It’s a big double whammy for the Indian economy. In a major setback for policy-makers, consumer inflation has risen to 7.41% in September, much higher than the 7% clocked a month ago. The figure is much above RBI’s tolerance range of 2 to 6%. In what is equally bad news for the economy, industrial growth, measured by the Index of Industrial Production, has shrunk by 0.8% in August. The CPI figure for September is at a 5-month high, fast nearing the April figure after hitting a low of 6.71% in July. The September figure is way above the RBI’s estimate of 6.7% for this fiscal. It is also much higher than what the RBI had predicted for the quarter. However, the 3-month average of inflation for July to September comes in at 7.04%, a little below the 7.1% estimate of RBI. Meanwhile, in a big dampener for the overall economic growth, industrial activity shrunk by 80 basis points in August. The big drag was the manufacturing sector which shrunk by double digits. Aabha Bakaya, Senior Editor, #BusinessTodayTV speaks to Indranil Pan, Chief Economist, Yes Bank to decode the September numbers, watch.
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