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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MP HC sets up judicial commission to probe water contamination in Indore
Indore (PTI): The Indore bench of Madhya Pradesh High Court on Tuesday set up a commission of inquiry comprising a former HC judge to probe the issue of water contamination in city's Bhagirathpura, saying the matter requires probe by an independent, credible authority and "urgent judicial scrutiny".
It also directed the commission to submit an interim report after four weeks from the date of commencement of proceedings.
A division bench of Justices Vijay Kumar Shukla and Alok Awasthi constituted the commission while hearing several public interest litigations (PILs) filed simultaneously regarding the deaths of several people in Bhagirathpura due to the consumption of contaminated water.
The HC reserved the order after hearing all the parties during the day, and released it late at night.
The state government on Tuesday told the HC that the deaths of 16 people in Indore's Bhagirathpura area was possibly linked to a month-long outbreak of vomiting and diarrhoea caused by contaminated drinking water.
The government presented an audit report of 23 deaths from the current gastroenteritis epidemic in Bhagirathpura before the bench, suggesting that 16 of these fatalities may have been linked to the outbreak of vomiting and diarrhoea caused by contaminated drinking water.
The report, prepared by a committee of five experts from the city's Government Mahatma Gandhi Memorial Medical College, stated that the deaths of four people in Bhagirathpura were unrelated to the outbreak, while no conclusion could be reached regarding the cause of death of three other people in the area.
During the hearing, the high court sought to know from the state government the scientific basis behind its report.
The division bench also expressed surprise at the state government's use of the term "verbal autopsy" in relation to the report, sarcastically stating that it had heard the term for the first time.
The HC expressed concern over the Bhagirathpura case, stating that the situation was "alarming," and noted that cases of people falling ill due to contaminated drinking water have also been reported in Mhow, near Indore.
In its order, the HC said the serious issue concerning contamination of the drinking water supply in Bhagirathpura area allegedly resulted in widespread health hazards to residents, including children and elderly persons.
According to the petitioners and media reports, death toll is about 30 till today, but the report depicts only 16 without any basis or record, it said.
It is averred that sewage mixing, leakage in the pipeline, and failure of civic authorities to maintain potable water standards have led to the outbreak of water-borne diseases. Photographs, medical reports, and complaints submitted to the authorities prima facie indicate a matter requiring urgent judicial scrutiny, the HC said.
"Considering the gravity of the allegation and affecting the right to life under Article 21 of the Constitution of India and the need for an independent fact-finding exercise, the Court is of the opinion that the matter requires investigation by an independent, credible authority," it said.
"Accordingly, we appoint Justice Sushil Kumar Gupta, former judge of the Madhya Pradesh High Court, a one-man commission of inquiry into the issues relating to water contamination in Bhagirathpura, Indore, and its impact on other areas of the city," the HC added.
As per the order, the commission shall inquire into and submit a report on the cause of contamination -- whether the drinking water supplied to Bhagirathpura was contaminated; and the source and nature of contamination (sewage ingress, industrial discharge, pipeline damage etc).
The panel will also probe the number of actual deaths of affected residents on account of contaminated water; find out the nature of disease reported and adequacy of medical response and preventive measures; suggest immediate steps required to ensure safe drinking water as well as long-term infrastructural and monitoring reforms.
It will also identify and fix responsibility upon the officers and officials found prima facie responsible for the Bhagirathpura water contamination incident, and suggest guidelines for compensation to affected residents, particularly vulnerable sections.
The commission shall have powers of a civil court for the purpose of summoning officials and witnesses; calling up records from the government department, hospitals, laboratories and civic bodies; ordering water quality testing through accredited laboratories; conducting spot inspections.
All state authorities involving district administration, Indore Municipal Corporation, public health engineering department and Madhya Pradesh Pollution Control Board shall extend full co-operation and provide records as sought by the commission, it said.
The state government shall provide office space, staff, and logistical support to the commission, it said.
During the hearing in the day, the state government also presented a status report to the court in this matter.
According to reports, a total of 454 patients were admitted to local hospitals during the vomiting and diarrhea outbreak, of whom 441 have been discharged after treatment, and 11 are currently hospitalised.
According to officials, due to a leak in the municipal drinking water pipeline in Bhagirathpura, sewage from a toilet was also mixed in the water.
