Inflation rises to 4.8 pc in Jun; factory output expands
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New Delhi: Retail inflation rose to a three-month high in June on rising prices of kitchen essentials, while the factory output expanded at a faster pace of 5.2 per cent in May, according to the government data released on Wednesday.
Retail inflation based on Consumer Price Index (CPI) increased to 4.81 per cent in June after declining for four months in a row but remained within the comfort zone of the Reserve Bank.
The Index of Industrial Production (IIP), which reflects the country's factory output, rose to 5.2 per cent in May from 4.5 per cent in April 2023, mainly due to good performance by the manufacturing and mining sectors.
Both the data were released separately by the National Statistical Office (NSO), Ministry of Statistics and Programme Implementation (MoSPI).
The CPI-based inflation moved northwards after declining for four months since February. The RBI, which will be announcing its next set of bi-monthly monetary policy early next month, mainly factors in retail inflation while deciding the benchmark interest rate (repo).
Retail or CPI inflation stood at 4.31 per cent (revised upward from 4.25 per cent) in May and 7 per cent in June 2022. The previous high was recorded in March at 5.66 per cent.
According to the data released by the National Statistical Office (NSO), the inflation in the food basket was at 4.49 per cent in June, higher than 2.96 per cent in May. The food basket accounts for nearly half of the CPI.
The data revealed that the annual rate of price rise was 19.19 per cent in the case of spices, 12.71 per cent in 'cereals and products', 10.53 per cent in 'pulses and products', and 7 per cent in eggs. Fruits too were marginally costlier in June year-on-year.
However, there was a decline in inflation in 'oil and fats' (- 18.12 per cent) and vegetables (-0.93 per cent).
The factory output growth measured in terms of the IIP stood at 19.7 per cent in May 2022, mainly due to a lower base effect.
"The growth rates over the corresponding period of the previous year are to be interpreted, considering the unusual circumstances on account of the COVID-19 pandemic since March 2020," NSO said.
The manufacturing sector's output grew 5.7 per cent in May 2023 against a 20.7 per cent expansion a year ago. Power generation rose 0.9 per cent in May 2023 compared to a growth of 23.5 per cent a year ago.
Mining output rose by 6.4 per cent during the month under review against an 11.2 per cent expansion in the year-ago period.
Commenting on the data, Icra Chief Economist, Head - Research and Outreach, Aditi Nayar said the spike in vegetable prices is set to push the CPI inflation to an uncomfortable 5.3-5.5 per cent in July 2023.
"We expect the vegetable price shock to result in the Q2 FY2024 CPI inflation exceeding the (RBI's) Monetary Policy Committee's last forecast of 5.2 per cent.
"Accordingly, we anticipate that the Committee will retain its hawkish tone in August 2023, keep the repo rate unchanged and signal that a pivot to rate cuts remains distant," she said.
National President of Commodity Participants Association of India (CPAI) Narinder Wadhwa opined that the rise in inflation suggests a potential change in the factors influencing consumer prices.
"It may be influenced by various factors, such as changes in demand-supply dynamics, fluctuations in global commodity prices, government policies, or other economic factors. The rise in inflation is higher than the street's expectations," he said.
The government has tasked the central bank to ensure retail inflation remains at 4 per cent with a margin of 2 per cent on either side.
On IIP data, Nayar said the year-on-year performance of several high-frequency indicators related to freight and traffic movement deteriorated in June 2023 relative to May 2023, such as generation of GST e-way bills, cargo traffic at major ports, rail freight traffic, petrol and diesel sales, PV and 2W production as well as vehicle registrations.
"However, the year-on-year growth in electricity generation, output of Coal India Limited, and finished steel consumption improved in June 2023, relative to the previous month. Based on these trends, Icra expects the year-on-year IIP growth to moderate to about 3-4 per cent in June 2023," she said.
The NSO data further revealed that the capital goods segment grew 8.2 per cent in May this year compared to 53.3 per cent a year ago.
Consumer durables output during the month rose 1.1 per cent against a 59.1 per cent growth in the year-ago period.
Consumer non-durable goods output increased by 7.6 per cent compared to a growth of 1.4 per cent a year earlier.
Infrastructure/construction goods posted a growth of 14 per cent over an 18.4 per cent expansion in the same period a year ago.
The data also showed that the output of primary goods logged 3.5 per cent growth in the month against 17.8 per cent in the year-ago period.
The intermediate goods output in May rose 1.6 per cent compared to a 17.5 per cent growth during the corresponding month last year.
