- Food inflation rose to 10.68 per cent in September from 9.05 per cent in August, leading to an increase in consumer inflation (symbolic photo).
- In September 2019, consumer inflation was 3.99 per cent
- The September 2020 figure is higher than the RBI’s estimate of 2 to 6 per cent
Inflation rose 0.65 per cent in September
The country has received headlines on both inflation and industrial production fronts. Consumer inflation rose 65 basis points to 7.34 per cent in September. Inflation in August was 6.69 per cent. This is due to the rise in food prices. It is at its highest level in the last 8 months. However, it is almost twice as high as in September 2019. It was at 3.99 percent at the time. Industrial production (IIP) also declined by about eight per cent during the month of August. This was stated in the information released by the government.
Relief was granted in August
Consumer price inflation eased slightly in August 2020 due to a slight decline in food inflation. It had fallen to 6.69 per cent from 6.73 per cent in July. Retail inflation stood at 3.99 per cent in September 2019, higher than the RBI estimates for September 2020. The RBI had projected between 2 and 6 per cent.
Manufacturing sector slumped in August
Manufacturing output fell 8.6 per cent in August, while output in the mining and power generation segments fell 9.8 per cent and 1.8 per cent, respectively, according to IIP data. In August 2019, industrial production fell by 1.4 percent. Due to the Covid-19 epidemic, the IIP figures are not comparable to the same period of the previous year. Restrictions are gradually being eased and performance in the industry sector is improving significantly.
Statistics released by NSO
According to data released by the National Statistical Organization (NSO) on Monday, food inflation rose to 10.68 per cent from 9.05 per cent in August. On the other hand, the Industrial Production (IIP) front also suffered a setback in August. According to government figures, industrial production fell 8 percent last month. Behind this, production has been low, mainly in the manufacturing, mining and power generation sectors. In August 2019, it fell 1.4 percent.
The impact of the monsoon on the economy
Continuous inflation has affected the Indian economy. The country’s GDP fell by 23.90 per cent in the April-June quarter. However, in the latest scenario, the RBI cut the repo rate by 115 basis points or 1.15 per cent. No changes were made at the RBI meeting this month. Now there is an unlocked state and it is hoped that economic activity can pick up speed. Its effect is also seen on GST collection. GST Collection Covid-19 is close to the previous position.
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