India's Industrial Output Strengthens, Inflation at Record Low

Economists expect the RBI to keep its policy rate unchanged this year

Economists expect the RBI to keep its policy rate unchanged this year

"The objective of these changes is to align WPI with GDP and IIP, and hence the 2011-12 base year has been taken", Department of Industrial Policy & Promotion Secretary Ramesh Abhishek said at the press conference.

India's wholesale inflation or Wholesale Price Index (WPPI) for April increased by 3.85 percent for the dame month previous year, government data released on Friday said.

As far WPI is concerned, it slipped to a four-month low of 3.85 per cent in April as both food articles and manufactured items showed cooling in prices.

Consumer prices, the RBI's main policy target, likely rose 3.49 per cent in April, according to a Reuters poll of economists, compared with an increase of 3.81 per cent in March.

India's factory output or Index of Industrial Production (IIP) grew 2.7% in the month of March 2017 as against a drop of 1.2% in February 2017.

Retail inflation eased to 2.99 per cent in April from 3.89 per cent in March because of the lower cost of food items, including pulses and vegetables.

In a statement, Dr. A. Didar Singh, Secretary General, FICCI said, "FICCI welcomes the release of the new WPI series".

Due to the increasing significance of the electricity generation from renewable sources, it has been chose to include the same in the electricity generation figures for compilation of IIP in the new series. The 2004-05 series had 620 items (397 item groups). The committee will meet at least once a year for identifying new items that need to be included in the item basket and removing those that have lost their relevance or are no longer being produced. Similarly, the figure for 2016-17 was 0.7 per cent as against 2.4 per cent in the previous fiscal.

The new series updates the basket and weighting structure of goods conforming to the structure of the economy in 2011-12. The mining sector, however, expanded by 9.7 per cent in March 2017 compared to a growth of 4.7 per cent past year.

The WPI and IIP data based on new series were not statistically comparable with the earlier data based on 2004-05 base year, T.C.A. Anant, India's chief statistician, told reporters.

Coke and refined petroleum product manufacturing, which contributes 7.4 percent to the country's manufacturing, fell to 86.9 from 113.3 YoY.

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