Retail inflation in the country eased to 4.35 per cent in the month of September from 5.3 per cent witnessed in August, government data released on Tuesday showed. 

It is for the third time in a row that the Consumer Price Index (CPI) fell between 4 to 6 per cent, which is also the Reserve Bank of India’s (RBI) tolerance band for inflation. 

The inflation number recorded in September is considerably lower than the reading in the corresponding month of last year during the pandemic of 7.27 per cent. 

Moreover, it is the lowest inflation growth recorded since April 2021. 

The moderation in the inflation growth rate is mainly on account of the ease in food prices that relaxed to 0.68 per cent as compared to the Consumer Food Price Inflation (CPFI) recorded in August. 

Since the country is witnessing recovery in demand after reopening of the economy, prices have driven up globally. 

Last week, RBI Governor Shaktikanta Das had said that overall, the CPI headline momentum was moderating, which, combined with favourable base effects in the coming months, could bring about a substantial softening in inflation in the near term. 

Meanwhile, industrial production grew by 11.9 per cent in August 2021 from a year earlier, government data showed on Tuesday. The Index of Industrial Production (IIP) recovered in August this year as a result of the base effect due to the pandemic that had affected economic activity last year. The industrial production grew above the 11 per cent mark for the second consecutive month in August.

The industrial production index during the April-August period of the current financial year grew by 28.6 per cent compared to de-growth of 25 per cent in the year-ago period.  

The manufacturing sector, which comprises 77.63 per cent of the IIP, grew by 9.7 per cent in August. The mining output also climbed by 23.6 per cent and electricity grew by 16 per cent. 

The output of capital goods – a barometer of investment, grew by 19.9 per cent in August compared to de-growth of 14.4 per cent in August 2020. The output of consumer durables increased by 8 per cent compared to a decline of 10.2 cent in the year-ago period. 

The output of consumer non-durable goods grew by 5.2 per cent in August 2021 compared to de-growth of 3 per cent in the year-ago period.