India mining
Miners work at the Gevra coalmines in the central Indian state of Chhattisgarh.Reuters

India's factory output reversed a three-month trend of contraction and grew 2 percent in February 2016, led by electricity and mining sectors. Retail inflation, or consumer price index (CPI), eased to 4.83 percent in March, according to the latest set of data released by the Indian government Tuesday.

Sixteen of the 22 industry groups registered growth during the month on a year-on-year basis.

The IIP figure is higher than the estimate by Religare Institutional Research, which had pegged factory output growth at about 1.3 percent

On a cumulative basis, factory output, or index of industrial production (IIP), for the April-February period grew 2.6 percent, marginally down from 2.7 percent registered during April to January.

Sectors that led growth

The February IIP growth was driven by electricity and mining sectors that grew at 9.6 percent and 5 percent, respectively, while manufacturing continued to remain weak.

"The Indices of Industrial Production for the Mining, Manufacturing and Electricity sectors for the month of February 2016 stand at 136.1, 194.1 and 181.9 respectively, with the corresponding growth rates of 5.0 percent, 0.7 percent and 9.6 percent as compared to February 2015 (Statement I)," the statement said.

Consumer durables buoyant, FMCG weak

The consumer durables segment grew 9.7 percent, higher than the 5.8 percent growth in January, while consumer non-durables continued to remain sluggish, declining by 4.2 percent in February on the back of 3.1 percent contraction in January.

Retail inflation eases for second straight month

Retail inflation, or consumer price index (CPI), eased to 4.83 percent in March from 5.18 percent in February and a significant improvement from the 17-month high of 5.69 percent in January.

The fall was aided by a marginally lower rate of increase in food prices as compared to February. Food prices rose 5.21 percent, down from 5.30 percent (revised) in January.  

The government also revised the February inflation figure to 5.26 percent.

The next set of inflation data will be released May 12.

retail inflation CPI
A slower rate of increase in food prices enabled retail inflation to fall below 5 percent in February. Picture: Customers shop at a vegetable market in Ahmedabad, India, June 20, 2015.Reuters file
inflation data
Ministry of Statistics & Programme Implementation, government of India
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