RBI’s target of retail inflation, industrial production growth still sluggish

Retail inflation moderated in July due to lower food prices and less supply chain problems. (Image- Reuters)

On the retail inflation front, there was relief last month and it remained within the target set by the central bank RBI. In July last month, this rate was 5.59 percent. RBI (Reserve Bank of India) has set inflation target of 2-4 percent but it also has a margin of 2 percent i.e. it is within RBI’s target of up to 6 percent. The government released the retail inflation data on Thursday, 12 August. In the two months before July, this inflation rate was higher than the RBI target. It has softened due to lower food prices and less supply chain problems.

On the other hand, the Industrial Production (IIP) figures were not encouraging. According to the official data released for June, the IIP (Index of Industrial Production) grew at a rate of 13.6 per cent in June 2021, which is higher because of the base effect. In June 2020 last year, it had shrunk by 16.6 per cent. IIP is still 5.2 percent lower than the level before Corona i.e. June 2019. With this, there are still signs of industrial recovery not getting back on track.

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