On Friday, data released by the Ministry of Statistics and Programme Implementation (MoSPI) showed that the Consumer Price Index (CPI), the measure for India's retail inflation, eased to 4.06% in the month of January, when compared to 4.59% seen in December.
In a separate release, the ministry's data showed that the Index of Industrial Production (IIP) grew 1% for December 2020. In comparison, the factory output in the country had contracted 1.9% in November and grew 0.4% in December 2019.
IIP data showed that the manufacturing sector output grew by 1.6% in December 2020, mining output declined by 4.8%, while power generation grew 5.1%.
CPI data has come within the Reserve Bank of India's (RBI) upper margin of 6% for the second consecutive month. The retail inflation data is one of the important factors that is taken into consideration by the government in its bi-monthly monetary policy. The central bank has been mandated by the central bank to keep retail inflation within the range of 4% with a margin of 2% on either side.
Meanwhile, industrial production has been hit due to the COVID-19 since March last year when IIP contracted by 18.7% in the month.