Rising inflation hinder more hikes
Inflation checks at what extent a set of goods & services has turned expensive into certain period, usually one year.
India's macro-economic factors expose a progress in the economy. India's manufacturing index surged significantly, while industrial production index grew marginally for the month of April. The Inflation inched up to 4.9% in the past month.
India's industrial output advanced by 4.9% in April up from 4.4% in March, strongly helped by capital goods production and overall rise in the manufacturing output. The manufacturing sector which contributes mainly to the industrial production index (IIP) stood at 5.2% against 4.6% in March. The other sectors such as electronics, pharma, auto, metals and food continued their growth performance. On the other hand, power generation and infrastructure components witnessed contraction in output in April month compared to March. The electricity generation rose by 2.1% in April against 5.9% in March 2018. The infrastructure sector also improved little by little at 7.5% in April against 8.9% in March 2018.
The inflation also inches up to 4.87% in May versus 4.58% in the month of April 2018, on the account of rise in food inflation which surged to 3.1% from 2.8%. The rising inflation has fuelled rate hike state of affairs in the economy. The Reserve Bank of India increased rates in the recent bi-monthly policy and rising inflation hinder more hikes in the upcoming policy meet.
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