On the inflation front, the consumer price index (CPI) fell to 2.33 per cent in November, from 3.38 per cent in October (Chart 1), well below the Monetary Policy committee’s target. In large part, the decline in headline inflation rate was driven by the contraction in the food price index, though even core inflation, which has remained sticky so far, moderated in November (Chart 2).
Much of the decline in the food price index is driven by the contraction in the CPI (vegetables and pulses) as seen in Chart 3. Further, the correction in retail fuel prices (Chart 4) and the waning impact of the revision in house rent allowance (HRA) also weighed down the index. On the growth front, industrial output rose by a healthy 8.1 per cent in October, up from 4.5 per cent in the previous month (Chart 5), driven by stronger manufacturing growth at 7.9 per cent in October, from 4.6 per cent in the previous month (Chart 6). Part of the surge is due to inventory adjusted as the festival season started late this time and a favourable base effect, say economists.
Consumer durables also registered a strong performance, growing at 17.6 per cent in October, from 5.2 per cent the
previous month (Chart 7), while capital goods, which connote investment in the economy, grew at a robust 16.8 per cent, up 6.5 per cent the month before (Chart 8).
 "illustration, wpi, cpi, deflation")