New Delhi: Retail inflation dropped marginally to 7.01 per cent in June mainly due to slight easing in prices of vegetables and pulses, though it remained above the Reserve Bank's comfort level for the sixth month in a row.
The consumer price index (CPI) based inflation stood at 7.04 per cent in the preceding month of May and 6.26 per cent in June 2021.
Inflation in the food basket in June 2022 was 7.75 per cent, compared to 7.97 per cent in the previous month, as per the National Statistical Office (NSO) data released on Tuesday.
The RBI has the mandate to ensure that inflation remains at 4 per cent, with a margin of 2 per cent on either side. However, retail inflation is ruling above the RBI's upper tolerance limit of 6 per cent since January 2022.
As per the data, the inflation print in vegetables eased to 17.37 per cent during the month from 18.26 per cent in May, while for 'pulses and products' it slowed to (-) 1.02 per cent against (-)0.42 per cent.
However, the rate of price rise in 'cereals and products' moved up to 5.66 per cent, from 5.33 per cent in the preceding month. Inflation in the 'fuel and light' category rose to 10.39 per cent as against 9.54 per cent, while that for fruits increased to 3.10 per cent from 2.33 per cent.
Separately, factory output growth strengthened to a 12-month high of 19.6 per cent in May from 6.7 per cent in the previous month.
Factory output, measured in terms of Index of Industrial Production (IIP), had recorded a growth of 27.6 per cent in May 2021 due to low base effect, the data showed.
As per the data released by the ministry of statistics and programme implementation, the manufacturing sector expanded by 20.6 per cent compared to a growth of 32.1 per cent recorded in the year-ago period.
Power sector showed a growth of 23.5 per cent as against 7.5 per cent a year ago, while the mining sector witnessed an expansion of 10.9 per cent in May 2022 compared to a growth of 23.6 per cent last year.
During April-May this year, IIP grew 12.9 per cent as against 67.3 per cent growth in the same period a year ago.
Capital goods output, which is a barometer of investment, showed a growth of 54 per cent in May 2022 against a jump of 74.9 per cent in the year-ago month.
The consumer durables segment grew by 58.5 per cent against a growth of 80.4 per cent a year ago. The primary goods segment, which accounts for nearly 34 per cent of the index, expanded by 17.7 per cent in May compared to 15.8 per cent growth a year ago.
Consumer non-durable segment grew by 0.9 per cent in May compared to a growth of 0.2 per cent in same month a year ago.
The ministry said the growth rates over the corresponding period of previous year are to be interpreted considering the unusual circumstances on account of COVID-19 pandemic since March 2020.
The IIP for the month of April has been revised to 6.7 per cent from provisional estimates of 7.1 per cent released in June. Commenting on inflation numbers, Finance Minister Nirmala Sitharaman said item-by-item monitoring of prices and pointed attack on inflation will need to continue.
"As RBI has estimated, till the start of the second half of the (fiscal) year, both RBI and government will have to be mindful," she told reporters here.
India's fiscal year is from April to March and the second half would be from October.
"We will have to be mindful and watchful of the price movement," she said. "I will keep monitoring (prices) item by item for anything that goes haywire. This pointed attack on inflation will need to continue."
The finance minister also said a favourable monsoon will lead to good production and rural demand.