Published: Sat, May 13, 2017
Sci-tech | By Jackie Newman

India's retail inflation eases to 2.99 pct in April

India's retail inflation eases to 2.99 pct in April

India released on Friday a new series of wholesale inflation and industrial output data, revising the base year to 2011/12 from 2004/05.

India's wholesale inflation or Wholesale Price Index (WPPI) for the month of April 2017 rose 3.85% as against the same month of a year ago.

The industrial output growth slipped to 2.7 per cent in March, primarily due to sluggish growth in the manufacturing sector, according to the latest IIP data. The IIP growth was 5.5 per cent in March 2016, while for 2016-17, factory output grew by 5 per cent as against 3.4 per cent in the year-ago period.

The Consumer Price Index-based inflation in April stood at 2.99 percent.

The series would be less volatile, as compared to current series. However, it won't end the notorious fluctuation in certain IIP segments, particularly capital goods, because volatility is linked to the production pattern.

The Centre said that the move will make the new WPI conceptually closer to "producer price index". The 2004-05 series had 620 items (397 item groups).

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The EIA also raised its production forecast for 2018 from 9.9 million barrels a day to "almost" 10 million barrels. Stocks at the Cushing, Oklahoma, delivery hub for US crude futures USOICC=ECI fell 438,000 barrels, EIA said.

The new IIP series will cover a new basket of commodities and assign new weights to them, removing obsolete items like typewriters and floppy disks, said G C Manna, former head of the Central Statistics Organisation. The mining sector, however, expanded by 9.7 per cent in March 2017 compared to a growth of 4.7 per cent a year ago.

The largest growth within 1Q17 came during March, when the IIP increased to an all-time high of 109.5 ahead of the April festive season, beating 107.8 recorded during March 2016. The change in the IIP base year is usually undertaken to reflect the changes in the structure and composition of the industry over time because of consumption pattern, technological changes and economic reforms.

A new "food index" is being compiled combining the food items under primary articles and food products under manufactured products.

The IIP base year has also been changed to ensure that it remains more relevant in the years that it is operational, Chief Statistician of India TCA Ananth said at the joint briefing.

RBI's Monetary Policy Committee (MPC), which has a mid-term inflation target of 4 per cent, is not convinced of an easing of inflation as most members at the last meeting expressed concern over upside risks to core inflation.

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