency inputs