New Delhi, January 13: Prime Minister Modi’s demonetisation drive to curb terrorism, black money and corruption has led the inflation rates to go down. Notably, Retail inflation fell to a nearly 3-year low of 3.41 % in December 2016, from 3.63 % in November. This will directly benefit to the consumers in many ways.
According to the data released by index of industrial production on Thursday overall food inflation fell to 1.37 per cent in December last year, from 2.11 % in November. Retail inflation in the vegetables category slipped to minus 14.59 per cent in December. Inflation in pulses and products fell to minus 1.57 %. Retail inflation in cereals and products stood at 5.25 per cent. The Consumer Price Index (CPI) for the month of December stood at 3.4% over 3.63% MoM. CPI food inflation was at 1.37% in December as compared with 2.03% in November 2016.
The Indices of Industrial Production for the Mining, Manufacturing and Electricity sectors for the month of November 2016 stand at 135.9, 181.2 and 191.2 respectively, with the corresponding growth rates of 3.9%, 5.5% and 8.9% as compared to November 2015. The cumulative growth in these 3 sectors during April-November 2016 over the corresponding period of 2015 has been 0.3%, -0.3% and 5% respectively.
Whereas, the industry group ‘Radio, TV and communication equipment & apparatus’ has shown the highest positive growth of 32.2% followed by 23.2% in ‘Electrical machinery & apparatus n.e.c.’ as well as in ‘Motor vehicles, trailers and semi-trailers’.
On the other hand, ‘Furniture; manufacturing n.e.c.’ has shown the highest negative growth of -16.5% followed by -5.2% in ‘Office, accounting and computing machinery’ and -3.2% in ‘Tobacco products’.
As per use-based classification, the growth rates in November 2016 over November 2015 are 4.7% in Basic goods, 15% in Capital goods and 2.7% in Intermediate goods. The Consumer durables and Consumer non-durables have recorded growth of 9.8% and 2.9% respectively, with the overall growth in Consumer goods being 5.6%.
Some important items showing high positive growth during the current month over the same month in previous year include ‘Cable, Rubber Insulated’ (185%), ‘Tractors (complete)’ (95%), ‘Telephone instruments including mobile phone and accessories’ (42.8%), ‘Passenger cars’ (29.5%), ‘Aviation Turbine Fuel’ (28.3%), ‘Plastic Machinery including Moulding Machinery’ (24.1%) and ‘Sugar’ (21.2%).
Some important items that have registered high negative growth include ‘H R Sheets’ [-49.7%), ‘Kerosene’ [-35.7%], 'Molasses’ [-26.2%], ‘Gems and Jewellery’ [-25.4%], ‘Polypropylene (including co-polymer)' [-23.1%] and ‘Sugar Machinery’ [-20.4%].
After the demonetisation policy was announced by government, PM Modi and Finance Minister Arun Jaitley repeatedly said that there will be some consequences of it and inflation rates will definitely fall.