New Delhi: Reviving hopes of manufacturing recovery, industrial production grew at five-month high of 3.8 percent in November last year, but retail inflation inched up to 5 percent in December.
The focus will now be on RBI's stance on interest rate as a decline in inflation could have bolstered hopes for a rate cut.
Manufacturing output, which constitutes over 75 percent of Index of Industrial Production (IIP), grew by 3 percent in November, compared to a dip of 2.6 percent in the same month in 2013, as per to the data released by the government.
During April-November, manufacturing output saw a growth of 1.1 percent compared to a contraction 0.4 percent in the year-ago period.
The factory output, as measured by IIP, had declined by 1.3 percent in November 2013.
For the April-November period of this fiscal, IIP is up 2.2 percent, as against 0.1 percent in the same period of the last fiscal.
As regards retail inflation, the Consumer Price Index (CPI) inched up marginally to 5 percent in December from the 4.38 percent in November.
The industry, however, continued its demand for a rate cut by the Reserve Bank of India in its February 3 policy review to strengthen the economic recovery ignoring the slight rise in retail inflation.
Hopes of rate cut were building up after retail inflation touched 4.38 percent, the lowest level since government started computing the new series of data in January 2012.
Commenting on the data, CII Director General, Chandrajit Banerjee said, "a marginal rise in retail inflation in December...Should not prevent the RBI from cutting benchmark interest rates in its forthcoming monetary policy announcement."
Rate cut he added, is important as "investments have not shown a significant pick up and consumer durables continue to show a muted performance."
Overall, 16 of the 22 industry groups in manufacturing showed positive growth in November.
According to IIP data, the output of the mining sector grew by 3.4 percent in November.
During the April-November period, the production has grown by 2.5 percent, compared to a contraction of 2.1 percent during the first eight months of the last fiscal.
The production of capital goods, a barometer of demand, grew by 6.5 percent in November.
In April-November, the output grew by 4.9 percent.
Power generation grew by 10 percent in November. In April-November, electricity production is up 10.7 percent.
The consumer goods output declined by 2.2 percent in November. For April-November, the segment showed a contraction of 5.7 percent.
Consumer durables production declined by 14.5 percent in November. For April-November, it showed a decline of 15.9 percent.
However consumer non-durable goods output grew by 6 percent in November. In April-November, the segment grew by 1.9 percent.
On inflation front, food inflation rose to 4.78 percent in December 2014.
Retail prices of vegetables increased by 0.58 percent. Fruits were costlier by 14.84 percent.
Items under food and beverages witnessed a rise of 5 percent in December, over 3.5 percent in previous month.
