The Reserve Bank mainly factors in the retail inflation based on Consumer Price Index (CPI) while arriving at its monetary policy.
As per the data released by Ministry of Statistics and Programme Implementation, inflation in the food basket was 2.02 per cent in April, down from 4.87 per cent in the preceding month.
Aditi Nayar, Chief Economist, ICRA, said given the high base related to the supply disruptions seen during the nationwide lockdown in April 2020, the CPI inflation dipped to a three-month low in April 2021, while printing somewhat higher than the expectations.
Overall, the prevailing localised restrictions appear to have had a limited impact on prices in April 2021, she added. Meanwhile, India’s industrial production grew by 22.4 per cent in March, official data showed.
As per the Index of Industrial Production (IIP) data released by the National Statistical Office (NSO), manufacturing sector output surged 25.8 per cent in March 2021.
Mining output climbed 6.1 per cent and power generation increased by 22.5 per cent in March. The IIP had shrunk by 18.7 per cent in March 2020.
During 2020-21, IIP contracted 8.6 per cent compared to 0.8 per cent contraction in 2019-20.