The cumulative growth in three sectors during April-December 2015 over the corresponding period of 2014 has been 2.3 percent, 3.1 percent and 4.5 percent respectively.
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India’s Index of Industrial Production (IIP) for the month of December has contracted 1.3 versus -3.2 percent in November, while the Consumer Price Index (CPI) for the month of January has come in flat at 5.69 percent compared with 5.6 percent reported for the month of December.
The central bank could therefore face some challenges in containing retail inflation within its expected level of 5% by the end of the 2016-17 fiscal, said analysts.
Jaitley is under pressure to relax fiscal deficit targets in the budget and ramp up public spending to give the economy more momentum.
Retail food prices last month were up 6.85 per cent on year, compared with a 6.40 per cent recorded in December. Like earlier months, the key driver of CPI inflation once again had been food inflation.
Industrial output data further underscored that risk as capital goods production, a proxy for investments, fell almost 20 percent year-on-year in December. While consumer durables witnessed a 16.5% jump in December, aided by the low base (it had contracted 9.2% a year before), non-durables output dropped 3.2% in December.
But vegetable prices moved up fairly at 6.39 per cent as prices of “pulses and its products” continued to stay elevated.
That conflicts with Friday’s industrial production numbers that show a 2.4% contraction in manufacturing output.
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Some other important items that have registered high positive growth include “Woollen Carpets” (184.1%), “Telephone Instruments including Mobile Phone and Accessories” (141.1%), “Di Ammonium Phosphate (DAP)’ (46.8%), “Transformers (small)’ (38.8%), “Wood Furniture” (36.9%), “Paraxylene” (32.3%), “Commercial Vehicles” (28.7%), ‘Gems and Jewellery” (27.1%), ‘PVC Pipes and Tubes” (24.6%) and ‘Polypropylene (including co-polymer)’ (22.2%). This suggests private demand is yet to see a sustained recovery, thanks to the rural distress following a second straight year of deficient monsoon and a crash in global commodity prices.
