Corona Kahra said the economy was on a downward spiral, with data released on Monday showing a sharp fall in industrial output to minus 8 per cent in August and a rise in inflation to 7.34 per cent in September.
The stagnant cycle of the manufacturing sector, mining and power generation, mainly due to the corona lockout, has led to a sharp fall of eight per cent in the industrial production index in August. According to the index, the manufacturing sector contracted by 8.6 per cent in August 2019, while the mining and power sector contracted by 9.8 per cent and 1.8 per cent, respectively. It is noteworthy that even in August 2019, the position of the Industrial Production Index was minus 1.4 per cent.
An explanation released by the Ministry of Statistics and Plan Implementation, which released the figures, said it would not be appropriate to compare the performance of industrial production during Corona’s illness with that of pre-Corona. In a statement issued by the ministry, the ministry said that corona lockouts and restrictions were being phased out and the results were being seen. He claimed that the economic cycle has improved to a different extent and is reflected in the figures released from time to time.
Inflation, as measured by the Retail Price Index (WPI), was 7.34 per cent in September. This is the highest inflation in the eight months since January this year. Inflation, as measured by the Wholesale Price Index (WPI), was 6.69 per cent in August.
Food inflation, which is mainly part of the daily diet, has risen to 10.68 per cent, leading to a rise in the overall inflation index. Prices of vegetables, pulses, meat, eggs and fish have been at record highs since January 2020, according to data released by the Ministry of Statistics. Excluding foodgrains and fuels, retail inflation fell to 5.36 per cent, down from 5.44 per cent in August.
What is the result?
The Reserve Bank of India (RBI) has kept interest rates unchanged for the second consecutive meeting of its bi-monthly credit policy review as a result of the recent spike in inflation. Inflation based on retail prices is considered by the central bank and it is satisfactory for it to stay within the four per cent (minus two per cent) level.