Industrial production growth slows to 3.1% in Apr; inflation eases to record low of 2.18% in May

New Delhi: Industrial production growth slipped to 3.1 percent in April due to poor show by manufacturing, mining and power sectors coupled with lower offtake of capital goods and consumer durables. The factory output measured in terms of the index of industrial production (IIP) had expanded by 6.5 percent in April last year, the data released by the Central Statistics Office (CSO) showed. The CSO also revised upwards the IIP growth figure for March to 3.75 percent from provisional estimate of 2.7 percent released last month. According to the CSO data, manufacturing sector, which constitutes 77.63 percent of the index, grew at 2.6 percent in April compared to 5.5 percent in same month last year. [caption id=“attachment_2486326” align=“alignleft” width=“380”]  Reuters[/caption] Similarly, mining sector output grew at 4.2 percent in the month under review compared to 6.7 percent year ago. Power generation rose by 5.4 percent in April, down from 14.4 percent expansion in April last year. The output of capital goods, which are the barometer of investment in the country, contracted by 1.3 percent in April compared to growth of 8.1 percent a year ago. Similarly, consumer durables or white goods production declined by 6 percent in April against 13.8 percent growth a year ago. As per use-based classification, the growth rates in April 2017 over April 2016 are 3.4 percent in primary goods, 4.6 percent in intermediate goods and 5.8 percent in infrastructure/ construction goods. The consumer non-durables have recorded a growth rate of 8.3 percent. Consumer goods overall grew at 5.8 percent. In terms of industries, 14 out of 23 industry groups in the manufacturing sector have shown positive growth in April 2017 compared to the corresponding month of the previous year. The industry group manufacture of pharmaceuticals, medicinal chemical and botanical products has shown the highest growth of 29.1 percent followed by 17.9 percent in manufacture of tobacco products and 9.5 percent in manufacture of machinery and equipment. On the other hand, the industry group manufacture of beverages has shown the highest negative growth of (-) 19.2 percent followed by (-) 15.6 percent in manufacture of motor vehicles, trailers and semi-trailers and (-) 14.4 percent in manufacture of electrical equipment. Veggies, pulses drag inflation to record low of 2.18% in May Retail inflation fell to a record low of 2.18 percent in May as prices of kitchen staples like vegetables and pulses declined sharply although there was a marginal spike in fruit rates. Clothing, housing, fuel and light also saw lower inflation. Retail inflation dropped to an all time low of 2.18 percent in May. The CPI based retail inflation stood was at 2.99 percent in April 2017. In May 2016, it was at 5.76 percent. The overall food inflation was in negative territory at (-) 1.05 percent during the month. Prices of vegetables declined by 13.44 percent and that of pulses and products by 19.45 percent. Earlier this month, the Reserve Bank had maintained status quo on key lending rate (repo) citing risks to inflation.