IIP contracts 1.2%, retail inflation rises

Retail inflation inched up to a five-month high in March on the back of higher fuel prices, while industrial output contracted to a four-month low, posing fresh challenges for policymakers.

Inflation, as measured by the consumer price index, rose an annual 3.8% in March, faster than previous month's 3.7%. While food prices remained calm, fruits, sugar and confectionary showed signs of firmness.

Industrial output fell 1.2% year-on-year in February compared with 1.9% growth in the same month last year. During April-February, industrial output rose 0.4% compared with an increase of 2.6% in April-February 2015-16. The surprise contraction in February came against the backdrop of a rebound in January as the sector emerged from demonetisation.

The industrial output data has remained volatile, triggering calls for revamping the methodology . Economists said the February numbers were disappointing. 

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