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Kerala polls: Vijayan, Revanth Reddy trade barbs as campaigning ends
Kannur (Kerala)/Hyderabad (PTI): A war of words between Kerala Chief Minister Pinarayi Vijayan and his Telangana counterpart Revanth Reddy turned acrimonious on Tuesday, the final day of campaigning for the April 9 Assembly polls.
The two leaders sparred on the virtual world as well, exchanging letters on their respective social media handles.
The escalation came after Vijayan, responding to Reddy's earlier remarks, used Malayalam expressions considered nearly derogatory, signalling strong disapproval of the Telangana CM's comments.
Reddy, campaigning for the UDF in Kollam district, hit back swiftly, likening Vijayan to PM Narendra Modi.
He said he would take any personal remarks from the senior leader as a "blessing" considering his age, but objected to what he described as insults directed at the people of Kerala. "But you cannot abuse our Kerala people," he said, hours before campaigning drew to a close.
The controversy began after Reddy had said "nee po mone Vijaya" by invoking a famous dialogue from superstar Mohanlal's blockbuster movie "Narasimham" while referring to Vijayan on April 1 during a UDF campaign roadshow in Nemom constituency.
Earlier in the day, while reacting to Reddy's earlier remarks, Vijayan said a CM must maintain basic standards of conduct and questioned whether such dignity was being followed.
In his response to a query, Vijayan used Malayalam words that were seen as nearly derogatory for Reddy, signalling his strong disapproval of the remarks made against him.
Sharply reacting to the CM's objectionable remarks, Congress leader V D Satheesan said Vijayan appeared to have "completely lost composure" and warned that any further deterioration in his conduct would have brought "greater embarrassment" to the state.
After the critical remarks during the press meet, Vijayan wrote on his 'X' handle that political differences are natural, but expressing strong disagreement through personally insulting remarks is an attitude that he rejects. Reddy's statements lacked factual backing.
In a detailed letter attached with the 'X' post addressing the Telangana CM, Vijayan said the experience of the people of Kerala was "vastly different" from what Reddy had portrayed.
He clarified that he did not intend to engage in a debate over the performance of the Telangana government, stating that it was for the people of Telangana and political parties there to assess their government.
Referring to Reddy's comments, Vijayan said the LDF government has been consistently publishing progress reports over the past 10 years on the implementation of its election promises, underlining its commitment to continuous accountability.
He also rejected the allegation of "selective appropriation" of Kerala's achievements, including its top ranking in the NITI Aayog SDG Index, and said such criticism was misplaced.
Dismissing claims of industrial stagnation, Vijayan said Kerala has made significant strides in the startup ecosystem and ease of doing business, adding that these achievements have been widely acknowledged.
He also alleged that key infrastructure projects in Kerala, including the Kochi Metro and Vizhinjam Port, faced delays under previous Congress-led governments at the Centre, while long-pending promises such as a railway coach factory remained unfulfilled.
Vijayan further accused the BJP-led Union government of discrimination against Kerala and said the state has been actively resisting what he described as "anti-federal and undemocratic" policies through legal and political means, including approaching the Supreme Court.
He also rejected Reddy's criticism that the LDF was not vocal enough against the BJP, asserting that Kerala has been at the forefront of defending constitutional values.
Concluding his letter, Vijayan reiterated the state government's commitment to building a "Nava Keralam" and moving forward as a model for others.
On April 1, while addressing party workers in Nemom, Reddy used the popular Malayalam film dialogue "Nee po mone Vijaya". He adapted it to target Vijayan, saying "Nee po mone Vijaya".
Reddy went further, claiming that Vijayan's "time is over" and that his "expiry date has passed".
Responding to these allegations, Vijayan had said that the Telangana CM was "misinformed" and accused him of "ridiculing" Kerala and its people while trying to hide the weaknesses of his own state.
In a later response, Reddy defended his remarks and said that many of the statistics cited by Vijayan were taken from the NITI Aayog SDG Index 2023 24, arguing that the data was already outdated.
Reddy in his letter questioned the veteran Marxist leader's claim that Kerala would become the first state to completely eradicate extreme poverty by late 2025 had been achieved. Further, he chooses to conduct himself respectfully and gracefully in his criticism of the Kerala government's performance, whereas Vijayan opted to use language of poor taste.
Reddy, in his letter on X, said that while he respects NITI Aayog's corruption rankings, he wants to know why the infamous gold smuggling case, linked to individuals connected to the CMO, remains unresolved, and why 4.5 kg of gold allegedly misappropriated from the Sabarimala Ayyappa Temple has not been accounted for.
