NSO Data on Retail Inflation and IIP

National Statistical Office (NSO) released its data on “retail inflation and Index of Industrial Production (IIP)” on October 12, 2021.

Key facts

  • As per IMF, India’s retail inflation relaxed in September 2021, reducing to a five-month low. This was because of favourable comparison with year 2020 and moderating food prices that offset an increase in the cost of crude oil & fuel.
  • Consumer price inflation decreased sharply to 4.35% in September 2021 as compared to 5.3% in August. This was the third consecutive month within the tolerance band of Reserve Bank of India (RBI).
  • In September 2020, Consumer Price Index-based (CPI) inflation was 7.27%.
  • According to NSO Data, inflation in food basket relaxed to 0.68% in September 2021, significantly decreased by 3.11% as compared to August.


Government has tasked the Reserve Bank of India (RBI) to keep CPI-based inflation at 4%, with a tolerance band of 2% on both the sided. RBI usually factors in CPI-based inflation while launching its bi-monthly monetary policy.

CPI headline momentum

According to RBI Governor, Shaktikanta Das, CPI headline momentum is moderating. This momentum along with favourable base effects could soften the inflation in near term.

CPI inflation

For the year 2021-22, RBI has projected the CPI inflation at 5.3% in first quarter, 5.1% in second, 4.5% in third while 5.8% in fourth quarter of the fiscal.

Index of Industrial Production (IIP)

As per NSO, IIP has increased by 11.9% in August 2021, against 11.5% in July. Data shows that, output of manufacturing sector increased to 9.7% in August 2021. In the same month, mining output increased to 23.6% while power generation surged to 16%. In August 2020, IIP had contracted 7.1%.




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