New Delhi: Wholesale-price inflation in India posted a 9.11% annual rise in November, falling marginally from 9.73% a month ago, provisional data released on Wednesday show.
The latest price-rise figures may complicate matters for the central bank, which was expected to shift its bias towards growth from inflation in its mid quarter monetary policy review on Friday.
Factory output contracted 5.1% in October, indicating the economy is slowing down at a faster pace than earlier expected. This prompted finance minister Pranab Mukherjee to indicate that the Reserve Bank of India may shift its focus from fighting inflation to promoting growth.
“Fight against inflation has taken a toll on investment,” Mukherjee said on Wednesday. “We must fight back to revive growth as soon as possible.”
Capital goods, which indicate investment demand in the economy, shrank 25.5% in October, data released on Monday showed.
“I expect the present downturn to be temporary and the economy will soon revert back to high growth trajectory,’ Mukherjee said at the Delhi Economic Conclave organised by the finance ministry and National Institute of Public Finance and Policy.
The industry department on Wednesday upwardly revised headline inflation data for September to 10%, the first time the figure touched double-digits in 14 months. The department had earlier said inflation had moderated to 9.72% in September from 9.78% in August.
Kaushik Basu, chief economic adviser to the finance ministry, said that he expected food inflation to moderate below 3% within a month’s time. Food inflation stood at 6.6% for the week ended 26 November.
“We must not overreact to the negative IIP (index of industrial production) figure. However, it will be a grave mistake to put the blame for everything on international situation,” Basu said at the conclave. “Growth needs to our focus now.”