Retail inflation picked up marginally in March to 2.86 per cent compared with 2.57 per cent in February, government data showed on Friday.
Retail inflation picked up marginally in March to 2.86 per cent compared with 2.57 per cent in February, government data showed on Friday. Analysts polled by Reuters had forecast March’s annual increase in the consumer price index at 2.80 percent.
Inflation in food basket surged to 0.3 per cent in March from (-) 0.66 per cent last month.The rate of price rise was also higher in ‘fuel and light’ category. The inflation in the segment rose to 2.42 per cent as against 1.24 per cent in February.
Separate data showed industrial output growth stood flat at 0.1 per cent in February on account of slowdown in the manufacturing sector, according to data released by the Central Statistics Office (CSO). Factory output as measured in terms of the Index of Industrial Production (IIP) had grown by 1.7 per cent in the month of January 2019.
In February 2018, the factory output had grown by 6.9 per cent. During April-February 2018-19, industrial output grew at 4 per cent as against 4.3 per cent in the same period of the previous fiscal.
“These CPI and IIP numbers together constitute a clear signal for the RBI’s MPC to unanimously go aggressive on a massive rate cut program, which it did not pursue with its last 25 basis point rate cut. Now, all data is in. Logically, an IIP growth rate of 0.1% in the presence of a benign CPI growth of 2.86% is a call to arms for an unfettered growth stimulus. With the world on the brink of a serious slowdown as evidenced by the inversion of the U.S. yield curve, the time for a serious, organic stimulus driven by monetary policy in India is now. It would be logical to expect a 50 to 75 basis point easing at the next MPC”, Ranjan Chakravarty of MSE said.