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Declining Food Prices Sees Retail Inflation Drop To 4.59%

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Retail inflation fell sharply to 4.59 per cent in December, mainly due to declining food prices, government data showed in report by PTI. Retail inflation based on the Consumer Price Index (CPI) was 6.93 per cent in November.

Food inflation declined to 3.41 per cent in December in 2020, compared to 9.5 per cent in the previous month, according to the data released by the Ministry of Statistics and Programme Implementation. The Reserve Bank of India (RBI) factors in retail inflation while arriving at its monetary policy.

India’s industrial production also contracted by 1.9 per cent in November, according to the Index of Industrial Production (IIP) data. The manufacturing sector output shrank by 1.7 per cent in November 2020.

Mining output also declined 7.3 per cent, while power generation grew 3.5 per cent. The IIP had grown by 2.1 per cent in November 2019. Industrial production has been hit due to the COVID-19 pandemic since March last year when IIP contracted by 18.7 per cent in the month.

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